<PAGE>
- -------------------------------------------------------------------------------
UAM FUNDS
IRC ENHANCED INDEX PORTFOLIO
- -------------------------------------------------------------------------------
OFFICERS AND TRUSTEES
Norton H. Reamer Peter M. Whitman, Jr.
Trustee, President Trustee
and Chairman
Mary Rudie Barneby William H. Park
Trustee and Executive Vice President and
Vice President Assistant Treasurer
John T. Bennett, Jr. Karl O. Hartmann
Trustee Secretary
J. Edward Day Robert R. Flaherty
Trustee Treasurer
Philip D. English Harvey M. Rosen
Trustee Assistant Secretary
William A. Humenuk
Trustee
- -------------------------------------------------------------------------------
INVESTMENT ADVISER
Investment Research Company
111 West Jackson Boulevard
Chicago, IL 60604
- -------------------------------------------------------------------------------
ADMINISTRATOR
UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110
- -------------------------------------------------------------------------------
CUSTODIAN
The Bank of New York
60 Wall Street, New York, NY 10260
- -------------------------------------------------------------------------------
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young LLP
2600 One Commerce Square
Philadelphia, PA 19103
- -------------------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
160 Federal Street
Boston, MA 02110
- -------------------------------------------------------------------------------
DISTRIBUTOR
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
- -------------------------------------------------------------------------------
This report has been prepared for shareholders and may be distributed to
others only if preceded or accompanied by a current prospectus.
- -------------------------------------------------------------------------------
UAM FUNDS
IRC
ENHANCED
INDEX
PORTFOLIO
- -------------------------------------------------------------------------------
ANNUAL REPORT
APRIL 30, 1996
<PAGE>
Dear Shareholders:
OVERVIEW OF THE IRC INVESTMENT PHILOSOPHY
Based upon years of stock market research and the historical performance
record of various styles of active portfolio management, IRC believes that
excess performance can best be achieved by applying a disciplined quantitative
process to identify securities that are likely to outperform a chosen
benchmark, such as the S&P 500 Index. Risk control is essential to this
process, and IRC believes that consistent (if sometimes only modest) excess
returns with minimal downside risk relative to the benchmark can best meet a
shareholder's objective of long-term wealth accumulation.
Over the past nine years, a similar investment approach has been used
successfully for several of IRC's large institutional clients. The IRC
Enhanced Index Portfolio (the "Portfolio") provides smaller institutional and
individual investors with the opportunity to invest in a broadly diversified
portfolio of U.S. equities. The Portfolio is sector weighted to match the S&P
500 Index. The Portfolio is managed with the objective of outperforming the
S&P 500 Index over time but with no greater (and usually less) volatility.
PERFORMANCE REVIEW
The Portfolio commenced on January 23, 1996 when it received a major
contribution of $5.2 million from an employee defined contribution plan.
Through April 30th, the portfolio return of 3.20% has fallen behind the
S&P 500 Index return of 3.40% for two primary reasons. First, the Portfolio
experienced a redemption of 26% of its assets on March 7th, immediately prior
to the most significant decline experienced by the market so far this year. On
March 8th, the S&P 500 Index declined 20.15 points (3.1%) when the Federal
Government reported that employment was stronger than anticipated by
professional economists. Investors feared that lower unemployment would lead
to a stronger economy resulting in higher levels of inflation. As a result,
interest rates moved rapidly higher and investors sold stocks fearing that
equity valuations would be adversely impacted by higher interest rates. The
Portfolio was nearly fully invested in equity securities immediately prior to
this massive redemption. Once notified of the redemption, shares of securities
were sold at considerable discounts from closing prices on March 7th. This
single factor accounted for about half of the performance shortfall.
A second factor responsible for the underperformance is attributable to
IRC's philosophy which purposely avoids overvalued securities. The first step
in the IRC process is to eliminate stocks with low dividend yields. The firm
believes that this will protect investors in the event of a major market
decline. IRC's research has proven that stocks that are excessively valued
(such as those with a low dividend yield) suffer most during significant
market corrections. Although the overall stock market has advanced since
initial funding of the Portfolio, interest rates have risen considerably. This
event has had a relative negative impact on stocks that pay high dividends.
The Portfolio continues to be defensively positioned relative to the overall
market. As of April 30th, the Portfolio possessed an average dividend yield of
2.8% relative to the market dividend yield of 2.1%. Further, the average P/E
ratio for the Portfolio was 16.9 relative to the market P/E of 19.2. IRC
believes that in the event of a significant market downturn, shareholders of
the Portfolio may be less likely to experience underperformance relative to
the S&P 500 Index.
Sincerely,
Investment Research Company
The investment results presented in the Adviser's letter represent past
performance and should not be construed as a guarantee of future results. If
the Adviser did not have temporary fee waivers and did not assume expenses on
behalf of the Portfolio, total return for the Portfolio would have been lower.
The investment return and principal value of an investment will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than their
original cost.
1
<PAGE>
Performance Comparison
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 PURCHASE IN THE IRC ENHANCED
INDEX PORTFOLIO AND THE STANDARD & POOR'S 500 INDEX (S&P 500)
----------------------------------------
CUMULATIVE TOTAL RETURN**
FOR PERIOD ENDED APRIL 30, 1996
----------------------------------------
SINCE 1/23/96*++
----------------------------------------
3.20%
----------------------------------------
[PERFORMANCE COMPARISON GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
IRC Enhanced
Index Portfolio S&P 500 Index+
<S> <C> <C>
1/23/96*++ $10,000 $10,000
4/30/96 $10,320 $10,340
</TABLE>
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate. When shares are redeemed, they may
be worth more or less than the original cost.
* Commencement of Operations
** Total return of the Portfolio reflects fees waived and expenses assumed by
the Adviser. Without such waiver of fees and expenses assumed, total return
would be lower.
+ The comparative index is not adjusted to reflect expenses or other fees that
the SEC requires to be reflected in the Portfolio's performance. The fees, if
reflected, would reduce the performance quoted. The Portfolio's performance
assumes the reinvestment of all dividends and distributions. The comparative
index has been adjusted to reflect reinvestment of dividends on securities in
the index.
++ For comparative purposes, the value of the S&P 500 Index on 1/31/96 is used
as the beginning value on 1/23/96.
Definition of the Comparative Index
-----------------------------------
The S&P 500 Index is an unmanaged index composed of 400 industrial, 40
financial, 40 utilities and 20 transportation stocks.
Please note that one cannot invest in an unmanaged index.
2
<PAGE>
IRC ENHANCED INDEX PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
April 30, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (000)+
<S> <C> <C>
- --------------------------------------------------------------------------------
COMMON STOCKS (100.7%)
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE (3.0%)
Lockheed Martin Corp. .......................................... 400 $ 32
Rockwell International Corp. ................................... 1,100 64
United Technologies Corp. ...................................... 200 22
-------
118
- --------------------------------------------------------------------------------
AUTOMOTIVE (3.8%)
Ford Motor Co. ................................................. 2,800 100
General Motors Corp. ........................................... 900 49
-------
149
- --------------------------------------------------------------------------------
BANKS (7.2%)
Bank of Boston Corp. ........................................... 2,200 106
Barnett Banks, Inc. ............................................ 700 44
First Union Corp. .............................................. 1,300 80
Fleet Financial Group, Inc. .................................... 600 26
KeyCorp. ....................................................... 600 23
US Bancorp...................................................... 100 3
-------
282
- --------------------------------------------------------------------------------
BEVERAGES, FOOD & TOBACCO (8.4%)
Anheuser-Busch Cos., Inc. ...................................... 1,400 94
ConAgra, Inc. .................................................. 600 23
Coors (Adolph), Inc., Class B................................... 1,100 20
*Earthgrains Co. ............................................... 56 2
Philip Morris Cos., Inc. ....................................... 1,100 99
Sara Lee Corp. ................................................. 2,200 68
Sysco Corp. .................................................... 800 26
-------
332
- --------------------------------------------------------------------------------
BROADCASTING AND PUBLISHING (1.6%)
Dun & Bradstreet Corp. ......................................... 1,000 61
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
IRC ENHANCED INDEX PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS--(CONTINUED)
April 30, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (000)+
<S> <C> <C>
- --------------------------------------------------------------------------------
COMMON STOCKS--(CONTINUED)
- --------------------------------------------------------------------------------
CAPITAL EQUIPMENT (7.7%)
Crane Co. ...................................................... 1,300 $ 54
Deere & Co. .................................................... 300 12
General Electric Co. ........................................... 1,800 140
Johnson Controls, Inc. ......................................... 400 29
National Service Industries, Inc. .............................. 1,000 37
Snap-On, Inc. .................................................. 500 24
Textron, Inc. .................................................. 100 9
-------
305
- --------------------------------------------------------------------------------
CHEMICALS (5.5%)
DuPont (E.I.) de Nemours & Co. ................................. 100 8
Goodrich (B.F.) Co. ............................................ 2,400 95
Monsanto Co. ................................................... 400 61
PPG Industries, Inc. ........................................... 500 25
Rohm & Haas Co. ................................................ 400 27
-------
216
- --------------------------------------------------------------------------------
COMPUTERS (3.4%)
*Ceridian Corp. ................................................ 200 10
*Compaq Computer Corp. ......................................... 600 28
*Sun Microsystems, Inc. ........................................ 1,800 97
-------
135
- --------------------------------------------------------------------------------
CONSTRUCTION (0.6%)
Armstrong World Industries, Inc. ............................... 400 23
- --------------------------------------------------------------------------------
CONSUMER NON-DURABLES (3.2%)
Avon Products, Inc. ............................................ 300 27
Clorox Co. ..................................................... 600 50
Heinz (H.J.) Co. ............................................... 1,400 47
-------
124
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
IRC ENHANCED INDEX PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS--(CONTINUED)
April 30, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (000)+
<S> <C> <C>
- --------------------------------------------------------------------------------
COMMON STOCKS--(CONTINUED)
- --------------------------------------------------------------------------------
ELECTRONICS (2.7%)
EG&G, Inc. ..................................................... 1,200 $ 26
Hewlett-Packard Co. ............................................ 400 42
Texas Instruments, Inc. ........................................ 700 40
-------
108
- --------------------------------------------------------------------------------
ENERGY (9.4%)
Chevron Corp. .................................................. 400 23
Enron Corp. .................................................... 700 28
Exxon Corp. .................................................... 700 59
Halliburton Co. ................................................ 500 29
Mobil Corp. .................................................... 700 81
Royal Dutch Petroleum Co.--New York Shares...................... 400 57
Texaco, Inc. ................................................... 1,100 94
-------
371
- --------------------------------------------------------------------------------
FINANCIAL SERVICES (3.7%)
Ahmanson (H.F.) & Co. .......................................... 800 19
Federal National Mortgage Association........................... 2,500 77
Merrill Lynch & Co., Inc. ...................................... 800 48
-------
144
- --------------------------------------------------------------------------------
HEALTH CARE (2.1%)
Becton, Dickinson & Co. ........................................ 1,000 81
- --------------------------------------------------------------------------------
INSURANCE (2.6%)
Allstate Corp. ................................................. 1,500 58
Chubb Corp. .................................................... 300 28
Transamerica Corp. ............................................. 200 15
-------
101
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
IRC ENHANCED INDEX PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS--(CONTINUED)
April 30, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (000)+
<S> <C> <C>
- --------------------------------------------------------------------------------
COMMON STOCKS--(CONTINUED)
- --------------------------------------------------------------------------------
METALS (1.5%)
Aluminum Company of America..................................... 500 $ 31
Asarco, Inc. ................................................... 400 13
Phelps Dodge Corp. ............................................. 200 15
-------
59
- --------------------------------------------------------------------------------
MINING (1.1%)
Homestake Mining Co. ........................................... 700 14
Newmont Mining Corp. ........................................... 500 29
-------
43
- --------------------------------------------------------------------------------
OFFICE EQUIPMENT (2.9%)
Harris Corp. ................................................... 1,200 74
Pitney Bowes, Inc. ............................................. 800 39
-------
113
- --------------------------------------------------------------------------------
PAPER & PACKAGING (2.9%)
Avery Dennison Corp. ........................................... 500 28
Kimberly-Clark Corp. ........................................... 1,000 73
Weyerhaeuser Co. ............................................... 300 15
-------
116
- --------------------------------------------------------------------------------
PHARMACEUTICALS (8.2%)
Bristol-Myers Squibb Co. ....................................... 400 33
Johnson & Johnson............................................... 700 65
Lilly (Eli) & Co. .............................................. 500 30
Merck & Co., Inc. .............................................. 600 36
Pharmacia & Upjohn, Inc. ....................................... 2,500 96
Schering-Plough Corp. .......................................... 1,100 63
-------
323
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
IRC ENHANCED INDEX PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS--(CONTINUED)
April 30, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (000)+
<S> <C> <C>
- --------------------------------------------------------------------------------
COMMON STOCKS--(CONTINUED)
- --------------------------------------------------------------------------------
RETAIL (4.3%)
Gap, Inc. ...................................................... 1,200 $ 36
Giant Food, Inc., Class A....................................... 700 22
Longs Drug Stores, Inc. ........................................ 600 27
Sears, Roebuck & Co. ........................................... 1,200 60
TJX Companies, Inc. ............................................ 800 24
-------
169
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS (7.6%)
Bell Atlantic Corp. ............................................ 800 52
BellSouth Corp. ................................................ 2,700 108
Sprint Corp. ................................................... 800 34
360 Communications Co. ......................................... 266 6
US West Communications Group.................................... 3,000 98
-------
298
- --------------------------------------------------------------------------------
TRANSPORTATION (1.7%)
Burlington Northern Santa Fe.................................... 400 35
Norfolk Southern Corp. ......................................... 400 34
-------
69
- --------------------------------------------------------------------------------
UTILITIES (5.6%)
American Electric Power Co. .................................... 600 24
Entergy Corp. .................................................. 2,000 53
GTE Corp. ...................................................... 2,300 100
People's Energy Corp. .......................................... 1,400 44
-------
221
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS (COST $3,801).................................. 3,961
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
IRC ENHANCED INDEX PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS--(CONTINUED)
April 30, 1996
<TABLE>
<CAPTION>
VALUE
(000)+
<S> <C>
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (-0.7%)
- --------------------------------------------------------------------------------
Receivable for Investments Sold................................ $ 121
Dividends Receivable........................................... 6
Payable to Custodian Bank...................................... (100)
Payable for Portfolio Shares Redeemed.......................... (28)
Payable for Administrative Fees................................ (2)
Payable to Investment Adviser.................................. (1)
Payable for Trustees' Fees..................................... (1)
Other Liabilities.............................................. (23)
-------
(28)
- --------------------------------------------------------------------------------
NET ASSETS (100%)
Applicable to 381,777 outstanding Institutional Class shares
(unlimited authorization, no par value)....................... $3,933
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE........ $10.30
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
+ See Note A to Financial Statements.
* Non-Income Producing Security.
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
IRC ENHANCED INDEX PORTFOLIO
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
JANUARY 23,
1996* TO
APRIL 30,
(In Thousands) 1996
- --------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Dividends....................................................... $ 36
Interest........................................................ 4
- --------------------------------------------------------------------------------
Total Income................................................... 40
- --------------------------------------------------------------------------------
EXPENSES
Investment Advisory Fees--Note B
Basic Fees..................................................... $ 9
Less: Fees Waived.............................................. (9) --
-----
Administrative Fees--Note C..................................... 9
Audit Fees...................................................... 12
Printing Fees................................................... 8
Custodian Fees.................................................. 2
Trustees' Fees--Note F.......................................... 1
Other Expenses.................................................. 3
Expenses Assumed by Adviser--Note B............................. (3)
- --------------------------------------------------------------------------------
Total Expenses................................................. 32
@Expense Offset--Note A......................................... --
- --------------------------------------------------------------------------------
Net Expenses................................................... 32
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME............................................ 8
- --------------------------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS................................. 14
NET CHANGE IN UNREALIZED APPRECIATION ON INVESTMENTS............. 160
- --------------------------------------------------------------------------------
NET GAIN ON INVESTMENTS.......................................... 174
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............. $ 182
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
* Commencement of Operations
@ Amount represents Custodian balance credits of $231
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
IRC ENHANCED INDEX PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
JANUARY 23,
1996* TO
APRIL 30,
(In Thousands) 1996
- --------------------------------------------------------------------------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income.............................................. $ 8
Net Realized Gain.................................................. 14
Net Change in Unrealized Appreciation.............................. 160
- --------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations.............. 182
- --------------------------------------------------------------------------------
DISTRIBUTIONS:
Net Investment Income.............................................. (8)
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS: (1)
Issued--Regular.................................................... 6,002
--In Lieu of Cash Distributions.................................... 8
Redeemed........................................................... (2,251)
- --------------------------------------------------------------------------------
Net Increase from Capital Share Transactions...................... 3,759
- --------------------------------------------------------------------------------
Total Increase.................................................... 3,933
Net Assets:
Beginning of Period............................................... --
- --------------------------------------------------------------------------------
End of Period (2)................................................. $ 3,933
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1)Shares Issued and Redeemed:
Shares Issued..................................................... 597
In Lieu of Cash Distributions..................................... 1
Redeemed.......................................................... (216)
- --------------------------------------------------------------------------------
382
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(2)Net Assets Consist of:
Paid in Capital................................................... $ 3,759
Accumulated Net Realized Gain..................................... 14
Unrealized Appreciation........................................... 160
- --------------------------------------------------------------------------------
$ 3,933
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
* Commencement of Operations
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
IRC ENHANCED INDEX PORTFOLIO
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
<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
expenses 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%**.
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
IRC ENHANCED INDEX PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
UAM Funds Trust and UAM Funds, Inc. (collectively the "UAM Funds") were
organized on May 18, 1994 and October 11, 1988, respectively, and are
registered under the Investment Company Act of 1940, as amended, as open-end
management investment companies. The IRC Enhanced Index Portfolio (the
"Portfolio"), a portfolio of UAM Funds Trust, began operations on January 23,
1996. At April 30, 1996, the UAM Funds were comprised of thirty-seven active
portfolios. The financial statements of the remaining portfolios are presented
separately.
A. SIGNIFICANT ACCOUNTING POLICIES: The following significant accounting
policies are in conformity with generally accepted accounting principles for
investment companies. Such policies are consistently followed by the Portfolio
in the preparation of its financial statements. Generally accepted accounting
principles may require management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements.
Actual results may differ from those estimates.
1. SECURITY VALUATION: Securities listed on a securities exchange for
which market quotations are readily available are valued at the last quoted
sales price as of the close of the exchange on the day the valuation is
made or, if no sale occurred on such day, at the bid price on such day.
Price information on listed securities is taken from the exchange where the
security is primarily traded. Over-the-counter and unlisted securities are
valued at the current bid price. Short-term investments that have remaining
maturities of sixty days or less at time of purchase are valued at
amortized cost, if it approximates market value. The value of other assets
and securities for which no quotations are readily available is determined
in good faith at fair value using methods determined by the Board of
Trustees.
2. FEDERAL INCOME TAXES: It is the Portfolio's intention to qualify as a
regulated investment company under Subchapter M of the Internal Revenue
Code and to distribute all of its taxable income. Accordingly, no provision
for Federal income taxes is required in the financial statements.
At April 30, 1996, the Portfolio's cost for Federal income tax purposes
was approximately $3,801,000. Net unrealized appreciation for Federal
income tax purposes aggregated approximately $160,000, of which
approximately $237,000 related to appreciated securities and approximately
$77,000 related to depreciated securities.
3. DISTRIBUTIONS TO SHAREHOLDERS: The Portfolio will normally distribute
substantially all of its net investment income quarterly. Any realized net
capital gains will be distributed annually. All distributions are recorded
on ex-dividend date.
The amount and character of income and capital gain distributions to be
paid are determined in accordance with Federal income tax regulations which
may differ from generally accepted accounting principles.
4. OTHER: Security transactions are accounted for on trade date, the date
the trade was executed. Costs used in determining realized gains and losses
on the sale of investment securities are based on the specific
identification method. Dividend income is recorded on the ex-dividend date.
Interest income is recognized on the accrual basis. Most expenses of the
UAM Funds can be directly attributed to a particular portfolio. Expenses
which cannot be directly attributed are apportioned among the portfolios of
the UAM Funds based on their relative net assets. Additionally, certain
expenses are apportioned among the portfolios
12
<PAGE>
IRC ENHANCED INDEX PORTFOLIO
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
of the UAM Funds and AEW Commercial Mortgage Securities Fund, Inc. ("AEW"),
an affiliated closed-end management investment company, based on their
relative net assets. Custodian fees for the Portfolio have been increased
to include expense offsets for custodian balance credits.
B. ADVISORY SERVICES: Under the terms of an investment advisory agreement,
Investment Research Company (the "Adviser"), a wholly-owned subsidiary of
United Asset Management Corporation ("UAM"), provides investment advisory
services to the Portfolio at a fee calculated at an annual rate of 0.70% of
average daily net assets. The Adviser has voluntarily agreed to waive a
portion of its advisory fees and to assume expenses, if necessary, to comply
with the most stringent expense limits prescribed by any state in which the
Portfolio's shares are offered for sale. The most stringent current state
restrictions limit the Portfolio's allowable operating expenses in a fiscal
year to 2.50% of the first $30 million of average daily net assets, 2.00% of
the next $70 million of average daily net assets and 1.50% of average daily
net assets in excess of $100 million.
C. ADMINISTRATIVE SERVICES: Effective April 15, 1996, UAM Fund Services,
Inc. (the "Administrator"), a wholly-owned subsidiary of UAM, provides and
oversees administrative, fund accounting, dividend disbursing and transfer
agent services to the UAM Funds and AEW under an Administration Agreement (the
"Agreement"). Pursuant to the Agreement, the Administrator is entitled to
receive annual fees, computed daily and payable monthly, of 0.19% of the first
$200 million of the combined aggregate net assets; plus 0.11% of the next $800
million of the combined aggregate net assets; plus 0.07% of the next $2
billion of the combined aggregate net assets; plus 0.05% of the combined
aggregate net assets in excess of $3 billion. The fees are allocated among the
portfolios of the UAM Funds and AEW on the basis of their relative net assets
and are subject to a graduated minimum fee schedule per portfolio which rises
from $2,000 per month, upon inception of a portfolio, to $70,000 annually
after two years. For portfolios with more than one class of shares, the
minimum annual fee increases to $90,000. In addition, the Administrator
receives a Portfolio-specific monthly fee of 0.04% of average daily net assets
of the Portfolio. Also effective April 15, 1996, the Administrator has entered
into a Mutual Funds Service Agreement with Chase Global Funds Services Company
("CGFSC"), a wholly-owned subsidiary of The Chase Manhattan Bank, N.A., under
which CGFSC agrees to provide certain services, including but not limited to,
administration, fund accounting, dividend disbursing and transfer agent
services. Pursuant to the Mutual Funds Service Agreement, the Administrator
pays CGFSC a monthly fee.
