<PAGE>
MARKED TO INDICATE CHANGES FROM POST-EFFECTIVE
AMENDMENT NO. 14
As filed with the Securities and Exchange Commission on January 3, 1997
Securities Act File No. 33-79858
Investment Company Act of 1940 File No. 811-8544
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / /
POST-EFFECTIVE AMENDMENT NO. 15 /X/
and
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 / /
AMENDMENT NO. 16 /X/
--------------
UAM FUNDS TRUST
(Exact Name of Registrant)
c/o United Asset Management Corporation
One International Place
Boston, Massachusetts 02110
(Address of Principal Executive Office)
Registrant's Telephone Number (617) 330-8900
Karl O. Hartmann, Assistant Secretary
c/o Chase Global Funds Services Company
73 Tremont Street, Boston, MA 02108
(Name and Address of Agent for Service)
--------------
COPY TO:
Audrey C. Talley, Esq.
Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, PA 19103-7098
IT IS PROPOSED THAT THIS FILING BECOME EFFECTIVE
(CHECK APPROPRIATE BOX):
[X] Immediately upon filing pursuant to Paragraph (b)
[_] on (date) pursuant to Paragraph (b)
[_] 60 days after filing pursuant to paragraph (a) (1)
[_] on (date) pursuant to paragraph (a) (1)
[_] 75 days after filing pursuant to Paragraph (a) (2)
[_] on (date) pursuant to Paragraph (a) (2) of Rule 485.
REGISTRANT HAS PREVIOUSLY ELECTED AND HEREBY CONTINUES ITS ELECTION TO REGISTER
AN INDEFINITE NUMBER OF SHARES PURSUANT TO REGULATION 24F-2 UNDER THE INVESTMENT
COMPANY ACT OF 1940, AS AMENDED, AND FILED A 24F-2 NOTICE FOR THE FISCAL YEAR
ENDED APRIL 30, 1996 ON JUNE 20, 1996.
<PAGE>
UAM FUNDS TRUST
FORM N-1A CROSS REFERENCE
<TABLE>
<CAPTION>
FORM N-1A ITEM NUMBER LOCATION IN PROSPECTUS
- --------------------- ----------------------
<S> <C> <C>
Item 1. Cover Page............................ Cover Page
Item 2. Synopsis.............................. Fund Expenses; Prospectus Summary; Risk Factors
Item 3. Condensed Financial Information....... Financial Highlights
Item 4. General Description of Registrant..... Prospectus Summary; Risk Factors; Investment
Objective; Investment Policies; Other
Investment Policies; Investment Limitations; General
Information
Item 5. Management of the Fund................ Prospectus Summary; Investment Adviser;
Administrative Services; Distributor
Item 5A. Management's Discussion of
Fund Performance...................... Included in Registrant's April 30, 1996
Annual Reports to Shareholders
Item 6. Capital Stock and Other Securities.... Purchase of Shares; Redemption of Shares;
Shareholder Services; Valuation of Shares;
Dividends, Capital Gains Distributions and Taxes
Item 7. Purchase of Securities Being Offered.. Purchase of Shares; Shareholder Services
Item 8. Redemption or Repurchase.............. Redemption of Shares; Shareholder Services
Item 9. Pending Legal Proceedings............. Not Applicable
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LOCATION IN STATEMENT
FORM N-1A ITEM NUMBER OF ADDITIONAL INFORMATION
- --------------------- -------------------------
<S> <C> <C>
Item 10. Cover Page........................... Cover Page
Item 11. Table of Contents.................... Table of Contents
Item 12. General Information and History...... Investment Adviser; General Information
Item 13. Investment Objectives and Policies... Investment Adviser; Investment Limitations
Item 14. Management of the Fund............... Management of the Fund
Item 15. Control Persons and Principal
Holders of Securities................ Management of the Fund
Item 16. Investment Advisory and
Other Services....................... Investment Adviser
Item 17. Brokerage Allocation and
Other Practices...................... Portfolio Transactions
Item 18. Capital Stock and Other Securities... General Information
Item 19. Purchase, Redemption and Pricing of
Securities Being Offered............. Purchase of Shares; Redemption of Shares
Item 20. Tax Status........................... General Information
Item 21. Underwriters......................... Management of the Fund
Item 22. Calculation of Performance Data...... Performance Calculations
Item 23. Financial Statements................. Financial Statements
</TABLE>
PART C
- ------
Information required to be included in Part C is set forth under the appropriate
item so numbered in Part C to this Registration Statement.
<PAGE>
UAM FUNDS TRUST
POST-EFFECTIVE AMENDMENT NO. 15
PART A
The following Prospectuses are included in this Post-Effective
Amendment No. 15:
. BHM&S Total Return Bond Portfolio Institutional Class Shares
. BHM&S Total Return Bond Portfolio Institutional Service Class Shares
. Chicago Asset Management Intermediate Bond Portfolio Institutional Class
Shares
. Chicago Asset Management Value/Contrarian Portfolio Institutional Class
Shares
. FPA Crescent Portfolio Institutional Class Shares
. FPA Crescent Portfolio Institutional Service Class Shares
. Hanson Equity Portfolio Institutional Class Shares
. IRC Enhanced Index Portfolio Institutional Class Shares
. Jacobs International Octagon Portfolio Institutional Class Shares
. MJI International Equity Portfolio Institutional Class Shares
. MJI International Equity Portfolio Institutional Service Class Shares
. Newbold's Equity Portfolio Institutional Class Shares
. Newbold's Equity Portfolio Institutional Service Class Shares
. TJ Core Equity Portfolio Institutional Service Class Shares
The following Prospectus is incorporated by reference to Post-Effective
Amendment No. 2 filed on November 25, 1994:
. Dwight Principal Preservation Portfolio
<PAGE>
[LOGO OF UAM FUNDS APPEARS HERE]
BHM&S Total Return
Bond Portfolio
Institutional Service
Class Shares
January 3, 1997
P R O S P E C T U S
<PAGE>
UAM FUNDS
UAM FUNDS SERVICE CENTER
C/O CHASE GLOBAL FUNDS SERVICES COMPANY
P.O. BOX 2798
BOSTON, MA 02208-2798
1-800-638-7983
- -------------------------------------------------------------------------------
BHM&S TOTAL RETURN BOND PORTFOLIO
INSTITUTIONAL SERVICE CLASS SHARES
INVESTMENT ADVISER: BARROW, HANLEY, MEWHINNEY & STRAUSS, INC.
- -------------------------------------------------------------------------------
PROSPECTUS -- JANUARY 3, 1997
UAM Funds Trust (the "Fund") is an open-end investment company known as a
"mutual fund." The Fund consists of multiple series (known as "Portfolios"),
each of which has different investment objectives and policies. The BHM&S To-
tal Return Bond Portfolio offers two separate classes of shares: Institutional
Class Shares and Institutional Service Class Shares ("Service Class Shares").
Shares of each class represent equal, pro rata interests in a Portfolio and
accrue dividends in the same manner except that the Service Class Shares bear
fees payable by the class (at the maximum rate of .25% per annum) to financial
institutions for services they provide to the owners of such shares. The secu-
rities offered in this Prospectus are Service Class Shares of one diversified,
no-load Portfolio of the Fund managed by Barrow, Hanley, Mewhinney & Strauss,
Inc.
BHM&S TOTAL RETURN BOND PORTFOLIO. BHM&S Total Return Bond Portfolio (the
"Portfolio") seeks to provide maximum long term total return consistent with
reasonable risk to principal by investing in investment grade fixed income se-
curities of varying maturities. Income return is expected to be a predominant
portion of the Portfolio's total return. Any capital return on the Portfolio
is dependent upon, among other factors, interest rate changes as well as the
average maturity and duration of the Portfolio. The Adviser believes that by
investing in undervalued securities with above average effective yields and
capital appreciation potential, the Portfolio will generate superior returns
over the long term while minimizing volatility and, therefore, downside risk.
There can be no assurance that the Portfolio will achieve its stated objec-
tive.
Keep this Prospectus for future reference. It contains information that you
should know before you invest. A "Statement of Additional Information" (SAI)
containing additional information about the Fund has been filed with the Secu-
rities and Exchange Commission. The SAI is dated January 3, 1997 and has been
incorporated by reference into this Prospectus. For a free copy of the SAI
contact the UAM Funds Service Center at the address or telephone number above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECU-RITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Fund Expenses.............................................................. 1
Prospectus Summary......................................................... 3
Risk Factors............................................................... 4
Financial Highlights....................................................... 5
Investment Objective....................................................... 6
Investment Policies........................................................ 6
Other Investment Policies.................................................. 7
Investment Limitations..................................................... 12
Purchase of Shares......................................................... 13
Redemption of Shares....................................................... 16
Shareholder Services....................................................... 18
Service and Distribution Plans............................................. 19
Valuation of Shares........................................................ 21
Performance Calculations................................................... 21
Dividends, Capital Gains Distributions and Taxes........................... 22
Investment Adviser......................................................... 23
Adviser's Historical Performance........................................... 25
Administrative Services.................................................... 27
Distributor................................................................ 27
Portfolio Transactions..................................................... 28
General Information........................................................ 28
UAM Funds -- Service Class Shares.......................................... 30
</TABLE>
<PAGE>
FUND EXPENSES
The following table illustrates expenses and fees that a shareholder of the
Portfolios' Service Class Shares would incur. Transaction fees may be charged
if a broker-dealer or other financial intermediary deals with the Fund on your
behalf. (See "PURCHASE OF SHARES.")
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<CAPTION>
SERVICE CLASS SHARES
--------------------
<S> <C>
Sales Load Imposed on Purchases......................... NONE
Sales Load Imposed on Reinvested Dividends.............. NONE
Deferred Sales Load..................................... NONE
Redemption Fees......................................... NONE
Exchange Fees........................................... NONE
</TABLE>
ESTIMATED ANNUAL FUND OPERATING EXPENSES (As A Percentage of Net Assets)
<TABLE>
<CAPTION>
SERVICE CLASS SHARES
--------------------
<S> <C>
Investment Advisory Fees.............................. 0.35 %
Administrative Fees................................... 1.11 %
12b-1 Fees (Including Shareholder Servicing Fees) 0.25 %
Other Expenses........................................ 0.64 %
Advisory Fees Waived and Expenses Assumed............. (1.55)%
-----
Total Operating Expenses (After Fee Waiver and
Expenses Assumed)................................... 0.80 %*
=====
</TABLE>
- -----------
See "SERVICE AND DISTRIBUTION PLANS."
* The Adviser has voluntarily agreed to waive all or a portion of its advisory
fees and to assume operating expenses to keep the Portfolio's Service Class
Shares' total annual operating expenses (excluding interest, taxes and ex-
traordinary expenses) from exceeding 0.80% of average daily net assets
through December 31, 1997. The figures above include the effect of expense
offsets. If expense offsets were excluded, annualized Total Operating Ex-
penses for the six month period ended October 31, 1996 would not differ.
(See "FINANCIAL HIGHLIGHTS.") It is estimated that, if the Adviser did not
waive fees and assume expenses, the total annual operating expenses of the
Portfolio's Service Class Shares would be 2.35% of average daily net assets.
The Fund will not reimburse the Adviser for any advisory fees that are
waived or Portfolio expenses that the Adviser may bear on behalf of the
Portfolio for a given fiscal year.
1
<PAGE>
The table above shows various fees and expenses an investor would bear di-
rectly or indirectly. For purposes of calculating the estimated fees and ex-
penses set forth above, it is assumed that the Portfolio's average daily net
assets will be $10 million.
Investors can get a better idea of how the Portfolio's operating expenses
will affect their own investments by examining the following chart. The chart
shows how much a hypothetical investor would pay in expenses, assuming that he
or she made an initial investment of $1,000, earned a 5% annual rate of return
and redeemed his or her investment at the end of the time period indicated.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Service Class Shares......................... $ 8 $26 $45 $99
</TABLE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EX-
PENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE
SHOWN ABOVE.
2
<PAGE>
PROSPECTUS SUMMARY
INVESTMENT ADVISER
Barrow, Hanley, Mewhinney & Strauss, Inc. (the "Adviser") is a registered
investment adviser specializing in the active management of stock, bond and
balanced portfolios for institutional, tax-exempt clients. Founded in 1979,
the firm is a wholly-owned subsidiary of United Asset Management Corporation.
The Adviser currently has $18 billion in assets under management. (See "IN-
VESTMENT ADVISER.")
PURCHASE OF SHARES
Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the
"Distributor") to investors at net asset value without a sales commission.
Share purchases may be made by sending investments directly to the Fund. The
minimum initial investment is $2,500. The minimum for subsequent investments
is $100. The minimum initial investment for IRA accounts is $500. The minimum
initial investment for spousal IRA accounts is $250. Certain exceptions to the
initial or minimum investment amounts may be made by the officers of the Fund
(See "PURCHASE OF SHARES.")
DIVIDENDS AND DISTRIBUTIONS
The Portfolio will normally distribute substantially all of its net invest-
ment income in quarterly dividends. The Portfolio will distribute any realized
net capital gains annually. Distributions will be reinvested in the Portfo-
lio's shares automatically unless an investor elects to receive cash distribu-
tions. (See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES.")
REDEMPTION OF SHARES
Shares of the Portfolio may be redeemed at any time, without cost, at the
net asset value of the Portfolio next determined after receipt of the redemp-
tion request. The redemption price may be more or less than the purchase
price. (See "REDEMPTION OF SHARES.")
ADMINISTRATIVE SERVICES
UAM Fund Services, Inc. ("UAMFSI"), a wholly-owned subsidiary of United As-
set Management Corporation, is responsible for performing and overseeing ad-
ministration, fund accounting, dividend disbursing and transfer agency serv-
ices provided to the Fund and its Portfolios by third-party service providers.
(See "ADMINISTRATIVE SERVICES.")
3
<PAGE>
RISK FACTORS
Prospective investors should consider the following: (1) The fixed income
securities held by the Portfolio will be affected by general changes in inter-
est rates resulting in increases or decreases in the value of the securities.
The value of fixed income securities can be expected to vary inversely to the
changes in prevailing interest rates, i.e., as interest rates decline, the
market value of fixed income securities tends to increase and vice versa; (2)
The Portfolio may purchase securities on a when-issued basis which do not earn
interest until issued and may decline or appreciate in market value prior to
their delivery to the Portfolio; (3) The Portfolio will invest in investment
grade debt securities, but reserves the right to hold securities that have
been downgraded. Adverse economic and corporate changes and changes in inter-
est rates may have a greater impact on issuers of lower rated debt securities
that the Portfolio may hold, which may lead to greater price volatility. Also,
lower rated securities may be more difficult to value accurately or sell in
the secondary market; (4) The Portfolio may invest in repurchase agreements
which entail a risk of loss should the seller default on its transaction; (5)
The Portfolio may lend its investment securities, which entails a risk of loss
should a borrower fail financially. (See "OTHER INVESTMENT POLICIES.")
4
<PAGE>
FINANCIAL HIGHLIGHTS
The following table provides selected per share information for a share out-
standing throughout the periods presented for the Portfolio's Service Class
Shares. This table is part of the Portfolio's Financial Statements included in
the Portfolio's 1996 Annual Report to Shareholders and the 1996 Semi-Annual
Report to Shareholders. The Reports are incorporated into the Portfolio's SAI.
The Portfolio's Financial Statements for the period ended April 30, 1996 have
been audited by Price Waterhouse LLP whose unqualified opinion on the Finan-
cial Statements for the period ended April 30, 1996 is also incorporated into
the SAI. Please read the following information in conjunction with the Portfo-
lio's 1996 Annual Report to Shareholders and the 1996 Semi-Annual Report to
Shareholders.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
NOVEMBER 1, 1995** OCTOBER 31, 1996
TO APRIL 30, 1996++ (UNAUDITED)
------------------- ----------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD...... $10.00 $ 9.84
====== ======
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income................... 0.27 0.28
Net Realized and Unrealized Gain (Loss)
on Investments........................ (0.27) 0.19
------ ------
Total from Investment Operations...... -- 0.47
------ ------
DISTRIBUTIONS
Net Investment Income................... (0.16) (0.24)
------ ------
NET ASSET VALUE, END OF PERIOD............ $ 9.84 $10.07
====== ======
TOTAL RETURN+............................. (0.07)% 4.86%
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands)... $2,871 $2,708
Ratio of Expenses to Average Net
Assets................................ 0.83%* 0.80%*
Ratio of Net Investment Income to
Average Net Assets.................... 5.44%* 5.65%*
Portfolio Turnover Rate................. 55% 111%
Voluntary Waived Fees and Expenses
Assumed by the Adviser Per Share...... $ 0.20 $ 0.09
Ratio of Expenses to Average Net Assets
Including Expense Offsets............. 0.80%* 0.80%*
</TABLE>
- -----------
* Annualized.
** Commencement of Operations.
+ 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.
5
<PAGE>
INVESTMENT OBJECTIVE
The objective of the Portfolio is to provide maximum long-term total return
consistent with reasonable risk to principal by investing in investment grade
fixed income securities of varying maturities. Income return is expected to be
a predominant portion of the Portfolio's total return. Any capital return on
the Portfolio is dependent upon, among other factors, interest rate changes as
well as the average maturity and duration of the Portfolio. The Adviser be-
lieves that by investing in undervalued securities with above average effec-
tive yields and capital appreciation potential, the Portfolio will generate
superior returns over the long term while minimizing volatility and, there-
fore, downside risk.
INVESTMENT POLICIES
The Portfolio seeks to achieve its objective by investing at least 90% of
its total assets in a diversified portfolio of the following dollar-denomi-
nated investment grade issues of varying maturities: U.S. Treasuries and Agen-
cies; zero coupon obligations; mortgage-backed securities; asset-backed secu-
rities; corporate bonds; municipal bonds; and domestic, Yankeedollar and Euro-
dollar bonds (See "OTHER INVESTMENT POLICIES."). These issues may have fixed,
variable or floating rates of interest. As a matter of policy, the Adviser
does not intend to invest in or utilize futures, options or other complex de-
rivative instruments or securities.
The Adviser expects to actively manage the Portfolio in order to meet the
investment objective. To produce favorable returns, the Adviser will invest in
securities that it believes to be undervalued, generating an effective yield
advantage versus the market. To control the volatility of returns, the Portfo-
lio will exhibit a high current yield, a high quality and a conservative matu-
rity structure.
The Adviser's decision process will focus on security selection, sector con-
centration and yield curve positioning. The Adviser will not engage in eco-
nomic forecasts in an attempt to "time the market" since it believes that
there are too many economic and political variables on a domestic and interna-
tional basis to do so successfully on a consistent basis. Therefore, the Port-
folio will maintain a conservative maturity structure, with securities being
diversified along the yield curve. The Portfolio's average weighted maturity
will generally be ten years or less, with the average weighted duration compa-
rable to that of the Salomon Brothers' Broad Investment Grade Index which is
approximately five years. Duration compares interest rate risk between securi-
ties with different coupons and different maturities, summarizing in a single
number the price sensitivity of a bond -- how a bond's maturity and coupon
rate affect its exposure to interest rate risk. Duration involves the applica-
tion of several principles: as the maturity of a bond increases, duration in-
creases; as the coupon of a bond increases, duration decreases; generally, the
lower the coupon payment, the higher the duration; and duration decreases as
the
6
<PAGE>
frequency of the coupon payment increases. Generally, 10% or less of the Port-
folio's assets will be invested in various short-term investments. Please see
"SHORT-TERM INVESTMENTS" for a list of the short-term instruments in which the
Portfolio may invest.
The Adviser's security selection process begins by analyzing a bond's yield
to maturity premium (or spread) versus the most recently issued U.S. Treasury
of similar maturity. Having identified bonds with an above-average premium,
the Adviser will then evaluate those factors that will influence the bond's
future premium (i.e., credit quality, security structure, supply/demand rela-
tionships, etc.). The objective of this process is to identify those issues
whose yield premium will compress or narrow over a wide range of potential in-
terest rate change, supporting superior long term performance. Furthermore,
the Adviser will concentrate the Portfolio's holdings in industry sectors and
maturity ranges that it believes are undervalued while seeking a prudent level
of diversification.
The Portfolio will invest in investment grade bonds which have one of the
four highest rating categories (i.e. Aaa, Aa, A or Baa by Moody's Investors
Service, Inc. ("Moody's) or AAA, AA, A or BBB by Standard & Poor's Corporation
("S&P")) at the time of purchase. Bonds rated Baa or BBB have speculative
characteristics and may be more sensitive to changes in the economy and the
financial condition of issuers than higher rated bonds. The Adviser also re-
serves the right to retain securities which are downgraded by one or both of
the rating agencies if, in the Adviser's judgment, retention of the securities
is warranted. The Portfolio's SAI contains a more detailed description of bond
ratings.
OTHER INVESTMENT POLICIES
SHORT-TERM INVESTMENTS
In order to earn a return on uninvested assets, meet anticipated redemp-
tions, or for temporary defensive purposes, the Portfolio may invest a portion
of its assets in domestic and foreign money market instruments including cer-
tificates of deposit, bankers' acceptances, time deposits, U.S. Government ob-
ligations, U.S. Government agency securities, short-term corporate debt secu-
rities, and commercial paper rated A-1 or A-2 by Standard & Poor's Corporation
or Prime-1 or Prime-2 by Moody's Investors Service, Inc. or if unrated, deter-
mined by the Adviser to be of comparable quality.
Time deposits maturing in more than seven days will not be purchased by the
Portfolio, and time deposits maturing from two business days through seven
calendar days will not exceed 10% of the total assets of the Portfolio. The
Portfolio will not invest in any security issued by a commercial bank unless
(i) the bank has total assets of at least $1 billion, or the equivalent in
other currencies, (ii) in the case of U.S. banks, it is a member of the Fed-
eral Deposit Insurance Corporation, and
7
<PAGE>
(iii) in the case of foreign branches of U.S. banks, the security is, in the
opinion of the Adviser, of an investment quality comparable with other debt se-
curities which may be purchased by the Portfolio.
The Fund has received permission from the Securities and Exchange Commission
(the "SEC") to deposit the daily uninvested cash balances of the Fund's Portfo-
lios, as well as cash for investment purposes, into one or more joint accounts
and to invest the daily balance of the joint accounts in the following short-
term investments: fully collateralized repurchase agreements, interest-bearing
or discounted commercial paper including dollar-denominated commercial paper of
foreign issuers, and any other short-term money market instruments including
variable rate demand notes and tax-exempt money instruments. By entering into
these investments on a joint basis, it is expected that a Portfolio may earn a
higher rate of return on investments relative to what it could earn individual-
ly.
The Fund has received permission from the SEC for each of its Portfolios to
invest, for cash management purposes, the greater of 5% of its total assets or
$2.5 million in the Fund's DSI Money Market Portfolio. (See "INVESTMENT COMPA-
NIES.")
REPURCHASE AGREEMENTS
The Portfolio may invest in repurchase agreements collateralized by U.S. Gov-
ernment securities, certificates of deposit, and certain bankers' acceptances
and other securities outlined above under "SHORT-TERM INVESTMENTS." In a repur-
chase agreement, the Portfolio buys a security and simultaneously commits to
sell that security back at an agreed upon price plus an agreed upon market rate
of interest. Under a repurchase agreement, the seller is also required to main-
tain the value of securities subject to the agreement at not less than 100% of
the repurchase price. The value of the securities purchased will be evaluated
daily, and the Adviser will, if necessary, require the seller to maintain addi-
tional securities to ensure that the value is in compliance with the previous
sentence. The use of repurchase agreements involves certain risks. For example,
a default by the seller of the agreement may cause the Portfolio to experience
a loss or delay in the liquidation of the collateral securing the repurchase
agreement. The Portfolio might also incur disposition costs in liquidating the
collateral. While the Fund's management acknowledges these risks, it is ex-
pected that they can be controlled through stringent security selection crite-
ria and careful monitoring procedures. The Fund has received permission from
the SEC to pool daily uninvested cash balances of the Fund's Portfolios in or-
der to invest in repurchase agreements on a joint basis. By entering into joint
repurchase agreements, the Portfolio may incur lower transactions costs and
earn higher rates of interest on joint repurchase agreements. The Portfolio's
contribution would determine its return from a joint repurchase agreement. (See
"SHORT-TERM INVESTMENTS.")
8
<PAGE>
LENDING OF SECURITIES
The Portfolio may lend its investment securities to qualified institutional
investors as a means of earning income. The Portfolio will not loan securities
to the extent that greater than one-third of its assets at fair market value
would be committed to loans. During the term of a loan, the Portfolio is sub-
ject to a gain or loss depending on any increase or decrease in the market
price of the securities loaned. Lending of securities is subject to review by
the Fund's Board of Trustees. All relevant facts and circumstances, including
the creditworthiness of the broker, dealer or institution, will be considered
in making decisions about securities lending.
An investment company may pay reasonable negotiated fees in connection with
loaned securities so long as such fees are set forth in a written contract and
approved by its Board of Trustees. The Portfolio will continue to retain any
voting rights with respect to loaned securities. If a material event occurs af-
fecting an investment on loan, the loan must be called and the securities vot-
ed.
WHEN-ISSUED, FORWARD DELIVERY AND DELAYED SETTLEMENT SECURITIES
The Portfolio may purchase and sell securities on a "when-issued," "delayed
settlement," or "forward delivery" basis. "When-issued" or "forward delivery"
refers to securities whose terms and indenture are available, and for which a
market exists, but which are not available for immediate delivery. When-issued
and forward delivery transactions may be expected to occur a month or more be-
fore delivery is due. Delayed settlement is a term used to describe settlement
of a securities transaction in the secondary market which will occur sometime
in the future. No payment or delivery is made by the Portfolio until it re-
ceives payment or delivery from the other party to any of the above transac-
tions. It is possible that the market price of the securities at the time of
delivery may be higher or lower than the purchase price. The Portfolio will
maintain a separate account of cash or liquid securities at least equal to the
value of purchase commitments until payment is made. Typically, no income ac-
crues on securities purchased on a delayed delivery basis prior to the time de-
livery is made although the Portfolio may earn income on securities it has de-
posited in a segregated account.
The Portfolio may engage in these types of purchases in order to buy securi-
ties that fit with its investment objectives at attractive prices -- not to in-
crease its investment leverage.
PORTFOLIO TURNOVER
Portfolio turnover is not anticipated to exceed 150%. In addition to Portfo-
lio trading costs, higher rates of portfolio turnover may result in the reali-
zation of capital gains. (See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAX-
ES" for more information on taxation). The Portfolio will not normally en
9
<PAGE>
gage in short-term trading, but reserves the right to do so. The table set
forth in "Financial Highlights" presents the Portfolio's historical portfolio
turnover rates.
INVESTMENT COMPANIES
The Portfolio reserves the right to invest up to 10% of its total assets,
calculated at the time of investment, in the securities of other open-end or
closed-end investment companies. No more than 5% of the investing Portfolio's
total assets may be invested in the securities of any one investment company
nor may it acquire more than 3% of the voting securities of any investment com-
pany. The Portfolio will indirectly bear its proportionate share of any manage-
ment fees paid by an investment company in which it invests in addition to the
advisory fee paid by the Portfolio.
The Fund has received permission from the SEC to allow each of its Portfolios
to invest, for cash management purposes, the greater of 5% of its total assets
or $2.5 million in the Fund's DSI Money Market Portfolio provided that the in-
vestment is consistent with the Portfolio's investment policies and restric-
tions. Based upon the Portfolio's assets invested in the DSI Money Market Port-
folio, the investing Portfolio's adviser will waive its investment advisory fee
and any other fees earned as a result of the Portfolio's investment in the DSI
Money Market Portfolio. The investing Portfolio will bear expenses of the DSI
Money Market Portfolio on the same basis as all of its other shareholders.
RESTRICTED AND ILLIQUID SECURITIES
The Portfolio may purchase restricted securities that are not registered for
sale to the general public but which are eligible for resale to qualified in-
stitutional investors under Rule 144A of the Securities Act of 1933. Under the
supervision of the Fund's Board of Trustees, the Adviser determines the liquid-
ity of such investments by considering all relevant factors. Provided that a
dealer or institutional trading market in such securities exists, these re-
stricted securities are not treated as illiquid securities for purposes of the
Portfolio's investment limitations. The Portfolio may invest up to 15% of its
net assets in illiquid securities. Prices realized from the sales of these se-
curities could be more or less than those originally paid by the Portfolio or
less than what may be considered the fair value of such securities.
MORTGAGE-BACKED SECURITIES
Mortgage-backed securities are collateralized by pools of mortgages assembled
for subsequent sale to investors by various governmental agencies and sponsored
organizations as well as by private issuers. The underlying assets
collateralizing the mortgage-backed securities may include single-family, mul-
tifamily and commercial properties. The two fundamental forms of mortgage-
backed securities are pass-throughs and collateralized mortgage obligations
("CMOs"). Pass-throughs produce monthly payments of principal and interest from
the underlying mortgages. CMOs divide the cash flows generated from the under-
lying mort
10
<PAGE>
gages or mortgage pass-through securities into different segments known as
"tranches" which are then retired sequentially over time in order of priority.
The market value and yield of mortgage-backed securities will fluctuate due to
market interest rate change and early prepayments of the underlying mortgages.
As prepayment rates on mortgages vary widely, it is difficult to accurately
predict the average maturity of a particular pool of mortgages or tranches of
CMOs. Although mortgage-backed securities may offer higher yields than those
available from other types of securities, mortgage-backed securities may be
less effective than other types of securities as a means of "locking in" an at-
tractive rate for an extended period because of the prepayment feature. The ma-
jority of the mortgage-backed securities held by the Portfolio will carry a
guarantee from an agency of the U.S. Government of the eventual payment of
principal and interest.
ASSET-BACKED SECURITIES
Asset-backed securities are collateralized by short maturity loans such as
automobile receivables, credit card receivables, other types of receivables or
assets. Credit support for asset-backed securities may be based on the under-
lying assets and/or provided through credit enhancements by a third party.
Credit enhancement techniques include letters of credit, insurance bonds, lim-
ited guarantees (which are generally provided by the issuer), senior-subordi-
nated structures and over-collateralization.
MUNICIPAL OBLIGATIONS
Municipal obligations include notes, bonds and other securities issued by or
on behalf of states, territories and possessions of the U.S. and the District
of Columbia and their political subdivisions, agencies and instrumentalities.
The interest on such municipal obligations will normally be exempt from federal
income tax. These bonds may be general obligation bonds secured by the issuer's
pledge of its full faith, credit and taxing power for the payment of principal
and interest, or they may be revenue bonds payable from specific revenue sourc-
es, but are not generally backed by the issuer's taxing power. These obliga-
tions may include private activity bonds where payment is the responsibility of
the private industrial user of the facility financed by the bonds. Municipal
notes are issued to meet short-term funding requirements of the issuer and in-
clude construction loan notes, short-term discount notes, tax-exempt commercial
paper, demand notes and similar instruments. Municipal bonds will be rated in-
vestment grade by Moody's and S&P, as described above. Investment grade munici-
pal notes will be rated MIG1, MIG2 or MIG3 by Moody's, or SP-1 or SP-2 by S&P
or, if unrated, determined by the Adviser to be of comparable quality. Please
refer to the Portfolio's SAI for a detailed description of municipal note rat-
ings.
YANKEEDOLLAR AND EURODOLLAR SECURITIES
Yankeedollar securities are U.S. dollar-based obligations issued inside the
United States by foreign entities. Eurodollar securities are U.S. dollar-based
obli
11
<PAGE>
gations issued outside the United States by domestic or foreign entities. In-
vestment in these securities involve certain risks which are not typically as-
sociated with investing in domestic securities. For example, non U.S.-based is-
suers are not subject to the same accounting, auditing and financial reporting
standards as are domestic issuers. There may be less publicly-available infor-
mation about non-U.S.-based issuers which may make it difficult to make invest-
ment decisions. Political factors may have an impact in the form of confisca-
tory taxation, expropriation or political instability in international markets.
Some foreign governments also levy withholding taxes against dividend and in-
terest income. Although in some countries a portion of the taxes is recover-
able, the non-recovered portion of foreign withholding taxes will reduce the
income the Portfolio receives from the companies comprising its investments.
ZERO COUPON SECURITIES
A portion of the Portfolio may be invested in zero coupon securities which
are fixed income securities that do not make regular interest payments. Zero
coupon securities are sold at substantial discounts from their face value. The
difference between a zero coupon security's issue or purchase price and its
face value represents the imputed interest an investor will earn if the obliga-
tion is held until maturity. Zero coupon securities may offer the Portfolio the
opportunity to earn higher yields than those available on ordinary interest
paying obligations of similar credit quality and maturity. However, the prices
of zero coupon securities may also exhibit greater price volatility than ordi-
nary fixed income securities because of the manner in which their principal and
interest are returned to the investor. The Portfolio will accrue income on such
investments for tax and accounting purposes which is distributable to share-
holders. Since no cash is received at the time of accrual, the Portfolio may be
required to liquidate portfolio securities to satisfy its distribution obliga-
tions.
INVESTMENT LIMITATIONS
The Portfolio will not:
(a) with respect to 75% of its assets, invest more than 5% of its total
assets at the time of purchase in the securities of any single issuer
(other than obligations issued or guaranteed as to principal and in-
terest by the U.S. Government or any of its agencies or instrumentali-
ties);
(b) with respect to 75% of its assets, purchase more than 10% of any class
of the outstanding voting securities of any issuer;
(c) invest more than 5% of its assets at the time of purchase in the secu-
rities of companies that have (with predecessors) a continuous operat-
ing history of less than 3 years;
12
<PAGE>
(d) invest more than 25% of its assets in companies within a single indus-
try; however, there are no limitations on investments made in instru-
ments issued or guaranteed by the U.S. Government and its agencies.
(e) make loans except by purchasing debt securities in accordance with its
investment objective and policies or entering into repurchase agree-
ments or by lending its portfolio securities to banks, brokers, deal-
ers and other financial institutions so long as the loans are made in
compliance with the 1940 Act, as amended, or the Rules and Regulations
or interpretations of the SEC;
(f) (i) borrow, except from banks and as a temporary measure for extraor-
dinary or emergency purposes and then, in no event, in excess of 33
1/3% of the Portfolio's gross assets valued at the lower of market or
cost, and (ii) the Portfolio may not purchase additional securities
when borrowings exceed 5% of total assets; or
(g) pledge, mortgage or hypothecate any of its assets to an extent greater
than 33 1/3% of its total assets at fair market value.
The investment objectives of the Portfolio are fundamental and may be changed
only with the approval of the holders of a majority of the outstanding shares
of the Portfolio. Except for limitations (a), (b), (d), (e) and (f)(i), the
Portfolio's investment limitations and policies described in this Prospectus
and in the SAI are not fundamental and may be changed by the Fund's Board of
Trustees upon reasonable notice to investors. All other investment limitations
described here and in the SAI are fundamental policies and may be changed only
with the approval of the holders of a majority of the outstanding shares of the
Portfolio. If a percentage limitation on investment or utilization of assets as
set forth above is adhered to at the time an investment is made, a later change
in percentage resulting from changes in the value or total cost of the Portfo-
lio's assets will not be considered a violation of the restriction.
PURCHASE OF SHARES
Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the
"Distributor"), without a sales commission at the net asset value next deter-
mined after an order is received by the Custodian (See "VALUATION OF SHARES.")
The minimum initial investment required is $2,500. The minimum initial invest-
ment for IRA accounts is $500. The minimum initial investment for spousal IRA
accounts is $250. Certain exceptions may be made by the officers of the Fund.
The Portfolio issues two classes of shares: Institutional Class and Institu-
tional Service Class. The two classes of shares each represent interests in the
same portfolio of investments, have the same rights and are identical in all
respects, except that the Service Class Shares offered by this Prospectus bear
shareholder servicing
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<PAGE>
expenses, and have exclusive voting rights with respect to the Rule 12b-1 Dis-
tribution Plan pursuant to which the distribution fee may be paid. The two
classes have different exchange privileges. (See "EXCHANGE PRIVILEGE") The net
income attributable to Service Class Shares and the dividends payable on Serv-
ice Class Shares will be reduced by the amount of the shareholder servicing
and distribution fees; accordingly, the net asset value of the Service Class
Shares will be reduced by such amount to the extent the Portfolio has undis-
tributed net income.
Some Service Agents may also impose additional or different conditions or
other account fees on the purchase and redemption of Portfolio shares, which
are not subject to the Rule 12b-1 Service and Distribution Plans. Amounts paid
to Service Agents may include transaction fees and/or service fees paid by the
Fund from the Fund assets attributable to the Service Agent and, would not be
imposed if shares of the Portfolio were purchased directly from the Fund or
the Distributor. The Service Agents may provide shareholder services to their
customers that are not available to a shareholder dealing directly with the
Fund. Each Service Agent is responsible for transmitting to its customers a
schedule of any such fees and information regarding any additional or differ-
ent conditions regarding purchases and redemptions. Shareholders who are cus-
tomers of Service Agents should consult their Service Agent for information
regarding these fees and conditions. A salesperson and any other person enti-
tled to receive compensation for selling or servicing Portfolio shares may re-
ceive different compensation with respect to one particular class of shares
over another in the Fund.
Service Agents may enter confirmed purchase orders on behalf of their cus-
tomers. If shares of the Portfolio are purchased in this manner, the Service
Agent must receive your investment order before the close of trading on the
New York Stock Exchange ("NYSE"), and transmit it to the Fund's Sub-Transfer
Agent prior to 4 p.m. to receive that day's share price. Proper payment for
the order must be received by the Sub-Transfer Agent no later than the time
when the Portfolio is priced on the following business day. Service Agents are
responsible to their customers and the Fund for timely transmission of all
subscription and redemption requests, investment information, documentation
and money.
INITIAL INVESTMENT
BY MAIL
. Complete and sign an Application, and mail it together with a check pay-
able to UAM Funds, to:
UAM Funds Trust
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
14
<PAGE>
Payment for purchases of shares received by mail will be credited to an ac-
count at the next share price calculated for the Portfolio after receipt. Pay-
ment does not need to be converted into Federal Funds (monies credited to the
Fund's Custodian Bank by a Federal Reserve Bank) before the Fund will accept it
for investment.
BY WIRE
. As soon as possible, telephone the UAM Funds Service Center and provide
the account name, address, telephone number, social security or taxpayer
identification number, Portfolio selected, amount being wired, and the
name of the bank wiring the funds. An account number and a wire control
number will be provided to you. Next,
.instruct your bank to wire the specified amount to the Fund's Custodian:
The Chase Manhattan Bank
ABA #021000021
UAM Funds
BHM&S Total Return Bond Fund
Credit DDA #9102772952
(Your Account Registration)________________
(Your Account Number)___________________
(Wire Control Number)___________________
. Forward a completed Application to the UAM Funds Service Center at the
address shown on the Form. Federal Funds purchases will be accepted only
on days when the NYSE and the Custodian Bank are open for business.
ADDITIONAL INVESTMENTS
Additional investments can be made at any time. The minimum additional in-
vestment is $100. Shares can be purchased at net asset value by mailing a check
made payable to "UAM Funds" to the above address or by wiring money to the Cus-
todian Bank using the instructions outlined above. When making additional in-
vestments, be sure that the account number, account name and the Portfolio to
be purchased is identified on the check or wire. Prior to wiring additional in-
vestments, notify the UAM Funds Service Center by calling the number on the
cover of this Prospectus. Mail orders should include, when possible, the "In-
vest by Mail" stub which accompanies any Fund confirmation statement.
OTHER PURCHASE INFORMATION
Investments received by 4 p.m. ET (the close of the NYSE) will be invested at
the share price calculated after the NYSE closes on that day. Investments re-
ceived after the close of the NYSE will be executed at the price computed on
the next day the NYSE is open. The Fund reserves the right, in its sole discre-
tion, to suspend the offering of shares or reject purchase orders of the Port-
folio when, in
15
<PAGE>
the judgement of management, such suspension or rejection is in the best inter-
ests of the Fund. Purchases of shares will be made in full and fractional
shares calculated to three decimal places. Certificates for whole shares will
be issued upon written request by the shareholder. Certificates for fractional
shares will not be issued.
IN-KIND PURCHASES
If accepted by the Fund, shares of the Portfolio may be purchased in exchange
for securities which are eligible for acquisition by the Portfolio, as de-
scribed in this Prospectus. Securities to be exchanged which are accepted by
the Fund will be valued as described under "VALUATION OF SHARES" at the next
determination of net asset value after acceptance. Shares issued by the Portfo-
lio in exchange for securities will be issued at net asset value determined as
of the same time. All dividends, interest, subscription, or other rights per-
taining to such securities shall become the property of the Portfolio and must
be delivered to the Fund by the investor upon receipt from the issuer. Securi-
ties acquired through an in-kind purchase will be acquired for investment and
not for immediate resale.
The Fund will not accept securities in exchange for shares of the Portfolio
unless:
. at the time of exchange, such securities are eligible to be in-
cluded in the Portfolio (current market quotations must be readily
available for such securities);
. the investor represents and agrees that all securities offered to
be exchanged are liquid securities and not subject to any restric-
tions upon their sale by the Portfolio under the Securities Act of
1933, or otherwise; and
. the value of any such securities (except U.S. Government
securities) being exchanged together with other securities of the
same issuer owned by the Portfolio will not exceed 5% of the net
assets of the Portfolio immediately after the transaction.
Investors who are subject to Federal taxation upon exchange may realize a
gain or loss for Federal income tax purposes depending upon the cost of securi-
ties or local currency exchanged. Investors interested in such exchanges should
contact the Adviser.
REDEMPTION OF SHARES
Shares of the Portfolio may be redeemed by mail or telephone, at any time,
without cost, at the net asset value of the Portfolio next determined after re-
ceipt of the redemption request. No charge is made for redemptions. Any redemp-
tion may be more or less than the purchase price of your shares depending on
the market value of the investment securities held by the Portfolio.
16
<PAGE>
BY MAIL
Address requests for redemption to the UAM Funds Service Center. Requests to
redeem shares must include:
. share certificates, if issued;
. a letter of instruction or an assignment specifying the number of
shares or dollar amount to be redeemed, signed by all registered
owners of the shares in the exact names in which they are regis-
tered;
. any required signature guarantees (see "SIGNATURE GUARANTEES"); and
. any other necessary legal documents, if required, in the case of
estates, trusts, guardianships, custodianships, corporations, pen-
sion and profit sharing plans and other organizations.
BY TELEPHONE
A redemption request by telephone requires the following:
. establish the telephone redemption privilege (and if desired, the
wire redemption privilege) by completing appropriate sections of
the Application; and
. call the Fund and instruct that the redemption proceeds be mailed
to you or wired to your bank.
The following tasks cannot be accomplished by telephone:
. changing the name of the commercial bank or the account designated
to receive redemption proceeds (this can be accomplished only by a
written request signed by each shareholder, with each signature
guaranteed);
. redemption of certificated shares by telephone.
The Fund and its Sub-Transfer Agent will employ reasonable procedures to con-
firm that instructions communicated by telephone are genuine, and they may be
liable for any losses if they fail to do so. These procedures include requiring
the investor to provide certain personal identification at the time an account
is opened, as well as prior to effecting each transaction requested by tele-
phone. In addition, all telephone transaction requests will be recorded and in-
vestors may be required to provide additional telecopied written instructions
of such transaction requests. The Fund or Sub-Transfer Agent may be liable for
any losses due to unauthorized or fraudulent telephone instructions if the Fund
or the Sub-Transfer Agent does not employ the procedures described above. Nei-
ther the Fund nor the Sub-Transfer Agent will be responsible for any loss, lia-
bility, cost or expense for following instructions received by telephone that
it reasonably believes to be genuine.
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<PAGE>
SIGNATURE GUARANTEES
Signature guarantees are required for the following redemptions:
. redemptions where the proceeds are to be sent to someone other than
the registered shareowner(s);
. redemptions where the proceeds are to be sent to someplace other
than the registered address, or
. share transfer requests.
Signature guarantees will be accepted from any eligible guarantor institu-
tion which participates in a signature guarantee program. Eligible guarantor
institutions include banks, brokers, dealers, credit unions, national securi-
ties exchanges, registered securities associations, clearing agencies and sav-
ings associations. Broker-dealers guaranteeing signatures must be a member of
a clearing corporation or maintain net capital of at least $100,000. Credit
unions must be authorized to issue signature guarantees.
OTHER REDEMPTION INFORMATION
Normally, the Fund will make payment for all shares redeemed under proper
procedures within one business day of and no more than seven days after the
receipt of the request, or earlier if required under applicable law. The Fund
may suspend the right of redemption or postpone the date at times when the
NYSE and Custodian Bank are closed, or under any emergency circumstances de-
termined by the SEC.
If the Board of Trustees determines that it would be detrimental to the best
interests of remaining shareholders of the Fund to make payment wholly or
partly in cash, the Fund may pay redemption proceeds in whole or in part by a
distribution in-kind of liquid securities held by the Portfolio in lieu of
cash in conformity with applicable rules of the SEC. Investors may incur bro-
kerage charges on the sale of portfolio securities received in payment of re-
demptions.
SHAREHOLDER SERVICES
EXCHANGE PRIVILEGE
Service Class Shares of the Portfolio may be exchanged for Service Class
Shares of any other Portfolio of the Fund. (See the list of Portfolios of the
UAM Funds at the end of this Prospectus.) Exchange requests should be made by
contacting the UAM Funds Service Center.
Any exchange will be based on the net asset value of the shares involved.
There is no sales commission or charge of any kind for an exchange. Before
making an exchange into a Portfolio, a shareholder should read its Prospectus
and consider the investment objectives of the Portfolio to be purchased. Call
the UAM Funds Service Center for a copy of the Prospectus for the Portfolio(s)
in which you
18
<PAGE>
are interested. Exchanges can only be made with Portfolios that are qualified
for sale in a shareholder's state of residence.
Exchange requests may be made either by mail or telephone. Telephone ex-
changes will be accepted only if the certificates for the shares to be ex-
changed have not been issued to the shareholder and if the registration of the
two accounts will be identical. Requests for exchanges received prior to 4 p.m.
(ET) will be processed as of the close of business on the same day. Requests
received after 4 p.m. will be processed on the next business day. The Board of
Trustees may limit the frequency and amount of exchanges permitted. For addi-
tional information regarding responsibility for the authenticity of telephoned
instructions, see "REDEMPTION OF SHARES -- BY TELEPHONE". An exchange into an-
other UAM Funds Portfolio is a sale of shares and may result in a gain or loss
for income tax purposes. The Fund may modify or terminate the exchange privi-
lege at any time.
SERVICE AND DISTRIBUTION PLANS
Under the Service Plan for Service Class Shares, adopted pursuant to Rule
12b-1 under the 1940 Act, the Fund may enter into service agreements with Serv-
ice Agents (broker-dealers or other financial institutions) who receive fees
with respect to the Fund's Service Class Shares owned by shareholders for whom
the Service Agent is the dealer or holder of record, or for whom the Service
Agent performs Servicing, as defined below. These fees are paid out of the as-
sets allocable to Service Class Shares to the Distributor or to the Service
Agents directly or through the Distributor. The Fund reimburses the Distributor
or the Service Agent for payments made at an annual rate of up to 0.25 of 1% of
the average daily value of Service Class Shares owned by clients of the Service
Agent during the period payments for Servicing are being made to it. Such pay-
ments are borne exclusively by the Service Class Shares. Each item for which a
payment may be made under the Service Plan constitutes personal service and/or
shareholder account maintenance and may constitute an expense of distributing
Fund shares as the SEC construes such term under Rule 12b-1. The fees payable
for servicing reflect actual expenses incurred up to the limits described here-
in.
Servicing may include assisting clients in changing dividend options, account
designations and addresses; performing subaccounting; establishing and main-
taining shareholder accounts and records; processing purchase and redemption
transactions; investing client cash account balances automatically in Service
Class Shares; providing periodic statements showing a client's account balance
and integrating such statements with those of other transactions and balances
in the client's other accounts serviced by the Service Agent; arranging for
bank wires; and such other services as the Fund may request, to the extent the
Service Agent is permitted by applicable statute, rule or regulation.
19
<PAGE>
The Glass-Steagall Act and other applicable laws prohibit federally chartered
or supervised banks from engaging in certain aspects of the business of issu-
ing, underwriting, selling and/or distributing securities. Accordingly, banks
are engaged to act as Service Agent only to perform administrative and share-
holder servicing functions, including transaction-related agency services for
their customers. If a bank is prohibited from acting as a service agent, alter-
native means for continuing the servicing of its shareholders would be sought
and the shareholder clients of the bank will remain Fund shareholders.
The Distributor promotes the distribution of the Service Class Shares in ac-
cordance with the terms of a Distribution Plan adopted pursuant to Rule 12b-1
under the 1940 Act. The Distribution Plan provides for the use of Fund assets
allocable to Service Class Shares to pay expenses of distributing such shares.
The Distribution Plan and Service Plan (the "Plans") were approved by the
Board, including a majority of the Trustees who are not "interested persons" of
the Fund as defined in the 1940 Act (and each of whom has no direct or indirect
financial interest in the Plans or any agreement related thereto, referred to
herein as the "12b-1 Trustees"). The Plans may be terminated at any time by the
vote of the Board or the 12b-1 Trustees, or by the vote of a majority of the
outstanding Service Class Shares of the Portfolio involved.
While the Plans continue in effect, the selection of the 12b-1 Trustees is
committed to the discretion of such persons then in office. The Plans provide
generally that the Portfolio may incur distribution and service costs under the
Plans which may not exceed in the aggregate 0.75% per annum of the Portfolio's
net assets. The Board has currently limited aggregate payments under the Plans
to 0.50% per annum of the Portfolio's net assets. The Service Class Shares of-
fered by this Prospectus currently are not making payments under the Distribu-
tion Plan. Upon implementation, the Distribution Plan would permit payments to
the Distributor, broker-dealers, other financial institutions, sales represent-
atives or other third parties who render promotional and distribution services,
for items such as advertising expenses, selling expenses, commissions or travel
reasonably intended to result in sales of Service Class Shares and for the
printing of prospectuses sent to prospective purchasers of Service Class Shares
of the Portfolio.
Although the Plans may be amended by the Board of Trustees, any changes in
the Plans which would materially increase the amounts authorized to be paid un-
der the Plans must be approved by shareholders of the Class involved. The total
amounts paid under the foregoing arrangements may not exceed the maximum limits
specified above, and the amounts and purposes of expenditures under the Plans
must be reported to the 12b-1 Trustees quarterly. The amounts allowable under
the Plans for each Class of Shares of the Portfolio are also limited under cer-
tain rules of the National Association of Securities Dealers, Inc.
20
<PAGE>
In addition to payments by the Fund under the Plans, the Distributor, United
Asset Management Corporation, the parent company of UAMSFI, and of the Adviser
or any of their affiliates, may, at its own expense, compensate a Service Agent
or other person for marketing, shareholder servicing, record-keeping and/or
other services performed with respect to the Fund, a Portfolio or any Class of
Shares of a Portfolio. The person making such payments may do so out of its
revenues, its profits or any other source available to it. Such services ar-
rangements, when in effect, are made generally available to all qualified serv-
ice providers. The Adviser may compensate its affiliated companies for refer-
ring investors to the Portfolio.
The Distributor, the Adviser and certain of their other affiliates also par-
ticipate, at the date of this Prospectus, in an arrangement with Smith Barney
Inc. ("Smith Barney") under which Smith Barney provides certain defined contri-
bution plan marketing and shareholder services and receives from such entities
an amount equal to up to 33.3% of the portion of the investment advisory fees
attributable to the invested assets of Smith Barney's eligible customer ac-
counts without regard to any expense limitation in addition to amounts payable
to all selling dealers. The Fund also compensates Smith Barney for services it
provides to certain defined contribution plan shareholders that are not other-
wise provided by UAMFSI.
VALUATION OF SHARES
The net asset value of the Portfolio is determined by dividing the value of
the Portfolio's assets attributable to the class , less any liabilities attrib-
utable to the class, by the number of shares outstanding attributable to the
class. The net asset value per share of the Portfolio is determined as of the
close of the NYSE on each day that the NYSE is open for business.
Bonds and other fixed income securities are valued according to the broadest
and most representative market, which will ordinarily be the over-the-counter
market. Bonds and other fixed income securities may be valued on the basis of
prices provided by a pricing service when such prices are believed to reflect
the fair market value of such securities.
Securities purchased with remaining maturities of 60 days or less are valued
at amortized cost when the Board of Trustees determines that amortized cost re-
flects fair value.
The value of other assets and securities for which no quotations are readily
available (including restricted securities) is determined in good faith at fair
value using methods determined by the Fund's Board of Trustees.
PERFORMANCE CALCULATIONS
The Portfolio measures performance by calculating yield and total return.
Both yield and total return figures are based on historical earnings and are
not intended to indicate future performance.
21
<PAGE>
Yield refers to the income generated by an investment in the Portfolio over a
given period of time, expressed as an annual percentage rate. Yields are calcu-
lated according to a standard that is required for all bond funds. As this dif-
fers from other accounting methods, the quoted yield may not equal the income
actually paid to shareholders.
Total return is the change in value of an investment in the Portfolio over a
given period, assuming reinvestment of any dividends and capital gains. A cumu-
lative or aggregate total return reflects actual performance over a stated pe-
riod of time. An average annual total return is a hypothetical rate of return
that, if achieved annually, would have produced the same cumulative total re-
turn if performance had been constant over the entire period.
Performance will be calculated separately for Institutional Class and Service
Class Shares. Dividends paid by the Portfolio with respect to Institutional
Class and Service Class Shares, to the extent any dividends are paid, will be
calculated in the same manner at the same time on the same day and will be in
the same amount, except that service fees, distribution charges and distribu-
tion charges relating to Service Class Shares will be borne exclusively by that
class.
The Portfolio's performance may be compared to data prepared by independent
services which monitor the performance of investment companies, data reported
in financial and industry publications, and various indices as further de-
scribed in the Portfolio's SAI. This information may also be included in sales
literature and advertising.
The Portfolio's Annual Report of Shareholders for the most recent fiscal year
end contains additional performance information that includes comparisons with
appropriate indices. The Annual Report is available without charge. Contact the
UAM Funds Service Center at the address or telephone number on the cover of
this Prospectus.
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
The Portfolio will normally distribute substantially all of its net invest-
ment income (for tax purposes) to shareholders in quarterly dividends. If any
net capital gains are realized, the Portfolio will normally distribute them an-
nually. All dividends and capital gains distributions will be automatically re-
invested in additional shares of the Portfolio unless the Fund is notified in
writing that the shareholder elects to receive distributions in cash.
FEDERAL TAXES
The Portfolio intends to qualify as a "regulated investment company" under
subchapter M of the Internal Revenue Code of 1986, as amended, for federal
22
<PAGE>
income tax purposes and to meet all other requirements that are necessary for
it (but not its shareholders) to be exempt from federal taxes on income and
gains paid to shareholders in the form of dividends. To do this, the Portfolio
must, among other things, distribute substantially all of its ordinary income
and net capital gains on an annual basis and maintain a portfolio of invest-
ments which satisfies certain diversification criteria.
Dividends paid by the Portfolio from net investment income, whether in cash
or reinvested in shares, are taxable to shareholders as ordinary income. Short-
term capital gains will be taxed as ordinary income. Long-term capital gains
distributions are taxed as long-term capital gains. Shareholders will be noti-
fied annually of dividend income earned for tax purposes.
Dividends declared in October, November and December to shareholders of rec-
ord in such a month will be treated as if they had been paid by the Fund and
received by the shareholders on December 31 of the same calendar year, provided
that the dividends are paid before February of the following year.
The Fund is required by Federal law to withhold 31% of reportable payments
paid to shareholders who have not complied with IRS regulations. In order to
avoid this withholding requirement, you must certify that your Social Security
or Taxpayer Identification Number you have provided is correct and that either
you are not currently subject to backup withholding or you are exempt from
backup withholding. This certification must be made on the Application or on a
separate form supplied by the Fund.
Dividends and interest received by the Portfolio may give rise to withholding
and other taxes imposed by foreign countries. These taxes reduce the Portfo-
lio's dividends but are included in the taxable income reported on your tax
statement if the Portfolio qualifies for this tax treatment and elects to pass
it through to you. Consult a tax adviser for more information regarding deduc-
tions and credits for foreign taxes.
INVESTMENT ADVISER
The Adviser is a registered investment adviser formed in 1979. Its business
offices are located at One McKinney Plaza, 3232 McKinney Avenue, 15th Floor,
Dallas, Texas 75204. It is a wholly-owned subsidiary of United Asset Management
Corporation ("UAM") and provides and offers investment management services to
corporate, public and Taft-Hartley employee benefit plans, foundations, endow-
ments, health care and other institutions and investors. The Adviser currently
has $18 billion in assets under management.
The Portfolio pays an annual fee in monthly installments to the Adviser for
advisory services. This fee is accrued daily and paid every month as a percent-
age of the average net assets in the Portfolio for that month. The percentage
fee on an
23
<PAGE>
annual basis is 0.35%. The Adviser has agreed to waive a portion of its advi-
sory fees and to assume certain operating expenses in order to keep the Portfo-
lio's Service Class Shares total operating expenses from exceeding 0.80% of av-
erage daily net assets through December 31, 1997. The Adviser will not be reim-
bursed by the Fund for any advisory fees which are waived or expenses which the
Adviser may bear on behalf of the Fund for a given fiscal year.
The Adviser may compensate its affiliated companies for referring investors
to the Portfolio. The Adviser and its parent company may also make payments to
unaffiliated brokers who perform distribution, marketing, shareholder and other
services with respect to the Portfolio.
The investment professionals at the Adviser responsible for the day-to-day
management of the Portfolio and their qualifications are as follows:
JOHN S. WILLIAMS -- Fixed Income Principal and the first fixed income portfo-
lio manager at the Adviser in 1983. Mr. Williams has also managed balanced and
municipal portfolios during his 20 year investment career. Prior to joining the
Adviser, he was responsible for the management of all fixed income assets at
Southland Trust, Dallas, Texas, and prior to that was a portfolio manager and
securities analyst at InterFirst Bank Dallas Trust Department. Mr. Williams has
served on the Advisory Committee for the Texas Teachers Retirement System and
is an active member in the Dallas Investment Analysts Society. He currently is
a Director of United Asset Management Corporation. Mr. Williams is a Chartered
Financial Analyst, earning his MBA in 1976 and BBA in 1975 from Texas Christian
University.
DAVID R. HARDIN -- Fixed Income Principal and portfolio manager. Prior to
joining the Adviser in 1987, Mr. Hardin was the Vice President and Director of
the Fixed Income Group of RepublicBank Dallas Trust Department. In that posi-
tion, he was responsible for the management of all taxable and tax-exempt fixed
income assets of the Trust Division, including all separately managed accounts,
collective investment fund products, and the creation of and management of an
SEC-registered mutual fund. Prior to attaining the Director's position, Mr.
Hardin was a taxable portfolio manager and also served as the credit analyst
for the Trust Division. He started his investment career as a private placement
credit analyst while employed by American General Insurance Co. in Houston in
1976. Mr. Hardin received an M.Sc. from The London School of Economics in 1975
and a BBA from Texas Christian University in 1973.
STEPHEN M. MILANO -- Fixed Income Principal and portfolio manager. Prior to
joining the Adviser in 1990, Mr. Milano was employed at Salomon Brothers, Inc.
in New York as a Vice President of the Fixed Income Strategy Group. In that
role he was a specialist in developing portfolio structure and strategies for
24
<PAGE>
active management of taxable assets. While at Salomon he also served as Product
Sales Manager for International Fixed Income Securities and as a Mortgage and
Government Specialist. Prior to joining Salomon, Mr. Milano was employed as a
portfolio manager and trader at Equitable Life Assurance Society. He received
his BS in Economics with a concentration in Finance from the Wharton School of
the University of Pennsylvania in 1980.
J. SCOTT MCDONALD -- Fixed Income Portfolio Analyst/Trader. Mr. McDonald
joined the Adviser in 1995 to serve as a security and portfolio specialist for
the Fixed Income Group. In addition to security and portfolio analyst, he is
responsible for systems analytics used in the evaluation of effective/option
adjusted yield measurements for all securities and portfolios. He also serves
as compliance monitor of all fixed income portfolios to ensure commonality of
structure and diversification. Mr. McDonald previously served as the Senior
Vice President and Portfolio Manager at Life Partners Group, Inc. in Dallas.
While with Life Partners, he was responsible for implementing investment strat-
egy for $3 billion in assets. Additionally, he has been employed by Texas Com-
merce Bank Houston as a Credit Supervisor and Lending Officer. He received his
MBA in 1991 from the University of Texas at Austin and his BBA from Southern
Methodist University in 1986.
DEBORAH J. ANDERSON -- Senior Portfolio Assistant. Ms. Anderson is responsi-
ble for all administrative staff and their duties associated with the fixed in-
come product management, including communication/liaison with all clients, cus-
todial banks, and brokerage relationships. She supervises all operational as-
pects of fixed income security trading and works extensively with reporting re-
quirements for all clients and regulatory agencies. Prior to joining the Ad-
viser in 1988, Ms. Anderson served as a Trust Officer with Trust Company of
Texas and its predecessor, Southland Trust Co. She received a BBA in Accounting
from the University of Texas at Arlington in 1974.
ADVISER'S HISTORICAL PERFORMANCE
Below are certain performance data provided by the Adviser pertaining to the
composite of separately managed accounts of the Adviser that are managed with
substantially similar (although not necessarily identical) objectives, policies
and strategies as those of the Portfolio. The investment returns of the Portfo-
lio may differ from those of the separately managed accounts because such sepa-
rately managed accounts may have fees and expenses that differ from those of
the Portfolio. Further, the separately managed accounts are not subject to in-
vestment limitations, diversification requirements and other restrictions may
have lowered the returns for separately managed accounts. The results presented
are not intended to predict or suggest the return to be experienced by the
Portfolio or the return an investor might achieve by investing in the Portfo-
lio.
25
<PAGE>
BARROW, HANLEY, MEWHINNEY & STRAUSS, INC -- BOND ACCOUNT
(PERCENTAGE RETURNS OF NET OF MANAGEMENT FEES)
<TABLE>
<CAPTION>
BARROW, HANLEY, MEWHINNEY & LEHMAN BROTHERS AGGREGATE
CALENDAR YEARS STRAUSS, INC. BOND INDEX
-------------- --------------------------- -------------------------
<S> <C> <C>
1987.................... 3.15% 2.76%
1988.................... 7.30% 7.89%
1989.................... 15.01% 14.53%
1990.................... 9.18% 8.96%
1991.................... 16.54% 16.00%
1992.................... 7.56% 7.40%
1993.................... 10.56% 9.75%
1994.................... (3.44)% (2.92)%
1995.................... 17.64% 18.46%
9 Months ended 9/30/96.. 0.56% 0.61%
Annualized.............. 8.42% 8.37%
Cumulative.............. 226.66% 218.91%
Nine-Year Mean (1/1/87-
12/31/95)............. 9.28% 9.20%
Value of $1 invested
during (1/1/87-
9/30/96).............. $ 3.27 $ 3.19
</TABLE>
Notes:
1. The annualized return is calculated from monthly data, allowing for com-
pounding. The formula used is in accordance with the acceptable methods
set forth by the Association for Investment Management Research, the Bank
Administration Institute, and the Investment Counsel Association of Ameri-
ca. Market Value of the account was the sum of the account's total assets,
including cash, cash equivalents, short-term investments, and securities
valued at current market prices.
2. The cumulative return means that $1 invested in the account on January 1,
1979 had grown to $15.88 by September 30, 1996.
3. The 9-year mean is the arithmetic average of the annual returns for the
calendar years listed.
4. The Lehman Brothers Aggregate Bond Index is an unmanaged index, which as-
sumes reinvestment of dividends and is generally considered representative
of securities similar to those invested in by the Adviser for the purpose
of the composite performance numbers set forth above.
5. The Adviser's average annual management fee over the period shown (1/1/87-
9/30/96) was 0.33% or 33 basis points. During the period, fees on the Ad-
viser's individual accounts ranged from 0.25% to 0.45% (25 basis points to
45 basis points). Net returns to investors vary depending on the manage-
ment fee.
6. The S&P 500 is an unmanaged index which assumes reinvestment of dividends
and is generally considered representative of securities similar to those
invested in by the Adviser for the purpose of the composite performance
numbers set forth above.
7. The Adviser's average annual management fee over the period shown (1/1/79-
9/30/96) was 0.40% or 40 basis points. During the period, fees on the Ad-
viser's individual accounts ranged from 0.32% to 1.00% (32 basis points to
100 basis points). Net returns to investors vary depending on the manage-
ment fee.
26
<PAGE>
ADMINISTRATIVE SERVICES
UAM Fund Services, Inc. ("UAMFSI"), a wholly-owned subsidiary of United Asset
Management Corporation, is responsible for performing and overseeing adminis-
trative, fund accounting, dividend disbursing and transfer agent services pro-
vided to the Fund and its Portfolios. UAMFSI's principal office is located at
211 Congress Street, Boston, MA 02110. UAMFSI has subcontracted some of these
services to Chase Global Funds Services Company ("CGFSC"), an affiliate of The
Chase Manhattan Bank, by a Mutual Funds Service Agreement dated April 15, 1996.
CGFSC is located at 73 Tremont Street, Boston, MA 02108.
Each Portfolio pays UAMFSI a two part monthly fee: a Portfolio-specific fee
which is retained by UAMFSI and a sub-administration fee which UAMFSI in turn
pays to CGFSC. The following Portfolio-specific fees are calculated from the
aggregate net assets of each Portfolio:
<TABLE>
<CAPTION>
RATE
----
<S> <C>
BHM&S Total Return Bond Portfolio...................................... .04%
</TABLE>
CGFSC's monthly fee for its services is calculated on an annualized basis as
follows:
0.19 of 1% of the first $200 million of combined Fund assets;
0.11 of 1% of the next $800 million of combined Fund assets;
0.07 of 1% of combined Fund assets in excess of $1 billion but less than
$3 billion;
0.05 of 1% of combined Fund assets in excess of $3 billion.
Fees are allocated among the Portfolios on the basis of their relative assets
and are subject to a graduated minimum fee schedule per Portfolio, which starts
at $2,000 per month and increases to $70,000 annually after two years. If a
separate class of shares is added to a Portfolio, its minimum annual fee in-
creases by $20,000.
DISTRIBUTOR
UAM Fund Distributors, Inc., a wholly-owned subsidiary of United Asset Man-
agement with its principal office located at 211 Congress Street, Boston, Mas-
sachusetts 02110, distributes the shares of the Fund. Under the Fund's Distri-
bution Agreement (the "Agreement"), the Distributor, as agent of the Fund,
agrees to use its best efforts as sole distributor of the Fund's shares. The
Distributor does not receive any fee or other compensation under the Agreement
with respect to this Portfolio (except as described under "Service and Distri-
bution Plans" above). The Agreement continues in effect as long as it is ap-
proved at least annually by the Fund's Board of Trustees. Those approving the
Agreement include a majority of Trustees who are neither parties to the Agree-
ment nor interested persons of any such party. This Agreement provides that the
Fund will bear the costs of the registration of its shares with the SEC and
various states and the printing of its prospectuses, SAIs and reports to share-
holders.
27
<PAGE>
PORTFOLIO TRANSACTIONS
The Advisory Agreements for each of the Fund's Portfolios authorize the Ad-
viser to select the brokers or dealers that will execute the purchases and
sales of investment securities for each Portfolio. The Agreements direct the
Adviser to use its best efforts to obtain the best available price and most fa-
vorable execution for all transactions of the Portfolios. If consistent with
the interests of the Portfolios, the Adviser may select brokers on the basis of
research, statistical and pricing services these brokers provide to the Portfo-
lios in addition to required Adviser services. Such brokers may be paid a
higher commission than that which another qualified broker would have charged
for effecting the same transaction, provided that such commissions are paid in
compliance with the Securities Exchange Act of 1934, as amended, and that the
Adviser determines in good faith that the commission is reasonable in terms ei-
ther of the transaction or the overall responsibility of the Adviser to the
Portfolios and the Adviser's other clients. Although not a typical practice,
the Adviser may place portfolio orders with qualified broker-dealers who refer
clients to the Adviser.
If a purchase or sale of securities is consistent with the investment poli-
cies of a Portfolio and one or more other clients served by the Adviser is con-
sidering a purchase at or about the same time, transactions in such securities
will be allocated among the Portfolio and clients in a manner deemed fair and
reasonable by the Adviser. Although there is no specified formula for allocat-
ing such transactions, allocations are subject to periodic review by the Fund's
Trustees.
GENERAL INFORMATION
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Fund was organized as a Delaware business trust on May 18, 1994 under the
name "The Regis Fund II." On October 31, 1995, the name of the Fund was changed
to "UAM Funds Trust." The Fund's Agreement and Declaration of Trust permits the
Fund to issue an unlimited number of shares of beneficial interest, without par
value. The Trustees have the power to designate one or more series ("Portfo-
lios") or classes of shares of beneficial interest without further action by
shareholders.
At its discretion, the Board of Trustees may create additional Portfolios and
classes of shares. The shares of each Portfolio are fully paid and nonassess-
able, and have no preference as to conversion, exchange, dividends, retirement
or other features and no pre-emptive rights. They have noncumulative voting
rights, which means that holders of more than 50% of shares voting for the
election of Trustees can elect 100% of the Trustees. A shareholder is entitled
to one vote for each full share held (and a fractional vote for each fractional
share held), then standing in his or her name on the books of the Fund.
28
<PAGE>
As of December 6, 1996, Hartnat & Co., Boston, MA held of record 28% and Sa-
rah Campbell Blaffey Foundation held 27% of the outstanding shares of the Port-
folio's Institutional Class Shares and Hartnat & Co. held 58.8% of the out-
standing shares of the Portfolio's Institutional Service Class Shares for which
ownership is disclaimed or presumed disclaimed. The persons or organizations
owning 25% or more of the outstanding shares of the Portfolio may be presumed
to "control" (as that term is defined in the 1940 Act) the Portfolio. As a re-
sult, these persons or organizations could have the ability to vote a majority
of the shares of the Portfolio on any matter requiring the approval of share-
holders of such Portfolio.
Both Institutional Class and Service Class Shares represent an interest in
the same assets of a Portfolio. Service Class Shares bear certain expenses re-
lated to shareholder servicing and may bear expenses related to distribution.
Service Class Shares have exclusive voting rights with respect to matters re-
lating to such distribution expenditures. Information about the Institutional
Class Shares of the Portfolio is available upon request by contacting the UAM
Funds Service Center.
Annual meetings will not be held except as required by the 1940 Act and other
applicable laws. The Fund has undertaken that its Trustees will call a meeting
of shareholders if such a meeting is requested in writing by the holders of not
less than 10% of the outstanding shares of the Fund. The Fund will assist
shareholder communications in such matters.
CUSTODIAN
The Chase Manhattan Bank serves as custodian of the Fund's assets.
ACCOUNTANTS
Price Waterhouse LLP acts as the independent accountants for the Fund.
REPORTS
Investors will receive unaudited semi-annual financial statements and annual
financial statements audited by Price Waterhouse LLP.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be made by contacting the UAM Funds Service Center
at the address or telephone number listed on the cover of this Prospectus.
LITIGATION
The Fund is not involved in any litigation.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS NOT CONTAINED IN THIS PROSPECTUS, OR IN THE PORTFOLIO'S STATEMENT OF
ADDITIONAL INFORMATION, IN CONNECTION WITH THE OFFERING MADE BY THIS PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR ITS REPRESENTATIONS MUST NOT BE RE-
LIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES NOT CON-
STITUTE AN OFFERING BY THE FUND IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY
NOT BE LAWFULLY MADE.
29
<PAGE>
UAM FUNDS -- SERVICE CLASS SHARES
BHM&S Total Return Bond Portfolio
FPA Crescent Fund
MJI International Equity Portfolio
Newbold's Equity Portfolio
NWQ Balanced Portfolio
NWQ Value Equity Portfolio
Sirach Growth Portfolio
Sirach Special Equity Portfolio
Sirach Strategic Balanced Portfolio
Sirach Equity Portfolio
Sterling Partners' Balanced Portfolio
Sterling Partners' Equity Portfolio
Sterling Partners' Short-Term
Fixed Income Portfolio
TJ Core Equity Portfolio
30
<PAGE>
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
1-800-638-7983
Investment Adviser
Barrow, Hanley, Mewhinney & Strauss, Inc.
One McKinney Plaza,
3232 McKinney Avenue,
15th Floor, Dallas, Texas 75204
Distributor
UAM FUND DISTRIBUTORS, INC.
211 Congress Street
Boston, MA 02110
PROSPECTUS
January 3, 1997
<PAGE>
[LOGO OF UAM FUNDS APPEARS HERE]
BHM&S Total Return
Bond Portfolio
Institutional
Class Shares
January 3, 1997
P R O S P E C T U S
<PAGE>
UAM FUNDS
UAM FUNDS SERVICE CENTER
C/O CHASE GLOBAL FUNDS SERVICES COMPANY
P.O. BOX 2798
BOSTON, MA 02208-2798
1-800-638-7983
- -------------------------------------------------------------------------------
BHM&S TOTAL RETURN BOND PORTFOLIO
INSTITUTIONAL CLASS SHARES
INVESTMENT ADVISER: BARROW, HANLEY, MEWHINNEY & STRAUSS, INC.
- -------------------------------------------------------------------------------
PROSPECTUS -- JANUARY 3, 1997
UAM Funds Trust (the "Fund") is an open-end investment company known as a
"mutual fund." The Fund consists of multiple series (known as "Portfolios"),
each of which has different investment objectives and policies. The BHM&S To-
tal Return Bond Portfolio currently offers two separate classes of shares: In-
stitutional Class Shares and Institutional Service Class Shares ("Service
Class Shares"). Shares of each class represent equal, pro-rata interests in a
Portfolio and accrue dividends in the same manner except that Service Class
Shares bear fees payable by the class (at the rate of .25% per annum) to fi-
nancial institutions for services they provide to the owners of such shares.
The securities offered in this Prospectus are Institutional Class Shares of
one diversified, no-load Portfolio of the Fund managed by Barrow, Hanley,
Mewhinney & Strauss, Inc.
BHM&S TOTAL RETURN BOND PORTFOLIO. BHM&S Total Return Bond Portfolio (the
"Portfolio") seeks to provide maximum long-term total return consistent with
reasonable risk to principal by investing in investment grade fixed income se-
curities of varying maturities. Income return is expected to be a predominant
portion of the Portfolio's total return. Any capital return on the Portfolio
is dependent upon, among other factors, interest rate changes as well as the
average maturity and duration of the Portfolio. The Adviser believes that by
investing in undervalued securities with above average effective yields and
capital appreciation potential, the Portfolio will generate superior returns
over the long term while minimizing volatility and, therefore, downside risk.
There can be no assurance that the Portfolio will achieve its stated objec-
tive.
Keep this Prospectus for future reference. It contains information that you
should know before you invest. A "Statement of Additional Information" (SAI)
containing additional information about the Fund has been filed with the Secu-
rities and Exchange Commission. The SAI is dated January 3, 1997 and has been
incorporated by reference into this Prospectus. For a free copy of the SAI
contact the UAM Funds Service Center at the address or telephone number above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECU-RITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CON-TRARY IS A CRIMINAL
OFFENSE.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
Fund Expenses............................................................... 1
Prospectus Summary.......................................................... 3
Risk Factors................................................................ 4
Financial Highlights........................................................ 5
Investment Objective........................................................ 6
Investment Policies......................................................... 6
Other Investment Policies................................................... 7
Investment Limitations...................................................... 12
Purchase of Shares.......................................................... 13
Redemption of Shares........................................................ 16
Shareholder Services........................................................ 18
Valuation of Shares......................................................... 18
Performance Calculations.................................................... 19
Dividends, Capital Gains Distributions and Taxes............................ 20
Investment Adviser.......................................................... 21
Adviser's Historical Performance............................................ 23
Administrative Services..................................................... 24
Distributor................................................................. 25
Portfolio Transactions...................................................... 25
General Information......................................................... 26
UAM Funds -- Institutional Class Shares..................................... 28
</TABLE>
<PAGE>
FUND EXPENSES
The following table illustrates expenses and fees that a shareholder of the
Portfolio's Institutional Class Shares would incur. Transaction fees may be
charged if a broker-dealer or other financial intermediary deals with the Fund
on your behalf. (See "PURCHASE OF SHARES.")
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<CAPTION>
INSTITUTIONAL
CLASS SHARES
-------------
<S> <C>
Sales Load Imposed on Purchases................................ NONE
Sales Load Imposed on Reinvested Dividends..................... NONE
Deferred Sales Load............................................ NONE
Redemption Fees................................................ NONE
Exchange Fees.................................................. NONE
</TABLE>
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF NET ASSETS)
<TABLE>
<CAPTION>
INSTITUTIONAL
CLASS SHARES
-------------
<S> <C>
Investment Advisory Fees..................................... 0.35 %
Administrative Fees.......................................... 1.11 %
12b-1 Fees................................................... NONE
Other Expenses............................................... 0.64 %
Advisory Fees Waived and Expenses Assumed.................... (1.55)%
-----
Total Operating Expenses (After Fee Waiver and Expenses
Assumed)................................................... 0.55 %*
=====
</TABLE>
- -----------
* The Adviser has voluntarily agreed to waive all or a portion of its advisory
fees and to assume operating expenses to keep the Portfolio's Institutional
Class Shares' total annual operating expenses (excluding interest, taxes and
extraordinary expenses) from exceeding 0.55% of average daily net assets
through December 31, 1997. The figures above include the effect of expense
offsets. If expense offsets were excluded, annualized Total Operating Ex-
penses for the six month period ended October 31, 1996 would not differ.
(See "FINANCIAL HIGHLIGHTS.") It is estimated that, if the Adviser did not
waive fees and assume expenses, the total annual operating expenses of the
Portfolio's Institutional Class Shares would be 2.10% of average daily net
assets. The Fund will not reimburse the Adviser for any advisory fees that
are waived or Portfolio expenses that the Adviser may bear on behalf of the
Portfolio for a given fiscal year.
The table above shows various fees and expenses an investor may bear di-
rectly or indirectly. The expenses and fees set forth above are estimates for
the fiscal year and are annualized based on the Portfolio's Institutional
Class Shares' operations during the semi-annual period ended October 31, 1996.
1
<PAGE>
For purposes of calculating the estimated fees and expenses set forth above,
it is assumed that the Portfolio's average daily net assets will be $10 mil-
lion.
The following example illustrates expenses a shareholder would pay on a
$1,000 investment over various time periods assuming (1) a 5% annual rate of
return and (2) redemption at the end of each time period. The Portfolio
charges no redemption fees of any kind.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Institutional Class Shares................... $ 6 $18 $31 $69
</TABLE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EX-
PENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE
SHOWN ABOVE.
2
<PAGE>
PROSPECTUS SUMMARY
INVESTMENT ADVISER
Barrow, Hanley, Mewhinney & Strauss, Inc. (the "Adviser") is a registered
investment adviser specializing in the active management of stock, bond and
balanced portfolios for institutional, tax-exempt clients. Founded in 1979,
the firm is a wholly-owned subsidiary of United Asset Management Corporation.
The Adviser currently has $18 billion in assets under management. (See "IN-
VESTMENT ADVISER.")
PURCHASE OF SHARES
Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the
"Distributor") to investors at net asset value without a sales commission.
Share purchases may be made by sending investments directly to the Fund. The
minimum initial investment is $2,500. The minimum for subsequent investments
is $100. The minimum initial investment for IRA accounts is $500. The minimum
initial investment for spousal IRA accounts is $250. Certain exceptions to the
initial or minimum investment amounts may be made by the officers of the Fund
(See "PURCHASE OF SHARES.")
DIVIDENDS AND DISTRIBUTIONS
The Portfolio will normally distribute substantially all of its net invest-
ment income in quarterly dividends. The Portfolio will distribute any realized
net capital gains annually. Distributions will be reinvested in the Portfo-
lio's shares automatically unless an investor elects to receive cash distribu-
tions. (See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES.")
REDEMPTION OF SHARES
Shares of the Portfolio may be redeemed at any time, without cost, at the
net asset value of the Portfolio next determined after receipt of the redemp-
tion request. The redemption price may be more or less than the purchase
price. (See REDEMPTION OF SHARES.")
ADMINISTRATIVE SERVICES
UAM Fund Services, Inc. ("UAMFSI"), a wholly-owned subsidiary of United As-
set Management Corporation, is responsible for performing and overseeing ad-
ministration, fund accounting, dividend disbursing and transfer agency serv-
ices provided to the Fund and its Portfolios by third-party service providers.
(See "ADMINISTRATIVE SERVICES").
3
<PAGE>
RISK FACTORS
Prospective investors should consider the following: (1) The fixed income
securities held by the Portfolio will be affected by general changes in inter-
est rates resulting in increases or decreases in the value of the securities.
The value of fixed income securities can be expected to vary inversely to the
changes in prevailing interest rates, i.e., as interest rates decline, the
market value of fixed income securities tends to increase and vice versa; (2)
The Portfolio may purchase securities on a when-issued basis which do not earn
interest until issued and may decline or appreciate in market value prior to
their delivery to the Portfolio; (3) The Portfolio will invest in investment
grade debt securities, but reserves the right to hold securities that have
been downgraded. Adverse economic and corporate changes and changes in inter-
est rates may have a greater impact on issuers of lower rated debt securities
which the Portfolio may hold, which may lead to greater price volatility. Al-
so, lower rated securities may be more difficult to value accurately or sell
in the secondary market; (4) The Portfolio may invest in repurchase agreements
which entail a risk of loss should the seller default on its transaction; (5)
The Portfolio may lend its investment securities, which entails a risk of loss
should a borrower fail financially. (See "OTHER INVESTMENT POLICIES.")
4
<PAGE>
FINANCIAL HIGHLIGHTS
The following table provides selected per share information for a share out-
standing throughout the periods presented for the Portfolio's Institutional
Class Shares. This table is part of the Portfolio's Financial Statements in-
cluded in the Portfolio's 1996 Annual Report to Shareholders and the 1996
Semi-Annual Report to Shareholders. The Reports are incorporated into the
Portfolio's SAI. The Portfolio's Financial Statements for the period ended
April 30, 1996 have been audited by Price Waterhouse LLP whose unqualified
opinion on the Financial Statements for the period ended April 30, 1996 is
also incorporated into the SAI. Please read the following information in con-
junction with the Portfolio's 1996 Annual Report to Shareholders and the 1996
Semi-Annual Report to Shareholders.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
NOVEMBER 1, 1995** OCTOBER 31,
TO 1996
APRIL 30, 1996++ (UNAUDITED)
------------------- -----------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD........... $10.00 $ 9.85
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income........................ 0.28 0.18
Net Realized and Unrealized Gain (Loss) on
Investments................................ (0.27) 0.31
------ -------
0.01 0.49
------ -------
DISTRIBUTIONS
Net Investment Income........................ (0.16) (0.25)
------ -------
NET ASSET VALUE, END OF PERIOD................. $ 9.85 $ 10.09
====== =======
TOTAL RETURN+.................................. 0.08% 5.06%
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands)........ $2,445 $12,330
Ratio of Expenses to Average Net Assets+..... 0.61%* 0.55%*
Ratio of Net Investment Income to Average Net
Assets+.................................... 5.53%* 4.31%*
Portfolio Turnover Rate...................... 55% 111%
Voluntary Waived Fees and Expenses Assumed by
the Adviser Per Share...................... $ 0.23 $ 0.04
Ratio of Expenses to Average Net Assets In-
cluding Expenses Offsets................... 0.55%* 0.55%*
</TABLE>
- -----------
* Annualized
** Commencement of Operations.
+ 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.
5
<PAGE>
INVESTMENT OBJECTIVE
The objective of the Portfolio is to provide maximum long-term total return
consistent with reasonable risk to principal by investing in investment grade
fixed income securities of varying maturities. Income return is expected to be
a predominant portion of the Portfolio's total return. Any capital return on
the Portfolio is dependent upon, among other factors, interest rate changes as
well as the average maturity and duration of the Portfolio. The Adviser be-
lieves that by investing in undervalued securities with above average effec-
tive yields and capital appreciation potential, the Portfolio will generate
superior returns over the long term while minimizing volatility and, there-
fore, downside risk.
INVESTMENT POLICIES
The Portfolio seeks to achieve its objective by investing at least 90% of
its total assets in a diversified portfolio of the following dollar-denomi-
nated investment grade issues of varying maturities: U.S. Treasuries and Agen-
cies; zero coupon obligations; mortgage-backed securities; asset-backed secu-
rities; corporate bonds; municipal bonds; and domestic, Yankeedollar and Euro-
dollar bonds (See "OTHER INVESTMENT POLICIES"). These issues may have fixed,
variable or floating rates of interest. As a matter of policy, the Adviser
does not intend to invest in or utilize futures, options or other complex de-
rivative instruments or securities.
The Adviser expects to actively manage the Portfolio in order to meet the
investment objective. To produce favorable returns, the Adviser will invest in
securities that it believes to be undervalued, generating an effective yield
advantage versus the market. To control the volatility of returns, the Portfo-
lio will exhibit a high current yield, a high quality and a conservative matu-
rity structure.
The Adviser's decision process will focus on security selection, sector con-
centration and yield curve positioning. The Adviser will not engage in eco-
nomic forecasts in an attempt to "time the market" since it believes that
there are too many economic and political variables on a domestic and interna-
tional basis to do so successfully on a consistent basis. Therefore, the Port-
folio will maintain a conservative maturity structure, with securities being
diversified along the yield curve. The Portfolio's average weighted maturity
will generally be ten years or less, with the average weighted duration compa-
rable to that of the Salomon Brothers' Broad Investment Grade Index which is
approximately five years. Duration compares interest rate risk between securi-
ties with different coupons and different maturities, summarizing in a single
number the price sensitivity of a bond--how a bond's maturity and coupon rate
affect its exposure to interest rate risk. Duration involves the application
of several principles: as the maturity of a bond increases, duration increas-
es; as the coupon of a bond increases, duration decreases; generally, the
lower the coupon payment, the higher the duration; and duration decreases as
the
6
<PAGE>
frequency of the coupon payment increases. Generally, 10% or less of the Port-
folio's assets will be invested in various short-term investments. (See
"SHORT-TERM INVESTMENTS").
The Adviser's security selection process begins by analyzing a bond's yield
to maturity premium (or spread) versus the most recently issued U.S. Treasury
of similar maturity. Having identified bonds with an above-average premium,
the Adviser will then evaluate factors that could influence the bond's future
premium (i.e., credit quality, security structure, supply/demand relation-
ships, etc.). The objective of this process is to identify those issues whose
yield premium will compress or narrow over a wide range of potential interest
rate change, supporting superior long term performance. Furthermore, the Ad-
viser will concentrate the Portfolio's holdings in industry sectors and matu-
rity ranges that it believes are undervalued while seeking a prudent level of
diversification.
The Portfolio will invest in investment grade bonds which have one of the
four highest rating categories (i.e. Aaa, Aa, A or Baa by Moody's Investors
Service, Inc. ("Moody's) or AAA, AA, A or BBB by Standard & Poor's Corporation
("S&P")) at the time of purchase. Bonds rated Baa or BBB have speculative
characteristics and may be more sensitive to changes in the economy and the
financial condition of issuers than higher rated bonds. The Adviser also re-
serves the right to retain securities which are downgraded by one or both of
the rating agencies if, in the Adviser's judgment, retention of the securities
is warranted. The Portfolio's SAI contains a more detailed description of bond
ratings.
OTHER INVESTMENT POLICIES
SHORT-TERM INVESTMENTS
In order to earn a return on uninvested assets, meet anticipated redemp-
tions, or for temporary defensive purposes, the Portfolio may invest a portion
of its assets in domestic and foreign money market instruments including cer-
tificates of deposit, bankers' acceptances, time deposits, U.S. Government ob-
ligations, U.S. Government agency securities, short-term corporate debt secu-
rities, and commercial paper rated A-1 or A-2 by Standard & Poor's Corporation
or Prime-1 or Prime-2 by Moody's Investors Service, Inc. or if unrated, deter-
mined by the Adviser to be of comparable quality.
Time deposits maturing in more than seven days will not be purchased by the
Portfolio, and time deposits maturing from two business days through seven
calendar days will not exceed 10% of the total assets of the Portfolio. The
Portfolio will not invest in any security issued by a commercial bank unless
(i) the bank has total assets of at least $1 billion, or the equivalent in
other currencies, (ii) in the case of U.S. banks, it is a member of the Fed-
eral Deposit Insurance Corporation, and (iii) in the case of foreign branches
of U.S. banks, the security is, in the opinion of the Adviser, of an invest-
ment quality comparable with other debt securities which may be purchased by
the Portfolio.
7
<PAGE>
The Fund has received permission from the Securities and Exchange Commission
(the "SEC") to deposit the daily uninvested cash balances of the Fund's Portfo-
lios, as well as cash for investment purposes, into one or more joint accounts
and to invest the daily balance of the joint accounts in the following short-
term investments: fully collateralized repurchase agreements, interest-bearing
or discounted commercial paper including dollar-denominated commercial paper of
foreign issuers, and any other short-term money market instruments including
variable rate demand notes and tax-exempt money instruments. By entering into
these investments on a joint basis, it is expected that a Portfolio may earn a
higher rate of return on investments relative to what it could earn individual-
ly.
The Fund has received permission from the SEC for each of its Portfolios to
invest, for cash management purposes, the greater of 5% of its total assets or
$2.5 million in the Fund's DSI Money Market Portfolio. (See "INVESTMENT COMPA-
NIES.")
REPURCHASE AGREEMENTS
The Portfolio may invest in repurchase agreements collateralized by U.S. Gov-
ernment securities, certificates of deposit, and certain bankers' acceptances
and other securities outlined above under "Short-Term Investments." In a repur-
chase agreement, the Portfolio buys a security and simultaneously commits to
sell that security back at an agreed upon price plus an agreed upon market rate
of interest. Under a repurchase agreement, the seller is also required to main-
tain the value of securities subject to the agreement at not less than 100% of
the repurchase price. The value of the securities purchased will be evaluated
daily, and the Adviser will, if necessary, require the seller to maintain addi-
tional securities to ensure that the value is in compliance with the previous
sentence. The use of repurchase agreements involves certain risks. For example,
a default by the seller of the agreement may cause the Portfolio to experience
a loss or delay in the liquidation of the collateral securing the repurchase
agreement. The Portfolio might also incur disposition costs in liquidating the
collateral. While the Fund's management acknowledges these risks, it is ex-
pected that they can be controlled through stringent security selection crite-
ria and careful monitoring procedures. The Fund has received permission from
the SEC to pool daily uninvested cash balances of the Fund's Portfolios in or-
der to invest in repurchase agreements on a joint basis. By entering into joint
repurchase agreements, the Portfolio may incur lower transactions costs and
earn higher rates of interest on joint repurchase agreements. The Portfolio's
contribution would determine its return from a joint repurchase agreement. (See
"SHORT TERM INVESTMENTS.")
LENDING OF SECURITIES
The Portfolio may lend its investment securities to qualified institutional
investors as a means of earning income. The Portfolio will not loan securities
to the extent that greater than one-third of its assets at fair market value
would be committed to loans. During the term of a loan, the Portfolio is sub-
ject to a gain or loss
8
<PAGE>
depending on any increase or decrease in the market price of the securities
loaned. Lending of securities is subject to review by the Fund's Board of
Trustees. All relevant facts and circumstances, including the creditworthiness
of the broker, dealer or institution, will be considered in making decisions
about securities lending.
An investment company may pay reasonable negotiated fees in connection with
loaned securities so long as such fees are set forth in a written contract and
approved by its Board of Trustees. The Portfolio will continue to retain any
voting rights with respect to loaned securities. If a material event occurs af-
fecting an investment on loan, the loan must be called and the securities vot-
ed.
WHEN-ISSUED, FORWARD DELIVERY AND DELAYED SETTLEMENT SECURITIES
The Portfolio may purchase and sell securities on a "when-issued," "delayed
settlement," or "forward delivery" basis. "When-issued" or "forward delivery"
refers to securities whose terms and indenture are available, and for which a
market exists, but which are not available for immediate delivery. When-issued
and forward delivery transactions may be expected to occur a month or more be-
fore delivery is due. Delayed settlement is a term used to describe settlement
of a securities transaction in the secondary market which will occur sometime
in the future. No payment or delivery is made by the Portfolio until it re-
ceives payment or delivery from the other party to any of the above transac-
tions. It is possible that the market price of the securities at the time of
delivery may be higher or lower than the purchase price. The Portfolio will
maintain a separate account of cash or liquid securities at least equal to the
value of purchase commitments until payment is made. Typically, no income ac-
crues on securities purchased on a delayed delivery basis prior to the time de-
livery is made although the Portfolio may earn income on securities it has de-
posited in a segregated account.
The Portfolio may engage in these types of purchases in order to buy securi-
ties that fit with its investment objectives at attractive prices -- not to in-
crease its investment leverage.
PORTFOLIO TURNOVER
Portfolio turnover is not anticipated to exceed 150%. In addition to Portfo-
lio trading costs, higher rates of portfolio turnover may result in the reali-
zation of capital gains. (See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAX-
ES" for more information on taxation). The Portfolio will not normally engage
in short-term trading, but reserves the right to do so. The table set forth in
"Financial Highlights" presents the Portfolio's historical portfolio turnover
rates.
INVESTMENT COMPANIES
The Portfolio reserves the right to invest up to 10% of its total assets,
calculated at the time of investment, in the securities of other open-end or
closed-end investment companies. No more than 5% of the investing Portfolio's
total assets
9
<PAGE>
may be invested in the securities of any one investment company, nor may it ac-
quire more than 3% of the voting securities of any investment company. The
Portfolio will indirectly bear its proportionate share of any management fees
paid by an investment company in which it invests in addition to the advisory
fee paid by the Portfolio.
The Fund has received permission from the SEC, to allow each of its Portfo-
lios to invest, for cash management purposes, the greater of 5% of its total
assets or $2.5 million in the Fund's DSI Money Market Portfolio provided that
the investment is consistent with the Portfolio's investment policies ad re-
strictions. Based upon the Portfolio's assets invested in the DSI Money Market
Portfolio, the investing Portfolio's adviser will waive its investment advisory
fee and any other fees earned as a result of the Portfolio's investment in the
DSI Money Market Portfolio. The investing Portfolio will bear expenses of the
DSI Money Market Portfolio on the same basis as all of its other shareholders.
RESTRICTED AND ILLIQUID SECURITIES
The Portfolio may purchase restricted securities that are not registered for
sale to the general public but which are eligible for resale to qualified in-
stitutional investors under Rule 144A of the Securities Act of 1933. Under the
supervision of the Fund's Board of Trustees, the Adviser determines the liquid-
ity of such investments by considering all relevant factors. Provided that a
dealer or institutional trading market in such securities exists, these re-
stricted securities are not treated as illiquid securities for purposes of the
Portfolio's investment limitations. The Portfolio may invest up to 15% of its
net assets in illiquid securities. Prices realized from the sales of these se-
curities could be more or less than those originally paid by the Portfolio or
less than what may be considered the fair value of such securities.
MORTGAGE-BACKED SECURITIES
Mortgage-backed securities are collateralized by pools of mortgages assembled
for subsequent sale to investors by various governmental agencies and sponsored
organizations as well as by private issuers. The underlying assets
collateralizing the mortgage-backed securities may include single-family, mul-
tifamily and commercial properties. The two fundamental forms of mortgage-
backed securities are pass-throughs and collateralized mortgage obligations
("CMOs"). Pass-throughs produce monthly payments of principal and interest from
the underlying mortgages. CMOs divide the cash flows generated from the under-
lying mortgages or mortgage pass-through securities into different segments
known as "tranches" which are then retired sequentially over time in order of
priority. The market value and yield of mortgage-backed securities will fluctu-
ate due to market interest rate change and early prepayments of the underlying
mortgages. As prepayment rates on mortgages vary widely, it is difficult to ac-
curately predict the average maturity of a particular pool of mortgages or
tranches of CMOs. Although mortgage-backed securities may offer higher yields
than those available from other
10
<PAGE>
types of securities, mortgage-backed securities may be less effective than
other types of securities as a means of "locking in" an attractive rate for an
extended period because of the prepayment feature. The majority of the mort-
gage-backed securities held by the Portfolio will carry a guarantee from an
agency of the U.S. Government of the eventual payment of principal and inter-
est.
ASSET-BACKED SECURITIES
Asset-backed securities are collateralized by short maturity loans such as
automobile receivables, credit card receivables, other types of receivables or
assets. Credit support for asset-backed securities may be based on the under-
lying assets and/or provided through credit enhancements by a third party.
Credit enhancement techniques include letters of credit, insurance bonds, lim-
ited guarantees (which are generally provided by the issuer), senior-subordi-
nated structures and over-collateralization.
MUNICIPAL OBLIGATIONS
Municipal obligations include notes, bonds and other securities issued by or
on behalf of states, territories and possessions of the U.S. and the District
of Columbia and their political subdivisions, agencies and instrumentalities.
The interest on such municipal obligations will normally be exempt from federal
income tax. These bonds may be general obligation bonds secured by the issuer's
pledge of its full faith, credit and taxing power for the payment of principal
and interest, or they may be revenue bonds payable from specific revenue sourc-
es, but are not generally backed by the issuers' taxing power. These obliga-
tions may include private activity bonds where payment is the responsibility of
the private industrial user of the facility financed by the bonds. Municipal
notes are issued to meet short-term funding requirements of the issuer and in-
clude construction loan notes, short-term discount notes, tax-exempt commercial
paper, demand notes and similar instruments. Municipal bonds will be rated in-
vestment grade by Moody's and S&P, as described above. Investment grade munici-
pal notes will be rated MIG1, MIG2 or MIG3 by Moody's, or SP-1 or SP-2 by S&P
or, if unrated, determined by the Adviser to be of comparable quality. Please
refer to the Portfolio's SAI for a detailed description of municipal note rat-
ings.
YANKEEDOLLAR AND EURODOLLAR SECURITIES
Yankeedollar securities are U.S. dollar-based obligations issued inside the
United States by foreign entities. Eurodollar securities are U.S. dollar-based
obligations issued outside the United States by domestic or foreign entities.
Investment in these securities involve certain risks which are not typically
associated with investing in domestic securities. For example, non U.S.-based
issuers are not subject to the same accounting, auditing and financial report-
ing standards as are domestic issuers. There may be less publicly-available in-
formation about non-U.S.-based issuers which may make it difficult to make in-
vestment decisions. Political factors may have an impact in the form of confis-
catory taxation, expropriation or political instability in international mar-
kets. Some foreign governments also levy
11
<PAGE>
withholding taxes against dividend and interest income. Although in some coun-
tries a portion of the taxes is recoverable, the non-recovered portion of for-
eign withholding taxes will reduce the income the Portfolio receives from the
companies comprising its investments.
ZERO COUPON SECURITIES
A portion of the Portfolio may be invested in zero coupon securities which
are fixed income securities that do not make regular interest payments. Zero
coupon securities are sold at substantial discounts from their face value. The
difference between a zero coupon security's issue or purchase price and its
face value represents the imputed interest an investor will earn if the obliga-
tion is held until maturity. Zero coupon securities may offer the Portfolio the
opportunity to earn higher yields than those available on ordinary interest
paying obligations of similar credit quality and maturity. However, the prices
of zero coupon securities may also exhibit greater price volatility than ordi-
nary fixed income securities because of the manner in which their principal and
interest are returned to the investor. The Portfolio will accrue income on such
investments for tax and accounting purposes which is distributable to share-
holders. Since no cash is received at the time of accrual, the Portfolio may be
required to liquidate portfolio securities to satisfy its distribution obliga-
tions.
INVESTMENT LIMITATIONS
The Portfolio will not:
(a) with respect to 75% of its assets, invest more than 5% of its total
assets at the time of purchase in the securities of any single issuer
(other than obligations issued or guaranteed as to principal and in-
terest by the U.S. Government or any of its agencies or instrumentali-
ties);
(b) with respect to 75% of its assets, purchase more than 10% of any class
of the outstanding voting securities of any issuer;
(c) invest more than 5% of its assets at the time of purchase in the secu-
rities of companies that have (with predecessors) a continuous operat-
ing history of less than 3 years;
(d) invest more than 25% of its assets in companies within a single indus-
try; however, there are no limitations on investments made in instru-
ments issued or guaranteed by the U.S. Government and its agencies;
(e) make loans except by purchasing debt securities in accordance with its
investment objective and policies or entering into repurchase agree-
ments or by lending its portfolio securities to banks, brokers, deal-
ers and other financial institutions so long as the loans are made in
compliance with the 1940 Act, as amended, or the Rules and Regulations
or interpretations of the SEC;
(f) (i) borrow, except from banks and as a temporary measure for extraor-
dinary or emergency purposes and then, in no event, in excess of 33
1/3% of
12
<PAGE>
the Portfolio's gross assets valued at the lower of market or cost,
and (ii) the Portfolio may not purchase additional securities when
borrowings exceed 5% of total assets; or
(g) pledge, mortgage or hypothecate any of its assets to an extent greater
than 33 1/3% of its total assets at fair market value.
The investment objectives of the Portfolio are fundamental and may be changed
only with the approval of the holders of a majority of the outstanding shares
of such Portfolio. Except for limitations (a), (b), (d), (e) and (f)(i), the
Portfolio's investment limitations and policies described in this Prospectus
and in the SAI are not fundamental and may be changed by the Fund's Board of
Trustees upon reasonable notice to investors. All other investment limitations
described here and in the SAI are fundamental policies and may be changed only
with the approval of the holders of a majority of the outstanding shares of the
Portfolio. If a percentage limitation on investment or utilization of assets as
set forth above is adhered to at the time an investment is made, a later change
in percentage resulting from changes in the value or total cost of the Portfo-
lio's assets will not be considered a violation of the restriction.
PURCHASE OF SHARES
Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the
"Distributor"), without a sales commission at the net asset value next deter-
mined after an order is received by the Custodian (See "VALUATION OF SHARES.")
The minimum initial investment required is $2,500. The minimum initial invest-
ment for IRA accounts is $500. The minimum initial investment for spousal IRA
accounts is $250. Certain exceptions may be made by the officers of the Fund.
Shares of the Portfolio may be purchased by customers of brokers-dealers or
other financial intermediaries ("Service Agents") which have established a
shareholder servicing relationship with the Fund on behalf of their customers.
Service Agents may impose additional or different conditions on purchases or
redemptions of Portfolio shares and may charge transaction or other account
fees. Each Service Agent is responsible for transmitting to its customers a
schedule of any such fees and information regarding additional or different
purchase or redemption conditions. Shareholders who are customers of Service
Agents should consult their Service Agent for information regarding these fees
and conditions. Amounts paid to Service Agents may include transaction fees
and/or service fees paid by the Fund from the Fund assets attributable to the
Service Agent, which would not be imposed if shares of the Portfolio were pur-
chased directly from the Fund or the Distributor. Service Agents may provide
shareholder services to their customers that are not available to a shareholder
dealing directly with the Fund. A salesperson and any other person entitled to
receive compensation for selling or servicing Portfolio shares may receive dif-
ferent compensation with respect to one particular class of shares over another
in the Fund.
13
<PAGE>
Service Agents may enter confirmed purchase orders on behalf of their custom-
ers. If shares of the Portfolio are purchased in this manner, the Service Agent
must receive your investment order before the close of trading on the New York
Stock Exchange ("NYSE"), and transmit it to the Fund's Sub-Transfer Agent prior
to 4 p.m. to receive that day's share price. Proper payment for the order must
be received by the Sub-Transfer Agent no later than the time when the Portfolio
is priced on the following business day. Service Agents are responsible to
their customers and the Fund for timely transmission of all subscription and
redemption requests, investment information, documentation and money.
INITIAL INVESTMENT
BY MAIL
. Complete and sign an Application, and mail it together with a check pay-
able to UAM Funds to:
UAM Funds Trust
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
Payment for purchases of shares received by mail will be credited to an ac-
count at the next share price calculated for the Portfolio after receipt. Pay-
ment does not need to be converted into Federal Funds (monies credited to the
Fund's Custodian Bank by a Federal Reserve Bank) before the Fund will accept it
for investment.
BY WIRE
. As soon as possible, telephone the UAM Funds Service Center and provide
the account name, address, telephone number, social security or taxpayer
identification number, Portfolio selected, amount being wired, and the
name of the bank wiring the funds. An account number and a wire control
number will be provided to you. Next,
. instruct your bank to wire the specified amount to the Fund's Custodian:
The Chase Manhattan Bank
ABA #021000021
UAM Funds
Credit DDA #9102772952
BHM&S Total Return Bond Fund
Your Account Registration
Your Account Number
Wire Control Number
. Forward a completed Application to the UAM Funds Service Center at the
address shown on the Form. Federal Funds purchases will be accepted only
on days when the NYSE and the Custodian Bank are open for business.
14
<PAGE>
ADDITIONAL INVESTMENTS
Additional investments can be made at any time. The minimum additional in-
vestment is $100. Shares can be purchased at net asset value by mailing a
check made payable to "UAM Funds" to the above address or by wiring money to
the Custodian Bank using the instructions outlined above. When making addi-
tional investments, be sure that the account number, account name and the
Portfolio to be purchased is identified on the check or wire. Prior to wiring
additional investments, notify the UAM Funds Service Center by calling the
number on the cover of this Prospectus. Mail orders should include, when pos-
sible, the "Invest by Mail" stub which accompanies any Fund confirmation
statement.
OTHER PURCHASE INFORMATION
Investments received by 4 p.m. ET (the close of the NYSE) will be invested
at the share price calculated after the NYSE closes on that day. Investments
received after the close of the NYSE will be executed at the price computed on
the next day the NYSE is open.The Fund reserves the right, in its sole discre-
tion, to suspend the offering of shares or reject purchase orders of the Port-
folio when, in the judgement of management, such suspension or rejection is in
the best interests of the Fund.
Purchases of shares will be made in full and fractional shares calculated to
three decimal places. Certificates for whole shares will be issued upon writ-
ten request by the shareholder. Certificates for fractional shares will not be
issued.
IN-KIND PURCHASES
If accepted by the Fund, shares of the Portfolio may be purchased in ex-
change for securities which are eligible for acquisition by the Portfolio, as
described in this Prospectus. Securities to be exchanged which are accepted by
the Fund will be valued as described under "VALUATION OF SHARES" at the next
determination of net asset value after acceptance. Shares issued by the Port-
folio in exchange for securities will be issued at net asset value determined
as of the same time. All dividends, interest, subscription, or other rights
pertaining to such securities shall become the property of the Portfolio and
must be delivered to the Fund by the investor upon receipt from the issuer.
Securities acquired through an in-kind purchase will be acquired for invest-
ment and not for immediate resale.
The Fund will not accept securities in exchange for shares of the Portfolio
unless:
. at the time of exchange, such securities are eligible to be in-
cluded in the Portfolio (current market quotations must be readily
available for such securities);
. the investor represents and agrees that all securities offered to
be exchanged are liquid securities and not subject to any restric-
tions upon their sale by the Portfolio under the Securities Act of
1933, or otherwise; and
15
<PAGE>
. the value of any such securities (except U.S. Government securi-
ties) being exchanged together with other securities of the same
issuer owned by the Portfolio will not exceed 5% of the net assets
of the Portfolio immediately after the transaction.
Investors who are subject to Federal taxation upon exchange may realize a
gain or loss for Federal income tax purposes depending upon the cost of secu-
rities or local currency exchanged. Investors interested in such exchanges
should contact the Adviser.
REDEMPTION OF SHARES
Shares of the Portfolio may be redeemed by mail or telephone, at any time,
without cost, at the net asset value of the Portfolio next determined after
receipt of the redemption request. No charge is made for redemptions. Any re-
demption may be more or less than the purchase price of your shares depending
on the market value of the investment securities held by the Portfolio.
BY MAIL
Address requests for redemption to the UAM Funds Service Center. Requests to
redeem shares must include:
. share certificates, if issued;
. a letter of instruction or an assignment specifying the number of
shares or dollar amount to be redeemed, signed by all registered
owners of the shares in the exact names in which they are regis-
tered;
. any required signature guarantees (see "SIGNATURE GUARANTEES"); and
. any other necessary legal documents, if required, in the case of
estates, trusts, guardianships, custodianships, corporations, pen-
sion and profit sharing plans and other organizations.
BY TELEPHONE
A redemption request by telephone requires the following:
. establish the telephone redemption privilege (and if desired, the
wire redemption privilege) by completing appropriate sections of
the Application; and
. call the Fund and instruct that the redemption proceeds be mailed
to you or wired to your bank.
The following tasks cannot be accomplished by telephone:
. changing the name of the commercial bank or the account designated
to receive redemption proceeds (this can be accomplished only by a
written request signed by each shareholder, with each signature
guaranteed);
16
<PAGE>
. redemption of certificated shares by telephone.
The Fund and its Sub-Transfer Agent will employ reasonable procedures to
confirm that instructions communicated by telephone are genuine, and they may
be liable for any losses if they fail to do so. These procedures include re-
quiring the investor to provide certain personal identification at the time an
account is opened, as well as prior to effecting each transaction requested by
telephone. In addition, all telephone transaction requests will be recorded
and investors may be required to provide additional telecopied written in-
structions of such transaction requests. The Fund or Sub-Transfer Agent may be
liable for any losses due to unauthorized or fraudulent telephone instructions
if the Fund or the Sub-Transfer Agent does not employ the procedures described
above. Neither the Fund nor the Sub-Transfer Agent will be responsible for any
loss, liability, cost or expense for following instructions received by tele-
phone that it reasonably believes to be genuine.
SIGNATURE GUARANTEES
Signature guarantees are required for the following redemptions:
. redemptions where the proceeds are to be sent to someone other than
the registered shareowner(s);
. redemptions where the proceeds are to be sent to someplace other
than the registered address, or
. share transfer requests.
Signature guarantees will be accepted from any eligible guarantor institu-
tion which participates in a signature guarantee program. Eligible guarantor
institutions include banks, brokers, dealers, credit unions, national securi-
ties exchanges, registered securities associations, clearing agencies and sav-
ings associations. Broker-dealers guaranteeing signatures must be a member of
a clearing corporation or maintain net capital of at least $100,000. Credit
unions must be authorized to issue signature guarantees.
OTHER REDEMPTION INFORMATION
Normally, the Fund will make payment for all shares redeemed under proper
procedures within one business day of and no more than seven days after the
receipt of the request, or earlier if required under applicable law. The Fund
may suspend the right of redemption or postpone the date at times when the
NYSE and Custodian Bank are closed, or under any emergency circumstances de-
termined by the SEC.
If the Board of Trustees determines that it would be detrimental to the best
interests of remaining shareholders of the Fund to make payment wholly or
partly in cash, the Fund may pay redemption proceeds in whole or in part by a
distribution in-kind of liquid securities held by the Portfolio in lieu of
cash in conformity with
17
<PAGE>
applicable rules of the SEC. Investors may incur brokerage charges on the sale
of portfolio securities received in payment of redemptions.
SHAREHOLDER SERVICES
EXCHANGE PRIVILEGE
Institutional Class Shares of the Portfolio may be exchanged for Institu-
tional Class Shares of any other Portfolio of the Fund. (See the list of Port-
folios of the UAM Funds at the end of this Prospectus.) Exchange requests
should be made by contacting the UAM Funds Service Center.
Any exchange will be based on the net asset value of the shares involved.
There is no sales commission or charge of any kind for an exchange. Before
making an exchange into a Portfolio, a shareholder should read its Prospectus
and consider the investment objectives of the Portfolio to be purchased. Call
the UAM Funds Service Center for a copy of the Prospectus for the Portfolio(s)
in which you are interested. Exchanges can only be made with Portfolios that
are qualified for sale in a shareholder's state of residence.
Exchange requests may be made either by mail or telephone. Telephone ex-
changes will be accepted only if the certificates for the shares to be ex-
changed have not been issued to the shareholder and if the registration of the
two accounts will be identical. Requests for exchanges received prior to 4
p.m. (ET) will be processed as of the close of business on the same day. Re-
quests received after 4 p.m. will be processed on the next business day. The
Board of Trustees may limit the frequency and amount of exchanges permitted.
For additional information regarding responsibility for the authenticity of
telephoned instructions, see "REDEMPTION OF SHARES BY TELEPHONE". An exchange
into another UAM Funds Portfolio is a sale of shares and may result in a gain
or loss for income tax purposes. The Fund may modify or terminate the exchange
privilege at any time.
VALUATION OF SHARES
The net asset value of the Portfolio is determined by dividing the value of
the Portfolio's assets attributable to the class, less any liabilities attrib-
utable to the class, by the number of shares outstanding attributable to the
class. The net asset value per share of the Portfolio is determined as of the
close of the NYSE on each day that the NYSE is open for business.
Bonds and other fixed income securities are valued according to the broadest
and most representative market, which will ordinarily be the over-the-counter
market. Bonds and other fixed income securities may be valued on the basis of
prices provided by a pricing service when such prices are believed to reflect
the fair market value of such securities. Securities purchased with remaining
maturities of
18
<PAGE>
60 days or less are valued at amortized cost when the Board of Trustees deter-
mines that amortized cost reflects fair value.
The value of other assets and securities for which no quotations are readily
available (including restricted securities) is determined in good faith at
fair value using methods determined by the Trustees.
PERFORMANCE CALCULATIONS
The Portfolio measures performance by calculating yield and total return.
Both yield and total return figures are based on historical earnings and are
not intended to indicate future performance.
Yield refers to the income generated by an investment in the Portfolio over
a given period of time, expressed as an annual percentage rate. Yields are
calculated according to a standard that is required for all bond funds. As
this differs from other accounting methods, the quoted yield may not equal the
income actually paid to shareholders.
Total return is the change in value of an investment in the Portfolio over a
given period, assuming reinvestment of any dividends and capital gains. A cu-
mulative or aggregate total return reflects actual performance over a stated
period of time. An average annual total return is a hypothetical rate of re-
turn that, if achieved annually, would have produced the same cumulative total
return if performance had been constant over the entire period.
Performance will be calculated separately for Institutional Class and Serv-
ice Class Shares. Dividends paid by the Portfolio with respect to Institu-
tional Class and Service Class Shares, to the extent any dividends are paid,
will be calculated in the same manner at the same time on the same day and
will be in the same amount, except that service fees, distribution charges and
any incremental transfer agency costs relating to Service Class Shares will be
borne exclusively by that class.
The Portfolio's performance may be compared to data prepared by independent
services which monitor the performance of investment companies, data reported
in financial and industry publications, and various indices as further de-
scribed in the Portfolio's SAI. This information may also be included in sales
literature and advertising.
The Portfolio's Annual Report of Shareholders for the most recent fiscal
year end contains additional performance information that includes comparisons
with appropriate indices. The Annual Report is available without charge. Con-
tact the UAM Funds Service Center at the address or telephone number on the
cover of this Prospectus.
19
<PAGE>
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
DIVIDENDS AND CAPITAL GAINS
The Portfolio will normally distribute substantially all of its net invest-
ment income (for tax purposes) to shareholders in quarterly dividends. If any
net capital gains are realized, the Portfolio will normally distribute them
annually. All dividends and capital gains distributions will be automatically
reinvested in additional shares of the Portfolio unless the Fund is notified
in writing that the shareholder elects to receive distributions in cash.
FEDERAL TAXES
The Portfolio intends to qualify as a "regulated investment company" under
subchapter M of the Internal Revenue Code of 1986, as amended, for federal in-
come tax purposes and to meet all other requirements that are necessary for it
(but not its shareholders) to be exempt from federal taxes on income and gains
paid to shareholders in the form of dividends. To do this, the Portfolio must,
among other things, distribute substantially all of its ordinary income and
net capital gains on an annual basis and maintain a portfolio of investments
which satisfies certain diversification criteria.
Dividends paid by the Portfolio from net investment income, whether in cash
or reinvested in shares, are taxable to shareholders as ordinary income.
Short-term capital gains will be taxed as ordinary income. Long-term capital
gains distributions are taxed as long-term capital gains. Shareholders will be
notified annually of dividend income earned for tax purposes.
Dividends declared in October, November and December to shareholders of rec-
ord in such a month will be treated as if they had been paid by the Fund and
received by the shareholders on December 31 of the same calendar year, pro-
vided that the dividends are paid before February of the following year.
The Fund is required by Federal law to withhold 31% of reportable payments
paid to shareholders who have not complied with IRS regulations. In order to
avoid this withholding requirement, you must certify that your Social Security
or Taxpayer Identification Number provided is correct and that either you are
not currently subject to backup withholding or you are exempt from backup
withholding. This certification must be made on the Application or on a sepa-
rate form supplied by the Fund.
Dividends and interest received by the Portfolio may give rise to withhold-
ing and other taxes imposed by foreign countries. These taxes reduce the Port-
folio's dividends but are included in the taxable income reported on your tax
statement if the Portfolio qualifies for this tax treatment and elects to pass
it through to you. Consult a tax adviser for more information regarding deduc-
tions and credits for foreign taxes.
20
<PAGE>
INVESTMENT ADVISER
The Adviser is a registered investment adviser formed in 1979. Its business
offices are located at One McKinney Plaza, 3232 McKinney Avenue, 15th Floor,
Dallas, Texas 75204. It is a wholly-owned subsidiary of United Asset Manage-
ment Corporation ("UAM") and provides and offers investment management serv-
ices to corporate, public and Taft-Hartley employee benefit plans, founda-
tions, endowments, health care and other institutions and investors. The Ad-
viser currently has $18 billion in assets under management.
The Portfolio pays an annual fee in monthly installments to the Adviser for
advisory services. This fee is accrued daily and paid every month as a per-
centage of the average net assets in the Portfolio for that month. The per-
centage fee on an annual basis is 0.35%. The Adviser has agreed to waive a
portion of its advisory fees and to assume operating expenses, if necessary,
to keep operating expenses from exceeding 0.55% of average daily net assets
through December 31, 1997. The Adviser will not be reimbursed by the Fund for
any advisory fees which are waived or expenses which the Adviser may bear on
behalf of the Fund for a given fiscal year.
The Adviser may compensate its affiliated companies for referring investors
to the Portfolio. The Distributor, UAM, the Adviser, or any of their affili-
ates, may, at its own expense, compensate a Service Agent or other person for
marketing, shareholder servicing, record-keeping and/or other services per-
formed with respect to the Fund, the Portfolio or any Class of Shares of the
Portfolio. Payments made for any of these purposes may be made from the paying
entity's revenues, its profits or any other source available to it. When such
service arrangements are, in effect, they are made generally available to all
qualified service providers.
The Distributor, the Adviser and certain of their affiliates also partici-
pate, at the date of this Prospectus, in an arrangement with Smith Barney Inc.
("Smith Barney") under which Smith Barney provides certain defined contribu-
tion plan marketing and other shareholder services and receives from such en-
tities 0.15 of 1% of the daily net asset value of Institutional Class Shares
held by Smith Barney's eligible customer accounts in addition to amounts pay-
able to all selling dealers. The Fund also compensates Smith Barney for serv-
ices it provides to certain defined contribution plan shareholders that are
not otherwise provided by UAMFSI.
The investment professionals at the Adviser responsible for the day-to-day
management of the Portfolio and their qualifications are as follows:
JOHN S. WILLIAMS -- Fixed Income Principal and the first fixed income port-
folio manager at the Adviser in 1983. Mr. Williams has also managed balanced
and municipal portfolios during his 20 year investment career. Prior to join-
ing the Adviser, he was responsible for the management of all fixed income as-
sets at Southland Trust, Dallas, Texas, and prior to that was a portfolio man-
ager and securities analyst at InterFirst Bank Dallas Trust Department. Mr.
Williams has
21
<PAGE>
served on the Advisory Committee for the Texas Teachers Retirement System and
is an active member in the Dallas Investment Analysts Society. He currently is
a Director of United Asset Management Corporation. Mr. Williams is a Chartered
Financial Analyst, earning his MBA in 1976 and BBA in 1975 from Texas Chris-
tian University.
DAVID R. HARDIN -- Fixed Income Principal and portfolio manager. Prior to
joining the Adviser in 1987, Mr. Hardin was the Vice President and Director of
the Fixed Income Group of RepublicBank Dallas Trust Department. In that posi-
tion, he was responsible for the management of all taxable and tax-exempt
fixed income assets of the Trust Division, including all separately managed
accounts, collective investment fund products, and the creation of and manage-
ment of an SEC-registered mutual fund. Prior to attaining the Director's posi-
tion, Mr. Hardin was a taxable portfolio manager and also served as the credit
analyst for the Trust Division. He started his investment career as a private
placement credit analyst while employed by American General Insurance Co. in
Houston in 1976. Mr. Hardin received an M.Sc. from The London School of Eco-
nomics in 1975 and a BBA from Texas Christian University in 1973.
STEPHEN M. MILANO -- Fixed Income Principal and portfolio manager. Prior to
joining the Adviser in 1990, Mr. Milano was employed at Salomon Brothers, Inc.
in New York as a Vice President of the Fixed Income Strategy Group. In that
role he was a specialist in developing portfolio structure and strategies for
active management of taxable assets. While at Salomon he also served as Prod-
uct Sales Manager for International Fixed Income Securities and as a Mortgage
and Government Specialist. Prior to joining Salomon, Mr. Milano was employed
as a portfolio manager and trader at Equitable Life Assurance Society. He re-
ceived his BS in Economics with a concentration in Finance from the Wharton
School of the University of Pennsylvania in 1980.
J. SCOTT MCDONALD -- Fixed Income Portfolio Analyst/Trader. Mr. McDonald
joined the Adviser in 1995 to serve as a security and portfolio specialist for
the Fixed Income Group. In addition to security and portfolio analyst, he is
responsible for systems analytics used in the evaluation of effective/option
adjusted yield measurements for all securities and portfolios. He also serves
as compliance monitor of all fixed income portfolios to ensure commonality of
structure and diversification. Mr. McDonald previously served as the Senior
Vice President and Portfolio Manger at Life Partners Group, Inc. in Dallas.
While with Life Partners, he was responsible for implementing investment
strategy for $3 billion in assets. Additionally, he has been employed by Texas
Commerce Bank Houston as a Credit Supervisor and Lending Officer. He received
his MBA in 1991 from the University of Texas at Austin and his BBA from South-
ern Methodist University in 1986.
DEBORAH J. ANDERSON -- Senior Portfolio Assistant. Ms. Anderson is responsi-
ble for all administrative staff and their duties associated with the fixed
22
<PAGE>
income product management, including communication/liaison with all clients,
custodial banks, and brokerage relationships. She supervises all operational
aspects of fixed income security trading and works extensively with reporting
requirements for all clients and regulatory agencies. Prior to joining the Ad-
viser in 1988, Ms. Anderson served as a Trust Officer with Trust Company of
Texas and its predecessor, Southland Trust Co. She received a BBA in Account-
ing from the University of Texas at Arlington in 1974.
ADVISER'S HISTORICAL PERFORMANCE
Below are certain performance data provided by the Adviser pertaining to the
composite of separately managed accounts of the Adviser that are managed with
substantially similar (although not necessarily identical) objectives, poli-
cies and strategies as those of the Portfolio. The investment returns of the
Portfolio may differ from those of the separately managed accounts because
such separately managed accounts may have fees and expenses that differ from
those of the Portfolio. Further, the separately managed accounts are not sub-
ject to investment limitations, diversification requirements and other re-
strictions imposed by the Investment Company Act of 1940 and Internal Revenue
Code; such conditions, if applicable, may have lowered the returns for sepa-
rately managed accounts. The results presented are not intended to predict or
suggest the return to be experienced by the Portfolio or the return an in-
vestor might achieve by investing in the Portfolio.
BARROW, HANLEY, MEWHINNEY, & STRAUSS, INC.--BOND ACCOUNT
(Percentage of returns of Net of Management Fees)
<TABLE>
<CAPTION>
BARROW, HENLEY, MEWHINNEY & LEHMAN BROTHERS AGGREGATE
CALENDAR YEARS STRAUSS, INC. BOND INDEX
-------------- --------------------------- -------------------------
<S> <C> <C>
1987 3.15% 2.76%
1988 7.30% 7.89%
1989 15.01% 14.53%
1990 9.18% 8.96%
1991 16.54% 16.00%
1992 7.56% 7.40%
1993 10.56% 9.75%
1994 (3.44)% (2.92)%
1995 17.64% 18.46%
9 Months ended 9/30/96 0.56% 0.61%
Annualized 8.42% 8.37%
Cumulative 226.66% 218.91%
Nine-Year Mean (1/1/87-
12/31/95) 9.28% 9.20%
Value of $1 invested during
(1/1/87-9/30/96) $3.27 $3.19
</TABLE>
23
<PAGE>
Notes:
1. The annualized return is calculated from monthly data, allowing for com-
pounding. The formula used is in accordance with the acceptable methods set
forth by the Association for Investment Management Research, the Bank Ad-
ministration Institute, and the Investment Counsel Association of America.
Market Value of the account was the sum of the account's total assets, in-
cluding cash, cash equivalents, short term investments, and securities val-
ued at current market prices.
2. The cumulative return means that $1 invested in that account on January 1,
1979 had grown to $15.88 by September 30, 1996.
3. The 9-year mean is the arithmetic average of the annual returns for the
calendar years listed.
4. The Lehman Brothers Aggregate Bond Index is an unmanaged index which as-
sumes reinvestment of dividends and is generally considered representative
of securities similar to those invested in by the Adviser for the purpose
of the composite performance numbers set forth above.
5. The Adviser's average annual management fee over the period shown (1/1/87-
9/30/96) was 0.33% or 33 basis points. During the period, fees on the Ad-
viser's individual accounts ranged from 0.25% to 0.45% (25 basis points to
45 basis points). Net returns to investors vary depending on the management
fee.
4. The S&P 500 is an unmanaged index which assumes reinvestment of dividends
and is generally considered representative of securities similar to those
invested in by the Adviser for the purpose of the composite performance
numbers set forth above.
5. The Adviser's average annual management fee over the period shown (1/1/79-
9/30/96) was 0.40% or 40 basis points. During the period, fees on the Ad-
viser's individual accounts ranged from 0.32% to 1.00% (32 basis points to
100 basis points). Net returns to investors vary depending on the manage-
ment fee.
ADMINISTRATIVE SERVICES
UAM Fund Services, Inc. ("UAMFSI"), a wholly-owned subsidiary of United Asset
Management Corporation, is responsible for performing and overseeing adminis-
trative, fund accounting, dividend disbursing and transfer agent services pro-
vided to the Fund and its Portfolios. UAMFSI's principal office is located at
211 Congress Street, Boston, MA 02110. UAMFSI has subcontracted some of these
services to Chase Global Funds Services Company ("CGFSC"), an affiliate of The
Chase Manhattan Bank, by a Mutual Funds Service Agreement dated April 15, 1996.
CGFSC is located at 73 Tremont Street, Boston, MA 02108.
Each Portfolio pays UAMFSI a two part monthly fee: a Portfolio-specific fee
which is retained by UAMFSI and a sub-administration fee which UAMFSI in turn
pays to CGFSC. The following Portfolio-specific fees are calculated from the
aggregate net assets of each Portfolio:
24
<PAGE>
<TABLE>
<CAPTION>
RATE
----
<S> <C>
BHM&S Total Return Bond Portfolio...................................... .04%
</TABLE>
CGFSC's monthly fee for its services is calculated on an annualized basis as
follows:
0.19 of 1% of the first $200 million of combined Fund assets;
0.11 of 1% of the next $800 million of combined Fund assets;
0.07 of 1% of combined Fund assets in excess of $1 billion but less than
$3 billion;
0.05 of 1% of combined Fund assets in excess of $3 billion.
Fees are allocated among the Portfolios on the basis of their relative assets
and are subject to a graduated minimum fee schedule per Portfolio, which starts
at $2,000 per month and increases to $70,000 annually after two years. If a
separate class of shares is added to a Portfolio, its minimum annual fee in-
creases by $20,000.
DISTRIBUTOR
UAM Fund Distributors, Inc., a wholly-owned subsidiary of United Asset Man-
agement Corporation with its principal office located at 211 Congress Street,
Boston, Massachusetts 02110, distributes the shares of the Fund. Under the
Fund's Distribution Agreement (the "Agreement"), the Distributor, as agent of
the Fund, agrees to use its best efforts as sole distributor of the Fund's
shares. The Distributor does not receive any fee or other compensation under
the Agreement with respect to the Portfolio's Institutional Class Shares of-
fered in this Prospectus. The Agreement continues in effect as long as it is
approved at least annually by the Fund's Board of Trustees. Those approving the
Agreement include a majority of Trustees who are neither parties to the Agree-
ment nor interested persons of any such party. This Agreement provides that the
Fund will bear the costs of the registration of its shares with the SEC and
various states and the printing of its prospectuses, SAIs and reports to share-
holders.
PORTFOLIO TRANSACTIONS
The Advisory Agreements for each of the Fund's Portfolios authorize the Ad-
viser to select the brokers or dealers that will execute the purchases and
sales of investment securities for each Portfolio. The Agreements direct the
Adviser to use its best efforts to obtain the best available price and most fa-
vorable execution for all transactions of the Portfolios. If consistent with
the interests of the Portfolios, the Adviser may select brokers on the basis of
research, statistical and pricing services these brokers provide to the Portfo-
lios in addition to required Adviser services. Such brokers may be paid a
higher commission than that which another qualified broker would have charged
for effecting the same transaction, provided
25
<PAGE>
that such commissions are paid in compliance with the Securities Exchange Act
of 1934, as amended, and that the Adviser determines in good faith that the
commission is reasonable in terms either of the transaction or the overall re-
sponsibility of the Adviser to the Portfolios and the Adviser's other clients.
Although not a typical practice, the Adviser may place portfolio orders with
qualified broker-dealers who refer clients to the Adviser.
If a purchase or sale of securities is consistent with the investment poli-
cies of a Portfolio and one or more other clients served by the Adviser is con-
sidering a purchase at or about the same time, transactions in such securities
will be allocated among the Portfolio and clients in a manner deemed fair and
reasonable by the Adviser. Although there is no specified formula for allocat-
ing such transactions, allocations are subject to periodic review by the Fund's
Trustees.
GENERAL INFORMATION
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Fund was organized as a Delaware business trust on May 18, 1994 under the
name "The Regis Fund II." On October 31, 1995, the name of the Fund was changed
to "UAM Funds Trust." The Fund's Agreement and Declaration of Trust permits the
Fund to issue an unlimited number of shares of beneficial interest, without par
value. The Trustees have the power to designate one or more series ("Portfo-
lios") or classes of shares of beneficial interest without further action by
shareholders.
At its discretion, the Board of Trustees may create additional Portfolios and
classes of shares. The shares of each Portfolio are fully paid and nonassess-
able, and have no preference as to conversion, exchange, dividends, retirement
or other features and no pre-emptive rights. They have noncumulative voting
rights, which means that holders of more than 50% of shares voting for the
election of Trustees can elect 100% of the Trustees. A shareholder is entitled
to one vote for each full share held (and a fractional vote for each fractional
share held), then standing in his or her name on the books of the Fund.
As of December 6, 1996, Hartnat & Co., Boston, MA held of record 28% and Sa-
rah Campbell Bloffer Foundation, Houston, Texas held 27% of the outstanding
shares of the Portfolio's Institutional Class Shares and Hartnat & Co. held
58.8% of the outstanding shares of the Portfolio's Institutional Service Class
Shares for which ownership is disclaimed or presumed disclaimed. The persons or
organizations owning 25% or more of the outstanding shares of the Portfolio may
be presumed to "control" (as that term is defined in the 1940 Act) the Portfo-
lio. As a result, these persons or organizations could have the ability to vote
a majority of the shares of the Portfolio on any matter requiring the approval
of shareholders of the Portfolio.
26
<PAGE>
Both Institutional Class and Service Class Shares represent an interest in
the same assets of a Portfolio. Service Class Shares bear certain expenses re-
lated to shareholder servicing and, may bear expenses related to distribution.
Service Class Shares have exclusive voting rights with respect to matters re-
lating to such distribution expenditures. Information about the Service Class
Shares of the Portfolio is available upon request by contacting the UAM Funds
Service Center.
Annual meetings will not be held except as required by the 1940 Act and other
applicable laws. The Fund has undertaken that its Trustees will call a meeting
of shareholders if such a meeting is requested in writing by the holders of not
less than 10% of the outstanding shares of the Fund. The Fund will assist
shareholder communications in such matters.
CUSTODIAN
The Chase Manhattan Bank serves as custodian of the Fund's assets.
ACCOUNTANTS
Price Waterhouse LLP act as the independent accountants for the Fund.
REPORTS
Investors will receive unaudited semi-annual financial statements and annual
financial statements audited by Price Waterhouse LLP.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be made by contacting the UAM Funds Service Center
at the address or telephone number listed on the cover of this Prospectus.
LITIGATION
The Fund is not involved in any litigation.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS NOT CONTAINED IN THIS PROSPECTUS, OR IN THE FUND'S STATEMENT OF AD-
DITIONAL INFORMATION, IN CONNECTION WITH THE OFFERING MADE BY THIS PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR ITS REPRESENTATIONS MUST NOT BE RE-
LIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES NOT CON-
STITUTE AN OFFERING BY THE FUND IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY
NOT LAWFULLY BE MADE.
27
<PAGE>
UAM FUNDS -- INSTITUTIONAL CLASS SHARES
Acadian Emerging Markets Portfolio
Acadian International Equity Portfolio
BHM&S Total Return Bond Portfolio
Chicago Asset Management Intermediate Bond Portfolio
Chicago Asset Management Value/Contrarian Portfolio
C&B Balanced Portfolio
C&B Equity Portfolio
C&B Equity Portfolio for Taxable Investors
C&B Mid Cap Equity Portfolio
McKee Domestic Equity Portfolio
McKee International Equity Portfolio
McKee U.S. Government Portfolio
DSI Balanced Portfolio
DSI Disciplined Value Portfolio
DSI Limited Maturity Bond Portfolio
DSI Money Market Portfolio
FMA Small Company Portfolio
FPA Crescent Portfolio
Hanson Equity Portfolio
ICM Equity Portfolio
ICM Fixed Income Portfolio
ICM Small Company Portfolio
IRC Enhanced Index Portfolio
Jacobs International Octagon Portfolio
MJI International Equity Portfolio
Newbold's Equity Portfolio
NWQ Balanced Portfolio
NWQ Value Equity Portfolio
Rice, Hall James Small Cap Portfolio
Rice, Hall James Small/Mid Cap Portfolio
Sirach Equity Portfolio
Sirach Fixed Income Portfolio
Sirach Growth Portfolio
Sirach Short-Term Reserves Portfolio
28
<PAGE>
Sirach Special Equity Portfolio
Sirach Strategic Balanced Portfolio
SAMI Preferred Stock Income Portfolio
Sterling Partners' Balanced Portfolio
Sterling Partners' Equity Portfolio
Sterling Partners' Short-Term Fixed Income Portfolio
Sterling Partners' Small Cap Value Portfolio
TS&W Balanced Portfolio
TS&W Equity Portfolio
TS&W Fixed Income Portfolio
TS&W International Equity Portfolio
29
<PAGE>
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
1-800-638-7983
Investment Adviser
Barrow, Hanley, Mewhinney & Strauss, Inc.
One McKinney Plaza,
3232 McKinney Avenue,
15th Floor, Dallas, Texas 75204
Distributor
UAM FUND DISTRIBUTORS, INC.
211 Congress Street
Boston, MA 02110
PROSPECTUS
January 3, 1997
<PAGE>
[LOGO OF UAM FUNDS APPEARS HERE]
Chicago Asset Management
Intermediate Bond Portfolio
Institutional
Class Shares
January 3, 1997
P R O S P E C T U S
<PAGE>
[LOGO OF UAM FUNDS APPEARS HERE]
UAM FUNDS SERVICE CENTER
C/O CHASE GLOBAL FUNDS SERVICES COMPANY
P.O. BOX 2798
BOSTON, MA 02208-2798
1-800-638-7983
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CHICAGO ASSET MANAGEMENT INTERMEDIATE BOND PORTFOLIO
INSTITUTIONAL CLASS SHARES
INVESTMENT ADVISER: CHICAGO ASSET MANAGEMENT COMPANY
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PROSPECTUS--JANUARY 3, 1997
UAM Funds Trust (the "Fund") is an open-end investment company known as a
"mutual fund." The Fund consists of multiple series (known as "Portfolios"),
each of which has different investment objectives and policies. The Chicago
Asset Management Intermediate Bond Portfolio currently offers only one class
of shares: Institutional Class shares. The securities offered in this Prospec-
tus are Institutional Class Shares of one diversified, no-load Portfolio of
the Fund managed by Chicago Asset Management Company.
CHICAGO ASSET MANAGEMENT INTERMEDIATE BOND PORTFOLIO. Chicago Asset Manage-
ment Intermediate Bond Portfolio (the "Portfolio") seeks a high level of cur-
rent income consistent with moderate interest rate exposure by investing pri-
marily in investment grade bonds with an average weighted maturity between 3
and 10 years.
There can be no assurance that the Portfolio will achieve its stated objec-
tive.
ABOUT THIS PROSPECTUS
Keep this Prospectus for future reference. It contains information that you
should know before you invest. A "Statement of Additional Information" (SAI)
containing additional information about the Fund has been filed with the Secu-
rities and Exchange Commission. The SAI is dated January 3, 1997 and has been
incorporated by reference into this Prospectus. For a free copy of the SAI
contact the UAM Funds Service Center at the address or telephone number above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURI-
TIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Fund Expenses.............................................................. 1
Prospectus Summary......................................................... 3
Risk Factors............................................................... 3
Financial Highlights....................................................... 4
Investment Objective....................................................... 6
Investment Policies........................................................ 6
Other Investment Policies.................................................. 8
Investment Limitations..................................................... 15
Purchase of Shares......................................................... 16
Redemption of Shares....................................................... 19
Shareholder Services....................................................... 21
Valuation of Shares........................................................ 21
Performance Calculations................................................... 22
Dividends, Capital Gains Distributions and Taxes........................... 22
Investment Adviser......................................................... 23
Adviser's Historical Performance........................................... 25
Administrative Services.................................................... 26
Distributor................................................................ 27
Portfolio Transactions..................................................... 27
General Information........................................................ 28
UAM Funds -- Institutional Class Shares.................................... 30
</TABLE>
<PAGE>
FUND EXPENSES
The following table illustrates expenses and fees that a shareholder of the
Portfolio's Institutional Class Shares would incur. Transaction fees may be
charged if a broker-dealer or other financial intermediary deals with the Fund
on your behalf. Please see "PURCHASE OF SHARES" for further information.
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Sales Load Imposed on Purchases......................................... NONE
Sales Load Imposed on Reinvested Dividends.............................. NONE
Deferred Sales Load..................................................... NONE
Redemption Fees......................................................... NONE
Exchange Fees........................................................... NONE
</TABLE>
ANNUAL FUND OPERATING EXPENSES
(As a Percentage of Net Assets)
<TABLE>
<S> <C>
Investment Advisory Fees............................................ 0.48 %
Administrative Fees................................................. 0.82 %
12b-1 Fees.......................................................... NONE
Other Expenses...................................................... 0.78 %
Advisory Fees Waived and Expenses Assumed........................... (1.24)%
-----
Total Operating Expenses (After Fee Waiver and Expenses Assumed).... 0.84 %*
=====
</TABLE>
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* Absent the fees waived and expenses assumed by the Adviser, annualized total
operating expenses for the Portfolio, including revised administrative fees,
would be 2.08%. The annualized Total Operating Expenses includes the effect
of expense offsets. If expense offsets were excluded, annualized total oper-
ating expenses of the Portfolio would be 0.85%. Until further notice, the
Adviser has agreed to waive its advisory fee and to assume certain operating
expenses to keep the Portfolio's total annual operating expenses (excluding
interest, taxes and extraordinary expenses) from exceeding 0.80% of average
daily net assets. The Portfolio will not reimburse the Adviser for any advi-
sory fees which are waived or Portfolio expenses which the Adviser may bear
on behalf of the Portfolio for a given fiscal year.
The table above shows various fees and expenses an investor would bear di-
rectly or indirectly. The expenses and fees set forth above are based on the
Portfolio's operations during the fiscal year ended April 30, 1996 except that
they have been restated to reflect current administrative fees. (See "ADMINIS-
TRATIVE SERVICES.")
1
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The following chart shows how much a hypothetical investor would pay in ex-
penses, assuming an initial investment of $1,000, a 5% annual rate of return
and redemption at the end of the time period indicated.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Expenses..................................... $ 9 $27 $47 $104
</TABLE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EX-
PENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE
SHOWN.
2
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PROSPECTUS SUMMARY
INVESTMENT ADVISER
Chicago Asset Management Company (the "Adviser") is a registered investment
adviser specializing in the active management of stocks, bonds and balanced
portfolios for institutional, tax-exempt clients. Founded in 1983, the firm is
a wholly-owned subsidiary of United Asset Management Corporation. The Adviser
currently has over $2 billion in assets under management. (See "INVESTMENT AD-
VISER.")
PURCHASE OF SHARES
Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the
"Distributor"), to investors at net asset value without a sales commission.
Share purchases may be made by sending investments directly to the Fund. The
minimum initial investment is $2,000. The minimum for subsequent investments
is $100. The minimum initial investment for IRA accounts is $500. The minimum
initial investment for spousal IRA accounts is $250. Certain exceptions to the
initial or minimum investment amounts may be made by the officers of the Fund.
(See "PURCHASE OF SHARES.")
DIVIDENDS AND DISTRIBUTIONS
The Portfolio will normally distribute substantially all of its net invest-
ment income in quarterly dividends. The Portfolio will distribute any realized
net capital gains annually. Distributions will be reinvested in Portfolio
shares automatically unless an investor elects to receive cash distributions.
(See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES.")
REDEMPTIONS AND EXCHANGES
Shares of the Portfolio may be redeemed at any time, without cost, at the
net asset value of the Portfolio next determined after receipt of the redemp-
tion request. The redemption price may be more or less than the purchase
price. (See "REDEMPTION OF SHARES.")
ADMINISTRATIVE SERVICES
UAM Fund Services Inc. ("UAMFSI"), a wholly-owned subsidiary of United Asset
Management Corporation, is responsible for performing and overseeing adminis-
tration, fund accounting, dividend disbursing and transfer agency services
provided to the Fund and its Portfolios by third-party service providers. (See
"ADMINISTRATIVE SERVICES.")
RISK FACTORS
The value of the Portfolio's shares will fluctuate in response to changes in
market and economic conditions as well as the financial conditions and pros-
pects
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of the issuers in which the Portfolio invests. Prospective investors should
consider the following: (1) The Portfolio may engage in various strategies to
seek to hedge its investments against movements in security prices, interest
rates, and currency exchange rates by the use of derivatives including options
and futures as well as options on futures. Such strategies are commonly re-
ferred to as "derivatives" and involve the risk of imperfect correlation in
movements in the price of options and futures and movements in the price of
securities, interest rates or currencies which are the subject of the hedge.
To the extent these transactions involve foreign securities or currencies,
they are also subject to the risk factors associated with foreign investments
generally. There can be no assurance that a liquid secondary market for op-
tions and futures contracts will exist at any specific time; (2) The Portfolio
may invest up to 10% of its assets in securities rated lower than Baa by
Moody's Investors Service, Inc. or BBB by Standard & Poor's Corporation. These
securities carry a high degree of credit risk, and are considered speculative
by the major credit rating agencies and are sometimes referred to as "junk
bonds" and "high risk/high yield" securities; (3) The Portfolio may invest up
to 10% of its assets in foreign issuers, which may involve greater risks than
investments in domestic securities, such as foreign currency risk; (4) The
Portfolio may invest in repurchase agreements which entail a risk of loss
should the seller default on its transaction. (5) The Portfolio may lend its
investment securities which entails a risk of loss should a borrower fail fi-
nancially; (6) The Portfolio may purchase securities on a when-issued basis
which does not earn interest until issued and may decline or appreciate in
market value prior to their delivery to the Portfolio. See "OTHER INVESTMENT
POLICIES" for further information.
FINANCIAL HIGHLIGHTS
The following table provides selected information for a share outstanding
throughout the periods presented for the Portfolio. This table is part of the
Portfolio's Financial Statements, which are included in the Portfolio's 1996
Annual Report to Shareholders and the 1996 Semi-Annual Report. The Reports are
incorporated into the Portfolio's SAI. The Portfolio's Financial Statements
have been audited by Price Waterhouse LLP whose unqualified opinion on the Fi-
nancial Statements for the period ended April 30, 1996 is also incorporated
into the Portfolio's SAI. Please read the following information in conjunction
with the Portfolio's 1996 Annual Report to Shareholders and the 1996 Semi-An-
nual Report to Shareholders.
4
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<TABLE>
<CAPTION>
JANUARY 24,
1995** TO YEAR ENDED SIX MONTHS
APRIL 30, APRIL 30, ENDED OCTOBER 31,
1995 1996 1996 (UNAUDITED)
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<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD............................. $ 10.00 $ 10.33 $10.39
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income.............. 0.17 0.64 0.31
Net Realized and Unrealized Gain on
Investments++.................... 0.26 0.14 0.09
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Total from Investment
Operations..................... 0.43 0.78 0.40
------- ------- ------
DISTRIBUTIONS
Net Investment Income.............. (0.10) (0.64) (0.31)
Net Realized Gain.................. -- (0.08) --
------- ------- ------
Total Distributions.............. (0.10) (0.72) (0.31)
------- ------- ------
NET ASSET VALUE, END OF PERIOD....... $ 10.33 $ 10.39 $10.48
======= ======= ======
TOTAL RETURN+........................ 4.31% 7.62% 3.92%
======= ======= ======
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period
(Thousands)........................ $ 5,267 $ 7,981 $8,293
Ratio of Net Expenses to Average Net
Assets............................. 0.80%* 0.84% 0.81%*
Ratio of Net Investment Income to
Average Net Assets................. 6.20%* 6.17% 5.89%*
Portfolio Turnover Rate.............. 0% 24% 13%
Voluntary Waived Fees and Expenses
Assumed by the Adviser Per Share... $ 0.08 $ 0.12 $ 0.06
Ratio of Expenses to Average Net
Assets Including Expense offsets... 0.80%* 0.80% 0.80%*
</TABLE>
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* Annualized.
** Commencement of Operations.
+ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser during the periods indicated.
++ The amount shown for the year ended April 30, 1996 for a share outstanding
throughout that year does not accord with the aggregate net losses on in-
vestments for that year because of the timing of sales and repurchases of
the Portfolio shares in relation to fluctuating market value of the in-
vestments of the Portfolio.
5
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INVESTMENT OBJECTIVE
The Portfolio seeks a high level of current income consistent with moderate
interest rate exposure by investing primarily in investment grade notes or
bonds with an average weighted maturity between 3 and 10 years. The Adviser
seeks to reduce the risk that is inherent in the fast-changing bond market
while adding to the return available from a bond market index.
INVESTMENT POLICIES
The Portfolio seeks to achieve its objective by investing at least 65% of
its total assets under normal circumstances in intermediate-term investment
grade notes or bonds with an average weighted maturity between 3 and 10 years.
Investment grade bonds are generally considered to be those bonds having one
of the four highest grades assigned by Moody's Investors Service, Inc.
("Moody's") (Aaa, Aa, A or Baa) or Standard & Poor's Corporation ("S&P") (AAA,
AA, A or BBB), or, if unrated, of equivalent quality in the Adviser's judg-
ment. Bonds rated Baa or BBB have speculative characteristics and may be more
sensitive to changes in the economy and the financial condition of issuers
than higher rated bonds. The Portfolio may invest no more than 10% of its as-
sets in debt securities that at the time of purchase are rated lower than in-
vestment grade. These are commonly referred to as "junk bonds". See the dis-
cussion of high yield securities in "OTHER INVESTMENT POLICIES" below. The Ad-
viser also reserves the right to retain securities which are downgraded by one
or both of the rating agencies, if in the Adviser's judgment, the retention of
securities is warranted. The Portfolio's SAI contains a more detailed descrip-
tion of corporate bond ratings.
The Adviser will seek to achieve the Portfolio's objective by investing in
the following securities: corporate notes and bonds, mortgage-backed securi-
ties including collateralized mortgage obligations and asset-backed securities
which are deemed by the Adviser and the rating agencies cited above to be of
investment grade quality; variable rate and fixed rate debt securities which
at the time of purchase are rated as investment grade; short-term securities
deemed by the Adviser to have comparable ratings; and securities of, or guar-
anteed by, the U.S. government, its agencies or instrumentalities.
While the Adviser anticipates that the majority of the assets in the Portfo-
lio will be U.S. dollar denominated securities, it reserves the right to pur-
chase obligations of foreign governments, agencies, or corporations denomi-
nated either in U.S. dollars or foreign currencies. The credit quality stan-
dards applied to foreign obligations are the same as those applied to the se-
lection of U.S. based securities.
For temporary defensive purposes, the Portfolio may reduce its holdings of
fixed income securities and increase, up to 100%, its holdings in short-term
investments. The Adviser may employ a defensive investment posture during ad-
verse
6
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market conditions. See "SHORT-TERM INVESTMENTS" below for a description of the
types of short-term instruments in which the Portfolio may invest for tempo-
rary defensive purposes. When the Portfolio is in a temporary defensive posi-
tion, it may not necessarily be pursuing its stated investment objective.
The Portfolio is managed to control the risk of investing in the bond mar-
ket. The Adviser's investment approach offers some protection from fluctuation
in bond prices or volatility. Bond prices fluctuate dramatically due, most
visibly, to changes in interest rates. Other factors impact the value of bonds
held in the Portfolio, as well, including changes in:
. Investors' perception of the value of certain broad classes of
bonds, such as corporate, government or mortgage-backed securities
(sector positioning);
. The relationship between long-term and short-term interest rates
(the yield curve);
. The correlation between yields offered on different types of bonds
(spreads);
. The likelihood that bonds will be redeemed before maturity (option-
adjusted spreads); and
. The fact that the credit outlook for a specific security can change
over time.
Since so many different factors affect bond prices, it has been difficult,
historically, for bond fund managers to outperform a bond market index. The
Adviser believes this is particularly true of bond managers who try to predict
interest rate movements. It has observed that these managers often change in-
vestment strategy at the top or bottom of the market, adding to long-term bond
holdings when interest rates are low and shoring up short-term positions when
interest rates are high. This tendency naturally causes portfolio performance
to vary widely. Therefore, the Adviser does not depend on the use of interest
rate forecasting in managing the Portfolio.
At market tops and bottoms, market psychology tends to drive bond prices to
extremes, overshooting their long-term equilibrium levels. As a result, "con-
ventional wisdom" about a given security or sector's price movement or rela-
tive value, is often wrong. The Adviser believes it will be possible to add to
the Portfolio's return by taking a contrarian approach and also focusing its
efforts on the more traditional aspects of portfolio management. In particu-
lar, the Adviser scrutinizes sector valuations, coupons, call features and the
shape of the yield curve in making its investment decisions. The Portfolio is
conservatively constructed for income.
7
<PAGE>
OTHER INVESTMENT POLICIES
The Portfolio may also, under normal circumstances, invest up to 35% of its
assets, unless restricted by additional limitations described below or in the
Portfolio's SAI, in the following securities, investments or investment tech-
niques.
SHORT-TERM INVESTMENTS
In order to earn a return on uninvested assets, meet anticipated redemp-
tions, or for temporary defensive purposes, the Portfolio may invest a portion
of its assets in domestic and foreign money market instruments including cer-
tificates of deposit, bankers' acceptances, time deposits, U.S. government ob-
ligations, U.S. government agency securities, short-term corporate debt secu-
rities, and commercial paper rated A-1 or A-2 by S&P or Prime-1 or Prime-2 by
Moody's, or if unrated, determined by the Adviser to be of comparable quality.
Time deposits maturing in more than seven days will not be purchased by the
Portfolio, and time deposits maturing from two business days through seven
calendar days will not exceed 10% of the total assets of the Portfolio. The
Portfolio will not invest in any security issued by a commercial bank unless
(i) the bank has total assets of at least $1 billion, or the equivalent in
other currencies, (ii) in the case of U.S. banks, it is a member of the Fed-
eral Deposit Insurance Corporation, and (iii) in the case of foreign branches
of U.S. banks, the security is, in the opinion of the Adviser, of an invest-
ment quality comparable with other debt securities which may be purchased by
the Portfolio.
The Fund has received permission from the Securities and Exchange Commission
(the "SEC") to deposit the daily uninvested cash balances of the Fund's Port-
folios, as well as cash for investment purposes, into one or more joint ac-
counts and to invest the daily balance of the joint accounts in the following
short-term investments: fully collateralized repurchase agreements, interest-
bearing or discounted commercial paper including dollar-denominated commercial
paper of foreign issuers, and any other short-term money market instruments
including variable rate demand notes and tax-exempt money instruments. By en-
tering into these investments on a joint basis, it is expected that the Port-
folio may earn a higher rate of return on investments relative to what it
could earn individually.
The Fund has received permission from the SEC for each of its Portfolios to
invest, for cash management purposes, the greater of 5% of its total assets or
$2.5 million in the Fund's DSI Money Market Portfolio. (See "INVESTMENT
COMPANIES.")
REPURCHASE AGREEMENTS
The Portfolio may invest in repurchase agreements collateralized by U.S.
Government securities, certificates of deposit, and certain bankers' accept-
ances and other securities outlined above under "SHORT-TERM INVESTMENTS." In a
repurchase agreement, the Portfolio buys a security and simultaneously commits
to
8
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sell that security back at an agreed upon price plus an agreed upon market rate
of interest. Under a repurchase agreement, the seller is also required to main-
tain the value of securities subject to the agreement at not less than 100% of
the repurchase price. The Administrator and the Adviser will mark to market
daily the value of the securities purchased. The use of repurchase agreements
involves certain risks. For example, a default by the seller of the agreement
may cause the Portfolio to experience a loss or delay in the liquidation of the
collateral securing the repurchase agreement. The Portfolio might also incur
disposition costs in liquidating the collateral. While the Fund's management
acknowledges these risks, it is expected that they can be controlled through
stringent security selection criteria and careful monitoring procedures. The
Fund has received permission from the SEC to pool daily uninvested cash bal-
ances of the Fund's Portfolios in order to invest in repurchase agreements on a
joint basis. By entering into joint repurchase agreements, the Portfolio may
incur lower transactions costs and earn higher rates of interest on joint re-
purchase agreements. The Portfolio's contribution would determine its return
from a joint repurchase agreement (See "SHORT TERM INVESTMENTS.")
LENDING OF SECURITIES
The Portfolio may lend its investment securities to qualified institutional
investors as a means of earning income. The Portfolio will not loan securities
to the extent that greater than one-third of its assets at fair market value
would be committed to loans. During the term of a loan, the Portfolio is sub-
ject to a gain or loss depending on any increase or decrease in the market
price of the securities loaned. Lending of securities is subject to review by
the Fund's Board of Trustees. All relevant facts and circumstances, including
the creditworthiness of the broker, dealer or institution, will be considered
in making decisions about securities lending.
An investment company may pay reasonable negotiated fees in connection with
loaned securities so long as such fees are set forth in a written contract and
approved by its Board of Trustees. The Portfolio will continue to retain any
voting rights with respect to loaned securities. If a material event occurs af-
fecting an investment on loan, the loan must be called and the securities vot-
ed.
WHEN-ISSUED, FORWARD DELIVERY AND DELAYED SETTLEMENT SECURITIES
The Portfolio may purchase and sell securities on a "when-issued," "delayed
settlement," or "forward delivery" basis. "When-issued" or "forward delivery"
refers to securities whose terms and indenture are available, and for which a
market exists, but which are not available for immediate delivery. When-issued
and forward delivery transactions may be expected to occur a month or more be-
fore delivery is due. Delayed settlement is a term used to describe settlement
of a securities transaction in the secondary market which will occur sometime
in the future. No payment or delivery is made by the Portfolio until it re-
ceives payment
9
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or delivery from the other party to any of the above transactions. It is possi-
ble that the market price of the securities at the time of delivery may be
higher or lower than the purchase price. The Portfolio will maintain a separate
account of cash or liquid securities at least equal to the value of purchase
commitments until payment is made. Typically, no income accrues on securities
purchased on a delayed delivery basis prior to the time delivery is made al-
though the Portfolio may earn income on securities it has deposited in a segre-
gated account.
The Portfolio may engage in these types of purchases in order to buy securi-
ties that fit with its investment objectives at attractive prices -- not to in-
crease its investment leverage.
PORTFOLIO TURNOVER
Portfolio turnover is not anticipated to exceed 150%. In addition to Portfo-
lio trading costs, higher rates of portfolio turnover may result in the reali-
zation of capital gains. See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES"
for more information on taxation. The Portfolio will not normally engage in
short-term trading, but reserves the right to do so. The tables set forth in
"Financial Highlights" present the Portfolio's historical portfolio turnover
ratios.
INVESTMENT COMPANIES
The Portfolio reserves the right to invest up to 10% of its total assets,
calculated at the time of investment, in the securities of other open-end or
closed-end investment companies. No more than 5% of the investing Portfolio's
total assets may be invested in the securities of any one investment company,
nor may it acquire more than 3% of the voting securities of any other invest-
ment company. The Portfolio will indirectly bear its proportionate share of any
management fees paid by an investment company in which it invests in addition
to the advisory fee paid by the Portfolio.
The Fund has received permission from the SEC to allow each of its Portfolios
to invest, for cash management purposes, the greater of 5% of its total assets
or $2.5 million in the Fund's DSI Money Market Portfolio, provided that the in-
vestment is consistent with the Portfolio's investment policies and restric-
tions. Based upon the Portfolio's assets invested in the DSI Money Market Port-
folio, the investing Portfolio's adviser will waive its investment advisory fee
and any other fees earned as a result of the Portfolio's investment in the DSI
Money Market Portfolio. The investing Portfolio will bear expenses of the DSI
Money Market Portfolio on the same basis as all of its other shareholders.
FOREIGN INVESTMENTS
Investing in foreign companies may involve additional risks and considera-
tions which are not typically associated with investing in U.S. companies.
Since stocks of foreign companies are normally denominated in foreign curren-
cies, the Portfolio may be affected favorably or unfavorably by changes in cur-
rency rates
10
<PAGE>
and in exchange control regulations, and may incur costs in connection with
conversions between various currencies.
As non-U.S. companies are not generally subject to uniform accounting, audit-
ing and financial reporting standards and practices comparable to those appli-
cable to U.S. companies, comparable information may not be readily available
about certain foreign companies. Securities of some non-U.S. companies may be
less liquid and more volatile than securities of comparable U.S. companies. In
addition, in certain foreign countries, there is the possibility of expropria-
tion or confiscatory taxation, political or social instability, or diplomatic
developments which could affect U.S. investments in those countries.
RESTRICTED AND ILLIQUID SECURITIES
The Portfolio may purchase restricted securities that are not registered for
sale to the general public but which are eligible for resale to qualified in-
stitutional investors under Rule 144A of the Securities Act of 1933. Under the
supervision of the Fund's Board of Trustees, the Adviser determines the liquid-
ity of such investments by considering all relevant factors. Provided that a
dealer or institutional trading market in such securities exists, these re-
stricted securities are not treated as illiquid securities for purposes of the
Portfolio's investment limitations. The Portfolio may also invest up to 15% of
its net assets in securities that are illiquid. Prices realized from the sales
of these securities could be more or less than those originally paid by the
Portfolio or less than what may be considered the fair value of such securi-
ties.
MORTGAGE-BACKED AND ASSET-BACKED SECURITIES
The Portfolio may invest in pools of consumer loans or mortgages such as col-
lateralized mortgage obligations. Asset-backed securities may consist of secu-
rities collateralized by shorter term loans such as automobile loans, home eq-
uity loans or credit card receivables, the payments from which are passed
through to the security holder. The value of these securities may be signifi-
cantly affected by changes in interest rates, the market's perceptions of the
issuers, and the creditworthiness of the parties involved. Mortgage-backed se-
curities in which the Portfolio may invest will either carry a guarantee from
an agency of the U.S. government or a private issuer of the timely payment of
principal and interest or are sufficiently seasoned to be considered by the Ad-
viser to be of investment grade quality.
Mortgage-backed and asset-backed securities are also subject to prepayment
risks. Prepayment risk is the possibility that, during periods of declining in-
terest rates, mortgage prepayments will accelerate on mortgage-backed securi-
ties, especially on those with high stated interest rates. Prepayment risk has
two important effects. First, like bonds in general, mortgage-backed securities
will generally decline in price when interest rates rise. Second, when interest
rates fall and additional mortgage prepayments must be reinvested at lower in-
terest rates, the Portfo-
11
<PAGE>
lio's rate of dividend income may be reduced. Mortgage-backed and asset-backed
securities held by the Portfolio will be rated investment grade by Moody's or
S&P at the time of purchase, or if unrated, determined to be of equivalent
quality by the Adviser.
HIGH YIELD/HIGH RISK SECURITIES
The Portfolio may invest up to 10% of its assets in high yield securities
which are rated below investment grade or are unrated. Lower rated or unrated
securities are more likely to react to developments affecting market and credit
risk than are more highly rated securities, which react primarily to movements
in the general level of interest rates. The market values of fixed-income secu-
rities tend to vary inversely with the level of interest rates. Yields and mar-
ket values of high yield securities will fluctuate over time, reflecting not
only changing interest rates, but also the market's perception of credit qual-
ity and the outlook for economic growth. When economic conditions appear to be
deteriorating, medium to lower rated securities may decline in value due to
heightened concern over credit quality, regardless of prevailing interest
rates. The Adviser will consider both credit risk and market risk in selecting
fixed income securities for the Portfolio.
The high yield securities market is still relatively new and its recent
growth paralleled a long period of economic expansion and an increase in merg-
er, acquisition and leveraged buyout activity. Adverse economic developments
may disrupt the market for high yield securities, and severely affect the abil-
ity of issuers, especially highly leveraged issuers, to service their debt ob-
ligations or to repay their obligations upon maturity. In addition, the second-
ary market for high yield securities, which is concentrated in relatively few
market makers, may not be as liquid as the secondary market for more highly
rated securities. As a result, the Adviser could find it more difficult to sell
these securities or may be able to sell the securities only at prices lower
than if such securities were widely traded. Prices realized upon the sale of
such lower rated or unrated securities, under these circumstances, may be less
than the prices used in calculating the Portfolio's net asset value.
Prices for high yield securities may be affected by legislative and regula-
tory developments. These laws could adversely affect the Portfolio's net asset
value and investment practices, the secondary market for high yield securities,
the financial condition of issuers of these securities and the value of out-
standing high yield securities. For example, federal legislation requiring the
divestiture by federally insured savings and loan associations of their invest-
ments in high yield bonds and limiting the deductibility of interest by certain
corporate issuers of high yield bonds adversely affected the market in recent
years.
Lower rated or unrated debt obligations also present risks based on payment
expectations. If an issuer calls the obligations for redemption, the Fund may
have to replace the security with a lower yielding security, resulting in a de-
creased return for investors. If the Portfolio experiences unexpected net re-
demptions, it may be
12
<PAGE>
forced to sell its higher rated securities, resulting in a decline in the
overall credit quality of the Portfolio's investment portfolio and increasing
the exposure of the Portfolio to the risks of high yield securities.
HEDGING AND RELATED STRATEGIES AND RISK CONSIDERATIONS
The Portfolio may use options (both exchange-traded and over-the-counter) to
attempt to enhance income. To reduce the overall risk of its investments
(hedge), the Portfolio may use options, futures contracts, options on futures
contracts, and forward currency contracts. These instruments are commonly re-
ferred to as derivatives. Hedging strategies may also be used in an attempt to
manage the Portfolio's exposure to changing interest rates, security prices
and currency exchange rates. The Portfolio may buy or sell futures contracts,
write covered call options and buy put and call options on any security, index
or currency including options and futures traded on foreign exchanges and op-
tions not traded on exchanges. The Portfolio's ability to use these strategies
may be limited by market conditions, regulatory limits and tax considerations.
The Portfolio's obligation under such hedging strategies will be covered by
the maintenance of a segregated account consisting of cash or liquid securi-
ties equal to at least 100% of the Portfolio's commitment. The SAI contains
further information on all of these strategies and the risks associated with
them.
The Portfolio may write or purchase options in privately negotiated transac-
tions ("OTC Options") as well as listed options. OTC Options can be closed out
only by agreement with the other party to the transaction. Any OTC Option pur-
chased by the Portfolio is considered an illiquid security. Any OTC Option
written by the Portfolio will be with a qualified dealer pursuant to an agree-
ment under which the Portfolio may repurchase the option at a formula price.
Such options are considered illiquid to the extent that the formula price ex-
ceeds the intrinsic value of the option. The Portfolio may not purchase or
sell futures contracts or related options for which the aggregate initial mar-
gin and premiums exceed 5% of the fair market value of the Portfolio's assets.
In order to prevent leverage in connection with the purchase of futures con-
tracts or call options thereon by the Portfolio, an amount of cash, cash
equivalents or liquid high grade debt securities equal to the market value of
the obligation under the futures contracts or options (less any related market
deposits) will be maintained in a segregated account with the Fund's Custodian
Bank. The Portfolio may not invest more than 15% of its net assets in illiquid
securities and repurchase agreements which have a maturity of longer than
seven days. A more complete discussion of the potential risks involved in
transactions in options or futures contracts and related options is contained
in the SAI.
The Portfolio may enter into forward currency contracts for the purchase or
sale of a specified currency at a specified future date either with respect to
specific transactions or with respect to portfolio positions. The Portfolio
also may enter into
13
<PAGE>
a forward contract to sell an amount of a foreign currency approximating the
value of some or all of the Portfolio's securities denominated in such curren-
cy.
The Portfolio may use forward contracts in one currency or a basket of cur-
rencies to hedge against fluctuations in the value of another currency when the
Adviser anticipates there will be a correlation between the two and may use
forward currency contracts to shift the Portfolio's exposure to foreign cur-
rency fluctuations from one country to another. The purpose of entering into
these contracts is to minimize the risk to the Portfolio from adverse changes
in the relationship between the U.S. dollar and foreign currencies.
The Portfolio may enter into interest rate protection transactions, which
consist of interest rate swaps and interest rate caps, collars and floors, for
hedging purposes. These transactions are commonly referred to as derivatives. A
swap is an agreement to exchange the return generated by one instrument for the
return generated by another instrument. The swaps in which the Portfolio may
also engage include interest rate caps, floors and collars under which one
party pays a single or periodic fixed amount (or premium), and the other party
pays periodic amounts on movement of a specified index.
The Portfolio may enter into interest rate protection transactions to pre-
serve a return or spread on a particular investment or portion of its portfolio
or to protect against any increase in the price of securities it anticipates
purchasing at a later date. The Portfolio will enter into interest rate protec-
tion transactions only with banks and recognized securities dealers believed by
the Adviser to present minimal credit risks in accordance with guidelines es-
tablished by the Fund's Board of Trustees. Interest rate swaps, caps, floors
and collars will be treated as illiquid securities and will therefore, be sub-
ject to the Portfolio's investment restriction limiting investment in illiquid
securities to no greater than 15% of its net assets.
RISK CONSIDERATIONS. The Portfolio might not employ any of the hedging strat-
egies described above, and there can be no assurance that any strategy used
will succeed. If the Adviser incorrectly forecasts interest rates, market val-
ues or other economic factors in utilizing a hedging strategy for the Portfo-
lio, the Portfolio would be in a better position if it had not hedged at all.
In addition, the Portfolio will pay commissions and other costs in connection
with such hedging strategies, which may increase the Portfolio's expenses and
reduce its return.
The use of these strategies involves certain risks, including (1) the fact
that skills needed to use hedging instruments are different from those needed
to select the Portfolio's securities, (2) possible imperfect correlation, or
even no correlation, between price movements of hedging instruments and price
movements of the investments being hedged, (3) the fact that, while hedging
strategies can reduce the risk of loss, they can also reduce the opportunity
for gain, or even result in losses, by offsetting favorable price movements in
hedged investments and (4) the possible
14
<PAGE>
inability of the Portfolio to purchase or sell a portfolio security at a time
that otherwise would be favorable for it to do so, or the possible need for
the Portfolio to sell a portfolio security at a disadvantageous time, due to
the need for it to maintain "cover" or to segregate securities in connection
with hedging transactions and the possible inability of the Portfolio to close
out or to liquidate its hedged position.
INVESTMENT LIMITATIONS
The Portfolio will not:
(a) with respect to 75% of its assets, invest more than 5% of its total
assets at the time of purchase in the securities of any single issuer
(other than obligations issued or guaranteed as to principal and in-
terest by the U.S. Government or any of its agencies or instrumentali-
ties);
(b) with respect to 75% of its assets, purchase more than 10% of any class
of the outstanding voting securities of any issuer;
(c) invest more than 5% of its assets at the time of purchase in the secu-
rities of companies that have (with predecessors) a continuous operat-
ing history of less than 3 years;
(d) invest more than 25% of its assets in companies within a single indus-
try; however, there are no limitations on investments made in instru-
ments issued or guaranteed by the U.S. Government and its agencies.
(e) make loans except by purchasing debt securities in accordance with its
investment objective and policies or entering into repurchase agree-
ments or by lending its portfolio securities to banks, brokers, deal-
ers and other financial institutions so long as the loans are made in
compliance with the 1940 Act, as amended, or the Rules and Regulations
or interpretations of the SEC;
(f) (i) borrow, except from banks and as a temporary measure for extraor-
dinary or emergency purposes and then, in no event, in excess of 33
1/3% of the Portfolio's gross assets valued at the lower of market or
cost, and (ii) the Portfolio may not purchase additional securities
when borrowings exceed 5% of total assets; or
(g) pledge, mortgage or hypothecate any of its assets to an extent greater
than 33 1/3% of its total assets at fair market value.
The investment objective of the Portfolio is fundamental and may be changed
only with the approval of the holders of a majority of the outstanding shares
of the Portfolio. Except for limitations (a), (b), (d), (e) and (f)(i), the
Portfolio's investment limitations and policies described in this Prospectus
and in the SAI are not fundamental and may be changed by the Fund's Board of
Trustees upon reasonable notice to investors. All other investment limitations
described here and
15
<PAGE>
in the SAI are fundamental policies and may be changed only with the approval
of the holders of a majority of the outstanding shares of the Portfolio. If a
percentage limitation on investment or utilization of assets as set forth above
is adhered to at the time an investment is made, a later change in percentage
resulting from changes in the value or total cost of the Portfolio's assets
will not be considered a violation of the restriction.
PURCHASE OF SHARES
Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the
"Distributor"), without a sales commission at the net asset value next deter-
mined after an order is received by the Custodian (See "VALUATION OF SHARES.")
The minimum initial investment required is $2,000. The minimum initial invest-
ment for IRA accounts is $500. The minimum initial investment for spousal IRA
accounts is $250. Certain exceptions may be made by the officers of the Fund.
Shares of the Portfolio may be purchased by customers of broker-dealers or
other financial intermediaries ("Service Agents") which have established a
shareholder servicing relationship with the Fund on behalf of their customers.
Service Agents may impose additional or different conditions or other account
fees on the purchase and redemption of Portfolio shares by their customers.
Each Service Agent is responsible for transmitting to its customers a schedule
of any such fees and information regarding any additional or different purchase
and redemption conditions. Shareholders who are customers of Service Agents
should consult their Service Agent for information regarding these fees and
conditions. Amounts paid to Service Agents may include transaction fees and/or
service fees paid by the Fund from the Fund assets attributable to the Service
Agent, and would not be imposed if shares of the Portfolio were purchased di-
rectly from the Fund or the Distributor. The Service Agents may provide share-
holder services to their customers that are not available to a shareholder
dealing directly with the Fund. A salesperson and any other person entitled to
receive compensation for selling or servicing Portfolio shares may receive dif-
ferent compensation with respect to one particular class of shares over another
in the Fund.
Service Agents may enter confirmed purchase orders on behalf of their custom-
ers. If shares of the Portfolio are purchased in this manner, the Service Agent
must receive your investment order before the close of trading on the New York
Stock Exchange ("NYSE"), and transmit it to the Fund's Sub-Transfer Agent prior
to 4 p.m., to receive that day's share price. Proper payment for the order must
be received by the Sub-Transfer Agent no later than the time when the Portfolio
is priced on the following business day. Service Agents are responsible to
their customers and the Fund for timely transmission of all subscription and
redemption requests, investment information, documentation and money.
16
<PAGE>
INITIAL INVESTMENT
BY MAIL
.Complete and sign an Application, and mail it together with a check
payable to UAM Funds to:
UAM Funds Trust
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
Payment for purchases of shares received by mail will be credited to an ac-
count at the next share price calculated for the Portfolio after receipt. Pay-
ment does not need to be converted into Federal Funds (monies credited to the
Fund's Custodian Bank by a Federal Reserve Bank) before the Fund will accept
it for investment.
BY WIRE
. Telephone the UAM Funds Service Center and provide the account name, ad-
dress, telephone number, social security or taxpayer identification num-
ber, Portfolio selected, amount being wired and the name of the bank
wiring the funds. An account number will then be provided to you. Next,
. instruct your bank to wire the specified amount to the Fund's Custodian:
The Chase Manhattan Bank
ABA #021000021
UAM Funds
DDA Acct. #9102772952
Ref: Portfolio Name
Your Account Number
Your Account Name
Wire Control Number
. Forward a completed Application to the Fund at the address shown on the
form. Federal Funds purchases will be accepted only on a day on which
both the NYSE and the Custodian Bank are open for business.
ADDITIONAL INVESTMENTS
Additional investments can be made at any time. The minimum additional in-
vestment is $100. Shares can be purchased at net asset value by mailing a
check to the UAM Service Center (payable to "UAM Funds") or by wiring money to
the Custodian Bank using the instructions outlined above. When making addi-
tional investments, be sure that the account name and number is identified on
the check or wire and the Portfolio to be purchased is specified.
17
<PAGE>
Prior to wiring additional investments, notify the Fund by calling the num-
ber on the cover of this prospectus. Mail orders should include, when possi-
ble, the "Invest by Mail" stub which accompanies any Fund confirmation state-
ment.
OTHER PURCHASE INFORMATION
Investments received by 4 p.m. ET (the close of the NYSE) will be invested
at the share price calculated after the NYSE closes on that day. Investments
received after the close of the NYSE will be executed at the price computed on
the next day the NYSE is open. The Fund reserves the right, in its sole dis-
cretion, to suspend the offering of shares of each Portfolio or to reject pur-
chase orders when, in the judgment of management, such suspension or rejection
is in the best interests of the Fund. Purchases of the Portfolio's shares will
be made in full and fractional shares of the Portfolio calculated to three
decimal places. Certificates for fractional shares will not be issued. Certif-
icates for whole shares will not be issued except at the written request of
the shareholder.
IN-KIND PURCHASES
If accepted by the Fund, shares of the Portfolio may be purchased in ex-
change for securities which are eligible for acquisition by the Portfolio, as
described in this Prospectus. Securities to be exchanged which are accepted by
the Fund will be valued as described under "VALUATION OF SHARES" at the next
determination of net asset value after acceptance. Shares issued by the Port-
folio in exchange for securities will be issued at net asset value determined
as of the same time. All dividends, interest, subscription, or other rights
pertaining to such securities shall become the property of the Portfolio and
must be delivered to the Fund by the investor upon receipt from the issuer.
Securities acquired through an in-kind purchase will be acquired for invest-
ment and not for immediate resale.
The Fund will not accept securities in exchange for shares of the Portfolio
unless:
. at the time of exchange, such securities are eligible to be in-
cluded in the Portfolio (current market quotations must be readily
available for such securities);
. the investor represents and agrees that all securities offered to
be exchanged are liquid securities and not subject to any restric-
tions upon their sale by the Portfolio under the Securities Act of
1933, or otherwise; and
. the value of any such securities (except U.S. Government securi-
ties) being exchanged together with other securities of the same
issuer owned by the Portfolio will not exceed 5% of the net assets
of the Portfolio immediately after the transaction.
Investors who are subject to Federal taxation upon exchange may realize a
gain or loss for Federal income tax purposes depending upon the cost of secu-
rities
18
<PAGE>
or local currency exchanged. Investors interested in such exchanges should
contact the Adviser.
REDEMPTION OF SHARES
Shares of the Portfolio may be redeemed by mail or telephone, at any time,
without cost, at the net asset value of the Portfolio next determined after
receipt of the redemption request. No charge is made for redemptions. Any re-
demption may be more or less than the purchase price of your shares depending
on the market value of the investment securities held by the Portfolio.
BY MAIL
Address requests for redemption to the UAM Funds Service Center. Requests to
redeem shares must include:
. share certificates, if issued;
. a letter of instruction or an assignment specifying the number of
shares or dollar amount to be redeemed, signed by all registered
owners of the shares in the exact names in which they are regis-
tered;
. any required signature guarantees (see "SIGNATURE GUARANTEES"); and
. any other necessary legal documents, if required, in the case of
estates, trusts, guardianships, custodianships, corporations, pen-
sion and profit sharing plans and other organizations.
BY TELEPHONE
A redemption request by telephone requires the following:
. establish the telephone redemption privilege (and if desired, the
wire redemption privilege) by completing appropriate sections of
the Application; and
. call the Fund and instruct that the redemption proceeds be mailed
to you or wired to your bank.
The following tasks cannot be accomplished by telephone:
. changing the name of the commercial bank or the account designated
to receive redemption proceeds (this can be accomplished only by a
written request signed by each shareholder, with each signature
guaranteed);
. redemption of certificated shares by telephone.
The Fund and its Sub-Transfer Agent will employ reasonable procedures to
confirm that instructions communicated by telephone are genuine, and they may
be liable for any losses if they fail to do so. These procedures include re-
quiring the investor to provide certain personal identification at the time an
account is opened,
19
<PAGE>
as well as prior to effecting each transaction requested by telephone. In ad-
dition, all telephone transaction requests will be recorded and investors may
be required to provide additional telecopied written instructions of such
transaction requests. The Fund or Sub-Transfer Agent may be liable for any
losses due to unauthorized or fraudulent telephone instructions if the Fund or
the Sub-Transfer Agent does not employ the procedures described above. Neither
the Fund nor the Sub-Transfer Agent will be responsible for any loss, liabili-
ty, cost or expense for following instructions received by telephone that it
reasonably believes to be genuine.
SIGNATURE GUARANTEES
Signature guarantees are required for the following redemptions:
. redemptions where the proceeds are to be sent to someone other than
the registered shareholder(s)
. redemptions where the proceeds are to be sent to an address which
is not the registered address; or
. share transfer requests.
Signature guarantees will be accepted from any eligible guarantor institu-
tion which participates in a signature guarantee program. Eligible guarantor
institutions include banks, as well as through most brokers, dealers, credit
unions, national securities exchanges, registered securities associations,
clearing agencies and savings associations. Broker-dealers guaranteeing signa-
tures must be a member of a clearing corporation or maintain net capital of at
least $100,000. Credit unions must be authorized to issue signature guaran-
tees. A notary public can not provide a signature guarantee.
OTHER REDEMPTION INFORMATION
Normally, the Fund will make payment for all shares redeemed under proper
procedures within one business day of and no more than seven days after re-
ceipt of the request, or earlier if required under applicable law. The Fund
may suspend the right of redemption or postpone the date at times when the
NYSE and Custodian Bank are closed, or under any emergency circumstances as
determined by the SEC.
If the Fund's Board of Trustees determines that it would be detrimental to
the best interests of the remaining shareholders of the Fund to make payments
wholly or partly in cash, the Fund may pay the redemption proceeds in whole or
in part by a distribution in-kind of liquid securities held by the Portfolio
in lieu of cash in conformity with applicable rules of the SEC. Investors may
incur brokerage charges when they sell portfolio securities received in pay-
ment of redemptions.
20
<PAGE>
SHAREHOLDER SERVICES
EXCHANGE PRIVILEGE
Institutional Class Shares of each Portfolio may be exchanged for Institu-
tional Class Shares of any other UAM Funds Portfolio. (See the list of Portfo-
lios of the UAM Funds at the end of this Prospectus.) Exchange requests should
be made by contacting the UAM Funds Service Center.
Any exchange will be based on the net asset value of the shares involved.
There is no sales commission or charge of any kind for an exchange. Before
making an exchange into a Portfolio, a shareholder should read its Prospectus
and consider the investment objectives of the Portfolio to be purchased. Call
the UAM Funds Service Center for a copy of the Prospectus for the Portfolio(s)
in which you are interested. Exchanges can only be made with Portfolios that
are qualified for sale in a shareholder's state of residence.
Exchange requests may be made either by mail or telephone. Telephone ex-
changes will be accepted only if the certificates for the shares to be ex-
changed have not been issued to the shareholder and if the registration of the
two accounts will be identical. Requests for exchanges received prior to 4
p.m. (ET) will be processed as of the close of business on the same day. Re-
quests received after 4 p.m. will be processed on the next business day. The
Board of Trustees may limit the frequency and amount of exchanges permitted.
For additional information regarding responsibility for the authenticity of
telephoned instructions, see "REDEMPTION OF SHARES -- BY TELEPHONE." An ex-
change into another UAM Funds Portfolio is a sale of shares and may result in
a gain or loss for income tax purposes. The Fund may modify or terminate the
exchange privilege at any time.
VALUATION OF SHARES
The net asset value of the Portfolio is determined by dividing the value of
the Portfolio's assets, less any liabilities, by the number of shares out-
standing. The net asset value per share of the Portfolio is determined as of
the close of the NYSE on each day that the NYSE is open for business.
Equity securities listed on a securities exchange for which market quota-
tions are readily available are valued at the last quoted sale price of the
day. Price information on listed securities is taken from the exchange where
the security is primarily traded. Unlisted equity securities and listed secu-
rities not traded on the valuation date for which market quotations are read-
ily available are valued neither exceeding the current asked prices nor less
than the current bid prices. Quotations of foreign securities in a foreign
currency are converted to U.S. dollar equivalents. The converted value is
based upon the bid price of the foreign currency against U.S. dollars quoted
by any major bank or by a broker.
21
<PAGE>
Bonds and other fixed income securities are valued according to the broadest
and most representative market, which will ordinarily be the over-the-counter
market. Bonds and other fixed income securities may be valued on the basis of
prices provided by a pricing service when such prices are believed to reflect
the fair market value of such securities. Securities purchased with remaining
maturities of 60 days or less are valued at amortized cost when the Board of
Trustees determines that amortized cost reflects fair value.
The value of other assets and securities for which no quotations are readily
available (including restricted securities) is determined in good faith at
fair value using methods determined by the Fund's Board of Trustees.
PERFORMANCE CALCULATIONS
The Portfolio measures performance by calculating yield and total return.
Both yield and total return figures are based on historical earnings and are
not intended to indicate future performance.
Yield refers to the income generated by an investment in the Portfolio over
a given period of time, expressed as an annual percentage rate. Yields are
calculated according to a standard that is required for all bond funds. As
this differs from other accounting methods, the quoted yield may not equal the
income actually paid to shareholders.
Total return is the change in value of an investment in the Portfolio over a
given period, assuming reinvestment of any dividends and capital gains. A cu-
mulative or aggregate total return reflects actual performance over a stated
period of time. An average annual total return is a hypothetical rate of re-
turn that, if achieved annually, would have produced the same cumulative total
return if performance had been constant over the entire period.
The Portfolio's performance may be compared to data prepared by independent
services which monitor the performance of investment companies, data reported
in financial and industry publications, and various indices as further de-
scribed in the Portfolio's SAI. This information may also be included in sales
literature and advertising.
The Portfolio's Annual Report to Shareholders for the most recent fiscal
year end contains additional performance information that includes comparisons
with appropriate indices. The Annual Report is available without charge. Con-
tact the UAM Funds Service Center at the address or phone number on the cover
of this Prospectus.
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
DIVIDENDS AND CAPITAL GAINS
The Portfolio will normally distribute substantially all of its net invest-
ment income (for tax purposes) to shareholders in quarterly dividends. If any
net capital
22
<PAGE>
gains are realized, the Portfolio will normally distribute such gains annual-
ly. All dividends and capital gains distributions will be automatically rein-
vested in additional shares of the Portfolio unless the Fund is notified in
writing that the shareholder elects to receive distributions in cash.
FEDERAL TAXES
The Portfolio intends to qualify as a "regulated investment company" under
subchapter M of the Internal Revenue Code of 1986, as amended, for federal in-
come tax purposes and to meet all other requirements that are necessary for it
(but not its shareholders) to be exempt from federal taxes on income and gains
paid to shareholders in the form of dividends. To do this, the Portfolio must,
among other things, distribute substantially all of its ordinary income and
net capital gains on an annual basis and maintain a portfolio of investments
which satisfies certain diversification criteria.
Dividends paid by the Portfolio from net investment income, whether in cash
or reinvested in shares, are taxable to shareholders as ordinary income.
Short-term capital gains will be taxed as ordinary income. Long-term capital
gains distributions are taxed as long-term capital gains. Shareholders will be
notified annually of dividend income earned for tax purposes.
Dividends declared in October, November and December to shareholders of rec-
ord in such a month will be treated as if they had been paid by the Fund and
received by the shareholders on December 31 of the same calendar year, pro-
vided that the dividends are paid before February of the following year.
The Fund is required by Federal law to withhold 31% of reportable payments
paid to shareholders who have not complied with IRS regulations. In order to
avoid this withholding requirement, you must certify that your Social Security
or Taxpayer Identification Number you have provided is correct and that either
you are not currently subject to backup withholding or you are exempt from
backup withholding. This certification must be made on the Application or on a
separate form supplied by the Fund.
Dividends and interest received by the Portfolio may give rise to withhold-
ing and other taxes imposed by foreign countries. These taxes reduce the Port-
folio's dividends but are included in the taxable income reported on your tax
statement if the Portfolio qualifies for this tax treatment and elects to pass
it through to you. Consult a tax adviser for more information regarding deduc-
tions and credits for foreign taxes.
INVESTMENT ADVISER
The Adviser is a registered investment adviser formed in 1983. Its business
offices are located at 70 West Madison Street, 56th Floor, Chicago, IL 60602.
It is a wholly-owned subsidiary of United Asset Management Corporation ("UAM")
23
<PAGE>
and provides and offers investment management and advisory services to corpo-
rations, unions, pensions and profit-sharing plans, trusts, estates and other
institutions and investors. The Adviser currently has over $2 billion in as-
sets under management.
The Portfolio pays an annual fee in monthly installments to the adviser for
advisory services. This fee is accrued daily and paid monthly as a percentage
of the average daily net assets in the Portfolio for that month. The percent-
age fee on an annual basis is 0.48%.
The Adviser may compensate its affiliated companies for referring investors
to the Portfolio. The Distributor, UAM, the Adviser, or any of their affili-
ates, may, at its own expense, compensate a Service Agent or other person for
marketing, shareholders servicing, record-keeping and/or other services per-
formed with respect to the Fund, a Portfolio or any Class of Shares of a Port-
folio. Payments made for any of these purposes may be made from the paying
entity's profits or any other source available to it. When such services ar-
rangements are in effect, they are made generally available to all qualified
service providers.
The Distributor, the Adviser and certain of their affiliates also partici-
pate, at the date of this Prospectus, in an arrangement with Smith Barney Inc.
under which Smith Barney provides certain defined contribution plan marketing
and other shareholder services and receives from such entities .15 of 1% of
the daily net asset value of Institutional Class Shares held by Smith Barney's
eligible customer accounts in addition to amounts payable to all selling deal-
ers. The Fund also compensates Smith Barney for services it provides to cer-
tain defined contribution plan shareholders that are not otherwise provided by
UAMFSI.
The investment professionals at the Adviser responsible for the day-to-day
management of the Portfolio and their qualifications are as follows:
<TABLE>
<C> <S>
Jon F. Holsteen, President, CEO and Chief Investment Officer
Education: Lake Forest College, BA
Experience: Founded Chicago Asset Management Company in 1983.
William W. Zimmer, Executive Vice President and Chief Fixed Income Portfolio
Manager
Education: Cornell College (Iowa), BA
Cornell University (New York), MBA
Experience: Joined Chicago Asset Management Company in 1988.
Frank F. Holsteen, Vice President
Education: Lake Forest College, BA
Experience: Joined Chicago Asset Management Company in 1993.
</TABLE>
24
<PAGE>
ADVISER'S HISTORICAL PERFORMANCE
Below are certain performance data provided by the Adviser pertaining to the
composite of separately managed accounts of the Adviser that are managed with
substantially similar (although not necessarily identical) objectives, poli-
cies and strategies as those of the Portfolio. The investment returns of the
Portfolio may differ from those of the separately managed accounts because
such separately managed accounts may have fees and expenses that differ from
those of the Portfolio. Further, the separately managed accounts are not sub-
ject to investment limitations, diversification requirements and other re-
strictions imposed by the Investment Company Act of 1940 and Internal Revenue
Code; such conditions, if applicable, may have lowered the returns for sepa-
rately managed accounts. The results presented are not intended to predict or
suggest the return to be experienced by the Portfolio or the return an in-
vestor might achieve by investing in the Portfolio.
CHICAGO ASSET MANAGEMENT COMPANY-- INTERMEDIATE BOND & CASH COMPOSITE RETURNS
(PERCENTAGE RETURNS OF NET OF MANAGEMENT FEES)
<TABLE>
<CAPTION>
CHICAGO LEHMAN BROTHERS
ASSET INTERMEDIATE
MANAGEMENT GOVERNMENT/CORPORATE
COMPANY INDEX
---------- --------------------
<S> <C> <C>
One year period through:
1985....................................... 22.0% 18.1%
1986....................................... 15.2% 13.1%
1987....................................... 0.7% 3.7%
1988....................................... 7.0% 6.7%
1989....................................... 13.0% 12.8%
1990....................................... 8.8% 9.2%
1991....................................... 17.1% 14.7%
1992....................................... 8.6% 7.2%
1993....................................... 10.2% 8.8%
1994....................................... (2.4)% (1.9)%
1995....................................... 15.8% 15.3%
Year to Date (1/1/96-9/30/96).............. 1.6% 1.6%
Annualized through 9/30/96................. 9.8% 9.1%
Cumulative through 9/30/96................. 199.3% 179.2%
Eleven-Year Mean........................... 10.5% 9.8%
Value of $1 invested during 11 years
(1/1/85-9/30/96)......................... $2.99 $2.79
</TABLE>
Notes:
1. The annualized return is calculated from monthly data, allowing for com-
pounding. The formula used is in accordance with the acceptable methods
set
25
<PAGE>
forth by the Association for Investment Management Research ("AIMR") on a
going-forward basis beginning February 1, 1993 the Bank Administration in-
stitute, and the Investment Counsel Association of America. Results prior
to January 1, 1993 are not in compliance with AIRM, the only difference
being the use of end-of-period values to weight portfolios instead of be-
ginning-of-period values. Market Value of the account was the sum of the
account's total assets, including cash, cash equivalents, short term in-
vestments, and securities valued at current market prices.
2. The cumulative return means that $1 invested in the composite account on
January 1, 1985 had grown to $2.99 by September 30, 1996.
3. The eleven-year mean is the arithmetic average of the annual returns for
the years listed.
4. The Lehman Brothers Intermediate Government/Corporate Index is an unman-
aged index which assumes reinvestment of dividends and is generally con-
sidered representative of securities similar to those invested in by the
Adviser for the purpose of the composite performance numbers set forth
above.
5. The Adviser's average annual management fee over the period shown was
0.30% or 30 basis points. During the period, fees on the Adviser's indi-
vidual accounts ranged from 0.26% to 0.625% (26 basis points to 62.5 basis
points). Net returns to investors vary depending on the management fee.
ADMINISTRATIVE SERVICES
UAM Fund Services, Inc. ("UAMFSI"), a wholly-owned subsidiary of United As-
set Management Corporation, is responsible for performing and overseeing ad-
ministrative, fund accounting, dividend disbursing and transfer agent services
provided to the Fund and its Portfolios. UAMFSI's principal office is located
at 211 Congress Street, Boston, MA 02110. UAMFSI has subcontracted some of
these services to Chase Global Funds Services Company ("CGFSC"), an affiliate
of The Chase Manhattan Bank, by a Mutual Funds Service Agreement dated April
15, 1996. CGFSC is located at 73 Tremont Street, Boston, MA 02108.
Each Portfolio pays UAMFSI a two part monthly fee: a Portfolio-specific fee
which is retained by UAMFSI and a sub-administration fee which UAMFSI in turn
pays to CGFSC. The following Portfolio-specific fees are calculated from the
aggregate net assets of each Portfolio:
<TABLE>
<CAPTION>
RATE
----
<S> <C>
Chicago Asset Management Intermediate Bond Portfolio................... .04%
</TABLE>
CGFSC's monthly fee for its services is calculated on an annualized basis as
follows:
0.19 of 1% of the first $200 million of combined Fund assets;
0.11 of 1% of the next $800 million of combined Fund assets;
0.07 of 1% of combined Fund assets in excess of $1 billion but
less than $3 billion;
0.05 of 1% of combined Fund assets in excess of $3 billion.
