<PAGE>
UAM Funds
Semi-Annual Report
Hanson Equity Portfolio
- --------------------------------------------------------------------------------
October 31, 1998
[LOGO UAM FUNDS APPEARS HERE]
<PAGE>
UAM FUNDS HANSON EQUITY PORTFOLIO
OCTOBER 31, 1998
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Shareholders' Letter........................................................ 1
Portfolio of Investments.................................................... 5
Statement of Assets and Liabilities......................................... 8
Statement of Operations..................................................... 9
Statement of Changes in Net Assets.......................................... 10
Financial Highlights........................................................ 11
Notes to Financial Statements............................................... 12
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
UAM FUNDS HANSON EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
October 31, 1998
Dear Fellow Shareholders
It is our pleasure to present to you the semi-annual Shareholder report for
the Hanson Equity Portfolio (the "Portfolio") for the six-month period ending
October 31, 1998. The Portfolio was launched on October 2, 1997 and had a
total market value of $22.8 million at October 31, 1998.
PERFORMANCE RESULTS AND OVERVIEW
The Hanson Equity Portfolio posted a -3.21% return for the second quarter and
a -7.38% return for the six months ending October 31, 1998. The S&P 500
generated returns of -1.57% and -0.40% for the same periods respectively. The
Portfolio's performance since inception is 5.40% compared to 15.79% for the
S&P 500.
The Portfolio's holdings did not escape the late summer equity market
correction, although its decline was no more severe than other mutual fund
portfolios of similar size and structure. The hedge fund fiasco and emerging
market trading losses, coupled with recession fears, took their toll on the
financial and cyclical stocks within the Portfolio. The Fed's easing actions
led to a rebound in the Portfolio's performance in October, in which it
outpaced the S&P 500 by 43 basis points. We believe that the U.S. economy will
indeed slow somewhat in 1999 but that recession fears were overblown and we
continue to survey the landscape for attractively valued, consistent earnings
growth companies. We have found investments in health care and
telecommunications and are reviewing several technology companies as we feel
these areas will provide above market returns in 1999.
For the quarter ended October 31, the Portfolio's technology and
communications sectors outperformed not only their respective S&P sectors but
the S&P 500 as well. IBM and Intel both reported excellent quarters and demand
for IBM's new mainframe products and Intel's microprocessors appear very
strong going forward. Information technology spending is an increasingly
greater proportion of overall corporate expenditures as companies realize the
significant productivity gains and cost savings from these investments.
Sophisticated new software enhancements, increased network bandwidth and
issues such as the Euro conversion and Y2K will spur robust demand for more
powerful hardware. The Portfolio's investments in communications have
concentrated on firms with leading edge technology and aggressive business
plans, avoiding the slower moving local Bell companies. An exciting new
addition is Qwest Communications, one of a small group of
1
<PAGE>
UAM FUNDS HANSON EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
companies building a new fiber optic network across the United States that
will offer low cost, high speed voice, data and video services for today's
demanding corporate users.
STRATEGY AND INVESTMENT STYLE
Hanson Investment Management celebrated its 25th anniversary in October 1998
and has established a long track record of out-performance versus the S&P 500.
The Portfolio has been in existence for just over one year and it is our goal,
through strict adherence to our investment philosophy and process, to generate
positive future results versus the S&P 500. Hanson's investment philosophy
consists of investing in a concentrated portfolio of approximately 35 industry
leading companies with proven management that are focused on highly profitable
growth. These companies have above average earnings and dividend growth rates
and possess superior financial strength (as measured by solid balance sheets).
Most importantly, Hanson purchases these companies only when valuations place
them amongst the cheapest of their peers by virtue of low relative price-to-
earnings or price-to-cash-flow ratios. Hanson Investment Management has
employed this investment strategy continuously over the 25-year history of the
firm.
Hanson's investment style can best be characterized as large capitalization
with a "growth-at-a-reasonable-price" metric. Hanson will, however, invest in
companies of smaller capitalization if all other criteria are met.
