<PAGE>
MARKED TO INDICATE CHANGES FROM POST-EFFECTIVE
AMENDMENT NOS. 4/7/8/9/10/11/12
As filed with the Securities and Exchange Commission on August 28, 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
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / /
POST-EFFECTIVE AMENDMENT NO. 13 /X/
and
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 / /
AMENDMENT NO. 14 /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)
[ ] on (date) pursuant to Paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to Paragraph (a)(2)
[ ] 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, AND FILED A 24F-2 NOTICE FOR THE FISCAL YEAR
ENDED APRIL 30, 1996 ON JUNE 20, 1996.
<PAGE>
UAM FUNDS TRUST
FORM N-1A CROSS REFERENCE
<TABLE>
<CAPTION>
FORM N-1A ITEM NUMBER LOCATION IN PROSPECTUS
- --------------------- ----------------------
<S> <C> <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, 1996
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> <C>
Item 10. Cover Page....................................Cover Page
Item 11. Table of Contents.............................Table of Contents
Item 12. General Information and History...............Investment Adviser; General Information
Item 13. Investment Objectives and Policies............Investment Adviser; 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. 13
PART A
The following Prospectuses are included in this Post-Effective Amendment No. 13:
. BHM&S Total Return Bond Portfolio Institutional Class Shares
. BHM&S Total Return Bond Portfolio Institutional Service Class Shares
. Chicago Asset Management Intermediate Bond Portfolio
. Institutional Class Shares
. Chicago Asset Management Value/Contrarian Portfolio Institutional Class
Shares
. Hanson Equity Portfolio Institutional Class Shares
. IRC Enhanced Index Portfolio Institutional Class Shares
. MJI International Equity Portfolio Institutional Class Shares
. MJI International Equity Portfolio Institutional Service Class Shares
. Newbold's Equity Portfolio Institutional Class Shares
. Newbold's Equity Portfolio Institutional Service Class Shares
. TJ Core Equity Portfolio Institutional Service Class Shares
The following Prospectuses are incorporated by reference to Post-Effective
Amendment No. 12:
. FPA Crescent Portfolio Institutional Class Shares
. FPA Crescent Portfolio Institutional Service 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
<PAGE>
UAM FUNDS
UAM FUNDS SERVICE CENTER
C/O CHASE GLOBAL FUNDS SERVICES COMPANY
P.O. BOX 2798
BOSTON, MA 02208-2798
1-800-638-7983
- -------------------------------------------------------------------------------
BHM&S TOTAL RETURN BOND PORTFOLIO
INSTITUTIONAL SERVICE CLASS SHARES
INVESTMENT ADVISER: BARROW, HANLEY, MEWHINNEY & STRAUSS, INC.
- -------------------------------------------------------------------------------
PROSPECTUS -- AUGUST 28, 1996
The BHM&S Total Return Bond Portfolio is one of a series of investment port-
folios available through UAM Funds Trust (hereinafter defined as "UAM Funds"
or the "Fund"), an open-end investment company known as a "mutual fund." Each
of the Portfolios that make up the Fund have different investment objectives
and policies. In addition, several of the Fund's Portfolios offer two separate
classes of shares: Institutional Class Shares and Institutional Service Class
Shares ("Service Class Shares"). Shares of each class represent equal, pro
rata interests in a Portfolio and accrue dividends in the same manner except
that the Service Class Shares bear fees payable by the class (at the maximum
rate of .25% per annum) to financial institutions for services they provide to
the owners of such shares. The BHM&S Total Return Bond Portfolio currently of-
fers two classes of shares. The securities offered in this Prospectus are
Service Class Shares of the BHM&S Total Return Bond Portfolio.
The BHM&S Total Return Bond Portfolio seeks to provide a maximum long term
total return consistent with reasonable risk to principal by investing in in-
vestment grade fixed income securities of varying maturities. Income return is
expected to be a predominant portion of the Portfolio's total return. Any cap-
ital return on the Portfolio is dependent upon, among other factors, interest
rate changes as well as the average maturity and duration of the Portfolio.
The Adviser believes that by investing in undervalued securities with above
average effective yields and capital appreciation potential, the Portfolio
will generate superior returns over the long term while minimizing volatility
and, therefore, downside risk. There can be no assurance that the Portfolio
will achieve its stated objective.
Please keep this Prospectus for future reference since it contains informa-
tion that you should understand before you invest. You may also wish to review
the BHM&S Total Return Bond Portfolio's "Statement of Additional Information"
dated August 28, 1996, which was filed with the Securities and Exchange Com-
mission and has been incorporated by reference into this Prospectus. (It is
legally considered to be a part of this Prospectus.) Please call or write the
Fund at the above address to obtain a free copy of this Statement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Fees and Expenses.......................................................... 1
Summary: About the Portfolio............................................... 2
Risk Factors............................................................... 2
Financial Highlights....................................................... 3
Performance Calculations................................................... 4
Details on Investment Policies............................................. 4
Investment Limitations..................................................... 8
Buying, Selling and Exchanging Shares...................................... 9
Service and Distribution Plans............................................. 13
How Share Prices are Determined............................................ 14
Dividends, Capital Gains Distributions and Taxes........................... 15
Fund Management and Administration......................................... 15
General Fund Information................................................... 17
UAM Funds--Service Class Shares............................................ 19
</TABLE>
<PAGE>
FEES AND EXPENSES
Investors will be charged various fees and expenses incurred in managing the
BHM&S Total Return Bond Portfolio ("the Portfolio") including:
SHAREHOLDER TRANSACTION EXPENSES: These are the costs entailed in buying,
selling or exchanging shares of the Portfolio. The Portfolio does not charge
investors for shareholder transaction expenses. However, transaction fees may
be charged if you are a customer of a broker-dealer or other financial inter-
mediary who has established a shareholder servicing relationship with the Fund
on behalf of their customers. Please see "Buying, Selling and Exchanging
Shares" for further information.
<TABLE>
<CAPTION>
SERVICE CLASS SHARES
--------------------
<S> <C>
Sales Load Imposed on Purchases:........................ NONE
Sales Load Imposed on Reinvested Dividends:............. NONE
Deferred Sales Load:.................................... NONE
Redemption Fees:........................................ NONE
Exchange Fees:.......................................... NONE
</TABLE>
ESTIMATED ANNUAL FUND OPERATING EXPENSES: These expenses, which cover the
cost of administration, marketing and shareholder communication, and are usu-
ally quoted as a percentage of net assets, are factored into the Portfolio's
share price and not billed directly to shareholders. They include:
<TABLE>
<CAPTION>
SERVICE CLASS SHARES
--------------------
<S> <C>
Investment Advisory Fees:............................. 0.35%
Administrative Fees:.................................. 0.41%
12b-1 Fees: (Including Shareholder Servicing Fees)+:.. 0.25%
Other Expenses:....................................... 0.48%
Advisory Fees Waived and Expenses Assumed............. (0.69)%
-----
Total Operating Expenses (After Fee Waiver and Ex-
penses Assumed):..................................... 0.80%*
=====
</TABLE>
- -------------------
+See "Service and Distribution Plans."
* Barrow, Hanley, Mewhinney & Strauss, Inc., the Adviser, has voluntarily
agreed to waive all or a portion of its advisory fees and to assume operat-
ing expenses otherwise payable by the Portfolio, if necessary, in order to
keep the Portfolio's Service Class Shares total annual operating expenses
(excluding interest, taxes and extraordinary expenses) from exceeding 0.80%
of average daily net assets through December 31, 1997. The estimate above
includes the effect of expense offsets. If expense offsets were excluded,
ananualized Total Operating Expenses for the period ended April 30, 1996
would be 0.83%. (See "Financial Highlights.") It is estimated that, if the
Adviser did not waive fees and assume expenses, the total annual operating
expenses of the Portfolio's Service Class Shares would be 1.49% of average
daily net assets.
For purposes of calculating the estimated fees and expenses set forth above,
it is assumed that the Portfolio's average daily net assets will be $10 mil-
lion.
The Adviser will not be reimbursed by the Fund for any advisory fees which
are waived or expenses which the Adviser may bear on behalf of the Portfolio.
Investors can get a better idea of how the Portfolio's operating expenses
will affect their own investments by examining the following chart. The chart
shows how much a hypothetical investor would pay in expenses, assuming that he
or she made an initial investment of $1,000, earned a 5% annual rate of return
and redeemed his or her investment at the end of the time period indicated.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
------ -------
<S> <C> <C>
Service Class Shares.......................................... $ 8 $26
</TABLE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EX-
PENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE
SHOWN ABOVE.
NOTE TO EXPENSE TABLE
The information set forth in the above table and example relates only to
Service Class Shares of the Portfolio, which shares are subject to different
total fees and expenses than Institutional Class Shares. Service Agents may
charge other fees to their customers who are beneficial owners of Service
Class Shares in connection with their customer accounts. (See "Service and
Distribution Plans.")
1
<PAGE>
SUMMARY: ABOUT THE PORTFOLIO . . .
OBJECTIVE:
The Portfolio seeks to provide a maximum long term total return consistent
with reasonable risk to principal by investing in investment grade fixed in-
come securities of varying maturities. Income return is expected to be a pre-
dominant portion of the Portfolio's total return. Any capital return on the
Portfolio is dependent upon, among others factors, interest rate changes as
well as the average maturity and duration of the Portfolio.
The Adviser believes that by investing in undervalued securities with above
average effective yields and capital appreciation potential, the Portfolio
will generate superior returns over the long term, while minimizing volatility
and therefore downside risk.
There can be no assurance that the Portfolio will achieve its stated objec-
tive.
HOW IS THE PORTFOLIO MANAGED?
Barrow, Hanley, Mewhinney & Strauss, Inc. (the "Adviser") seeks to reduce
the risk that is inherent in the fast-changing bond market while adding to the
return available from a bond market index. (See "Details on Investment Poli-
cies.")
WHO MANAGES THE PORTFOLIO?
The Adviser is a registered investment adviser specializing in the active
management of stock, bond and balanced portfolios for institutional, tax-ex-
empt clients. Founded in 1979, the firm is a wholly-owned subsidiary of United
Asset Management Corporation. The Adviser currently has $18 billion in assets
under management. (See "Fund Management and Administration.")
WHO SHOULD INVEST IN THE PORTFOLIO?
The Portfolio is suitable for investors who seek high current income from
their investments and who wish to have moderate exposure to principal fluctua-
tion.
HOW TO INVEST
The Fund offers shares of the Portfolio to investors without a sales commis-
sion at net asset value next determined after the purchase order is received
in proper form. Share purchases may be made through UAM Fund Distributors,
Inc., broker-dealers and financial intermediaries or by sending investments
directly to the Fund. The minimum initial investment in the Portfolio is
$2,500 with certain exceptions as may be determined from time to time by the
officers of the Fund. The initial investment minimum for IRA accounts is $500.
The initial investment minimum for spousal IRA accounts is $250. The minimum
for any subsequent investment is $100. (See "Buying, Selling and Exchanging
Shares.")
DIVIDENDS AND DISTRIBUTIONS
The Portfolio will normally distribute substantially all of its net invest-
ment income in the form of quarterly dividends. Any realized net capital gains
will also be distributed annually. Distributions will be reinvested in the
Portfolio's shares automatically unless an investor elects to receive cash
distributions. (See "Dividends, Capital Gains Distributions and Taxes.")
HOW TO REDEEM
Shares of the Portfolio may be redeemed on any business day when the New
York Stock Exchange ("NYSE") is open, without cost, at the net asset value of
the Portfolio next determined after receipt of the redemption request. The
Portfolio's share price will fluctuate with market and economic conditions.
Therefore, your investment may be worth more or less when redeemed than when
purchased. (See "Buying, Selling and Exchanging Shares.")
ADMINISTRATIVE SERVICES
UAM Fund Services, Inc. (the "Administrator"), a wholly-owned subsidiary of
United Asset Management Corporation ("UAM"), is responsible for performing and
overseeing administration, fund accounting, dividend disbursing and transfer
agency services provided to the Fund and its Portfolios by third-party service
providers. (See "Fund Management and Administration.")
RISK FACTORS
Investing in the Portfolio entails a number of risks. As with any bond in-
vestment, shares of the Portfolio will generally rise in value when interest
rates fall and vice versa. In addition, you should consider the following fac-
tors that could effect the Portfolio's rate of return:
2
<PAGE>
. The fixed income securities held by the Portfolio will be affected by
general changes in interest rates resulting in increases or decreases in
the value of the securities. The value of fixed income securities can be
expected to vary inversely to the changes in prevailing interest rates,
i.e., as interest rates decline, the market value of fixed income securi-
ties tends to increase and vice versa.
. The Portfolio may purchase securities on a when-issued forward delivery,
and delayed settlement basis which may not earn interest until issued and
may decline or appreciate in market value prior to their delivery to the
Portfolio.
. The Portfolio will invest in investment grade debt securities, but re-
serves the right to hold securities that have been downgraded. Adverse
economic and corporate changes and changes in interest rates may have a
greater impact on issuers of lower rated debt securities which the Port-
folio may hold, which may lead to greater price volatility. Also, lower
rated securities may be more difficult to value accurately or sell in the
secondary market.
. The Portfolio may invest in repurchase agreements which entail a risk of
loss should the seller default on its transaction.
. The Portfolio may lend its investment securities which entails a risk of
loss should a borrower fail financially.
Further information about these and other risk factors is contained in the
"Details on Investment Policies" section of this Prospectus.
FINANCIAL HIGHLIGHTS
The following table provides selected per share data and ratios for a share
outstanding throughout the period presented of the BHM&S Total Return Bond
Portfolio Service Class Shares and is part of the Portfolio's Financial State-
ments included in the Portfolio's 1996 Annual Report to Shareholders which is
incorporated by reference into the Portfolio's Statement of Additional Infor-
mation. The Portfolio's Financial Statements have been audited by Price
Waterhouse LLP whose opinion thereon (which is unqualified) is also incorpo-
rated by reference into the Portfolio's Statement of Additional Information.
The following information should be read in conjunction with the Portfolio's
1996 Annual Report to Shareholders.
<TABLE>
<CAPTION>
NOVEMBER 1, 1995**
TO
APRIL 30, 1996+++
------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD......................... $10.00
------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income+..................................... 0.27
Net Realized and Unrealized Loss on Investments............ (0.27)
------
Total from Investment Operations......................... --
------
DISTRIBUTIONS
Net Investment Income...................................... (0.16)
------
NET ASSET VALUE, END OF PERIOD............................... $ 9.84
======
TOTAL RETURN................................................. (0.07)%++
======
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands)........................ $2,871
Ratio of Expenses to Average Net Assets+..................... 0.83%*#
Ratio of Net Investment Income to Average Net Assets+........ 5.44%*
Portfolio Turnover Rate...................................... 55%
</TABLE>
- -------
*Annualized
**Commencement of Operations.
+ Net of voluntarily waived fees and expenses assumed by the Adviser of $0.20
per share for the period ended April 30, 1996.
++ Total return would have been lower had certain fees not been waived and ex-
penses assumed by the Adviser during the period.
+++ Per share amounts for the period ended April 30, 1996 are based on average
outstanding shares.
# The Ratio of Expense to Average Net Assets excludes the effect of expense
offsets. If expense offsets were included, the Ratio of Expenses to Average
Net Assets would be 0.80%* for the period ended April 30, 1996.
3
<PAGE>
PERFORMANCE CALCULATIONS
The Portfolio measures performance by calculating yield and total return.
Both yield and total return figures are based on historical earnings and are
not intended to indicate future performance.
Yield refers to the income generated by an investment in the Portfolio over
a given period of time, expressed as an annual percentage rate. Yields are
calculated according to a standard that is required for all bond funds. As
this differs from other accounting methods, the quoted yield may not equal the
income actually paid to shareholders.
Total return is the change in value of an investment in the Portfolio over a
given period, assuming reinvestment of any dividends and capital gains. A cu-
mulative or aggregate total return reflects actual performance over a stated
period of time. An average annual total return is a hypothetical rate of re-
turn that, if achieved annually, would have produced the same cumulative total
return if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same as
actual year-by-year results.
Performance will be calculated separately for Institutional Class and Serv-
ice Class Shares. Dividends paid by the Portfolio with respect to Institu-
tional Class and Service Class Shares, to the extent any dividends are paid,
will be calculated in the same manner at the same time on the same day and
will be in the same amount, except that service fees and any incremental
transfer agency costs relating to Service Class Shares will be borne exclu-
sively by that class. The Fund will include performance data for both Institu-
tional Class and Service Class Shares of the Portfolio in any advertisement or
information including performance data of the Portfolio.
The Portfolio's performance may be compared to data prepared by independent
services which monitor the performance of investment companies, data reported
in financial and industry publications, and various indices as further de-
scribed in the Portfolio's Statement of Additional Information.
The Portfolio's Annual Report to Shareholders for the most recent fiscal
year end contains additional performance information that includes comparisons
with appropriate indices. The Annual Report is available without charge upon
request to the Fund by writing to the address or calling the phone number on
the cover of this Prospectus.
DETAILS ON INVESTMENT POLICIES
INVESTMENT STRATEGY
The Portfolio seeks to achieve its objective by investing at least 90% of
its total assets in a diversified portfolio of the following dollar-denomi-
nated investment grade issues of varying maturities: U.S. Treasuries and Agen-
cies; zero coupon obligations; mortgage-backed securities; asset-backed secu-
rities; corporate bonds; municipal bonds; and domestic, Yankeedollar and Euro-
dollar bonds. These issues may have fixed, variable or floating rates of in-
terest. As a matter of policy, the Adviser does not intend to invest in or
utilize futures, options or other complex derivative instruments or securi-
ties.
The Adviser expects to actively manage the Portfolio in order to meet the
investment objective. To produce favorable returns, the Adviser will invest in
securities that it believes to be undervalued, generating an effective yield
advantage versus the market. To control the volatility of returns, the Portfo-
lio will exhibit a high current yield, a high quality and a conservative matu-
rity structure.
The Adviser's decision process will focus on security selection, sector con-
centration and yield curve positioning. The Adviser will not engage in eco-
nomic forecasts in an attempt to "time the market" since it believes that
there are too many economic and political variables on a domestic and interna-
tional basis to do so successfully on a consistent basis. Therefore, the Port-
folio will maintain a conservative maturity structure, with securities being
diversified along the yield curve. The Portfolio's average weighted maturity
will generally be ten years or less, with the average weighted duration compa-
rable to that of the Salomon Brothers' Broad Investment Grade Index which is
approximately five years. Duration compares interest rate risk between securi-
ties with different coupons and different maturities, summarizing in a single
number the price sensitivity of a bond--how a bond's maturity and coupon rate
affect its exposure to interest rate risk. Duration involves the application
of several principles: as the maturity of a bond increases, duration increas-
es; as the coupon of a bond increases, duration decreases; generally, the
lower the coupon payment, the higher the duration; and duration decreases as
the frequency of the coupon payment increases. Generally, 10% or less of the
Portfolio's assets will be invested in various short-term investments. Please
see "Short-Term Investments" for a list of the short-term instruments in which
the Portfolio may invest.
The Adviser's security selection process begins by analyzing a bond's yield
to maturity premium (or spread) versus the most recently issued U.S. Treasury
of similar maturity. Having identified bonds with an above-average premium,
the Adviser will then evaluate those factors that will influence the bond's
future premium (i.e., credit quality,
4
<PAGE>
security structure, supply/demand relationships, etc.). The objective of this
process is to identify those issues whose yield premium will compress or nar-
row over a wide range of potential interest rate change, supporting superior
long term performance. Furthermore, the Adviser will concentrate the Portfo-
lio's holdings in industry sectors and maturity ranges that it believes are
undervalued while seeking a prudent level of diversification.
The investment grade bonds in which the Portfolio will invest are those hav-
ing one of the four highest rating categories at the time of purchase (i.e.
Aaa, Aa, A or Baa by Moody's Investors Service, Inc. ("Moody's) or AAA, AA, A
or BBB by Standard & Poor's Corporation ("S&P")). Bonds rated Baa or BBB have
speculative characteristics and may be more sensitive to changes in the econ-
omy and the financial condition of issuers than higher rated bonds. The Ad-
viser also reserves the right to retain securities which are downgraded by one
or both of the rating agencies if, in the Adviser's judgement, retention of
the securities is warranted. Please refer to the Portfolio's Statement of Ad-
ditional Information for a more detailed description of bond ratings.
MORTGAGE-BACKED SECURITIES
Mortgage-backed securities are collateralized by pools of mortgages assem-
bled for subsequent sale to investors by various governmental agencies and
sponsored organizations as well as by private issuers. The underlying assets
collateralizing the mortgage-backed securities may include single-family, mul-
tifamily and commercial properties. The two fundamental forms of mortgage-
backed securities are pass-throughs and collateralized mortgage obligations
("CMOs"). Pass-throughs produce monthly payments of principal and interest
from the underlying mortgages. CMOs divide the cash flows generated from the
underlying mortgages or mortgage pass-through securities into different seg-
ments known as "tranches" which are then retired sequentially over time in or-
der of priority. The market value and yield of mortgage-backed securities will
fluctuate due to market interest rate change and early prepayments of the un-
derlying mortgages. As prepayment rates on mortgages vary widely, it is diffi-
cult to accurately predict the average maturity of a particular pool of mort-
gages or tranches of CMOs. Although mortgage-backed securities may offer
higher yields than those available from other types of securities, mortgage-
backed securities may be less effective than other types of securities as a
means of "locking in" an attractive rate for an extended period because of the
prepayment feature. The majority of the mortgage-backed securities held by the
Portfolio will carry a guarantee from an agency of the U.S. Government of the
eventual payment of principal and interest.
ASSET-BACKED SECURITIES
Asset-backed securities are collateralized by short maturity loans such as
automobile receivables, credit card receivables, other types of receivables or
assets. Credit support for asset-backed securities may be based on the under-
lying assets and/or provided through credit enhancements by a third party.
Credit enhancement techniques include letters of credit, insurance bonds, lim-
ited guarantees (which are generally provided by the issuer), senior-subordi-
nated structures and over-collateralization.
YANKEEDOLLAR AND EURODOLLAR SECURITIES
Yankeedollar securities are U.S. dollar-based obligations issued inside the
United States by foreign entities. Eurodollar securities are U.S. dollar-based
obligations issued outside the United States by domestic or foreign entities.
Investment in these securities involve certain risks which are not typically
associated with investing in domestic securities. For example, non U.S.-based
issuers are not subject to the same accounting, auditing and financial report-
ing standards as are domestic issuers. There may be less publicly-available
information about non-U.S.-based issuers which may make it difficult to make
investment decisions. Political factors may have an impact in the form of con-
fiscatory taxation, expropriation or political instability in international
markets. Some foreign governments also levy withholding taxes against dividend
and interest income. Although in some countries a portion of the taxes is re-
coverable, the non-recovered portion of foreign withholding taxes will reduce
the income the Portfolio receives from the companies comprising its invest-
ments.
WHEN-ISSUED, FORWARD DELIVERY AND DELAYED SETTLEMENT SECURITIES
Occasionally, the Portfolio will invest in securities whose terms and char-
acteristics are already known but which have not yet been issued. These are
called "when-issued" or "forward delivery" securities. Usually these securi-
ties are purchased within a month of their issue date. "Delayed settlements"
occur when the Portfolio agrees to buy or sell securities at some time in the
future, making no payment until the transaction is actually completed.
The Portfolio will maintain a separate account of cash, U.S. Government se-
curities or other high-grade debt obligations at least equal to the value of
the purchase commitments until payment is made. Typically, no income accrues
on securities purchased on a delayed delivery basis prior to the time delivery
of the securities is made although the Portfolio may earn income on securities
it has deposited in a segregated account.
5
<PAGE>
The Portfolio engages in these types of purchases in order to buy securities
that fit with its investment objective at attractive prices, not to increase
its investment leverage.
Securities purchased on a when-issued basis may decline or appreciate in
market value prior to their actual delivery to the Portfolio.
MUNICIPAL OBLIGATIONS
Municipal obligations include notes, bonds and other securities issued by or
on behalf of states, territories and possessions of the U.S. and the District
of Columbia and their political subdivisions, agencies and instrumentalities.
The interest on such municipal obligations will normally be exempt from fed-
eral income tax. These bonds may be general obligation bonds secured by the
issuer's pledge of its full faith, credit and taxing power for the payment of
principal and interest, or they may be revenue bonds payable from specific
revenue sources, but not generally backed by the issuers taxing power. These
obligations may include private activity bonds where payment is the responsi-
bility of the private industrial user of the facility financed by the bonds.
Municipal notes are issued to meet short-term funding requirements of the is-
suer and include construction loan notes, short-term discount notes, tax-ex-
empt commercial paper, demand notes and similar instruments. Municipal bonds
will be rated investment grade by Moody's and S&P, as described above. Invest-
ment grade municipal notes will be rated MIG1, MIG2 or MIG3 by Moody's, or SP-
1 or SP-2 by S&P or, if unrated, determined by the Adviser to be of comparable
quality. Please refer to the Portfolio's Statement of Additional Information
for a detailed description of municipal note ratings.
ZERO COUPON SECURITIES
A portion of the Portfolio may be invested in zero coupon securities which
are fixed income securities that do not make regular interest payments. In-
stead, zero coupon securities are sold at substantial discounts from their
face value. The difference between a zero coupon security's issue or purchase
price and its face value represents the imputed interest an investor will earn
if the obligation is held until maturity. Zero coupon securities may offer the
Portfolio the opportunity to earn higher yields than those available on ordi-
nary interest paying obligations of similar credit quality and maturity. How-
ever, the prices of zero coupon securities may also exhibit greater price vol-
atility than ordinary fixed income securities because of the manner in which
their principal and interest are returned to the investor. The Portfolio will
accrue income on such investments for tax and accounting purposes, which is
distributable to shareholders. Since no cash is received at the time of accru-
al, the Portfolio may be required to liquidate other portfolio securities to
satisfy its distribution obligations.
RESTRICTED AND ILLIQUID SECURITIES
The Portfolio may purchase restricted securities that are not registered for
sale to the general public but which are eligible for resale to qualified in-
stitutional investors under Rule 144A of the Securities Act of 1933. Under the
supervision of the Fund's Board of Trustees, the Adviser determines the li-
quidity of such investments by considering all relevant factors. Provided that
a dealer or institutional trading market in such securities exists, these re-
stricted securities are not treated as illiquid securities for purposes of the
Portfolio's investment limitations. Certain restrictions applicable to the
Portfolio limit its investment in securities that are illiquid by virtue of
the absence of a readily available market or because of legal or contractual
restrictions on resale to no more than 15% of the Portfolio's net assets. How-
ever, the Portfolio does not intend to invest in private placements or other
illiquid securities. The prices realized from the sales of these securities
could be less than those originally paid by the Portfolio or less than what
may be considered the fair value of such securities.
OTHER INVESTMENT POLICIES
The Portfolio may also invest in the following securities and investment
techniques:
SHORT-TERM INVESTMENTS
Under normal circumstances, the Portfolio may invest 10% or less of its to-
tal assets in short-term investments. For temporary purposes, such as when the
Portfolio is holding cash from shares purchases while seeking appropriate in-
vestments or holding cash to meet anticipated redemptions, more than 20% of
the Portfolio's total assets may be invested in short-term investments. The
short-term investments in which the Portfolio will invest are domestic money
market instruments including repurchase agreements, certificates of deposit,
bankers acceptances, time deposits, U.S. Government obligations, U.S. Govern-
ment agency securities, short-term corporate debt securities, and commercial
paper rated A-1 or A-2 by S&P or Prime-1 or Prime-2 by Moody's or, if unrated,
determined by the Adviser to be of comparable quality. Please refer to the
Portfolio's Statement of Additional Information for a detailed description of
commercial paper ratings.
The Fund has received an Order from the Securities and Exchange Commission
(the "Commission") for permission to deposit the daily uninvested cash bal-
ances of the Fund's Portfolios, as well as cash for investment purposes, into
one or more joint accounts and to invest the daily balance of the joint ac-
counts in the following short-term investments: fully collateralized repur-
chase agreements, interest-bearing or discounted commercial paper including
dollar-denominated commercial paper of foreign issuers, and any other short-
term money market instruments including
6
<PAGE>
variable rate demand notes and tax-exempt money instruments. By entering into
these investments on a joint basis, it is expected that a Portfolio may earn a
higher rate of return on investments relative to what it could earn individu-
ally.
The Fund has received an Order from the Commission, which permits each of
its Portfolios to invest the greater of 5% of its total assets or $2.5 million
in the UAM Funds' DSI Money Market Portfolio for cash management purposes.
(See "Investment Companies.")
REPURCHASE AGREEMENTS
The Portfolio may invest in repurchase agreements collateralized by U.S.
Government securities, certificates of deposit, bankers acceptances and other
short-term securities as outlined above under "Short-Term Investments." In a
repurchase agreement, the Portfolio purchases a security and, at the same
time, arranges to sell it back to the original seller on a predetermined date.
The repurchase agreement states the price that the seller will pay for the se-
curity plus the interest rate that the purchaser will receive while holding
it. In effect, the Portfolio is lending its funds to the seller at an agreed
upon interest rate and receiving a security as collateral for the loan. Repur-
chase agreements can range from overnight to a fixed term. They are a common
way to earn interest on short-term funds.
The seller under a repurchase agreement will be required to maintain the
value of the securities subject to the agreement at not less than 100% of the
repurchase price of such securities. The Administrator and the Adviser will
mark to market daily the value of the securities purchased, and the Adviser
will, if necessary, require the seller to maintain additional securities to
ensure that the value is in compliance with the previous sentence.
There are some risks involved in repurchase agreements. If the seller de-
faults on its agreement to buy back the securities and the value of those se-
curities falls, the Portfolio may incur losses in selling these securities on
the open market. Also, if the seller enters bankruptcy, the bankruptcy court
may decide that the securities are collateral not within the control of the
Portfolio and therefore are subject to sale by the trustee in the bankruptcy.
Finally, it is possible that the Portfolio may not be able to prove its owner-
ship of the underlying securities. The Adviser believes that these risks can
be controlled by carefully reviewing the securities involved in a repurchase
agreement as well as the credit rating of the other party in the transaction.
The Fund has received an Order from the Commission for permission to pool
the daily uninvested cash balances of the Fund's Portfolios in order to invest
in repurchase agreements on a joint basis. By entering into repurchase agree-
ments on a joint basis, it is expected that a Portfolio will incur lower
transactions costs and potentially obtain higher rates of interest on such re-
purchase agreements. Each Portfolio's participation in the income from jointly
purchased repurchase agreements will be based on that Portfolio's percentage
share in the total repurchase agreement.
LENDING OF PORTFOLIO SECURITIES
The Portfolio may lend its investment securities to qualified institutional
investors who need to borrow securities in order to complete certain transac-
tions, such as covering short sales, avoiding failures to deliver securities
or completing arbitrage operations. The Portfolio will not loan portfolio se-
curities to the extent that greater than one-third of its assets at fair mar-
ket value would be committed to loans. 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 bro-
kers, 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 con-
sisting of cash, an irrevocable letter of credit issued by a domestic U.S.
bank or securities issued or guaranteed by the U.S. 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 invest-
ments). As with other extensions of credit, there are risks of delay in recov-
ery or even loss of rights in the securities loaned if the borrower of the se-
curities fails financially. These risks are similar to the ones involved with
repurchase agreements as discussed above. All relevant facts and circumstanc-
es, 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 Fund's Board of Trustees.
7
<PAGE>
At the present time, the Staff of the Commission does not object if an in-
vestment company pays reasonable negotiated fees in connection with loaned se-
curities 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.
INVESTMENT COMPANIES
As permitted by the 1940 Act, the Portfolio reserves the right to invest up
to 10% of its total assets, calculated at the time of investment, in the secu-
rities of other open-end or closed-end investment companies. No more than 5%
of the investing Portfolio's total assets may be invested in the securities of
any one investment company nor may it acquire more than 3% of the voting secu-
rities of any other investment company. The Portfolio will indirectly bear its
proportionate share of any management fees paid by an investment company in
which it invests in addition to the advisory fee paid by the Portfolio.
The Fund has received an Order from the Commission, which permits each of
its Portfolios to invest the greater of 5% of its total assets or $2.5 million
in the UAM Funds' DSI Money Market Portfolio for cash management purposes pro-
vided that the investment is consistent with the Portfolio's investment poli-
cies and restrictions. Based upon the Portfolio's assets invested in the DSI
Money Market Portfolio, the investing Portfolio's adviser will waive its in-
vestment advisory fee and any other fees earned as a result of the Portfolio's
investment in the DSI Money Market Portfolio. The investing Portfolio will
bear expenses of the DSI Money Market Portfolio on the same basis as all of
its other shareholders.
PORTFOLIO TURNOVER
This Portfolio is managed for long-term appreciation rather than short-term
trading profits. As a result, the Adviser seeks to keep portfolio turnover as
low as possible depending on market conditions and generally below 150%.
(A turnover rate of 100% would mean that all securities in the Portfolio would
be replaced within a one-year period.) Occasionally, when the market shifts
suddenly or when the prospects for individual bonds change quickly, the Ad-
viser may find it necessary to sell securities which have not been in the
Portfolio for very long. High rates of portfolio turnover necessarily result
in heavier brokerage and portfolio trading costs which is paid by the Portfo-
lio. Higher rates of turnover may result in the realization of capital gains.
To the extent net short-term capital gains are realized, any distributions re-
sulting from such gains are considered ordinary income for federal income tax
purposes. The Portfolio will not normally engage in short-term trading, but it
reserves the right to do so.
INVESTMENT LIMITATIONS
To help reduce the Portfolio's exposure to risk in specific situations, it
has adopted certain limitations associated with its investments and investment
practices. These policies and limitations are considered at the time of pur-
chase. The sale of instruments is not required in the event of a subsequent
change in circumstances.
The Portfolio's limitations are as follows:
(a) With respect to 75% of its assets, the Portfolio may not own more than
5% of the securities of any single issuer (other than investments is-
sued or guaranteed by the U.S. Government or any of its agencies or in-
strumentalities);
(b) With respect to 75% of its assets, the Portfolio may not own more than
10% of the outstanding voting securities of any one issuer;
(c) The Portfolio may not invest more than 5% of its assets in securities
of issuers (other than securities issued or guaranteed by the U.S. or
foreign governments or their political subdivisions) that have (with
predecessors) less than 3 years of continuous operation;
(d) The Portfolio may not invest more than 25% of its assets in companies
within a single industry; however, there are no limitations on invest-
ments made in instruments issued or guaranteed by the U.S. Government
and its agencies;
(e) The Portfolio may not make loans except by purchasing debt securities
in accordance with its investment objective and policies or entering
into repurchase agreements or by lending its portfolio securities to
banks, brokers, dealers or other financial institutions as long as the
loans are made in compliance with the 1940 Act and the rules, regula-
tions and interpretations of the Commission;
8
<PAGE>
(f) The Portfolio may not borrow except from banks in extraordinary circum-
stances for temporary or emergency purposes. In this situation, the
Portfolio may not (1) borrow more than 33 1/3% of its gross assets and
(2) cannot buy additional securities if it borrows more than 5% of its
total assets; and
(g) The Portfolio may not pledge, mortgage or hypothecate more than 33 1/3%
of its total assets at fair market value.
The Portfolio's investment objective and investment limitations (a), (b),
(d), (e) and (f.1) listed above are fundamental policies and may be changed
only with the approval of the holders of a majority of the outstanding voting
securities of the Portfolio. The other investment limitations described here
and those not specified as fundamental in the Statement of Additional Informa-
tion as well as the Portfolio's investment policies are not fundamental, and
the Fund's Board of Trustees may change them without shareholder approval.
PORTFOLIO TRANSACTIONS
The Portfolio's Investment Advisory Agreement authorizes the Adviser to se-
lect the brokers or dealers that will execute the purchases and sales of in-
vestment securities for the Portfolio. The Agreement directs the Adviser to
use its best efforts to obtain the best available price and most favorable ex-
ecution for all the Portfolio's transactions.
It is not the Fund's practice to allocate brokerage or effect principal
transactions with dealers 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.
Some securities considered for investment by the Portfolio may also be ap-
propriate for other clients served by the Adviser. If a purchase or sale of
securities consistent with the investment policies of a 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 fair and reasonable manner. Although there is no
specified formula for allocating such transactions, the various allocation
methods used by the Adviser, and the result of such allocations, are subject
to periodic review by the Fund's Board of Trustees.
BUYING, SELLING AND EXCHANGING SHARES
Service Class Shares of the Portfolio may be purchased without a sales com-
mission directly through UAM Fund Distributors, Inc. (the "Distributor"), and
through broker-dealers, registered representatives, and other financial inter-
mediaries ("Service Agents") having selling or shareholder service agreements
with the Distributor. The shares are sold at net asset value per share next
determined after an order is received by the Fund or designated Service Agent.
(See "Service and Distribution Plans" and "How Share Prices are Determined.").
The required minimum initial investment in the Portfolio is $2,500 with cer-
tain exceptions as may be determined from time to time by the officers of the
Fund. The initial investment minimum for IRA accounts is $500. The initial in-
vestment minimum for spousal IRA accounts is $250. The minimum for any subse-
quent investment is $100. The Portfolio issues two classes of shares: Institu-
tional Class and Service Class. The two classes of shares each represent in-
terests in the same portfolio of investments, have the same rights and are
identical in all respects, except that the Service Class Shares bear share-
holder servicing expenses and distribution plan expenses, and have exclusive
voting rights with respect to the Rule 12b-1 Distribution Plan pursuant to
which the distribution fee may be paid. The two classes have different ex-
change privileges. (See "How to Exchange Shares.") The net income attributable
to Service Class Shares and the dividends payable on Service Class Shares will
be reduced by the amount of the shareholder servicing and distribution fees;
accordingly, the net asset value of the Service Class Shares will be reduced
by such amount to the extent the Portfolio has undistributed net income.
Some Service Agents may also impose additional or different conditions or
other account fees on the purchase and redemption of Portfolio shares, which
are not subject to the Rule 12b-1 Service and Distribution Plans. Each Service
Agent is responsible for transmitting to its customers a schedule of any such
fees and information regarding any additional or different conditions regard-
ing purchases and redemptions. Shareholders who are customers of Service
Agents should consult their Service Agent for information regarding these fees
and conditions. Amounts paid to Service Agents may include transaction fees
and/or services fees paid by the Fund from the Fund assets attributable to the
Service Agent, and would not be imposed if shares of the Portfolio were pur-
chased directly from the Fund or the Distributor. The Service Agents may pro-
vide shareholder services to their customers that are not available to a
shareholder dealing directly with the Fund. A salesperson and any other person
entitled to receive compensation for selling or servicing Portfolio shares may
receive different compensation with respect to one particular class of shares
over another in the Fund.
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<PAGE>
Service Agents may enter confirmed purchases on behalf of their customers.
If you buy shares, the Service Agent must receive your investment order before
the close of trading on the NYSE, generally 4:00 p.m. (Eastern Time) and
transmit it to the Fund's Sub-Transfer Agent (prior to the close of the Sub-
Transfer Agent's business day) and to the Distributor to receive that day's
share price. Proper payment for the order must be received by the Sub-Transfer
Agent no later than the time when the Portfolio is priced on the following
business day. Service Agents are responsible to their customers, the Fund and
its Distributor for timely transmission of all subscription and redemption re-
quests, investment information, documentation and money
HOW TO BUY SHARES BY MAIL
An account may also be opened with the assistance of your Service Agent by
completing and signing an Account Registration Form. We require an original
signature on both copies. The original copy should be forwarded together with
a check payable to UAM Funds Trust, through your Service Agent, to:
UAM Funds Trust
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
Mail the other copy, without the check, to:
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
To make additional investments to an account you have already established,
simply mail your check directly or through your Service Agent to the UAM Funds
Service Center at the address above. Make sure that your account number, ac-
count name, and the name of the Portfolio and the name of the class of shares
are clearly indicated on the check so that we can properly credit your ac-
count.
For both initial and additional investments, your funds will be credited to
your account at the next share price calculated for the Portfolio after re-
ceipt. Investments received by 4 p.m. Eastern Time will be invested at the
share price calculated after the market closes on the same day. (For example,
if your check arrives on Tuesday morning, you will purchase shares at the
price calculated after the market close on Tuesday.)
HOW TO BUY SHARES BY WIRE
To make an initial investment by wire, your Service Agent should telephone
the Fund's Sub-Transfer Agent (toll-free 1-800-638-7983), and provide the ac-
count name, address, telephone number, social security or taxpayer identifica-
tion number, the name of the Portfolio (Service Class), the amount being wired
and the name of the bank wiring the funds. (Investors with existing accounts
should notify the Fund prior to wiring funds.) An account number and a wire
control number will then be provided to you.
Once you have an account number, call your bank and instruct them to wire a
specified amount to the Fund's custodian, The Chase Manhattan Bank ("Custodian
Bank"). You will be asked to provide the following information:
The Chase Manhattan Bank
ABA #021000021
UAM Funds
Credit DDA #9102772952
(Your Account Registration)
(Your Account Number)
(Wire Control Number)
After you have instructed the bank to wire the money, you must forward a
completed Account Registration Form to your Service Agent or the UAM Funds
Service Center as soon as possible. You can obtain forms by calling the UAM
Funds Service Center at 1-800-638-7983. Federal Funds purchases will be ac-
cepted only on days when the NYSE and the Custodian Bank are open for busi-
ness.
Once you have made the initial purchase, you may buy additional shares by
wire at any time by following the instructions above. On all wired purchases,
funds will be invested at the share price calculated after the next market
close.
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<PAGE>
OTHER PURCHASE INFORMATION
Non-securities dealer Service Agents may receive transaction fees that are
the same as distribution fees paid to dealers.
The Fund reserves the right, in its sole discretion, to suspend the offering
of shares or reject purchase orders of the Portfolio when, in the judgement of
management, such suspension or rejection is in the best interests of the Fund.
Purchases of shares will be made in full and fractional shares calculated to
three decimal places. In the interest of economy and convenience, certificates
for shares will not be issued except at the written request of the sharehold-
er. Certificates for fractional shares, however, will not be issued.
IN-KIND PURCHASES
Under certain circumstances, investors who own securities may be able to ex-
change them directly for shares of the Portfolio without converting their in-
vestments into cash first. The Portfolio will accept such in-kind purchases
only if the securities offered for exchange meet the Portfolio's investment
criteria which are set forth in the "Details on Investment Policies" section
of this Prospectus. Once accepted, the securities will be valued according to
the process described in "How Share Prices are Determined" at the same time
the Portfolio's shares are valued. Once a value has been determined for both,
an exchange will be made. All dividends, interest, subscription, or other
rights pertaining to these securities become the Fund's property; if you re-
ceive any such items, you must deliver them to the Fund immediately. Securi-
ties acquired by the Portfolio through an in-kind purchase will be acquired
for investment and not for immediate resale.
The Fund will not accept securities for exchange unless they meet the fol-
lowing criteria:
. The securities are eligible to be included in the Portfolio and market
quotes can readily be obtained for them.
. The investor assures the Fund that the securities are not subject to
any restrictions under the Securities Act of 1933 or any other law or
regulation.
. The value of the securities exchanged does not increase the Portfo-
lio's position in any specific issuer's security to more than 5% of
the Portfolio's total net assets.
For tax purposes, the IRS generally treats any exchange of securities for
Portfolio shares as a sale of the securities. This means that if you exchange
securities which have appreciated in value since you bought them, you will re-
alize capital gains and incur a tax liability. If you are interested in such
an exchange, we suggest you discuss any potential tax liability with your tax
adviser before proceeding.
HOW TO SELL SHARES
You may sell shares by telephone or mail at any time, free of charge. Your
shares will be valued at the next price calculated after we receive your in-
structions to sell.
Your request should be addressed to:
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
or to your Service Agent.
BY MAIL
To redeem by mail, you should include the following:
. your share certificates, if we have issued them to you;
. a letter which tells us how many shares you wish to redeem or, alter-
natively, what dollar amount you wish to receive;
. a signature guaranteed by your bank, broker or other financial insti-
tution (see "Signature Guarantees" below); and
11
<PAGE>
. any other necessary legal documents, in the case of estates, trusts,
guardianships, custodianships, corporations, pension and profit-shar-
ing plans and other organizations.
If you are not sure which documents to send, please contact the UAM Funds
Service Center at 1-800-638-7983.
BY TELEPHONE
To redeem shares by telephone, you must have completed an Account Registra-
tion Form and have returned it to the Fund. Once this form is on file, simply
call the Fund and request the redemption amount to be mailed to you or wired
to your bank. The Fund and the Fund's Transfer Agent will employ reasonable
precautions to make sure that the instructions communicated by telephone are
genuine, and they may be liable for any losses if they fail to do so. You will
be asked to provide certain personal identification when you open an account,
and again, when you request a telephone redemption. In addition, all telephone
transaction requests will be recorded, and investors may be required to pro-
vide additional telecopied written instructions of such transaction requests.
Neither the Fund nor the Transfer Agent will be responsible for any loss, ad-
ditional cost or expense for following instructions received by telephone that
it reasonably believes are genuine. To change the name of the commercial bank
or the account designated to receive redemption proceeds, a written request
must be sent to the Fund at the address on the cover of this Prospectus. Re-
quests to change the bank or account must be signed by each shareholder, and
each signature must be guaranteed. You cannot redeem shares by telephone if
you hold stock certificates for these shares. Please contact one of the Fund's
representatives at 1-800-638-7983 for further details.
SIGNATURE GUARANTEES
To protect your account, the Fund and the Fund's Transfer Agent from fraud,
signature guarantees are required for certain redemptions. Signature guaran-
tees are used to verify that the person who authorizes a redemption is, in
fact, the registered shareholder. They are required whenever you:
. redeem shares and request that the proceeds be sent to someone other
than the registered shareholder(s) or to an address which is not the
registered address; or
. transfer shares from one Portfolio to another.
Signatures must be guaranteed by an "eligible guarantor institution" as de-
fined in Rule 17Ad-15 under the Securities Exchange Act of 1934. (The UAM
Funds Service Center can provide you with a full definition of the term.) You
can obtain a signature guarantee at almost any bank, as well as through most
brokers, dealers, credit unions, national securities exchanges, registered se-
curities associations, clearing agencies and savings associations. 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 el-
igible guarantor institution which participates in a signature guarantee pro-
gram. A notary public can not provide a signature guarantee.
The signature guarantee must appear either:
. on the written request for redemption; or
. on a separate instrument for assignment (a "stock power") which should
specify the total number of shares to be redeemed; or
. on all stock certificates tendered for redemption, and, if shares held
by the Fund are also being redeemed, then on the letter or stock pow-
er.
FURTHER INFORMATION ON SELLING SHARES
Normally, the Fund will make payment for all shares sold under this proce-
dure within one business day after we receive a request. In no event will pay-
ment be made more than seven days after receipt of a redemption (sale) request
in good order. The Fund may suspend the right of redemption or postpone the
date at times when either the NYSE and Custodian Bank are closed, or under any
emergency circumstances as determined by the Commission.
If the Fund's Board of Trustees determines that it would be detrimental to
the best interests of the remaining shareholders of the Fund to make payments
wholly or partly in cash, the Fund may pay the redemption proceeds in whole or
in part by a distribution in-kind of liquid securities held by the Portfolio
instead of cash in conformity with applicable rules of the Commission. Invest-
ors may incur brokerage charges when they sell portfolio securities received
in payment of redemptions.
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<PAGE>
HOW TO EXCHANGE SHARES
You may exchange Service Class Shares of the Portfolio for any other Service
Class Shares of a Portfolio included in the UAM Funds which is comprised of
the Fund and UAM Funds, Inc. (See the list of Portfolios of the UAM Funds--
Service Class Shares at the end of this Prospectus.) When you exchange shares
you sell your old shares and buy new ones, both at the price calculated after
the next market close. There is no sales charge for exchanges. Exchange re-
quests may be made by phone or letter. Telephone exchanges may be made only if
the Fund holds all share certificates and if the registration of the two ac-
counts is identical. Telephone exchanges received before 4 p.m. Eastern Time
will be processed at the share price set after the market close the same day.
Exchanges received after 4 p.m. Eastern Time will be executed at the share
price determined at the market close on the following day. For additional in-
formation regarding responsibility for the authenticity of telephoned transac-
tion instructions, see "How to Sell Shares By Telephone" above. The exchange
privilege is only available with respect to Portfolios that are registered for
sale in a shareholder's state of residence.
Neither the Fund nor the Fund's Transfer Agent will take responsibility for
ensuring it is indeed the shareholder issuing the exchange orders; however, we
may use some of the precautions described above for selling shares. The Fund
may also limit both the frequency and the amount of exchanges permitted if it
is in the interest of the Fund's shareholders.
Please review a Portfolio's investment objective before shifting money into
it. Make sure its objective and strategies fit with your long-term goals. Be-
fore exchanging into a Portfolio, read its Prospectus. You may obtain one for
the Portfolio(s) you are interested in by calling the UAM Funds Service Center
at 1-800-638-7983. Remember, every time you exchange shares of one Portfolio
for another, your transaction is counted as a sale of the first security and a
purchase of the second. As a result, you may incur a tax liability by exchang-
ing shares if your investment has appreciated since you bought it. Consult
your tax adviser to determine your liability for capital gains taxes.
SERVICE AND DISTRIBUTION PLANS
Under the Service Plan for Service Class Shares, adopted pursuant to Rule
12b-1 under the 1940 Act, the Fund may enter into service agreements with
Service Agents (broker-dealers or other financial institutions) who receive
fees with respect to the Fund's Service Class Shares owned by shareholders for
whom the Service Agent is the dealer or holder of record, or for whom the
Service Agent performs Servicing, as defined below. These fees are paid out of
the assets allocable to Service Class Shares to the Distributor or to the
Service Agents directly or through the Distributor. The Fund reimburses the
Distributor or the Service Agent, as the case may be, for payments made at an
annual rate of up to 0.25 of 1% of the average daily value of Service Class
Shares owned by clients of such Service Agent during the period payments for
Servicing are being made to it. Such payments are borne exclusively by the
Service Class Shares. Each item for which a payment may be made under the
Service Plan constitutes personal service and/or shareholder account mainte-
nance and may constitute an expense of distributing Fund shares as the Commis-
sion construes such term under Rule 12b-1. The fees payable for Servicing are
payable without regard to actual expenses incurred, subject to adjustment of
the fee prospectively to reflect actual expenses.
Servicing may include, among other things, one or more of the following ren-
dered with respect to the Service Class shareholders: answering client inqui-
ries regarding the Fund; assisting clients in changing dividend options, ac-
count designations and addresses; performing subaccounting; establishing and
maintaining shareholder accounts and records; processing purchase and redemp-
tion transactions; investing client cash account balances automatically in
Service Class Shares; providing periodic statements showing a client's account
balance and integrating such statements with those of other transactions and
balances in the client's other accounts serviced by the Service Agent; arrang-
ing for bank wires; and such other services as the Fund may request, to the
extent the Service Agent is permitted by applicable statute, rule or regula-
tion.
The Glass-Steagall Act and other applicable laws prohibit federally chart-
ered or supervised banks from engaging in certain aspects of the business of
issuing, underwriting, selling and/or distributing securities. Accordingly,
banks will be engaged to act as Service Agent only to perform administrative
and shareholder servicing functions, including transaction-related agency
services for their customers. If a bank were prohibited from so acting, its
shareholder clients would be permitted to remain Fund shareholders and alter-
native means for continuing the Servicing of such shareholders would be
sought.
The Distributor promotes the distribution of the Service Class Shares in ac-
cordance with the terms of a Distribution Plan adopted pursuant to Rule 12b-1
under the 1940 Act. The Distribution Plan provides for the use of Fund assets
allocable to Service Class Shares to pay expenses of distributing such shares.
13
<PAGE>
The Distribution Plan and Service Plan (the "Plans") were approved by the
Board, including a majority of the Trustees who are not "interested persons"
of the Fund as defined in the 1940 Act (and each of whom has no direct or in-
direct financial interest in the Plans or any agreement related thereto, re-
ferred to herein as the "12b-1 Trustees"). The Plans may be terminated at any
time by the vote of the Board or the 12b-1 Trustees, or by the vote of a ma-
jority of the outstanding Service Class Shares of the Portfolio involved.
While the Plans continue in effect, the selection of the 12b-1 Trustees is
committed to the discretion of such persons then in office. The Plans provide
generally that a Portfolio may incur distribution and service costs under the
Plans which may not exceed in the aggregate 0.75% per annum of that Portfo-
lio's net assets. The Board has currently limited aggregate payments under the
Plans to 0.50% per annum of a Portfolio's net assets. The Service Class Shares
offered by this Prospectus currently are not making payments under the Distri-
bution Plan. Upon implementation, the Distribution Plan would permit payments
to the Distributor, broker-dealers, other financial institutions, sales repre-
sentatives or other third parties who render promotional and distribution
services, for items such as advertising expenses, selling expenses, commis-
sions or travel reasonably intended to result in sales of Service Class Shares
and for the printing of prospectuses sent to prospective purchasers of Service
Class Shares of the Portfolio.
Although the Plans may be amended by the Board of Trustees, any changes in
the Plans which would materially increase the amounts authorized to be paid
under the Plans must be approved by shareholders of the Class involved. The
total amounts paid under the foregoing arrangements may not exceed the maximum
limits specified above, and the amounts and purposes of expenditures under the
Plans must be reported to the 12b-1 Trustees quarterly. The amounts allowable
under the Plans for each Class of Shares of the Portfolios are also limited
under certain rules of the National Association of Securities Dealers, Inc.
In addition to payments by the Fund under the Plans, the Distributor, United
Asset Management Corporation, the parent company of the Adviser, the Adviser
or any of their affiliates, may, at its own expense, compensate a Service
Agent or other person for marketing, shareholder servicing, record-keeping
and/or other services performed with respect to the Fund, a Portfolio or any
Class of Shares of a Portfolio. The person making such payments may do so out
of its revenues, its profits or any other source available to it. Such serv-
ices arrangements, when in effect, are made generally available to all quali-
fied service providers. The Adviser may compensate its affiliated companies
for referring investors to the Portfolio.
The Distributor, the Adviser and certain of their other affiliates also par-
ticipate, at the date of this Prospectus, in an arrangement with Smith Barney
Inc. under which Smith Barney provides certain defined contribution plan mar-
keting and shareholder services and receives from such entities an amount
equal to up to 33.3% of the portion of the investment advisory fees attribut-
able to the invested assets of Smith Barney's eligible customer accounts with-
out regard to any expense limitation in addition to amounts payable to all
selling dealers. The Fund also compensates Smith Barney for services it pro-
vides to certain defined contribution plan shareholders that are not otherwise
provided by the Administrator.
HOW SHARE PRICES ARE DETERMINED
The value of each class of shares of the Portfolio is calculated every day
that the NYSE is open. This means that shares are valued after the market
close, generally at 4 p.m. Eastern Time on Monday through Friday, except for
major holidays when the NYSE is closed. The net asset value of the Service
Class Shares may be lower than the net asset value of the Institutional Class
Shares reflecting the daily expense accruals of the shareholder servicing fee
and any distribution and transfer agency fees applicable to the Service Class
Shares.
The value of each share is determined by adding up the total market value of
all the securities in the Portfolio plus cash and other assets, deducting lia-
bilities, then dividing by the total number of shares outstanding of the
class.
Net asset value includes interest on bonds and other fixed income securities
which is accrued daily. Bonds and other fixed income securities are valued ac-
cording to the broadest and most representative market which will ordinarily
be the over-the-counter market. In addition, bonds and other fixed income se-
curities may be valued on the basis of prices provided by a pricing service
when such prices are believed to reflect the fair market value of such securi-
ties.
The value of other assets and securities for which no quotations are readily
available (including restricted securities) is determined in good faith at
fair value using methods determined by the Fund's Board of Trustees.
14
<PAGE>
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
DIVIDENDS
Bonds generate income in the form of periodic interest payments. The Portfo-
lio will normally distribute substantially all of its net investment income
(for tax purposes) from these payments to shareholders of each Class in the
form of quarterly dividends. The per share dividends and distributions on
Service Class Shares generally will be lower than the per share dividends and
distributions on Institutional Class Shares as a result of the shareholder
servicing, distribution and any transfer agency fees applicable to the Service
Class Shares. You must instruct the Portfolio to pay out dividends and distri-
butions in cash to you or to reinvest them. The Account Registration Form has
a box for your instructions. Unless you specifically tell us to distribute
dividend income in cash, however, we will assume you want this income rein-
vested. By law, you must pay taxes on any dividend or interest income you re-
ceive on your investments whether distributed in cash or reinvested in shares.
The interest on municipal obligations will normally be exempt from federal
taxes. The Portfolio will send you a statement annually telling you exactly
how much dividend income you have earned for tax purposes.
CAPITAL GAINS
Capital gains are another source of appreciation to the Portfolio. Basical-
ly, a gain is an increase in the value of a bond. However, for tax purposes,
the Portfolio does not need to "realize" or declare a capital gain unless it
sells a bond which has appreciated.
You can incur capital gains in two ways. First, if the Portfolio buys a bond
at one price, then sells it at a higher price, it will realize a capital gain.
At the end of the year, the capital gains computed under tax rules that the
Portfolio has made are added up and capital losses are subtracted. If any net
capital gains are realized, the Portfolio will normally distribute such gains
annually. You will receive a statement at the end of the year informing you of
your share of the Portfolio's capital gains.
The second way to incur capital gains is to sell or exchange your shares. If
you sell shares at a higher price than you bought them, you will be responsi-
ble for paying taxes on your gain. There are several ways to determine your
tax liability, and we suggest you contact a qualified tax adviser to help you
decide which is best for you.
TAXES
The Portfolio intends to qualify each year as a "regulated investment compa-
ny" under Federal tax law, and if it qualifies, the Portfolio will not be lia-
ble for Federal income taxes because it will have distributed all its net in-
vestment income and net realized capital gains to shareholders. Shareholders
will then have to pay taxes on the dividends, and on gains whether they are
distributed as cash or are reinvested in shares. Dividends and short-term cap-
ital gains will be taxed as ordinary income. Long-term capital gains distribu-
tions are taxed as long-term capital gains.
Dividends declared in October, November and December to shareholders of rec-
ord in such a month will be treated as if they had been paid by the Fund and
received by the shareholders on December 31 of the same calendar year, pro-
vided that the dividends are paid before February of the following year.
The Fund is required by Federal law to withhold 31% of reportable payments
(which may include dividends, capital gains distributions and redemptions)
paid to shareholders who have not complied with IRS regulations. In order to
avoid this withholding requirement, you must certify on the Account Registra-
tion Form or on a separate form supplied by the Fund that your Social Security
or Taxpayer Identification Number you have provided is correct and that you
are not currently subject to backup withholding or that you are exempt from
backup withholding.
Dividends and interest received by the Portfolio may give rise to withhold-
ing and other taxes imposed by foreign countries. These taxes reduce the Port-
folio's dividends but are included in the taxable income reported on your tax
statement if the Portfolio qualifies for this tax treatment and elects to pass
it through to you. You may be able to claim an offsetting tax credit or item-
ized deduction for foreign taxes paid by the Portfolio Your tax statement will
generally show the amount of foreign tax for which a credit or deduction may
be available.
FUND MANAGEMENT AND ADMINISTRATION
THE INVESTMENT ADVISER
The Adviser is a registered investment adviser formed in 1979. Its business
offices are located at One McKinney Plaza, 3232 McKinney Avenue, 15th Floor,
Dallas, Texas 75204. It is a wholly-owned subsidiary of United Asset Manage-
ment Corporation ("UAM") and provides and offers investment management serv-
ices to corporate, public and Taft-Hartley employee benefit plans, founda-
tions, endowments, health care and other institutions and investors. The Ad-
viser currently has $18 billion in assets under management.
15
<PAGE>
The Portfolio pays an annual fee in monthly installments to the Adviser for
advisory services. This fee is accrued daily and paid every month as a per-
centage of the average net assets in the Portfolio for that month. The per-
centage fee on an annual basis is 0.35%. The Adviser has voluntarily agreed to
waive a portion of its advisory fees and to assume as the Adviser's own ex-
pense certain operating expenses otherwise payable by the Portfolio, if neces-
sary, in order to keep the Portfolio's Service Class Shares total operating
expenses from exceeding 0.80% through December 31, 1997. The Adviser will not
be reimbursed by the Fund for any advisory fees which are waived or expenses
which the Adviser may bear on behalf of the Fund.
The Adviser may compensate its affiliated companies for referring investors
to the Portfolio. The Adviser and its parent company may also make payments to
unaffiliated brokers who perform distribution, marketing, shareholder and
other services with respect to the Portfolio.
The investment professionals at the Adviser responsible for the day-to-day
management of the Portfolio and their qualifications are as follows:
JOHN S. WILLIAMS -- Fixed Income Principal and the first fixed income port-
folio manager at the Adviser in 1983. Mr. Williams has also managed balanced
and municipal portfolios during his 20 year investment career. Prior to join-
ing the Adviser, he was responsible for the management of all fixed income as-
sets at Southland Trust, Dallas, Texas, and prior to that was a portfolio man-
ager and securities analyst at InterFirst Bank Dallas Trust Department. Mr.
Williams has served on the Advisory Committee for the Texas Teachers Retire-
ment System and is an active member in the Dallas Investment Analysts Society.
He currently is a Director of United Asset Management Corporation. Mr. Wil-
liams is a Chartered Financial Analyst, earning his MBA in 1976 and BBA in
1975 from Texas Christian University.
DAVID R. HARDIN -- Fixed Income Principal and portfolio manager. Prior to
joining the Adviser in 1987, Mr. Hardin was the Vice President and Director of
the Fixed Income Group of RepublicBank Dallas Trust Department. In that posi-
tion, he was responsible for the management of all taxable and tax-exempt
fixed income assets of the Trust Division, including all separately managed
accounts, collective investment fund products, and the creation of and manage-
ment of an SEC-registered mutual fund. Prior to attaining the Director's posi-
tion, Mr. Hardin was a taxable portfolio manager and also served as the credit
analyst for the Trust Division. He started his investment career as a private
placement credit analyst while employed by American General Insurance Co. in
Houston in 1976. Mr. Hardin received an M.Sc. from The London School of Eco-
nomics in 1975 and a BBA from Texas Christian University in 1973.
STEPHEN M. MILANO -- Fixed Income Principal and portfolio manager. Prior to
joining the Adviser in 1990, Mr. Milano was employed at Salomon Brothers, Inc.
in New York as a Vice President of the Fixed Income Strategy Group. In that
role he was a specialist in developing portfolio structure and strategies for
active management of taxable assets. While at Salomon he also served as Prod-
uct Sales Manager for International Fixed Income Securities and as a Mortgage
and Government Specialist. Prior to joining Salomon, Mr. Milano was employed
as a portfolio manager and trader at Equitable Life Assurance Society. He re-
ceived his BS in Economics with a concentration in Finance from the Wharton
School of the University of Pennsylvania in 1980.
J. SCOTT MCDONALD -- Fixed Income Portfolio Analyst/Trader. Mr. McDonald
joined the Adviser in 1995 to serve as a security and portfolio specialist for
the Fixed Income Group. In addition to security and portfolio analyst, he is
responsible for systems analytics used in the evaluation of effective/option
adjusted yield measurements for all securities and portfolios. He also serves
as compliance monitor of all fixed income portfolios to ensure commonality of
structure and diversification. Mr. McDonald previously served as the Senior
Vice President and Portfolio Manager at Life Partners Group, Inc. in Dallas.
While with Life Partners, he was responsible for implementing investment
strategy for $3 billion in assets. Additionally, he has been employed by Texas
Commerce Bank Houston as a Credit Supervisor and Lending Officer. He received
his MBA in 1991 from the University of Texas at Austin and his BBA from South-
ern Methodist University in 1986.
DEBORAH J. ANDERSON -- Senior Portfolio Assistant. Ms. Anderson is responsi-
ble for all administrative staff and their duties associated with the fixed
income product management, including communication/liaison with all clients,
custodial banks, and brokerage relationships. She supervises all operational
aspects of fixed income security trading and works extensively with reporting
requirements for all clients and regulatory agencies. Prior to joining the Ad-
viser in 1988, Ms. Anderson served as a Trust Officer with Trust Company of
Texas and its predecessor, Southland Trust Co. She received a BBA in Account-
ing from the University of Texas at Arlington in 1974.
16
<PAGE>
THE ADMINISTRATOR
Pursuant to a Fund Administration Agreement dated April 15, 1996, UAM Fund
Services, Inc. ("UAMFSI") a wholly-owned subsidiary of United Asset Management
Corporation with its principal office located at 211 Congress Street, Boston,
MA, 02110, is responsible for performing and overseeing administration, fund
accounting, dividend disbursing and transfer agency services provided to the
Fund and its Portfolios. UAMFSI has subcontracted the performance of certain
of such services to Chase Global Funds Services Company ("CGFSC"), an affili-
ate of The Chase Manhattan Bank, pursuant to a Mutual Funds Service Agreement
dated April 15, 1996. CGFSC is located at 73 Tremont Street, Boston, MA 02108-
3913. Effective April 1, 1996, The Chase Manhattan Corporation, the parent of
The Chase Manhattan Bank merged with and into Chemical Banking Corporation,
the parent company of Chemical Bank. Chemical Banking Corporation is the sur-
viving corporation and will continue its existence under the name "The Chase
Manhattan Corporation".
Each Portfolio pays to UAMFSI a monthly fee comprised of two parts: a Port-
folio-specific fee which is retained by UAMFSI and a sub-administration fee
which UAMFSI in turn pays to CGFSC. The Portfolio-specific fee for the BHM&S
Total Return Bond Portfolio Institutional Service Class Shares is 0.04% of ag-
gregate net assets. The sub- administration fee calculated on an annualized
basis equals: 0.19 of 1% of the first $200 million of total net assets of the
Fund; 0.11 of 1% of the next $800 million of total net assets of the Fund;
0.07 of 1% of total net assets in excess of $1 billion but less than $3 bil-
lion; and 0.05 of 1% of total net assets in excess of $3 billion. The sub-ad-
ministration fees are allocated among the Portfolios on the basis of their
relative assets and are subject to a graduated minimum fee schedule per Port-
folio of $2,000 per month upon inception of a Portfolio to $70,000 annually
after two years. If a separate class of shares is added to a Portfolio, the
minimum annual fee payable by that Portfolio may be increased by up to
$20,000.
THE DISTRIBUTOR
UAM Fund Distributors, Inc., a wholly-owned subsidiary of UAM with its prin-
cipal office located at 211 Congress Street, Boston, Massachusetts 02110, dis-
tributes the shares of the Fund. Under the Fund's Distribution Agreement (the
"Agreement"), the Distributor, as agent of the Fund, agrees to use its best
efforts as sole distributor of the Fund's shares. The Distributor does not re-
ceive any fee or other compensation under the Agreement with respect to this
Portfolio (except as described under "Service and Distribution Plans" above).
The Agreement continues in effect as long as the Fund's Board of Trustees, in-
cluding a majority of the Trustees who are not parties to the Agreement or in-
terested persons of any such party, approve it on an annual basis. This Agree-
ment provides that the Fund will bear the costs of the registration of its
shares with the Commission and various states and the printing of its prospec-
tuses, statements of additional information and reports to shareholders.
CUSTODIAN
The Chase Manhattan Bank serves as custodian of the Fund's assets.
ACCOUNTANTS
Price Waterhouse LLP acts as the independent accountants for the Fund and
audits its financial statements annually.
SUB-ADMINISTRATOR, SUB-TRANSFER AND SUB-DIVIDEND DISBURSING AGENT
Chase Global Funds Services Company, 73 Tremont Street, Boston, MA 02108,
acts as sub-administrator, sub-transfer agent and sub-dividend disbursing
agent for the Fund.
REPORTS
Investors will receive unaudited semi-annual financial statements and annual
financial statements audited by Price Waterhouse LLP.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be made by writing to the Fund at the address
listed on the cover of this Prospectus or by calling 1-800-638-7983.
LITIGATION
The Fund is not involved in any litigation.
GENERAL FUND INFORMATION
The Portfolio is one of a series of investment portfolios available through
UAM Funds Trust, an open-end investment company known as a "mutual fund." Each
of the Portfolios which make up the Fund have different
17
<PAGE>
investment objectives and policies. Together, the Portfolios offer a diverse
set of risk and return characteristics to suit a wide range of investor needs.
The Fund was organized under the name "The Regis Fund II" on May 18, 1994 as a
Delaware business trust. On October 31, 1995, the name of the Fund was changed
to "UAM Funds Trust."
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Officers of the Fund manage its day-to-day operations and are responsi-
ble to the Fund's Board of Trustees. The Trustees set broad policies for the
Fund and elect its Officers.
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 sharehold-
ers.
The shares of each Portfolio and class have noncumulative voting rights,
which means that the holders of more than 50% of the shares voting for the
election of Trustees can elect 100% of the Trustees if they choose to do so. A
shareholder is entitled to one vote for each full share held (and a fractional
vote for each fractional share held), then standing in his name on the books
of the Fund. As of July 31, 1996, Hartnat & Co., Boston, MA held of record 62%
of the outstanding shares of the BHM&S Total Return Bond Portfolio Institu-
tional Service Class Shares and 100% of the outstanding shares of the BHM&S
Total Return Bond Portfolio Institutional Class Shares for which ownership is
disclaimed or presumed disclaimed. The persons or organizations 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 per-
sons 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. Both Institutional Class and Service Class Shares represent an in-
terest in the same assets of the Portfolio and are identical in all respects
except that the Service Class Shares bear certain expenses related to share-
holder servicing and may bear expenses related to the distribution of such
shares and have exclusive voting rights with respect to matters relating to
such distribution expenditures. Information about the Institutional Class
Shares of the Portfolios along with the fees and expenses associated with such
shares is available upon request by contacting the Fund at 1-800-638-7983. The
Fund will not ordinarily hold shareholder meetings except as required by the
1940 Act and other applicable laws. The Fund has undertaken that its Trustees
will call a meeting of shareholders if such a meeting is requested in writing
by the holders of not less than 10% of the outstanding shares of the Fund. To
the extent required by the undertaking, the Fund will assist shareholder com-
munications in such matters.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR IN THE PORTFOLIO'S
STATEMENT OF ADDITIONAL INFORMATION IN CONNECTION WITH THE OFFERING MADE BY
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR ITS REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFERING BY THE FUND IN ANY JURISDICTION IN WHICH SUCH
OFFERING MAY NOT BE LAWFULLY MADE.
18
<PAGE>
UAM FUNDS--SERVICE CLASS SHARES
BARROW, HANLEY, MEWHINNEY & STRAUSS, INC.
BHM&S Total Return Bond Portfolio
NWQ INVESTMENT MANAGEMENT COMPANY
NWQ Balanced Portfolio
SIRACH CAPITAL MANAGEMENT, INC.
Sirach Growth Portfolio
Sirach Special Equity Portfolio
TOM JOHNSON INVESTMENT MANAGEMENT, INC.
TJ Core Equity Portfolio
<PAGE>
UAM FUNDS
UAM FUNDS SERVICE CENTER
C/O CHASE GLOBAL FUNDS SERVICES COMPANY
P.O. BOX 2798
BOSTON, MA 02208-2798
1-800-638-7983
- -------------------------------------------------------------------------------
BHM&S TOTAL RETURN BOND PORTFOLIO
INSTITUTIONAL CLASS SHARES
INVESTMENT ADVISER: BARROW, HANLEY, MEWHINNEY & STRAUSS, INC.
- -------------------------------------------------------------------------------
PROSPECTUS -- AUGUST 28, 1996
BHM&S Total Return Bond Portfolio is one of a series of investment portfo-
lios available through UAM Funds Trust (hereinafter defined as "UAM Funds" or
the "Fund"), an open-end investment company known as a mutual fund. Each of
the Portfolios that make up the Fund have different investment objectives and
policies. In addition, several of the Fund's Portfolios offer two separate
classes of shares: Institutional Class Shares and Institutional Service Class
Shares ("Service Class Shares"). The BHM&S Total Return Bond Portfolio cur-
rently offers two classes of shares. The securities offered in this Prospectus
are Institutional Class Shares of the BHM&S Total Return Bond Portfolio.
The BHM&S Total Return Bond Portfolio seeks to provide a maximum long term
total return consistent with reasonable risk to principal by investing in in-
vestment grade fixed income securities of varying maturities. Income return is
expected to be a predominant portion of the Portfolio's total return. Any cap-
ital return on the Portfolio is dependent upon, among other factors, interest
rate changes as well as the average maturity and duration of the Portfolio.
The Adviser believes that by investing in undervalued securities with above
average effective yields and capital appreciation potential, the Portfolio
will generate superior returns over the long term while minimizing volatility
and, therefore, downside risk. There can be no assurance that the Portfolio
will achieve its stated objective.
Please keep this Prospectus for future reference since it contains informa-
tion that you should understand before you invest. You may also wish to review
the BHM&S Total Return Bond Portfolio's "Statement of Additional Information"
dated August 28, 1996, which was filed with the Securities and Exchange Com-
mission and has been incorporated by reference into this Prospectus. (It is
legally considered to be a part of this Prospectus.) Please call or write the
Fund at the above address to obtain a free copy of this Statement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Fees and Expenses.......................................................... 1
Summary: About the Portfolio............................................... 2
Risk Factors............................................................... 3
Financial Highlights....................................................... 3
Performance Calculations................................................... 4
Details on Investment Policies............................................. 4
Buying, Selling and Exchanging Shares...................................... 9
How Share Prices are Determined............................................ 13
Dividends, Capital Gains Distributions and Taxes........................... 13
Fund Management and Administration......................................... 14
General Fund Information................................................... 16
UAM Funds -- Institutional Class Shares.................................... 18
</TABLE>
<PAGE>
FEES AND EXPENSES
Investors will be charged various fees and expenses incurred in managing the
BHM&S Total Return Bond Portfolio ("the Portfolio") including:
SHAREHOLDER TRANSACTION EXPENSES: These are the costs entailed in buying,
selling or exchanging shares of the Portfolio. The Portfolio does not charge
investors for shareholder transaction expenses. However, transaction fees may
be charged if you are a customer of a broker-dealer or other financial inter-
mediary who has established a shareholder servicing relationship with the Fund
on behalf of their customers. Please see "Buying, Selling and Exchanging
Shares" for further information.
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS SHARES
--------------------------
<S> <C>
Sales Load Imposed on Purchases:.................. NONE
Sales Load Imposed on Reinvested Dividends:....... NONE
Deferred Sales Load:.............................. NONE
Redemption Fees:.................................. NONE
Exchange Fees:.................................... NONE
</TABLE>
ESTIMATED ANNUAL FUND OPERATING EXPENSES: These expenses, which cover the
cost of administration, marketing and shareholder communication, and are usu-
ally quoted as a percentage of net assets, are factored into the Portfolio's
share price and not billed directly to shareholders. They include:
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS SHARES
--------------------------
<S> <C>
Investment Advisory Fees:....................... 0.35%
Administrative Fees:............................ 0.41%
12b-1 Fees...................................... NONE
Other Expenses:................................. 0.48%
Advisory Fees Waived and Expenses Assumed....... (0.69)%
-----
Total Operating Expenses: (After Fee Waiver and
Expenses Assumed).............................. 0.55%*
=====
</TABLE>
- -------------------
* Barrow, Hanley, Mewhinney & Strauss, Inc., the Adviser, has voluntarily
agreed to waive all or a portion of its advisory fees and to assume operat-
ing expenses otherwise payable by the Portfolio, if necessary, in order to
keep the Portfolio's Institutional Class Shares total annual operating ex-
penses (excluding interest, taxes and extraordinary expenses) from exceeding
0.55% of average daily net assets through December 31, 1997. The estimate
above includes the effect of expense offsets. If exepnse offsets were ex-
cluded, annualized Total Operating Expenses for the period ended April 30,
1996 would be 0.61%. (See "Financial Highlights.") It is estimated that, if
the Adviser did not waive fees and assume expenses, the total annual operat-
ing expenses of the Portfolio's Institutional Class Shares would be 1.24% of
average daily net assets.
For purposes of calculating the estimated fees and expenses set forth above,
it is assumed that the Portfolio's average daily net assets will be $10 mil-
lion.
The Adviser will not be reimbursed by the Fund for any advisory fees which
are waived or expenses which the Adviser may bear on behalf of the Portfolio.
Investors can get a better idea of how the Portfolio's operating expenses
will affect their own investments by examining the following chart. The chart
shows how much a hypothetical investor would pay in expenses, assuming that he
or she made an initial investment of $1,000, earned a 5% annual rate of return
and redeemed his or her investment at the end of the time period indicated.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
------ -------
<S> <C> <C>
Institutional Class Shares.................................... $ 6 $20
</TABLE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EX-
PENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE
SHOWN ABOVE.
1
<PAGE>
SUMMARY: ABOUT THE PORTFOLIO . . .
OBJECTIVE:
The Portfolio seeks to provide a maximum long term total return consistent
with reasonable risk to principal by investing in investment grade fixed in-
come securities of varying maturities. Income return is expected to be a pre-
dominant portion of the Portfolio's total return. Any capital return on the
Portfolio is dependent upon, among others factors, interest rate changes as
well as the average maturity and duration of the Portfolio.
The Adviser believes that by investing in undervalued securities with above
average effective yields and capital appreciation potential, the Portfolio
will generate superior returns over the long term, while minimizing volatility
and therefore downside risk.
There can be no assurance that the Portfolio will achieve its stated objec-
tive.
HOW IS THE PORTFOLIO MANAGED?
Barrow, Hanley, Mewhinney & Strauss, Inc. (the "Adviser") seeks to reduce
the risk that is inherent in the fast-changing bond market while adding to the
return available from a bond market index. (See "Details on Investment Poli-
cies.")
WHO MANAGES THE PORTFOLIO?
The Adviser is a registered investment adviser specializing in the active
management of stock, bond and balanced portfolios for institutional, tax-ex-
empt clients. Founded in 1979, the firm is a wholly-owned subsidiary of United
Asset Management Corporation. The Adviser currently has $18 billion in assets
under management. (See "Fund Management and Administration.")
WHO SHOULD INVEST IN THE PORTFOLIO?
The Portfolio is suitable for investors who seek high current income from
their investments and who wish to have moderate exposure to principal fluctua-
tion.
HOW TO INVEST
The Fund offers shares of the Portfolio through UAM Fund Distributors, Inc.
to investors without a sales commission at net asset value next determined af-
ter the purchase order is received in proper form. Share purchases may be made
by sending investments directly to the Fund. The minimum initial investment in
the Portfolio is $2,500 with certain exceptions as may be determined from time
to time by the officers of the Fund. The initial investment minimum for IRA
accounts is $500. The initial investment minimum for spousal IRA accounts is
$250. The minimum for any subsequent investment is $100. (See "Buying, Selling
and Exchanging Shares.")
DIVIDENDS AND DISTRIBUTIONS
The Portfolio will normally distribute substantially all of its net invest-
ment income in the form of quarterly dividends. Any realized net capital gains
will also be distributed annually. Distributions will be reinvested in the
Portfolio's shares automatically unless an investor elects to receive cash
distributions. (See "Dividends, Capital Gains Distributions and Taxes.")
HOW TO REDEEM
Shares of the Portfolio may be redeemed on any business day when the New
York Stock Exchange ("NYSE") is open, without cost, at the net asset value of
the Portfolio next determined after receipt of the redemption request. The
Portfolio's share price will fluctuate with market and economic conditions.
Therefore, your investment may be worth more or less when redeemed than when
purchased. (See "Buying, Selling and Exchanging Shares.")
ADMINISTRATIVE SERVICES
UAM Fund Services, Inc. (the "Administrator"), a wholly-owned subsidiary of
United Asset Management Corporation ("UAM"), is responsible for performing and
overseeing administration, fund accounting, dividend disbursing and transfer
agency services provided to the Fund and its Portfolios by third-party service
providers. (See "Fund Management and Administration.")
2
<PAGE>
RISK FACTORS
Investing in the Portfolio entails a number of risks. As with any bond in-
vestment, shares of the Portfolio generally will rise in value when interest
rates fall and vice versa. In addition, you should consider the following fac-
tors that could effect the Portfolio's rate of return:
. The fixed income securities held by the Portfolio will be affected by
general changes in interest rates resulting in increases or decreases in
the value of the securities. The value of fixed income securities can be
expected to vary inversely to the changes in prevailing interest rates,
i.e., as interest rates decline, the market value of fixed income securi-
ties tends to increase and vice versa.
. The Portfolio may purchase securities on a when-issued forward delivery,
and delayed settlement basis which may not earn interest until issued and
may decline or appreciate in market value prior to their delivery to the
Portfolio.
. The Portfolio will invest in investment grade debt securities, but re-
serves the right to hold securities that have been downgraded. Adverse
economic and corporate changes and changes in interest rates may have a
greater impact on issuers of lower rated debt securities which the Port-
folio may hold, which may lead to greater price volatility. Also, lower
rated securities may be more difficult to value accurately or sell in the
secondary market.
. The Portfolio may invest in repurchase agreements which entail a risk of
loss should the seller default on its transaction.
. The Portfolio may lend its investment securities which entails a risk of
loss should a borrower fail financially.
Further information about these and other risk factors is contained in the
"Details on Investment Policies" section of this Prospectus.
FINANCIAL HIGHLIGHTS
The following table provides selected per share data and ratios for a share
outstanding throughout the period presented of the BHM&S Total Return Bond
Portfolio Institutional Class Shares and is part of the Portfolio's Financial
Statements included in the Portfolio's 1996 Annual Report to Shareholders
which is incorporated by reference into the Portfolio's Statement of Addi-
tional Information. The Portfolio's Financial Statements have been audited by
Price Waterhouse LLP whose opinion thereon (which is unqualified) is also in-
corporated by reference into the Portfolio's Statement of Additional Informa-
tion. The following information should be read in conjunction with the Portfo-
lio's 1996 Annual Report to Shareholders.
<TABLE>
<CAPTION>
NOVEMBER 1, 1995**
TO
APRIL 30, 1996+++
------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD......................... $10.00
------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income+..................................... 0.28
Net Realized and Unrealized Loss on Investments............ (0.27)
------
Total from Investment Operations......................... 0.01
------
DISTRIBUTIONS
Net Investment Income...................................... (0.16)
------
NET ASSET VALUE, END OF PERIOD............................... $ 9.85
======
TOTAL RETURN................................................. 0.08%++
======
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands)........................ $2,445
Ratio of Expenses to Average Net Assets+..................... 0.61%*#
Ratio of Net Investment Income to Average Net Assets+........ 5.53%*
Portfolio Turnover Rate...................................... 55%
</TABLE>
- -------
* Annualized
** Commencement of Operations.
+ Net of voluntarily waived fees and expenses assumed by the Adviser of $0.23
per share for the period ended April 30, 1996.
++ Total return would have been lower had certain fees not been waived and ex-
penses assumed by the Adviser during the period.
+++ Per share amounts for the period ended April 30, 1996, are based on aver-
age outstanding shares.
# The Ratio of Expenses to Average Net Assets excludes the effect of expense
offsets. If expense offsets were included, the Ratio of Expenses to Average
Net Assets would be 0.55%* for the period ended April 30, 1996.
3
<PAGE>
PERFORMANCE CALCULATIONS
The Portfolio measures performance by calculating yield and total return.
Both yield and total return figures are based on historical earnings and are
not intended to indicate future performance.
Yield refers to the income generated by an investment in the Portfolio over
a given period of time, expressed as an annual percentage rate. Yields are
calculated according to a standard that is required for all bond funds. As
this differs from other accounting methods, the quoted yield may not equal the
income actually paid to shareholders.
Total return is the change in value of an investment in the Portfolio over a
given period, assuming reinvestment of any dividends and capital gains. A cu-
mulative or aggregate total return reflects actual performance over a stated
period of time. An average annual total return is a hypothetical rate of re-
turn that, if achieved annually, would have produced the same cumulative total
return if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same as
actual year-by-year results.
Performance will be calculated separately for Institutional Class and Serv-
ice Class Shares. Dividends paid by the Portfolio with respect to Institu-
tional Class and Service Class Shares, to the extent any dividends are paid,
will be calculated in the same manner at the same time on the same day and
will be in the same amount, except that service fee and any incremental trans-
fer agency costs relating to Service Class Shares will be borne exclusively by
that class.
The Portfolio's performance may be compared to data prepared by independent
services which monitor the performance of investment companies, data reported
in financial and industry publications, and various indices as further de-
scribed in the Portfolio's Statement of Additional Information.
The Portfolio's Annual Report of Shareholders for the most recent fiscal
year end contains additional performance information that includes comparisons
with appropriate indices. The Annual Report is available without charge upon
request to the Fund by writing to the address or calling the phone number on
the cover of this Prospectus.
DETAILS ON INVESTMENT POLICIES
INVESTMENT STRATEGY
The Portfolio seeks to achieve its objective by investing at least 90% of
its total assets in a diversified portfolio of the following dollar-denomi-
nated investment grade issues of varying maturities: U.S. Treasuries and Agen-
cies; zero coupon obligations; mortgage-backed securities; asset-backed secu-
rities; corporate bonds; municipal bonds; and domestic, Yankeedollar and Euro-
dollar bonds. These issues may have fixed, variable or floating rates of in-
terest. As a matter of policy, the Adviser does not intend to invest in or
utilize futures, options or other complex derivative instruments or securi-
ties.
The Adviser expects to actively manage the Portfolio in order to meet the
investment objective. To produce favorable returns, the Adviser will invest in
securities that it believes to be undervalued, generating an effective yield
advantage versus the market. To control the volatility of returns, the Portfo-
lio will exhibit a high current yield, a high quality and a conservative matu-
rity structure.
The Adviser's decision process will focus on security selection, sector con-
centration and yield curve positioning. The Adviser will not engage in eco-
nomic forecasts in an attempt to "time the market" since it believes that
there are too many economic and political variables on a domestic and interna-
tional basis to do so successfully on a consistent basis. Therefore, the Port-
folio will maintain a conservative maturity structure, with securities being
diversified along the yield curve. The Portfolio's average weighted maturity
will generally be ten years or less, with the average weighted duration compa-
rable to that of the Salomon Brothers' Broad Investment Grade Index which is
approximately five years. Duration compares interest rate risk between securi-
ties with different coupons and different maturities, summarizing in a single
number the price sensitivity of a bond--how a bond's maturity and coupon rate
affect its exposure to interest rate risk. Duration involves the application
of several principles: as the maturity of a bond increases, duration increas-
es; as the coupon of a bond increases, duration decreases; generally, the
lower the coupon payment, the higher the duration; and duration decreases as
the frequency of the coupon payment increases. Generally, 10% or less of the
Portfolio's assets will be invested in various short-term investments. Please
see "Short-Term Investments" for a list of the short-term instruments in which
the Portfolio may invest.
The Adviser's security selection process begins by analyzing a bond's yield
to maturity premium (or spread) versus the most recently issued U.S. Treasury
of similar maturity. Having identified bonds with an above-average premium,
the Adviser will then evaluate those factors that will influence the bond's
future premium (i.e., credit quality, security structure, supply/demand rela-
tionships, etc.). The objective of this process is to identify those issues
whose
4
<PAGE>
yield premium will compress or narrow over a wide range of potential interest
rate change, supporting superior long term performance. Furthermore, the Ad-
viser will concentrate the Portfolio's holdings in industry sectors and matu-
rity ranges that it believes are undervalued while seeking a prudent level of
diversification.
The investment grade bonds in which the Portfolio will invest are those hav-
ing one of the four highest rating categories at the time of purchase (i.e.
Aaa, Aa, A or Baa by Moody's Investors Service, Inc. ("Moody's) or AAA, AA, A
or BBB by Standard & Poor's Corporation ("S&P")). Bonds rated Baa or BBB have
speculative characteristics and may be more sensitive to changes in the econ-
omy and the financial condition of issuers than higher rated bonds. The Ad-
viser also reserves the right to retain securities which are downgraded by one
or both of the rating agencies if, in the Adviser's judgment, retention of the
securities is warranted. Please refer to the Portfolio's Statement of Addi-
tional Information for a more detailed description of bond ratings.
MORTGAGE-BACKED SECURITIES
Mortgage-backed securities are collateralized by pools of mortgages assem-
bled for subsequent sale to investors by various governmental agencies and
sponsored organizations as well as by private issuers. The underlying assets
collateralizing the mortgage-backed securities may include single-family, mul-
tifamily and commercial properties. The two fundamental forms of mortgage-
backed securities are pass-throughs and collateralized mortgage obligations
("CMOs"). Pass-throughs produce monthly payments of principal and interest
from the underlying mortgages. CMOs divide the cash flows generated from the
underlying mortgages or mortgage pass-through securities into different seg-
ments known as "tranches" which are then retired sequentially over time in or-
der of priority. The market value and yield of mortgage-backed securities will
fluctuate due to market interest rate change and early prepayments of the un-
derlying mortgages. As prepayment rates on mortgages vary widely, it is diffi-
cult to accurately predict the average maturity of a particular pool of mort-
gages or tranches of CMOs. Although mortgage-backed securities may offer
higher yields than those available from other types of securities, mortgage-
backed securities may be less effective than other types of securities as a
means of "locking in" an attractive rate for an extended period because of the
prepayment feature. The majority of the mortgage-backed securities held by the
Portfolio will carry a guarantee from an agency of the U.S. Government of the
eventual payment of principal and interest.
ASSET-BACKED SECURITIES
Asset-backed securities are collateralized by short maturity loans such as
automobile receivables, credit card receivables, other types of receivables or
assets. Credit support for asset-backed securities may be based on the under-
lying assets and/or provided through credit enhancements by a third party.
Credit enhancement techniques include letters of credit, insurance bonds, lim-
ited guarantees (which are generally provided by the issuer), senior-subordi-
nated structures and over-collateralization.
YANKEEDOLLAR AND EURODOLLAR SECURITIES
Yankeedollar securities are U.S. dollar-based obligations issued inside the
United States by foreign entities. Eurodollar securities are U.S. dollar-based
obligations issued outside the United States by domestic or foreign entities.
Investment in these securities involve certain risks which are not typically
associated with investing in domestic securities. For example, non U.S.-based
issuers are not subject to the same accounting, auditing and financial report-
ing standards as are domestic issuers. There may be less publicly-available
information about non-U.S.-based issuers which may make it difficult to make
investment decisions. Political factors may have an impact in the form of con-
fiscatory taxation, expropriation or political instability in international
markets. Some foreign governments also levy withholding taxes against dividend
and interest income. Although in some countries a portion of the taxes is re-
coverable, the non-recovered portion of foreign withholding taxes will reduce
the income the Portfolio receives from the companies comprising its invest-
ments.
WHEN-ISSUED, FORWARD DELIVERY AND DELAYED SETTLEMENT SECURITIES
Occasionally, the Portfolio will invest in securities whose terms and char-
acteristics are already known but which have not yet been issued. These are
called "when-issued" or "forward delivery" securities. Usually these securi-
ties are purchased within a month of their issue date. "Delayed settlements"
occur when the Portfolio agrees to buy or sell securities at some time in the
future, making no payment until the transaction is actually completed.
The Portfolio will maintain a separate account of cash, U.S. Government se-
curities or other high-grade debt obligations at least equal to the value of
the purchase commitments until payment is made. Typically, no income accrues
on securities purchased on a delayed delivery basis prior to the time delivery
of the securities is made although the Portfolio may earn income on securities
it has deposited in a segregated account.
5
<PAGE>
The Portfolio engages in these types of purchases in order to buy securities
that fit with its investment objective at attractive prices, not to increase
its investment leverage. Securities purchased on a when-issued basis may de-
cline or appreciate in market value prior to their actual delivery to the
Portfolio.
MUNICIPAL OBLIGATIONS
Municipal obligations include notes, bonds and other securities issued by or
on behalf of states, territories and possessions of the U.S. and the District
of Columbia and their political subdivisions, agencies and instrumentalities.
The interest on such municipal obligations will normally be exempt from fed-
eral income tax. These bonds may be general obligation bonds secured by the
issuer's pledge of its full faith, credit and taxing power for the payment of
principal and interest, or they may be revenue bonds payable from specific
revenue sources, but not generally backed by the issuers taxing power. These
obligations may include private activity bonds where payment is the responsi-
bility of the private industrial user of the facility financed by the bonds.
Municipal notes are issued to meet short-term funding requirements of the is-
suer and include construction loan notes, short-term discount notes, tax-ex-
empt commercial paper, demand notes and similar instruments. Municipal bonds
will be rated investment grade by Moody's and S&P, as described above. Invest-
ment grade municipal notes will be rated MIG1, MIG2 or MIG3 by Moody's, or SP-
1 or SP-2 by S&P or, if unrated, determined by the Adviser to be of comparable
quality. Please refer to the Portfolio's Statement of Additional Information
for a detailed description of municipal note ratings.
ZERO COUPON SECURITIES
A portion of the Portfolio may be invested in zero coupon securities which
are fixed income securities that do not make regular interest payments. In-
stead, zero coupon securities are sold at substantial discounts from their
face value. The difference between a zero coupon security's issue or purchase
price and its face value represents the imputed interest an investor will earn
if the obligation is held until maturity. Zero coupon securities may offer the
Portfolio the opportunity to earn higher yields than those available on ordi-
nary interest paying obligations of similar credit quality and maturity. How-
ever, the prices of zero coupon securities may also exhibit greater price vol-
atility than ordinary fixed income securities because of the manner in which
their principal and interest are returned to the investor. The Portfolio will
accrue income on such investments for tax and accounting purposes, which is
distributable to shareholders. Since no cash is received at the time of accru-
al, the Portfolio may be required to liquidate portfolio securities to satisfy
its distribution obligations.
RESTRICTED AND ILLIQUID SECURITIES
The Portfolio may purchase restricted securities that are not registered for
sale to the general public but which are eligible for resale to qualified in-
stitutional investors under Rule 144A of the Securities Act of 1933. Under the
supervision of the Fund's Board of Trustees, the Adviser determines the li-
quidity of such investments by considering all relevant factors. Provided that
a dealer or institutional trading market in such securities exists, these re-
stricted securities are not treated as illiquid securities for purposes of the
Portfolio's investment limitations. Certain restrictions applicable to the
Portfolio limit its investment in securities that are illiquid by virtue of
the absence of a readily available market or because of legal or contractual
restrictions on resale to no more than 15% of the Portfolio's net assets. How-
ever, the Portfolio does not intend to invest in private placements or other
illiquid securities. The prices realized from the sales of these securities
could be less than those originally paid by the Portfolio or less than what
may be considered the fair value of such securities.
OTHER INVESTMENT POLICIES
The Portfolio may also invest in the following securities and investment
techniques:
SHORT-TERM INVESTMENTS
Under normal circumstances, the Portfolio may invest 10% or less of its to-
tal assets in short-term investments. For temporary purposes, such as when the
Portfolio is holding cash from share purchases while seeking appropriate in-
vestments or holding cash to meet anticipated redemptions, more than 10% of
the Portfolio's total assets may be invested in short-term investments. The
short-term investments in which the Portfolio will invest are domestic money
market instruments including repurchase agreements, certificates of deposit,
bankers acceptances, time deposits, U.S. Government obligations, U.S. Govern-
ment agency securities, short-term corporate debt securities, and commercial
paper rated A-1 or A-2 by S&P or Prime-1 or Prime-2 by Moody's or, if unrated,
determined by the Adviser to be of comparable quality. Please refer to the
Portfolio's Statement of Additional Information for a detailed description of
commercial paper ratings.
The Fund has received an Order from the Securities and Exchange Commission
(the "Commission") for permission to deposit the daily uninvested cash bal-
ances of the Fund's Portfolios, as well as cash for investment purposes, into
one or more joint accounts and to invest the daily balance of the joint ac-
counts in the following short-term
6
<PAGE>
investments: fully collateralized repurchase agreements, interest-bearing or
discounted commercial paper including dollar-denominated commercial paper of
foreign issuers, and any other short-term money market instruments including
variable rate demand notes and tax-exempt money instruments. By entering into
these investments on a joint basis, it is expected that a Portfolio may earn a
higher rate of return on investments relative to what it could earn
individually.
The Fund has received an Order from the Commission, which permits each of
its Portfolios to invest the greater of 5% of its total assets or $2.5 million
in the UAM Funds' DSI Money Market Portfolio for cash management purposes.
(See "Investment Companies.")
REPURCHASE AGREEMENTS
The Portfolio may invest in repurchase agreements collateralized by U.S.
Government securities, certificates of deposit, bankers acceptances and other
short-term securities as outlined above under "Short-Term Investments". In a
repurchase agreement, the Portfolio purchases a security and, at the same
time, arranges to sell it back to the original seller on a predetermined date.
The repurchase agreement states the price that the seller will pay for the se-
curity plus the interest rate that the purchaser will receive while holding
it. In effect, the Portfolio is lending its funds to the seller at an agreed
upon interest rate and receiving a security as collateral for the loan. Repur-
chase agreements can range from overnight to a fixed term. They are a common
way to earn interest on short-term funds.
The seller under a repurchase agreement will be required to maintain the
value of the securities subject to the agreement at not less than 100% of the
repurchase price of such securities. The Administrator and the Adviser will
mark to market daily the value of the securities purchased, and the Adviser
will, if necessary, require the seller to maintain additional securities to
ensure that the value is in compliance with the previous sentence.
There are some risks involved in repurchase agreements. If the seller de-
faults on its agreement to buy back the securities and the value of those se-
curities falls, the Portfolio may incur losses in selling these securities on
the open market. Also, if the seller enters bankruptcy, the bankruptcy court
may decide that the securities are collateral not within the control of the
Portfolio and therefore are subject to sale by the trustee in the bankruptcy.
Finally, it is possible that the Portfolio may not be able to prove its owner-
ship of the underlying securities. The Adviser believes that these risks can
be controlled by carefully reviewing the securities involved in a repurchase
agreement as well as the credit rating of the other party in the transaction.
The Fund has received an Order from the Commission for permission to pool
the daily uninvested cash balances of the Fund's Portfolios in order to invest
in repurchase agreements on a joint basis. By entering into repurchase agree-
ments on a joint basis, it is expected that a Portfolio will incur lower
transactions costs and potentially obtain higher rates of interest on such re-
purchase agreements. Each Portfolio's participation in the income from jointly
purchased repurchase agreements will be based on that Portfolio's percentage
share in the total repurchase agreement.
LENDING OF PORTFOLIO SECURITIES
The Portfolio may lend its investment securities to qualified institutional
investors who need to borrow securities in order to complete certain transac-
tions, such as covering short sales, avoiding failures to deliver securities
or completing arbitrage operations. The Portfolio will not loan portfolio se-
curities to the extent that greater than one-third of its assets at fair mar-
ket value would be committed to loans. 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 bro-
kers, 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 con-
sisting of cash, an irrevocable letter of credit issued by a domestic U.S.
bank or securities issued or guaranteed by the U.S. 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 invest-
ments). As with other extensions of credit, there are risks of delay in recov-
ery or even loss of rights in the securities loaned if the borrower of the se-
curities fails financially. These risks are similar to the ones involved with
repurchase agreements as discussed above. All relevant facts and circumstanc-
es, 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 Fund's Board of Trustees.
7
<PAGE>
At the present time, the Staff of the Commission does not object if an in-
vestment company pays reasonable negotiated fees in connection with loaned se-
curities 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.
INVESTMENT COMPANIES
As permitted by the 1940 Act, the Portfolio reserves the right to invest up
to 10% of its total assets, calculated at the time of investment, in the secu-
rities of other open-end or closed-end investment companies. No more than 5%
of the investing Portfolio's total assets may be invested in the securities of
any one investment company nor may it acquire more than 3% of the voting secu-
rities of any other investment company. The Portfolio will indirectly bear its
proportionate share of any management fees paid by an investment company in
which it invests in addition to the advisory fee paid by the Portfolio.
The Fund has received an Order from the Commission, which permits each of
its Portfolios to invest the greater of 5% of its total assets or $2.5 million
in the UAM Funds' DSI Money Market Portfolio for cash management purposes pro-
vided that the investment is consistent with the Portfolio's investment poli-
cies ad restrictions. Based upon the Portfolio's assets invested in the DSI
Money Market Portfolio, the investing Portfolio's adviser will waive its in-
vestment advisory fee and any other fees earned as a result of the Portfolio's
investment in the DSI Money Market Portfolio. The investing Portfolio will
bear expenses of the DSI Money Market Portfolio on the same basis as all of
its other shareholders.
PORTFOLIO TURNOVER
This Portfolio is managed for long-term appreciation rather than short-term
trading profits. As a result, the Adviser seeks to keep portfolio turnover as
low as possible depending on market conditions and generally below 150%. (A
turnover rate of 100% would mean that all securities in the Portfolio would be
replaced within a one-year period.) Occasionally, when the market shifts sud-
denly or when the prospects for individual bonds change quickly, the Adviser
may find it necessary to sell securities which have not been in the Portfolio
for very long. High rates of portfolio turnover necessarily result in heavier
brokerage and portfolio trading costs which is paid by the Portfolio. Higher
rates of turnover may result in the realization of capital gains. To the ex-
tent net short-term capital gains are realized, any distributions resulting
from such gains are considered ordinary income for federal income tax purpos-
es. The Portfolio will not normally engage in short-term trading, but it re-
serves the right to do so.
INVESTMENT LIMITATIONS
To help reduce the Portfolio's exposure to risk in specific situations, it
has adopted certain limitations associated with its investments and investment
practices. These policies and limitations are considered at the time of pur-
chase. The sale of instruments is not required in the event of a subsequent
change in circumstances.
The Portfolio's limitations are as follows:
(a) With respect to 75% of its assets, the Portfolio may not own more than
5% of the securities of any single issuer (other than investments is-
sued or guaranteed by the U.S. Government or any of its agencies or in-
strumentalities);
(b) With respect to 75% of its assets, the Portfolio may not own more than
10% of the outstanding voting securities of any one issuer;
(c)The Portfolio may not invest more than 5% of its assets in securities of
issuers (other than securities issued or guaranteed by the U.S. or for-
eign governments or their political subdivisions) that have (with prede-
cessors) less than 3 years of continuous operation;
(d)The Portfolio may not invest more than 25% of its assets in companies
within a single industry; however, there are no limitations on invest-
ments made in instruments issued or guaranteed by the U.S. Government
and its agencies;
(e)The Portfolio may not make loans except by purchasing debt securities in
accordance with its investment objective and policies or entering into
repurchase agreements or by lending its portfolio securities to banks,
brokers, dealers or other financial institutions as long as the loans
are made in compliance with the 1940 Act and the rules, regulations and
interpretations of the Commission;
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(f)The Portfolio may not borrow except from banks in extraordinary circum-
stances for temporary or emergency purposes. In this situation, the
Portfolio may not (1) borrow more than 33 1/3% of its gross assets and
(2) cannot buy additional securities if it borrows more than 5% of its
total assets; and
(g) The Portfolio may not pledge, mortgage or hypothecate more than 33 1/3%
of its total assets at fair market value.
The Portfolio's investment objective and investment limitations (a), (b),
(d), (e) and (f.1) listed above are fundamental policies and may be changed
only with the approval of the holders of a majority of the outstanding voting
securities of the Portfolio. The other investment limitations described here
and those not specified as fundamental in the Statement of Additional Informa-
tion as well as the Portfolio's investment policies are not fundamental, and
the Fund's Board of Trustees may change them without shareholder approval.
PORTFOLIO TRANSACTIONS
The Portfolio's Investment Advisory Agreement authorizes the Adviser to se-
lect the brokers or dealers that will execute the purchases and sales of in-
vestment securities for the Portfolio. The Agreement directs the Adviser to
use its best efforts to obtain the best available price and most favorable ex-
ecution for all the Portfolio's transactions.
It is not the Fund's practice to allocate brokerage or effect principal
transactions with dealers 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.
Some securities considered for investment by the Portfolio may also be ap-
propriate for other clients served by the Adviser. If a purchase or sale 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 fair and reasonable manner. Although there is no
specified formula for allocating such transactions, the various allocation
methods used by the Adviser, and the result of such allocations, are subject
to periodic review by the Fund's Board of Trustees.
BUYING, SELLING AND EXCHANGING SHARES
Shares of the Portfolio are offered through UAM Fund Distributors, Inc. to
investors at net asset value without a sales commission. The required minimum
initial investment in the Portfolio is $2,500 with certain exceptions as may
be determined from time to time by the officers of the Fund. The initial in-
vestment minimum for IRA accounts is $500. The initial investment minimum for
spousal IRA accounts is $250. The minimum for any subsequent investment is
$100.
Shares of the Portfolio may be purchased by customers of broker-dealers or
other financial intermediaries ("Service Agents") which have established
shareholder servicing relationships with the Fund on behalf of their custom-
ers. Service Agents may impose additional or different conditions or other ac-
count fees on the purchase and redemption of Portfolio shares by their custom-
ers. Each Service Agent is responsible for transmitting to its customers a
schedule of any such fees and information regarding any additional or differ-
ent conditions regarding purchases and redemptions. Shareholders who are cus-
tomers of Service Agents should consult their Service Agent for information
regarding these fees and conditions. Amounts paid to Service Agents may in-
clude transaction fees and/or service fees paid by the Fund from the Fund as-
sets attributable to the Service Agent, and would not be imposed if shares of
the Portfolio were purchased directly from the Fund or the Distributor. The
Service Agents may provide shareholder services to their customers that are
not available to a shareholder dealing directly with the Fund. A salesperson
and any other person entitled to receive compensation for selling or servicing
Portfolio shares may receive different compensation with respect to one par-
ticular class of shares over another in the Fund.
9
<PAGE>
Service Agents may enter confirmed purchases on behalf of their customers.
If you buy shares of the Portfolio in this manner, the Service Agent must re-
ceive your investment order before the close of trading on the NYSE, generally
4:00 p.m. (Eastern Time) and transmit it to the Fund's Sub-Transfer Agent
(prior to the close of the Sub-Transfer Agent's business day) and to the Dis-
tributor to receive that day's share price. Proper payment for the order must
be received by the Sub-Transfer Agent no later than the time when the Portfo-
lio is priced on the following business day. Service Agents are responsible to
their customers, the Fund and its Distributor for timely transmission of all
subscription and redemption requests, investment information, documentation
and money.
HOW TO BUY SHARES BY MAIL
If you have not invested in this Portfolio before, you will have to fill out
an Account Registration Form, which can be obtained by calling the Fund at 1-
800-638-7983. Once you have filled out the information on the form, separate
the two copies and sign both. We require an original signature on both copies.
Mail the original copy, together with a check payable to UAM Funds Trust, to:
UAM Funds Trust
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
Mail the other copy, without the check, to:
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
To make additional investments to an account you have already established,
simply mail your check to UAM Funds Service Center at the address above. Make
sure that your account number, account name, and the name of the Portfolio are
clearly indicated on the check so that we can properly credit your account.
For both initial and additional investments, your funds will be credited to
your account at the next share price calculated for the Portfolio after re-
ceipt. Investments received by 4 p.m. Eastern Time will be invested at the
share price calculated after the market closes on the same day. (For example,
if your check arrives on Tuesday morning, you will purchase shares at the
price calculated after the market close on Tuesday.)
HOW TO BUY SHARES BY WIRE
To make an initial investment by wire, you must first telephone the Fund at
1-800-638-7983. A representative will then ask you to provide the account num-
ber from which you plan to wire the funds, the bank or financial institution,
its address, phone number and your social security or taxpayer identification
number. You will then tell the representative which Portfolio you wish to in-
vest in and how much you want to invest. The representative will then provide
you with an account number and a wire control number. Please write it down and
keep it for your records.
Once you have an account number, call your bank and instruct them to wire a
specified amount to the Fund's custodian, The Chase Manhattan Bank ("Custodian
Bank"). You will be asked to provide the following information:
The Chase Manhattan Bank
ABA #021000021
UAM Funds
Credit DDA #9102772952
(Your Account Registration)
(Your Account Number)
(Wire Control Number)
After you have instructed the bank to wire the money, you must forward a
completed Account Registration Form to the UAM Funds Service Center as soon as
possible. You can obtain forms by calling the UAM Funds Service Center at 1-
800-638-7983. Federal Funds purchases will be accepted only on days when the
NYSE and the Custodian Bank are open for business.
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<PAGE>
Once you have made the initial purchase, you may buy additional shares by
wire at any time by following the instructions above. On all wired purchases,
funds will be invested at the share price calculated after the next market
close.
OTHER PURCHASE INFORMATION
Non-securities dealer Service Agents may receive transaction fees that are
the same as distribution fees paid to dealers.
The Fund reserves the right, in its sole discretion, to suspend the offering
of shares or reject purchase orders of the Portfolio when, in the judgement of
management, such suspension or rejection is in the best interests of the Fund.
Purchases of shares will be made in full and fractional shares calculated to
three decimal places. In the interest of economy and convenience, certificates
for shares will not be issued except at the written request of the sharehold-
er. Certificates for fractional shares, however, will not be issued.
IN-KIND PURCHASES
Under certain circumstances, investors who own securities may be able to ex-
change them directly for shares of the Portfolio without converting their in-
vestments into cash first. The Portfolio will accept such in-kind purchases
only if the securities offered for exchange meet the Portfolio's investment
criteria which are set forth in the "Details on Investment Policies" section
of this Prospectus. Once accepted, the securities will be valued according to
the process described in "How Share Prices are Determined" at the same time
the Portfolio's shares are valued. Once a value has been determined for both,
an exchange will be made. All dividends, interest, subscription, or other
rights pertaining to these securities become the Fund's property; if you re-
ceive any such items, you must deliver them to the Fund immediately. Securi-
ties acquired by the Portfolio through an in-kind purchase will be acquired
for investment and not for immediate resale.