26
<PAGE>
Fees are allocated among the Portfolios on the basis of their relative as-
sets and are subject to a graduated minimum fee schedule per Portfolio, which
starts at $2,000 per month and increases to $70,000 annually after two years.
If a separate class of shares is added to a Portfolio, its minimum annual fee
increases by $20,000.
DISTRIBUTOR
UAM Fund Distributors, Inc., a wholly-owned subsidiary of UAM with its prin-
cipal office located at 211 Congress Street, Boston, Massachusetts 02110, dis-
tributes the shares of the Fund. Under the Fund's Distribution Agreement (the
"Distribution Agreement"), the Distributor, as agent of the Fund, agrees to
use its best efforts as sole distributor of the Fund's shares. The Distributor
does not receive any fee or other compensation under the Distribution Agree-
ment with respect to this Portfolio. The Distribution Agreement continues in
effect as long as the Fund's Board of Trustees, including a majority of the
Trustees who are not parties to the Distribution Agreement or interested per-
sons of any such party, approve it on an annual basis. The Distribution Agree-
ment provides that the Fund will bear the costs of the registration of its
shares with the SEC and various states and the printing of its prospectuses,
SAIs and reports to shareholders.
PORTFOLIO TRANSACTIONS
The Advisory Agreements for each of the Fund's Portfolios authorize the Ad-
viser to select the brokers or dealers that will execute the purchases and
sales of investment securities for each Portfolio. The Agreements direct the
Adviser to use its best efforts to obtain the best available price and most
favorable execution for all transactions of the Portfolios. If consistent with
the interests of the Portfolios, the Adviser may select brokers on the basis
of research, statistical and pricing services these brokers provide to the
Portfolios in addition to required Adviser services. Such brokers may be paid
a higher commission than that which another qualified broker would have
charged for effecting the same transaction, provided that such commissions are
paid in compliance with the Securities Exchange Act of 1934, as amended, and
that the Adviser determines in good faith that the commission is reasonable in
terms either of the transaction or the overall responsibility of the Adviser
to the Portfolios and the Adviser's other clients. Although not a typical
practice, the Adviser may place portfolio orders with qualified broker-dealers
who refer clients to the Adviser.
If a purchase or sale of securities is consistent with the investment poli-
cies of a Portfolio and one or more other clients served by the Adviser is
considering a purchase at or about the same time, transactions in such securi-
ties will be allocated among the Portfolio and clients in a manner deemed fair
and reasonable by the Adviser. Although there is no specified formula for al-
locating such transactions, allocations are subject to periodic review by the
Fund's Trustees.
27
<PAGE>
GENERAL INFORMATION
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Fund was organized as a Delaware business trust on May 18, 1994 under
the name "The Regis Fund II." On October 31, 1995, the name of the Fund was
changed to "UAM Funds Trust." The Fund's Agreement and Declaration of Trust
permits the Fund to issue an unlimited number of shares of beneficial inter-
est, without par value. The Trustees have the power to designate one or more
series ("Portfolios") or classes of shares of beneficial interest without fur-
ther action by shareholders.
At its discretion, the Board of Trustees may create additional Portfolios
and classes of shares. The shares of each Portfolio are fully paid and nonas-
sessable, and have no preference as to conversion, exchange, dividends, re-
tirement or other features and no pre-emptive rights. They have noncumulative
voting rights, which means that holders of more than 50% of shares voting for
the election of Trustees can elect 100% of the Trustees. A shareholder is en-
titled to one vote for each full share held (and a fractional vote for each
fractional share held), then standing in his name on the books of the Fund.
As of December 6, 1996, Edward Usher and Francis McCartin, Trustees, Pipe-
fitters Pension Fund Local 597, Chicago, IL held of record 89.2% of the out-
standing shares of the CAM Intermediate Bond Portfolio Institutional Class
Shares for which ownership is disclaimed or presumed disclaimed. The persons
or organizations owning 25% or more of the outstanding shares of a Portfolio
may be presumed to "control" (as that term is defined in the 1940 Act) such
Portfolio. As a result, those persons or organizations could have the ability
to vote a majority of the shares of the Portfolio on any matter requiring the
approval of shareholders of such Portfolio.
Annual meetings will not be held except as required by the 1940 Act and
other applicable laws. The Fund has undertaken that its Trustees will call a
meeting of shareholders if such a meeting is requested in writing by the hold-
ers of not less than 10% of the outstanding shares of the Fund. The Fund will
assist shareholder communications in such matters.
CUSTODIAN
The Chase Manhattan Bank serves as custodian of the Fund's assets.
ACCOUNTANTS
Price Waterhouse LLP acts as the independent accountants for the Fund.
REPORTS
Investors will receive unaudited semi-annual financial statements and annual
financial statements audited by Price Waterhouse LLP.
28
<PAGE>
SHAREHOLDER INQUIRIES
Shareholder inquiries may be made by contacting the UAM Funds Service Center
at the address or telephone number listed on the cover of this Prospectus.
LITIGATION
The Fund is not involved in any litigation.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS NOT CONTAINED IN THIS PROSPECTUS, OR IN THE PORTFOLIO'S STATEMENT
OF ADDITIONAL INFORMATION, IN CONNECTION WITH THE OFFERING MADE BY THIS PRO-
SPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR ITS REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFERING BY THE FUND IN ANY JURISDICTION IN WHICH SUCH OF-
FERING MAY NOT BE LAWFULLY MADE.
29
<PAGE>
UAM FUNDS -- INSTITUTIONAL CLASS SHARES
Acadian Emerging Markets Portfolio
Acadian International Equity Portfolio
BHM&S Total Return Bond Portfolio
Chicago Asset Management Intermediate Bond Portfolio
Chicago Asset Management Value/Contrarian Portfolio
C&B Balanced Portfolio
C&B Equity Portfolio
C&B Equity Portfolio for Taxable Investors
C&B Mid Cap Equity Portfolio
McKee Domestic Equity Portfolio
McKee International Equity Portfolio
McKee U.S. Government Portfolio
DSI Balanced Portfolio
DSI Disciplined Value Portfolio
DSI Limited Maturity Bond Portfolio
DSI Money Market Portfolio
FMA Small Company Portfolio
FPA Crescent Portfolio
Hanson Equity Portfolio
ICM Equity Portfolio
ICM Fixed Income Portfolio
ICM Small Company Portfolio
IRC Enhanced Index Portfolio
Jacobs International Octagon Portfolio
MJI International Equity Portfolio
Newbold's Equity Portfolio
NWQ Balanced Portfolio
NWQ Value Equity Portfolio
Rice, Hall James Small Cap Portfolio
Rice, Hall James Small/Mid Cap Portfolio
Sirach Equity Portfolio
Sirach Fixed Income Portfolio
Sirach Growth Portfolio
Sirach Short-Term Reserves Portfolio
30
<PAGE>
Sirach Special Equity Portfolio
Sirach Strategic Balanced Portfolio
SAMI Preferred Stock Income Portfolio
Sterling Partners' Balanced Portfolio
Sterling Partners' Equity Portfolio
Sterling Partners' Small Cap Portfolio
Sterling Partners' Short-Term Fixed Income Portfolio
Sterling Partners' Small Cap Value Portfolio
TS&W Balanced Portfolio
TS&W Equity Portfolio
TS&W Fixed Income Portfolio
TS&W International Equity Portfolio
31
<PAGE>
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
1-800-638-7983
Investment Adviser
Chicago Asset Management Company
70 West Madison Street 56th Floor
Chicago, IL 60602
Distributor
UAM FUND DISTRIBUTORS, INC.
211 Congress Street
Boston, MA 02110
PROSPECTUS
January 3, 1997
<PAGE>
[LOGO OF UAM FUNDS APPEARS HERE]
Chicago Asset Management
Value/Contrarian Portfolio
Institutional
Class Shares
January 3, 1997
PROSPECTUS
<PAGE>
[LOGO OF UAM FUNDS APPEARS HERE]
UAM FUNDS SERVICE CENTER
C/O CHASE GLOBAL FUNDS SERVICES COMPANY
P.O. BOX 2798
BOSTON, MA 02208-2798
1-800-638-7983
- -------------------------------------------------------------------------------
CHICAGO ASSET MANAGEMENT VALUE/CONTRARIAN PORTFOLIO
INSTITUTIONAL CLASS SHARES
INVESTMENT ADVISER: CHICAGO ASSET MANAGEMENT COMPANY
- -------------------------------------------------------------------------------
PROSPECTUS -- JANUARY 3, 1997
UAM Funds Trust (the "Fund") is, an open-end investment company known as a
"mutual fund." The Fund consists of multiple series (known as "Portfolios"),
each of which has different investment objectives and policies. The Chicago
Asset Management Value/Contrarian Portfolio currently offers only one class of
shares: Institutional Class Shares. The securities offered in this Prospectus
are Institutional Class Shares of one diversified, no-load Portfolio of the
Fund managed by Chicago Asset Management Company.
CHICAGO ASSET MANAGEMENT VALUE/CONTRARIAN PORTFOLIO. Chicago Asset Manage-
ment Value/Contrarian Portfolio (the "Portfolio") seeks capital appreciation
by investing primarily in the common stock of large companies. The common
stocks in which the Portfolio invests are generally ones which have performed
poorly over the recent past but which may have the potential for better-than-
average performance in the future.
There can be no assurance that the Portfolio will achieve its stated objec-
tive.
Keep this Prospectus for future reference. It contains information that you
should know before you invest. A "Statement of Additional Information" (SAI)
containing additional information about the Fund has been filed with the Secu-
rities and Exchange Commission. The SAI is dated January 3, 1997 and has been
incorporated by reference into this Prospectus. For a free copy of the SAI
contact the UAM Funds Service Center at the address or telephone number above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Fund Expenses............................................................ 2
Prospectus Summary....................................................... 3
Risk Factors............................................................. 4
Financial Highlights..................................................... 5
Investment Objective..................................................... 6
Investment Policies...................................................... 6
Other Investment Policies................................................ 8
Investment Limitations................................................... 14
Purchase of Shares....................................................... 15
Redemption of Shares..................................................... 17
Shareholder Services..................................................... 19
Valuation of Shares...................................................... 20
Performance Calculations................................................. 20
Dividends, Capital Gains Distributions and Taxes......................... 21
Investment Adviser....................................................... 22
Adviser's Historical Performance......................................... 24
Administrative Services.................................................. 25
Distributor.............................................................. 26
Portfolio Transactions .................................................. 26
General Information...................................................... 27
UAM Funds -- Institutional Class Shares.................................. 29
</TABLE>
<PAGE>
FUND EXPENSES
The following table illustrates expenses and fees that a shareholder of the
Portfolio's Institutional Class Shares would incur. Transaction fees may be
charged if a broker-dealer or other financial intermediary deals with the Fund
on your behalf. Please see "PURCHASE OF SHARES" for further information.
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Sales Load Imposed on Purchases......................................... NONE
Sales Load Imposed on Reinvested Dividends.............................. NONE
Deferred Sales Load..................................................... NONE
Redemption Fees......................................................... NONE
Exchange Fees........................................................... NONE
</TABLE>
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF NET ASSETS)
<TABLE>
<S> <C>
Investment Advisory Fees........................................... 0.625 %
Administrative Fees................................................ 6.610 %
12b-1 Fees......................................................... NONE
Other Expenses..................................................... 6.030 %
Advisory Fees Waived and Expenses Assumed.......................... (12.21)%
------
Total Operating Expenses (After Fee Waiver and Expenses Assumed)... 1.0600 %*
======
</TABLE>
- -----------
* Absent the fees waived and expenses assumed by the Adviser, annualized total
operating expenses for the Portfolio, including revised administrative fees,
would be 13.27%. The annualized Total Operating Expenses includes the effect
of expense offsets. If expense offsets were excluded, annualized Total Oper-
ating Expenses of the Portfolio would be 1.10%. Until further notice, the
Adviser has voluntarily agreed to waive its advisory fee and to assume cer-
tain operating expenses to keep the Portfolio's total annual operating ex-
penses (excluding interest, taxes and extraordinary expenses) from exceeding
0.95% of average daily net assets. The Portfolio will not reimburse the Ad-
viser for any advisory fees which are waived or Portfolio expenses which the
Adviser may bear on behalf of the Portfolio for a given fiscal year for a
given year.
The table above show various fees and expenses an investor would bear di-
rectly or indirectly. The expenses and fees set forth above are based on the
Portfolio's operations during the fiscal year ended April 30, 1996 except that
they have been restated to reflect current administrative fees. (See "ADMINIS-
TRATIVE SERVICES.")
1
<PAGE>
The following chart shows how much a hypothetical investor would pay in ex-
penses, assuming an initial investment of $1,000, a 5% annual rate of return
and redemption at the end of the time period indicated.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Expenses..................................... $ 11 $ 34 $ 58 $ 129
</TABLE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EX-
PENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE
SHOWN.
2
<PAGE>
PROSPECTUS SUMMARY
INVESTMENT ADVISER
Chicago Asset Management Company (the "Adviser") is a registered investment
adviser specializing in the active management of stocks, bonds and balanced
portfolios for institutional, tax-exempt clients. Founded in 1983, the firm is
a wholly-owned subsidiary of United Asset Management Corporation. The Adviser
currently has over $2 billion in assets under management. (See "INVESTMENT AD-
VISER.")
PURCHASE OF SHARES
Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the
"Distributor"), to investors at net asset value without a sales commission.
Share purchases may be made by sending investments directly to the Fund. The
minimum initial investment is $2,000. The minimum for subsequent investments
is $100. The minimum initial investment for IRA accounts is $500. The minimum
initial investment for spousal IRA accounts is $250. Certain exceptions to the
initial or minimum investment amounts may be made by the officers of the Fund.
(See "PURCHASE OF SHARES.")
DIVIDENDS AND DISTRIBUTIONS
The Portfolio will normally distribute substantially all of its net invest-
ment income in quarterly dividends. The Portfolio will distribute any realized
net capital gains annually. Distributions will be reinvested in Portfolio
shares automatically unless an investor elects to receive cash distributions.
(See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES.")
REDEMPTIONS AND EXCHANGES
Shares of the Portfolio may be redeemed at any time, without cost, at the
net asset value of the Portfolio next determined after receipt of the redemp-
tion request. The redemption price may be more or less than the purchase
price. (See "REDEMPTION OF SHARES.")
ADMINISTRATIVE SERVICES
UAM Fund Services Inc. ("UAMFSI"), a wholly-owned subsidiary of United Asset
Management Corporation, is responsible for performing and overseeing adminis-
tration, fund accounting, dividend disbursing and transfer agency services
provided to the Fund and its Portfolios by third-party service providers. (See
"ADMINISTRATIVE SERVICES.")
3
<PAGE>
RISK FACTORS
The value of the Portfolio's shares will fluctuate in response to changes in
market and economic conditions as well as the financial conditions and pros-
pects of the issuers in which the Portfolio invests. Prospective investors
should consider the following: (1) The Portfolio may engage in various strate-
gies to seek to hedge its investments against movements in security prices,
interest rates and currency exchange rates by the use of derivatives including
options and futures as well as options on futures. Such strategies are com-
monly referred to as "derivatives" and involve the risk of imperfect correla-
tion in movements in the price of options and futures and movements in the
price of securities, interest rates or currencies which are the subject of the
hedge. To the extent these transactions involve foreign securities or curren-
cies, they are also subject to the risk factors associated with foreign in-
vestments generally. There can be no assurance that a liquid secondary market
for options and futures contracts will exist at any specific time; (2) The
Portfolio may invest up to 10% of its assets in foreign issuers, which may in-
volve greater risks than investments in domestic securities, such as foreign
currency risk; (3) The Portfolio may invest in repurchase agreements which en-
tail a risk of loss should the seller default on its transaction; (4) The
Portfolio may lend its investment securities which entails a risk of loss
should a borrower fail financially; (5) The Portfolio may purchase securities
on a when-issued basis which do not earn interest until issued and may decline
or appreciate in market value prior to their delivery to the Portfolio. (See
"OTHER INVESTMENT POLICIES".)
4
<PAGE>
FINANCIAL HIGHLIGHTS
The following table provides selected per share information for a share out-
standing throughout the periods presented for the Portfolio. This table is
part of the Portfolio's Financial Statements included in the Portfolio's 1996
Annual Report to Shareholders and the 1996 Semi-Annual Report to shareholders
. The Reports are incorporated into the Portfolio's SAI. The Portfolio's Fi-
nancial Statements for the period ended April 30, 1996 have been audited by
Price Waterhouse LLP whose unqualified opinion on those Financial Statements
is also incorporated into the Portfolio's SAI. Please read the following in-
formation in conjunction with the Portfolio's 1996 Annual Report to Sharehold-
ers and the 1996 Semi-Annual Report to Shareholders.
<TABLE>
<CAPTION>
DECEMBER 16, SIX MONTHS
1994** ENDED
TO APRIL 30, YEAR ENDED OCTOBER 31, 1996
1995 APRIL 30, 1996 (UNAUDITED)
------------ -------------- ----------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD......................... $ 10.00 $ 11.14 $ 13.67
------- -------- -------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income.......... 0.05 0.19 0.09
Net Realized and Unrealized
Gain (Loss) on Investments... 1.13 2.86 (0.36)
------- -------- -------
Total from Investment
Operations................. 1.18 3.05 (0.27)
------- -------- -------
DISTRIBUTIONS
Net Investment Income.......... (0.04) (0.23) (0.15)
Net Realized Gain.............. -- (0.29) --
------- -------- -------
Total Distributions.......... (0.04) (0.52) (0.15)
------- -------- -------
NET ASSET VALUE, END OF PERIOD... $ 11.14 $ 13.67 $ 13.25
======= ======== =======
TOTAL RETURN+.................... 11.81% 28.00% (1.98)%
======= ======== =======
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period
(thousands).................... $ 696 $ 892 $ 1,248
Ratio of Expenses to Average Net
Assets......................... 0.95%* 1.06% 0.99%*
Ratio of Net Investment Income to
Average Net Assets............. 1.54%* 1.51% 1.62%*
Portfolio Turnover Rate.......... 4% 33% 17%
Average Commission Rate#......... N/A $ 0.0600 $0.0585
Voluntarily Waived Fees and
Expenses Assumed by the Adviser
Per Share...................... $ 0.58 $ 1.50 $ 0.62
Ratio of Expenses to Average Net
Assets Including Expense
Offsets........................ 0.95%* 0.95% 0.95%*
</TABLE>
- -----------
* Annualized
** Commencement of Operations
+ Total return would have been lower had certain fees not been waived and ex-
penses assumed by the Adviser during the periods indicated.
# Beginning with fiscal year 1996, the Portfolio is required to disclose the
average commission rate per share it paid for portfolio trades, on which
commissions were charged, during the period.
5
<PAGE>
INVESTMENT OBJECTIVE
The Portfolio seeks capital appreciation by investing primarily in the com-
mon stock of large companies. The common stocks in which the Portfolio invests
are generally ones which have performed poorly over the recent past but which
may have the potential for better-than-average performance in the future.
There can be no assurance that the Portfolio will achieve its stated objec-
tive.
INVESTMENT POLICIES
The Adviser focuses mainly on choosing individual stocks rather than trying
to forecast the overall strength of the stock market. In particular, the Ad-
viser seeks to invest in large, established quality companies whose stocks can
be bought at attractive prices because of the market's misperceptions about
the companies' value.
As a contrarian, the Adviser seeks to invest by going against the consensus
opinion on individual stocks. To discover the appropriate contrarian position,
the Adviser stays in contact with stock market research analysts and takes
their assumptions into account in determining whether stocks are undervalued
or overvalued.
The Portfolio will invest primarily in the common stock of large capitaliza-
tion companies which are defined as those with equity capitalizations greater
than $1 billion at the time of purchase. The Portfolio may also invest in se-
curities convertible into common stock. There is no particular percentage of
the Portfolio's assets to be invested in any one type of security, and it has
the ability to purchase other securities that may produce capital appreciation
such as non-convertible preferred stocks, rights and warrants to purchase com-
mon stocks, and bonds. However, under normal circumstances, the Adviser antic-
ipates no more than 5% of the Portfolio's total assets will be invested in in-
vestment grade bonds which are generally considered to be those bonds having
one of the four highest grades assigned by Moody's Investors Service, Inc.
("Moody's") (Aaa, Aa, A or Baa) or Standard & Poor's Corporation ("S&P") (AAA,
AA, A or BBB), or if unrated, of equivalent quality in the Adviser's judgment.
The Adviser also reserves the right to retain securities which are downgraded
by one or both of the rating agencies, if in the Adviser's judgment, the re-
tention of securities is warranted. The Portfolio's SAI contains a detailed
description of corporate bond ratings.
The Portfolio seeks to outperform the market during most time periods, not
by taking advantages of shifts in the overall direction of the market, but by
identifying attractive stocks. The Portfolio will invest primarily in estab-
lished, high-quality companies whose stock is selling at attractive prices due
to short-term market misperceptions. Consistent with avoiding market timing is
maintaining most individual common stock holdings in a somewhat equally
weighted position in the
6
<PAGE>
Portfolio. This is sometimes accomplished by rebalancing current holdings in
response to a change in the market value of individual holdings over time. A
portion of a holding which has become larger due to market value change may be
sold. Conversely an additional purchase of shares of a current holding may be
made if market value change has reduced the holding size in the total portfo-
lio.
The Adviser's investment style is categorized as large cap, bottom-up, val-
ue-oriented and contrarian. Its investment philosophy and process is qualita-
tive rather than quantitative, and its investment approach has four distin-
guishing characteristics. First, it emphasizes large company stocks. Second,
it employs a bottom-up approach which means that it will construct the Portfo-
lio by focusing on individual stocks rather than industry groups or sectors.
(Top-down investors would first decide which industries or sectors they wanted
to emphasize and then would look for stocks that fit those requirements.)
Third, it is value-oriented. This means that it invests in stocks which are
perceived to be priced below their true value because the market does not rec-
ognize their potential. And fourth, it is contrarian in that it goes against
the common consensus when it invests. To maintain an effective contrarian pos-
ture, it closely monitors market opinion-makers, such as research analysts and
commentators, and then evaluates the impact of their opinions on stock prices,
in identifying securities which are perceived to be undervalued or overvalued.
This results in active contrarian rebalancing of current holdings.
The Adviser selects individual issues which offer a combination of some of
the following characteristics:
. they are out-of-favor among market analysts;
. they are priced below the mid-point of their trading range over the
past year;
. the issuing companies have maintained sound financial credit qual-
ity as measured by their balance sheets or they are expected to
significantly improve;
. they are large companies with market values over $1 billion;
. they have reasonable (based on normalized expected earnings) price-
to-earnings ratios; and
. they pay or may become able to pay a dividend.
When the Adviser believes that market conditions warrant a defensive posi-
tion, up to 100% of the Portfolio's assets may be held in cash and short-term
investments. See "SHORT-TERM INVESTMENTS AND REPURCHASE AGREEMENTS" below for
a description of the types of short-term instruments in which the Portfolio
may invest for temporary defensive purposes. When the Portfolio is in a defen-
sive position, it may not necessarily be pursuing its stated investment objec-
tive.
7
<PAGE>
OTHER INVESTMENT POLICIES
The Portfolio may also, under normal circumstances, invest up to 35% of its
assets, unless restricted by additional limitations described below or in the
Portfolio's SAI, in the following securities, investments or investment tech-
niques.
SHORT-TERM INVESTMENTS
In order to earn a return on uninvested assets, meet anticipated redemp-
tions, or for temporary defensive purposes, the Portfolio may invest a portion
of its assets in domestic and foreign money market instruments including cer-
tificates of deposit, bankers' acceptances, time deposits, U.S. government ob-
ligations, U.S. government agency securities, short-term corporate debt secu-
rities, and commercial paper rated A-1 or A-2 by S&P or Prime-1 or Prime-2 by
Moody's or, if unrated, determined by the Adviser to be of comparable quality.
Time deposits maturing in more than seven days will not be purchased by the
Portfolio, and time deposits maturing from two business days through seven
calendar days will not exceed 10% of the total assets of the Portfolio. The
Portfolio will not invest in any security issued by a commercial bank unless
(i) the bank has total assets of at least $1 billion, or the equivalent in
other currencies, (ii) in the case of U.S. banks, it is a member of the Fed-
eral Deposit Insurance Corporation, and (iii) in the case of foreign branches
of U.S. banks, the security is, in the opinion of the Adviser, of an invest-
ment quality comparable with other debt securities which may be purchased by
the Portfolio.
The Fund has received permission from the Securities and Exchange Commission
(the "SEC") to deposit the daily uninvested cash balances of the Fund's Port-
folios, as well as cash for investment purposes, into one or more joint ac-
counts and to invest the daily balance of the joint accounts in the following
short-term investments: fully collateralized repurchase agreements, interest-
bearing or discounted commercial paper including dollar-denominated commercial
paper of foreign issuers, and any other short-term money market instruments
including variable rate demand notes and tax-exempt money instruments. By en-
tering into these investments on a joint basis, it is expected that the Port-
folio may earn a higher rate of return on investments relative to what it
could earn individually.
The Fund has received permission from the SEC for each of its Portfolios to
invest, for cash management purposes, the greater of 5% of its total assets or
$2.5 million in the Fund's DSI Money Market Portfolio. (See "INVESTMENT COMPA-
NIES.")
REPURCHASE AGREEMENTS
The Portfolio may invest in repurchase agreements collateralized by U.S.
Government securities, certificates of deposit, and certain bankers'
acceptances and other securities outlined above under "Short-Term
Investments." In a repurchase agreement, the Portfolio buys a security and
simultaneously commits to sell that
8
<PAGE>
security back at an agreed upon price plus an agreed upon market rate of
interest. Under a repurchase agreement, the seller is also required to
maintain the value of securities subject to the agreement at not less than
100% of the repurchase price. The use of repurchase agreements involves
certain risks. For example, a default by the seller of the agreement may cause
the Portfolio to experience a loss or delay in the liquidation of the
collateral securing the repurchase agreement. The Portfolio might also incur
disposition costs in liquidating the collateral. While the Fund's management
acknowledges these risks, it is expected that they can be controlled through
stringent security selection criteria and careful monitoring procedures. The
Fund has received permission from the SEC to pool daily uninvested cash
balances of the Fund's Portfolios in order to invest in repurchase agreements
on a joint basis. By entering into joint repurchase agreements, the Portfolio
may incur lower transactions costs and earn higher rates of interest on joint
repurchase agreements. The Portfolio's contribution would determine its return
from a joint repurchase agreement (See "SHORT TERM INVESTMENTS.")
LENDING OF SECURITIES
The Portfolio may lend its investment securities to qualified institutional
investors as a means of earning income. The Portfolio will not loan securities
to the extent that greater than one-third of its assets at fair market value
would be committed to loans. During the term of a loan, the Portfolio is sub-
ject to a gain or loss depending on any increase or decrease in the market
price of the securities loaned. Lending of securities is subject to review by
the Fund's Board of Trustees. All relevant facts and circumstances, including
the creditworthiness of the broker, dealer or institution, will be considered
in making decisions about securities lending.
An investment company may pay reasonable negotiated fees in connection with
loaned securities so long as such fees are set forth in a written contract and
approved by its Board of Trustees. The Portfolio will continue to retain any
voting rights with respect to loaned securities. If a material event occurs
affecting an investment on a loan, the loan must be called and the securities
voted.
WHEN-ISSUED, FORWARD DELIVERY AND DELAYED SETTLEMENT SECURITIES
The Portfolio may purchase and sell securities on a "when-issued," "delayed
settlement," or "forward delivery" basis. "When-issued" or "forward delivery"
refers to securities whose terms and indenture are available, and for which a
market exists, but which are not available for immediate delivery. When-issued
and forward delivery transactions may be expected to occur a month or more be-
fore delivery is due. Delayed settlement is a term used to describe settlement
of a securities transaction in the secondary market which will occur sometime
in the future. No payment or delivery is made by the Portfolio until it re-
ceives payment
9
<PAGE>
or delivery from the other party to any of the above transactions. It is possi-
ble that the market price of the securities at the time of delivery may be
higher or lower than the purchase price. The Portfolio will maintain a separate
account of cash or liquid securities at least equal to the value of purchase
commitments until payment is made. Typically, no income accrues on securities
purchased on a delayed delivery basis prior to the time delivery is made al-
though the Portfolio may earn income on securities it has deposited in a segre-
gated account.
The Portfolio may engage in these types of purchases in order to buy securi-
ties that fit with its investment objectives at attractive prices -- not to in-
crease its investment leverage.
PORTFOLIO TURNOVER
Portfolio turnover is not anticipated to exceed 60%. In addition to Portfolio
trading costs, higher rates of portfolio turnover may result in the realization
of capital gains. (See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES" for
more information on taxation.) The Portfolio will not normally engage in short-
term trading, but each reserves the right to do so. The table set forth in "Fi-
nancial Highlights" presents the Portfolio's historical portfolio turnover ra-
tios.
INVESTMENT COMPANIES
The Portfolio reserves the right to invest up to 10% of its total assets,
calculated at the time of investment, in the securities of other open-end or
closed-end investment companies. No more than 5% of the investing Portfolio's
total assets may be invested in the securities of any one investment company,
nor may it acquire more than 3% of the voting securities of any other invest-
ment company. The Portfolio will indirectly bear its proportionate share of any
management fees paid by an investment company in which it invests in addition
to the advisory fee paid by the Portfolio.
The Fund has received permission from the SEC to allow each of its Portfolios
to invest the greater of 5% of its total assets or $2.5 million in the Fund's
DSI Money Market Portfolio for cash management purposes provided that the in-
vestment is consistent with the Portfolio's investment policies and restric-
tions. Based upon the Portfolio's assets invested in the DSI Money Market Port-
folio, the investing Portfolio's adviser will waive its investment advisory fee
and any other fees earned as a result of the Portfolio's investment in the DSI
Money Market Portfolio. The investing Portfolio will bear expenses of the DSI
Money Market Portfolio on the same basis as all of its other shareholders.
FOREIGN INVESTMENTS
Investing in foreign companies may involve additional risks and considera-
tions which are not typically associated with investing in U.S. companies.
Since stocks of foreign companies are normally denominated in foreign curren-
cies, the
10
<PAGE>
Portfolio may be affected favorably or unfavorably by changes in currency rates
and in exchange control regulations, and may incur costs in connection with
conversions between various currencies.
As non-U.S. companies are not generally subject to uniform accounting, audit-
ing and financial reporting standards and practices comparable to those appli-
cable to U.S. companies, comparable information may not be readily available
about certain foreign companies. Securities of some non-U.S. companies may be
less liquid and more volatile than securities of comparable U.S. companies. In
addition,
in certain foreign countries, there is the possibility of expropriation or con-
fiscatory taxation, political or social instability, or diplomatic developments
which could affect U.S. investments in those countries.
RESTRICTED AND ILLIQUID SECURITIES
The Portfolio may purchase restricted securities that are not registered for
sale to the general public but which are eligible for resale to qualified in-
stitutional investors under Rule 144A of the Securities Act of 1933. Under the
supervision of the Fund's Board of Trustees, the Adviser determines the liquid-
ity of such investments by considering all relevant factors. Provided that a
dealer or institutional trading market in such securities exists, these re-
stricted securities are not treated as illiquid securities for purposes of the
Portfolio's investment limitations. The Portfolio may also invest up to 15% of
its net assets in securities that are illiquid. Prices realized from the sales
of these securities could be more or less than those originally paid by the
Portfolio or less than what may be considered the fair value of such securi-
ties.
HEDGING AND RELATED STRATEGIES AND RISK CONSIDERATIONS
To reduce the overall risk of its investments (hedge), the Portfolio may use
options, futures contracts, options on futures contracts, and forward currency
contracts. These instruments are commonly referred to as derivatives. Hedging
strategies may also be used in an attempt to manage the Portfolio's exposure to
changing interest rates, security prices and currency exchange rates. The Port-
folio's ability to use these strategies may be limited by market conditions,
regulatory limits and tax considerations. The Portfolio's obligation under such
hedging strategies will be covered by the maintenance of a segregated account
consisting of cash or liquid securities equal to at least 100% of the Portfo-
lio's commitment. The Portfolio may buy or sell futures contracts, write cov-
ered call options and buy put and call options on any security, index or cur-
rency including options and futures traded on foreign exchanges and options not
traded on exchanges. The Portfolio's SAI contains further information on all of
these strategies and the risks associated with them.
The Portfolio may write or purchase options in privately negotiated transac-
tions ("OTC Options") as well as listed options. OTC Options can be closed out
11
<PAGE>
only by agreement with the other party to the transaction. Any OTC Option pur-
chased by the Portfolio is considered an illiquid security. Any OTC Option
written by the Portfolio will be with a qualified dealer pursuant to an agree-
ment under which the Portfolio may repurchase the option at a formula price.
Such options are considered illiquid to the extent that the formula price ex-
ceeds the intrinsic value of the option. The Portfolio may not purchase or sell
futures contracts or related options for which the aggregate initial margin and
premiums exceed 5% of the fair market value of the Portfolio's assets. In order
to prevent leverage in connection with the purchase of futures contracts or
call options thereon by the Portfolio, an amount of cash, cash equivalents or
liquid high grade debt securities equal to the market value of the obligation
under the futures contracts or options (less any related market deposits) will
be maintained in a segregated account with the Fund's Custodian Bank. The Port-
folio may not invest more than 15% of its net assets in illiquid securities and
repurchase agreements which have a maturity of longer than seven days. A more
complete discussion of the potential risks involved in transactions in options
or futures contracts and related options is contained in the Portfolio's SAI.
The Portfolio may enter into forward currency contracts for the purchase or
sale of a specified currency at a specified future date either with respect to
specific transactions or with respect to portfolio positions. The Portfolio
also may enter into a forward contract to sell an amount of a foreign currency
approximating the value of some or all of the Portfolio's securities denomi-
nated in such currency.
The Portfolio may use forward contracts in one currency or a basket of cur-
rencies to hedge against fluctuations in the value of another currency when the
Adviser anticipates there will be a correlation between the two and may use
forward currency contracts to shift the Portfolio's exposure to foreign cur-
rency fluctuations from one country to another. The purpose of entering into
these contracts is to minimize the risk to the Portfolio from adverse changes
in the relationship between the U.S. dollar and foreign currencies.
The Portfolio may enter into interest rate protection transactions, which
consist of interest rate swaps and interest rate caps, collars and floors, for
hedging purposes. These transactions are commonly referred to as derivatives. A
swap is an agreement to exchange the return generated by one instrument for the
return generated by another instrument. The swaps in which the Portfolio may
also engage include interest rate caps, floors and collars under which one
party pays a single or periodic fixed amount (or premium), and the other party
pays periodic amounts on movement of a specified index.
The Portfolio may enter into interest rate protection transactions to pre-
serve a return or spread on a particular investment or portion of its portfolio
or to protect against any increase in the price of securities it anticipates
purchasing at a later
12
<PAGE>
date. The Portfolio will enter into interest rate protection transactions only
with banks and recognized securities dealers believed by the Adviser to present
minimal credit risks in accordance with guidelines established by the Fund's
Board of Trustees. Interest rate swaps, caps, floors and collars will be
treated as illiquid securities and will therefore, be subject to the Portfo-
lio's investment restriction limiting investment in illiquid securities to no
greater than 15% of its net assets.
RISK CONSIDERATIONS. The Portfolio might not employ any of the hedging strat-
egies described above, and there can be no assurance that any strategy used
will succeed. If the Adviser incorrectly forecasts interest rates, market val-
ues or other economic factors in utilizing a hedging strategy for the Portfo-
lio, the Portfolio would be in a better position if it had not hedged at all.
In addition, the Portfolio will pay commissions and other costs in connection
with such hedging strategies which may increase the Portfolio's expenses and
reduce its return.
The use of these strategies involves certain risks, including (1) the fact
that skills needed to use hedging instruments are different from those needed
to select the Portfolio's securities, (2) possible imperfect correlation, or
even no correlation, between price movements of hedging instruments and price
movements of the investments being hedged, (3) the fact that, while hedging
strategies can reduce the risk of loss, they can also reduce the opportunity
for gain, or even result in losses, by offsetting favorable price movements in
hedged investments and (4) the possible inability of the Portfolio to purchase
or sell a security at a time that otherwise would be favorable for it to do so,
or the possible need for the Portfolio to sell a security at a disadvantageous
time due to the need for it to maintain "cover" or to segregate securities in
connection with hedging transactions and the possible inability of the Portfo-
lio to close out or to liquidate its hedged position.
AMERICAN DEPOSITARY RECEIPTS
The Portfolio intends to invest primarily in U.S.-based companies. In addi-
tion, the Portfolio may purchase shares of foreign based companies in the form
of American Depositary Receipts (ADRs). Investments in ADRs, which are domestic
securities representing ownership rights in foreign companies, will not exceed
25% of the Portfolio's assets. ADRs may be sponsored or unsponsored. Sponsored
ADRs are established jointly by a depositary and the underlying issuer, whereas
unsponsored ADR's may be established without participation by the underlying
issuer. Holders of an unsponsored ADR generally bear all the costs associated
with establishing the unsponsored ADR. The depositary of an unsponsored ADR is
under no obligation to distribute shareholder communications received from the
underlying issuer or to pass through voting rights to the holders of the
unsponsored ADR with respect to the deposited securities or pool of securities.
13
<PAGE>
INVESTMENT LIMITATIONS
The Portfolio will not:
(a) with respect to 75% of its assets, invest more than 5% of its total
assets at the time of purchase in the securities of any single issuer
(other than obligations issued or guaranteed as to principal and in-
terest by the U.S. Government or any of its agencies or instrumentali-
ties);
(b) with respect to 75% of its assets, purchase more than 10% of any class
of the outstanding voting securities of any issuer;
(c) invest more than 5% of its assets at the time of purchase in the secu-
rities of companies that have (with predecessors) a continuous operat-
ing history of less than 3 years;
(d) invest more than 25% of its assets in companies within a single indus-
try; however, there are no limitations on investments made in instru-
ments issued or guaranteed by the U.S. Government and its agencies.
(e) make loans except by purchasing debt securities in accordance with its
investment objective and policies or entering into repurchase agree-
ments or by lending its portfolio securities to banks, brokers, deal-
ers and other financial institutions so long as the loans are made in
compliance with the 1940 Act, as amended, or the Rules and Regulations
or interpretations of the SEC;
(f) (i) borrow, except from banks and as a temporary measure for extraor-
dinary or emergency purposes and then, in no event, in excess of 33
1/3% of the Portfolio's gross assets valued at the lower of market or
cost, and (ii) the Portfolio may not purchase additional securities
when borrowings exceed 5% of total assets; or
(g) pledge, mortgage or hypothecate any of its assets to an extent greater
than 33 1/3% of its total assets at fair market value.
The investment objective of the Portfolio is fundamental and may be changed
only with the approval of the holders of a majority of the outstanding shares
of such Portfolio. Except for limitations (a), (b), (d), (e) and (f)(i), the
Portfolio's investment limitations and policies described in this Prospectus
and in the SAI are not fundamental and may be changed by the Fund's Board of
Trustees upon reasonable notice to investors. All other investment limitations
described here and in the SAI are fundamental policies and may be changed only
with the approval of the holders of a majority of the outstanding shares of the
Portfolio. If a percentage limitation on investment or utilization of assets as
set forth above is adhered to at the time an investment is made, a later change
in percentage resulting from changes in the value or total cost of the Portfo-
lio's assets will not be considered a violation of the restriction.
14
<PAGE>
PURCHASE OF SHARES
Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the
"Distributor"), without a sales commission at the net asset value next deter-
mined after an order is received by the Custodian (See "VALUATION OF SHARES.")
The minimum initial investment required is $2,000. The minimum initial invest-
ment for IRA accounts is $500. The minimum initial investment for spousal IRA
accounts is $250. Certain exceptions may be made by the officers of the Fund.
Shares of the Portfolio may be purchased by customers of broker-dealers or
other financial intermediaries ("Service Agents") which have established a
shareholder servicing relationship with the Fund on behalf of their customers.
Service Agents may impose additional or different conditions or other account
fees on the purchase and redemption of Portfolio shares by their customers.
Each Service Agent is responsible for transmitting to its customers a schedule
of any such fees and information regarding any additional or different purchase
and redemption conditions. Shareholders who are customers of Service Agents
should consult their Service Agent for information regarding these fees and
conditions. Amounts paid to Service Agents may include transaction fees and/or
service fees paid by the Fund from the Fund assets attributable to the Service
Agent, and would not be imposed if shares of the Portfolio were purchased di-
rectly from the Fund or the Distributor. The Service Agents may provide share-
holder services to their customers that are not available to a shareholder
dealing directly with the Fund. A salesperson and any other person entitled to
receive compensation for selling or servicing Portfolio shares may receive dif-
ferent compensation with respect to one particular class of shares over another
in the Fund.
Service Agents may enter confirmed purchase orders on behalf of their custom-
ers. If shares of the Portfolio are purchased in this manner, the Service Agent
must receive your investment order before the close of trading on the New York
Stock Exchange ("NYSE"), and transmit it to the Fund's Sub-Transfer Agent prior
to 4 p.m. to receive that day's share price. Proper payment for the order must
be received by the Sub-Transfer Agent no later than the time when the Portfolio
is priced on the following business day. Service Agents are responsible to
their customers and the Fund for timely transmission of all subscription and
redemption requests, investment information, documentation and money.
INITIAL INVESTMENT
BY MAIL
. Complete and sign an Application, and mail it along with a check payable
to UAM Funds to:
UAM Funds Trust
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
15
<PAGE>
Payment for purchases of shares received by mail will be credited to an
account at the next share price calculated for the Portfolio after receipt.
Payment does not need to be converted into Federal Funds (monies credited to
the Fund's Custodian Bank by a Federal Reserve Bank) before the Fund will ac-
cept it for investment.
BY WIRE
. Telephone the UAM Funds Service Center and provide the name, address,
telephone number, social security or taxpayer identification number,
Portfolio selected, amount being wired, and the name of the bank wiring
the funds. An account number and a wire control number will be provided
to you. Next,
. instruct your bank to wire the specified amount to the Fund's custodian:
The Chase Manhattan Bank
ABA #021000021
UAM Funds
Credit DDA #9102772952
Ref: Portfolio Name_______________
Your Account Name________________
Your Account Number_______________
Wire Control Number_______________
. Forward a completed Application to the UAM Funds Service Center. Federal
Funds purchases will be accepted only on days when the NYSE and the Cus-
todian Bank are open for business.
ADDITIONAL INVESTMENTS
Additional investments can be made at any time. The minimum additional in-
vestment is $100. Shares can be purchased at net asset value by mailing a check
to the UAM Service Center (payable to "UAM Funds ") or by wiring money to the
Custodian Bank using the instructions outlined above. When making additional
investments, be sure that the account name and number is identified on the
check or wire and the Portfolio to be purchased is specified.
Prior to wiring additional investments, notify the Fund by calling the number
on the cover of this Prospectus. Mail orders should include, when possible, the
"Invest by Mail" stub which accompanies any Fund confirmation statement.
OTHER PURCHASE INFORMATION
Investments received by 4 p.m. ET (the close of the NYSE) will be invested at
the share price calculated after the NYSE closes on that day. Investments re-
ceived after the close of the NYSE will be executed at the price computed on
the next day the NYSE is open. The Fund reserves the right, in its sole discre-
tion, to suspend the offering of shares of each Portfolio or to reject purchase
orders when,
16
<PAGE>
in the judgment of management, such suspension or rejection is in the best in-
terests of the Fund. Purchases of a Portfolio's shares will be made in full and
fractional shares of the Portfolio calculated to three decimal places. Certifi-
cates for fractional shares will not be issued. Certificates for whole shares
will not be issued except at the written request of the shareholder.
IN-KIND PURCHASES
If accepted by the Fund, shares of the Portfolio may be purchased in exchange
for securities which are eligible for acquisition by the Portfolio, as
described in this Prospectus. Securities to be exchanged which are accepted by
the Fund will be valued as described under "VALUATION OF SHARES" at the next
determination of net asset value after acceptance. Shares issued by a Portfolio
in exchange for securities will be issued at net asset value determined as of
the same time. All dividends, interest, subscription, or other rights
pertaining to such securities shall become the property of the Portfolio and
must be delivered to the Fund by the investor upon receipt from the issuer.
Securities acquired through an in-kind purchase will be acquired for investment
and not for immediate resale.
The Fund will not accept securities in exchange for shares of the Portfolio
unless:
. at the time of exchange, such securities are eligible to be in-
cluded in the Portfolio (current market quotations must be readily
available for such securities);
. the investor represents and agrees that all securities offered to
be exchanged are liquid securities and not subject to any restric-
tions upon their sale by the Portfolio under the Securities Act of
1933, or otherwise; and
. the value of any such securities (except U.S. Government securi-
ties) being exchanged together with other securities of the same
issuer owned by the Portfolio will not exceed 5% of the net assets
of the Portfolio immediately after the transaction.
Investors who are subject to Federal taxation upon exchange may realize a
gain or loss for Federal income tax purposes depending upon the cost of
securities or local currency exchanged. Investors interested in such exchanges
should contact the Adviser.
REDEMPTION OF SHARES
Shares of the Portfolio may be redeemed by mail or telephone, at any time,
without cost, at the net asset value of the Portfolio next determined after re-
ceipt of the redemption request. No charge is made for redemptions. Any redemp-
tion may be more or less than the purchase price of your shares depending on
the market value of the investment securities held by the Portfolio.
17
<PAGE>
BY MAIL
Address requests for redemption to the UAM Funds Service Center. Requests to
redeem shares must include:
. share certificates, if issued;
. a letter of instruction or stock assignment specifying the number
of shares or dollar amount to be redeemed, signed by all registered
owners of the shares in the exact names in which they are regis-
tered;
. any required signature guarantees (see "SIGNATURE GUARANTEES"); and
. any other necessary legal documents, if required in the case of es-
tates, trusts, guardianships, custodianships, corporations, pension
and profit-sharing plans and other organizations.
BY TELEPHONE
In order to make a redemption request by telephone, you must:
. establish the telephone redemption privilege (and if desired, the
wire redemption privilege) by completing appropriate sections of
the Application; and
. call the Fund and instruct that the redemption proceeds be mailed
to you or wired to your bank.
The following tasks cannot be accomplished by telephone:
. changing the name of the commercial bank or the account designated
to receive redemption proceeds (this can be accomplished only by a
written request signed by each shareholder, with each signature
guaranteed);
. redemption of certificated shares by telephone.
The Fund and its Sub-Transfer Agent will employ reasonable procedures to con-
firm that instructions communicated by telephone are genuine, and they may be
liable for any losses if they fail to do so. These procedures include requiring
the investor to provide certain personal identification at the time an account
is opened, as well as prior to effecting each transaction requested by tele-
phone. In addition, all telephone transaction requests will be recorded and in-
vestors may be required to provide additional telecopied written instructions
of such transaction requests. The Fund or Sub-Transfer Agent may be liable for
any losses due to unauthorized or fraudulent telephone instructions if the Fund
or the Sub-Transfer Agent does not employ the procedures described above. Nei-
ther the Fund nor the Sub-Transfer Agent will be responsible for any loss, lia-
bility, cost or expense for following instructions received by telephone that
it reasonably believes to be genuine.
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<PAGE>
SIGNATURE GUARANTEES
Signature guarantees are required for the following redemptions:
. redemptions where the proceeds are to be sent to someone other than
the registered shareholder(s)
. redemption where the proceeds are to be sent to an address which is
not the registered address; or
. share transfer requests.
Signature guarantees will be accepted from any eligible guarantor institu-
tion which participates in a signature guarantee program. Eligible guarantor
institutions include banks, brokers, dealers, credit unions, national securi-
ties exchanges, registered securities associations, clearing agencies and sav-
ings associations. Broker-dealers guaranteeing signatures must be a member of
a clearing corporation or maintain net capital of at least $100,000. Credit
unions must be authorized to issue signature guarantees.
OTHER REDEMPTION INFORMATION
Normally, the Fund will make payment for all shares redeemed under proper
procedures within one business day of and no more than seven days after re-
ceipt of a request, or earlier if required under applicable law. The Fund may
suspend the right of redemption or postpone the date at times when the NYSE
and Custodian Bank are closed, or under any emergency circumstances as deter-
mined by the SEC.
If the Fund's Board of Trustees determines that it would be detrimental to
the best interests of the remaining shareholders of the Fund to make payments
wholly or partly in cash, the Fund may pay the redemption proceeds in whole or
in part by a distribution in-kind of liquid securities held by the Portfolio
in lieu of cash in conformity with applicable rules of the SEC. Investors may
incur brokerage charges when they sell portfolio securities received in pay-
ment of redemptions.
SHAREHOLDER SERVICES
EXCHANGE OF SHARES
Institutional Class Shares of the Portfolio may be exchanged for Institu-
tional Class Shares of any other Portfolio of the UAM Funds. (See the list of
Portfolios of the UAM Funds at the end of this Prospectus.) Exchange requests
should be made by contacting the UAM Funds Service Center.
Any exchange will be based on the net asset value of the shares involved.
There is no sales commission or charge of any kind for an exchange. Before
making an exchange into a Portfolio, a shareholder should read its Prospectus
and consider the investment objectives of the Portfolio to be purchased. Call
the UAM
19
<PAGE>
Funds Service Center for a copy of the Prospectus for the Portfolio(s) in which
you are interested. Exchanges can only be made with Portfolios that are quali-
fied for sale in a shareholder's state of residence.
Exchange requests may be made either by mail or telephone. Telephone ex-
changes will be accepted only if the certificates for the shares to be ex-
changed have not been issued to the shareholder and if the registration of the
two accounts will be identical. Requests for exchanges received prior to 4 p.m.
(ET) will be processed as of the close of business on the same day. Requests
received after 4 p.m. will be processed on the next business day. The Board of
Trustees may limit the frequency and amount of exchanges permitted. For addi-
tional information regarding responsibility for the authenticity of telephoned
instructions, see "REDEMPTION OF SHARES -- BY TELEPHONE". An exchange into an-
other UAM Funds Portfolio is a sale of shares and may result in a gain or loss
for income tax purposes. The Fund may modify or terminate the exchange privi-
lege at any time.
VALUATION OF SHARES
The net asset value of the Portfolio is determined by dividing the value of
the Portfolio's assets, less any liabilities, by the number of shares outstand-
ing. The net asset value per share of the Portfolio is determined as of the
close of the NYSE on each day that the NYSE is open for business.
Equity securities listed on a securities exchange for which market quotations
are readily available are valued at the last quoted sale price of the day.
Price information on listed securities is taken from the exchange where the se-
curity is primarily traded. Unlisted equity securities and listed securities
not traded on the valuation date for which market quotations are readily avail-
able are valued neither exceeding the current asked prices nor less than the
current bid prices. Quotations of foreign securities in a foreign currency are
converted to U.S. dollar equivalents. The converted value is based upon the bid
price of the foreign currency against U.S. dollars quoted by any major bank or
by a broker.
The value of other assets and securities for which no quotations are readily
available (including restricted securities) is determined in good faith at fair
value using methods determined by the Fund's Board of Trustees.
PERFORMANCE CALCULATIONS
The Portfolio measures performance by calculating total return. Total return
figures are based on historical earnings and are not intended to indicate fu-
ture performance.
Total return is the change in value of an investment in the Portfolio over a
given period, assuming reinvestment of any dividends and capital gains. A cumu-
lative or aggregate total return reflects actual performance over a stated pe-
riod of
20
<PAGE>
time. An average annual total return is a hypothetical rate of return that, if
achieved annually, would have produced the same cumulative total return if per-
formance had been constant over the entire period.
The Portfolio's performance may be compared to data prepared by independent
services which monitor the performance of investment companies, data reported
in financial and industry publications, and various indices as further de-
scribed in the Portfolio's SAI. This information may also be included in sales
literature and advertising.
The Portfolio's Annual Report to Shareholders for the most recent fiscal year
end contains additional performance information that includes comparisons with
appropriate indices. The Annual Report is available without charge. Contact the
UAM Funds Service Center at the address or telephone number on the cover of
this Prospectus.
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
DIVIDENDS AND CAPITAL GAINS
The Portfolio will normally distribute substantially all of its net invest-
ment income (for tax purposes) to shareholders in quarterly dividends. If any
net capital gains are realized, the Portfolio will normally distribute such
gains annually. All dividends and capital gains distributions will be automati-
cally reinvested in additional shares of the Portfolio unless the Fund is noti-
fied in writing that the shareholder elects to receive distributions in cash.
FEDERAL TAXES
The Portfolio intends to qualify as a "regulated investment company" under
subchapter M of the Internal Revenue Code of 1986, as amended, for federal in-
come tax purposes and to meet all other requirements that are necessary for it
(but not its shareholders) to be exempt from federal taxes on income and gains
paid to shareholders in the form of dividends. To do this, the Portfolio must,
among other things, distribute substantially all of its ordinary income and net
capital gains on an annual basis and maintain a portfolio of investments which
satisfies certain diversification criteria.
Dividends paid by the Portfolio from net investment income, whether in cash
or reinvested in shares, are taxable to shareholders as ordinary income. Short-
term capital gains will be taxed as ordinary income. Long-term capital gains
distributions are taxed as long-term capital gains. Shareholders will be noti-
fied annually of dividend income earned for tax purposes.
Dividends declared in October, November and December to shareholders of rec-
ord in such a month will be treated as if they had been paid by the Fund and
received by the shareholders on December 31 of the same calendar year, provided
that the dividends are paid before February of the following year.
21
<PAGE>
The Fund is required by Federal law to withhold 31% of reportable payments
paid to shareholders who have not complied with IRS regulations. In order to
avoid this withholding requirement, you must certify that your Social Security
or Taxpayer Identification Number you have provided is correct and that you are
not currently subject to backup withholding or that you are exempt from backup
withholding. This certification must be made on the Application or on a sepa-
rate form supplied by the Fund.
Dividends and interest received by the Portfolio may give rise to withholding
and other taxes imposed by foreign countries. These taxes reduce the Portfo-
lio's dividends but are included in the taxable income reported on your tax
statement if the Portfolio qualifies for this tax treatment and elects to pass
it through to you. Consult a tax adviser for more information regarding deduc-
tions and credits for foreign taxes.
INVESTMENT ADVISER
Chicago Asset Management Company (the "Adviser") is a registered investment
adviser formed in 1983. Its business offices are located at 70 West Madison
Street, 56th Floor, Chicago, IL 60602. The Adviser is a wholly-owned subsidiary
of United Asset Management Corporation ("UAM") and provides and offers invest-
ment management and advisory services to corporations, unions, pensions and
profit-sharing plans, trusts, estates and other institutions and investors. The
Adviser currently has over $2 billion in assets under management.
The Portfolio pays an annual fee in monthly installments to the adviser for
advisory services. This fee is accrued daily and paid monthly as a percentage
of the average daily net assets in the Portfolio for that month. The percentage
fee on an annual basis is 0.625%.
The Adviser may compensate its affiliated companies for referring investors
to the Portfolio. The Distributor, UAM, the Adviser, or any of their affili-
ates, may, at its own expense, compensate a Service Agent or other person for
marketing, shareholders servicing, record-keeping and/or other services per-
formed with respect to the Fund, the Portfolio or any Class of Shares of the
Portfolio. Payments for such services may be made out of the paying entities
revenues, its profits or any other source available to it. When such services
arrangements are in effect, they are made generally available to all qualified
service providers.
The Distributor, the Adviser and certain of their affiliates also partici-
pate, at the date of this Prospectus, in an arrangement with Smith Barney Inc.
("Smith Barney") under which Smith Barney provides certain defined contribution
plan marketing and other shareholder services and receives from such entities
0.15 of 1% of the daily net asset value of Institutional Class Shares held by
Smith Barney's eligible customer accounts in addition to amounts payable to all
selling dealers. The
22
<PAGE>
Fund also compensates Smith Barney for services it provides to certain defined
contribution plan shareholders that are not otherwise provided by the Adminis-
trator.
The investment professionals at the Adviser responsible for the day-to-day
management of the Portfolio and their qualifications are as follows:
<TABLE>
<C> <S>
Jon F. Holsteen, President, CEO and Chief Investment Officer
Education: Lake Forest College, BA
Experience: Founded Chicago Asset Management Company in 1983.
Kevin J. McGrath, Senior Vice President and Senior Portfolio Manager --
Equities
Education: Regis College, BA
St. Thomas College, MBA
Experience: Joined Chicago Asset Management Company in 1991. Vice
President, Smith Barney, Harris Upham, Inc. 1985-1991.
</TABLE>
23
<PAGE>
ADVISER'S HISTORICAL PERFORMANCE
Below are certain performance data provided by the Adviser pertaining to the
composite of separately managed accounts of the Adviser that are managed with
substantially similar (although not necessarily identical) objectives, policies
and strategies as those of the Portfolio. The investment returns of the Portfo-
lio may differ from those of the separately managed accounts because such sepa-
rately managed accounts may have fees and expenses that that differ from those
of the Portfolio. Further, the separately managed accounts are not subject to
investment limitations, diversification requirements and other restrictions im-
posed by the Investment Company Act of 1940 and Internal Revenue Code; such
conditions, if applicable, may have lowered the returns for separately managed
accounts. The results presented are not intended to predict or suggest the re-
turn to be experienced by the Portfolio or the return an investor might achieve
by investing in the Portfolio.
CHICAGO ASSET MANAGEMENT COMPANY -- EQUITY AND CASH COMPOSITE RETURNS
(Percentage returns of Net of Management Fees)
<TABLE>
<CAPTION>
CHICAGO
ASSET
MANAGEMENT
CALENDAR YEARS COMPANY S & P 500
-------------- ---------- ---------
<S> <C> <C>
1985....................................................... 36.1% 32.0%
1986....................................................... 21.9% 18.4%
1987....................................................... 4.7% 5.2%
1988....................................................... 26.4% 16.8%
1989....................................................... 21.5% 31.6%
1990....................................................... (8.1)% (3.2)%
1991....................................................... 29.3% 30.6%
1992....................................................... 14.4% 7.6%
1993....................................................... 13.4% 10.1%
1994....................................................... 7.6% 1.3%
1995....................................................... 30.3% 37.6%
9 Months ended 9/30/96..................................... 9.7% 13.5%
Annualized................................................. 17.0% 16.5%
Cumulative................................................. 532.4% 498.8%
Eleven-Year Mean........................................... 18.0% 17.1%
Value of $1 invested during (1/1/85-9/30/96)............... $ 6.32 $ 5.99
</TABLE>
- -----------
Notes:
1. The ANNUALIZED return is calculated from monthly data, allowing for com-
pounding. The formula used is in accordance with the acceptable methods set
forth by the Association for Investment Management Research, the Bank Ad-
ministration Institute, and the Investment Counsel Association of America.
24
<PAGE>
Market Value of the account was the sum of the account's total assets, in-
cluding cash, cash equivalents, short term investments, and securities val-
ued at current market prices.
2. The CUMULATIVE RETURN means that $1 invested in the account on January 1,
1985 had grown to $6.32 by September 30, 1996.
3. The 11-YEAR MEAN is the arithmetic average of the annual returns for the
calendar years listed.
4. The S & P 500 is an unmanaged index which assumes reinvestment of dividends
and is generally considered representative of securities similar to those
invested in by the Adviser for the purpose of the composite performance
numbers set forth above.
5. The Adviser's average annual management fee over the period shown (1/1/85-
9/30/96) was 0.40% or 40 basis points. During the period, fees on the Ad-
viser's individual accounts ranged from 0.25% to 1.00% (25 basis points to
100 basis points). Net returns to investors vary depending on the manage-
ment fee.
ADMINISTRATIVE SERVICES
UAM Fund Services, Inc. ("UAMFSI"), a wholly-owned subsidiary of United Asset
Management Corporation, is responsible for performing and overseeing
administrative, fund accounting, dividend disbursing and transfer agent
services provided to the Fund and its Portfolios. UAMFSI's principal office is
located at 211 Congress Street, Boston, MA 02110. UAMFSI has subcontracted some
of these services to Chase Global Funds Services Company ("CGFSC"), an
affiliate of The Chase Manhattan Bank, by a Mutual Funds Service Agreement
dated April 15, 1996. CGFSC is located at 73 Tremont Street, Boston, MA 02108.
Each Portfolio pays UAMFSI a two part monthly fee: a Portfolio-specific fee
which is retained by UAMFSI and a sub-administration fee which UAMFSI in turn
pays to CGFSC. The following Portfolio-specific fees are calculated from the
aggregate net assets of each Portfolio:
<TABLE>
<CAPTION>
RATE
----
<S> <C>
Chicago Asset Management Value/Contrarian Portfolio..................... .06%
</TABLE>
CGFSC's monthly fee for its services is calculated on an annualized basis as
follows:
0.19 of 1% of the first $200 million of combined Fund assets;
0.11 of 1% of the next $800 million of combined Fund assets;
0.07 of 1% of combined Fund assets in excess of $1 billion but less than
$3 billion;
0.05 of 1% of combined Fund assets in excess of $3 billion.
25
<PAGE>
Fees are allocated among the Portfolios on the basis of their relative assets
and are subject to a graduated minimum fee schedule per Portfolio, which starts
at $2,000 per month and increases to $70,000 annually after two years. If a
separate class of shares is added to a Portfolio, its minimum annual fee
increases by $20,000.
DISTRIBUTOR
UAM Fund Distributors, Inc., a wholly-owned subsidiary of UAM with its
principal office located at 211 Congress Street, Boston, Massachusetts 02110,
distributes the shares of the Fund. Under the Fund's Distribution Agreement,
the Distributor, as agent of the Fund, agrees to use its best efforts as sole
distributor of the Fund's shares. The Distributor does not receive any fee or
other compensation under the Distribution Agreement with respect to this
Portfolio. The Agreement continues in effect as long as it is approved at least
annually by the Fund's Board of Trustees. Those approving the Agreement include
a majority of Trustees who are neither parties to the Agreement nor interested
persons of any such party. The Distribution Agreement provides that the Fund
will bear the costs of the registration of its shares with the SEC and various
states and the printing of its prospectuses, SAIs and reports to shareholders.
PORTFOLIO TRANSACTIONS
The Advisory Agreements for the Fund's Portfolios authorize the Adviser to
select the brokers or dealers that will execute the purchases and sales of
investment securities for each Portfolio. The Agreements direct the Adviser to
use its best efforts to obtain the best available price and most favorable
execution for all transactions of the Portfolios. If consistent with the
interests of the Portfolios, the Adviser may select brokers on the basis of
research, statistical and pricing services these brokers provide to the
Portfolios in addition to required Adviser services. Such brokers may be paid a
higher commission than that which another qualified broker would have charged
for effecting the same transaction, provided that such commissions are paid in
compliance with the Securities Exchange Act of 1934, as amended, and that the
Adviser determines in good faith that the commission is reasonable in terms
either of the transaction or the overall responsibility of the Adviser to the
Portfolios and the Adviser's other clients. Although not a typical practice,
the Adviser may place portfolio orders with qualified broker-dealers who refer
clients to the Adviser.
If a purchase or sale of securities is consistent with the investment poli-
cies of a Portfolio and one or more other clients served by the Adviser is con-
sidering a purchase at or about the same time, transactions in such securities
will be allocated among the Portfolio and clients in a manner deemed fair and
reasonable by the Adviser. Although there is no specified formula for allocat-
ing such transactions, allocations are subject to periodic review by the Fund's
Trustees.
26
<PAGE>
GENERAL INFORMATION
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Fund was organized as a Delaware business trust on May 18, 1994 under the
name "The Regis Fund II." On October 31, 1995, the name of the Fund was changed
to "UAM Funds Trust." The Fund's Agreement and Declaration of Trust permits the
Fund to issue an unlimited number of shares of beneficial interest, without par
value. The Trustees have the power to designate one or more series
("Portfolios") or classes of shares of beneficial interest without further
action by shareholders.
At its discretion, the Board of Trustees may create additional Portfolios and
classes of shares. The shares of each Portfolio are fully paid and nonassess-
able, and have no preference as to conversion, exchange, dividends, retirement
or other features and no pre-emptive rights. They have noncumulative voting
rights, which means that holders of more than 50% of shares voting for the
election of Trustees can elect 100% of the Trustees. A shareholder is entitled
to one vote for each full share held (and a fractional vote for each fractional
share held), then standing in his or her name on the books of the Fund.
As of December 6, 1996, John McNamara, Norton Reamer and William Park Trust-
ees, UAM Profit Sharing & 401k Plan, Chicago, IL held of record 58.1% of the
outstanding shares of the Portfolio's Institutional Class Shares for which own-
ership is disclaimed or presumed disclaimed. The persons or organizations own-
ing 25% or more of the outstanding shares of the Portfolio may be presumed to
"control" (as that term is defined in the 1940 Act) the Portfolio. As a result,
these persons or organizations could have the ability to vote a majority of the
shares of the Portfolio on any matter requiring the approval of shareholders of
the Portfolio.
Annual meetings will not be held except as required by the 1940 Act and other
applicable laws. The Fund has undertaken that its Trustees will call a meeting
of shareholders if such a meeting is requested in writing by the holders of not
less than 10% of the outstanding shares of the Fund. The Fund will assist
shareholder communications in such matters.
CUSTODIAN
The Chase Manhattan Bank serves as custodian of the Fund's assets.
ACCOUNTANTS
Price Waterhouse LLP acts as the independent accountants for the Fund and au-
dits its financial statements annually.
REPORTS
Investors will receive unaudited semi-annual financial statements and annual
financial statements audited by Price Waterhouse LLP.
27
<PAGE>
SHAREHOLDER INQUIRIES
Shareholder inquiries may be made by contacting the UAM Funds Service Center
at the address or telephone number listed on the cover of this Prospectus.
LITIGATION
The Fund is not involved in any litigation.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS NOT CONTAINED IN THIS PROSPECTUS, OR IN THE PORTFOLIO'S STATEMENT OF
ADDITIONAL INFORMATION, IN CONNECTION WITH THE OFFERING MADE BY THIS PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR ITS REPRESENTATIONS MUST NOT BE RE-
LIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES NOT CON-
STITUTE AN OFFERING BY THE FUND IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY
NOT BE LAWFULLY MADE.
28
<PAGE>
UAM FUNDS -- INSTITUTIONAL CLASS SHARES
Acadian Emerging Markets Portfolio
Acadian International Equity Portfolio
BHM&S Total Return Bond Portfolio
Chicago Asset Management Intermediate Bond Portfolio
Chicago Asset Management Value/Contrarian Portfolio
C&B Balanced Portfolio
C&B Equity Portfolio
C&B Equity Portfolio for Taxable Investors
C&B Mid Cap Equity Portfolio
McKee Domestic Equity Portfolio
McKee International Equity Portfolio
McKee U.S. Government Portfolio
DSI Balanced Portfolio
DSI Disciplined Value Portfolio
DSI Limited Maturity Bond Portfolio
DSI Money Market Portfolio
FMA Small Company Portfolio
FPA Crescent Portfolio
Hanson Equity Portfolio
ICM Equity Portfolio
ICM Fixed Income Portfolio
ICM Small Company Portfolio
IRC Enhanced Index Portfolio
Jacobs International Octagon Portfolio
MJI International Equity Portfolio
Newbold's Equity Portfolio
NWQ Balanced Portfolio
NWQ Value Equity Portfolio
Rice, Hall James Small Cap Portfolio
Rice, Hall James Small/Mid Cap Portfolio
Sirach Equity Portfolio
Sirach Fixed Income Portfolio
Sirach Growth Portfolio
Sirach Short-Term Reserves Portfolio
29
<PAGE>
Sirach Special Equity Portfolio
Sirach Strategic Balanced Portfolio
SAMI Preferred Stock Income Portfolio
Sterling Partners' Balanced Portfolio
Sterling Partners' Equity Portfolio
Sterling Partners' Short-Term Fixed Income Portfolio
Sterling Partners' Small Cap Portfolio
Sterling Partners' Small Cap Value Portfolio
TS&W Balanced Portfolio
TS&W Equity Portfolio
TS&W Fixed Income Portfolio
TS&W International Equity Portfolio
30
<PAGE>
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
1-800-638-7983
Investment Adviser
Chicago Asset Management Company
70 West Madison Street 56th Floor
Chicago, IL 60602
Distributor
UAM FUND DISTRIBUTORS, INC.
211 Congress Street
Boston, MA 02110
PROSPECTUS
January 3, 1997
<PAGE>
LOGO
FPA Crescent
Portfolio
Institutional Service
Class Shares
January 3, 1997
P R O S P E C T U S
<PAGE>
UAM FUNDS
UAM FUNDS SERVICE CENTER
C/O CHASE GLOBAL FUNDS SERVICES COMPANY
P.O. BOX 2798
BOSTON, MA 02208-2798
1-800-638-7983
- -------------------------------------------------------------------------------
FPA CRESCENT PORTFOLIO
INSTITUTIONAL SERVICE CLASS SHARES
INVESTMENT ADVISER: FIRST PACIFIC ADVISORS, INC.
- -------------------------------------------------------------------------------
PROSPECTUS -- JANUARY 3, 1997
UAM Funds Trust (the "Fund") is an open-end investment company known as a
"mutual fund." The Fund consists of multiple series (known as Portfolios) each
of which has different investment objectives and policies. The FPA Crescent
Portfolio offers two separate classes of shares: Institutional Class Shares
and Institutional Service Class Shares ("Service Class Shares"). Shares of
each class represent equal, pro rata interests in a Portfolio and accrue divi-
dends in the same manner except that Service Class Shares bear fees payable by
the class (at the rate of .25% per annum) to financial institutions for serv-
ices they provide to the owners of such shares. The securities offered in this
Prospectus are Service Class Shares of one diversified, no-load Portfolio of
the Fund managed by First Pacific Advisors, Inc.
FPA CRESCENT PORTFOLIO. The FPA Crescent Portfolio's (the "Portfolio") in-
vestment objective is to provide, through a combination of income and capital
appreciation, a total return consistent with reasonable risk. The Portfolio
seeks to achieve its objective by investing primarily in equity securities
(common and preferred stocks) and fixed income obligations.
There can be no assurance that the Portfolio will achieve its objective.
Keep this Prospectus for future reference. It contains information that you
should know before you invest. A "Statement of Additional Information" ("SAI")
containing additional information about the Fund has been filed with the Secu-
rities and Exchange Commission. The SAI is dated January 3, 1997 and has been
incorporated by reference into this Prospectus. For a free copy of the SAI
contact the UAM Funds Service Center at the address or telephone number above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Fund Expenses.............................................................. 1
Prospectus Summary......................................................... 3
Risk Factors............................................................... 4
Investment Objective....................................................... 5
Investment Policies........................................................ 5
Other Investment Policies.................................................. 7
Purchase of Shares......................................................... 14
Redemption of Shares....................................................... 17
Service and Distribution Plans............................................. 19
Shareholder Services....................................................... 21
Valuation of Shares........................................................ 21
Performance Calculations................................................... 22
Dividends, Capital Gains Distributions and Taxes........................... 23
Investment Adviser......................................................... 24
Administrative Services.................................................... 25
Distributor................................................................ 25
Portfolio Transactions..................................................... 26
General Information........................................................ 26
UAM Funds -- Service Class Shares.......................................... 28
</TABLE>
<PAGE>
FUND EXPENSES
The following table illustrates expenses and fees that a shareholder of the
Portfolio's Service Class Shares would incur. Transaction fees may be charged
if a broker-dealer or other financial intermediary deals with the Fund on your
behalf. (See "PURCHASE OF SHARES.")
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Sales Load Imposed on Purchases:........................................ NONE
Sales Load Imposed on Reinvested Dividends:............................. NONE
Deferred Sales Load:.................................................... NONE
Redemption Fees:........................................................ NONE
Exchange Fees:.......................................................... NONE
</TABLE>
ANNUAL FUND OPERATING EXPENSES
As a Percentage of Net Assets
<TABLE>
<S> <C>
Investment Advisory Fees:............................................ 1.00%
Administrative Fees:................................................. 0.19%
12b-1 Fees: (Including Shareholder Servicing Fees)*.................. 0.25%
Other Expenses:...................................................... 0.42%
----
Total Operating Expenses............................................. 1.86%**
====
</TABLE>
- -----------
* The Service Class Shares may bear service fees of 0.25%. Long-term share-
holders may pay more than the economic equivalent of the maximum front-end
sales charge permitted by rules of the National Association of Securities
Dealers, Inc. See "Service and Distribution Plans."
** The Adviser, has agreed to waive all or a portion of its advisory fees and
to assume operating expenses otherwise payable by the Portfolio, if neces-
sary, in order to keep the Portfolio's Service Class Shares' total annual
operating expenses (excluding interest, taxes and extraordinary expenses)
from exceeding 2.10% of average daily net assets until further notice.
The table above shows various fees and expenses and investor would bear di-
rectly or indirectly. The fees and expenses set forth above are estimates
based upon the Portfolio's Institutional Class Shares operations during the
fiscal year ended March 31, 1996 except that such information has been re-
stated to reflect 12b-1 Fees and estimated current administrative fees and op-
erating expenses for assumed assets of approximately $22 million.
The following example illustrates expenses a shareholder would pay on a
$1,000 investment over various time periods assuming (1) a 5% annual rate of
1
<PAGE>
return and (2) redemption at the end of each time period. The Portfolios
charge no redemption fees of any kind.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Expenses:.................................... $19 $58 $101 $218
</TABLE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EX-
PENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE
SHOWN ABOVE.
The information set forth in the above table and example relates only to
Service Class Shares of the Portfolio, which shares are subject to different
total fees and expenses than Institutional Class Shares. Broker-dealers or
other financial intermediaries ("Service Agents") may charge other fees to
their customers who are beneficial owners of Service Class Shares in connec-
tion with their customer accounts. (See "SERVICE AND DISTRIBUTION PLANS.")
2
<PAGE>
PROSPECTUS SUMMARY
INVESTMENT ADVISER
First Pacific Advisors, Inc. (the "Adviser") acts as the Portfolio's Adviser
and has its origins dating back to 1954. It currently has over $3.5 billion in
assets under management. The Adviser is an indirect wholly-owned subsidiary of
United Asset Management Corporation. (See "INVESTMENT ADVISER.")
PURCHASE OF SHARES
Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the
"Distributor"), to investors at net asset value without a sales commission.
Share purchases may be made by sending investments directly to the Fund. The
minimum initial investment is $2,500. The minimum for subsequent investments
is $100. The minimum initial investment for IRA accounts is $1,000. Certain
exceptions to the initial or minimum investment amounts may be made by the of-
ficers of the Fund. (See "PURCHASE OF SHARES.")
DIVIDENDS AND DISTRIBUTIONS
The Portfolio will normally distribute substantially all of its net invest-
ment income in the form of dividends in June and December. Any realized net
capital gains will also be distributed annually or more often if necessary.
Distributions will be reinvested in the Portfolio's shares automatically un-
less an investor elects to receive cash distributions. (See "DIVIDENDS, CAPI-
TAL GAINS DISTRIBUTIONS AND TAXES.")
REDEMPTIONS AND EXCHANGES
Shares of the Portfolio may be redeemed at any time, without cost, at the
net asset value of the Portfolio next determined after receipt of the redemp-
tion request. The redemption price may be more or less than the purchase
price. (See "REDEMPTION OF SHARES.")
ADMINISTRATIVE SERVICES
UAM Fund Services Inc. ("UAMFSI"), a wholly-owned subsidiary of United Asset
Management Corporation, is responsible for performing and overseeing adminis-
tration, fund accounting, dividend disbursing and transfer agency services
provided to the Fund and its Portfolios by third-party service providers. (See
"ADMINISTRATIVE SERVICES.")
3
<PAGE>
RISK FACTORS
Prospective investors should understand that the Portfolio's performance
will be affected by a variety of factors since it invests in both stocks and
fixed-income securities. The value of the Portfolio's investments will vary
from day to day, generally reflecting global market, economic and political
developments; conditions in global and national markets; changes in currency
exchange rates; factors affecting individual stocks in the Portfolio; and
shifts in interest rates.
. The Portfolio may invest significantly in lower rated fixed-income secu-
rities, which typically offer higher coupon interest rates than invest-
ment grade securities, but also involve greater risks of default and
market volatility. Such securities are sometimes referred to as "junk
bonds" and are considered speculative by rating agencies.
. The Portfolio may engage in short sales of securities, which involve the
risk of loss if the securities increase in price between when the Port-
folio sells them short and repurchases them.
. The Portfolio may invest in repurchase agreements which entail a risk of
loss should the seller default on its transaction.
. The Portfolio may lend its investment securities which entails a risk of
loss should a borrower fail financially.
. The Portfolio may purchase securities on a when-issued basis which do
not earn interest until issued and may decline or appreciate in market
value prior to their delivery to the Portfolio.
. The Portfolio may engage in various hedging, currency and related strat-
egies to seek to hedge its investments against movements in security
prices, interest rates, and exchange rates by the use of derivatives,
including forward contracts, options and futures as well as options on
futures. These strategies involve the risk of imperfect correlation in
movements in the price of options and futures and movements in the price
of securities, interest rates or currencies which are the subject of the
hedge. These transactions are also subject to the risk factors associ-
ated with foreign investments generally. There can be no assurance that
a liquid secondary market for these hedging techniques will exist at any
specific time.
. The Portfolio may enter into interest rate hedging strategies commonly
referred to as derivatives which, if employed incorrectly, may adversely
affect the Portfolio.
Further information about each of the above risk factors and others is con-
tained in the "INVESTMENT POLICIES" section of this Prospectus.
4
<PAGE>
INVESTMENT OBJECTIVE
The investment objective of the Portfolio is to provide, through a combina-
tion of income and capital appreciation, a total return consistent with rea-
sonable investment risk. The Portfolio seeks to achieve its objective by in-
vesting in a combination of equity securities and fixed income obligations.
There is, of course, no assurance that the Portfolio's objective will be
achieved. Because prices of common stocks and fixed-income securities fluctu-
ate, the value of an investment in the Portfolio will vary, as the market
value of its investment portfolio changes.
The Portfolio actively seeks value in all parts of a company's capital
structure, including common and preferred stocks, as well as corporate and
convertible bonds. The Portfolio will typically have between 50% and 70% of
its total assets invested in equity securities with the balance comprised of
fixed-income securities and cash and equivalents.
INVESTMENT POLICIES
EQUITY SECURITIES. The Adviser utilizes a contrarian investment style, which
often leads the Adviser to invest in "what other people do not wish to own."
The Adviser searches for common stocks, preferred stocks, warrants and con-
vertible securities that reflect low, price/earnings ratios (P/Es) and trade
at discounts to private market value.
The Adviser selects equity securities for the Portfolio which it believes
offer superior investment value. The Adviser deems the following important in
its stock selection process:
.High return on capital
.Solid balance sheet
.Meaningful cash flow
.Active share repurchase program
.Insider buying
.Superior management, seeking to maximize shareholder value
.Projected earnings growth exceeding the stock market average
In the Adviser's view, the stock market prices securities efficiently in the
long term, rewarding companies who successfully grow their earnings and penal-
izing those who do not. The Adviser's investment philosophy is based on the
conviction that the market valuation of securities is often inefficient in the
short term. When reacting to current economic or company information, invest-
ors frequently make purchase or sale decisions hastily. These decisions could
cause a particular security, industry group or the entire market to become un-
derpriced or overpriced in the short term thereby creating an excellent oppor-
tunity to either buy or sell.
This contrarian style leads to those investments that offer absolute value,
rather than relative value. Absolute value is an investment that trades at
substantial
5
<PAGE>
discount to private market value, rather than one that might appear inexpen-
sive based on a discount to its peer group or the market average. Attention is
directed toward those companies offering the best combination of such quality
criteria as strong market share, good management and high normalized return on
capital. A company purchased might not look inexpensive, considering current
earnings and return on capital; however, this may reflect such conditions as a
weak economy, an increase in their raw material costs, poor management, or any
number of other temporary considerations. The price drops caused by such de-
velopments can and often do provide buying opportunities.
Intensive research identifies these opportunities. The process includes
looking for ideas by reviewing stock price or industry group under-perfor-
mance, insider purchases, management changes and corporate spin-offs. Funda-
mental analysis is the foundation of the Adviser's investment approach. Re-
searching a prospective investment involves communicating directly with com-
pany management, suppliers, and customers, better defining future potential,
financial strength and the company's competitive position. Fundamental analy-
sis provides a thorough view of financial and business characteristics, al-
lowing for the determination of absolute value.
In addition to common stocks, equity securities purchased for the Portfolio
may include preferred stocks, convertible preferred stocks and warrants.
FIXED-INCOME OBLIGATIONS. Through fixed-income investments, the Adviser
seeks a reliable and recurring stream of income for the Portfolio, while pre-
serving its capital. The Adviser attempts to identify the current interest
rate trends and invests funds accordingly. Usually, a defensive interest rate
strategy is employed, with investments made at different points along the
yield curve in an attempt to keep the average maturity of fixed-income invest-
ments less than or equal to ten years.
The Adviser's approach is to invest in U.S. Treasury obligations, U.S. Gov-
ernment Agency and mortgage-backed securities, and corporate and convertible
bonds. The Adviser considers yield spread relationships and their underlying
factors such as credit quality, investor perception and liquidity on a contin-
uous basis to determine which sector offers the best investment value. When
combined with equity securities, the ownership of fixed-income securities not
only broadens the universe of opportunities, but offers additional diversifi-
cation and can help lower portfolio volatility.
The Adviser will invest in corporate bonds with yields substantially higher
than those of government securities. Opportunities frequently present them-
selves in parts of the capital structure of a company beyond common and pre-
ferred stock, including convertible and high yield bonds. Generally, these in-
vestments provide a return in excess of government securities and can provide
potential for capital
6
<PAGE>
appreciation. Historic returns for high yield bonds have been greater than
government securities. The Adviser's analysis includes studying interest ex-
pense coverage, business value/debt coverage and current business trends.
The Portfolio may purchase investment grade corporate debt securities. Secu-
rities rated BBB by Standard & Poor's Corporation ("S&P") or Moody's Investors
Service ("Moody's") are investment grade, but Moody's considers securities
rated Baa to have speculative characteristics. Changes in economic conditions
or other circumstances are more likely to lead to a weakened capacity for such
securities to make principal and interest payments than is the case for high-
er-rated debt securities.
OTHER INVESTMENT POLICIES
LOWER RATED SECURITIES. The Portfolio may invest in debt securities that are
rated below investment grade, but will limit that investment to no more than
30% of its total assets. Such securities, sometimes referred to as "junk
bonds," typically carry higher coupon rates than investment grade securities
but also involve higher risks and are described as speculative by both Moody's
and S&P. They may be subject to greater market price fluctuations, less li-
quidity, and greater risk of income or principal, including a greater possi-
bility of default or bankruptcy of the issuer of such securities, than are
more highly rated debt securities. Lower rated fixed income securities also
are likely to be more sensitive to adverse economic or company developments
and more subject to price fluctuations in response to changes in interest
rates. The market for lower-rated debt issues generally is thinner and less
active than that for higher quality securities, which may limit the Portfo-
lio's ability to sell such securities at fair value in response to changes in
the economy or financial markets.
The Adviser seeks to reduce the risk associated with investing in such secu-
rities by limiting the Portfolio's holdings in such securities and by the
depth of its own credit analysis. In selecting below investment grade securi-
ties, the Adviser seeks securities in companies with improving cash flows and
balance sheet prospects, whose credit ratings the Adviser views as likely to
be upgraded. The Adviser believes that such securities can produce returns
similar to equities, but with less risk. See the Statement of Additional In-
formation for further discussion of lower rated securities.
REPURCHASE AGREEMENTS. The Portfolio may enter into repurchase agreements in
order to earn additional income on available cash, or as a defensive invest-
ment in periods when the Fund is primarily in short-term maturities. A repur-
chase agreement is a short-term investment in which the purchaser (i.e., the
Portfolio) acquires ownership of a U.S. Government security (which may be of
any maturity) and the seller agrees to repurchase the obligation at a future
time at a set price, thereby determining the yield during the purchaser's
holding period (usually not more than seven days from the date of purchase).
Any repurchase transaction
7
<PAGE>
in which the Portfolio engages will require full collateralization of the
seller's obligation during the entire term of the repurchase agreement. In the
event of a bankruptcy or other default of the seller, the Portfolio could ex-
perience both delays in liquidating the underlying security and losses in val-
ue. However, the Portfolio intends to enter into repurchase agreements only
with banks with assets of $500 million or more that are insured by the Federal
Deposit Insurance Corporation and the most creditworthy registered securities
dealers pursuant to procedures adopted and regularly reviewed by the Fund's
Board of Trustees. The Adviser monitors the creditworthiness of the banks and
securities dealers with whom the Portfolio engages in repurchase transactions.
The Fund has received permission from the SEC to pool daily uninvested cash
balances of the Fund's Portfolios in order to invest in repurchase agreements
on a joint basis. By entering into joint repurchase agreements, the Portfolio
may incur lower transactions costs and earn higher rates of interest on joint
repurchase agreements. The Portfolio's contribution would determine its return
from a joint repurchase agreement.
ILLIQUID AND RESTRICTED SECURITIES. The Portfolio may not invest more than
15% of its net assets in illiquid securities, including (i) securities for
which there is no readily available market; (ii) securities the disposition of
which would be subject to legal restrictions (so-called "restricted securi-
ties"); and (iii) repurchase agreements having more than seven days to maturi-
ty. A considerable period of time may elapse between the Portfolio's decision
to dispose of such securities and the time when the Portfolio is able to dis-
pose of them, during which time the value of the securities could decline. Re-
stricted securities do not include those which meet the requirements of Secu-
rities Act Rule 144A and which the Trustees have determined to be liquid based
on the applicable trading markets.
FOREIGN SECURITIES. The Portfolio may invest up to 20% of its total assets
in securities of foreign issuers. The Adviser usually buys securities of
larger foreign companies that have well recognized franchises and are selling
at a discount to the securities of similar domestic businesses.
There may be less publicly available information about these issuers than is
available about companies in the U.S. and foreign auditing requirements may be
not comparable to those in the U.S. In addition, the value of the foreign se-
curities may be adversely affected by movements in the exchange rates between
foreign currencies and the U.S. dollar, as well as other political and eco-
nomic developments, including the possibility of expropriation, confiscatory
taxation, exchange controls or other foreign governmental restrictions. The
Portfolio may also invest without limit in securities of foreign issuers which
are listed on a domestic national securities exchange.
SHORT SALES. The Portfolio may engage in short sales of securities. In a
short sale, the Portfolio sells stock which it does not own, making delivery
with securities "borrowed" from a broker. The Portfolio is then obligated to
replace the
8
<PAGE>
security borrowed by purchasing it at the market price at the time of replace-
ment. This price may or may not be less than the price at which the security
was sold by the Portfolio. Until the security is replaced, the Portfolio is re-
quired to pay to the lender any dividends or interest which accrue during the
period of the loan. In order to borrow the security, the Portfolio may also
have to pay a premium which would increase the cost of the security sold. The
proceeds of the short sale will be retained by the broker, to the extent neces-
sary to meet margin requirements, until the short position is closed out.
The Portfolio also must deposit in a segregated account an amount of cash or
liquid assets equal to the difference between (a) the market value of the secu-
rities short at the time they were sold short and (b) the value of the collat-
eral deposited with the broker in connection with the short sale (not including
the proceeds from the short sale). While the short position is open, the Port-
folio must maintain daily the segregated account at such a level that (1) the
amount deposited in it plus the amount deposited with the broker as collateral
equals the current market value of the securities sold short and (2) the amount
deposited in it plus the amount deposited with the broker as collateral is not
less than the market value of the securities at the time they were sold short.
The Portfolio will incur a loss as a result of the short sale if the price of
the security increases between the date of the short sale and date on which the
Portfolio replaces the borrowed security. The Portfolio will realize a gain if
the security declines in price between those dates. The amount of any gain will
be decreased and the amount of any loss will be increased by any interest the
Portfolio may be required to pay in connection with the short sale. The dollar
amount of short sales at any one time (not including short sales against the
box) may not exceed 25% of the net assets of the Portfolio.
A short sale is "against-the-box" if at all times when the short position is
open the Portfolio owns an equal amount of the securities or securities con-
vertible into, or exchangeable without further consideration for, securities of
the same issue as the securities sold short. Such a transaction serves to defer
a gain or loss for Federal income tax purposes.
OPTIONS AND FUTURES. The Portfolio may purchase and write call and put op-
tions on securities, securities indexes and on foreign currencies, and enter
into futures contracts and use options on futures contracts. The Portfolio may
use these techniques to hedge against changes in interest rates, foreign cur-
rency exchange rates or securities prices or as part of its overall investment
strategies. The Portfolio is subject to regulatory limitations on the use of
such techniques and is required to maintain segregated accounts consisting of
cash or liquid securities, (or, as permitted by applicable regulation, enter
into certain offsetting positions) to cover its obligations under options and
futures contracts to avoid leveraging of the Portfolio.
9
<PAGE>
The Portfolio may buy or sell interest rate futures contracts, options on in-
terest rate futures contracts and options on debt securities for the purpose of
hedging against changes in the value of securities which the Fund owns or an-
ticipates purchasing due to anticipated changes in interest rates. The Portfo-
lio also may engage in currency exchange transactions by means of buying or
selling foreign currency on a spot basis, entering into foreign currency for-
ward contracts, and buying and selling foreign currency options, futures and
options on futures. Foreign currency exchange transactions may be entered into
for the purpose of hedging against foreign currency exchange risk arising from
the Portfolio's investment or anticipated investment in securities denominated
in foreign currencies.
See the Statement of Additional Information for further information regarding
characteristics of and risks involved in the use of these instruments.
U.S. GOVERNMENT SECURITIES. The Portfolio may invest in U.S. Government secu-
rities. U.S. Government securities include direct obligations issued by the
U.S. Treasury, such as Treasury bills, certificates of indebtedness, notes and
bonds. U.S. Government agencies and instrumentalities that issue or guarantee
securities include, but are not limited to, the Federal National Mortgage Asso-
ciation, Government National Mortgage Association, Federal Home Loan Banks,
Federal Financing Bank, and Student Loan Marketing Association.
All Treasury securities are backed by the full faith and credit of the United
States. Obligations of U.S. Government agencies and instrumentalities may or
may not be supported by the full faith and credit of the United States. Some,
such as the Federal Home Loan Banks, are backed by the right of the agency or
instrumentality to borrow from the Treasury. Others, such as securities issued
by the Federal National Mortgage Association, are supported only by the credit
of the instrumentality and not by the Treasury. If the securities are not
backed by the full faith and credit of the United States, the owner of the se-
curities must look principally to the agency issuing the obligation for repay-
ment and may not be able to assert a claim against the United States in the
event that the agency or instrumentality does not meet its commitment.
MORTGAGE-RELATED SECURITIES. Mortgage pass-through securities are securities
representing interests in pools of mortgages in which payments of both interest
and principal on the securities are generally made monthly, in effect "passing
through" monthly payments made by the individual borrowers on the residential
mortgage loans which underlie the securities (net of fees paid to the issuer or
guarantor of the securities). Early repayment of principal on mortgage pass-
through securities (arising from prepayments of principal due to the sale of
underlying property, refinancing, or foreclosure, net of fees and costs which
may be incurred) may expose a Portfolio to a lower rate of return upon rein-
vestment of principal. Also, if a security subject to repayment has been pur-
chased at a premium, in the event of prepayment the value of the premium would
be lost.
10
<PAGE>
As noted above, payment of principal and interest on some mortgage related
securities (but not the market value of the securities themselves) may be guar-
anteed by the full faith and credit of the U.S. Government (in the case of se-
curities guaranteed by GNMA), by agencies or instrumentalities of the U.S. Gov-
ernment (in the case of securities guaranteed by FNMA or the Federal Home Loan
Mortgage Corporation ("FHLMC"), which are supported only by the discretionary
authority of the U.S. Government to purchase the agency's obligations). Mort-
gage pass-through securities created by non-governmental issuers (such as com-
mercial banks, savings and loan institutions, private mortgage insurance compa-
nies, mortgage bankers and other secondary market issuers) may be supported by
various forms of insurance or guarantees, including individual loan, title,
pool and hazard insurance, and letters of credit, which may be issued by gov-
ernmental entities, private insurers or the mortgage poolers.
Collateralized mortgage obligations ("CMO's") are hybrid instruments with
characteristics of both mortgage-backed bonds and mortgage pass-through securi-
ties. Similar to a bond, interest and prepaid principal on a CMO are paid, in
most cases, semi-annually. CMO's may be collaterialized by whole mortgage loans
but are more typically collaterialized by portfolios of mortgage pass-through
securities guaranteed by GNMA, FHLMC, or FNMA. CMO's are structured into multi-
ple classes, with each class bearing a different stated maturity. Monthly pay-
ments of principal, including prepayments, are first returned to investors
holding the shortest maturity class. Investors holding the longer maturity
classes receive principal only after the first class has been retired. Other
mortgage related securities include those that directly or indirectly represent
a participation in or are secured by and payable from mortgage loans on real
property, such as CMO residuals or stripped mortgage-backed securities, and may
be structured in classes with rights to receive varying proportions of princi-
pal and interest.
PORTFOLIO TURNOVER. The annual rate of portfolio turnover is not expected to
exceed 100%. In general, the Adviser will not consider the rate of portfolio
turnover to be a limiting factor in determining when or whether to purchase or
sell securities in order to achieve the Portfolio's objective. The table set
forth in "Financial Highlights" presents the Portfolio's historical portfolio
turnover ratios. High rates of portfolio turnover necessarily result in corre-
spondingly heavier brokerage and portfolio trading costs which are paid by the
Portfolio. In addition to portfolio trading costs, higher rates of portfolio
turnover may result in the realization of capital gains. To the extent net
short-term capital gains are realized, any distributions resulting from such
gains are considered ordinary income for federal income tax purposes. See "Div-
idends, Capital Gains Distributions and Taxes" for more information on taxa-
tion.
The Portfolio has adopted certain investment restrictions, which are de-
scribed fully in the Statement of Additional Information. Like the Portfolio's
investment
11
<PAGE>
objective, several of these restrictions are fundamental and may be changed
only by a majority vote of the Portfolio's outstanding shares.
SHORT-TERM INVESTMENTS. In order to earn a return on uninvested assets, meet
anticipated redemptions, or for temporary defensive purposes, the Portfolio may
invest a portion of its assets in domestic and foreign money market instruments
including certificates of deposit, bankers acceptances, time deposits, U.S.
Government obligations, U.S. Government agency securities, short-term corporate
debt securities, and commercial paper rated A-1 or A-2 by Standard & Poor's
Corporation or Prime-1 or Prime-2 by Moody's Investors Service, Inc. or if
unrated, determined by the Adviser to be of comparable quality.
Time deposits maturing in more than seven days will not be purchased by the
Portfolio, and time deposits maturing from two business days through seven cal-
endar days will not exceed 10% of the total assets of the Portfolio. The Port-
folio will not invest in any security issued by a commercial bank unless (i)
the bank has total assets of at least $1 billion, or the equivalent in other
currencies, (ii) in the case of U.S. banks, it is a member of the Federal De-
posit Insurance Corporation, and (iii) in the case of foreign branches of U.S.
banks, the security is, in the opinion of the Adviser, of an investment quality
comparable with other debt securities which may be purchased by the Portfolio.
The Fund has applied to the Securities and Exchange Commission (the "Commis-
sion") for and received permission to deposit the daily uninvested cash bal-
ances of the Fund's Portfolios, as well as cash for investment purposes, into
one or more joint accounts and to invest the daily balance of the joint ac-
counts in the following short-term investments: fully collateralized repurchase
agreements, interest-bearing or discounted commercial paper including dollar-
denominated commercial paper of foreign issuers, and any other short-term money
market instruments including variable rate demand notes and other tax-exempt
money instruments. By entering into these investments on a joint basis, it is
expected that a Portfolio may earn a higher rate of return on investments rela-
tive to what it could earn individually.
The Fund has received an Order from the Commission, which permits each of its
Portfolios to invest the greater of 5% of its total assets or $2.5 million in
the UAM Funds' DSI Money Market Portfolio for cash management purposes. (See
"Investment Companies.")
WHEN-ISSUED, FORWARD DELIVERY AND DELAYED SETTLEMENT SECURITIES. The Portfo-
lio may purchase and sell securities on a "when-issued," "delayed settlement,"
or "forward delivery" basis. "When-issued" or "forward delivery" refers to se-
curities whose terms and indenture are available, and for which a market ex-
ists, but which are not available for immediate delivery. When-issued and for-
ward delivery transactions may be expected to occur a month or more before de-
livery is due. Delayed settlement is a term used to describe settlement of a
12
<PAGE>
securities transaction in the secondary market which will occur sometime in the
future. No payment or delivery is made by the Portfolio until it receives pay-
ment or delivery from the other party to any of the above transactions. It is
possible that the market price of the securities at the time of delivery may be
higher or lower than the purchase price. The Portfolio will maintain a separate
account of cash or liquid securities at least equal to the value of the pur-
chase commitments until payment is made. Typically, no income accrues on secu-
rities purchased on a delayed delivery basis prior to the time delivery of the
securities is made although the Portfolio may earn income on securities it has
deposited in a segregated account.
The Portfolio engages in these types of purchases in order to buy securities
that fit with its investment objectives at attractive prices--not to increase
its investment leverage.
Securities purchased on a when-issued basis may decline or appreciate in mar-
ket value prior to their actual delivery to the Portfolio.
LENDING OF PORTFOLIO SECURITIES. The Portfolio may lend its investment secu-
rities to qualified institutional investors as a means of earning income. The
Portfolio will not loan portfolio securities to the extent that greater than
one-third of its assets at fair market value, would be committed to loans. By
lending its investment securities, the Portfolio attempts to increase its in-
come through the receipt of interest on the loan. Any gain or loss in the mar-
ket price of the securities loaned that might occur during the term of the loan
would be for the account of the Portfolio. All relevant facts and circumstanc-
es, including the creditworthiness of the broker, dealer or institution, will
be considered in making decisions with respect to the lending of securities,
subject to review by the Fund's Board of Trustees.
An investment company may pay reasonable negotiated fees in connection with
loaned securities so long as such fees are set forth in a written contract and
approved by the investment company's Board of Trustees. The Portfolio will con-
tinue to retain any voting rights with respect to the loaned securities. If a
material event occurs affecting an investment on loan, the loan must be called
and the securities voted.
INVESTMENT COMPANIES. As permitted by the 1940 Act, the Portfolio reserves
the right to invest up to 10% of its total assets, calculated at the time of
investment, in the securities of other open-end or closed-end investment compa-
nies. No more than 5% of the investing Portfolio's total assets may be invested
in the securities of any one investment company nor may it acquire more than 3%
of the voting securities of any other investment company. The Portfolio will
indirectly bear its proportionate share of any management fees paid by an in-
vestment company in which it invests in addition to the advisory fee paid by
the Portfolio.
The Fund has received an Order from the Commission, which permits each of its
Portfolios to invest the greater of 5% of its total assets or $2.5 million in
the
13
<PAGE>
UAM Funds' DSI Money Market Portfolio for cash management purposes provided
that the investment is consistent with the Portfolio's investment policies and
restrictions. Based upon the Portfolio's assets invested in the DSI Money Mar-
ket Portfolio, the investing Portfolio's adviser will waive its investment ad-
visory fee and any other fees earned as a result of the Portfolio's investment
in the DSI Money Market Portfolio. The investing Portfolio will bear expenses
of the DSI Money Market Portfolio on the same basis as all of its other share-
holders.
PURCHASE OF SHARES
Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the
"Distributor"), without a sales commission at the net asset value per share
next determined after an order is received by the Fund and payment is received
by the Custodian. (See "VALUATION OF SHARES.") The minimum initial investment
required is $2,500. The minimum initial investment for IRA accounts is $1,000.
Certain exceptions may be made by the officers of the Fund.
The Portfolio issues two classes of shares: Institutional Class and Institu-
tional Service Class. The two classes of shares each represent interests in the
same portfolio of investments, have the same rights and are identical in all
respects, except that the Service Class Shares offered by this Prospectus bear
shareholder servicing expenses, may in the future bear distribution plan ex-
penses, and have exclusive voting rights with respect to the Rule 12b-1 Distri-
bution Plan pursuant to which the distribution fee may be paid. The two classes
have different exchange privileges. (See "EXCHANGE PRIVILEGE") The net income
attributable to Service Class Shares and the dividends payable on Service Class
Shares will be reduced by the amount of the shareholder servicing and distribu-
tion fees; accordingly, the net asset value of the Service Class Shares will be
reduced by such amount to the extent the Portfolio has undistributed net in-
come.
Some Service Agents may also impose additional or different conditions or
other account fees on the purchase and redemption of Portfolio shares, which
are not subject to the Rule 12b-1 Service and Distribution Plans, which may in-
clude transaction fees and/or service fees paid by the Fund from the Fund as-
sets attributable to the Service Agent and, would not be imposed if shares of
the Portfolio were purchased directly from the Fund or the Distributor. The
Service Agents may provide shareholder services to their customers that are not
available to a shareholder dealing directly with the Fund. Each Service Agent
is responsible for transmitting to its customers a schedule of any such fees
and information regarding any additional or different purchase and redemption
conditions. Shareholders who are customers of Service Agents should consult
their Service Agent for information regarding these fees and conditions. A
salesperson and any other person entitled to receive compensation for selling
or servicing Portfolio shares may receive different compensation with respect
to one particular class of shares over another in the Fund.
14
<PAGE>
Service Agents may enter confirmed purchase orders on behalf of their custom-
ers. If shares of a Portfolio are purchased in this manner, the Service Agent
must receive your investment order before the close of trading on the New York
Stock Exchange ("NYSE"), and transmit it to the Fund's Sub-Transfer Agent prior
to 4 p.m. to receive that day's share price. Proper payment for the order must
be received by the Sub-Transfer Agent no later than the time when the Portfolio
is priced on the following business day. Service Agents are responsible to
their customers and the Fund for timely transmission of all subscription and
redemption requests, investment information, documentation and money.
INITIAL INVESTMENTS
BY MAIL
. Complete and sign an Application and mail it together with a check made
payable to UAM Funds to:
UAM Funds Trust
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
Payment for purchases of shares received by mail will be credited to an ac-
count at the next share price calculated for the Portfolio after receipt. Pay-
ment does not need to be converted into Federal Funds (monies credited to the
Fund's Custodian Bank by a Federal Reserve Bank) before the Fund will accept it
for investment.
BY WIRE
. Telephone the UAM Funds Service Center and provide the account name, ad-
dress, telephone number, social security or taxpayer identification num-
ber, Portfolio selected, amount being wired and the name of the bank
wiring the funds. An account number will then be provided to you. Next,
. instruct your bank to wire the specified amount to the Fund's Custodian:
The Chase Manhattan Bank
ABA #021000021
UAM Funds
DDA Acct. #9102772952
Ref: Portfolio Name
Your Account Number
Your Account Name
Wire Control Number
. Forward a completed Application to the Fund at the address shown on the
form. Federal Funds purchases will be accepted only on a day on which
both the NYSE and the Custodian Bank are open for business.
15
<PAGE>
ADDITIONAL INVESTMENTS
Additional investments can be made at any time. The minimum additional in-
vestment is $100. Shares can be purchased at net asset value by mailing a check
made payable to "UAM Funds" to the above address or by wiring money to the Cus-
todian Bank using the instructions outlined above. When making additional in-
vestments, be sure that the account number, account name and the Portfolio to
be purchased are identified on the check or wire. Prior to wiring additional
investments, notify the UAM Funds Service Center by calling the number on the
cover of this Prospectus. Mail orders should include, when possible, the "In-
vest by Mail" stub which accompanies any Fund confirmation statement.
OTHER PURCHASE INFORMATION
Investments received by 4 p.m. ET (the close of the NYSE) will be invested at
the share price calculated after the NYSE closes on that day. Investments re-
ceived after the close of the NYSE will be executed at the price computed on
the next day the NYSE is open. The Fund reserves the right, in its sole discre-
tion, to suspend the offering of shares of the Portfolio or to reject purchase
orders when, in the judgment of management, such suspension or rejection is in
the best interests of the Fund. Purchases of the Portfolio's shares will be
made in full and fractional shares of the Portfolio calculated to three decimal
places. Certificates for fractional shares will not be issued. Certificates for
whole shares will not be issued except at the written request of the sharehold-
er.
IN-KIND PURCHASES
If accepted by the Fund, shares of the Portfolio may be purchased in exchange
for securities which are eligible for acquisition by the Portfolio, as de-
scribed in this Prospectus. Securities to be exchanged which are accepted by
the Fund will be valued as described under "VALUATION OF SHARES" at the next
determination of net asset value after acceptance. Shares issued by the Portfo-
lio in exchange for securities will be issued at net asset value determined as
of the same time. All dividends, interest, subscription, or other rights per-
taining to such securities shall become the property of the Portfolio and must
be delivered to the Fund by the investor upon receipt from the issuer. Securi-
ties acquired through an in-kind purchase will be acquired for investment and
not for immediate resale.
The Fund will not accept securities in exchange for shares of the Portfolio
unless:
. at the time of exchange, such securities are eligible to be in-
cluded in the Portfolio (current market quotations must be readily
available for such securities);
. the investor represents and agrees that all securities offered to
be exchanged are liquid securities and not subject to any restric-
tions upon their sale by the Portfolio under the Securities Act of
1933, or otherwise; and
16
<PAGE>
. the value of any such securities (except U.S. Government securi-
ties) being exchanged together with other securities of the same
issuer owned by the Portfolio will not exceed 5% of the net assets
of the Portfolio immediately after the transaction.
. Investors who are subject to Federal taxation upon exchange may re-
alize a gain or loss for Federal income tax purposes depending upon
the cost of securities or local currency exchanged. Investors in-
terested in such exchanges should contact the Adviser.
REDEMPTION OF SHARES
Shares of the Portfolio may be redeemed by mail or telephone at any time,
without cost, at the net asset value of the Portfolio next determined after re-
ceipt of the redemption request. No charge is made for redemptions. Any redemp-
tion may be more or less than the purchase price of the shares depending on the
market value of investment securities held by the Portfolio.
BY MAIL
Address requests for redemption to the UAM Funds Service Center. Requests to
redeem shares must include:
. share certificates, if issued;
. a letter of instruction or an assignment specifying the number of
shares or dollar amount to be redeemed, signed by all registered
owners of the shares in the exact names in which they are regis-
tered;
. any required signature guarantees (see "SIGNATURE GUARANTEES"); and
. any other necessary legal documents, if required, in the case of
estates, trusts, guardianships, custodianships, corporations, pen-
sion and profit sharing plans and other organizations.
BY TELEPHONE
A redemption request by telephone requires the following:
. establish the telephone redemption privilege (and if desired, the
wire redemption privilege) by completing appropriate sections of
the Application; and
. call the Fund and instruct that the redemption proceeds be mailed
to you or wired to your bank.
The following tasks cannot be accomplished by telephone:
. changing the name of the commercial bank or the account designated
to receive redemption proceeds (this can be accomplished only by a
17
<PAGE>
written request signed by each shareholder, with each signature
guaranteed);
. redemption of certificated shares by telephone.
The Fund and its Sub-Transfer Agent will employ reasonable procedures to con-
firm that instructions communicated by telephone are genuine, and they may be
liable for any losses if they fail to do so. These procedures include requiring
the investor to provide certain personal identification at the time an account
is opened, as well as prior to effecting each transaction requested by tele-
phone. In addition, all telephone transaction requests will be recorded and in-
vestors may be required to provide additional telecopied written instructions
of such transaction requests. The Fund or Sub-Transfer Agent may be liable for
any losses due to unauthorized or fraudulent telephone instructions if the Fund
or the Sub-Transfer Agent do not employ the procedures described above. Neither
the Fund nor the Sub-Transfer Agent will be responsible for any loss, liabili-
ty, cost or expense for following instructions received by telephone that it
reasonably believes to be genuine.
SIGNATURE GUARANTEES
Signature guarantees are required for the following redemptions:
. redemptions where the proceeds are to be sent to someone other than
the registered shareowner(s);
. redemptions where the proceeds are to be sent to someplace other
than the registered address; or
. share transfer requests.
Signature guarantees will be accepted from any eligible guarantor institution
which participates in a signature guarantee program. Eligible guarantor insti-
tutions include banks, brokers, dealers, credit unions, national securities ex-
changes, registered securities associations, clearing agencies and savings as-
sociations. Broker-dealers guaranteeing signatures must be a member of a clear-
ing corporation or maintain net capital of at least $100,000. Credit unions
must be authorized to issue signature guarantees.
OTHER REDEMPTION INFORMATION
Normally, the Fund will make payment for all shares redeemed under proper
procedures within one business day of and no more than seven days after the re-
ceipt of the request, or earlier if required under applicable law. The Fund may
suspend the right of redemption or postpone the date at times when both the
NYSE and Custodian Bank are closed, or under any emergency circumstances deter-
mined by the SEC.
If the Board of Trustees determines that it would be detrimental to the best
interests of remaining shareholders of the Fund to make payment wholly or
partly
18
<PAGE>
in cash, the Fund may pay redemption proceeds in whole or in part by a distri-
bution in-kind of liquid securities held by a Portfolio in lieu of cash in con-
formity with applicable rules of the SEC. Investors may incur brokerage charges
on the sale of portfolio securities received in payment of redemptions.
SERVICE AND DISTRIBUTION PLANS
Under the Service Plan for Service Class Shares, adopted pursuant to Rule
12b-1 under the 1940 Act, the Fund may enter into service agreements with Serv-
ice Agents (broker-dealers or other financial institutions) who receive fees
with respect to the Fund's Service Class Shares owned by shareholders for whom
the Service Agent is the dealer or holder of record, or for whom the Service
Agent performs Servicing, as defined below. These fees are paid out of the as-
sets allocable to Service Class Shares to the Distributor or to the Service
Agents directly or through the Distributor. The Fund reimburses the Distributor
or the Service Agent for payments made at an annual rate of up to 0.25% of the
average daily value of Service Class Shares owned by clients of the Service
Agent during the period payments for Servicing are being made to it. Such pay-
ments are borne exclusively by the Service Class Shares. Each item for which a
payment may be made under the Service Plan constitutes personal service and/or
shareholder account maintenance and may constitute an expense of distributing
Fund shares as the SEC construes such term under Rule 12b-1. The fees payable
for servicing reflect actual expenses incurred up to the limits described here-
in.
Servicing may include assisting clients in changing dividend options, account
designations and addresses; performing subaccounting; establishing and main-
taining shareholder accounts and records; processing purchase and redemption
transactions; investing client cash account balances automatically in Service
Class Shares; providing periodic statements showing a client's account balance
and integrating such statements with those of other transactions and balances
in the client's other accounts serviced by the Service Agent; arranging for
bank wires; and such other services as the Fund may request, to the extent the
Service Agent is permitted by applicable statute, rule or regulation.
The Glass-Steagall Act and other applicable laws prohibit federally chartered
or supervised banks from engaging in certain aspects of the business of issu-
ing, underwriting, selling and/or distributing securities. Accordingly, banks
are engaged to act as Service Agent only to perform administrative and share-
holder servicing functions, including transaction-related agency services for
their customers. If a bank is prohibited from acting as a service agent, alter-
native means for continuing the servicing of its shareholders would be sought
and the shareholder clients of the bank will remain Fund shareholders.
The Distributor promotes the distribution of the Service Class Shares in ac-
cordance with the terms of a Distribution Plan adopted pursuant to Rule 12b-1
19
<PAGE>
under the 1940 Act. The Distribution Plan provides for the use of Fund assets
allocable to Service Class Shares to pay expenses of distributing such shares.
The Distribution Plan and Service Plan (the "Plans") were approved by the
Board, including a majority of the Trustees who are not "interested persons" of
the Fund as defined in the 1940 Act (and each of whom has no direct or indirect
financial interest in the Plans or any agreement related thereto, referred to
herein as the "12b-1 Trustees"). The Plans may be terminated at any time by the
vote of the Board or the 12b-1 Trustees, or by the vote of a majority of the
outstanding Service Class Shares of the Portfolio involved.
While the Plans continue in effect, the selection of the 12b-1 Trustees is
committed to the discretion of such persons then in office. The Plans provide
generally that a Portfolio may incur distribution and service costs under the
Plans which may not exceed in the aggregate 0.75% per annum of that Portfolio's
net assets. The Board has currently limited aggregate payments under the Plans
to 0.50% per annum of a Portfolio's net assets. Upon implementation, the Dis-
tribution Plan would permit payments to the Distributor, broker-dealers, other
financial institutions, sales representatives or other third parties who render
promotional and distribution services, for items such as advertising expenses,
selling expenses, commissions or travel reasonably intended to result in sales
of Service Class Shares and for the printing of prospectuses sent to prospec-
tive purchasers of Service Class Shares of the Portfolio.
Although the Plans may be amended by the Board of Trustees, any changes in
the Plans which would materially increase the amounts authorized to be paid un-
der the Plans must be approved by shareholders of the Class involved. The total
amounts paid under the foregoing arrangements may not exceed the maximum limits
specified above, and the amounts and purposes of expenditures under the Plans
must be reported to the 12b-1 Trustees quarterly. The amounts allowable under
the Plans for each Class of Shares of the Portfolios are also limited under
certain rules of the National Association of Securities Dealers, Inc.
In addition to payments by the Fund under the Plans, the Distributor, United
Asset Management Corporation, the parent company of UAMFSI, and of the Adviser
or any of their affiliates, may, at its own expense, compensate a Service Agent
or other person for marketing, shareholder servicing, record-keeping and/or
other services performed with respect to the Fund, the Portfolio or any Class
of Shares of the Portfolio. The person making such payments may do so out of
its revenues, its profits or any other source available to it. Such service ar-
rangements, when in effect, are made generally available to all qualified serv-
ice providers. The Adviser may compensate its affiliated companies for refer-
ring investors to the Portfolio.
The Distributor, the Adviser and certain of their other affiliates also par-
ticipate, at the date of this Prospectus, in an arrangement with Smith Barney
Inc. under
20
<PAGE>
which Smith Barney provides certain defined contribution plan marketing and
shareholder services and receives from such entities an amount equal to up to
33.3% of the portion of the investment advisory fees attributable to the in-
vested assets of Smith Barney's eligible customer accounts without regard to
any expense limitation in addition to amounts payable to all selling dealers.
The Fund also compensates Smith Barney for services it provides to certain de-
fined contribution plan shareholders that are not otherwise provided by UAMFSI.
SHAREHOLDER SERVICES
EXCHANGE PRIVILEGE
Service Class Shares of the Portfolio may be exchanged for Service Class
Shares of any other UAM Funds Portfolio. (See the list of Portfolios of the UAM
Funds at the end of this Prospectus.) Exchange requests should be made by con-
tacting the UAM Funds Service Center.
Any exchange will be based on the net asset value of the shares involved.
There is no sales commission or charge of any kind for an exchange. Before mak-
ing an exchange into a Portfolio, a shareholder should read its Prospectus and
consider the investment objectives of the Portfolio to be purchased. Call the
UAM Funds Service Center for a copy of the Prospectus for the Portfolio(s) in
which you are interested. Exchanges can only be made with Portfolios that are
qualified for sale in a shareholder's state of residence.
Exchange requests may be made either by mail or telephone. Telephone ex-
changes will be accepted only if the certificates for the shares to be ex-
changed have not been issued to the shareholder and if the registration of the
two accounts will be identical. Requests for exchanges received prior to 4 p.m.
(ET) will be processed as of the close of business on the same day. Requests
received after 4 p.m. will be processed on the next business day. The Board of
Trustees may limit the frequency and amount of exchanges permitted. For addi-
tional information regarding responsibility for the authenticity of telephoned
instructions, see "REDEMPTION OF SHARES -- BY TELEPHONE". An exchange into an-
other UAM Funds Portfolio is a sale of shares and may result in a gain or loss
for income tax purposes. The Fund may modify or terminate the exchange privi-
lege at any time.
VALUATION OF SHARES
The net asset value of the Portfolio is determined by dividing the value of
the Portfolio's assets attributable to the class, less any liabilities attrib-
utable to the class, by the number of shares outstanding attributable to the
class. The net asset value per share of the Portfolio is determined as of the
close of the NYSE on each day that the NYSE is open for business.
Equity securities listed on a securities exchange for which market quotations
are readily available are valued at the last quoted sale price of the day.
Price
21
<PAGE>
information on listed securities is taken from the exchange where the security
is primarily traded. Unlisted equity securities and listed securities not
traded on the valuation date for which market quotations are readily available
are valued neither exceeding the current asked prices nor less than the cur-
rent bid prices. Quotations of foreign securities in a foreign currency are
converted to U.S. dollar equivalents. The converted value is based upon the
bid price of the foreign currency against U.S. dollars quoted by any major
bank or by a broker.
Bonds and other fixed income securities are valued according to the broadest
and most representative market, which will ordinarily be the over-the-counter
market. Bonds and other fixed income securities may be valued on the basis of
prices provided by a pricing service when such prices are believed to reflect
the fair market value of such securities.
Securities purchased with remaining maturities of 60 days or less are valued
at amortized cost when the Board of Trustees determines that amortized cost
reflects fair value in good faith using methods determined by the Board of
Trustees.
The value of other assets and securities for which no quotations are readily
available (including restricted securities) is determined in good faith at
fair value using methods determined by the Trustees.
PERFORMANCE CALCULATIONS
The Portfolio measures performance by calculating yield and total return.
Both yield and total return figures are based on historical earnings and are
not intended to indicate future performance.
Total return is the change in value of an investment in the Portfolio over a
given period, assuming reinvestment of any dividends and capital gains. A cu-
mulative or aggregate total return reflects actual performance over a stated
period of time. An average annual total return is a hypothetical rate of re-
turn that, if achieved annually, would have produced the same cumulative total
return if performance had been constant over the entire period.
Performance will be calculated separately for Institutional Class and Serv-
ice Class Shares. Dividends paid by the Portfolio with respect to Institu-
tional Class and Service Class Shares, to the extent any dividends are paid,
will be calculated in the same manner at the same time on the same day and
will be in the same amount, except that service and distribution fees relating
to Service Class Shares will be borne exclusively by that class.
The Portfolio's performance may be compared to data prepared by independent
services which monitor the performance of investment companies, data reported
in financial and industry publications, and various indices as further de-
scribed in the Portfolio's SAI. This information may also be included in sales
literature and advertising.
22
<PAGE>
The Portfolio's Annual Report to Shareholders for the most recent fiscal year
end contains additional performance information that includes comparisons with
appropriate indices. The Annual Report is available without charge. Contact the
UAM Funds Service Center at the address or telephone number on the cover of
this Prospectus.
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
The Portfolio will normally distribute substantially all of its net invest-
ment income (for tax purposes) to shareholders in dividends in June and Decem-
ber. If any net capital gains are realized, the Portfolio will normally dis-
tribute them in June, with a supplemental distribution in December of any un-
distributed capital gains earned during the 12 month period ended each October.
All dividends and capital gains distributions will be automatically reinvested
in additional shares of the Portfolio unless the Fund is notified in writing
that the shareholder elects to receive the distributions in cash.
FEDERAL TAXES
The Portfolio intends to qualify as a "regulated investment company" under
subchapter M of the Internal Revenue Code of 1986, as amended, for federal in-
come tax purposes and to meet all other requirements that are necessary for it
(but not its shareholders) to be exempt from federal taxes on income and gains
paid to shareholders in the form of dividends. To do this, the Portfolio must,
among other things, distribute substantially all of its ordinary income and net
capital gains on an annual basis and maintain a portfolio of investments which
satisfies certain diversification criteria.
Dividends paid by the Portfolio from net investment income, whether in cash
or reinvested in shares, are taxable to shareholders as ordinary income. Short-
term capital gains will be taxed as ordinary income. Long-term capital gains
distributions are taxed as long-term capital gains. Shareholders will be noti-
fied annually of dividend income earned for tax purposes.
Dividends declared in October, November and December to shareholders of rec-
ord in such a month will be treated as if they had been paid by the Fund and
received by the shareholders on December 31 of the same calendar year, provided
that the dividends are paid before February of the following year.
The Fund is required by Federal law to withhold 31% of reportable payments
paid to shareholders who have not complied with IRS regulations. In order to
avoid this withholding requirement, you must certify that your Social Security
or Taxpayer Identification Number you have provided is correct and that either
you are not currently subject to backup withholding or you are exempt from
backup withholding. This certification must be made on the Application or on a
separate form supplied by the Fund.
23
<PAGE>
Dividends and interest received by the Portfolio may give rise to withholding
and other taxes imposed by foreign countries. These taxes reduce the Portfo-
lio's dividends but are included in the taxable income reported on your tax
statement if the Portfolio qualifies for this tax treatment and elects to pass
it through to you. Consult a tax adviser for more information regarding deduc-
tions and credits for foreign taxes.
INVESTMENT ADVISER
The Board of Trustees of the Trust establishes the Portfolio's policies and
supervises and reviews the management of the Portfolio. First Pacific Advisors,
Inc., located at 11400 West Olympic Blvd., Suite 1200, Los Angeles, CA 90064,
acts as the Portfolio's Adviser; Mr. Steven Romick is responsible for manage-
ment of the Portfolio. Mr. Romick has 12 years of experience in the investment
management business. He is currently a Senior Vice President of the Adviser.
From 1990-1996, Mr. Romick was Chairman of Crescent Management, an investment
advisory firm he founded. Crescent Management served as the Portfolio's adviser
until the firm was merged with the current Adviser.
Under an Investment Advisory Agreement dated as of September 30, 1996, the
Adviser provides the Portfolio with advice on buying and selling securities,
manages the investments of the Portfolio, furnishes the Portfolio with office
space and certain administrative services, and provides most of the personnel
needed by the Portfolio. As compensation, the Portfolio pays the Adviser a
monthly management fee (accrued daily) based upon the average daily net assets
of the Portfolio at the rate of 1.00% annually.
The Adviser, together with its predecessors, has been in the investment advi-
sory business since 1954. Presently, the Adviser manages assets of approxi-
mately $3.5 billion for five investment companies, including one closed-end in-
vestment company, and more than 40 institutional accounts. The Adviser is an
indirect wholly-owned subsidiary of UAM, a NYSE-listed holding company princi-
pally engaged, through affiliated firms, in providing institutional investment
management and acquiring institutional investment management firms.
The Portfolio is responsible for its own operating expenses. The Adviser has
agreed to reduce its fees or reimburse the Portfolio for its annual operating
expenses which exceed the most stringent limits prescribed by any state in
which the Portfolio's shares are offered for sale. The Adviser also may reim-
burse additional amounts to the Portfolio at any time in order to reduce the
Portfolio's expenses, or to the extent required by applicable securities laws.
To the extent the Adviser performs a service for which the Portfolio is obli-
gated to pay, the Portfolio shall reimburse the Adviser for its costs incurred
in rendering such service.
24
<PAGE>
The Adviser considers a number of factors in determining which brokers or
dealers to use for the Fund's portfolio transactions. While these are more
fully discussed in the SAI, the factors include, but are not limited to, the
reasonableness of commissions, quality of services and execution, and the
availability of research which the Adviser may lawfully and appropriately use
in its investment management and advisory capacities. Provided the Portfolio
receives prompt execution at competitive prices, the Adviser may also consider
the sale of Portfolio shares as a factor in selecting broker-dealers for the
Fund's portfolio transactions.
ADMINISTRATIVE SERVICES
UAM Fund Services, Inc. ("UAMFSI"), a wholly-owned subsidiary of United Asset
Management Corporation, is responsible for performing and overseeing adminis-
trative, fund accounting, dividend disbursing and transfer agent services pro-
vided to the Fund and its Portfolios. UAMFSI's principal office is located at
211 Congress Street, Boston, MA 02110. UAMFSI has subcontracted some of these
services to Chase Global Funds Services Company ("CGFSC"), an affiliate of The
Chase Manhattan Bank, by a Mutual Funds Service Agreement dated April 15, 1996.
CGFSC is located at 73 Tremont Street, Boston, MA 02108.
Each Portfolio pays UAMFSI a two part monthly fee: a Portfolio-specific fee
which is retained by UAMFSI and a sub-administration fee which UAMFSI in turn
pays to CGFSC. The following Portfolio-specific fees are calculated from the
aggregate net assets of each Portfolio:
<TABLE>
<CAPTION>
RATE
----
<S> <C>
FPA Crescent Portfolio............................................... 0.06%
</TABLE>
CGFSC's monthly fee for its services is calculated on an annualized basis as
follows:
0.19 of 1% of the first $200 million of combined Fund assets;
0.11 of 1% of the next $800 million of combined Fund assets;
0.07 of 1% of combined Fund assets in excess of $1 billion but less than
$3 billion;
0.05 of 1% of combined Fund assets in excess of $3 billion.
Fees are allocated among the Portfolios on the basis of their relative assets
and are subject to a graduated minimum fee schedule per Portfolio, which starts
at $2,000 per month and increases to $70,000 annually after two years. If a
separate class of shares is added to a Portfolio, its minimum annual fee in-
creases by $20,000.
DISTRIBUTOR
UAM Fund Distributors, Inc., a wholly-owned subsidiary of United Asset Man-
agement Corporation, with its principal office located at 211 Congress Street,
Boston, MA 02110, distributes shares of the Fund. Under the Distribution Agree
25
<PAGE>
ment (the "Agreement"), the Distributor, as agent of the Fund, agrees to use
its best efforts as sole distributor of Fund shares. The Distributor does not
receive any fee or other compensation under the Agreement with respect to the
Shares offered in this Prospectus except as described under "Service and Dis-
tribution Plans." The Agreement continues in effect as long as it is approved
at least annually by the Fund's Board of Trustees. Those approving the Agree-
ment must include a majority of Trustees who are neither parties to the Agree-
ment nor interested persons of any such party. The Agreement provides that the
Fund will bear costs of registration of its shares with the SEC and various
states as well as the printing of its prospectuses, its SAIs and its reports to
shareholders.
PORTFOLIO TRANSACTIONS
The Advisory Agreements for each of the Fund's Portfolios authorize the Ad-
viser to select the brokers or dealers that will execute the purchases and
sales of investment securities for each Portfolio. The Agreements direct the
Adviser to use its best efforts to obtain the best available price and most fa-
vorable execution for all transactions of the Portfolios. If consistent with
the interests of the Portfolios, the Adviser may select brokers on the basis of
research, statistical and pricing services these brokers provide to the Portfo-
lios in addition to required Adviser services. Such brokers may be paid a
higher commission than that which another qualified broker would have charged
for effecting the same transaction, provided that such commissions are paid in
compliance with the Securities Exchange Act of 1934, as amended, and that the
Adviser determines in good faith that the commission is reasonable in terms ei-
ther of the transaction or the overall responsibility of the Adviser to the
Portfolios and the Adviser's other clients. Although not a typical practice,
the Adviser may place portfolio orders with qualified broker-dealers who refer
clients to the Adviser.
If a purchase or sale of securities is consistent with the investment poli-
cies of a Portfolio and one or more other clients served by the Adviser is con-
sidering a purchase at or about the same time, transactions in such securities
will be allocated among the Portfolio and clients in a manner deemed fair and
reasonable by the Adviser. Although there is no specified formula for allocat-
ing such transactions, allocations are subject to periodic review by the Fund's
Trustees.
GENERAL INFORMATION
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Fund was organized as a Delaware business trust on May 18, 1994 under the
name "The Regis Fund II". On October 31, 1995, the name of the Fund was changed
to "UAM Funds Trust." The Fund's Agreement and Declaration of Trust permits the
Fund to issue an unlimited number of shares of beneficial interest, without par
value. The Trustees have the power to designate one or more series ("Portfo-
lios") or classes of shares of beneficial interest without further action by
shareholders.
26
<PAGE>
At its discretion, the Board of Trustees may create additional Portfolios and
classes of shares. The shares of each Portfolio are fully paid and nonassess-
able, and have no preference as to conversion, exchange, dividends, retirement
or other features and no pre-emptive rights. They have noncumulative voting
rights, which means that holders of more than 50% of shares voting for the
election of Trustees can elect 100% of the Trustees. A shareholder is entitled
to one vote for each full share held (and a fractional vote for each fractional
share held), then standing in his name on the books of the Fund.
Both Institutional Class and Institutional Service Class Shares represent an
interest in the same assets of a Portfolio. Service Class Shares bear certain
expenses related to shareholder servicing, and may bear expenses related to
distribution. Service Class shares have exclusive voting rights for matters re-
lating to such distribution expenditures. Information about the Institutional
Class Shares of the Portfolios is available upon request by contacting the UAM
Funds Service Center.
Annual meetings will not be held except as required by the 1940 Act and other
applicable laws. The Fund has undertaken that its Trustees will call a meeting
of shareholders if such a meeting is requested in writing by the holders of not
less than 10% of the outstanding shares of the Fund. The Fund will assist
shareholder communications in such matters to the extent required by the under-
taking.
CUSTODIAN
The Chase Manhattan Bank serves as custodian of the Fund's assets.
ACCOUNTANTS
Price Waterhouse LLP has been appointed as the independent accountants for
the Fund.
REPORTS
Investors will receive unaudited semi-annual financial statements and annual
financial statements audited by Price Waterhouse LLP.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be made by contacting the UAM Funds Service Center
at the address or telephone number on the cover of this Prospectus.
LITIGATION
The Fund is not involved in any litigation.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR IN THE PORTFOLIO'S
STATEMENT OF ADDITIONAL INFORMATION, IN CONNECTION WITH THE OFFERING MADE BY
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR ITS REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFERING BY THE FUND IN ANY JURISDICTION IN WHICH SUCH
OFFERING MAY NOT BE LAWFULLY MADE.
27
<PAGE>
UAM FUNDS -- SERVICE CLASS SHARES
BHM&S Total Return Bond Portfolio
FPA Crescent Fund
MJI International Equity Portfolio
Newbold's Equity Portfolio
NWQ Balanced Portfolio
NWQ Value Equity Portfolio
Sirach Growth Portfolio
Sirach Special Equity Portfolio
Sirach Equity Portfolio
Sirach Strategic Balanced Portfolio
Sterling Partner's Balanced Portfolio
Sterling Partner's Equity Portfolio
Sterling Partner's Short-Term Fixed Income Portfolio
TJ Core Equity Portfolio
28
<PAGE>
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
1-800-638-7983
Investment Adviser
First Pacific Advisors, Inc.
11400 West Olympic Boulevard
Suite 1200
Los Angeles, CA 90064
Distributor
UAM FUND DISTRIBUTORS, INC.
211 Congress Street
Boston, MA 02110
PROSPECTUS
January 3, 1997
<PAGE>
[LOGO of UAM FUNDS]
FPA Crescent Portfolio
Institutional
Class Shares
P R O S P E C T U S
January 3, 1997
<PAGE>
UAM FUNDS
UAM FUNDS SERVICE CENTER
C/O CHASE GLOBAL FUNDS SERVICES COMPANY
P.O. BOX 2798
BOSTON, MA 02208-2798
1-800-638-7983
- -------------------------------------------------------------------------------
FPA CRESCENT PORTFOLIO
INSTITUTIONAL CLASS SHARES
INVESTMENT ADVISER: FIRST PACIFIC ADVISORS, INC.
- -------------------------------------------------------------------------------
PROSPECTUS -- JANUARY 3, 1997
UAM Funds Trust (the "Fund") is an open-end investment company known as a
"mutual fund." The Fund consists of multiple series (known as Portfolios) each
of which has different investment objectives and policies. The FPA Crescent
Portfolio offers two separate classes of shares: Institutional Class Shares
and Institutional Service Class Shares ("Service Class Shares"). Shares of
each class represent equal, pro rata interests in a Portfolio and accrue divi-
dends in the same manner except that Service Class Shares bear fees payable by
the class (at the rate of .25% per annum) to financial institutions for serv-
ices they provide to the owners of such shares. The securities offered in this
Prospectus are Institutional Class Shares of one diversified, no-load Portfo-
lio of the Fund managed by First Pacific Advisors, Inc.
FPA CRESCENT PORTFOLIO. The FPA Crescent Portfolio's investment objective is
to provide, through a combination of income and capital appreciation, a total
return consistent with reasonable risk. The Portfolio seeks to achieve its ob-
jective by investing primarily in equity securities (common and preferred
stocks) and fixed income obligations.
There can be no assurance that the Portfolio will achieve its objective.
Keep this Prospectus for future reference. It contains information that you
should know before you invest. A "Statement of Additional Information" ("SAI")
containing additional information about the Fund has been filed with the Secu-
rities and Exchange Commission. The SAI is dated January 3, 1997 and has been
incorporated by reference into this Prospectus. For a free copy of the SAI
contact the UAM Funds Service Center at the address or telephone number above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECU-
RITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CON-
TRARY IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
Fund Expenses............................................................... 1
Financial Highlights........................................................ 3
Prospectus Summary.......................................................... 4
Risk Factors................................................................ 5
Investment Objective........................................................ 6
Investment Policies......................................................... 6
Other Investment Policies................................................... 8
Purchase of Shares.......................................................... 15
Redemption of Shares........................................................ 18
Shareholder Services........................................................ 19
Valuation of Shares......................................................... 20
Performance Calculations.................................................... 21
Dividends, Capital Gains Distributions and Taxes............................ 21
Investment Adviser.......................................................... 23
Administrative Services..................................................... 24
Distributor................................................................. 25
Portfolio Transactions...................................................... 25
General Information......................................................... 26
UAM Funds -- Institutional Class Shares..................................... 28
</TABLE>
<PAGE>
FUND EXPENSES
The following table illustrates expenses and fees that a shareholder of the
Portfolio's Institutional Class Shares would incur. Transaction fees may be
charged if a broker-dealer or other financial intermediary deals with the Fund
on your behalf. (See "PURCHASE OF SHARES.")
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Sales Load Imposed on Purchases:........................................ NONE
Sales Load Imposed on Reinvested Dividends:............................. NONE
Deferred Sales Load:.................................................... NONE
Redemption Fees:........................................................ NONE
Exchange Fees:.......................................................... NONE
</TABLE>
ANNUAL FUND OPERATING EXPENSES
AS A PERCENTAGE OF NET ASSETS
<TABLE>
<S> <C>
Investment Advisory Fees:............................................. 1.00%
Administrative Fees:.................................................. 0.19%
12b-1 Fees: (Including Shareholder Servicing Fees).................... NONE
Other Expenses:....................................................... 0.42%
----
Total Operating Expenses.............................................. 1.61%*
</TABLE>
- -----------
* The Adviser, has agreed to waive all or a portion of its advisory fees and
to assume operating expenses otherwise payable by the Portfolio, if neces-
sary, in order to keep the Portfolio's Institutional Class Shares' total an-
nual operating expenses (excluding interest, taxes and extraordinary ex-
penses) from exceeding 1.85% of average daily net assets until further no-
tice.
The table above shows various fees and expenses and investor would bear di-
rectly or indirectly. The fees and expenses set forth above are estimates
based upon the Portfolio's operations during the fiscal year ended March 31,
1996 except that such information has been restated to reflect estimated cur-
rent administrative fees and operating expenses for assets of approximately
$22 million.
The following example illustrates expenses a shareholder would pay on a
$1,000 investment over various time periods assuming (1) a 5% annual rate of
return and (2) redemption at the end of each time period. The Portfolios
charge no redemption fees of any kind.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Expenses: $16 $51 $88 $191
</TABLE>
1
<PAGE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EX-
PENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE
SHOWN ABOVE.
The information set forth in the above table and example relates only to In-
stitutional Class Shares of the Portfolio, which shares are subject to differ-
ent total fees and expenses than Service Class Shares. Broker-dealers or other
financial intermediaries ("Service Agents") may charge fees to their customers
who are beneficial owners of Institutional Class Shares in connection with
their customer accounts. (See "OTHER PURCHASE INFORMATION.")
2
<PAGE>
FINANCIAL HIGHLIGHTS*
FOR A CAPITAL SHARE OUTSTANDING THROUGHOUT THE PERIOD.
The following information has been audited by Tait, Weller & Baker, indepen-
dent accountants, whose unqualified report covering those periods ended March
31, 1996 and earlier which are indicated below is incorporated herein and ap-
pears in the Annual Report to shareholders. This information should be read in
conjunction with the financial statements and accompanying notes which appear
in the Annual Report and Semi-Annual Report to shareholders. The Annual Report
is incorporated into the SAI. The Semi-Annual Report is incorporated by refer-
ence. Further information about the Portfolio's performance is contained in
its Annual Report, which may be obtained without charge by writing or calling
the address or telephone number on the Prospectus cover page.
<TABLE>
<CAPTION>
JUNE 2, 1993** SIX MONTHS
THROUGH YEAR ENDED YEAR ENDED ENDED
MARCH 31, MARCH 31, MARCH 31, SEPTEMBER 30,
1994 1995 1996 1996
-------------- ---------- ---------- -------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD.................. $10.00 $10.96 $11.23 $ 12.67
------ ------ ------ -------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income...... .13 .21 .40 .14
Net realized and unrealized
gain on investments....... .99 .77 2.29 1.01
------ ------ ------ -------
Total from investment
operations................ 1.12 .98 2.69 1.15
------ ------ ------ -------
LESS DISTRIBUTIONS:
Dividends from net
investment income......... (.10) (.18) (.37) (.10)
Distributions from net
capital gains............. (.06) (.53) (.88) (.53)
------ ------ ------ -------
Total distributions........ (.16) (.71) (1.25) (.63)
------ ------ ------ -------
NET ASSET VALUE, END OF
PERIOD..................... $10.96 $11.23 $12.67 $ 13.19
====== ====== ====== =======
TOTAL RETURN................ 13.73%+ 9.35% 24.71% 9.29%
====== ====== ====== =======
RATIOS/SUPPLEMENTAL DATA:
NET ASSETS, END OF PERIOD
(MILLIONS)................. $ 10.2 $ 16.0 $ 22.0 $ 25.0
RATIO OF EXPENSES TO AVERAGE
NET ASSETS:
Before expense
reimbursement............. 1.86%+ 1.65% 1.59% 1.76%+
After expense
reimbursement............. 1.85%+ 1.65% 1.59% 1.76%+
Ratio of net investment
income to average net
assets:
Before expense
reimbursement............. 1.60%+ 2.16% 3.35% 2.21%+
After expense
reimbursement............. 1.61%+ 2.16% 3.35% 2.21%+
Portfolio turnover rate..... 88.88%+ 101.41% 99.98% 40.59%
Average commission rate
paid....................... -- -- -- $0.0515++
</TABLE>
- -----------
* Commencement of operations
+ Annualized.
++For fiscal years beginning on or after September 1, 1995, a fund is re-
quired to disclose its average commission rate per share for security
trades on which commissions are charged.
# Unaudited.
3
<PAGE>
PROSPECTUS SUMMARY
INVESTMENT ADVISER
First Pacific Advisors, Inc. (the "Adviser") acts as the Portfolio's Adviser
and has its origins dating back to 1954. It currently has over $3.5 billion in
assets under management. The Adviser is an indirect wholly-owned subsidiary of
United Asset Management Corporation. (See "INVESTMENT ADVISER.")
PURCHASE OF SHARES
Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the
"Distributor"), to investors at net asset value without a sales commission.
Share purchases may be made by sending investments directly to the Fund. The
minimum initial investment is $2,500. The minimum for subsequent investments
is $100. The minimum initial investment for IRA accounts is $1,000. Certain
exceptions to the initial or minimum investment amounts may be made by the of-
ficers of the Fund. (See "PURCHASE OF SHARES.")
DIVIDENDS AND DISTRIBUTIONS
The Portfolio will normally distribute substantially all of its net invest-
ment income in the form of dividends in June and December. Any realized net
capital gains will also be distributed annually or more often if necessary.
Distributions will be reinvested in the Portfolio's shares automatically un-
less an investor elects to receive cash distributions. (See "DIVIDENDS, CAPI-
TAL GAINS DISTRIBUTIONS AND TAXES.")
REDEMPTIONS AND EXCHANGES
Shares of the Portfolio may be redeemed at any time, without cost, at the
net asset value of the Portfolio next determined after receipt of the redemp-
tion request. The redemption price may be more or less than the purchase
price. (See "REDEMPTION OF SHARES.")
ADMINISTRATIVE SERVICES
UAM Fund Services Inc. ("UAMFSI"), a wholly-owned subsidiary of United Asset
Management Corporation, is responsible for performing and overseeing adminis-
tration, fund accounting, dividend disbursing and transfer agency services
provided to the Fund and its Portfolios by third-party service providers. (See
"ADMINISTRATIVE SERVICES.")
4
<PAGE>
RISK FACTORS
Prospective investors should understand that the Portfolio's performance will
be affected by a variety of factors since it invests in both stocks and fixed-
income securities. The value of the Portfolio's investments will vary from day
to day, generally reflecting global market, economic and political develop-
ments; conditions in global and national markets; changes in currency exchange
rates; factors affecting individual stocks in the Portfolio; and shifts in in-
terest rates.
. The Portfolio may invest significantly in lower rated fixed-income secu-
rities, which typically offer higher coupon interest rates than invest-
ment grade securities, but also involve greater risks of default and
market volatility. Such securities are sometimes referred to as "junk
bonds" and are considered speculative by rating agencies.
. The Portfolio may engage in short sales of securities, which involve the
risk of loss if the securities increase in price between when the Port-
folio sells them short and repurchases them.
. The Portfolio may invest in repurchase agreements which entail a risk of
loss should the seller default on its transaction.
. The Portfolio may lend its investment securities which entails a risk of
loss should a borrower fail financially.
. The Portfolio may purchase securities on a when-issued basis which do
not earn interest until issued and may decline or appreciate in market
value prior to their delivery to the Portfolio.
. The Portfolio may engage in various hedging, currency and related strat-
egies to seek to hedge its investments against movements in security
prices, interest rates, and exchange rates by the use of derivatives,
including forward contracts, options and futures as well as options on
futures. These strategies involve the risk of imperfect correlation in
movements in the price of options and futures and movements in the price
of securities, interest rates or currencies which are the subject of the
hedge. These transactions are also subject to the risk factors associ-
ated with foreign investments generally. There can be no assurance that
a liquid secondary market for these hedging techniques will exist at any
specific time.
. The Portfolio may enter into interest rate hedging strategies commonly
referred to as derivatives which, if employed incorrectly, may adversely
affect the Portfolio.
Further information about each of the above risk factors and others is con-
tained in the "INVESTMENT POLICIES" section of this Prospectus.
5
<PAGE>
INVESTMENT OBJECTIVE
The investment objective of the Portfolio is to provide, through a combina-
tion of income and capital appreciation, a total return consistent with rea-
sonable investment risk. The Portfolio seeks to achieve its objective by in-
vesting in a combination of equity securities and fixed income obligations.
There is, of course, no assurance that the Portfolio's objective will be
achieved. Because prices of common stocks and fixed-income securities fluctu-
ate, the value of an investment in the Portfolio will vary, as the market
value of its investment portfolio changes.
The Portfolio actively seeks value in all parts of a company's capital
structure, including common and preferred stocks, as well as corporate and
convertible bonds. The Portfolio will typically have between 50% and 70% of
its total assets invested in equity securities with the balance comprised of
fixed-income securities and cash and equivalents.
INVESTMENT POLICIES
EQUITY SECURITIES. The Adviser utilizes a contrarian investment style, which
often leads the Adviser to invest in "what other people do not wish to own."
The Adviser searches for common stocks, preferred stocks, warrants and con-
vertible securities that reflect low, price/earnings ratios (P/Es) and trade
at discounts to private market value.
The Adviser selects equity securities for the Portfolio which it believes
offer superior investment value. The Adviser deems the following important in
its stock selection process:
. High return on capital
. Solid balance sheet
. Meaningful cash flow
. Active share repurchase program
. Insider buying
. Superior management, seeking to maximize shareholder value
. Projected earnings growth exceeding the stock market average
In the Adviser's view, the stock market prices securities efficiently in the
long term, rewarding companies who successfully grow their earnings and penal-
izing those who do not. The Adviser's investment philosophy is based on the
conviction that the market valuation of securities is often inefficient in the
short term. When reacting to current economic or company information, invest-
ors frequently make purchase or sale decisions hastily. These decisions could
cause a particular security, industry group or the entire market to become un-
derpriced or overpriced in the short term thereby creating an excellent oppor-
tunity to either buy or sell.
6
<PAGE>
This contrarian style leads to those investments that offer absolute value,
rather than relative value. Absolute value is an investment that trades at
substantial discount to private market value, rather than one that might ap-
pear inexpensive based on a discount to its peer group or the market average.
Attention is directed toward those companies offering the best combination of
such quality criteria as strong market share, good management and high normal-
ized return on capital. A company purchased might not look inexpensive, con-
sidering current earnings and return on capital; however, this may reflect
such conditions as a weak economy, an increase in their raw material costs,
poor management, or any number of other temporary considerations. The price
drops caused by such developments can and often do provide buying opportuni-
ties.
Intensive research identifies these opportunities. The process includes
looking for ideas by reviewing stock price or industry group under-perfor-
mance, insider purchasers, management changes and corporate spin-offs. Funda-
mental analysis is the foundation of the Adviser's investment approach. Re-
searching a prospective investment involves communicating directly with com-
pany management, suppliers, and customers, better defining future potential,
financial strength and the company's competitive position. Fundamental analy-
sis provides a thorough view of financial and business characteristics, al-
lowing for the determination of absolute value.
In addition to common stocks, equity securities purchased for the Portfolio
may include preferred stocks, convertible preferred stocks and warrants.
FIXED-INCOME OBLIGATIONS. Through fixed-income investments, the Adviser
seeks a reliable and recurring stream of income for the Portfolio, while pre-
serving its capital. The Adviser attempts to identify the current interest
rate trends and invests funds accordingly. Usually, a defensive interest rate
strategy is employed, with investments made at different points along the
yield curve in an attempt to keep the average maturity of fixed-income invest-
ments less than or equal to ten years.
The Adviser's approach is to invest in U.S. Treasury obligations, U.S. Gov-
ernment Agency and mortgage-backed securities, and corporate and convertible
bonds. The Adviser considers yield spread relationships and their underlying
factors such as credit quality, investor perception and liquidity on a contin-
uous basis to determine which sector offers the best investment value. When
combined with equity securities, the ownership of fixed-income securities not
only broadens the universe of opportunities, but offers additional diversifi-
cation and can help lower portfolio volatility.
The Adviser will invest in corporate bonds with yields substantially higher
than those of government securities. Opportunities frequently present them-
selves in parts of the capital structure of a company beyond common and pre-
ferred stock,
7
<PAGE>
including convertible and high yield bonds. Generally, these investments pro-
vide a return in excess of government securities and can provide potential for
capital appreciation. Historic returns for high yield bonds have been greater
than government securities. The Adviser's analysis includes studying interest
expense coverage, business value/debt coverage and current business trends.
The Portfolio may purchase investment grade corporate debt securities. Secu-
rities rated BBB by Standard & Poor's Corporation ("S&P") or Moody's Investor
Service ("Moody's") are investment grade, but Moody's considers securities
rated Baa to have speculative characteristics. Changes in economic conditions
or other circumstances are more likely to lead to a weakened capacity for such
securities to make principal and interest payments than is the case for high-
er-rated debt securities.
OTHER INVESTMENT POLICIES
LOWER RATED SECURITIES. The Portfolio may invest in debt securities that are
rated below investment grade, but will limit that investment to no more than
30% of its total assets. Such securities, sometimes referred to as "junk
bonds," typically carry higher coupon rates than investment grade securities
but also involve higher risks and are described as speculative by both Moody's
and S&P. They may be subject to greater market price fluctuations, less li-
quidity, and greater risk of income or principal, including a greater possi-
bility of default or bankruptcy of the issuer of such securities, than are
more highly rated debt securities. Lower rated fixed income securities also
are likely to be more sensitive to adverse economic or company developments
and more subject to price fluctuations in response to change interest rates.
The market for lower-rated debt issues generally is thinner and less active
than that for higher quality securities, which may limit the Portfolio's abil-
ity to sell such securities at fair value in response to changes in the econ-
omy or financial markets.
The Adviser seeks to reduce the risk associated with investing in such secu-
rities by limiting the Portfolio's holdings in such securities and by the
depth of its own credit analysis. In selecting below investment grade securi-
ties, the Adviser seeks securities in companies with improving cash flows and
balance sheet prospects, whose credit ratings the Adviser views as likely to
be upgraded. The Adviser believes that such securities can produce returns
similar to equities, but with less risk. See the Statement of Additional In-
formation for further discussion of lower rated securities.
REPURCHASE AGREEMENTS. The Portfolio may enter into repurchase agreements in
order to earn additional income on available cash, or as a defensive invest-
ment in periods when the Fund is primarily in short-term maturities. A repur-
chase agreement is a short-term investment in which the purchaser (i.e., the
Portfolio) acquires ownership of a U.S. Government security (which may be of
any maturity) and the seller agrees to repurchase the obligation at a future
time at a set
8
<PAGE>
price, thereby determining the yield during the purchaser's holding period
(usually not more than seven days from the date of purchase). Any repurchase
transaction in which the Portfolio engages will require full collateralization
of the seller's obligation during the entire term of the repurchase agreement.
In the event of a bankruptcy or other default of the seller, the Portfolio
could experience both delays in liquidating the underlying security and losses
in value. However, the Portfolio intends to enter into repurchase agreements
only with banks with assets of $500 million or more that are insured by the
Federal Deposit Insurance Corporation and the most creditworthy registered se-
curities dealers pursuant to procedures adopted and regularly reviewed by the
Fund's Board of Trustees. The Adviser monitors the creditworthiness of the
banks and securities dealers with whom the Portfolio engages in repurchase
transactions. The Fund has received permission from the SEC to pool daily
uninvested cash balances of the Fund's Portfolios in order to invest in repur-
chase agreements on a joint basis. By entering into joint repurchase agree-
ments, the Portfolio may incur lower transactions costs and earn higher rates
of interest on joint repurchase agreements. The Portfolio's contribution would
determine its return from a joint repurchase agreement.
ILLIQUID AND RESTRICTED SECURITIES. The Portfolio may not invest more than
15% of its net assets in illiquid securities, including (i) securities for
which there is no readily available market; (ii) securities the disposition of
which would be subject to legal restrictions (so-called "restricted securi-
ties"); and (iii) repurchase agreements having more than seven days to maturi-
ty. A considerable period of time may elapse between the Portfolio's decision
to dispose of such securities and the time when the Portfolio is able to dis-
pose of them, during which time the value of the securities could decline. Re-
stricted securities do not include those which meet the requirements of Secu-
rities Act Rule 144A and which the Trustees have determined to be liquid based
on the applicable trading markets.
FOREIGN SECURITIES. The Portfolio may invest up to 20% of its total assets
in securities of foreign issuers. The Adviser usually buys securities of
larger foreign companies that have well recognized franchises and are selling
at a discount to the securities of similar domestic businesses.
There may be less publicly available information about these issuers than is
available about companies in the U.S. and foreign auditing requirements may be
not comparable to those in the U.S. In addition, the value of the foreign se-
curities may be adversely affected by movements in the exchange rates between
foreign currencies and the U.S. dollar, as well as other political and eco-
nomic developments, including the possibility of expropriation, confiscatory
taxation, exchange controls or other foreign governmental restrictions. The
Portfolio may also invest without limit in securities of foreign issuers which
are listed on a domestic national securities exchange.
SHORT SALES. The Portfolio may engage in short sales of securities. In a
short sale, the Portfolio sells stock which it does not own, making delivery
with securities "borrowed" from a broker. The Portfolio is then obligated to
replace the
9
<PAGE>
security borrowed by purchasing it at the market price at the time of replace-
ment. This price may or may not be less than the price at which the security
was sold by the Portfolio. Until the security is replaced, the Portfolio is
required to pay to the lender any dividends or interest which accrue during
the period of the loan. In order to borrow the security, the Portfolio may
also have to pay a premium which would increase the cost of the security sold.
The proceeds of the short sale will be retained by the broker, to the extent
necessary to meet margin requirements, until the short position is closed out.
The Portfolio also must deposit in a segregated account an amount of cash or
liquid assets equal to the difference between (a) the market value of the se-
curities short at the time they were sold short and (b) the value of the col-
lateral deposited with the broker in connection with the short sale (not in-
cluding the proceeds from the short sale). While the short position is open,
the Portfolio must maintain daily the segregated account at such a level that
(1) the amount deposited in it plus the amount deposited with the broker as
collateral equals the current market value of the securities sold short and
(2) the amount deposited in it plus the amount deposited with the broker as
collateral is not less than the market value of the securities at the time
they were sold short.
The Portfolio will incur a loss as a result of the short sale if the price
of the security increases between the date of the short sale and date on which
the Portfolio replaces the borrowed security. The Portfolio will realize a
gain if the security declines in price between those dates. The amount of any
gain will be decreased and the amount of any loss will be increased by any in-
terest the Portfolio may be required to pay in connection with the short sale.
The dollar amount of short sales at any one time (not including short sales
against the box) may not exceed 25% of the net assets of the Portfolio.
A short sale is "against-the-box" if at all times when the short position is
open the Portfolio owns an equal amount of the securities or securities con-
vertible into, or exchangeable without further consideration for, securities
of the same issue as the securities sold short. Such a transaction serves to
defer a gain or loss for Federal income tax purposes.
OPTIONS AND FUTURES. The Portfolio may purchase and write call and put op-
tions on securities, securities indexes and on foreign currencies, and enter
into futures contracts and use options on futures contracts. The Portfolio may
use these techniques to hedge against changes in interest rates, foreign cur-
rency exchange rates or securities prices or as part of its overall investment
strategies. The Portfolio is subject to regulatory limitations on the use of
such techniques and is required to maintain segregated accounts consisting of
cash or liquid securities (or, as permitted by applicable regulation, enter
into certain offsetting positions) to cover its obligations under options and
futures contracts to avoid leveraging of the Portfolio.
The Portfolio may buy or sell interest rate futures contracts, options on
interest rate futures contracts and options on debt securities for the purpose
of hedging against changes in the value of securities which the Fund owns or
anticipates
10
<PAGE>
purchasing due to anticipated changes in interest rates. The Portfolio also
may engage in currency exchange transactions by means of buying or selling
foreign currency on a spot basis, entering into foreign currency forward con-
tracts, and buying and selling foreign currency options, futures and options
on futures. Foreign currency exchange transactions may be entered into for the
purpose of hedging against foreign currency exchange risk arising from the
Portfolio's investment or anticipated investment in securities denominated in
foreign currencies.
See the Statement of Additional Information for further information regard-
ing characteristics of and risks involved in the use of these instruments.
U.S. GOVERNMENT SECURITIES. The Portfolio may invest in U.S. Government se-
curities. U.S. Government securities include direct obligations issued by the
U.S. Treasury, such as Treasury bills, certificates of indebtedness, notes and
bonds. U.S. Government agencies and instrumentalities that issue or guarantee
securities include, but are not limited to, the Federal National Mortgage As-
sociation, Government National Mortgage Association, Federal Home Loan Banks,
Federal Financing Bank, and Student Loan Marketing Association.
All Treasury securities are backed by the full faith and credit of the
United States. Obligations of U.S. Government agencies and instrumentalities
may or may not be supported by the full faith and credit of the United States.
Some, such as the Federal Home Loan Banks, are backed by the right of the
agency or instrumentality to borrow from the Treasury. Others, such as securi-
ties issued by the Federal National Mortgage Association, are supported only
by the credit of the instrumentality and not by the Treasury. If the securi-
ties are not backed by the full faith and credit of the United States, the
owner of the securities must look principally to the agency issuing the obli-
gation for repayment and may not be able to assert a claim against the United
States in the event that the agency or instrumentality does not meet its com-
mitment.
MORTGAGE-RELATED SECURITIES. Mortgage pass-through securities are securities
representing interests in pools of mortgages in which payments of both inter-
est and principal on the securities are generally made monthly, in effect
"passing through" monthly payments made by the individual borrowers on the
residential mortgage loans which underlie the securities (net of fees paid to
the issuer or guarantor of the securities). Early repayment of principal on
mortgage pass-through securities (arising from prepayments of principal due to
the sale of underlying property, refinancing, or foreclosure, net of fees and
costs which may be incurred) may expose a Portfolio to a lower rate of return
upon reinvestment of principal. Also, if a security subject to repayment has
been purchased at a premium, in the event of prepayment the value of the pre-
mium would be lost.
As noted above, payment of principal and interest on some mortgage related
securities (but not the market value of the securities themselves) may be
guaranteed
11
<PAGE>
by the full faith and credit of the U.S. Government (in the case of securities
guaranteed by GNMA), by agencies or instrumentalities of the U.S. Government
(in the case of securities guaranteed by FNMA or the Federal Home Loan Mort-
gage Corporation ("FHLMC"), which are supported only by the discretionary au-
thority of the U.S. Government to purchase the agency's obligations). Mortgage
pass-through securities created by non-governmental issuers (such as commer-
cial banks, savings and loan institutions, private mortgage insurance compa-
nies, mortgage bankers and other secondary market issuers) may be supported by
various forms of insurance or guarantees, including individual loan, title,
pool and hazard insurance, and letters of credit, which may be issued by gov-
ernmental entities, private insurers or the mortgage poolers.
Collateralized mortgage obligations ("CMO's") are hybrid instruments with
characteristics of both mortgage-backed bonds and mortgage pass-through secu-
rities. Similar to a bond, interest and prepaid principal on a CMO are paid,
in most cases, semi-annually. CMO's may be collateralized by whole mortgage
loans but are more typically collaterialized by portfolios of mortgage pass-
through securities guaranteed by GNMA, FHLMC, or FNMA. CMO's are structured
into multiple classes, with each class bearing a different stated maturity.
Monthly payments of principal, including prepayments, are first returned to
investors holding the shortest maturity class. Investors holding the longer
maturity classes receive principal only after the first class has been re-
tired. Other mortgage related securities include those that directly or indi-
rectly represent a participation in or are secured by and payable from mort-
gage loans on real property, such as CMO residuals or stripped mortgage-backed
securities, and may be structured in classes with rights to receive varying
proportions of principal and interest.
PORTFOLIO TURNOVER. In general, the Adviser will not consider the rate of
portfolio turnover to be a limiting factor in determining when or whether to
purchase or sell securities in order to achieve the Portfolio's objective. The
table set forth in "Financial Highlights" presents the Portfolio's historical
turnover ratios. High rates of portfolio turnover necessarily result in corre-
spondingly heavier brokerage and portfolio trading costs which are paid by the
Portfolio. In addition to portfolio trading costs, higher rates of portfolio
turnover may result in the realization of capital gains. To the extent net
short-term capital gains are realized, any distributions resulting from such
gains are considered ordinary income for federal income tax purposes. See
"Dividends, Capital Gains Distributions and Taxes" for more information on
taxation.
The Portfolio has adopted certain investment restrictions, which are de-
scribed fully in the Statement of Additional Information. Like the Portfolio's
investment objective, several of these restrictions are fundamental and may be
changed only by a majority vote of the Portfolio's outstanding shares.
12
<PAGE>
SHORT-TERM INVESTMENTS. In order to earn a return on uninvested assets, meet
anticipated redemptions, or for temporary defensive purposes, the Portfolio
may invest a portion of its assets in domestic and foreign money market in-
struments including certificates of deposit, bankers acceptances, time depos-
its, U.S. Government obligations, U.S. Government agency securities, short-
term corporate debt securities, and commercial paper rated A-1 or A-2 by Stan-
dard & Poor's Corporation or Prime-1 or Prime-2 by Moody's Investors Service,
Inc. or if unrated, determined by the Adviser to be of comparable quality.
Time deposits maturing in more than seven days will not be purchased by the
Portfolio, and time deposits maturing from two business days through seven
calendar days will not exceed 10% of the total assets of the Portfolio. The
Portfolio will not invest in any security issued by a commercial bank unless
(i) the banks has total assets of at least $1 billion, or the equivalent in
other currencies, (ii) in the case of U.S. banks, it is a member of the Fed-
eral Deposit Insurance Corporation, and (iii) in the case of foreign branches
of U.S. banks, the security is, in the opinion of the Adviser, of an invest-
ment quality comparable with other debt securities which may be purchased by
the Portfolio.
The Fund has applied to the Securities and Exchange Commission (the "Commis-
sion") for and received permission to deposit the daily uninvested cash bal-
ances of the Fund's Portfolios, as well as cash for investment purposes, into
one or more joint accounts and to invest the daily balance of the joint ac-
counts in the following short-term investments: fully collateralized repur-
chase agreements, interest-bearing or discounted commercial paper including
dollar-denominated commercial paper of foreign issuers, and any other short-
term money market instruments including variable rate demand notes and other
tax-exempt money instruments. By entering into these investments on a joint
basis, it is expected that a Portfolio may earn a higher rate of return on in-
vestments relative to what it could earn individually.
The Fund has received an Order from the Commission, which permits each of
its Portfolios to invest the greater of 5% of its total assets or $2.5 million
in the UAM Funds' DSI Money Market Portfolio for cash management purposes.
(See "Investment Companies.")
WHEN-ISSUED, FORWARD DELIVERY AND DELAYED SETTLEMENT SECURITIES. The Portfo-
lio may purchase and sell securities on a "when-issued," "delayed settlement,"
or "forward delivery" basis. "When-issued" or "forward delivery" refers to se-
curities whose terms and indenture are available, and for which a market ex-
ists, but which are not available for immediate deliver. When-issued and for-
ward delivery transactions may be expected to occur a month or more before de-
livery is due. Delayed settlement is a term used to describe settlement of a
securities transaction in the secondary market which will occur sometime in
the future. No payment or delivery is made by the Portfolio until it receives
payment or delivery from
13
<PAGE>
the other party to any of the above transactions. It is possible that the mar-
ket price of the securities at the time of delivery may be higher or lower than
the purchase price. The Portfolio will maintain a separate account of cash or
liquid securities at least equal to the value of the purchase commitments until
payment is made. Typically, no income accrues on securities purchased on a de-
layed delivery basis prior to the time delivery of the securities is made al-
though the Portfolio may earn income on securities it has deposited in a segre-
gated account.
The Portfolio engages in these types of purchases in order to buy securities
that fit with its investment objectives at attractive prices not to increase
its investment leverage.
Securities purchased on a when-issued basis may decline or appreciate in mar-
ket value prior to their actual delivery to the Portfolio.
LENDING OF PORTFOLIO SECURITIES. The Portfolio may lend its investment secu-
rities to qualified institutional investors as a means of earning income. The
Portfolio will not loan portfolio securities to the extent that greater than
one-third of its assets at fair market value, would be committed to loans. By
lending its investment securities, the Portfolio attempts to increase its in-
come through the receipt of interest on the loan. Any gain or loss in the mar-
ket price of the securities loaned that might occur during the term of the loan
would be for the account of the Portfolio. All relevant facts and circumstanc-
es, including the creditworthiness of the broker, dealer or institution, will
be considered in making decisions with respect to the lending of securities,
subject to review by the Fund's Board of Trustees.
An investment company may pay reasonable negotiated fees in connection with
loaned securities so long as such fees are set forth in a written contract and
approved by the investment company's Board of Trustees. The Portfolio will con-
tinue to retain any voting rights with respect to the loaned securities. If a
material event occurs affecting an investment on loan, the loan must be called
and the securities voted.
INVESTMENT COMPANIES. As permitted by the 1940 Act, the Portfolio reserves
the right to invest up to 10% of its total assets, calculated at the time of
investment, in the securities of other open-end or closed-end investment compa-
nies. No more than 5% of the investing Portfolio's total assets may be invested
in the securities of any one investment company nor may it acquire more than 3%
of the voting securities of any other investment company. The Portfolio will
indirectly bear its proportionate share of any management fees paid by an in-
vestment company in which it invests in addition to the advisory fee paid by
the Portfolio.
The Fund has received an Order from the Commission, which permits each of its
Portfolios to invest the greater of 5% of its total assets or $2.5 million in
the UAM Funds' DSI Money Market Portfolio for cash management purposes
14
<PAGE>
provided that the investment is consistent with the Portfolio's investment pol-
icies and restrictions. Based upon the Portfolio's assets invested in the DSI
Money Market Portfolio, the investing Portfolio's adviser will waive its in-
vestment advisory fee and any other fees earned as a result of the Portfolio's
investment in the DSI Money Market Portfolio. The investing Portfolio will bear
expenses of the DSI Money Market Portfolio on the same basis as all of its
other shareholders.
PURCHASE OF SHARES
Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the
"Distributor"), without a sales commission at the net asset value per share
next determined after an order is received by the Fund and payment is received
by the Custodian. (See "VALUATION OF SHARES.") The minimum initial investment
required is $2,500. The minimum initial investment for IRA accounts is $1,000.
Certain exceptions may be made by the officers of the Fund.
Shares of the Portfolio may be purchased by customers of brokers-dealers or
other financial intermediaries ("Service Agents") which have established a
shareholder servicing relationship with the Fund on behalf of their customers.
Service Agents may impose additional or different conditions on purchases or
redemptions of Portfolio shares and may charge transaction or other account
fees. Each Service Agent is responsible for transmitting to its customers a
schedule of any such fees and information regarding additional or different
purchase or redemption conditions. Shareholders who are customers of Service
Agents should consult their Service Agent for information regarding these fees
and conditions. Amounts paid to Service Agents may include transaction fees
and/or service fees paid by the Fund from the Fund assets attributable to the
Service Agent, which would not be imposed if shares of the Portfolio were pur-
chased directly from the Fund or the Distributor. Service Agents may provide
shareholder services to their customers that are not available to a shareholder
dealing directly with the Fund. A salesperson and any other person entitled to
receive compensation for selling or servicing Portfolio shares may receive dif-
ferent compensation with respect to one particular class of shares over another
in the Fund.
Service Agents may enter confirmed purchase orders on behalf of their custom-
ers. If shares of a Portfolio are purchased in this manner, the Service Agent
must receive your investment order before the close of trading on the New York
Stock Exchange ("NYSE"), and transmit it to the Fund's Sub-Transfer Agent prior
to 4 p.m. to receive that day's share price. Proper payment for the order must
be received by the Sub-Transfer Agent no later than the time when the Portfolio
is priced on the following business day. Service Agents are responsible to
their customers and the Fund for timely transmission of all subscription and
redemption requests, investment information, documentation and money.
15
<PAGE>
INITIAL INVESTMENTS
BY MAIL
. Complete and sign an Application and mail it together with a check made
payable to UAM Funds to:
UAM Funds Trust
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
Payment for purchases of shares received by mail will be credited to an ac-
count at the next share price calculated for the Portfolio after receipt. Pay-
ment does not need to be converted into Federal Funds (monies credited to the
Fund's Custodian Bank by a Federal Reserve Bank) before the Fund will accept it
for investment.
BY WIRE
. Telephone the UAM Funds Service Center and provide the account name, ad-
dress, telephone number, social security or taxpayer identification num-
ber, Portfolio selected, amount being wired and the name of the bank
wiring the funds. An account number will then be provided to you. Next,
. instruct your bank to wire the specified amount to the Fund's Custodian:
The Chase Manhattan Bank
ABA #021000021
UAM Funds
DDA Acct. #9102772952
Ref: Portfolio Name
Your Account Number
Your Account Name
Wire Control Number
. Forward a completed Application to the Fund at the address shown on the
form. Federal Funds purchases will be accepted only on a day on which
both the NYSE and the Custodian Bank are open for business.
ADDITIONAL INVESTMENTS
Additional investments can be made at any time. The minimum additional in-
vestment is $100. Shares can be purchased at net asset value by mailing a check
made payable to "UAM Funds" to the above address or by wiring money to the Cus-
todian Bank using the instructions outlined above. When making additional in-
vestments, be sure that the account number, account name and the Portfolio to
be purchased are identified on the check or wire. Prior to wiring additional
investments, notify the UAM Funds Service Center by calling the number on the
cover
16
<PAGE>
of this Prospectus. Mail orders should include, when possible, the "Invest by
Mail" stub which accompanies any Fund confirmation statement.
OTHER PURCHASE INFORMATION
Investments received by 4 p.m. ET (the close of the NYSE) will be invested at
the share price calculated after the NYSE closes on that day. Investments re-
ceived after the close of the NYSE will be executed at the price computed on
the next day the NYSE is open. The Fund reserves the right, in its sole discre-
tion, to suspend the offering of shares of the Portfolio or to reject purchase
orders when, in the judgment of management, such suspension or rejection is in
the best interests of the Fund. Purchases of the Portfolio's shares will be
made in full and fractional shares of the Portfolio calculated to three decimal
places. Certificates for fractional shares will not be issued. Certificates for
whole shares will not be issued except at the written request of the sharehold-
er.
IN-KIND PURCHASES
If accepted by the Fund, shares of the Portfolio may be purchased in exchange
for securities which are eligible for acquisition by the Portfolio, as de-
scribed in this Prospectus. Securities to be exchanged which are accepted by
the Fund will be valued as described under "VALUATION OF SHARES" at the next
determination of net asset value after acceptance. Shares issued by the Portfo-
lio in exchange for securities will be issued at net asset value determined as
of the same time. All dividends, interest, subscription, or other rights per-
taining to such securities shall become the property of the Portfolio and must
be delivered to the Fund by the investor upon receipt from the issuer. Securi-
ties acquired through an in-kind purchase will be acquired for investment and
not for immediate resale.
The Fund will not accept securities in exchange for shares of the Portfolio
unless:
. at the time of exchange, such securities are eligible to be included in
the Portfolio (current market quotations must be readily available for
such securities);
. the investor represents and agrees that all securities offered to be ex-
changed are liquid securities and not subject to any restrictions upon
their sale by the Portfolio under the Securities Act of 1933, or other-
wise; and
. the value of any such securities (except U.S. Government securities) be-
ing exchanged together with other securities of the same issuer owned by
the Portfolio will not exceed 5% of the net assets of the Portfolio im-
mediately after the transaction.
Investors who are subject to Federal taxation upon exchange may realize a
gain or loss for Federal income tax purposes depending upon the cost of securi-
ties or local currency exchanged. Investors interested in such exchanges should
contact the Adviser.
17
<PAGE>
REDEMPTION OF SHARES
Shares of the Portfolio may be redeemed by mail or telephone at any time,
without cost, at the net asset value of the Portfolio next determined after re-
ceipt of the redemption request. Any redemption may be more or less than the
purchase price of the shares depending on the market value of investment secu-
rities held by the Portfolio.
BY MAIL
Address requests for redemption to the UAM Funds Service Center. Requests to
redeem shares must include:
. share certificates, if issued;
. a letter of instruction or an assignment specifying the number of shares
or dollar amount to be redeemed, signed by all registered owners of the
shares in the exact names in which they are registered;
. any required signature guarantees (see "SIGNATURE GUARANTEES"); and
. any other necessary legal documents, if required, in the case of es-
tates, trusts, guardianships, custodianships, corporations, pension and
profit sharing plans and other organizations.
BY TELEPHONE
A redemption request by telephone requires the following:
. establish the telephone redemption privilege (and if desired, the wire
redemption privilege) by completing appropriate sections of the Applica-
tion; and
. call the Fund and instruct that the redemption proceeds be mailed to you
or wired to your bank.
The following tasks cannot be accomplished by telephone:
. changing the name of the commercial bank or the account designated to
receive redemption proceeds (this can be accomplished only by a written
request signed by each shareholder, with each signature guaranteed);
. redemption of certificated shares by telephone.
The Fund and its Sub-Transfer Agent will employ reasonable procedures to con-
firm that instructions communicated by telephone are genuine, and they may be
liable for any losses if they fail to do so. These procedures include requiring
the investor to provide certain personal identification at the time an account
is opened, as well as prior to effecting each transaction requested by tele-
phone. In addition, all telephone transaction requests will be recorded and in-
vestors may be required to provide additional telecopied written instructions
of such transaction requests.
18
<PAGE>
The Fund or Sub-Transfer Agent may be liable for any losses due to unauthorized
or fraudulent telephone instructions if the Fund or the Sub-Transfer Agent do
not employ the procedures described above. Neither the Fund nor the Sub-Trans-
fer Agent will be responsible for any loss, liability, cost or expense for fol-
lowing instructions received by telephone that it reasonably believes to be
genuine.
SIGNATURE GUARANTEES
Signature guarantees are required for the following redemptions:
. redemptions where the proceeds are to be sent to someone other than the
registered shareowner(s);
. redemptions where the proceeds are to be sent to someplace other than
the registered address; or
. share transfer requests.
Signature guarantees will be accepted from any eligible guarantor institution
which participates in a signature guarantee program. Eligible guarantor insti-
tutions include banks, brokers, dealers, credit unions, national securities ex-
changes, registered securities associations, clearing agencies and savings as-
sociations. Broker-dealers guaranteeing signatures must be a member of a clear-
ing corporation or maintain net capital of at least $100,000. Credit unions
must be authorized to issue signature guarantees.
OTHER REDEMPTION INFORMATION
Normally, the Fund will make payment for all shares redeemed under proper
procedures within one business day of and no more than seven days after the re-
ceipt of the request, or earlier if required under applicable law. The Fund may
suspend the right of redemption or postpone the date at times when both the
NYSE and Custodian Bank are closed, or under any emergency circumstances deter-
mined by the SEC.
If the Board of Trustees determines that it would be detrimental to the best
interests of remaining shareholders of the Fund to make payment wholly or
partly in cash, the Fund may pay redemption proceeds in whole or in part by a
distribution in-kind of liquid securities held by the Portfolio in lieu of cash
in conformity with applicable rules of the SEC. Investors may incur brokerage
charges on the sale of portfolio securities received in payment of redemptions.
SHAREHOLDER SERVICES
EXCHANGE PRIVILEGE
Institutional Class Shares of the Portfolio may be exchanged for Institu-
tional Class Shares of any other UAM Funds Portfolio. (See the list of Portfo-
lios of the UAM Funds at the end of this Prospectus.) Exchange requests should
be made by contacting the UAM Funds Service Center.
19
<PAGE>
Any exchange will be based on the net asset value of the shares involved.
There is no sales commission or charge of any kind for an exchange. Before mak-
ing an exchange into a Portfolio, a shareholder should read its Prospectus and
consider the investment objectives of the Portfolio to be purchased. Call the
UAM Funds Service Center for a copy of the Prospectus for the Portfolio(s) in
which you are interested. Exchanges can only be made with Portfolios that are
qualified for sale in a shareholder's state of residence.
Exchange requests may be made either by mail or telephone. Telephone ex-
changes will be accepted only if the certificates for the shares to be ex-
changed have not been issued to the shareholder and if the registration of the
two accounts will be identical. Requests for exchanges received prior to 4 p.m.
(ET) will be processed as of the close of business on the same day. Requests
received after 4 p.m. will be processed on the next business day. The Board of
Trustees may limit the frequency and amount of exchanges permitted. For addi-
tional information regarding responsibility for the authenticity of telephoned
instructions, see "REDEMPTION OF SHARES -- BY TELEPHONE". An exchange into an-
other UAM Funds Portfolio is a sale of shares and may result in a gain or loss
for income tax purposes. The Fund may modify or terminate the exchange privi-
lege at any time.
VALUATION OF SHARES
The net asset value of the Portfolio is determined by dividing the value of
the Portfolio's assets attributable to the class, less any liabilities attrib-
utable to the class, by the number of shares outstanding attributable to the
class. The net asset value per share of the Portfolio is determined as of the
close of the NYSE on each day that the NYSE is open for business.
Equity securities listed on a securities exchange for which market quotations
are readily available are valued at the last quoted sale price of the day.
Price information on listed securities is taken from the exchange where the se-
curity is primarily traded. Unlisted equity securities and listed securities
not traded on the valuation date for which market quotations are readily avail-
able are valued neither exceeding the current asked prices nor less than the
current bid prices. Quotations of foreign securities in a foreign currency are
converted to U.S. dollar equivalents. The converted value is based upon the bid
price of the foreign currency against U.S. dollars quoted by any major bank or
by a broker.
Bonds and other fixed income securities are valued according to the broadest
and most representative market, which will ordinarily be the over-the-counter
market. Bonds and other fixed income securities may be valued on the basis of
prices provided by a pricing service when such prices are believed to reflect
the fair market value of such securities.
20
<PAGE>
Securities purchased with remaining maturities of 60 days or less are valued
at amortized cost when the Board of Trustees determines that amortized cost re-
flects fair value in good faith using methods determined by the Board of Trust-
ees.
The value of other assets and securities for which no quotations are readily
available (including restricted securities) is determined in good faith at fair
value using methods determined by the Trustees.
PERFORMANCE CALCULATIONS
The Portfolio measures performance by calculating total return. Total return
figures are based on historical earnings and are not intended to indicate fu-
ture performance.
Total return is the change in value of an investment in the Portfolio over a
given period, assuming reinvestment of any dividends and capital gains. A cumu-
lative or aggregate total return reflects actual performance over a stated pe-
riod of time. An average annual total return is a hypothetical rate of return
that, if achieved annually, would have produced the same cumulative total re-
turn if performance had been constant over the entire period.
Performance will be calculated separately for Institutional Class and Service
Class Shares. Dividends paid by the Portfolio with respect to Institutional
Class and Service Class Shares, to the extent any dividends are paid, will be
calculated in the same manner at the same time on the same day and will be in
the same amount, except that service and distribution fees relating to Service
Class Shares will be borne exclusively by that class.
The Portfolio's performance may be compared to data prepared by independent
services which monitor the performance of investment companies, data reported
in financial and industry publications, and various indices as further de-
scribed in the Portfolio's SAI. This information may also be included in sales
literature and advertising.
The Portfolio's Annual Report to Shareholders for the most recent fiscal year
end contains additional performance information that includes comparisons with
appropriate indices. The Annual Report is available without charge. Contact the
UAM Funds Service Center at the address or telephone number on the cover of
this Prospectus.
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
The Portfolio will normally distribute substantially all of its net invest-
ment income (for tax purposes) to shareholders in dividends in June and Decem-
ber. If any net capital gains are realized, the Portfolio will normally dis-
tribute them in
21
<PAGE>
June, with a supplemental distribution in December of any undistributed capital
gains earned during the 12 month period ended each October. All dividends and
capital gains distributions will be automatically reinvested in additional
shares of the Portfolio unless the Fund is notified in writing that the share-
holder elects to receive the distributions in cash.
FEDERAL TAXES
The Portfolio intends to qualify as a "regulated investment company" under
subchapter M of the Internal Revenue Code of 1986, as amended, for federal in-
come tax purposes and to meet all other requirements that are necessary for it
(but not its shareholders) to be exempt from federal taxes on income and gains
paid to shareholders in the form of dividends. To do this, the Portfolio must,
among other things, distribute substantially all of its ordinary income and net
capital gains on an annual basis and maintain a portfolio of investments which
satisfies certain diversification criteria.
Dividends paid by the Portfolio from net investment income, whether in cash
or reinvested in shares, are taxable to shareholders as ordinary income. Short-
term capital gains will be taxed as ordinary income. Long-term capital gains
distributions are taxed as long-term capital gains. Shareholders will be noti-
fied annually of dividend income earned for tax purposes.
Dividends declared in October, November and December to shareholders of rec-
ord in such a month will be treated as if they had been paid by the Fund and
received by the shareholders on December 31 of the same calendar year, provided
that the dividends are paid before February of the following year.
The Fund is required by Federal law to withhold 31% of reportable payments
paid to shareholders who have not complied with IRS regulations. In order to
avoid this withholding requirement, you must certify that your Social Security
or Taxpayer Identification Number you have provided is correct and that either
you are not currently subject to backup withholding or you are exempt from
backup withholding. This certification must be made on the Application or on a
separate form supplied by the Fund.
Dividends and interest received by the Portfolio may give rise to withholding
and other taxes imposed by foreign countries. These taxes reduce the Portfo-
lio's dividends but are included in the taxable income reported on your tax
statement if the Portfolio qualifies for this tax treatment and elects to pass
it through to you. Consult a tax adviser for more information regarding deduc-
tions and credits for foreign taxes.
22
<PAGE>
INVESTMENT ADVISER
The Board of Trustees of the Trust establishes the Portfolio's policies and
supervises and reviews the management of the Portfolio. First Pacific Advisors,
Inc., located at 11400 West Olympic Blvd., Suite 1200, Los Angeles, CA 90064,
acts as the Portfolio's Adviser; Mr. Steven Romick is responsible for manage-
ment of the Portfolio. Mr. Romick has 12 years of experience in the investment
management business. He is currently a Senior Vice President of the Adviser.
From 1990-1996, Mr. Romick was chairman of Crescent Management, an investment
advisory firm he founded. Crescent Management served as the Portfolio's advisor
until the firm was merged with the current Adviser.
Under an Investment Advisory Agreement dated as of September 30, 1996, the
Adviser provides the Portfolio with advice on buying and selling securities,
manages the investments of the Portfolio, furnishes the Portfolio with office
space and certain administrative services, and provides most of the personnel
needed by the Portfolio. As compensation, the Portfolio pays the Adviser a
monthly management fee (accrued daily) based upon the average daily net assets
of the Portfolio at the rate of 1.00% annually.
The Adviser, together with its predecessors, has been in the investment advi-
sory business since 1954. Presently, the Adviser manages assets of approxi-
mately $3.5 billion for five investment companies, including one closed-end in-
vestment company, and more than 40 institutional accounts. The Adviser is an
indirect wholly-owned subsidiary of UAM, a NYSE-listed holding company princi-
pally engaged, through affiliated firms, in providing institutional investment
management and acquiring institutional investment management firms.
The Portfolio is responsible for its own operating expenses. The Adviser has
agreed to reduce its fees or reimburse the Portfolio for its annual operating
expenses which exceed the most stringent limits prescribed by any state in
which the Portfolio's shares are offered for sale. The Adviser also may reim-
burse additional amounts to the Portfolio at any time in order to reduce the
Portfolio's expenses, or to the extent required by applicable securities laws.
To the extent the Adviser performs a service for which the Portfolio is obli-
gated to pay, the Portfolio shall reimburse the Adviser for its costs incurred
in rendering such service.
The Adviser may compensate its affiliated companies for referring investors
to the Portfolio. The Distributor, UAM, the Adviser, or any of their affili-
ates, may, at their own expense, compensate a Service Agent or other person for
marketing, shareholder servicing, record-keeping and/or other services per-
formed with respect to the Fund, the Portfolio or any Class of Shares of the
Portfolio. The person making such payments may do so out of its revenues, its
profits or any other source available to it. Such services arrangements, when
in effect, are made generally available to all qualified service providers.
23
<PAGE>
The Distributor, the Adviser and certain of their other affiliates also par-
ticipate, at the date of this Prospectus, in an arrangement with Smith Barney
Inc. under which Smith Barney provides certain defined contribution plan mar-
keting and other shareholder services and receives from such entities .15 of 1%
of the daily net asset value of Institutional Class Shares held by Smith
Barney's eligible customer accounts in addition to amounts payable to all sell-
ing dealers. The Fund also compensates Smith Barney for services it provides to
certain defined contribution plan shareholders that are not otherwise provided
by the Administrator.
The Adviser considers a number of factors in determining which brokers or
dealers to use for the Fund's portfolio transactions. While these are more
fully discussed in the SAI, the factors include, but are not limited to, the
reasonableness of commissions, quality of services and execution, and the
availability of research which the Adviser may lawfully and appropriately use
in its investment management and advisory capacities. Provided the Portfolio
receives prompt execution at competitive prices, the Adviser may also consider
the sale of Portfolio shares as a factor in selecting broker-dealers for the
Fund's portfolio transactions.
ADMINISTRATIVE SERVICES
UAM Fund Services, Inc. ("UAMFSI"), a wholly-owned subsidiary of United Asset
Management Corporation, is responsible for performing and overseeing adminis-
trative, fund accounting, dividend disbursing and transfer agent services pro-
vided to the Fund and its Portfolios. UAMFSI's principal office is located at
211 Congress Street, Boston, MA 02110. UAMFSI has subcontracted some of these
services to Chase Global Funds Services Company ("CGFSC"), an affiliate of The
Chase Manhattan Bank, by a Mutual Funds Service Agreement dated April 15, 1996.
CGFSC is located at 73 Tremont Street, Boston, MA 02108.
Each Portfolio pays UAMFSI a two part monthly fee: a Portfolio-specific fee
which is retained by UAMFSI and a sub-administration fee which UAMFSI in turn
pays to CGFSC. The following Portfolio-specific fees are calculated from the
aggregate net assets of each Portfolio:
<TABLE>
<CAPTION>
RATE
----
<S> <C>
FPA Crescent Portfolio............................................... 0.06%
</TABLE>
CGFSC's monthly fee for its services is calculated on an annualized basis as
follows:
0.19 of 1% of the first $200 million of combined Fund assets;
0.11 of 1% of the next $800 million of combined Fund assets;
0.07 of 1% of combined Fund assets in excess of $1 billion but less than
$3 billion;
0.05 of 1% of combined Fund assets in excess of $3 billion.
24
<PAGE>
Fees are allocated among the Portfolios on the basis of their relative assets
and are subject to a graduated minimum fee schedule per Portfolio, which starts
at $2,000 per month and increases to $70,000 annually after two years. If a
separate class of shares is added to a Portfolio, its minimum annual fee in-
creases by $20,000.
DISTRIBUTOR
UAM Fund Distributors, Inc., a wholly-owned subsidiary of United Asset Man-
agement Corporation, with its principal office located at 211 Congress Street,
Boston, MA 02110, distributes shares of the Fund. Under the Distribution Agree-
ment (the "Agreement"), the Distributor, as agent of the Fund, agrees to use
its best efforts as sole distributor of Fund shares. The Distributor does not
receive any fee or other compensation under the Agreement with respect to the
Shares offered in this Prospectus. The Agreement continues in effect as long as
it is approved at least annually by the Fund's Board of Trustees. Those approv-
ing the Agreement must include a majority of Trustees who are neither parties
to the Agreement nor interested persons of any such party. The Agreement pro-
vides that the Fund will bear costs of registration of its shares with the SEC
and various states as well as the printing of its prospectuses, its SAIs and
its reports to shareholders.
PORTFOLIO TRANSACTIONS
The Advisory Agreements for each of the Fund's Portfolios authorize the Ad-
viser to select the brokers or dealers that will execute the purchases and
sales of investment securities for each Portfolio. The Agreements direct the
Adviser to use its best efforts to obtain the best available price and most fa-
vorable execution for all transactions of the Portfolios. If consistent with
the interests of the Portfolios, the Adviser may select brokers on the basis of
research, statistical and pricing services these brokers provide to the Portfo-
lios in addition to required Adviser services. Such brokers may be paid a
higher commission than that which another qualified broker would have charged
for effecting the same transaction, provided that such commissions are paid in
compliance with the Securities Exchange Act of 1934, as amended, and that the
Adviser determines in good faith that the commission is reasonable in terms ei-
ther of the transaction or the overall responsibility of the Adviser to the
Portfolios and the Adviser's other clients. Although not a typical practice,
the Adviser may place portfolio orders with qualified broker-dealers who refer
clients to the Adviser.
If a purchase or sale of securities is consistent with the investment poli-
cies of a Portfolio and one or more other clients served by the Adviser is con-
sidering a purchase at or about the same time, transactions in such securities
will be allocated among the Portfolio and clients in a manner deemed fair and
reasonable by the Adviser. Although there is no specified formula for allocat-
ing such transactions, allocations are subject to periodic review by the Fund's
Trustees.
25
<PAGE>
GENERAL INFORMATION
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Fund was organized as a Delaware business trust on May 18, 1994 under the
name "The Regis Fund II". On October 31, 1995, the name of the Fund was changed
to "UAM Funds Trust." The Fund's Agreement and Declaration of Trust permits the
Fund to issue an unlimited number of shares of beneficial interest, without par
value. The Trustees have the power to designate one or more series ("Portfo-
lios") or classes of shares of beneficial interest without further action by
shareholders.
At its discretion, the Board of Trustees may create additional Portfolios and
classes of shares. The shares of each Portfolio are fully paid and nonassess-
able, and have no preference as to conversion, exchange, dividends, retirement
or other features and no pre-emptive rights. They have noncumulative voting
rights, which means that holders of more than 50% of shares voting for the
election of Trustees can elect 100% of the Trustees. A shareholder is entitled
to one vote for each full share held (and a fractional vote for each fractional
share held), then standing in his name on the books of the Fund.
Both Institutional Class and Institutional Service Class Shares represent an
interest in the same assets of a Portfolio. Service Class Shares bear certain
expenses related to shareholder servicing, and may bear expenses related to
distribution. Service Class shares have exclusive voting rights for matters re-
lating to such distribution expenditures. Information about the Service Class
Shares of the Portfolios is available upon request by contacting the UAM Funds
Service Center.
Annual meetings will not be held except as required by the 1940 Act and other
applicable laws. The Fund has undertaken that its Trustees will call a meeting
of shareholders if such a meeting is requested in writing by the holders of not
less than 10% of the outstanding shares of the Fund. The Fund will assist
shareholder communications in such matters to the extent required by the under-
taking.
CUSTODIAN
The Chase Manhattan Bank serves as custodian of the Fund's assets.
ACCOUNTANTS
Price Waterhouse LLP has been appointed as the independent accountants for
the Fund.
REPORTS
Investors will receive unaudited semi-annual financial statements and annual
financial statements audited by Price Waterhouse LLP.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be made by contacting UAM Fund Services at the tel-
ephone number or address listed on the cover of this Prospectus.
26
<PAGE>
LITIGATION
The Fund is not involved in any litigation.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR IN THE PORTFOLIO'S
STATEMENT OF ADDITIONAL INFORMATION, IN CONNECTION WITH THE OFFERING MADE BY
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR ITS REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFERING BY THE FUND IN ANY JURISDICTION IN WHICH SUCH
OFFERING MAY NOT BE LAWFULLY MADE.
27
<PAGE>
UAM FUNDS -- INSTITUTIONAL CLASS SHARES
Acadian Emerging Markets Portfolio
Acadian International Equity Portfolio
BHM&S Total Return Bond Portfolio
Chicago Asset Management Intermediate Bond Portfolio
Chicago Asset Management Value/Contrarian Portfolio
C&B Balanced Portfolio
C&B Equity Portfolio
C&B Equity Portfolio for Taxable Investors
C&B Mid Cap Equity Portfolio
McKee Domestic Equity Portfolio
McKee International Equity Portfolio
McKee U.S. Government Portfolio
DSI Balanced Portfolio
DSI Disciplined Value Portfolio
DSI Limited Maturity Bond Portfolio
DSI Money Market Portfolio
FMA Small Company Portfolio
FPA Crescent Portfolio
Hanson Equity Portfolio
ICM Equity Portfolio
ICM Fixed Income Portfolio
ICM Small Company Portfolio
IRC Enhanced Index Portfolio
Jacobs International Octagon Portfolio
MJI International Equity Portfolio
Newbold's Equity Portfolio
NWQ Balanced Portfolio
NWQ Value Equity Portfolio
Rice, Hall James Small Cap Portfolio
Rice, Hall James Small/Mid Cap Portfolio
Sirach Equity Portfolio
Sirach Fixed Income Portfolio
Sirach Growth Portfolio
28
<PAGE>
Sirach Short-Term Reserves Portfolio
Sirach Special Equity Portfolio
Sirach Strategic Balanced Portfolio
SAMI Preferred Stock Income Portfolio
Sterling Partners' Balanced Portfolio
Sterling Partners' Equity Portfolio
Sterling Partners' Short-Term Fixed Income Portfolio
Sterling Partners' Small Cap Value Portfolio
TS&W Balanced Portfolio
TS&W Equity Portfolio
TS&W Fixed Income Portfolio
TS&W International Equity Portfolio
29
<PAGE>
UAM FUNDS SERVICE CENTER
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
1-800-638-7983
INVESTMENT ADVISER
First Pacific Advisors, Inc.
11400 West Olympic Boulevard
Suite 1200
Los Angeles, CA 90064
DISTRIBUTOR
UAM FUND DISTRIBUTORS, INC.
211 Congress Street
Boston, MA 02110
PROSPECTUS
JANUARY 3, 1997
<PAGE>
[LOGO OF UAM FUNDS APPEARS HERE]
Hanson Equity Portfolio
Institutional
Class Shares
January 3, 1997
P R O S P E C T U S
<PAGE>
[LOGO OF UAM FUNDS APPEARS HERE]
UAM FUNDS SERVICE CENTER
C/O CHASE GLOBAL FUNDS SERVICES COMPANY
P.O. BOX 2798
BOSTON, MASSACHUSETTS 02208-2798
1-800-638-7983
- -------------------------------------------------------------------------------
HANSON EQUITY PORTFOLIO
INSTITUTIONAL CLASS SHARES
INVESTMENT ADVISER: HANSON INVESTMENT MANAGEMENT COMPANY
- -------------------------------------------------------------------------------
PROSPECTUS -- JANUARY 3, 1997
Hanson Equity Portfolio is one of a series of investment portfolios avail-
able through UAM Funds Trust ("UAM Funds"), an open-end investment company
known as a "mutual fund." Each of the Portfolios that make up the Fund have
different investment objectives and policies. Hanson Equity Portfolio cur-
rently offers only one class of shares. The securities offered in this Pro-
spectus are Institutional Class Shares of one diversified, no-load Portfolio
of the Fund managed by Hanson Investment Management Company.