EQUITY MARKET OVERVIEW AND OUTLOOK
The fiscal year began with equity markets consolidating their gains from the
fourth quarter until a surprise U.S.-led currency intervention to stabilize
international markets in mid-June, combined with prospects of strong domestic
growth and consumer confidence, led stock indices to new highs. But after July
17, the news was all downhill and market participants were treated to one of
the most volatile periods in recent memory. The causes read like a laundry
list of negativity: Japan's continuing financial and economic malaise;
Russia's decision to devalue the ruble and default on some of its debt;
hearings for impeachment proceedings against President Clinton; the near
bankruptcy and last-minute bailout of Long Term Capital Management and the
ensuing liquidity crisis and fears of global recession that spread like
wildfire to reach every emerging and developed market in the world.
The U.S. economy and financial markets were largely unscathed until mid-
August. Consumer spending, housing sales and employment and personal income
gains remained strong. Although policymakers worried that robust growth and
tight labor markets might spark a rise in prices, the slowdown in the
manufacturing and export
2
<PAGE>
UAM FUNDS HANSON EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
sectors of the economy, combined with an influx of cheap imports from Asia,
acted as a brake on inflation. However, after Russia's devaluation and
default, traders rushed to exit other emerging markets and sought the safety
of U.S. Treasuries. Many hedge funds and proprietary trading desks of banks
and securities firms were caught on the other side of this trade and their use
of leverage and complex derivative positions, combined with illiquid
securities, led to steep losses. As lenders began calling more margin and
tightening credit standards, liquidity literally vanished and the selling
became more intense. The Federal Reserve finally stepped in and organized
private sector bail out of one of the largest and most leveraged of hedge
funds, Long Term Capital, to avoid a potential meltdown in global financial
markets.
By the end of the quarter it was apparent that the U.S. economy would be
unable to "remain an oasis of prosperity unaffected by a world that is
experiencing greatly increased stress." Fed Chairman Alan Greenspan used these
words in two separate speeches in September, strongly signaling an ease in
interest rates might be at hand. On September 29th the FOMC lowered the Fed
Funds rate 25 basis points to 5.25%, stating that "the action was taken to
cushion the effects on prospective economic growth in the United States, of
increasing weakness in foreign economies and of less accommodative financial
conditions domestically." Sixteen days later, a surprise inter-meeting 25
basis point cut in both the Fed Funds and discount rates went another step
further in assuring the markets that Greenspan & Co. are indeed on the case.
While talk of recession still permeates the current investment mindset, the
U.S. economy expanded at a greater-than-expected rate in the calendar third
quarter, up 3.3% versus consensus estimates of 2.2%. Combined with the
increased flow in liquidity, this stronger growth should ease some of those
recessionary concerns.
Given the above scenario, the remarkable coincidence of so many negative
events, it should be no surprise that U.S. equity markets suffered their worst
quarter in nearly 8 years. From June 30 to September 30, 1998, the Dow Jones
Industrial Average was off 11.99%, the S&P 500 declined 9.95%, and the NASDAQ
market was down 10.51%. As the extent of banks' and brokerage firms' exposure
to hedge fund and trading losses became apparent and fear of global recession
took hold, financial and cyclical stocks were pounded be selling, each sector
losing over 20% during the quarter. However, the psychological boost of the
Fed's rate cuts, a number of promising earnings reports and positive signals
from global fiscal policymakers helped the markets shrug off the perennial
October curse. The Dow gained 9.61%, the S&P 500 was up 8.13% and the NASDAQ
recovered 4.61% during the month. Not surprisingly, Consumer Cyclicals and
Financials were the
3
<PAGE>
UAM FUNDS HANSON EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
top performing sectors during the month, as the prospect of lower interest
rates improved the economic outlook as well as the attractiveness of financing
activities.
Sincerely,
/s/ DAVID E. POST
David E. Post
President
The investment results presented in the Adviser's letter represent past
performance and should not be construed as a guarantee of future results. If
the Adviser did not have temporary fee waivers and did not assume expenses on
behalf of the Portfolio, total return for the Portfolio would have been lower.
The investment return and principal value of an investment will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than their
original cost.
DEFINITION OF THE COMPARATIVE INDEX
The S&P 500 Index is an unmanaged index composed of 400 industrial, 40
financial, 40 utilities and 20 transportation stocks.
Please note that one cannot invest in an unmanaged index.