The Fund will not accept securities for exchange unless they meet the fol-
lowing criteria:
. The securities are eligible to be included in the Portfolio and market
quotes can readily be obtained for them.
. The investor assures the Fund that the securities are not subject to
any restrictions under the Securities Act of 1933 or any other law or
regulation.
. The value of the securities exchanged does not increase the Portfo-
lio's position in any specific issuer's security to more than 5% of
the Portfolio's total net assets.
For tax purposes, the IRS generally treats any exchange of securities for
Portfolio shares as a sale of the securities. This means that if you exchange
securities which have appreciated in value since you bought them, you will re-
alize capital gains and incur a tax liability. If you are interested in such
an exchange, we suggest you discuss any potential tax liability with your tax
adviser before proceeding.
HOW TO SELL SHARES
You may sell shares by telephone or mail at any time, free of charge. Your
shares will be valued at the next price calculated after we receive your in-
structions to sell.
Your request should be addressed to:
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
11
<PAGE>
BY MAIL
To redeem by mail, you should include the following:
. your share certificates, if we have issued them to you;
. a letter which tells us how many shares you wish to redeem or, alter-
natively, what dollar amount you wish to receive;
. a signature guaranteed by your bank, broker or other financial insti-
tution (see "Signature Guarantees" below); and
. any other necessary legal documents, in the case of estates, trusts,
guardianships, custodianships, corporations, pension and profit-shar-
ing plans and other organizations.
If you are not sure which documents to send, please contact the UAM Funds
Service Center at 1-800-638-7983.
BY TELEPHONE
To redeem shares by telephone, you must have completed an Account Registra-
tion Form and returned it to the Fund. Once this form is on file, simply call
the Fund and request the redemption amount to be mailed to you or wired to
your bank. The Fund and the Fund's Transfer Agent will employ reasonable pre-
cautions to make sure that the instructions communicated by telephone are gen-
uine, and they may be liable for any losses if they fail to do so. You will be
asked to provide certain personal identification when you open an account, and
again, when you request a telephone redemption. In addition, all telephone
transaction requests will be recorded, and investors may be required to pro-
vide additional telecopied written instructions of such transaction requests.
Neither the Fund nor the Transfer Agent will be responsible for any loss, ad-
ditional cost or expense for following instructions received by telephone that
it reasonably believes are genuine. To change the name of the commercial bank
or the account designated to receive redemption proceeds, a written request
must be sent to the Fund at the address on the cover of this Prospectus. Re-
quests to change the bank or account must be signed by each shareholder, and
each signature must be guaranteed. You cannot redeem shares by telephone if
you hold stock certificates for these shares. Please contact one of the Fund's
representatives at 1-800-638-7983 for further details.
SIGNATURE GUARANTEES
To protect your account, the Fund and the Fund's Transfer Agent from fraud,
signature guarantees are required for certain redemptions. Signature guaran-
tees are used to verify that the person who authorizes a redemption is, in
fact, the registered shareholder. They are required whenever you:
. redeem shares and request that the proceeds be sent to someone other
than the registered shareholder(s) or to an address which is not the
registered address; or
. transfer shares from one Portfolio to another.
Signatures must be guaranteed by an "eligible guarantor institution" as de-
fined in Rule 17Ad-15 under the Securities Exchange Act of 1934. (The UAM
Funds Service Center can provide you with a full definition of the term.) You
can obtain a signature guarantee at almost any bank as well as through most
brokers, dealers, credit unions, national securities exchanges, registered se-
curities associations, clearing agencies and savings associations. 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 el-
igible guarantor institution which participates in a signature guarantee pro-
gram. A notary public can not provide a signature guarantee.
The signature guarantee must appear either:
. on the written request for redemption; or
. on a separate instrument for assignment (a "stock power") which should
specify the total number of shares to be redeemed; or
. on all stock certificates tendered for redemption, and, if shares held
by the Fund are also being redeemed, then on the letter or stock pow-
er.
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<PAGE>
FURTHER INFORMATION ON SELLING SHARES
Normally, the Fund will make payment for all shares sold under this proce-
dure within one business day after we receive a request. In no event will pay-
ment be made more than seven days after receipt of a redemption (sale) request
in good order. The Fund may suspend the right of redemption or postpone the
date at times when either the NYSE and Custodian Bank are closed or under any
emergency circumstances as determined by the Commission.
If the Fund's Board of Trustees determines that it would be detrimental to
the best interests of the remaining shareholders of the Fund to make payments
wholly or partly in cash, the Fund may pay the redemption proceeds in whole or
in part by a distribution in-kind of liquid securities held by the Portfolio
instead of cash in conformity with applicable rules of the Commission. Invest-
ors may incur brokerage charges when they sell portfolio securities received
in payment of redemptions.
HOW TO EXCHANGE SHARES
You may exchange Institutional Class Shares of the Portfolio for any other
Institutional Class Shares of a Portfolio included in 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 this Prospectus.) When you
exchange shares you sell your old shares and buy new ones, both at the price
calculated after the next market close. There is no sales charge for ex-
changes. Exchange requests may be made by phone or letter. Telephone exchanges
may be made only if the Fund holds all share certificates and if the registra-
tion of the two accounts is identical. Telephone exchanges received before 4
p.m. Eastern Time will be processed at the share price set after the market
close the same day. Exchanges received after 4 p.m. Eastern Time will be exe-
cuted at the share price determined at the market close on the following day.
For additional information regarding responsibility for the authenticity of
telephoned transaction instructions, see "How to Sell Shares--By Telephone"
above. The exchange privilege is only available with respect to Portfolios
that are registered for sale in a shareholder's state of residence.
Neither the Fund nor the Fund's Transfer Agent will take responsibility for
ensuring it is indeed the shareholder issuing the exchange orders; however, we
may use some of the precautions described above for selling shares. The Fund
may also limit both the frequency and the amount of exchanges permitted if it
is in the interest of the Fund's shareholders.
Please review a Portfolio's investment objective before shifting money into
it. Make sure its objective and strategies fit with your long-term goals. Be-
fore exchanging into a Portfolio, read its Prospectus. You may obtain one for
the Portfolio(s) you are interested in by calling the UAM Funds Service Center
at 1-800-638-7983. Remember, every time you exchange shares of one Portfolio
for another, your transaction is counted as a sale of the first security and a
purchase of the second. As a result, you may incur a tax liability by exchang-
ing shares if your investment has appreciated since you bought it. Consult
your tax adviser to determine your liability for capital gains taxes.
HOW SHARE PRICES ARE DETERMINED
The value of each class of shares of the Portfolio is calculated every day
that the NYSE is open. This means that shares are valued after the market
close, generally at 4 p.m. Eastern Time on Monday through Friday, except for
major holidays when the NYSE is closed.
The value of each share is determined by adding up the total market value of
all the securities in the Portfolio plus cash and other assets, deducting lia-
bilities, then dividing by the total number of shares outstanding of the
class. Net asset value includes interest on bonds and other fixed income secu-
rities which is accrued daily. Bonds and other fixed income securities are
valued according to the broadest and most representative market which will or-
dinarily be the over-the-counter market. In addition, bonds and other fixed
income securities may be valued on the basis of prices provided by a pricing
service when such prices are believed to reflect the fair market value of such
securities.
The value of other assets and securities for which no quotations are readily
available (including restricted securities) is determined in good faith at
fair value using methods determined by the Fund's Board of Trustees.
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
DIVIDENDS
Bonds generate income in the form of periodic interest payments. The Portfo-
lio will normally distribute substantially all of its net investment income
(for tax purposes) from these payments to shareholders in the form of quar-
terly dividends. You must instruct the Portfolio to pay out dividends and dis-
tributions in cash to you or to reinvest them. The Account Registration Form
has a box for your instructions. Unless you specifically tell us to distribute
dividend
13
<PAGE>
income in cash, however, we will assume you want this income reinvested. By
law, you must pay taxes on any dividend or interest income you receive on your
investments whether distributed in cash or reinvested in shares. The interest
on municipal obligations will normally be exempt from federal taxes. The Port-
folio will send you a statement annually telling you exactly how much dividend
income you have earned for tax purposes.
CAPITAL GAINS
Capital gains are another source of appreciation to the Portfolio. Basical-
ly, a gain is an increase in the value of a bond. However, for tax purposes,
the Portfolio does not need to "realize" or declare a capital gain unless it
sells a bond which has appreciated.
You can incur capital gains in two ways. First, if the Portfolio buys a bond
at one price, then sells it at a higher price, it will realize a capital gain.
At the end of the year, the capital gains computed under tax rules that the
Portfolio has made are added up and capital losses are subtracted. If any net
capital gains are realized, the Portfolio will normally distribute such gains
annually. You will receive a statement at the end of the year informing you of
your share of the Portfolio's capital gains.
The second way to incur capital gains is to sell or exchange your shares. If
you sell shares at a higher price than you bought them, you will be responsi-
ble for paying taxes on your gain. There are several ways to determine your
tax liability, and we suggest you contact a qualified tax adviser to help you
decide which is best for you.
TAXES
The Portfolio intends to qualify each year as a "regulated investment compa-
ny" under Federal tax law, and if it qualifies, the Portfolio will not be lia-
ble for Federal income taxes because it will have distributed all its net in-
vestment income and net realized capital gains to shareholders. Shareholders
will then have to pay taxes on the dividends, and on gains whether they are
distributed as cash or are reinvested in shares. Dividends and short-term cap-
ital gains will be taxed as ordinary income. Long-term capital gains distribu-
tions are taxed as long-term capital gains.
Dividends declared in October, November and December to shareholders of rec-
ord in such a month will be treated as if they had been paid by the Fund and
received by the shareholders on December 31 of the same calendar year, pro-
vided that the dividends are paid before February of the following year.
The Fund is required by Federal law to withhold 31% of reportable payments
(which may include dividends, capital gains distributions and redemptions)
paid to shareholders who have not complied with IRS regulations. In order to
avoid this withholding requirement, you must certify on the Account Registra-
tion Form or on a separate form supplied by the Fund that your Social Security
or Taxpayer Identification Number you have provided is correct and that you
are not currently subject to backup withholding or that you are exempt from
backup withholding.
Dividends and interest received by the Portfolio may give rise to withhold-
ing and other taxes imposed by foreign countries. These taxes reduce the Port-
folio's dividends but are included in the taxable income reported on your tax
statement if the Portfolio qualifies for this tax treatment and elects to pass
it through to you. You may be able to claim an offsetting tax credit or item-
ized deduction for foreign taxes paid by the Portfolio Your tax statement will
generally show the amount of foreign tax for which a credit or deduction may
be available.
FUND MANAGEMENT AND ADMINISTRATION
THE INVESTMENT ADVISER
The Adviser is a registered investment adviser formed in 1979. Its business
offices are located at One McKinney Plaza, 3232 McKinney Avenue, 15th Floor,
Dallas, Texas 75204. It is a wholly-owned subsidiary of United Asset Manage-
ment Corporation ("UAM") and provides and offers investment management serv-
ices to corporate, public and Taft-Hartley employee benefit plans, founda-
tions, endowments, health care and other institutions and investors. The Ad-
viser currently has $18 billion in assets under management.
The Portfolio pays an annual fee in monthly installments to the Adviser for
advisory services. This fee is accrued daily and paid every month as a per-
centage of the average net assets in the Portfolio for that month. The per-
centage fee on an annual basis is 0.35%. The Adviser has voluntarily agreed to
waive a portion of its advisory fees and to assume as the Adviser's own ex-
pense certain operating expenses otherwise payable by the Portfolio, if neces-
sary, in order to keep the Portfolio's Institutional Class Shares total oper-
ating expenses from exceeding 0.55% through December 31, 1997. The Adviser
will not be reimbursed by the Fund for any advisory fees which are waived or
expenses which the Adviser may bear on behalf of the Fund.
14
<PAGE>
The Adviser may compensate its affiliated companies for referring investors
to the Portfolio. The Distributor, UAM, the Adviser, or any of their affili-
ates, may, at its own expense, compensate a Service Agent or other person for
marketing, shareholders servicing, record-keeping and/or other services per-
formed with respect to the Fund, a Portfolio or any Class of Shares of a Port-
folio. The person making such payments may do so out of its revenues, its
profits or any other source available to it. Such services arrangements, when
in effect, are made generally available to all qualified service providers.
The Distributor, the Adviser and certain of their affiliates also partici-
pate, at the date of this Prospectus, in an arrangement with Smith Barney Inc.
under which Smith Barney provides certain defined contribution plan marketing
and other shareholder services and receives from such entitites .15 of the
daily net asset value of Institutional Class Shares held by Smith Barney's el-
igible customer accounts in addition to amounts payable to all selling deal-
ers. The Fund also compensates Smith Barney for services it provides to cer-
tain defined contribution plan shareholders that are not otherwise provided by
the Administrator.
The investment professionals at the Adviser responsible for the day-to-day
management of the Portfolio and their qualifications are as follows:
JOHN S. WILLIAMS -- Fixed Income Principal and the first fixed income port-
folio manager at the Adviser in 1983. Mr. Williams has also managed balanced
and municipal portfolios during his 20 year investment career. Prior to join-
ing the Adviser, he was responsible for the management of all fixed income as-
sets at Southland Trust, Dallas, Texas, and prior to that was a portfolio man-
ager and securities analyst at InterFirst Bank Dallas Trust Department. Mr.
Williams has served on the Advisory Committee for the Texas Teachers Retire-
ment System and is an active member in the Dallas Investment Analysts Society.
He currently is a Director of United Asset Management Corporation. Mr. Wil-
liams is a Chartered Financial Analyst, earning his MBA in 1976 and BBA in
1975 from Texas Christian University.
DAVID R. HARDIN -- Fixed Income Principal and portfolio manager. Prior to
joining the Adviser in 1987, Mr. Hardin was the Vice President and Director of
the Fixed Income Group of RepublicBank Dallas Trust Department. In that posi-
tion, he was responsible for the management of all taxable and tax-exempt
fixed income assets of the Trust Division, including all separately managed
accounts, collective investment fund products, and the creation of and manage-
ment of an SEC-registered mutual fund. Prior to attaining the Director's posi-
tion, Mr. Hardin was a taxable portfolio manager and also served as the credit
analyst for the Trust Division. He started his investment career as a private
placement credit analyst while employed by American General Insurance Co. in
Houston in 1976. Mr. Hardin received an M.Sc. from The London School of Eco-
nomics in 1975 and a BBA from Texas Christian University in 1973.
STEPHEN M. MILANO -- Fixed Income Principal and portfolio manager. Prior to
joining the Adviser in 1990, Mr. Milano was employed at Salomon Brothers, Inc.
in New York as a Vice President of the Fixed Income Strategy Group. In that
role he was a specialist in developing portfolio structure and strategies for
active management of taxable assets. While at Salomon he also served as Prod-
uct Sales Manager for International Fixed Income Securities and as a Mortgage
and Government Specialist. Prior to joining Salomon, Mr. Milano was employed
as a portfolio manager and trader at Equitable Life Assurance Society. He re-
ceived his BS in Economics with a concentration in Finance from the Wharton
School of the University of Pennsylvania in 1980.
J. SCOTT MCDONALD -- Fixed Income Portfolio Analyst/Trader. Mr. McDonald
joined the Adviser in 1995 to serve as a security and portfolio specialist for
the Fixed Income Group. In addition to security and portfolio analyst, he is
responsible for systems analytics used in the evaluation of effective/option
adjusted yield measurements for all securities and portfolios. He also serves
as compliance monitor of all fixed income portfolios to ensure commonality of
structure and diversification. Mr. McDonald previously served as the Senior
Vice President and Portfolio Manger at Life Partners Group, Inc. in Dallas.
While with Life Partners, he was responsible for implementing investment
strategy for $3 billion in assets. Additionally, he has been employed by Texas
Commerce Bank Houston as a Credit Supervisor and Lending Officer. He received
his MBA in 1991 from the University of Texas at Austin and his BBA from South-
ern Methodist University in 1986.
DEBORAH J. ANDERSON -- Senior Portfolio Assistant. Ms. Anderson is responsi-
ble for all administrative staff and their duties associated with the fixed
income product management, including communication/liaison with all clients,
custodial banks, and brokerage relationships. She supervises all operational
aspects of fixed income security trading and works extensively with reporting
requirements for all clients and regulatory agencies. Prior to joining the Ad-
viser in 1988, Ms. Anderson served as a Trust Officer with Trust Company of
Texas and its predecessor, Southland Trust Co. She received a BBA in Account-
ing from the University of Texas at Arlington in 1974.
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<PAGE>
THE ADMINISTRATOR
Pursuant to a Fund Administration Agreement dated April 15, 1996, UAM Fund
Services, Inc. ("UAMFSI"), a wholly-owned subsidiary of United Asset Manage-
ment Corporation with its principal office located at 211 Congress Street,
Boston, MA 02110, is responsible for performing and overseeing administration,
fund accounting, dividend disbursing and transfer agency services provided to
the Fund and its Portfolios. UAMFSI has subcontracted the performance of cer-
tain of such services to Chase Global Funds Services Company ("CGFSC"), an af-
filiate of The Chase Manhattan Bank, pursuant to a Mutual Funds Service Agree-
ment dated April 15, 1996. CGFSC is located at 73 Tremont Street, Boston, MA
02108-3913. Effective April 1, 1996, The Chase Manhattan Corporation, the par-
ent of The Chase Manhattan Bank, merged with and into Chemical Banking Corpo-
ration, the parent company of Chemical Bank. Chemical Banking Corporation is
the surviving corporation and will continue its existence under the name "The
Chase Manhattan Corporation".
Each Portfolio pays to UAMFSI a monthly fee comprised of two parts. A Port-
folio-specific fee which is retained by UAMFSI and a sub-administration fee
which UAMFSI in turn pays to CGFSC. The Portfolio-specific fee for the BHM&S
Total Return Bond Portfolio is 0.04% of aggregate net assets. The sub-adminis-
tration fee calculated on an annualized basis equals: 0.19 of 1% of the first
$200 million of total net assets of the Fund; 0.11 of 1% of the next $800 mil-
lion of total net assets of the Fund; 0.07 of 1% of total net assets in excess
of $1 billion but less than $3 billion; and 0.05 of 1% of total net assets in
excess of $3 billion. The sub-administration fees are allocated among the
Portfolios on the basis of their relative assets and are subject to a gradu-
ated minimum fee schedule per Portfolio of $2,000 per month upon inception of
a Portfolio to $70,000 annually after two years. If a separate class of shares
is added to a Portfolio, the minimum annual fee payable by that Portfolio may
be increased by up to $20,000.
THE DISTRIBUTOR
UAM Fund Distributors, Inc., a wholly-owned subsidiary of UAM with its prin-
cipal office located at 211 Congress Street, Boston, Massachusetts 02110, dis-
tributes the shares of the Fund. Under the Fund's Distribution Agreement (the
"Agreement"), the Distributor, as agent of the Fund, agrees to use its best
efforts as sole distributor of the Fund's shares. The Distributor does not re-
ceive any fee or other compensation under the Agreement with respect to the
Portfolio's Institutional Class Shares offered in this Prospectus. The Agree-
ment continues in effect as long as the Fund's Board of Trustees, including a
majority of the Trustees who are not parties to the Agreement or interested
persons of any such party, approve it on an annual basis. This Agreement pro-
vides that the Fund will bear the costs of the registration of its shares with
the Commission and various states and the printing of its prospectuses, state-
ments of additional information and reports to shareholders.
CUSTODIAN
The Chase Manhattan Bank serves as custodian of the Fund's assets.
ACCOUNTANTS
Price Waterhouse LLP acts as the independent accountants for the Fund and
audits its financial statements annually.
SUB-ADMINISTRATOR, SUB-TRANSFER AND SUB-DIVIDEND DISBURSING AGENT
Chase Global Funds Services Company, 73 Tremont Street, Boston, MA 02108,
acts as sub-administrator, sub-transfer agent and sub-dividend disbursing
agent for the Fund.
REPORTS
Investors will receive unaudited semi-annual financial statements and annual
financial statements audited by Price Waterhouse LLP.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be made by writing to the Fund at the address
listed on the cover of this Prospectus or by calling 1-800-638-7983.
LITIGATION
The Fund is not involved in any litigation.
GENERAL FUND INFORMATION
The Portfolio is one of a series of investment portfolios available through
UAM Funds Trust, an open-end investment company known as a "mutual fund." Each
of the Portfolios which make up the Fund have different investment objectives
and policies. Together, the Portfolios offer a diverse set of risk and return
characteristics to suit
16
<PAGE>
a wide range of investor needs. The Fund was organized under the name "The Re-
gis Fund II" on May 18, 1994 as a Delaware business trust. On October 31,
1995, the name of the Fund was changed to "UAM Funds Trust."
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Officers of the Fund manage its day-to-day operations and are responsi-
ble to the Fund's Board of Trustees. The Trustees set broad policies for the
Fund and elect its Officers.
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 sharehold-
ers.
The shares of each Portfolio and class have noncumulative voting rights,
which means that the holders of more than 50% of the shares voting for the
election of Trustees can elect 100% of the Trustees if they choose to do so. A
shareholder is entitled to one vote for each full share held (and a fractional
vote for each fractional share held), then standing in his name on the books
of the Fund. As of July 31, 1996, Hartnat & Co., Boston, MA held of record
100% of the outstanding shares of the BHM&S Total Return Bond Portfolio Insti-
tutional Class Shares and 62% of the outstanding shares of the BHM&S Total Re-
turn Bond Portfolio Institutional Service Class Shares for which ownership is
disclaimed or presumed disclaimed. The persons or organizations 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 per-
sons 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. Both Institutional Class and Service Class Shares represent an in-
terest in the same assets of a Portfolio and are identical in all respects ex-
cept that the Service Class Shares bear certain expenses related to share-
holder servicing, may bear expenses related to the distribution of such shares
and have exclusive voting rights with respect to matters relating to such dis-
tribution expenditures. Information about the Service Class Shares of the
Portfolios along with the fees and expenses associated with such shares is
available upon request by contacting the Fund at 1-800-638-7983. The Fund will
not ordinarily hold shareholder meetings except as required by the 1940 Act
and other applicable laws. The Fund has undertaken that its Trustees will call
a meeting of shareholders if such a meeting is requested in writing by the
holders of not less than 10% of the outstanding shares of the Fund. To the ex-
tent required by the undertaking, the Fund will assist shareholder communica-
tions in such matters.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR IN THE PORTFOLIO'S
STATEMENT OF ADDITIONAL INFORMATION IN CONNECTION WITH THE OFFERING MADE BY
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR ITS REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFERING BY THE FUND IN ANY JURISDICTION IN WHICH SUCH
OFFERING MAY NOT BE LAWFULLY MADE.
17
<PAGE>
UAM FUNDS -- INSTITUTIONAL CLASS SHARES
ACADIAN ASSET MANAGEMENT, INC.
Acadian Emerging Markets Portfolio
Acadian International Equity Portfolio
BARROW, HANLEY, MEWHINNEY & STRAUSS, INC.
BHM&S Total Return Bond Portfolio
CHICAGO ASSET MANAGEMENT COMPANY
Chicago Asset Management Value/Contrarian Portfolio
Chicago Asset Management Intermediate Bond Portfolio
COOKE & BIELER, INC.
C&B Balanced Portfolio
C&B Equity Portfolio
C.S. MCKEE & COMPANY, INC.
McKee U.S. Government Portfolio
McKee Domestic Equity Portfolio
McKee International Equity Portfolio
DEWEY SQUARE INVESTORS CORPORATION
DSI Disciplined Value Portfolio
DSI Limited Maturity Bond Portfolio
DSI Money Market Portfolio
FIDUCIARY MANAGEMENT ASSOCIATES, INC.
FMA Small Company Portfolio
INVESTMENT COUNSELORS OF MARYLAND, INC.
ICM Equity Portfolio
ICM Fixed Income Portfolio
ICM Small Company Portfolio
INVESTMENT RESEARCH COMPANY
IRC Enhanced Index Portfolio
MURRAY JOHNSTONE INTERNATIONAL LTD.
MJI International Equity Portfolio
NEWBOLD'S ASSET MANAGEMENT, INC.
Newbold's Equity Portfolio
NWQ INVESTMENT MANAGEMENT COMPANY
NWQ Balanced Portfolio
NWQ Value Equity Portfolio
RICE, HALL, JAMES & ASSOCIATES
Rice, Hall, James Small Cap Portfolio
SIRACH CAPITAL MANAGEMENT, INC.
Sirach Equity Portfolio
Sirach Fixed Income Portfolio
Sirach Growth Portfolio
Sirach Short-Term Reserves Portfolio
Sirach Special Equity Portfolio
Sirach Strategic Balanced Portfolio
SPECTRUM ASSET MANAGEMENT, INC.
SAMI Preferred Stock Income Portfolio
Enhanced Monthly Income Portfolio
STERLING CAPITAL MANAGEMENT COMPANY
Sterling Partners' Balanced Portfolio
Sterling Partners' Equity Portfolio
Sterling Partners' Short-Term Fixed Income Portfolio
18
<PAGE>
THOMPSON, SIEGEL & WALMSLEY, INC.
TS&W Equity Portfolio
TS&W Fixed Income Portfolio
TS&W International Equity Portfolio
19
<PAGE>
UAM FUNDS
UAM FUNDS SERVICE CENTER
C/O CHASE GLOBAL FUNDS SERVICES COMPANY
P.O. BOX 2798
BOSTON, MA 02208-2798
1-800-638-7983
- -------------------------------------------------------------------------------
CHICAGO ASSET MANAGEMENT INTERMEDIATE BOND PORTFOLIO
INSTITUTIONAL CLASS SHARES
INVESTMENT ADVISER: CHICAGO ASSET MANAGEMENT COMPANY
- -------------------------------------------------------------------------------
PROSPECTUS -- AUGUST 28, 1996
Chicago Asset Management Intermediate Bond Portfolio is one of a series of
investment portfolios available through UAM Funds Trust (hereinafter defined
as "UAM Funds" or the "Fund"), an open-end investment company known as a "mu-
tual fund." Each of the Portfolios that make up the Fund have different in-
vestment objectives and policies. In addition, several of the Fund's Portfo-
lios offer two separate classes of shares: Institutional Class Shares and In-
stitutional Service Class Shares. Chicago Asset Management Intermediate Bond
Portfolio currently offers only one class of shares. The securities offered in
this Prospectus are Institutional Class Shares of one diversified, no-load
Portfolio of the Fund managed by Chicago Asset Management Company.
The Chicago Asset Management Intermediate Bond Portfolio seeks a high level
of current income consistent with moderate interest rate exposure by investing
primarily in investment grade bonds with an average weighted maturity between
3 and 10 years. There can be no assurance that the Portfolio will achieve its
stated objective.
Please keep this Prospectus for future reference since it contains the in-
formation that you should understand before you invest. You may also wish to
review the Chicago Asset Management Portfolios' "Statement of Additional In-
formation" dated August 28, 1996 which was filed with the Securities and Ex-
change Commission and has been incorporated by reference into this Prospectus.
(It is legally considered to be a part of this Prospectus). Please call or
write the Fund at the above address to obtain a free copy of this Statement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Fees and Expenses.......................................................... 1
Summary: About the Portfolio............................................... 2
Risk Factors............................................................... 2
Financial Highlights....................................................... 3
Performance Calculations................................................... 4
Details on Investment Policies............................................. 4
Investment Limitations..................................................... 10
Buying, Selling and Exchanging Shares...................................... 11
How Share Prices are Determined............................................ 14
Dividends, Capital Gains Distributions and Taxes........................... 15
Fund Management and Administration......................................... 16
General Fund Information................................................... 17
UAM Funds -- Institutional Class Shares.................................... 19
</TABLE>
<PAGE>
FEES AND EXPENSES
Investors will be charged various fees and expenses incurred in managing the
Chicago Asset Management Intermediate Bond Portfolio (the "Portfolio") includ-
ing:
SHAREHOLDER TRANSACTION EXPENSES: These are the costs entailed in buying,
selling or exchanging shares of the Portfolio. The Portfolio does not charge
investors for shareholder transaction expenses. However, transaction fees may
be charged if you are a customer of a broker-dealer or other financial inter-
mediary who has established a shareholder servicing relationship with the Fund
on behalf of their customers. Please see "Buying, Selling and Exchanging
Shares" for further information.
<TABLE>
<S> <C>
Sales Load Imposed on Purchases....................................... NONE
Sales Load Imposed on Reinvested Dividends............................ NONE
Deferred Sales Load................................................... NONE
Redemption Fees....................................................... NONE
Exchange Fees......................................................... NONE
</TABLE>
ANNUAL FUND OPERATING EXPENSES: These expenses, which cover the cost of ad-
ministration, marketing and shareholder communication, and are usually quoted
as a percentage of net assets, are factored into the Portfolio's share price
and not billed directly to shareholders. They include:
<TABLE>
<S> <C>
Investment Advisory Fees.......................................... 0.48%
Administrative Fees............................................... 0.82%
12b-1 Fees........................................................ NONE
Other Expenses.................................................... 0.78%
Advisory Fees Waived and Expenses Assumed......................... (1.24)%
-----
Total Operating Expenses (After Fee Waiver and Expenses Assumed).. 0.84%*
=====
</TABLE>
- -------------------
* Absent the fees waived and expenses assumed by the Adviser, annualized total
operating expenses for the Portfolio, including revised administrative fees,
would be 2.08%. The annualized Total Operating Expenses excludes the effect
of expense offsets. If expense offsets were included, annualized Total Oper-
ating Expenses of the Portfolio would be 0.80%. Until further notice, Chi-
cago Asset Management Company has voluntarily agreed to waive its advisory
fee and to assume as the Adviser's own expense certain operating expenses
payable by the Portfolio, if necessary, in order to keep the Portfolio's to-
tal annual operating expenses (excluding interest, taxes and extraordinary
expenses) from exceeding 0.80% of average daily net assets. The Portfolio
will not reimburse the Adviser for any advisory fees which are waived or
Portfolio expenses which the Adviser may bear on behalf of the Portfolio.
The expenses and fees set forth above are based on the Portfolio's opera-
tions during the fiscal year ended April 30, 1996 except that they have been
restated to reflect current administrative fees. (See "Fund Management and Ad-
ministration").
Investors can get a better idea of how the Portfolio's operating expenses
will affect their own investments by examining the following chart. The chart
shows how much a hypothetical investor would pay in expenses, assuming that he
or she made an initial investment of $1,000, earned a 5% annual rate of return
and redeemed his or her investment at the end of the time period indicated.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Expenses................................... $ 9 $27 $47 $104
</TABLE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EX-
PENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE
SHOWN ABOVE.
1
<PAGE>
SUMMARY: ABOUT THE PORTFOLIO . . .
OBJECTIVE:
The Portfolio seeks a high level of current income consistent with moderate
interest rate exposure by investing primarily in investment grade notes or
bonds with an average weighted maturity between 3 and 10 years. There can be
no assurance that the Portfolio will achieve its stated objective.
HOW IS THE PORTFOLIO MANAGED?
Chicago Asset Management Company (the "Adviser") seeks to reduce the risk
that is inherent in the fast-changing bond market while adding to the return
available from a bond market index. (See "Details on Investment Policies.")
WHO MANAGES THE PORTFOLIO?
The Adviser is a registered investment adviser specializing in the active
management of stocks, bonds and balanced portfolios for institutional, tax-ex-
empt clients. Founded in 1983, the firm is a wholly-owned subsidiary of United
Asset Management Corporation. The Adviser currently has over $2 billion in as-
sets under management. (See "Fund Management and Administration.")
WHO SHOULD INVEST IN THE PORTFOLIO?
The Portfolio is suitable for investors who seek high current income from
their investments and who wish to have moderate exposure to principal fluctua-
tion.
HOW TO INVEST
The Fund offers shares of the Portfolio through UAM Fund Distributors, Inc.
to investors without a sales commission at net asset value next determined af-
ter the purchase order is received in proper form. Share purchases may be made
by sending investments directly to the Fund. The minimum initial investment in
the Portfolio is $2,000 with certain exceptions as may be determined from time
to time by the officers of the Fund. The initial investment minimum for IRA
accounts is $500. The initial investment minimum for spousal IRA accounts is
$250. The minimum for any subsequent investment is $100. (See "Buying, Selling
and Exchanging Shares.")
DIVIDENDS AND DISTRIBUTIONS
The Portfolio will normally distribute substantially all of its net invest-
ment income in the form of quarterly dividends. Any realized net capital gains
will also be distributed annually. Distributions will be reinvested in the
Portfolio's shares automatically unless an investor elects to receive cash
distributions. (See "Dividends, Capital Gains Distributions and Taxes.")
HOW TO REDEEM
Shares of the Portfolio may be redeemed on any business day when the New
York Stock Exchange ("NYSE") is open, without cost, at the net asset value of
the Portfolio next determined after receipt of the redemption request. The
Portfolio's share price will fluctuate with market and economic conditions.
Therefore, your investment may be worth more or less when redeemed than when
purchased. (See "Buying, Selling and Exchanging Shares.")
ADMINISTRATIVE SERVICES
UAM Fund Services, Inc. (the "Administrator"), a wholly-owned subsidiary of
United Asset Management Corporation ("UAM"), is responsible for performing and
overseeing administration, fund accounting, dividend disbursing and transfer
agency services provided to the Fund and its Portfolios by third-party service
providers. (See "Fund Management and Administration.")
RISK FACTORS
Investing in the Portfolio entails a number of risks. As with any bond in-
vestment, shares of the Portfolio generally will rise in value when interest
rates fall and vice versa. In addition, you should consider the following fac-
tors that could effect the Portfolio's rate of return:
. The Portfolio may engage in various strategies to seek to hedge its in-
vestments against movements in security prices, interest rates, and cur-
rency exchange rates by the use of derivatives including options and
futures as well as options on futures. Such strategies are commonly re-
ferred to as "derivatives" and involve the risk of imperfect correlation
in movements in the price of options and futures and movements in the
price of securities, interest rates or currencies which are the subject
of the hedge. To the extent these transactions involve foreign securities
or currencies, they are also subject to the risk factors associated with
foreign investments generally. There can be no assurance that a liquid
secondary market for options and futures contracts will exist at any spe-
cific time.
2
<PAGE>
. The Portfolio may invest up to 10% of its assets in securities rated
lower than Baa by Moody's Investors Service, Inc. or BBB by Standard &
Poor's Corporation. These securities carry a high degree of credit risk,
and are considered speculative by the major credit rating agencies and
are sometimes referred to as "junk bonds" and "high risk/high yield" se-
curities.
. The Portfolio may invest up to 10% of its assets in foreign issuers,
which may involve greater risks than investments in domestic securities,
such as foreign currency risk.
. The Portfolio may invest in repurchase agreements which entail a risk of
loss should the seller default on its transaction.
. The Portfolio may lend its investment securities which entails a risk of
loss should a borrower fail financially.
. The Portfolio may purchase securities on a when-issued basis which do not
earn interest until issued and may decline or appreciate in market value
prior to their delivery to the Portfolio.
Further information about these and other risk factors is contained in the
"Details on Investment Policies" section of this Prospectus.
FINANCIAL HIGHLIGHTS
The following table provides selected per share data and ratios for a share
outstanding throughout the period presented of the Chicago Asset Management
Intermediate Bond Portfolio and is part of the Portfolio's Financial State-
ments included in the Portfolio's 1996 Annual Report to Shareholders which is
incorporated by reference into the Portfolio's Statement of Additional Infor-
mation. The Portfolio's Financial Statements have been audited by Price
Waterhouse LLP whose opinion thereon (which is unqualified) is also incorpo-
rated by reference into the Portfolio's Statement of Additional Information.
The following information should be read in conjunction with the Portfolio's
1996 Annual Report to Shareholders.
<TABLE>
<CAPTION>
JANUARY 24, YEAR ENDED
1995** TO APRIL 30,
APRIL 30, 1995 1996
-------------- ----------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD............... $10.00 $10.33
------ ------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income+............................ 0.17 0.64
Net Realized and Unrealized Gain on
Investments+++................................... 0.26 0.14
------ ------
Total from Investment Operations................. 0.43 0.78
------ ------
DISTRIBUTIONS
Net Investment Income............................. (0.10) (0.64)
Net Realized Gain................................. -- (0.08)
------ ------
Total Distributions.............................. (0.10) (0.72)
------ ------
NET ASSET VALUE, END OF PERIOD..................... $10.33 $10.39
====== ======
TOTAL RETURN....................................... 4.31%++ 7.62%++
====== ======
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands).............. $5,267 $7,981
Ratio of Net Expenses to Average Net Assets+....... 0.80%* 0.84%#
Ratio of Net Investment Income to Average Net
Assets+........................................... 6.20%* 6.17%
Portfolio Turnover Rate............................ 0% 24%
</TABLE>
- -------
* Annualized.
** Commencement of Operations.
+ Net of voluntarily waived fees and expenses assumed by the Adviser of $.08
and $0.12 per share for the periods ended April 30, 1995 and April 30,
1996, respectively.
++ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser during the periods indicated.
+++ The amount shown for the year ended April 30, 1996 for a share outstanding
throughout that year does not accord with the aggregate net losses on in-
vestments for that year because of the timing of sales and repurchases of
the Portfolio shares in relation to fluctuating market value of the in-
vestments of the Portfolio.
# The Ratio of Expenses to Average Net Assets excludes the effect of expense
offsets. If expense offsets were included, the Ratio of Expenses to Aver-
age Net Assets would be 0.80%.
3
<PAGE>
PERFORMANCE CALCULATIONS
The Portfolio measures performance by calculating yield and total return.
Both yield and total return figures are based on historical earnings and are
not intended to indicate future performance.
Yield refers to the income generated by an investment in the Portfolio over
a given period of time, expressed as an annual percentage rate. Yields are
calculated according to a standard that is required for all bond funds. As
this differs from other accounting methods, the quoted yield may not equal the
income actually paid to shareholders.
Total return is the change in value of an investment in the Portfolio over a
given period, assuming reinvestment of any dividends and capital gains. A cu-
mulative or aggregate total return reflects actual performance over a stated
period of time. An average annual total return is a hypothetical rate of re-
turn that, if achieved annually, would have produced the same cumulative total
return if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same as
actual year-by-year results.
The Portfolio's performance may be compared to data prepared by independent
services which monitor the performance of investment companies, data reported
in financial and industry publications, and various indices as further de-
scribed in the Portfolio's Statement of Additional Information.
The Portfolio's Annual Report to Shareholders for the most recent fiscal
year end contains additional performance information that includes comparisons
with appropriate indices. The Annual Report is available without charge upon
request to the Fund by writing to the address or calling the phone number on
the cover of this Prospectus.
DETAILS ON INVESTMENT POLICIES
INVESTMENT STRATEGY
The Portfolio seeks to achieve its objective by investing at least 65% of
its total assets under normal circumstances in intermediate-term investment
grade notes or bonds with an average weighted maturity between 3 and 10 years.
Investment grade bonds are generally considered to be those bonds having one
of the four highest grades assigned by Moody's Investors Service, Inc.
("Moody's") (Aaa, Aa, A or Baa) or Standard & Poor's Corporation ("S&P") (AAA,
AA, A or BBB), or, if unrated, of equivalent quality in the Adviser's judg-
ment. Bonds rated Baa or BBB have speculative characteristics and may be more
sensitive to changes in the economy and the financial condition of issuers
than higher rated bonds. The Portfolio may invest no more than 10% of its as-
sets in debt securities that at the time of purchase are rated lower than in-
vestment grade. These are commonly referred to as "junk bonds". See the dis-
cussion of high yield securities in "Other Investment Policies" below. The Ad-
viser also reserves the right to retain securities which are downgraded by one
or both of the rating agencies, if in the Adviser's judgment, the retention of
securities is warranted. The Portfolio's Statement of Additional Information
contains a more detailed description of corporate bond ratings.
The Adviser will seek to achieve the Portfolio's objective by investing in
the following securities: corporate notes and bonds, mortgage-backed securi-
ties including collateralized mortgage obligations and asset-backed securities
which are deemed by the Adviser and the rating agencies cited above to be of
investment grade quality; variable rate and fixed rate debt securities which
at the time of purchase are rated as investment grade; short-term securities
deemed by the Adviser to have comparable ratings; and securities of, or guar-
anteed by, the U.S. government, its agencies or instrumentalities.
While the Adviser anticipates that the majority of the assets in the Portfo-
lio will be U.S. dollar denominated securities, it reserves the right to pur-
chase obligations of foreign governments, agencies, or corporations denomi-
nated either in U.S. dollars or foreign currencies. The credit quality stan-
dards applied to foreign obligations are the same as those applied to the se-
lection of U.S. based securities.
For temporary defensive purposes, the Portfolio may reduce its holdings of
fixed income securities and increase, up to 100%, its holdings in short-term
investments. The Adviser may employ a defensive investment posture during ad-
verse market conditions. See "Short-Term Investments" below for a description
of the types of short-term instruments in which the Portfolio may invest for
temporary defensive purposes. When the Portfolio is in a temporary defensive
position, it may not necessarily be pursuing its stated investment objective.
The Portfolio is managed to control the risk of investing in the bond mar-
ket. The Adviser's investment approach offers some protection from fluctuation
in bond prices or volatility. Bond prices fluctuate dramatically due, most
4
<PAGE>
visibly, to changes in interest rates. Other factors impact the value of bonds
held in a Portfolio, as well, including changes in:
. Investors perception of the value of certain broad classes of bonds,
such as corporate, government or mortgage-backed securities (sector
positioning);
. The relationship between long-term and short-term interest rates (the
yield curve);
. The correlation between yields offered on different types of bonds
(spreads);
. The likelihood that bonds will be redeemed before maturity (option-ad-
justed spreads); and
. The fact that the credit outlook for a specific security can change
over time.
Since so many different factors affect bond prices, it has been difficult,
historically, for bond fund managers to outperform a bond market index. The
Adviser believes this is particularly true of bond managers who try to predict
interest rate movements. It has observed that these managers often change in-
vestment strategy at the top or bottom of the market, adding to long-term bond
holdings when interest rates are low and shoring up short-term positions when
interest rates are high. This tendency naturally causes portfolio performance
to vary widely. Therefore, the Adviser does not depend on the use of interest
rate forecasting in managing the Portfolio.
At market tops and bottoms, market psychology tends to drive bond prices to
extremes, overshooting their long-term equilibrium levels. As a result, "con-
ventional wisdom" about a given security or sector's price movement or rela-
tive value, is often wrong. The Adviser believes it will be possible to add to
the Portfolio's return by taking a contrarian approach and also focusing its
efforts on the more traditional aspects of portfolio management. In particu-
lar, the Adviser scrutinize sector valuations, coupons, call features and the
shape of the yield curve in making its investment decisions.
OTHER INVESTMENT POLICIES
The Portfolio may also, under normal circumstances, invest up to 35% of its
assets, unless restricted by additional limitations described below or in the
Portfolio's Statement of Additional Information, in the following securities,
investments or investment techniques.
FOREIGN INVESTMENTS
The Portfolio may invest up to 10% of its assets in securities of foreign
issuers. Investors should recognize that investing in foreign securities in-
volves certain risks which are not typically associated with investing in do-
mestic securities. Since bonds issued by foreign entities may be denominated
in foreign currencies, and the Portfolio may temporarily hold uninvested re-
serves in bank deposits in foreign currencies, the Portfolio's value may rise
or fall depending on currency exchange rates. The Portfolio may also have to
pay a fee to convert funds from one currency to another.
In addition, non-U.S.-based issuers are not subject to the same accounting,
auditing and financial reporting standards as are domestic issuers. There may
be less publicly-available information about non-U.S.-based issuers which may
make it difficult to make investment decisions. Political factors may have an
impact in the form of confiscatory taxation, expropriation or political insta-
bility in international markets.
Although the Portfolio will seek the most favorable trading costs available
in any given market, investors should recognize that foreign commissions are
generally higher than those in the United States. In addition, custodial ex-
penses, that is, fees paid to foreign financial institutions for holding the
Portfolio's securities, will generally be higher than would be the case in the
United States.
Some foreign governments also levy withholding taxes against dividend and
interest income. Although in some countries a portion of the taxes is recover-
able, the non-recovered portion of foreign withholding taxes will reduce the
income the Portfolio receives from the companies comprising its investments.
The Portfolio may engage in various investment techniques, such as futures
contracts, options on futures contracts, options, and interest rate swap
transactions. See "Other Investment Policies -- Hedging and Related Strategies
and Risk Considerations" for more information on these instruments.
HIGH YIELD/HIGH RISK SECURITIES
The Portfolio may invest up to 10% of its assets in high yield securities
which are rated below investment grade or are unrated. Lower rated or unrated
securities are more likely to react to developments affecting market and
credit risk than are more highly rated securities, which react primarily to
movements in the general level of interest rates.
5
<PAGE>
The market values of fixed-income securities tend to vary inversely with the
level of interest rates. Yields and market values of high yield securities
will fluctuate over time, reflecting not only changing interest rates but the
market's perception of credit quality and the outlook for economic growth.
When economic conditions appear to be deteriorating, medium to lower rated se-
curities may decline in value due to heightened concern over credit quality,
regardless of prevailing interest rates. The Adviser will consider both credit
risk and market risk in selecting fixed income securities for the Portfolio.
The high yield securities market is still relatively new and its recent
growth paralleled a long period of economic expansion and an increase in merg-
er, acquisition and leveraged buyout activity. Adverse economic developments
may disrupt the market for high yield securities, and severely affect the
ability of issuers, especially highly leveraged issuers, to service their debt
obligations or to repay their obligations upon maturity. In addition, the sec-
ondary market for high yield securities, which is concentrated in relatively
few market makers, may not be as liquid as the secondary market for more
highly rated securities. As a result, the Adviser could find it more difficult
to sell these securities or may be able to sell the securities only at prices
lower than if such securities were widely traded. Prices realized upon the
sale of such lower rated or unrated securities, under these circumstances, may
be less than the prices used in calculating the Portfolio's net asset value.
Prices for high yield securities may be affected by legislative and regula-
tory developments. These laws could adversely affect the Portfolio's net asset
value and investment practices, the secondary market for high yield securi-
ties, the financial condition of issuers of these securities and the value of
outstanding high yield securities. For example, federal legislation requiring
the divestiture by federally insured savings and loan associations of their
investments in high yield bonds and limiting the deductibility of interest by
certain corporate issuers of high yield bonds adversely affected the market in
recent years.
Lower rated or unrated debt obligations also present risks based on payment
expectations. If an issuer calls the obligations for redemption, the Fund may
have to replace the security with a lower yielding security, resulting in a
decreased return for investors. If the Portfolio experiences unexpected net
redemptions, it may be forced to sell its higher rated securities, resulting
in a decline in the overall credit quality of the Portfolio's investment port-
folio and increasing the exposure of the Portfolio to the risks of high yield
securities.
The chart below indicates the Portfolio's weighted average composition of
debt securities graded by S&P for the period from May 1, 1995 to April 30,
1996. The Portfolio did not invest in debt securities graded lower than in-
vestment grade during this period.
<TABLE>
<CAPTION>
DEBT SECURITIES
RATINGS
(STANDARD & PERCENTAGE OF
POOR'S) NET ASSETS
- --------------- -------------
<S> <C>
Government Agencies.............................................. 46.86%
AAA.............................................................. 9.67%
AA............................................................... 14.76%
A................................................................ 23.84%
BBB.............................................................. 4.88%
</TABLE>
The weighted average indicated above was calculated on a dollar weighted ba-
sis and was computed as at the end of each month through April 30, 1996. The
chart does not necessarily indicate what the composition of the Portfolio will
be in the current and subsequent fiscal years. For a description of S&P's rat-
ings of fixed income securities, see "Appendix -- Description of Corporate
Bond Ratings" in the Statement of Additional Information.
SHORT-TERM INVESTMENTS
In order to earn a return on uninvested assets, meet anticipated redemp-
tions, or for temporary defensive purposes, the Portfolio may invest a portion
of its assets in domestic and foreign money market instruments including cer-
tificates of deposit, bankers acceptances, time deposits, U.S. government ob-
ligations, U.S. government agency securities, short-term corporate debt secu-
rities, and commercial paper rated A-1 or A-2 by S&P or Prime-1 or Prime-2 by
Moody's or if unrated, determined by the Adviser to be of comparable quality.
The Fund has received an Order from the Securities and Exchange Commission
(the "Commission") for permission to deposit the daily uninvested cash bal-
ances of the Fund's Portfolios, as well as cash for investment purposes, into
one or more joint accounts and to invest the daily balance of the joint ac-
counts in the following short-term investments: fully collateralized repur-
chase agreements, interest-bearing or discounted commercial paper including
dollar-denominated commercial paper of foreign issuers, and any other short-
term money market instruments including variable rate demand notes and tax-ex-
empt money instruments. By entering into these investments on a joint basis,
it is expected that a Portfolio may earn a higher rate of return on invest-
ments relative to what it could earn individually.
6
<PAGE>
The Fund has received an Order from the Commission, which permits each of
its Portfolios to invest the greater of 5% of its total assets or $2.5 million
in the UAM Funds' DSI Money Market Portfolio for cash management purposes.
(See "Investment Companies.")
REPURCHASE AGREEMENTS
In a repurchase agreement, the Portfolio purchases a security and, at the
same time, arranges to sell it back to the original seller on a predetermined
date. The repurchase agreement states the price that the seller will pay for
the security plus the interest rate that the purchaser will receive while
holding it. In effect, the Portfolio is lending its funds to the seller at an
agreed upon interest rate and receiving a security as collateral for the loan.
Repurchase agreements can range from overnight to a fixed term. They are a
common way to earn interest on short-term funds.
The seller under a repurchase agreement will be required to maintain the
value of the securities subject to the agreement at not less than 100% of the
repurchase price of such securities. The Administrator and the Adviser will
mark to market daily the value of the securities purchased, and the Adviser
will, if necessary, require the seller to maintain additional securities to
ensure that the value is in compliance with the previous sentence.
There are some risks involved in repurchase agreements. If the seller de-
faults on its agreement to buy back the securities and the value of those se-
curities falls, the Portfolio may incur losses in selling these securities on
the open market. Also, if the seller enters bankruptcy, the bankruptcy court
may decide that the securities are collateral not within the control of the
Portfolio and therefore are subject to sale by the Trustee in the bankruptcy.
Finally, it is possible that the Portfolio may not be able to prove its owner-
ship of the underlying securities. The Adviser believes that these risks can
be controlled by carefully reviewing the securities involved in a repurchase
agreement as well as the credit rating of the other party in the transaction.
The Portfolio may invest in repurchase agreements collateralized by U.S. gov-
ernment securities, certificates of deposit, bankers acceptances and other
short-term securities as outlined above under "Short-Term Investments".
The Fund has received an Order from the Commission to pool the daily
uninvested cash balances of the Fund's Portfolios in order to invest in repur-
chase agreements on a joint basis. By entering into repurchase agreements on a
joint basis, it is expected that a Portfolio will incur lower transactions
costs and potentially obtain higher rates of interest on such repurchase
agreements. Each Portfolio's participation in the income from jointly pur-
chased repurchase agreements will be based on that Portfolio's percentage
share in the total repurchase agreement.
WHEN-ISSUED, FORWARD DELIVERY AND DELAYED SETTLEMENT SECURITIES
Occasionally, the Portfolio will invest in securities whose terms and char-
acteristics are already known but which have not yet been issued. These are
called "when-issued" or "forward delivery" securities. Usually these securi-
ties are purchased within a month of their issue date. "Delayed settlements"
occur when the Portfolio agrees to buy or sell securities at some time in the
future, making no payment until the transaction is actually completed.
The Portfolio will maintain a separate account of cash, U.S. government se-
curities or other high-grade debt obligations at least equal to the value of
the purchase commitments until payment is made. Typically, no income accrues
on securities purchased on a delayed delivery basis prior to the time delivery
of the securities is made although the Portfolio may earn income on securities
it has deposited in a segregated account.
The Portfolio engages in these types of purchases in order to buy securities
that fit with its investment objective at attractive prices -- not to increase
its investment leverage.
Securities purchased on a when-issued basis may decline or appreciate in
market value prior to their actual delivery to the Portfolio.
MORTGAGE-BACKED AND ASSET-BACKED SECURITIES
The Portfolio may invest in pools of consumer loans or mortgages such as
collateralized mortgage obligations. Asset-backed securities may consist of
securities collateralized by shorter term loans such as automobile loans, home
equity loans or credit card receivables, the payments from which are passed
through to the security holder. The value of these securities may be signifi-
cantly affected by changes in interest rates, the market's perceptions of the
issuers, and the creditworthiness of the parties involved. Mortgage-backed se-
curities in which the Portfolio may invest will either carry a guarantee from
an agency of the U.S. government or a private issuer of the timely payment of
principal and interest or are sufficiently seasoned to be considered by the
Adviser to be of investment grade quality.
7
<PAGE>
Mortgage-backed and asset-backed securities are also subject to prepayment
risks. Prepayment risk is the possibility that, during periods of declining
interest rates, mortgage prepayments will accelerate on mortgage-backed secu-
rities, especially on those with high stated interest rates. Prepayment risk
has two important effects. First, like bonds in general, mortgage-backed secu-
rities will generally decline in price when interest rates rise. Second, when
interest rates fall and additional mortgage prepayments must be reinvested at
lower interest rates, the Portfolio's rate of dividend income may be reduced.
Mortgage-backed and asset-backed securities held by the Portfolio will be
rated investment grade by Moody's or S&P at the time of purchase, or if
unrated, determined to be of equivalent quality by the Adviser.
HEDGING AND RELATED STRATEGIES AND RISK CONSIDERATIONS
The Portfolio may use options (both exchange-traded and over-the-counter) to
attempt to enhance income. To reduce the overall risk of its investments
(hedge), the Portfolio may use options, futures contracts, options on futures
contracts, and forward currency contracts. These instruments are commonly re-
ferred to as derivatives. Hedging strategies may also be used in an attempt to
manage the Portfolio's exposure to changing interest rates, security prices
and currency exchange rates. The Portfolio may buy or sell futures contracts,
write covered call options and buy put and call options on any security, index
or currency including options and futures traded on foreign exchanges and op-
tions not traded on exchanges. The Portfolio's ability to use these strategies
may be limited by market conditions, regulatory limits and tax considerations.
The Portfolio's obligation under such hedging strategies will be covered by
the maintenance of a segregated account consisting of cash, U.S. government
securities or high grade debt obligations equal to at least 100% of the Port-
folio's commitment. The Statement of Additional Information contains further
information on all of these strategies and the risks associated with them.
The Portfolio may write or purchase options in privately negotiated transac-
tions ("OTC Options") as well as listed options. OTC Options can be closed out
only by agreement with the other party to the transaction. Any OTC Option pur-
chased by the Portfolio is considered an illiquid security. Any OTC Option
written by the Portfolio will be with a qualified dealer pursuant to an agree-
ment under which the Portfolio may repurchase the option at a formula price.
Such options are considered illiquid to the extent that the formula price ex-
ceeds the intrinsic value of the option. The Portfolio may not purchase or
sell futures contracts or related options for which the aggregate initial mar-
gin and premiums exceed 5% of the fair market value of the Portfolio's assets.
In order to prevent leverage in connection with the purchase of futures con-
tracts or call options thereon by the Portfolio, an amount of cash, cash
equivalents or liquid high grade debt securities equal to the market value of
the obligation under the futures contracts or options (less any related market
deposits) will be maintained in a segregated account with the Fund's Custodian
Bank. The Portfolio may not invest more than 15% of its net assets in illiquid
securities and repurchase agreements which have a maturity of longer than
seven days. A more complete discussion of the potential risks involved in
transactions in options or futures contracts and related options is contained
in the Statement of Additional Information.
The Portfolio may enter into forward currency contracts for the purchase or
sale of a specified currency at a specified future date either with respect to
specific transactions or with respect to portfolio positions. For example,
when the Adviser anticipates making a currency exchange transaction in connec-
tion with the purchase or sale of a security, the Portfolio may enter into a
forward contract in order to set the exchange rate at which the transaction
will be made. The Portfolio also may enter into a forward contract to sell an
amount of a foreign currency approximating the value of some or all of the
Portfolio's securities denominated in such currency.
The Portfolio may use forward contracts in one currency or a basket of cur-
rencies to hedge against fluctuations in the value of another currency when
the Adviser anticipates there will be a correlation between the two and may
use forward currency contracts to shift the Portfolio's exposure to foreign
currency fluctuations from one country to another. The purpose of entering
into these contracts is to minimize the risk to the Portfolio from adverse
changes in the relationship between the U.S. dollar and foreign currencies.
The Portfolio may enter into interest rate protection transactions, which
consist of interest rate swaps and interest rate caps, collars and floors, for
hedging purposes. These transactions are commonly referred to as derivatives.
A swap is an agreement to exchange the return generated by one instrument for
the return generated by another instrument. The swaps in which the Portfolio
may also engage include interest rate caps, floors and collars under which one
party pays a single or periodic fixed amount (or premium), and the other party
pays periodic amounts on movement of a specified index.
The Portfolio may enter into interest rate protection transactions to pre-
serve a return or spread on a particular investment or portion of its portfo-
lio or to protect against any increase in the price of securities it antici-
pates purchasing at a later date. The Portfolio will enter into interest rate
protection transactions only with banks and recognized securities dealers be-
lieved by the Adviser to present minimal credit risks in accordance with
guidelines established by
8
<PAGE>
the Fund's Board of Trustees. Interest rate swaps, caps, floors and collars
will be treated as illiquid securities and will therefore, be subject to the
Portfolio's investment restriction limiting investment in illiquid securities
to no greater than 15% of its net assets.
RISK CONSIDERATIONS. The Portfolio might not employ any of the hedging
strategies described above, and there can be no assurance that any strategy
used will succeed. If the Adviser incorrectly forecasts interest rates, market
values or other economic factors in utilizing a hedging strategy for the Port-
folio, the Portfolio would be in a better position if it had not hedged at
all. In addition, the Portfolio will pay commissions and other costs in con-
nection with such hedging strategies which may increase the Portfolio's ex-
penses and reduce its return.
The use of these strategies involves certain risks, including (1) the fact
that skills needed to use hedging instruments are different from those needed
to select the Portfolio's securities, (2) possible imperfect correlation, or
even no correlation, between price movements of hedging instruments and price
movements of the investments being hedged, (3) the fact that, while hedging
strategies can reduce the risk of loss, they can also reduce the opportunity
for gain, or even result in losses, by offsetting favorable price movements in
hedged investments and (4) the possible inability of the Portfolio to purchase
or sell a portfolio security at a time that otherwise would be favorable for
it to do so, or the possible need for the Portfolio to sell a portfolio secu-
rity at a disadvantageous time, due to the need for it to maintain "cover" or
to segregate securities in connection with hedging transactions and the possi-
ble inability of the Portfolio to close out or to liquidate its hedged posi-
tion.
RESTRICTED AND ILLIQUID SECURITIES
The Portfolio may purchase restricted securities that are not registered for
sale to the general public but which are eligible for resale to qualified in-
stitutional investors under Rule 144A of the Securities Act of 1933. Under the
supervision of the Fund's Board of Trustees, the Adviser determines the li-
quidity of such investments by considering all relevant factors. Provided that
a dealer or institutional trading market in such securities exists, these re-
stricted securities are not treated as illiquid securities for purposes of the
Portfolio's investment limitations. The Portfolio may also invest up to 15% of
its net assets in securities that are illiquid by virtue of the absence of a
readily available market or because of legal or contractual restrictions on
resale. The prices realized from the sales of these securities could be less
than those originally paid by the Portfolio or less than what may be consid-
ered the fair value of such securities.
LENDING OF PORTFOLIO SECURITIES
The Portfolio may lend its investment securities to qualified institutional
investors who need to borrow securities in order to complete certain transac-
tions, such as covering short sales, avoiding failures to deliver securities
or completing arbitrage operations. The Portfolio will not loan portfolio se-
curities to the extent that greater than one-third of its assets at fair mar-
ket value, would be committed to loans. 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 bro-
kers, 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 (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 U.S. 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). As with other ex-
tensions of credit there are risks of delay in recovery or even loss of rights
in the securities loaned if the borrower of the securities fails financially.
These risks are similar to the ones involved with repurchase agreements as
discussed above. All relevant facts and circumstances, including the credit-
worthiness of the broker, dealer or institution, will be considered in making
decisions with respect to the lending of securities, subject to review by the
Fund's Board of Trustees.
At the present time, the Staff of the Commission does not object if an in-
vestment company pays reasonable negotiated fees in connection with loaned se-
curities 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. For additional information regarding the lending of se-
curities, please see the Statement of Additional Information.
9
<PAGE>
INVESTMENT COMPANIES
As permitted by the 1940 Act, the Portfolio reserves the right to invest up
to 10% of its total assets calculated at the time of investment, in the secu-
rities of other open-end or closed-end investment companies. No more than 5%
of the investing Portfolio's total assets may be invested in the securities of
any one investment company nor may it acquire more than 3% of the voting secu-
rities of any other investment company. The Portfolio will indirectly bear its
proportionate share of any management fees paid by an investment company in
which it invests in addition to the advisory fee paid by the Portfolio.
The Fund has received an Order from the Commission, which permits each of
its Portfolios to invest the greater of 5% of its total assets or $2.5 million
in the UAM Funds' DSI Money Market Portfolio for cash management purposes pro-
vided that the investment is consistent with the Portfolio's investment poli-
cies and restrictions. Based upon the Portfolio's assets invested in the DSI
Money Market Portfolio, the investing Portfolio's adviser will waive its in-
vestment advisory fee and any other fees earned as a result of the Portfolio's
investment in the DSI Money Market Portfolio. The investing Portfolio will
bear expenses of the DSI Money Market Portfolio on the same basis as all of
its other shareholders.
PORTFOLIO TURNOVER
This Portfolio is managed for long-term appreciation, rather than short-term
trading profits. As a result, the Adviser seeks to keep portfolio turnover be-
low 150%. (A turnover rate of 100% would mean that all securities in the Port-
folio would be replaced within a one-year period.) However, portfolio turnover
depends to a great degree on market conditions. Occasionally, when the market
shifts suddenly or when the prospects for individual bonds change quickly, the
Adviser may find it necessary to sell securities which have not been in the
Portfolio for very long. High rates of portfolio turnover necessarily result
in heavier brokerage and portfolio trading costs which is paid by the Portfo-
lio. Higher rates of turnover may result in the realization of capital gains.
To the extent net short-term capital gains are realized, any distributions re-
sulting from such gains are considered ordinary income for federal income tax
purposes. The Portfolio will not normally engage in short-term trading, but it
reserves the right to do so. The table set forth in "Financial Highlights"
presents the Portfolio's historical portfolio turnover rates.
INVESTMENT LIMITATIONS
To help reduce the Portfolio's exposure to risk in specific situations, it
has adopted certain limitations associated with its investments and investment
practices. These policies and limitations are considered at the time of pur-
chase. The sale of instruments is not required in the event of a subsequent
change in circumstances.
The Portfolio's limitations are as follows:
(a) With respect to 75% of its assets, the Portfolio may not own more than
5% of the securities of any single issuer (other than investments is-
sued or guaranteed by the U.S. Government or any of its agencies or in-
strumentalities);
(b) With respect to 75% of its assets, the Portfolio may not own more than
10% of the outstanding voting securities of any one issuer;
(c) The Portfolio may not invest more than 5% of its assets in securities
of issuers (other than securities issued or guaranteed by the U.S. or
foreign governments or their political subdivisions) that have (with
predecessors) less than 3 years of continuous operation;
(d) The Portfolio may not invest more than 25% of its assets in companies
within a single industry; however, there are no limitations on invest-
ments made in instruments issued or guaranteed by the U.S. Government
and its agencies;
(e) The Portfolio may not make loans except by purchasing debt securities
in accordance with its investment objective and policies or entering
into repurchase agreements or by lending its portfolio securities to
banks, brokers, dealers or other financial institutions as long as the
loans are made in compliance with the 1940 Act and the rules, regula-
tions and interpretations of the Commission;
(f) The Portfolio may not borrow except from banks in extraordinary circum-
stances for temporary or emergency purposes. In this situation, the
Portfolio may not (1) borrow more than 33 1/3% of its total assets and
(2) cannot buy additional securities if it borrows more than 5% of its
total assets; and
(g) The Portfolio may not pledge, mortgage or hypothecate more than 33 1/3%
of its total assets at fair market value.
10
<PAGE>
The Portfolio's investment objective and investment limitations (a), (b),
(d), (e) and (f.1) listed above are fundamental policies and may be changed
only with the approval of the holders of a majority of the outstanding voting
securities of the Portfolio. The other investment limitations described here,
those not specified as fundamental in the Statement of Additional Information,
and the Portfolio's investment policies are not fundamental, and the Fund's
Board of Trustees may change them without shareholder approval.
PORTFOLIO TRANSACTIONS
The Portfolio's Investment Advisory Agreement authorizes the Adviser to se-
lect the brokers or dealers that will execute the purchases and sales of in-
vestment securities for the Portfolio. The Agreement directs the Adviser to
use its best efforts to obtain the best available price and most favorable ex-
ecution for all the Portfolio's transactions.
It is not the Fund's practice to allocate brokerage or effect principal
transactions with dealers 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.
Some securities considered for investment by the Portfolio may also be ap-
propriate for other clients served by the Adviser. If a purchase or sale of
securities is 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 fair and reasonable manner. Although there is no
specified formula for allocating such transactions, the various allocation
methods used by the Adviser, and the result of such allocations, are subject
to periodic review by the Fund's Board of Trustees.
BUYING, SELLING AND EXCHANGING SHARES
Shares of the Portfolio are offered through UAM Fund Distributor, Inc. to
investors at net asset value without a sales commission. The required minimum
initial investment in the Portfolio is $2,000 with certain exceptions as may
be determined from time to time by the officers of the Fund. The initial in-
vestment minimum for IRA accounts is $500. The initial investment minimum for
spousal IRA accounts is $250. The minimum for any subsequent investment is
$100.
Shares of the Portfolio may be purchased by customers of broker-dealers or
other financial intermediaries ("Service Agents") which have established a
shareholder servicing relationship with the Fund on behalf of their customers.
Service Agents may impose additional or different conditions or other account
fees on the purchase and redemption of Portfolio shares by their customers.
Each Service Agent is responsible for transmitting to its customers a schedule
of any such fees and information regarding any additional or different condi-
tions regarding purchases and redemptions. Shareholders who are customers of
Service Agents should consult their Service Agent for information regarding
these fees and conditions. Amounts paid to Service Agents may include transac-
tion fees and/or service fees paid by the Fund from the Fund assets attribut-
able to the Service Agent, and would not be imposed if shares of the Portfolio
were purchased directly from the Fund or the Distributor. The Service Agents
may provide shareholder services to their customers that are not available to
a shareholder dealing directly with the Fund. A salesperson and any other per-
son entitled to receive compensation for selling or servicing Portfolio shares
may receive different compensation with respect to one particular class of
shares over another in the Fund.
Service Agents may enter confirmed purchase orders on behalf of their cus-
tomers. If you buy shares of the Portfolio in this manner, the Service Agent
must receive your investment order before the close of trading on the NYSE,
and transmit it to the Fund's Sub-Transfer Agent (prior to the close of the
Sub-Transfer Agent's business day, and to the Distributor to receive that
day's share price. Proper payment for the order must be received by the Sub-
Transfer Agent no later than the time when the Portfolio is priced on the fol-
lowing business day. Service Agents are responsible to their customers, the
Fund and its Distributor for timely transmission of all subscription and re-
demption requests, investment information, documentation and money.
11
<PAGE>
HOW TO BUY SHARES BY MAIL
If you have not invested in this Portfolio before, you will have to fill out
an Account Registration Form, which can be obtained by calling the Fund at 1-
800-638-7983. Once you have filled out the information on the form, separate
the two copies and sign both. We require an original signature on both forms.
Mail one copy, along with a check payable to UAM Funds Trust, to:
UAM Funds Trust
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
Mail the other copy, without the check, to:
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
To make additional investments to an account you have already established,
simply mail your check to the UAM Funds Service Center at the address above.
Make sure that your account number, account name, and the name of the Portfo-
lio are clearly indicated on the check so that we can properly credit your ac-
count.
For both initial and additional investments, your funds will be credited to
your account at the next share price calculated for the Portfolio after re-
ceipt. Investments received by 4:00 p.m. Eastern Time will be invested at the
share price calculated after the market closes on the same day. (For example,
if your check arrives on Tuesday morning, you will purchase shares at the
price calculated after the market closes on Tuesday.)
HOW TO BUY SHARES BY WIRE
To make an initial investment by wire, you must first telephone the Fund at
1-800-638-7983. A representative will then ask you to provide the account num-
ber from which you plan to wire the funds, the bank or financial institution,
its address, phone number and your social security or taxpayer identification
number. You will then tell the representative which Portfolio you wish to in-
vest in and how much you want to invest. The representative will then provide
you with an account number and a wire control number. Please write it down and
keep it for your records.
Once you have an account number, call your bank and instruct them to wire a
specified amount to the Fund's custodian, The Chase Manhattan Bank ("Custodian
Bank"). You will be asked to provide the following information:
The Chase Manhattan Bank
ABA #021000021
UAM Funds
Credit DDA #9102772952
(Your Account Registration) ______
(Your Account Number _____________
(Wire Control Number) ____________
After you have instructed the bank to wire the money, you must forward a
completed Account Registration Form to the UAM Funds Service Center as soon as
possible. You can obtain forms by calling the UAM Funds Service Center at
1-800-638-7983. Federal Funds purchases will be accepted only on days when the
NYSE and the Custodian Bank are open for business.
Once you have made the initial purchase, you may buy additional shares by
wire at any time by following the instructions above. On all wired purchases,
funds will be invested at the share price calculated after the next market
close.
IN-KIND PURCHASES
Under certain circumstances, investors who own securities may be able to ex-
change them directly for shares of the Portfolio without converting their in-
vestments into cash first. The Portfolio will accept such in-kind purchases
only if the securities offered for exchange meet the Portfolio's investment
criteria which are set forth in the "Details on Investment Policies" section
of this Prospectus. Once accepted, the shares will be valued according to the
process described in "How Share Prices are Determined" at the same time the
Portfolio's shares are valued. Once a value has been determined for both, an
exchange will be made. All dividends, interest, subscription, or other rights
pertaining to
12
<PAGE>
these securities become the Fund's property; if you receive any such items,
you must deliver them to the Fund immediately. Securities acquired through an
in-kind purchase will be acquired for investment and not for immediate resale.
The Fund will not accept securities for exchange unless they meet the fol-
lowing criteria:
. The securities are eligible to be included in the Portfolio and mar-
ket quotes can readily be obtained for them, e.g., as evidenced by a
listing on the American Stock Exchange, NYSE, NASDAQ, a foreign ex-
change or bonds rated Aaa, Aa, A or Baa by Moody's or AAA, AA, A or
BBB by S&P.
. The investor assures the Fund that the securities are not subject to
any restrictions under the Securities Act of 1933 or any other law
or regulation.
. The value of the securities exchanged does not increase the Portfo-
lio's position in any specific issuer's security to more than 5% of
the Portfolio's net assets.
For tax purposes, the IRS generally treats any exchange of securities for
Portfolio shares as a sale of the securities. This means that if you exchange
securities which have appreciated in value since you bought them, you will re-
alize capital gains and incur a tax liability. If you are interested in such
an exchange, we suggest you discuss any potential tax liability with your tax
adviser before proceeding.
HOW TO SELL SHARES
You may sell shares by telephone or mail at any time, free of charge. Your
shares will be valued at the next price calculated after we receive your in-
structions to sell.
BY MAIL
To redeem by mail, include:
. your share certificates, if we have issued them to you;
. a letter which tells us how many shares you wish to redeem or, al-
ternatively, what dollar amount you wish to receive;
. a signature guaranteed by your bank, broker or other financial in-
stitution (see "Signature Guarantees" below); and
. any other necessary legal documents, in the case of estates, trusts,
guardianships, custodianships, corporations, pension and profit-
sharing plans and other organizations.
If you are not sure which documents to send, please contact the UAM Funds
Service Center at 1-800-638-7983.
BY TELEPHONE
To redeem shares by telephone, you must have completed an Account Registra-
tion Form and have returned it to the Fund. Once this form is on file, simply
call the Fund and request the redemption amount to be mailed to you or wired
to your bank. The Fund and the Fund's Transfer Agent will employ reasonable
precautions to make sure that the instructions communicated by telephone are
genuine, and they may be liable for any losses if they fail to do so. You will
be asked to provide certain personal identification when you open an account,
and again, when you request a telephone redemption. In addition, all telephone
transaction requests will be recorded and investors may be required to provide
additional telecopied written instructions of such transaction requests. Nei-
ther the Fund nor the Transfer Agent will be responsible for any loss, addi-
tional cost or expense for following instructions received by telephone that
it reasonably believes are genuine. To change the name of the commercial bank
or the account designated to receive redemption proceeds, a written request
must be sent to the Fund at the address on the cover of this Prospectus. Re-
quests to change the bank or account must be signed by each shareholder and
each signature must be guaranteed. You cannot redeem shares by telephone if
you hold stock certificates for these shares. Please contact one of the Fund's
representatives at 1-800-638-7983 for further details.
SIGNATURE GUARANTEES
To protect your account, the Fund and the Fund's Transfer Agent from fraud,
signature guarantees are required for certain redemptions. Signature guaran-
tees are used to verify that the person who authorizes a redemption is, in
fact, the registered shareholder. They are required whenever you:
. redeem shares and request that the proceeds be sent to someone other
than the registered shareholder(s) or to an address which is not the
registered address; or
. transfer shares from one Portfolio to another.
13
<PAGE>
Signatures must be guaranteed by an "eligible guarantor institution" as de-
fined in Rule 17Ad-15 under the Securities Exchange Act of 1934. (The UAM
Funds Service Center can provide you with a full definition of the term.) You
can obtain a signature guarantee at almost any bank, as well as through most
brokers, dealers, credit unions, national securities exchanges, registered se-
curities associations, clearing agencies and savings associations. 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 el-
igible guarantor institution which participates in a signature guarantee pro-
gram. A notary public can not provide a signature guarantee.
The signature guarantee must appear either:
. on the written request for redemption; or
. on a separate instrument for assignment (a "stock power") which should
specify the total number of shares to be redeemed; or
. on all stock certificates tendered for redemption, and, if shares held
by the Fund are also being redeemed, then on the letter or stock pow-
er.
FURTHER INFORMATION ON SELLING SHARES
Normally, the Fund will make payment for all shares sold under this proce-
dure within one business day after we receive a request. In no event will pay-
ment be made more than seven days after receipt of a redemption (sale) request
in good order. The Fund may suspend the right of redemption or postpone the
date at times when either the NYSE and Custodian Bank are closed, or under any
emergency circumstances as determined by the Commission.
If the Fund's Board of Trustees determines that it would be detrimental to
the best interests of the remaining shareholders of the Fund to make payments
wholly or partly in cash, the Fund may pay the redemption proceeds in whole or
in part by a distribution in-kind of liquid securities held by the Portfolio
instead of cash in conformity with applicable rules of the Commission. Invest-
ors may incur brokerage charges when they sell portfolio securities received
in payment of redemptions.
HOW TO EXCHANGE SHARES
You may exchange Institutional Class Shares of the Portfolio for any other
Institutional Class Shares of a Portfolio included in 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 this Prospectus.) When
you exchange shares, you sell your old shares and buy new ones, both at the
price calculated after the next market close. There is no sales charge for ex-
changes. Exchange requests may be made by phone or letter. Telephone exchanges
may be made only if the Fund holds all share certificates and if the registra-
tion of the two accounts is identical. Telephone exchanges received before
4:00 p.m. Eastern Time will be processed at the share price set after the mar-
ket closes on the same day. Exchanges received after 4:00 p.m. Eastern Time
will be executed at the share price determined at the market close on the fol-
lowing day. For additional information regarding responsibility for the au-
thenticity of telephoned transaction instructions, see "How to Sell Shares --
By Telephone", above. The Fund may also limit both the frequency and the
amount of exchanges permitted if it is in the interest of the Fund's share-
holders. The exchange privilege is only available with respect to Portfolios
that are registered for sale in a shareholder's state of residence.
Please review a Portfolio's investment objective before shifting money into
it. Make sure its objective and strategies fit with your long-term goals. Be-
fore exchanging into a Portfolio, read its Prospectus. You may obtain one for
the Portfolio(s) you are interested in by calling the UAM Funds Service Center
at 1-800-638-7983. Remember, every time you exchange shares of one Portfolio
for another, your transaction is counted as a sale of the first security and a
purchase of the second. As a result, you may incur a tax liability by exchang-
ing shares if your investment has appreciated since you bought it. Consult
your tax adviser to determine your liability for capital gains taxes.
HOW SHARE PRICES ARE DETERMINED
The value of each share of the Portfolio is calculated every day that the
NYSE is open. This means that shares are valued after the market close, gener-
ally at 4:00 p.m. Eastern Time on Monday through Friday, except for major hol-
idays when the NYSE is closed.
The value of each share is determined by adding up the total market value of
all the securities in the Portfolio plus cash and other assets, deducting lia-
bilities and then dividing by the total number of shares outstanding.
14
<PAGE>
Net asset value includes interest on bonds and other fixed income securities
which is accrued daily. Bonds and other fixed income securities are valued ac-
cording to the broadest and most representative market which will ordinarily
be the over-the-counter market. In addition, bonds and other fixed income se-
curities may be valued on the basis of prices provided by a pricing service
when such prices are believed to reflect the fair market value of such securi-
ties. Bonds and other fixed income securities listed on a foreign exchange are
valued at the latest quoted sales price available before the time assets are
valued. For purposes of determining net asset value per share, all assets and
liabilities initially expressed in foreign currencies will be converted into
U.S. dollar equivalents based upon the bid price of such currencies against
U.S. dollars quoted by any major bank or by a broker.
The value of other assets and securities for which no quotations are readily
available (including restricted securities) is determined in good faith at
fair value using methods determined by the Fund's Board of Trustees.
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
DIVIDENDS
Bonds generate income in the form of periodic interest payments. The Portfo-
lio will normally distribute substantially all of its net investment income
(for tax purposes) to shareholders in the form of quarterly dividends. You
must instruct the Portfolio to pay out dividends and distributions in cash to
you or to reinvest them. The Account Registration Form has a box for your in-
structions. Unless you specifically tell us to distribute dividend income in
cash, however, we will assume you want this income reinvested. By law, you
must pay taxes on any dividend income you receive on your investments whether
distributed in cash or reinvested in shares. The Portfolio will send you a
statement annually telling you exactly how much dividend income you have
earned for tax purposes.
CAPITAL GAINS
Capital gains are another source of appreciation to the Portfolio. Basical-
ly, a gain is an increase in the value of a bond. However, for tax purposes,
the Portfolio does not "realize" a capital gain unless it sells a bond which
has appreciated.
You can incur capital gains in two ways. First, if the Portfolio buys a bond
at one price, then sells it at a higher price, it will realize a capital gain.
At the end of the year, the capital gains computed under tax rules that the
Portfolio has made are added up and capital losses are subtracted. If any net
capital gains are realized, the Portfolio will normally distribute such gains
annually. You will receive a statement at the end of the year informing you of
your share of the Portfolio's capital gains.
The second way to incur capital gains is to sell or exchange your shares. If
you sell shares at a higher price than you bought them at, you will be respon-
sible for paying taxes on your gain. There are several ways to determine your
tax liability, and we suggest you contact a qualified tax adviser to help you
decide which is best for you.
TAXES
The Portfolio intends to qualify each year as a "regulated investment compa-
ny" under Federal tax law, and if it qualifies, the Portfolio will not be lia-
ble for Federal income taxes, because it will have distributed all its net in-
vestment income and net realized capital gains to shareholders. Shareholders
will then have to pay taxes on the dividends, and on gains whether they are
distributed as cash or are reinvested in shares. Dividends and short-term cap-
ital gains will be taxed as ordinary income. Long-term capital gains distribu-
tions are taxed as long-term capital gains. Such dividends and distributions
may be subject to state and local taxes. Redemptions of shares in the Portfo-
lio are taxable events for Federal income tax purposes. A shareholder may also
be subject to state and local taxes on such redemptions.
Dividends declared in October, November and December to shareholders of rec-
ord in such a month will be treated as if they had been paid by the Fund and
received by the shareholders on December 31 of the same calendar year, pro-
vided that the dividends are paid before February of the following year.
The Fund is required by Federal law to withhold 31% of reportable payments
(which may include dividends, capital gains distributions and redemptions)
paid to shareholders who have not complied with IRS regulations. In order to
avoid this withholding requirement, you must certify on the Account Registra-
tion Form or on a separate form supplied by the Fund that your Social Security
or Taxpayer Identification Number you have provided is correct and that you
are not currently subject to backup withholding or that you are exempt from
backup withholding.
15
<PAGE>
Dividends and interest received by the Portfolio may give rise to withhold-
ing and other taxes imposed by foreign countries. These taxes reduce the Port-
folio's dividends but are included in the taxable income reported on your tax
statement if the Portfolio qualifies for this tax treatment and elects to pass
it through to you. You may be able to claim an offsetting tax credit or item-
ized deduction for foreign taxes paid by the Portfolio. Your tax statement
will generally show the amount of foreign tax for which a credit or deduction
may be available.
FUND MANAGEMENT AND ADMINISTRATION
THE INVESTMENT ADVISER
The Adviser is a registered investment adviser formed in 1983. Its business
offices are located at 70 West Madison Street, 56th Floor, Chicago, IL 60602.
It is a wholly-owned subsidiary of United Asset Management Corporation ("UAM")
and provides and offers investment management and advisory services to corpo-
rations, unions, pensions and profit-sharing plans, trusts, estates and other
institutions and investors. The Adviser currently has over $2 billion in as-
sets under management.
The Portfolio pays an annual fee in monthly installments to the adviser for
advisory services. This fee is accrued daily and paid monthly as a percentage
of the average daily net assets in the Portfolio for that month. The percent-
age fee on an annual basis is 0.48%.
The Adviser may compensate its affiliated companies for referring investors
to the Portfolio. The Distributor, UAM, the Adviser, or any of their affili-
ates, may, at its own expense, compensate a Service Agent or other person for
marketing, shareholders servicing, record-keeping and/or other services per-
formed with respect to the Fund, a Portfolio or any Class of Shares of a Port-
folio. The person making such payments may do so out of its revenues, its
profits or any other source available to it. Such services arrangements, when
in effect, are made generally available to all qualified service providers.
The Distributor, the Adviser and certain of their affiliates also partici-
pate, at the date of this Prospectus, in an arrangement with Smith Barney Inc.
under which Smith Barney provides certain defined contribution plan marketing
and other shareholder services and receives from such entitites .15 of the
daily net asset value of Institutional Class Shares held by Smith Barney's el-
igible customer accounts in addition to amounts payable to all selling deal-
ers. The Fund also compensates Smith Barney for services it provides to cer-
tain defined contribution plan shareholders that are not otherwise provided by
the Administrator.
The investment professionals at the Adviser responsible for the day-to-day
management of the Portfolio and their qualifications are as follows:
<TABLE>
<S> <C>
Jon F. Holsteen, President, CEO and Chief Investment Officer
Education: Lake Forest College, BA
Experience: Founded Chicago Asset Management Company in 1983.
William W. Zimmer, Executive Vice President and Chief Fixed Income Portfolio Manager
Education: Cornell College (Iowa), BA
Cornell University (New York), MBA
Experience: Joined Chicago Asset Management Company in 1988.
Frank F. Holsteen, Vice President
Education: Lake Forest College, BA
Experience: Joined Chicago Asset Management Company in 1993.
</TABLE>
THE ADMINISTRATOR
Pursuant to a Fund Administration Agreement dated April 15, 1996, UAM Fund
Services, Inc. ("UAMFSI") a wholly-owned subsidiary of United Asset Management
Corporation with its principal office located at 211 Congress Street, Boston,
MA 02110, is responsible for performing and overseeing administration, fund
accounting, dividend disbursing and transfer agency services provided to the
Fund and its Portfolios. UAMFSI has subcontracted the performance of certain
of such services to Chase Global Funds Services Company ("CGFSC"), an affili-
ate of The Chase Manhattan Bank, pursuant to a Mutual Funds Service Agreement
dated April 15, 1996. CGFSC is located at 73 Tremont Street, Boston, MA 02108-
3913. Effective April 1, 1996, The Chase Manhattan Corporation, the parent of
The Chase Manhattan Bank merged with and into Chemical Banking Corporation,
the parent company of Chemical Bank. Chemical Banking Corporation is the sur-
viving corporation and will continue its existence under the name "The Chase
Manhattan Corporation".
16
<PAGE>
Each Portfolio pays to UAMFSI a monthly fee comprised of two parts: a Port-
folio-specific fee which is retained by UAMFSI and a sub-administration fee
which UAMFSI in turn pays to CGFSC. The Portfolio-specific fee for the Chicago
Asset Management Intermediate Bond Portfolio is 0.04% of aggregate net assets.
The sub-administration fee calculated on an annualized basis equals: 0.19 of
1% of the first $200 million of total net assets of the Funds; 0.11 of 1% of
the next $800 million of net assets of the Funds; 0.07 of 1% of total net as-
sets in excess of $1 billion but less than $3 billion; and 0.05 of 1% of total
net assets in excess of $3 billion. The sub-administration fees are allocated
among the Portfolios on the basis of their relative assets and are subject to
a graduated minimum fee schedule per Portfolio of $2,000 per month upon incep-
tion of a Portfolio to $70,000 annually after two years. If a separate class
of shares is added to a Portfolio, the minimum annual fee payable by that
Portfolio may be increased by up to $20,000.
THE DISTRIBUTOR
UAM Fund Distributors, Inc., a wholly-owned subsidiary of UAM with its prin-
cipal office located at 211 Congress Street, Boston, Massachusetts 02110, dis-
tributes the shares of the Fund. Under the Fund's Distribution Agreement (the
"Distribution Agreement"), the Distributor, as agent of the Fund, agrees to
use its best efforts as sole distributor of the Fund's shares. The Distributor
does not receive any fee or other compensation under the Distribution Agree-
ment with respect to this Portfolio. The Distribution Agreement continues in
effect as long as the Fund's Board of Trustees, including a majority of the
Trustees who are not parties to the Distribution Agreement or interested per-
sons of any such party, approve it on an annual basis. The Distribution Agree-
ment provides that the Fund will bear the costs of the registration of its
shares with the Commission and various states and the printing of its prospec-
tuses, statements of additional information and reports to shareholders.
CUSTODIAN
The Chase Manhattan Bank serves as custodian of the Fund's assets.
ACCOUNTANTS
Price Waterhouse LLP acts as the independent accountants for the Fund and
audits its financial statements annually.
SUB-ADMINISTRATOR, SUB-TRANSFER AND SUB-DIVIDEND DISBURSING AGENT
Chase Global Funds Services Company, 73 Tremont Street, Boston, MA 02108,
acts as sub-administrator, sub-transfer agent and sub-dividend disbursing
agent for the Fund.
REPORTS
Investors will receive unaudited semi-annual financial statements and annual
financial statements audited by Price Waterhouse LLP.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be made by writing to the Fund at the address
listed on the cover of this Prospectus or by calling 1-800-638-7983.
LITIGATION
The Fund is not involved in any litigation.
GENERAL FUND INFORMATION
The Portfolio is one of a series of investment portfolios available through
UAM Funds Trust, an open-end investment company known as a "mutual fund." Each
of the Portfolios which make up the Fund have different investment objectives
and policies. Together, the Portfolios offer a diverse set of risk and return
characteristics to suit a wide range of investor needs. The Fund was organized
under the name "The Regis Fund II" on May 18, 1994 as a Delaware business
trust. On October 31, 1995, the name was changed to "UAM Funds Trust."
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Officers of the Fund manage its day-to-day operations and are responsi-
ble to the Fund's Board of Trustees. The Trustees set broad policies for the
Fund and elect its Officers.
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 sharehold-
ers.
The shares of each Portfolio and class have noncumulative voting rights,
which means that the holders of more than 50% of the shares voting for the
election of Trustees can elect 100% of the Trustees if they choose to do so. A
shareholder
17
<PAGE>
is entitled to one vote for each full share held (and a fractional vote for
each fractional share held), then standing in his or her name on the books of
the Fund. As of July 31, 1996, Edward Usher and Francis McCartin, Trustees,
Pipefitters Pension Fund Local 597, Chicago, IL held of record 89% of the out-
standing shares of the CAM Intermediate Bond Portfolio Institutional Class
Shares for which ownership is disclaimed or presumed disclaimed. The persons
or organizations 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. Both Institutional Class and In-
stitutional Service Class Shares represent an interest in the same assets of a
Portfolio and are identical in all respects except that the Institutional
Service Class Shares bear certain expenses related to shareholder servicing,
may bear expenses related to the distribution of such shares and have exclu-
sive voting rights with respect to matters relating to such distribution ex-
penditures. Information about the Service Class Shares of the Portfolios along
with the fees and expenses associated with such shares is available upon re-
quest by contacting the Fund at 1-800-638-7983. The Fund will not ordinarily
hold shareholder meetings except as required by the 1940 Act and other appli-
cable laws. The Fund has undertaken that its Trustees will call a meeting of
shareholders if such a meeting is requested in writing by the holders of not
less than 10% of the outstanding shares of the Fund. To the extent required by
the undertaking, the Fund will assist shareholder communications in such mat-
ters.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR IN THE PORTFOLIO'S
STATEMENT OF ADDITIONAL INFORMATION, IN CONNECTION WITH THE OFFERING MADE BY
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR ITS REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFERING BY THE FUND IN ANY JURISDICTION IN WHICH SUCH
OFFERING MAY NOT BE LAWFULLY MADE.
18
<PAGE>
UAM FUNDS -- INSTITUTIONAL CLASS SHARES
ACADIAN ASSET MANAGEMENT, INC.
Acadian Emerging Markets Portfolio
Acadian International Equity Portfolio
BARROW, HANLEY, MEWHINNEY & STRAUSS, INC.
BHM&S Total Return Bond Portfolio
CHICAGO ASSET MANAGEMENT COMPANY
Chicago Asset Management Value/Contrarian Portfolio
Chicago Asset Management Intermediate Bond Portfolio
COOKE & BIELER, INC.
C&B Balanced Portfolio
C&B Equity Portfolio
C.S. MCKEE & COMPANY, INC.
McKee U.S. Government Portfolio
McKee Domestic Equity Portfolio
McKee International Equity Portfolio
DEWEY SQUARE INVESTORS CORPORATION
DSI Disciplined Value Portfolio
DSI Limited Maturity Bond Portfolio
DSI Money Market Portfolio
FIDUCIARY MANAGEMENT ASSOCIATES, INC.
FMA Small Company Portfolio
INVESTMENT COUNSELORS OF MARYLAND, INC.
ICM Equity Portfolio
ICM Fixed Income Portfolio
ICM Small Company Portfolio
INVESTMENT RESEARCH COMPANY
IRC Enhanced Index Portfolio
MURRAY JOHNSTONE INTERNATIONAL LTD.
MJI International Equity Portfolio
NEWBOLD'S ASSET MANAGEMENT, INC.
Newbold's Equity Portfolio
NWQ INVESTMENT MANAGEMENT COMPANY
NWQ Balanced Portfolio
NWQ Value Equity Portfolio
RICE, HALL, JAMES & ASSOCIATES
Rice, Hall, James Small Cap Portfolio
SIRACH CAPITAL MANAGEMENT, INC.
Sirach Equity Portfolio
Sirach Fixed Income Portfolio
Sirach Growth Portfolio
Sirach Short-Term Reserves Portfolio
Sirach Special Equity Portfolio
Sirach Strategic Balanced Portfolio
SPECTRUM ASSET MANAGEMENT, INC.
SAMI Preferred Stock Income Portfolio
Enhanced Monthly Income Portfolio
19
<PAGE>
STERLING CAPITAL MANAGEMENT COMPANY
Sterling Partners' Balanced Portfolio
Sterling Partners' Equity Portfolio
Sterling Partners' Short-Term Fixed Income Portfolio
THOMPSON, SIEGEL & WALMSLEY, INC.
TS&W Equity Portfolio
TS&W Fixed Income Portfolio
TS&W International Equity Portfolio
20
<PAGE>
UAM FUNDS
UAM FUNDS SERVICE CENTER
C/O CHASE GLOBAL FUNDS SERVICES COMPANY
P.O. BOX 2798
BOSTON, MA 02208-2798
1-800-638-7983
- -------------------------------------------------------------------------------
CHICAGO ASSET MANAGEMENT VALUE/CONTRARIAN PORTFOLIO
INSTITUTIONAL CLASS SHARES
INVESTMENT ADVISER: CHICAGO ASSET MANAGEMENT COMPANY
- -------------------------------------------------------------------------------
PROSPECTUS -- AUGUST 28, 1996
Chicago Asset Management Value/Contrarian Portfolio is one of a series of
investment portfolios available through UAM Funds Trust (hereinafter defined
as "UAM Funds" or the "Fund"), an open-end investment company known as a "mu-
tual fund." Each of the Portfolios that make up the Fund have different in-
vestment objectives and policies. In addition, several of the Fund's Portfo-
lios offer two separate classes of shares: Institutional Class Shares and In-
stitutional Service Class Shares. Chicago Asset Management Value/Contrarian
Portfolio currently offers only one class of shares. The securities offered in
this Prospectus are Institutional Class Shares of one diversified, no-load
Portfolio of the Fund managed by Chicago Asset Management Company.
The Chicago Asset Management Value/Contrarian Portfolio seeks capital appre-
ciation by investing primarily in the common stock of large companies. The
common stocks in which the Portfolio invests are generally ones which have
performed poorly over the recent past but which may have the potential for
better-than-average performance in the future. There can be no assurance that
the Portfolio will achieve its stated objective.
Please keep this Prospectus for future reference since it contains the in-
formation that you should understand before you invest. You may also wish to
review Chicago Asset Management Portfolios' "Statement of Additional Informa-
tion" dated August 28, 1996 which was filed with the Securities and Exchange
Commission and has been incorporated by reference into this Prospectus. (It is
legally considered to be a part of this Prospectus). Please call or write the
Fund at the above address to obtain a free copy of this Statement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Fees and Expenses.......................................................... 1
Summary: About the Portfolio............................................... 2
Risk Factors............................................................... 2
Financial Highlights....................................................... 4
Performance Calculations................................................... 4
Details on Investment Policies............................................. 5
Investment Limitations..................................................... 9
Buying, Selling and Exchanging Shares...................................... 10
How Share Prices are Determined............................................ 14
Dividends, Capital Gains Distributions and Taxes........................... 14
Fund Management and Administration......................................... 15
General Fund Information................................................... 16
UAM Funds -- Institutional Class Shares.................................... 18
</TABLE>
<PAGE>
FEES AND EXPENSES
Investors will be charged various fees and expenses incurred in managing the
Chicago Asset Management Value/Contrarian Portfolio (the "Portfolio") includ-
ing:
SHAREHOLDER TRANSACTION EXPENSES: These are the costs entailed in buying,
selling or exchanging shares of the Portfolio. The Portfolio does not charge
investors for shareholder transaction expenses. However, transaction fees may
be charged if you are a customer of a broker-dealer or other financial inter-
mediary who has established a shareholder servicing relationship with the Fund
on behalf of their customers. Please see "Buying, Selling and Exchanging
Shares" for further information.
<TABLE>
<S> <C>
Sales Load Imposed on Purchases:................................... NONE
Sales Load Imposed on Reinvested Dividends:........................ NONE
Deferred Sales Load:............................................... NONE
Redemption Fees:................................................... NONE
Exchange Fees:..................................................... NONE
ANNUAL FUND OPERATING EXPENSES: These expenses, which cover the cost of ad-
ministration, marketing and shareholder communication, and are usually quoted
as a percentage of net assets, are factored into the Portfolio's share price
and not billed directly to shareholders. They include:
Investment Advisory Fees:.......................................... 0.625%
Administrative Fees:............................................... 6.610%
12b-1 Fees:........................................................ NONE
Other Expenses:.................................................... 6.030%
Advisory Fees Waived and Expenses Assumed.......................... (12.21)%
------
Total Operating Expenses (After Fee Waiver and Expenses Assumed)... 1.060%*
======
</TABLE>
- -------------------
* Absent the fees waived and expenses assumed by the Adviser, annualized to-
tal operating expenses for the Portfolio, including revised administrative
fees, would be 13.27%. The annualized Total Operating Expenses excludes
the effect of expense offsets. If expense offsets were included,
annualized Total Operating Expenses of the Portfolio would be 0.95%. Until
further notice, Chicago Asset Management Company has voluntarily agreed to
waive its advisory fee and to assume as the Adviser's own expense certain
operating expenses payable by the Portfolio, if necessary, in order to
keep the Portfolio's total annual operating expenses (excluding interest,
taxes and extraordinary expenses) from exceeding 0.95% of average daily
net assets. The Portfolio will not reimburse the Adviser for any advisory
fees which are waived or Portfolio expenses which the Adviser may bear on
behalf of the Portfolio.
The expenses and fees set forth above are based on the Portfolio's opera-
tions during the fiscal year ended April 30, 1996 except that they have been
restated to reflect current administrative fees. (See "Fund Management and Ad-
ministration").
Investors can get a better idea of how the Portfolio's operating expenses
will affect their own investments by examining the following chart. The chart
shows how much a hypothetical investor would pay in expenses, assuming that he
or she made an initial investment of $1,000, earned a 5% annual rate of return
and redeemed his or her investment at the end of the time period indicated.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Expenses:.................................... $11 $34 $58 $129
</TABLE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EX-
PENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE
SHOWN ABOVE.
1
<PAGE>
SUMMARY: ABOUT THE PORTFOLIO
OBJECTIVE:
The Portfolio seeks capital appreciation by investing primarily in the com-
mon stock of large companies. The common stocks in which the Portfolio invests
are generally ones which have performed poorly over the recent past but which
may have the potential for better-than-average performance in the future.
There can be no assurance that the Portfolio will achieve its stated objec-
tive.
HOW IS THE PORTFOLIO MANAGED?
Chicago Asset Management Company (the "Adviser") focuses mainly on choosing
individual stocks rather than trying to forecast the overall strength of the
stock market. In particular, the Adviser seeks to invest in large, established
quality companies whose stocks can be bought at attractive prices because of
the market's misperceptions about the companies' value.
As a contrarian, the Adviser seeks to invest by going against the consensus
opinion on individual stocks. To discover the appropriate contrarian position,
the Adviser stays in contact with stock market research analysts and takes
their assumptions into account in determining whether stocks are undervalued
or overvalued. (See "Details on Investment Policies.")
WHO MANAGES THE PORTFOLIO?
The Adviser is a registered investment adviser specializing in the active
management of stocks, bonds and balanced portfolios for institutional, tax-ex-
empt clients. Founded in 1983, the firm is a wholly-owned subsidiary of United
Asset Management Corporation. The Adviser currently has over $2 billion in as-
sets under management. (See "Fund Management and Administration.")
WHO SHOULD INVEST IN THE PORTFOLIO?
The Portfolio is suitable for investors who seek long-term capital apprecia-
tion in their investments and who are comfortable with aggressively seeking
long-term returns.
HOW TO INVEST
The Fund offers shares of beneficial interest of the Portfolio through UAM
Fund Distributors, Inc., to investors without a sales commission at net asset
value next determined after the purchase order is received in proper form.
Share purchases may be made by sending investments directly to the Fund. The
minimum initial investment in the Portfolio is $2,000 with certain exceptions
as may be determined from time to time by the officers of the Fund. The ini-
tial investment minimum for IRA accounts is $500. The initial investment mini-
mum for spousal IRA accounts is $250. The minimum for any subsequent invest-
ment is $100. (See "Buying, Selling and Exchanging Shares.")
DIVIDENDS AND DISTRIBUTIONS
The Portfolio will normally distribute substantially all of its net invest-
ment income in the form of quarterly dividends. Any realized net capital gains
will also be distributed annually. Distributions will be reinvested in the
Portfolio's shares automatically unless an investor elects to receive cash
distributions. (See "Dividends, Capital Gains Distributions and Taxes.")
HOW TO REDEEM
Shares of the Portfolio may be redeemed on any business day when the New
York Stock Exchange ("NYSE") is open, without cost, at the net asset value of
the Portfolio next determined after receipt of the redemption request. The
Portfolio's share price will fluctuate with market and economic conditions.
Therefore, your investment may be worth more or less when redeemed than when
purchased. (See "Buying, Selling and Exchanging Shares.")
ADMINISTRATIVE SERVICES
UAM Fund Services, Inc. (the "Administrator"), a wholly-owned subsidiary of
United Asset Management Corporation ("UAM"), is responsible for performing and
overseeing administration, fund accounting, dividend disbursing and transfer
agency services provided to the Fund and its Portfolios by third-party service
providers. (See "Fund Management and Administration.")
RISK FACTORS
Investing in the Portfolio entails a number of risks as with any stock in-
vestment. Like any stock investment, shares of the Portfolio will rise and
fall in value depending on market perceptions of the value of the underlying
stocks. Share prices may also be affected by overall market movements and by
changes in sector or industry performance.
2
<PAGE>
In addition, you should consider the following factors that could effect the
Portfolio's rate of return:
. The Portfolio may engage in various strategies to seek to hedge its in-
vestments against movements in security prices, interest rates and cur-
rency exchange rates by the use of derivatives including options and
futures as well as options on futures. Such strategies are commonly re-
ferred to as "derivatives" and involve the risk of imperfect correlation
in movements in the price of options and futures and movements in the
price of securities, interest rates or currencies which are the subject
of the hedge. To the extent these transactions involve foreign securi-
ties or currencies, they are also subject to the risk factors associated
with foreign investments generally. There can be no assurance that a
liquid secondary market for options and futures contracts will exist at
any specific time.
. The Portfolio may invest up to 10% of its assets in foreign issuers,
which may involve greater risks than investments in domestic securities,
such as foreign currency risk.
. The Portfolio may invest in repurchase agreements which entail a risk of
loss should the seller default on its transaction.
. The Portfolio may lend its investment securities which entails a risk of
loss should a borrower fail financially.
. The Portfolio may purchase securities on a when-issued basis which do
not earn interest until issued and may decline or appreciate in market
value prior to their delivery to the Portfolio.
Further information about these and other risk factors is contained in the
"Details on Investment Policies" section of this Prospectus.
3
<PAGE>
FINANCIAL HIGHLIGHTS
The following table provides selected per share data and ratios for a share
outstanding throughout the period presented of the Chicago Asset Management
Value/Contrarian Portfolio and is part of the Portfolio's Financial Statements
included in the Portfolio's 1996 Annual Report to Shareholders which is incor-
porated by reference into the Portfolio's Statement of Additional Information.
The Portfolio's Financial Statements have been audited by Price Waterhouse LLP
whose opinion thereon (which is unqualified) is also incorporated by reference
into the Portfolio's Statement of Additional Information. The following infor-
mation should be read in conjunction with the Portfolio's 1996 Annual Report
to Shareholders.
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 16, 1994** APRIL 30,
TO APRIL 30, 1995 1996
------------------- ----------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.......... $10.00 $ 11.14
------ -------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income+....................... 0.05 0.19
Net Realized and Unrealized Gain on Invest-
ments....................................... 1.13 2.86
------ -------
Total from Investment Operations............ 1.18 3.05
------ -------
DISTRIBUTIONS
Net Investment Income........................ (0.04) (0.23)
Net Realized Gain............................ -- (0.29)
------ -------
Total Distributions......................... (0.04) (0.52)
------ -------
NET ASSET VALUE, END OF PERIOD................ $11.14 $ 13.67
====== =======
TOTAL RETURN.................................. 11.81%++ 28.00%++
====== =======
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (thousands)......... $ 696 $ 892
Ratio of Net Expenses to Average Net Assets+.. 0.95%* 1.06%#
Ratio of Net Investment Income to Average Net
Assets+...................................... 1.54%* 1.51%
Portfolio Turnover Rate....................... 4% 33%
Average Commission Rate##..................... N/A $0.0600
</TABLE>
- -------
* Annualized.
** Commencement of Operations.
+ Net of voluntarily waived fees and expenses assumed by the Adviser of
$0.58 and $1.50 per share for the periods ended April 30, 1995 and April
30, 1996, respectively.
++ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser during the periods indicated.
# The Ratio of Expenses to Average Net Assets excludes the effect of expense
offsets. If expense offsets were included, the Ratio of Expenses to Average
Net Assets would be 0.95%.
## The Portfolio has elected to adopt the new SEC regulation requiring portfo-
lios with fiscal years beginning on or after September 1, 1995 to disclose
the average commission rate paid on trades for which commissions were
charged.
PERFORMANCE CALCULATIONS
The Portfolio measures performance by calculating total return. Total return
figures are based on historical earnings and are not intended to indicate fu-
ture performance.
Total return is the change in value of an investment in the Portfolio over a
given period, assuming reinvestment of any dividends and capital gains. A cu-
mulative or aggregate total return reflects actual performance over a stated
period of time. An average annual total return is a hypothetical rate of re-
turn that, if achieved annually, would have produced the same cumulative total
return if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same as
actual year-by-year results.
The Portfolio's performance may be compared to data prepared by independent
services which monitor the performance of investment companies, data reported
in financial and industry publications, and various indices as further de-
scribed in the Portfolio's Statement of Additional Information.
The Portfolio's Annual Report to Shareholders for the most recent fiscal
year end contains additional performance information that includes comparisons
with appropriate indices. The Annual Report is available without charge upon
request to the Fund by writing to the address or calling the phone number on
the cover of this Prospectus.
4
<PAGE>
DETAILS ON INVESTMENT POLICIES
INVESTMENT STRATEGY
The Portfolio will invest primarily in the common stock of large capitaliza-
tion companies which are defined as those with equity capitalizations greater
than $1 billion at the time of purchase. The Portfolio may also invest in se-
curities convertible into common stock. There is no particular percentage of
the Portfolio's assets to be invested in any one type of security, and it has
the ability to purchase other securities that may produce capital appreciation
such as non-convertible preferred stocks, rights and warrants to purchase com-
mon stocks, and bonds. However, under normal circumstances, the Adviser antic-
ipates no more than 5% of the Portfolio's total assets will be invested in in-
vestment grade bonds which are generally considered to be those bonds having
one of the four highest grades assigned by Moody's Investors Service, Inc.
("Moody's") (Aaa, Aa, A or Baa) or Standard & Poor's Corporation ("S&P") (AAA,
AA, A or BBB), or if unrated, of equivalent quality in the Adviser's judgment.
The Adviser also reserves the right to retain securities which are downgraded
by one or both of the rating agencies, if in the Adviser's judgment, the re-
tention of securities is warranted. The Portfolio's Statement of Additional
Information contains a detailed description of corporate bond ratings.
The Portfolio seeks to outperform the market during most time periods, not
by taking advantages of shifts in the overall direction of the market, but by
identifying attractive stocks. The Portfolio will invest primarily in estab-
lished, high-quality companies whose stock is selling at attractive prices due
to short-term market misperceptions. Consistent with avoiding market timing is
maintaining most individual common stock holdings in a somewhat equally
weighted position in the portfolio. This is sometimes accomplished by
rebalancing current holdings in response to a change in the market value of
individual holdings over time. A portion of a holding which has become larger
due to market value may be sold. Conversely an additional purchase of shares
of a current holding maybe made if market value change has reduced the holding
size in the total portfolio.
The Adviser's investment style is categorized as large cap, bottom-up, val-
ue-oriented and contrarian. Its investment philosophy and process is qualita-
tive rather than quantitative, and its investment approach has four distin-
guishing characteristics. First, it emphasizes large company stocks. Second,
it employs a bottom-up approach which means that it will construct the Portfo-
lio by focusing on individual stocks rather than industry groups or sectors.
(Top-down investors would first decide which industries or sectors they wanted
to emphasize and then would look for stocks that fit those requirements.)
Third, it is value-oriented. This means that it invests in stocks which are
priced below their true value because the market does not recognize their po-
tential. And fourth, it is contrarian in that it goes against the common con-
sensus when it invests. To maintain an effective contrarian posture, it
closely monitors market opinion makers, such as research analysts and commen-
tators, and then evaluates the impact of their opinions on stock prices, in
identifying securities which are undervalued or overvalued.
The Adviser selects individual issues which offer a combination of some of
the following characteristics:
. they are out-of-favor among market analysts;
. they are priced below the mid-point of their trading range over the past
year;
. the issuing companies have maintained sound financial credit quality as
measured by their balance sheets or they are expected to significantly
improve;
. they are large companies with market values over $1 billion;
. they have reasonable (based on normalized expected earnings) price-to-
earnings ratios; and
. they pay or may become able to pay a dividend.
When the Adviser believes that market conditions warrant a defensive posi-
tion, up to 100% of the Portfolio's assets may be held in cash and short-term
investments. See "Short-Term Investments and Repurchase Agreements" below for
a description of the types of short-term instruments in which the Portfolio
may invest for temporary defensive purposes. When the Portfolio is in a defen-
sive position, it may not necessarily be pursuing its stated investment objec-
tive.
OTHER INVESTMENT POLICIES
The Portfolio may also, under normal circumstances, invest up to 35% of its
assets, unless restricted by additional limitations described below or in the
Portfolio's Statement of Additional Information, in the following securities,
investments or investment techniques.