Prior to April 15, 1996, CGFSC, served as the administrator to the UAM Funds
and AEW. For its services as administrator CGFSC received annual fees,
computed daily and payable monthly, based on the combined aggregate average
daily net assets of the UAM Funds and AEW, as follows: 0.20% of the first $200
million of the combined aggregate net assets; plus 0.12% of the next $800
million of the combined aggregate net assets; plus 0.08% of the combined
aggregate net assets in excess of $1 billion but less than $3 billion; plus
0.06% of the combined aggregate net assets in excess of $3 billion. The fees
were allocated among the portfolios of the UAM Funds and AEW on the basis of
their relative net assets and were subject to a graduated minimum fee schedule
per portfolio which rose from $2,000 per month, upon inception of a portfolio,
to $70,000 annually after two years.
For the period April 15, 1996 to April 30, 1996, UAM Fund Services, Inc.
earned $1,071 from the Portfolio as Administrator.
13
<PAGE>
IRC ENHANCED INDEX PORTFOLIO
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
D. DISTRIBUTION SERVICES: UAM Fund Distributors, Inc. (the "Distributor"), a
wholly-owned subsidiary of UAM, distributes the shares of the Portfolio. The
Distributor does not receive any fee or other compensation with respect to the
Portfolio.
E. PURCHASES AND SALES: For the period ended April 30, 1996, the Portfolio
made purchases of approximately $5,268,000 and sales of approximately
$1,481,000 of investment securities other than long-term U.S. Government and
short-term securities. There were no purchases or sales of long-term U.S.
Government securities.
F. TRUSTEES' FEES: Each Trustee, who is not an officer or affiliated person,
receives $2,000 per meeting attended, which is allocated proportionally among
the active portfolios of UAM Funds and AEW, plus a quarterly retainer of $150
for each active portfolio of the UAM Funds and AEW, and reimbursement of
expenses incurred in attending Trustee meetings.
G. OTHER: At April 30, 1996, 79.5% of total shares outstanding were held by
two record shareholders owning more than 10% of the aggregate total shares
outstanding.
14
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of
UAM Funds Trust and Shareholders of
IRC Enhanced Index Portfolio
In our opinion, the accompanying statement of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
the IRC Enhanced Index Portfolio (the "Portfolio"), a Portfolio of UAM Funds
Trust, at April 30, 1996, and the results of its operations, the changes in
its net assets and the financial highlights for the period January 23, 1996
(commencement of operations) through April 30, 1996, in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Portfolio's management; our responsibility is to express
an opinion on these financial statements based on our audit. We conducted our
audit of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audit, which included confirmation of securities at April 30, 1996 by
correspondence with the custodian, provides a reasonable basis for the opinion
expressed above.
Price Waterhouse LLP
Boston, Massachusetts
June 14, 1996
15
<PAGE>
- -------------------------------------------------------------------------------
UAM FUNDS
CHICAGO ASSET MANAGEMENT
COMPANY PORTFOLIOS
- -------------------------------------------------------------------------------
OFFICERS AND TRUSTEES
Norton H. Reamer William A. Humenuk
Trustee, President Trustee
and Chairman
Peter M. Whitman, Jr.
Mary Rudie Barneby Trustee
Trustee and Executive
Vice President William H. Park
Vice President and
John T. Bennett, Jr. Assistant Treasurer
Trustee
Karl O. Hartmann
J. Edward Day Secretary
Trustee
Robert R. Flaherty
Philip D. English Treasurer
Trustee
Harvey M. Rosen
Assistant Secretary
- -------------------------------------------------------------------------------
INVESTMENT ADVISER
Chicago Asset Management Company
70 West Madison Street, 56th Floor
Chicago, IL 60602
- -------------------------------------------------------------------------------
ADMINISTRATOR
UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110
- -------------------------------------------------------------------------------
CUSTODIAN
The Bank of New York
60 Wall Street, New York, NY 10260
- -------------------------------------------------------------------------------
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young LLP
2600 One Commerce Square
Philadelphia, PA 19103
- -------------------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
160 Federal Street
Boston, MA 02110
- -------------------------------------------------------------------------------
DISTRIBUTOR
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
- -------------------------------------------------------------------------------
This report has been prepared for shareholders and may be distributed to
others only if preceded or accompanied by a current prospectus.
- -------------------------------------------------------------------------------
UAM FUNDS
CHICAGO ASSET
MANAGEMENT
COMPANY
PORTFOLIOS
- -------------------------------------------------------------------------------
ANNUAL REPORT
APRIL 30, 1996
<PAGE>
UAM FUNDS CHICAGO ASSET MANAGEMENT COMPANY PORTFOLIOS
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Shareholder's Letter........................................................ 1
Performance Comparison
Value/Contrarian Portfolio................................................ 3
Intermediate Bond Portfolio............................................... 4
Statement of Net Assets
Value/Contrarian Portfolio................................................ 5
Intermediate Bond Portfolio............................................... 8
Statements of Operations.................................................... 11
Statement of Changes
Value/Contrarian Portfolio................................................ 12
Intermediate Bond Portfolio............................................... 13
Financial Highlights
Value/Contrarian Portfolio................................................ 14
Intermediate Bond Portfolio............................................... 15
Notes to Financial Statements............................................... 16
Report of Independent Accountants........................................... 20
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
Dear Shareholders:
April 30th is the annual reporting period end for the Chicago Asset Management
Value/Contrarian Portfolio for equity investors and the Intermediate Bond
Portfolio for our fixed income clients. This letter will review the investment
environment and returns for the Portfolios. We thank you for your interest in
the Portfolios, and we look forward to continuing to enjoy your confidence in
Chicago Asset Management's investment expertise.
CHICAGO ASSET MANAGEMENT VALUE/CONTRARIAN PORTFOLIO
Our primary focus is the selection of equity securities from a large market
capitalization universe. The Portfolio normally consists of approximately 30
issues and is maintained in a close-to-fully invested posture at all times.
As value/contrarian investors, we are in essence seeking issues which are
favorable in terms of their outlook for the future but which clearly have been
underperforming the market prior to our purchase. This underperformance, prior
to our purchase, is for reasons which we believe to be both identifiable and
temporary.
During the fiscal year ended April 30, 1996, the equity market, in general,
experienced a substantial and prolonged advance. This was punctuated by
significant volatility within individual issues, sectors and cross trends
within the market which produced varying strengths and weaknesses within
individual industry groups.
Our investment style continues to find opportunities which result from
volatility. Throughout the year we implemented our normal active rebalancing
strategy. This strategy holds that maintaining a fully invested posture and
aiming in the direction of equally weighting the individual holdings will
remove the more risky strategy of market-timing. Over time we use volatility
to the Portfolio's advantage by adding to the current holdings which have
underperformed. We believe these issues are more attractive, and due to their
recent underperformance, are thereby under-weighted in the Portfolio.
Conversely, we may sell a portion of a current holding which has recently
outperformed for the reason that the holding has become over-weighted in the
Portfolio, and is slightly less attractive due to its having outperformed and
consumed some of its undervaluation in the process of achieving fair value.
The above ingredients represent our ongoing strategy and discipline to active
value/contrarian portfolio management. We believe it removes the risks of
guessing the direction of the economy and the markets and replaces it with an
active recognition that individual securities cycle in a repetitive nature.
Thereby our contrarian approach takes advantage of the reality which has
occurred in the recent past price action of securities. We aim to invest
contrary to the recent trends for the advantages which may potentially be
received when a reversal occurs. This combination of ingredients has produced
the results in the most recent fiscal year. We plan to maintain the identical
strategies and disciplines for the foreseeable future.
For the twelve months ended April 30, 1996, the Portfolio produced a total
rate of return, net of expenses, of 28.00% versus the S&P 500 Index return of
30.18%.
CHICAGO ASSET MANAGEMENT INTERMEDIATE BOND PORTFOLIO
The twelve month period ended April 30, 1996 was favorable for bond fund
investors. The income earned from portfolio investments was supplemented by
the capital appreciation achieved due to a decline in interest rates.
1
<PAGE>
The investment environment had two distinct cycles. The first nine months,
May, 1995 through January, 1996, were characterized by an almost steady
decline in interest rates. The economic outlook was dominated by reports of
softness in many sectors of the economy. Inflation remained benign. The
constructive outlook for interest rates was enhanced by the optimistic
assumption that a resolution would be found for the Federal Budget crises
after numerous government shut-downs. In this environment, the Federal Reserve
reduced the Federal Funds rate three times from 6% to 5 1/4% and cut the
discount rate from 5 1/4% to 5%.
The positive tone to the fixed income markets came to an abrupt end shortly
after the last cut in the Federal Funds and discount rates. The major news
event which dramatically altered the outlook was the February addition of
705,000 new jobs. This was the largest one-month increase in over twelve
years. This good news meant that the Federal Reserve was unlikely to continue
to reduce short-term interest rates. The change in outlook was confirmed by
Chairman Greenspan's comments before Congress that the economy was "on track
for substantial growth." Further declines in interest rates had already been
priced into the market. Therefore, the change in outlook resulted in a steep
rise in rates and a decline in prices.
During the fiscal year, the yield on two-year U.S. Treasury Notes declined
from 6.58% to 6.04%. Longer maturity intermediate-term interest rates as
represented by ten-year U.S. Treasury Notes declined 38 basis points to 6.67%.
In this volatile environment the Portfolio remained focused on investing for
safety and income. The Portfolio maintained its concentration in U.S. Treasury
Notes, Agencies and obligations of large U.S. corporations. Corporate debt is
utilized to enhance the current income and long-term total return of the
Portfolio. Emphasis is placed on intermediate maturity securities. This is
done so that the Portfolio can seek to produce a high level of income while
reducing the possibility of exposing investors to significant principal
fluctuation.
The Portfolio had the following characteristics relative to the Lehman
Brothers Intermediate Government/Corporate Index as of April 30, 1996:
<TABLE>
<CAPTION>
PORTFOLIO INDEX
---------- ----------
<S> <C> <C>
Average Maturity................................... 3.98 Years 4.20 Years
Average Duration................................... 3.18 Years 3.27 Years
Average Coupon..................................... 6.76% 6.85%
Yield to Maturity.................................. 6.38% 6.42%
</TABLE>
For the twelve months ended April 30, 1996, the Portfolio produced a total
rate of return, net of expenses, of 7.62% versus the Lehman Brothers
Intermediate Government/Corporate Index return of 7.84%.
CHICAGO ASSET MANAGEMENT COMPANY
The investment results presented in the Adviser's letter represent past
performance and should not be construed as a guarantee of future results. If
the Adviser didn't have temporary fee waivers and didn't assume expenses on
behalf of the Portfolios, total returns for the Portfolios would have been
lower. The investment return and principal value of an investment will
fluctuate so that an investor's shares, when redeemed, may be worth more or
less than their original cost.
2
<PAGE>
Performance Comparison
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 PURCHASE IN THE
CHICAGO ASSET MANAGEMENT VALUE/CONTRARIAN PORTFOLIO AND
THE STANDARD & POOR'S 500 INDEX (S&P 500)
<TABLE>
<CAPTION>
- -----------------------------------------
AVERAGE ANNUAL TOTAL RETURN**
FOR PERIOD ENDED APRIL 30, 1996
- -----------------------------------------
<S> <C>
1 YEAR SINCE 12/16/94*++
- -----------------------------------------
28.00% 29.84%
- -----------------------------------------
</TABLE>
[PERFORMANCE COMPARISON GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Chicago Asset Management Value/Contrarian Portfolio S&P 500 Index+
<S> <C> <C>
- -------------------------------------------------------------------------------
12/16/94*++ 10,000 10,000
- -------------------------------------------------------------------------------
4/30/95 11,181 11,295
- -------------------------------------------------------------------------------
4/30/96 14,311 14,705
- -------------------------------------------------------------------------------
</TABLE>
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate. When shares are redeemed, they may
be worth more or less than the original cost.
* Commencement of Operations
** Total return of the Portfolio reflects fees waived and expenses assumed by
the Adviser. Without such waiver of fees and expenses assumed, total return
would be lower.
+ The comparative index is not adjusted to reflect expenses or other fees that
the SEC requires to be reflected in the Portfolio's performance. The fees, if
reflected, would reduce the performance quoted. The Portfolio's performance
assumes the reinvestment of all dividends and distributions. The comparative
index has been adjusted to reflect reinvestment of dividends on securities in
the index.
++ For comparative purposes, the value of the S&P 500 Index on 12/31/94 is used
as the beginning value on 12/16/94.
DEFINITION OF THE COMPARATIVE INDEX
The S&P 500 Index is an unmanaged index composed of 400 industrial, 40
financial, 40 utilities and 20 transportation stocks.
Please note that one cannot invest in an unmanaged index.
3
<PAGE>
Performance Comparison
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 PURCHASE IN THE CHICAGO ASSET
MANAGEMENT INTERMEDIATE BOND PORTFOLIO AND THE LEHMAN BROTHERS INTERMEDIATE
GOVERNMENT/CORPORATE INDEX
----------------------------------------
AVERAGE ANNUAL TOTAL RETURN**
FOR PERIOD ENDED APRIL 30, 1996
----------------------------------------
1 YEAR SINCE 1/24/95*++
----------------------------------------
7.62% 9.56%
----------------------------------------
[PERFORMANCE COMPARISON GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Lehman Brothers
Chicago Asset Intermediate
Management Intermediate Government/Corporate
Bond Portfolio Index+
<S> <C> <C>
1/24/95*++ $10,000 $10,000
4/30/95 $10,431 $10,393
4/30/96 $11,226 $11,347
</TABLE>
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate. When shares are redeemed, they may
be worth more or less than the original cost.
* Commencement of Operations
** Total return of the Portfolio reflects fees waived and expenses assumed by
the Adviser. Without such waiver of fees and expenses assumed, total return
would be lower.
+ The comparative index is not adjusted to reflect expenses or other fees that
the SEC requires to be reflected in the Portfolio's performance. The fees,
if reflected, would reduce the performance quoted. The Portfolio's
performance assumes the reinvestment of all dividends and distributions.
++ For comparative purposes, the value of the Lehman Brothers Intermediate
Government/Corporate Index on 1/31/95 is used as the beginning value on
1/24/95.
DEFINITION OF THE COMPARATIVE INDEX
The 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 $100 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.
Please note that one cannot invest in an unmanaged index.
4
<PAGE>
CHICAGO ASSET MANAGEMENT VALUE/CONTRARIAN PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
April 30, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (000)+
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (98.4%)
- -------------------------------------------------------------------------------
AEROSPACE & DEFENSE (6.2%)
Raytheon Co. ................................................... 550 $ 28
United Technologies Corp. ...................................... 250 27
------
55
- -------------------------------------------------------------------------------
AUTOMOTIVE (6.3%)
Ford Motor Co. ................................................. 800 29
General Motors Corp. ........................................... 500 27
------
56
- -------------------------------------------------------------------------------
BANKS (6.1%)
Banc One Corp. ................................................. 742 26
BankAmerica Corp. .............................................. 375 28
------
54
- -------------------------------------------------------------------------------
BEVERAGES, FOOD & TOBACCO (6.8%)
General Mills, Inc. ............................................ 425 24
IBP, Inc. ...................................................... 450 12
Sysco Corp. .................................................... 775 25
------
61
- -------------------------------------------------------------------------------
BROADCASTING & PUBLISHING (3.4%)
Deluxe Corp. ................................................... 850 30
- -------------------------------------------------------------------------------
CHEMICALS (6.4%)
Dow Chemical Co. ............................................... 325 29
Ethyl Corp. .................................................... 2,750 28
------
57
- -------------------------------------------------------------------------------
CONSUMER DURABLES (2.4%)
Goodyear Tire & Rubber Co. ..................................... 425 22
- -------------------------------------------------------------------------------
CONSUMER STAPLES (2.6%)
Procter & Gamble Co. ........................................... 275 23
- -------------------------------------------------------------------------------
ELECTRONICS (3.0%)
General Electric Co. ........................................... 350 27
- -------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
CHICAGO ASSET MANAGEMENT VALUE/CONTRARIAN PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS--(CONTINUED)
April 30, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (000)+
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
- -------------------------------------------------------------------------------
ENERGY (8.5%)
Exxon Corp. .................................................... 300 $ 26
Mobil Corp. .................................................... 200 23
Tenneco, Inc. .................................................. 500 27
------
76
- -------------------------------------------------------------------------------
HEALTH CARE (2.9%)
Caremark International, Inc. ................................... 950 26
- -------------------------------------------------------------------------------
INSURANCE (3.1%)
Chubb Corp. .................................................... 300 28
- -------------------------------------------------------------------------------
LODGING & RESTAURANTS (3.2%)
Darden Restaurants, Inc. ....................................... 2,100 29
- -------------------------------------------------------------------------------
MANUFACTURING (9.1%)
AMP, Inc. ...................................................... 600 27
Eastman Kodak Co. .............................................. 350 26
Whitman Corp. .................................................. 1,100 28
------
81
- -------------------------------------------------------------------------------
PAPER & PACKAGING (6.5%)
International Paper Co. ........................................ 700 28
Weyerhaeuser Co. ............................................... 600 30
------
58
- -------------------------------------------------------------------------------
PHARMACEUTICALS (6.2%)
Pharmacia & Upjohn, Inc. ....................................... 700 27
Warner Lambert Co. ............................................. 250 28
------
55
- -------------------------------------------------------------------------------
RETAIL (6.7%)
Nordstrom, Inc. ................................................ 600 30
The Limited, Inc. .............................................. 1,425 30
------
60
- -------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
CHICAGO ASSET MANAGEMENT VALUE/CONTRARIAN PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS--(CONTINUED)
April 30, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (000)+
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
- -------------------------------------------------------------------------------
TECHNOLOGY (6.1%)
Apple Computer, Inc. .......................................... 1,100 $ 27
International Business Machines Corp. ......................... 250 27
------
54
- -------------------------------------------------------------------------------
TELECOMMUNICATIONS (2.9%)
AT&T Corp. .................................................... 425 26
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS (COST $689)................................... 878
- -------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (1.6%)
- -------------------------------------------------------------------------------
Cash........................................................... 20
Deferred Organization Costs.................................... 16
Receivable due from Investment Adviser......................... 14
Dividends Receivable........................................... 1
Payable for Investments Purchased.............................. (6)
Payable for Administrative Fees................................ (5)
Payable for Trustees' Fees..................................... (1)
Other Liabilities.............................................. (25)
------
14
- -------------------------------------------------------------------------------
NET ASSETS (100%)
Applicable to 65,232 outstanding Institutional Class shares
(unlimited authorization, no par value)....................... $ 892
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE........ $13.67
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
+ See Note A to Financial Statements.
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
CHICAGO ASSET MANAGEMENT INTERMEDIATE BOND PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
April 30, 1996
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
(000) (000)+
- -------------------------------------------------------------------------------
<S> <C> <C>
CORPORATE BONDS & NOTES (54.4%)
- -------------------------------------------------------------------------------
BANKS (12.6%)
BankAmerica Corp. 7.625%, 6/15/04............................... $250 $ 258
Northern Trust Co. 6.50%, 5/1/03................................ 250 240
Norwest Corp. 7.70%, 11/15/97................................... 250 255
Suntrust Banks, Inc. 6.00%, 2/15/26............................. 275 254
------
1,007
- -------------------------------------------------------------------------------
FINANCIAL SERVICES (15.7%)
Associates Corp. of North America 7.75%, 2/15/05................ 250 263
Exxon Capital Corp. 6.625%, 8/15/02............................. 9 9
Exxon Capital Corp. 7.875%, 8/15/97............................. 105 107
Ford Motor Credit Corp.-Global Bond 6.25%, 11/8/00.............. 250 244
General Electric Credit Corp. 7.85%, 2/1/97..................... 250 254
General Motors Acceptance Corp. 8.00%, 5/2/97................... 250 255
IBM Credit Corp. 6.375%, 11/1/97................................ 125 125
------
1,257
- -------------------------------------------------------------------------------
INDUSTRIAL (12.8%)
Heinz (H.J.) Co. 5.50%, 9/15/97................................. 18 18
Hertz Corp. 8.30%, 2/2/98....................................... 250 258
PepsiCo, Inc. 6.25%, 9/1/99..................................... 250 246
Shell Oil Co. 6.625%, 7/1/99.................................... 250 251
WMX Technologies, Inc. 6.25%, 10/15/00.......................... 250 245
------
1,018
- -------------------------------------------------------------------------------
PHARMACEUTICALS (1.1%)
Merck & Co. 6.00%, 1/15/97...................................... 90 90
- -------------------------------------------------------------------------------
RETAIL (5.4%)
J.C. Penney & Co. 5.375%, 11/15/98.............................. 53 52
Motorola, Inc. 6.50%, 9/1/25.................................... 250 244
Wal-Mart Stores, Inc. 6.375%, 3/1/03............................ 140 135
------
431
- -------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
CHICAGO ASSET MANAGEMENT INTERMEDIATE BOND PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS--(CONTINUED)
April 30, 1996
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
(000) (000)+
- -------------------------------------------------------------------------------
<S> <C> <C>
CORPORATE BONDS & NOTES--(CONTINUED)
- -------------------------------------------------------------------------------
UTILITIES (6.8%)
Florida Power & Light Co. 5.50%, 7/1/99......................... $150 $ 146
Pennsylvania Power & Light Co. 5.50%, 4/1/98.................... 150 147
Virginia Electric Power Co. 6.25%, 8/1/98....................... 250 249
------
542
- -------------------------------------------------------------------------------
TOTAL CORPORATE BONDS & NOTES (COST $4,299)...................... 4,345
- -------------------------------------------------------------------------------
U.S. GOVERNMENT SECURITIES (37.4%)
- -------------------------------------------------------------------------------
U.S. TREASURY NOTES (37.4%)
5.25%, 1/31/01.................................................. 300 286
5.75%, 8/15/03.................................................. 175 167
5.875%, 7/31/97................................................. 175 175
6.125%, 5/31/97................................................. 550 552
6.75%, 2/28/97.................................................. 250 252
7.50%, 1/31/97.................................................. 500 507
7.50%, 11/15/01................................................. 250 262
7.50%, 5/15/02.................................................. 250 263
7.75%, 1/31/00.................................................. 500 523
- -------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT SECURITIES (COST $2,950)................... 2,987
- -------------------------------------------------------------------------------
AGENCY SECURITIES (5.9%)
- -------------------------------------------------------------------------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION (5.9%)
5.37%, 2/7/01................................................... 250 237
5.875%, 2/2/06.................................................. 250 232
- -------------------------------------------------------------------------------
TOTAL AGENCY SECURITIES (COST $499).............................. 469
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS (97.7%) (COST $7,748).......................... 7,801
- -------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (2.3%)
- -------------------------------------------------------------------------------
Cash............................................................ 31
Interest Receivable............................................. 159
Deferred Organization Costs..................................... 17
Receivable due from Investment Adviser.......................... 8
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
CHICAGO ASSET MANAGEMENT INTERMEDIATE BOND PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS--(CONTINUED)
April 30, 1996
<TABLE>
<CAPTION>
VALUE
(000)+
- -------------------------------------------------------------------------------
<S> <C> <C>
OTHER ASSETS AND LIABILITIES--(CONTINUED)
- -------------------------------------------------------------------------------
Receivable for Portfolio Shares Sold.............................. $ 1
Payable for Administrative Fees................................... (6)
Payable for Trustees' Fees........................................ (1)
Other Liabilities................................................. (29)
------
180
- -------------------------------------------------------------------------------
NET ASSETS (100%)
Applicable to 768,365 outstanding Institutional Class shares (un-
limited authorization, no par value)............................. $7,981
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE........... $10.39
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
+ See Note A to Financial Statements.