4
<PAGE>
UAM FUNDS HANSON EQUITY PORTFOLIO
OCTOBER 31, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 98.3%
<TABLE>
<CAPTION>
SHARES VALUE+
------ -----------
<S> <C> <C>
AEROSPACE & DEFENSE - 4.3%
AlliedSignal, Inc. ....................................... 10,700 $ 416,631
Lockheed Martin Corp. .................................... 5,000 556,875
-----------
973,506
-----------
AUTOMOTIVE - 2.0%
*Lear Corp. .............................................. 14,100 452,962
-----------
BANKS - 6.3%
Citigroup, Inc. .......................................... 13,400 630,637
Wells Fargo & Co. ........................................ 2,200 814,000
-----------
1,444,637
-----------
BEVERAGES, FOOD & TOBACCO - 1.9%
ConAgra, Inc. ............................................ 13,900 423,081
-----------
CAPITAL EQUIPMENT - 1.9%
Deere & Co. .............................................. 12,400 438,650
-----------
COMPUTERS - 6.1%
Intel Corp. .............................................. 7,800 695,662
International Business Machines Corp. .................... 4,650 690,234
-----------
1,385,896
-----------
CONSTRUCTION - 4.0%
*American Standard Companies, Inc. ....................... 14,800 472,675
Clayton Homes, Inc. ...................................... 29,000 447,687
-----------
920,362
-----------
CONSUMER STAPLES - 4.4%
Colgate-Palmolive Co. .................................... 6,700 592,113
Kimberly-Clark Corp. ..................................... 8,400 405,300
-----------
997,413
-----------
ELECTRONICS - 4.0%
*Solectron Corp. ......................................... 16,000 916,000
-----------
ENERGY - 12.9%
British Petroleum Co. plc ADR............................. 8,000 707,500
Enron Corp. .............................................. 15,000 791,250
ENSCO International, Inc. ................................ 43,700 587,219
Transocean Offshore, Inc. ................................ 23,250 858,797
-----------
2,944,766
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
UAM FUNDS HANSON EQUITY PORTFOLIO
OCTOBER 31, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
------ -----------
<S> <C> <C>
ENTERTAINMENT & LEISURE TIME - 3.3%
Carnival Corp., Class A................................... 23,000 $ 744,625
-----------
FINANCIAL SERVICES - 6.0%
Fannie Mae................................................ 12,400 878,075
Franklin Resources, Inc. ................................. 13,000 491,563
-----------
1,369,638
-----------
HOME FURNISHINGS & APPLIANCES - 3.0%
Newell Co. ............................................... 15,800 695,200
-----------
INDUSTRIAL - 0.9%
Dover Corp. .............................................. 6,500 206,375
-----------
INSURANCE - 6.6%
AFLAC, Inc. .............................................. 20,300 773,938
American International Group, Inc. ....................... 8,700 741,675
-----------
1,515,613
-----------
MANUFACTURING - 3.5%
General Electric Co. ..................................... 9,000 787,500
-----------
PHARMACEUTICALS - 5.1%
American Home Products Corp. ............................. 7,800 380,250
Johnson & Johnson......................................... 9,500 774,250
-----------
1,154,500
-----------
RETAIL - 4.5%
Wal-Mart Stores, Inc. .................................... 15,000 1,035,000
-----------
SERVICES - 4.0%
Omnicom Group, Inc. ...................................... 14,600 721,788
Service Corp. International............................... 5,725 203,953
-----------
925,741
-----------
TELECOMMUNICATIONS - 9.0%
*AirTouch Communications, Inc. ........................... 16,000 896,000
*MCI WorldCom, Inc. ...................................... 13,000 718,250
*Qwest Communications International, Inc. ................ 11,300 442,113
-----------
2,056,363
-----------
TRANSPORTATION - 3.0%
Burlington Northern Santa Fe.............................. 22,050 680,794
-----------
WASTE DISPOSAL - 1.6%
Waste Management, Inc. ................................... 8,000 361,000
-----------
TOTAL COMMON STOCKS (Cost $20,773,521) 22,429,622
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
UAM FUNDS HANSON EQUITY PORTFOLIO
OCTOBER 31, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
SHORT TERM INVESTMENT - 1.9%
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
-------- -----------
<S> <C> <C>
REPURCHASE AGREEMENT
Chase Securities, Inc. 4.90%, dated 10/30/98, due
11/02/98, to be repurchased at $448,183,
collateralized by $431,122 of various U.S. Treasury
Notes, 5.375%-6.875%, due 05/31/99-02/15/04, valued
at $448,006 (Cost $448,000).......................... $448,000 448,000
-----------
TOTAL INVESTMENTS-100.2% (Cost $21,221,521)(a)........ 22,877,622
-----------
OTHER ASSETS AND LIABILITIES (NET)-(0.2)%............. (55,436)
-----------
NET ASSETS-100%....................................... $22,822,186
===========
</TABLE>
+ See Note A to Financial Statements.