5
<PAGE>
FOREIGN INVESTMENTS
The Portfolio may invest in foreign securities which involve additional
risks not typically associated with investing in domestic securities. Since
securities issued by foreign entities may be denominated in foreign curren-
cies, and the Portfolio may temporarily hold uninvested reserves in bank de-
posits in foreign currencies, the Portfolio's value may rise or fall depending
on currency exchange rates. The Portfolio may also have to pay a fee to con-
vert funds from one currency to another.
In addition, non-U.S.-based companies are not subject to the same account-
ing, auditing and financial reporting standards as are domestic companies and
may have policies that are not comparable to those of domestic companies.
There may be less publicly-available information about non-U.S.-based compa-
nies which may make it difficult to make investment decisions. Securities of
some foreign companies are generally less liquid and more volatile than secu-
rities of comparable domestic companies. There is generally less government
supervision and regulation of stock exchanges, brokers and listed companies
than in the United States. Political factors may have an impact in the form of
confiscatory taxation, expropriation or political instability in international
markets.
Although the Portfolio will seek the most favorable trading costs available
in any given market, investors should recognize that foreign commissions are
generally higher than those in the United States. In addition, custodial ex-
penses, that is, fees paid to financial institutions for holding the Portfo-
lio's securities, will generally be higher than would be the case in the
United States.
Some foreign governments also levy withholding taxes against dividend and
interest income. Although in some countries a portion of the taxes is recover-
able, the non-recovered portion of foreign withholding taxes will reduce the
income the Portfolio receives from the companies comprising its investments.
AMERICAN DEPOSITARY RECEIPTS
The Portfolio intends to invest primarily in U.S.-based companies. In addi-
tion, the Portfolio may purchase shares of foreign based companies in the form
of American Depositary Receipts (ADRs). Investments in ADRs, which are domes-
tic securities representing ownership rights in foreign companies, will not
exceed 25% of the Portfolio's assets. ADRs may be sponsored or unsponsored.
Sponsored ADRs are established jointly by a depositary and the underlying is-
suer, whereas unsponsored ADR's may be established without participation by
the underlying issuer. Holders of an unsponsored ADR generally bear all the
costs associated with establishing the unsponsored ADR. The depositary of an
unsponsored ADR is under no obligation to distribute shareholder communica-
tions received from the underlying issuer or to pass through voting rights to
the holders of the unsponsored ADR with respect to the deposited securities or
pool of securities.
SHORT-TERM INVESTMENTS
In order to earn a return on uninvested assets, meet anticipated redemp-
tions, or for temporary defensive purposes, the Portfolio may invest a portion
of its assets in domestic and foreign money market instruments including cer-
tificates of deposit, bankers acceptances, time deposits, U.S. government ob-
ligations, U.S. government agency securities, short-term corporate debt secu-
rities, and commercial paper rated A-1 or A-2 by S&P or Prime-1 or Prime-2 by
Moody's or, if unrated, determined by the Adviser to be of comparable quality.
The Fund has received an Order from the Securities and Exchange Commission
(the "Commission") for permission to deposit the daily uninvested cash bal-
ances of the Fund's Portfolios, as well as cash for investment purposes, into
one or more joint accounts and to invest the daily balance of the joint ac-
counts in the following short-term investments: fully collateralized repur-
chase agreements, interest-bearing or discounted commercial paper including
dollar-denominated commercial paper of foreign issuers, and any other short-
term money market instruments including variable rate demand notes and tax-ex-
empt money instruments. By entering into these investments on a joint basis,
it is expected that a Portfolio may earn a higher rate of return on invest-
ments relative to what it could earn individually.
The Fund has received an Order from the Commission, which permits each of
its Portfolios to invest the greater of 5% of its total assets or $2.5 million
in the UAM Funds' DSI Money Market Portfolio for cash management purposes.
(See "Investment Companies.")
REPURCHASE AGREEMENTS
In a repurchase agreement, the Portfolio purchases a security and, at the
same time, arranges to sell it back to the original seller on a predetermined
date. The repurchase agreement states the price that the seller will pay for
the security plus the interest rate that the purchaser will receive while
holding it. In effect, the Portfolio is lending its funds to the seller at an
agreed upon interest rate and receiving a security as collateral for the loan.
Repurchase agreements can range from overnight to a fixed term. They are a
common way to earn interest on short-term funds.
6
<PAGE>
The seller under a repurchase agreement will be required to maintain the
value of the securities subject to the agreement at not less than 100% of the
repurchase price of such securities. The Administrator and the Adviser will
mark to market daily the value of the securities purchased, and the Adviser
will, if necessary, require the seller to maintain additional securities to
ensure that the value is in compliance with the previous sentence.
There are some risks involved in repurchase agreements. If the seller de-
faults on its agreement to buy back the securities and the value of those se-
curities falls, the Portfolio may incur losses in selling these securities on
the open market. Also, if the seller enters bankruptcy, the bankruptcy court
may decide that the securities are collateral not within the control of the
Portfolio and therefore are subject to sale by the Trustee in the bankruptcy.
Finally, it is possible that the Portfolio may not be able to prove its owner-
ship of the underlying securities.
The Adviser believes that these risks can be controlled by carefully review-
ing the securities involved in a repurchase agreement as well as the credit
rating of the other party in the transaction. The Portfolio may invest in re-
purchase agreements collateralized by U.S. government securities, certificates
of deposit, bankers acceptances and other short-term securities as outlined
above under "Short-Term Investments".
The Fund has received an Order from the Commission for permission to pool
the daily uninvested cash balances of the Fund's Portfolios in order to invest
in repurchase agreements on a joint basis. By entering into repurchase agree-
ments on a joint basis, it is expected that a Portfolio will incur lower
transactions costs and potentially obtain higher rates of interest on such re-
purchase agreements. Each Portfolio's participation in the income from jointly
purchased repurchase agreements will be based on that Portfolio's percentage
share in the total repurchase agreement.
WHEN-ISSUED, FORWARD DELIVERY AND DELAYED SETTLEMENT SECURITIES
Occasionally, the Portfolio will invest in securities whose terms and char-
acteristics are already known but which have not yet been issued. These are
called "when-issued" or "forward delivery" securities. Usually these securi-
ties are purchased within a month of their issue date. "Delayed settlements"
occur when the Portfolio agrees to buy or sell securities at some time in the
future, making no payment until the transaction is actually completed.
The Portfolio will maintain a separate account of cash, U.S. government se-
curities or other high-grade debt obligations at least equal to the value of
the purchase commitments until payment is made. Typically, no income accrues
on securities purchased on a delayed delivery basis prior to the time delivery
of the securities is made although the Portfolio may earn income on securities
it has deposited in a segregated account.
Securities purchased on a when-issued basis may decline or appreciate in
market value prior to their actual delivery to the Portfolio.
HEDGING AND RELATED STRATEGIES AND RISK CONSIDERATIONS
To reduce the overall risk of its investments (hedge), the Portfolio may use
options, futures contracts, options on futures contracts, and forward currency
contracts. These instruments are commonly referred to as derivatives. Hedging
strategies may also be used in an attempt to manage the Portfolio's exposure
to changing interest rates, security prices and currency exchange rates. The
Portfolio's ability to use these strategies may be limited by market condi-
tions, regulatory limits and tax considerations. The Portfolio's obligation
under such hedging strategies will be covered by the maintenance of a segre-
gated account consisting of cash, U.S. government securities or high grade
debt obligations equal to at least 100% of the Portfolio's commitment. The
Portfolio may buy or sell futures contracts, write covered call options and
buy put and call options on any security, index or currency including options
and futures traded on foreign exchanges and options not traded on exchanges.
The Portfolio's Statement of Additional Information contains further informa-
tion on all of these strategies and the risks associated with them.
The Portfolio may write or purchase options in privately negotiated transac-
tions ("OTC Options") as well as listed options. OTC Options can be closed out
only by agreement with the other party to the transaction. Any OTC Option pur-
chased by the Portfolio is considered an illiquid security. Any OTC Option
written by the Portfolio will be with a qualified dealer pursuant to an agree-
ment under which the Portfolio may repurchase the option at a formula price.
Such options are considered illiquid to the extent that the formula price ex-
ceeds the intrinsic value of the option. The Portfolio may not purchase or
sell futures contracts or related options for which the aggregate initial mar-
gin and premiums exceed 5% of the fair market value of the Portfolio's assets.
In order to prevent leverage in connection with the purchase of futures con-
tracts or call options thereon by the Portfolio, an amount of cash, cash
equivalents or liquid high grade debt securities equal to the market value of
the obligation under the futures contracts or options (less any related market
deposits) will be maintained in a segregated account with the Fund's Custodian
Bank. The Portfolio may not invest more than 15% of its net assets in illiquid
securities and repurchase agreements which have a maturity of longer than
seven days. A more complete discussion of the potential risks involved in
transactions in options or futures contracts and related options is contained
in the Portfolio's Statement of Additional Information.
7
<PAGE>
The Portfolio may enter into forward currency contracts for the purchase or
sale of a specified currency at a specified future date either with respect to
specific transactions or with respect to portfolio positions. For example,
when the Adviser anticipates making a currency exchange transaction in connec-
tion with the purchase or sale of a security, the Portfolio may enter into a
forward contract in order to set the exchange rate at which the transaction
will be made. The Portfolio also may enter into a forward contract to sell an
amount of a foreign currency approximating the value of some or all of the
Portfolio's securities denominated in such currency.
The Portfolio may use forward contracts in one currency or a basket of cur-
rencies to hedge against fluctuations in the value of another currency when
the Adviser anticipates there will be a correlation between the two and may
use forward currency contracts to shift the Portfolio's exposure to foreign
currency fluctuations from one country to another. The purpose of entering
into these contracts is to minimize the risk to the Portfolio from adverse
changes in the relationship between the U.S. dollar and foreign currencies.
The Portfolio may enter into interest rate protection transactions, which
consist of interest rate swaps and interest rate caps, collars and floors, for
hedging purposes. These transactions are commonly referred to as derivatives.
A swap is an agreement to exchange the return generated by one instrument for
the return generated by another instrument. The swaps in which the Portfolio
may also engage include interest rate caps, floors and collars under which one
party pays a single or periodic fixed amount (or premium), and the other party
pays periodic amounts on movement of a specified index.
The Portfolio may enter into interest rate protection transactions to pre-
serve a return or spread on a particular investment or portion of its portfo-
lio or to protect against any increase in the price of securities it antici-
pates purchasing at a later date. The Portfolio will enter into interest rate
protection transactions only with banks and recognized securities dealers be-
lieved by the Adviser to present minimal credit risks in accordance with
guidelines established by the Fund's Board of Trustees. Interest rate swaps,
caps, floors and collars will be treated as illiquid securities and will
therefore, be subject to the Portfolio's investment restriction limiting in-
vestment in illiquid securities to no greater than 15% of its net assets.
RISK CONSIDERATIONS. The Portfolio might not employ any of the hedging
strategies described above, and there can be no assurance that any strategy
used will succeed. If the Adviser incorrectly forecasts interest rates, market
values or other economic factors in utilizing a hedging strategy for the Port-
folio, the Portfolio would be in a better position if it had not hedged at
all. In addition, the Portfolio will pay commissions and other costs in con-
nection with such hedging strategies which may increase the Portfolio's ex-
penses and reduce its return.
The use of these strategies involves certain risks, including (1) the fact
that skills needed to use hedging instruments are different from those needed
to select the Portfolio's securities, (2) possible imperfect correlation, or
even no correlation, between price movements of hedging instruments and price
movements of the investments being hedged, (3) the fact that, while hedging
strategies can reduce the risk of loss, they can also reduce the opportunity
for gain, or even result in losses, by offsetting favorable price movements in
hedged investments and (4) the possible inability of the Portfolio to purchase
or sell a security at a time that otherwise would be favorable for it to do
so, or the possible need for the Portfolio to sell a security at a disadvanta-
geous time due to the need for it to maintain "cover" or to segregate securi-
ties in connection with hedging transactions and the possible inability of the
Portfolio to close out or to liquidate its hedged position.
RESTRICTED AND ILLIQUID SECURITIES
The Portfolio may purchase restricted securities that are not registered for
sale to the general public but which are eligible for resale to qualified in-
stitutional investors under Rule 144A of the Securities Act of 1933. Under the
supervision of the Fund's Board of Trustees, the Adviser determines the li-
quidity of such investments by considering all relevant factors. Provided that
a dealer or institutional trading market in such securities exists, these re-
stricted securities are not treated as illiquid securities for purposes of the
Portfolio's investment limitations. The Portfolio may also invest up to 15% of
its net assets in securities that are illiquid by virtue of the absence of a
readily available market or because of legal or contractual restrictions on
resale. The prices realized from the sales of these securities could be less
than those originally paid by the Portfolio or less than what may be consid-
ered the fair value of such securities.
LENDING OF PORTFOLIO SECURITIES
The Portfolio may lend its investment securities to qualified institutional
investors who need to borrow securities in order to complete certain transac-
tions, such as covering short sales, avoiding failures to deliver securities
or completing arbitrage operations. The Portfolio will not loan portfolio se-
curities to the extent that greater than one-third of its assets at fair mar-
ket value, would be committed to loans. By lending its investment securities,
the Portfolio
8
<PAGE>
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 inconsis-
tent with the Investment Company Act of 1940 (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 guar-
anteed by the U.S. 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 inter-
est on the loan (which may include the Portfolio investing any cash collateral
in interest bearing short-term investments). As with other extensions of cred-
it, there are risks of delay in recovery or even loss of rights in the securi-
ties loaned if the borrower of the securities fails financially. These risks
are similar to the ones involved with repurchase agreements as discussed
above. 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 Fund's Board of
Trustees.
At the present time, the Staff of the Commission does not object if an in-
vestment company pays reasonable negotiated fees in connection with loaned se-
curities 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. For additional information regarding the lending of se-
curities, please see the Statement of Additional Information.
INVESTMENT COMPANIES
As permitted by the 1940 Act, the Portfolio reserves the right to invest up
to 10% of its total assets, calculated at the time of investment, in the secu-
rities of other open-end or closed-end investment companies. No more than 5%
of the investing Portfolio's total assets may be invested in the securities of
any one investment company nor may it acquire more than 3% of the voting secu-
rities of any other investment company. The Portfolio will indirectly bear its
proportionate share of any management fees paid by an investment company in
which it invests in addition to the advisory fee paid by the Portfolio.
The Fund has received an Order from the Commission, which permits each of
its Portfolios to invest the greater of 5% of its total assets or $2.5 million
in the UAM Funds' DSI Money Market Portfolio for cash management purposes pro-
vided that the investment is consistent with the Portfolio's investment poli-
cies and restrictions. Based upon the Portfolio's assets invested in the DSI
Money Market Portfolio, the investing Portfolio's adviser will waive its in-
vestment advisory fee and any other fees earned as a result of the Portfolio's
investment in the DSI Money Market Portfolio. The investing Portfolio will
bear expenses of the DSI Money Market Portfolio on the same basis as all of
its other shareholders.
PORTFOLIO TURNOVER
This Portfolio is managed for long-term appreciation, rather than short-term
trading profits. As a result, the Adviser seeks to keep portfolio turnover be-
low 60%. (A turnover rate of 100% would mean that all securities in the Port-
folio would be replaced within a one-year period.) However, portfolio turnover
depends to a great degree on market conditions. Occasionally, when the market
shifts suddenly or when the prospects for individual stocks change quickly,
the Adviser may find it necessary to sell securities which have not been in
the Portfolio for very long. The Portfolio will not normally engage in short-
term trading, but it reserves the right to do so. The table set forth in "Fi-
nancial Highlights" presents the Portfolio's historical portfolio turnover
rates.
INVESTMENT LIMITATIONS
To help reduce the Portfolio's exposure to risk in specific situations, it
has adopted certain limitations associated with its investments and investment
practices. These policies and limitations are considered at the time of pur-
chase. The sale of instruments is not required in the event of a subsequent
change in circumstances.
The Portfolio's limitations are as follows:
(a) With respect to 75% of its assets, the Portfolio may not own more than
5% of the securities of any single issuer (other than investments is-
sued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities);
9
<PAGE>
(b) With respect to 75% of its assets, the Portfolio may not own more than
10% of the outstanding voting securities of any one issuer;
(c) The Portfolio may not invest more than 5% of its assets in securities
of issuers (other than securities issued or guaranteed by the U.S. or
foreign governments or their political subdivisions) that have (with
predecessors) less than 3 years of continuous operation;
(d) The Portfolio may not invest more than 25% of its assets in companies
within a single industry; however, there are no limitations on invest-
ments made in instruments issued or guaranteed by the U.S. Government
and its agencies;
(e) The Portfolio may not make loans except by purchasing debt securities
in accordance with its investment objective and policies or entering
into repurchase agreements or by lending its portfolio securities to
banks, brokers, dealers or other financial institutions as long as the
loans are made in compliance with the 1940 Act and the rules, regula-
tions and interpretations of the Commission;
(f) The Portfolio may not borrow except from banks in extraordinary cir-
cumstances for temporary or emergency purposes. In this situation, the
Portfolio may not (1) borrow more than 33 1/3% of its total assets and
(2) cannot buy additional securities if it borrows more than 5% of its
total assets; and
(g) The Portfolio may not pledge, mortgage or hypothecate more than 33
1/3% of its total assets at fair market value.
The Portfolio's investment objective and investment limitations (a), (b),
(d), (e) and (f.1) listed above are fundamental policies and may be changed
only with the approval of the holders of a majority of the outstanding voting
securities of the Portfolio. The other investment limitations described here,
those not specified as fundamental in the Statement of Additional Information,
and the Portfolio's investment policies are not fundamental, and the Fund's
Board of Trustees may change them without shareholder approval.
PORTFOLIO TRANSACTIONS
The Portfolio's Investment Advisory Agreement authorizes the Adviser to se-
lect the brokers or dealers that will execute the purchases and sales of in-
vestment securities for the Portfolio. The Agreement directs the Adviser to
use its best efforts to obtain the best available price and most favorable ex-
ecution for all the Portfolio's transactions.
It is not the Fund's practice to allocate brokerage or effect principal
transactions with dealers 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.
Some securities considered for investment by the Portfolio may also be ap-
propriate for other clients served by the Adviser. If a purchase or sale of
securities is 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 fair and reasonable manner. Although there is no
specified formula for allocating such transactions, the various allocation
methods used by the Adviser, and the result of such allocations, are subject
to periodic review by the Fund's Board of Trustees.
BUYING, SELLING AND EXCHANGING SHARES
Shares of the Portfolio are offered through UAM Fund Distributors, Inc. to
investors at net asset value without a sales commission. The required minimum
initial investment in the Portfolio is $2,000 with certain exceptions as may
be determined from time to time by the officers of the Fund. The initial in-
vestment minimum for IRA accounts is $500. The initial investment minimum for
spousal IRA accounts is $250. The minimum for any subsequent investment is
$100.
Shares of the Portfolio may be purchased by customers of broker-dealers or
other financial intermediaries ("Service Agents") which have established a
shareholder servicing relationship with the Fund on behalf of their customers.
Service Agents may impose additional or different conditions or other account
fees on the purchase and redemption of Portfolio shares by their customers.
Each Service Agent is responsible for transmitting to its customers a schedule
of any such fees and information regarding any additional or different condi-
tions regarding purchases and redemptions. Shareholders who are customers of
Service Agents should consult their Service Agent for information regarding
these fees and conditions. Amounts paid to Service Agents may include transac-
tions fees and/or service fees paid by the Fund from the Fund assets attribut-
able to the Service Agent, and would not be imposed if shares of the Portfolio
were
10
<PAGE>
purchased directly from the Fund or the Distributor. The Service Agents may
provide shareholder services to their customers that are not available to a
shareholder dealing directly with the Fund. A salesperson and any other person
entitled to receive compensation for selling or servicing Portfolio shares may
receive different compensation with respect to one particular class of shares
over another in the Fund.
Service Agents may enter confirmed purchase orders on behalf of their cus-
tomers. If you buy shares of the Portfolio in this manner, the Service Agent
must receive your investment order before the close of trading on the NYSE and
transmit it to the Fund's Sub-Transfer Agent (prior to the close of the Sub-
Transfer Agent's business day) and to the Distributor to receive the day's
share price. Proper payment for the order must be received by the Sub-Transfer
Agent no later than the time when the Portfolio is priced on the following
business day. Service Agents are responsible to their customers, the Fund and
its Distributor for timely transmission of all subscription and redemption re-
quests, investment information, documentation and money.
HOW TO BUY SHARES BY MAIL
If you have not invested in this Portfolio before, you will have to fill out
an Account Registration Form, which can be obtained by calling the Fund at 1-
800-638-7983. Once you have filled out the information on the form, separate
the two copies and sign both. We require an original signature on both forms.
Mail one copy, along with a check payable to UAM Funds Trust, to:
UAM Funds Trust
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
Mail the other copy, without the check, to:
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
To make additional investments to an account you have already established,
simply mail your check to the UAM Funds Service Center at the address above.
Make sure that your account number, account name, and the name of the Portfo-
lio are clearly indicated on the check so that we can properly credit your ac-
count.
For both initial and additional investments, your funds will be credited to
your account at the next share price calculated for the Portfolio after re-
ceipt. Investments received by 4:00 p.m. Eastern Time will be invested at the
share price calculated after the market closes on the same day. (For example,
if your check arrives on Tuesday morning, you will purchase shares at the
price calculated after the market closes on Tuesday.)
HOW TO BUY SHARES BY WIRE
To make an initial investment by wire, you must first telephone the Fund at
1-800-638-7983. A representative will then ask you to provide the account num-
ber from which you plan to wire the funds, the bank or financial institution,
its address, phone number and your social security or taxpayer identification
number. You will then tell the representative which Portfolio you wish to in-
vest in and how much you want to invest. The representative will then provide
you with an account number and a wire control number. Please write it down and
keep it for your records.
Once you have an account number, call your bank and instruct them to wire a
specified amount to the Fund's custodian, The Chase Manhattan Bank ("Custodian
Bank"). You will be asked to provide the following information:
The Chase Manhattan Bank
ABA #021000021
UAM Funds
Credit DDA #9102772952
(Your Account Registration)
(Your Account Number)
(Wire Control Number)
After you have instructed the bank to wire the money, you must forward a
completed Account Registration Form to the UAM Funds Service Center as soon as
possible. You can obtain forms by calling the UAM Funds Service Center at
1-800-638-7983. Federal Funds purchases will be accepted only on days when the
NYSE and the Custodian Bank are open for business.
Once you have made the initial purchase, you may buy additional shares by
wire at any time by following the instructions above. On all wired purchases,
funds will be invested at the share price calculated after the next market
close.
11
<PAGE>
IN-KIND PURCHASES
Under certain circumstances, investors who own securities may be able to ex-
change them directly for shares of the Portfolio without converting their in-
vestments into cash first. The Portfolio will accept such in-kind purchases
only if the securities offered for exchange meet the Portfolio's investment
criteria which are set forth in the "Details on Investment Policies" section
of this Prospectus. Once accepted, the shares will be valued according to the
process described in "How Share Prices are Determined" at the same time the
Portfolio's shares are valued. Once a value has been determined for both, an
exchange will be made. All dividends, interest, subscription, or other rights
pertaining to these securities become the Fund's property; if you receive any
such items, you must deliver them to the Fund immediately. Securities acquired
through an in-kind purchase will be acquired for investment and not for imme-
diate resale.
The Fund will not accept securities for exchange unless they meet the fol-
lowing criteria:
. The securities are eligible to be included in the Portfolio and market
quotes can readily be obtained for them, e.g., as evidenced by a listing
on the American Stock Exchange, the NYSE, the NASDAQ, a foreign exchange
or bonds rated Aaa, Aa, A or Baa by Moody's or AAA, AA, A or BBB by S&P.
. The investor assures the Fund that the securities are not subject to any
restrictions under the Securities Act of 1933 or any other law or regu-
lation.
. The value of the securities exchanged does not increase the Portfolio's
position in any specific issuer's security to more than 5% of the Port-
folio's net assets.
For tax purposes, the IRS generally treats any exchange of securities for
Portfolio shares as a sale of the securities. This means that if you exchange
securities which have appreciated in value since you bought them, you will re-
alize capital gains and incur a tax liability. If you are interested in such
an exchange, we suggest you discuss any potential tax liability with your tax
adviser before proceeding.
HOW TO SELL SHARES
You may sell shares by telephone or mail at any time, free of charge. Your
shares will be valued at the next price calculated after we receive your in-
structions to sell.
BY MAIL
To redeem by mail, include:
. your share certificates, if we have issued them to you;
. a letter which tells us how many shares you wish to redeem or, alterna-
tively, what dollar amount you wish to receive;
. a signature guaranteed by your bank, broker or other financial institu-
tion (see "Signature Guarantees" below); and
. any other necessary legal documents, in the case of estates, trusts,
guardianships, custodianships, corporations, pension and profit-sharing
plans and other organizations.
If you are not sure which documents to send, please contact the UAM Funds
Service Center at 1-800-638-7983.
BY TELEPHONE
To redeem shares by telephone, you must have completed an Account Registra-
tion Form and have returned it to the Fund. Once this form is on file, simply
call the Fund and request the redemption amount to be mailed to you or wired
to your bank. The Fund and the Fund's Transfer Agent will employ reasonable
precautions to make sure that the instructions communicated by telephone are
genuine, and they may be liable for any losses if they fail to do so. You will
be asked to provide certain personal identification when you open an account,
and again, when you request a telephone redemption. In addition, all telephone
transaction requests will be recorded and investors may be required to provide
additional telecopied written instructions of such transaction requests. Nei-
ther the Fund nor the Transfer Agent will be responsible for any loss, addi-
tional cost or expense for following instructions received by telephone that
it reasonably believes are genuine. To change the name of the commercial bank
or the account designated to receive redemption proceeds, a written request
must be sent to the Fund at the address on the cover of this Prospectus. Re-
quests to change the bank or account must be signed by each shareholder and
each signature must be guaranteed. You cannot
12
<PAGE>
redeem shares by telephone if you hold stock certificates for these shares.
Please contact one of the Fund's representatives at 1-800-638-7983 for further
details.
SIGNATURE GUARANTEES
To protect your account, the Fund and the Fund's Transfer Agent from fraud,
signature guarantees are required for certain redemptions. Signature guaran-
tees are used to verify that the person who authorizes a redemption is, in
fact, the registered shareholder. They are required whenever you:
. redeem shares and request that the proceeds be sent to someone other
than the registered shareholder(s) or to an address which is not the
registered address; or
. transfer shares from one Portfolio to another.
Signatures must be guaranteed by an "eligible guarantor institution" as de-
fined in Rule 17Ad-15 under the Securities Exchange Act of 1934. (The UAM
Funds Service Center can provide you with a full definition of the term.) You
can obtain a signature guarantee at almost any bank, as well as through most
brokers, dealers, credit unions, national securities exchanges, registered se-
curities associations, clearing agencies and savings associations. 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 el-
igible guarantor institution which participates in a signature guarantee pro-
gram. A notary public can not provide a signature guarantee.
The signature guarantee must appear either:
. on the written request for redemption; or
. on a separate instrument for assignment (a "stock power") which should
specify the total number of shares to be redeemed; or
. on all stock certificates tendered for redemption, and, if shares held
by the Fund are also being redeemed, then on the letter or stock power.
FURTHER INFORMATION ON SELLING SHARES
Normally, the Fund will make payment for all shares sold under this proce-
dure within one business day after we receive a request. In no event will pay-
ment be made more than seven days after receipt of a redemption (sale) request
in good order. The Fund may suspend the right of redemption or postpone the
date at times when either the NYSE and Custodian Bank are closed, or under any
emergency circumstances as determined by the Commission.
If the Fund's Board of Trustees determines that it would be detrimental to
the best interests of the remaining shareholders of the Fund to make payments
wholly or partly in cash, the Fund may pay the redemption proceeds in whole or
in part by a distribution in-kind of liquid securities held by the Portfolio
instead of cash in conformity with applicable rules of the Commission. Invest-
ors may incur brokerage charges when they sell portfolio securities received
in payment of redemptions.
HOW TO EXCHANGE SHARES
You may exchange Institutional Class Shares of the Portfolio for any other
Institutional Class Shares of a Portfolio included in 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 this Prospectus.) When
you exchange shares, you sell your old shares and buy new ones, both at the
price calculated after the next market close. There is no sales charge for ex-
changes. Exchange requests may be made by phone or letter. Telephone exchanges
may be made only if the Fund holds all share certificates and if the registra-
tion of the two accounts is identical. Telephone exchanges received before
4:00 p.m. Eastern Time will be processed at the share price set after the mar-
ket closes on the same day. Exchanges received after 4:00 p.m. Eastern Time
will be executed at the share price determined at the market close on the fol-
lowing day. For additional information regarding responsibility for the au-
thenticity of telephoned transaction instructions, see "How to Sell Shares --
By Telephone" above. The Fund may also limit both the frequency and the
amount of exchanges permitted if it is in the interest of the Fund's share-
holders. The exchange privilege is only available with respect to Portfolios
that are registered for sale in a shareholder's state of residence.
Please review a Portfolio's investment objective before shifting money into
it. Make sure its objective and strategies fit with your long-term goals. Be-
fore exchanging into a Portfolio, read its Prospectus. You may obtain one for
the Portfolio(s) you are interested in by calling the UAM Funds Service Center
at 1-800-638-7983. Remember, every time you exchange shares of one Portfolio
for another, your transaction is counted as a sale of the first security and a
purchase of the second. As a result, you may incur a tax liability by exchang-
ing shares if your investment has appreciated since you bought it. Consult
your tax adviser to determine your liability for capital gains taxes.
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<PAGE>
HOW SHARE PRICES ARE DETERMINED
The value of each share of the Portfolio is calculated every day that the
NYSE is open. This means that shares are valued after the market close, gener-
ally at 4:00 p.m. Eastern Time on Monday through Friday, except for major hol-
idays when the NYSE is closed.
The value of each share is determined by adding up the total market value of
all the securities in the Portfolio plus cash and other assets, deducting lia-
bilities and then dividing by the total number of shares outstanding.
For stocks, we use the last quoted trading price as the market value. For
listed stocks, we use the price quoted by the exchange on which the stock is
primarily traded. Unlisted stocks and listed stocks which have not been traded
on the valuation date or for which market quotations are not readily available
are valued at a price between the last price asked and the last price bid. For
valuation purposes, quotations of foreign securities in a foreign currency are
converted to U.S. dollar equivalents based upon the bid price of such curren-
cies against U.S. dollars quoted by any major bank or by a broker.
The value of other assets and securities for which no quotations are readily
available (including restricted securities) is determined in good faith at
fair value using methods determined by the Fund's Board of Trustees.
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
DIVIDENDS
Stocks generate income in the form of dividends. The Portfolio will normally
distribute substantially all of its net investment income (for tax purposes)
to shareholders in the form of quarterly dividends. You must instruct the
Portfolio to pay out dividends and distributions in cash to you or to reinvest
them. The Account Registration Form has a box for your instructions. Unless
you specifically tell us to distribute dividend income in cash, however, we
will assume you want this income reinvested. By law, you must pay taxes on any
dividend income you receive on your investments whether distributed in cash or
reinvested in shares. The Portfolio will send you a statement annually telling
you exactly how much dividend income you have earned for tax purposes.
CAPITAL GAINS
Capital gains are another source of appreciation to the Portfolio. Basical-
ly, a gain is an increase in the value of a stock or bond. However, for tax
purposes, the Portfolio does not "realize" a capital gain unless it sells a
stock or bond which has appreciated.
You can incur capital gains in two ways. First, if the Portfolio buys a
stock or bond at one price, then sells it at a higher price, it will realize a
capital gain. At the end of the year, the capital gains computed under tax
rules that the Portfolio has made are added up and capital losses are sub-
tracted. If any net capital gains are realized, the Portfolio will normally
distribute such gains annually. You will receive a statement at the end of the
year informing you of your share of the Portfolio's capital gains.
The second way to incur capital gains is to sell or exchange your shares. If
you sell shares at a higher price than you bought them at, you will be respon-
sible for paying taxes on your gain. There are several ways to determine your
tax liability, and we suggest you contact a qualified tax adviser to help you
decide which is best for you.
TAXES
The Portfolio intends to qualify each year as a "regulated investment compa-
ny" under Federal tax law, and if it qualifies, the Portfolio will not be lia-
ble for Federal income taxes, because it will have distributed all its net in-
vestment income and net realized capital gains to shareholders. Shareholders
will then have to pay taxes on the dividends, and on gains whether they are
distributed as cash or are reinvested in shares. Dividends and short-term cap-
ital gains will be taxed as ordinary income. Long-term capital gains distribu-
tions are taxed as long-term capital gains. Such dividends and distributions
may be subject to state and local taxes. Redemptions of shares in the Portfo-
lio are taxable events for Federal income tax purposes. A shareholder may also
be subject to state and local taxes on such redemptions.
Dividends declared in October, November and December to shareholders of rec-
ord in such a month will be treated as if they had been paid by the Fund and
received by the shareholders on December 31 of the same calendar year, pro-
vided that the dividends are paid before February of the following year.
The Fund is required by Federal law to withhold 31% of reportable payments
(which may include dividends, capital gains distributions and redemptions)
paid to shareholders who have not complied with IRS regulations. In order to
avoid this withholding requirement, you must certify on the Account Registra-
tion Form or on a separate form supplied by the Fund that your Social Security
or Taxpayer Identification Number you have provided is correct and that you
are not currently subject to backup withholding or that you are exempt from
backup withholding.
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<PAGE>
Dividends and interest received by the Portfolio may give rise to withhold-
ing and other taxes imposed by foreign countries. These taxes reduce the Port-
folio's dividends but are included in the taxable income reported on your tax
statement if the Portfolio qualifies for this tax treatment and elects to pass
it through to you. You may be able to claim an offsetting tax credit or item-
ized deduction for foreign taxes paid by the Portfolio. Your tax statement
will generally show the amount of foreign tax for which a credit or deduction
may be available.
FUND MANAGEMENT AND ADMINISTRATION
THE INVESTMENT ADVISER
Chicago Asset Management Company (the "Adviser") is a registered investment
adviser formed in 1983. Its business offices are located at 70 West Madison
Street, 56th Floor, Chicago, IL 60602. The Adviser is a wholly-owned subsidi-
ary of United Asset Management Corporation ("UAM") and provides and offers in-
vestment management and advisory services to corporations, unions, pensions
and profit-sharing plans, trusts, estates and other institutions and invest-
ors. The Adviser currently has over $2 billion in assets under management.
The Portfolio pays an annual fee in monthly installments to the adviser for
advisory services. This fee is accrued daily and paid monthly as a percentage
of the average daily net assets in the Portfolio for that month. The percent-
age fee on an annual basis is 0.625%.
The Adviser may compensate its affiliated companies for referring investors
to the Portfolio. The Distributor, UAM, the Adviser, or any of their affili-
ates, may, at its own expense, compensate a Service Agent or other person for
marketing, shareholders servicing, record-keeping and/or other services per-
formed with respect to the Fund, a Portfolio or any Class of Shares of a Port-
folio. The person making such payments may do so out of its revenues, its
profits or any other source available to it. Such services arrangements, when
in effect, are made generally available to all qualified service providers.
The Distributor, the Adviser and certain of their affiliates also partici-
pate, at the date of this Prospectus, in an arrangement with Smith Barney Inc.
under which Smith Barney provides certain defined contribution plan marketing
and other shareholder services and receives from such entitites .15 of 1% of
the daily net asset value of Institutional Class Shares held by Smith Barney's
eligible customer accounts in addition to amounts payable to all selling deal-
ers. The Fund also compensates Smith Barney for services it provides to cer-
tain defined contribution plan shareholders that are not otherwise provided by
the Administrator.
The investment professionals at the Adviser responsible for the day-to-day
management of the Portfolio and their qualifications are as follows:
<TABLE>
<S> <C>
Jon F. Holsteen, President, CEO and Chief Investment Officer
Education: Lake Forest College, BA
Experience: Founded Chicago Asset Management Company in 1983.
Kevin J. McGrath, Senior Vice President and Senior Portfolio Manager--Equities
Education: Regis College, BA
St. Thomas College, MBA
Experience: Joined Chicago Asset Management Company in 1991.
Vice President, Smith Barney, Harris Upham, Inc. 1985-1991.
</TABLE>
THE ADMINISTRATOR
Pursuant to a Fund Administration Agreement dated April 15, 1996, UAM Fund
Services, Inc. ("UAMFSI") a wholly-owned subsidiary of United Asset Management
Corporation with its principal office located at 211 Congress Street, Boston,
MA 02110, is responsible for performing and overseeing administration, fund
accounting, dividend disbursing and transfer agency services provided to the
Fund and its Portfolios. UAMFSI has subcontracted the performance of certain
of such services to Chase Global Funds Services Company ("CGFSC"), an affili-
ate of The Chase Manhattan Bank, pursuant to a Mutual Funds Service Agreement
dated April 15, 1996. CGFSC is located at 73 Tremont Street, Boston, MA 02108-
3913. Effective April 1, 1996, The Chase Manhattan Corporation, the parent of
The Chase Manhattan Bank merged with and into Chemical Banking Corporation,
the parent company of Chemical Bank. Chemical Banking Corporation is the sur-
viving corporation and will continue its existence under the name "The Chase
Manhattan Corporation".
Each Portfolio pays to UAMFSI a monthly fee comprised of two parts: a Port-
folio-specific fee which is retained by UAMFSI and a sub-administration fee
which UAMFSI in turn pays to CGFSC. The Portfolio-specific fee for the Chicago
Asset Management Value/Contrarian Portfolio is 0.06% of aggregate net assets.
The sub-administration fee calculated on an annualized basis equals: 0.19 of
1% of the first $200 million of total net assets of the Funds; 0.11 of
15
<PAGE>
1% of the next $800 million of net assets of the Funds; 0.07 of 1% of total
net assets in excess of $1 billion but less than $3 billion; and 0.05 of 1% of
total net assets in excess of $3 billion. The sub-administration fees are al-
located among the Portfolios on the basis of their relative assets and are
subject to a graduated minimum fee schedule per Portfolio of $2,000 per month
upon inception of a Portfolio to $70,000 annually after two years. If a sepa-
rate class of shares is added to a Portfolio, the minimum annual fee payable
by that Portfolio may be increased by up to $20,000.
THE DISTRIBUTOR
UAM Fund Distributors, Inc., a wholly-owned subsidiary of UAM with its prin-
cipal office located at 211 Congress Street, Boston, Massachusetts 02110, dis-
tributes the shares of the Fund. Under the Fund's Distribution Agreement (the
"Distribution Agreement"), the Distributor, as agent of the Fund, agrees to
use its best efforts as sole distributor of the Fund's shares. The Distributor
does not receive any fee or other compensation under the Distribution Agree-
ment with respect to this Portfolio. The Distribution Agreement continues in
effect as long as the Fund's Board of Trustees, including a majority of the
Trustees who are not parties to the Distribution Agreement or interested per-
sons of any such party, approve it on an annual basis. The Distribution Agree-
ment provides that the Fund will bear the costs of the registration of its
shares with the Commission and various states and the printing of its prospec-
tuses, statements of additional information and reports to shareholders.
CUSTODIAN
The Chase Manhattan Bank serves as custodian of the Fund's assets.
ACCOUNTANTS
Price Waterhouse LLP acts as the independent accountants for the Fund and
audits its financial statements annually.
SUB-ADMINISTRATOR, SUB-TRANSFER AND SUB-DIVIDEND DISBURSING AGENT
Chase Global Funds Services Company, 73 Tremont Street, Boston, MA 02108,
acts as sub-administrator, sub-transfer agent and sub-dividend disbursing
agent for the Fund.
REPORTS
Investors will receive unaudited semi-annual financial statements and annual
financial statements audited by Price Waterhouse LLP.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be made by writing to the Fund at the address
listed on the cover of this Prospectus or by calling 1-800-638-7983.
LITIGATION
The Fund is not involved in any litigation.
GENERAL FUND INFORMATION
The Portfolio is one of a series of investment portfolios available through
UAM Funds Trust, an open-end investment company known as a "mutual fund." Each
of the Portfolios which make up the Fund have different investment objectives
and policies. Together, the Portfolios offer a diverse set of risk and return
characteristics to suit a wide range of investor needs. The Fund was organized
under the name "The Regis Fund II" on May 18, 1994 as a Delaware business
trust. On October 31, 1995, the name was changed to "UAM Funds Trust."
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Officers of the Fund manage its day-to-day operations and are responsi-
ble to the Fund's Board of Trustees. The Trustees set broad policies for the
Fund and elect its Officers.
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 sharehold-
ers.
The shares of each Portfolio and class have noncumulative voting rights,
which means that the holders of more than 50% of the shares voting for the
election of Trustees can elect 100% of the Trustees if they choose to do so. A
shareholder is entitled to one vote for each full share held (and a fractional
vote for each fractional share held), then standing in his or her name on the
books of the Fund. Both Institutional Class and Institutional Service Class
Shares represent an interest in the same assets of a Portfolio and are identi-
cal in all respects except that the Institutional Service Class Shares bear
certain expenses related to shareholder servicing, may bear expenses related
to the distribu
16
<PAGE>
tion of such shares and have exclusive voting rights with respect to matters
relating to such distribution expenditures. Information about the Service
Class Shares of the Portfolios along with the fees and expenses associated
with such shares is available upon request by contacting the Fund at 1-800-
638-7983. The Fund will not ordinarily hold shareholder meetings except as re-
quired by the 1940 Act and other applicable laws. The Fund has undertaken that
its Trustees will call a meeting of shareholders if such a meeting is re-
quested in writing by the holders of not less than 10% of the outstanding
shares of the Fund. To the extent required by the undertaking, the Fund will
assist shareholder communications in such matters.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR IN THE PORTFOLIO'S
STATEMENT OF ADDITIONAL INFORMATION, IN CONNECTION WITH THE OFFERING MADE BY
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR ITS REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFERING BY THE FUND IN ANY JURISDICTION IN WHICH SUCH
OFFERING MAY NOT BE LAWFULLY MADE.
17
<PAGE>
UAM FUNDS -- INSTITUTIONAL CLASS SHARES
ACADIAN ASSET MANAGEMENT, INC.
Acadian Emerging Markets Portfolio
Acadian International Equity Portfolio
BARROW, HANLEY, MEWHINNEY & STRAUSS, INC.
BHM&S Total Return Bond Portfolio
CHICAGO ASSET MANAGEMENT COMPANY
Chicago Asset Management Value/Contrarian Portfolio
Chicago Asset Management Intermediate Bond Portfolio
COOKE & BIELER, INC.
C&B Balanced Portfolio
C&B Equity Portfolio
C.S. MCKEE & COMPANY, INC.
McKee U.S. Government Portfolio
McKee Domestic Equity Portfolio
McKee International Equity Portfolio
DEWEY SQUARE INVESTORS CORPORATION
DSI Disciplined Value Portfolio
DSI Limited Maturity Bond Portfolio
DSI Money Market Portfolio
FIDUCIARY MANAGEMENT ASSOCIATES, INC.
FMA Small Company Portfolio
INVESTMENT COUNSELORS OF MARYLAND, INC.
ICM Equity Portfolio
ICM Fixed Income Portfolio
ICM Small Company Portfolio
INVESTMENT RESEARCH COMPANY
IRC Enhanced Index Portfolio
MURRAY JOHNSTONE INTERNATIONAL LTD.
MJI International Equity Portfolio
NEWBOLD'S ASSET MANAGEMENT, INC.
Newbold's Equity Portfolio
NWQ INVESTMENT MANAGEMENT COMPANY
NWQ Balanced Portfolio
NWQ Value Equity Portfolio
RICE, HALL, JAMES & ASSOCIATES
Rice, Hall, James Small Cap Portfolio
SIRACH CAPITAL MANAGEMENT, INC.
Sirach Equity Portfolio
Sirach Fixed Income Portfolio
Sirach Growth Portfolio
Sirach Short-Term Reserves Portfolio
Sirach Special Equity Portfolio
Sirach Strategic Balanced Portfolio
SPECTRUM ASSET MANAGEMENT, INC.
SAMI Preferred Stock Income Portfolio
Enhanced Monthly Income Portfolio
18
<PAGE>
STERLING CAPITAL MANAGEMENT COMPANY
Sterling Partners' Balanced Portfolio
Sterling Partners' Equity Portfolio
Sterling Partners' Short-Term Fixed Income Portfolio
THOMPSON, SIEGEL & WALMSLEY, INC.
TS&W Equity Portfolio
TS&W Fixed Income Portfolio
TS&W International Equity Portfolio
19
<PAGE>
UAM FUNDS
UAM FUNDS SERVICE CENTER
C/O CHASE GLOBAL FUNDS SERVICES COMPANY
P.O. BOX 2798
BOSTON, MASSACHUSETTS 02208-2798
1-800-638-7983
- -------------------------------------------------------------------------------
HANSON EQUITY PORTFOLIO
INSTITUTIONAL CLASS SHARES
INVESTMENT ADVISER: HANSON INVESTMENT MANAGEMENT COMPANY
- -------------------------------------------------------------------------------
PROSPECTUS -- AUGUST 28, 1996
Hanson Equity Portfolio is one of a series of investment portfolios avail-
able through UAM Funds Trust (hereinafter defined as "UAM Funds or the
"Fund"), an open-end investment company known as a "mutual fund." Each of the
Portfolios that make up the Fund have different investment objectives and pol-
icies. In addition, several of the Fund's Portfolios offer two separate clas-
ses of shares: Institutional Class Shares and Institutional Service Class
Shares. Hanson Equity Portfolio currently offers only one class of shares. The
securities offered in this Prospectus are Institutional Class Shares of one
diversified, no-load Portfolio of the Fund managed by Hanson Investment Man-
agement Company.
The Hanson Equity Portfolio seeks to achieve maximum long-term total return,
consistent with reasonable risk to principal, by investing in a diversified
portfolio of equity securities, primarily the common stock of large, U.S.-
based companies with outstanding financial characteristics and strong growth
prospects that can be purchased at reasonable valuations. There can be no as-
surance that the Portfolio will achieve its stated objective.
Please keep this Prospectus for future reference since it contains informa-
tion that you should understand before you invest. You may also wish to review
the Hanson Equity Portfolio's "Statement of Additional Information" dated Au-
gust 28, 1996 which was filed with the Securities and Exchange Commission and
has been incorporated by reference into this Prospectus. (It is legally con-
sidered to be a part of this Prospectus). Please call or write the Fund at the
above address to obtain a free copy of this Statement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR A STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Fees and Expenses.......................................................... 1
Summary: About the Portfolio............................................... 2
Risk Factors............................................................... 2
Performance Calculations................................................... 3
Details on Investment Policies............................................. 3
Investment Limitations..................................................... 6
Buying, Selling and Exchanging Shares...................................... 7
How Share Prices are Determined............................................ 10
Dividends, Capital Gains Distributions and Taxes........................... 10
Fund Management and Administration......................................... 11
General Fund Information................................................... 13
UAM Funds -- Institutional Class Shares.................................... 14
</TABLE>
<PAGE>
FEES AND EXPENSES
Investors will be charged various fees and expenses incurred in managing the
Hanson Equity Portfolio (the "Portfolio") including:
SHAREHOLDER TRANSACTION EXPENSES: These are the costs entailed in buying,
selling or exchanging shares of the Portfolio. The Portfolio does not charge
investors for shareholder transaction expenses. However, transaction fees may
be charged if you are a customer of a broker-dealer or other financial inter-
mediary who has established a shareholder servicing relationship with the Fund
on behalf of their customers. Please see "Buying, Selling and Exchanging
Shares" for further information.
<TABLE>
<S> <C>
Sales Load Imposed on Purchases:..................................... NONE
Sales Load Imposed on Reinvested Dividends:.......................... NONE
Deferred Sales Load:................................................. NONE
Redemption Fees:..................................................... NONE
Exchange Fees:....................................................... NONE
</TABLE>
ANNUAL FUND OPERATING EXPENSES: These expenses, which cover the cost of ad-
ministration, marketing and shareholder communication, and are usually quoted
as a percentage of net assets, are factored into the Portfolio's share price
and not billed directly to shareholders. They include:
<TABLE>
<S> <C>
Investment Advisory Fees:........................................... 0.70%
Administrative Fees:................................................ 0.24%
12b 1 Fees:......................................................... NONE
Other Expenses:..................................................... 0.38%
----
Total Operating Expenses............................................ 1.32%
====
</TABLE>
The fees and expenses set forth above are estimated amounts for its first
year of operations assuming average daily net assets of $20 million.
Until further notice, Hanson Investment Management Company has voluntarily
agreed to waive its advisory fee and to assume as the Adviser's own expense
certain operating expenses payable by the Portfolio, if necessary, in order to
keep the Portfolio's total annual operating expenses (excluding interest,
taxes and extraordinary expenses) from exceeding 2.50% of average daily net
assets. The Portfolio will not reimburse the Adviser for any advisory fees
which are waived or Portfolio expenses which the Adviser may bear on behalf of
the Portfolio.
The purpose of the above table is to assist the investor in understanding
the various expenses that an investor in the Hanson Equity Portfolio's Insti-
tutional Class Shares will bear directly or indirectly.
Investors can get a better idea of how the Portfolio's operating expenses
will affect their own investments by examining the following chart. The chart
shows how much a hypothetical investor would pay in expenses, assuming that he
or she made an initial investment of $1,000, earned a 5% annual rate of return
and redeemed his or her investment at the end of the time period indicated.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
------ -------
<S> <C> <C>
Expenses:..................................................... $13 $42
</TABLE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EX-
PENSES OR PERFORMANCE. ACTUAL EXPENSE MAY BE GREATER OR LESSER THAN THOSE
SHOWN ABOVE.
1
<PAGE>
SUMMARY: ABOUT THE PORTFOLIO . . .
OBJECTIVE:
The Hanson Equity Portfolio seeks to achieve maximum long-term total return,
consistent with reasonable risk to principal, by investing in a diversified
portfolio of equity securities, primarily the common stock of large, U.S.-
based companies with outstanding financial characteristics and strong growth
prospects that can be purchased at reasonable valuations. There can be no as-
surance that the Portfolio will achieve its stated objective.
HOW IS THE PORTFOLIO MANAGED?
Hanson Investment Management Company (the "Adviser") believes that superior
long-term results can be achieved by investing in a select number of well-man-
aged companies that have clear business plans, specific financial goals,
above-average earnings and dividend growth rates, and whose shares can be pur-
chased at reasonable valuations.
WHO MANAGES THE PORTFOLIO?
The Adviser is a registered investment adviser. Founded in 1973, the firm
currently has over $1.1 billion in assets under management. The firm is a
wholly-owned subsidiary of United Asset Management Corporation. (See "Fund
Management and Administration.")
WHO SHOULD INVEST IN THE PORTFOLIO?
The Portfolio is suitable for investors who seek maximum long-term total re-
turn in their investments and who are comfortable with aggressively seeking
long-term returns.
HOW TO INVEST
The Fund offers shares of the Portfolio through UAM Fund Distributors, Inc.,
to investors without a sales commission at net asset value next determined af-
ter the purchase order is received in proper form. Share purchases may be made
by sending investments directly to the Fund. The minimum initial investment in
the Portfolio is [$2,500] with certain exceptions as may be determined from
time to time by the officers of the Fund. The initial investment minimum for
IRA accounts is $500. The initial investment minimum for spousal IRA accounts
if $250. The minimum for any subsequent investment is $100.
DIVIDENDS AND DISTRIBUTIONS
The Portfolio will normally distribute substantially all of its net invest-
ment income in the form of quarterly dividends. Any realized net capital gains
will also be distributed annually. Distributions will be reinvested in the
Portfolio's shares automatically unless an investor elects to receive cash
distributions. (See "Dividends, Capital Gains Distributions and Taxes.")
HOW TO REDEEM
Shares of the Portfolio may be redeemed on any business day when the New
York Stock Exchange ("NYSE") is open, without cost, at the net asset value of
the Portfolio next determined after receipt of the redemption request. The
Portfolio's share price will fluctuate with market and economic conditions.
Therefore, your investment may be worth more or less when redeemed than pur-
chased. (See "Buying, Selling and Exchanging Shares.")
ADMINISTRATIVE SERVICES
UAM Fund Services, Inc. (the "Administrator"), a wholly-owned subsidiary of
United Asset Management Corporation ("UAM"), is responsible for performing and
overseeing administration, fund accounting, dividend disbursing and transfer
agency services provided to the Fund and its Portfolios by third-party service
providers. (See "Fund Management and Administration.")
RISK FACTORS
Investing in the Portfolio entails a number of risks as with any stock in-
vestment. Like any stock investment, shares of the Portfolio will rise and
fall in value depending on market perceptions of the value of the underlying
stocks. Share prices may also be affected by overall market movements and by
changes in sector or industry performance.
In addition, you should consider the following factors that could effect the
Portfolio's rate of return:
. The Portfolio may invest in repurchase agreements which entail a risk of
loss should the seller default on its transaction.
. The Portfolio may lend its investment securities.
. The Portfolio's performance may depend on the ability of the Adviser who
has substantial experience as an investment adviser but limited experi-
ence as an adviser to a mutual fund.
Further information about these risk factors is contained in the "Details on
Investment Policies" section of this Prospectus.
2
<PAGE>
PERFORMANCE CALCULATIONS
The Portfolio measures performance by calculating total return. Total return
figures are based on historical earnings and are not intended to indicate fu-
ture performance.
Total return is the change in value of an investment in the Portfolio over a
given period, assuming reinvestment of any dividends and capital gains. A cu-
mulative or aggregate total return reflects actual performance over a stated
period of time. An average annual total return is a hypothetical rate of re-
turn that, if achieved annually, would have produced the same cumulative total
return if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same as
actual year-by-year results.
The Portfolio's performance may be compared to data prepared by independent
services which monitor the performance of investment companies, data reported
in financial and industry publications, and various indices as further de-
scribed in the Portfolio's Statement of Additional Information.
Since this is a new Portfolio, we can offer no information about past port-
folio investment performance. When this information becomes available, you
will find it, together with comparisons to appropriate indices, in the Portfo-
lio's Annual Report to Shareholders, which may be obtained without charge.
Write to UAM Funds Trust at the address on the front cover of this Prospec-
tus or call 1-800-638-7983 to obtain your free copy of the Portfolio's Annual
Report to Shareholders.
DETAILS ON INVESTMENT POLICIES
INVESTMENT STRATEGY
In seeking its investment objective, the Portfolio will, under normal cir-
cumstances, invest at least 80% of its total assets in equity securities, pri-
marily the common stock of large capitalization, U.S.-based companies. Large
capitalization companies are defined as those companies with market capital-
izations greater than $1 billion at the time of purchase. Equity securities
include common stock, preferred stock, rights and warrants. The Portfolio may
also invest in short-term investments, convertible preferred stock and con-
vertible bonds.
Under unusual circumstances, when the Adviser believes that market condi-
tions warrant a defensive position, up to 100% of the Portfolio's assets may
be held in cash and short-term investments. See "Short-Term Investments" and
"Repurchase Agreements" below for a description of the types of short-term in-
struments in which the Portfolio may invest. When the Portfolio is in a defen-
sive position, it may not necessarily be pursuing its stated investment objec-
tive.
The basis of the Adviser's investment philosophy is to "buy the company, not
the stock." The Adviser believes that superior long-term results can be
achieved by investing in a select number of well-managed companies that have
clear business plans, specific financial goals, above-average earnings and
dividend growth rates, and whose shares can be purchased at reasonable valua-
tions. The Adviser's stock selection process is a bottom-up approach which
means that it will construct the Portfolio by focusing on individual stocks
rather than industry groups or sectors. (Top-down investors would first decide
which industries or sectors they want to emphasize and then would look for
stocks that fit those requirements.) In determining a suitable equity invest-
ment, the Adviser evaluates a prospective company using the following process:
1. The Adviser asks three questions:
a. Does the Adviser understand the company's business?
b. Is the company's management shareholder-conscious?
c. Is the company's long-term outlook favorable?
2. The Adviser subjects the company to a screen designed to select companies
with the following characteristics:
-- reasonable price-to-earnings ratio
-- above-average total return potential
-- leader in its industry
-- highly profitable
-- financially strong
3. Finally, the potential investment is put through an intensive review by
the Investment Committee before it is added to the Portfolio.
3
<PAGE>
The Adviser sells equity investments when: (a) the company fails to meet the
Adviser's investment criteria; (b) a more attractive investment is found; or
(c) the company's share price rises to a level that cannot be justified.
OTHER INVESTMENT POLICIES
Under normal circumstances, the Portfolio may invest up to 20% of its as-
sets, unless restricted by additional limitations described below or in the
Portfolio's Statement of Additional Information, in the following securities
or investment techniques:
AMERICAN DEPOSITARY RECEIPTS
The Portfolio intends to invest primarily in U.S.-based companies. In addi-
tion, the Portfolio may purchase shares of foreign based companies in the form
of American Depositary Receipts (ADRs). ADRs may be sponsored or unsponsored.
Sponsored ADRs are established jointly by a depositary and the underlying is-
suer, whereas unsponsored ADR's may be established without participation by
the underlying issuer. Holders of an unsponsored ADR generally bear all the
costs associated with establishing the unsponsored ADR. The depositary of an
unsponsored ADR is under no obligation to distribute shareholder communica-
tions received from the underlying issuer or to pass through to the holders of
the unsponsored ADR voting rights with respect to the deposited securities or
pool of securities. (See "Foreign Securities" in the Statement of Additional
Information for a description of the risks involved.)
SHORT-TERM INVESTMENTS
In order to earn a return on uninvested assets, meet anticipated redemp-
tions, or for temporary defensive purposes, the Portfolio may invest a portion
of its assets in domestic and foreign money market instruments including cer-
tificates of deposit, bankers acceptances, time deposits, U.S. government ob-
ligations, U.S. government agency securities, short-term corporate debt secu-
rities, and commercial paper rated A-1 or A-2 by Standard & Poor's Corporation
or Prime-1 or Prime-2 by Moody's Investors Service, Inc. or, if unrated, de-
termined by the Adviser to be of comparable quality.
The Fund has received an Order from the Securities and Exchange Commission
(the "Commission") for permission to deposit the daily uninvested cash bal-
ances of the Fund's Portfolios, as well as cash for investment purposes, into
one or more joint accounts and to invest the daily balance of the joint ac-
counts in the following short-term investments: fully collateralized repur-
chase agreements, interest-bearing or discounted commercial paper including
dollar-denominated commercial paper of foreign issuers, and any other short-
term money market instruments including variable rate demand notes and tax-ex-
empt money instruments. By entering into these investments on a joint basis,
it is expected that a Portfolio may earn a higher rate of return on invest-
ments relative to what it could earn individually.
The Fund has received an Order from the Commission, which permits each of
its Portfolios to invest the greater of 5% of its total assets or $2.5 million
in the UAM Funds' DSI Money Market Portfolio for cash management purposes.
(See "Investment Companies.")
REPURCHASE AGREEMENTS
In a repurchase agreement, the Portfolio purchases a security and, at the
same time, arranges to sell it back to the original seller on a predetermined
date. The repurchase agreement states the price that the seller will pay for
the security plus the interest rate that the purchaser will receive while
holding it. In effect, the Portfolio is lending its funds to the seller at an
agreed upon interest rate and receiving a security as collateral for the loan.
Repurchase agreements can range from overnight to a fixed term. They are a
common way to earn interest on short-term funds.
The seller under a repurchase agreement will be required to maintain the
value of the securities subject to the agreement at not less than (1) the re-
purchase price if such securities mature in one year or less, or (2) 101% of
the repurchase price if such securities mature in more than one year. The Ad-
ministrator and the Adviser will mark to market daily the value of the securi-
ties purchased and the Adviser will if necessary require the seller to main-
tain additional securities to ensure that the value is in compliance with pre-
vious sentence.
There are some risks involved in repurchase agreements. If the seller de-
faults on its agreement to buy back the securities and the value of those se-
curities falls, the Portfolio may incur losses in selling these securities on
the open market. Also, if the seller enters bankruptcy, the bankruptcy court
may decide that the securities are collateral not within the control of the
Portfolio and therefore are subject to sale by the trustee in the bankruptcy.
Finally, it is possible that the Portfolio may not be able to prove its owner-
ship of the underlying securities.
The Adviser believes that these risks can be controlled by carefully review-
ing the securities involved in a repurchase agreement as well as the credit
rating of the other party in the transaction. The Portfolio may invest in re-
purchase agreements collateralized by U.S. government securities, certificates
of deposit, bankers acceptances and other short-term securities as outlined
above under "Short-Term Investments".
4
<PAGE>
The Fund has received an Order from the Commission for permission to pool
the daily uninvested cash balances of the Fund's Portfolios in order to invest
in repurchase agreements on a joint basis. By entering into repurchase agree-
ments on a joint basis, it is expected that a Portfolio will incur lower
transactions costs and potentially obtain higher rates of interest on such re-
purchase agreements. Each Portfolio's participation in the income from jointly
purchased repurchase agreements will be based on that Portfolio's percentage
share in the total repurchase agreement.
RESTRICTED AND ILLIQUID SECURITIES
The Portfolio may purchase restricted securities that are not registered for
sale to the general public but which are eligible for resale to qualified in-
stitutional investors under Rule 144A of the Securities Act of 1933. Under the
supervision of the Fund's Board of Trustees, the Adviser determines the li-
quidity of such investments by considering all relevant factors. Provided that
a dealer or institutional trading market in such securities exists, these re-
stricted securities are not treated as illiquid securities for purposes of the
Portfolio's investment limitations. The Portfolio may also invest up to 15% of
its net assets in securities that are illiquid by virtue of the absence of a
readily available market or because of legal or contractual restrictions on
resale. The prices realized from the sales of these securities could be less
than those originally paid by the Portfolio or less than what may be consid-
ered the fair value of such securities.
LENDING OF PORTFOLIO SECURITIES
The Portfolio may lend its investment securities to qualified institutional
investors who need to borrow securities in order to complete certain transac-
tions, such as covering short sales, avoiding failures to deliver securities
or completing arbitrage operations. The Portfolio will not loan portfolio se-
curities to the extent that greater than one-third of its assets at fair mar-
ket value, would be committed to loans. 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 bro-
kers, 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 1940 Act or the Rules and Regulations or interpreta-
tions of the Commission thereunder, which currently require that (a) the bor-
rower pledge and maintain with the Portfolio collateral consisting of cash, an
irrevocable letter of credit issued by a domestic U.S. bank or securities is-
sued 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 re-
ceives reasonable interest on the loan (which may include the Portfolio in-
vesting any cash collateral in interest bearing short-term investments). As
with other extensions of credit, there are risks of delay in recovery or even
loss of rights in the securities loaned if the borrower of the securities
fails financially. These risks are similar to the ones involved with repur-
chase agreements as discussed above. All relevant facts and circumstances, in-
cluding the credit worthiness of the broker, dealer or institution, will be
considered in making decisions with respect to the lending of securities, sub-
ject to review by the Board of Trustees.
At the present time, the Staff of the Commission does not object if an in-
vestment company pays reasonable negotiated fees in connection with loaned se-
curities 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.
PORTFOLIO TURNOVER
This Portfolio is managed for long-term appreciation, rather than short-term
trading profits. As a result, the Adviser seeks to keep annual portfolio turn-
over below 60%. (A turnover rate of 100% would mean that all securities in the
Portfolio would be replaced within a one-year period.) However, portfolio
turnover depends to a great degree on market conditions. Occasionally, when
the market shifts suddenly or when the prospects for individual stocks change
quickly, the Adviser may find it necessary to sell securities which have not
been in the Portfolio for very long. The Portfolio will not normally engage in
short-term trading, but it reserves the right to do so.
INVESTMENT COMPANIES
As permitted by the 1940 Act, the Portfolio reserves the right to invest up
to 10% of its total assets, calculated at the time of investment, in the secu-
rities of other open-end or closed-end investment companies. No more than 5%
of the investing Portfolio's total assets may be invested in the securities of
any one investment company nor may it acquire more than 3% of the voting secu-
rities of any other investment company. The Portfolio will indirectly bear its
proportionate share of any management fees paid by an investment company in
which it invests in addition to the advisory fee paid by the Portfolio.
5
<PAGE>
The Fund has received an Order from the Commission, which permits each of
its Portfolios to invest the greater of 5% of its total assets or $2.5 million
in the UAM Funds' DSI Money Market Portfolio for cash management purposes pro-
vided that the investment is consistent with the Portfolio's investment poli-
cies and restrictions. Based upon the Portfolio's assets invested in the DSI
Money Market Portfolio, the investing Portfolio's adviser will waive its in-
vestment advisory fee and any other fees earned as a result of the Portfolio's
investment in the DSI Money Market Portfolio. The investing Portfolio will
bear expenses of the DSI Money Market Portfolio on the same basis as all of
its other shareholders.
INVESTMENT LIMITATIONS
To help reduce the Portfolio's exposure to risk in specific situations, it
has adopted certain limitations associated with its investments and investment
practices. These policies and limitations are considered at the time of pur-
chase. The sale of instruments is not required in the event of a subsequent
change in circumstances.
The Portfolio's limitations are as follows:
(a) With respect to 75% of its assets, the Portfolio may not own more
than 5% of the securities of any single issuer (other than investments
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities);
(b) With respect to 75% of its assets, the Portfolio may not own more
than 10% of the outstanding voting securities of any one issuer;
(c) The Portfolio may not invest more than 5% of its assets in securi-
ties of issuers (other than securities issued or guaranteed by the U.S.
or foreign governments or their political subdivisions) that have (with
predecessors) less than 3 years of continuous operation;
(d) The Portfolio may not invest more than 25% of its assets in compa-
nies within a single industry; however, there are no limitations on in-
vestments made in instruments issued or guaranteed by the U.S. govern-
ment and its agencies;
(e) The Portfolio may not make loans except by purchasing debt securi-
ties in accordance with its investment objective and policies or by
lending its portfolio securities to banks, brokers, dealers or other fi-
nancial institutions as long as the loans are made in compliance with
the 1940 Act, and the rules, regulations and interpretations of the Com-
mission;
(f) The Portfolio may not borrow except from banks in extraordinary cir-
cumstances for temporary or emergency purposes. In this situation, the
Portfolio may not (1) borrow more than 33 1/3% of its gross assets and
(2) cannot buy additional securities if it borrows more than 5% of its
total assets; and
(g) The Portfolio may not pledge, mortgage or hypothecate more than 33
1/3% of its total assets at fair market value.
The Portfolio's investment objective and investment limitations (a), (b),
(d), (e) and (f)(1) listed above are fundamental policies and may be changed
only with the approval of the holders of a majority of the outstanding voting
securities of the Portfolio. The other investment limitations described here
and those not specified as fundamental in the Statement of Additional Informa-
tion as well as the Portfolio's investment policies are not fundamental and
the Fund's Board of Trustees may change them without shareholder approval.
PORTFOLIO TRANSACTIONS
The Portfolio's Investment Advisory Agreement authorizes the Adviser to se-
lect the brokers or dealers that will execute the purchases and sales of in-
vestment securities for the Portfolio. The Agreement directs the Adviser to
use its best efforts to obtain the best available price and most favorable ex-
ecution for all the Portfolio's transactions.
Since the Portfolio's shares are marketed directly, without the intermedia-
tion of brokers or dealers, the Adviser does not direct its brokerage and
principal business to firms on the basis of how many Portfolio shares they
have sold. However, the Adviser may place Portfolio orders with qualified bro-
ker-dealers who recommend the Portfolio or who act as agents in the purchase
of shares of the Portfolio for their clients.
Some securities considered for investment by the Portfolio may also be ap-
propriate for other clients served by the Adviser. If a purchase or sale of
securities is consistent with the investment policies of a 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 fair and reasonable manner. Although there is no
specified formula for
6
<PAGE>
allocating such transactions, the various allocation methods used by the Ad-
viser, and the result of such allocations, are subject to periodic review by
the Fund's Board of Trustees.
BUYING, SELLING AND EXCHANGING SHARES
Shares of the Portfolio are offered through UAM Fund Distributors, Inc., to
investors at net asset value without a sales commission. The required minimum
initial investment in the Portfolio is [$2,500] with certain exceptions as may
be determined from time to time by the officers of the Fund. The initial in-
vestment minimum for IRA accounts is $500. The initial investment minimum for
spousal IRA accounts is $250. The minimum for any subsequent investment is
$100.
Shares of the Portfolio may be purchased by customers of broker-dealers or
other financial intermediaries ("Service Agents") which have established a
shareholder servicing relationship with the Fund on behalf of their customers.
Service Agents may impose additional or different conditions or other account
fees on the purchase and redemption of Portfolio shares by their customers.
Each Service Agent is responsible for transmitting to its customers a schedule
of any such fees and information regarding any additional or different condi-
tions regarding purchases and redemptions. Shareholders who are customers of
Service Agents should consult their Service Agent for information regarding
these fees and conditions. Amounts paid to Service Agents may include transac-
tion fees and/or service fees paid by the Fund from the Fund assets attribut-
able to the Service Agent, and would not be imposed if shares of the Portfolio
were purchased directly from the Fund or Distributor. The Service Agents may
provide services to their customers that are not available to a shareholder
dealing directly with the Fund. A salesperson and any other person entitled to
receive compensation for selling or servicing Portfolio shares may receive
different compensation with respect to one particular class of shares over an-
other in the Fund.
Service Agents may enter confirmed purchase orders on behalf of their cus-
tomers. If you buy shares of the Portfolio in this manner, the Service Agent
must receive your investment order before the close of trading on the NYSE and
transmit it to the Fund's Transfer Agent, Chase Global Funds Services Company,
(prior to the close of the transfer Agent's business day) and to the Distribu-
tor to receive the day's share price. Proper payment for the order must be re-
ceived by the Transfer Agent no later than the time when the Portfolio is
priced on the following business day. Service Agents are responsible to their
customers, the Fund and its Distributor for timely transmission of all sub-
scription and redemption requests, investment information, documentation and
money.
HOW TO BUY SHARES BY MAIL
If you have not invested in this Portfolio before, you will have to fill out
an Account Registration Form, which can be obtained by calling the Fund at 1-
800-638-7983. Once you have filled out the information on the form, separate
the two copies and sign both. We require an original signature on both forms.
Mail one copy, along with a check payable to UAM Funds Trust, to:
UAM Funds Trust
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
Mail the other copy, without the check, to:
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
To make additional investments to an account you have already established,
simply mail your check to UAM Funds Service Center at the address above. Make
sure that your account number, account name, and the name of the Portfolio are
clearly indicated on the check so that we can properly credit your account.
For both initial and additional investments, your funds will be credited to
your account at the next share price calculated for the Portfolio after re-
ceipt. Investments received by 4 p.m. (Eastern Time) will be invested at the
share price calculated after the market closes on the same day. (For example,
if your check arrives on Tuesday morning, you will purchase shares at the
price calculated after the market close on Tuesday.)
HOW TO BUY SHARES BY WIRE
To make an initial investment by wire, you must first telephone the Fund at
1-800-638-7983. A representative will then ask you to provide the account num-
ber from which you plan to wire the funds, the bank or financial
7
<PAGE>
institution, its address, phone number and your social security or taxpayer
identification number. You will then tell the representative which Portfolio
you wish to invest in and how much you want to invest. The representative will
then provide you with an account number and a wire control number. Please
write it down and keep it for your records.
Once you have an account number, call your bank and instruct them to wire a
specified amount to the Fund's custodian, The Chase Manhattan Bank ("Custodian
Bank"). You will be asked to provide the following information:
The Chase Manhattan Bank
ABA# 021000021
UAM Funds
Credit DDA Acct. #9102772952
(Your Account Registration)
(Your Account Number)
(Wire Control Number)
After you have instructed the bank to wire the money, you must forward a
completed Account Registration Form to the UAM Funds Service Center as soon as
possible. You can obtain forms by calling the UAM Funds Service Center at 1-
800-638-7983. Federal Funds purchases will be accepted only on days when the
New York Stock Exchange ("NYSE") and the Custodian Bank are open for business.
Once you have made the initial purchase, you may buy additional shares by
wire at any time by following the instructions above. On all wired purchases,
funds will be invested at the share price calculated after the next market
close.
IN-KIND PURCHASES
Under certain circumstances, investors who own securities may be able to ex-
change them directly for shares of the Portfolio without converting their in-
vestments into cash first. The Portfolio will accept such in-kind purchases
only if the securities offered for exchange meet the Portfolio's investment
criteria which are set forth in the "Details on Investment Policies" section
of this Prospectus. Once accepted, the shares will be valued according to the
process described in "How Share Prices are Determined" at the same time the
Portfolio's shares are valued. Once a value has been determined for both, an
exchange will be made. All dividends, interest, subscription, or other rights
pertaining to these securities become the Fund's property; if you receive any
such items, you must deliver them to the Fund immediately. Securities acquired
by the Portfolio through an in-kind purchase will be acquired for investment
and not for immediate resale.
The Fund will not accept securities for exchange unless they meet the fol-
lowing criteria:
. The securities are eligible to be included in the Portfolio and market
quotes can readily be obtained for them, e.g., as evidenced by a listing
on the American Stock Exchange, NYSE or NASDAQ .
. The investor assures the Fund that the securities are not subject to any
restrictions under the Securities Act of 1933 or any other law or regula-
tion.
. The value of the securities exchanged does not increase the Portfolio's
position in any specific issuer's security to more than 5% of the Portfo-
lio's total net assets.
HOW TO SELL SHARES
You may sell shares by telephone or mail at any time, free of charge. Your
shares will be valued at the next price set after we receive your instructions
to sell.
BY MAIL
To redeem by mail, include:
. your share certificates, if we have issued them to you;
. a letter which tells us how many shares you wish to redeem or, alterna-
tively, what dollar amount you wish to receive;
. a signature guaranteed by your bank, broker or other financial institu-
tion (see "Signature Guarantees" below); and
. any other necessary legal documents, in the case of estates, trusts,
guardianships, custodianships, corporations, pension and profit-sharing
plans and other organizations.
If you are not sure of which documents to send, please contact the UAM Funds
Service Center at 1-800-638-7983.
8
<PAGE>
BY TELEPHONE
To redeem shares by telephone, you must have completed an Account Registra-
tion Form and returned it to the Fund. Once this form is on file, simply call
the Fund and request the redemption amount to be mailed to you or wired to
your bank. The Fund and the Fund's Transfer Agent will employ reasonable pre-
cautions to make sure that the instructions communicated by telephone are gen-
uine, and they may be liable for any losses if they fail to do so. You will be
asked to provide certain personal identification when you open an account, and
again, when you request a telephone redemption. In addition, all telephone
transaction requests will be recorded and investors may be required to provide
additional telecopied written instructions of such transaction requests. Nei-
ther the Fund nor the Transfer Agent will be responsible for any loss, addi-
tional cost or expense for following transaction instructions received by tel-
ephone that it reasonably believes are genuine.
To change the name of the commercial bank or the account designated to re-
ceive redemption proceeds, a written request must be sent to the Fund at the
address on the cover of this Prospectus. Requests to change the bank or ac-
count must be signed by each shareholder and each signature must be guaran-
teed. You cannot redeem shares by telephone if you hold stock certificates for
these shares. Please contact one of the Fund's representatives at 1-800-638-
7983 for further details.
SIGNATURE GUARANTEES
To protect your account, the Fund and the Fund's Transfer Agent from fraud,
signature guarantees are required for certain redemptions. Signature guaran-
tees are used to verify that the person who authorizes a redemption is, in
fact, the registered shareholder. They are required whenever you:
. Redeem shares and request that the proceeds be sent to someone other than
the registered shareholder(s) or to an address which is not the regis-
tered address.
. Transfer shares from one Portfolio to another.
Signatures must be guaranteed by an "eligible guarantor institution" as de-
fined in Rule 17Ad-15 under the Securities Exchange Act of 1934. (The UAM
Funds Service Center can provide you with a full definition of the term.) You
can obtain a signature guarantee at almost any bank, as well as through most
brokers, dealers, credit unions, national securities exchanges, registered se-
curities associations, clearing agencies and savings associations. 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 el-
igible guarantor institution which participates in a signature guarantee pro-
gram. A notary public can not provide a signature guarantee.
The signature guarantee must appear either:
. on the written request for redemption; or
. on a separate instrument for assignment (a "stock power") which should
specify the total number of shares to be redeemed; or
. on all stock certificates tendered for redemption, and, if shares held by
the Fund are also being redeemed, then on the letter or stock power.
FURTHER INFORMATION ON SELLING SHARES
Normally, the Fund will make payment for all shares sold under this proce-
dure within one business day after we receive a request. In no event will pay-
ment be made more than seven days after receipt of a redemption (sale) request
in good order. The Fund may suspend the right of redemption or postpone the
date at times when either the NYSE and Custodian Bank are closed, or under any
emergency circumstances as determined by the Commission.
If the Fund's Board of Trustees determines that it would be detrimental to
the best interests of the remaining shareholders of the Fund to make payments
wholly or partly in cash, the Fund may pay the redemption proceeds in whole or
in part by a distribution in-kind of liquid securities held by the Portfolio
instead of cash in conformity with applicable rules of the Commission. Invest-
ors may incur brokerage charges when they sell portfolio securities received
in payment of redemptions.
HOW TO EXCHANGE SHARES
You may exchange Institutional Class Shares of the Portfolio for any other
Institutional Class Shares of a Portfolio included in 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 this Prospectus.) When
you exchange shares you sell your old shares and buy new ones, both at the
price calculated after the next market close. There is no sales charge for
9
<PAGE>
exchanges. Exchange requests may be made by phone or letter. Telephone ex-
changes may be made only if the Fund holds all share certificates and if the
registration of the two accounts is identical. Telephone exchanges received
before 4 p.m. (Eastern Time) will be processed at the share price set after
the market close the same day. Exchanges received after 4 p.m. (Eastern Time)
will be executed at the share price determined at the market close the follow-
ing day. For additional information regarding responsibility for the authen-
ticity of telephoned transaction instructions. (See "How to Sell Shares -- By
Telephone" above.)
Please review a Portfolio's investment objective before shifting money into
it. Make sure its objective and strategies fit with your long-term goals. Be-
fore exchanging into a Portfolio, read its Prospectus. You may obtain one for
the Portfolio(s) you are interested in by calling the UAM Funds Service Center
at 1-800-638-7983. The Portfolio you are exchanging into must be registered in
your state of residence. Remember, every time you exchange shares of one Port-
folio for another, your transaction is counted as a sale of the first security
and a purchase of the second. As a result, you may incur a tax liability by
exchanging shares if your investment has appreciated since you bought it. Con-
sult your tax adviser to determine your liability for capital gains taxes.
HOW SHARE PRICES ARE DETERMINED
We calculate the net asset value of each share of the Portfolio every day
that the NYSE is open. This means that shares are revalued after the market
close at 4 p.m. (Eastern Time) on Monday through Friday, except for major hol-
idays.
To determine how much each share is worth, we add up the total market value
of all the securities in the Portfolio plus cash and other assets, deduct lia-
bilities and then divide by the total number of shares outstanding.
For stocks, we use the last quoted trading price as the market value. For
listed stocks, we use the price quoted by the exchange on which the stock is
primarily traded. Unlisted stocks and listed stocks which have not been traded
on the valuation date or for which market quotations are not readily available
are valued at a price between the last price asked and the last price bid. The
value of other assets and securities for which no quotations are readily
available (including restricted securities) is determined in good faith at
fair value using methods determined by the Fund's Board of Trustees.
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
DIVIDENDS
Stocks generate income in the form of dividends. The Portfolio will normally
distribute substantially all of its net investment income (for tax purposes)
from these investments as well as any interest earned from short-term invest-
ments, to shareholders in the form of quarterly dividends. If any net capital
gains are realized, the Portfolio will normally distribute such gains annual-
ly. You must instruct the Portfolio to pay out dividends and distributions in
cash to you or to reinvest them. Unless you specifically tell us to distribute
dividend income in cash, however, we will assume you want this income rein-
vested.
Reinvested dividend distributions will affect your tax liability. By law,
you must pay taxes on any dividend or interest income you receive on your in-
vestments whether distributed in cash or reinvested in shares. The Portfolio
will send you a statement at the end of the year telling you exactly how much
dividend income you have earned for tax purposes.
CAPITAL GAINS
Capital gains are another source of appreciation to the Portfolio. Basical-
ly, a gain is an increase in the value of a stock or bond.
You can incur capital gains in two ways. First, if the Portfolio buys a
stock or bond at one price, then sells it at a higher price, it will realize a
capital gain. At the end of the year, the capital gains computed under tax
rules that the Portfolio has made are added up and capital losses are sub-
tracted. The total is then divided by the number of shares outstanding. If any
net capital gains are realized, the Portfolio will normally distribute such
gains annually. You will receive a statement annually informing you of your
share of the Portfolio's capital gains.
The second way to incur capital gains is to sell or exchange your shares. If
you sell shares at a higher price than you bought them at, you will be respon-
sible for paying taxes on your gain. There are several ways to determine your
tax liability, and we suggest you contact a qualified tax adviser to help you
decide which is best for you.
10
<PAGE>
TAXES
The Portfolio intends to qualify each year as a "regulated investment compa-
ny" under Federal tax law, and if it qualifies, the Portfolio will not be lia-
ble for Federal income taxes, because it will have distributed all its net in-
vestment income and net realized capital gains to shareholders. Shareholders
will then have to pay taxes on the dividends, and on gains whether they are
distributed as cash or are reinvested in shares. Dividends and short-term cap-
ital gains will be taxed as ordinary income. Long-term capital gains distribu-
tions are taxed as long-term capital gains.
Dividends declared in October, November and December to shareholders of rec-
ord in such a month will be treated as if they had been paid by the Fund and
received by the shareholders on December 31 of the same calendar year, pro-
vided that the dividends are paid before February of the following year.
The Fund is required by Federal law to withhold 31% of reportable payments
(which may include dividends, capital gains distributions and redemptions)
paid to shareholders who have not complied with IRS regulations. In order to
avoid this withholding requirement, you must certify on the Account Registra-
tion Form or on a separate form supplied by the Fund that your Social Security
or Taxpayer Identification Number you have provided is correct and that you
are not currently subject to backup withholding or that you are exempt from
backup withholding.
Dividends and interest received by the Portfolio may give rise to withhold-
ing and other taxes imposed by foreign countries. These taxes reduce the Port-
folio's dividends but are included in the taxable income reported on your tax
statement if the Portfolio qualifies for this tax treatment and elects to pass
it through to you. You may be able to claim an offsetting tax credit or item-
ized deduction for foreign taxes paid by the Portfolio. Your tax statement
will generally show the amount of foreign tax for which a credit or deduction
may be available.
FUND MANAGEMENT AND ADMINISTRATION
THE INVESTMENT ADVISER
Hanson Investment Management Company (the "Adviser") is a registered invest-
ment adviser formed in 1973. Its business offices are located at 4000 Civic
Center Drive, Suite 200, San Rafael, CA 94903. The Adviser is a wholly-owned
subsidiary of United Asset Management Corporation ("UAM") and provides and of-
fers investment management and advisory services to corporations, unions, pen-
sions and profit-sharing plans, trusts, estates and other institutions and in-
vestors. The Adviser currently has over $1.1 billion in assets under manage-
ment.
The Portfolio pays an annual fee in monthly installments to the Adviser for
advisory services. This fee is accrued daily and paid every month as a per-
centage of the average net assets in the Portfolio for that month. The per-
centage fee on an annual basis is 0.70%.
The Adviser may compensate its affiliated companies for referring investors
to the Portfolio. The Distributor, UAM, the Adviser, or any of their affili-
ates, may, at its own expense, compensate a Service Agent or other person for
marketing, shareholder servicing, record-keeping and/or other services per-
formed with respect to the Fund, a Portfolio or any Class of Shares of a Port-
folio. The person making such payments may do so out of its revenues, its
profits or any other source available to it. Such services arrangements, when
in effect, are made generally available to all qualified service providers.
The Distributor, the Adviser and certain of their other affiliates also par-
ticipate, at the date of this Prospectus, in an arrangement with Smith Barney
Inc. under which Smith Barney provides certain defined contribution plan mar-
keting and other shareholder services and receives from such entities .15 of
1% of the daily net asset value of Institutional Class Shares held by Smith
Barney's eligible customer accounts in addition to amounts payable to all
selling dealers. The Fund also compensates Smith Barney for services it pro-
vides to certain defined contribution plan shareholders that are not otherwise
provided by the Administrator.
The investment professionals at the Adviser who comprise the Investment Com-
mittee and who are responsible for the day-to-day management of the Portfolio
and their qualifications are as follows:
CHARLES H. RAVEN, PRESIDENT AND CHIEF INVESTMENT OFFICER
Charles H. Raven joined Hanson Investment Management Company in 1983 as a
principal of the firm. Prior to joining the firm, Mr. Raven was a senior port-
folio manager for McCullough & Andrews and before that was Vice President, In-
vestments at Lionel D. Edie & Company where he worked for fourteen years. Pre-
viously, he worked in commercial banking with Bank of America. He received a
BA from Stanford University and an MBA from Harvard Business School.
11
<PAGE>
ANTHONY P. WILSON, PRINCIPAL; DIRECTOR OF MARKETING & CLIENT SERVICE
Anthony P. Wilson joined Hanson Investment Management in 1995 as a Princi-
pal. Over the past 25 years Mr. Wilson has held several senior management po-
sitions. Most recently he was Chief Financial Officer for The Lawrenceville
School managing their Endowment Fund. Mr. Wilson also served as the senior US
representative for J.P. Morgan's $11 billion international securities manage-
ment division, and as Vice President and Managing Director in the Asset Man-
agement Group at A.G. Becker Paribas. Mr. Wilson received a BA from the Uni-
versity of Colorado and a MA from Northwestern University.
EDWARD J. LORAIN, DIRECTOR OF RESEARCH
Edward J. Lorain joined Hanson Investment Management Company in 1984 as an
equity research analyst. Mr. Lorain has consistantly served the research needs
of the firm and in 1995 was promoted to Director of Research. Prior to joining
Hanson Mr. Lorain was a financial consultant for Dean Witter Reynolds, Inc. He
received a BS from the University of California, Davis.
STEVEN E. CUTCLIFFE, PRINCIPAL, PORTFOLIO MANAGER
Steven E. Cutcliffe joined Hanson Investment Management Company in 1991 as
an assistant portfolio manager. In 1993, he was promoted to portfolio manager.
Previously, Mr. Cutcliffe was Vice President, Corporate Finance for McGinn,
Smith & Company and before that worked for Manufacturers Hanover Trust Compa-
ny. He received an AB from Dartmouth College and an MBA from Amos Tuck School.
DAVID E. POST, PORTFOLIO MANAGER
David E. Post joined Hanson Investment Management Company in 1994 as a port-
folio manager. In 1983, Mr. Post founded CSI Capital Management, where he di-
rected the investment of all managed assets. Previously, he served as presi-
dent of HS Partners, Inc. He began his career at Merrill Lynch, Pierce, Fenner
& Smith. Mr. Post received a BA from the University of California, Berkeley.
LISA M. COLLINS, VICE PRESIDENT, TRADING
Lisa M. Collins joined Hanson Investment Management Company in 1986 as a
portfolio administrator. She worked as a portfolio administrator and office
manager prior to taking over the trading area in 1987. In 1993, Ms. Collins
was named Vice President and continues to manage trading for the firm. Before
joining Hanson Investment Management Company, she worked as a research assis-
tant at Paine Webber, Inc. Previously, Ms. Collins worked as a portfolio ad-
ministrator at Alliance Capital Management Co., and before that with Birr
Wilson & Co. She received a BA from California Polytechnic University.
STEPHEN F. ROSENTHAL, CFA, RESEARCH ANALYST
Stephen F. Rosenthal joined Hanson Investment Management Company in 1995 as
a research analyst. Prior to joining Hanson, Mr. Rosenthal also was a Captain
in the Marine Corps from 1983 to 1990, where he piloted Marine Attack Helicop-
ters as a Naval Aviator. He received a BS from the University of Santa Clara
and an MBA from the University of Southern California.
THE ADMINISTRATOR
Pursuant to a Fund Administration Agreement dated April 15, 1996, UAM Fund
Services, Inc., ("UAMFSI") a wholly-owned subsidiary of United Asset Manage-
ment Corporation, with its principal office located at 211 Congress Street,
Boston, MA 02110, is responsible for performing and overseeing administration,
fund accounting, dividend disbursing and transfer agency services provided to
the Fund and its Portfolios. UAMFSI has subcontracted the performance of cer-
tain of such services to Chase Global Funds Services Company ("CGFSC"), an af-
filiate of The Chase Manhattan Bank, pursuant to a Mutual Funds Service Agree-
ment dated April 15, 1996. CGFSC is located at 73 Tremont Street, Boston, MA
02108-3913. Effective April 1, 1996, The Chase Manhattan Corporation, the par-
ent of The Chase Manhattan Bank merged with and into Chemical Banking Corpora-
tion, the parent company of Chemical Bank. Chemical Banking Corporation is the
surviving corporation and will continue its existence under the name "The
Chase Manhattan Corporation".
Each Portfolio pays to UAMFSI a monthly fee comprised of two parts: a Port-
folio-specific fee which is retained by UAMFSI and a sub-administration fee
which UAMFSI in turn pays to CGFSC. The Portfolio-specific fee for the Hanson
Equity Portfolio is 0.04% of aggregate net assets. The sub-administration fee
calculated on an annualized basis equals: 0.19 of 1% of the first $200 million
of total net assets of the Fund; 0.11 of 1% of the next $800 million of total
12
<PAGE>
net assets of the Fund; 0.07 of 1% of total net assets in excess of $1 billion
but less than $3 billion; and 0.05 of 1% of total net assets in excess of $3
billion. The sub-administration fees are allocated among the Portfolios on the
basis of their relative assets and are subject to a graduated minimum fee
schedule per Portfolio of $2,000 per month upon inception of a Portfolio to
$70,000 annually after two years. If a separate class of shares is added to a
Portfolio, the minimum annual fee payable by that Portfolio may be increased
by up to $20,000.
THE DISTRIBUTOR
UAM Fund Distributors, Inc., a wholly-owned subsidiary of UAM with its prin-
cipal office located at 211 Congress Street, Boston, Massachusetts 02110, dis-
tributes the shares of the Fund. Under the Fund's Distribution Agreement (the
"Agreement"), the Distributor, as agent of the Fund, agrees to use its best
efforts as sole distributor of the Fund's shares. The Distributor does not re-
ceive any fee or other compensation under the Agreement with respect to this
Portfolio. The Agreement continues in effect as long as the Fund's Board of
Trustees, including a majority of the Trustees who are not parties to the
Agreement or interested persons of any such party, approve it on an annual ba-
sis. This Agreement provides that the Fund will bear the costs of the regis-
tration of its shares with the Commission and various states and the printing
of its prospectuses, statements of additional information and reports to
shareholders.
CUSTODIAN
The Chase Manhattan Bank serves as custodian of the Fund's assets.
ACCOUNTANTS
Price Waterhouse acts as the independent accountants for the Fund and audits
its financial statements annually.
SUB-ADMINISTRATOR, TRANSFER AND DIVIDEND DISBURSING AGENT
Chase Global Funds Services Company, 73 Tremont Street, Boston, MA 02108,
acts as sub-administrator, transfer agent and dividend disbursing agent for
the Fund.
REPORTS
Investors will receive unaudited semi-annual financial statements and annual
financial statements audited by Price Waterhouse.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be made by writing to the Fund at the address
listed on the cover of this Prospectus or by calling 1-800-638-7983.
LITIGATION
The Fund is not involved in any litigation.
GENERAL FUND INFORMATION
The Portfolio is one of a series of investment portfolios available through
UAM Funds Trust, a no-load, open-end investment company known as a "mutual
fund." Each of the Portfolios which make up the Fund have different investment
objectives and policies. Together, the Portfolios offer a diverse set of risk
and return characteristics to suit a wide range of investor needs. The Fund
was organized under the name "The Regis Fund II" on May 18, 1994, as a Dela-
ware business trust. On October 31, 1995, the name was changed to "UAM Funds
Trust."
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Officers of the Fund manage its day-to-day operations and are responsi-
ble to the Fund's Board of Trustees. The Trustees set broad policies for the
Fund and elect its Officers.
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 sharehold-
ers.
The shares of each Portfolio have noncumulative voting rights, which means
that the holders of more than 50% of the shares voting for the election of
Trustees can elect 100% of the Trustees if they choose to do so. A shareholder
is entitled to one vote for each full share held (and a fractional vote for
each fractional share held), then standing in his or her name on the books of
the Fund. Both Institutional Class and Institutional Service Class Shares rep-
resent an interest in the same assets of a Portfolio and are identical in all
respects except that the Service Class Shares bear certain expenses related to
shareholder servicing, may bear expenses related to the distribution of such
shares and have exclusive voting rights with respect to matters relating to
such distribution expenditures. Information about the Service Class Shares of
the Portfolios along with the fees and expenses associated with such shares is
available upon request
13
<PAGE>
by contacting the Fund at 1-800-638-7983. The Fund will not ordinarily hold
shareholder meetings except as required by the 1940 Act and other applicable
laws. The Fund has undertaken that its Trustees will call a meeting of share-
holders if such a meeting is requested in writing by the holders of not less
than 10% of the outstanding shares of the Fund. To the extent required by the
undertaking, the Fund will assist shareholder communications in such matters.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR IN THE PORTFOLIO'S
STATEMENT OF ADDITIONAL INFORMATION, IN CONNECTION WITH THE OFFERING MADE BY
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR ITS REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFERING BY THE FUND IN ANY JURISDICTION IN WHICH SUCH
OFFERING MAY NOT BE LAWFULLY MADE.
14
<PAGE>
UAM FUNDS -- INSTITUTIONAL CLASS SHARES
ACADIAN ASSET MANAGEMENT, INC.
Acadian Emerging Markets Portfolio
Acadian International Equity Portfolio
BARROW, HANLEY, MEWHINNEY & STRAUSS, INC.
BHM&S Total Return Bond Portfolio
CHICAGO ASSET MANAGEMENT COMPANY
Chicago Asset Management Value/Contrarian Portfolio
Chicago Asset Management Intermediate Bond Portfolio
COOKE & BIELER, INC.
C&B Balanced Portfolio
C&B Equity Portfolio
C.S. MCKEE & COMPANY, INC.
McKee U.S. Government Portfolio
McKee Domestic Equity Portfolio
McKee International Equity Portfolio
DEWEY SQUARE INVESTORS CORPORATION
DSI Disciplined Value Portfolio
DSI Limited Maturity Bond Portfolio
DSI Money Market Portfolio
FIDUCIARY MANAGEMENT ASSOCIATES, INC.
FMA Small Company Portfolio
INVESTMENT COUNSELORS OF MARYLAND, INC.
ICM Equity Portfolio
ICM Fixed Income Portfolio
ICM Small Company Portfolio
INVESTMENT RESEARCH COMPANY
IRC Enhanced Index Portfolio
MURRAY JOHNSTONE INTERNATIONAL LTD.
MJI International Equity Portfolio
NEWBOLD'S ASSET MANAGEMENT, INC.
Newbold's Equity Portfolio
NWQ INVESTMENT MANAGEMENT COMPANY
NWQ Balanced Portfolio
NWQ Value Equity Portfolio
RICE, HALL, JAMES & ASSOCIATES
Rice, Hall, James Small Cap Portfolio
SIRACH CAPITAL MANAGEMENT, INC.
Sirach Equity Portfolio
Sirach Fixed Income Portfolio
Sirach Growth Portfolio
Sirach Short-Term Reserves Portfolio
Sirach Special Equity Portfolio
Sirach Strategic Balanced Portfolio
SPECTRUM ASSET MANAGEMENT, INC.
SAMI Preferred Stock Income Portfolio
Enhanced Monthly Income Portfolio
15
<PAGE>
STERLING CAPITAL MANAGEMENT COMPANY
Sterling Partners' Balanced Portfolio
Sterling Partners' Equity Portfolio
Sterling Partners' Short-Term Fixed Income Portfolio
THOMPSON, SIEGEL & WALMSLEY, INC.
TS&W Equity Portfolio
TS&W Fixed Income Portfolio
TS&W International Equity Portfolio
16
<PAGE>
UAM FUNDS
UAM FUNDS SERVICE CENTER
C/O CHASE GLOBAL FUNDS SERVICES COMPANY
P.O. BOX 2798
BOSTON, MA 02208-2798
1-800-638-7983
- -------------------------------------------------------------------------------
IRC ENHANCED INDEX PORTFOLIO
INSTITUTIONAL CLASS SHARES
INVESTMENT ADVISER: INVESTMENT RESEARCH COMPANY
- -------------------------------------------------------------------------------
PROSPECTUS -- AUGUST 28, 1996
IRC Enhanced Index Portfolio is one of a series of investment portfolios
available through UAM Funds Trust (hereinafter defined as "UAM Funds" or the
"Fund"), an open-end investment company known as a "mutual fund." Each of the
Portfolios that make up the Fund have different investment objectives and pol-
icies. In addition, several of the Fund's Portfolios offer two separate clas-
ses of shares: Institutional Class Shares and Institutional Service Class
Shares. IRC Enhanced Index Portfolio currently offers only one class of
shares. The securities offered in this Prospectus are Institutional Class
Shares of one diversified, no-load Portfolio of the Fund managed by Investment
Research Company.
The IRC Enhanced Index Portfolio is a mutual fund portfolio which seeks a
total return exceeding that of the Standard & Poor's Composite Stock Price In-
dex ("S&P 500"). IRC plans to achieve this objective by employing its proprie-
tary analytic technology to invest in a diversified portfolio of common stocks
that are listed in the S&P 500 ("S&P 500 stocks"). There can be no assurance
that the objective will be achieved.
Please keep this Prospectus for future reference since it contains informa-
tion that you should understand before you invest. You may also wish to review
the IRC Enhanced Index Portfolio's "Statement of Additional Information" dated
August 28, 1996 which was filed with the Securities and Exchange Commission
and has been incorporated by reference into this Prospectus. (It is legally
considered to be a part of this Prospectus.) Please call or write the Fund at
the above address to obtain a free copy of this Statement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Fees and Expenses.......................................................... 1
Summary: About the Portfolio............................................... 2
Risk Factors............................................................... 3
Financial Highlights....................................................... 4
Performance Calculations................................................... 4
Details on Investment Policies............................................. 6
Investment Limitations..................................................... 6
Buying, Selling and Exchanging Shares...................................... 7
How Share Prices are Determined............................................ 11
Dividends, Capital Gains Distributions and Taxes........................... 11
Fund Management and Administration......................................... 12
General Fund Information................................................... 15
UAM Funds -- Institutional Class Shares.................................... 16
</TABLE>
<PAGE>
FEES AND EXPENSES
Investors will be charged various fees and expenses incurred in managing the
IRC Enhanced Index Portfolio (the "Portfolio") including:
SHAREHOLDER TRANSACTION EXPENSES: These are the costs entailed in buying,
selling or exchanging shares of the Portfolio. The Portfolio does not charge
investors for shareholder transaction expenses. However, transaction fees may
be charged if you are a customer of a broker-dealer or other financial inter-
mediary who has established a shareholder servicing relationship with the Fund
on behalf of their customers. Please see "Buying, Selling and Exchanging
Shares" for further information.
<TABLE>
<S> <C>
Sales Load Imposed on Purchases............................................ NONE
Sales Load Imposed on Reinvested Dividends................................. NONE
Deferred Sales Load........................................................ NONE
Redemption Fees............................................................ NONE
Exchange Fees.............................................................. NONE
</TABLE>
ESTIMATED ANNUAL FUND OPERATING EXPENSES: These expenses, which cover the
cost of administration, marketing and shareholder communication, and are usu-
ally quoted as a percentage of net assets, are factored into the Portfolio's
share price and not billed directly to shareholders. They include:
<TABLE>
<S> <C>
Investment Advisory Fees............................................... 0.70 %
Administrative Fees.................................................... 0.93 %
12b-1 Fees............................................................. NONE
Other Expenses......................................................... 0.98 %
Advisory Fees Waived................................................... (0.11)%
-----
Total Operating Expenses (After Fee Waiver)............................ 2.50 %*
=====
</TABLE>
* Investment Research Company, the Adviser, has agreed to waive all or a por-
tion of its advisory fees and to assume operating expenses otherwise payable
by the Portfolio, if necessary, in order to keep the Portfolio's total an-
nual operating expenses (excluding interest, taxes and extraordinary ex-
penses) within the limits established by state securities law, currently
from exceeding 2.50% of average daily net assets. The estimate above in-
cludes the effect of expense offsets. If expense offsets were excluded,
annualized Total Operating Expenses for the period ended April 30, 1996
would be 2.52%. (See "Financial Highlights.") It is estimated that, if the
Adviser did not waive fees, the Portfolio's total annual operating expenses
would be 2.61% of average daily net assets.
For purposes of calculating the estimated fees and expenses set forth above,
it is assumed that the Portfolio's average daily net assets will be $4 mil-
lion. As the Portfolio only commenced operations on January 23, 1996, its as-
sets are at beginning levels. Assuming growth in assets, the adviser expects
the Portfolio's Total Operating Expenses to decrease over time.
The Adviser will not be reimbursed by the Fund for any advisory fees which
are waived or expenses which the Adviser may bear on behalf of the Portfolio.
Investors can get a better idea of how the Portfolio's operating expenses
will affect their own investments by examining the following chart. The chart
shows how much a hypothetical investor would pay in expenses, assuming that he
or she made an initial investment of $1,000, earned a 5% annual rate of return
and redeemed his or her investment at the end of the time period indicated.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
------ -------
<S> <C> <C>
Expenses...................................................... $25 $78
</TABLE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EX-
PENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE
SHOWN ABOVE.
1
<PAGE>
SUMMARY: ABOUT THE PORTFOLIO . . .
OBJECTIVE:
The Portfolio seeks a total return exceeding that of the S&P 500.
HOW IS THE PORTFOLIO MANAGED?
The Portfolio's assets are invested in stocks selected from the S&P 500 uni-
verse of stocks. The Portfolio's investment adviser uses a sophisticated math-
ematical model to guide its investment selections. The investment process
seeks to select stocks whose stock prices taken together will perform better
than the S&P 500. A key to this process is limiting risk.
The Portfolio's investment policy to limit risk has three main elements.
First, Investment Research Company (the "Adviser") classifies the S&P 500 uni-
verse into 20 industrial sectors such as Transportation, Communications, and
Health Care. Thus each sector contains 25 stocks, on average. Within each sec-
tor, the Adviser selects an average of 10 stocks. Consequently, risk is lim-
ited by diversification, since the Portfolio holds approximately 200 stocks,
each from the S&P 500 universe. The second element of risk control is that
once every three months the Portfolio is rebalanced so that the fraction of
the Portfolio invested in each sector matches the sector's weight in the S&P
500. The third element of risk control is the Adviser's policy of selecting
stocks for the Portfolio so that the weight of each stock in the Portfolio
matches that stock's weight in the S&P 500, plus or minus a tolerance of ap-
proximately .80%, or 80 basis points.
In managing the Portfolio, the Adviser uses no futures contracts, no other
derivatives, no short sales or other hedging strategies, and no repurchase
agreements. The investment objective is intended to be achieved only through
purchases of S&P 500 stocks and U.S. Treasury securities.
To select stocks within each of the 20 sectors, the Adviser uses a mathemat-
ical model developed during a combined total of 40 years of research by two of
the Adviser's principals when they were professors in the Graduate School of
Business at the University of Chicago. The model is based on the principle
that institutional investors dominate the demand for stocks, and institutional
preferences change slowly over the near term (3-6 months). These stable pref-
erences are important determinants of the sensitivity of stock returns to
trends now underway in factors such as inflation and interest rates and in in-
dividual stock fundamentals such as dividends and price/earning ratios.
The Adviser focuses on comparisons among stocks and not on market timing.
Generally, the Portfolio will be fully invested in stocks from the S&P 500
universe. The Portfolio may invest up to 10% of its assets in short-term (one
year or less to maturity) U.S. Treasury securities as a cash reserve to hold
cash received from shareholders pending investment or to meet redemption re-
quests from shareholders.
The S&P 500 is composed of 500 selected common stocks, most of which are
listed on the New York Stock Exchange. Standard & Poor's Corporation ("S&P")
chooses the stocks to be included in the S&P 500 solely on a statistical ba-
sis. The weights of stocks in the S&P 500 are based on each stock's relative
total market value which is defined as the stock's market price per share
times the number of shares outstanding. Stocks currently in the S&P 500 repre-
sent approximately three-quarters of the total market value of all U.S. common
stocks. The Portfolio is neither sponsored by nor affiliated with S&P. (See
"Details on Investment Policies.")
WHO MANAGES THE PORTFOLIO?
The Adviser is Investment Research Company. The Adviser is a subsidiary of
United Asset Management Corporation and has approximately $2.0 billion of as-
sets under management for institutional investors, including corporations,
state governments, labor unions, foundations, mutual funds, and individuals.
(See "Fund Management and Administration.")
WHO SHOULD INVEST IN THE PORTFOLIO?
Participants in 401(k) pension plans and other defined-contribution plans
who believe that steady, highly diversified investments in stocks of major
corporations offer the best returns over time, plus reasonable protection
against inflation over the long run (10 years or more).
HOW TO INVEST
The Fund offers shares of the Portfolio to investors through UAM Fund Dis-
tributors, Inc. at net asset value next determined after the purchase order is
received in proper form. Share purchases may be made by sending investments
directly to the Fund. The minimum initial investment is $2,500 with certain
exceptions as may be determined from time to time by the Officers of the Fund.
The minimum for subsequent investments is $100. (See "Buying, Selling and Ex-
changing Shares.")
2
<PAGE>
DIVIDENDS AND DISTRIBUTIONS
The Portfolio will normally distribute substantially all of its net invest-
ment income in the form of a quarterly dividend. Any realized net capital
gains will be distributed annually. Distributions will be reinvested in the
Portfolio's shares automatically unless an investor elects to receive cash
distributions. (See "Dividends, Capital Gains Distributions and Taxes.")
HOW TO REDEEM
Shares of the Portfolio may be redeemed on any business day when the New
York Stock Exchange ("NYSE") is open, without cost, at the net asset value of
the Portfolio next determined after receipt of the redemption request. The
Portfolio's share price will fluctuate with market and economic conditions.
Therefore, your investment may be worth more or less when redeemed than when
purchased. (See "Buying, Selling and Exchanging Shares.")
ADMINISTRATIVE SERVICES
UAM Fund Services, Inc. (the "Administrator"), a wholly-owned subsidiary of
United Asset Management Corporation ("UAM"), is responsible for performing and
overseeing administration, fund accounting, dividend disbursing and transfer
agency services provided to the Fund and its Portfolios by third-party service
providers. (See "Fund Management and Administration.")
RISK FACTORS
An investment in the Portfolio presents risks similar to what is generally
termed "overall market risk". This means that the Portfolio presents risks
roughly the same as those which would be incurred by investing in a portfolio
comprised of the common stocks of all 500 companies listed in the S&P 500,
with the weight of each stock in the portfolio equal to the stock's weight in
the S&P 500. (See "Details on Investment Policies.")
3
<PAGE>
FINANCIAL HIGHLIGHTS
The following table provides selected per share data and ratios for a share
outstanding throughout the period presented of the IRC Enhanced Index Portfo-
lio and is part of the Portfolio's Financial Statements included in the Port-
folio's 1996 Annual Report to Shareholders which is incorporated by reference
into the Portfolio's Statement of Additional Information. The Portfolio's Fi-
nancial Statements have been audited by Price Waterhouse LLP whose opinion
thereon (which is unqualified) is also incorporated by reference into the
Portfolio's Statement of Additional Information. The following information
should be read in conjunction with the Portfolio's 1996 Annual Report to
Shareholders.
<TABLE>
<CAPTION>
JANUARY 23, 1996*
TO
APRIL 30, 1996
-----------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ......................... $ 10.00
-------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income+....................................... 0.02
Net Realized and Unrealized Gain on Investments.............. 0.30
-------
Total from Investment Operations............................ 0.32
-------
DISTRIBUTIONS
Net Investment Income........................................ (0.02)
-------
NET ASSET VALUE, END OF PERIOD................................ $ 10.30
=======
TOTAL RETURN.................................................. 3.20%++
=======
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands)......................... $ 3,933
Ratio of Net Expenses to Average Net Assets+.................. 2.52%**#
Ratio of Net Investment Income to Average Net Assets+......... 0.67%**
Portfolio Turnover Rate....................................... 31%
Average Commission Rate....................................... $0.0205
</TABLE>
- -------
* Commencement of Operations.
** Annualized.
+ Net of voluntarily waived fees and expenses assumed by the Adviser of $0.03
per share for the period ended April 30, 1996.
++ Total return would have been lower had certain fees not been waived and ex-
penses assumed by the Adviser.
# The Ratio of Expenses to Average Net Assets excludes the effect of expense
offsets. If expense offsets were included, the Ratio of Expenses to Average
Net Assets would be 2.50%**.
PERFORMANCE CALCULATIONS
The Portfolio measures performance by calculating total return. Total return
figures are based on historical earnings and are not intended to indicate fu-
ture performance.
Total return is the change in value of an investment in the Portfolio over a
given period, assuming reinvestment of any dividends and capital gains. A cu-
mulative or aggregate total return reflects actual performance over a stated
period of time. An average annual total return is a hypothetical rate of re-
turn that, if achieved annually, would have produced the same cumulative total
return if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same as
actual year-by-year results.
The Portfolio's performance may be compared to data prepared by independent
services which monitor the performance of investment companies, data reported
in financial and industry publications, and various indices as further de-
scribed in the Portfolio's Statement of Additional Information.