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
CHICAGO ASSET MANAGEMENT PORTFOLIOS
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED APRIL 30, 1996
<TABLE>
<CAPTION>
CHICAGO ASSET CHICAGO ASSET
MANAGEMENT MANAGEMENT
VALUE/ INTERMEDIATE
CONTRARIAN BOND
(In Thousands) PORTFOLIO PORTFOLIO
- ---------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Dividends................................. $ 20 $ --
Interest.................................. -- 457
- ---------------------------------------------------------------------------------
Total Income............................. 20 457
- ---------------------------------------------------------------------------------
EXPENSES
Investment Advisory Fees--Note B
Basic Fees............................... $ 5 $31
Less: Fees Waived........................ (5) -- (31) --
--- ---
Administrative Fees--Note C............... 52 51
Custodian Fees............................ 1 2
Audit Fees................................ 12 11
Printing Fees............................. 12 12
Trustees' Fees--Note F.................... 2 2
Filing and Registration Fees.............. 16 16
Other Expenses............................ 6 8
Expenses Assumed by Adviser--Note B....... (92) (48)
- ---------------------------------------------------------------------------------
Total Expenses........................... 9 54
Expense Offset--Note A.................... (1) (2)
- ---------------------------------------------------------------------------------
Net Expenses............................. 8 52
- ---------------------------------------------------------------------------------
NET INVESTMENT INCOME...................... 12 405
- ---------------------------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS........... 52 60
NET CHANGE IN UNREALIZED
APPRECIATION/DEPRECIATION ON INVESTMENTS.. 131 (79)
- ---------------------------------------------------------------------------------
NET GAIN (LOSS) ON INVESTMENTS............. 183 (19)
- ---------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS................................ $195 $ 386
- ---------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
CHICAGO ASSET MANAGEMENT VALUE/CONTRARIAN PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
DECEMBER 16,
1994** TO YEAR ENDED
APRIL 30, APRIL 30,
(In Thousands) 1995 1996
- -------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net Investment Income............................ $ 3 $ 12
Net Realized Gain................................ 2 52
Net Change in Unrealized Appreciation............ 58 131
- -------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Operations..................................... 63 195
- -------------------------------------------------------------------------------
DISTRIBUTIONS:
Net Investment Income............................ (2) (15)
Net Realized Gain................................ -- (19)
- -------------------------------------------------------------------------------
Total Distributions............................. (2) (34)
- -------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS: (1)
Issued--Regular.................................. 615 79
--In Lieu of Cash Distributions.................. 2 32
Redeemed......................................... (7) (76)
- -------------------------------------------------------------------------------
Net Increase from Capital Share Transactions.... 610 35
- -------------------------------------------------------------------------------
Total Increase................................... 671 196
Net Assets:
Beginning of Period.............................. 25 696
- -------------------------------------------------------------------------------
End of Period (2)................................ $696 $892
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1)Shares Issued and Redeemed:
Shares Issued................................... 61 6
In Lieu of Cash Distributions................... -- 3
Redeemed........................................ (1) (6)
- -------------------------------------------------------------------------------
60 3
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(2)Net Assets Consist of:
Paid in Capital................................. $632 $663
Undistributed Net Investment Income............. 4 5
Accumulated Net Realized Gain................... 2 35
Unrealized Appreciation......................... 58 189
- -------------------------------------------------------------------------------
$696 $892
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
** Commencement of Operations
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
CHICAGO ASSET MANAGEMENT INTERMEDIATE BOND PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
JANUARY 24,
1995** TO YEAR ENDED
APRIL 30, APRIL 30,
(In Thousands) 1995 1996
- ---------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income.................................... $ 85 $ 405
Net Realized Gain........................................ -- 60
Net Change in Unrealized Appreciation/Depreciation....... 132 (79)
- ---------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations.... 217 386
- ---------------------------------------------------------------------------------
DISTRIBUTIONS:
Net Investment Income.................................... (50) (389)
Net Realized Gain........................................ -- (48)
- ---------------------------------------------------------------------------------
Total Distributions..................................... (50) (437)
- ---------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS: (1)
Issued--Regular.......................................... 5,025 2,481
- --In Lieu of Cash Distributions........................... 50 436
Redeemed................................................. -- (152)
- ---------------------------------------------------------------------------------
Net Increase from Capital Share Transactions............ 5,075 2,765
- ---------------------------------------------------------------------------------
Total Increase........................................... 5,242 2,714
Net Assets:
Beginning of Period...................................... 25 5,267
- ---------------------------------------------------------------------------------
End of Period (2)........................................ $5,267 $7,981
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
(1)Shares Issued and Redeemed:
Shares Issued........................................... 502 231
In Lieu of Cash Distributions........................... 5 41
Redeemed................................................ -- (14)
- ---------------------------------------------------------------------------------
507 258
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
(2)Net Assets Consist of:
Paid in Capital......................................... $5,097 $7,858
Undistributed Net Investment Income..................... 38 58
Accumulated Net Realized Gain........................... -- 12
Unrealized Appreciation................................. 132 53
- ---------------------------------------------------------------------------------
$5,267 $7,981
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
</TABLE>
**Commencement of Operations
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
CHICAGO ASSET MANAGEMENT VALUE/CONTRARIAN PORTFOLIO
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
DECEMBER 16,
1994** TO YEAR ENDED
APRIL 30, 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 Investments...... 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
portfolios with fiscal years beginning on or after September 1, 1995 to
disclose the average commission rate paid on trades for which commissions
were charged.
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
CHICAGO ASSET MANAGEMENT INTERMEDIATE BOND PORTFOLIO
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
JANUARY 24,
1995** TO YEAR ENDED
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 $0.08
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
investments for that year because of the timing of sales and repurchases
of the Portfolio shares in relation to fluctuating market value of the
investments 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 Average
Net Assets would be 0.80%.
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
CHICAGO ASSET MANAGEMENT COMPANY PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS
UAM Funds Trust, formerly known as The Regis Fund II, and UAM Funds, Inc.,
formerly known as The Regis Fund, Inc., (collectively the "UAM Funds") were
organized on May 18, 1994 and October 11, 1988, respectively, and are
registered under the Investment Company Act of 1940, as amended, as open-end
management investment companies. The Chicago Asset Management Value/Contrarian
Portfolio and Chicago Asset Management Intermediate Bond Portfolio (the
"Portfolios"), portfolios of UAM Funds Trust, began operations on December 16,
1994 and January 24, 1995, respectively. At April 30, 1996, the UAM Funds were
comprised of thirty-seven active portfolios. The financial statements of the
remaining portfolios are presented separately.
A. SIGNIFICANT ACCOUNTING POLICIES: The following significant accounting
policies are in conformity with generally accepted accounting principles for
investment companies. Such policies are consistently followed by the
Portfolios in the preparation of their financial statements. Generally
accepted accounting principles may require management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results may differ from those estimates.
1. SECURITY VALUATION: Securities listed on a securities exchange for which
market quotations are readily available are valued at the last quoted sales
price as of the close of the exchange on the day the valuation is made or,
if no sale occurred on such day, at the bid price on such day. Price
information on listed securities is taken from the exchange where the
security is primarily traded. Over-the-counter and unlisted securities are
valued at the current bid price. Fixed income securities are stated on the
basis of valuations provided by brokers and/or a pricing service which uses
information with respect to transactions in fixed income securities,
quotations from dealers, market transactions in comparable securities and
various relationships between securities in determining value. Short-term
investments that have remaining maturities of sixty days or less at time of
purchase are valued at amortized cost, if it approximates market value. The
value of other assets and securities for which no quotations are readily
available is determined in good faith at fair value using methods
determined by the Board of Trustees.
2. FEDERAL INCOME TAXES: It is each Portfolio's intention to continue to
qualify as a regulated investment company under Subchapter M of the
Internal Revenue Code and to distribute all of its taxable income.
Accordingly, no provision for Federal income taxes is required in the
financial statements.
At April 30, 1996, cost of investments and unrealized
appreciation/depreciation of investments for Federal income tax purposes
were:
<TABLE>
<CAPTION>
NET
CHICAGO ASSET MANAGEMENT COST APPRECIATION DEPRECIATION APPRECIATION
COMPANY PORTFOLIOS (000) (000) (000) (000)
------------------------ ------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Value/Contrarian............ $ 689 $199 $ (10) $189
Intermediate Bond........... 7,748 162 (109) 53
</TABLE>
3. REPURCHASE AGREEMENTS: In connection with transactions in repurchase
agreements, the Portfolios' custodian bank takes possession of the
underlying securities, the value of which exceeds the principal
16
<PAGE>
CHICAGO ASSET MANAGEMENT COMPANY PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
amount of the repurchase transaction, including accrued interest. To the
extent that any repurchase transaction exceeds one business day, the value
of the collateral is marked-to-market on a daily basis to determine the
adequacy of the collateral. In the event of default on the obligation to
repurchase, the Portfolios have the right to liquidate the collateral and
apply the proceeds in satisfaction of the obligation. In the event of
default or bankruptcy by the other party to the agreement, realization
and/or retention of the collateral or proceeds may be subject to legal
proceedings.
4. DISTRIBUTIONS TO SHAREHOLDERS: Each Portfolio will normally distribute
substantially all of its net investment income quarterly. Any realized net
capital gains will normally be distributed annually. All distributions are
recorded on ex-dividend date.
The amount and character of income and capital gain distributions to be
paid are determined in accordance with Federal income tax regulations which
may differ from generally accepted accounting principles. These differences
are primarily due to differing book and tax treatments for deferred
organization costs.
Permanent book and tax basis differences relating to shareholder
distributions may result in reclassifications to undistributed net
investment income (loss), accumulated net realized gain (loss) and paid in
capital.
5. OTHER: Security transactions are accounted for on trade date, the date
the trade was executed. Costs used in determining realized gains and losses
on the sale of investment securities are based on the specific
identification method. Dividend income is recorded on the ex-dividend date.
Interest income is recognized on the accrual basis. Discounts and premiums
on securities purchased are amortized over their respective lives. Most
expenses of the UAM Funds can be directly attributed to a particular
portfolio. Expenses which cannot be directly attributed are apportioned
among the portfolios of the UAM Funds based on their relative net assets.
Additionally, certain expenses are apportioned among the portfolios of the
UAM Funds and AEW Commercial Mortgage Securities Fund, Inc. ("AEW"), an
affiliated closed-end management investment company, based on their
relative net assets. Custodian fees for the Portfolio have been increased
to include expense offsets for custodian balance credits. Costs incurred by
each Portfolio in connection with their organization have been deferred and
are being amortized on a straight-line basis over a five year period.
Current year permanent book-tax differences, if any, are not included in
ending undistributed net investment income (loss) for the purpose of
calculating net investment income (loss) per share in the financial
highlights.
B. ADVISORY SERVICES: Under the terms of investment advisory agreements,
Chicago Asset Management Company (the "Adviser"), a wholly-owned subsidiary of
United Asset Management Corporation ("UAM"), provides investment advisory
services to the Portfolios at a fee calculated at an annual rate of 0.625% of
average daily net assets for Chicago Asset Management Value/Contrarian
Portfolio and 0.48% of average daily net assets for Chicago Asset Management
Intermediate Bond Portfolio. The Adviser has voluntarily agreed to waive a
portion of its advisory fees and to assume expenses, if necessary, in order to
keep the Portfolios' total annual operating expenses, after the effect of
expense offset arrangements, from exceeding 0.95% and 0.80% of average daily
net assets, respectively.
C. ADMINISTRATION SERVICES: Effective April 15, 1996, UAM Fund Services, Inc.
(the "Administrator"), a wholly-owned subsidiary of UAM, provides and oversees
administrative, fund accounting, dividend disbursing
17
<PAGE>
CHICAGO ASSET MANAGEMENT COMPANY PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
and transfer agent services to the UAM Funds and AEW under an Administration
Agreement (the "Agreement"). Pursuant to the Agreement, the Administrator is
entitled to receive annual fees, computed daily and payable monthly, of 0.19%
of the first $200 million of the combined aggregate net assets; plus 0.11% of
the next $800 million of the combined aggregate net assets; plus 0.07% of the
next $2 billion of the combined aggregate net assets; plus 0.05% of the
combined aggregate net assets in excess of $3 billion. The fees are allocated
among the portfolios of the UAM Funds and AEW on the basis of their relative
net assets and are subject to a graduated minimum fee schedule per portfolio
which rises from $2,000 per month, upon inception of a portfolio, to $70,000
annually after two years. For portfolios with more than one class of shares,
the minimum annual fee increases to $90,000. In addition, the Administrator
receives a Portfolio-specific monthly fee of 0.06% of average daily net assets
for Chicago Asset Management Value/Contrarian Portfolio and 0.04% of average
daily net assets for Chicago Asset Management Intermediate Bond Portfolio.
Also effective April 15, 1996, the Administrator has entered into a Mutual
Funds Service Agreement with Chase Global Funds Services Company ("CGFSC"), a
wholly-owned subsidiary of The Chase Manhattan Bank, N.A., under which CGFSC
agrees to provide certain services, including but not limited to,
administration, fund accounting, dividend disbursing and transfer agent
services. Pursuant to the Mutual Funds Service Agreement, the Administrator
pays CGFSC a monthly fee.
Prior to April 15, 1996, CGFSC, formerly Mutual Funds Service Company
("MFSC"), served as the administrator to the UAM Funds and AEW. For its
services as administrator CGFSC received annual fees, computed daily and
payable monthly, based on the combined aggregate average daily net assets of
the UAM Funds and AEW, as follows: 0.20% of the first $200 million of the
combined aggregate net assets; plus 0.12% of the next $800 million of the
combined aggregate net assets; plus 0.08% of the combined aggregate net assets
in excess of $1 billion but less than $3 billion; plus 0.06% of the combined
aggregate net assets in excess of $3 billion. The fees were allocated among
the portfolios of the UAM Funds and AEW on the basis of their relative net
assets and were subject to a graduated minimum fee schedule per portfolio
which rose from $2,000 per month, upon inception of a portfolio, to $70,000
annually after two years. Prior to September 1, 1995, MFSC was an affiliate of
United States Trust Company of New York and provided administrative services
to the UAM Funds and AEW under the same terms, conditions and fees as stated
above for CGFSC.
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.
D. DISTRIBUTION SERVICES: UAM Fund Distributors, Inc. (the "Distributor"),
formerly known as RFI Distributors (a division of Regis Retirement Plan
Services, Inc.), a wholly-owned subsidiary of UAM, distributes the shares of
the Portfolios. The Distributor does not receive any fee or other compensation
with respect to the Portfolios.
18
<PAGE>
CHICAGO ASSET MANAGEMENT COMPANY PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
E. PURCHASES AND SALES: For the year ended April 30, 1996, purchases and sales
of investment securities other than long-term U.S. Government and short-term
securities were:
<TABLE>
<CAPTION>
PURCHASES SALES
CHICAGO ASSET MANAGEMENT COMPANY PORTFOLIOS (000) (000)
------------------------------------------- --------- -----
<S> <C> <C>
Value/Contrarian Portfolio................................... $ 262 $254
Intermediate Bond Portfolio.................................. 1,784 251
</TABLE>
Purchases and sales of long-term U.S. Government securities were approximately
$2,458,000 and $1,297,000, respectively, for Chicago Asset Management
Intermediate Bond Portfolio. There were no purchases and sales of long-term
U.S. Government securities for Chicago Asset Management Value/Contrarian
Portfolio.
F. TRUSTEES' FEES: Each Trustee, who is not an officer or affiliated person,
receives $2,000 per meeting attended, which is allocated proportionally among
the active portfolios of UAM Funds and AEW, plus a quarterly retainer of $150
for each active portfolio of the UAM Funds and AEW, and reimbursement of
expenses incurred in attending Trustee meetings.
G. OTHER: At April 30, 1996, the percentage of total shares outstanding held
by record shareholders owning 10% or greater of the aggregate total shares
outstanding for each Portfolio was as follows:
<TABLE>
<CAPTION>
NO. OF %
CHICAGO ASSET MANAGEMENT COMPANY PORTFOLIOS SHAREHOLDERS OWNERSHIP
------------------------------------------- ------------ ---------
<S> <C> <C>
Value/Contrarian...................................... 1 82.9%
Intermediate Bond..................................... 1 89.2
</TABLE>
At April 30, 1996, 82.9% and 4.0% of the total shares outstanding of the
Chicago Asset Management Value/Contrarian Portfolio were held by UAM Profit
Sharing & 401k Plan and UAM, respectively.
19
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of
UAM Funds Trust and Shareholders of
Chicago Asset Management Value/Contrarian Portfolio
Chicago Asset Management Intermediate Bond Portfolio
In our opinion, the accompanying statements of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
the Chicago Asset Management Value/Contrarian Portfolio and the Chicago Asset
Management Intermediate Bond Portfolio (the "Portfolios"), Portfolios of UAM
Funds Trust, at April 30, 1996, and the results of each of their operations,
the changes in each of their net assets and the financial highlights for the
periods indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the
Portfolios' management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at April 30, 1996 by
correspondence with the custodian and brokers and the application of
alternative auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above.
Price Waterhouse LLP
Boston, Massachusetts
June 14, 1996
- -------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION: (UNAUDITED)
For the year ended April 30, 1996, the percentage of dividends paid that
qualify for the 70% dividend received deduction for corporate shareholders is
46.1% for Chicago Asset Management Value/Contrarian Portfolio.
20
<PAGE>
- -------------------------------------------------------------------------------
UAM FUNDS
MJI INTERNATIONAL EQUITY
PORTFOLIO
- -------------------------------------------------------------------------------
OFFICERS AND TRUSTEES
Norton H. Reamer William A. Humenuk
Trustee, President Trustee
and Chairman
Mary Rudie Barneby Peter M. Whitman, Jr.
Trustee and Executive Trustee
Vice President
John T. Bennett, Jr. William H. Park
Trustee Vice President and
Assistant Treasurer
J. Edward Day Karl O. Hartmann
Trustee Secretary
Philip D. English Robert R. Flaherty
Trustee Treasurer
Harvey M. Rosen
Assistant Secretary
- -------------------------------------------------------------------------------
INVESTMENT ADVISER
Murray Johnstone International Ltd.
John Hancock Center, Suite 3640
875 North Michigan Avenue, Chicago, IL 60611
- -------------------------------------------------------------------------------
ADMINISTRATOR
UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110
- -------------------------------------------------------------------------------
CUSTODIAN
The Bank of New York
60 Wall Street, New York, NY 10260
- -------------------------------------------------------------------------------
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young LLP
2600 One Commerce Square
Philadelphia, PA 19103
- -------------------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
160 Federal Street
Boston, MA 02110
- -------------------------------------------------------------------------------
DISTRIBUTOR
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
- -------------------------------------------------------------------------------
This report has been prepared for shareholders and may be distributed to
others only if preceded or accompanied by a current prospectus.
- -------------------------------------------------------------------------------
UAM FUNDS
MJI
INTERNATIONAL
EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
ANNUAL REPORT
APRIL 30, 1996
<PAGE>
Dear Shareholder,
FUND PERFORMANCE
During the year ended April 30, 1996 the Portfolio returned 8.67%. Over the
same period, the return on the MSCI EAFE Index (the "Index") in U.S. dollars
was 11.40%. For the calendar quarter ended March 31, 1996 the Portfolio
returned 1.62% versus 2.89% for the MSCI EAFE Index, and the difference was
due to the poor performance of the Japanese market. This position began to
turn around in April which saw the Portfolio return 2.50% versus 2.91% for the
Index for the month.
ECONOMIC AND MARKET REVIEW
The key to the performance of equity markets through the year was the easing
back of growth in economies on both sides of the Atlantic. The rise of US
interest rates in 1994 had a dampening impact on economic activity in 1995
from lower housing starts to weaker auto sales, and as the year progressed
inventories began to accumulate, resulting in the desultory 0.5% growth of GDP
in the quarter ended December 31, 1995. The collapse of demand in the US
coincided with a slowdown in Continental Europe where manufacturing stalled
under the pressure of high real interest rates and overvalued exchange rates.
There was some respite for Europe when the recovery of the US dollar from the
middle of 1995 provided temporary support to exports, but as US growth slowed,
demand began to wither. Within Europe, the consumer did not play a significant
role in markets until late in the period. In other regions, with the exception
of Japan, the story was the same: growth was slowing, inflation was flat to
down and interest rates were falling.
Against this backdrop, cash flowed into financial markets, seeking higher
returns. The US mutual fund industry was one of the prime targets and saw
substantial inflows through 1995. Much of the cash found its way into the
domestic stock market but late in the year, US funds began to diversify their
assets into international markets, leading to impressive rises, particularly
in the Far East. Hong Kong, which had lagged early in 1995, rose 35.3%* in the
twelve months ended April 30, 1996. In Singapore, where the Portfolio is also
overweight, the market was up 13.2%*.