Hanson Equity Portfolio. The Hanson Equity Portfolio (the "Portfolio") seeks
to achieve maximum long-term total return, consistent with reasonable risk to
principal, by investing in a diversified portfolio of equity securities, pri-
marily the common stock of large, U.S.-based companies with outstanding finan-
cial characteristics and strong growth prospects that can be purchased at rea-
sonable valuations.
There can be no assurance that the Portfolio will achieve its stated objec-
tive.
Keep this Prospectus for future reference. It contains information that you
should know before you invest. A "Statement of Additional Information" (SAI)
containing additional information about the Fund has been filed with the Secu-
rities and Exchange Commission. The SAI is dated January 3, 1997 and has been
incorporated by reference into this Prospectus. For a free copy of the SAI
contact the UAM Funds Service Center at the address or telephone number above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR A STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Fund Expenses.............................................................. 1
Prospectus Summary......................................................... 2
Risk Factors............................................................... 3
Investment Objective....................................................... 3
Investment Policies........................................................ 3
Other Investment Policies.................................................. 4
Investment Limitations..................................................... 8
Purchase of Shares......................................................... 8
Redemption of Shares....................................................... 11
Shareholder Services....................................................... 13
Valuation of Shares........................................................ 14
Performance Calculations................................................... 14
Dividends, Capital Gains Distributions and Taxes........................... 15
Investment Adviser......................................................... 16
Adviser's Historical Performance........................................... 19
Administrative Services.................................................... 20
Distributor................................................................ 21
Portfolio Transactions..................................................... 21
General Information........................................................ 22
UAM Funds -- Institutional Class Shares.................................... 23
</TABLE>
<PAGE>
FUND EXPENSES
The following table illustrates expenses and fees that a shareholder of the
Portfolio's Institutional Class Shares would incur. Transaction fees may be
charged if a broker-dealer or other financial intermediary deals with the Fund
on your behalf. (See "PURCHASE OF SHARES.")
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Sales Load Imposed on Purchases:........................................ NONE
Sales Load Imposed on Reinvested Dividends:............................. NONE
Deferred Sales Load:.................................................... NONE
Redemption Fees:........................................................ NONE
Exchange Fees:.......................................................... NONE
</TABLE>
ESTIMATED ANNUAL FUND OPERATING EXPENSES
<TABLE>
<S> <C>
Investment Advisory Fees:.............................................. 0.70%
Administrative Fees:................................................... 0.24%
12b 1 Fees:............................................................ NONE
Other Expenses:........................................................ 0.38%
----
Total Operating Expenses............................................... 1.32%
====
</TABLE>
The Adviser has voluntarily agreed to waive a portion of its advisory fees
and to assume expenses otherwise payable by the Portfolio to reduce expense
ratios. As of the date of this Prospectus, the Adviser has agreed to keep the
Portfolio's Institutional Class Shares' total annual operating expenses from
exceeding 2.50% of average daily net assets. The Fund will not reimburse the
Adviser for any advisory fees that are waived or Portfolio expenses that the
Adviser may bear on behalf of the Portfolio for a given fiscal year.
The table above shows various fees and expenses an investor would bear di-
rectly or indirectly. The expenses and fees set forth above for the Portfolio
are based on estimates. For purposes of calculating the fees set forth above,
the table assumes that the Portfolio's average daily assets will be $20 mil-
lion.
The following example illustrates expenses a shareholder would pay on a
$1,000 investment over various time periods assuming (1) a 5% annual rate of
return and (2) redemption at the end of each time period. The Portfolio
charges no redemption fees of any kind.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
------ -------
<S> <C> <C>
Expenses:..................................................... $ 13 $ 42
</TABLE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EX-
PENSES OR PERFORMANCE. ACTUAL EXPENSE MAY BE GREATER OR LESSER THAN THOSE
SHOWN ABOVE.
1
<PAGE>
PROSPECTUS SUMMARY
INVESTMENT ADVISER
Hanson Investment Management Company (the "Adviser") is a registered invest-
ment adviser. Founded in 1973, the firm currently has over $1.1 billion in as-
sets under management. The firm is a wholly-owned subsidiary of United Asset
Management Corporation. (See "INVESTMENT ADVISER.")
PURCHASE OF SHARES
Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the
"Distributor"), to investors at net asset value without a sales commission.
Share purchases may be made by sending investments directly to the Fund. The
minimum initial investment is $2,500 The minimum for subsequent investments is
$100. The minimum initial investment for IRA accounts is $500. The minimum
initial investment for spousal IRA accounts is $250. Certain exceptions to the
initial or minimum investment amounts may be made by the officers of the Fund.
(See "PURCHASE OF SHARES.")
DIVIDENDS AND DISTRIBUTIONS
The Portfolio will normally distribute substantially all of its net invest-
ment income in quarterly dividends. The Portfolio will distribute any realized
net capital gains annually. Distributions will be reinvested in Portfolio
shares automatically unless an investor elects to receive cash distributions.
(See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES.")
REDEMPTIONS AND EXCHANGES
Shares of the Portfolio may be redeemed at any time, without cost, at the
net asset value of the Portfolio next determined after receipt of the redemp-
tion request. The redemption price may be more or less than the purchase
price. (See "REDEMPTION OF SHARES.")
ADMINISTRATIVE SERVICES
UAM Fund Services Inc. ("UAMFSI"), a wholly-owned subsidiary of United Asset
Management Corporation, is responsible for performing and overseeing adminis-
tration, fund accounting, dividend disbursing and transfer agency services
provided to the Fund and its Portfolios by third-party service providers. (See
"ADMINISTRATIVE SERVICES.")
2
<PAGE>
RISK FACTORS
The value of the Portfolio's shares will fluctuate in response to changes in
market and economic conditions as well as the financial conditions and pros-
pects of the issuers in which the Portfolio invests. Prospective investors
should consider the following: (1) The Portfolio may invest in repurchase
agreements which entail a risk of loss should the seller default on its trans-
action; (2) The Portfolio may lend its investment securities which entails a
risk of loss should a borrower fail financially; (3) The Portfolio's perfor-
mance may depend on the ability of the Adviser who has substantial experience
as an investment adviser but limited experience as an adviser to a mutual
fund.
INVESTMENT OBJECTIVE
The Portfolio seeks to achieve maximum long-term total return, consistent
with reasonable risk to principal, by investing in a diversified portfolio of
equity securities, primarily the common stock of large, U.S.-based companies
with outstanding financial characteristics and strong growth prospects that
can be purchased at reasonable valuations. There can be no assurance that the
Portfolio will achieve its stated objective.
INVESTMENT POLICIES
In seeking its investment objective, the Portfolio will, under normal cir-
cumstances, invest at least 80% of its total assets in equity securities, pri-
marily the common stock of large capitalization, U.S.-based companies. Large
capitalization companies are defined as those companies with market capital-
izations greater than $1 billion at the time of purchase. Equity securities
include common stock, preferred stock, rights and warrants. The Portfolio may
also invest in short-term investments, convertible preferred stock and con-
vertible bonds.
Under unusual circumstances, when the Adviser believes that market condi-
tions warrant a defensive position, up to 100% of the Portfolio's assets may
be held in cash and short-term investments. (See "SHORT-TERM INVESTMENTS" and
"REPURCHASE AGREEMENTS.") When the Portfolio is in a defensive position, it
may not necessarily be pursuing its stated investment objective.
The basis of the Adviser's investment philosophy is to "buy the company, not
the stock." The Adviser believes that superior long-term results can be
achieved by investing in a select number of well-managed companies that have
clear business plans, specific financial goals, above-average earnings and
dividend growth rates, and whose shares can be purchased at reasonable valua-
tions. The Adviser's stock selection process is a bottom-up approach which
means that it will construct the Portfolio by focusing on individual stocks
rather than industry groups or
3
<PAGE>
sectors. (Top-down investors would first decide which industries or sectors
they want to emphasize and then would look for stocks that fit those require-
ments.) In determining a suitable equity investment, the Adviser evaluates a
prospective company using the following process:
1. The Adviser asks three questions:
.Does the Adviser understand the company's business?
.Is the company's management shareholder-conscious?
.Is the company's long-term outlook favorable?
2. The Adviser subjects the company to a screen designed to select compa-
nies with the following characteristics:
.reasonable price-to-earnings ratio
.above-average total return potential
.leader in its industry
.highly profitable
.financially strong
3. Finally, the potential investment is put through an intensive review
by the Investment Committee before it is added to the Portfolio.
The Adviser sells equity investments when: (a) the company fails to meet the
Adviser's investment criteria; (b) a more attractive investment is found; or
(c) the company's share price rises to a level that cannot be justified.
OTHER INVESTMENT POLICIES
Under normal circumstances, the Portfolio may invest up to 20% of its as-
sets, unless restricted by additional limitations described below or in the
Portfolio's SAI, in the following securities or investment techniques:
SHORT-TERM INVESTMENTS
In order to earn a return on uninvested assets, meet anticipated redemp-
tions, or for temporary defensive purposes, the Portfolio may invest a portion
of its assets in domestic and foreign money market instruments including cer-
tificates of deposit, bankers' acceptances, time deposits, U.S. Government ob-
ligations, U.S. Government agency securities, short-term corporate debt secu-
rities, and commercial paper rated A-1 or A-2 by Standard & Poor's Corporation
or Prime-1 or Prime-2 by Moody's Investors Service, Inc. or if unrated, deter-
mined by the Adviser to be of comparable quality.
Time deposits maturing in more than seven days will not be purchased by the
Portfolio, and time deposits maturing from two business days through seven
calendar days will not exceed 10% of the total assets of the Portfolio. The
Portfolio will not invest in any security issued by a commercial bank unless
(i) the bank has total
4
<PAGE>
assets of at least $1 billion, or the equivalent in other currencies, (ii) in
the case of U.S. banks, it is a member of the Federal Deposit Insurance Corpo-
ration, and (iii) in the case of foreign branches of U.S. banks, the security
is, in the opinion of the Adviser, of an investment quality comparable with
other debt securities which may be purchased by the Portfolio.
The Fund has received permission from the Securities and Exchange Commission
(the "SEC") to deposit the daily uninvested cash balances of the Fund's Portfo-
lios, as well as cash for investment purposes, into one or more joint accounts
and to invest the daily balance of the joint accounts in the following short-
term investments: fully collateralized repurchase agreements, interest-bearing
or discounted commercial paper including dollar-denominated commercial paper of
foreign issuers, and any other short-term money market instruments including
variable rate demand notes and tax-exempt money instruments. By entering into
these investments on a joint basis, it is expected that a Portfolio may earn a
higher rate of return on investments relative to what it could earn individual-
ly.
The Fund has received permission from the SEC for each of its Portfolios to
invest, for cash management purposes, the greater of 5% of its total assets or
$2.5 million in the Fund's DSI Money Market Portfolio. (See "INVESTMENT
COMPANIES.")
REPURCHASE AGREEMENTS
The Portfolio may invest in repurchase agreements collateralized by U.S. Gov-
ernment securities, certificates of deposit, and certain bankers' acceptances
and other securities outlined above under "SHORT-TERM INVESTMENTS." In a repur-
chase agreement, the Portfolio buys a security and simultaneously commits to
sell that security back at an agreed upon price plus an agreed upon market rate
of interest. Under a repurchase agreement, the seller is required to maintain
the value of securities subject to the agreement at not less than 100% of the
repurchase price. The Administrator and the Adviser will mark to market daily
the value of the securities purchased. The use of repurchase agreements in-
volves certain risks. For example, a default by the seller of the agreement may
cause the Portfolio to experience a loss or delay in the liquidation of the
collateral securing the repurchase agreement. The Portfolio might also incur
disposition costs in liquidating the collateral. While the Fund's management
acknowledges these risks, it is expected that they can be controlled through
stringent security selection criteria and careful monitoring procedures. The
Fund has received permission from the SEC to pool daily uninvested cash bal-
ances of the Fund's Portfolios in order to invest in repurchase agreements on a
joint basis. By entering into joint repurchase agreements, the Portfolio may
incur lower transactions costs and earn higher rates of interest on joint re-
purchase agreements. The Portfolio's contribution would determine its return
from a joint repurchase agreement. (See "SHORT TERM INVESTMENTS.")
5
<PAGE>
LENDING OF SECURITIES
The Portfolio may lend its investment securities to qualified institutional
investors as a means of earning income. The Portfolio will not loan securities
to the extent that greater than one-third of its assets at fair market value
would be committed to loans. During the term of a loan, the Portfolio is sub-
ject to a gain or loss depending on any increase or decrease in the market
price of the securities loaned. Lending of securities is subject to review by
the Fund's Board of Trustees. All relevant facts and circumstances, including
the creditworthiness of the broker, dealer or institution, will be considered
in making decisions about securities lending.
An investment company may pay reasonable negotiated fees in connection with
loaned securities so long as such fees are set forth in a written contract and
approved by its Board of Trustees. The Portfolios will continue to retain any
voting rights with respect to loaned securities. If a material event occurs af-
fecting an investment on loan, the loan must be called and the securities vot-
ed.
WHEN-ISSUED, FORWARD DELIVERY AND DELAYED SETTLEMENT SECURITIES
The Portfolio may purchase and sell securities on a "when-issued," "delayed
settlement," or "forward delivery" basis. "When-issued" or "forward delivery"
refers to securities whose terms and indenture are available, and for which a
market exists, but which are not available for immediate delivery. When-issued
and forward delivery transactions may be expected to occur a month or more be-
fore delivery is due. Delayed settlement is a term used to describe settlement
of a securities transaction in the secondary market which will occur sometime
in the future. No payment or delivery is made by the Portfolio until it re-
ceives payment or delivery from the other party to any of the above transac-
tions. It is possible that the market price of the securities at the time of
delivery may be higher or lower than the purchase price. The Portfolio will
maintain a separate account of cash or liquid securities at least equal to the
value of purchase commitments until payment is made. Typically, no income ac-
crues on securities purchased on a delayed delivery basis prior to the time de-
livery is made although the Portfolio may earn income on securities it has de-
posited in a segregated account.
The Portfolio may engage in these types of purchases in order to buy securi-
ties that fit with its investment objectives at attractive prices -- not to in-
crease its investment leverage.
PORTFOLIO TURNOVER
Portfolio turnover is not anticipated to exceed 60%. In addition to Portfolio
trading costs, higher rates of portfolio turnover may result in the realization
of capital gains. (See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES" for
more information on taxation). The Portfolio will not normally engage in short-
term trading, but reserves the right to do so.
6
<PAGE>
INVESTMENT COMPANIES
The Portfolio reserves the right to invest up to 10% of its total assets,
calculated at the time of investment, in the securities of other open-end or
closed-end investment companies. No more than 5% of the investing Portfolio's
total assets may be invested in the securities of any one investment company
nor may it acquire more than 3% of the voting securities of any other invest-
ment company. The Portfolio will indirectly bear its proportionate share of any
management fees paid by an investment company in which it invests in addition
to the advisory fee paid by the Portfolio.
The Fund has received permission from the SEC to allow each of its Portfolios
to invest, for cash management purposes, the greater of 5% of its total assets
or $2.5 million in the Fund's DSI Money Market Portfolio provided that the in-
vestment is consistent with the Portfolio's investment policies and restric-
tions. Based upon the Portfolio's assets invested in the DSI Money Market Port-
folio, the investing Portfolio's adviser will waive its investment advisory fee
and any other fees earned as a result of the Portfolio's investment in the DSI
Money Market Portfolio. The investing Portfolio will bear expenses of the DSI
Money Market Portfolio on the same basis as all of its other shareholders.
RESTRICTED SECURITIES
The Portfolio may purchase restricted securities that are not registered for
sale to the general public but which are eligible for resale to qualified in-
stitutional investors under Rule 144A of the Securities Act of 1933. Under the
supervision of the Fund's Board of Trustees, the Adviser determines the liquid-
ity of such investments by considering all relevant factors. Provided that a
dealer or institutional trading market in such securities exists, these re-
stricted securities are not treated as illiquid securities for purposes of a
Portfolio's investment limitations. The Portfolio may also invest up to 15% of
its net assets in illiquid securities. Prices realized from sales of these se-
curities could be more or less than those originally paid by the Portfolio or
less than what may be considered the fair value of such securities.
AMERICAN DEPOSITARY RECEIPTS
The Portfolio intends to invest primarily in U.S.-based companies. In addi-
tion, the Portfolio may purchase shares of foreign based companies in the form
of American Depositary Receipts (ADRs). ADRs may be sponsored or unsponsored.
Sponsored ADRs are established jointly by a depositary and the underlying issu-
er, whereas unsponsored ADR's may be established without participation by the
underlying issuer. Holders of an unsponsored ADR generally bear all the costs
associated with establishing the unsponsored ADR. The depositary of an
unsponsored ADR is under no obligation to distribute shareholder communications
received from the underlying issuer or to pass through to the holders of the
unsponsored ADR voting rights with respect to the deposited securities or pool
of securities. (See "Foreign Securities" in the SAI.)
7
<PAGE>
INVESTMENT LIMITATIONS
The Portfolio will not:
(a) with respect to 75% of its assets, invest more than 5% of its total
assets at the time of purchase in the securities of any single issuer
(other than obligations issued or guaranteed as to principal and in-
terest by the U.S. Government or any of its agencies or instrumentali-
ties);
(b) with respect to 75% of its assets, purchase more than 10% of any class
of the outstanding voting securities of any issuer;
(c) invest more than 5% of its assets at the time of purchase in the secu-
rities of companies that have (with predecessors) a continuous operat-
ing history of less than 3 years;
(d) invest more than 25% of its assets in companies within a single indus-
try; however, there are no limitations on investments made in instru-
ments issued or guaranteed by the U.S. Government and its agencies;
(e) make loans except by purchasing debt securities in accordance with its
investment objective and policies or entering into repurchase agree-
ments or by lending its portfolio securities to banks, brokers, deal-
ers and other financial institutions so long as the loans are made in
compliance with the 1940 Act, as amended, or the Rules and Regulations
or interpretations of the SEC;
(f) (i) borrow, except from banks and as a temporary measure for extraor-
dinary or emergency purposes and then, in no event, in excess of 33
1/3% of the Portfolio's gross assets valued at the lower of market or
cost, and (ii) the Portfolio may not purchase additional securities
when borrowings exceed 5% of total assets; or
(g) pledge, mortgage or hypothecate any of its assets to an extent greater
than 33 1/3% of its total assets at fair market value.
The Portfolio's investment objective and investment limitations (a), (b),
(d), (e) and (i) listed above are fundamental policies and may be changed only
with the approval of the holders of a majority of the outstanding voting secu-
rities of the Portfolio. The other investment limitations described here and
those not specified as fundamental in the SAI as well as the Portfolio's in-
vestment policies are not fundamental and the Fund's Board of Trustees may
change them without shareholder approval.
PURCHASE OF SHARES
Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the
"Distributor"), without a sales commission at the net asset value per share
next determined after an order is received by the Fund and payment is received
by the Custodian. (See "VALUATION OF SHARES.") The minimum initial investment
required is $2,500. The minimum initial investment for IRA accounts is $500.
The minimum initial investment for spousal IRA accounts is $250. Certain excep-
tions may be made by the officers of the Fund.
8
<PAGE>
Shares of the Portfolio may be purchased by customers of brokers-dealers or
other financial intermediaries ("Service Agents") which have established a
shareholder servicing relationship with the Fund on behalf of their customers.
Service Agents may impose additional or different conditions on purchases or
redemptions of Portfolio shares and may charge transaction or other account
fees. Each Service Agent is responsible for transmitting to its customers a
schedule of any such fees and information regarding additional or different
purchase or redemption conditions. Shareholders who are customers of Service
Agents should consult their Service Agent for information regarding these fees
and conditions. Amounts paid to Service Agents may include transaction fees
and/or service fees paid by the Fund from the Fund assets attributable to the
Service Agent, which would not be imposed if shares of the Portfolio were pur-
chased directly from the Fund or the Distributor. Service Agents may provide
shareholder services to their customers that are not available to a share-
holder dealing directly with the Fund. A salesperson and any other person en-
titled to receive compensation for selling or servicing Portfolio shares may
receive different compensation with respect to one particular class of shares
over another in the Fund.
Service Agents may enter confirmed purchase orders on behalf of their cus-
tomers. If shares of a Portfolio are purchased in this manner, the Service
Agent must receive your investment order before the close of trading on the
New York Stock Exchange ("NYSE"), and transmit it to the Fund's Sub-Transfer
Agent prior to 4 p.m. receive that day's share price. Proper payment for the
order must be received by the Sub-Transfer Agent no later than the time when
the Portfolio is priced on the following business day. Service Agents are re-
sponsible to their customers and the Fund for timely transmission of all sub-
scription and redemption requests, investment information, documentation and
money.
INITIAL INVESTMENTS
BY MAIL
. Complete and sign an Application and mail it together with a check made
payable to UAM Funds to:
UAM Funds Trust
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
Payment for purchases of shares received by mail will be credited to an ac-
count at the next share price calculated for the Portfolio after receipt. Pay-
ment does not need to be converted into Federal Funds (monies credited to the
Fund's Custodian Bank by a Federal Reserve Bank) before the Fund will accept
it for investment.
9
<PAGE>
BY WIRE
. Telephone the UAM Funds Service Center and provide the account name, ad-
dress, telephone number, social security or taxpayer identification num-
ber, Portfolio selected, amount being wired and the name of the bank
wiring the funds. An account number will then be provided to you. Next,
. instruct your bank to wire the specified amount to the Fund's Custodian:
The Chase Manhattan Bank
ABA #021000021
UAM Funds
DDA Acct. #9102772952
Ref: Portfolio Name
Your Account Number
Your Account Name
Wire Control Number
. Forward a completed Application to the Fund at the address shown on the
form. Federal Funds purchases will be accepted only on a day on which
both the NYSE and the Custodian Bank are open for business.
ADDITIONAL INVESTMENTS
Additional investments can be made at any time. The minimum additional in-
vestment is $100. Shares can be purchased at net asset value by mailing a
check made payable to "UAM Funds" to the above address or by wiring money to
the Custodian Bank using the instructions outlined above. When making addi-
tional investments, be sure that the account number, account name and the
Portfolio to be purchased are identified on the check or wire. Prior to wiring
additional investments, notify the UAM Funds Service Center by calling the
number on the cover of this Prospectus. Mail orders should include, when pos-
sible, the "Invest by Mail" stub which accompanies any Fund confirmation
statement.
OTHER PURCHASE INFORMATION
Investments received by 4 p.m. ET (the close of the NYSE) will be invested
at the share price calculated after the NYSE closes on that day. Investments
received after the close of the NYSE will be executed at the price computed on
the next day the NYSE is open. The Fund reserves the right, in its sole dis-
cretion, to suspend the offering of shares of the Portfolio or to reject pur-
chase orders when, in the judgment of management, such suspension or rejection
is in the best interests of the Fund. Purchases of the Portfolio's shares will
be made in full and fractional shares of the Portfolio calculated to three
decimal places. Certificates for fractional shares will not be issued. Certif-
icates for whole shares will not be issued except at the written request of
the shareholder.
10
<PAGE>
IN-KIND PURCHASES
If accepted by the Fund, shares of the Portfolio may be purchased in ex-
change for securities which are eligible for acquisition by the Portfolio, as
described in this Prospectus. Securities to be exchanged which are accepted by
the Fund will be valued as described under "VALUATION OF SHARES" at the next
determination of net asset value after acceptance. Shares issued by the Port-
folio in exchange for securities will be issued at net asset value determined
as of the same time. All dividends, interest, subscription, or other rights
pertaining to such securities shall become the property of the Portfolio and
must be delivered to the Fund by the investor upon receipt from the issuer.
Securities acquired through an in-kind purchase will be acquired for invest-
ment and not for immediate resale.
The Fund will not accept securities in exchange for shares of the Portfolio
unless:
. at the time of exchange, such securities are eligible to be in-
cluded in the Portfolio (current market quotations must be readily
available for such securities);
. the investor represents and agrees that all securities offered to
be exchanged are liquid securities and not subject to any restric-
tions upon their sale by the Portfolio under the Securities Act of
1933, or otherwise; and
. the value of any such securities (except U.S. Government securi-
ties) being exchanged together with other securities of the same
issuer owned by the Portfolio will not exceed 5% of the net assets
of the Portfolio immediately after the transaction.
Investors who are subject to Federal taxation upon exchange may realize a
gain or loss for Federal income tax purposes depending upon the cost of secu-
rities or local currency exchanged. Investors interested in such exchanges
should contact the Adviser.
REDEMPTION OF SHARES
Shares of the Portfolio may be redeemed by mail or telephone at any time,
without cost, at the net asset value of the Portfolio next determined after
receipt of the redemption request. No charge is made for redemptions. Any re-
demption may be more or less than the purchase price of the shares depending
on the market value of investment securities held by the Portfolio.
BY MAIL
Address requests for redemption to the UAM Funds Service Center. Requests to
redeem shares must include:
. share certificates, if issued;
. a letter of instruction or an assignment specifying the number of
shares or dollar amount to be redeemed, signed by all registered
owners of the shares in the exact names in which they are regis-
tered;
11
<PAGE>
. any required signature guarantees (see "SIGNATURE GUARANTEES"); and
. any other necessary legal documents, if required, in the case of
estates, trusts, guardianships, custodianships, corporations, pen-
sion and profit sharing plans and other organizations.
BY TELEPHONE
A redemption request by telephone requires the following:
. establish the telephone redemption privilege (and if desired, the
wire redemption privilege) by completing appropriate sections of
the Application; and
. call the Fund and instruct that the redemption proceeds be mailed
to you or wired to your bank.
The following tasks cannot be accomplished by telephone:
. changing the name of the commercial bank or the account designated
to receive redemption proceeds (this can be accomplished only by a
written request signed by each shareholder, with each signature
guaranteed);
. redemption of certificated shares by telephone.
The Fund and its Sub-Transfer Agent will employ reasonable procedures to
confirm that instructions communicated by telephone are genuine, and they may
be liable for any losses if they fail to do so. These procedures include re-
quiring the investor to provide certain personal identification at the time an
account is opened, as well as prior to effecting each transaction requested by
telephone. In addition, all telephone transaction requests will be recorded
and investors may be required to provide additional telecopied written in-
structions of such transaction requests. The Fund or Sub-Transfer Agent may be
liable for any losses due to unauthorized or fraudulent telephone instructions
if the Fund or the Sub-Transfer Agent do not employ the procedures described
above. Neither the Fund nor the Sub-Transfer Agent will be responsible for any
loss, liability, cost or expense for following instructions received by tele-
phone that it reasonably believes to be genuine.
SIGNATURE GUARANTEES
Signature guarantees are required for the following redemptions:
. redemptions where the proceeds are to be sent to someone other than
the registered shareowner(s);
. redemptions where the proceeds are to be sent to someplace other
than the registered address; or
. share transfer requests.
12
<PAGE>
Signature guarantees will be accepted from any eligible guarantor institu-
tion which participates in a signature guarantee program. Eligible guarantor
institutions include banks, brokers, dealers, credit unions, national securi-
ties exchanges, registered securities associations, clearing agencies and sav-
ings associations. Broker-dealers guaranteeing signatures must be a member of
a clearing corporation or maintain net capital of at least $100,000. Credit
unions must be authorized to issue signature guarantees.
OTHER REDEMPTION INFORMATION
Normally, the Fund will make payment for all shares redeemed under proper
procedures within one business day of and no more than seven days after the
receipt of the request, or earlier if required under applicable law. The Fund
may suspend the right of redemption or postpone the date at times when both
the NYSE and Custodian Bank are closed, or under any emergency circumstances
determined by the SEC.
If the Board of Trustees determines that it would be detrimental to the best
interests of remaining shareholders of the Fund to make payment wholly or
partly in cash, the Fund may pay redemption proceeds in whole or in part by a
distribution in-kind of liquid securities held by the Portfolio in lieu of
cash in conformity with applicable rules of the SEC. Investors may incur bro-
kerage charges on the sale of portfolio securities received in payment of re-
demptions.
SHAREHOLDER SERVICES
EXCHANGE PRIVILEGE
Institutional Class Shares of the Portfolio may be exchanged for Institu-
tional Class Shares of any other UAM Funds Portfolio. (See the list of Portfo-
lios of the UAM Funds at the end of this Prospectus.) Exchange requests should
be made by contacting the UAM Funds Service Center.
Any exchange will be based on the net asset value of the shares involved.
There is no sales commission or charge of any kind for an exchange. Before
making an exchange into a Portfolio, a shareholder should read its Prospectus
and consider the investment objectives of the Portfolio to be purchased. Call
the UAM Funds Service Center for a copy of the Prospectus for the Portfolio(s)
in which you are interested. Exchanges can only be made with Portfolios that
are qualified for sale in a shareholder's state of residence.
Exchange requests may be made either by mail or telephone. Telephone ex-
changes will be accepted only if the certificates for the shares to be ex-
changed have not been issued to the shareholder and if the registration of the
two accounts will be identical. Requests for exchanges received prior to 4
p.m. (ET) will be processed as of the close of business on the same day. Re-
quests received after 4 p.m. will be
13
<PAGE>
processed on the next business day. The Board of Trustees may limit the fre-
quency and amount of exchanges permitted. For additional information regarding
responsibility for the authenticity of telephoned instructions, see "REDEMP-
TION OF SHARES -- BY TELEPHONE". An exchange into another UAM Funds Portfolio
is a sale of shares and may result in a gain or loss for income tax purposes.
The Fund may modify or terminate the exchange privilege at any time.
VALUATION OF SHARES
The net asset value of the Portfolio is determined by dividing the value of
the Portfolio's assets, less any liabilities, by the number of shares out-
standing. The net asset value per share of the Portfolio is determined as of
the close of the NYSE on each day that the NYSE is open for business.
Equity securities listed on a securities exchange for which market quota-
tions are readily available are valued at the last quoted sale price of the
day. Price information on listed securities is taken from the exchange where
the security is primarily traded. Unlisted equity securities and listed secu-
rities not traded on the valuation date for which market quotations are read-
ily available are valued neither exceeding the current asked prices nor less
than the current bid prices. Quotations of foreign securities in a foreign
currency are converted to U.S. dollar equivalents. The converted value is
based upon the bid price of the foreign currency against U.S. dollars quoted
by any major bank or by a broker.
The value of other assets and securities for which no quotations are readily
available (including restricted securities) is determined in good faith at
fair value using methods determined by the Trustees.
PERFORMANCE CALCULATIONS
The Portfolio measures performance by calculating total return. Total return
figures are based on historical earnings and are not intended to indicate fu-
ture performance.
Total return is the change in value of an investment in the Portfolio over a
given period, assuming reinvestment of any dividends and capital gains. A cu-
mulative or aggregate total return reflects actual performance over a stated
period of time. An average annual total return is a hypothetical rate of re-
turn that, if achieved annually, would have produced the same cumulative total
return if performance had been constant over the entire period.
The Portfolio's performance may be compared to data prepared by independent
services which monitor the performance of investment companies, data reported
in financial and industry publications, and various indices as further de-
scribed in the Portfolio's SAI. This information may also be included in sales
literature and advertising.
14
<PAGE>
The Portfolio's Annual Report to Shareholders for the most recent fiscal
year end will contain additional performance information that includes compar-
isons with appropriate indices. The Annual Report will be available without
charge. Contact the UAM Funds Service Center at the address or telephone num-
ber on the cover of this Prospectus.
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
The Portfolio will normally distribute substantially all of its net invest-
ment income (for tax purposes) to shareholders in quarterly dividends. If any
net capital gains are realized, each Portfolio will normally distribute them
annually. All dividends and capital gains distributions will be automatically
reinvested in additional shares of the Portfolio unless the Fund is notified
in writing that the shareholder elects to receive the distributions in cash.
FEDERAL TAXES
The Portfolio intends to qualify as a "regulated investment company" under
subchapter M of the Internal Revenue Code of 1986, as amended, for federal in-
come tax purposes and to meet all other requirements that are necessary for it
(but not its shareholders) to be exempt from federal taxes on income and gains
paid to shareholders in the form of dividends. To do this, the Portfolio must,
among other things, distribute substantially all of its ordinary income and
net capital gains on an annual basis and maintain a portfolio of investments
which satisfies certain diversification criteria.
Dividends paid by the Portfolio from net investment income, whether in cash
or reinvested in shares, are taxable to shareholders as ordinary income.
Short-term capital gains will be taxed as ordinary income. Long-term capital
gains distributions are taxed as long-term capital gains. Shareholders will be
notified annually of dividend income earned for tax purposes.
Dividends declared in October, November and December to shareholders of rec-
ord in such a month will be treated as if they had been paid by the Fund and
received by the shareholders on December 31 of the same calendar year, pro-
vided that the dividends are paid before February of the following year.
The Fund is required by Federal law to withhold 31% of reportable payments
paid to shareholders who have not complied with IRS regulations. In order to
avoid this withholding requirement, you must certify that your Social Security
or Taxpayer Identification Number you have provided is correct and that either
you are not currently subject to backup withholding or you are exempt from
backup withholding. This certification must be made on the Application or on a
separate form supplied by the Fund.
15
<PAGE>
Dividends and interest received by the Portfolio may give rise to withhold-
ing and other taxes imposed by foreign countries. These taxes reduce the Port-
folio's dividends but are included in the taxable income reported on your tax
statement if the Portfolio qualifies for this tax treatment and elects to pass
it through to you. Consult a tax adviser for more information regarding deduc-
tions and credits for foreign taxes.
INVESTMENT ADVISER
Hanson Investment Management Company (the "Adviser") is a registered invest-
ment adviser formed in 1973. Its business offices are located at 4000 Civic
Center Drive, Suite 200, San Rafael, CA 94903. The Adviser is a wholly-owned
subsidiary of United Asset Management Corporation ("UAM") and provides and of-
fers investment management and advisory services to corporations, unions, pen-
sions and profit-sharing plans, trusts, estates and other institutions and in-
vestors. The Adviser currently has over $1.1 billion in assets under manage-
ment.
The Portfolio pays an annual fee in monthly installments to the Adviser for
advisory services. This fee is accrued daily and paid every month as a per-
centage of the average net assets in the Portfolio for that month. The per-
centage fee on an annual basis is 0.70%.
The Adviser may compensate its affiliated companies for referring investors
to the Portfolio. The Distributor, UAM, the Adviser, or any of their affili-
ates, may, at its own expense, compensate a Service Agent or other person for
marketing, shareholder servicing, record-keeping and/or other services per-
formed with respect to the Fund, a Portfolio or any Class of Shares. Payments
made for any of these purposes may be made from its revenues, its profits or
any other source available to it. When such service arrangements are in ef-
fect, they are made generally available to all qualified service providers.
The Distributor, the Adviser and certain of their other affiliates also par-
ticipate, at the date of this Prospectus, in an arrangement with Smith Barney
Inc. under which Smith Barney provides certain defined contribution plan mar-
keting and other shareholder services and receives from such entities .15 of
1% of the daily net asset value of Institutional Class Shares held by Smith
Barney's eligible customer accounts in addition to amounts payable to all
selling dealers. The Fund also compensates Smith Barney for services it pro-
vides to certain defined contribution plan shareholders that are not otherwise
provided by the Administrator.
The investment professionals at the Adviser who comprise the Investment Com-
mittee and who are responsible for the day-to-day management of the Portfolio
and their qualifications are as follows:
16
<PAGE>
CHARLES H. RAVEN, PRINCIPAL, PRESIDENT AND CHIEF INVESTMENT OFFICER. Charles
H. Raven joined Hanson Investment Management Company in 1983 as a principal of
the firm. Prior to joining the firm, Mr. Raven was a senior portfolio manager
for McCullough & Andrews and before that was Vice President, Investments at
Lionel D. Edie & Company where he worked for fourteen years. Previously, he
worked in commercial banking with Bank of America. He received a BA from Stan-
ford University and an MBA from Harvard Business School.
ANTHONY P. WILSON, PRINCIPAL, DIRECTOR OF MARKETING & CLIENT
SERVICE. Anthony P. Wilson joined Hanson Investment Management in 1995 as a
principal of the firm. Over the past 25 years Mr. Wilson has held several se-
nior management positions. Most recently he was Chief Financial Officer for
The Lawrenceville School managing their Endowment Fund. Mr. Wilson also served
as the senior US representative for J.P. Morgan's $11 billion international
securities management division, and as Vice President and Managing Director in
the Asset Management Group at A.G. Becker Paribas. Mr. Wilson received a BA
from the University of Colorado and a MA from Northwestern University.
DAVID E. POST, PRINCIPAL, PORTFOLIO MANAGER. David E. Post joined Hanson
Investment Management Company in 1994 as a portfolio manager. In 1983, Mr.
Post founded CSI Capital Management, where he directed the investment of all
managed assets. Previously, he served as president of HS Partners, Inc. He be-
gan his career at Merrill Lynch, Pierce, Fenner & Smith. Mr. Post received a
BA from the University of California, Berkeley.
STEVEN E. CUTCLIFFE, PRINCIPAL, PORTFOLIO MANAGER. Steven E. Cutcliffe
joined Hanson Investment Management Company in 1991 as an assistant portfolio
manager. In 1993, he was promoted to portfolio manager. Previously, Mr.
Cutcliffe was Vice President, Corporate Finance for McGinn, Smith & Company
and before that worked for Manufacturers Hanover Trust Company. He received an
AB from Dartmouth College and an MBA from Amos Tuck School.
EDWARD J. LORAIN, DIRECTOR OF RESEARCH. Edward J. Lorain joined Hanson In-
vestment Management Company in 1984 as an equity research analyst. Mr. Lorain
has consistently served the research needs of the firm and, in 1995, was pro-
moted to Director of Research. Prior to joining Hanson, Mr. Lorain was a fi-
nancial consultant for Dean Witter Reynolds, Inc. He received a BS from the
University of California, Davis.
LISA M. COLLINS, VICE PRESIDENT, TRADING. Lisa M. Collins joined Hanson In-
vestment Management Company in 1986 as a portfolio administrator. She worked
as a portfolio administrator and office manager prior to taking over the trad-
ing area in 1987. In 1993, Ms. Collins was named Vice President and continues
to manage trading for the firm. Before joining Hanson Investment Management
Company, she worked as a research assistant at Paine Webber, Inc. Previously,
Ms.
17
<PAGE>
Collins worked as a portfolio administrator at Alliance Capital Management Co.
and, before that, with Birr Wilson & Co. She received a BA from California
Polytechnic University.
STEPHEN F. ROSENTHAL, CFA, RESEARCH ANALYST. Stephen F. Rosenthal joined
Hanson Investment Management Company in 1995 as a research analyst. Prior to
joining Hanson, Mr. Rosenthal also was a Captain in the Marine Corps from 1983
to 1990, where he piloted Marine Attack Helicopters as a Naval Aviator. He re-
ceived a BS from the University of Santa Clara and an MBA from the University
of Southern California.
18
<PAGE>
ADVISER'S HISTORICAL PERFORMANCE
Below are certain performance data provided by the Adviser pertaining to the
composite of separately managed accounts of the Adviser that are managed with
substantially similar (although not necessarily identical) objectives, poli-
cies and strategies as those of the Portfolio. The investment returns of the
Portfolio may differ from those of the separately managed accounts because
such separately managed accounts may have fees and expenses that differ from
those of the Portfolio. Further, the separately managed accounts are not sub-
ject to investment limitations, diversification requirements, and other re-
strictions imposed by the 1940 Act and the Internal Revenue Code; such condi-
tions, if applicable, may have lowered the returns for the separately managed
accounts. The results presented are not intended to predict or suggest the re-
turn to be experienced by the Portfolio or the return an investor might
achieve by investing in the Portfolio.
HANSON INVESTMENT MANAGEMENT COMPANY COMPOSITE RETURNS
FOR INDIVIDUAL YEARS ENDED DECEMBER 31
(PERCENTAGE RETURNS NET OF MANAGEMENT FEES)
<TABLE>
<CAPTION>
S&P 500
STOCK
CALENDAR YEARS ADVISER INDEX
-------------- --------- ---------
<S> <C> <C>
1979................................................... 17.8 % 18.6 %
1980................................................... 24.8 % 32.4 %
1981................................................... 11.4 % (5.3)%
1982................................................... 26.8 % 21.4 %
1983................................................... 26.9 % 22.6 %
1984................................................... 7.7 % 6.3 %
1985................................................... 33.0 % 31.7 %
1986................................................... 18.8 % 18.7 %
1987................................................... (1.0)% 5.3 %
1988................................................... 24.1 % 16.6 %
1989................................................... 28.5 % 31.7 %
1990................................................... 0.3 % (3.1)%
1991................................................... 33.8 % 30.4 %
1992................................................... 9.0 % 7.7 %
1993................................................... 1.6 % 10.1 %
1994................................................... (4.5)% 1.2 %
1995................................................... 34.0 % 37.8 %
9 Months ended 9/30/96................................. 18.0 % 13.4 %
Annualized............................................. 16.9 % 16.1 %
Cumulative............................................. 1,488.4 % 1,308.8 %
Seventeen-Year Mean (1/1/79-12/31/95).................. 17.2 % 16.7 %
Value of $1 invested during (1/1/79-9/30/96)........... $15.88 $14.09
</TABLE>
19
<PAGE>
Notes:
1. The ANNUALIZED RETURN is calculated from monthly data, allowing for
compounding. The formula used is in accordance with the acceptable
methods set forth by the Association for Investment Management Re-
search, the Bank Administration Institute, and the Investment Counsel
Association of America. Market value of the account was the sum of the
account's total assets, including cash, cash equivalents, short-term
investments, and securities valued at current market prices.
2. The CUMULATIVE RETURN means that $1 invested in the composite account
on January 1, 1979 had grown to $15.88 by September 30, 1996.
3. The 17-YEAR MEAN is the arithmetic average of the annual returns for
the calendar years listed.
4. The S&P 500 is an unmanaged index which assumes reinvestment of divi-
dends and is generally considered representative of securities similar
to those invested in by the Adviser for purpose of the composite per-
formance numbers set forth above.
5. The Adviser's average annual management fee over the period shown
(1/1/79-9/30/96) was 0.40% or 40 basis points. During the period, fees
on the Adviser's individual accounts ranged from 0.32% to 1.00% (32
basis points to 100 basis points). Net returns to investors vary de-
pending on the management fee.
ADMINISTRATIVE SERVICES
UAM Fund Services, Inc. ("UAMFSI"), a wholly-owned subsidiary of United As-
set Management Corporation, is responsible for performing and overseeing ad-
ministrative, fund accounting, dividend disbursing and transfer agent services
provided to the Fund and its Portfolios. UAMFSI's principal office is located
at 211 Congress Street, Boston, MA 02110. UAMFSI has subcontracted some of
these services to Chase Global Funds Services Company ("CGFSC"), an affiliate
of The Chase Manhattan Bank, by a Mutual Funds Service Agreement dated April
15, 1996. CGFSC is located at 73 Tremont Street, Boston, MA 02108.
Each Portfolio pays UAMFSI a two part monthly fee: a Portfolio-specific fee
which is retained by UAMFSI and a sub-administration fee which UAMFSI in turn
pays to CGFSC. The following Portfolio-specific fees are calculated from the
aggregate net assets of each Portfolio:
<TABLE>
<CAPTION>
RATE
------
<S> <C>
Hanson Equity Portfolio............................................... 0.04%.
</TABLE>
CGFSC's monthly fee for its services is calculated on an annualized basis as
follows:
0.19 of 1% of the first $200 million of combined Fund assets;
0.11 of 1% of the next $800 million of combined Fund assets;
0.07 of 1% of combined Fund assets in excess of $1 billion but less than
$3 billion;
0.05 of 1% of combined Fund assets in excess of $3 billion.
20
<PAGE>
Fees are allocated among the Portfolios on the basis of their relative as-
sets and are subject to a graduated minimum fee schedule per Portfolio, which
starts at $2,000 per month and increases to $70,000 annually after two years.
If a separate class of shares is added to a Portfolio, its minimum annual fee
increases by $20,000.
DISTRIBUTOR
UAM Fund Distributors, Inc., a wholly-owned subsidiary of UAM with its prin-
cipal office located at 211 Congress Street, Boston, Massachusetts 02110, dis-
tributes the shares of the Fund. Under the Distribution Agreement (the "Agree-
ment"), the Distributor, as agent of the Fund, agrees to use its best efforts
as sole distributor of the Fund's shares. The Distributor does not receive any
fee or other compensation under the Agreement with respect to this Portfolio.
The Agreement continues in effect as long as the Fund's Board of Trustees.
Those approving the Agreement must include a majority of Trustees who are nei-
ther parties to the Agreement nor interested persons of any such party. The
Agreement provides that the Fund will bear costs of registration of its shares
with the SEC and various states as well as the printing of its prospectuses,
its SAIs and its reports to shareholders.
PORTFOLIO TRANSACTIONS
The Advisory Agreements for each of the Fund's Portfolios authorize the Ad-
viser to select the brokers or dealers that will execute the purchases and
sales of investment securities for each Portfolio. The Agreements direct the
Adviser to use its best efforts to obtain the best available price and most
favorable execution for all transactions of the Portfolios. If consistent with
the interests of the Portfolios, the Adviser may select brokers on the basis
of research, statistical and pricing services these brokers provide to the
Portfolios in addition to required Adviser services. Such brokers may be paid
a higher commission than that which another qualified broker would have
charged for effecting the same transaction, provided that such commissions are
paid in compliance with the Securities Exchange Act of 1934, as amended, and
that the Adviser determines in good faith that the commission is reasonable in
terms either of the transaction or the overall responsibility of the Adviser
to the Portfolios and the Adviser's other clients. Although not a typical
practice, the Adviser may place portfolio orders with qualified broker-dealers
who refer clients to the Adviser.
If a purchase or sale of securities is consistent with the investment poli-
cies of a Portfolio and one or more other clients served by the Adviser is
considering a purchase at or about the same time, transactions in such securi-
ties will be allocated among the Portfolio and clients in a manner deemed fair
and reasonable by the Adviser. Although there is no specified formula for al-
locating such transactions, allocations are subject to periodic review by the
Fund's Trustees.
21
<PAGE>
GENERAL INFORMATION
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Fund was organized as a Delaware business trust on May 18, 1994 under
the name "The Regis Fund II". On October 31, 1995, the name of the Fund was
changed to "UAM Funds Trust." The Fund's Agreement and Declaration of Trust
permits the Fund to issue an unlimited number of shares of beneficial inter-
est, without par value. The Trustees have the power to designate one or more
series ("Portfolios") or classes of shares of beneficial interest without fur-
ther action by shareholders.
At its discretion, the Board of Trustees may create additional Portfolios
and classes of shares. The shares of each Portfolio are fully paid and nonas-
sessable, and have no preference as to conversion, exchange, dividends, re-
tirement or other features and no pre-emptive rights. They have noncumulative
voting rights, which means that holders of more than 50% of shares voting for
the election of Trustees can elect 100% of the Trustees. A shareholder is en-
titled to one vote for each full share held (and a fractional vote for each
fractional share held), then standing in his name on the books of the Fund.
Annual meetings will not be held except as required by the 1940 Act and
other applicable laws. The Fund has undertaken that its Trustees will call a
meeting of shareholders if such a meeting is requested in writing by the hold-
ers of not less than 10% of the outstanding shares of the Fund. The Fund will
assist shareholder communications in such matters to the extent required by
the undertaking.
CUSTODIAN
The Chase Manhattan Bank serves as custodian of the Fund's assets.
ACCOUNTANTS
Price Waterhouse LLP acts as the independent accountants for the Fund.
REPORTS
Investors will receive unaudited semi-annual financial statements and annual
financial statements audited by Price Waterhouse LLP.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be made by contacting the UAM Funds Service Center
at the address or telephone number on the cover of this Prospectus.
LITIGATION
The Fund is not involved in any litigation.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS NOT CONTAINED IN THIS PROSPECTUS OR IN THE PORTFOLIO'S STATEMENT OF
ADDITIONAL INFORMATION, IN CONNECTION WITH THE OFFERING MADE BY THIS PROSPEC-
TUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR ITS REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFERING BY THE FUND IN ANY JURISDICTION IN WHICH SUCH OFFERING
MAY NOT BE LAWFULLY MADE.
22
<PAGE>
UAM FUNDS -- INSTITUTIONAL CLASS SHARES
Acadian Emerging Markets Portfolio
Acadian International Equity Portfolio
BHM&S Total Return Bond Portfolio
Chicago Asset Management Intermediate Bond Portfolio
Chicago Asset Management Value/Contrarian Portfolio
C&B Balanced Portfolio
C&B Equity Portfolio
C&B Equity Portfolio for Taxable Investors
C&B Mid Cap Equity Portfolio
McKee Domestic Equity Portfolio
McKee International Equity Portfolio
McKee U.S. Government Portfolio
DSI Balanced Portfolio
DSI Disciplined Value Portfolio
DSI Limited Maturity Bond Portfolio
DSI Money Market Portfolio
FMA Small Company Portfolio
FPA Crescent Portfolio
Hanson Equity Portfolio
ICM Equity Portfolio
ICM Fixed Income Portfolio
ICM Small Company Portfolio
IRC Enhanced Index Portfolio
Jacobs International Octagon Portfolio
MJI International Equity Portfolio
Newbold's Equity Portfolio
NWQ Balanced Portfolio
NWQ Value Equity Portfolio
Rice, Hall James Small Cap Portfolio
Rice, Hall James Small/Mid Cap Portfolio
Sirach Equity Portfolio
Sirach Fixed Income Portfolio
Sirach Growth Portfolio
Sirach Short-Term Reserves Portfolio
Sirach Special Equity Portfolio
Sirach Strategic Balanced Portfolio
SAMI Preferred Stock Income Portfolio
Sterling Partners' Balanced Portfolio
Sterling Partners' Equity Portfolio
Sterling Partners' Small Cap Portfolio
Sterling Partners' Short-Term Fixed Income Portfolio
Sterling Partners' Small Cap Value Portfolio
TS&W Balanced Portfolio
TS&W Equity Portfolio
TS&W Fixed Income Portfolio
TS&W International Equity Portfolio
23
<PAGE>
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
1-800-638-7983
Investment Adviser
Hanson Investment Management Company
4000 Civic Center Drive
Suite 200
San Rafael, CA 94903
Distributor
UAM FUND DISTRIBUTORS, INC.
211 Congress Street
Boston, MA 02110
PROSPECTUS
January 3, 1997
<PAGE>
[LOGO OF UAM FUNDS APPEARS HERE]
IRC Enhanced
Index Portfolio
Institutional
Class Shares
January 3, 1997
P R O S P E C T U S
<PAGE>
[LOGO OF UAM FUNDS APPEARS HERE]
UAM FUNDS SERVICE CENTER
C/O CHASE GLOBAL FUNDS SERVICES COMPANY
P.O. BOX 2798
BOSTON, MA 02208-2798
1-800-638-7983
- -------------------------------------------------------------------------------
IRC ENHANCED INDEX PORTFOLIO
INSTITUTIONAL CLASS SHARES
INVESTMENT ADVISER: INVESTMENT RESEARCH COMPANY
- -------------------------------------------------------------------------------
PROSPECTUS -- JANUARY 3, 1997
UAM Funds Trust (the "Fund") is an open-end, management investment company
known as a "mutual fund." The Fund consists of multiple series (known as
"Portfolios") each of which has different investment objectives and policies.
IRC Enhanced Index Portfolio currently offers only one class of shares: Insti-
tutional Class Shares. The securities offered in this Prospectus are Institu-
tional Class Shares of one diversified, no-load Portfolio of the Fund managed
by Investment Research Company.
IRC ENHANCED INDEX PORTFOLIO. IRC Enhanced Index Portfolio (the "Portfolio")
is a mutual fund portfolio which seeks a total return exceeding that of the
Standard & Poor's Composite Stock Price Index ("S&P 500") while carefully con-
trolling risk. IRC plans to achieve this objective by employing its proprie-
tary analytic technology to invest in a diversified portfolio of common stocks
that are listed in the S&P 500 ("S&P 500 stocks").
There can be no assurance that the Portfolio will achieve its stated objec-
tive.
Keep this Prospectus for future reference. It contains information that you
should know before you invest. A "Statement of Additional Information" (SAI)
containing additional information about the Fund has been filed with the Secu-
rities and Exchange Commission. The SAI is dated January 3, 1997 and has been
incorporated by reference into this Prospectus. For a free copy of the SAI
contact the UAM Funds Service Center at the address or telephone number above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Fund Expenses.............................................................. 1
Prospectus Summary......................................................... 3
Risk Factors............................................................... 4
Financial Highlights....................................................... 4
Investment Objective....................................................... 5
Investment Policies........................................................ 5
Investment Limitations..................................................... 7
Purchase of Shares......................................................... 8
Redemption of Shares....................................................... 10
Shareholder Services....................................................... 12
Valuation of Shares........................................................ 13
Performance Calculations................................................... 13
Dividends, Capital Gains Distributions and Taxes........................... 14
Investment Adviser......................................................... 15
Adviser's Historical Performance........................................... 17
Administrative Services.................................................... 19
Distributor................................................................ 19
Portfolio Transactions..................................................... 20
General Information........................................................ 20
UAM Funds -- Institutional Class Shares.................................... 22
</TABLE>
<PAGE>
FUND EXPENSES
The following table illustrates expenses and fees that a shareholder of the
Portfolio's Institutional Class Shares would incur. Transaction fees may be
charged if a broker-dealer or other financial intermediary deals with the Fund
on your behalf. (See "PURCHASE OF SHARES.")
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Sales Load Imposed on Purchases......................................... NONE
Sales Load Imposed on Reinvested Dividends.............................. NONE
Deferred Sales Load..................................................... NONE
Redemption Fees......................................................... NONE
Exchange Fees........................................................... NONE
</TABLE>
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF NET ASSETS)
<TABLE>
<S> <C>
Investment Advisory Fees............................................ 0.70 %
Administrative Fees................................................. 1.61 %
12b-1 Fees.......................................................... NONE
Other Expenses...................................................... 0.89 %
Advisory Fees Waived................................................ (0.70)%
-----
Total Operating Expenses (After Fee Waiver)......................... 2.50 %*
</TABLE>
- -----------
* The Adviser has agreed to waive all or a portion of its advisory fees and to
assume operating expenses, if necessary, to keep the Portfolio's total an-
nual operating expenses (excluding interest, taxes and extraordinary ex-
penses) from exceeding 2.50% of average daily net assets. The figures above
include the effect of expense offsets. If expense offsets were excluded,
annualized Total Operating Expenses for the six month period ended October
31, 1996 would be 2.51%. (See "FINANCIAL HIGHLIGHTS.") It is estimated that
if the Adviser did not waive fees, the Portfolio's total annual operating
expenses would be 3.20% of average daily net assets. The Adviser will not be
reimbursed by the Fund for any advisory fees which are waived or expenses
which the Adviser may bear on behalf of the Portfolio for a given fiscal
year.
The table above shows various fees and expenses and investor would bear di-
rectly or indirectly. The expenses and fees set forth above are estimates for
the fiscal year and are annualized based on the Portfolio's operations during
the semi-annual period ended October 31, 1996 except that they have been re-
stated to reflect current Administrative Fees (see "ADMINISTRATIVE SERVICES"
herein and in the SAI) and the current expense cap.
1
<PAGE>
The following example illustrates expenses a shareholder would pay on a
$1,000 investment over various time periods assuming (1) a 5% annual rate of
return and (2) redemption at the end of the time period indicated.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Expenses..................................... $26 $79 $135 $286
</TABLE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EX-
PENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE
SHOWN.
2
<PAGE>
PROSPECTUS SUMMARY
INVESTMENT ADVISER
Investment Research Company, (the "Adviser") is a subsidiary of United Asset
Management Corporation and has approximately $2.0 billion of assets under man-
agement for institutional investors, including corporations, state govern-
ments, labor unions, foundations, mutual funds, and individuals. (See "INVEST-
MENT ADVISER.")
PURCHASE OF SHARES
Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the
"Distributor"), to investors at net asset value without a sales commission.
Share purchases may be made by sending investments directly to the Fund. The
minimum initial investment is $2,500. The minimum for subsequent investments
is $100. Certain exceptions to the initial or minimum investment amounts may
be made by the officers of the Fund. (See "PURCHASE OF SHARES.")
DIVIDENDS AND DISTRIBUTIONS
The Portfolio will normally distribute substantially all of its net invest-
ment income in quarterly dividends. The Portfolio will distribute any realized
net capital gains annually. Distributions will be reinvested in Portfolio
shares automatically unless an investor elects to receive cash distributions.
(See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES.")
REDEMPTIONS AND EXCHANGES
Shares of the Portfolio may be redeemed at any time, without cost, at the
net asset value of the Portfolio next determined after receipt of the redemp-
tion request. The redemption price may be more or less than the purchase
price. (See "REDEMPTION OF SHARES.")
ADMINISTRATIVE SERVICES
UAM Fund Services Inc. ("UAMFSI"), a wholly-owned subsidiary of United Asset
Management Corporation, is responsible for performing and overseeing adminis-
tration, fund accounting, dividend disbursing and transfer agency services
provided to the Fund and its Portfolios by third-party service providers. (See
"ADMINISTRATIVE SERVICES.")
3
<PAGE>
RISK FACTORS
The value of the Portfolio's shares will fluctuate in response to changes in
market and economic conditions as well as the financial conditions and pros-
pects of the issuers in which a Portfolio invests. An investment in the Port-
folio presents risks similar to "overall market risk". The Portfolio presents
risks roughly the same as those which would be incurred by investing in a
portfolio comprised of the common stocks of all 500 companies listed in the
S&P 500, with the weight of each stock in the portfolio equal to the stock's
weight in the S&P 500. (See "INVESTMENT POLICIES.")
FINANCIAL HIGHLIGHTS
The following table provides selected per share information for a share out-
standing throughout the periods presented of the Portfolio. The table is part
of the Portfolio's Financial Statements included in the Portfolio's 1996 An-
nual Report to Shareholders and the 1996 Semi-Annual Report. The Reports are
incorporated into the Portfolio's SAI. The Portfolio's annual Financial State-
ments have been audited by Price Waterhouse LLP whose unqualified opinion
thereon is also incorporated into the Portfolio's SAI. Please read the follow-
ing information in conjunction with the Portfolio's 1996 Annual Report to
Shareholders and the 1996 Semi-Annual Report to Shareholders.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JANUARY 23, 1996* OCTOBER 31, 1996
TO APRIL 30, 1996 (UNAUDITED)
----------------- ----------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD........ $ 10.00 $ 10.30
------- -------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income..................... 0.02 0.02
Net Realized and Unrealized Gain on
Investments............................. 0.30 0.86
------- -------
Total from Investment Operations........ 0.32 0.88
------- -------
DISTRIBUTIONS
Net Investment Income..................... (0.02) (0.02)
------- -------
NET ASSET VALUE, END OF PERIOD.............. $ 10.30 $ 11.16
======= =======
TOTAL RETURN+............................... 3.20% 8.55%
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands)..... $ 3,933 $ 4,999
Ratio of Expenses to Average Net Assets... 2.52%** 2.51%**
Ratio of Investment Income to Average Net
Assets.................................. 0.67%** 0.24%**
Portfolio Turnover Rate................... 31% 24%
Average Commission Rate................... $0.0205 $0.0257
Voluntary Waived Fees and Expenses Assumed
by the Adviser Per Share................ $ 0.03 $ 0.01
Ratio of Expenses to Average Net Assets
Including Expense Offsets............... 2.50%** 2.50%**
</TABLE>
- -----------
* Commencement of Operations.
** Annualized.
+ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser.
4
<PAGE>
INVESTMENT OBJECTIVE
The Portfolio seeks a total return exceeding that of its benchmark, the S&P
500, by a consistent premium with minimal downside risk relative to that
benchmark.
INVESTMENT POLICIES
The Portfolio's assets are invested in the stocks of some but not all of the
companies in the S&P 500 universe. The Portfolio's investment adviser uses a
mathematical model to help make the investment decisions. The objective is to
build the Portfolio whose returns will exceed those of the S&P 500. Every
three months the Adviser evaluates each stock in the S&P 500 universe for in-
clusion in the Portfolio, attempting to select the best performers, within
constraints for risk control.
The Adviser believes that institutions create the major demand for stocks,
and institutional preferences change slowly over the short term (3-6 months).
These stable preferences are therefore important determinants of the sensitiv-
ity of stock returns to various factors and combinations of factors such as
inflation and interest rates. Institutional investor preferences also depend
on individual stock attributes such as price/earnings ratios and other funda-
mentals. These preferences are identifiable, according to stock market re-
search, so today's factor values can be used to estimate the short-term per-
formance of each stock in each of 20 sectors of the S&P 500 universe relative
to other stocks in that sector.
The Adviser focuses on comparisons among stocks and not on market timing.
Generally, the Portfolio will be fully invested in stocks from the S&P 500
universe. The Portfolio may invest up to 10% of its assets in short-term (one
year or less to maturity) U.S. Treasury securities as a cash reserve to hold
cash received from shareholders pending investment or to meet redemption re-
quests from shareholders.
The Portfolio's investment policy of limiting risk while maximizing expected
return is implemented in a number of ways. The Adviser classifies the S&P 500
universe into 20 industrial sectors (such as Transportation, Communications,
Health Care, etc.). Within each sector, the Adviser selects an average of 8-10
stocks as described below. Consequently, risk is first limited by diversifica-
tion within each sector and, when combined, within the resulting Portfolio,
which would normally hold 160-200 stocks. The second element of risk control
lies in the way the stocks are weighted; once a sector group of stocks is se-
lected, its weighting in the Portfolio is set equal to the weighting of that
sector in the benchmark S&P 500 Index so that the Portfolio does not take on
"sector bets." Thirdly, the stock selection process employs dividend and P/E
screens which eliminate the lowest dividend yielding stocks as well as those
with the highest P/RE ratios in each sector, as these are the stocks which are
generally the most vulnerable during periods of market
5
<PAGE>
correction. Finally, the Portfolio is rebalanced once every three months to
maintain the continuity of risk control measures.
To select stocks within each of the 20 sectors, the Adviser uses a mathemat-
ical model developed during a combined total of 40 years of research by two of
the Adviser's principals when they were professors in the Graduate School of
Business at the University of Chicago. The model is based on the principle
that institutional investors dominate the demand for stocks, and institutional
preferences change slowly over the near term (3-6 months). These stable pref-
erences are important determinants of the sensitivity of stock returns to
trends now underway in factors such as inflation and interest rates and in in-
dividual stock fundamentals such as dividends and price/earning ratios. In
choosing the stocks in each sector, the model employs a proprietary optimiza-
tion program, the objective of which is to select a combination of stocks
(from among all possible combinations) which has the maximum expected long run
return while controlling the risk that this return will be inferior to the
market performance of that sector.
Within the Portfolio, at least 90% of the net asset value is allocated
strictly to stocks from the S&P 500 universe; the balance of 10% or less is
allocated to short-term U.S. Treasury securities (maturities of one year or
less). No hedging strategies, no financial derivatives, no futures contracts,
no repurchase agreements, and no instruments other than S&P 500 stocks and
U.S. Treasury securities are used to achieve the investment objective.
The S&P 500 is composed of 500 selected common stocks, most of which are
listed on the New York Stock Exchange. Standard & Poor's Corporation ("S&P")
chooses the stocks to be included in the S&P 500 solely on a statistical ba-
sis. The weights of stocks in the S&P 500 are based on each stock's relative
total market value, which is defined as the stock's market price per share
times the number of shares outstanding. Stocks currently in the S&P 500 repre-
sent approximately three-quarters of the total market value of all U.S. common
stocks. The Portfolio is neither sponsored by nor affiliated with S&P.
SHORT-TERM INVESTMENTS
In order to maintain liquidity to meet anticipated redemptions and to hold
cash received from shareholders pending investment, up to 10% of the Portfo-
lio's assets may be invested in U.S. Treasury securities with maturities of
one year or less.
PORTFOLIO TURNOVER
Every 90 days, only the oldest one-third of the stocks (by value) in the
Portfolio are considered for trading. It is anticipated that the Portfolio's
annual turnover rate will not exceed 100% under normal circumstances. To the
extent that net short-term capital gains are realized, any distributions re-
sulting from such gains are considered ordinary income for federal income tax
purposes. The Portfolio will not normally engage in short-term trading, but it
reserves the right to do so.
6
<PAGE>
INVESTMENT LIMITATIONS
The Portfolio will not:
(a) with respect to 75% of its assets, invest more than 5% of its total
assets at the time of purchase in the securities of any single issuer
(other than obligations issued or guaranteed as to principal and in-
terest by the U.S. Government or any of its agencies or instrumentali-
ties);
(b) with respect to 75% of its assets, purchase more than 10% of any class
of the outstanding voting securities of any issuer;
(c) invest more than 5% of its assets at the time of purchase in the secu-
rities of companies that have (with predecessors) a continuous operat-
ing history of less than 3 years;
(d) invest more than 25% of its assets in companies within a single indus-
try; however, there are no limitations on investments made in instru-
ments issued or guaranteed by the U.S. Government and its agencies.
(e) make loans except by purchasing debt securities in accordance with its
investment objective and policies or entering into repurchase agree-
ments or by lending its portfolio securities to banks, brokers, deal-
ers and other financial institutions so long as the loans are made in
compliance with the 1940 Act, as amended, or the Rules and Regulations
or interpretations of the SEC;
(f) (i) borrow, except from banks and as a temporary measure for extraor-
dinary or emergency purposes and then, in no event, in excess of 33
1/3% of the Portfolio's gross assets valued at the lower of market or
cost, and (ii) the Portfolio may not purchase additional securities
when borrowings exceed 5% of total assets; or
(g) pledge, mortgage or hypothecate any of its assets to an extent greater
than 33 1/3% of its total assets at fair market value.
The investment objectives of the Portfolio are fundamental and may be
changed only with the approval of the holders of a majority of the outstanding
shares of such Portfolio. Except for limitations (a), (b), (d), (e) and
(f)(i), the Portfolio's investment limitations and policies described in this
Prospectus and in the SAI are not fundamental and may be changed by the Fund's
Board of Trustees upon reasonable notice to investors.
7
<PAGE>
PURCHASE OF SHARES
Shares of each Portfolio are offered through UAM Fund Distributors, Inc.
(the "Distributor"), without a sales commission at the net asset value per
share next determined after an order is received by the Fund and payment is
received by the Custodian. (See "VALUATION OF SHARES.") The minimum initial
investment required is $2,500. Certain exceptions may be made by the officers
of the Fund.
Shares of the Portfolio may be purchased by customers of broker-dealers or
other financial intermediaries ("Service Agents") which have established a
shareholder servicing relationship with the Fund on behalf of their customers.
Service Agents may impose additional or different conditions or other account
fees on the purchase and redemption of Portfolio shares by their customers.
Each Service Agent is responsible for transmitting to its customers a schedule
of any such fees and information regarding any additional or different pur-
chase and redemption conditions. Shareholders who are customers of Service
Agents should consult their Service Agent for information regarding these fees
and conditions. Amounts paid to Service Agents may include transaction fees
and/or service fees paid by the Fund from the Fund assets attributable to the
Service Agent, and would not be imposed if shares of the Portfolio were pur-
chased directly from the Fund or the Distributor. The Service Agents may pro-
vide shareholder services to their customers that are not available to a
shareholder dealing directly with the Fund. A salesperson and any other person
entitled to receive compensation for selling or servicing Portfolio shares may
receive different compensation with respect to one particular class of shares
over another in the Fund.
Service Agents may enter confirmed purchase orders on behalf of their cus-
tomers. If shares of a Portfolio are purchased in this manner, the Service
Agent must receive your investment order before the close of trading on the
New York Stock Exchange ("NYSE"), and transmit it to the Fund's Sub-Transfer
Agent prior to 4 p.m. to receive that day's share price. Proper payment for
the order must be received by the Sub-Transfer Agent no later than the time
when the Portfolio is priced on the following business day. Service Agents are
responsible to their customers and the Fund for timely transmission of all
subscription and redemption requests, investment information, documentation
and money.
BY MAIL
. Complete and sign an Application and mail it along with a check payable
to UAM Funds to:
UAM Funds Trust
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
8
<PAGE>
Payment for purchases of shares received by mail will be credited to an ac-
count at the next share price calculated for the Portfolio after receipt. Pay-
ment does not need to be converted into Federal Funds (monies credited to the
Fund's Custodian Bank by a Federal Reserve Bank) before the Fund will accept
it for investment.
BY WIRE
. Telephone the UAM Funds Service Center and provide the account name, ad-
dress, telephone number, social security or taxpayer identification num-
ber, Portfolio selected, amount being wired and the name of the bank
wiring the funds. An account number will then be provided to you. Next,
. Instruct your bank to wire the specified number of shares or a dollar
amount to the Fund's custodian:
The Chase Manhattan Bank
ABA #021000021
UAM Funds
Credit DDA #9102772952
Ref: Portfolio Name
Your Account Number
Your Account Name
Wire Control Number
. Forward a completed Application to the UAM Funds Service Center. Federal
Funds purchases will be accepted only on days when the NYSE and the Cus-
todian Bank are open for business.
ADDITIONAL INVESTMENTS
Additional investments can be made at any time. The minimum additional in-
vestment is $100. Shares can be purchased at net asset value by mailing a
check to the UAM Service Center (payable to "UAM Funds") or by wiring money to
the Custodian Bank using the instructions outlined above. When making addi-
tional investments, be sure that the account name and number is identified on
the check or wire and the Portfolio to be purchased is specified.
Prior to wiring additional investments, notify the UAM Funds Service Center
by calling the number on the cover of this prospectus. Mail orders should in-
clude, when possible, the "Invest by Mail" stub which accompanies any Fund
confirmation statement.
OTHER PURCHASE INFORMATION
Investments received by 4 p.m. ET (the close of the NYSE) will be invested
at the share price calculated after the NYSE closes on that day. Investments
received after the close of the NYSE will be executed at the price computed on
the next day the NYSE is open. The Fund reserves the right, in its sole dis-
cretion, to
9
<PAGE>
suspend the offering of shares of each Portfolio or to reject purchase orders
when, in the judgment of management, such suspension or rejection is in the
best interests of the Fund. Purchases of a Portfolio's shares will be made in
full and fractional shares of the Portfolio calculated to three decimal
places. Certificates for fractional shares will not be issued. Certificates
for whole shares will not be issued except at the written request of the
shareholder.
IN-KIND PURCHASES
If accepted by the Fund, shares of the Portfolio may be purchased in ex-
change for securities which are eligible for acquisition by the Portfolio, as
described in this Prospectus. Securities to be exchanged which are accepted by
the Fund will be valued as described under "VALUATION OF SHARES" at the next
determination of net asset value after acceptance. Shares issued by a Portfo-
lio in exchange for securities will be issued at net asset value determined as
of the same time. All dividends, interest, subscription, or other rights per-
taining to such securities shall become the property of the Portfolio and must
be delivered to the Fund by the investor upon receipt from the issuer. Securi-
ties acquired through an in-kind purchase will be acquired for investment and
not for immediate resale.
The Fund will not accept securities in exchange for shares of the Portfolio
unless:
. at the time of exchange, such securities are eligible to be in-
cluded in the Portfolio (current market quotations must be readily
available for such securities);
. the investor represents and agrees that all securities offered to
be exchanged are liquid securities and not subject to any restric-
tions upon their sale by the Portfolio under the Securities Act of
1933, or otherwise; and
. the value of any such securities (except U.S. Government securi-
ties) being exchanged together with other securities of the same
issuer owned by the Portfolio will not exceed 5% of the net assets
of the Portfolio immediately after the transaction.
Investors who are subject to Federal taxation upon exchange may realize a
gain or loss for Federal income tax purposes depending upon the cost of secu-
rities or local currency exchanged. Investors interested in such exchanges
should contact the Adviser.
REDEMPTION OF SHARES
Shares of each Portfolio may be redeemed by mail or telephone at any time,
without cost, at the net asset value of the Portfolio next determined after
receipt of the redemption request. No charge is made for redemptions. Any re-
demption may be more or less than the purchase price of the shares depending
on the market value of investment securities held by the Portfolio.
10
<PAGE>
BY MAIL
Address requests for redemption to the UAM Funds Service Center. Requests to
redeem shares must include:
. share certificates, if issued;
. a letter of instruction or an assignment specifying the number of
shares or dollar amount to be redeemed, signed by all registered
owners of the shares in the exact names in which they are regis-
tered;
. any required signature guarantees (see "SIGNATURE GUARANTEES"); and
. any other necessary legal documents, if required, in the case of
estates, trusts, guardianships, custodianships, corporations, pen-
sion and profit sharing plans and other organizations.
BY TELEPHONE
A redemption request by telephone requires the following:
. establish the telephone redemption privilege (and if desired, the
wire redemption privilege) by completing appropriate sections of
the Application; and
. call the Fund and instruct that the redemption proceeds be mailed
to you or wired to your bank.
The following tasks cannot be accomplished by telephone:
. changing the name of the commercial bank or the account designated
to receive redemption proceeds (this can be accomplished only by a
written request signed by each shareholder, with each signature
guaranteed);
. redemption of certificated shares by telephone.
The Fund and its Sub-Transfer Agent will employ reasonable procedures to
confirm that instructions communicated by telephone are genuine, and they may
be liable for any losses if they fail to do so. These procedures include re-
quiring the investor to provide certain personal identification at the time an
account is opened, as well as prior to effecting each transaction requested by
telephone. In addition, all telephone transaction requests will be recorded
and investors may be required to provide additional telecopied written in-
structions of such transaction requests. The Fund or Sub-Transfer Agent may be
liable for any losses due to unauthorized or fraudulent telephone instructions
if the Fund or the Sub-Transfer Agent does not employ the procedures described
above. Neither the Fund nor the Sub-Transfer Agent will be responsible for any
loss, liability, cost or expense for following instructions received by tele-
phone that it reasonably believes to be genuine.
11
<PAGE>
SIGNATURE GUARANTEES
Signature guarantees are required for the following redemptions:
. redemptions where the proceeds are to be sent to someone other than
the registered shareowner(s);
. redemptions where the proceeds are to be sent to someplace other
than the registered address; or
. share transfer requests.
Signature guarantees will be accepted from any eligible guarantor institu-
tion which participates in a signature guarantee program. Eligible guarantor
institutions include banks, brokers, dealers, credit unions, national securi-
ties exchanges, registered securities associations, clearing agencies and sav-
ings associations. Broker-dealers guaranteeing signatures must be a member of
a clearing corporation or maintain net capital of at least $100,000. Credit
unions must be authorized to issue signature guarantees.
OTHER REDEMPTION INFORMATION
Normally, the Fund will make payment for all shares redeemed under proper
procedures within one business day of and no more than seven days after the
receipt of the request, or earlier if required under applicable law. The Fund
may suspend the right of redemption or postpone the date at times when both
the NYSE and Custodian Bank are closed, or under any emergency circumstances
determined by the SEC.
If the Board of Trustees determines that it would be detrimental to the best
interests of remaining shareholders of the Fund to make payment wholly or
partly in cash, the Fund may pay redemption proceeds in whole or in part by a
distribution in-kind of liquid securities held by a Portfolio in lieu of cash
in conformity with applicable rules of the SEC. Investors may incur brokerage
charges on the sale of portfolio securities received in payment of redemp-
tions.
SHAREHOLDER SERVICES
EXCHANGE PRIVILEGE
Institutional Class Shares of the Portfolio may be exchanged for Institu-
tional Class Shares of any other UAM Funds Portfolio. (See the list of Portfo-
lios of the UAM Funds at the end of this Prospectus.) Exchange requests should
be made by contacting the UAM Funds Service Center.
Any exchange will be based on the net asset value of the shares involved.
There is no sales commission or charge of any kind for an exchange. Before
making an exchange into a Portfolio, a shareholder should read its Prospectus
and consider the investment objectives of the Portfolio to be purchased. Call
the UAM Funds Service Center for a copy of the Prospectus for the Portfolio(s)
in which you
12
<PAGE>
are interested. Exchanges can only be made with Portfolios that are qualified
for sale in a shareholder's state of residence.
Exchange requests may be made either by mail or telephone. Telephone ex-
changes will be accepted only if the certificates for the shares to be ex-
changed have not been issued to the shareholder and if the registration of the
two accounts will be identical. Requests for exchanges received prior to 4
p.m. (ET) will be processed as of the close of business on the same day. Re-
quests received after 4 p.m. will be processed on the next business day. The
Board of Trustees may limit the frequency and amount of exchanges permitted.
For additional information regarding responsibility for the authenticity of
telephoned instructions, see "REDEMPTION OF SHARES -- BY TELEPHONE". An ex-
change into another UAM Funds Portfolio is a sale of shares and may result in
a gain or loss for income tax purposes. The Fund may modify or terminate the
exchange privilege at any time.
VALUATION OF SHARES
The net asset value of the Portfolio is determined by dividing the value of
the Portfolio's assets, less any liabilities, by the number of shares out-
standing. The net asset value per share of the Portfolio is determined as of
the close of the NYSE on each day that the NYSE is open for business.
Equity securities listed on a securities exchange for which market quota-
tions are readily available are valued at the last quoted sale price of the
day. Price information on listed securities is taken from the exchange where
the security is primarily traded. Unlisted equity securities and listed secu-
rities not traded on the valuation date for which market quotations are read-
ily available are valued neither exceeding the current asked prices nor less
than the current bid prices. Quotations of foreign securities in a foreign
currency are converted to U.S. dollar equivalents. The converted value is
based upon the bid price of the foreign currency against U.S. dollars quoted
by any major bank or by a broker.
The value of other assets and securities for which no quotations are readily
available (including restricted securities) is determined in good faith at
fair value using methods determined by the Trustees.
PERFORMANCE CALCULATIONS
The Portfolio measures performance by calculating total return. Total return
figures are based on historical earnings and are not intended to indicate fu-
ture performance.
Total return is the change in value of an investment in the Portfolio over a
given period, assuming reinvestment of any dividends and capital gains. A cu-
mulative or aggregate total return reflects actual performance over a stated
period of
13
<PAGE>
time. An average annual total return is a hypothetical rate of return that, if
achieved annually, would have produced the same cumulative total return if
performance had been constant over the entire period.
The Portfolio's performance may be compared to data prepared by independent
services which monitor the performance of investment companies, data reported
in financial and industry publications, and various indices as further de-
scribed in the Portfolio's SAI. This information may also be included in sales
literature and advertising.
The Portfolio's Annual Report to Shareholders for the most recent fiscal
year end contains additional performance information that includes comparisons
with appropriate indices. The Annual Report is available without charge. Con-
tact the UAM Funds Service Center at the address or phone number on the cover
of this Prospectus.
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
DIVIDENDS AND CAPITAL GAINS
The Portfolio will normally distribute substantially all of its net invest-
ment income (for tax purposes) to shareholders in quarterly dividends. If any
net capital gains are realized, the Portfolio will normally distribute such
gains annually. All dividends and capital gains distributions will be automat-
ically reinvested in additional shares of the Portfolio unless the Fund is no-
tified in writing that the shareholder elects to receive distributions in
cash.
FEDERAL TAXES
The Portfolio intends to qualify as a "regulated investment company" under
subchapter M of the Internal Revenue Code of 1986, as amended, for federal in-
come tax purposes and to meet all other requirements that are necessary for it
(but not its shareholders) to be exempt from federal taxes on income and gains
paid to shareholders in the form of dividends. To do this, the Portfolio must,
among other things, distribute substantially all of its ordinary income and
net capital gains on an annual basis and maintain a portfolio of investments
which satisfies certain diversification criteria.
Dividends paid by the Portfolio from net investment income, whether in cash
or reinvested in shares, are taxable to shareholders. Short-term capital gains
will be taxed as ordinary income. Long-term capital gains distributions are
taxed as long-term capital gains. The Portfolio will notify shareholders annu-
ally of dividend income for tax purposes.
Dividends declared in October, November and December to shareholders of rec-
ord in such a month will be treated as if they had been paid by the Fund and
received by the shareholders on December 31 of the same calendar year, pro-
vided that the dividends are paid before February of the following year.
14
<PAGE>
The Fund is required by Federal law to withhold 31% of reportable payments
paid to shareholders who have not complied with IRS regulations. In order to
avoid this withholding requirement, you must certify that your Social Security
or Taxpayer Identification Number you have provided is correct and that either
you are not currently subject to backup withholding or you are exempt from
backup withholding. This certification must be made on the Application or on a
separate form supplied by the Fund.
INVESTMENT ADVISER
The investment adviser to the Portfolio is Investment Research Company lo-
cated at 16236 San Dieguito Road, Rancho Sante Fe, California 92067. The Ad-
viser is a wholly-owned subsidiary of United Asset Management Corporation
("UAM") and provides investment management services to corporations, state
governments, labor unions, mutual funds, and individuals.
The Portfolio pays an annual fee in monthly installments to the Adviser for
advisory services. This fee is accrued daily and paid monthly as a percentage
of the average net assets in the Portfolio for that month. The percentage fee
on an annual basis is 0.70%.
The Adviser may compensate its affiliated companies for referring investors
to the Portfolio. The Distributor, UAM, the Adviser, or any of their affili-
ates, may, at its own expense, compensate a Service Agent or other person for
marketing, shareholder servicing, record-keeping and/or other services per-
formed with respect to the Fund, the Portfolio or any Class of Shares of the
Portfolio. The person making such payments may do so out of its revenues, its
profits or any other source available to it. When such services arrangements
are in effect, they are made generally available to all qualified service
providers.
The Distributor, the Adviser and certain of their other affiliates also par-
ticipate, at the date of this Prospectus, in an arrangement with Smith Barney
Inc. under which Smith Barney provides certain defined contribution plan mar-
keting and other shareholder services and receives from such entities .15 of
1% of the daily net asset value of Institutional Class Shares held by Smith
Barony's eligible customer accounts in addition to amounts payable to all
selling dealers. The Fund also compensates Smith Barney for services it pro-
vides to certain defined contribution plan shareholders that are not otherwise
provided by UAMFSI.
As of the date of this Prospectus, the Adviser had approximately $2.0 bil-
lion in assets under management. The Adviser's clients at that date included
Chevron Corporation, Ameritech Corporation, Energen Corporation, Lockheed Mar-
tin Corporation, Minnesota Mining and Manufacturing, and Shell Oil Company
(corporations); Bricklayers Pension Trust -- Metropolitan Area Detroit, Oregon
Retail Pension Trust Fund, Bricklayers Local #21 Pension Fund, Intermountain
Ironworkers
15
<PAGE>
Pension Trust Fund, Retail Clerks Pension Trust Fund, and United Food and Com-
mercial Workers (Taft Hartley clients); Louisiana Municipal Employees' Retire-
ment System, Oregon Public Employees' Retirement System, and Virginia Retire-
ment System (states); and Cologne Reinsurance, Hawaii Medical Service Associa-
tions, Medical Malpractice of New York (insurance); and Lincoln Community
Foundation (Foundation).
It is not known whether the listed clients approve or disapprove of the Ad-
viser or the advisory services provided. The Adviser used objective criteria
in compiling the client list, such as account size, geographic location and
client classification. The Adviser did not use any performance based criteria.
The following paragraphs describe the background of the Adviser's officers
who are principally involved in managing the Portfolio.
F.J. (JERRY) GOULD, PH.D., PRESIDENT AND CEO: Principal, Investment Research
Company, responsible for coordination of all aspects of IRC activity, with
particular emphasis on performance, product research, new strategy development
and client relations. The Hobart W. Williams Professor of Applied Mathematics
and Management Science, Graduate School of Business at the University of Chi-
cago, Mr. Gould has been a consultant in financial markets as well as a port-
folio manager and trader in futures and equities for over 20 years. Mr. Gould
is an investment committee member of the American Association of University
Professors and also holds memberships in the American Finance Association, The
American Economic Association, The Journal of Portfolio Management, the Opera-
tions Research Society of America, The Institute of Management Science and the
Society for Industrial and Applied Mathematics. He has been a registered CPO
and CTA, and while a member of the Statistics Department at the University of
North Carolina, Chapel Hill, was the first Chairman of the Curriculum in Oper-
ations Research and Systems Analysis. Mr. Gould has authored five books, pub-
lished over 80 papers in professional journals, and is a contributor of arti-
cles appearing in the Wall Street Journal as well as other news publications.
C.B. (TOM) GARCIA, PH.D., SENIOR VICE PRESIDENT AND DIRECTOR OF
RESEARCH: Principal, Investment Research Company, responsible for implementa-
tion and management of all IRC computer strategies, in-house software develop-
ment, data systems and new product testing. A Professor of Management Science
at the Graduate School of Business, University of Chicago for sixteen years,
Mr. Garcia has done extensive research on mathematical programming, complemen-
tarity theory, fixed point approximations, nonlinear equations and equilibrium
and game theory. With his expertise in computer applications and systems de-
sign, Mr. Garcia has also been an active consultant in the area of pension
fund administration. Mr. Garcia holds memberships in the Operations Research
Society of America, The Institute of Management Science, the Society for In-
dustrial and Applied Mathematics, the Mathematical Programming Society of
America and the
16
<PAGE>
American Association of University Professors, and has published over 30 pa-
pers in professional journals as well as authored and edited several books.
DAVID H. ZELLNER, SENIOR VICE PRESIDENT: Mr. Zellner is responsible for the
day-to-day operations involving the implementation and administration of cli-
ent portfolios. These responsibilities include trading, back office record
keeping, performance accounting, and liaison with clients and custodial banks.
Additionally, Mr. Zellner assists the investment team in product design and
enhancements. He received his MBA in Finance from the University of Houston in
1979 and was awarded the CMA (Certified Management Accountant) designation in
1981. Prior to joining IRC in October, 1994, Mr. Zellner had been employed by
Shell Oil Company for 17 years. His most recent assignment was that of Direc-
tor of Equity Investments for the $10 billion Shell Retirement Plans. In this
position, Mr. Zellner was responsible for assembling a diversified portfolio
of equity managers. Additionally, he designed and managed two internal portfo-
lios: one using a fundamental growth strategy and one using a quantitative
value strategy. Mr. Zellner has delivered formal presentations at numerous
professional conferences. Topics have included: efficient trading techniques,
equity style management, and using derivatives in international portfolios.
ADVISER'S HISTORICAL PERFORMANCE
Below are certain performance data provided by the Adviser pertaining to the
composite of separately managed accounts of the Adviser that are managed with
substantially similar (although not necessarily identical) objectives, poli-
cies and strategies as those of the Portfolio. The investment returns of the
Portfolio may differ from those of the separately managed accounts because
such separately managed accounts may have fees and expenses that differ from
those of the Portfolio. Further, the separately managed accounts are not sub-
ject to investment limitations, diversification requirements and other re-
strictions imposed by the Investment Company Act of 1940 and Internal Revenue
Code; such conditions, if applicable, may have lowered the returns for sepa-
rately managed accounts. The results presented are not intended to predict or
suggest the return to be experienced by the Portfolio or the return an in-
vestor might achieve by investing in the Portfolio.
17
<PAGE>
INVESTMENT RESEARCH COMPANY -- IRC LARGE CAP CORE/BENCHMARK ENHANCEMENT
(PERCENTAGE RETURNS OF NET OF MANAGEMENT FEES)
<TABLE>
<CAPTION>
INVESTMENT
RESEARCH
CALENDAR YEARS COMPANY S&P 500
-------------- ---------- --------
<S> <C> <C>
1989..................................................... 35.97 % 31.49 %
1990..................................................... (1.81)% (3.17)%
1991..................................................... 30.60 % 30.55 %
1992..................................................... 8.28 % 7.66 %
1993..................................................... 12.04 % 9.99 %
1994..................................................... 3.29 % 1.31 %
1995..................................................... 35.83 % 37.56 %
9 Months ended 9/30/96................................... 11.86 % 13.49 %
Annualized............................................... 16.75 % 15.78 %
Cumulative............................................... 232.00 % 211.30 %
Seven-Year Mean (1/1/89-12/31/95)........................ 17.73 % 16.7 %
Value of $1 invested during (1/1/89-9/30/96)............. $ 3.32 $ 3.11
</TABLE>
Notes:
1. The ANNUALIZED RETURN is calculated from monthly data, allowing for com-
pounding. The formula used is in accordance with the acceptable methods set
forth by the Association for Investment Management Research, the Bank Ad-
ministration Institute, and the Investment Counsel Association of America.
Market Value of the account was the sum of the account's total assets, in-
cluding cash, cash equivalents, short term investments, and securities val-
ued at current market prices.
2. The CUMULATIVE RETURN means that $1 invested in the account on January 1,
1989 had grown to $3.32 by September 30, 1996.
3. The SEVEN-YEAR MEAN is the arithmetic average of the annual returns for the
calendar years listed.
4. The S&P 500 is an unmanaged index which assumes reinvestment of dividends
and is generally considered representative of securities similar to those
invested in by the Adviser for the purpose of the composite performance
numbers set forth above.
5. The Adviser's average annual management fee over the period shown (1/1/89-
9/30/96) was 0.51% or 51 basis points. During the period, fees on the Ad-
viser's individual accounts ranged from 0.20% to 0.80% (20 basis points to
80 basis points). Net returns to investors vary depending on the management
fee.
18
<PAGE>
ADMINISTRATIVE SERVICES
UAM Fund Services, Inc. ("UAMFSI"), a wholly-owned subsidiary of United Asset
Management Corporation, is responsible for performing and overseeing adminis-
trative, fund accounting, dividend disbursing and transfer agent services pro-
vided to the Fund and its Portfolios. UAMFSI's principal office is located at
211 Congress Street, Boston, MA 02110. UAMFSI has subcontracted some of these
services to Chase Global Funds Services Company ("CGFSC"), an affiliate of The
Chase Manhattan Bank, by a Mutual Funds Service Agreement dated April 15, 1996.
CGFSC is located at 73 Tremont Street, Boston, MA 02108.
Each Portfolio pays UAMFSI a two part monthly fee: a Portfolio-specific fee
which is retained by UAMFSI and a sub-administration fee which UAMFSI in turn
pays to CGFSC. The following Portfolio-specific fees are calculated from the
aggregate net assets of each Portfolio:
<TABLE>
<CAPTION>
RATE
----
<S> <C>
IRC Enhanced Index Portfolio........................................... .04%
</TABLE>
CGFSC's monthly fee for its services is calculated on an annualized basis as
follows:
0.19 of 1% of the first $200 million of combined Fund assets;
0.11 of 1% of the next $800 million of combined Fund assets;
0.07 of 1% of combined Fund assets in excess of $1 billion but less than $3
billion;
0.05 of 1% of combined Fund assets in excess of $3 billion.
Fees are allocated among the Portfolios on the basis of their relative assets
and are subject to a graduated minimum fee schedule per Portfolio, which starts
at $2,000 per month and increases to $70,000 annually after two years. If a
separate class of shares is added to a Portfolio, its minimum annual fee in-
creases by $20,000.
DISTRIBUTOR
UAM Fund Distributors, Inc., a wholly-owned subsidiary of UAM with its prin-
cipal office located at 211 Congress Street, Boston, Massachusetts 02110, dis-
tributes the shares of the Fund. Under the Fund's Distribution Agreement (the
"Agreement"), the Distributor, as agent of the Fund, agrees to use its best ef-
forts as sole distributor of the Fund's shares. The Distributor does not re-
ceive any fee or other compensation under the Agreement with respect to the
Portfolio. The Agreement continues in effect as long as it is approved at least
annually by the Fund's Board of Trustees. Those approving the Agreement include
a majority of Trustees who are neither parties to the Agreement nor interested
persons of any such party. This Agreement provides that the Fund will bear the
costs of the registration of its shares with the SEC and various states and the
printing of its prospectuses, SAIs and reports to shareholders.
19
<PAGE>
PORTFOLIO TRANSACTIONS
The Advisory Agreements for the Fund's Portfolios authorize the Adviser to
select the brokers or dealers that will execute the purchases and sales of in-
vestment securities for each Portfolio. The Agreements direct the Adviser to
use its best efforts to obtain the best available price and most favorable exe-
cution for all transactions of the Portfolios. If consistent with the interests
of the Portfolios, the Adviser may select brokers on the basis of research,
statistical and pricing services these brokers provide to the Portfolios in ad-
dition to required Adviser services. Such brokers may be paid a higher commis-
sion than that which another qualified broker would have charged for effecting
the same transaction, provided that such commissions are paid in compliance
with the Securities Exchange Act of 1934, as amended, and that the Adviser de-
termines in good faith that the commission is reasonable in terms either of the
transaction or the overall responsibility of the Adviser to the Portfolios and
the Adviser's other clients. Although not a typical practice, the Adviser may
place portfolio orders with qualified broker-dealers who refer clients to the
Adviser.
If a purchase or sale of securities is consistent with the investment poli-
cies of a Portfolio and one or more other clients served by the Adviser is con-
sidering a purchase at or about the same time, transactions in such securities
will be allocated among the Portfolio and clients in a manner deemed fair and
reasonable by the Adviser. Although there is no specified formula for allocat-
ing such transactions, allocations are subject to periodic review by the Fund's
Trustees.
GENERAL INFORMATION
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Fund was organized as a Delaware business trust on May 18, 1994 under the
name "The Regis Fund II." On October 31, 1995, the name of the Fund was changed
to "UAM Funds Trust." The Fund's Agreement and Declaration of Trust permits the
Fund to issue an unlimited number of shares of beneficial interest, without par
value. The Trustees have the power to designate one or more series ("Portfo-
lios") or classes of shares of beneficial interest without further action by
shareholders.
At its discretion, the Board of Trustees may create additional Portfolios and
classes of shares. The shares of each Portfolio are fully paid and nonassess-
able, and have no preference as to conversion, exchange, dividends, retirement
or other features and no pre-emptive rights. They have noncumulative voting
rights, which means that holders of more than 50% of shares voting for the
election of Trustees can elect 100% of the Trustees. A shareholder is entitled
to one vote for each full share held (and a fractional vote for each fractional
share held), then standing in his name on the books of the Fund.
20
<PAGE>
As of December 6, 1996, Hartnat & Co., Boston, MA held of record for the ben-
efit of NANA Regional and Coca Cola 34.6% and 27.1%, respectively of the out-
standing shares of the IRC Enhanced Index Portfolio Institutional Class Shares
for which ownership is disclaimed or presumed disclaimed. The persons or orga-
nizations owning 25% or more of the outstanding shares of a Portfolio may be
presumed to "control" (as that term is defined in the 1940 Act) such Portfolio.
As a result, those persons or organizations could have the ability to vote a
majority of the shares of the Portfolio on any matter requiring the approval of
shareholders of such Portfolio.
Annual meetings will not be held except as required by the 1940 Act and other
applicable laws. The Fund has undertaken that its Trustees will call a meeting
of shareholders if such a meeting is requested in writing by the holders of not
less than 10% of the outstanding shares of the Fund. The Fund will assist
shareholder communications in such matters.
CUSTODIAN
The Chase Manhattan Bank serves as custodian of the Fund's assets.
ACCOUNTANTS
Price Waterhouse LLP acts as the independent accountants for the Fund and au-
dits its financial statements annually.
REPORTS
Investors will receive unaudited semi-annual financial statements and annual
financial statements audited by Price Waterhouse LLP.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be made by contacting the UAM Funds Service Center
at the address or telephone number listed on the cover of this Prospectus.
LITIGATION
The Fund is not involved in any litigation.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS NOT CONTAINED IN THIS PROSPECTUS, OR IN THE PORTFOLIO'S STATEMENT OF
ADDITIONAL INFORMATION, IN CONNECTION WITH THE OFFERING MADE BY THIS PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR ITS REPRESENTATIONS MUST NOT BE RE-
LIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES NOT CON-
STITUTE AN OFFERING BY THE FUND IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY
NOT BE LAWFULLY MADE.
21
<PAGE>
UAM FUNDS -- INSTITUTIONAL CLASS SHARES
Acadian Emerging Markets Portfolio
Acadian International Equity Portfolio
BHM&S Total Return Bond Portfolio
Chicago Asset Management Intermediate Bond Portfolio
Chicago Asset Management Value/Contrarian Portfolio
C&B Balanced Portfolio
C&B Equity Portfolio
C&B Equity Portfolio for Taxable Investors
C&B Mid Cap Equity Portfolio
McKee Domestic Equity Portfolio
McKee International Equity Portfolio
McKee U.S. Government Portfolio
DSI Balanced Portfolio
DSI Disciplined Value Portfolio
DSI Limited Maturity Bond Portfolio
DSI Money Market Portfolio
FMA Small Company Portfolio
FPA Crescent Portfolio
Hanson Equity Portfolio
ICM Equity Portfolio
ICM Fixed Income Portfolio
ICM Small Company Portfolio
IRC Enhanced Index Portfolio
Jacobs International Octagon Portfolio
MJI International Equity Portfolio
Newbold's Equity Portfolio
NWQ Balanced Portfolio
NWQ Value Equity Portfolio
Rice, Hall James Small Cap Portfolio
Rice, Hall James Small/Mid Cap Portfolio
Sirach Equity Portfolio
Sirach Fixed Income Portfolio
Sirach Growth Portfolio
Sirach Short-Term Reserves Portfolio
Sirach Special Equity Portfolio
Sirach Strategic Balanced Portfolio
SAMI Preferred Stock Income Portfolio
Sterling Partners' Balanced Portfolio
Sterling Partners' Equity Portfolio
Sterling Partners' Short-Term Fixed Income Portfolio
Sterling Partners' Small Cap Portfolio
22
<PAGE>
Sterling Partners' Small Cap Value Portfolio
TS&W Balanced Portfolio
TS&W Equity Portfolio
TS&W Fixed Income Portfolio
TS&W International Equity Portfolio
23
<PAGE>
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
1-800-638-7983
Investment Adviser
Investment Research Company
16236 San Dieguito Road
Rancho Sante Fe, California 92067
Distributor
UAM FUND DISTRIBUTORS, INC.
211 Congress Street
Boston, MA 02110
PROSPECTUS
January 3, 1997
<PAGE>
[LOGO OF UAM FUNDS APPEARS HERE]
Jacobs International
Octagon Portfolio
Institutional
Class Shares
January 3, 1997
P R O S P E C T U S
<PAGE>
[LOGO OF UAM FUNDS APPEARS HERE]
UAM FUNDS SERVICE CENTER
C/O CHASE GLOBAL FUNDS SERVICES COMPANY
P.O. BOX 2798
BOSTON, MASSACHUSETTS 02208-2798
1-800-638-7983
- -------------------------------------------------------------------------------
JACOBS INTERNATIONAL
OCTAGON PORTFOLIO
INSTITUTIONAL CLASS SHARES
INVESTMENT ADVISER: JACOBS ASSET MANAGEMENT
- -------------------------------------------------------------------------------
PROSPECTUS -- JANUARY 3, 1997
UAM Funds Trust (the "Fund") is an open-end investment company known as a
"mutual fund." Each of the Portfolios that make up the Fund have different in-
vestment objectives and policies Jacobs International Octagon Portfolio cur-
rently offers only one class of shares. The securities offered in this Pro-
spectus are Institutional Class Shares of one diversified, no-load Portfolio
of the Fund managed by Jacobs Asset Management.
JACOBS INTERNATIONAL OCTAGON PORTFOLIO. The Jacobs International Octagon
Portfolio (the "Portfolio") seeks to provide long-term capital appreciation by
investing in equity securities of companies in developed and emerging markets.
The Portfolio may invest across the market capitalization spectrum, although
it intends to emphasize smaller capitalization stocks.
There can be no assurance that the Portfolio will achieve its stated objec-
tive.
Keep this Prospectus for future reference. It contains information that you
should know before you invest. A "Statement of Additional Information" ("SAI")
containing additional information about the Fund has been filed with the Secu-
rities and Exchange Commission. The SAI is dated January 3, 1997 and has been
incorporated by reference into this Prospectus. For a free copy of the SAI
contact the UAM Funds Service Center at the address or telephone number above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR A STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Fund Expenses.............................................................. 1
Prospectus Summary......................................................... 2
Risk Factors............................................................... 3
Investment Objectives...................................................... 3
Investment Policies........................................................ 3
Other Investment Policies.................................................. 6
Risks and Additional Investment Information................................ 9
Investment Limitations..................................................... 10
Purchase of Shares......................................................... 11
Redemption of Shares....................................................... 14
Shareholder Services....................................................... 16
Valuation of Shares........................................................ 17
Performance Calculations................................................... 17
Dividends, Capital Gains Distributions and Taxes........................... 18
Investment Adviser......................................................... 19
Adviser's Historical Performance........................................... 20
Administrative Services.................................................... 22
Distributor................................................................ 23
General Information........................................................ 23
UAM Funds -- Institutional Class Shares.................................... 25
</TABLE>
<PAGE>
FUND EXPENSES
The following table illustrates expenses and fees that a shareholder of the
Portfolio's Institutional Class Shares would incur. Transaction fees may be
charged if a broker-dealer or other financial intermediary deals with the Fund
on your behalf. (See "PURCHASE OF SHARES.")
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Sales Load Imposed on Purchases......................................... NONE
Sales Load Imposed on Reinvested Dividends.............................. NONE
Deferred Sales Load..................................................... NONE
Redemption Fees......................................................... NONE
Exchange Fees........................................................... NONE
</TABLE>
ESTIMATED ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
<TABLE>
<S> <C>
Investment Advisory Fees.............................................. 1.00 %
Administrative Fees................................................... 0.19 %
12b-1 Fees............................................................ NONE
Other Expenses........................................................ 0.46%
----
Total Operating Expenses.............................................. 1.65%
====
</TABLE>
The Adviser has voluntarily agreed to waive a portion of its advisory fees
and to assume expenses otherwise payable by the Portfolios to reduce expense
ratios. As of the date of this Prospectus, the Adviser has agreed to keep the
Portfolio's Institutional Class Shares from exceeding 1.75% of average daily
net assets. The Fund will not reimburse the Adviser for any advisory fees that
are waived or Portfolio expenses that the Adviser may bear on behalf of the
Portfolio for a given fiscal year.
The table above shows various expenses and fees an investor would bear di-
rectly or indirectly. The expenses and fees set forth above for the Portfolio
are based on estimates. For purposes of calculating the fees set forth above,
the table assumes that the Portfolio's average daily assets will be $25 mil-
lion.
The following example illustrates expenses a shareholder would pay on a
$1,000 investment over various time periods assuming (1) a 5% annual rate of
return and (2) redemption at the end of each time period. The Portfolio
charges no redemption fees of any kind.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
------ -------
<S> <C> <C>
Expenses...................................................... $17 $52
</TABLE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EX-
PENSES OR PERFORMANCE. ACTUAL EXPENSE MAY BE GREATER OR LESSER THAN THOSE
SHOWN ABOVE.
1
<PAGE>
PROSPECTUS SUMMARY
INVESTMENT ADVISER
Jacobs Asset Management is a registered investment adviser. Founded in 1995,
the firm currently has over $25 million in assets under management. (See "IN-
VESTMENT ADVISER.")
PURCHASE OF SHARES
Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the
"Distributor"), to investors at net asset value without a sales commission.
Share purchases may be made by sending investments directly to the Fund. The
minimum initial investment is $2,500. The minimum for subsequent investments
is $100. The minimum initial investment for IRA accounts is $500. The minimum
initial investment for spousal IRA accounts is $250. Certain exceptions to the
initial or minimum investment amounts may be made by the officers of the Fund.
(See "PURCHASE OF SHARES.")
DIVIDENDS AND DISTRIBUTIONS
The Portfolio will normally distribute substantially all of its net invest-
ment income in quarterly dividends. Any realized net capital gains will also
be distributed annually. Distributions will be reinvested in the Portfolio's
shares automatically unless an investor elects to receive cash distributions.
(See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES.")
REDEMPTIONS AND EXCHANGES
Shares of the Portfolio may be redeemed at any time, without cost, at the
net asset value of the Portfolio next determined after receipt of the redemp-
tion request. The redemption price may be more or less than the purchase
price. (See "REDEMPTION OF SHARES.")
ADMINISTRATIVE SERVICES
UAM Fund Services Inc., ("UAMFSI") a wholly-owned subsidiary of United Asset
Management Corporation, is responsible for performing and overseeing adminis-
tration, fund accounting, dividend disbursing and transfer agency services
provided to the Fund and its Portfolios by third-party service providers. (See
"ADMINISTRATIVE SERVICES.")
2
<PAGE>
RISK FACTORS
The value of the Portfolio's shares will fluctuate in response to changes in
market and economic conditions as well as the financial conditions and pros-
pects of the issuers in which the Portfolio invests. Prospective investors
should consider the following: (1) The Portfolio will invest in securities of
foreign issuers, which will be subject to additional risk factors, including
foreign currency risks, not applicable to securities of U.S. issuers; (2) The
Portfolio may invest in repurchase agreements, which entail a risk of loss
should the seller default on its action; (3) The Portfolio may lend its in-
vestment securities, which entails a risk of loss should a borrower fail fi-
nancially; (4) The Portfolio's performance may depend on the ability of the
Adviser, a relatively new entity which has not previously served as a mutual
fund adviser; however, the principals of the Adviser have substantial experi-
ence as investment advisers to mutual funds. (See "OTHER INVESTMENT POLI-
CIES.") Contact the UAM Funds Service Center at the address or telephone num-
ber on the front cover of this prospectus for a free copy of the Portfolio's
Annual Report to Shareholders.
INVESTMENT OBJECTIVES
Jacobs International Octagon Portfolio seeks to provide long-term capital
appreciation by investing in equity securities of companies in developed and
emerging markets. The Portfolio may invest across the market capitalization
spectrum, although it intends to emphasize smaller capitalization stocks.
There can be no assurance that the Portfolio will achieve its stated objec-
tive.
INVESTMENT POLICIES
In seeking its investment objective, the Portfolio will, under normal cir-
cumstances, invest at least 85% of its total assets in the equity securities
of developed and emerging markets in at least three countries outside the
United States. The amount of total assets invested in the equity securities of
emerging markets may range from a low of 15% to a high of 40%. Under normal
circumstances, approximately 50% of total assets will be invested in small
capitalization companies. Small capitalization companies are defined as those
companies with market capitalizations of less than $1 billion at the time of
purchase. Equity securities include common stock, preferred stock, convertible
preferred stock, rights and warrants, and American Depositary Receipts
("ADRs"), European Depositary Receipts ("EDRs"), and Global Depositary Re-
ceipts ("GDRs").
Under unusual circumstances, when the Adviser believes that market condi-
tions warrant a defensive position, up to 100% of the Portfolio's assets may
be held in cash and short-term investments. See "TEMPORARY INVESTMENTS" and
"REPURCHASE AGREEMENTS." When the Portfolio is in a defensive position, it may
not necessarily be pursuing its stated investment objective.
3
<PAGE>
Emerging and developed markets in which the Portfolio initially intends to
invest are listed below; however, this list is not exclusive. Investing in some
emerging companies currently is not feasible, or may involve unacceptable po-
litical risks. The Portfolio will focus its investments on those emerging mar-
ket countries in which it believes the economies are developing and in which
the markets are becoming more sophisticated. The developed and emerging coun-
tries in which the Adviser initially intends to invest include:
Argentina Hong Kong Peru
Australia Indonesia Philippines
Brazil Ireland Russia
Czech Republic Israel Singapore
Chili Italy South Korea
China Japan Spain
Denmark Malaysia Sweden
Finland Mexico Switzerland
France Netherlands Thailand
Great Britain Norway
An "emerging country" security is one issued by a company that, in the opin-
ion of the Adviser, has one or more of the following characteristics: (i) its
principal securities trading market is in an emerging country, (ii) alone or on
a consolidated basis it derives 50% or more of its annual revenue from either
goods produced, sales made or services performed in emerging countries, or
(iii) it is organized under the laws of, and has a principal office in, an
emerging country. The Adviser will base determinations as to eligibility on
publicly available information and inquiries made to the companies. (See "FOR-
EIGN INVESTMENTS.")
There are no predetermined investment limitations with respect to any one
country, but the Adviser expects to limit investments within a country in ac-
cordance with the Adviser's perception of risks in that country. Generally, the
Portfolio will invest in the equity securities of non-U.S. companies listed on
U.S. or foreign securities exchanges, but may also invest in securities traded
over-the-counter. The Portfolio seeks to invest in companies that the Adviser
believes will benefit from global trends, promising business or product devel-
opments and specific country opportunities resulting from changing economic,
social and political trends. It is expected that investments will be diversi-
fied throughout the world and within markets to minimize specific country and
currency risks. As markets in other countries develop, the Portfolio expects to
expand and further diversify the emerging countries in which it invests.
The Adviser will use a flexible, value-oriented approach to selecting the
Portfolio's investments. The Adviser will focus on companies rather than on
countries or markets. The goal is to identify stocks selling at the greatest
discount to their intrinsic future value. In attempting to identify value
across disparate economies in
4
<PAGE>
the international marketplace, a rigid adherence to a single model results in
missed opportunities. Therefore, the Adviser ascertains value in a variety of
measures, including price/cash flow, enterprise value/cash flow, and
price/future earnings to identify the companies it will consider for invest-
ment. The Adviser's stock picking approach is used across a full capitalization
range which takes advantage of the opportunities in smaller capitalization com-
panies. Investments generally will be held by the Portfolio for two to five
years.
The Portfolio does not intend to invest in any security in a country where
the currency is not freely convertible to United States dollars, unless the
Portfolio has obtained the necessary governmental licensing to convert such
currency or other appropriately licensed or sanctioned contractual guarantee to
protect such investment against loss of that currency's external value, or the
Portfolio has a reasonable expectation at the time the investment is made that
such governmental licensing or other appropriately licensed or sanctioned guar-
antee would be obtained or that the currency in which the security is quoted
would be freely convertible at the time of any proposed sale of the security by
the Portfolio.
The Portfolio intends to purchase and hold securities for long-term capital
appreciation and normally does not expect to trade for short-term gain. Accord-
ingly, it is anticipated that the annual portfolio turnover rate normally will
not exceed 100%, although in any particular year, market conditions could re-
sult in portfolio activity at a greater or lesser rate than anticipated. The
rate of portfolio turnover will not be a limiting factor when the Portfolio
deems it appropriate to purchase or sell securities. However, the U.S. federal
tax requirement that the Portfolio derive less than 30% of its gross income
from the sale or disposition of securities held less than three months may
limit the Portfolio's ability to dispose of its securities.
DEPOSITARY RECEIPTS. The Portfolio may invest directly in securities of
emerging and developed country issuers through sponsored or unsponsored ADRs,
EDRs, and GDRs. ADRs are depositary receipts typically used by a U.S. bank or
trust company which evidence ownership of underlying securities issued by a
foreign corporation. EDRs and GDRs are typically issued by foreign banks or
trust companies, although they also may be issued by U.S. banks or trust compa-
nies and evidence ownership of underlying securities issued by either a foreign
or a United States corporation. Generally, depositary receipts in registered
form are designed for use in the U.S. securities market and depositary receipts
in bearer form are designed for use in securities markets outside the United
States. Depositary receipts may not necessarily be denominated in the same cur-
rency as the underlying securities into which they may be converted.
INVESTMENT FUNDS. Some countries have laws and regulations that currently
preclude direct foreign investment in the securities of their companies. Howev-
er, indirect foreign investment in the securities of companies listed and
traded on the stock exchanges in these countries is permitted through invest-
ment funds which
5
<PAGE>
have been specifically authorized. The Portfolio may invest in these invest-
ment funds subject to the provisions of the 1940 Act and other applicable law
as discussed below under "INVESTMENT LIMITATIONS." If the Portfolio invests in
such investment funds, the Portfolio's shareholders will bear not only their
proportionate share of the expenses of the Portfolio (including operating ex-
penses and the fees of the Adviser), but also will indirectly bear similar ex-
penses of the underlying investment funds.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. The Portfolio may enter into
forward foreign currency exchange contracts. Forward foreign currency exchange
contracts provide for the purchase or sale of an amount of a specified foreign
currency at a future date. The general purpose of these contracts is both to
put currencies in place to settle trades and to generally protect the United
States dollar value of securities held by the Portfolio against exchange rate
fluctuation. While such forward contracts may limit losses to the Portfolio as
a result of exchange rate fluctuation, they will also limit any gains that may
otherwise have been realized. The Portfolio will enter into such contracts
only to protect against the effects of fluctuating rates of currency exchange
and exchange control regulations. (See "FOREIGN INVESTMENTS.")
TEMPORARY INVESTMENTS. During periods in which the Adviser believes changes
in economic, financial or political conditions make it advisable, the Portfo-
lio may for temporary defensive purposes reduce its holdings in equity and
other securities and invest in certain short-term (less than twelve months to
maturity) and medium-term (not greater than five years to maturity) debt secu-
rities or may hold cash. (See "SHORT-TERM INVESTMENTS.")
OTHER INVESTMENT POLICIES
SHORT-TERM INVESTMENTS
In order to earn a return on uninvested assets, meet anticipated redemp-
tions, or for temporary defensive purposes, the Portfolio may invest a portion
of its assets in domestic and foreign money market instruments including cer-
tificates of deposit, bankers' acceptances, time deposits, U.S. Government ob-
ligations, U.S. Government agency securities, short-term corporate debt secu-
rities, and commercial paper rated A-1 or A-2 by Standard & Poor's Corporation
or Prime-1 or Prime-2 by Moody's Investors Service, Inc. or if unrated, deter-
mined by the Adviser to be of comparable quality.
Time deposits maturing in more than seven days will not be purchased by the
Portfolio, and time deposits maturing from two business days through seven
calendar days will not exceed 10% of the total assets of the Portfolio. The
Portfolio will not invest in any security issued by a commercial bank unless
(i) the bank has total assets of at least $1 billion, or the equivalent in
other currencies, (ii) in the case of
6
<PAGE>
U.S. banks, it is a member of the Federal Deposit Insurance Corporation, and
(iii) in the case of foreign branches of U.S. banks, the security is, in the
opinion of the Adviser, of an investment quality comparable with other debt se-
curities which may be purchased by the Portfolio.
The Fund has received permission from the Securities and Exchange Commission
(the "SEC") to deposit the daily uninvested cash balances of the Fund's Portfo-
lios, as well as cash for investment purposes, into one or more joint accounts
and to invest the daily balance of the joint accounts in the following short-
term investments: fully collateralized repurchase agreements, interest-bearing
or discounted commercial paper including dollar-denominated commercial paper of
foreign issuers, and any other short-term money market instruments including
variable rate demand notes and tax-exempt money instruments. By entering into
these investments on a joint basis, it is expected that a Portfolio may earn a
higher rate of return on investments relative to what it could earn individual-
ly.
The Fund has received permission from the SEC for each of its Portfolios to
invest, for cash management purposes, the greater of 5% of its total assets or
$2.5 million in the Fund's DSI Money Market Portfolio. (See "INVESTMENT
COMPANIES.")
REPURCHASE AGREEMENTS
The Portfolio may invest in repurchase agreements collateralized by U.S. Gov-
ernment securities, certificates of deposit, and certain bankers' acceptances
and other securities outlined above under "SHORT-TERM INVESTMENTS." In a repur-
chase agreement, the Portfolio buys a security and simultaneously commits to
sell that security back at an agreed upon price plus an agreed upon market rate
of interest. Under a repurchase agreement, the seller is required to maintain
the value of securities subject to the agreement at not less than 100% of the
repurchase price. The Administrator and the Adviser will mark to market daily
the value of the securities purchased. The use of repurchase agreements in-
volves certain risks. For example, a default by the seller of the agreement may
cause the Portfolio to experience a loss or delay in the liquidation of the
collateral securing the repurchase agreement. The Portfolio might also incur
disposition costs in liquidating the collateral. While the Fund's management
acknowledges these risks, it is expected that they can be controlled through
stringent security selection criteria and careful monitoring procedures. The
Fund has received permission from the SEC to pool daily uninvested cash bal-
ances of the Fund's Portfolios in order to invest in repurchase agreements on a
joint basis. By entering into joint repurchase agreements, the Portfolio may
incur lower transactions costs and earn higher rates of interest on joint re-
purchase agreements. The Portfolio's contribution would determine its return
from a joint repurchase agreement. (See "SHORT-TERM INVESTMENTS.")
7
<PAGE>
LENDING OF SECURITIES
The Portfolio may lend its investment securities to qualified institutional
investors as a means of earning income. The Portfolio will not loan securities
to the extent that greater than one-third of its assets at fair market value
would be committed to loans. During the term of a loan, the Portfolio is sub-
ject to a gain or loss depending on any increase or decrease in the market
price of the securities loaned. Lending of securities is subject to review by
the Fund's Board of Trustees. All relevant facts and circumstances, including
the creditworthiness of the broker, dealer or institution, will be considered
in making decisions about securities lending.
An investment company may pay reasonable negotiated fees in connection with
loaned securities so long as such fees are set forth in a written contract and
approved by its Board of Trustees. The Portfolio will continue to retain any
voting rights with respect to loaned securities. If a material event occurs af-
fecting an investment on loan, the loan must be called and the securities vot-
ed.
PORTFOLIO TURNOVER
Portfolio turnover is not anticipated to exceed 100%. In addition to Portfo-
lio trading costs, higher rates of portfolio turnover may result in the reali-
zation of capital gains. (See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAX-
ES" for more information on taxation). The Portfolio will not normally engage
in short-term trading, but reserves the right to do so.
INVESTMENT COMPANIES
The Portfolio reserves the right to invest up to 10% of its total assets,
calculated at the time of investment, in the securities of other open-end or
closed-end investment companies. No more than 5% of the investing Portfolio's
total assets may be invested in the securities of any one investment company
nor may it acquire more than 3% of the voting securities of any other invest-
ment company. The Portfolio will indirectly bear its proportionate share of any
management fees paid by an investment company in which it invests in addition
to the advisory fee paid by the Portfolio.
The Fund has received permission from the SEC to allow each of its Portfolios
to invest, for cash management purposes, the greater of 5% of its total assets
or $2.5 million in the Fund's DSI Money Market Portfolio provided that the in-
vestment is consistent with the Portfolio's investment policies and restric-
tions. Based upon a Portfolio's assets invested in the DSI Money Market Portfo-
lio, the investing Portfolio's adviser will waive its investment advisory fee
and any other fees earned as a result of the Portfolio's investment in the DSI
Money Market Portfolio. The investing Portfolio will bear expenses of the DSI
Money Market Portfolio on the same basis as all of its other shareholders.
8
<PAGE>
RISKS AND ADDITIONAL INVESTMENT INFORMATION
FOREIGN INVESTMENTS
Investment in securities of foreign issuers, including ADRs, generally in-
volves more risk than investment in the securities of domestic issuers. In ad-
dition, investment in small capitalization securities involves greater risk
than larger, more mature issuers. Such smaller companies may have limited prod-
uct lines, markets or financial resources, and their securities may trade less
frequently and in more limited volume than those of larger, more mature compa-
nies. As a result, the prices of their securities may fluctuate more than those
of larger issuers.
There may be limited publicly available information with respect to foreign
issuers, and foreign issuers are not generally subject to uniform accounting,
auditing and financial standards and requirements comparable to those applica-
ble to domestic companies. Therefore, disclosure of certain material informa-
tion may not be made and less information may be available to investors invest-
ing in emerging countries than in the United States. There may also be less
government supervision and regulation of foreign securities exchanges, brokers
and listed companies than in the United States. Many foreign securities markets
have substantially less volume than United States national securities ex-
changes, and securities of some foreign issuers are less liquid and more vola-
tile than securities of comparable domestic issuers and lack a secondary trad-
ing market. Brokerage commissions and other transactions costs on foreign secu-
rities exchanges are generally higher than in the United States. Dividends and
interest paid by foreign issuers may be subject to withholding and other for-
eign taxes which may decrease the net return on foreign investments as compared
to dividends and interest paid by domestic companies. Additional risks include
future political and economic developments, the possibility that a foreign ju-
risdiction might impose or change withholding taxes on income payable with re-
spect to foreign securities, and the possible adoption of foreign governmental
restrictions such as exchange controls.
Prior governmental approval for foreign investments may be required under
certain circumstances in some emerging countries, and the extent of foreign in-
vestment in domestic companies may be subject to limitation in other emerging
countries. Foreign ownership limitations also may be imposed by the charters of
individual companies in emerging countries to prevent, among other concerns,
violation of foreign investment limitations. The Portfolio may encounter diffi-
culties or be unable to vote proxies, exercise shareholder rights, pursue legal
remedies and obtain judgments in foreign courts. Also, some countries may with-
hold portions of income and dividends at the source. These considerations gen-
erally are more of a concern in developing countries, where the possibility of
political instability (including the risk of war) and dependence on foreign
economic assistance may be greater than in developed countries. Investments in
companies domiciled in emerg
9
<PAGE>
ing countries, therefore, may be subject to potentially higher risks than in-
vestments in developed countries.
Repatriation of investment income, capital and proceeds of sales by foreign
investors may require governmental registration and/or approval in some emerg-
ing countries. The Portfolio could be adversely affected by delays in or a re-
fusal to grant any required governmental registration or approval for such re-
patriation. Any investment subject to such repatriation controls will be con-
sidered illiquid if it appears reasonably likely that this process will take
more than seven days.
The economies of individual emerging countries may differ favorably or unfa-
vorably from the United States economy in such respect as growth of gross do-
mestic product, rate of inflation, currency depreciation, capital reinvestment,
resource self-sufficiency and balance of payments position. Further, the econo-
mies of developing countries generally are heavily dependent upon international
trade and, accordingly, have been and may continue to be adversely affected by
trade barriers, exchange controls, managed adjustments in relative currency
values and other protectionist measures imposed or negotiated by the countries
with which they trade. These economies also have been and may continue to be
adversely affected by economic conditions in the countries with which they
trade.
Investments in securities of foreign issuers are frequently denominated in
foreign currencies, and since the Portfolio may temporarily hold uninvested re-
serves in bank deposits in foreign currencies, the value of the Portfolio's as-
sets as measured in U.S. dollars may be affected favorably or unfavorably by
changes in currency rates and in exchange controls regulations. Thus, the Port-
folio may incur costs in connection with conversions between various curren-
cies.
INVESTMENT LIMITATIONS
The Portfolio will not:
(a) with respect to 75% of its assets, invest more than 5% of its total
assets at the time of purchase in the securities of any single issuer
(other than obligations issued or guaranteed as to principal and in-
terest by the U.S. Government or any of its agencies or instrumental-
ities);
(b) with respect to 75% of its assets, purchase more than 10% of any
class of the outstanding voting securities of any issuer;
(c) invest more than 5% of its assets at the time of purchase in the se-
curities of companies that have (with predecessors) a continuous op-
erating history of less than 3 years;
(d) invest more than 25% of its assets in companies within a single in-
dustry; however, there are no limitations on investments made in in-
struments issued or guaranteed by the U.S. Government and its agen-
cies.
10
<PAGE>
(e) make loans except by purchasing debt securities in accordance with
its investment objective and policies or entering into repurchase
agreements or by lending its portfolio securities to banks, brokers,
dealers and other financial institutions so long as the loans are
made in compliance with the 1940 Act, as amended, or the Rules and
Regulations or interpretations of the SEC;
(f) (i) borrow, except from banks and as a temporary measure for extraor-
dinary or emergency purposes and then, in no event, in excess of 33
1/3% of the Portfolio's gross assets valued at the lower of market or
cost, and (ii) a Portfolio may not purchase additional securities
when borrowings exceed 5% of total assets; or
(g) pledge, mortgage or hypothecate any of its assets to an extent
greater than 33 1/3% of its total assets at fair market value.
The Portfolio's investment objective and investment limitations (a), (b),
(d), (e) and (f)(i) listed above are fundamental policies and may be changed
only with the approval of the holders of a majority of the outstanding voting
securities of the Portfolio. The other investment limitations described here
and those not specified as fundamental in the SAI as well as the Portfolio's
investment policies are not fundamental and the Fund's Board of Trustees may
change them without shareholder approval. The sale of instruments is not re-
quired in the event of a subsequent change in circumstances.
PURCHASE OF SHARES
Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the
"Distributor"), without a sales commission at the net asset value per share
next determined after an order is received by the Fund and payment is received
by the Custodian. (See "VALUATION OF SHARES.") The minimum initial investment
required is $2,500. The minimum initial investment for IRA accounts is $500.
The minimum initial investment for spousal IRA accounts is $250. Certain excep-
tions may be made by the officers of the Fund.
Shares of the Portfolio may be purchased by customers of brokers-dealers or
other financial intermediaries ("Service Agents") which have established a
shareholder servicing relationship with the Fund on behalf of their customers.
Service Agents may impose additional or different conditions on purchases or
redemptions of Portfolio shares and may charge transaction or other account
fees. Each Service Agent is responsible for transmitting to its customers a
schedule of any such fees and information regarding additional or different
purchase or redemption conditions. Shareholders who are customers of Service
Agents should consult their Service Agent for information regarding these fees
and conditions. Amounts paid to Service Agents may include transaction fees
and/or service fees paid by the Fund
11
<PAGE>
from the Fund assets attributable to the Service Agent, which would not be im-
posed if shares of the Portfolio were purchased directly from the Fund or the
Distributor. Service Agents may provide shareholder services to their customers
that are not available to a shareholder dealing directly with the Fund. A
salesperson and any other person entitled to receive compensation for selling
or servicing Portfolio shares may receive different compensation with respect
to one particular class of shares over another in the Fund.
Service Agents may enter confirmed purchase orders on behalf of their custom-
ers. If shares of the Portfolio are purchased in this manner, the Service Agent
must receive your investment order before the close of trading on the New York
Stock Exchange ("NYSE"), and transmit it to the Fund's Sub-Transfer Agent prior
to 4 p.m. to receive that day's share price. Proper payment for the order must
be received by the Sub-Transfer Agent no later than the time when the Portfolio
is priced on the following business day. Service Agents are responsible to
their customers and the Fund for timely transmission of all subscription and
redemption requests, investment information, documentation and money.
INITIAL INVESTMENTS
BY MAIL
. Complete and sign an Application and mail it together with a check made
payable to UAM Funds to:
UAM Funds Trust
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
Payment for purchases of shares received by mail will be credited to an ac-
count at the next share price calculated for the Portfolio after receipt. Pay-
ment does not need to be converted into Federal Funds (monies credited to the
Fund's Custodian Bank by a Federal Reserve Bank) before the Fund will accept it
for investment.
BY WIRE
. Telephone the UAM Funds Service Center and provide the account name, ad-
dress, telephone number, social security or taxpayer identification num-
ber, Portfolio selected, amount being wired and the name of the bank
wiring the funds. An account number will then be provided to you. Next,
.instruct your bank to wire the specified amount to the Fund's Custodian:
12
<PAGE>
The Chase Manhattan Bank
ABA #021000021
UAM Funds
DDA Acct. #9102772952
Ref: Portfolio Name
Your Account Number
Your Account Name
Wire Control Number
. Forward a completed Application to the Fund at the address shown on the
form. Federal Funds purchases will be accepted only on a day on which
both the NYSE and the Custodian Bank are open for business.
ADDITIONAL INVESTMENTS
Additional investments can be made at any time. The minimum additional in-
vestment is $100. Shares can be purchased at net asset value by mailing a check
made payable to "UAM Funds" to the above address or by wiring money to the Cus-
todian Bank using the instructions outlined above. When making additional in-
vestments, be sure that the account number, account name and the Portfolio to
be purchased are identified on the check or wire. Prior to wiring additional
investments, notify the UAM Funds Service Center by calling the number on the
cover of this Prospectus. Mail orders should include, when possible, the "In-
vest by Mail" stub which accompanies any Fund confirmation statement.
OTHER PURCHASE INFORMATION
Investments received by 4 p.m. ET (the close of the NYSE) will be invested at
the share price calculated after the NYSE closes on that day. Investments re-
ceived after the close of the NYSE will be executed at the price computed on
the next day the NYSE is open. The Fund reserves the right, in its sole discre-
tion, to suspend the offering of shares of the Portfolio or to reject purchase
orders when, in the judgment of management, such suspension or rejection is in
the best interests of the Fund. Purchases of the Portfolio's shares will be
made in full and fractional shares of the Portfolio calculated to three decimal
places. Certificates for fractional shares will not be issued. Certificates for
whole shares will not be issued except at the written request of the sharehold-
er.
IN-KIND PURCHASES
If accepted by the Fund, shares of the Portfolio may be purchased in exchange
for securities which are eligible for acquisition by the Portfolio, as de-
scribed in this Prospectus. Securities to be exchanged which are accepted by
the Fund will be valued as described under "VALUATION OF SHARES" at the next
determination of net asset value after acceptance. Shares issued by the Portfo-
lio in exchange for securities will be issued at net asset value determined as
of the same time. All dividends, interest, subscription, or other rights per-
taining to such securities shall
13
<PAGE>
become the property of the Portfolio and must be delivered to the Fund by the
investor upon receipt from the issuer. Securities acquired through an in-kind
purchase will be acquired for investment and not for immediate resale.
The Fund will not accept securities in exchange for shares of the Portfolio
unless:
. at the time of exchange, such securities are eligible to be in-
cluded in the Portfolio (current market quotations must be readily
available for such securities);
. the investor represents and agrees that all securities offered to
be exchanged are liquid securities and not subject to any restric-
tions upon their sale by the Portfolio under the Securities Act of
1933, or otherwise; and
. the value of any such securities (except U.S. Government securi-
ties) being exchanged together with other securities of the same
issuer owned by the Portfolio will not exceed 5% of the net assets
of the Portfolio immediately after the transaction.
Investors who are subject to Federal taxation upon exchange may realize a
gain or loss for Federal income tax purposes depending upon the cost of securi-
ties or local currency exchanged. Investors interested in such exchanges should
contact the Adviser.
REDEMPTION OF SHARES
Shares of the Portfolio may be redeemed by mail or telephone at any time,
without cost, at the net asset value of the Portfolio next determined after re-
ceipt of the redemption request. No charge is made for redemptions. Any redemp-
tion may be more or less than the purchase price of the shares depending on the
market value of investment securities held by the Portfolio.
BY MAIL
Address requests for redemption to the UAM Funds Service Center. Requests to
redeem shares must include:
. share certificates, if issued;
. a letter of instruction or an assignment specifying the number of
shares or dollar amount to be redeemed, signed by all registered
owners of the shares in the exact names in which they are regis-
tered;
. any required signature guarantees (see "SIGNATURE GUARANTEES"); and
. any other necessary legal documents, if required, in the case of
estates, trusts, guardianships, custodianships, corporations, pen-
sion and profit sharing plans and other organizations.
14
<PAGE>
BY TELEPHONE
A redemption request by telephone requires the following:
. establish the telephone redemption privilege (and if desired, the
wire redemption privilege) by completing appropriate sections of
the Application; and
. call the Fund and instruct that the redemption proceeds be mailed
to you or wired to your bank.
The following tasks cannot be accomplished by telephone:
. changing the name of the commercial bank or the account designated
to receive redemption proceeds (this can be accomplished only by a
written request signed by each shareholder, with each signature
guaranteed);
. redemption of certificated shares by telephone.
The Fund and its Sub-Transfer Agent will employ reasonable procedures to con-
firm that instructions communicated by telephone are genuine, and they may be
liable for any losses if they fail to do so. These procedures include requiring
the investor to provide certain personal identification at the time an account
is opened, as well as prior to effecting each transaction requested by tele-
phone. In addition, all telephone transaction requests will be recorded and in-
vestors may be required to provide additional telecopied written instructions
of such transaction requests. The Fund or Sub-Transfer Agent may be liable for
any losses due to unauthorized or fraudulent telephone instructions if the Fund
or the Sub-Transfer Agent do not employ the procedures described above. Neither
the Fund nor the Sub-Transfer Agent will be responsible for any loss, liabili-
ty, cost or expense for following instructions received by telephone that it
reasonably believes to be genuine.
SIGNATURE GUARANTEES
Signature guarantees are required for the following redemptions:
. redemptions where the proceeds are to be sent to someone other than
the registered shareowner(s);
. redemptions where the proceeds are to be sent to someplace other
than the registered address; or
. share transfer requests.
Signature guarantees will be accepted from any eligible guarantor institution
which participates in a signature guarantee program. Eligible guarantor insti-
tutions include banks, brokers, dealers, credit unions, national securities ex-
changes, registered securities associations, clearing agencies and savings as-
sociations. Broker-dealers guaranteeing signatures must be a member of a clear-
ing corporation or
15
<PAGE>
maintain net capital of at least $100,000. Credit unions must be authorized to
issue signature guarantees.
OTHER REDEMPTION INFORMATION
Normally, the Fund will make payment for all shares redeemed under proper
procedures within one business day of and no more than seven days after the re-
ceipt of the request, or earlier if required under applicable law. The Fund may
suspend the right of redemption or postpone the date at times when both the
NYSE and Custodian Bank are closed, or under any emergency circumstances deter-
mined by the SEC.
If the Board of Trustees determines that it would be detrimental to the best
interests of remaining shareholders of the Fund to make payment wholly or
partly in cash, the Fund may pay redemption proceeds in whole or in part by a
distribution in-kind of liquid securities held by the Portfolio in lieu of cash
in conformity with applicable rules of the SEC. Investors may incur brokerage
charges on the sale of portfolio securities received in payment of redemptions.
SHAREHOLDER SERVICES
EXCHANGE PRIVILEGE
Institutional Class Shares of the Portfolio may be exchanged for Institu-
tional Class Shares of any other UAM Funds Portfolio. (See the list of Portfo-
lios of the UAM Funds at the end of this Prospectus.) Exchange requests should
be made by contacting the UAM Funds Service Center.
Any exchange will be based on the net asset value of the shares involved.
There is no sales commission or charge of any kind for an exchange. Before mak-
ing an exchange into the Portfolio, a shareholder should read its Prospectus
and consider the investment objectives of the Portfolio to be purchased. Call
the UAM Funds Service Center for a copy of the Prospectus for the Portfolio(s)
in which you are interested. Exchanges can only be made with Portfolios that
are qualified for sale in a shareholder's state of residence.
Exchange requests may be made either by mail or telephone. Telephone ex-
changes will be accepted only if the certificates for the shares to be ex-
changed have not been issued to the shareholder and if the registration of the
two accounts will be identical. Requests for exchanges received prior to 4 p.m.
(ET) will be processed as of the close of business on the same day. Requests
received after 4 p.m. will be processed on the next business day. The Board of
Trustees may limit the frequency and amount of exchanges permitted. For addi-
tional information regarding responsibility for the authenticity of telephoned
instructions, see "REDEMPTION OF SHARES -- BY TELEPHONE". An exchange into an-
other UAM Funds Portfolio is a sale of shares and may result in a gain or loss
for income tax purposes. The Fund may modify or terminate the exchange privi-
lege at any time.
16
<PAGE>
VALUATION OF SHARES
The net asset value of the Portfolio is determined by dividing the value of
the Portfolio's assets, less any liabilities, by the number of shares outstand-
ing. The net asset value per share of the Portfolio is determined as of the
close of the NYSE on each day that the NYSE is open for business.
Equity securities listed on a securities exchange for which market quotations
are readily available are valued at the last quoted sale price of the day.
Price information on listed securities is taken from the exchange where the se-
curity is primarily traded. Unlisted equity securities and listed securities
not traded on the valuation date for which market quotations are readily avail-
able are valued neither exceeding the current asked prices nor less than the
current bid prices. Quotations of foreign securities in a foreign currency are
converted to U.S. dollar equivalents. The converted value is based upon the bid
price of the foreign currency against U.S. dollars quoted by any major bank or
by a broker.
The value of other assets and securities for which no quotations are readily
available (including restricted securities) is determined in good faith at fair
value using methods determined by the Trustees.
PERFORMANCE CALCULATIONS
The Portfolio measures performance by calculating yield and total return.
Both yield and total return figures are based on historical earnings and are
not intended to indicate future performance.
Total return is the change in value of an investment in the Portfolio over a
given period, assuming reinvestment of any dividends and capital gains. A cumu-
lative or aggregate total return reflects actual performance over a stated pe-
riod of time. An average annual total return is a hypothetical rate of return
that, if achieved annually, would have produced the same cumulative total re-
turn if performance had been constant over the entire period.
The Portfolio's performance may be compared to data prepared by independent
services which monitor the performance of investment companies, data reported
in financial and industry publications, and various indices as further de-
scribed in the Portfolio's SAI. This information may also be included in sales
literature and advertising.
The Portfolio's Annual Report to Shareholders for the most recent fiscal year
end contains additional performance information that includes comparisons with
appropriate indices. The Annual Report is available without charge. Contact the
UAM Funds Service Center at the address or telephone number on the cover of
this Prospectus.
17
<PAGE>
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
The Portfolio will normally distribute substantially all of its net invest-
ment income (for tax purposes) to shareholders in quarterly dividends. If any
net capital gains are realized, the Portfolio will normally distribute such
gains annually. All dividends and capital gains distributions will be automati-
cally reinvested in shares of the Portfolio unless the Fund is notified in
writing that the shareholder elects to receive the distributions in cash.
FEDERAL TAXES
The Portfolio intends to qualify as a "regulated investment company" under
subchapter M of the Internal Revenue Code of 1986, as amended, for federal in-
come tax purposes and to meet all other requirements that are necessary for it
(but not its shareholders) to be exempt from federal taxes on income and gains
paid to shareholders in the form of dividends. To do this, the Portfolio must,
among other things, distribute substantially all of its ordinary income and net
capital gains on an annual basis and maintain a portfolio of investments which
satisfies certain diversification criteria.
Dividends paid by the Portfolio from net investment income, whether in cash
or reinvested in shares, are taxable to shareholders as ordinary income. Short-
term capital gains will be taxed as ordinary income. Long-term capital gains
distributions are taxed as long-term capital gains. Shareholders will be noti-
fied annually of dividend income earned for tax purposes.
Dividends declared in October, November and December to shareholders of rec-
ord in such a month will be treated as if they had been paid by the Fund and
received by the shareholders on December 31 of the same calendar year, provided
that the dividends are paid before February of the following year.
The Fund is required by Federal law to withhold 31% of reportable payments
paid to shareholders who have not complied with IRS regulations. In order to
avoid this withholding requirement, you must certify that your Social Security
or Taxpayer Identification Number you have provided is correct and that either
you are not currently subject to backup withholding or you are exempt from
backup withholding. This certification must be made on the Application or on a
separate form supplied by the Fund.
Dividends and interest received by the Portfolio may give rise to withholding
and other taxes imposed by foreign countries. These taxes reduce the Portfo-
lio's dividends but are included in the taxable income reported on your tax
statement if the Portfolio qualifies for this tax treatment and elects to pass
it through to you. Consult a tax adviser for more information regarding deduc-
tions and credits for foreign taxes.
18
<PAGE>
INVESTMENT ADVISER
Jacobs Asset Management (the "Adviser") is a Delaware limited partnership and
is a registered investment adviser formed in July 1995. Its business offices
are located at 20 East Broward Boulevard, Suite 1920, Fort Lauderdale, FL
33301. The Adviser provides and offers investment management and advisory serv-
ices to corporations, unions, pensions and profit-sharing plans, trusts, es-
tates and other institutions and investors. Although the Adviser is a rela-
tively new entity, the principals of the Adviser, who are also the portfolio
managers of the Portfolio, have substantial experience as investment advisers
to mutual funds. As of the date of this Prospectus, the Adviser currently had
over $25 million in assets under management.
UAM is a limited partner of the Adviser and owns a controlling interest in
the Adviser.
The Portfolio pays an annual fee in monthly installments to the Adviser for
advisory services. This fee is accrued daily and paid every month as a percent-
age of the average net assets in the Portfolio for that month. The percentage
fee on an annual basis is 1.00%.
The Adviser may compensate its affiliated companies for referring investors
to the Portfolio. The Distributor, UAM, the Adviser, or any of their affili-
ates, may, at its own expense, compensate a Service Agent or other person for
marketing, shareholder servicing, record-keeping and/or other services per-
formed with respect to the Fund, a Portfolio or any Class of Shares. Payments
made for any of these purposes may be made from its revenues, its profits or
any other source available to it. When such service arrangements are in effect,
they are made generally available to all qualified service providers.
The Distributor, the Adviser and certain of their other affiliates also par-
ticipate, at the date of this Prospectus, in an arrangement with Smith Barney,
Inc. under which Smith Barney provides certain defined contribution plan mar-
keting and other shareholder services of its Consulting Group and receives .15
of 1% of the daily net asset value of Institutional Class Shares held by Smith
Barney's eligible customer accounts in addition to amounts payable to all sell-
ing dealers. The Fund also compensates Smith Barney for services it provides to
certain defined contribution plan shareholders that are not otherwise provided
by the Administrator.
The investment professionals at the Adviser who comprise the Investment Com-
mittee, and who are responsible for the day-to-day management of the Portfolio,
and their qualifications are as follows:
DANIEL L. JACOBS, CFA, PRESIDENT. Mr. Jacobs managed $3.4 billion in interna-
tional and global equity portfolios as Executive Vice President and Di-
19
<PAGE>
rector of Templeton Investment Counsel from 1984 to 1995. Mr. Jacobs was Port-
folio Manager of Templeton's $1.4 billion Smaller Companies Growth Fund and was
a Senior Portfolio Manager of institutional separate accounts. Mr. Jacobs
served as President of the Templeton Variable Annuity Fund and Portfolio Man-
ager for the Equity and the equity portion of the Balanced Funds in the Temple-
ton Variable Annuity Series.
Prior to joining Templeton, he was Vice President/Portfolio Manager, Institu-
tional Investment Group and International Division of the First National Bank
of Atlanta from 1976 to 1984. Mr. Jacobs received an MBA in Finance from Emory
University (1976) and a BA in Economics from Miami University (1974). In addi-
tion to holding a CFA and CIC, Mr. Jacobs is a founding member of the Interna-
tional Society of Financial Analysts.
WAI W. CHIN, MANAGING DIRECTOR, ASIAN RESEARCH AND PORTFOLIO MANAGEMENT. Ms.
Chin was formerly Vice President, of the Global Equity Group of Scudder, Ste-
vens & Clark, where she spent over five years as a Pacific Basin analyst, spe-
cializing in the developed and emerging markets of Asia. She started her re-
search analyst career at Baron Capital, Inc. and was a foreign currency trader
at the Bank of America and Creditanstalt Banverein. Ms. Chin holds a BA in East
Asian Studies from Barnard College and received an MBA in Finance from Columbia
University.
ROBERT J. JURGENS, MANAGING DIRECTOR, EUROPEAN RESEARCH AND PORTFOLIO
MANAGEMENT. As Vice President and head of AIG Global Investors' International
Equity Division from 1993 to 1995, Mr. Jurgens was responsible for investment
policy and management of international and global equity portfolios. He has
twelve years of experience investing in the global stock markets, with particu-
lar expertise in the European markets. Upon graduation from Pennsylvania State
University with a BS in Business/French, Mr. Jurgens spent four years with
Scandinavian Bank Group as a Global Portfolio Manager/Analyst, three years with
Nomura Bank International in London managing global equities, and two years as
an International Equity Manager at the privately held Antessa Investment Man-
agement Limited.
ADVISER'S HISTORICAL PERFORMANCE
Below are certain performance data provided by the Adviser pertaining to a
registered, open-end investment company ("mutual fund") that was managed by Mr.
Jacobs with substantially similar (although not necessarily identical) objec-
tives, policies, and strategies as those of the Portfolio. The investment re-
turns of the Portfolio may differ from those of the mutual fund because fees
and expenses of the mutual fund may differ from those of the Portfolio. During
Mr. Jacobs' tenure as the portfolio manager of the mutual fund, he was primar-
ily responsible for the day-to-day management of the mutual fund, and no other
person had a
20
<PAGE>
significant role in achieving the mutual fund's performance. The Portfolio and
the mutual fund are separate funds, and are members of different families of
investment companies. The results presented are not intended to predict or sug-
gest the return to be experienced by the Portfolio or the return an investor
might achieve by investing in the Portfolio.
MUTUAL FUND CUMULATIVE RETURNS
ENDED JUNE 30, 1995
<TABLE>
<CAPTION>
THREE YEARS
YEAR ENDED ENDED
JUNE 30, 1995 JUNE 30, 1995
------------- -------------
<S> <C> <C>
Templeton International Fund................... 11.43% 14.55%
Lipper International Index..................... 0.95% 7.22%
Morgan Stanley Capital International ("MSCI")
EAFE Index US$............................... 1.66% 12.68%
</TABLE>
- -----------
Notes:
1. The mutual fund managed by Mr. Jacobs was the Templeton International Fund
of the Templeton Variable Products Series Fund. Mr. Jacobs was the lead
portfolio manager for that mutual fund from inception, May 1, 1992, to
June 30, 1995.
JACOBS ASSET MANAGEMENT HISTORICAL PERFORMANCE
Set forth below is certain performance data provided by the Adviser pertain-
ing to the composite of separately managed accounts of the Adviser that are
managed with substantially similar (although not necessarily identical) objec-
tives, policies and strategies as those of the Portfolio. The investment re-
turns of the Portfolio may differ from those of the separately managed accounts
because such separately managed accounts may have fees and expenses that differ
from those of the Portfolio. Further, the separately managed accounts are not
subject to investment limitations, diversification requirements and other re-
strictions imposed by the 1940 Act and the Internal Revenue Code; such
conditons, if applicable, may have lowered the returns for the separately man-
aged accounts. The results presented are not intended to predict or suggest the
return to be experienced by the Portfolio or the return an investor might
achieve by investing in the Portfolio.
JACOBS ASSET MANAGEMENT INTERNATIONAL COMPOSITE RETURNS
(PERCENTAGE RETURNS NET OF MANAGEMENT FEES)
<TABLE>
<CAPTION>
MSCI
ADVISER EAFE
------- -----
<S> <C> <C>
1/1/96-9/30/96................................................... 20.25% 4.62%
10/1/95*-9/30/96................................................. 18.73% 8.94%
Value of $1 invested from 10/1/95-9/30/96........................ $1.19 $1.09
</TABLE>
21
<PAGE>
* Jacobs Asset Management began managing accounts using this style on October
1, 1995, shortly after its founding in July, 1995.
- -----------
1. The since inception return means that $1 invested in the composite account
on October 1, 1995 had grown to $1.19 by September 30, 1996.
2. The MSCI EAFE is an unmanaged index which assumes reinvestment of dividends
and is generally considered representative of securities similar to those
invested in by the Adviser for purpose of the composite performance numbers
set forth above.
3. The Adviser's average annual management fee for the period since inception
on October 1, 1995 to September 30, 1996 was 0.75%, or 75 basis points. Net
returns to investors vary depending on the management fee.
ADMINISTRATIVE SERVICES
UAM Fund Services, Inc. ("UAMFSI"), a wholly-owned subsidiary of United Asset
Management Corporation, is responsible for performing and overseeing adminis-
trative, fund accounting, dividend disbursing and transfer agent services pro-
vided to the Fund and its Portfolios. UAMFSI's principal office is located at
211 Congress Street, Boston, MA 02110. UAMFSI has subcontracted some of these
services to Chase Global Funds Services Company ("CGFSC"), an affiliate of The
Chase Manhattan Bank, by a Mutual Funds Service Agreement dated April 15, 1996.
CGFSC is located at 73 Tremont Street, Boston, MA 02108.
Each Portfolio pays UAMFSI a two part monthly fee: a Portfolio-specific fee
which is retained by UAMFSI and a sub-administration fee which UAMFSI in turn
pays to CGFSC. The following Portfolio-specific fees are calculated from the
aggregate net assets of each Portfolio:
<TABLE>
<CAPTION>
RATE
----
<S> <C>
Jacobs International Octagon Portfolio................................. .04%
</TABLE>
CGFSC's monthly fee for its services is calculated on an annualized basis as
follows:
0.19 of 1% of the first $200 million of combined Fund assets;
0.11 of 1% of the next $800 million of combined Fund assets;
0.07 of 1% of combined Fund assets in excess of $1 billion but less than
$3 billion;
0.05 of 1% of combined Fund assets in excess of $3 billion.
Fees are allocated among the Portfolios on the basis of their relative assets
and are subject to a graduated minimum fee schedule per Portfolio, which starts
at $2,000 per month and increases to $70,000 annually after two years. If a
separate class of shares is added to a Portfolio, its minimum annual fee in-
creases by $20,000.
22
<PAGE>
DISTRIBUTOR
UAM Fund Distributors, Inc., a wholly-owned subsidiary of United Asset Man-
agement Corporation, with its principal office located at 211 Congress Street,
Boston, MA 02110, distributes shares of the Fund. Under the Distribution Agree-
ment (the "Agreement"), the Distributor, as agent of the Fund, agrees to use
its best efforts as sole distributor of Fund shares. The Distributor does not
receive any fee or other compensation under the Agreement with respect to the
Shares offered in this Prospectus. The Agreement continues in effect as long as
it is approved at least annually by the Fund's Board of Trustees. Those approv-
ing the Agreement must include a majority of Trustees who are neither parties
to the Agreement nor interested persons of any such party. The Agreement pro-
vides that the Fund will bear costs of registration of its shares with the SEC
and various states as well as the printing of its prospectuses, its SAIs and
its reports to shareholders.
GENERAL INFORMATION
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Fund was organized as a Delaware business trust on May 18, 1994 under the
name "The Regis Fund II". On October 31, 1995, the name of the Fund was changed
to "UAM Funds Trust." The Fund's Agreement and Declaration of Trust permits the
Fund to issue an unlimited number of shares of beneficial interest, without par
value. The Trustees have the power to designate one or more series ("Portfo-
lios") or classes of shares of beneficial interest without further action by
shareholders.
At its discretion, the Board of Trustees may create additional Portfolios and
classes of shares. The shares of each Portfolio are fully paid and nonassess-
able, and have no preference as to conversion, exchange, dividends, retirement
or other features and no pre-emptive rights. They have noncumulative voting
rights, which means that holders of more than 50% of shares voting for the
election of Trustees can elect 100% of the Trustees. A shareholder is entitled
to one vote for each full share held (and a fractional vote for each fractional
share held), then standing in his name on the books of the Fund.
Annual meetings will not be held except as required by the 1940 Act and other
applicable laws. The Fund has undertaken that its Trustees will call a meeting
of shareholders if such a meeting is requested in writing by the holders of not
less than 10% of the outstanding shares of the Fund. The Fund will assist
shareholder communications in such matters to the extent required by the under-
taking.
CUSTODIAN
The Chase Manhattan Bank serves as custodian of the Fund's assets.
ACCOUNTANTS
Price Waterhouse LLP acts as the independent accountants for the Fund and au-
dits its financial statements annually.
23
<PAGE>
REPORTS
Investors will receive unaudited semi-annual financial statements and annual
financial statements audited by Price Waterhouse LLP.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be made by contacting the UAM Funds Service Center
at the address or telephone number listed on the cover of this Prospectus.
LITIGATION
The Fund is not involved in any litigation.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS NOT CONTAINED IN THIS PROSPECTUS, OR IN THE FUND'S STATEMENT OF AD-
DITIONAL INFORMATION, IN CONNECTION WITH THE OFFERING MADE BY THIS PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES NOT CONSTI-
TUTE AN OFFERING BY THE FUND IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY
NOT LAWFULLY BE MADE.
24
<PAGE>
UAM FUNDS -- INSTITUTIONAL CLASS SHARES
Acadian Emerging Markets Portfolio
Acadian International Equity Portfolio
BHM&S Total Return Bond Portfolio
Chicago Asset Management Intermediate Bond Portfolio
Chicago Asset Management Value/Contrarian Portfolio
C&B Balanced Portfolio
C&B Equity Portfolio
C&B Equity Portfolio for Taxable Investors
C&B Mid Cap Equity Portfolio
McKee Domestic Equity Portfolio
McKee International Equity Portfolio
McKee U.S. Government Portfolio
DSI Balanced Portfolio
DSI Disciplined Value Portfolio
DSI Limited Maturity Bond Portfolio
DSI Money Market Portfolio
FMA Small Company Portfolio
FPA Crescent Portfolio
Hanson Equity Portfolio
ICM Equity Portfolio
ICM Fixed Income Portfolio
ICM Small Company Portfolio
IRC Enhanced Index Portfolio
Jacobs International Octagon Portfolio
MJI International Equity Portfolio
Newbold's Equity Portfolio
NWQ Balanced Portfolio
NWQ Value Equity Portfolio
Rice, Hall James Small Cap Portfolio
Rice, Hall James Small/Mid Cap Portfolio
Sirach Equity Portfolio
Sirach Fixed Income Portfolio
Sirach Growth Portfolio
Sirach ShortTerm Reserves Portfolio
Sirach Special Equity Portfolio
Sirach Strategic Balanced Portfolio
SAMI Preferred Stock Income Portfolio
Sterling Partners' Balanced Portfolio
Sterling Partners' Equity Portfolio
Sterling Partners' ShortTerm Fixed Income Portfolio
Sterling Partners' Small Class Portfolio
25
<PAGE>
Sterling Partners' Small Cap Value Portfolio
TS&W Balanced Portfolio
TS&W Equity Portfolio
TS&W Fixed Income Portfolio
TS&W International Equity Portfolio
26
<PAGE>
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
1-800-638-7983
Investment Adviser
Jacobs Asset Management
20 East Broward Boulevard
Suite 1920
Fort Lauderdale, FL 33301
Distributor
UAM FUND DISTRIBUTORS, INC.
211 Congress Street
Boston, MA 02110
PROSPECTUS
January 3, 1997
<PAGE>
[LOGO OF UAM FUNDS APPEARS HERE]
MJI International
Equity Portfolio
Institutional
Class Shares
P R O S P E C T U S
January 3, 1997
<PAGE>
[LOGO OF UAM FUNDS APPEARS HERE]
UAM FUNDS SERVICE CENTER
C/O CHASE GLOBAL FUNDS SERVICES COMPANY
P.O. BOX 2798
BOSTON, MA 02208-2798
1-800-638-7983
- -------------------------------------------------------------------------------
MJI INTERNATIONAL EQUITY PORTFOLIO
INSTITUTIONAL CLASS SHARES
INVESTMENT ADVISER: MURRAY JOHNSTONE INTERNATIONAL LTD.
- -------------------------------------------------------------------------------
PROSPECTUS--JANUARY 3, 1997
UAM Funds Trust (the "Fund") is an open-end investment company known as a
"mutual fund." The Fund consists of multiple series (known as "Portfolios")
each of which has different investment objectives and policies. MJI Interna-
tional Equity Portfolio currently offers two classes of shares: Institutional
Class Shares and Institutional Service Class Shares. Shares of each class rep-
resent equal, pro rata interests in the Portfolio and accrue dividends in the
same manner except that Service Class Shares bear fees payable by the class
(at the rate of .40% per annum) to financial institutions for services they
provide to the owners of such shares. The securities offered in this Prospec-
tus are Institutional Class Shares of one diversified, no-load Portfolio of
the Fund managed by Murray Johnstone International Ltd.
MJI INTERNATIONAL EQUITY PORTFOLIO. MJI International Equity Portfolio (the
"Portfolio") seeks to maximize total return, including both capital apprecia-
tion and current income, by investing primarily in the common stocks of compa-
nies based outside of the United States. Under normal circumstances, at least
65% of the Portfolio's total assets will be invested in securities of issuers
domiciled in at least three countries other than the United States.
There can be no assurance that the Portfolio will achieve its stated objec-
tive.
Keep this Prospectus for future reference. It contains information that you
should know before you invest. A "Statement of Additional Information" (SAI)
containing additional information about the Fund has been filed with the Secu-
rities and Exchange Commission. The SAI is dated January 3, 1997 and has been
incorporated by reference into this Prospectus. For a free copy of the SAI
contact the UAM Funds Service Center at the address or telephone number above
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Fund Expenses.............................................................. 1
Prospectus Summary......................................................... 3
Risk Factors............................................................... 4
Financial Highlights....................................................... 4
Investment Objective....................................................... 6
Investment Policies........................................................ 6
Other Investment Policies.................................................. 8
Investment Limitations..................................................... 13
Purchase of Shares......................................................... 14
Redemption of Shares....................................................... 17
Shareholder Services....................................................... 19
Valuation of Shares........................................................ 19
Performance Calculations................................................... 20
Dividends, Capital Gains Distributions and Taxes........................... 21
Investment Adviser......................................................... 22
Administrative Services.................................................... 23
Distributor................................................................ 23
Portfolio Transactions..................................................... 24
General Information........................................................ 24
UAM Funds -- Institutional Class Shares.................................... 27
</TABLE>
<PAGE>
FUND EXPENSES
The following table illustrates expenses and fees that a shareholder of the
Portfolio's Institutional Class Shares would incur. Transaction fees may be
charged if a broker-dealer or other financial intermediary deals with the Fund
on your behalf. (See "PURCHASE OF SHARES.")
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Sales Load Imposed on Purchases..................................... NONE
Sales Load Imposed on Reinvested Dividends.......................... NONE
Deferred Sales Load................................................. NONE
Redemption Fees..................................................... NONE
Exchange Fees....................................................... NONE
</TABLE>
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF NET ASSETS)
<TABLE>
<S> <C>
Investment Advisory Fees............................................ 0.75 %
Administrative Fees................................................. 1.07 %
12b-1 Fees.......................................................... NONE
Other Expenses...................................................... 1.35 %
Advisory Fees Waived and Expenses Assumed........................... (1.65)%
-----
Total Operating Expenses (After Fee Waiver and Expenses Assumed).... 1.52 %*
=====
</TABLE>
- -----------
* Absent the fees waived and expenses assumed by the Adviser, annualized Total
Operating Expenses of the Portfolio would be 3.17%. The annualized Total Op-
erating Expenses includes the effect of expense offsets. If expense offsets
were excluded, annualized total operating expenses would be 1.53%. The Ad-
viser has voluntarily agreed to waive all or a portion of its advisory fees
and to assume operating expenses to keep total annual operating expenses
(excluding interest, taxes and extraordinary expenses) from exceeding 1.50%
of average daily net assets until further notice. The Adviser will not be
reimbursed by the Fund for any advisory fees which are waived or expenses
which the Adviser may bear on behalf of the Portfolio for a given fiscal
year.
The table above shows various fees and expenses and investor may bear di-
rectly or indirectly. The expenses and fees set forth above are based on the
Portfolio's Institutional Class Shares operations during the fiscal year ended
April 30, 1996, except that they have been restated to reflect current admin-
istrative fees (see "ADMINISTRATIVE SERVICES") and Advisory Fees Waived and
Expenses Assumed have been restated to reflect the Portfolio's Institutional
Class Shares current expense cap.
1
<PAGE>
The following example illustrates expenses a shareholder would pay on a
$1,000 investment over various time periods assuming (1) a 5% annual rate of
return and (2) redemption at the end of each time period.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Expenses..................................... $15 $48 $82 $180
</TABLE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EX-
PENSES OR PERFORMANCE. ACTUAL EXPENSE MAY BE GREATER OR LESSER THAN THOSE
SHOWN.
2
<PAGE>
PROSPECTUS SUMMARY
INVESTMENT ADVISER
Murray Johnstone International Ltd. (the "Adviser") is an international in-
vestment adviser and is an affiliate of the Murray Johnstone Group ("MJ
Group"), in Glasgow, Scotland. The MJ Group's origins date back to 1907, and
it currently has $7 billion in assets under management. The MJ Group has a
200-member staff including 40 investment professionals. It became a subsidiary
of United Asset Management Corporation in 1993. The Adviser, the SEC-regis-
tered entity within the MJ Group, has $1.4 billion of assets under management
and has a U.S. office in Chicago. (See "INVESTMENT ADVISER.")
PURCHASE OF SHARES
Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the
"Distributor") to investors at net asset value without a sales commission.
Share purchases may be made by sending investments directly to the Fund. The
minimum initial investment in the Portfolio is $2,500. The minimum initial in-
vestment for IRA accounts is $500. The minimum initial investment for spousal
IRA accounts is $250. The minimum for any subsequent investment is $100. Cer-
tain exceptions to the initial or minimum investment amounts may be made by
the officers of the Fund. (See "PURCHASE OF SHARES.")
DIVIDENDS AND DISTRIBUTIONS
The Portfolio will normally distribute substantially all of its net invest-
ment income in an annual dividend. Any realized net capital gains will also be
distributed annually. Distributions will be reinvested in the Portfolio's
shares automatically unless an investor elects to receive cash distributions.
(See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES.")
REDEMPTION OF SHARES
Shares of the Portfolio may be redeemed at any time, without cost, at the
net asset value of the Portfolio next determined after receipt of the redemp-
tion request. The redemption price may be more or less than the purchase
price. (See "REDMEPTION OF SHARES.")
ADMINISTRATIVE SERVICES
UAM Fund Services, Inc. ("UAMFSI"), a wholly-owned subsidiary of United As-
set Management Corporation ("UAM"), is responsible for performing and oversee-
ing administration, dividend disbursing and transfer agency services provided
to the Fund and its Portfolios by third-party service providers. (See "ADMIN-
ISTRATIVE SERVICES.")
3
<PAGE>
RISK FACTORS
The value of the Portfolio's shares will fluctuate in response to changes in
market and economic conditions as well as the financial conditions and pros-
pects of the issuers in which the Portfolio invests. Prospective investors
should consider the following factors: (1) The Portfolio may invest in repur-
chase agreements which entail a risk of loss should the seller default on its
transaction; (2) The Portfolio may lend its investment securities which en-
tails a risk of loss should a borrower fail financially; (3) The Portfolio may
purchase securities on a when-issued basis which do not earn interest until
issued and may decline or appreciate in market value prior to their delivery
to the Portfolio; (4) The Portfolio may engage in various currency strategies
to seek to hedge its investments against movements in security prices, inter-
est rates, and exchange rates by the use of derivatives, including forward
contracts, options and futures as well as options on futures. Such strategies
are commonly referred to as "derivatives" and involve the risk of imperfect
correlation in movements in the price of options and futures and movements in
the price of securities, interest rates or currencies which are the subject of
the hedge. To the extent these transactions involve foreign securities or cur-
rencies, they are also subject to the risk factors associated with foreign in-
vestments generally. There can be no assurance that a liquid secondary market
for these hedging techniques will exist at any specific time. (See "OTHER IN-
VESTMENT POLICIES.")
FINANCIAL HIGHLIGHTS
The following table provides selected per share information for a share out-
standing throughout the period presented of the Portfolio's Institutional
Class Shares. This table is part of the Portfolio's Financial Statements in-
cluded in the Portfolio's 1996 Annual Report to Shareholders and the 1996
Semi-Annual Report. These Reports are incorporated into the Portfolio's SAI.
The Portfolio's Annual Financial Statements have been audited by Price
Waterhouse LLP. whose unqualified opinion on the Financial Statements for the
period ended April 30, 1996 is also incorporated into the Portfolio's SAI.
Please read the following information in conjunction with the Portfolio's 1996
Annual Report to Shareholders and the 1996 Semi- Annual Report to Sharehold-
ers.
4
<PAGE>
<TABLE>
<CAPTION>
SIX MONTHS
SEPTEMBER 16, YEAR ENDED
1994** ENDED OCTOBER 31,
TO APRIL 30, APRIL 30, 1996
1995 1996 (UNAUDITED)
------------- --------- -----------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD..... $10.00 $ 9.50 $ 10.27
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income.................. 0.04 0.07 0.03
Net Realized and Unrealized Gain (Loss)
on Investments....................... (0.54)++ 0.75 (0.24)
------ ------- -------
Total from Investment Operations..... (0.50) 0.82 (0.21)
------ ------- -------
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 $ 10.06
====== ======= =======
TOTAL RETURN+............................ (5.00)% 8.67 % (2.05)%
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands).. $5,535 $ 8,592 $20,742
Ratio of Expenses to Average Net
Assets............................... 1.00%* 1.45% 1.50%*
Ratio of Net Investment Income to
Average Net Assets................... 1.49%* 0.88% 0.63%*
Portfolio Turnover Rate................ 81% 59% 36%
Average Commission Rate#............... N/A $0.0316 $0.0296
Voluntary Waived Fees and Expenses
Assumed by the Adviser............... $ 0.13 $ 0.13 $ 0.04
Ratio of Expenses to Average Net Assets
Including Expense Offsets............ 1.00%* 1.43% 1.49%*
</TABLE>
- -----------
* Annualized.
** Commencement of Operations.
+ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser during the periods indicated.
++ The amount shown for the period ended April 30, 1995 for a share outstand-
ing throughout 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 in-
vestments of the Portfolio.
# Beginning with fiscal year 1996, the portfolio is required to disclose the
average commission rate per share it paid for portfolio trades on which
commissions were charged.
## Amount is less than $0.01 per share.
5
<PAGE>
INVESTMENT OBJECTIVE
The Portfolio seeks to maximize total return, including both capital appre-
ciation and current income, by investing primarily in the common stocks of
companies based outside of the United States. Under normal circumstances, at
least 65% of the Portfolio's total assets will be invested in at least three
different countries other than the United States. There can be no assurance
that the Portfolio will achieve its stated objective.
INVESTMENT POLICIES
The Portfolio's investment process begins by seeking to determine the best
possible allocation among international stock markets. The Portfolio's Adviser
evaluates markets through a proprietary system which analyzes economic fac-
tors, stock prices in each market, market performance and trends in monetary
policy. Drawing on this information, the Adviser decides which markets the
Portfolio should invest in and in what proportion.
Once the country allocation decision has been made, the Adviser selects un-
dervalued stocks in that market. The Adviser rates companies according to the
quality of their management, market position, financial strength, ability to
earn competitive returns on equity and assets, and growth potential. The Port-
folio will invest in stocks that the Adviser determines are undervalued com-
pared to industry norms within their countries. It is expected that invest-
ments will be diversified throughout the world and within markets to minimize
specific country and currency risks. While investments will be made primarily
in securities of companies domiciled in developed countries, investments will
also be made in developing countries. (See "FOREIGN INVESTMENT RISK FACTORS.")
Under normal circumstances, at least 65% of the Portfolio's total assets
will be invested in common stocks of companies in at least three countries
outside the United States. It is expected that generally, the Portfolio will
invest in common stocks of companies listed on U.S. or foreign stock ex-
changes, but it may also invest in stocks traded in the over-the-counter mar-
ket. Common stocks for this purpose also include securities having common
stock characteristics such as rights and warrants to purchase common stocks.
The Portfolio may also invest in convertible securities and preferred stocks.
The Portfolio may also invest in foreign equity securities in the form of
American Depositary Receipts (ADRs), European Depositary Receipts (EDRs) and
other similar global instruments. ADRs (sponsored or unsponsored) are receipts
typically issued by a U.S. bank or trust company evidencing ownership of the
underlying foreign securities. Most ADRs are traded on a U.S. stock exchange.
Issuers of unsponsored ADRs are not contractually obligated to disclose mate-
rial information in the U.S. and, therefore, there may not be a correlation
between such information and the market value of the unsponsored ADR. EDRs are
receipts typically issued by a European bank or trust company evidencing own-
ership of the underlying foreign securities.
6
<PAGE>
FOREIGN INVESTMENT RISK FACTORS
Investors should recognize that investing in foreign securities involves
certain risks which are not typically associated with investing in domestic
securities. Since securities issued by foreign entities may be denominated in
foreign currencies, and the Portfolio may temporarily hold uninvested reserves
in bank deposits in foreign currencies, the Portfolio's value may rise or fall
depending on currency exchange rates. The Portfolio may also have to pay a fee
to convert funds from one currency to another.
Non-U.S.-based companies are not subject to the same accounting, auditing
and financial reporting standards as are domestic companies. There may be less
publicly-available information about non-U.S.-based companies which may make
it difficult to make investment decisions. Also, stock markets outside the
U.S. are typically less liquid -- that is, it is more difficult to sell large
quantities of a stock without driving its price down or to buy without pushing
its price up. Market regulation may be less rigorous in some markets. Finally,
political factors may have an impact in the form of confiscatory taxation, ex-
propriation or political instability in international markets.
Although the Portfolio will seek the most favorable trading costs available
in any given market, foreign commissions are generally higher than those in
the U.S. Custodial expenses will generally be higher than would be the case in
the U.S.
Some foreign governments also levy withholding taxes against dividend and
interest income. Although in some countries a portion of the taxes is recover-
able, the non-recovered portion of foreign withholding taxes will reduce the
income the Portfolio receives from the companies comprising its investments.
Investing in the foreign securities of developing countries presents addi-
tional considerations. The economies of individual developing countries may
differ favorably or unfavorably from the United States economy in such re-
spects as growth of gross domestic product, rate of inflation, currency depre-
ciation, capital reinvestment, resource self-sufficiency and balance of pay-
ments position. Further, the economies of developing countries generally are
heavily dependent upon international trade and, accordingly, have been and may
continue to be adversely affected by trade barriers, exchange controls, man-
aged adjustments in relative currency values and other protectionist measures
imposed or negotiated by the countries with which they trade. These economies
also have been and may continue to be adversely affected by economic condi-
tions in the countries with which they trade.
With respect to any developing country, there is the possibility of nation-
alization, expropriation or confiscatory taxation, repatriation of investment
income, capital and the proceeds of sales by foreign investors, political
changes, governmental regulation, social instability or diplomatic develop-
ments (including war) which could adversely affect the economies of such coun-
tries or the value of the
7
<PAGE>
Portfolio's investments in those countries. In addition, it may be difficult
to obtain and enforce a judgement in a court outside of the United States.
The Portfolio may engage in various investment techniques such as futures
contracts, options on futures contracts, options, and interest rate swap
transactions. (See "OTHER INVESTMENT POLICIES -- HEDGING AND RELATED STRATE-
GIES AND RISK CONSIDERATIONS.")
OTHER INVESTMENT POLICIES
The Portfolio may, under normal circumstances, invest up to 35% of its as-
sets, unless restricted by additional limitations described below or in the
Portfolio's SAI, in the following securities, investments or investment tech-
niques.
SHORT-TERM INVESTMENTS
In order to earn a return on uninvested assets, meet anticipated redemp-
tions, or for temporary defensive purposes, the Portfolio may invest a portion
of its assets in domestic and foreign money market instruments including cer-
tificates of deposit, bankers' acceptances, time deposits, U.S. Government ob-
ligations, U.S. Government agency securities, short-term corporate debt secu-
rities, and commercial paper rated A-1 or A-2 by Standard & Poor's Corporation
or Prime-1 or Prime-2 by Moody's Investors Service, Inc. or if unrated, deter-
mined by the Adviser to be of comparable quality.
Time deposits maturing in more than seven days will not be purchased by the
Portfolio, and time deposits maturing from two business days through seven
calendar days will not exceed 10% of the total assets of the Portfolio. The
Portfolio will not invest in any security issued by a commercial bank unless
(i) the bank has total assets of at least $1 billion, or the equivalent in
other currencies, (ii) in the case of U.S. banks, it is a member of the Fed-
eral Deposit Insurance Corporation, and (iii) in the case of foreign branches
of U.S. banks, the security is, in the opinion of the Adviser, of an invest-
ment quality comparable with other debt securities which may be purchased by
the Portfolio.
The Fund has received permission from the Securities and Exchange Commission
(the "SEC") to deposit the daily uninvested cash balances of the Fund's Port-
folios, as well as cash for investment purposes, into one or more joint ac-
counts and to invest the daily balance of the joint accounts in the following
short-term investments: fully collateralized repurchase agreements, interest-
bearing or discounted commercial paper including dollar-denominated commercial
paper of foreign issuers, and any other short-term money market instruments
including variable rate demand notes and tax-exempt money instruments. By en-
tering into these investments on a joint basis, it is expected that the Port-
folio may earn a higher rate of return on investments relative to what it
could earn individually.
8
<PAGE>
The Fund has received permission from the SEC for each of its Portfolios to
invest, for cash management purposes, the greater of 5% of its total assets or
$2.5 million in the Fund's DSI Money Market Portfolio (See "INVESTMENT COMPA-
NIES.")
REPURCHASE AGREEMENTS
The Portfolio may invest in repurchase agreements collateralized by U.S. Gov-
ernment securities, certificates of deposit, and certain bankers' acceptances
and other securities outlined above under "SHORT-TERM INVESTMENTS." In a repur-
chase agreement, the Portfolio buys a security and simultaneously commits to
sell that security back at an agreed upon price plus an agreed upon market rate
of interest. Under a repurchase agreement, the seller is also required to main-
tain the value of securities subject to the agreement at not less than 100% of
the repurchase price. The Administrator and the Adviser will mark to market
daily the value of the securities purchased. The use of repurchase agreements
involves certain risks. For example, a default by the seller of the agreement
may cause the Portfolio to experience a loss or delay in the liquidation of the
collateral securing the repurchase agreement. The Portfolio might also incur
disposition costs in liquidating the collateral. While the Fund's management
acknowledges these risks, it is expected that they can be controlled through
stringent security selection criteria and careful monitoring procedures. The
Fund has received permission from the SEC to pool daily uninvested cash bal-
ances of the Fund's Portfolios in order to invest in repurchase agreements on a
joint basis. By entering into joint repurchase agreements, the Portfolio may
incur lower transactions costs and earn higher rates of interest on joint re-
purchase agreements. The Portfolio's contribution would determine its return
from a joint repurchase agreement. (See "SHORT TERM INVESTMENTS.")
LENDING OF SECURITIES
The Portfolio may lend its investment securities to qualified institutional
investors as a means of earning income. The Portfolio will not loan securities
to the extent that greater than one-third of its assets at fair market value
would be committed to loans. During the term of a loan, the Portfolio is sub-
ject to a gain or loss depending on any increase or decrease in the market
price of the securities loaned. Lending of securities is subject to review by
the Fund's Board of Trustees. All relevant facts and circumstances, including
the creditworthiness of the broker, dealer or institution, will be considered
in making decisions about securities lending.
An investment company may pay reasonable negotiated fees in connection with
loaned securities so long as such fees are set forth in a written contract and
approved by its Board of Trustees. The Portfolio will continue to retain any
voting rights with respect to loaned securities. If a material event occurs af-
fecting an investment on loan, the loan must be called and the securities vot-
ed.
9
<PAGE>
WHEN-ISSUED, FORWARD DELIVERY AND DELAYED SETTLEMENT SECURITIES
The Portfolio may purchase and sell securities on a "when-issued," "delayed
settlement," or "forward delivery" basis. "When-issued" or "forward delivery"
refers to securities whose terms and indenture are available, and for which a
market exists, but which are not available for immediate delivery. When-issued
and forward delivery transactions may be expected to occur a month or more be-
fore delivery is due. Delayed settlement is a term used to describe settlement
of a securities transaction in the secondary market which will occur sometime
in the future. No payment or delivery is made by the Portfolio until it re-
ceives payment or delivery from the other party to any of the above transac-
tions. It is possible that the market price of the securities at the time of
delivery may be higher or lower than the purchase price. The Portfolio will
maintain a separate account of cash and liquid securities at least equal to the
value of purchase commitments until payment is made. Typically, no income ac-
crues on securities purchased on a delayed delivery basis prior to the time de-
livery is made although the Portfolio may earn income on securities it has de-
posited in a segregated account.
The Portfolio may engage in these types of purchases in order to buy securi-
ties that fit with its investment objectives at attractive prices not to in-
crease its investment leverage.
PORTFOLIO TURNOVER
Portfolio turnover is not anticipated to exceed 75%. In addition to Portfolio
trading costs, higher rates of portfolio turnover may result in the realization
of capital gains. (See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES" for
more information on taxation). The Portfolio will not normally engage in short-
term trading, but reserves the right to do so. The table set forth in "Finan-
cial Highlights" presents the Portfolio's historical portfolio turnover ratios.
INVESTMENT COMPANIES
The Portfolio reserves the right to invest up to 10% of its total assets,
calculated at the time of investment, in the securities of other open-end or
closed-end investment companies. No more than 5% of the investing Portfolio's
total assets may be invested in the securities of any one investment company
nor may it acquire more than 3% of the voting securities of any other invest-
ment company. The Portfolio will indirectly bear its proportionate share of any
management fees paid by an investment company in which it invests in addition
to the advisory fee paid by the Portfolio.
The Fund has received permission from the SEC to allow each of its Portfolios
to invest, for cash management purposes, the greater of 5% of its total assets
or $2.5 million in the Fund's DSI Money Market Portfolio provided that the in-
vestment is consistent with the Portfolio's investment policies and restric-
tions. Based
10
<PAGE>
upon the Portfolio's assets invested in the DSI Money Market Portfolio, the in-
vesting Portfolio's adviser will waive its investment advisory fee and any
other fees it earned as a result of the Portfolio's investment in the DSI Money
Market Portfolio. The investing Portfolio will bear expenses of the DSI Money
Market Portfolio on the same basis as all of its other shareholders.
HEDGING AND RELATED STRATEGIES AND RISK CONSIDERATIONS
The Portfolio may use options (both exchange-traded and over-the-counter) to
attempt to enhance income. To reduce the overall risk of its investments
(hedge), the Portfolio may use options, futures contracts, options on futures
and forward currency contracts. These instruments are commonly referred to as
derivatives. Hedging strategies may also be used in an attempt to manage the
Portfolio's exposure to changing interest rates, security prices and currency
exchange rates. The Portfolio may buy or sell futures contracts, write covered
call options and buy put and call options on any security, index or currency
including options and futures traded on foreign exchanges and options not
traded on exchanges. The Portfolio's ability to use these strategies may be
limited by market conditions, regulatory limits and tax considerations. The
Portfolio's obligation under such hedging strategies will be covered by the
maintenance of a segregated account of cash, U.S. Government securities or high
grade debt obligations equal to at least 100% of the Portfolio's commitment.
The SAI contains further information on all of these strategies and the risks
associated with them.
The Portfolio may write or purchase options in privately negotiated transac-
tions ("OTC Options") as well as listed options. OTC Options can be closed out
only by agreement with the other party to the transaction. Any OTC Option pur-
chased by the Portfolio is considered an illiquid security. Any OTC Option
written by the Portfolio will be with a qualified dealer pursuant to an agree-
ment under which the Portfolio may repurchase the option at a formula price.
Such options are considered illiquid to the extent that the formula price ex-
ceeds the intrinsic value of the option. The Portfolio may not purchase or sell
futures contracts or related options for which the aggregate initial margin and
premiums exceed 5% of the fair market value of the Portfolio's assets. In order
to prevent leverage in connection with the purchase of futures contracts or
call options thereon by the Portfolio, an amount of cash, cash equivalents or
liquid high grade debt securities equal to the market value of the obligation
under the futures contracts or options (less any related market deposits) will
be maintained in a segregated account with the Fund's Custodian. The Portfolio
may not invest more than 15% of its net assets in illiquid securities and re-
purchase agreements which have a maturity of longer than seven days. A more
complete discussion of the potential risks involved in transactions in options
or futures contracts and related options is contained in the SAI.
The Portfolio may enter into forward foreign currency exchange contracts for
the purchase or sale of a specified currency at a specified future date either
with
11
<PAGE>
respect to specific transactions or with respect to portfolio positions. For
example, when the Adviser anticipates making a currency exchange transaction in
connection with the purchase or sale of a security, the Portfolio may enter
into a forward contract in order to set the exchange rate at which the transac-
tion will be made. The Portfolio also may enter into a forward contract to sell
an amount of a foreign currency approximating the value of some or all of the
Portfolio's securities denominated in such currency.
The Portfolio may use forward contracts in one currency or a basket of cur-
rencies to hedge against fluctuations in the value of another currency when the
Adviser anticipates there will be a correlation between the two and may use
forward currency contracts to shift the Portfolio's exposure to foreign cur-
rency fluctuations from one country to another. The purpose of entering into
these contracts is to minimize the risk to the Portfolio from adverse changes
in the relationship between the U.S. dollar and foreign currencies.
The Portfolio may enter into interest rate protection transactions, which
consist of interest rate swaps and interest rate caps, collars and floors, for
hedging purposes. These transactions are commonly known as derivatives. A swap
is an agreement to exchange the return generated by one instrument for the re-
turn generated by another instrument. The swaps in which the Portfolio may also
engage include interest rate caps, floors and collars under which one party
pays a single or periodic fixed amount (or premium), and the other party pays
periodic amounts on the movement of a specified index.
The Portfolio may enter into interest rate protection transactions to pre-
serve a return or spread on a particular investment or portion of its portfolio
or to protect against any increase in the price of securities it anticipates
purchasing at a later date. The Portfolio will enter into interest rate protec-
tion transactions only with banks and recognized securities dealers believed by
the Adviser to present minimal credit risks in accordance with guidelines es-
tablished by the Fund's Board of Trustees. Interest rate swaps, caps, floors
and collars will be treated as illiquid securities and will therefore, be sub-
ject to the Portfolio's investment restriction limiting investment in illiquid
securities to no greater than 15% of net assets.
RISK CONSIDERATIONS. The Portfolio might not employ any of the hedging strat-
egies described above, and there can be no assurance that any strategy used
will succeed. If the Adviser incorrectly forecasts interest rates, market val-
ues or other economic factors in utilizing a strategy for the Portfolio, the
Portfolio would be in a better position if it had not hedged at all. In addi-
tion, the Portfolio will pay commissions and other costs in connection with
such hedging strategies which may increase the Portfolio's expenses and reduce
its return.
The use of these strategies involves certain risks, including (1) the fact
that skills needed to use hedging instruments are different from those needed
to select
12
<PAGE>
the Portfolio's securities, (2) possible imperfect correlation, or even no cor-
relation, between price movements of hedging instruments and price movements of
the investments being hedged, (3) the fact that, while hedging strategies can
reduce the risk of loss, they can also reduce the opportunity for gain, or even
result in losses, by offsetting favorable price movements in hedged investments
and (4) the possible inability of the Portfolio to purchase or sell a portfolio
security at a time that otherwise would be favorable for it to do so, or the
possible need for the Portfolio to sell a portfolio security at a disadvanta-
geous time, due to the need for it to maintain "cover" or to segregate securi-
ties in connection with hedging transactions and the possible inability of the
Portfolio to close out or to liquidate its hedged position.
RESTRICTED AND ILLIQUID SECURITIES
The Portfolio may purchase restricted securities that are not registered for
sale to the general public but which are eligible for resale to qualified in-
stitutional investors under Rule 144A of the Securities Act of 1933. Under the
supervision of the Fund's Board of Trustees, the Adviser determines the liquid-
ity of such investments by considering all relevant factors. Provided that a
dealer or institutional trading market in such securities exists, these re-
stricted securities are not treated as illiquid securities for purposes of the
Portfolio's investment limitations. The Portfolio may invest up to 15% of its
net assets in securities that are illiquid. The prices realized from the sales
of these securities could be less than those originally paid by the Portfolio
or less than what may be considered the fair value of such securities.
INVESTMENT LIMITATIONS
The Portfolio will not:
(a) with respect to 75% of its assets, invest more than 5% of its total
assets at the time of purchase in the securities of any single issuer
(other than obligations issued or guaranteed as to principal and in-
terest by the U.S. Government or any of its agencies or instrumentali-
ties);
(b) with respect to 75% of its assets, purchase more than 10% of any class
of the outstanding voting securities of any issuer;
(c) invest more than 5% of its assets at the time of purchase in the secu-
rities of companies that have (with predecessors) a continuous operat-
ing history of less than 3 years;
(d) invest more than 25% of its assets in companies within a single indus-
try; however, there are no limitations on investments made in instru-
ments issued or guaranteed by the U.S. Government and its agencies.
(e) make loans except by purchasing debt securities in accordance with its
investment objective and policies or entering into repurchase agree-
ments or by lending its portfolio securities to banks, brokers, deal-
ers and other financial institutions so long as the loans are made in
compliance with the 1940 Act, as amended, or the Rules and Regulations
or interpretations of the SEC;
13
<PAGE>
(f) (i) borrow, except from banks and as a temporary measure for extraor-
dinary or emergency purposes and then, in no event, in excess of 33
1/3% of the Portfolio's gross assets valued at the lower of market or
cost, and (ii) a Portfolio may not purchase additional securities when
borrowings exceed 5% of total assets; or
(g) pledge, mortgage or hypothecate any of its assets to an extent greater
than 33 1/3% of its total assets at fair market value.
The Portfolio's investment objective and investment limitations (a), (b),
(d), (e) and (f)(i) listed above are fundamental policies and may be changed
only with the approval of the holders of a majority of the outstanding voting
securities of the Portfolio. The other investment limitations described here,
those not specified as fundamental in the SAI, and the Portfolio's investment
policies are not fundamental, and the Fund's Board of Trustees may change them
without shareholder approval.
PURCHASE OF SHARES
Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the
"Distributor"), without a sales commission at the net asset value per share
next determined after an order is received by the Fund and payment is received
by the Custodian. (See "VALUATION OF SHARES.") The minimum initial investment
required is $2,500. The minimum initial investment for IRA accounts is $500.
The minimum initial investment for spousal IRA accounts is $250. Certain excep-
tions may be made by the officers of the Fund.
Shares of the Portfolio may be purchased by customers of brokers-dealers or
other financial intermediaries ("Service Agents") which have established a
shareholder servicing relationship with the Fund on behalf of their customers.
Service Agents may impose additional or different conditions on purchases or
redemptions of Portfolio shares and may charge transaction or other account
fees. Each Service Agent is responsible for transmitting to its customers a
schedule of any such fees and information regarding additional or different
purchase or redemption conditions. Shareholders who are customers of Service
Agents should consult their Service Agent for information regarding these fees
and conditions. Amounts paid to Service Agents may include transaction fees
and/or service fees paid by the Fund from the Fund assets attributable to the
Service Agent, which would not be imposed if shares of the Portfolio were pur-
chased directly from the Fund or the Distributor. Service Agents may provide
shareholder services to their customers that are not available to a shareholder
dealing directly with the Fund. A salesperson and any other person entitled to
receive compensation for selling or servicing Portfolio shares may receive dif-
ferent compensation with respect to one particular class of shares over another
in the Fund.
14
<PAGE>
Service Agents may enter confirmed purchase orders on behalf of their cus-
tomers. If shares of the Portfolio are purchased in this manner, the Service
Agent must receive your investment order before the close of trading on the
New York Stock Exchange ("NYSE"), and transmit it to the Fund's Sub-Transfer
Agent prior to 4 p.m. to receive that day's share price. Proper payment for
the order must be received by the Sub-Transfer Agent no later than the time
when the Portfolio is priced on the following business day. Service Agents are
responsible to their customers and the Fund for timely transmission of all
subscription and redemption requests, investment information, documentation
and money.
INITIAL INVESTMENT
BY MAIL
. Complete and sign an Application and mail it, along with a check payable
to UAM Funds to:
UAM Funds Trust
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
Payment for purchases of shares received by mail will be credited to an ac-
count at the next share price calculated for the Portfolio after receipt. Pay-
ment does not need to be converted into Federal Funds (monies credited to the
Fund's Custodian Bank by a Federal Reserve Bank) before the Fund will accept
it for investment.
BY WIRE
. Telephone the UAM Funds Service Center at the number listed on the cover
of this prospectus and provide the account name, address, telephone num-
ber, social security or taxpayer identification number, Portfolio se-
lected, amount being wired, and the name of the bank wiring the funds.
An account number will be provided to you. Next,
. instruct your bank to wire the specified amount to the Fund's custodian:
The Chase Manhattan Bank
ABA #021000021
UAM Funds
Credit DDA #9102772952
Ref: Portfolio Name ________________
Your Account Number _________________
Your Account Name __________________
Wire Control Number _________________
15
<PAGE>
. Forward a completed Application to the Fund at the address shown on the
form. Federal Funds purchases will be accepted only on days when the
NYSE and the Custodian Bank are open for business.
ADDITIONAL INVESTMENTS
Additional investments can be made at any time. The minimum additional in-
vestment is $100. Shares can be purchased at net asset value by mailing a
check to the UAM Service Center (payable to "UAM Funds") or by wiring money to
the Custodian Bank using the instructions outlined above. When making addi-
tional investments, be sure that the account name and number is identified on
the check or wire. Prior to wiring additional investments, notify the UAM
Funds Service Center by calling the number on the cover of this prospectus.
Mail orders should include, when possible, the "Invest by Mail" stub which ac-
companies any Fund confirmation statement.
OTHER PURCHASE INFORMATION
Investments received by 4 p.m. ET (the close of the NYSE) will be invested
at the share price calculated after the NYSE closes on that day. Investments
received after the close of the NYSE will be executed at the price computed on
the next day the NYSE is open. The Fund reserves the right, in its sole dis-
cretion, to suspend the offering of shares of the Portfolio or to reject pur-
chase orders when, in the judgment of management, such suspension or rejection
is in the best interests of the Fund. Purchases of the Portfolio's shares will
be made in full and fractional shares of the Portfolio calculated to three
decimal places. Certificates for fractional shares will not be issued. Certif-
icates for whole shares will not be issued except at the written request of
the shareholder.
IN-KIND PURCHASES
If accepted by the Fund, shares of the Portfolio may be purchased in ex-
change for securities which are eligible for acquisition by the Portfolio, as
described in this Prospectus. Securities to be exchanged which are accepted by
the Fund will be valued as described under "VALUATION OF SHARES" at the next
determination of net asset value after acceptance. Shares issued by the Port-
folio in exchange for securities will be issued at net asset value determined
as of the same time. All dividends, interest, subscription, or other rights
pertaining to such securities shall become the property of the Portfolio and
must be delivered to the Fund by the investor upon receipt from the issuer.
Securities acquired through an inkind purchase will be acquired for investment
and not for immediate resale.
The Fund will not accept securities in exchange for shares of the Portfolio
unless:
. at the time of exchange, such securities are eligible to be in-
cluded in the Portfolio (current market quotations must be readily
available for such securities);
16
<PAGE>
. the investor represents and agrees that all securities offered to
be exchanged are liquid securities and not subject to any restric-
tions upon their sale by the Portfolio under the Securities Act of
1933, or otherwise; and
. the value of any such securities (except U.S. Government securi-
ties) being exchanged together with other securities of the same
issuer owned by the Portfolio will not exceed 5% of the net assets
of the Portfolio immediately after the transaction.
Investors who are subject to Federal taxation upon exchange may realize a
gain or loss for Federal income tax purposes depending upon the cost of secu-
rities or local currency exchanged. Investors interested in such exchanges
should contact the Adviser.
REDEMPTION OF SHARES
Shares of the Portfolio may be redeemed by mail or telephone at any time,
without cost at the net asset value of the Portfolio next determined after re-
ceipt of the redemption request. No charge is made for redemptions. Any re-
demption may be more or less than the purchase price of the shares depending
on the market value of investment securities held by the Portfolio.
BY MAIL
Address requests for redemption to the UAM Funds Service Center. Requests to
redeem shares must include:
. share certificates, if issued;
. a letter of instruction or an assignment specifying the number of
shares or dollar amount to be redeemed, signed by all registered
owners of the shares in the exact names in which they are regis-
tered;
. any required signature guarantees (see "SIGNATURE GUARANTEES"); and
. any other necessary legal documents, if required, in the case of
estates, trusts, guardianships, custodianships, corporations, pen-
sion and profit sharing plans and other organizations.
BY TELEPHONE
A redemption request by telephone requires the following:
. establish the telephone redemption privilege (and if desired, the
wire redemption privilege) by completing appropriate sections of
the Application; and
. call the Fund and instruct that the redemption proceeds be mailed
to you or wired to your bank.
17
<PAGE>
The following tasks cannot be accomplished by telephone:
. changing the name of the commercial bank or the account designated
to receive redemption proceeds (this can be accomplished only by a
written request signed by each shareholder, with each signature
guaranteed);
. redemption of certificated shares by telephone.
The Fund and its Sub-Transfer Agent will employ reasonable procedures to
confirm that instructions communicated by telephone are genuine, and they may
be liable for any losses if they fail to do so. These procedures include re-
quiring the investor to provide certain personal identification at the time an
account is opened, as well as prior to effecting each transaction requested by
telephone. In addition, all telephone transaction requests will be recorded
and investors may be required to provide additional telecopied written in-
structions of such transaction requests. The Fund or Sub-Transfer Agent may be
liable for any losses due to unauthorized or fraudulent telephone instructions
if the Fund or the Sub-Transfer Agent does not employ the procedures described
above. Neither the Fund nor the Sub-Transfer Agent will be responsible for any
loss, liability, cost or expense for following instructions received by tele-
phone that it reasonably believes to be genuine.
SIGNATURE GUARANTEES
Signature guarantees are required for the following redemptions:
. redemptions where the proceeds are to be sent to someone other than
the registered shareowner(s);
. redemptions where the proceeds are to be sent to someplace other
than the registered address; or
. share transfer requests.