The Portfolio's Annual Report to Shareholders for the most recent fiscal
year end contains additional performance information that includes comparisons
with appropriate indices. The Annual Report is available without charge upon
request to the Fund by writing to the address or calling the phone number on
the cover of this Prospectus.
4
<PAGE>
ADVISER'S HISTORICAL PERFORMANCE
Set forth below are certain performance data provided by the Adviser per-
taining to the composite of equity accounts of tax-exempt clients of the Ad-
viser (for a list of the Adviser's current clients, see "Fund Management and
Administration"). These accounts had the same investment objective as the
Portfolio and were managed using substantially similar (though not in all
cases identical) investment strategies and techniques as those for the Portfo-
lio. The results presented are not intended to predict or suggest the return
to be experienced by the Portfolio or the return an individual investor might
achieve by investing in the Portfolio. The investment returns of the Portfolio
may differ from those of individual client accounts because, among other
things, the Portfolio's fees and expenses may differ from those of the indi-
vidual accounts. The individual client accounts are not subject to certain in-
vestment limitations, diversification requirements, and other restrictions im-
posed by the 1940 Act and Internal Revenue Code; such conditions, if applica-
ble, may have lowered the returns of the individual client accounts.
IRC LARGE CAP CORE/BENCHMARK ENHANCEMENT
(PERCENTAGE RETURNS NET OF MANAGEMENT FEES)
<TABLE>
<CAPTION>
JANUARY 1
THROUGH
DECEMBER 31 IRC S&P 500
- ----------- ------ -------
<S> <C> <C>
1989 35.97% 31.49%
1990 -1.81% -3.17%
1991 30.60% 30.55%
1992 8.28% 7.67%
1993 11.90% 9.99%
1994 3.29% 1.31%
1995 35.83% 37.56%
Annualized 16.79% 15.51%
Cumulative 196.40% 174.31%
Seven Year Mean 17.73% 16.48%
Value of $1 Invested During Seven Years, 1989-1995 $2.96 $2.74
</TABLE>
- -------------------
Notes:1. The ANNUALIZED RATE OF RETURN is calculated from monthly data, al-
lowing for compounding. The formula used is in accordance with the acceptable
methods set forth by the Association of Investment Management Research, the
Bank Administration Institute, and the Investment Counsel Association of Amer-
ica. Market value of the account was the sum of the account's total assets,
including cash, cash equivalents, short-term investments, and securities val-
ued at current market prices.
2. The CUMULATIVE RETURN means that $1 invested in the composite account on
January 1, 1989 had grown to $2.96 by December 31, 1995.
3. The SEVEN-YEAR MEAN is the arithmetic average of the annual returns for the
years listed.
4. The S&P 500 is an unmanaged index which assumes reinvestment of dividends
and is generally considered representative of U.S. large capitalization
stocks.
5. The Adviser's average annual management fee over the seven-year period
1989-1995 was 0.51%, or 51 basis points. During the period, fees on the Advis-
er's individual accounts ranged from .20% to 0.80% (that is, from 20 to 80 ba-
sis points). Net returns to investors vary depending partly on the management
fee.
5
<PAGE>
DETAILS ON INVESTMENT POLICIES
INVESTMENT STRATEGY
The investment objective of the Portfolio is to produce a total return ex-
ceeding that of the S&P 500, although there is no guarantee that this objec-
tive will be achieved.
The Portfolio's assets are invested in the stocks of some but not all of the
companies in the S&P 500 universe. The Portfolio's investment adviser uses a
mathematical model to help make the investment decisions. The objective is to
build the Portfolio whose returns will exceed those of the S&P 500. Every
three months the Adviser evaluates each stock in the S&P 500 universe for in-
clusion in the Portfolio, attempting to select the best performers, within
constraints for risk control.
The Adviser believes that institutions create the major demand for stocks,
and institutional preferences change slowly over the short term (3-6 months).
These stable preferences are therefore important determinants of the sensitiv-
ity of stock returns to various factors and combinations of factors such as
inflation and interest rates. Institutional investor preferences also depend
on individual stock attributes such as price/earnings ratios and other funda-
mentals. These preferences are identifiable, according to stock market re-
search, so today's factor values can be used to estimate the short-term per-
formance of each stock in each of 20 sectors of the S&P 500 universe relative
to other stocks in that sector.
The elements of risk control in the investment strategy are the following.
Within the Portfolio, at least 90% of the net asset value is allocated
strictly to stocks from the S&P 500 universe; the balance of 10% or less is
allocated to short-term U.S. Treasury securities (maturities of one year or
less). No hedging strategies, no financial derivatives, no futures contracts,
no repurchase agreements, and no instruments other than S&P 500 stocks and
U.S. Treasury securities are used to achieve the investment objective.
Risk control is also achieved through rebalancing and diversification. The
Portfolio is rebalanced every 90 days so its weights in each of 20 sectors of
the S&P 500 universe match the weights of the sectors in the universe itself.
Rebalancing is also done to insure that for each stock in the S&P 500 uni-
verse, the stock's percentage weight in the Portfolio matches the stock's
weight in the S&P 500, plus or minus a tolerance of approximately .80% (that
is 80 basis points). Consequently, the Portfolio is highly diversified, hold-
ing approximately 200 of the 500 stocks in the S&P 500 universe.
SHORT-TERM INVESTMENTS
In order to maintain liquidity to meet anticipated redemptions and to hold
cash received from shareholders pending investment, up to 10% of the Portfo-
lio's assets may be invested in U.S. Treasury securities with maturities of
one year or less.
PORTFOLIO TURNOVER
The Adviser seeks to maintain turnover at a low level. Every 90 days, only
the oldest one-third of the stocks (by value) in the Portfolio are considered
for trading. It is anticipated that the Portfolio's annual turnover rate will
not exceed 100% under normal circumstances. (A turnover rate of 100% would
mean that all securities in the Portfolio would be replaced within a one-year
period.) However, portfolio turnover depends to a great degree on market con-
ditions.
Portfolio turnover may result in the realization of capital gains. To the
extent that net short-term capital gains are realized, any distributions re-
sulting from such gains are considered ordinary income for federal income tax
purposes.
INVESTMENT LIMITATIONS
To help reduce the Portfolio's exposure to risk in specific situations, it
has adopted certain limitations associated with its investments and investment
practices. These policies and limitations are considered at the time of pur-
chase. The sale of instruments is not required in the event of a subsequent
change in circumstances.
The Portfolio's limitations are as follows:
(a) With respect to 75% of its assets, the Portfolio may not own more than
5% of the securities of any single issuer (other than investments issued or
guaranteed by the U.S. Government or any of its agencies or instrumentali-
ties);
(b) With respect to 75% of its assets, the Portfolio may not own more than
10% of the outstanding voting securities of any one issuer;
6
<PAGE>
(c) The Portfolio may not invest more than 5% of its assets in securities of
issuers (other than securities issued or guaranteed by the U.S. or foreign
governments or their political subdivisions) that have (with predecessors)
less than 3 years of continuous operation;
(d) The Portfolio may not invest more than 25% of its assets in companies
within a single industry; however, there are no limitations on investments
made in instruments issued or guaranteed by the U.S. government and its agen-
cies;
(e) The Portfolio may not make loans except by purchasing debt securities in
accordance with its investment objective and policies or by lending its port-
folio securities to banks, brokers, dealers or other financial institutions as
long as the loans are made in compliance with the Investment Company Act of
1940, as amended, or the rules, regulations and interpretations of the Commis-
sion;
(f) The Portfolio may not borrow except from banks in extraordinary circum-
stances for temporary or emergency purposes. In this situation, the Portfolio
may not (1) borrow more than 33 1/3% of its gross assets and (2) cannot buy
additional securities if it borrows more than 5% of its total assets; and
(g) The Portfolio may not pledge, mortgage or hypothecate more than 33 1/3%
of its total assets at fair market value.
The Portfolio's investment objective and investment limitations (a), (b),
(d), (e) and (f.1) listed above are fundamental policies and may be changed
only with the approval of the holders of a majority of the outstanding voting
securities of the Portfolio. The other investment limitations described here
and those not specified as fundamental in the Statement of Additional Informa-
tion as well as the Portfolio's investment policies are not fundamental and
the Fund's Board of Trustees may change them without shareholder approval.
PORTFOLIO TRANSACTIONS
The Portfolio's Investment Advisory Agreement authorizes the Adviser to se-
lect the brokers or dealers that will execute the purchases and sales of in-
vestment securities for the Portfolio. The Agreement directs the Adviser to
use its best efforts to obtain the best available price and most favorable ex-
ecution for all the Portfolio's transactions.
It is not the Fund's practice to allocate brokerage or effect principal
transactions with dealers 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.
Some securities considered for investment by the Portfolio may also be ap-
propriate for other clients served by the Adviser. If a purchase or sale of
securities is 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 fair and reasonable manner. Although there is no
specified formula for allocating such transactions, the various allocation
methods used by the Adviser, and the result of such allocations, are subject
to periodic review by the Fund's Board of Trustees.
BUYING, SELLING AND EXCHANGING SHARES
Shares of the Portfolio are offered through UAM Fund Distributors, Inc. to
investors at net asset value without a sales commission. The required minimum
initial investment for the Portfolio is $2,500, with certain exceptions deter-
mined from time to time by the Officers of the Fund. The minimum for subse-
quent investments is $100.
Shares of the Portfolio may be purchased by customers of broker-dealers or
other financial intermediaries ("Service Agents") which have established a
shareholder servicing relationship with the Fund on behalf of their customers.
Service Agents may impose additional or different conditions or other account
fees on the purchase and redemption of Portfolio shares. Each Service Agent is
responsible for transmitting to its customers a schedule of any such fees and
information regarding any additional or different conditions regarding pur-
chases and redemptions. Shareholders who are customers of Service Agents
should consult their Service Agent for information regarding these fees and
conditions. Amounts paid to Service Agents may include transaction fees and/or
service fees paid by the Fund from the Fund assets attributable to the Service
Agent, and would not be imposed if shares of the Portfolio were purchased di-
rectly from the Fund or the Distributor. The Service Agents may provide share-
holder services to their customers that are not available to a shareholder
dealing directly with the Fund. A salesperson and any other person entitled to
receive compensation for selling or servicing Portfolio shares may receive
different compensation with respect to one particular class of shares over an-
other in the Fund.
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Service Agents may enter confirmed purchase orders on behalf of their cus-
tomers. If you buy shares of the Portfolio in this manner, the Service Agent
must receive your investment order before the close of trading on the New York
Stock Exchange ("NYSE"), and transmit it to the Fund's Sub-Transfer Agent,
(prior to the close of the Sub-Transfer Agent's business day) and to the Dis-
tributor to receive that day's share price. Proper payment for the order must
be received by the Sub-Transfer Agent no later than the time when the Portfo-
lio is priced on the following business day. Service Agents are responsible to
their customers, the Fund and its Distributor for timely transmission of all
subscription and redemption requests, investment information, documentation
and money.
HOW TO BUY SHARES BY MAIL
If you have not invested in this Portfolio before, you will have to fill out
an Account Registration Form, which can be obtained by calling the Fund at 1-
800-638-7983. Once you have filled out the information on the form, please re-
move the carbon, separate the two copies and sign both. We require an original
signature on both forms. Mail one copy, along with a check payable to UAM
Funds Trust, to:
UAM Funds Trust
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
Mail the other copy, without the check, to:
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
To make additional investments to an account you have already established,
simply mail your check to the UAM Funds Service Center at the address above.
Make sure that your account number, account name, and the name of the Portfo-
lio are clearly indicated on the check so that we can properly credit your ac-
count.
For both initial and additional investments, your funds will be credited to
your account at the next share price calculated for the Portfolio after re-
ceipt. Investments received by 4 p.m. Eastern Time will be invested at the
share price calculated after the market closes on the same day. (For example,
if your check arrives on Tuesday morning, you will purchase shares at the
price calculated after the market close on Tuesday.)
HOW TO BUY SHARES BY WIRE
To make an initial investment by wire, you must first telephone the Fund at
1-800-638-7983. A representative will then ask you to provide the account num-
ber from which you plan to wire the funds, the bank or financial institution,
its address, phone number and your social security or taxpayer identification
number. You will then tell the representative which Portfolio you wish to in-
vest in, how much you want to invest and which bank is wiring the funds. The
representative will then provide you with an account number and a wire control
number. Please write it down and keep it for your records.
Once you have an account number, call your bank and instruct them to wire a
specified amount to the Fund's custodian, The Chase Manhattan Bank ("Custodian
Bank"). You will be asked to provide the following information:
The Chase Manhattan Bank
ABA #021000021
UAM Funds
Credit DDA #9102772952
(Your Account Registration)
(Your Account Number)
(Wire Control Number)
After you have instructed the bank to wire the money, you must forward a
completed Account Registration Form to the UAM Funds Service Center as soon as
possible. You can obtain forms by calling the UAM Funds Service Center at 1-
800-638-7983. Federal Funds purchases will be accepted only on days when the
NYSE and the Custodian Bank are open for business.
Once you have made the initial purchase, you may buy additional shares by
wire at any time by following the instructions above. On all wired purchases,
funds will be invested at the share price calculated after the next market
close.
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IN-KIND PURCHASES
Under certain circumstances, investors who own securities may be able to ex-
change them directly for shares of the Portfolio without converting their in-
vestments into cash first. The Portfolio will accept such in-kind purchases
only if the securities offered for exchange meet the Portfolio's investment
criteria which are set forth in the "Details on Investment Policies" section
of this Prospectus. Once accepted, the shares will be valued according to the
process described in "How Share Prices are Determined" at the same time the
Portfolio's shares are valued. Once a value has been determined for both, an
exchange will be made. All dividends, interest, subscription, or other rights
pertaining to these securities become the Fund's property; if you receive any
such items, you must deliver them to the Fund immediately. Securities acquired
by the Portfolio through an in-kind purchase will be acquired for investment
and not for immediate resale.
The Fund will not accept securities for exchange unless they meet the fol-
lowing criteria:
. The securities are eligible to be included in the Portfolio and market
quotes can readily be obtained for them, e.g., as evidenced by a listing
on the American Stock Exchange, NYSE or NASDAQ.
. The investor assures the Fund that the securities are not subject to any
restrictions under the Securities Act of 1933 or any other law or regu-
lation.
. The value of the securities exchanged does not increase the Portfolio's
position in any specific issuer's security to more than 5% of the Port-
folio's total net assets.
HOW TO SELL SHARES
You may sell shares by telephone or mail at any time, free of charge. Your
shares will be valued at the next price calculated after we receive your in-
structions to sell.
BY MAIL
To redeem by mail, include
. your share certificates, if we have issued them to you;
. a letter which tells us how many shares you wish to redeem or, alterna-
tively, what dollar amount you wish to receive;
. a signature guaranteed by your bank, broker or other financial institu-
tion (see "Signature Guarantees" below); and
. any other necessary legal documents, in the case of estates, trusts,
guardianships, custodianships, corporations, pension and profit-sharing
plans and other organizations.
If you are not sure of which documents to send, please contact the UAM Funds
Service Center at 1-800-638-7983.
BY TELEPHONE
To redeem shares by telephone, you must have completed an Account Registra-
tion Form and returned it to the Fund. Once this form is on file, simply call
the Fund and request the redemption amount to be mailed to you or wired to
your bank. The Fund and the Fund's Transfer Agent will employ reasonable pre-
cautions to make sure that the instructions communicated by telephone are gen-
uine, and they may be liable for any losses if they fail to do so. You will be
asked to provide certain personal identification when you open an account, and
again, when you request a telephone redemption. In addition, all telephone
transaction requests will be recorded and investors may be required to provide
additional telecopied written instructions of such transaction requests. Nei-
ther the Fund nor the Transfer Agent will be responsible for any loss, addi-
tional cost or expense for following instructions received by telephone that
it reasonably believes are genuine. To change the name of the commercial bank
or the account designated to receive redemption proceeds, a written request
must be sent to the Fund at the address on the cover of this Prospectus. Re-
quests to change the bank or account must be signed by each shareholder and
each signature must be guaranteed. You cannot redeem shares by telephone if
you hold stock certificates for these shares. Please contact one of the Fund's
representatives at 1-800-638-7983 for further details.
9
<PAGE>
SIGNATURE GUARANTEES
To protect your account, the Fund and the Fund's Transfer Agent from fraud,
signature guarantees are required for certain redemptions. Signature guaran-
tees are used to verify that the person who authorizes a redemption is, in
fact, the registered shareholder. They are required whenever you:
. redeem shares and request that the proceeds be sent to someone other
than the registered shareholder(s) or to an address which is not the
registered address; or
. transfer shares from one Portfolio to another.
Signatures must be guaranteed by an "eligible guarantor institution" as de-
fined in Rule 17Ad-15 under the Securities Exchange Act of 1934. (The UAM
Funds Service Center can provide you with a full definition of the term.) You
can obtain a signature guarantee at almost any bank as well as through most
brokers, dealers, credit unions, national securities exchanges, registered se-
curities associations, clearing agencies and savings associations. 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 el-
igible guarantor institution which participates in a signature guarantee pro-
gram. A notary public can not provide a signature guarantee.
The signature guarantee must appear either:
. on the written request for redemption; or
. on a separate instrument for assignment (a "stock power") which should
specify the total number of shares to be redeemed; or
. on all stock certificates tendered for redemption, and, if shares held
by the Fund are also being redeemed, then on the letter or stock power.
FURTHER INFORMATION ON SELLING SHARES
Normally, the Fund will make payment for all shares sold under this proce-
dure within one business day after we receive a request. In no event will pay-
ment be made more than seven days after receipt of a redemption (sale) request
in good order. The Fund may suspend the right of redemption or postpone the
date at times when either the NYSE and Custodian Bank are closed or under any
emergency circumstances as determined by the Securities and Exchange Commis-
sion (the "Commission").
If the Fund's Board of Trustees determines that it would be detrimental to
the best interests of the remaining shareholders of the Fund to make payments
wholly or partly in cash, the Fund may pay the redemption proceeds in whole or
in part by a distribution in-kind of liquid securities held by the Portfolio
instead of cash in conformity with applicable rules of the Commission. Invest-
ors may incur brokerage charges when they sell portfolio securities received
in payment of redemptions.
TO EXCHANGE SHARES
You may exchange Institutional Class Shares of the Portfolio for any other
Institutional Class Shares of a Portfolio included in 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 this Prospectus.) When you
exchange shares you sell your old shares and buy new ones, both at the price
calculated after the next market close. There is no sales charge for ex-
changes. Exchange requests may be made by phone or letter. Telephone exchanges
may be made only if the Fund holds all share certificates and if the registra-
tion of the two accounts is identical. Telephone exchanges received before 4
p.m. Eastern Time will be processed at the share price set after the market
close the same day. Exchanges received after 4 p.m. Eastern Time will be exe-
cuted at the share price determined at the market close the following day. For
additional information regarding responsibility for the authenticity of tele-
phoned transaction instructions, see "How to Sell Shares--By Telephone" above.
The exchange privilege is only available with respect to Portfolios that are
registered for sale in a shareholder's state of residence.
Neither the Fund nor the Fund's Transfer Agent will take responsibility for
ensuring it is indeed the shareholder issuing the exchange orders; however, we
may use some of the precautions described above for selling shares. The Fund
may also limit both the frequency and the amount of exchanges permitted if it
is in the interest of the Fund's shareholders.
Please review a Portfolio's investment objective before shifting money into
it. Make sure its objective and strategies fit with your long-term goals. Be-
fore exchanging into a Portfolio, read its Prospectus. You may obtain one
10
<PAGE>
for the Portfolio(s) you are interested in by calling the UAM Funds Service
Center at 1-800-638-7983. Remember, every time you exchange shares of one
Portfolio for another, your transaction is counted as a sale of the first se-
curity and a purchase of the second. As a result, you may incur a tax liabil-
ity by exchanging shares if your investment has appreciated since you bought
it. Consult your tax adviser to determine your liability for capital gains
taxes.
HOW SHARE PRICES ARE DETERMINED
We calculate the value of each share of the Portfolio every day that the
NYSE is open. This means that shares are valued after the market close, gener-
ally at 4 p.m. Eastern Time on Monday through Friday, except for major holi-
days when the NYSE is closed.
To determine how much each share is worth, we add up the total market value
of all the securities in the Portfolio plus cash and other assets, deduct lia-
bilities and then divide by the total number of shares outstanding.
For stocks, we use the last quoted trading price as the market value. For
listed stocks, we use the price quoted by the exchange on which the stock is
primarily traded. Unlisted stocks and listed stocks which have not been traded
on the valuation date or for which market quotations are not readily available
are valued at a price between the last price asked and the last price bid.
The value of other assets and securities for which no quotations are readily
available (including restricted securities) is determined in good faith at
fair value using methods determined by the Fund's Board of Trustees.
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
DIVIDENDS
Stocks generate (for tax purposes) income in the form of dividends. The
Portfolio will normally distribute substantially all of its net investment in-
come from its investments, as well as any interest earned from short-term in-
vestments, to shareholders in the form of quarterly dividends. You must in-
struct the Portfolio to pay out dividends and distributions in cash to you or
to reinvest them. The Account Registration Statement Form has a box for your
instructions. Unless you specifically tell us to distribute dividend and other
income in cash, however, we will assume you want this income reinvested. By
law, you must pay taxes on any dividend you receive on your investments
whether distributed in cash or reinvested in shares. The Portfolio will send
you a statement annually telling you exactly how much dividend income you have
earned for tax purposes.
CAPITAL GAINS
Capital gains are another source of appreciation to the Portfolio. Basical-
ly, a gain is an increase in the value of a stock or bond. However, for tax
purposes, you do not need to "realize" capital gains unless you sell the stock
or bond which has appreciated.
You can incur capital gains in two ways. First, if the Portfolio buys a
stock or bond at one price, then sells it at a higher price, it will realize a
capital gain. At the end of the year, the capital gains computed under tax
rules that the Portfolio has made are added up and capital losses are sub-
tracted. The total is then divided by the number of shares outstanding. If any
net capital gains are realized, the Portfolio will normally distribute such
gains annually. You will receive a statement at the end of the year informing
you of your share of the Portfolio's capital gains.
The second way to incur capital gains is to sell or exchange your shares. If
you sell shares at a higher price than you bought them at, you will be respon-
sible for paying taxes on your gain. There are several ways to determine your
tax liability, and we suggest you contact a qualified tax adviser to help you
decide which is best for you.
TAXES
The Portfolio intends to qualify each year as a "regulated investment compa-
ny" under Federal tax law, and if it qualifies, the Portfolio will not be lia-
ble for Federal income taxes, because it will have distributed all its net in-
vestment income and net realized capital gains to shareholders. Shareholders
will then have to pay taxes on the dividends, and on gains whether they are
distributed as cash or are reinvested in shares. Dividends and short-term cap-
ital gains will be taxed as ordinary income. Long-term capital gains distribu-
tions are taxed as long-term capital gains.
Dividends declared in October, November and December to shareholders of rec-
ord in such a month will be treated as if they had been paid by the Fund and
received by the shareholders on December 31 of the same calendar year, pro-
vided that the dividends are paid before February of the following year.
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<PAGE>
The Fund is required by Federal law to withhold 31% of reportable payments
(which may include dividends, capital gains distributions and redemptions)
paid to shareholders who have not complied with IRS regulations. In order to
avoid this withholding requirement, you must certify on the Account Registra-
tion Form or on a separate form supplied by the Fund that your Social Security
or Taxpayer Identification Number you have provided is correct and that you
are not currently subject to backup withholding or that you are exempt from
backup withholding.
FUND MANAGEMENT AND ADMINISTRATION
The investment adviser to the Portfolio is Investment Research Company lo-
cated at 16236 San Dieguito Road, Rancho Sante Fe, California 92067. The Ad-
viser is a wholly-owned subsidiary of United Asset Management Corporation
("UAM") and provides investment management services to corporations, state
governments, labor unions, mutual funds, and individuals.
The Portfolio pays an annual fee in monthly installments to the Adviser for
advisory services. This fee is accrued daily and paid monthly as a percentage
of the average net assets in the Portfolio for that month. The percentage fee
on an annual basis is 0.70%.
The Adviser may compensate its affiliated companies for referring investors
to the Portfolio. The Distributor, UAM, the Adviser, or any of their affili-
ates, may, at its own expense, compensate a Service Agent or other person for
marketing, shareholder servicing, record-keeping and/or other services per-
formed with respect to the Fund, a Portfolio or any Class of Shares of a Port-
folio. The person making such payments may do so out of its revenues, its
profits or any other source available to it. Such services arrangements, when
in effect, are made generally available to all qualified service providers.
The Distributor, the Adviser and certain of their other affiliates also par-
ticipate, at the date of this Prospectus, in an arrangement with Smith Barney
Inc. under which Smith Barney provides certain defined contribution plan mar-
keting and other shareholder services and receives from such entities .15 of
1% of the daily net asset value of Institutional Class Shares held by Smith
Barney's eligible customer accounts in addition to amounts payable to all
selling dealers. The Fund also compensates Smith Barney for services it pro-
vides to certain defined contribution plan shareholders that are not otherwise
provided by the Administrator.
As of the date of this Prospectus, the Adviser had approximately $2.0 bil-
lion in assets under management. The Adviser's clients at that date included
[Chevron Corporation, Ameritech Corporation, Energen Corporation, Lockheed
Martin Corporation, Minnesota Mining and Manufacturing, and Shell Oil Company
(corporations); Bricklayers Pension Trust--Metropolitan Area Detroit, Oregon
Retail Pension Trust Fund, Bricklayers Local #21 Pension Fund, Intermountain
Ironworkers Pension Trust Fund, Retail Clerks Pension Trust Fund, and United
Food and Commercial Workers (Taft Hartley clients); Louisiana Municipal Em-
ployees' Retirement System, Oregon Public Employees' Retirement System, and
Virginia Retirement System (states); and Cologne Reinsurance, Hawaii Medical
Service Associations, Medical Malpractice of New York (insurance); and Lincoln
Community Foundation (Foundation).
It is not known whether the listed clients approve or disapprove of the Ad-
viser or the advisory services provided. The Adviser used objective criteria
in compiling the client list, such as account size, geographic location and
client classification. The Adviser did not use any performance based criteria.
THE INVESTMENT ADVISER
The following paragraphs describe the background of the Adviser's officers
who are principally involved in managing the Portfolio.
F.J. (JERRY) GOULD, PH.D., PRESIDENT AND CEO: Principal, Investment Research
Company, responsible for coordination of all aspects of IRC activity, with
particular emphasis on performance, product research, new strategy development
and client relations. The Hobart W. Williams Professor of Applied Mathematics
and Management Science, Graduate School of Business at the University of Chi-
cago, Mr. Gould has been a consultant in financial markets as well as a port-
folio manager and trader in futures and equities for over 20 years. Mr. Gould
is an investment committee member of the American Association of University
Professors and also holds memberships in the American Finance Association, The
American Economic Association, The Journal of Portfolio Management, the Opera-
tions Research Society of America, The Institute of Management Science and the
Society for Industrial and Applied Mathematics. He has been a registered CPO
and CTA, and while a member of the Statistics Department at the University of
North Carolina, Chapel Hill, was the first Chairman of the Curriculum in Oper-
ations Research and Systems Analysis. Mr. Gould has authored five books, pub-
lished over 80 papers in professional journals, and is a contributor of arti-
cles appearing in the Wall Street Journal as well as other news publications.
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C.B. (TOM) GARCIA, PH.D., SENIOR VICE PRESIDENT AND DIRECTOR OF
RESEARCH: Principal, Investment Research Company, responsible for implementa-
tion and management of all IRC computer strategies, in-house software develop-
ment, data systems and new product testing. A Professor of Management Science
at the Graduate School of Business, University of Chicago for sixteen years,
Mr. Garcia has done extensive research on mathematical programming, complemen-
tarity theory, fixed point approximations, nonlinear equations and equilibrium
and game theory. With his expertise in computer applications and systems de-
sign, Mr. Garcia has also been an active consultant in the area of pension
fund administration. Mr. Garcia holds memberships in the Operations Research
Society of America, The Institute of Management Science, the Society for In-
dustrial and Applied Mathematics, the Mathematical Programming Society of
America and the American Association of University Professors, and has pub-
lished over 30 papers in professional journals as well as authored and edited
several books.
DAVID H. ZELLNER, SENIOR VICE PRESIDENT: Mr. Zellner is responsible for the
day-to-day operations involving the implementation and administration of cli-
ent portfolios. These responsibilities include trading, back office record
keeping, performance accounting, and liaison with clients and custodial banks.
Additionally, Mr. Zellner assists the investment team in product design and
enhancements. He received his MBA in Finance from the University of Houston in
1979 and was awarded the CMA (Certified Management Accountant) designation in
1981. Prior to joining IRC in October, 1994, Mr. Zellner had been employed by
Shell Oil Company for 17 years. His most recent assignment was that of Direc-
tor of Equity Investments for the $10 billion Shell Retirement Plans. In this
position, Mr. Zellner was responsible for assembling a diversified portfolio
of equity managers. Additionally, he designed and managed two internal portfo-
lios: one using a fundamental growth strategy and one using a quantitative
value strategy. Mr. Zellner has delivered formal presentations at numerous
professional conferences. Topics have included: efficient trading techniques,
equity style management, and using derivatives in international portfolios.
THE ADMINISTRATOR
Pursuant to a Fund Administration Agreement dated April 15, 1996, UAM Fund
Services, Inc. ("UAMFSI") a wholly-owned subsidiary of United Asset Management
Corporation with its principal office located at 211 Congress Street, Boston,
MA 02110, is responsible for performing and overseeing administration, fund
accounting, dividend disbursing and transfer agency services provided to the
Fund and its Portfolios. UAMFSI has subcontracted the performance of certain
of such services to Chase Global Funds Services Company ("CGFSC"), an affili-
ate of The Chase Manhattan Bank, pursuant to a Mutual Funds Service Agreement
dated April 15, 1996. CGFSC is located at 73 Tremont Street, Boston, MA 02108-
3913. Effective April 1, 1996, The Chase Manhattan Corporation, the parent of
The Chase Manhattan Bank merged with and into Chemical Banking Corporation,
the parent company of Chemical Bank. Chemical Banking Corporation is the sur-
viving corporation and will continue its existence under the name "The Chase
Manhattan Corporation".
Each Portfolio pays to UAMFSI a monthly fee comprised of two parts: a Port-
folio-specific fee which is retained by UAMFSI and a sub-administration fee
which UAMFSI in turn pays to CGFSC. The Portfolio-specific fee for the IRC En-
hanced Index Portfolio is 0.04% of aggregate net assets. The sub-administra-
tion fee calculated on an annualized basis equals: 0.19 of 1% of the first
$200 million of total net assets of the Fund; 0.11 of 1% of the next $800 mil-
lion of total net assets of the Fund; 0.07 of 1% of total net assets in excess
of $1 billion but less than $3 billion; and 0.05 of 1% of total net assets in
excess of $3 billion. The sub-administration fees are allocated among the
Portfolios on the basis of their relative assets and are subject to a gradu-
ated minimum fee schedule per Portfolio of $2,000 per month upon inception of
a Portfolio to $70,000 annually after two years. If a separate class of shares
is added to a Portfolio, the minimum annual fee payable by that Portfolio may
be increased by up to $20,000.
THE DISTRIBUTOR
UAM Fund Distributors, Inc., a wholly-owned subsidiary of UAM with its prin-
cipal office located at 211 Congress Street, Boston, Massachusetts 02110, dis-
tributes the shares of the Fund. Under the Fund's Distribution Agreement (the
"Agreement"), the Distributor, as agent of the Fund, agrees to use its best
efforts as sole distributor of the Fund's shares. The Distributor does not re-
ceive any fee or other compensation under the Agreement with respect to the
Portfolio. The Agreement continues in effect as long as the Fund's Board of
Trustees, including a majority of the Trustees who are not parties to the
Agreement or interested persons of any such party, approve it on an annual ba-
sis. This Agreement provides that the Fund will bear the costs of the regis-
tration of its shares with the Commission and various states and the printing
of its prospectuses, statements of additional information and reports to
shareholders.
CUSTODIAN
The Chase Manhattan Bank serves as custodian of the Fund's assets.
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ACCOUNTANTS
Price Waterhouse LLP acts as the independent accountants for the Fund and
audits its financial statements annually.
SUB-ADMINISTRATOR, SUB-TRANSFER AND SUB-DIVIDEND DISBURSING AGENT
Chase Global Funds Services Company, 73 Tremont Street, Boston, MA 02108,
acts as sub-administrator, sub-transfer agent and sub-dividend disbursing
agent for the Fund.
REPORTS
Investors will receive unaudited semi-annual financial statements and annual
financial statements audited by Price Waterhouse LLP.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be made by writing to the Fund at the address
listed on the cover of this Prospectus or by calling 1-800-638-7983.
LITIGATION
The Fund is not involved in any litigation.
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GENERAL FUND INFORMATION
The Portfolio is one of a series of investment portfolios available through
UAM Funds Trust, an open-end investment company known as a "mutual fund." Each
of the Portfolios which make up the Fund have different investment objectives
and policies. Together, the Portfolios offer a diverse set of risk and return
characteristics to suit a wide range of investor needs. The Fund was organized
under the name "The Regis Fund II" on May 18, 1994 as a Delaware business
trust. On October 31, 1995, the name was changed to "UAM Funds Trust."
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Officers of the Fund manage its day-to-day operations and are responsi-
ble to the Fund's Board of Trustees. The Trustees set broad policies for the
Fund and elect its Officers.
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 sharehold-
ers.
The shares of each Portfolio and class have noncumulative voting rights,
which means that the holders of more than 50% of the shares voting for the
election of Trustees can elect 100% of the Trustees if they choose to do so. A
shareholder is entitled to one vote for each full share held (and a fractional
vote for each fractional share held), then standing in his name on the books
of the Fund. As of July 31, 1996, Hartnat & Co., Boston, MA held of record 42%
of the outstanding shares of the IRC Enhanced Index Portfolio Institutional
Class Shares for which ownership is disclaimed or presumed disclaimed. The
persons or organizations 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. Both Institutional
Class and Institutional Service Class Shares represent an interest in the same
assets of a Portfolio and are identical in all respects except that the Insti-
tutional Service Class Shares bear certain expenses related to shareholder
servicing, may bear expenses related to the distribution of such shares and
have exclusive voting rights with respect to matters relating to such distri-
bution expenditures. Information about the Service Class Shares of the Portfo-
lios along with the fees and expenses associated with such shares is available
upon request by contacting the Fund at 1-800-638-7983. The Fund will not ordi-
narily hold shareholder meetings except as required by the Investment Company
Act of 1940, as amended, and other applicable laws. The Fund has undertaken
that its Trustees will call a meeting of shareholders if such a meeting is re-
quested in writing by the holders of not less than 10% of the outstanding
shares of the Fund. To the extent required by the undertaking, the Fund will
assist shareholder communications in such matters.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR IN THE PORTFOLIO'S
STATEMENT OF ADDITIONAL INFORMATION IN CONNECTION WITH THE OFFERING MADE BY
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR ITS REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFERING BY THE FUND IN ANY JURISDICTION IN WHICH SUCH
OFFERING MAY NOT BE LAWFULLY MADE.
15
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UAM FUNDS -- INSTITUTIONAL CLASS SHARES
ACADIAN ASSET MANAGEMENT, INC.
Acadian Emerging Markets Portfolio
Acadian International Equity Portfolio
BARROW, HANLEY, MEWHINNEY & STRAUSS, INC.
BHM&S Total Return Bond Portfolio
CHICAGO ASSET MANAGEMENT COMPANY
Chicago Asset Management Value/Contrarian Portfolio
Chicago Asset Management Intermediate Bond Portfolio
COOKE & BIELER, INC.
C&B Balanced Portfolio
C&B Equity Portfolio
C.S. MCKEE & COMPANY, INC.
McKee U.S. Government Portfolio
McKee Domestic Equity Portfolio
McKee International Equity Portfolio
DEWEY SQUARE INVESTORS CORPORATION
DSI Disciplined Value Portfolio
DSI Limited Maturity Bond Portfolio
DSI Money Market Portfolio
FIDUCIARY MANAGEMENT ASSOCIATES, INC.
FMA Small Company Portfolio
INVESTMENT COUNSELORS OF MARYLAND, INC.
ICM Equity Portfolio
ICM Fixed Income Portfolio
ICM Small Company Portfolio
INVESTMENT RESEARCH COMPANY
IRC Enhanced Index Portfolio
MURRAY JOHNSTONE INTERNATIONAL LTD.
MJI International Equity Portfolio
NEWBOLD'S ASSET MANAGEMENT, INC.
Newbold's Equity Portfolio
NWQ INVESTMENT MANAGEMENT COMPANY
NWQ Balanced Portfolio
NWQ Value Equity Portfolio
RICE, HALL JAMES & ASSOCIATES
Rice, Hall James Small Cap Portfolio
SIRACH CAPITAL MANAGEMENT, INC.
Sirach Equity Portfolio
Sirach Fixed Income Portfolio
Sirach Growth Portfolio
Sirach Short-Term Reserves Portfolio
Sirach Special Equity Portfolio
Sirach Strategic Balanced Portfolio
SPECTRUM ASSET MANAGEMENT, INC.
SAMI Preferred Stock Income Portfolio
Enhanced Monthly Income Portfolio
STERLING CAPITAL MANAGEMENT COMPANY
Sterling Partners' Balanced Portfolio
Sterling Partners' Equity Portfolio
Sterling Partners' Short-Term Fixed Income Portfolio
THOMPSON, SIEGEL & WALMSLEY, INC.
TS&W Equity Portfolio
TS&W Fixed Income Portfolio
TS&W International Equity Portfolio
16
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UAM FUNDS
UAM FUNDS SERVICE CENTER
C/O CHASE GLOBAL FUNDS SERVICES COMPANY
P.O. BOX 2798
BOSTON, MA 02208-2798
1-800-638-7983
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MJI INTERNATIONAL EQUITY PORTFOLIO
INSTITUTIONAL CLASS SHARES
INVESTMENT ADVISER: MURRAY JOHNSTONE INTERNATIONAL LTD.
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PROSPECTUS -- AUGUST 28, 1996
MJI International Equity Portfolio is one of a series of investment portfo-
lios available through UAM Funds Trust (hereinafter defined as "UAM Funds" or
the "Fund"), an open-end investment company known as a "mutual fund." Each of
the Portfolios that make up the Fund have different investment objectives and
policies. In addition, several of the Fund's Portfolios offer two separate
classes of shares: Institutional Class Shares and Institutional Service Class
Shares. MJI International Equity Portfolio currently offers two classes of
shares. The securities offered in this Prospectus are Institutional Class
Shares of one diversified, no-load Portfolio of the Fund managed by Murray
Johnstone International Ltd.
The MJI International Equity Portfolio seeks to maximize total return, in-
cluding both capital appreciation and current income, by investing primarily
in the common stocks of companies based outside of the United States. Under
normal circumstances, at least 65% of the Portfolio's total assets will be in-
vested in securities of issuers domiciled in at least three countries other
than the United States. There can be no assurance that the Portfolio will
achieve its stated objective.
Please keep this Prospectus for future reference, since it contains informa-
tion that you should understand before you invest. You may also wish to review
the MJI Portfolio's "Statement of Additional Information," dated August 28,
1996 which was filed with the Securities and Exchange Commission and has been
incorporated by reference into this Prospectus. (It is legally considered to
be a part of this Prospectus). Please call or write the Fund at the above ad-
dress to obtain a free copy of this Statement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COM- MIS-
SION PASSED UPON THE ACCURACY OF THIS PROSPECTUS. ANY REPRESEN-
TATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Fees and Expenses.......................................................... 1
Summary: About the Portfolio............................................... 2
Risk Factors............................................................... 2
Financial Highlights....................................................... 3
Performance Calculations................................................... 3
Details on Investment Policies............................................. 4
Investment Limitations..................................................... 9
Buying, Selling and Exchanging Shares...................................... 10
How Share Prices are Determined............................................ 14
Dividends, Capital Gains Distributions and Taxes........................... 14
Fund Management and Administration......................................... 15
General Fund Information................................................... 17
UAM Funds -- Institutional Class Shares.................................... 18
</TABLE>
<PAGE>
FEES AND EXPENSES
Investors will be charged various fees and expenses incurred in managing the
MJI International Equity Portfolio (the "Portfolio") including:
SHAREHOLDER TRANSACTION EXPENSES: These are the costs entailed in buying,
selling or exchanging shares of the Portfolio. The Portfolio does not charge
investors for shareholder transaction expenses. However, transaction fees may
be charged if you are a customer of a broker-dealer or other financial inter-
mediary who has established a shareholder servicing relationship with the Fund
on behalf of their customers. Please see "Buying, Selling and Exchanging
Shares" for further information.
<TABLE>
<S> <C>
Sales Load Imposed on Purchases:........................................ NONE
Sales Load Imposed on Reinvested Dividends:............................. NONE
Deferred Sales Load:.................................................... NONE
Redemption Fees:........................................................ NONE
Exchange Fees:.......................................................... NONE
</TABLE>
ANNUAL FUND OPERATING EXPENSES: These expenses, which cover the cost of ad-
ministration, marketing and shareholder communication, and are usually quoted
as a percentage of net assets, are factored into the Portfolio's share price
and not billed directly to shareholders. They include:
<TABLE>
<S> <C>
Investment AdvisoryFees:............................................ 0.75 %
Administrative Fees:................................................ 1.07 %
12b-1 Fees:......................................................... NONE
Other Expenses:..................................................... 1.35 %
Advisory Fees Waived and Expenses Assumed:.......................... (1.65)%
-----
Total Operating Expenses (After Fee Waiver and Expenses Assumed):... 1.52 %*
</TABLE>
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* Absent the fees waived and expenses assumed by the Adviser, annualized Total
Operating Expenses of the Portfolio would be 3.17%. The annualized Total Op-
erating Expenses excludes the effect of expense offsets. If expense offsets
were included, annualized Total Operating Expenses of the Portfolio would be
1.50%. Murray Johnstone International Ltd. has voluntarily agreed to waive
all or a portion of its advisory fees and to assume operating expenses oth-
erwise payable by the Portfolio, if necessary, in order to keep the Portfo-
lio's total annual operating expenses (excluding interest, taxes and ex-
traordinary expenses) from exceeding 1.50% of average daily net assets until
further notice. The Adviser will not be reimbursed by the Fund for any advi-
sory fees which are waived or expenses which the Adviser may bear on behalf
of the Portfolio.
The expenses and fees set forth above are based on the Portfolio's Institu-
tional Class Shares operations during the fiscal year ended April 30, 1996,
except that they have been restated to reflect current administrative fees
(see "Fund Management and Administration") and Advisory Fees Waived and Ex-
penses Assumed have been restated to reflect the Portfolio's Institutional
Class Shares current expense cap.
Investors can get a better idea of how the Portfolio's operating expenses
will affect their own investments by examining the following chart. The chart
shows how much a hypothetical investor would pay in expenses, assuming that he
or she made an initial investment of $1,000, earned a 5% annual rate of return
and redeemed his or her investment at the end of the time period indicated.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Expenses:.................................... $15 $48 $83 $181
</TABLE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EX-
PENSES OR PERFORMANCE. ACTUAL EXPENSE MAY BE GREATER OR LESSER THAN THOSE
SHOWN ABOVE.
1
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SUMMARY: ABOUT THE PORTFOLIO . . .
OBJECTIVE:
The Portfolio seeks to maximize total return, including both capital appre-
ciation and current income, by investing primarily in the common stocks of
companies based outside of the United States. Under normal circumstances, at
least 65% of the Portfolio's total assets will be invested in at least three
different countries other than the United States. There can be no assurance
that the Portfolio will achieve its stated objective.
HOW IS THE PORTFOLIO MANAGED?
The Portfolio's investment process focuses first on determining the proper
country allocation, using a proprietary system to analyze economic, stock mar-
ket and monetary policy factors in each national market. The system indicates
which markets are the most promising, and Murray Johnstone International Ltd.
(the "Adviser") decides the proportion the Portfolio should invest in each.
Then, at the stock selection level, the Adviser identifies undervalued stocks
in each market selected for investment. (See "Details on Investment Poli-
cies.")
WHO MANAGES THE PORTFOLIO?
The Adviser is an international investment adviser and is an affiliate of
the Murray Johnstone Group ("MJ Group"), in Glasgow, Scotland. The MJ Group's
origins date back to 1907, and it currently has $7 billion in assets under
management. The MJ Group has a [200]-member staff including [40] investment
professionals. It became a subsidiary of United Asset Management Corporation
in 1993. The Adviser, the SEC-registered entity within the MJ Group, has $1.4
billion of assets under management and has an U.S. office in Chicago. (See
"Fund Management and Administration.")
WHO SHOULD INVEST IN THE PORTFOLIO?
The Portfolio is suitable for investors who wish to diversify their assets
across a broad range of international markets. Like any international stock
investment, this Portfolio should be considered primarily for long-term in-
vestment by investors who are willing to tolerate short-term swings in the
value of their assets for long-term returns.
HOW TO INVEST
The Fund offers shares of beneficial interest of the Portfolio through UAM
Fund Distributors, Inc. to investors without a sales commission at net asset
value next determined after the purchase order is received in proper form.
Share purchases may be made by sending investments directly to the Fund. The
minimum initial investment in the Portfolio is $2,500 with certain exceptions
as may be determined from time to time by the officers of the Fund. The ini-
tial investment minimum for IRA accounts is $500. The initial investment mini-
mum for spousal IRA accounts is $250. The minimum for any subsequent invest-
ment is $100. (See "Buying, Selling and Exchanging Shares.")
DIVIDENDS AND DISTRIBUTIONS
The Portfolio will normally distribute substantially all of its net invest-
ment income in the form of an annual dividend. Any realized net capital gains
will also be distributed annually. Distributions will be reinvested in the
Portfolio's shares automatically unless an investor elects to receive cash
distributions. (See "Dividends, Capital Gains Distributions and Taxes.")
HOW TO REDEEM
Shares of the Portfolio may be redeemed on any business day when the New
York Stock Exchange ("NYSE") is open, without cost, at the net asset value of
the Portfolio next determined after receipt of the redemption request. The
Portfolio's share price will fluctuate with market and economic conditions.
Therefore, your investment may be worth more or less when redeemed than when
purchased. (See "Buying, Selling and Exchanging Shares.")
ADMINISTRATIVE SERVICES
UAM Fund Services, Inc. (the "Administrator"), a wholly-owned subsidiary of
United Asset Management Corporation ("UAM"), is responsible for performing and
overseeing administration, dividend disbursing and transfer agency services
provided to the Fund and its Portfolios by third-party service providers. (See
"Fund Management and Administration.")
RISK FACTORS
Prospective investors should understand that the Portfolio's performance
will be affected by a variety of factors since it participates in a large num-
ber of stock markets around the world. The value of the Portfolio's invest-
ments will vary from day to day, generally reflecting global economic and po-
litical developments, conditions in global and national markets, changes in
currency exchange rates, factors affecting individual stocks in the Portfolio
and shifts in interest rates. In addition, you should consider the following
factors that could effect the Portfolio's rate of return.
2
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. The Portfolio may invest in repurchase agreements which entail a risk of
loss should the seller default on its transaction.
. The Portfolio may lend its investment securities which entails a risk of
loss should a borrower fail financially.
. The Portfolio may purchase securities on a when-issued basis which do not
earn interest until issued and may decline or appreciate in market value
prior to their delivery to the Portfolio.
. The Portfolio may engage in various currency strategies to seek to hedge
its investments against movements in security prices, interest rates, and
exchange rates by the use of derivatives, including forward contracts,
options and futures as well as options on futures. Such strategies are
commonly referred to as "derivatives" and involve the risk of imperfect
correlation in movements in the price of options and futures and move-
ments in the price of securities, interest rates or currencies which are
the subject of the hedge. To the extent these transactions involve for-
eign securities or currencies, they are also subject to the risk factors
associated with foreign investments generally. There can be no assurance
that a liquid secondary market for these hedging techniques will exist at
any specific time.
Further information about each of the above risk factors is contained in the
"Details on Investment Policies" section of this Prospectus.
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FINANCIAL HIGHLIGHTS
The following table provides selected per share data and ratios for a share
outstanding throughout the period presented of the MJI International Equity
Portfolio Institutional Class Shares and is part of the Portfolio's Financial
Statements included in the Portfolio's 1996 Annual Report to Shareholders
which is incorporated by reference into the Portfolio's Statement of Addi-
tional Information. The Portfolio's Financial Statements have been audited by
Price Waterhouse LLP whose opinion thereon (which is unqualified) is also in-
corporated by reference into the Portfolio's Statement of Additional Informa-
tion. The following information should be read in conjunction with the Portfo-
lio's 1996 Annual Report to Shareholders.
<TABLE>
<CAPTION>
YEAR
SEPTEMBER 16, 1994** ENDED
TO APRIL 30, 1995 APRIL 30, 1996
-------------------- --------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD...... $ 10.00 $ 9.50
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income+.................... 0.04 0.07
Net Realized and Unrealized Gain (Loss) on
Investments+++........................... (0.54) 0.75
------- -------
Total from Investment Operations.......... (0.50) 0.82
------- -------
DISTRIBUTIONS
Net Investment Income..................... -- (0.00)@
In Excess of Net Investment Income........ -- (0.03)
Net Realized Gain......................... -- (0.02)
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Total Distributions....................... -- (0.05)
------- -------
NET ASSET VALUE, END OF PERIOD............ $ 9.50 $ 10.27
======= =======
TOTAL RETURN.............................. (5.00)%++ 8.67%++
======= =======
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands)..... $ 5,535 $ 8,592
Ratio of Net Expenses to Average Net As-
sets+.................................... 1.00%* 1.45%#
Ratio of Net Investment Income to Average
Net Assets+.............................. 1.49%* 0.88%
Portfolio Turnover Rate................... 81% 59%
Average Commission Rate##................. N/A $0.0316
</TABLE>
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* Annualized.
** Commencement of Operations.
+ Net of voluntarily waived fees and expenses assumed by the Adviser of
$0.13 and $0.13 per share for the periods ended April 30, 1995 and April
30, 1996, respectively.
++ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser during the periods indicated.
+++ The amount shown for the period ended April 30, 1995 for a share outstand-
ing throughout the period does not accord with the aggregate net gains on
investments for that period because of the timing of sales and repurchases
of Portfolio shares in relation to fluctuating market value of the invest-
ments of the Portfolio.
# The Ratio of Expenses to Average Net Assets excludes the effect of expense
offsets. If expense offsets were included, the Ratio of Expenses to Aver-
age Net Assets would be 1.43%.
## The Portfolio has elected to adopt the new SEC regulation requiring port-
folios with fiscal years beginning on or after September 1, 1995 to dis-
close the average commission rate paid on trades for which commissions
were charged.
@ Amount is less than $0.01 per share.
PERFORMANCE CALCULATIONS
The Portfolio measures performance by calculating total return. Total return
figures are based on historical earnings and are not intended to indicate fu-
ture performance.
Total return is the change in value of an investment in the Portfolio over a
given period, assuming reinvestment of any dividends and capital gains. A cu-
mulative or aggregate total return reflects actual performance over a stated
period of time. An average annual total return is a hypothetical rate of re-
turn that, if achieved annually, would have
4
<PAGE>
produced the same cumulative total return if performance had been constant
over the entire period. Average annual total returns smooth out variations in
performance; they are not the same as actual year-by-year results.
Performance will be calculated separately for Institutional Class and Serv-
ice Class Shares. Dividends paid by the Portfolio with respect to Institu-
tional Class and Service Class Shares, to the extent any dividends are paid,
will be calculated in the same manner at the same time on the same day and
will be in the same amount, except that service fee and any incremental trans-
fer agency costs relating to Service Class Shares will be borne exclusively by
that class.
The Portfolio's performance may be compared to data prepared by independent
services which monitor the performance of investment companies, data reported
in financial and industry publications, and various indices, all as further
described in the Portfolio's Statement of Additional Information.
The Portfolio's Annual Report to Shareholders for the most recent fiscal
year end contains additional performance information that includes comparisons
with appropriate indices. The Annual Report is available without charge upon
request to the Fund by writing to the address or calling the phone number on
the cover of this Prospectus.
DETAILS ON INVESTMENT POLICIES
INVESTMENT STRATEGY
The Portfolio's investment process begins by seeking to determine the best
possible allocation among international stock markets. The Portfolio's Adviser
evaluates markets through a proprietary system which analyzes economic fac-
tors, stock prices in each market, market performance and trends in monetary
policy. Drawing on this information, the Adviser decides which markets the
Portfolio should invest in and in what proportion.
Once the country allocation decision has been made, the Adviser selects un-
dervalued stocks in that market. The Adviser rates companies according to the
quality of their management, market position, financial strength, ability to
earn competitive returns on equity and assets, and growth potential. The Port-
folio will invest in stocks that the Adviser determines are undervalued com-
pared to industry norms within their countries. It is expected that invest-
ments will be diversified throughout the world and within markets to minimize
specific country and currency risks. While investments will be made primarily
in securities of companies domiciled in developed countries, investments will
also be made in developing countries. (See "Foreign Investment Risk Factors.")
Under normal circumstances, at least 65% of the Portfolio's total assets
will be invested in common stocks of companies in at least three countries
outside the United States. It is expected that generally, the Portfolio will
invest in common stocks of companies listed on U.S. or foreign stock ex-
changes, but it may also invest in stocks traded in the over-the-counter mar-
ket. Common stocks for this purpose also include securities having common
stock characteristics such as rights and warrants to purchase common stocks.
The Portfolio may also invest in convertible securities and preferred stocks.
The Portfolio may also invest in foreign equity securities in the form of
American Depositary Receipts (ADRs), European Depositary Receipts (EDRs) and
other similar global instruments. ADRs (sponsored or unsponsored) are receipts
typically issued by a U.S. bank or trust company evidencing ownership of the
underlying foreign securities. Most ADRs are traded on a U.S. stock exchange.
Issuers of unsponsored ADRs are not contractually obligated to disclose mate-
rial information in the U.S. and, therefore, there may not be a correlation
between such information and the market value of the unsponsored ADR. EDRs are
receipts typically issued by a European bank or trust company evidencing own-
ership of the underlying foreign securities.
FOREIGN INVESTMENT RISK FACTORS
Investors should recognize that investing in foreign securities involves
certain risks which are not typically associated with investing in domestic
securities. Since securities issued by foreign entities may be denominated in
foreign currencies, and the Portfolio may temporarily hold uninvested reserves
in bank deposits in foreign currencies, the Portfolio's value may rise or fall
depending on currency exchange rates. The Portfolio may also have to pay a fee
to convert funds from one currency to another.
In addition, non-U.S.-based companies are not subject to the same account-
ing, auditing and financial reporting standards as are domestic companies.
There may be less publicly-available information about non-U.S.-based compa-
nies which may make it difficult to make investment decisions. Also, stock
markets outside the U.S. are typically less liquid -- that is, it is more dif-
ficult to sell large quantities of a stock without driving its price down or
to buy without pushing its price up. Market regulation may be less rigorous in
some markets. Finally, political factors may have an impact in the form of
confiscatory taxation, expropriation or political instability in international
markets.
Although the Portfolio will seek the most favorable trading costs available
in any given market, investors should recognize that foreign commissions are
generally higher than those in the U.S. In addition, custodial expenses, that
is,
5
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fees paid to financial institutions for holding the Portfolio's securities,
will generally be higher than would be the case in the U.S.
Some foreign governments also levy withholding taxes against dividend and
interest income. Although in some countries a portion of the taxes is recover-
able, the non-recovered portion of foreign withholding taxes will reduce the
income the Portfolio receives from the companies comprising its investments.
Investing in the foreign securities of developing countries presents addi-
tional considerations. The economies of individual developing countries may
differ favorably or unfavorably from the United States economy in such re-
spects as growth of gross domestic product, rate of inflation, currency depre-
ciation, capital reinvestment, resource self- sufficiency and balance of pay-
ments position. Further, the economies of developing countries generally are
heavily dependent upon international trade and, accordingly, have been and may
continue to be adversely affected by trade barriers, exchange controls, man-
aged adjustments in relative currency values and other protectionist measures
imposed or negotiated by the countries with which they trade. These economies
also have been and may continue to be adversely affected by economic condi-
tions in the countries with which they trade.
With respect to any developing country, there is the possibility of nation-
alization, expropriation or confiscatory taxation, repatriation of investment
income, capital and the proceeds of sales by foreign investors, political
changes, governmental regulation, social instability or diplomatic develop-
ments (including war) which could adversely affect the economies of such coun-
tries or the value of the Portfolio's investments in those countries. In addi-
tion, it may be difficult to obtain and enforce a judgement in a court outside
of the United States.
The Portfolio may engage in various investment techniques such as futures
contracts, options on futures contracts, options, and interest rate swap
transactions. See "Other Investment Policies-Hedging and Related Strategies
and Risk Considerations" for more information on these instruments.
OTHER INVESTMENT POLICIES
The Portfolio may also, under normal circumstances, invest up to 35% of its
assets, unless restricted by additional limitations described below or in the
Portfolio's Statement of Additional Information, in the following securities,
investments or investment techniques.
SHORT-TERM INVESTMENTS
In order to earn a return on uninvested assets, meet anticipated redemp-
tions, or for temporary defensive purposes, the Portfolio may invest a portion
of its assets in domestic and foreign money market instruments including cer-
tificates of deposit, bankers acceptances, time deposits, U.S. Government ob-
ligations, U.S. Government agency securities, short-term corporate debt secu-
rities, and commercial paper rated A-1 or A-2 by Standard & Poor's Corporation
or Prime-1 or Prime-2 by Moody's Investors Service, Inc. or if unrated, deter-
mined by the Adviser to be of comparable quality.
The Fund has received an Order from the Securities and Exchange Commission
(the "Commission") for permission to deposit the daily uninvested cash bal-
ances of the Fund's Portfolios, as well as cash for investment purposes, into
one or more joint accounts and to invest the daily balance of the joint ac-
counts in the following short-term investments: fully collateralized repur-
chase agreements, interest-bearing or discounted commercial paper including
dollar-denominated commercial paper of foreign issuers, and any other short-
term money market instruments including variable rate demand notes and tax-ex-
empt money instruments. By entering into these investments on a joint basis,
it is expected that a Portfolio may earn a higher rate of return on invest-
ments relative to what it could earn individually.
The Fund has received an Order from the Commission, which permits each of
its Portfolios to invest the greater of 5% of its total assets or $2.5 million
in the UAM Funds' DSI Money Market Portfolio for cash management purposes.
(See "Investment Companies.")
REPURCHASE AGREEMENTS
In a repurchase agreement, the Portfolio purchases a security and, at the
same time, arranges to sell it back to the original seller on a predetermined
date. The repurchase agreement states the price that the seller will pay for
the security plus the interest rate that the purchaser will receive while
holding it. In effect, the Portfolio is lending its funds to the seller at an
agreed upon interest rate and receiving a security as collateral for the loan.
Repurchase agreements can range from overnight to a fixed term. They are a
common way to earn interest on short-term funds.
The seller under a repurchase agreement will be required to maintain the
value of the securities subject to the agreement at not less than 100% of the
repurchase price of such securities. The Administrator and the Adviser will
mark to market daily the value of the securities purchased, and the Adviser
will, if necessary, require the seller to maintain additional securities to
ensure that the value is in compliance with the previous sentence.
6
<PAGE>
There are some risks involved in repurchase agreements. If the seller de-
faults on its agreement to buy back the securities and the value of those se-
curities falls, the Portfolio may incur losses in selling these securities on
the open market. Also, if the seller enters bankruptcy, the bankruptcy court
may decide that the securities are collateral not within the control of the
Portfolio and therefore are subject to sale by the trustee in the bankruptcy.
Finally, it is possible that the Portfolio may not be able to prove its owner-
ship of the underlying securities.
The Adviser believes that these risks can be controlled by carefully review-
ing the securities involved in a repurchase agreement as well as the credit
rating of the other party in the transaction. The Portfolio may invest in re-
purchase agreements collateralized by U.S. government securities, certificates
of deposit, bankers acceptances and other short-term securities as outlined
above.
The Fund received an Order from the Commission for permission to pool the
daily uninvested cash balances of the Fund's Portfolios in order to invest in
repurchase agreements on a joint basis. By entering into repurchase agreements
on a joint basis, it is expected that a Portfolio will incur lower transac-
tions costs and potentially obtain higher rates of interest on such repurchase
agreements. Each Portfolio's participation in the income from jointly pur-
chased repurchase agreements will be based on that Portfolio's percentage
share in the total repurchase agreement.
WHEN-ISSUED, FORWARD DELIVERY AND DELAYED SETTLEMENT SECURITIES
Occasionally the Portfolio will invest in securities whose terms and charac-
teristics are already known but which have not yet been issued. These are
called "when-issued" or "forward delivery" securities. Usually these securi-
ties are purchased within a month of their issue date. "Delayed settlements"
occur when the Portfolio agrees to buy or sell securities at some time in the
future, making no payment until the transaction is actually completed.
The Portfolio will maintain a separate account of cash, U.S. Government se-
curities or other high-grade debt obligations at least equal to the value of
the purchase commitments until payment is made. Typically, no income accrues
on securities purchased on a delayed delivery basis prior to the time delivery
of the securities is made although the Portfolio may earn income on securities
it has deposited in a segregated account.
The Portfolio engages in these types of purchases in order to buy securities
that fit with its investment objectives at attractive prices -- not to in-
crease its investment leverage.
Securities purchased on a when-issued basis may decline or appreciate in
market value prior to their actual delivery to the Portfolio.
HEDGING AND RELATED STRATEGIES AND RISK CONSIDERATIONS
The Portfolio may use options (both exchange-traded and over-the-counter) to
attempt to enhance income. To reduce the overall risk of its investments
(hedge), the Portfolio may use options, futures contracts, options on futures
and forward currency contracts. These instruments are commonly referred to as
derivatives. Hedging strategies may also be used in an attempt to manage the
Portfolio's exposure to changing interest rates, security prices and currency
exchange rates. The Portfolio may buy or sell futures contracts, write covered
call options and buy put and call options on any security, index or currency
including options and futures traded on foreign exchanges and options not
traded on exchanges. The Portfolio's ability to use these strategies may be
limited by market conditions, regulatory limits and tax considerations. The
Portfolio's obligation under such hedging strategies will be covered by the
maintenance of a segregated account of cash, U.S. Government securities or
high grade debt obligations equal to at least 100% of the Portfolio's commit-
ment. The Statement of Additional Information contains further information on
all of these strategies and the risks associated with them.
The Portfolio may write or purchase options in privately negotiated transac-
tions ("OTC Options") as well as listed options. OTC Options can be closed out
only by agreement with the other party to the transaction. Any OTC Option pur-
chased by the Portfolio is considered an illiquid security. Any OTC Option
written by the Portfolio will be with a qualified dealer pursuant to an agree-
ment under which the Portfolio may repurchase the option at a formula price.
Such options are considered illiquid to the extent that the formula price ex-
ceeds the intrinsic value of the option. The Portfolio may not purchase or
sell futures contracts or related options for which the aggregate initial mar-
gin and premiums exceed 5% of the fair market value of the Portfolio's assets.
In order to prevent leverage in connection with the purchase of futures con-
tracts or call options thereon by the Portfolio, an amount of cash, cash
equivalents or liquid high grade debt securities equal to the market value of
the obligation under the futures contracts or options (less any related market
deposits) will be maintained in a segregated account with the Fund's Custodi-
an. The Portfolio may not invest more than 15% of its net assets in illiquid
securities and repurchase agreements which have a maturity of longer than
seven days. A more complete discussion of the potential risks involved in
transactions in options or futures contracts and related options is contained
in the Statement of Additional Information.
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The Portfolio may enter into forward foreign currency exchange contracts for
the purchase or sale of a specified currency at a specified future date either
with respect to specific transactions or with respect to portfolio positions.
For example, when the Adviser anticipates making a currency exchange transac-
tion in connection with the purchase or sale of a security, the Portfolio may
enter into a forward contract in order to set the exchange rate at which the
transaction will be made. The Portfolio also may enter into a forward contract
to sell an amount of a foreign currency approximating the value of some or all
of the Portfolio's securities denominated in such currency.
The Portfolio may use forward contracts in one currency or a basket of cur-
rencies to hedge against fluctuations in the value of another currency when
the Adviser anticipates there will be a correlation between the two and may
use forward currency contracts to shift the Portfolio's exposure to foreign
currency fluctuations from one country to another. The purpose of entering
into these contracts is to minimize the risk to the Portfolio from adverse
changes in the relationship between the U.S. dollar and foreign currencies.
The Portfolio may enter into interest rate protection transactions, which
consist of interest rate swaps and interest rate caps, collars and floors, for
hedging purposes. These transactions are commonly known as derivatives. A swap
is an agreement to exchange the return generated by one instrument for the re-
turn generated by another instrument. The swaps in which the Portfolio may
also engage include interest rate caps, floors and collars under which one
party pays a single or periodic fixed amount (or premium), and the other party
pays periodic amounts on the movement of a specified index.
The Portfolio may enter into interest rate protection transactions to pre-
serve a return or spread on a particular investment or portion of its portfo-
lio or to protect against any increase in the price of securities it antici-
pates purchasing at a later date. The Portfolio will enter into interest rate
protection transactions only with banks and recognized securities dealers be-
lieved by the Adviser to present minimal credit risks in accordance with
guidelines established by the Fund's Board of Trustees. Interest rate swaps,
caps, floors and collars will be treated as illiquid securities and will
therefore, be subject to the Portfolio's investment restriction limiting in-
vestment in illiquid securities to no greater than 15% of net assets.
RISK CONSIDERATIONS. The Portfolio might not employ any of the hedging
strategies described above, and there can be no assurance that any strategy
used will succeed. If the Adviser incorrectly forecasts interest rates, market
values or other economic factors in utilizing a strategy for the Portfolio,
the Portfolio would be in a better position if it had not hedged at all. In
addition, the Portfolio will pay commissions and other costs in connection
with such hedging strategies which may increase the Portfolio's expenses and
reduce its return.
The use of these strategies involves certain risks, including (1) the fact
that skills needed to use hedging instruments are different from those needed
to select the Portfolio's securities, (2) possible imperfect correlation, or
even no correlation, between price movements of hedging instruments and price
movements of the investments being hedged, (3) the fact that, while hedging
strategies can reduce the risk of loss, they can also reduce the opportunity
for gain, or even result in losses, by offsetting favorable price movements in
hedged investments and (4) the possible inability of the Portfolio to purchase
or sell a portfolio security at a time that otherwise would be favorable for
it to do so, or the possible need for the Portfolio to sell a portfolio secu-
rity at a disadvantageous time, due to the need for it to maintain "cover" or
to segregate securities in connection with hedging transactions and the possi-
ble inability of the Portfolio to close out or to liquidate its hedged posi-
tion.
RESTRICTED AND ILLIQUID SECURITIES
The Portfolio may purchase restricted securities that are not registered for
sale to the general public but which are eligible for resale to qualified in-
stitutional investors under Rule 144A of the Securities Act of 1933. Under the
supervision of the Fund's Board of Trustees, the Adviser determines the li-
quidity of such investments by considering all relevant factors. Provided that
a dealer or institutional trading market in such securities exists, these re-
stricted securities are not treated as illiquid securities for purposes of the
Portfolio's investment limitations. The Portfolio may also invest up to 15% of
its net assets in securities that are illiquid by virtue of the absence of a
readily available market or because of legal or contractual restrictions on
resale. The prices realized from the sales of these securities could be less
than those originally paid by the Portfolio or less than what may be consid-
ered the fair value of such securities.
LENDING OF PORTFOLIO SECURITIES
The Portfolio may lend its investment securities to qualified institutional
investors who need to borrow securities in order to complete certain transac-
tions, such as covering short sales, avoiding failures to deliver securities
or completing arbitrage operations. The Portfolio will not loan portfolio se-
curities to the extent that greater than one-third of its assets at fair mar-
ket value, would be committed to loans. By lending its investment securities,
the Portfolio
8
<PAGE>
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 inconsis-
tent with the Investment Company Act of 1940 (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 guar-
anteed by the U.S. 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 inter-
est on the loan (which may include the Portfolio investing any cash collateral
in interest bearing short-term investments). As with other extensions of
credit there are risks of delay in recovery or even loss of rights in the se-
curities loaned if the borrower of the securities fails financially. These
risks are similar to the ones involved with repurchase agreements as discussed
above. 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 Fund's Board of
Trustees.
At the present time, the Staff of the Commission does not object if an in-
vestment company pays reasonable negotiated fees in connection with loaned se-
curities 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.
INVESTMENT COMPANIES
As permitted by the 1940 Act, the Portfolio reserves the right to invest up
to 10% of its total assets, calculated at the time of investment, in the secu-
rities of other open-end or closed-end investment companies. No more than 5%
of the investing Portfolio's total assets may be invested in the securities of
any one investment company nor may it acquire more than 3% of the voting secu-
rities of any other investment company. The Portfolio will indirectly bear its
proportionate share of any management fees paid by an investment company in
which it invests in addition to the advisory fee paid by the Portfolio.
The Fund has received an Order from the Commission, which permits each of
its Portfolios to invest the greater of 5% of its total assets or $2.5 million
in the UAM Funds' DSI Money Market Portfolio for cash management purposes pro-
vided that the investment is consistent with the Portfolio's investment poli-
cies and restrictions. Based upon the Portfolio's assets invested in the DSI
Money Market Portfolio, the investing Portfolio's adviser will waive its in-
vestment advisory fee and any other fees it earned as a result of the Portfo-
lio's investment in the DSI Money Market Portfolio. The investing Portfolio
will bear expenses of the DSI Money Market Portfolio on the same basis as all
of its other shareholders.
PORTFOLIO TURNOVER
This Portfolio is managed for long-term appreciation, rather than short-term
trading profits. It is expected that the annual portfolio turnover rate for
the Portfolio will not exceed 75%. (A turnover rate of 100% would mean that
all securities in the Portfolio would be replaced within a one-year period.)
However, portfolio turnover depends to a great degree on market conditions.
Occasionally, when the market shifts suddenly or when the prospects for indi-
vidual stocks change quickly, the Adviser may find it necessary to sell secu-
rities which have not been in the Portfolio for very long. High rates of port-
folio turnover necessarily result in heavier brokerage and portfolio trading
costs which is paid by the Portfolio. Higher rates of turnover may result in
the realization of capital gains. To the extent net short-term capital gains
are realized, any distributions resulting from such gains are considered ordi-
nary income for federal income tax purposes. The Portfolio will not normally
engage in short-term trading, but it reserves the right to do so. The table
set forth in "Financial Highlights" presents the Portfolio's historical port-
folio turnover rates.
INVESTMENT LIMITATIONS
To help reduce the Portfolio's exposure to risk in specific situations, it
has adopted certain limitations associated with its investments and investment
practices. These policies and limitations are considered at the time of pur-
chase. The sale of instruments is not required in the event of a subsequent
change in circumstances.
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The Portfolio's limitations are as follows:
(a) With respect to 75% of its assets, the Portfolio may not own more than
5% of the securities of any single issuer (other than investments is-
sued or guaranteed by the U.S. Government or any of its agencies or in-
strumentalities);
(b) With respect to 75% of its assets, the Portfolio may not own more than
10% of the outstanding voting securities of any one issuer;
(c) The Portfolio may not invest more than 5% of its assets in securities
of issuers (other than securities issued or guaranteed by the U.S. or
foreign governments or their political subdivisions) that have (with
predecessors) less than 3 years of continuous operation;
(d) The Portfolio may not invest more than 25% of its assets in companies
within a single industry; however, there are no limitations on invest-
ments made in instruments issued or guaranteed by the U.S. Government
and its agencies;
(e) The Portfolio may not make loans except by purchasing debt securities
in accordance with its investment objective and policies or entering
into repurchase agreements or by lending its portfolio securities to
banks, brokers, dealers or other financial institutions as long as the
loans are made in compliance with the 1940 Act, as amended, and the
rules, regulations and interpretations of the Commission;
(f) The Portfolio may not borrow except from banks in extraordinary circum-
stances for temporary or emergency purposes. In this situation, the
Portfolio may not (1) borrow more than 33 1/3% of its gross assets
and(2) cannot buy additional securities if it borrows more than 5% of
its total assets; and
(g) The Portfolio will not pledge, mortgage or hypothecate more than 33
1/3% of its total assets at fair market value.
The Portfolio's investment objective and investment limitations (a), (b),
(d), (e) and (f.1) listed above are fundamental policies and may be changed
only with the approval of the holders of a majority of the outstanding voting
securities of the Portfolio. The other investment limitations described here,
those not specified as fundamental in the Statement of Additional Information,
and the Portfolio's investment policies are not fundamental, and the Fund's
Board of Trustees may change them without shareholder approval.
PORTFOLIO TRANSACTIONS
The Portfolio's Investment Advisory Agreement authorizes the Adviser to se-
lect the brokers or dealers that will execute the purchases and sales of in-
vestment securities for the Portfolio. The Agreement directs the Adviser to
use its best efforts to obtain the best available price and most favorable ex-
ecution for all the Portfolio's transactions.
It is not the Fund's practice to allocate brokerage or effect principal
transactions with dealers 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.
Some securities considered for investment by the Portfolio may also be ap-
propriate for other clients served by the Adviser. If a purchase or sale of
securities is 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 fair and reasonable manner. Although there is no
specified formula for allocating such transactions, the various allocation
methods used by the Adviser, and the result of such allocations, are subject
to periodic review by the Fund's Board of Trustees.
BUYING, SELLING AND EXCHANGING SHARES
Shares of the Portfolio are offered through UAM Fund Distributors, Inc. to
investors at net asset value without a sales commission. The required minimum
initial investment in the Portfolio is $2,500 with certain exceptions as may
be determined from time to time by the officers of the Fund. The initial in-
vestment minimum for IRA accounts is $500. The initial investment minimum for
spousal IRA accounts is $250. The minimum for any subsequent investment is
$100.
Shares of the Portfolio may be purchased by customers of broker-dealers or
other financial intermediaries ("Service Agents") which have established a
shareholder servicing relationship with the Fund on behalf of their customers.
Service Agents may impose additional or different conditions or other account
fees on the purchase and
10
<PAGE>
redemption of Portfolio shares. Each Service Agent is responsible for trans-
mitting to its customers a schedule of any such fees and information regarding
any additional or different conditions regarding purchases and redemptions.
Shareholders who are customers of Service Agents should consult their Service
Agent for information regarding these fees and conditions. Amounts paid to
Service Agents may include transaction fees and/or service fees paid by the
Fund from the Fund assets attributable to the Service Agent, and would not be
imposed if shares of the Portfolio were purchased directly from the Fund or
the Distributor. The Service Agents may provide shareholder services to their
customers that are not available to a shareholder dealing directly with the
Fund. A salesperson and any other person entitled to receive compensation for
selling or servicing Portfolio shares may receive different compensation with
respect to one particular class of shares over another in the Fund.
Service Agents may enter confirmed purchase orders on behalf of their cus-
tomers. If you buy shares of the Portfolio in this manner, the Service Agent
must receive your investment order before the close of trading on the NYSE and
transmit it to the Fund's Sub-Transfer Agent (prior to the close of the Sub-
Transfer Agent's business day) and to the Distributor to receive that day's
share price. Proper payment for the order must be received by the Sub-Transfer
Agent no later than the time when the Portfolio is priced on the following
business day. Service Agents are responsible to their customers, the Fund and
its Distributor for timely transmission of all subscription and redemption re-
quests, investment information, documentation and money.
HOW TO BUY SHARES BY MAIL
If you have never invested in this Portfolio before, you will have to fill
out an Account Registration Form, which can be obtained by calling the Fund at
1-800-638-7983. You will notice that the form includes a carbon copy. Once you
have filled out the information on the form, please remove the carbon, sepa-
rate the two copies and sign both. We require an original signature on both
forms. Mail one copy, along with a check payable to UAM Funds Trust, to:
UAM Funds Trust
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
Mail the other copy, without the check, to:
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
To make additional investments to an account you have already established,
simply mail your check to the UAM Funds Service Center at the address above.
Make sure that your account number, account name, and the name of the Portfo-
lio are clearly indicated on the check so that we can properly credit your ac-
count.
For both initial and additional investments, your funds will be credited to
your account at the next share price calculated for the Portfolio after re-
ceipt. Investments received by 4 p.m. Eastern Time will be invested at the
share price calculated after the market closes on the same day. (For example,
if your check arrives on Tuesday morning, you will purchase shares at the
price calculated after the market close on Tuesday.)
HOW TO BUY SHARES BY WIRE
To make an initial investment by wire, you must first telephone the Fund at
1-800-638-7983. A representative will then ask you to provide the account num-
ber from which you plan to wire the funds, the bank or financial institution,
its address, phone number and your social security or taxpayer identification
number. You will then tell the representative which Portfolio you wish to in-
vest in and how much you want to invest. The representative will then provide
you with an account number and a wire control number. Please write it down and
keep it for your records.
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<PAGE>
Once you have an account number, call your bank and instruct them to wire a
specified amount to the Fund's custodian, The Chase Manhattan Bank ("Custodian
Bank"). You will be asked to provide the following information:
The Chase Manhattan Bank
ABA #021000021
UAM Funds
Credit DDA #9102772952
(Your Account Registration)
(Your Account Number)
(Wire Control Number)
After you have instructed the bank to wire the money, you must forward a
completed Account Registration Form to the UAM Funds Service Center as soon as
possible. You can obtain forms by calling the UAM Funds Service Center at 1-
800-638-7983. Federal Funds purchases will be accepted only on days when the
NYSE and the Custodian Bank are open for business.
Once you have made the initial purchase, you may buy additional shares by
wire at any time by following the instructions above. On all wired purchases,
funds will be invested at the share price calculated after the next market
close.
IN-KIND PURCHASES
Under certain circumstances, investors who own securities may be able to ex-
change them directly for shares of the Portfolio without converting their in-
vestments into cash first. The Portfolio will accept such in-kind purchases
only if the securities offered for exchange meet the Portfolio's investment
criteria, which are set forth in the "Details on Investment Policies" section
of this Prospectus. Once accepted, the shares will be valued according to the
process described in "How Share Prices are Determined" at the same time the
Portfolio's shares are valued. Once a value has been determined for both, an
exchange will be made. All dividends, interest, subscription, or other rights
pertaining to these securities become the Fund's property; if you receive any
such items, you must deliver them to the Fund immediately. Securities acquired
through an in-kind purchase will be acquired for investment and not for imme-
diate resale.
The Fund will not accept securities for exchange unless they meet the fol-
lowing criteria:
. The securities are eligible to be included in the Portfolio and market
quotes can readily be obtained for them, e.g., as evidenced by a listing
on the American Stock Exchange, the NYSE, NASDAQ or a foreign exchange.
. The investor assures the Fund that the securities are liquid and not sub-
ject to any restrictions under the Securities Act of 1933 or any other
law or regulation.
. The value of the securities exchanged does not increase the Portfolio's
position in any specific issuer's security to more than 5% of the Portfo-
lio's net assets.
For tax purposes, the IRS generally treats any exchange of securities for
Portfolio shares as a sale of the securities. This means that if you exchange
securities which have appreciated in value since you bought them, you will re-
alize capital gains and incur a tax liability. If you are interested in such
an exchange, we suggest you discuss any potential tax liability with your tax
adviser before proceeding.
HOW TO SELL SHARES
You may sell shares by telephone or mail at any time, free of charge. Your
shares will be valued at the next price calculated after we receive your in-
structions to sell.
BY MAIL
To redeem by mail, include
. your share certificates, if we have issued them to you;
. a letter which tells us how many shares you wish to redeem or, alterna-
tively, what dollar amount you wish to receive;
. a signature guaranteed by your bank, broker or other financial institu-
tion (see "Signature Guarantees" below); and
. any other necessary legal documents, in the case of estates, trusts,
guardianships, custodianships, corporations, pension and profit-sharing
plans and other organizations.
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<PAGE>
If you are not sure which documents to send, please contact the UAM Funds
Service Center at 1-800-638-7983.
BY TELEPHONE
To redeem shares by telephone, you must have completed an Account Registra-
tion Form and have returned it to the Fund. Once this form is on file, simply
call the Fund and request the redemption amount to be mailed to you or wired
to your bank. The Fund and the Fund's Sub-Transfer Agent will employ reason-
able precautions to make sure that the instructions communicated by telephone
are genuine, and they may be liable for any losses if they fail to do so. You
will be asked to provide certain personal identification when you open an ac-
count, and again, when you request a telephone redemption. In addition, all
telephone transaction requests will be recorded and investors may be required
to provide additional telecopied written instructions of such transaction re-
quests. Neither the Fund nor the Transfer Agent will be responsible for any
loss, additional cost or expense for following transaction instructions re-
ceived by telephone that it reasonably believes are genuine.
To change the commercial bank or the account designated to receive redemp-
tion proceeds, a written request must be sent to the Fund at the address on
the cover of this Prospectus. Requests to change the bank or account must be
signed by each shareholder and each signature must be guaranteed. You cannot
redeem shares by telephone if you hold stock certificates for these shares.
Please contact one of the Fund's representatives at 1-800-638-7983 for further
details.
SIGNATURE GUARANTEES
To protect your account, the Fund and the Fund's Transfer Agent from fraud,
signature guarantees are required for certain redemptions. Signature guaran-
tees are used to verify that the person who authorizes a redemption is, in
fact, the registered shareholder. They are required whenever you:
. redeem shares and request that the proceeds be sent to someone other than
the registered shareholder(s) or to an address which is not the regis-
tered address; or
. transfer shares from one Portfolio to another.
Signatures must be guaranteed by an "eligible guarantor institution" as de-
fined in Rule 17Ad-15 under the Securities Exchange Act of 1934. (The UAM
Funds Service Center can provide you with a full definition of the term.) You
can obtain a signature guarantee at almost any bank, as well as through most
brokers, dealers, credit unions, national securities exchanges, registered se-
curities associations, clearing agencies and savings associations. 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 el-
igible guarantor institution which participates in a signature guarantee pro-
gram. A notary public can not provide a signature guarantee.
The signature guarantee must appear either:
. on the written request for redemption; or
. on a separate instrument for assignment (a "stock power") which should
specify the total number of shares to be redeemed; or
. on all stock certificates tendered for redemption, and, if shares held by
the Fund are also being redeemed, then on the letter or stock power.
FURTHER INFORMATION ON SELLING SHARES
Normally, the Fund will make payment for all shares sold under this proce-
dure within one business day after we receive a request. In no event will pay-
ment be made more than seven days after receipt of a redemption (sale) request
in good order. The Fund may suspend the right of redemption or postpone the
date at times when either the NYSE and Custodian Bank are closed, or under any
emergency circumstances as determined by the Commission.
If the Fund's Board of Trustees determines that it would be detrimental to
the best interests of the remaining shareholders of the Fund to make payments
wholly or partly in cash, the Fund may pay the redemption proceeds in whole or
in part by a distribution in-kind of liquid securities held by the Portfolio
instead of cash in conformity with applicable rules of the Commission. Invest-
ors may incur brokerage charges when they sell portfolio securities received
in payment of redemptions.
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HOW TO EXCHANGE SHARES
You may exchange Institutional Class Shares of the Portfolio for any other
Institutional Class Shares of a Portfolio included in 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 this Prospectus.) When
you exchange shares you sell your old shares and buy new ones, both at the
price calculated after the next market close. There is no sales charge for ex-
changes. Exchange requests may be made by phone or letter. Telephone exchanges
may be made only if the Fund holds all share certificates and if the registra-
tion of the two accounts is identical. Telephone exchanges received before
4:00 p.m. Eastern Time will be processed at the share price set after the mar-
ket closes on the same day. Exchanges received after 4:00 p.m. Eastern Time
will be executed at the share price determined at the market close on the fol-
lowing day. For additional information regarding responsibility for the au-
thenticity of telephoned transaction instructions, see "How to Sell Shares --
By Telephone" above. The Fund may also limit both the frequency and the
amount of exchanges permitted if it is in the interest of the Fund's share-
holders. The exchange privilege is only available with respect to Portfolios
that are registered for sale in a shareholder's state of residence.
Please review a Portfolio's investment objective before shifting money into
it. Make sure its objective and strategies fit with your long-term goals. Be-
fore exchanging into a Portfolio, read its Prospectus. You may obtain one for
the Portfolio(s) you are interested in by calling the UAM Funds Service Center
at 1-800-638-7983. Remember, every time you exchange shares of one Portfolio
for another, your transaction is counted as a sale of the first security and a
purchase of the second. As a result, you may incur a tax liability by exchang-
ing shares if your investment has appreciated since you bought it. Consult
your tax adviser to determine your liability for capital gains taxes.
HOW SHARE PRICES ARE DETERMINED
The value of each share of the Portfolio is calculated every day that the
NYSE is open. This means that shares are revalued after the market close, gen-
erally at 4:00 p.m. Eastern Time on Monday through Friday, except for major
holidays when the NYSE is closed.
The value of the Portfolio share is determined by adding up the total market
value of all the securities in the Portfolio plus cash and other assets, de-
ducting liabilities and then dividing by the total number of shares outstand-
ing.
For stocks, we use the last quoted trading price as the market value. For
listed stocks, we use the price quoted by the exchange on which the stock is
primarily traded. Unlisted stocks and listed stocks which have not been traded
on the valuation date or for which market quotations are not readily available
are valued at a price between the last price asked and the last price bid. For
valuation purposes, quotations of foreign securities in a foreign currency are
converted to U.S. dollar equivalents based upon the bid price of such curren-
cies against U.S. dollars quoted by any major bank or by a broker. The value
of other assets and securities for which no quotations are readily available
(including restricted securities) is determined in good faith at fair value
using methods determined by the Fund's Board of Trustees.
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
DIVIDENDS
Stocks generate income in the form of dividends. The Portfolio will normally
distribute substantially all of its net investment income (for tax purposes)
to shareholders in the form of an annual dividend. If any net capital gains
are realized, the Portfolio will normally distribute such gains annually. You
must instruct the Portfolio to pay out dividends and distributions in cash to
you or to reinvest them. The Account Registration Form has a box for your in-
structions. Unless you specifically tell us to distribute dividend and other
income in cash, however, we will assume you want this income reinvested.
Reinvested dividend distributions will affect your tax liability. By law,
you must pay taxes on any dividend or interest income you receive on your in-
vestments whether distributed in cash or reinvested in shares. The Portfolio
will send you a statement annually telling you exactly how much dividend in-
come you have earned for tax purposes.
CAPITAL GAINS
Capital gains are another source of appreciation to the Portfolio. Basical-
ly, a gain is an increase in the value of a stock or bond. However, for tax
purposes, the Portfolio does not "realize" a capital gain unless it sells a
stock or bond which has appreciated.
You can incur capital gains in two ways. First, if the Portfolio buys a
stock or bond at one price, then sells it at a higher price, it will realize a
capital gain. At the end of the year, the capital gains computed under tax
rules that the Portfolio has made are added up and capital losses are sub-
tracted. If any net capital gains are realized, the Portfolio
14
<PAGE>
will normally distribute such gains annually. You will receive a statement at
the end of the year informing you of your share of the Portfolio's capital
gains.
The second way to incur capital gains is to sell or trade your shares. If
you sell shares at a higher price than you bought them at, you will be respon-
sible for paying taxes on your gain. There are several ways to determine your
tax liability, and we suggest you contact a qualified tax adviser to help you
decide which is best for you.
TAXES
The Portfolio intends to qualify each year as a "regulated investment compa-
ny" under Federal tax law, and if it qualifies, the Portfolio will not be lia-
ble for Federal income taxes, because it will have distributed all its net in-
vestment income and net realized capital gains to shareholders. Shareholders
will then have to pay taxes on the dividends, and on gains whether they are
distributed as cash or are reinvested in shares. Dividends and short-term cap-
ital gains will be taxed as ordinary income. Long-term capital gains distribu-
tions are taxed as long-term capital gains. Such dividends and distributions
may be subject to state and local taxes. Redemptions of shares in the Portfo-
lio are taxable events for Federal income tax purposes. A shareholder may also
be subject to state and local taxes on such redemptions.
Dividends declared in October, November and December to shareholders of rec-
ord in such a month will be treated as if they had been paid by the Fund and
received by the shareholders on December 31 of the same calendar year, pro-
vided that the dividends are paid before February of the following year.
The Fund is required by Federal law to withhold 31% of reportable payments
(which may include dividends, capital gains distributions and redemptions)
paid to shareholders who have not complied with IRS regulations. In order to
avoid this withholding requirement, you must certify on the Account Registra-
tion Form or on a separate form supplied by the Fund that your Social Security
or Taxpayer Identification Number you have provided is correct and that you
are not currently subject to backup withholding or that you are exempt from
backup withholding.
Dividends and interest received by the Portfolio may give rise to withhold-
ing and other taxes imposed by foreign countries. These taxes reduce the Port-
folio's dividends but are included in the taxable income reported on your tax
statement if the Portfolio qualifies for this tax treatment and elects to pass
it through to you. You may be able to claim an offsetting tax credit or item-
ized deduction for foreign taxes paid by the Portfolio. Your tax statement
will generally show the amount of foreign tax for which a credit or deduction
may be available.
FUND MANAGEMENT AND ADMINISTRATION
INVESTMENT ADVISER
The Adviser is an international investment adviser and is an affiliate of
the MJ Group, in Glasgow, Scotland. The MJ Group's origins date back to 1907,
and it currently has $7 billion in assets under management. The MJ Group has a
200-member staff including 40 investment professionals. It became a subsidiary
of United Asset Management Corporation in 1993. The Adviser, the SEC-regis-
tered entity within the MJ Group, has $1.4 billion of assets under management
and has U.S. offices in Chicago.
The Portfolio pays an annual fee in monthly installments to the Adviser for
advisory services. This fee is accrued daily and paid every month as a per-
centage of the average net assets in the Portfolio for that month. The per-
centage fee on an annual basis is 0.75%. This investment advisory fee is
higher than that paid by many mutual funds but not necessarily higher than
fees paid by funds with investment objectives similar to that of the Portfo-
lio.
The Adviser may compensate its affiliated companies for referring investors
to the Portfolio. The Distributor, UAM, the Adviser, or any of their affili-
ates, may, at its own expense, compensate a Service Agent or other person for
marketing, shareholder servicing, record-keeping and/or other services per-
formed with respect to the Fund, a Portfolio or any Class of Shares of a Port-
folio. The person making such payments may do so out of its revenues, its
profits or any other source available to it. Such services arrangements, when
in effect, are made generally available to all qualified service providers.
The Distributor, the Adviser and certain of their other affiliates also par-
ticipate, at the date of this Prospectus, in an arrangement with Smith Barney
Inc. under which Smith Barney provides certain defined contribution plan mar-
keting and other shareholder services and receives from such entities .15 of
1% of the daily net asset value of Institutional Class Shares held by Smith
Barney's eligible customer accounts in addition to amounts payable to all
selling dealers. The Fund also compensates Smith Barney for services it pro-
vides to certain defined contribution plan shareholders that are not otherwise
provided by the Administrator.
15
<PAGE>
The investment professional at the Adviser responsible for the day-to-day
management of the Portfolio and his qualifications are as follows:
RODGER SCULLION, MANAGING DIRECTOR OF THE ADVISER, has 25 years of invest-
ment experience, the last 13 years based in Glasgow with the MJ Group. He is
the portfolio manager of the Murray Smaller Markets Investment Trust, a
closed-end investment fund registered in the United Kingdom, which invests in
as many as [45] markets worldwide. Mr. Scullion is the Adviser's Chief Invest-
ment Officer and the lead person on the country allocation team. During his
tenure at the MJ Group, he has held portfolio management responsibilities for
investments in the U.S., Europe, Japan and the Far East.
ADMINISTRATOR
Pursuant to a Fund Administration Agreement dated April 15, 1996, UAM Fund
Services, Inc. ("UAMFSI") a wholly-owned subsidiary of United Asset Management
Corporation with its principal office located at 211 Congress Street, Boston,
MA 02110, is responsible for performing and overseeing administration, fund
accounting, dividend disbursing and transfer agency services provided to the
Fund and its Portfolios. UAMFSI has subcontracted the performance of certain
of such services to Chase Global Funds Services Company ("CGFSC"), an affili-
ate of The Chase Manhattan Bank, pursuant to a Mutual Funds Service Agreement
dated April 15, 1996. CGFSC is located at 73 Tremont Street, Boston, MA 02108-
3913. Effective April 1, 1996, The Chase Manhattan Corporation, the parent of
The Chase Manhattan Bank merged with and into Chemical Banking Corporation,
the parent company of Chemical Bank. Chemical Banking Corporation is the sur-
viving corporation and will continue its existence under the name "The Chase
Manhattan Corporation".
Each Portfolio pays to UAMFSI a monthly fee comprised of two parts: a Port-
folio-specific fee which is retained by UAMFSI and a sub-administration fee
which UAMFSI in turn pays to CGFSC. The Portfolio-specific fee for the MJI In-
ternational Equity Portfolio is 0.06% of aggregate net assets. The sub-admin-
istration fee calculated on an annualized basis equals: 0.19 of 1% of the
first $200 million of total net assets of the Fund; 0.11 of 1% of the next
$800 million of total net assets of the Fund; 0.07 of 1% of total net assets
in excess of $1 billion but less than $3 billion; and 0.05 of 1% of total net
assets in excess of $3 billion. The sub-administration fees are allocated
among the Portfolios on the basis of their relative assets and are subject to
a graduated minimum fee schedule per Portfolio of $2,000 per month upon incep-
tion of a Portfolio to $70,000 annually after two years. If a separate class
of shares is added to a Portfolio, the minimum annual fee payable by that
Portfolio may be increased by up to $20,000.
DISTRIBUTOR
UAM Fund Distributors, Inc., a wholly-owned subsidiary of UAM with its prin-
cipal office located at 211 Congress Street, Boston, Massachusetts 02110, dis-
tributes the shares of the Fund. Under the Fund's Distribution Agreement (the
"Agreement"), the Distributor, as agent of the Fund, agrees to use its best
efforts as sole distributor of the Fund's shares. The Distributor does not re-
ceive any fee or other compensation under the Agreement with respect to this
Portfolio. The Agreement continues in effect as long as the Fund's Board of
Trustees, including a majority of the Trustees who are not parties to the
Agreement or interested persons of any such party, approve it on an annual ba-
sis. This Agreement provides that the Fund will bear the costs of the regis-
tration of its shares with the Commission and various states and the printing
of its prospectuses, statements of additional information and reports to
shareholders.
CUSTODIAN
The Chase Manhattan Bank serves as custodian of the Fund's assets.
ACCOUNTANTS
Price Waterhouse LLP acts as the independent accountants for the Fund and
audits its financial statements annually.
SUB-ADMINISTRATOR, SUB-TRANSFER AND SUB-DIVIDEND DISBURSING AGENT
Chase Global Funds Services Company, 73 Tremont Street, Boston, MA 02108,
acts as sub-administrator, sub-transfer agent and sub-dividend disbursing
agent for the Fund.
REPORTS
Investors will receive unaudited semi-annual financial statements and annual
financial statements audited by Price Waterhouse LLP.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be made by writing to the Fund at the address
listed on the cover of this Prospectus or by calling 1-800-638-7983.
16
<PAGE>
LITIGATION
The Fund is not involved in any litigation.
GENERAL FUND INFORMATION
The Portfolio is one of a series of investment portfolios available through
UAM Funds Trust, an open-end investment company known as a "mutual fund." Each
of the Portfolios which make up the Fund have different investment objectives
and policies. Together, the Portfolios offer a diverse set of risk and return
characteristics to suit a wide range of investor needs. The Fund was organized
under the name "The Regis Fund II" on May 18, 1994 as a Delaware business
trust. On October 31, 1995, the name was changed to "UAM Funds Trust."
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Officers of the Fund manage its day-to-day operations and are responsi-
ble to the Fund's Board of Trustees. The Trustees set broad policies for the
Fund and elect its Officers.
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 sharehold-
ers.
The shares of each Portfolio and class have noncumulative voting rights,
which means that the holders of more than 50% of the shares voting for the
election of Trustees can elect 100% of the Trustees if they choose to do so. A
shareholder is entitled to one vote for each full share held (and a fractional
vote for each fractional share held), then standing in his or her name on the
books of the Fund. As of July 31, 1996, Hartnat & Co., Boston, MA held of rec-
ord 42% of the outstanding shares of the MJI International Equity Portfolio
Institutional Class Shares for which ownership is disclaimed or presumed dis-
claimed. The persons or organizations 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. Both In-
stitutional Class and Institutional Service Class Shares represent an interest
in the same assets of a Portfolio and are identical in all respects except
that the Institutional Service Class Shares bear certain expenses related to
shareholder servicing, may bear expenses related to the distribution of such
shares and have exclusive voting rights with respect to matters relating to
such distribution expenditures. Information about the Service Class Shares of
the Portfolios along with the fees and expenses associated with such shares is
available upon request by contacting the Fund at 1-800-638-7983. The Fund will
not ordinarily hold shareholder meetings except as required by the 1940 Act
and other applicable laws. The Fund has undertaken that its Trustees will call
a meeting of shareholders if such a meeting is requested in writing by the
holders of not less than 10% of the outstanding shares of the Fund. To the ex-
tent required by the undertaking, the Fund will assist shareholder communica-
tions in such matters.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR IN THE PORTFOLIO'S
STATEMENT OF ADDITIONAL INFORMATION, IN CONNECTION WITH THE OFFERING MADE BY
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR ITS REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFERING BY THE FUND IN ANY JURISDICTION IN WHICH SUCH
OFFERING MAY NOT BE LAWFULLY MADE.
17
<PAGE>
UAM FUNDS -- INSTITUTIONAL CLASS SHARES
ACADIAN ASSET MANAGEMENT, INC.
Acadian Emerging Markets Portfolio
Acadian International Equity Portfolio
BARROW, HANLEY, MEWHINNEY & STRAUSS, INC.
BHM&S Total Return Bond Portfolio
CHICAGO ASSET MANAGEMENT COMPANY
Chicago Asset Management Value/Contrarian Portfolio
Chicago Asset Management Intermediate Bond Portfolio
COOKE & BIELER, INC.
C&B Balanced Portfolio
C&B Equity Portfolio
C.S. MCKEE & COMPANY, INC.
McKee U.S. Government Portfolio
McKee Domestic Equity Portfolio
McKee International Equity Portfolio
DEWEY SQUARE INVESTORS CORPORATION
DSI Disciplined Value Portfolio
DSI Limited Maturity Bond Portfolio
DSI Money Market Portfolio
FIDUCIARY MANAGEMENT ASSOCIATES, INC.
FMA Small Company Portfolio
INVESTMENT COUNSELORS OF MARYLAND, INC.
ICM Equity Portfolio
ICM Fixed Income Portfolio
ICM Small Company Portfolio
INVESTMENT RESEARCH COMPANY
IRC Enhanced Index Portfolio
MURRAY JOHNSTONE INTERNATIONAL LTD.
MJI International Equity Portfolio
NEWBOLD'S ASSET MANAGEMENT, INC.
Newbold's Equity Portfolio
NWQ INVESTMENT MANAGEMENT COMPANY
NWQ Balanced Portfolio
NWQ Value Equity Portfolio
RICE, HALL, JAMES & ASSOCIATES
Rice, Hall, James Small Cap Portfolio
SIRACH CAPITAL MANAGEMENT, INC.
Sirach Equity Portfolio
Sirach Fixed Income Portfolio
Sirach Growth Portfolio
Sirach Short-Term Reserves Portfolio
Sirach Special Equity Portfolio
Sirach Strategic Balanced Portfolio
SPECTRUM ASSET MANAGEMENT, INC.
SAMI Preferred Stock Income Portfolio
Enhanced Monthly Income Portfolio
STERLING CAPITAL MANAGEMENT COMPANY
Sterling Partners' Balanced Portfolio
Sterling Partners' Equity Portfolio
Sterling Partners' Short-Term Fixed Income Portfolio
THOMPSON, SIEGEL & WALMSLEY, INC.
TS&W Equity Portfolio
TS&W Fixed Income Portfolio
TS&W International Equity Portfolio
18
<PAGE>
UAM FUNDS
UAM FUNDS SERVICE CENTER
C/O CHASE GLOBAL FUNDS SERVICES COMPANY
P.O. BOX 2798
BOSTON, MA 02208-2798
1-800-638-7983
- -------------------------------------------------------------------------------
MJI INTERNATIONAL EQUITY PORTFOLIO
INSTITUTIONAL SERVICE CLASS SHARES
INVESTMENT ADVISER: MURRAY JOHNSTONE INTERNATIONAL LTD.
- -------------------------------------------------------------------------------
PROSPECTUS -- AUGUST 28, 1996
MJI International Equity Portfolio is one of a series of investment portfo-
lios available through UAM Funds Trust (hereinafter defined as "UAM Funds" or
the "Fund"), an open-end investment company known as a "mutual fund." Each of
the Portfolios that make up the Fund have different investment objectives and
policies. In addition, several of the Fund's Portfolios offer two separate
classes of shares: Institutional Class Shares and Institutional Service Class
Shares ("Service Class Shares"). Shares of each class represent equal, pro
rata interests in a Portfolio and accrue dividends in the same manner except
that Service Class Shares bear fees payable by the class to financial institu-
tions for services they provide to the owners of such shares. (See "Service
and Distribution Plans.") MJI International Equity Portfolio currently offers
two classes of shares. The securities offered in this Prospectus are Service
Class Shares of one diversified, no-load Portfolio of the Fund managed by Mur-
ray Johnstone International Ltd.
The MJI International Equity Portfolio seeks to maximize total return, in-
cluding both capital appreciation and current income, by investing primarily
in the common stocks of companies based outside of the United States. Under
normal circumstances, at least 65% of the Portfolio's total assets will be in-
vested in securities of issuers domiciled in at least three countries other
than the United States. There can be no assurance that the Portfolio will
achieve its stated objective.
Please keep this Prospectus for future reference, since it contains informa-
tion that you should understand before you invest. You may also wish to review
the MJI International Equity Portfolio Service Class Shares' "Statement of Ad-
ditional Information" dated August 28, 1996 which was filed with the Securi-
ties and Exchange Commission and has been incorporated by reference into this
Prospectus. (It is legally considered to be a part of this Prospectus). Please
call or write the Fund at the above address to obtain a free copy of this
Statement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Fees and Expenses.......................................................... 1
Summary: About the Portfolio............................................... 2
Risk Factors............................................................... 3
Performance Calculations................................................... 3
Details on Investment Policies............................................. 3
Investment Limitations..................................................... 8
Buying, Selling and Exchanging Shares...................................... 9
Service and Distribution Plans............................................. 13
How Share Prices are Determined............................................ 14
Dividends, Capital Gains Distributions and Taxes........................... 14
Fund Management and Administration......................................... 15
General Fund Information................................................... 17
UAM Funds -- Service Class Shares.......................................... 18
</TABLE>
<PAGE>
FEES AND EXPENSES
Investors will be charged various fees and expenses incurred in managing the
MJI International Equity Portfolio (the "Portfolio") including:
SHAREHOLDER TRANSACTION EXPENSES: These are the costs entailed in buying,
selling or exchanging shares of the Portfolio. The Portfolio does not charge
investors for shareholder transaction expenses. However, transaction fees may
be charged if you are a customer of a broker-dealer or other financial inter-
mediary who has established a shareholder servicing relationship with the Fund
on behalf of their customers. Please see "Service and Distribution Plans" for
further information.
<TABLE>
<S> <C>
Sales Load Imposed on Purchases:........................................ NONE
Sales Load Imposed on Reinvested Dividends:............................. NONE
Deferred Sales Load:.................................................... NONE
Redemption Fees:........................................................ NONE
Exchange Fees:.......................................................... NONE
</TABLE>
ANNUAL FUND OPERATING EXPENSES: These expenses, which cover the cost of ad-
ministration, marketing and shareholder communication, and are usually quoted
as a percentage of net assets, are factored into the Portfolio's share price
and not billed directly to shareholders. They include:
<TABLE>
<S> <C>
Investment Advisory Fees:........................................... 0.75 %
Administrative Fees:................................................ 1.07 %
12b 1 Fees: (Including Shareholder Servicing Fees)*................. 0.40 %
Other Expenses:..................................................... 1.35 %
Advisory Fees Waived:............................................... (1.65)%
-----
Total Operating Expenses (After Fee Waiver)......................... 1.92 %+
</TABLE>
- -------
+ Murray Johnstone International Ltd. has voluntarily agreed to waive a por-
tion of its advisory fees and to assume as the Adviser's own expense operat-
ing expenses otherwise payable by the Portfolio, if necessary, in order to
keep the Portfolio's Service Class Shares total annual operating expenses
(excluding interest, taxes and extraordinary expenses) from exceeding 1.90%
of average daily net assets until further notice. If it were not for the fee
waiver and/or reimbursement, the Portfolio's Service Class Shares total an-
nual operating expenses would be 3.57% of average daily net assets.
* The Service Class Shares may bear service fees of 0.25%, and distribution
fees and expenses of up to 0.15%. Long-term shareholders may pay more than
the economic equivalent of the maximum front-end sales charge permitted by
rules of the National Association of Securities Dealers, Inc. See "Service
and Distribution Plans."
The purpose of the above table is to assist the investor in understanding
the various expenses that an investor in the MJI International Equity Portfo-
lio's Service Class Shares will bear directly or indirectly. The fees and ex-
penses set forth above are estimates based upon the Portfolio's Institutional
Class Shares operations during the fiscal year ended April 30, 1996 except
that such information has been restated to reflect 12b-1 Fees and current ad-
ministrative fees.
Investors can get a better idea of how the Portfolio's operating expenses
will affect their own investments by examining the following chart. The chart
shows how much a hypothetical investor would pay in expenses, assuming that he
or she made an initial investment of $1,000, earned a 5% annual rate of return
and redeemed his or her investment at the end of the time period indicated.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Expenses:.................................... $19 $60 $103 $222
</TABLE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EX-
PENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE
SHOWN ABOVE.
The information set forth in the above table and example relates only to
Service Class Shares of the Portfolio, which shares are subject to different
total fees and expenses than Institutional Class Shares. Service agents may
charge other fees to their customers who are beneficial owners of Service
Class Shares in connection with their customer accounts. (See "Service and
Distribution Plans.")
1
<PAGE>
SUMMARY: ABOUT THE PORTFOLIO . . .
OBJECTIVE:
The Portfolio seeks to maximize total return, including both capital appre-
ciation and current income, by investing primarily in the common stocks of
companies based outside of the United States. Under normal circumstances, at
least 65% of the Portfolio's total assets will be invested in at least three
different countries other than the United States. There can be no assurance
that the Portfolio will achieve its stated objective.
HOW IS THE PORTFOLIO MANAGED?
The Portfolio's investment process focuses first on determining the proper
country allocation, using a proprietary system to analyze economic, stock mar-
ket and monetary policy factors in each national market. The system indicates
which markets are the most promising, and Murray Johnstone International Ltd.
(the "Adviser") decides the proportion the Portfolio should invest in each.
Then, at the stock selection level, the Adviser identifies undervalued stocks
in each market selected for investment. (See "Details on Investment Poli-
cies.")
WHO MANAGES THE PORTFOLIO?
The Adviser is an international investment adviser and is an affiliate of
the Murray Johnstone Group ("MJ Group"), in Glasgow, Scotland. The MJ Group's
origins date back to 1907, and it currently has $7 billion in assets under
management. The MJ Group has a [200]-member staff including [40] investment
professionals. It became a subsidiary of United Asset Management Corporation
in 1993. The Adviser, the SEC-registered entity within the MJ Group, has $1.4
billion of assets under management and has U.S. offices in Chicago. (See "Fund
Management and Administration.")
WHO SHOULD INVEST IN THE PORTFOLIO?
The Portfolio is suitable for investors who wish to diversify their assets
across a broad range of international markets. Like any international stock
investment, this Portfolio should be considered primarily for long-term in-
vestment by investors who are willing to tolerate short-term swings in the
value of their assets for long-term returns.
HOW TO INVEST
Service Class Shares of the Portfolio are offered to investors through bro-
ker-dealers and other financial institutions ("Service Agents") at net asset
value next determined after the purchase order is received in proper form. The
minimum initial investment is $2,500 with certain exceptions as may be deter-
mined from time to time by the Officers of the Fund. The minimum for subse-
quent investments is $100. See "Buying, Selling and Exchanging Shares."
DIVIDENDS AND DISTRIBUTIONS
The Portfolio will normally distribute substantially all of its net invest-
ment income in the form of an annual dividend. Any realized net capital gains
will also be distributed annually. Distributions will be reinvested in the
Portfolio's shares automatically unless an investor elects to receive cash
distributions. (See "Dividends, Capital Gains Distributions and Taxes.")
HOW TO REDEEM
Service Class Shares of the Portfolio may be redeemed on any business day
when the New York Stock Exchange ("NYSE") is open, without cost, at the net
asset value of the Portfolio next determined after receipt of the redemption
request. The Portfolio's share price will fluctuate with market and economic
conditions. Therefore, your investment may be worth more or less when redeemed
than when purchased. (See "Buying, Selling and Exchanging Shares.")
ADMINISTRATIVE SERVICES
UAM Fund Services, Inc. (the "Administrator"), a wholly-owned subsidiary of
United Asset Management Corporation ("UAM"), is responsible for performing and
overseeing administration, Fund accounting, dividend disbursing and transfer
agency services provided to the Fund and its Portfolios by third-party service
providers. (See "Administrative Services".)