The Portfolio was marginally underweight in Europe but overweight in the
peripheral markets, especially Spain and Italy. Elections in both countries in
early 1996 saw the return of governments expected to improve stability in
economies which were already seeing sound growth. The markets responded well
with Spain returning 34.0%* and Italy 14.0%* over the year. The slowdown in
growth was dramatically reflected in the German market which returned 9.0%*
for the year. Better performers in Europe were the Netherlands, where the
publisher Elsevier continued to perform well, and Ireland, where Allied Irish
Banks responded to the lower interest rates.
Following several years of recession, the Japanese economy began to respond to
the easier monetary and fiscal environment in 1995. The recovery was given
added impetus in the September quarter when the yen, which had been rising
strongly since the beginning of the year, retreated towards 100 to the dollar
on the settlement of the trade dispute with the US. The combination of these
factors led to heavy international buying of Japanese equities which advanced
by 4.2%* in dollars during the year.
- --------
* As measured by MSCI World Indices.
1
<PAGE>
Although the Latin American markets were slow to regain their composure
following the devaluation of the Mexican peso in late 1994 and the knock-on
effects on other markets, expectations for the region were low and by late
1995, it was clear that there would be positive surprises on inflation and GDP
in 1996, and the markets began to reflect a more optimistic outlook.
INVESTMENT STRATEGY
The thrust of strategy for the year was to trim back exposure to the European
markets and switch the assets to Japan and the Far East. Also, within Europe,
we moved the emphasis from the core markets of the Netherlands and Germany to
the peripheral markets, raising exposure to both Spain and Italy to close to
three times the Index weight. Our research indicated these markets were
undervalued, but it was not until the elections in early 1996 that investors
returned in force and stock prices responded. The Portfolio was fully weighted
in France for most of the year. The market advanced by 11.6%* but the
Portfolio's investments performed poorly due to the continuing pressure on
property and interest rate-sensitive stocks. On the other hand, the Portfolio
was underrepresented in the retail sector which was one of the strongest
during the year. Following a period of strong recovery in the economies of
Sweden and Denmark, we took profits in Autoliv, the manufacturer of safety
equipment, and the utility, Tele Danmark, as profits began to flatten out.
Markets in the Far East continue to score well in our top-down analysis, and
this prompted us to add to investments in Japan, Singapore and Australia. Late
in the year, we also added an investment in Malaysia where the government was
easing following the growth-spurt of 1995. Although the initial surge in the
Japanese market had been stimulated by the devaluation of the yen, the
improvement of the economy as a whole meant that corporate profits were rising
across a broad spectrum of domestic and export-oriented industries. Additional
investments therefore included companies such as NKK, the steel producer,
Itochu, the diversified trading house and Mitsubishi Materials, a manufacturer
of metals and ceramics, in addition to technology groups such as Matsushita
Communications, a leading supplier of mobile phones. In Singapore, we added a
holding in the Oversea-Chinese Banking Corporation and, in Australia, the
media group, News Corporation.
With stability returning to the Latin American markets we increased the
Portfolio's exposure to Mexico and Argentina. This proved to be early in the
case of Mexico since peso weakness through 1995 counterbalanced the recovery
of stocks in local currency. The strongest surge in Mexico came in January
1996, in response to cash flows back into the region. Conversely, the
Argentine authorities managed the recession of 1995 and maintained stability
in the inflation rate and the exchange rate, allowing a strong performance in
the equity market, including the Portfolio's investments in Transport de Gas
and Banco Frances.
OUTLOOK
The managers believe that the continuation of a low growth, low inflation
scenario during 1996 will ensure that benign monetary conditions provide a
positive background for equity markets. Liquidity, which was the principal
force behind the US market rise in 1995, will favor the international markets
in 1996 as US asset allocators seek to diversify their portfolios, but as
economies begin to pick up, liquidity volumes are likely to be more modest
than 1995. Valuations are reasonable in most markets and improving in areas
such as Japan where the recovery of corporate profits is still in progress.
Although, with the Japanese economy starting to pick up, there
- --------
* As measured by MSCI World Indices.
2
<PAGE>
have been suggestions that interest rates could rise, any tightening of policy
by the authorities will, in the opinion of the managers, be outweighed by
profit growth. Japan is still at the beginning of the recovery which has taken
place in the US over the past two years. The focus of investments in the
Portfolio will continue to be on Japan and the Far East and on the economies
of Latin America which, we believe, should exceed growth forecasts in the year
ahead.
Murray Johnstone International Ltd.
The investment results presented in the Adviser's letter represent past
performance and should not be construed as a guarantee of future results. If
the Adviser didn't have temporary fee waivers and didn't assume expenses on
behalf of the Portfolio, total return for the Portfolio would have been lower.
The investment return and principal value of an investment will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than their
original cost. For a complete discussion of the risks associated with
international investing, please refer to the Portfolio's Prospectus.
3
<PAGE>
Performance Comparison
================================================================================
COMPARISON OF CHANGE IN VALUE OF $10,000 PURCHASE IN THE
MJI INTERNATIONAL EQUITY PORTFOLIO AND THE
MORGAN STANLEY CAPITAL INTERNATIONAL EAFE INDEX
----------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN**
FOR PERIOD ENDED APRIL 30, 1996
----------------------------------------------------
1 YEAR SINCE 9/16/94*
8.67% 1.98%
----------------------------------------------------
[PERFORMANCE COMPARISON GRAPH APPEARS HERE]
MJI International Equity Portfolio Morgan Stanley Capital
International EAFE Index+
9/16/94* 10,000 10,000
4/30/95 9,500 10,462
4/30/96 10,324 11,655
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate. When shares are redeemed, they may
be worth more or less than the original cost.
* Commencement of Operations
** Total return of the Portfolio reflects fees waived and expenses assumed by
the Adviser. Without such waiver of fees and expenses assumed, total return
would be lower.
+ The comparative index is not adjusted to reflect expenses or other fees that
the SEC requires to be reflected in the Portfolio's performance. The fees, if
reflected, would reduce the performance quoted. The Portfolio's performance
assumes the reinvestment of all dividends and distributions. The comparative
index has been adjusted to reflect reinvestment of dividends on securities in
the index.
Definition of the Comparative Index
The Morgan Stanley Capital International EAFE Index is an unmanaged index
composed of 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.
Please note that one cannot invest in an unmanaged index.
4
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
April 30, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (93.2%)
- --------------------------------------------------------------------------------
ARGENTINA (2.7%)
Banco Frances del Rio de la Plata S.A. ADR....................... 1,900 $ 55
*Disco S.A. ADR.................................................. 3,000 47
Transportadora de Gas del Sur S.A. ADR........................... 4,700 60
YPF S.A. ADR..................................................... 3,000 66
------
228
- --------------------------------------------------------------------------------
AUSTRALIA (3.9%)
Australia & New Zealand Banking Group Ltd. ...................... 35,000 167
News Corp. Ltd................................................... 28,000 164
------
331
- --------------------------------------------------------------------------------
FRANCE (5.5%)
Assurances Generales de France................................... 3,110 85
Credit Foncier de France......................................... 2,079 25
Lafarge S.A. .................................................... 1,380 89
*Legris Industries S.A........................................... 1,455 72
Lyonnaise des Eaux-Dumez......................................... 1,015 102
Parisienne de Reescompte......................................... 1,180 102
------
475
- --------------------------------------------------------------------------------
GERMANY (1.6%)
Commerzbank AG................................................... 212 46
Mannesmann AG.................................................... 275 94
------
140
- --------------------------------------------------------------------------------
HONG KONG (5.5%)
Cheung Kong Holdings, Ltd. ...................................... 18,000 129
Hong Kong Land Holdings, Ltd. ................................... 50,000 107
Hutchison Whampoa Ltd. .......................................... 20,000 124
Swire Pacific Ltd., Class A...................................... 13,500 115
------
475
- --------------------------------------------------------------------------------
IRELAND (1.3%)
Allied Irish Banks plc........................................... 21,514 113
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS--(CONTINUED)
April 30, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
- --------------------------------------------------------------------------------
ITALY (5.9%)
Assicurazioni Generali........................................... 5,000 $ 125
Istituto Mobiliare Italiano S.p.A. .............................. 11,500 91
Italcementi Fabbriche Riunit..................................... 2,650 19
Parmalat Finanziaria S.p.A. ..................................... 73,000 81
*Telecom Italia Mobile S.p.A. (NCS).............................. 74,500 105
*Telecom Italia Mobile S.p.A. ................................... 39,990 88
------
509
- --------------------------------------------------------------------------------
JAPAN (30.9%)
Canon, Inc. ..................................................... 5,000 99
Hoya Corp. ...................................................... 3,000 106
Itochu Corp. .................................................... 20,000 152
*Matsumoto Kenko Co., Ltd. ...................................... 3,600 119
Matsushita Communication Industrial.............................. 5,000 134
Mitsubishi Heavy Industries Ltd. ................................ 17,000 152
Mitsubishi Materials Corp. ...................................... 25,000 150
Mori Seiki....................................................... 6,000 137
Nippon Sanso KK Corp. ........................................... 18,000 100
Nippon Steel Co. ................................................ 37,000 134
**Nippon Telegraph & Telephone Corp. ............................ -- 2
Nissan Motor Co., Ltd. .......................................... 17,000 143
*NKK Corp. ...................................................... 52,000 163
Nomura Securities Co., Ltd. ..................................... 5,000 109
Omron Corp. ..................................................... 6,000 135
Sankyo Co., Ltd. ................................................ 2,000 77
Sanwa Bank Ltd. ................................................. 5,000 101
Sekisui House Ltd. .............................................. 12,000 149
Sumitomo Bank.................................................... 5,000 107
Sumitomo Trust & Banking Ltd. ................................... 8,000 117
Suzuki Motor Co. Ltd. ........................................... 10,000 127
Teijin Ltd. ..................................................... 26,000 143
------
2,656
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS--(CONTINUED)
April 30, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
- --------------------------------------------------------------------------------
MALAYSIA (1.7%)
Genting Bhd. .................................................... 8,000 $ 72
Malayan Banking Bhd. ............................................ 8,000 78
------
150
- --------------------------------------------------------------------------------
MEXICO (2.1%)
*Cifra S.A. ADR, Class B......................................... 58,000 80
*Grupo Industrial Durango ADR.................................... 5,500 43
Telefonos de Mexico S.A. ADR, Class L............................ 1,600 54
------
177
- --------------------------------------------------------------------------------
NETHERLANDS (4.2%)
Elsevier N.V. ................................................... 5,690 85
KLM Royal Dutch Air Lines N.V. .................................. 1,670 56
Otra N.V. ....................................................... 1,650 41
Vendex International N.V. BDR.................................... 2,400 69
VNU.............................................................. 6,470 109
------
360
- --------------------------------------------------------------------------------
NEW ZEALAND (1.8%)
Telecom Corp. of New Zealand Ltd. ............................... 36,000 153
- --------------------------------------------------------------------------------
NORWAY (1.7%)
Norsk Hydro...................................................... 1,620 74
Orkla Borregaard A.S. ........................................... 1,520 74
------
148
- --------------------------------------------------------------------------------
SINGAPORE (5.9%)
Keppel Corp. Ltd. ............................................... 25,000 226
Oversea-Chinese Banking Corp. ................................... 10,000 138
Singapore Land Ltd. ............................................. 20,000 142
------
506
- --------------------------------------------------------------------------------
SPAIN (5.6%)
Dragados & Construcciones S.A. .................................. 5,566 77
Iberdrola S.A. .................................................. 8,230 81
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS--(CONTINUED)
April 30, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (000)+
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
- -------------------------------------------------------------------------------
SPAIN--(CONTINUED)
Portland Valerrivas S.A. ....................................... 1,510 $ 94
Telefonica de Espana S.A. ...................................... 5,300 94
Uralita S.A. ................................................... 2,730 27
Vallehermoso S.A. .............................................. 6,220 112
------
485
- -------------------------------------------------------------------------------
SWITZERLAND (2.6%)
Ciba-Geigy AG (Registered)...................................... 63 73
Sandoz AG (Registered).......................................... 67 73
Winterthur Schweizerische (Registered).......................... 121 76
------
222
- -------------------------------------------------------------------------------
UNITED KINGDOM (10.3%)
Abbey National plc.............................................. 4,200 36
Argyll Group plc................................................ 12,500 62
Blue Circle Industries plc...................................... 7,500 42
BOC Group plc................................................... 4,400 61
British Petroleum Co. plc....................................... 5,500 50
BTR plc......................................................... 21,000 101
Cable & Wireless plc............................................ 9,500 74
Carlton Communications plc...................................... 4,000 28
Commercial Union plc............................................ 5,000 43
Glaxo Wellcome plc.............................................. 4,500 55
Grand Metropolitan plc.......................................... 9,000 59
Kingfisher plc.................................................. 5,500 49
Lloyds TSB Group plc............................................ 13,520 65
Rank Organisation Ltd. ......................................... 6,000 48
Rolls-Royce plc................................................. 15,000 54
Unilever plc.................................................... 3,000 55
------
882
- -------------------------------------------------------------------------------
TOTAL COMMON STOCKS (COST $7,483)................................ 8,010
- -------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS--(CONTINUED)
April 30, 1996
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
(000) (000)+
- -------------------------------------------------------------------------------
<S> <C> <C>
SHORT-TERM INVESTMENT (5.7%)
- -------------------------------------------------------------------------------
REPURCHASE AGREEMENT (5.7%)
J.P. Morgan Securities, Inc., 5.05%, dated 4/30/96, due 5/1/96,
to be repurchased at $489, collateralized by $380 U.S.
Treasury Bonds 10.375%, due 11/15/12, valued at $500 (COST
$489)......................................................... $489 $ 489
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS (98.9%) (COST $7,972)......................... 8,499
- -------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (1.1%)
- -------------------------------------------------------------------------------
Cash........................................................... 19
Foreign Currency (Cost $123)................................... 125
Dividends Receivable........................................... 35
Receivable due from Investment Adviser......................... 8
Deferred Organization Costs.................................... 7
Receivable for Portfolio Shares Sold........................... 2
Payable for Investments Purchased.............................. (55)
Payable for Audit Fees......................................... (12)
Payable for Administrative Fees................................ (8)
Payable for Trustees' Fees..................................... (1)
Other Liabilities.............................................. (27)
------
93
- -------------------------------------------------------------------------------
NET ASSETS (100%)
Applicable to 836,826 outstanding Institutional Class shares
(unlimited authorization, no par value)....................... $8,592
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE........ $10.27
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
+ See Note A to Financial Statements.
* Non-Income Producing Security.
** Share amount is less than 1.
ADR--American Depositary Receipt.
BDR--British Depositary Receipt.
NCS--Non Convertible Shares.
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS--(CONTINUED)
April 30, 1996
At April 30, 1996, sector diversification of the Portfolio was as follows:
<TABLE>
<CAPTION>
% OF
NET VALUE
SECTOR DIVERSIFICATION ASSETS (000)
- ---------------------- ------ ------
<S> <C> <C>
Automotive...................................................... 3.8% $ 324
Banks........................................................... 9.8 839
Basic Resources................................................. 1.6 140
Beverages, Food & Tobacco....................................... 0.9 80
Broadcasting & Publishing....................................... 4.5 387
Building Materials.............................................. 1.4 119
Capital Equipment............................................... 3.8 330
Chemicals....................................................... 2.7 235
Construction.................................................... 0.9 77
Consumer Durables............................................... 2.6 222
Electronics..................................................... 3.6 310
Energy.......................................................... 3.2 278
Entertainment & Leisure......................................... 1.4 120
Financial Services.............................................. 6.8 587
Holding Company................................................. 1.2 101
Industrial...................................................... 4.4 374
Insurance....................................................... 3.0 253
Manufacturing................................................... 5.8 497
Metals.......................................................... 1.8 150
Mining.......................................................... 0.8 72
Paper & Packaging............................................... 0.5 43
Pharmaceuticals................................................. 2.3 201
Real Estate..................................................... 7.4 639
Repurchase Agreement............................................ 5.7 489
Retail.......................................................... 3.6 308
Services........................................................ 1.8 152
Telecommunications.............................................. 6.3 544
Transportation.................................................. 4.6 397
Utilities....................................................... 2.7 231
----- ------
Total Investments............................................... 98.9% $8,499
Other Assets and Liabilities.................................... 1.1 93
----- ------
Net Assets...................................................... 100.0% $8,592
===== ======
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED
APRIL 30,
(In Thousands) 1996
- ------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Dividends............................................ $154
Interest............................................. 30
Less Foreign Taxes Withheld.......................... (18)
- ------------------------------------------------------------------------
Total Income........................................ 166
- ------------------------------------------------------------------------
EXPENSES
Investment Advisory Fees--Note B
Basic Fees.......................................... $ 54
Less: Fees Waived................................... (54) --
----
Administrative Fees--Note C.......................... 73
Custodian Fees....................................... 31
Filing and Registration Fees......................... 20
Printing Fees........................................ 17
Audit Fees........................................... 13
Trustees' Fees--Note F............................... 2
Other Expenses....................................... 11
Expenses Assumed by Adviser--Note B.................. (63)
- ------------------------------------------------------------------------
Total Expenses...................................... 104
Expense Offset--Note A............................... (1)
- ------------------------------------------------------------------------
Net Expenses........................................ 103
- ------------------------------------------------------------------------
NET INVESTMENT INCOME................................. 63
- ------------------------------------------------------------------------
NET REALIZED GAIN (LOSS):
Investments.......................................... 216
Foreign Currency Transactions........................ (74)
- ------------------------------------------------------------------------
TOTAL NET REALIZED GAIN ON INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS................................ 142
- ------------------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION:
Investments.......................................... 448
Foreign Currency Translations........................ 5
- ------------------------------------------------------------------------
TOTAL NET CHANGE IN UNREALIZED APPRECIATION........... 453
- ------------------------------------------------------------------------
NET GAIN ON INVESTMENTS AND FOREIGN CURRENCY.......... 595
- ------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.. $658
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 16,
1994** TO YEAR ENDED
APRIL 30, APRIL 30,
(In Thousands) 1995 1996
- -------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income................................ $ 20 $ 63
Net Realized Gain (Loss)............................. (29) 142
Net Change in Unrealized Appreciation................ 75 453
- -------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Opera-
tions.............................................. 66 658
- -------------------------------------------------------------------------------
DISTRIBUTIONS:
Net Investment Income................................ -- (4)
In Excess of Net Investment Income................... -- (20)
Net Realized Gain.................................... -- (16)
- -------------------------------------------------------------------------------
Total Distributions................................. -- (40)
- -------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS: (1)
Issued--Regular...................................... 5,626 4,554
--In Lieu of Cash Distributions...................... -- 41
Redeemed............................................. (182) (2,156)
- -------------------------------------------------------------------------------
Net Increase from Capital Share Transactions........ 5,444 2,439
- -------------------------------------------------------------------------------
Total Increase....................................... 5,510 3,057
Net Assets:
Beginning of Period.................................. 25 5,535
- -------------------------------------------------------------------------------
End of Period (2).................................... $5,535 $8,592
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1)Shares Issued and Redeemed:
Shares Issued....................................... 600 465
In Lieu of Cash Distributions....................... -- 4
Redeemed............................................ (20) (215)
- -------------------------------------------------------------------------------
580 254
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(2)Net Assets Consist of:
Paid in Capital..................................... $5,463 $7,900
Undistributed (Distributions in Excess of) Net In-
vestment Income.................................... 13 (20)
Accumulated Net Realized Gain (Loss)................ (16) 184
Unrealized Appreciation............................. 75 528
- -------------------------------------------------------------------------------
$5,535 $8,592
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
**Commencement of Operations
12
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SEPTEMBER 16, YEAR
1994** TO ENDED
APRIL 30, APRIL 30,
1995 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 Invest-
ments+++........................................... (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)
- --------------------------------------------------------------------------------
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 Assets+......... 1.00%* 1.45%#
Ratio of Net Investment Income to Average Net As-
sets+............................................... 1.49%* 0.88%
Portfolio Turnover Rate.............................. 81% 59%
Average Commission Rate##............................ N/A $0.0316
- --------------------------------------------------------------------------------
</TABLE>
* 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
outstanding throughout that period does not accord with the aggregate net
gains on investments for that period because of the timing of sales and
repurchases of the Portfolio shares in relation to fluctuating market
value of the investments 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 Average
Net Assets would be 1.43%.
## The Portfolio has elected to adopt the new SEC regulation requiring
portfolios with fiscal years beginning on or after September 1, 1995 to
disclose the average commission rate paid on trades for which commissions
were charged.
@ Amount is less than $0.01 per share.
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
UAM Funds Trust, formerly known as The Regis Fund II and UAM Funds, Inc.,
formerly known as The Regis Fund, Inc., (collectively the "UAM Funds") were
organized on May 18, 1994 and October 11, 1988, respectively, and are
registered under the Investment Company Act of 1940, as amended, as open-end
management investment companies. The MJI International Equity Portfolio (the
"Portfolio"), a portfolio of UAM Funds Trust, began operations on September
16, 1994. At April 30, 1996, the UAM Funds were comprised of thirty-seven
active portfolios. The financial statements of the remaining portfolios are
presented separately.
A. SIGNIFICANT ACCOUNTING POLICIES: The following significant accounting
policies are in conformity with generally accepted accounting principles for
investment companies. Such policies are consistently followed by the Portfolio
in the preparation of its financial statements. Generally accepted accounting
principles may require management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements.
Actual results may differ from those estimates.
1. SECURITY VALUATION: Securities listed on a securities exchange for which
market quotations are readily available are valued at the last quoted sales
price as of the close of the exchange on the day the valuation is made or,
if no sale occurred on such day, at the bid price on such day. Price
information on listed securities is taken from the exchange where the
security is primarily traded. Over-the-counter and unlisted securities are
valued at the current bid price. Short-term investments that have remaining
maturities of sixty days or less at time of purchase are valued at
amortized cost, if it approximates market value. The value of other assets
and securities for which no quotations are readily available is determined
in good faith at fair value using methods determined by the Board of
Trustees.
2. FEDERAL INCOME TAXES: It is the Portfolio's intention to continue to
qualify as a regulated investment company under Subchapter M of the
Internal Revenue Code and to distribute all of its taxable income.
Accordingly, no provision for Federal income taxes is required in the
financial statements.
The Portfolio may be subject to taxes imposed by countries in which it
invests. Such taxes are generally based on either income or gains earned or
repatriated. The Portfolio accrues such taxes when the related income is
earned.
At April 30, 1996, the Portfolio's cost of investments for Federal income
tax purposes was approximately $7,972,000. Net unrealized appreciation for
Federal income tax purposes aggregated approximately $527,000 of which
approximately $771,000 related to appreciated securities and approximately
$244,000 related to depreciated securities. For the period ended April 30,
1996, the Portfolio expects to defer to May 1, 1996 for Federal income tax
purposes, post-October currency losses of $24,000.