Signature guarantees will be accepted from any eligible guarantor institu-
tion which participates in a signature guarantee program. Eligible guarantor
institutions include banks, brokers, dealers, credit unions, national securi-
ties exchanges, registered securities associations, clearing agencies and sav-
ings associations. Broker-dealers guaranteeing signatures must be a member of
a clearing corporation or maintain net capital of at least $100,000. Credit
unions must be authorized to issue signature guarantees.
OTHER REDEMPTION INFORMATION
Normally, the Fund will make payment for all shares redeemed under proper
procedures within one business day of and no more than seven days after the
receipt of the request, or earlier if required under applicable law. The Fund
may suspend the right of redemption or postpone the date at times when both
the NYSE and Custodian Bank are closed, or under any emergency circumstances
determined by the SEC.
18
<PAGE>
If the Board of Trustees determines that it would be detrimental to the best
interests of remaining shareholders of the Fund to make payment wholly or
partly in cash, the Fund may pay redemption proceeds in whole or in part by a
distribution in-kind of liquid securities held by a Portfolio in lieu of cash
in conformity with applicable rules of the SEC. Investors may incur brokerage
charges on the sale of portfolio securities received in payment of redemp-
tions.
SHAREHOLDER SERVICES
EXCHANGE PRIVILEGE
Institutional Class Shares of the Portfolio may be exchanged for Institu-
tional Class Shares of any other UAM Funds Portfolio. (See the list of Portfo-
lios of the UAM Funds at the end of this Prospectus.) Exchange requests should
be made by contacting the UAM Funds Service Center.
Any exchange will be based on the net asset value of the shares involved.
There is no sales commission or charge of any kind for an exchange. Before
making an exchange into a Portfolio, a shareholder should read its Prospectus
and consider the investment objectives of the Portfolio to be purchased. Call
the UAM Funds Service Center for a copy of the Prospectus for the Portfolio(s)
in which you are interested. Exchanges can only be made with Portfolios that
are qualified for sale in a shareholder's state of residence.
Exchange requests may be made either by mail or telephone. Telephone ex-
changes will be accepted only if the certificates for the shares to be ex-
changed have not been issued to the shareholder and if the registration of the
two accounts will be identical. Requests for exchanges received prior to 4
p.m. (ET) will be processed as of the close of business on the same day. Re-
quests received after 4 p.m. will be processed on the next business day. The
Board of Trustees may limit the frequency and amount of exchanges permitted.
For additional information regarding responsibility for the authenticity of
telephoned instructions, see "REDEMPTION OF SHARES -- BY TELEPHONE". An ex-
change into another UAM Funds Portfolio is a sale of shares and may result in
a gain or loss for income tax purposes. The Fund may modify or terminate the
exchange privilege at any time.
VALUATION OF SHARES
The net asset value of the Portfolio is determined by dividing the value of
the Portfolio's assets attributable to the class, less any liabilities attrib-
utable to the class, by the number of shares outstanding attributable to the
class. The net asset value per share of the Portfolio is determined as of the
close of the NYSE on each day that the NYSE is open for business.
Equity securities listed on a securities exchange for which market quota-
tions are readily available are valued at the last quoted sale price of the
day. Price
19
<PAGE>
information on listed securities is taken from the exchange where the security
is primarily traded. Unlisted equity securities and listed securities not
traded on the valuation date for which market quotations are readily available
are valued neither exceeding the current asked prices nor less than the cur-
rent bid prices. Quotations of foreign securities in a foreign currency are
converted to U.S. dollar equivalents. The converted value is based upon the
bid price of the foreign currency against U.S. dollars quoted by any major
bank or by a broker.
Securities purchased with remaining maturities of 60 days or less are valued
at amortized cost when the Board of Trustees determines that amortized cost
reflects fair value.
The value of other assets and securities for which no quotations are readily
available (including restricted securities) is determined in good faith at
fair value using methods determined by the Fund's Board of Trustees.
PERFORMANCE CALCULATIONS
The Portfolio measures performance by calculating total return. Total return
figures are based on historical earnings and are not intended to indicate fu-
ture performance.
Total return is the change in value of an investment in the Portfolio over a
given period, assuming reinvestment of any dividends and capital gains. A cu-
mulative or aggregate total return reflects actual performance over a stated
period of time. An average annual total return is a hypothetical rate of re-
turn that, if achieved annually, would have produced the same cumulative total
return if performance had been constant over the entire period.
Performance will be calculated separately for Institutional Class and Serv-
ice Class Shares. Dividends paid by the Portfolio with respect to Institu-
tional Class and Service Class Shares, to the extent any dividends are paid,
will be calculated in the same manner at the same time on the same day and
will be in the same amount, except that service fee and any incremental trans-
fer agency costs relating to Service Class Shares will be borne exclusively by
that class.
The Portfolio's performance may be compared to data prepared by independent
services which monitor the performance of investment companies, data reported
in financial and industry publications, and various indices, all as further
described in the Portfolio's SAI. This information may also be included in
sales literature and advertising.
The Portfolio's Annual Report to Shareholders for the most recent fiscal
year end contains additional performance information that includes comparisons
with appropriate indices. The Annual Report is available without charge. Con-
tact the UAM Funds Service Center at the address or telephone number on the
cover of this Prospectus.
20
<PAGE>
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
DIVIDENDS AND CAPITAL GAINS
The Portfolio will normally distribute substantially all of its net invest-
ment income (for tax purposes) to shareholders in the form of an annual divi-
dend. If any net capital gains are realized, the Portfolio will normally dis-
tribute them annually. All dividends and capital gains distributions will be
automatically reinvested in additional shares of the Portfolio unless the Fund
is notified in writing that the shareholder elects to receive distributions in
cash.
FEDERAL TAXES
The Portfolio intends to qualify as a "regulated investment company" under
subchapter M of the Internal Revenue Code of 1986, as amended, for federal in-
come tax purposes and to meet all other requirements that are necessary for it
(but not its shareholders) to be exempt from federal taxes on income and gains
paid to shareholders in the form of dividends. To do this, the Portfolio must,
among other things, distribute substantially all of its ordinary income and
net capital gains on an annual basis and maintain a portfolio of investments
which satisfies certain diversification criteria.
Dividends paid by the Portfolio from net investment income, whether in cash
or reinvested in shares, are taxable to shareholders as ordinary income.
Short-term capital gains will be taxed as ordinary income. Long-term capital
gains distributions are taxed as long-term capital gains. Shareholders will be
notified annually of dividend income earned for tax purposes.
Dividends declared in October, November and December to shareholders of rec-
ord in such a month will be treated as if they had been paid by the Fund and
received by the shareholders on December 31 of the same calendar year, pro-
vided that the dividends are paid before February of the following year.
The Fund is required by Federal law to withhold 31% of reportable payments
paid to shareholders who have not complied with IRS regulations. In order to
avoid this withholding requirement, you must certify that your Social Security
or Taxpayer Identification Number you have provided is correct and that either
you are not currently subject to backup withholding or you are exempt from
backup withholding. This certification must be made on the Application or on a
separate form supplied by the Fund.
Dividends and interest received by the Portfolio may give rise to withhold-
ing and other taxes imposed by foreign countries. These taxes reduce the Port-
folio's dividends but are included in the taxable income reported on your tax
statement if the Portfolio qualifies for this tax treatment and elects to pass
it through to you. Consult a tax adviser for more information regarding deduc-
tions and credits for foreign taxes.
21
<PAGE>
INVESTMENT ADVISER
The Adviser is an international investment adviser and is an affiliate of
the MJ Group, in Glasgow, Scotland. The MJ Group's origins date back to 1907,
and it currently has $7 billion in assets under management. The MJ Group has a
200-member staff including 40 investment professionals. It became a subsidiary
of United Asset Management Corporation in 1993. The Adviser, the SEC-regis-
tered entity within the MJ Group, has $1.4 billion of assets under management
and has U.S. offices in Chicago.
The Portfolio pays an annual fee in monthly installments to the Adviser for
advisory services. This fee is accrued daily and paid every month as a per-
centage of the average net assets in the Portfolio for that month. The per-
centage fee on an annual basis is 0.75%. This investment advisory fee is
higher than that paid by many mutual funds but not necessarily higher than
fees paid by funds with investment objectives similar to that of the Portfo-
lio.
The Adviser may compensate its affiliated companies for referring investors
to the Portfolio. The Distributor, UAM, the Adviser, or any of their affili-
ates, may, at its own expense, compensate a Service Agent or other person for
marketing, shareholder servicing, record-keeping and/or other services per-
formed with respect to the Fund, the Portfolio or any Class of Shares of the
Portfolio. The person making such payments may do so out of its revenues, its
profits or any other source available to it. When such services arrangements
are in effect, they are made generally available to all qualified service
providers.
The Distributor, the Adviser and certain of their other affiliates also par-
ticipate, at the date of this Prospectus, in an arrangement with Smith Barney
Inc. under which Smith Barney provides certain defined contribution plan mar-
keting and other shareholder services and receives from such entities .15 of
1% of the daily net asset value of Institutional Class Shares held by Smith
Barney's eligible customer accounts in addition to amounts payable to all
selling dealers. The Fund also compensates Smith Barney for services it pro-
vides to certain defined contribution plan shareholders that are not otherwise
provided by UAMFSI.
The investment professional at the Adviser responsible for the day-to-day
management of the Portfolio and his qualifications are as follows:
RODGER SCULLION, MANAGING DIRECTOR OF THE ADVISER, has 25 years of invest-
ment experience, the last 13 years based in Glasgow with the MJ Group. He is
the portfolio manager of the Murray Smaller Markets Investment Trust, a
closed-end investment fund registered in the United Kingdom, which invests in
as many as 45 markets worldwide. Mr. Scullion is the Adviser's Chief Invest-
ment Officer and the lead person on the country allocation team. During his
tenure at the MJ Group, he has held portfolio management responsibilities for
investments in the U.S., Europe, Japan and the Far East.
22
<PAGE>
ADMINISTRATIVE SERVICES
UAM Fund Services, Inc. ("UAMFSI"), a wholly-owned subsidiary of United As-
set Management Corporation, is responsible for performing and overseeing ad-
ministrative, fund accounting, dividend disbursing and transfer agent services
provided to the Fund and its Portfolios. UAMFSI's principal office is located
at 211 Congress Street, Boston, MA 02110. UAMFSI has subcontracted some of
these services to Chase Global Funds Services Company ("CGFSC"), an affiliate
of The Chase Manhattan Bank, by a Mutual Funds Service Agreement dated April
15, 1996. CGFSC is located at 73 Tremont Street, Boston, MA 02108.
Each Portfolio pays UAMFSI a two part monthly fee: a Portfolio-specific fee
which is retained by UAMFSI and a sub-administration fee which UAMFSI in turn
pays to CGFSC. The following Portfolio-specific fees are calculated from the
aggregate net assets of each Portfolio:
<TABLE>
<CAPTION>
RATE
----
<S> <C>
MJI International Equity Portfolio..................................... .06%
</TABLE>
CGFSC's monthly fee for its services is calculated on an annualized basis as
follows:
0.19 of 1% of the first $200 million of combined Fund assets;
0.11 of 1% of the next $800 million of combined Fund assets;
0.07 of 1% of combined Fund assets in excess of $1 billion but less than
$3 billion;
0.05 of 1% of combined Fund assets in excess of $3 billion.
Fees are allocated among the Portfolios on the basis of their relative as-
sets and are subject to a graduated minimum fee schedule per Portfolio, which
starts at $2,000 per month and increases to $70,000 annually after two years.
If a separate class of shares is added to a Portfolio, its minimum annual fee
increases by $20,000.
DISTRIBUTOR
UAM Fund Distributors, Inc., a wholly-owned subsidiary of UAM with its prin-
cipal office located at 211 Congress Street, Boston, Massachusetts 02110, dis-
tributes the shares of the Fund. Under the Fund's Distribution Agreement (the
"Agreement"), the Distributor, as agent of the Fund, agrees to use its best
efforts as sole distributor of the Fund's shares. The Distributor does not re-
ceive any fee or other compensation under the Agreement with respect to this
Portfolio. The Agreement continues in effect as long as it is approved at
least annually by the Fund's Board of Trustees. Those approving the Agreement
include a majority of Trustees who are neither parties to the Agreement nor
interested persons of any such party. This Agreement provides that the Fund
will bear the costs of the registration of its
23
<PAGE>
shares with the SEC and various states and the printing of its prospectuses,
SAIs and reports to shareholders.
PORTFOLIO TRANSACTIONS
The Advisory Agreements for the Fund's Portfolios authorize the Adviser to
select the brokers or dealers that will execute the purchases and sales of in-
vestment securities for each Portfolio. The Agreements direct the Adviser to
use its best efforts to obtain the best available price and most favorable ex-
ecution for all transactions of the Portfolios. If consistent with the inter-
ests of the Portfolios, the Adviser may select brokers on the basis of re-
search, statistical and pricing services these brokers provide to the Portfo-
lios in addition to required Adviser services. Such brokers may be paid a
higher commission than that which another qualified broker would have charged
for effecting the same transaction, provided that such commissions are paid in
compliance with the Securities Exchange Act of 1934, as amended, and that the
Adviser determines in good faith that the commission is reasonable in terms
either of the transaction or the overall responsibility of the Adviser to the
Portfolios and the Adviser's other clients. Although not a typical practice,
the Adviser may place portfolio orders with qualified broker-dealers who refer
clients to the Adviser.
If a purchase or sale of securities is consistent with the investment poli-
cies of a Portfolio and one or more other clients served by the Adviser is
considering a purchase at or about the same time, transactions in such securi-
ties will be allocated among the Portfolio and clients in a manner deemed fair
and reasonable by the Adviser. Although there is no specified formula for al-
locating such transactions, allocations are subject to periodic review by the
Fund's Trustees.
GENERAL INFORMATION
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Fund was organized as a Delaware business trust on May 18, 1994 under
the name "The Regis Fund II." On October 31, 1995, the name of the Fund was
changed to "UAM Funds Trust." The Fund's Agreement and Declaration of Trust
permits the Fund to issue an unlimited number of shares of beneficial inter-
est, without par value. The Trustees have the power to designate one or more
series ("Portfolios") or classes of shares of beneficial interest without fur-
ther action by shareholders.
At its discretion, the Board of Trustees may create additional Portfolios
and classes of shares. The shares of each Portfolio are fully paid and nonas-
sessable, and have no preference as to conversion, exchange, dividends, re-
tirement or other features and no pre-emptive rights. They have noncumulative
voting rights, which means that holders of more than 50% of shares voting for
the election of Trustees can elect 100% of the Trustees. A shareholder is en-
titled to one vote for each full
24
<PAGE>
share held (and a fractional vote for each fractional share held), then stand-
ing in his name on the books of the Fund.
As of December 6, 1996, Freya Fanning & Company, 400 Essex St., Beverly
Farms, MA, held of record 31.2% of the outstanding shares of the MJI Interna-
tional Equity Portfolio Institutional Class Shares for which ownership is dis-
claimed or presumed disclaimed. The persons or organizations owning 25% or
more of the outstanding shares of a Portfolio may be presumed to "control" (as
that term is defined in the 1940 Act) such Portfolio. As a result, those per-
sons or organizations could have the ability to vote a majority of the shares
of the Portfolio on any matter requiring the approval of shareholders of such
Portfolio.
Both Institutional Class and Institutional Service Class Shares represent an
interest in the same assets of a Portfolio. Institutional Service Class Shares
bear certain expenses related to shareholder servicing, and may bear expenses
related to the distribution of such shares. Institutional Service Class Shares
have exclusive voting rights with respect to matters relating to such distri-
bution expenditures. For information about Service Class Shares of the Portfo-
lios, contact the UAM Funds Service Center.
Annual meetings will not be held except as required by the 1940 Act and
other applicable laws. The Fund has undertaken that its Trustees will call a
meeting of shareholders if such a meeting is requested in writing by the hold-
ers of not less than 10% of the outstanding shares of the Fund. The Fund will
assist shareholder communications in such matters.
CUSTODIAN
The Chase Manhattan Bank serves as custodian of the Fund's assets.
ACCOUNTANTS
Price Waterhouse LLP acts as the independent accountants for the Fund and
audits its financial statements annually.
REPORTS
Investors will receive unaudited semi-annual financial statements and annual
financial statements audited by Price Waterhouse LLP.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be made by contacting the UAM Funds Service Center
at the address or telephone number listed on the cover of this Prospectus.
LITIGATION
The Fund is not involved in any litigation.
25
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS NOT CONTAINED IN THIS PROSPECTUS, OR IN THE PORTFOLIO'S STATEMENT
OF ADDITIONAL INFORMATION, IN CONNECTION WITH THE OFFERING MADE BY THIS PRO-
SPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR ITS REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFERING BY THE FUND IN ANY JURISDICTION IN WHICH SUCH OF-
FERING MAY NOT BE LAWFULLY MADE.
26
<PAGE>
UAM FUNDS -- INSTITUTIONAL CLASS SHARES
ACADIAN ASSET MANAGEMENT, INC.
Acadian Emerging Markets Portfolio
Acadian International Equity Portfolio
BHM&S Total Return Bond Portfolio
Chicago Asset Management Intermediate Bond Portfolio
Chicago Asset Management Value/Contrarian Portfolio
C&B Balanced Portfolio
C&B Equity Portfolio
C&B Equity Portfolio for Taxable Investors
C&B Mid Cap Equity Portfolio
McKee Domestic Equity Portfolio
McKee International Equity Portfolio
McKee U.S. Government Portfolio
DSI Balanced Portfolio
DSI Disciplined Value Portfolio
DSI Limited Maturity Bond Portfolio
DSI Money Market Portfolio
FMA Small Company Portfolio
FPA Crescent Portfolio
Hanson Equity Portfolio
ICM Equity Portfolio
ICM Fixed Income Portfolio
ICM Small Company Portfolio
IRC Enhanced Index Portfolio
Jacobs International Octagon Portfolio
MJI International Equity Portfolio
Newbold's Equity Portfolio
NWQ Balanced Portfolio
NWQ Value Equity Portfolio
Rice, Hall James Small Cap Portfolio
Rice, Hall James Small/Mid Cap Portfolio
Sirach Equity Portfolio
Sirach Fixed Income Portfolio
Sirach Growth Portfolio
Sirach Short-Term Reserves Portfolio
Sirach Special Equity Portfolio
Sirach Strategic Balanced Portfolio
SAMI Preferred Stock Income Portfolio
Sterling Partners' Balanced Portfolio
Sterling Partners' Equity Portfolio
Sterling Partners' Short-Term Fixed Income Portfolio
27
<PAGE>
Sterling Partners' Small Cap Value Portfolio
TS&W Balanced Portfolio
TS&W Equity Portfolio
TS&W Fixed Income Portfolio
TS&W International Equity Portfolio
28
<PAGE>
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
1-800-638-7983
Investment Adviser
Murray Johnstone International Ltd.
Glasgow, Scotland
Distributor
UAM FUND DISTRIBUTORS, INC.
211 Congress Street
Boston, MA 02110
PROSPECTUS
January 3, 1997
<PAGE>
[LOGO OF UAM FUNDS APPEARS HERE]
MJI International
Equity Portfolio
Institutional Service
Class Shares
January 3, 1997
P R O S P E C T U S
<PAGE>
[LOGO OF UAM FUNDS APPEARS HERE]
UAM FUNDS SERVICE CENTER
C/O CHASE GLOBAL FUNDS SERVICES COMPANY
P.O. BOX 2798
BOSTON, MA 02208-2798
1-800-638-7983
- -------------------------------------------------------------------------------
MJI INTERNATIONAL EQUITY PORTFOLIO
INSTITUTIONAL SERVICE CLASS SHARES
INVESTMENT ADVISER: MURRAY JOHNSTONE INTERNATIONAL LTD.
- -------------------------------------------------------------------------------
PROSPECTUS -- JANUARY 3, 1997
UAM Funds Trust (the "Fund"), is an open-end investment company known as a
"mutual fund". The Fund consists of multiple series (known as "Portfolios")
each of which has different investment objectives and policies. MJI Interna-
tional Equity Portfolio currently offers two classes of shares: Institutional
Class Shares and Institutional Service Class Shares ("Service Class Shares").
Shares of each class represent equal, pro rata interests in the Portfolio and
accrue dividends in the same manner except that Service Class Shares bear fees
payable by the class (at the rate of .40% per annum) to financial institutions
for services they provide to the owners of such shares. (See "SERVICE AND DIS-
TRIBUTION PLANS.") The securities offered in this Prospectus are Service Class
Shares of one diversified, no-load Portfolio of the Fund managed by Murray
Johnstone International Ltd.
MJI INTERNATIONAL EQUITY PORTFOLIO. MJI International Equity Portfolio (the
"Portfolio") seeks to maximize total return, including both capital apprecia-
tion and current income, by investing primarily in the common stocks of compa-
nies based outside of the United States. Under normal circumstances, at least
65% of the Portfolio's total assets will be invested in securities of issuers
domiciled in at least three countries other than the United States.
There can be no assurance that the Portfolio will achieve its stated objec-
tive.
Keep this Prospectus for future reference. It contains information that you
should know before you invest. A "Statement of Additional Information" (SAI)
containing additional information about the Fund has been filed with the Secu-
rities and Exchange Commission. The SAI is dated January 3, 1997 and has been
incorporated by reference into this Prospectus. For a free copy of the SAI
contact the UAM Funds Service Center at the address or telephone number above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Fund Expenses.............................................................. 1
Prospectus Summary......................................................... 3
Risk Factors............................................................... 4
Investment Objective....................................................... 4
Investment Policies........................................................ 4
Other Investment Policies.................................................. 6
Investment Limitations..................................................... 12
Purchase of Shares......................................................... 13
Redemption of Shares....................................................... 16
Service and Distribution Plans............................................. 18
Shareholder Services....................................................... 20
Valuation of Shares........................................................ 20
Performance Calculations................................................... 21
Dividends, Capital Gains Distributions and Taxes........................... 22
Investment Adviser......................................................... 23
Administrative Services.................................................... 23
Distributor................................................................ 24
Portfolio Transactions..................................................... 24
General Fund Information................................................... 25
UAM Funds -- Service Class Shares.......................................... 27
</TABLE>
<PAGE>
FUND EXPENSES
The following table illustrates expenses and fees that a shareholder of the
Portfolio's Service Class Shares would incur. Transaction fees may be charged
if a broker-dealer or other financial intermediary deals with the Fund on your
behalf. (See "PURCHASE OF SHARES.")
SHAREHOLDER TRANSACTION EXPENSES.
<TABLE>
<S> <C>
Sales Load Imposed on Purchases......................................... NONE
Sales Load Imposed on Reinvested Dividends.............................. NONE
Deferred Sales Load..................................................... NONE
Redemption Fees......................................................... NONE
Exchange Fees........................................................... NONE
</TABLE>
ESTIMATED ANNUAL FUND OPERATING EXPENSES
(as a percentage of net assets)
<TABLE>
<S> <C>
Investment Advisory Fees............................................ 0.75 %
Administrative Fees................................................. 1.32 %
12b-1 Fees (Including Shareholder Servicing Fees)*.................. 0.25 %
Other Expenses...................................................... 1.33 %
Advisory Fees Waived and Expenses Assumed........................... (1.90)%
-----
Total Operating Expenses (After Fee Waiver)......................... 1.75 %+
=====
</TABLE>
- -----------
+ The Adviser has voluntarily agreed to waive a portion of its advisory fees
and to assume operating expenses to keep the Portfolio's Service Class
Shares' total annual operating expenses (excluding interest, taxes and ex-
traordinary expenses) from exceeding 1.75% of average daily net assets until
further notice. If it were not for the fee waiver and/or reimbursement, the
Portfolio's Service Class Shares total annual operating expenses would be
3.65% of average daily net assets.
* The Service Class Shares may bear service fees of 0.25%. Long-term share-
holders may pay more than the economic equivalent of the maximum front-end
sales charge permitted by rules of the National Association of Securities
Dealers, Inc. (See "SERVICE AND DISTRIBUTION PLANS.")
The table above shows various fees and expenses an investor may bear di-
rectly or indirectly. The fees and expenses set forth above are estimates
based upon the Portfolio's Institutional Class Shares operations during the
fiscal year ended April 30, 1996, except that such information has been re-
stated to reflect12b-1 Fees, current administrative fees and expense caps.
1
<PAGE>
The following example illustrates expenses a shareholder would pay on a
$1,000 investment over various time periods assuming (1) a 5% annual rate of
return and (2) redemption at the end of each time period. The Portfolios charge
no redemption fees of any kind.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Expenses:.................................... $19 $60 $104 $224
</TABLE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EX-
PENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE
SHOWN.
2
<PAGE>
PROSPECTUS SUMMARY
INVESTMENT ADVISER
Murray Johnstone International Ltd. (the "Adviser") is an international in-
vestment adviser and is an affiliate of the Murray Johnstone Group ("MJ
Group"), in Glasgow, Scotland. The MJ Group's origins date back to 1907, and
it currently has $7 billion in assets under management. The MJ Group has a
200-member staff including 40 investment professionals. It became a subsidiary
of United Asset Management Corporation in 1993. The Adviser, the SEC-regis-
tered entity within the MJ Group, has $1.4 billion of assets under management
and has U.S. offices in Chicago. (See "INVESTMENT ADVISER.")
PURCHASE OF SHARES
Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the
"Distributor") to investors at net asset value without a sales commission.
Share purchases may be made by sending investments directly to the Fund. The
minimum initial investment in the Portfolio is $2,500. The minimum initial in-
vestment for IRA accounts is $500. The minimum initial investment for spousal
IRA accounts is $250. The minimum for any subsequent investment is $100. Cer-
tain exceptions to the initial or minimum investment amounts may be made by
the officers of the Fund. (See "PURCHASE OF SHARES.")
DIVIDENDS AND DISTRIBUTIONS
The Portfolio will normally distribute substantially all of its net invest-
ment income in an annual dividend. Any realized net capital gains will also be
distributed annually. Distributions will be reinvested in the Portfolio's
shares automatically unless an investor elects to receive cash distributions.
(See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES.")
REDEMPTIONS OF SHARES
Shares of the Portfolio may be redeemed at any time, without cost, at the
net asset value of the Portfolio next determined after receipt of the redemp-
tion request. The redemption price may be more or less than the purchase
price. (See""REDEMPTION OF SHARES.")
ADMINISTRATIVE SERVICES
UAM Fund Services, Inc. ("UAMFSI"), a wholly-owned subsidiary of United As-
set Management Corporation ("UAM"), is responsible for performing and oversee-
ing administration, dividend disbursing and transfer agency services provided
to the Fund and its Portfolios by third-party service providers. (See "ADMIN-
ISTRATIVE SERVICES.")
3
<PAGE>
RISK FACTORS
The value of the Portfolio's shares will fluctuate in response to changes in
market and economic conditions as well as the financial conditions and pros-
pects of the issuers in which the Portfolio invests. Prospective investors
should consider the following: (1) The Portfolio may invest in repurchase
agreements which entail a risk of loss should the seller default on its trans-
action; (2) The Portfolio may lend its investment securities which entails a
risk of loss should a borrower fail financially; (3) The Portfolio may pur-
chase securities on a when-issued basis which do not earn interest until is-
sued and may decline or appreciate in market value prior to their delivery to
the Portfolio; (4) The Portfolio may engage in various currency strategies to
seek to hedge its investments against movements in security prices, interest
rates, and exchange rates by the use of derivatives, including forward con-
tracts, options and futures as well as options on futures. Such strategies are
commonly referred to as "derivatives" and involve the risk of imperfect corre-
lation in movements in the price of options and futures and movements in the
price of securities, interest rates or currencies which are the subject of the
hedge. To the extent these transactions involve foreign securities or curren-
cies, they are also subject to the risk factors associated with foreign in-
vestments generally. There can be no assurance that a liquid secondary market
for these hedging techniques will exist at any specific time. (See "INVESTMENT
POLICIES.").
INVESTMENT OBJECTIVE
The Portfolio seeks to maximize total return, including both capital appre-
ciation and current income, by investing primarily in the common stocks of
companies based outside of the United States. Under normal circumstances, at
least 65% of the Portfolio's total assets will be invested in at least three
different countries other than the United States. There can be no assurance
that the Portfolio will achieve its stated objective.
INVESTMENT POLICIES
The Portfolio's investment process begins by seeking to determine the best
possible allocation among international stock markets. The Portfolio's Adviser
evaluates markets through a proprietary system which analyzes economic fac-
tors, stock prices in each market, market performance and trends in monetary
policy. Drawing on this information, the Adviser decides which markets the
Portfolio should invest in and in what proportion.
Once the country allocation decision has been made, the Adviser selects un-
dervalued stocks in that market. The Adviser rates companies according to the
quality of their management, market position, financial strength, ability to
earn competitive returns on equity and assets, and growth potential. The Port-
folio will invest in stocks that the Adviser determines are undervalued com-
pared to industry
4
<PAGE>
norms within their countries. It is expected that investments will be diversi-
fied throughout the world and within markets to minimize specific country and
currency risks. While investments will be made primarily in securities of com-
panies domiciled in developed countries, investments will also be made in de-
veloping countries. (See "FOREIGN INVESTMENT RISK FACTORS.")
Under normal circumstances, at least 65% of the Portfolio's total assets
will be invested in common stocks of companies in at least three countries
outside the United States. It is expected that generally, the Portfolio will
invest in common stocks of companies listed on U.S. or foreign stock ex-
changes, but it may also invest in stocks traded in the over-the-counter mar-
ket. Common stocks for this purpose also include securities having common
stock characteristics such as rights and warrants to purchase common stocks.
The Portfolio may also invest in convertible securities and preferred stocks.
The Portfolio may also invest in foreign equity securities in the form of
American Depositary Receipts (ADRs), European Depositary Receipts (EDRS) and
other similar global instruments. ADRs (sponsored or unsponsored) are receipts
typically issued by a U.S. bank or trust company evidencing ownership of the
underlying foreign securities. Most ADRs are traded on a U.S. stock exchange.
Issuers of unsponsored ADRs are not contractually obligated to disclose mate-
rial information in the U.S. and, therefore, there may not be a correlation
between such information and the market value of the unsponsored ADR. EDRs are
receipts typically issued by a European bank or trust company evidencing own-
ership of the underlying foreign securities.
FOREIGN INVESTMENT RISK FACTORS
Investors should recognize that investing in foreign securities involves
certain risks which are not typically associated with investing in domestic
securities. Since securities issued by foreign entities may be denominated in
foreign currencies, and the Portfolio may temporarily hold uninvested reserves
in bank deposits in foreign currencies, the Portfolio's value may rise or fall
depending on currency exchange rates. The Portfolio may also have to pay a fee
to convert funds from one currency to another.
In addition, non-U.S.-based companies are not subject to the same account-
ing, auditing and financial reporting standards as are domestic companies.
There may be less publicly-available information about non-U.S.-based compa-
nies which may make it difficult to make investment decisions. Also, stock
markets outside the U.S. are typically less liquid -- that is, it is more dif-
ficult to sell large quantities of a stock without driving its price down or
to buy without pushing its price up. Market regulation may be less rigorous in
some markets. Finally, political factors may have an impact in the form of
confiscatory taxation, expropriation or political instability in international
markets.
Although the Portfolio will seek the most favorable trading costs available
in any given market, investors should recognize that foreign commissions are
gener-
5
<PAGE>
ally higher than those in the U.S. In addition, custodial expenses, that is,
fees paid to financial institutions for holding the Portfolio's securities,
will generally be higher than would be the case in the U.S.
Some foreign governments also levy withholding taxes against dividend and
interest income. Although in some countries a portion of the taxes is recover-
able, the non-recovered portion of foreign withholding taxes will reduce the
income the Portfolio receives from the companies comprising its investments.
Investing in the foreign securities of developing countries presents addi-
tional considerations. The economies of individual developing countries may
differ favorably or unfavorably from the United States economy in such re-
spects as growth of gross domestic product, rate of inflation, currency depre-
ciation, capital reinvestment, resource self-sufficiency and balance of pay-
ments position. Further, the economies of developing countries generally are
heavily dependent upon international trade and, accordingly, have been and may
continue to be adversely affected by trade barriers, exchange controls, man-
aged adjustments in relative currency values and other protectionist measures
imposed or negotiated by the countries with which they trade. These economies
also have been and may continue to be adversely affected by economic condi-
tions in the countries with which they trade.
With respect to any developing country, there is the possibility of nation-
alization, expropriation or confiscatory taxation, repatriation of investment
income, capital and the proceeds of sales by foreign investors, political
changes, governmental regulation, social instability or diplomatic develop-
ments (including war) which could adversely affect the economics of such coun-
tries or the value of the Portfolio's investments in those countries. In addi-
tion, it may be difficult to obtain and enforce a judgement in a court outside
of the United States.
The Portfolio may engage in various investment techniques such as futures
contracts, options on futures contracts, options, and interest rate swap
transactions. (See "HEDGING AND RELATED STRATEGIES AND RISK CONSIDERATIONS.")
OTHER INVESTMENT POLICIES
The Portfolio may also, under normal circumstances, invest up to 35% of its
assets, unless restricted by additional limitations described below or in the
Portfolio's SAI, in the following securities, investments or investment tech-
niques.
SHORT-TERM INVESTMENTS
In order to earn a return on uninvested assets, meet anticipated redemp-
tions, or for temporary defensive purposes, the Portfolio may invest a portion
of its assets in domestic and foreign money market instruments including cer-
tificates of deposit, bankers' acceptances, time deposits, U.S. Government ob-
ligations, U.S. Govern
6
<PAGE>
ment agency securities, short-term corporate debt securities, and commercial
paper rated A-1 or A-2 by Standard & Poor's Corporation or Prime-1 or Prime-2
by Moody's Investors Service, Inc. or if unrated, determined by the Adviser to
be of comparable quality.
Time deposits maturing in more than seven days will not be purchased by the
Portfolio, and time deposits maturing from two business days through seven
calendar days will not exceed 10% of the total assets of a Portfolio. The
Portfolio will not invest in any security issued by a commercial bank unless
(i) the bank has total assets of at least $1 billion, or the equivalent in
other currencies, (ii) in the case of U.S. banks, it is a member of the Fed-
eral Deposit Insurance Corporation, and (iii) in the case of foreign branches
of U.S. banks, the security is, in the opinion of the Adviser, of an invest-
ment quality comparable with other debt securities which may by purchased by
the Portfolio.
The Fund has received permission from the Securities and Exchange Commission
(the "SEC") to deposit the daily uninvested cash balances of the Fund's Port-
folios, as well as cash for investment purposes, into one or more joint ac-
counts and to invest the daily balance of the joint accounts in the following
short-term investments: fully collateralized repurchase agreements, interest-
bearing or discounted commercial paper including dollar-denominated commercial
paper of foreign issuers, and any other short-term money market instruments
including variable rate demand notes and tax-exempt money instruments. By en-
tering into these investments on a joint basis, it is expected that the Port-
folio may earn a higher rate of return on investments relative to what it
could earn individually.
The Fund has received permission from the SEC for each of its Portfolios to
invest, for cash management purposes, the greater of 5% of its total assets or
$2.5 million in the Fund's DSI Money Market Portfolio (See "INVESTMENT
COMPANIES.")
REPURCHASE AGREEMENTS
The Portfolio may invest in repurchase agreements collateralized by U.S.
Government securities, certificates of deposit, and certain bankers' accept-
ances and other securities outlined above under "SHORT-TERM INVESTMENTS." In a
repurchase agreement, the Portfolio buys a security and simultaneously commits
to sell that security back at an agreed upon price plus an agreed upon market
rate of interest. Under a repurchase agreement, the seller is also required to
maintain the value of securities subject to the agreement at not less than
100% of the repurchase price. The Administrator and the Adviser will mark to
market daily the value of the securities purchased. The use of repurchase
agreements involves certain risks. For example, a default by the seller of the
agreement may cause the Portfolio to experience a loss or delay in the liqui-
dation of the collateral securing the repurchase agreement. The Portfolio
might also incur disposition costs in liquidating the
7
<PAGE>
collateral. While the Fund's management acknowledges these risks, it is ex-
pected that they can be controlled through stringent security selection crite-
ria and careful monitoring procedures. The Fund has received permission from
the SEC to pool daily uninvested cash balances of the Fund's Portfolios in or-
der to invest in repurchase agreements on a joint basis. By entering into joint
repurchase agreements, the Portfolio may incur lower transactions costs and
earn higher rates of interest on joint repurchase agreements. The Portfolio's
contribution would determine its return from a joint repurchase agreement. (See
"SHORT TERM INVESTMENTS.")
LENDING OF SECURITIES
The Portfolio may lend its investment securities to qualified institutional
investors as a means of earning income. The Portfolio will not loan securities
to the extent that greater than onethird of its assets at fair market value
would be committed to loans. During the term of a loan, the Portfolio is sub-
ject to a gain or loss depending on any increase or decrease in the market
price of the securities loaned. Lending of securities is subject to review by
the Fund's Board of Trustees. All relevant facts and circumstances, including
the creditworthiness of the broker, dealer or institution, will be considered
in making decisions about securities lending.
An investment company may pay reasonable negotiated fees in connection with
loaned securities so long as such fees are set forth in a written contract and
approved by its Board of Trustees. The Portfolio will continue to retain any
voting rights with respect to loaned securities. If a material event occurs af-
fecting an investment on loan, the loan must be called and the securities vot-
ed.
WHEN-ISSUED, FORWARD DELIVERY AND DELAYED SETTLEMENT SECURITIES
The Portfolio may purchase and sell securities on a "when-issued," "delayed
settlement," or "forward delivery" basis. "When-issued" or "forward delivery"
refers to securities whose terms and indenture are available, and for which a
market exists, but which are not available for immediate delivery. When-issued
and forward delivery transactions may be expected to occur a month or more be-
fore delivery is due. Delayed settlement is a term used to describe settlement
of a securities transaction in the secondary market which will occur sometime
in the future. No payment or delivery is made by the Portfolio until it re-
ceives payment or delivery from the other party to any of the above transac-
tions. It is possible that the market price of the securities at the time of
delivery may be higher or lower than the purchase price. The Portfolio will
maintain a separate account of cash or liquid securities at least equal to the
value of purchase commitments until payment is made. Typically, no income ac-
crues on securities purchased on a delayed delivery basis prior to the time de-
livery is made although the Portfolio may earn income on securities it has de-
posited in a segregated account.
8
<PAGE>
The Portfolio may engage in these types of purchases in order to buy securi-
ties that fit with its investment objectives at attractive prices -- not to in-
crease its investment leverage.
PORTFOLIO TURNOVER
Portfolio turnover is not anticipated to exceed 75%. In addition to Portfolio
trading costs, higher rates of portfolio turnover may result in the realization
of capital gains. (See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES" for
more information on taxation). The Portfolio will not normally engage in short-
term trading, but reserves the right to do so. The table set forth in "Finan-
cial Highlights" presents the Portfolio's historical portfolio turnover ratios.
INVESTMENT COMPANIES
The Portfolio reserves the right to invest up to 10% of its total assets,
calculated at the time of investment, in the securities of other open-end or
closed-end investment companies. No more than 5% of the investing Portfolio's
total assets may be invested in the securities of any one investment company,
nor may it acquire more than 3% of the voting securities of any other invest-
ment company. The Portfolio will indirectly bear its proportionate share of any
management fees paid by an investment company in which it invests in addition
to the advisory fee paid by the Portfolio.
The Fund has received permission from the SEC to allow each of its Portfolios
to invest, for cash management purposes, the greater of 5% of its total assets
or $2.5 million in the Fund's DSI Money Market Portfolio provided that the in-
vestment is consistent with the Portfolio's investment policies and restric-
tions. Based upon the Portfolio's assets invested in the DSI Money Market Port-
folio, the investing Portfolio's adviser will waive its investment advisory fee
and any other fees it earned as a result of the Portfolio's investment in the
DSI Money Market Portfolio. The investing Portfolio will bear expenses of the
DSI Money Market Portfolio on the same basis as all of its other shareholders.
HEDGING AND RELATED STRATEGIES AND RISK CONSIDERATIONS
The Portfolio may use options (both exchange-traded and over-the-counter) to
attempt to enhance income. To reduce the overall risk of its investments
(hedge), the Portfolio may use options, futures contracts, options on futures
and forward currency contracts. These instruments are commonly referred to as
derivatives. Hedging strategies may also be used in an attempt to manage the
Portfolio's exposure to changing interest rates, security prices and currency
exchange rates. The Portfolio may buy or sell futures contracts, write covered
call options and buy put and call options on any security, index or currency
including options and futures traded on foreign exchanges and options not
traded on exchanges. The Portfolio's ability to use these strategies may be
limited by market conditions, regulatory limits
9
<PAGE>
and tax considerations. The Portfolio's obligation under such hedging strate-
gies will be covered by the maintenance of a segregated account of cash, U.S.
Government securities or high grade debt obligations equal to at least 100% of
the Portfolio's commitment. The SAI contains further information on all of
these strategies and the risks associated with them.
The Portfolio may write or purchase options in privately negotiated transac-
tions ("OTC Options") as well as listed options. OTC Options can be closed out
only by agreement with the other party to the transaction. Any OTC Option pur-
chased by the Portfolio is considered an illiquid security. Any OTC Option
written by the Portfolio will be with a qualified dealer pursuant to an agree-
ment under which the Portfolio may repurchase the option at a formula price.
Such options are considered illiquid to the extent that the formula price ex-
ceeds the intrinsic value of the option. The Portfolio may not purchase or sell
futures contracts or related options for which the aggregate initial margin and
premiums exceed 5% of the fair market value of the Portfolio's assets. In order
to prevent leverage in connection with the purchase of futures contracts or
call options thereon by the Portfolio, an amount of cash, cash equivalents or
liquid high grade debt securities equal to the market value of the obligation
under the futures contracts or options (less any related market deposits) will
be maintained in a segregated account with the Fund's Custodian. The Portfolio
may not invest more than 15% of its net assets in illiquid securities and re-
purchase agreements which have a maturity of longer than seven days. A more
complete discussion of the potential risks involved in transactions in options
or futures contracts and related options is contained in the SAI.
The Portfolio may enter into forward foreign currency exchange contracts for
the purchase or sale of a specified currency at a specified future date either
with respect to specific transactions or with respect to portfolio positions.
For example, when the Adviser anticipates making a currency exchange transac-
tion in connection with the purchase or sale of a security, the Portfolio may
enter into a forward contract in order to set the exchange rate at which the
transaction will be made. The Portfolio also may enter into a forward contract
to sell an amount of a foreign currency approximating the value of some or all
of the Portfolio's securities denominated in such currency.
The Portfolio may use forward contracts in one currency or a basket of cur-
rencies to hedge against fluctuations in the value of another currency when the
Adviser anticipates there will be a correlation between the two and may use
forward currency contracts to shift the Portfolio's exposure to foreign cur-
rency fluctuations from one country to another. The purpose of entering into
these contracts is to minimize the risk to the Portfolio from adverse changes
in the relationship between the U.S. dollar and foreign currencies.
The Portfolio may enter into interest rate protection transactions, which
consist of interest rate swaps and interest rate caps, collars and floors, for
hedging
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<PAGE>
purposes. These transactions are commonly known as derivatives. A swap is an
agreement to exchange the return generated by one instrument for the return
generated by another instrument. The swaps in which the Portfolio may also en-
gage include interest rate caps, floors and collars under which one party pays
a single or periodic fixed amount (or premium), and the other party pays peri-
odic amounts on the movement of a specified index.
The Portfolio may enter into interest rate protection transactions to pre-
serve a return or spread on a particular investment or portion of its portfo-
lio or to protect against any increase in the price of securities it antici-
pates purchasing at a later date. The Portfolio will enter into interest rate
protection transactions only with banks and recognized securities dealers be-
lieved by the Adviser to present minimal credit risks in accordance with
guidelines established by the Fund's Board of Trustees. Interest rate swaps,
caps, floors and collars will be treated as illiquid securities and will
therefore, be subject to the Portfolio's investment restriction limiting in-
vestment in illiquid securities to no greater than 15% of net assets.
RISK CONSIDERATIONS. The Portfolio might not employ any of the hedging
strategies described above, and there can be no assurance that any strategy
used will succeed. If the Adviser incorrectly forecasts interest rates, market
values or other economic factors in utilizing a strategy for the Portfolio,
the Portfolio would be in a better position if it had not hedged at all. In
addition, the Portfolio will pay commissions and other costs in connection
with such hedging strategies, which may increase the Portfolio's expenses and
reduce its return.
The use of these strategies involves certain risks, including (1) the fact
that skills needed to use hedging instruments are different from those needed
to select the Portfolio's securities, (2) possible imperfect correlation, or
even no correlation, between price movements of hedging instruments and price
movements of the investments being hedged, (3) the fact that, while hedging
strategies can reduce the risk of loss, they can also reduce the opportunity
for gain, or even result in losses, by offsetting favorable price movements in
hedged investments and (4) the possible inability of the Portfolio to purchase
or sell a portfolio security at a time that otherwise would be favorable for
it to do so, or the possible need for the Portfolio to sell a portfolio secu-
rity at a disadvantageous time, due to the need for it to maintain "cover" or
to segregate securities in connection with hedging transactions and the possi-
ble inability of the Portfolio to close out or to liquidate its hedged posi-
tion.
RESTRICTED AND ILLIQUID SECURITIES
The Portfolio may purchase restricted securities that are not registered for
sale to the general public but which are eligible for resale to qualified in-
stitutional investors under Rule 144A of the Securities Act of 1933. Under the
supervision of the Fund's Board of Trustees, the Adviser determines the li-
quidity of such investments by considering all relevant factors. Provided that
a dealer or institutional
11
<PAGE>
trading market in such securities exists, these restricted securities are not
treated as illiquid securities for purposes of the Portfolio's investment limi-
tations. The Portfolio may invest up to 15% of its net assets in securities
that are illiquid. The prices realized from the sales of these securities could
be less than those originally paid by the Portfolio or less than what may be
considered the fair value of such securities.
INVESTMENT LIMITATIONS
The Portfolio will not:
(a) with respect to 75% of its assets, invest more than 5% of its total
assets at the time of purchase in the securities of any single issuer
(other than obligations issued or guaranteed as to principal and in-
terest by the U.S. Government or any of its agencies or instrumentali-
ties);
(b) with respect to 75% of its assets, purchase more than 10% of any class
of the outstanding voting securities of any issuer;
(c) invest more than 5% of its assets at the time of purchase in the secu-
rities of companies that have (with predecessors) a continuous operat-
ing history of less than 3 years;
(d) invest more than 25% of its assets in companies within a single indus-
try; however, there are no limitations on investments made in instru-
ments issued or guaranteed by the U.S. Government and its agencies.
(e) make loans except by purchasing debt securities in accordance with its
investment objective and policies or entering into repurchase agree-
ments or by lending its portfolio securities to banks, brokers, deal-
ers and other financial institutions so long as the loans are made in
compliance with the 1940 Act, as amended, or the Rules and Regulations
or interpretations of the SEC;
(f) (i) borrow, except from banks and as a temporary measure for extraor-
dinary or emergency purposes and then, in no event, in excess of 33
1/3% of the Portfolio's gross assets valued at the lower of market or
cost, and (ii) the Portfolio may not purchase additional securities
when borrowings exceed 5% of total assets; or
(g) pledge, mortgage or hypothecate any of its assets to an extent greater
than 33 1/3% of its total assets at fair market value.
The Portfolio's investment objective and investment limitations (a), (b),
(d), (e) and (f) (i) listed above are fundamental policies and may be changed
only with the approval of the holders of a majority of the outstanding voting
securities of the Portfolio. The other investment limitations described here,
those not specified as fundamental in the SAI, and the Portfolio's investment
policies are not fundamental, and the Fund's Board of Trustees may change them
without shareholder approval.
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<PAGE>
PURCHASE OF SHARES
Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the
"Distributor"), without a sales commission at the net asset value per share
next
determined after an order is received by the Fund and payment is received by
the Custodian. (See "VALUATION OF SHARES.") The minimum initial investment re-
quired is $2,500. The minimum initial investment for IRA accounts is $500. The
minimum initial investment for spousal IRA accounts is $250. Certain exceptions
may be made by the officers of the Fund.
The Portfolio issues two classes of shares: Institutional Class and Service
Class. The two classes of shares each represent interests in the same portfolio
of investments, have the same rights and are identical in all respects, except
that the Service Class Shares offered by this Prospectus bear shareholder ser-
vicing expenses and distribution plan expenses, and have exclusive voting
rights with respect to the Rule 12b-1 Distribution Plan pursuant to which the
distribution fee may be paid. The net income attributable to Service Class
Shares and the dividends payable on Service Class Shares will be reduced by the
amount of the shareholder servicing and distribution fees; accordingly, the net
asset value of the Service Class Shares will be reduced by such amount to the
extent the Portfolio has undistributed net income.
Some Service Agents may also impose additional or different conditions or
other account fees on the purchase and redemption of Portfolio shares, which
are not subject to the Rule12b-1 Service and Distribution Plans, which may in-
clude transaction fees and/or service fees paid by the Fund from the Fund as-
sets attributable to the Service Agent and, would not be imposed if shares of
the Portfolio were purchased directly from the Fund or the Distributor. The
Service Agents may provide shareholder services to their customers that are not
available to a shareholder dealing directly with the Fund. Each Service Agent
is responsible for transmitting to its customers a schedule of any such fees
and information regarding different purchase and redemption conditions. Share-
holders who are customers of Service Agents should consult their Service Agent
for information regarding these fees and conditions. A salesperson and any
other person entitled to receive compensation for selling or servicing Portfo-
lio shares may receive different compensation with respect to one particular
class of shares over another in the Fund.
Service Agents may enter confirmed purchase orders on behalf of their custom-
ers. If shares of a Portfolio are purchased in this manner, the Service Agent
must receive your investment order before the close of trading on the New York
Stock Exchange ("NYSE"), and transmit it to the Fund's Sub-Transfer Agent prior
to 4 p.m. to receive that day's share price. Proper payment for the order must
be received by the Sub-Transfer Agent no later than the time when the Portfolio
is priced on the following business day. Service Agents are responsible to
their customers and the Fund for timely transmission of all subscription and
redemption requests, investment information, documentation and money.
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<PAGE>
INITIAL INVESTMENT
BY MAIL
. Complete and sign an Application, and mail it, together with a check
payable to UAM Funds to:
UAM Funds Trust
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
Payment for purchases of shares received by mail will be credited to an ac-
count at the next share price calculated for the Portfolio after receipt. Pay-
ment does not need to be converted into Federal Funds (monies credited to the
Fund's Custodian Bank by a Federal Reserve Bank) before the Fund will accept
it for investment.
BY WIRE
. Telephone the UAM Funds Service Center and provide the account name, ad-
dress, telephone number, social security or taxpayer identification num-
ber, the Portfolio selected (Service Class Shares), the amount being
wired and the name of the bank wiring the funds. An account number will
then be provided to you. Next,
. instruct your bank to wire the specified amount to the Fund's Custodian:
The Chase Manhattan Bank
ABA #021000021
UAM Funds
Credit DDA #9102772952
Ref: Portfolio Name
Your Account Number
Your Account Name
Wire Control Number
. Forward a completed Application to the Fund at the address shown on the
form. Federal Funds purchases will be accepted only on a day on which
both the NYSE and the Custodian Bank are open for business.
ADDITIONAL INVESTMENTS
Additional investments can be made at any time. The minimum additional in-
vestment is $100. Shares can be purchased at net asset value by mailing a
check to the UAM Service Center (payable to "UAM Funds") or by wiring money to
the Custodian Bank using the instructions outlined above. When making addi-
tional investments, be sure that the account name and number is identified on
the check or wire.
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<PAGE>
Prior to wiring additional investments, notify the UAM Funds Service Center
by calling the number on the cover of this prospectus. Mail orders should in-
clude, when possible, the "Invest by Mail" stub which accompanies any Fund
confirmation statement.
OTHER PURCHASE INFORMATION
Investments received by 4 p.m. ET (the close of the NYSE) will be invested
at the share price calculated after the NYSE closes on that day. Investments
received after the close of the NYSE will be executed at the price computed on
the next day the NYSE is open. The Fund reserves the right, in its sole dis-
cretion, to suspend the offering of shares of the Portfolio or to reject pur-
chase orders when, in the judgment of management, such suspension or rejection
is in the best interests of the Fund. Purchases of the Portfolio's shares will
be made in full and fractional shares of the Portfolio calculated to three
decimal places. Certificates for fractional shares will not be issued. Certif-
icates for whole shares will not be issued except at the written request of
the shareholder.
IN-KIND PURCHASES
If accepted by the Fund, shares of the Portfolio may be purchased in ex-
change for securities which are eligible for acquisition by the Portfolio, as
described in this Prospectus. Securities to be exchanged which are accepted by
the Fund will be valued as described under "VALUATION OF SHARES" at the next
determination of net asset value after acceptance. Shares issued by the Port-
folio in exchange for securities will be issued at net asset value determined
as of the same time. All dividends, interest, subscription, or other rights
pertaining to such securities shall become the property of the Portfolio and
must be delivered to the Fund by the investor upon receipt from the issuer.
Securities acquired through an in-kind purchase will be acquired for invest-
ment and not for immediate resale.
The Fund will not accept securities in exchange for shares of the Portfolio
unless:
. at the time of exchange, such securities are eligible to be in-
cluded in the Portfolio (current market quotations must be readily
available for such securities);
. the investor represents and agrees that all securities offered to
be exchanged are liquid securities and not subject to any restric-
tions upon their sale by the Portfolio under the Securities Act of
1933, or otherwise; and
. the value of any such securities (except U.S. Government securi-
ties) being exchanged together with other securities of the same
issuer owned by the Portfolio will not exceed 5% of the net assets
of the Portfolio immediately after the transaction.
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<PAGE>
Investors who are subject to Federal taxation upon exchange may realize a
gain or loss for Federal income tax purposes depending upon the cost of secu-
rities or local currency exchanged. Investors interested in such exchanges
should contact the Adviser.
REDEMPTION OF SHARES
Shares of the Portfolio may be redeemed by mail or telephone, at any time,
without cost, at the net asset value of the Portfolio next determined after
receipt of the redemption request. No charge is made for redemptions. Any re-
demption may be more or less than the purchase price of your shares depending
on the market value of the investment securities held by the Portfolio.
BY MAIL
Address requests for redemption to the UAM Funds Service Center. Requests to
redeem shares must include:
. share certificates, if issued;
. a letter of instruction or an assignment specifying the number of
shares or dollar amount to be redeemed, signed by all registered
owners of the shares in the exact names in which they are regis-
tered;
. any required signature guarantees (see "SIGNATURE GUARANTEES"); and
. any other necessary legal documents, if required, in the case of
estates, trusts, guardianships, custodianships, corporations, pen-
sion and profit sharing plans and other organizations.
BY TELEPHONE
A redemption request by telephone requires the following:
. establish the telephone redemption privilege (and if desired, the
wire redemption privilege) by completing appropriate sections of
the Application; and
. call the Fund and instruct that the redemption proceeds be mailed
to you or wired to your bank.
The following tasks cannot be accomplished by telephone:
. changing the name of the commercial bank or the account designated
to receive redemption proceeds (this can be accomplished only by a
written request signed by each shareholder, with each signature
guaranteed);
. redemption of certificated shares by telephone.
16
<PAGE>
The Fund and its Sub-Transfer Agent will employ reasonable procedures to
confirm that instructions communicated by telephone are genuine, and they may
be liable for any losses if they fail to do so. These procedures include re-
quiring the investor to provide certain personal identification at the time an
account is opened, as well as prior to effecting each transaction requested by
telephone. In addition, all telephone transaction requests will be recorded
and investors may be required to provide additional telecopied written in-
structions of such transaction requests. The Fund or Sub-Transfer Agent may be
liable for any losses due to unauthorized or fraudulent telephone instructions
if the Fund or the Sub-Transfer Agent does not employ the procedures described
above. Neither the Fund nor the Sub-Transfer Agent will be responsible for any
loss, liability, cost or expense for following instructions received by tele-
phone that it reasonably believes to be genuine.
SIGNATURE GUARANTEES
Signature guarantees are required for the following redemptions:
. redemptions where the proceeds are to be sent to someone other than
the registered shareowner(s);
. redemptions where the proceeds are to be sent to someplace other
than the registered address; or
. share transfer requests.
Signature guarantees will be accepted from any eligible guarantor institu-
tion which participates in a signature guarantee program. Eligible guarantor
institutions include banks, brokers, dealers, credit unions, national securi-
ties exchanges, registered securities associations, clearing agencies and sav-
ings associations. Broker- dealers guaranteeing signatures must be a member of
a clearing corporation or maintain net capital of at least $100,000. Credit
unions must be authorized to issue signature guarantees.
OTHER REDEMPTION INFORMATION
Normally, the Fund will make payment for all shares redeemed under proper
procedures within one business day of and no more than seven days after the
receipt of the request, or earlier if required under applicable law. The Fund
may suspend the right of redemption or postpone the date at times when both
the NYSE and Custodian Bank are closed, or under any emergency circumstances
determined by the SEC.
If the Board of Trustees determines that it would be detrimental to the best
interests of remaining shareholders of the Fund to make payment wholly or
partly in cash, the Fund may pay redemption proceeds in whole or in part by a
distribution in-kind of liquid securities held by the Portfolio in lieu of
cash in conformity with applicable rules of the SEC. Investors may incur bro-
kerage charges on the sale of portfolio securities received in payment of re-
demptions.
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<PAGE>
SERVICE AND DISTRIBUTION PLANS
Under the Service Plan for Service Class Shares, adopted pursuant to Rule
12b-1 under the 1940 Act, the Fund may enter into service agreements with
Service Agents (broker-dealers or other financial institutions) who receive
fees with respect to the Fund's Service Class Shares owned by shareholders for
whom the Service Agent is the dealer or holder of record, or for whom the
Service Agent performs Servicing, as defined below. These fees are paid out of
the assets allocable to Service Class Shares to the Distributor or to the
Service Agents directly or through the Distributor. The Fund reimburses the
Distributor or the Service Agent for payments made at an annual rate of up to
0.25% of the average daily value of Service Class Shares owned by clients of
the Service Agent during the period payments for Servicing are being made to
it. Such payments are borne exclusively by the Service Class Shares. Each item
for which a payment may be made under the Service Plan constitutes personal
service and/or shareholder account maintenance and may constitute an expense
of distributing Fund shares as the SEC construes such term under Rule 12b-1.
The fees payable for servicing reflect actual expenses incurred up to the
limit described herein.
Servicing may include assisting clients in changing dividend options, ac-
count designations and addresses; performing subaccounting; establishing and
maintaining shareholder accounts and records; processing purchase and redemp-
tion transactions; investing client cash account balances automatically in
Service Class Shares; providing periodic statements showing a client's account
balance and integrating such statements with those of other transactions and
balances in the client's other accounts serviced by the Service Agent; arrang-
ing for bank wires; and such other services as the Fund may request, to the
extent the Service Agent is permitted by applicable statute, rule or regula-
tion.
The Glass-Steagall Act and other applicable laws prohibit federally chart-
ered or supervised banks from engaging in certain aspects of the business of
issuing, underwriting, selling and/or distributing securities. Accordingly,
banks are engaged to act as Service Agent only to perform administrative and
shareholder servicing functions, including transaction-related agency services
for their customers. If a bank is prohibited from acting as a service agent,
alternative means for continuing the servicing of its shareholders would be
sought and the shareholder clients of the bank will remain Fund shareholders.
The Distributor promotes the distribution of the Service Class Shares in ac-
cordance with the terms of a Distribution Plan adopted pursuant to Rule 12b-1
under the 1940 Act. The Distribution Plan provides for the use of Fund assets
allocable to Service Class Shares to pay expenses of distributing such shares.
The Distribution Plan and Service Plan (the "Plans") were approved by the
Board, including a majority of the Trustees who are not "interested persons"
of
18
<PAGE>
the Fund as defined in the 1940 Act (and each of whom has no direct or indi-
rect financial interest in the Plans or any agreement related thereto, re-
ferred to herein as the "12b-1 Trustees"). The Plans may be terminated at any
time by the vote of the Board or the 12b-1 Trustees, or by the vote of a ma-
jority of the outstanding Service Class Shares of the Portfolio involved.
While the Plans continue in effect, the selection of the 12b-1 Trustees is
committed to the discretion of such persons then in office. The Plans provide
generally that a Portfolio may incur distribution and service costs under the
Plans which may not exceed in the aggregate 0.75% per annum of that Portfo-
lio's net assets. The Board has currently limited aggregate payments under the
Plans to 0.50% per annum of the Portfolio's net assets. The Service Class
Shares offered by this Prospectus currently are not making payments under the
Distribution Plan. Under the plans as implemented, expenses may be no more
than 0.25%. Upon implementation, the Distribution Plan would permit payments
to the Distributor, broker-dealers, other financial institutions, sales repre-
sentatives or other third parties who render promotional and distribution
services, for items such as advertising expenses, selling expenses, commis-
sions or travel reasonably intended to result in sales of Service Class Shares
and for the printing of prospectuses sent to prospective purchasers of Service
Class Shares of the Portfolio.
Although the Plans may be amended by the Board of Trustees, any changes in
the Plans which would materially increase the amounts authorized to be paid
under the Plans must be approved by shareholders of the Class involved. The
total amounts paid under the foregoing arrangements may not exceed the maximum
limits specified above, and the amounts and purposes of expenditures under the
Plans must be reported to the 12b-1 Trustees quarterly. The amounts allowable
under the Plans for each Class of Shares of the Portfolios are also limited
under certain rules of the National Association of Securities Dealers, Inc.
In addition to payments by the Fund under the Plans, the Distributor, United
Asset Management Corporation, the parent company of UAMFSI, and of the Adviser
or any of their affiliates, may, at its own expense, compensate a Service
Agent or other person for marketing, shareholder servicing, record-keeping
and/or other services performed with respect to the Fund, the Portfolio or any
Class of Shares of the Portfolio. The person making such payments may do so
out of its revenues, its profits or any other source available to it. Such
service arrangements, when in effect, are made generally available to all
qualified service providers. The Adviser may compensate its affiliated compa-
nies for referring investors to the Portfolio.
The Distributor, the Adviser and certain of their other affiliates also par-
ticipate, at the date of this Prospectus, in an arrangement with Smith Barney
Inc. under which Smith Barney provides certain defined contribution plan mar-
keting and
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<PAGE>
shareholder services and receives from such entities an amount equal to up to
33.3% of the portion of the investment advisory fees attributable to the in-
vested assets of Smith Barney's eligible customer accounts without regard to
any expense limitation in addition to amounts payable to all selling dealers.
The Fund also compensates Smith Barney for services it provides to certain de-
fined contribution plan shareholders that are not otherwise provided by
UAMFSI.
SHAREHOLDER SERVICES
EXCHANGE PRIVILEGE
Service Class Shares of the Portfolio may be exchanged for Service Class
Shares of any other UAM Funds Portfolio. (See the list of Portfolios of the
UAM Funds at the end of this Prospectus.) Exchange requests should be made by
contacting the UAM Funds Service Center.
Any exchange will be based on the net asset value of the shares involved.
There is no sales commission or charge of any kind for an exchange. Before
making an exchange into the Portfolio, a shareholder should read its Prospec-
tus and consider the investment objectives of the Portfolio to be purchased.
Call the UAM Funds Service Center for a copy of the Prospectus for the Portfo-
lio(s) in which you are interested. Exchanges can only be made with Portfolios
that are qualified for sale in a shareholder's state of residence.
Exchange requests may be made either by mail or telephone. Telephone ex-
changes will be accepted only if the certificates for the shares to be ex-
changed have not been issued to the shareholder and if the registration of the
two accounts will be identical. Requests for exchanges received prior to 4
p.m. (ET) will be processed as of the close of business on the same day. Re-
quests received after 4 p.m. will be processed on the next business day. The
Board of Trustees may limit the frequency and amount of exchanges permitted.
For additional information regarding responsibility for the authenticity of
telephoned instructions, see "REDEMPTION OF SHARES -- BY TELEPHONE". An ex-
change into another UAM Funds Portfolio is a sale of shares and may result in
a gain or loss for income tax purposes. The Fund may modify or terminate the
exchange privilege at any time.
VALUATION OF SHARES
The net asset value of the Portfolio is determined by dividing the value of
the Portfolio's assets attributable to the class, less any liabilities attrib-
utable to the class, by the number of shares outstanding attributable to the
class. The net asset value per share of the Portfolio is determined as of the
close of the NYSE on each day that the NYSE is open for business.
20
<PAGE>
Equity securities listed on a securities exchange for which market quota-
tions are readily available are valued at the last quoted sale price of the
day. Price information on listed securities is taken from the exchange where
the security is primarily traded. Unlisted equity securities and listed secu-
rities not traded on the valuation date for which market quotations are read-
ily available are valued neither exceeding the current asked prices nor less
than the current bid prices. Quotations of foreign securities in a foreign
currency are converted to U.S. dollar equivalents. The converted value is
based upon the bid price of the foreign currency against U.S. dollars quoted
by any major bank or by a broker.
Securities purchased with remaining maturities of 60 days or less are valued
at amortized cost when the Board of Trustees determines that amortized cost
reflects fair value.
The value of other assets and securities for which no quotations are readily
available (including restricted securities) is determined in good faith at
fair value using methods determined by the Fund's Board of Trustees.
PERFORMANCE CALCULATIONS
The Portfolio measures performance by calculating total return. Total return
figures are based on historical earnings and are not intended to indicate fu-
ture performance.
Total return is the change in value of an investment in the Portfolio over a
given period, assuming reinvestment of any dividends and capital gains. A cu-
mulative or aggregate total return reflects actual performance over a stated
period of time. An average annual total return is a hypothetical rate of re-
turn that, if achieved annually, would have produced the same cumulative total
return if performance had been constant over the entire period.
Performance will be calculated separately for Institutional Class and Serv-
ice Class Shares. Dividends paid by the Portfolio with respect to Institu-
tional Class and Service Class Shares, to the extent any dividends are paid,
will be calculated in the same manner at the same time on the same day and
will be in the same amount, except that service fees, distribution charges and
any incremental transfer agency costs relating to Service Class Shares will be
borne exclusively by that class.
The Portfolio's performance may be compared to data prepared by independent
services which monitor the performance of investment companies, data reported
in financial and industry publications, and various indices, all as further
described in the Portfolio's SAI. This information may also be included in
sales literature and advertising.
The Portfolio's Annual Report to Shareholders for the most recent fiscal
year end contains additional performance information that includes comparisons
with
21
<PAGE>
appropriate indices. The Annual Report is available without charge. Contact the
UAM Funds Service Center at the address or phone number on the cover of this
Prospectus.
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
DIVIDENDS AND CAPITAL GAINS
The Portfolio will normally distribute substantially all of its net invest-
ment income (for tax purposes) to shareholders of both of its classes annually.
If any net capital gains are realized, the Portfolio will normally distribute
them annually. All dividends and capital gains distributions will be automati-
cally reinvested in additional shares of the Portfolio unless the Fund is noti-
fied in writing that the shareholder elects to receive distributions in cash.
FEDERAL TAXES
The Portfolio intends to qualify as a "regulated investment company" under
subchapter M of the Internal Revenue Code of 1986, as amended, for federal in-
come tax purposes and to meet all other requirements that are necessary for it
(but not its shareholders) to be exempt from federal taxes on income and gains
paid to shareholders in the form of dividends. To do this, the Portfolio must,
among other things, distribute substantially all of its ordinary income and net
capital gains on an annual basis and maintain a portfolio of investments which
satisfies certain diversification criteria.
Dividends, whether distributed as cash or reinvested in shares are taxable to
shareholders as ordinary income. Short-term capital gains will also be taxed as
ordinary income. Long-term capital gains distributions are taxed as long-term
capital gains. The Portfolio will notify shareholders annually of dividend in-
come for tax purposes.
Dividends declared in October, November and December to shareholders of rec-
ord in such a month will be treated as if they had been paid by the Fund and
received by the shareholders on December 31 of the same calendar year, provided
that the dividends are paid before February of the following year.
The Fund is required by Federal law to withhold 31% of reportable payments
paid to shareholders who have not complied with IRS regulations. In order to
avoid this withholding requirement, you must certify that your Social Security
or Taxpayer Identification Number you have provided is correct and that either
you are not currently subject to backup withholding or you are exempt from
backup withholding. This certification must be made on the Application or on a
separate form supplied by the Fund.
Dividends and interest received by the Portfolio may give rise to withholding
and other taxes imposed by foreign countries. These taxes reduce the Portfo-
lio's
22
<PAGE>
dividends but are included in the taxable income reported on your tax state-
ment if the Portfolio qualifies for this tax treatment and elects to pass it
through to you. Consult a tax adviser for more information regarding deduc-
tions and credits for foreign taxes.
INVESTMENT ADVISER
The Adviser is an international investment adviser and is an affiliate of
the MJ Group, in Glasgow, Scotland. The MJ Group's origins date back to 1907,
and it currently has $7 billion in assets under management. The MJ Group has a
200-member staff including 40 investment professionals. It became a subsidiary
of United Asset Management Corporation ("UAM") in 1993. The Adviser, the SEC-
registered entity within the MJ Group, has $1.4 billion of assets under man-
agement and has U.S. offices in Chicago.
The Portfolio pays an annual fee in monthly installments to the Adviser for
advisory services. This fee is accrued daily and paid every month as a per-
centage of the average net assets in the Portfolio for that month. The per-
centage fee on an annual basis is 0.75%. This investment advisory fee is
higher than that paid by many mutual funds but not necessarily higher than
fees paid by funds with investment objectives similar to that of the Portfo-
lio.
The investment professional at the Adviser responsible for the day-to-day
management of the Portfolio and his qualifications are as follows:
RODGER SCULLION, MANAGING DIRECTOR OF THE ADVISER, has 25 years of invest-
ment experience, the last 13 years based in Glasgow with the MJ Group. He is
the portfolio manager of the Murray Smaller Markets Investment Trust, a
closed-end investment fund registered in the United Kingdom, which invests in
as many as 45 markets worldwide. Mr. Scullion is the Adviser's Chief Invest-
ment Officer and the lead person on the country allocation team. During his
tenure at the MJ Group, he has held portfolio management responsibilities for
investments in the U.S., Europe, Japan and the Far East.
ADMINISTRATIVE SERVICES
UAM Fund Services, Inc. ("UAMFSI"), a wholly-owned subsidiary of United As-
set Management Corporation, is responsible for performing and overseeing ad-
ministrative, fund accounting, dividend disbursing and transfer agent services
provided to the Fund and its Portfolios. UAMFSI's principal office is located
at 211 Congress Street, Boston, MA 02110. UAMFSI has subcontracted some of
these services to Chase Global Funds Services Company ("CGFSC"), an affiliate
of The Chase Manhattan Bank, by a Mutual Funds Service Agreement dated April
15, 1996. CGFSC is located at 73 Tremont Street, Boston, MA 02108.
23
<PAGE>
Each Portfolio pays UAMFSI a two part monthly fee: a Portfolio-specific fee
which is retained by UAMFSI and a sub-administration fee which UAMFSI in turn
pays to CGFSC. The following Portfolio-specific fees are calculated from the
aggregate net assets of each Portfolio:
<TABLE>
<CAPTION>
RATE
----
<S> <C>
MJI International Equity Portfolio..................................... .06%
</TABLE>
CGFSC's monthly fee for its services is calculated on an annualized basis as
follows:
0.19 of 1% of the first $200 million of combined Fund assets;
0.11 of 1% of the next $800 million of combined Fund assets;
0.07 of 1% of combined Fund assets in excess of $1 billion but less than
$3 billion;
0.05 of 1% of combined Fund assets in excess of $3 billion.
Fees are allocated among the Portfolios on the basis of their relative as-
sets and are subject to a graduated minimum fee schedule per Portfolio, which
starts at $2,000 per month and increases to $70,000 annually after two years.
If a separate class of shares is added to a Portfolio, its minimum annual fee
increases by $20,000.
DISTRIBUTOR
UAM Fund Distributors, Inc. a wholly-owned subsidiary of UAM with its prin-
cipal office located at 211 Congress Street, Boston, Massachusetts 02110, dis-
tributes the shares of the Fund. Under the Fund's Distribution Agreement (the
"Agreement"), the Distributor, as agent of the Fund, agrees to use its best
efforts as sole distributor of the Fund's shares. The Distributor does not re-
ceive any fee or other compensation under the Agreement with respect to this
Portfolio (except as described under "Service and Distribution Agreements).
This Agreement provides that the Fund will bear the costs of the registration
of its shares with the SEC and various states and the printing of its prospec-
tuses, SAIs and reports to shareholders.
PORTFOLIO TRANSACTIONS
The Advisory Agreements for each of the Fund's Portfolios authorize the Ad-
viser to select the brokers or dealers that will execute the purchases and
sales of investment securities for each Portfolio. The Agreements direct the
Adviser to use its best efforts to obtain the best available price and most
favorable execution for all transactions of the Portfolios. If consistent with
the interests of the Portfolios, the Adviser may select brokers on the basis
of research, statistical and pricing services these brokers provide to the
Portfolios in addition to required Adviser services. Such brokers may be paid
a higher commission than that which another qualified broker would have
charged for effecting the same transaction, provided
24
<PAGE>
that such commissions are paid in compliance with the Securities Exchange Act
of 1934, as amended, and that the Adviser determines in good faith that the
commission is reasonable in terms either of the transaction or the overall re-
sponsibility of the Adviser to the Portfolios and the Adviser's other clients.
Although not a typical practice, the Adviser may place portfolio orders with
qualified brokerdealers who refer clients to the Adviser.
If a purchase or sale of securities is consistent with the investment poli-
cies of a Portfolio and one or more other clients served by the Adviser is
considering a purchase at or about the same time, transactions in such securi-
ties will be allocated among the Portfolio and clients in a manner deemed fair
and reasonable by the Adviser. Although there is no specified formula for al-
locating such transactions, allocations are subject to periodic review by the
Fund's Trustees.
GENERAL FUND INFORMATION
The Fund was organized as a Delaware business trust on May 18, 1994 under
the name "The Regis Fund II." On October 31, 1995, the name of the Fund was
changed to "UAM Funds Trust." The Fund's Agreement and Declaration of Trust
permits the Fund to issue an unlimited number of shares of beneficial inter-
est, without par value. The Trustees have the power to designate one or more
series ("Portfolios") or classes of shares of beneficial interest without fur-
ther action by shareholders.
At its discretion, the Board of Trustees may create additional Portfolios
and classes of shares. The shares of each Portfolio are fully paid and nonas-
sessable, and have no preference as to conversion, exchange, dividends, re-
tirement or other features and no preemptive rights. They have noncumulative
voting rights, which means that holders of more than 50% of shares voting for
the election of Trustees can elect 100% of the Trustees. A shareholder is en-
titled to one vote for each full share held (and a fractional vote for each
fractional share held), then standing in his name on the books of the Fund.
As of December 6, 1996, Freya Fanning & Company, 400 Essex Street, Beverly
Farms MA held of record 31.2% of the Portfolio's Institutional Class Shares
for which ownership is disclaimed or presumed disclaimed. The persons or orga-
nizations owning 25% or more of the outstanding shares of a Portfolio may be
presumed to "control" (as that term is defined in the 1940 Act) such Portfo-
lio. As a result, those persons or organizations could have the ability to
vote a majority of the shares of the Portfolio on any matter requiring the ap-
proval of shareholders of such Portfolio.
Both Institutional Class and Service Class Shares represent an interest in
the same assets of a Portfolio and are identical in all respects except that
the Service Class Shares bear certain expenses related to shareholder servic-
ing, and the distribution of such shares and have exclusive voting rights with
respect to matters
25
<PAGE>
relating to such distribution expenditures. Information about the Service
Class Shares of the Portfolios along with the fees and expenses associated
with such shares is available upon request by contacting the UAM Funds Service
Center.
Annual meetings will not be held except as required by the 1940 Act and
other applicable laws. The Fund has undertaken that its Trustees will call a
meeting of shareholders if such a meeting is requested in writing by the hold-
ers of not less than 10% of the outstanding shares of the Fund. To the extent
required by the undertaking, the Fund will assist shareholder communications
in such matters.
CUSTODIAN
The Chase Manhattan Bank serves as custodian of the Fund's assets.
ACCOUNTANTS
Price Waterhouse LLP acts as the independent accountants for the Fund and
audits its financial statements annually.
REPORTS
Investors will receive unaudited semi-annual financial statements and annual
financial statements audited by Price Waterhouse LLP.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be made by contacting the UAM Funds Service Center
at the address or telephone number listed on the cover of this Prospectus.
LITIGATION
The Fund is not involved in any litigation.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS NOT CONTAINED IN THIS PROSPECTUS, OR IN THE PORTFOLIO'S STATEMENT
OF ADDITIONAL INFORMATION, IN CONNECTION WITH THE OFFERING MADE BY THIS PRO-
SPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR ITS REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFERING BY THE FUND IN ANY JURISDICTION IN WHICH SUCH OF-
FERING MAY NOT BE LAWFULLY MADE.
26
<PAGE>
UAM FUNDS -- SERVICE CLASS SHARES
BHM&S Total Return Bond Portfolio
FPA Crescent Fund
MJI International Equity Portfolio
Newbold's Equity Portfolio
NWQ Balanced Portfolio
NWQ Value Equity Portfolio
Sirach Growth Portfolio
Sirach Special Equity Portfolio
Sirach Strategic Balanced Portfolio
Sirach Equity Portfolio
Sterling Partner's Balanced Portfolio
Sterling Partner's Equity Portfolio
Sterling Partner's Short-Term Fixed Income Portfolio
TJ Core Equity Portfolio
27
<PAGE>
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
1-800-638-7983
Investment Adviser
Murray Johnstone International Ltd.
Glasgow, Scotland
Distributor
UAM FUND DISTRIBUTORS, INC.
211 Congress Street
Boston, MA 02110
PROSPECTUS
January 3, 1997
<PAGE>
[LOGO OF UAM FUNDS APPEARS HERE]
Newbold's Equity Portfolio
Institutional
Class Shares
January 3, 1997
P R O S P E C T U S
<PAGE>
UAM FUNDS
UAM FUNDS SERVICE CENTER
C/O CHASE GLOBAL FUNDS SERVICES COMPANY
P.O. BOX 2798
BOSTON, MA 02208-2798
1-800-638-7983
- -------------------------------------------------------------------------------
NEWBOLD'S EQUITY PORTFOLIO
INSTITUTIONAL CLASS SHARES
INVESTMENT ADVISER: NEWBOLD'S ASSET MANAGEMENT, INC.
- -------------------------------------------------------------------------------
PROSPECTUS -- JANUARY 3, 1997
UAM Funds Trust (the "Fund") is an open-end investment company known as a
"mutual fund." The Fund consists of multiple series (known as "Portfolios")
each of which has different investment objectives and policies. Newbold's Eq-
uity Portfolio currently offers two separate classes: Institutional Class
Shares and Institutional Service Class Shares ("Service Class Shares"). Shares
of each class represent equal, pro rata interests in a Portfolio and accrue
dividends in the same manner except that Service Class Shares bear fees pay-
able by the class (at the rate of .40% per annum) to financial institutions
for services they provide to the owners of such shares. The securities offered
in this Prospectus are Institutional Class Shares of one diversified, no-load
Portfolio of the Fund managed by Newbold's Asset Management, Inc.
NEWBOLD'S EQUITY PORTFOLIO. Newbold's Equity Portfolio (the "Portfolio")
seeks to achieve maximum long-term total return, consistent with reasonable
risk to principal, by investing primarily in a diversified portfolio of under-
valued equity securities of statistically attractive companies.
There can be no assurance that the Portfolio will achieve its stated objec-
tive.
ABOUT THIS PROSPECTUS
Keep this Prospectus for future reference. It contains information that you
should know before you invest. A "Statement of Additional Information" ("SAI")
containing additional information about the Fund has been filed with the Secu-
rities and Exchange Commission. The SAI is dated January 3, 1997 and has been
incorporated by reference into this Prospectus. For a free copy of the SAI
contact the UAM Funds Service Center at the address or telephone number above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Fund Expenses.............................................................. 1
Prospectus Summary......................................................... 3
Risk Factors............................................................... 4
Financial Highlights....................................................... 5
Investment Objectives...................................................... 6
Investment Policies........................................................ 6
Other Investment Policies.................................................. 7
Investment Limitations..................................................... 12
Purchase of Shares......................................................... 13
Redemption of Shares....................................................... 16
Shareholder Services....................................................... 18
Valuation of Shares........................................................ 18
Performance Calculations................................................... 19
Dividends, Capital Gains Distributions and Taxes........................... 19
Investment Adviser......................................................... 20
Administrative Services.................................................... 21
Distributor................................................................ 22
Portfolio Transactions..................................................... 22
General Information........................................................ 23
UAM Funds -- Institutional Class Shares.................................... 25
</TABLE>
<PAGE>
FUND EXPENSES
The following table illustrates expenses and fees that a shareholder of the
Portfolio's Institutional Class Shares would incur. Transaction fees may be
charged if a broker-dealer or other financial intermediary deals with the Fund
on your behalf. (See "PURCHASE OF SHARES.")
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Sales Load Imposed on Purchases:........................................ NONE
Sales Load Imposed on Reinvested Dividends:............................. NONE
Deferred Sales Load:.................................................... NONE
Redemption Fees:........................................................ NONE
Exchange Fees:.......................................................... NONE
</TABLE>
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF NET ASSETS)
<TABLE>
<S> <C>
Investment Advisory Fees:........................................... 0.50 %
Administrative Fees:................................................ 0.47 %
12b-1 Fees:......................................................... NONE
Other Expenses:..................................................... 0.38 %
Advisory Fees Waived and Expenses Assumed:.......................... (0.45)%
-----
Total Operating Expenses (After Fee Waiver and Expenses Assumed):... 0.90 %*
=====
</TABLE>
- -----------
* The Adviser has agreed to waive all or a portion of its advisory fees and to
assume operating expenses to keep the Portfolio's total annual operating ex-
penses (excluding interest, taxes and extraordinary expenses) from exceeding
0.90% of average daily net assets through January 29, 1998. It is estimated
that, if the Adviser did not waive fees and assume expenses, the Portfolio's
total annual operating expenses would be 1.35% of average daily net assets.
The Adviser will not be reimbursed by the Fund for any advisory fees which
are waived or expenses which the Adviser may bear on behalf of the Portfolio
for a given fiscal year.
The table above shows various fees and expenses an investor would bear di-
rectly or indirectly. The expenses and fees set forth above are estimates for
the fiscal year and are annualized based on the Portfolio's Institutional
Class Shares' operations during the semi-annual period ended October 31, 1996,
except that they have been restated to reflect the current Administrative Fees
(See "ADMINISTRATIVE SERVICES" herein and in the SAI) and the current expense
cap.
The following chart shows how much a hypothetical investor would pay in ex-
penses, assuming an initial investment of $1,000, a 5% annual rate of return
and redemption at the end of the time period indicated.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Expenses..................................... $9 $29 $50 $111
</TABLE>
1
<PAGE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EX-
PENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE
SHOWN.
2
<PAGE>
PROSPECTUS SUMMARY
INVESTMENT ADVISER
Newbold's Asset Management, Inc. (the "Adviser") is a registered investment
adviser. Founded in 1940, the firm currently has over $7 billion in assets un-
der management. The Adviser is a wholly-owned subsidiary of United Asset Man-
agement Corporation. (See "INVESTMENT ADVISER.")
PURCHASE OF SHARES
Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the
"Distributor") to investors at net asset value without a sales commission.
Share purchases may be made by sending investments directly to the Fund. The
minimum initial investment in the Portfolio is $2,500. The minimum initial in-
vestment for IRA accounts is $500. The minimum initial investment for spousal
IRA accounts is $250. The minimum for any subsequent investment is $100. Cer-
tain exceptions to the initial or minimum investment amounts may be made by
the officers of the Fund. (See "PURCHASE OF SHARES.")
DIVIDENDS AND DISTRIBUTIONS
The Portfolio will normally distribute substantially all of its net invest-
ment income in an annual dividend. Any realized net capital gains will also be
distributed annually. Distributions will be reinvested in the Portfolio's
shares automatically unless an investor elects to receive cash distributions.
(See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES.")
REDEMPTIONS OF SHARES
Shares of the Portfolio may be redeemed at any time, without cost, at the
net asset value of the Portfolio next determined after receipt of the redemp-
tion request. The redemption price may be more or less than the purchase
price. (See "REDMEPTION OF SHARES.")
ADMINISTRATIVE SERVICES
UAM Fund Services, Inc. ("UAMFSI"), a wholly-owned subsidiary of United As-
set Management Corporation ("UAM"), is responsible for performing and oversee-
ing administration, dividend disbursing and transfer agency services provided
to the Fund and its Portfolios by third-party service providers. (See "ADMIN-
ISTRATIVE SERVICES.")
3
<PAGE>
RISK FACTORS
The value of the Portfolio's shares will fluctuate in response to changes in
market and economic conditions as well as the financial conditions and pros-
pects of the issuers in which the Portfolio invests. Prospective investors
should consider the following: (1) The Portfolio may engage in various strate-
gies to seek to hedge its investments against movements in security prices by
the use of derivatives including options and futures as well as options on
futures. Such strategies are commonly referred to as "derivatives" and involve
the risk of imperfect correlation in movements in the price of options and
futures and movements in the price of securities which are the subject of the
hedge. Options and futures transactions in foreign markets are also subject to
the risk factors associated with foreign investments generally. There can be
no assurance that a liquid secondary market for options and futures contracts
will exist at any specific time; (2) The Portfolio may invest in the securi-
ties of foreign issuers which may be subject to additional risks factors, in-
cluding foreign currency risks, not applicable to securities of U.S. issuers;
(3) The Portfolio may invest in repurchase agreements which entail a risk of
loss should the seller default on its transaction; (4) The Portfolio may lend
its investment securities which entails a risk of loss should a borrower fail
financially; (5) The Portfolio may purchase securities on a when-issued basis
which do not earn interest until issued and may decline or appreciate in mar-
ket value prior to their delivery to the Portfolio. (See "OTHER INVESTMENT
POLICIES.")
4
<PAGE>
FINANCIAL HIGHLIGHTS
The following table provides selected per share information for a share out-
standing throughout the periods presented of the Portfolio's Institutional
Class Shares. This table is part of the Portfolio's Financial Statements in-
cluded in the Portfolio's 1996 Annual Report to Shareholders and the Semi-An-
nual Report. The Reports are incorporated into the Portfolio's SAI. The Port-
folio's Financial Statements in the Annual Report have been audited by Price
Waterhouse LLP whose unqualified opinion on the Financial Statements for the
period ended April 30, 1996 is also incorporated into the Portfolio's SAI.
Please read the following information in conjunction with the Portfolio's 1996
Annual Report to Shareholders and the 1996 Semi-Annual Report to Shareholders.
<TABLE>
<CAPTION>
SEPTEMBER 13, 1995* SIX MONTHS ENDED
TO OCTOBER 31, 1996
APRIL 30, 1996 (UNAUDITED)
------------------- ----------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD..... $ 10.00 $ 10.98
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income.................. 0.14 0.13
Net Realized and Unrealized Gain on
Investments.......................... 0.98 0.53
------- -------
Total From Investment Operations..... 1.12 0.66
------- -------
DISTRIBUTIONS
Net Investment Income.................. (0.12) (0.14)
Net Realized Gain...................... (0.02) --
------- -------
Total Distributions.................. (0.14) (0.14)
------- -------
NET ASSET VALUE, END OF PERIOD........... $ 10.98 $ 11.50
======= =======
TOTAL RETURN+............................ 11.31 % 6.04%
======= =======
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands).... $14,090 $15,273
Ratio of Net Expenses to Average Net
Assets................................. 0.90 %** 0.90 %**
Ratio of Net Investment Income to Average
Net Assets............................. 2.27 %** 2.33 %**
Portfolio Turnover Rate.................. 75 % 34%
Average Commission Rate.................. $0.0566 $0.0600
Voluntary Waived Fees and Expenses
Assumed by the Adviser Per Share....... $ 0.06 $ 0.03
</TABLE>
- -----------
* Commencement of Operations.
** Annualized.
+ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser.
5
<PAGE>
INVESTMENT OBJECTIVE
The Newbold's Equity Portfolio seeks to achieve maximum long-term total re-
turn, consistent with reasonable risk to principal, by investing primarily in
a diversified portfolio of undervalued equity securities of statistically at-
tractive companies. The Adviser believes that the Portfolio's performance over
the long term will be superior to its benchmark index (the Standard & Poor's
500 Stock Index). There can be no assurance that the Portfolio will achieve
its stated objective.
INVESTMENT POLICIES
In seeking its investment objective, the Portfolio will invest at least 65%
of its total assets, under normal circumstances, in equity securities, con-
sisting of common stock, preferred stock, convertible preferred stock, con-
vertible bonds, rights and warrants. The Portfolio will invest primarily in
equity securities of large capitalization companies which are defined as those
with equity capitalizations greater than $1 billion at the time of purchase.
The Adviser believes that investment value and return can be achieved by in-
vesting in stocks with a low price relative to current earnings. This bottom-
up approach seeks to identify companies whose earnings growth suggests an in-
creasing stream of future dividend income and whose share prices represent a
level below realizable value.
The Adviser is able to identify prospective companies through a computerized
screening process which rates on four key elements: Market capitalization --
$1 billion or more for purposes of liquidity; Dividend payout -- ordinarily
must pay cash dividends; Financial leverage -- debt should not be excessive,
and an investment grade bond rating is required; and Return on average five-
year equity -- after the three previous criteria have been applied, this eval-
uation is used as a measurement of profitability in selecting the top 500 com-
panies.
The stock issues of the top 500 companies are then sorted by price/earnings
ratio, ranked from highest to lowest and broken into five groups, each con-
sisting of 100 stocks. The bottom two groups are subject to intense fundamen-
tal analysis by the Adviser. The objective is to assemble a portfolio of 40-70
statistically attractive stocks which represent relative "value" not generally
recognized by the market. However, the Portfolio has the flexibility to invest
in less than 40 stocks or more than 70 stocks, as the Adviser deems necessary.
Earnings for cyclical stocks are normalized in this valuation process.
Once the Portfolio has been constructed, its price/earnings multiples are
continually monitored. The Portfolio will stop buying a stock when its
price/earnings ratio approaches the current price/earnings multiple of the
Standard & Poor's 500 Stock Index. The stock is sold when it moves above the
market's multiple.
6
<PAGE>
When the Adviser believes that market conditions warrant a defensive posi-
tion, up to 100% of the Portfolio's assets may be held in cash and short-term
investments. See "SHORT-TERM INVESTMENTS" below for a description of the types
of short-term instruments in which the Portfolio may invest for temporary de-
fensive purposes. When the Portfolio is in a defensive position, it may not
necessarily be pursuing its stated investment objective.
OTHER INVESTMENT POLICIES
The Portfolio may also, under normal circumstances, invest up to 35% its as-
sets, unless restricted by additional limitations described below or in the
Portfolio's SAI, in the following securities or investment techniques:
SHORT-TERM INVESTMENTS
In order to earn a return on uninvested assets, meet anticipated redemp-
tions, or for temporary defensive purposes, the Portfolio may invest a portion
of its assets in domestic and foreign money market instruments including cer-
tificates of deposit, bankers' acceptances, time deposits, U.S. Government ob-
ligations, U.S. Government agency securities, short-term corporate debt secu-
rities, and commercial paper rated A-1 or A-2 by Standard & Poor's Corporation
or Prime-1 or Prime-2 by Moody's Investors Service, Inc. or if unrated, deter-
mined by the Adviser to be of comparable quality.
Time deposits maturing in more than seven days will not be purchased by the
Portfolio, and time deposits maturing from two business days through seven
calendar days will not exceed 10% of the total assets of the Portfolio. The
Portfolio will not invest in any security issued by a commercial bank unless
(i) the bank has total assets of at least $1 billion, or the equivalent in
other currencies, (ii) in the case of U.S. banks, it is a member of the Fed-
eral Deposit Insurance Corporation, and (iii) in the case of foreign branches
of U.S. banks, the security is, in the opinion of the Adviser, of an invest-
ment quality comparable with other debt securities which may be purchased by
the Portfolio.
The Fund has received permission from the Securities and Exchange Commission
(the "SEC") to deposit the daily uninvested cash balances of the Fund's Port-
folios, as well as cash for investment purposes, into one or more joint ac-
counts and to invest the daily balance of the joint accounts in the following
short-term investments: fully collateralized repurchase agreements, interest-
bearing or discounted commercial paper including dollar-denominated commercial
paper of foreign issuers, and any other short-term money market instruments
including variable rate demand notes and tax-exempt money instruments. By en-
tering into these investments on a joint basis, it is expected that the Port-
folio may earn a higher rate of return on investments relative to what it
could earn individually.
The Fund has received permission from the SEC for each of its Portfolios to
invest, for cash management purposes, the greater of 5% of its total assets or
$2.5
7
<PAGE>
million in the Fund's DSI Money Market Portfolio. (See "INVESTMENT COMPANIES.")
REPURCHASE AGREEMENTS
The Portfolio may invest in repurchase agreements collateralized by U.S. Gov-
ernment securities, certificates of deposit, and certain bankers' acceptances
and other securities outlined above under "SHORT-TERM INVESTMENTS." In a repur-
chase agreement, the Portfolio buys a security and simultaneously commits to
sell that security back at an agreed upon price plus an agreed upon market rate
of interest. Under a repurchase agreement, the seller is also required to main-
tain the value of securities subject to the agreement at not less than 100% of
the repurchase price. The Administrator and the Adviser will mark to market
daily the value of the securities purchased. The use of repurchase agreements
involves certain risks. For example, a default by the seller of the agreement
may cause the Portfolio to experience a loss or delay in the liquidation of the
collateral securing the repurchase agreement. The Portfolio might also incur
disposition costs in liquidating the collateral. While the Fund's management
acknowledges these risks, it is expected that they can be controlled through
stringent security selection criteria and careful monitoring procedures. The
Fund has received permission from the SEC to pool daily uninvested cash bal-
ances of the Fund's Portfolios in order to invest in repurchase agreements on a
joint basis. By entering into joint repurchase agreements, the Portfolio may
incur lower transactions costs and earn higher rates of interest on joint re-
purchase agreements. The Portfolio's contribution would determine its return
from a joint repurchase agreement. (See "SHORT TERM INVESTMENTS.")
LENDING OF SECURITIES
The Portfolio may lend its investment securities to qualified institutional
investors as a means of earning income. The Portfolio will not loan securities
to the extent that greater than one-third of its assets at fair market value
would be committed to loans. During the term of a loan, the Portfolio is sub-
ject to a gain or loss depending on any increase or decrease in the market
price of the securities loaned. Lending of securities is subject to review by
the Fund's Board of Trustees. All relevant facts and circumstances, including
the creditworthiness of the broker, dealer or institution, will be considered
in making decisions about securities lending.
An investment company may pay reasonable negotiated fees in connection with
loaned securities so long as such fees are set forth in a written contract and
approved by its Board of Trustees. The Portfolio will continue to retain any
voting rights with respect to loaned securities. If a material event occurs af-
fecting an investment on a loan, the loan must be called and the securities
voted.
WHEN-ISSUED, FORWARD DELIVERY AND DELAYED SETTLEMENT SECURITIES
The Portfolio may purchase and sell securities on a "when-issued," "delayed
settlement," or "forward delivery" basis. "When-issued" or "forward delivery"
8
<PAGE>
refers to securities whose terms and indenture are available, and for which a
market exists, but which are not available for immediate delivery. When-issued
and forward delivery transactions may be expected to occur a month or more be-
fore delivery is due. Delayed settlement is a term used to describe settlement
of a securities transaction in the secondary market which will occur sometime
in the future. No payment or delivery is made by the Portfolio until it re-
ceives payment or delivery from the other party to any of the above transac-
tions. It is possible that the market price of the securities at the time of
delivery may be higher or lower than the purchase price. The Portfolio will
maintain a separate account of cash or liquid securities at least equal to the
value of purchase commitments until payment is made. Typically, no income ac-
crues on securities purchased on a delayed delivery basis prior to the time de-
livery is made although the Portfolio may earn income on securities it has de-
posited in a segregated account.
The Portfolio may engage in these types of purchases in order to buy securi-
ties that fit with its investment objectives at attractive prices--not to in-
crease its investment leverage.
PORTFOLIO TURNOVER
Portfolio turnover is not anticipated to exceed 60%. In addition to Portfolio
trading costs, higher rates of portfolio turnover may result in the realization
of capital gains. (See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES" for
more information on taxation). The Portfolio will not normally engage in short-
term trading, but each reserves the right to do so. The table set forth in "Fi-
nancial Highlights" presents the Portfolio's historical portfolio turnover
ratio.
INVESTMENT COMPANIES
The Portfolio reserves the right to invest up to 10% of its total assets,
calculated at the time of investment, in the securities of other open-end or
closed-end investment companies. No more than 5% of the investing Portfolio's
total assets may be invested in the securities of any one investment company
nor may it acquire more than 3% of the voting securities of any other invest-
ment company. The Portfolio will indirectly bear its proportionate share of any
management fees paid by an investment company in which it invests in addition
to the advisory fee paid by the Portfolio.
The Fund has received permission from the SEC to allow each of its Portfolios
to invest, for cash management purposes, the greater of 5% of its total assets
or $2.5 million in the Fund's DSI Money Market Portfolio provided that the in-
vestment is consistent with the Portfolio's investment policies and restric-
tions. Based upon the Portfolio's assets invested in the DSI Money Market Port-
folio, the investing Portfolio's adviser will waive its investment advisory fee
and any other fees earned as a result of the Portfolio's investment in the DSI
Money Market Portfolio. The investing Portfolio will bear expenses of the DSI
Money Market Portfolio on the same basis as all of its other shareholders.
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AMERICAN DEPOSITARY RECEIPTS
The Portfolio intends to invest primarily in U.S.-based companies. In addi-
tion, the Portfolio may purchase shares of foreign-based companies in the form
of American Depositary Receipts (ADRs). ADRs may be sponsored or unsponsored.
Sponsored ADRs are established jointly by a depositary and the underlying issu-
er, whereas unsponsored ADRs may be established without participation by the
underlying issuer. Holders of an unsponsored ADR generally bear all the costs
associated with establishing the unsponsored ADR. The depositary of an
unsponsored ADR is under no obligation to distribute shareholder communications
received from the underlying issuer or to pass through voting rights to the
holders of the unsponsored ADR with respect to the deposited securities or pool
of securities.
FOREIGN INVESTMENTS
Investing in foreign companies may involve additional risks and considera-
tions which are not typically associated with investing in U.S. companies.
Since stocks of foreign companies are normally denominated in foreign curren-
cies, the Portfolio may be affected favorably or unfavorably by changes in cur-
rency rates and in exchange control regulations, and may incur costs in connec-
tion with conversions between various currencies.
As non-U.S. companies are not generally subject to uniform accounting, audit-
ing and financial reporting standards and practices comparable to those appli-
cable to U.S. companies, comparable information may not be readily available
about certain foreign companies. Securities of some non-U.S. companies may be
less liquid and more volatile than securities of comparable U.S. companies. In
addition, in certain foreign countries, there is the possibility of expropria-
tion or confiscatory taxation, political or social instability, or diplomatic
developments which could affect U.S. investments in those countries.
Although the Portfolio will seek the most favorable trading costs available
in any given market, investors should recognize that foreign commissions are
generally higher than those in the U.S. In addition, custodial expenses, that
is, fees paid to financial institutions for holding the Portfolio's securities,
will generally be higher than would be the case in the U.S.
Some foreign governments also levy withholding taxes against dividend and in-
terest income. Although in some countries a portion of the taxes is recover-
able, the non-recovered portion of foreign withholding taxes will reduce the
income the Portfolio receives from the companies comprising its investments.
HEDGING AND RELATED STRATEGIES AND RISK CONSIDERATIONS
To reduce the overall risk of its investments (hedge), the Portfolio may use
options, futures contracts, and options on futures contracts. Hedging strate-
gies may also be used in an attempt to manage the Portfolio's exposure to
changing security
10
<PAGE>
prices. The Portfolio's ability to use these strategies may be limited by mar-
ket conditions, regulatory limits and tax considerations. The Portfolio's obli-
gation under such hedging strategies will be covered by the maintenance of a
segregated account consisting of cash, U.S. Government securities or liquid
high grade debt obligations equal to at least 100% of the Portfolio's commit-
ment. The Portfolio may buy or sell futures contracts, write covered call op-
tions and buy put and call options on any security or index, including options
and futures traded on foreign exchanges and options not traded on exchanges.
The Portfolio's SAI contains further information on all of these strategies and
the risks associated with them.
The Portfolio may write or purchase options in privately negotiated transac-
tions ("OTC Options") as well as listed options. OTC Options can be closed out
only by agreement with the other party to the transaction. Any OTC Option pur-
chased by the Portfolio is considered an illiquid security. Any OTC Option
written by the Portfolio will be with a qualified dealer pursuant to an agree-
ment under which the Portfolio may repurchase the option at a formula price.
Such options are considered illiquid to the extent that the formula price ex-
ceeds the intrinsic value of the option. The Portfolio may not purchase or sell
futures contracts or related options for which the aggregate initial margin and
premiums exceed 5% of the fair market value of the Portfolio's assets. In order
to prevent leverage in connection with the purchase of futures contracts or
call options thereon by the Portfolio, an amount of cash, cash equivalents or
liquid high grade debt securities equal to the market value of the obligation
under the futures contracts or options (less any related market deposits) will
be maintained in a segregated account with the Fund's Custodian. The Portfolio
may not invest more than 15% of its net assets in illiquid securities and re-
purchase agreements which have a maturity of longer than seven days. A more
complete discussion of the potential risks involved in transactions in options
or futures contracts and related options is contained in the Portfolio's State-
ment of Additional Information.
RISK CONSIDERATIONS. The Portfolio might not employ any of the hedging strat-
egies described above, and there can be no assurance that any strategy used
will succeed. If the Adviser incorrectly forecasts market values or other eco-
nomic factors in utilizing a strategy for the Portfolio, the Portfolio would be
in a better position if it had not hedged at all. In addition, the Portfolio
will pay commissions and other costs in connection with such investments which
may increase the Portfolio's expenses and reduce its return.
The use of these strategies involves certain risks, including (1) the fact
that skills needed to use hedging instruments are different from those needed
to select the Portfolio's securities, (2) possible imperfect correlation, or
even no correlation, between price movements of hedging instruments and price
movements of the investments being hedged, (3) the fact that, while hedging
strategies can reduce the risk of loss, they can also reduce the opportunity
for gain, or even result in losses,
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<PAGE>
by offsetting favorable price movements in hedged investments and (4) the pos-
sible inability of the Portfolio to purchase or sell a security at a time that
otherwise would be favorable for it to do so, or the possible need for the
Portfolio to sell a security at a disadvantageous time due to the need for it
to maintain "cover" or to segregate securities in connection with hedging
transactions, and the possible inability of the Portfolio to close out or to
liquidate its hedged position.
RESTRICTED AND ILLIQUID SECURITIES
The Portfolio may purchase restricted securities that are not registered for
sale to the general public but which are eligible for resale to qualified in-
stitutional investors under Rule 144A of the Securities Act of 1933. Under the
supervision of the Fund's Board of Trustees, the Adviser determines the liquid-
ity of such investments by considering all relevant factors. Provided that a
dealer or institutional trading market in such securities exists, these re-
stricted securities are not treated as illiquid securities for purposes of the
Portfolio's investment limitations. The Portfolio may also invest up to 15% of
its net assets in securities that are illiquid. The prices realized from the
sales of these securities could be less than those originally paid by the Port-
folio or less than what may be considered the fair value of such securities.
INVESTMENT LIMITATIONS
The Portfolio will not:
(a) with respect to 75% of its assets, invest more than 5% of its total
assets at the time of purchase in the securities of any single issuer
(other than obligations issued or guaranteed as to principal and in-
terest by the U.S. Government or any of its agencies or instrumentali-
ties);
(b) with respect to 75% of its assets, purchase more than 10% of any class
of the outstanding voting securities of any issuer;
(c) invest more than 5% of its assets at the time of purchase in the secu-
rities of companies that have (with predecessors) a continuous operat-
ing history of less than 3 years;
(d) invest more than 25% of its assets in companies within a single indus-
try; however, there are no limitations on investments made in instru-
ments issued or guaranteed by the U.S. Government and its agencies.
(e) make loans except by purchasing debt securities in accordance with its
investment objective and policies or entering into repurchase agree-
ments or by lending its portfolio securities to banks, brokers, deal-
ers and other financial institutions so long as the loans are made in
compliance with the 1940 Act, as amended, or the Rules and Regulations
or interpretations of the SEC;
(f) (i) borrow, except from banks and as a temporary measure for extraor-
dinary or emergency purposes and then, in no event, in excess of 33
1/3% of the Portfolio's gross assets valued at the lower of market or
cost, and
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<PAGE>
(ii) the Portfolio may not purchase additional securities when
borrowings exceed 5% of total assets; or
(g) pledge, mortgage or hypothecate any of its assets to an extent greater
than 33 1/3% of its total assets at fair market value.
The Portfolio's investment objective and investment limitations (a), (b),
(d), (e) and (f)(i) listed above are fundamental policies and may be changed
only with the approval of the holders of a majority of the outstanding voting
securities of the Portfolio. The other investment limitations described here,
those not specified as fundamental in the SAI, and the Portfolio's investment
policies are not fundamental, and the Fund's Board of Trustees may change them
without shareholder approval.
PURCHASE OF SHARES
Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the
"Distributor"), without a sales commission at the net asset value per share
next determined after an order is received by the Fund and payment is received
by the Custodian. (See "VALUATION OF SHARES.") The minimum initial investment
required is $2,500. The minimum initial investment for IRA accounts is $500.
The minimum initial investment for spousal IRA accounts is $250. Certain ex-
ceptions may be made by officers of the Fund.
Shares of the Portfolio may be purchased by customers of brokers-dealers or
other financial intermediaries ("Service Agents") which have established a
shareholder servicing relationship with the Fund on behalf of their customers.
Service Agents may impose additional or different conditions on purchases or
redemptions of Portfolio shares and may charge transaction or other account
fees. Each Service Agent is responsible for transmitting to its customers a
schedule of any such fees and information regarding additional or different
purchase or redemption conditions. Shareholders who are customers of Service
Agents should consult their Service Agent for information regarding these fees
and conditions. Amounts paid to Service Agents may include transaction fees
and/or service fees paid by the Fund from the Fund assets attributable to the
Service Agent, which would not be imposed if shares of the Portfolio were pur-
chased directly from the Fund or the Distributor. Service Agents may provide
shareholder services to their customers that are not available to a share-
holder dealing directly with the Fund. A salesperson and any other person en-
titled to receive compensation for selling or servicing Portfolio shares may
receive different compensation with respect to one particular class of shares
over another in the Fund.
Service Agents may enter confirmed purchase orders on behalf of their cus-
tomers. If shares of a Portfolio are purchased in this manner, the Service
Agent must receive your investment order before the close of trading on the
New York
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<PAGE>
Stock Exchange ("NYSE"), and transmit it to the Fund's Sub-Transfer Agent
prior to 4 p.m. to receive that day's share price. Proper payment for the or-
der must be received by the Sub-Transfer Agent no later than the time when the
Portfolio is priced on the following business day. Service Agents are respon-
sible to their customers and the Fund for timely transmission of all subscrip-
tion and redemption requests, investment information, documentation and money.
INITIAL INVESTMENT BY MAIL
. Complete and sign an Application, and mail it together with a check pay-
able to UAM Funds to:
UAM Funds Trust
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
Payment for purchases of shares received by mail will be credited to an ac-
count at the next share price calculated for the Portfolio after receipt. Pay-
ment does not need to be converted into Federal Funds (monies credited to the
Fund's Custodian Bank by a Federal Reserve Bank) before the Fund will accept
it for investment.
BY WIRE
. Telephone the UAM Funds Service Center and provide the account name, ad-
dress, telephone number, social security or taxpayer identification num-
ber, Portfolio selected, amount being wired, and the name of the bank
wiring the funds. An account number will be provided to you. Next,
. instruct your bank to wire the specified amount to the Fund's custodian:
The Chase Manhattan Bank
ABA #021000021
UAM Funds
Credit DDA #9102772952
Ref: Portfolio Name
Your Account Number
Your Account Name
Wire Control Number
. Forward a completed Application to the Fund at the address shown on the
form. Federal Funds purchases will be accepted only on days when the
NYSE and the Custodian Bank are open for business.
ADDITIONAL INVESTMENTS
Additional investments can be made at any time. The minimum additional in-
vestment is $100. Shares can be purchased at net asset value by mailing a
check
14
<PAGE>
to the UAM Service Center (payable to "UAM Funds") or by wiring money to the
Custodian Bank using the instructions outlined above. When making additional
investments, be sure that the account name and number is identified on the
check or wire and the Portfolio to be purchased is specified.
Prior to wiring additional investments, notify the Fund by calling the num-
ber on the cover of this prospectus. Mail orders should include, when possi-
ble, the "Invest by Mail" stub which accompanies any Fund confirmation state-
ment.
OTHER PURCHASE INFORMATION
Investments received by 4 p.m. ET (the close of the NYSE) will be invested
at the share price calculated after the NYSE closes on that day. Investments
received after the close of the NYSE will be executed at the price computed on
the next day the NYSE is open. The Fund reserves the right, in its sole dis-
cretion, to suspend the offering of shares of the Portfolio or to reject pur-
chase orders when, in the judgment of management, such suspension or rejection
is in the best interests of the Fund. Purchases of the Portfolio's shares will
be made in full and fractional shares of the Portfolio calculated to three
decimal places. Certificates for fractional shares will not be issued. Certif-
icates for whole shares will not be issued except at the written request of
the shareholder.
IN-KIND PURCHASES
If accepted by the Fund, shares of the Portfolio may be purchased in ex-
change for securities which are eligible for acquisition by the Portfolio, as
described in this Prospectus. Securities to be exchanged which are accepted by
the Fund will be valued as described under "VALUATION OF SHARES" at the next
determination of net asset value after acceptance. Shares issued by the Port-
folio in exchange for securities will be issued at net asset value determined
as of the same time. All dividends, interest, subscription, or other rights
pertaining to such securities shall become the property of the Portfolio and
must be delivered to the Fund by the investor upon receipt from the issuer.
Securities acquired through an in-kind purchase will be acquired for invest-
ment and not for immediate resale.
The Fund will not accept securities in exchange for shares of the Portfolio
unless:
. at the time of exchange, such securities are eligible to be included in
the Portfolio (current market quotations must be readily available for
such securities);
. the investor represents and agrees that all securities offered to be ex-
changed are liquid securities and not subject to any restrictions upon
their sale by the Portfolio under the Securities Act of 1933, or other-
wise; and
. the value of any such securities (except U.S. Government securities) be-
ing exchanged together with other securities of the same issuer owned by
the
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<PAGE>
Portfolio will not exceed 5% of the net assets of the Portfolio immedi-
ately after the transaction.
Investors who are subject to Federal taxation upon exchange may realize a
gain or loss for Federal income tax purposes depending upon the cost of securi-
ties or local currency exchanged. Investors interested in such exchanges should
contact the Adviser.
REDEMPTION OF SHARES
Shares of the Portfolio may be redeemed by mail or telephone, at any time,
without cost, at the net asset value of the Portfolio next determined after re-
ceipt of the redemption request. No charge is made for redemptions. Any redemp-
tion may be more or less than the purchase price of your shares depending on
the market value of the investment securities held by the Portfolio.
BY MAIL
Address requests for redemption to the UAM Funds Service Center. Requests to
redeem shares must include:
. share certificates, if issued;
. a letter of instruction or an assignment specifying the number of shares
or dollar amount to be redeemed, signed by all registered owners of the
shares in the exact names in which they are registered;
. any required signature guarantees (see "SIGNATURE GUARANTEES"); and
. any other necessary legal documents, if required, in the case of es-
tates, trusts, guardianships, custodianships, corporations, pension and
profit sharing plans and other organizations.
BY TELEPHONE
A redemption request by telephone requires the following:
. establish the telephone redemption privilege (and if desired, the wire
redemption privilege) by completing appropriate sections of the Applica-
tion; and
. call the Fund and instruct that the redemption proceeds be mailed to you
or wired to your bank.
The following tasks cannot be accomplished by telephone:
. changing the name of the commercial bank or the account designated to
receive redemption proceeds (this can be accomplished only by a written
request signed by each shareholder, with each signature guaranteed);
. redemption of certificated shares by telephone.
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<PAGE>
The Fund and its Sub-Transfer Agent will employ reasonable procedures to
confirm that instructions communicated by telephone are genuine, and they may
be liable for any losses if they fail to do so. These procedures include re-
quiring the investor to provide certain personal identification at the time an
account is opened, as well as prior to effecting each transaction requested by
telephone. In addition, all telephone transaction requests will be recorded
and investors may be required to provide additional telecopied written in-
structions of such transaction requests. The Fund or Sub-Transfer Agent may be
liable for any losses due to unauthorized or fraudulent telephone instructions
if the Fund or the Sub-Transfer Agent does not employ the procedures described
above. Neither the Fund nor the Sub-Transfer Agent will be responsible for any
loss, liability, cost or expense for following instructions received by tele-
phone that it reasonably believes to be genuine.
SIGNATURE GUARANTEES
Signature guarantees are required for the following redemptions:
. redemptions where the proceeds are to be sent to someone other than the
registered shareholder(s);
. redemptions where the proceeds are to be sent to an address which is not
the registered address; or
. share transfer requests.
Signature guarantees will be accepted from any eligible guarantor institu-
tion which participates in a signature guarantee program. Eligible guarantor
institutions include banks, as well as through most brokers, dealers, credit
unions, national securities exchanges, registered securities associations,
clearing agencies and savings associations. Broker-dealers guaranteeing signa-
tures must be a member of a clearing corporation or maintain net capital of at
least $100,000. Credit unions must be authorized to issue signature guaran-
tees. A notary public can not provide a signature guarantee.
OTHER REDEMPTION INFORMATION
Normally, the Fund will make payment for all shares sold under proper proce-
dures within one business day of and no more than seven days after receipt of
the request, or earlier if required under applicable law. The Fund may suspend
the right of redemption or postpone the date at times when the NYSE and Custo-
dian Bank are closed, or under any emergency circumstances as determined by
the SEC.
If the Fund's Board of Trustees determines that it would be detrimental to
the best interests of the remaining shareholders of the Fund to make payments
wholly or partly in cash, the Fund may pay the redemption proceeds in whole or
in part by a distribution in-kind of liquid securities held by the Portfolio
instead of cash in conformity with applicable rules of the SEC. Investors may
incur brokerage charges when they sell portfolio securities received in pay-
ment of redemptions.
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<PAGE>
SHAREHOLDER SERVICES
EXCHANGE PRIVILEGE
Institutional Class Shares of the Portfolio may be exchanged for Institu-
tional Class Shares of any other UAM Funds Portfolio. (See the list of Portfo-
lios of the UAM Funds at the end of this Prospectus.) Exchange requests should
be made by contacting the UAM Funds Service Center.
Any exchange will be based on the net asset value of the shares involved.
There is no sales commission or charge of any kind for an exchange. Before
making an exchange into a Portfolio, a shareholder should read its Prospectus
and consider the investment objectives of the Portfolio to be purchased. Call
the UAM Funds Service Center for a copy of the Prospectus for the Portfolio(s)
in which you are interested. Exchanges can only be made with Portfolios that
are qualified for sale in a shareholder's state of residence.
Exchange requests may be made either by mail or telephone. Telephone ex-
changes will be accepted only if the certificates for the shares to be ex-
changed have not been issued to the shareholder and if the registration of the
two accounts will be identical. Requests for exchanges received prior to 4
p.m. (ET) will be processed as of the close of business on the same day. Re-
quests received after 4 p.m. will be processed on the next business day. The
Board of Trustees may limit the frequency and amount of exchanges permitted.
For additional information regarding responsibility for the authenticity of
telephoned instructions, see "REDEMPTION OF SHARES BY TELEPHONE". An exchange
into another UAM Funds Portfolio is a sale of shares and may result in a gain
or loss for income tax purposes. The Fund may modify or terminate the exchange
privilege at any time.
VALUATION OF SHARES
The net asset value of the Portfolio is determined by dividing the value of
the Portfolio's assets attributable to the class, less any liabilities attrib-
utable to the class, by the number of shares outstanding attributable to the
class. The net asset value per share of the Portfolio is determined as of the
close of the NYSE on each day that the NYSE is open for business.
Equity securities listed on a securities exchange for which market quota-
tions are readily available are valued at the last quoted sale price of the
day. Price information on listed securities is taken from the exchange where
the security is primarily traded. Unlisted equity securities and listed secu-
rities not traded on the valuation date for which market quotations are read-
ily available are valued neither exceeding the current asked prices nor less
than the current bid prices. Quotations of foreign securities in a foreign
currency are converted to U.S. dollar equivalents. The converted value is
based upon the bid price of the foreign currency against U.S. dollars quoted
by any major bank or by a broker.
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<PAGE>
Securities purchased with remaining maturities of 60 days or less are valued
at amortized cost when the Board of Trustees determines that amortized cost
reflects fair value.
The value of other assets and securities for which no quotations are readily
available (including restricted securities) is determined in good faith at
fair value using methods determined by the Fund's Board of Trustees.
PERFORMANCE CALCULATIONS
The Portfolio measures performance by calculating total return. Total return
figures are based on historical earnings and are not intended to indicate fu-
ture performance.
Total return is the change in value of an investment in the Portfolio over a
given period, assuming reinvestment of any dividends and capital gains. A cu-
mulative or aggregate total return reflects actual performance over a stated
period of time. An average annual total return is a hypothetical rate of re-
turn that, if achieved annually, would have produced the same cumulative total
return if performance had been constant over the entire period.
The Portfolio's performance may be compared to data prepared by independent
services which monitor the performance of investment companies, data reported
in financial and industry publications, and various indices, all as further
described in the Portfolio's SAI. This information may also be included in
sales literature and advertising.
The Portfolio's Annual Report to Shareholders for the most recent fiscal
year end contains additional performance information that includes comparisons
with appropriate indices. The Annual Report is available without charge. Con-
tact the UAM Funds Service Center at the address or telephone number on the
cover of this Prospectus.
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
DIVIDENDS AND CAPITAL GAINS
The Portfolio will normally distribute substantially all of its net invest-
ment income (for tax purposes), to shareholders in quarterly dividends. If any
net capital gains are realized, the Portfolio will normally distribute them
annually. All dividends and capital gains distributions will be automatically
reinvested in additional shares of the Portfolio unless the Fund is notified
in writing that the shareholder elects to receive distributions in cash.
FEDERAL TAXES
The Portfolio intends to qualify as a "regulated investment company" under
subchapter M of the Internal Revenue Code of 1986, as amended, for federal
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<PAGE>
income tax purposes and to meet all other requirements that are necessary for
it (but not its shareholders) to be exempt from federal taxes on income and
gains paid to shareholders in the form of dividends. To do this, the Portfolio
must, among other things, distribute substantially all of its ordinary income
and net capital gains on an annual basis and maintain a portfolio of invest-
ments which satisfies certain diversification criteria.
Dividends paid by the Portfolio from net investment income, whether in cash
or reinvested in shares, are taxable to shareholders as ordinary income.
Short-term capital gains will be taxed as ordinary income. Long-term capital
gains distributions are taxed as long-term capital gains. Shareholders will be
notified annually of dividend income earned for tax purposes.
Dividends declared in October, November and December to shareholders of rec-
ord in such a month will be treated as if they had been paid by the Fund and
received by the shareholders on December 31 of the same calendar year, pro-
vided that the dividends are paid before February of the following year.
The Fund is required by Federal law to withhold 31% of reportable payments
paid to shareholders who have not complied with IRS regulations. In order to
avoid this withholding requirement, you must certify that your Social Security
or Taxpayer Identification Number you have provided is correct and that either
you are not currently subject to backup withholding or you are exempt from
backup withholding. This certification must be made on the Application or on a
separate form supplied by the Fund.
Dividends and interest received by the Portfolio may give rise to withhold-
ing and other taxes imposed by foreign countries. These taxes reduce the Port-
folio's dividends but are included in the taxable income reported on your tax
statement if the Portfolio qualifies for this tax treatment and elects to pass
it through to you. Consult a tax adviser for more information regarding deduc-
tions and credits for foreign taxes.
INVESTMENT ADVISER
The Adviser is a registered investment adviser formed in 1940. Its business
offices are located at 950 Haverford Road in Bryn Mawr, Pennsylvania. The Ad-
viser is a wholly-owned subsidiary of United Asset Management Corporation
("UAM") and provides and offers investment management and advisory services to
corporations, unions, pensions and profit-sharing plans, trusts, estates and
other institutions and investors. The Adviser currently has over $7 billion in
assets under management.
The Portfolio pays an annual fee in monthly installments to the Adviser for
advisory services. This fee is accrued daily and paid monthly as a percentage
of the average net assets in the Portfolio for that month. The percentage fee
on an annual basis is 0.50%.
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<PAGE>
The Adviser may compensate its affiliated companies for referring investors
to the Portfolio. The Distributor, UAM, the Adviser, or any of their affili-
ates, may, at its own expense, compensate a Service Agent or other person for
marketing, shareholder servicing, record-keeping and/or other services per-
formed with respect to the Fund, the Portfolio or any Class of Shares of the
Portfolio. The person making such payments may do so out of its revenues, its
profits or any other source available to it. Such services arrangements, when
in effect, are made generally available to all qualified service providers.
The Distributor, the Adviser and certain of their other affiliates also par-
ticipate, at the date of this Prospectus, in an arrangement with Smith Barney
Inc. under which Smith Barney provides certain defined contribution plan mar-
keting and other shareholder services and receives from such entities .15 of
1% of the daily net asset value of Institutional Class Shares held by Smith
Barney's eligible customer accounts in addition to amounts payable to all
selling dealers. The Fund also compensates Smith Barney for services it pro-
vides to certain defined contribution plan shareholders that are not otherwise
provided by UAMFSI.
An Investment Committee at the Adviser is responsible for the day-to-day
management of the Portfolio.
ADMINISTRATIVE SERVICES
UAM Fund Services, Inc. ("UAMFSI"), a wholly-owned subsidiary of United As-
set Management Corporation, is responsible for performing and overseeing ad-
ministrative, fund accounting, dividend disbursing and transfer agent services
provided to the Fund and its Portfolios. UAMFSI's principal office is located
at 211 Congress Street, Boston, MA 02110. UAMFSI has subcontracted some of
these services to Chase Global Funds Services Company ("CGFSC"), an affiliate
of The Chase Manhattan Bank, by a Mutual Funds Service Agreement dated April
15, 1996. CGFSC is located at 73 Tremont Street, Boston, MA 02108.
Each Portfolio pays UAMFSI a two part monthly fee: a Portfolio-specific fee
which is retained by UAMFSI and a sub-administration fee which UAMFSI in turn
pays to CGFSC. The following Portfolio-specific fees are calculated from the
aggregate net assets of each Portfolio:
<TABLE>
<CAPTION>
RATE
----
<S> <C>
Newbold's Equity Portfolio............................................. .06%
</TABLE>
CGFSC's monthly fee for its services is calculated on an annualized basis as
follows:
0.19 of 1% of the first $200 million of combined Fund assets;
0.11 of 1% of the next $800 million of combined Fund assets;
21
<PAGE>
0.07 of 1% of combined Fund assets in excess of $1 billion but less than
$3 billion;
0.05 of 1% of combined Fund assets in excess of $3 billion.
Fees are allocated among the Portfolios on the basis of their relative as-
sets and are subject to a graduated minimum fee schedule per Portfolio, which
starts at $2,000 per month and increases to $70,000 annually after two years.
If a separate class of shares is added to a Portfolio, its minimum annual fee
increases by $20,000.
DISTRIBUTOR
UAM Fund Distributors, Inc., a wholly-owned subsidiary of UAM with its prin-
cipal office located at 211 Congress Street, Boston, Massachusetts 02110, dis-
tributes the shares of the Fund. Under the Fund's Distribution Agreement (the
"Agreement"), the Distributor, as agent of the Fund, agrees to use its best
efforts as sole distributor of the Fund's shares. The Distributor does not re-
ceive any fee or other compensation under the Agreement with respect to this
Portfolio. The Agreement continues in effect as long as it is approved at
least annually by the Fund's Board of Trustees. Those approving the Agreement
include a majority of Trustees who are neither parties to the Agreement nor
interested persons of any such party. This Agreement provides that the Fund
will bear the costs of the registration of its shares with the SEC and various
states and the printing of its prospectuses, SAIs and reports to shareholders.
PORTFOLIO TRANSACTIONS
The Advisory Agreements for the Fund's Portfolios authorize the Adviser to
select the brokers or dealers that will execute the purchases and sales of in-
vestment securities for each Portfolio. The Agreements direct the Adviser to
use its best efforts to obtain the best available price and most favorable ex-
ecution for all transactions of the Portfolios. If consistent with the inter-
ests of the Portfolios, the Adviser may select brokers on the basis of re-
search, statistical and pricing services these brokers provide to the Portfo-
lios in addition to required Adviser services. Such brokers may be paid a
higher commission than that which another qualified broker would have charged
for effecting the same transaction, provided that such commissions are paid in
compliance with the Securities Exchange Act of 1934, as amended, and that the
Adviser determines in good faith that the commission is reasonable in terms
either of the transaction or the overall responsibility of the Adviser to the
Portfolios and the Adviser's other clients. Although not a typical practice,
the Adviser may place portfolio orders with qualified broker-dealers who refer
clients to the Adviser.
If a purchase or sale of securities is consistent with the investment poli-
cies of a Portfolio and one or more other clients served by the Adviser is
considering a
22
<PAGE>
purchase at or about the same time, transactions in such securities will be
allocated among the Portfolio and clients in a manner deemed fair and reason-
able by the Adviser. Although there is no specified formula for allocating
such transactions, allocations are subject to periodic review by the Fund's
Trustees.
GENERAL INFORMATION
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Fund was organized as a Delaware business trust on May 18, 1994 under
the name "The Regis Fund II." On October 31, 1995, the name of the Fund was
changed to "UAM Funds Trust." The Fund's Agreement and Declaration of Trust
permits the Fund to issue an unlimited number of shares of beneficial inter-
est, without par value. The Trustees have the power to designate one or more
series ("Portfolios") or classes of shares of beneficial interest without fur-
ther action by shareholders.
At its discretion, the Board of Trustees may create additional Portfolios
and classes of shares. The shares of each Portfolio are fully paid and nonas-
sessable, and have no preference as to conversion, exchange, dividends, re-
tirement or other features and no pre-emptive rights. They have noncumulative
voting rights, which means that holders of more than 50% of shares voting for
the election of Trustees can elect 100% of the Trustees. A shareholder is en-
titled to one vote for each full share held (and a fractional vote for each
fractional share held), then standing in his name on the books of the Fund.
Both Institutional Class and Institutional Service Class Shares represent an
interest in the same assets of a Portfolio. Institutional Service Class Shares
bear certain expenses related to shareholder servicing, and may bear expenses
related to the distribution of such shares. Service Class Shares have exclu-
sive voting rights with respect to matters relating to such distribution ex-
penditures. For information about the Service Class Shares of the Portfolios
contact the UAM Funds Service Center at the number on the cover of this Pro-
spectus.
Annual meetings will not be held except as required by the 1940 Act and
other applicable laws. The Fund has undertaken that its Trustees will call a
meeting of shareholders if such a meeting is requested in writing by the hold-
ers of not less than 10% of the outstanding shares of the Fund. The Fund will
assist shareholder communications in such matters.
CUSTODIAN
The Chase Manhattan Bank serves as custodian of the Fund's assets.
ACCOUNTANTS
Price Waterhouse LLP acts as the independent accountants for the Fund and
audits its financial statements annually.
23
<PAGE>
REPORTS
Investors will receive unaudited semi-annual financial statements and annual
financial statements audited by Price Waterhouse LLP.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be made by contacting the UAM Funds Service Center
at the number or address listed on the cover of this Prospectus.
LITIGATION
The Fund is not involved in any litigation.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS NOT CONTAINED IN THIS PROSPECTUS, OR IN THE PORTFOLIO'S STATEMENT
OF ADDITIONAL INFORMATION, IN CONNECTION WITH THE OFFERING MADE BY THIS PRO-
SPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR ITS REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFERING BY THE FUND IN ANY JURISDICTION IN WHICH SUCH OF-
FERING MAY NOT BE LAWFULLY MADE.
24
<PAGE>
UAM FUNDS -- INSTITUTIONAL CLASS SHARES
Acadian Emerging Markets Portfolio
Acadian International Equity Portfolio
BHM&S Total Return Bond Portfolio
Chicago Asset Management Intermediate Bond Portfolio
Chicago Asset Management Value/Contrarian Portfolio
C&B Balanced Portfolio
C&B Equity Portfolio
C&B Equity Portfolio for Taxable Investors
C&B Mid Cap Equity Portfolio
McKee Domestic Equity Portfolio
McKee International Equity Portfolio
McKee U.S. Government Portfolio
DSI Balanced Portfolio
DSI Disciplined Value Portfolio
DSI Limited Maturity Bond Portfolio
DSI Money Market Portfolio
FMA Small Company Portfolio
FPA Crescent Portfolio
Hanson Equity Portfolio
ICM Equity Portfolio
ICM Fixed Income Portfolio
ICM Small Company Portfolio
IRC Enhanced Index Portfolio
Jacobs International Octagon Portfolio
MJI International Equity Portfolio
Newbold's Equity Portfolio
NWQ Balanced Portfolio
NWQ Value Equity Portfolio
25
<PAGE>
Rice, Hall James Small Cap Portfolio
Rice, Hall James Small/Mid Cap Portfolio
Sirach Equity Portfolio
Sirach Fixed Income Portfolio
Sirach Growth Portfolio
Sirach Short-Term Reserves Portfolio
Sirach Special Equity Portfolio
Sirach Strategic Balanced Portfolio
SAMI Preferred Stock Income Portfolio
Sterling Partners' Balanced Portfolio
Sterling Partners' Equity Portfolio
Sterling Partners' Short-Term Fixed Income Portfolio
Sterling Partners' Small Cap Value Portfolio
TS&W Balanced Portfolio
TS&W Equity Portfolio
TS&W Fixed Income Portfolio
TS&W International Equity Portfolio
26
<PAGE>
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
1-800-638-7983
Investment Adviser
Newbold's Asset Management, Inc.
950 Haverford Road
Bryn Mawr, Pennsylvania
Distributor
UAM FUND DISTRIBUTORS, INC.
211 Congress Street
Boston, MA 02110
PROSPECTUS
January 3, 1997
<PAGE>
[LOGO OF UAM FUNDS APPEAR HERE]
Newbold's Equity
Portfolio
Institutional Service
Class Shares
January 3, 1997
P R O S P E C T U S
<PAGE>
UAM FUNDS
UAM FUNDS SERVICE CENTER
C/O CHASE GLOBAL FUNDS SERVICES COMPANY
P.O. BOX 2798
BOSTON, MA 02208-2798
1-800-638-7983
- -------------------------------------------------------------------------------
NEWBOLD'S EQUITY PORTFOLIO
INSTITUTIONAL SERVICE CLASS SHARES
INVESTMENT ADVISER: NEWBOLD'S ASSET MANAGEMENT, INC.
- -------------------------------------------------------------------------------
PROSPECTUS -- JANUARY 3, 1997
UAM Funds Trust (the "Fund") is an open-end investment company known as a
"mutual fund." The Fund consists of multiple series (known as "Portfolios")
each of which has different investment objectives and policies. Shares of each
class represent equal, pro rata interests in a Portfolio and accrue dividends
in the same manner except that Service Class Shares bear fees payable by the
class (at the rate of .40% per annum) to financial institutions for services
they provide to the owners of such shares. (See "SERVICE AND DISTRIBUTION
PLANS.") Newbold's Equity Portfolio currently offers two classes of shares:
Institutional Class Shares and Institutional Service Class Shares ("Service
Class Shares"). The securities offered in this Prospectus are Service Class
Shares of one diversified, no-load Portfolio of the Fund managed by Newbold's
Asset Management, Inc.
NEWBOLD'S EQUITY PORTFOLIO. The Newbold's Equity Portfolio (the "Portfolio")
seeks to achieve maximum long-term total return, consistent with reasonable
risk to principal, by investing primarily in a diversified portfolio of under-
valued equity securities of statistically attractive companies.
There can be no assurance that the Portfolio will achieve its stated objec-
tive.
Keep this Prospectus for future reference. It contains information that you
should know before you invest. A "Statement of Additional Information" (SAI)
containing additional information about the Fund has been filed with the Secu-
rities and Exchange Commission. The SAI is dated January 3, 1997 and has been
incorporated by reference into this Prospectus. For a free copy of the SAI
contact the UAM Funds Service Center at the address or telephone number above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Fund Expenses.............................................................. 1
Prospectus Summary......................................................... 3
Risk Factors............................................................... 4
Investment Objectives...................................................... 4
Investment Policies........................................................ 4
Other Investment Policies.................................................. 5
Investment Limitations..................................................... 11
Purchase of Shares......................................................... 12
Redemption of Shares....................................................... 15
Other Redemption Information............................................... 16
Service and Distribution Plans............................................. 17
Shareholder Services....................................................... 19
Valuation of Shares........................................................ 19
Performance Calculations................................................... 20
Dividends, Capital Gains Distributions and Taxes........................... 21
Investment Adviser......................................................... 22
Administrative Services.................................................... 22
Distributor................................................................ 23
Portfolio Transactions..................................................... 23
General Information........................................................ 24
UAM Funds--Service Class Shares............................................ 25
</TABLE>
<PAGE>
FUND EXPENSES
The following table illustrates expenses and fees that a shareholder of the
Portfolio's Service Class Shares would incur. Transaction fees may be charged
if a broker-dealer or other financial intermediary deals with the Fund on your
behalf. (See "PURCHASE OF SHARES.")
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Sales Load Imposed on Purchases......................................... NONE
Sales Load Imposed on Reinvested Dividends.............................. NONE
Deferred Sales Load..................................................... NONE
Redemption Fees......................................................... NONE
Exchange Fees........................................................... NONE
</TABLE>
ESTIMATED ANNUAL FUND OPERATING EXPENSES (As a Percentage of Average Net As-
sets)
<TABLE>
<S> <C>
Investment
Advisory
Fees........ 0.50 %
Administrative
Fees........ 0.61 %
12b-1 Fees:
(Including
Shareholder
Servicing
Fees)*...... 0.40 %
Other
Expenses.... 0.38 %
Advisory Fees
Waived and
Expenses
Assumed..... (0.59)%^
------
Total
Operating
Expenses
(After Fee
Waiver and
Expenses
Assumed)+... 1.30%
======
</TABLE>
- -----------
+ The Adviser has voluntarily agreed to waive its advisory fees and assume op-
erating expenses to keep the Portfolio's Service Class Shares' total operat-
ing expenses (excluding interest, taxes and extraordinary expenses) after
the effect of expense offset arrangements from exceeding 1.30% of average
daily net assets until January 29, 1998. If it were not for the fee waiver
and/or reimbursement, the Portfolio's Service Class Shares total annual op-
erating expenses would be 1.89% of average daily net assets. The Portfolio
will not reimburse the Adviser for any advisory fees which the Adviser may
bear on behalf of the Portfolio for a given fiscal year.
* The Service Class Shares may bear service fees of 0.25% and distribution
fees and expenses of up to 0.15%. Long-term shareholders may pay more than
the economic equivalent of the maximum front-end sales charges permitted by
rules of the National Association of Securities Dealers, Inc. (See "SERVICE
AND DISTRIBUTION PLANS.")
The table above shows various fees and expense an investor would bear di-
rectly or indirectly. The fees and expenses set forth above are estimates
based upon the Portfolio's Institutional Class Shares operations during the 6
month period ended October 31, 1996, except they have been restated to reflect
12b-1 fees, current Administrative Fees. (See "ADMINISTRATIVE SERVICES" herein
and in the SAI) and the current expense cap.
1
<PAGE>
The following example illustrates expenses a shareholder would pay on a
$1,000 investment over various time periods assuming (1) a 5% annual rate of
return and (2) redemption at the end of each time period. The Portfolios
charge no redemption fees of any kind.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
------ -------
<S> <C> <C>
Expenses...................................................... $ 13 $ 41
</TABLE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EX-
PENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE
SHOWN.
2
<PAGE>
PROSPECTUS SUMMARY
INVESTMENT ADVISER
Newbold's Asset Management, Inc. (the "Adviser") is a registered investment
adviser. Founded in 1940, the firm currently has over $5 billion in assets un-
der management. The Adviser is a wholly-owned subsidiary of United Asset Man-
agement Corporation. (See "INVESTMENT ADVISER.")
PURCHASE OF SHARES
Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the
"Distributor") to investors at net asset value without a sales commission.
Share purchases may be made by sending investments directly to the Fund. The
minimum initial investment in the Portfolio is $2,500. The minimum initial in-
vestment for IRA accounts is $500. The minimum initial investment for spousal
IRA accounts is $250. The minimum for any subsequent investment is $100. Cer-
tain exceptions to the initial or minimum investment amounts may be made by
the officers of the Fund. (See "PURCHASE OF SHARES.")
DIVIDENDS AND DISTRIBUTIONS
The Portfolio will normally distribute substantially all of its net invest-
ment income in an annual dividend. Any realized net capital gains will also be
distributed annually. Distributions will be reinvested in the Portfolio's
shares automatically unless an investor elects to receive cash distributions.
(See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES.")
REDEMPTIONS OF SHARES
Shares of the Portfolio may be redeemed at any time, without cost, at the
net asset value of the Portfolio next determined after receipt of the redemp-
tion request. The redemption price may be more or less than the purchase
price. (See "REDMEPTION OF SHARES.")
ADMINISTRATIVE SERVICES
UAM Fund Services, Inc. ("UAMFSI"), a wholly-owned subsidiary of United As-
set Management Corporation ("UAM"), is responsible for performing and oversee-
ing administration, dividend disbursing and transfer agency services provided
to the Fund and its Portfolios by third-party service providers. (See "ADMIN-
ISTRATIVE SERVICES.")
3
<PAGE>
RISK FACTORS
The value of the Portfolio's shares will fluctuate in response to changes in
market and economic conditions as well as the financial conditions and pros-
pects of the issuers in which the Portfolio invests. Prospective investors
should consider the following: (1) The Portfolio may engage in various strate-
gies to seek to hedge its investments against movements in security prices by
the use of derivatives including options and futures as well as options on
futures. Such strategies are commonly referred to as "derivatives" and involve
the risk of imperfect correlation in movements in the price of options and
futures and movements in the price of securities which are the subject of the
hedge. Options and futures transactions in foreign markets are also subject to
the risk factors associated with foreign investments generally. There can be
no assurance that a liquid secondary market for options and futures contracts
will exist at any specific time; (2) The Portfolio may invest in the securi-
ties of foreign issuers which may be subject to additional risks factors, in-
cluding foreign currency risks, not applicable to securities of U.S. issuers;
(3) The Portfolio may invest in repurchase agreements which entail a risk of
loss should the seller default on its transaction; (4) The Portfolio may lend
its investment securities which entails a risk of loss should a borrower fail
financially; (5) The Portfolio may purchase securities on a when-issued basis
which do not earn interest until issued and may decline or appreciate in mar-
ket value prior to their delivery to the Portfolio. (See "OTHER INVESTMENT
POLICIES.")
INVESTMENT OBJECTIVE
The Portfolio seeks to achieve maximum long-term total return, consistent
with reasonable risk to principal, by investing primarily in a diversified
portfolio of undervalued equity securities of statistically attractive
companies. The Adviser believes that the Portfolio's performance over the long
term will be superior to its benchmark index (the Standard & Poor's 500 Stock
Index). There can be no assurance that the Portfolio will achieve its stated
objective.
INVESTMENT POLICIES
In seeking its investment objective, the Portfolio will invest at least 65%
of its total assets, under normal circumstances, in equity securities, con-
sisting of common stock, preferred stock, convertible preferred stock, con-
vertible bonds, rights and warrants. The Portfolio will invest primarily in
equity securities of large capitalization companies which are defined as those
with equity capitalizations greater than $1 billion at the time of purchase.
The Adviser believes that investment value and return can be achieved by in-
vesting in stocks with a low price relative to current earnings. This bottom-
up approach seeks to identify companies whose earnings growth suggests an in-
creasing stream of future dividend income and whose share prices represent a
level below realizable value.
4
<PAGE>
The Adviser is able to identify prospective companies through a computerized
screening process which rates on three key elements: Market capitalization--$1
billion or more for purposes of liquidity; Dividend payout--ordinarily must
pay cash dividends; Financial leverage--debt should not be excessive, and an
investment grade bond rating is required.
The stock issues of the qualifying companies are then sorted by price-
/earnings ratio, ranked from highest to lowest and broken into five groups,
each consisting of 100 stocks. The bottom two groups are subject to intense
fundamental analysis by the Adviser. The objective is to assemble a portfolio
of 40-70 statistically attractive stocks which represent relative "value" not
generally recognized by the market. However, the Portfolio has the flexibility
to invest in less than 40 stocks or more than 70 stocks, as the Adviser deems
necessary. Earnings for cyclical stocks are normalized in this valuation proc-
ess.
Once the portfolio has been constructed, its price/earnings multiples are
continually monitored. The Portfolio will stop buying a stock when its price-
/earnings ratio approaches the current price/earnings multiple of the Standard
& Poor's 500 Stock Index. The stock is sold when it moves above the market's
multiple.
When the Adviser believes that market conditions warrant a defensive posi-
tion, up to 100% of the Portfolio's assets may be held in cash and short-term
investments. See "SHORT-TERM INVESTMENTS" below for a description of the types
of short-term instruments in which the Portfolio may invest for temporary de-
fensive purposes. When the Portfolio is in a defensive position, it may not
necessarily be pursuing its stated investment objective.
OTHER INVESTMENT POLICIES
The Portfolio may also, under normal circumstances, invest up to 35% its as-
sets, unless restricted by additional limitations described below or in the
Portfolio's SAI, in the following securities or investment techniques:
SHORT-TERM INVESTMENTS
In order to earn a return on uninvested assets, meet anticipated redemp-
tions, or for temporary defensive purposes, the Portfolio may invest a portion
of its assets in domestic and foreign money market instruments including cer-
tificates of deposit, bankers' acceptances, time deposits, U.S. Government ob-
ligations, U.S. Government agency securities, short-term corporate debt secu-
rities, and commercial paper rated A-1 or A-2 by Standard & Poor's Corporation
or Prime-1 or Prime-2 by Moody's Investors Service, Inc., or if unrated, de-
termined by the Adviser to be of comparable quality.
Time deposits maturing in more than seven days will not be purchased by the
Portfolio, and time deposits maturing from two business days through seven
calendar days will not exceed 10% of the total assets of the Portfolio. The
Portfolio will
5
<PAGE>
not invest in any security issued by a commercial bank unless (i) the bank has
total assets of at least $1 billion, or the equivalent in other currencies,
(ii) in the case of U.S. banks, it is a member of the Federal Deposit Insur-
ance Corporation, and (iii) in the case of foreign branches of U.S. banks, the
security is, in the opinion of the Adviser, of an investment quality compara-
ble with other debt securities which may be purchased by the Portfolio.
The Fund has received permission from the Securities and Exchange Commission
(the "SEC") to deposit the daily uninvested cash balances of the Fund's Port-
folios, as well as cash for investment purposes, into one or more joint ac-
counts and to invest the daily balance of the joint accounts in the following
short-term investments: fully collateralized repurchase agreements, interest-
bearing or discounted commercial paper including dollar-denominated commercial
paper of foreign issuers, and any other short-term money market instruments
including variable rate demand notes and tax-exempt money instruments. By en-
tering into these investments on a joint basis, it is expected that the Port-
folio may earn a higher rate of return on investments relative to what it
could earn individually.
The Fund has received permission from the SEC for each of its Portfolios to
invest, for cash management purposes, the greater of 5% of its total assets or
$2.5 million in the Fund's DSI Money Market Portfolio. (See "INVESTMENT
COMPANIES.")
REPURCHASE AGREEMENTS
The Portfolio may invest in repurchase agreements collateralized by U.S.
Government securities, certificates of deposit, and certain bankers' accept-
ances and other securities outlined above under "SHORT-TERM INVESTMENTS." In a
repurchase agreement, the Portfolio buys a security and simultaneously commits
to sell that security back at an agreed upon price plus an agreed upon market
rate of interest. Under a repurchase agreement, the seller is also required to
maintain the value of securities subject to the agreement at not less than
100% of the repurchase price. The Administrator and the Adviser will mark to
market daily the value of the securities purchased. The use of repurchase
agreements involves certain risks. For example, a default by the seller of the
agreement may cause the Portfolio to experience a loss or delay in the liqui-
dation of the collateral securing the repurchase agreement. The Portfolio
might also incur disposition costs in liquidating the collateral. While the
Fund's management acknowledges these risks, it is expected that they can be
controlled through stringent security selection criteria and careful monitor-
ing procedures. The Fund has received permission from the SEC to pool daily
uninvested cash balances of the Fund's Portfolios in order to invest in repur-
chase agreements on a joint basis. By entering into joint repurchase agree-
ments, the Portfolio may incur lower transactions costs and earn higher rates
of interest on joint repurchase agreements. The Portfolio's contribution would
determine its return from a joint repurchase agreement. (See "SHORT TERM IN-
VESTMENTS.")
6
<PAGE>
LENDING OF SECURITIES
The Portfolio may lend its investment securities to qualified institutional
investors as a means of earning income. The Portfolio will not loan securities
to the extent that greater than one-third of its assets at fair market value
would be committed to loans. During the term of a loan, the Portfolio is sub-
ject to a gain or loss depending on any increase or decrease in the market
price of the securities loaned. Lending of securities is subject to review by
the Fund's Board of Trustees. All relevant facts and circumstances, including
the creditworthiness of the broker, dealer or institution, will be considered
in making decisions about securities lending.
An investment company may pay reasonable negotiated fees in connection with
loaned securities so long as such fees are set forth in a written contract and
approved by its Board of Trustees. The Portfolios will continue to retain any
voting rights with respect to loaned securities. If a material event occurs af-
fecting an investment on a loan, the loan must be called and the securities
voted.
WHEN-ISSUED, FORWARD DELIVERY AND DELAYED SETTLEMENT SECURITIES
The Portfolio may purchase and sell securities on a "when-issued," "delayed
settlement," or "forward delivery" basis. "When-issued" or "forward delivery"
refers to securities whose terms and indenture are available, and for which a
market exists, but which are not available for immediate delivery. When-issued
and forward delivery transactions may be expected to occur a month or more be-
fore delivery is due. Delayed settlement is a term used to describe settlement
of a securities transaction in the secondary market which will occur sometime
in the future. No payment or delivery is made by the Portfolio until it re-
ceives payment or delivery from the other party to any of the above transac-
tions. It is possible that the market price of the securities at the time of
delivery may be higher or lower than the purchase price. The Portfolio will
maintain a separate account of cash or liquid securities at least equal to the
value of purchase commitments until payment is made. Typically, no income ac-
crues on securities purchased on a delayed delivery basis prior to the time de-
livery is made although the Portfolio may earn income on securities it has de-
posited in a segregated account.
The Portfolio may engage in these types of purchases in order to buy securi-
ties that fit with its investment objectives at attractive prices--not to in-
crease its investment leverage.
PORTFOLIO TURNOVER
Portfolio turnover is not anticipated to exceed 60%. In addition to Portfolio
trading costs, higher rates of portfolio turnover may result in the realization
of capital gains. (See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES" for
more information on taxation). The Portfolio will not normally engage in short-
term trading, but reserves the right to do so. The table set forth in "Finan-
cial Highlights" presents the Portfolio's historical portfolio turnover ratios.
7
<PAGE>
INVESTMENT COMPANIES
The Portfolio reserves the right to invest up to 10% of its total assets,
calculated at the time of investment, in the securities of other open-end or
closed-end investment companies. No more than 5% of the investing Portfolio's
total assets may be invested in the securities of any one investment company
nor may it acquire more than 3% of the voting securities of any other invest-
ment company. The Portfolio will indirectly bear its proportionate share of any
management fees paid by an investment company in which it invests in addition
to the advisory fee paid by the Portfolio.
The Fund has received permission from the SEC to allow each of its Portfolios
to invest, for cash management purposes, the greater of 5% of its total assets
or $2.5 million in the Fund's DSI Money Market Portfolio provided that the in-
vestment is consistent with the Portfolio's investment policies and restric-
tions. Based upon the Portfolio's assets invested in the DSI Money Market Port-
folio, the investing Portfolio's adviser will waive its investment advisory fee
and any other fees earned as a result of the Portfolio's investment in the DSI
Money Market Portfolio. The investing Portfolio will bear expenses of the DSI
Money Market Portfolio on the same basis as all of its other shareholders.
AMERICAN DEPOSITARY RECEIPTS
The Portfolio intends to invest primarily in U.S.-based companies. In addi-
tion, the Portfolio may purchase shares of foreign-based companies in the form
of American Depositary Receipts (ADRs). ADRs may be sponsored or unsponsored.
Sponsored ADRs are established jointly by a depositary and the underlying issu-
er, whereas unsponsored ADRs may be established without participation by the
underlying issuer. Holders of an unsponsored ADR generally bear all the costs
associated with establishing the unsponsored ADR. The depositary of an
unsponsored ADR is under no obligation to distribute shareholder communications
received from the underlying issuer or to pass through voting rights to the
holders of the unsponsored ADR with respect to the deposited securities or pool
of securities.
FOREIGN INVESTMENTS
Investing in foreign companies may involve additional risks and considera-
tions which are not typically associated with investing in U.S. companies.
Since stocks of foreign companies are normally denominated in foreign curren-
cies, the Portfolio may be affected favorably or unfavorably by changes in cur-
rency rates and in exchange control regulations, and may incur costs in connec-
tion with conversions between various currencies.
As non-U.S. companies are not generally subject to uniform accounting, audit-
ing and financial reporting standards and practices comparable to those appli-
cable to U.S. companies, comparable information may not be readily available
about certain foreign companies. Securities of some non-U.S. companies may be
less
8
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liquid and more volatile than securities of comparable U.S. companies. In addi-
tion, in certain foreign countries, there is the possibility of expropriation
or confiscatory taxation, political or social instability, or diplomatic devel-
opments which could affect U.S. investments in those countries.
Although the Portfolio will seek the most favorable trading costs available
in any given market, investors should recognize that foreign commissions are
generally higher than those in the U.S. In addition, custodial expenses, that
is, fees paid to financial institutions for holding the Portfolio's securities,
will generally be higher than would be the case in the U.S.
Some foreign governments also levy withholding taxes against dividend and in-
terest income. Although in some countries a portion of the taxes is recover-
able, the non-recovered portion of foreign withholding taxes will reduce the
income the Portfolio receives from the companies comprising its investments.
HEDGING AND RELATED STRATEGIES AND RISK CONSIDERATIONS
To reduce the overall risk of its investments (hedge), the Portfolio may use
options, futures contracts, and options on futures contracts. Hedging strate-
gies may also be used in an attempt to manage the Portfolio's exposure to
changing security prices. The Portfolio's ability to use these strategies may
be limited by market conditions, regulatory limits and tax considerations. The
Portfolio's obligation under such hedging strategies will be covered by the
maintenance of a segregated account consisting of cash, U.S. Government securi-
ties or liquid high grade debt obligations equal to at least 100% of the Port-
folio's commitment. The Portfolio may buy or sell futures contracts, write cov-
ered call options and buy put and call options on any security or index, in-
cluding options and futures traded on foreign exchanges and options not traded
on exchanges. The Portfolio's Statement of Additional Information contains fur-
ther information on all of these strategies and the risks associated with them.
The Portfolio may write or purchase options in privately negotiated transac-
tions ("OTC Options") as well as listed options. OTC Options can be closed out
only by agreement with the other party to the transaction. Any OTC Option pur-
chased by the Portfolio is considered an illiquid security. Any OTC Option
written by the Portfolio will be with a qualified dealer pursuant to an agree-
ment under which the Portfolio may repurchase the option at a formula price.
Such options are considered illiquid to the extent that the formula price ex-
ceeds the intrinsic value of the option. The Portfolio may not purchase or sell
futures contracts or related options for which the aggregate initial margin and
premiums exceed 5% of the fair market value of the Portfolio's assets. In order
to prevent leverage in connection with the purchase of futures contracts or
call options thereon by the Portfolio, an amount of cash, cash equivalents or
liquid high grade debt securities equal to the
9
<PAGE>
market value of the obligation under the futures contracts or options (less any
related market deposits) will be maintained in a segregated account with the
Fund's Custodian. The Portfolio may not invest more than 15% of its net assets
in illiquid securities and repurchase agreements which have a maturity of
longer than seven days. A more complete discussion of the potential risks in-
volved in transactions in options or futures contracts and related options is
contained in the Portfolio's Statement of Additional Information.
RISK CONSIDERATIONS. The Portfolio might not employ any of the hedging strat-
egies described above, and there can be no assurance that any strategy used
will succeed. If the Adviser incorrectly forecasts market values or other eco-
nomic factors in utilizing a strategy for the Portfolio, the Portfolio would be
in a better position if it had not hedged at all. In addition, the Portfolio
will pay commissions and other costs in connection with such investments which
may increase the Portfolio's expenses and reduce its return.
The use of these strategies involves certain risks, including (1) the fact
that skills needed to use hedging instruments are different from those needed
to select the Portfolio's securities, (2) possible imperfect correlation, or
even no correlation, between price movements of hedging instruments and price
movements of the investments being hedged, (3) the fact that, while hedging
strategies can reduce the risk of loss, they can also reduce the opportunity
for gain, or even result in losses, by offsetting favorable price movements in
hedged investments and (4) the possible inability of the Portfolio to purchase
or sell a security at a time that otherwise would be favorable for it to do so,
or the possible need for the Portfolio to sell a security at a disadvantageous
time due to the need for it to maintain "cover" or to segregate securities in
connection with hedging transactions, and the possible inability of the Portfo-
lio to close out or to liquidate its hedged position.
RESTRICTED AND ILLIQUID SECURITIES
The Portfolio may purchase restricted securities that are not registered for
sale to the general public but which are eligible for resale to qualified in-
stitutional investors under Rule 144A of the Securities Act of 1933. Under the
supervision of the Fund's Board of Trustees, the Adviser determines the liquid-
ity of such investments by considering all relevant factors. Provided that a
dealer or institutional trading market in such securities exists, these re-
stricted securities are not treated as illiquid securities for purposes of the
Portfolio's investment limitations. The Portfolio may also invest up to 15% of
its net assets in securities that are illiquid. The prices realized from the
sales of these securities could be less than those originally paid by the Port-
folio or less than what may be considered the fair value of such securities.
10
<PAGE>
INVESTMENT LIMITATIONS
The Portfolio will not:
(a) with respect to 75% of its assets, invest more than 5% of its total
assets at the time of purchase in the securities of any single issuer
(other than obligations issued or guaranteed as to principal and in-
terest by the U.S. Government or any of its agencies or instrumentali-
ties);
(b) with respect to 75% of its assets, purchase more than 10% of any class
of the outstanding voting securities of any issuer;
(c) invest more than 5% of its assets at the time of purchase in the secu-
rities of companies that have (with predecessors) a continuous operat-
ing history of less than 3 years;
(d) invest more than 25% of its assets in companies within a single indus-
try; however, there are no limitations on investments made in instru-
ments issued or guaranteed by the U.S. Government and its agencies.
(e) make loans except by purchasing debt securities in accordance with its
investment objective and policies or entering into repurchase agree-
ments or by lending its portfolio securities to banks, brokers, deal-
ers and other financial institutions so long as the loans are made in
compliance with the 1940 Act, as amended, or the Rules and Regulations
or interpretations of the SEC;
(f) (i) borrow, except from banks and as a temporary measure for extraor-
dinary or emergency purposes and then, in no event, in excess of 33
1/3% of the Portfolio's gross assets valued at the lower of market or
cost, and (ii) the Portfolio may not purchase additional securities
when borrowings exceed 5% of total assets; or
(g) pledge, mortgage or hypothecate any of its assets to an extent greater
than 33 1/3% of its total assets at fair market valuej.
The Portfolio's investment objective and investment limitations (a), (b),
(d), (e) and (f)(i) listed above are fundamental policies and may be changed
only with the approval of the holders of a majority of the outstanding voting
securities of the Portfolio. The other investment limitations described here,
those not specified as fundamental in the SAI, and the Portfolio's investment
policies are not fundamental, and the Fund's Board of Trustees may change them
without shareholder approval.
11
<PAGE>
PURCHASE OF SHARES
Shares of the Portfolio and Classes are offered through UAM Fund Distribu-
tors, Inc. (the "Distributor") without a sales commission, at the net asset
value per share next determined after an order is received by the Fund and
payment is received by the custodian. The required minimum initial investment
for the Portfolio is $2,500. The initial investment minimum for IRA accounts
is $500. The minimum initial investment for spousal IRA accounts is $250. Cer-
tain exceptions may be determined by the officers of the Fund.
The Portfolio issues two classes of shares: Institutional Class and Institu-
tional Service Class. The two classes of shares each represent interests in
the same portfolio of investments, have the same rights and are identical in
all respects, except that the Service Class Shares offered by this Prospectus
bear shareholder servicing expenses and distribution plan expenses, and have
exclusive voting rights with respect to the Rule 12b-1 Distribution Plan pur-
suant to which the distribution fee may be paid. The two classes have differ-
ent exchange privileges. (See "EXCHANGE PRIVILEGE.") The net income attribut-
able to Service Class Shares and the dividends payable on Service Class Shares
will be reduced by the amount of the shareholder servicing and distribution
fees; accordingly, the net asset value of the Service Class Shares will be re-
duced by such amount to the extent the Portfolio has undistributed net income.
Some Service Agents may also impose additional or different conditions or
other account fees on the purchase and redemption of Portfolio shares, which
are not subject to the Rule 12b-1 Service and Distribution Plans, which may
include transaction fees and/or service fees paid by the Fund from the Fund
assets attributable to the Service Agent, and would not be imposed if shares
of the Portfolio were purchased directly from the Fund or the Distributor. The
Service Agents may provide shareholder services to their customers that are
not available to a shareholder dealing directly with the Fund. Each Service
Agent is responsible for transmitting to its customers a schedule of any such
fees and information regarding different purchase and redemption conditions.
Shareholders who are customers of Service Agents should consult their Service
Agent for information regarding these fees and conditions. A salesperson and
any other person entitled to receive compensation for selling or servicing
Portfolio shares may receive different compensation with respect to one par-
ticular class of shares over another in the Fund.
Service Agents may enter confirmed purchase orders on behalf of their cus-
tomers. If shares of the Portfolio are purchased in this manner, the Service
Agent must receive your investment order before the close of trading on the
New York Stock Exchange ("NYSE"), and transmit it to the Fund's Sub-Transfer
Agent prior to 4 p.m. to receive that day's share price. Proper payment for
the order must be received by the Sub-Transfer Agent no later than the time
when the Portfolio is priced on the following business day. Service Agents are
responsible to their cus
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<PAGE>
tomers and the Fund for timely transmission of all subscription and redemption
requests, investment information, documentation and money.
INITIAL INVESTMENT
BY MAIL
. Complete and sign an Application and forward it together with a check
payable to UAM Funds to:
UAM Funds Trust
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
Payment for purchases of shares received by mail will be credited to an ac-
count at the next share price calculated for the Portfolio after receipt. Pay-
ment does not need to be converted into Federal Funds (monies credited to the
Fund's Custodian Bank by a Federal Reserve Bank) before the Fund will accept it
for investment.
BY WIRE
. Telephone the UAM Funds Service Center and provide the account name, ad-
dress, telephone number, social security or taxpayer identification num-
ber, the Portfolio selected (Service Class Shares), the amount being
wired and the name of the bank wiring the funds. An account number will
then be provided to you. Next,
. instruct your bank to wire the specified amount to the Fund's Custodian;
The Chase Manhattan Bank
ABA #021000011
UAM Funds
Credit DDA #9102772952
Ref: Portfolio Name
Your Account Number
Your Account Name
Wire Control Number
. Forward a completed Application to the Fund at the address shown on the
form. Federal Funds purchases will be accepted only on days when the
NYSE and the Custodian Bank are open for business.
ADDITIONAL INVESTMENTS
Additional investment may be made at any time. The minimum additional invest-
ment is $100. Shares may be purchased at net asset value through your Service
Agent or by mailing a check to the UAM Funds Service Center (payable
13
<PAGE>
to "UAM Funds") at the above address or by wiring monies to the Custodian Bank
using the instructions outlined above. When making additional investments, be
sure that your account number, account name, class of shares, and the Portfo-
lio to be purchased, are specified on the check or wire.
Prior to wiring additional investments, please notify the UAM Funds Service
Center. Mail orders should include, when possible, the "Invest by Mail" stub
which accompanies any Fund confirmation statement.
OTHER PURCHASE INFORMATION
Investments received by 4 p.m. ET (the close of the NYSE) will be invested
at the share price calculated after the NYSE closes on that day. Investments
received after the close of the NYSE will be executed at the price computed on
the next day the NYSE is open. The Fund reserves the right, in its sole dis-
cretion, to suspend the offering of shares of each Portfolio or to reject pur-
chase orders when, in the judgment of management, such suspension or rejection
is in the best interests of the Fund. Purchases of a Portfolio's shares will
be made in full and fractional shares of the Portfolio calculated to three
decimal places. Certificates for fractional shares will not be issued. Certif-
icates for whole shares will not be issued except at the written request of
the shareholder.
IN-KIND PURCHASES
If accepted by the Fund, shares of a Portfolio may be purchased in exchange
for securities which are eligible for acquisition by the Portfolio, as de-
scribed in this Prospectus. Securities to be exchanged which are accepted by
the Fund will be valued as described under "VALUATION OF SHARES" at the next
determination of net asset value after acceptance. Shares issued by a Portfo-
lio in exchange for securities will be issued at net asset value determined as
of the same time. All dividends, interest, subscription, or other rights per-
taining to such securities shall become the property of the Portfolio and must
be delivered to the Fund by the investor upon receipt from the issuer. Securi-
ties acquired through an in-kind purchase will be acquired for investment and
not for immediate resale.
The Fund will not accept securities in exchange for shares of a Portfolio
unless:
. at the time of exchange, such securities are eligible to be included in
the Portfolio (current market quotations must be readily available for
such securities);
. the investor represents and agrees that all securities offered to be ex-
changed are liquid securities and not subject to any restrictions upon
their sale by the Portfolio under the Securities Act of 1933, or other-
wise; and
14
<PAGE>
. the value of any such securities (except U.S. Government securities) be-
ing exchanged together with other securities of the same issuer owned by
the Portfolio will not exceed 5% of the net assets of the Portfolio im-
mediately after the transaction.
Investors who are subject to Federal taxation upon exchange may realize a
gain or loss for Federal income tax purposes depending upon the cost of secu-
rities or local currency exchanged. Investors interested in such exchanges
should contact the Adviser.
REDEMPTION OF SHARES
Shares of the Portfolio may be redeemed by mail or telephone, at any time,
without cost, at the net asset value of the Portfolio next determined after
receipt of the redemption request. No charge is made for redemptions. Any re-
demption may be more or less than the purchase price of your shares depending
on the market value of the investment securities held by the Portfolio.
BY MAIL
Address requests for redemption to the UAM Funds Service Center. Requests to
redeem shares must include:
. share certificates, if issued;
. a letter of instruction or an assignment specifying the number of shares
or dollar amount to be redeemed, signed by all registered owners of the
shares in the exact names in which they are registered;
. any required signature guarantees (see "SIGNATURE GUARANTEES"); and
. any other necessary legal documents, if required, in the case of es-
tates, trusts, guardianships, custodianships, corporations, pension and
profit sharing plans and other organizations.
BY TELEPHONE
A redemption request by telephone requires the following:
. establish the telephone redemption privilege (and if desired, the wire
redemption privilege) by completing appropriate sections of the Applica-
tion; and
. call the Fund and instruct that the redemption proceeds be mailed to you
or wired to your bank.
The following tasks cannot be accomplished by telephone:
. changing the name of the commercial bank or the account designated to
receive redemption proceeds (this can be accomplished only by a written
request signed by each shareholder, with each signature guaranteed);
. redemption of certificated shares by telephone.
15
<PAGE>
The Fund and its Sub-Transfer Agent will employ reasonable procedures to
confirm that instructions communicated by telephone are genuine, and they may
be liable for any losses if they fail to do so. These procedures include re-
quiring the investor to provide certain personal identification at the time an
account is opened, as well as prior to effecting each transaction requested by
telephone. In addition, all telephone transaction requests will be recorded
and investors may be required to provide additional telecopied written in-
structions of such transaction requests. The Fund or Sub-Transfer Agent may be
liable for any losses due to unauthorized or fraudulent telephone instructions
if the Fund or the Sub-Transfer Agent does not employ the procedures described
above. Neither the Fund nor the Sub-Transfer Agent will be responsible for any
loss, liability, cost or expense for following instructions received by tele-
phone that it reasonably believes to be genuine.
SIGNATURE GUARANTEES
Signature guarantees are required for the following redemptions:
. redemptions where the proceeds are to be sent to someone other than the
registered shareholder(s);
. redemptions where the proceeds are to be sent to an address which is not
the registered address; or
. share transfer requests.
Signature guarantees will be accepted from any eligible guarantor institu-
tion which participates in a signature guarantee program. Eligible signature
guarantors include most banks, as well as most brokers, dealers, credit
unions, national securities exchanges, registered securities associations,
clearing agencies and savings associations. Broker-dealers guaranteeing signa-
tures must be a member of a clearing corporation or maintain net capital of at
least $100,000. Credit unions must be authorized to issue signature guaran-
tees. A notary public can not provide a signature guarantee.
OTHER REDEMPTION INFORMATION
Normally, the Fund will make payment for all shares sold under proper proce-
dures within one business day of and no more than seven days after the receipt
of the request, or earlier if required under applicable law. The Fund may sus-
pend the right of redemption or postpone the date at times when both the NYSE
and Custodian Bank are closed, or under any emergency circumstances determined
by the SEC.
If the Board of Trustees determines that it would be detrimental to the best
interests of remaining shareholders of the Fund to make payment wholly or
partly in cash, the Fund may pay redemption proceeds in whole or in part by a
distribution in-kind of liquid securities held by the Portfolio in lieu of
cash in conformity with applicable rules of the SEC. Investors may incur bro-
kerage charges on the sale of portfolio securities received in payment of re-
demptions.
16
<PAGE>
SERVICE AND DISTRIBUTION PLANS
Under the Service Plan for Service Class Shares, adopted pursuant to Rule
12b-1 under the 1940 Act, the Fund may enter into service agreements with
Service Agents (broker-dealers or other financial institutions) who receive
fees with respect to the Fund's Service Class Shares owned by shareholders for
whom the Service Agent is the dealer or holder of record, or for whom the
Service Agent performs Servicing, as defined below. These fees are paid out of
the assets allocable to Service Class Shares to the Distributor or to the
Service Agents directly or through the Distributor. The Fund reimburses the
Distributor or the Service Agent for payments made at an annual rate of up to
0.40% of the average daily value of Service Class Shares owned by clients of
the Service Agent during the period payments for Servicing are being made to
it. Such payments are borne exclusively by the Service Class Shares. Each item
for which a payment may be made under the Service Plan constitutes personal
service and/or shareholder account maintenance and may constitute an expense
of distributing Fund shares as the SEC construes such term under Rule 12b-1.
The fees payable for Servicing reflect actual expenses incurred up to the
limit described herein.
Servicing may include assisting clients in changing dividend options, ac-
count designations and addresses; performing subaccounting; establishing and
maintaining shareholder accounts and records; processing purchase and redemp-
tion transactions; investing client cash account balances automatically in
Service Class Shares; providing periodic statements showing a client's account
balance and integrating such statements with those of other transactions and
balances in the client's other accounts serviced by the Service Agent; arrang-
ing for bank wires; and such other services as the Fund may request, to the
extent the Service Agent is permitted by applicable statute, rule or regula-
tion.
The Glass-Steagall Act and other applicable laws prohibit federally chart-
ered or supervised banks from engaging in certain aspects of the business of
issuing, underwriting, selling and/or distributing securities. Accordingly,
banks are engaged to act as Service Agent only to perform administrative and
shareholder servicing functions, including transaction-related agency services
for their customers. If a bank is prohibited from acting as a service agent,
alternative means for continuing the servicing of its shareholders would be
sought and the shareholder clients of the bank will remain Fund shareholders.
The Distributor promotes the distribution of the Service Class Shares in ac-
cordance with the terms of a Distribution Plan adopted pursuant to Rule 12b-1
under the 1940 Act. The Distribution Plan provides for the use of Fund assets
allocable to Service Class Shares to pay expenses of distributing such shares.
The Distribution Plan and Service Plan (the "Plans") were approved by the
Board, including a majority of the Trustees who are not "interested persons"
of
17
<PAGE>
the Fund as defined in the 1940 Act (and each of whom has no direct or indi-
rect financial interest in the Plans or any agreement related thereto, re-
ferred to herein as the "12b-1 Trustees"). The Plans may be terminated at any
time by the vote of the Board or the 12b-1 Trustees, or by the vote of a ma-
jority of the outstanding Service Class Shares of the Portfolio involved.
While the Plans continue in effect, the selection of the 12b-1 Trustees is
committed to the discretion of such persons then in office. The Plans provide
generally that the Portfolio may incur distribution and service costs under
the Plans which may not exceed in the aggregate 0.75% per annum of that Port-
folio's net assets. The Board has currently limited aggregate payments under
the Plans to 0.50% per annum of the Portfolio's net assets. The Service Class
Shares offered by this Prospectus currently are not making payments under the
Distribution Plan. Under the Plans as implemented, Distribution Plan expenses
may be no more than 0.15% and Service Plan expenses may be no more than 0.25%.
Upon implementation, the Distribution Plan would permit payments to the Dis-
tributor, broker-dealers, other financial institutions, sales representatives
or other third parties who render promotional and distribution services, for
items such as advertising expenses, selling expenses, commissions or travel
reasonably intended to result in sales of Service Class Shares and for the
printing of prospectuses sent to prospective purchasers of Service Class
Shares of the Portfolio.
Although the Plans may be amended by the Board of Trustees, any changes in
the Plans which would materially increase the amounts authorized to be paid
under the Plans must be approved by shareholders of the Class involved. The
total amounts paid under the foregoing arrangements may not exceed the maximum
limits specified above, and the amounts and purposes of expenditures under the
Plans must be reported to the 12b-1 Trustees quarterly. The amounts allowable
under the Plans for each Class of Shares of the Portfolios are also limited
under certain rules of the National Association of Securities Dealers, Inc.
In addition to payments by the Fund under the Plans, the Distributor, United
Asset Management Corporation, the parent company of UAMFSI, and of the Adviser
or any of their affiliates, may, at its own expense, compensate a Service
Agent or other person for marketing, shareholder servicing, record-keeping
and/or other services performed with respect to the Fund, the Portfolio or any
Class of Shares of the Portfolio. The person making such payments may do so
out of its revenues, its profits or any other source available to it. Such
service arrangements, when in effect, are made generally available to all
qualified service providers. The Adviser may compensate its affiliated compa-
nies for referring investors to the Portfolio.
The Distributor, the Adviser and certain of their other affiliates also par-
ticipate, at the date of this Prospectus, in an arrangement with Smith Barney
Inc. under which Smith Barney provides certain defined contribution plan mar-
keting and shareholder services and receives from such entities an amount
equal to up to
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<PAGE>
33.3% of the portion of the investment advisory fees attributable to the in-
vested assets of Smith Barney's eligible customer accounts without regard to
any expense limitation in addition to amounts payable to all selling dealers.
The Fund also compensates Smith Barney for services it provides to certain de-
fined contribution plan shareholders that are not otherwise provided by
UAMFSI.
SHAREHOLDER SERVICES
EXCHANGE PRIVILEGE
Service Class Shares of the Portfolio may be exchanged for Service Class
Shares of any other UAM Funds Portfolio. (See the list of Portfolios of the
UAM Funds at the end of this Prospectus.) Exchange requests should be made by
contacting the UAM Funds Service Center.
Any exchange will be based on the net asset value of the shares involved.
There is no sales commission or charge of any kind for an exchange. Before
making an exchange into a Portfolio, a shareholder should read its Prospectus
and consider the investment objectives of the Portfolio to be purchased. Call
the UAM Funds Service Center for a copy of the Prospectus for the Portfolio(s)
in which you are interested. Exchanges can only be made with Portfolios that
are qualified for sale in a shareholder's state of residence.
Exchange requests may be made either by mail or telephone. Telephone ex-
changes will be accepted only if the certificates for the shares to be ex-
changed have not been issued to the shareholder and if the registration of the
two accounts will be identical. Requests for exchanges received prior to 4
p.m. (ET) will be processed as of the close of business on the same day. Re-
quests received after 4 p.m. will be processed on the next business day. The
Board of Trustees may limit the frequency and amount of exchanges permitted.
For additional information regarding responsibility for the authenticity of
telephoned instructions, see "REDEMPTION OF SHARES BY TELEPHONE". An exchange
into another UAM Funds Portfolio is a sale of shares and may result in a gain
or loss for income tax purposes. The Fund may modify or terminate the exchange
privilege at any time.
VALUATION OF SHARES
The net asset value of the Portfolio is determined by dividing the value of
the Portfolio's assets attributable to the class, less any liabilities attrib-
utable to the class, by the number of shares outstanding attributable to the
class. The net asset value per share of the Portfolio is determined as of the
close of the NYSE on each day that the NYSE is open for business.
Equity securities listed on a securities exchange for which market quota-
tions are readily available are valued at the last quoted sale price of the
day. Price information on listed securities is taken from the exchange where
the security is
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<PAGE>
primarily traded. Unlisted equity securities and listed securities not traded
on the valuation date for which market quotations are readily available are
valued neither exceeding the current asked prices nor less than the current
bid prices. Quotations of foreign securities in a foreign currency are con-
verted to U.S. dollar equivalents. The converted value is based upon the bid
price of the foreign currency against U.S. dollars quoted by any major bank or
by a broker.
Securities purchased with remaining maturities of 60 days or less are valued
at amortized cost when the Board of Trustees determines that amortized cost
reflects fair value.
The value of other assets and securities for which no quotations are readily
available (including restricted securities) is determined in good faith at
fair value using methods determined by the Fund's Board of Trustees.
PERFORMANCE CALCULATIONS
The Portfolio measures performance by calculating total return. Total return
figures are based on historical earnings and are not intended to indicate fu-
ture performance.
Total return is the change in value of an investment in the Portfolio over a
given period, assuming reinvestment of any dividends and capital gains. A cu-
mulative or aggregate total return reflects actual performance over a stated
period of time. An average annual total return is a hypothetical rate of re-
turn that, if achieved annually, would have produced the same cumulative total
return if performance had been constant over the entire period.
Performance will be calculated separately for Institutional Class and Serv-
ice Class Shares. Dividends paid by the Portfolio with respect to Institu-
tional Class and Service Class Shares, to the extent any dividends are paid,
will be calculated in the same manner at the same time on the same day and
will be in the same amount, except that service fees, distribution charges and
any incremental transfer agency costs relating to Service Class Shares will be
borne exclusively by that class.
The Portfolio's performance may be compared to data prepared by independent
services which monitor the performance of investment companies, data reported
in financial and industry publications, and various indices, all as further
described in the Portfolio's SAI. This information may also be included in
sales literature and advertising.
The Portfolio's Annual Report to Shareholders for the most recent fiscal
year end contains additional performance information that includes comparisons
with appropriate indices. The Annual Report is available without charge. Con-
tact the UAM Funds Service Center at the address or telephone number on the
cover of this Prospectus.
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<PAGE>
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
DIVIDENDS AND CAPITAL GAINS
The Portfolio will normally distribute substantially all of its net invest-
ment income (for tax purposes) to shareholders in quarterly dividends. If any
net capital gains are realized, the Portfolio will normally distribute them
annually. All dividends and capital gains distributions will be automatically
reinvested in additional shares of the Portfolio unless the Fund is notified
in writing that the shareholder elects to receive distributions in cash.
FEDERAL TAXES
The Portfolio intends to qualify as a "regulated investment company" under
subchapter M of the Internal Revenue Code of 1986, as amended, for federal in-
come tax purposes and to meet all other requirements that are necessary for it
(but not its shareholders) to be exempt from federal taxes on income and gains
paid to shareholders in the form of dividends. To do this, the Portfolio must,
among other things, distribute substantially all of its ordinary income and
net capital gains on an annual current basis and maintain a portfolio of in-
vestments which satisfies certain diversification criteria.
Dividends paid by the Portfolio from net investment income, whether in cash
or reinvested in shares, are taxable to shareholders as ordinary income.
Short-term capital gains will be taxed as ordinary income. Long-term capital
gains distributions are taxed as long-term capital gains. Shareholders will be
notified annually of dividend income earned for tax purposes.
Dividends declared in October, November and December to shareholders of rec-
ord in such a month will be treated as if they had been paid by the Fund and
received by the shareholders on December 31 of the same calendar year, pro-
vided that the dividends are paid before February of the following year.
The Fund is required by Federal law to withhold 31% of reportable payments
paid to shareholders who have not complied with IRS regulations. In order to
avoid this withholding requirement, you must certify that your Social Security
or Taxpayer Identification Number you have provided is correct and that either
you are not currently subject to backup withholding or you are exempt from
backup withholding. This certification must be made on the Application or on a
separate form supplied by the Fund.
Dividends and interest received by the Portfolio may give rise to withhold-
ing and other taxes imposed by foreign countries. These taxes reduce the Port-
folio's dividends but are included in the taxable income reported on your tax
statement if the Portfolio qualifies for this tax treatment and elects to pass
it through to you. Consult a tax adviser for more information regarding deduc-
tions and credits for foreign taxes.
21
<PAGE>
INVESTMENT ADVISER
The Adviser is a registered investment adviser formed in 1940. Its business
offices are located at 950 Haverford Road in Bryn Mawr, Pennsylvania. The Ad-
viser is a wholly-owned subsidiary of United Asset Management Corporation
("UAM") and provides and offers investment management and advisory services to
corporations, unions, pensions and profit-sharing plans, trusts, estates and
other institutions and investors. The Adviser currently has over $5 billion in
assets under management.
The Portfolio pays an annual fee in monthly installments to the Adviser for
advisory services. This fee is accrued daily and paid monthly as a percentage
of the average net assets in the Portfolio for that month. The percentage fee
on an annual basis is 0.50%.
The Adviser may compensate its affiliated companies for referring investors
to the Portfolio. The Adviser and its parent company may also make payments to
unaffiliated brokers who perform distribution, marketing, shareholder and
other services with respect to the Portfolio.
An Investment Committee at the Adviser is responsible for the day-to-day
management of the Portfolio.
ADMINISTRATIVE SERVICES
UAM Fund Services, Inc. ("UAMFSI"), a wholly-owned subsidiary of United As-
set Management Corporation, is responsible for performing and overseeing ad-
ministrative, fund accounting, dividend disbursing and transfer agent services
provided to the Fund and its Portfolios. UAMFSI's principal office is located
at 211 Congress Street, Boston, MA 02110. UAMFSI has subcontracted some of
these services to Chase Global Funds Services Company ("CGFSC"), an affiliate
of The Chase Manhattan Bank, by a Mutual Funds Service Agreement dated April
15, 1996. CGFSC is located at 73 Tremont Street, Boston, MA 02108.
Each Portfolio pays UAMFSI a two part monthly fee: a Portfolio-specific fee
which is retained by UAMFSI and a sub-administration fee which UAMFSI in turn
pays to CGFSC. The following Portfolio-specific fees are calculated from the
aggregate net assets of each Portfolio:
<TABLE>
<CAPTION>
RATE
----
<S> <C>
Newbold's Equity Portfolio........................................... .04%
</TABLE>
CGFSC's monthly fee for its services is calculated on an annualized basis as
follows:
0.19 of 1% of the first $200 million of combined Fund assets;
0.11 of 1% of the next $800 million of combined Fund assets;
22
<PAGE>
0.07 of 1% of combined Fund assets in excess of $1 billion but less than $3
billion;
0.05 of 1% of combined Fund assets in excess of $3 billion.
Fees are allocated among the Portfolios on the basis of their relative as-
sets and are subject to a graduated minimum fee schedule per Portfolio, which
starts at $2,000 per month and increases to $70,000 annually after two years.
If a separate class of shares is added to a Portfolio, its minimum annual fee
increases by $20,000.
DISTRIBUTOR
UAM Fund Distributors, Inc., a wholly-owned subsidiary of UAM with its prin-
cipal office located at 211 Congress Street, Boston, Massachusetts 02110, dis-
tributes the shares of the Fund. Under the Fund's Distribution Agreement (the
"Distribution Agreement"), the Distributor, as agent of the Fund, agrees to
use its best efforts as sole distributor of the Fund's shares. The Distributor
does not receive any fee or other compensation under the Distribution Agree-
ment (except as described under "Service and Distribution Plans" above). The
Agreement continues in effect as long as it is approved at least annually by
the Fund's Board of Trustees. Those approving the Agreement include a majority
of Trustees who are neither parties to the Agreement nor interested persons of
any such party. This Distribution Agreement provides that the Fund will bear
the costs of the registration of its shares with the SEC and various states
and the printing of its prospectuses, SAIs and reports to shareholders.
PORTFOLIO TRANSACTIONS
The Advisory Agreements for the Fund's Portfolios authorize the Adviser to
select the brokers or dealers that will execute the purchases and sales of in-
vestment securities for each Portfolio. The Agreements direct the Adviser to
use its best efforts to obtain the best available price and most favorable ex-
ecution for all transactions of the Portfolios. If consistent with the inter-
ests of the Portfolios, the Adviser may select brokers on the basis of re-
search, statistical and pricing services these brokers provide to the Portfo-
lios in addition to required Adviser services. Such brokers may be paid a
higher commission than that which another qualified broker would have charged
for effecting the same transaction, provided that such commissions are paid in
compliance with the Securities Exchange Act of 1934, as amended, and that the
Adviser determines in good faith that the commission is reasonable in terms
either of the transaction or the overall responsibility of the Adviser to the
Portfolios and the Adviser's other clients. Although not a typical practice,
the Adviser may place portfolio orders with qualified broker-dealers who refer
clients to the Adviser.
If a purchase or sale of securities is consistent with the investment poli-
cies of a Portfolio and one or more other clients served by the Adviser is
considering a
23
<PAGE>
purchase at or about the same time, transactions in such securities will be
allocated among the Portfolio and clients in a manner deemed fair and reason-
able by the Adviser. Although there is no specified formula for allocating
such transactions, allocations are subject to periodic review by the Fund's
Trustees.
GENERAL INFORMATION
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Fund was organized as a Delaware business trust on May 18, 1994 under
the name "The Regis Fund II." On October 31, 1995, the name of the Fund was
changed to "UAM Funds Trust." The Fund's Agreement and Declaration of Trust
permits the Fund to issue an unlimited number of shares of beneficial inter-
est, without par value. The Trustees have the power to designate one or more
series ("Portfolios") or classes of shares of beneficial interest without fur-
ther action by shareholders.
At its discretion, the Board of Trustees may create additional Portfolios
and classes of shares. The shares of each Portfolio are fully paid and nonas-
sessable, and have no preference as to conversion, exchange, dividends, re-
tirement or other features and no pre-emptive rights. They have noncumulative
voting rights, which means that holders of more than 50% of shares voting for
the election of Trustees can elect 100% of the Trustees. A shareholder is en-
titled to one vote for each full share held (and a fractional vote for each
fractional share held), then standing in his name on the books of the Fund.
Both Institutional Class and Service Class Shares represent an interest in
the same assets of a Portfolio and are identical in all respects except that
the Service Class Shares bear certain expenses related to shareholder servic-
ing, and the distribution of such shares and have exclusive voting rights with
respect to the Rule 12b-1 Distribution Plan pursuant to which the distribution
fee may be paid and with respect to matters relating to such distribution ex-
penditures. Information about the Institutional Class Shares of the Portfolios
is available upon request by contacting the UAM Funds Service Center.
Annual meetings except as required by the 1940 Act and other applicable
laws. The Fund has undertaken that its Trustees will call a meeting of share-
holders if such a meeting is requested in writing by the holders of not less
than 10% of the outstanding shares of the Fund. The Fund will assist share-
holder communications in such matters.
CUSTODIAN
The Chase Manhattan Bank serves as custodian of the Fund's assets.
ACCOUNTANTS
Price Waterhouse LLP acts as the independent accountants for the Fund and
audits its financial statements annually.
24
<PAGE>
REPORTS
Investors will receive unaudited semi-annual financial statements and annual
financial statements audited by Price Waterhouse LLP.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be made by contacting the UAM Funds Service Center
at the address or telephone number listed on the cover of this Prospectus.
LITIGATION
The Fund is not involved in any litigation.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS NOT CONTAINED IN THIS PROSPECTUS, OR IN THE PORTFOLIO'S STATEMENT
OF ADDITIONAL INFORMATION, IN CONNECTION WITH THE OFFERING MADE BY THIS PRO-
SPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR ITS REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFERING BY THE FUND IN ANY JURISDICTION IN WHICH SUCH OF-
FERING MAY NOT BE LAWFULLY MADE.
UAM FUNDS--SERVICE CLASS SHARES
BHM&S Total Return Bond Portfolio
FPA Crescent Fund
MJI International Equity Portfolio
Newbold's Equity Portfolio
NWQ Balanced Portfolio
NWQ Value Equity Portfolio
Sirach Growth Portfolio
Sirach Equity Portfolio
Sirach Strategic Balanced Portfolio
Sirach Special Equity Portfolio
Sterling Partner's Balanced Portfolio
Sterling Partner's Equity Portfolio
Sterling Partner's Short-Term Fixed Income
TJ Core Equity Portfolio
25
<PAGE>
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
1-800-638-7983
Investment Adviser
Newbold's Asset Management, Inc.
950 Haverford Road
Bryn Mawr, Pennsylvania
Distributor
211 Congress Street
Boston, MA 02110
UAM FUND DISTRIBUTORS, INC.
PROSPECTUS
January 3, 1997
<PAGE>
[LOGO OF UAM FUNDS APPEARS HERE]
TJ Core Equity
Portfolio
Institutional Service
Class Shares
January 3, 1997
P R O S P E C T U S
<PAGE>
UAM FUNDS
UAM FUNDS SERVICE CENTER
C/O CHASE GLOBAL FUNDS SERVICES COMPANY
P.O. BOX 2798
BOSTON, MA 02208-2798
1-800-638-7983
- -------------------------------------------------------------------------------
TJ CORE EQUITY PORTFOLIO
INSTITUTIONAL SERVICE CLASS SHARES
INVESTMENT ADVISER: TOM JOHNSON INVESTMENT MANAGEMENT, INC.
- -------------------------------------------------------------------------------
PROSPECTUS--JANUARY 3, 1997
UAM Funds Trust (the "Fund") is an open-end investment company known as a
"mutual fund." The Fund consists of multiple series (known as "Portfolios")
each of which has different investment objectives and policies. TJ Core Equity
Portfolio currently offers only one class of shares. The securities offered in
this Prospectus are Institutional Service Class Shares ("Service Class
Shares") of one diversified Portfolio of the Fund managed by Tom Johnson In-
vestment Management, Inc.
TJ CORE EQUITY PORTFOLIO. TJ Core Equity Portfolio (the "Portfolio") seeks
maximum total return consistent with reasonable risk to principal by investing
in the common stock of quality companies with lower valuations in sectors of
the economy exhibiting strong, or improving relative performance.
There can be no assurance that the Portfolio will achieve its stated objec-
tive.
Keep this Prospectus for future reference. It contains information that you
should know before you invest. A "Statement of Additional Information" (SAI)
containing additional information about the Fund has been filed with the Secu-
rities and Exchange Commission. The SAI is dated January 3, 1997 and has been
incorporated by reference into this Prospectus. For a free copy of the SAI
contact the UAM Funds Service Center at the address or telephone number above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Fund Expenses.............................................................. 1
Prospectus Summary......................................................... 3
Risk Factors............................................................... 4
Financial Highlights....................................................... 4
Investment Objective....................................................... 6
Investment Policies........................................................ 6
Other Investment Policies.................................................. 7
Investment Limitations..................................................... 12
Purchase of Shares......................................................... 12
Redemption of Shares....................................................... 16
Service and Distribution Plans............................................. 17
Shareholder Services....................................................... 20
Valuation of Shares........................................................ 20
Performance Calculations................................................... 21
Dividends, Capital Gains Distributions and Taxes........................... 21
Investment Adviser......................................................... 22
Administrative Services.................................................... 23
Distributor................................................................ 24
Portfolio Transactions..................................................... 24
General Information........................................................ 25
UAM Funds -- Service Class Shares.......................................... 27
</TABLE>
<PAGE>
FUND EXPENSES
The following table illustrates expenses and fees that a shareholder of the
Portfolios Service Class Shares would incur. Transaction fees may be charged
if a broker-dealer or other financial intermediary deals with the Fund on your
behalf. (See "PURCHASE OF SHARES.")
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Sales Load Imposed on Purchases......................................... NONE
Sales Load Imposed on Reinvested Dividends.............................. NONE
Deferred Sales Load..................................................... NONE
Redemption Fees......................................................... NONE
Exchange Fees........................................................... NONE
</TABLE>
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF NET ASSETS)
<TABLE>
<S> <C>
Investment Advisory Fees......................................... 0.75 %
Administrative Fees.............................................. 3.69 %
12b-1 Fees (Including Shareholder Servicing Fees)+............... 0.25 %
Other Expenses................................................... 2.27 %
Advisory Fees Waived and Expenses Assumed........................ (5.71)%
-----
Total Operating Expenses (After Fee Waivers and Expenses
Assumed)....................................................... 1.25 %+*
=====
</TABLE>
- -----------
+ See "SERVICE AND DISTRIBUTION PLANS."
* The Adviser has voluntarily agreed to waive all or a portion of its advisory
fees and to assume operating expenses to keep the Portfolio's Service Class
Shares' total annual operating expenses (excluding interest, taxes and ex-
traordinary expenses) from exceeding 1.25% of average daily net assets
through January 1, 1998. The figures above include the effect of expense
offsets. If expense offsets were excluded, annualized Total Operating Ex-
penses for the six month period ended October 31, 1996 would be 1.29%. (See
"FINANCIAL HIGHLIGHTS.") It is estimated that if the Adviser did not waive
fees and assume expenses, the total annual operating expenses of the Portfo-
lio's Service Class Shares would be 6.96% of average daily net assets. The
Adviser will not be reimbursed by the Fund for any advisory fees which are
waived or expenses which the Adviser may bear on behalf of the Portfolio for
a given fiscal year.
The table above shows various fees and expenses an investor would bear di-
rectly or indirectly. The expenses and fees set forth above are estimates for
the fiscal year and are annualized based on the Portfolio's Service Class
Shares' operations during the semi-annual period ended October 31, 1996, ex-
cept that these have been restated to reflect the current Administrative Fees
(See "ADMINISTRATIVE SERVICES" herein and in the SAI) and the current expense
cap.
1
<PAGE>
The following example illustrates expenses a shareholder would pay on a
$1,000 investment over various time periods assuming (1) a 5% annual rate of
return and (2) redemption at the end of each time period. The Portfolios
charge no redemption fees of any kind.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Expenses..................................... $13 $40 $69 $152
</TABLE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EX-
PENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE
SHOWN.
2
<PAGE>
PROSPECTUS SUMMARY
INVESTMENT ADVISER
Tom Johnson Investment Management, Inc. (the "Adviser") is a registered in-
vestment adviser. Founded in 1983, the Adviser currently has approximately
$1.9 billion in assets under management. The Adviser is a wholly-owned subsid-
iary of United Asset Management Corporation. (See "INVESTMENT ADVISER.")
PURCHASE OF SHARES
Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the
"Distributor"), to investors at net asset value without a sales commission.
Share purchases may be made by sending investments directly to the Fund. The
minimum initial investment is $2,500. The minimum for subsequent investments
is $100. The minimum initial investment for IRA accounts is $500. The minimum
initial investment for spousal IRA accounts is $250. Certain exceptions to the
initial or minimum investment amounts may be made by the officers of the Fund.
(See "PURCHASE OF SHARES.")