2
<PAGE>
RISK FACTORS
Prospective investors should understand that the Portfolio's performance
will be affected by a variety of factors since it participates in a large num-
ber of stock markets around the world. The value of the Portfolio's invest-
ments will vary from day to day, generally reflecting global economic and po-
litical developments, conditions in global and national markets, changes in
currency exchange rates, factors affecting individual stocks in the Portfolio
and shifts in interest rates. In addition, you should consider the following
factors that could affect the Portfolio's rate of return.
. The Portfolio may invest in repurchase agreements which entail a risk of
loss should the seller default on its transaction.
. The Portfolio may lend its investment securities which entails a risk of
loss should a borrower fail financially.
. The Portfolio may purchase securities on a when-issued basis which do not
earn interest until issued and may decline or appreciate in market value
prior to their delivery to the Portfolio.
. The Portfolio may engage in various currency strategies to seek to hedge
its investments against movements in security prices, interest rates, and
exchange rates by the use of derivatives, including forward contracts,
options and futures as well as options on futures. Such strategies are
commonly referred to as "derivatives" and involve the risk of imperfect
correlation in movements in the price of options and futures and move-
ments in the price of securities, interest rates or currencies which are
the subject of the hedge. To the extent these transactions involve for-
eign securities or currencies, they are also subject to the risk factors
associated with foreign investments generally. There can be no assurance
that a liquid secondary market for these hedging techniques will exist at
any specific time.
Further information about these and other risk factors is contained in the
"Details on Investment Policies" section of this Prospectus.
PERFORMANCE CALCULATIONS
The Portfolio measures performance by calculating total return. Total return
figures are based on historical earnings and are not intended to indicate fu-
ture performance.
Total return is the change in value of an investment in the Portfolio over a
given period, assuming reinvestment of any dividends and capital gains. A cu-
mulative or aggregate total return reflects actual performance over a stated
period of time. An average annual total return is a hypothetical rate of re-
turn that, if achieved annually, would have produced the same cumulative total
return if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same as
actual year-by-year results.
Performance will be calculated separately for Institutional Class and Serv-
ice Class Shares. Dividends paid by the Portfolio with respect to Institu-
tional Class and Service Class Shares, to the extent any dividends are paid,
will be calculated in the same manner at the same time on the same day and
will be in the same amount, except that service fees, distribution charges and
any incremental transfer agency costs relating to Service Class Shares will be
borne exclusively by that class.
The Portfolio's performance may be compared to data prepared by independent
services which monitor the performance of investment companies, data reported
in financial and industry publications, and various indices, all as further
described in the Portfolio's Statement of Additional Information.
The Portfolio's Annual Report to Shareholders for the most recent fiscal
year end contains additional performance information that includes comparisons
with appropriate indices. The Annual Report is available without charge upon
request to the Fund by writing to the address or calling the phone number on
the cover of this Prospectus.
DETAILS ON INVESTMENT POLICIES
INVESTMENT STRATEGY
The Portfolio's investment process begins by seeking to determine the best
possible allocation among international stock markets. The Portfolio's Adviser
evaluates markets through a proprietary system which analyzes economic fac-
tors, stock prices in each market, market performance and trends in monetary
policy. Drawing on this information, the Adviser decides which markets the
Portfolio should invest in and in what proportion.
Once the country allocation decision has been made, the Adviser selects un-
dervalued stocks in that market. The Adviser rates companies according to the
quality of their management, market position, financial strength, ability to
earn competitive returns on equity and assets, and growth potential. The Port-
folio will invest in stocks that the Adviser
3
<PAGE>
determines are undervalued compared to industry norms within their countries.
It is expected that investments will be diversified throughout the world and
within markets to minimize specific country and currency risks. While invest-
ments will be made primarily in securities of companies domiciled in developed
countries, investments will also be made in developing countries. (See "For-
eign Investment Risk Factors.")
Under normal circumstances, at least 65% of the Portfolio's total assets
will be invested in common stocks of companies in at least three countries
outside the United States. It is expected that generally, the Portfolio will
invest in common stocks of companies listed on U.S. or foreign stock ex-
changes, but it may also invest in stocks traded in the over-the-counter mar-
ket. Common stocks for this purpose also include securities having common
stock characteristics such as rights and warrants to purchase common stocks.
The Portfolio may also invest in convertible securities and preferred stocks.
The Portfolio may also invest in foreign equity securities in the form of
American Depositary Receipts (ADRs), European Depositary Receipts (EDRS) and
other similar global instruments. ADRs (sponsored or unsponsored) are receipts
typically issued by a U.S. bank or trust company evidencing ownership of the
underlying foreign securities. Most ADRs are traded on a U.S. stock exchange.
Issuers of unsponsored ADRs are not contractually obligated to disclose mate-
rial information in the U.S. and, therefore, there may not be a correlation
between such information and the market value of the unsponsored ADR. EDRs are
receipts typically issued by a European bank or trust company evidencing own-
ership of the underlying foreign securities.
FOREIGN INVESTMENT RISK FACTORS
Investors should recognize that investing in foreign securities involves
certain risks which are not typically associated with investing in domestic
securities. Since securities issued by foreign entities may be denominated in
foreign currencies, and the Portfolio may temporarily hold uninvested reserves
in bank deposits in foreign currencies, the Portfolios value may rise or fall
depending on currency exchange rates. The Portfolio may also have to pay a fee
to convert funds from one currency to another.
In addition, non-U.S.-based companies are not subject to the same account-
ing, auditing and financial reporting standards as are domestic companies.
There may be less publicly-available information about non-U.S.-based compa-
nies which may make it difficult to make investment decisions. Also, stock
markets outside the U.S. are typically less liquid--that is, it is more diffi-
cult to sell large quantities of a stock without driving its price down or to
buy without pushing its price up. Market regulation may be less rigorous in
some markets. Finally, political factors may have an impact in the form of
confiscatory taxation, expropriation or political instability in international
markets.
Although the Portfolio will seek the most favorable trading costs available
in any given market, investors should recognize that foreign commissions are
generally higher than those in the U.S. In addition, custodial expenses, that
is, fees paid to financial institutions for holding the Portfolio's securi-
ties, will generally be higher than would be the case in the U.S.
Some foreign governments also levy withholding taxes against dividend and
interest income. Although in some countries a portion of the taxes is recover-
able, the non-recovered portion of foreign withholding taxes will reduce the
income the Portfolio receives from the companies comprising its investments.
Investing in the foreign securities of developing countries presents addi-
tional considerations. The economies of individual developing countries may
differ favorably or unfavorably from the United States economy in such re-
spects as growth of gross domestic product, rate of inflation, currency depre-
ciation, capital reinvestment, resource self-sufficiency and balance of pay-
ments position. Further, the economies of developing countries generally are
heavily dependent upon international trade and, accordingly, have been and may
continue to be adversely affected by trade barriers, exchange controls, man-
aged adjustments in relative currency values and other protectionist measures
imposed or negotiated by the countries with which they trade. These economies
also have been and may continue to be adversely affected by economic condi-
tions in the countries with which they trade.
With respect to any developing country, there is the possibility of nation-
alization, expropriation or confiscatory taxation, repatriation of investment
income, capital and the proceeds of sales by foreign investors, political
changes, governmental regulation, social instability or diplomatic develop-
ments (including war) which could adversely affect the economics of such coun-
tries or the value of the Portfolio's investments in those countries. In addi-
tion, it may be difficult to obtain and enforce a judgement in a court outside
of the United States.
The Portfolio may engage in various investment techniques such as futures
contracts, options on futures contracts, options, and interest rate swap
transactions. See "Other Investment Policies--Hedging and Related Strategies
and Risk Considerations" for more information on these instruments.
4
<PAGE>
OTHER INVESTMENT POLICIES
The Portfolio may also, under normal circumstances, invest up to 35% of its
assets, unless restricted by additional limitations described below or in the
Portfolio's Statement of Additional Information, in the following securities,
investments or investment techniques.
SHORT-TERM INVESTMENTS
In order to earn a return on uninvested assets, meet anticipated redemp-
tions, or for temporary defensive purposes, the Portfolio may invest a portion
of its assets in domestic and foreign money market instruments including cer-
tificates of deposit, bankers acceptances, time deposits, U.S. Government ob-
ligations, U.S. Government agency securities, short-term corporate debt secu-
rities, and commercial paper rated A-1 or A-2 by Standard & Poor's Corporation
or Prime-1 or Prime-2 by Moody's Investors Service, Inc. or if unrated, deter-
mined by the Adviser to be of comparable quality.
The Fund has received an Order from the Securities and Exchange Commission
(the "Commission") for permission to deposit the daily uninvested cash bal-
ances of the Fund's Portfolios, as well as cash for investment purposes, into
one or more joint accounts and to invest the daily balance of the joint ac-
counts in the following short-term investments: fully collateralized repur-
chase agreements, interest-bearing or discounted commercial paper including
dollar-denominated commercial paper of foreign issuers, and any other short-
term money market instruments including variable rate demand notes and tax-ex-
empt money instruments. By entering into these investments on a joint basis,
it is expected that a Portfolio may earn a higher rate of return on invest-
ments relative to what it could earn individually.
The Fund has received an Order from the Commission, which permits each of
its Portfolios to invest the greater of 5% of its total assets or $2.5 million
in the UAM Funds' DSI Money Market Portfolio for cash management purposes.
(See "Investment Companies.")
REPURCHASE AGREEMENTS
In a repurchase agreement, the Portfolio purchases a security and, at the
same time, arranges to sell it back to the original seller on a predetermined
date. The repurchase agreement states the price that the seller will pay for
the security plus the interest rate that the purchaser will receive while
holding it. In effect, the Portfolio is lending its funds to the seller at an
agreed upon interest rate and receiving a security as collateral for the loan.
Repurchase agreements can range from overnight to a fixed term. They are a
common way to earn interest on short-term funds.
The seller under a repurchase agreement will be required to maintain the
value of the securities subject to the agreement at not less than 100% of the
repurchase price of such securities. The Administrator and the Adviser will
mark to market daily the value of the securities purchased, and the Adviser
will, if necessary, require the seller to maintain additional securities to
ensure that the value is in compliance with the previous sentence.
There are some risks involved in repurchase agreements. If the seller de-
faults on its agreement to buy back the securities and the value of those se-
curities falls, the Portfolio may incur losses in selling these securities on
the open market. Also, if the seller enters bankruptcy, the bankruptcy court
may decide that the securities are collateral not within the control of the
Portfolio and therefore are subject to sale by the trustee in the bankruptcy.
Finally, it is possible that the Portfolio may not be able to prove its owner-
ship of the underlying securities.
The Adviser believes that these risks can be controlled by carefully review-
ing the securities involved in a repurchase agreement as well as the credit
rating of the other party in the transaction. The Portfolio may invest in re-
purchase agreements collateralized by U.S. government securities, certificates
of deposit, bankers acceptances and other short-term securities as outlined
above under "Short-Term Investments."
The Fund has received an Order from the Commission for permission to pool
the daily uninvested cash balances of the Fund's Portfolios in order to invest
in repurchase agreements on a joint basis. By entering into repurchase agree-
ments on a joint basis, it is expected that a Portfolio will incur lower
transactions costs and potentially obtain higher rates of interest on such re-
purchase agreements. Each Portfolio's participation in the income from jointly
purchased repurchase agreements will be based on that Portfolio's percentage
share in the total repurchase agreement.
WHEN-ISSUED, FORWARD DELIVERY AND DELAYED SETTLEMENT SECURITIES
Occasionally the Portfolio will invest in securities whose terms and charac-
teristics are already known but which have not yet been issued. These are
called "when-issued" or "forward delivery" securities. Usually these securi-
ties are purchased within a month of their issue date. "Delayed settlements"
occur when the Portfolio agrees to buy or sell securities at some time in the
future, making no payment until the transaction is actually completed.
5
<PAGE>
The Portfolio will maintain a separate account of cash, U.S. Government se-
curities or other high-grade debt obligations at least equal to the value of
the purchase commitments until payment is made. Typically, no income accrues
on securities purchased on a delayed delivery basis prior to the time delivery
of the securities is made although the Portfolio may earn income on securities
it has deposited in a segregated account.
The Portfolio engages in these types of purchases in order to buy securities
that fit with its investment objectives at attractive prices--not to increase
its investment leverage.
Securities purchased on a when-issued basis may decline or appreciate in
market value prior to their actual delivery to the Portfolio.
HEDGING AND RELATED STRATEGIES AND RISK CONSIDERATIONS
The Portfolio may use options (both exchange-traded and over-the-counter) to
attempt to enhance income. To reduce the overall risk of its investments
(hedge), the Portfolio may use options, futures contracts, options on futures
and forward currency contracts. These instruments are commonly referred to as
derivatives. Hedging strategies may also be used in an attempt to manage the
Portfolio's exposure to changing interest rates, security prices and currency
exchange rates. The Portfolio may buy or sell futures contracts, write covered
call options and buy put and call options on any security, index or currency
including options and futures traded on foreign exchanges and options not
traded on exchanges. The Portfolio's ability to use these strategies may be
limited by market conditions, regulatory limits and tax considerations. The
Portfolio's obligation under such hedging strategies will be covered by the
maintenance of a segregated account of cash, U.S. Government securities or
high grade debt obligations equal to at least 100% of the Portfolio's commit-
ment. The Statement of Additional Information contains further information on
all of these strategies and the risks associated with them.
The Portfolio may write or purchase options in privately negotiated transac-
tions ("OTC Options") as well as listed options. OTC Options can be closed out
only by agreement with the other party to the transaction. Any OTC Option pur-
chased by the Portfolio is considered an illiquid security. Any OTC Option
written by the Portfolio will be with a qualified dealer pursuant to an agree-
ment under which the Portfolio may repurchase the option at a formula price.
Such options are considered illiquid to the extent that the formula price ex-
ceeds the intrinsic value of the option. The Portfolio may not purchase or
sell futures contracts or related options for which the aggregate initial mar-
gin and premiums exceed 5% of the fair market value of the Portfolio's assets.
In order to prevent leverage in connection with the purchase of futures con-
tracts or call options thereon by the Portfolio, an amount of cash, cash
equivalents or liquid high grade debt securities equal to the market value of
the obligation under the futures contracts or options (less any related market
deposits) will be maintained in a segregated account with the Fund's Custodi-
an. The Portfolio may not invest more than 15% of its net assets in illiquid
securities and repurchase agreements which have a maturity of longer than
seven days. A more complete discussion of the potential risks involved in
transactions in options or futures contracts and related options is contained
in the Statement of Additional Information.
The Portfolio may enter into forward foreign currency exchange contracts for
the purchase or sale of a specified currency at a specified future date either
with respect to specific transactions or with respect to portfolio positions.
For example, when the Adviser anticipates making a currency exchange transac-
tion in connection with the purchase or sale of a security, the Portfolio may
enter into a forward contract in order to set the exchange rate at which the
transaction will be made. The Portfolio also may enter into a forward contract
to sell an amount of a foreign currency approximating the value of some or all
of the Portfolio's securities denominated in such currency.
The Portfolio may use forward contracts in one currency or a basket of cur-
rencies to hedge against fluctuations in the value of another currency when
the Adviser anticipates there will be a correlation between the two and may
use forward currency contracts to shift the Portfolio's exposure to foreign
currency fluctuations from one country to another. The purpose of entering
into these contracts is to minimize the risk to the Portfolio from adverse
changes in the relationship between the U.S. dollar and foreign currencies.
The Portfolio may enter into interest rate protection transactions, which
consist of interest rate swaps and interest rate caps, collars and floors, for
hedging purposes. These transactions are commonly known as derivatives. A swap
is an agreement to exchange the return generated by one instrument for the re-
turn generated by another instrument. The swaps in which the Portfolio may
also engage include interest rate caps, floors and collars under which one
party pays a single or periodic fixed amount (or premium), and the other party
pays periodic amounts on the movement of a specified index.
The Portfolio may enter into interest rate protection transactions to pre-
serve a return or spread on a particular investment or portion of its portfo-
lio or to protect against any increase in the price of securities it antici-
pates purchasing at a later date. The Portfolio will enter into interest rate
protection transactions only with banks and recognized
6
<PAGE>
securities dealers believed by the Adviser to present minimal credit risks in
accordance with guidelines established by the Fund's Board of Trustees. Inter-
est rate swaps, caps, floors and collars will be treated as illiquid securi-
ties and will therefore, be subject to the Portfolio's investment restriction
limiting investment in illiquid securities to no greater than 15% of net as-
sets.
RISK CONSIDERATIONS. The Portfolio might not employ any of the hedging
strategies described above, and there can be no assurance that any strategy
used will succeed. If the Adviser incorrectly forecasts interest rates, market
values or other economic factors in utilizing a strategy for the Portfolio,
the Portfolio would be in a better position if it had not hedged at all. In
addition, the Portfolio will pay commissions and other costs in connection
with such hedging strategies which may increase the Portfolio's expenses and
reduce its return.
The use of these strategies involves certain risks, including (1) the fact
that skills needed to use hedging instruments are different from those needed
to select the Portfolio's securities, (2) possible imperfect correlation, or
even no correlation, between price movements of hedging instruments and price
movements of the investments being hedged, (3) the fact that, while hedging
strategies can reduce the risk of loss, they can also reduce the opportunity
for gain, or even result in losses, by offsetting favorable price movements in
hedged investments and (4) the possible inability of the Portfolio to purchase
or sell a portfolio security at a time that otherwise would be favorable for
it to do so, or the possible need for the Portfolio to sell a portfolio secu-
rity at a disadvantageous time, due to the need for it to maintain "cover" or
to segregate securities in connection with hedging transactions and the possi-
ble inability of the Portfolio to close out or to liquidate its hedged posi-
tion.
RESTRICTED AND ILLIQUID SECURITIES
The Portfolio may purchase restricted securities that are not registered for
sale to the general public but which are eligible for resale to qualified in-
stitutional investors under Rule 144A of the Securities Act of 1933. Under the
supervision of the Fund's Board of Trustees, the Adviser determines the li-
quidity of such investments by considering all relevant factors. Provided that
a dealer or institutional trading market in such securities exists, these re-
stricted securities are not treated as illiquid securities for purposes of the
Portfolio's investment limitations. The Portfolio may also invest up to 15% of
its net assets in securities that are illiquid by virtue of the absence of a
readily available market or because of legal or contractual restrictions on
resale. The prices realized from the sales of these securities could be less
than those originally paid by the Portfolio or less than what may be consid-
ered the fair value of such securities.
LENDING OF PORTFOLIO SECURITIES
The Portfolio may lend its investment securities to qualified institutional
investors who need to borrow securities in order to complete certain transac-
tions, such as covering short sales, avoiding failures to deliver securities
or completing arbitrage operations. The Portfolio will not loan portfolio se-
curities to the extent that greater than one-third of its assets at fair mar-
ket value, would be committed to loans. 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 bro-
kers, 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 (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 U.S. 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). As with other ex-
tensions of credit, there are risks of delay in recovery or even loss of
rights in the securities loaned if the borrower of the securities fails finan-
cially. These risks are similar to the ones involved with repurchase agree-
ments as discussed above. 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 Fund's Board of Trustees.
At the present time, the Staff of the Commission does not object if an in-
vestment company pays reasonable negotiated fees in connection with loaned se-
curities 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.
7
<PAGE>
INVESTMENT COMPANIES
As permitted by the 1940 Act, the Portfolio reserves the right to invest up
to 10% of its total assets, calculated at the time of investment, in the secu-
rities of other open-end or closed-end investment companies. No more than 5%
of the investing Portfolio's total assets may be invested in the securities of
any one investment company nor may it acquire more than 3% of the voting secu-
rities of any other investment company. The Portfolio will indirectly bear its
proportionate share of any management fees paid by an investment company in
which it invests in addition to the advisory fee paid by the Portfolio.
The Fund has received an Order from the Commission, which permits each of
its Portfolios to invest the greater of 5% of its total assets or $2.5 million
in the UAM Funds' DSI Money Market Portfolio for cash management purposes pro-
vided that the investment is consistent with the Portfolio's investment poli-
cies and restrictions. Based upon the Portfolio's assets invested in the DSI
Money Market Portfolio, the investing Portfolio's adviser will waive its in-
vestment advisory fee and any other fees earned as a result of the Portfolio's
investment in the DSI Money Market Portfolio. The investing Portfolio will
bear expenses of the DSI Money Market Portfolio on the same basis as all of
its other shareholders.
PORTFOLIO TURNOVER
This Portfolio is managed for long-term appreciation, rather than short-term
trading profits. It is expected that the annual portfolio turnover rate for
the Portfolio will not exceed 75%. (A turnover rate of 100% would mean that
all securities in the Portfolio would be replaced within a one-year period.)
However, portfolio turnover depends to a great degree on market conditions.
Occasionally, when the market shifts suddenly or when the prospects for indi-
vidual stocks change quickly, the Adviser may find it necessary to sell secu-
rities which have not been in the Portfolio for very long. High rates of port-
folio turnover necessarily result in heavier brokerage and portfolio trading
costs which is paid by the Portfolio. Higher rates of turnover may result in
the realization of capital gains. To the extent net short-term capital gains
are realized, any distributions resulting from such gains are considered ordi-
nary income for federal income tax purposes. The Portfolio will not normally
engage in short-term trading, but it reserves the right to do so.
Except as specified above and as described under "Investment Limitations,"
the foregoing investment policies are not fundamental, and the Trustees may
change such policies without an affirmative vote of a "majority of the out-
standing voting securities of the Portfolio," as defined in the 1940 Act.
INVESTMENT LIMITATIONS
To help reduce the Portfolio's exposure to risk in specific situations, it
has adopted certain limitations associated with its investments and investment
practices. These policies and limitations are considered at the time of pur-
chase. The sale of instruments is not required in the event of a subsequent
change in circumstances.
The Portfolio's limitations are as follows:
(a) With respect to 75% of its assets, the Portfolio may not own more than
5% of the securities of any single issuer (other than investments is-
sued or guaranteed by the U.S. Government or any of its agencies or in-
strumentalities);
(b) With respect to 75% of its assets, the Portfolio may not own more than
10% of the outstanding voting securities of any one issuer;
(c) The Portfolio may not invest more than 5% of its assets in securities
of issuers (other than securities issued or guaranteed by the U.S. or
foreign governments or their political subdivisions) that have (with
predecessors) less than 3 years of continuous operation;
(d) The Portfolio may not invest more than 25% of its assets in companies
within a single industry; however, there are no limitations on invest-
ments made in instruments issued or guaranteed by the U.S. Government
and its agencies;
(e) The Portfolio may not make loans except by purchasing debt securities
in accordance with its investment objective and policies or entering
into repurchase agreements or by lending its portfolio securities to
banks, brokers, dealers or other financial institutions as long as the
loans are made in compliance with the 1940 Act, as amended, and the
rules, regulations and interpretations of the Commission;
(f) The Portfolio may not borrow except from banks in extraordinary circum-
stances for temporary or emergency purposes. In this situation, the
Portfolio may not (1) borrow more than 33% of its gross assets and (2)
cannot buy additional securities if it borrows more than 5% of its to-
tal assets; and
8
<PAGE>
(g) The Portfolio may not pledge, mortgage or hypothecate more than 33% of
its total assets at fair market value.
The Portfolio's investment objective and investment limitations (a), (b),
(d), (e) and (f.1) listed above are fundamental policies and may be changed
only with the approval of the holders of a majority of the outstanding voting
securities of the Portfolio. The other investment limitations described here,
those not specified as fundamental in the Statement of Additional Information,
and the Portfolio's investment policies are not fundamental, and the Fund's
Board of Trustees may change them without shareholder approval.
PORTFOLIO TRANSACTIONS
The Portfolio's Investment Advisory Agreement authorizes the Adviser to se-
lect the brokers or dealers that will execute the purchases and sales of in-
vestment securities for the Portfolio. The Agreement directs the Adviser to
use its best efforts to obtain the best available price and most favorable ex-
ecution for all the Portfolio's transactions.
It is not the Fund's practice to allocate brokerage or effect principal
transactions with dealers 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.
Some securities considered for investment by the Portfolio may also be ap-
propriate for other clients served by the Adviser. If a purchase or sale of
securities is 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 fair and reasonable manner. Although there is no
specified formula for allocating such transactions, the various allocation
methods used by the Adviser, and the result of such allocations, are subject
to periodic review by the Fund's Board of Trustees.
BUYING, SELLING AND EXCHANGING SHARES
Shares of each Portfolio and Class may be purchased through any Service
Agent having selling or service agreements with UAM Fund Distributors, Inc.
(the "Distributor") without a sales commission, at the net asset value per
share next determined after an order is received by the Fund or the designated
Service Agent. See "Service and Distribution Plans" and "How Share Prices are
Determined." The required minimum initial investment for the Portfolio is
$2,500, with certain exceptions as may be determined from time to time by the
Officers of the Fund. The initial investment minimum for IRA accounts is $500.
The initial investment minimum for spousal IRA accounts is $250. The minimum
for any subsequent investment is $100. The Portfolio issues two classes of
shares: Institutional Class and Service Class. The two classes of shares each
represent interests in the same portfolio of investments, have the same rights
and are identical in all respects, except that the Service Class Shares of-
fered by this Prospectus bear shareholder servicing expenses and distribution
plan expenses, and have exclusive voting rights with respect to the Rule 12b-1
Distribution Plan pursuant to which the distribution fee may be paid. The two
classes have different exchange privileges. See "How to Exchange Shares." The
net income attributable to Service Class Shares and the dividends payable on
Service Class Shares will be reduced by the amount of the shareholder servic-
ing and distribution fees; accordingly, the net asset value of the Service
Class Shares will be reduced by such amount to the extent the Portfolio has
undistributed net income.
Some Service Agents may also impose additional or different conditions or
other account fees on the purchase and redemption of Portfolio shares, which
are not subject to the Rule 12b-1 Service and Distribution Plans. Each Service
Agent is responsible for transmitting to its customers a schedule of any such
fees and information regarding any additional or different conditions regard-
ing purchases and redemptions. Shareholders who are customers of Service
Agents should consult their Service Agent for information regarding these fees
and conditions. Amounts paid to Service Agents may include transaction fees
and/or service fees paid by the Fund from the Fund assets attributable to the
Service Agent, and would not be imposed if shares of the Portfolio were pur-
chased directly from the Fund or the Distributor. The Service Agents may pro-
vide shareholder services to their customers that are not available to a
shareholder dealing directly with the Fund. A salesperson and any other person
entitled to receive compensation for selling or servicing Portfolio shares may
receive different compensation with respect to one particular class of shares
over another in the Fund.
If you buy shares of a Portfolio through a Service Agent, the Service Agent
must receive your investment order before the close of trading on the New York
Stock Exchange ("NYSE"), generally 4:00 p.m. (Eastern Time) and transmit it to
the Fund's Sub-Transfer Agent (prior to the close of the Sub-Transfer Agent's
business day) and the Distributor to receive that day's offering price. Proper
payment for the order must be received by the Sub-Transfer Agent no later than
the time when the Portfolio is priced on the following business day. Service
Agents are responsible
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<PAGE>
to their customers, the Fund and its Distributor for timely transmission of
all subscription and redemption requests, investment information, documenta-
tion and money.
HOW TO BUY SHARES BY MAIL
An account may be opened with the assistance of your Service Agent by com-
pleting and signing an Account Registration Form, and forwarding it, together
with a check payable to UAM Funds Trust, to:
UAM Funds Trust
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
The carbon copy (manually signed) of the Account Registration Form must be
mailed to:
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
Payment for the purchase of shares received by mail will be credited to your
account at the net asset value per share of the Portfolio next determined af-
ter receipt. Such payment need not be converted into Federal Funds (monies
credited to the Fund's Custodian Bank, by a Federal Reserve Bank) before ac-
ceptance by the Fund.
HOW TO BUY BY WIRE
Shares of the Portfolio may also be purchased by wiring Federal Funds to the
Fund's Custodian Bank (see instructions below). In order to insure prompt
crediting of the Federal Funds wire, it is important to follow these steps:
a) Your Service Agent should telephone the Fund's Transfer Agent (toll-free
1-800-638-7983) and provide the account name, address, telephone number,
social security or taxpayer identification number, the Portfolio se-
lected (Service Class Shares), the amount being wired and the name of
the bank wiring the funds. (Investors with existing accounts should also
notify the Fund prior to wiring funds.) An account number will then be
provided to you;
(b) Instruct your bank to wire the specified amount to the Fund's Custodi-
an;
The Chase Manhattan Bank
ABA #021000021
UAM Funds
Credit DDA #9102772952
(Your Account Registration)
(Your Account Number)
(Wire Control Number)
(c) A completed Account Registration Form must be forwarded to the UAM
Funds Service Center and UAM Fund Distributors, Inc. at the addresses
shown thereon as soon as possible. Federal Funds purchases will be ac-
cepted only on a day on which the New York Stock Exchange and the Cus-
todian Bank are open for business.
ADDITIONAL INVESTMENTS
You may add to your account at any time (minimum additional investment is
$100) by purchasing shares at net asset value through your Service Agent or by
mailing a check to the UAM Funds Service Center (payable to "UAM Funds Trust")
at the above address or by wiring monies to the Custodian Bank using the in-
structions outlined above. It is very important that your account number, ac-
count name, class of shares, and the Portfolio to be purchased, are specified
on the check or wire to insure proper crediting to your account. In order to
insure that your wire orders are invested promptly, you are requested to no-
tify the Fund (toll-free 1-800-638-7983) prior to the wire date. Mail orders
should include, when possible, the "Invest by Mail" stub which accompanies any
Fund confirmation statement.
OTHER PURCHASE INFORMATION
Non-securities dealer Service Agents may receive transaction fees that are
the same as distribution fees paid to dealers.
The purchase price of the shares of the Portfolio is the net asset value
next determined after the order and payment is received. (See "How Share
Prices are Determined.") An order and payment received prior to the close of
the New
10
<PAGE>
York Stock Exchange (the "NYSE") will be executed at the price computed on the
date of receipt; an order received after the close of the NYSE will be exe-
cuted at the price computed on the next day the NYSE is open.
The Fund reserves the right, in its sole discretion, to suspend the offering
of shares of either Class of the Portfolio or reject purchase orders when, in
the judgment of management, such suspension or rejection is in the best inter-
ests of the Fund.
Purchases of shares will be made in full and fractional shares of the Port-
folio calculated to three decimal places. In the interest of economy and con-
venience, certificates for shares will not be issued except at the written re-
quest of the shareholder. Certificates for fractional shares, however, will
not be issued.
IN-KIND PURCHASES
Under certain circumstances, investors who own securities may be able to ex-
change them directly for shares of the Portfolio without converting their in-
vestments into cash first. The Portfolio will accept such in-kind purchases
only if the securities offered for exchange meet the Portfolio's investment
criteria, which are set forth in the "Details on Investment Policies" section
of this Prospectus. Once accepted, the shares will be valued according to the
process described in "How Share Prices are Determined" at the same time the
Portfolio's shares are valued. Once a value has been determined for both, an
exchange will be made. All dividends, interest, subscription, or other rights
pertaining to these securities become the Fund's property; if you receive any
such items, you must deliver them to the Fund immediately. Securities acquired
through an in-kind purchase will be acquired for investment and not for imme-
diate resale.
The Fund will not accept securities for exchange unless they meet the fol-
lowing criteria:
. The securities are eligible to be included in the Portfolio and market
quotes can readily be obtained for them, e.g., as evidenced by a list-
ing on the American Stock Exchange, the NYSE, NASDAQ or a foreign ex-
change.
. The investor assures the Fund that the securities are liquid and not
subject to any restrictions under the Securities Act of 1933 or any
other law or regulation.
. The value of the securities exchanged does not increase the Portfo-
lio's position in any specific issuer's security to more than 5% of
the Portfolio's net assets.
For tax purposes, the IRS generally treats any exchange of securities for
Portfolio shares as a sale of the securities. This means that if you exchange
securities which have appreciated in value since you bought them, you will re-
alize capital gains and incur a tax liability. If you are interested in such
an exchange, we suggest you discuss any potential tax liability with your tax
adviser before proceeding. Investors interested in such exchanges should con-
tact the Adviser.
HOW TO SELL SHARES
You may sell shares by telephone or mail at any time, free of charge. Your
shares will be valued at the next price calculated after we receive your in-
structions to sell.
BY MAIL:
To redeem by mail, include
. your share certificates, if we have issued them to you;
. a letter which tells us how many shares you wish to redeem or, alter-
natively, what dollar amount you wish to receive;
. a signature guaranteed by your bank, broker or other financial insti-
tution (see "Signature Guarantees" below); and
. any other necessary legal documents, in the case of estates, trusts,
guardianships, custodianships, corporations, pension and profit-shar-
ing plans and other organizations.
Your request should be addressed to:
UAM Funds Trust
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
or to your Service Agent.
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<PAGE>
If you are not sure of which documents to send, please contact the UAM Funds
Service Center at 1-800-638-7983.
BY TELEPHONE
To redeem shares by telephone, you must have completed an Account Registra-
tion Form and have returned it to the Fund. Once this form is on file, simply
call the Fund and request the redemption amount to be mailed to you or wired
to your bank. The Fund and the Fund's Transfer Agent will employ reasonable
precautions to make sure that the instructions communicated by telephone are
genuine, and they may be liable for losses if they fail to do so. You will be
asked to provide certain personal identification when you open an account, and
again, when you request a telephone redemption. In addition, all telephone
transaction requests will be recorded, and investors may be required to pro-
vide additional telecopied written instructions of such transaction requests.
Neither the Fund nor the Transfer Agent will be responsible for any loss, ad-
ditional cost or expense for following transaction instructions received by
telephone that it reasonably believes are genuine.
To change the commercial bank or the account designated to receive redemp-
tion proceeds, a written request must be sent to the Fund at the address on
the cover of this Prospectus. Requests to change the bank or account must be
signed by each shareholder and each signature must be guaranteed. You cannot
redeem shares by telephone if you hold stock certificates for these shares.
Please contact one of the Fund's representatives at 1-800-638-7983 for further
details.
SIGNATURE GUARANTEES
To protect your account, the Fund and the Fund's Transfer Agent from fraud,
signature guarantees are required for certain redemptions. Signature guaran-
tees are used to verify that the person who authorizes a redemption is, in
fact, the registered shareholder. They are required whenever you:
. redeem shares and request that the proceeds be sent to someone other
than the registered shareholder(s) or to an address which is not the
registered address; or
. transfer shares from one Portfolio to another.
Signatures must be guaranteed by an "eligible guarantor institution" as de-
fined in Rule 17Ad-15 under the Securities Exchange Act of 1934. (The UAM
Funds Service Center can provide you with a full definition of the term.) You
can obtain a signature guarantee at almost any bank, as well as through most
brokers, dealers, credit unions, national securities exchanges, registered se-
curities associations, clearing agencies and savings associations. 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 el-
igible guarantor institution which participates in a signature guarantee pro-
gram. A notary public can not provide a signature guarantee.
The signature guarantee must appear either:
. on the written request for redemption; or
. on a separate instrument for assignment (a "stock power") which should
specify the total number of shares to be redeemed; or
. on all stock certificates tendered for redemption, and, if shares held
by the Fund are also being redeemed, then on the letter or stock pow-
er.
FURTHER INFORMATION ON SELLING SHARES
Normally, the Fund will make payment for all shares sold under this proce-
dure within one business day after we receive a request. In no event will pay-
ment be made more than seven days after receipt of a redemption (sale) request
in good order. The Fund may suspend the right of redemption or postpone the
date at times when either the NYSE and Custodian Bank are closed, or under any
emergency circumstances as determined by the Commission.
If the Fund's Board of Trustees determines that it would be detrimental to
the best interests of the remaining shareholders of the Fund to make payments
wholly or partly in cash, the Fund may pay the redemption proceeds in whole or
in part by a distribution in-kind of liquid securities held by the Portfolio
instead of cash in conformity with applicable rules of the Commission. Invest-
ors may incur brokerage charges when they sell portfolio securities received
in payment of redemptions.
HOW TO EXCHANGE SHARES
You may exchange Service Class Shares of the Portfolio for any other Service
Class Shares of a Portfolio included in the UAM Funds which is comprised of
the Fund and UAM Funds, Inc. (See the list of Portfolios of the UAM Funds
12
<PAGE>
- --Service Class Shares at the end of this Prospectus.) When you exchange
shares you sell your old shares and buy new ones, both at the price calculated
after the next market close. There is no sales charge for exchanges. Exchange
requests may be made by mail, telephone or through a Service Agent. Telephone
exchanges may be made only if the Fund holds all share certificates and if the
registration of the two accounts is identical. Telephone exchanges received
before 4:00 p.m. Eastern Time will be processed at the share price set after
the market closes on the same day. Exchanges received after 4:00 p.m. Eastern
Time will be executed at the share price determined at the market close on the
following day. For additional information regarding responsibility for the au-
thenticity of telephone instructions, see "How to Sell Shares--By Telephone"
above. The Fund may also limit both the frequency and the amount of exchanges
permitted if it is in the interest of the Fund's shareholders. The exchange
privilege is only available with respect to Portfolios that are registered for
sale in a shareholder's state of residence.
Please review a Portfolio's investment objective before shifting money into
it. Make sure its objective and strategies fit with your long-term goals. Be-
fore exchanging into a Portfolio, read its Prospectus. You may obtain one for
the Portfolio(s) you are interested in by calling the UAM Funds Service Center
at 1-800-638-7983. Remember, every time you exchange shares of one Portfolio
for another, your transaction is counted as a sale of the first security and a
purchase of the second. As a result, you may incur a tax liability by exchang-
ing shares if your investment has appreciated since you bought it. Consult
your tax adviser to determine your liability for capital gains taxes.
SERVICE AND DISTRIBUTION PLANS
Under the Service Plan for Service Class Shares, adopted pursuant to Rule
12b-1 under the 1940 Act, the Fund may enter into service agreements with
Service Agents (broker-dealers or other financial institutions) who receive
fees with respect to the Fund's Service Class Shares owned by shareholders for
whom the Service Agent is the dealer or holder of record, or for whom the
Service Agent performs Servicing, as defined below. These fees are paid out of
the assets allocable to Service Class Shares to the Distributor, to the Serv-
ice Agent directly or through the Distributor. The Fund reimburses the Dis-
tributor or the Service Agent, as the case may be, for payments made at an an-
nual rate of up to 0.25 of 1% of the average daily value of Service Class
Shares owned by clients of such Service Agent during the period payments for
Servicing are being made to it. Such payments are borne exclusively by the
Service Class Shares. Each item for which a payment may be made under the
Service Plan constitutes personal service and/or shareholder account mainte-
nance and may constitute an expense of distributing Fund shares as the Commis-
sion construes such term under Rule 12b-1. The fees payable for Servicing are
payable without regard to actual expenses incurred, subject to adjustment of
the fee prospectively to reflect actual expenses.
Servicing may include, among other things, one or more of the following ren-
dered with respect to the Service Class shareholders: answering client inqui-
ries regarding the Fund; assisting clients in changing dividend options, ac-
count designations and addresses; performing sub-accounting; establishing and
maintaining shareholder accounts and records; processing purchase and redemp-
tion transactions; investing client cash account balances automatically in
Service Class Shares; providing periodic statements showing a client's account
balance and integrating such statements with those of other transactions and
balances in the client's other accounts serviced by the Service Agent; arrang-
ing for bank wires; and such other services as the Fund may request, to the
extent the Service Agent is permitted by applicable statute, rule or regula-
tion.
The Glass-Steagall Act and other applicable laws prohibit Federally chart-
ered or supervised banks from engaging in certain aspects of the business of
issuing, underwriting, selling and/or distributing securities. Accordingly,
banks will be engaged to act as Service Agents only to perform administrative
and shareholder servicing functions, including transaction-related agency
services for their customers. If a bank were prohibited from so acting, its
shareholder clients would be permitted to remain Fund shareholders and alter-
native means for continuing the Servicing of such shareholders would be
sought.
The Distributor promotes the distribution of the Service Class Shares in ac-
cordance with the terms of a Distribution Plan adopted pursuant to Rule 12b-1
under the 1940 Act. The Distribution Plan provides for the use of Fund assets
allocable to Service Class Shares to pay expenses of distributing such shares.
The Distribution Plan and Service Plan (the "Plans") were approved by the
Board of Trustees, including a majority of the trustees who are not "inter-
ested persons" of the Fund as defined in the 1940 Act (and each of whom has no
direct or indirect financial interest in the Plans or any agreement related
thereto, referred to herein as the "12b-1 Trustees"). The Plans may be termi-
nated at any time by the vote of the Board or the 12b-1 Trustees, or by the
vote of a majority of the outstanding Service Class Shares of the MJI Interna-
tional Equity Portfolio.
While the Plans continue in effect, the selection of the 12b-1 Trustees is
committed to the discretion of such persons then in office. The Plans provide
generally that a Portfolio may incur distribution and service costs under the
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<PAGE>
Plans which may not exceed in the aggregate .75% per annum of that Portfolio's
net assets. The Board has currently limited aggregate payments under the Plans
to .50% per annum of a Portfolio's net assets. The Service Class Shares of-
fered by this Prospectus currently are not making payments under the Distribu-
tion Plan. Upon implementation, the Distribution Plan would permit payments to
the Distributor, broker-dealers, other financial institutions, sales repre-
sentatives or other third parties who render promotional and distribution
services, for items such as advertising expenses, selling expenses, commis-
sions or travel reasonably intended to result in sales of Service Class Shares
and for the printing of prospectuses sent to prospective purchasers of Service
Class Shares of the MJI International Equity Portfolio.
Although the Plans may be amended by the Board of Trustees, any changes in
the Plans which would materially increase the amounts authorized to be paid
under the Plans must be approved by shareholders of the Class involved. The
total amounts paid under the foregoing arrangements may not exceed the maximum
limits specified above, and the amounts and purposes of expenditures under the
Plans must be reported to the 12b-1 Trustees quarterly. The amounts allowable
under the Plans for each Class of Shares of the Portfolio are also limited un-
der certain rules of the National Association of Securities Dealers, Inc.
In addition to payments by the Fund under the Plans, the Distributor, United
Asset Management Corporation ("UAM"), the parent company of the Adviser, the
Adviser, or any of their affiliates, may, at its own expense, compensate a
Service Agent or other person for marketing, shareholder servicing, record-
keeping and/or other services performed with respect to the Fund, a Portfolio
or any Class of Shares of a Portfolio. The person making such payments may do
so out of its revenues, its profits or any other source available to it. Such
services arrangements, when in effect, are made generally available to all
qualified service providers. The Adviser may compensate its affiliated compa-
nies for referring investors to the Portfolios.
The Distributor, the Adviser and certain of their other affiliates also par-
ticipate, at the date of this Prospectus, in an arrangement with Smith Barney
Inc. under which Smith Barney provides certain defined contribution plan mar-
keting and shareholder services and receives from such entities an amount
equal to up to 33.3% of the portion of the investment advisory fees attribut-
able to the invested assets of Smith Barney's eligible customer accounts with-
out regard to any expense limitation in addition to amounts payable to all
selling dealers. The Fund also compensates Smith Barney for services it pro-
vides to certain defined contribution plan shareholders that are not otherwise
provided by the Administrator.
HOW SHARE PRICES ARE DETERMINED
The net asset value per share of each Class of the Portfolio is calculated
every day that the NYSE is open. This means that shares are revalued after the
market closes, generally at 4:00 p.m. Eastern Time on Monday through Friday,
except for major holidays when the NYSE is closed. The per share net asset
value of the Service Class Shares may be lower than the per share net asset
value of the Institutional Class Shares reflecting the daily expense accruals
of the shareholder servicing, distribution and transfer agency fees applicable
to the Service Class Shares.
The value of the Portfolio share is determined by adding up the total market
value of all the securities in the Portfolio plus cash and other assets, de-
ducting liabilities and then dividing by the total number of shares outstand-
ing.
For stocks, we use the last quoted trading price as the market value. For
listed stocks, we use the price quoted by the exchange on which the stock is
primarily traded. Unlisted stocks and listed stocks which have not been traded
on the valuation date or for which market quotations are not readily available
are valued at a price between the last price asked and the last price bid. For
valuation purposes, quotations of foreign securities in a foreign currency are
converted to U.S. dollar equivalents based upon the bid price of such curren-
cies against U.S. dollars quoted by any major bank or by a broker. The value
of other assets and securities for which no quotations are readily available
(including restricted securities) is determined in good faith at fair value
using methods determined by the Fund's Board of Trustees.
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
DIVIDENDS
Stocks generate income in the form of dividends. The Portfolio will normally
distribute substantially all of its net investment income (for tax purposes)
to shareholders of both of its classes in the form of an annual dividend. If
any net capital gains are realized, the Portfolio will normally distribute
such gains annually. You must instruct the Portfolio to pay out dividends and
distributions in cash to you or to reinvest them. The Account Registration
Form has a box for your instructions. Unless you specifically tell us to dis-
tribute dividend income in cash, however, we will assume you want this income
reinvested. The per share dividends and distributions on Service Class Shares
generally will be lower
14
<PAGE>
than the per share dividends and distributions on Institutional Class Shares
as a result of the shareholder servicing, distribution and any transfer agency
fees, applicable to the Service Class Shares.
Reinvested dividend distributions will affect your tax liability. By law,
you must pay taxes on any dividend or interest income you receive on your in-
vestments whether distributed in cash or reinvested in shares. The Portfolio
will send you a statement annually telling you exactly how much dividend in-
come you have earned for tax purposes.
CAPITAL GAINS
Capital gains are another source of appreciation to the Portfolio. Basical-
ly, a gain is an increase in the value of a stock or bond. However, for tax
purposes, the Portfolio does not "realize" a capital gain unless it sells a
stock or bond which has appreciated.
You can incur capital gains in two ways. First, if the Portfolio buys a
stock or bond at one price, then sells it at a higher price, it will realize a
capital gain. At the end of the year, the capital gains computed under tax
rules that the Portfolio has made are added up and capital losses are sub-
tracted. If any net capital gains are realized, the Portfolio will normally
distribute such gains annually. You will receive a statement at the end of the
year informing you of your share of the Portfolio's capital gains.
The second way to incur capital gains is to sell or exchange your shares. If
you sell shares at a higher price than you bought them at, you will be respon-
sible for paying taxes on your gain. There are several ways to determine your
tax liability, and we suggest you contact a qualified tax adviser to help you
decide which is best for you.
TAXES
The Portfolio intends to qualify each year as a "regulated investment compa-
ny" under Federal tax law, and if it qualifies, the Portfolio will not be lia-
ble for Federal income taxes, because it will have distributed all its net in-
vestment income and net realized capital gains to shareholders. Shareholders
will then have to pay taxes on the dividends, and on gains whether they are
distributed as cash or are reinvested in shares. Dividends and short-term cap-
ital gains will be taxed as ordinary income. Long-term capital gains distribu-
tions are taxed as long-term capital gains. Such dividends and distributions
may be subject to state and local taxes. Redemptions of shares in the Portfo-
lio are taxable events for Federal income tax purposes. A shareholder may also
be subject to state and local taxes on such redemptions.
Dividends declared in October, November and December to shareholders of rec-
ord in such a month will be treated as if they had been paid by the Fund and
received by the shareholders on December 31 of the same calendar year, pro-
vided that the dividends are paid before February of the following year.
The Fund is required by Federal law to withhold 31% of reportable payments
(which may include dividends, capital gains distributions and redemptions)
paid to shareholders who have not complied with IRS regulations. In order to
avoid this withholding requirement, you must certify on the Account Registra-
tion Form or on a separate form supplied by the Fund that your Social Security
or Taxpayer Identification Number you have provided is correct and that you
are not currently subject to backup withholding or that you are exempt from
backup withholding.
Dividends and interest received by the Portfolio may give rise to withhold-
ing and other taxes imposed by foreign countries. These taxes reduce the Port-
folio's dividends but are included in the taxable income reported on your tax
statement if the Portfolio qualifies for this tax treatment and elects to pass
it through to you. You may be able to claim an offsetting tax credit or item-
ized deduction for foreign taxes paid by the Portfolio. Your tax statement
will generally show the amount of foreign tax for which a credit or deduction
may be available.
FUND MANAGEMENT AND ADMINISTRATION
INVESTMENT ADVISER
The Adviser is an international investment adviser and is an affiliate of
the MJ Group, in Glasgow, Scotland. The MJ Group's origins date back to 1907,
and it currently has $7 billion in assets under management. The MJ Group has a
200-member staff including 40 investment professionals. It became a subsidiary
of United Asset Management Corporation ("UAM") in 1993. The Adviser, the SEC-
registered entity within the MJ Group, has $1.4 billion of assets under man-
agement and has U.S. offices in Chicago.
The Portfolio pays an annual fee in monthly installments to the Adviser for
advisory services. This fee is accrued daily and paid every month as a per-
centage of the average net assets in the Portfolio for that month. The per-
centage fee on an annual basis is 0.75%. This investment advisory fee is
higher than that paid by many mutual funds but not necessarily higher than
fees paid by funds with investment objectives similar to that of the Portfo-
lio.
15
<PAGE>
The investment professional at the Adviser responsible for the day-to-day
management of the Portfolio and his qualifications are as follows:
RODGER SCULLION, MANAGING DIRECTOR OF THE ADVISER, has 25 years of invest-
ment experience, the last 13 years based in Glasgow with the MJ Group. He is
the portfolio manager of the Murray Smaller Markets Investment Trust, a
closed-end investment fund registered in the United Kingdom, which invests in
as many as [45] markets worldwide. Mr. Scullion is the Adviser's Chief Invest-
ment Officer and the lead person on the country allocation team. During his
tenure at the MJ Group, he has held portfolio management responsibilities for
investments in the U.S., Europe, Japan and the Far East.
ADMINISTRATOR
Pursuant to a Fund Administration Agreement dated April 15, 1996, UAM Fund
Services, Inc. ("UAMFSI") a wholly-owned subsidiary of United Asset Management
Corporation with its principal office located at 211 Congress Street, Boston,
MA 02110, is responsible for performing and overseeing administration, fund
accounting, dividend disbursing and transfer agency services provided to the
Fund and its Portfolios. UAMFSI has subcontracted the performance of certain
of such services to Chase Global Funds Services Company ("CGFSC"), an affili-
ate of The Chase Manhattan Bank, pursuant to a Mutual Funds Service Agreement
dated April 15, 1996. CGFSC is located at 73 Tremont Street, Boston, MA 02108-
3913. Effective April 1, 1996, The Chase Manhattan Corporation, the parent of
The Chase Manhattan Bank merged with and into Chemical Banking Corporation,
the parent company of Chemical Bank. Chemical Banking Corporation is the sur-
viving corporation and will continue its existence under the name "The Chase
Manhattan Corporation".
Each Portfolio pays to UAMFSI a monthly fee comprised of two parts: a Port-
folio-specific fee which is retained by UAMFSI and a sub-administration fee
which UAMFSI in turn pays to CGFSC. The Portfolio-specific fee for the MJI In-
ternational Equity Portfolio is 0.06% of aggregate net assets. The sub-admin-
istration fee calculated on an annualized basis equals: 0.19 of 1% of the
first $200 million of total net assets of the Fund; 0.11 of 1% of the next
$800 million of total net assets of the Fund; 0.07 of 1% of total net assets
in excess of $1 billion but less than $3 billion; and 0.05 of 1% of total net
assets in excess of $3 billion. The sub-administration fees are allocated
among the Portfolios on the basis of their relative assets and are subject to
a graduated minimum fee schedule per Portfolio of $2,000 per month upon incep-
tion of a Portfolio to $70,000 annually after two years. If a separate class
of shares is added to a Portfolio, the minimum annual fee payable by that
Portfolio may be increased by up to $20,000.
DISTRIBUTOR
UAM Fund Distributors, Inc. a wholly-owned subsidiary of UAM with its prin-
cipal office located at 211 Congress Street, Boston, Massachusetts 02110, dis-
tributes the shares of the Fund. Under the Fund's Distribution Agreement (the
"Agreement"), the Distributor, as agent of the Fund, agrees to use its best
efforts as sole distributor of the Fund's shares. The Distributor does not re-
ceive any fee or other compensation under the Agreement with respect to this
Portfolio. The Agreement continues in effect as long as the Fund's Board of
Trustees, including a majority of the Trustees who are not parties to the
Agreement or interested persons of any such party, approve it on an annual ba-
sis. This Agreement provides that the Fund will bear the costs of the regis-
tration of its shares with the Commission and various states and the printing
of its prospectuses, statements of additional information and reports to
shareholders.
CUSTODIAN
The Chase Manhattan Bank serves as custodian of the Fund's assets.
ACCOUNTANTS
Price Waterhouse LLP acts as the independent accountants for the Fund and
audits its financial statements annually.
SUB-ADMINISTRATOR, SUB-TRANSFER AND SUB-DIVIDEND DISBURSING AGENT
Chase Global Funds Services Company, 73 Tremont Street, Boston, MA 02108,
acts as sub-administrator, sub-transfer agent and sub-dividend disbursing
agent for the Fund.
REPORTS
Investors will receive unaudited semi-annual financial statements and annual
financial statements audited by Price Waterhouse LLP.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be made by writing to the Fund at the address
listed on the cover of this Prospectus or by calling 1-800-638-7983.
16
<PAGE>
LITIGATION
The Fund is not involved in any litigation.
GENERAL FUND INFORMATION
The Portfolio is one of a series of investment portfolios available through
UAM Funds Trust, an open-end investment company known as a "mutual fund." Each
of the Portfolios which make up the Fund have different investment objectives
and policies. Together, the Portfolios offer a diverse set of risk and return
characteristics to suit a wide range of investor needs. The Fund was organized
under the name "The Regis Fund II" on May 18, 1994 as a Delaware business
trust. On October 31, 1995, the name was changed to "UAM Funds Trust."
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Officers of the Fund manage its day-to-day operations and are responsi-
ble to the Fund's Board of Trustees. The Trustees set broad policies for the
Fund and elect its Officers.
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 sharehold-
ers.
The shares of each Portfolio and Class of the Fund have non-cumulative vot-
ing rights, which means that the holders of more than 50% of the shares voting
for the election of Trustees can elect 100% of the Trustees if they choose to
do so. A shareholder is entitled to one vote for each full share held (and a
fractional vote for each fractional share held), then standing in his or her
name on the books of the Fund. As of July 31, 1996, Hartnat & Co., Boston, MA
held of record 42% of the Portfolio's Institutional Class Shares for which
ownership is disclaimed or presumed disclaimed. The persons or organizations
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 re-
sult, 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 share-
holders of such Portfolio. Both Institutional Class and Service Class Shares
represent an interest in the same assets of a Portfolio and are identical in
all respects except that the Service Class Shares bear certain expenses re-
lated to shareholder servicing, and the distribution of such shares and have
exclusive voting rights with respect to matters relating to such distribution
expenditures. Information about the Institutional Class Shares of the Portfo-
lios along with the fees and expenses associated with such shares is available
upon request by contacting the Fund at 1-800-638-7983. The Fund will not ordi-
narily hold shareholder meetings except as required by the 1940 Act and other
applicable laws. The Fund has undertaken that its Trustees will call a meeting
of shareholders if such a meeting is requested in writing by the holders of
not less than 10% of the outstanding shares of the Fund. To the extent re-
quired by the undertaking, the Fund will assist shareholder communications in
such matters.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR IN THE PORTFOLIO'S
STATEMENT OF ADDITIONAL INFORMATION, IN CONNECTION WITH THE OFFERING MADE BY
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR ITS REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFERING BY THE FUND IN ANY JURISDICTION IN WHICH SUCH
OFFERING MAY NOT BE LAWFULLY MADE.
17
<PAGE>
UAM FUNDS -- SERVICE CLASS SHARES
BARROW, HANLEY, MEWHINNEY & STRAUSS, INC.
BHM&S Total Return Bond Portfolio
MURRAY JOHNSTONE INTERNATIONAL LTD.
MJI International Equity Portfolio
NWQ INVESTMENT MANAGEMENT COMPANY
NWQ Balanced Portfolio
SIRACH CAPITAL MANAGEMENT, INC.
Sirach Growth Portfolio
Sirach Special Equity Portfolio
TOM JOHNSON INVESTMENT MANAGEMENT, INC.
TJ Core Equity Portfolio
18
<PAGE>
UAM FUNDS
UAM FUNDS SERVICE CENTER
C/O CHASE GLOBAL FUNDS SERVICES COMPANY
P.O. BOX 2798
BOSTON, MA 02208-2798
1-800-638-7983
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NEWBOLD'S EQUITY PORTFOLIO
INSTITUTIONAL CLASS SHARES
INVESTMENT ADVISER: NEWBOLD'S ASSET MANAGEMENT, INC.
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PROSPECTUS -- AUGUST 28, 1996
Newbold's Equity Portfolio is one of a series of investment portfolios
available through UAM Funds Trust (hereinafter defined as "UAM Funds" or the
"Fund"), an open-end investment company known as a "mutual fund." Each of the
Portfolios that make up the Fund have different investment objectives and pol-
icies. In addition, several of the Fund's Portfolios offer two separate clas-
ses of shares: Institutional Class Shares and Institutional Service Class
Shares. Newbold's Equity Portfolio currently offers two classes of shares. The
securities offered in this Prospectus are Institutional Class Shares of one
diversified, no-load Portfolio of the Fund managed by Newbold's Asset Manage-
ment, Inc.
The Newbold's Equity Portfolio seeks to achieve maximum long-term total re-
turn, consistent with reasonable risk to principal, by investing primarily in
a diversified portfolio of undervalued equity securities of statistically at-
tractive companies. There can be no assurance that the Portfolio will achieve
its stated objective.
Please keep this Prospectus for future reference since it contains informa-
tion that you should understand before you invest. You may also wish to review
the Newbold's Equity Portfolio's "Statement of Additional Information" dated
August 28, 1996 which was filed with the Securities and Exchange Commission
and has been incorporated by reference into this Prospectus. (It is legally
considered to be a part of this Prospectus). Please call or write the Fund at
the above address to obtain a free copy of this Statement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THESECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COM-
MISSION PASSED UPON THE ACCURACY OF THIS PROSPECTUS. ANY REPRE-
SENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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TABLE OF CONTENTS
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PAGE
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<S> <C>
Fees and Expenses.......................................................... 1
Summary: About the Portfolio............................................... 2
Risk Factors............................................................... 2
Financial Highlights....................................................... 3
Performance Calculations................................................... 4
Details on Investment Policies............................................. 4
Investment Limitations..................................................... 8
Buying, Selling and Exchanging Shares...................................... 9
How Share Prices are Determined............................................ 12
Dividends, Capital Gains Distributions and Taxes........................... 13
Fund Management and Administration......................................... 13
General Fund Information................................................... 15
UAM Funds -- Institutional Class Shares.................................... 16
</TABLE>
<PAGE>
FEES AND EXPENSES
Investors will be charged various fees and expenses incurred in managing the
Newbold's Equity Portfolio (the "Portfolio") including:
SHAREHOLDER TRANSACTION EXPENSES: These are the costs entailed in buying,
selling or exchanging shares of the Portfolio. The Portfolio does not charge
investors for shareholder transaction expenses. However, transaction fees may
be charged if you are a customer of a broker-dealer or other financial inter-
mediary who has established a shareholder servicing relationship with the Fund
on behalf of their customers. Please see "Buying, Selling and Exchanging
Shares" for further information.
<TABLE>
<S> <C>
Sales Load Imposed on Purchases:...................................... NONE
Sales Load Imposed on Reinvested Dividends:........................... NONE
Deferred Sales Load:.................................................. NONE
Redemption Fees:...................................................... NONE
Exchange Fees:........................................................ NONE
</TABLE>
ESTIMATED ANNUAL FUND OPERATING EXPENSES: These expenses, which cover the
cost of administration, marketing and shareholder communication, and are usu-
ally quoted as a percentage of net assets, are factored into the Portfolio's
share price and not billed directly to shareholders. They include:
<TABLE>
<S> <C>
Investment Advisory Fees:....................................... 0.50 %
Administrative Fees:............................................ 0.39 %
12b-1 Fees:..................................................... NONE
Other Expenses:................................................. 0.74 %
Advisory Fees Waived and Expenses Assumed:...................... (0.73)%
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Total Operating Expenses (After Fee Waiver and Expenses
Assumed):...................................................... 0.90 %*
</TABLE>
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* Newbold's Asset Management, Inc., the Adviser, has agreed to waive all or a
portion of its advisory fees and to assume operating expenses otherwise
payable by the Portfolio, if necessary, in order to keep the Portfolio's
total annual operating expenses (excluding interest, taxes and extraordi-
nary expenses) from exceeding 0.90% of average daily net assets through
January 29, 1998. It is estimated that, if the Adviser did not waive fees
and assume expenses, the Portfolio's total annual operating expenses would
be 1.63% of average daily net assets.
For purposes of calculating the estimated fees and expenses set forth above,
it is assumed that the Portfolio's average daily net assets will be $11 mil-
lion.
The Adviser will not be reimbursed by the Fund for any advisory fees which
are waived or expenses which the Adviser may bear on behalf of the Portfolio.
Investors can get a better idea of how the Portfolio's operating expenses
will affect their own investments by examining the following chart. The chart
shows how much a hypothetical investor would pay in expenses, assuming that he
or she made an initial investment of $1,000, earned a 5% annual rate of return
and redeemed his or her investment at the end of the time period indicated.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
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<S> <C> <C>
Expenses.................................................... $ 9 $29
</TABLE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EX-
PENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE
SHOWN ABOVE.
1
<PAGE>
SUMMARY: ABOUT THE PORTFOLIO . . .
OBJECTIVE:
The Portfolio seeks to achieve maximum long-term total return, consistent
with reasonable risk to principal, by investing primarily in a diversified
portfolio of undervalued equity securities of statistically attractive compa-
nies. The Adviser believes that the Portfolio's performance over the long term
will be superior to its benchmark index (the Standard & Poor's 500 Stock In-
dex). There can be no assurance that the Portfolio will achieve its stated ob-
jective.
HOW IS THE PORTFOLIO MANAGED?
Newbold's Asset Management, Inc. (the "Adviser") believes that investment
value and return can be achieved by investing in stocks with a low price rela-
tive to current earnings. This bottom-up approach seeks to identify companies
whose earnings growth suggests an increasing stream of future dividend income
and whose share prices represent a level below realizable value.
WHO MANAGES THE PORTFOLIO?
The Adviser is a registered investment adviser. Founded in 1940, the firm
currently has over $7 billion in assets under management. The Adviser is a
wholly-owned subsidiary of United Asset Management Corporation. (See "Fund
Management and Administration.")
WHO SHOULD INVEST IN THE PORTFOLIO?
The Portfolio is suitable for investors who seek maximum long-term total re-
turn in their investments and who are comfortable with aggressively seeking
long-term returns.
HOW TO INVEST
The Fund offers shares of the Portfolio through UAM Fund Distributors, Inc.
to investors without a sales commission at net asset value next determined af-
ter the purchase order is received in proper form. Share purchases may be made
by sending investments directly to the Fund. The minimum initial investment in
the Portfolio is $2,500 with certain exceptions as may be determined from time
to time by the officers of the Fund. The initial investment minimum for IRA
accounts is $500. The initial investment minimum for spousal IRA accounts is
$250. The minimum for any subsequent investment is $100. (See "Buying, Selling
and Exchanging Shares.")
DIVIDENDS AND DISTRIBUTIONS
The Portfolio will normally distribute substantially all of its net invest-
ment income in the form of quarterly dividends. Any realized net capital gains
will also be distributed annually. Distributions will be reinvested in the
Portfolio's shares automatically unless an investor elects to receive cash
distributions. (See "Dividends, Capital Gains Distributions and Taxes.")
HOW TO REDEEM
Shares of the Portfolio may be redeemed on any business day when the New
York Stock Exchange ("NYSE") is open, without cost, at the net asset value of
the Portfolio next determined after receipt of the redemption request. The
Portfolio's share price will fluctuate with market and economic conditions.
Therefore, your investment may be worth more or less when redeemed than when
purchased. (See "Buying, Selling and Exchanging Shares.")
ADMINISTRATIVE SERVICES
UAM Fund Services, Inc. (the "Administrator"), a wholly-owned subsidiary of
United Asset Management Corporation ("UAM"), is responsible for performing and
overseeing administration, fund accounting, dividend disbursing and transfer
agency services provided to the Fund and its Portfolios by third-party service
providers. (See "Fund Management and Administration.")
RISK FACTORS
Investing in the Portfolio entails a number of risks as with any stock in-
vestment. Like any stock investment, shares of the Portfolio will rise and
fall in value depending on market perceptions of the value of the underlying
stocks. Share prices may also be affected by overall market movements and by
changes in sector or industry performance.
2
<PAGE>
In addition, you should consider the following factors that could effect the
Portfolio's rate of return:
. The Portfolio may engage in various strategies to seek to hedge its in-
vestments against movements in security prices by the use of derivatives
including options and futures as well as options on futures. Such strate-
gies are commonly referred to as "derivatives" and involve the risk of
imperfect correlation in movements in the price of options and futures
and movements in the price of securities which are the subject of the
hedge. Options and futures transactions in foreign markets are also sub-
ject to the risk factors associated with foreign investments generally.
There can be no assurance that a liquid secondary market for options and
futures contracts will exist at any specific time.
. The Portfolio may invest in the securities of foreign issuers which may
be subject to additional risks factors, including foreign currency risks,
not applicable to securities of U.S. issuers.
. The Portfolio may invest in repurchase agreements which entail a risk of
loss should the seller default on its transaction.
. The Portfolio may lend its investment securities which entails a risk of
loss should a borrower fail financially.
. The Portfolio may purchase securities on a when-issued basis which do not
earn interest until issued and may decline or appreciate in market value
prior to their delivery to the Portfolio.
Further information about these and other risk factors is contained in the
"Details on Investment Policies" section of this Prospectus.
FINANCIAL HIGHLIGHTS
The following table provides selected per share data and ratios for a share
outstanding throughout the period presented of the Newbold's Equity Portfolio
Institutional Class Shares and is part of the Portfolio's Financial Statements
included in the Portfolio's 1996 Annual Report to Shareholders which is incor-
porated by reference into the Portfolio's Statement of Additional Information.
The Portfolio's Financial Statements have been audited by Price Waterhouse LLP
whose opinion thereon (which is unqualified) is also incorporated by reference
into the Portfolio's Statement of Additional Information. The following infor-
mation should be read in conjunction with the Portfolio's 1996 Annual Report
to Shareholders.
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<CAPTION>
SEPTEMBER 13, 1995*
TO
APRIL 30, 1996
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NET ASSET VALUE, BEGINNING OF PERIOD....................... $ 10.00
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income+.................................... 0.14
Net Realized and Unrealized Gain on Investments........... 0.98
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Total From Investment Operations......................... 1.12
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DISTRIBUTIONS
Net Investment Income..................................... (0.12)
Net Realized Gain......................................... (0.02)
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Total Distributions...................................... (0.14)
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NET ASSET VALUE, END OF PERIOD............................. $ 10.98
=======
TOTAL RETURN............................................... 11.31%++
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RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands)...................... $14,090
Ratio of Net Expenses to Average Net Assets+............... 0.90%**
Ratio of Net Investment Income to Average Net Assets+...... 2.27%**
Portfolio Turnover Rate.................................... 75%
Average Commission Rate.................................... $0.0566
</TABLE>
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* Commencement of Operations.
** Annualized.
+ Net of voluntarily waived fees and expenses assumed by the Adviser of $0.06
per share for the period ended April 30, 1996.
++ Total return would have been lower had certain fees not been waived and ex-
penses assumed by the Adviser.
3
<PAGE>
PERFORMANCE CALCULATIONS
The Portfolio measures performance by calculating total return. Total return
figures are based on historical earnings and are not intended to indicate fu-
ture performance.
Total return is the change in value of an investment in the Portfolio over a
given period, assuming reinvestment of any dividends and capital gains. A cu-
mulative or aggregate total return reflects actual performance over a stated
period of time. An average annual total return is a hypothetical rate of re-
turn that, if achieved annually, would have produced the same cumulative total
return if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same as
actual year-by-year results.
The Portfolio's performance may be compared to data prepared by independent
services which monitor the performance of investment companies, data reported
in financial and industry publications, and various indices, all as further
described in the Portfolio's Statement of Additional Information.
The Portfolio's Annual Report to Shareholders, for the most recent fiscal
year end contains additional performance information that includes comparisons
with appropriate indices. The Annual Report is available without charge upon
request to the Fund by writing to the address or calling the phone number on
the cover of this Prospectus.
DETAILS ON INVESTMENT POLICIES
INVESTMENT STRATEGY
In seeking its investment objective, the Portfolio will invest at least 65%
of its total assets, under normal circumstances, in equity securities, con-
sisting of common stock, preferred stock, convertible preferred stock, con-
vertible bonds, rights and warrants. The Portfolio will invest primarily in
equity securities of large capitalization companies which are defined as those
with equity capitalizations greater than $1 billion at the time of purchase.
The Adviser believes that investment value and return can be achieved by in-
vesting in stocks with a low price relative to current earnings. This bottom-
up approach seeks to identify companies whose earnings growth suggests an in-
creasing stream of future dividend income and whose share prices represent a
level below realizable value.
The Adviser is able to identify prospective companies through a computerized
screening process which rates on four key elements: Market capitalization --
$1 billion or more for purposes of liquidity; Dividend payout -- ordinarily
must pay cash dividends; Financial leverage -- debt should not be excessive,
and an investment grade bond rating is required; and Return on average five-
year equity -- after the three previous criteria have been applied, this eval-
uation is used as a measurement of profitability in selecting the top 500 com-
panies.
The stock issues of the top 500 companies are then sorted by price/earnings
ratio, ranked from highest to lowest and broken into five groups, each con-
sisting of 100 stocks. The bottom two groups are subject to intense fundamen-
tal analysis by the Adviser. The objective is to assemble a portfolio of 40-70
statistically attractive stocks which represent relative "value" not generally
recognized by the market. However, the Portfolio has the flexibility to invest
in less than 40 stocks or more than 70 stocks, as the Adviser deems necessary.
Earnings for cyclical stocks are normalized in this valuation process.
Once the portfolio has been constructed, its price/earnings multiples are
continually monitored. The Portfolio will stop buying a stock when its price-
/earnings ratio approaches the current price/earnings multiple of the Standard
& Poor's 500 Stock Index. The stock is sold when it moves above the market's
multiple.
When the Adviser believes that market conditions warrant a defensive posi-
tion, up to 100% of the Portfolio's assets may be held in cash and short-term
investments. See "Short-Term Investments" below for a description of the types
of short-term instruments in which the Portfolio may invest for temporary de-
fensive purposes. When the Portfolio is in a defensive position, it may not
necessarily be pursuing its stated investment objective.
OTHER INVESTMENT POLICIES
The Portfolio may also, under normal circumstances, invest up to 35% its as-
sets, unless restricted by additional limitations described below or in the
Portfolio's Statement of Additional Information, in the following securities
or investment techniques:
FOREIGN INVESTMENTS
The Portfolio may invest in foreign equity securities of developed coun-
tries. This involves additional risks not typically associated with investing
in domestic equity securities. Since the securities issued by foreign entities
may be
4
<PAGE>
denominated in foreign currencies, and the Portfolio may temporarily hold
uninvested reserves in bank deposits in foreign currencies, the Portfolio's
value may rise or fall depending on currency exchange rates. The Portfolio may
also have to pay a fee to convert funds from one currency to another.
In addition, non-U.S.-based companies are not subject to the same account-
ing, auditing and financial reporting standards as are domestic companies and
may have policies that are not comparable to those of domestic companies.
There may be less publicly-available information about non-U.S.-based compa-
nies which may make it difficult to make investment decisions. Securities of
some foreign companies are generally less liquid and more volatile than secu-
rities of comparable domestic companies. There is generally less government
supervision and regulation of stock exchanges, brokers and listed companies
than in the U.S. Political factors may have an impact in the form of confisca-
tory taxation, expropriation or political instability in international mar-
kets.
Although the Portfolio will seek the most favorable trading costs available
in any given market, investors should recognize that foreign commissions are
generally higher than those in the U.S. In addition, custodial expenses, that
is, fees paid to financial institutions for holding the Portfolio's securi-
ties, will generally be higher than would be the case in the U.S.
Some foreign governments also levy withholding taxes against dividend and
interest income. Although in some countries a portion of the taxes is recover-
able, the non-recovered portion of foreign withholding taxes will reduce the
income the Portfolio receives from the companies comprising its investments.
AMERICAN DEPOSITARY RECEIPTS
The Portfolio intends to invest primarily in U.S.-based companies. In addi-
tion, the Portfolio may purchase shares of foreign-based companies in the form
of American Depositary Receipts (ADRs). ADRs may be sponsored or unsponsored.
Sponsored ADRs are established jointly by a depositary and the underlying is-
suer, whereas unsponsored ADRs may be established without participation by the
underlying issuer. Holders of an unsponsored ADR generally bear all the costs
associated with establishing the unsponsored ADR. The depositary of an
unsponsored ADR is under no obligation to distribute shareholder communica-
tions received from the underlying issuer or to pass through voting rights to
the holders of the unsponsored ADR with respect to the deposited securities or
pool of securities.
SHORT-TERM INVESTMENTS
In order to earn a return on uninvested assets, meet anticipated redemp-
tions, or for temporary defensive purposes, the Portfolio may invest a portion
of its assets in domestic and foreign money market instruments including cer-
tificates of deposit, bankers acceptances, time deposits, U.S. government ob-
ligations, U.S. government agency securities, short-term corporate debt secu-
rities, and commercial paper rated A-1 or A-2 by Standard & Poor's Corporation
or Prime-1 or Prime-2 by Moody's Investors Service, Inc. or, if unrated, de-
termined by the Adviser to be of comparable quality.
The Fund has received an Order from the Securities and Exchange Commission
(the "Commission") for permission to deposit the daily uninvested cash bal-
ances of the Fund's Portfolios, as well as cash for investment purposes, into
one or more joint accounts and to invest the daily balance of the joint ac-
counts in the following short-term investments fully: collateralized repur-
chase agreements, interest-bearing or discounted commercial paper including
dollar-denominated commercial paper of foreign issuers, and any other short-
term money market instruments including variable rate demand notes and tax-ex-
empt money instruments. By entering into these investments on a joint basis,
it is expected that a Portfolio may earn a higher rate of return on invest-
ments relative to what it could earn individually.
The Fund has received an order from the Commission, which permits each of
its Portfolios to invest the greater of 5% of its total assets or $2.5 million
in the UAM Funds' DSI Money Market Portfolio for cash management purposes.
(See "Investment Companies.")
REPURCHASE AGREEMENTS
In a repurchase agreement, the Portfolio purchases a security and, at the
same time, arranges to sell it back to the original seller on a predetermined
date. The repurchase agreement states the price that the seller will pay for
the security plus the interest rate that the purchaser will receive while
holding it. In effect, the Portfolio is lending its funds to the seller at an
agreed upon interest rate and receiving a security as collateral for the loan.
Repurchase agreements can range from overnight to a fixed term. They are a
common way to earn interest on short-term funds.
The seller under a repurchase agreement will be required to maintain the
value of the securities subject to the agreement at not less than 100% of the
repurchase price of such securities. The Administrator and the Adviser will
mark to market daily the value of the securities purchased, and the Adviser
will, if necessary, require the seller to maintain additional securities to
ensure that the value is in compliance with the previous sentence.
5
<PAGE>
There are some risks involved in repurchase agreements. If the seller de-
faults on its agreement to buy back the securities and the value of those se-
curities falls, the Portfolio may incur losses in selling these securities on
the open market. Also, if the seller enters bankruptcy, the bankruptcy court
may decide that the securities are collateral not within the control of the
Portfolio and therefore are subject to sale by the trustee in the bankruptcy.
Finally, it is possible that the Portfolio may not be able to prove its owner-
ship of the underlying securities.
The Adviser believes that these risks can be controlled by carefully review-
ing the securities involved in a repurchase agreement as well as the credit
rating of the other party in the transaction. The Portfolio may invest in re-
purchase agreements collateralized by U.S. government securities, certificates
of deposit, bankers acceptances and other short-term securities as outlined
above under "Short-Term Investments."
The Fund has received an Order from the Commission for permission to pool
the daily uninvested cash balances of the Fund's Portfolios in order to invest
in repurchase agreements on a joint basis. By entering into repurchase agree-
ments on a joint basis, it is expected that a Portfolio will incur lower
transactions costs and potentially obtain higher rates of interest on such re-
purchase agreements. Each Portfolio's participation in the income from jointly
purchased repurchase agreements will be based on that Portfolio's percentage
share in the total repurchase agreement.
WHEN-ISSUED, FORWARD DELIVERY AND DELAYED SETTLEMENT SECURITIES
Occasionally the Portfolio will invest in securities whose terms and charac-
teristics are already known but which have not yet been issued. These are
called "when-issued" or "forward delivery" securities. Usually these securi-
ties are purchased within a month of their issue date. "Delayed settlements"
occur when the Portfolio agrees to buy or sell securities at some time in the
future, making no payment until the transaction is actually completed.
The Portfolio will maintain a separate account of cash, U.S. Government se-
curities or other high-grade debt obligations at least equal to the value of
the purchase commitments until payment is made. Typically, no income accrues
on securities purchased on a delayed delivery basis prior to the time delivery
of the securities is made although the Portfolio may earn income on securities
it has deposited in a segregated account.
The Portfolio engages in these types of purchases in order to buy securities
that fit with its investment objective at attractive prices -- not to increase
its investment leverage. Securities purchased on a when-issued basis may de-
cline or appreciate in market value prior to their actual delivery to the
Portfolio.
HEDGING AND RELATED STRATEGIES AND RISK CONSIDERATIONS
To reduce the overall risk of its investments (hedge), it may use options,
futures contracts, and options on futures contracts. Hedging strategies may
also be used in an attempt to manage the Portfolio's exposure to changing se-
curity prices. The Portfolio's ability to use these strategies may be limited
by market conditions, regulatory limits and tax considerations. The Portfo-
lio's obligation under such hedging strategies will be covered by the mainte-
nance of a segregated account consisting of cash, U.S. Government securities
or liquid high grade debt obligations equal to at least 100% of the Portfo-
lio's commitment. The Portfolio may buy or sell futures contracts, write cov-
ered call options and buy put and call options on any security or index, in-
cluding options and futures traded on foreign exchanges and options not traded
on exchanges. The Portfolio's Statement of Additional Information contains
further information on all of these strategies and the risks associated with
them.
The Portfolio may write or purchase options in privately negotiated transac-
tions ("OTC Options") as well as listed options. OTC Options can be closed out
only by agreement with the other party to the transaction. Any OTC Option pur-
chased by the Portfolio is considered an illiquid security. Any OTC Option
written by the Portfolio will be with a qualified dealer pursuant to an agree-
ment under which the Portfolio may repurchase the option at a formula price.
Such options are considered illiquid to the extent that the formula price ex-
ceeds the intrinsic value of the option. The Portfolio may not purchase or
sell futures contracts or related options for which the aggregate initial mar-
gin and premiums exceed 5% of the fair market value of the Portfolio's assets.
In order to prevent leverage in connection with the purchase of futures con-
tracts or call options thereon by the Portfolio, an amount of cash, cash
equivalents or liquid high grade debt securities equal to the market value of
the obligation under the futures contracts or options (less any related market
deposits) will be maintained in a segregated account with the Fund's Custodi-
an. The Portfolio may not invest more than 15% of its net assets in illiquid
securities and repurchase agreements which have a maturity of longer than
seven days. A more complete discussion of the potential risks involved in
transactions in options or futures contracts and related options is contained
in the Portfolio's Statement of Additional Information.
RISK CONSIDERATIONS. The Portfolio might not employ any of the hedging
strategies described above, and there can be no assurance that any strategy
used will succeed. If the Adviser incorrectly forecasts market values or other
economic factors in utilizing a strategy for the Portfolio, the Portfolio
would be in a better position if it had not hedged
6
<PAGE>
at all. In addition, the Portfolio will pay commissions and other costs in
connection with such investments which may increase the Portfolio's expenses
and reduce its return.
The use of these strategies involves certain risks, including (1) the fact
that skills needed to use hedging instruments are different from those needed
to select the Portfolio's securities, (2) possible imperfect correlation, or
even no correlation, between price movements of hedging instruments and price
movements of the investments being hedged, (3) the fact that, while hedging
strategies can reduce the risk of loss, they can also reduce the opportunity
for gain, or even result in losses, by offsetting favorable price movements in
hedged investments and (4) the possible inability of the Portfolio to purchase
or sell a security at a time that otherwise would be favorable for it to do
so, or the possible need for the Portfolio to sell a security at a disadvanta-
geous time due to the need for it to maintain "cover" or to segregate securi-
ties in connection with hedging transactions, and the possible inability of
the Portfolio to close out or to liquidate its hedged position.
RESTRICTED AND ILLIQUID SECURITIES
The Portfolio may purchase restricted securities that are not registered for
sale to the general public but which are eligible for resale to qualified in-
stitutional investors under Rule 144A of the Securities Act of 1933. Under the
supervision of the Fund's Board of Trustees, the Adviser determines the li-
quidity of such investments by considering all relevant factors. Provided that
a dealer or institutional trading market in such securities exists, these re-
stricted securities are not treated as illiquid securities for purposes of the
Portfolio's investment limitations. The Portfolio may also invest up to 15% of
its net assets in securities that are illiquid by virtue of the absence of a
readily available market or because of legal or contractual restrictions on
resale. The prices realized from the sales of these securities could be less
than those originally paid by the Portfolio or less than what may be consid-
ered the fair value of such securities.
LENDING OF PORTFOLIO SECURITIES
The Portfolio may lend its investment securities to qualified institutional
investors who need to borrow securities in order to complete certain transac-
tions, such as covering short sales, avoiding failures to deliver securities
or completing arbitrage operations. The Portfolio will not loan portfolio se-
curities to the extent that greater than one-third of its assets at fair mar-
ket value would be committed to loans. 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 bro-
kers, 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 con-
sisting of cash, an irrevocable letter of credit issued by a domestic U.S.
bank or securities issued or guaranteed by the U.S. 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 invest-
ments). As with other extensions of credit there are risks of delay in recov-
ery or even loss of rights in the securities loaned if the borrower of the se-
curities fails financially. These risks are similar to the ones involved with
repurchase agreements as discussed above. All relevant facts and circumstanc-
es, 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 Fund's Board of Trustees.
At the present time, the Staff of the Commission does not object if an in-
vestment company pays reasonable negotiated fees in connection with loaned se-
curities 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.
INVESTMENT COMPANIES
As permitted by the 1940 Act, the Portfolio reserves the right to invest up
to 10% of its total assets, calculated at the time of investment, in the secu-
rities of other open-end or closed-end investment companies. No more than 5%
of the investing Portfolio's total assets may be invested in the securities of
any one investment company nor may it acquire more than 3% of the voting secu-
rities of any other investment company. The Portfolio will indirectly bear its
proportionate share of any management fees paid by an investment company in
which it invests in addition to the advisory fee paid by the Portfolio.
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The Fund has received an Order from the Commission, which permits each of
its Portfolios to invest the greater of 5% of its total assets or $2.5 million
in the UAM Funds' DSI Money Market Portfolio for cash management purposes pro-
vided that the investment is consistent with the Portfolio's investment poli-
cies and restrictions. Based upon the Portfolio's assets invested in the DSI
Money Market Portfolio, the investing Portfolio's adviser will waive its in-
vestment advisory fee and any other fees earned as a result of the Portfolio's
investment in the DSI Money Market Portfolio. The investing Portfolio will
bear expenses of the DSI Money Market Portfolio on the same basis as all of
its other shareholders.
PORTFOLIO TURNOVER
This Portfolio is managed for long-term appreciation rather than short-term
trading profits. As a result, the Adviser seeks to keep portfolio turnover be-
low 60%. (A turnover rate of 100% would mean that all securities in the Port-
folio would be replaced within a one-year period.) However, portfolio turnover
depends to a great degree on market conditions. Occasionally, when the market
shifts suddenly or when the prospects for individual stocks change quickly,
the Adviser may find it necessary to sell securities which have not been in
the Portfolio for very long. The Portfolio will not normally engage in short-
term trading, but it reserves the right to do so.
INVESTMENT LIMITATIONS
To help reduce the Portfolio's exposure to risk in specific situations, it
has adopted certain limitations associated with its investments and investment
practices. These policies and limitations are considered at the time of pur-
chase. The sale of instruments is not required in the event of a subsequent
change in circumstances.
The Portfolio's limitations are as follows:
(a) With respect to 75% of its assets, the Portfolio may not own more than
5% of the securities of any single issuer (other than investments is-
sued or guaranteed by the U.S. Government or any of its agencies or in-
strumentalities);
(b) With respect to 75% of its assets, the Portfolio may not own more than
10% of the outstanding voting securities of any one issuer;
(c) The Portfolio may not invest more than 5% of its assets in securities
of issuers (other than securities issued or guaranteed by the U.S. or
foreign governments or their political subdivisions) that have (with
predecessors) less than 3 years of continuous operation;
(d) The Portfolio may not invest more than 25% of its assets in companies
within a single industry; however, there are no limitations on invest-
ments made in instruments issued or guaranteed by the U.S. Government
and its agencies;
(e) The Portfolio may not make loans except by purchasing debt securities
in accordance with its investment objective and policies or entering
into repurchase agreements or by lending its portfolio securities to
banks, brokers, dealers or other financial institutions as long as the
loans are made in compliance with the 1940 Act, and the rules, regula-
tions and interpretations of the Commission;
(f) The Portfolio may not borrow except from banks in extraordinary circum-
stances for temporary or emergency purposes. In this situation, the
Portfolio may not (1) borrow more than 33 1/3% of its gross assets and
(2) cannot buy additional securities if it borrows more than 5% of its
total assets; and
(g) The Portfolio may not pledge, mortgage or hypothecate more than 33 1/3%
of its total assets at fair market value.
The Portfolio's investment objective and investment limitations (a), (b),
(d), (e) and (f.1) listed above are fundamental policies and may be changed
only with the approval of the holders of a majority of the outstanding voting
securities of the Portfolio. The other investment limitations described here,
those not specified as fundamental in the Statement of Additional Information,
and the Portfolio's investment policies are not fundamental, and the Fund's
Board of Trustees may change them without shareholder approval.
PORTFOLIO TRANSACTIONS
The Portfolio's Investment Advisory Agreement authorizes the Adviser to se-
lect the brokers or dealers that will execute the purchases and sales of in-
vestment securities for the Portfolio. The Agreement directs the Adviser to
use its best efforts to obtain the best available price and most favorable ex-
ecution for all the Portfolio's transactions.
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It is not the Fund's practice to allocate brokerage or effect principal
transactions with dealers 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.
Some securities considered for investment by the Portfolio may also be ap-
propriate for other clients served by the Adviser. If a purchase or sale 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 fair and reasonable manner. Although there is no
specified formula for allocating such transactions, the various allocation
methods used by the Adviser, and the result of such allocations, are subject
to periodic review by the Fund's Board of Trustees.
BUYING, SELLING AND EXCHANGING SHARES
Shares of the Portfolio are offered through UAM Fund Distributors, Inc. to
investors at net asset value without a sales commission. The required minimum
initial investment in the Portfolio is $2,500 with certain exceptions as may
be determined from time to time by the officers of the Fund. The initial in-
vestment minimum for IRA accounts is $500. The initial investment minimum for
spousal IRA accounts is $250. The minimum for any subsequent investment is
$100.
Shares of the Portfolio may be purchased by customers of broker-dealers or
other financial intermediaries ("Service Agents") which have established a
shareholder servicing relationship with the Fund on behalf of their customers.
Service Agents may impose additional or different conditions or other account
fees on the purchase and redemption of Portfolio shares by their customers.
Each Service Agent is responsible for transmitting to its customers a schedule
of any such fees and information regarding any additional or different condi-
tions regarding purchases and redemptions. Shareholders who are customers of
Service Agents should consult their Service Agent for information regarding
these fees and conditions. Amounts paid to Service Agents may include transac-
tion fees and/or service fees paid by the Fund from the Fund assets attribut-
able to the Service Agent, and would not be imposed if shares of the Portfolio
were purchased directly from the Fund or the Distributor. The Service Agents
may provide shareholder services to their customers that are not available to
a shareholder dealing directly with the Fund. A salesperson and any other per-
son entitled to receive compensation for selling or servicing Portfolio shares
may receive different compensation with respect to one particular class of
shares over another in the Fund.
Service Agents may enter confirmed purchase orders on behalf of their cus-
tomers. If you buy shares of the Portfolio in this manner, the Service Agent
must receive your investment order before the close of trading on the New York
Stock Exchange ("NYSE"), and transmit it to the Fund's Sub-Transfer Agent
(prior to the close of the Sub-Transfer Agent's business day) and to the Dis-
tributor to receive that day's share price. Proper payment for the order must
be received by the Sub-Transfer Agent no later than the time when the Portfo-
lio is priced on the following business day. Service Agents are responsible to
their customers, the Fund and its Distributor for timely transmission of all
subscription and redemption requests, investment information, documentation
and money.
HOW TO BUY SHARES BY MAIL
If you have not invested in this Portfolio before, you will have to fill out
an Account Registration Form, which can be obtained by calling the Fund at 1-
800-638-7983. Once you have filled out the information on the form, separate
the two copies and sign both. We require an original signature on both forms.
Mail one copy, along with a check payable to UAM Funds Trust, to:
UAM Funds Trust
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
Mail the other copy, without the check, to:
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
9
<PAGE>
To make additional investments to an account you have already established,
simply mail your check to the UAM Funds Service Center at the address above.
Make sure that your account number, account name, and the name of the Portfo-
lio are clearly indicated on the check so that we can properly credit your ac-
count.
For both initial and additional investments, your funds will be credited to
your account at the next share price calculated for the Portfolio after re-
ceipt. Investments received by 4 p.m. Eastern Time will be invested at the
share price calculated after the market closes on the same day. (For example,
if your check arrives on Tuesday morning, you will purchase shares at the
price calculated after the market close on Tuesday.)
HOW TO BUY SHARES BY WIRE
To make an initial investment by wire, you must first telephone the Fund at
1-800-638-7983. A representative will then ask you to provide the account num-
ber from which you plan to wire the funds, the bank or financial institution,
its address, phone number and your social security or taxpayer identification
number. You will then tell the representative which Portfolio you wish to in-
vest in and how much you want to invest. The representative will then provide
you with an account number and a wire control number. Please write it down and
keep it for your records.
Once you have an account number, call your bank and instruct them to wire a
specified amount to the Fund's custodian, The Chase Manhattan Bank ("Custodian
Bank"). You will be asked to provide the following information:
The Chase Manhattan Bank
ABA #021000021
UAM Funds
Credit DDA #9102772952
(Your Account Registration)
(Your Account Number)
(Wire Control Number)
After you have instructed the bank to wire the money, you must forward a
completed Account Registration Form to the UAM Funds Service Center as soon as
possible. You can obtain forms by calling the UAM Funds Service Center at 1-
800-638-7983. Federal Funds purchases will be accepted only on days when the
NYSE and the Custodian Bank are open for business.
Once you have made the initial purchase, you may buy additional shares by
wire at any time by following the instructions above. On all wired purchases,
funds will be invested at the share price calculated after the next market
close.
IN-KIND PURCHASES
Under certain circumstances, investors who own securities may be able to ex-
change them directly for shares of the Portfolio without converting their in-
vestments into cash first. The Portfolio will accept such in-kind purchases
only if the securities offered for exchange meet the Portfolio's investment
criteria which are set forth in the "Details on Investment Policies" section
of this Prospectus. Once accepted, the shares will be valued according to the
process described in "How Share Prices are Determined" at the same time the
Portfolio's shares are valued. Once a value has been determined for both, an
exchange will be made. All dividends, interest, subscription, or other rights
pertaining to these securities become the Fund's property; if you receive any
such items, you must deliver them to the Fund immediately. Securities acquired
by the Portfolio through an in-kind purchase will be acquired for investment
and not for immediate resale.
The Fund will not accept securities for exchange unless they meet the fol-
lowing criteria:
. The securities are eligible to be included in the Portfolio and market
quotes can readily be obtained for them, e.g., as evidenced by a listing
on the American Stock Exchange, the NYSE, the NASDAQ or a foreign ex-
change.
. The investor assures the Fund that the securities are not subject to any
restrictions under the Securities Act of 1933 or any other law or regula-
tion.
. The value of the securities exchanged does not increase the Portfolio's
position in any specific issuer's security to more than 5% of the Portfo-
lio's total net assets.
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<PAGE>
For tax purposes, the IRS generally treats any exchange of securities for
Portfolio shares as a sale of the securities. This means that if you exchange
securities which have appreciated in value since you bought them, you will re-
alize capital gains and incur a tax liability. If you are interested in such
an exchange, we suggest you discuss any potential tax liability with your tax
adviser before proceeding.
HOW TO SELL SHARES
You may sell shares by telephone or mail at any time, free of charge. Your
shares will be valued at the next price calculated after we receive your in-
structions to sell.
BY MAIL
To redeem by mail, include
. your share certificates, if we have issued them to you;
. a letter which tells us how many shares you wish to redeem or, alterna-
tively, what dollar amount you wish to receive;
. a signature guaranteed by your bank, broker or other financial institu-
tion (see "Signature Guarantees" below); and
. any other necessary legal documents, in the case of estates, trusts,
guardianships, custodianships, corporations, pension and profit-sharing
plans and other organizations.
If you are not sure of which documents to send, please contact the UAM Funds
Service Center at 1-800-638-7983.
BY TELEPHONE
To redeem shares by telephone, you must have completed an Account Registra-
tion Form and have returned it to the Fund. Once this form is on file, simply
call the Fund and request the redemption amount to be mailed to you or wired
to your bank. The Fund and the Fund's Transfer Agent will employ reasonable
precautions to make sure that the instructions communicated by telephone are
genuine, and they may be liable for any losses if they fail to do so. You will
be asked to provide certain personal identification when you open an account,
and again, when you request a telephone redemption. In addition, all telephone
transaction requests will be recorded and investors may be required to provide
additional telecopied written instructions of such transaction requests. Nei-
ther the Fund nor the Transfer Agent will be responsible for any loss, addi-
tional cost or expense for following transaction instructions received by tel-
ephone that it reasonably believes are genuine.
To change the commercial bank or the account designated to receive redemp-
tion proceeds, a written request must be sent to the Fund at the address on
the cover of this Prospectus. Requests to change the bank or account must be
signed by each shareholder and each signature must be guaranteed. You cannot
redeem shares by telephone if you hold stock certificates for these shares.
Please contact one of the Fund's representatives at 1-800-638-7983 for further
details.
SIGNATURE GUARANTEES
To protect your account, the Fund and the Fund's Transfer Agent from fraud,
signature guarantees are required for certain redemptions. Signature guaran-
tees are used to verify that the person who authorizes a redemption is, in
fact, the registered shareholder. They are required whenever you:
. redeem shares and request that the proceeds be sent to someone other than
the registered shareholder(s) or to an address which is not the regis-
tered address; or
. transfer shares from one Portfolio to another.
Signatures must be guaranteed by an "eligible guarantor institution" as de-
fined in Rule 17Ad-15 under the Securities Exchange Act of 1934. (The UAM
Funds Service Center can provide you with a full definition of the term.) You
can obtain a signature guarantee at almost any bank as well as through most
brokers, dealers, credit unions, national securities exchanges, registered se-
curities associations, clearing agencies and savings associations. 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 el-
igible guarantor institution which participates in a signature guarantee pro-
gram. A notary public can not provide a signature guarantee.
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<PAGE>
The signature guarantee must appear either:
. on the written request for redemption; or
. on a separate instrument for assignment (a "stock power") which should
specify the total number of shares to be redeemed; or
. on all stock certificates tendered for redemption, and, if shares held by
the Fund are also being redeemed, then on the letter or stock power.
FURTHER INFORMATION ON SELLING SHARES
Normally, the Fund will make payment for all shares sold under this proce-
dure within one business day after we receive a request. In no event will pay-
ment be made more than seven days after receipt of a redemption (sale) request
in good order. The Fund may suspend the right of redemption or postpone the
date at times when either the NYSE and Custodian Bank are closed or under any
emergency circumstances as determined by the Commission.
If the Fund's Board of Trustees determines that it would be detrimental to
the best interests of the remaining shareholders of the Fund to make payments
wholly or partly in cash, the Fund may pay the redemption proceeds in whole or
in part by a distribution in-kind of liquid securities held by the Portfolio
instead of cash in conformity with applicable rules of the Commission. Invest-
ors may incur brokerage charges when they sell portfolio securities received
in payment of redemptions.
HOW TO EXCHANGE SHARES
You may exchange Institutional Class Shares of the Portfolio for any other
Institutional Class Shares of a Portfolio included in the UAM Funds which is
comprised of the Fund and the UAM Funds, Inc. (See the list of Portfolios of
the UAM Funds -- Institutional Class Shares at the end of this Prospectus.)
When you exchange shares you sell your old shares and buy new ones, both at
the price calculated after the next market close. There is no sales charge for
exchanges. Exchange requests may be made by phone or letter. Telephone ex-
changes may be made only if the Fund holds all share certificates and if the
registration of the two accounts is identical. Telephone exchanges received
before 4 p.m. Eastern time will be processed at the share price set after the
market close the same day. Exchanges received after 4 p.m. Eastern time will
be executed at the share price determined at the market close the following
day. For additional information regarding responsibility for the authenticity
of telephoned transaction instructions, see "How to Sell Shares -- By Tele-
phone" above. The exchange privilege is only available with respect to Portfo-
lios that are registered for sale in a shareholder's state of residence.
Neither the Fund nor the Fund's Transfer Agent will take responsibility for
ensuring it is indeed the shareholder issuing the exchange orders; however, we
may use some of the precautions described above for selling shares. The Fund
may also limit both the frequency and the amount of exchanges permitted if it
is in the interest of the Fund's shareholders.
Please review a Portfolio's investment objective before shifting money into
it. Make sure its objective and strategies fit with your long-term goals. Be-
fore exchanging into a Portfolio, read its Prospectus. You may obtain one for
the Portfolio(s) you are interested in by calling the UAM Funds Service Center
at 1-800-638-7983. Remember, every time you exchange shares of one Portfolio
for another, your transaction is counted as a sale of the first security and a
purchase of the second. As a result, you may incur a tax liability by exchang-
ing shares if your investment has appreciated since you bought it. Consult
your tax adviser to determine your liability for capital gains taxes.
HOW SHARE PRICES ARE DETERMINED
We calculate the value of each share of the Portfolio every day that the
NYSE is open. This means that shares are valued after the market close, gener-
ally at 4 p.m. Eastern time on Monday through Friday, except for major holi-
days when the NYSE is closed.
To determine how much each share is worth, we add up the total market value
of all the securities in the Portfolio plus cash and other assets, deduct lia-
bilities and then divide by the total number of shares outstanding.
For stocks, we use the last quoted trading price as the market value. For
listed stocks, we use the price quoted by the exchange on which the stock is
primarily traded. Unlisted stocks and listed stocks which have not been traded
on the valuation date or for which market quotations are not readily available
are valued at a price between the last price asked and the last price bid. For
valuation purposes, quotations of foreign securities in a foreign currency are
converted to U.S. dollar equivalents based upon the bid price of such curren-
cies against U.S. dollars quoted by any major bank or by a broker. The value
of other assets and securities for which no quotations are readily available
(including
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<PAGE>
restricted securities) is determined in good faith at fair value using methods
determined by the Fund's Board of Trustees.
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
DIVIDENDS
Stocks generate income in the form of dividends. The Portfolio will normally
distribute substantially all of its net investment income (for tax purposes)
from its investments, as well as any interest earned from short-term invest-
ments, to shareholders in the form of quarterly dividends. You must instruct
the Portfolio to pay out dividends and distributions in cash to you or to re-
invest them. The Account Registration Form has a box for your instructions.
Unless you specifically tell us to distribute dividend income in cash, howev-
er, we will assume you want this income reinvested.
Reinvested dividend distributions will affect your tax liability. By law,
you must pay taxes on any dividend you receive on your investments whether
distributed in cash or reinvested in shares. The Portfolio will send you a
statement at the end of the year telling you exactly how much dividend income
you have earned for tax purposes.
CAPITAL GAINS
Capital gains are another source of appreciation to the Portfolio. Basical-
ly, a gain is an increase in the value of a stock or bond.
You can incur capital gains in two ways. First, if the Portfolio buys a
stock or bond at one price, then sells it at a higher price, it will realize a
capital gain. At the end of the year, the capital gains computed under tax
rules that the Portfolio has made are added up and capital losses are sub-
tracted. The total is then divided by the number of shares outstanding. If any
net capital gains are realized, the Portfolio will normally distribute such
gains annually. You will receive a statement at the end of the year informing
you of your share of the Portfolio's capital gains.
The second way to incur capital gains is to sell or trade your shares. If
you sell shares at a higher price than you bought them at, you will be respon-
sible for paying taxes on your gain. There are several ways to determine your
tax liability, and we suggest you contact a qualified tax adviser to help you
decide which is best for you.
TAXES
The Portfolio intends to qualify each year as a "regulated investment compa-
ny" under Federal tax law, and if it qualifies, the Portfolio will not be lia-
ble for Federal income taxes, because it will have distributed all its net in-
vestment income and net realized capital gains to shareholders. Shareholders
will then have to pay taxes on the dividends, and on gains whether they are
distributed as cash or are reinvested in shares. Dividends and short-term cap-
ital gains will be taxed as ordinary income. Long-term capital gains distribu-
tions are taxed as long-term capital gains. Such dividends and distributions
may be subject to state and local taxes. Redemptions of shares in the Portfo-
lio are taxable events for Federal income tax purposes. A shareholder may also
be subject to state and local taxes on such redemptions.
Dividends declared in October, November and December to shareholders of rec-
ord in such a month will be treated as if they had been paid by the Fund and
received by the shareholders on December 31 of the same calendar year, pro-
vided that the dividends are paid before February of the following year.
The Fund is required by Federal law to withhold 31% of reportable payments
(which may include dividends, capital gains distributions and redemptions)
paid to shareholders who have not complied with IRS regulations. In order to
avoid this withholding requirement, you must certify on the Account Registra-
tion Form or on a separate form supplied by the Fund that your Social Security
or Taxpayer Identification Number you have provided is correct and that you
are not currently subject to backup withholding or that you are exempt from
backup withholding.
Dividends and interest received by the Portfolio may give rise to withhold-
ing and other taxes imposed by foreign countries. These taxes reduce the Port-
folio's dividends but are included in the taxable income reported on your tax
statement if the Portfolio qualifies for this tax treatment and elects to pass
it through to you. You may be able to claim an offsetting tax credit or item-
ized deduction for foreign taxes paid by the Portfolio. Your tax statement
will generally show the amount of foreign tax for which a credit or deduction
may be available.
FUND MANAGEMENT AND ADMINISTRATION
THE INVESTMENT ADVISER
The Adviser is a registered investment adviser formed in 1940. Its business
offices are located at 950 Haverford Road in Bryn Mawr, Pennsylvania. The Ad-
viser is a wholly-owned subsidiary of United Asset Management Corporation
("UAM") and provides and offers investment management and advisory services to
corporations, unions,
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<PAGE>
pensions and profit-sharing plans, trusts, estates and other institutions and
investors. The Adviser currently has over $7 billion in assets under manage-
ment.
The Portfolio pays an annual fee in monthly installments to the Adviser for
advisory services. This fee is accrued daily and paid monthly as a percentage
of the average net assets in the Portfolio for that month. The percentage fee
on an annual basis is 0.50%.
The Adviser may compensate its affiliated companies for referring investors
to the Portfolio. The Distributor, UAM, the Adviser, or any of their affili-
ates, may, at its own expense, compensate a Service Agent or other person for
marketing, shareholder servicing, record-keeping and/or other services per-
formed with respect to the Fund, a Portfolio or any Class of Shares of a Port-
folio. The person making such payments may do so out of its revenues, its
profits or any other source available to it. Such services arrangements, when
in effect, are made generally available to all qualified service providers.
The Distributor, the Adviser and certain of their other affiliates also par-
ticipate, at the date of this Prospectus, in an arrangement with Smith Barney
Inc. under which Smith Barney provides certain defined contribution plan mar-
keting and other shareholder services and receives from such entities .15 of
1% of the daily net asset value of Institutional Class Shares held by Smith
Barney's eligible customer accounts in addition to amounts payable to all
selling dealers. The Fund also compensates Smith Barney for services it pro-
vides to certain defined contribution plan shareholders that are not otherwise
provided by the Administrator.
An Investment Committee at the Adviser is responsible for the day-to-day
management of the Portfolio.
THE ADMINISTRATOR
Pursuant to a Fund Administration Agreement dated April 15, 1996, UAM Fund
Services, Inc. ("UAMFSI") a wholly-owned subsidiary of United Asset Management
Corporation with its principal office located at 211 Congress Street, Boston,
MA 02110, is responsible for performing and overseeing administration, fund
accounting, dividend disbursing and transfer agency services provided to the
Fund and its Portfolios. UAMFSI has subcontracted the performance of certain
of such services to Chase Global Funds Services Company ("CGFSC"), an affili-
ate of The Chase Manhattan Bank, pursuant to a Mutual Funds Service Agreement
dated April 15, 1996. CGFSC is located at 73 Tremont Street, Boston, MA 02108-
3913. Effective April 1, 1996, The Chase Manhattan Corporation, the parent of
The Chase Manhattan Bank merged with and into Chemical Banking Corporation,
the parent company of Chemical Bank. Chemical Banking Corporation is the sur-
viving corporation and will continue its existence under the name "The Chase
Manhattan Corporation".
Each Portfolio pays to UAMFSI a monthly fee comprised of two parts: a Port-
folio-specific fee which is retained by UAMFSI and a sub-administration fee
which UAMFSI in turn pays to CGFSC. The Portfolio-specific fee for Newbold's
Equity Portfolio is 0.06% of aggregate net assets. The sub-administration fee
calculated on an annualized basis equals: 0.19 of 1% of the first $200 million
of total net assets of the Fund; 0.11 of 1% of the next $800 million of total
net assets of the Fund; 0.07 of 1% of total net assets in excess of $1 billion
but less than $3 billion; and 0.05 of 1% of total net assets in excess of $3
billion. The sub-administration fees are allocated among the Portfolios on the
basis of their relative assets and are subject to a graduated minimum fee
schedule per Portfolio of $2,000 per month upon inception of a Portfolio to
$70,000 annually after two years. If a separate class of shares is added to a
Portfolio, the minimum annual fee payable by that Portfolio may be increased
by up to $20,000.
THE DISTRIBUTOR
UAM Fund Distributors, Inc., a wholly-owned subsidiary of UAM with its prin-
cipal office located at 211 Congress Street, Boston, Massachusetts 02110, dis-
tributes the shares of the Fund. Under the Fund's Distribution Agreement (the
"Agreement"), the Distributor, as agent of the Fund, agrees to use its best
efforts as sole distributor of the Fund's shares. The Distributor does not re-
ceive any fee or other compensation under the Agreement with respect to this
Portfolio. The Agreement continues in effect as long as the Fund's Board of
Trustees, including a majority of the Trustees who are not parties to the
Agreement or interested persons of any such party, approve it on an annual ba-
sis. This Agreement provides that the Fund will bear the costs of the regis-
tration of its shares with the Commission and various states and the printing
of its prospectuses, statements of additional information and reports to
shareholders.
CUSTODIAN
The Chase Manhattan Bank serves as custodian of the Fund's assets.
ACCOUNTANTS
Price Waterhouse LLP acts as the independent accountants for the Fund and
audits its financial statements annually.
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SUB-ADMINISTRATOR, SUB-TRANSFER AND SUB-DIVIDEND DISBURSING AGENT
Chase Global Funds Services Company, 73 Tremont Street, Boston, MA 02108,
acts as sub-administrator, sub-transfer agent and sub-dividend disbursing
agent for the Fund.
REPORTS
Investors will receive unaudited semi-annual financial statements and annual
financial statements audited by Price Waterhouse LLP.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be made by writing to the Fund at the address
listed on the cover of this Prospectus or by calling 1-800-638-7983.
LITIGATION
The Fund is not involved in any litigation.
GENERAL FUND INFORMATION
The Portfolio is one of a series of investment portfolios available through
UAM Funds Trust, an open-end investment company known as a "mutual fund." Each
of the Portfolios which make up the Fund have different investment objectives
and policies. Together, the Portfolios offer a diverse set of risk and return
characteristics to suit a wide range of investor needs. The Fund was organized
under the name "The Regis Fund II" on May 18, 1994 as a Delaware business
trust. On October 31, 1995, the name was changed to "UAM Funds Trust"
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Officers of the Fund manage its day-to-day operations and are responsi-
ble to the Fund's Board of Trustees. The Trustees set broad policies for the
Fund and elect its Officers.
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 sharehold-
ers.
The shares of each Portfolio and class have noncumulative voting rights,
which means that the holders of more than 50% of the shares voting for the
election of Trustees can elect 100% of the Trustees if they choose to do so. A
shareholder is entitled to one vote for each full share held (and a fractional
vote for each fractional share held), then standing in his name on the books
of the Fund. Both Institutional Class and Institutional Service Class Shares
represent an interest in the same assets of a Portfolio and are identical in
all respects except that the Institutional Service Class Shares bear certain
expenses related to shareholder servicing, may bear expenses related to the
distribution of such shares and have exclusive voting rights with respect
to matters relating to such distribution expenditures. Information about the
Service Class Shares of the Portfolios along with the fees and expenses asso-
ciated with such shares is available upon request by contacting the Fund at
1-800-638-7983. The Fund will not ordinarily hold shareholder meetings except
as required by the 1940 Act and other applicable laws. The Fund has undertaken
that its Trustees will call a meeting of shareholders if such a meeting is re-
quested in writing by the holders of not less than 10% of the outstanding
shares of the Fund. To the extent required by the undertaking, the Fund will
assist shareholder communications in such matters.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR IN THE PORTFOLIO'S
STATEMENT OF ADDITIONAL INFORMATION IN CONNECTION WITH THE OFFERING MADE BY
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR ITS REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFERING BY THE FUND IN ANY JURISDICTION IN WHICH SUCH
OFFERING MAY NOT BE LAWFULLY MADE.