3. REPURCHASE AGREEMENTS: In connection with transactions in repurchase
agreements, the Portfolio's custodian bank takes possession of the
underlying securities, the value of which exceeds the principal amount of
the repurchase transaction, including accrued interest. To the extent that
any repurchase transaction exceeds one business day, the value of the
collateral is marked-to-market on a daily basis to determine the adequacy
of the collateral. In the event of default on the obligation to repurchase,
the Portfolio has the right to liquidate the collateral and apply the
proceeds in satisfaction of the obligation. In the event of default or
bankruptcy by the other party to the agreement, realization and/or
retention of the collateral or proceeds may be subject to legal
proceedings.
14
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
4. FOREIGN CURRENCY TRANSLATION: The books and records of the Portfolio are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the bid prices of such currencies against U.S. dollars last
quoted by a major bank. The Portfolio does not isolate that portion of
realized or unrealized gains and losses resulting from changes in the
foreign exchange rate from fluctuations arising from changes in the market
prices of the securities. Net realized gains and losses on foreign currency
transactions represent net foreign exchange gains or losses from forward
foreign currency exchange contracts, disposition of foreign currencies,
currency gains or losses realized between trade and settlement dates on
securities transactions and the difference between the amount of the
investment income and foreign withholding taxes recorded on the Portfolio's
books and the U.S. dollar equivalent amounts actually received or paid.
5. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS: The Portfolio may enter
into forward foreign currency exchange contracts to protect the value of
securities held and related receivables and payables against changes in
future foreign exchange rates. A forward currency contract is an agreement
between two parties to buy or sell currency at a set price on a future
date. The market value of the contract will fluctuate with changes in
currency exchange rates. The contract is marked-to-market daily using the
forward rate and the change in market value is recorded by the Portfolio as
unrealized gain or loss. The Portfolio recognizes realized gain or loss
when the contract is closed, equal to the difference between the value of
the contract at the time it was opened and the value at the time it was
closed. Risks may arise upon entering into these contracts from the
potential inability of counterparties to meet the terms of their contracts
and are generally limited to the amount of unrealized gain on the
contracts, if any, at the date of default. Risks may also arise from
unanticipated movements in the value of a foreign currency relative to the
U.S. dollar.
6. DISTRIBUTIONS TO SHAREHOLDERS: The Portfolio will normally distribute
substantially all of its net investment income annually. Any realized net
capital gains will normally be distributed annually. All distributions are
recorded on ex-dividend date.
The amount and character of income and capital gain distributions to be
paid are determined in accordance with Federal income tax regulations which
may differ from generally accepted accounting principles. These differences
are primarily due to differing book and tax treatments for foreign currency
transactions and deferred organization costs.
Permanent book and tax basis differences relating to shareholder
distributions may result in reclassifications to undistributed net
investment income (loss), accumulated net realized gain (loss) and paid in
capital.
7. OTHER: Security transactions are accounted for on trade date, the date
the trade was executed. Costs used in determining realized gains and losses
on the sale of investment securities are based on the specific
identification method. Dividend income is recorded on the ex-dividend date,
except that certain dividends from foreign securities are recorded as soon
as the Portfolio is informed of the ex-dividend date. Interest income is
recognized on the accrual basis. Most expenses of the UAM Funds can be
directly attributed to a particular portfolio. Expenses which cannot be
directly attributed are apportioned among the portfolios of the UAM Funds
based on their relative net assets. Additionally, certain expenses are
apportioned among the portfolios of the UAM Funds and AEW Commercial
Mortgage Securities Fund, Inc. ("AEW"), an affiliated closed-end management
investment company, based on their relative net assets. Custodian fees for
the Portfolio have been increased to include expense offsets for custodian
balance credits. Costs incurred
15
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
by the Portfolio in connection with its organization have been deferred and
are being amortized on a straight-line basis over a five year period.
Current year permanent book-tax differences, if any, are not included in
ending undistributed net investment income (loss) for the purpose of
calculating net investment income (loss) per share in the financial
highlights.
B. ADVISORY SERVICES: Under the terms of an investment advisory agreement,
Murray Johnstone International Ltd. (the "Adviser"), an indirect wholly-owned
subsidiary of United Asset Management Corporation ("UAM"), provides investment
advisory services to the Portfolio at a fee calculated at an annual rate of
0.75% of average daily net assets. Effective July 1, 1995, the Adviser has
voluntarily agreed to waive a portion of its advisory fees and to assume
expenses, if necessary, in order to keep the Portfolio's total annual
operating expenses, after the effect of expense offsets arrangements, from
exceeding 1.50% of average daily net assets. Prior to July 1, 1995, the
Adviser voluntarily agreed to waive a portion of its advisory fees and to
assume expenses, if necessary, in order to keep the Portfolio's total annual
operating expenses from exceeding 1.00% of average daily net assets.
C. ADMINISTRATION SERVICES: Effective April 15, 1996, UAM Fund Services, Inc.
(the "Administrator"), a wholly-owned subsidiary of UAM, provides and oversees
administrative, fund accounting, dividend disbursing and transfer agent
services to the UAM Funds and AEW under an Administration Agreement (the
"Agreement"). Pursuant to the Agreement, the Administrator is entitled to
receive annual fees, computed daily and payable monthly, of 0.19% of the first
$200 million of the combined aggregate net assets; plus 0.11% of the next $800
million of the combined aggregate net assets; plus 0.07% of the next $2
billion of the combined aggregate net assets; plus 0.05% of the combined
aggregate net assets in excess of $3 billion. The fees are allocated among the
portfolios of the UAM Funds and AEW on the basis of their relative net assets
and are subject to a graduated minimum fee schedule per portfolio which rises
from $2,000 per month, upon inception of a portfolio, to $70,000 annually
after two years. For portfolios with more than one class of shares, the
minimum annual fee increases to $90,000. In addition, the Administrator
receives a Portfolio-specific monthly fee of 0.06% of average daily net assets
of the Portfolio. Also effective April 15, 1996, the Administrator has entered
into a Mutual Funds Service Agreement with Chase Global Funds Services Company
("CGFSC"), a wholly-owned subsidiary of The Chase Manhattan Bank, N.A., under
which CGFSC agrees to provide certain services, including but not limited to,
administration, fund accounting, dividend disbursing and transfer agent
services. Pursuant to the Mutual Funds Service Agreement, the Administrator
pays CGFSC a monthly fee.
Prior to April 15, 1996, CGFSC, formerly Mutual Funds Service Company
("MFSC"), served as the administrator to the UAM Funds and AEW. For its
services as administrator CGFSC received annual fees, computed daily and
payable monthly, based on the combined aggregate average daily net assets of
the UAM Funds and AEW, as follows: 0.20% of the first $200 million of the
combined aggregate net assets; plus 0.12% of the next $800 million of the
combined aggregate net assets; plus 0.08% of the combined aggregate net assets
in excess of $1 billion but less than $3 billion; plus 0.06% of the combined
aggregate net assets in excess of $3 billion. The fees were allocated among
the portfolios of the UAM Funds and AEW on the basis of their relative net
assets and were subject to a graduated minimum fee schedule per portfolio
which rose from $2,000 per month, upon inception of a portfolio, to $70,000
annually after two years. Prior to September 1, 1995, MFSC
16
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
was an affiliate of United States Trust Company of New York and provided
administrative services to the UAM Funds and AEW under the same terms,
conditions and fees as stated above for CGFSC.
For the period April 15, 1996 to April 30, 1996, UAM Fund Services, Inc.
earned $3,134 from the Portfolio as Administrator.
D. DISTRIBUTION SERVICES: UAM Fund Distributors, Inc. (the "Distributor"),
formerly known as RFI Distributors (a division of Regis Retirement Plan
Services, Inc.), a wholly-owned subsidiary of UAM, distributes the shares of
the Portfolio. The Distributor does not receive any fee or other compensation
with respect to the Portfolio.
E. PURCHASES AND SALES: For the year ended April 30, 1996, the Portfolio made
purchases of approximately $7,998,000 and sales of approximately $4,438,000 of
investment securities other than long-term U.S. Government and short-term
securities. There were no purchases and sales of long-term U.S. Government
securities.
F. TRUSTEES' FEES: Each Trustee, who is not an officer or affiliated person,
receives $2,000 per meeting attended, which is allocated proportionally among
the active portfolios of UAM Funds and AEW, plus a quarterly retainer of $150
for each active portfolio of the UAM Funds and AEW, and reimbursement of
expenses incurred in attending Trustee meetings.
G. LINE OF CREDIT: The Portfolio, along with certain other portfolios of UAM
Funds, collectively entered into an agreement which enables them to
participate in a $100 million unsecured line of credit with several banks.
Borrowings will be made solely to temporarily finance the repurchase of
portfolio shares. Interest is charged to each participating portfolio based on
its borrowings at a rate per annum equal to the Federal Funds rate plus 0.75%.
In addition, a commitment fee of 1/10th of 1% per annum, payable at the end of
each calendar quarter, is accrued by each participating portfolio based on its
average daily unused portion of the line of credit. During the year ended
April 30, 1996, the Portfolio had no borrowings under the agreement.
H. OTHER: At April 30, 1996, 40.1% of total shares outstanding were held by
one record shareholder.
At April 30, 1996, the net assets of the Portfolio was substantially comprised
of foreign denominated securities and/or currency. Changes in currency
exchange rates will affect the value of and investment income from such
securities and currency.
Foreign security and currency transactions may involve certain considerations
and risks not typically associated with those of U.S. dollar denominated
transactions as a result of, among other factors, the possibly lower level of
governmental supervision and regulation of foreign securities markets and the
possibility of political or economic instability.
17
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of
UAM Funds Trust and Shareholders of
MJI International Equity Portfolio
In our opinion, the accompanying statement of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
the MJI International Equity Portfolio (the "Portfolio"), a Portfolio of UAM
Funds Trust, at April 30, 1996, and the results of its operations, the changes
in its net assets and the financial highlights for the period indicated, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Portfolio's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in
accordance with generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included
confirmation of securities at April 30, 1996 by correspondence with the
custodian and brokers and the application of alternative auditing procedures
where confirmations from brokers were not received, provide a reasonable basis
for the opinion expressed above.
Price Waterhouse LLP
Boston, Massachusetts
June 14, 1996
- -------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION: (UNAUDITED)
Foreign taxes accrued during the period ended April 30, 1996 amounting to
approximately $18,000 are expected to be passed through to the shareholders as
foreign tax credits on Form 1099--DIV for the year ending December 31, 1996
which shareholders of this Portfolio will receive in late January 1997.
18
<PAGE>
- -------------------------------------------------------------------------------
UAM FUNDS
TJ CORE EQUITY
PORTFOLIO
- -------------------------------------------------------------------------------
OFFICERS AND TRUSTEES
Norton H. Reamer Peter M. Whitman, Jr.
Trustee, President Trustee
and Chairman
Mary Rudie Barneby William H. Park
Trustee and Executive Vice President and
Vice President Assistant Treasurer
John T. Bennett, Jr. Karl O. Hartmann
Trustee Secretary
J. Edward Day Robert R. Flaherty
Trustee Treasurer
Philip D. English Harvey M. Rosen
Trustee Assistant Secretary
William A. Humenuk
Trustee
- -------------------------------------------------------------------------------
INVESTMENT ADVISER
Tom Johnson Investment Management, Inc.
211 North Robinson, Suite 450
Oklahoma City, OK 73102
- -------------------------------------------------------------------------------
ADMINISTRATOR
UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110
- -------------------------------------------------------------------------------
CUSTODIAN
The Bank of New York
60 Wall Street, New York, NY 10260
- -------------------------------------------------------------------------------
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young LLP
2600 One Commerce Square
Philadelphia, PA 19103
- -------------------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
160 Federal Street
Boston, MA 02110
- -------------------------------------------------------------------------------
DISTRIBUTOR
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
- -------------------------------------------------------------------------------
This report has been prepared for shareholders and may be distributed to
others only if preceded or accompanied by a current prospectus.
- -------------------------------------------------------------------------------
UAM FUNDS
TJ CORE
EQUITY
PORTFOLIO
- -------------------------------------------------------------------------------
ANNUAL REPORT
APRIL 30, 1996
<PAGE>
Dear Shareholders,
During the seven month period ended April 30, 1996, the equity markets
extended the strong performance of 1995, producing another quarter of
exceptional gains. In contrast to the equity markets, bond markets suffered
during this period. Strong employment numbers and satisfactory corporate
profits released during the first quarter of 1996 indicated a more robust
economy and elicited fears of higher inflation. As a result, bonds were
negatively impacted, pushing yields on the 30-year Treasury near the 7% level.
The period ended April 30 culminates our first seven months of management
for the TJ Core Equity Portfolio and ends the Portfolio's fiscal year. Since
inception on September 28, 1995, the TJ Core Equity Portfolio's net asset
value (NAV) has increased from $10.00 to $11.05, and with dividends included,
the Portfolio had a total return of 11.13% over the period. During the period
September 30, 1995 to April 30, 1996 the S&P 500 Index increased from 584.41
to 654.17, posting a total return (including dividends) of 13.35%. On a
relative basis, the TJ Core Equity Portfolio trailed the S&P 500 Index by
2.22% for the seven months ended April 30, 1996.
The performance of the Portfolio was bolstered by its exposure to the
automotive, electronic defense, energy and retail sectors. Positions in Ford
Motor, ITT Industries, Textron Inc., Mobil, and Dillard Department Stores all
helped to increase performance during the seven month period ended April 30,
1996. However, the Portfolio was negatively impacted by its exposure to the
consumer staples and finance sectors. These groups had a weak seven months and
substantially underperformed the strength of the S&P 500 Index.
Although disappointed to not be outperforming our benchmark during this
initial period, we are comfortable with the Portfolio's holdings and confident
in our style of investing in high quality companies with lower valuations in
sectors of the economy exhibiting strong or improving relative performance.
Tom Johnson Investment Management, Inc.
The investment results presented in the Adviser's letter represent past
performance and should not be construed as a guarantee of future results. If
the Adviser did not have temporary fee waivers and did not assume expenses on
behalf of the Portfolio, total return for the Portfolio would have been lower.
The investment return and principal value of an investment will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than their
original cost.
1
<PAGE>
Performance Comparison
================================================================================
COMPARISON OF CHANGE IN VALUE OF $10,000 PURCHASE IN THE
TJ CORE EQUITY PORTFOLIO AND THE STANDARD & POOR'S 500 INDEX (S&P 500)
---------------------------------------------------
CUMULATIVE TOTAL RETURN**
FOR PERIOD ENDED APRIL 30, 1996
---------------------------------------------------
SINCE 9/28/95*++
---------------------------------------------------
11.13%
---------------------------------------------------
[PERFORMANCE COMPARISON GRAPH APPEARS HERE]
TJ CORE EQUITY PORTFOLIO S&P 500 INDEX+
9/28/95*++ 10,000 10,000
4/30/96 11,113 11,335
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate. When shares are redeemed, they may
be worth more or less than the original cost.
* Commencement of Operations
** Total return of the Portfolio reflects fees waived and expenses assumed by
the Adviser. Without such waiver of fees and expenses assumed, total return
would be lower.
+ The comparative index is not adjusted to reflect expenses or other fees that
the SEC requires to be reflected in the Portfolio's performance. The fees, if
reflected, would reduce the performance quoted. The Portfolio's performance
assumes the reinvestment of all dividends and distributions. The comparative
index has been adjusted to reflect reinvestment of dividends on securities in
the index.
++ For comparative purposes, the value of the S&P 500 Index on 9/30/95 is used
as the beginning value on 9/28/95.
DEFINITION OF THE COMPARATIVE INDEX
-----------------------------------
The S&P 500 Index is an unmanaged index composed of 400 industrial, 40
financial, 40 utilities and 20 transportation stocks.
Please note that one cannot invest in an unmanaged index.
2
<PAGE>
TJ CORE EQUITY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
April 30, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (000)+
<S> <C> <C>
- -------------------------------------------------------------------------------
COMMON STOCKS (99.5%)
- -------------------------------------------------------------------------------
AUTOMOTIVE (3.1%)
Ford Motor Company.............................................. 900 $ 32
- -------------------------------------------------------------------------------
BANKS (4.6%)
First Union Corp. .............................................. 500 31
NationsBank Corp. .............................................. 200 16
------
47
- -------------------------------------------------------------------------------
BEVERAGES, FOOD & TOBACCO (11.2%)
Anheuser-Busch Cos., Inc. ...................................... 200 13
*@Earthgrains Co. .............................................. 8 --
Heinz (H.J.) Co. ............................................... 1,200 41
Sara Lee Corp. ................................................. 1,100 34
Unilever N.V.--New York Shares.................................. 200 27
------
115
- -------------------------------------------------------------------------------
BROADCASTING & PUBLISHING (11.0%)
Dun & Bradstreet Corp. ......................................... 700 43
Gannett Co. .................................................... 500 34
McGraw-Hill Cos., Inc. ......................................... 800 35
------
112
- -------------------------------------------------------------------------------
CHEMICALS (3.1%)
Mallinckrodt Group, Inc. ....................................... 800 32
- -------------------------------------------------------------------------------
ELECTRONICS (3.8%)
General Electric Co. ........................................... 500 39
- -------------------------------------------------------------------------------
ENERGY (9.6%)
Amoco Corp. .................................................... 500 36
Coastal Corp. .................................................. 700 28
Mobil Corp. .................................................... 200 23
Repsol S.A. ADR................................................. 300 11
------
98
- -------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
TJ CORE EQUITY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS--(CONTINUED)
April 30, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (000)+
<S> <C> <C>
- -------------------------------------------------------------------------------
COMMON STOCKS--(CONTINUED)
- -------------------------------------------------------------------------------
FINANCIAL SERVICES (6.3%)
American Express Co. ........................................... 500 $ 24
Federal National Mortgage Association........................... 800 25
Lehman Brothers Holdings, Inc. ................................. 600 15
------
64
- -------------------------------------------------------------------------------
HEALTH CARE (2.2%)
United Healthcare Corp. ........................................ 400 23
- -------------------------------------------------------------------------------
HOLDING COMPANY (2.5%)
Textron, Inc. .................................................. 300 26
- -------------------------------------------------------------------------------
INSURANCE (3.3%)
ITT Hartford Group, Inc. ....................................... 700 34
- -------------------------------------------------------------------------------
MANUFACTURING (6.5%)
ITT Industries, Inc. ........................................... 1,300 36
Tyco International Ltd. ........................................ 800 31
------
67
- -------------------------------------------------------------------------------
METALS (1.7%)
USX-U.S. Steel Group, Inc. ..................................... 500 17
- -------------------------------------------------------------------------------
OFFICE EQUIPMENT (2.0%)
Pitney Bowes, Inc. ............................................. 400 20
- -------------------------------------------------------------------------------
PAPER & PACKAGING (1.6%)
Union Camp Corp. ............................................... 300 16
- -------------------------------------------------------------------------------
PHARMACEUTICALS (6.2%)
Bristol-Myers Squibb Co. ....................................... 400 33
Merck & Co., Inc. .............................................. 500 30
------
63
- -------------------------------------------------------------------------------
RETAIL (2.4%)
Dillard Department Stores Inc., Class A......................... 600 24
- -------------------------------------------------------------------------------
SERVICES (3.0%)
WMX Technologies, Inc. ......................................... 900 31
- -------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
TJ CORE EQUITY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS--(CONTINUED)
April 30, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (000)+
<S> <C> <C>
- -------------------------------------------------------------------------------
COMMON STOCKS--(CONTINUED)
- -------------------------------------------------------------------------------
TECHNOLOGY (7.4%)
Avnet, Inc. ................................................... 400 $ 21
*Compaq Computer Corp. ........................................ 700 33
International Business Machines Corp. ......................... 200 22
------
76
- -------------------------------------------------------------------------------
UTILITIES (8.0%)
AT&T Corp. .................................................... 700 43
GTE Corp. ..................................................... 600 26
Telefonos de Mexico S.A. ADR, Class L.......................... 400 13
------
82
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS (COST $933)................................... 1,018
- -------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (0.5%)
- -------------------------------------------------------------------------------
Cash........................................................... 11
Receivable for Investments Sold................................ 12
Receivable due from Investment Adviser......................... 11
Dividends Receivable........................................... 1
Payable for Administrative Fees................................ (4)
Payable for Trustees' Fees..................................... (1)
Payable for Service Fees....................................... (1)
Other Liabilities.............................................. (24)
------
5
- -------------------------------------------------------------------------------
NET ASSETS (100%)
Applicable to 92,594 outstanding Institutional Service Class
shares
(unlimited authorization, no par value)....................... $1,023
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE........ $11.05
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
+See Note A to Financial Statements
*Non-Income Producing Security
@Value is less than $500.
ADR--American Depositary Receipt
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
TJ CORE EQUITY PORTFOLIO
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
SEPTEMBER 28, 1995*
(In Thousands) TO APRIL 30, 1996
- --------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Dividends............................................... $ 10
Interest................................................ 1
- --------------------------------------------------------------------------------
Total Income........................................... 11
- --------------------------------------------------------------------------------
EXPENSES
Investment Advisory Fees--Note B
Basic Fees............................................. $ 4
Less: Fees Waived...................................... (4) --
---------
Administrative Fees--Note C............................. 17
Registration and Filing................................. 20
Audit Fees.............................................. 12
Printing Fees........................................... 10
Trustees' Fees--Note F.................................. 2
Custodian Fees.......................................... 1
Service Fees--Note D.................................... 1
Other Expenses.......................................... 3
Expenses Assumed by the Adviser--Note B................. (59)
- --------------------------------------------------------------------------------
Total Expenses......................................... 7
Expense Offset--Note A.................................. (1)
- --------------------------------------------------------------------------------
Net Expenses........................................... 6
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME.................................... 5
- --------------------------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS......................... 3
NET CHANGE IN UNREALIZED APPRECIATION ON INVESTMENTS..... 85
- --------------------------------------------------------------------------------
NET GAIN ON INVESTMENTS.................................. 88
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS..... $ 93
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
* Commencement of Operations
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
TJ CORE EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 28, 1995*
(In Thousands) TO APRIL 30, 1996
- --------------------------------------------------------------------------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income...................................... $ 5
Net Realized Gain.......................................... 3
Net Change in Unrealized Appreciation...................... 85
- --------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations...... 93
- --------------------------------------------------------------------------------
DISTRIBUTIONS:
Net Investment Income...................................... (5)
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS: (1)
Issued--Regular............................................ 1,021
--In Lieu of Cash Distributions............................ 5
Redeemed................................................... (91)
- --------------------------------------------------------------------------------
Net Increase from Capital Share Transactions.............. 935
- --------------------------------------------------------------------------------
Total Increase............................................. 1,023
Net Assets:
Beginning of Period........................................ --
- --------------------------------------------------------------------------------
End of Period (2).......................................... $1,023
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1)Shares Issued and Redeemed:
Shares Issued.............................................. 101
In Lieu of Cash Distributions.............................. 1
Shares Redeemed............................................ (9)
- --------------------------------------------------------------------------------
93
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(2)Net Assets Consist of:
Paid in Capital............................................ $ 935
Accumulated Net Realized Gain.............................. 3
Unrealized Appreciation.................................... 85
- --------------------------------------------------------------------------------
$1,023
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
*Commencement of Operations
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
TJ CORE EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
<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 for the period ended April 30, 1996.