DIVIDENDS AND DISTRIBUTIONS
The Portfolio will normally distribute substantially all of its net invest-
ment income in quarterly dividends. The Portfolio will distribute any realized
net capital gains annually. Distributions will be reinvested in Portfolio
shares automatically unless an investor elects to receive cash distributions.
(See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES.")
REDEMPTIONS AND EXCHANGES
Shares of the Portfolio may be redeemed at any time, without cost, at the
net asset value of the Portfolio next determined after receipt of the redemp-
tion request. The redemption price may be more or less than the purchase
price. (See "REDEMPTION OF SHARES.")
ADMINISTRATIVE SERVICES
UAM Funds Services Inc. ("UAMFSI"), a wholly-owned subsidiary of United As-
set Management Corporation, is responsible for performing and overseeing ad-
ministration, fund accounting, dividend disbursing and transfer agency serv-
ices provided to the Fund and its Portfolios by third-party service providers.
(See "ADMINISTRATIVE SERVICES.")
3
<PAGE>
RISK FACTORS
The value of the Portfolio's shares will fluctuate in response to changes in
market and economic conditions as well as the financial conditions and pros-
pects of the issuers in which a Portfolio invests. Investors should consider
the following factors: (1) The Portfolio may invest in repurchase agreements
which entail a risk of loss should the seller default on its transaction; (2)
The Portfolio may invest a portion of its assets in derivatives including
futures contracts and options; (3) The Portfolio may invest in the securities
of foreign issuers which may be subject to additional risk factors, including
foreign currency risks, not applicable to securities of U.S. issuers; (4) The
fixed income securities held by the Portfolio will be affected by general
changes in interest rates resulting in increases or decreases in the value of
the securities. The value of fixed income securities can be expected to vary
inversely to the changes in prevailing interest rates, i.e., as interest rates
decline, the market value of fixed income securities tends to increase and
vice versa; (5) The Portfolio may invest in investment grade debt securities,
but reserves the right to hold securities that have been downgraded. Adverse
economic and corporate changes and changes in interest rates may have a
greater impact on issuers of lower rated debt securities which the Portfolio
may hold, which may lead to greater price volatility. Also, lower rated secu-
rities may be more difficult to value accurately or sell in the secondary mar-
ket; (6) The Portfolio may lend its investment securities which entails a risk
of loss should a borrower fail financially; (7) The Portfolio may purchase se-
curities on a when-issued basis which do not earn interest until issued and
may decline or appreciate in market value prior to their delivery to the Port-
folio; (8) The Portfolio's performance may depend on the ability of the Ad-
viser who has substantial experience as an investment adviser but limited ex-
perience as an adviser to a mutual fund. (See "INVESTMENT POLICIES.")
FINANCIAL HIGHLIGHTS
The following table provides selected per share information for a share out-
standing throughout the periods presented of the Portfolio. This table is part
of the Portfolios Financial Statements included in the Portfolios 1996 Annual
Report to the Shareholders.
4
<PAGE>
FINANCIAL HIGHLIGHTS
The following table provides selected per share information for a share out-
standing throughout the periods presented of the Portfolio. This table is part
of the Portfolio's Financial Statements included in the Portfolio's 1996 An-
nual Report to Shareholders and the 1996 Semi-Annual Report. The Reports are
incorporated into the Portfolio's SAI. The Portfolio's Annual Financial State-
ments have been audited for the period ended April 30, 1996 by Price
Waterhouse LLP whose unqualified opinion thereon is also incorporated into the
Portfolio's SAI. Please read the following information in conjunction with the
Portfolio's 1996 Annual Report to Shareholders and the 1996 Semi-Annual Report
to Shareholders.
<TABLE>
<CAPTION>
SEPTEMBER 28, 1995* SIX MONTHS ENDED
TO OCTOBER 31, 1996
APRIL 30, 1996 (UNAUDITED)
------------------- ----------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD...... $ 10.00 $ 11.05
------- -------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income................... 0.06 0.06
Net Realized and Unrealized Gain on
Investments........................... 1.05 0.51
------- -------
Total From Investment Operations...... 1.11 0.57
------- -------
DISTRIBUTIONS
Net Investment Income................... (0.06) (0.05)
------- -------
NET ASSET VALUE, END OF PERIOD............ $ 11.05 $ 11.57
======= =======
TOTAL RETURN+............................. 11.13 % 5.18%
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands)... $ 1,023 $ 2,061
Ratio of Expenses to Average Net
Assets................................ 1.38 %** 1.29%**
Ratio of Net Investment Income to
Average Net Assets.................... 1.06 %** 1.18%**
Portfolio Turnover Rate................. 17 % 12%
Average Commission Rate................. $0.0600 $0.0600
Voluntary Waived Fees and Expenses
Assumed by the Adviser Per Share...... $ 0.74 $ 0.28
Ratio of Expenses to Average Net Assets
Including Expense Offsets............. 1.25%** 1.25%**
</TABLE>
- -----------
* Commencement of Operations.
** Annualized.
+ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser during the period.
5
<PAGE>
INVESTMENT OBJECTIVE
The Portfolio seeks maximum total return consistent with reasonable risk to
principal by investing in the common stock of quality companies with lower
valuations in sectors of the economy exhibiting strong, or improving relative
performance. The Portfolio may also invest in other equity-related securities
such as preferred stocks, convertible preferred stocks, convertible bonds, op-
tions, futures, rights and warrants. There can be no assurance that the Port-
folio will achieve its stated objective.
INVESTMENT POLICIES
In seeking its investment objective, the Portfolio will invest at least 65%
of its total assets, under normal circumstances, in equity securities, con-
sisting primarily of common stock of companies with market capitalizations
greater than $200 million at the time of purchase. Furthermore, the Portfolio
will invest so that 80% of the Portfolio's common stock holdings will be of
issuers with market capitalizations greater than $800 million. The Portfolio
may also invest in other equity-related securities such as preferred stock,
convertible preferred stock, convertible bonds, options on stock indices,
rights and warrants. The Portfolio may also invest up to 35% of its assets in
investment grade debt securities which are generally considered to be those
securities having one of the four highest grades assigned by Moody's Investors
Service, Inc. (Aaa, Aa, A or Baa) or Standard & Poor's Corporation (AAA, AA, A
or BBB) or, if unrated, of equivalent quality in the Adviser's judgment. Secu-
rities rated Baa or BBB may possess speculative characteristics and may be
more sensitive to changes in the economy and the financial condition of is-
suers than higher rated securities. The Adviser also reserves the right to re-
tain securities which are downgraded by one or both of the rating agencies, if
in the Adviser's judgment, the retention of securities is warranted. Up to 20%
of the Portfolio's assets may be invested in the securities of foreign securi-
ties.
The Adviser believes that maximum total return can be achieved by investing
in the common stock of quality companies with lower valuations in sectors of
the economy exhibiting strong, or improving relative performance. Beginning
with a thorough analysis of current and anticipated economic fundamentals, ex-
amining key economic variables such as the level and direction of interest
rates, forecasted growth in the GDP, anticipated gains in corporate profits,
inflationary pressures, and money supply growth, as well as other variables,
the Adviser is able to determine the basis for asset allocation between stocks
and cash and cash equivalents.
The analysis of key economic variables also helps identify industry groups
or specific industries which should benefit as a result of anticipated eco-
nomic fundamentals. These industry groups are then analyzed in detail begin-
ning with industry screens, going onto individual company analysis, and fi-
nally specific purchase recommendations. Of particular interest to the Adviser
is the valuation being placed
6
<PAGE>
upon the company as well as the forecasted growth in earnings and dividends
over the next 1 to 5 years.
It is anticipated that cash reserves will represent a relatively small per-
centage of the Portfolio's assets. Under normal circumstances, it will be less
than 20%. However, when the Adviser believes that market conditions warrant a
defensive position, up to 100% of the Portfolio's assets may be held in cash
and short-term investments. See "SHORT-TERM INVESTMENTS and REPURCHASE AGREE-
MENTS" below for a description of the types of short-term instruments in which
the Portfolio may invest for temporary defensive purposes. When the Portfolio
is in a defensive position, it may not necessarily be pursuing its stated in-
vestment objective.
OTHER INVESTMENT POLICIES
The Portfolio may also, under normal circumstances, invest up to 35% of its
assets, unless restricted by additional limitations described below or in the
Portfolio's SAI, in the following securities, investments or investment tech-
niques:
SHORT-TERM INVESTMENTS
In order to earn a return on uninvested assets, meet anticipated redemp-
tions, or for temporary defensive purposes, the Portfolio may invest a portion
of its assets in domestic and foreign money market instruments including cer-
tificates of deposit, bankers' acceptances, time deposits, U.S. Government ob-
ligations, U.S. Government agency securities, short-term corporate debt secu-
rities, and commercial paper rated A-1 or A-2 by Standard & Poor's Corporation
or Prime-1 or Prime-2 by Moody's Investors Service, Inc. or, if unrated, de-
termined by the Adviser to be of comparable quality.
Time deposits maturing in more than seven days will not be purchased by the
Portfolio, and time deposits maturing from two business days through seven
calendar days will not exceed 10% of the total assets of the Portfolio. The
Portfolio will not invest in any security issued by a commercial bank unless
(i) the bank has total assets of at least $1 billion, or the equivalent in
other currencies, (ii) in the case of U.S. banks, it is a member of the Fed-
eral Deposit Insurance Corporation, and (iii) in the case of foreign branches
of U.S. banks, the security is, in the opinion of the Adviser, of an invest-
ment quality comparable with other debt securities which may be purchased by
the Portfolio.
The Fund has received permission from the Securities and Exchange Commission
(the "SEC") to deposit the daily uninvested cash balances of the Fund's Port-
folios, as well as cash for investment purposes, into one or more joint ac-
counts and to invest the daily balance of the joint accounts in the following
short-term investments: fully collateralized repurchase agreements, interest-
bearing or discounted commercial paper including dollar-denominated commercial
paper of foreign issuers, and any other short-term money market instruments
including variable
7
<PAGE>
rate demand notes and tax-exempt money instruments. By entering into these in-
vestments on a joint basis, it is expected that a Portfolio may earn a higher
rate of return on investments relative to what it could earn individually.
The Fund has received permission from the SEC, for each of its Portfolios to
invest, for cash management purposes, the greater of 5% of its total assets or
$2.5 million in the Fund's DSI Money Market Portfolio. (See "INVESTMENT
COMPANIES.")
REPURCHASE AGREEMENTS
The Portfolio may invest in repurchase agreements collateralized by U.S. Gov-
ernment securities, certificates of deposit, and certain bankers' acceptances
and other securities outlined above under "SHORT-TERM INVESTMENTS." In a repur-
chase agreement, the Portfolio buys a security and simultaneously commits to
sell that security back at an agreed upon price plus an agreed upon market rate
of interest. Under a repurchase agreement, the seller is also required to main-
tain the value of securities subject to the agreement at not less than 100% of
the repurchase price. The Administrator and the Adviser will mark to market
daily the value of the securities purchased. The use of repurchase agreements
involves certain risks. For example, a default by the seller of the agreement
may cause the Portfolio to experience a loss or delay in the liquidation of the
collateral securing the repurchase agreement. The Portfolio might also incur
disposition costs in liquidating the collateral. While the Fund's management
acknowledges these risks, it is expected that they can be controlled through
stringent security selection criteria and careful monitoring procedures. The
Fund has received permission from the SEC to pool daily uninvested cash bal-
ances of the Fund's Portfolios in order to invest in repurchase agreements on a
joint basis. By entering into joint repurchase agreements, a Portfolio may in-
cur lower transactions costs and earn higher rates of interest on joint repur-
chase agreements. Each Portfolio's contribution would determine its return from
a joint repurchase agreement. (See "SHORT-TERM INVESTMENTS.")
LENDING OF SECURITIES
The Portfolio may lend its investment securities to qualified institutional
investors as a means of earning income. The Portfolio will not loan securities
to the extent that greater than one-third of its assets at fair market value
would be committed to loans. During the term of a loan, the Portfolio is sub-
ject to a gain or loss depending on any increase or decrease in the market
price of the securities loaned. Lending of securities is subject to review by
the Fund's Board of Trustees. All relevant facts and circumstances, including
the creditworthiness of the broker, dealer or institution, will be considered
in making decisions about securities lending.
An investment company may pay reasonable negotiated fees in connection with
loaned securities so long as such fees are set forth in a written contract and
approved by its Board of Trustees. The Portfolio will continue to retain any
voting
8
<PAGE>
rights with respect to loaned securities. If a material event occurs affecting
an investment on a loan, the loan must be called and the securities voted.
WHEN-ISSUED, FORWARD DELIVERY AND DELAYED SETTLEMENT SECURITIES
The Portfolio may purchase and sell securities on a "when-issued," "delayed
settlement," or "forward delivery" basis. "When-issued" or "forward delivery"
refers to securities whose terms and indenture are available, and for which a
market exists, but which are not available for immediate delivery. When-issued
and forward delivery transactions may be expected to occur a month or more be-
fore delivery is due. Delayed settlement is a term used to describe settlement
of a securities transaction in the secondary market which will occur sometime
in the future. No payment or delivery is made by the Portfolio until it re-
ceives payment or delivery from the other party to any of the above transac-
tions. It is possible that the market price of the securities at the time of
delivery may be higher or lower than the purchase price. The Portfolio will
maintain a separate account of cash or liquid securities at least equal to the
value of purchase commitments until payment is made. Typically, no income ac-
crues on securities purchased on a delayed delivery basis prior to the time de-
livery is made although the Portfolio may earn income on securities it has de-
posited in a segregated account.
The Portfolio may engage in these types of purchases in order to buy securi-
ties that fit with its investment objectives at attractive prices -- not to in-
crease its investment leverage.
PORTFOLIO TURNOVER
Portfolio turnover is not anticipated to exceed 60%. In addition to Portfolio
trading costs, higher rates of portfolio turnover may result in the realization
of capital gains. (See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES" for
more information on taxation). The Portfolio will not normally engage in short-
term trading, but each reserves the right to do so. The table set forth in "Fi-
nancial Highlights" presents the Portfolio's historical portfolio turnover
ratios.
INVESTMENT COMPANIES
The Portfolio reserves the right to invest up to 10% of its total assets,
calculated at the time of investment, in the securities of other open-end or
closed-end investment companies. No more than 5% of the investing Portfolio's
total assets may be invested in the securities of any one investment company,
nor may it acquire more than 3% of the voting securities of any other invest-
ment company. The Portfolio will indirectly bear its proportionate share of any
management fees paid by an investment company in which it invests in addition
to the advisory fee paid by the Portfolio.
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<PAGE>
The Fund has received permission from the SEC to allow each of its Portfolios
to invest, for cash management purposes, the greater of 5% of its total assets
or $2.5 million in the Fund's DSI Money Market Portfolio provided that the in-
vestment is consistent with the Portfolio's investment policies and restric-
tions. Based upon the Portfolio's assets invested in the DSI Money Market Port-
folio, the investing Portfolio's adviser will waive its investment advisory fee
and any other fees earned as a result of the Portfolio's investment in the DSI
Money Market Portfolio. The investing Portfolio will bear expenses of the DSI
Money Market Portfolio on the same basis as all of its other shareholders.
FUTURES AND OPTIONS TRANSACTIONS
In order to remain fully invested, and to reduce transaction costs, the Port-
folio may utilize appropriate futures contracts and options to a limited ex-
tent. These instruments are commonly referred to as "derivatives." Because
transaction costs associated with futures and options may be lower than the
costs of investing in securities directly, it is expected that the use of index
futures and options to facilitate cash flows may reduce the Portfolio's overall
transaction costs. The Portfolio will enter into futures contracts and options
for bona fide hedging purposes only and for other purposes so long as aggregate
initial margins and premiums required in connection with non-hedging positions
do not exceed 5% of the Portfolio's total assets.
Futures and options can be volatile and involve various degrees and types of
risk. If the Portfolio judges market conditions incorrectly or employs a strat-
egy that does not correlate well with its investments, use of futures and op-
tions contracts could result in a loss. The Portfolio could also suffer losses
if it is unable to liquidate its position due to an illiquid secondary market.
In the opinion of the Trustees, the risk that the Portfolio will be unable to
close out a futures position or options contract will be minimized by only en-
tering into futures contracts or options transactions traded on national ex-
changes and for which there appears to be a liquid secondary market. For addi-
tional information regarding futures contracts and options, please see the SAI.
FOREIGN INVESTMENTS
The Portfolio may invest up to 20% of its assets in foreign securities which
involve additional risks not typically associated with investing in domestic
securities. Since the securities issued by foreign entities may be denominated
in foreign currencies, and the Portfolio may temporarily hold uninvested re-
serves in bank deposits in foreign currencies, the Portfolio's value may rise
or fall depending on currency exchange rates. The Portfolio may also have to
pay a fee to convert funds from one currency to another.
Non-U.S.-based companies are not subject to the same accounting, auditing and
financial reporting standards as are domestic companies and may have policies
that are not comparable to those of domestic companies. There may be less pub-
licly-
10
<PAGE>
available information about non-U.S.-based companies which may make it
difficult to make investment decisions. Securities of some foreign companies
are generally less liquid and more volatile than securities of comparable do-
mestic companies. There is generally less government supervision and regulation
of stock exchanges, brokers and listed companies than in the U.S. Political
factors may have an impact in the form of confiscatory taxation, expropriation
or political instability in international markets.
Although the Portfolio will seek the most favorable trading costs available
in any given market, investors should recognize that foreign commissions are
generally higher than those in the U.S. In addition, custodial expenses, that
is, fees paid to financial institutions for holding the Portfolio's securities,
will generally be higher than would be the case in the U.S.
Some foreign governments also levy withholding taxes against dividend and in-
terest income. Although in some countries a portion of the taxes is recover-
able, the non-recovered portion of foreign withholding taxes will reduce the
income the Portfolio receives from the companies comprising its investments.
For additional information regarding foreign securities, please see the SAI.
RESTRICTED AND ILLIQUID SECURITIES
The Portfolio may purchase restricted securities that are not registered for
sale to the general public but which are eligible for resale to qualified in-
stitutional investors under Rule 144A of the Securities Act of 1933. Under the
supervision of the Fund's Board of Trustees, the Adviser determines the liquid-
ity of such investments. Provided that a dealer or institutional trading market
in such securities exists, these restricted securities are not treated as il-
liquid securities for purposes of the Portfolio's investment limitations. The
Portfolio may invest up to 15% of its net assets in illiquid securities. The
prices realized from the sales of these securities could be less than those
originally paid by the Portfolio or less than what may be considered the fair
value of such securities.
AMERICAN DEPOSITARY RECEIPTS
The Portfolio intends to invest primarily in U.S.-based companies. In addi-
tion, the Portfolio may purchase shares of foreign-based companies in the form
of American Depositary Receipts (ADRs). Investments in ADRs, which are domestic
securities representing ownership rights in foreign companies, will not exceed
25% of the Portfolio's assets. ADRs may be sponsored or unsponsored. Sponsored
ADRs are established jointly by a depositary and the underlying issuer, whereas
unsponsored ADRs may be established without participation by the underlying is-
suer. Holders of an unsponsored ADR generally bear all the costs associated
with establishing the unsponsored ADR. The depositary of an unsponsored ADR is
under no obligation to distribute shareholder communications received from the
underlying issuer or to pass through voting rights to the holders of the
unsponsored ADR with respect to the deposited securities or pool of securities.
11
<PAGE>
INVESTMENT LIMITATIONS
The Portfolio will not:
(a) with respect to 75% of its assets, invest more than 5% of its total
assets at the time of purchase in the securities of any single issuer
(other than investments issued or guaranteed by the U.S. Government or
any of its agencies or instrumentalities);
(b) with respect to 75% of its assets, purchase more than 10% of any class
of the outstanding voting securities of any one issuer;
(c) invest more than 5% of its assets at the time of purchase in the secu-
rities of companies that have (with predecessors) a continuous operat-
ing history of less than 3 years;
(d) invest more than 25% of its assets in companies within a single indus-
try; however, there are no limitations on investments made in instru-
ments issued or guaranteed by the U.S. Government and its agencies.
(e) make loans except by purchasing debt securities in accordance with its
investment objective and policies or entering into repurchase agree-
ments or by lending its portfolio securities to banks, brokers, deal-
ers and other financial institutions so long as the loans are made in
compliance with the 1940 Act, as amended, or the Rules and Regulations
or interpretations of the SEC;
(f) (i) borrow, except from banks and as a temporary measure for extraor-
dinary or emergency purposes and then, in no event, in excess of 33
1/3% of the Portfolio's gross assets valued at the lower of market or
cost, and (ii) the Portfolio may not purchase additional securities
when borrowings exceed 5% of total assets; or
(g) pledge, mortgage or hypothecate any of its assets to an extent greater
than 33 1/3% of its total assets at fair market value.
The Portfolio's investment objective and investment limitations (a), (b),
(d), (e) and (f)(i) listed above are fundamental policies and may be changed
only with the approval of the holders of a majority of the outstanding voting
securities of the Portfolio. The other investment limitations described here,
those not specified as fundamental in the SAI, and the Portfolio's investment
policies are not fundamental, and the Fund's Board of Trustees may change them
without shareholder approval.
PURCHASE OF SHARES
Shares of each Portfolio and Class are offered through UAM Fund Distributors,
Inc. (the "Distributor") without a sales commission, at the net asset value per
share next determined after an order is received by the Fund and payment is
12
<PAGE>
received by the custodian. The required minimum initial investment for the
Portfolio is $2,500. The initial investment minimum for IRA accounts is $500.
The minimum for spousal IRA accounts is $250. Certain exceptions may be deter-
mined by the officers of the Fund.
The Portfolio issues Institutional Service Class which bear shareholder ser-
vicing expenses and distribution plan expenses, and have exclusive voting
rights with respect to the Rule 12b-1 Distribution Plan pursuant to which the
distribution fee may be paid. The net income attributable to Service Class
Shares and the dividends payable on Service Class Shares will be reduced by the
amount of the shareholder servicing and distribution fees; accordingly, the net
asset value of the Service Class Shares will be reduced by such amount to the
extent the Portfolio has undistributed net income.
Some Service Agents may also impose additional or different conditions or
other account fees on the purchase and redemption of Portfolio shares, which
are not subject to the Rule 12b-1 Service and Distribution Plans. Amounts paid
to Service Agents may include transaction fees and/or service fees paid by the
Fund from the Fund assets attributable to the Service Agent and, would not be
imposed if shares of the Portfolio were purchased directly from the Fund or the
Distributor. The Service Agents may provide shareholder services to their cus-
tomers that are not available to a shareholder dealing directly with the Fund.
Each Service Agent is responsible for transmitting to its customers a schedule
of any such fees and information regarding any different purchase and redemp-
tion conditions. Shareholders who are customers of Service Agents should con-
sult their Service Agent for information regarding these fees and conditions. A
salesperson and any other person entitled to receive compensation for selling
or servicing Portfolio shares may receive different compensation with respect
to one particular class of shares over another in the Fund.
Service Agents may enter confirmed purchase orders on behalf of their custom-
ers. If shares of a Portfolio are purchased in this manner, the Service Agent
must receive your investment order before the close of trading on the New York
Stock Exchange ("NYSE"), and transmit it to the Fund's Sub-Transfer Agent prior
to 4 p.m. to receive that day's share price. Proper payment for the order must
be received by the Sub-Transfer Agent no later than the time when the Portfolio
is priced on the following business day. Service Agents are responsible to
their customers and the Fund for timely transmission of all subscription and
redemption requests, investment information, documentation and money.
13
<PAGE>
INITIAL INVESTMENT
BY MAIL
. Complete and sign an Application and mail it together with a check pay-
able to UAM Funds to:
UAM Funds Trust
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
Payment for purchases of shares received by mail will be credited to an ac-
count at the next share price calculated for the Portfolio after receipt. Pay-
ment does not need to be converted into Federal Funds (monies credited to the
Fund's Custodian Bank by a Federal Reserve Bank) before the Fund will accept it
for investment.
BY WIRE
. Telephone the UAM Funds Service Center and provide the account name, ad-
dress, telephone number, social security or taxpayer identification num-
ber, Portfolio selected, amount being wired and the name of the bank
wiring the funds. An account number will then be provided to you. Next.
. Instruct the bank to wire a specified amount to the Fund's custodian:
The Chase Manhattan Bank
ABA #021000021
UAM Funds
Credit DDA #9102772952
Ref: Portfolio Name__________________
Your Account Number__________________
Your Account Name___________________
Wire Control Number__________________
. Forward a completed Application to the Fund at the address shown on the
form. Federal Funds purchases will be accepted only on a day on which
both the NYSE and the Custodian Bank are open for business.
ADDITIONAL INVESTMENTS
Additional investments can be made at any time. The minimum additional in-
vestment is $100. Shares can be purchased at net asset value by mailing a check
to the UAM Funds Service Center (payable to "UAM Funds") or by wiring money to
the Custodian Bank using the instructions outlined above. When making addi-
tional investments, be sure that the account name and number is identified on
the check or wire and the Portfolio to be purchased is specified.
Prior to wiring additional investments, notify the Fund by calling the number
on the cover of this prospectus. Mail orders should include, when possible, the
"Invest by Mail" stub which accompanies any Fund confirmation statement.
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<PAGE>
OTHER PURCHASE INFORMATION
Investments received by 4 p.m. ET (the close of the NYSE) will be invested at
the share price calculated after the NYSE closes on that day. Investments re-
ceived after the close of the NYSE will be executed at the price computed on
the next day the NYSE is open. The Fund reserves the right, in its sole discre-
tion, to suspend the offering of shares or reject purchase orders of the Port-
folio when, in the judgement of management, such suspension or rejection is in
the best interests of the Fund.
Purchases of shares will be made in full and fractional shares calculated to
three decimal places. Certificates for whole shares will not be issued except
at the written request of the shareholder. Certificates for fractional shares
will not be issued.
IN-KIND PURCHASES
If accepted by the Fund, shares of the Portfolio may be purchased in exchange
for securities which are eligible for acquisition by the Portfolio, as de-
scribed in this Prospectus. Securities to be exchanged which are accepted by
the Fund will be valued as described under "VALUATION OF SHARES" at the next
determination of net asset value after acceptance. Shares issued by a Portfolio
in exchange for securities will be issued at net asset value determined as of
the same time. All dividends, interest, subscription, or other rights pertain-
ing to such securities shall become the property of the Portfolio and must be
delivered to the Fund by the investor upon receipt from the issuer. Securities
acquired through an in-kind purchase will be acquired for investment and not
for immediate resale.
The Fund will not accept securities in exchange for shares of the Portfolio
unless:
. at the time of exchange, such securities are eligible to be in-
cluded in the Portfolio (current market quotations must be readily
available for such securities);
. the investor represents and agrees that all securities offered to
be exchanged are liquid securities and not subject to any restric-
tions upon their sale by the Portfolio under the Securities Act of
1933, or otherwise; and
. the value of any such securities (except U.S. Government securi-
ties) being exchanged together with other securities of the same
issuer owned by the Portfolio will not exceed 5% of the net assets
of the Portfolio immediately after the transaction.
Investors who are subject to Federal taxation upon exchange may realize a
gain or loss for Federal income tax purposes depending upon the cost of securi-
ties or local currency exchanged. Investors interested in such exchanges should
contact the Adviser.
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<PAGE>
REDEMPTION OF SHARES
Shares of each Portfolio may be redeemed by mail or telephone at any time,
without cost, at the net asset value of the Portfolio next determined after re-
ceipt of the redemption request. No charge is made for redemptions. Any redemp-
tion may be more or less than the purchase price of the shares depending on the
market value of investment securities held by the Portfolio.
BY MAIL
Address requests for redemption to the UAM Funds Service Center. Requests to
redeem shares must include:
. share certificates, if issued;
. a letter of instruction or an assignment specifying the number of
shares or dollar amount to be redeemed, signed by all registered
owners of the shares in the exact names in which they are regis-
tered;
. any required signature guarantees (see "SIGNATURE GUARANTEES"); and
. any other necessary legal documents, if required, in the case of
estates, trusts, guardianships, custodianships, corporations, pen-
sion and profit sharing plans and other organizations.
BY TELEPHONE
A redemption request by telephone requires the following:
. establish the telephone redemption privilege (and if desired, the
wire redemption privilege) by completing appropriate sections of
the Application; and
. call the Fund and instruct that the redemption proceeds be mailed
to you or wired to your bank.
The following tasks cannot be accomplished by telephone:
. changing the name of the commercial bank or the account designated
to receive redemption proceeds (this can be accomplished only by a
written request signed by each shareholder, with each signature
guaranteed);
. redemption of certificated shares by telephone.
The Fund and its Sub-Transfer Agent will employ reasonable procedures to con-
firm that instructions communicated by telephone are genuine, and they may be
liable for any losses if they fail to do so. These procedures include requiring
the investor to provide certain personal identification at the time an account
is opened, as well as prior to effecting each transaction requested by tele-
phone. In addition, all telephone transaction requests will be recorded and in-
vestors may be required to provide additional telecopied written instructions
of such transaction requests.
16
<PAGE>
The Fund or Sub-Transfer Agent may be liable for any losses due to unauthorized
or fraudulent telephone instructions if the Fund or the Sub-Transfer Agent does
not employ the procedures described above. Neither the Fund nor the Sub-Trans-
fer Agent will be responsible for any loss, liability, cost or expense for fol-
lowing instructions received by telephone that it reasonably believes to be
genuine.
SIGNATURE GUARANTEES
Signature guarantees are required for the following redemptions:
. redemptions where the proceeds are to be sent to someone other than
the registered shareholder(s);
. redemptions where the proceeds are to be sent to an address which
is not the registered address; or
. share transfer requests.
Signature guarantees will be accepted from any eligible guarantor institution
which participates in a signature guarantee program. Eligible signature guaran-
tors include most banks, as well as most brokers, dealers, credit unions, na-
tional securities exchanges, registered securities associations, clearing agen-
cies and savings associations. Broker-dealers guaranteeing signatures must be a
member of a clearing corporation or maintain net capital of at least $100,000.
Credit unions must be authorized to issue signature guarantees. A notary public
can not provide a signature guarantee.
OTHER REDEMPTION INFORMATION
Normally, the Fund will make payment for all shares redeemed under proper
procedures within one business day of and no more than seven days after the re-
ceipt of the request, or earlier if required under applicable law. The Fund may
suspend the right of redemption or postpone the date at times when both the
NYSE and Custodian Bank are closed, or under any emergency circumstances deter-
mined by the SEC.
If the Fund's Board of Trustees determines that it would be detrimental to
the best interests of the remaining shareholders of the Fund to make payments
wholly or partly in cash, the Fund may pay the redemption proceeds in whole or
in part by a distribution in-kind of liquid securities held by the Portfolio
instead of cash in conformity with applicable rules of the SEC. Investors may
incur brokerage charges when they sell portfolio securities received in payment
of redemptions.
SERVICE AND DISTRIBUTION PLANS
Under the Service Plan for Service Class Shares, adopted pursuant to Rule
12b-1 under the 1940 Act, the Fund may enter into service agreements with Serv-
ice Agents (broker-dealers or other financial institutions) who receive fees
with respect to the Fund's Service Class Shares owned by shareholders for whom
the Service
17
<PAGE>
Agent is the dealer or holder of record, or for whom the Service Agent performs
Servicing, as defined below. These fees are paid out of the assets allocable to
Service Class Shares to the Distributor or to the Service Agents directly or
through the Distributor. The Fund reimburses the Distributor or the Service
Agent for payments made at an annual rate of up to 0.25% of the average daily
value of Service Class Shares owned by clients of the Service Agent during the
period payments for Servicing are being made to it. Such payments are borne ex-
clusively by the Service Class Shares. Each item for which a payment may be
made under the Service Plan constitutes personal service and/or shareholder ac-
count maintenance and may constitute an expense of distributing Fund shares as
the SEC construes such term under Rule 12b-1. The fees payable for Servicing
reflect actual expenses incurred up to the limit described herein.
Servicing may include assisting clients in changing dividend options, account
designations and addresses; performing subaccounting; establishing and main-
taining shareholder accounts and records; processing purchase and redemption
transactions; investing client cash account balances automatically in Service
Class Shares; providing periodic statements showing a client's account balance
and integrating such statements with those of other transactions and balances
in the client's other accounts serviced by the Service Agent; arranging for
bank wires; and such other services as the Fund may request, to the extent the
Service Agent is permitted by applicable statute, rule or regulation.
The Glass-Steagall Act and other applicable laws prohibit federally chartered
or supervised banks from engaging in certain aspects of the business of issu-
ing, underwriting, selling and/or distributing securities. Accordingly, banks
are engaged to act as Service Agent only to perform administrative and share-
holder servicing functions, including transaction-related agency services for
their customers. If a bank is prohibited from acting as a service agent, alter-
native means for continuing the servicing of its shareholders would be sought
and the shareholder clients of the bank will remain Fund shareholders.
The Distributor promotes the distribution of the Service Class Shares in ac-
cordance with the terms of a Distribution Plan adopted pursuant to Rule 12b-1
under the 1940 Act. The Distribution Plan provides for the use of Fund assets
allocable to Service Class Shares to pay expenses of distributing such shares.
The Distribution Plan and Service Plan (the "Plans") were approved by the
Board, including a majority of the Trustees who are not "interested persons" of
the Fund as defined in the 1940 Act (and each of whom has no direct or indirect
financial interest in the Plans or any agreement related thereto, referred to
herein as the "12b-1 Trustees"). The Plans may be terminated at any time by the
vote of the Board or the 12b-1 Trustees, or by the vote of a majority of the
outstanding Service Class Shares of the Portfolio involved.
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<PAGE>
While the Plans continue in effect, the selection of the 12b-1 Trustees is
committed to the discretion of such persons then in office. The Plans provide
generally that a Portfolio may incur distribution and service costs under the
Plans which may not exceed in the aggregate 0.75% per annum of that Portfolio's
net assets. The Board has currently limited aggregate payments under the Plans
to 0.50% per annum of the Portfolio's net assets. The Service Class Shares of-
fered by this Prospectus currently are not making payments under the Distribu-
tion Plan. Upon implementation, the Distribution Plan would permit payments to
the Distributor, broker-dealers, other financial institutions, sales represent-
atives or other third parties who render promotional and distribution services,
for items such as advertising expenses, selling expenses, commissions or travel
reasonably intended to result in sales of Service Class Shares and for the
printing of prospectuses sent to prospective purchasers of Service Class Shares
of the Portfolio.
Although the Plans may be amended by the Board of Trustees, any changes in
the Plans which would materially increase the amounts authorized to be paid un-
der the Plans must be approved by shareholders of the Class involved. The total
amounts paid under the foregoing arrangements may not exceed the maximum limits
specified above, and the amounts and purposes of expenditures under the Plans
must be reported to the 12b-1 Trustees quarterly. The amounts allowable under
the Plans for each Class of Shares of the Portfolios are also limited under
certain rules of the National Association of Securities Dealers, Inc.
In addition to payments by the Fund under the Plans, the Distributor, United
Asset Management Corporation, the parent company of UAMFSI, and of the Adviser
or any of their affiliates, may, at its own expense, compensate a Service Agent
or other person for marketing, shareholder servicing, record-keeping and/or
other services performed with respect to the Fund, the Portfolio or any Class
of Shares of the Portfolio. The person making such payments may do so out of
its revenues, its profits or any other source available to it. Such service ar-
rangements, when in effect, are made generally available to all qualified serv-
ice providers. The Adviser may compensate its affiliated companies for refer-
ring investors to the Portfolio.
The Distributor, the Adviser and certain of their other affiliates also par-
ticipate, at the date of this Prospectus, in an arrangement with Smith Barney
Inc. under which Smith Barney provides certain defined contribution plan mar-
keting and shareholder services and receives from such entities an amount equal
to up to 33.3% of the portion of the investment advisory fees attributable to
the invested assets of Smith Barney's eligible customer accounts without regard
to any expense limitation in addition to amounts payable to all selling deal-
ers. The Fund also compensates Smith Barney for services it provides to certain
defined contribution plan shareholders that are not otherwise provided by
UAMFSI.
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<PAGE>
SHAREHOLDER SERVICES
EXCHANGE PRIVILEGE
Service Class Shares of the Portfolio may be exchanged for Service Class
Shares of any other UAM Funds Portfolio. (See the list of Portfolios of the UAM
Funds at the end of this Prospectus.) Exchange requests should be made by con-
tacting the UAM Funds Service Center.
Any exchange will be based on the net asset value of the shares involved.
There is no sales commission or charge of any kind for an exchange. Before mak-
ing an exchange into a Portfolio, a shareholder should read its Prospectus and
consider the investment objectives of the Portfolio to be purchased. Call the
UAM Funds Service Center for a copy of the Prospectus for the Portfolio(s) in
which you are interested. Exchanges can only be made with Portfolios that are
qualified for sale in a shareholder's state of residence.
Exchange requests may be made either by mail or telephone. Telephone ex-
changes will be accepted only if the certificates for the shares to be ex-
changed have not been issued to the shareholder and if the registration of the
two accounts will be identical. Requests for exchanges received prior to 4 p.m.
(ET) will be processed as of the close of business on the same day. Requests
received after 4 p.m. will be processed on the next business day. The Board of
Trustees may limit the frequency and amount of exchanges permitted. For addi-
tional information regarding responsibility for the authenticity of telephoned
instructions, see "REDEMPTION OF SHARES BY TELEPHONE". An exchange into another
UAM Funds Portfolio is a sale of shares and may result in a gain or loss for
income tax purposes. The Fund may modify or terminate the exchange privilege at
any time.
VALUATION OF SHARES
The net asset value of the Portfolio is determined by dividing the value of
the Portfolio's assets, less any liabilities, by the number of shares outstand-
ing. The net asset value per share of the Portfolio is determined as of the
close of the NYSE on each day that the NYSE is open for business.
Equity securities listed on a securities exchange for which market quotations
are readily available are valued at the last quoted sale price of the day.
Price information on listed securities is taken from the exchange where the se-
curity is primarily traded. Unlisted equity securities and listed securities
not traded on the valuation date for which market quotations are readily avail-
able are valued neither exceeding the current asked prices nor less than the
current bid prices. Quotations of foreign securities in a foreign currency are
converted to U.S. dollar equivalents. The converted value is based upon the bid
price of the foreign currency against U.S. dollars quoted by any major bank or
by a broker.
Securities purchased with remaining maturities of 60 days or less are valued
at amortized cost when the Board of Trustees determines that amortized cost re-
flects fair value.
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<PAGE>
The value of other assets and securities for which no quotations are readily
available (including restricted securities) is determined in good faith at fair
value using methods determined by the Fund's Board of Trustees.
PERFORMANCE CALCULATIONS
The Portfolio measures performance by calculating total return. Total return
figures are based on historical earnings and are not intended to indicate fu-
ture performance.
Total return is the change in value of an investment in the Portfolio over a
given period, assuming reinvestment of any dividends and capital gains. A cumu-
lative or aggregate total return reflects actual performance over a stated pe-
riod of time. An average annual total return is a hypothetical rate of return
that, if achieved annually, would have produced the same cumulative total re-
turn if performance had been constant over the entire period.
The Portfolio's performance may be compared to data prepared by independent
services which monitor the performance of investment companies, data reported
in financial and industry publications, and various indices as further de-
scribed in the Portfolio's SAI. This information may also be included in sales
literature and advertising.
The Portfolio's Annual Report to Shareholders for the most recent fiscal year
end contains additional performance information that includes comparisons with
appropriate indices. The Annual Report is available without charge. Contact the
UAM Funds Service Center at the address or telephone number on the cover of
this Prospectus.
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
DIVIDENDS AND CAPITAL GAINS
The Portfolio will normally distribute substantially all of its net invest-
ment income (for tax purposes) to shareholders in quarterly dividends. If any
net capital gains are realized, each Portfolio will normally distribute them
annually. All dividends and capital gains distributions will be automatically
reinvested in additional shares of the Portfolio unless the Fund is notified in
writing that the shareholder elects to receive distributions in cash.
FEDERAL TAXES
The Portfolio intends to qualify as a "regulated investment company" under
subchapter M of the Internal Revenue Code of 1986, as amended, for federal in-
come tax purposes and to meet all other requirements that are necessary for it
(but not its shareholders) to be exempt from federal taxes on income and gains
paid to shareholders in the form of dividends. To do this, the Portfolio must,
among
21
<PAGE>
other things, distribute substantially all of its ordinary income and net capi-
tal gains on an annual basis and maintain a portfolio of investments which sat-
isfies certain diversification criteria.
Dividends paid by the Portfolio from net investment income, whether in cash
or reinvested in shares, are taxable to shareholders as ordinary income. Short-
term capital gains will be taxed as ordinary income. Long-term capital gains
distributions are taxed as long-term capital gains. Shareholders will be noti-
fied annually of dividend income earned for tax purposes.
Dividends declared in October, November and December to shareholders of rec-
ord in such a month will be treated as if they had been paid by the Fund and
received by the shareholders on December 31 of the same calendar year, provided
that the dividends are paid before February of the following year.
The Fund is required by Federal law to withhold 31% of reportable payments
paid to shareholders who have not complied with IRS regulations. In order to
avoid this withholding requirement, you must certify that your Social Security
or Taxpayer Identification Number you have provided is correct and that either
you are not currently subject to backup withholding or you are exempt from
backup withholding. This certification must be made on the Application or on a
separate form supplied by the Fund.
Dividends and interest received by the Portfolio may give rise to withholding
and other taxes imposed by foreign countries. These taxes reduce the Portfo-
lio's dividends but are included in the taxable income reported on your tax
statement if the Portfolio qualifies for this tax treatment and elects to pass
it through to you. Consult a tax adviser for more information regarding deduc-
tions and credits for foreign taxes.
INVESTMENT ADVISER
The Adviser is a registered investment adviser formed in 1983 with business
offices located at Two Leadership Square, 211 North Robinson, Suite 450, Okla-
homa City, Oklahoma. It is a wholly-owned subsidiary of UAM and provides and
offers investment management and advisory services to corporations, unions,
pensions and profit-sharing plans, trusts, estates and other institutions and
investors. The Adviser currently has approximately $1.9 billion in assets under
management.
The Portfolio pays an annual fee in monthly installments to the Adviser for
advisory services. This fee is calculated every month as a percentage of the
average net assets in the Portfolio for that month. The percentage fee on an
annual basis is 0.75%.
Although the advisory fee rate payable by the Portfolio is higher than the
rate payable by most mutual funds, the Fund believes it is comparable to the
rates paid by many other funds with similar investment objectives and policies
and is appropriate for the Portfolio in light of its investment objective.
22
<PAGE>
The Adviser may compensate its affiliated companies for referring investors
to the Portfolio. The Adviser and its parent company may also make payments to
unaffiliated brokers who perform distribution, marketing, shareholder and other
services with respect to the Portfolio.
The investment professionals at the Adviser who are responsible for the day-
to-day management of the Portfolio and their qualifications are as follows:
THOMAS E. JOHNSON, CFA, PRESIDENT, SENIOR PORTFOLIO MANAGER -- Texas Tech
University, B.B.A., 1963; Texas Tech University, M.B.A., 1964; President and
Senior Portfolio Manager, Tom Johnson Investment Management, Inc., 1983-Pres-
ent.
JERRY WISE, CFA, CPA, EXECUTIVE VICE PRESIDENT, SENIOR PORTFOLIO MANAGER --
Oklahoma University, B.B.A., 1978; Oklahoma University, M.B.A., 1984; Execu-
tive Vice President and Senior Portfolio Manager, Tom Johnson Investment Man-
agement, Inc., 1986-Present.
RICHARD PARRY, CFA, VICE PRESIDENT, SENIOR PORTFOLIO MANAGER -- University of
Colorado, B.S., 1979; Oklahoma City University, M.B.A., 1983; Vice President
and Senior Portfolio Manager, Tom Johnson Investment Management, Inc., 1989-
Present.
THOMAS GILES, CFA, PORTFOLIO MANAGER -- University of Texas, B.B.A., 1979;
University of Texas, M.B.A., 1982; Portfolio Manager, Tom Johnson Investment
Management, Inc., 1989-Present.
JAMES MCGLYNN, CFA, PORTFOLIO MANAGER -- University of Texas at Austin,
B.B.A., 1980; Securities Analyst/Portfolio Manager, Securities Management Re-
search, 1990-1991; Portfolio Manager, Tom Johnson Investment Management, Inc.,
1991-Present.
JOHN SHEPLEY, CFA, PORTFOLIO MANAGER -- Midwestern State University, B.B.A.,
1982; Oklahoma City University, M.B.A., 1994; Portfolio Manager, Sauder Manage-
ment Company, 1983-1990; Portfolio Manager, Tom Johnson Investment Management,
Inc., 1990-Present.
DOUGLAS A. HAWS, TRADER -- University of Oklahoma, B.B.A., 1993; Internal Au-
ditor, Union Pacific Corporation, May, 1993-October, 1994; Trader, Tom Johnson
Investment Management, Inc., October, 1994-Present.
ADMINISTRATIVE SERVICES
UAM Fund Services, Inc. ("UAMFSI"), a wholly-owned subsidiary of United Asset
Management Corporation, is responsible for performing and overseeing adminis-
trative, fund accounting, dividend disbursing and transfer agent services pro-
vided to the Fund and its Portfolios. UAMFSI's principal office is located at
211
23
<PAGE>
Congress Street, Boston, MA 02110. UAMFSI has subcontracted some of these serv-
ices to Chase Global Funds Services Company ("CGFSC"), an affiliate of The
Chase Manhattan Bank, by a Mutual Funds Service Agreement dated April 15, 1996.
CGFSC is located at 73 Tremont Street, Boston, MA 02108.
Each Portfolio pays UAMFSI a two part monthly fee: a Portfolio-specific fee
which is retained by UAMFSI and a sub-administration fee which UAMFSI in turn
pays to CGFSC. The following Portfolio-specific fees are calculated from the
aggregate net assets of each Portfolio:
<TABLE>
<CAPTION>
RATE
----
<S> <C>
TJ Core Equity Portfolio............................................... .04%
</TABLE>
CGFSC's monthly fee for its services is calculated on an annualized basis as
follows:
0.19 of 1% of the first $200 million of combined Fund assets;
0.11 of 1% of the next $800 million of combined Fund assets;
0.07 of 1% of combined Fund assets in excess of $1 billion but less than
$3 billion;
0.05 of 1% of combined Fund assets in excess of $3 billion.
Fees are allocated among the Portfolios on the basis of their relative assets
and are subject to a graduated minimum fee schedule per Portfolio, which starts
at $2,000 per month and increases to $70,000 annually after two years. If a
separate class of shares is added to a Portfolio, its minimum annual fee in-
creases by $20,000.
DISTRIBUTOR
UAM Fund Distributors, Inc., a wholly-owned subsidiary of UAM with its prin-
cipal office located at 211 Congress Street, Boston, Massachusetts 02110, dis-
tributes the shares of the Fund. Under the Fund's Distribution Agreement (the
"Agreement"), the Distributor, as agent of the Fund, agrees to use its best ef-
forts as sole distributor of the Fund's shares. The Distributor does not re-
ceive any fee or other compensation under the Agreement (except as described
under "Service and Distribution Plans" above). The Agreement continues in ef-
fect as long as it is approved at least annually by the Fund's Board of Trust-
ees. Those approving the Agreement include a majority of Trustees who are nei-
ther parties to the Agreement nor interested persons of any such party. The
Agreement provides that the Fund will bear the costs of the registration of its
shares with the SEC and various states and the printing of its prospectuses,
SAIs and reports to shareholders.
PORTFOLIO TRANSACTIONS
The Advisory Agreements for the Fund's Portfolios authorize the Adviser to
select the brokers or dealers that will execute the purchases and sales of in-
vestment securities for each Portfolio. The Agreements direct the Adviser to
use its best
24
<PAGE>
efforts to obtain the best available price and most favorable execution for all
transactions of the Portfolios. If consistent with the interests of the Portfo-
lios, the Adviser may select brokers on the basis of research, statistical and
pricing services these brokers provide to the Portfolios in addition to re-
quired Adviser services. Such brokers may be paid a higher commission than that
which another qualified broker would have charged for effecting the same trans-
action, provided that such commissions are paid in compliance with the Securi-
ties Exchange Act of 1934, as amended, and that the Adviser determines in good
faith that the commission is reasonable in terms either of the transaction or
the overall responsibility of the Adviser to the Portfolios and the Adviser's
other clients. Although not a typical practice, the Adviser may place portfolio
orders with qualified broker-dealers who refer clients to the Adviser.
If a purchase or sale of securities is consistent with the investment poli-
cies of a Portfolio and one or more other clients served by the Adviser is con-
sidering a purchase at or about the same time, transactions in such securities
will be allocated among the Portfolio and clients in a manner deemed fair and
reasonable by the Adviser. Although there is no specified formula for allocat-
ing such transactions, allocations are subject to periodic review by the Fund's
Trustees.
GENERAL INFORMATION
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Fund was organized as a Delaware business trust on May 18, 1994 under the
name "The Regis Fund II." On October 31, 1995, the name of the Fund was changed
to "UAM Funds Trust." The Fund's Agreement and Declaration of Trust permits the
Fund to issue an unlimited number of shares of beneficial interest, without par
value. The Trustees have the power to designate one or more series ("Portfo-
lios") or classes of shares of beneficial interest without further action by
shareholders.
At its discretion, the Board of Trustees may create additional Portfolios and
classes of shares. The shares of each Portfolio are fully paid and nonassess-
able, and have no preference as to conversion, exchange, dividends, retirement
or other features and no pre-emptive rights. They have noncumulative voting
rights, which means that holders of more than 50% of shares voting for the
election of Trustees can elect 100% of the Trustees. A shareholder is entitled
to one vote for each full share held (and a fractional vote for each fractional
share held), then standing in his name on the books of the Fund.
As of December 6, 1996, Hartnat & Co., Boston, MA held of record 48.9% and
28.8%, respectively, of the outstanding shares of the TJ Core Equity Portfolio
Institutional Service Class Shares for the benefit of Liblich and Charles and
Catholic Healthcare, for which ownership is disclaimed or presumed disclaimed.
The
25
<PAGE>
persons or organizations owning 25% or more of the outstanding shares of a
Portfolio may be presumed to "control" (as that term is defined in the 1940
Act) such Portfolio. As a result, those persons or organizations could have the
ability to vote a majority of the shares of the Portfolio on any matter requir-
ing the approval of shareholders of such Portfolio.
Annual meetings will not be held except as required by the 1940 Act and other
applicable laws. The Fund has undertaken that its Trustees will call a meeting
of shareholders if such a meeting is requested in writing by the holders of not
less than 10% of the outstanding shares of the Fund. The Fund will assist
shareholder communications in such matters.
CUSTODIAN
The Chase Manhattan Bank serves as custodian of the Fund's assets.
ACCOUNTANTS
Price Waterhouse LLP acts as the independent accountants for the Fund and au-
dits its financial statements annually.
REPORTS
Investors will receive unaudited semi-annual financial statements and annual
financial statements audited by Price Waterhouse LLP.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be made by contacting the UAM Funds Service Center
at the address or phone number listed on the cover of this Prospectus.
LITIGATION
The Fund is not involved in any litigation.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS NOT CONTAINED IN THIS PROSPECTUS, OR IN THE PORTFOLIO'S STATEMENT OF
ADDITIONAL INFORMATION, IN CONNECTION WITH THE OFFERING MADE BY THIS PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR ITS REPRESENTATIONS MUST NOT BE RE-
LIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES NOT CON-
STITUTE AN OFFERING BY THE FUND IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY
NOT BE LAWFULLY MADE.
26
<PAGE>
UAM FUNDS -- SERVICE CLASS SHARES
BHM&S Total Return Bond Portfolio
FPA Crescent Fund
MJI International Equity Portfolio
Newbold's Equity Portfolio
NWQ Balanced Portfolio
NWQ Value Equity Portfolio
Sirach Growth Portfolio
Sirach Special Equity Portfolio
Sirach Strategic Balanced Portfolio
Sirach Equity Portfolio
Sterling Partners' Balanced Portfolio
Sterling Partners' Equity Portfolio
Sterling Partners' Short-Term
Fixed Income Portfolio
TJ Core Equity Portfolio
27
<PAGE>
UAM Funds Service Center
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
1-800-638-7983
Investment Adviser
Tom Johnson Investment Management, Inc.
Two Leadership Square, 211 North Robinson,
Suite 450,
Oklahoma City, Oklahoma
Distributor
UAM FUND DISTRIBUTORS, INC.
211 Congress Street
Boston, MA 02110
PROSPECTUS
January 3, 1997
<PAGE>
APPLICATION INSTITUTIONAL CLASS SHARES
UAM FUNDS
REGULAR MAIL: UAM Funds P.O. Box 2798 Boston, MA 02208-2798
Express Mail: UAM Funds 73 Tremont Street, 9th Floor Boston,
MA 02108-3913
FOR HELP WITH THIS APPLICATION, OR FOR MORE INFORMATION, CALL US TOLL FREE: 1-
800-638-7983.
Distributed by UAM Fund Distributors, Inc.
BEFORE YOU COMPLETE THE APPLICATION, PLEASE BE SURE TO READ THE INSTRUCTIONS
ON THE REVERSE SIDE.
1YOUR ACCOUNT REGISTRATION (Check one box.)
[_]
Individual or Joint Account
------------------------------
Owner's Name: First, Initial, Last
- -
------------------
Owner's Social Security Number
------------------------------
Joint Owner's Name: First, Initial, Last
- -
------------------
Joint Owner's Social Security Number
Joint accounts will be registered joint tenants with right of survivorship
unless otherwise indicated.
[_] Trust [_] Exempt [_] Non-Exempt [_] Qualified Plan
------------------------------
Trustee(s)' Name
------------------------------
Name of Trust Agreement
------------------------------
Beneficiary's Name
-
---------------
Taxpayer's ID -------------
Date of Trust Agreement
[_]
Corporation, Partnership or Other Entity
Type: [_] Corp.
[_] Partnership [_] Other
------------------------------
Name of Corp. or Other Entity
-
[_] Exempt[_] Non-
--------------- Exempt
Taxpayer ID Number
A Corporate Resolution Form is required.
2ADDRESS
------------------------------
Street or P.O. Box Number
------------------------------
City State Zip Code
( ) ( )
-------------- --------------
Daytime Phone Evening Phone
Citizenship: --------
[_] U.S.
[_] Resident-
Alien
[_] Non-
Resident
Alien
Specify Country
3INVESTMENT
Fill in the name of the Portfolio EXACTLY AS IT APPEARS ON THE FRONT OF THE
PROSPECTUS.
_______________________ $______
_______________________ $______
TOTAL $______
4METHOD OF PAYMENT
A.[_] Check (payable to UAM Funds) An Account No. will be assigned.
B.[_] This application confirms my prior wire purchase on (date): _____________
I was assigned the following wire reference control number:____________________
- -------------------------------------------------------------------------------
5DISTRIBUTIONS
Unless otherwise instructed, all distributions will be reinvested in
additional shares.
<TABLE>
<S> <C> <C>
All dividends
are to be [_] reinvested [_] paid in cash
All capital
gains are to be [_] reinvested [_] paid in cash
</TABLE>
6TELEPHONE REDEMPTION AND EXCHANGE
I/We authorize Chase Global Funds Services Company to honor any request(s)
believed to be authentic for the following:
[_] Telephone Exchange
[_] Telephone Redemption
[_] a. Mail proceeds to name and address in which account is registered.
[_] b. Wire redemption proceeds to bank indicated below.
A VOIDED CHECK OR DEPOSIT SLIP MUST BE ATTACHED.
- -------------------------------------------------------------------------------
Bank Name
- -------------------------------------------------------------------------------
Bank Address
- ------------------ ( )
Account Number -----------------------------------------------------------
Bank Phone
- -------------------------------------------------------------------------------
Name(s) in which Account is Registered
- -------------------------------------------------------------------------------
Bank Transit Routing Number (ABA #)
7OPTIONAL INFORMATION
- -------------------------------------------------------------------------------
Owner's Occupation Owner's Date of
Birth
- -------------------------------------------------------------------------------
Employer's Name
- -------------------------------------------------------------------------------
Employer's Address
- -------------------------------------------------------------------------------
Joint Owner's Occupation Joint
Owner's Date of Birth
- -------------------------------------------------------------------------------
Joint Owner's Employer's Name
- -------------------------------------------------------------------------------
Joint Owner's Employer's Address
8SIGNATURE(S)
I/We have full authority and legal capacity to purchase Fund shares.
I/We have received the current Prospectus of the Portfolio(s) and agree to
be bound by its (their) terms.
UNDER PENALTY OF PERJURY, I/WE ALSO
CERTIFY THAT --
A. THE NUMBER SHOWN ON THIS FORM IS
A CORRECT TAXPAYER ID NUMBER OR
SOCIAL SECURITY NUMBER.
B. I AM NOT SUBJECT TO BACKUP
WITHHOLDING BECAUSE (I) I HAVE
NOT BEEN NOTIFIED BY THE
INTERNAL REVENUE SERVICE THAT I
AM SUBJECT TO BACKUP WITHHOLDING
AS A RESULT OF A FAILURE TO
REPORT ALL INTEREST OR
DIVIDENDS, OR (II) THE IRS HAS
NOTIFIED ME THAT I AM NO LONGER
SUBJECT TO BACKUP WITHHOLDING.
(CROSS OUT ITEM "B" IF YOU HAVE
BEEN NOTIFIED BY THE IRS THAT
YOU ARE SUBJECT TO BACKUP
WITHHOLDING BECAUSE OF
UNDERREPORTING INTEREST OR
DIVIDENDS ON YOUR TAX RETURN.)
THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF
THIS DOCUMENT OTHER THAN THE CERTIFICATIONS REQUIRED TO AVOID BACKUP
WITHHOLDING.
- ------------------------- ----------
Signature (Owner, Trustee, etc.)
Date
- ------------------------- ----------
Signature (Joint Owner, Co-trustee, etc.)
Date
9INTERESTED PARTY/BROKER-DEALER
- -------------------------------------------------------------------------------
Name
- -------------------------------------------------------------------------------
Address City State Zip Code
UAM Funds Service Center
<PAGE>
APPLICATION INSTITUTIONAL SERVICE CLASS SHARES
UAM FUNDS
REGULAR MAIL: UAM Funds P.O. Box 2798 Boston, MA 02208-2798
Express Mail: UAM Funds 73 Tremont Street, 9th Floor Boston,
MA 02108-3913
FOR HELP WITH THIS APPLICATION, OR FOR MORE INFORMATION, CALL US TOLL FREE: 1-
800-638-7983.
Distributed by UAM Fund Distributors, Inc.
BEFORE YOU COMPLETE THE APPLICATION, PLEASE BE SURE TO READ THE INSTRUCTIONS
ON THE REVERSE SIDE.
1YOUR ACCOUNT REGISTRATION (Check one box.)
[_]
Individual or Joint Account
------------------------------
Owner's Name: First, Initial, Last
- -
------------------
Owner's Social Security Number
------------------------------
Joint Owner's Name: First, Initial, Last
- -
------------------
Joint Owner's Social Security Number
Joint accounts will be registered joint tenants with right of survivorship
unless otherwise indicated.
[_] Trust [_] Exempt [_] Non-Exempt [_] Qualified Plan
------------------------------
Trustee(s)' Name
------------------------------
Name of Trust Agreement
------------------------------
Beneficiary's Name
-
---------------
Taxpayer's ID -------------
Date of Trust Agreement
[_]
Corporation, Partnership or Other Entity
Type: [_] Corp.
[_] Partnership [_] Other
------------------------------
Name of Corp. or Other Entity
-
[_] Exempt[_] Non-
--------------- Exempt
Taxpayer ID Number
A Corporate Resolution Form is required.
2ADDRESS
------------------------------
Street or P.O. Box Number
------------------------------
City State Zip Code
( ) ( )
-------------- --------------
Daytime Phone Evening Phone
Citizenship: --------
[_] U.S.
[_] Resident-
Alien
[_] Non-
Resident
Alien
Specify Country
3INVESTMENT
Fill in the name of the Portfolio EXACTLY AS IT APPEARS ON THE FRONT OF THE
PROSPECTUS.
_______________________ $______
_______________________ $______
TOTAL $______
4METHOD OF PAYMENT
A.[_] Check (payable to UAM Funds) An Account No. will be assigned.
B.[_] This application confirms my prior wire purchase on (date): _____________
I was assigned the following wire reference control number:____________________
- -------------------------------------------------------------------------------
5DISTRIBUTIONS
Unless otherwise instructed, all distributions will be reinvested in
additional shares.
<TABLE>
<S> <C> <C>
All dividends
are to be [_] reinvested [_] paid in cash
All capital
gains are to be [_] reinvested [_] paid in cash
</TABLE>
6TELEPHONE REDEMPTION AND EXCHANGE
I/We authorize Chase Global Funds Services Company to honor any request(s)
believed to be authentic for the following:
[_] Telephone Exchange
[_] Telephone Redemption
[_] a. Mail proceeds to name and address in which account is registered.
[_] b. Wire redemption proceeds to bank indicated below.
A VOIDED CHECK OR DEPOSIT SLIP MUST BE ATTACHED.
- -------------------------------------------------------------------------------
Bank Name
- -------------------------------------------------------------------------------
Bank Address
- ------------------ ( )
Account Number -----------------------------------------------------------
Bank Phone
- -------------------------------------------------------------------------------
Name(s) in which Account is Registered
- -------------------------------------------------------------------------------
Bank Transit Routing Number (ABA #)
7OPTIONAL INFORMATION
- -------------------------------------------------------------------------------
Owner's Occupation Owner's Date of
Birth
- -------------------------------------------------------------------------------
Employer's Name
- -------------------------------------------------------------------------------
Employer's Address
- -------------------------------------------------------------------------------
Joint Owner's Occupation Joint
Owner's Date of Birth
- -------------------------------------------------------------------------------
Joint Owner's Employer's Name
- -------------------------------------------------------------------------------
Joint Owner's Employer's Address
8SIGNATURE(S)
I/We have full authority and legal capacity to purchase Fund shares.
I/We have received the current Prospectus of the Portfolio(s) and agree to
be bound by its (their) terms.
UNDER PENALTY OF PERJURY, I/WE ALSO
CERTIFY THAT --
A. THE NUMBER SHOWN ON THIS FORM IS
A CORRECT TAXPAYER ID NUMBER OR
SOCIAL SECURITY NUMBER.
B. I AM NOT SUBJECT TO BACKUP
WITHHOLDING BECAUSE (I) I HAVE
NOT BEEN NOTIFIED BY THE
INTERNAL REVENUE SERVICE THAT I
AM SUBJECT TO BACKUP WITHHOLDING
AS A RESULT OF A FAILURE TO
REPORT ALL INTEREST OR
DIVIDENDS, OR (II) THE IRS HAS
NOTIFIED ME THAT I AM NO LONGER
SUBJECT TO BACKUP WITHHOLDING.
(CROSS OUT ITEM "B" IF YOU HAVE
BEEN NOTIFIED BY THE IRS THAT
YOU ARE SUBJECT TO BACKUP
WITHHOLDING BECAUSE OF
UNDERREPORTING INTEREST OR
DIVIDENDS ON YOUR TAX RETURN.)
THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF
THIS DOCUMENT OTHER THAN THE CERTIFICATIONS REQUIRED TO AVOID BACKUP
WITHHOLDING.
- ------------------------- ----------
Signature (Owner, Trustee, etc.)
Date
- ------------------------- ----------
Signature (Joint Owner, Co-trustee, etc.)
Date
9INTERESTED PARTY/BROKER-DEALER
- -------------------------------------------------------------------------------
Name
- -------------------------------------------------------------------------------
Address City State Zip Code
UAM Funds Service Center
<PAGE>
APPLICATION INSTRUCTIONS
- --------------------------------------------------------------------------------
IF YOU NEED ASSISTANCE, A REPRESENTATIVE OF UAM FUNDS WILL BE PLEASED TO HELP
YOU. OUR TOLL-FREE NUMBER IS 1-800-638-7983.
- --------------------------------------------------------------------------------
NEW ACCOUNT APPLICATION. An account can be registered as only one of the
1 following:
Supply the Social Security Number of the registered account
owner who is to be taxed.
. individual . joint tenants
. a trust Supply the Taxpayer Identification Number of the legal entity
. a or organization that will report income and/or capital gains.
corporation,
partnership,
organization,
fiduciary
Please check the box that corresponds with the type of account you are opening
and fill in the required information exactly as you wish it to appear on the
account.
Redemption Authorizations. Corporations, other organizations, trusts and fidu-
ciaries will be required to furnish additional paperwork to authorize redemp-
tions. Call a representative of UAM Funds at 1-800-638-7983 for more informa-
tion.
2 Your Mailing Address. Please be sure to provide us with the address at
which you wish to receive your mail.
Your Investment. Please be sure to indicate the total amount invested. For
3 more than two investments, please attach a separate sheet or an additional
application.
Establishing Your Account.
4 A. Section 4A lets you open your account by check. Your check(s) should be
made payable to UAM Funds. Be sure to enclose your check(s) with this ap-
plication.
B. If you are confirming a new Fund purchase previously made by wire, be
sure to fill in Section 4B and provide the wire reference control number
you were assigned at the time of this purchase. A completed application
must follow all wire purchases.
All applications are subject to acceptance by UAM Funds.
Receiving Your Dividends and Capital Gains. Check the distribution option
5 you prefer. If you do not select an option, all dividends and capital
gains will be reinvested in your account.
Telephone Redemption and Exchange. Telephone redemption proceeds mailed to
6 a shareholder will be sent only to the address listed on the account. The
Funds' bank wire feature is available for redeeming out of your Fund ac-
count to your bank account. Be sure to check with your bank for proper
wiring instructions. The Funds require the transit/routing number of your
bank or its correspondent if your bank is unable to receive wires direct-
ly. Please complete Section 6 to add the bank wire feature.
Telephone exchanges may be made only if a Fund holds all share certifi-
cates and if the registration of the two accounts will be identical.
7 Employment Information. It is required by the National Association of Se-
curities Dealers, Inc. to request this information.
8 Your Signature(s). Please be sure to sign this application. If the account
is registered in the name of:
.an individual, the individual should sign
.joint tenants, both should sign
.a trust or other fiduciary, the fiduciary or fiduciaries should sign
(please indicate capacity)
.a corporation or other organization, an officer should sign (please indi-
cate corporate office or title)
9 Interested Party/Broker-Dealer. In addition to the account statement sent
to your registered address, you may also have a monthly consolidated
statement mailed to up to ten (10) interested parties. You may add a sheet
with additional interested party names and addresses. This section should
also be completed if you are investing through a Broker-Dealer.
--IMPORTANT--
REGULAR MAIL: UAM Funds P.O. Box 2798 Boston, MA 02208-2798
EXPRESS MAIL: UAM Funds 73 Tremont Street, 9th Floor Boston, MA 02108-3913
MORE QUESTIONS? Call a representative of UAM Funds at 1-800-638-7983.
<PAGE>
UAM FUNDS TRUST
POST-EFFECTIVE AMENDMENT NO. 15
PART B
The following Statements of Additional Information are included in this Post
Effective Amendment No. 15:
. BHM&S Total Return Bond Portfolio Institutional and Institutional Service
Class Shares
. Chicago Asset Management Intermediate Bond Portfolio Institutional Class
Shares and Value/Contrarian Portfolio Institutional Class Shares
. FPA Crescent Portfolio Institutional and Institutional Service Class Shares
. Hanson Equity Portfolio Institutional Class Shares
. IRC Enhanced Index Portfolio Institutional Class Shares
. Jacobs International Octagon Portfolio Institutional Class Shares
. MJI International Equity Portfolio Institutional and Institutional
Service Class Shares
. Newbold's Equity Portfolio Institutional and Institutional Service Class
Shares
. TJ Core Equity Portfolio Institutional Service Class Shares
The following Statement of Additional Information is incorporated by reference
to Post-Effective Amendment No. 2 filed on November 25, 1994:
. Dwight Principal Preservation Portfolio
<PAGE>
PART B
UAM FUNDS
- -------------------------------------------------------------------------------
BHM&S TOTAL RETURN BOND PORTFOLIO
INSTITUTIONAL CLASS SHARES
INSTITUTIONAL SERVICE CLASS SHARES
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STATEMENT OF ADDITIONAL INFORMATION -- JANUARY 3, 1997
This Statement is not a Prospectus but should be read in conjunction with
the Prospectus of the UAM Funds Trust (the "UAM Funds" or the "Fund") for the
BHM&S Total Return Bond Portfolio dated January 2, 1997 relating to the Insti-
tutional Class Shares, and the Prospectus dated January 3, 1997 relating to
the Institutional Service Class Shares (the "Service Class Shares"). To obtain
a Prospectus, please call the UAM Funds Service Center:
1-800-638-7983
TABLE OF CONTENTS
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PAGE
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Investment Objective And Policies.......................................... 2
Purchase of Shares......................................................... 2
Redemption of Shares....................................................... 3
Shareholder Services....................................................... 4
Investment Limitations..................................................... 5
Management of The Fund..................................................... 7
Investment Adviser......................................................... 9
Service And Distribution Plans............................................. 10
Portfolio Transactions..................................................... 13
Administrative Services.................................................... 14
Performance Calculations................................................... 15
General Information........................................................ 19
Financial Statements....................................................... 21
Appendix -- Description of Securities And Ratings.......................... A-1
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INVESTMENT OBJECTIVE AND POLICIES
The following policies supplement the investment objective and policies of
the BHM&S Total Return Bond Portfolio (the "Portfolio") as set forth in the
Prospectuses for the Institutional Class Shares and Service Class Shares of
the Portfolio:
LENDING OF SECURITIES
The Portfolio may lend its investment securities to qualified brokers, deal-
ers, domestic and foreign banks or other financial institutions, so long as
the terms, the structure and the aggregate amount of such loans are not incon-
sistent with the Investment Company Act of 1940, as amended, (the "1940 Act")
or the Rules and Regulations or interpretations of the Securities and Exchange
Commission (the "SEC") thereunder, which currently require that (a) the bor-
rower pledge and maintain with the Portfolio collateral consisting of cash, an
irrevocable letter of credit issued by a domestic U.S. bank or securities is-
sued or guaranteed by the United States Government having a value at all times
not less than 100% of the value of the securities loaned, (b) the borrower add
to such collateral whenever the price of the securities loaned rises (i.e.,
the borrower "marks to the market" on a daily basis), (c) the loan be made
subject to termination by the Portfolio at any time, and (d) the Portfolio re-
ceives reasonable interest on the loan (which may include the Portfolio in-
vesting any cash collateral in interest bearing short-term investments). As
with other extensions of credit, there are risks of delay in recovery or even
loss of rights in the securities loaned if the borrower of the securities
fails financially. These risks are similar to the ones involved with repur-
chase agreements as discussed in the Prospectus.
PURCHASE OF SHARES
Both Classes of shares of the Portfolio may be purchased without sales com-
mission at their net asset value per share next determined after an order is
received in proper form by the Fund, and payment is received by the Fund's
custodian. The minimum initial investment required for the Portfolio is $2,500
with certain exceptions as may be determined from time to time by the officers
of the Fund. The initial investment minimum for IRA accounts is $500. The ini-
tial investment minimum for spousal IRA accounts is $250. The minimum for any
subsequent investment is $100. An order received in proper form prior to the
4:00 p.m. close of the New York Stock Exchange (the "Exchange") will be exe-
cuted at the price computed on the date of receipt; and an order received not
in proper form or after the 4:00 p.m. close of the Exchange will be executed
at the price computed on the next day the Exchange is open after proper re-
ceipt. The Exchange will be closed on the following days: Presidents' Day,
February 17, 1997; Good Friday, March 28, 1997; Memorial Day, May 26, 1997;
Independence Day, July 4, 1997; Labor Day, September 1, 1997; Thanksgiving
Day, November 27, 1997; Christmas Day, December 25, 1997; and New Year's Day,
January 1, 1998.
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The Portfolio reserves the right in its sole discretion (1) to suspend the
offering of its shares, (2) to reject purchase orders when in the judgement of
management such rejection is in the best interests of the Fund, and (3) to re-
duce or waive the minimum for initial and subsequent investment for certain
fiduciary accounts such as employee benefit plans or under circumstances where
certain economies can be achieved in sales of a Portfolio's shares.
REDEMPTION OF SHARES
The Portfolio may suspend redemption privileges or postpone the date of pay-
ment (1) during any period that either the Exchange or custodian bank are
closed or trading on the Exchange is restricted as determined by the Commis-
sion, (2) during any period when an emergency exists as defined by the rules
of the Commission as a result of which it is not reasonably practicable for a
Portfolio to dispose of securities owned by it or to fairly determine the
value of its assets, and (3) for such other periods as the Commission may per-
mit. The Fund has made an election with the Commission to pay in cash all re-
demptions requested by any shareholder of record limited in amount during any
90-day period to the lesser of $250,000 or 1% of the net assets of the Fund at
the beginning of such period. Such commitment is irrevocable without the prior
approval of the Commission. Redemptions in excess of the above limits may be
paid, in whole or in part, in investment securities or in cash as the Board of
Trustees may deem advisable; however, payment will be made wholly in cash un-
less the Board of Trustees believe that economic or market conditions exist
which would make such a practice detrimental to the best interests of the
Fund. If redemptions are paid in investment securities, such securities will
be valued as set forth in each Prospectus under "How Shares Prices are Deter-
mined," and a redeeming shareholder would normally incur brokerage expenses if
he converted those securities to cash.
No charge is made by a Portfolio for redemptions. Any redemption may be more
or less than the shareholder's initial cost depending on the market value of
the securities held by the Portfolio.
SIGNATURE GUARANTEES
To protect your account, the Fund and Chase Global Funds Services Company
(the "Sub-Administrator") from fraud, signature guarantees are required for
certain redemptions. Signature guarantees are required for (1) redemptions
where the proceeds are to be sent to someone other than the registered
shareowner(s) or the registered address or (2) share transfer requests. The
purpose of signature guarantees is to verify the identity of the party who has
authorized a redemption.
Signatures must be guaranteed by an "eligible guarantor institution" as de-
fined in Rule 17Ad-15 under the Securities Exchange Act of 1934. Eligible
guarantor institutions include banks, brokers, dealers, credit unions, na-
tional securities exchanges, registered securities associations, clearing
agencies and savings associ-
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ations. A complete definition of eligible guarantor institution is available
from the Sub-Administrator. Broker-dealers guaranteeing signatures must be a
member of a clearing corporation or maintain net capital of at least $100,000.
Credit unions must be authorized to issue signature guarantees. Signature
guarantees will be accepted from any eligible guarantor institution which par-
ticipates in a signature guarantee program.
The signature guarantee must appear either: (1) on the written request for
redemption; (2) on a separate instrument for assignment ("stock power") which
should specify the total number of shares to be redeemed; or (3) on all stock
certificates tendered for redemption and, if shares held by the Fund are also
being redeemed, on the letter or stock power.
SHAREHOLDER SERVICES
The following supplements the information set forth in the Portfolio's Pro-
spectuses under the heading "Buying, Selling and Exchanging Shares":
EXCHANGE PRIVILEGE
Institutional Class Shares of the BHM&S Total Return Bond Portfolio may be
exchanged for any other Institutional Class Shares of a Portfolio included in
the UAM Funds which is comprised of the Fund and UAM Funds, Inc. (See the list
of Portfolios of the UAM Funds -- Institutional Class Shares at the end of the
BHM&S Total Return Bond Portfolio -- Institutional Class Shares Prospectus.)
Service Class Shares of the BHM&S Total Return Bond Portfolio may be exchanged
for any other Service Class Shares of a Portfolio included in the UAM Funds.
(For those Portfolios currently offering Service Class Shares, please call the
UAM Funds Service Center). Exchange requests should be made by calling the
Fund (1-800-638-7983) or by writing to UAM Funds, UAM Funds Service Center,
c/o Chase Global Funds Services Company, P.O. Box 2798, Boston, MA 02208-2798.
The exchange privilege is only available with respect to Portfolios that are
qualified for sale in the shareholder's state of residence.
Any such exchange will be based on the respective net asset values of the
shares involved. There is no sales commission or charge of any kind. Before
making an exchange into a Portfolio, a shareholder should read its Prospectus
and consider the investment objective of the Portfolio to be purchased. You
may obtain a Prospectus for the Portfolio(s) you are interested in by calling
the UAM Funds Service Center at 1-800-638-7983.
Exchange requests may be made either by mail or telephone. Telephone ex-
changes will be accepted only if the certificates for the shares to be ex-
changed are held by the Fund for the account of the shareholder, and the reg-
istration of the two accounts will be identical. Requests for exchanges re-
ceived prior to 4:00 p.m. (Eastern Time) will be processed as of the close of
business on the same day.
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Requests received after 4:00 p.m. will be processed on the next business day.
Neither the Fund nor the Sub-Administrator will be responsible for the authen-
ticity of the exchange instructions received by telephone. Exchanges may also
be subject to limitations as to amounts or frequency and to other restrictions
established by the Board of Trustees to assure that such exchanges do not dis-
advantage the Fund and its shareholders.
For Federal income tax purposes an exchange between Portfolios is a taxable
event, and, accordingly, a capital gain or loss may be realized. In a revenue
ruling relating to circumstances similar to the Fund's, an exchange between
series of a Fund was also deemed to be a taxable event. It is likely, there-
fore, that a capital gain or loss would be realized on an exchange between
Portfolios; you may want to consult your tax adviser for further information
in this regard. The exchange privilege may be modified or terminated at any
time.
TRANSFER OF SHARES
Shareholders may transfer shares to another person by making a written re-
quest to the Fund. The request should clearly identify the account and number
of shares to be transferred, and include the signature of all registered own-
ers and all stock certificates, if any, which are subject to the transfer. The
signature on the letter of request, the stock certificate or any stock power
must be guaranteed in the same manner as described under "Redemption of
Shares." As in the case of redemptions, the written request must be received
in good order before any transfer can be made.
INVESTMENT LIMITATIONS
The following limitations supplement those set forth in each Prospectus of
the Portfolio. Whenever an investment limitation sets forth a percentage limi-
tation on investment or utilization of assets, such limitation shall be deter-
mined immediately after and as a result of a Portfolio's acquisition of such
security or other asset. Accordingly, any later increase or decrease resulting
from a change in values, net assets or other circumstances will not be consid-
ered when determining whether the investment complies with a Portfolio's in-
vestment limitations. Investment limitations (1), (2), (3), (4) and (5) are
classified as fundamental. A Portfolio's fundamental investment limitations
cannot be changed without approval by a "majority of the outstanding shares"
(as defined in the 1940 Act) of the Portfolio. The Portfolio will not:
(1) invest in physical commodities or contracts on physical commodities;
(2) purchase or sell real estate or real estate limited partnerships, al-
though it may purchase and sell securities of companies which deal in
real estate and may purchase and sell securities which are secured by
interests in real estate;
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(3) make loans except (i) by purchasing debt securities in accordance
with its investment objectives and (ii) by lending its portfolio se-
curities to banks, brokers, dealers and other financial institutions
so long as such loans are not inconsistent with the 1940 Act or the
rules and regulations or interpretations of the Commission thereun-
der;
(4) underwrite the securities of other issuers;
(5) issue senior securities, as defined in the 1940 Act, except that this
restriction shall not be deemed to prohibit the Portfolio from (i)
making any permitted borrowings, mortgages or pledges, or (ii) enter-
ing into repurchase transactions;
(6) purchase on margin or sell short;
(7) invest more than an aggregate of 15% of the net assets of the Portfo-
lio, determined at the time of investment, in securities subject to
legal or contractual restrictions on resale or securities for which
there are no readily available markets; and
(8) invest for the purpose of exercising control over management of any
company.
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MANAGEMENT OF THE FUND
TRUSTEES AND OFFICERS
The Officers of the Fund manage its day-to-day operations and are responsi-
ble to the Fund's Board of Trustees. The Trustees set broad policies for the
Fund and elect its Officers. The following is a list of the Trustees and Offi-
cers of the Fund and a brief statement of their present positions and princi-
pal occupations during the past five years.
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JOHN T. BENNETT, JR. Trustee of the Fund; President of Squam
College Road--RFD 3 Investment Management Company, Inc. and
Meredith, NH 03253 Great Island Investment Company, Inc.;
Age 67 President of Bennett Management Company
from 1988 to 1993.
PHILIP D. ENGLISH Trustee of the Fund; President and Chief
16 West Madison Street Executive Officer of Broventure Company,
Baltimore, MD 21201 Inc.; Chairman of the Board of Chektec
Age 48 Corporation and Cyber Scientific, Inc.
WILLIAM A. HUMENUK Trustee of the Fund; Partner in the
4000 Bell Atlantic Tower Philadelphia office of the law firm
1717 Arch Street Dechert Price & Rhoads; Director, Hofler
Philadelphia, PA 19103 Corp.
Age 54
NORTON H. REAMER* Trustee, President and Chairman of the
One International Place Fund; President, Chief Executive Officer
Boston, MA 02110 and a Director of United Asset Manage-
Age 60 ment Corporation; Director, Partner or
Trustee of each of the Investment Compa-
nies of the Eaton Vance Group of Mutual
Funds.
PETER M. WHITMAN, JR.* Trustee of the Fund; President and Chief
One Financial Center Investment Officer of Dewey Square In-
Boston, MA 02111 vestors Corporation ("DSI") since 1988;
Age 53 Director and Chief Executive Officer of
H. T. Investors, Inc., formerly a sub-
sidiary of DSI.
WILLIAM H. PARK* Vice President of the Fund; Executive
One International Place Vice President and Chief Financial Offi-
Boston, MA 02110 cer of United Asset Management Corpora-
Age 49 tion.
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GARY L. FRENCH* Treasurer of the Fund; President of UAM
211 Congress Street Fund Services, Inc. and UAM Fund Dis-
Boston, MA 02110 tributors, Inc.; formerly Vice President
Age 45 of Operations, Development and Control
of Fidelity Investment in 1995; Trea-
surer of the Fidelity Group of Mutual
Funds from 1991 to February 1995.
MICHAEL E. DEFAO* Secretary of the Fund; Vice President
211 Congress Street and General Counsel of UAM Fund Servic-
Boston, MA 02110 es, Inc. and UAM Fund Distributors,
Age 28 Inc.; Associate Attorney of Ropes & Gray
(a law firm) from 1993 to February 1995.
ROBERT R. FLAHERTY* Assistant Treasurer of the Fund; Vice
211 Congress Street President of UAM Fund Services, Inc.;
Boston, MA 02110 formerly Manager of Fund Administration
Age 32 and Compliance of the Chase Global Funds
Services Company from 1995 to 1996,
Deloitte & Touche LLP from 1985 to 1995,
Senior Manager.
KARL O. HARTMANN* Assistant Secretary of the Fund; Senior
Treasurer 73 Tremont Street Vice President and General Counsel of
Boston, MA 02108 Chase Global Funds Services Company; Se-
Age 41 nior Vice President, Secretary and Gen-
eral Counsel of Leland, O'Brien, Rubin-
stein Associates, Inc., from November
1990 to November 1991.
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* These people are deemed to be "interested persons" of the Fund as that
term is defined in the 1940 Act.
As of December 6, 1996, the Trustees and Officers of the Fund owned less than
1% of the Fund's outstanding shares.
REMUNERATION OF TRUSTEES AND OFFICERS
The Fund pays each Trustee, who is not also an officer or affiliated person,
a $150 quarterly retainer fee per active Portfolio which currently amounts to
$1,050 per quarter. In addition, each unaffiliated Trustee receives a $2,000
meeting fee which is aggregated for all the Trustees and allocated proportion-
ately among the Portfolios of the Fund and UAM Funds, Inc. and reimbursement
for travel and other expenses incurred while attending Board meetings. Trust-
ees who are also officers or affiliated persons receive no remuneration for
their service as Trustees. The Fund's officers and employees are paid by ei-
ther the Adviser, United Asset Management Corporation ("UAM"), the Administra-
tor or the Sub-Administrator and receive no compensation from the Fund. As of
July 31, 1996, the Trustees and officers of the Fund owned less than 1% of the
Fund's outstanding shares. The
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following table shows aggregate compensation paid to each of the Fund's Inde-
pendent Trustees by the Fund, as well as total compensation from the Fund, UAM
Funds, Inc. and AEW Commercial Mortgage Securities Fund, Inc. (collectively
the "Fund Complex"), respectively, in the fiscal year ended April 30, 1996.
COMPENSATION TABLE
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(1) (2) (3) (4) (5)
PENSION OR TOTAL COMPENSATION
AGGREGATE RETIREMENT BENEFITS ESTIMATED ANNUAL FROM REGISTRANT AND
NAME OF PERSON, COMPENSATION ACCRUED AS PART OF BENEFITS UPON FUND COMPLEX
POSITION FROM REGISTRANT FUND EXPENSES RETIREMENT PAID TO TRUSTEES
--------------- --------------- ------------------- ---------------- -------------------
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John T. Bennett, Jr.,
Trustee................ $3,396 0 0 $29,600
J. Edward Day,
Former Trustee......... $3,396 0 0 $29,600
Philip D. English,
Trustee................ $3,396 0 0 $29,600
William A. Humenuk,
Trustee................ $3,396 0 0 $29,600
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PRINCIPAL HOLDER OF SECURITIES
As of July 31, 1996, the following persons or organizations held of record
or beneficially 5% or more of the shares of the Portfolio as noted.
BHM&S Total Return Bond Portfolio Institutional Class Shares: Hartnat & Co.,
F/B/O Barrow Hanley, P.O. Box 4044, Boston, MA, 99.9%*.
BHM&S Total Return Bond Portfolio Institutional Service Class Shares:
Hartnat & Co., P.O. Box 4044, Boston, MA, 62.4%*; Hartnat & Co., F/B/O Lillick
and Charles, P.O. Box 4044, Boston, MA, 16.3%*; Hartnat & Co., F/B/O Allied
Waste, P.O. Box 4044, Boston, MA, 12.3%*.
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* Denotes shares held by a trustee or other fiduciary for which beneficial
ownership is disclaimed or presumed disclaimed.
The persons or organizations listed above as owning 25% or more of the out-
standing shares of the Portfolio may be presumed to "control" (as that term is
defined in the 1940 Act) te Portfolio. As a result, those persons or organiza-
tions could have the ability to vote a majority of the shares of the Portfolio
on any matter requiring the approval of shareholders of the Portfolio.
INVESTMENT ADVISER
CONTROL OF ADVISER
Barrow, Hanley, Mewhinney & Strauss, Inc. is a wholly-owned subsidiary of UAM,
a holding company incorporated in Delaware in December 1940 for the
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purpose of acquiring and owning firms engaged primarily in institutional in-
vestment management. Since its first acquisition in August 1983, UAM has ac-
quired or organized approximately 45 such wholly-owned affiliated firms (the
"UAM Affiliated Firms"). UAM believes that permitting UAM Affiliated Firms to
retain control over their investment advisory decisions is necessary to allow
them to continue to provide investment management services that are intended
to meet the particular needs of their respective clients.
Accordingly, after acquisition by UAM, UAM Affiliated Firms continue to op-
erate under their own firm name, with their own leadership and individual in-
vestment philosophy and approach. Each UAM Affiliated Firm manages its own
business independently on a day-to-day basis. Investment strategies employed
and securities selected by UAM Affiliated Firms are separately chosen by each
of them. Several UAM Affiliated Firms also act as investment advisers to sepa-
rate series or Portfolios of the UAM Funds, Inc., a registered investment com-
pany.
ADVISORY FEES
As compensation for services rendered by the Adviser under the Investment
Advisory Agreement, the Portfolio pays the Adviser an annual fee in monthly
installments, calculated by applying the following annual percentage rate to
the Portfolio's average daily net assets for the month:
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BHM&S Total Return Bond Portfolio...................................... 0.35%
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From November 1, 1995 (date of commencement) to April 30, 1996, the BHM&S
Total Return Bond Portfolio paid advisory fees of $0. During this period, the
Adviser voluntarily waived advisory fees of $6,000. Until December 31, 1997,
the Adviser has voluntarily agreed to waive all or a portion of its advisory
fees and to assume operating expenses, otherwise payable by the Portfolio, if
necessary, in order to keep the Portfolio's total annual operating expenses,
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.
SERVICE AND DISTRIBUTION PLANS
As stated in the Portfolio's Service Class Shares Prospectus, UAM Fund Dis-
tributors, Inc. (the "Distributor") may enter into agreements with broker-
dealers and other financial institutions ("Service Agents"), pursuant to which
they will provide administrative support services to Service Class sharehold-
ers who are their customers ("Customers") in consideration of the Fund's pay-
ment of 0.25% (on an annualized basis) of the average daily net asset value of
the Service Class Shares held by the Service Agent for the benefit of its Cus-
tomers. Such services include:
(a) acting as the sole shareholder of record and nominee for beneficial
owners;
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(b) maintaining account records for such beneficial owners of the Fund's
shares;
(c) opening and closing accounts;
(d) answering questions and handling correspondence from shareholders
about their accounts;
(e) processing shareholder orders to purchase, redeem and exchange shares;
(f) handling the transmission of funds representing the purchase price or
redemption proceeds;
(g) issuing confirmations for transactions in the Fund's shares by share-
holders;
(h) distributing current copies of prospectuses, statements of additional
information and shareholder reports;
(i) assisting customers in completing application forms, selecting divi-
dend and other account options and opening any necessary custody ac-
counts;
(j) providing account maintenance and accounting support for all transac-
tions; and
(k) performing such additional shareholder services as may be agreed upon
by the Fund and the Service Agent, provided that any such additional
shareholder services must constitute a permissible non-banking activ-
ity in accordance with the then current regulations of, and interpre-
tations thereof by, the Board of Governors of the Federal Reserve
System, if applicable.
Each agreement with a Service Agent is governed by a Shareholder Service
Plan (the "Service Plan") that has been adopted by the Fund's Board of Trust-
ees. Pursuant to the Service Plan, the Board of Trustees reviews, at least
quarterly, a written report of the amounts expended under each agreement with
Service Agents and the purposes for which the expenditures were made. In addi-
tion, arrangements with Service Agents must be approved annually by a majority
of the Fund's Trustees, including a majority of the Trustees who are not "in-
terested persons" of the Fund as defined in the 1940 Act and have no direct or
indirect financial interest in such arrangements.
The Board of Trustees has approved the arrangements with Service Agents
based on information provided by the Fund's service contractors that there is
a reasonable likelihood that the arrangements will benefit the Fund and its
shareholders by affording the Fund greater flexibility in connection with the
servicing of the accounts of the beneficial owners of its shares in an effi-
cient manner. Any material amendment to the Fund's arrangements with Service
Agents must be approved by a majority of the Fund's Board of Trustees (includ-
ing a majority of the disinterested Trustees). So long as the arrangements
with Service Agents are in effect, the
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selection and nomination of the members of the Fund's Board of Trustees who
are not "interested persons" (as defined in the 1940 Act) of the Fund will be
committed to the discretion of such non-interested Trustees.
Pursuant to Rule 12b-1 under the 1940 Act, the Fund has adopted a Distribu-
tion Plan for the Service Class Shares of the Fund (the "Distribution Plan").
The Distribution Plan permits the Fund to pay for certain distribution, promo-
tional and related expenses involved in the marketing of only the Service
Class Shares.
The Distribution Plan permits the Service Class Shares, pursuant to the Dis-
tribution Agreement, to pay a monthly fee to the Distributor for its services
and expenses in distributing and promoting sales of the Service Class Shares.
These expenses include, among other things, preparing and distributing adver-
tisements, sales literature and prospectuses and reports used for sales pur-
poses, compensating sales and marketing personnel, and paying distribution and
maintenance fees to securities brokers and dealers who enter into agreements
with the Distributor. In addition, the Service Class Shares may make payments
directly to other unaffiliated parties who either aid in the distribution of
their shares or provide services to the Class.
The maximum annual aggregate fee payable by the Fund under the Service and
Distribution Plans (the "Plans"), is 0.75% of the Service Class Shares' aver-
age daily net assets for the year. The Fund's Board of Trustees may reduce
this amount at any time. Although the maximum fee payable under the 12b-1 Plan
relating to the Service Class Shares is 0.75% of average daily net assets of
such class, the Board of Trustees has determined that the annual fee, payable
on a monthly basis, under the Plans relating to the Service Class Shares, cur-
rently cannot exceed 0.50% of the average daily net assets represented by the
Service Class. While the current fee which will be payable under the Service
Plan has been set at 0.25%, the Plans permit a full 0.75% on all assets to be
paid at any time following appropriate Board approval.
All of the distribution expenses incurred by the Distributor and others,
such as broker/dealers, in excess of the amount paid by the Service Class
Shares will be borne by such persons without any reimbursement from such Clas-
ses. Subject to seeking best price and execution, the Fund may, from time to
time, buy or sell portfolio securities from or to firms which receive payments
under the Plans. From time to time, the Distributor may pay additional amounts
from its own resources to dealers for aid in distribution or for aid in pro-
viding administrative services to shareholders.
The Plans, the Distribution Agreement and the form of dealer's and services
agreements have all been approved by the Board of Trustees of the Fund, in-
cluding a majority of the Trustees who are not "interested persons" (as de-
fined in the 1940 Act) of the Fund and who have no direct or indirect finan-
cial interest in the Plans
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or any related agreements, by vote cast in person at a meeting duly called for
the purpose of voting on the Plans and such Agreements. Continuation of the
Plans, the Distribution Agreement and the related agreements must be approved
annually by the Board of Trustees in the same manner, as specified above.
Each year the Trustees must determine whether continuation of the Plans is
in the best interest of the shareholders of Service Class Shares and that
there is a reasonable likelihood of the Plans providing a benefit to the
Class. The Plans, the Distribution Agreement and the related agreements with
any broker-dealer or others relating to the Class may be terminated at any
time without penalty by a majority of those Trustees who are not "interested
persons" or by a majority vote of the outstanding voting securities of the
Class. Any amendment materially increasing the maximum percentage payable un-
der the Plans must likewise be approved by a majority vote of the relevant
Class' outstanding voting securities, as well as by a majority vote of those
Trustees who are not "interested persons." Also, any other material amendment
to the Plans must be approved by a majority vote of the Trustees including a
majority of the Trustees of the Fund having no interest in the Plans. In addi-
tion, in order for the Plans to remain effective, the selection and nomination
of Trustees who are not "interested persons" of the Fund must be effected by
the Trustees who themselves are not "interested persons" and who have no di-
rect or indirect financial interest in the Plans. Persons authorized to make
payments under the Plans must provide written reports at least quarterly to
the Board of Trustees for their review. The National Association of Securities
Dealers, Inc. has adopted amendments to its Rules of Fair Practice relating to
investment company sales charges. The Fund and the Distributor intend to oper-
ate in compliance with these rules.
Fees paid to Service Agents on behalf of the Portfolio for the fiscal year
ended April 30, 1996 totaled $1,369.
PORTFOLIO TRANSACTIONS
The Investment Advisory Agreement authorizes the Adviser to select the bro-
kers or dealers that will execute the purchases and sales of investment secu-
rities for the Portfolio and directs the Adviser to use its best efforts to
obtain the best execution with respect to all transactions for the Portfolio.
The Adviser may, however, consistent with the interests of the Portfolio, se-
lect brokers on the basis of the research, statistical and pricing services
they provide to the Portfolio. Information and research received from such
brokers will be in addition to, and not in lieu of, the services required to
be performed by the Adviser under the Investment Advisory Agreements. A com-
mission paid to such brokers may be higher than that which another qualified
broker would have charged for effecting the same transaction, provided that
such commissions are paid in compliance with the Securities Exchange Act of
1934, as amended, and that the Adviser determines in good faith
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that such commission is reasonable in terms either of the transaction or the
overall responsibility of the Adviser to the Portfolio and the Adviser's other
clients.
It is not the Fund's practice to allocate brokerage or effect principal
transactions with dealers on the basis of sales of shares which may be made
through broker-dealer firms. However, the Adviser may place portfolio orders
with qualified broker-dealers who refer clients to the Adviser. During the
fiscal years ended April 30, 1995 and April 30, 1996, the entire Fund paid
brokerage commissions of approximately $15,000 and $39,000, respectively.
Some securities considered for investment by the Portfolio may also be ap-
propriate for other clients served by the Adviser. If purchases or sales of
securities consistent with the investment policies of a Portfolio and one or
more of these other clients served by the Adviser is considered at or about
the same time, transactions in such securities will be allocated among the
Portfolio and clients in a manner deemed fair and reasonable by the Adviser.
Although there is no specified formula for allocating such transactions, the
various allocation methods used by the Adviser, and the results of such allo-
cations, are subject to periodic review by the Fund's Board of Trustees.
ADMINISTRATIVE SERVICES
As stated in the Prospectus, the Board of Trustees of the Fund approved a
new Fund Administration Agreement between UAM Fund Services, Inc., a wholly
owned subsidiary of UAM, and the Fund. The Fund's Trustees also approved a Mu-
tual Fund Services Agreement between UAM Fund Services, Inc. and Chase Global
Funds Services Company. The services provided by UAM Fund Services, Inc. and
Chase Global Funds Services Company and the basis of the fees payable by the
Fund under the Fund Administration Agreement are described in the Portfolios'
Prospectus. Prior to April 15, 1996, Chase Global Funds Services Company or
its predecessor, Mutual Funds Service Company, provided certain administrative
services to the Fund under an Administration Agreement between the Fund and
U.S. Trust Company of New York.
The basis of the fees paid to the Sub-Administrator for the period
November 1, 1995 to April 14, 1996 was as follows: the Fund paid a monthly fee
for its services which on an annualized basis equaled 0.20% of the first $200
million in combined assets; plus 0.12% of the next $800 million in combined
assets; plus 0.08% on assets over $1 billion but less than $3 billion; plus
0.06% on assets over $3 billion. The fees were allocated among the Portfolios
on the basis of their relative assets and were subject to a designated minimum
fee schedule per Portfolio, which ranged from $2,000 per month upon inception
of a Portfolio to $70,000 annually after two years. For the period ended April
30, 1996, administrative services fees paid to the Sub-Administrator by the
BHM&S Total Return Bond
14
<PAGE>
Portfolio totaled $22,073. For the period April 15, 1996 to April 30, 1996,
UAM Fund Services, Inc. earned $1,927 from the BHM&S Total Return Bond Portfo-
lio as Administrator. The services provided by the Administrator and the Sub-
Administrator and the fees payable to both effective April 15, 1996 are de-
scribed in the Portfolio's Prospectuses.
PERFORMANCE CALCULATIONS
PERFORMANCE
The Portfolio may from time to time quote various performance figures to il-
lustrate past performance. Performance quotations by investment companies are
subject to rules adopted by the Commission, which require the use of standard-
ized performance quotations or, alternatively, that every non-standardized
performance quotation furnished by each class of the Fund be accompanied by
certain standardized performance information computed as required by the Com-
mission. Current yield and average annual compounded total return quotations
used by the Fund are based on the standardized methods of computing perfor-
mance mandated by the Commission. An explanation of those methods used to com-
pute or express performance follows.
YIELD
Current yield reflects the income per share earned by a Portfolio's invest-
ment. The current yield of a Portfolio is determined by dividing the net in-
vestment income per share earned during a 30-day base period by the maximum
offering price per share on the last day of the period and annualizing the re-
sult. Expenses accrued for the period include any fees charged to all share-
holders during the base period. Since Service Class Shares of a Portfolio bear
additional service and distribution expenses, the yield of the Service Class
Shares of a Portfolio will generally be lower than that of the Institutional
Class Shares of the same Portfolio. The yield for the BHM&S Total Return Bond
Portfolio Institutional Class Shares and Service Class Shares for the 30-day
period ended on October 31, 1996 was 5.52% and 5.43%, respectively.
A yield figure is obtained using the following formula:
Yield = 2[(a - b + 1)/6/ - 1]
-----
cd
where:
a = dividends and interest earned during the period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of shares outstanding during the period
that were entitled to receive income distributions
d = the maximum offering price per share on the last day of the period.
15
<PAGE>
TOTAL RETURN
The average annual total return of a Portfolio is determined by finding the
average annual compounded rates of return over 1, 5 and 10 year periods that
would equate an initial hypothetical $1,000 investment to its ending redeem-
able value. The calculation assumes that all dividends and distributions are
reinvested when paid. The quotation assumes the amount was completely redeemed
at the end of each 1, 5 and 10 year period and the deduction of all applicable
Fund expenses on an annual basis. Since Service Class Shares of a Portfolio
bear additional service and distribution expenses, the average annual total
return of the Service Class Shares of a Portfolio will generally be lower than
that of the Institutional Class Shares of the same Portfolio.
These figures are calculated according to the following formula:
P(1 + T)n = ERV
where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment made at the
beginning of the 1, 5 or 10 year periods at the end of the 1, 5 or 10
year periods (or fractional portion thereof).
The average annual total rate of return for the BHM&S Total Return Bond
Portfolio from inception on November 1, 1995 to October 31, 1996 is 4.00% for
the Institutional Class Shares and 3.65% for the Service Class Shares.
COMPARISONS
To help investors better evaluate how an investment in either Portfolio of
the Fund might satisfy their investment objective, advertisements regarding
the Fund may discuss various measures of Fund performance as reported by vari-
ous financial publications. Advertisements may also compare performance (as
calculated above) to performance as reported by other investments, indices and
averages. The following publications, indices and averages may be used:
(a) Dow Jones Composite Average or its component averages -- an unmanaged
index composed of 30 blue-chip industrial corporation stocks (Dow
Jones Industrial Average), 15 utilities company stocks and 20 trans-
portation stocks. Comparisons of performance assume reinvestment of
dividends.
(b) Standard & Poor's 500 Stock Index or its component indices -- an un-
managed index composed of 400 industrial stocks, 40 financial stocks,
40 utilities stocks and 20 transportation stocks. Comparisons of per-
formance assume reinvestment of dividend.
16
<PAGE>
(c) The New York Stock Exchange composite or component indices -- unman-
aged indices of all industrial, utilities, transportation and finance
stocks listed on the New York Stock Exchange.
(d) Wilshire 5000 Equity index or its component indices -- represents the
return on the market value of all common equity securities for which
daily pricing is available. Comparisons of performance assume rein-
vestment of dividends.
(e) Lipper -- Mutual Fund Performance Analysis and Lipper -- Fixed Income
Fund Performance Analysis -- measure total return and average current
yield for the mutual fund industry. Rank individual mutual fund per-
formance over specified time periods, assuming reinvestment of all
distributions, exclusive of any applicable sales charges.
(f) Morgan Stanley Capital International EAFE Index and World Index -- re-
spectively, arithmetic, market value-weighted averages of the perfor-
mance of over 900 securities listed on the stock exchanges of coun-
tries in Europe, Australia and the Far East, and over 1,400 securities
listed on the stock exchanges of these continents, plus North America.
(g) Goldman Sachs 100 Convertible Bond Index -- currently includes 67
bonds and 33 preferred. The original list of names was generated by
screening for convertible issues of 100 million or greater in market
capitalization. The index is priced monthly.
(h) Salomon Brothers GNMA Index -- includes pools of mortgages originated
by private lenders and guaranteed by the mortgage pools of the Govern-
ment National Mortgage Association.
(i) Salomon Brothers High Grade Corporate Bond Index -- consists of pub-
licly issued, non-convertible corporate bonds rated AA or AAA. It is a
value-weighted, total return index, including approximately 800 issues
with maturities of 12 years or greater.
(j) Salomon Brothers Broad Investment Grade Bond -- is a market-weighted
index that contains approximately 4,700 individually priced investment
grade corporate bonds rated BBB or better, U.S. Treasury/agency issues
and mortgage pass through securities.
(k) Lehman Brothers Long-Term Treasury Bond -- is composed of all bonds
covered by the Lehman Brothers Treasury Bond Index with maturities of
10 years or greater.
(l) NASDAQ Industrial Index -- is composed of more than 3,000 industrial
issues. It is a value-weighted index calculated on price change only
and does not include income.
(m) Value Line -- composed of over 1,600 stocks in the Value Line Invest-
ment Survey.
17
<PAGE>
(n) Russell 2000 -- composed of the 2,000 smallest stocks in the Russell
3000, a market value-weighted index of the 3,000 largest U.S. public-
ly-traded companies.
(o) Composite indices -- 60% Standard & Poor's 500 Stock Index, 30% Lehman
Brothers Long-Term Treasury Bond and 10% U.S. Treasury Bills; 70%
Standard & Poor's 500 Stock Index and 30% NASDAQ Industrial Index; 35%
Standard & Poor's 500 Stock Index and 65% Salomon Brothers High Grade
Bond Index; all stocks on the NASDAQ system exclusive of those traded
on an exchange, and 65% Standard & Poor's 500 Stock Index and 35% Sal-
omon Brothers High Grade Bond Index.
(p) CDA Mutual Fund Report published by CDA Investment Technologies,
Inc. -- analyzes price, current yield, risk, total return and average
rate of return (average compounded growth rate) over specified time
periods for the mutual fund industry.
(q) Mutual Fund Source Book published by Morningstar, Inc. -- analyzes
price, yield, risk and total return for equity funds.
(r) Financial publications: Business Week, Changing Times, Financial
World, Forbes, Fortune, Money, Barron's, Consumer's Digest, Financial
Times, Global Investor, Wall Street Journal and Weisenberger Invest-
ment Companies Service -- publications that rate fund performance over
specified time periods.
(s) Consumer Price Index (or Cost of Living Index), published by the U.S.
Bureau of Labor Statistics -- a statistical measure of change over
time in the price of goods and services in major expenditure groups.
(t) Stocks, Bonds, Bills and Inflation, published by Ibbotson Associ-
ates -- historical measure of yield, price and total return for com-
mon and small company stock, long-term government bonds, Treasury
bills and inflation.
(u) Savings and Loan Historical Interest Rates -- as published by the U.S.
Savings & Loan League Fact Book.
(v) Lehman Brothers Intermediate Government/Corporate Index is an unman-
aged 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 oth-
ers. 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 non-
convertible corporate debt. Also included are Yankee Bonds and noncon-
vertible debt issued by or guaranteed by foreign or international gov-
ernments and agencies. Any security downgraded during the month is
held in the index
18
<PAGE>
until month-end and then removed. All returns are market value
weighted inclusive of accrued income.
(w) Lehman Brothers Government/Corporate Index -- is a combination of the
Government and Corporate Bond Indices. The Government Index includes
public obligations of the U.S. Treasury, issues of Government agen-
cies, and corporate debt backed by the U.S. Government. The Corporate
Bond Index includes fixed-rate nonconvertible corporate debt. Also in-
cluded are Yankee Bonds and nonconvertible debt issued by or guaran-
teed by foreign or international governments and agencies. All issues
are investment grade (BBB) or higher, with maturities of at least one
year and an outstanding par value of at least $100 million for U.S.
Government issues and $25 million for others. Any security downgraded
during the month is held in the index until month-end and then re-
moved. All returns are market value weighted inclusive of accrued in-
come.
(x) Lehman Brothers Aggregate Index -- is a fixed income market value-
weighted index that combines the Lehman Brothers Government/ Corporate
Index and the Lehman Brothers Mortgage-Backed Securities Index. It in-
cludes fixed rate issues of investment grade (BBB) or higher, with ma-
turities of at least one year and outstanding par values of at least
$100 million for U.S. Government issues and $25 million for others.
(y) Historical data supplied by the research departments of First Boston
Corporation; the J.P. Morgan companies; Salomon Brothers; Merrill
Lynch, Pierce, Fenner & Smith; Lehman Brothers, Inc. and Bloomberg
L.P.
In assessing such comparisons of performance, an investor should keep in
mind that the composition of the investments in the reported indices
and averages is not identical to the composition of investments in a
Portfolio, that the averages are generally unmanaged, and that the
items included in the calculations of such averages may not be identi-
cal to the formula used by the Portfolio to calculate its performance.
In addition, there can be no assurance that the Portfolio will con-
tinue this performance as compared to such other averages.
GENERAL INFORMATION
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Fund was organized under the name The Regis Fund II as a Delaware busi-
ness trust on May 18, 1994. On October 31, 1995, the name of the Fund was
changed to "UAM Funds Trust." The Fund's principal office is located at One
International Place, Boston, MA 02110; however, all investor correspondence
should be directed to the Fund at UAM Funds Service Center, c/o Chase Global
Funds Services Company, P.O. Box 2798, Boston, MA 02208-2798. The Fund's
Agreement and Declaration of Trust permits the Fund to issue an unlimited num-
ber of shares of beneficial interest, without par value. The Trustees have the
power to
19
<PAGE>
designate one or more series ("Portfolios") or classes of shares of beneficial
interest without further action by shareholders.
On each matter submitted to a vote of the Shareholders, each holder of a
share shall be entitled to one vote for each whole share and a fractional vote
for each fractional share standing in his name on the books of the Fund.
In the event of liquidation of the Fund, the holders of the Shares of each
Portfolio or any class thereof that has been established and designated shall
be entitled to receive, when and as declared by the Trustees, the excess of
the assets belonging to that Portfolio, or in the case of a class, belonging
to that Portfolio and allocable to that class, over the liabilities belonging
to that Portfolio or class. The assets so distributable to the holders of
Shares of any particular Portfolio or class thereof shall be distributed to
the holders in proportion to the number of Shares of that Portfolio or class
thereof held by them and recorded on the books of the Fund. The liquidation of
any Portfolio or class thereof may be authorized at any time by vote of a ma-
jority of the Trustees then in office.
Shareholders of both Classes of the Fund's Portfolios have no pre-emptive or
other rights to subscribe to any additional Shares or other securities issued
by the Fund or any Portfolio, except as the Trustees in their sole discretion
shall have determined by vote. Both Institutional Class and Service Class
Shares represent an interest in the same assets of a Portfolio and are identi-
cal in all respects except that the Service Class Shares bear certain expenses
related to shareholder servicing and the distribution of such shares, and have
exclusive voting rights with respect to matters relating to such distribution
expenditures.
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
The Fund's policy is to distribute substantially all of the Portfolio's net
investment income, if any, together with any net realized capital gains in the
amount and at the times that will avoid both income (including capital gains)
taxes incurred and the imposition of the Federal excise tax on undistributed
income and capital gains. The amounts of any income dividends or capital gains
distributions cannot be predicted. See discussion under "Dividends, Capital
Gains Distributions and Taxes" in the Prospectuses.
Any dividend or distribution paid shortly after the purchase of shares of
the Portfolio by an investor may have the effect of reducing the per share net
asset value of the Portfolio by the per share amount of the dividend or dis-
tribution. Furthermore, such dividends or distributions, although in effect a
return of capital, are subject to income taxes as set forth in the Prospectus-
es.
As set forth in the Prospectuses, unless the shareholder elects otherwise in
writing, all dividend and capital gains distributions are automatically re-
ceived in additional shares of the Portfolio of the Fund at net asset value
(as of the business
20
<PAGE>
day following the record date). This will remain in effect until the Fund is
notified by the shareholder in writing at least three days prior to the record
date that either the Income Option (income dividends in cash and capital gains
distributions in additional shares at net asset value) or the Cash Option
(both income dividends and capital gains distributions in cash) has been
elected. An account statement is sent to shareholders whenever an income divi-
dend or capital gains distribution is paid.
The Portfolio will be treated as a separate entity (and hence as a separate
"regulated investment company") for Federal tax purposes. Any net capital
gains recognized by the Portfolio will be distributed to its investors without
need to offset (for Federal income tax purposes) such gains against any net
capital losses realized by another Portfolio.
CODE OF ETHICS
The Fund has adopted a Code of Ethics which restricts to a certain extent
personal transactions by access persons of the Fund and imposes certain dis-
closure and reporting obligations.
FEDERAL TAXES
In order for the Portfolio to continue to qualify for Federal income tax
treatment as a regulated investment company under the Internal Revenue Code of
1986, as amended (the "Code"), at least 90% of the Portfolio's gross income
for a taxable year must be derived from certain qualifying income, i.e., divi-
dends, interest, income derived from loans of securities and gains from the
sale or other disposition of stock, securities or other related income, de-
rived with respect to its business investing in stock or securities. Qualifi-
cation as a regulated investment company also requires that less than 30% of a
Portfolio's gross income be derived from the sale or other disposition of
stock or securities held less than three months.
The Portfolio will distribute to shareholders annually any net capital gains
which have been recognized for Federal income tax purposes (including
unrealized gains at the end of the Portfolio's taxable year on futures trans-
actions). Such distribution will be combined with distributions of capital
gains realized on the Portfolio's other investments, and shareholders will be
advised as to the character of the payment.
FINANCIAL STATEMENTS
The Financial Statements of the BHM&S Total Return Bond Portfolio for the
period from inception on November 1, 1995 to April 30, 1996, and the six
months ended October 31, 1996 and the Financial Highlights for the respective
periods presented which appear in the Portfolio's 1996 Annual Financial State-
ments and the report thereon of Price Waterhouse LLP, the Fund's independent
accountants, also appearing therein and in the Semi-Annual Report to Share-
holders are attached to this SAI.
21
<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.
F-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.
F-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.
F-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.
F-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 ex-
penses assumed by the Adviser during the period.
+++ Per share amounts for the period ended April 30, 1996 are based on average
outstanding shares.
# The Ratio of 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 In-
stitutional Service Class Shares, respectively, for the period ended April
30, 1996.
The accompanying notes are an integral part of the financial statements.
F-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.
F-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
F-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.
F-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 state-
ments 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 (commence-
ment of operations) through April 30, 1996, in conformity with generally ac-
cepted accounting principles. These financial statements and financial high-
lights (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 custo-
dian, provides a reasonable basis for the opinion expressed above.
Price Waterhouse LLP
Boston, Massachusetts
June 14, 1996
F-13
<PAGE>
BHM&S TOTAL RETURN BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS
October 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
- --------------------------------------------------------------------------------
<S> <C> <C>
CORPORATE BONDS & NOTES (20.7%)
- --------------------------------------------------------------------------------
BANKS (3.2%)
Chemical NY Corp.
9.75%, 6/15/99......................................... $ 205,000 $ 221,466
NationsBank Corp. Senior Notes
7.00%, 9/15/01......................................... 250,000 254,807
-----------
476,273
- --------------------------------------------------------------------------------
FINANCIAL (6.6%)
Associates Corp. of North America
6.57%, 10/4/99......................................... 200,000 202,160
Countrywide Funding Corp., Series E
7.20%, 10/30/06........................................ 500,000 497,435
Ford Motor Credit Corp.
6.375%, 9/15/99........................................ 200,000 200,492
General Motors Acceptance Corp.
6.65%, 5/24/00......................................... 100,000 100,634
-----------
1,000,721
- --------------------------------------------------------------------------------
INDUSTRIAL (8.1%)
American Home Products Corp.
7.70%, 2/15/00......................................... 100,000 104,233
Atlantic Richfield Co.
8.50%, 4/1/12.......................................... 225,000 252,979
Dresser Industries, Inc.
6.25%, 6/1/00.......................................... 200,000 199,374
Sears Roebuck Acceptance
6.82%, 10/17/02........................................ 500,000 502,955
Tenneco Inc.
10.00%, 8/1/98......................................... 100,000 106,313
Texaco Capital Corp.
6.19%, 7/9/03.......................................... 50,000 48,441
-----------
1,214,295
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-3
<PAGE>
BHM&S TOTAL RETURN BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
October 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
- --------------------------------------------------------------------------------
<S> <C> <C>
CORPORATE BONDS & NOTES--(CONTINUED)
- --------------------------------------------------------------------------------
TRANSPORTATION (2.0%)
Federal Express
9.65%, 6/15/12......................................... $ 250,000 $ 297,502
- --------------------------------------------------------------------------------
UTILITIES (0.8%)
Southern California Edison
8.25%, 2/1/00.......................................... 115,000 120,529
- --------------------------------------------------------------------------------
TOTAL CORPORATE BONDS & NOTES
(COST $3,092,190)...................................... 3,109,320
- --------------------------------------------------------------------------------
U.S. GOVERNMENT SECURITIES (38.9%)
- --------------------------------------------------------------------------------
U.S. TREASURY BONDS (20.0%)
10.375%, 11/15/12...................................... 700,000 906,829
8.75%, 5/15/17......................................... 1,060,000 1,297,175
8.125%, 8/15/19........................................ 700,000 811,013
-----------
3,015,017
- --------------------------------------------------------------------------------
U.S. TREASURY NOTES (18.9%)
7.125%, 9/30/99........................................ 1,000,000 1,032,030
7.125%, 2/29/00........................................ 1,745,000 1,804,976
-----------
2,837,006
- --------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT SECURITIES
(COST $5,737,623)...................................... 5,852,023
- --------------------------------------------------------------------------------
AGENCY SECURITIES (30.4%)
- --------------------------------------------------------------------------------
FEDERAL HOME LOAN MORTGAGE CORP. (20.3%)
Gold Pool #C00436
7.50%, 12/1/25......................................... 3,028,441 3,045,006
- --------------------------------------------------------------------------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION (8.6%)
Pool #349359
7.00%, 6/1/26.......................................... 1,317,352 1,292,230
- --------------------------------------------------------------------------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (1.5%)
Pool #316108
8.00%, 3/15/22......................................... 222,935 229,064
- --------------------------------------------------------------------------------
TOTAL AGENCY SECURITIES
(COST $4,506,751)...................................... 4,566,300
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-4
<PAGE>
BHM&S TOTAL RETURN BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
October 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
- -------------------------------------------------------------------------------
<S> <C> <C>
ASSET-BACKED SECURITIES (5.4%)
- -------------------------------------------------------------------------------
Boatmen's Auto Trust 96-A A2
6.35%, 1/15/03....................................... $ 110,000 $ 110,747
Chase Manhattan Credit Card Master Trust
Series 1996-4 Class A
6.73%, 2/15/03...................................... 500,000 507,030
NationsBank Auto Owner Trust, Series 1996-A A3
6.375%, 7/15/00..................................... 200,000 201,302
- -------------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(COST $818,717)...................................... 819,079
- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENT (6.9%)
- -------------------------------------------------------------------------------
REPURCHASE AGREEMENT
Chase Securities, Inc. 5.58%, dated 10/31/96, due
11/1/96, to be repurchased at $1,039,161,
collateralized by $1,004,308 of various
U.S. Treasury Notes, 5.875%-7.75%, due 3/31/99-
11/30/99, valued at $1,039,002
(COST $1,039,000)................................... 1,039,000 1,039,000
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS (102.3%)
(COST $15,194,281) (A)............................... 15,385,722
- -------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (NET)
(-2.3%).............................................. (348,113)
- -------------------------------------------------------------------------------
NET ASSETS (100%)...................................... $15,037,609
===============================================================================
</TABLE>
+ See Note A to Financial Statements.
(a) The cost for federal income tax and book purposes was $15,194,281. At Octo-
ber 31, 1996, net unrealized appreciation for all securities based on tax
cost was $191,441. This consisted of aggregate gross unrealized apprecia-
tion for all securities of $197,123 and aggregate gross unrealized depreci-
ation for all securities of $5,682.
The accompanying notes are an integral part of the financial statements.
F-5
<PAGE>
BHM&S TOTAL RETURN BOND PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1996 (Unaudited)
<TABLE>
- --------------------------------------------------------------------------------
<S> <C>
ASSETS
Investments, at Cost.............................................. $15,194,281
===========
Investments, at Value............................................. $15,385,722
Cash.............................................................. 283
Interest Receivable............................................... 183,418
Receivable due from Investment Adviser--Note B.................... 11,478
Receivable for Portfolio Shares Sold.............................. 2,242
Other Assets...................................................... 236
- --------------------------------------------------------------------------------
Total Assets..................................................... 15,583,379
- --------------------------------------------------------------------------------
LIABILITIES
Payable for Investments Purchased................................. 509,432
Payable for Administrative Fees--Note C........................... 11,519
Payable for Distribution and Service Fees--Note E................. 4,749
Payable for Trustees' Fees--Note F................................ 588
Other Liabilities................................................. 19,482
- --------------------------------------------------------------------------------
Total Liabilities................................................ 545,770
- --------------------------------------------------------------------------------
NET ASSETS......................................................... $15,037,609
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
Paid in Capital................................................... 14,846,492
Undistributed Net Investment Income............................... 79,168
Accumulated Net Realized Loss..................................... (79,492)
Unrealized Appreciation........................................... 191,441
- --------------------------------------------------------------------------------
NET ASSETS......................................................... $15,037,609
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INSTITUTIONAL CLASS SHARES
Net Assets........................................................ $12,329,720
Net Asset Value, Offering and Redemption Price Per Share
1,222,079 shares outstanding (unlimited authorization,
no par value)................................................... $ 10.09
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INSTITUTIONAL SERVICE CLASS SHARES
Net Assets........................................................ $ 2,707,889
Net Asset Value, Offering and Redemption Price Per Share
268,928 shares outstanding (Unlimited authorization,
no par value)................................................... $ 10.07
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-6
<PAGE>
BHM&S TOTAL RETURN BOND PORTFOLIO
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
OCTOBER 31,
1996
(UNAUDITED)
- ------------------------------------------------------------------------------
<S> <C> <C>
INTEREST INCOME
Interest............................................... $228,137
- ------------------------------------------------------------------------------
EXPENSES
Investment Advisory Fees--Note B
Basic Fees............................................ $ 12,369
Less: Fees Waived..................................... (12,369)
--------
Administrative Fees--Note C............................ 39,908
Audit Fees............................................. 6,932
Printing Fees.......................................... 6,849
Filing and Registration Fees........................... 4,500
Distribution and Service Fees--Note E.................. 3,405
Custodian Fees--Note D................................. 2,275
Trustees' Fees--Note F................................. 1,244
Other Expenses......................................... 1,594
Fees Assumed by Adviser--Note B........................ (43,380)
- ------------------------------------------------------------------------------
Total Expenses........................................ 23,327
Expense Offset--Note A................................. (100)
- ------------------------------------------------------------------------------
Net Expenses.......................................... 23,227
- ------------------------------------------------------------------------------
NET INVESTMENT INCOME................................... 204,910
- ------------------------------------------------------------------------------
NET REALIZED LOSS ON INVESTMENTS........................ (78,295)
NET CHANGE IN UNREALIZED APPRECIATION/ DEPRECIATION ON
INVESTMENTS........................................... 327,410
- ------------------------------------------------------------------------------
NET GAIN ON INVESTMENTS................................. 249,115
- ------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.... $454,025
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-7
<PAGE>
BHM&S TOTAL RETURN PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
OCTOBER 31, NOVEMBER 1,
1996 1995** TO
(UNAUDITED) APRIL 30, 1996
- ------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income................................. $ 204,910 $ 99,017
Net Realized Loss..................................... (78,295) (2,447)
Net Change in Unrealized Appreciation/Depreciation.... 327,410 (135,969)
- ------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting From
Operations......................................... 454,025 (39,399)
- ------------------------------------------------------------------------------------
DISTRIBUTIONS:
Net Investment Income:
Institutional Class.................................. (94,398) (38,548)
Institutional Service Class.......................... (65,588) (24,975)
- ------------------------------------------------------------------------------------
Total Distributions................................... (159,986) (63,523)
- ------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (NOTE I):
Institutional Class:
Issued--Regular..................................... 9,591,067 2,785,396
--In Lieu of Cash Distributions................... 94,398 38,548
Redeemed............................................ (30,493) (340,122)
- ------------------------------------------------------------------------------------
Net Increase from Institutional Class Shares......... 9,654,972 2,483,822
- ------------------------------------------------------------------------------------
Institutional Service Class:
Issued--Regular..................................... 736,796 2,930,372
--In Lieu of Cash Distributions................... 65,587 24,975
Redeemed............................................ (1,029,762) (20,270)
- ------------------------------------------------------------------------------------
Net Increase (Decrease) from Institutional Service
Class Shares....................................... (227,379) 2,935,077
- ------------------------------------------------------------------------------------
Net Increase from Capital Share Transactions......... 9,427,593 5,418,899
- ------------------------------------------------------------------------------------
Total Increase........................................ 9,721,632 5,315,977
Net Assets:
Beginning of Period................................... 5,315,977 --
- ------------------------------------------------------------------------------------
End of Period (including undistributed net investment
income of $79,168 and $34,692, respectively)........ $15,037,609 $5,315,977
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
</TABLE>
** Commencement of Operations
The accompanying notes are an integral part of the financial statements.
F-8
<PAGE>
BHM&S TOTAL RETURN BOND PORTFOLIO FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS INSTITUTIONAL SERVICE CLASS
---------------------------- ----------------------------
SIX MONTHS SIX MONTHS
ENDED NOVEMBER 1, ENDED NOVEMBER 1,
OCTOBER 31, 1995** OCTOBER 31, 1995**
1996 TO 1996 TO
(UNAUDITED) APRIL 30, 1996++ (UNAUDITED) APRIL 30, 1996++
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD... $ 9.85 $10.00 $ 9.84 $10.00
- ----------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income.. 0.18 0.28 0.28 0.27
Net Realized and
Unrealized Gain
(Loss) on
Investments.......... 0.31 (0.27) 0.19 (0.27)
- ----------------------------------------------------------------------------------
Total from Investment
Operations.......... 0.49 0.01 0.47 --
- ----------------------------------------------------------------------------------
DISTRIBUTIONS
Net Investment Income.. (0.25) (0.16) (0.24) (0.16)
- ----------------------------------------------------------------------------------
NET ASSET VALUE, END OF
PERIOD................ $ 10.09 $ 9.85 $10.07 $ 9.84
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
TOTAL RETURN+........... 5.06% 0.08% 4.86% (0.07)%
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of
Period (Thousands).... $12,330 $2,445 $2,708 $2,871
Ratio of Expenses to
Average Net Assets.... 0.55%* 0.61%* 0.80%* 0.83%*
Ratio of Net Investment
Income to Average Net
Assets................ 5.70%* 5.53%* 5.65%* 5.44%*
Portfolio Turnover
Rate.................. 111% 55% 111% 55%
- ----------------------------------------------------------------------------------
Voluntary Waived Fees
and Expenses Assumed
by the Adviser Per
Share................. $ 0.04 $ 0.23 $ 0.09 $ 0.20
Ratio of Expenses to
Average Net Assets
Including Expense
Offsets............... 0.55%* 0.55%* 0.80%* 0.80%*
- ----------------------------------------------------------------------------------
</TABLE>
* Annualized.
** Commencement of Operations.
+ Total return would have been lower had certain fees not been waived and ex-
penses assumed by the Adviser during the period.
++ Per share amounts for the period ended April 30, 1996 are based on average
outstanding shares.
The accompanying notes are an integral part of the financial statements.
F-9
<PAGE>
BHM&S TOTAL RETURN BOND PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
UAM Funds Trust and UAM Funds, Inc. (collectively the "UAM Funds") are regis-
tered under the Investment Company Act of 1940, as amended. The BHM&S Total Re-
turn Bond Portfolio (the "Portfolio"), a portfolio of UAM Funds Trust, is a di-
versified, open-end management investment company. At October 31, 1996, the UAM
Funds were composed of forty active portfolios. The financial statements of the
remaining portfolios are presented separately. The objective of the BHM&S Total
Return Bond Portfolio is to provide a maximum long term total return consistent
with reasonable risk to principal by investing in investment grade fixed income
securities of varying maturities.
A. SIGNIFICANT ACCOUNTING POLICIES: The following significant accounting pol-
icies are in conformity with generally accepted accounting principles. Such
policies are consistently followed by the Portfolio in the preparation of its
financial statements. Generally accepted accounting principles may require man-
agement 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 in-
formation with respect to transactions in fixed income securities, quota-
tions from dealers, market transactions in comparable securities and vari-
ous relationships between securities in determining value. Short-term in-
vestments 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 read-
ily available is determined in good faith at fair value using methods de-
termined 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 provi-
sion for Federal income taxes is required in the financial statements.
3. REPURCHASE AGREEMENTS: In connection with transactions involving re-
purchase 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 monitored 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.
F-10
<PAGE>
BHM&S TOTAL RETURN BOND PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the Portfolio may transfer their daily uninvested cash bal-
ances into a joint trading account which invests in one or more repurchase
agreements. This joint repurchase agreement is covered by the same collat-
eral requirements as discussed above.
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. 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 using the ef-
fective yield basis 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 ex-
penses are apportioned among the portfolios of the UAM Funds and AEW Com-
mercial Mortgage Securities Fund, Inc. ("AEW"), an affiliated closed-end
management investment company, based on their relative net assets. Custo-
dian 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 sub-
sidiary of United Asset Management Corporation ("UAM"), provides investment ad-
visory 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 volun-
tarily 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 Portfolios Institutional Class Shares and
Service Class Shares, respectively.
F-11
<PAGE>
BHM&S TOTAL RETURN BOND PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
C. ADMINISTRATION SERVICES: UAM Fund Services, Inc. (the "Administrator"), a
wholly-owned subsidiary of UAM, provides and oversees administrative, fund ac-
counting, dividend disbursing and transfer agent services to the UAM Funds and
AEW under a Fund 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 aggre-
gate 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 as-
sets; 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 ba-
sis 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. The Administrator has entered into a Mutual
Funds Service Agreement with Chase Global Funds Services Company ("CGFSC"), an
affiliate of The Chase Manhattan Bank, under which CGFSC agrees to provide cer-
tain 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. For the period
ended October 31, 1996, $38,943 was paid to CGFSC for their services.
D. CUSTODIAN: Effective July 17, 1996, The Chase Manhattan Bank (the "Bank"),
an affiliate of CGFSC, is custodian for the Portfolio's assets held in accor-
dance with the custodian agreement. For the period July 17, 1996 to October 31,
1996, the amount charged to the Portfolio by the Bank aggregated $2,085, all of
which is unpaid at October 31, 1996.
E. DISTRIBUTION SERVICES: 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 "Plan") on behalf of
the Service Class Shares pursuant to Rule 12b-1 under the Investment Company
Act of 1940. Under the Plan, the Portfolio may not incur distribution and serv-
ice fees which exceed an annual rate of 0.75% of the Portfolio's net assets,
however, 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 for distribution fees. The Portfolio
pays service fees at an annual rate of 0.25% of the average daily value of
Service Class Shares owned by clients of such Service Organizations.
F-12
<PAGE>
APPENDIX -- DESCRIPTION OF SECURITIES AND RATINGS
I. DESCRIPTION OF CORPORATE BOND RATINGS
MOODY'S INVESTORS SERVICE, INC.'S CORPORATE BOND RATINGS:
AAA -- Bonds which are Aaa are judged to be the best quality; They carry the
smallest degree of investment risk and are generally referred to as "gilt-
edge." Interest payments are protected by a large or by an exceptionally sta-
ble margin, and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to im-
pair the fundamentally strong position of such issues.
AA -- Bonds which are rated Aa are judged to be of high quality by all stan-
dards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protec-
tive elements may be of greater amplitude or there may be other elements pres-
ent which make the long-term risks appear somewhat larger than in Aaa securi-
ties.
A -- Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving se-
curity to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment sometime in the future.
Moody's applies numerical modifiers 1, 2 and 3 in the Aa and A rating cate-
gories. The modifier 1 indicates that the security ranks at a higher end of
the rating category, modifier 2 indicates a mid-range rating and the modifier
3 indicates that the issue ranks at the lower end of the rating category.
BAA -- Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
STANDARD & POOR'S CORPORATION'S CORPORATE BOND RATINGS:
AAA -- Bonds rated AAA have the highest rating assigned by Standard & Poor's
to a debt obligation and indicate an extremely strong capacity to pay princi-
pal and interest.
AA -- Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only to a small degree.
A-1
<PAGE>
A -- Bonds rated A have a strong capacity to pay interest and repay princi-
pal although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than bonds in higher rated
categories.
BBB -- Debt rated BBB is regarded as having an adequate capacity to pay in-
terest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than for debt in higher rated categories.
II. DESCRIPTION OF MUNICIPAL NOTE RATINGS
MOODY'S INVESTORS SERVICE INC.'S MUNICIPAL NOTES RATINGS:
MIG1 -- Municipal Notes which are rated MIG1 are considered best quality.
There is present strong protection by established cash flows, superior liquid-
ity support or demonstrated broad-based access to the market for refinancing.
MIG2 -- Municipal Notes which are rated MIG2 are considered high quality.
Margins of protection are ample although not so large as in the preceding
group.
MIG3 -- Municipal Notes which are rated MIG3 are considered favorable quali-
ty. All security elements are accounted for but there is lacking the undeni-
able strength of the preceding grades. Liquidity and cash flow protection may
be narrow and market access for refinancing is likely to be less well estab-
lished.
STANDARD & POOR'S CORPORATION'S MUNICIPAL NOTES RATINGS:
SP-1 -- Municipal Notes which are rated SP-1 are considered to possess a
strong capacity to pay principal and interest. Issues determined to possess
very strong characteristics are given a plus (+) designation.
SP-2 -- Municipal Notes which are rated SP-2 are considered to possess a
satisfactory capacity to pay principal and interest, with some vulnerability
to adverse financial and economic changes over the term of the notes.
III. DESCRIPTION OF U.S. GOVERNMENT SECURITIES
The term "U.S. Government Securities" refers to a variety of securities
which are issued or guaranteed by the United States Government, and by various
instrumentalities which have been established or sponsored by the United
States Government.
U.S. Treasury securities are backed by the "full faith and credit" of the
United States. Securities issued or guaranteed by Federal agencies and U.S.
Government sponsored instrumentalities may or may not be backed by the full
faith and credit of the United States.
In the case of securities not backed by the full faith and credit of the
United States, the investor must look principally to the agency or instrumen-
tality issuing
A-2
<PAGE>
or guaranteeing the obligation for ultimate repayment, and may not be able to
assess a claim against the United States itself in the event the agency or in-
strumentality does not meet its commitment. Agencies which are backed by the
full faith and credit of the United States include the Export-Import Bank,
Farmers Home Administration, Federal Financing Bank, and others. Certain agen-
cies and instrumentalities, such as the GNMA are, in effect, backed by the
full faith and credit of the United States through provisions in their char-
ters that they may make "indefinite and unlimited" drawings on the U.S. Trea-
sury, if needed to service its debt. Debt from certain other agencies and in-
strumentalities, including the Federal Home Loan Bank and FNMA, is not guaran-
teed by the United States, but those institutions are protected by the discre-
tionary authority of the U.S. Treasury to purchase certain amounts of their
securities to assist the institution in meeting its debt obligations. Finally,
other agencies and instrumentalities, such as the Farm Credit System and the
FHLMC, are federally chartered institutions under Government supervision, but
their debt securities are backed only by the credit worthiness of those insti-
tutions, not the U.S. Government.
Some of the U.S. Government agencies that issue or guarantee securities in-
clude the Export-Import Bank of the United States, Farmers Home Administra-
tion, Federal Housing Administration, Maritime Administration, Small Business
Administration, and the Tennessee Valley Authority.
IV. DESCRIPTION OF COMMERCIAL PAPER
The Portfolio may invest in commercial paper (including variable amount mas-
ter demand notes) rated A-1 or better by S&P or Prime-1 by Moody's or by S&P.
Commercial paper refers to short-term, unsecured promissory notes issued by
corporations to finance short-term credit needs. Commercial paper is usually
sold on a discount basis and has a maturity at the time of issuance not ex-
ceeding nine months. Variable amount master demand notes are demand obliga-
tions that permit the investment of fluctuating amounts at varying market
rates of interest pursuant to arrangement between the issuer and a commercial
bank acting as agent for the payees of such notes whereby both parties have
the right to vary the amount of the outstanding indebtedness on the notes. As
variable amount master demand notes are direct lending arrangements between a
lender and a borrower, it is not generally contemplated that such instruments
will be traded, and there is no secondary market for these notes, although
they are redeemable (and thus immediately repayable by the borrower) at face
value, plus accrued interest, at any time. In connection with the Portfolio's
investment in variable amount master demand notes, the Adviser's investment
management staff will monitor, on an ongoing basis, the earning power, cash
flow and other liquidity ratios of the issuer and the borrower's ability to
pay principal and interest on demand.
Commercial paper rated A-1 by S&P has the following characteristics:(1) li-
quidity ratios are adequate to meet cash requirements; (2) long-term senior
A-3
<PAGE>
debt is rated "A" or better; (3) the issuer has access to at least two addi-
tional channels of borrowing; (4) basic earnings and cash flow have an upward
trend with allowance made for unusual circumstances; (5) typically, the is-
suer's industry is well established, and the issuer has a strong position
within the industry; and (6) the reliability and quality of management are un-
questioned. Relative strength or weakness of the above factors determine
whether the issuer's commercial paper is A-1, A-2 or A-3. The rating Prime-1
is the highest commercial paper rating assigned by Moody's. Among the factors
considered by Moody's in assigning ratings are the following: (1) evaluation
of the management of the issuer; (2) economic evaluation of the issuer's in-
dustry or industries and the appraisal of speculative-type risks which may be
inherent in certain areas; (3) evaluation of the issuer's products in relation
to completion and customer acceptance; (4) liquidity; (5) amount and quality
of long term debt; (6) trend of earnings over a period of ten years; (7) fi-
nancial strength of a parent company and the relationships which exist with
the issuer; and (8) recognition by the management of issuer of obligations
which may be present or may arise as a result of public interest questions and
preparations to meet such obligations. Relative strength or weakness of the
above factors determine whether the issuer's commercial paper is Prime-1 or
Prime-2.
V. DESCRIPTION OF BANK OBLIGATIONS
Time deposits are non-negotiable deposits maintained in a banking institu-
tion for a specified period of time at a stated interest rate. Certificates of
deposit are negotiable short-term obligations of commercial banks. Variable
rate certificates of deposit are certificates of deposit on which the interest
rate is periodically adjusted prior to their stated maturity based upon a
specified market rate. As a result of these adjustments, the interest rate on
these obligations may increase or decrease periodically. Frequently, dealers
selling variable rate certificates of deposit to the Portfolio will agree to
repurchase such instruments, at the Portfolio's option, at par on or near the
coupon dates. The dealers' obligations to repurchase these instruments are
subject to conditions imposed by various dealers. Such conditions typically
are the continued credit standing of the issuer and the existence of reasona-
bly orderly market conditions. The Portfolio is also able to sell variable
rate certificates of deposit in the secondary market. Variable rate certifi-
cates of deposit normally carry a higher interest rate than comparable fixed
rate certificates of deposit. A banker's acceptance is a time draft drawn on a
commercial bank by a borrower usually in connection with an international com-
mercial transaction to finance the import, export, transfer or storage of
goods. The borrower is liable for payment as well as the bank which uncondi-
tionally guarantees to pay the draft at its face amount on the maturity date.
Most acceptances have maturities of six months or less and are traded in the
secondary markets prior to maturity.
A-4
<PAGE>
PART B
UAM FUNDS
- --------------------------------------------------------------------------------
CHICAGO ASSET MANAGEMENT VALUE/CONTRARIAN PORTFOLIO
CHICAGO ASSET MANAGEMENT INTERMEDIATE BOND PORTFOLIO
INSTITUTIONAL CLASS SHARES
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION -- JANUARY 3, 1997
This Statement is not a Prospectus but should be read in conjunction with the
Prospectuses of the UAM Funds Trust (the "UAM Funds" or the "Fund") for the
Chicago Asset Management Value/Contrarian Portfolio Institutional Class Shares
and Chicago Asset Management Intermediate Bond Portfolio Institutional Class
Shares dated January 3, 1997. To obtain the Prospectuses, please call the UAM
Funds Service Center:
1-800-638-7983
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Investment Objectives and Policies......................................... 2
Purchase of Shares......................................................... 12
Redemption of Shares....................................................... 13
Shareholder Services....................................................... 14
Investment Limitations..................................................... 15
Management of the Fund..................................................... 17
Investment Adviser......................................................... 20
Portfolio Transactions..................................................... 21
Administrative Services.................................................... 22
Performance Calculations................................................... 23
General Information........................................................ 27
Federal Taxes.............................................................. 29
Financial Statements....................................................... 30
Appendix -- Description of Securities and Corporate Bond Ratings........... A-1
</TABLE>
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The following policies supplement the investment objectives and policies of
the Chicago Asset Management Value/Contrarian Portfolio and Chicago Asset Man-
agement Intermediate Bond Portfolio (the "Portfolios") as set forth in the
Portfolios' Prospectuses:
LENDING OF SECURITIES
The Portfolio may lend its investment securities to qualified brokers, deal-
ers, domestic and foreign banks or other financial institutions, so long as
the terms, the structure and the aggregate amount of such loans are not incon-
sistent with the Investment Company Act of 1940, as amended, (the "1940 Act")
or the Rules and Regulations or interpretations of the Securities and Exchange
Commission (the "SEC") thereunder, which currently require that (a) the bor-
rower pledge and maintain with the Portfolio collateral consisting of cash, an
irrevocable letter of credit issued by a domestic U.S. bank or securities is-
sued or guaranteed by the United States Government having a value at all times
not less than 100% of the value of the securities loaned, (b) the borrower add
to such collateral whenever the price of the securities loaned rises (i.e.,
the borrower "marks to the market" on a daily basis), (c) the loan be made
subject to termination by the Portfolio at any time, and (d) the Portfolio re-
ceives reasonable interest on the loan (which may include the Portfolio in-
vesting any cash collateral in interest bearing short-term investments). As
with other extensions of credit, there are risks of delay in recovery or even
loss of rights in the securities loaned if the borrower of the securities
fails financially. These risks are similar to the ones involved with repur-
chase agreements as discussed in the Prospectus.
HEDGING STRATEGIES
Each Portfolio may engage in various portfolio strategies to hedge against
adverse movements in the equity, debt and currency markets. Each Portfolio may
buy or sell futures contracts, write (i.e., sell) covered call options on its
portfolio securities, purchase put and call options on securities and engage
in transactions in stock index options and stock index futures, and related
options on such futures. Each Portfolio may also enter into foreign currency
contracts to hedge against its foreign currency movements. Each of these port-
folio strategies is described below. Although certain risks are involved in
options and futures transactions, the Adviser believes that, because the Port-
folios will engage in options and futures transactions only for hedging pur-
poses, the options and futures portfolio strategies of a Portfolio will not
subject it to the risks frequently associated with the speculative use of op-
tions and futures transactions. While each Portfolio's use of hedging strate-
gies is intended to reduce the volatility of the net asset value of the Port-
folio shares, the Portfolios' net asset value will fluctuate. There can be no
assurance that a Portfolio's hedging transactions will be effective. Also, a
Portfolio may not necessarily
2
<PAGE>
be engaging in hedging activities when movements in any particular equity,
debt or currency market occur.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
The U.S. dollar value of the assets of the Portfolios may be affected favor-
ably or unfavorably by changes in foreign currency exchange rates and exchange
control regulations, and the Portfolios may incur costs in connection with
conversions between various currencies. The Portfolios will conduct their for-
eign currency exchange transactions either on a spot (i.e., cash) basis at the
spot rate prevailing in the foreign currency exchange market, or through en-
tering into forward contracts to purchase or sell foreign currencies. A for-
ward foreign currency exchange contract involves an obligation to purchase or
sell a specific currency at a future date, which may be any fixed number of
days from the date of the contract agreed upon by the parties, at a price set
at the time of the contract. These contracts are traded in the interbank mar-
ket and are conducted directly between currency traders (usually large commer-
cial banks) and their customers. A forward contract generally has no deposit
requirement, and no commissions are charged at any stage for such trades.
The Portfolios may enter into forward foreign currency exchange contracts in
several circumstances. When a Portfolio enters into a contract for the pur-
chase or sale of a security denominated in a foreign currency, or when a Port-
folio anticipates the receipt in a foreign currency of dividends or interest
payments on a security which it holds, the Portfolio may desire to "lock-in"
the U.S. dollar price of the security or the U.S. dollar equivalent of such
dividend or interest payment, as the case may be. By entering into a forward
contract for a fixed amount of dollars, for the purchase or sale of the amount
of foreign currency involved in the underlying transactions, the Portfolio
will be able to protect itself against a possible loss resulting from an ad-
verse change in the relationship between the U.S. dollar and the subject for-
eign currency during the period between the date on which the security is pur-
chased or sold, or on which the dividend or interest payment is declared, and
the date on which such payments are made or received.
Additionally, when either of the Portfolios anticipates that the currency of
a particular foreign country may suffer a substantial decline against the U.S.
dollar, it may enter into a forward contract for a fixed amount of dollars to
sell the amount of foreign currency approximating the value of some or all of
such Portfolio's securities denominated in such foreign currency. The precise
matching of the forward contract amounts and the value of the securities in-
volved will not generally be possible since the future value of securities in
foreign currencies will change as a consequence of market movements in the
value of these securities between the date on which the forward contract is
entered into and the date it matures. The projection of short-term currency
market movement is extremely difficult, and the successful execution of a
short-term hedging strategy is highly uncertain. Neither
3
<PAGE>
Portfolio intends to enter into such forward contracts to protect the value of
portfolio securities on a regular or continuous basis. The Portfolios will not
enter into such forward contracts or maintain a net exposure to such contracts
where the consummation of the contracts would obligate such Portfolio to de-
liver an amount of foreign currency in excess of the value of such Portfolio's
securities or other assets denominated in that currency.
Under normal circumstances, consideration of the prospect for currency pari-
ties will be incorporated into the long-term investment decisions made with
regard to overall diversification strategies. However, the management of the
Fund believes that it is important to have the flexibility to enter into such
forward contracts when it determines that the best interests of the perfor-
mance of each Portfolio will thereby be served. The Fund's Custodian will
place cash, U.S. government securities, high-grade liquid debt or equity secu-
rities into a segregated account in an amount equal to the value of such Port-
folio's total assets committed to the consummation of forward foreign currency
exchange contracts. If the value of the securities placed in the segregated
account declines, additional cash or securities will be placed in the account
on a daily basis so that the value of the account will be equal to the amount
of such Portfolio's commitments with respect to such contracts.
The Portfolios generally will not enter into a forward contract with a term
of greater than one year. At the maturity of a forward contract, a Portfolio
may either sell the portfolio security and make delivery of the foreign cur-
rency, or it may retain the security and terminate its contractual obligation
to deliver the foreign currency by purchasing an "offsetting" contract with
the same currency trader obligating it to purchase, on the same maturity date,
the same amount of the foreign currency.
It is impossible to forecast with absolute precision the market value of a
particular portfolio security at the expiration of the contract. Accordingly,
it may be necessary for a Portfolio to purchase additional foreign currency on
the spot market (and bear the expense of such purchase) if the market value of
the security is less than the amount of foreign currency that such Portfolio
is obligated to deliver and if a decision is made to sell the security and
make delivery of the foreign currency.
If a Portfolio retains the portfolio security and engages in an offsetting
transaction, such Portfolio will incur a gain or loss (as described below) to
the extent that there has been movement in forward contract prices. Should
forward prices decline during the period between a Portfolio entering into a
forward contract for the sale of a foreign currency and the date it enters
into an offsetting contract for the purchase of the foreign currency, such
Portfolio will realize a gain to the extent that the price of the currency it
has agreed to sell exceeds the price of the currency it has agreed to pur-
chase. Should forward prices increase, such Portfolio would
4
<PAGE>
suffer a loss to the extent that the price of the currency it has agreed to
purchase exceeds the price of the currency it has agreed to sell.
Each of the Portfolios' dealings in forward foreign currency exchange con-
tracts will be limited to the transactions described above. Of course, the
Portfolios are not required to enter into such transactions with regard to
their foreign currency-denominated securities. It also should be realized that
this method of protecting the value of portfolio securities against a decline
in the value of a currency does not eliminate fluctuations in the underlying
prices of the securities. It simply establishes a rate of exchange which one
can achieve at some future point in time. Additionally, although such con-
tracts tend to minimize the risk of loss due to a decline in the value of the
hedged currency, at the same time, they tend to limit any potential gain which
might result should the value of such currency increase.
FUTURES CONTRACTS
Each Portfolio may enter into futures contracts for the purposes of hedging,
remaining fully invested and reducing transactions costs. Futures contracts
provide for the future sale by one party and purchase by another party of a
specified amount of a specific security at a specified future time and at a
specified price. Futures contracts which are standardized as to maturity date
and underlying financial instrument are traded on national futures exchanges.
Futures exchanges and trading are regulated under the Commodity Exchange Act
by the Commodity Futures Trading Commission ("CFTC"), a U.S. Government agen-
cy.
Although futures contracts by their terms call for actual delivery or ac-
ceptance of the underlying securities, in most cases the contracts are closed
out before the settlement date without the making or taking of delivery. Clos-
ing out an open futures position is done by taking an opposite position ("buy-
ing" a contract which has previously been "sold" or "selling" a contract pre-
viously "purchased") in an identical contract to terminate the position. Bro-
kerage commissions are incurred when a futures contract is bought or sold.
Futures traders are required to make a good faith margin deposit in cash or
acceptable securities with a broker or custodian to initiate and maintain open
positions in futures contracts. A margin deposit is intended to assure comple-
tion of the contract (delivery or acceptance of the underlying security) if it
is not terminated prior to the specified delivery date. Minimal initial margin
requirements are established by the futures exchange and may be changed. Bro-
kers may establish deposit requirements which are higher than the exchange
minimums. Generally, margin deposits are structured as percentages (e.g., 5%)
of the market value of the contracts being traded. After a futures contract
position is opened, the value of the contract is marked to market daily. If
the futures contract price changes to the extent that the margin on deposit
does not satisfy margin requirements, payment of additional "variation" margin
will be required. Conversely, change in the contract value may reduce the re-
quired margin, resulting in a repayment of excess margin
5
<PAGE>
to the contract holder. Variation margin payments are made to and from the
futures broker for as long as the contract remains open. The Portfolios expect
to earn interest income on its margin deposits.
Traders in futures contracts may be broadly classified as either "hedgers"
or "speculators". Hedgers use the futures markets primarily to offset unfavor-
able changes in the value of securities otherwise held for investment purposes
or expected to be acquired by them. Speculators are less inclined to own the
securities underlying the futures contracts which they trade and use futures
contracts with the expectation of realizing profits from a fluctuation in in-
terest rates. The Portfolios intend to use futures contracts only for hedging
purposes.
Regulations of the CFTC applicable to the Fund require that all of its
futures transactions constitute bona fide straddles or that the Fund's commod-
ity futures and option positions be for other purposes, to the extent that the
aggregate initial margins and premiums required to establish such non-hedging
positions do not exceed five percent of the liquidation value of a Portfolio.
A Portfolio will only sell futures contracts to protect securities it owns
against price declines or purchase contracts to protect against an increase in
the price of securities it intends to purchase. As evidence of this hedging
interest, the Portfolios expect that approximately 75% of its futures con-
tracts purchases will be "completed", that is, equivalent amounts of related
securities will have been purchased or will be purchased by the Portfolio on
the settlement date of the futures contracts.
Although techniques other than the sale and purchase of futures contracts
could be used to control the Portfolio's exposure to market fluctuations, the
use of futures contracts may be a more effective means of hedging this expo-
sure. While the Portfolio will incur commission expenses in both opening and
closing out futures positions, these costs are lower than transaction costs
incurred in the purchase and sale of the underlying securities.
RESTRICTIONS ON THE USE OF FUTURES CONTRACTS
A Portfolio will not enter into futures contract transactions to the extent
that, immediately thereafter, the sum of its initial margin deposits on open
contracts exceeds 5% of the market value of its total assets. In addition, a
Portfolio will not enter into futures contracts to the extent that its out-
standing obligations to purchase securities under these contracts would exceed
20% of its total assets.
RISK FACTORS IN FUTURES TRANSACTIONS
A Portfolio will minimize the risk that it will be unable to close out a
futures position by only entering into futures which are traded on national
futures exchanges and for which there appears to be a liquid secondary market.
However, there can be no assurance that a liquid secondary market will exist
for any particular futures contract at any specific time. Thus, it may not be
possible to close a futures position. In the event of adverse price movements,
a Portfolio would con-
6
<PAGE>
tinue to be required to make daily cash payments to maintain its required mar-
gin. In such situations, if the Portfolio has insufficient cash, it may have
to sell securities to meet daily margin requirements at a time when it may be
disadvantageous to do so. In addition, a Portfolio may be required to make de-
livery of the instruments underlying futures contracts it holds. The inability
to close futures positions also could have an adverse impact on a Portfolio's
ability to effectively hedge.
The risk of loss in trading futures contracts in some strategies can be sub-
stantial due both to the low margin deposits required and the extremely high
degree of leverage involved in futures pricing. As a result, a relatively
small price movement in a futures contract may result in immediate and sub-
stantial loss (as well as gain) to the investor. For example, if at the time
of purchase, 10% of the value of the futures contract is deposited as margin,
a subsequent 10% decrease in the value of the futures contract would result in
a total loss of the margin deposit, before any deduction for the transaction
costs, if the account were then closed out. A 15% decrease would result in a
loss equal to 150% of the original margin deposit if the contract were closed
out. Thus, a purchase or sale of a futures contract may result in excess of
the amount invested in the contract. However, because the futures strategies
of the Portfolios are engaged in only for hedging purposes, the Adviser does
not believe that the Portfolios are subject to the risks of loss frequently
associated with futures transactions. A Portfolio would presumably have sus-
tained comparable losses if, instead of the futures contract, it had invested
in the underlying financial instrument and sold it after the decline.
Utilization of futures transactions by the Portfolios does involve the risk
of imperfect or no correlation where the securities underlying the futures
contracts have different maturities than the portfolio securities being
hedged. It is also possible that the Portfolio could lose money on futures
contracts and also experience a decline in value of portfolio securities.
There is also the risk of loss by the Portfolio of margin deposits in the
event of bankruptcy of a broker with whom the Portfolio has an open position
in a futures contract or related option.
Most futures exchanges limit the amount of fluctuation permitted in futures
contract prices during a single trading day. The daily limit establishes the
maximum amount that the price of a futures contract may vary either up or down
from the previous day's settlement price at the end of a trading session. Once
the daily limit has been reached in a particular type of contract, no trades
may be made on that day at a price beyond that limit. The daily limit governs
only price movement during a particular trading day and, therefore, does not
limit potential losses because the limit may prevent the liquidation of unfa-
vorable positions. Futures contract prices have occasionally moved to the
daily limit for several consecutive trading days, with little or no trading,
thereby preventing prompt liquidation of futures positions and subjecting some
futures traders to substantial losses.
7
<PAGE>
OPTIONS
The Portfolios may purchase and sell put and call options on securities and
futures contracts for hedging purposes. Investments in options involve some of
the same considerations that are involved in connection with investments in
futures contracts (e.g., the existence of a liquid secondary market). In addi-
tion, the purchase of an option also entails the risk that changes in the
value of the underlying security or contract will not be fully reflected in
the value of the option purchased. Depending on the pricing of the option com-
pared to either the futures contract on which it is based or the price of the
securities being hedged, an option may or may not be less risky than ownership
of the futures contract or such securities. For example, there are significant
differences between the securities, futures and options markets that could re-
sult in an imperfect correlation between these markets, causing a given trans-
action not to achieve its objective. A decision as to whether, when, and how
to use options involves the exercise of skill and judgment by the Adviser, and
even a well-conceived transaction may be unsuccessful because of market behav-
ior or unexpected events.
WRITING COVERED CALL OPTIONS
The principal reason for writing call options is to attempt to realize,
through the receipt of premiums, a greater return than would be realized on
securities alone. By writing covered call options, each Portfolio gives up the
opportunity, while the option is in effect, to profit from any price increase
in the underlying security above the option exercise price. In addition, each
Portfolio's ability to sell the underlying security will be limited while the
option is in effect unless the Portfolio effects a closing purchase transac-
tion. A closing purchase transaction cancels out the Portfolio's position as
the writer of an option by means of an offsetting purchase of an identical op-
tion prior to the expiration of the option it has written. Covered call op-
tions serve as a partial hedge against the price of the underlying security
declining. Each Portfolio writes only covered options, which means that so
long as a Portfolio is obligated as the writer of the option it will, in a
segregated account with its custodian, maintain cash, U.S. government securi-
ties or high grade liquid debt or equity securities denominated in U.S. dol-
lars with a value equal to or greater than the exercise price of the under-
lying securities.
PURCHASING OPTIONS
The amount of any appreciation in the value of the underlying security sub-
ject to a put will be partially offset by the amount of the premium paid for
the put option and any related transaction costs. Prior to its expiration, a
put option may be sold in a closing sale transaction and profit or loss from a
sale will depend on whether the amount received is more or less than the pre-
mium paid for the put option plus the related transaction costs. A closing
sale transaction cancels out a Portfolio's position as purchaser of an option
by means of an offsetting sale of an identical option prior to the expiration
of the option it has purchased. In certain
8
<PAGE>
circumstances, a Portfolio may purchase call options on securities held in its
investment portfolio on which it has written call options or on securities
which it intends to purchase.
OPTIONS ON FOREIGN CURRENCIES
The Portfolios may purchase and write options on foreign currencies for
hedging purposes in a manner similar to that in which futures contracts on
foreign currencies, or forward contracts, will be utilized. For example, a de-
cline in the dollar value of a foreign currency in which portfolio securities
are denominated will reduce the dollar value of such securities, even if their
value in the foreign currency remains constant. In order to protect against
such diminutions in the value of portfolio securities, the Portfolios may pur-
chase put options on the foreign currency. If the value of the currency does
decline, the Portfolio will have the right to sell such currency for a fixed
amount in dollars and will thereby offset, in whole or in part, the adverse
effect on its portfolio which otherwise would have resulted.
Conversely, where a rise in the dollar value of a currency in which securi-
ties to be acquired are denominated is projected, thereby increasing the cost
of such securities, the Portfolios may purchase call options thereon. The pur-
chase of such options could offset, at least partially, the effects of the ad-
verse movements in exchange rates. As in the case of other types of options,
however, the benefit to the Portfolios deriving from purchases of foreign cur-
rency options will be reduced by the amount of the premium and related trans-
action costs. In addition, where currency exchange rates do not move in the
direction or to the extent anticipated, a Portfolio could sustain losses on
transactions in foreign currency options which would require it to forego a
portion or all of the benefits of advantageous changes in such rates.
Each Portfolio may write options on foreign currencies for the same types of
hedging purposes. For example, where a Portfolio anticipates a decline in the
dollar value of foreign currency denominated securities due to adverse fluctu-
ations in exchange rates it could, instead of purchasing a put option, write a
call option on the relevant currency. If the anticipated decline occurs, the
option will most likely not be exercised, and the diminution in value of port-
folio securities will be offset by the amount of the premium received.
Similarly, instead of purchasing a call option to hedge against an antici-
pated increase in the dollar cost of securities to be acquired, a Portfolio
could write a put option on the relevant currency which, if rates move in the
manner projected, will expire unexercised and allow the Portfolio to hedge
such increased cost up to the amount of the premium. As in the case of other
types of options, however, the writing of a foreign currency option will con-
stitute only a partial hedge up to the amount of the premium, and only if
rates move in the expected direction. If this does not occur, the option may
be exercised and a Portfolio would be required to purchase or sell the under-
lying currency at a loss which may not be offset by the
9
<PAGE>
amount of the premium. Through the writing of options on foreign currencies, a
Portfolio also may be required to forego all or a portion of the benefits
which might otherwise have been obtained from favorable movements in exchange
rates.
Each Portfolio intends to write covered call options on foreign currencies.
A call option written on a foreign currency by a Portfolio is "covered" if the
Portfolio owns the underlying foreign currency covered by the call or has an
absolute and immediate right to acquire that foreign currency without addi-
tional cash consideration (or for additional cash consideration held in a seg-
regated account by the Custodian) upon conversion or exchange of other foreign
currency held in its portfolio. A call option is also covered if a Portfolio
has a call on the same foreign currency and in the same principal amount as
the call written where the exercise price of the call held (a) is equal to or
less than the exercise price of the call written or (b) is greater than the
exercise price of the call written if the difference is maintained by the
Portfolio in cash, U.S. government securities or high grade liquid debt or eq-
uity securities in a segregated account with the Custodian.
Each Portfolio also intends to write call options on foreign currencies that
are not covered for cross-hedging purposes. A call option on a foreign cur-
rency is for cross-hedging purposes if it is not covered but is designed to
provide a hedge against a decline in the U.S. dollar value of a security which
the Portfolio owns or has the right to acquire and which is denominated in the
currency underlying the option due to an adverse change in the exchange rate.
In such circumstances, the Portfolio will collateralize the option by main-
taining in a segregated account with the Custodian, cash or U.S. government
securities or high grade liquid debt or equity securities in an amount not
less than the value of the underlying foreign currency in U.S. dollars marked
to market daily.
RISKS OF OPTIONS ON FUTURES CONTRACTS, FORWARD CONTRACTS AND OPTIONS ON
FOREIGN CURRENCIES
Options on foreign currencies and forward contracts are not traded on con-
tract markets regulated by the CFTC or (with the exception of certain foreign
currency options) by the Commission. To the contrary, such instruments are
traded through financial institutions acting as market-makers, although for-
eign currency options are also traded on certain national securities ex-
changes, such as the Philadelphia Stock Exchange and the Chicago Board Options
Exchange, subject to the regulation of the Commission. Similarly, options on
currencies may be traded over-the-counter. In an over-the-counter trading en-
vironment, many of the protection afforded to exchange participants will not
be available. For example, there are no daily price fluctuation limits, and
adverse market movements could therefore continue to an unlimited extent over
a period of time. Although the purchase of an option cannot lose more than the
amount of the premium plus related transaction costs, this entire amount could
be lost. Moreover, the option writer and a trader of forward contracts could
lose amounts substantially in excess of their initial invest-
10
<PAGE>
ments, due to the margin and collateral requirements associated with such
positions.
Options on foreign currencies traded on national securities exchanges are
within the jurisdiction of the Commission, as are other securities traded on
such exchanges. As a result, many of the protections provided to traders on
organized exchanges will be available with respect to such transactions. In
particular, all foreign currency option positions entered into on a national
securities exchange are cleared and guaranteed by the Options Clearing Corpo-
ration ("OCC"), thereby reducing the risk of counterparty default. Further-
more, a liquid secondary market in options traded on a national securities ex-
change may be more readily available than in the over-the-counter market, po-
tentially permitting the Portfolios to liquidate open positions at a profit
prior to exercise or expiration, or to limit losses in the event of adverse
market movements.
The purchase and sale of exchange-traded foreign currency options, however,
is subject to the risks of the availability of a liquid secondary market de-
scribed above, as well as the risks regarding adverse market movements, mar-
gining of options written, the nature of the foreign currency market, possible
intervention by governmental authorities and the effect of other political and
economic events. In addition, exchange-traded options of foreign currencies
involve certain risks not presented by the over-the-counter market. For exam-
ple, exercise and settlement of such options must be made exclusively through
the OCC, which has established banking relationships in applicable foreign
countries for this purpose. As a result, the OCC may, if it determines that
foreign governmental restrictions or taxes would prevent the orderly settle-
ment of foreign currency option exercises, or would result in undue burdens on
the OCC or its clearing member, impose special procedures on exercise and set-
tlement, such as technical changes in the mechanics of delivery of currency,
the fixing of dollar settlement prices or prohibitions, on exercise.
In addition, futures contracts, options on futures contracts, forward con-
tracts and options of foreign currencies may be traded on foreign exchanges.
Such transactions are subject to the risk of governmental actions affecting
trading in, or the prices of, foreign currencies or securities. The value of
such positions also could be adversely affected by (i) other complex foreign
political and economic factors, (ii) lesser availability than in the United
States of data on which to make a trading decision, (iii) delays in a Portfo-
lio's ability to act upon economic events occurring in foreign markets during
non-business hours in the United States, (iv) the imposition of different ex-
ercise and settlement terms and procedures and margin requirements than in the
United States, and (v) lesser trading volume.
INTEREST RATE SWAP TRANSACTIONS
Each Portfolio may enter into swap contracts. A swap is an agreement to ex-
change the return generated by one instrument for the return generated by an-
other instrument. The payment streams are calculated by reference to a spe-
cific
11
<PAGE>
index and agreed upon notional amount. The term "specified index" includes
fixed interest rates, total return on interest rate indices and fixed income
indices, (as well as amounts derived from arithmetic operations on these indi-
ces). For example, a Portfolio may agree to swap the return generated by a
fixed-income index for the return generated by a second fixed-income index.
The Portfolios will usually enter into swaps on a net basis, i.e., the two
payment streams are netted out in a cash settlement on the payment date or
dates specified in the instrument, with a Portfolio receiving or paying, as
the case may be, only the net amount of the two payments. A Portfolio's obli-
gations under a swap agreement will be accrued daily (offsetting against any
amounts owing to the Portfolio) and any accrued but unpaid net amounts owed to
a swap counterparty will be covered by the maintenance of a segregated account
consisting of cash, U.S. government securities, or high grade debt obliga-
tions, to avoid any potential leveraging of the Portfolio. Since swaps will be
entered into for good faith hedging purposes, the Adviser and the Fund believe
such obligations do not constitute "senior securities" under the 1940 Act and,
accordingly, will not treat them as being subject to its borrowing restric-
tions.
Interest rate swaps do not involve the delivery of securities, other under-
lying assets, or principal. Accordingly, the risk of loss with respect to in-
terest rate swaps is limited to the net amount of interest payments that a
Portfolio is contractually obligated to make. If the other party to the inter-
est rate swap defaults, a Portfolio's risk of loss consists of the net amount
of interest payments that a Portfolio is contractually entitled to receive. If
there is a default by the counterparty, the Portfolio may have contractual
remedies pursuant to the agreements related to the transaction. The swap mar-
ket has grown substantially in recent years with a large number of banks and
investment banking firms acting both as principals and as agents utilizing
standardized swap documentation. As a result, the swap market has become rela-
tively liquid.
PURCHASE OF SHARES
Shares of each Portfolio may be purchased without sales commission at the
net asset value per share next determined after an order is received in proper
form by the Fund, and payment is received by the Fund's custodian. The minimum
initial investment required for each Portfolio is $2,000 with certain excep-
tions as may be determined from time to time by the officers of the Fund. The
initial investment minimum for IRA accounts is $500. The initial investment
minimum for spousal IRA accounts is $250. The minimum for any subsequent in-
vestment is $100. An order received in proper form prior to the 4:00 p.m.
close of the New York Stock Exchange (the "Exchange") will be executed at the
price computed on the date of receipt; and an order received not in proper
form or after the 4:00 p.m. close of the Exchange will be executed at the
price computed on the next day the Exchange is
12
<PAGE>
open after proper receipt. The Exchange will be closed on the following days:
Presidents' Day, February 17, 1997; Good Friday, March 28, 1997; Memorial Day,
May 26, 1997; Independence Day, July 4, 1997; Labor Day, September 1, 1997;
Thanksgiving Day, November 27, 1996; Christmas Day, December 25, 1997; and New
Year's Day, January 1, 1998.
Each Portfolio reserves the right in its sole discretion (1) to suspend the
offering of its shares, (2) to reject purchase orders when in the judgment of
management such rejection is in the best interests of the Fund, and (3) to re-
duce or waive the minimum for initial and subsequent investment for certain
fiduciary accounts such as employee benefit plans or under circumstances where
certain economies can be achieved in sales of a Portfolio's shares.
REDEMPTION OF SHARES
Each Portfolio may suspend redemption privileges or postpone the date of
payment (1) during any period that either the Exchange or custodian bank are
closed or trading on the Exchange is restricted as determined by the Commis-
sion, (2) during any period when an emergency exists as defined by the rules
of the Commission as a result of which it is not reasonably practicable for a
Portfolio to dispose of securities owned by it or to fairly determine the
value of its assets, and (3) for such other periods as the Commission may per-
mit. The Fund has made an election with the Commission to pay in cash all re-
demptions requested by any shareholder of record limited in amount during any
90-day period to the lesser of $250,000 or 1% of the net assets of the Fund at
the beginning of such period. Such commitment is irrevocable without the prior
approval of the Commission. Redemptions in excess of the above limits may be
paid, in whole or in part, in investment securities or in cash as the Board of
Trustees may deem advisable; however, payment will be made wholly in cash un-
less the Board of Trustees believe that economic or market conditions exist
which would make such a practice detrimental to the best interests of the
Fund. If redemptions are paid in investment securities, such securities will
be valued as set forth in the Prospectus under "How Share Prices are Deter-
mined", and a redeeming shareholder would normally incur brokerage expenses if
those securities were converted to cash.
No charge is made by a Portfolio for redemptions. Any redemption may be more
or less than the shareholder's initial cost depending on the market value of
the securities held by the Portfolio.
SIGNATURE GUARANTEES
To protect your account, the Fund and Chase Global Funds Services Company
(the "Sub-Administrator") from fraud, signature guarantees are required for
certain redemptions. Signature guarantees are required for (1) redemptions
where the proceeds are to be sent to someone other than the registered
shareowner(s) or the
13
<PAGE>
registered address or (2) share transfer requests. The purpose of signature
guarantees is to verify the identity of the party who has authorized a redemp-
tion.
Signatures must be guaranteed by an "eligible guarantor institution" as de-
fined in Rule 17Ad-15 under the Securities Exchange Act of 1934. Eligible
guarantor institutions include banks, brokers, dealers, credit unions, na-
tional securities exchanges, registered securities associations, clearing
agencies and savings associations. A complete definition of eligible guarantor
institution is available from the Sub-Administrator. Broker-dealers guarantee-
ing signatures must be a member of a clearing corporation or maintain net cap-
ital of at least $100,000. Credit unions must be authorized to issue signature
guarantees. Signature guarantees will be accepted from any eligible guarantor
institution which participates in a signature guarantee program.
The signature guarantee must appear either: (1) on the written request for
redemption; (2) on a separate instrument for assignment ("stock power") which
should specify the total number of shares to be redeemed; or (3) on all stock
certificates tendered for redemption and, if shares held by the Fund are also
being redeemed, on the letter or stock power.
SHAREHOLDER SERVICES
The following supplements the information set forth in the Portfolios' Pro-
spectuses under the heading "Buying, Selling and Exchanging Shares":
EXCHANGE PRIVILEGE
Institutional Class Shares of each Portfolio may be exchanged for Institu-
tional Class Shares of the other Portfolio. In addition, Institutional Class
Shares of each Portfolio may be exchanged for any other Institutional Class
Shares of a Portfolio included in the UAM Funds which is comprised of the Fund
and UAM Funds, Inc. (See the list of Portfolios of the UAM Funds -- Institu-
tional Class Shares at the end of each Portfolio's Prospectus.) Exchange re-
quests should be made by calling the Fund (1-800-638-7983) or by writing to
UAM Funds, UAM Funds Service Center, c/o Chase Global Funds Services Company,
P.O. Box 2798, Boston, MA 02208-2798. The exchange privilege is only available
with respect to Portfolios that are qualified for sale in the shareholder's
state of residence.
Any such exchange will be based on the respective net asset values of the
shares involved. There is no sales commission or charge of any kind. Before
making an exchange into a Portfolio, a shareholder should read its Prospectus
and consider the investment objective of the Portfolio to be purchased. You
may obtain a Prospectus for the Portfolio(s) you are interested in by calling
the UAM Funds Service Center at 1-800-638-7983.
14
<PAGE>
Exchange requests may be made either by mail or telephone. Telephone ex-
changes will be accepted only if the certificates for the shares to be ex-
changed are held by the Fund for the account of the shareholder and the regis-
tration of the two accounts will be identical. Requests for exchanges received
prior to 4:00 p.m. (Eastern Time) will be processed as of the close of busi-
ness on the same day. Requests received after these times will be processed on
the next business day. Neither the Fund nor the Sub-Administrator will be re-
sponsible for the authenticity of the exchange instructions received by tele-
phone. Exchanges may also be subject to limitations as to amounts or frequency
and to other restrictions established by the Board of Trustees to assure that
such exchanges do not disadvantage the Fund and its shareholders.
For Federal income tax purposes an exchange between Portfolios is a taxable
event, and, accordingly, a capital gain or loss may be realized. In a revenue
ruling relating to circumstances similar to the Fund's, an exchange between
series of a Fund was also deemed to be a taxable event. It is likely, there-
fore, that a capital gain or loss would be realized on an exchange between
Portfolios; you may want to consult your tax adviser for further information
in this regard. The exchange privilege may be modified or terminated at any
time.
TRANSFER OF SHARES
Shareholders may transfer shares to another person by making a written re-
quest to the Fund. The request should clearly identify the account and number
of shares to be transferred, and include the signature of all registered own-
ers and all stock certificates, if any, which are subject to the transfer. The
signature on the letter of request, the stock certificate or any stock power
must be guaranteed in the same manner as described under "Redemption of
Shares." As in the case of redemptions, the written request must be received
in good order before any transfer can be made.
INVESTMENT LIMITATIONS
The following limitations supplement those set forth in the Prospectuses.
Whenever an investment limitation sets forth a percentage limitation on in-
vestment or utilization of assets, such limitation shall be determined immedi-
ately after and as a result of a Portfolio's acquisition of such security or
other asset. Accordingly, any later increase or decrease resulting from a
change in values, net assets or other circumstances will not be considered
when determining whether the investment complies with a Portfolio's investment
limitations. Investment limitations (1), (2), (3), (4) and (6) are classified
as fundamental. A Portfolio's fundamental investment limitations cannot be
changed without approval by a "majority of the outstanding shares" (as defined
in the 1940 Act) of the Portfolio. Each Portfolio will not:
(1)invest in physical commodities or contracts on physical commodities;
15
<PAGE>
(2) purchase or sell real estate or real estate limited partnerships, al-
though it may purchase and sell securities of companies which deal in
real estate and may purchase and sell securities which are secured by
interests in real estate;
(3) make loans except (i) by purchasing debt securities in accordance
with its investment objectives and (ii) by lending its portfolio se-
curities to banks, brokers, dealers and other financial institutions
so long as such loans are not inconsistent with the 1940 Act, or the
rules and regulations or interpretations of the Commission thereun-
der;
(4) underwrite the securities of other issuers;
(5) invest in stock, bond or interest rate futures and/or options on
futures unless (i) not more than 5% of the Portfolio's assets are re-
quired as deposit to secure obligations under such futures and/or op-
tions on futures contracts provided, however, that in the case of an
option that is in-the-money at the time of purchase, the in-the-money
amount may be excluded in computing such 5% and (ii) not more than
20% of the Portfolio's assets are invested in stock or bond futures
and options;
(6) issue senior securities, as defined in the 1940 Act, except that this
restriction shall not be deemed to prohibit a Portfolio from (i) mak-
ing any permitted borrowings, mortgages or pledges, or (ii) entering
into options, futures or repurchase transactions;
(7) purchase on margin or sell short except as specified in (5) above;
(8) invest more than an aggregate of 15% of the net assets of the Portfo-
lio, determined at the time of investment, in securities subject to
legal or contractual restrictions on resale or securities for which
there are no readily available markets; and
(9) invest for the purpose of exercising control over management of any
company.
16
<PAGE>
MANAGEMENT OF THE FUND
TRUSTEES AND OFFICERS
The Officers of the Fund manage its day-to-day operations and are responsi-
ble to the Fund's Board of Trustees. The Trustees set broad policies for the
Fund and elect its Officers. The following is a list of the Trustees and Offi-
cers of the Fund and a brief statement of their present positions and princi-
pal occupations during the past five years.
<TABLE>
<S> <C>
JOHN T. BENNETT JR. Trustee of the Fund; President of Squam In-
College Road -- RFD 3 vestment Management Company, Inc. and Great
Meredith, NH 03253 Island Investment Company, Inc.; President
Age 67 of Bennett Management Company from 1988 to
1993.
PHILIP D. ENGLISH Trustee of the Fund; President and Chief
16 West Madison Street Executive Officer of Broventure Company,
Baltimore, MD 21201 Inc.; Chairman of the Board of Chektec Cor-
Age 48 poration and Cyber Scientific, Inc.
WILLIAM A. HUMENUK Trustee of the Fund; Partner in the Phila-
4000 Bell Atlantic Tower delphia office of the law firm Dechert
1717 Arch Street Price & Rhoads; Director, Hofler Corp.
Philadelphia, PA 19103
Age 54
NORTON H. REAMER* Trustee, President and Chairman of the
One International Place Fund; President, Chief Executive Officer
Boston, MA 02110 and a Director of United Asset Management
Age 60 Corporation; Director, Partner or Trustee
of each of the Investment Companies of the
Eaton Vance Group of Mutual Funds.
PETER M. WHITMAN, JR.* Trustee of the Fund; President and Chief
One Financial Center Investment Officer of Dewey Square Invest-
Boston, MA 02111 ors Corporation ("DSI") since 1988; Direc-
Age 53 tor and Chief Executive Officer of H. T.
Investors, Inc., formerly a subsidiary of
DSI.
WILLIAM H. PARK* Vice President of the Fund; Executive Vice
One International Place President and Chief Financial Officer of
Boston, MA 02110 United Asset Management Corporation.
Age 49
</TABLE>
- -----------
* These people are deemed to be "interested persons" of the Fund as that term
is defined in the 1940 Act.
17
<PAGE>
<TABLE>
<S> <C>
GARY L. FRENCH* Treasurer of the Fund; President of UAM
211 Congress Street Fund Services, Inc., and UAM Fund Distribu-
Boston, MA 02110 tors, Inc.; formerly Vice President of Op-
Age 45 erations, Development and Control of Fidel-
ity Investment in 1995; Treasurer of the
Fidelity Group of Mutual Funds from 1991 to
February 1995.
MICHAEL E. DEFAO* Secretary of the Fund; Vice President and
211 Congress Street General Counsel of UAM Fund Services, Inc.
Boston, MA 02110 and UAM Fund Distributors, Inc.; Associate
Age 28 Attorney of Ropes & Gray (a law firm) from
1993 to February 1995.
ROBERT R. FLAHERTY* Assistant Treasurer of the Fund; Vice Pres-
211 Congress Street ident of UAM Fund Services, Inc.; formerly
Boston, MA 02110 Manager of Fund Administration and Compli-
Age 32 ance of Chase Global Funds Services Company
from 1995 to 1996; Deloitte & Touche LLP
from 1985 to 1995, Senior Manager.
KARL O. HARTMANN* Assistant Secretary of the Fund; Senior
73 Tremont Street Vice President and General Counsel of Chase
Boston, MA 02108 Global Funds Services Company; Senior Vice
Age 41 President, Secretary and General Counsel of
Leland, O'Brien, Rubinstein Associates,
Inc., from November 1990 to November 1991.
</TABLE>
- -----------
* These people are deemed to be "interested persons" of the Fund as that term
is defined in the 1940 Act.
REMUNERATION OF TRUSTEES AND OFFICERS
The Fund pays each Trustee, who is not also an officer or affiliated person,
a $150 quarterly retainer fee per active Portfolio which currently amounts to
$1,050 per quarter. In addition, each unaffiliated Trustee receives a $2,000
meeting fee which is aggregated for all the Trustees and allocated proportion-
ately among the Portfolios of the Fund and UAM Funds, Inc. and reimbursement
for travel and other expenses incurred while attending Board meetings. Trust-
ees who are also officers or affiliated persons receive no remuneration for
their service as Trustees. The Fund's officers and employees are paid by ei-
ther the Adviser, United Asset Management Corporation ("UAM"), the Administra-
tor or the Sub-Administrator and receive no compensation from the Fund. As of
December 6, 1996, the Trustees and officers of the Fund owned less than 1% of
the Fund's outstanding shares.
18
<PAGE>
The following table shows aggregate compensation paid to each of the Fund's
Trustees by the Fund and total compensation paid by the Fund, UAM Funds, Inc.
and AEW Commercial Mortgage Securities Fund, Inc. (collectively the "Fund Com-
plex") in the fiscal year ended April 30, 1996.
COMPENSATION TABLE
<TABLE>
<CAPTION>
(1) (2) (3) (4) (5)
PENSION OR TOTAL COMPENSATION
AGGREGATE RETIREMENT BENEFITS ESTIMATED ANNUAL FROM REGISTRANT AND
NAME OF PERSON COMPENSATION ACCRUED AS PART OF BENEFITS UPON FUND COMPLEX
POSITION FROM REGISTRANT FUND EXPENSES RETIREMENT PAID TO TRUSTEES
-------------- --------------- ------------------- ---------------- -------------------
<S> <C> <C> <C> <C>
John T. Bennett, Jr. ... $3,396 0 0 $29,600
Trustee
J. Edward Day........... $3,396 0 0 $29,600
Former Trustee
Philip D. English....... $3,396 0 0 $29,600
Trustee
William A. Humenuk...... $3,396 0 0 $29,600
Trustee
</TABLE>
PRINCIPAL HOLDERS OF SECURITIES
As of December 6, 1996, the following persons or organizations held of rec-
ord or beneficially 5% or more of the shares of a Portfolio:
Chicago Asset Management Value/Contrarian Portfolio: John McNamara, Norton
Reamer, and William Park, Trustees, UAM Proft Sharing & 401k Plan, c/o Chicago
Asset Management Company, 70 W. Madison Street, 56th Floor, Chicago, IL,
58.1%*; Hartnat & Co., F/B/O Montrose CDT, P.O. Box 92800, Rochester, New
York, 18%; Chase Manhattan Bank, Trustee, F/B/O Performance Analytics Inc.,
Profit Sharing Plan, Attn. Alan L. Miller, 770 Broadway Street, 10th Floor,
New York, NY, 5%*.
Chicago Asset Management Intermediate Bond Portfolio: Edward W. Usher, Fran-
cis X. McCartin, Trustees, Pipe Fitters' Pension Fund Local 597, c/o Chicago
Asset Management Company 70 W. Madison Street, 56th Floor, Chicago, IL,
89.2%*; Hartnat & Co., F/B/O American Eurocopter, P.O. Box 4044, Boston, MA,
7.4%*.
The persons or organizations listed above as owning 25% or more of the out-
standing shares of a Portfolio may be presumed to "control" (as that term is
defined in the 1940 Act) such Portfolio. As a result, those persons or organi-
zations
could have the ability to vote a majority of the shares of the Portfolio on
any matter requiring the approval of shareholders of such Portfolio.
- -----------
* Denotes shares held by a trustee or other fiduciary for which beneficial
ownership is disclaimed or presumed disclaimed.
19
<PAGE>
INVESTMENT ADVISER
CONTROL OF ADVISER
Chicago Asset Management Company (the "Adviser") is a wholly-owned subsidi-
ary of UAM, a holding company incorporated in Delaware in December 1980 for
the purpose of acquiring and owning firms engaged primarily in institutional
investment management. Since its first acquisition in August 1983, UAM has ac-
quired or organized approximately 45 such wholly-owned affiliated firms (the
"UAM Affiliated Firms"). UAM believes that permitting UAM Affiliated Firms to
retain control over their investment advisory decisions is necessary to allow
them to continue to provide investment management services that are intended
to meet the particular needs of their respective clients.
Accordingly, after acquisition by UAM, UAM Affiliated Firms continue to op-
erate under their own firm name, with their own leadership and individual in-
vestment philosophy and approach. Each UAM Affiliated Firm manages its own
business independently on a day-to-day basis. Investment strategies employed
and securities selected by UAM Affiliated Firms are separately chosen by each
of them. Several UAM Affiliated Firms also act as investment advisers to sepa-
rate series or Portfolios of UAM Funds, Inc., a registered investment company.
PHILOSOPHY AND STYLE
Chicago Asset Management Value/Contrarian Portfolio. The Adviser views it-
self as an equity manager who, by combining value judgment and contrarian
opinion, strives to outperform the market and other money managers not by mar-
ket timing, but by focusing on the selection of individual securities. Catego-
rized as a large cap, bottom-up, value/contrarian, the Adviser's philosophy
and strategy are qualitative and have remained the same since the inception of
the firm.
Chicago Asset Management Intermediate Bond Portfolio. The Adviser's approach
is predicated on a controlled risk strategy that avoids dependence on interest
rate anticipation while emphasizing value added through sector rotation and
yield curve analysis. The firm seeks to add value by improving the odds in a
risk/reward equation. The Adviser focuses on the more traditional aspects of
active portfolio management by scrutinizing sectors, coupons, call features,
and the shape of the yield curve. Portfolios are constructed for income and
safety.
ADVISORY FEES
As compensation for services rendered by the Adviser under the Investment
Advisory Agreements, the Portfolio pays the Adviser an annual fee in monthly
installments, calculated by applying the following annual percentage rates to
each Portfolio's average daily net assets for the month:
<TABLE>
<S> <C>
Chicago Asset Management Value/Contrarian Portfolio................... 0.625%
Chicago Asset Management Intermediate Bond Portfolio.................. 0.48%
</TABLE>
20
<PAGE>
From December 16, 1994 (date of commencement) to April 30, 1995, the Chicago
Asset Management Value/Contrarian Portfolio paid advisory fees of $0. During
this period, the Adviser voluntarily waived advisory fees of $1,261. For the
fiscal year ended April 30, 1996, the Chicago Asset Management
Value/Contrarian Portfolio paid advisory fees of $0. During this period, the
Adviser voluntarily waived advisory fees of $5,000. Until further notice, the
Adviser has voluntarily agreed to waive its advisory fee and to assume as the
Adviser's own expense certain operating expenses payable by the Portfolio, if
necessary, in order to keep the Portfolio's total annual operating expenses
from exceeding 0.95%.
For the period from January 24, 1995 (date of commencement) to April 30,
1995, the Chicago Asset Management Intermediate Bond Portfolio paid advisory
fees of $0. During this period, the Adviser voluntarily waived advisory fees
of $6,578. For the fiscal year ended April 30, 1996, the Chicago Asset Manage-
ment Intermediate Bond Portfolio paid advisory fees of $0. During this period,
the Adviser voluntarily waived advisory fees of $31,000. Until further notice,
the Adviser has voluntarily agreed to waive its advisory fee and to assume as
the Adviser's own expense certain operating expenses payable by the Portfolio,
if necessary, in order to keep the Portfolio's total annual operating expenses
from exceeding 0.80%.
PORTFOLIO TRANSACTIONS
The Investment Advisory Agreements authorize the Adviser to select the bro-
kers or dealers that will execute the purchases and sales of investment secu-
rities for the Portfolios and directs the Adviser to use its best efforts to
obtain the best execution with respect to all transactions for the Portfolios.
The Adviser may, however, consistent with the interests of the Portfolios, se-
lect brokers on the basis of the research, statistical and pricing services
they provide to the Portfolios. Information and research received from such
brokers will be in addition to, and not in lieu of, the services required to
be performed by the Adviser under the Investment Advisory Agreements. A com-
mission paid to such brokers may be higher than that which another qualified
broker would have charged for effecting the same transaction, provided that
such commissions are paid in compliance with the Securities Exchange Act of
1934, as amended, and that the Adviser determines in good faith that such com-
mission is reasonable in terms either of the transaction or the overall re-
sponsibility of the Adviser to the Portfolios and the Adviser's other clients.
It is not the Fund's practice to allocate brokerage or effect principal
transactions with dealers on the basis of sales of shares which may be made
through broker-dealer firms. However, the Adviser may place portfolio orders
with qualified broker-dealers who refer clients to the Adviser. During the
fiscal years ended April 30, 1995 and April 30, 1996, the entire Fund paid
brokerage commissions of approximately $15,000 and $39,000, respectively.
21
<PAGE>
Some securities considered for investment by the Portfolios may also be ap-
propriate for other clients served by the Adviser. If purchases or sales of
securities consistent with the investment policies of a Portfolio and one or
more of these other clients served by the Adviser is considered at or about
the same time, transactions in such securities will be allocated among the
Portfolio and clients in a manner deemed fair and reasonable by the Adviser.
Although there is no specified formula for allocating such transactions, the
various allocation methods used by the Adviser, and the results of such allo-
cations, are subject to periodic review by the Fund's Board of Trustees.
ADMINISTRATIVE SERVICES
As stated in the Prospectus, the Board of Trustees of the Fund approved a
new Fund Administration Agreement between UAM Fund Services, Inc., a wholly-
owned subsidiary of UAM, and the Fund. The Fund's Trustees also approved a Mu-
tual Fund Services Agreement between UAM Fund Services, Inc. and Chase Global
Funds Services Company. The services provided by UAM Fund Services, Inc. and
Chase Global Funds Services Company and the basis of the fees payable by the
Fund under the Fund Administration Agreement are described in the Portfolios'
Prospectus. Prior to April 15, 1996, Chase Global Funds Services Company or
its predecessor, Mutual Funds Service Company, provided certain administrative
services to the Fund under an Administration Agreement between the Fund and
U.S. Trust Company of New York.
For the period December 16, 1994 to April 30, 1995, administrative services
fees paid to the Sub-Administrator by the Chicago Asset Management
Value/Contrarian Portfolio totaled $12,304. For the period January 24, 1995 to
April 30, 1995, administrative services fees paid to the Sub-Administrator by
the Chicago Asset Management Intermediate Bond Portfolio totaled $9,785. The
basis of the fees paid to the Sub-Administrator for the 1995 fiscal year was
as follows: the Fund paid a monthly fee for its services which on an
annualized basis equaled 0.20% of the first $200 million in combined assets;
plus 0.12% of the next $800 million in combined assets; plus 0.08% on assets
over $1 billion but less than $3 billion; plus 0.06% on assets over $3 bil-
lion. The fees were allocated among the Portfolios on the basis of their rela-
tive assets and were subject to a designated minimum fee schedule per Portfo-
lio, which ranged from $2,000 per month upon inception of a Portfolio to
$70,000 annually after two years. For the fiscal year ended April 30, 1996,
administrative services fees paid to the Sub-Administrator by the Chicago As-
set Management Value/Contrarian Portfolio and the Chicago Asset Management In-
termediate Bond Portfolio totaled $49,477 and $48,360, respectively. For the
period April 15, 1996 to April 30, 1996, UAM Fund Services, Inc. earned $2,523
and $2,640, respectively, from the Chicago Asset Management Value/Contrarian
Portfolio and the Chicago Asset Management Intermediate Bond
22
<PAGE>
Portfolio as Administrator. The services provided by the Administrator and Sub-
Administrator and the basis of the current fees payable are described in the
Portfolios' Prospectuses.
PERFORMANCE CALCULATIONS
PERFORMANCE
The Portfolios may from time to time quote various performance figures to il-
lustrate past performance. Performance quotations by investment companies are
subject to rules adopted by the Commission, which require the use of standard-
ized performance quotations or, alternatively, that every non-standardized per-
formance quotation furnished by the Fund be accompanied by certain standardized
performance information computed as required by the Commission. Current yield
and average annual compounded total return quotations used by the Fund are
based on the standardized methods of computing performance mandated by the Com-
mission. An explanation of those methods used to compute or express performance
follows.
YIELD
Current yield reflects the income per share earned by a Portfolio's invest-
ment. The current yield of a Portfolio is determined by dividing the net in-
vestment income per share earned during a 30-day base period by the maximum of-
fering price per share on the last day of the period and annualizing the re-
sult. Expenses accrued for the period include any fees charged to all share-
holders during the base period. The yield for the Intermediate Bond Portfolio
for the 30-day period ended onOctober 31, 1996 was 5.63%.
A yield figure is obtained using the following formula:
Yield = 2[(a - b + 1)/6/ - 1]
-----
cd
where:
a = dividends and interest earned during the period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of shares outstanding during the period
that were entitled to receive income distributions
d = the maximum offering price per share on the last day of the period.
TOTAL RETURN
The average annual total return of a Portfolio is determined by finding the
average annual compounded rates of return over 1, 5 and 10 year periods that
would equate an initial hypothetical $1,000 investment to its ending redeemable
value. The calculation assumes that all dividends and distributions are rein-
vested when paid. The quotation assumes the amount was completely redeemed at
the end of each 1, 5 and 10 year period and the deduction of all applicable
Fund expenses on an annual basis.
23
<PAGE>
The average annual total rates of return for the Chicago Asset Management
Intermediate Bond Portfolio and Chicago Asset Management Value/Contrarian
Portfolio from inception and for the one year period ended on the date of the
Financial Statements included herein are as follows:
<TABLE>
<CAPTION>
SINCE INCEPTION
ONE YEAR THROUGH YEAR
ENDED ENDED
OCTOBER 31, OCTOBER 31, INCEPTION
1996 1996 DATE
----------- --------------- ---------
<S> <C> <C> <C>
Intermediate Bond Portfolio............ 4.88% 9.09% 1/24/95
Value/Contrarian Portfolio............. 14.26% 19.76% 12/16/94
</TABLE>
These figures are calculated according to the following formula:
P(1 + T)n = ERV
where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment made at
the beginning of the 1, 5 or 10 year periods at the end of the 1,
5 or 10 year periods (or fractional portion thereof).
COMPARISONS
To help investors better evaluate how an investment in either Portfolio of
the Fund might satisfy their investment objective, advertisements regarding
the Fund may discuss various measures of Fund performance as reported by vari-
ous financial publications. Advertisements may also compare performance (as
calculated above) to performance as reported by other investments, indices and
averages. The following publications, indices and averages may be used:
(a) Dow Jones Composite Average or its component averages -- an unmanaged
index composed of 30 blue-chip industrial corporation stocks (Dow
Jones Industrial Average), 15 utilities company stocks and 20 trans-
portation stocks. Comparisons of performance assume reinvestment of
dividends.