15
<PAGE>
UAM FUNDS -- INSTITUTIONAL CLASS SHARES
ACADIAN ASSET MANAGEMENT, INC.
Acadian Emerging Markets Portfolio
Acadian International Equity Portfolio
BARROW, HANLEY, MEWHINNEY & STRAUSS, INC.
BHM&S Total Return Bond Portfolio
CHICAGO ASSET MANAGEMENT COMPANY
Chicago Asset Management Value/Contrarian Portfolio
Chicago Asset Management Intermediate Bond Portfolio
COOKE & BIELER, INC.
C&B Balanced Portfolio
C&B Equity Portfolio
C.S. MCKEE & COMPANY, INC.
McKee U.S. Government Portfolio
McKee Domestic Equity Portfolio
McKee International Equity Portfolio
DEWEY SQUARE INVESTORS CORPORATION
DSI Disciplined Value Portfolio
DSI Limited Maturity Bond Portfolio
DSI Money Market Portfolio
FIDUCIARY MANAGEMENT ASSOCIATES, INC.
FMA Small Company Portfolio
INVESTMENT COUNSELORS OF MARYLAND, INC.
ICM Equity Portfolio
ICM Fixed Income Portfolio
ICM Small Company Portfolio
INVESTMENT RESEARCH COMPANY
IRC Enhanced Index Portfolio
MURRAY JOHNSTONE INTERNATIONAL LTD.
MJI International Equity Portfolio
NEWBOLD'S ASSET MANAGEMENT, INC.
Newbold's Equity Portfolio
NWQ INVESTMENT MANAGEMENT COMPANY
NWQ Balanced Portfolio
NWQ Value Equity Portfolio
RICE, HALL JAMES & ASSOCIATES
Rice, Hall James Small Cap Portfolio
SIRACH CAPITAL MANAGEMENT, INC.
Sirach Equity Portfolio
Sirach Fixed Income Portfolio
Sirach Growth Portfolio
Sirach Short-Term Reserves Portfolio
Sirach Special Equity Portfolio
Sirach Strategic Balanced Portfolio
SPECTRUM ASSET MANAGEMENT, INC.
SAMI Preferred Stock Income Portfolio
Enhanced Monthly Income Portfolio
STERLING CAPITAL MANAGEMENT COMPANY
Sterling Partners' Balanced Portfolio
Sterling Partners' Equity Portfolio
Sterling Partners' Short-Term Fixed Income Portfolio
THOMPSON, SIEGEL & WALMSLEY, INC.
TS&W Equity Portfolio
TS&W Fixed Income Portfolio
TS&W International Equity Portfolio
16
<PAGE>
UAM FUNDS
UAM FUNDS SERVICE CENTER
C/O CHASE GLOBAL FUNDS SERVICES COMPANY
P.O. BOX 2798
BOSTON, MA 02208-2798
1-800-638-7983
- -------------------------------------------------------------------------------
NEWBOLD'S EQUITY PORTFOLIO
INSTITUTIONAL SERVICE CLASS SHARES
INVESTMENT ADVISER: NEWBOLD'S ASSET MANAGEMENT, INC.
- -------------------------------------------------------------------------------
PROSPECTUS -- AUGUST 28, 1996
Newbold's Equity Portfolio is one of a series of investment portfolios
available through UAM Funds Trust (hereinafter defined as "UAM funds" or the
"Fund"), an open-end investment company known as a "mutual fund." Each of the
Portfolios that make up the Fund have different investment objectives and pol-
icies. In addition, several of the Fund's Portfolios offer two separate clas-
ses of shares: Institutional Class Shares and Institutional Service Class
Shares ("Service Class Shares"). Shares of each class represent equal, pro
rata interests in a Portfolio and accrue dividends in the same manner except
that Service Class Shares bear fees payable by the class to financial institu-
tions for services they provide to the owners of such shares. (See "Service
and Distribution Plans.") Newbold's Equity Portfolio currently offers two
classes of shares. The securities offered in this Prospectus are Service Class
Shares of one diversified, no-load Portfolio of the Fund managed by Newbold's
Asset Management, Inc.
The Newbold's Equity Portfolio seeks to achieve maximum long-term total re-
turn, consistent with reasonable risk to principal, by investing primarily in
a diversified portfolio of undervalued equity securities of statistically at-
tractive companies. There can be no assurance that the Portfolio will achieve
its stated objective.
Please keep this Prospectus for future reference, since it contains informa-
tion that you should understand before you invest. You may also wish to review
the Newbold's Equity Portfolio's "Statement of Additional Information" dated
August 28 , 1996 which was filed with the Securities and Exchange Commission
and has been incorporated by reference into this Prospectus. (It is legally
considered to be a part of this Prospectus). Please call or write the Fund at
the above address to obtain a free copy of this Statement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Fees and Expenses.......................................................... 1
Summary: About the Portfolio............................................... 2
Risk Factors............................................................... 3
Performance Calculations................................................... 3
Details on Investment Policies............................................. 3
Investment Limitations..................................................... 7
Buying, Selling and Exchanging Shares...................................... 8
Service and Distribution Plans............................................. 12
How Share Prices are Determined............................................ 14
Dividends, Capital Gains Distributions and Taxes........................... 14
Fund Management and Administration......................................... 15
General Fund Information................................................... 16
UAM Funds -- Service Class Shares.......................................... 18
</TABLE>
<PAGE>
FEES AND EXPENSES
Investors will be charged various fees and expenses incurred in managing the
Newbold's Equity Portfolio (the "Portfolio") including:
SHAREHOLDER TRANSACTION EXPENSES: These are the costs entailed in buying,
selling or exchanging shares of the Portfolio. The Portfolio does not charge
investors for shareholder transaction expenses. However, transaction fees may
be charged if you are a customer of a broker-dealer or other financial inter-
mediary who has established a shareholder servicing relationship with the Fund
on behalf of their customers. Please see "Service and Distribution Plans" for
further information.
<TABLE>
<S> <C>
Sales Load Imposed on Purchases:........................................ NONE
Sales Load Imposed on Reinvested Dividends:............................. NONE
Deferred Sales Load:.................................................... NONE
Redemption Fees:........................................................ NONE
Exchange Fees:.......................................................... NONE
</TABLE>
ANNUAL FUND OPERATING EXPENSES: These expenses, which cover the cost of ad-
ministration, marketing and shareholder communication, and are usually quoted
as a percentage of net assets, are factored into the Portfolio's share price
and not billed directly to shareholders. They include:
<TABLE>
<S> <C>
Investment Advisory Fees:........................................... 0.50 %
Administrative Fees:................................................ 0.39 %
12b-1 Fees: (Including Shareholder Servicing Fees)*................. 0.40 %
Other Expenses:..................................................... 0.74 %
Advisory Fees Waived and Expenses Assumed:.......................... (0.73)%+
-----
Total Operating Expenses (After Fee Waiver and Expenses Assumed).... 1.30%
=====
</TABLE>
- -------------------
+ Newbold's Asset Management, Inc. (the "Adviser") has voluntarily agreed to
waive its advisory fees and assume as the Adviser's own expense operating
expenses otherwise payable by the Portfolio, if necessary, in order to keep
the Portfolio's Service Class Shares total operating expenses (excluding in-
terest, taxes and extraordinary expenses) from exceeding 1.30% of average
daily net assets until January 29, 1998. If it were not for the fee waiver
and/or reimbursement, the Portfolio's Service Class Shares total annual op-
erating expenses would be 2.03% of average daily net assets. The Portfolio
will not reimburse the Adviser for any advisory fees which the Adviser may
bear on behalf of the Portfolio.
* The Service Class Shares may bear service fees of 0.25% and distribution
fees and expenses of up to 0.15%. Long-term shareholders may pay more than
the economic equivalent of the maximum front-end sales charges permitted by
rules of the National Association of Securities Dealers, Inc. See "Service
and Distribution Plans."
The purpose of the above table is to assist the investor in understanding
the various expenses that an investor in the Newbold's Equity Portfolio's
Service Class Shares will bear directly or indirectly. The fees and expenses
set forth above are estimates based upon the Portfolio's Institutional Class
Shares operations during the fiscal year ended April 30, 1996 except they have
been restated to reflect 12b-1 fees and current administrative fees.
Investors can get a better idea of how the Portfolio's operating expenses
will affect their own investments by examining the following chart. The chart
shows how much a hypothetical investor would pay in expenses, assuming that he
or she made an initial investment of $1,000, earned a 5% annual rate of return
and redeemed his or her investment at the end of the time period indicated.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
------ -------
<S> <C> <C>
Expenses:..................................................... $13 $41
</TABLE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EX-
PENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE
SHOWN ABOVE.
NOTE TO EXPENSE TABLE
The information set forth in the above table and example relates only to
Service Class Shares of the Portfolio, which shares are subject to different
total fees and expenses than Institutional Class Shares. Service Agents may
charge other fees to their customers who are beneficial owners of Service
Class Shares in connection with their customer accounts. (See "Service and
Distribution Plans.")
1
<PAGE>
SUMMARY: ABOUT THE PORTFOLIO . . .
OBJECTIVE:
The Portfolio seeks to achieve maximum long-term total return, consistent
with reasonable risk to principal, by investing primarily in a diversified
portfolio of undervalued equity securities of statistically attractive compa-
nies. The Adviser believes that the Portfolio's performance over the long term
will be superior to its benchmark index (the Standard & Poor's 500 Stock In-
dex). There can be no assurance that the Portfolio will achieve its stated ob-
jective.
HOW IS THE PORTFOLIO MANAGED?
Newbold's Asset Management, Inc. (the "Adviser") believes that investment
value and return can be achieved by investing in stocks with a low price rela-
tive to current earnings. This bottom-up approach seeks to identify companies
whose earnings growth suggests an increasing stream of future dividend income
and whose share prices represent a level below realizable value.
WHO MANAGES THE PORTFOLIO?
The Adviser is a registered investment adviser. Founded in 1940, the firm
currently has over $7 billion in assets under management. The Adviser is a
wholly-owned subsidiary of United Asset Management Corporation. (See "Fund
Management and Administration.")
WHO SHOULD INVEST IN THE PORTFOLIO?
The Portfolio is suitable for investors who seek maximum long-term total re-
turn in their investments and who are comfortable with aggressively seeking
long-term returns.
HOW TO INVEST
Service Class Shares of the Portfolio are offered to investors through bro-
ker-dealers and other Financial institutions ("Service Agents") at net asset
value next determined after the purchase order is received in proper form. The
minimum initial investment in the Portfolio is $2,500 with certain exceptions
as may be determined from time to time by the Officers of the Fund. The ini-
tial investment for IRA accounts is $500. The initial investment minimum for
spousal IRA accounts is $250. The minimum for any subsequent investment is
$100. (See "Buying, Selling and Exchanging Shares.")
HOW TO REDEEM
Service Class Shares of the Portfolio may be redeemed at any time, without
cost, at the net asset value of the Portfolio next determined after receipt of
the redemption request. The redemption price may be more or less than the pur-
chase price. See "Buying, Selling and Exchanging Shares."
DIVIDENDS AND DISTRIBUTIONS
The Portfolio will normally distribute substantially all of its net invest-
ment income in the form of a quarterly dividend. Any realized net capital
gains will be distributed annually. Distributions will be reinvested in the
Portfolio's shares automatically unless an investor elects to receive cash
distributions. (See "Dividends, Capital Gains Distributions and Taxes.")
ADMINISTRATIVE SERVICES
UAM Fund Services, Inc. (the "Administrator"), a wholly-owned subsidiary of
United Asset Management Corporation ("UAM"), is responsible for performing and
overseeing administration, Fund accounting, dividend disbursing and transfer
agency services provided to the Fund and its Portfolios by third-party service
providers. (See "Administrative Services".)
2
<PAGE>
RISK FACTORS
Investing in the Portfolio entails a number of risks as with any stock in-
vestment. Like any stock investment, shares of the Portfolio will rise and
fall in value depending on market perceptions of the value of the underlying
stocks. Share prices may also be affected by overall market movements and by
changes in sector or industry performance.
In addition, you should consider the following factors that could effect the
Portfolio's rate of return:
. The Portfolio may engage in various strategies to seek to hedge its in-
vestments against movements in security prices by the use of derivatives
including options and futures as well as options on futures. Such strate-
gies are commonly referred to as "derivatives" and involve the risk of
imperfect correlation in movements in the price of options and futures
and movements in the price of securities which are the subject of the
hedge. Options and futures transactions in foreign markets are also sub-
ject to the risk factors associated with foreign investments generally.
There can be no assurance that a liquid secondary market for options and
futures contracts will exist at any specific time.
. The Portfolio may invest in the securities of foreign issuers which may
be subject to additional risks factors, including foreign currency risks,
not applicable to securities of U.S. issuers.
. The Portfolio may invest in repurchase agreements which entail a risk of
loss should the seller default on its transaction.
. The Portfolio may lend its investment securities which entails a risk of
loss should a borrower fail financially.
. The Portfolio may purchase securities on a when-issued basis which do not
earn interest until issued and may decline or appreciate in market value
prior to their delivery to the Portfolio.
Further information about these and other risk factors is contained in the
"Details on Investment Policies" section of this Prospectus.
PERFORMANCE CALCULATIONS
The Portfolio measures performance by calculating total return. Total return
figures are based on historical earnings and are not intended to indicate fu-
ture performance.
Total return is the change in value of an investment in the Portfolio over a
given period, assuming reinvestment of any dividends and capital gains. A cu-
mulative or aggregate total return reflects actual performance over a stated
period of time. An average annual total return is a hypothetical rate of re-
turn that, if achieved annually, would have produced the same cumulative total
return if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same as
actual year-by-year results.
Performance will be calculated separately for Institutional Class and Serv-
ice Class Shares. Dividends paid by the Portfolio with respect to Institu-
tional Class and Service Class Shares, to the extent any dividends are paid,
will be calculated in the same manner at the same time on the same day and
will be in the same amount, except that service fees, distribution charges and
any incremental transfer agency costs relating to Service Class Shares will be
borne exclusively by that class.
The Portfolio's performance may be compared to data prepared by independent
services which monitor the performance of investment companies, data reported
in financial and industry publications, and various indices, all as further
described in the Portfolio's Statement of Additional Information.
The Portfolio's Annual Report to Shareholders for the most recent fiscal
year end contains additional performance information that includes comparisons
with appropriate indices. The Annual Report is available without charge upon
request to the Fund by writing to the address or calling the phone number on
the cover of this Prospectus.
DETAILS ON INVESTMENT POLICIES
INVESTMENT STRATEGY
In seeking its investment objective, the Portfolio will invest at least 65%
of its total assets, under normal circumstances, in equity securities, con-
sisting of common stock, preferred stock, convertible preferred stock, con-
vertible bonds, rights and warrants. The Portfolio will invest primarily in
equity securities of large capitalization companies which are defined as those
with equity capitalizations greater than $1 billion at the time of purchase.
3
<PAGE>
The Adviser believes that investment value and return can be achieved by in-
vesting in stocks with a low price relative to current earnings. This "bottom
up" approach seeks to identify companies whose earnings growth suggests an in-
creasing stream of future dividend income and whose share prices represent a
level below realizable value.
The Adviser is able to identify prospective companies through a computerized
screening process which rates on four key elements: MARKET CAPITALIZATION--$1
billion or more for purposes of liquidity; DIVIDEND PAYOUT--ordinarily must
pay cash dividends; FINANCIAL LEVERAGE--debt should not be excessive, and an
investment grade bond rating is required; and RETURN ON AVERAGE FIVE-YEAR EQ-
UITY--after the three previous criteria have been applied, this evaluation is
used as a measurement of profitability in selecting the top 500 companies.
The stock issues of the top 500 companies are then sorted by price/earnings
ratio, ranked from highest to lowest and broken into five groups, each con-
sisting of 100 stocks. The bottom two groups are subject to intense fundamen-
tal analysis by the Adviser. The objective is to assemble a portfolio of 40-70
statistically attractive stocks which represent relative "value" not generally
recognized by the market. However, the Portfolio has the flexibility to invest
in less than 40 stocks or more than 70 stocks, as the Adviser deems necessary.
Earnings for cyclical stocks are normalized in this valuation process.
Once the portfolio has been constructed, its price/earnings multiples are
continually monitored. The Portfolio will stop buying a stock when its price-
/earnings ratio approaches the current price/earnings multiple of the Standard
& Poor's 500 Stock Index. The stock is sold when it moves above the market's
multiple.
When the Adviser believes that market conditions warrant a defensive posi-
tion, up to 100% of the Portfolio's assets may be held in cash and short-term
investments. See "Short-Term Investments" below for a description of the types
of short-term instruments in which the Portfolio may invest for temporary de-
fensive purposes. When the Portfolio is in a defensive position, it may not
necessarily be pursuing its stated investment objective.
OTHER INVESTMENT POLICIES
The Portfolio may also, under normal circumstances, invest up to 35% its as-
sets, unless restricted by additional limitations described below or in the
Portfolio's Statement of Additional Information, in the following securities
or investment techniques:
FOREIGN INVESTMENTS
The Portfolio may invest in foreign equity securities of developed coun-
tries. This involves additional risks not typically associated with investing
in domestic equity securities. Since the securities issued by foreign entities
may be denominated in foreign currencies, and the Portfolio may temporarily
hold uninvested reserves in bank deposits in foreign currencies, the Portfo-
lio's value may rise or fall depending on currency exchange rates. The Portfo-
lio may also have to pay a fee to convert funds from one currency to another.
In addition, non-U.S.-based companies are not subject to the same account-
ing, auditing and financial reporting standards as are domestic companies and
may have policies that are not comparable to those of domestic companies.
There may be less publicly-available information about non-U.S.-based compa-
nies which may make it difficult to make investment decisions. Securities of
some foreign companies are generally less liquid and more volatile than secu-
rities of comparable domestic companies. There is generally less government
supervision and regulation of stock exchanges, brokers and listed companies
than in the U.S. Political factors may have an impact in the form of confisca-
tory taxation, expropriation or political instability in international mar-
kets.
Although the Portfolio will seek the most favorable trading costs available
in any given market, investors should recognize that foreign commissions are
generally higher than those in the U.S. In addition, custodial expenses, that
is, fees paid to financial institutions for holding the Portfolio's securi-
ties, will generally be higher than would be the case in the U.S.
Some foreign governments also levy withholding taxes against dividend and
interest income. Although in some countries a portion of the taxes is recover-
able, the non-recovered portion of foreign withholding taxes will reduce the
income the Portfolio receives from the companies comprising its investments.
AMERICAN DEPOSITARY RECEIPTS
The Portfolio intends to invest primarily in U.S.-based companies. In addi-
tion, the Portfolio may purchase shares of foreign-based companies in the form
of American Depositary Receipts (ADRs). ADRs may be sponsored or unsponsored.
Sponsored ADRs are established jointly by a depositary and the underlying is-
suer, whereas unsponsored ADRs may be established without participation by the
underlying issuer. Holders of an unsponsored ADR generally bear all the costs
associated with establishing the unsponsored ADR. The depositary of an
unsponsored ADR is under
4
<PAGE>
no obligation to distribute shareholder communications received from the un-
derlying issuer or to pass through voting rights to the holders of the
unsponsored ADR with respect to the deposited securities or pool of securi-
ties.
SHORT-TERM INVESTMENTS
In order to earn a return on uninvested assets, meet anticipated redemp-
tions, or for temporary defensive purposes, the Portfolio may invest a portion
of its assets in domestic and foreign money market instruments including cer-
tificates of deposit, bankers acceptances, time deposits, U.S. government ob-
ligations, U.S. government agency securities, short-term corporate debt secu-
rities, and commercial paper rated A-1 or A-2 by Standard & Poor's Corporation
or Prime-1 or Prime-2 by Moody's Investors Service, Inc. or, if unrated, de-
termined by the Adviser to be of comparable quality.
The Fund has received an Order from the Securities and Exchange Commission
(the "Commission") for permission to deposit the daily uninvested cash bal-
ances of the Fund's Portfolios, as well as cash for investment purposes, into
one or more joint accounts and to invest the daily balance of the joint ac-
counts in the following short-term investments: fully collateralized repur-
chase agreements, interest-bearing or discounted commercial paper including
dollar-denominated commercial paper of foreign issuers, and any other short-
term money market instruments including variable rate demand notes and tax-ex-
empt money instruments. By entering into these investments on a joint basis,
it is expected that a Portfolio may earn a higher rate of return on invest-
ments relative to what it could earn individually.
The Fund has received permission from the Commission for permission to allow
each of its Portfolios to invest the greater of 5% of its total assets or $2.5
million in the UAM Funds' DSI Money Market Portfolio for cash management pur-
poses. (See "Investment Companies.")
REPURCHASE AGREEMENTS
In a repurchase agreement, the Portfolio purchases a security and, at the
same time, arranges to sell it back to the original seller on a predetermined
date. The repurchase agreement states the price that the seller will pay for
the security plus the interest rate that the purchaser will receive while
holding it. In effect, the Portfolio is lending its funds to the seller at an
agreed upon interest rate and receiving a security as collateral for the loan.
Repurchase agreements can range from overnight to a fixed term. They are a
common way to earn interest on short-term funds.
The seller under a repurchase agreement will be required to maintain the
value of the securities subject to the agreement at not less than 100% of the
repurchase price of such securities. The Administrator and the Adviser will
mark to market daily the value of the securities purchased, and the Adviser
will, if necessary, require the seller to maintain additional securities to
ensure that the value is in compliance with the previous sentence.
There are some risks involved in repurchase agreements. If the seller de-
faults on its agreement to buy back the securities and the value of those se-
curities falls, the Portfolio may incur losses in selling these securities on
the open market. Also, if the seller enters bankruptcy, the bankruptcy court
may decide that the securities are collateral not within the control of the
Portfolio and therefore are subject to sale by the trustee in the bankruptcy.
Finally, it is possible that the Portfolio may not be able to prove its owner-
ship of the underlying securities.
The Adviser believes that these risks can be controlled by carefully review-
ing the securities involved in a repurchase agreement as well as the credit
rating of the other party in the transaction. The Portfolio may invest in re-
purchase agreements collateralized by U.S. government securities, certificates
of deposit, bankers acceptances and other short-term securities as outlined
above under "Short-Term Investments."
The Fund has received an Order from the Commission to pool the daily
uninvested cash balances of the Fund's Portfolios in order to invest in repur-
chase agreements on a joint basis. By entering into repurchase agreements on a
joint basis, it is expected that a Portfolio will incur lower transactions
costs and potentially obtain higher rates of interest on such repurchase
agreements. Each Portfolio's participation in the income from jointly pur-
chased repurchase agreements will be based on that Portfolio's percentage
share in the total repurchase agreement.
WHEN-ISSUED, FORWARD DELIVERY AND DELAYED SETTLEMENT SECURITIES
Occasionally the Portfolio will invest in securities whose terms and charac-
teristics are already known but which have not yet been issued. These are
called "when-issued" or "forward delivery" securities. Usually these securi-
ties are purchased within a month of their issue date. "Delayed settlements"
occur when the Portfolio agrees to buy or sell securities at some time in the
future, making no payment until the transaction is actually completed.
The Portfolio will maintain a separate account of cash, U.S. Government se-
curities or other high-grade debt obligations at least equal to the value of
the purchase commitments until payment is made. Typically, no income accrues
on securities purchased on a delayed delivery basis prior to the time delivery
of the securities is made although the Portfolio may earn income on securities
it has deposited in a segregated account.
5
<PAGE>
The Portfolio engages in these types of purchases in order to buy securities
that fit with its investment objectives at attractive prices, not to increase
its investment leverage. Securities purchased on a when-issued basis may de-
cline or appreciate in market value prior to their actual delivery to the
Portfolio.
HEDGING AND RELATED STRATEGIES AND RISK CONSIDERATIONS
To reduce the overall risk of its investments (hedge), it may use options,
futures contracts, and options on futures contracts. Hedging strategies may
also be used in an attempt to manage the Portfolio's exposure to changing se-
curity prices. The Portfolio's ability to use these strategies may be limited
by market conditions, regulatory limits and tax considerations. The Portfo-
lio's obligation under such hedging strategies will be covered by the mainte-
nance of a segregated account consisting of cash, U.S. Government securities
or liquid high grade debt obligations equal to at least 100% of the Portfo-
lio's commitment. The Portfolio may buy or sell futures contracts, write cov-
ered call options and buy put and call options on any security, index, includ-
ing options and futures traded on foreign exchanges and options not traded on
exchanges. The Portfolio's Statement of Additional Information contains fur-
ther information on all of these strategies and the risks associated with
them.
The Portfolio may write or purchase options in privately negotiated transac-
tions ("OTC Options") as well as listed options. OTC Options can be closed out
only by agreement with the other party to the transaction. Any OTC Option pur-
chased by the Portfolio is considered an illiquid security. Any OTC Option
written by the Portfolio will be with a qualified dealer pursuant to an agree-
ment under which the Portfolio may repurchase the option at a formula price.
Such options are considered illiquid to the extent that the formula price ex-
ceeds the intrinsic value of the option. The Portfolio may not purchase or
sell futures contracts or related options for which the aggregate initial mar-
gin and premiums exceed 5% of the fair market value of the Portfolio's assets.
In order to prevent leverage in connection with the purchase of futures con-
tracts or call options thereon by the Portfolio, an amount of cash, cash
equivalents or liquid high grade debt securities equal to the market value of
the obligation under the futures contracts or options (less any related market
deposits) will be maintained in a segregated account with the Fund's Custodi-
an. The Portfolio may not invest more than 15% of its net assets in illiquid
securities and repurchase agreements which have a maturity of longer than
seven days. A more complete discussion of the potential risks involved in
transactions in options or futures contracts and related options is contained
in the Portfolio's Statement of Additional Information.
RISK CONSIDERATIONS. The Portfolio might not employ any of the hedging
strategies described above, and there can be no assurance that any strategy
used will succeed. If the Adviser incorrectly forecasts market values or other
economic factors in utilizing a strategy for the Portfolio, the Portfolio
would be in a better position if it had not hedged at all. In addition, the
Portfolio will pay commissions and other costs in connection with such invest-
ments which may increase the Portfolio's expenses and reduce its return.
The use of these strategies involves certain risks, including (1) the fact
that skills needed to use hedging instruments are different from those needed
to select the Portfolio's securities, (2) possible imperfect correlation, or
even no correlation, between price movements of hedging instruments and price
movements of the investments being hedged, (3) the fact that, while hedging
strategies can reduce the risk of loss, they can also reduce the opportunity
for gain, or even result in losses, by offsetting favorable price movements in
hedged investments and (4) the possible inability of the Portfolio to purchase
or sell a security at a time that otherwise would be favorable for it to do
so, or the possible need for the Portfolio to sell a security at a disadvanta-
geous time due to the need for it to maintain "cover" or to segregate securi-
ties in connection with hedging transactions, and the possible inability of
the Portfolio to close out or to liquidate its hedged position.
RESTRICTED AND ILLIQUID SECURITIES
The Portfolio may purchase restricted securities that are not registered for
sale to the general public but which are eligible for resale to qualified in-
stitutional investors under Rule 144A of the Securities Act of 1933. Under the
supervision of the Fund's Board of Trustees, the Adviser determines the li-
quidity of such investments by considering all relevant factors. Provided that
a dealer or institutional trading market in such securities exists, these re-
stricted securities are not treated as illiquid securities for purposes of the
Portfolio's investment limitations. The Portfolio may also invest up to 15% of
its net assets in securities that are illiquid by virtue of the absence of a
readily available market or because of legal or contractual restrictions on
resale. The prices realized from the sales of these securities could be less
than those originally paid by the Portfolio or less than what may be consid-
ered the fair value of such securities.
LENDING OF PORTFOLIO SECURITIES
The Portfolio may lend its investment securities to qualified institutional
investors who need to borrow securities in order to complete certain transac-
tions, such as covering short sales, avoiding failures to deliver securities
or
6
<PAGE>
completing arbitrage operations. The Portfolio will not loan portfolio securi-
ties to the extent that greater than one-third of its assets at fair market
value, would be committed to loans. 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 Port-
folio. 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 in-
consistent with the Investment Company Act of 1940 (the "1940 Act") or the
Rules and Regulations or interpretations of the Securities and Exchange Com-
mission (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 U.S. 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). As with other ex-
tensions of credit, there are risks of delay in recovery or even loss of
rights in the securities loaned if the borrower of the securities fails finan-
cially. These risks are similar to the ones involved with repurchase agree-
ments as discussed above. 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 Fund's Board of Trustees.
At the present time, the Staff of the Commission does not object if an in-
vestment company pays reasonable negotiated fees in connection with loaned se-
curities 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.
INVESTMENT COMPANIES
As permitted by the 1940 Act, the Portfolio reserves the right to purchase
up to 10% of its total assets, calculated at the time of purchase, in the se-
curities of other open-end or closed-end investment companies. No more than 5%
of the purchasing Portfolio's total assets may be invested in the securities
of any one investment company nor may it acquire more than 3% of the voting
securities of any other investment company. The Portfolio will indirectly bear
its proportionate share of any management fees paid by an investment company
in which it invests in addition to the advisory fee paid by the Portfolio.
The Fund has received an Order from the Commission, which permits each of
its Portfolios to invest the greater of 5% of its total assets or $2.5 million
in the UAM Funds' DSI Money Market Portfolio for cash management purposes pro-
vided that the investment is consistent with the Portfolio's investment poli-
cies and restrictions. Based upon the Portfolio's assets invested in the DSI
Money Market Portfolio, the investing Portfolio's adviser will waive its in-
vestment advisory and any other fees earned as a result of the Portfolio's in-
vestment in the DSI Money Market Portfolio. The investing Portfolio will bear
expenses of the DSI Money Market Portfolio on the same basis as all of its
other shareholders. While the Fund expects to receive permission from the Com-
mission, there can be no assurance that the requested relief will be granted.
PORTFOLIO TURNOVER
This Portfolio is managed for long-term appreciation rather than short-term
trading profits. As a result, the Adviser seeks to keep portfolio turnover be-
low 60%. (A turnover rate of 100% would mean that all securities in the Port-
folio would be replaced within a one-year period.) However, portfolio turnover
depends to a great degree on market conditions. Occasionally, when the market
shifts suddenly or when the prospects for individual stocks change quickly,
the Adviser may find it necessary to sell securities which have not been in
the Portfolio for very long. The Portfolio will not normally engage in short-
term trading, but it reserves the right to do so.
Except as specified above and as described under "Investment Limitations,"
the foregoing investment policies are not fundamental, and the Trustees may
change such policies without an affirmative vote of a "majority of the out-
standing voting securities of the Portfolio," as defined in the 1940 Act.
INVESTMENT LIMITATIONS
To help reduce the Portfolio's exposure to risk in specific situations, it
has adopted certain limitations associated with its investments and investment
practices. These policies and limitations are considered at the time of pur-
chase. The sale of instruments is not required in the event of a subsequent
change in circumstances.
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<PAGE>
The Portfolio's limitations are as follows:
(a) With respect to 75% of its assets, the Portfolio may not own more than
5% of the securities of any single issuer (other than investments is-
sued or guaranteed by the U.S. Government or any of its agencies or in-
strumentalities);
(b) With respect to 75% of its assets, the Portfolio may not own more than
10% of the outstanding voting securities of any one issuer;
(c) The Portfolio may not invest more than 5% of its assets in securities
of issuers (other than securities issued or guaranteed by the U.S. or
foreign governments or their political subdivisions) that have (with
predecessors) less than 3 years of continuous operation;
(d) The Portfolio may not invest more than 25% of its assets in companies
within a single industry; however, there are no limitations on invest-
ments made in instruments issued or guaranteed by the U.S. Government
and its agencies;
(e) The Portfolio may not make loans except by purchasing debt securities
in accordance with its investment objective and policies or entering
into repurchase agreements or by lending its portfolio securities to
banks, brokers, dealers or other financial institutions as long as the
loans are made in compliance with the 1940 Act, as amended, and the
rules, regulations and interpretations of the Commission;
(f) The Portfolio may not borrow except from banks in extraordinary circum-
stances for temporary or emergency purposes. In this situation, the
Portfolio may not (1) borrow more than 33% of its gross assets and (2)
cannot buy additional securities if it borrows more than 5% of its to-
tal assets; and
(g) The Portfolio may not pledge, mortgage or hypothecate more than 33% of
its total assets at fair market value.
The Portfolio's investment objective and investment limitations (a), (b),
(d), (e) and (f)(i) listed above are fundamental policies and may be changed
only with the approval of the holders of a majority of the outstanding voting
securities of the Portfolio. The other investment limitations described here,
those not specified as fundamental in the Statement of Additional Information,
and the Portfolio's investment policies are not fundamental, and the Fund's
Board of Trustees may change them without shareholder approval.
PORTFOLIO TRANSACTIONS
The Portfolio's Investment Advisory Agreement authorizes the Adviser to se-
lect the brokers or dealers that will execute the purchases and sales of in-
vestment securities for the Portfolio. The Agreement directs the Adviser to
use its best efforts to obtain the best available price and most favorable ex-
ecution for all the Portfolio's transactions.
It is not the Fund's practice to allocate brokerage or effect principal
transactions with dealers 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.
Some securities considered for investment by the Portfolio may also be ap-
propriate for other clients served by the Adviser. If a purchase or sale of
securities is 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 fair and reasonable manner. Although there is no
specified formula for allocating such transactions, the various allocation
methods used by the Adviser, and the result of such allocations, are subject
to periodic review by the Fund's Board of Trustees.
BUYING, SELLING AND EXCHANGING SHARES
Shares of each Portfolio and Class may be purchased through any Service
Agent having selling or service agreements with UAM Fund Distributors, Inc.
(the "Distributor") without a sales commission, at the net asset value per
share next determined after an order is received by the Fund or the designated
Service Agent. See "Service and Distribution Plans" and "How Share Prices are
Determined." The required minimum initial investment for the Portfolio is
$2,500, with certain exceptions as may be determined from time to time by the
Officers of the Fund. The initial investment minimum for IRA accounts is $500.
The initial investment minimum for spousal IRA accounts is $250. The minimum
for any subsequent investment is $100. The Portfolio issues two classes of
shares: Institutional Class and Service Class. The two classes of shares each
represent interests in the same portfolio of investments, have the same rights
and are identical in all respects, except that the Service Class Shares of-
fered by this Prospectus bear shareholder servicing expenses and distribution
plan expenses, and have exclusive voting rights with respect to the
8
<PAGE>
Rule 12b-1 Distribution Plan pursuant to which the distribution fee may be
paid. The two classes have different exchange privileges. See "How to Exchange
Shares." The net income attributable to Service Class Shares and the dividends
payable on Service Class Shares will be reduced by the amount of the share-
holder servicing and distribution fees; accordingly, the net asset value of
the Service Class Shares will be reduced by such amount to the extent the
Portfolio has undistributed net income.
Some Service Agents may also impose additional or different conditions or
other account fees on the purchase and redemption of Portfolio shares, which
are not subject to the Rule 12b-1 Service and Distribution Plans. Each Service
Agent is responsible for transmitting to its customers a schedule of any such
fees and information regarding any additional or different conditions regard-
ing purchases and redemptions. Shareholders who are customers of Service
Agents should consult their Service Agent for information regarding these fees
and conditions. Amounts paid to Service Agents may include transaction fees
and/or service fees paid by the Fund from the Fund assets attributable to the
Service Agent and would not be imposed if shares of the Portfolio were pur-
chased directly from the Fund or the Distributor. The Service Agents may pro-
vide shareholder services to their customers that are not available to a
shareholder dealing directly with the Fund. A salesperson and any other person
entitled to receive compensation for selling or servicing Portfolio shares may
receive different compensation with respect to one particular class of shares
over another in the Fund.
If you buy shares of a Portfolio through a Service Agent, the Service Agent
must receive your investment order before the close of trading on the New York
Stock Exchange ("NYSE"), generally 4:00 p.m. (Eastern Time) and transmit it to
the Fund's Sub-Transfer Agent (prior to the close of the Sub-Transfer Agent's
business day) and the Distributor to receive that day's offering price. Proper
payment for the order must be received by the Sub-Transfer Agent no later than
the time when the Portfolio is priced on the following business day. Service
Agents are responsible to their customers, the Fund and its Distributor for
timely transmission of all subscription and redemption requests, investment
information, documentation and money.
HOW TO BUY SHARES BY MAIL
An account may be opened with the assistance of your Service Agent by com-
pleting and signing an Account Registration Form, and forwarding it, together
with a check payable to UAM Funds Trust to:
UAM Funds Trust
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798 Boston, MA 02208-2798
The carbon copy (manually signed) of the Account Registration Form must be
mailed to:
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
Payment for the purchase of shares received by mail will be credited to your
account at the net asset value per share of the Portfolio next determined af-
ter receipt. Such payment need not be converted into Federal Funds (monies
credited to the Fund's Custodian Bank, by a Federal Reserve Bank) before ac-
ceptance by the Fund.
HOW TO BUY BY WIRE
Shares of the Portfolio may also be purchased by wiring Federal Funds to the
Fund's Custodian Bank (see instructions below). In order to insure prompt
crediting of the Federal Funds wire, it is important to follow these steps:
(a) Your Service Agent should telephone the Fund's Transfer Agent (toll-
free 1-800-638-7983) and provide the account name, address, telephone
number, social security or taxpayer identification number, the Portfo-
lio selected (Service Class Shares), the amount being wired and the
name of the bank wiring the funds. (Investors with existing accounts
should also notify the Fund prior to wiring funds.) An account number
will then be provided to you;
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<PAGE>
(b) Instruct your bank to wire the specified amount to the Fund's Custodi-
an;
The Chase Manhattan Bank
ABA #021000011
UAM Funds
Credit DDA #9102772952
(Your Account Registration)
(Your Account Number)
(Wire Control Number)
(c) A completed Account Registration Form must be forwarded to the UAM
Funds Service Center and UAM Fund Distributors, Inc. at the addresses
shown thereon as soon as possible. Federal Funds purchases will be ac-
cepted only on a day on which the New York Stock Exchange and the Cus-
todian Bank are open for business.
ADDITIONAL INVESTMENTS
You may add to your account at any time (minimum additional investment is
$100) by purchasing shares at net asset value through your Service Agent or by
mailing a check to the UAM Funds Service Center (payable to "UAM Funds Trust")
at the above address or by wiring monies to the Custodian Bank using the in-
structions outlined above. It is very important that your account number, ac-
count name, class of shares, and the Portfolio to be purchased, are specified
on the check or wire to insure proper crediting to your account. In order to
insure that your wire orders are invested promptly, you are requested to no-
tify the Fund (toll-free 1-800-638-7983) prior to the wire date. Mail orders
should include, when possible, the "Invest by Mail" stub which accompanies any
Fund confirmation statement.
OTHER PURCHASE INFORMATION
Non-securities dealer Service Agents may receive transaction fees that are
the same as distribution fees paid to dealers.
The purchase price of the shares of the Portfolio is the net asset value
next determined after the order and payment is received. (See "How Share
Prices are Determined.") An order and payment received prior to the close of
the New York Stock Exchange (the "NYSE") will be executed at the price com-
puted on the date of receipt; an order received after the close of the NYSE
will be executed at the price computed on the next day the NYSE is open.
The Fund reserves the right, in its sole discretion, to suspend the offering
of shares of either Class of the Portfolio or reject purchase orders when, in
the judgment of management, such suspension or rejection is in the best inter-
ests of the Fund.
Purchases of shares will be made in full and fractional shares of the Port-
folio calculated to three decimal places. In the interest of economy and con-
venience, certificates for shares will not be issued except at the written re-
quest of the shareholder. Certificates for fractional shares, however, will
not be issued.
IN-KIND PURCHASES
Under certain circumstances, investors who own securities may be able to ex-
change them directly for shares of the Portfolio without converting their in-
vestments into cash first. The Portfolio will accept such in-kind purchases
only if the securities offered for exchange meet the Portfolio's investment
criteria, which are set forth in the "Details on Investment Policies" section
of this Prospectus. Once accepted, the shares will be valued according to the
process described in "How Share Prices are Determined" at the same time the
Portfolio's shares are valued. Once a value has been determined for both, an
exchange will be made. All dividends, interest, subscription, or other rights
pertaining to these securities become the Fund's property; if you receive any
such items, you must deliver them to the Fund immediately. Securities acquired
through an in-kind purchase will be acquired for investment and not for imme-
diate resale.
The Fund will not accept securities for exchange unless they meet the fol-
lowing criteria:
. The securities are eligible to be included in the Portfolio and market
quotes can readily be obtained for them, e.g., as evidenced by a list-
ing on the American Stock Exchange, NYSE, NASDAQ or a foreign ex-
change.
. The investor assures the Fund that the securities are liquid and not
subject to any restrictions under the Securities Act of 1933 or any
other law or regulation.
. The value of the securities exchanged does not increase the Portfo-
lio's position in any specific issuer's security to more than 5% of
the Portfolio's net assets.
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<PAGE>
For tax purposes, the IRS generally treats any exchange of securities for
Portfolio shares as a sale of the securities. This means that if you exchange
securities which have appreciated in value since you bought them, you will re-
alize capital gains and incur a tax liability. If you are interested in such
an exchange, we suggest you discuss any potential tax liability with your tax
adviser before proceeding. Investors interested in such exchanges should con-
tact the Adviser.
HOW TO SELL SHARES
You may sell shares by telephone or mail at any time, free of charge. Your
shares will be valued at the next price calculated after we receive your in-
structions to sell.
BY MAIL:
To redeem by mail, include
. your share certificates, if we have issued them to you;
. a letter which tells us how many shares you wish to redeem or, alter-
natively, what dollar amount you wish to receive;
. a signature guaranteed by your bank, broker or other financial insti-
tution (see "Signature Guarantees" below); and
. any other necessary legal documents, in the case of estates, trusts,
guardianships, custodianships, corporations, pension and profit-shar-
ing plans and other organizations.
Your request should be addressed to:
UAM Funds Trust
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
or to your Service Agent.
If you are not sure of which documents to send, please contact the UAM Funds
Service Center at 1-800-638-7983.
BY TELEPHONE
To redeem shares by telephone, you must have completed an Account Registra-
tion Form and have returned it to the Fund. Once this form is on file, simply
call the Fund and request the redemption amount to be mailed to you or wired
to your bank. The Fund and the Fund's Transfer Agent will employ reasonable
precautions to make sure that the instructions communicated by telephone are
genuine, and they may be liable for losses if they fail to do so. You will be
asked to provide certain personal identification when you open an account, and
again, when you request a telephone redemption. In addition, all telephone
transaction requests will be recorded, and investors may be required to pro-
vide additional telecopied written instructions of such transaction requests.
Neither the Fund nor the Transfer Agent will be responsible for any loss, ad-
ditional cost or expense for following transaction instructions received by
telephone that it reasonably believes are genuine.
To change the commercial bank or the account designated to receive redemp-
tion proceeds, a written request must be sent to the Fund at the address on
the cover of this Prospectus. Requests to change the bank or account must be
signed by each shareholder and each signature must be guaranteed. You cannot
redeem shares by telephone if you hold stock certificates for these shares.
Please contact one of the Fund's representatives at 1-800-638-7983 for further
details.
SIGNATURE GUARANTEES
To protect your account, the Fund and the Fund's Transfer Agent from fraud,
signature guarantees are required for certain redemptions. Signature guaran-
tees are used to verify that the person who authorizes a redemption is, in
fact, the registered shareholder. They are required whenever you:
. redeem shares and request that the proceeds be sent to someone other than
the registered shareholder(s) or to an address which is not the regis-
tered address; or
. transfer shares from one Portfolio to another.
Signatures must be guaranteed by an "eligible guarantor institution" as de-
fined in Rule 17Ad-15 under the Securities Exchange Act of 1934. (The UAM
Funds Service Center can provide you with a full definition of the term.)
11
<PAGE>
You can obtain a signature guarantee at almost any bank, as well as through
most brokers, dealers, credit unions, national securities exchanges, regis-
tered securities associations, clearing agencies and savings associations.
Broker-dealers guaranteeing signatures must be a member of a clearing corpora-
tion or maintain net capital of at least $100,000. Credit unions must be au-
thorized to issue signature guarantees. Signature guarantees will be accepted
from any eligible guarantor institution which participates in a signature
guarantee program. A notary public can not provide a signature guarantee.
The signature guarantee must appear either:
. on the written request for redemption; or
. on a separate instrument for assignment (a "stock power") which should
specify the total number of shares to be redeemed; or
. on all stock certificates tendered for redemption, and, if shares held by
the Fund are also being redeemed, then on the letter or stock power.
FURTHER INFORMATION ON SELLING SHARES
Normally, the Fund will make payment for all shares sold under this proce-
dure within one business day after we receive a request. In no event will pay-
ment be made more than seven days after receipt of a redemption (sale) request
in good order. The Fund may suspend the right of redemption or postpone the
date at times when either the NYSE and Custodian Bank are closed, or under any
emergency circumstances as determined by the Commission.
If the Fund's Board of Trustees determines that it would be detrimental to
the best interests of the remaining shareholders of the Fund to make payments
wholly or partly in cash, the Fund may pay the redemption proceeds in whole or
in part by a distribution in-kind of liquid securities held by the Portfolio
instead of cash in conformity with applicable rules of the Commission. Invest-
ors may incur brokerage charges when they sell portfolio securities received
in payment of redemptions.
HOW TO EXCHANGE SHARES
You may exchange Service Class Shares of the Portfolio for any other Service
Class Shares of a Portfolio included in the UAM Funds which is comprised of
the Fund and UAM Funds, Inc. (See the list of Portfolios of the UAM Funds--
Service Class Shares at the end of this Prospectus.) When you exchange shares
you sell your old shares and buy new ones, both at the price calculated after
the next market close. There is no sales charge for exchanges. Exchange re-
quests may be made by mail, telephone or through a Service Agent. Telephone
exchanges may be made only if the Fund holds all share certificates and if the
registration of the two accounts is identical. Telephone exchanges received
before 4:00 p.m. Eastern Time will be processed at the share price set after
the market closes on the same day. Exchanges received after 4:00 p.m. Eastern
Time will be executed at the share price determined at the market close on the
following day. For additional information regarding responsibility for the au-
thenticity of telephone instructions, see "How to Sell Shares By Telephone"
above. The Fund may also limit both the frequency and the amount of exchanges
permitted if it is in the interest of the Fund's shareholders. The exchange
privilege is only available with respect to Portfolios that are registered for
sale in a shareholder's state of residence.
Neither the Fund nor the Fund's Transfer Agent will take responsibility for
ensuring it is indeed the shareholder issuing the exchange orders; however, we
may use some of the precautions described above for selling shares. The Fund
may also limit both the frequency and the amount of exchanges permitted if it
is in the interest of the Fund's shareholders.
Please review a Portfolio's investment objective before shifting money into
it. Make sure its objective and strategies fit with your long-term goals. Be-
fore exchanging into a Portfolio, read its Prospectus. You may obtain one for
the Portfolio(s) you are interested in by calling the UAM Funds Service Center
at 1-800-638-7983. Remember, every time you exchange shares of one Portfolio
for another, your transaction is counted as a sale of the first security and a
purchase of the second. As a result, you may incur a tax liability by exchang-
ing shares if your investment has appreciated since you bought it. Consult
your tax adviser to determine your liability for capital gains taxes.
SERVICE AND DISTRIBUTION PLANS
Under the Service Plan for Service Class Shares, adopted pursuant to Rule
12b-1 under the 1940 Act, the Fund may enter into service agreements with
Service Agents (broker-dealers or other financial institutions) who receive
fees with respect to the Fund's Service Class Shares owned by shareholders for
whom the Service Agent is the dealer or holder of record, or for whom the
Service Agent performs Servicing, as defined below. These fees are paid out of
the assets allocable to Service Class Shares to the Distributor, to the Serv-
ice Agent directly or through the Distributor.
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<PAGE>
The Fund reimburses the Distributor or the Service Agent, as the case may be,
for payments made at an annual rate of up to 0.25 of 1% of the average daily
value of Service Class Shares owned by clients of such Service Agent during
the period payments for Servicing are being made to it. Such payments are
borne exclusively by the Service Class Shares. Each item for which a payment
may be made under the Service Plan constitutes personal service and/or share-
holder account maintenance and may constitute an expense of distributing Fund
shares as the Commission construes such term under Rule 12b-1. The fees pay-
able for Servicing are payable without regard to actual expenses incurred,
subject to adjustment of the fee prospectively to reflect actual expenses.
Servicing may include, among other things, one or more of the following ren-
dered with respect to the Service Class shareholders: answering client inqui-
ries regarding the Fund; assisting clients in changing dividend options, ac-
count designations and addresses; performing sub-accounting; establishing and
maintaining shareholder accounts and records; processing purchase and redemp-
tion transactions; investing client cash account balances automatically in
Service Class Shares; providing periodic statements showing a client's account
balance and integrating such statements with those of other transactions and
balances in the client's other accounts serviced by the Service Agent; arrang-
ing for bank wires; and such other services as the Fund may request, to the
extent the Service Agent is permitted by applicable statute, rule or regula-
tion.
The Glass-Steagall Act and other applicable laws prohibit Federally chart-
ered or supervised banks from engaging in certain aspects of the business of
issuing, underwriting, selling and/or distributing securities.
Accordingly, banks will be engaged to act as Service Agents only to perform
administrative and shareholder servicing functions, including transaction-re-
lated agency services for their customers. If a bank were prohibited from so
acting, its shareholder clients would be permitted to remain Fund shareholders
and alternative means for continuing the Servicing of such shareholders would
be sought.
The Distributor promotes the distribution of the Service Class Shares in ac-
cordance with the terms of a Distribution Plan adopted pursuant to Rule 12b-1
under the 1940 Act. The Distribution Plan provides for the use of Fund assets
allocable to Service Class Shares to pay expenses of distributing such shares.
The Distribution Plan and Service Plan (the "Plans") were approved by the
Board of Trustees, including a majority of the trustees who are not "inter-
ested persons" of the Fund as defined in the 1940 Act (and each of whom has no
direct or indirect financial interest in the Plans or any agreement related
thereto, referred to herein as the "12b-1 Trustees"). The Plans may be termi-
nated at any time by the vote of the Board or the 12b-1 Trustees, or by the
vote of a majority of the outstanding Service Class Shares of the Newbold's
Equity Portfolio.
While the Plans continue in effect, the selection of the 12b-1 Trustees is
committed to the discretion of such persons then in office. The Plans provide
generally that a Portfolio may incur distribution and service costs under the
Plans which may not exceed in the aggregate .75% per annum of that Portfolio's
net assets. The Board has currently limited aggregate payments under the Plans
to .50% per annum of a Portfolio's net assets. Under the Plans, as implemented
for the Newbold's Equity Portfolio Service Class Shares, Distribution Plan ex-
penses may be no more than .15% and Service Plan expenses may be no more than
0.25%, although the maximum limit may be paid following appropriate Board ap-
proval. Upon implementation, the Distribution Plan would permit payments to
the Distributor, broker-dealers, other financial institutions, sales repre-
sentatives or other third parties who render promotional and distribution
services, for items such as advertising expenses, selling expenses, commis-
sions or travel reasonably intended to result in sales of Service Class Shares
and for the printing of prospectuses sent to prospective purchasers of Service
Class Shares of the Newbold's Equity Portfolio.
Although the Plans may be amended by the Board of Trustees, any changes in
the Plans which would materially increase the amounts authorized to be paid
under the Plans must be approved by shareholders of the Class involved. The
total amounts paid under the foregoing arrangements may not exceed the maximum
limits specified above, and the amounts and purposes of expenditures under the
Plans must be reported to the 12b-1 Trustees quarterly. The amounts allowable
under the Plans for each Class of Shares of the Portfolio are also limited un-
der certain rules of the National Association of Securities Dealers, Inc.
In addition to payments by the Fund under the Plans, the Distributor, United
Asset Management Corporation ("UAM"), the parent company of the Adviser, the
Adviser, or any of their affiliates, may, at its own expense, compensate a
Service Organization or other person for marketing, shareholder servicing,
record-keeping and/or other services performed with respect to the Fund, a
Portfolio or any Class of Shares of a Portfolio. The person making such pay-
ments may do so out of its revenues, its profits or any other source available
to it. Such services arrangements, when in effect, are made generally avail-
able to all qualified service providers. The Adviser may compensate its affil-
iated companies for referring investors to the Portfolio.
13
<PAGE>
The Distributor, the Adviser and certain of their other affiliates also par-
ticipate, at the date of this Prospectus, in an arrangement with Smith Barney
Inc. under which Smith Barney provides certain defined contribution plan mar-
keting and shareholder services and receives from such entities an amount
equal to up to 33.3% of the portion of the investment advisory fees attribut-
able to the invested assets of Smith Barney's eligible customer accounts with-
out regard to any expense limitation in addition to amounts payable to all
selling dealers. The Fund also compensates Smith Barney for services it pro-
vides to certain defined contribution plan shareholders that are not otherwise
provided by the Administrator.
HOW SHARE PRICES ARE DETERMINED
The net asset value per share of each Class of the Portfolio is calculated
every day that the NYSE is open. This means that shares are revalued after the
market closes, generally at 4:00 p.m. Eastern Time on Monday through Friday,
except for major holidays when the NYSE is closed. The per share net asset
value of the Service Class Shares may be lower than the per share net asset
value of the Institutional Class Shares reflecting the daily expense accruals
of the shareholder servicing, distribution and transfer agency fees applicable
to the Service Class Shares.
To determine how much each share is worth, we add up the total market value
of all the securities in the Portfolio plus cash and other assets, deduct lia-
bilities and then divide by the total number of shares outstanding.
For stocks, we use the last quoted trading price as the market value. For
listed stocks, we use the price quoted by the exchange on which the stock is
primarily traded. Unlisted stocks and listed stocks which have not been traded
on the valuation date or for which market quotations are not readily available
are valued at a price between the last price asked and the last price bid. For
valuation purposes, quotations of foreign securities in a foreign currency are
converted to U.S. dollar equivalents based upon the bid price of such curren-
cies against U.S. dollars quoted by any major bank or by a broker. The value
of other assets and securities for which no quotations are readily available
(including restricted securities) is determined in good faith at fair value
using methods determined by the Fund's Board of Trustees.
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
DIVIDENDS
Stocks generate income in the form of dividends. The Portfolio will normally
distribute substantially all of its net investment income (for tax purposes)
from its investments, as well as any interest earned from short-term invest-
ments, to shareholders in the form of quarterly dividends. You must instruct
the Portfolio to pay out dividends and distributions in cash to you or to re-
invest them. The Account Registration Form has a box for your instructions.
Unless you specifically tell us to distribute dividend income in cash, howev-
er, we will assume you want this income reinvested. The per share dividends
and distributions on Service Class Shares generally will be lower than the per
share dividends and distributions on Institutional Class Shares as a result of
the shareholder servicing, distribution and any transfer agency fees, applica-
ble to the Service Class Shares.
Reinvested dividend distributions will affect your tax liability. By law,
you must pay taxes on any dividend or interest income you receive on your in-
vestments whether distributed in cash or reinvested in shares. The Portfolio
will send you a statement at the end of the year telling you exactly how much
dividend income you have earned for tax purposes.
CAPITAL GAINS
Capital gains are another source of appreciation to the Portfolio. Basical-
ly, a gain is an increase in the value of a stock or bond.
You can incur capital gains in two ways. First, if the Portfolio buys a
stock or bond at one price, then sells it at a higher price, it will realize a
capital gain. At the end of the year, the capital gains computed under tax
rules that the Portfolio has made are added up and capital losses are sub-
tracted. The total is then divided by the number of shares outstanding. If any
net capital gains are realized, the Portfolio will normally distribute such
gains annually. You will receive a statement informing you of your share of
the Portfolio's capital gains.
The second way to incur capital gains is to sell or exchange your shares. If
you sell shares at a higher price than you bought them at, you will be respon-
sible for paying taxes on your gain. There are several ways to determine your
tax liability, and we suggest you contact a qualified tax adviser to help you
decide which is best for you.
14
<PAGE>
TAXES
The Portfolio intends to qualify each year as a "regulated investment compa-
ny" under Federal tax law, and if it qualifies, the Portfolio will not be lia-
ble for Federal income taxes, because it will have distributed all its net in-
vestment income and net realized capital gains to shareholders. Shareholders
will then have to pay taxes on the dividends, and on gains whether they are
distributed as cash or are reinvested in shares. Dividends and short-term cap-
ital gains will be taxed as ordinary income. Long-term capital gains distribu-
tions are taxed as long-term capital gains. Such dividends and distributions
may be subject to state and local taxes. Redemptions of shares in the Portfo-
lio are taxable events for Federal income tax purposes. A shareholder may also
be subject to state and local taxes on such redemptions.
Dividends declared in October, November and December to shareholders of rec-
ord in such a month will be treated as if they had been paid by the Fund and
received by the shareholders on December 31 of the same calendar year, pro-
vided that the dividends are paid before February of the following year.
The Fund is required by Federal law to withhold 31% of reportable payments
(which may include dividends, capital gains distributions and redemptions)
paid to shareholders who have not complied with IRS regulations. In order to
avoid this withholding requirement, you must certify on the Account Registra-
tion Form or on a separate form supplied by the Fund that your Social Security
or Taxpayer Identification Number you have provided is correct and that you
are not currently subject to backup withholding or that you are exempt from
backup withholding.
Dividends and interest received by the Portfolio may give rise to withhold-
ing and other taxes imposed by foreign countries. These taxes reduce the Port-
folio's dividends but are included in the taxable income reported on your tax
statement if the Portfolio qualifies for this tax treatment and elects to pass
it through to you. You may be able to claim an offsetting tax credit or item-
ized deduction for foreign taxes paid by the Portfolio. Your tax statement
will generally show the amount of foreign tax for which a credit or deduction
may be available.
FUND MANAGEMENT AND ADMINISTRATION
INVESTMENT ADVISER
The Adviser is a registered investment adviser formed in 1940. Its business
offices are located at 950 Haverford Road in Bryn Mawr, Pennsylvania. The Ad-
viser is a wholly-owned subsidiary of United Asset Management Corporation
("UAM") and provides and offers investment management and advisory services to
corporations, unions, pensions and profit-sharing plans, trusts, estates and
other institutions and investors. The Adviser currently has over $7 billion in
assets under management.
The Portfolio pays an annual fee in monthly installments to the Adviser for
advisory services. This fee is accrued daily and paid monthly as a percentage
of the average net assets in the Portfolio for that month. The percentage fee
on an annual basis is 0.50%.
The Adviser may compensate its affiliated companies for referring investors
to the Portfolio. The Adviser and its parent company may also make payments to
unaffiliated brokers who perform distribution, marketing, shareholder and
other services with respect to the Portfolio.
An Investment Committee at the Adviser is responsible for the day-to-day
management of the Portfolio.
ADMINISTRATOR
Pursuant to a Fund Administration Agreement dated April 15, 1996, UAM Fund
Services, Inc. ("UAMFSI") a wholly-owned subsidiary of United Asset Management
Corporation with its principal office located at 211 Congress Street, Boston,
MA 02110, is responsible for performing and overseeing administration, fund
accounting, dividend disbursing and transfer agency services provided to the
Fund and its Portfolios. UAMFSI has subcontracted the performance of certain
of such services to Chase Global Funds Services Company ("CGFSC"), an affili-
ate of The Chase Manhattan Bank, pursuant to a Mutual Funds Service Agreement
dated April 15, 1996. CGFSC is located at 73 Tremont Street, Boston, MA 02108-
3913. Effective April 1, 1996, The Chase Manhattan Corporation, the parent of
The Chase Manhattan Bank merged with and into Chemical Banking Corporation,
the parent company of Chemical Bank. Chemical Banking Corporation is the sur-
viving corporation and will continue its existence under the name "The Chase
Manhattan Corporation".
Each Portfolio pays to UAMFSI a monthly fee comprised of two parts: a Port-
folio-specific fee which is retained by UAMFSI and a sub-administration fee
which UAMFSI in turn pays to CGFSC. The Portfolio-specific fees for the IRC
Enhanced Index Portfolio are 0.04% of aggregate net assets. The sub-adminis-
tration fee calculated on an annualized basis equals: 0.19 of 1% of the first
$200 million of total net assets of the Fund; 0.11 of 1% of the next $800 mil-
lion of total net assets of the Fund; 0.07 of 1% of total net assets in excess
of $1 billion but less than $3
15
<PAGE>
billion; and 0.05 of 1% of total net assets in excess of $3 billion. The sub-
administration fees are allocated among the Portfolios on the basis of their
relative assets and are subject to a graduated minimum fee schedule per Port-
folio of $2,000 per month upon inception of a Portfolio to $70,000 annually
after two years. If a separate class of shares is added to a Portfolio, the
minimum annual fee payable by that Portfolio may be increased by up to
$20,000.
DISTRIBUTOR
UAM Fund Distributors, Inc., a wholly-owned subsidiary of UAM with its
principal office located at 211 Congress Street, Boston, Massachusetts 02110,
distributes the shares of the Fund. Under the Fund's Distribution Agreement
(the "Distribution Agreement"), the Distributor, as agent of the Fund, agrees
to use its best efforts as sole distributor of the Fund's shares. The
Distributor does not receive any fee or other compensation under the
Distribution Agreement (except as described under "Service and Distribution
Plans" above) which continues in effect as long as the Fund's Board of
Trustees, including a majority of the Trustees who are not parties to the
Agreement or interested persons of any such party, approve it on an annual
basis. This Distribution Agreement provides that the Fund will bear the costs
of the registration of its shares with the Commission and various states and
the printing of its prospectuses, statements of additional information and
reports to shareholders.
CUSTODIAN
The Chase Manhattan Bank serves as custodian of the Fund's assets.
ACCOUNTANTS
Price Waterhouse LLP acts as the independent accountants for the Fund and
audits its financial statements annually.
SUB-ADMINISTRATOR, SUB-TRANSFER AND SUB-DIVIDEND DISBURSING AGENT
Chase Global Funds Services Company, 73 Tremont Street, Boston, MA 02108,
acts as sub-administrator, sub-transfer agent and sub-dividend disbursing
agent for the Fund.
REPORTS
Investors will receive unaudited semi-annual financial statements and annual
financial statements audited by Price Waterhouse LLP.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be made by writing to the Fund at the address
listed on the cover of this Prospectus or by calling 1-800-638-7983.
LITIGATION
The Fund is not involved in any litigation.
GENERAL FUND INFORMATION
The Portfolio is one of a series of investment portfolios available through
UAM Funds Trust, an open-end investment company known as a "mutual fund." Each
of the Portfolios which make up the Fund have different investment objectives
and policies. Together, the Portfolios offer a diverse set of risk and return
characteristics to suit a wide range of investor needs. The Fund was organized
under the name "The Regis Fund II" on May 18, 1994 as a Delaware business
trust. On October 31, 1995, the name was changed to "UAM Funds Trust."
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Officers of the Fund manage its day-to-day operations and are responsi-
ble to the Fund's Board of Trustees. The Trustees set broad policies for the
Fund and elect its Officers.
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 sharehold-
ers.
The shares of each Portfolio and Class of the Fund have noncumulative voting
rights, which means that the holders of more than 50% of the shares voting for
the election of Trustees can elect 100% of the Trustees if they choose to do
so. A shareholder is entitled to one vote for each full share held (and a
fractional vote for each fractional share held), then standing in his or her
name on the books of the Fund. Both Institutional Class and Service Class
Shares represent an interest in the same assets of a Portfolio and are identi-
cal in all respects except that the Service Class Shares bear certain expenses
related to shareholder servicing, and the distribution of such shares and have
16
<PAGE>
exclusive voting rights with respect to matters relating to such distribution
expenditures. Information about the Institutional Class Shares of the Portfo-
lios along with the fees and expenses associated with such shares is available
upon request by contacting the Fund at 1-800-638-7983. The Fund will not ordi-
narily hold shareholder meetings except as required by the 1940 Act and other
applicable laws. The Fund has undertaken that its Trustees will call a meeting
of shareholders if such a meeting is requested in writing by the holders of
not less than 10% of the outstanding shares of the Fund. To the extent re-
quired by the undertaking, the Fund will assist shareholder communications in
such matters.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR IN THE PORTFOLIO'S
STATEMENT OF ADDITIONAL INFORMATION, IN CONNECTION WITH THE OFFERING MADE BY
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR ITS REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFERING BY THE FUND IN ANY JURISDICTION IN WHICH SUCH
OFFERING MAY NOT BE LAWFULLY MADE.
17
<PAGE>
UAM FUNDS -- SERVICE CLASS SHARES
BARROW, HANLEY, MEWHINNEY & STRAUSS, INC.
BHM&S Total Return Bond Portfolio
NWQ INVESTMENT MANAGEMENT COMPANY
NWQ Balanced Portfolio
SIRACH CAPITAL MANAGEMENT, INC.
Sirach Growth Portfolio
Sirach Special Equity Portfolio
TOM JOHNSON INVESTMENT MANAGEMENT, INC.
TJ Core Equity Portfolio
18
<PAGE>
UAM FUNDS
UAM FUNDS SERVICE CENTER
C/O CHASE GLOBAL FUNDS SERVICES COMPANY
P.O. BOX 2798
BOSTON, MA 02208-2798
1-800-638-7983
- -------------------------------------------------------------------------------
TJ CORE EQUITY PORTFOLIO
INSTITUTIONAL SERVICE CLASS SHARES
INVESTMENT ADVISER: TOM JOHNSON INVESTMENT MANAGEMENT, INC.
- -------------------------------------------------------------------------------
PROSPECTUS -- AUGUST 28, 1996
TJ Core Equity Portfolio is one of a series of investment portfolios avail-
able through UAM Funds Trust (hereinafter defined as "UAM Funds" or the
"Fund"), an open-end investment company known as a "mutual fund." Each of the
Portfolios that make up the Fund have different investment objectives and pol-
icies. In addition, several of the Fund's Portfolios offer two separate clas-
ses of shares: Institutional Class Shares and Institutional Service Class
Shares. Shares of each class represent equal, pro rata interests in a Portfo-
lio and accrue dividends in the same manner except that Institutional Service
Class Shares bear certain fees payable by that class (at the maximum rate of
.25% per annum) to financial institutions for services they provide to the
owners of such shares. TJ Core Equity Portfolio currently offers only one
class of shares. The securities offered in this Prospectus are Institutional
Service Class Shares ("Service Class Shares") of one diversified Portfolio of
the Fund managed by Tom Johnson Investment Management, Inc.
The TJ Core Equity Portfolio seeks maximum total return consistent with rea-
sonable risk to principal by investing in the common stock of quality compa-
nies with lower valuations in sectors of the economy exhibiting strong, or im-
proving relative performance. There can be no assurance that the Portfolio
will achieve its stated objective.
Please keep this Prospectus for future reference since it contains informa-
tion that you should understand before you invest. You may also wish to review
the TJ Core Equity Portfolio's "Statement of Additional Information" dated Au-
gust 28, 1996 which was filed with the Securities and Exchange Commission and
has been incorporated by reference into this Prospectus. (It is legally con-
sidered to be a part of this Prospectus.) Please call or write the Fund at the
above address to obtain a free copy of this Statement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Fees and Expenses.......................................................... 1
Summary: About the Portfolio............................................... 2
Risk Factors............................................................... 2
Financial Highlights....................................................... 3
Performance Calculations................................................... 4
Details on Investment Policies............................................. 4
Investment Limitations..................................................... 8
Buying, Selling and Exchanging Shares...................................... 9
Service and Distribution Plans............................................. 12
How Share Prices are Determined............................................ 14
Dividends, Capital Gains Distributions and Taxes........................... 14
Fund Management and Administration......................................... 15
General Fund Information................................................... 17
UAM Funds -- Service Class Shares.......................................... 18
</TABLE>
<PAGE>
FEES AND EXPENSES
Investors will be charged various fees and expenses incurred in managing the
TJ Core Equity Portfolio (the "Portfolio") including:
SHAREHOLDER TRANSACTION EXPENSES: These are the costs entailed in buying,
selling or exchanging shares of the Portfolio. The Portfolio does not charge
investors for shareholder transaction expenses. However, transaction fees may
be charged if you are a customer of a broker-dealer or other financial inter-
mediary who has established a shareholder servicing relationship with the Fund
on behalf of their customers. Please see "Buying, Selling and Exchanging
Shares" for further information.
<TABLE>
<S> <C>
Sales Load Imposed on Purchases:...................................... NONE
Sales Load Imposed on Reinvested Dividends:........................... NONE
Deferred Sales Load:.................................................. NONE
Redemption Fees:...................................................... NONE
Exchange Fees:........................................................ NONE
ESTIMATED ANNUAL FUND OPERATING EXPENSES: These expenses, which cover the
cost of administration, marketing and shareholder communication, and are usu-
ally quoted as a percentage of net assets, are factored into the Portfolio's
share price and not billed directly to shareholders. They include:
Investment Advisory Fees:............................................. 0.75 %
Administrative Fees:.................................................. 1.80 %
12b-1 Fees (Including Shareholder Servicing Fees)+.................... 0.25 %
Other Expenses:....................................................... 2.80 %
Advisory Fees Waived and Expenses Assumed:............................ (4.35)%
-----
Total Operating Expenses (After Fee Waivers and Expenses Assumed):.... 1.25 %+*
=====
</TABLE>
- -------
+See "Service and Distribution Plans."
* Tom Johnson Investment Management, Inc., the Adviser, has voluntarily agreed
to waive all or a portion of its advisory fees and to assume operating ex-
penses otherwise payable by the Portfolio, if necessary, in order to keep
the Portfolio's Service Class Shares total annual operating expenses (ex-
cluding interest, taxes and extraordinary expenses) from exceeding 1.25% of
average daily net assets through January 1, 1998. The estimate above in-
cludes the effect of expense offsets. If expense offsets were excluded,
annualized Total Operating Expenses for the period ended April 30, 1996
would be 1.38%. (See "Financial Highlights.") It is estimated that, if the
Adviser did not waive fees and assume expenses, the total annual operating
expenses of the Portfolio's Service Class Shares would be 5.60% of average
daily net assets.
For purposes of calculating the estimated fees and expenses set forth above,
it is assumed that the Portfolio's average daily net assets will be $2 mil-
lion.
The Adviser will not be reimbursed by the Fund for any advisory fees which
are waived or expenses which the Adviser may bear on behalf of the Portfolio.
Investors can get a better idea of how the Portfolio's operating expenses
will affect their own investments by examining the following chart. The chart
shows how much a hypothetical investor would pay in expenses, assuming that he
or she made an initial investment of $1,000, earned a 5% annual rate of return
and redeemed his or her investment at the end of the time period indicated.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
------ -------
<S> <C> <C>
Expenses...................................................... $ 1 $ 4
</TABLE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EX-
PENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE
SHOWN ABOVE.
NOTE TO EXPENSE TABLE
The information set forth in the above table and example relates only to
Service Class Shares of the Portfolio, which shares are subject to different
total fees and expenses than Institutional Class Shares. Service Agents may
charge other fees to their customers who are beneficial owners of Service
Class Shares in connection with their customer accounts. (See "Service and
Distribution Plans.")
1
<PAGE>
SUMMARY: ABOUT THE PORTFOLIO . . .
OBJECTIVE:
The Portfolio seeks maximum total return consistent with reasonable risk to
principal by investing in the common stock of quality companies with lower
valuations in sectors of the economy exhibiting strong, or improving relative
performance. The Portfolio may also invest in other equity-related securities
such as preferred stocks, convertible preferred stocks, convertible bonds, op-
tions, futures, rights and warrants. There can be no assurance that the Port-
folio will achieve its stated objective.
HOW IS THE PORTFOLIO MANAGED?
Tom Johnson Investment Management, Inc. (the "Adviser") believes that maxi-
mum total return on investment can be achieved by analysis of current and an-
ticipated economic fundamentals, asset allocation between stocks, cash and
cash equivalents in the anticipated economic environment and identification of
specific industry groups or specific industries which should benefit as a re-
sult of anticipated economic fundamentals. (See "Details on Investment Poli-
cies.")
WHO MANAGES THE PORTFOLIO?
The Adviser is a registered investment adviser. Founded in 1983, the Adviser
currently has approximately $1.9 billion in assets under management. The Ad-
viser is a wholly-owned subsidiary of United Asset Management Corporation.
(See "Fund Management and Administration.")
WHO SHOULD INVEST IN THE PORTFOLIO?
The Portfolio is suitable for investors who seek maximum total return in
their investments and who are comfortable with the risks associated with in-
vesting in stocks and other equity-related securities.
HOW TO INVEST
The Fund offers shares of the Portfolio to investors without a sales commis-
sion at net asset value next determined after the purchase order is received
in proper form. Share purchases may be made through UAM Fund Distributors
Inc., broker-dealers and financial intermediaries or by sending investments
directly to the Fund. The minimum initial investment in the Portfolio is
$2,500 with certain exceptions as may be determined from time to time by the
officers of the Fund. The initial investment minimum for IRA accounts is $500.
The initial investment minimum for spousal IRA accounts is $250. The minimum
for any subsequent investment is $100. (See "Buying, Selling and Exchanging
Shares.")
DIVIDENDS AND DISTRIBUTIONS
The Portfolio will normally distribute substantially all of its net invest-
ment income in the form of quarterly dividends. Any realized net capital gains
will also be distributed annually. Distributions will be reinvested in the
Portfolio's shares automatically unless an investor elects to receive cash
distributions. (See "Dividends, Capital Gains Distributions and Taxes.")
HOW TO REDEEM
Shares of the Portfolio may be redeemed on any business day when the New
York Stock Exchange ("NYSE") is open, without cost, at the net asset value of
the Portfolio next determined after receipt of the redemption request. The
Portfolio's share price will fluctuate with market and economic conditions.
Therefore, your investment may be worth more or less when redeemed than when
purchased. (See "Buying, Selling and Exchanging Shares.")
ADMINISTRATIVE SERVICES
UAM Fund Services, Inc. (the "Administrator"), a wholly-owned subsidiary of
United Asset Management Corporation ("UAM"), is responsible for performing and
overseeing administration, fund accounting, dividend disbursing and transfer
agency services provided to the Fund and its Portfolios by third-party service
providers. (See "Fund Management and Administration.")
RISK FACTORS
Investing in the Portfolio entails a number of risks as with any stock in-
vestment. Like any stock investment, shares of the Portfolio will rise and
fall in value depending on market perceptions of the value of the underlying
stocks. Share prices may also be affected by overall market movements and by
changes in sector or industry performance.
In addition, you should consider the following factors that could effect the
Portfolio's rate of return:
. The Portfolio may invest in repurchase agreements which entail a risk of
loss should the seller default on its transaction.
2
<PAGE>
. The Portfolio may invest a portion of its assets in derivatives including
futures contracts and options.
. The Portfolio may invest in the securities of foreign issuers which may
be subject to additional risk factors, including foreign currency risks,
not applicable to securities of U.S. issuers.
. The fixed income securities held by the Portfolio will be affected by
general changes in interest rates resulting in increases or decreases in
the value of the securities. The value of fixed income securities can be
expected to vary inversely to the changes in prevailing interest rates,
i.e., as interest rates decline, the market value of fixed income securi-
ties tends to increase and vice versa.
. The Portfolio may invest in investment grade debt securities, but re-
serves the right to hold securities that have been downgraded. Adverse
economic and corporate changes and changes in interest rates may have a
greater impact on issuers of lower rated debt securities which the Port-
folio may hold, which may lead to greater price volatility. Also, lower
rated securities may be more difficult to value accurately or sell in the
secondary market.
. The Portfolio may lend its investment securities which entails a risk of
loss should a borrower fail financially.
. The Portfolio may purchase securities on a when-issued basis which do not
earn interest until issued and may decline or appreciate in market value
prior to their delivery to the Portfolio.
. The Portfolio's performance may depend on the ability of the Adviser who
has substantial experience as an investment adviser but limited experi-
ence as an adviser to a mutual fund.
Further information about these and other risk factors is contained in the
"Details on Investment Policies" section of this Prospectus.
FINANCIAL HIGHLIGHTS
The following table provides selected per share data and ratios for a share
outstanding throughout the period presented of the TJ Core Equity Portfolio
and is part of the Portfolio's Financial Statements included in the Portfo-
lio's 1996 Annual Report to Shareholders which is incorporated by reference
into the Portfolio's Statement of Additional Information. The Portfolio's Fi-
nancial Statements have been audited by Price Waterhouse LLP whose opinion
thereon (which is unqualified) is also incorporated by reference into the
Portfolio's Statement of Additional Information. The following information
should be read in conjunction with the Portfolio's 1996 Annual Report to
Shareholders.
<TABLE>
<CAPTION>
SEPTEMBER 28, 1995*
TO
APRIL 30, 1996
-------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD....................... $10.00
-------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income+................................... 0.06
Net Realized and Unrealized Gain on Investments.......... 1.05
-------
Total From Investment Operations....................... 1.11
-------
DISTRIBUTIONS
Net Investment Income.................................... (0.06)
-------
NET ASSET VALUE, END OF PERIOD............................. $ 11.05
=======
TOTAL RETURN............................................... 11.13%++
=======
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands)...................... $ 1,023
Ratio of Expenses to Average Net Assets+................... 1.38%**#
Ratio of Net Investment Income to Average Net Assets+...... 1.06%**
Portfolio Turnover Rate.................................... 17%
Average Commission Rate.................................... $0.0600
</TABLE>
- -------
* Commencement of Operations.
** Annualized.
+ Net of voluntarily waived fees and expenses assumed by the Adviser of $0.74
per share of the period endedApril 30, 1996.
++ Total return would have been lower had certain fees not been waived and ex-
penses assumed by the Adviser during the period.
# The Ratio of Expenses to Average Net Assets excludes the effect of expense
offsets. If expense offsets were included, the Ratio of Expenses to Average
Net Assets would be 1.25%**.
3
<PAGE>
PERFORMANCE CALCULATIONS
The Portfolio measures performance by calculating total return. Total return
figures are based on historical earnings and are not intended to indicate fu-
ture performance.
Total return is the change in value of an investment in the Portfolio over a
given period, assuming reinvestment of any dividends and capital gains. A cu-
mulative or aggregate total return reflects actual performance over a stated
period of time. An average annual total return is a hypothetical rate of re-
turn that, if achieved annually, would have produced the same cumulative total
return if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same as
actual year-by-year results.
The Portfolio's performance may be compared to data prepared by independent
services which monitor the performance of investment companies, data reported
in financial and industry publications, and various indices as further de-
scribed in the Portfolio's Statement of Additional Information.
The Portfolio's Annual Report to Shareholders for the most recent fiscal
year end contains additional performance information that includes comparisons
with appropriate indices. The Annual Report is available without charge upon
request to the Fund by writing to the address or calling the phone number on
the cover of this Prospectus.
DETAILS ON INVESTMENT POLICIES
INVESTMENT STRATEGY
In seeking its investment objective, the Portfolio will invest at least 65%
of its total assets, under normal circumstances, in equity securities, con-
sisting primarily of common stock of companies with market capitalizations
greater than $200 million at the time of purchase. Furthermore, the Portfolio
will invest so that 80% of the Portfolio's common stock holdings will be of
issuers with market capitalizations greater than $800 million. The Portfolio
may also invest in other equity-related securities such as preferred stock,
convertible preferred stock, convertible bonds, options on stock indices,
rights and warrants. The Portfolio may also invest up to 35% of its assets in
investment grade debt securities which are generally considered to be those
securities having one of the four highest grades assigned by Moody's Investors
Service, Inc. (Aaa, Aa, A or Baa) or Standard & Poor's Corporation (AAA, AA, A
or BBB) or, if unrated, of equivalent quality in the Adviser's judgment. Secu-
rities rated Baa or BBB may possess speculative characteristics and may be
more sensitive to changes in the economy and the financial condition of is-
suers than higher rated securities. The Adviser also reserves the right to re-
tain securities which are downgraded by one or both of the rating agencies, if
in the Adviser's judgment, the retention of securities is warranted. Up to 20%
of the Portfolio's assets may be invested in the securities of foreign securi-
ties.
The Adviser believes that maximum total return can be achieved by investing
in the common stock of quality companies with lower valuations in sectors of
the economy exhibiting strong, or improving relative performance. Beginning
with a thorough analysis of current and anticipated economic fundamentals, ex-
amining key economic variables such as the level and direction of interest
rates, forecasted growth in the GDP, anticipated gains in corporate profits,
inflationary pressures, and money supply growth, as well as other variables,
the Adviser is able to determine the basis for asset allocation between stocks
and cash and cash equivalents.
The analysis of key economic variables also helps identify industry groups
or specific industries which should benefit as a result of anticipated eco-
nomic fundamentals. These industry groups are then analyzed in detail begin-
ning with industry screens, going onto individual company analysis, and fi-
nally specific purchase recommendations. Of particular interest to the Adviser
is the valuation being placed upon the company as well as the forecasted
growth in earnings and dividends over the next 1 to 5 years.
It is anticipated that cash reserves will represent a relatively small per-
centage of the Portfolio's assets. Under normal circumstances, it will be less
than 20%. However, when the Adviser believes that market conditions warrant a
defensive position, up to 100% of the Portfolio's assets may be held in cash
and short-term investments. See "Short-Term Investments and Repurchase Agree-
ments" below for a description of the types of short-term instruments in which
the Portfolio may invest for temporary defensive purposes. When the Portfolio
is in a defensive position, it may not necessarily be pursuing its stated in-
vestment objective.
OTHER INVESTMENT POLICIES
The Portfolio may also, under normal circumstances, invest up to 35% of its
assets, unless restricted by additional limitations described below or in the
Portfolio's Statement of Additional Information, in the following securities,
investments or investment techniques:
4
<PAGE>
FOREIGN INVESTMENTS
The Portfolio may invest up to 20% of its assets in foreign securities which
involve additional risks not typically associated with investing in domestic
securities. Since the securities issued by foreign entities may be denominated
in foreign currencies, and the Portfolio may temporarily hold uninvested re-
serves in bank deposits in foreign currencies, the Portfolio's value may rise
or fall depending on currency exchange rates. The Portfolio may also have to
pay a fee to convert funds from one currency to another.
In addition, non-U.S.-based companies are not subject to the same account-
ing, auditing and financial reporting standards as are domestic companies and
may have policies that are not comparable to those of domestic companies.
There may be less publicly-available information about non-U.S.-based compa-
nies which may make it difficult to make investment decisions. Securities of
some foreign companies are generally less liquid and more volatile than secu-
rities of comparable domestic companies. There is generally less government
supervision and regulation of stock exchanges, brokers and listed companies
than in the U.S. Political factors may have an impact in the form of confisca-
tory taxation, expropriation or political instability in international mar-
kets.
Although the Portfolio will seek the most favorable trading costs available
in any given market, investors should recognize that foreign commissions are
generally higher than those in the U.S. In addition, custodial expenses, that
is, fees paid to financial institutions for holding the Portfolio's securi-
ties, will generally be higher than would be the case in the U.S.
Some foreign governments also levy withholding taxes against dividend and
interest income. Although in some countries a portion of the taxes is recover-
able, the non-recovered portion of foreign withholding taxes will reduce the
income the Portfolio receives from the companies comprising its investments.
For additional information regarding foreign securities, please see the State-
ment of Additional Information.
AMERICAN DEPOSITARY RECEIPTS
The Portfolio intends to invest primarily in U.S.-based companies. In addi-
tion, the Portfolio may purchase shares of foreign-based companies in the form
of American Depositary Receipts (ADRs). Investments in ADRs, which are domes-
tic securities representing ownership rights in foreign companies, will not
exceed 25% of the Portfolio's assets. ADRs may be sponsored or unsponsored.
Sponsored ADRs are established jointly by a depositary and the underlying is-
suer, whereas unsponsored ADRs may be established without participation by the
underlying issuer. Holders of an unsponsored ADR generally bear all the costs
associated with establishing the unsponsored ADR. The depositary of an
unsponsored ADR is under no obligation to distribute shareholder communica-
tions received from the underlying issuer or to pass through voting rights to
the holders of the unsponsored ADR with respect to the deposited securities or
pool of securities.
SHORT-TERM INVESTMENTS
In order to earn a return on uninvested assets, meet anticipated redemp-
tions, or for temporary defensive purposes, the Portfolio may invest a portion
of its assets in domestic and foreign money market instruments including cer-
tificates of deposit, bankers acceptances, time deposits, U.S. Government ob-
ligations, U.S. Government agency securities, short-term corporate debt secu-
rities, and commercial paper rated A-1 or A-2 by Standard & Poor's Corporation
or Prime-1 or Prime-2 by Moody's Investors Service, Inc. or, if unrated, de-
termined by the Adviser to be of comparable quality.
The Fund has received an Order from the Securities and Exchange Commission
(the "Commission") for permission to deposit the daily uninvested cash bal-
ances of the Fund's Portfolios, as well as cash for investment purposes, into
one or more joint accounts and to invest the daily balance of the joint ac-
counts in the following short-term investments: fully collateralized repur-
chase agreements, interest-bearing or discounted commercial paper including
dollar-denominated commercial paper of foreign issuers, and any other short-
term money market instruments including variable rate demand notes and tax-ex-
empt money instruments. By entering into these investments on a joint basis,
it is expected that a Portfolio may earn a higher rate of return on invest-
ments relative to what it could earn individually.
The Fund has received an Order from the Commission, which permits each of
its Portfolios to invest the greater of 5% of its total assets or $2.5 million
in the UAM Funds' DSI Money Market Portfolio for cash management purposes.
(See "Investment Companies.")
REPURCHASE AGREEMENTS
In a repurchase agreement, the Portfolio purchases a security and, at the
same time, arranges to sell it back to the original seller on a predetermined
date. The repurchase agreement states the price that the seller will pay for
the security plus the interest rate that the purchaser will receive while
holding it. In effect, the Portfolio is lending its funds
5
<PAGE>
to the seller at an agreed upon interest rate and receiving a security as col-
lateral for the loan. Repurchase agreements can range from overnight to a
fixed term. They are a common way to earn interest on short-term funds. The
seller under a repurchase agreement will be required to maintain the value of
the securities subject to the agreement at not less than 100% of the repur-
chase price of such securities. The Administrator and the Adviser will mark to
market daily the value of the securities purchased, and the Adviser will, if
necessary, require the seller to maintain additional securities to ensure that
the value is in compliance with the previous sentence.
There are some risks involved in repurchase agreements. If the seller de-
faults on its agreement to buy back the securities and the value of those se-
curities falls, the Portfolio may incur losses in selling these securities on
the open market. Also, if the seller enters bankruptcy, the bankruptcy court
may decide that the securities are collateral not within the control of the
Portfolio and therefore are subject to sale by the trustee in the bankruptcy.
Finally, it is possible that the Portfolio may not be able to prove its owner-
ship of the underlying securities.
The Adviser believes that these risks can be controlled by carefully review-
ing the securities involved in a repurchase agreement as well as the credit
rating of the other party in the transaction. The Portfolio may invest in re-
purchase agreements collateralized by U.S. Government securities, certificates
of deposit, bankers acceptances and other short-term securities as outlined
above under "Short-Term Investments."
The Fund has received an Order from the Commission for permission to pool
the daily uninvested cash balances of the Fund's Portfolios in order to invest
in repurchase agreements on a joint basis. By entering into repurchase agree-
ments on a joint basis, it is expected that a Portfolio will incur lower
transactions costs and potentially obtain higher rates of interest on such re-
purchase agreements. Each Portfolio's participation in the income from jointly
purchased repurchase agreements will be based on that Portfolio's percentage
share in the total repurchase agreement.
WHEN-ISSUED, FORWARD DELIVERY AND DELAYED SETTLEMENT SECURITIES
Occasionally the Portfolio will invest in securities whose terms and charac-
teristics are already known but which have not yet been issued. These are
called "when-issued" or "forward delivery" securities. Usually these securi-
ties are purchased within a month of their issue date. "Delayed settlements"
occur when the Portfolio agrees to buy or sell securities at some time in the
future, making no payment until the transaction is actually completed.
The Portfolio will maintain a separate account of cash, U.S. Government se-
curities or other high-grade debt obligations at least equal to the value of
the purchase commitments until payment is made. Typically, no income accrues
on securities purchased on a delayed delivery basis prior to the time delivery
of the securities is made although the Portfolio may earn income on securities
it has deposited in a segregated account.
The Portfolio engages in these types of purchases in order to buy securities
that fit with its investment objective at attractive prices -- not to increase
its investment leverage. Securities purchased on a when-issued basis may de-
cline or appreciate in market value prior to their actual delivery to the
Portfolio.
FUTURES AND OPTIONS TRANSACTIONS
In order to remain fully invested, and to reduce transaction costs, the
Portfolio may utilize appropriate futures contracts and options to a limited
extent. These instruments are commonly referred to as "derivatives." For exam-
ple, in order to remain fully exposed to the movements of the market, while
maintaining liquidity to meet potential shareholder redemptions, the Portfolio
may invest a portion of its assets in appropriate futures contracts. As
futures contracts only require a small initial margin deposit, the Portfolio
would then be able to keep a cash reserve available to meet potential redemp-
tions, while at the same time being effectively fully invested. Also, because
transaction costs associated with futures and options may be lower than the
costs of investing in securities directly, it is expected that the use of in-
dex futures and options to facilitate cash flows may reduce the Portfolio's
overall transaction costs. The Portfolio will enter into futures contracts and
options for bona fide hedging purposes only and for other purposes so long as
aggregate initial margins and premiums required in connection with non-hedging
positions do not exceed 5% of the Portfolio's total assets.
The primary risks associated with the use of futures and options are (1) im-
perfect correlation between the change in market value of the securities held
by the Portfolio and the prices of futures and options relating to the securi-
ties purchased or sold by the Portfolio; and (2) possible lack of a liquid
secondary market for a futures contract or option and the resulting inability
to close a futures position which could have an adverse impact on the Portfo-
lio's ability to hedge. In the opinion of the Trustees, the risk that the
Portfolio will be unable to close out a futures position or options contract
will be minimized by only entering into futures contracts or options transac-
tions traded on national exchanges and for which there appears to be a liquid
secondary market. For additional information regarding futures contracts and
options, please see the Statement of Additional Information.
6
<PAGE>
RESTRICTED AND ILLIQUID SECURITIES
The Portfolio may purchase restricted securities that are not registered for
sale to the general public but which are eligible for resale to qualified in-
stitutional investors under Rule 144A of the Securities Act of 1933. Under the
supervision of the Fund's Board of Trustees, the Adviser determines the li-
quidity of such investments. Provided that a dealer or institutional trading
market in such securities exists, these restricted securities are not treated
as illiquid securities for purposes of the Portfolio's investment limitations.
The Portfolio may invest up to 15% of its net assets in securities that are
illiquid by virtue of the absence of a readily available market or because of
legal or contractual restrictions on resale. The prices realized from the
sales of these securities could be less than those originally paid by the
Portfolio or less than what may be considered the fair value of such securi-
ties.
LENDING OF PORTFOLIO SECURITIES
The Portfolio may lend its investment securities to qualified institutional
investors who need to borrow securities in order to complete certain transac-
tions, such as covering short sales, avoiding failures to deliver securities
or completing arbitrage operations. The Portfolio will not loan portfolio se-
curities to the extent that greater than one-third of its assets at fair mar-
ket value would be committed to loans. 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 bro-
kers, 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 con-
sisting of cash, an irrevocable letter of credit issued by a domestic U.S.
bank or securities issued or guaranteed by the U.S. 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 invest-
ments). As with other extensions of credit, there are risks of delay in recov-
ery or even loss of rights in the securities loaned if the borrower of the se-
curities fails financially. These risks are similar to the ones involved with
repurchase agreements as discussed above. All relevant facts and circumstanc-
es, 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 Fund's Board of Trustees.
At the present time, the Staff of the Commission does not object if an in-
vestment company pays reasonable negotiated fees in connection with loaned se-
curities 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.
INVESTMENT COMPANIES
As permitted by the 1940 Act, the Portfolio reserves the right to invest up
to 10% of its total assets, calculated at the time of investment, in the secu-
rities of other open-end or closed-end investment companies. No more than 5%
of the investing Portfolio's total assets may be invested in the securities of
any one investment company nor may it acquire more than 3% of the voting secu-
rities of any other investment company. The Portfolio will indirectly bear its
proportionate share of any management fees paid by an investment company in
which it invests in addition to the advisory fee paid by the Portfolio.
The Fund has received an Order from the Commission, which permits each of
its Portfolios to invest the greater of 5% of its total assets or $2.5 million
in the UAM Funds' DSI Money Market Portfolio for cash management purposes pro-
vided that the investment is consistent with the Portfolio's investment poli-
cies and restrictions. Based upon the Portfolio's assets invested in the DSI
Money Market Portfolio, the investing Portfolio's adviser will waive its in-
vestment advisory fee and any other fees earned as a result of the Portfolio's
investment in the DSI Money Market Portfolio. The investing Portfolio will
bear expenses of the DSI Money Market Portfolio on the same basis as all of
its other shareholders.
PORTFOLIO TURNOVER
This Portfolio is managed for long-term appreciation rather than short-term
trading profits. As a result, the Adviser seeks to keep portfolio turnover be-
low 60%. (A turnover rate of 100% would mean that all securities in the Port-
folio would be replaced within a one-year period.) However, portfolio turnover
depends to a great degree on market
7
<PAGE>
conditions. Occasionally, when the market shifts suddenly or when the pros-
pects for individual stocks change quickly, the Adviser may find it necessary
to sell securities which have not been in the Portfolio for very long.
INVESTMENT LIMITATIONS
To help reduce the Portfolio's exposure to risk in specific situations, it
has adopted certain limitations associated with its investments and investment
practices. These policies and limitations are considered at the time of pur-
chase. The sale of instruments is not required in the event of a subsequent
change in circumstances.
The Portfolio's limitations are as follows:
(a) With respect to 75% of its assets, the Portfolio may not own more than
5% of the securities of any single issuer (other than investments issued or
guaranteed by the U.S. Government or any of its agencies or instrumentali-
ties);
(b) With respect to 75% of its assets, the Portfolio may not own more than
10% of the outstanding voting securities of any one issuer;
(c) The Portfolio may not invest more than 5% of its assets in securities of
issuers (other than securities issued or guaranteed by the U.S. or foreign
governments or their political subdivisions) that have (with predecessors)
less than 3 years of continuous operation;
(d) The Portfolio may not invest more than 25% of its assets in companies
within a single industry; however, there are no limitations on investments
made in instruments issued or guaranteed by the U.S. Government and its agen-
cies;
(e) The Portfolio may not make loans except by purchasing debt securities in
accordance with its investment objective and policies or entering into repur-
chase agreements or by lending its portfolio securities to banks, brokers,
dealers or other financial institutions as long as the loans are made in com-
pliance with the 1940 Act, and the rules, regulations and interpretations of
the Commission;
(f) The Portfolio may not borrow except from banks in extraordinary circum-
stances for temporary or emergency purposes. In this situation, the Portfolio
may not (1) borrow more than 33 1/3% of its gross assets and (2) cannot buy
additional securities if it borrows more than 5% of its total assets; and
(g) The Portfolio may not pledge, mortgage or hypothecate more than 33 1/3%
of its total assets at fair market value.
The Portfolio's investment objective and investment limitations (a), (b),
(d), (e) and (f.1) listed above are fundamental policies and may be changed
only with the approval of the holders of a majority of the outstanding voting
securities of the Portfolio. The other investment limitations described here,
those not specified as fundamental in the Statement of Additional Information,
and the Portfolio's investment policies are not fundamental, and the Fund's
Board of Trustees may change them without shareholder approval.
PORTFOLIO TRANSACTIONS
The Portfolio's Investment Advisory Agreement authorizes the Adviser to se-
lect the brokers or dealers that will execute the purchases and sales of in-
vestment securities for the Portfolio. The Agreement directs the Adviser to
use its best efforts to obtain the best available price and most favorable ex-
ecution for all the Portfolio's transactions.
It is not the Fund's practice to allocate brokerage or effect principal
transactions with dealers 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.
Some securities considered for investment by the Portfolio may also be ap-
propriate for other clients served by the Adviser. If a purchase or sale 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 fair and reasonable manner. Although there is no
specified formula for allocating such transactions, the various allocation
methods used by the Adviser, and the result of such allocations, are subject
to periodic review by the Fund's Board of Trustees.
8
<PAGE>
BUYING, SELLING AND EXCHANGING SHARES
Shares of the Portfolio may be purchased without a sales commission directly
through RFI Distributors (the "Distributor"), and through broker-dealers, reg-
istered representatives, and other financial intermediaries ("Service Agents")
having selling or shareholder service agreements with the Distributor. The
shares are sold at the net asset value per share next determined after an or-
der is received by the Fund or the designated Service Agent. (See "Service and
Distribution Plans" and "How Share Prices are Determined.") The required mini-
mum initial investment in the Portfolio is $2,500 with certain exceptions as
may be determined from time to time by the officers of the Fund. The initial
investment minimum for IRA accounts is $500. The initial investment minimum
for spousal IRA accounts is $250. The minimum for any subsequent investment is
$100.
Some Service Agents may also impose additional or different conditions or
other account fees on the purchase and redemption of Portfolio shares, which
are not subject to the Rule 12b-1 Service and Distribution Plans. Each Service
Agent is responsible for transmitting to its customers a schedule of any such
fees and information regarding any additional or different conditions regard-
ing purchases and redemptions. Shareholders who are customers of Service
Agents should consult their Service Agent for information regarding these fees
and conditions. Amounts paid to Service Agents may include transaction fees
and/or service fees paid by the Fund from the Fund assets attributable to the
Service Agent, and would not be imposed if shares of the Portfolio were pur-
chased directly from the Fund or the Distributor. The Service Agents may pro-
vide shareholder services to their customers that are not available to a
shareholder dealing directly with the Fund. A salesperson and any other person
entitled to receive compensation for selling or servicing Portfolio shares may
receive different compensation with respect to one particular class of shares
over another in the Fund.
If you buy Shares of a Portfolio through a Service Agent, the Service Agent
must receive your investment order before the close of trading on the NYSE,
and transmit it to the Fund's Sub-Transfer Agent (prior to the close of the
Sub-Transfer Agent's business day) and the Distributor to receive that day's
share price with proper payment to the Fund to follow. Proper payment for the
order must be received by the Sub-Transfer Agent no later than the time when
the Portfolio is priced on the following business day. Service Agents are re-
sponsible to their customers, the Fund and its Distributor for timely trans-
mission of all subscription and redemption requests, investment information,
documentation and money.
HOW TO BUY SHARES BY MAIL
An account also may be opened with the assistance of your Service Agent by
completing and signing an Account Registration Form. The original Account Reg-
istration Form should be forwarded together with a check payable to UAM Funds
Trust to:
UAM Funds Trust
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
Mail the copy of the Account Registration Form (manually signed), without
the check, to:
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
To make additional investments to an account you have already established,
simply mail your check directly or through your Service Agent to the UAM Funds
Service Center at the address above. Make sure that your account number, ac-
count name, the name of the Portfolio and the name of the class of shares are
clearly indicated on the check so that we can properly credit your account.
For both initial and additional investments, your funds will be credited to
your account at the next share price calculated for the Portfolio after re-
ceipt. Investments received by 4 p.m. Eastern Time will be invested at the
share price calculated after the market closes on the same day. (For example,
if your check arrives on Tuesday morning, you will purchase shares at the
price calculated after the market close on Tuesday.)
9
<PAGE>
HOW TO BUY SHARES BY WIRE
To make an initial investment by wire, your Service Agent should telephone
the Fund's Sub-Transfer Agent (toll-free 1-800-638- 7983), and provide the ac-
count name, address, telephone number, social security or taxpayer identifica-
tion number, the name of the Portfolio (Service Class Shares), the amount be-
ing wired and the name of the bank wiring the funds. (Investors with existing
accounts should also notify the Fund prior to wiring funds.) An account number
and a wire control number will then be provided to you.
Once you have an account number, call your bank and instruct them to wire a
specified amount to the Fund's custodian, The Chase Manhattan Bank ("Custodian
Bank"). You will be asked to provide the following information:
The Chase Manhattan Bank
ABA #021000021
UAM Funds
Credit DDA #9102772952
(Your Account Registration)
(Your Account Number)
(Wire Control Number)
After you have instructed the bank to wire the money, you must forward a
completed Account Registration Form to your Service Agent or the UAM Funds
Service Center as soon as possible. You can obtain forms by calling the UAM
Funds Service Center at 1-800-638-7983. Federal Funds purchases will be ac-
cepted only on days when the NYSE and the Custodian Bank are open for busi-
ness.
Once you have made the initial purchase, you may buy additional shares by
wire at any time by following the instructions above. On all wired purchases,
funds will be invested at the share price calculated after the next market
close.
OTHER PURCHASE INFORMATION
Non-securities dealer Service Agents may receive transaction fees that are
the same as distribution fees paid to dealers.
The Fund reserves the right, in its sole discretion, to suspend the offering
of shares or reject purchase orders of the Portfolio when, in the judgement of
management, such suspension or rejection is in the best interests of the Fund.
Purchases of shares will be made in full and fractional shares calculated to
three decimal places. In the interest of economy and convenience, certificates
for shares will not be issued except at the written request of the sharehold-
er. Certificates for fractional shares, however, will not be issued.
IN-KIND PURCHASES
Under certain circumstances, investors who own securities may be able to ex-
change them directly for shares of the Portfolio without converting their in-
vestments into cash first. The Portfolio will accept such in-kind purchases
only if the securities offered for exchange meet the Portfolio's investment
criteria which are set forth in the "Details on Investment Policies" section
of this Prospectus. Once accepted, the shares will be valued according to the
process described in "How Share Prices are Determined" at the same time the
Portfolio's shares are valued. Once a value has been determined for both, an
exchange will be made. All dividends, interest, subscription, or other rights
pertaining to these securities become the Fund's property; if you receive any
such items, you must deliver them to the Fund immediately. Securities acquired
by the Portfolio through an in-kind purchase will be acquired for investment
and not for immediate resale.
The Fund will not accept securities for exchange unless they meet the fol-
lowing criteria:
. The securities are eligible to be included in the Portfolio and market
quotes can readily be obtained for them, e.g., as evidenced by a listing
on the American Stock Exchange, NYSE, NASDAQ or a foreign exchange.
. The investor assures the Fund that the securities are not subject to any
restrictions under the Securities Act of 1933 or any other law or regula-
tion.
. The value of the securities exchanged does not increase the Portfolio's
position in any specific issuer's security to more than 5% of the Portfo-
lio's net assets.
10
<PAGE>
HOW TO SELL SHARES
You may sell shares by telephone or mail at any time, free of charge. Your
shares will be valued at the next price calculated after we receive your in-
structions to sell.
Your request should be addressed to:
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
or to your Service Agent.
BY MAIL
To redeem by mail, you should include the following:
. your share certificates, if we have issued them to you;
. a letter which tells us how many shares you wish to redeem or, alterna-
tively, what dollar amount you wish to receive;
. a signature guaranteed by your bank, broker or other financial institu-
tion (see "Signature Guarantees" below); and
. any other necessary legal documents, in the case of estates, trusts,
guardianships, custodianships, corporations, pension and profit-sharing
plans and other organizations.
If you are not sure of which documents to send, please contact the UAM Funds
Service Center at 1-800-638-7983.
BY TELEPHONE
To redeem shares by telephone, you must have completed an Account Registra-
tion Form and returned it to the Fund. Once this form is on file, simply call
the Fund and request the redemption amount to be mailed to you or wired to
your bank. The Fund and the Fund's Transfer Agent will employ reasonable pre-
cautions to make sure that the instructions communicated by telephone are gen-
uine, and they may be liable for any losses if they fail to do so. You will be
asked to provide certain personal identification when you open an account, and
again, when you request a telephone redemption. In addition, all telephone
transaction requests will be recorded, and investors may be required to pro-
vide additional telecopied written instructions of such transaction requests.
Neither the Fund nor the Transfer Agent will be responsible for any loss, ad-
ditional cost or expense for following instructions received by telephone that
it reasonably believes are genuine. To change the name of the commercial bank
or the account designated to receive redemption proceeds, a written request
must be sent to the Fund at the address on the cover of this Prospectus. Re-
quests to change the bank or account must be signed by each shareholder and,
each signature must be guaranteed. You cannot redeem shares by telephone if
you hold stock certificates for these shares. Please contact one of the Fund's
representatives at 1-800-638-7983 for further details.
SIGNATURE GUARANTEES
To protect your account, the Fund and the Fund's Transfer Agent from fraud,
signature guarantees are required for certain redemptions. Signature guaran-
tees are used to verify that the person who authorizes a redemption is, in
fact, the registered shareholder. They are required whenever you:
. redeem shares and request that the proceeds be sent to someone other than
the registered shareholder(s) or to an address which is not the regis-
tered address; or
. transfer shares from one Portfolio to another.
Signatures must be guaranteed by an "eligible guarantor institution" as de-
fined in Rule 17Ad-15 under the Securities Exchange Act of 1934. (The UAM
Funds Service Center can provide you with a full definition of the term.) You
can obtain a signature guarantee at almost any bank as well as through most
brokers, dealers, credit unions, national securities exchanges, registered se-
curities associations, clearing agencies and savings associations. Broker-
dealers guaranteeing signatures must be a member of a clearing corporation or
maintain net capital of at least $100,000.
11
<PAGE>
Credit unions must be authorized to issue signature guarantees. Signature
guarantees will be accepted from any eligible guarantor institution which par-
ticipates in a signature guarantee program. A notary public can not provide a
signature guarantee.
The signature guarantee must appear either:
. on the written request for redemption; or
. on a separate instrument for assignment (a "stock power") which should
specify the total number of shares to be redeemed; or
. on all stock certificates tendered for redemption, and, if shares held by
the Fund are also being redeemed, then on the letter or stock power.
FURTHER INFORMATION ON SELLING SHARES
Normally, the Fund will make payment for all shares sold under this proce-
dure within one business day after we receive a request. In no event will pay-
ment be made more than seven days after receipt of a redemption (sale) request
in good order. The Fund may suspend the right of redemption or postpone the
date at times when either the NYSE and Custodian Bank are closed or under any
emergency circumstances as determined by the Commission.
If the Fund's Board of Trustees determines that it would be detrimental to
the best interests of the remaining shareholders of the Fund to make payments
wholly or partly in cash, the Fund may pay the redemption proceeds in whole or
in part by a distribution in-kind of liquid securities held by the Portfolio
instead of cash in conformity with applicable rules of the Commission. Invest-
ors may incur brokerage charges when they sell portfolio securities received
in payment of redemptions.
HOW TO EXCHANGE SHARES
You may exchange Service Class Shares of the Portfolio for any other Service
Class Shares of a Portfolio included in the UAM Funds which is comprised of
the Fund and UAM Funds, Inc. (See the list of Portfolios of the UAM Funds--
Service Class Shares at the end of this Prospectus.) When you exchange shares
you sell your old shares and buy new ones, both at the price calculated after
the next market close. There is no sales charge for exchanges.
Exchange requests may be made by phone or letter or through a Service Agent.
Telephone exchanges may be made only if the Fund holds all share certificates
and if the registration of the two accounts is identical. Telephone exchanges
received before 4 p.m. Eastern Time will be processed at the share price set
after the market close the same day. Exchanges received after 4 p.m. Eastern
Time will be executed at the share price determined at the market close on the
following day. For additional information regarding responsibility for the au-
thenticity of telephoned transaction instructions, see "How to Sell Shares --
By Telephone" above. The exchange privilege is only available with respect to
Portfolios that are registered for sale in a shareholder's state of residence.
Neither the Fund nor the Fund's Transfer Agent will take responsibility for
ensuring it is indeed the shareholder issuing the exchange orders; however, we
may use some of the precautions described above for selling shares. The Fund
may also limit both the frequency and the amount of exchanges permitted if it
is in the interest of the Fund's shareholders.
Please review a Portfolio's investment objectives before shifting money into
it. Make sure its objectives and strategies fit with your long-term goals. Be-
fore exchanging into a Portfolio, read its Prospectus. You may obtain one for
the Portfolio(s) you are interested in by calling the UAM Fund Service Center
at 1-800-638-7983. Remember, every time you exchange shares of one Portfolio
for another, your transaction is counted as a sale of the first security and a
purchase of the second. As a result, you may incur a tax liability by exchang-
ing shares if your investment has appreciated since you bought it. Consult
your tax adviser to determine your liability for capital gains taxes.
SERVICE AND DISTRIBUTION PLANS
Under the Service Plan for Service Class Shares, adopted pursuant to Rule
12b-1 under the 1940 Act, the Fund may enter into service agreements with
Service Agents (broker-dealers or other financial institutions) who receive
fees with respect to the Fund's Service Class Shares owned by shareholders for
whom the Service Agent is the dealer or holder of record, or for whom the
Service Agent performs Servicing, as defined below. These fees are paid out of
the assets allocable to Service Class Shares to the Distributor, to the Serv-
ice Agents directly or through the Distributor. The Fund reimburses the Dis-
tributor or the Service Agent, as the case may be, for payments made at an an-
nual rate of up to 0.25 of 1% of the average daily value of Service Class
Shares owned by clients of such Service Agent during the period payments for
Servicing are being made to it. Such payments are borne exclusively by the
Service Class Shares.