++ Total return would have been lower had certain fees not been waived and
expenses 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%**.
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
TJ CORE EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
UAM Funds Trust, formerly known as The Regis Fund II and UAM Funds, Inc.,
formerly known as The Regis Fund, Inc. (collectively the "UAM Funds") were
organized on May 18, 1994 and October 11, 1988, respectively, and are
registered under the Investment Company Act of 1940, as amended, as open-end
management investment companies. The TJ Core Equity Portfolio (the
"Portfolio"), a portfolio of UAM Funds Trust, began operations on September
28, 1995. At April 30, 1996 the UAM Funds were comprised of thirty-seven
active portfolios. The financial statements of the remaining portfolios are
presented separately.
A. SIGNIFICANT ACCOUNTING POLICIES: The following significant accounting
policies are in conformity with generally accepted accounting principles for
investment companies. Such policies are consistently followed by the Portfolio
in the preparation of its financial statements. Generally accepted accounting
principles may require management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements.
Actual results may differ from those estimates.
1. SECURITY VALUATION: Securities listed on a securities exchange for
which market quotations are readily available are valued at the last quoted
sales price as of the close of the exchange on the day the valuation is
made or, if no sale occurred on such day, at the bid price on such day.
Price information on listed securities is taken from the exchange where the
security is primarily traded. Over-the-counter and unlisted securities are
valued at the current bid price. Short-term investments that have remaining
maturities of sixty days or less at time of purchase are valued at
amortized cost, if it approximates market value. The value of other assets
and securities for which no quotations are readily available is determined
in good faith at fair value using methods determined by the Board of
Trustees.
2. FEDERAL INCOME TAXES: It is the Portfolio's intention to qualify as a
regulated investment company under Subchapter M of the Internal Revenue
Code and to distribute all of its taxable income. Accordingly, no provision
for Federal income taxes is required in the financial statements.
At April 30, 1996, the Portfolio's cost of investments for Federal income
tax purposes was approximately $933,000. Net unrealized appreciation for
Federal income tax purposes aggregated approximately $85,000, of which
approximately $89,000 related to appreciated securities and approximately
$4,000 related to depreciated securities.
3. REPURCHASE AGREEMENTS: In connection with transactions in repurchase
agreements, the Portfolio's custodian bank takes possession of the
underlying securities, the value of which exceeds the principal amount of
the repurchase transaction, including accrued interest. To the extent that
any repurchase transaction exceeds one business day, the value of the
collateral is marked-to-market on a daily basis to determine the adequacy
of the collateral. In the event of default on the obligation to repurchase,
the Portfolio has the right to liquidate the collateral and apply the
proceeds in satisfaction of the obligation. In the event of default or
bankruptcy by the other party to the agreement, realization and/or
retention of the collateral or proceeds may be subject to legal
proceedings.
4. DISTRIBUTIONS TO SHAREHOLDERS: The Portfolio will normally distribute
substantially all of its net investment income quarterly. Any realized net
capital gains will be distributed annually. All distributions are recorded
on ex-dividend date.
The amount and character of income and capital gain distributions to be
paid are determined in accordance with Federal income tax regulations which
may differ from generally accepted accounting principles.
9
<PAGE>
TJ CORE EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
Permanent book and tax basis differences relating to shareholder
distributions may result in reclassifications to undistributed net
investment income (loss), accumulated net realized gain (loss) and paid in
capital.
5. OTHER: Security transactions are accounted for on trade date, the date
the trade was executed. Costs used in determining realized gains and losses
on the sale of investment securities are based on the specific
identification method. Dividend income is recorded on the ex-dividend date.
Interest income is recognized on the accrual basis. Most expenses of the
UAM Funds can be directly attributed to a particular portfolio. Expenses
which cannot be directly attributed are apportioned among the portfolios of
the UAM Funds based on their relative net assets. Additionally, certain
expenses are apportioned among the portfolios of the UAM Funds and AEW
Commercial Mortgage Securities Fund, Inc. ("AEW"), an affiliated closed-end
management investment company, based on their relative net assets.
Custodian fees for the Portfolio have been increased to include expense
offsets for custodian balance credits.
Current year permanent book-tax differences, if any, are not included in
ending undistributed net investment income (loss) for the purpose of
calculating net investment income (loss) per share in the financial
highlights.
B. ADVISORY SERVICES: Under the terms of an investment advisory agreement,
Tom Johnson Investment Management, Inc. (the "Adviser"), a wholly-owned
subsidiary of United Asset Management Corporation ("UAM"), provides investment
advisory services to the Portfolio at a fee calculated at an annual rate of
0.75% of average daily net assets. Through January 1, 1997, the Adviser has
voluntarily agreed to waive a portion of its advisory fees and to assume
expenses, if necessary, in order to keep the Portfolio's total annual
operating expenses, after the effect of expense offset arrangements, from
exceeding 1.25% of average daily net assets.
C. ADMINISTRATIVE SERVICES: Effective April 15, 1996, UAM Fund Services,
Inc. (the "Administrator"), a wholly-owned subsidiary of UAM, provides and
oversees administrative, fund accounting, dividend disbursing and transfer
agent services to the UAM Funds and AEW under an Administration Agreement (the
"Agreement"). Pursuant to the Agreement, the Administrator is entitled to
receive annual fees, computed daily and payable monthly, of 0.19% of the first
$200 million of the combined aggregate net assets; plus 0.11% of the next $800
million of the combined aggregate net assets; plus 0.07% of the next $2
billion of the combined aggregate net assets; plus 0.05% of the combined
aggregate net assets in excess of $3 billion. The fees are allocated among the
portfolios of the UAM Funds and AEW on the basis of their relative net assets
and are subject to a graduated minimum fee schedule per portfolio which rises
from $2,000 per month, upon inception of a portfolio, to $70,000 annually
after two years. For portfolios with more than one class of shares, the
minimum annual fee increases to $90,000. In addition, the Administrator
receives a Portfolio-specific monthly fee of 0.04% of average daily net assets
of the Portfolio. Also effective April 15, 1996, the Administrator has entered
into a Mutual Funds Service Agreement with Chase Global Funds Services Company
("CGFSC"), a wholly-owned subsidiary of The Chase Manhattan Bank, N.A., under
which CGFSC agrees to provide certain services, including but not limited to,
administration, fund accounting, dividend disbursing and transfer agent
services. Pursuant to the Mutual Funds Service Agreement, the Administrator
pays CGFSC a monthly fee.
Prior to April 15, 1996, CGFSC served as the administrator to the UAM Funds
and AEW. For its services as administrator CGFSC received annual fees,
computed daily and payable monthly, based on the combined aggregate average
daily net assets of the UAM Funds and AEW, as follows: 0.20% of the first $200
million of
10
<PAGE>
TJ CORE EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
the combined aggregate net assets; plus 0.12% of the next $800 million of the
combined aggregate net assets; plus 0.08% of the combined aggregate net assets
in excess of $1 billion but less than $3 billion; plus 0.06% of the combined
aggregate net assets in excess of $3 billion. The fees were allocated among
the portfolios of the UAM Funds and the AEW on the basis of their relative net
assets and were subject to a graduated minimum fee schedule per portfolio
which rose from $2,000 per month, upon inception of a portfolio, to $70,000
annually after two years.
For the period April 15, 1996 to April 30, 1996, UAM Fund Services, Inc.
earned $1,768 from the Portfolio as Administrator.
D. DISTRIBUTION AND SERVICE PLANS: UAM Fund Distributors, Inc. (the
"Distributor"), formerly known as RFI Distributors (a division of Regis
Retirement Plan Services, Inc.), a wholly-owned subsidiary of UAM, distributes
the shares of the Portfolio. The Portfolio has adopted a Distribution and
Shareholder Service Plan (the "Plans") pursuant to Rule 12b-1 under the
Investment Company Act of 1940. Under the Plans, the Portfolio may not incur
distribution or service costs which exceed an annual rate of 0.75% of the
Portfolio's net assets. The Board has currently limited aggregate payments
under the Plans to an annual rate of 0.50% of the Portfolio's net assets. The
Portfolio is not currently making payments under the Distribution Plan. Under
the Service Plan, the Portfolio reimburses the Distributor or the Service
Agent for payments made at an annual rate of up to 0.25% of the average daily
net assets of the shares owned by clients of such Service Agent.
E. PURCHASES AND SALES: For the period ended April 30, 1996, the Portfolio
made purchases of approximately $1,070,000 and sales of approximately $140,000
of investment securities other than long-term U.S. Government and short-term
securities. There were no purchases and sales of long-term U.S. Government
securities.
F. TRUSTEES' FEES: Each Trustee, who is not an officer or affiliated person,
receives $2,000 per meeting attended which is allocated proportionally among
the active portfolios of UAM Funds and AEW, plus a quarterly retainer of $150
for each active portfolio of the UAM Funds and AEW, and reimbursement of
expenses incurred in attending Trustee meetings.
G. OTHER: At April 30, 1996 98.5% of total shares outstanding were held by
one record shareholder.
11
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of
UAM Funds Trust and Shareholders of
TJ Core Equity Portfolio
In our opinion, the accompanying statement of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
the TJ Core Equity Portfolio (the "Portfolio"), a Portfolio of UAM Funds
Trust, at April 30, 1996, and the results of its operations, the changes in
its net assets and the financial highlights for the period from September 28,
1995 (commencement of operations) through April 30, 1996, in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Portfolio's management; our responsibility is to express
an opinion on these financial statements based on our audit. We conducted our
audit of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audit, which included confirmation of securities at April 30, 1996 by
correspondence with the custodian, provides a reasonable basis for the opinion
expressed above.
Price Waterhouse LLP
Boston, Massachusetts
June 14, 1996
- -------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION: (UNAUDITED)
For the period ended April 30, 1996, the percentage of dividends paid that
qualify for the 70% dividend received deduction for corporate shareholders is
100%.
12
<PAGE>
- -------------------------------------------------------------------------------
UAM FUNDS
NEWBOLD'S EQUITY
PORTFOLIO
- -------------------------------------------------------------------------------
OFFICERS AND TRUSTEES
Norton H. Reamer Peter M. Whitman, Jr.
Trustee, President Trustee
and Chairman
Mary Rudie Barneby William H. Park
Trustee and Executive Vice President and
Vice President Assistant Treasurer
John T. Bennett, Jr. Karl O. Hartmann
Trustee Secretary
J. Edward Day Robert R. Flaherty
Trustee Treasurer
Philip D. English Harvey M. Rosen
Trustee Assistant Secretary
William A. Humenuk
Trustee
- -------------------------------------------------------------------------------
INVESTMENT ADVISER
Newbold's Asset Management, Inc.
950 Haverford Road
Bryn Mawr, PA 19010
- -------------------------------------------------------------------------------
ADMINISTRATOR
UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110
- -------------------------------------------------------------------------------
CUSTODIAN
The Bank of New York
60 Wall Street, New York, NY 10260
- -------------------------------------------------------------------------------
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young LLP
2600 One Commerce Square
Philadelphia, PA 19103
- -------------------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
160 Federal Street
Boston, MA 02110
- -------------------------------------------------------------------------------
DISTRIBUTOR
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
- -------------------------------------------------------------------------------
This report has been prepared for shareholders and may be distributed to
others only if preceded or accompanied by a current prospectus.
- -------------------------------------------------------------------------------
UAM FUNDS
NEWBOLD'S
EQUITY
PORTFOLIO
- -------------------------------------------------------------------------------
ANNUAL REPORT
APRIL 30, 1996
<PAGE>
Dear Shareholder,
We are pleased to provide you with our annual report for the period ended
April 30, 1996 on the UAM Portfolio managed by Newbold's Asset Management.
Since inception on September 13, 1995, through April 30, 1996, Newbold's
Equity Portfolio (the "Portfolio") has had a total return of 11.31%, compared
to the S&P 500 total return of 18.13% for the period from August 31, 1995 to
April 30, 1996.
The Portfolio Management Team at Newbold's Asset Management has utilized the
same value oriented philosophy since 1940. We pursue a conservative approach
while selecting quality companies that we feel are undervalued.
Our equity decision making process focuses on fundamental bottom-up analysis
on the companies we feel are statistically attractive. We start with a
universe of 8,000 stocks. We reduce the number to 200 companies that appear
attractive based on market capitalization, dividend payout, balance sheet
strength, return on equity, and price-to-earnings ratio relative to the S&P
500 Index (the "S&P 500"). Rigorous fundamental analysis is applied to those
200 companies to uncover those stocks that offer the most value for the
Portfolio's shareholders (typically the Portfolio will have 40-70 company
names). By applying this process, our long term goal is to outperform the S&P
500, while taking meaningfully less risk.
ECONOMICS AND MARKETS
The fourth quarter of 1995 was marked by a number of firsts in the equity
markets. The Dow Jones Industrial Average finished above the 5,000 point mark,
the S&P 500 dividend yield reached an all time low of 2.1%, and the equity
market had not experienced a correction of more than 10% in more than five
years, the longest such time in history. Consistent with these events, the S&P
500 finished the year with a +38% return, nearly four times the historical
norm.
The first four months of 1996 started in the same fashion as 1995. Stock
prices moved significantly higher. Consensus among market watchers was that
the economy would continue to slow, therefore forcing the Federal Reserve
(Fed) to lower interest rates. Fed easing would be positive for both stocks
and bonds. Indeed, January was an exceptional month for the financial markets.
However, investors were not prepared for the massive increase in new jobs in
February. Market analysts had been expecting continued signs of weakness and
further Fed easing. A rapid increase in new jobs can have an inflationary
effect on the economy which is viewed negatively in the financial markets.
When the new jobs report was released, stock and bond prices plummeted. For
the balance of the year, the economic outlook and the level of inflation are
the key questions for investors.
With the stock market at record levels, equity investors should be cautious.
Price-to-earnings ratios are within their historical range, however company
earnings growth is slowing as the benefits of restructuring begin to abate.
The 2.1% dividend yield on the S&P 500 is at an all time low and provides
little cushion in the event of a downturn in stock prices. Newbold's Asset
Management will continue to focus on those companies that offer compelling
valuations and meaningful dividends for the benefit of the Portfolio's
shareholders.
Given the strong advancement in stock prices over the last year, Newbold's
Asset Management has increased the defensive nature of the Portfolio.
Additions to the Portfolio in the oil and utility groups should allow
shareholders to benefit from the above market dividend yields provided by
these types of companies. Also,
1
<PAGE>
these companies operate in the more stable sectors of the economy. Newbold's
Equity Portfolio continues to have a dividend yield equal to 150% of that of
the S&P 500 (3.2% vs. 2.1% for the S&P 500). This should provide a cushion in
the event of a difficult period in the stock market.
As the risk levels in the equity market continue to rise, Newbold's Asset
Management will continue to practice conservative, value-based disciplines
that will allow shareholders to strongly participate in bull markets, while
adding significant value added performance in bear markets.
NEWBOLD'S ASSET MANAGEMENT, INC.
DEFINITIONS OF THE COMPARATIVE INDICES
--------------------------------------
The Dow Jones Industrial Average Index is a price weighted average of 30 blue-
chip stocks that are generally the leaders in their industry and are listed on
the New York Stock Exchange.
Note: The S&P 500 Index is defined under the performance comparison line
graph.
The investment results presented in the Adviser's letter represent past
performance and should not be construed as a guarantee of future results. If
the Adviser did not have temporary fee waivers and did not assume expenses on
behalf of the Portfolio, total return for the Portfolio would have been lower.
The investment return and principal value of an investment will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than their
original cost.
2
<PAGE>
Performance Comparison
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 PURCHASE IN THE
NEWBOLD'S EQUITY PORTFOLIO AND THE STANDARD & POOR'S 500 INDEX (S&P 500)
--------------------------------------
CUMULATIVE TOTAL RETURN**
FOR PERIOD ENDED APRIL 30, 1996
--------------------------------------
SINCE 9/13/95*++
--------------------------------------
11.31%
--------------------------------------
[PERORMANCE COMPARISON GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Newbold's Equity Portfolio S&P 500 Index+
<S> <C> <C>
9/13/95*++ 10,000 10,000
4/30/96 11,131 11,813
</TABLE>
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate. When shares are redeemed, they may
be worth more or less than the original cost.
* Commencement of Operations
** Total return of the Portfolio reflects fees waived and expenses assumed by
the Adviser. Without such waiver of fees and expenses assumed, total return
would be lower.
+ The comparative index is not adjusted to reflect expenses or other fees that
the SEC requires to be reflected in the Portfolio's performance. The fees, if
reflected, would reduce the performance quoted. The Portfolio's performance
assumes the reinvestment of all dividends and distributions. The comparative
index has been adjusted to reflect reinvestment of dividends on securities in
the index.
++ For comparative purposes, the value of the S&P 500 Index on 8/31/95 is used
as the beginning value on 9/13/95.
Definition of the Comparative Index
-----------------------------------
The S&P 500 Index is an unmanaged index composed of 400 industrial, 40
financial, 40 utilities and 20 transportation stocks.
Please note that one cannot invest in an unmanaged index.
3
<PAGE>
NEWBOLD'S EQUITY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
April 30, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (000)+
<S> <C> <C>
- -------------------------------------------------------------------------------
COMMON STOCKS (91.5%)
- -------------------------------------------------------------------------------
AEROSPACE & DEFENSE (3.3%)
Boeing Co. .................................................... 2,400 $ 197
United Technologies Corp. ..................................... 2,391 264
-------
461
- -------------------------------------------------------------------------------
AUTOMOTIVE (0.7%)
Genuine Parts Co. ............................................. 2,350 104
- -------------------------------------------------------------------------------
BANKS (2.9%)
Fleet Financial Group, Inc. ................................... 6,300 271
NationsBank Corp. ............................................. 1,700 135
-------
406
- -------------------------------------------------------------------------------
BEVERAGES, FOOD & TOBACCO (6.3%)
Anheuser-Busch Cos., Inc. ..................................... 1,850 124
Archer-Daniels-Midland Co. .................................... 7,290 138
RJR Nabisco Holdings Corp. .................................... 9,170 274
UST, Inc. ..................................................... 6,400 205
Unilever N.V.--New York Shares................................. 1,100 150
-------
891
- -------------------------------------------------------------------------------
CHEMICALS (3.5%)
W.R. Grace & Co. .............................................. 4,600 357
Great Lakes Chemical Corp. .................................... 1,000 68
Mallinckrodt Group, Inc. ...................................... 1,900 75
-------
500
- -------------------------------------------------------------------------------
CONSTRUCTION (2.4%)
Masco Corp. ................................................... 12,250 334
- -------------------------------------------------------------------------------
CONSUMER NON-DURABLES (0.6%)
Browning-Ferris Industries, Inc. .............................. 2,800 90
- -------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
NEWBOLD'S EQUITY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS--(CONTINUED)
April 30, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (000)+
<S> <C> <C>
- -------------------------------------------------------------------------------
COMMON STOCKS--(CONTINUED)
- -------------------------------------------------------------------------------
ENERGY (14.5%)
Amoco Corp. ................................................... 2,950 $ 215
Atlantic Richfield Co. ........................................ 2,700 318
Chevron Corp. ................................................. 5,000 290
Exxon Corp. ................................................... 2,985 254
Mobil Corp. ................................................... 1,900 219
Phillips Petroleum Co. ........................................ 4,300 178
Schlumberger Ltd. ............................................. 2,700 238
USX-Marathon Group............................................. 15,200 334
-------
2,046
- -------------------------------------------------------------------------------
FINANCIAL SERVICES (3.6%)
Chubb Corp. ................................................... 650 62
Providian Corp. ............................................... 3,650 168
St. Paul Cos., Inc. ........................................... 5,100 271
-------
501
- -------------------------------------------------------------------------------
HEALTH CARE (5.6%)
Baxter International, Inc. .................................... 3,600 159
Bristol-Myers Squibb Co. ...................................... 4,100 337
Rhone-Poulenc SA Sponsored ADR................................. 3,550 86
Warner Lambert Co. ............................................ 1,800 201
-------
783
- -------------------------------------------------------------------------------
INDUSTRIAL (1.1%)
Corning, Inc. ................................................. 4,350 151
- -------------------------------------------------------------------------------
INSURANCE (2.0%)
Aetna Life & Casualty Co. ..................................... 2,150 153
General Re Corp. .............................................. 900 129
-------
282
- -------------------------------------------------------------------------------
MANUFACTURING (1.6%)
Cooper Industries, Inc. ....................................... 5,200 221
- -------------------------------------------------------------------------------
METALS (1.3%)
Aluminum Company of America.................................... 3,000 187
- -------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
NEWBOLD'S EQUITY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS--(CONTINUED)
April 30, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (000)+
<S> <C> <C>
- -------------------------------------------------------------------------------
COMMON STOCKS--(CONTINUED)
- -------------------------------------------------------------------------------
OFFICE EQUIPMENT (2.0%)
Pitney Bowes, Inc. ............................................ 1,350 $ 66
Xerox Corp. ................................................... 1,500 220
-------
286
- -------------------------------------------------------------------------------
PAPER & PACKAGING (4.5%)
International Paper Co. ....................................... 5,200 207
James River Corp. of Virginia.................................. 8,000 214
Mead Corp. .................................................... 3,750 209
-------
630
- -------------------------------------------------------------------------------
RETAIL (3.2%)
American Stores Co. ........................................... 9,400 314
The Limited, Inc. ............................................. 6,527 135
-------
449
- -------------------------------------------------------------------------------
SERVICES (6.1%)
Dun & Bradstreet Corp. ........................................ 4,300 262
New York Times Co.--Class A.................................... 5,250 171
WMX Technologies, Inc. ........................................ 12,100 420
-------
853
- -------------------------------------------------------------------------------
TELECOMMUNICATIONS (11.4%)
AT&T Corp. .................................................... 8,450 518
GTE Corp. ..................................................... 7,500 325
NYNEX Corp. ................................................... 8,400 413
Sprint Corp. .................................................. 8,250 347
-------
1,603
- -------------------------------------------------------------------------------
TEXTILES & APPAREL (1.0%)
Reebok International Ltd. ..................................... 5,100 148
- -------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
NEWBOLD'S EQUITY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS--(CONTINUED)
April 30, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (000)+
<S> <C> <C>
- -------------------------------------------------------------------------------
COMMON STOCKS--(CONTINUED)
- -------------------------------------------------------------------------------
UTILITIES (13.9%)
Baltimore Gas & Electric Co. .................................. 3,800 $ 100
Edison International........................................... 7,700 123
Entergy Corp. ................................................. 10,050 266
FPL Group, Inc. ............................................... 5,900 255
General Public Utilities Corp. ................................ 6,250 199
Houston Industries, Inc. ...................................... 6,100 130
Pacificorp..................................................... 6,400 128
PanEnergy Corp. ............................................... 7,450 243
PECO Energy Co. ............................................... 7,500 187
Southern Co. .................................................. 5,700 125
Transcanada Pipelines Ltd. .................................... 14,500 205
-------
1,961
- -------------------------------------------------------------------------------
TOTAL COMMON STOCKS (COST $11,914).............................. 12,887
- -------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCK (0.2%)
- -------------------------------------------------------------------------------
CONSUMER NON-DURABLES (0.2%)
RJR Nabisco Holdings, Series C, $0.6012 (COST $35)............. 5,650 34
- -------------------------------------------------------------------------------
<CAPTION>
FACE
AMOUNT
(000)
- -------------------------------------------------------------------------------
<S> <C> <C>
SHORT-TERM INVESTMENT (7.9%)
- -------------------------------------------------------------------------------
REPURCHASE AGREEMENT (7.9%)
J.P. Morgan Securities, Inc., 5.05%, dated 4/30/96, due
5/01/96, to be repurchased at $1,112, collateralized by $1,002
U.S. Treasury Bonds 8.125%, due 8/15/19, valued at $1,134
(COST $1,112)................................................. $1,112 1,112
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS (99.6%) (COST $13,061)........................ 14,033
- -------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
NEWBOLD'S EQUITY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS--(CONTINUED)
April 30, 1996
<TABLE>
<CAPTION>
VALUE
(000)+
<S> <C>
- -------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (0.4%)
- -------------------------------------------------------------------------------
Receivable for Investments Sold............................... $ 59
Dividends Receivable.......................................... 28
Receivable due from Investment Adviser........................ 15
Payable for Administrative Fees............................... (5)
Payable for Trustees' Fees.................................... (1)
Other Liabilities............................................. (39)
-------
57
- -------------------------------------------------------------------------------
NET ASSETS (100%)
Applicable to 1,282,867 outstanding Institutional Class shares
(unlimited authorization, no par value)...................... $14,090
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE....... $ 10.98
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
+ See Note A to Financial Statements.