(b) Standard & Poor's 500 Stock Index or its component indices -- an un-
managed index composed of 400 industrial stocks, 40 financial stocks,
40 utilities stocks and 20 transportation stocks. Comparisons of per-
formance assume reinvestment of dividend.
(c) The New York Stock Exchange composite or component indices -- unman-
aged indices of all industrial, utilities, transportation and finance
stocks listed on the New York Stock Exchange.
24
<PAGE>
(d) Wilshire 5000 Equity Index or its component indices -- represents the
return on the market value of all common equity securities for which
daily pricing is available. Comparisons of performance assume rein-
vestment of dividends.
(e) Lipper -- Mutual Fund Performance Analysis and Lipper -- Fixed Income
Fund Performance Analysis -- measure total return and average current
yield for the mutual fund industry. Rank individual mutual fund per-
formance over specified time periods, assuming reinvestment of all
distributions, exclusive of any applicable sales charges.
(f) Morgan Stanley Capital International EAFE Index and World Index -- re-
spectively, arithmetic, market value-weighted averages of the perfor-
mance of over 900 securities listed on the stock exchanges of coun-
tries in Europe, Australia and the Far East, and over 1,400 securities
listed on the stock exchanges of these continents, including North
America.
(g) Goldman Sachs 100 Convertible Bond Index -- currently includes 67
bonds and 33 preferred. The original list of names was generated by
screening for convertible issues of 100 million or greater in market
capitalization. The index is priced monthly.
(h) Salomon Brothers GNMA Index -- includes pools of mortgages originated
by private lenders and guaranteed by the mortgage pools of the Govern-
ment National Mortgage Association.
(i) Salomon Brothers High Grade Corporate Bond Index -- consists of pub-
licly issued, non-convertible corporate bonds rated AA or AAA. It is a
value-weighted, total return index, including approximately 800 issues
with maturities of 12 years or greater.
(j) Salomon Brothers Broad Investment Grade Bond -- is a market-weighted
index that contains approximately 4,700 individually priced investment
grade corporate bonds rated BBB or better, U.S. Treasury/agency issues
and mortgage pass through securities.
(k) Lehman Brothers Long-Term Treasury Bond -- is composed of all bonds
covered by the Lehman Brothers Treasury Bond Index with maturities of
10 years or greater.
(l) NASDAQ Industrial Index -- is composed of more than 3,000 industrial
issues. It is a value-weighted index calculated on price change only
and does not include income.
(m) Value Line -- composed of over 1,600 stocks in the Value Line Invest-
ment Survey.
(n) Russell 2000 -- composed of the 2,000 smallest stocks in the Russell
3000, a market value-weighted index of the 3,000 largest U.S. public-
ly-traded companies.
25
<PAGE>
(o) Composite Indices -- 60% Standard & Poor's 500 Stock Index, 30% Lehman
Brothers Long-Term Treasury Bond and 10% U.S. Treasury bills; 70%
Standard & Poor's 500 Stock Index and 30% NASDAQ Industrial Index; 35%
Standard & Poor's 500 Stock Index and 65% Salomon Brothers High Grade
Bond Index; all stocks on the NASDAQ system exclusive of those traded
on an exchange, and 65% Standard & Poor's 500 Stock Index and 35% Sal-
omon Brothers High Grade Bond Index.
(p) CDA Mutual Fund Report published by CDA Investment Technologies,
Inc. -- analyzes price, current yield, risk, total return and average
rate of return (average compounded growth rate) over specified time
periods for the mutual fund industry.
(q) Mutual Fund Source Book published by Morningstar, Inc. -- analyzes
price, yield, risk and total return for equity funds.
(r) Financial publications: Business Week, Changing Times, Financial
World, Forbes, Fortune, Money, Barron's, Consumer's Digest, Financial
Times, Global Investor, Wall Street Journal and Weisenberger Invest-
ment Companies Service -- publications that rate fund performance over
specified time periods.
(s) Consumer Price Index (or Cost of Living Index), published by the U.S.
Bureau of Labor Statistics -- a statistical measure of change over
time in the price of goods and services in major expenditure groups.
(t) Stocks, Bonds, Bills and Inflation, published by Ibbotson Associ-
ates -- historical measure of yield, price and total return for com-
mon and small company stock, long-term government bonds, U.S. Treasury
bills and inflation.
(u) Savings and Loan Historical Interest Rates -- as published by the U.S.
Savings & Loan League Fact Book.
(v) Historical data supplied by the research departments of First Boston
Corporation; the J.P. Morgan companies; Salomon Brothers; Merrill
Lynch, Pierce, Fenner & Smith; Lehman Brothers, Inc.; and Bloomberg
L.P.
(w) Lehman Brothers Intermediate Government/Corporate Index is an unman-
aged index composed of a combination of the Government and Corporate
Bond Indices. All issues are investment grade (BBB) or higher, with
maturities of one to ten years and an outstanding par value of at
least $l00 million for U.S. government issues and $25 million for oth-
ers. 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 non-
convertible corporate debt. Also included are Yankee Bonds and noncon-
vertible
26
<PAGE>
debt issued by or guaranteed by foreign or international governments
and agencies. Any security downgraded during the month is held in the
index until month-end and then removed. All returns are market value
weighted inclusive of accrued income.
(x) Lehman Brothers Government/Corporate Index -- is a combination of the
Government and Corporate Bond Indices. The Government Index includes
public obligations of the U.S. Treasury, issues of government agen-
cies, and corporate debt backed by the U.S. government. The Corporate
Bond Index includes fixed-rate nonconvertible corporate debt. Also in-
cluded are Yankee Bonds and nonconvertible debt issued by or guaran-
teed by foreign or international governments and agencies. All issues
are investment grade (BBB) or higher, with maturities of at least one
year and an outstanding par value of at least $100 million for U.S.
government issues and $25 million for others. Any security downgraded
during the month is held in the index until month-end and then re-
moved. All returns are market value weighted inclusive of accrued in-
come.
In assessing such comparisons of performance, an investor should keep in
mind that the composition of the investments in the reported indices and aver-
ages is not identical to the composition of investments in a Portfolio, that
the averages are generally unmanaged, and that the items included in the cal-
culations of such averages may not be identical to the formula used by the
Portfolio to calculate its performance. In addition, there can be no assurance
that the Portfolio will continue this performance as compared to such other
averages.
GENERAL INFORMATION
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Fund was organized under the name The Regis Fund II as a Delaware busi-
ness trust on May 18, 1994. On October 31, 1995, the name of the Fund was
changed to "UAM Funds Trust". The Fund's principal executive office is located
at One International Place, 44th Floor, Boston, MA 02110; however, all in-
vestor correspondence should be directed to the Fund at UAM Funds Service Cen-
ter, c/o Chase Global Funds Services Company, P.O. Box 2798, Boston, MA 02208-
2798. The Fund's Agreement and Declaration of Trust permits the Fund to issue
an unlimited number of shares of beneficial interest, without par value. The
Trustees have the power to designate one or more series ("Portfolios") or
classes of shares of beneficial interest without further action by sharehold-
ers.
On each matter submitted to a vote of the shareholders, each holder of a
share shall be entitled to one vote for each whole share and a fractional vote
for each fractional share standing in his or her name on the books of the
Fund.
27
<PAGE>
In the event of liquidation of the Fund, the holders of the shares of each
Portfolio or any class thereof that has been established and designated shall
be entitled to receive, when and as declared by the Trustees, the excess of
the assets belonging to that Portfolio, or in the case of a class, belonging
to that Portfolio and allocable to that class, over the liabilities belonging
to that Portfolio or class. The assets so distributable to the holders of
shares of any particular Portfolio or class thereof shall be distributed to
the holders in proportion to the number of shares of that Portfolio or class
thereof held by them and recorded on the books of the Fund. The liquidation of
any Portfolio or class thereof may be authorized at any time by vote of a ma-
jority of the Trustees then in office.
Shareholders of both Classes of the Fund's Portfolios have no pre-emptive or
other rights to subscribe to any additional shares or other securities issued
by the Fund or any Portfolio, except as the Trustees in their sole discretion
shall have determined by vote. Both Institutional Class and Service Class
Shares represent an interest in the same assets of a Portfolio and are identi-
cal in all respects except that the Service Class Shares bear certain expenses
related to shareholder servicing and the distribution of such shares, and have
exclusive voting rights with respect to matters relating to such distribution
expenditures.
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
The Fund's policy is to distribute substantially all of each Portfolio's net
investment income, if any, together with any net realized capital gains annu-
ally in the amount and at the times that will avoid both income (including
capital gains) taxes incurred and the imposition of the Federal excise tax on
undistributed income and capital gains. The amounts of any income dividends or
capital gains distributions cannot be predicted. See discussion under "Divi-
dends, Capital Gains Distributions and Taxes" in the Prospectuses.
Any dividend or distribution paid shortly after the purchase of shares of a
Portfolio by an investor may have the effect of reducing the per share net as-
set value of the Portfolio by the per share amount of the dividend or distri-
bution. Furthermore, such dividends or distributions, although in effect a re-
turn of capital, are subject to income taxes as set forth in the Prospectuses.
As set forth in the Prospectuses, unless the shareholder elects otherwise in
writing, all dividend and capital gains distributions are automatically re-
ceived in additional shares of the respective Portfolio of the Fund at net as-
set value (as of the business day following the record date). This will remain
in effect until the Fund is notified by the shareholder in writing at least
three days prior to the record date that either the Income Option (income div-
idends in cash and capital gains distributions in additional shares at net as-
set value) or the Cash Option (both income dividends and capital gains distri-
butions in cash) has been elected. An account statement is sent to sharehold-
ers whenever an income dividend or capital gains distribution is paid.
28
<PAGE>
Each Portfolio of the Fund will be treated as a separate entity (and hence
as a separate "regulated investment company") for Federal tax purposes. Any
net capital gains recognized by a Portfolio will be distributed to its invest-
ors without need to offset (for Federal income tax purposes) such gains
against any net capital losses realized by another Portfolio.
CODE OF ETHICS
The Fund has adopted a Code of Ethics which restricts to a certain extent
personal transactions by access persons of the Fund and imposes certain dis-
closure and reporting obligations.
FEDERAL TAXES
In order for each Portfolio to continue to qualify for Federal income tax
treatment as a regulated investment company under the Internal Revenue Code of
1986, as amended (the "Code"), at least 90% of each Portfolio's gross income
for a taxable year must be derived from certain qualifying income, i.e., divi-
dends, interest, income derived from loans of securities and gains from the
sale or other disposition of stock, securities or foreign currencies, or other
related income, including gains from options, futures and forward contracts,
derived with respect to its business investing in stock, securities or curren-
cies. Any net gain realized from the closing out of futures contracts will,
therefore, generally be qualifying income for purposes of the 90% requirement.
Qualification as a regulated investment company also requires that less than
30% of a Portfolio's gross income be derived from the sale or other disposi-
tion of stock, securities, options, futures or forward contracts (including
certain foreign currencies not directly related to the Fund's business of in-
vesting in stock or securities) held less than three months. In order to avoid
realizing excessive gains on securities held for less than three months, the
Portfolio may be required to defer the closing out of futures contracts beyond
the time when it would otherwise be advantageous to do so. It is anticipated
that unrealized gains on futures contracts which have been open for less than
three months as of the end of a Portfolio's taxable year, and which are recog-
nized for tax purposes, will not be considered gains on securities held for
less than three months for the purposes of the 30% test.
Except for transactions the Portfolios have identified as hedging transac-
tions, in general each Portfolio is required for Federal income tax purposes
to recognize as income for each taxable year its net unrealized gains and
losses on some forward currency and some futures contracts as of the end of
each taxable year as well as those actually realized during the year. In most
cases, any such gain or loss recognized with respect to a regulated futures
contract is considered to be 60% long-term capital gain or loss and 40% short-
term capital gain or loss without regard to the holding period of the con-
tract. Recognized gain or loss attributable to a foreign currency forward con-
tract is treated as 100% ordinary income. Furthermore, for-
29
<PAGE>
eign currency futures contracts which are intended to hedge against a change
in the value of securities held by a Portfolio may affect the holding period
of such securities and, consequently, the nature of the gain or loss on such
securities upon disposition.
Each Portfolio will distribute to shareholders annually any net capital
gains which have been recognized for Federal income tax purposes (including
unrealized gains at the end of the Portfolio's taxable year on futures trans-
actions). Such distribution will be combined with distributions of capital
gains realized on the Portfolio's other investments, and shareholders will be
advised as to the character of the payment.
FINANCIAL STATEMENTS
The Financial Statements of the Chicago Asset Management Value/Contrarian
and Intermediate Bond Portfolios for the fiscal year ended April 30, 1996 and
the six-month period ended October 31, 1996, and the Financial Highlights for
the respective periods presented which appear in the Portfolios' 1996 Annual
Financial Statements (and the reports thereon of Price Waterhouse LLP, the
Fund's independent accountants, also appearing therein) and in the Semi-Annual
Report to Shareholders are attached to this SAI.
30
<PAGE>
APPENDIX -- DESCRIPTION OF SECURITIES AND CORPORATE BOND RATINGS
I. DESCRIPTION OF CORPORATE BOND RATINGS
MOODY'S INVESTORS SERVICE, INC.'S CORPORATE BOND RATINGS:
AAA -- Bonds which are rated Aaa are judged to be the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt-edge." Interest payments are protected by a large or by an exceptionally
stable margin, and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.
AA -- Bonds which are rated Aa are judged to be of high quality by all stan-
dards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protec-
tive elements may be of greater amplitude or there may be other elements pres-
ent which make the long-term risks appear somewhat larger than in Aaa securi-
ties.
Moody's applies numerical modifiers 1, 2 and 3 in the Aa and A rating cate-
gories. The modifier 1 indicates that the security ranks at a higher end of
the rating category, modifier 2 indicates a mid-range rating and the modifier
3 indicates that the issue ranks at the lower end of the rating category.
A -- Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving se-
curity to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment sometime in the future.
BAA -- Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
BA -- Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of in-
terest and principal payments may be very moderate, and thereby not well safe-
guarded during both good and bad times over the future. Uncertainty of posi-
tion characterizes bonds in this class.
B -- Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contact over any long period of time may be small.
A-1
<PAGE>
CAA -- Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal
or interest.
CA -- Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other marked short-
comings.
C -- Bonds which are rated C are the lowest rated class of bonds, and issues
so rated can be regarded as having extremely poor prospects of ever attaining
any real investment standing.
STANDARD & POOR'S CORPORATION'S CORPORATE BOND RATINGS:
AAA -- Bonds rated AAA have the highest rating assigned by Standard & Poor's
to a debt obligation and indicate an extremely strong capacity to pay princi-
pal and interest.
AA -- Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only to a small degree.
A -- Bonds rated A have a strong capacity to pay interest and repay princi-
pal although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than bonds in higher rated
categories.
BBB -- Debt rated BBB is regarded as having an adequate capacity to pay in-
terest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than for debt in higher rated categories.
BB, B, CCC, CC -- Debt rated BB, B, CCC and CC is regarded, on balance, as
predominantly speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation. BB indicates the
lowest degree of speculation and CC the highest degree of speculation. While
such debt will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse con-
ditions.
C -- The rating C is reserved for income bonds on which no interest is being
paid.
D -- Debt rated D is in default, and payment of interest and/or repayment of
principal is in arrears.
II. DESCRIPTION OF U.S. GOVERNMENT SECURITIES
The term "U.S. Government Securities" refers to a variety of securities
which are issued or guaranteed by the United States Government, and by various
instrumentalities which have been established or sponsored by the United
States Government.
A-2
<PAGE>
U.S. Treasury securities are backed by the "full faith and credit" of the
United States. Securities issued or guaranteed by Federal agencies and U.S.
Government sponsored instrumentalities may or may not be backed by the full
faith and credit of the United States.
In the case of securities not backed by the full faith and credit of the
United States, the investor must look principally to the agency or instrumen-
tality issuing or guaranteeing the obligation for ultimate repayment, and may
not be able to assess a claim against the United States itself in the event
the agency or instrumentality does not meet its commitment. Agencies which are
backed by the full faith and credit of the United States include the Export-
Import Bank, Farmers Home Administration, Federal Financing Bank, and others.
Certain agencies and instrumentalities, such as the GNMA are, in effect,
backed by the full faith and credit of the United States through provisions in
their charters that they may make "indefinite and unlimited" drawings on the
U.S. Treasury, if needed to service its debt. Debt from certain other agencies
and instrumentalities, including the Federal Home Loan Bank and FNMA, is not
guaranteed by the United States, but those institutions are protected by the
discretionary authority of the U.S. Treasury to purchase certain amounts of
their securities to assist the institution in meeting its debt obligations.
Finally, other agencies and instrumentalities, such as the Farm Credit System
and the FHLMC, are federally chartered institutions under Government supervi-
sion, but their debt securities are backed only by the credit worthiness of
those institutions, not the U.S. Government.
Some of the U.S. Government agencies that issue or guarantee securities in-
clude the Export-Import Bank of the United States, Farmers Home Administra-
tion, Federal Housing Administration, Maritime Administration, Small Business
Administration, and the Tennessee Valley Authority.
III. DESCRIPTION OF COMMERCIAL PAPER
The Portfolios may invest in commercial paper (including variable amount
master demand notes) rated A-1 or better by S&P or Prime-1 by Moody's or by
S&P. Commercial paper refers to short-term, unsecured promissory notes issued
by corporations to finance short-term credit needs. Commercial paper is usu-
ally sold on a discount basis and has a maturity at the time of issuance not
exceeding nine months. Variable amount master demand notes are demand obliga-
tions that permit the investment of fluctuating amounts at varying market
rates of interest pursuant to arrangement between the issuer and a commercial
bank acting as agent for the payees of such notes whereby both parties have
the right to vary the amount of the outstanding indebtedness on the notes. As
variable amount master demand notes are direct lending arrangements between a
lender and a borrower, it is not generally contemplated that such instruments
will be traded, and there is no secondary market for these notes, although
they are redeemable (and thus immediately repayable by the borrower) at face
value, plus accrued interest, at any time. In connection with the Portfolio's
investment in variable amount master demand notes, the Adviser's
A-3
<PAGE>
investment management staff will monitor, on an ongoing basis, the earning
power, cash flow and other liquidity ratios of the issuer and the borrower's
ability to pay principal and interest on demand.
Commercial paper rated A-1 by S&P has the following characteristics: (1) li-
quidity ratios are adequate to meet cash requirements; (2) long-term senior
debt is rated "A" or better; (3) the issuer has access to at least two addi-
tional channels of borrowing; (4) basic earnings and cash flow have an upward
trend with allowance made for unusual circumstances; (5) typically, the is-
suer's industry is well established, and the issuer has a strong position
within the industry; and (6) the reliability and quality of management are un-
questioned. Relative strength or weakness of the above factors determine
whether the issuer's commercial paper is A-1, A-2 or A-3. The rating Prime-1
is the highest commercial paper rating assigned by Moody's. Among the factors
considered by Moody's in assigning ratings are the following: (1) evaluation
of the management of the issuer; (2) economic evaluation of the issuer's in-
dustry or industries and the appraisal of speculative-type risks which may be
inherent in certain areas; (3) evaluation of the issuer's products in relation
to completion and customer acceptance; (4) liquidity; (5) amount and quality
of long term debt; (6) trend of earnings over a period of ten years; (7) fi-
nancial strength of a parent company and the relationships which exist with
the issuer; and (8) recognition by the management of issuer of obligations
which may be present or may arise as a result of public interest questions and
preparations to meet such obligations.
IV. DESCRIPTION OF BANK OBLIGATIONS
Time deposits are non-negotiable deposits maintained in a banking institu-
tion for a specified period of time at a stated interest rate. Certificates of
deposit are negotiable short-term obligations of commercial banks. Variable
rate certificates of deposit are certificates of deposit on which the interest
rate is periodically adjusted prior to their stated maturity based upon a
specified market rate. As a result of these adjustments, the interest rate on
these obligations may increase or decrease periodically. Frequently, dealers
selling variable rate certificates of deposit to the Portfolio will agree to
repurchase such instruments, at the Portfolio's option, at par on or near the
coupon dates. The dealers' obligations to repurchase these instruments are
subject to conditions imposed by various dealers. Such conditions typically
are the continued credit standing of the issuer and the existence of reasona-
bly orderly market conditions. The Portfolio is also able to sell variable
rate certificates of deposit in the secondary market. Variable rate certifi-
cates of deposit normally carry a higher interest rate than comparable fixed
rate certificates of deposit. A banker's acceptance is a time draft drawn on a
commercial bank by a borrower usually in connection with an international com-
mercial transaction to finance the import, export, transfer or storage of
goods. The borrower is liable for payment as well as the bank which uncondi-
tionally guarantees to pay the draft at its face amount on the maturity date.
Most acceptances have maturities of six months or less and are traded in the
secondary markets prior to maturity.
A-4
<PAGE>
CHICAGO ASSET MANAGEMENT VALUE/CONTRARIAN PORTFOLIO
PORTFOLIO OF INVESTMENTS
October 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE+
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (97.0%)
- -------------------------------------------------------------------------------
AEROSPACE & DEFENSE (6.1%)
Raytheon Co................................................. 900 $ 44,325
United Technologies Corp.................................... 250 32,187
----------
76,512
- -------------------------------------------------------------------------------
AUTOMOTIVE (6.5%)
Ford Motor Co............................................... 1,300 40,625
General Motors Corp......................................... 750 40,406
----------
81,031
- -------------------------------------------------------------------------------
BANKS (6.3%)
Banc One Corp............................................... 925 39,197
BankAmerica Corp............................................ 425 38,887
----------
78,084
- -------------------------------------------------------------------------------
BEVERAGES, FOOD & TOBACCO (9.9%)
General Mills, Inc.......................................... 650 37,131
IBP, Inc.................................................... 1,800 45,000
Sysco Corp.................................................. 1,225 41,650
----------
123,781
- -------------------------------------------------------------------------------
BROADCASTING & PUBLISHING (2.7%)
Deluxe Corp................................................. 1,025 33,441
- -------------------------------------------------------------------------------
CHEMICALS (5.8%)
Dow Chemical Co............................................. 500 38,875
Ethyl Corp.................................................. 4,100 33,825
----------
72,700
- -------------------------------------------------------------------------------
CONSUMER DURABLES (2.1%)
Goodyear Tire & Rubber Co................................... 575 26,378
- -------------------------------------------------------------------------------
ELECTRONICS (3.2%)
AMP, Inc.................................................... 1,175 39,803
- -------------------------------------------------------------------------------
ENERGY (5.9%)
Mobil Corp.................................................. 250 29,187
Tenneco, Inc................................................ 900 44,550
----------
73,737
- -------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-4
<PAGE>
CHICAGO ASSET MANAGEMENT VALUE/CONTRARIAN PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
October 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE+
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
- -------------------------------------------------------------------------------
HEALTH CARE (3.3%)
United Healthcare Corp...................................... 1,100 $ 41,663
- -------------------------------------------------------------------------------
INSURANCE (3.5%)
Chubb Corp.................................................. 875 43,750
- -------------------------------------------------------------------------------
LODGING & RESTAURANTS (3.1%)
Darden Restaurants, Inc..................................... 4,650 38,944
- -------------------------------------------------------------------------------
MANUFACTURING (9.4%)
Eastman Kodak Co............................................ 500 39,875
General Electric Co......................................... 375 36,281
Whitman Corp................................................ 1,675 40,619
----------
116,775
- -------------------------------------------------------------------------------
PAPER & PACKAGING (6.5%)
International Paper Co...................................... 975 41,681
Weyerhaeuser Co............................................. 850 38,994
----------
80,675
- -------------------------------------------------------------------------------
PHARMACEUTICALS (6.1%)
Pharmacia & Upjohn, Inc..................................... 1,000 36,000
Warner Lambert Co........................................... 625 39,766
----------
75,766
- -------------------------------------------------------------------------------
RETAIL (6.4%)
Nordstrom, Inc.............................................. 1,150 41,400
The Limited, Inc............................................ 2,100 38,588
----------
79,988
- -------------------------------------------------------------------------------
TECHNOLOGY (7.0%)
Apple Computer, Inc......................................... 1,975 45,425
International Business Machines Corp........................ 325 41,925
----------
87,350
- -------------------------------------------------------------------------------
TELECOMMUNICATIONS (3.2%)
AT&T Corp................................................... 1,150 40,106
- -------------------------------------------------------------------------------
TOTAL COMMON STOCKS (COST $1,094,497)........................ 1,210,484
- -------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-5
<PAGE>
CHICAGO ASSET MANAGEMENT VALUE/CONTRARIAN PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
October 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
- -----------------------------------------------------------------------------
<S> <C> <C>
SHORT-TERM INVESTMENT (5.7%)
- -----------------------------------------------------------------------------
REPURCHASE AGREEMENT
Chase Securities, Inc. 5.58%, dated 10/31/96, due
11/1/96, to be repurchased at $71,011, collateralized
by $68,629 of various U.S. Treasury Notes, 5.875%-
7.75%, due 3/31/99-11/30/99, valued at $71,000
(COST $71, 000)...................................... $71,000 $ 71,000
- -----------------------------------------------------------------------------
TOTAL INVESTMENTS (102.7%) (COST $1,165,497)(A).......... 1,281,484
- -----------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (NET) (-2.7%)............... (33,482)
- -----------------------------------------------------------------------------
NET ASSETS (100%)........................................ $1,248,002
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
</TABLE>
+ See Note A to Financial Statements.
(a) The cost for federal income tax purposes was $1,165,497. At October 31,
1996, net unrealized appreciation for all securities based on tax cost was
$115,987. This consisted of aggregate gross unrealized appreciation for all
securities of $161,373 and aggregate gross unrealized depreciation for all
securities of $45,386.
The accompanying notes are an integral part of the financial statements.
F-6
<PAGE>
CHICAGO ASSET MANAGEMENT INTERMEDIATE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS
October 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
- -------------------------------------------------------------------------------
<S> <C> <C>
CORPORATE BONDS & NOTES (63.4%)
- -------------------------------------------------------------------------------
BANKS (15.5%)
BankAmerica Corp. 7.625%, 6/15/04......................... $250,000 $ 260,350
Northern Trust Co. 6.50%, 5/1/03.......................... 250,000 246,360
Norwest Corp. 7.70%, 11/15/97............................. 250,000 254,588
State Street Boston Corp. 7.35%, 6/15/26.................. 250,000 261,095
SunTrust Banks, Inc. 6.00%, 2/15/26....................... 275,000 259,352
----------
1,281,745
- -------------------------------------------------------------------------------
FINANCIAL SERVICES (15.2%)
Associates Corp. of North America 7.75%, 2/15/05 ......... 250,000 266,690
Exxon Capital Corp. 6.625%, 8/15/02....................... 9,000 9,030
Exxon Capital Corp. 7.875%, 8/15/97....................... 105,000 106,711
Ford Motor Credit Co.--Global Bond 6.25%, 11/8/00......... 250,000 247,940
General Electric Credit Corp. 7.85%, 2/1/97............... 250,000 251,335
General Motors Acceptance Corp. 8.00%, 5/2/97............. 250,000 252,792
IBM Credit Corp. 6.375%, 11/1/97.......................... 125,000 125,636
----------
1,260,134
- -------------------------------------------------------------------------------
INDUSTRIAL (16.7%)
Heinz (H.J.) Co. 5.50%, 9/15/97........................... 278,000 277,261
Hertz Corp. 8.30%, 2/2/98................................. 250,000 256,805
PepsiCo, Inc. 6.25%, 9/1/99............................... 250,000 249,260
Shell Oil Co. 6.625%, 7/1/99.............................. 250,000 252,793
WMX Technologies, Inc. 6.25%, 10/15/00.................... 250,000 248,520
WMX Technologies, Inc. 7.00%, 10/15/06.................... 100,000 100,600
----------
1,385,239
- -------------------------------------------------------------------------------
PHARMACEUTICALS (1.1%)
Merck & Co. 6.00%, 1/15/97................................ 90,000 90,077
- -------------------------------------------------------------------------------
RETAIL (8.3%)
J.C. Penney & Co. 5.375%, 11/15/98........................ 53,000 52,292
J.C. Penney & Co. 6.90%, 8/15/26.......................... 200,000 202,362
Motorola, Inc. 6.50%, 9/1/25.............................. 300,000 299,082
Wal-Mart Stores, Inc. 6.375%, 3/1/03...................... 140,000 138,583
----------
692,319
- -------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-7
<PAGE>
CHICAGO ASSET MANAGEMENT INTERMEDIATE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
October 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
- -------------------------------------------------------------------------------
<S> <C> <C>
CORPORATE BONDS & NOTES--(CONTINUED))
- -------------------------------------------------------------------------------
UTILITIES (6.6%)
Florida Power & Light Co. 5.50%, 7/1/99................... $150,000 $ 147,497
Pennsylvania Power & Light Co. 5.50%, 4/1/98.............. 150,000 148,926
Virginia Electric Power Co. 6.25%, 8/1/98................. 250,000 250,825
----------
547,248
- -------------------------------------------------------------------------------
TOTAL CORPORATE BONDS & NOTES (COST $5,162,685)............ 5,256,762
- -------------------------------------------------------------------------------
U.S. GOVERNMENT SECURITIES (26.2%)
- -------------------------------------------------------------------------------
U.S. TREASURY NOTES
6.75%, 2/28/97............................................ 250,000 251,093
6.125%, 5/31/97........................................... 550,000 551,974
5.875%, 7/31/97........................................... 175,000 175,520
7.75%, 1/31/00............................................ 500,000 526,015
5.25%, 1/31/01............................................ 250,000 243,165
7.50%, 11/15/01........................................... 250,000 264,765
7.50%, 5/15/02............................................ 50,000 53,195
6.875%, 5/15/06........................................... 100,000 103,531
- -------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT SECURITIES (COST $2,123,922)......... 2,169,258
- -------------------------------------------------------------------------------
AGENCY SECURITIES (8.1%)
- -------------------------------------------------------------------------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION
5.37%, 2/7/01............................................. 250,000 242,070
6.40%, 9/27/05............................................ 200,000 196,968
5.875%, 2/2/06............................................ 250,000 236,952
- -------------------------------------------------------------------------------
TOTAL AGENCY SECURITIES (COST $691,861).................... 675,990
- -------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-8
<PAGE>
CHICAGO ASSET MANAGEMENT INTERMEDIATE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
October 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
- -------------------------------------------------------------------------------
<S> <C> <C>
SHORT-TERM INVESTMENT (0.5%)
- -------------------------------------------------------------------------------
REPURCHASE AGREEMENT
Chase Securities, Inc. 5.58%, dated 10/31/96, due 11/1/96,
to be repurchased at $44,007, collateralized by $42,531
of various U.S. Treasury Notes, 5.875%-7.75%, due
3/31/99-11/30/99, valued at $44,000 (COST $44,000)...... $ 44,000 $ 44,000
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS (98.2%)
(COST $8,022,468)(A)..................................... 8,146,010
- -------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (NET) (1.8%).................. 147,345
- -------------------------------------------------------------------------------
NET ASSETS (100%).......................................... $8,293,355
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
+ See Note A to Financial Statements
(a) The cost for federal income and book tax purposes was $8,022,468. At
October 31, 1996, net unrealized appreciation for all securities based on
tax cost was $123,542. This consisted of aggregate gross unrealized
appreciation for all securities of $177,875 and aggregate gross unrealized
depreciation for all securities of $54,333.
The accompanying notes are an integral part of the financial statements.
F-9
<PAGE>
CHICAGO ASSET MANAGEMENT PORTFOLIOS
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
CHICAGO ASSET CHICAGO ASSET
MANAGEMENT MANAGEMENT
VALUE/ INTERMEDIATE
CONTRARIAN BOND
PORTFOLIO PORTFOLIO
- -------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments, at Cost.............................. $1,165,497 $8,022,468
========== ==========
Investments, at Value............................. $1,281,484 $8,146,010
Cash.............................................. 9,255 4,945
Deferred Organization Costs--Note A............... 13,908 15,680
Receivable due from Investment Adviser--Note B.... 10,038 5,572
Dividends Receivable.............................. 2,286 --
Receivable for Portfolio Shares Sold.............. 2,217 593
Interest Receivable............................... 11 147,013
Other Assets...................................... 30 324
- -------------------------------------------------------------------------------
Total Assets..................................... 1,319,229 8,320,137
- -------------------------------------------------------------------------------
LIABILITIES
Payable for Investments Purchased................. 51,244 --
Payable for Administrative Fees--Note C........... 6,469 6,615
Payable for Trustees' Fees--Note F................ 612 602
Other Liabilities................................. 12,902 19,565
- -------------------------------------------------------------------------------
Total Liabilities................................ 71,227 26,782
- -------------------------------------------------------------------------------
NET ASSETS......................................... $1,248,002 $8,293,355
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
Paid in Capital................................... $1,050,844 $8,093,236
Undistributed Net Investment Income............... 2,108 58,078
Accumulated Net Realized Gain..................... 79,063 18,499
Unrealized Appreciation........................... 115,987 123,542
- -------------------------------------------------------------------------------
NET ASSETS......................................... $1,248,002 $8,293,355
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
INSTITUTIONAL CLASS SHARES
Shares Issued and Outstanding (Unlimited
authorization, no par value).................... 94,189 791,267
Net Asset Value, Offering and Redemption Price Per
Share........................................... $ 13.25 $ 10.48
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-10
<PAGE>
CHICAGO ASSET MANAGEMENT PORTFOLIOS
STATEMENT OF OPERATIONS
For the Six Months Ended October 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
CHICAGO ASSET CHICAGO ASSET
MANAGEMENT MANAGEMENT
VALUE/ INTERMEDIATE
CONTRARIAN BOND
PORTFOLIO PORTFOLIO
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends....................... $ 13,071 $ --
Interest........................ 709 272,708
- --------------------------------------------------------------------------------
Total Income................... 13,780 272,708
- --------------------------------------------------------------------------------
EXPENSES
Investment Advisory Fees--Note B
Basic Fees..................... $ 3,355 $ 19,555
Less: Fees Waived.............. (3,355) -- (19,555) --
------- --------
Administrative Fees--Note C..... 37,029 38,740
Custodian Fees--Note D.......... 761 594
Audit Fees...................... 6,886 6,944
Printing Fees................... 7,041 5,596
Trustees' Fees--Note F.......... 1,236 1,273
Registration Fees............... 6,013 6,225
Amortization of Organization
Expense--Note A............... 2,243 946
Other Expenses.................. 541 1,785
Fees Assumed by Adviser--
Note B........................ (56,421) (29,178)
- --------------------------------------------------------------------------------
Total Expenses................. 5,329 32,925
Expense Offset--Note A.......... (241) (393)
- --------------------------------------------------------------------------------
Net Expenses................... 5,088 32,532
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME............ 8,692 240,176
- --------------------------------------------------------------------------------
NET REALIZED GAIN ON
INVESTMENTS.................... 43,838 6,693
NET CHANGE IN UNREALIZED
APPRECIATION/DEPRECIATION OF
INVESTMENTS.................... (72,681) 69,999
- --------------------------------------------------------------------------------
NET GAIN (LOSS) ON INVESTMENTS... (28,843) 76,692
- --------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS..................... $(20,151) $316,868
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-11
<PAGE>
CHICAGO ASSET MANAGEMENT VALUE/CONTRARIAN PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
OCTOBER 31, YEAR ENDED
1996 APRIL 30,
(UNAUDITED) 1996
- ----------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income................................... $ 8,692 $ 12,039
Net Realized Gain....................................... 43,838 52,560
Net Change in Unrealized Appreciation/Depreciation...... (72,681) 130,882
- ----------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from
Operations........................................... (20,151) 195,481
- ----------------------------------------------------------------------------------
DISTRIBUTIONS:
Net Investment Income................................... (11,958) (14,741)
Net Realized Gain....................................... -- (19,147)
- ----------------------------------------------------------------------------------
Total Distributions.................................... (11,958) (33,888)
- ----------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS: (1)
Issued--Regular......................................... 445,492 79,245
--In Lieu of Cash Distributions....................... 11,343 31,757
Redeemed................................................ (68,528) (76,406)
- ----------------------------------------------------------------------------------
Net Increase from Capital Share Transactions........... 388,307 34,596
- ----------------------------------------------------------------------------------
Total Increase.......................................... 356,198 196,189
Net Assets:
Beginning of Period..................................... 891,804 695,615
- ----------------------------------------------------------------------------------
End of Period (including undistributed net investment
income of $2,108 and $5,373, respectively)............ $1,248,002 $891,804
- ----------------------------------------------------------------------------------
(1)Shares Issued and Redeemed:
Shares Issued........................................... 33,560 6,326
In Lieu of Cash Distributions........................... 847 2,606
Redeemed................................................ (5,450) (6,135)
- ----------------------------------------------------------------------------------
28,957 2,797
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-12
<PAGE>
CHICAGO ASSET MANAGEMENT INTERMEDIATE BOND PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
OCTOBER 31, YEAR ENDED
1996 APRIL 30,
(UNAUDITED) 1996
- ----------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income.................................. $ 240,176 $ 404,686
Net Realized Gain...................................... 6,693 60,194
Net Change in Unrealized Appreciation/Depreciation..... 69,999 (78,098)
- ----------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations.. 316,868 386,782
- ----------------------------------------------------------------------------------
DISTRIBUTIONS:
Net Investment Income.................................. (240,268) (388,730)
Net Realized Gain...................................... -- (48,388)
- ----------------------------------------------------------------------------------
Total Distributions................................... (240,268) (437,118)
- ----------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS: (1)
Issued--Regular........................................ 129,327 2,481,207
--In Lieu of Cash Distributions...................... 239,779 435,292
Redeemed............................................... (133,442) (151,965)
- ----------------------------------------------------------------------------------
Net Increase from Capital Share Transactions.......... 235,664 2,764,534
- ----------------------------------------------------------------------------------
Total Increase......................................... 312,264 2,714,198
Net Assets:
Beginning of Period.................................... 7,981,091 5,266,893
- ----------------------------------------------------------------------------------
End of Period (including undistributed net investment
income of $58,078 and $58,170, respectively)......... $8,293,355 $7,981,091
- ----------------------------------------------------------------------------------
(1)Shares Issued and Redeemed:
Shares Issued......................................... 12,518 231,545
In Lieu of Cash Distributions......................... 23,237 41,292
Redeemed.............................................. (12,853) (14,328)
- ----------------------------------------------------------------------------------
22,902 258,509
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-13
<PAGE>
CHICAGO ASSET MANAGEMENT VALUE/CONTRARIAN PORTFOLIO
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS
ENDED DECEMBER 16,
OCTOBER 31, YEAR ENDED 1994** TO
1996 APRIL 30, APRIL 30,
(UNAUDITED) 1996 1995
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD....... $ 13.67 $ 11.14 $10.00
- -------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income..................... 0.09 0.19 0.05
Net Realized and Unrealized Gain (Loss) on
Investments............................. (0.36) 2.86 1.13
- -------------------------------------------------------------------------------
Total from Investment Operations......... (0.27) 3.05 1.18
- -------------------------------------------------------------------------------
DISTRIBUTIONS
Net Investment Income..................... (0.15) (0.23) (0.04)
Net Realized Gain......................... -- (0.29) --
- -------------------------------------------------------------------------------
Total Distributions...................... (0.15) (0.52) (0.04)
- -------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD............. $ 13.25 $ 13.67 $11.14
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
TOTAL RETURN+.............................. (1.98)% 28.00% 11.81%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands)..... $ 1,248 $ 892 $ 696
Ratio of Expenses to Average Net Assets... 0.99%* 1.06% 0.95%*
Ratio of Net Investment Income to Average
Net Assets.............................. 1.62%* 1.51% 1.54%*
Portfolio Turnover Rate................... 17% 33% 4%
Average Commission Rate#.................. $0.0585 $0.0600 N/A
- -------------------------------------------------------------------------------
Voluntary Waived Fees and
Expenses Assumed by the Adviser Per
Share.................................. $ 0.62 $ 1.50 $ 0.58
Ratio of Expenses to Average Net
Assets Including Expense Offsets......... 0.95%* 0.95% 0.95%*
- -------------------------------------------------------------------------------
</TABLE>
* Annualized
** Commencement of Operations
+ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser during the periods indicated.
# Beginning with fiscal year 1996, the Portfolio is required to disclose the
average commission rate per share it paid for portfolio trades, on which
commissions were charged, during the period.
The accompanying notes are an integral part of the financial statements.
F-14
<PAGE>
CHICAGO ASSET MANAGEMENT INTERMEDIATE BOND PORTFOLIO
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS
ENDED JANUARY 24,
OCTOBER 31, YEAR ENDED 1995** TO
1996 APRIL 30, APRIL 30,
(UNAUDITED) 1996 1995
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD........ $10.39 $10.33 $10.00
- -------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income...................... 0.31 0.64 0.17
Net Realized and Unrealized Gain on
Investments++............................ 0.09 0.14 0.26
- -------------------------------------------------------------------------------
Total from Investment Operations.......... 0.40 0.78 0.43
- -------------------------------------------------------------------------------
DISTRIBUTIONS
Net Investment Income...................... (0.31) (0.64) (0.10)
Net Realized Gain.......................... -- (0.08) --
- -------------------------------------------------------------------------------
Total Distributions....................... (0.31) (0.72) (0.10)
- -------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD.............. $10.48 $10.39 $10.33
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
TOTAL RETURN+............................... 3.92% 7.62% 4.31%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands)...... $8,293 $7,981 $5,267
Ratio of Expenses to Average Net Assets.... 0.81%* 0.84% 0.80%*
Ratio of Net Investment Income to Average
Net Assets............................... 5.89%* 6.17% 6.20%*
Portfolio Turnover Rate.................... 13% 24% 0%
- -------------------------------------------------------------------------------
Voluntary Waived Fees and Expenses Assumed
by the Adviser Per Share................. $ 0.06 $ 0.12 $ 0.08
Ratio of Expenses to Average Net Assets
Including Expense Offsets................ 0.80%* 0.80% 0.80%*
- -------------------------------------------------------------------------------
</TABLE>
* Annualized
** Commencement of Operations
+ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser for the periods indicated.
++ The amount shown for the year ended April 30, 1996 for a share outstanding
throughout that year does not accord with the aggregate net losses on in-
vestments for that year because of the timing of sales and repurchases of
the Portfolio shares in relation to fluctuating market value of the in-
vestments of the Portfolio.
The accompanying notes are an integral part of the financial statements.
F-15
<PAGE>
CHICAGO ASSET MANAGEMENT COMPANY PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
UAM Funds Trust and UAM Funds, Inc. (collectively the "UAM Funds") are reg-
istered under the Investment Company Act of 1940, as amended. The Chicago As-
set Management Value/Contrarian Portfolio and Chicago Asset Management Inter-
mediate Bond Portfolio (the "Portfolios"), portfolios of UAM Funds Trust, are
diversified, open-end management investment companies. At October 31, 1996,
the UAM Funds were composed of forty active portfolios. The financial state-
ments of the remaining portfolios are presented separately. The objective of
the Chicago Asset Management Value/Contrarian Portfolio is to provide capital
appreciation by investing primarily in the common stock of large companies.
The objective of the Chicago Asset Management Intermediate Bond Portfolio is
to provide a high level of current income consistent with moderate interest
rate exposure by investing primarily in investment grade bonds with an average
weighted maturity between 3 and 10 years.
A. SIGNIFICANT ACCOUNTING POLICIES: The following significant accounting
policies are in conformity with generally accepted accounting principles. Such
policies are consistently followed by the Portfolios in the preparation of
their financial statements. Generally accepted accounting principles may re-
quire 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 valua-
tion 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 se-
curities 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 in-
come securities, quotations from dealers, market transactions in compara-
ble 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 approxi-
mates 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 qualify as
a regulated investment company under Subchapter M of the Internal Revenue
Code and to distribute all of its taxable income. Accordingly, no provi-
sion for Federal income taxes is required in the financial statements.
F-16
<PAGE>
CHICAGO ASSET MANAGEMENT COMPANY PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
3. REPURCHASE AGREEMENTS: In connection with transactions involving re-
purchase agreements, the Portfolios' 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 monitored on a daily basis to determine the adequacy of the
collateral. In the event of default on the obligation to repurchase, the
Portfolios has the right to liquidate the collateral and apply the pro-
ceeds in satisfaction of the obligation. In the event of default or bank-
ruptcy by the other party to the agreement, realization and/or retention
of the collateral or proceeds may be subject to legal proceedings.
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the Portfolios may transfer their daily uninvested cash bal-
ances into a joint trading account which invests in one or more repurchase
agreements. This joint repurchase agreement is covered by the same collat-
eral requirements as discussed above.
4. DISTRIBUTIONS TO SHAREHOLDERS: Each Portfolio will normally distrib-
ute substantially all of its net investment income quarterly. Any realized
net capital gains will be distributed annually. All distributions are re-
corded 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.
Permanent book and tax basis differences relating to shareholder distri-
butions may result in reclassifications to undistributed net investment
income (loss), accumulated net realized gain (loss) and paid in capital.
5. ORGANIZATION COST: Costs incurred by each Portfolio in connection
with its organization have been deferred and are being amortized on a
straight-line basis over a five year period.
6. 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 using the effective yield
basis 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
F-17
<PAGE>
CHICAGO ASSET MANAGEMENT COMPANY PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
assets. Additionally, certain expenses are apportioned among the portfo-
lios 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 in-
creased to include expense offsets for custodian balance credits.
B. ADVISORY SERVICES: Under the terms of an investment advisory agreement,
Chicago Asset Management Company (the "Adviser"), a wholly-owned subsidiary of
United Asset Management Corporation ("UAM"), provides investment advisory serv-
ices to the Portfolio at a fee calculated at an annual rate of average daily
net assets, as follows:
<TABLE>
<CAPTION>
CHICAGO ASSET MANAGEMENT COMPANY PORTFOLIOS RATE
- ------------------------------------------- ------
<S> <C>
Value/Contrarian......................................................... 0.625%
Intermediate Bond........................................................ 0.48%
</TABLE>
Until further notice, 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 (excluding interest, taxes and ex-
traordinary expenses), after the effect of expense offset arrangements, from
exceeding 0.95% and 0.80% of average daily net assets, respectively.
C. ADMINISTRATION SERVICES: UAM Fund Services, Inc. (the "Administrator"), a
wholly-owned subsidiary of UAM, provides and oversees administrative, fund ac-
counting, dividend disbursing and transfer agent services to the UAM Funds and
AEW under a Fund 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 aggre-
gate 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 as-
sets; 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 ba-
sis 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 Chicago Asset Management Value/Contrarian Portfolio and
0.04% of average daily net assets for Chicago Asset Management Intermediate
Bond Portfolio. The Administrator has entered into a Mutual Funds Service
Agreement with Chase Global
F-18
<PAGE>
CHICAGO ASSET MANAGEMENT COMPANY PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
Funds Services Company ("CGFSC"), an affiliate of The Chase Manhattan Bank,
under which CGFSC agrees to provide certain services, including but not lim-
ited to, administration, fund accounting, dividend disbursing and transfer
agent services. Pursuant to the Mutual Funds Service Agreement, the Adminis-
trator pays CGFSC a monthly fee.
For the period ended October 31, 1996, CGFSC was paid the following amounts
by the Administrator:
<TABLE>
<CAPTION>
CHICAGO ASSET MANAGEMENT COMPANY PORTFOLIOS
- -------------------------------------------
<S> <C>
Value/Contrarian....................................................... $36,711
Intermediate Bond...................................................... 37,137
</TABLE>
D. CUSTODIAN: Effective July 17, 1996, The Chase Manhattan Bank (the
"Bank"), an affiliate of CGFSC, is custodian for the Portfolios' assets held
in accordance with the custodian agreement. For the period July 17, 1996 to
October 31, 1996, the amount charged to the Portfolios by the Bank, all of
which is unpaid at October 31, 1996 is as follows:
<TABLE>
<CAPTION>
CHICAGO ASSET MANAGEMENT COMPANY PORTFOLIOS
- -------------------------------------------
<S> <C>
Value/Contrarian........................................................ $ 88
Intermediate Bond....................................................... 1,832
</TABLE>
E. DISTRIBUTION SERVICES: UAM Fund Distributors, Inc. (the "Distributor"), 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.
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 ex-
penses incurred in attending Trustee meetings.
G. PURCHASES AND SALES: For the period ended October 31, 1996, the Portfo-
lios purchases and sales of investment securities other than long-term U.S.
Government and agency securities and short-term securities were:
<TABLE>
<CAPTION>
CHICAGO ASSET MANAGEMENT COMPANY PORTFOLIOS PURCHASES SALES
- ------------------------------------------- --------- --------
<S> <C> <C>
Value/Contrarian............................................ $539,726 $178,643
Intermediate Bond........................................... 857,274 0
</TABLE>
F-19
<PAGE>
CHICAGO ASSET MANAGEMENT COMPANY PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
Purchases and sales of long term U.S. Government securities were $392,219 and
$1,031,711, respectively, for Chicago Asset Management Intermediate Bond Port-
folio. There were no purchases and sales of long-term U.S. Government securi-
ties for Chicago Asset Management Value/Contrarian Portfolio.
H. OTHER: At October 31, 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 SHAREHOLDERS OWNERSHIP
- -------------------------------- ------------ ---------
<S> <C> <C>
Value/Contrarian......................................... 2 76.4
Intermediate Bond........................................ 1 89.3
</TABLE>
F-20
<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.
F-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.
F-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.
F-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.
F-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.
F-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.
F-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> <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.
F-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.
F-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.
F-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 As-
sets+............................................... 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.
F-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 As-
sets+............................................... 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 ex-
penses assumed by the Adviser during the periods indicated.
+++ The amount shown for the year ended April 30, 1996 for a share outstanding
throughout that year does not accord with the aggregate net losses on in-
vestments for that year because of the timing of sales and repurchases of
the Portfolio shares in relation to fluctuating market value of the invest-
ments of the Portfolio.
# The Ratio of Expenses to Average Net Assets excludes the effect of expense
offsets. If expense offsets were included, the Ratio of Expenses to Average
Net Assets would be 0.80%.
The accompanying notes are an integral part of the financial statements.
F-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 regis-
tered under the Investment Company Act of 1940, as amended, as open-end man-
agement investment companies. The Chicago Asset Management Value/Contrarian
Portfolio and Chicago Asset Management Intermediate Bond Portfolio (the "Port-
folios"), portfolios of UAM Funds Trust, began operations on December 16, 1994
and January 24, 1995, respectively. At April 30, 1996, the UAM Funds were com-
prised of thirty-seven active portfolios. The financial statements of the re-
maining portfolios are presented separately.
A. SIGNIFICANT ACCOUNTING POLICIES: The following significant accounting poli-
cies are in conformity with generally accepted accounting principles for in-
vestment companies. Such policies are consistently followed by the Portfolios
in the preparation of their financial statements. Generally accepted account-
ing principles may require management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Ac-
tual 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 infor-
mation 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 informa-
tion with respect to transactions in fixed income securities, quotations
from dealers, market transactions in comparable securities and various re-
lationships 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 Inter-
nal Revenue Code and to distribute all of its taxable income. Accordingly,
no provision for Federal income taxes is required in the financial state-
ments.
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 under-
lying securities, the value of which exceeds the principal
F-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 ad-
equacy of the collateral. In the event of default on the obligation to re-
purchase, the Portfolios have the right to liquidate the collateral and ap-
ply the proceeds in satisfaction of the obligation. In the event of default
or bankruptcy by the other party to the agreement, realization and/or re-
tention 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 organi-
zation costs.
Permanent book and tax basis differences relating to shareholder distribu-
tions may result in reclassifications to undistributed net investment in-
come (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 identifica-
tion method. Dividend income is recorded on the ex-dividend date. Interest
income is recognized on the accrual basis. Discounts and premiums on secu-
rities purchased are amortized over their respective lives. Most expenses
of the UAM Funds can be directly attributed to a particular portfolio. Ex-
penses which cannot be directly attributed are apportioned among the port-
folios 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 as-
sets. Custodian fees for the Portfolio have been increased to include ex-
pense offsets for custodian balance credits. Costs incurred by each Portfo-
lio 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 calcu-
lating net investment income (loss) per share in the financial highlights.
B. ADVISORY SERVICES: Under the terms of investment advisory agreements, Chi-
cago 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 Portfo-
lio and 0.48% of average daily net assets for Chicago Asset Management Inter-
mediate 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 as-
sets, 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
F-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 com-
bined 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 re-
ceives 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 ad-
ministrator 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 as-
sets; 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"), for-
merly known as RFI Distributors (a division of Regis Retirement Plan Services,
Inc.), a wholly-owned subsidiary of UAM, distributes the shares of the Portfo-
lios. The Distributor does not receive any fee or other compensation with re-
spect to the Portfolios.
F-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 Interme-
diate Bond Portfolio. There were no purchases and sales of long-term U.S. Gov-
ernment 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 ex-
penses 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 out-
standing 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 Chi-
cago Asset Management Value/Contrarian Portfolio were held by UAM Profit Shar-
ing & 401k Plan and UAM, respectively.
F-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 high-
lights present fairly, in all material respects, the financial position of the
Chicago Asset Management Value/Contrarian Portfolio and the Chicago Asset Man-
agement 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 princi-
ples. These financial statements and financial highlights (hereafter referred
to as "financial statements") are the responsibility of the Portfolios' man-
agement; our responsibility is to express an opinion on these financial state-
ments based on our audits. We conducted our audits of these financial state-
ments 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 dis-
closures in the financial statements, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall fi-
nancial statement presentation. We believe that our audits, which included
confirmation of securities at April 30, 1996 by correspondence with the custo-
dian 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 qual-
ify for the 70% dividend received deduction for corporate shareholders is
46.1% for Chicago Asset Management Value/Contrarian Portfolio.
F-20
<PAGE>
PART B
UAM FUNDS
- -------------------------------------------------------------------------------
FPA CRESCENT PORTFOLIO
INSTITUTIONAL CLASS SHARES
INSTITUTIONAL SERVICE CLASS SHARES
- -------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION -- January 3, 1997
This Statement is not a Prospectus but should be read in conjunction with
UAM Funds Trust's Prospectuses relating to the FPA Crescent Portfolio's Insti-
tutional Class Shares and Institutional Service Class Shares dated January 3,
1997. To obtain the Prospectuses, please call the UAM Funds Service Center:
1-800-638-7983
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Investment Objective and Policies.......................................... 2
Investment Restrictions.................................................... 8
Purchase of Shares......................................................... 10
Redemption of Shares....................................................... 11
Shareholder Services....................................................... 12
Management of the Fund..................................................... 13
Investment Adviser......................................................... 15
Service and Distribution Plans............................................. 16
Portfolio Transactions..................................................... 19
Administrative Services.................................................... 20
Performance Calculations................................................... 20
General Information........................................................ 23
Financial Statements....................................................... 26
Appendix -- Description of Securities and Ratings.......................... A-1
</TABLE>
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
FPA Crescent Portfolio (the "Portfolio") has the investment objective of
seeking to provide, through a combination of income and capital appreciation,
a total return consistent with reasonable investment risk. The following dis-
cussion supplements the discussion of the Portfolio's investment objective and
policies as set forth in the Portfolio's Prospectuses. There can be no assur-
ance the objective of the Portfolio will be attained.
LENDING OF SECURITIES
The Portfolio may lend its investment securities to qualified brokers, deal-
ers, domestic and foreign banks or other financial institutions, so long as
the terms, the structure and the aggregate amount of such loans are not incon-
sistent with the Investment Company Act of 1940, as amended, (the "1940 Act")
or the Rules and Regulations or interpretations of the Securities and Exchange
Commission (the "SEC") thereunder, which currently require that (a) the bor-
rower pledge and maintain with the Portfolio collateral consisting of cash, an
irrevocable letter of credit issued by a domestic U.S. bank or securities is-
sued or guaranteed by the United States Government having a value at all times
not less than 100% of the value of the securities loaned, (b) the borrower add
to such collateral whenever the price of the securities loaned rises (i.e.,
the borrower "marks to the market" on a daily basis), (c) the loan be made
subject to termination by the Portfolio at any time, and (d) the Portfolio re-
ceives reasonable interest on the loan (which may include the Portfolio in-
vesting any cash collateral in interest bearing short-term investments). As
with other extensions of credit, there are risks of delay in recovery or even
loss of rights in the securities loaned if the borrower of the securities
fails financially. These risks are similar to the ones involved with repur-
chase agreements as discussed in the Prospectus.
REPURCHASE AGREEMENTS
The Portfolio may enter into repurchase agreements as discussed in the Pro-
spectuses. Under such agreements, the seller of the security agrees to repur-
chase it at a mutually agreed upon time and price. The repurchase price may be
higher than the purchase price, the difference being income to the Portfolio,
or the purchase and repurchase prices may be the same, with interest at a
stated rate due to the Portfolio together with the repurchase price on repur-
chase. In either case, the income to the Portfolio is unrelated to the inter-
est rate on the U.S. Government security itself. The Portfolio will generally
enter into repurchase agreements of short durations, from overnight to one
week, although the underlying securities generally have longer maturities. The
Portfolio may not enter into a repurchase agreement with more than seven days
to maturity if, as a result, more than 15% of the value of the Portfolio's to-
tal assets would be invested in illiquid securities including such repurchase
agreements.
2
<PAGE>
For purposes of the Investment Company Act of 1940 (the "1940 Act"), a re-
purchase agreement is deemed to be a loan from the Portfolio to the seller of
the U.S. Government security subject to the repurchase agreement. It is not
clear whether a court would consider the U.S. Government security acquired by
the Portfolio subject to a repurchase agreement as being owned by the Portfo-
lio or as being collateral for a loan by the Portfolio to the seller. In the
event of the commencement of bankruptcy or insolvency proceedings with respect
to the seller of the U.S. Government security before its repurchase under a
repurchase agreement, the Portfolio may encounter delays and incur costs be-
fore being able to sell the security. Delays may involve loss of interest or a
decline in price of the U.S. Government security. If a court characterizes the
transaction as a loan and the Portfolio has not perfected a security interest
in the U.S. Government security, the Portfolio may be required to return the
security to the seller's estate and be treated as an unsecured creditor of the
seller. As an unsecured creditor, the Portfolio would be at the risk of losing
some or all of the principal and income involved in the transaction. As with
any unsecured debt instrument purchased for the Portfolio, the investment man-
ager seeks to minimize the risk of loss through repurchase agreements by ana-
lyzing the creditworthiness of the obligor, in this case the seller of the
U.S. Government security.
Apart from the risk of bankruptcy or insolvency proceedings, there is also
the risk that the seller may fail to repurchase the security. However, the
Portfolio will always receive as collateral for any repurchase agreement to
which it is a party securities acceptable to it, the market value of which is
equal to at least 100% of the amount invested by the Portfolio plus accrued
interest, and the Portfolio will make payment against such securities only
upon physical delivery or evidence of book entry transfer to the account of
its Custodian. If the market value of the U.S. Government security subject to
the repurchase agreement becomes less than the repurchase price (including in-
terest), the Portfolio will direct the seller of the U.S. Government security
to deliver additional securities so that the market value of all securities
subject to the repurchase agreement will equal or exceed the repurchase price.
It is possible that the Portfolio will be unsuccessful in seeking to impose on
the seller a contractual obligation to deliver additional securities.
WHEN-ISSUED SECURITIES
The Portfolio may from time to time purchase securities on a "when-issued"
basis. The price of such securities, which may be expressed in yield terms, is
fixed at the time the commitment to purchase is made, but delivery and payment
for the when-issued securities take place at a later date. Normally, the set-
tlement date occurs within one month of the purchase; during the period be-
tween purchase and settlement, no payment is made by the Portfolio to the is-
suer and no interest accrues to the Portfolio. To the extent that assets of
the Portfolio are held in cash pending the settlement of a purchase of securi-
ties, the Portfolio would earn no
3
<PAGE>
income; however, it is the Portfolio's intention to be fully invested to the
extent practicable and subject to the policies stated above. While when-issued
securities may be sold prior to the settlement date, the Portfolio intends to
purchase such securities with the purpose of actually acquiring them unless a
sale appears desirable for investment reasons. At the time the Portfolio makes
the commitment to purchase a security on a when-issued basis, it will record
the transaction and reflect the value of the security in determining its net
asset value. The market value of the when-issued securities may be more or
less than the purchase price. The Portfolio does not believe that its net as-
set value or income will be adversely affected by its purchase of securities
on a when-issued basis. The Portfolio will establish a segregated account with
its Custodian in which it will maintain cash and liquid securities equal in
value to commitments for when-issued securities. Such segregated securities
either will mature or, if necessary, be sold on or before the settlement date.
FOREIGN SECURITIES
Among the means through which the Portfolio may invest in foreign securities
is the purchase of American Depository Receipts ("ADR's") or European Deposi-
tory Receipts ("EDR's"). Generally, ADR's, in registered form, are denominated
in U.S. dollars and are designed for use in the U.S. securities markets, while
EDR's, in bearer form, may be denominated in other currencies and are designed
for use in European securities markets. ADR's are receipts typically issued by
a U.S. bank or trust company evidencing ownership of the underlying securi-
ties. EDR's are European receipts evidencing a similar arrangement. For pur-
poses of the Portfolios' investment policies, ADR's and EDR's are deemed to
have the same classification as the underlying securities they represent. Thus
an ADR or EDR representing ownership of common stock will be treated as common
stock.
DEBT SECURITIES AND RATINGS
Ratings of debt securities represent the rating agencies' opinions regarding
their quality, are not a guarantee of quality and may be reduced after the
Portfolio has acquired the security. The Advisor will consider whether the
Portfolio should continue to hold the security but is not required to dispose
of it. Credit ratings attempt to evaluate the safety of principal and interest
payments and do not evaluate the risks of fluctuations in market value. Also,
rating agencies may fail to make timely changes in credit ratings in response
to subsequent events, so that an issuer's current financial conditions may be
better or worse than the rating indicates.
The Portfolio reserves the right to invest up to 30% of its total assets in
securities rated lower than BBB by S & P or lower than Baa by Moody's. Lower
rated securities generally offer a higher current yield than that available
for higher grade issues. However, lower rated securities involve higher risks,
in that they are especially subject to adverse changes in general economic
conditions and in the industries in which the issuers are engaged, to changes
in the financial condition of
4
<PAGE>
the issuers and to price fluctuations in response to changes in interest
rates. During periods of economic downturn or rising interest rates, highly
leveraged issuers may experience financial stress which could adversely affect
their ability to make payments of interest and principal and increase the pos-
sibility of default. In addition, the market for lower rated debt securities
has expanded rapidly in recent years, and its growth paralleled a long eco-
nomic expansion. At times in recent years, the prices of many lower rated debt
securities declined substantially, reflecting an expectation that many issuers
of such securities might experience financial difficulties. As a result, the
yields on lower rated debt securities rose dramatically, but such higher
yields did not reflect the value of the income stream that holders of such se-
curities expected, but rather, the risk that holders of such securities could
lose a substantial portion of their value as a result of the issuers' finan-
cial restructuring or default. There can be no assurance that such declines
will not recur. The market for lower-rated debt issues generally is thinner
and less active than that for higher quality securities, which may limit the
Portfolio's ability to sell such securities at fair value in response to
changes in the economy or financial markets. Adverse publicity and investor
perceptions, whether or not based on fundamental analysis, may also decrease
the values and liquidity of lower rated securities, especially in a thinly
traded market.
SHORT SALES
The Portfolio may seek to hedge investments or realize additional gains
through short sales. The Portfolio may make short sales, which are transac-
tions in which the Portfolio sells a security it does not own, in anticipation
of a decline in the market value of that security. To complete such a transac-
tion, the Portfolio must borrow the security to make delivery to the buyer.
The Portfolio then is obligated to replace the security borrowed by purchasing
it at the market price at or prior to the time of replacement. The price at
such time may be more or less than the price at which the security was sold by
the Portfolio. Until the security is replaced, the Portfolio is required to
repay the lender any dividends or interest that accrue during the period of
the loan. To borrow the security, the Portfolio also may be required to pay a
premium, which would increase the cost of the security sold. The net proceeds
of the short sale will be retained by the broker, to the extent necessary to
meet margin requirements, until the short position is closed out. The Portfo-
lio also will incur transaction costs in effecting short sales.
The Portfolio will incur a loss as a result of the short sale if the price
of the security increases between the date of the short sale and the date on
which the Portfolio replaces the borrowed security. The Portfolio will realize
a gain if the security declines in price between those dates. The amount of
any gain will be decreased, and the amount of any loss increased by the amount
of the premium, dividends, interest, or expenses the Portfolio may be required
to pay in connection with a short sale.
5
<PAGE>
No securities will be sold short if, after effect is given to any such short
sale, the total market value of all securities sold short would exceed 25% of
the value of the Portfolio's net equity. The Portfolio similarly will limit
its short sales of the securities of any single issuer if the market value of
the securities that have been sold short by the Portfolio would exceed the two
percent (2%) of the value of the Portfolio's net equity or if such securities
would constitute more than two percent (2%) of any class of the issuer's secu-
rities.
Whenever the Portfolio engages in short sales, its custodian segregates an
amount of cash or U.S. Government securities or other high-grade liquid debt
securities equal to the difference between (a) the market value of the securi-
ties sold short at the time they were sold short and (b) any cash or U.S. Gov-
ernment securities required to be deposited with the broker in connection with
the short sale (not including the proceeds from the short sale). The segre-
gated assets are marked to market daily, provided that at no time will the
amount deposited in it plus the amount deposited with the broker be less than
the market value of the securities at the time they were sold short.
In addition, the Portfolio may make short sales "against the box," i.e. when
a security identical to one owned by the Portfolio is borrowed and sold short.
If the Portfolio enters into a short sale against the box, it is required to
segregate securities equivalent in kind and amount to the securities sold
short (or securities convertible or exchangeable into such securities) and is
required to hold such securities while the short sale is outstanding. The
Portfolio will incur transaction costs, in connection with opening, maintain-
ing, and closing short sales against the box.
OPTIONS AND FUTURES TRANSACTIONS
As indicated in the Prospectuses, to the extent consistent with its invest-
ment objectives and policies, the Portfolio may purchase and write call and
put options on securities, securities indexes and on foreign currencies and
enter into futures contracts and use options on futures contracts, to the ex-
tent of up to 5% of its assets.
Transactions in options on securities and on indexes involve certain risks.
For example, there are significant differences between the securities and op-
tions markets that could result in an imperfect correlation between these mar-
kets, causing a given transaction not to achieve its objectives. A decision as
to whether, when and how to use options involves the exercise of skill and
judgment, and even a well-conceived transaction may be unsuccessful to some
degree because of market behavior or unexpected events.
There can be no assurance that a liquid market will exist when the Portfolio
seeks to close out an option position. If the Portfolio were unable to close
out an option that it had purchased on a security, it would have to exercise
the option in order to realize any profit or the option may expire worthless.
If the Portfolio were
6
<PAGE>
unable to close out a covered call option that it had written on a security,
it would not be able to sell the underlying security unless the option expired
without exercise. As the writer of a covered call option, the Portfolio for-
goes, during the option's life, the opportunity to profit from increases in
the market value of the security covering the call option above the sum of the
premium and the exercise price of the call.
If trading were suspended in an option purchased by the Portfolio, the Port-
folio would not be able to close out the option. If restrictions on exercise
were imposed, the Portfolio might be unable to exercise an option it has pur-
chased. Except to the extent that a call option on an index written by the
Portfolio is covered by an option on the same index purchased by the Portfo-
lio, movements in the index may result in a loss to the Portfolio; such losses
may be mitigated or exacerbated by changes in the value of the Portfolio's se-
curities during the period the option was outstanding.
Use of futures contracts and options thereon also involves certain risks.
The variable degree of correlation between price movements of futures con-
tracts and price movements in the related portfolio positions of the Portfolio
creates the possibility that losses on the hedging instrument may be greater
than gains in the value of the Portfolio's position. Also, futures and options
markets may not be liquid in all circumstances and certain over the counter
options may have no markets. As a result, in certain markets, the Portfolio
might not be able to close out a transaction at all or without incurring loss-
es. Although the use of options and futures transactions for hedging should
minimize the risk of loss due to a decline in the value of the hedged posi-
tion, at the same time they tend to limit any potential gain which might re-
sult from an increase in the value of such position. If losses were to result
from the use of such transactions, they could reduce net asset value and pos-
sibly income. The Portfolio may use these techniques to hedge against changes
in interest rates or securities prices or as part of its overall investment
strategy. The Portfolio will maintain segregated accounts consisting of cash,
U.S. Government securities, or other high grade debt obligations (or, as per-
mitted by applicable regulation, enter into certain offsetting positions) to
cover its obligations under options and futures contracts to avoid leveraging
of the Portfolio.
FEDERAL TAX TREATMENT OF FORWARD CURRENCY AND FUTURES CONTRACTS
Except for transactions the Portfolio has identified as hedging transac-
tions, the Portfolio is required for Federal income tax purposes to recognize
as income for each taxable year its net unrealized gains and losses on regu-
lated futures contracts as of the end of each taxable year as well as those
actually realized during the year. In most cases, any such gain or loss recog-
nized with respect to a regulated futures contract is considered to be 60%
long-term capital gain or loss and 40% short-term capital gain or loss without
regard to the holding period of the contract.
7
<PAGE>
In order for the Portfolio to continue to qualify for Federal income tax
treatment as a regulated investment company under the Internal Revenue Code of
1986, as amended (the "Code"), at least 90% of its gross income for a taxable
year must be derived from certain qualifying income, i.e., dividends, inter-
est, income derived from loans of securities and gains from the sale or other
disposition of stock, securities or foreign currencies, or other related in-
come, including gains from options, futures and forward contracts, derived
with respect to its business investing in stock, securities or currencies. Any
net gain realized from the closing out of futures contracts will, therefore,
generally be qualifying income for purposes of the 90% requirement. Qualifica-
tion as a regulated investment company also requires that less than 30% of the
Portfolio's gross income be derived from the sale or other disposition of
stock, securities, options, futures or forward contracts (including certain
foreign currencies not directly related to the Fund's business of investing in
stock or securities) held less than three months. In order to avoid realizing
excessive gains on securities held for less than three months, the Portfolio
may be required to defer the closing out of futures contracts beyond the time
when it would otherwise be advantageous to do so. It is anticipated that
unrealized gains on futures contracts which have been open for less than three
months as of the end of the Portfolio's taxable year, and which are recognized
for tax purposes, will not be considered gains on securities held for less
than three months for the purposes of the 30% test.
The Portfolio will distribute to shareholders annually any net capital gains
which have been recognized for Federal income tax purposes (including
unrealized gains at the end of the Portfolio's taxable year) on futures trans-
actions. Such distribution will be combined with distributions of capital
gains realized on the Portfolio's other investments, and shareholders will be
advised on the nature of the payment.
INVESTMENT RESTRICTIONS
The following policies and investment restrictions have been adopted by the
Portfolio and (unless otherwise noted) are fundamental and cannot be changed
without the affirmative vote of a majority of the Portfolio's outstanding vot-
ing securities as defined in the 1940 Act. The Portfolio may not:
(1) make loans to others, except (i) through the purchase of debt securi-
ties in accordance with its investment objective and policies, and
(ii) to the extent the entry into a repurchase agreement is deemed to
be a loan;
(2) (i) borrow money, except as stated in the Prospectuses and this
Statement of Additional Information. Any such borrowing will be made
only if immediately thereafter there is an asset coverage of at least
300% of all borrowings;
(ii) mortgage, pledge or hypothecate any of its assets except in
connection with any such borrowings;
8
<PAGE>
(3) purchase securities on margin, participate on a joint or joint and
several basis in any securities trading account, or underwrite secu-
rities (does not preclude the Portfolio from obtaining such short-
term credit as may be necessary for the clearance of purchases and
sales of its portfolio securities);
(4) purchase or sell commodities or commodity contracts (other than
futures transactions for the purposes and under the conditions de-
scribed in the Prospectuses and in this Statement of Additional In-
formation);
(5) invest more than 25% of the market value of its assets in the securi-
ties of companies engaged in any one industry (does not apply to in-
vestment in the securities of the U.S. Government, its agencies or
instrumentalities);
(6) issue senior securities, as defined in the 1940 Act, except that this
restriction shall not be deemed to prohibit the Portfolio from (i)
making any permitted borrowings, mortgages or pledges, or (ii) enter-
ing into options, futures or repurchase transactions;
(7) purchase the securities of any issuer, if as a result more than 5% of
the total assets of the Portfolio would be invested in the securities
of that issuer, other than obligations of the U.S. Government, its
agencies or instrumentalities, provided that up to 25% of the value
of the Portfolio's assets may be invested without regard to this lim-
itation;
(8) purchase or sell real estate; however, the Portfolio may invest in
debt securities secured by real estate or interests therein or issued
by companies which invest in real estate or interests therein, in-
cluding real estate investment trusts;
(9) with respect to 75% of its assets, own more than 5% of the securities
of any single issuer (other than investments issued or guaranteed by
the U.S. Government or any of its agencies or instrumentalities); and
(10) with respect to 75% of its assets, own more than 10% of the outstand-
ing voting securities of any one issuer.
For the purposes of (2) above, the Portfolio may not borrow except from
banks for temporary or emergency purposes and in connection with short sales
of securities. In these situations, the Portfolio will limit borrowings to no
more than 33 1/3% of the Portfolio's assets, and the Portfolio may not pur-
chase additional securities when borrowings exceed 5% of its total assets.
Investment restriction (6) above shall not be deemed to prohibit the Portfo-
lio from engaging in short sales of securities as described in the Prospec-
tuses under "Additional Investment Policies" and in this Statement of Addi-
tional Information under "Investment Objective and Policies."
9
<PAGE>
The Portfolio observes the following policies, which are not deemed funda-
mental and which may be changed without shareholder vote. The Portfolio may
not:
(11) purchase any security if as a result the Portfolio would then hold
more than 10% of any class of securities of an issuer (taking all
common stock issues of an issuer as a single class, all preferred
stock issues as a single class, and all debt issues as a single
class) or more than 10% of the outstanding voting securities of an
issuer;
(12) invest in any issuer for purposes of exercising control or manage-
ment;
(13) invest in securities of other investment companies which would result
in the Portfolio owning more than 3% of the outstanding voting secu-
rities of any one such investment company, the Portfolio owning secu-
rities of another investment company having an aggregate value in ex-
cess of 5% of the value of the Portfolio's total assets, or the Port-
folio owning securities of investment companies in the aggregate
which would exceed 10% of the value of the Portfolio's total assets;
and
(14) invest, in the aggregate, more than 15% of its net assets in securi-
ties which are not readily marketable or are illiquid.
If a percentage restriction is adhered to at the time of investment, a sub-
sequent increase or decrease in a percentage resulting from a change in the
values of assets will not constitute a violation of that restriction, except
as otherwise noted.
PURCHASE OF SHARES
Shares of the Portfolio may be purchased without a sales commission at the
net asset value per share next determined after an order is received in proper
form by the Fund and payment is received by the Fund's Custodian. The minimum
initial investment required for the Portfolio is $2,500 with certain excep-
tions as may be determined from time to time by the officers of the Fund. The
minimum initial investment amount for IRAs is $1,000. An order received in
proper form prior to the 4:00 p.m. close of the New York Stock Exchange
("NYSE") will be executed at the price computed on the date of receipt; and an
order received not in proper form or after the 4:00 p.m. close of the NYSE
will be executed at the price computed on the next day the NYSE is open after
proper receipt. The NYSE will be closed on the following days: Presidents'
Day, February 17, 1997; Good Friday, March 28, 1997; Memorial Day, May 26,
1997; Independence Day, July 4, 1997 and Labor Day, September 1, 1997; Thanks-
giving Day, November 27, 1997; Christmas Day, December 25, 1997; and New
Year's Day, January 1, 1998;
The Portfolio reserves the right in its sole discretion (1) to suspend the
offering of its shares, (2) to reject purchase orders when in the judgment of
management such rejection is in the best interests of the Fund, and (3) to re-
duce or waive the
10
<PAGE>
minimum for initial and subsequent investment for certain fiduciary accounts
such as employee benefit plans or under circumstances where certain economies
can be achieved in sales of a Portfolio's shares.
REDEMPTION OF SHARES
The Portfolio may suspend redemption privileges or postpone the date of pay-
ment (1) during any period that either the NYSE or custodian bank are closed
or trading on the NYSE is restricted as determined by the Commission, (2) dur-
ing any period when an emergency exists as defined by the rules of the Commis-
sion as a result of which it is not reasonably practicable for the Portfolio
to dispose of securities owned by it or to fairly determine the value of its
assets, and (3) for such other periods as the Commission may permit. The Fund
has made an election with the Commission to pay in cash all redemptions re-
quested by any shareholder of record limited in amount during any 90-day pe-
riod to the lesser of $250,000 or 1% of the net assets of the Fund at the be-
ginning of such period. Such commitment is irrevocable without the prior ap-
proval of the Commission. Redemptions in excess of the above limits may be
paid, in whole or in part, in investment securities or in cash as the Direc-
tors may deem advisable; however, payment will be made wholly in cash unless
the Directors believe that economic or market conditions exist which would
make such a practice detrimental to the best interests of the Fund. If redemp-
tions are paid in investment securities, such securities will be valued as set
forth in the Prospectuses under "How Share Prices are Determined" and a re-
deeming shareholder would normally incur brokerage expenses if these securi-
ties were converted to cash.
No charge is made by the Portfolio for redemptions. Any redemption may be
more or less than the shareholder's initial cost depending on the market value
of the securities held by the Portfolio.
SIGNATURE GUARANTEES
To protect your account, the Fund and Chase Global Funds Services Company
(the "Sub-Administrator") from fraud, signature guarantees are required for
certain redemptions. Signature guarantees are required for (1) redemptions
where the proceeds are to be sent to someone other than the registered
shareowner(s) or the registered address or (2) share transfer requests. The
purpose of signature guarantees is to verify the identity of the party who has
authorized a redemption.
Signatures must be guaranteed by an "eligible guarantor institution" as de-
fined in Rule 17Ad-15 under the Securities Exchange Act of 1934. Eligible
guarantor institutions include banks, brokers, dealers, credit unions, na-
tional securities exchanges, registered securities associations, clearing
agencies and savings associations. A complete definition of eligible guarantor
institution is available from the Sub-Administrator. Broker-dealers guarantee-
ing signatures must be a member of a
11
<PAGE>
clearing corporation or maintain net capital of at least $100,000. Credit
unions must be authorized to issue signature guarantees. Signatures guarantees
will be accepted from any eligible guarantor institution which participates in
a signature guarantee program.
The signature guarantee must appear either: (1) on the written request for
redemption; (2) on a separate instrument for assignment ("stock power") which
should specify the total number of shares to be redeemed; or (3) on all stock
certificates tendered for redemption and, if shares held by the Fund are also
being redeemed, on the letter or stock power.
SHAREHOLDER SERVICES
The following supplements the shareholder services information set forth in
the Portfolio's Prospectuses:
EXCHANGE PRIVILEGE
Institutional Class Shares of the Portfolio may be exchanged for any other
Institutional Class Shares of a Portfolio included in the UAM Funds which is
comprised of the Fund and UAM Funds, Inc. Similarly, Institutional Service
Class Shares of the Portfolio may be exchanged for shares of other UAM Funds
Portfolios' Institutional Service Class Shares. (See the list of Portfolios
and classes eligible for exchange at the end of each Class' Prospectus.) Ex-
change requests should be made by calling the Fund (1-800-638-7983) or by
writing to UAM Funds, UAM Funds Service Center, c/o Chase Global Funds Serv-
ices Company, P.O. Box 2798, Boston, MA 02208-2798. The exchange privilege is
only available with respect to Portfolios that are qualified for sale in the
shareholder's state of residence.
Any such exchange will be based on the respective net asset values of the
shares involved. There is no sales commission or charge of any kind. Before
making an exchange into a Portfolio, a shareholder should read its Prospectus
and consider the investment objectives of the Portfolio to be purchased. You
may obtain a Prospectus for the Portfolio(s) you are interested in by calling
the UAM Funds Service Center at 1-800-638-7983.
Exchange requests may be made either by mail or telephone. Telephone ex-
changes will be accepted only if the certificates for the shares to be ex-
changed are held by the Fund for the account of the shareholder and the regis-
tration of the two accounts will be identical. Requests for exchanges received
prior to 4:00 p.m. (Eastern Time) will be processed as of the close of busi-
ness on the same day. Requests received after 4:00 p.m. will be processed on
the next business day. Neither the Fund nor the Sub-Administrator will be re-
sponsible for the authenticity of the exchange instructions received by tele-
phone. Exchanges may also be subject to limitations as to amounts or frequency
and to other restrictions established by the Board of Directors to assure that
such exchanges do not disadvantage the Fund and its shareholders.
12
<PAGE>
For Federal income tax purposes an exchange between Portfolios is a taxable
event, and, accordingly, a capital gain or loss may be realized. In a revenue
ruling relating to circumstances similar to the Fund's, an exchange between
series of a Fund was also deemed to be a taxable event. It is likely, there-
fore, that a capital gain or loss would be realized on an exchange between
Portfolios; you may want to consult your tax adviser for further information
in this regard. The exchange privilege may be modified or terminated at any
time.
MANAGEMENT OF THE FUND
TRUSTEES AND OFFICERS
The Officers of the Fund manage its day-to-day operations and are responsi-
ble to the Fund's Board of Trustees. The Trustees set broad policies for the
Fund and elect its Officers. The following is a list of the Trustees and Offi-
cers of the Fund and a brief statement of their present positions and princi-
pal occupations during the past five years.
<TABLE>
<C> <S>
JOHN T. BENNETT, JR. Trustee of the Fund; President of Squam Investment
College Road -- RFD 3 Management Company, Inc. and Great Island Investment
Meredith, NH 03253 Company, Inc.; President of Bennett Management Com-
Age 67 pany from 1988 to 1993.
PHILIP D. ENGLISH Trustee of the Fund; President and Chief Executive
16 West Madison Street Officer of Broventure Company, Inc.; Chairman of the
Baltimore, MD 21201 Board of Chektec Corporation and Cyber Scientific,
Age 48 Inc.
WILLIAM A. HUMENUK Trustee of the Fund; Partner in the Philadelphia of-
4000 Bell Atlantic Tower fice of the law firm Dechert Price & Rhoads; Direc-
1717 Arch Street tor, Hofler Corp.
Philadelphia, PA 19103
Age 54
NORTON H. REAMER* Trustee, President and Chairman of the Fund; Presi-
One International Place dent, Chief Executive Officer and a Director of
Boston, MA 02110 United Asset Management Corporation; Director, Part-
Age 60 ner or Trustee of each of the Investment Companies of
the Eaton Vance Group of Mutual Funds.
PETER M. WHITMAN, JR.* Trustee of the Fund; President and Chief Investment
One Financial Center Officer of Dewey Square Investors Corporation ("DSI")
Boston, MA 02111 since 1988; Director and Chief Executive Officer of
Age 53 H. T. Investors, Inc., formerly a subsidiary of DSI.
</TABLE>
- -----------
* These people are deemed to be "interested persons" of the Fund as that term
is defined in the 1940 Act.
13
<PAGE>
<TABLE>
<C> <S>
WILLIAM H. PARK* Vice President of the Fund; Executive Vice President
One International and Chief Financial Officer of United Asset Management
Place Boston, MA Corporation.
02110
Age 49
GARY L. FRENCH* Treasurer of the Fund; President of UAM Fund Services,
211 Congress Street Inc.; and UAM Fund Distributors, Inc.; formerly Vice
Boston, MA 02110 President of Operations, Development and Control of
Age 45 Fidelity Investment in 1995; Treasurer of the Fidelity
Group of Mutual Funds from 1991 to February 1995.
MICHAEL E. DEFAO* Secretary of the Fund; Vice President and General
211 Congress Street Counsel of UAM Fund Services, Inc. and UAM Fund Dis-
Boston, MA 02110 tributors, Inc.; Associate Attorney of Ropes & Gray (a
Age 28 law firm) from 1993 to February 1995.
ROBERT R. FLAHERTY* Assistant Treasurer of the Fund; Vice President of UAM
211 Congress Street Fund Services, Inc.; formerly Manager of Fund Adminis-
Boston, MA 02110 tration and Compliance of the Chase Global Funds Serv-
Age 32 ices Company from 1995 to 1996; Deloitte & Touche LLP
from 1985 to 1995, Senior Manager.
KARL O. HARTMANN* Assistant Secretary of the Fund; Senior Vice President
73 Tremont Street and General Counsel of Chase Global Funds Services
Boston, MA 02108 Company; Senior Vice President, Secretary and General
Age 41 Counsel of Leland, O'Brien, Rubinstein Associates,
Inc., from November 1990 to November 1991.
</TABLE>
- -----------
* These people are deemed to be "interested persons" of the Fund as that term
is defined in the 1940 Act.
As of December 6, 1996, the Trustees and Officers of the Fund owned less
than 1% of the Fund's outstanding shares.
REMUNERATION OF TRUSTEES AND OFFICERS
The Fund pays each Trustee, who is not also an officer or affiliated person,
a $150 quarterly retainer fee per active Portfolio which currently amounts to
$1,050 per quarter. In addition, each unaffiliated Trustee receives a $2,000
meeting fee which is aggregated for all of the Trustees and allocated propor-
tionately among the Portfolios of the Fund and UAM Funds, Inc. and reimburse-
ment for travel and other expenses incurred while attending Board meetings.
Trustees who are also officers or affiliated persons receive no remuneration
for their service as Trustees. The Fund's officers and employees are paid by
either the Adviser, United Asset Management Corporation ("UAM"), the Adminis-
trator or the Sub-Administrator
14
<PAGE>
and receive no compensation from the Fund. The following table shows aggregate
compensation paid to each of the Fund's Independent Trustees by the Fund, as
well as total compensation from the Fund, UAM Funds, Inc. and AEW Commercial
Mortgage Securities Fund, Inc. (collectively the "Fund Complex"), respective-
ly, in the fiscal year ended April 30, 1996.
COMPENSATION TABLE
<TABLE>
<CAPTION>
(1) (2) (3) (4) (5)
TOTAL
PENSION OR COMPENSATION
RETIREMENT ESTIMATED FROM
AGGREGATE BENEFITS ACCRUED ANNUAL REGISTRANT
COMPENSATION AS PART BENEFITS AND FUND
FROM OF FUND UPON COMPLEX PAID
NAME OF PERSON, POSITION REGISTRANT EXPENSES RETIREMENT TO TRUSTEES
- ------------------------ ------------ ---------------- ---------- ------------
<S> <C> <C> <C> <C>
John T. Bennett, Jr. ...
Trustee $3,396 0 0 $29,600
J. Edward Day...........
Former Trustee $3,396 0 0 $29,600
Philip D. English.......
Trustee $3,396 0 0 $29,600
William A. Humenuk......
Trustee $3,396 0 0 $29,600
</TABLE>
INVESTMENT ADVISER
CONTROL OF ADVISER
First Pacific Advisors, Inc. (the "Adviser") is an indirect wholly-owned
subsidiary of UAM, a holding company incorporated in Delaware in December 1980
for the purpose of acquiring and owning firms engaged primarily in institu-
tional investment management. Since its first acquisition in August 1983, UAM
has acquired or organized approximately 45 such wholly-owned affiliated firms
(the "UAM Affiliated Firms"). UAM believes that permitting UAM Affiliated
Firms to retain control over their investment advisory decisions is necessary
to allow them to continue to provide investment management services that are
intended to meet the particular needs of their respective clients.
Accordingly, after acquisition by UAM, UAM Affiliated Firms continue to op-
erate under their own firm name, with their own leadership and individual in-
vestment philosophy and approach. Each UAM Affiliated Firm manages its own
business independently on a day-to-day basis. Investment strategies employed
and securities selected by UAM Affiliated Firms are separately chosen by each
of them.
ADVISORY FEES
As compensation for services rendered by the Adviser under the Investment
Advisory Agreement, the Portfolio pays the Adviser an annual fee in monthly
15
<PAGE>
installments, calculated by applying the following annual percentage rate to
the Portfolio's average daily net assets for the month: 1.00%
During the Fund's initial fiscal period ended March 31, 1994, Crescent Man-
agement, the Portfolio's previous Adviser, received advisory fees of $75,407
and reimbursed expenses of $927. For the fiscal year ended March 31, 1995, the
previous Adviser received advisory fees of $132,646. For the fiscal year ended
March 31, 1996, the previous Adviser received advisory fees of $189,156.
SERVICE AND DISTRIBUTION PLANS
As stated in the Portfolio's Service Class Shares Prospectus, UAM Fund Dis-
tributors, Inc. (the "Distributor") may enter into agreements with broker-
dealers and other financial institutions ("Service Agents"), pursuant to which
they will provide administrative support services to Service Class sharehold-
ers who are their customers ("Customers") in consideration of the Fund's pay-
ment of [0.25%] (on an annualized basis) of the average daily net asset value
of the Service Class Shares held by the Service Agent for the benefit of its
Customers. Such services include:
(a) acting as the sole shareholder of record and nominee for beneficial
owners;
(b) maintaining account records for such beneficial owners of the Fund's
shares;
(c) opening and closing accounts;
(d) answering questions and handling correspondence from shareholders
about their accounts;
(e) processing shareholder orders to purchase, redeem and exchange shares;
(f) handling the transmission of funds representing the purchase price or
redemption proceeds;
(g) issuing confirmations for transactions in the Fund's shares by share-
holders;
(h) distributing current copies of prospectuses, statements of additional
information and shareholder reports;
(i) assisting customers in completing application forms, selecting divi-
dend and other account options and opening any necessary custody ac-
counts;
(j) providing account maintenance and accounting support for all transac-
tions; and
(k) performing such additional shareholder services as may be agreed upon
by the Fund and the Service Agent, provided that any such additional
shareholder service must constitute a permissible non-banking activity
in accordance with the then current regulations of, and interpreta-
tions thereof by, the Board of Governors of the Federal Reserve Sys-
tem, if applicable.
16
<PAGE>
Each agreement with a Service Agent is governed by a Shareholder Service
Plan (the "Service Plan") that has been adopted by the Fund's Board of Trust-
ees. Pursuant to the Service Plan, the Board of Trustees reviews, at least
quarterly, a written report of the amounts expended under each agreement with
Service Agents and the purposes for which the expenditures were made. In addi-
tion, arrangements with Service Agents must be approved annually by a majority
of the Fund's Trustees, including a majority of the Trustees who are not "in-
terested persons" of the company as defined in the 1940 Act and have no direct
or indirect financial interest in such arrangements.
The Board of Trustees has approved the arrangements with Service Agents
based on information provided by the Fund's service contractors that there is
a reasonable likelihood that the arrangements will benefit the Fund and its
shareholders by affording the Fund greater flexibility in connection with the
servicing of the accounts of the beneficial owners of its shares in an effi-
cient manner. Any material amendment to the Fund's arrangements with Service
Agents must be approved by a majority of the Fund's Board of Trustees (includ-
ing a majority of the disinterested Trustees). So long as the arrangements
with Service Agents are in effect, the selection and nomination of the members
of the Fund's Board of Trustees who are not "interested persons" (as defined
in the 1940 Act) of the Fund will be committed to the discretion of such non-
interested Trustees.
Pursuant to Rule 12b-1 under the 1940 Act, the Fund has adopted a Distribu-
tion Plan for the Service Class Shares of the Fund (the "Distribution Plan").
The Distribution Plan permits the Fund to pay for certain distribution, promo-
tional and related expenses involved in the marketing of only the Service
Class Shares.
The Distribution Plan permits the Service Class Shares, pursuant to the Dis-
tribution Agreement, to pay a monthly fee to the Distributor for its services
and expenses in distributing and promoting sales of the Service Class Shares.
These expenses include, among other things, preparing and distributing adver-
tisements, sales literature and prospectuses and reports used for sales pur-
poses, compensating sales and marketing personnel, and paying distribution and
maintenance fees to securities brokers and dealers who enter into agreements
with the Distributor. In addition, the Service Class Shares may make payments
directly to other unaffiliated parties, who either aid in the distribution of
their shares or provide services to the Class.
The maximum annual aggregate fee payable by the Fund under the Service and
Distribution Plans (the "Plans"), is 0.75% of the Service Class Shares' aver-
age daily net assets for the year. The Fund's Board of Trustees may reduce
this amount at any time. Although the maximum fee payable under the 12b-1 Plan
relating to the Service Class Shares is 0.75% of average daily net assets of
such class, the Board of Trustees has determined that the annual fee, payable
on a monthly basis, under the Plans relating to the Service Class Shares, cur-
rently can-
17
<PAGE>
not exceed .50% of the average daily net assets represented by the Service
Class. While the current fee which will be payable under the Service Plan and
Distribution Plan has been set at [0.25%], the Plans permit a full 0.75% on
all assets to be paid at any time following appropriate Board approval.
All of the distribution expenses incurred by the Distributor and others,
such as broker/dealers, in excess of the amount paid by the Service Class
Shares will be borne by such persons without any reimbursement from such Clas-
ses. Subject to seeking best price and execution, the Fund may, from time to
time, buy or sell portfolio securities from or to firms which receive payments
under the Plans. From time to time, the Distributor may pay additional amounts
from its own resources to dealers for aid in distribution or for aid in pro-
viding administrative services to shareholders.
The Plans, the Distribution Agreement and the form of dealer's and services
agreements have all been approved by the Board of Trustees of the Fund, in-
cluding a majority of the Trustees who are not "interested persons" (as de-
fined in the 1940 Act) of the Fund and who have no direct or indirect finan-
cial interest in the Plans or any related agreements, by vote cast in person
at a meeting duly called for the purpose of voting on the Plan and such Agree-
ments. Continuation of the Plans, the Distribution Agreement and the related
agreements must be approved annually by the Board of Trustees in the same man-
ner, as specified above. The FPA Crescent Portfolio Service Class Shares have
not been offered prior to the date of this Statement.
Each year the Trustees must determine whether continuation of the Plans is
in the best interest of the shareholders of Service Class Shares and that
there is a reasonable likelihood of the Plans providing a benefit to the
Class. The Plans, the Distribution Agreement and the related agreements with
any broker-dealer or others relating to the Class may be terminated at any
time without penalty by a majority of those Trustees who are not "interested
persons" or by a majority vote of the outstanding voting securities of the
Class. Any amendment materially increasing the maximum percentage payable un-
der the Plans must likewise be approved by a majority vote of the relevant
Class' outstanding voting securities, as well as by a majority vote of those
Trustees who are not "interested persons." Also, any other material amendment
to the Plans must be approved by a majority vote of the Trustees including a
majority of the Trustees of the Fund having no interest in the Plans. In addi-
tion, in order for the Plans to remain effective, the selection and nomination
of Trustees who are not "interested persons" of the Fund must be effected by
the Trustees who themselves are not "interested persons" and who have no di-
rect or indirect financial interest in the Plans. Persons authorized to make
payments under the Plans must provide written reports at least quarterly to
the Board of Trustees for their review. The Fund and the Distributor intend to
operate in compliance with the NASD's Conduct Rules relating to investment
company sales charges.
18
<PAGE>
PORTFOLIO TRANSACTIONS
The Investment Advisory Agreement authorizes the Adviser to select the bro-
kers or dealers that will execute the purchases and sales of investment secu-
rities for the Portfolio and directs the Adviser to use its best efforts to
obtain the best execution with respect to all transactions for the Portfolio.
In doing so, a Portfolio may pay higher commission rates than the lowest rate
available when the Adviser believes it is reasonable to do so in light of the
value of the research, statistical, and pricing services provided by the bro-
ker effecting the transaction. It is not the Fund's practice to allocate bro-
kerage or effect principal transactions with dealers on the basis of sales of
shares which may be made through broker-dealer firms. However, the Adviser may
place portfolio orders with qualified broker-dealers who recommend the Fund's
Portfolios or who act as agents in the purchase of shares of the Portfolios
for their clients. During the fiscal years ended April 30, 1995 and 1996, the
entire Fund paid brokerage commissions of approximately $15,000 and $39,000,
respectively. During the Portfolio's initial fiscal period from June 2, 1993
through March 31, 1994 and for the fiscal years ended March 31, 1995 and 1996,
brokerage commissions paid by the Portfolio totaled $38,160, $51,853, and
$63,938, respectively.
Some securities considered for investment by the Portfolio may also be ap-
propriate for other clients served by the Adviser. If purchases or sales of
securities consistent with the investment policies of a Portfolio and one or
more of these other clients served by the Adviser is considered at or about
the same time, transactions in such securities will be allocated among the
Portfolio and clients in a manner deemed fair and reasonable by the Adviser.
Although there is no specified formula for allocating such transactions, the
various allocation methods used by the Adviser, and the results of such allo-
cations, are subject to periodic review by the Fund's Trustees.
ADMINISTRATIVE SERVICES
The Services provided by the Administrator and Sub-Administrator and the ba-
sis of the current fees payable are described in the Portfolio's Prospectuses.
PERFORMANCE CALCULATIONS
PERFORMANCE
The Portfolio may from time to time quote various performance figures to il-
lustrate past performance. Performance quotations by investment companies are
subject to rules adopted by the Commission, which require the use of standard-
ized performance quotations or, alternatively, that every non-standardized
performance quotation furnished by the Fund be accompanied by certain stan-
dardized performance information computed as required by the Commission. An
explanation of the method used to compute or express performance follows.
19
<PAGE>
TOTAL RETURN
The average annual total return of the Portfolio is determined by finding
the average annual compounded rates of return over 1, 5 and 10 year periods
that would equate an initial hypothetical $1,000 investment to its ending re-
deemable value. The calculation assumes that all dividends and distributions
are reinvested when paid. The quotation assumes the amount was completely re-
deemed at the end of each 1, 5 and 10 year period and the deduction of all ap-
plicable Fund expenses on an annual basis. Since Service Class Shares of the
Portfolio bear additional service and distribution expenses, the average an-
nual total return of the Service Class Shares of the Portfolio will generally
be lower than that of the Institutional Class Shares.
The average annual total rates of return for the FPA Crescent Portfolio In-
stitutional Class Shares from inception on June 2, 1993 to September 30, 1996,
and for the one year period ended September 30, 1996 are as follows:
<TABLE>
<CAPTION>
JUNE 2, 1993
TO YEAR ENDED
OCTOBER 31, 1996 OCTOBER 31, 1996
---------------- ----------------
<S> <C> <C>
FPA Crescent Portfolio................... 16.4% 17.65%
</TABLE>
These figures will be calculated according to the following formula:
P(1 + T)/n/ = ERV
where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment made at
the beginning of the 1, 5 or 10 year periods at the end of the 1,
5 or 10 year periods (or fractional portion thereof).
COMPARISONS
To help investors better evaluate how an investment in the Portfolio of the
Fund might satisfy their investment objective, advertisements regarding the
Fund may discuss various measures of Fund performance as reported by various
financial publications. Advertisements may also compare performance (as calcu-
lated above) to performance as reported by other investments, indices and av-
erages. The following publications, indices and averages may be used:
(a) Dow Jones Composite Average or its component averages -- an unmanaged
index composed of 30 blue-chip industrial corporation stocks (Dow
Jones Industrial Average), 15 utilities company stocks and 20 trans-
portation stocks. Comparisons of performance assume reinvestment of
dividends.
20
<PAGE>
(b) Standard & Poor's 500 Stock Index or its component indices -- an un-
managed index composed of 400 industrial stocks, 40 financial stocks,
40 utilities stocks and 20 transportation stocks. Comparisons of per-
formance assume reinvestment of dividend.
(c) The New York Stock Exchange composite or component indices -- unman-
aged indices of all industrial, utilities, transportation and finance
stocks listed on the New York Stock Exchange.
(d) Wilshire 5000 Equity index or its component indices -- represents the
return on the market value of all common equity securities for which
daily pricing is available. Comparisons of performance assume rein-
vestment of dividends.
(e) Lipper -- Mutual Fund Performance Analysis and Lipper -- Fixed Income
Fund Performance Analysis -- measure total return and average current
yield for the mutual fund industry. Rank individual mutual fund per-
formance over specified time periods, assuming reinvestment of all
distributions, exclusive of any applicable sales charges.
(f) Morgan Stanley Capital International EAFE Index and World Index -- re-
spectively, arithmetic, market value-weighted averages of the perfor-
mance of over 900 securities listed on the stock exchanges of coun-
tries in Europe, Australia and the Far East, and over 1,400 securities
listed on the stock exchanges of these continents, including North
America.
(g) Goldman Sachs 100 Convertible Bond Index -- currently includes 67
bonds and 33 preferred. The original list of names was generated by
screening for convertible issues of 100 million or greater in market
capitalization. The index is priced monthly.
(h) Salomon Brothers GNMA Index -- includes pools of mortgages originated
by private lenders and guaranteed by the mortgage pools of the Govern-
ment National Mortgage Association.
(i) Salomon Brothers High Grade Corporate Bond Index -- consists of pub-
licly issued, non-convertible corporate bonds rated AA or AAA. It is a
value-weighted, total return index, including approximately 800 issues
with maturities of 12 years or greater.
(j) Salomon Brothers Broad Investment Grade Bond -- is a market-weighted
index that contains approximately 4,700 individually priced investment
grade corporate bonds rated BBB or better, U.S. Treasury/ agency is-
sues and mortgage pass through securities.
(k) Lehman Brothers LONG-TERM Treasury Bond -- is composed of all bonds
covered by the Lehman Brothers Treasury Bond Index with maturities of
10 years or greater.
21
<PAGE>
(l) Lehman Brothers Government/Corporate Bond Index -- is a broad-based
unmanaged index of all U.S. Government (U.S. Treasury and agency) and
corporate bonds that are investment grade (BBB) or higher with at
least one year to maturity.
(m) Russell 2000 -- composed of the 2,000 smallest stocks in the Russell
3000, a market value weighted index of the 3,000 largest U.S. public-
ly-traded companies.
(n) Russell 2,500 -- composed of the 2,500 smallest stocks in the Russell
3000, a market value weighted index of the 3,000 largest U.S. public-
ly-traded companies.
(o) NASDAQ Industrial Index -- is composed of more than 3,000 industrial
issues. It is a value-weighted index calculated on price change only
and does not include income.
(p) Value Line -- composed of over 1,600 stocks in the Value Line Invest-
ment Survey.
(q) Composite indices -- 60% Russell 2500 Index and 40% Lehman Brothers
Government/Corporate Bond Index; 70% Standard & Poor's 500 Stock Index
and 30% NASDAQ Industrial Index; 35% Standard & Poor's 500 Stock Index
and 65% Salomon Brothers High Grade Bond Index; all stocks on the
NASDAQ system exclusive of those traded on an exchange, and 65% Stan-
dard & Poor's 500 Stock Index and 35% Salomon Brothers High Grade Bond
Index.
(r) CDA Mutual Fund Report published by CDA Investment Technologies,
Inc. -- analyzes price, current yield, risk, total return and average
rate of return (average compounded growth rate) over specified time
periods for the mutual fund industry.
(s) Mutual Fund Source Book published by Morningstar, Inc. -- analyzes
price, yield, risk and total return for equity funds.
(t) Financial publications: Business Week, Changing Times, Financial
World, Forbes, Fortune, Money, Barron's, Consumer's Digest, Financial
Times, Global Investor, Wall Street Journal and Weisenberger Invest-
ment Companies Service -- publications that rate fund performance over
specified time periods.
(u) Consumer Price Index (or Cost of Living Index), published by the U.S.
Bureau of Labor Statistics -- a statistical measure of change over
time in the price of goods and services in major expenditure groups.
(v) Stocks, Bonds, Bills and Inflation, published by Ibbotson Associ-
ates -- historical measure of yield, price and total return for common
and small company stock, long-term government bonds, U. S. Treasury
bills and inflation.
(w) Savings and Loan Historical Interest Rates -- as published by the U.S.
Savings & Loan League Fact Book.
22
<PAGE>
(x) Historical data supplied by the research departments of First Boston
Corporation; the J.P. Morgan companies; Salomon Brothers; Merrill
Lynch, Pierce, Fenner & Smith; Lehman Brothers, Inc.; and Bloomberg
L.P.
In assessing such comparisons of performance, an investor should keep in
mind that the composition of the investments in the reported indices and aver-
ages is not identical to the composition of investments in the Portfolio, that
the averages are generally unmanaged, and that the items included in the cal-
culations of such averages may not be identical to the formula used by the
Portfolio to calculate its performance. In addition, there can be no assurance
that the Fund will continue this performance as compared to such other aver-
ages.
GENERAL INFORMATION
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Fund was organized under the name "The Regis Fund II," as a Delaware
business trust on May 18, 1994. On October 31, 1995, the name of the Fund was
changed to "UAM Funds Trust". The Fund's principal executive office is located
at One International Place, 44th Floor, Boston, MA 02110; however, all in-
vestor correspondence should be directed to the Fund at UAM Funds Service Cen-
ter, c/o Chase Global Funds Services Company, P.O. Box 2798, Boston, MA 02208-
2798. The Fund's Agreement and Declaration of Trust permits the Fund to issue
an unlimited number of shares of beneficial interest, without par value. The
Trustees have the power to designate one or more series ("Portfolios") of
shares of beneficial interest without further action by shareholders.
On each matter submitted to a vote of the Shareholders, each holder of a
Share shall be entitled to one vote for each whole Share and a fractional vote
for each fractional Share standing in his or her name on the books of the
Fund.
In the event of liquidation of the Fund, the holders of the Shares of each
Portfolio or any class thereof that has been established and designated shall
be entitled to receive, when and as declared by the Trustees, the excess of
the assets belonging to that Portfolio, or in the case of a class, belonging
to that Portfolio and allocable to that class, over the liabilities belonging
to that Portfolio or class. The assets so distributable to the holders of
Shares of any particular Portfolio or class thereof shall be distributed to
the holders in proportion to the number of Shares of that Portfolio or class
thereof held by them and recorded on the books of the Fund. The liquidation of
any Portfolio or class thereof may be authorized at any time by vote of a ma-
jority of the Trustees then in office.
Shareholders have no pre-emptive or other rights to subscribe to any addi-
tional Shares or other securities issued by the Fund or any Portfolio, except
as the Trustees in their sole discretion shall have determined by vote.
23
<PAGE>
PRINCIPAL HOLDERS OF SECURITIES
To the best of the Fund's knowledge, as of December 6, 1996, the Portfolio's
shareholders of record and beneficial owners who owned more than 5% of the
Portfolio's Institutional Class Share (prior to reorganization, the FPA Cres-
cent Fund's shares) are as follows. An asterisk (*) denotes an account affili-
ated with the Fund's investment adviser, officers or trustees:
<TABLE>
<CAPTION>
PERCENTAGE OF PORTFOLIO'S
SHAREHOLDER OUTSTANDING SHARES
----------- -------------------------
<S> <C>
David I. Sofro TTEE f/b/o Trust Dtd 1990........... 12.00%
P. O. Box 9110
Van Nuys, California 91409-9110
*FPA Multi-Advisors Fund, L.P...................... 11.90%
c/o First Pacific Advisors, Inc.
11400 W. Olympic Boulevard, Suite 1200
Los Angeles, California 90064
Bear Stearns Securities Corporation................ 6.80%
Special Custody Account
One Metrotech Center North
Brooklyn, New York 11201-3872
Hillside Memorial Park Fund........................ 5.00%
Mark A. Friedman TTEE
P. O. Box 451039
Los Angeles, California 90045-8509
</TABLE>
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
The Fund's policy is to distribute substantially all of the Portfolio's net
investment income, if any, together with any net realized capital gains in the
amount and at the times that will avoid both income (including capital gains)
taxes on it and the imposition of the Federal excise tax on undistributed in-
come and capital gains. (See discussion under "Dividends, Capital Gains Dis-
tributions and Taxes" in the Prospectuses.) The amounts of any income divi-
dends or capital gains distributions cannot be predicted.
Any dividend or distribution paid shortly after the purchase of shares of
the Portfolio by an investor may have the effect of reducing the per share net
asset value of the Portfolio by the per share amount of the dividend or dis-
tribution. Furthermore, such dividends or distributions, although in effect a
return of capital, are subject to income taxes as set forth in the Prospectus-
es.
As set forth in the Prospectuses, unless the shareholder elects otherwise in
writing, all dividend and capital gains distributions are automatically re-
ceived in additional shares of the Portfolio at net asset value (as of the
business day following the record date). This will remain in effect until the
Fund is notified by the
24
<PAGE>
shareholder in writing at least three days prior to the record date that ei-
ther the Income Option (income dividends in cash and capital gains distribu-
tions in additional shares at net asset value) or the Cash Option (both income
dividends and capital gains distributions in cash) has been elected. An ac-
count statement is sent to shareholders whenever an income dividend or capital
gains distribution is paid.
The Portfolio will be treated as a separate entity (and hence as a separate
"regulated investment company") for Federal tax purposes. Any net capital
gains recognized by the Portfolio will be distributed to its investors without
need to offset (for Federal income tax purposes) such gains against any net
capital losses of another Portfolio.
FEDERAL TAXES
In order for the Portfolio to continue to qualify for Federal income tax
treatment as a regulated investment company under the Code, at least 90% of
its gross income for a taxable year must be derived from qualifying income,
i.e., dividends, interest, income derived from loans of securities, and gains
from the sale of securities or foreign currencies or other income derived with
respect to its business of investing in such securities or currencies. In ad-
dition, gains realized on the sale or other disposition of securities held for
less than three months must be limited to less than 30% of the Portfolio's an-
nual gross income.
The Portfolio will distribute to shareholders annually any net capital gains
which have been recognized for Federal income tax purposes. Shareholders will
be advised on the nature of the payments.
CODE OF ETHICS
The Fund has adopted a Code of Ethics which restricts to a certain extent
personal transactions by access persons of the Fund and imposes certain dis-
closure and reporting obligations.
FINANCIAL STATEMENTS
The Financial Statements of the Portfolio's Institutional Class Shares for
the fiscal year ended March 31, 1996 and the six month period ended September
30, 1996, and the Financial Highlights for the respective periods presented
which appear in the 1996 Annual Report and the report thereon of Tait, Weller
& Baker, the predecessor independent accountants of The Crescent Fund, also
appearing therein, and Semi-Annual Report to Shareholders of The Crescent Fund
(which was a series of Professionally Managed Portfolios until reorganization
into UAM Funds Trust on October 1, 1996) are on the following pages.
25
<PAGE>
UAM FUNDS
FPA CRESCENT PORTFOLIO
PORTFOLIO OF INVESTMENTS
March 31, 1996
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (64.5%)
- --------------------------------------------------------------------------------
BANKS (4.6%)
Chase Manhattan Corp. .................................... 5,800 $ 426,300
Santa Barbara Bancorp..................................... 24,900 594,487
-----------
1,020,787
- --------------------------------------------------------------------------------
CONSUMER GOODS (2.6%)
Alberto Culver Co., Class A............................... 1,500 53,438
Reebok International, Ltd. ............................... 10,300 284,538
RJR Nabisco Holdings, Inc. ............................... 8,000 242,000
-----------
579,976
- --------------------------------------------------------------------------------
FINANCIAL SERVICES (13.4%)
American Express Co. ..................................... 9,350 461,656
*Dundee Bancorp, Inc., Class A............................. 66,400 828,426
Federal Home Loan Mortgage Corp. ......................... 5,150 439,037
John Nuveen Co., Class A.................................. 13,000 316,875
Lehman Brothers Holdings, Inc. ........................... 8,000 214,000
Phoenix Duff & Phelps Corp. .............................. 110,300 689,375
-----------
2,949,369
- --------------------------------------------------------------------------------
HEALTHCARE (2.3%)
*Global Health Sciences Fund............................... 10,000 180,000
*Summit Care Corp. ........................................ 15,500 329,375
-----------
509,375
- --------------------------------------------------------------------------------
INSURANCE (3.9%)
Foremost Corp. of America................................. 5,500 302,500
U.S. Facilities Corp. .................................... 30,000 562,500
-----------
865,000
- --------------------------------------------------------------------------------
MANUFACTURING (8.1%)
Coachmen Industries, Inc. ................................ 18,200 477,750
*Image Industries, Inc. ................................... 42,000 483,000
*Littelfuse, Inc. ......................................... 15,000 566,250
</TABLE>
See accompanying notes to financial statements.
26
<PAGE>
UAM FUNDS
FPA CRESCENT PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
March 31, 1996
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
- -------------------------------------------------------------------------------
MANUFACTURING--(CONTINUED)
Reliance Steel & Aluminum Co. ............................ 10,000 $ 228,750
-----------
1,755,750
- -------------------------------------------------------------------------------
MEDIA AND TELECOMMUNICATIONS (2.4%)
Central Newspapers, Inc., Class A......................... 12,000 427,500
*Playboy Enterprises, Inc. ................................ 10,000 101,250
-----------
528,750
- -------------------------------------------------------------------------------
REAL ESTATE (5.7%)
Crown American Realty Trust............................... 41,100 313,388
Felcor Suite Hotels, Inc.................................. 5,000 155,000
Price Enterprises, Inc.................................... 50,000 787,500
-----------
1,255,888
- -------------------------------------------------------------------------------
RESTAURANTS (1.1%)
*IHOP Corp................................................. 10,000 251,250
- -------------------------------------------------------------------------------
RETAIL (6.2%)
*Good Guys, Inc............................................ 60,000 525,000
*Mac Frugals Bargains Close-Outs Inc....................... 40,100 561,400
*Rhodes, Inc............................................... 23,000 218,500
*Sportmart, Inc., Class A.................................. 20,000 68,750
-----------
1,373,650
- -------------------------------------------------------------------------------
SAVINGS AND LOANS (2.9%)
*HF Bancorp, Inc........................................... 31,600 316,000
Long Island Bancorp, Inc.................................. 11,000 309,375
-----------
625,375
- -------------------------------------------------------------------------------
SERVICES (4.3%)
*Children's Discovery Centers of America, Inc.............. 25,000 125,000
*Pinkerton's, Inc.......................................... 37,500 815,625
-----------
940,625
- -------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
27
<PAGE>
UAM FUNDS
FPA CRESCENT PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
March 31, 1996
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
- -------------------------------------------------------------------------------
TECHNOLOGY (3.5%)
*Arrow Electronics, Inc................................ 9,000 $ 423,000
*Wang Laboratories, Inc................................ 15,000 356,250
-----------
779,250
- -------------------------------------------------------------------------------
MISCELLANEOUS (3.5%)
*Semi-Tech Global, Ltd................................. 102,250 770,119
- -------------------------------------------------------------------------------
TOTAL COMMON STOCKS (COST $11,862,949)................. 14,205,164
- -------------------------------------------------------------------------------
PREFERRED STOCKS (4.8%)
- -------------------------------------------------------------------------------
CONSUMER GOODS (0.7%)
RJR Nabisco Holdings Corp., 10%, 12/31/2044 Series T.. 6,450 155,606
- -------------------------------------------------------------------------------
FINANCIAL SERVICES (1.1%)
Phoenix Duff & Phelps, $1.50, 11/1/2015, Series A..... 9,730 233,520
- -------------------------------------------------------------------------------
MANUFACTURING (1.8%)
Schuller Corp., $2.70, Series B....................... 16,050 405,262
- -------------------------------------------------------------------------------
MEDICAL RELATED (0.9%)
Foxmeyer Health, $4.20, 11/30/2003, Series A.......... 6,315 205,222
- -------------------------------------------------------------------------------
RETAIL (0.3%)
Signet Group PLC, $1.06 Convertible................... 5,800 59,450
- -------------------------------------------------------------------------------
TOTAL PREFERRED STOCKS (COST $1,060,858)............... 1,059,060
- -------------------------------------------------------------------------------
PRINCIPAL
AMOUNT
- -------------------------------------------------------------------------------
CORPORATE BONDS (24.1%)
- -------------------------------------------------------------------------------
CONSUMER GOODS (0.6%)
Playtex Family Products Corp., 9%, due 12/15/2003..... $ 150,000 135,375
- -------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
28
<PAGE>
UAM FUNDS
FPA CRESCENT PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
March 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- -------------------------------------------------------------------------------
<S> <C> <C>
CORPORATE BONDS--(CONTINUED)
- -------------------------------------------------------------------------------
ENERGY (1.8%)
Mesa Capital Corp., 12.75%, due 6/30/1998.............. $ 400,000 $ 394,000
- -------------------------------------------------------------------------------
LEISURE (0.4%)
MGM Grand Hotel Finance Corp., 12%, due 5/1/2002....... 85,000 93,925
- -------------------------------------------------------------------------------
FINANCIAL SERVICES (1.4%)
GPA Delaware, Inc., Debs., 8.75%, due 12/15/1998....... 300,000 304,500
- -------------------------------------------------------------------------------
MANUFACTURING (2.5%)
Fomento Economico Mex., 9.5%, due 7/22/1997............ 410,000 413,331
Triangle Pacific Corp., 10.5%, due 8/1/2003............ 140,000 147,700
-----------
561,031
- -------------------------------------------------------------------------------
MEDIA AND TELECOMMUNICATIONS (3.8%)
Adelphia Communications Corp., 12.5%, due 5/15/2002.... 135,000 140,063
Busse Broadcasting Corp., 11.625%, due 10/15/2000...... 327,000 323,730
Grupo Televisa, 10%, due 11/9/1997..................... 210,000 211,050
Marvel Parent Holdings, Inc., 0%, due 4/15/1998........ 225,000 169,875
-----------
844,718
- -------------------------------------------------------------------------------
MISCELLANEOUS (1.4%)
International Semi-Tech Microelectric, Inc., 11.5%, due
8/15/2003............................................ 510,000 306,000
- -------------------------------------------------------------------------------
REAL ESTATE (8.3%)
Alexander Haagen Properties, Inc.,
7.5%, due 1/15/2001.................................. 500,000 432,500
Rockefeller Center Properties, Inc.,
0%, due 12/31/2000................................... 1,500,000 915,000
Trump Plaza Funding, Inc., 10.875%, due 6/15/1998...... 125,000 140,625
</TABLE>
See accompanying notes to financial statements.
29
<PAGE>
UAM FUNDS
FPA CRESCENT PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
March 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- -------------------------------------------------------------------------------
<S> <C> <C>
CORPORATE BONDS--(CONTINUED)
- -------------------------------------------------------------------------------
REAL ESTATE--(CONTINUED)
Value Property Trust, 11.125%, due 9/29/2002........... $ 300,000 $ 301,500
-----------
1,789,625
- -------------------------------------------------------------------------------
RETAIL (0.3%)
Fabri-Centers of America, Inc., 6.25%, due 3/1/2002.... 80,000 67,800
- -------------------------------------------------------------------------------
SERVICES (2.6%)
EMCOR Group, Inc., 7%, due 12/15/1997.................. 347,051 350,522
EMCOR Group, Inc., Series C, 11%, due 12/15/2001....... 250,000 226,250
-----------
576,772
- -------------------------------------------------------------------------------
TECHNOLOGY (1.0%)
Anacomp, Inc., 12.25%, due 12/26/1997 (a).............. 214,379 219,202
- -------------------------------------------------------------------------------
TOTAL CORPORATE BONDS (COST $5,190,379)................. 5,292,948
- -------------------------------------------------------------------------------
REPURCHASE AGREEMENT (5.3%)
- -------------------------------------------------------------------------------
Star Bank Repurchase Agreement, 5.10%, dated 3/29/1996,
due 4/1/1996, collateralized by $1,250,000 GNMA,
7.0%, due 5/20/2022
(value of collateral is $1,270,700) (proceeds
$1,173,492) (COST $1,173,000)........................ 1,173,000 1,173,000
- -------------------------------------------------------------------------------
TOTAL INVESTMENT IN SECURITIES (COST $19,287,186)
(98.7%)............................................... $21,730,172
- -------------------------------------------------------------------------------
OTHER ASSETS IN EXCESS OF LIABILITIES (1.3%)............ 294,556
- -------------------------------------------------------------------------------
TOTAL NET ASSETS (100.0%)............................... $22,024,728
===============================================================================
</TABLE>
* Indicates non-income producing security.
(a) Security is in default. Interest is not being accrued or received.
See accompanying notes to financial statements.
30
<PAGE>
UAM FUNDS
FPA CRESCENT PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
March 31, 1996
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
SECURITIES SOLD SHORT AT MARCH 31, 1996
- -------------------------------------------------------------------------------
MARKET
COMMON STOCKS SHARES VALUE
- -------------------------------------------------------------------------------
<S> <C> <C>
Acclaim Entertainment, Inc.................................. 2,500 $ 26,406
Alberto Culver Co., Class B................................. 1,500 57,750
Bed Bath & Beyond, Inc...................................... 3,000 158,250
Castle & Cooke, Inc......................................... 833 13,645
Dole Food Co................................................ 2,500 96,250
Nabisco Holdings Corp., Class A............................. 6,400 209,600
Regal Cinemas, Inc.......................................... 3,000 111,000
Sensormatic Electronics Corp................................ 5,500 111,375
Smithfield Foods, Inc....................................... 3,500 101,500
Sportmart, Inc.............................................. 20,000 102,500
Warnaco Group, Inc., Class A................................ 4,000 96,500
----------
TOTAL (PROCEEDS $974,512).................................... $1,084,776
===============================================================================
</TABLE>
See accompanying notes to financial statements.
31
<PAGE>
FPA CRESCENT PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
AT
MARCH 31,
1996
- -------------------------------------------------------------------------------
<S> <C>
ASSETS
Investments in securities, at value (identified cost $19,287,186)
(Note 2-A)...................................................... $21,730,172
Cash.............................................................. 72,708
Deposits with brokers for securities sold short................... 1,675,523
Receivables:
Fund shares sold................................................. 51,992
Dividends and interest........................................... 114,049
Investment securities sold....................................... 201,624
Organization costs (net of accumulated amortization of $8,011)
(Note 2-F)...................................................... 8,667
Prepaid expenses.................................................. 7,681
- -------------------------------------------------------------------------------
Total assets.................................................... 23,862,416
- -------------------------------------------------------------------------------
LIABILITIES
Securities sold short, at value--proceeds $974,512................ 1,084,776
Payables:
Investment securities purchased.................................. 718,921
Investment advisor............................................... 18,228
Manager.......................................................... 4,557
Accrued expenses.................................................. 11,206
- -------------------------------------------------------------------------------
Total liabilities............................................... 1,837,688
- -------------------------------------------------------------------------------
NET ASSETS......................................................... $22,024,728
===============================================================================
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
($22,024,728/1,738,874 shares outstanding; unlimited number of
no par value shares authorized)................................. $ 12.67
===============================================================================
SOURCE OF NET ASSETS
Paid-in capital................................................... $18,624,860
Undistributed net investment income............................... 170,505
Undistributed net realized gain on investments.................... 896,641
Net unrealized appreciation of investments........................ 2,332,722
- -------------------------------------------------------------------------------
Net assets...................................................... $22,024,728
===============================================================================
</TABLE>
See accompanying notes to financial statements
32
<PAGE>
FPA CRESCENT PORTFOLIO
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED
MARCH 31,
1996
- --------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
Income
Interest........................................................... $ 485,568
Dividends.......................................................... 458,578
- --------------------------------------------------------------------------------
Total investment income........................................... 944,146
- --------------------------------------------------------------------------------
Expenses
Advisory fees (Note 3)............................................. 189,156
Management fee (Note 3)............................................ 51,509
Custodian and accounting fees...................................... 19,557
Transfer agent fees................................................ 7,510
Auditing fees...................................................... 11,460
Legal fees......................................................... 2,015
Reports to shareholders............................................ 3,198
Trustees' fees..................................................... 3,609
Insurance.......................................................... 3,388
Registration fees.................................................. 3,021
Amortization of organization costs................................. 4,011
Dividends on securities sold short................................. 8,414
Miscellaneous...................................................... 3,191
- --------------------------------------------------------------------------------
Net expenses....................................................... 310,039
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME............................................. 634,107
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on security transactions.......................... 2,192,917
Net realized gain on call options written........................... 121,154
Net realized loss on short sale transactions........................ (71,151)
Net increase in unrealized appreciation of investments.............. 1,246,238
- --------------------------------------------------------------------------------
Net realized and unrealized gain on investments.................... 3,489,158
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.............. $4,123,265
================================================================================
</TABLE>
See accompanying notes to financial statements.
33
<PAGE>
FPA CRESCENT PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
MARCH 31, MARCH 31,
1996 1995
- -------------------------------------------------------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS FROM:
OPERATIONS
Net investment income............................... $ 634,107 $ 287,185
Net realized gain on security transactions.......... 2,192,917 281,570
Net realized gain on call options written........... 121,154 32,149
Net realized (loss) gain on short sale
transactions...................................... (71,151) 15,394
Net increase in unrealized appreciation of
investments....................................... 1,246,238 617,069
- -------------------------------------------------------------------------------
Net increase in net assets resulting from
operations....................................... 4,123,265 1,233,367
- -------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Net investment income ($0.37 and $0.18 per share,
respectively)..................................... (559,924) (227,520)
Net realized gain from security transactions
($0.88 and $0.53 per share, respectively)......... (1,361,813) (602,478)
- -------------------------------------------------------------------------------
Total dividends and distributions.................. (1,921,737) (829,998)
- -------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net increase in net assets derived from net change
in outstanding shares (a)......................... 3,832,810 5,413,466
- -------------------------------------------------------------------------------
Total increase in net assets....................... 6,034,338 5,816,835
NET ASSETS
Beginning of year................................... 15,990,390 10,173,555
- -------------------------------------------------------------------------------
End of year (including undistributed net investment
income of $170,505 and $92,311, respectively)..... $22,024,728 $15,990,390
===============================================================================
</TABLE>
(a) A summary of capital shares transactions is as follows:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
MARCH 31, 1996 MARCH 31, 1995
---------------------- ---------------------
SHARES VALUE SHARES VALUE
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold.................... 356,056 $ 4,376,535 640,197 $ 7,000,403
Shares issued in connection
with payment of dividends.... 153,426 1,821,467 76,721 815,341
Shares redeemed................ (193,936) (2,365,192) (221,594) (2,402,278)
- -----------------------------------------------------------------------------
Net increase................... 315,546 $ 3,832,810 495,324 $ 5,413,466
=============================================================================
</TABLE>
See accompanying notes to financial statements.
34
<PAGE>
FPA CRESCENT PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A CAPITAL SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED JUNE 2, 1993*
MARCH 31, MARCH 31, THROUGH
1996 1995 MARCH 31, 1994
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD..... $11.23 $10.96 $10.00
- -------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income................... .40 .21 .13
Net realized and unrealized gain on
investments........................... 2.29 .77 .99
- -------------------------------------------------------------------------------
Total from investment operations....... 2.69 .98 1.12
- -------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income.... (.37) (.18) (.10)
Distributions from net capital gains.... (.88) (.53) (.06)
- -------------------------------------------------------------------------------
Total distributions.................... (1.25) (.71) (.16)
- -------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD........... $12.67 $11.23 $10.96
===============================================================================
TOTAL RETURN............................. 24.71% 9.35% 13.78%+
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (millions)..... $22.0 $16.0 $10.2
Ratio of expenses to average net assets:
Before expense reimbursement............ 1.59% 1.65% 1.86%+
After expense reimbursement............. 1.59% 1.65% 1.85%+
Ratio of net investment income to average
net assets:
Before expense reimbursement............ 3.35% 2.16% 1.60%+
After expense reimbursement............. 3.35% 2.16% 1.61%+
Portfolio turnover rate.................. 99.98% 101.41% 88.88%
- -------------------------------------------------------------------------------
</TABLE>
* Commencement of operations.
+ Annualized.
See accompanying notes to financial statements.
35
<PAGE>
FPA CRESCENT PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
AT MARCH 31, 1996
NOTE 1 -- ORGANIZATION
The Crescent Fund (the "Fund") is a series of shares of beneficial interest of
Professionally Managed Portfolios (the "Trust"), which is registered under the
Investment Company Act of 1940 (the "1940 Act") as a diversified, open-end
management company. The Fund's primary investment objective is to provide a
total return consistent with reasonable investment risk through a combination
of income and capital appreciation. The Fund seeks to achieve its objective by
investing in a combination of equity securities and fixed income obligations,
but there are no assurances that this objective will be achieved. The value of
the Fund's investment portfolio will fluctuate with market conditions and an
investor's shares, when redeemed, may be worth more or less than their origi-
nal cost. The Fund began operations on June 2, 1993.
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund. These policies are in conformity with generally accepted
accounting principles.
A. SECURITY VALUATION. Investments in securities traded on a national se-
curities exchange or included in the NASDAQ National Market System are
valued at the last reported sale price at the close of regular trading on
the last business day of the period; securities traded on an exchange or
NASDAQ for which there has been no sale and other over-the-counter securi-
ties are valued at the last reported bid price. Securities for which quo-
tations are not readily available are valued at their respective fair val-
ues as determined in good faith by the Board of Trustees. Short-term in-
vestments are stated at cost, which when combined with accrued interest,
approximates market value.
B. FEDERAL INCOME TAXES. The Fund intends to comply with the requirements
of the Internal Revenue Code applicable to regulated investment companies
and to distribute all of its taxable income to its shareholders. There-
fore, no federal income tax provision is required.
C. SECURITY TRANSACTIONS, INVESTMENT INCOME AND DISTRIBUTIONS. As is com-
mon in the industry, security transactions are accounted for on the trade
date. Dividend income and distributions to shareholders are recorded on
the ex-dividend date. Interest income is recognized daily on an accrual
basis. Discounts and premiums on securities purchased are amortized over
the life of the respective securities. Income and capital gains distribu-
tions to shareholders are determined in accordance with income tax regula-
tions which may differ from generally accepted accounting principles.
These differences are
36
<PAGE>
FPA CRESCENT PORTFOLIO
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
primarily due to differing treatments for the deferral of wash sale losses
and amortization of organization costs.
D. SHORT SALES. A short sale transaction occurs when the Fund sells a se-
curity it does not own, in anticipation that the market price of the secu-
rity will decline. If the value of the security sold short increases be-
tween the time of the short sale and the time Fund closed out the short
position, the Fund realizes a loss. Any dividend declared on short posi-
tions existing on the record date shall be recorded on the ex-dividend
date and included as an expense of the period.
E. CALL AND PUT OPTIONS. When the Fund writes a call or put option an
amount equal to the premium received is reflected as a liability. The
amount of the liability is subsequently "marked to market" to reflect the
current market value of the option written. If an option which the Fund
has written either expires on its stipulated expiration date, or if the
Fund enters into a closing purchase transaction, the Fund realizes a gain
(or loss if the cost of the closing transaction exceeds the premium re-
ceived when the option is sold), and the liability related to such option
is extinguished. If a call option which the Fund has written is exercised,
the Fund realizes a gain or loss from the sale of the underlying security
and the proceeds from such a sale are increased by the premium originally
received. If a put option which the Fund has written is exercised, the
amount of the premium originally received reduces the cost of the security
which the Fund purchases upon exercise of the option.
The premium paid by the Fund for the purchase of a call or put option is
recorded as an investment and subsequently marked to market to reflect the
current market value of the option purchased. If an option which the Fund
has purchased expires on the stipulated expiration date, the Fund realizes
a loss in the amount of the cost of the option. If the Fund enters into a
closing transaction, it realizes a gain (loss) if the proceeds from the
sale are greater (less) than the cost of the option purchased. If the Fund
exercises a put option, it realizes a gain or loss from the sale of the
underlying security and the proceeds from such sale will be decreased by
the premium originally paid. If the Fund exercises a call option, the cost
of the security purchased upon exercise is increased by the premium origi-
nally paid.
These option contracts may be listed for trading on a national securities
exchange or traded over-the-counter ("OTC"). OTC options are transacted
directly with dealers and not with a clearing corporation, and there is a
risk of non-performance by the dealer. The Fund, as writer of a call op-
tion, loses the
37
<PAGE>
FPA CRESCENT PORTFOLIO
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
potential for gain on the underlying security above the exercise price
while the option is outstanding. By writing a put option, the Fund might
become obligated to purchase the underlying security at an exercise price
that exceeds the current market price.
F. ORGANIZATION COSTS. Expenses originally incurred by the Advisor in con-
nection with the organization and registration of the Fund's shares will
be borne by the Fund and are being amortized to expense on a straight-line
basis over a period of five years.
G. ACCOUNTING ESTIMATES. In preparing financial statements in conformity
with generally accepted accounting principles, management makes estimates
and assumptions that affect the reported amounts of assets and liabilities
at the date of the financial statements, as well as the reported amounts
of revenues and expenses during the period. Actual results could differ
from those estimates.
NOTE 3 -- INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
For the period ended February 29, 1996, Crescent Management (the "Advisor")
provided the Fund with investment management services under an Investment Ad-
visory Agreement. From March 1, 1996 to March 31, 1996, First Pacific Advisors
(the "Advisor") provided the Fund with investment management services under an
Investment Advisory Agreement. The Advisor furnished all investment advice,
office space and certain administrative services, and provides most of the
personnel needed by the Fund. As compensation for its services, the Advisor
was entitled to a monthly fee at the annual rate of 1.00% based upon the aver-
age daily net assets of the Fund.
The Fund is responsible for its own operating expenses. The Advisor has agreed
to reduce fees payable to it by the Fund to the extent necessary to limit the
Fund's aggregate annual operating expenses to 1.85% of total net assets.
Southampton Investment Management Company (the "Manager") acts as the Fund's
Manager under an Investment Management Agreement. The Manager prepares various
federal and state regulatory filings, reports and returns for the Fund; pre-
pares reports and materials to be supplied to the trustees; monitors the ac-
tivities of the Fund's custodian, transfer agent and accountants; coordinates
the preparation and payment of Fund expenses and reviews the Fund's expense
accruals. For its services, the Manager receives an annual fee equal to the
greater of 0.20% of the Fund's average daily net assets or $30,000.
38
<PAGE>
FPA CRESCENT PORTFOLIO
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
First Fund Distributors, Inc. (the "Distributor") acts as the Fund's principal
underwriter in a continuous public offering of the Fund's shares. The Distrib-
utor is an affiliate of the Administrator.
Certain officers and Trustees of the Fund are also officers and/or directors
of the Manager and Distributor.
NOTE 4 -- PURCHASES AND SALES OF SECURITIES
For the year ended March 31, 1996, the cost of purchases and the proceeds from
sales of securities, excluding short-term securities, were $19,653,502 and
$16,781,085, respectively. At March 31, 1996, the cost of securities for Fed-
eral tax purposes was $19,287,186. Unrealized appreciation and depreciation of
securities was as follows:
<TABLE>
<S> <C>
Unrealized appreciation...................................... $3,182,958
Unrealized depreciation...................................... (850,236)
------------
Net unrealized appreciation................................ $2,332,722
============
</TABLE>
Written options transactions during the year ended March 31, 1996 are summa-
rized as follows:
<TABLE>
<CAPTION>
CALL
OPTIONS
WRITTEN
PREMIUMS
RECEIVED
---------
<S> <C>
Options outstanding, beginning of period......................... $(149,238)
Options written.................................................. (170,428)
Options closed................................................... 0
Options exercised................................................ 0
Options expired.................................................. 319,666
---------
Market value of written options at March 31, 1996................ $ 0
=========
</TABLE>
39
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
TO THE SHAREHOLDERS OF
THE CRESCENT FUND and
THE BOARD OF TRUSTEES OF
PROFESSIONALLY MANAGED PORTFOLIOS
We have audited the accompanying statement of assets and liabilities, includ-
ing the portfolio of investments, of The Crescent Fund (a series of Profes-
sionally Managed Portfolios) as of March 31, 1996, and the related statement
of operations for the year then ended, the statement of changes in net assets
for each of the two years in the period then ended and the financial high-
lights for each of the two years in the period then ended and for the period
from June 2, 1993 (commencement of operations) to March 31, 1994. These finan-
cial statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing stan-
dards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
March 31, 1996, by correspondence with the custodian and brokers. Where bro-
kers did not reply to our confirmation request, we carried out other appropri-
ate auditing procedures. An audit also includes assessing the accounting prin-
ciples used and significant estimates made by management, as well as evaluat-
ing the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of The
Crescent Fund as of March 31, 1996, the results of its operations for the year
then ended, the changes in its net assets for each of the two years in the pe-
riod then ended and the financial highlights for each of the two years in the
period then ended and for the period from June 2, 1993 (commencement of opera-
tions) to March 31, 1994, in conformity with generally accepted accounting
principles.
Tait, Weller & Baker
Philadelphia, Pennsylvania
April 26, 1996
40
<PAGE>
APPENDIX -- DESCRIPTION OF SECURITIES AND RATINGS*
I. DESCRIPTION OF CORPORATE BOND RATINGS
MOODY'S INVESTORS SERVICE , INC. CORPORATE BOND RATINGS:
Aaa -- Bonds which are rated Aaa are judged to be the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt-edge." Interest payments are protected by a large or by an exceptionally
stable margin, and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.
Aa -- Bonds which are rated Aa are judged to be of high quality by all stan-
dards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protec-
tive elements may be of greater amplitude or there may be other elements pres-
ent which make the long-term risks appear somewhat larger than in Aaa securi-
ties.
Moody's applies numerical modifiers 1, 2 and 3 in the Aa and A rating cate-
gories. The modifier 1 indicates that the security ranks at a higher end of
the rating category, modifier 2 indicates a mid-range rating and the modifier
3 indicates that the issue ranks at the lower end of the rating category.
A -- Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving se-
curity to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment sometime in the future.
Baa -- Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba -- Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of in-
terest and principal payments may be very moderate, and thereby not well safe-
guarded during both good and bad times over the future. Uncertainty of posi-
tion characterizes bonds in this class.
B -- Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa -- Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal
or interest.
A-1
<PAGE>
Ca -- Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other marked short-
comings.
C -- Bonds which are rated C are the lowest rated class of bonds, and issues
so rated can be regarded as having extremely poor prospects of ever attaining
any real investment standing.
STANDARD & POOR'S CORPORATION CORPORATE BOND RATINGS:
AAA -- Bonds rated AAA have the highest rating assigned by Standard & Poor's
to a debt obligation and indicate an extremely strong capacity to pay princi-
pal and interest.
AA -- Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only to a small degree.
A -- Bonds rated A have a strong capacity to pay interest and repay princi-
pal although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than bonds in higher rated
categories.
BBB -- Debt rated BBB is regarded as having an adequate capacity to pay in-
terest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than for debt in higher rated categories.
BB, B, CCC, CC -- Debt rated BB, B, CCC and CC is regarded, on balance, as
predominantly speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation. BB indicates the
lowest degree of speculation and CC the highest degree of speculation. While
such debt will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse con-
ditions.
C -- The rating C is reserved for income bonds on which no interest is being
paid.
D -- Debt rated D is in default, and payment of interest and/or repayment of
principal is in arrears.
- -----------
* Ratings are generally given to securities at the time of issuance. While the
rating agencies may from time to time revise such ratings, they undertake no
obligation to do so.
II. DESCRIPTION OF U.S. GOVERNMENT SECURITIES
The term "U.S. Government Securities" refers to a variety of securities
which are issued or guaranteed by the United States Government, and by various
instrumentalities which have been established or sponsored by the United
States Government.
A-2
<PAGE>
U.S. Treasury securities are backed by the "full faith and credit" of the
United States. Securities issued or guaranteed by Federal agencies and U.S.
Government sponsored instrumentalities may or may not be backed by the full
faith and credit of the United States.
In the case of securities not backed by the full faith and credit of the
United States, the investor must look principally to the agency or instrumen-
tality issuing or guaranteeing the obligation for ultimate repayment and may
not be able to assert a claim against the United States itself in the event
the agency or instrumentality does not meet its commitment. Agencies which are
backed by the full faith and credit of the United States include the Export-
Import Bank, Farmers Home Administration, Federal Financing Bank, and others.
Certain agencies and instrumentalities, such as the Government National Mort-
gage Association are, in effect, backed by the full faith and credit of the
United States through provisions in their charters that they may make "indefi-
nite and unlimited" drawings on the U.S. Treasury, if needed to service its
debt. Debt from certain other agencies and instrumentalities, including the
Federal Home Loan Bank and Federal National Mortgage Association, is not guar-
anteed by the United States, but those institutions are protected by the dis-
cretionary authority of the U.S. Treasury to purchase certain amounts of their
securities to assist the institution in meeting its debt obligations. Finally,
other agencies and instrumentalities, such as the Farm Credit System and the
Federal Home Loan Mortgage Corporation, are federally chartered institutions
under Government supervision, but their debt securities are backed only by the
creditworthiness of those institutions, not the U.S. Government.
Some of the U.S. Government agencies that issue or guarantee securities in-
clude the Export-Import Bank of the United States, Farmers Home Administra-
tion, Federal Housing Administration, Maritime Administration, Small Business
Administration, and the Tennessee Valley Authority.
A-3
<PAGE>
PART B
UAM FUNDS
- --------------------------------------------------------------------------------
HANSON EQUITY PORTFOLIO
INSTITUTIONAL CLASS SHARES
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION -- JANUARY 3, 1997
This Statement is not a Prospectus but should be read in conjunction with the
Prospectus of the UAM Funds Trust ("the UAM Funds" or the "Fund") for the
Hanson Equity Portfolio dated January 3, 1997. To obtain the Prospectus, please
call the UAM Funds Service Center:
1-800-638-7983
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Investment Objectives and Policies......................................... 2
Purchase of Shares......................................................... 3
Redemption of Shares....................................................... 3
Shareholder Services....................................................... 5
Investment Limitations..................................................... 6
Management of the Fund..................................................... 7
Investment Adviser......................................................... 9
Portfolio Transactions..................................................... 10
Performance Calculations................................................... 10
General Information........................................................ 14
Federal Taxes.............................................................. 16
Appendix -- Description of Securities and Ratings.......................... A-1
</TABLE>
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The following policies supplement the investment objective and policies of
the Hanson Equity Portfolio (the "Portfolio") as set forth in the Portfolio's
Prospectus:
LENDING OF SECURITIES
The Portfolio may lend its investment securities to qualified brokers, deal-
ers, domestic and foreign banks or other financial institutions so long as the
terms, the structure and the aggregate amount of such loans are not inconsis-
tent with the Investment Company Act of 1940, as amended, (the "1940 Act") or
the Rules and Regulations or interpretations of the Securities and Exchange
Commission (the "Commission") thereunder, which currently require that (a) the
borrower pledge and maintain with the Portfolio collateral consisting of cash,
an irrevocable letter of credit issued by a domestic U.S. bank or securities
issued or guaranteed by the United States Government having a value at all
times not less than 100% of the value of the securities loaned, (b) the bor-
rower add to such collateral whenever the price of the securities loaned rises
(i.e., the borrower "marks to the market" on a daily basis), (c) the loan be
made subject to termination by the Portfolio at any time, and (d) the Portfo-
lio receives reasonable interest on the loan (which may include the Portfolio
investing any cash collateral in interest bearing short-term investments). As
with other extensions of credit, there are risks of delay in recovery or even
loss of rights in the securities loaned if the borrower of the securities
fails financially. These risks are similar to the ones involved with repur-
chase agreements as discussed in the Prospectus.
FOREIGN SECURITIES
Investors in the Portfolio should recognize that investing in foreign compa-
nies through the purchase of American Depositary Receipts ("ADRs") involves
certain special considerations which are not typically associated with invest-
ing in U.S. companies. Since the securities of foreign companies are fre-
quently denominated in foreign currencies, investments may be affected favor-
ably or unfavorably by changes in currency rates and in exchange control regu-
lations, and may incur costs in connection with conversions between various
currencies.
As foreign companies are not generally subject to uniform accounting, audit-
ing and financial reporting standards and they may have policies that are not
comparable to those of domestic companies, there may be less information
available about certain foreign companies than about domestic companies. Secu-
rities of some foreign companies are generally less liquid and more volatile
than securities of comparable domestic companies. There is generally less gov-
ernment supervision and regulation of stock exchanges, brokers and listed com-
panies than in the U.S. In addition, with respect to certain foreign coun-
tries, there is the possibility of expropriation or confiscatory taxation, po-
litical or social instability, or diplomatic developments which could affect
U.S. investments in those countries.
2
<PAGE>
Certain foreign governments levy withholding taxes on dividend and interest
income. Although in some countries a portion of these taxes are recoverable,
the non-recoverable portion of foreign withholding taxes will reduce the in-
come received from the companies comprising the Portfolio's investments. How-
ever, these foreign withholding taxes are not expected to have a significant
impact.
PURCHASE OF SHARES
Shares of the Portfolio may be purchased without sales commission at the net
asset value per share next determined after an order is received in proper
form by the Fund, and payment is received by the Fund's custodian. The minimum
initial investment required for the Portfolio is $2,500 with certain excep-
tions as may be determined from time to time by the officers of the Fund. The
initial investment minimum for IRA accounts is $500. The initial investment
minimum for spousal IRA accounts is $250. The minimum for any subsequent in-
vestment is $100. An order received in proper form prior to the 4:00 p.m.
close of the New York Stock Exchange (the "Exchange") will be executed at the
price computed on the date of receipt; and an order received not in proper
form or after the 4:00 p.m. close of the Exchange will be executed at the
price computed on the next day the Exchange is open after proper receipt. The
Exchange will be closed on the following days: Presidents' Day, February 17,
1997; Good Friday, March 28, 1997; Memorial Day, May 26, 1997; and Indepen-
dence Day, July 4, 1997, Labor Day, September 1, 1997; Thanksgiving Day, No-
vember 27, 1997; Christmas Day, December 25, 1997; New Year's Day, January 1,
1998.
The Portfolio reserves the right in its sole discretion (1) to suspend the
offering of its shares, (2) to reject purchase orders when in the judgment of
management such rejection is in the best interests of the Fund, and (3) to re-
duce or waive the minimum for initial and subsequent investment for certain
fiduciary accounts such as employee benefit plans or under circumstances where
certain economies can be achieved in sales of the Portfolio's shares.
REDEMPTION OF SHARES
The Portfolio may suspend redemption privileges or postpone the date of pay-
ment (1) during any period that either the Exchange or custodian bank are
closed or trading on the Exchange is restricted as determined by the Commis-
sion, (2) during any period when an emergency exists as defined by the rules
of the Commission as a result of which it is not reasonably practicable for
the Portfolio to dispose of securities owned by it or to fairly determine the
value of its assets, and (3) for such other periods as the Commission may per-
mit. The Fund has made an election with the Commission to pay in cash all re-
demptions requested by any shareholder of record limited in amount during any
90-day period to the lesser of $250,000 or 1% of the net assets of the Fund at
the beginning of such period. Such
3
<PAGE>
commitment is irrevocable without the prior approval of the Commission. Re-
demptions in excess of the above limits may be paid, in whole or in part, in
investment securities or in cash as the Board of Trustees may deem advisable;
however, payment will be made wholly in cash unless the Board of Trustees be-
lieve that economic or market conditions exist which would make such a prac-
tice detrimental to the best interests of the Fund. If redemptions are paid in
investment securities, such securities will be valued as set forth in the Pro-
spectus under "How Share Prices are Determined", and a redeeming shareholder
would normally incur brokerage expenses if those securities were converted to
cash.
No charge is made by the Portfolio for redemptions. Any redemption may be
more or less than the shareholder's initial cost depending on the market value
of the securities held by the Portfolio.
SIGNATURE GUARANTEES
To protect your account, the Fund and Chase Global Funds Services Company
(the "Sub-Administrator") from fraud, signature guarantees are required for
certain redemptions. Signature guarantees are required for (1) redemptions
where the proceeds are to be sent to someone other than the registered
shareowner(s) or the registered address or (2) share transfer requests. The
purpose of signature guarantees is to verify the identity of the party who has
authorized a redemption.
Signatures must be guaranteed by an "eligible guarantor institution" as de-
fined in Rule 17Ad-15 under the Securities Exchange Act of 1934. Eligible
guarantor institutions include banks, brokers, dealers, credit unions, na-
tional securities exchanges, registered securities associations, clearing
agencies and savings associations. A complete definition of eligible guarantor
institution is available from the Sub-Administrator. Broker-dealers guarantee-
ing signatures must be a member of a clearing corporation or maintain net cap-
ital of at least $100,000. Credit unions must be authorized to issue signature
guarantees. Signature guarantees will be accepted from any eligible guarantor
institution which participates in a signature guarantee program.
The signature guarantee must appear either: (1) on the written request for
redemption; (2) on a separate instrument for assignment ("stock power") which
should specify the total number of shares to be redeemed; or (3) on all stock
certificates tendered for redemption and, if shares held by the Fund are also
being redeemed, on the letter or stock power.
4
<PAGE>
SHAREHOLDER SERVICES
The following supplements the information set forth in the Portfolio's Pro-
spectus under the heading "Buying, Selling and Exchanging Shares":
EXCHANGE PRIVILEGE
Institutional Class Shares of the Portfolio may be exchanged for any other
Institutional Class Shares of a Portfolio included in the UAM Funds which is
comprised of the Fund and UAM Funds, Inc. (See the list of Portfolios of the
UAM Funds -- Institutional Class Shares at the end of the Portfolio's Prospec-
tus.) Exchange requests should be made by calling the Fund (1-800-638-7983) or
by writing to UAM Funds Trust, UAM Funds Service Center, c/o Chase Global
Funds Services Company, P.O. Box 2798, Boston, MA 02208-2798. The exchange
privilege is only available with respect to Portfolios that are qualified for
sale in the shareholder's state of residence.
Any such exchange will be based on the respective net asset values of the
shares involved. There is no sales commission or charge of any kind. Before
making an exchange into a Portfolio, a shareholder should read its Prospectus
and consider the investment objectives of the Portfolio to be purchased. You
may obtain a Prospectus for the Portfolio(s) you are interested in by calling
the UAM Funds Service Center at 1-800-638-7983.
Exchange requests may be made either by mail or telephone. Telephone ex-
changes will be accepted only if the certificates for the shares to be ex-
changed are held by the Fund for the account of the shareholder and the regis-
tration of the two accounts will be identical. Requests for exchanges received
prior to 4:00 p.m. (Eastern Time) will be processed as of the close of busi-
ness on the same day. Requests received after this time will be processed on
the next business day. Neither the Fund nor the Sub-Administrator will be re-
sponsible for the authenticity of the exchange instructions received by tele-
phone. Exchanges may also be subject to limitations as to amounts or frequency
and to other restrictions established by the Fund's Board of Trustees to as-
sure that such exchanges do not disadvantage the Fund and its shareholders.
For Federal income tax purposes an exchange between Funds is a taxable
event, and, accordingly, a capital gain or loss may be realized. In a revenue
ruling relating to circumstances similar to the Fund's, an exchange between
series of a Fund was also deemed to be a taxable event. It is likely, there-
fore, that a capital gain or loss would be realized on an exchange between
Portfolios. You may want to consult your tax adviser for further information
in this regard. The exchange privilege may be modified or terminated at any
time.
TRANSFER OF SHARES
Shareholders may transfer shares of the Portfolio to another person by mak-
ing a written request to the Fund. The request should clearly identify the ac-
count and
5
<PAGE>
number of shares to be transferred, and include the signature of all regis-
tered owners and all stock certificates, if any, which are subject to the
transfer. The signature on the letter of request, the stock certificate or any
stock power must be guaranteed in the same manner as described under "Redemp-
tion of Shares." As in the case of redemptions, the written request must be
received in good order before any transfer can be made.
INVESTMENT LIMITATIONS
The following limitations supplement those set forth in the Prospectus.
Whenever an investment limitation sets forth a percentage limitation on in-
vestment or utilization of assets, such limitation shall be determined immedi-
ately after and as a result of the Portfolio's acquisition of such security or
other asset. Accordingly, any later increase or decrease resulting from a
change in values, net assets or other circumstances will not be considered
when determining whether the investment complies with the Portfolio's invest-
ment limitations. Investment limitations (1), (2), (3), (4) and (5) are clas-
sified as fundamental. The Portfolio's fundamental investment limitations can-
not be changed without approval by a "majority of the outstanding shares" (as
defined in the 1940 Act) of the Portfolio. The Portfolio will not:
(1) invest in physical commodities or contracts on physical commodities;
(2) purchase or sell real estate or real estate limited partnerships, al-
though it may purchase and sell securities of companies which deal in
real estate and may purchase and sell securities which are secured by
interests in real estate;
(3) make loans except (i) by purchasing debt securities in accordance
with its investment objectives and (ii) by lending its portfolio se-
curities to banks, brokers, dealers and other financial institutions
so long as such loans are not inconsistent with the 1940 Act, or the
rules and regulations or interpretations of the Commission thereun-
der;
(4) underwrite the securities of other issuers;
(5) issue senior securities, as defined in the 1940 Act, except that this
restriction shall not be deemed to prohibit the Portfolio from (i)
making any permitted borrowings, mortgages or pledges, or (ii) enter-
ing into repurchase transactions;
(6) purchase on margin or sell short;
(7) invest more than an aggregate of 15% of the net assets of the Portfo-
lio, determined at the time of investment, in securities subject to
legal or contractual restrictions on resale or securities for which
there are no readily available markets; and
(8) invest for the purpose of exercising control over management of any
company.
6
<PAGE>
MANAGEMENT OF THE FUND
TRUSTEES AND OFFICERS
The Officers of the Fund manage its day-to-day operations and are responsi-
ble to the Fund's Board of Trustees. The Trustees set broad policies for the
Fund and elect its Officers. The following is a list of the Trustees and Offi-
cers of the Fund and a brief statement of their present positions and princi-
pal occupations during the past five years.
<TABLE>
<S> <C>
JOHN T. BENNETT, JR. Trustee of the Fund; President of Squam In-
College Road--RFD 3 Meredith, NH vestment Management Company, Inc. and Great
03253 Island Investment Company, Inc.; President
Age 67 of Bennett Management Company from 1988 to
1993.
PHILIP D. ENGLISH Trustee of the Fund; President and Chief
16 West Madison Street Executive Officer of Broventure Company,
Baltimore, MD 21201 Inc.; Chairman of the Board of Chektec Cor-
Age 48 poration and Cyber Scientific, Inc.
WILLIAM A. HUMENUK Trustee of the Fund; Partner in the Phila-
4000 Bell Atlantic Tower delphia office of the law firm Dechert
1717 Arch Street Price & Rhoads; Director, Hofler Corp.
Philadelphia, PA 19103
Age 54
NORTON H. REAMER* Trustee, President and Chairman of the
One International Place Fund; President, Chief Executive Officer
Boston, MA 02110 and a Director of United Asset Management
Age 60 Corporation; Director, Partner or Trustee
of each of the Investment Companies of the
Eaton Vance Group of Mutual Funds.
PETER M. WHITMAN, JR.* Trustee of the Fund; President and Chief
One Financial Center Investment Officer of Dewey Square Invest-
Boston, MA 02111 ors Corporation ("DSI") since 1988; Direc-
Age 53 tor and Chief Executive Officer of H. T.
Investors, Inc., formerly a subsidiary of
DSI.
WILLIAM H. PARK* Vice President of the Fund; Executive Vice
One International Place President and Chief Financial Officer of
Boston, MA 02110 United Asset Management Corporation.
Age 49
</TABLE>
- -----------
* This person is deemed to be an "interested person" of the Fund as that term
is defined in the 1940 Act.
7
<PAGE>
<TABLE>
<S> <C>
GARY L. FRENCH* Treasurer of the Fund; President of UAM
211 Congress Street Fund Services, Inc. and UAM Fund Distribu-
Boston, MA 02110 tors, Inc.; formerly Vice President of Op-
Age 45 erations, Development and Control of Fidel-
ity Investment in 1995; Treasurer of the
Fidelity Group of Mutual Funds from 1991 to
February 1995.
MICHAEL E. DEFAO* Secretary of the Fund; Vice President and
211 Congress Street General Counsel of UAM Fund Services, Inc.
Boston, MA 02110 and UAM Fund Distributors, Inc.; Associate
Age 28 Attorney of Ropes & Gray (a law firm) from
1993 to February 1995.
ROBERT R. FLAHERTY* Assistant Treasurer of the Fund; Vice Pres-
211 Congress Street ident of UAM Fund Services, Inc.; formerly
Boston, MA 02110 Manager of Fund Administration and Compli-
Age 32 ance of the Chase Global Fund Services Com-
pany from 1995 to 1996, Deloitte & Touche
LLP from 1985 to 1995, Senior Manager.
KARL O. HARTMANN* Assistant Secretary of the Fund; Senior
73 Tremont Street Vice President and General Counsel of Chase
Boston, MA 02108 Global Funds Services Company; Senior Vice
Age 41 President, Secretary and General Counsel of
Leland, O'Brien, Rubinstein Associates,
Inc., from November 1990 to November 1991.
</TABLE>
- -----------
* These people are deemed to be "interested persons" of the Fund as that term
is defined in the 1940 Act.
REMUNERATION OF TRUSTEES AND OFFICERS
The Fund pays each Trustee, who is not also an officer or affiliated person,
a $150 quarterly retainer fee per active Portfolio which currently amounts to
$1,050 per quarter. In addition, each unaffiliated Trustee receives a $2,000
meeting fee which is aggregated for all the Trustees allocated proportionately
among the Portfolio of the Fund and UAM Funds, Inc. and reimbursement for
travel and other expenses incurred while attending Board meetings. Trustees
who are also officers or affiliated persons receive no remuneration for their
service as Trustees. The Fund's officers and employees are paid by either the
Adviser, United Asset Management Corporation ("UAM"), or the Administrator or
the Sub-Administator and receive no compensation from the Fund. As of December
6, the Trustees and officers of the Fund owned less than 1% of the Fund's out-
standing shares.
The following table shows aggregate compensation paid to each of the Fund's
Trustees by the Fund and total compensation paid by the Fund, UAM Funds, Inc.
and AEW Commercial Mortgage Securities Fund, Inc. (collectively the "Fund Com-
plex") in the fiscal year ended April 30, 1996.
8
<PAGE>
COMPENSATION TABLE
<TABLE>
<CAPTION>
(1) (2) (3) (4) (5)
PENSION OR
RETIREMENT TOTAL COMPENSATION
BENEFITS ESTIMATED FROM REGISTRANT
AGGREGATE ACCRUED ANNUAL AND FUND
COMPENSATION AS PART BENEFITS COMPLEX PAID
FROM OF FUND UPON TO
NAME OF PERSON, POSITION REGISTRANT EXPENSES RETIREMENT TRUSTEES
- ------------------------ ------------ ---------- ---------- ------------------
<S> <C> <C> <C> <C>
John T. Bennett, Jr., $3,396 0 0 $29,600
Trustee................
J. Edward Day, Former $3,396 0 0 $29,600
Trustee................
Philip D. English, $3,396 0 0 $29,600
Trustee................
William A. Humenuk, $3,396 0 0 $29,600
Trustee................
</TABLE>
INVESTMENT ADVISER
CONTROL OF ADVISER
Hanson Investment Management Company is a wholly-owned subsidiary of UAM, a
holding company incorporated in Delaware in December 1980 for the purpose of
acquiring and owning firms engaged primarily in institutional investment man-
agement. Since its first acquisition in August 1983, UAM has acquired or orga-
nized approximately 45 such wholly-owned affiliated firms (the "UAM Affiliated
Firms"). UAM believes that permitting UAM Affiliated Firms to retain control
over their investment advisory decisions is necessary to allow them to con-
tinue to provide investment management services that are intended to meet the
particular needs of their respective clients.
Accordingly, after acquisition by UAM, UAM Affiliated Firms continue to op-
erate under their own firm name, with their own leadership and individual in-
vestment philosophy and approach. Each UAM Affiliated Firm manages its own
business independently on a day-to-day basis. Investment strategies employed
and securities selected by UAM Affiliated Firms are separately chosen by each
of them. Several UAM Affiliated Firms also act as investment advisers to sepa-
rate series or Portfolios of UAM Funds, Inc., a registered investment company.
ADVISORY FEES
As compensation for services rendered by the Adviser under the Investment
Advisory Agreement, the Portfolio pays the Adviser an annual fee in monthly
installments, calculated by applying the following annual percentage rates to
the Portfolio's average daily net assets for the month:
<TABLE>
<S> <C>
Hanson Equity Portfolio............................................ 0.70%
</TABLE>
9
<PAGE>
PORTFOLIO TRANSACTIONS
The Investment Advisory Agreement authorizes the Adviser to select the bro-
kers or dealers that will execute the purchases and sales of investment securi-
ties for the Portfolio and directs the Adviser to use its best efforts to ob-
tain the best execution with respect to all transactions for the Portfolio. The
Adviser may, however, consistent with the interests of the Portfolio, select
brokers on the basis of the research, statistical and pricing services they
provide to the Portfolio. Information and research received from such brokers
will be in addition to, and not in lieu of, the services required to be per-
formed by the Adviser under the Investment Advisory Agreement. A commission
paid to such brokers may be higher than that which another qualified broker
would have charged for effecting the same transaction, provided that such com-
missions are paid in compliance with the Securities Exchange Act of 1934, as
amended, and that the Adviser determines in good faith that such commission is
reasonable in terms either of the transaction or the overall responsibility of
the Adviser to the Portfolio and the Adviser's other clients.
It is not the Fund's practice to allocate brokerage or effect principal
transactions with dealers on the basis of sales of Fund shares which may be
made through broker-dealer firms. However, the Adviser may place portfolio or-
ders with qualified broker-dealers who refer clients to the Adviser. During the
fiscal years ended April 30, 1995 and April 30, 1996, the entire Fund paid bro-
kerage commissions of approximately $15,000 and $39,000, respectively.
Some securities considered for investment by the Portfolio may also be appro-
priate for other clients served by the Adviser. If purchases or sales of secu-
rities consistent with the investment policies of the Portfolio and one or more
of these other clients served by the Adviser is considered at or about the same
time, transactions in such securities will be allocated among the Portfolio and
clients in a manner deemed fair and reasonable by the Adviser. Although there
is no specified formula for allocating such transactions, the various alloca-
tion methods used by the Adviser, and the results of such allocations, are sub-
ject to periodic review by the Fund's Board of Trustees.
PERFORMANCE CALCULATIONS
PERFORMANCE
The Portfolio may from time to time quote various performance figures to il-
lustrate past performance. Performance quotations by investment companies are
subject to rules adopted by the Commission, which require the use of standard-
ized performance quotations or, alternatively, that every non-standardized per-
formance quotation furnished by the Fund be accompanied by certain standardized
performance information computed as required by the Commission. Average annual
compounded total return quotations used by the Fund are based on the standard-
ized methods of computing performance mandated by the Commission. An explana-
tion of the method used to compute or express performance follows.
10
<PAGE>
TOTAL RETURN
The average annual total return of the Portfolio is determined by finding
the average annual compounded rates of return over 1, 5 and 10 year periods
that would equate an initial hypothetical $1,000 investment to its ending re-
deemable value. The calculation assumes that all dividends and distributions
are reinvested when paid. The quotation assumes the amount was completely re-
deemed at the end of each 1, 5 and 10 year period and the deduction of all ap-
plicable Fund expenses on an annual basis.
These figures are calculated according to the following formula:
P(1 + T)/n/ = ERV
where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment made at
the beginning of the 1, 5 or 10 year periods at the end of the 1,
5 or 10 year periods (or fractional portion thereof).
COMPARISONS
To help investors better evaluate how an investment in the Portfolio might
satisfy their investment objective, advertisements regarding the Fund may dis-
cuss various measures of Fund performance as reported by various financial
publications. Advertisements may also compare performance (as calculated
above) to performance as reported by other investments, indices and averages.
The following publications, indices and averages may be used:
(a) Dow Jones Composite Average or its component averages -- an unmanaged
index composed of 30 blue-chip industrial corporation stocks (Dow
Jones Industrial Average), 15 utilities company stocks and 20 trans-
portation stocks. Comparisons of performance assume reinvestment of
dividends.
(b) Standard & Poor's 500 Stock Index or its component indices -- an un-
managed index composed of 400 industrial stocks, 40 financial stocks,
40 utilities stocks and 20 transportation stocks. Comparisons of per-
formance assume reinvestment of dividend.
(c) The New York Stock Exchange composite or component indices -- unman-
aged indices of all industrial, utilities, transportation and finance
stocks listed on the New York Stock Exchange.
(d) Wilshire 5000 Equity Index or its component indices -- represents the
return on the market value of all common equity securities for which
daily pricing is available. Comparisons of performance assume rein-
vestment of dividends.
11
<PAGE>
(e) Lipper -- Mutual Fund Performance Analysis and Lipper -- Fixed Income
Fund Performance Analysis -- measure total return and average current
yield for the mutual fund industry. Rank individual mutual fund per-
formance over specified time periods, assuming reinvestment of all
distributions, exclusive of any applicable sales charges.
(f) Morgan Stanley Capital International EAFE Index and World Index -- re-
spectively, arithmetic, market value-weighted averages of the perfor-
mance of over 900 securities listed on the stock exchanges of coun-
tries in Europe, Australia and the Far East, and over 1,400 securities
listed on the stock exchanges of these continents, including North
America.
(g) Goldman Sachs 100 Convertible Bond Index -- currently includes 67
bonds and 33 preferred. The original list of names was generated by
screening for convertible issues of 100 million or greater in market
capitalization. The index is priced monthly.
(h) Salomon Brothers GNMA Index -- includes pools of mortgages originated
by private lenders and guaranteed by the mortgage pools of the Govern-
ment National Mortgage Association.
(i) Salomon Brothers High Grade Corporate Bond Index -- consists of pub-
licly issued, non-convertible corporate bonds rated AA or AAA. It is a
value-weighted, total return index, including approximately 800 issues
with maturities of 12 years or greater.
(j) Salomon Brothers Broad Investment Grade Bond -- is a market-weighted
index that contains approximately 4,700 individually priced investment
grade corporate bonds rated BBB or better, U.S. Treasury/agency issues
and mortgage pass through securities.
(k) Lehman Brothers Long-Term Treasury Bond -- is composed of all bonds
covered by the Lehman Brothers Treasury Bond Index with maturities of
10 years or greater.
(l) NASDAQ Industrial Index -- is composed of more than 3,000 industrial
issues. It is a value-weighted index calculated on price change only
and does not include income.
(m) Value Line -- composed of over 1,600 stocks in the Value Line Invest-
ment Survey.
(n) Russell 2000 -- composed of the 2,000 smallest stocks in the Russell
3000, a market value-weighted index of the 3,000 largest U.S. public-
ly-traded companies.
12
<PAGE>
(o) Composite Indices -- 60% Standard & Poor's 500 Stock Index, 30% Lehman
Brothers Long-Term Treasury Bond and 10% U.S. Treasury Bills; 70%
Standard & Poor's 500 Stock Index and 30% NASDAQ Industrial Index; 35%
Standard & Poor's 500 Stock Index and 65% Salomon Brothers High Grade
Bond Index; all stocks on the NASDAQ system exclusive of those traded
on an exchange, and 65% Standard & Poor's 500 Stock Index and 35% Sal-
omon Brothers High Grade Bond Index.
(p) CDA Mutual Fund Report published by CDA Investment Technologies,
Inc. -- analyzes price, current yield, risk, total return and average
rate of return (average compounded growth rate) over specified time
periods for the mutual fund industry.
(q) Mutual Fund Source Book published by Morningstar, Inc. -- analyzes
price, yield, risk and total return for equity funds.
(r) Financial publications: Business Week, Changing Times, Financial
World, Forbes, Fortune, Money, Barron's, Consumer's Digest, Financial
Times, Global Investor, Wall Street Journal and Weisenberger Invest-
ment Companies Service -- publications that rate fund performance over
specified time periods.
(s) Consumer Price Index (or Cost of Living Index), published by the U.S.
Bureau of Labor Statistics -- a statistical measure of change over
time in the price of goods and services in major expenditure groups.
(t) Stocks, Bonds, Bills and Inflation, published by Ibbotson Associ-
ates -- historical measure of yield, price and total return for common
and small company stock, long-term government bonds, U.S. Treasury
bills and inflation.
(u) Savings and Loan Historical Interest Rates -- as published by the U.S.
Savings & Loan League Fact Book.
(v) Lehman Brothers Government/Corporate Index -- is a combination of the
Government an Corporate Bond Indices. The Government Index includes
public obligations of the U.S. Treasury, issues of Government agen-
cies, and corporate debt backed by the U.S. Government. The Corporate
Bond Index includes fixed-rate nonconvertible corporate debt. Also in-
cluded are Yankee Bonds and nonconvertible debt issued by or guaran-
teed by foreign or international governments and agencies. All issues
are investment grade (BBB) or higher, with maturities of at least one
year and an outstanding par value of at least $100 million for U.S.
Government issues and $25 million for others. Any security downgraded
during the month is held in the index until month-end and then re-
moved. All returns are market value weighted inclusive of accrued in-
come.
13
<PAGE>
(w) Lehman Brothers Intermediate Government/Corporate Index is an unman-
aged index composed of a combination of the Government and Corporate
Bond Indices. All issues are investment grade (BBB) or higher, with
maturities of one to ten years and an outstanding par value of at
least $l00 million for U.S. Government issues and $25 million for oth-
ers. 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 non-
convertible corporate debt. Also included are Yankee Bonds and noncon-
vertible debt issued by or guaranteed by foreign or international gov-
ernments and agencies. Any security downgraded during the month is
held in the index until month-end and then removed. All returns are
market value weighted inclusive of accrued income.
(x) Historical data supplied by the research departments of First Boston
Corporation; the J.P. Morgan companies; Salomon Brothers; Merrill
Lynch, Pierce, Fenner & Smith; Lehman Brothers, Inc.; and Bloomberg
L.P.
In assessing such comparisons of performance, an investor should keep in
mind that the composition of the investments in the reported indices and aver-
ages is not identical to the composition of investments in the Portfolio, that
the averages are generally unmanaged, and that the items included in the cal-
culations of such averages may not be identical to the formula used by the
Portfolio to calculate its performance. In addition, there can be no assurance
that the Portfolio will continue this performance as compared to such other
averages.
GENERAL INFORMATION
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Fund was organized under the name The Regis Fund II as a Delaware busi-
ness trust on May 18, 1994. On October 31, 1995, the name of the Fund was
changed to "UAM Funds Trust". The Fund's principal executive office is located
at One International Place, 44th Floor, Boston, MA 02110; however, all in-
vestor correspondence should be directed to the Fund at UAM Funds Service Cen-
ter, c/o Chase Global Funds Services Company, P.O. Box 2798, Boston, MA 02208-
2798. The Fund's Agreement and Declaration of Trust permits the Fund to issue
an unlimited number of shares of beneficial interest, without par value. The
Trustees have the power to designate one or more series ("Portfolios") or
classes of shares of beneficial interest without further action by sharehold-
ers.
On each matter submitted to a vote of the shareholders, each holder of a
share shall be entitled to one vote for each whole share and a fractional vote
for each fractional share standing in his/her name on the books of the Fund.
14
<PAGE>
In the event of liquidation of the Fund, the holders of the shares of each
Portfolio or any class thereof that has been established and designated shall
be entitled to receive, when and as declared by the Trustees, the excess of
the assets belonging to that Portfolio, or in the case of a class, belonging
to that Portfolio and allocable to that class, over the liabilities belonging
to that Portfolio or class. The assets so distributable to the holders of
shares of any particular Portfolio or class thereof shall be distributed to
the holders in proportion to the number of shares of that Portfolio or class
thereof held by them and recorded on the books of the Fund. The liquidation of
any Portfolio or class thereof may be authorized at any time by vote of a ma-
jority of the Trustees then in office.
Shareholders of both Classes of the Fund's Portfolios have no pre-emptive or
other rights to subscribe to any additional shares or other securities issued
by the Fund or any Portfolio, except as the Trustees in their sole discretion
shall have determined by vote. Both Institutional Class and Service Class
Shares represent an interest in the same assets of a Portfolio and are identi-
cal in all respects except that the Service Class Shares bear certain expenses
related to shareholder servicing and the distribution of such shares, and have
exclusive voting rights with respect to matters relating to such distribution
expenditures.
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
The Fund's policy is to distribute substantially all of the Portfolio's net
investment income, if any, together with any net realized capital gains annu-
ally in the amount and at the times that will avoid both income (including
capital gains) taxes incurred and the imposition of the Federal excise tax on
undistributed income and capital gains. The amounts of any income dividends or
capital gains distributions cannot be predicted. See discussion under "Divi-
dends, Capital Gains Distributions and Taxes" in the Prospectus.
Any dividend or distribution paid shortly after the purchase of shares of
the Portfolio by an investor may have the effect of reducing the per share net
asset value of the Portfolio by the per share amount of the dividend or dis-
tribution. Furthermore, such dividends or distributions, although in effect a
return of capital, are subject to income taxes as set forth in the Prospectus.
As set forth in the Prospectus, unless the shareholder elects otherwise in
writing, all dividend and capital gains distributions are automatically re-
ceived in additional shares of the respective Portfolio of the Fund at net as-
set value (as of the business day following the record date). This will remain
in effect until the Fund is notified by the shareholder in writing at least
three days prior to the record date that either the Income Option (income div-
idends in cash and capital gains distributions in additional shares at net as-
set value) or the Cash Option (both income dividends and capital gains distri-
butions in cash) has been elected. An account statement is sent to sharehold-
ers whenever an income dividend or capital gains distribution is paid.
15
<PAGE>
Each Portfolio of the Fund will be treated as a separate entity (and hence
as a separate "regulated investment company") for Federal tax purposes. Any
net capital gains recognized by the Portfolio will be distributed to its in-
vestors without need to offset (for Federal income tax purposes) such gains
against any net capital losses of another Portfolio.
FEDERAL TAXES
In order for the Portfolio to continue to qualify for Federal income tax
treatment as a regulated investment company under the Internal Revenue Code of
1986, as amended (the "Code"), at least 90% of the Portfolio's gross income
for a taxable year must be derived from certain qualifying income, i.e., divi-
dends, interest, income derived from loans of securities and gains from the
sale or other disposition of stock or securities, or other related income, de-
rived with respect to its business investing in stock or securities. Any net
gain realized from the closing out of futures contracts will, therefore, gen-
erally be qualifying income for purposes of the 90% requirement. Qualification
as a regulated investment company also requires that less than 30% of the
Portfolio's gross income be derived from the sale or other disposition of
stock or securities held for 3 months or less.
The Portfolio will distribute to shareholders annually any net capital gains
which have been recognized for Federal income tax purposes (including
unrealized gains at the end of the Portfolio's taxable year) on futures trans-
actions. Such distribution will be combined with distributions of capital
gains realized on the Portfolio's other investments, and shareholders will be
advised on the character of the payment.
16
<PAGE>
APPENDIX -- DESCRIPTION OF SECURITIES AND RATINGS
I. DESCRIPTION OF BOND RATINGS
Excerpts from Moody's Investors Service, Inc. ("Moody's") description of its
highest bond ratings: Aaa -- judged to be the best quality; carry the smallest
degree of investment risk: Aa -- judged to be of high quality by all stan-
dards; A -- possess many favorable investment attributes and are to be consid-
ered as higher medium grade obligations; Baa -- considered as lower medium
grade obligations, i.e., they are neither highly protected nor poorly secured.
Excerpts from Standard & Poor's Corporation ("S&P") description of its high-
est bond ratings: AAA -- highest grade obligations; possess the ultimate de-
gree of protection as to principal and interest; AA -- also qualify as high
grade obligations, and in the majority of instances differs from AAA issues
only in small degree; A -- regarded as upper medium grade; have considerable
investment strength but are not entirely free from adverse effects of changes
in economic and trade conditions. Interest and principal are regarded as safe;
BBB -- regarded as borderline between definitely sound obligations and those
where the speculative element begins to predominate; this group is the lowest
which qualifies for commercial bank investment.
II. DESCRIPTION OF U.S. GOVERNMENT SECURITIES
The term "U.S. Government Securities" refers to a variety of securities
which are issued or guaranteed by the United States Government, and by various
instrumentalities which have been established or sponsored by the United
States Government.
U.S. Treasury securities are backed by the "full faith and credit" of the
United States. Securities issued or guaranteed by Federal agencies and U.S.
Government sponsored instrumentalities may or may not be backed by the full
faith and credit of the United States.
In the case of securities not backed by the full faith and credit of the
United States, the investor must look principally to the agency or instrumen-
tality issuing or guaranteeing the obligation for ultimate repayment, and may
not be able to assess a claim against the United States itself in the event
the agency or instrumentality does not meet its commitment. Agencies which are
backed by the full faith and credit of the United States include the Export-
Import Bank, Farmers Home Administration, Federal Financing Bank, and others.
Certain agencies and instrumentalities, such as the GNMA are, in effect,
backed by the full faith and credit of the United States through provisions in
their charters that they may make "indefinite and unlimited" drawings on the
U.S. Treasury, if needed to service its debt. Debt from certain other agencies
and instrumentalities, including the Federal Home Loan Bank and FNMA, is not
guaranteed by the United States, but those institutions are protected by the
discretionary authority of the U.S. Treasury to purchase
A-1
<PAGE>
certain amounts of their securities to assist the institution in meeting its
debt obligations. Finally, other agencies and instrumentalities, such as the
Farm Credit System and the FHLMC, are federally chartered institutions under
Government supervision, but their debt securities are backed only by the
credit worthiness of those institutions, not the U.S. Government.
Some of the U.S. Government agencies that issue or guarantee securities in-
clude the Export-Import Bank of the United States, Farmers Home Administra-
tion, Federal Housing Administration, Maritime Administration, Small Business
Administration, and the Tennessee Valley Authority.
III. DESCRIPTION OF COMMERCIAL PAPER
The Portfolios may invest in commercial paper (including variable amount
master demand notes) rated A-1 or better by S&P or Prime-1 by Moody's or by
S&P. Commercial paper refers to short-term, unsecured promissory notes issued
by corporations to finance short-term credit needs. Commercial paper is usu-
ally sold on a discount basis and has a maturity at the time of issuance not
exceeding nine months. Variable amount master demand notes are demand obliga-
tions that permit the investment of fluctuating amounts at varying market
rates of interest pursuant to arrangement between the issuer and a commercial
bank acting as agent for the payees of such notes whereby both parties have
the right to vary the amount of the outstanding indebtedness on the notes. As
variable amount master demand notes are direct lending arrangements between a
lender and a borrower, it is not generally contemplated that such instruments
will be traded, and there is no secondary market for these notes, although
they are redeemable (and thus immediately repayable by the borrower) at face
value, plus accrued interest, at any time. In connection with the Portfolio's
investment in variable amount master demand notes, the Adviser's investment
management staff will monitor, on an ongoing basis, the earning power, cash
flow and other liquidity ratios of the issuer and the borrower's ability to
pay principal and interest on demand.
Commercial paper rated A-1 by S&P has the following characteristics: (1) li-
quidity ratios are adequate to meet cash requirements; (2) long-term senior
debt is rated "A" or better; (3) the issuer has access to at least two addi-
tional channels of borrowing; (4) basic earnings and cash flow have an upward
trend with allowance made for unusual circumstances; (5) typically, the is-
suer's industry is well established, and the issuer has a strong position
within the industry; and (6) the reliability and quality of management are un-
questioned. Relative strength or weakness of the above factors determine
whether the issuer's commercial paper is A-1, A-2 or A-3. The rating Prime-1
is the highest commercial paper rating assigned by Moody's. Among the factors
considered by Moody's in assigning ratings are the following: (1) evaluation
of the management of the issuer; (2) economic evaluation of the issuer's in-
dustry or industries and the appraisal of speculative-type risks which may be
inherent in certain areas; (3) evaluation of the issuer's products in
A-2
<PAGE>
relation to completion and customer acceptance; (4) liquidity; (5) amount and
quality of long term debt; (6) trend of earnings over a period of ten years;
(7) financial strength of a parent company and the relationships which exist
with the issuer; and (8) recognition by the management of issuer of obliga-
tions which may be present or may arise as a result of public interest ques-
tions and preparations to meet such obligations.
IV. DESCRIPTION OF BANK OBLIGATIONS
Time deposits are non-negotiable deposits maintained in a banking institu-
tion for a specified period of time at a stated interest rate. Certificates of
deposit are negotiable short-term obligations of commercial banks. Variable
rate certificates of deposit are certificates of deposit on which the interest
rate is periodically adjusted prior to their stated maturity based upon a
specified market rate. As a result of these adjustments, the interest rate on
these obligations may increase or decrease periodically. Frequently, dealers
selling variable rate certificates of deposit to the Portfolio will agree to
repurchase such instruments, at the Portfolio's option, at par on or near the
coupon dates. The dealers' obligations to repurchase these instruments are
subject to conditions imposed by various dealers. Such conditions typically
are the continued credit standing of the issuer and the existence of reasona-
bly orderly market conditions. The Portfolio is also able to sell variable
rate certificates of deposit in the secondary market. Variable rate certifi-
cates of deposit normally carry a higher interest rate than comparable fixed
rate certificates of deposit. A banker's acceptance is a time draft drawn on a
commercial bank by a borrower usually in connection with an international com-
mercial transaction to finance the import, export, transfer or storage of
goods. The borrower is liable for payment as well as the bank which uncondi-
tionally guarantees to pay the draft at its face amount on the maturity date.
Most acceptances have maturities of six months or less and are traded in the
secondary markets prior to maturity.
V. DESCRIPTION OF FOREIGN INVESTMENTS
Investors should recognize that investing in foreign companies involves cer-
tain special considerations which are not typically associated with investing
in U.S. companies. Since the securities of foreign companies are frequently
denominated in foreign currencies, a Portfolio may be affected favorably or
unfavorably by changes in currency rates and in exchange control regulations,
and may incur costs in connection with conversions between various currencies.
As foreign companies are not generally subject to uniform accounting, audit-
ing and financial reporting standards and they may have policies that are not
comparable to those of domestic companies, there may be less information
available about certain foreign companies than about domestic companies. Secu-
rities of some foreign companies are generally less liquid and more volatile
than securities of comparable domestic companies. There is generally less gov-
ernment supervision and regulation of stock exchanges, brokers and listed com-
panies than in the U.S.
A-3
<PAGE>
In addition, with respect to certain foreign countries, there is the possibil-
ity of expropriation or confiscatory taxation, political or social instabili-
ty, or diplomatic developments which could affect U.S. investments in those
countries.
Although the Fund will endeavor to achieve the most favorable execution
costs in its portfolio transactions, fixed commissions on many foreign stock
exchanges are generally higher than negotiated commissions on U.S. exchanges.
Certain foreign governments levy withholding taxes on dividend and interest
income. Although in some countries a portion of these taxes are recoverable,
the non-recoverable portion of foreign withholding taxes will reduce the in-
come received from the companies comprising the Fund's Portfolios. However,
these foreign withholding taxes are not expected to have a significant impact.
A-4
<PAGE>
PART B
UAM FUNDS
- -------------------------------------------------------------------------------
IRC ENHANCED INDEX PORTFOLIO
INSTITUTIONAL CLASS SHARES
- -------------------------------------------------------------------------------
STATEMENT ADDITIONAL INFORMATION -- JANUARY 3, 1997
This Statement is not a Prospectus but should be read in conjunction with
the Prospectus of the UAM Funds Trust (the "UAM Funds" or the "Fund") for the
IRC Enhanced Index Portfolio (the "Portfolio") Institutional Class Shares
dated January 3, 1997. To obtain the Prospectus, please call the UAM Funds
Service Center:
1-800-638-7983
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Investment Objective and Policies.......................................... 2
Purchase of Shares......................................................... 2
Redemption of Shares....................................................... 3
Shareholder Services....................................................... 4
Investment Limitations..................................................... 5
Management of the Fund..................................................... 6
Investment Adviser......................................................... 9
Portfolio Transactions..................................................... 10
Administrative Services.................................................... 10
Performance Calculations................................................... 11
General Information........................................................ 15
Federal Taxes.............................................................. 17
Financial Statements....................................................... 17
</TABLE>
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The following policies supplement the investment objective and policies of
the IRC Enhanced Index Portfolio (the "Portfolio") as set forth in the Portfo-
lio's Prospectus:
LENDING OF SECURITIES
The Portfolio may lend its investment securities to qualified brokers, deal-
ers, domestic and foreign banks or other financial institutions, so long as
the terms, the structure and the aggregate amount of such loans are not incon-
sistent with the Investment Company Act of 1940, as amended, (the "1940 Act")
or the Rules and Regulations or interpretations of the Securities and Exchange
Commission (the "SEC") thereunder, which currently require that (a) the bor-
rower pledge and maintain with the Portfolio collateral consisting of cash, an
irrevocable letter of credit issued by a domestic U.S. bank or securities is-
sued or guaranteed by the United States Government having a value at all times
not less than 100% of the value of the securities loaned, (b) the borrower add
to such collateral whenever the price of the securities loaned rises (i.e.,
the borrower "marks to the market" on a daily basis), (c) the loan be made
subject to termination by the Portfolio at any time, and (d) the Portfolio re-
ceives reasonable interest on the loan (which may include the Portfolio in-
vesting any cash collateral in interest bearing short-term investments). As
with other extensions of credit, there are risks of delay in recovery or even
loss of rights in the securities loaned if the borrower of the securities
fails financially. These risks are similar to the ones involved with repur-
chase agreements as discussed in the Prospectus.
PURCHASE OF SHARES
Shares of the Portfolio may be purchased without sales commission at the net
asset value per share next determined after an order is received in proper
form by the Fund, and payment is received by the Fund's custodian. The minimum
initial investment required for the Portfolio is $2,500 with certain excep-
tions to the minimums may be determined from time to time by the officers of
the Fund. The minimum for any subsequent investment is $100. An order received
in proper form prior to the 4:00 p.m. close of the New York Stock Exchange
(the "Exchange") will be executed at the price computed on the date of re-
ceipt; and an order received not in proper form or after the 4:00 p.m. close
of the Exchange will be executed at the price computed on the next day the Ex-
change is open after proper receipt. The Exchange will be closed on the fol-
lowing days: Presidents' Day, February 17, 1997; Good Friday, March 28, 1997;
Memorial Day, May 26, 1997; Independence Day, July 4, 1997; Labor Day, Septem-
ber 1, 1997; Thanksgiving Day, November 27, 1997; Christmas Day, December 25,
1997; and New Year's Day, January 1, 1998.
2
<PAGE>
The Portfolio reserves the right in its sole discretion (1) to suspend the
offering of its shares, (2) to reject purchase orders when in the judgment of
management such rejection is in the best interests of the Fund, and (3) to re-
duce or waive the minimum for initial and subsequent investment for certain
fiduciary accounts such as employee benefit plans or under circumstances where
certain economies can be achieved in sales of the Portfolio's shares.
REDEMPTION OF SHARES
The Portfolio may suspend redemption privileges or postpone the date of pay-
ment (1) during any period that either the Exchange or custodian bank are
closed or trading on the Exchange is restricted as determined by the Commis-
sion, (2) during any period when an emergency exists as defined by the rules
of the Commission as a result of which it is not reasonably practicable for
the Portfolio to dispose of securities owned by it or to fairly determine the
value of its assets, and (3) for such other periods as the Commission may per-
mit. The Fund has made an election with the Commission to pay in cash all re-
demptions requested by any shareholder of record limited in amount during any
90-day period to the lesser of $250,000 or 1% of the net assets of the Fund at
the beginning of such period. Such commitment is irrevocable without the prior
approval of the Commission. Redemptions in excess of the above limits may be
paid, in whole or in part, in investment securities or in cash as the Board of
Trustees may deem advisable; however, payment will be made wholly in cash un-
less the Trustees believe that economic or market conditions exist which would
make such a practice detrimental to the best interests of the Fund. If redemp-
tions are paid in investment securities, such securities will be valued as set
forth in the Prospectus under "Valuation of Shares", and a redeeming share-
holder would normally incur brokerage expenses if those securities were con-
verted to cash.
No charge is made by the Portfolio for redemptions. Any redemption may be
more or less than the shareholder's initial cost depending on the market value
of the securities held by the Portfolio.
SIGNATURE GUARANTEES
To protect your account, the Fund and Chase Global Funds Services Company
(the "Sub-Administrator") from fraud, signature guarantees are required for
certain redemptions. Signature guarantees are required for (1) redemptions
where the proceeds are to be sent to someone other than the registered
shareowner(s) or the registered address or (2) share transfer requests. The
purpose of signature guarantees is to verify the identity of the party who has
authorized a redemption.
Signatures must be guaranteed by an "eligible guarantor institution" as de-
fined in Rule 17Ad-15 under the Securities Exchange Act of 1934. Eligible
guarantor institutions include banks, brokers, dealers, credit unions, na-
tional securities exchanges, registered securities associations, clearing
agencies and savings associ-
3
<PAGE>
ations. A complete definition of eligible guarantor institution is available
from the Sub-Administrator. Broker-dealers guaranteeing signatures must be a
member of a clearing corporation or maintain net capital of at least $100,000.
Credit unions must be authorized to issue signature guarantees. Signature
guarantees will be accepted from any eligible guarantor institution which par-
ticipates in a signature guarantee program.
The signature guarantee must appear either: (1) on the written request for
redemption; (2) on a separate instrument for assignment ("stock power") which
should specify the total number of shares to be redeemed; or (3) on all stock
certificates tendered for redemption and, if shares held by the Fund are also
being redeemed, on the letter or stock power.
SHAREHOLDER SERVICES
The following supplements the information set forth in the Portfolio's Pro-
spectus under the heading "Buying, Selling and Exchanging Shares":
EXCHANGE PRIVILEGE
Institutional Class Shares of the Portfolio may be exchanged for any other
Institutional Class Shares of a Portfolio included in the UAM Funds which is
comprised of the Fund and UAM Funds, Inc. (See the list of Portfolios of the
UAM Funds -- Institutional Class Shares at the end of the Portfolio's Prospec-
tus.) Exchange requests should be made by calling the Fund (1-800-638-7983) or
by writing to UAM Funds Trust, UAM Funds Service Center, c/o Chase Global
Funds Services Company, P.O. Box 2798, Boston, MA 02208-2798. The exchange
privilege is only available with respect to Portfolios that are qualified for
sale in the shareholder's state of residence.
Any such exchange will be based on the respective net asset values of the
shares involved. There is no sales commission or charge of any kind. Before
making an exchange into a Portfolio, a shareholder should read its Prospectus
and consider the investment objectives of the Portfolio to be purchased. You
may obtain a Prospectus for the Portfolio(s) you are interested in by calling
the UAM Funds Service Center at 1-800-638-7983.
Exchange requests may be made either by mail or telephone. Telephone ex-
changes will be accepted only if the certificates for the shares to be ex-
changed are held by the Fund for the account of the shareholder and the regis-
tration of the two accounts will be identical. Requests for exchanges received
prior to 4:00 p.m. (Eastern Time) will be processed as of the close of busi-
ness on the same day. Requests received after this time will be processed on
the next business day. Neither the Fund nor the Sub-Administrator will be re-
sponsible for the authenticity of the exchange instructions received by tele-
phone. Exchanges may also be subject to limitations as to amounts or frequency
and to other restrictions established by the
4
<PAGE>
Fund's Board of Trustees to assure that such exchanges do not disadvantage the
Fund and its shareholders.
For Federal income tax purposes an exchange between Funds is a taxable
event, and, accordingly, a capital gain or loss may be realized. In a revenue
ruling relating to circumstances similar to the Fund's, an exchange between
series of a Fund was also deemed to be a taxable event. It is likely, there-
fore, that a capital gain or loss would be realized on an exchange between
Portfolios. You may want to consult your tax adviser for further information
in this regard. The exchange privilege may be modified or terminated at any
time.
TRANSFER OF SHARES
Shareholders may transfer shares of the Portfolio to another person by mak-
ing a written request to the Fund. The request should clearly identify the ac-
count and number of shares to be transferred, and include the signature of all
registered owners and all stock certificates, if any, which are subject to the
transfer. The signature on the letter of request, the stock certificate or any
stock power must be guaranteed in the same manner as described under "Redemp-
tion of Shares." As in the case of redemptions, the written request must be
received in good order before any transfer can be made.
INVESTMENT LIMITATIONS
The following limitations supplement those set forth in the Prospectus.
Whenever an investment limitation sets forth a percentage limitation on in-
vestment or utilization of assets, such limitation shall be determined immedi-
ately after and as a result of the Portfolio's acquisition of such security or
other asset. Accordingly, any later increase or decrease resulting from a
change in values, net assets or other circumstances will not be considered
when determining whether the investment complies with the Portfolio's invest-
ment limitations. Investment limitations (1), (2), (3), (4) and (5) are clas-
sified as fundamental. The Portfolio's fundamental investment limitations can-
not be changed without approval by a "majority of the outstanding shares" (as
defined in the Investment Company Act of 1940, as amended, (the "1940 Act"))
of the Portfolio. The Portfolio will not:
(1) invest in physical commodities or contracts on physical commodities;
(2) purchase or sell real estate or real estate limited partnerships, al-
though it may purchase and sell securities of companies which deal in
real estate and may purchase and sell securities which are secured by
interests in real estate;
(3) make loans except (i) by purchasing debt securities in accordance
with its investment objectives and (ii) by lending its portfolio se-
curities to banks, brokers, dealers and other financial institutions
so long as such
5
<PAGE>
loans are not inconsistent with the 1940 Act, or the rules and regu-
lations or interpretations of the Commission thereunder;
(4) underwrite the securities of other issuers;
(5) issue senior securities, as defined in the 1940 Act, except that this
restriction shall not be deemed to prohibit the Portfolio from making
any permitted borrowings, mortgages or pledges;
(6) purchase on margin or sell short;
(7) invest more than an aggregate of 15% of the net assets of the Portfo-
lio, determined at the time of investment, in securities subject to
legal or contractual restrictions on resale or securities for which
there are no readily available markets; and
(8) invest for the purpose of exercising control over management of any
company.