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<PAGE>
Each item for which a payment may be made under the Service Plan constitutes
personal service and/or shareholder account maintenance and may constitute an
expense of distributing Fund shares as the Commission construes such term un-
der Rule 12b-1. The fees payable for Servicing are payable without regard to
actual expenses incurred, subject to adjustment of the fee prospectively to
reflect actual expenses.
Servicing may include, among other things, one or more of the following ren-
dered with respect to the Service Class shareholders: answering client inqui-
ries regarding the Fund; assisting clients in changing dividend options, ac-
count designations and addresses; performing subaccounting; establishing and
maintaining shareholder accounts and records; processing purchase and redemp-
tion transactions; investing client cash account balances automatically in
Service Class Shares; providing periodic statements showing a client's account
balance and integrating such statements with those of other transactions and
balances in the client's other accounts serviced by the Service Agent; arrang-
ing for bank wires; and such other services as the Fund may request, to the
extent the Service Agent is permitted by applicable statute, rule or regula-
tion.
The Glass-Steagall Act and other applicable laws prohibit Federally chart-
ered or supervised banks from engaging in certain aspects of the business of
issuing, underwriting, selling and/or distributing securities. Accordingly,
banks will be engaged to act as Service Agents only to perform administrative
and shareholder servicing functions, including transaction-related agency
services for their customers. If a bank were prohibited from so acting, its
shareholder clients would be permitted to remain Fund shareholders and alter-
native means for continuing the Servicing of such shareholders would be
sought.
The Distributor promotes the distribution of the Service Class Shares in ac-
cordance with the terms of a Distribution Plan adopted pursuant to Rule 12b-1
under the 1940 Act. The Distribution Plan provides for the use of Fund assets
allocable to Service Class Shares to pay expenses of distributing such shares.
The Distribution Plan and Service Plan (the "Plans") were approved by the
Board of Trustees, including a majority of the Trustees who are not "inter-
ested persons" of the Fund as defined in the 1940 Act (and each of whom has no
direct or indirect financial interest in the Plans or any agreement related
thereto, referred to herein as the "12b-1 Trustees"). The Plans may be termi-
nated at any time by the vote of the Board or the 12b-1 Trustees, or by the
vote of a majority of the outstanding Service Class Shares of the Portfolio
involved.
While the Plans continue in effect, the selection of the 12b-1 Trustees is
committed to the discretion of such persons then in office. The Plans provide
generally that a Portfolio may incur distribution and service costs under the
Plans which may not exceed in the aggregate 0.75% per annum of that Portfo-
lio's net assets. The Board has currently limited aggregate payments under the
Plans to 0.50% per annum of a Portfolio's net assets. The Service Class Shares
offered by this Prospectus currently are not making payments under the Distri-
bution Plan. Upon implementation, the Distribution Plan would permit payments
to the Distributor, broker- dealers, other financial institutions, sales rep-
resentatives or other third parties who render promotional and distribution
services, for items such as advertising expenses, selling expenses, commis-
sions or travel reasonably intended to result in sales of Service Class Shares
and for the printing of prospectuses sent to prospective purchasers of Service
Class Shares of the Portfolio.
Although the Plans may be amended by the Board of Trustees, any changes in
the Plans which would materially increase the amounts authorized to be paid
under the Plans must be approved by shareholders of the Class involved. The
total amounts paid under the foregoing arrangements may not exceed the maximum
limits specified above, and the amounts and purposes of expenditures under the
Plans must be reported to the 12b-1 Trustees quarterly. The amounts allowable
under the Plans for each Class of Shares of the Portfolios are also limited
under certain rules of the National Association of Securities Dealers, Inc.
In addition to payments by the Fund under the Plans, the Distributor, United
Asset Management Corporation ("UAM"), the parent company of the Adviser, the
Adviser, or any of their affiliates, may, at its own expense, compensate a
Service Agent or other person for marketing, shareholder servicing, record-
keeping and/or other services performed with respect to the Fund, a Portfolio
or any Class of Shares of a Portfolio. The person making such payments may do
so out of its revenues, its profits or any other source available to it. Such
services arrangements, when in effect, are made generally available to all
qualified service providers. The Adviser may compensate its affiliated compa-
nies for referring investors to the Portfolio.
The Distributor, the Adviser and certain of their other affiliates also par-
ticipate, at the date of this Prospectus, in an arrangement with Smith Barney
Inc. under which Smith Barney provides certain defined contribution plan mar-
keting and shareholder services and receives from such entities an amount
equal to up to 33.3% of the portion of the investment advisory fees attribut-
able to the invested assets of Smith Barney's eligible customer accounts with-
out regard to any expense limitation in addition to amounts payable to all
selling dealers. The Fund also compensates Smith Barney for services it pro-
vides to certain defined contribution plan shareholders that are not otherwise
provided by the Administrator.
13
<PAGE>
HOW SHARE PRICES ARE DETERMINED
The value of each share of the Portfolio is calculated every day that the
NYSE is open. This means that shares are valued after the market close, gener-
ally 4 p.m. Eastern Time on Monday through Friday, except for major holidays
when the NYSE is closed.
The value of each share is determined by adding up the total market value of
all the securities in the Portfolio plus cash and other assets, deducting lia-
bilities and then dividing by the total number of shares outstanding.
For stocks, we use the last quoted trading price as the market value. For
listed stocks, we use the price quoted by the exchange on which the stock is
primarily traded. Unlisted stocks and listed stocks which have not been traded
on the valuation date, or for which market quotations are not readily avail-
able, are valued at a price between the last price asked and the last price
bid. Net asset value includes interest on bonds and other fixed income securi-
ties which is accrued daily. Bonds and other fixed income securities are val-
ued according to the broadest and most representative market which will ordi-
narily be the over-the-counter market. In addition, bonds and other fixed in-
come securities may be valued on the basis of prices provided by a pricing
service when such prices are believed to reflect the fair market value of such
securities. Bonds and other fixed income securities listed on a foreign ex-
change are valued at the latest quoted sales price available before the time
when assets are valued.
For valuation purposes, all securities initially expressed in a foreign cur-
rency are converted into U.S. dollars at the bid price of such currencies
against U.S. dollars last quoted by any major bank or by a broker.
The value of other assets and securities for which no quotations are readily
available (including restricted securities) is determined in good faith at
fair value using methods determined by the Fund's Board of Trustees.
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
DIVIDENDS
Stocks generate income in the form of dividends. The Portfolio will normally
distribute substantially all of its net investment income (for tax purposes)
from its investments, as well as any interest earned from short-term invest-
ments, to shareholders in the form of quarterly dividends. You must instruct
the Portfolio to pay out dividends and distributions in cash to you or to re-
invest them. The Account Registration Form has a box for your instructions.
Unless you specifically tell us to distribute dividend income in cash, howev-
er, we will assume you want this income reinvested. By law, you must pay taxes
on any dividend you receive on your investments whether distributed in cash or
reinvested in shares. The Portfolio will send you a statement annually telling
you exactly how much dividend income you have earned for tax purposes.
CAPITAL GAINS
Capital gains are another source of appreciation to the Portfolio. Basical-
ly, a gain is an increase in the value of a stock or bond. However, for tax
purposes, the Portfolio does not need to "realize" or declare a capital gain
unless it sells a stock or bond which has appreciated.
You can incur capital gains in two ways. First, if the Portfolio buys a
stock or bond at one price, then sells it at a higher price, it will realize a
capital gain. At the end of the year, the capital gains computed under tax
rules that the Portfolio has made are added up and capital losses are sub-
tracted. If any net capital gains are realized, the Portfolio will normally
distribute such gains annually. You will receive a statement at the end of the
year informing you of your share of the Portfolio's capital gains.
The second way to incur capital gains is to sell or exchange your shares. If
you sell shares at a higher price than you bought them you will be responsible
for paying taxes on your gain. There are several ways to determine your tax
liability, and we suggest you contact a qualified tax adviser to help you de-
cide which is best for you.
TAXES
The Portfolio intends to qualify each year as a "regulated investment compa-
ny" under Federal tax law, and if it qualifies, the Portfolio will not be lia-
ble for Federal income taxes because it will have distributed all its net in-
vestment income and net realized capital gains to shareholders. Shareholders
will then have to pay taxes on the dividends, and on gains whether they are
distributed as cash or are reinvested in shares. Dividends and short-term cap-
ital gains will be taxed as ordinary income. Long-term capital gains distribu-
tions are taxed as long-term capital gains. Such dividends and distributions
may be subject to state and local taxes. Redemptions of shares in the Portfo-
lio are taxable events for Federal income tax purposes. A shareholder may also
be subject to state and local taxes on such redemptions.
14
<PAGE>
Dividends declared in October, November and December to shareholders of rec-
ord in such a month will be treated as if they had been paid by the Fund and
received by the shareholders on December 31 of the same calendar year, pro-
vided that the dividends are paid before February of the following year.
The Fund is required by Federal law to withhold 31% of reportable payments
(which may include dividends, capital gains distributions and redemptions)
paid to shareholders who have not complied with IRS regulations. In order to
avoid this withholding requirement, you must certify on the Account Registra-
tion Form or on a separate form supplied by the Fund that your Social Security
or Taxpayer Identification Number you have provided is correct and that you
are not currently subject to backup withholding or that you are exempt from
backup withholding.
Dividends and interest received by the Portfolio may give rise to withhold-
ing and other taxes imposed by foreign countries. These taxes reduce the Port-
folio's dividends but are included in the taxable income reported on your tax
statement. You may be able to claim an offsetting tax credit or itemized de-
duction for foreign taxes paid by the Portfolio. Your tax statement will gen-
erally show the amount of foreign tax for which a credit or deduction may be
available.
FUND MANAGEMENT AND ADMINISTRATION
THE INVESTMENT ADVISER
The Adviser is a registered investment adviser formed in 1983 with business
offices located at Two Leadership Square, 211 North Robinson, Suite 450, Okla-
homa City, Oklahoma. It is a wholly-owned subsidiary of United Asset Manage-
ment Corporation ("UAM") and provides and offers investment management and ad-
visory services to corporations, unions, pensions and profit-sharing plans,
trusts, estates and other institutions and investors. The Adviser currently
has approximately $1.9 billion in assets under management.
The Portfolio pays an annual fee in monthly installments to the Adviser for
advisory services. This fee is calculated every month as a percentage of the
average net assets in the Portfolio for that month. The percentage fee on an
annual basis is 0.75%.
Although the advisory fee rate payable by the Portfolio is higher than the
rate payable by most mutual funds, the Fund believes it is comparable to the
rates paid by many other funds with similar investment objectives and policies
and is appropriate for the Portfolio in light of its investment objective.
The Adviser may compensate its affiliated companies for referring investors
to the Portfolio. The Adviser and its parent company may also make payments to
unaffiliated brokers who perform distribution, marketing, shareholder and
other services with respect to the Portfolio.
The investment professionals at the Adviser who are responsible for the day-
to-day management of the Portfolio and their qualifications are as follows:
THOMAS E. JOHNSON, CFA, PRESIDENT, SENIOR PORTFOLIO MANAGER -- Texas Tech
University, B.B.A., 1963; Texas Tech University, M.B.A., 1964; President and
Senior Portfolio Manager, Tom Johnson Investment Management, Inc., 1983-Pres-
ent.
JERRY WISE, CFA, CPA, EXECUTIVE VICE PRESIDENT, SENIOR PORTFOLIO MANAGER --
Oklahoma University, B.B.A., 1978; Oklahoma University, M.B.A., 1984; Execu-
tive Vice President and Senior Portfolio Manager, Tom Johnson Investment Man-
agement, Inc., 1986-Present.
RICHARD PARRY, CFA, VICE PRESIDENT, SENIOR PORTFOLIO MANAGER -- University
of Colorado, B.S., 1979; Oklahoma City University, M.B.A., 1983; Vice Presi-
dent and Senior Portfolio Manager, Tom Johnson Investment Management, Inc.,
1989-Present.
THOMAS GILES, CFA, PORTFOLIO MANAGER -- University of Texas, B.B.A., 1979;
University of Texas, M.B.A., 1982; Portfolio Manager, Tom Johnson Investment
Management, Inc., 1989-Present.
JAMES MCGLYNN, CFA, PORTFOLIO MANAGER -- University of Texas at Austin,
B.B.A., 1980; Securities Analyst/Portfolio Manager, Securities Management Re-
search, 1990-1991; Portfolio Manager, Tom Johnson Investment Management, Inc.,
1991-Present.
JOHN SHEPLEY, CFA, PORTFOLIO MANAGER -- Midwestern State University, B.B.A.,
1982; Portfolio Manager, Sauder Management Company, 1983-1990; Portfolio Man-
ager, Tom Johnson Investment Management, Inc., 1990-Present.
15
<PAGE>
DOUGLAS A. HAWS, TRADER -- University of Oklahoma, B.B.A., 1993; Internal
Auditor, Union Pacific Corporation, May, 1993-October, 1994; Trader, Tom John-
son Investment Management, Inc., October, 1994-Present.
THE ADMINISTRATOR
Pursuant to a Fund Administration Agreement dated April 15, 1996, UAM Fund
Services, Inc. ("UAMFSI") a wholly-owned subsidiary of United Asset Management
Corporation with its principal office located at 211 Congress Street, Boston,
MA. 02110, is responsible for performing and overseeing administration, fund
accounting, dividend disbursing and transfer agency services provided to the
Fund and its Portfolios. UAMFSI has subcontracted the performance of certain
of such services to Chase Global Funds Services Company ("CGFSC"), an affili-
ate of The Chase Manhattan Bank, pursuant to a Mutual Funds Service Agreement
dated April 15, 1996. CGFSC is located at 73 Tremont Street, Boston, MA 02108-
3913. Effective April 1, 1996, The Chase Manhattan Corporation, the parent of
The Chase Manhattan Bank merged with and into Chemical Banking Corporation,
the parent company of Chemical Bank. Chemical Banking Corporation is the sur-
viving corporation and will continue its existence under the name "The Chase
Manhattan Corporation".
Each Portfolio pays to UAMFSI a monthly fee comprised of two parts: a Port-
folio-specific fee which is retained by UAMFSI and a sub-administration fee
which UAMFSI in turn pays to CGFSC. The Portfolio-specific fee for the TJ Core
Equity Portfolio is 0.04% of aggregate net assets. The sub-administration fee
calculated on an annualized basis equals: 0.19 of 1% of the first $200 million
of total net assets of the Funds; 0.11 of 1% of the next $800 million of total
net assets of the Funds; 0.07 of 1% of total net assets in excess of $1 bil-
lion but less than $3 billion, and 0.05 of 1% of total net assets in excess of
$3 billion. The sub-administration fees are allocated among the Portfolios on
the basis of their relative assets and are subject to a graduated minimum fee
schedule per Portfolio of $2,000 per month upon inception of a Portfolio to
$70,000 annually after two years. If a separate class of shares is added to a
Portfolio, the minimum annual fee payable by that Portfolio may be increased
by up to $20,000.
THE DISTRIBUTOR
UAM Fund Distributors, Inc., a wholly-owned subsidiary of UAM with its prin-
cipal office located at 211 Congress Street, Boston, Massachusetts 02110, dis-
tributes the shares of the Fund. Under the Fund's Distribution Agreement (the
"Agreement"), the Distributor, as agent of the Fund, agrees to use its best
efforts as sole distributor of the Fund's shares. The Distributor does not re-
ceive any fee or other compensation under the Agreement (except as described
under "Service and Distribution Plans" above). The Agreement continues in ef-
fect as long as the Fund's Board of Trustees, including a majority of the
Trustees who are not parties to the Agreement or interested persons of any
such party, approve it on an annual basis. The Agreement provides that the
Fund will bear the costs of the registration of its shares with the Commission
and various states and the printing of its prospectuses, statements of addi-
tional information and reports to shareholders.
CUSTODIAN
The Chase Manhattan Bank serves as custodian of the Fund's assets.
ACCOUNTANTS
Price Waterhouse LLP acts as the independent accountants for the Fund and
audits its financial statements annually.
SUB-ADMINISTRATOR, SUB-TRANSFER AND SUB-DIVIDEND DISBURSING AGENT
Chase Global Funds Services Company, 73 Tremont Street, Boston, MA 02108,
acts as sub-administrator, sub-transfer agent and sub-dividend disbursing
agent for the Fund.
REPORTS
Investors will receive unaudited semi-annual financial statements and annual
financial statements audited by Price Waterhouse LLP.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be made by writing to the Fund at the address
listed on the cover of this Prospectus or by calling 1-800-638-7983.
LITIGATION
The Fund is not involved in any litigation.
16
<PAGE>
GENERAL FUND INFORMATION
The Portfolio is one of a series of investment portfolios available through
UAM Funds Trust, an open-end investment company known as a "mutual fund." Each
of the Portfolios which make up the Fund have different investment objectives
and policies. Together, the Portfolios offer a diverse set of risk and return
characteristics to suit a wide range of investor needs. The Fund was organized
under the name "The Regis Fund II" on May 18, 1994 as a Delaware business
trust. On October 31, 1995, the name was changed to "UAM Funds Trust."
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Officers of the Fund manage its day-to-day operations and are responsi-
ble to the Fund's Board of Trustees. The Trustees set broad policies for the
Fund and elect its Officers.
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 sharehold-
ers.
The shares of each Portfolio and class have noncumulative voting rights,
which means that the holders of more than 50% of the shares voting for the
election of Trustees can elect 100% of the Trustees if they choose to do so. A
shareholder is entitled to one vote for each full share held (and a fractional
vote for each fractional share held), then standing in his name on the books
of the Fund. As of July 31, 1996, Hartmat & Co., Boston, MA held of record 78%
of the outstanding shares of the TJ Core Equity Portfolio Institutional Serv-
ice Class Shares for which ownership is disclaimed or presumed disclaimed. The
persons or organizations 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. Both Institutional
Class and Institutional Service Class Shares represent an interest in the same
assets of a Portfolio and are identical in all respects except that the Insti-
tutional Service Class Shares bear certain expenses related to shareholder
servicing, may bear expenses related to the distribution of such shares and
have exclusive voting rights with respect to matters relating to such distri-
bution expenditures. Information about the Institutional Class Shares of the
Portfolios along with the fees and expenses associated with such shares is
available upon request by contacting the Fund at 1-800-638-7983. The Fund will
not ordinarily hold shareholder meetings except as required by the 1940 Act
and other applicable laws. The Fund has undertaken that its Trustees will call
a meeting of shareholders if such a meeting is requested in writing by the
holders of not less than 10% of the outstanding shares of the Fund. To the ex-
tent required by the undertaking, the Fund will assist shareholder communica-
tions in such matters.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR IN THE PORTFOLIO'S
STATEMENT OF ADDITIONAL INFORMATION IN CONNECTION WITH THE OFFERING MADE BY
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR ITS REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFERING BY THE FUND IN ANY JURISDICTION IN WHICH SUCH
OFFERING MAY NOT BE LAWFULLY MADE.
17
<PAGE>
UAM FUNDS--SERVICE CLASS SHARES
BARROW, HANLEY, MEWHINNEY & STRAUSS, INC. BHM&S Total Return Bond Portfolio
NWQ INVESTMENT MANAGEMENT COMPANY NWQ Balanced Portfolio
SIRACH CAPITAL MANAGEMENT, INC. Sirach Growth Portfolio Sirach Special Equity
Portfolio
TOM JOHNSON INVESTMENT MANAGEMENT, INC. TJ Core Equity Portfolio
18
<PAGE>
UAM FUNDS TRUST
POST-EFFECTIVE AMENDMENT NO. 13
PART B
The following Statements of Additional Information are included in this Post-
Effective Amendment No. 13:
. BHM&S Total Return Bond Portfolio Institutional and Institutional Service
Class Shares
. Chicago Asset Management Intermediate Bond Portfolio Institutional Class
Shares
. Chicago Asset Management Value/Contrarian Portfolio Institutional Class
Shares
. Hanson Equity Portfolio Institutional Class Shares
. IRC Enhanced Index Portfolio Institutional Class Shares
. MJI International Equity Portfolio Institutional and Institutional Service
Class Shares
. Newbold's Equity Portfolio Institutional and Institutional Service Class
Shares
. TJ Core Equity Portfolio Institutional Service Class Shares
The following Statement of Additional Information is incorporated by reference
to Post-Effective Amendment No. 12:
. FPA Crescent Portfolio Institutional and Institutional Service 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
<PAGE>
PART B
UAM FUNDS
BHM&S TOTAL RETURN BOND PORTFOLIO
INSTITUTIONAL CLASS SHARES
INSTITUTIONAL SERVICE CLASS SHARES
STATEMENT OF ADDITIONAL INFORMATION
August 28, 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 BHM&S
Total Return Bond Portfolio dated August 28, 1996 relating to the Institutional
Class Shares, and the Prospectus dated August 28, 1996 relating to the
Institutional Service Class Shares (the "Service Class Shares"). To obtain a
Prospectus, please call the UAM Funds Service Center:
1-800-638-7983
TABLE OF CONTENTS
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<S> <C>
Investment Objective And Policies........................................ 2
Purchase of Shares....................................................... 2
Redemption of Shares..................................................... 2
Shareholder Services..................................................... 3
Investment Limitations................................................... 4
Management of The Fund................................................... 5
Investment Adviser....................................................... 7
Service And Distribution Plans........................................... 8
Portfolio Transactions................................................... 9
Administrative Services.................................................. 10
Performance Calculations................................................. 10
General Information...................................................... 13
Financial Statements..................................................... 14
Appendix - Description of Securities And Ratings......................... A-1
</TABLE>
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The following policies supplement the investment objective and policies of
the BHM&S Total Return Bond Portfolio (the "Portfolio") as set forth in the
Prospectuses for the Institutional Class Shares and Service Class Shares of 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, a 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 credit-
worthiness 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.
PURCHASE OF SHARES
Both Classes of shares of the Portfolio may be purchased without sales
commission at their 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 $2,500
with certain exceptions as may be determined from time to time by the officers
of the Fund. The initial investment minimum for IRA accounts is $500. The
initial investment for spousal IRA accounts is $250. The minimum for any
subsequent investment is $100. 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: Labor Day, September 2, 1996;
Thanksgiving Day, November 28, 1996; Christmas Day, December 25, 1996; New Years
Day, January 1, 1997; Presidents Day, February 17, 1997; Good Friday, March 28,
1997; Memorial Day, May 26, 1997; and Independence Day, July 4, 1997.
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 judgement 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 a 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 a 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
2
<PAGE>
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 each
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 a 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 "Sub-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 Sub-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
Institutional Class Shares of the BHM&S Total Return Bond Portfolio may be
exchanged for any other Institutional Class Shares of a Portfolio included in
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
BHM&S Total Return Bond Portfolio - Institutional Class Shares Prospectus.)
Service Class Shares of the BHM&S Total Return Bond Portfolio may be exchanged
for any other Service Class Shares of a Portfolio included in the UAM Funds.
(For 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.
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 objective 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 Sub-Administrator will be
responsible for the authenticity of the exchange instructions received by
telephone.
3
<PAGE>
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.
INVESTMENT LIMITATIONS
The following limitations supplement those set forth in each Prospectus of
the Portfolio. 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 a 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 a Portfolio's
investment limitations. Investment limitations (1), (2), (3) and (4) are
classified as fundamental. A Portfolio's fundamental investment limitations
cannot be changed without approval by a "majority of the outstanding shares" (as
defined in the 1940 Act) of thethe 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) purchase on margin or sell short;
(6) purchase or retain securities of an issuer if those officers and
trustees 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;
(7) 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;
(8) invest for the purpose of exercising control over management of any
company;
(9) write or acquire options or interests in oil, gas, mineral leases or
other mineral exploration or development programs; and
(10) invest in warrants if, by reason of such purchase, more than 5% of the
value of the Portfolio's net assets would be invested in warrants
valued at the lower of cost or market. Included in this amount, but
not to exceed 2% of the value of the Portfolio's net assets, may be
warrants that are not listed on a recognized
4
<PAGE>
stock exchange. 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
1140 Avenue of the Fund; President of Regis Retirement Plan
Americas New York, NY Services since 1993; Former President of
10036 UAM Fund Distributors, Inc.; Formerly
Age 44 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
Meredith, NH 03253 Great Island Investment Company, Inc.;
Age 67 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
Age 81 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,
Baltimore, MD 21201 Inc.; Chairman of the Board of Chektec
Age 48 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
Age 54
NORTON H. REAMER* Trustee, President and Chairman of the
One International Place Fund; President, Chief Executive and a
Boston, MA 02110 Director of United Asset Management
Age 60 Corporation; Director, Partner or Trustee
each of the Investment Companies of the
Vance Group of Mutual Funds.
PETER M. WHITMAN, JR.* Trustee of the Fund; President and Chief
One Financial Center Investment Officer of Dewey Square
Boston, MA 02111 Investors Corporation ("DSI") since 1988;
Age 53 Director and Chief Executive Officer of H.
T. Investors, Inc., formerly a subsidiary
of DSI.
WILLIAM H. PARK* Vice President of the Fund; Executive Vice
One International Place President and Chief Financial Officer of
Boston, MA 02110 United Asset Management Corporation.
Age 49
*These people are deemed to be "interested persons" of the Fund as
that term is defined in the 1940 Act.
5
<PAGE>
GARY L. FRENCH Treasurer of the Fund; President and Chief
211 Congress Street Executive Officer of UAM Fund Services,
Boston, MA 02110 Inc.; President of UAM Fund Distributors,
Age 45 Inc.; formerly Vice President-Operations
Development and Control of Fidelity
Investment Institutional Services from
February 1995 to August 1995; Treasurer of
the Fidelity Group of Funds from 1991 of
February 1995.
MICHAEL E. DEFAO* Secretary of the Fund, Vice President and
211 Congress Street General Counsel of UAM Fund Services, Inc.,
Boston, MA 02110 formerly an Associate of Ropes & Gray (a
Age 28 law firm) from 1993 to February 1995.
ROBERT R. FLAHERTY* Assistant Treasurer of the Fund; Vice
211 Congress Street President of UAM Fund Services Inc.;
Boston, MA 02110 formerly Manager of Fund Administration and
Age 32 Compliance of the Sub-Administration from
March 1995 to July 1996; formerly Senior
Manager of Deloitte & Touche LLP from 1985
to 1995.
KARL O. HARTMANN* Assistant Secretary of the Fund; Senior Vice
73 Tremont Street President, Secretary and General Counsel of
Boston, MA 02108 Administrator; Senior Vice President,
Age 41 Secretary and General Counsel of Leland,
O'Brien, Rubinstein Associates, Inc., from
November 1990 to November 1991.
*These people are deemed to be "interested persons" 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 and 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 Funds 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, 1996.
COMPENSATION TABLE
<TABLE>
<CAPTION>
====================================================================================================================================
(1) (2) (3) (4) (5)
Pension or Total Compensation
Aggregate Retirement Benefits Estimated Annual from Registration 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 3,396 0 0 $29,600
J. EDWARD DAY,
TRUSTEE 3,396 0 0 $29,600
</TABLE>
6
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
PHILIP D. ENGLISH,
TRUSTEE 3,396 0 0 $29,600
WILLIAM A. HUMENUK,
TRUSTEE 3,396 0 0 $29,600
</TABLE>
PRINCIPAL HOLDER OF SECURITIES
As of July 31, 1996, the following persons or organizations held of
record or beneficially 5% or more of the shares of the Portfolio as noted.
BHM&S Total Return Bond Portfolio Institutional Class Shares: Hartnat &
Co., F/B/O Barrow Hanley, P.O. Box 4044, Boston, MA, 99.9%*.
BHM&S Total Return Bond Portfolio Institutional Service Class Shares:
Hartnat & Co., P.O. Box 4044, Boston, MA, 62.4%*; Hartnat & Co., F/B/O Lillick
and Charles, P.O. Box 4044, Boston, MA, 16.3%*; Hartnat & Co., F/B/O Allied
Waste, P.O. Box 4044, Boston, MA, 12.3%*.
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.
__________
* Denotes shares held by a trustee or other fiduciary for which beneficial
ownership is disclaimed or presumed disclaimed.
INVESTMENT ADVISER
CONTROL OF ADVISER
Barrow, Hanley, Mewhinney & Strauss, 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 __ 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 the 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 rate to the
Portfolio's average daily net assets for the month:
BHM&S Total Return Bond Portfolio .................. 0.35%
7
<PAGE>
SERVICE AND DISTRIBUTION PLANS
As stated in the Portfolios Service Class Shares Prospectus, UAM Fund
Distributors, Inc. (the "Distributor") may enter into agreements with broker-
dealers and other financial institutions ("Service Agents"), pursuant to which
they will provide administrative support services to Service Class shareholders
who are their customers ("Customers") in consideration of the 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 Agent 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 Agent is governed by a Sshareholder 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
Agents 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.
The Board of Trustees has approved the arrangements with Service Agents
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 the Fund's arrangements with Service
Agents 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
8
<PAGE>
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 Plans permit 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 Plans or any related agreements, by vote cast
in person at a meeting duly called for the purpose of voting on the Plans
and such Agreements. Continuation of the Plans, the Distribution
Agreement and the related agreements must be approved annually by the Board of
Trustees in the same manner, as specified above.
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 the 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.
PORTFOLIO TRANSACTIONS
The Investment Advisory Agreements authorize 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 Agreements. 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.
ADMINISTRATIVE SERVICES
It is not the Funds practice to allocate brokerage or effect principal
transactions with dealers 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 refer clients to the Adviser. During the
fiscal years ended April 30, 1995 and April 30, 1996, the entire Fund paid
brokerage commissions of approximately $15,000 and $39,000, respectively.
9
<PAGE>
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 a 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.
ADMINISTRATIVE SERVICES
For the period ended April 30, 1996, administrative services fees paid to
the Sub-Administrator by the BHM&S Total Return Bond Portfolio totaled
$22,073. For the period April 15, 1996 to April 30, 1996, UAM Fund Services,
Inc. earned $1,927 from the BHM&S Total Return Bond Portfolio as Administrator.
The services provided by the Administrator and the Sub-Administrator and
the current fees payable to both are described in the Portfolios
Prospectuses.
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 each class of 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 a Portfolio's
investment. The current yield of a 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. Since Service Class Shares of a Portfolio
bear additional service and distribution expenses, the yield of the Service
Class Shares of a Portfolio will generally be lower than that of the
Institutional Class Shares of the same Portfolio. The yield for the BHM&S Total
Return Bond Portfolio Institutional Class Shares and Service Class Shares for
the 30-day period ended on April 30, 1996 was 6.22% and 6.01%, respectively.
A yield 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 a 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. Since Service Class Shares of a Portfolio
bear additional service and distribution expenses, the average annual total
return of the Service Class Shares of a Portfolio will generally be lower than
that of the Institutional Class Shares of the same Portfolio.
10
<PAGE>
These figures are 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 BHM&S Total Return Bond
Portfolio from inception to the date of the financial statements included herein
is 0.08% for the Institutional Class Shares and (0.07)% for the Service Class
Shares.
COMPARISONS
To help investors better evaluate how an investment in either Portfolio 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) 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, plus
North America.
(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.
11
<PAGE>
(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, 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 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.
(w) Lehman Brothers Government/Corporate Index - is a combination of the
Government and 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 others. Any security
downgraded during the month is held in the
12
<PAGE>
index until month-end and then removed. All returns are market value
weighted inclusive of accrued income.
(x) Lehman Brothers Aggregate Index - is a fixed income market value-
weighted index that combines the Lehman Brothers Government/Corporate
Index and the Lehman Brothers Mortgage-Backed Securities Index. It
includes fixed rate issues of investment grade (BBB) or higher, with
maturities of at least one year and outstanding par values of at least
$100 million for U.S. Government issues and $25 million for
others.
(y) 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 a 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, with 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. Currently, the Fund is offering
shares of seven Portfolios.
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 Trust. Both
Institutional Class and Service Class Shares represent an interest in the same
assets of a Portfolio and are identical in all respects except that the Service
Class bear certain expenses related to shareholder servicing and the
distribution of such shares, and have exclusive voting rights with respect to
matters relating to such distribution expenditures.
In the event of liquidation of the Trust, the holders of the Shares of each
Sub-Trust 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 Sub-Trust, or in the case of a class, belonging to that
Sub-Trust and allocable to that class, over the liabilities belonging to that
Sub-Trust or class. The assets so distributable to the holders of Shares of any
particular Sub-Trust or class thereof shall be distributed to the holders in
proportion to the number of Shares of that Sub-Trust or class thereof held by
them and recorded on the books of the Trust. The liquidation of any Sub-Trust 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 Trust or any Sub-Trust,
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 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 Prospectuses.
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.
13
<PAGE>
Furthermore, such dividends or distributions, although in effect a return of
capital, are subject to income taxes as set forth in the Prospectuses.
As set forth in the Prospectuses, unless the shareholder elects otherwise
in writing, all dividend and capital gains distributions are automatically
received in additional shares of the 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.
The Portfolio 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.
FEDERAL TAXES
In order for the Portfolio to continue to quality 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 a 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.
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.
FINANCIAL STATEMENTS
The Financial Statements of the BHM&S Total Return Bond Portfolio for the
period from inception on November 1, 1995 to April 30, 1996, and the Financial
Highlights for the respective period presented which appear in the Portfolios'
1996 Annual Report to Shareholders and the report thereon of Price Waterhouse
LLP, the Fund's independent accountants, also appearing therein, which were
previously filed electronically with the Commission (Accession Number:
0000950109-96-004190), are incorporated by reference.
14
<PAGE>
APPENDIX - DESCRIPTION OF SECURITIES AND 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.
DESCRIPTION OF MUNICIPAL NOTE RATINGS
MOODY'S INVESTORS SERVICE MUNICIPAL NOTES RATINGS
MIG1 - Municipal Notes which are rated MIG1 are considered best quality.
There is present strong protection by established cash flows, superior liquidity
support or demonstrated broad-based access to the market for refinancing.
A-1
<PAGE>
MIG2 - Municipal Notes which are rated MIG2 are considered high quality.
Margins of protection are ample although not so large as in the preceding group.
MIG3 - Municipal Notes which are rated MIG3 are considered favorable
quality. All security elements are accounted for but there is lacking the
undeniable strength of the preceding grades. Liquidity and cash flow protection
may be narrow and market access for refinancing is likely to be less well
established.
STANDARD & POOR'S CORPORATION'S MUNICIPAL NOTES RATINGS
SP-1 - Municipal Notes which are rated SP-1 are considered to possess a
strong capacity to pay principal and interest. Issues determined to possess very
strong characteristics are given a plus (+) designation.
SP-2 - Municipal Notes which are rated SP-2 are considered to possess a
satisfactory capacity to pay principal and interest, with some vulnerability to
adverse financial and economic changes over the term of the notes.
DESCRIPTION OF COMMERCIAL PAPER
The Portfolio may invest in commercial paper (including variable amount
master demand notes) rated A-1 or better by S&P or Prime-1 by Moody's or by S&P.
Commercial paper refers to short-term, unsecured promissory notes issued by
corporations to finance short-term credit needs. Commercial paper is usually
sold on a discount basis and has a maturity at the time of issuance not
exceeding nine months. Variable amount master demand notes are demand
obligations that permit the investment of fluctuating amounts at varying market
rates of interest pursuant to arrangement between the issuer and a commercial
bank acting as agent for the payees of such notes whereby both parties have the
right to vary the amount of the outstanding indebtedness on the notes. As
variable amount master demand notes are direct lending arrangements between a
lender and a borrower, it is not generally contemplated that such instruments
will be traded, and there is no secondary market for these notes, although they
are redeemable (and thus immediately repayable by the borrower) at face value,
plus accrued interest, at any time. In connection with the Portfolio's
investment in variable amount master demand notes, the Adviser's investment
management staff will monitor, on an ongoing basis, the earning power, cash flow
and other liquidity ratios of the issuer and the borrower's ability to pay
principal and interest on demand.
Commercial paper rated A-1 by S&P has the following characteristics: (1)
liquidity ratios are adequate to meet cash requirements; (2) long-term senior
debt is rated "A" or better; (3) the issuer has access to at least two
additional channels of borrowing; (4) basic earnings and cash flow have an
upward trend with allowance made for unusual circumstances; (5) typically, the
issuer's industry is well established, and the issuer has a strong position
within the industry; and (6) the reliability and quality of management are
unquestioned. Relative strength or weakness of the above factors determine
whether the issuer's commercial paper is A-1, A-2 or A-3. The rating Prime-1 is
the highest commercial paper rating assigned by Moody's. Among the factors
considered by Moody's in assigning ratings are the following: (1) evaluation of
the management of the issuer; (2) economic evaluation of the issuer's industry
or industries and the appraisal of speculative-type risks which may be inherent
in certain areas; (3) evaluation of the issuer's products in relation to
completion and customer acceptance; (4) liquidity; (5) amount and quality of
long term debt; (6) trend of earnings over a period of ten years; (7) financial
strength of a parent company and the relationships which exist with the issuer;
and (8) recognition by the management of issuer of obligations which may be
present or may arise as a result of public interest questions and preparations
to meet such obligations. Relative strength or weakness of the above factors
determine whether the issuer's commercial paper is Prime-1 or Prime-2.
A-2
<PAGE>
PART B
UAM FUNDS
CHICAGO ASSET MANAGEMENT VALUE/CONTRARIAN PORTFOLIO
CHICAGO ASSET MANAGEMENT INTERMEDIATE BOND PORTFOLIO
INSTITUTIONAL CLASS SHARES
STATEMENT OF ADDITIONAL INFORMATION
AUGUST 28, 1996
This Statement is not a Prospectus but should be read in conjunction with
the Prospectuses of the UAM Funds Trust (the "UAM Funds" or the "Fund") for the
Chicago Asset Management Value/Contrarian Portfolio Institutional Class Shares
and Chicago Asset Management Intermediate Bond Portfolio Institutional Class
Shares dated August 28, 1996. To obtain the Prospectuses, please call the UAM
Funds Service Center:
1-800-638-7983
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Investment Objectives and Policies......................... 2
Purchase of Shares......................................... 8
Redemption of Shares....................................... 8
Shareholder Services....................................... 9
Investment Limitations..................................... 10
Management of the Fund..................................... 11
Investment Adviser......................................... 13
Portfolio Transactions..................................... 14
Administrative Services.................................... 15
Performance Calculations................................... 15
General Information........................................ 18
Federal Taxes.............................................. 19
Financial Statements....................................... 19
Appendix-Description of Corporate Bond Ratings............. A-1
</TABLE>
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The following policies supplement the investment objectives and
policies of the Chicago Asset Management Value/Contrarian Portfolio and Chicago
Asset Management Intermediate Bond Portfolio (the "Portfolios") as set forth in
the Chicago Asset Management Prospectuses for the Portfolios:
SECURITIES LENDING
Each 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, a 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. Each 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
Each Portfolio may engage in various portfolio strategies to hedge
against adverse movements in the equity, debt and currency markets. Each
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 Portfolio may also enter into foreign
currency contracts to hedge against its foreign currency movements. Each of
these portfolio strategies is described below. Although certain risks are
involved in options and futures transactions, the Adviser believes that, because
the Portfolios will engage in options and futures transactions only for hedging
purposes, the options and futures portfolio strategies of a Portfolio will not
subject it to the risks frequently associated with the speculative use of
options and futures transactions. While each Portfolio's use of hedging
strategies is intended to reduce the volatility of the net asset value of the
Portfolio shares, the Portfolios' net asset value will fluctuate. There can be
no assurance that a Portfolio's hedging transactions will be effective. Also,
a Portfolio may not necessarily be engaging in hedging activities when movements
in any particular equity, debt or currency market occur.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
The U.S. dollar value of the assets of the Portfolios may be affected
favorably or unfavorably by changes in foreign currency exchange rates and
exchange control regulations, and the Portfolios may incur costs in connection
with conversions between various currencies. The Portfolios will conduct their
foreign currency exchange transactions either on a spot (i.e., cash) basis at
the spot rate prevailing in the foreign currency exchange market, or through
entering into forward contracts to purchase or sell foreign currencies. A
forward foreign currency exchange contract involves an obligation to purchase or
sell a specific currency at a future date, which may be any fixed number of days
from the date of the contract agreed upon by the parties, at a price set at the
time of the contract. These contracts are traded in the interbank market and
are conducted directly between currency traders (usually large commercial banks)
and their customers. A forward contract generally has no deposit requirement,
and no commissions are charged at any stage for such trades.
2
<PAGE>
The Portfolios may enter into forward foreign currency exchange
contracts in several circumstances. When a Portfolio enters into a contract for
the purchase or sale of a security denominated in a foreign currency, or when a
Portfolio anticipates the receipt in a foreign currency of dividends or interest
payments on a security which it holds, the Portfolio may desire to "lock-in" the
U.S. dollar price of the security or the U.S. dollar equivalent of such dividend
or interest payment, as the case may be. By entering into a forward contract
for a fixed amount of dollars, for the purchase or sale of the amount of foreign
currency involved in the underlying transactions, the Portfolio will be able to
protect itself against a possible loss resulting from an adverse change in the
relationship between the U.S. dollar and the subject foreign currency during the
period between the date on which the security is purchased or sold, or on which
the dividend or interest payment is declared, and the date on which such
payments are made or received.
Additionally, when either of the Portfolios anticipates that the
currency of a particular foreign country may suffer a substantial decline
against the U.S. dollar, it may enter into a forward contract for a fixed amount
of dollars to sell the amount of foreign currency approximating the value of
some or all of such Portfolio's securities denominated in such foreign currency.
The precise matching of the forward contract amounts and the value of the
securities involved will not generally be possible since the future value of
securities in foreign currencies will change as a consequence of market
movements in the value of these securities between the date on which the forward
contract is entered into and the date it matures. The projection of short-term
currency market movement is extremely difficult, and the successful execution of
a short-term hedging strategy is highly uncertain. Neither Portfolio intends to
enter into such forward contracts to protect the value of portfolio securities
on a regular or continuous basis. The Portfolios will not enter into such
forward contracts or maintain a net exposure to such contracts where the
consummation of the contracts would obligate such Portfolio to deliver an amount
of foreign currency in excess of the value of such Portfolio's securities or
other assets denominated in that currency.
Under normal circumstances, consideration of the prospect for currency
parities will be incorporated into the long-term investment decisions made with
regard to overall diversification strategies. However, the management of the
Fund believes that it is important to have the flexibility to enter into such
forward contracts when it determines that the best interests of the performance
of each Portfolio will thereby be served. The Fund's Custodian will place cash,
U.S. government securities, or high-grade debt securities into a segregated
account in an amount equal to the value of such Portfolio's total assets
committed to the consummation of forward foreign currency exchange contracts.
If the value of the securities placed in the segregated account declines,
additional cash or securities will be placed in the account on a daily basis so
that the value of the account will be equal to the amount of such Portfolio's
commitments with respect to such contracts.
The Portfolios generally will not enter into a forward contract with a
term of greater than one year. At the maturity of a forward contract, a
Portfolio may either sell the portfolio security and make delivery of the
foreign currency, or it may retain the security and terminate its contractual
obligation to deliver the foreign currency by purchasing an "offsetting"
contract with the same currency trader obligating it to purchase, on the same
maturity date, the same amount of the foreign currency.
It is impossible to forecast with absolute precision the market value
of a particular portfolio security at the expiration of the contract.
Accordingly, it may be necessary for a Portfolio to purchase additional foreign
currency on the spot market (and bear the expense of such purchase) if the
market value of the security is less than the amount of foreign currency that
such Portfolio is obligated to deliver and if a decision is made to sell the
security and make delivery of the foreign currency.
If a Portfolio retains the portfolio security and engages in an
offsetting transaction, such Portfolio will incur a gain or loss (as described
below) to the extent that there has been movement in forward contract prices.
Should forward prices decline during the period between a Portfolio entering
into a forward contract for the sale of a foreign currency and the date it
enters into an offsetting contract for the purchase of the foreign currency,
such Portfolio will realize a gain to the extent that the price of the currency
it has agreed to sell exceeds the price of the currency it has agreed to
purchase. Should forward prices increase, such Portfolio would suffer a loss to
the extent that the price of the currency it has agreed to purchase exceeds the
price of the currency it has agreed to sell.
Each of the Portfolios' dealings in forward foreign currency exchange
contracts will be limited to the transactions described above. Of course, the
Portfolios are not required to enter into such transactions with regard to their
foreign currency-denominated securities. It also should be realized that this
method of protecting the value of portfolio securities against a decline in the
value of a currency does not eliminate fluctuations in the underlying prices of
the securities. It simply establishes a rate of exchange which one can achieve
at some future point in time. Additionally, although such
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contracts tend to minimize the risk of loss due to a decline in the value of the
hedged currency, at the same time, they tend to limit any potential gain which
might result should the value of such currency increase.
FUTURES CONTRACTS
Each 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
Portfolios expect 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 Portfolios intend 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 a Portfolio. A
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
Portfolios expect 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
A 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,
a 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.
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RISK FACTORS IN FUTURES TRANSACTIONS
A 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
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,
a 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, a
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 a 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
Portfolios are engaged in only for hedging purposes, the Adviser does not
believe that the Portfolios are subject to the risks of loss frequently
associated with futures transactions. A 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 Portfolios 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.
OPTIONS
The Portfolios 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, each 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, each 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
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call options serve as a partial hedge against the price of the underlying
security declining. Each Portfolio writes only covered options, which means that
so long as a 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 a 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, a 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.
OPTIONS ON FOREIGN CURRENCIES
The Portfolios may purchase and write options on foreign currencies
for hedging purposes in a manner similar to that in which futures contracts on
foreign currencies, or forward contracts, will be utilized. For example, a
decline in the dollar value of a foreign currency in which portfolio securities
are denominated will reduce the dollar value of such securities, even if their
value in the foreign currency remains constant. In order to protect against
such diminutions in the value of portfolio securities, the Portfolios may
purchase put options on the foreign currency. If the value of the currency does
decline, the Portfolio will have the right to sell such currency for a fixed
amount in dollars and will thereby offset, in whole or in part, the adverse
effect on its portfolio which otherwise would have resulted.
Conversely, where a rise in the dollar value of a currency in which
securities to be acquired are denominated is projected, thereby increasing the
cost of such securities, the Portfolios may purchase call options thereon. The
purchase of such options could offset, at least partially, the effects of the
adverse movements in exchange rates. As in the case of other types of options,
however, the benefit to the Portfolios deriving from purchases of foreign
currency options will be reduced by the amount of the premium and related
transaction costs. In addition, where currency exchange rates do not move in
the direction or to the extent anticipated, a Portfolio could sustain losses on
transactions in foreign currency options which would require it to forego a
portion or all of the benefits of advantageous changes in such rates.
Each Portfolio may write options on foreign currencies for the same
types of hedging purposes. For example, where a Portfolio anticipates a decline
in the dollar value of foreign currency denominated securities due to adverse
fluctuations in exchange rates it could, instead of purchasing a put option,
write a call option on the relevant currency. If the anticipated decline
occurs, the option will most likely not be exercised, and the diminution in
value of portfolio securities will be offset by the amount of the premium
received.
Similarly, instead of purchasing a call option to hedge against an
anticipated increase in the dollar cost of securities to be acquired, a
Portfolio could write a put option on the relevant currency which, if rates move
in the manner projected, will expire unexercised and allow the Portfolio to
hedge such increased cost up to the amount of the premium. As in the case of
other types of options, however, the writing of a foreign currency option will
constitute only a partial hedge up to the amount of the premium, and only if
rates move in the expected direction. If this does not occur, the option may be
exercised and a Portfolio would be required to purchase or sell the underlying
currency at a loss which may not be offset by the amount of the premium.
Through the writing of options on foreign currencies, a Portfolio also may be
required to forego all or a portion of the benefits which might otherwise have
been obtained from favorable movements in exchange rates.
Each Portfolio intends to write covered call options on foreign
currencies. A call option written on a foreign currency by a Portfolio is
"covered" if the Portfolio owns the underlying foreign currency covered by the
call or has an absolute and immediate right to acquire that foreign currency
without additional cash consideration (or for additional cash consideration held
in a segregated account by the Custodian) upon conversion or exchange of other
foreign currency held in its portfolio. A call option is also covered if a
Portfolio has a call on the same foreign currency and in the same principal
amount as the call written where the exercise price of the call held (a) is
equal to or less than the exercise price of the call written or (b) is greater
than the exercise price of the call written if the difference is maintained by
the Portfolio in cash, U.S. government securities or other high grade liquid
debt securities in a segregated account with the Custodian.
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Each Portfolio also intends to write call options on foreign
currencies that are not covered for cross-hedging purposes. A call option on a
foreign currency is for cross-hedging purposes if it is not covered but is
designed to provide a hedge against a decline in the U.S. dollar value of a
security which the Portfolio owns or has the right to acquire and which is
denominated in the currency underlying the option due to an adverse change in
the exchange rate. In such circumstances, the Portfolio will collateralize the
option by maintaining in a segregated account with the Custodian, cash or U.S.
government securities or other high grade liquid debt securities in an amount
not less than the value of the underlying foreign currency in U.S. dollars
marked to market daily.
RISKS OF OPTIONS ON FUTURES CONTRACTS, FORWARD CONTRACTS AND OPTIONS ON FOREIGN
CURRENCIES
Options on foreign currencies and forward contracts are not traded on
contract markets regulated by the CFTC or (with the exception of certain foreign
currency options) by the Commission. To the contrary, such instruments are
traded through financial institutions acting as market-makers, although foreign
currency options are also traded on certain national securities exchanges, such
as the Philadelphia Stock Exchange and the Chicago Board Options Exchange,
subject to the regulation of the Commission. Similarly, options on currencies
may be traded over-the-counter. In an over-the-counter trading environment, many
of the protection afforded to exchange participants will not be available. For
example, there are no daily price fluctuation limits, and adverse market
movements could therefore continue to an unlimited extent over a period of time.
Although the purchase of an option cannot lose more than the amount of the
premium plus related transaction costs, this entire amount could be lost.
Moreover, the option writer and a trader of forward contracts could lose amounts
substantially in excess of their initial investments, due to the margin and
collateral requirements associated with such positions.
Options on foreign currencies traded on national securities exchanges
are within the jurisdiction of the Commission, as are other securities traded on
such exchanges. As a result, many of the protections provided to traders on
organized exchanges will be available with respect to such transactions. In
particular, all foreign currency option positions entered into on a national
securities exchange are cleared and guaranteed by the Options Clearing
Corporation ("OCC"), thereby reducing the risk of counterparty default.
Furthermore, a liquid secondary market in options traded on a national
securities exchange may be more readily available than in the over-the-counter
market, potentially permitting the Portfolios to liquidate open positions at a
profit prior to exercise or expiration, or to limit losses in the event of
adverse market movements.
The purchase and sale of exchange-traded foreign currency options,
however, is subject to the risks of the availability of a liquid secondary
market described above, as well as the risks regarding adverse market movements,
margining of options written, the nature of the foreign currency market,
possible intervention by governmental authorities and the effect of other
political and economic events. In addition, exchange-traded options of foreign
currencies involve certain risks not presented by the over-the-counter market.
For example, exercise and settlement of such options must be made exclusively
through the OCC, which has established banking relationships in applicable
foreign countries for this purpose. As a result, the OCC may, if it determines
that foreign governmental restrictions or taxes would prevent the orderly
settlement of foreign currency option exercises, or would result in undue
burdens on the OCC or its clearing member, impose special procedures on exercise
and settlement, such as technical changes in the mechanics of delivery of
currency, the fixing of dollar settlement prices or prohibitions, on exercise.
In addition, futures contracts, options on futures contracts, forward
contracts and options of foreign currencies may be traded on foreign exchanges.
Such transactions are subject to the risk of governmental actions affecting
trading in, or the prices of, foreign currencies or 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 a trading decision, (iii) delays in a
Portfolio's ability to act upon economic events occurring in foreign markets
during non-business 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.
INTEREST RATE SWAP TRANSACTIONS
Each Portfolio may enter into swap contracts. A swap is an agreement
to exchange the return generated by one instrument for the return generated by
another instrument. The payment streams are calculated by reference to a
specific index and agreed upon notional amount. The term "specified index"
includes fixed interest rates, total return on interest rate indices and fixed
income indices, (as well as amounts derived from arithmetic operations on these
indices). For example, a Portfolio may agree to swap the return generated by a
fixed-income index for the return generated by a second fixed-income index.
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The Portfolios will usually enter into swaps on a net basis, i.e., the
two payment streams are netted out in a cash settlement on the payment date or
dates specified in the instrument, with a Portfolio receiving or paying, as the
case may be, only the net amount of the two payments. A Portfolio's obligations
under a swap agreement will be accrued daily (offsetting against any amounts
owing to the Portfolio) and any accrued but unpaid net amounts owed to a swap
counterparty will be covered by the maintenance of a segregated account
consisting of cash, U.S. government securities, or high grade debt obligations,
to avoid any potential leveraging of the Portfolio. Since swaps will be entered
into for good faith hedging purposes, the Adviser and the Fund believe such
obligations do not constitute "senior securities" under the 1940 Act and,
accordingly, will not treat them as being subject to its borrowing restrictions.
Interest rate swaps do not involve the delivery of securities, other
underlying assets, or principal. Accordingly, the risk of loss with respect to
interest rate swaps is limited to the net amount of interest payments that a
Portfolio is contractually obligated to make. If the other party to the
interest rate swap defaults, a Portfolio's risk of loss consists of the net
amount of interest payments that a Portfolio is contractually entitled to
receive. If there is a default by the counterparty, the Portfolio may have
contractual remedies pursuant to the agreements related to the transaction. The
swap market has grown substantially in recent years with a large number of banks
and investment banking firms acting both as principals and as agents utilizing
standardized swap documentation. As a result, the swap market has become
relatively liquid.
PURCHASE OF SHARES
Shares of each 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 each Portfolio is $2,000 with certain
exceptions as may be determined from time to time by the officers of the Fund.
The initial investment minimum for IRA accounts is $500. The initial investment
for spousal IRA accounts is $250. The minimum for any subsequent investment is
$100. 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: Labor Day, September 2, 1996; Thanksgiving Day, November 28,
1996; Christmas Day, December 25, 1996; New Year's Day, January 1, 1997;
Presidents' Day, February 17, 1997; Good Friday, March 28, 1997; Memorial Day,
May 26, 1997; and Independence Day, July 4, 1997.
Each 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 a Portfolio's shares.
REDEMPTION OF SHARES
Each 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 a 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 a 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.
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SIGNATURE GUARANTEES
To protect your account, the Fund and Chase Global Funds Services
Company (the "Sub-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 Sub-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
Institutional Class Shares of each Portfolio may be exchanged for
Institutional Class Shares of the other Portfolio. In addition, Institutional
Class Shares of each Portfolio may be exchanged for any other Institutional
Class Shares of a Portfolio included in 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 each Portfolio's 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 objective 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 these times will be processed
on the next business day. Neither the Fund nor the Sub-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
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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 a 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 a Portfolio's investment
limitations. Investment limitations (1), (2), (3) and (4) are classified as
fundamental. A Portfolio's fundamental investment limitations cannot be changed
without approval by a "majority of the outstanding shares" (as defined in the
1940 Act) of thethe Portfolio. Each 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 stock or bond 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) invest in warrants, valued at the lower of cost or market, in excess
of 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 that are not listed on the New York or
American Stock Exchanges. Warrants attached to securities are not
subject to this limitation.
10
<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
1140 Avenue of the Americas the Fund; President of Regis Retirement
New York, NY 10036 Plan Services since 1993; Former
Age 44 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
Meredith, NH 03253 Great Island Investment Company, Inc.;
Age 67 President of Bennett Management Company
from 1988 to 1993.
J. EDWARD DAY Trustee of the Fund; Retired Partner in
5804 Brookside Drive the Washington office of the law firm
Chevy Chase, MD 20815 Squire, Sanders & Dempsey; Director,
Age 81 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,
Baltimore, MD 21201 Inc.; Chairman of the Board of Chektec
Age 48 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
1717 Arch Street Dechert Price & Rhoads; Director, Hofler
Philadelphia, PA 19103 Corp.
Age 54
NORTON H. REAMER* Trustee, President and Chairman of the
One International Place Fund; President, Chief Executive and a
Boston, MA 02110 Director of United Asset Management
Age 60 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
Boston, MA 02111 Investors Corporation ("DSI") since 1988;
Age 53 Director and Chief Executive Officer of
H. T. Investors, Inc., formerly a
subsidiary of DSI.
WILLIAM H. PARK* Vice President of the Fund; Executive
One International Place Vice President and Chief Financial
Boston, MA 02110 Officer of United Asset Management
Age 49 Corporation.
* These people are deemed to be "interested persons" of the Fund as
that term is defined in the 1940 Act.
11
<PAGE>
GARY L. FRENCH Treasurer of the Fund; President and Chief
211 Congress Street Executive Officer of UAM Fund Services,
Boston, MA 02110 Inc.; President of UAM Fund Distributors,
Age 45 Inc.; formerly Vice President-Operations
Development and Control of Fidelity
Investment Institutional Services from
February 1995 to August 1995; Treasurer of
the Fidelity Group of Funds from 1991 to
February 1995.
MICHAEL E. DEFAO* Secretary of the Fund, Vice President and
211 Congress Street General Counsel of UAM Fund Services,
to February 1995. Inc., formerly an Associate of Ropes &
Boston, MA 02110 Gray (a law firm) from 1993 to February
Age 28 1995.
ROBERT R. FLAHERTY* Assistant Treasurer of the Fund; Vice
211 Congress Street President of UAM Fund Services, Inc.;
Boston, MA 02110 formerly Manager of Fund Administration
Age 32 and Compliance of the Sub-Administrator
from March 1995 to July 1996; formerly
Senior Manager of Deloitte & Touche LLP
from 1985 to 1995.
KARL O. HARTMANN* Assistant Secretary of the Fund; Senior
73 Tremont Street Vice President, Secretary and General
Boston, MA 02108 Counsel of Administrator; Senior Vice
Age 41 President, Secretary and General Counsel
of Leland, O'Brien, Rubinstein Associates,
Inc., from November 1990 to November
1991.
* These people are deemed to be "interested persons" 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 and 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 Sub-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, 1996.
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 $3,396 0 0 $29,600
J. Edward Day,
Trustee $3,396 0 0 $29,600
</TABLE>
12
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Philip D. English,
Trustee $3,396 0 0 $29,600
William A. Humenuk,
Trustee $3,396 0 0 $29,600
</TABLE>
PRINCIPAL HOLDERS OF SECURITIES
As of July 31, 1996, the following persons or organizations held of
record or beneficially 5% or more of the shares of a Portfolio:
Chicago Asset Management Value/Contrarian Portfolio: John McNamara,
Norton Reamer, and William Park, Trustees, UAM Proft Sharing & 401k Plan, c/o
Chicago Asset Management Company, 70 W. Madison Street, 56th Floor, Chicago, IL,
6.7%*.
Chicago Asset Management Intermediate Bond Portfolio: Edward W. Usher,
Francis X. McCartin, Trustees, Pipe Fitters' Pension Fund Local 597, c/o Chicago
Asset Management Company 70 W. Madison Street, 56th Floor, Chicago, Illinois,
89%*; Hartnat & Co., F/B/O American Eurocopter, P.O. Box 4044, Boston, MA,
8%*.
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.
______________
* Denotes shares held by a trustee or other fiduciary for which
beneficial ownership is disclaimed or presumed disclaimed.
INVESTMENT ADVISER
CONTROL OF ADVISER
Chicago Asset Management Company (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 ___ 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.
PHILOSOPHY AND STYLE
The Adviser views itself as an equity manager who, by combining value
judgment and contrarian opinion, strives to outperform the market and other
money managers not by market timing, but by focusing on the selection of
individual securities. Categorized as a large cap, bottom-up, value/contrarian,
the Adviser's philosophy and strategy are qualitative and have remained the same
since the inception of the firm.
13
<PAGE>
In addition, the Adviser's approach is predicated on a controlled risk
strategy that avoids dependence on interest rate anticipation while emphasizing
value added through sector rotation and yield curve analysis. The firm seeks to
add value by improving the odds in a risk/reward equation. The Adviser focuses
on the more traditional aspects of active portfolio management by scrutinizing
sectors, coupons, call features, and the shape of the yield curve. Portfolios
are constructed for income and safety.
ADVISORY FEES
As compensation for services rendered by the Adviser under the
Investment Advisory Agreements, the Portfolio pays the Adviser an annual fee in
monthly installments, calculated by applying the following annual percentage
rates to each Portfolio's average daily net assets for the month:
<TABLE>
<S> <C>
Chicago Asset Management Value/Contrarian Portfolio................... 0.625%
Chicago Asset Management Intermediate Bond Portfolio.................. 0.48%
</TABLE>
From December 16, 1994 (date of commencement) to April 30, 1995, the
Chicago Asset Management Value/Contrarian Portfolio paid advisory fees of $0.
During this period, the Adviser voluntarily waived advisory fees of $1,261. For
the fiscal year ended April 30, 1996, the Chicago Asset Management
Value/Contrarian Portfolio paid advisory fees of $0. During this period, the
Adviser voluntarily waived advisory fees of $5,000. Until further notice, the
Adviser has voluntarily agreed to waive its advisory fee and to assume as the
Adviser's own expense certain operating expenses payable by the Portfolio, if
necessary, in order to keep the Portfolio's total annual operating expenses from
exceeding 0.95%.
For the period from January 24, 1995 (date of commencement) to April
30, 1995, the Chicago Asset Management Intermediate Bond Portfolio paid advisory
fees of $0. During this period, the Adviser voluntarily waived advisory fees of
$6,578. For the fiscal year ended April 30, 1996, the Chicago Asset Management
Intermediate Bond Portfolio paid advisory fees of $0. During this period, the
Adviser voluntarily waived advisory fees of $31,000. Until further notice, the
Adviser has voluntarily agreed to waive its advisory fee and to assume as the
Adviser's own expense certain operating expenses payable by the Portfolio, if
necessary, in order to keep the Portfolio's total annual operating expenses from
exceeding 0.80%.
PORTFOLIO TRANSACTIONS
The Investment Advisory Agreements authorize the Adviser to select the
brokers or dealers that will execute the purchases and sales of investment
securities for the Portfolios and directs the Adviser to use its best efforts to
obtain the best execution with respect to all transactions for the Portfolios.
The Adviser may, however, consistent with the interests of the Portfolios,
select brokers on the basis of the research, statistical and pricing services
they provide to the Portfolios. 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 Agreements. 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 Portfolios and the Adviser's other clients.
It is not the Fund's practice to allocate brokerage or effect
principal transactions with dealers 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 refer clients to the Adviser. During
the fiscal years ended April 30, 1995 and April 30, 1996, the entire Fund paid
brokerage commissions of approximately $15,000 and $39,000, respectively.
Some securities considered for investment by the Portfolios may also
be appropriate for other clients served by the Adviser. If purchases or sales of
securities consistent with the investment policies of a 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.
14
<PAGE>
ADMINISTRATIVE SERVICES
For the period ended April 30, 1995, administrative services fees paid
to the Sub-Administrator by the Chicago Asset Management Value/Contrarian
Portfolio and the Chicago Asset Management Intermediate Bond Portfolio totaled
$12,304 and $9,785, respectively. The basis of the fees paid to the Sub-
Administrator for the 1995 fiscal year was as follows: the Fund paid a monthly
fee for its services which on an annualized basis equaled 0.20% of the first
$200 million in combined assets; plus 0.12% of the next $800 million in combined
assets; plus 0.08% on assets over $1 billion but less than $3 billion; plus
0.06% on assets over $3 billion. The fees were allocated among the Portfolios on
the basis of their relative assets and were subject to a designated minimum fee
schedule per Portfolio, which ranged from $2,000 per month upon inception of a
Portfolio to $70,000 annually after two years. For the period ended April 30,
1996, administrative services fees paid to the Sub-Administrator by the Chicago
Asset Management Value/Contrarian Portfolio and the Chicago Asset Management
Intermediate Bond Portfolio totaled $49,477 and $48,360, respectively. For the
period April 15, 1996 to April 30, 1996, UAM Fund Services, Inc. earned $2,523
and $2,640, respectively, from the Chicago Asset Management Value/Contrarian and
Chicago Asset Management Intermediate Bond Portfolios as Administrator. The
services provided by the Administrator and Sub-Administrator and the current
fees payable to both are described in the Portfolios' Prospectuses.
PERFORMANCE CALCULATIONS
PERFORMANCE
The Portfolios 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 a Portfolio's
investment. The current yield of a 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. The yield for the Intermediate Bond
Portfolio for the 30-day period ended on April 30, 1996 was 5.43%.
A yield 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 a 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.
15
<PAGE>
The average annual total rates of return for the Chicago Asset
Management Intermediate Bond Portfolio and Chicago Asset Management
Value/Contrarian Portfolio from inception and for the one year period ended on
the date of the Financial Statements included herein are as follows:
<TABLE>
<CAPTION>
SINCE
INCEPTION
THROUGH YEAR
ONE YEAR ENDED ENDED
APRIL 30, 1996 APRIL 30, 1996 INCEPTION DATE
<S> <C> <C> <C>
Intermediate Bond Portfolio 7.62% 9.56% 1/24/95
Value/Contrarian Portfolio 28.00% 29.84% 12/16/94
</TABLE>
These figures are 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).
COMPARISONS
To help investors better evaluate how an investment in either
Portfolio 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) 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
16
<PAGE>
Europe, Australia and the Far East, and over
1,400 securities listed on the stock exchanges of these
continents, including North America.
(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) 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.
17
<PAGE>
(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) Lehman Brothers Government/Corporate Index - is a combination of
the Government and 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 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.
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 a 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 executive office is located
at One International Place, 44th Floor, 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. Currently, the Fund
is offering shares of seven Portfolios.
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 vote.
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
The Fund's policy is to distribute substantially all of each
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
Prospectuses.
18
<PAGE>
Any dividend or distribution paid shortly after the purchase of shares
of a 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 Prospectuses.
As set forth in the Prospectuses, 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 a 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.
FEDERAL TAXES
In order for each 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 each 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 a 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 a 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 Portfolios have identified as hedging
transactions, in general each 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 l00% ordinary income. Furthermore, foreign currency futures
contracts which are intended to hedge against a change in the value of
securities held by a Portfolio may affect the holding period of such securities
and, consequently, the nature of the gain or loss on such securities upon
disposition.
Each 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.
FINANCIAL STATEMENTS
The Financial Statements of the Chicago Asset Management
Value/Contrarian and Intermediate Bond Portfolios for the fiscal year ended
April 30, 1996 and the Financial Highlights for the respective periods
presented, which appear in the
19
<PAGE>
Portfolios' 1996 Annual Report to Shareholders, and the reports thereon of Price
Waterhouse LLP, the Fund's independent accountants, also appearing therein,
which were previously filed electronically with the Commission (Accession
Number: 0000950109-96-004190), are incorporated by reference.
20
<PAGE>
APPENDIX - DESCRIPTION OF CORPORATE BOND RATINGS
DESCRIPTION OF CORPORATE BOND RATINGS
MOODY'S INVESTORS SERVICE , INC. CORPORATE BOND RATINGS:
AAA - Bonds which are rated 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.
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.
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.
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.
BA - Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate, and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B - Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contact over any long period of time may be small.
CAA - Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
CA - Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.
C - Bonds which are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
STANDARD & POOR'S CORPORATION 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-1
<PAGE>
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.
BB, B, CCC, CC - Debt rated BB, B, CCC and CC is regarded, on balance, as
predominantly speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation. BB indicates the
lowest degree of speculation and CC the highest degree of speculation. While
such debt will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions.
C - The rating C is reserved for income bonds on which no interest is being
paid.
D - Debt rated D is in default, and payment of interest and/or repayment of
principal is in arrears.
A-2
<PAGE>
PART B
UAM FUNDS
HANSON EQUITY PORTFOLIO
INSTITUTIONAL CLASS SHARES
STATEMENT OF ADDITIONAL INFORMATION
AUGUST 28, 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 Hanson
Equity Portfolio dated August 28, 1996. To obtain the Prospectus, please call
the UAM Funds Service Center:
1-800-638-7983
<TABLE>
<CAPTION>
Table of Contents
Page
----
<S> <C>
Investment Objectives and Policies........................... 2
Purchase of Shares........................................... 2
Redemption of Shares......................................... 3
Shareholder Services......................................... 3
Investment Limitations....................................... 4
Management of the Fund....................................... 5
Investment Adviser........................................... 7
Portfolio Transactions....................................... 7
Performance Calculations..................................... 8
General Information.......................................... 10
Federal Taxes................................................ 11
</TABLE>
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The following policies supplement the investment objective and
policies of the Hanson Equity Portfolio (the "Portfolio") as set forth in the
Hanson Equity Portfolio Prospectus:
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.
FOREIGN SECURITIES
Investors in the Portfolio should recognize that investing in foreign
companies 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 Portfolio's
investments. However, these foreign withholding taxes are not expected to have a
significant impact.
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 $2,500 with certain
exceptions as may be determined from time to time by the officers of the Fund.
The initial investment minimum for IRA accounts is $500. The initial investment
for spousal IRA accounts is $250. The minimum for any subsequent investment is
$100. An order received in proper form prior to the 4:00 p.m. close of
2
<PAGE>
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: Labor Day, September 2, 1996; Thanksgiving Day,
November 28, 1996; Christmas Day, December 25, 1996; New Year's Day, January 1,
1997; Presidents' Day, February 17, 1997; Good Friday, March 28, 1997; Memorial
Day, May 26, 1997; and Independence Day, July 4, 1997.
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 Portfolios' 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 "Sub-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, national
securities exchanges, registered securities associations, clearing agencies and
savings associations. A complete definition of eligible guarantor institution is
available from the Sub-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 Portfolio's
Prospectus under the heading "BUYING, SELLING AND EXCHANGING SHARES":
3
<PAGE>
EXCHANGE PRIVILEGE
Institutional Class Shares of the Portfolio may be exchanged for any
other Institutional Class Shares of a Portfolio included in 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 Portfolio's
Prospectus.) Exchange requests should be made by calling the Fund (1-800-638-
7983) or by writing to UAM Funds Trust, 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 this time will be processed on
the next business day. Neither the Fund nor the Sub-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 Fund's Board of Trustees
to assure that such exchanges do not disadvantage the Fund and its shareholders.
For Federal income tax purposes an exchange between Funds 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 thethe 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;
4
<PAGE>
(5) purchase on margin or sell short;
(6) 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;
(7) 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;
(8) invest for the purpose of exercising control over management of any
company;
(9) write or acquire options or interests in oil, gas, mineral leases or
other mineral exploration or development programs; and
(10) invest in warrants, if, by reason of such purchase, more than 5% of
the value of the Portfolio's net assets would be invested in
warrants valued at the lower of market or cost. Included in this
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 Fund;
1140 Avenue of the President of Regis Retirement Plan Services since
Americas New York, 1993; Former President of UAM Fund Distributors,
NY 10036 Inc.; Formerly responsible for Defined
Age 44 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 Investment
College Road - RFD 3 Management Company, Inc. and Great Island
Meredith, NH 03253 Investment Company, Inc.; President of Bennett
Age 67 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, Sanders
Chevy Chase, MD 20815 & Dempsey; Director, Medical Mutual Liability
Age 81 Insurance Society of Maryland; formerly, Chairman
of the Montgomery County, Maryland, Revenue
Authority.
PHILIP D. ENGLISH Trustee of the Fund; President and Chief Executive
16 West Madison Street Officer of Broventure Company, Inc.; Chairman of
Baltimore, MD 21201 the Board of Chektec Corporation and Cyber
Age 48 Scientific, Inc.
WILLIAM A. HUMENUK Trustee of the Fund; Partner in the Philadelphia
4000 Bell Atlantic Tower office of the law firm Dechert Price & Rhoads;
1717 Arch Street Director, Hofler Corp.
Philadelphia, PA 19103
Age 54
/*/ These people are deemed to be "interested persons" of the Fund as that
term is defined in the 1940 Act.
5
<PAGE>
NORTON H. REAMER.* Trustee,President and Chairman of the fund;
One International Place President, Chief Executive and a Director of
Boston, MA 02110 United Asset Management Corporation;
Age 60 Director, Partner or Trustee of each of the
Investment Companies of the Eaton Vance 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
Age 53 Chief Executive Officer of H. T. Investors,
Inc., formerly a subsidiary of DSI.
WILLIAM H. PARK.* Vice President of the Fund; Executive Vice
One International Place President and Chief Financial Officer of
Boston, MA 02110 United Asset Management Corporation.
Age 49
GARY L. FRENCH Treasurer of the Fund; President and Chief
211 Congress Street Executive Officer of UAM Fund Services,
Boston, MA 02110 Inc.; President of UAM Fund Distributors,
Age 45 Inc.; formerly Vice President-Operations
Development and Control of Fidelity
Investment Institutional Services from
February 1995 to August 1995; Treasurer of
the Fidelity Group of Funds from 1991 to
February 1995.
MICHAEL E. DEFAO * Secretary of the Fund, Vice President and
211 Congress Street General Counsel of UAM Fund Services, Inc.,
Boston, MA 02110 formerly an Associate of Ropes & Gray (a law
Age 28 firm) from 1993 to February 1995.
ROBERT R. FLAHERTY * Assistant Treasurer of the Fund; Vice
211 Congress Street President of UAM Fund Services, Inc.;
Boston, MA 02110 formerly Manager of Fund Administration and
Age 32 Compliance of the Sub-Administrator since
from March 1995 to July 1996; formerly
Senior Manager of Deloitte & Touche LLP from
1985 to 1995.
KARL O. HARTMANN * Assistant Secretary of the Fund; Senior Vice
73 Tremont Street President, Secretary and General Counsel of
Boston, MA 02108 Administrator; Senior Vice President,
Age 41 Secretary General Counsel of Leland,
O'Brien, Rubinstein Associates, Inc., from
November 1990 to November 1991.
* These people are deemed to be "interested persons" 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 allocated
proportionately among the Portfolios of the Fund and 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 Sub-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, 1996.
6
<PAGE>
<TABLE>
<CAPTION>
COMPENSATION TABLE
(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 $3,396 0 0 $29,600
J. Edward Day,
Trustee $3,396 0 0 $29,600
Philip D. English,
Trustee $3,396 0 0 $29,600
William A. Humenuk,
Trustee $3,396 0 0 $29,600
</TABLE>
INVESTMENT ADVISER
CONTROL OF ADVISER
Hanson Investment Management Company 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 ____ 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.
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:
Hanson Equity Portfolio............................0.70%
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
7
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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 effect
principal transactions with dealers 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 refer clients to the Adviser. During
the fiscal years ended April 30, 1995 and April 30, 1996, the entire Fund paid
brokerage commissions of approximately $15,000 and $39,000, respectively.
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.
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 were 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).
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:
8
<PAGE>
(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 - unions Cmeasure 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.
(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.
9
<PAGE>
(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 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 executive office is located
at One International Place, 44th Floor, 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
10
<PAGE>
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. Currently, the Fund is offering shares of seven
Portfolios.
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/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 vote.
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.
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.
11
<PAGE>
Except for transactions the Portfolio has identified as hedging
transactions, in general each Portfolio is required for Federal income tax
purposes to recognize as income for the taxable year its net unrealized gains
and losses on some forward currency and some 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 character of the payment.
12
<PAGE>
PART B
UAM FUNDS
IRC ENHANCED INDEX PORTFOLIO
INSTITUTIONAL CLASS SHARES
STATEMENT OF ADDITIONAL INFORMATION
August 28, 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 IRC
Enhanced Index Portfolio (the "Portfolio") Institutional Class Shares dated
August 28, 1996. To obtain the Prospectus, please call the UAM Funds Service
Center:
1-800-638-7983
Table of Contents
<TABLE>
<CAPTION>
Page
----
<S> <C>
Purchase of Shares............................................ 2
Redemption of Shares.......................................... 2
Shareholder Services.......................................... 3
Investment Limitations........................................ 3
Management of the Fund........................................ 4
Investment Adviser............................................ 6
Portfolio Transactions........................................ 7
Administrative Services....................................... 7
Performance Calculations...................................... 7
General Information........................................... 10
Federal Taxes................................................. 11
Financial Statements.......................................... 11
</TABLE>
<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 $2,500 with certain
exceptions to the minimums may be determined from time to time by the officers
of the Fund. The minimum for any subsequent investment is $100. 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: Labor Day, September 2, 1996; Thanksgiving Day, November 28,
1996; Christmas Day, December 25, 1996; New Year's Day, January 1, 1997;
Presidents, Day, February 17, 1997; Good Friday, March 28, 1997; Memorial Day,
May 26, 1997; and Independence Day, July 4, 1997.
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 "Valuation of Shares", 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 "Sub-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 Sub-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.
2
<PAGE>
SHAREHOLDER SERVICES
The following supplements the information set forth in the Portfolio's
Prospectus under the heading "BUYING, SELLING AND EXCHANGING SHARES":
EXCHANGE PRIVILEGE
Institutional Class Shares of the Portfolio may be exchanged for any
other Institutional Class Shares of a Portfolio included in 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 Portfolio's
Prospectus.) Exchange requests should be made by calling the Fund (1-800-638-
7983) or by writing to UAM Funds Trust, 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 wazzu 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 this time will be processed on
the next business day. Neither the Fund nor the Sub-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 Fund's Board of Trustees
to assure that such exchanges do not disadvantage the Fund and its shareholders.
For Federal income tax purposes an exchange between Funds 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 Investment Company Act of 1940, as amended, (the "1940 Act")) of
thethe 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
<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) purchase on margin or sell short;
(6) 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;
(7) 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;
(8) invest for the purpose of exercising control over management of
any company; and
(9) write or acquire options or interests in oil, gas or other
mineral exploration or development programs.
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
1140 Avenue of the Fund; President of Regis Retirement Plan
Americas Services since 1993; Former President of UAM
New York, NY 10036 Fund Distributors, Inc.; Formerly
Age 44 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
Meredith, NH 03253 Great Island Investment Company, Inc.;
Age 67 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
Age 81 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,
Baltimore, MD 21201 Inc.; Chairman of the Board of Chektec
Age 48 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
Age 54
* These people are deemed to be "interested persons" of the Fund as
that term is defined in the 1940 Act.
4
<PAGE>
NORTON H. REAMER* Trustee, President and Chairman of the Fund;
One International Place President, Chief Executive and a Director
Boston, MA 02110 of United Asset Management Corporation;
Age 60 Director, Partner or Trustee of each of the
Investment Companies of the Eaton Vance
Group of Mutual Fund
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
Age 53 Chief Executive Officer of H. T. Investors,
Inc., formerly a subsidiary of DSI.
WILLIAM H. PARK* Vice President of the Fund; Executive Vice
One International Place President and Chief Financial Officer of
Boston, MA 02110 United Asset Management Corporation.
Age 49
GARY L. FRENCH Treasurer of the Fund; President and Chief
211 Congress Street Executive Officer of UAM Fund Services,
Boston, MA 02110 Inc;President of UAM Fund Distributors, Inc;
Age 45 formerly Vice President-Operations
Development and Control of Fidelity
Investment Institutional Services from
February 1995 to August 1995; Treasurer of
the Fidelity Group of Funds from 1991 to
February 1995.
MICHAEL E. DEFAO* Secretary of the Fund, Vice President and
211 Congress Street General Counsel of UAM Fund Services, Inc.,
Boston, MA 02110 formerly an Associate of Ropes & Gray (a law
Age 28 firm) from 1993 to February 1995.
ROBERT R. FLAHERTY* Assistant Treasurer of the Fund; Vice
211 Congress Street President of UAM Fund Services, Inc.
Boston, MA 02110 formerly Manager of Fund Administration and
Age 32 Compliance of the Sub-Administrator
from March 1995 to July 1996; formerly
Senior Manager of Deloitte & Touche LLP from
1985 to 1995.
KARL O. HARTMANN* Assistant Secretary of the Fund; Senior Vice
73 Tremont Street President, Secretary and General Counsel of
Boston, MA 02108 Administrator; Senior Vice President,
Age 41 Secretary and General Counsel of Leland,
O'Brien, Rubinstein Associates, Inc., from
November 1990 to November 1991.
* These people are deemed to be "interested persons" 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 Sub-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, 1996.
5
<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 $3,396 0 0 $29,600
J. Edward Day,
Trustee $3,396 0 0 $29,600
Philip D. English,
Trustee $3,396 0 0 $29,600
William A. Humenuk,
Trustee $3,396 0 0 $29,600
</TABLE>
PRINCIPAL HOLDERS OF SECURITIES
As of July 31, 1996, the following persons or organizations held of
record 5% or more of the shares of a Portfolio:
IRC Enhanced Index Portfolio: Hartnat & Co., F/B/O Nana Regional,
Attn. Corp. Actions, P.O. Box 4044, Boston, MA, 41.8%*; Hartnat & Co., F/B/O
Coca Cola, Attn. Corp. Actions, P.O. Box 4044, Boston, MA, 23.1%*; Hartnat &
Co., F/B/O Nana Marriott, Attn. Corp. Actions, P.O. Box 4044, Boston, MA, 16%*;
Hartnat & Co., F/B/O Nana Corporate, Attn. Corp. Actions, P.O. Box 4044, Boston,
MA, 9%*; and Hartnat & Co., F/B/O Nana Aggressive Attn. Corp. Actions, P.O. Box
4044, Boston, MA, 6.7%*.
The persons or organizations listed above as owning 25% or more of the
outstanding shares of the Portfolio may be presumed to "control" ( as that term
is defined in the 1940 Act) the 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 the Portfolio.
___________
* Denotes shares held by a trustee trustee or other fiduciary for which
beneficial ownership is disclaimed or presumed disclaimed.
INVESTMENT ADVISER
CONTROL OF ADVISER
Investment Research Company 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 42 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
6
<PAGE>
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 Fund's, Inc., a registered investment company.
ADVISORY FEES
As compensation for services rendered by the Adviser under the
Investment Advisory Agreements, 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:
IRC Enhanced Index Portfolio....................... 0.70%
From January 23, 1996 (date of commencement) to April 30, 1996, the
IRC Enhanced Index Portfolio paid advisory fees of $0. During this period, the
Adviser voluntarily waived advisory fees of $9,000. Until further notice, the
Adviser has voluntarily agreed to waive all or a portion of its advisory fees
and to assume operating expenses otherwise payable by the Portfolio, if
necessary, in order to keep the Portfolio's total annual operating expenses from
exceeding 2.50% of average daily net assets.
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 effect
principal transactions with dealers 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 refer clients to the Adviser. During
the fiscal years ended April 30, 1995 and April 30, 1996, the entire Fund paid
brokerage commissions of approximately $15,000 and $39,000, respectively.
Some securities considered for investment by the Portfolio may also be
appropriate for other clients served by the Adviser. If a purchase or sale of
securities is 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.
ADMINISTRATIVE SERVICES
For the period ended April 30, 1996, administrative services fees paid
to the Sub-Administrator by the IRC Enhanced Index Portfolio totaled $7,929. For
the period April 15, 1996 to April 30, 1996, UAM Fund Services, Inc. earned
$1,071 from the IRC Enhanced Index Portfolio. The services provided by the
Administrator and the Sub-Administrator and the current fees payable to both are
described in the Portfolio's Prospectus.
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
7
<PAGE>
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.
A yield was 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 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.
The cumulative total rate of return for the IRC Enhanced Index
Portfolio from inception on January 23, 1996 to the date of the Financial
Statements, included herein, is 3.20%.
This figure was 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).
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.
8
<PAGE>
(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.
(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 LONG-TERM Treasury Bond - is composed of all bonds covered
by the Lehman 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 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
9
<PAGE>
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 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 executive office is located
at One International Place, 44th Floor, 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. Currently, the Fund
is offering shares of seven Portfolios.
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.
10
<PAGE>
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 Portfolio 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.
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.
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 or securities or other related income derived with respect to its
investing in stock or securities. 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 or securities held less than
three months.
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 of the IRC Enhanced Index Portfolio for the
fiscal year ended April 30, 1996, and the Financial Highlights which appear in
the Portfolio's 1996 Annual Report to Shareholders and the report thereon of
Price Waterhouse LLP, the Fund's independent accountants, also appearing
therein, which were previously filed electronically with the Commission
(Accession Number: 0000950109-96-004190), are incorporated by reference.
11
<PAGE>
PART B
UAM FUNDS TRUST
MJI INTERNATIONAL EQUITY PORTFOLIO
INSTITUTIONAL CLASS SHARES
SERVICE CLASS SHARES
STATEMENT OF ADDITIONAL INFORMATION
AUGUST 28, 1996
This Statement is not a Prospectus but should be read in conjunction
with the Prospectuses of the UAM Funds Trust (the "UAM Funds" or the "Fund") for
the MJI International Equity Portfolio dated August 28, 1996 relating to the
Institutional Class Shares, and the Prospectus dated August 28, 1996 relating to
the Institutional Service Class Shares (the "Service Class Shares"). To obtain a
Prospectus, please call UAM Funds Service Center:
1-800-638-7983
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Investment Objectives and Policies................................ 2
Purchase of Shares................................................ 8
Redemption of Shares.............................................. 8
Shareholder Services.............................................. 9
Investment Limitations............................................ 10
Management of the Fund............................................ 11
Investment Adviser................................................ 13
Service and Distribution Plans.................................... 14
Portfolio Transactions............................................ 15
Administrative Services........................................... 16
Performance Calculations.......................................... 16
General Information............................................... 19
Federal Taxes..................................................... 20
Financial Statements.............................................. 21
Appendix - Description of Securities and Ratings.................. A-1
</TABLE>
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The following policies supplement the investment objective and
policies of the MJI International Equity Portfolio Portfolio (the "Portfolio")
as set forth in the Prospectuses for the Institutional Class and Service Class
Shares of 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, thethe 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
thethe Portfolio. TheThe 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 thethe Portfolio at any
time, and (d) thethe Portfolio receives reasonable interest on the loan (which
may include thethe 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 B 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. The Portfolio may also enter into forward
foreign currency exchange contracts to hedge against its foreign currency
movements. These portfolio strategies are commonly referred to as derivative
investments. 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, debt or
currency market occur.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
The U.S. dollar value of the assets of the Portfolio may be affected
favorably or unfavorably by changes in foreign currency exchange rates and
exchange control regulations, and the Portfolio may incur costs in connection
with conversions between various currencies. The Portfolio will conduct its
foreign currency exchange transactions either on a spot (i.e., cash) basis at
the spot rate prevailing in the foreign currency exchange market, or through
entering into forward contracts to purchase or sell foreign currencies. A
forward foreign currency exchange contract involves an obligation to purchase or
sell a specific currency at a future date, which may be any fixed number of days
from the date of the contract agreed upon by the parties, at a price set at the
time of the contract. These contracts are traded in the interbank market and are
conducted directly between currency traders (usually large commercial banks) and
their customers. A forward contract generally has no deposit requirement, and no
commissions are charged at any stage for such trades.
2
<PAGE>
The Portfolio may enter into forward foreign currency exchange
contracts in several circumstances. When the Portfolio enters into a contract
for the purchase or sale of a security denominated in a foreign currency, or
when the Portfolio anticipatess the receipt in a foreign currency of dividends
or interest payments on a security which it holds, the Portfolio may desire to
"lock-in" the U.S. dollar price of the security or the U.S. dollar equivalent of
such dividend or interest payment, as the case may be. By entering into a
forward contract for a fixed amount of dollars, for the purchase or sale of the
amount of foreign currency involved in the underlying transactions, the
Portfolio will be able to protect itself against a possible loss resulting from
an adverse change in the relationship between the U.S. dollar and the subject
foreign currency during the period between the date on which the security is
purchased or sold, or on which the dividend or interest payment is declared, and
the date on which such payments are made or received.
Additionally, when the Portfolio anticipatess that the currency of a
particular foreign country may suffer a substantial decline against the U.S.
dollar, itit may enter into a a forward contract for a fixed amount of dollars
to sell the amount of foreign currency approximating the value of some or all of
the Portfolio's securities denominated in such foreign currency. The precise
matching of the forward contract amounts and the value of the securities
involved generally will not be possible since the future value of securities in
foreign currencies will change as a consequence of market movements in the value
of these securities between the date on which the forward contract is entered
into and the date it matures. The projection of short-term currency market
movement is extremely difficult and the successful execution of a short-term
hedging strategy is highly uncertain. The Portfolio doeses not intend to enter
into such forward contracts to protect the value of portfolio securities on a
regular or continuous basis. The Portfolio will not enter into such forward
contracts or maintain a net exposure to such contracts where the consummation of
the contracts would obligate the Portfolio to deliver an amount of foreign
currency in excess of the value of the Portfolio's securities or other assets
denominated in that currency.
Under normal circumstances, consideration of the prospect for currency
parities will be incorporated into the long-term investment decisions made with
regard to overall diversification strategies. However, the management of the
Fund believes that it is important to have the flexibility to enter into such
forward contracts when it determines that the best interests of the performance
of the Portfolio will thereby be served. The Fund's Custodian will place cash,
U.S. government securities, or high-grade debt securities into a segregated
account in an amount equal to the value of the Portfolio's total assets
committed to the consummation of forward foreign currency exchange contracts. If
the value of the securities placed in the segregated account declines,
additional cash or securities will be placed in the account on a daily basis so
that the value of the account will be equal to the amount of the Portfolio's
commitments with respect to such contracts.
The Portfolio generally will not enter into a forward contract with a
term of greater than one year. At the maturity of a forward contract, the
Portfolio may either sell the portfolio security and make delivery of the
foreign currency, or it may retain the security and terminate its contractual
obligation to deliver the foreign currency by purchasing an "offsetting"
contract with the same currency trader obligating it to purchase, on the same
maturity date, the same amount of the foreign currency.
It is impossible to forecast with absolute precision the market value
of a particular portfolio security at the expiration of the contract.
Accordingly, it may be necessary for the Portfolio to purchase additional
foreign currency on the spot market (and bear the expense of such purchase) if
the market value of the security is less than the amount of foreign currency
that the Portfolio isis obligated to deliver and if a decision is made to sell
the security and make delivery of the foreign currency.
If the Portfolio retainss the portfolio security and engagess in an
offsetting transaction, the Portfolio will incur a gain or loss (as described
below) to the extent that there has been movement in forward contract prices.
Should forward prices decline during the period between the Portfolio entering
into a forward contract for the sale of a foreign currency and the date it
enters into an offsetting contract for the purchase of the foreign currency, the
Portfolio will realize a gain to the extent that the price of the currency it
has agreed to sell exceeds the price of the currency it has agreed to purchase.
Should forward prices increase, the Portfolio would suffer a loss to the extent
that the price of the currency it has agreed to purchase exceeds the price of
the currency it has agreed to sell.
The Portfolio's dealings in forward foreign currency exchange
contracts will be limited to the transactions described above. Of course, the
Portfolio isis not required to enter into such transactions with regard to their
foreign currency-denominated securities. It also should be realized that this
method of protecting the value of portfolio securities against a decline in the
value of a currency does not eliminate fluctuations in the underlying prices of
the securities. It simply establishes a rate of exchange which one can achieve
at some future point in time. Additionally, although such contracts tend to
minimize the risk of loss due to a decline in the value of the hedged currency,
at the same time, they tend to limit any potential gain which might result
should the value of such currency increase.
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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
expectss to earn interest income on itsits 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 intendss 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 expectss 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 any particular futures contract at any specific time. Thus, it may not
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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
hashas insufficient cash, itit 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 isis subject to the risks of loss frequently associated with
futures transactions. TheThe 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 thethe 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 thethe 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, thethe 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 effectss 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. TheThe Portfolio writes only covered options, which means
that so long as the Portfolio isis obligated as the writer of the option itit
will, in a segregated account with itsits 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.
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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, thethe 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.
OPTIONS ON FOREIGN CURRENCIES
The Portfolio may purchase and write options on foreign currencies for
hedging purposes in a manner similar to that in which futures contracts on
foreign currencies, or forward contracts, will be utilized. For example, a
decline in the dollar value of a foreign currency in which portfolio securities
are denominated will reduce the dollar value of such securities, even if their
value in the foreign currency remains constant. In order to protect against such
diminutions in the value of portfolio securities, thethe Portfolio may purchase
put options on the foreign currency. If the value of the currency does decline,
thethe Portfolio will have the right to sell such currency for a fixed amount in
dollars and will thereby offset, in whole or in part, the adverse effect on its
portfolio which otherwise would have resulted.
Conversely, where a rise in the dollar value of a currency in which
securities to be acquired are denominated is projected, thereby increasing the
cost of such securities, thethe Portfolio may purchase call options thereon. The
purchase of such options could offset, at least partially, the effects of the
adverse movements in exchange rates. As in the case of other types of options,
however, the benefit to the Portfolio deriving from purchases of foreign
currency options will be reduced by the amount of the premium and related
transaction costs. In addition, where currency exchange rates do not move in the
direction or to the extent anticipated, the Portfolio could sustain losses on
transactions in foreign currency options which would require it to forego a
portion or all of the benefits of advantageous changes in such rates.
The Portfolio may write options on foreign currencies for the same
types of hedging purposes. For example, where thethe Portfolio anticipates a
decline in the dollar value of foreign currency denominated securities due to
adverse fluctuations in exchange rates it could, instead of purchasing a put
option, write a call option on the relevant currency. If the anticipated decline
occurs, the option will most likely not be exercised, and the diminution in
value of portfolio securities will be offset by the amount of the premium
received.
Similarly, instead of purchasing a call option to hedge against an
anticipated increase in the dollar cost of securities to be acquired, thethe
Portfolio could write a put option on the relevant currency which, if rates move
in the manner projected, will expire unexercised and allow thethe Portfolio to
hedge such increased cost up to the amount of the premium. As in the case of
other types of options, however, the writing of a foreign currency option will
constitute only a partial hedge up to the amount of the premium, and only if
rates move in the expected direction. If this does not occur, the option may be
exercised and the Portfolio would be required to purchase or sell the underlying
currency at a loss which may not be offset by the amount of the premium. Through
the writing of options on foreign currencies, the Portfolio also may be required
to forego all or a portion of the benefits which might otherwise have been
obtained from favorable movements in exchange rates.
The Portfolio intends to write covered call options on foreign
currencies. A call option written on a foreign currency by thethe Portfolio is
"covered" if thethe Portfolio owns the underlying foreign currency covered by
the call or has an absolute and immediate right to acquire that foreign currency
without additional cash consideration (or for additional cash consideration held
in a segregated account by the Custodian) upon conversion or exchange of other
foreign currency held in its portfolio. A call option is also covered if thethe
Portfolio has a call on the same foreign currency and in the same principal
amount as the call written where the exercise price of the call held (a) is
equal to or less than the exercise price of the call written or (b) is greater
than the exercise price of the call written if the difference is maintained by
thethe Portfolio in cash, U.S. government securities or other high grade liquid
debt securities in a segregated account with the Custodian.
The Portfolio also intendss to write call options on foreign
currencies that are not covered for cross-hedging purposes. A call option on a
foreign currency is for cross-hedging purposes if it is not covered but is
designed to provide a hedge against a decline in the U.S. dollar value of a
security which the Portfolio ownss or hashas the right to acquire and which isis
denominated in the currency underlying the option due to an adverse change in
the exchange rate. In such circumstances, the Portfolio will collateralize the
option by maintaining in a segregated account with the Custodian, cash or U.S.
government securities or other
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<PAGE>
high grade liquid debt securities in an amount not less than the value of the
underlying foreign currency in U.S. dollars marked to market daily.
RISKS OF OPTIONS ON FUTURES CONTRACTS, FORWARD CONTRACTS AND OPTIONS ON FOREIGN
CURRENCIES
Options on foreign currencies and forward contracts are not traded on
contract markets regulated by the CFTC or (with the exception of certain foreign
currency options) by the Commission. To the contrary, such instruments are
traded through financial institutions acting as market-makers, although foreign
currency options are also traded on certain national securities exchanges, such
as the Philadelphia Stock Exchange and the Chicago Board Options Exchange,
subject to the regulation of the Commission. Similarly, options on currencies
may be traded over-the-counter. In an over-the-counter trading environment, many
of the protections afforded to exchange participants will not be available. For
example, there are no daily price fluctuation limits, and adverse market
movements could therefore continue to an unlimited extent over a period of time.
Although the purchase of an option cannot lose more than the amount of the
premium plus related transaction costs, this entire amount could be lost.
Moreover, the option writer and a trader of forward contracts could lose amounts
substantially in excess of their initial investments, due to the margin and
collateral requirements associated with such positions.
Options on foreign currencies traded on national securities exchanges
are within the jurisdiction of the Commission, as are other securities traded on
such exchanges. As a result, many of the protections provided to traders on
organized exchanges will be available with respect to such transactions. In
particular, all foreign currency option positions entered into on a national
securities exchange are cleared and guaranteed by the Options Clearing
Corporation ("OCC"), thereby reducing the risk of counterparty default.
Furthermore, a liquid secondary market in options traded on a national
securities exchange may be more readily available than in the over-the-counter
market, potentially permitting the Portfolio to liquidate open positions at a
profit prior to exercise or expiration, or to limit losses in the event of
adverse market movements.
The purchase and sale of exchange-traded foreign currency options,
however, is subject to the risks of the availability of a liquid secondary
market described above, as well as the risks regarding adverse market movements,
margining of options written, the nature of the foreign currency market,
possible intervention by governmental authorities and the effect of other
political and economic events. In addition, exchange-traded options of foreign
currencies involve certain risks not presented by the over-the-counter market.
For example, exercise and settlement of such options must be made exclusively
through the OCC, which has established banking relationships in applicable
foreign countries for this purpose. As a result, the OCC may, if it determines
that foreign governmental restrictions or taxes would prevent the orderly
settlement of foreign currency option exercises, or would result in undue
burdens on the OCC or its clearing member, impose special procedures on exercise
and settlement, such as technical changes in the mechanics of delivery of
currency, the fixing of dollar settlement prices or prohibitions, on exercise.
In addition, futures contracts, options on futures contracts, forward
contracts and options of foreign currencies may be traded on foreign exchanges.
Such transactions are subject to the risk of governmental actions affecting
trading in, or the prices of, foreign currencies or 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 a trading decision, (iii) delays in the
Portfolio's ability to act upon economic events occurring in foreign markets
during non-business 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.
INTEREST RATE SWAP TRANSACTIONS
The Portfolio may enter into swap contracts which are also commonly
referred to as derivative investments. A swap is an agreement to exchange the
return generated by one instrument for the return generated by another
instrument. The payment streams are calculated by reference to a specific index
and agreed upon notional amount. The term "specified index" includes fixed
interest rates, total return on interest rate indices and fixed income indices,
(as well as amounts derived from arithmetic operations on these indices). For
example, thethe Portfolio may agree to swap the return generated by a fixed-
income index for the return generated by a second fixed-income index.
The Portfolio will usually enter into swaps on a net basis, i.e., the
two payment streams are netted out in a cash settlement on the payment date or
dates specified in the instrument, with the Portfolio receiving or paying, as
the case may be, only the net amount of the two payments. TheThe Portfolio's
obligations under a swap agreement will be accrued daily (offsetting against any
amounts owing to the Portfolio) and any accrued but unpaid net amounts owed to a
swap counterparty will be
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<PAGE>
covered by the maintenance of a segregated account consisting of cash, U.S.
government securities, or high grade debt obligations, to avoid any potential
leveraging of the Portfolio. Since swaps will be entered into for good faith
hedging purposes, the Adviser and the Fund believe such obligations do not
constitute "senior securities" under the 1940 Act and, accordingly, will not
treat them as being subject to its borrowing restrictions.
Interest rate swaps do not involve the delivery of securities, other
underlying assets, or principal. Accordingly, the risk of loss with respect to
interest rate swaps is limited to the net amount of interest payments that
thethe Portfolio is contractually obligated to make. If the other party to the
interest rate swap defaults, the Portfolio's risk of loss consists of the net
amount of interest payments that thethe Portfolio is contractually entitled to
receive. If there is a default by the counterparty, thethe Portfolio may have
contractual remedies pursuant to the agreements related to the transaction. The
swap market has grown substantially in recent years with a large number of banks
and investment banking firms acting both as principals and as agents utilizing
standardized swap documentation. As a result, the swap market has become
relatively liquid.
PURCHASE OF SHARES
Both classes of shares of the Portfolios 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 for the Portfolio is $2,500. Certain
exceptions to the minimums may be determined from time to time by the Officers
of the Fund. The initial investment minimum for IRA accounts is $500. The
initial investment for spousal IRA accounts is $250. The minimum for any
subsequent investment is $100. 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: Labor Day, September 2, 1996;
Thanksgiving Day, November 28, 1996; Christmas Day, December 25, 1996; New
Year's Day, January 1, 1997; President's Day, February 17, 1997; Good Friday,
March 28, 1997; Memorial Day, May 26, 1997, and Independence Day, July 4,
1997.
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.
The Adviser may compensate affiliated broker-dealer subsidiaries of
United Asset Management Corporation, out of its profits, for referring investors
to thethe Portfolio and, in certain instances, furnishing information liaison
services with respect to such investors. Such compensation would be based upon
the advisory fees payable (without regard to any expense limitation in effect at
the time) in respect of assets attributable to the referral. If liaison services
are included, the rate would be up to 25% in the first year and up to 15% each
year thereafter; otherwise, the rate would be up to 30% in the first year, 20%
for the second year and 10% for each remaining year up to a total of 5 years.
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 a 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 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 thethe 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.
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SIGNATURE GUARANTEES
To protect your account, the Fund and Chase Global Funds Services
Company (the "Sub-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 Sub-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 Portfolio's
Prospectus under the heading "BUYING, SELLING AND EXCHANGING SHARES":
EXCHANGE PRIVILEGE
Institutional Class Shares of the MJI International Equity Portfolio
may be exchanged for any other Institutional Class Shares of a Portfolio
included in 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 MJI International Equity Portfolio Institutional Class Shares
Prospectus). Service Class Shares of the MJI International Equity Portfolio may
be exchanged for any other Service Class Shares of a Portfolio included in the
UAM Funds. (For 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 Trust, 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 objective 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 this time will be processed on
the next business day. Neither the Fund nor the Sub-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 Fund's Board of Trustees
to assure that such exchanges do not disadvantage the Fund and its shareholders.
For Federal income tax purposes an exchange between Funds 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.
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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 each
Prospectus of the Portfolio. 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 thethe 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
thethe Portfolio's investment limitations. Investment limitations (1), (2), (3)
and (4) are classified as fundamental. TheThe Portfolio's fundamental investment
limitations cannot be changed without approval by a "majority of the outstanding
shares" (as defined in the 1940 Act) of thethe Portfolio. TheThe 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 or bond 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 stock or
bond 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 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) invest in warrants, valued at the lower of cost or market, in
excess of 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 that are not
listed on the New York or American Stock Exchanges. Warrants
attached to securities are not subject to this limitation.
10
<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
1140 Avenue of the Fund; President of Regis Retirement Plan
Americas Services since 1993; Former President of UAM
New York, NY 10036 Fund Distributors, Inc.; Formerly
Age 44 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
Meredith, NH 03253 Great Island Investment Company, Inc.;
Age 67 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
Age 81 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,
Baltimore, MD 21201 Inc.; Chairman of the Board of Chektec
Age 48 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
Age 54
NORTON H. REAMER* Trustee, President and Chairman of the Fund;
One International Place President, Chief Executive and a Director
Boston, MA 02110 of United Asset Management Corporation;
Age 60 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
Age 53 Chief Executive Officer of H. T. Investors,
Inc., formerly a subsidiary of DSI.
WILLIAM H. PARK* Vice President of the Fund; Executive Vice
One International Place President and Chief Financial Officer of
Boston, MA 02110 United Asset Management Corporation.
Age 49
* These people are deemed to be "interested persons" of the Fund as
that term is defined in the 1940 Act.
11
<PAGE>
GARY L. FRENCH Treasurer of the Fund; President and Chief
211 Congress Street Executive Officer of UAM Fund Services,
Boston, MA 02110 Inc.; President of UAM Fund Distributors,
Age 45 Inc.; formerly Vice President-Operations
Development and Control of Fidelity
Investment Institutional Services from
February 1995 to August 1995; Treasurer of
the Fidelity Group of Funds from 1991 to
February 1995.
MICHAEL E. DEFAO* Secretary of the Fund, Vice President and
211 Congress Street General Counsel of UAM Fund Services, Inc.,
Boston, MA 02110 formerly an Associate of Ropes & Gray (a law
Age 28 firm) from 1993 to February 1995.
ROBERT R. FLAHERTY* Assistant Treasurer of the Fund ; Vice
211 Congress Street President UAM Fund Services, Inc.; formerly
Boston, MA 02110 Manager of Fund Administration and
Age 32 Compliance of the Sub-Administrator from
March 1995 to July 1996; formerly Senior
Manager of Deloitte & Touche LLP from 1985
to 1995.
KARL O. HARTMANN* Assistant Secretary of the Fund; Senior Vice
73 Tremont Street President, Secretary and General Counsel of
Boston, MA 02108 Administrator; Senior Vice President,
Age 41 Secretary and General Counsel of Leland,
O'Brien, Rubinstein Associates, Inc., from
November 1990 to November 1991.
* These people are deemed to be "interested persons" 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 and UAM Funds 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 Sub-Administrator and receive no
compensation from the Fund. The following table shows aggregate compensation
paid to each of the Fund's unaffiliated Trustees by the Fund and total
compensation paid by the Fund, UAM Funds and AEW Commercial Mortgage Securities
Fund, Inc. (collectively the "Fund Complex") in the fiscal year ended April 30,
1996.
<TABLE>
<CAPTION>
COMPENSATION TABLE
========================================================================================================
(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 $3,396 0 0 $29,600
J. Edward Day,
Trustee $3,396 0 0 $29,600
Philip D. English,
Trustee $3,396 0 0 $29,600
William A. Humenuk,
Trustee $3,396 0 0 $29,600
</TABLE>
12
<PAGE>
PRINCIPAL HOLDERS OF SECURITIES
As of July 31, 1996, the following persons or organizations held of
record 5% or more of the shares of a Portfolio:
MJI International Equity Portfolio Institutional Class Shares: Hartnat
& Co., F/B/O Veco, Attn. Corp. Actions, P.O. Box 4044, Boston, MA, 42%*; Hartnat
& Co., F/B/O Barrow Hanley, Attn. Corp. Actions, P.O. Box 4044, Boston, MA,
7.8%*; and Hartnat & Co., F/B/O Lillick & Charles, Attn. Corp. Actions, P.O. Box
4044, Boston, MA, 7.3%*.
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.
*Denotes shares held by a trustee or other fiduciary for which beneficial
ownership is disclaimed or presumed disclaimed.
INVESTMENT ADVISER
CONTROL OF ADVISER
Murray Johnstone International Ltd., through its parent, UAM UK
Holdings, 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 __ 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, a registered investment company.
PHILOSOPHY AND STYLE
The Adviser's investment philosophy is a value orientation for
country, currency and stock selection. The Adviser's management structure
centers around regional research teams which are specialized by geography. The
individuals within each team are responsible for conducting research within each
region as well as identifying particular stocks for possible inclusion within
portfolios. On-site, fundamental research is a primary component of the
evaluation process.
REPRESENTATIVE INSTITUTIONAL CLIENTS
As of the date of this Statement of Additional Information, the
Adviser's representative institutional clients included: [Siemens, Levitz,
Nebraska Public Power, United Methodist and Franciscan Sisters].
In compiling this client list, the Adviser used objective criteria
such as account size, geographic location and client classification. The Adviser
did not use any performance based criteria. It is not known whether these
clients approve or disapprove of the Adviser or the advisory services provided.
ADVISORY FEES
As compensation for services rendered by the Adviser under the
Investment Advisory Agreements, 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:
MJI International Equity Portfolio............................ 0.75%
13
<PAGE>
For the period from September 16, 1994 (date of commencement) to April
30, 1995, and for the fiscal year ended April 30, 1996, the MJI International
Equity Portfolio paid advisory fees of $0 and $0. The Adviser voluntarily waived
advisory fees of $10,000 for the period ended April 30, 1995 and $54,000 for the
fiscal year ended April 30, 1996. Until further notice, the Adviser has
voluntarily agreed to waive its advisory fees and to assume as the Adviser's own
expense certain operating expenses payable by the Portfolio, if necessary, in
order to keep the Portfolio's total annual operating expenses from exceeding
1.50%.
SERVICE AND DISTRIBUTION PLANS
As stated in the Portfolio's Service Class Shares Prospectus, UAM
Funds Distributors, Inc. (the "Distributor) may enter into agreements with
broker-dealers and other financial institutions ("Service Agents"), pursuant to
which they will provide administrative support services to Service Class
shareholders who are their customers ("Customers") in consideration of the
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 Agent 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 Agent 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 Agents and the purposes for which the expenditures were made. In
addition, arrangements with Service Agents 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 company as defined in the 1940 Act and have no
direct or indirect financial interest in such arrangements.
The Board of Trustees has approved the arrangements with Service
Agents based on information provided by the Fund's service contractors that
there is a reasonable likelihood that the arrangements will benefit the Fund and
its shareholders 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 the Fund's arrangements with Service
Agents 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 Agents 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 Company will be committed to the discretion of such non-
interested Trustees.
14
<PAGE>
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 .50% of the average daily net assets represented by the Service
Class. While the current fee which will be payable under the Service Plan and
Distribution Plan has been set at .25%, the Plan permit 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. The MJI International Equity Portfolio Service Class
Shares have not been offered prior to the date of this Statement.
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 the 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 NASD 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.