ADR--American Depositary Receipt.
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
NEWBOLD'S EQUITY PORTFOLIO
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
SEPTEMBER 13,
1995* TO
APRIL 30,
(In Thousands) 1996
- -------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Dividends..................................................... $ 209
Interest...................................................... 19
- -------------------------------------------------------------------------------
Total Income................................................. 228
- -------------------------------------------------------------------------------
EXPENSES
Investment Advisory Fees--Note B
Basic Fees................................................... $ 36
Less: Fees Waived............................................ (36) --
-----
Administrative Fees--Note C................................... 24
Custodian Fees................................................ 14
Audit Fees.................................................... 12
Legal Fees.................................................... 9
Registration and Filing Fees.................................. 22
Printing Fees................................................. 11
Trustees' Fees--Note F........................................ 2
Other Expenses................................................ 1
Expenses Assumed by Adviser--Note B........................... (30)
- -------------------------------------------------------------------------------
Net Expenses................................................. 65
- -------------------------------------------------------------------------------
NET INVESTMENT INCOME.......................................... 163
- -------------------------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS............................... 129
NET CHANGE IN UNREALIZED APPRECIATION ON INVESTMENTS........... 972
- -------------------------------------------------------------------------------
NET GAIN ON INVESTMENTS........................................ 1,101
- -------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........... $ 1,264
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
* Commencement of Operations
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
NEWBOLD'S EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 13,
1995* TO
APRIL 30,
(In Thousands) 1996
- --------------------------------------------------------------------------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income........................................... $ 163
Net Realized Gain............................................... 129
Net Change in Unrealized Appreciation........................... 972
- --------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations .......... 1,264
- --------------------------------------------------------------------------------
DISTRIBUTIONS:
Net Investment Income........................................... (133)
Net Realized Gain............................................... (24)
- --------------------------------------------------------------------------------
Total Distributions............................................ (157)
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS: (1)
Issued--Regular................................................. 18,446
--In Lieu of Cash Distributions............................... 134
Redeemed........................................................ (5,597)
- --------------------------------------------------------------------------------
Net Increase from Capital Share Transactions................... 12,983
- --------------------------------------------------------------------------------
Total Increase.................................................. 14,090
Net Assets:
Beginning of Period............................................. --
- --------------------------------------------------------------------------------
End of Period (2)............................................... $14,090
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1)Shares Issued and Redeemed:
Shares Issued................................................... 1,820
In Lieu of Cash Distributions................................... 13
Shares Redeemed................................................. (550)
- --------------------------------------------------------------------------------
1,283
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(2)Net Assets Consist of:
Paid in Capital................................................. $12,264
Undistributed Net Investment Income............................. 30
Accumulated Net Realized Gain................................... 824
Unrealized Appreciation......................................... 972
- --------------------------------------------------------------------------------
$14,090
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
* Commencement of Operations
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
NEWBOLD'S EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
SEPTEMBER 13,
1995* TO
APRIL 30,
1996
- --------------------------------------------------------------------------------
<S> <C>
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
- --------------------------------------------------------------------------------
Total From Investment Operations................................ 1.12
- --------------------------------------------------------------------------------
DISTRIBUTIONS
Net Investment Income............................................ (0.12)
Net Realized Gain................................................ (0.02)
- --------------------------------------------------------------------------------
Total Distributions............................................. (0.14)
- --------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD.................................... $ 10.98
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL RETURN...................................................... 11.31%++
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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>
* 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
expenses assumed by the Adviser.
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
NEWBOLD'S EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
UAM Funds Trust, formerly known as The Regis Fund II and UAM Funds, Inc.,
formerly known as The Regis Fund, Inc. (collectively the "UAM Funds") were
organized on May 18, 1994 and October 11, 1988, respectively, and are
registered under the Investment Company Act of 1940, as amended, as open-end
management investment companies. Newbold's Equity Portfolio (the "Portfolio"),
a portfolio of UAM Funds Trust, began operations on September 13, 1995 with an
in-kind transaction of securities with a value of approximately $7,545,000. At
April 30, 1996, the UAM Funds were comprised of thirty-seven active
portfolios. The financial statements of the remaining portfolios are presented
separately.
A. SIGNIFICANT ACCOUNTING POLICIES. The following significant accounting
policies are in conformity with generally accepted accounting principles for
investment companies. Such policies are consistently followed by the Portfolio
in the preparation of its financial statements. Generally accepted accounting
principles may require management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements.
Actual results may differ from those estimates.
1. SECURITY VALUATION: Securities listed on a securities exchange for which
market quotations are readily available are valued at the last quoted sales
price as of the close of the exchange on the day the valuation is made or,
if no sale occurred on such day, at the bid price on such day. Price
information on listed securities is taken from the exchange where the
security is primarily traded. Over-the-counter and unlisted securities are
valued at the current bid price. Short-term investments that have remaining
maturities of sixty days or less at time of purchase are valued at
amortized cost, if it approximates market value. The value of other assets
and securities for which no quotations are readily available is determined
in good faith at fair value using methods determined by the Board of
Trustees.
2. FEDERAL INCOME TAXES: It is the Portfolio's intention to qualify as a
regulated investment company under Subchapter M of the Internal Revenue
Code and to distribute all of its taxable income. Accordingly, no provision
for Federal income taxes is required in the financial statements.
At April 30, 1996, the Portfolio's cost of investments for Federal income
tax purposes was approximately $12,599,000. Net unrealized appreciation for
Federal income tax purposes aggregated approximately $1,434,000 of which
approximately $1,533,000 related to appreciated securities and
approximately $99,000 related to depreciated securities.
3. REPURCHASE AGREEMENTS: In connection with transactions in repurchase
agreements, the Portfolio's custodian bank takes possession of the
underlying securities, the value of which exceeds the principal amount of
the repurchase transaction, including accrued interest. To the extent that
any repurchase transaction exceeds one business day, the value of the
collateral is marked-to-market on a daily basis to determine the adequacy
of the collateral. In the event of default on the obligation to repurchase,
the Portfolio has the right to liquidate the collateral and apply the
proceeds in satisfaction of the obligation. In the event of default or
bankruptcy by the other party to the agreement, realization and/or
retention of the collateral or proceeds may be subject to legal
proceedings.
4. DISTRIBUTIONS TO SHAREHOLDERS: The Portfolio will normally distribute
substantially all of its net investment income quarterly. Any realized net
capital gains will normally be distributed annually. All distributions are
recorded on ex-dividend date.
12
<PAGE>
NEWBOLD'S EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
The amount and character of income and capital gain distributions to be
paid are determined in accordance with Federal income tax regulations which
may differ from generally accepted accounting principles. These differences
are primarily due to differing book and tax treatments of the determination
of the cost of investments acquired in the in-kind transaction in the
amount of approximately $720,000 and in the timing of the recognition of
gains or losses on investments.
Permanent book and tax basis differences relating to shareholder
distributions may result in reclassifications to undistributed net
investment income (loss), accumulated net realized gain (loss) and paid in
capital.
5. OTHER: Security transactions are accounted for on trade date, the date
the trade was executed. Costs used in determining realized gains and losses
on the sale of investment securities are based on the specific
identification method. Dividend income is recorded on the ex-dividend date.
Interest income is recognized on the accrual basis. Most expenses of the
UAM Funds can be directly attributed to a particular portfolio. Expenses
which cannot be directly attributed are apportioned among the portfolios of
the UAM Funds based on their relative net assets. Additionally, certain
expenses are apportioned among the portfolios of the UAM Funds and AEW
Commercial Mortgage Securities Fund, Inc. ("AEW"), an affiliated closed-end
management investment company, based on their relative net assets.
Current year permanent book-tax differences, if any, are not included in
ending undistributed net investment income (loss) for purposes of
calculating net investment income (loss) per share in the financial
highlights.
B. ADVISORY SERVICES: Under the terms of an investment advisory agreement,
Newbold's Asset Management, Inc. (the "Adviser"), a wholly-owned subsidiary of
United Asset Management Corporation ("UAM"), provides investment advisory
services to the Portfolio at a fee calculated at an annual rate of 0.50% of
average daily net assets. Through January 29, 1998 the Adviser has voluntarily
agreed to waive a portion of its advisory fees and to assume expenses, if
necessary, in order to keep the Portfolio's total annual operating expenses
from exceeding 0.90% of average daily net assets.
C. ADMINISTRATIVE SERVICES: Effective April 15, 1996, UAM Fund Services, Inc.
(the "Administrator"), a wholly-owned subsidiary of UAM, provides and oversees
administrative, fund accounting, dividend disbursing and transfer agent
services to the UAM Funds and AEW under an Administration Agreement (the
"Agreement"). Pursuant to the Agreement, the Administrator is entitled to
receive annual fees, computed daily and payable monthly, of 0.19% of the first
$200 million of the combined aggregate net assets; plus 0.11% of the next $800
million of the combined aggregate net assets; plus 0.07% of the next $2
billion of the combined aggregate net assets; plus 0.05% of the combined
aggregate net assets in excess of $3 billion. The fees are allocated among the
portfolios of the UAM Funds and AEW on the basis of their relative net assets
and are subject to a graduated minimum fee schedule per portfolio which rises
from $2,000 per month, upon inception of a portfolio, to $70,000 annually
after two years. For portfolios with more than one class of shares, the
minimum annual fee increases to $90,000. In addition, the Administrator
receives a Portfolio-specific monthly fee of 0.06% of average daily net assets
of the Portfolio. Also effective April 15, 1996, the Administrator has entered
into a Mutual Funds Service Agreement with Chase Global Funds Services Company
("CGFSC"), a wholly-owned subsidiary of The Chase Manhattan Bank, N.A., under
which CGFSC agrees to provide certain services, including but not limited to,
administration, fund accounting, dividend disbursing and transfer agent
services. Pursuant to the Mutual Funds Service Agreement, the Administrator
pays CGFSC a monthly fee.
13
<PAGE>
NEWBOLD'S EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
Prior to April 15, 1996, CGFSC, served as the administrator to the UAM Funds
and AEW. For its services as administrator CGFSC received annual fees,
computed daily and payable monthly, based on the combined aggregate average
daily net assets of the UAM Funds and AEW, as follows: 0.20% of the first $200
million of the combined aggregate net assets; plus 0.12% of the next $800
million of the combined aggregate net assets; plus 0.08% of the combined
aggregate net assets in excess of $1 billion but less than $3 billion; plus
0.06% of the combined aggregate net assets in excess of $3 billion. The fees
were allocated among the portfolios of the UAM Funds and AEW on the basis of
their relative net assets and were subject to a graduated minimum fee schedule
per portfolio which rose from $2,000 per month, upon inception of a portfolio,
to $70,000 annually after two years.
For the period April 15, 1996 to April 30, 1996, UAM Fund Services, Inc.
earned $2,109 from the Portfolio as Administrator.
D. DISTRIBUTION SERVICES: UAM Fund Distributors, Inc. (the "Distributor"),
formerly known as RFI Distributors (a division of Regis Retirement Plan
Services, Inc.), a wholly-owned subsidiary of UAM, distributes the shares of
the Portfolio. The Distributor does not receive any fee or other compensation
with respect to the Portfolio.
E. PURCHASES AND SALES: For the period ended April 30, 1996, the Portfolio
made purchases of approximately $11,742,000 and sales of approximately
$7,467,000 of investment securities other than long-term U.S. Government and
short-term securities. There were no purchases and sales of long-term U.S.
Government securities. Purchases from an in-kind transaction totaled
approximately $7,545,000.
F. TRUSTEES' FEES: Each Trustee, who is not an officer or affiliated person,
receives $2,000 per meeting attended, which is allocated proportionally among
the active portfolios of UAM Funds and AEW, plus a quarterly retainer of $150
for each active portfolio of UAM Funds and AEW, and reimbursement of expenses
incurred in attending Trustee meetings.
G. OTHER: At April 30, 1996, 27.7% of total shares outstanding were held by
two record shareholders owning 10% or greater of the aggregate total shares
outstanding.
14
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of
UAM Funds Trust and Shareholders of
Newbold's Equity Portfolio
In our opinion, the accompanying statement of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
the Newbold's Equity Portfolio (the "Portfolio"), a Portfolio of UAM Funds
Trust, at April 30, 1996, and the results of its operations, the changes in
its net assets and the financial highlights for the period September 13, 1995
(commencement of operations) through April 30, 1996, in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Portfolio's management; our responsibility is to express
an opinion on these financial statements based on our audit. We conducted our
audit of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audit, which included confirmation of securities at April 30, 1996 by
correspondence with the custodian, provides a reasonable basis for the opinion
expressed above.
Price Waterhouse LLP
Boston, Massachusetts
June 14, 1996
- -------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION: (UNAUDITED)
At April 30, 1996, the Portfolio hereby designates approximately $13,000 as a
long-term capital gain dividend for the purpose of the dividend paid deduction
on its Federal income tax return.
For the period ended April 30, 1996, the percentage of dividends paid that
qualify for the 70% dividend received deduction for corporate shareholders is
45.8%.
15
<PAGE>
- -------------------------------------------------------------------------------
UAM FUNDS
BHM&S TOTAL RETURN BOND
PORTFOLIO
- -------------------------------------------------------------------------------
OFFICERS AND TRUSTEES
Norton H. Reamer William A. Humenuk
Trustee, President Trustee
and Chairman
Peter M. Whitman, Jr.
Mary Rudie Barneby Trustee
Trustee and Executive
Vice President William H. Park
Vice President and
John T. Bennett, Jr. Assistant Treasurer
Trustee
Karl O. Hartmann
J. Edward Day Secretary
Trustee
Robert R. Flaherty
Philip D. English Treasurer
Trustee
Harvey M. Rosen
Assistant Secretary
- -------------------------------------------------------------------------------
INVESTMENT ADVISER
Barrow, Hanley, Mewhinney & Strauss, Inc.
3232 McKinney Avenue, 15th Floor
Dallas, TX 75204
- -------------------------------------------------------------------------------
ADMINISTRATOR
UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110
- -------------------------------------------------------------------------------
CUSTODIAN
The Bank of New York
60 Wall Street, New York, NY 10260
- -------------------------------------------------------------------------------
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young LLP
2600 One Commerce Square
Philadelphia, PA 19103
- -------------------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
160 Federal Street
Boston, MA 02110
- -------------------------------------------------------------------------------
DISTRIBUTOR
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
- -------------------------------------------------------------------------------
This report has been prepared for shareholders and may be distributed to
others only if preceded or accompanied by a current prospectus.
- -------------------------------------------------------------------------------
UAM FUNDS
BHM&S TOTAL
RETURN BOND
PORTFOLIO
- -------------------------------------------------------------------------------
ANNUAL REPORT
APRIL 30, 1996
<PAGE>
May 8, 1996
Dear Shareholders:
The investment environment of the most recent fiscal quarter ended April 30,
1996 was a market reversal of the enthusiastic sentiment of the beginning of
1996. Investors started the calendar year focused on a weak economy, a slowing
of corporate profitability, and anticipation of further Federal Reserve
easing. The broadly accepted "soft landing" scenario adopted by investors in
late 1995, even began to give way to concern of a recession as retail sales
waned and consumer debt levels increased.
Recession concerns were however abruptly abandoned for the near term with
the March 8 report of February's employment gain of 705,000 new jobs. The
suggestion of such a strengthening job market coupled with greater than
expected momentum in housing and auto sales shocked the financial market.
Fears of inflation that had continued to abate throughout 1995 have also
revived with the surge in oil and commodity index prices over the past few
months. Hedge fund unwinding of dollar/yen positions, disappointment over the
federal budget negotiations, and concern about the Federal Reserve actually
raising interest rates drove bond prices lower during the quarter. Since the
30-year Treasury dropped to 5.95% on December 31, 1995, the factors noted
above have taken a toll on the bond market. As detailed in the chart below,
interest rates have moved steadily higher during the quarter ended April 30,
1996, and prices have fallen.
TREASURY INTEREST RATES(%)
<TABLE>
<CAPTION>
TREASURY 1/31/96 4/30/96 CHANGE
-------- ------- ------- ------
<S> <C> <C> <C>
3 Month 5.04 5.15 0.11
6 Month 4.96 5.30 0.34
1 Year 4.89 5.61 0.72
2 Year 4.92 6.04 1.12
3 Year 5.02 6.18 1.16
5 Year 5.23 6.41 1.18
10 Year 5.57 6.67 1.10
30 Year 6.02 6.90 0.88
</TABLE>
Source: Bloomberg
While the recent environment has been challenging to fixed income investors
in general, we believe current conditions are quite conducive to our approach
to the bond market. Ours is best described as that of a "bottom-up, rate
neutral, value manager" approach. We build portfolios by emphasizing
individual security selection that is designed to result in sector
concentrations producing a yield advantage versus the market benchmark.
However, since the BHM&S Total Return Bond Portfolio is a relatively new
portfolio, the concentration in non-Treasury "spread sectors" is not as high
as in a seasoned portfolio. At April 30, 1996, the 30 day SEC yield for the
Institutional Class Shares was 6.22% and the 30 day SEC yield for the
Institutional Service Class Shares was 6.01%. Other current Portfolio
characteristics are as follows:
<TABLE>
<CAPTION>
4/30/96
4/30/96 SALOMON BROTHERS BROAD
BHM&S INVESTMENT-GRADE
PORTFOLIO BOND INDEX
--------- ----------------------
<S> <C> <C>
Yield to Maturity 6.9% 6.9%
Current Yield 7.1% 7.2%
Quality AAA AAA
Average Maturity 8.1 Yrs. 8.7 Yrs.
Modified Duration 4.94 Yrs. 5.08 Yrs.
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
4/30/96
4/30/96 SALOMON BROTHERS BROAD
BHM&S INVESTMENT-GRADE
PORTFOLIO* BOND INDEX
---------- ----------------------
<S> <C> <C>
SECTORS
U.S. Treasury & Agency 39.5% 51.9%
Mortgage-Backed 29.5% 29.5%
Asset-Backed 4.7% 1.0%
Industrial 10.8% 6.0%
Utility 2.2% 3.1%
Finance 6.2% 4.8%
Yankee N/A 3.7%
Short-term Investment 6.3% N/A
</TABLE>
* Sector percentages are based on net assets.
The Portfolio has two separate classes of shares, Institutional Class Shares
("Institutional Shares") and Institutional Service Class Shares ("Service
Shares"). (For a discussion of the differences of each class, please see the
Prospectus.) For the fiscal quarter ended April 30, 1996, performance for both
classes of shares is slightly ahead of the Portfolio's representative market
benchmark, the Salomon Brothers Broad Investment-Grade Bond Index. For the
fiscal quarter, the total return, encompassing both price change and income,
for the Institutional Shares was -2.94% and the total return of the Service
Shares was -2.94%, compared to the Salomon Brothers Broad Investment-Grade
Bond Index return of -3.13%. Since inception on November 1, 1995, total return
for the Institutional Shares was 0.08% and total return for the Service Shares
was -0.07% compared to 0.17% for the Salomon Brothers Broad Investment-Grade
Bond Index for the same period.
As noted above, in a market environment in which interest rates rise as
dramatically as during the recent quarter, the interest income component from
bonds is generally not sufficient to fully compensate for the sharp price
decline.
The pendulum of investor psychology has moved from a consensus view of
economic weakness to strength during the most recent quarter. Economic reality
perhaps lies in between with an overall moderate rate of growth and a modest
uptick in inflation.
Investors must maintain the principle of a long term investment horizon.