MANAGEMENT OF THE FUND
TRUSTEES AND OFFICERS
The Officers of the Fund manage its day-to-day operations and are responsi-
ble to the Fund's Board of Trustees. The Trustees set broad policies for the
Fund and elect its Officers. The following is a list of the Trustees and Offi-
cers of the Fund and a brief statement of their present positions and princi-
pal occupations during the past five years:
JOHN T. BENNETT, JR. Trustee of the Fund; President of Squam Investment
College Road -- RFD 3 Management Company, Inc. and Great Island Investment
Meredith, NH 03253 Company, Inc.; President of Bennett Management Com-
Age 67 pany from 1988 to 1993.
PHILIP D. ENGLISH Trustee of the Fund; President and Chief Executive
16 West Madison Street Officer of Broventure Company, Inc.; Chairman of the
Baltimore, MD 21201 Board of Chektec Corporation and Cyber Scientific,
Age 48 Inc.
WILLIAM A. HUMENUK Trustee of the Fund; Partner in the Philadelphia
4000 Bell Atlantic Tower office of the law firm Dechert Price & Rhoads; Direc-
1717 Arch Street tor, Hofler Corp.
Philadelphia, PA 19103
Age 54
6
<PAGE>
<TABLE>
<C> <S>
NORTON H. REAMER* Trustee, President and Chairman of the Fund; Presi-
One International Place dent, Chief Executive Officer and a Director of United
Boston, MA 02110 Asset Management Corporation; Director, Partner or
Age 60 Trustee of each of the Investment Companies of the Ea-
ton Vance Group of Mutual Funds.
PETER M. WHITMAN, JR.* Trustee of the Fund; President and Chief Investment
One Financial Center Officer of Dewey Square Investors Corporation ("DSI")
Boston, MA 02111 since 1988; Director and Chief Executive Officer of H.
Age 53 T. Investors, Inc., formerly a subsidiary of DSI.
WILLIAM H. PARK* Vice President of the Fund; Executive Vice President
One International Place and Chief Financial Officer of United Asset Management
Boston, MA 02110 Corporation.
Age 49
GARY L. FRENCH* Treasurer of the Fund; President of UAM Fund Services,
211 Congress Street Inc. and UAM Fund Distributors, Inc.; formerly Vice
Boston, MA 02110 President of Operations, Development and Control of
Age 45 Fidelity Investment in 1995; Treasurer of the Fidelity
Group of Mutual Funds from 1991 to February 1995.
MICHAEL E. DEFAO* Secretary of the Fund; Vice President and General
211 Congress Street Counsel of UAM Fund Services, Inc. and UAM Fund Dis-
Boston, MA 02110 tributors, Inc.; Associate Attorney of Ropes & Gray (a
Age 28 law firm) from 1993 to February 1995.
ROBERT R. FLAHERTY* Assistant Treasurer of the Fund; Vice President of UAM
211 Congress Street Fund Services, Inc.; formerly Manager of Fund Adminis-
Boston, MA 02110 tration and Compliance of the Chase Global Funds Serv-
Age 32 ices Company from 1995 to 1996; Deloitte & Touche LLP
from 1985 to 1995, formerly Senior Manager.
KARL O. HARTMANN* Assistant Secretary of the Fund; Senior Vice President
73 Tremont Street and General Counsel of Chase Global Funds Services
Boston, MA 02108 Company; Senior Vice President, Secretary and General
Age 41 Counsel of Leland, O'Brien, Rubinstein Associates,
Inc., from November 1990 to November 1991.
</TABLE>
- -----------
* These people are deemed to be "interested persons" of the Fund as that term
is defined in the 1940 Act.
7
<PAGE>
REMUNERATION OF TRUSTEES AND OFFICERS
The Fund pays each Trustee, who is not also an officer or affiliated person,
a $150 quarterly retainer fee per active Portfolio which currently amounts to
$1,050 per quarter. In addition, each unaffiliated Trustee receives a $2,000
meeting fee which is aggregated for all the Trustees and allocated proportion-
ately among the Portfolios of the Fund, UAM Funds, Inc. and reimbursement for
travel and other expenses incurred while attending Board meetings. Trustees
who are also officers or affiliated persons receive no remuneration for their
service as Trustees. The Fund's officers and employees are paid by either the
Adviser, United Asset Management Corporation ("UAM"), the Administrator or the
Sub-Administrator and receive no compensation from the Fund. As of December 6,
1996, the Trustees and officers of the Fund owned less than 1% of the Fund's
outstanding shares.
The following table shows aggregate compensation paid to each of the Fund's
Trustees by the Fund and total compensation paid by the Fund, UAM Funds, Inc.
and AEW Commercial Mortgage Securities Fund, Inc. (collectively the "Fund Com-
plex") in the fiscal year ended April 30, 1996.
<TABLE>
<CAPTION>
(1) (2) (3) (4) (5)
PENSION OR TOTAL COMPENSATION
AGGREGATE RETIREMENT BENEFITS ESTIMATED ANNUAL FROM REGISTRANT AND
NAME OF PERSON, COMPENSATION ACCRUED AS PART OF BENEFITS UPON FUND COMPLEX
POSITION FROM REGISTRANT FUND EXPENSES RETIREMENT PAID TO TRUSTEES
--------------- --------------- ------------------- ---------------- -------------------
<S> <C> <C> <C> <C>
John T. Bennett, Jr.,... $3,396 0 0 $29,600
Trustee
J. Edward Day,.......... $3,396 0 0 $29,600
Former Trustee
Philip D. English,...... $3,396 0 0 $29,600
Trustee
William A. Humenuk,..... $3,396 0 0 $29,600
Trustee
</TABLE>
PRINCIPAL HOLDERS OF SECURITIES
As of December 6, 1996, the following persons or organizations held of rec-
ord 5% or more of the shares of a Portfolio:
IRC Enhanced Index Portfolio: Hartnat & Co., F/B/O Nana Regional, Attn.
Corp. Actions, P.O. Box 4044, Boston, MA, 34.6%*; Hartnat & Co., F/B/O Coca
Cola, Attn. Corp. Actions, P.O. Box 4044, Boston, MA, 27.1%*; Hartnat & Co.,
F/B/O Nana Marriott, Attn. Corp. Actions, P.O. Box 4044, Boston, MA, 15%*;
Hartnat & Co., F/B/O Nana Corporate, Attn. Corp. Actions, P.O. Box 4044, Bos-
ton, MA, 8.5%*; and Hartnat & Co., F/B/O Nana Aggressive Attn. Corp. Actions,
P.O. Box 4044, Boston, MA, 6.7%*.
- -----------
* Denotes shares held by a trustee or other fiduciary for which beneficial
ownership is disclaimed or presumed disclaimed.
8
<PAGE>
The persons or organizations listed above as owning 25% or more of the out-
standing shares of the Portfolio may be presumed to "control" ( as that term
is defined in the 1940 Act) the Portfolio. As a result, those persons or orga-
nizations could have the ability to vote a majority of the shares of the Port-
folio on any matter requiring the approval of shareholders of the Portfolio.
INVESTMENT ADVISER
CONTROL OF ADVISER
Investment Research Company is a wholly-owned subsidiary of UAM, a holding
company incorporated in Delaware in December 1980 for the purpose of acquiring
and owning firms engaged primarily in institutional investment management.
Since its first acquisition in August 1983, UAM has acquired or organized ap-
proximately 45 such wholly-owned affiliated firms (the "UAM Affiliated
Firms"). UAM believes that permitting UAM Affiliated Firms to retain control
over their investment advisory decisions is necessary to allow them to con-
tinue to provide investment management services that are intended to meet the
particular needs of their respective clients.
Accordingly, after acquisition by UAM, UAM Affiliated Firms continue to op-
erate under their own firm name, with their own leadership and individual in-
vestment philosophy and approach. Each UAM Affiliated Firm manages its own
business independently on a day-to-day basis. Investment strategies employed
and securities selected by UAM Affiliated Firms are separately chosen by each
of them. Several UAM Affiliated Firms also act as investment advisers to sepa-
rate series or Portfolios of UAM Funds, Inc., a registered investment company.
ADVISORY FEES
As compensation for services rendered by the Adviser under the Investment
Advisory Agreement, the Portfolio pays the Adviser an annual fee in monthly
installments, calculated by applying the following annual percentage rates to
the Portfolio's average daily net assets for the month:
<TABLE>
<S> <C>
IRC Enhanced Index Portfolio........................................... 0.70%
</TABLE>
From January 23, 1996 (date of commencement) to April 30, 1996, the IRC En-
hanced Index Portfolio paid advisory fees of $0. During this period, the Ad-
viser voluntarily waived advisory fees of $9,000. The Adviser has agreed to
waive all or a portion of its advisory fees and to assume operating expenses
otherwise payable by the Portfolio, if necessary, in order to keep the Portfo-
lio's total annual operating expenses within the limits established by state
securities law, currently from exceeding 2.50% of average daily net assets.
9
<PAGE>
PORTFOLIO TRANSACTIONS
The Investment Advisory Agreement authorizes the Adviser to select the bro-
kers or dealers that will execute the purchases and sales of investment secu-
rities for the Portfolio and directs the Adviser to use its best efforts to
obtain the best execution with respect to all transactions for the Portfolio.
The Adviser may, however, consistent with the interests of the Portfolio, se-
lect brokers on the basis of the research, statistical and pricing services
they provide to the Portfolio. Information and research received from such
brokers will be in addition to, and not in lieu of, the services required to
be performed by the Adviser under the Investment Advisory Agreement. A commis-
sion paid to such brokers may be higher than that which another qualified bro-
ker would have charged for effecting the same transaction, provided that such
commissions are paid in compliance with the Securities Exchange Act of 1934,
as amended, and that the Adviser determines in good faith that such commission
is reasonable in terms either of the transaction or the overall responsibility
of the Adviser to the Portfolio and the Adviser's other clients.
It is not the Fund's practice to allocate brokerage or effect principal
transactions with dealers on the basis of sales of shares which may be made
through broker-dealer firms. However, the Adviser may place portfolio orders
with qualified broker-dealers who refer clients to the Adviser. During the
fiscal years ended April 30, 1995 and April 30, 1996, the entire Fund paid
brokerage commissions of approximately $15,000 and $39,000, respectively.
Some securities considered for investment by the Portfolio may also be ap-
propriate for other clients served by the Adviser. If a purchase or sale of
securities is consistent with the investment policies of the Portfolio and one
or more of these other clients served by the Adviser is considered at or about
the same time, transactions in such securities will be allocated among the
Portfolio and clients in manner deemed fair and reasonable by the Adviser. Al-
though there is no specified formula for allocating such transactions, the
various allocation methods used by the Adviser, and the results of such allo-
cations, are subject to periodic review by the Fund's Board of Trustees.
ADMINISTRATIVE SERVICES
As stated in the Prospectus, the Board of Trustees of the Fund approved a
new Fund Administration Agreement between UAM Fund Services, Inc., a wholly
owned subsidiary of UAM, and the Fund. The Fund's Trustees also approved a Mu-
tual Fund Services Agreement between UAM Fund Services, Inc. and Chase Global
Funds Services Company. The services provided by UAM Fund Services, Inc. and
Chase Global Funds Services Company and the basis of the fees payable by the
Fund under the Fund Administration Agreement are described in the Portfolios'
Prospectus. Prior to April 15, 1996, Chase Global Funds Services Company or
its predecessor, Mutual Funds Service Company, provided certain administrative
10
<PAGE>
services to the Fund under an Administration Agreement between the Fund and
U.S. Trust Company of New York.
The basis of the fees paid to the Sub-Administrator for period January 23,
1996 to April 14, 1996 was as follows: the Fund paid a monthly fee for its
services which on an annualized basis equaled 0.20% of the first $200 million
in combined assets; plus 0.12% of the next $800 million in combined assets;
plus 0.08% on assets over $1 billion but less than $3 billion; plus 0.06% on
assets over $3 billion. The fees were allocated among the Portfolios on the
basis of their relative assets and were subject to a designated minimum fee
schedule per Portfolio, which ranged from $2,000 per month upon inception of a
Portfolio to $70,000 annually after two years. For the period ended April 30,
1996, administrative services fees paid to the Sub-Administrator by the IRC
Enhanced Index Portfolio totaled $7,929. For the period April 15, 1996 to
April 30, 1996, UAM Fund Services, Inc. earned $1,071 from the IRC Enhanced
Index Portfolio as Administrator. The services provided by the Administrator
and the Sub-Administrator and the basis of the current fees payable are de-
scribed in the Portfolio's Prospectus.
PERFORMANCE CALCULATIONS
PERFORMANCE
The Portfolio may from time to time quote various performance figures to il-
lustrate past performance. Performance quotations by investment companies are
subject to rules adopted by the Commission, which require the use of standard-
ized performance quotations or, alternatively, that every non-standardized
performance quotation furnished by the Fund be accompanied by certain stan-
dardized performance information computed as required by the Commission. Aver-
age annual compounded total return quotations used by the fund are based on
the standardized methods of computing performance mandated by the Commission.
An explanation of the method used to compute or express performance follows.
TOTAL RETURN
The average annual total return of the Portfolio is determined by finding
the average annual compounded rates of return over 1, 5 and 10 year periods
that would equate an initial hypothetical $1,000 investment to its ending re-
deemable value. The calculation assumes that all dividends and distributions
are reinvested when paid. The quotation assumes the amount was completely re-
deemed at the end of each 1, 5 and 10 year period and the deduction of all ap-
plicable Fund expenses on an annual basis.
These figures are calculated according to the following formula:
P(1 + T)n = ERV
11
<PAGE>
where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment made at the be-
ginning of the 1, 5 or 10 year periods at the end of the 1, 5 or 10
year periods (or fractional portion thereof).
The cumulative total rate of return for the IRC Enhanced Index Portfolio
from inception on January 23, 1996 to October 31, 1996, the date of the Semi-
Annual Report included herein is 12.03%.
COMPARISONS
To help investors better evaluate how an investment in the Portfolio might
satisfy their investment objective, advertisements regarding the Fund may dis-
cuss various measures of Fund performance as reported by various financial
publications. Advertisements may also compare performance (as calculated
above) to performance as reported by other investments, indices and averages.
The following publications, indices and averages may be used:
(a) Dow Jones Composite Average or its component averages -- an unmanaged
index composed of 30 blue-chip industrial corporation stocks (Dow
Jones Industrial Average), 15 utilities company stocks and 20 trans-
portation stocks. Comparisons of performance assume reinvestment of
dividends.
(b) Standard & Poor's 500 Stock Index or its component indices -- an un-
managed index composed of 400 industrial stocks, 40 financial stocks,
40 utilities stocks and 20 transportation stocks. Comparisons of per-
formance assume reinvestment of dividend.
(c) The New York Stock Exchange composite or component indices -- unman-
aged indices of all industrial, utilities, transportation and finance
stocks listed on the New York Stock Exchange.
(d) Salomon Brothers World Government Bond Index -- The Salomon World Gov-
ernment Bond Index is designed to provide a comprehensive measure of
total return performance of the domestic Government bond market of
thirteen countries. The index has been constructed with the aim of
choosing an "all inclusive" universe of institutionally traded fixed-
rate bonds. The selection of security types to be included in the in-
dex is made with the aim of being as comprehensive as possible, while
satisfying the criterion of reasonable availability to domestic and
international institutions and the existence of complete pricing and
market profile data.
(e) Wilshire 5000 Equity index or its component indices -- represents the
return on the market value of all common equity securities for which
12
<PAGE>
daily pricing is available. Comparisons of performance assume rein-
vestment of dividends.
(f) Lipper -- Mutual Fund Performance Analysis and Lipper -- Fixed Income
Fund Performance Analysis -- measure total return and average cur-
rent yield for the mutual fund industry. Rank individual mutual fund
performance over specified time periods, assuming reinvestment of all
distributions, exclusive of any applicable sales charges.
(g) Morgan Stanley Capital International EAFE Index and World Index -- re-
spectively, arithmetic, market value-weighted averages of the perfor-
mance of over 900 securities listed on the stock exchanges of coun-
tries in Europe, Australia and the Far East, and over 1,400 securities
listed on the stock exchanges of these continents, plus North America.
(h) Goldman Sachs 100 Convertible Bond Index -- currently includes 67
bonds and 33 preferred. The original list of names was generated by
screening for convertible issues of 100 million or greater in market
capitalization. The index is priced monthly.
(i) Salomon Brothers GNMA Index -- includes pools of mortgages originated
by private lenders and guaranteed by the mortgage pools of the Govern-
ment National Mortgage Association.
(j) Salomon Brothers High Grade Corporate Bond Index -- consists of pub-
licly issued, non-convertible corporate bonds rated AA or AAA. It is a
value-weighted, total return index, including approximately 800 issues
with maturities of 12 years or greater.
(k) Salomon Brothers Broad Investment Grade Bond -- is a market-weighted
index that contains approximately 4,700 individually priced investment
grade corporate bonds rated BBB or better, U.S. Treasury/agency issues
and mortgage pass through securities.
(l) Lehman LONG-TERM Treasury Bond -- is composed of all bonds covered by
the Lehman Treasury Bond Index with maturities of 10 years or greater.
(m) NASDAQ Industrial Index -- is composed of more than 3,000 industrial
issues. It is a value-weighted index calculated on price change only
and does not include income.
(n) Value line -- composed of over 1,600 stocks in the Value Line Invest-
ment Survey.
(o) Russell 2000 -- composed of the 2,000 smallest stocks in the Russell
3000, a market value-weighted index of the 3,000 largest U.S. public-
ly-traded companies.
13
<PAGE>
(p) Composite indices -- 60% Standard & Poor's 500 Stock Index, 30% Lehman
LONG-TERM Treasury Bond and 10% U.S. Treasury Bills; 70% Standard &
Poor's 500 Stock Index and 30% NASDAQ Industrial Index; 35% Standard &
Poor's 500 Stock Index and 65% Salomon Brothers High Grade Bond Index;
all stocks on the NASDAQ system exclusive of those traded on an ex-
change, and 65% Standard & Poor's 500 Stock Index and 35% Salomon
Brothers High Grade Bond Index.
(q) CDA Mutual Fund Report published by CDA Investment Technologies,
Inc. -- analyzes price, current yield, risk, total return and average
rate of return (average compounded growth rate) over specified time
periods for the mutual fund industry.
(r) Mutual Fund Source Book published by Morningstar, Inc. -- analyzes
price, yield, risk and total return for equity funds.
(s) Financial publications: Business Week, Changing Times, Financial
World, Forbes, Fortune, Money, Barron's, Consumer's Digest, Financial
Times, Global Investor, Wall Street Journal and Weisenberger Invest-
ment Companies Service -- publications that rate fund performance over
specified time periods.
(t) Consumer Price Index (or Cost of Living Index), published by the U.S.
Bureau of Labor Statistics -- a statistical measure of change over
time in the price of goods and services in major expenditure groups.
(u) Stocks, Bonds, Bills and Inflation, published by Ibbotson Associ-
ates -- historical measure of yield, price and total return for common
and small company stock, long-term government bonds, Treasury bills
and inflation.
(v) Savings and Loan Historical Interest Rates -- as published by the U.S.
Savings & Loan League Fact Book.
(w) Historical data supplied by the research departments of First Boston
Corporation; the J.P. Morgan companies; Salomon Brothers; Merrill
Lynch, Pierce, Fenner & Smith; Lehman Brothers, Inc.; and Bloomberg
L.P.
In assessing such comparisons of performance, an investor should keep in
mind that the composition of the investments in the reported indices and aver-
ages is not identical to the composition of investments in the Portfolio, that
the averages are generally unmanaged, and that the items included in the cal-
culations of such averages may not be identical to the formula used by the
Portfolio to calculate its performance. In addition, there can be no assurance
that the Portfolio will continue this performance as compared to such other
averages.
14
<PAGE>
GENERAL INFORMATION
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Fund was organized under the name The Regis Fund II as a Delaware busi-
ness trust on May 18, 1994. On October 31, 1995, the name of the Fund was
changed to "UAM Funds Trust". The Fund's principal executive office is located
at One International Place, 44th Floor, Boston, MA 02110; however, all in-
vestor correspondence should be directed to the Fund at UAM Funds Service Cen-
ter, c/o Chase Global Funds Services Company, P.O. Box 2798, Boston, MA 02208-
2798. The Fund's Agreement and Declaration of Trust permits the Fund to issue
an unlimited number of shares of beneficial interest, without par value. The
Trustees have the power to designate one or more series ("Portfolios") or
classes of shares of beneficial interest without further action by sharehold-
ers.
On each matter submitted to a vote of the shareholders, each holder of a
share shall be entitled to one vote for each whole share and a fractional vote
for each fractional share standing in his name on the books of the Fund.
In the event of liquidation of the Fund, the holders of the shares of each
Portfolio or any class thereof that has been established and designated shall
be entitled to receive, when and as declared by the Trustees, the excess of
the assets belonging to that Portfolio, or in the case of a class, belonging
to that Portfolio and allocable to that class, over the liabilities belonging
to that Portfolio or class. The assets so distributable to the holders of
shares of any particular Portfolio or class thereof shall be distributed to
the holders in proportion to the number of shares of that Portfolio or class
thereof held by them and recorded on the books of the Fund. The liquidation of
any Portfolio or class thereof may be authorized at any time by vote of a ma-
jority of the Trustees then in office.
Shareholders of both Classes of the Fund's Portfolios have no pre-emptive or
other rights to subscribe to any additional shares or other securities issued
by the Fund or any Portfolio, except as the Trustees in their sole discretion
shall have determined by vote. Both Institutional Class and Service Class
Shares represent an interest in the same assets of a Portfolio and are identi-
cal in all respects except that the Service Class Shares bear certain expenses
related to shareholder servicing and the distribution of such shares, and have
exclusive voting rights with respect to matters relating to such distribution
expenditures.
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
The Fund's policy is to distribute substantially all of the Portfolio's net
investment income, if any, together with any net realized capital gains in the
amount and at the times that will avoid both income (including capital gains)
taxes incurred on it and the imposition of the Federal excise tax on undis-
tributed income and capital gains. The amounts of any income dividends or cap-
ital gains distributions cannot
15
<PAGE>
be predicted. See the discussion under "Dividends, Capital Gains Distributions
and Taxes" in the Prospectus.
Any dividend or distribution paid shortly after the purchase of shares of
the Portfolio by an investor may have the effect of reducing the per share net
asset value of the Portfolio by the per share amount of the dividend or dis-
tribution. Furthermore, such dividends or distributions, although in effect a
return of capital, are subject to income taxes as set forth in the Prospectus.
As set forth in the Prospectus, unless the shareholder elects otherwise in
writing, all dividend and capital gains distributions are automatically re-
ceived in additional shares of the Portfolio at net asset value (as of the
business day following the record date). This will remain in effect until the
Fund is notified by the shareholder in writing at least three days prior to
the record date that either the Income Option (income dividends in cash and
capital gains distributions in additional shares at net asset value) or the
Cash Option (both income dividends and capital gains distributions in cash)
has been elected. An account statement is sent to shareholders whenever an in-
come dividend or capital gains distribution is paid.
Each Portfolio of the Fund will be treated as a separate entity (and hence
as a separate "regulated investment company") for Federal tax purposes. Any
net capital gains recognized by the Portfolio will be distributed to its in-
vestors without need to offset (for Federal income tax purposes) such gains
against any net capital losses of another Portfolio.
CODE OF ETHICS
The Fund has adopted a Code of Ethics which restricts to a certain extent
personal transactions by access persons of the Fund and imposes certain dis-
closure and reporting obligations.
FEDERAL TAXES
In order for the Portfolio to qualify for Federal income tax treatment as a
regulated investment company under the Internal Revenue Code of 1986, as
amended (the "Code"), at least 90% of its gross income for a taxable year must
be derived from certain qualifying income, i.e., dividends, interest, income
derived from loans of securities and gains from the sale or other disposition
of stock or securities or other related income derived with respect to its in-
vesting in stock or securities. Qualification as a regulated investment com-
pany also requires that less than 30% of the Portfolio's gross income be de-
rived from the sale or other disposition of stock or securities held less than
three months.
The Portfolio will distribute to shareholders annually any net capital gains
which have been recognized for Federal income tax purposes. Shareholders will
be advised as to the character of the payments.
16
<PAGE>
FINANCIAL STATEMENTS
The Financial Statements of the IRC Enhanced Index Portfolio for the fiscal
year ended April 30, 1996, and the six months ended October 31, 1996, and the
Financial Highlights for the respective periods which appear in the Portfo-
lio's 1996 Annual Financial Statements and the report thereon of Price
Waterhouse LLP, the Fund's independent accountants, also appearing therein and
in Semi-Annual Report to Shareholders, are attached to this SAI.
17
<PAGE>
IRC ENHANCED INDEX PORTFOLIO
PORTFOLIO OF INVESTMENTS
October 31, 1996 (Unaudited)
The accompanying notes are an integral part of the financial statements.
<TABLE>
<CAPTION>
SHARES VALUE+
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (93.1%)
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE (2.9%)
Lockheed Martin Corp. ....................................... 400 $ 35,850
Raytheon Co. ................................................ 700 34,475
Rockwell International Corp. ................................ 900 49,500
United Technologies Corp. ................................... 200 25,750
----------
145,575
- --------------------------------------------------------------------------------
AUTOMOTIVE (2.1%)
Ford Motor Co. .............................................. 1,800 56,250
General Motors Co. .......................................... 900 48,487
----------
104,737
- --------------------------------------------------------------------------------
BANKS (5.8%)
Bank of Boston Corp. ........................................ 800 51,200
Barnett Banks, Inc. ......................................... 1,300 49,562
First Union Corp. ........................................... 800 58,200
Fleet Financial Group, Inc. ................................. 600 29,925
KeyCorp...................................................... 600 27,975
Mellon Bank Corp. ........................................... 400 26,050
Norwest Corp. ............................................... 500 21,937
US Bancorp................................................... 600 23,925
----------
288,774
- --------------------------------------------------------------------------------
BEVERAGES, FOOD & TOBACCO (7.5%)
Albertson's, Inc. ........................................... 300 10,313
Anheuser-Busch Cos., Inc. ................................... 1,200 46,200
Coca Cola Co. ............................................... 1,500 75,750
ConAgra, Inc. ............................................... 1,000 49,875
Coors (Adolph), Inc., Class B................................ 600 11,625
CPC International, Inc. ..................................... 500 39,438
PepsiCo. Inc. ............................................... 500 14,813
Philip Morris Cos., Inc. .................................... 500 46,313
Sara Lee Corp. .............................................. 1,500 53,250
Sysco Corp. ................................................. 800 27,200
----------
374,777
- --------------------------------------------------------------------------------
</TABLE>
F-3
<PAGE>
IRC ENHANCED INDEX PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
October 31, 1996 (Unaudited)
The accompanying notes are an integral part of the financial statements.
<TABLE>
<CAPTION>
SHARES VALUE+
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
- --------------------------------------------------------------------------------
BROADCASTING & PUBLISHING (0.9%)
Dun & Bradstreet Corp. ..................................... 800 $ 46,300
- --------------------------------------------------------------------------------
CAPITAL EQUIPMENT (6.0%)
Crane Co. .................................................. 700 32,550
Deere & Co. ................................................ 700 29,225
General Electric Co. ....................................... 1,400 135,450
Johnson Controls, Inc. ..................................... 400 29,200
National Service Industries, Inc. .......................... 600 20,700
Snap-On Inc. ............................................... 750 24,094
Textron, Inc. .............................................. 300 26,625
----------
297,844
- --------------------------------------------------------------------------------
CHEMICALS (3.8%)
Dow Chemical................................................ 300 23,325
Du Pont (E.I.) de Nemours & Co. ............................ 100 9,275
Goodrich (B.F.) Co. ........................................ 900 38,138
Monsanto Co. ............................................... 1,500 63,400
PPG Industries, Inc. ....................................... 500 28,500
Rohm & Haas Co. ............................................ 400 28,550
----------
191,188
- --------------------------------------------------------------------------------
COMPUTERS (4.0%)
*Ceridian Corp. ............................................. 200 9,925
*Compaq Computer Corp. ...................................... 600 41,775
International Business Machines Corp. ...................... 200 25,800
*Microsoft Corp. ............................................ 300 41,175
*Seagate Technology.......................................... 200 13,350
Shared Medical Systems Corp. ............................... 400 19,200
*Sun Microsystems, Inc. ..................................... 800 48,700
----------
199,925
- --------------------------------------------------------------------------------
CONSTRUCTION (0.5%)
Armstrong World Industries, Inc. ........................... 400 26,700
- --------------------------------------------------------------------------------
</TABLE>
F-4
<PAGE>
IRC ENHANCED INDEX PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
October 31, 1996 (Unaudited)
The accompanying notes are an integral part of the financial statements.
<TABLE>
<CAPTION>
SHARES VALUE+
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
- --------------------------------------------------------------------------------
CONSUMER NON-DURABLES (2.9%)
Avon Products, Inc. ......................................... 900 $ 48,825
Clorox Co. .................................................. 400 43,650
Heinz (H.J.) Co. ............................................ 1,500 53,250
----------
145,725
- --------------------------------------------------------------------------------
CONSUMER STAPLES (1.0%)
Procter & Gamble Co. ........................................ 500 49,500
- --------------------------------------------------------------------------------
ELECTRONICS (3.0%)
EG&G, Inc. .................................................. 1,200 21,150
Hewlett-Packard Co. ......................................... 800 35,300
Intel Corp. ................................................. 400 43,900
Motorola, Inc. .............................................. 300 13,800
Texas Instruments, Inc. ..................................... 700 33,687
----------
147,837
- --------------------------------------------------------------------------------
ENERGY (8.0%)
Chevron Corp. ............................................... 400 26,300
Enron Corp. ................................................. 700 32,550
Exxon Corp. ................................................. 800 70,900
Halliburton Co. ............................................. 800 45,300
Mobil Corp. ................................................. 700 81,725
Royal Dutch Petroleum Co.--New York Shares................... 500 82,687
Texaco, Inc. ................................................ 600 60,975
----------
400,437
- --------------------------------------------------------------------------------
FINANCIAL SERVICES (4.2%)
Ahmanson (H.F.) & Co. ....................................... 800 25,100
Federal National Mortgage Association........................ 2,100 82,163
Merrill Lynch & Co., Inc. ................................... 700 49,175
Morgan Stanley Group, Inc. .................................. 200 10,050
Travelers Corp. ............................................. 300 16,275
Wells Fargo & Co. ........................................... 100 26,712
----------
209,475
- --------------------------------------------------------------------------------
</TABLE>
F-5
<PAGE>
IRC ENHANCED INDEX PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
October 31, 1996 (Unaudited)
The accompanying notes are an integral part of the financial statements.
<TABLE>
<CAPTION>
SHARES VALUE+
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
- --------------------------------------------------------------------------------
HEALTH CARE (0.9%)
Becton, Dickinson & Co. ..................................... 1,000 $ 43,500
- --------------------------------------------------------------------------------
INSURANCE (3.8%)
Allstate Corp. .............................................. 1,200 67,350
American International Group, Inc. .......................... 100 10,863
Chubb Corp. ................................................. 600 30,000
Jefferson-Pilot Corp. ....................................... 600 34,125
Transamerica Corp. .......................................... 600 45,525
----------
187,863
- --------------------------------------------------------------------------------
LODGING & RESTAURANTS (1.2%)
Hilton Hotels Corp. ......................................... 1,500 45,563
Luby's Cafeterias, Inc. ..................................... 800 16,800
----------
62,363
- --------------------------------------------------------------------------------
MANUFACTURING (0.5%)
Cooper Industries, Inc. ..................................... 600 24,150
- --------------------------------------------------------------------------------
METALS (1.0%)
Aluminum Company of America.................................. 500 29,313
Asarco, Inc. ................................................ 400 10,500
Phelps Dodge Corp. .......................................... 200 12,575
----------
52,388
- --------------------------------------------------------------------------------
MINING (0.7%)
Homestake Mining Co. ........................................ 700 9,975
Newmont Mining Corp. ........................................ 500 23,125
----------
33,100
- --------------------------------------------------------------------------------
OFFICE EQUIPMENT (2.0%)
Harris Corp. ................................................ 600 37,575
Pitney Bowes, Inc. .......................................... 800 44,700
Xerox Corp. ................................................. 400 18,550
----------
100,825
- --------------------------------------------------------------------------------
</TABLE>
F-6
<PAGE>
IRC ENHANCED INDEX PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
October 31, 1996 (Unaudited)
The accompanying notes are an integral part of the financial statements.
<TABLE>
<CAPTION>
SHARES VALUE+
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
- --------------------------------------------------------------------------------
OIL & GAS (1.4%)
Amoco Corp. ................................................. 300 $ 22,725
Phillips Petroleum Co. ...................................... 400 16,400
Schlumberger Ltd. ........................................... 300 29,737
----------
68,862
- --------------------------------------------------------------------------------
PAPER & PACKAGING (2.2%)
Avery Dennison Corp. ........................................ 500 32,937
Kimberly-Clark Corp. ........................................ 700 65,275
Weyerhaeuser Co. ............................................ 300 13,763
----------
111,975
- --------------------------------------------------------------------------------
PHARMACEUTICALS (8.9%)
Abbott Laboratories.......................................... 500 25,313
American Home Products Corp.................................. 400 24,500
Bristol-Myers Squibb Co...................................... 600 63,450
Johnson & Johnson............................................ 1,400 68,950
Lilly (Eli) & Co............................................. 500 35,250
Merck & Co., Inc............................................. 600 44,475
Pfizer, Inc.................................................. 300 24,825
Pharmacia & Upjohn, Inc...................................... 1,400 50,400
Schering-Plough Corp......................................... 1,000 64,000
Warner Lambert Co............................................ 700 44,538
----------
445,701
- --------------------------------------------------------------------------------
RETAIL (4.4%)
Gap, Inc..................................................... 1,500 43,500
Giant Food, Inc., Class A.................................... 700 23,625
Harcourt General, Inc........................................ 400 19,900
Hasbro, Inc.................................................. 500 19,437
Longs Drug Stores, Inc....................................... 600 26,925
Sears, Roebuck & Co.......................................... 800 38,700
TJX Companies, Inc........................................... 800 32,000
Wal-Mart Stores, Inc......................................... 600 15,975
----------
220,062
- --------------------------------------------------------------------------------
</TABLE>
F-7
<PAGE>
IRC ENHANCED INDEX PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
October 31, 1996 (Unaudited)
The accompanying notes are an integral part of the financial statements.
<TABLE>
<CAPTION>
SHARES VALUE+
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
- --------------------------------------------------------------------------------
SERVICES (1.3%)
Comerica, Inc............................................... 500 $ 26,562
Service Corp. International................................. 1,400 39,900
----------
66,462
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS (6.5%)
AT&T Corp................................................... 1,200 41,850
Bell Atlantic Corp.......................................... 800 48,200
Bellsouth Corp.............................................. 1,900 77,425
*Cabletron Systems, Inc...................................... 100 6,237
Lucent Technologies, Inc.................................... 388 18,236
Pacific Telesis Group....................................... 800 27,200
Sprint Corp................................................. 1,400 54,950
U.S. West Communications Group.............................. 1,700 51,637
----------
325,735
- --------------------------------------------------------------------------------
TRANSPORTATION (1.4%)
Burlington Northern Santa Fe................................ 400 32,950
Norfolk Southern Corp....................................... 400 35,650
----------
68,600
- --------------------------------------------------------------------------------
</TABLE>
F-8
<PAGE>
IRC ENHANCED INDEX PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
October 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE+
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
- -------------------------------------------------------------------------------
UTILITIES (4.3%)
American Electric Power Co.................................. 600 $ 24,900
Central & South West Corp................................... 400 10,600
Entergy Corp................................................ 1,600 44,800
FPL Group, Inc.............................................. 300 13,800
GTE Corp.................................................... 1,600 67,400
Pacificorp.................................................. 700 14,787
People's Energy Corp........................................ 1,100 38,775
----------
215,062
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS (93.1%) (COST $4,178,592)(a)............... 4,655,442
- -------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (NET) (6.9%).................... 343,872
- -------------------------------------------------------------------------------
NET ASSETS (100%)............................................ $4,999,314
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
+ See Note A to Financial Statements.
* Non-Income Producing Security.
(a) The cost for federal income tax and book purposes was $4,178,592. At Octo-
ber 31, 1996, net unrealized appreciation for all securities based on tax
cost was $476,850. This consisted of aggregate gross unrealized apprecia-
tion for all securities of $546,619 and aggregate gross unrealized depreci-
ation for all securities of $69,769.
F-9
<PAGE>
IRC ENHANCED INDEX PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1996 (Unaudited)
<TABLE>
- -------------------------------------------------------------------------------
<S> <C>
ASSETS
Investments, at Cost.............................................. $4,178,592
==========
Investments, at Value............................................. $4,655,442
Cash.............................................................. 338,075
Receivable for Portfolio Shares Sold.............................. 11,465
Dividends Receivable.............................................. 8,214
Other Assets...................................................... 154
- -------------------------------------------------------------------------------
Total Assets..................................................... 5,013,350
- -------------------------------------------------------------------------------
LIABILITIES
Payable for Investment Advisory Fees--Note B...................... 2,687
Payable for Administrative Fees--Note C........................... 4,199
Payable for Trustees' Fees--Note F................................ 592
Other Liabilities................................................. 6,558
- -------------------------------------------------------------------------------
Total Liabilities................................................ 14,036
- -------------------------------------------------------------------------------
NET ASSETS......................................................... $4,999,314
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
Paid in Capital................................................... 4,440,152
Distributions in Excess of Net Investment Income.................. (925)
Accumulated Net Realized Gain..................................... 83,237
Unrealized Appreciation........................................... 476,850
- -------------------------------------------------------------------------------
NET ASSETS......................................................... $4,999,314
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
INSTITUTIONAL CLASS SHARES
Shares Issued and Outstanding (Unlimited authorization, no par
value) .......................................................... 448,018
Net Asset Value, Offering and Redemption Price Per Share.......... $ 11.16
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-10
<PAGE>
IRC ENHANCED INDEX PORTFOLIO
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
OCTOBER 31,
1996
(UNAUDITED)
- --------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Dividends................................................. $ 57,018
- --------------------------------------------------------------------------------
EXPENSES
Investment Advisory Fees--Note B
Basic Fees............................................... $14,561
Less: Fees Waived........................................ (3,064) 11,497
-------
Administrative Fees--Note C............................... 22,518
Audit Fees................................................ 5,428
Printing Fees............................................. 4,731
Registration Fees......................................... 3,425
Custodian Fees--Note D.................................... 2,144
Trustees' Fees--Note F.................................... 1,242
Other Expenses............................................ 1,214
- --------------------------------------------------------------------------------
Total Expenses........................................... 52,199
Expense Offset--Note A.................................... (239)
- --------------------------------------------------------------------------------
Net Expenses............................................. 51,960
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME...................................... 5,058
- --------------------------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS........................... 69,071
NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION ON IN-
VESTMENTS................................................ 317,294
- --------------------------------------------------------------------------------
NET GAIN ON INVESTMENTS.................................... 386,365
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS....... $391,423
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-11
<PAGE>
IRC ENHANCED INDEX PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED JANUARY 23,
OCTOBER 31, 1996* TO
1996 APRIL 30,
(UNAUDITED) 1996
- ----------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income................................. $ 5,058 $ 8,478
Net Realized Gain..................................... 69,071 14,166
Net Change in Unrealized Appreciation/Depreciation.... 317,294 159,556
- ----------------------------------------------------------------------------------
Net Increase in Net Assets Resulting
from Operations.................................... 391,423 182,200
- ----------------------------------------------------------------------------------
DISTRIBUTIONS:
Net Investment Income................................. (6,339) (8,122)
- ----------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS: (1)
Issued--Regular....................................... 2,277,629 6,001,748
--In Lieu of Cash Distributions..................... 6,339 8,122
Redeemed.............................................. (1,602,477) (2,251,209)
- ----------------------------------------------------------------------------------
Net Increase from Capital Share Transactions......... 681,491 3,758,661
- ----------------------------------------------------------------------------------
Total Increase........................................ 1,066,575 3,932,739
Net Assets:
Beginning of Period................................... 3,932,739 --
- ----------------------------------------------------------------------------------
End of Period (including distributions in excess of
net investment income and undistributed net
investment income of $(925) and $356, respectively.. $ 4,999,314 $3,932,739
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
(1)Shares Issued and Redeemed:
Shares Issued........................................ 219,105 597,185
In Lieu of Cash Distributions........................ 596 779
Redeemed............................................. (153,460) (216,187)
- ----------------------------------------------------------------------------------
66,241 381,777
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
</TABLE>
* Commencement of Operations
The accompanying notes are an integral part of the financial statements.
F-12
<PAGE>
IRC ENHANCED INDEX PORTFOLIO
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
SIX MONTHS
ENDED JANUARY 23,
OCTOBER 31 1996* TO
1996 APRIL 30
(UNAUDITED) 1996
- -------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD................. $ 10.30 $ 10.00
- -------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income............................... 0.02 0.02
Net Realized and Unrealized Gain on Investments..... 0.86 0.30
- -------------------------------------------------------------------------------
Total from Investment Operations................... 0.88 0.32
- -------------------------------------------------------------------------------
DISTRIBUTIONS
Net Investment Income............................... (0.02) (0.02)
- -------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD....................... $ 11.16 $ 10.30
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
TOTAL RETURN+........................................ 8.55% 3.20%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands)............... $ 4,999 $ 3,933
Ratio of Expenses to Average Net Assets............. 2.51%** 2.52%**
Ratio of Investment Income to Average Net Assets.... 0.24%** 0.67%**
Portfolio Turnover Rate............................. 24% 31%
Average Commission Rate............................. $0.0257 $0.0205
- -------------------------------------------------------------------------------
Voluntary Waived Fees and Expenses Assumed by the
Adviser Per Share................................. $ 0.01 $ 0.03
Ratio of Expenses to Average Net Assets Including
Expense Offsets................................... 2.50%** 2.50%**
- -------------------------------------------------------------------------------
</TABLE>
* Commencement of Operations.
** Annualized
+ 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.
F-13
<PAGE>
IRC ENHANCED INDEX PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
UAM Funds Trust and UAM Funds, Inc. (collectively the "UAM Funds") are reg-
istered under the Investment Company Act of 1940, as amended. The IRC Enhanced
Index Portfolio (the "Portfolio"), a portfolio of UAM Funds Trust, is a diver-
sified, open-end management investment company. At October 31, 1996, the UAM
Funds were composed of forty active portfolios. The financial statements of
the remaining portfolios are presented separately. The objective of the IRC
Enhanced Index Portfolio is to provide a total return exceeding that of the
S&P 500 Index.
A. SIGNIFICANT ACCOUNTING POLICIES: The following significant accounting
policies are in conformity with generally accepted accounting principles. 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 valua-
tion 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 se-
curities 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 provi-
sion for Federal income taxes is required in the financial statements.
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.
F-14
<PAGE>
IRC ENHANCED INDEX PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
Permanent book and tax basis differences relating to shareholder distri-
butions may result in reclassifications to undistributed net investment
income (loss), accumulated net realized gain (loss) and paid in capital
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. Most expenses of the UAM Funds can be directly attributed to a par-
ticular portfolio. Expenses which cannot be directly attributed are appor-
tioned among the portfolios of the UAM Funds based on their relative net
assets. Additionally, certain expenses are apportioned among the portfo-
lios 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 in-
creased 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 por-
tion 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 Portfo-
lio's shares are offered for sale. The most stringent current state restric-
tions 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 net assets and 1.50% of average daily net assets in ex-
cess of $100 million.
C. ADMINISTRATION SERVICES: UAM Fund Services, Inc. (the "Administrator"), a
wholly-owned subsidiary of UAM, provides and oversees administrative, fund ac-
counting, dividend disbursing and transfer agent services to the UAM Funds and
AEW under a Fund 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 ag-
gregate net assets; plus 0.07% of the next $2 billion of the combined aggre-
gate 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
F-15
<PAGE>
IRC ENHANCED INDEX PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
per portfolio which rises from $2,000 per month, upon inception of a portfo-
lio, 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. The Administrator has entered into a Mutual
Funds Service Agreement with Chase Global Funds Services Company ("CGFSC"), an
affiliate of The Chase Manhattan Bank, under which CGFSC agrees to provide
certain services, including but not limited to, administration, fund account-
ing, dividend disbursing and transfer agent services. Pursuant to the Mutual
Funds Service Agreement, the Administrator pays CGFSC a monthly fee. For the
period ended October 31, 1996, $21,700 was paid to CGFSC for their services.
D. CUSTODIAN: Effective July 17, 1996, The Chase Manhattan Bank (the
"Bank"), an affiliate of CGFSC, is custodian for the Portfolio's assets held
in accordance with the custodian agreement. For the period July 17, 1996 to
October 31, 1996, the amount charged to the Portfolio by the Bank aggregated
$2,021, all of which is unpaid at October 31, 1996.
E. 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.
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 ex-
penses incurred in attending Trustee meetings.
G. PURCHASES AND SALES: For the period ended October 31, 1996, the Portfolio
made purchases of $1,292,996 and sales of $985,407 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.
H. OTHER: At October 31, 1996, 78.6% of total shares outstanding were held
by 3 record shareholders owning more than 10% of the aggregate total shares
outstanding.
- -------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION: (UNAUDITED)
For the tax year ended October 31, 1996, the percentage of dividends paid
that qualify for the 70% dividend received deduction for corporate sharehold-
ers is 94.23% for the IRC Enhanced Index Portfolio.
F-16
<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.
F-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.
F-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.
F-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.
F-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.
F-7
<PAGE>
IRC ENHANCED INDEX PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS--(CONTINUED)
April 30, 1996
<TABLE>
<CAPTION>
VALUE
(000)+
<S> <C> <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.
F-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.
F-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.
F-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 ex-
penses assumed by the Adviser.
# The Ratio of Expenses to Average Net Assets excludes the effect of expense
offsets. If expense offsets were included, the Ratio of Expenses to Average
Net Assets would be 2.50%**.
The accompanying notes are an integral part of the financial statements.
F-11
<PAGE>
IRC ENHANCED INDEX PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
UAM Funds Trust and UAM Funds, Inc. (collectively the "UAM Funds") were or-
ganized 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 af-
fect 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 amor-
tized 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 in-
come tax purposes aggregated approximately $160,000, of which approximately
$237,000 related to appreciated securities and approximately $77,000 re-
lated 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 identifica-
tion 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
F-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 rel-
ative 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 por-
tion 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 Portfo-
lio's shares are offered for sale. The most stringent current state restric-
tions 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 re-
ceive 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 bil-
lion of the combined aggregate net assets; plus 0.05% of the combined aggre-
gate 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 af-
ter 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 serv-
ices. 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, com-
puted 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 mil-
lion 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.
F-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. Gov-
ernment 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 ex-
penses 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.
F-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 high-
lights 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 gener-
ally accepted accounting principles. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the responsi-
bility of the Portfolio's management; our responsibility is to express an
opinion on these financial statements based on our audit. We conducted our au-
dit of these financial statements in accordance with generally accepted audit-
ing standards which require that we plan and perform the audit to obtain rea-
sonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence support-
ing the amounts and disclosures in the financial statements, assessing the ac-
counting 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 corre-
spondence with the custodian, provides a reasonable basis for the opinion ex-
pressed above.
Price Waterhouse LLP
Boston, Massachusetts
June 14, 1996
F-15
<PAGE>
PART B
UAM FUNDS
- -------------------------------------------------------------------------------
JACOBS INTERNATIONAL OCTAGON PORTFOLIO
INSTITUTIONAL CLASS SHARES
- -------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION -- JANUARY 3, 1997
This Statement is not a Prospectus but should be read in conjunction with
the Prospectus of the UAM Funds Trust (the "UAM Funds" or the "Fund") for the
Jacobs International Octagon Portfolio Institutional Class Shares dated Janu-
ary 3, 1997. To obtain the Prospectus, please call the UAM Funds Service Cen-
ter:
1-800-638-7983
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Investment Objective and Policies.......................................... 2
Purchase of Shares......................................................... 6
Redemption of Shares....................................................... 6
Shareholder Services....................................................... 7
Investment Limitations..................................................... 8
Management of the Fund..................................................... 10
Investment Adviser......................................................... 12
Portfolio Transactions..................................................... 12
Performance Calculations................................................... 13
General Information........................................................ 16
</TABLE>
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The following policies supplement the investment objective and policies of
the Jacobs International Octagon Portfolio (the "Portfolio") as set forth in
the Portfolio's Prospectus:
LENDING OF SECURITIES
The Portfolio may lend its investment securities to qualified brokers, deal-
ers, domestic and foreign banks or other financial institutions, so long as
the terms, the structure and the aggregate amount of such loans are not incon-
sistent with the Investment Company Act of 1940, as amended, (the "1940 Act")
or the Rules and Regulations or interpretations of the Securities and Exchange
Commission (the "SEC") thereunder, which currently require that (a) the bor-
rower pledge and maintain with the Portfolio collateral consisting of cash, an
irrevocable letter of credit issued by a domestic U.S. bank or securities is-
sued or guaranteed by the United States Government having a value at all times
not less than 100% of the value of the securities loaned, (b) the borrower add
to such collateral whenever the price of the securities loaned rises (i.e.,
the borrower "marks to the market" on a daily basis), (c) the loan be made
subject to termination by the Portfolio at any time, and (d) the Portfolio re-
ceives reasonable interest on the loan (which may include the Portfolio in-
vesting any cash collateral in interest bearing short-term investments). As
with other extensions of credit, there are risks of delay in recovery or even
loss of rights in the securities loaned if the borrower of the securities
fails financially. These risks are similar to the ones involved with repur-
chase agreements as in the Prospectus.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
The U.S. dollar value of the assets of the Portfolio may be affected favor-
ably or unfavorably by changes in foreign currency exchange rates and exchange
control regulations, and the Portfolio may incur costs in connection with con-
versions between various currencies. The Portfolio will conduct its foreign
currency exchange transactions either on a spot (i.e., cash) basis at the spot
rate prevailing in the foreign currency exchange market, or through entering
into forward contracts to purchase or sell foreign currencies. A forward for-
eign currency exchange contract involves an obligation to purchase or sell a
specific currency at a future date, which may be any fixed number of days from
the date of the contract agreed upon by the parties, at a price set at the
time of the contract. These contracts are traded in the interbank market con-
ducted directly between currency traders (usually large commercial banks) and
their customers. A forward contract generally has no deposit requirement, and
no commissions are charged at any stage for such trades.
The Portfolio may enter into forward currency exchange contracts in several
circumstances. When the Portfolio enters into a contract for the purchase or
sale of a security denominated in a foreign currency, or when the Portfolio
anticipates the
2
<PAGE>
receipt in a foreign currency of dividends or interest payments on a security
which it holds, the Portfolio may desire to "lock-in" the U.S. dollar price of
the security or the U.S. dollar equivalent of such dividend or interest pay-
ment, as the case may be. By entering into a forward contract for a fixed
amount of dollars for the purchase or sale of the amount of foreign currency
involved in the underlying transactions, the Portfolio will be able to protect
itself against a possible loss resulting from an adverse change in the rela-
tionship between the U.S. dollar and the subject foreign currency during the
period between the date on which the security is purchased or sold, or on
which the dividend or interest payment is declared, and the date on which such
payments are made or received.
Additionally, when the Portfolio anticipates that the currency of a particu-
lar foreign country may suffer a substantial decline against the U.S. dollar,
it may enter into a forward contract for a fixed amount of dollars, to sell
the amount of foreign currency approximating the value of some or all of the
Portfolio's securities denominated in such foreign currency. The precise
matching of the forward contract amounts and the value of the securities in-
volved will not generally be possible since the future value of securities in
foreign currencies will change as a consequence of market movements in the
value of these securities between the date on which the forward contract is
entered into and the date it matures. The projection of short-term currency
market movement is extremely difficult, and the successful execution of a
short-term hedging strategy is highly uncertain. From time to time, the Port-
folio may enter into forward contracts to protect the value of portfolio secu-
rities and enhance Portfolio performance. The Portfolio will not enter into
such forward contracts or maintain a net exposure to such contracts where the
consummation of the contracts would obligate the Portfolio to deliver an
amount of foreign currency in excess of the value of the Portfolio securities
or other assets denominated in that currency.
Under normal circumstances, consideration of the prospect for currency pari-
ties will be incorporated into the long-term investment decisions made with
regard to overall diversification strategies. However, the Adviser believes
that it is important to have the flexibility to enter into such forward con-
tracts when it determines that the best interests of the performance of the
Portfolio will thereby be served. Except when the Portfolio enters into a for-
ward contract for the purchase or sale of a security denominated in a foreign
currency, which requires no segregation, a forward contract which obligates
the Portfolio to buy or sell currency will generally require the Fund's Custo-
dian to hold an amount of that currency or liquid securities denominated in
that currency equal to the Portfolio's obligations, or to segregate liquid
high grade assets equal to the amount of the Portfolio's obligation. If the
value of the segregated assets declines, additional liquid high grade assets
will be segregated on a daily basis so that the value of the segregated assets
will be equal to the amount of the Portfolio's commitments with respect to
such contracts.
3
<PAGE>
If the Portfolio retains the portfolio security and engages in an offsetting
transaction, the Portfolio will incur a gain or loss (as described below) to
the extent that there has been movement in forward contract prices. Should
forward prices decline during the period between the Portfolio entering into a
forward contract for the sale of a foreign currency and the date it enters
into an offsetting contract for the purchase of the foreign currency, the
Portfolio will realize a gain to the extent that the price of the currency it
has agreed to sell exceeds the price of the currency it has agreed to pur-
chase. Should forward prices increase, the Portfolio would suffer a loss to
the extent that the price of the currency it has agreed to purchase exceeds
the price of the currency it has agreed to sell.
The Portfolio's dealings in forward foreign currency exchange contracts will
be limited to the transactions described above. Of course, the Portfolio is
not required to enter into such transactions with regard to their foreign cur-
rency-denominated securities. It also should be realized that this method of
protecting the value of portfolio securities against a decline in the value of
a currency does not eliminate fluctuations in the underlying prices of the se-
curities. It simply establishes a rate of exchange which one can achieve at
some future point in time. Additionally, although such contracts tend to mini-
mize the risk of loss due to a decline in the value of the hedged currency, at
the same time, they tend to limit any potential gain which might result should
the value of such currency increase.
RISKS OF FORWARD CONTRACTS
Forward contracts are not traded on contract markets regulated by the CFTC
or by the Commission. To the contrary, such instruments are traded through fi-
nancial institutions acting as market-makers. Moreover, a trader of forward
contracts could lose amounts substantially in excess of their initial invest-
ments, due to the margin and collateral requirements associated with such po-
sitions.
In addition, forward contracts may be traded on foreign exchanges. Such
transactions are subject to the risk of governmental actions affecting trading
in or the prices of foreign currencies or securities. The value of such posi-
tions also could be adversely affected by (i) other complex foreign political
and economic factors, (ii) lesser availability than in the United States of
data on which to make trading decisions, (iii) delays in a Portfolio's ability
to act upon economic events occurring in foreign markets during nonbusiness
hours in the United States, (iv) the imposition of different exercise and set-
tlement terms and procedures and margin requirements than in the United
States, and (v) lesser trading volume.
FEDERAL TAX TREATMENT OF FORWARD CURRENCY CONTRACTS
The Portfolio is required for Federal income tax purposes to recognize as
income for each taxable year its net unrealized gains and losses on forward
currency contracts as of the end of each taxable year as well as those actu-
ally realized during the year. Realized gain or loss attributable to a foreign
currency forward contract is treated as 100% ordinary income.
4
<PAGE>
In order for the Portfolio to continue to qualify for Federal income tax
treatment as a regulated investment company under the Internal Revenue Code of
1986, as amended (the "Code"), at least 90% of the Portfolio's gross income
for a taxable year must be derived from certain qualifying income, i.e., divi-
dends, interest, income derived from loans of securities and gains from the
sale or other disposition of stock, securities or foreign currencies, or other
related income, including gains from forward contracts, derived with respect
to its business investing in stock, securities or currencies. Qualification as
a regulated investment company also requires that less than 30% of the Portfo-
lio's gross income be derived from the sale or other disposition of stock, se-
curities, or forward contracts (including certain foreign currencies not di-
rectly related to the Fund's business of investing in stock or securities)
held less than three months.
The Portfolio will distribute to shareholders annually any net capital gains
which have been recognized for Federal income tax purposes (including
unrealized gains at the end of the Portfolio's taxable year). Shareholders
will be advised of the nature of the payment.
DEPOSITARY RECEIPTS
ADRs are depositary receipts typically used by a U.S. bank or trust company
which evidence ownership of underlying securities issued by a foreign corpora-
tion. EDRs and GDRs are typically issued by foreign banks or trust companies,
although they also may be issued by U.S. banks or trust companies, and evi-
dence ownership of underlying securities issued by either a foreign or a
United States corporation. Generally, depositary receipts in registered form
are designed for use in the U.S. securities market and depositary receipts in
bearer form are designed for use in securities markets outside the United
States. Depositary receipts may not necessarily be denominated in the same
currency as the underlying securities into which they may be converted. Depos-
itary receipts may be issued pursuant to sponsored or unsponsored programs. In
sponsored programs, an issuer has made arrangements to have its securities
traded in the form of depositary receipts. In unsponsored programs, the issuer
may not be directly involved in the creation of the program. Although regula-
tory requirements with respect to sponsored and unsponsored programs are gen-
erally similar, in some cases it may be easier to obtain financial information
from an issuer that has participated in the creation of a sponsored program.
Accordingly, there may be less information available regarding issuers of se-
curities underlying unsponsored programs and there may not be a correlation
between such information and the market value of the depositary receipts. De-
positary receipts also involve the risks of other investments in foreign secu-
rities, as discussed in the Prospectus. For purposes of the Portfolio's in-
vestment policies, the Portfolio's investments in depositary receipts will be
deemed to be investments in the underlying securities.
5
<PAGE>
PURCHASE OF SHARES
Shares of the Portfolio may be purchased without sales commission at the net
asset value per share next determined after an order is received in proper
form by the Fund, and payment is received by the Fund's custodian. The minimum
initial investment required for the Portfolio is $2,500 with certain excep-
tions as may be determined from time to time by the officers of the Fund. The
initial investment minimum for IRA accounts is $500. The initial investment
minimum for spousal IRA accounts is $250. The minimum for any subsequent in-
vestment is $100. An order received in proper form prior to the 4:00 p.m.
close of the New York Stock Exchange (the "Exchange") will be executed at the
price computed on the date of receipt; and an order received not in proper
form or after the 4:00 p.m. close of the Exchange will be executed at the
price computed on the next day the Exchange is open after proper receipt. The
Exchange will be closed on the following days: Presidents' Day, February 17,
1997; Good Friday, March 28, 1997; Memorial Day, May 26, 1997; Independence
Day, July 4, 1997, Thanksgiving Day, November 27, 1997; Christmas Day, Decem-
ber 25, 1997; and New Year's Day, January 1, 1998.
The Portfolio reserves the right in its sole discretion (1) to suspend the
offering of its shares, (2) to reject purchase orders when in the judgment of
management such rejection is in the best interests of the Fund, and (3) to re-
duce or waive the minimum for initial and subsequent investment for certain
fiduciary accounts such as employee benefit plans or under circumstances where
certain economies can be achieved in sales of the Portfolio's shares.
REDEMPTION OF SHARES
The Portfolio may suspend redemption privileges or postpone the date of pay-
ment (1) during any period that either the Exchange or custodian bank are
closed or trading on the Exchange is restricted as determined by the Commis-
sion, (2) during any period when an emergency exists as defined by the rules
of the Commission as a result of which it is not reasonably practicable for
the Portfolio to dispose of securities owned by it or to fairly determine the
value of its assets, and (3) for such other periods as the Commission may per-
mit. The Fund has made an election with the Commission to pay in cash all re-
demptions requested by any shareholder of record limited in amount during any
90-day period to the lesser of $250,000 or 1% of the net assets of the Fund at
the beginning of such period. Such commitment is irrevocable without the prior
approval of the Commission. Redemptions in excess of the above limits may be
paid, in whole or in part, in investment securities or in cash as the Board of
Trustees may deem advisable; however, payment will be made wholly in cash un-
less the Board of Trustees believes that economic or market conditions exist
which would make such a practice detrimental to the best interests of the
Fund. If redemptions are paid in investment securities, such securities will
be valued as set forth in the Prospectus under "VALUATION OF SHARES," and a
redeeming shareholder would normally incur brokerage expenses if those securi-
ties were converted to cash.
6
<PAGE>
No charge is made by the Portfolio for redemptions. Any redemption may be
more or less than the shareholder's initial cost depending on the market value
of the securities held by the Portfolio.
SIGNATURE GUARANTEES
To protect your account, the Fund and Chase Global Funds Services Company
(the "Sub-Administrator") from fraud, signature guarantees are required for
certain redemptions. Signature guarantees are required for (1) redemptions
where the proceeds are to be sent to someone other than the registered
shareowner(s) or the registered address or (2) share transfer requests. The
purpose of signature guarantees is to verify the identity of the party who has
authorized a redemption.
Signatures must be guaranteed by an "eligible guarantor institution" as de-
fined in Rule 17Ad-15 under the Securities Exchange Act of 1934. Eligible
guarantor institutions include banks, brokers, dealers, credit unions, na-
tional securities exchanges, registered securities associations, clearing
agencies and savings associations. A complete definition of "eligible guaran-
tor institution" is available from the Sub-Administrator. Broker-dealers guar-
anteeing signatures must be a member of a clearing corporation or maintain net
capital of at least $100,000. Credit unions must be authorized to issue signa-
ture guarantees. Signature guarantees will be accepted from any eligible guar-
antor institution which participates in a signature guarantee program.
The signature guarantee must appear either: (1) on the written request for
redemption; (2) on a separate instrument for assignment ("stock power") which
should specify the total number of shares to be redeemed; or (3) on all stock
certificates tendered for redemption and, if shares held by the Fund are also
being redeemed, on the letter or stock power.
SHAREHOLDER SERVICES
The following supplements the shareholder services information set forth in
the Portfolio's Prospectus:
EXCHANGE PRIVILEGE
Institutional Class Shares of the Portfolio may be exchanged for any other
Institutional Class Shares of a Portfolio included in the UAM Funds which is
comprised of the Fund and UAM Funds, Inc. (See the list of Portfolios of the
UAM Funds--Institutional Class Shares at the end of the Prospectus.) Exchange
requests should be made by calling the Fund (1-800-638-7983) or by writing to
UAM Funds, UAM Funds Service Center, c/o Chase Global Funds Services Company,
P.O. Box 2798, Boston, MA 02208-2798. The exchange privilege is only available
with respect to Portfolios that are qualified for sale in the shareholder's
state of residence.
7
<PAGE>
Any such exchange will be based on the respective net asset values of the
shares involved. There is no sales commission or charge of any kind. Before
making an exchange into a Portfolio, a shareholder should read its Prospectus
and consider the investment objective of the Portfolio to be purchased. You
may obtain a Prospectus for the Portfolio(s) you are interested in by calling
the UAM Funds Service Center at 1-800-638-7983.
Exchange requests may be made either by mail or telephone. Telephone ex-
changes will be accepted only if the certificates for the shares to be ex-
changed are held by the Fund for the account of the shareholder and the regis-
tration of the two accounts will be identical. Requests for exchanges received
prior to 4:00 p.m. (Eastern Time) will be processed as of the close of busi-
ness on the same day. Requests received after 4:00 p.m. will be processed on
the next business day. Neither the Fund nor the Sub-Administrator will be re-
sponsible for the authenticity of the exchange instructions received by tele-
phone. Exchanges may also be subject to limitations as to amounts or frequen-
cy, and to other restrictions established by the Board of Trustees to assure
that such exchanges do not disadvantage the Fund and its shareholders.
For Federal income tax purposes an exchange between Funds is a taxable
event, and, accordingly, a capital gain or loss may be realized. In a revenue
ruling relating to circumstances similar to the Fund's, an exchange between
series of a Fund was also deemed to be a taxable event. It is likely, there-
fore, that a capital gain or loss would be realized on an exchange between
Portfolios; you may want to consult your tax adviser for further information
in this regard. The exchange privilege may be modified or terminated at any
time.
TRANSFER OF SHARES
Shareholders may transfer shares of the Portfolio to another person by mak-
ing a written request to the Fund. The request should clearly identify the ac-
count and number of shares to be transferred, and include the signature of all
registered owners and all stock certificates, if any, which are subject to the
transfer. The signature on the letter of request, the stock certificate or any
stock power must be guaranteed in the same manner as described under "Redemp-
tion of Shares." As in the case of redemptions, the written request must be
received in good order before any transfer can be made.
INVESTMENT LIMITATIONS
The following limitations supplement those set forth in the Prospectus.
Whenever an investment limitation sets forth a percentage limitation on in-
vestment or utilization of assets, such limitation shall be determined immedi-
ately after and as a result of the Portfolio's acquisition of such security or
other asset. Accordingly, any later increase or decrease resulting from a
change in values, net assets or other circumstances will not be considered
when determining whether the investment
8
<PAGE>
complies with the Portfolio's investment limitations. Investment limitations
(1), (2), (3), (4) and (10) are classified as fundamental. The Portfolio's
fundamental investment limitations cannot be changed without approval by a
"majority of the outstanding shares" (as defined in the 1940 Act) of the Port-
folio. The Portfolio will not:
(1) invest in physical commodities or contracts on physical commodities;
(2) purchase or sell real estate or real estate limited partnerships, al-
though it may purchase and sell securities of companies which deal in
real estate and may purchase and sell securities which are secured by
interests in real estate;
(3) make loans except (i) by purchasing debt securities in accordance
with its investment objectives and (ii) by lending its portfolio se-
curities to banks, brokers, dealers and other financial institutions
so long as such loans are not inconsistent with the 1940 Act or the
rules and regulations or interpretations of the Commission thereun-
der;
(4) underwrite the securities of other issuers;
(5) invest in futures and/or options on futures;
(6) purchase on margin or sell short;
(7) invest more than an aggregate of 15% of the net assets of the Portfo-
lio, determined at the time of investment, in securities subject to
legal or contractual restrictions on resale or securities for which
there are no readily available markets;
(8) invest for the purpose of exercising control over management of any
company; and
(9) issue senior securities, as defined in the 1940 Act, except that this
restriction shall not be deemed to prohibit the Portfolio from (i)
making any permitted borrowings, mortgages or pledges, or (ii) enter-
ing into repurchase transactions.
9
<PAGE>
MANAGEMENT OF THE FUND
TRUSTEES AND OFFICERS
The Officers of the Fund manage its day-to-day operations and are responsi-
ble to the Fund's Board of Trustees. The Trustees set broad policies for the
Fund and elect its Officers. The following is a list of the Trustees and Offi-
cers of the Fund and a brief statement of their present positions and princi-
pal occupations during the past five years:
<TABLE>
<C> <S>
JOHN T. BENNETT, Jr. Trustee of the Fund; President of Squam Investment
College Road -- RFD 3 Management Company, Inc. and Great Island Investment
Meredith, NH 03253 Company, Inc.; President of Bennett Management Com-
Age 67 pany from 1988 to 1993.
PHILIP D. ENGLISH Trustee of the Fund; President and Chief Executive
16 West Madison Street Officer of Broventure Company, Inc.; Chairman of the
Baltimore, MD 21201 Board of Chektec Corporation and Cyber Scientific,
Age 48 Inc.
WILLIAM A. HUMENUK Trustee of the Fund; Partner in the Philadelphia of-
4000 Bell Atlantic Tower fice of the law firm Dechert Price & Rhoads; Direc-
1717 Arch Street tor, Hofler Corp.
Philadelphia, PA 19103
Age 54
NORTON H. REAMER* Trustee, President and Chairman of the Fund;
One International Place President, Chief Executive Officer and a Director of
Boston, MA 02110 United Asset Management Corporation; Director,
Age 60 Partner or Trustee of each of the Investment Compa-
nies of the Eaton Vance Group of Mutual Funds.
PETER M. WHITMAN, JR.* Trustee of the Fund; President and Chief Investment
One Financial Center Officer of Dewey Square Investors Corporation ("DSI")
Boston, MA 02110 since 1988; Director and Chief Executive Officer of
Age 53 H.T. Investors, Inc., formerly a subsidiary of DSI.
WILLIAM H. PARK* Vice President of the Fund; Executive Vice President
One International Place and Chief Financial Officer of United Asset Manage-
Boston, 02110 ment Corporation.
Age 49
GARY L. FRENCH* Treasurer of the Fund; President of UAM Fund Servic-
211 Congress Street es, Inc. and UAM Fund Distributors, Inc.; formerly
Boston, MA 02110 Vice President of Operations, Development and Control
Age 45 of Fidelity Investment in 1995; Treasurer of the Fi-
delity Group of Mutual Funds from 1991 to February
1995.
</TABLE>
10
<PAGE>
<TABLE>
<C> <S>
MICHAEL E. DEFAO* Secretary of the Fund; Vice President and General Counsel
211 Congress Street of UAM Fund Services, Inc. and UAM Fund Distributors,
Boston, MA 02110 Inc.; Associate Attorney of Ropes and Gray (a law firm)
Age 28 from 1993 to February 1995.
ROBERT R. FLAHERTY* Assistant Treasurer of the Fund; Vice President of UAM
211 Congress Street Fund Services, Inc.; formerly Manager of Fund Administra-
Boston, MA 02110 tion and Compliance of the Chase Global Fund Services come
Age 32 from Deloitte & Touche LLP from 1985 to 1995, Senior Man-
ager.
KARL O. HARTMANN* Assistant Secretary of the Fund; Senior Vice President and
73 Tremont Street General Counsel of Chase Global Funds Services Company;
Boston, MA 02108 Senior Vice President, Secretary and General Counsel of
Age 41 Leland, O'Brien, Rubinstein Associates, Inc. from November
1990 to November 1991.
</TABLE>
- -----------
* This person is deemed to be an "interested person" of the Fund as that term
is defined in the 1940 Act.
REMUNERATION OF TRUSTEES AND OFFICERS
The Fund pays each Trustee, who is not also an officer or affiliated person,
a $150 quarterly retainer fee per active Portfolio which currently amounts to
$1,050 per quarter. In addition, each unaffiliated Trustee receives a $2,000
meeting fee which is aggregated for all the Trustees and allocated proportion-
ately among the Portfolios of the Fund and UAM Funds, Inc. and reimbursement
for travel and other expenses incurred while attending Board meetings. Trustees
who are also officers or affiliated persons receive no remuneration for their
service as Trustees. The Fund's officers and employees are paid by either the
Adviser, United Asset Management Corporation ("UAM"), the Administrator or the
Sub-Administrator and receive no compensation from the Fund. As of December 6,
1996, the Trustees and Officers of the Fund owned less than 1% of the Fund's
outstanding shares.
The following table shows aggregate compensation to be paid to each of the
Fund's unaffiliated Trustees by the Fund and total compensation paid by the
Fund, UAM Funds, Inc. and AEW Commercial Mortgage Securities Fund, Inc. (col-
lectively the "Fund Complex") in the fiscal year ended April 30, 1996.
<TABLE>
<CAPTION>
(1) (2) (3) (4) (5)
PENSION OR TOTAL COMPENSATION
AGGREGATE RETIREMENT BENEFITS ESTIMATED ANNUAL FROM REGISTRANT AND
NAME OF PERSON, COMPENSATION ACCRUED AS PART OF BENEFITS UPON FUND COMPLEX
POSITION FROM REGISTRANT FUND EXPENSES RETIREMENT PAID TO TRUSTEES
--------------- --------------- ------------------- ---------------- -------------------
<S> <C> <C> <C> <C>
John T. Bennett, Jr. ... $3,396 0 0 $29,600
Trustee
J. Edward Day........... $3,396 0 0 $29,600
Former Trustee
Philip D. English....... $3,396 0 0 $29,600
Trustee
William A. Humenuk...... $3,396 0 0 $29,600
Trustee
</TABLE>
11
<PAGE>
INVESTMENT ADVISER
CONTROL OF ADVISER
Jacobs Asset Management (the "Adviser") is a Florida limited partnership or-
ganized in July 1995. UAM is a limited partner of the Adviser and owns a con-
trolling interest in the Adviser. UAM is a holding company incorporated in
Delaware in December 1980 for the purpose of acquiring and owning firms en-
gaged primarily in institutional investment management. Since its first acqui-
sition in August 1983, UAM has acquired or organized approximately 45 wholly-
owned affiliated firms (the "UAM Affiliated Firms"). UAM believes that permit-
ting UAM Affiliated Firms to retain control over their investment advisory de-
cisions is necessary to allow them to continue to provide investment manage-
ment services that are intended to meet the particular needs of their respec-
tive clients.
Accordingly, after acquisition by UAM, UAM Affiliated Firms continue to op-
erate under their own firm name, with their own leadership and individual in-
vestment philosophy and approach. Each UAM Affiliated Firm manages its own
business independently on a day-to-day basis. Investment strategies employed
and securities selected by UAM Affiliated Firms are separately chosen by each
of them. Several UAM Affiliated Firms also act as investment advisers to sepa-
rate series or Portfolios of UAM Funds, Inc. a registered investment company.
ADVISORY FEES
As compensation for services rendered by the Adviser under the Investment
Advisory Agreement, the Portfolio pays the Adviser an annual fee in monthly
installments, calculated by applying the following annual percentage rates to
the Portfolio's average daily net assets for the month:
<TABLE>
<S> <C>
Jacobs International Octagon Portfolio................................. 1.00%
</TABLE>
PORTFOLIO TRANSACTIONS
The Investment Advisory Agreement authorizes the Adviser to select the bro-
kers or dealers that will execute the purchases and sales of investment secu-
rities for the Portfolio and directs the Adviser to use its best efforts to
obtain the best execution with respect to all transactions for the Portfolio.
The Adviser may, however, consistent with the interests of the Portfolio, se-
lect brokers on the basis of the research, statistical and pricing services
they provide to the Portfolio. Information and research received from such
brokers will be in addition to, and not in lieu of, the services required to
be performed by the Adviser under the Investment Advisory Agreement. A commis-
sion paid to such brokers may be higher than that which another qualified bro-
ker would have charged for effecting the same transaction, provided that such
commissions are paid in compliance with the Securities Ex-
12
<PAGE>
change Act of 1934, as amended, and that the Adviser determines in good faith
that such commission is reasonable in terms either of the transaction or the
overall responsibility of the Adviser to the Portfolio and the Adviser's other
clients.
It is not the Fund's practice to allocate brokerage or effect principal
transactions with dealers on the basis of sales of shares which may be made
through broker-dealer firms. However, the Adviser may place portfolio orders
with qualified broker-dealers who refer clients to the Adviser. During the
fiscal years ended April 30, 1995 and April 30, 1996, the entire Fund paid
brokerage commissions of approximately $15,000 and $39,000, respectively.
Some securities considered for investment by the Portfolio may also be ap-
propriate for other clients served by the Adviser. If purchases or sales of
securities consistent with the investment policies of the Portfolio and one or
more of these other clients served by the Adviser is considered at or about
the same time, transactions in such securities will be allocated among the
Portfolio and clients in a manner deemed fair and reasonable by the Adviser.
Although there is no specified formula for allocating such transactions, the
various allocation methods used by the Adviser, and the results of such allo-
cations, are subject to periodic review by the Fund's Board of Trustees.
PERFORMANCE CALCULATIONS
PERFORMANCE
The Portfolio may from time to time quote various performance figures to il-
lustrate past performance. Performance quotations by investment companies are
subject to rules adopted by the Commission, which require the use of standard-
ized performance quotations or, alternatively, that every non-standardized
performance quotation furnished by the Fund be accompanied by certain stan-
dardized performance information computed as required by the Commission. Aver-
age annual compounded total return quotations used by the Fund are based on
the standardized methods of computing performance mandated by the Commission.
An explanation of the method used to compute or express performance follows.
TOTAL RETURN
The average annual total return of the Portfolio is determined by finding
the average annual compounded rates of return over 1, 5 and 10 year periods
that would equate an initial hypothetical $1,000 investment to its ending re-
deemable value. The calculation assumes that all dividends and distributions
are reinvested when paid. The quotation assumes the amount was completely re-
deemed at the end of each 1, 5 and 10 year period and the deduction of all ap-
plicable Fund expenses on an annual basis.
13
<PAGE>
These figures are calculated according to the following formula:
P(1 + T)n = ERV
where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment made at
the beginning of the 1, 5 or 10 year periods at the end of the 1,
5 or 10 year periods (or fractional portion thereof).
COMPARISONS
To help investors better evaluate how an investment in the Portfolio might
satisfy their investment objective, advertisements regarding the Fund may dis-
cuss various measures of Fund performance as reported by various financial
publications. Advertisements may also compare performance (as calculated
above) to performance as reported by other investments, indices and averages.
The following publications, indices and averages may be used:
(a) Dow Jones Composite Average or its component averages -- an unmanaged
index composed of 30 blue-chip industrial corporation stocks (Dow
Jones Industrial Average), 15 utilities company stocks and 20 trans-
portation stocks. Comparisons of performance assume reinvestment of
dividends.
(b) Standard & Poor's 500 Stock Index or its component indices -- an un-
managed index composed of 400 industrial stocks, 40 financial stocks,
40 utilities stocks and 20 transportation stocks. Comparisons of per-
formance assume reinvestment of dividends.
(c) The New York Stock Exchange composite or component indices -- unman-
aged indices of all industrial utilities, transportation and finance
stocks listed on the New York Stock Exchange.
(d) Wilshire 5000 Equity index or its component indices -- represents the
return on the market value of all common equity securities for which
daily pricing is available. Comparisons of performance assume rein-
vestment of dividends.
(e) Lipper -- Mutual Fund Performance Analysis and Lipper -- Fixed Income
Fund Performance Analysis -- measure total return and average current
yields for the mutual fund industry. Rank individual mutual fund per-
formance over specified time periods, assuming reinvestments of all
distributions, exclusive of any applicable sales charges.
14
<PAGE>
(f) Morgan Stanley Capital International EAFE Index and World Index -- re-
spectively, arithmetic, market value-weighted averages of the perfor-
mance of over 900 securities listed on the stock exchanges of coun-
tries in Europe, Australia and the Far East, and over 1,400 securities
listed on the stock exchanges of these continents, including North
America.
(g) NASDAQ Industrial Index -- is composed of more than 3,000 industrial
issues. It is a value-weighted index calculated on price change only
and does not include income.
(h) Value Line -- composed of over 1,600 stocks in the Value Line Invest-
ment Survey.
(i) Russell 2000 -- composed of the 2,000 smallest stocks in the Russell
3000, a market value weighted index of the 3,000 largest U.S. public-
ly-traded companies.
(j) The Salomon-Russell Broad Market Index (BMI) -- measures the perfor-
mance of approximately 4,500 institutionally investable equity securi-
ties in 23 worldwide local markets whose combined total available mar-
ket capitalization exceeds $106 million. The BMI is split into two ma-
jor components. The Primary Market Index defines the large stock uni-
verse, representing the top 80% of the available capital of the BMI in
each country. The Extended Market Index represents the remaining 20%
of the available capital that defines the small stock universe.
(k) International Finance Corporation Indices (IFC) -- measure the perfor-
mance of 800 stocks in over 20 emerging equity markets.
(l) Morgan Stanley Capital International Emerging Market Indices --
represent the local industry composition in emerging market countries.
The indices aim to cover 60% of the available total market capitaliza-
tion of each local market and currently include returns on 13 emerging
equity markets.
(m) The Morgan Stanley Capital International Europe 13 Index -- an unman-
aged index composed of the securities listed on the stock exchanges of
the following countries: Austriala, Belgium, Denmark, Finland, France,
Germany, Italy, the Netherlands, Norway, Spain, Sweden, Switzerland
and the United Kingdom.
(n) CDA Mutual Fund Report published by CDA Investment Technologies,
Inc. -- analyzes price, current yield, risk, total return and average
rate of return (average compounded growth rate) over specified time
periods for the mutual fund industry.
(o) Mutual Fund Source Book published by Morningstar, Inc. -- analyzes
price, yield, risk and total return for equity funds.
15
<PAGE>
(p) Financial publications: Business Week, Changing Times, Financial
World, Forbes, Fortune, Money, Barron's, Consumer's Digest, Financial
Times, Global Investor, Wall Street Journal and Weisenberger Invest-
ment Companies Service -- publications that rate fund performance over
specified time periods.
(q) Consumer Price Index (or Cost of Living Index) published by the
U.S. Bureau of Labor Statistics -- a statistical measure of change
over time in the price of goods and services in major expenditure
groups.
(r) Stocks, Bonds, Bills and Inflation, published by Ibbotson Associ-
ates --historical measure of yield, price and total return for common
and small company stock, long-term government bonds, U.S. Treasury
bills and inflation.
(s) Savings and Loan Historical Interest Rates -- as published by the U.S.
Savings & Loan League Fact Book.
(t) Historical data supplied by the research departments of First Boston
Corporation; the J.P. Morgan companies; Salomon Brothers; Merrill
Lynch, Pierce, Fenner & Smith; Lehman Brothers, Inc.; and Bloomberg
L.P.
In assessing such comparisons of performance, an investor should keep in
mind that the composition of the investments in the reported indices and aver-
ages is not identical to the composition of investments in the Portfolio, that
the averages are generally unmanaged, and that the items included in the cal-
culations of such averages may not be identical to the formula used by the
Portfolio to calculate its performance. In addition, there can be no assurance
that the Portfolio will continue this performance as compared to such other
averages.
GENERAL INFORMATION
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Fund was organized under the name "The Regis Fund II" as a Delaware
business trust on May 18, 1994. On October 31, 1995, the name of the Fund was
changed to "UAM Funds Trust." The Fund's principal executive office is located
at One International Place, 44th Floor, Boston, MA 02110; however all investor
correspondence should be directed to the Fund at UAM Funds Service Center, c/o
Chase Global Funds Services Company, P.O. Box 2798, Boston, MA 02208-2798. The
Fund's Agreement and Declaration of Trust permits the Fund to issue an unlim-
ited number of shares of beneficial interest, without par value. The Trustees
have the power to designate one or more series ("Portfolios") or classes of
shares of beneficial interest without further action by shareholders. Current-
ly, the Fund is offering shares of seven Portfolios.
16
<PAGE>
On each matter submitted to a vote of the shareholders, each holder of a
share shall be entitled to one vote for each whole share and a fractional vote
for each fractional share standing in his or her name on the books of the
Fund.
In the event of liquidation of the Fund, the holders of the shares of each
Portfolio or any class thereof that has been established and designated shall
be entitled to receive, when and as declared by the Trustees, the excess of
the assets belonging to that Portfolio, or in the case of a class, belonging
to that Portfolio and allocable to that class, over the liabilities belonging
to that Portfolio or class. The assets so distributable to the holders of
shares of any particular Portfolio or class thereof shall be distributed to
the holders in proportion to the number of shares of that Portfolio or class
thereof held by them and recorded on the books of the Fund. The liquidation of
any Portfolio or class thereof may be authorized at any time by vote of a ma-
jority of the Trustees then in office.
Shareholders of both Classes of the Fund's Portfolios have no pre-emptive or
other rights to subscribe to any additional shares or other securities issued
by the Fund or any Portfolio, except as the Trustees in their sole discretion
shall have determined by vote. Both Institutional Class and Service Class
Shares represent an interest in the same assets of a Portfolio and are identi-
cal in all respects except that the Service Class shares bear certain expenses
related to shareholder servicing and the distribution of such shares, and have
exclusive voting rights with respect to matters relating to such distribution
expenditures.
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
The Fund's policy is to distribute substantially all of the Portfolio's net
investment income, if any, together with any net realized capital gains annu-
ally in the amount and at the times that will avoid both income (including
capital gains) taxes incurred and the imposition of the Federal excise tax on
undistributed income and capital gains. The amounts of any income dividends or
capital gains distributions cannot be predicted. See discussion under "DIVI-
DENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES" in the Prospectus.
Any dividend or distribution paid shortly after the purchase of shares of
the Portfolio by an investor may have the effect of reducing the per share net
asset value of the Portfolio by the per share amount of the dividend or dis-
tribution. Furthermore, such dividends or distributions, although in effect a
return of capital, are subject to income taxes as set forth in the Prospectus.
As set forth in the Prospectus, unless the shareholder elects otherwise in
writing, all dividend and capital gains distributions are automatically re-
ceived in additional shares of the respective Portfolio of the Fund at net as-
set value (as of the business day following the record date). This will remain
in effect until the Fund is
17
<PAGE>
notified by the shareholder in writing at least three days prior to the record
date that either the Income Option (income dividends in cash and capital gains
distributions in additional shares at net asset value) or the Cash Option
(both income dividends and capital gains distributions in cash) has been
elected. An account statement is sent to shareholders whenever an income divi-
dend or capital gains distribution is paid.
Each Portfolio of the Fund will be treated as a separate entity (and hence
as a separate "regulated investment company") for Federal tax purposes. Any
net capital gains recognized by the Portfolio will be distributed to its in-
vestors without need to offset (for Federal income tax purposes) such gains
against any net capital losses of another Portfolio.
FEDERAL TAXES
In order for the Portfolio to continue to qualify for Federal income tax
treatment as a regulated investment company under the Internal Revenue Code of
1986, as amended (the "Code"), at least 90% of the Portfolio's gross income
for a taxable year must be derived from certain qualifying income, i.e., divi-
dends, interest, income derived from loans of securities and gains from the
sale or other disposition of stock, securities or foreign currencies, or other
related income, including gains from forward contracts, derived with respect
to its business investing in stock, securities or currencies. Qualification as
a regulated investment company also requires that less than 30% of the Portfo-
lio's gross income be derived from the sale or other disposition of stock, se-
curities, or forward contracts (including certain foreign currencies not di-
rectly related to the Fund's business of investing in stock or securities)
held less than three months.
The Portfolio is required for Federal income tax purposes to recognize as
income for the taxable year its net unrealized gains and losses on forward
currency contracts as of the end of the taxable year as well as those actually
realized during the year. Recognized gain or loss attributable to a foreign
currency forward contract is treated as 100% ordinary income.
The Portfolio will distribute to shareholders annually any net capital gains
which have been recognized for Federal income tax purposes. Shareholders will
be advised on the character of the payment.
CODE OF ETHICS
The Fund has adopted a Code of Ethics which restricts to a certain extent
personal transactions by access persons of the Fund and imposes certain dis-
closure and reporting obligations.
18
<PAGE>
PART B
UAM FUNDS
- -------------------------------------------------------------------------------
MJI INTERNATIONAL EQUITY PORTFOLIO
INSTITUTIONAL CLASS SHARES
INSTITUTIONAL SERVICE CLASS SHARES
- -------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION -- JANUARY 3, 1997
This Statement is not a Prospectus but should be read in conjunction with
the Prospectuses of the UAM Funds Trust (the "UAM Funds" or the "Fund") for
the MJI International Equity Portfolio dated January 3, 1997 relating to the
Institutional Class Shares, and the Prospectus dated January 3, 1997 relating
to the Institutional Service Class Shares (the "Service Class Shares"). To ob-
tain a Prospectus, please call UAM Funds Service Center:
1-800-638-7983
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Investment Objectives and Policies......................................... 2
Purchase of Shares......................................................... 12
Redemption of Shares....................................................... 13
Shareholder Services....................................................... 14
Investment Limitations..................................................... 16
Management of the Fund..................................................... 17
Investment Adviser......................................................... 20
Service and Distribution Plans............................................. 21
Portfolio Transactions..................................................... 24
Administrative Services.................................................... 25
Performance Calculations................................................... 25
General Information........................................................ 29
Federal Taxes.............................................................. 31
Financial Statements....................................................... 32
Appendix -- Description of Securities and Ratings.......................... A-1
</TABLE>
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The following policies supplement the investment objective and policies of
the MJI International Equity Portfolio (the "Portfolio") as set forth in the
Prospectuses for the Institutional Class Shares and Service Class Shares of
the Portfolio:
LENDING OF SECURITIES
The Portfolio may lend its investment securities to qualified brokers, deal-
ers, domestic and foreign banks or other financial institutions, so long as
the terms, the structure and the aggregate amount of such loans are not incon-
sistent with the Investment Company Act of 1940, as amended, (the "1940 Act")
or the Rules and Regulations or interpretations of the Securities and Exchange
Commission (the "SEC") thereunder, which currently require that (a) the bor-
rower pledge and maintain with the Portfolio collateral consisting of cash, an
irrevocable letter of credit issued by a domestic U.S. bank or securities is-
sued or guaranteed by the United States Government having a value at all times
not less than 100% of the value of the securities loaned, (b) the borrower add
to such collateral whenever the price of the securities loaned rises (i.e.,
the borrower "marks to the market" on a daily basis), (c) the loan be made
subject to termination by the Portfolio at any time, and (d) the Portfolio re-
ceives reasonable interest on the loan (which may include the Portfolio in-
vesting any cash collateral in interest bearing short-term investments). As
with other extensions of credit, there are risks of delay in recovery or even
loss of rights in the securities loaned if the borrower of the securities
fails financially. These risks are similar to the ones involved with repur-
chase agreements as discussed in the Prospectus.
HEDGING STRATEGIES
The Portfolio may engage in various portfolio strategies to hedge against
adverse movements in the equity, debt and currency markets. The Portfolio may
buy or sell futures contracts, write (i.e., sell) covered call options on its
portfolio securities, purchase put and call options on securities and engage
in transactions in stock index options and stock index futures, and related
options on such futures. The Portfolio may also enter into forward foreign
currency exchange contracts to hedge against its foreign currency movements.
These portfolio strategies are commonly referred to as derivative investments.
Each of these portfolio strategies is described below. Although certain risks
are involved in options and futures transactions, the Adviser believes that,
because the Portfolio will engage in options and futures transactions only for
hedging purposes, the options and futures portfolio strategies of the Portfo-
lio will not subject it to the risks frequently associated with the specula-
tive use of options and futures transactions. While the Portfolio's use of
hedging strategies is intended to reduce the volatility of the net asset value
of the Portfolio shares, the Portfolio's net asset value will fluctuate. There
can be no assurance that the Portfolio's hedging transactions will be effec-
tive. Also, the Port-
2
<PAGE>
folio may not necessarily be engaging in hedging activities when movements in
any particular equity, debt or currency market occur.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
The U.S. dollar value of the assets of the Portfolio may be affected favor-
ably or unfavorably by changes in foreign currency exchange rates and exchange
control regulations, and the Portfolio may incur costs in connection with con-
versions between various currencies. The Portfolio will conduct its foreign
currency exchange transactions either on a spot (i.e., cash) basis at the spot
rate prevailing in the foreign currency exchange market, or through entering
into forward contracts to purchase or sell foreign currencies. A forward for-
eign currency exchange contract involves an obligation to purchase or sell a
specific currency at a future date, which may be any fixed number of days from
the date of the contract agreed upon by the parties, at a price set at the
time of the contract. These contracts are traded in the interbank market and
are conducted directly between currency traders (usually large commercial
banks) and their customers. A forward contract generally has no deposit re-
quirement, and no commissions are charged at any stage for such trades.
The Portfolio may enter into forward foreign currency exchange contracts in
several circumstances. When the Portfolio enters into a contract for the pur-
chase or sale of a security denominated in a foreign currency, or when the
Portfolio anticipates the receipt in a foreign currency of dividends or inter-
est payments on a security which it holds, the Portfolio may desire to "lock-
in" the U.S. dollar price of the security or the U.S. dollar equivalent of
such dividend or interest payment, as the case may be. By entering into a for-
ward contract for a fixed amount of dollars, for the purchase or sale of the
amount of foreign currency involved in the underlying transactions, the Port-
folio will be able to protect itself against a possible loss resulting from an
adverse change in the relationship between the U.S. dollar and the subject
foreign currency during the period between the date on which the security is
purchased or sold, or on which the dividend or interest payment is declared,
and the date on which such payments are made or received.
Additionally, when the Portfolio anticipates that the currency of a particu-
lar foreign country may suffer a substantial decline against the U.S. dollar,
it may enter into a forward contract for a fixed amount of dollars to sell the
amount of foreign currency approximating the value of some or all of the Port-
folio's securities denominated in such foreign currency. The precise matching
of the forward contract amounts and the value of the securities involved gen-
erally will not be possible since the future value of securities in foreign
currencies will change as a consequence of market movements in the value of
these securities between the date on which the forward contract is entered
into and the date it matures. The projection of short-term currency market
movement is extremely difficult and the successful execution of a short-term
hedging strategy is highly uncertain. The Portfolio does not intend to enter
into such forward contracts to protect the value of portfolio
3
<PAGE>
securities on a regular or continuous basis. The Portfolio will not enter into
such forward contracts or maintain a net exposure to such contracts where the
consummation of the contracts would obligate the Portfolio to deliver an
amount of foreign currency in excess of the value of the Portfolio's securi-
ties or other assets denominated in that currency.
Under normal circumstances, consideration of the prospect for currency pari-
ties will be incorporated into the long-term investment decisions made with
regard to overall diversification strategies. However, the management of the
Fund believes that it is important to have the flexibility to enter into such
forward contracts when it determines that the best interests of the perfor-
mance of the Portfolio will thereby be served. The Fund's Custodian will place
cash, U.S. government securities, high-grade liquid debt or equity securities
into a segregated account in an amount equal to the value of the Portfolio's
total assets committed to the consummation of forward foreign currency ex-
change contracts. If the value of the securities placed in the segregated ac-
count declines, additional cash or securities will be placed in the account on
a daily basis so that the value of the account will be equal to the amount of
the Portfolio's commitments with respect to such contracts.
The Portfolio generally will not enter into a forward contract with a term
of greater than one year. At the maturity of a forward contract, the Portfolio
may either sell the portfolio security and make delivery of the foreign cur-
rency, or it may retain the security and terminate its contractual obligation
to deliver the foreign currency by purchasing an "offsetting" contract with
the same currency trader obligating it to purchase, on the same maturity date,
the same amount of the foreign currency.
It is impossible to forecast with absolute precision the market value of a
particular portfolio security at the expiration of the contract. Accordingly,
it may be necessary for the Portfolio to purchase additional foreign currency
on the spot market (and bear the expense of such purchase) if the market value
of the security is less than the amount of foreign currency that the Portfolio
is obligated to deliver and if a decision is made to sell the security and
make delivery of the foreign currency.
If the Portfolio retains the portfolio security and engages in an offsetting
transaction, the Portfolio will incur a gain or loss (as described below) to
the extent that there has been movement in forward contract prices. Should
forward prices decline during the period between the Portfolio entering into a
forward contract for the sale of a foreign currency and the date it enters
into an offsetting contract for the purchase of the foreign currency, the
Portfolio will realize a gain to the extent that the price of the currency it
has agreed to sell exceeds the price of the currency it has agreed to pur-
chase. Should forward prices increase, the Portfolio would suffer a loss to
the extent that the price of the currency it has agreed to purchase exceeds
the price of the currency it has agreed to sell.
4
<PAGE>
The Portfolio's dealings in forward foreign currency exchange contracts will
be limited to the transactions described above. Of course, the Portfolio is
not required to enter into such transactions with regard to their foreign cur-
rency-denominated securities. It also should be realized that this method of
protecting the value of portfolio securities against a decline in the value of
a currency does not eliminate fluctuations in the underlying prices of the se-
curities. It simply establishes a rate of exchange which one can achieve at
some future point in time. Additionally, although such contracts tend to mini-
mize the risk of loss due to a decline in the value of the hedged currency, at
the same time, they tend to limit any potential gain which might result should
the value of such currency increase.
FUTURES CONTRACTS
The Portfolio may enter into futures contracts for the purposes of hedging,
remaining fully invested and reducing transactions costs. Futures contracts
provide for the future sale by one party and purchase by another party of a
specified amount of a specific security at a specified future time and at a
specified price. Futures contracts which are standardized as to maturity date
and underlying financial instrument are traded on national futures exchanges.
Futures exchanges and trading are regulated under the Commodity Exchange Act
by the Commodity Futures Trading Commission ("CFTC"), a U.S. Government agen-
cy.
Although futures contracts by their terms call for actual delivery or ac-
ceptance of the underlying securities, in most cases the contracts are closed
out before the settlement date without the making or taking of delivery. Clos-
ing out an open futures position is done by taking an opposite position ("buy-
ing" a contract which has previously been "sold" or "selling" a contract pre-
viously "purchased") in an identical contract to terminate the position. Bro-
kerage commissions are incurred when a futures contract is bought or sold.
Futures traders are required to make a good faith margin deposit in cash or
acceptable securities with a broker or custodian to initiate and maintain open
positions in futures contracts. A margin deposit is intended to assure comple-
tion of the contract (delivery or acceptance of the underlying security) if it
is not terminated prior to the specified delivery date. Minimal initial margin
requirements are established by the futures exchange and may be changed. Bro-
kers may establish deposit requirements which are higher than the exchange
minimums. Generally, margin deposits are structured as percentages (e.g., 5%)
of the market value of the contracts being traded. After a futures contract
position is opened, the value of the contract is marked to market daily. If
the futures contract price changes to the extent that the margin on deposit
does not satisfy margin requirements, payment of additional "variation" margin
will be required. Conversely, change in the contract value may reduce the re-
quired margin, resulting in a repayment of excess margin to the contract hold-
er. Variation margin payments are made to and from the futures
5
<PAGE>
broker for as long as the contract remains open. The Portfolio expects to earn
interest income on its margin deposits.
Traders in futures contracts may be broadly classified as either "hedgers"
or "speculators". Hedgers use the futures markets primarily to offset unfavor-
able changes in the value of securities otherwise held for investment purposes
or expected to be acquired by them. Speculators are less inclined to own the
securities underlying the futures contracts which they trade and use futures
contracts with the expectation of realizing profits from a fluctuation in in-
terest rates. The Portfolio intends to use futures contracts only for hedging
purposes.
Regulations of the CFTC applicable to the Fund require that all of its
futures transactions constitute bona fide straddles or that the Fund's commod-
ity futures and option positions be for other purposes, to the extent that the
aggregate initial margins and premiums required to establish such non-hedging
positions do not exceed five percent of the liquidation value of the Portfo-
lio. The Portfolio will only sell futures contracts to protect securities it
owns against price declines or purchase contracts to protect against an in-
crease in the price of securities it intends to purchase. As evidence of this
hedging interest, the Portfolio expects that approximately 75% of its futures
contracts purchases will be "completed", that is, equivalent amounts of re-
lated securities will have been purchased or will be purchased by the Portfo-
lio on the settlement date of the futures contracts.
Although techniques other than the sale and purchase of futures contracts
could be used to control the Portfolio's exposure to market fluctuations, the
use of futures contracts may be a more effective means of hedging this expo-
sure. While the Portfolio will incur commission expenses in both opening and
closing out futures positions, these costs are lower than transaction costs
incurred in the purchase and sale of the underlying securities.
RESTRICTIONS ON THE USE OF FUTURES CONTRACTS
The Portfolio will not enter into futures contract transactions to the ex-
tent that, immediately thereafter, the sum of its initial margin deposits on
open contracts exceeds 5% of the market value of its total assets. In addi-
tion, the Portfolio will not enter into futures contracts to the extent that
its outstanding obligations to purchase securities under these contracts would
exceed 20% of its total assets.
RISK FACTORS IN FUTURES TRANSACTIONS
The Portfolio will minimize the risk that it will be unable to close out a
futures position by only entering into futures which are traded on national
futures exchanges and for which there appears to be a liquid secondary market.
However, there can be no assurance that a liquid secondary market will exist
for any particular futures contract at any specific time. Thus, it may not be
possible to close a futures position. In the event of adverse price movements,
the Portfolio would continue to be required to make daily cash payments to
maintain its required
6
<PAGE>
margin. In such situations, if the Portfolio has insufficient cash, it may
have to sell securities to meet daily margin requirements at a time when it
may be disadvantageous to do so. In addition, the Portfolio may be required to
make delivery of the instruments underlying futures contracts it holds. The
inability to close futures positions also could have an adverse impact on the
Portfolio's ability to effectively hedge.
The risk of loss in trading futures contracts in some strategies can be sub-
stantial due both to the low margin deposits required and the extremely high
degree of leverage involved in futures pricing. As a result, a relatively
small price movement in a futures contract may result in immediate and sub-
stantial loss (as well as gain) to the investor. For example, if at the time
of purchase, 10% of the value of the futures contract is deposited as margin,
a subsequent 10% decrease in the value of the futures contract would result in
a total loss of the margin deposit, before any deduction for the transaction
costs, if the account were then closed out. A 15% decrease would result in a
loss equal to 150% of the original margin deposit if the contract were closed
out. Thus, a purchase or sale of a futures contract may result in excess of
the amount invested in the contract. However, because the futures strategies
of the Portfolio are engaged in only for hedging purposes, the Adviser does
not believe that the Portfolio is subject to the risks of loss frequently as-
sociated with futures transactions. The Portfolio would presumably have sus-
tained comparable losses if, instead of the futures contract, it had invested
in the underlying financial instrument and sold it after the decline.
Utilization of futures transactions by the Portfolio does involve the risk
of imperfect or no correlation where the securities underlying the futures
contracts have different maturities than the portfolio securities being
hedged. It is also possible that the Portfolio could lose money on futures
contracts and also experience a decline in value of portfolio securities.
There is also the risk of loss by the Portfolio of margin deposits in the
event of bankruptcy of a broker with whom the Portfolio has an open position
in a futures contract or related option.
Most futures exchanges limit the amount of fluctuation permitted in futures
contract prices during a single trading day. The daily limit establishes the
maximum amount that the price of a futures contract may vary either up or down
from the previous day's settlement price at the end of a trading session. Once
the daily limit has been reached in a particular type of contract, no trades
may be made on that day at a price beyond that limit. The daily limit governs
only price movement during a particular trading day and, therefore, does not
limit potential losses because the limit may prevent the liquidation of unfa-
vorable positions. Futures contract prices have occasionally moved to the
daily limit for several consecutive trading days, with little or no trading,
thereby preventing prompt liquidation of futures positions and subjecting some
futures traders to substantial losses.
7
<PAGE>
OPTIONS
The Portfolio may purchase and sell put and call options on securities and
futures contracts for hedging purposes. Investments in options involve some of
the same considerations that are involved in connection with investments in
futures contracts (e.g., the existence of a liquid secondary market). In addi-
tion, the purchase of an option also entails the risk that changes in the
value of the underlying security or contract will not be fully reflected in
the value of the option purchased. Depending on the pricing of the option com-
pared to either the futures contract on which it is based or the price of the
securities being hedged, an option may or may not be less risky than ownership
of the futures contract or such securities. For example, there are significant
differences between the securities, futures and options markets that could re-
sult in an imperfect correlation between these markets, causing a given trans-
action not to achieve its objective. A decision as to whether, when, and how
to use options involves the exercise of skill and judgment by the Adviser, and
even a well-conceived transaction may be unsuccessful because of market behav-
ior or unexpected events.
WRITING COVERED CALL OPTIONS
The principal reason for writing call options is to attempt to realize,
through the receipt of premiums, a greater return than would be realized on
securities alone. By writing covered call options, the Portfolio gives up the
opportunity, while the option is in effect, to profit from any price increase
in the underlying security above the option exercise price. In addition, the
Portfolio's ability to sell the underlying security will be limited while the
option is in effect unless the Portfolio effects a closing purchase transac-
tion. A closing purchase transaction cancels out the Portfolio's position as
the writer of an option by means of an offsetting purchase of an identical op-
tion prior to the expiration of the option it has written. Covered call op-
tions serve as a partial hedge against the price of the underlying security
declining. The Portfolio writes only covered options, which means that so long
as the Portfolio is obligated as the writer of the option it will, in a segre-
gated account with its custodian, maintain cash, U.S. government securities or
high grade liquid debt or equity securities denominated in U.S. dollars with a
value equal to or greater than the exercise price of the underlying securi-
ties.
PURCHASING OPTIONS
The amount of any appreciation in the value of the underlying security sub-
ject to a put will be partially offset by the amount of the premium paid for
the put option and any related transaction costs. Prior to its expiration, a
put option may be sold in a closing sale transaction and profit or loss from a
sale will depend on whether the amount received is more or less than the pre-
mium paid for the put option plus the related transaction costs. A closing
sale transaction cancels out the Portfolio's position as purchaser of an op-
tion by means of an offsetting sale of an identical option prior to the expi-
ration of the option it has purchased. In certain
8
<PAGE>
circumstances, the Portfolio may purchase call options on securities held in
its investment portfolio on which it has written call options or on securities
which it intends to purchase.
OPTIONS ON FOREIGN CURRENCIES
The Portfolio may purchase and write options on foreign currencies for hedg-
ing purposes in a manner similar to that in which futures contracts on foreign
currencies, or forward contracts, will be utilized. For example, a decline in
the dollar value of a foreign currency in which portfolio securities are de-
nominated will reduce the dollar value of such securities, even if their value
in the foreign currency remains constant. In order to protect against such
diminutions in the value of portfolio securities, the Portfolio may purchase
put options on the foreign currency. If the value of the currency does de-
cline, the Portfolio will have the right to sell such currency for a fixed
amount in dollars and will thereby offset, in whole or in part, the adverse
effect on its portfolio which otherwise would have resulted.
Conversely, where a rise in the dollar value of a currency in which securi-
ties to be acquired are denominated is projected, thereby increasing the cost
of such securities, the Portfolio may purchase call options thereon. The pur-
chase of such options could offset, at least partially, the effects of the ad-
verse movements in exchange rates. As in the case of other types of options,
however, the benefit to the Portfolio deriving from purchases of foreign cur-
rency options will be reduced by the amount of the premium and related trans-
action costs. In addition, where currency exchange rates do not move in the
direction or to the extent anticipated, the Portfolio could sustain losses on
transactions in foreign currency options which would require it to forego a
portion or all of the benefits of advantageous changes in such rates.
The Portfolio may write options on foreign currencies for the same types of
hedging purposes. For example, where the Portfolio anticipates a decline in
the dollar value of foreign currency denominated securities due to adverse
fluctuations in exchange rates it could, instead of purchasing a put option,
write a call option on the relevant currency. If the anticipated decline oc-
curs, the option will most likely not be exercised, and the diminution in
value of portfolio securities will be offset by the amount of the premium re-
ceived.
Similarly, instead of purchasing a call option to hedge against an antici-
pated increase in the dollar cost of securities to be acquired, the Portfolio
could write a put option on the relevant currency which, if rates move in the
manner projected, will expire unexercised and allow the Portfolio to hedge
such increased cost up to the amount of the premium. As in the case of other
types of options, however, the writing of a foreign currency option will con-
stitute only a partial hedge up to the amount of the premium, and only if
rates move in the expected direction. If this does not occur, the option may
be exercised and the Portfolio would be required to purchase or sell the un-
derlying currency at a loss which may not be offset by the
9
<PAGE>
amount of the premium. Through the writing of options on foreign currencies,
the Portfolio also may be required to forego all or a portion of the benefits
which might otherwise have been obtained from favorable movements in exchange
rates.
The Portfolio intends to write covered call options on foreign currencies. A
call option written on a foreign currency by the Portfolio is "covered" if the
Portfolio owns the underlying foreign currency covered by the call or has an
absolute and immediate right to acquire that foreign currency without addi-
tional cash consideration (or for additional cash consideration held in a seg-
regated account by the Custodian) upon conversion or exchange of other foreign
currency held in its portfolio. A call option is also covered if the Portfolio
has a call on the same foreign currency and in the same principal amount as
the call written where the exercise price of the call held (a) is equal to or
less than the exercise price of the call written or (b) is greater than the
exercise price of the call written if the difference is maintained by the
Portfolio in cash, U.S. government securities, high grade liquid debt or eq-
uity securities in a segregated account with the Custodian.
The Portfolio also intends to write call options on foreign currencies that
are not covered for cross-hedging purposes. A call option on a foreign cur-
rency is for cross-hedging purposes if it is not covered but is designed to
provide a hedge against a decline in the U.S. dollar value of a security which
the Portfolio owns or has the right to acquire and which is denominated in the
currency underlying the option due to an adverse change in the exchange rate.
In such circumstances, the Portfolio will collateralize the option by main-
taining in a segregated account with the Custodian, cash or U.S. government
securities or other high grade liquid debt or equity securities in an amount
not less than the value of the underlying foreign currency in U.S. dollars
marked to market daily.
RISKS OF OPTIONS ON FUTURES CONTRACTS, FORWARD CONTRACTS AND OPTIONS ON
FOREIGN CURRENCIES
Options on foreign currencies and forward contracts are not traded on con-
tract markets regulated by the CFTC or (with the exception of certain foreign
currency options) by the Commission. To the contrary, such instruments are
traded through financial institutions acting as market-makers, although for-
eign currency options are also traded on certain national securities ex-
changes, such as the Philadelphia Stock Exchange and the Chicago Board Options
Exchange, subject to the regulation of the Commission. Similarly, options on
currencies may be traded over-the-counter. In an over-the-counter trading en-
vironment, many of the protections afforded to exchange participants will not
be available. For example, there are no daily price fluctuation limits, and
adverse market movements could therefore continue to an unlimited extent over
a period of time. Although the purchase of an option cannot lose more than the
amount of the premium plus related transaction costs, this entire amount could
be lost. Moreover, the option writer and a trader of forward contracts could
lose amounts substantially in excess of their initial invest-
10
<PAGE>
ments, due to the margin and collateral requirements associated with such po-
sitions.
Options on foreign currencies traded on national securities exchanges are
within the jurisdiction of the Commission, as are other securities traded on
such exchanges. As a result, many of the protections provided to traders on
organized exchanges will be available with respect to such transactions. In
particular, all foreign currency option positions entered into on a national
securities exchange are cleared and guaranteed by the Options Clearing Corpo-
ration ("OCC"), thereby reducing the risk of counterparty default. Further-
more, a liquid secondary market in options traded on a national securities ex-
change may be more readily available than in the over-the-counter market, po-
tentially permitting the Portfolio to liquidate open positions at a profit
prior to exercise or expiration, or to limit losses in the event of adverse
market movements.
The purchase and sale of exchange-traded foreign currency options, however,
is subject to the risks of the availability of a liquid secondary market de-
scribed above, as well as the risks regarding adverse market movements, mar-
gining of options written, the nature of the foreign currency market, possible
intervention by governmental authorities and the effect of other political and
economic events. In addition, exchange-traded options of foreign currencies
involve certain risks not presented by the over-the-counter market. For exam-
ple, exercise and settlement of such options must be made exclusively through
the OCC, which has established banking relationships in applicable foreign
countries for this purpose. As a result, the OCC may, if it determines that
foreign governmental restrictions or taxes would prevent the orderly settle-
ment of foreign currency option exercises, or would result in undue burdens on
the OCC or its clearing member, impose special procedures on exercise and set-
tlement, such as technical changes in the mechanics of delivery of currency,
the fixing of dollar settlement prices or prohibitions, on exercise.
In addition, futures contracts, options on futures contracts, forward con-
tracts and options of foreign currencies may be traded on foreign exchanges.
Such transactions are subject to the risk of governmental actions affecting
trading in, or the prices of, foreign currencies or securities. The value of
such positions also could be adversely affected by (i) other complex foreign
political and economic factors, (ii) lesser availability than in the United
States of data on which to make a trading decision, (iii) delays in the Port-
folio's ability to act upon economic events occurring in foreign markets dur-
ing non-business hours in the United States, (iv) the imposition of different
exercise and settlement terms and procedures and margin requirements than in
the United States, and (v) lesser trading volume.
INTEREST RATE SWAP TRANSACTIONS
The Portfolio may enter into swap contracts which are also commonly referred
to as derivative investments. A swap is an agreement to exchange the return
generated by one instrument for the return generated by another instrument.
The payment
11
<PAGE>
streams are calculated by reference to a specific index and agreed upon
notional amount. The term "specified index" includes fixed interest rates, to-
tal return on interest rate indices and fixed income indices, (as well as
amounts derived from arithmetic operations on these indices). For example, the
Portfolio may agree to swap the return generated by a fixed-income index for
the return generated by a second fixed-income index.
The Portfolio will usually enter into swaps on a net basis, i.e., the two
payment streams are netted out in a cash settlement on the payment date or
dates specified in the instrument, with the Portfolio receiving or paying, as
the case may be, only the net amount of the two payments. The Portfolio's ob-
ligations under a swap agreement will be accrued daily (offsetting against any
amounts owing to the Portfolio) and any accrued but unpaid net amounts owed to
a swap counterparty will be covered by the maintenance of a segregated account
consisting of cash, U.S. government securities, or high grade debt obliga-
tions, to avoid any potential leveraging of the Portfolio. Since swaps will be
entered into for good faith hedging purposes, the Adviser and the Fund believe
such obligations do not constitute "senior securities" under the 1940 Act and,
accordingly, will not treat them as being subject to its borrowing restric-
tions.
Interest rate swaps do not involve the delivery of securities, other under-
lying assets, or principal. Accordingly, the risk of loss with respect to in-
terest rate swaps is limited to the net amount of interest payments that the
Portfolio is contractually obligated to make. If the other party to the inter-
est rate swap defaults, the Portfolio's risk of loss consists of the net
amount of interest payments that the Portfolio is contractually entitled to
receive. If there is a default by the counterparty, the Portfolio may have
contractual remedies pursuant to the agreements related to the transaction.
The swap market has grown substantially in recent years with a large number of
banks and investment banking firms acting both as principals and as agents
utilizing standardized swap documentation. As a result, the swap market has
become relatively liquid.
PURCHASE OF SHARES
Both classes of shares of the Portfolios may be purchased without sales com-
mission at the net asset value per share next determined after an order is re-
ceived in proper form by the Fund, and payment is received by the Fund's cus-
todian. The minimum initial investment for the Portfolio is $2,500. Certain
exceptions to the minimums may be determined from time to time by the Officers
of the Fund. The initial investment minimum for IRA accounts is $500. The ini-
tial investment minimum for spousal IRA accounts is $250. The minimum for any
subsequent investment is $100. An order received in proper form prior to the
4:00 p.m. close of the New York Stock Exchange (the "Exchange") will be exe-
cuted at the price computed on the date of receipt; and an order received not
in proper form or after the
12
<PAGE>
4:00 p.m. close of the Exchange will be executed at the price computed on the
next day the Exchange is open after proper receipt. The Exchange will be
closed on the following days: Presidents' Day, February 17, 1997; Good Friday,
March 28, 1997; Memorial Day, May 26, 1997; Independence Day, July 4, 1997;
Labor Day, September 3, 1997; Thanksgiving Day, November 27, 1997; Christmas
Day, December 25, 1997; and New Year's Day, January 1, 1998.
The Portfolio reserves the right in its sole discretion (1) to suspend the
offering of its shares, (2) to reject purchase orders when in the judgment of
management such rejection is in the best interests of the Fund, and (3) to re-
duce or waive the minimum for initial and subsequent investment for certain
fiduciary accounts such as employee benefit plans or under circumstances where
certain economies can be achieved in sales of the Portfolio's shares.
The Adviser may compensate affiliated broker-dealer subsidiaries of United
Asset Management Corporation, out of its profits, for referring investors to
the Portfolio and, in certain instances, furnishing information liaison serv-
ices with respect to such investors. Such compensation would be based upon the
advisory fees payable (without regard to any expense limitation in effect at
the time) in respect of assets attributable to the referral. If liaison serv-
ices are included, the rate would be up to 25% in the first year and up to 15%
each year thereafter; otherwise, the rate would be up to 30% in the first
year, 20% for the second year and 10% for each remaining year up to a total of
5 years.
REDEMPTION OF SHARES
The Portfolio may suspend redemption privileges or postpone the date of pay-
ment (1) during any period that either the Exchange or custodian bank are
closed or trading on the Exchange is restricted as determined by the Commis-
sion, (2) during any period when an emergency exists as defined by the rules
of the Commission as a result of which it is not reasonably practicable for a
Portfolio to dispose of securities owned by it or to fairly determine the
value of its assets, and (3) for such other periods as the Commission may per-
mit. The Fund has made an election with the Commission to pay in cash all re-
demptions requested by any shareholder of record limited in amount during any
90-day period to the lesser of $250,000 or 1% of the net assets of the Fund at
the beginning of such period. Such commitment is irrevocable without the prior
approval of the Commission. Redemptions in excess of the above limits may be
paid, in whole or in part, in investment securities or in cash as the Board of
Trustees may deem advisable; however, payment will be made wholly in cash un-
less the Trustees believe that economic or market conditions exist which would
make such a practice detrimental to the best interests of the Fund. If redemp-
tions are paid in investment securities, such securities will be valued as set
forth in the Prospectus under "HOW SHARE PRICES
13
<PAGE>
ARE DETERMINED", and a redeeming shareholder would normally incur brokerage
expenses if those securities were converted to cash.
No charge is made by the Portfolio for redemptions. Any redemption may be
more or less than the shareholder's initial cost depending on the market value
of the securities held by the Portfolio.
SIGNATURE GUARANTEES
To protect your account, the Fund and Chase Global Funds Services Company
(the "Sub-Administrator") from fraud, signature guarantees are required for
certain redemptions. Signature guarantees are required for (1) redemptions
where the proceeds are to be sent to someone other than the registered
shareowner(s) or the registered address or (2) share transfer requests. The
purpose of signature guarantees is to verify the identity of the party who has
authorized a redemption.
Signatures must be guaranteed by an "eligible guarantor institution" as de-
fined in Rule 17Ad-15 under the Securities Exchange Act of 1934. Eligible
guarantor institutions include banks, brokers, dealers, credit unions, na-
tional securities exchanges, registered securities associations, clearing
agencies and savings associations. A complete definition of eligible guarantor
institution is available from the Sub- Administrator. Broker-dealers guaran-
teeing signatures must be a member of a clearing corporation or maintain net
capital of at least $100,000. Credit unions must be authorized to issue signa-
ture guarantees. Signature guarantees will be accepted from any eligible guar-
antor institution which participates in a signature guarantee program.
The signature guarantee must appear either: (1) on the written request for
redemption; (2) on a separate instrument for assignment ("stock power") which
should specify the total number of shares to be redeemed; or (3) on all stock
certificates tendered for redemption and, if shares held by the Fund are also
being redeemed, on the letter or stock power.
SHAREHOLDER SERVICES
The following supplements the information set forth in the Portfolio's Pro-
spectus under the heading "BUYING, SELLING AND EXCHANGING SHARES":
EXCHANGE PRIVILEGE
Institutional Class Shares of the MJI International Equity Portfolio may be
exchanged for any other Institutional Class Shares of a Portfolio included in
the UAM Funds which is comprised of the Fund and UAM Funds, Inc. (See the list
of Portfolios of the UAM Funds -- Institutional Class Shares at the end of the
MJI International Equity Portfolio Institutional Class Shares Prospectus).
Service Class Shares of the MJI International Equity Portfolio may be ex-
changed for any other Service Class Shares of a Portfolio included in the UAM
Funds. (For those Portfolios currently offering Service Class Shares, please
call the UAM Funds Service Center). Exchange requests should be made by call-
ing the Fund (1-800-638-7983)
14
<PAGE>
or by writing to UAM Funds Trust, UAM Funds Service Center, c/o Chase Global
Funds Services Company, P.O. Box 2798, Boston, MA 02208-2798. The exchange
privilege is only available with respect to Portfolios that are qualified for
sale in the shareholder's state of residence.
Any such exchange will be based on the respective net asset values of the
shares involved. There is no sales commission or charge of any kind. Before
making an exchange into a Portfolio, a shareholder should read its Prospectus
and consider the investment objective of the Portfolio to be purchased. You
may obtain a Prospectus for the Portfolio(s) you are interested in by calling
the UAM Funds Service Center at 1-800-638-7983.
Exchange requests may be made either by mail or telephone. Telephone ex-
changes will be accepted only if the certificates for the shares to be ex-
changed are held by the Fund for the account of the shareholder and the regis-
tration of the two accounts will be identical. Requests for exchanges received
prior to 4:00 p.m. (Eastern Time) will be processed as of the close of busi-
ness on the same day. Requests received after this time will be processed on
the next business day. Neither the Fund nor the Sub-Administrator will be re-
sponsible for the authenticity of the exchange instructions received by tele-
phone. Exchanges may also be subject to limitations as to amounts or frequency
and to other restrictions established by the Fund's Board of Trustees to as-
sure that such exchanges do not disadvantage the Fund and its shareholders.
For Federal income tax purposes an exchange between Funds is a taxable
event, and, accordingly, a capital gain or loss may be realized. In a revenue
ruling relating to circumstances similar to the Fund's, an exchange between
series of a Fund was also deemed to be a taxable event. It is likely, there-
fore, that a capital gain or loss would be realized on an exchange between
Portfolios. You may want to consult your tax adviser for further information
in this regard. The exchange privilege may be modified or terminated at any
time.
TRANSFER OF SHARES
Shareholders may transfer shares of the Portfolio to another person by mak-
ing a written request to the Fund. The request should clearly identify the ac-
count and number of shares to be transferred, and include the signature of all
registered owners and all stock certificates, if any, which are subject to the
transfer. The signature on the letter of request, the stock certificate or any
stock power must be guaranteed in the same manner as described under "REDEMP-
TION OF SHARES." As in the case of redemptions, the written request must be
received in good order before any transfer can be made.
15
<PAGE>
INVESTMENT LIMITATIONS
The following limitations supplement those set forth in each Prospectus of
the Portfolio. Whenever an investment limitation sets forth a percentage limi-
tation on investment or utilization of assets, such limitation shall be deter-
mined immediately after and as a result of the Portfolio's acquisition of such
security or other asset. Accordingly, any later increase or decrease resulting
from a change in values, net assets or other circumstances will not be consid-
ered when determining whether the investment complies with the Portfolio's in-
vestment limitations. Investment limitations (1), (2), (3), (4) and (6) are
classified as fundamental. The Portfolio's fundamental investment limitations
cannot be changed without approval by a "majority of the outstanding shares"
(as defined in the 1940 Act) of the Portfolio. The Portfolio will not:
(1) invest in physical commodities or contracts on physical commodities;
(2) purchase or sell real estate or real estate limited partnerships, al-
though it may purchase and sell securities of companies which deal in
real estate and may purchase and sell securities which are secured by
interests in real estate;
(3) make loans except (i) by purchasing debt securities in accordance with
its investment objectives and (ii) by lending its portfolio securities
to banks, brokers, dealers and other financial institutions so long as
such loans are not inconsistent with the 1940 Act, or the rules and
regulations or interpretations of the Commission thereunder;
(4) underwrite the securities of other issuers;
(5) invest in stock or bond futures and/or options on futures unless (i)
not more than 5% of the Portfolio's assets are required as deposit to
secure obligations under such futures and/or options on futures con-
tracts provided, however, that in the case of an option that is in-
the-money at the time of purchase, the in-the-money amount may be ex-
cluded in computing such 5% and (ii) not more than 20% of the Portfo-
lio's assets are invested in stock or bond futures and options;
(6) issue senior securities, as defined in the 1940 Act, except that this
restriction shall not be deemed to prohibit the Portfolio from (i)
making any permitted borrowings, mortgages or pledges, or (ii) enter-
ing into options, futures or repurchase transactions;
(7) purchase on margin or sell short except as specified in (5) above;
(8) invest more than an aggregate of 15% of the net assets of the Portfo-
lio, determined at the time of investment, in securities subject to
legal or contractual restrictions on resale or securities for which
there are no readily available markets; and
(9) invest for the purpose of exercising control over management of any
company.
16
<PAGE>
MANAGEMENT OF THE FUND
TRUSTEES AND OFFICERS
The Officers of the Fund manage its day-to-day operations and are responsi-
ble to the Fund's Board of Trustees. The Trustees set broad policies for the
Fund and elect its Officers. The following is a list of the Trustees and Offi-
cers of the Fund and a brief statement of their present positions and princi-
pal occupations during the past five years.
<TABLE>
<S> <C>
JOHN T. BENNETT, JR. College Trustee of the Fund; President of Squam In-
Road -- RFD 3 Meredith, NH 03253 vestment Management Company, Inc. and Great
Age 67 Island Investment Company, Inc.; President
of Bennett Management Company from 1988 to
1993.
PHILIP D. ENGLISH Trustee of the Fund; President and Chief
16 West Madison Street Baltimore, Executive Officer of Broventure Company,
MD 21201 Inc.; Chairman of the Board of Chektec Cor-
Age 48 poration and Cyber Scientific, Inc.
WILLIAM A. HUMENUK 4000 Bell Trustee of the Fund; Partner in the Phila-
Atlantic Tower 1717 Arch Street delphia office of the law firm Dechert
Philadelphia, PA 19103 Age 54 Price & Rhoads; Director, Hofler Corp.
NORTON H. REAMER* Trustee, President and Chairman of the
One International Place Fund; President, Chief Executive Officer
Boston, MA 02110 and a Director of United Asset Management
Age 60 Corporation; Director, Partner or Trustee
of each of the Investment Companies of the
Eaton Vance Group of Mutual Funds.
PETER M. WHITMAN, JR.* One Trustee of the Fund; President and Chief
Financial Center Boston, MA 02111 Investment Officer of Dewey Square Invest-
Age 53 ors Corporation ("DSI") since 1988; Direc-
tor and Chief Executive Officer of H. T.
Investors, Inc., formerly a subsidiary of
DSI.
WILLIAM H. PARK* Vice President of the Fund; Executive Vice
One International Place President and Chief Financial Officer of
Boston, MA 02110 United Asset Management Corporation.
Age 49
</TABLE>
- -----------
* These people are deemed to be "interested persons" of the Fund as that term
is defined in the 1940 Act.
17
<PAGE>
<TABLE>
<S> <C>
GARY L. FRENCH* Treasurer of the Fund; President of UAM
211 Congress Street Fund Services, Inc., and UAM Fund Distribu-
Boston, MA 02110 tors, Inc.; formerly Vice President of Op-
Age 45 erations, Development and Control of Fidel-
ity Investment in 1995; Treasurer of the
Fidelity Group of Mutual Funds from 1991 to
February 1995.
MICHAEL E. DEFAO* Secretary of the Fund: Vice President and
211 Congress Street General Counsel of UAM Fund Services, Inc.
Boston, MA 02110 and UAM Fund Distributors, Inc.: Associate
Age 28 Attorney of Ropes & Gray (a law firm) from
1993 to February 1995.
ROBERT R. FLAHERTY* Assistant Treasurer of the Fund; Vice Pres-
211 Congress Street ident of UAM Fund Services, Inc.; formerly
Boston, MA 02110 Manager of Fund Administration and Compli-
Age 32 ance of the Chase Global Fund Services Com-
pany from 1995 to 1996, Deloitte & Touche
LLP from 1985 to 1995, Senior Manager.
KARL O. HARTMANN* Assistant Secretary of the Fund; Senior
73 Tremont Street Vice President and General Counsel of Chase
Boston, MA 02108 Global Funds Services Company; Senior Vice
Age 41 President, Secretary and General Counsel of
Leland, O'Brien, Rubinstein Associates,
Inc., from November 1990 to November 1991.
</TABLE>
- -----------
* These people are deemed to be "interested persons" of the Fund as that term
is defined in the 1940 Act.
18
<PAGE>
REMUNERATION OF TRUSTEES AND OFFICERS
The Fund pays each Trustee, who is not also an officer or affiliated person,
a $150 quarterly retainer fee per active Portfolio which currently amounts to
$1,050 per quarter. In addition each unaffiliated Trustee receives a $2,000
meeting fee which is aggregated for all the Trustees and allocated proportion-
ately among the Portfolios of the Fund and UAM Funds and reimbursement for
travel and other expenses incurred while attending Board meetings. Trustees
who are also officers or affiliated persons receive no remuneration for their
service as Trustees. The Fund's officers and employees are paid by either the
Adviser, United Asset Management Corporation ("UAM"), the Administrator or the
Sub-Administrator and receive no compensation from the Fund. As of December 6,
1996, the Trustees and officers of the Fund owned less than 1% of the Fund's
outstanding shares.
The following table shows aggregate compensation paid to each of the Fund's
unaffiliated Trustees by the Fund and total compensation paid by the Fund, UAM
Funds and AEW Commercial Mortgage Securities Fund, Inc. (collectively the
"Fund Complex") in the fiscal year ended April 30, 1996.
COMPENSATION TABLE
<TABLE>
<CAPTION>
(1) (2) (3) (4) (5)
PENSION OR TOTAL COMPENSATION
AGGREGATE RETIREMENT BENEFITS ESTIMATED ANNUAL FROM REGISTRANT AND
NAME OF PERSON, COMPENSATION ACCRUED AS PART OF BENEFITS UPON FUND COMPLEX
POSITION FROM REGISTRANT FUND EXPENSES RETIREMENT PAID TO TRUSTEES
--------------- --------------- ------------------- ---------------- -------------------
<S> <C> <C> <C> <C>
John T. Bennett Jr., $3,396 0 0 $29,600
Trustee................
J. Edward Day, $3,396 0 0 $29,600
Former Trustee.........
Philip D. English, $3,396 0 0 $29,600
Trustee................
William A. Humenuk, $3,396 0 0 $29,600
Trustee................
</TABLE>
PRINCIPAL HOLDERS OF SECURITIES
As of December 6, 1996, the following persons or organizations held of rec-
ord 5% or more of the shares of a Portfolio:
MJI International Equity Portfolio Institutional Class Shares: Freya Fanning
& Company, 400 Essex Street, Beverly Farms, MA, 31.2%; Hartnat & Co., F/B/O
Veco, Attn. Corp. Actions, P.O. Box 4044, Boston, MA, 14.3%*; Sisters of Mercy
Corp., 2300 Adeline Dr., Burlingame, CA 13.4%; Hartnat & Co., F/B/O Hoag Memo-
rial Hospital, P.O. Box 92800, Rochester, New York, 8.0%*; and Hartnat & Co.,
F/B/O Siliconix, P.O. Box 92800, Rochester, New York, 7.4%*.
- -----------
* Denotes shares held by a trustee or other fiduciary for which beneficial
ownership is disclaimed or presumed disclaimed.
19
<PAGE>
The persons or organizations listed above as owning 25% or more of the out-
standing shares of a Portfolio may be presumed to "control" (as that term is
defined in the 1940 Act) such Portfolio. As a result, those persons or organi-
zations could have the ability to vote a majority of the shares of the Portfo-
lio on any matter requiring the approval of shareholders of such Portfolio.
INVESTMENT ADVISER
CONTROL OF ADVISER
Murray Johnstone International Ltd., through its parent, UAM UK Holdings, is
a wholly-owned subsidiary of UAM, a holding company incorporated in Delaware
in December 1980 for the purpose of acquiring and owning firms engaged primar-
ily in institutional investment management. Since its first acquisition in Au-
gust 1983, UAM has acquired or organized approximately 45 such wholly-owned
affiliated firms (the "UAM Affiliated Firms"). UAM believes that permitting
UAM Affiliated Firms to retain control over their investment advisory deci-
sions is necessary to allow them to continue to provide investment management
services that are intended to meet the particular needs of their respective
clients.
Accordingly, after acquisition by UAM, UAM Affiliated Firms continue to op-
erate under their own firm name, with their own leadership and individual in-
vestment philosophy and approach. Each UAM Affiliated Firm manages its own
business independently on a day-to-day basis. Investment strategies employed
and securities selected by UAM Affiliated Firms are separately chosen by each
of them. Several UAM Affiliated Firms also act as investment advisers to sepa-
rate series or Portfolios of UAM Funds, a registered investment company.
PHILOSOPHY AND STYLE
The Adviser's investment philosophy is a value orientation for country, cur-
rency and stock selection. The Adviser's management structure centers around
regional research teams which are specialized by geography. The individuals
within each team are responsible for conducting research within each region as
well as identifying particular stocks for possible inclusion within portfo-
lios. On-site, fundamental research is a primary component of the evaluation
process.
REPRESENTATIVE INSTITUTIONAL CLIENTS
As of the date of this Statement of Additional Information, the Adviser's
representative institutional clients included: Ace Hardware, American Cancer
Society, Royal Caribbean Cruises, Siemens, Levitz, Nebraska Public Power, and
Franciscan Sisters.
In compiling this client list, the Adviser used objective criteria such as
account size, geographic location and client classification. The Adviser did
not use any performance based criteria. It is not known whether these clients
approve or disapprove of the Adviser or the advisory services provided.
20
<PAGE>
ADVISORY FEES
As compensation for services rendered by the Adviser under the Investment
Advisory Agreement, the Portfolio pays the Adviser an annual fee in monthly
installments, calculated by applying the following annual percentage rates to
the Portfolio's average daily net assets for the month:
<TABLE>
<S> <C>
MJI International Equity Portfolio..................................... 0.75%
</TABLE>
For the period from September 16, 1994 (date of commencement) to April 30,
1995, and for the fiscal year ended April 30, 1996, the MJI International Eq-
uity Portfolio paid advisory fees of $0 and $0. The Adviser voluntarily waived
advisory fees of $10,000 for the period ended April 30, 1995 and $54,000 for
the fiscal year ended April 30, 1996. Until further notice, the Adviser has
voluntarily agreed to waive its advisory fees and to assume as the Adviser's
own expense certain operating expenses payable by the Portfolio, if necessary,
in order to keep the Portfolio's total annual operating expenses from exceed-
ing 1.50%.
SERVICE AND DISTRIBUTION PLANS
As stated in the Portfolio's Service Class Shares Prospectus, UAM Funds Dis-
tributors, Inc. (the "Distributor") may enter into agreements with broker-
dealers and other financial institutions ("Service Agents"), pursuant to which
they will provide administrative support services to Service Class sharehold-
ers who are their customers ("Customers") in consideration of the Fund's pay-
ment of 0.25% (on an annualized basis) of the average daily net asset value of
the Service Class Shares held by the Service Agent for the benefit of its Cus-
tomers. Such services include:
(a) acting as the sole shareholder of record and nominee for beneficial
owners;
(b) maintaining account records for such beneficial owners of the Fund's
shares;
(c) opening and closing accounts;
(d) answering questions and handling correspondence from shareholders
about their accounts;
(e) processing shareholder orders to purchase, redeem and exchange shares;
(f) handling the transmission of funds representing the purchase price or
redemption proceeds;
(g) issuing confirmations for transactions in the Fund's shares by share-
holders;
(h) distributing current copies of prospectuses, statements of additional
information and shareholder reports;
(i) assisting customers in completing application forms, selecting divi-
dend and other account options and opening any necessary custody ac-
counts;
21
<PAGE>
(j) providing account maintenance and accounting support for all transac-
tions; and
(k) performing such additional shareholder services as may be agreed upon
by the Fund and the Service Agent, provided that any such additional
shareholder services must constitute a permissible non-banking activ-
ity in accordance with the then current regulations of, and interpre-
tations thereof by, the Board of Governors of the Federal Reserve Sys-
tem, if applicable.
Each agreement with a Service Agent is governed by a Shareholder Service
Plan (the "Service Plan") that has been adopted by the Fund's Board of Trust-
ees. Pursuant to the Service Plan, the Board of Trustees reviews, at least
quarterly, a written report of the amounts expended under each agreement with
Service Agents and the purposes for which the expenditures were made. In addi-
tion, arrangements with Service Agents must be approved annually by a majority
of the Fund's Trustees, including a majority of the Trustees who are not "in-
terested persons" of the company as defined in the 1940 Act and have no direct
or indirect financial interest in such arrangements.
The Board of Trustees has approved the arrangements with Service Agents
based on information provided by the Fund's service contractors that there is
a reasonable likelihood that the arrangements will benefit the Fund and its
shareholders by affording the Fund greater flexibility in connection with the
servicing of the accounts of the beneficial owners of its shares in an effi-
cient manner. Any material amendment to the Fund's arrangements with Service
Agents must be approved by a majority of the Fund's Board of Trustees (includ-
ing a majority of the disinterested Trustees). So long as the arrangements
with Service Agents are in effect, the selection and nomination of the members
of the Fund's Board of Trustees who are not "interested persons" (as defined
in the 1940 Act) of the Company will be committed to the discretion of such
non-interested Trustees.
Pursuant to Rule 12b-1 under the 1940 Act, the Fund has adopted a Distribu-
tion Plan for the Service Class Shares of the Fund (the "Distribution Plan").
The Distribution Plan permits the Fund to pay for certain distribution, promo-
tional and related expenses involved in the marketing of only the Service
Class Shares.
The Distribution Plan permits the Service Class Shares, pursuant to the Dis-
tribution Agreement, to pay a monthly fee to the Distributor for its services
and expenses in distributing and promoting sales of the Service Class Shares.
These expenses include, among other things, preparing and distributing adver-
tisements, sales literature and prospectuses and reports used for sales pur-
poses, compensating sales and marketing personnel, and paying distribution and
maintenance fees to securities brokers and dealers who enter into agreements
with the Distributor. In addition, the Service Class Shares may make payments
directly to other unaffiliated
22
<PAGE>
parties, who either aid in the distribution of their shares or provide serv-
ices to the Class.
The maximum annual aggregate fee payable by the Fund under the Service and
Distribution Plans (the "Plans"), is 0.75% of the Service Class Shares' aver-
age daily net assets for the year. The Fund's Board of Trustees may reduce
this amount at any time. Although the maximum fee payable under the 12b-1 Plan
relating to the Service Class Shares is 0.75% of average daily net assets of
such class, the Board of Trustees has determined that the annual fee, payable
on a monthly basis, under the Plans relating to the Service Class Shares, cur-
rently cannot exceed .50% of the average daily net assets represented by the
Service Class. While the current fee which will be payable under the Service
Plan and Distribution Plan has been set at .25%, the Plans permit a full 0.75%
on all assets to be paid at any time following appropriate Board approval.
All of the distribution expenses incurred by the Distributor and others,
such as broker/dealers, in excess of the amount paid by the Service Class
Shares will be borne by such persons without any reimbursement from such Clas-
ses. Subject to seeking best price and execution, the Fund may, from time to
time, buy or sell portfolio securities from or to firms which receive payments
under the Plans. From time to time, the Distributor may pay additional amounts
from its own resources to dealers for aid in distribution or for aid in pro-
viding administrative services to shareholders.
The Plans, the Distribution Agreement and the form of dealer's and services
agreements have all been approved by the Board of Trustees of the Fund, in-
cluding a majority of the Trustees who are not "interested persons" (as de-
fined in the 1940 Act) of the Fund and who have no direct or indirect finan-
cial interest in the Plans or any related agreements, by vote cast in person
at a meeting duly called for the purpose of voting on the Plan and such Agree-
ments. Continuation of the Plans, the Distribution Agreement and the related
agreements must be approved annually by the Board of Trustees in the same man-
ner, as specified above. The MJI International Equity Portfolio Service Class
Shares have not been offered prior to the date of this Statement.
Each year the Trustees must determine whether continuation of the Plans is
in the best interest of the shareholders of Service Class Shares and that
there is a reasonable likelihood of the Plans providing a benefit to the
Class. The Plans, the Distribution Agreement and the related agreements with
any broker-dealer or others relating to the Class may be terminated at any
time without penalty by a majority of those trustees who are not "interested
persons" or by a majority vote of the outstanding voting securities of the
Class. Any amendment materially increasing the maximum percentage payable un-
der the Plans must likewise be approved by a majority vote of the relevant
Class' outstanding voting securities, as well as by a majority vote of those
Trustees who are not "interested persons."
23
<PAGE>
Also, any other material amendment to the Plans must be approved by a majority
vote of the Trustees including a majority of the Trustees of the Fund having
no interest in the Plans. In addition, in order for the Plans to remain effec-
tive, the selection and nomination of Trustees who are not "interested per-
sons" of the Fund must be effected by the Trustees who themselves are not "in-
terested persons" and who have no direct or indirect financial interest in the
Plans. Persons authorized to make payments under the Plans must provide writ-
ten reports at least quarterly to the Board of Trustees for their review. The
NASD has adopted amendments to its Rules of Fair Practice relating to invest-
ment company sales charges. The Fund and the Distributor intend to operate in
compliance with these rules.
PORTFOLIO TRANSACTIONS
The Investment Advisory Agreements authorize the Adviser to select the bro-
kers or dealers that will execute the purchases and sales of investment secu-
rities for the Portfolio and directs the Adviser to use its best efforts to
obtain the best execution with respect to all transactions for the Portfolio.
The Adviser may, however, consistent with the interests of the Portfolio, se-
lect brokers on the basis of the research, statistical and pricing services
they provide to the Portfolio. Information and research received from such
brokers will be in addition to, and not in lieu of, the services required to
be performed by the Adviser under the Investment Advisory Agreements. A com-
mission paid to such brokers may be higher than that which another qualified
broker would have charged for effecting the same transaction, provided that
such commissions are paid in compliance with the Securities Exchange Act of
1934, as amended, and that the Adviser determines in good faith that such com-
mission is reasonable in terms either of the transaction or the overall re-
sponsibility of the Adviser to the Portfolio and the Adviser's other clients.
It is not the Fund's practice to allocate brokerage or effect principal
transactions with dealers on the basis of sales of shares which may be made
through broker-dealer firms. However, the Adviser may place portfolio orders
with qualified broker-dealers who refer clients to the Adviser. During the
fiscal years ended April 30, 1995 and April 30, 1996, the entire Fund paid
brokerage commissions of approximately $15,000 and $39,000, respectively.
Some securities considered for investment by the Portfolio may also be ap-
propriate for other clients served by the Adviser. If purchases or sales of
securities consistent with the investment policies of a Portfolio and one or
more of these other clients served by the Adviser is considered at or about
the same time, transactions in such securities will be allocated among the
Portfolio and clients in a manner deemed fair and reasonable by the Adviser.
Although there is no specified formula for allocating such transactions, the
various allocation methods used by the Adviser, and the results of such allo-
cations, are subject to periodic review by the Fund's Board of Trustees.
24
<PAGE>
ADMINISTRATIVE SERVICES
As stated in the Prospectus, the Board of Trustees of the Fund approved a
new Fund Administration Agreement between UAM Fund Services, Inc., a wholly
owned subsidiary of UAM, and the Fund. The Fund's Trustees also approved a Mu-
tual Fund Services Agreement between UAM Fund Services, Inc. and Chase Global
Funds Services Company. The services provided by UAM Fund Services, Inc. and
Chase Global Funds Services Company and the basis of the fees payable by the
Fund under the Fund Administration Agreement are described in the Portfolios'
Prospectus. Prior to April 15, 1996, Chase Global Funds Services Company or
its predecessor, Mutual Funds Services Company, provided certain administra-
tive services to the Fund under an Administration Agreement between the Fund
and U.S. Trust Company of New York.
For the period September 16, 1994 to April 30, 1995, administrative services
fees paid to the Sub-Administrator by the MJI International Equity Portfolio
totaled $26,000. The basis of the fees paid to the Sub-Administrator for the
1995 fiscal year was as follows: the Fund paid a monthly fee for its services
which on an annualized basis equaled 0.20% of the first $200 million in com-
bined assets; plus 0.12% of the next $800 million in combined assets; plus
0.08% on assets over $1 billion but less than $3 billion; plus 0.06% on assets
over $3 billion. The fees were allocated among the Portfolios on the basis of
their relative assets and were subject to a designated minimum fee schedule
per Portfolio, which ranged from $2,000 per month upon inception of a Portfo-
lio to $70,000 annually after two years. For the fiscal year ended April 30,
1996, administrative services fees paid to the Sub-Administrator by the MJI
International Equity Portfolio totaled $69,866. For the period April 15, 1996
to April 30, 1996, UAM Fund Services, Inc. earned $3,134 from the MJI Interna-
tional Equity Portfolio as Administrator. The services provided by the Admin-
istrator and Sub-Administrator and the basis of the current fees payable are
described in the Portfolio's Prospectuses.
PERFORMANCE CALCULATIONS
PERFORMANCE
The Portfolio may from time to time quote various performance figures to il-
lustrate the past performance of each class of the Portfolio. Performance quo-
tations by investment companies are subject to rules adopted by the Commis-
sion, which require the use of standardized performance quotations or, alter-
natively, that every non-standardized performance quotation furnished by the
Fund be accompanied by certain standardized performance information computed
as required by the Commission. Current yield and average annual compounded to-
tal return quotations used by the Fund are based on the standardized methods
of computing performance mandated by the Commission. An explanation of the
method used to compute or express performance follows.
25
<PAGE>
TOTAL RETURN
The average annual total return of a Portfolio is determined by finding the
average annual compounded rates of return over 1, 5 and 10 year periods that
would equate an initial hypothetical $1,000 investment to its ending redeem-
able value. The calculation assumes that all dividends and distributions are
reinvested when paid. The quotation assumes the amount was completely redeemed
at the end of each 1, 5 and 10 year period and the deduction of all applicable
Fund expenses on an annual basis. Since Service Class Shares of the Portfolio
bear additional service and distribution expenses, the average annual total
return of the Service Class Shares of the Portfolio will generally be lower
than that of the Institutional Class Shares.
The average annual total rates of return for the MJI International Equity
Portfolio Institutional Class Shares from inception to October 31, 1996 and
for the one year period ended on the date of the Financial Statements included
herein are as follows:
<TABLE>
<CAPTION>
SINCE INCEPTION
ONE YEAR THROUGH YEAR
ENDED ENDED
OCTOBER 31, OCTOBER 31, INCEPTION
1996 1996 DATE
----------- --------------- ---------
<S> <C> <C> <C>
MJI International Equity Portfolio... 8.74% 1.44% 9/16/94
</TABLE>
These figures are calculated according to the following formula:
P (1 + T)/n/ = ERV
where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment made at
the beginning of the 1, 5 or 10 year periods at the end of the
1, 5 or 10 year periods (or fractional portion thereof).
Service Class Shares of the MJI International Equity Portfolio were not of-
fered as of October 31, 1996. Accordingly, no total return figures are avail-
able.
COMPARISONS
To help investors better evaluate how an investment in a Portfolio of the
Fund might satisfy their investment objective, advertisements regarding the
Fund may discuss various measures of Fund performance as reported by various
financial publications. Advertisements may also compare performance (as calcu-
lated above) to performance as reported by other investments, indices and av-
erages. The following publications, indices and averages may be used:
26
<PAGE>
(a) Dow Jones Composite Average or its component averages -- an unmanaged
index composed of 30 blue-chip industrial corporation stocks (Dow
Jones Industrial Average), 15 utilities company stocks and 20 trans-
portation stocks. Comparisons of performance assume reinvestment of
dividends.
(b) Standard & Poor's 500 Stock Index or its component indices -- an un-
managed index composed of 400 industrial stocks, 40 financial stocks,
40 utilities stocks and 20 transportation stocks. Comparisons of per-
formance assume reinvestment of dividends.
(c) The New York Stock Exchange composite or component indices -- un-man-
aged indices of all industrial, utilities, transportation and finance
stocks listed on the New York Stock Exchange.
(d) Salomon Brothers World Government Bond Index -- The Salomon World Gov-
ernment Bond Index is designed to provide a comprehensive measure of
total return performance of the domestic government bond market of
thirteen countries. The index has been constructed with the aim of
choosing an "all inclusive" universe of institutionally traded fixed-
rate bonds. The selection of security types to be included in the in-
dex is made with the aim of being as comprehensive as possible, while
satisfying the criterion of reasonable availability to domestic and
international institutions and the existence of complete pricing and
market profile data.
(e) Wilshire 5000 Equity Index or its component indices -- represents the
return on the market value of all common equity securities for which
daily pricing is available. Comparisons of performance assume rein-
vestment of dividends.
(f) Lipper -- Mutual Fund Performance Analysis and Lipper -- Fixed Income
Fund Performance Analysis -- measure total return and average current
yield for the mutual fund industry. Rank individual mutual fund per-
formance over specified time periods, assuming reinvestment of all
distributions, exclusive of any applicable sales charges.
(g) Morgan Stanley Capital International EAFE Index and World Index -- re-
spectively, arithmetic, market value-weighted averages of the perfor-
mance of over 900 securities listed on the stock exchanges of coun-
tries in Europe, Australia and the Far East, and over 1,400 securities
listed on the stock exchanges of these continents, including North
America.
(h) Goldman Sachs 100 Convertible Bond Index -- currently includes 67
bonds and 33 preferred. The original list of names was generated by
screening for convertible issues of 100 million or greater in market
capitalization. The index is priced monthly.
(i) Salomon Brothers GNMA Index -- includes pools of mortgages originated
by rivate lenders and guaranteed by the mortgage pools of the Govern-
ment National Mortgage Association.
27
<PAGE>
(j) Salomon Brothers High Grade Corporate Bond Index -- consists of pub-
licly issued, non-convertible corporate bonds rated AA or AAA. It is a
value-weighted, total return index, including approximately 800 issues
with maturities of 12 years or greater.
(k) Salomon Brothers Broad Investment Grade Bond -- is a market-weighted
index that contains approximately 4,700 individually priced investment
grade corporate bonds rated BBB or better, U.S. Treasury/agency issues
and mortgage pass through securities.
(l) Lehman Brothers LONG-TERM Treasury Bond -- is composed of all bonds
covered by the Lehman Brothers Treasury Bond Index with maturities of
10 years or greater.
(m) NASDAQ Industrial Index -- is composed of more than 3,000 industrial
issues. It is a value-weighted index calculated on price change only
and does not include income.
(n) Value Line -- composed of over 1,600 stocks in the Value Line invest-
ment Survey.
(o) Russell 2000 -- composed of the 2,000 smallest stocks in the Russell
3000, a market value-weighted index of the 3,000 largest U.S. public-
ly-traded companies.
(p) Composite Indices -- 60% Standard & Poor's 500 Stock Index, 30% Lehman
Brothers LONG-TERM Treasury Bond and 10% U.S. Treasury Bills; 70%
Standard & Poor's 500 Stock Index and 30% NASDAQ Industrial Index; 35%
Standard & Poors 500 Stock Index and 65% Salomon Brothers High Grade
Bond Index; all stocks on the NASDAQ system exclusive of those traded
on an exchange, and 65% Standard & Poor's 500 Stock Index and 35% Sal-
omon Brothers High Grade Bond Index.
(q) CDA Mutual Fund Report published by CDA Investment Technologies,
Inc. -- analyzes price, current yield, risk, total return and average
rate of return (average compounded growth rate) over specified time
periods for the mutual fund industry.
(r) Mutual Fund Source Book published by Morningstar, Inc. -- analyzes
price, yield, risk and total return for equity funds.
(s) Financial publications: Business Week, Changing Times, Financial
World, Forbes, Fortune, Money, Barron's, Consumer's Digest, Financial
Times, Global Investor, Wall Street Journal and Weisenberger Invest-
ment Companies Service -- publications that rate fund performance over
specified time periods.
(t) Consumer Price Index (or Cost of Living Index), published by the U.S.
Bureau of Labor Statistics -- a statistical measure of change over
time in the price of goods and services in major expenditure groups.
28
<PAGE>
(u) Stocks, Bonds, Bills and Inflation, published by Ibbotson Associ-
ates -- historical measure of yield, price and total return for common
and small company stock, long-term government bonds, U.S. Treasury
bills and inflation.
(v) Savings and Loan Historical Interest Rates -- as published by the U.S.
Savings & Loan League Fact Book.
(w) Historical data supplied by the research departments of First Boston
Corporation; the J.P. Morgan companies; Salomon Brothers; Merrill
Lynch, Pierce, Fenner & Smith; Lehman Brothers, Inc.; and Bloomberg
L.P.
In assessing such comparisons of performance, an investor should keep in
mind that the composition of the investments in the reported indices and aver-
ages is not identical to the composition of investments in the Portfolio, that
the averages are generally unmanaged, and that the items included in the cal-
culations of such averages may not be identical to the formula used by the
Portfolio to calculate its performance. In addition, there can be no assurance
that the Portfolio will continue this performance as compared to such other
averages.
GENERAL INFORMATION
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Fund was organized under the name "The Regis Fund II," as a Delaware
business trust on May 18, 1994. On October 31, 1995, the name of the Fund was
changed to "UAM Funds Trust". The Fund's principal executive office is located
at One International Place, 44th Floor, Boston, MA 02110; however, all in-
vestor correspondence should be directed to the Fund at UAM Funds Service Cen-
ter, c/o Chase Global Funds Services Company, P.O. Box 2798, Boston, MA 02208-
2798. The Fund's Agreement and Declaration of Trust permits the Fund to issue
an unlimited number of shares of beneficial interest, without par value. The
Trustees have the power to designate one or more series ("Portfolios") of
shares of beneficial interest without further action by shareholders.
On each matter submitted to a vote of the Shareholders, each holder of a
Share shall be entitled to one vote for each whole Share and a fractional vote
for each fractional Share standing in his or her name on the books of the
Fund.
In the event of liquidation of the Fund, the holders of the shares of each
Portfolio or any class thereof that has been established and designated shall
be entitled to receive, when and as declared by the Trustees, the excess of
the assets belonging to that Portfolio, or in the case of a class, belonging
to that Portfolio and allocable to that class, over the liabilities belonging
to that Portfolio or class. The assets so distributable to the holders of
shares of any particular Portfolio or class thereof shall be distributed to
the holders in proportion to the number of shares of that Portfolio or class
thereof held by them and recorded on the books of the Fund. The liquidation of
any Portfolio or class thereof may be authorized at any time by vote of a ma-
jority of the Trustees then in office.
29
<PAGE>
Shareholders of both Classes of the Fund's Portfolios have no pre-emptive or
other rights to subscribe to any additional shares or other securities issued
by the Fund or any Portfolio, except as the Trustees in their sole discretion
shall have determined by vote. Both Institutional Class and Service Class
Shares represent an interest in the same assets of a Portfolio and are identi-
cal in all respects except that the Service Class Shares bear certain expenses
related to shareholder servicing and the distribution of such shares, and have
exclusive voting rights with respect to matters relating to such distribution
expenditures.
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
The Fund's policy is to distribute substantially all of each Portfolio's net
investment income, if any, together with any net realized capital gains annu-
ally in the amount and at the times that will avoid both income (including
capital gains) taxes incurred on it and the imposition of the Federal excise
tax on undistributed income and capital gains. The amounts of any income divi-
dends or capital gains distributions cannot be predicted. See the discussion
under "Dividends, Capital Gains Distributions and Taxes" in the Prospectuses.
Any dividend or distribution paid shortly after the purchase of shares of a
Portfolio by an investor may have the effect of reducing the per share net as-
set value of the Portfolio by the per share amount of the dividend or distri-
bution. Furthermore, such dividends or distributions, although in effect a re-
turn of capital, are subject to income taxes as set forth in the Prospectuses.
As set forth in the Prospectuses, unless the shareholder elects otherwise in
writing, all dividend and capital gains distributions are automatically re-
ceived in additional shares of the respective Portfolio of the Fund at net as-
set value (as of the business day following the record date). This will remain
in effect until the Fund is notified by the shareholder in writing at least
three days prior to the record date that either the Income Option (income div-
idends in cash and capital gains distributions in additional shares at net as-
set value) or the Cash Option (both income dividends and capital gains distri-
butions in cash) has been elected. An account statement is sent to sharehold-
ers whenever an income dividend or capital gains distribution is paid.
Each Portfolio of the Fund will be treated as a separate entity (and hence
as a separate "regulated investment company") for Federal tax purposes. Any
net capital gains recognized by a Portfolio will be distributed to its invest-
ors without need to offset (for Federal income tax purposes) such gains
against any net capital losses realized by another Portfolio.
CODE OF ETHICS
The Fund has adopted a Code of Ethics which restricts to a certain extent
personal transactions by access persons of the Fund and imposes certain dis-
closure and reporting obligations.
30
<PAGE>
FEDERAL TAXES
In order for the Portfolio to continue to qualify for Federal income tax
treatment as a regulated investment company under the Internal Revenue Code of
1986, as amended (the "Code"), at least 90% of its gross income for a taxable
year must be derived from certain qualifying income, i.e., dividends, inter-
est, income derived from loans of securities and gains from the sale or other
disposition of stock, securities or foreign currencies, or other related in-
come, including gains from options, futures and forward contracts, derived
with respect to its business investing in stock, securities or currencies. Any
net gain realized from the closing out of futures contracts will, therefore,
generally be qualifying income for purposes of the 90% requirement. Qualifica-
tion as a regulated investment company also requires that less than 30% of the
Portfolio's gross income be derived from the sale or other disposition of
stock, securities, options, futures or forward contracts (including certain
foreign currencies not directly related to the Fund's business of investing in
stock or securities) held less than three months. In order to avoid realizing
excessive gains on securities held for less than three months, the Portfolio
may be required to defer the closing out of futures contracts beyond the time
when it would otherwise be advantageous to do so. It is anticipated that
unrealized gains on futures contracts which have been open for less than three
months as of the end of the Portfolio's taxable year, and which are recognized
for tax purposes, will not be considered gains on securities held for less
than three months for the purposes of the 30% test.
Except for transactions the Portfolio has identified as hedging transac-
tions, in general each Portfolio is required for Federal income tax purposes
to recognize as income for each taxable year its net unrealized gains and
losses on some forward currency and some futures contracts as of the end of
each taxable year as well as those actually realized during the year. In most
cases, any such gain or loss recognized with respect to a regulated futures
contract is considered to be 60% long-term capital gain or loss and 40% short-
term capital gain or loss without regard to the holding period of the con-
tract. Recognized gain or loss attributable to a foreign currency forward con-
tract is treated as 100% ordinary income. Furthermore, foreign currency
futures contracts which are intended to hedge against a change in the value of
securities held by the Portfolio may affect the holding period of such securi-
ties and, consequently, the nature of the gain or loss on such securities upon
disposition.
The Portfolio will distribute to shareholders annually any net capital gains
which have been recognized for Federal income tax purposes (including
unrealized gains at the end of the Portfolio's taxable year on futures trans-
actions). Such distribution will be combined with distributions of capital
gains realized on the Portfolio's other investments, and shareholders will be
advised as to the character of the payments.
31
<PAGE>
FINANCIAL STATEMENTS
The Financial Statements for the MJI International Equity Portfolio for the
fiscal year ended April 30, 1996 and the six-months ended October 31, 1996,
and the Financial Highlights for the respective periods presented which appear
in the Portfolio's 1996 Annual Financial Statements (and the report thereon of
Price Waterhouse LLP, the Fund's independent accountants, also appearing
therein,) and Semi-Annual Report to Shareholders are attached to this SAI.
32
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
October 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE+
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (94.1%)
- --------------------------------------------------------------------------------
ARGENTINA (2.4%)
Banco Frances del Rio de la Plata S.A. ADR.................. 7,000 $ 183,750
*Disco S.A. ADR............................................. 3,000 67,500
Transportadora de Gas del Sur S.A. ADR...................... 4,700 54,638
YPF S.A. ADR................................................ 8,600 195,650
-----------
501,538
- --------------------------------------------------------------------------------
AUSTRALIA (3.8%)
Australia & New Zealand Banking Group Ltd. ................. 65,000 379,647
National Australia Bank Ltd. ............................... 13,500 148,178
News Corp., Ltd. ........................................... 45,000 256,056
-----------
783,881
- --------------------------------------------------------------------------------
CHILE (1.7%)
Quimica y Minera Chile S.A. ADR............................. 6,200 356,500
- --------------------------------------------------------------------------------
FRANCE (6.0%)
Cie Generale des Eaux....................................... 1,790 214,020
LVMH (Moet Hennessy Louis Vuitton).......................... 900 206,235
Lyonnaise des Eaux-Dumez.................................... 1,034 91,458
Michelin, Class B........................................... 2,600 125,416
Parisienne de Reescompte.................................... 885 70,312
*SGS-Thomson Microelectronics N.V........................... 5,400 286,263
Total S.A., Class B......................................... 3,200 250,417
-----------
1,244,121
- --------------------------------------------------------------------------------
GERMANY (5.8%)
Bayerische Motoren Werke AG................................. 940 550,895
Commerzbank AG.............................................. 2,120 47,555
Mannesmann AG............................................... 653 254,556
Volkswagen AG............................................... 915 362,433
-----------
1,215,439
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-4
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
October 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE+
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
- --------------------------------------------------------------------------------
HONG KONG (7.8%)
Amoy Properties Ltd. ...................................... 280,000 $ 345,850
Cheung Kong Holdings, Ltd. ................................ 43,000 344,814
Hong Kong Land Holdings, Ltd............................... 150,000 334,500
Hutchison Whampoa Ltd...................................... 40,000 279,369
Swire Pacific Ltd., Class A................................ 35,000 308,955
-----------
1,613,488
- --------------------------------------------------------------------------------
IRELAND (2.0%)
Allied Irish Banks plc..................................... 43,414 275,157
Smurfit (Jefferson) Group plc.............................. 51,000 139,004
-----------
414,161
- --------------------------------------------------------------------------------
ITALY (3.8%)
ENI S.p.A. ................................................ 24,000 115,066
Fiat S.p.A. ............................................... 33,800 90,450
Instituto Mobiliare Italiano S.p.A......................... 33,500 265,405
Italcementi Fabbriche Riunit............................... 2,650 14,052
Parmalat Finanziaria S.p.A. ............................... 148,800 213,581
Telecom Italia Mobile S.p.A................................ 39,990 82,735
-----------
781,289
- --------------------------------------------------------------------------------
JAPAN (13.9%)
EISAI Co., Ltd. ........................................... 7,000 125,561
Itochu Corp................................................ 37,000 223,503
JGC Corp................................................... 23,000 242,680
Matsumoto Kenko Co., Ltd................................... 400 14,948
Matsushita Communication Industrial........................ 9,000 238,196
Mori Seiki................................................. 9,000 132,946
Nippon Sanso KK Corp....................................... 18,000 76,761
Nippon Steel Co............................................ 82,000 239,374
Nissan Motor Co., Ltd...................................... 33,000 249,828
Nitto Denko Corp........................................... 16,000 237,756
Sanwa Bank Ltd............................................. 13,000 221,753
Shiseido Co., Ltd.......................................... 20,000 233,887
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-5
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
October 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE+
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
- --------------------------------------------------------------------------------
JAPAN--(CONTINUED)
Sumitomo Electric Industries.............................. 14,000 $ 184,648
Suzuki Motor Co., Ltd..................................... 23,000 234,591
Tokyo Style............................................... 15,000 228,172
-----------
2,884,604
- --------------------------------------------------------------------------------
MALAYSIA (4.4%)
Genting Bhd. ............................................. 26,000 194,537
Hicom Holdings Bhd. ...................................... 150,000 400,831
Malayan Banking Bhd....................................... 33,000 326,603
-----------
921,971
- --------------------------------------------------------------------------------
MEXICO (3.8%)
*Cifra S.A. de C.V. Class B................................ 205,000 261,457
Desc S.A. de C.V. ADR..................................... 9,000 173,250
*Empresas ICA S.A. de C.V. ADR............................. 7,000 91,000
*Grupo Industrial Durango ADR.............................. 5,500 59,813
*Telefonos de Mexico S.A. ADR, Class L..................... 6,800 207,400
-----------
792,920
- --------------------------------------------------------------------------------
NETHERLANDS (5.4%)
Elsevier N.V.............................................. 19,340 321,403
ING Groep N.V............................................. 7,250 226,015
Vendex International N.V. BDR ............................ 7,300 294,684
VNU....................................................... 15,040 272,987
-----------
1,115,089
- --------------------------------------------------------------------------------
NEW ZEALAND (1.7%)
Carter Holt Harvey Ltd. .................................. 85,000 191,156
Lion Nathan Ltd........................................... 60,000 154,876
-----------
346,032
- --------------------------------------------------------------------------------
NORWAY (1.6%)
Norsk Hydro............................................... 6,910 318,543
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-6
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
October 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE+
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
- --------------------------------------------------------------------------------
SINGAPORE (3.7%)
City Developments Ltd....................................... 45,000 $ 354,683
Keppel Corp., Ltd........................................... 40,000 298,232
Singapore Land Ltd.......................................... 20,000 110,772
-----------
763,687
- --------------------------------------------------------------------------------
SPAIN (4.2%)
General de Aguas de Barcelona S.A........................... 2,400 98,236
Empresa Nacional de Electricidad S.A........................ 3,300 202,094
Iberdrola S.A............................................... 12,700 134,937
Telefonica de Espana S.A.................................... 15,970 320,577
Vallehermoso S.A............................................ 6,220 122,907
-----------
878,751
- --------------------------------------------------------------------------------
SWITZERLAND (4.6%)
ABB AG (Bearer)............................................. 33 40,838
Ciba-Geigy AG (Registered).................................. 203 250,413
Sandoz AG (Registered)...................................... 192 222,241
Winterthur Schweizerische (Registered)...................... 421 251,159
Zurich Versicherungs (Registered)........................... 710 194,628
-----------
959,279
- --------------------------------------------------------------------------------
THAILAND (1.4%)
Bangkok Bank plc............................................ 27,000 288,113
- --------------------------------------------------------------------------------
UNITED KINGDOM (16.1%)
Abbey National plc.......................................... 12,400 128,933
BOC Group plc............................................... 18,500 260,845
British Airport Authority plc............................... 28,700 232,337
British Petroleum Co. plc................................... 21,800 234,477
Cadbury Schweppes plc....................................... 23,400 194,572
Carlton Communications plc.................................. 32,000 256,187
Commercial Union plc........................................ 14,800 156,176
Glaxo Wellcome plc.......................................... 16,100 252,549
Grand Metropolitan plc...................................... 27,500 207,408
Kingfisher plc.............................................. 19,400 206,296
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-7
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
October 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE+
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
- -------------------------------------------------------------------------------
UNITED KINGDOM--(CONTINUED)
Lloyds TSB Group plc.................................. 27,120 $ 171,886
National Westminster Bank plc......................... 6,000 68,489
Rank Group plc........................................ 24,200 160,861
Rolls-Royce plc....................................... 45,600 188,470
Safeway Group plc..................................... 36,300 215,301
Williams Holdings plc................................. 37,300 220,929
Wolseley plc.......................................... 24,800 192,089
-----------
3,347,805
- -------------------------------------------------------------------------------
TOTAL COMMON STOCKS (COST $18,881,048)................. 19,527,211
- -------------------------------------------------------------------------------
<CAPTION>
FACE
AMOUNT
- -------------------------------------------------------------------------------
<S> <C> <C>
SHORT-TERM INVESTMENT (6.8%)
- -------------------------------------------------------------------------------
REPURCHASE AGREEMENT
Chase Securities, Inc. 5.58%, dated 10/31/96,
due 11/1/96, to be repurchased at $1,398,217,
collateralized by $1,351,321 of various
U.S. Treasury Notes, 5.875%-7.75%, due
3/31/99-11/30/99, valued at $1,398,003
(COST $1,398,000)................................... $1,398,000 $ 1,398,000
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS (100.9%)
(COST $20,279,048)(A)................................ 20,925,211
- -------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (NET) (-0.9%)............. (183,426)
- -------------------------------------------------------------------------------
NET ASSETS (100%)...................................... $20,741,785
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
+ See Note A to Financial Statements.
* Non-Income Producing Security.
ADR--American Depository Receipt.
BDR--British Depository Receipt.
(a) The cost for federal income tax and book purposes was $20,279,048. At
October 31, 1996, net unrealized appreciation for all securities based on
tax cost was $646,163. This consisted of aggregate gross unrealized appre-
ciation for all securities in which there was an excess of market value
over tax cost of $1,124,655 and aggregate gross unrealized depreciation for
all securities in which there was an excess of tax cost over market value
of $478,492.
The accompanying notes are an integral part of the financial statements.
F-8
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
October 31, 1996 (Unaudited)
At October 31, 1996 sector diversification of the Portfolio was as follows:
<TABLE>
<CAPTION>
% OF
NET
SECTOR DIVERSIFICATION ASSETS VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
Agriculture................................................ 1.7% $ 351,576
Automotive................................................. 8.1 1,676,667
Banks...................................................... 8.1 1,686,383
Basic Resources............................................ 1.1 234,981
Beverages, Food & Tobacco.................................. 2.7 563,030
Broadcasting & Publishing.................................. 4.1 850,577
Building Materials......................................... 1.0 207,036
Capital Equipment.......................................... 1.9 387,502
Chemicals.................................................. 4.9 1,012,649
Construction............................................... 2.1 425,138
Consumer Durables.......................................... 1.8 380,658
Consumer Non-Durables...................................... 2.1 440,122
Electronics................................................ 3.7 762,215
Energy..................................................... 2.3 484,765
Entertainment & Leisure.................................... 1.7 355,398
Financial Services......................................... 5.5 1,140,557
Holding Company............................................ 1.9 400,831
Industrial................................................. 1.2 239,374
Insurance.................................................. 1.7 350,804
Machine.................................................... 0.2 40,838
Manufacturing.............................................. 0.6 125,416
Oil and Gas................................................ 1.8 365,483
Paper & Packaging.......................................... 1.9 389,972
Pharmaceuticals............................................ 3.5 725,202
Print and Publishing....................................... 1.2 256,057
Real Estate................................................ 7.8 1,613,525
Repurchase Agreement....................................... 6.8 1,398,000
Retail..................................................... 5.0 1,045,239
Services................................................... 1.1 223,503
Telecommunications......................................... 1.7 362,105
Textiles & Apparel......................................... 1.1 228,172
Transportation............................................. 4.0 839,524
Utilities.................................................. 6.6 1,361,912
----- -----------
Total Investments.......................................... 100.9% $20,925,211
Other Assets and Liabilities............................... (0.9) (183,426)
----- -----------
Net Assets................................................. 100.0% $20,741,785
===== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-9
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1996 (Unaudited)
<TABLE>
- --------------------------------------------------------------------------------
<S> <C>
ASSETS
Investments, at Cost, Including Foreign Currency.................. $20,288,070
===========
Investments, at Value............................................. $20,925,211
Foreign Currency.................................................. 9,064
Receivable for Investments Sold................................... 151,431
Dividends Receivable.............................................. 26,458
Receivable for Portfolio Shares Sold.............................. 18,600
Foreign Withholding Tax Reclaim Receivable........................ 10,047
Deferred Organization Costs--Note A............................... 5,592
Interest Receivable............................................... 217
Other Assets...................................................... 399
- --------------------------------------------------------------------------------
Total Assets..................................................... 21,147,019
- --------------------------------------------------------------------------------
LIABILITIES
Payable for Investments Purchased................................. 349,740
Payable for Investment Advisory Fees--Note B...................... 5,664
Payable for Portfolio Shares Redeemed............................. 11,250
Payable for Administrative Fees--Note C........................... 8,859
Payable due to Custodian Bank--Note D............................. 4,236
Payable for Trustees' Fees--Note F................................ 608
Other Liabilities................................................. 24,877
- --------------------------------------------------------------------------------
Total Liabilities................................................ 405,234
- --------------------------------------------------------------------------------
NET ASSETS......................................................... $20,741,785
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS CONSISTS OF:
Paid in Capital................................................... $20,100,420
Undistributed Net Investment Income............................... 15,155
Accumulated Net Realized Loss..................................... (18,255)
Unrealized Appreciation........................................... 644,465
- --------------------------------------------------------------------------------
NET ASSETS......................................................... $20,741,785
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INSTITUTIONAL CLASS SHARES
Shares Issued and Outstanding (Unlimited authorization,
no par value)................................................... 2,061,632
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE........... $ 10.06
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-10
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
OCTOBER 31,
1996
(UNAUDITED)
- ---------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Dividends................................................ $ 113,185
Interest................................................. 19,747
Less Foreign Taxes Withheld.............................. (12,824)
- ---------------------------------------------------------------------------------
Total Income............................................ 120,108
- ---------------------------------------------------------------------------------
EXPENSES
Investment Advisory Fees--Note B
Basic Fees.............................................. $ 41,816
Less: Fees Waived....................................... (41,816) --
--------
Administrative Fees--Note C.............................. 48,567
Custodian Fees--Note D................................... 12,169
Printing Fees............................................ 10,812
Filing and Registration Fees............................. 9,265
Audit Fees............................................... 7,436
Trustees' Fees--Note F................................... 1,277
Amortization of Organization Expense--Note A............. 981
Other Expenses........................................... 2,149
Fees Assumed by Adviser--Note B.......................... (7,811)
- ---------------------------------------------------------------------------------
Total Expenses.......................................... 84,845
Expense Offset--Note A................................... (163)
- ---------------------------------------------------------------------------------
Net Expenses............................................ 84,682
- ---------------------------------------------------------------------------------
NET INVESTMENT INCOME..................................... 35,426
- ---------------------------------------------------------------------------------
NET REALIZED LOSS:
Investments.............................................. (174,500)
Foreign Currency Transactions............................ (28,264)
- ---------------------------------------------------------------------------------
TOTAL NET REALIZED LOSS ON INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS................................... (202,764)
- ---------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION ON:
Investments.............................................. 119,736
Foreign Currency Translations............................ (3,399)
- ---------------------------------------------------------------------------------
TOTAL NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION.. 116,337
- ---------------------------------------------------------------------------------
NET LOSS ON INVESTMENTS AND FOREIGN CURRENCY.............. (86,427)
- ---------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS...... $ (51,001)
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-11
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
OCTOBER 31, YEAR ENDED
1996 APRIL 30,
(UNAUDITED) 1996
- ----------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income................................. $ 35,426 $ 63,397
Net Realized Gain (Loss).............................. (202,764) 142,191
Net Change in Unrealized Appreciation/Depreciation.... 116,337 453,055
- ----------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from
Operations......................................... (51,001) 658,643
- ----------------------------------------------------------------------------------
DISTRIBUTIONS:
Net Investment Income................................. -- (4,038)
In Excess of Net Investment Income.................... -- (20,271)
Net Realized Gain..................................... -- (16,206)
- ----------------------------------------------------------------------------------
Total Distributions.................................. -- (40,515)
- ----------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS: (1)
Issued--Regular....................................... 13,950,569 4,553,899
--In Lieu of Cash Distributions..................... -- 40,436
Redeemed.............................................. (1,749,821) (2,155,730)
- ----------------------------------------------------------------------------------
Net Increase from Capital Share Transactions......... 12,200,748 2,438,605
- ----------------------------------------------------------------------------------
Total Increase......................................... 12,149,747 3,056,733
Net Assets:
Beginning of Period................................... 8,592,038 5,535,305
- ----------------------------------------------------------------------------------
End of Period (including undistributed and
distributions in excess of net investment income of
$15,155 and $(20,271), respectively)................ $20,741,785 $ 8,592,038
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
(1)Shares Issued and Redeemed:
Shares Issued........................................ 1,398,660 465,365
In Lieu of Cash Distributions........................ -- 4,217
Redeemed............................................. (173,854) (215,563)
- ----------------------------------------------------------------------------------
1,224,806 254,019
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-12
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR SEPTEMBER
OCTOBER 31, ENDED 1994** TO
1996 APRIL 30, APRIL 30,
(UNAUDITED) 1996 1995
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD........ $ 10.27 $ 9.50 $ 10.00
- -------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income...................... 0.03 0.07 0.04
Net Realized and Unrealized Gain (Loss) on
Investments.............................. (0.24) 0.75 (0.54)++
- -------------------------------------------------------------------------------
Total from Investment Operations.......... (0.21) 0.82 (0.50)
- -------------------------------------------------------------------------------
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.............. $ 10.06 $ 10.27 $ 9.50
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
TOTAL RETURN+............................... (2.05)% 8.67% (5.00)%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands)...... $20,742 $8,592 $ 5,535
Ratio of Expenses to Average Net Assets.... 1.50%* 1.45% 1.00%*
Ratio of Net Investment Income to Average
Net Assets............................... 0.63%* 0.88% 1.49%*
Portfolio Turnover Rate.................... 36% 59% 81%
Average Commission Rate#................... $0.0296 $0.0316 N/A
- -------------------------------------------------------------------------------
Voluntary Waived Fees and Expenses Assumed
by the Adviser........................... $ 0.04 $ 0.13 $ 0.13
Ratio of Expenses to Average Net Assets
Including Expense Offsets................ 1.50%* 1.43%* 1.00%**
- -------------------------------------------------------------------------------
</TABLE>
* Annualized
** Commencement of Operations
+ 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 October 31, 1996 for a share
outstanding throughout that year does not accord with the aggregate net
gains 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.
# Beginning with fiscal year 1996, the portfolio is required to disclose the
average commission rate per share it paid for portfolio trades on which
commissions were charged.
@ Amount is less than $0.01 per share.
The accompanying notes are an integral part of the financial statements.
F-13
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
UAM Funds Trust and UAM Funds, Inc. (collectively the "UAM Funds") are reg-
istered under the Investment Company Act of 1940, as amended. The MJI Interna-
tional Equity Portfolio (the "Portfolio"), a portfolio of UAM Funds Trust, is
a diversified, open-end management investment company. At October 31, 1996,
the UAM Funds were composed of forty active portfolios. The financial state-
ments of the remaining portfolios are presented separately. The objective of
the MJI International Equity Portfolio is to provide maximum total return, in-
cluding both capital appreciation and current income, by investing primarily
in the common stocks of companies based outside of the United States.
A. SIGNIFICANT ACCOUNTING POLICIES: The following significant accounting
policies are in conformity with generally accepted accounting principles. 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 valua-
tion 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 se-
curities 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 provi-
sion 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.
3. REPURCHASE AGREEMENTS: In connection with transactions involving re-
purchase agreements, the Portfolio's custodian bank takes possession of
the underlying securities, the value of which exceeds the principal amount
of
F-14
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
the repurchase transaction, including accrued interest. To the extent that
any repurchase transaction exceeds one business day, the value of the col-
lateral is monitored 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.
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the Portfolio may transfer their daily uninvested cash bal-
ances into a joint trading account which invests in one or more repurchase
agreements. This joint repurchase agreement is covered by the same collat-
eral requirements as discussed above.
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 on the date of valuation. The Portfolio does not isolate that por-
tion 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. These gains and losses are included in
net realized and unrealized gain and loss on investments on the statement
of operations. Net realized and unrealized gains and losses on foreign
currency transactions represent net foreign exchange gains or losses from
forward foreign currency exchange contracts, disposition of foreign cur-
rencies, 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 Port-
folio'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 and sell currency at a set price on a future
date. The market value of the contract will fluctuate with changes in cur-
rency exchange rates. The contract is marked-to-market daily using the
current 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
F-15
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
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 lim-
ited to the amount of unrealized gain on the contracts, if any, at the
date of default. Risks may also arise from the 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 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 dif-
ferences are primarily due to differing book and tax treatments for for-
eign currency transactions and deferred organization costs.
Permanent book and tax basis differences relating to shareholder distri-
butions may result in reclassifications to undistributed net investment
income (loss), accumulated net realized gain (loss) and paid in capital.
7. ORGANIZATION COSTS: Costs incurred 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.
8. 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 in-
come is recognized on the accrual basis. Discounts and premiums on securi-
ties purchased are amortized using the effective yield basis over their
respective lives. Most expenses of the UAM Funds can be directly attrib-
uted to a particular portfolio. Expenses which cannot be directly attrib-
uted 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 compa-
ny, based on their relative net assets. Custodian fees for the Portfolio
have been increased to include expense offsets for custodian balance cred-
its.
F-16
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
B. ADVISORY SERVICES: Under the terms of an investment advisory agreement,
Murray Johnstone International Ltd., (the "Adviser"), provides investment ad-
visory services to the Portfolio at a fee calculated at an annual rate of
0.75% of average daily net assets. 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 1.50% of average daily net assets.
C. ADMINISTRATION SERVICES: UAM Fund Services, Inc. (the "Administrator"), a
wholly-owned subsidiary of UAM, provides and oversees administrative, fund ac-
counting, dividend disbursing and transfer agent services to the UAM Funds and
AEW under a Fund 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 ag-
gregate net assets; plus 0.07% of the next $2 billion of the combined aggre-
gate 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 in-
ception 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. The Administrator
has entered into a Mutual Funds Service Agreement with Chase Global Funds
Services Company ("CGFSC"), an affiliate of The Chase Manhattan Bank, under
which CGFSC agrees to provide certain services, including but not limited to,
administration, fund accounting, dividend disbursing and transfer agent serv-
ices. Pursuant to the Mutual Funds Service Agreement, the Administrator pays
CGFSC a monthly fee. For the period ended October 31, 1996, $45,261 was paid
to CGFSC for their services.
D. CUSTODIAN: Effective July 17, 1996, The Chase Manhattan Bank (the
"Bank"), an affiliate of CGFSC, is custodian for the Portfolio's assets held
in accordance with the custodian agreement. For the period July 17, 1996 to
October 31, 1996, the amount charged to the Portfolio by the Bank aggregated
$7,210, all of which is unpaid at October 31, 1996.
E. 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.
F-17
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
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 ex-
penses incurred in attending Trustee meetings.
G. PURCHASES AND SALES: For the period ended October 31, 1996, the Portfolio
made purchases of $15,538,657 and sales of $3,966,361 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.
H. LINE OF CREDIT: The Portfolio, along with certain other Portfolios of UAM
Funds, collectively entered into an agreement which enables them to partici-
pate in a $100 million unsecured line of credit with several banks. Borrowings
will be made solely to temporarily finance the repurchase of Capital 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 period ended October 31,
1996, the Portfolio had no borrowings under the agreement.
I. OTHER: At October 31, 1996, 52.6% of total shares outstanding were held
by 2 record shareholders owning more than 10% of the aggregate total shares
outstanding.
At April 30, 1996, the net assets of the Portfolio was substantially com-
prised of foreign denominated securities and/or currency. Changes in currency
exchange rates will affect the value of and investment income from such secu-
rities and currency.
Foreign security and currency transactions may involve certain considera-
tions 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.
F-18
<PAGE>
APPENDIX -- DESCRIPTION OF SECURITIES AND RATINGS
I. DESCRIPTION OF CORPORATE BOND RATINGS
MOODY'S INVESTORS SERVICE, INC.'S CORPORATE BOND RATINGS
Aaa -- Bonds which are Aaa are judged to be the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt-
edge." Interest payments are protected by a large or by an exceptionally sta-
ble margin, and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to im-
pair the fundamentally strong position of such issues.
Aa -- Bonds which are rated Aa are judged to be of high quality by all stan-
dards. Together with the Aaa group, they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protec-
tive elements may be of greater amplitude or there may be other elements pres-
ent which make the long-term risks appear somewhat larger than in Aaa securi-
ties.
A -- Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving se-
curity to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment sometime in the future.
Moody's applies numerical modifiers 1, 2 and 3 in the Aa and A rating cate-
gories. The modifier 1 indicates that the security ranks at a higher end of
the rating category, modifier 2 indicates a mid-range rating and modifier 3
indicates that the issue ranks at the lower end of the rating category.
Baa -- Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
STANDARD & POOR'S CORPORATION'S CORPORATE BOND RATINGS
AAA -- Bonds rated AAA have the highest rating assigned by Standard & Poor's
to a debt obligation and indicate an extremely strong capacity to pay princi-
pal and interest.
AA -- Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only to a small degree.
A-1
<PAGE>
A -- Bonds rated A have a strong capacity to pay interest and repay princi-
pal although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than bonds in higher rated
categories.
BBB -- Debt rated BBB is regarded as having an adequate capacity to pay in-
terest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than for debt in higher rated categories.
II. DESCRIPTION OF U.S. GOVERNMENT SECURITIES
The term "U.S. Government Securities" refers to a variety of securities
which are issued or guaranteed by the United States Government, and by various
instrumentalities which have been established or sponsored by the United
States Government.
U.S. Treasury securities are backed by the "full faith and credit" of the
United States. Securities issued or guaranteed by Federal agencies and U.S.
Government sponsored instrumentalities may or may not be backed by the full
faith and credit of the United States.
In the case of securities not backed by the full faith and credit of the
United States, the investor must look principally to the agency or instrumen-
tality issuing or guaranteeing the obligation for ultimate repayment, and may
not be able to assess a claim against the United States itself in the event
the agency or instrumentality does not meet its commitment. Agencies which are
backed by the full faith and credit of the United States include the Export-
Import Bank, Farmers Home Administration, Federal Financing Bank, and others.
Certain agencies and instrumentalities, such as the GNMA are, in effect,
backed by the full faith and credit of the United States through provisions in
their charters that they may make "indefinite and unlimited" drawings on the
U.S. Treasury, if needed to service its debt. Debt from certain other agencies
and instrumentalities, including the Federal Home Loan Bank and FNMA, is not
guaranteed by the United States, but those institutions are protected by the
discretionary authority of the U.S. Treasury to purchase certain amounts of
their securities to assist the institution in meeting its debt obligations.
Finally, other agencies and instrumentalities, such as the Farm Credit System
and the FHLMC, are federally chartered institutions under Government supervi-
sion, but their debt securities are backed only by the credit worthiness of
those institutions, not the U.S. Government.
Some of the U.S. Government agencies that issue or guarantee securities in-
clude the Export-Import Bank of the United States, Farmers Home Administra-
tion, Federal Housing Administration, Maritime Administration, Small Business
Administration, and the Tennessee Valley Authority.
A-2
<PAGE>
III. DESCRIPTION OF COMMERCIAL PAPER
The Portfolios may invest in commercial paper (including variable amount
master demand notes) rated A-1 or better by S&P or Prime-1 by Moody's or by
S&P. Commercial paper refers to short-term, unsecured promissory notes issued
by corporations to finance short-term credit needs. Commercial paper is usu-
ally sold on a discount basis and has a maturity at the time of issuance not
exceeding nine months. Variable amount master demand notes are demand obliga-
tions that permit the investment of fluctuating amounts at varying market
rates of interest pursuant to arrangement between the issuer and a commercial
bank acting as agent for the payees of such notes whereby both parties have
the right to vary the amount of the outstanding indebtedness on the notes. As
variable amount master demand notes are direct lending arrangements between a
lender and a borrower, it is not generally contemplated that such instruments
will be traded, and there is no secondary market for these notes, although
they are redeemable (and thus immediately repayable by the borrower) at face
value, plus accrued interest, at any time. In connection with the Portfolio's
investment in variable amount master demand notes, the Adviser's investment
management staff will monitor, on an ongoing basis, the earning power, cash
flow and other liquidity ratios of the issuer and the borrower's ability to
pay principal and interest on demand.
Commercial paper rated A-1 by S&P has the following characteristics: (1) li-
quidity ratios are adequate to meet cash requirements; (2) long-term senior
debt is rated "A" or better; (3) the issuer has access to at least two addi-
tional channels of borrowing; (4) basic earnings and cash flow have an upward
trend with allowance made for unusual circumstances; (5) typically, the is-
suer's industry is well established, and the issuer has a strong position
within the industry; and (6) the reliability and quality of management are un-
questioned. Relative strength or weakness of the above factors determine
whether the issuer's commercial paper is A-1, A-2 or A-3. The rating Prime-1
is the highest commercial paper rating assigned by Moody's. Among the factors
considered by Moody's in assigning ratings are the following: (1) evaluation
of the management of the issuer; (2) economic evaluation of the issuer's in-
dustry or industries and the appraisal of speculative-type risks which may be
inherent in certain areas; (3) evaluation of the issuer's products in relation
to completion and customer acceptance; (4) liquidity; (5) amount and quality
of long term debt; (6) trend of earnings over a period of ten years; (7) fi-
nancial strength of a parent company and the relationships which exist with
the issuer; and (8) recognition by the management of issuer of obligations
which may be present or may arise as a result of public interest questions and
preparations to meet such obligations.
IV. DESCRIPTION OF BANK OBLIGATIONS
Time deposits are non-negotiable deposits maintained in a banking institu-
tion for a specified period of time at a stated interest rate. Certificates of
deposit are
A-3
<PAGE>
negotiable short-term obligations of commercial banks. Variable rate certifi-
cates of deposit are certificates of deposit on which the interest rate is pe-
riodically adjusted prior to their stated maturity based upon a specified mar-
ket rate. As a result of these adjustments, the interest rate on these obliga-
tions may increase or decrease periodically. Frequently, dealers selling vari-
able rate certificates of deposit to the Portfolio will agree to repurchase
such instruments, at the Portfolio's option, at par on or near the coupon
dates. The dealers' obligations to repurchase these instruments are subject to
conditions imposed by various dealers. Such conditions typically are the con-
tinued credit standing of the issuer and the existence of reasonably orderly
market conditions. The Portfolio is also able to sell variable rate certifi-
cates of deposit in the secondary market. Variable rate certificates of de-
posit normally carry a higher interest rate than comparable fixed rate certif-
icates of deposit. A banker's acceptance is a time draft drawn on a commercial
bank by a borrower usually in connection with an international commercial
transaction to finance the import, export, transfer or storage of goods. The
borrower is liable for payment as well as the bank which unconditionally guar-
antees to pay the draft at its face amount on the maturity date. Most accept-
ances have maturities of six months or less and are traded in the secondary
markets prior to maturity.
V. DESCRIPTION OF FOREIGN INVESTMENTS
Investors should recognize that investing in foreign companies involves cer-
tain special considerations which are not typically associated with investing
in U.S. companies. Since the securities of foreign companies are frequently
denominated in foreign currencies, a Portfolio may be affected favorably or
unfavorably by changes in currency rates and in exchange control regulations,
and may incur costs in connection with conversions between various currencies.
As foreign companies are not generally subject to uniform accounting, audit-
ing and financial reporting standards and they may have policies that are not
comparable to those of domestic companies, there may be less information
available about certain foreign companies than about domestic companies. Secu-
rities of some foreign companies are generally less liquid and more volatile
than securities of comparable domestic companies. There is generally less gov-
ernment supervision and regulation of stock exchanges, brokers and listed com-
panies than in the U.S. In addition, with respect to certain foreign coun-
tries, there is the possibility of expropriation or confiscatory taxation, po-
litical or social instability, or diplomatic developments which could affect
U.S. investments in those countries.
Although the Fund will endeavor to achieve the most favorable execution
costs in its portfolio transactions, fixed commissions on many foreign stock
exchanges are generally higher than negotiated commissions on U.S. exchanges.
Certain foreign governments levy withholding taxes on dividend and interest
income. Although in some countries a portion of these taxes are recoverable,
the
A-4
<PAGE>
non-recoverable portion of foreign withholding taxes will reduce the income
received from the companies comprising the Fund's Portfolios. However, these
foreign withholding taxes are not expected to have a significant impact.
A-5
<PAGE>
PART B
UAM FUNDS
- -------------------------------------------------------------------------------
NEWBOLD'S EQUITY PORTFOLIO
INSTITUTIONAL CLASS SHARES
INSTITUTIONAL SERVICE CLASS SHARES
- -------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION -- JANUARY 3, 1997
This Statement is not a Prospectus but should be read in conjunction with
the Prospectus of the UAM Funds Trust (the "UAM Funds" or the "Fund") for the
Newbold's Equity Portfolio dated January 3, 1997 relating to the Institutional
Class Shares, and the Prospectus dated January 3, 1997 relating to the Insti-
tutional Service Class Shares (the "Service Class Shares"). To obtain the Pro-
spectuses, please call the UAM Funds Service Center:
1-800-638-7983
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Investment Objective and Policies.......................................... 2
Purchase of Shares......................................................... 7
Redemption of Shares....................................................... 8
Shareholder Services....................................................... 9
Investment Limitations..................................................... 10
Management of the Fund..................................................... 11
Investment Adviser......................................................... 15
Service and Distribution Plans............................................. 15
Portfolio Transactions..................................................... 18
Administrative Services.................................................... 19
Performance Calculations................................................... 20
General Information........................................................ 24
Financial Statements....................................................... 26
Appendix -- Description of Securities and Ratings.......................... A-1
</TABLE>
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The following policies supplement the investment objective and policies of
the Newbold's Equity Portfolio (the "Portfolio") as set forth in the Prospec-
tuses for the Institutional Class Shares and Service Class Shares of the Port-
folio:
LENDING OF SECURITIES
The Portfolio may lend its investment securities to qualified brokers, deal-
ers, domestic and foreign banks or other financial institutions, so long as
the terms, the structure and the aggregate amount of such loans are not incon-
sistent with the Investment Company Act of 1940, as amended, (the "1940 Act")
or the Rules and Regulations or interpretations of the Securities and Exchange
Commission (the "SEC") thereunder, which currently require that (a) the bor-
rower pledge and maintain with the Portfolio collateral consisting of cash, an
irrevocable letter of credit issued by a domestic U.S. bank or securities is-
sued or guaranteed by the United States Government having a value at all times
not less than 100% of the value of the securities loans, (b) the borrower add
to such collateral whenever the price of the securities loaned rises (i.e.,
the borrower "marks to the market" on a daily basis), (c) the loan be made
subject to termination by the Portfolio at any time, and (d) the Portfolio re-
ceives reasonable interest on the loan (which may include the Portfolio in-
vesting any cash collateral in interest bearing short-term investments). As
with other extensions of credit, there are risks of delay in recovery or even
loss of rights in the securities loaned if the borrower of the securities
fails financially. These risks are similar to the ones involved with repur-
chase agreements as discussed in the Prospectus.