PORTFOLIO TRANSACTIONS
The Investment Advisory Agreements authorize 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 Agreements. 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
15
<PAGE>
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 effect
principal transactions with dealers 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 refer clients to the Adviser. During
the fiscal years ended April 30, 1995 and April 30, 1996, the entire Fund paid
brokerage commissions of approximately $15,000 and $39,000, respectively.
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 a 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.
ADMINISTRATIVE SERVICES
For the period ended April 30, 1995, administrative services fees paid
to the Sub-Administrator by the MJI International Equity Portfolio totaled
$26,000. The basis of the fees paid to the Sub-Administrator for the 1995 fiscal
year was as follows: the Fund paid a monthly fee for its services which on an
annualized basis equaled 0.20% of the first $200 million in combined assets;
plus 0.12% of the next $800 million in combined assets; plus 0.08% on assets
over $1 billion but less than $3 billion; plus 0.06% on assets over $3 billion.
The fees were allocated among the Portfolios on the basis of their relative
assets and were subject to a designated minimum fee schedule per Portfolio,
which ranged from $2,000 per month upon inception of a Portfolio to $70,000
annually after two years. For the period ended April 30, 1996, administrative
services fees paid to the Sub-Administrator by the MJI International Equity
Portfolio totaled $69,866. For the period April 15, 1996 to April 30, 1996, UAM
Fund Services, Inc. earned $3,134 from the MJI International Equity Portfolio as
Administrator. The services provided by the Administrator and Sub-Administrator
and the current fees payable to both are described in the Portfolio's
Prospectuses.
PERFORMANCE CALCULATIONS
PERFORMANCE
The Portfolio may from time to time quote various performance figures
to illustrate the past performance of each class of the Portfolio. 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 quotation 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 a Portfolio's
investment. The current yield of a 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. Since Service Class Shares of the Portfolio
bear additional service and distribution expenses, the current yield of the
Service Class Shares of the Portfolio will generally be lower than that of
Institutional Class Shares.
A yield figure figure is obtained using the following formula:
Yield=2[(a-b+1)/6/-1]
---
cd
16
<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.
Service Class Shares of the MJI International Equity Portfolio were
not offered as of April 30, 1996. Accordingly, no yield figures are
available.
TOTAL RETURN
The average annual total return of a 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. Since Service Class Shares
of the Portfolio bear additional service and distribution expenses, the average
annual total return of the Service Class Shares of the Portfolio will generally
be lower than that of the Institutional Class Shares.
The average annual total rates of return for the MJI International
Equity Portfolio Institutional Class Shares from inception on September 16, 1994
to April 30, 1996, and for the one year period ended on the date of the
Financial Statements included herein are as follows:
<TABLE>
<CAPTION>
SEPTEMBER 16, 1994
TO YEAR ENDED
APRIL 30, 1996 APRIL 30, 1996
<S> <C> <C>
MJI International Equity Portfolio 1.98% 8.67%
</TABLE>
These figures are calculated according to the following formula:
P(1+T)=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).
Service Class Shares of the MJI International Equity Portfolio were
not offered as of April 30, 1996. Accordingly, no total return figures are
available.
COMPARISONS
To help investors better evaluate how an investment in a Portfolio 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.
17
<PAGE>
(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 dividends.
(c) The New York Stock Exchange composite or component indices - un-
managed 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, including North America.
(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 & Poors 500 Stock Index and 65%
Salomon Brothers High Grade Bond Index; all stocks
18
<PAGE>
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,
U.S. 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 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 executive office is
located at One International Place, 44th Floor, 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") of
shares of beneficial interest without further action by shareholders. Currently,
the Fund is offering shares of seven Portfolios.
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 Trust.
In the event of liquidation of the Trust, 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 Trust. 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.
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Shareholders of both Classes of the Fund's Portfolios 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. Both Institutional Class
and Service Class Shares represent an interest in the same assets of a Portfolio
and are identical in all respects except that the Service Class Shares bear
certain expenses related to shareholder servicing and the distribution of such
shares, and have exclusive voting rights with respect to matters relating to
such distribution expenditures.
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
The Fund's policy is to distribute substantially all of each
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 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
Prospectuses.
Any dividend or distribution paid shortly after the purchase of shares
of a 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 Prospectuses.
As set forth in the Prospectuses, 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 a 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.
FEDERAL TAXES
In order for thethe 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 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 thethe 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 thethe 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 thethe Portfolio has identified as hedging
transactions, in general each 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
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contracts which are intended to hedge against a change in the value of
securities held by thethe 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 thethe Portfolio's taxable year on futures
transactions). Such distribution will be combined with distributions of capital
gains realized on thethe Portfolio's other investments, and shareholders will be
advised as to the character of the payments.
FINANCIAL STATEMENTS
The Financial Statements for the MJI International Equity Portfolio
Institutional Class Shares for the fiscal year ended April 30, 1996 and the
Financial Highlights for the respective period presented which appear in the
Portfolio's 1996 Annual Report to Shareholders and the report thereon of Price
Waterhouse LLP,the Fund's independent accountants, also appearing therein, which
were previously filed electronically with the Commission (Accession Number:
0000950109-96-004190), are incorporated by reference.
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APPENDIX - DESCRIPTION OF SECURITIES AND RATINGS
DESCRIPTION OF CORPORATE BOND RATINGS
MOODY'S INVESTORS SERVICE, INC. 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 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 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
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PART B
UAM FUNDS
NEWBOLD'S EQUITY PORTFOLIO
INSTITUTIONAL CLASS SHARES
INSTITUTIONAL SERVICE CLASS SHARES
STATEMENT OF ADDITIONAL INFORMATION
AUGUST 28, 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 dated August 28, 1996 relating to the Institutional
Class Shares, and the Prospectus dated August 28, 1996 relating to the
Institutional Service Class Shares (the "Service Class Shares"). To obtain the
Prospectuses, please call the UAM Funds Service Center:
1-800-638-7983
Table of Contents
<TABLE>
<CAPTION>
Page
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<S> <C>
Investment Objective and Policies............................ 2
Purchase of Shares........................................... 5
Redemption of Shares......................................... 5
Shareholder Services......................................... 6
Investment Limitations....................................... 6
Management of the Fund....................................... 8
Investment Adviser........................................... 10
Service and Distribution Plans............................... 11
Portfolio Transactions....................................... 12
Administrative Services...................................... 13
Performance Calculations..................................... 13
General Information.......................................... 16
Financial Statements......................................... 18
Appendix - Description of Securities and Ratings............. A-1
</TABLE>
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INVESTMENT OBJECTIVE AND POLICIES
The following policies supplement the investment objective and
policies of the Newbold's Equity Portfolio as set forth in the Prospectuses for
the Institutional Class Shares and Service Class Shares of 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.
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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 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
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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 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
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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
Both Classes of 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 2,500
with certain exceptions as may be determined from time to by the officers of the
Fund. The initial investment minimum for IRA accounts is $500. The initial
investment for spousal IRA accounts is $250. The minimum for any subsequent
investment is $100. An order received in proper form prior to the 4:00 p.m.
close 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: Labor Day, September 2, 1996; Thanksgiving Day,
November 28, 1996; Christmas Day, December 25, 1996; New Years Day, January 1,
1997; Presidents Day, February 17, 1997; Good Friday, March 28, 1997; Memorial
Day, May 26, 1997; and Independence Day, July 4, 1997.
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 "Sub-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 Sub-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.
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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 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
in 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 Newbold's Equity Portfolio Institutional Class Shares Prospectus.) Service
Class Shares of the Newbold's Equity Portfolio may be exchanged for any other
Service Class Shares of a Portfolio included in the UAM Funds. (For 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.
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 objective 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 Sub-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 each
Prospectus of the Portfolio. 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:
6
<PAGE>
(1) 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 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.
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
1140 Avenue of the Fund; President of Regis Retirement Plan
Americas Services since 1993; Former President of UAM
New York, NY 10036 Fund Distributors, Inc.; Formerly
Age 44 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
Meredith, NH 03253 Great Island Investment Company, Inc.;
Age 67 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
Age 81 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,
Baltimore, MD 21201 Inc.; Chairman of the Board of Chektec
Age 48 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
Age 54
NORTON H. REAMER* Trustee, President and Chairman of the Fund
One International Place President, Chief Executive and a Director of
Boston, MA 02110 United Asset Management Corporation;
Age 60 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
Age 53 Chief Executive Officer of H. T. Investors,
Inc., formerly a subsidiary of DSI.
WILLIAM H. PARK* Vice President of the Fund; Executive Vice
One International Place President and Chief Financial Officer of
Boston, MA 02110 United Asset Management Corporation.
Age 49
*These people are deemed to be "interested persons" of the Fund as
that term is defined in the 1940 Act.
8
<PAGE>
GARY L. FRENCH Treasurer of the Fund; President and Chief
211 Congress Street Executive Officer of UAM Fund Services,
Boston, MA 02110 Inc.; President of UAM Fund Distributors,
Age 45 Inc.; formerly Vice President-Operations
Development and Control of Fidelity
Investment Institutional Services from
February 1995 to August 1995; Treasurer of
the Fidelity Group of Funds from 1991 to
February 1995.
MICHAEL E. DEFAO* Secretary of the Fund, Vice President and
211 Congress Street General Counsel of UAM Fund Services, Inc.,
Boston, MA 02110 formerly an Associate of Ropes & Gray (a law
Age 28 firm) from 1993 to February 1995.
ROBERT R. FLAHERTY* Assistant Treasurer of the Fund; Vice
211 Congress Street President of UAM Fund Services, Inc.;
Boston, MA 02110 formerly Manager of Fund Administration and
Age 32 Compliance of the Sub-Administrator from
March 1995 to July 1996; formerly Senior
Manager of Deloitte & Touche LLP from 1985
to 1995.
KARL O. HARTMANN* Assistant Secretary of the Fund; Senior Vice
73 Tremont Street President, Secretary and General Counsel of
Boston, MA 02108 Administrator; Senior Vice President,
Age 41 Secretary and General Counsel of Leland,
O'Brien, Rubinstein Associates, Inc., from
November 1990 to November 1991.
*These people are deemed to be "interested persons" 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 and 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 Funds 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, 1996.
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 $3,396 0 0 $29,600
J. Ed ard Day,
Trustee $3,396 0 0 $29,600
</TABLE>
9
<PAGE>
<TABLE>
<S> <C> <C>
Philip D. English, $3,396 0 0 $29,600
Trustee
William A. Humenuk, $3,396 0 0 $29,600
Trustee
</TABLE>
PRINCIPAL HOLDERS OF SECURITIES
As of July 31, 1996, the following persons or organizations held of
record 5% or more of the shares of a Portfolio:
Newbold's Equity Portfolio Institutional Class Shares: Bryce Douglas
Investment Limited Partnership, P.O. Box 672, Kimberton, PA, 14.6%; J. Coggins,
J.S. Grabowski, J. Conway and R. Weinberg, F/B/O Keystone Foods Corp., 401 City
Avenue, Suite 800, Bala Cynwyd, PA, 12.8%*; David G. Jones MD, Profit Sharing
Plan, 1860 Nottingham Road, Allentown, PA, 9.1%; Warren Pearlman Goldburgh, 7
Gregory Road, Lyme, PA, 7.5%, Joseph F. Rodgers MD, 1723 Sylvan Lane, Gladwyne,
PA, 7.3%; James D. Jamieson, P.O. Box 95, Valley Forge, PA, 6.9% and J.F.
McNamara, W.H. Park and N.H. Reamer, Trustees, F/B/O Newbold's Asset Mgmt.
Employees, 950 Haverford Road, Bryn Mawr, PA, 6.4%*.
The persons or organizations listed above as owning 25% or more of the
outstanding shares of the Portfolio may be presumed to "control" (as that term
is defined in the 1940 Act) the 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 the Portfolio.
___________
* 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 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.
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%
From September 13, 1995 (date of commencement) to April 30, 1996, the
Newbold's Equity Portfolio paid advisory fees of $0. During this period, the
Adviser voluntarily waived advisory fees of $36,000. Until January 29, 1998, the
Adviser
10
<PAGE>
has voluntarily agreed to waive all or a portion of its advisory fees and to
assume operating expenses otherwise payable by the Portfolio, if necessary, in
order to keep the Portfolio's total annual operating expenses from exceeding
0.90% of average daily net assets.
SERVICE AND DISTRIBUTION PLANS
As stated in the Portfolio's Service Class Shares Prospectus, UAM Fund
Distributors, Inc. (the "Distributor") may enter into agreements with broker-
dealers and other financial institutions ("Service Agents"), pursuant to which
they will provide administrative support services to Service Class shareholders
who are their customers ("Customers") in consideration of the Fund's payment of
0.15% (on an annualized basis) of the average daily net asset value of the
Service Class Shares held by the Service Agent 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 Agent, 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 Agent 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 Agents and the purposes for which the expenditures were made. In
addition, arrangements with Service Agents 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 company as defined in the 1940 Act and have no
direct or indirect financial interest in such arrangements.
The Board of Trustees has approved the arrangements with Service
Agents based on information provided by the Fund's service contractors that
there is a reasonable likelihood that the arrangements will benefit the Fund and
its shareholders 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 the Fund's arrangements with Service
Agents 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 Agents 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 Company 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.
11
<PAGE>
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 and
Distribution Plan has been set at 0.15% and 0.25%, respectively, the Plans
permit 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 Plans or any related agreements, by vote cast in
person at a meeting duly called for the purpose of voting on the Plans and such
Agreements. Continuation of the Plans, the Distribution Agreement and the
related agreements must be approved annually by the Board of Trustees in the
same manner, as specified above. The Newbold's Equity Portfolio Service Class
Shares have not been offered prior to the date of this Statement.
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 the 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 NASD 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.
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 effect
principal transactions with dealers on the basis of sales of shares
which may be made through broker-dealer firms. However, the Adviser may place
portfolio orders with qualified
12
<PAGE>
broker-dealers who refer clients to the Adviser. During the fiscal years ended
April 30, 1995 and April 30, 1996, the entire Fund paid brokerage commissions of
approximately $15,000 and $39,301, respectively.
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.
ADMINISTRATIVE SERVICES
For the period ended April 30, 1996, administrative services fees paid
to the Sub-Administrator by the Newbold's Equity Portfolio totaled $21,891. For
the period April 15, 1996 to April 30, 1996, UAM Fund Services, Inc. earned
$2,109 from the Newbold's Equity Portfolio as Administrator. The services
provided by the Administrator and the Sub-Administrator and the current fees
payable to both are described in the Portfolio's Prospectuses.
PERFORMANCE CALCULATIONS
PERFORMANCE
The Portfolio may from time to time quote various performance figures
to illustrate the past performance of each class of the Portfolio. 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. Since Service Class Shares of the Portfolio
bear additional service and distribution expenses, the current yield of the
Service Class Shares of the Portfolio will generally be lower than that of
Institutional Class Shares.
A yield 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.
Service Class Shares of the Newbold's Equity Portfolio were not
offered as of April 30, 1996. Accordingly, no yield figures are available.
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
13
<PAGE>
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. Since Service Class Shares of the Portfolio
bear additional service and distribution expenses, the average annual total
return of the Service Class Shares of the Portfolio will generally be lower than
that of Institutional Class Shares.
The cumulative total rate of return for the Newbold's Equity Portfolio
Institutional Class Shares from inception to the date of the financial
statements included herein is 11.31%.
These figures are 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).
Service Class Shares of the Newbold's Equity Portfolio were not
offered as of April 30, 1996. Accordingly, no total return figures are
available.
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.
14
<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.
15
<PAGE>
Government issues and $25 million for 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 a
Portfolio to calculate its performance. In addition, there can be no assurance
that a 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 Funds principal executive office is located at
One International Place, 44th Floor, 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. Currently, the Fund
is offering shares of seven Portfolios.
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 of both Classes of the Funds Portfolios 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. Both Institutional Class
and Service Class Shares represent an interest in the same assets of a Portfolio
and are identical in all respects except that the Service Class Shares bear
certain expenses related to shareholder servicing and the distribution of such
shares, and have exclusive voting rights with respect to matters relating to
such distribution expenditures.
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<PAGE>
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
Prospectuses.
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 Prospectuses.
As set forth in the Prospectuses, 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.
17
<PAGE>
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 of the Newbold's Equity Portfolio
Institutional Class Shares for the period from inception on September 13, 1995
to April 30, 1996 and the Financial Highlights for the respective period
presented which appear in the Portfolio's 1996 Annual Report to Shareholders and
the report thereon of Price Waterhouse LLP, the Fund's independent accountants,
also appearing therein, which were previously filed electronically with the
Commission (Accession Number: 0000950109-96-004190), are incorporated by
reference.
18
<PAGE>
APPENDIX - DESCRIPTION OF SECURITIES AND RATINGS
I. DESCRIPTION OF BOND RATINGS
Excerpts from Moody's Investors Service, Inc. ("Moody's") description
of its highest bond ratings: Aaa - judged to be the best quality; carry the
smallest degree of investment risk: Aa - judged to be of high quality by all
standards; A - possess many favorable investment attributes and are to be
considered as higher medium grade obligations; BAA - considered as lower medium
grade obligations, i.e., they are neither highly protected nor poorly
secured.
Excerpts from Standard & Poor's Corporation ("S&P") description of its
highest bond ratings: AAA - highest grade obligations; possess the ultimate
degree of protection as to principal and interest; AA - also qualify as high
grade obligations, and in the majority of instances differs from AAA issues only
in small degree; A - regarded as upper medium grade; have considerable
investment strength but are not entirely free from adverse effects of changes in
economic and trade conditions. Interest and principal are regarded as safe;
BBB - regarded as borderline between definitely sound obligations and those
where the speculative element begins to predominate; this group is the lowest
which qualifies for commercial bank investment.
II. DESCRIPTION OF U.S. GOVERNMENT SECURITIES
The term "U.S. Government Securities" refers to a variety of
securities which are issued or guaranteed by the United States Government, and
by various instrumentalities which have been established or sponsored by the
United States Government.
U.S. Treasury securities are backed by the "full faith and credit" of
the United States. Securities issued or guaranteed by Federal agencies and U.S.
Government sponsored instrumentalities may or may not be backed by the full
faith and credit of the United States.
In the case of securities not backed by the full faith and credit of
the United States, the investor must look principally to the agency or
instrumentality issuing or guaranteeing the obligation for ultimate repayment,
and may not be able to assess a claim against the United States itself in the
event the agency or instrumentality does not meet its commitment. Agencies which
are backed by the full faith and credit of the United States include the Export-
Import Bank, Farmers Home Administration, Federal Financing Bank, and others.
Certain agencies and instrumentalities, such as the GNMA are, in effect, backed
by the full faith and credit of the United States through provisions in their
charters that they may make "indefinite and unlimited" drawings on the U.S.
Treasury, if needed to service its debt. Debt from certain other agencies and
instrumentalities, including the Federal Home Loan Bank and FNMA, is not
guaranteed by the United States, but those institutions are protected by the
discretionary authority of the U.S. Treasury to purchase certain amounts of
their securities to assist the institution in meeting its debt obligations.
Finally, other agencies and instrumentalities, such as the Farm Credit System
and the FHLMC, are federally chartered institutions under Government
supervision, but their debt securities are backed only by the credit worthiness
of those institutions, not the U.S. Government.
Some of the U.S. Government agencies that issue or guarantee
securities include the Export-Import Bank of the United States, Farmers Home
Administration, Federal Housing Administration, Maritime Administration, Small
Business Administration, and the Tennessee Valley Authority.
III. DESCRIPTION OF COMMERCIAL PAPER
The Portfolios may invest in commercial paper (including variable
amount master demand notes) rated A-1 or better by S&P or Prime-1 by Moody's or
by S&P. Commercial paper refers to short-term, unsecured promissory notes issued
by corporations to finance short-term credit needs. Commercial paper is usually
sold on a discount basis and has a maturity at the time of issuance not
exceeding nine months. Variable amount master demand notes are demand
obligations that permit the investment of fluctuating amounts at varying market
rates of interest pursuant to arrangement between the issuer and a commercial
bank acting as agent for the payees of such notes whereby both parties have the
right to vary the amount of the outstanding indebtedness on the notes. As
variable amount master demand notes are direct lending arrangements between a
lender and a borrower, it is not generally contemplated that such instruments
will be traded, and there is no secondary market for these notes, although they
are redeemable (and thus immediately repayable by the borrower) at face value,
plus accrued interest, at any time. In connection with the Portfolio's
investment in variable amount master demand notes, the Adviser's investment
management staff will monitor, on an ongoing basis, the earning power, cash flow
and other liquidity ratios of the issuer and the borrower's ability to pay
principal and interest on demand.
A-1
<PAGE>
Commercial paper rated A-1 by S&P has the following characteristics:
(1) liquidity ratios are adequate to meet cash requirements; (2) long-term
senior debt is rated "A" or better; (3) the issuer has access to at least two
additional channels of borrowing; (4) basic earnings and cash flow have an
upward trend with allowance made for unusual circumstances; (5) typically, the
issuer's industry is well established, and the issuer has a strong position
within the industry; and (6) the reliability and quality of management are
unquestioned. Relative strength or weakness of the above factors determine
whether the issuer's commercial paper is A-1, A-2 or A-3. The rating Prime-1 is
the highest commercial paper rating assigned by Moody's. Among the factors
considered by Moody's in assigning ratings are the following: (1) evaluation of
the management of the issuer; (2) economic evaluation of the issuer's industry
or industries and the appraisal of speculative-type risks which may be inherent
in certain areas; (3) evaluation of the issuer's products in relation to
completion and customer acceptance; (4) liquidity; (5) amount and quality of
long term debt; (6) trend of earnings over a period of ten years; (7) financial
strength of a parent company and the relationships which exist with the issuer;
and (8) recognition by the management of issuer of obligations which may be
present or may arise as a result of public interest questions and preparations
to meet such obligations.
IV. BANK OBLIGATIONS
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time at a stated interest rate.
Certificates of deposit are negotiable short-term obligations of commercial
banks. Variable rate certificates of deposit are certificates of deposit on
which the interest rate is periodically adjusted prior to their stated maturity
based upon a specified market rate. As a result of these adjustments, the
interest rate on these obligations may increase or decrease periodically.
Frequently, dealers selling variable rate certificates of deposit to the
Portfolio will agree to repurchase such instruments, at the Portfolio's option,
at par on or near the coupon dates. The dealers' obligations to repurchase these
instruments are subject to conditions imposed by various dealers. Such
conditions typically are the continued credit standing of the issuer and the
existence of reasonably orderly market conditions. The Portfolio is also able to
sell variable rate certificates of deposit in the secondary market. Variable
rate certificates of deposit normally carry a higher interest rate than
comparable fixed rate certificates of deposit. A banker's acceptance is a time
draft drawn on a commercial bank by a borrower usually in connection with an
international commercial transaction to finance the import, export, transfer or
storage of goods. The borrower is liable for payment as well as the bank which
unconditionally guarantees to pay the draft at its face amount on the maturity
date. Most acceptances have maturities of six months or less and are traded in
the secondary markets prior to maturity.
V. DESCRIPTION OF FOREIGN INVESTMENTS
Investors should recognize that investing in foreign companies
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, a Portfolio 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.
Although the Fund will endeavor to achieve the most favorable
execution costs in its portfolio transactions, fixed commissions on many foreign
stock exchanges are generally higher than negotiated commissions on U.S.
exchanges.
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 Fund's Portfolios.
However, these foreign withholding taxes are not expected to have a significant
impact.
A-2
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PART B
UAM FUNDS
TJ CORE EQUITY PORTFOLIO
INSTITUTIONAL SERVICE CLASS SHARES
STATEMENT OF ADDITIONAL INFORMATION
AUGUST 28, 1996
This Statement is not a Prospectus but should be read in conjunction with the
Prospectus of the UAM Funds Trust (the "UAM Fundss" or the "Fund") for the TJ
Core Equity Portfolio (the "Portfolio") Institutional Service Class Shares dated
August 28, 1996. To obtain the Prospectus, please call
the UAM Funds Service Center:
1-800-638-7983
Table of Contents
<TABLE>
<CAPTION>
Page
----
<S> <C>
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........................................... 10
Service and Distribution Plans............................... 11
Portfolio Transactions....................................... 12
Administrative Services...................................... 13
Performance Calculations..................................... 13
General Information.......................................... 16
Federal Taxes................................................ 17
Financial Statements......................................... 17
Appendix - Description of Ratings............................ A-1
</TABLE>
<PAGE>
INVESTMENT OJECTIVE AND POLICIES
The following policies supplement the investment objective and
policies of the TJ Core Equity Portfolio (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 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, 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
2
<PAGE>
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 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.
3
<PAGE>
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
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
4
<PAGE>
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 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 $2,500. Certain
exceptions to the minimums may be determined from time to time by the officers
of the Fund. The initial investment minimum for IRA accounts is $500. The
initial investment for spousal IRA accounts is $250. The minimum for any
subsequent investment is $100. 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: Labor Day, September 2, 1996;
Thanksgiving Day, November 28, 1996; Christmas Day, December 25, 1996; New
Year's Day, January 1, 1997; Presidents' Day, February 17, 1997; Good Friday,
March 28, 1997; Memorial Day, May 26, 1997; and Independence Day, July 4,
1997.
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
5
<PAGE>
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 "Sub-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 Sub-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
Service Class 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 objective 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 Sub-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
6
<PAGE>
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.
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
1140 Avenue of the Fund; President of Regis Retirement Plan
Americas Services since 1993; Former President of UAM
New York, NY 10036 Fund Distributors, Inc.; Formerly
Age 44 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
Meredith, NH 03253 Great Island Investment Company, Inc.;
Age 67 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
Age 81 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,
Baltimore, MD 21201 Inc.; Chairman of the Board of Chektec
Age 48 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
Age 54
NORTON H. REAMER* Trustee, President and Chairman of the Fund
One International Place President, Chief Executive and a Director of
Boston, MA 02110 United Asset Management Corporation;
Age 60 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
Age 53 Chief Executive Officer of H. T. Investors,
Inc., formerly a subsidiary of DSI.
WILLIAM H. PARK* Vice President of the Fund; Executive Vice
One International Place President and Chief Financial Officer of
Boston, MA 02110 United Asset Management Corporation.
Age 49
*These people are deemed to be "interested persons" of the Fund as
that term is defined in the 1940 Act.
8
<PAGE>
GARY L. FRENCH Treasurer of the Fund; President and Chief
211 Congress Street Executive Officer of UAM Fund Services,
Boston, MA 02110 Inc.; President of UAM Fund Distributors,
Age 45 Inc.; formerly Vice President-Operations
Development and Control of Fidelity
Investment Institutional Services from
February 1995 to August 1995; Treasurer of
the Fidelity Group of Funds from 1991 to
February 1995.
MICHAEL E. DEFAO* Secretary of the Fund, Vice President and
211 Congress Street General Counsel of UAM Fund Services, Inc.,
Boston, MA 02110 formerly an Associate of Ropes & Gray (a law
Age 28 firm) from 1993 to February 1995.
ROBERT R. FLAHERTY* Assistant Treasurer of the Fund; Vice
211 Congress Street President of UAM Fund Services, Inc.;
Boston, MA 02110 formerly Manager of Fund Administration and
Age 32 Compliance of the Sub-Administrator since
from March 1995 to July 1996; formerly
Senior Manager of Deloitte & Touche LLP from
1985 to 1995.
KARL O. HARTMANN* Assistant Secretary of the Fund; Senior Vice
73 Tremont Street President, Secretary and General Counsel of
Boston, MA 02108 Administrator; Senior Vice President,
Age 41 Secretary and General Counsel of Leland,
O'Brien, Rubinstein Associates, Inc., from
November 1990 to November 1991.
*These people are deemed to be "interested persons" 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 and 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 Funds 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, 1996.
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 $3,396 0 0 $29,600
J. Ed ard Day,
Trustee $3,396 0 0 $29,600
</TABLE>
9
<PAGE>
<TABLE>
<S> <C> <C>
Philip D. English, $3,396 0 0 $29,600
Trustee
William A. Humenuk, $3,396 0 0 $29,600
Trustee
</TABLE>
PRINCIPAL HOLDERS OF SECURITIES
As of July 31, 1996, the following persons or organizations held of
record 5% or more of the shares of a Portfolio:
TJ Core Equity Portfolio: Hartnat & Co., F/B/O Lillick & Charles,
Attn. Corp. Actions, P.O. Box 4044, Boston, MA, 78.3%*; Hartnat & Co., F/B/O
J.H. Baxter, Attn. Corp. Actions, P.O. Box 4044, Boston, MA, 14.2%*; and Hartnat
& Co. F/B/O Allied Waste, Attn. Corp. Actions, P.O. Box 4044, Boston, MA,
5.5%*.
The persons or organizations listed above as owning 25% or more of the
outstanding shares of the Portfolio may be presumed to "control" ( as that term
is defined in the 1940 Act) the 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 the Portfolio.
___________
* Denotes shares held by a trustee trustee or other fiduciary for which
beneficial ownership is disclaimed or presumed disclaimed.
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 approximately 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.
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%
From September 28, 1995 (date of commencement) to April 30, 1996, the
TJ Core Equity Portfolio paid advisory fees of $0. During this period, the
Adviser voluntarily waived advisory fees of $4,000. Until January 1, 1998, the
Adviser has voluntarily agreed to waive all or a portion of its advisory fees
and to assume operating expenses otherwise payable by the Portfolio, if
necessary, in order to keep the Portfolio's total annual operating expenses from
exceeding 1.25% of average daily net assets.
10
<PAGE>
SERVICE AND DISTRIBUTION PLANS
As stated in the Prospectus, UAM Fund Distributors, Inc. (the
"Distributor") may enter into agreements with broker-dealers and other financial
institutions ("Service Agents"), pursuant to which they will provide
administrative support services to Institutional Service Class ("Service Class")
shareholders who are their customers ("Customers") in consideration of the
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 Agent 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 Agent 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 Agent 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 Agents and the purposes for which the expenditures were made. In
addition, arrangements with Service Agents 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.
The Board of Trustees has approved the arrangements with Service
Agents 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 the Fund's arrangements
with Service Agents 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 Agents 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
11
<PAGE>
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 Plans permit 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 Plans or any related agreements, by vote cast in
person at a meeting duly called for the purpose of voting on the Plans and such
Agreements. Continuation of the Plans, the Distribution Agreement and the
related agreements must be approved annually by the Board of Trustees in the
same manner, as specified above.
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 the 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.
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 effect
principal transactions with dealers 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 refer clients to the Adviser. During
the fiscal years ended April 30, 1995 and April 30, 1996, the entire Fund paid
brokerage commissions of approximately $15,000 and $39,000, respectively.
12
<PAGE>
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.
ADMINISTRATIVE SERVICES
For the period ended April 30, 1996, administrative services fees paid
to the Sub-Administrator by the TJ Core Equity Portfolio totaled $15,232. For
the period April 15, 1996 to April 30, 1996, UAM Fund Services, Inc. earned
$1,768 from the TJ Core Equity Portfolio as Administrator. The services provided
by the Administrator and the Sub-Administrator and the current fees payable to
both are described in the Portfolio's Prospectus.
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.
A yield 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 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 are calculated according to the following formula:
P(1+T)/n/ = ERV
13
<PAGE>
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 organized to the date of the financial statements included herein
is 11.13%.
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.
(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.
14
<PAGE>
(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 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.
15
<PAGE>
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 executive office is located
at One International Place, 44th floor, 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. Currently, the Fund
is offering shares of seven Portfolios.
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.
16
<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 of the TJ Core Equity Portfolio for the
period from inception on September 28, 1995 to April 30, 1996 and the Financial
Highlights for the respective period presented which appear in the Portfolio's
1996 Annual Report to Shareholders and the report thereon of Price Waterhouse
LLP, the Fund's independent accountants, also appearing therein, which were
previously filed electronically with the Commission (Accession Number:
0000950109-96-004190), are incorporated by reference.
17
<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.
18
<PAGE>
PART C
UAM FUNDS TRUST
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(A) FINANCIAL STATEMENTS:
Included in Part A for the Portfolios listed below are "Financial
Highlights" for the period from the dated indicated to the fiscal
year ended April 30, 1996:
BHM&S Total Return Bond Portfolio Institutional Class Shares
(November 1, 1995)
BHM&S Total Return Bond Portfolio Institutional Service Class Shares
(November 1, 1995)
Chicago Asset Management Intermediate Bond Portfolio Institutional
Class Shares (January 24, 1995)
Chicago Asset Management Value/Contrarian Portfolio Institutional
Class Shares (December 16, 1994)
IRC Enhanced Index Portfolio Institutional Class Shares
(January 23, 1996)
MJI International Equity Portfolio Institutional Class Shares
(September 16, 1994)
Newbold's Equity Portfolio Institutional Class Shares
(September 13, 1995)
TJ Core Equity Portfolio Institutional Service Class Shares
(September 28, 1995)
Included in Part B:
INCORPORATED BY REFERENCE TO THE ANNUAL REPORTS FOR THE FUND, EACH
DATED APRIL 30, 1996, FILED ELECTRONICALLY PURSUANT TO SECTION
30(b)(2) OF THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED, (ACCESSION
NUMBER: 0000950109-96-004190 ARE THE FOLLOWING:
BHM&S Total Return Bond Portfolio Institutional Class Shares
BHM&S Total Return Bond Portfolio Institutional Service Class Shares
Chicago Asset Management Intermediate Bond Portfolio Institutional
Class Shares
Chicago Asset Management Value/Contrarian Portfolio Institutional
Class Shares
IRC Enhanced Index Portfolio Institutional Class Shares
MJI International Equity Portfolio Institutional Class Shares
Newbold's Equity Portfolio Institutional Class Shares
TJ Core Equity Portfolio Institutional Service Class Shares
The Financial Statements for the above-referenced Portfolios for the
time periods set forth in each Portfolio's Annual Report dated
April 30, 1996 include:
(a) Statement of Net Assets as of April 30, 1996
(b) Statement of Operations for the period ended April 30, 1996
(c) Statement of Changes in Net Assets for the period ended
April 30, 1996
(d) Financial Highlights as of April 30, 1996
(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: PEA12 = Post-Effective Amendment No. 12
filed on July 17, 1996, PEA11 = Post-Effective No. 11 filed on July 1, 1996,
PEA10 = Post-Effective Amendment No. 10 filed on July 1, 1996, PEA9 = Post-
Effective Amendment No. 9 filed on May 1, 1996. PEA8 = Post-Effective
Amendment No. 8 filed on March 13, 1996, 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.
<TABLE>
<CAPTION>
Exhibit Incorporated by
- ------- ---------------
Reference to (Location):
------------------------
<S> <C>
1. Declaration of Trust RS
A. Certificate of Amendment to
Certificate of Trust PEA8
2. By-Laws RS
3. Not Applicable
4. Specimen Share Certificate PEA1, PEA2, PEA3, PEA4, PEA11, PEA12
5. Forms of Investment Advisory Agreements RS, PEA1, PEA2, PEA3, PEA4, PEA12
6. Form of Distribution Agreement RS
7. Not Applicable
8. Form of Custody Agreements RS
9. A. Fund Administration Agreement Filed herewith
B. Mutual Funds Service Agreement Filed herewith
10. Opinion and Consent of Counsel Pre EA
11. Consent of Independent Accountants
A. Consent of Independent Accountants
with respect to 1996 Annual Reports Filed herewith
12. Other Financial Statements Not Applicable
13. Agreement for Providing Initial Capital Pre EA
14. Not Applicable
15. Not Applicable
16. Not Applicable
18. Rule 18f-3 Multiple Class Plan PEA 8
24. Powers of Attorney RS, PEA7
</TABLE>
<PAGE>
27. Financial Data Schedules for the fiscal year Filed herewith
ended April 30, 1996
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 RECORDHOLDERS
TITLE OF CLASS OR SERIES AS OF JULY 31, 1996
- ------------------------ -------------------
<S> <C>
BHM&S Total Return Bond Portfolio Institutional Class Shares...............................2
BHM&S Total Return Bond Portfolio Institutional Service Class Shares......................11
Chicago Asset Management Value/Contrarian Portfolio Institutional Class Shares............16
Chicago Asset Management Intermediate Bond Portfolio Institutional Class Shares............8
IRC Enhanced Index Portfolio Institutional Class Shares...................................21
MJI International Equity Portfolio Institutional Class Shares.............................49
Newbold's Equity Portfolio Institutional Class Shares.....................................21
TJ Core Equity Portfolio Institutional Service Class Shares................................8
Total....................................................................................136
</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.
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:
<TABLE>
<CAPTION>
Investment Adviser Date Filed File No.
- ------------------ ---------- --------
<S> <C> <C>
First Pacific Advisors, Inc. March 28, 1996 801-39512
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
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Investment Adviser Date Filed File No.
- ------------------ ---------- --------
<S> <C> <C>
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
</TABLE>
First Pacific Advisors, Inc., 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, the Registrant's Sub-Transfer and Sub-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
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 Dwight Principal Preservation Portfolio
Institutional Class Shares, within four to six months from the
commencement of operations 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 Hanson Equity Portfolio Institutional Class shares
within four to six months from the commencement of operations of the
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
<PAGE>
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 28th day of August, 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:
<TABLE>
<CAPTION>
<S> <C>
* , Chairman and President August 28, 1996
- ------------------------------------
Norton H. Reamer
* , Trustee August 28, 1996
- ------------------------------------
Mary Rudie Barneby
* , Trustee August 28, 1996
- ------------------------------------
John T. Bennett, Jr.
* , Trustee August 28, 1996
- ------------------------------------
J. Edward Day
* , Trustee August 28, 1996
- ------------------------------------
Philip D. English
* , Trustee August 28, 1996
- ------------------------------------
William A. Humenuk
* , Trustee August 28, 1996
- ------------------------------------
Peter M. Whitman, Jr.
/s/Gary L. French , Treasurer August 28, 1996
- ------------------------------------
Gary L. French
/s/ Karl O. Hartmann August 28, 1996
- ------------------------------------
* Karl O. Hartmann
(Attorney-in-Fact)
</TABLE>
<PAGE>
UAM FUNDS TRUST
(FORMERLY THE REGIS FUND II)
FILE NOS. 811-8544/33-79858
POST-EFFECTIVE AMENDMENT NO. 13
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
9A. Fund Administration Agreement
9B. Mutual Funds Service Agreement
11 Consent of Independent Accountants
27 Financial Data Schedules for the
Fiscal Year ended April 30, 1996
</TABLE>
<PAGE>
EXHIBIT 9A
----------
FUND ADMINISTRATION AGREEMENT
UAM FUNDS TRUST
AGREEMENT made as of April 15, 1996 by and between UAM Funds Trust, a
business trust organized under the laws of the State of Delaware (the "Fund"),
and UAM Fund Services, Inc., a Delaware corporation (the "Administrator").
W I T N E S S E T H:
WHEREAS, the Fund is registered as a diversified, open-end, management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Fund wishes to retain the Administrator to provide
certain transfer agent, fund accounting and administration services with respect
to the Fund, and the Administrator is willing to furnish or provide for the
furnishing of such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Fund hereby appoints the Administrator to
-----------
provide transfer agent, fund accounting and fund administration services to the
Fund, subject to the supervision of the Board of Trustees of the Fund (the
"Board"), for the period and on the terms set forth in this Agreement. The
Administrator accepts such appointment and agrees to furnish the services herein
set forth in return for the compensation as provided in Paragraph 4 of this
Agreement. The Fund presently issues shares of common stock in one or more
series each representing separate interests in a portfolio of investments and
cash. Hereinafter, each such series shall be referred to as a "Portfolio." The
term "Portfolio" as hereinafter used shall be deemed to include not only
separate series of the Fund, but also separate classes of series of the Fund.
The Fund shall notify the Administrator in writing of each additional Portfolio
established by the Fund. Each new Portfolio shall be subject to the provisions
of this Agreement, except to the extent that said provisions (including those
relating to the compensation and expenses payable by the Fund and its
Portfolios) may be modified with respect to such new Portfolio in writing by the
Fund and the Administrator at the time of the addition of such new Portfolio.
2. Delivery of Documents. The Fund will upon request furnish the
---------------------
Administrator with copies, properly certified or authenticated, of each of the
following in their most current form:
(a) Resolutions of the Fund's Board authorizing the appointment of
the Administrator to provide certain transfer agency, fund accounting and
administration services to the Fund and approving this Agreement;
1
<PAGE>
(b) The Fund's Agreement and Declaration of Trust ("Declaration of
Trust");
(c) The Fund's Bylaws ("Bylaws");
(d) The Fund's Notification of Registration of Form N-8A under the
1940 Act as filed with the Securities and Exchange Commission ("SEC");
(e) The Fund's Registration Statement, as amended, on Form N-1A (the
"Registration Statement") under the Securities Act of 1933 and the 1940 Act, as
filed with the SEC; and
(f) The Fund's most recent Prospectuses and Statements of Additional
Information and supplements thereto (such Prospectuses and Statements of
Additional Information and supplements thereto, as presently in effect and as
from time to time hereafter amended and supplemented, herein called the
"Prospectuses").
The Fund will furnish the Administrator from time to time with copies,
properly certified or authenticated, of all amendments of or supplements to the
foregoing, if any.
3. Services Provided by the Administrator. The Administrator will
--------------------------------------
provide the following services subject to the control, direction and supervision
of the Board, and in compliance with the objectives, policies and limitations
set forth in the Fund's Registration Statement, Bylaws and applicable laws and
regulations.
(a) General Administration. The Administrator shall manage,
----------------------
administer and conduct the general business activities of the Fund other than
those which have been contracted to other third parties by the Fund as of the
date hereof. The Administrator shall provide the personnel and facilities
necessary to perform such general business activities. A detailed description
of these services is included in Attachment A to this Agreement.
(b) Fund Accounting. The Administrator shall provide the following
---------------
accounting services to the Fund: (i) maintenance of the books and records and
accounting controls for the Fund's assets, including records of all securities
transactions; (ii) calculation of the Portfolios' net asset values in accordance
with the Prospectuses and, if requested by the Fund, transmission of the net
asset values to the NASD for publication of prices; (iii) accounting for
dividends, interest and other income received and distributions made by the
Fund; (iv) preparation and filing of the Fund's state and federal tax returns
and Semi-Annual Reports on Form N-SAR; (v) production of transaction data,
financial reports and such other periodic and special reports as the Board may
reasonably request; (vi) the preparation of financial statements for the semi-
annual and annual reports and other shareholder communications; (vii) liaison
with the Fund's independent auditors; and (viii) monitoring and administration
of arrangements with the Fund's custodian and depository banks. A complete
listing of reports that will be available to the Fund is included in Attachment
B of this Agreement.
2
<PAGE>
(c) Transfer Agent. The Administrator shall:
--------------
(i) Maintain records showing for each Fund shareholder the
following: (A) name, address and tax identifying number; (B) number of shares
held of any Portfolio of the Fund; (C) historical information including
dividends paid and the date and price of all transactions including individual
purchases and redemptions; and (D) any dividend reinvestment order, application,
dividend address and correspondence relating to the current maintenance of the
account.
(ii) Record the issuance of shares of common stock of the Fund
and shall notify the Fund in case any proposed issue of shares by the Fund shall
result in an over-issue as identified by Section 8-104(2) of the Uniform
Commercial Code and in case any issue would result in such an over-issue, shall
refuse to countersign and issue, and/or credit, said shares. Except as
specifically agreed in writing between the Administrator and the Fund, the
Administrator shall have no obligation when countersigning and issuing and/or
crediting shares, to take cognizance of any other laws relating to the issue and
sale of such shares except insofar as policies and procedures of the Stock
Transfer Association recognize such laws.
(iii) Process all orders for the purchase of shares of the Fund
in accordance with the Fund's current Registration Statement. Upon receipt of
any check or other payment for purchase of shares of the Fund from an investor,
it will: (A) stamp the envelope with the date of receipt; (B) forthwith process
the same for collection; and (C) determine the amounts thereof due the Fund, and
notify the Fund of such determination and deposit, such notification to be given
on a daily basis of the total amounts determined and deposited to the Fund's
custodian bank account during such day. The Administrator shall then credit the
share account of the investor with the number of shares to be purchased
according to the price of the Fund's shares in effect for purchases made on the
date such payment is received by the Administrator, determined as set forth in
the Fund's current Prospectuses, and shall promptly mail a confirmation of said
purchase to the investor, all subject to any instructions which the Fund may
give to the Administrator with respect to the timing or manner of acceptance of
orders for shares relating to payments so received by it.
(iv) Receive and stamp with the date of receipt all requests
for redemptions or repurchase of shares held in certificate or non-certificate
form and shall process redemptions and repurchase requests as follows: (A) if
such certificate or redemption request complies with the applicable standards
approved by the Fund, the Administrator shall on each business day notify the
Fund of the total number of shares presented and covered by such requests
received by the Administrator on such day; (B) on or prior to the seventh
calendar day succeeding any such request for redemption, the Administrator shall
notify the custodian, subject to the instructions from the Fund, to transfer
monies to such account as designated by the Administrator for such payment to
the redeeming shareholder of the applicable redemption or repurchase price; (C)
if any such certificate or request for redemption or repurchase does not comply
with applicable standards, the Administrator shall promptly notify the investor
of such fact, together with the reason therefor, and shall effect such
redemption at the relevant Portfolio's
3
<PAGE>
price next determined after receipt of documents complying with said standards
or at such other time as the Fund shall so direct.
(v) Acknowledge all correspondence from shareholders relating
to their share accounts and undertake such other shareholder correspondence as
may from time to time be mutually agreed upon.
(vi) Process redemptions, exchanges and transfers of Fund
shares upon telephone instructions from qualified shareholders in accordance
with the procedures set forth in the Fund's current Prospectuses. The
Administrator shall be permitted to act upon the instruction of any person by
telephone to redeem, exchange and/or transfer Fund shares from any account for
which such services have been authorized. The Fund hereby agrees to indemnify
and hold the Administrator harmless against all losses, costs or expenses,
including attorneys' fees and expenses suffered or incurred by the Administrator
directly or indirectly as a result of relying on the telephone instructions of
any person acting on behalf of a shareholder account for which telephone
services have been authorized.
(vii) Transfer on the records of the Fund maintained by it,
shares represented by certificates, as well as issued shares held in non-
certificate form, upon the surrender to it of the certificate or, in the case of
non-certificated shares, comparable transfer documents in proper form for
transfer and, upon cancellation thereof, to countersign and issue new
certificates or other documents of ownership for a like amount of stock and to
deliver the same pursuant to the transfer instructions.
(viii) Supply, at the expense of the Fund, a supply of continuous
form blank stock certificates. Such blank stock certificates shall be properly
signed, manually or by facsimile, as authorized by the Fund, and shall bear the
Fund's corporate seal or facsimile thereof; and notwithstanding the death,
resignation or removal of any officers of the Fund authorized to sign
certificates of stock, the Administrator may, until otherwise directed by the
Fund, continue to countersign certificates which bear the manual or facsimile
signature of such officer.
(ix) Upon the request of a shareholder of the Fund who requests
a certificate representing his shares, countersign and mail by first class mail
a share certificate to the investor at his address as set forth on the transfer
books of the Fund.
(x) In the event that any check or other order for the payment
of money is returned unpaid for any reason, take such steps, including
redepositing said check for collection or returning said check to the investor,
as the Administrator may, at its discretion, deem appropriate and notify the
Fund of such action, unless the Fund instructs otherwise. However, the
Administrator shall not be liable to the Fund for any returned checks or other
order for the payment of money if it follows reasonable procedures with respect
thereto.
(xi) Prepare, file with the Internal Revenue Service, and mail
to shareholders such returns for reporting payment of dividends and
distributions as are required by
4
<PAGE>
applicable laws to be so filed and/or mailed, and the Administrator shall
withhold such sums as are required to be withheld under applicable Federal
income tax laws, rules and regulations.
(xii) Mail proxy statements, proxy cards and other materials and
shall receive, examine and tabulate returned proxies. The Administrator shall
make interim reports of the status of such tabulation to the Fund upon request,
and shall certify the final results of the tabulation.
(d) Dividend Disbursing. The Administrator shall act as Dividend
-------------------
Disbursing Agent for the Fund, and, as such, shall prepare and mail checks or
credit income and capital gain payments to shareholders. The Fund shall advise
the Administrator of the declaration of any dividend or distribution and the
record and payable date thereof at least five (5) days prior to the record date.
The Administrator shall, on or before the payment date of any such dividend or
distribution, notify the Fund's custodian of the estimated amount required to
pay any portion of said dividend or distribution which is payable in cash, and
on or before the payment date of such distribution, the Fund shall instruct its
custodian to make available to the Administrator sufficient funds for the cash
amount to be paid out. If a shareholder is entitled to receive additional
shares by virtue of any such distribution or dividend, appropriate credits will
be made to his account and/or certificates delivered where requested. A
shareholder not electing issuance of certificates will receive a confirmation
from the Administrator indicating the number of shares credited to his account.
(e) Miscellaneous. The Administrator will also:
-------------
(i) Provide office facilities (which may be in the offices of
the Administrator or a corporate affiliate of them, but shall be in such
location as the Fund shall reasonably approve) and the services of a principal
financial officer to be appointed by the Fund;
(ii) Furnish statistical and research data, clerical services
and stationery and office supplies;
(iii) Assist in the monitoring of regulatory and legislative
developments which may affect the Fund and, in response to such developments,
counsel and assist the Fund in routine regulatory examinations or investigations
of the Fund, and work with outside counsel to the Fund in connection with
regulatory matters or litigation.
(iv) In performing its duties: (A) will act in accordance with
the Fund's Declaration of Trust, Bylaws, Prospectuses and the instructions and
directions of the Board and will conform to, and comply with, except as
otherwise provided herein, the requirements of the 1940 Act and all other
applicable federal or state laws and regulations; and (B) will consult with
outside legal counsel to the Fund, as necessary or appropriate.
(v) Preserve for the periods prescribed by Rule 31a-2 under
the 1940 Act the records required to be maintained by Rule 31a-1 under said Act
in connection with the services required to be performed hereunder. The
Administrator further agrees that all such
5
<PAGE>
records which it maintains for the Fund are the property of the Fund and further
agrees to surrender promptly to the Fund any of such records upon the Fund's
request.
(f) The Administrator may, at its expense and discretion, subcontract
with any entity or person concerning the provisions of the services contemplated
hereunder. The Administrator will provide prompt notice of such delegation and
provide copies of any such subcontract to the Fund.
4. Fees; Expenses; Expense Reimbursement.
-------------------------------------
(a) For the services rendered for the Fund pursuant to this
Agreement, the Administrator shall be entitled to a fee based on the average net
assets of the Fund determined at the annual rate outlined in Attachment C of
this Agreement and applied to the average daily net assets of the Fund. Such
fees are to be computed daily and paid monthly on the first business day of the
following month. Upon any termination of this Agreement before the end of any
month, the fee for such part of the month shall be prorated according to the
proportion which such period bears to the full monthly period and shall be
payable upon the date of termination of this Agreement.
(b) For the purpose of determining fees payable to the Administrator,
the value of the Fund's net assets shall be computed as required by its
Prospectuses, generally accepted accounting principles and resolutions of the
Board.
(c) The Administrator will from time to time employ or associate with
such person or persons as may be fit to assist them in the performance of this
Agreement. Such person or persons may be officers and employees who are
employed by both the Administrator and the Fund. The compensation of such
person or persons for such employment shall be paid by the Administrator and no
obligation will be incurred by or on behalf of the Fund in such respect.
(d) The Administrator will bear all expenses in connection with the
performance of its services under this Agreement except as otherwise expressly
provided herein. Other expenses to be incurred in the operation of the Fund
will be borne by the Fund or other parties, including taxes, interest, brokerage
fees and commissions, if any, salaries and fees of officers and members of the
Board who are not officers, directors, shareholders or employees of the
Administrator, or the Fund's investment adviser or distributor, SEC fees and
state Blue Sky fees, EDGAR filing fees, processing services and related fees,
advisory and administration fees, charges and expenses of pricing and data
services, independent public accountants and custodians, insurance premiums
including fidelity bond premiums, outside legal expenses, costs of maintenance
of corporate existence, typesetting and printing of prospectuses for regulatory
purposes and for distribution to current shareholders of the Fund, printing and
production costs of shareholders' reports and corporate meetings, cost and
expenses of Fund stationery and forms; costs of special telephone and data lines
and devices; trade association dues and expenses; and any extraordinary expenses
and other customary Fund expenses; provided, however, that, except as provided
in any distribution plan adopted by the Fund, the Fund will not bear, directly
or
6
<PAGE>
indirectly, the cost of any activity which is primarily intended to result in
the distribution of shares of the Fund. In addition, the Administrator may
utilize one or more independent pricing services, approved from time to time by
the Board, to obtain securities prices in connection with determining the net
asset values of the Fund, and the Fund will reimburse the Administrator for its
share of the cost of such services based upon its actual use of the services for
the benefit of the Fund.
5. Proprietary and Confidential Information. The Administrator agrees on
----------------------------------------
behalf of itself and its employees to treat confidentially and as proprietary,
information of the Fund, all records and other information relative to the
Fund's prior, present or potential shareholders, and not to use such records and
information for any purpose other than performance of their responsibilities and
duties hereunder, except after prior notification to and approval in writing by
the Fund, which approval shall not be unreasonably withheld and may not be
withheld where the Administrator may be exposed to civil or criminal contempt
proceedings for failure to comply, when requested to divulge such information by
duly constituted authorities, or when so requested by the Fund. Waivers of
confidentiality are automatically effective without further action by the
Administrator with respect to Internal Revenue levies, subpoenas and similar
actions, or with respect to any request by the Fund.
6. Duties, Responsibilities and Limitation of Liability.
----------------------------------------------------
(a) In the performance of its duties hereunder, the Administrator
shall be obligated to exercise due care and diligence and to act in good faith
in performing the services provided for under this Agreement. In performing its
services hereunder, the Administrator shall be entitled to rely on any oral or
written instructions, notices or other communications from the Fund and its
custodians, officers and directors, investors, agents, legal counsel and other
service providers which communications the Administrator reasonably believes to
be genuine, valid and authorized.
(b) Subject to the foregoing, the Administrator shall not be liable
for any error of judgment or mistake of law or for any loss or expense suffered
by the Fund, in connection with the matters to which this Agreement relates,
except for a loss or expense resulting from willful misfeasance, bad faith or
gross negligence on the Administrator's part in the performance of its duties or
from reckless disregard by the Administrator of its obligations and duties under
this Agreement. Any person, even though also an officer, director, partner,
employee or agent of the Administrator, who may be or become an officer,
director, partner, employee or agent of the Fund, shall be deemed when rendering
services to the Fund or acting on any business of the Fund (other than services
or business in connection with the Administrator's duties hereunder) to be
rendering such services to or acting solely for the Fund and not as an officer,
director, partner, employee or agent or person under the control or direction of
the Administrator even though paid by the Administrator. In no event shall the
Administrator be liable to the Fund or any other party for special or
consequential loss or damage of any kind whatsoever (including but not limited
to lost profits) even if the Administrator has been advised of such loss or
damage and regardless of the form of action.
7
<PAGE>
(c) The Administrator shall not be responsible for, and the Fund
shall indemnify and hold the Administrator harmless from and against, any and
all losses, damages, costs, reasonable attorneys' fees and expenses, payments,
expenses and liabilities, except for a loss or expense resulting from willful
misfeasance, bad faith or gross negligence on the Administrator's part in the
performance of its duties or from reckless disregard by the Administrator of its
obligations and duties under this Agreement, arising out of or attributable to:
(i) All actions of the Administrator or its officers, employers
or agents required to be taken pursuant to this Agreement;
(ii) The reliance on or use by the Administrator or its
officers, employers or agents of information, records, or documents which are
received by the Administrator or its officers, employers or agents and furnished
to it or them by or on behalf of the Fund, and which have been prepared or
maintained by the Fund or its officers, employees, or agents;
(iii) The Fund's refusal or failure to comply with the terms of
this Agreement or the Fund's lack of good faith, or its actions, or lack
thereof, involving gross negligence or willful misfeasance;
(iv) The taping or other form of recording of telephone
conversations or other forms of electronic communications with other agents of
the Fund, its investors and shareholders, or reliance by the Administrator on
telephone or other electronic instructions of any person acting on behalf of a
shareholder or shareholder account for which telephone or other electronic
services have been authorized; and
(v) The offer or sale of shares by the Fund in violation of any
requirement under the Federal securities laws or regulations or the securities
laws or regulations of any state, or in violation of any stop order or other
determination or ruling by any Federal agency or any state agency with respect
to the offer or sale of such shares in such state resulting from activities,
actions, or omissions by the Fund or its officers, employees or agents prior to
the effective date of this Agreement.
(d) The Administrator shall indemnify and hold the Fund harmless from
and against any and all losses, damages, costs, charges, reasonable attorneys'
fees and expenses, payments, expenses and liability arising out of or
attributable to the Administrator's refusal or failure to comply with the terms
of this Agreement; the Administrator's breach of any representation or warranty
made by it herein; or the Administrator's lack of good faith, or acts involving
gross negligence, willful misfeasance or reckless disregard of its duties
hereunder.
7. Term. The Administrator will start the provision of the services
----
contemplated by this Agreement on the date first hereinabove written or whenever
the current service provider ceases to provide its services and the operative
terms of the Agreement will be effective for a period of one (1) year from such
date, unless sooner terminated as provided herein. Thereafter, unless sooner
terminated as provided herein, this Agreement shall continue in effect from year
to
8
<PAGE>
year provided such continuance is specifically approved at least annually by
the Board. This Agreement is terminable, without penalty, by the Board or by
the Administrator, on not less than ninety (90) days' written notice. Except as
provided in Section 8 hereof, this Agreement shall automatically terminate upon
its assignment by the Administrator without the prior written consent of the
Fund. Upon termination of this Agreement, the Fund shall pay to the
Administrator such compensation and any reimbursable expenses as may be due
under the terms hereof as of the date of termination or the date that the
provision of services ceases, whichever is later.
8. Non-Assignability. This Agreement shall not be assigned by any of the
-----------------
parties hereto without the prior consent in writing of the other party;
provided, however, that the Administrator may in its own discretion and without
limitation or prior consent of the Fund, whenever and on such terms and
conditions as it deems necessary or appropriate, enter into subcontracts,
agreements and understandings with non-affiliated third parties; provided, that
such subcontract, agreement or understanding shall not discharge the
Administrator from its obligations hereunder or the delegation of its duties to
another third party.
9. Force Majeure. The Administrator shall not be responsible or liable
-------------
for any failure or delay in performance of its obligations under this Agreement
arising out of or caused, directly or indirectly, by circumstances beyond its
control, including without limitation, acts of God, earthquakes, fires, floods,
wars, civil or military authority or governmental actions, nor shall any such
failure or delay give the Fund the right to terminate this Agreement, unless
such failure or delay shall result in the Fund's inability to comply with the
requirements of state and federal law.
10. Use of Name. The Fund and the Administrator agree not to use the
-----------
other's name nor the names of such other's affiliates, designees or assignees in
any prospectus, sales literature or other printed material written in a manner
not previously expressly approved in writing by the other or such other's
affiliates, designees or assignees except where required by the SEC or any state
agency responsible for securities regulation.
11. Notice. Any notice required or permitted hereunder shall be in
------
writing to the parties at the following address (or such other address as a
party may specify by notice to the other):
If to the Fund: UAM Funds Trust
c/o United Asset Management Corporation
One International Place, 44/th/ Floor
Boston, MA 02110
Attn: William H. Park
Vice President
With a copy to: Stradley, Ronon, Stevens and Young
2600 One Commerce Square
Philadelphia, PA 19103-7098
9
<PAGE>
Attn: Audrey C. Talley, Esq.
10
<PAGE>
If to Administrator: UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110
Attn: Gary L. French, President
Notice shall be effective upon receipt if by mail, on the date of
personal delivery (by private messenger, courier service or otherwise) or upon
confirmed receipt of telex or facsimile, whichever occurs first.
12. Waiver. The failure of a party to insist upon strict adherence to any
------
term of this Agreement on any occasion shall not be considered a waiver nor
shall it deprive such party of the right thereafter to insist upon strict
adherence to that term or any term of this Agreement. Any waiver must be in
writing signed by the waiving party.
13. Severability. If any provision of this Agreement is invalid or
------------
unenforceable, the balance of the Agreement shall remain in effect, and if any
provision is inapplicable to any person or circumstance, it shall nevertheless
remain applicable to all other persons and circumstances.
14. Successor and Assigns. The covenants and conditions herein contained
---------------------
shall, subject to the provisions as to assignment, apply to and bind the
successors and assigns of the parties hereto.
15. Governing Law. This Agreement shall be governed by Massachusetts law
-------------
including its choice of law provisions.
16. Amendments. This Agreement may be modified or amended from time to
----------
time by mutual written agreement between the parties. No provision of this
Agreement may be changed, discharged, or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of the
change, discharge or termination is sought.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the date indicated above.
UAM FUNDS TRUST
By: /s/ Norton H. Reamer
--------------------
Name: Norton H. Reamer
Title: President
UAM FUND SERVICES, INC.
By: /s/ Gary L. French
------------------
Name: Gary L. French
Title: President
11
<PAGE>
Attachment A
Fund Administration Services
Compliance
- ----------
Prepare and update compliance manuals and procedures.
Assist in the training of portfolio managers, management and Fund accountants
concerning compliance manuals and procedures.
Monitor each Portfolio's compliance with investment restrictions (i.e. issuer or
industry diversification, etc.) listed in the current Prospectuses and Statement
of Additional Information. (Frequency - Daily)
Monitor each Portfolio's compliance with the requirements of the Internal
Revenue Code (the "Code") Section 851 for qualification as regulated investment
companies. (Frequency - Monthly)
Calculate and recommend dividend and capital gain distributions in accordance
with distribution policies detailed in the Prospectuses. (Frequency -
Determined by Prospectus)
Prepare year-end dividend and capital gain distributions to establish Fund's
status as RIC under Section 4982 of the Code regarding minimum distribution
requirements. File Federal Excise Tax Return (Form 8613). (Frequency -
Annually)
Mail quarterly requests for "Securities Transaction Reports" to the Fund's
Trustees/Directors and Officers and "access persons" under the terms of the
Fund's Code of Ethics and SEC regulations.
Monitor investment manager's compliance with Board directives such as "Approved
Issuers Listings for Repurchase Agreements" and provisions of Rule 2a-7 for
money market funds. (Frequency - Daily)
Review investments involving interests in any broker, dealer, underwriter or
investment adviser to ensure continued compliance with Section 12(d)(3) of the
1940 Act. (Frequency - Quarterly)
Monitor the Fund's brokerage allocation and prepare quarterly brokerage
allocation reports for Board meetings (consistent with reporting from the
current service provider).
A-1
<PAGE>
Reporting
- ---------
Prepare agreed upon management reports and Board materials such as unaudited
financial statements, distribution summaries and deviations of mark-to-market
valuation and the amortized cost for money market funds.
Report Fund performance to outside services as directed by Fund management.
Prepare and file Fund's Semi-Annual Reports on Form N-SAR with the SEC.
Prepare and file Portfolio Federal tax returns along with all state and local
tax returns and State Expense Limitation returns, where applicable.
Prepare and coordinate printing of Fund's Semi-Annual and Annual Reports to
shareholders.
File copies of every report to shareholders with the SEC under Rule 30b2-1.
Notify shareholders as to what portion, if any, of the distributions made by the
Fund during the prior fiscal year were exempt-interest dividends under Section
852(b)(5)(A) of the Code.
Provide Form 1099-MISC to persons other than corporations (i.e.,
Trustees/Directors) to whom the Fund paid more than $600 during the year.
Administration
- --------------
Serve as officers of the Fund and attend Fund Board meetings.
Prepare Fund portfolio expense projections, establish accruals and review on a
periodic basis.
Expenses based on a percentage of Fund's average daily net assets (advisory and
administrative fees).
Expenses based on actual charges annualized and accrued daily (audit fees,
registration fees, directors' fees, etc.).
For new Portfolios, obtain Employer Identification Number and CUSIP number.
Estimate organization (offering) costs and monitor against actual disbursements.
Provide financial information for Fund proxies and Prospectuses (Expense Table).
Coordinate all communications and data collection with regards to any regulatory
examinations and yearly audit by independent accountants.
A-2
<PAGE>
Act as liaison to investment advisors concerning new products.
Legal Affairs
- -------------
Prepare and update documents, such as Articles of Incorporation/Declaration of
Trust, foreign corporation qualification filings, Bylaws and stock certificates.
Update and file post-effective amendments to the Fund's registration statement
on Form N-1A and prepare supplements as needed.
Prepare and file Rule 24f-2 Notice.
Prepare proxy materials and administer shareholder meetings.
Review contracts between the Fund and its service providers (must be sensitive
to conflict of interest situations).
Research technical issues and questions arising out of a Fund's special status
under the tax and securities laws and monitor legal trends, developments and
changes.
Apprise and train management and staff with respect to important legal issues.
Prepare and maintain all state registrations and exemptions of the Fund's
securities including annual renewals, registering new Portfolios, preparing and
filing sales reports, filing copies of the registration statement and final
prospectus and statement of additional information, and increasing registered
amounts of securities in individual states.
Review and monitor fidelity bond and errors and omissions insurance coverage and
make any related regulatory filings.
Prepare agenda and Board materials, including materials relating to contract
renewals, for all Board meetings.
Maintain minutes of Board and shareholder meetings.
Act as liaison with Fund's distributor and outside Fund counsel:
Coordinate and monitor the work of outside counsel.
Respond to questions from the investment advisors concerning legal questions
relating to investments.
A-3
<PAGE>
Attachment B
Domestic Fund Accounting Daily Reports
- --------------------------------------
A) General Ledger Reports
1. Trial Balance Report
2. General Ledger Activity Report
B) Portfolio Reports
1. Portfolio Report
2. Cost Lot Report
3. Purchase Journal
4. Sell/Maturity Journal
5. Amortization/Accretion Report
6. Maturity Projection Report
C) Pricing Reports
1. Pricing Report
2. Pricing Report by Market Value
3. Pricing Variance by % Change
4. NAV Report
5. NAV Proof Report
6. Money Market Pricing Report
D) Accounts Receivable/Payable Reports
1. Accounts Receivable for Investments Report
2. Accounts Payable for Investments Report
3. Interest Accrual Report
4. Dividend Accrual Report
E) Other
1. Dividend Computation Report
2. Cash Availability Report
3. Settlement Journal
B-1
<PAGE>
International Fund Accounting Daily Reports
- -------------------------------------------
A) General Ledger
1. Trial Balance Report
2. General Ledger Activity Report
B) Portfolio Reports
1. Portfolio Report by Sector
2. Cost Lot Report
3. Purchase Journal
4. Sell/Maturity Journal
C) Currency Reports
1. Currency Purchase/Sales Journal
2. Currency Valuation Report
D) Pricing Reports
1. Pricing Report by Country
2. Pricing Report by Market Value
3. Price Variance by % Change
4. NAV Report
5. NAV Proof Report
E) Accounts Receivable/Payable Reports
1. Accounts Receivable for Investments Sold/Matured
2. Accounts Payable for Investments Purchased
3. Accounts Receivable for Forward Exchange Contracts
4. Accounts Payable for Forward Exchange Contracts
5. Interest Receivable Valuation
6. Interest Recoverable Withholding Tax
7. Dividends Receivable Valuation
8. Dividends Recoverable Withholding Tax
F) Other
1. Exchange Rate Report
B-2
<PAGE>
Monthly Fund Accounting Reports
- -------------------------------
A) Standard Reports
1. Cost Proof Report
2. Transaction History Report
3. Realized Gain/Loss Report
4. Interest Record Report
5. Dividend Record Report
6. Broker Commission Totals
7. Broker Principal Trades
8. Shareholder Activity Report
9. Fund Performance Report
10. SEC Yield Calculation Work Sheet
B) International Reports
1. Forward Contract Transaction History Report
2. Currency Gain/Loss Report
<PAGE>
Attachment C
Fee Schedule to the Fund Administration Agreement
I. Base Fee Schedule
-----------------
Fees for the services under the Fund Administration Agreement:
19 Basis Points on the 1/st/ $200 million of total net assets of the Fund
11 Basis Points on the next $800 million of total net assets
7 Basis Points on total net assets over $1 billion up to $3 billion
5 Basis Points on total net assets over $3 billion
II. Fund-Specific Fee Schedule
--------------------------
All portfolios will be billed a fee ranging from 2 to 6 Basis Points, in
addition to the Base fee in I. above, in accordance with the attached
Exhibit 1.
III. Minimum Fee Schedule
--------------------
All Portfolios will be billed per the above Fund-Specific Fee Schedule
plus an amount equal to the fees calculated under the Base fee schedule or
a minimum fee per the following schedule, whichever is greater:
<TABLE>
<CAPTION>
Monthly Rate+
-------------
<S> <C>
1/st/ 6 mos. $1,250
2/nd/ 6 mos. $2,500
3/rd/ 6 mos. $3,750
4/th/ 6 mos. $5,000
Thereafter $5,833
</TABLE>
+ Except as otherwise indicated, all time periods are determined from the
date of a Portfolio's initial funding.
If a separate class of shares is added to an existing Portfolio, the
minimum annual fee would increase by $20,000. However, there would be no
------
extra charge for an additional class of shares where a Portfolio's fee
already exceeded the minimum applicable fee by $20,000.
These fees do not include out-of-pocket expenses, which under this
Agreement will be billed separately.
C-1
<PAGE>
EXHIBIT 9B
-----------
MUTUAL FUNDS SERVICE AGREEMENT
. Fund Administration Services
. Fund Accounting Services
. Transfer Agency Services
UAM FUNDS TRUST
APRIL 15, 1996
--
<PAGE>
MUTUAL FUNDS SERVICE AGREEMENT
Table of Contents
-----------------
<TABLE>
<CAPTION>
Section/Paragraph Page
- ----------------- ----
<S> <C> <C>
1. Appointment......................................... 1
2. Representations and Warranties...................... 2
3. Delivery of Documents............................... 4
4. Services Provided................................... 5
5. Fees; Expenses; Expense Reimbursement............... 6
6. Proprietary and Confidential Information............ 8
7. Duties, Responsibilities and Limitation of Liability 9
8. Term................................................ 11
9. Notices............................................. 12
10. Assignability....................................... 12
11. Waiver.............................................. 13
12. Force Majeure....................................... 13
13. Amendments.......................................... 14
14. Severability........................................ 14
15. Governing Law....................................... 14
Signatures................................................. 14
</TABLE>
<PAGE>
MUTUAL FUNDS SERVICE AGREEMENT
Table of Contents (continued)
-----------------------------
<TABLE>
<CAPTION>
Section/Paragraph Page
----
<S> <C>
Schedule A -- Fees and Expenses......................... A-1
Schedule B -- Fund Administration Services Description.. B-1
Schedule C -- Fund Accounting Services Description...... C-1
Schedule D -- Transfer Agency Services Description...... D-1
</TABLE>
<PAGE>
MUTUAL FUNDS SERVICE AGREEMENT
AGREEMENT made as of April 15, 1996 by and between UAM FUND
--
SERVICES, INC. ("UAMFSI"), a Delaware corporation, and CHASE GLOBAL FUNDS
SERVICES COMPANY ("Chase"), a Delaware corporation.
W I T N E S S E T H:
WHEREAS, UAM Funds Trust (the "Fund") is registered as an open-
end management, investment company under the Investment Company Act of
1940, as amended (the "1940 Act"), and currently offers for sale to
investors its shares in several investment portfolios ("Portfolios") and
classes of such Portfolios ("Classes");
WHEREAS, UAMFSI is responsible for the provision of certain fund
administration, fund accounting and transfer agent services with respect
to the Fund pursuant to the Agreement between UAMFSI and the Fund dated
April 15, 1996 (the "Administration Agreement"); and
--
WHEREAS, UAMFSI wishes to retain Chase to provide certain fund
administration, fund accounting and transfer agent services with respect
to the Fund, and Chase is willing to furnish such services;
NOW, THEREFORE, in consideration of the promises and mutual
covenants herein contained, it is agreed between the parties hereto as
follows:
1. APPOINTMENT. UAMFSI hereby appoints Chase to provide certain
fund administration, fund accounting and transfer agent services for the
Fund, subject to the supervision of UAMFSI and the Board of Trustees of
the Fund (the "Board"), for the period and on the terms set forth in this
Agreement. Chase accepts such appointment and agrees to furnish the
services herein set forth in return for the compensation as provided in
Paragraph 5 of, and Schedule A, to this Agreement.
1
<PAGE>
2. REPRESENTATIONS AND WARRANTIES.
(a) Chase represents and warrants to UAMFSI that:
(i) Chase is a corporation existing under the laws of the
State of Delaware;
(ii) Chase is duly qualified to carry on its business in
the Commonwealth of Massachusetts;
(iii) Chase is empowered under applicable laws and by
its Certificate of Incorporation and By-Laws to enter into and perform
this Agreement;
(iv) all requisite corporate proceedings have been taken
to authorize Chase to enter into and perform this Agreement;
(v) Chase has, and will continue to have, access to the
facilities, personnel and equipment required to fully perform its duties
and obligations hereunder;
(vi) Chase is registered as a transfer agent pursuant to
Section 17A of the Securities Exchange Act of 1934;
(vii) no legal or administrative proceedings have been
instituted or threatened which would impair Chase's ability to perform
its duties and obligations under this Agreement; and
(viii) Chase's entrance into this Agreement shall not
cause a material breach or be in material conflict with any other
agreement or obligation of Chase or any law or regulation applicable to
Chase;
(b) UAMFSI represents and warrants to Chase that:
(i) UAMFSI is a corporation existing under the laws of
the State of Delaware;
(ii) UAMFSI is duly qualified to carry on its business in
the Commonwealth of Massachusetts;
(iii) UAMFSI is empowered under applicable laws and by
its Certificate of Incorporation and By-Laws to enter into and perform
this Agreement;
2
<PAGE>
(iv) all requisite corporate proceedings have been taken
to authorize UAMFSI to enter into and perform this Agreement;
(v) UAMFSI has, and will continue to have, access to the
facilities, personnel and equipment required to fully perform its duties
and obligations hereunder;
(vi) no legal or administrative proceedings have been
instituted or threatened which would impair UAMFSI's ability to perform
its duties and obligations under this Agreement; and
(vii) UAMFSI's entrance into this Agreement shall not
cause a material breach or be in material conflict with any other
agreement or obligation of UAMFSI or any law or regulation applicable to
UAMFSI;
(c) UAMFSI represents and warrants to Chase with respect to the
Fund that:
(i) the Fund is a Maryland corporation, duly organized
and existing and in good standing under the laws of the State of
Maryland;
(ii) the Fund is an investment company properly
registered under the 1940 Act;
(iii) a registration statement for the Fund under the
Securities Act of 1933, as amended ("1933 Act") and the 1940 Act on Form
N-1A has been filed and will be effective and will remain effective
during the term of this Agreement, and all necessary filings under the
laws of the states will have been made and will be current during the
term of this Agreement; and
(iv) that outside counsel to the Fund has represented that
the Fund's registration statements comply in all material respects with
the Securities Act of 1933 ("1933 Act") and the 1940 Act (including the
rules and regulations thereunder) and none of the Fund's prospectuses
contain any untrue statement of material fact or omit to state a material
fact necessary to make the statements therein not misleading.
3
<PAGE>
3. Delivery of Documents. UAMFSI will promptly furnish to Chase
such copies, properly certified or authenticated, of contracts, documents
and other related information that Chase may reasonably request or
require to properly discharge its duties. Such documents may include but
are not limited to the following:
(a) Resolutions of the Fund's Board authorizing the appointment
of UAMFSI to provide certain fund administration, fund accounting and
transfer agency services to the Fund and approving this Agreement;
(b) UAMFSI's and the Fund's Articles of Incorporation;
(c) UAMFSI's and the Fund's By-Laws;
(d) Authorization by the Fund contained in the Administration
Agreement allowing UAMFSI to make representations to Chase on its behalf;
(e) The Fund's Notification of Registration on Form N-8A under
the 1940 Act, as filed with the Securities and Exchange Commission
("SEC");
(f) The Fund's registration statement including exhibits, as
amended, on Form N-1A (the "Registration Statement") under the 1933 Act
and the 1940 Act, as filed with the SEC;
(g) Copies of the Investment Advisory Agreements between the
Fund and its investment advisers (the "Advisory Agreements");
(h) Opinions of counsel and auditors' reports;
(i) The Fund's Prospectus(es) and Statement(s) of Additional
Information relating to all Portfolios and all amendments and supplements
thereto (such Prospectus(es) and Statement(s) of Additional Information
and supplements thereto, as presently in effect and as from time to time
hereafter amended and supplemented, herein called the "Prospectuses");
and
(j) Such other agreements as the Fund may enter into from time
to time including securities lending agreements, futures and commodities
account agreements, brokerage agreements, and options agreements.
4
<PAGE>
4. SERVICES PROVIDED
(a) Chase will provide the following services subject to the
control, direction and supervision of UAMFSI and the Fund's Board and in
compliance with the objectives, policies and limitations set forth in the
Fund's Registration Statement, Articles of Incorporation and By-Laws;
applicable laws and regulations; and all resolutions and policies
implemented by the Board:
(i) Fund Administration
(ii) Fund Accounting
(iii) Transfer Agency
A description of each of the above services is contained in Schedules B,
C, and D respectively, to this Agreement.
(b) Chase will also:
(i) provide office facilities with respect to the
provision of the services contemplated herein (which may be in the
offices of Chase or a corporate affiliate of Chase );
(ii) provide the services of individuals to serve as
officers of the Fund who will be designated by Chase with the approval of
UAMFSI, and elected by the Board;
(iii) provide or otherwise obtain personnel for
provision of the services contemplated herein;
(iv) furnish equipment and other materials, which Chase
believes are necessary or desirable for provision of the services
contemplated herein; and
(v) keep records relating to the services provided
hereunder in such form and manner as set forth in Schedules B, C and D in
accordance with the 1940 Act. To the extent required by Section 31 of the
1940 Act and the rules thereunder, Chase agrees that all such records
prepared or maintained by Chase relating to the services provided
hereunder are the property of UAMFSI and the Fund and will be preserved
for the periods prescribed under Rule 31a-2 under the 1940 Act,
5
<PAGE>
maintained at UAMFSI's and/or the Fund's expense, and made available in
accordance with such Section and rules. Chase further agrees to
surrender promptly to UAMFSI or the Fund upon its request and cease to
retain in its records and files those records and documents created and
maintained by Chase pursuant to this Agreement, unless otherwise required
by law.
5. FEES; EXPENSES; EXPENSE REIMBURSEMENT.
(a) As compensation for the services rendered to the Fund and
UAMFSI pursuant to this Agreement, UAMFSI shall pay Chase monthly fees
determined as set forth in Schedule A to this Agreement. Such fees are
to be billed monthly and shall be due and payable upon receipt of the
invoice. Upon any termination of this Agreement before the end of any
month, the fee for the part of the month before such termination shall be
prorated according to the proportion which such part bears to the full
monthly period and shall be payable upon the date of termination of this
Agreement.
(b) For the purpose of determining fees calculated as a function
of the Fund's assets, the value of the Fund's assets and net assets shall
be computed as required by its currently effective Prospectus, generally
accepted accounting principles, and resolutions of the Fund's Board.
(c) Chase may, in its sole discretion, from time to time employ
or associate with such person or persons as may be appropriate to assist
Chase in the performance of this Agreement. Such person or persons may
be officers and employees who are employed or designated as officers by
both Chase and the Fund. The compensation of such person or persons for
such employment shall be paid by Chase and no obligation will be
incurred by or on behalf of the Fund or UAMFSI in such respect.
(d) UAMFSI may request additional services, additional
processing, or special reports on behalf of the Fund or itself. UAMFSI
shall submit such requests in writing together with such specifications
and requirements documentation as may be
6
<PAGE>
reasonably required by Chase. If Chase elects to provide such services
or arrange for their provision, it shall be entitled to reasonable
additional fees and expenses at its customary rates and charges, or such
other fees, if any, mutually agreed to by Chase and UAMFSI.
(e) Chase will bear all of its own expenses in connection
with the performance of the services under this Agreement except as
otherwise expressly provided herein. UAMFSI agrees to promptly reimburse
Chase for any equipment and supplies specially ordered by or for UAMFSI
or the Fund through Chase and for any other expenses not contemplated by
this Agreement that Chase may incur on the Fund's and/or UAMFSI's behalf
at the Fund's and/or UAMFSI's request or as consented to by the Fund
and/or UAMFSI, provided that Chase will notify the Fund and/or UAMFSI of
the approximate amount of such expenses prior to incurring them. Such
other expenses to be incurred in the operation of the Fund and to be
borne by the Fund and/or UAMFSI, include, but are not limited to: taxes;
interest; brokerage fees and commissions; salaries and fees of officers
and directors who are not officers, directors, shareholders or employees
of Chase, or the Fund's investment advisers or distributor; SEC and state
Blue Sky registration and qualification fees, levies, fines and other
charges; EDGAR filing fees, processing services and related fees;
advisory and administration fees; charges and expenses of pricing and
data services, independent public accountants and custodians; insurance
premiums including fidelity bond premiums; auditing and legal expenses;
costs of maintenance of corporate existence; expenses of typesetting and
printing of prospectuses for regulatory purposes and for distribution to
current shareholders of the Fund (the Fund's distributor to bear the
expense of all other printing, production, and distribution of
prospectuses, statements of additional information, and marketing
materials); expenses of printing and production costs of shareholders'
reports and proxy statements and materials; costs and expenses of Fund
stationery and forms; costs and expenses of special telephone and data
lines and devices; costs associated with corporate, shareholder, and
Board meetings; trade association dues and expenses; and any
extraordinary expenses and
7
<PAGE>
other customary Fund expenses. In addition, Chase may utilize one or
more independent pricing services, approved from time to time by the
Fund's Board, to obtain securities prices and to act as backup to the
primary pricing services, in connection with determining the net asset
values of the Fund, and UAMFSI and/or the Fund will reimburse Chase for
the Fund's share of the cost of such services based upon the actual
usage, or a pro-rata estimate of the use, of the services for the benefit
of the Fund.
(f) All fees, out-of-pocket expenses, or additional charges of
Chase shall be billed on a monthly basis and shall be due and payable
upon receipt of the invoice.
Chase will render, after the close of each month in which
services have been furnished, a statement reflecting all of the charges
for such month. Charges remaining unpaid after thirty (30) days shall
bear interest in finance charges equivalent to, in the aggregate, the
Prime Rate (as determined by Chase) plus two percent per year and all
costs and expenses of effecting collection of any such sums, including
reasonable attorney's fees, shall be paid by UAMFSI to Chase.
In the event that UAMFSI is more than sixty (60) days delinquent
in its payments of monthly billings in connection with this Agreement
(with the exception of specific amounts which may be contested in good
faith by UAMFSI), this Agreement may be terminated upon thirty (30) days'
written notice to UAMFSI by Chase. UAMFSI must notify Chase in writing
of any contested amounts within thirty (30) days of receipt of a billing
for such amounts. Disputed amounts are not due and payable while they
are being disputed. The fees set forth in Schedule A may be changed from
time to time upon agreement of the parties.
6. PROPRIETARY AND CONFIDENTIAL INFORMATION. Chase agrees on
behalf of itself and its employees to treat confidentially and as
proprietary information of the Fund, all records and other information
relative to the Fund's prior, present or potential shareholders, and to
not use such records and information for any purpose other than
performance of Chase's responsibilities and duties hereunder. Chase may
8
<PAGE>
seek a waiver of such confidentiality provisions by furnishing reasonable
prior notice to the Fund and UAMFSI and obtaining approval in writing
from the Fund and UAMFSI, which approval shall not be unreasonably
withheld and may not be withheld where Chase may be exposed to civil or
criminal contempt proceedings for failure to comply, when requested to
divulge such information by duly constituted authorities. Waivers of
confidentiality are automatically effective without further action by
Chase with respect to Internal Revenue Service levies, subpoenas and
similar actions, or with respect to any request by the Fund or UAMFSI.
7. DUTIES, RESPONSIBILITIES, AND LIMITATION OF LIABILITY.
(a) In the performance of its duties hereunder, Chase shall be
obligated to act in good faith in performing the services provided for
under this Agreement. In performing its services hereunder, UAMFSI
represents and warrants that Chase shall be entitled to rely on any oral
or written instructions, notices or other communications, including
electronic transmissions, from UAMFSI and the Fund and its custodians,
officers and directors, investors, agents, legal counsel and other
service providers which Chase reasonably believes to be genuine, valid
and authorized, and that Chase shall also be entitled to consult with and
rely on the advice and opinions of outside legal counsel retained by
UAMFSI and/or the Fund, as necessary or appropriate.
(b) Chase shall not be liable for any error of judgment or
mistake of law or for any loss or expense suffered by the Fund or UAMFSI,
in connection with the matters to which this Agreement relates, except
for a loss or expense solely caused by or resulting from willful
misfeasance, bad faith or gross negligence on Chase's part in the
performance of its duties or from reckless disregard by Chase of its
obligations and duties under this Agreement. Any person, even though
also an officer, director, partner, employee or agent of Chase, who may
be or become an officer, director, partner, employee or agent of the
Fund, shall be deemed when rendering services to the Fund or acting on
any business of the Fund (other than services or business in connection
with Chase's duties hereunder) to be rendering such services to or acting
9
<PAGE>
solely for the Fund and not as an officer, director, partner, employee or
agent or person under the control or direction of Chase even though paid
by Chase. In no event shall Chase be liable to the Fund, UAMFSI or any
other party for special, indirect or consequential loss or damage of any
kind whatsoever (including but not limited to lost profits), even if
Chase has been advised of the likelihood of such loss or damage and
regardless of the form of action.
(c) Subject to Paragraph 7 (b) above, Chase shall not be
responsible for, and UAMFSI shall indemnify and hold Chase harmless from
and against, any and all losses, damages, costs, reasonable attorneys'
fees and expenses, payments, expenses and liabilities arising out of or
attributable to:
(i) all actions of Chase or its officers or agents
required to be taken pursuant to this Agreement;
(ii) the reliance on or use by Chase or its officers or
agents of information, records, or documents which are received by Chase
or its officers or agents and furnished to it or them by or on behalf of
UAMFSI and/or the Fund, and which have been prepared or maintained by
UAMFSI and/or the Fund or any third party on behalf of UAMFSI and/or the
Fund;
(iii) UAMFSI's refusal or failure to comply with the
terms of this Agreement or UAMFSI's lack of good faith, or its actions,
or lack thereof, involving negligence or willful misfeasance;
(iv) the breach of any representation or warranty of
UAMFSI hereunder;
(v) the taping or other form of recording of telephone
conversations or other forms of electronic communications with investors
and shareholders, or reliance by Chase on telephone or other electronic
instructions of any person acting on behalf of a shareholder or
shareholder account for which telephone or other electronic services have
been authorized;
10
<PAGE>
(vi) the reliance on or the carrying out by Chase or its
officers or agents of any proper instructions reasonably believed to be
duly authorized, or requests of the Fund or UAMFSI, or recognition by
Chase of any share certificates which are reasonably believed to bear the
proper signatures of the officers of the Fund and the proper
countersignature of any transfer agent or registrar of the Fund;
(vii) any delays, inaccuracies, errors in or
omissions from data provided to Chase by data and pricing services;
(viii) the offer or sale of shares by the Fund in
violation of any requirement under the Federal securities laws or
regulations or the securities laws or regulations of any state, or in
violation of any stop order or other determination or ruling by any
Federal agency or any state agency with respect to the offer or sale of
such shares in such state (1) resulting from activities, actions, or
omissions by the Fund or its other service providers and agents, or (2)
existing or arising out of activities, actions or omissions by or on
behalf of the Fund prior to the effective date of this Agreement;
(ix) any failure of the Fund's registration statement to
comply with the 1933 Act and the 1940 Act (including the rules and
regulations thereunder) and any other applicable laws, or any untrue
statement of a material fact or omission of a material fact necessary to
make any statement therein not misleading in a Fund's prospectus; and
(x) the actions taken by UAMFSI, its investment advisers,
and its distributor in compliance with applicable securities, tax,
commodities and other laws, rules and regulations, or the failure to so
comply.
8. TERM. This Agreement shall become effective on the date first
hereinabove written and shall continue for an initial term of one year,
unless sooner terminated, as provided herein. Thereafter, unless sooner
terminated, as provided herein, this Agreement shall continue in effect
from year to year provided its continuance is specificially approved by
UAMFSI. This Agreement may be modified or amended from time to time by
mutual agreement between the parties hereto. This
11
<PAGE>
Agreement may be terminated by either party on 90 days' prior written
notice; subject to renegotiation after the initial term. Upon termination
of this Agreement, UAMFSI shall pay to Chase such compensation and any
out-of-pocket or other reimbursable expenses which may become due or
payable under the terms hereof as of the date of termination or after the
date that the provision of services ceases, whichever is later.
9. NOTICES. Any notice required or permitted hereunder shall be in
writing to the parties at the following address (or such other address as
a party may specify by notice to the other):
If to UAMFSI:
UAM Fund Services, Inc.
211 Congress Street, 4th Floor
Boston, MA 02110
Attention: Gary L. French, President
Fax: (617) 542-7440
If to Chase:
Chase Global Funds Services Company
73 Tremont Street
Boston, MA 02108
Attention: Karl O. Hartmann, General Counsel
Fax: (617) 557-8616
Notice shall be effective upon receipt if by mail, on the date of
personal delivery (by private messenger, courier service or otherwise) or
upon confirmed receipt of telex or facsimile, whichever occurs first.
10. ASSIGNABILITY. This Agreement shall not be assigned by either
of the parties hereto without the prior consent in writing of the other
party; provided, however, that Chase may in its own discretion and
without limitation or prior consent of the Fund or UAMFSI, whenever and
on such terms and conditions as Chase deems necessary or appropriate,
subcontract, delegate or assign its rights, duties, obligations and
liabilities to subsidiaries or affiliates of Chase; provided, further,
that any such subcontract, agreement or understanding shall not discharge
Chase or its affiliates or
12
<PAGE>
subsidiaries, as the case may be, from its obligations hereunder.
Similarly, Chase or its affiliated subcontractor, designee, or assignee
may at its discretion, without notice to the Fund or UAMFSI, enter into
such subcontracts, agreements and understandings, whenever and on such
terms and conditions as Chase or they deem necessary or appropriate to
perform services hereunder, with non-affiliated third parties; provided,
that such subcontract, agreement or understanding shall not discharge
Chase, or its subcontractor, designee, or assignee, as the case may be,
from Chase's obligations hereunder. Chase or its affiliated
subcontractor, designee, or assignee shall, however, be discharged from
Chase's obligations hereunder, if UAMFSI, the Fund or its sponsor,
investment advisers or distributor require Chase or its affiliated
subcontractor, designee, or assignee to enter into any subcontract,
agreement or understanding to perform services hereunder with any non-
affiliated third party; and UAMFSI shall indemnify and hold harmless
Chase and its affiliated subcontractor, designee, or assignee from and
against, any and all losses, damages, costs, reasonable attorneys' fees
and expenses, payments, expenses and liabilities arising out of or
attributable to such subcontract, agreement or understanding.
11. WAIVER. The failure of a party to insist upon strict adherence
to any term of this Agreement on any occasion shall not be considered a
waiver nor shall it deprive such party of the right thereafter to insist
upon strict adherence to that term or any term of this Agreement. Any
waiver must be in writing signed by the waiving party.
12. FORCE MAJEURE. Chase shall not be responsible or liable for
any failure or delay in performance of its obligations under this
Agreement arising out of or caused, directly or indirectly, by
circumstances beyond its control, including without limitation, acts of
God, earthquakes, fires, floods, wars, acts of civil or military
authorities, or governmental actions, nor shall any such failure or delay
give the Fund the right to terminate this Agreement.
13
<PAGE>
13. AMENDMENTS. This Agreement may be modified or amended from time
to time by mutual written agreement between the parties. No provision of
this Agreement may be changed, discharged, or terminated orally, but only
by an instrument in writing signed by the party against which enforcement
of the change, discharge or termination is sought.
14. SEVERABILITY. If any provision of this Agreement is invalid or
unenforceable, the balance of the Agreement shall remain in effect, and
if any provision is inapplicable to any person or circumstance it shall
nevertheless remain applicable to all other persons and circumstances.
15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY THE
SUBSTANTIVE LAWS OF THE STATE OF NEW YORK, INCLUDING THE DETERMINATION OF
WHEN AN "ASSIGNMENT" HAS OCCURRED.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their officers designated below as of the date first
written above.
UAM FUND SERVICES, INC.
Attest: /s/ Karen C. Scrima By: /s/ Gary L. French
---------------------- ------------------------
Name: Karen C. Scrima Name: Gary L. French
---------------------- ------------------------
Title: President
------------------------
CHASE GLOBAL FUNDS
SERVICES COMPANY
Attest: /s/ Karl O. Hartmann By: /s/ Donald P. Hearn
---------------------- ------------------------
Name: Karl O. Hartmann Name: Donald P. Hearn
---------------------- ------------------------
Title: Chairman & CEO
------------------------
14
<PAGE>
MUTUAL FUNDS SERVICE AGREEMENT
SCHEDULE A
FEES AND EXPENSES
Fees for Fund Accounting, Fund Administration, and Transfer Agency
------------------------------------------------------------------
Services for UAM Funds, Inc., UAM Funds Trust and AEW Commercial Mortgage
-------------------------------------------------------------------------
Securities Fund, Inc. (the "Funds")
-----------------------------------
* 19 Basis Points on the first $200 million of total net assets of the
Funds,
* 11 Basis Points on the next $800 million of total net assets of the
Funds,
* 7 Basis Points on the next $2 billion of total net assets of the
Funds,
* 5 Basis Points on total net assets of the Funds in excess of $3
billion.
A minimum annual fee of $70,000 per Portfolio will apply and shall be
---------------------------------------------------------------------
phased in according to the following schedule:
----------------------------------------------
* $2,000 per month per Portfolio for the first six months of
service,
* $3,500 per month per Portfolio for the second six months of
service,
* $5,000 per month per Portfolio for the third six months of
service,
* $5,833 per month per Portfolio thereafter.
ALL PORTFOLIOS WILL HAVE AN ADDITIONAL MINIMUM ANNUAL CHARGE OF $20,000
PER pORTFOLIO CLASS OF SHARES. HOWEVER, THERE WILL BE NO EXTRA CHARGE
FOR AN ADDITIONAL CLASS OF SHARES WHERE THE PORTFOLIO'S FEES ALREADY
EXCEED THE MINIMUM APPLICABLE FEE BY $20,000.
THESE FEES DO NOT INCLUDE OUT-OF-POCKET EXPENSES, WHICH UNDER THE TERMS
OF THIS AGREEMENT WILL BE BILLED MONTHLY AND DUE UPON BILLING.
A-1
<PAGE>
MUTUAL FUNDS SERVICE AGREEMENT
SCHEDULE B
GENERAL DESCRIPTION OF FUND ADMINISTRATION SERVICES
I. FINANCIAL AND TAX REPORTING
A. Prepare agreed upon management reports and Board of Directors
materials such as unaudited financial statements and distribution
summaries.
B. Report Fund performance to outside services as directed by Fund
management or UAMFSI.
C. Calculate dividend and capital gain distributions in accordance
with distribution policies detailed in the Fund's prospectus(es).
Assist UAMFSI in making final determinations of distribution
amounts.
D. Estimate and recommend year-end dividend and capital gain
distributions necessary to establish the Portfolio's status as a
regulated investment company ("RIC") under Section 4982 of the
Internal Revenue Code of 1986, as amended (the "Code") regarding
minimum distribution requirements.
E. Working with the Fund's public accountants or other professionals,
prepare and file Fund's Federal tax return on Form 1120-RIC along
with all state and local tax returns where applicable. Prepare and
file Federal Excise Tax Return (Form 8613).
F. Prepare and file Fund's Form N-SAR with the SEC.
G. Prepare and coordinate printing of Fund's Semiannual and Annual
Reports to Shareholders.
H. Notify shareholders as to what portion, if any, of the
distributions made by the Fund's during the prior fiscal year were
exempt-interest dividends under Section 852 (b)(5)(A) of the Code.
I. Provide Form 1099-MISC to persons other than corporations (i.e.,
Directors to whom the Fund paid more than $600 during the year).
B-1
<PAGE>
J. Prepare and file California State Expense Limitation Report, if
applicable.
K. Provide financial information for Fund proxies and prospectuses
(Expense Table).
II. PORTFOLIO COMPLIANCE
A. Assist with monitoring each Portfolio's compliance with investment
restrictions (e.g., issuer or industry diversification, etc.)
listed in the current prospectus(es) and Statement(s) of
Additional Information, although primary responsibility for such
compliance shall remain with the Fund's investment adviser or
investment manager.
B. Assist with monitoring each Portfolio's compliance with the
requirements of Section 851 of the Code for qualification as a RIC
(i.e., 90% Income, 30% Income - Short Three, Diversification
Tests) although primary responsibility for such compliance shall
remain with the Fund's investment adviser or investment manager.
.
C. Assist with monitoring investment manager's compliance with Board
directives such as "Approved Issuers Listings for Repurchase
Agreements", Rule 17a-7, and Rule 12d-3 procedures, although
primary responsibility for such compliance shall remain with the
Fund's investment adviser or investment manager.
D. Mail quarterly requests for "Securities Transaction Reports" to
the Fund's Directors and Officers and "access persons" under the
terms of the Fund's Code of Ethics and SEC regulations.
E. Prepare and update compliance manuals and procedures.
III. REGULATORY AFFAIRS AND CORPORATE GOVERNANCE
A. Prepare and file post-effective amendments to the Fund's
registration statement on Form N-1A and supplements as needed.
B. Prepare and file proxy materials and administer shareholder
meetings.
C. Prepare and file all state registrations of the Fund's securities
including annual renewals, registering new Portfolios, preparing
and filing sales reports, filing copies of the registration
statement and final prospectus and statement of additional
information, and increasing registered amounts of securities in
individual states.
B-2
<PAGE>
D. Prepare Board materials for all Board meetings.
E. Assist with the review and monitoring of fidelity bond and errors
and omissions insurance coverage and make any related regulatory
filings.
F. Prepare and update documents such as charter document, by-laws,
foreign qualification filings.
G. Prepare and file Rule 24f-2 Notice.
H. Assist in identifying and monitoring pertinent regulatory and
legislative developments which may affect the Fund and, in
response to the results of such monitoring, coordinate and provide
support to UAMFSI, the Fund and the Fund's investment adviser with
respect to those developments and results, including support with
respect to routine regulatory examinations or investigations of
the Fund, and with respect to such matters, to work in conjunction
with outside counsel, auditors and other professional
organizations engaged by the Fund.
I. File copies of financial reports to shareholders with the SEC
under Rule 30b2-1.
J. Liaison with the Fund's Distributor and outside counsel.
IV. GENERAL ADMINISTRATION
A. Furnish officers of the Fund, subject to reasonable UAMFSI and
Board approval.
B. Prepare Fund or Portfolio expense projections, establish accruals
and review on a periodic basis, including expenses based on a
percentage of Fund's average daily net assets (advisory and
administrative fees) and expenses based on actual charges
annualized and accrued daily (audit fees, registration fees,
directors' fees, etc.).
C. For new Portfolios, obtain Employer or Taxpayer Identification
Number and CUSIP numbers. Estimate organizational costs and
expenses and monitor against actual disbursements.
D. Coordinate all communications and data collection with regard to
any regulatory examinations and yearly audits by independent
accountants.
B-3
<PAGE>
MUTUAL FUNDS SERVICE AGREEMENT
SCHEDULE C
GENERAL DESCRIPTION OF FUND ACCOUNTING SERVICES
I. General Description
Chase shall provide the following accounting services to the Fund:
A. Maintenance of the books and records and accounting controls for
the Fund's assets, including records of all securities
transactions;
B. Calculation of each Portfolio's Net Asset Value in accordance
with the prospectus and once the Portfolio meets eligibility
requirements, transmission to NASDAQ and to such other entities
as directed by the Fund and/or UAMFSI;
C. Accounting for dividends and interest received and distributions
made by the Fund;
D. Production of transaction data, financial reports and such other
periodic and special reports as UAMFSI and/or the Board may
reasonably request;
E. Liaison with the Fund's independent auditors; and
F. A listing of reports that will be available to UAMFSI and the
Fund is included below.
II. Domestic Fund Accounting Daily Reports
A. General Ledger Reports
1. Trial Balance Report
2. General Ledger Activity Report
C-1
<PAGE>
B. Portfolio Reports
1. Portfolio Report
2. Cost Lot Report
3. Purchase Journal
4. Sell/Maturity Journal
5. Amortization/Accretion Report
6. Maturity Projection Report
C. Pricing Reports
1. Pricing Report
2. Pricing Report by Market Value
3. Pricing Variance by % Change
4. NAV Report
5. NAV Proof Report
6. Money Market Pricing Report
D. Accounts Receivable/Payable Reports
1. Accounts Receivable for Investments Report
2. Accounts Payable for Investments Report
3. Interest Accrual Report
4. Dividend Accrual Report
E. Other Reports
1. Dividend Computation Report
2. Cash Availability Report
3. Settlement Journal
III. International Fund Accounting Daily Reports
A. General Ledger
1. Trial Balance Report
2. General Ledger Activity Report
B. Portfolio Reports
1. Portfolio Report by Sector
2. Cost Lot Report
3. Purchase Journal
4. Sell/Maturity Journal
C. Currency Reports
1. Currency Purchase /Sales Journal
2. Currency Valuation Report
C-2
<PAGE>
D. Pricing Reports
1. Pricing Report by Country
2. Pricing Report by Market Value
3. Price Variance by % Change
4. NAV Report
5. NAV Proof Report
E. Accounts Receivable/Payable Reports
1. Accounts Receivable for Investments Sold/Matured
2. Accounts Payable for Investments Purchased
3. Accounts Receivable for Forward Exchange Contracts
4. Accounts Payable for Forward Exchange Contracts
5. Interest Receivable Valuation
6. Interest Recoverable Withholding Tax
7. Dividends Receivable Valuation
8. Dividends Recoverable Withholding Tax
F. Other Reports
1. Exchange Rate Report
IV. Monthly Fund Accounting Reports
A. Standard Reports
1. Cost Proof Report
2. Transaction History Report
3. Realized Gain/Loss Report
4. Interest Record Report
5. Dividend Record Report
6. Broker Commission Totals
7. Broker Principal Trades
8. Shareholder Activity Report
9. Fund Performance Report
B. International Reports
1. Forward Contract Transaction History Report
2. Currency Gain/Loss Report
C-3
<PAGE>
MUTUAL FUNDS SERVICE AGREEMENT
SCHEDULE D
GENERAL DESCRIPTION OF TRANSFER AGENCY SERVICES
The following is a general description of the transfer agency
services Chase shall provide to the Fund.
A. Shareholder Recordkeeping. Maintain records showing for each
Fund shareholder the following: (i) name, address, appropriate
tax certification and tax identifying number; (ii) number of
shares of each Portfolio and/or Class; (iii) historical
information including, but not limited to, dividends paid and
date and price of all transactions, including individual
purchases and redemptions, with appropriate supporting documents;
and (iv) any dividend reinvestment order, application, dividend
to a specific address and correspondence relating to the current
maintenance of the account.
B. Shareholder Issuance. Record the issuance of shares of each
Portfolio and/or Class. Except as specifically agreed in writing
between Chase and the Fund, Chase shall have no obligation when
countersigning and issuing and/or crediting shares to take
cognizance of any other laws relating to the issue and sale of
such shares except insofar as policies and procedures of the
Stock Transfer Association recognize such laws.
C. Purchase Orders. Process all orders for the purchase of
shares of the Fund in accordance with the Fund's current
prospectus, including electronic transmissions, which the Fund
acknowledges it has authorized. Upon receipt of any check or
other payment for purchase of shares of the Fund from an
investor, Chase will (i) stamp the order or other documentation
with the date and time of receipt, (ii) forthwith process the
same for collection, (iii) determine the amounts thereof due the
Fund, and notify the Fund of such determination and deposit, such
notification to be given on a daily basis of the total amounts
determined and deposited to the Fund's custodian bank account
during such day. Chase shall then credit the share account of
the investor with the number of Fund shares to be purchased
according to the price of the Fund's shares in effect for
purchases made on the date such payment is received by the Chase,
as set forth in the Fund's current prospectus and shall promptly
mail a confirmation of said purchase to the investor, all subject
to any instructions which the Fund may give to Chase with respect
to the timing or manner of acceptance of orders for shares
relating to payments so received by it. Any purchase order
received by the Chase, which is deemed not in good order by the
Chase, will be rejected immediately.
D-1
<PAGE>
D. Redemption orders. Receive and stamp with the date and time
of receipt all requests for redemptions or repurchase of shares
held in certificate or non-certificate form, and process
redemptions and repurchase requests as follows: (i) if such
certificate or redemption request complies with the applicable
standards approved by the Fund, Chase shall on each business day
notify the Fund of the total number of shares presented and
covered by such requests received by Chase on such day; (ii) on
or prior to the seventh calendar day succeeding any such requests
received by Chase, Chase shall notify the Custodian, subject to
instructions from the Fund, to transfer monies to such account as
designated by Chase for such payment to the redeeming shareholder
of the applicable redemption or repurchase price; and (iii) if
any such certificate or request for redemption of repurchase does
not comply with applicable standards, Chase shall promptly notify
the investor of such fact, together with the reason therefor, and
shall effect such redemption at the Portfolio's price next
determined after receipt of documents complying with said
standards of, at such other time as the Fund shall so direct.
E. Telephone Orders. Process redemptions, exchanges and
transfers of Fund shares upon telephone instructions from
qualified shareholders in accordance with the procedures set
forth in the Fund's current prospectus. Chase shall be permitted
to redeem, exchange and/or transfer Fund shares from any account
for which such services have been authorized, including
electronic transmissions.
F. Transfer of Shares. Upon receipt by Chase of documentation in
proper form to effect a transfer of shares, including in the case
of shares for which certificates have been issued, the share
certificates in proper form for transfer, Chase will register
such transfer on the Fund's shareholder records maintained by
Chase pursuant to instructions received from the transferor in
good form, cancel the certificates representing such shares, if
any, and if so requested, countersign, register, issue and mail
by first class mail new certificates for the same or a smaller
whole number of shares.
G. Shareholder Communications. Address and mail all
communications by the Fund to its shareholders promptly following
the delivery by the Fund of the material to be mailed.
H. Proxy Materials. Prepare shareholder lists, mail and certify as
to the mailing of proxy materials, receive the tabulated proxy
cards, render periodic reports to the Fund on the progress of
such tabulation, and provide the Fund with inspectors of election
at any meeting of shareholders.
D-2
<PAGE>
I. SHARE CERTIFICATES. If a shareholder of the Fund requests a
certificate representing his shares, Chase as Transfer Agent,
will countersign and mail, a share certificate to the investor at
his/her address as it appears on the Fund's transfer books.
Chase shall supply, at the expense of the Fund a supply of blank
share certificates. The certificates shall be properly signed,
manually or by facsimile, as authorized by the Fund, and shall
bear the Fund's seal or facsimile; and notwithstanding the death,
resignation or removal of any officers of the Fund authorized to
sign certificates, Chase may, until otherwise directed by the
Fund, continue to countersign certificates which bear the manual
or facsimile signature of such officer.
J. RETURNED CHECKS. In the event that any check or other order
for the payment of money is returned unpaid for any reason, Chase
will take such steps, including redepositing the check for
collection, returning the check to the investor, or redeeming
appropriate shares as Chase may, at its discretion, deem
appropriate and notify the Fund of such action, or as the Fund
may instruct. However, the Fund remains ultimately liable for any
returned checks of its shareholders.
K. SHAREHOLDER CORRESPONDENCE. Acknowledge all correspondence
from shareholders relating to their share accounts and undertake
such other shareholder correspondence as may from time to time be
mutually agreed upon.
L. TAX REPORTING. Chase shall issue appropriate shareholder tax
forms on an annual basis.
M. ESCHEATMENT. All Fund assets shall be subject to the escheatment
laws of the Commonwealth of Massachusetts, including those which
relate to reciprocal agreements with other states.
N. DIVIDEND DISBURSING. Chase will serve as the Fund's dividend
disbursing agent. Chase will prepare and mail checks, place wire
transfers, and credit income and capital gain payments to
shareholders. UAMFSI and/or the Fund will advise Chase of the
declaration of any dividend or distribution and the record and
payable date thereof at least five (5) days prior to the record
date. Chase will, on or before the payment date of any such
dividend or distribution, notify the Fund's Custodian of the
estimated amount required to pay any portion of such dividend or
distribution payable in cash, and on or before the payment date
of such distribution, the Fund will instruct its Custodian to
make available to Chase sufficient funds for the cash amount to
be paid out. If a shareholder is entitled to receive additional
shares by virtue of any such distribution or dividend,
appropriate credits will be made to each shareholder's account.
D-3
<PAGE>
EXHIBIT 11
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectuses and
Statements of Additional Information constituting parts of this Post-Effective
Amendment No. 13 to the registration statement on Form N-1A (the "Registration
Statement") of our reports dated June 14, 1996, relating to the financial
statements and financial highlights appearing in the April 30, 1996 Annual
Reports to Shareholders of the 7 funds comprising UAM Funds Trust, Inc., which
are also incorporated by reference into the Registration Statement. We also
consent to the references to us under the headings "Financial Highlights,"
"Accountants" and "Reports" in the Prospectuses and under the heading "Financial
Statements" in the Statements of Additional Information.
/s/ Price Waterhouse LLP
- ------------------------
Price Waterhouse LLP
Boston, Massachusetts
August 28, 1996
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