While the road to successful investing may have uncomfortable bumps along the
way, discipline and adherence to fundamentals are far more rewarding over the
long journey than market timing on the basis of emotions.
Sincerely,
John S. Williams, C.F.A.
Principal
The investment results presented in the Adviser's letter represent past
performance and should not be construed as a guarantee of future results. If
the Adviser didn't have temporary fee waivers and didn't assume expenses on
behalf of the Portfolio, total return for the Portfolio would have been lower.
The investment return and principal value of an investment will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than their
original cost.
2
<PAGE>
Performance Comparison
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 PURCHASE IN THE
BHM&S TOTAL RETURN BOND PORTFOLIO AND THE
SALOMON BROTHERS BROAD INVESTMENT-GRADE BOND INDEX
-----------------------------------------
CUMULATIVE TOTAL RETURN**
FOR PERIOD ENDED APRIL 30, 1996
-----------------------------------------
SINCE 11/1/95*
-----------------------------------------
INSTITUTIONAL INSTITUTIONAL
CLASS SHARES SERVICE CLASS SHARES
-----------------------------------------
0.08% -0.07%
-----------------------------------------
[PERFORMANCE COMPARISON GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
BHM&S TOTAL RETURN BOND BHM&S TOTAL RETURN BOND SALOMON BROTHERS BROAD
PORTFOLIO--INSTITUTIONAL CLASS PORTFOLIO--INSTITUTIONAL SERVICE CLASS INVESTMENT--GRADE BOND INDEX+
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
11/1/95* 10,000 10,000 10,000
- -------------------------------------------------------------------------------------------------------------------------------
4/30/96 10,008 9,993 10,017
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate. When shares are redeemed, they may
be worth more or less than the original cost.
* Commencement of Operations
** Total return of the Portfolio reflects fees waived and expenses assumed by
the Adviser. Without such waiver of fees and expenses assumed, total return
would be lower.
+ The comparative index is not adjusted to reflect expenses or other fees that
the SEC requires to be reflected in the Portfolio's performance. The fees, if
reflected, would reduce the performance quoted. The Portfolio's performance
assumes the reinvestment of all dividends and distributions. The comparative
index has been adjusted to reflect reinvestment of dividends on securities in
the index.
Definition of the Comparative Index
The Salomon Brothers Broad Investment-Grade (BIG) Bond Index is a market-
capitalization weighted index which includes fixed-rate Treasury, government
sponsored, corporate (Baa3/BBB- or better) and mortgage securities. All issues
mature in one year or more and have at least $50 million face amount
outstanding for entry to the BIG Index. Issues exit the Index when their face
amount outstanding drops below $25 million, or they fail the maturity or credit
tests. The exit and entry criteria for mortgage issues is $200 million for each
coupon.
Please note that one cannot invest in an unmanaged index.
3
<PAGE>
BHM&S TOTAL RETURN BOND PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
April 30, 1996
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
(000) (000)+
- -------------------------------------------------------------------------------
<S> <C> <C>
CORPORATE BONDS & NOTES (19.2%)
- -------------------------------------------------------------------------------
BANKS (0.6%)
Chase Manhattan Corp.
9.75%, 6/15/99................................................. $ 30 $ 32
- -------------------------------------------------------------------------------
FINANCIAL (5.6%)
Ford Motor Credit Corp.
6.375%, 9/15/99................................................ 200 197
General Motors Acceptance Corp.
6.25%, 1/6/00.................................................. 100 99
------
296
- -------------------------------------------------------------------------------
INDUSTRIAL (8.6%)
Atlantic Richfield Co.
8.50%, 4/1/12.................................................. 125 138
BP America, Inc.
9.875%, 3/15/04................................................ 50 58
Dresser Industries, Inc.
6.25%, 6/1/00.................................................. 100 98
Sears Roebuck & Co.
9.375%, 11/1/11................................................ 100 117
Texaco Capital Corp.
6.19%, 7/9/03.................................................. 50 47
------
458
- -------------------------------------------------------------------------------
TRANSPORTATION (2.2%)
Federal Express Corp.
9.65%, 6/15/12................................................. 100 116
- -------------------------------------------------------------------------------
UTILITIES (2.2%)
Southern California Edison Co.
8.25%, 2/1/00.................................................. 115 120
- -------------------------------------------------------------------------------
TOTAL CORPORATE BONDS & NOTES (COST $1,046)...................... 1,022
- -------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
BHM&S TOTAL RETURN BOND PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS--(CONTINUED)
April 30, 1996
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
(000) (000)+
- -------------------------------------------------------------------------------
<S> <C> <C>
U.S. GOVERNMENT SECURITIES (39.5%)
- -------------------------------------------------------------------------------
U.S. TREASURY BOND (12.9%)
8.75%, 5/15/17.................................................. $580 $ 685
- -------------------------------------------------------------------------------
U.S. TREASURY NOTES (26.6%)
6.25%, 2/15/03.................................................. 525 516
7.125%, 9/30/99................................................. 775 794
7.875%, 1/15/98................................................. 100 103
------
1,413
- -------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT SECURITIES (COST $2,184)................... 2,098
- -------------------------------------------------------------------------------
AGENCY SECURITIES (29.5%)
- -------------------------------------------------------------------------------
FEDERAL HOME LOAN MORTGAGE CORP. (20.0%)
Gold Pool #C00436
7.50%, 12/1/25................................................. 287 284
Gold Pool #C80372
7.00%, 1/1/26.................................................. 804 777
------
1,061
- -------------------------------------------------------------------------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION (4.8%)
Pool #124834
8.00%, 4/1/23.................................................. 252 255
- -------------------------------------------------------------------------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (4.7%)
Pool #316108
8.00%, 3/15/22................................................. 248 252
- -------------------------------------------------------------------------------
TOTAL AGENCY SECURITIES (COST $1,593)............................ 1,568
- -------------------------------------------------------------------------------
ASSET-BACKED SECURITIES (4.7%)
- -------------------------------------------------------------------------------
First Chicago Master Trust II, Series 1992-E Class A
6.25%, 8/15/99................................................. 100 100
Premier Auto Trust, Series 1996-1 Class A3
6.00%, 10/6/99................................................. 150 149
- -------------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES (COST $250)........................ 249
- -------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
BHM&S TOTAL RETURN BOND PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS--(CONTINUED)
April 30, 1996
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
(000) (000)+
- -------------------------------------------------------------------------------
<S> <C> <C>
SHORT-TERM INVESTMENT (6.3%)
- -------------------------------------------------------------------------------
REPURCHASE AGREEMENT (6.3%)
J.P. Morgan Securities, Inc. 5.05%, dated 4/30/96, due 5/1/96,
to be repurchased at $338, collateralized by $305 U.S.
Treasury Bonds 8.125%, due 8/15/19, valued at $345
(COST $338)................................................... $338 $ 338
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS (99.2%) (COST $5,411)......................... 5,275
- -------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (0.8%)
- -------------------------------------------------------------------------------
Cash.......................................................... 1
Interest Receivable........................................... 67
Receivable due from Investment Adviser........................ 13
Payable for Administrative Fees............................... (5)
Payable for Trustees' Fees.................................... (1)
Payable for Service Fees--Institutional Service Class Shares.. (1)
Other Liabilities............................................. (33)
------
41
- -------------------------------------------------------------------------------
NET ASSETS (100%)............................................... $5,316
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
INSTITUTIONAL CLASS SHARES:
Net Assets..................................................... $2,445
Applicable to 248,063 outstanding Institutional Class shares
(unlimited authorization, no par value)
- -------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE....... $ 9.85
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
INSTITUTIONAL SERVICE CLASS SHARES:
Net Assets..................................................... $2,871
Applicable to 291,863 outstanding Institutional Service Class
shares
(unlimited authorization, no par value)
- -------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE....... $ 9.84
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
+ See Note A to Financial Statements.
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
BHM&S TOTAL RETURN BOND PORTFOLIO
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
NOVEMBER 1,
1995** TO
(In Thousands) APRIL 30, 1996
- --------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Interest................................................... $ 110
- --------------------------------------------------------------------------------
EXPENSES
Investment Advisory Fees--Note B
Basic Fees................................................ $ 6
Less: Fees Waived......................................... (6) --
---
Filing and Registration Fees............................... 25
Administrative Fees--Note C................................ 24
Audit Fees................................................. 15
Printing Fees.............................................. 14
Custodian Fees............................................. 3
Trustees' Fees--Note F..................................... 1
Service Fees--Note D:
Institutional Service Class............................... 1
Other Expenses............................................. 3
Expenses Assumed by Adviser--Note B........................ (74)
- --------------------------------------------------------------------------------
Total Expenses............................................ 12
Expense Offset--Note A..................................... (1)
- --------------------------------------------------------------------------------
Net Expenses.............................................. 11
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME....................................... 99
- --------------------------------------------------------------------------------
NET REALIZED LOSS ON INVESTMENTS............................ (2)
NET CHANGE IN UNREALIZED DEPRECIATION ON INVESTMENTS........ (136)
- --------------------------------------------------------------------------------
NET LOSS ON INVESTMENTS..................................... (138)
- --------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS........ $ (39)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
** Commencement of Operations
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
BHM&S TOTAL RETURN BOND PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
NOVEMBER 1,
1995** TO
(In Thousands) APRIL 30, 1996
- --------------------------------------------------------------------------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income........................................... $ 99
Net Realized Loss............................................... (2)
Net Change in Unrealized Depreciation........................... (136)
- --------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting From Operations........... (39)
- --------------------------------------------------------------------------------
DISTRIBUTIONS:
Net Investment Income:
Institutional Class............................................ (39)
Institutional Service Class.................................... (25)
- --------------------------------------------------------------------------------
Total Distributions............................................ (64)
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (NOTE G):
Institutional Class:
Issued--Regular.............................................. 2,785
--In Lieu of Cash Distributions................................. 39
Redeemed..................................................... (340)
------
Net Increase from Institutional Class Shares.................. 2,484
------
Institutional Service Class:
Issued--Regular.............................................. 2,930
--In Lieu of Cash Distributions................................. 25
Redeemed..................................................... (20)
------
Net Increase from Institutional Service Class Shares.......... 2,935
- --------------------------------------------------------------------------------
Net Increase from Capital Share Transactions.................. 5,419
- --------------------------------------------------------------------------------
Total Increase................................................. 5,316
Net Assets:
Beginning of Period............................................ --
- --------------------------------------------------------------------------------
End of Period (1).............................................. $5,316
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1)Net Assets Consist of:
Paid in Capital................................................ $5,419
Undistributed Net Investment Income............................ 35
Accumulated Net Realized Loss.................................. (2)
Unrealized Depreciation........................................ (136)
- --------------------------------------------------------------------------------
$5,316
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
** Commencement of Operations
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
BHM&S TOTAL RETURN BOND PORTFOLIO
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD ENDED APRIL 30, 1996+++
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS** INSTITUTIONAL SERVICE CLASS**
- -------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD................. $10.00 $10.00
- -------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income+.... 0.28 0.27
Net Realized and
Unrealized Loss on
Investments.............. (0.27) (0.27)
- -------------------------------------------------------------------------------
Total from Investment
Operations.............. 0.01 --
- -------------------------------------------------------------------------------
DISTRIBUTIONS
Net Investment Income..... (0.16) (0.16)
- -------------------------------------------------------------------------------
NET ASSET VALUE, END OF
PERIOD.................... $ 9.85 $ 9.84
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
TOTAL RETURN............... 0.08%++ (0.07)%++
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL
DATA
Net Assets, End of Period
(Thousands)............... $2,445 $2,871
Ratio of Expenses to
Average Net Assets+....... 0.61%*# 0.83%*#
Ratio of Net Investment
Income to Average Net
Assets+................... 5.53%* 5.44%*
Portfolio Turnover Rate.... 55% 55%
- -------------------------------------------------------------------------------
</TABLE>
* Annualized
** Commencement of Operations November 1, 1995.
+ Net of voluntarily waived fees and expenses assumed by the Adviser of $0.23
and $0.20 per share for Institutional Class and Institutional Service Class
Shares, respectively, for the period ended April 30, 1996.
++ Total return would have been lower had certain fees not been waived and
expenses 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 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%* and 0.80%* for the Institutional Class and
Institutional Service Class Shares, respectively, for the period ended
April 30, 1996.
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
BHM&S TOTAL RETURN BOND PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
UAM Funds Trust and UAM Funds, Inc., (collectively the "UAM Funds") were
organized on May 18, 1994 and October 11, 1988, respectively, and are
registered under the Investment Company Act of 1940, as amended, as open-end
management investment companies. BHM&S Total Return Bond Portfolio (the
"Portfolio"), a portfolio of UAM Funds Trust, began operations on November 1,
1995. The Portfolio is authorized to offer two separate classes of shares--
Institutional Class Shares and Institutional Service Class Shares ("Service
Class Shares"). At April 30, 1996, the UAM Funds were comprised of thirty-
seven active portfolios. The financial statements of the remaining portfolios
are presented separately.
A. SIGNIFICANT ACCOUNTING POLICIES. The following significant accounting
policies are in conformity with generally accepted accounting principles for
investment companies. Such policies are consistently followed by the Portfolio
in the preparation of its financial statements. Generally accepted accounting
principles may require management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements.
Actual results may differ from those estimates.
1. SECURITY VALUATION: Fixed income securities are stated on the basis of
valuations provided by brokers and/or a pricing service which uses
information with respect to transactions in fixed income securities,
quotations from dealers, market transactions in comparable securities and
various relationships between securities in determining value. Short-term
investments that have remaining maturities of sixty days or less at time of
purchase are valued at amortized cost, if it approximates market value. The
value of other assets and securities for which no quotations are readily
available is determined in good faith at fair value using methods
determined by the Board of Trustees.
2. FEDERAL INCOME TAXES: It is the Portfolio's intention to qualify as a
regulated investment company under Subchapter M of the Internal Revenue
Code and to distribute all of its taxable income. Accordingly, no provision
for Federal income taxes is required in the financial statements.
At April 30, 1996, the Portfolio's cost of investments for Federal income
tax purposes was approximately $5,411,000. Net unrealized depreciation for
Federal income tax purposes aggregated approximately $136,000, all of which
related to depreciated securities. For the period ended April 30, 1996 the
Portfolio expects to defer to May 1, 1996 for Federal income tax purposes,
post-October capital losses of approximately $2,000.
3. REPURCHASE AGREEMENTS: In connection with transactions in repurchase
agreements, the Portfolio's custodian bank takes possession of the
underlying securities, the value of which exceeds the principal amount of
the repurchase transaction, including accrued interest. To the extent that
any repurchase transaction exceeds one business day, the value of the
collateral is marked-to-market on a daily basis to determine the adequacy
of the collateral. In the event of default on the obligation to repurchase,
the Portfolio has the right to liquidate the collateral and apply the
proceeds in satisfaction of the obligation. In the event of default or
bankruptcy by the other party to the agreement, realization and/or
retention of the collateral or proceeds may be subject to legal
proceedings.
4. DISTRIBUTIONS TO SHAREHOLDERS: The Portfolio will normally distribute
substantially all of its net investment income quarterly. Any realized net
capital gains will be distributed annually. All distributions are recorded
on ex-dividend date.
The amount and character of income and capital gain distributions to be
paid are determined in accordance with Federal income tax regulations which
may differ from generally accepted accounting principles. These differences
are primarily due to differing book and tax treatments of paydown gains
(losses) and post-October capital losses.
10
<PAGE>
BHM&S TOTAL RETURN BOND PORTFOLIO
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
Permanent book and tax basis differences relating to shareholder
distributions may result in reclassifications to undistributed net
investment income (loss), accumulated net realized gain (loss) and paid in
capital.
5. OTHER: Security transactions are accounted for on trade date, the date
the trade was executed. Costs used in determining realized gains and losses
on the sale of investment securities are based on the specific
identification method. Interest income is recognized on the accrual basis.
Discounts and premiums on securities purchased are amortized over their
respective lives. Most expenses of the UAM Funds can be directly attributed
to a particular portfolio. Expenses which cannot be directly attributed are
apportioned among the portfolios of the UAM Funds based on their relative
net assets. Additionally, certain expenses are apportioned among the
Portfolios of the UAM Funds and AEW Commercial Mortgage Securities Fund,
Inc. ("AEW"), an affiliated closed-end management investment company, based
on their relative net assets. Income, expenses (other than class specific
expenses) and realized and unrealized gains and losses are allocated to
each class of shares based upon their relative net assets. Custodian fees
for the Portfolio have been increased to include expense offsets for
custodian balance credits.
B. ADVISORY SERVICES: Under the terms of an investment advisory agreement,
Barrow, Hanley, Mewhinney & Strauss, Inc. (the "Adviser"), a wholly-owned
subsidiary of United Asset Management Corporation ("UAM"), provides investment
advisory services to the Portfolio at a fee calculated at an annual rate of
0.35% of average daily net assets. Through December 31, 1997, the Adviser has
voluntarily agreed to waive a portion of its advisory fees and to assume
expenses, if necessary, in order to keep the Portfolio's total annual
operating expenses, after the effect of expense offset arrangements, from
exceeding 0.55% and 0.80% of average daily net assets of the Portfolio's
Institutional Class Shares and Service Class Shares, respectively.
C. ADMINISTRATION SERVICES: Effective April 15, 1996, UAM Fund Services, Inc.
(the "Administrator"), a wholly-owned subsidiary of UAM, provides and oversees
administrative, fund accounting, dividend disbursing and transfer agent
services to the UAM Funds and AEW under an Administration Agreement (the
"Agreement"). Pursuant to the Agreement, the Administrator is entitled to
receive annual fees, computed daily and payable monthly, of 0.19% of the first
$200 million of the combined aggregate net assets; plus 0.11% of the next $800
million of the combined aggregate net assets; plus 0.07% of the next $2
billion of the combined aggregate net assets; plus 0.05% of the combined
aggregate net assets in excess of $3 billion. The fees are allocated among the
portfolios of the UAM Funds and AEW on the basis of their relative net assets
and are subject to a graduated minimum fee schedule per portfolio which rises
from $2,000 per month, upon inception of a portfolio, to $70,000 annually
after two years. For portfolios with more than one class of shares, the
minimum annual fee increases to $90,000. In addition, the Administrator
receives a Portfolio-specific monthly fee of 0.04% of average daily net assets
of the Portfolio. Also effective April 15, 1996, the Administrator has entered
into a Mutual Funds Service Agreement with Chase Global Funds Services Company
("CGFSC"), a wholly-owned subsidiary of The Chase Manhattan Bank, N.A., under
which CGFSC agrees to provide certain services, including but not limited to,
administration, fund accounting, dividend disbursing and transfer agent
services. Pursuant to the Mutual Funds Service Agreement, the Administrator
pays CGFSC a monthly fee.
Prior to April 15, 1996, CGFSC served as the administrator to the UAM Funds
and AEW. For its services as administrator CGFSC received annual fees,
computed daily and payable monthly, based on the combined
11
<PAGE>
BHM&S TOTAL RETURN BOND PORTFOLIO
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
aggregate average daily net assets of the UAM Funds and AEW, as follows: 0.20%
of the first $200 million of the combined aggregate net assets; plus 0.12% of
the next $800 million of the combined aggregate net assets; plus 0.08% of the
combined aggregate net assets in excess of $1 billion but less than $3
billion; plus 0.06% of the combined aggregate net assets in excess of $3
billion. The fees were allocated among the portfolios of the UAM Funds and AEW
on the basis of their relative net assets and were subject to a graduated
minimum fee schedule per portfolio which rose from $2,000 per month, upon
inception of a portfolio, to $70,000 annually after two years.
For the period April 15, 1996 to April 30, 1996, UAM Fund Services, Inc.
earned $1,927 from the Portfolio as Administrator.
D. DISTRIBUTION AND SERVICE PLANS: UAM Fund Distributors, Inc. (the
"Distributor"), a wholly-owned subsidiary of UAM, distributes the shares of
the Portfolio. The Portfolio has adopted a Distribution and Service Plan (the
"Plans") on behalf of the Service Class Shares pursuant to Rule 12b-1 under
the 1940 Act. Under the Plans, the Portfolio may not incur distribution or
service costs which exceed an annual rate of 0.75% of the Portfolio's net
assets. The Board has currently limited aggregate payments under the Plan to
0.50% per annum of the Portfolio's net assets. The Portfolio's Service Class
Shares are not currently making payments under the Distribution Plan. Under
the Service Plan, the Portfolio reimburses the Distributor or the Service
Organization for payments made at an annual rate of 0.25% of the average daily
value of Service Class Shares owned by clients of such Service Organizations.
E. PURCHASES AND SALES: For the period ended April 30, 1996, the Portfolio
made purchases of approximately $1,634,000 and sales of approximately $335,000
of investment securities other than long-term U.S. Government and short-term
securities. Purchases and sales of long-term U.S. Government securities
totaled approximately $5,197,000 and $1,411,000, respectively.
F. TRUSTEES' FEES: Each Trustee, who is not an officer or affiliated person,
receives $2,000 per meeting attended, which is allocated proportionally among
the active portfolios of UAM Funds and AEW, plus a quarterly retainer of $150
for each active portfolio of the UAM Funds and AEW, and reimbursement of
expenses incurred in attending Trustee meetings.
G. OTHER: Transactions in Capital Shares for the period ended April 30, 1996,
for the Portfolio by class were as follows:
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS SHARES SERVICE CLASS SHARES
(000) (000)
-------------------------- --------------------
<S> <C> <C>
Issued--Regular................ 278 291
In Lieu of Cash Distributions 4 3
Redeemed....................... (34) (2)
--- ---
Net Increase................... 248 292
=== ===
</TABLE>
At April 30, 1996, 99.9% of total shares outstanding were held by one record
shareholder of Institutional Class shares and 91.2% of total shares
outstanding were held by three record shareholders owning 10% or greater of
the aggregate total shares outstanding of Service Class shares.
12
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of
UAM Funds Trust and Shareholders of
BHM&S Total Return Bond Portfolio
In our opinion, the accompanying statement of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
the BHM&S Total Return Bond Portfolio (the "Portfolio"), a Portfolio of UAM
Funds Trust, at April 30, 1996, and the results of its operations, the changes
in its net assets and the financial highlights for the period November 1, 1995
(commencement of operations) through April 30, 1996, in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Portfolio's management; our responsibility is to express
an opinion on these financial statements based on our audit. We conducted our
audit of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audit, which included confirmation of securities at April 30, 1996 by
correspondence with the custodian, provides a reasonable basis for the opinion
expressed above.
Price Waterhouse LLP
Boston, Massachusetts
June 14, 1996
13