FOREIGN SECURITIES
Investors should recognize that investing in foreign companies directly or
through the purchase of American Depositary Receipts ("ADRs") involves certain
special considerations which are not typically associated with investing in
U.S. companies. Since the securities of foreign companies are frequently de-
nominated in foreign currencies, investments may be affected favorably or un-
favorably by changes in currency rates and in exchange control regulations,
and may incur costs in connection with conversions between various currencies.
As foreign companies are not generally subject to uniform accounting, audit-
ing and financial reporting standards and they may have policies that are not
comparable to those of domestic companies, there may be less information
available about certain foreign companies than about domestic companies. Secu-
rities of some foreign companies are generally less liquid and more volatile
than securities of comparable domestic companies. There is generally less gov-
ernment supervision and regulation of stock exchanges, brokers and listed com-
panies than in the U.S. In addition, with respect to certain foreign coun-
tries, there is the possibility of expropriation or confiscatory taxation, po-
litical or social instability, or diplomatic developments which could affect
U.S. investments in those countries.
2
<PAGE>
Certain foreign governments levy withholding taxes on dividend and interest
income. Although in some countries a portion of these taxes are recoverable,
the non-recoverable portion of foreign withholding taxes will reduce the in-
come received from the companies comprising the Portfolios' investments. How-
ever, these foreign withholding taxes are not expected to have a significant
impact.
HEDGING STRATEGIES
The Portfolio may engage in various portfolio strategies to hedge against
adverse movements in the equity markets. The Portfolio may buy or sell futures
contracts, write (i.e., sell) covered call options on its portfolio securi-
ties, purchase put and call options on securities and engage in transactions
in related options on such futures. Each of these portfolio strategies is de-
scribed below. Although certain risks are involved in options and futures
transactions, the Adviser believes that, because the Portfolio will engage in
options and futures transactions only for hedging purposes, the options and
futures portfolio strategies of the Portfolio will not subject it to the risks
frequently associated with the speculative use of options and futures transac-
tions. While the Portfolio's use of hedging strategies is intended to reduce
the volatility of the net asset value of the Portfolio shares, the Portfolio's
net asset value will fluctuate. There can be no assurance that the Portfolio's
hedging transactions will be effective. Also, the Portfolio may not necessar-
ily be engaging in hedging activities when movements in any particular equity
market occur.
FUTURES CONTRACTS
The Portfolio may enter into futures contracts for the purposes of hedging,
remaining fully invested and reducing transactions costs. Futures contracts
provide for the future sale by one party and purchase by another party of a
specified amount of a specific security at a specified future time and at a
specified price. Futures contracts which are standardized as to maturity date
and underlying financial instrument are traded on national futures exchanges.
Futures exchanges and trading are regulated under the Commodity Exchange Act
by the Commodity Futures Trading Commission ("CFTC"), a U.S. Government agen-
cy.
Although futures contracts by their terms call for actual delivery or ac-
ceptance of the underlying securities, in most cases the contracts are closed
out before the settlement date without the making or taking of delivery. Clos-
ing out an open futures position is done by taking an opposite position ("buy-
ing" a contract which has previously been "sold" or "selling" a contract pre-
viously "purchased") in an identical contract to terminate the position. Bro-
kerage commissions are incurred when a futures contract is bought or sold.
Futures traders are required to make a good faith margin deposit in cash or
acceptable securities with a broker or custodian to initiate and maintain open
positions in futures contracts. A margin deposit is intended to assure comple-
tion of the contract (delivery or acceptance of the underlying security) if it
is not terminated
3
<PAGE>
prior to the specified delivery date. Minimal initial margin requirements are
established by the futures exchange and may be changed. Brokers may establish
deposit requirements which are higher than the exchange minimums. Generally,
margin deposits are structured as percentages (e.g., 5%) of the market value
of the contracts being traded. After a futures contract position is opened,
the value of the contract is marked to market daily. If the futures contract
price changes to the extent that the margin on deposit does not satisfy margin
requirements, payment of additional "variation" margin will be required. Con-
versely, change in the contract value may reduce the required margin, result-
ing in a repayment of excess margin to the contract holder. Variation margin
payments are made to and from the futures broker for as long as the contract
remains open. The Portfolio expects to earn interest income on its margin de-
posits.
Traders in futures contracts may be broadly classified as either "hedgers"
or "speculators". Hedgers use the futures markets primarily to offset unfavor-
able changes in the value of securities otherwise held for investment purposes
or expected to be acquired by them. Speculators are less inclined to own the
securities underlying the futures contracts which they trade and use futures
contracts with the expectation of realizing profits from a fluctuation in in-
terest rates. The Portfolio intends to use futures contracts only for hedging
purposes.
Regulations of the CFTC applicable to the Fund require that all of its
futures transactions constitute bona fide straddles or that the Fund's commod-
ity futures and option positions be for other purposes, to the extent that the
aggregate initial margins and premiums required to establish such non-hedging
positions do not exceed five percent of the liquidation value of the Portfo-
lio. The Portfolio will only sell futures contracts to protect securities it
owns against price declines or purchase contracts to protect against an in-
crease in the price of securities it intends to purchase. As evidence of this
hedging interest, the Portfolio expects that approximately 75% of its futures
contracts purchases will be "completed", that is, equivalent amounts of re-
lated securities will have been purchased or will be purchased by the Portfo-
lio on the settlement date of the futures contracts.
Although techniques other than the sale and purchase of futures contracts
could be used to control the Portfolio's exposure to market fluctuations, the
use of futures contracts may be a more effective means of hedging this expo-
sure. While the Portfolio will incur commission expenses in both opening and
closing out futures positions, these costs are lower than transaction costs
incurred in the purchase and sale of the underlying securities.
RESTRICTIONS ON THE USE OF FUTURES CONTRACTS
The Portfolio will not enter into futures contract transactions to the ex-
tent that, immediately thereafter, the sum of its initial margin deposits on
open contracts exceeds 5% of the market value of its total assets. In addi-
tion, the Portfolio will
4
<PAGE>
not enter into futures contracts to the extent that its outstanding obliga-
tions to purchase securities under these contracts would exceed 20% of its to-
tal assets.
RISK FACTORS IN FUTURES TRANSACTIONS
The Portfolio will minimize the risk that it will be unable to close out a
futures position by only entering into futures which are traded on national
futures exchanges and for which there appears to be a liquid secondary market.
However, there can be no assurance that a liquid secondary market will exist
for a particular futures contract at any given time. However, there can be no
assurance that a liquid secondary market will exist for any particular futures
contract at any specific time. Thus, it may not be possible to close a futures
position. In the event of adverse price movements, the Portfolio would con-
tinue to be required to make daily cash payments to maintain its required mar-
gin. In such situations, if the Portfolio has insufficient cash, it may have
to sell securities to meet daily margin requirements at a time when it may be
disadvantageous to do so. In addition, the Portfolio may be required to make
delivery of the instruments underlying futures contracts it holds. The inabil-
ity to close futures positions also could have an adverse impact on the Port-
folio's ability to effectively hedge.
The risk of loss in trading futures contracts in some strategies can be sub-
stantial due both to the low margin deposits required and the extremely high
degree of leverage involved in futures pricing. As a result, a relatively
small price movement in a futures contract may result in immediate and sub-
stantial loss (as well as gain) to the investor. For example, if at the time
of purchase, 10% of the value of the futures contract is deposited as margin,
a subsequent 10% decrease in the value of the futures contract would result in
a total loss of the margin deposit, before any deduction for the transaction
costs, if the account were then closed out. A 15% decrease would result in a
loss equal to 150% of the original margin deposit if the contract were closed
out. Thus, a purchase or sale of a futures contract may result in excess of
the amount invested in the contract. However, because the futures strategies
of the Portfolio are engaged in only for hedging purposes, the Adviser does
not believe that the Portfolio is subject to the risks of loss frequently as-
sociated with futures transactions. The Portfolio would presumably have sus-
tained comparable losses if, instead of the futures contract, it had invested
in the underlying financial instrument and sold it after the decline.
Utilization of futures transactions by the Portfolio does involve the risk
of imperfect or no correlation where the securities underlying the futures
contracts have different maturities than the portfolio securities being
hedged. It is also possible that the Portfolio could lose money on futures
contracts and also experience a decline in value of portfolio securities.
There is also the risk of loss by the Portfolio of margin deposits in the
event of bankruptcy of a broker with whom the Portfolio has an open position
in a futures contract or related option.
5
<PAGE>
Most futures exchanges limit the amount of fluctuation permitted in futures
contract prices during a single trading day. The daily limit establishes the
maximum amount that the price of a futures contract may vary either up or down
from the previous day's settlement price at the end of a trading session. Once
the daily limit has been reached in a particular type of contract, no trades
may be made on that day at a price beyond that limit. The daily limit governs
only price movement during a particular trading day and, therefore, does not
limit potential losses because the limit may prevent the liquidation of unfa-
vorable positions. Futures contract prices have occasionally moved to the
daily limit for several consecutive trading days with little or no trading
thereby preventing prompt liquidation of futures positions and subjecting some
futures traders to substantial losses.
Futures contracts may be traded on foreign exchanges. Such transactions are
subject to the risks of governmental actions affecting trading in or the
prices of the securities. The value of such positions also could be adversely
affected by (i) other complex foreign political and economic factors, (ii)
lesser availability than in the United States of data on which to make trading
decisions, (iii) delays in the Portfolio's ability to act upon economic events
occurring in foreign markets during nonbusiness hours in the United States,
(iv) the imposition of different exercise and settlement terms and procedures
and margin requirements than in the United States, and (v) lesser trading vol-
ume.
OPTIONS
The Portfolio may purchase and sell put and call options on securities and
futures contracts for hedging purposes. Investments in options involve some of
the same considerations that are involved in connection with investments in
futures contracts (e.g., the existence of a liquid secondary market). In addi-
tion, the purchase of an option also entails the risk that changes in the
value of the underlying security or contract will not be fully reflected in
the value of the option purchased. Depending on the pricing of the option com-
pared to either the futures contract on which it is based or the price of the
securities being hedged, an option may or may not be less risky than ownership
of the futures contract or such securities. For example, there are significant
differences between the securities, futures and options markets that could re-
sult in an imperfect correlation between these markets, causing a given trans-
action not to achieve its objective. A decision as to whether, when, and how
to use options involves the exercise of skill and judgment by the Adviser, and
even a well-conceived transaction may be unsuccessful because of market behav-
ior or unexpected events.
WRITING COVERED CALL OPTIONS
The principal reason for writing call options is to attempt to realize,
through the receipt of premiums, a greater return than would be realized on
securities alone. By writing covered call options, the Portfolio gives up the
opportunity, while the
6
<PAGE>
option is in effect, to profit from any price increase in the underlying secu-
rity above the option exercise price. In addition, the Portfolio's ability to
sell the underlying security will be limited while the option is in effect un-
less the Portfolio effects a closing purchase transaction. A closing purchase
transaction cancels out the Portfolio's position as the writer of an option by
means of an offsetting purchase of an identical option prior to the expiration
of the option it has written. Covered call options serve as a partial hedge
against the price of the underlying security declining. The Portfolio writes
only covered options, which means that so long as the Portfolio is obligated
as the writer of the option it will, in a segregated account with its custodi-
an, maintain cash, U.S. government securities or high grade liquid debt or eq-
uity securities denominated in U.S. dollars with a value equal to or greater
than the exercise price of the underlying securities.
PURCHASING OPTIONS
The amount of any appreciation in the value of the underlying security sub-
ject to a put will be partially offset by the amount of the premium paid for
the put option and any related transaction costs. Prior to its expiration, a
put option may be sold in a closing sale transaction and profit or loss from a
sale will depend on whether the amount received is more or less than the pre-
mium paid for the put option plus the related transaction costs. A closing
sale transaction cancels out the Portfolio's position as purchaser of an op-
tion by means of an offsetting sale of an identical option prior to the expi-
ration of the option it has purchased. In certain circumstances, the Portfolio
may purchase call options on securities held in its investment portfolio on
which it has written call options or on securities which it intends to pur-
chase.
PURCHASE OF SHARES
Both Classes of shares of the Portfolio may be purchased without sales com-
mission at the net asset value per share next determined after an order is re-
ceived in proper form by the Fund, and payment is received by the Fund's cus-
todian. The minimum initial investment required for the Portfolio is 2,500
with certain exceptions as may be determined from time to time by the officers
of the Fund. The initial investment minimum for IRA accounts is $500. The ini-
tial investment minimum for spousal IRA accounts is $250. The minimum for any
subsequent investment is $100. An order received in proper form prior to the
4:00 p.m. close of the New York Stock Exchange (the "Exchange") will be exe-
cuted at the price computed on the date of receipt; and an order received not
in proper form or after the 4:00 p.m. close of the Exchange will be executed
at the price computed on the next day the Exchange is open after proper re-
ceipt. The Exchange will be closed on the following days: Presidents' Day,
February 17, 1997; Good Friday, March 28, 1997; Memorial Day, May 26, 1997;
Independence Day, July 4, 1997; Labor Day, September 1, 1997; Thanksgiving
Day, November 27, 1997; Christmas Day, December 25, 1997 and New Year's Day,
January 1, 1998.
7
<PAGE>
The Portfolio reserves the right in its sole discretion (1) to suspend the
offering of its shares, (2) to reject purchase orders when in the judgment of
management such rejection is in the best interests of the Fund, and (3) to re-
duce or waive the minimum for initial and subsequent investment for certain
fiduciary accounts such as employee benefit plans or under circumstances where
certain economies can be achieved in sales of the Portfolio's shares.
REDEMPTION OF SHARES
The Portfolio may suspend redemption privileges or postpone the date of pay-
ment (1) during any period that either the Exchange or custodian bank are
closed or trading on the Exchange is restricted as determined by the Commis-
sion, (2) during any period when an emergency exists as defined by the rules
of the Commission as a result of which it is not reasonably practicable for
the Portfolio to dispose of securities owned by it or to fairly determine the
value of its assets, and (3) for such other periods as the Commission may per-
mit. The Fund has made an election with the Commission to pay in cash all re-
demptions requested by any shareholder of record limited in amount during any
90-day period to the lesser of $250,000 or 1% of the net assets of the Fund at
the beginning of such period. Such commitment is irrevocable without the prior
approval of the Commission. Redemptions in excess of the above limits may be
paid, in whole or in part, in investment securities or in cash as the Board of
Trustees may deem advisable; however, payment will be made wholly in cash un-
less the Board of Trustees believe that economic or market conditions exist
which would make such a practice detrimental to the best interests of the
Fund. If redemptions are paid in investment securities, such securities will
be valued as set forth in the Prospectus under "How Share Prices are Deter-
mined", and a redeeming shareholder would normally incur brokerage expenses if
those securities were converted to cash.
No charge is made by the Portfolio for redemptions. Any redemption may be
more or less than the shareholder's initial cost depending on the market value
of the securities held by the Portfolio.
SIGNATURE GUARANTEES
To protect your account, the Fund and Chase Global Funds Services Company
(the "Sub-Administrator") from fraud, signature guarantees are required for
certain redemptions. Signature guarantees are required for (1) redemptions
where the proceeds are to be sent to someone other than the registered
shareowner(s) or the registered address or (2) share transfer requests. The
purpose of signature guarantees is to verify the identity of the party who has
authorized a redemption.
Signatures must be guaranteed by an "eligible guarantor institution" as de-
fined in Rule 17Ad-15 under the Securities Exchange Act of 1934. Eligible
guarantor institutions include banks, brokers, dealers, credit unions, na-
tional securities
8
<PAGE>
exchanges, registered securities associations, clearing agencies and savings
associations. A complete definition of eligible guarantor institution is
available from the Sub-Administrator. Broker-dealers guaranteeing signatures
must be a member of a clearing corporation or maintain net capital of at least
$100,000. Credit unions must be authorized to issue signature guarantees. Sig-
nature guarantees will be accepted from any eligible guarantor institution
which participates in a signature guarantee program.
The signature guarantee must appear either: (1) on the written request for
redemption; (2) on a separate instrument for assignment ("stock power") which
should specify the total number of shares to be redeemed; or (3) on all stock
certificates tendered for redemption and, if shares held by the Fund are also
being redeemed, on the letter or stock power.
SHAREHOLDER SERVICES
The following supplements the shareholder services information set forth in
the Newbold's Equity Portfolio's Prospectus:
EXCHANGE PRIVILEGE
Institutional Class Shares of the Newbold's Equity Portfolio may be ex-
changed for any other Institutional Class Shares of a Portfolio included in
the UAM Funds which is comprised of the Fund and UAM Funds, Inc. (See the list
of Portfolios of the UAM Funds -- Institutional Class Shares at the end of the
Newbold's Equity Portfolio Institutional Class Shares Prospectus.) Service
Class Shares of the Newbold's Equity Portfolio may be exchanged for any other
Service Class Shares of a Portfolio included in the UAM Funds. (For those
Portfolios currently offering Service Class Shares, please call the UAM Funds
Service Center). Exchange requests should be made by calling the Fund (1-800-
638-7983) or by writing to UAM Funds, UAM Funds Service Center, c/o Chase
Global Funds Services Company, P.O. Box 2798, Boston, MA 02208-2798. The ex-
change privilege is only available with respect to Portfolios that are quali-
fied for sale in the shareholder's state of residence.
Any such exchange will be based on the respective net asset values of the
shares involved. There is no sales commission or charge of any kind. Before
making an exchange into a Portfolio, a shareholder should read its Prospectus
and consider the investment objective of the Portfolio to be purchased. You
may obtain a Prospectus for the Portfolio(s) you are interested in by calling
the UAM Funds Service Center at 1-800-638-7983.
Exchange requests may be made either by mail or telephone. Telephone ex-
changes will be accepted only if the certificates for the shares to be ex-
changed are held by the Fund for the account of the shareholder and the regis-
tration of the two accounts will be identical. Requests for exchanges received
prior to 4:00 p.m.
9
<PAGE>
(Eastern Time) will be processed as of the close of business on the same day.
Requests received after 4:00 p.m. will be processed on the next business day.
Neither the Fund nor the Sub-Administrator will be responsible for the authen-
ticity of the exchange instructions received by telephone. Exchanges may also
be subject to limitations as to amounts or frequency, and to other restric-
tions established by the Board of Trustees to assure that such exchanges do
not disadvantage the Fund and its shareholders.
For Federal income tax purposes an exchange between Portfolios is a taxable
event, and, accordingly, a capital gain or loss may be realized. In a revenue
ruling relating to circumstances similar to the Fund's, an exchange between
series of a Fund was also deemed to be a taxable event. It is likely, there-
fore, that a capital gain or loss would be realized on an exchange between
Portfolios; you may want to consult your tax adviser for further information
in this regard. The exchange privilege may be modified or terminated at any
time.
TRANSFER OF SHARES
Shareholders may transfer shares of the Portfolio to another person by mak-
ing a written request to the Fund. The request should clearly identify the ac-
count and number of shares to be transferred, and include the signature of all
registered owners and all stock certificates, if any, which are subject to the
transfer. The signature on the letter of request, the stock certificate or any
stock power must be guaranteed in the same manner as described under "Redemp-
tion of Shares." As in the case of redemptions, the written request must be
received in good order before any transfer can be made.
INVESTMENT LIMITATIONS
The following limitations supplement those set forth in each Prospectus of
the Portfolio. Whenever an investment limitation sets forth a percentage limi-
tation on investment or utilization of assets, such limitation shall be deter-
mined immediately after and as a result of the Portfolio's acquisition of such
security or other asset. Accordingly, any later increase or decrease resulting
from a change in values, net assets or other circumstances will not be consid-
ered when determining whether the investment complies with the Portfolio's in-
vestment limitations. Investment limitations (1), (2), (3), (4) and (6) are
classified as fundamental. The Portfolio's fundamental investment limitations
cannot be changed without approval by a "majority of the outstanding shares"
(as defined in the 1940 Act) of the Portfolio. The Portfolio will not:
(1) invest in physical commodities or contracts on physical commodities;
(2) purchase or sell real estate or real estate limited partnerships, al-
though it may purchase and sell securities of companies which deal in
real estate and may purchase and sell securities which are secured by
interests in real estate;
10
<PAGE>
(3) make loans except (i) by purchasing debt securities in accordance
with its investment objectives and (ii) by lending its portfolio se-
curities to banks, brokers, dealers and other financial institutions
so long as such loans are not inconsistent with the 1940 Act or the
rules and regulations or interpretations of the Commission thereun-
der;
(4) underwrite the securities of other issuers;
(5) invest in futures and/or options on futures unless (i) not more than
5% of the Portfolio's assets are required as deposit to secure obli-
gations under such futures and/or options on futures contracts pro-
vided, however, that in the case of an option that is in-the-money at
the time of purchase, the in-the-money amount may be excluded in com-
puting such 5% and (ii) not more than 20% of the Portfolio's assets
are invested in futures and options;
(6) issue senior securities, as defined in the 1940 Act, except that this
restriction shall not be deemed to prohibit the Portfolio from (i)
making any permitted borrowings, mortgages or pledges, or (ii) enter-
ing into options, futures or repurchase transactions;
(7) purchase on margin or sell short except as specified in (5) above;
(8) invest more than an aggregate of 15% of the net assets of the Portfo-
lio, determined at the time of investment, in securities subject to
legal or contractual restrictions on resale or securities for which
there are no readily available markets; and
(9) invest for the purpose of exercising control over management of any
company.
MANAGEMENT OF THE FUND
TRUSTEES AND OFFICERS
The Officers of the Fund manage its day-to-day operations and are responsi-
ble to the Fund's Board of Trustees. The Trustees set broad policies for the
Fund and elect its Officers. The following is a list of the Trustees and Offi-
cers of the Fund and a brief statement of their present positions and princi-
pal occupations during the past five years:
<TABLE>
<S> <C>
JOHN T. BENNETT, JR. Trustee of the Fund; President of Squam In-
College Road -- RFD 3 vestment Management Company, Inc. and Great
Meredith, NH 03253 Island Investment Company, Inc.; President
Age 67 of Bennett Management Company from 1988 to
1993.
PHILIP D. ENGLISH Trustee of the Fund; President and Chief
16 West Madison Street Executive Officer of Broventure Company,
Baltimore, MD 21201 Inc.; Chairman of the Board of Chektec Cor-
Age 48 poration and Cyber Scientific, Inc.
</TABLE>
11
<PAGE>
<TABLE>
<S> <C>
WILLIAM A. HUMENUK Trustee of the Fund; Partner in the Phila-
4000 Bell Atlantic Tower delphia office of the law firm Dechert
1717 Arch Street Price & Rhoads; Director, Hofler Corp.
Philadelphia, PA 19103
Age 54
NORTON H. REAMER* Trustee, President and Chairman of the
One International Place Fund; President, Chief Executive Officer
Boston, MA 02110 and a Director of United Asset Management
Age 60 Corporation; Director, Partner or Trustee
of each of the Investment Companies of the
Eaton Vance Group of Mutual Funds.
PETER M. WHITMAN, JR.* Trustee of the Fund; President and Chief
One Financial Center Boston, MA Investment Officer of Dewey Square Invest-
02111 ors Corporation ("DSI") since 1988; Direc-
Age 53 tor and Chief Executive Officer of H. T.
Investors, Inc., formerly a subsidiary of
DSI.
WILLIAM H. PARK* Vice President of the Fund; Executive Vice
One International Place Boston, MA President and Chief Financial Officer of
02110 United Asset Management Corporation.
Age 49
GARY L. FRENCH* Treasurer of the Fund; President of UAM
211 Congress Street Fund Services, Inc. and UAM Fund Distribu-
Boston, MA 02110 tors, Inc.; formerly Vice President of Op-
Age 45 erations, Development and Control of Fidel-
ity Investment in 1995 to August 1995;
Treasurer of the Fidelity Group of Mutual
Funds from 1991 to February 1995.
MICHAEL E. DEFAO* Secretary of the Fund; Vice President and
211 Congress Street General Counsel of UAM Fund Services, Inc.
Boston, MA 02110 and UAM Fund Distributors, Inc.; Associate
Age 28 Attorney of Ropes & Gray (a law firm) from
1993 to February 1995.
ROBERT R. FLAHERTY* Assistant Treasurer of the Fund; Vice Pres-
211 Congress Street ident of UAM Fund Services, Inc.; formerly
Boston, MA 02110 Manager of Fund Administration and Compli-
Age 32 ance of Chase Global Fund Services Company
from 1995 to 1996; Deloitte & Touche LLP
from 1985 to 1995, Senior Manager.
</TABLE>
- -----------
* These people are deemed to be "interested persons" of the Fund as that term
is defined in the 1940 Act.
12
<PAGE>
<TABLE>
<S> <C>
KARL O. HARTMANN* Assistant Secretary of the Fund; Senior
73 Tremont Street Vice President and General Counsel of Chase
Boston, MA 02108 Global Fund Services Company, Senior Vice
Age 41 President, Secretary and General Counsel of
Leland, O'Brien, Rubinstein Associates,
Inc., from November 1990 to November 1991.
</TABLE>
- -----------
* These people are deemed to be "interested persons" of the Fund as that term
is defined in the 1940 Act.
REMUNERATION OF TRUSTEES AND OFFICERS
The Fund pays each Trustee, who is not also an officer or affiliated person,
a $150 quarterly retainer fee per active Portfolio which currently amounts to
$1,050 per quarter. In addition, each unaffiliated Trustee receives a $2,000
meeting fee which is aggregated for all the Trustees and allocated proportion-
ately among the Portfolios of the Fund, UAM Funds, Inc. and reimbursement for
travel and other expenses incurred while attending Board meetings. Trustees
who are also officers or affiliated persons receive no remuneration for their
service as Trustees. The Fund's officers and employees are paid by either the
Adviser, United Asset Management Corporation ("UAM"), the Administrator or the
Sub-Administrator and receive no compensation from the Fund. As of December 6,
1996, the Trustees and officers of the Fund owned less than 1% of the Fund's
outstanding shares.
The following table shows aggregate compensation paid to each of the Fund's
Trustees by the Fund and total compensation paid by the Fund, UAM Funds, Inc.
and AEW Commercial Mortgage Securities Fund, Inc. (collectively the "Fund Com-
plex") in the fiscal year ended April 30, 1996.
13
<PAGE>
COMPENSATION TABLE
<TABLE>
<CAPTION>
(1) (2) (3) (4) (5)
PENSION OR TOTAL COMPENSATION
AGGREGATE RETIREMENT BENEFITS ESTIMATED ANNUAL FROM REGISTRANT AND
NAME OF PERSON, COMPENSATION ACCRUED AS PART OF BENEFITS UPON FUND COMPLEX
POSITION FROM REGISTRANT FUND EXPENSES RETIREMENT PAID TO TRUSTEES
--------------- --------------- ------------------- ---------------- -------------------
<S> <C> <C> <C> <C>
John T. Bennett, Jr. ... $3,396 0 0 $29,600
Trustee
J. Edward Day........... $3,396 0 0 $29,600
Former Trustee
Philip D. English....... $3,396 0 0 $29,600
Trustee
William A. Humenuk...... $3,396 0 0 $29,600
Trustee
</TABLE>
PRINCIPAL HOLDERS OF SECURITIES
As of December 6, 1996, the following persons or organizations held of rec-
ord 5% or more of the shares of a Portfolio:
Newbold's Equity Portfolio Institutional Class Shares: Bryce Douglas Invest-
ment Limited Partnership, P.O. Box 672, Kimberton, PA, 14.1%; J. Coggins, J.S.
Grabowski, J. Conway and R. Weinberg, F/B/O Keystone Foods Corp., 401 City Av-
enue, Suite 800, Bala Cynwyd, PA, 12.4%*; David G. Jones MD, Profit Sharing
Plan, 1860 Nottingham Road, Allentown, PA, 8.8%; Boatmen's Trust Company,
Trustee, MFA Profit Sharing & 401k Plan, P.O. Box 14737, St. Louis, MO, 7.4%*;
Warren Pearlman Goldburgh, 7 Gregory Road, Lyme, PA, 7.1%, Joseph F. Rodgers
MD, 1723 Sylvan Lane, Gladwyne, PA, 7.0%; James D. Jamieson, P.O. Box 95, Val-
ley Forge, PA, 6.5%; W.H. Park and Joseph R. Ramrath, Trustees, F/B/O
Newbold's Asset Mgmt. Employees, 950 Haverford Road, Bryn Mawr, PA, 6.4%*; and
Mary Jane Littlepage, 302 Berkeley Street, Devon, PA, 5.5%.
The persons or organizations listed above as owning 25% or more of the out-
standing shares of the Portfolio may be presumed to "control" ( as that term
is defined in the 1940 Act) the Portfolio. As a result, those persons or orga-
nizations could have the ability to vote a majority of the shares of the Port-
folio on any matter requiring the approval of shareholders of the Portfolio.
- -----------
* Denotes shares held by a trustee or other fiduciary for which beneficial
ownership is disclaimed or presumed disclaimed.
14
<PAGE>
INVESTMENT ADVISER
CONTROL OF ADVISER
Newbold's Asset Management, Inc. (the "Adviser") is a wholly-owned subsidi-
ary of UAM, a holding company incorporated in Delaware in December 1980 for
the purpose of acquiring and owning firms engaged primarily in institutional
investment management. Since its first acquisition in August 1983, UAM has ac-
quired or organized approximately 45 such wholly-owned affiliated firms (the
"UAM Affiliated Firms"). UAM believes that permitting UAM Affiliated Firms to
retain control over their investment advisory decisions is necessary to allow
them to continue to provide investment management services that are intended
to meet the particular needs of their respective clients.
Accordingly, after acquisition by UAM, UAM Affiliated Firms continue to op-
erate under their own firm name, with their own leadership and individual in-
vestment philosophy and approach. Each UAM Affiliated Firm manages its own
business independently on a day-to-day basis. Investment strategies employed
and securities selected by UAM Affiliated Firms are separately chosen by each
of them. Several UAM Affiliated Firms also act as investment advisers to sepa-
rate series or Portfolios of UAM Funds, Inc., a registered investment company.
ADVISORY FEES
As compensation for services rendered by the Adviser under the Investment
Advisory Agreement, the Portfolio pays the Adviser an annual fee in monthly
installments, calculated by applying the following annual percentage rates to
the Portfolio's average daily net assets for the month:
<TABLE>
<S> <C>
Newbold's Equity Portfolio............................................. 0.50%
</TABLE>
From September 13, 1995 (date of commencement) to April 30, 1996, the
Newbold's Equity Portfolio paid advisory fees of $0. During this period, the
Adviser voluntarily waived advisory fees of $36,000. Until January 29, 1998,
the Adviser has voluntarily agreed to waive all or a portion of its advisory
fees and to assume operating expenses otherwise payable by the Portfolio, if
necessary, in order to keep the Portfolio's total annual operating expenses
from exceeding 0.90% of average daily net assets.
SERVICE AND DISTRIBUTION PLANS
As stated in the Portfolio's Service Class Shares Prospectus, UAM Fund Dis-
tributors, Inc. (the "Distributor") may enter into agreements with broker-
dealers and other financial institutions ("Service Agents"), pursuant to which
they will provide administrative support services to Service Class sharehold-
ers who are their customers ("Customers") in consideration of the Fund's pay-
ment of 0.15% (on an annualized basis) of the average daily net asset value of
the Service Class Shares held by the Service Agent for the benefit of its Cus-
tomers. Such services include:
15
<PAGE>
(a) acting as the sole shareholder of record and nominee for beneficial
owners;
(b) maintaining account records for such beneficial owners of the Fund's
shares;
(c) opening and closing accounts;
(d) answering questions and handling correspondence from shareholders
about their accounts;
(e) processing shareholder orders to purchase, redeem and exchange shares;
(f) handling the transmission of funds representing the purchase price or
redemption proceeds;
(g) issuing confirmations for transactions in the Fund's shares by share-
holders;
(h) distributing current copies of prospectuses, statements of additional
information and shareholder reports;
(i) assisting customers in completing application forms, selecting divi-
dend and other account options and opening any necessary custody ac-
counts;
(j) providing account maintenance and accounting support for all transac-
tions; and
(k) performing such additional shareholder services as may be agreed upon
by the Fund and the Service Agent, provided that any such additional
shareholder services must constitute a permissible non-banking activ-
ity in accordance with the then current regulations of, and interpre-
tations thereof by, the Board of Governors of the Federal Reserve Sys-
tem, if applicable.
Each agreement with a Service Agent is governed by a Shareholder Service
Plan (the "Service Plan") that has been adopted by the Fund's Board of Trust-
ees. Pursuant to the Service Plan, the Board of Trustees reviews, at least
quarterly, a written report of the amounts expended under each agreement with
Service Agents and the purposes for which the expenditures were made. In addi-
tion, arrangements with Service Agents must be approved annually by a majority
of the Fund's Trustees, including a majority of the Trustees who are not "in-
terested persons" of the company as defined in the 1940 Act and have no direct
or indirect financial interest in such arrangements.
The Board of Trustees has approved the arrangements with Service Agents
based on information provided by the Fund's service contractors that there is
a reasonable likelihood that the arrangements will benefit the Fund and its
shareholders by affording the Fund greater flexibility in connection with the
servicing of the accounts of the beneficial owners of its shares in an effi-
cient manner. Any material amendment to the Fund's arrangements with Service
Agents must be approved by
16
<PAGE>
a majority of the Fund's Board of Trustees (including a majority of the disin-
terested Trustees). So long as the arrangements with Service Agents are in ef-
fect, the selection and nomination of the members of the Fund's Board of
Trustees who are not "interested persons" (as defined in the 1940 Act) of the
Company will be committed to the discretion of such non-interested Trustees.
Pursuant to Rule 12b-1 under the 1940 Act, the Fund has adopted a Distribu-
tion Plan for the Service Class Shares of the Fund (the "Distribution Plan").
The Distribution Plan permits the Fund to pay for certain distribution, promo-
tional and related expenses involved in the marketing of only the Service
Class Shares.
The Distribution Plan permits the Service Class Shares, pursuant to the Dis-
tribution Agreement, to pay a monthly fee to the Distributor for its services
and expenses in distributing and promoting sales of the Service Class Shares.
These expenses include, among other things, preparing and distributing adver-
tisements, sales literature and prospectuses and reports used for sales pur-
poses, compensating sales and marketing personnel, and paying distribution and
maintenance fees to securities brokers and dealers who enter into agreements
with the Distributor. In addition, the Service Class Shares may make payments
directly to other unaffiliated parties, who either aid in the distribution of
their shares or provide services to the Class.
The maximum annual aggregate fee payable by the Fund under the Service and
Distribution Plans (the "Plans"), is 0.75% of the Service Class Shares' aver-
age daily net assets for the year. The Fund's Board of Trustees may reduce
this amount at any time. Although the maximum fee payable under the 12b-1 Plan
relating to the Service Class Shares is 0.75% of average daily net assets of
such class, the Board of Trustees has determined that the annual fee, payable
on a monthly basis, under the Plans relating to the Service Class Shares, cur-
rently cannot exceed 0.50% of the average daily net assets represented by the
Service Class. While the current fee which will be payable under the Service
Plan and Distribution Plan has been set at 0.15% and 0.25%, respectively, the
Plans permit a full 0.75% on all assets to be paid at any time following ap-
propriate Board approval.
All of the distribution expenses incurred by the Distributor and others,
such as broker/dealers, in excess of the amount paid by the Service Class
Shares will be borne by such persons without any reimbursement from such Clas-
ses. Subject to seeking best price and execution, the Fund may, from time to
time, buy or sell portfolio securities from or to firms which receive payments
under the Plans. From time to time, the Distributor may pay additional amounts
from its own resources to dealers for aid in distribution or for aid in pro-
viding administrative services to shareholders.
The Plans, the Distribution Agreement and the form of dealer's and services
agreements have all been approved by the Board of Trustees of the Fund, in-
cluding
17
<PAGE>
a majority of the Trustees who are not "interested persons" (as defined in the
1940 Act) of the Fund and who have no direct or indirect financial interest in
the Plans or any related agreements, by vote cast in person at a meeting duly
called for the purpose of voting on the Plans and such Agreements. Continua-
tion of the Plans, the Distribution Agreement and the related agreements must
be approved annually by the Board of Trustees in the same manner, as specified
above. The Newbold's Equity Portfolio Service Class Shares have not been of-
fered prior to the date of this Statement.
Each year the Trustees must determine whether continuation of the Plans is
in the best interest of the shareholders of Service Class Shares and that
there is a reasonable likelihood of the Plans providing a benefit to the
Class. The Plans, the Distribution Agreement and the related agreements with
any broker-dealer or others relating to the Class may be terminated at any
time without penalty by a majority of those Trustees who are not "interested
persons" or by a majority vote of the outstanding voting securities of the
Class. Any amendment materially increasing the maximum percentage payable un-
der the Plans must likewise be approved by a majority vote of the relevant
Class' outstanding voting securities, as well as by a majority vote of those
Trustees who are not "interested persons." Also, any other material amendment
to the Plans must be approved by a majority vote of the Trustees including a
majority of the Trustees of the Fund having no interest in the Plans. In addi-
tion, in order for the Plans to remain effective, the selection and nomination
of Trustees who are not "interested persons" of the Fund must be effected by
the Trustees who themselves are not "interested persons" and who have no di-
rect or indirect financial interest in the Plans. Persons authorized to make
payments under the Plans must provide written reports at least quarterly to
the Board of Trustees for their review. The NASD has adopted amendments to its
Rules of Fair Practice relating to investment company sales charges. The Fund
and the Distributor intend to operate in compliance with these rules.
PORTFOLIO TRANSACTIONS
The Investment Advisory Agreement authorizes the Adviser to select the bro-
kers or dealers that will execute the purchases and sales of investment secu-
rities for the Portfolio and directs the Adviser to use its best efforts to
obtain the best execution with respect to all transactions for the Portfolio.
The Adviser may, however, consistent with the interests of the Portfolio, se-
lect brokers on the basis of the research, statistical and pricing services
they provide to the Portfolio. Information and research received from such
brokers will be in addition to, and not in lieu of, the services required to
be performed by the Adviser under the Investment Advisory Agreement. A commis-
sion paid to such brokers may be higher than that which another qualified bro-
ker would have charged for effecting the same transaction, provided that such
commissions are paid in compliance with the Securities Exchange Act of 1934,
as amended, and that the Adviser determines in good faith that
18
<PAGE>
such commission is reasonable in terms either of the transaction or the over-
all responsibility of the Adviser to the Portfolio and the Adviser's other
clients.
It is not the Fund's practice to allocate brokerage or effect principal
transactions with dealers on the basis of sales of shares which may be made
through broker-dealer firms. However, the Adviser may place portfolio orders
with qualified broker-dealers who refer clients to the Adviser. During the
fiscal years ended April 30, 1995 and April 30, 1996, the entire Fund paid
brokerage commissions of approximately $15,000 and $39,000, respectively.
Some securities considered for investment by the Portfolio may also be ap-
propriate for other clients served by the Adviser. If purchases or sales of
securities consistent with the investment policies of the Portfolio and one or
more of these other clients served by the Adviser is considered at or about
the same time, transactions in such securities will be allocated among the
Portfolio and clients in a manner deemed fair and reasonable by the Adviser.
Although there is no specified formula for allocating such transactions, the
various allocation methods used by the Adviser, and the results of such allo-
cations, are subject to periodic review by the Fund's Board of Trustees.
ADMINISTRATIVE SERVICES
As stated in the Prospectus, the Board of Trustees of the Fund approved a
new Fund Administration Agreement between UAM Fund Services, Inc., a wholly
owned subsidiary of UAM, and the Fund. The Fund's Trustees also approved a Mu-
tual Fund Services Agreement between UAM Fund Services, Inc. and Chase Global
Funds Service Company. The services provided by UAM Fund Services, Inc. and
Chase Global Funds Services Company and the basis of the fees payable by the
Fund under the Fund Administration Agreement are described in the Portfolios'
Prospectus. Prior to April 15, 1996, Chase Global Funds Services Company or
its predecessor, Mutual Funds Service Company, provided certain administrative
services to the Fund under an Administration Agreement between the Fund and
U.S. Trust Company of New York.
The basis of the fees paid to the Sub-Administrator for the period September
13, 1995 to April 14, 1996 was as follows: the Fund paid a monthly fee for its
services which on an annualized basis equaled 0.20% of the first $200 million
in combined assets; plus 0.12% of the next $800 million in combined assets;
plus 0.08% on assets over $1 billion but less than $3 billion; plus 0.06% on
assets over $3 billion. The fees were allocated among the Portfolios on the
basis of their relative assets and were subject to a designated minimum fee
schedule per Portfolio, which ranged from $2,000 per month upon inception of a
Portfolio to $70,000 annually after two years. For the period ended April 30,
1996, administrative services fees paid to the Sub-Administrator by the
Newbold's Equity Portfolio totaled
19
<PAGE>
$21,891. For the period April 15, 1996 to April 30, 1996, UAM Fund Services,
Inc. earned $2,109 from the Newbold's Equity Portfolio as Administrator. The
services provided by the Administrator and the Sub-Administrator and the fees
payable to both effective April 15, 1996 are described in the Portfolio's Pro-
spectuses.
PERFORMANCE CALCULATIONS
PERFORMANCE
The Portfolio may from time to time quote various performance figures to il-
lustrate the past performance of each class of the Portfolio. Performance quo-
tations by investment companies are subject to rules adopted by the Commis-
sion, which require the use of standardized performance quotations or, alter-
natively, that every non-standardized performance quotation furnished by the
Fund be accompanied by certain standardized performance information computed
as required by the Commission. Average annual compounded total return quota-
tions used by the Fund are based on the standardized methods of computing per-
formance mandated by the Commission. An explanation of the method used to com-
pute or express performance follows.
TOTAL RETURN
The average annual total return of the Portfolio is determined by finding
the average annual compounded rates of return over 1, 5 and 10 year periods
that would equate an initial hypothetical $1,000 investment to its ending re-
deemable value. The calculation assumes that all dividends and distributions
are reinvested when paid. The quotation assumes the amount was completely re-
deemed at the end of each 1, 5 and 10 year period and the deduction of all ap-
plicable Fund expenses on an annual basis. Since Service Class Shares of the
Portfolio bear additional service and distribution expenses, the average an-
nual total return of the Service Class Shares of the Portfolio will generally
be lower than that of Institutional Class Shares.
These figures are calculated according to the following formula:
P (1 + T)/n/ = ERV
where:
P = a hypothetical initial payment of $1,000
T = average annual total return
N = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment made at
the beginning of the 1, 5 or 10 year periods at the end of the 1,
5 or 10 year periods (or fractional portion thereof).
The average annual total rate of return for the Newbold's Equity Portfolio
Institutional Class Shares from inception on September 13, 1995 to October 31,
1996 is 16.98%. The average annual total return for the one-year period ended
October 31, 1996 for such Shares is 12.99%.
20
<PAGE>
Service Class Shares of the Newbold's Equity Portfolio were not offered as
of October 31, 1996. Accordingly, no total return figures are available.
COMPARISONS
To help investors better evaluate how an investment in the Portfolio might
satisfy their investment objective, advertisements regarding the Fund may dis-
cuss various measures of Fund performance as reported by various financial
publications. Advertisements may also compare performance (as calculated
above) to performance as reported by other investments, indices and averages.
The following publications, indices and averages may be used:
(a) Dow Jones Composite Average or its component averages -- an unmanaged
index composed of 30 blue-chip industrial corporation stocks (Dow
Jones Industrial Average), 15 utilities company stocks and 20 trans-
portation stocks. Comparisons of performance assume reinvestment of
dividends.
(b) Standard & Poor's 500 Stock Index or its component indices -- an un-
managed index composed of 400 industrial stocks, 40 financial stocks,
40 utilities stocks and 20 transportation stocks. Comparisons of per-
formance assume reinvestment of dividend.
(c) The New York Stock Exchange composite or component indices -- unman-
aged indices of all industrial, utilities, transportation and finance
stocks listed on the New York Stock Exchange.
(d) Wilshire 5000 Equity Index or its component indices -- represents the
return on the market value of all common equity securities for which
daily pricing is available. Comparisons of performance assume rein-
vestment of dividends.
(e) Lipper -- Mutual Fund Performance Analysis and Lipper -- Fixed Income
Fund Performance Analysis -- measure total return and average current
yield for the mutual fund industry. Rank individual mutual fund per-
formance over specified time periods, assuming reinvestment of all
distributions, exclusive of any applicable sales charges.
(f) Morgan Stanley Capital International EAFE Index and World Index --
respectively, arithmetic, market value-weighted averages of the per-
formance of over 900 securities listed on the stock exchanges of
countries in Europe, Australia and the Far East, and over 1,400 secu-
rities listed on the stock exchanges of these continents, including
North America.
(g) Goldman Sachs 100 Convertible Bond Index -- currently includes 67
bonds and 33 preferred. The original list of names was generated by
screening for convertible issues of 100 million or greater in market
capitalization. The index is priced monthly.
(h) Salomon Brothers GNMA Index -- includes pools of mortgages originated by
private lenders and guaranteed by the mortgage pools of the Govern-ment
National Mortgage Association.
21
<PAGE>
(i) Salomon Brothers High Grade Corporate Bond Index -- consists of pub-
licly issued, non-convertible corporate bonds rated AA or AAA. It is a
value-weighted, total return index, including approximately 800 issues
with maturities of 12 years or greater.
(j) Salomon Brothers Broad Investment Grade Bond -- is a market-weighted
index that contains approximately 4,700 individually priced investment
grade corporate bonds rated BBB or better, U.S. Treasury/agency issues
and mortgage pass through securities.
(k) Lehman Brothers Long-Term Treasury Bond -- is composed of all bonds
covered by the Lehman Brothers Treasury Bond Index with maturities of
10 years or greater.
(l) NASDAQ Industrial Index -- is composed of more than 3,000 industrial
issues. It is a value-weighted index calculated on price change only
and does not include income.
(m) Value Line -- composed of over 1,600 stocks in the Value Line Invest-
ment Survey.
(n) Russell 2000 -- composed of the 2,000 smallest stocks in the Russell
3000, a market value-weighted index of the 3,000 largest U.S. public-
ly-traded companies.
(o) Composite Indices -- 60% Standard & Poor's 500 Stock Index, 30% Lehman
Brothers Long-Term Treasury Bond and 10% U.S. Treasury Bills; 70%
Standard & Poor's 500 Stock Index and 30% NASDAQ Industrial Index; 35%
Standard & Poor's 500 Stock Index and 65% Salomon Brothers High Grade
Bond Index; all stocks on the NASDAQ system exclusive of those traded
on an exchange, and 65% Standard & Poor's 500 Stock Index and 35% Sal-
omon Brothers High Grade Bond Index.
(p) CDA Mutual Fund Report published by CDA Investment Technologies,
Inc. -- analyzes price, current yield, risk, total return and average
rate of return (average compounded growth rate) over specified time
periods for the mutual fund industry.
(q) Mutual Fund Source Book published by Morningstar, Inc. -- analyzes
price, yield, risk and total return for equity funds.
(r) Financial publications: Business Week, Changing Times, Financial
World, Forbes, Fortune, Money, Barron's, Consumer's Digest, Financial
Times, Global Investor, Wall Street Journal and Weisenberger Invest-
ment Companies Service -- publications that rate fund performance over
specified time periods.
(s) Consumer Price Index (or Cost of Living Index), published by the U.S.
Bureau of Labor Statistics -- a statistical measure of change over
time in the price of goods and services in major expenditure groups.
22
<PAGE>
(t) Stocks, Bonds, Bills and Inflation, published by Ibbotson Associ-
ates -- historical measure of yield, price and total return for com-
mon and small company stock, long-term government bonds, U.S. Treasury
bills and inflation.
(u) Savings and Loan Historical Interest Rates -- as published by the U.S.
Savings & Loan League Fact Book.
(v) Lehman Brothers Government/Corporate Index -- is a combination of the
Government an Corporate Bond Indices. The Government Index includes
public obligations of the U.S. Treasury, issues of Government agen-
cies, and corporate debt backed by the U.S. Government. The Corporate
Bond Index includes fixed-rate nonconvertible corporate debt. Also in-
cluded are Yankee Bonds and nonconvertible debt issued by or guaran-
teed by foreign or international governments and agencies. All issues
are investment grade (BBB) or higher, with maturities of at least one
year and an outstanding par value of at least $100 million for U.S.
Government issues and $25 million for others. Any security downgraded
during the month is held in the index until month-end and then re-
moved. All returns are market value weighted inclusive of accrued in-
come.
(w) Lehman Brothers Intermediate Government/Corporate Index is an unman-
aged index composed of a combination of the Government and Corporate
Bond Indices. All issues are investment grade (BBB) or higher, with
maturities of one to ten years and an outstanding par value of at
least $l00 million for U.S. Government issues and $25 million for oth-
ers. 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 non-
convertible corporate debt. Also included are Yankee Bonds and noncon-
vertible debt issued by or guaranteed by foreign or international gov-
ernments and agencies. Any security downgraded during the month is
held in the index until month-end and then removed. All returns are
market value weighted inclusive of accrued income.
(x) Historical data supplied by the research departments of First Boston
Corporation; the J.P. Morgan companies; Salomon Brothers; Merrill
Lynch, Pierce, Fenner & Smith; Lehman Brothers, Inc.; and Bloomberg
L.P.
In assessing such comparisons of performance, an investor should keep in
mind that the composition of the investments in the reported indices and aver-
ages is not identical to the composition of investments in the Portfolio, that
the averages are generally unmanaged, and that the items included in the cal-
culations of such averages may not be identical to the formula used by a Port-
folio to calculate its performance. In addition, there can be no assurance
that a Portfolio will continue this performance as compared to such other av-
erages.
23
<PAGE>
GENERAL INFORMATION
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Fund was organized under the name The Regis Fund II as a Delaware busi-
ness trust on May 18, 1994. On October 31, 1995, the name of the Fund was
changed to "UAM Funds Trust." The Fund's principal executive office is located
at One International Place, 44th Floor, Boston, MA 02110; however, all in-
vestor correspondence should be directed to the Fund at UAM Funds Service Cen-
ter, c/o Chase Global Funds Services Company, P.O. Box 2798, Boston, MA 02208-
2798. The Fund's Agreement and Declaration of Trust permits the Fund to issue
an unlimited number of shares of beneficial interest, without par value. The
Trustees have the power to designate one or more series ("Portfolios") or
classes of shares of beneficial interest without further action by sharehold-
ers.
On each matter submitted to a vote of the shareholders, each holder of a
share shall be entitled to one vote for each whole share and a fractional vote
for each fractional share standing in his or her name on the books of the
Fund.
In the event of liquidation of the Fund, the holders of the shares of each
Portfolio or any class thereof that has been established and designated shall
be entitled to receive, when and as declared by the Trustees, the excess of
the assets belonging to that Portfolio, or in the case of a class, belonging
to that Portfolio and allocable to that class, over the liabilities belonging
to that Portfolio or class. The assets so distributable to the holders of
shares of any particular Portfolio or class thereof shall be distributed to
the holders in proportion to the number of shares of that Portfolio or class
thereof held by them and recorded on the books of the Fund. The liquidation of
any Portfolio or class thereof may be authorized at any time by vote of a ma-
jority of the Trustees then in office.
Shareholders of both Classes of the Fund's Portfolios have no pre-emptive or
other rights to subscribe to any additional shares or other securities issued
by the Fund or any Portfolio, except as the Trustees in their sole discretion
shall have determined by vote. Both Institutional Class and Service Class
Shares represent an interest in the same assets of a Portfolio and are identi-
cal in all respects except that the Service Class Shares bear certain expenses
related to shareholder servicing and the distribution of such shares, and have
exclusive voting rights with respect to matters relating to such distribution
expenditures.
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
The Fund's policy is to distribute substantially all of the Portfolio's net
investment income, if any, together with any net realized capital gains annu-
ally in the amount and at the times that will avoid both income (including
capital gains) taxes incurred and the imposition of the Federal excise tax on
undistributed income and
24
<PAGE>
capital gains. The amounts of any income dividends or capital gains distribu-
tions cannot be predicted. See discussion under "Dividends, Capital Gains Dis-
tributions and Taxes" in the Prospectuses.
Any dividend or distribution paid shortly after the purchase of shares of
the Portfolio by an investor may have the effect of reducing the per share net
asset value of the Portfolio by the per share amount of the dividend or dis-
tribution. Furthermore, such dividends or distributions, although in effect a
return of capital, are subject to income taxes as set forth in the Prospectus-
es.
As set forth in the Prospectuses, unless the shareholder elects otherwise in
writing, all dividend and capital gains distributions are automatically re-
ceived in additional shares of the respective Portfolio of the Fund at net as-
set value (as of the business day following the record date). This will remain
in effect until the Fund is notified by the shareholder in writing at least
three days prior to the record date that either the Income Option (income div-
idends in cash and capital gains distributions in additional shares at net as-
set value) or the Cash Option (both income dividends and capital gains distri-
butions in cash) has been elected. An account statement is sent to sharehold-
ers whenever an income dividend or capital gains distribution is paid.
Each Portfolio of the Fund will be treated as a separate entity (and hence
as a separate "regulated investment company") for Federal tax purposes. Any
net capital gains recognized by the Portfolio will be distributed to its in-
vestors without need to offset (for Federal income tax purposes) such gains
against any net capital losses of another Portfolio.
FEDERAL TAXES
In order for the Portfolio to continue to qualify for Federal income tax
treatment as a regulated investment company under the Internal Revenue Code of
1986, as amended (the "Code"), at least 90% of the Portfolio's gross income
for a taxable year must be derived from certain qualifying income, i.e., divi-
dends, interest, income derived from loans of securities and gains from the
sale or other disposition of stock, securities or foreign currencies, or other
related income, including gains from options, futures and forward contracts,
derived with respect to its business investing in stock, securities or curren-
cies. Any net gain realized from the closing out of futures contracts will,
therefore, generally be qualifying income for purposes of the 90% requirement.
Qualification as a regulated investment company also requires that less than
30% of the Portfolio's gross income be derived from the sale or other disposi-
tion of stock, securities, options, futures or forward contracts (including
certain foreign currencies not directly related to the Fund's business of in-
vesting in stock or securities) held less than three months. In order to avoid
realizing excessive gains on securities held for less than three months, the
Portfolio may be required to defer the closing out of futures contracts beyond
the
25
<PAGE>
time when it would otherwise be advantageous to do so. It is anticipated that
unrealized gains on futures contracts which have been open for less than three
months as of the end of the Portfolio's taxable year, and which are recognized
for tax purposes, will not be considered gains on securities held for less
than three months for the purposes of the 30% test.
Except for transactions the Portfolio has identified as hedging transac-
tions, the Portfolio is required for Federal income tax purposes to recognize
as income for the taxable year its net unrealized gains and losses on forward
currency and futures contracts as of the end of the taxable year as well as
those actually realized during the year. In most cases, any such gain or loss
recognized with respect to a regulated futures contract is considered to be
60% long-term capital gain or loss and 40% short-term capital gain or loss
without regard to the holding period of the contract. Recognized gain or loss
attributable to a foreign currency forward contract is treated as 100% ordi-
nary income. Furthermore, foreign currency futures contracts which are in-
tended to hedge against a change in the value of securities held by the Port-
folio may affect the holding period of such securities and, consequently, the
nature of the gain or loss on such securities upon disposition.
The Portfolio will distribute to shareholders annually any net capital gains
which have been recognized for Federal income tax purposes (including
unrealized gains at the end of the Portfolio's taxable year) on futures trans-
actions. Such distribution will be combined with distributions of capital
gains realized on the Portfolio's other investments, and shareholders will be
advised on the nature of the payment.
CODE OF ETHICS
The Fund has adopted a Code of Ethics which restricts to a certain extent
personal transactions by access persons of the Fund and imposes certain dis-
closure and reporting obligations.
FINANCIAL STATEMENTS
The Financial Statements of the Newbold's Equity Portfolio Institutional
Class Shares for the period from inception on September 13, 1995 to April 30,
1996 and for the six-months ended October 31, 1996; and the Financial High-
lights for the respective periods presented which appear in the Portfolio's
1996 Annual Financial Statements (and the report thereon of Price Waterhouse
LLP, the Fund's independent accountants, also appearing therein) and in the
Semi-Annual Report to Shareholders are attached to this SAI.
26
<PAGE>
NEWBOLD'S EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
October 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE+
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (94.6%)
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE (5.3%)
Boeing Co................................................... 2,500 $ 238,438
Chase Manhattan Corp........................................ 2,700 231,525
United Technologies Corp.................................... 2,591 333,591
-----------
803,554
- --------------------------------------------------------------------------------
AUTOMOTIVE (1.0%)
Genuine Parts Co............................................ 3,550 155,312
- --------------------------------------------------------------------------------
BANKS (5.6%)
Bank of Boston Corp......................................... 2,500 160,000
Fleet Financial Group, Inc.................................. 9,300 463,837
NationsBank Corp............................................ 2,500 235,625
-----------
859,462
- --------------------------------------------------------------------------------
BEVERAGES, FOOD & TOBACCO (4.9%)
Archer-Daniels-Midland Co................................... 17,059 371,033
RJR Nabisco Holdings Corp................................... 13,170 380,284
-----------
751,317
- --------------------------------------------------------------------------------
CHEMICALS (6.3%)
Great Lakes Chemical Corp. ................................. 4,900 255,413
Mallinckrodt Group, Inc. ................................... 5,100 221,850
Witco Corp.................................................. 2,300 71,300
W.R. Grace & Co............................................. 7,900 418,700
-----------
967,263
- --------------------------------------------------------------------------------
COMPUTERS (2.9%)
International Business Machines Corp........................ 3,400 438,600
- --------------------------------------------------------------------------------
CONSTRUCTION (1.6%)
Masco Corp.................................................. 7,550 236,881
- --------------------------------------------------------------------------------
ENERGY (10.9%)
Amoco Corp.................................................. 4,950 374,962
Atlantic Richfield Co....................................... 2,000 265,000
Exxon Corp.................................................. 2,985 264,546
Mobil Corp.................................................. 2,500 291,875
Repsol S.A. ADR............................................. 4,300 140,287
USX-Marathon Group.......................................... 15,200 332,500
-----------
1,669,170
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-2
<PAGE>
NEWBOLD'S EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
October 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE+
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
- --------------------------------------------------------------------------------
FINANCIAL SERVICES (3.1%)
St. Paul Cos., Inc. ........................................ 5,800 $ 315,375
Travelers Group, Inc. ...................................... 3,000 162,750
-----------
478,125
- --------------------------------------------------------------------------------
HEALTH CARE (2.3%)
Bristol-Myers Squibb Co..................................... 3,300 348,975
Fresenius Medical Care ADR.................................. 1 24
-----------
348,999
- --------------------------------------------------------------------------------
TRANSPORTATION (1.5%)
Burlington Northern Santa Fe................................ 2,700 222,412
- --------------------------------------------------------------------------------
INSURANCE (7.3%)
Aetna, Inc. ................................................ 8,650 578,469
General RE Corp. ........................................... 1,500 220,875
ITT Hartford Group, Inc. ................................... 4,900 308,700
-----------
1,108,044
- --------------------------------------------------------------------------------
MACHINE (1.9%)
Case Corp. ................................................. 6,100 283,650
- --------------------------------------------------------------------------------
MANUFACTURING (4.5%)
Cooper Industries, Inc. .................................... 5,200 209,300
Harnischfeger Industries, Inc............................... 11,900 476,000
-----------
685,300
- --------------------------------------------------------------------------------
METALS (3.4%)
Aluminum Company of America................................. 6,200 363,475
Reynolds Metals Co.......................................... 2,800 157,500
-----------
520,975
- --------------------------------------------------------------------------------
MULTI-INDUSTRY (1.1%)
Canadian Pacific, Ltd....................................... 6,800 171,700
- --------------------------------------------------------------------------------
OFFICE EQUIPMENT (2.2%)
Pitney Bowes, Inc........................................... 2,350 131,306
Xerox Corp.................................................. 4,500 208,688
-----------
339,994
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-3
<PAGE>
NEWBOLD'S EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
October 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE+
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
- --------------------------------------------------------------------------------
PAPER & PACKAGING (3.9%)
James River Corp. of Virginia............................... 11,600 $ 365,400
Mead Corp................................................... 4,050 229,838
-----------
595,238
- --------------------------------------------------------------------------------
RETAIL (2.2%)
American Stores Co.......................................... 7,900 326,863
Circuit City Stores, Inc.................................... 400 13,100
-----------
339,963
- --------------------------------------------------------------------------------
SERVICES (5.0%)
Browning-Ferris Industries, Inc............................. 2,900 76,125
Dun & Bradstreet Corp....................................... 6,000 347,250
WMX Technologies, Inc....................................... 9,900 340,313
-----------
763,688
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS (7.5%)
AT&T Corp. ................................................. 7,750 270,281
GTE Corp. .................................................. 7,800 328,575
NYNEX Corp.................................................. 12,300 547,350
-----------
1,146,206
- --------------------------------------------------------------------------------
TRANSPORTATION (1.0%)
Ryder System, Inc. ......................................... 2,600 77,350
Southwest Airlines Co....................................... 3,400 76,500
-----------
153,850
- --------------------------------------------------------------------------------
UTILITIES (9.2%)
Baltimore Gas & Electric Co. ............................... 4,100 111,725
Entergy Corp................................................ 11,650 326,200
GPU, Inc.................................................... 6,550 215,331
PECO Energy Co.............................................. 12,400 313,100
PanEnergy Corp.............................................. 4,550 175,175
TransCanada Pipelines Ltd. ................................. 15,500 261,563
-----------
1,403,094
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(COST $13,372,829)......................................... 14,442,797
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-4
<PAGE>
NEWBOLD'S EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
October 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE+
- -------------------------------------------------------------------------------
<S> <C> <C>
PREFERRED STOCK (0.0%)
- -------------------------------------------------------------------------------
Fresenius Medical Care, Class D
(COST $1,486)......................................... 7,900 $ 1,027
- -------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCK (0.2%)
RJR Nabisco Holdings, Series C, $0.6012
(COST $35,266)........................................ 5,650 31,781
- -------------------------------------------------------------------------------
<CAPTION>
FACE
AMOUNT
- -------------------------------------------------------------------------------
<S> <C> <C>
SHORT-TERM INVESTMENT (6.3%)
- -------------------------------------------------------------------------------
REPURCHASE AGREEMENT
Chase Securities, Inc. 5.58%, dated 10/31/96, due
11/01/96, to be repurchased at $970,150, collateral-
ized by $937,612 of various U.S. Treasury Notes,
5.875%-7.75%, due 3/31/99-11/30/99, valued at $970,002
(COST $970,000)....................................... $970,000 970,000
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS (101.1%)
(COST $14,379,581)(a).................................. 15,445,605
- -------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (NET) (-1.1%)............... (172,599)
- -------------------------------------------------------------------------------
NET ASSETS (100%)........................................ $15,273,006
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
+ See Note A to Financial Statements.
ADR--American Depository Receipt
(a) The cost for federal income tax and book purposes was $14,379,581. At Octo-
ber 31, 1996, net unrealized appreciation for all securities based on tax
cost was $1,066,024. This consisted of aggregate gross unrealized apprecia-
tion for securities of $1,360,308 and aggregate gross unrealized deprecia-
tion for all securities of $294,284.
The accompanying notes are an integral part of the financial statements.
F-5
<PAGE>
NEWBOLD'S EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1996 (Unaudited)
<TABLE>
- -------------------------------------------------------------------------------
<S> <C>
ASSETS
Investments, at Cost............................................. $ 14,379,581
============
Investments, at Value............................................ $ 15,445,605
Cash............................................................. 2,744
Dividends Receivable............................................. 25,167
Receivable for Portfolio Shares Sold............................. 748
Interest Receivable.............................................. 150
Other Assets..................................................... 441
- -------------------------------------------------------------------------------
Total Assets.................................................... 15,474,855
- -------------------------------------------------------------------------------
LIABILITIES
Payable for Investments Purchased................................ 165,219
Payable for Administrative Fees--Note C.......................... 9,308
Payable for Investment Advisory Fees--Note B..................... 6,109
Payable for Trustees' Fees--Note F............................... 628
Other Liabilities................................................ 20,585
- -------------------------------------------------------------------------------
Total Liabilities............................................... 201,849
- -------------------------------------------------------------------------------
NET ASSETS........................................................ $ 15,273,006
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NET ASSETS CONSISTS OF:
Paid in Capital.................................................. 13,492,416
Undistributed Net Investment Income.............................. 17,503
Accumulated Net Realized Gain.................................... 697,063
Unrealized Appreciation.......................................... 1,066,024
- -------------------------------------------------------------------------------
NET ASSETS........................................................ $ 15,273,006
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
INSTITUTIONAL CLASS SHARES
Shares Issued and Outstanding (Unlimited Authorization, no par
value)......................................................... 1,328,544
Net Asset Value, Offering and Redemption Price Per Share......... $ 11.50
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-6
<PAGE>
NEWBOLD'S EQUITY PORTFOLIO
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
OCTOBER 31,
1996
(UNAUDITED)
- --------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Dividends................................................. $ 215,180
Interest.................................................. 19,994
- --------------------------------------------------------------------------------
Total Income............................................. 235,174
- --------------------------------------------------------------------------------
EXPENSES
Investment Advisory Fees--Note B
Basic Fees............................................... $36,436
Less: Fees Waived........................................ (32,753) 3,683
-------
Registration Fees......................................... 7,912
Administrative Fees--Note C............................... 34,126
Custodian Fees--Note D.................................... 5,133
Audit Fees................................................ 5,514
Printing Fees............................................. 4,164
Trustees' Fees--Note F.................................... 1,337
Other Expenses............................................ 3,605
- --------------------------------------------------------------------------------
Net Expenses............................................. 65,474
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME...................................... 169,700
- --------------------------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS........................... 592,473
NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION ON IN-
VESTMENTS................................................ (232,468)
- --------------------------------------------------------------------------------
NET GAIN ON INVESTMENTS.................................... 360,005
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS....... $ 529,705
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-7
<PAGE>
NEWBOLD'S EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED SEPTEMBER 13,
OCTOBER 31, 1995* TO
1996 APRIL 30,
(UNAUDITED) 1996
- ----------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income................................ $ 169,700 $ 163,403
Net Realized Gain.................................... 592,473 128,335
Net Change in Unrealized Appreciation/Depreciation... (232,468) 971,567
- ----------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Operations........................................ 529,705 1,263,305
- ----------------------------------------------------------------------------------
DISTRIBUTIONS:
Net Investment Income................................ (182,353) (133,247)
Net Realized Gain.................................... -- (23,745)
- ----------------------------------------------------------------------------------
Total Distributions................................. (182,353) (156,992)
- ----------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS: (1)
Issued--Regular...................................... 1,032,864 18,446,170
--In Lieu of Cash Distributions.................... 155,715 134,188
Redeemed............................................. (352,581) (5,597,015)
- ----------------------------------------------------------------------------------
Net Increase from Capital Share Transactions........ 835,998 12,983,343
- ----------------------------------------------------------------------------------
Total Increase....................................... 1,183,350 14,089,656
Net Assets:
Beginning of Period.................................. 14,089,656 --
- ----------------------------------------------------------------------------------
End of Period (including undistributed net investment
income of $17,503 and $30,156, respectively)....... $15,273,006 $14,089,656
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
(1)Shares Issued and Redeemed:........................
Shares Issued........................................ 63,653 1,820,335
In Lieu of Cash Distributions........................ 13,811 12,814
Shares Redeemed...................................... (31,787) (550,282)
- ----------------------------------------------------------------------------------
45,677 1,282,867
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
</TABLE>
* Commencement of Operations
The accompanying notes are an integral part of the financial statements.
F-8
<PAGE>
NEWBOLD'S EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
SIX MONTHS
ENDED SEPTEMBER 13,
OCTOBER 31, 1995* TO
1996 APRIL 30,
(UNAUDITED) 1996
- -------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD................ $ 10.98 $ 10.00
- -------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income.............................. 0.13 0.14
Net Realized and Unrealized Gain on Investments.... 0.53 0.98
- -------------------------------------------------------------------------------
Total From Investment Operations.................. 0.66 1.12
- -------------------------------------------------------------------------------
DISTRIBUTIONS
Net Investment Income.............................. (0.14) (0.12)
Net Realized Gain.................................. -- (0.02)
- -------------------------------------------------------------------------------
Total Distributions............................... (0.14) (0.14)
- -------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD...................... $ 11.50 $ 10.98
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
TOTAL RETURN+....................................... 6.04% 11.31%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period ......................... $15,273 $14,090
Ratio of Expenses to Average Net Assets............ 0.90%** 0.90%**
Ratio of Investment Income to Average Net Assets... 2.33%** 2.27%**
Portfolio Turnover Rate............................ 34% 75%
Average Commission Rate............................ $0.0600 $0.0566
- -------------------------------------------------------------------------------
Voluntary Waived Fees and Expenses Assumed by the
Adviser Per Share................................ $ 0.03 $ 0.06
- -------------------------------------------------------------------------------
</TABLE>
* Commencement of Operations.
** Annualized.
+ 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.
F-9
<PAGE>
NEWBOLD'S EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
UAM Funds Trust and UAM Funds, Inc. (collectively the "UAM Funds") are reg-
istered under the Investment Company Act of 1940, as amended. The Newbold's
Equity Portfolio (the "Portfolio"), a portfolio of UAM Funds Trust, is a di-
versified, open-end management investment company. At October 31, 1996, the
UAM Funds were composed of forty active portfolios. The financial statements
of the remaining portfolios are presented separately. The objective of the
Newbold's Equity Portfolio is to achieve maximum long-term total return, con-
sistent with reasonable risk to principal, by investing primarily in a diver-
sified portfolio of undervalued equity securities of statistically attractive
companies.
A. SIGNIFICANT ACCOUNTING POLICIES: The following significant accounting
policies are in conformity with generally accepted accounting principles. 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 valua-
tion 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 se-
curities 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 provi-
sion for Federal income taxes is required in the financial statements.
3. REPURCHASE AGREEMENTS: In connection with transactions involving re-
purchase 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 monitored 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
F-10
<PAGE>
NEWBOLD'S EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
liquidate the collateral and apply the proceeds in satisfaction of the ob-
ligation. 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. 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. Ex-
penses which cannot be directly attributed are apportioned among the port-
folios 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 as-
sets. Custodian fees for the Portfolio have been increased to include ex-
pense offsets for custodian balance credits.
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. The Adviser has voluntarily agreed to waive a por-
tion 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 ex-
pense offset arrangements, from exceeding 0.90% of average daily net assets.
C. ADMINISTRATION SERVICES: UAM Fund Services, Inc. (the "Administrator"), a
wholly-owned subsidiary of UAM, provides and oversees administrative,
F-11
<PAGE>
NEWBOLD'S EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
fund accounting, dividend disbursing and transfer agent services to the UAM
Funds and AEW under a Fund Administration Agreement (the "Agreement"). Pursu-
ant 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 com-
bined 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 ex-
cess 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 in-
creases to $90,000. In addition, the Administrator receives a Portfolio-spe-
cific monthly fee of 0.06% of average daily net assets of the Portfolio. The
Administrator has entered into a Mutual Funds Service Agreement with Chase
Global Funds Services Company ("CGFSC"), an affiliate of The Chase Manhattan
Bank, 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 Adminis-
trator pays CGFSC a monthly fee. For the period ended October 31, 1996,
$29,819 was paid to CGFSC for their services.
D. CUSTODIAN: Effective July 17, 1996, The Chase Manhattan Bank (the
"Bank"), an affiliate of CGFSC, is custodian for the Portfolio's assets held
in accordance with the custodian agreement. For the period July 17, 1996 to
October 31, 1996, the amount charged to the Portfolio by the Bank aggregated
$1,852, all of which is unpaid at October 31, 1996.
E. 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.
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 ex-
penses incurred in attending Trustee meetings.
G. PURCHASES AND SALES: For the period ended October 31, 1996, the Portfolio
made purchases of $4,942,753 and sales of $4,666,042 of investment securi-
F-12
<PAGE>
NEWBOLD'S EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
ties other than long-term U.S. Government and short-term securities. There
were no purchases or sales of long-term U.S. Government securities.
H. OTHER: At October 31, 1996, 26.7% of total shares outstanding were held
by 2 record shareholders owning more than 10% of the aggregate total shares
outstanding.
F-13
<PAGE>
APPENDIX -- DESCRIPTION OF SECURITIES AND RATINGS
I. DESCRIPTION OF BOND RATINGS
Excerpts from Moody's Investors Service, Inc. ("Moody's") description of its
highest bond ratings: Aaa -- judged to be the best quality; carry the smallest
degree of investment risk: Aa -- judged to be of high quality by all stan-
dards; A -- possess many favorable investment attributes and are to be consid-
ered as higher medium grade obligations; Baa -- considered as lower medium
grade obligations, i.e., they are neither highly protected nor poorly secured.
Excerpts from Standard & Poor's Corporation ("S&P") description of its high-
est bond ratings: AAA -- highest grade obligations; possess the ultimate de-
gree of protection as to principal and interest; AA -- also qualify as high
grade obligations, and in the majority of instances differs from AAA issues
only in small degree; A -- regarded as upper medium grade; have considerable
investment strength but are not entirely free from adverse effects of changes
in economic and trade conditions. Interest and principal are regarded as safe;
BBB -- regarded as borderline between definitely sound obligations and those
where the speculative element begins to predominate; this group is the lowest
which qualifies for commercial bank investment.
II. DESCRIPTION OF U.S. GOVERNMENT SECURITIES
The term "U.S. Government Securities" refers to a variety of securities
which are issued or guaranteed by the United States Government, and by various
instrumentalities which have been established or sponsored by the United
States Government.
U.S. Treasury securities are backed by the "full faith and credit" of the
United States. Securities issued or guaranteed by Federal agencies and U.S.
Government sponsored instrumentalities may or may not be backed by the full
faith and credit of the United States.
In the case of securities not backed by the full faith and credit of the
United States, the investor must look principally to the agency or instrumen-
tality issuing or guaranteeing the obligation for ultimate repayment, and may
not be able to assess a claim against the United States itself in the event
the agency or instrumentality does not meet its commitment. Agencies which are
backed by the full faith and credit of the United States include the Export-
Import Bank, Farmers Home Administration, Federal Financing Bank, and others.
Certain agencies and instrumentalities, such as the GNMA are, in effect,
backed by the full faith and credit of the United States through provisions in
their charters that they may make "indefinite and unlimited" drawings on the
U.S. Treasury, if needed to service its debt. Debt from certain other agencies
and instrumentalities, including the Federal Home Loan Bank and FNMA, is not
guaranteed by the United States, but those institutions are protected by the
discretionary authority of the U.S. Treasury to purchase
A-1
<PAGE>
certain amounts of their securities to assist the institution in meeting its
debt obligations. Finally, other agencies and instrumentalities, such as the
Farm Credit System and the FHLMC, are federally chartered institutions under
Government supervision, but their debt securities are backed only by the credit
worthiness of those institutions, not the U.S. Government.
Some of the U.S. Government agencies that issue or guarantee securities in-
clude the Export-Import Bank of the United States, Farmers Home Administration,
Federal Housing Administration, Maritime Administration, Small Business Admin-
istration, and the Tennessee Valley Authority.
III. DESCRIPTION OF COMMERCIAL PAPER
The Portfolio may invest in commercial paper (including variable amount mas-
ter demand notes) rated A-1 or better by S&P or Prime-1 by Moody's or by S&P.
Commercial paper refers to short-term, unsecured promissory notes issued by
corporations to finance short-term credit needs. Commercial paper is usually
sold on a discount basis and has a maturity at the time of issuance not exceed-
ing nine months. Variable amount master demand notes are demand obligations
that permit the investment of fluctuating amounts at varying market rates of
interest pursuant to arrangement between the issuer and a commercial bank act-
ing as agent for the payees of such notes whereby both parties have the right
to vary the amount of the outstanding indebtedness on the notes. As variable
amount master demand notes are direct lending arrangements between a lender and
a borrower, it is not generally contemplated that such instruments will be
traded, and there is no secondary market for these notes, although they are re-
deemable (and thus immediately repayable by the borrower) at face value, plus
accrued interest, at any time. In connection with the Portfolio's investment in
variable amount master demand notes, the Adviser's investment management staff
will monitor, on an ongoing basis, the earning power, cash flow and other li-
quidity ratios of the issuer and the borrower's ability to pay principal and
interest on demand.
Commercial paper rated A-1 by S&P has the following characteristics: (1) li-
quidity ratios are adequate to meet cash requirements; (2) long-term senior
debt is rated "A" or better; (3) the issuer has access to at least two addi-
tional channels of borrowing; (4) basic earnings and cash flow have an upward
trend with allowance made for unusual circumstances; (5) typically, the is-
suer's industry is well established, and the issuer has a strong position
within the industry; and (6) the reliability and quality of management are un-
questioned. Relative strength or weakness of the above factors determine
whether the issuer's commercial paper is A-1, A-2 or A-3. The rating Prime-1 is
the highest commercial paper rating assigned by Moody's. Among the factors con-
sidered by Moody's in assigning ratings are the following: (1) evaluation of
the management of the issuer; (2) economic evaluation of the issuer's industry
or industries and the appraisal of speculative-type risks which may be inherent
in certain areas; (3) evaluation of the issuer's
A-2
<PAGE>
products in relation to completion and customer acceptance; (4) liquidity; (5)
amount and quality of long term debt; (6) trend of earnings over a period of
ten years; (7) financial strength of a parent company and the relationships
which exist with the issuer; and (8) recognition by the management of issuer of
obligations which may be present or may arise as a result of public interest
questions and preparations to meet such obligations.
IV. DESCRIPTION OF BANK OBLIGATIONS
Time deposits are non-negotiable deposits maintained in a banking institution
for a specified period of time at a stated interest rate. Certificates of de-
posit are negotiable short-term obligations of commercial banks. Variable rate
certificates of deposit are certificates of deposit on which the interest rate
is periodically adjusted prior to their stated maturity based upon a specified
market rate. As a result of these adjustments, the interest rate on these obli-
gations may increase or decrease periodically. Frequently, dealers selling
variable rate certificates of deposit to the Portfolio will agree to repurchase
such instruments, at the Portfolio's option, at par on or near the coupon
dates. The dealers' obligations to repurchase these instruments are subject to
conditions imposed by various dealers. Such conditions typically are the con-
tinued credit standing of the issuer and the existence of reasonably orderly
market conditions. The Portfolio is also able to sell variable rate certifi-
cates of deposit in the secondary market. Variable rate certificates of deposit
normally carry a higher interest rate than comparable fixed rate certificates
of deposit. A banker's acceptance is a time draft drawn on a commercial bank by
a borrower usually in connection with an international commercial transaction
to finance the import, export, transfer or storage of goods. The borrower is
liable for payment as well as the bank which unconditionally guarantees to pay
the draft at its face amount on the maturity date. Most acceptances have matu-
rities of six months or less and are traded in the secondary markets prior to
maturity.
V. DESCRIPTION OF FOREIGN INVESTMENTS
Investors should recognize that investing in foreign companies involves cer-
tain special considerations which are not typically associated with investing
in U.S. companies. Since the securities of foreign companies are frequently de-
nominated in foreign currencies, a Portfolio may be affected favorably or unfa-
vorably by changes in currency rates and in exchange control regulations, and
may incur costs in connection with conversions between various currencies.
As foreign companies are not generally subject to uniform accounting, audit-
ing and financial reporting standards and they may have policies that are not
comparable to those of domestic companies, there may be less information avail-
able about certain foreign companies than about domestic companies. Securities
of some foreign companies are generally less liquid and more volatile than se-
curities of comparable domestic companies. There is generally less government
supervision and regulation of stock exchanges, brokers and listed companies
than in the U.S.
A-3
<PAGE>
In addition, with respect to certain foreign countries, there is the possibil-
ity of expropriation or confiscatory taxation, political or social instability,
or diplomatic developments which could affect U.S. investments in those coun-
tries.
Although the Fund will endeavor to achieve the most favorable execution costs
in its portfolio transactions, fixed commissions on many foreign stock ex-
changes are generally higher than negotiated commissions on U.S. exchanges.
Certain foreign governments levy withholding taxes on dividend and interest
income. Although in some countries a portion of these taxes are recoverable,
the non-recoverable portion of foreign withholding taxes will reduce the income
received from the companies comprising the Fund's Portfolios. However, these
foreign withholding taxes are not expected to have a significant impact.
A-4
<PAGE>
PART B
UAM FUNDS
- -------------------------------------------------------------------------------
TJ CORE EQUITY PORTFOLIO
INSTITUTIONAL SERVICE CLASS SHARES
- -------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION -- JANUARY 3, 1997
This Statement is not a Prospectus but should be read in conjunction with
the Prospectus of the UAM Funds Trust (the "UAM Funds" or the "Fund") for the
TJ Core Equity Portfolio (the "Portfolio") Institutional Service Class Shares
dated January 3, 1997. To obtain the Prospectus, please call the UAM Funds
Service Center:
1-800-638-7983
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Investment Objective and Policies.......................................... 2
Purchase of Shares......................................................... 7
Redemption of Shares....................................................... 8
Shareholder Services....................................................... 9
Investment Limitations..................................................... 10
Management of the Fund..................................................... 11
Investment Adviser......................................................... 14
Service and Distribution Plans............................................. 14
Portfolio Transactions..................................................... 17
Administrative Services.................................................... 18
Performance Calculations................................................... 19
General Information........................................................ 22
Federal Taxes.............................................................. 24
Financial Statements....................................................... 25
Appendix -- Description of Securities and Ratings.......................... A-1
</TABLE>
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The following policies supplement the investment objective and policies of
the TJ Core Equity Portfolio (the "Portfolio") as set forth in the Portfolio's
Prospectus:
FOREIGN SECURITIES
Investors should recognize that investing in foreign companies directly or
through the purchase of American Depositary Receipts ("ADRs") involves certain
special considerations which are not typically associated with investing in
U.S. companies. Since the securities of foreign companies are frequently de-
nominated in foreign currencies, investments may be affected favorably or un-
favorably by changes in currency rates and in exchange control regulations,
and may incur costs in connection with conversions between various currencies.
As foreign companies are not generally subject to uniform accounting, audit-
ing and financial reporting standards and they may have policies that are not
comparable to those of domestic companies, there may be less information
available about certain foreign companies than about domestic companies. Secu-
rities of some foreign companies are generally less liquid and more volatile
than securities of comparable domestic companies. There is generally less gov-
ernment supervision and regulation of stock exchanges, brokers and listed com-
panies than in the U.S. In addition, with respect to certain foreign coun-
tries, there is the possibility of expropriation or confiscatory taxation, po-
litical or social instability, or diplomatic developments which could affect
U.S. investments in those countries.
Certain foreign governments levy withholding taxes on dividend and interest
income. Although in some countries a portion of these taxes are recoverable,
the non-recoverable portion of foreign withholding taxes will reduce the in-
come received from the companies comprising the Portfolios' investments. How-
ever, these foreign withholding taxes are not expected to have a significant
impact.
LENDING OF SECURITIES
The Portfolio may lend its investment securities to qualified brokers, deal-
ers, domestic and foreign banks or other financial institutions, so long as
the terms, the structure and the aggregate amount of such loans are not incon-
sistent with the Investment Company Act of 1940, as amended, (the "1940 Act")
or the Rules and Regulations or interpretations of the Securities and Exchange
Commission (the "SEC") thereunder, which currently require that (a) the bor-
rower pledge and maintain with the Portfolio collateral consisting of cash, an
irrevocable letter of credit issued by a domestic U.S. bank or securities is-
sued or guaranteed by the United States Government having a value at all times
of not less than 100% of the value of the securities loaned, (b) the borrower
add to such collateral whenever the price of the securities loaned rises
(i.e., the borrower "marks to the market" on a daily basis), (c) the loan be
made subject to termination by the Portfolio at any time, and (d) the Portfo-
lio receives reasonable interest on the loan (which may
2
<PAGE>
include the Portfolio investing any cash collateral in interest bearing short-
term investments). As with other extensions of credit, there are risks of de-
lay in recovery or even loss of rights in the securities loaned if the bor-
rower of the securities fails financially. These risks are similar to the ones
involved with repurchase agreements as discussed in the Prospectus.
HEDGING STRATEGIES
The Portfolio may engage in various portfolio strategies to hedge against
adverse movements in the equity, debt and currency markets. The Portfolio may
buy or sell futures contracts, write (i.e., sell) covered call options on its
portfolio securities, purchase put and call options on securities and engage
in transactions in stock index options and stock index futures, and related
options on such futures. Each of these portfolio strategies is described be-
low. Although certain risks are involved in options and future transactions,
the Adviser believes that, because the Portfolio will engage in options and
future transactions only for hedging purposes, the options and futures portfo-
lio strategies of the Portfolio will not subject it to the risks frequently
associated with the speculative use of options and future transactions. While
the Portfolio's use of hedging strategies is intended to reduce the volatility
of the net asset value of the Portfolio shares, the Portfolio's net asset
value will fluctuate. There can be no assurance that the Portfolio's hedging
transactions will be effective. Also, the Portfolio may not necessarily be en-
gaging in hedging activities when movements in any particular equity, debt or
currency market occur.
FUTURES CONTRACTS
The Portfolio may enter into futures contracts for the purposes of hedging,
remaining fully invested and reducing transactions costs. Futures contracts
provide for the future sale by one party and purchase by another party of a
specified amount of a specific security at a specified future time and at a
specified price. Futures contracts which are standardized as to maturity date
and underlying financial instrument are traded on national futures exchanges.
Futures exchanges and trading are regulated under the Commodity Exchange Act
by the Commodity Futures Trading Commission ("CFTC"), a U.S. Government Agen-
cy.
Although futures contracts by their terms call for actual delivery or ac-
ceptance of the underlying securities, in most cases the contracts are closed
out before the settlement date without the making or taking of delivery. Clos-
ing out an open futures position is done by taking an opposite position ("buy-
ing" a contract which has previously been "sold" or "selling" a contract pre-
viously "purchased") in an identical contract to terminate the position. Bro-
kerage commissions are incurred when a futures contract is bought or sold.
Futures traders are required to make a good faith margin deposit in cash or
acceptable securities with a broker or custodian to initiate and maintain open
3
<PAGE>
positions in futures contracts. A margin deposit is intended to assure comple-
tion of the contract (delivery or acceptance of the underlying security) if it
is not terminated prior to the specified delivery date. Minimal initial margin
requirements are established by the futures exchange and may be changed. Bro-
kers may establish deposit requirements which are higher than the exchange
minimums. Generally margin deposits are structured as percentages (e.g., 5%)
of the market value of the contracts being traded. After a futures contract
position is opened, the value of the contract is marked to market daily. If
the futures contract price changes to the extent that the margin on deposit
does not satisfy margin requirements, payment of additional "variation" margin
will be required. Conversely, change in the contract value may reduce the re-
quired margin, resulting in a repayment of excess margin to the contract hold-
er. Variation margin payments are made to and from the futures broker for as
long as the contract remains open. The Portfolio expects to earn interest in-
come on its margin deposits.
Traders in futures contracts may be broadly classified as either "hedgers"
or "speculators". Hedgers use the futures markets primarily to offset unfavor-
able changes in the value of securities otherwise held for investment purposes
or expected to be acquired by them. Speculators are less inclined to own the
securities underlying the futures contracts which they trade and use futures
contracts with the expectation of realizing profits from a fluctuation in in-
terest rates. The Portfolio intends to use futures contracts only for hedging
purposes.
Regulations of the CFTC applicable to the Fund require that all of its
futures transactions constitute bona fide straddles or that the Fund's commod-
ity futures and option positions be for other purposes, to the extent that the
aggregate initial margins and premiums required to establish such non-hedging
positions do not exceed five percent of the liquidation value of the Portfo-
lio. The Portfolio will only sell futures contracts to protect securities it
owns against price declines or purchase contracts to protect against an in-
crease in the price of securities it intends to purchase. As evidence of this
hedging interest, the Portfolio expects that approximately 75% of its futures
contracts purchases will be "completed", that is, equivalent amounts of re-
lated securities will have been purchased or will be purchased by the Portfo-
lio on the settlement date of the futures contracts.
Although techniques other than the sale and purchase of futures contracts
could be used to control the Portfolio's exposure to market fluctuations, the
use of futures contracts may be a more effective means of hedging this expo-
sure. While the Portfolio will incur commission expenses in both opening and
closing out future positions, these costs are lower than transaction costs in-
curred in the purchase and sale of the underlying securities.
RESTRICTIONS ON THE USE OF FUTURES CONTRACTS
The Portfolio will not enter into futures contract transactions to the ex-
tent that, immediately thereafter, the sum of its initial margin deposits on
open contracts
4
<PAGE>
exceeds 5% of the market value of its total assets. In addition, the Portfolio
will not enter into futures contracts to the extent that its outstanding obli-
gations to purchase securities under these contracts would exceed 20% of its
total assets.
RISK FACTORS IN FUTURES TRANSACTIONS
Positions in futures contracts may be closed out only on an exchange which
provides a secondary market for such futures. However, there can be no assur-
ance that a liquid secondary market will exist for any particular futures con-
tract at any specific time. Thus, it may not be possible to close a futures
position. In the event of adverse price movements, the Portfolio would con-
tinue to be required to make daily cash payments to maintain its required mar-
gin. In such situations, if the Portfolio has insufficient cash, it may have
to sell securities to meet daily margin requirements at a time when it may be
disadvantageous to do so. In addition, the Portfolio may be required to make
delivery of the instruments underlying futures contracts it holds. The inabil-
ity to close futures positions also could have an adverse impact on the Port-
folio's ability to effectively hedge.
The Portfolio will minimize the risk that it will be unable to close out a
futures position by only entering into futures which are traded on national
futures exchanges and for which there appears to be a liquid secondary market.
There can be no assurance, however, that a liquid secondary market will exist
for a particular futures contract at any given time.
The risk of loss in trading futures contracts in some strategies can be sub-
stantial due both to the low margin deposits required and the extremely high
degree of leverage involved in futures pricing. As a result, a relatively
small price movement in a futures contract may result in immediate and sub-
stantial loss (as well as gain) to the investor. For example, if at the time
of purchase, 10% of the value of the futures contract is deposited as margin,
a subsequent 10% decrease in the value of the futures contract would result in
a total loss of the margin deposit, before any deduction for the transaction
costs, if the account were then closed out. A 15% decrease would result in a
loss equal to 150% of the original margin deposit if the contract were closed
out. Thus, a purchase or sale of a futures contract may result in excess of
the amount invested in the contract. However, because the futures strategies
of the Portfolio are engaged in only for hedging purposes, the Adviser does
not believe that the Portfolio is subject to the risks of loss frequently as-
sociated with futures transactions. The Portfolio would presumably have sus-
tained comparable losses if, instead of the futures contract, it had invested
in the underlying financial instrument and sold it after the decline.
Utilization of futures transactions by the Portfolio does involve the risk
of imperfect or no correlation where the securities underlying the futures
contracts have different maturities than the Portfolio securities being
hedged. It is also possible that the Portfolio could both lose money on
futures contracts and also experience
5
<PAGE>
a decline in value of portfolio securities. There is also the risk of loss by
the Portfolio of margin deposits in the event of bankruptcy of a broker with
whom the Portfolio has an open position in a futures contract or related op-
tion.
Most futures exchanges limit the amount of fluctuation permitted in futures
contract prices during a single trading day. The daily limit establishes the
maximum amount that the price of a futures contract may vary either up or down
from the previous day's settlement price at the end of a trading session. Once
the daily limit has been reached in a particular type of contract, no trades
may be made on that day at a price beyond that limit. The daily limit governs
only price movement during a particular trading day and, therefore, does not
limit potential losses because the limit may prevent the liquidation of unfa-
vorable positions. Futures contract prices have occasionally moved to the
daily limit for several consecutive trading days with little or no trading
thereby preventing prompt liquidation of futures positions and subjecting some
futures traders to substantial losses.
OPTIONS
The Portfolio may purchase and sell put and call options on securities and
futures contracts for hedging purposes. Investments in options involve some of
the same considerations that are involved in connection with investments in
futures contracts (e.g., the existence of a liquid secondary market). In addi-
tion, the purchase of an option also entails the risk that changes in the
value of the underlying security or contract will not be fully reflected in
the value of the option purchased. Depending on the pricing of the option com-
pared to either the futures contract on which it is based or the price of the
securities being hedged, an option may or may not be less risky than ownership
of the futures contract or such securities.
For example, there are significant differences between the securities,
futures and options markets that could result in an imperfect correlation be-
tween these markets, causing a given transaction not to achieve its objective.
A decision as to whether, when, and how to use options involves the exercise
of skill and judgment by the Adviser, and even a well-conceived transaction
may be unsuccessful because of market behavior or unexpected events.
WRITING COVERED CALL OPTIONS
The principal reason for writing call options is to attempt to realize,
through the receipt of premiums, a greater return than would be realized on
securities alone. By writing covered call options, the Portfolio gives up the
opportunity, while the option is in effect, to profit from any price increase
in the underlying security above the option exercise price. In addition, the
Portfolio's ability to sell the underlying security will be limited while the
option is in effect unless the Portfolio effects a closing purchase transac-
tion. A closing purchase transaction cancels out the Portfolio's position as
the writer of an option by means of offsetting purchase of an identical option
prior to the expiration of the option it has written. Covered call
6
<PAGE>
options serve as a partial hedge against the price of the underlying security
declining. The Portfolio writes only covered options, which means that so long
as the Portfolio is obligated as the writer of the option it will, through its
custodian, have deposited and maintained cash, U.S. Government securities or
high grade liquid debt or equity securities denominated in U.S. dollars with a
value equal to or greater than the exercise price of the underlying securi-
ties.
PURCHASING OPTIONS
The amount of any appreciation in the value of the underlying security sub-
ject to a put will be partially offset by the amount of the premium paid for
the put option and any related transaction costs. Prior to its expiration, a
put option may be sold in a closing sale transaction and profit or loss from a
sale will depend on whether the amount received is more or less than the pre-
mium paid for the put option plus the related transaction costs. A closing
sale transaction cancels out the Portfolio's position as purchaser of an op-
tion by means of an offsetting sale of an identical option prior to the expi-
ration of the option it has purchased. In certain circumstances, the Portfolio
may purchase call options on securities held in its investment portfolio on
which it has written call options or on securities which it intends to pur-
chase.
PURCHASE OF SHARES
Shares of the Portfolio may be purchased without sales commission at the net
asset value per share next determined after an order is received in proper
form by the Fund, and payment is received by the Fund's custodian. The minimum
initial investment required for the Portfolio is $2,500. Certain exceptions to
the minimums may be determined from time to time by the officers of the Fund.
The initial investment minimum for IRA accounts is $500. The initial invest-
ment minimum for spousal IRA accounts is $250. The minimum for any subsequent
investment is $100. An order received in proper form prior to the 4:00 p.m.
close of the New York Stock Exchange (the "Exchange") will be executed at the
price computed on the date of receipt; and an order received not in proper
form or after the 4:00 p.m. close of the Exchange will be executed at the
price computed on the next day the Exchange is open after proper receipt. The
exchange will be closed on the following days: Presidents' Day, February 17,
1997; Good Friday, March 28, 1997; Memorial Day, May 26, 1997; Independence
Day, July 4, 1997 Labor Day, September 1, 1997; Thanksgiving Day, November 27,
1997; Christmas Day, December 25, 1997; and New Year's Day, January 1, 1998.
The Portfolio reserves the right in its sole discretion (1) to suspend the
offering of its shares, (2) to reject purchase orders when in the judgment of
management such rejection is in the best interests of the Fund, and (3) to re-
duce or waive the minimum for initial and subsequent investment for certain
fiduciary accounts such as employee benefit plans or under circumstances where
certain economies can be achieved in sales of the Portfolio's shares.
7
<PAGE>
REDEMPTION OF SHARES
The Portfolio may suspend redemption privileges or postpone the date of pay-
ment (1) during any period that either the Exchange or custodian bank are
closed or trading on the Exchange is restricted as determined by the Commis-
sion, (2) during any period when an emergency exists as defined by the rules
of the Commission as a result of which it is not reasonably practicable for
the Portfolio to dispose of securities owned by it or to fairly determine the
value of its assets, and (3) for such other periods as the Commission may per-
mit. The Fund has made an election with the Commission to pay in cash all re-
demptions requested by any shareholder of record limited in amount during any
90-day period to the lesser of $250,000 or 1% of the net assets of the Fund at
the beginning of such period. Such commitment is irrevocable without the prior
approval of the Commission. Redemptions in excess of the above limits may be
paid, in whole or in part, in investment securities or in cash as the Board of
Trustees may deem advisable; however, payment will be made wholly in cash un-
less the Trustees believe that economic or market conditions exist which would
make such a practice detrimental to the best interests of the Fund. If redemp-
tions are paid in investment securities, such securities will be valued as set
forth in the Prospectus under "How Shares Prices are Determined," and a re-
deeming shareholder would normally incur brokerage expenses if he converted
those securities to cash.
No charge is made by the Portfolio for redemptions. Any redemption may be
more or less than the shareholder's initial cost depending on the market value
of the securities held by the Portfolio.
SIGNATURE GUARANTEES
To protect your account, the Fund and Chase Global Funds Services Company
(the "Sub-Administrator") from fraud, signature guarantees are required for
certain redemptions. Signature guarantees are required for (1) redemptions
where the proceeds are to be sent to someone other than the registered
shareowner(s) or the registered address or (2) share transfer requests. The
purpose of signature guarantees is to verify the identity of the party who has
authorized a redemption.
Signatures must be guaranteed by an "eligible guarantor institution" as de-
fined in Rule 17Ad-15 under the Securities Exchange Act of 1934. Eligible
guarantor institutions include banks, brokers, dealers, credit unions, na-
tional securities exchanges, registered securities associations, clearing
agencies and savings associations. A complete definition of eligible guarantor
institution is available from the Sub-Administrator. Broker-dealers guarantee-
ing signatures must be a member of a clearing corporation or maintain net cap-
ital of at least $100,000. Credit unions must be authorized to issue signature
guarantees. Signature guarantees will be accepted from any eligible guarantor
institution which participates in a signature guarantee program.
8
<PAGE>
The signature guarantee must appear either: (1) on the written request for
redemption; (2) on a separate instrument for assignment ("stock power") which
should specify the total number of shares to be redeemed; or (3) on all stock
certificates tendered for redemption and, if shares held by the Fund are also
being redeemed, on the letter or stock power.
SHAREHOLDER SERVICES
The following supplements the information set forth in the Portfolios' Pro-
spectuses under the heading "Buying, Selling and Exchanging Shares":
EXCHANGE PRIVILEGE
Service Class Shares of the Portfolio may be exchanged for any other Service
Class Shares of a Portfolio included in the UAM Funds which is comprised of
the Fund and UAM Funds, Inc. (For those Portfolios currently offering Service
Class Shares, please call the UAM Funds Service Center.) Exchange requests
should be made by calling the Fund (1-800-638-7983) or by writing to UAM
Funds, UAM Funds Service Center, c/o Chase Global Funds Services Company, P.O.
Box 2798, Boston, MA 02208-2798. The exchange privilege is only available with
respect to Portfolios that are qualified for sale in the shareholder's state
of residence of the other Portfolio.
Any such exchange will be based on the respective net asset values of the
shares involved. There is no sales commission or charge of any kind. Before
making an exchange into a Portfolio, a shareholder should read its Prospectus
and consider the investment objective of the Portfolio to be purchased. You
may obtain a Prospectus for the Portfolio(s) you are interested in by calling
the UAM Funds Service Center at 1-800-638-7983.
Exchange requests may be made either by mail or telephone. Telephone ex-
changes will be accepted only if the certificates for the shares to be ex-
changed are held by the Fund for the account of the shareholder, and the reg-
istration of the two accounts will be identical. Requests for exchanges re-
ceived prior to 4:00 p.m. (Eastern Time) will be processed as of the close of
business on the same day. Requests received after 4:00 p.m. will be processed
on the next business day. Neither the Fund nor the Sub-Administrator will be
responsible for the authenticity of the exchange instructions received by tel-
ephone. Exchanges may also be subject to limitations as to amounts or fre-
quency and to other restrictions established by the Board of Trustees to as-
sure that such exchanges do not disadvantage the Fund and its shareholders.
For Federal income tax purposes an exchange between Portfolios is a taxable
event, and, accordingly, a capital gain or loss may be realized. In a revenue
ruling relating to circumstances similar to the Fund's, an exchange between
series of a Fund was also deemed to be a taxable event. It is likely, there-
fore, that a capital
9
<PAGE>
gain or loss would be realized on an exchange between Portfolios; you may want
to consult your tax adviser for further information in this regard. The ex-
change privilege may be modified or terminated at any time.
TRANSFER OF SHARES
Shareholders may transfer shares to another person by making a written re-
quest to the Fund. The request should clearly identify the account and number
of shares to be transferred, and include the signature of all registered own-
ers and all stock certificates, if any, which are subject to the transfer. The
signature on the letter of request, the stock certificate or any stock power
must be guaranteed in the same manner as described under "Redemption of
Shares." As in the case of redemptions, the written request must be received
in good order before any transfer can be made.
INVESTMENT LIMITATIONS
The following limitations supplement those set forth in the Prospectus.
Whenever an investment limitation sets forth a percentage limitation on in-
vestment or utilization of assets, such limitation shall be determined immedi-
ately after and as a result of the Portfolio's acquisition of such security or
other asset. Accordingly, any later increase or decrease resulting from a
change in values, net assets or other circumstances will not be considered
when determining whether the investment complies with the Portfolio's invest-
ment limitations. Investment limitations (1), (2), (3), (4) and (6) are clas-
sified as fundamental. The Portfolio's fundamental investment limitations can-
not be changed without approval by a "majority of the outstanding shares" (as
defined in the 1940 Act) of the Portfolio. The Portfolio will not:
(1) invest in physical commodities or contracts on physical commodities;
(2) purchase or sell real estate or real estate limited partnerships, al-
though it may purchase and sell securities of companies which deal in
real estate and may purchase and sell securities which are secured by
interests in real estate;
(3) make loans except (i) by purchasing debt securities in accordance
with its investment objectives and (ii) by lending its portfolio se-
curities to banks, brokers, dealers and other financial institutions
so long as such loans are not inconsistent with the 1940 Act, or the
rules and regulations or interpretations of the Commission thereun-
der;
(4) underwrite the securities of other issuers;
(5) invest in stock, bond or interest rate futures and/or options on
futures unless (i) not more than 5% of the Portfolio's assets are re-
quired as deposit to secure obligations under such futures and/or op-
tions on futures contracts provided, however, that in the case of an
option that is
10
<PAGE>
in-the-money at the time of purchase, the in-the-money amount may be
excluded in computing such 5% and (ii) not more than 20% of the Port-
folio's assets are invested in futures and options;
(6) issue senior securities, as defined in the 1940 Act, except that this
restriction shall not be deemed to prohibit the Portfolio from (i)
making any permitted borrowings, mortgages or pledges, or (ii) enter-
ing into options, futures or repurchase transactions;
(7) purchase on margin or sell short except as specified in (5) above;
(8) invest more than an aggregate of 15% of the net assets of the Portfo-
lio, determined at the time of investment, in securities subject to
legal or contractual restrictions on resale or securities for which
there are no readily available markets; and
(9) invest for the purpose of exercising control over management of any
company.
MANAGEMENT OF THE FUND
TRUSTEES AND OFFICERS
The Officers of the Fund manage its day-to-day operations and are responsi-
ble to the Fund's Board of Trustees. The Trustees set broad policies for the
Fund and elect its Officers. The following is a list of the Trustees and Offi-
cers of the Fund and a brief statement of their present positions and princi-
pal occupations during the past five years.
<TABLE>
<C> <S>
JOHN T. BENNETT, JR. Trustee of the Fund; President of Squam Investment
College Road -- RFD 3 Management Company, Inc. and Great Island Investment
Meredith, NH 03253 Company, Inc.; President of Bennett Management Com-
Age 67 pany from 1988 to 1993.
PHILIP D. ENGLISH Trustee of the Fund; President and Chief Executive
16 West Madison Street Officer of Broventure Company, Inc.; Chairman of the
Baltimore, MD 21201 Board of Chektec Corporation and Cyber Scientific,
Age 48 Inc.
WILLIAM A. HUMENUK Trustee of the Fund; Partner in the Philadelphia of-
4000 Bell Atlantic Tower fice of the law firm Dechert Price & Rhoads; Direc-
1717 Arch Street tor, Hofler Corp.
Philadelphia, PA 19103
Age 54
NORTON H. REAMER* Trustee, President and Chairman of the Fund; Presi-
One International Place dent, Chief Executive Officer and a Director of
Boston, MA 02110 United Asset Management Corporation; Director, Part-
Age 60 ner or Trustee of each of the Investment Companies of
the Eaton Vance Group of Mutual Funds.
</TABLE>
- -----------
* These people are deemed to be "interested persons" of the Fund as that term
is defined in the 1940 Act.
11
<PAGE>
<TABLE>
<C> <S>
PETER M. WHITMAN, JR.* Trustee of the Fund; President and Chief Investment
One Financial Center Officer of Dewey Square Investors Corporation ("DSI")
Boston, MA 02111 since 1988; Director and Chief Executive Officer of H.
Age 53 T. Investors, Inc., formerly a subsidiary of DSI.
WILLIAM H. PARK* Vice President of the Fund; Executive Vice President
One International Place and Chief Financial Officer of United Asset Management
Boston, MA 02110 Corporation.
Age 49
GARY L. FRENCH* Treasurer of the Fund; President of UAM Fund Services,
211 Congress Street Inc. and of UAM Fund Distributors, Inc.; formerly Vice
Boston, MA 02110 President of Operations, Development and Control of
Age 45 Fidelity Investment in 1995; Treasurer of the Fidelity
Group of Mutual Funds from 1991 to February 1995.
MICHAEL E. DEFAO* Secretary of the Fund; Vice President and General
211 Congress Street Counsel of UAM Fund Services, Inc. and UAM Fund Dis-
Boston, MA 02110 tributors, Inc.; Associate Attorney of Ropes & Gray (a
Age 28 law firm) from 1993 to February 1995.
ROBERT R. FLAHERTY* Assistant Treasurer of the Fund; Vice President of UAM
211 Congress Street Fund Services, Inc.; formerly Manager of Fund Adminis-
Boston, MA 02110 tration and Compliance of Chase Global Funds Services
Age 32 Company from 1995 to 1996; Deloitte & Touche LLP from
1985 to 1995, Senior Manager.
KARL O. HARTMANN* Assistant Secretary of the Fund; Senior Vice President
73 Tremont Street and General Counsel of Chase Global Funds Services
Boston, MA 02108 Company. Senior Vice President, Secretary and General
Age 41 Counsel of Leland, O'Brien, Rubinstein Associates,
Inc., from November 1990 to November 1991.
</TABLE>
- -----------
* These people are deemed to be "interested persons" of the Fund as that term
is defined in the 1940 Act.
REMUNERATION OF TRUSTEES AND OFFICERS
The Fund pays each Trustee, who is not also an officer or affiliated person,
a $150 quarterly retainer fee per active Portfolio which currently amounts to
$1,050 per quarter. In addition, each unaffiliated Trustee receives a $2,000
meeting fee which is aggregated for all the Trustees and allocated proportion-
ately among the Portfolios of the Fund and UAM Funds, Inc. and reimbursement
for travel and other expenses incurred while attending Board meetings. Trust-
ees who are also officers or affiliated persons receive no remuneration for
their service as Trustees.
12
<PAGE>
The Fund's officers and employees are paid by either the Adviser, United Asset
Management Corporation ("UAM"), the Administrator or the Sub-Administrator and
receive no compensation from the Fund. As of December 6, 1996, the Trustees and
officers of the Fund owned less than 1% of the Fund's outstanding shares.
The following table shows aggregate compensation paid to each of the Fund's
Trustees by the Fund and total compensation paid by the Fund, UAM Funds, Inc.
and AEW Commercial Mortgage Securities Fund, Inc. (collectively the "Fund Com-
plex") in the fiscal year ended April 30, 1996.
COMPENSATION TABLE
<TABLE>
<CAPTION>
(1) (2) (3) (4) (5)
PENSION OR TOTAL COMPENSATION
AGGREGATE RETIREMENT BENEFITS ESTIMATED ANNUAL FROM REGISTRANT AND
NAME OF PERSON, COMPENSATION ACCRUED AS PART OF BENEFITS UPON FUND COMPLEX
POSITION FROM REGISTRANT FUND EXPENSES RETIREMENT PAID TO TRUSTEES
--------------- --------------- ------------------- ---------------- -------------------
<S> <C> <C> <C> <C>
John T. Bennett, Jr. ... $3,396 0 0 $29,600
Trustee
J. Edward Day........... $3,396 0 0 $29,600
Former Trustee
Philip D. English....... $3,396 0 0 $29,600
Trustee
William A. Humenuk...... $3,396 0 0 $29,600
Trustee
</TABLE>
PRINCIPAL HOLDERS OF SECURITIES
As of December 6, 1996, the following persons or organizations held of record
5% or more of the shares of a Portfolio:
TJ Core Equity Portfolio: Hartnat & Co., F/B/O Lillick & Charles, Attn. Corp.
Actions, P.O. Box 4044, Boston, MA, 48.9%*; Hartnat & Co., F/B/O Catholic
Healthcare West Sisters of Mercy, Rochester, NY, 28.8%*; Hartnat & Co., F/B/O
J.H. Baxter, Attn. Corp. Actions, P.O. Box 4044, Boston, MA, 9.5%*; and Hartnat
& Co., F/B/O Allied Waste, Attn. Corp. Actions, P.O. Box 4044, Boston, MA,
7.1%*.
The persons or organizations listed above as owning 25% or more of the out-
standing shares of the Portfolio may be presumed to "control" (as that term is
defined in the 1940 Act) the Portfolio. As a result, those persons or organiza-
tions could have the ability to vote a majority of the shares of the Portfolio
on any matter requiring the approval of shareholders of the Portfolio.
- -----------
* Denotes shares held by a trustee or other fiduciary for which beneficial
ownership is disclaimed or presumed disclaimed.
13
<PAGE>
INVESTMENT ADVISER
CONTROL OF ADVISER
Tom Johnson Investment Management, Inc., is a wholly-owned subsidiary of
UAM, a holding company incorporated in Delaware in December 1980 for the pur-
pose of acquiring and owning firms engaged primarily in institutional invest-
ment management. Since its first acquisition in August 1983, UAM has acquired
or organized approximately 45 such wholly-owned affiliated firms (the "UAM Af-
filiated Firms"). UAM believes that permitting UAM Affiliated Firms to retain
control over their investment advisory decisions is necessary to allow them to
continue to provide investment management services that are intended to meet
the particular needs of their respective clients.
Accordingly, after acquisition by UAM, UAM Affiliated Firms continue to op-
erate under their own firm name, with their own leadership and individual in-
vestment philosophy and approach. Each UAM Affiliated Firm manages its own
business independently on a day-to-day basis. Investment strategies employed
and securities selected by UAM Affiliated Firms are separately chosen by each
of them. Several UAM Affiliated Firms also act as investment advisers to sepa-
rate series or Portfolios of UAM Funds, Inc., a registered investment company.
ADVISORY FEES
As compensation for services rendered by the Adviser under the Investment
Advisory Agreement, the Portfolio pays the Adviser an annual fee in monthly
installments, calculated by applying the following annual percentage rates to
the Portfolio's average daily net assets for the month:
<TABLE>
<S> <C>
TJ Core Equity Portfolio............................................... 0.75%
</TABLE>
From September 28, 1995 (date of commencement) to April 30, 1996, the TJ
Core Equity Portfolio paid advisory fees of $0. During this period, the Ad-
viser voluntarily waived advisory fees of $4,000. Until January 1, 1998, the
Adviser has voluntarily agreed to waive all or a portion of its advisory fees
and to assume operating expenses otherwise payable by the Portfolio, if neces-
sary, in order to keep the Portfolio's total annual operating expenses from
exceeding 1.25% of average daily net assets.
SERVICE AND DISTRIBUTION PLANS
As stated in the Prospectus, UAM Fund Distributors, Inc. (the "Distributor")
may enter into agreements with broker-dealers and other financial institutions
("Service Agents"), pursuant to which they will provide administrative support
services to Institutional Service Class ("Service Class") shareholders who are
their customers ("Customers") in consideration of the Fund's payment of 0.25%
(on an
14
<PAGE>
annualized basis) of the average daily net asset value of the Service Class
Shares held by the Service Agent for the benefit of its Customers. Such serv-
ices include:
(a) acting as the sole shareholder of record and nominee for beneficial
owners;
(b) maintaining account records for such beneficial owners of the Fund's
shares;
(c) opening and closing accounts;
(d) answering questions and handling correspondence from shareholders
about their accounts;
(e) processing shareholder orders to purchase, redeem and exchange
shares;
(f) handling the transmission of funds representing the purchase price or
redemption proceeds;
(g) issuing confirmations for transactions in the Fund's shares by share
holders;
(h) distributing current copies of prospectuses, statements of additional
information and shareholder reports;
(i) assisting customers in completing application forms, selecting divi-
dend and other account options and opening any necessary custody ac-
counts;
(j) providing account maintenance and accounting support for all transac-
tions; and
(k) performing such additional shareholder services as may be agreed upon
by the Fund and the Service Agent, provided that any such additional
shareholder services must constitute a permissible non-banking activ-
ity in accordance with the then current regulations of, and interpre-
tations thereof by, the Board of Governors of the Federal Reserve
System, if applicable.
Each agreement with a Service Agent is governed by a Shareholder Service
Plan (the "Service Plan") that has been adopted by the Fund's Board of Trust-
ees. Pursuant to the Service Plan, the Board of Trustees reviews, at least
quarterly, a written report of the amounts expended under each agreement with
Service Agents and the purposes for which the expenditures were made. In addi-
tion, arrangements with Service Agents must be approved annually by a majority
of the Fund's Trustees, including a majority of the Trustees who are not "in-
terested persons" of the Fund as defined in the 1940 Act and have no direct or
indirect financial interest in such arrangements.
The Board of Trustees has approved the arrangements with Service Agents
based on information provided by the Fund's service contractors that there is
a reasonable likelihood by affording the Fund greater flexibility in connec-
tion with
15
<PAGE>
the servicing of the accounts of the beneficial owners of its shares in an ef-
ficient manner. Any material amendment to the Fund's arrangements with Service
Agents must be approved by a majority of the Fund's Board of Trustees (includ-
ing a majority of the disinterested Trustees). So long as the arrangements
with Service Agents are in effect, the selection and nomination of the members
of the Fund's Board of Trustees who are not "interested persons" (as defined
in the 1940 Act) of the Fund will be committed to the discretion of such non-
interested Trustees.
Pursuant to Rule 12b-1 under the 1940 Act, the Fund has adopted a Distribu-
tion Plan for the Service Class Shares of the Fund (the "Distribution Plan").
The Distribution Plan permits the Fund to pay for certain distribution, promo-
tional and related expenses involved in the marketing of only the Service
Class Shares.
The Distribution Plan permits the Service Class Shares, pursuant to the Dis-
tribution Agreement, to pay a monthly fee to the Distributor for its services
and expenses in distributing and promoting sales of the Service Class Shares.
These expenses include, among other things, preparing and distributing adver-
tisements, sales literature and prospectuses and reports used for sales pur-
poses, compensating sales and marketing personnel, and paying distribution and
maintenance fees to securities brokers and dealers who enter into agreements
with the Distributor. In addition, the Service Class Shares may make payments
directly to other unaffiliated parties who either aid in the distribution of
their shares or provide services to the Class.
The maximum annual aggregate fee payable by the Fund under the Service and
Distribution Plans (the "Plans"), is 0.75% of the Service Class Shares' aver-
age daily net assets for the year. The Fund's Board of Trustees may reduce
this amount at any time. Although the maximum fee payable under the 12b-1 Plan
relating to the Service Class Shares is 0.75% of average daily net assets of
such class, the Board of Trustees has determined that the annual fee, payable
on a monthly basis, under the Plans relating to the Service Class Shares, cur-
rently cannot exceed 0.50% of the average daily net assets represented by the
Service Class. While the current fee which will be payable under the Service
Plan has been set at 0.25%, the Plans permit a full 0.75% on all assets to be
paid at any time following appropriate Board approval.
All of the distribution expenses incurred by the Distributor and others,
such as broker/dealers, in excess of the amount paid by the Service Class
Shares will be borne by such persons without any reimbursement from such Clas-
ses. Subject to seeking best price and execution, the Fund may, from time to
time, buy or sell portfolio securities from or to firms which receive payments
under the Plans. From time to time, the Distributor may pay additional amounts
from its own resources to dealers for aid in distribution or for aid in pro-
viding administrative services to shareholders.
16
<PAGE>
The Plans, the Distribution Agreement and the form of dealer's and services
agreements have all been approved by the Board of Trustees of the Fund, in-
cluding a majority of the Trustees who are not "interested persons" (as de-
fined in the 1940 Act) of the Fund and who have no direct or indirect finan-
cial interest in the Plans or any related agreements, by vote cast in person
at a meeting duly called for the purpose of voting on the Plans and such
Agreements. Continuation of the Plans, the Distribution Agreement and the re-
lated agreements must be approved annually by the Board of Trustees in the
same manner, as specified above.
Each year the Trustees must determine whether continuation of the Plans is
in the best interest of the shareholders of Service Class Shares and that
there is a reasonable likelihood of the Plans providing a benefit to the
Class. The Plans, the Distribution Agreement and the related agreements with
any broker-dealer or others relating to the Class may be terminated at any
time without penalty by a majority of those Trustees who are not "interested
persons" or by a majority vote of the outstanding voting securities of the
Class. Any amendment materially increasing the maximum percentage payable un-
der the Plans must likewise be approved by a majority vote of the relevant
Class' outstanding voting securities, as well as by a majority vote of those
Trustees who are not "interested persons." Also, any other material amendment
to the Plans must be approved by a majority vote of the Trustees including a
majority of the Trustees of the Fund having no interest in the Plans. In addi-
tion, in order for the Plans to remain effective, the selection and nomination
of Trustees who are not "interested persons" of the Fund must be effected by
the Trustees who themselves are not "interested persons" and who have no di-
rect or indirect financial interest in the Plans. Persons authorized to make
payments under the Plans must provide written reports at least quarterly to
the Board of Trustees for their review. The National Association of Securities
Dealers, Inc. has adopted amendments to its Rules of Fair Practice relating to
investment company sales charges. The Fund and the Distributor intend to oper-
ate in compliance with these rules.
Fees paid to Service Agents on behalf of the Portfolio for the fiscal year
ended April 30, 1996 totaled $1,105.
PORTFOLIO TRANSACTIONS
The Investment Advisory Agreement authorizes the Adviser to select the bro-
kers or dealers that will execute the purchases and sales of investment secu-
rities for the Portfolio and directs the Adviser to use its best efforts to
obtain the best execution with respect to all transactions for the Portfolio.
The Adviser may, however, consistent with the interests of the Portfolio, se-
lect brokers on the basis of the research, statistical and pricing services
they provide to the Portfolio. Information and research received from such
brokers will be in addition to, and not in lieu of, the services required to
be performed by the Adviser under the Investment Advi-
17
<PAGE>
sory Agreement. A commission paid to such brokers may be higher than that
which another qualified broker would have charged for effecting the same
transaction, provided that such commissions are paid in compliance with the
Securities Exchange Act of 1934, as amended, and that the Adviser determines
in good faith that such commission is reasonable in terms either of the trans-
action or the overall responsibility of the Adviser to the Portfolio and the
Adviser's other clients.
It is not the Fund's practice to allocate brokerage or effect principal
transactions with dealers on the basis of sales of shares which may be made
through broker-dealer firms. However, the Adviser may place portfolio orders
with qualified broker-dealers who refer clients to the Adviser. During the
fiscal years ended April 30, 1995 and April 30, 1996, the entire Fund paid
brokerage commissions of approximately $15,000 and $39,000, respectively.
Some securities considered for investment by the Portfolio may also be ap-
propriate for other clients served by the Adviser. If purchases or sales of
securities consistent with the investment policies of the Portfolio and one or
more of these other clients served by the Adviser is considered at or about
the same time, transactions in such securities will be allocated among the
Portfolio and clients in manner deemed fair and reasonable by the Adviser. Al-
though there is no specified formula for allocating such transactions, the
various allocation methods used by the Adviser, and the results of such allo-
cations, are subject to periodic review by the Fund's Board of Trustees.
ADMINISTRATIVE SERVICES
As stated in the Prospectus, the Board of Trustees of the Fund approved a
new Fund Administration Agreement between UAM Fund Services, Inc., a wholly
owned subsidiary of UAM, and the Fund. The Fund's Trustees also approved a Mu-
tual Fund Services Agreement between UAM Fund Services, Inc. ("UAMFSI") and
Chase Global Funds Services Company ("CGFSC"). The services provided by
UAMFSI, Inc. and CGFSC and the basis of the fees payable by the Fund under the
Fund Administration Agreement are described in the Portfolios' Prospectus.
Prior to April 15, 1996, CGFSC or its predecessor, Mutual Funds Service Compa-
ny, provided certain administrative services to the Fund under an Administra-
tion Agreement between the Fund and U.S. Trust Company of New York.
The basis of the fees paid to the Sub-Administrator for the period September
28, 1995 to April 14, 1996 was as follows: the Fund paid a monthly fee for its
services which on an annualized basis equaled 0.20% of the first $200 million
in combined assets; plus 0.12% of the next $800 million in combined assets;
plus 0.08% on assets over $1 billion but less than $3 billion; plus 0.06% on
assets over $3 billion. The fees were allocated among the Portfolios on the
basis of their relative assets and were subject to a designated minimum fee
schedule per Portfo-
18
<PAGE>
lio, which ranged from $2,000 per month upon inception of a Portfolio to
$70,000 annually after two years. For the period ended April 30, 1996, adminis-
trative services fees paid to the Sub-Administrator by the TJ Core Equity Port-
folio totaled $15,232. For the period April 15, 1996 to April 30, 1996, UAM
Fund Services, Inc. earned $1,768 from the TJ Core Equity Portfolio as Adminis-
trator. The services provided by the Administrator and the Sub-Administrator
and the basis of the current fees payable are described in the Portfolio's Pro-
spectus.
PERFORMANCE CALCULATIONS
PERFORMANCE
The Portfolio may from time to time quote various performance figures to il-
lustrate past performance. Performance quotations by investment companies are
subject to rules adopted by the Commission, which require the use of standard-
ized performance quotations or, alternatively, that every non-standardized per-
formance quotation furnished by the Fund be accompanied by certain standardized
performance information computed as required by the Commission. Average annual
compounded total return quotations used by the Fund are based on the standard-
ized methods of computing performance mandated by the Commission. An explana-
tion of the method used to compute or express performance follows.
TOTAL RETURN
The average annual total return of the Portfolio is determined by finding the
average annual compounded rates of return over 1, 5 and 10 year periods that
would equate an initial hypothetical $1,000 investment to its ending redeemable
value. The calculation assumes that all dividends and distributions are rein-
vested when paid. The quotation assumes the amount was completely redeemed at
the end of each 1, 5 and 10 year period and the deduction of all applicable
Fund expenses on an annual basis.
These figures are calculated according to the following formula:
P(1 + T)/n/ = ERV
where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment made at
the beginning of the 1, 5 or 10 year periods at the end of the 1,
5 or 10 year periods (or fractional portion thereof).
The average annual total rate of return for the TJ Core Equity Portfolio In-
stitutional Service Class Shares from inception on September 28, 1995 to Octo-
ber 31, 1996, the date of the Semi-Annual Report is 17.93%. The average annual
total return for the one-year period ended October 31, 1996, for such Shares is
19.75%.
19
<PAGE>
COMPARISONS
To help investors better evaluate how an investment in the Portfolios of the
Fund might satisfy their investment objective, advertisements regarding the
Fund may discuss various measures of Fund performance as reported by various
financial publications. Advertisements may also compare performance (as calcu-
lated above) to performance as reported by other investments, indices and av-
erages. The following publications, indices and averages may be used:
(a) Dow Jones Composite Average or its component averages -- an unmanaged
index composed of 30 blue-chip industrial corporation stocks (Dow
Jones Industrial Average), 15 utilities company stocks and 20 trans-
portation stocks. Comparisons of performance assume reinvestment of
dividends.
(b) Standard & Poor's 500 Stock Index or its component indices -- an un-
managed index composed of 400 industrial stocks, 40 financial stocks,
40 utilities stocks and 20 transportation stocks. Comparisons of per-
formance assume reinvestment of dividend.
(c) The New York Stock Exchange composite or component indices -- unman-
aged indices of all industrial, utilities, transportation and finance
stocks listed on the New York Stock Exchange.
(d) Salomon Brothers World Government Bond Index -- The Salomon World
Government Bond Index is designed to provide a comprehensive measure
of total return performance of the domestic Government bond market of
thirteen countries. The index has been constructed with the aim of
choosing an "all inclusive" universe of institutionally traded fixed-
rate bonds. The selection of security types to be included in the in-
dex is made with the aim of being as comprehensive as possible, while
satisfying the criterion of reasonable availability to domestic and
international institutions and the existence of complete pricing and
market profile data.
(e) Wilshire 5000 Equity index or its component indices -- represents the
return on the market value of all common equity securities for which
daily pricing is available. Comparisons of performance assume rein-
vestment of dividends.
(f) Lipper -- Mutual Fund Performance Analysis and Lipper -- Fixed Income
Fund Performance Analysis -- measure total return and average current
yield for the mutual fund industry. Rank individual mutual fund per-
formance over specified time periods, assuming reinvestment of all
distributions, exclusive of any applicable sales charges.
(g) Morgan Stanley Capital International EAFE Index and World Index --
respectively, arithmetic, market value-weighted averages of the per-
formance of over 900 securities listed on the stock exchanges of
countries in Europe, Australia and the Far East, and over 1,400 secu-
rities listed on the stock exchanges of these continents, plus North
America.
20
<PAGE>
(h) Goldman Sachs 100 Convertible Bond Index -- currently includes 67
bonds and 33 preferred. The original list of names was generated by
screening for convertible issues of 100 million or greater in market
capitalization. The index is priced monthly.
(i) Salomon Brothers GNMA Index -- includes pools of mortgages originated
by private lenders and guaranteed by the mortgage pools of the Gov-
ernment National Mortgage Association.
(j) Salomon Brothers High Grade Corporate Bond Index -- consists of pub-
licly issued, non-convertible corporate bonds rated AA or AAA. It is
a value-weighted, total return index, including approximately 800 is-
sues with maturities of 12 years or greater.
(k) Salomon Brothers Broad Investment Grade Bond -- is a market-weighted
index that contains approximately 4,700 individually priced invest-
ment grade corporate bonds rated BBB or better, U.S. Treasury/agency
issues and mortgage pass through securities.
(l) Lehman Brothers Long-Term Treasury Bond -- is composed of all bonds
covered by the Lehman Brothers Treasury Bond Index with maturities of
10 years or greater.
(m) NASDAQ Industrial Index -- is composed of more than 3,000 industrial
issues. It is a value-weighted index calculated on price change only
and does not include income.
(n) Value Line -- composed of over 1,600 stocks in the Value Line Invest-
ment Survey.
(o) Russell 2000 -- composed of the 2,000 smallest stocks in the Russell
3000, a market value-weighted index of the 3,000 largest U.S. public-
ly-traded companies.
(p) Composite indices -- 60% Standard & Poor's 500 Stock Index, 30% Leh-
man Brothers Long-Term Treasury Bond and 10% U.S. Treasury Bills; 70%
Standard & Poor's 500 Stock Index and 30% NASDAQ Industrial Index;
35% Standard & Poor's 500 Stock Index and 65% Salomon Brothers High
Grade Bond Index; all stocks on the NASDAQ system exclusive of those
traded on an exchange, and 65% Standard & Poor's 500 Stock Index and
35% Salomon Brothers High Grade Bond Index.
(q) CDA Mutual Fund Report published by CDA Investment Technologies,
Inc. -- analyzes price, current yield, risk, total return and average
rate of return (average compounded growth rate) over specified time
periods for the mutual fund industry.
(r) Mutual Fund Source Book published by Morningstar, Inc. -- analyzes
price, yield, risk and total return for equity funds.
21
<PAGE>
(s) Financial publications: Business Week, Changing Times, Financial
World, Forbes, Fortune, Money, Barron's, Consumer's Digest, Financial
Times, Global Investor, Wall Street Journal and Weisenberger Invest-
ment Companies Service -- publications that rate fund performance
over specified time periods.
(t) Consumer Price Index (or Cost of Living Index), published by the U.S.
Bureau of Labor Statistics -- a statistical measure of change over
time in the price of goods and services in major expenditure groups.
(u) Stocks, Bonds, Bills and Inflation, published by Ibbotson Associ-
ates -- historical measure of yield, price and total return for com-
mon and small company stock, long-term government bonds, Treasury
bills and inflation.
(v) Savings and Loan Historical Interest Rates -- as published by the
U.S. Savings & Loan League Fact Book.
(w) Historical data supplied by the research departments of First Boston
Corporation; the J.P. Morgan companies; Salomon Brothers; Merrill
Lynch, Pierce, Fenner & Smith; Lehman Brothers, Inc.; and Bloomberg
L.P.
In assessing such comparisons of performance, an investor should keep in
mind that the composition of the investments in the reported indices and aver-
ages is not identical to the composition of investments in the Portfolio, that
the averages are generally unmanaged, and that the items included in the cal-
culations of such averages may not be identical to the formula used by the
Portfolio to calculate its performance. In addition, there can be no assurance
that the Portfolio will continue this performance as compared to such other
averages.
GENERAL INFORMATION
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Fund was organized under the name The Regis Fund II as a Delaware busi-
ness trust on May 18, 1994. On October 31, 1995, the name of the Fund was
changed to "UAM Funds Trust." The Fund's principal executive office is located
at One International Place, 44th floor, Boston, MA 02110; however, all in-
vestor correspondence should be directed to the Fund at UAM Funds Service Cen-
ter, c/o Chase Global Funds Services Company, P.O. Box 2798, Boston, MA 02208-
2798. The Fund's Agreement and Declaration of Trust permits the Fund to issue
an unlimited number of shares of beneficial interest, without par value. The
Trustees have the power to designate one or more series ("Portfolios") or
classes of shares of beneficial interest without further action by sharehold-
ers.
On each matter submitted to a vote of the shareholders, each holder of a
share shall be entitled to one vote for each whole share and a fractional vote
for each fractional share standing in his name on the books of the Fund.
22
<PAGE>
In the event of liquidation of the Fund, the holders of the shares of each
Portfolio or any class thereof that has been established and designated shall
be entitled to receive, when and as declared by the Trustees, the excess of
the assets belonging to that Portfolio, or in the case of a class, belonging
to that Portfolio and allocable to that class, over the liabilities belonging
to that Portfolio or class. The assets so distributable to the holders of
shares of any particular Portfolio or class thereof shall be distributed to
the holders in proportion to the number of shares of that Portfolio or class
thereof held by them and recorded on the books of the Fund. The liquidation of
any Portfolio or class thereof may be authorized at any time by vote of a ma-
jority of the Trustees then in office.
Shareholders of both Classes of the Fund's Portfolios have no pre-emptive or
other rights to subscribe to any additional shares or other securities issued
by the Fund or any Portfolio, except as the Trustees in their sole discretion
shall have determined by vote. Both Institutional Class and Service Class
Shares represent an interest in the same assets of a Portfolio and are identi-
cal in all respects except that the Service Class Shares bear certain expenses
related to shareholder servicing and the distribution of such shares, and have
exclusive voting rights with respect to matter relating to such distribution
expenditures.
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
The Fund's policy is to distribute substantially all of the Portfolio's net
investment income, if any, together with any net realized capital gains in the
amount and at the times that will avoid both income (including capital gains)
taxes incurred on it and the imposition of the Federal excise tax on undis-
tributed income and capital gains. The amounts of any income dividends or cap-
ital gains distributions cannot be predicted. See the discussion under "Divi-
dends, Capital Gains Distributions and Taxes" in the Prospectus.
Any dividend or distribution paid shortly after the purchase of shares of
the Portfolio by an investor may have the effect of reducing the per share net
asset value of the Portfolio by the per share amount of the dividend or dis-
tribution. Furthermore, such dividends or distributions, although in effect a
return of capital, are subject to income taxes as set forth in the Prospectus.
As set forth in the Prospectus, unless the shareholder elects otherwise in
writing, all dividend and capital gains distributions are automatically re-
ceived in additional shares of the respective Portfolio of the Fund at net as-
set value (as of the business day following the record date). This will remain
in effect until the Fund is notified by the shareholder in writing at least
three days prior to the record date that either the Income Option (income div-
idends in cash and capital gains distributions in additional shares at net as-
set value) or the Cash Option (both income dividends and capital gains distri-
butions in cash) has been elected. An account statement is sent to sharehold-
ers whenever an income dividend or capital gains distribution is paid.
23
<PAGE>
Each Portfolio of the Fund will be treated as a separate entity (and hence
as a separate "regulated investment company") for Federal tax purposes. Any
net capital gains recognized by the Portfolio will be distributed to its in-
vestors without need to offset (for Federal income tax purposes) such gains
against any net capital losses realized by another Portfolio.
CODE OF ETHICS
The Fund has adopted a Code of Ethics which restricts to a certain extent
personal transactions by access persons of the Fund and imposes certain dis-
closure and reporting obligations.
FEDERAL TAXES
In order for the Portfolio to qualify for Federal income tax treatment as a
regulated investment company under the Internal Revenue Code of 1986, as
amended (the "Code"), at least 90% of its gross income for a taxable year must
be derived from certain qualifying income, i.e., dividends, interest, income
derived from loans of securities and gains from the sale or other disposition
of stock, securities or foreign currencies, or other related income, including
gains from options, futures and forward contracts, derived with respect to its
business investing in stock, securities or currencies. Any net gain realized
from the closing out of futures contracts will, therefore, generally be quali-
fying income for purposes of the 90% requirement. Qualification as a regulated
investment company also requires that less than 30% of the Portfolio's gross
income be derived from the sale or other disposition of stock, securities, op-
tions, futures or forward contracts (including certain foreign currencies not
directly related to the Fund's business of investing in stock or securities)
held less than three months. In order to avoid realizing excessive gains on
securities held for less than three months, the Portfolio may be required to
defer the closing out of futures contracts beyond the time when it would oth-
erwise be advantageous to do so. It is anticipated that unrealized gains on
futures contracts which have been open for less than three months as of the
end of the Portfolio's taxable year, and which are recognized for tax purpos-
es, will not be considered gains on securities held for less than three months
for the purposes of the 30% test.
Except for transactions the Portfolio has identified as hedging transac-
tions, in general the Portfolio is required for Federal income tax purposes to
recognize as income for each taxable year its net unrealized gains and losses
on some forward currency and some futures contracts as of the end of each tax-
able year as well as those actually realized during the year. In most cases,
any such gain or loss recognized with respect to a regulated futures contract
is considered to be 60% long-term capital gain or loss and 40% short-term cap-
ital gain or loss without regard to the holding period of the contract. Recog-
nized gain or loss attributable to a foreign currency forward contract is
treated as 100% ordinary income. Furthermore, for-
24
<PAGE>
eign currency futures contracts which are intended to hedge against a change
in the value of securities held by the Portfolio may affect the holding period
of such securities and, consequently, the nature of the gain or loss on such
securities upon disposition.
The Portfolio will distribute to shareholders annually any net capital gains
which have been recognized for Federal income tax purposes (including
unrealized gains at the end of the Portfolio's taxable year on futures trans-
actions). Such distribution will be combined with distributions of capital
gains realized on the Portfolio's other investments, and shareholders will be
advised as to the character of the payment.
FINANCIAL STATEMENTS
The Financial Statements of the TJ Core Equity Portfolio for the period from
inception on September 28, 1995 to April 30, 1996 and for the six months ended
October 31, 1996, and the Financial Highlights for the respective periods pre-
sented which appear in the Portfolio's 1996 Annual Financial Statements (and
the report thereon of Price Waterhouse LLP, the Fund's independent accoun-
tants, also appearing therein) and in the Semi-Annual Report to Shareholders
are attached to this SAI.
25
<PAGE>
APPENDIX -- DESCRIPTION OF SECURITIES AND RATINGS
I. DESCRIPTION OF CORPORATE BOND RATINGS
MOODY'S INVESTORS SERVICE, INC.'S CORPORATE BOND RATINGS:
Aaa -- Bonds which are Aaa are judged to be the best quality; They carry the
smallest degree of investment risk and are generally referred to as "gilt-
edge." Interest payments are protected by a large or by an exceptionally sta-
ble margin, and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to im-
pair the fundamentally strong position of such issues.
Aa -- Bonds which are rated Aa are judged to be of high quality by all stan-
dards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protec-
tive elements may be of greater amplitude or there may be other elements pres-
ent which make the long-term risks appear somewhat larger than in Aaa securi-
ties.
A -- Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving se-
curity to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment sometime in the future.
Moody's applies numerical modifiers 1, 2 and 3 in the Aa and A rating cate-
gories. The modifier 1 indicates that the security ranks at a higher end of
the rating category, modifier 2 indicates a mid-range rating and the modifier
3 indicates that the issue ranks at the lower end of the rating category.
Baa -- Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
STANDARD & POOR'S CORPORATION'S CORPORATE BOND RATINGS:
AAA -- Bonds rated AAA have the highest rating assigned by Standard & Poor's
to a debt obligation and indicate an extremely strong capacity to pay princi-
pal and interest.
AA -- Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only to a small degree.
A -- Bonds rated A have a strong capacity to pay interest and repay princi-
pal although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than bonds in higher rated
categories.
A-1
<PAGE>
BBB -- Debt rated BBB is regarded as having an adequate capacity to pay in-
terest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than for debt in higher rated categories.
II. DESCRIPTION OF U.S. GOVERNMENT SECURITIES
The term "U.S. Government Securities" refers to a variety of securities
which are issued or guaranteed by the United States Government, and by various
instrumentalities which have been established or sponsored by the United
States Government.
U.S. Treasury securities are backed by the "full faith and credit" of the
United States. Securities issued or guaranteed by Federal agencies and U.S.
Government sponsored instrumentalities may or may not be backed by the full
faith and credit of the United States.
In the case of securities not backed by the full faith and credit of the
United States, the investor must look principally to the agency or instrumen-
tality issuing or guaranteeing the obligation for ultimate repayment, and may
not be able to assess a claim against the United States itself in the event
the agency or instrumentality does not meet its commitment. Agencies which are
backed by the full faith and credit of the United States include the Export-
Import Bank, Farmers Home Administration, Federal Financing Bank, and others.
Certain agencies and instrumentalities, such as the GNMA are, in effect,
backed by the full faith and credit of the United States through provisions in
their charters that they may make "indefinite and unlimited" drawings on the
U.S. Treasury, if needed to service its debt. Debt from certain other agencies
and instrumentalities, including the Federal Home Loan Bank and FNMA, is not
guaranteed by the United States, but those institutions are protected by the
discretionary authority of the U.S. Treasury to purchase certain amounts of
their securities to assist the institution in meeting its debt obligations.
Finally, other agencies and instrumentalities, such as the Farm Credit System
and the FHLMC, are federally chartered institutions under Government supervi-
sion, but their debt securities are backed only by the credit worthiness of
those institutions, not the U.S. Government.
Some of the U.S. Government agencies that issue or guarantee securities in-
clude the Export-Import Bank of the United States, Farmers Home Administra-
tion, Federal Housing Administration, Maritime Administration, Small Business
Administration, and the Tennessee Valley Authority.
III. DESCRIPTION OF COMMERCIAL PAPER
The Portfolio may invest in commercial paper (including variable amount mas-
ter demand notes) rated A-1 or better by S&P or Prime-1 by Moody's or by S&P.
Commercial paper refers to short-term, unsecured promissory notes issued by
A-2
<PAGE>
corporations to finance short-term credit needs. Commercial paper is usually
sold on a discount basis and has a maturity at the time of issuance not ex-
ceeding nine months. Variable amount master demand notes are demand obliga-
tions that permit the investment of fluctuating amounts at varying market
rates of interest pursuant to arrangement between the issuer and a commercial
bank acting as agent for the payees of such notes whereby both parties have
the right to vary the amount of the outstanding indebtedness on the notes. As
variable amount master demand notes are direct lending arrangements between a
lender and a borrower, it is not generally contemplated that such instruments
will be traded, and there is no secondary market for these notes, although
they are redeemable (and thus immediately repayable by the borrower) at face
value, plus accrued interest, at any time. In connection with the Portfolio's
investment in variable amount master demand notes, the Adviser's investment
management staff will monitor, on an ongoing basis, the earning power, cash
flow and other liquidity ratios of the issuer and the borrower's ability to
pay principal and interest on demand.
Commercial paper rated A-1 by S&P has the following characteristics: (1) li-
quidity ratios are adequate to meet cash requirements; (2) long-term senior
debt is rated "A" or better; (3) the issuer has access to at least two addi-
tional channels of borrowing; (4) basic earnings and cash flow have an upward
trend with allowance made for unusual circumstances; (5) typically, the is-
suer's industry is well established, and the issuer has a strong position
within the industry; and (6) the reliability and quality of management are un-
questioned. Relative strength or weakness of the above factors determine
whether the issuer's commercial paper is A-1, A-2 or A-3. The rating Prime-1
is the highest commercial paper rating assigned by Moody's. Among the factors
considered by Moody's in assigning ratings are the following: (1) evaluation
of the management of the issuer; (2) economic evaluation of the issuer's in-
dustry or industries and the appraisal of speculative-type risks which may be
inherent in certain areas; (3) evaluation of the issuer's products in relation
to completion and customer acceptance; (4) liquidity; (5) amount and quality
of long term debt; (6) trend of earnings over a period of ten years; (7) fi-
nancial strength of a parent company and the relationships which exist with
the issuer; and (8) recognition by the management of issuer of obligations
which may be present or may arise as a result of public interest questions and
preparations to meet such obligations.
IV. DESCRIPTION OF BANK OBLIGATIONS
Time deposits are non-negotiable deposits maintained in a banking institu-
tion for a specified period of time at a stated interest rate. Certificates of
deposit are negotiable short-term obligations of commercial banks. Variable
rate certificates of deposit are certificates of deposit on which the interest
rate is periodically adjusted prior to their stated maturity based upon a
specified market rate. As a result of these adjustments, the interest rate on
these obligations may increase or decrease period-
A-3
<PAGE>
ically. Frequently, dealers selling variable rate certificates of deposit to
the Portfolio will agree to repurchase such instruments, at the Portfolio's
option, at par on or near the coupon dates. The dealers' obligations to repur-
chase these instruments are subject to conditions imposed by various dealers.
Such conditions typically are the continued credit standing of the issuer and
the existence of reasonably orderly market conditions. The Portfolio is also
able to sell variable rate certificates of deposit in the secondary market.
Variable rate certificates of deposit normally carry a higher interest rate
than comparable fixed rate certificates of deposit. A banker's acceptance is a
time draft drawn on a commercial bank by a borrower usually in connection with
an international commercial transaction to finance the import, export, trans-
fer or storage of goods. The borrower is liable for payment as well as the
bank which unconditionally guarantees to pay the draft at its face amount on
the maturity date. Most acceptances have maturities of six months or less and
are traded in the secondary markets prior to maturity.
V. DESCRIPTION OF FOREIGN INVESTMENTS
Investors should recognize that investing in foreign companies involves cer-
tain special considerations which are not typically associated with investing
in U.S. companies. Since the securities of foreign companies are frequently
denominated in foreign currencies, a Portfolio may be affected favorably or
unfavorably by changes in currency rates and in exchange control regulations,
and may incur costs in connection with conversions between various currencies.
As foreign companies are not generally subject to uniform accounting, audit-
ing and financial reporting standards and they may have policies that are not
comparable to those of domestic companies, there may be less information
available about certain foreign companies than about domestic companies. Secu-
rities of some foreign companies are generally less liquid and more volatile
than securities of comparable domestic companies. There is generally less gov-
ernment supervision and regulation of stock exchanges, brokers and listed com-
panies than in the U.S. In addition, with respect to certain foreign coun-
tries, there is the possibility of expropriation or confiscatory taxation, po-
litical or social instability, or diplomatic developments which could affect
U.S. investments in those countries.
Although the Fund will endeavor to achieve the most favorable execution
costs in its portfolio transactions, fixed commissions on many foreign stock
exchanges are generally higher than negotiated commissions on U.S. exchanges.
Certain foreign governments levy withholding taxes on dividend and interest
income. Although in some countries a portion of these taxes are recoverable,
the non-recoverable portion of foreign withholding taxes will reduce the in-
come received from the companies comprising the Fund's Portfolios. However,
these foreign withholding taxes are not expected to have a significant impact.
A-4
<PAGE>
TJ CORE EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
October 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE+
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (92.7%)
- --------------------------------------------------------------------------------
AUTOMOTIVE (3.8%)
Ford Motor Co................................................ 2,500 $ 78,125
- --------------------------------------------------------------------------------
BANKS (3.9%)
First Union Corp............................................. 600 43,650
NationsBank Corp. ........................................... 400 37,700
----------
81,350
- --------------------------------------------------------------------------------
BASIC RESOURCES (2.2%)
Halliburton Co............................................... 800 45,300
- --------------------------------------------------------------------------------
BEVERAGES, FOOD & TOBACCO (8.7%)
Anheuser-Busch Cos., Inc..................................... 400 15,400
Heinz (H.J.) Co.............................................. 2,100 74,550
Sara Lee Corp................................................ 1,200 42,600
Unilever N.V.--New York Shares............................... 300 45,862
----------
178,412
- --------------------------------------------------------------------------------
BROADCASTING & PUBLISHING (10.6%)
Dun & Bradstreet Corp. ...................................... 1,600 92,600
Gannett Co. ................................................. 800 60,700
McGraw-Hill Cos., Inc. ...................................... 1,400 65,625
----------
218,925
- --------------------------------------------------------------------------------
BUILDING MATERIALS (3.0%)
Foster Wheeler Corp. ........................................ 1,500 61,500
- --------------------------------------------------------------------------------
CHEMICALS (1.9%)
Mallinckrodt Group, Inc. .................................... 900 39,150
- --------------------------------------------------------------------------------
ELECTRONICS (1.4%)
General Electric Co.......................................... 300 29,025
- --------------------------------------------------------------------------------
ENERGY (9.6%)
Amoco Corp................................................... 1,000 75,750
Coastal Corp................................................. 1,500 64,500
Mobil Corp. ................................................. 500 58,375
----------
198,625
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-2
<PAGE>
TJ CORE EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
October 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE+
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
- --------------------------------------------------------------------------------
FINANCIAL SERVICES (8.8%)
American Express Co.......................................... 1,500 $ 70,500
Federal National Mortgage Association........................ 1,400 54,775
Lehman Brothers Holdings, Inc. .............................. 2,200 55,275
----------
180,550
- --------------------------------------------------------------------------------
HEALTH CARE (2.4%)
United Healthcare Corp....................................... 1,300 49,237
- --------------------------------------------------------------------------------
HOLDING COMPANY (1.3%)
Textron, Inc................................................. 300 26,625
- --------------------------------------------------------------------------------
INSURANCE (2.1%)
ITT Hartford Group, Inc. .................................... 700 44,100
- --------------------------------------------------------------------------------
MANUFACTURING (4.4%)
ITT Industries, Inc. ........................................ 2,600 60,450
Tyco International Ltd....................................... 600 29,775
----------
90,225
- --------------------------------------------------------------------------------
METALS (1.9%)
USX-U.S. Steel Group, Inc.................................... 1,400 38,150
- --------------------------------------------------------------------------------
OFFICE EQUIPMENT (1.3%)
Pitney Bowes, Inc............................................ 500 27,937
- --------------------------------------------------------------------------------
PAPER & PACKAGING (1.9%)
Union Camp Corp. ............................................ 800 39,000
- --------------------------------------------------------------------------------
PHARMACEUTICALS (4.4%)
Bristol-Myers Squibb Co...................................... 500 52,875
Merck & Co., Inc............................................. 500 37,063
----------
89,938
- --------------------------------------------------------------------------------
RETAIL (4.0%)
Dillard Department Stores Inc., Class A...................... 2,600 82,550
- --------------------------------------------------------------------------------
SERVICES (3.5%)
WMX Technologies, Inc........................................ 2,100 72,188
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-3
<PAGE>
TJ CORE EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
October 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE+
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
- -------------------------------------------------------------------------------
TECHNOLOGY (7.6%)
Avnet, Inc. ............................................. 1,400 $ 70,525
*Compaq Computer Corp. .................................. 500 34,813
International Business Machines Corp..................... 400 51,600
----------
156,938
- -------------------------------------------------------------------------------
TELECOMMUNICATIONS (1.1%)
Lucent Technologies, Inc................................. 486 22,842
- -------------------------------------------------------------------------------
UTILITIES (2.9%)
AT&T Corp................................................ 1,700 59,288
- -------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(COST $1,760,092)....................................... 1,909,980
- -------------------------------------------------------------------------------
<CAPTION>
FACE
AMOUNT
- -------------------------------------------------------------------------------
<S> <C> <C>
SHORT-TERM INVESTMENT (9.0%)
- -------------------------------------------------------------------------------
REPURCHASE AGREEMENT
Chase Securities, Inc. 5.58%, dated 10/31/96,
due 11/1/96, to be repurchased at $186,029,
collateralized by $179,790 of various
U.S. Treasury Notes, 5.875%-7.75%, due 3/31/99-
11/30/99, valued at $186,000
(COST $186,000)........................................ $186,000 186,000
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS (101.7%)
(COST $1,946,092)(A).................................... 2,095,980
- -------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (NET)
(-1.7%)................................................. (34,901)
- -------------------------------------------------------------------------------
NET ASSETS (100%)......................................... $2,061,079
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
+ See Note A to Financial Statements.
* Non-Income Producing Security.
(a) The cost for federal income tax and book purposes was $1,946,092. At Octo-
ber 31, 1996, net unrealized appreciation for all securities based on tax
cost was $149,888. This consisted of aggregate gross unrealized apprecia-
tion for all securities of $199,206 and aggregate gross unrealized depre-
ciation for all securities of $49,318.
The accompanying notes are an integral part of the financial statements.
F-4
<PAGE>
TJ CORE EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1996 (Unaudited)
<TABLE>
- -------------------------------------------------------------------------------
<S> <C>
ASSETS
Investments, at Cost............................................... $1,946,092
==========
Investments, at Value.............................................. $2,095,980
Cash............................................................... 279
Receivable due from Investment Adviser--Note B..................... 12,322
Receivable for Portfolio Shares Sold............................... 9,876
Dividends Receivable............................................... 2,324
Other Assets....................................................... 80
- -------------------------------------------------------------------------------
Total Assets...................................................... 2,120,861
- -------------------------------------------------------------------------------
LIABILITIES
Payable for Investments Purchased.................................. 34,311
Payable for Administrative Fees--Note C............................ 4,888
Payable for Distribution and Service Fees--Note E.................. 3,016
Payable for Trustees' Fees--Note F................................. 594
Other Liabilities.................................................. 16,973
- -------------------------------------------------------------------------------
Total Liabilities................................................. 59,782
- -------------------------------------------------------------------------------
NET ASSETS.......................................................... $2,061,079
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NET ASSETS CONSISTS OF:
Paid in Capital.................................................... $1,893,356
Undistributed Net Investment Income................................ 1,822
Accumulated Net Realized Gain...................................... 16,013
Unrealized Appreciation............................................ 149,888
- -------------------------------------------------------------------------------
NET ASSETS.......................................................... $2,061,079
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
INSTITUTIONAL SERVICE CLASS SHARES
Shares Issued and Outstanding (Unlimited authorization,
no par value) ................................................... 178,141
Net Asset Value, Offering and Redemption Price Per Share........... $ 11.57
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-5
<PAGE>
TJ CORE EQUITY PORTFOLIO
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
OCTOBER 31,
1996
(UNAUDITED)
- ---------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Dividends................................................... $ 14,415
Interest.................................................... 2,816
- ---------------------------------------------------------------------------------
Total Income............................................... 17,231
- ---------------------------------------------------------------------------------
EXPENSES
Investment Advisory Fees--Note B
Basic Fees................................................. $ 5,290
Less: Fees Waived.......................................... (5,290) --
-------
Administrative Fees--Note C................................. 26,180
Custodian Fees--Note D...................................... 619
Printing Fees............................................... 6,293
Audit Fees.................................................. 5,508
Distribution and Service Fees--Note E....................... 1,763
Trustees' Fees--Note F...................................... 1,219
Other Expenses.............................................. 2,756
Expenses Assumed by the Adviser--Note B..................... (35,180)
- ---------------------------------------------------------------------------------
Total Expenses............................................. 9,158
Expense Offset--Note A...................................... (312)
- ---------------------------------------------------------------------------------
Net Expenses............................................... 8,846
- ---------------------------------------------------------------------------------
NET INVESTMENT INCOME........................................ 8,385
- ---------------------------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS............................. 12,883
NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION ON INVEST-
MENTS...................................................... 64,834
- ---------------------------------------------------------------------------------
NET GAIN ON INVESTMENTS...................................... 77,717
- ---------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS......... $ 86,102
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-6
<PAGE>
TJ CORE EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
OCTOBER 31, SEPTEMBER 28, 1995*
1996 TO
(UNAUDITED) APRIL 30, 1996
- ---------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income.......................... $ 8,385 $ 5,373
Net Realized Gain.............................. 12,883 3,130
Net Change in Unrealized
Appreciation/Depreciation.................... 64,834 85,054
- ---------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Operations.................................. 86,102 93,557
- ---------------------------------------------------------------------------------
DISTRIBUTIONS:
Net Investment Income.......................... (6,837) (5,111)
- ---------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS: (1)
Issued--Regular................................ 1,014,000 1,021,045
--In Lieu of Cash Distributions.............. 6,832 5,111
Redeemed....................................... (62,348) (91,272)
- ---------------------------------------------------------------------------------
Net Increase from Capital Share Transactions.. 958,484 934,884
- ---------------------------------------------------------------------------------
Total Increase................................. 1,037,749 1,023,330
Net Assets:
Beginning of Period............................ 1,023,330 --
- ---------------------------------------------------------------------------------
End of Period (including undistributed net
investment income of $1,822 and $274,
respectively)................................ $2,061,079 $1,023,330
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
(1)Shares Issued and Redeemed:
Shares Issued................................. 90,505 100,921
In Lieu of Cash Distributions................. 609 481
Shares Redeemed............................... (5,567) (8,808)
- ---------------------------------------------------------------------------------
85,547 92,594
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
* Commencement of Operations
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-7
<PAGE>
TJ CORE EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
OCTOBER 31, SEPTEMBER 28, 1995*
1996 TO
(UNAUDITED) APRIL 30, 1996
- -------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.......... $ 11.05 $ 10.00
- -------------------------------------------------------------------------------
Income From Investment Operations
Net Investment Income........................ 0.06 0.06
Net Realized and Unrealized Gain on
Investments................................ 0.51 1.05
- -------------------------------------------------------------------------------
Total From Investment Operations............ 0.57 1.11
- -------------------------------------------------------------------------------
DISTRIBUTIONS
Net Investment Income........................ (0.05) (0.06)
- -------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD................ $ 11.57 $ 11.05
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
TOTAL RETURN+................................. 5.18% 11.13%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands)........ $ 2,061 $ 1,023
Ratio of Expenses to Average Net Assets...... 1.29%** 1.38%**
Ratio of Net Investment Income to Average Net
Assets..................................... 1.18%** 1.06%**
Portfolio Turnover Rate...................... 12% 17%
Average Commission Rate...................... $0.0600 $0.0600
- -------------------------------------------------------------------------------
Voluntary Waived Fees and Expenses Assumed by
the Adviser Per Share...................... $ 0.28 $ 0.74
Ratio of Expenses to Average Net Assets
Including Expense Offsets.................. 1.25%** 1.25%**
- -------------------------------------------------------------------------------
</TABLE>
* Commencement of Operations.
** Annualized.
+ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser during the period.
The accompanying notes are an integral part of the financial statements.
F-8
<PAGE>
TJ CORE EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
UAM Funds Trust and UAM Funds, Inc. (collectively the "UAM Funds") are regis-
tered under the Investment Company Act of 1940, as amended. The TJ Core Equity
Portfolio (the "Portfolio"), a portfolio of UAM Funds Trust, is a diversified,
open-end management investment company. At October 31, 1996, the UAM Funds were
composed of forty active portfolios. The financial statements of the remaining
portfolios are presented separately. The objective of the TJ Core Portfolio is
to provide maximum total return consistent with reasonable risk to principal by
investing in the common stock of quality companies with lower valuations in
sectors of the economy exhibiting strong, or improving relative performance.
A. SIGNIFICANT ACCOUNTING POLICIES: The following significant accounting pol-
icies are in conformity with generally accepted accounting principles. Such
policies are consistently followed by the Portfolio in the preparation of its
financial statements. Generally accepted accounting principles may require man-
agement 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 valua-
tion 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 se-
curities 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 provi-
sion for Federal income taxes is required in the financial statements.
3. REPURCHASE AGREEMENTS: In connection with transactions involving re-
purchase 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 monitored 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.
F-9
<PAGE>
TJ CORE EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
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.
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the Portfolio may transfer its daily uninvested cash balances
into a joint trading account which invests in one or more repurchase
agreements. This joint repurchase agreement is covered by the same collat-
eral requirements as discussed above.
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.
Permanent book and tax basis differences relating to shareholder distri-
butions 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 using the effective yield
basis 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 ap-
portioned among the portfolios of the UAM Funds and AEW Commercial Mort-
gage 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,
Tom Johnson Investment Management, Inc. (the "Adviser"), a wholly-owned subsid-
iary of United Asset Management Corporation ("UAM"), provides investment advi-
sory services to the Portfolio at a fee calculated at an annual rate of 0.75%
of average daily net assets. Through January 1, 1998, the Adviser has
F-10
<PAGE>
TJ CORE EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
voluntarily agreed to waive a portion of its advisory fees and to assume ex-
penses, 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. ADMINISTRATION SERVICES: UAM Fund Services, Inc. (the "Administrator"), a
wholly-owned subsidiary of UAM, provides and oversees administrative, fund ac-
counting, dividend disbursing and transfer agent services to the UAM Funds and
AEW under a Fund 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 aggre-
gate 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 as-
sets; 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 ba-
sis 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. The Administrator has entered into a Mutual
Funds Service Agreement with Chase Global Funds Services Company ("CGFSC"), an
affiliate of The Chase Manhattan Bank, under which CGFSC agrees to provide cer-
tain 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. For the period
ended October 31, 1996, $25,901 was paid to CGFSC for their services.
D. CUSTODIAN: Effective July 17, 1996, The Chase Manhattan Bank (the "Bank"),
an affiliate of CGFSC, is custodian for the Portfolio's assets held in accor-
dance with the custodian agreement. For the period July 17, 1996 to October 31,
1996, the amount charged to the Portfolio by the Bank aggregated $192, all of
which is unpaid at October 31, 1996.
E. DISTRIBUTION SERVICES: 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 "Plan") on behalf of
the Service Class Shares pursuant to Rule 12b-1 under the Investment Company
Act of 1940. Under the Plan, the Portfolio may not incur distribution and serv-
ice fees which exceed an annual rate of 0.75% of the Portfolio's net assets,
however,
F-11
<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.
F-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.
F-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.
F-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.
F-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.
F-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.
F-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 or-
ganized 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 port-
folio 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 fi-
nancial 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 af-
fect 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 amor-
tized 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 ap-
proximately $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 under-
lying 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 collat-
eral 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 col-
lateral 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.
F-9
<PAGE>
TJ CORE EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
Permanent book and tax basis differences relating to shareholder distri-
butions may result in reclassifications to undistributed net investment in-
come (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 identifica-
tion 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 calcu-
lating 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 sub-
sidiary 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 ex-
penses, 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 re-
ceive 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 bil-
lion of the combined aggregate net assets; plus 0.05% of the combined aggre-
gate 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 af-
ter 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 serv-
ices. 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, com-
puted 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 mil-
lion 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 "Dis-
tributor"), 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 as-
sets. 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 cur-
rently 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 se-
curities.
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 ex-
penses 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 high-
lights 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 as-
sets and the financial highlights for the period from September 28, 1995 (com-
mencement of operations) through April 30, 1996, in conformity with generally
accepted accounting principles. These financial statements and financial high-
lights (hereafter referred to as "financial statements") are the responsibil-
ity 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 reason-
able assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence support-
ing the amounts and disclosures in the financial statements, assessing the ac-
counting 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 corre-
spondence with the custodian, provides a reasonable basis for the opinion ex-
pressed 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>
PART C
UAM FUNDS TRUST
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(A) FINANCIAL STATEMENTS:
Included in Part A for the Portfolios listed below are "Financial
Highlights" for the period from the date indicated to the period
ended October 31, 1996:
BHM&S Total Return Bond Portfolio Institutional Class Shares
(November 1, 1995)
BHM&S Total Return Bond Portfolio Institutional Service Class Shares
(November 1, 1995)
Chicago Asset Management Intermediate Bond Portfolio Institutional Class
Shares (January 24, 1995)
Chicago Asset Management Value/Contrarian Portfolio Institutional Class
Shares (December 16, 1994)
IRC Enhanced Index Portfolio Institutional Class Shares (January 23, 1996)
MJI International Equity Portfolio Institutional Class Shares
(September 16, 1994)
Newbold's Equity Portfolio Institutional Class Shares (September 13, 1995)
TJ Core Equity Portfolio Institutional Service Class Shares
(September 28, 1995)
Included in Part A for the Portfolios listed below are "Financial
Highlights" for the period from the date indicated to the fiscal
year ended April 30, 1996:
BHM&S Total Return Bond Portfolio Institutional Class Shares
(November 1, 1995)
BHM&S Total Return Bond Portfolio Institutional Service Class Shares
(November 1, 1995)
Chicago Asset Management Intermediate Bond Portfolio Institutional Class
Shares (January 24, 1995)
Chicago Asset Management Value/Contrarian Portfolio Institutional Class
Shares (December 16, 1994)
IRC Enhanced Index Portfolio Institutional Class Shares (January 23, 1996)
MJI International Equity Portfolio Institutional Class Shares
(September 16, 1994)
Newbold's Equity Portfolio Institutional Class Shares (September 13, 1995)
TJ Core Equity Portfolio Institutional Service Class Shares
(September 28 1995)
Included in Part A for the Portfolio listed below are "Financial
Highlights" for the period from the date indicated to the period ended
September 30, 1996:
FPA Crescent Portfolio Institutional Class Shares (June 2, 1993)
Included in Part A for the Portfolio listed below are "Financial
Highlights" for the period from the date indicated to the fiscal year
ended March 31, 1996:
FPA Crescent Portfolio Institutional Class Shares (June 2, 1993)
<PAGE>
Included in Part B:
INCLUDED IN PART B ARE THE SEMI-ANNUAL REPORTS FOR THE FOLLOWING
PORTFOLIOS, EACH DATED OCTOBER 31, 1996, AND ARE INCLUDED IN THIS POST-
EFFECTIVE AMENDMENT NO. 15:
BHM&S Total Return Bond Portfolio Institutional Class Shares and
Institutional Service Class Shares
Chicago Asset Management Intermediate Bond Portfolio Institutional Class
Shares
Chicago Asset Management Value/Contrarian Portfolio Institutional Class
Shares
IRC Enhanced Index Portfolio Institutional Class Shares
MJI International Equity Portfolio Institutional Class Shares
Newbold's Equity Portfolio Institutional Class Shares
TJ Core Equity Portfolio Institutional Service Class Shares
The Financial Statements for the above-referenced Portfolios for the time
periods set forth in each Portfolio's Semi-Annual Report dated October 31,
1996 include:
(a) Statement of Assets and Liabilities as of October 31, 1996;
(b) Statement of Operations for the period ended October 31, 1996;
(c) Statement of Changes in Net Assets for the period ended October 31,
1996;
(d) Financial Highlights as of October 31, 1996; and
(e) Notes to Financial Statements.
INCLUDED IN PART B ARE THE ANNUAL REPORTS FOR THE FOLLOWING PORTFOLIOS,
EACH DATED APRIL 30, 1996, AND ARE INCLUDED IN THIS POST-EFFECTIVE
AMENDMENT NO. 15: FOR THE FOLLOWING:
BHM&S Total Return Bond Portfolio Institutional Class Shares and
Institutional Service Class Shares
Chicago Asset Management Intermediate Bond Portfolio Institutional Class
Shares
Chicago Asset Management Value/Contrarian Portfolio Institutional Class
Shares
IRC Enhanced Index Portfolio Institutional Class Shares
MJI International Equity Portfolio Institutional Class Shares
Newbold's Equity Portfolio Institutional Class Shares
TJ Core Equity Portfolio Institutional Service Class Shares
The Financial Statements for the above-referenced Portfolios for the time
periods set forth in each Portfolio's Annual Report dated April 30, 1996
include:
(a) Statement of Net Assets as of April 30, 1996;
(b) Statement of Operations for the period ended April 30, 1996;
(c) Statement of Changes in Net Assets for the period ended April 30, 1996;
(d) Financial Highlights as of April 30, 1996;
(e) Notes to Financial Statements; and
(f) Report of Independent Accountants.
<PAGE>
THE SEMI-ANNUAL REPORT FOR THE FOLLOWING PORTFOLIO, DATED SEPTEMBER 30,
1996, IS INCLUDED IN THIS POST-EFFECTIVE AMENDMENT NO. 15:
FPA Crescent Portfolio Institutional Class Shares
The Financial Statements for the above-referenced Portfolio for the time
periods set forth in the Portfolio's Semi-Annual Report dated September 30,
1996 include:
(a) Statement of Net Assets as of September 30, 1996;
(b) Statement of Operations for the period ended September 30, 1996;
(c) Statement of Changes in Net Assets for the period ended September 30,
1996;
(d) Financial Highlights as of September 30, 1996; and
(e) Notes to Financial Statements.
THE ANNUAL REPORT FOR THE FOLLOWING PORTFOLIO DATED MARCH 31, 1996, IS
INCLUDED IN THIS POST-EFFECTIVE AMENDMENT NO. 15:
FPA Crescent Portfolio Institutional Class Shares
The Financial Statements for the above-referenced Portfolio for the time
periods set forth in the Portfolio's Annual Report dated March 31, 1996
include:
(a) Statement of Net Assets as of March 31, 1996;
(b) Statement of Operations for the period ended March 31, 1996;
(c) Statement of Changes in Net Assets for the period ended March 31, 1996;
(d) Financial Highlights as of March 31, 1996;
(e) Notes to Financial Statements; and
(f) Report of Independent Accountants.
<PAGE>
(B) EXHIBITS
Exhibits previously filed by the Fund are incorporated by reference to such
filings. The following table describes the location of all exhibits. In the
table, the following reference is used: PEA14 = Post-Effective Amendment No. 14
filed on September 17, 1996, PEA13 = Post-Effective Amendment No. 13 filed on
August 28, 1996, PEA12 = Post-Effective Amendment No. 12 filed on July 17, 1996,
PEA11 = Post-Effective No. 11 filed on July 1, 1996, PEA10 = Post-Effective
Amendment No. 10 filed on July 1, 1996, PEA9 = Post-Effective Amendment No. 9
filed on May 1, 1996, PEA8 = Post-Effective Amendment No. 8 filed on March 13,
1996, PEA7 = Post-Effective Amendment No. 7 filed on August 28, 1995, PEA4 =
Post-Effective Amendment No. 4 filed on February 9, 1995, PEA3 = Post-Effective
Amendment No. 3 filed on December 14, 1994, PEA2 = Post-Effective Amendment No.
2 filed on November 25, 1994, PEA1 = Post-Effective Amendment No. 1 filed on
November 15, 1994, RS = original Registration Statement on Form N-1A filed on
June 3, 1994 and Pre EA = Pre-Effective Amendment No. 1 filed on August 24,
1994.
<TABLE>
<CAPTION>
Incorporated by
Exhibit Reference to (Location):
- --------- ---------------------------
<S> <C>
1. Declaration of Trust RS
A. Certificate of Amendment to
Certificate of Trust PEA8
2. By-Laws RS
3. Not Applicable
4. Specimen Share Certificate PEA1, PEA2, PEA3, PEA4, PEA11, PEA12, PEA14
5. Forms of Investment Advisory
Agreements RS, PEA1, PEA2, PEA3, PEA4, PEA12, PEA14
6. Form of Distribution Agreement RS
7. Not Applicable
8. Form of Custody Agreements RS
9. A. Fund Administration Agreement PEA13
B. Mutual Funds Service Agreement PEA13
10. Opinion and Consent of Counsel Pre EA
11. Consent of Independent Accountants
A. Consent of Independent Accountants
with respect to April 30, 1996 Annual Reports PEA13; Filed herewith
B. Consent of Independent Accountants
with respect to March 31, 1996 Annual Reports Filed herewith
12. Other Financial Statements Not Applicable
13. Agreement for Providing Initial Capital Pre EA
14. Not Applicable
15. Not Applicable
16. Performance Quotation Schedules Filed herewith
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Incorporated by
Exhibit Reference to (Location):
- --------- ---------------------------
<S> <C>
18. Rule 18f-3 Multiple Class Plan PEA 8
24. Powers of Attorney RS, PEA7
27. Financial Data Schedules for periods
ended:
A. April 30, 1996 PEA13; Filed herewith
B. October 31, 1996 Filed herewith
C. March 31, 1996 Filed herewith
D. September 30, 1996 Filed herewith
</TABLE>
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Registrant is not controlled by or under common control with any person.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
<TABLE>
<CAPTION>
NUMBER OF RECORD HOLDERS
TITLE OF CLASS OR SERIES AS OF NOVEMBER 30, 1996
- ------------------------ -------------------------
<S> <C>
BHM&S Total Return Bond Portfolio Institutional
Class Shares............................................................. 7
BHM&S Total Return Bond Portfolio Institutional
Service Class Shares..................................................... 13
Chicago Asset Management Value/Contrarian Portfolio
Institutional Class Shares............................................... 18
Chicago Asset Management Intermediate Bond Portfolio
Institutional Class Shares............................................... 11
FPA Crescent Portfolio Institutional Class Shares......................... 148
IRC Enhanced Index Portfolio Institutional Class
Shares................................................................... 12
MJI International Equity Portfolio Institutional
Class Shares............................................................. 45
Newbold's Equity Portfolio Institutional Class Shares..................... 23
TJ Core Equity Portfolio Institutional Service Class
Shares................................................................... 13
Total..................................................................... 290
</TABLE>
ITEM 27. INDEMNIFICATION
Reference is made to Article VI of Registrant's Declaration of Trust, which is
incorporated herein by reference. Registrant hereby also makes the undertaking
consistent with Rule 484 under the Securities Act of 1933, as amended.
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Reference is made to the caption "Fund Management and Administration" in the
Prospectuses constituting Part A of this Registration Statement and "Investment
Adviser" in Part B of this Registration Statement. The information required by
this Item 28 with respect to each director, officer, or partner of each
investment adviser of the Registrant is incorporated by reference to the
<PAGE>
Forms ADV filed by the investment advisers listed below with the Securities and
Exchange Commission pursuant to the Investment Advisers Act of 1940, as amended,
on the dates and under the File numbers indicated:
<TABLE>
<CAPTION>
Investment Adviser Date Filed File No.
- ------------------ ---------- ---------
<S> <C> <C>
Jacobs Asset Management, L.P. June 14, 1996 801-49790
First Pacific Advisors, Inc. March 28, 1996 801-39512
Chicago Asset Management Company March 7, 1996 801-20197
Murray Johnstone International
Ltd. January 31, 1996 801-34926
Newbold's Asset Management, Inc. September 6, 1996 801-33560
Tom Johnson Investment
Management, Inc. March 29, 1996 801-42549
Dwight Asset Management Company March 22, 1996 801-45304
Lotsoff Capital Management March 31, 1996 801-19825
Investment Research Company June 25, 1996 801-31292
Hanson Investment Management
Company July 23, 1996 801-14817
Barrow, Hanley, Mewhinney &
Strauss, Inc. February 29, 1996 801-31237
</TABLE>
Jacobs Asset Management, L.P., First Pacific Advisors, Inc., Chicago Asset
Management Company, Murray Johnstone International Ltd., Newbold's Asset
Management, Inc., Tom Johnson Investment Management, Inc., Dwight Asset
Management Company, Investment Research Company, Hanson Investment Management
Company and Barrow, Hanley, Mewhinney & Strauss, Inc. are wholly-owned
affiliates of United Asset Management Corporation ("UAM"), a Delaware
corporation owning firms engaged primarily in institutional investment
management.
ITEM 29. PRINCIPAL UNDERWRITERS
(a) UAM Fund Distributors, Inc., the firm which acts as sole distributor
of the Registrant's shares, also acts as sole distributor for UAM Funds,
Inc.
(b) Not applicable.
(c) Not applicable.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
The books, accounts and other documents required by Section 31(a) under the
Investment Company Act of 1940, as amended, and the rules promulgated thereunder
will be maintained in the physical possession of the Registrant, the
Registrant's Advisers, the Registrant's Sub-Transfer and Sub-Administrative
Agent (Chase Global Funds Services Company, 73 Tremont Street, Boston,
Massachusetts 02108) and the Registrant's Custodian Bank.
ITEM 31. MANAGEMENT SERVICES
Not Applicable
ITEM 32. UNDERTAKINGS
(a) Not applicable
<PAGE>
(b) (i) Registrant hereby undertakes to file a Post-Effective Amendment
including reasonably current financial statements which need not be
certified for the Jacobs International Octagon Portfolio
Institutional Class Shares, within four to six months from the
commencement of operations of the Portfolio.
(ii) Registrant hereby undertakes to file a Post-Effective Amendment
including reasonably current financial statements which need not be
certified for the Dwight Principal Preservation Portfolio
Institutional Class Shares, within four to six months from the
commencement of operations of the Portfolio.
(iii) Registrant hereby undertakes to file a Post-Effective Amendment
including reasonably current financial statements which need not be
certified for the Hanson Equity Portfolio Institutional Class shares
within four to six months from the commencement of operations of the
Portfolio.
(c) Registrant hereby undertakes to furnish each person to whom a prospectus
is delivered with a copy of the Registrant's latest annual report to
shareholders, upon request and without charge.
(d) Registrant hereby undertakes to call a meeting of shareholders for the
purpose of voting upon the question of the removal of a Trustee or
Trustees when requested in writing to do so by the holders of at least
10% of the Registrant's outstanding shares and in connection with such
meeting to comply with the provisions of Section 16(c) of the Investment
Company Act of 1940, as amended, relating to shareholder communications.
<PAGE>
UAM FUNDS TRUST
(FORMERLY THE REGIS FUND II)
FILE NOS. 811-8544/33-79858
POST-EFFECTIVE AMENDMENT NO. 15
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
11(A) Consent of Independent Accountants with respect to
April 30, 1996 Annual Reports
11(B) Consent of Independent Accountants with respect to
March 31, 1996 Annual Reports
16 Performance Quotation Schedules
27(A) Financial Data Schedules for period ended April
30, 1996
27(B) Financial Data Schedules for period ended October
31, 1996
27(C) Financial Data Schedules for period ended March
31, 1996
27(D) Financial Data Schedules for period ended
September 30, 1996
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Amendment to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Boston and Commonwealth of
Massachusetts on the 3rd day of January, 1997. The Registrant certifies that it
meets all of the requirements for effectiveness of this Amendment pursuant to
Rule 485(b) under the Securities Act of 1933.
UAM FUNDS TRUST
*
-------------------
Norton H. Reamer
Chairman and President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated:
<TABLE>
<CAPTION>
<S>
<C>
* , Chairman and President January 3, 1997
- -------------------
Norton H. Reamer
* , Trustee January 3, 1997
- -------------------
John T. Bennett, Jr.
* , Trustee January 3, 1997
- -------------------
Philip D. English
* , Trustee January 3, 1997
- -------------------
William A. Humenuk
* , Trustee January 3, 1997
- -------------------
Peter M. Whitman, Jr.
/s/Gary L. French , Treasurer January 3, 1997
- -------------------
Gary L. French
/s/Karl O. Hartmann January 3, 1997
- -------------------
* Karl O. Hartmann
(Attorney-in-Fact)
</TABLE>
<PAGE>
Schedule or Computation of Performance Quotations
B H M & S Total Return Bond Portfolio
Institutional Class
Exhibit 16
1. Average Annual Return (As of October 31, 1996)
P(1 + T)/N/ = ERV
WHERE: P = A hypothetical initial payment of $1,000
T = average annual total return
N = number of years
ERV = ending redeemable value at end of the period
<TABLE>
<CAPTION>
Since Inception
One Year 11/01/95
-------- --------
<S> <C> <C>
P = $1,000 $1,000
T = 4.000% 4.000%
N = 1.00 years 1.00 years
ERV = $1,040 $1,040
</TABLE>
2. Yield (30 days ending October 31, 1996) Yield = 2[(a-b/cd)+1)/6/ -1]
WHERE: a = dividends and interest paid during the period $58,003
b = expenses accrued during the period (net of
reimbursements) $5,235
c = the average daily number of shares outstanding
during the period 1,149,537
d = the maximum offering price per share on the last
day of the period $10.09
Yield = 5.52%
<PAGE>
Schedule or Computation of Performance Quotations
B H M & S Total Return Bond Portfolio
Institutional Service Class
Exhibit 16
1. Average Annual Return (As of October 31, 1996)
P (1 + T)/N/ = ERV
WHERE: P = A hypothetical initial payment of $1,000
T = average annual total return
N = number of years
ERV = ending redeemable value at end of the period
<TABLE>
<CAPTION>
Since Inception
One Year 11/01/95
-------- --------
<S> <C> <C>
P = $1,000 $1,000
T = 3.647% 3.647%
N = 1.00 years 1.00 years
ERV = $1,036 $1,036
</TABLE>
2. Yield (30 days ending October 31, 1996) Yield = 2[(a-b/cd)+1)/6/ -1]
WHERE: a = dividends and interest paid during the period $13,864
b = expenses accrued during the period (net of
reimbursements) $1,811
c = the average daily number of shares outstanding
during the period 267,479
d = the maximum offering price per share on the last
day of the period $10.07
Yield = 5.43%
<PAGE>
Schedule or Computation of Performance Quotations
Chicago Asset Management Intermediate Bond Portfolio
Exhibit 16
1. Average Annual Return (As of October 31, 1996)
P (1 + T)/N/ = ERV
WHERE: P = A hypothetical initial payment of $1,000
T = average annual total return
N = number of years
ERV = ending redeemable value at end of the period
<TABLE>
<CAPTION>
Since Inception
One Year 01/24/95
-------- --------
<S> <C> <C>
P = $1,000 $1,000
T = 4.878% 9.093%
N = 1.00 years 1.77 years
ERV = $1,049 $1,167
</TABLE>
2. Yield (30 days ending October 31, 1996) Yield = 2[(a-b/cd)+1)/6/ -1]
WHERE: a = dividends and interest paid during the period $43,972
b = expenses accrued during the period (net of
reimbursements) $5,352
c = the average daily number of shares outstanding
during the period 794,073
d = the maximum offering price per share on the last
day of the period $10.48
Yield = 5.63%
<PAGE>
Schedule or Computation of Performance Quotations
Chicago Asset Management Value/Contrarian Portfolio
Exhibit 16
1. Average Annual Return (As of October 31, 1996)
P (1 + T)/N/ = ERV
WHERE: P = A hypothetical initial payment of $1,000
T = average annual total return
N = number of years
ERV = ending redeemable value at end of the period
<TABLE>
<CAPTION>
Since Inception
One Year 12/16/94
-------- --------
<S> <C> <C>
P = $1,000 $1,000
T = 14.260% 19.759%
N = 1.00 years 1.88 years
ERV = $1,143 $1,403
</TABLE>
<PAGE>
Schedule or Computation of Performance Quotations
IRC Enhanced Index Portfolio
Exhibit 16
1. Average Annual Return (As of October 31, 1996)
P (1 + T)/N/ = ERV
WHERE: P = A hypothetical initial payment of $1,000
T = average annual total return
N = number of years
ERV = ending redeemable value at end of the period
<TABLE>
<CAPTION>
Since Inception
01/23/96
--------
<S> <C>
P = $1,000
T = 12.026%
N = 0.77 years
ERV = $1,092
</TABLE>
<PAGE>
Schedule or Computation of Performance Quotations
MJI International Equity Portfolio
Exhibit 16
1. Average Annual Return (As of October 31, 1996)
P (1 + T)/n/ = ERV
WHERE: P = A hypothetical intitial payment of $1,000
T = average annual total return
N = number of years
ERV = ending redeemable value at end of the period
Since Inception
One Year 09/16/94
-------- --------
P = $1,000 $1,000
T = 8.736% 1.438%
N = 1.00 years 2.13 years
ERV = $1,087 $1,031
<PAGE>
Schedule of Computation of Performance Quotations
Newbold's Equity Portfolio
Exhibit 16
1. Average Annual Return (As of October 31, 1996)
P (1 + T)/n/ = ERV
WHERE: P = A hypothetical intitial payment of $1,000
T = average annual total return
N = number of years
ERV = ending redeemable value at end of the period
Since Inception
One Year 09/13/95
-------- --------
P = $1,000 $1,000
T = 12.998% 16.977%
N = 1.00 years 1.13 years
ERV = $1,130 $1,195
<PAGE>
Schedule or Computation of Performance Quotations
TJ Core Equity Portfolio
Exhibit 16
1. Average Annual Return (As of October 31, 1996)
P (1 + T)/n/ = ERV
WHERE: P = A hypothetical intitial payment of $1,000
T = average annual total return
N = number of years
ERV = ending redeemable value at end of the period
Since Inception
One Year 09/28/95
-------- --------
P = $1,000 $1,000
T = 19.753% 17.928%
N = 1.00 years 1.09 years
ERV = $1,199 $1,198
<PAGE>
Schedule or Computation of Performance Quotations
FPA Cresent
Exhibit 16
1. Average Annual Return (As of September 30, 1996)
P(1 + T)/N/ = ERV
WHERE: P A hypothetical initial payment of $1,000
T average annual total return
N number of years
ERV ending redeemable value at end of the period
<TABLE>
<CAPTION>
Since Inception
One Year 06/02/93
-------- --------
<S> <C> <C>
P $1,000 $1,000
T 17.648% 16.399%
N 1.00 years 3.33 years
ERV $1,176 $1,754
</TABLE>
<PAGE>
Consent of Independent Accountants
We hereby consent to the use in the Statements of Additional Information
constituting part of this Post-Effective Amendment No. 15 to the registration
statement on Form N-1A (the "Registration Statement") of our reports dated June
14, 1996, relating to the financial statements and financial highlights
appearing in the April 30, 1996 Annual Reports to Shareholders of the 7 funds
comprising UAM Funds Trust, which appear in such Statement of Additional
Information, and the incorporation by reference of our reports into the
Prospectuses which constitutes part of this Registration Statement. We also
consent to the references to us under the headings "Financial Highlights,"
"Independent Accountants" and "Reports" in the Prospectuses and under the
heading "Financial Statements" in the Statements of Additional Information.
Price Waterhouse LLP
Boston, Massachusetts
December 31, 1996
<PAGE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the use of our report dated April 26, 1996 on the financial
statements and the financial highlights of FPA Crescent Portfolio (formerly
"The Crescent Fund"), a series of shares of the UAM Funds Trust. Such financial
statements and financial highlights appear in the 1996 Annual Report to
Shareholders which is included in the Statement of Additional Information filed
in the Post-Effective Amendment to the Registration Statement on Form N-1A of
UAM Funds Trust. We also consent to the references to our Firm in the
Registration Statement and Prospectus.
/s/ Tait, Weller & Baker
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
January 2, 1997
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000924727
<NAME> UAM TRUST FUNDS
<SERIES>
<NUMBER> 061
<NAME> BHM&S TOTAL RETURN BOND PORTFOLIO, INSTITUTIONAL CLASS
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> MAY-01-1995
<PERIOD-END> OCT-31-1996
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<INVESTMENTS-AT-VALUE> 15,386
<RECEIVABLES> 197
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 15,583
<PAYABLE-FOR-SECURITIES> 509
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 36
<TOTAL-LIABILITIES> 545
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 14,847
<SHARES-COMMON-STOCK> 1,222
<SHARES-COMMON-PRIOR> 248
<ACCUMULATED-NII-CURRENT> 79
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (79)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 191
<NET-ASSETS> 15,038
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 228
<OTHER-INCOME> 0
<EXPENSES-NET> (23)
<NET-INVESTMENT-INCOME> 205
<REALIZED-GAINS-CURRENT> (78)
<APPREC-INCREASE-CURRENT> 327
<NET-CHANGE-FROM-OPS> 454
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (94)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 968
<NUMBER-OF-SHARES-REDEEMED> (37)
<SHARES-REINVESTED> 10
<NET-CHANGE-IN-ASSETS> 9,721
<ACCUMULATED-NII-PRIOR> 35
<ACCUMULATED-GAINS-PRIOR> (2)
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<GROSS-EXPENSE> 79
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<PER-SHARE-DIVIDEND> (0.25)
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000924727
<NAME> UAM FUNDS TRUST
<SERIES>
<NUMBER> 062
<NAME> BHM&S TOTAL RETURN BOND PORTFOLIO, INSTITUTIONAL SERV. CLASS
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> MAY-01-1995
<PERIOD-END> OCT-31-1996
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<INVESTMENTS-AT-VALUE> 15,386
<RECEIVABLES> 197
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 15,583
<PAYABLE-FOR-SECURITIES> 509
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 36
<TOTAL-LIABILITIES> 545
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 14,487
<SHARES-COMMON-STOCK> 269
<SHARES-COMMON-PRIOR> 292
<ACCUMULATED-NII-CURRENT> 79
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (79)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 191
<NET-ASSETS> 15,038
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 228
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<EXPENSES-NET> (23)
<NET-INVESTMENT-INCOME> 205
<REALIZED-GAINS-CURRENT> (78)
<APPREC-INCREASE-CURRENT> 327
<NET-CHANGE-FROM-OPS> 454
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (66)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 737
<NUMBER-OF-SHARES-REDEEMED> (105)
<SHARES-REINVESTED> 7
<NET-CHANGE-IN-ASSETS> 9,721
<ACCUMULATED-NII-PRIOR> 35
<ACCUMULATED-GAINS-PRIOR> (2)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 12
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 79
<AVERAGE-NET-ASSETS> 7,152
<PER-SHARE-NAV-BEGIN> 9.84
<PER-SHARE-NII> .28
<PER-SHARE-GAIN-APPREC> .19
<PER-SHARE-DIVIDEND> (0.24)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.07
<EXPENSE-RATIO> 0.80
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000924727
<NAME> UAM FUNDS TRUST
<SERIES>
<NUMBER> 3
<NAME> CHICAGO ASSET MANAGEMENT INTERMEDIATE BOND PORTFOLIO
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> MAY-01-1996
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 8,022
<INVESTMENTS-AT-VALUE> 8,146
<RECEIVABLES> 153
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 21
<TOTAL-ASSETS> 8,320
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 27
<TOTAL-LIABILITIES> 27
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 8,093
<SHARES-COMMON-STOCK> 791
<SHARES-COMMON-PRIOR> 768
<ACCUMULATED-NII-CURRENT> 58
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 18
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 124
<NET-ASSETS> 8,293
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 273
<OTHER-INCOME> 0
<EXPENSES-NET> (33)
<NET-INVESTMENT-INCOME> 240
<REALIZED-GAINS-CURRENT> 7
<APPREC-INCREASE-CURRENT> 70
<NET-CHANGE-FROM-OPS> 317
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (240)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 13
<NUMBER-OF-SHARES-REDEEMED> (13)
<SHARES-REINVESTED> 23
<NET-CHANGE-IN-ASSETS> 312
<ACCUMULATED-NII-PRIOR> 58
<ACCUMULATED-GAINS-PRIOR> 12
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<GROSS-EXPENSE> 82
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<PER-SHARE-NAV-BEGIN> 10.39
<PER-SHARE-NII> 0.31
<PER-SHARE-GAIN-APPREC> 0.09
<PER-SHARE-DIVIDEND> (0.31)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.48
<EXPENSE-RATIO> 0.81
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000924727
<NAME> UAM FUNDS TRUST
<SERIES>
<NUMBER> 1
<NAME> MJI INTERNATIONAL EQUITY PORTFOLIO
<MULTIPLIER> 1,000
<S> <C>
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<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> MAY-01-1995
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<INVESTMENTS-AT-VALUE> 20,925
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<OTHER-ITEMS-LIABILITIES> 55
<TOTAL-LIABILITIES> 405
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 20,100
<SHARES-COMMON-STOCK> 2,062
<SHARES-COMMON-PRIOR> 837
<ACCUMULATED-NII-CURRENT> 15
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (18)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 645
<NET-ASSETS> 20,742
<DIVIDEND-INCOME> 100
<INTEREST-INCOME> 20
<OTHER-INCOME> 0
<EXPENSES-NET> (85)
<NET-INVESTMENT-INCOME> 36
<REALIZED-GAINS-CURRENT> (203)
<APPREC-INCREASE-CURRENT> 116
<NET-CHANGE-FROM-OPS> (51)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,399
<NUMBER-OF-SHARES-REDEEMED> (174)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 12,150
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 184
<OVERDISTRIB-NII-PRIOR> (20)
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<GROSS-EXPENSE> 134
<AVERAGE-NET-ASSETS> 11,229
<PER-SHARE-NAV-BEGIN> 10.27
<PER-SHARE-NII> 0.03
<PER-SHARE-GAIN-APPREC> (0.24)
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<PER-SHARE-NAV-END> 10.06
<EXPENSE-RATIO> 1.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000924727
<NAME> UAM FUNDS TRUST
<SERIES>
<NUMBER> 4
<NAME> NEWBOLD'S EQUITY PORTFOLIO
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> APR-30-1996
<PERIOD-START> SEP-13-1995
<PERIOD-END> APR-30-1996
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<INVESTMENTS-AT-VALUE> 14,033
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<TOTAL-LIABILITIES> 45
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 12,264
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<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 30
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 824
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 972
<NET-ASSETS> 14,090
<DIVIDEND-INCOME> 209
<INTEREST-INCOME> 19
<OTHER-INCOME> 0
<EXPENSES-NET> (65)
<NET-INVESTMENT-INCOME> 163
<REALIZED-GAINS-CURRENT> 129
<APPREC-INCREASE-CURRENT> 972
<NET-CHANGE-FROM-OPS> 1,264
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (133)
<DISTRIBUTIONS-OF-GAINS> (24)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,820
<NUMBER-OF-SHARES-REDEEMED> (550)
<SHARES-REINVESTED> 13
<NET-CHANGE-IN-ASSETS> 14,090
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 36
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 131
<AVERAGE-NET-ASSETS> 11,396
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.14
<PER-SHARE-GAIN-APPREC> 0.98
<PER-SHARE-DIVIDEND> (0.12)
<PER-SHARE-DISTRIBUTIONS> (0.02)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.98
<EXPENSE-RATIO> 0.90
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000924727
<NAME> UAM FUNDS TRUST
<SERIES>
<NUMBER> 5
<NAME> TJ CORE EQUITY PORTFOLIO
<MULTIPLIER> 1,000
<S> <C>
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<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> MAY-01-1995
<PERIOD-END> OCT-31-1996
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<TOTAL-LIABILITIES> 60
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,893
<SHARES-COMMON-STOCK> 178
<SHARES-COMMON-PRIOR> 93
<ACCUMULATED-NII-CURRENT> 2
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 16
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 150
<NET-ASSETS> 2,061
<DIVIDEND-INCOME> 14
<INTEREST-INCOME> 3
<OTHER-INCOME> 0
<EXPENSES-NET> (9)
<NET-INVESTMENT-INCOME> 8
<REALIZED-GAINS-CURRENT> 13
<APPREC-INCREASE-CURRENT> 65
<NET-CHANGE-FROM-OPS> 86
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (7)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 91
<NUMBER-OF-SHARES-REDEEMED> (6)
<SHARES-REINVESTED> 1
<NET-CHANGE-IN-ASSETS> 1,038
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 3
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 5
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 50
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