* Non-Income Producing Security
ADR American Depositary Receipt
(a) The cost for federal income tax purposes was $21,221,521. At October 31,
1998, net unrealized appreciation for all securities based on tax cost
was $1,656,101. This consisted of aggregate gross unrealized
appreciation for all securities of $3,281,747 and aggregate gross
unrealized depreciation for all securities of $1,625,646.
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
UAM FUNDS HANSON EQUITY PORTFOLIO
OCTOBER 31, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
STATEMENT OF ASSETS AND LIABILITIES
ASSETS
Investments, at Cost............................................ $21,221,521
===========
Investments, at Value........................................... $22,877,622
Cash............................................................ 571
Dividends and Interest Receivable............................... 17,916
Receivable for Investments Sold................................. 152,153
Receivable for Portfolio Shares Sold............................ 3,205
Other Assets.................................................... 490
-----------
Total Assets................................................... 23,051,957
-----------
LIABILITIES
Payable for Investments Purchased............................... 179,277
Payable for Investment Advisory Fees -- Note B.................. 12,515
Payable for Administrative Fees -- Note C....................... 8,339
Payable for Trustees' Fees -- Note F............................ 637
Other Liabilities............................................... 29,003
-----------
Total Liabilities.............................................. 229,771
-----------
NET ASSETS...................................................... $22,822,186
===========
NET ASSETS CONSIST OF:
Paid in Capital................................................. $21,890,967
Accumulated Net Investment Loss................................. (40,964)
Accumulated Net Realized Loss................................... (683,918)
Unrealized Appreciation......................................... 1,656,101
-----------
NET ASSETS...................................................... $22,822,186
===========
Institutional Class Shares
Shares Issued and Outstanding (Unlimited authorization, no par
value)......................................................... 2,165,307
NET ASSET VALUE, Offering and Redemption Price Per Share........ $10.54
======
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
UAM FUNDS HANSON EQUITY PORTFOLIO
OCTOBER 31, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
STATEMENT OF OPERATIONS
INVESTMENT INCOME
Dividends........................................................ $ 111,273
Interest......................................................... 12,641
-----------
TOTAL INCOME.................................................... 123,914
-----------
EXPENSES
Investment Advisory Fees -- Note B............................... 81,704
Administrative Fees -- Note C.................................... 31,331
Shareholder Servicing Fees....................................... 18,364
Filing and Registration Fees..................................... 12,262
Printing Fees.................................................... 7,980
Audit Fees....................................................... 6,685
Custodian Fees -- Note D......................................... 1,916
Trustees' Fees -- Note F......................................... 1,330
Legal Fees....................................................... 907
Other Expenses................................................... 2,399
-----------
Net Expenses.................................................... 164,878
-----------
NET INVESTMENT LOSS.............................................. (40,964)
-----------
NET REALIZED LOSS ON INVESTMENTS................................. (808,384)
NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION OF
INVESTMENTS..................................................... (1,022,342)
-----------
NET LOSS ON INVESTMENTS.......................................... (1,830,726)
-----------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS............. $(1,871,690)
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
UAM FUNDS HANSON EQUITY PORTFOLIO
OCTOBER 31, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED OCTOBER 2,
OCTOBER 31, 1997* TO
1998 APRIL 30,
(UNAUDITED) 1998
----------- -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Loss............................... $ (40,964) $ (41,991)
Net Realized Gain (Loss).......................... (808,384) 166,457
Net Change in Unrealized
Appreciation/Depreciation........................ (1,022,342) 2,678,443
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS.................................. (1,871,690) 2,802,909
----------- -----------
CAPITAL SHARE TRANSACTIONS: (1)
Issued............................................ 179,939 23,828,465
Redeemed.......................................... (1,175,877) (941,560)
----------- -----------
NET INCREASE (DECREASE) FROM CAPITAL SHARE
TRANSACTIONS..................................... (995,938) 22,886,905
----------- -----------
TOTAL INCREASE (DECREASE)......................... (2,867,628) 25,689,814
NET ASSETS:
Beginning of Period............................... 25,689,814 --
----------- -----------
End of Period (including accumulated net
investment loss of $40,964 and $-,
respectively).................................... $22,822,186 $25,689,814
=========== ===========
(1) SHARES ISSUED AND REDEEMED:
Shares Issued..................................... 17,027 2,346,914
Shares Redeemed................................... (109,706) (88,928)
----------- -----------
(92,679) 2,257,986
=========== ===========
</TABLE>
* Commencement of Operations
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
UAM FUNDS HANSON EQUITY PORTFOLIO
OCTOBER 31, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS
ENDED OCTOBER 2,
OCTOBER 31, 1997* TO
1998 APRIL 30,
(UNAUDITED) 1998
----------- ----------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.............. $ 11.38 $ 10.00
------- -------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Loss.............................. (0.02) (0.02)
Net Realized and Unrealized Gain (Loss) on
Investments..................................... (0.82) 1.40
------- -------
Total from Investment Operations................. (0.84) 1.38
------- -------
NET ASSET VALUE, END OF PERIOD.................... $ 10.54 $ 11.38
======= =======
TOTAL RETURN...................................... (7.38)%*** 13.80%***
======= =======
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands)............. $22,822 $25,690
Ratio of Expenses to Average Net Assets........... 1.41%** 1.56%**
Ratio of Net Investment Loss to Average Net
Assets........................................... (0.35)%** (0.35)%**
Portfolio Turnover Rate........................... 14% 11%
Ratio of Expenses to Average Net Assets Including
Expense Offsets.................................. 1.41%** 1.56%**
</TABLE>
* Commencement of Operations
** Annualized
*** Not Annualized
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
UAM FUNDS HANSON EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS--(UNAUDITED)
UAM Funds Trust and UAM Funds, Inc. (collectively the "UAM Funds") are
registered under the Investment Company Act of 1940, as amended. The Hanson
Equity Portfolio (the "Portfolio"), a portfolio of UAM Funds Trust, is a
diversified, open-end management investment company. At October 31, 1998, the
UAM Funds were comprised of forty-six active portfolios. The financial
statements of the remaining portfolios are presented separately. The objective
of the Hanson Equity Portfolio is 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.
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: Investments for which market quotations are
readily available are stated at market value, which is determined using
the last reported sale price from the exchange where the security is
primarily traded. If no sales are reported, as in the case of some
securities traded over-the-counter, the market value is determined using
the last reported 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 are stated at
fair value following procedures approved by the 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.
3. REPURCHASE AGREEMENTS: In connection with transactions involving
repurchase agreements, the Portfolio's custodian bank takes possession of
the underlying securities ("collateral"), 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
12
<PAGE>
UAM FUNDS HANSON EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
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 counterparty 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 UAM Funds may transfer their daily uninvested cash
balances into a joint trading account which invests in one or more
repurchase agreement. This joint repurchase agreement is covered by the
same collateral 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.
Permanent book-tax differences, if any, are not included in ending
undistributed net investment income (loss) for the purpose of calculating
net investment income (loss) per share in the financial highlights.
5. OTHER: Security transactions are accounted for on trade date, the
date the trade was executed. Costs used in determining realized gains and
losses on the sale of investment securities are based on the specific
identification method. Dividend income is recorded on the ex-dividend
date. Interest income is recognized on the accrual basis. Most expenses of
the UAM Funds can be directly attributed to a particular portfolio.
Expenses which cannot be directly attributed are apportioned among the
portfolios of the UAM Funds based on their relative net assets. Custodian
fees for the Portfolio are shown gross of expense offsets, if any, for
custodian balance credits.
B. ADVISORY SERVICES: Under the terms of an investment advisory agreement,
Hanson Investment Management 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 for the month.
13
<PAGE>
UAM FUNDS HANSON EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
C. ADMINISTRATIVE SERVICES: UAM Funds Services, Inc. (the "Administrator"),
a wholly-owned subsidiary of UAM, provides and oversees administrative, fund
accounting, dividend disbursing, shareholder servicing and transfer agent
services to the UAM Funds under a Fund Administration Agreement (the
"Agreement"). The Administrator has entered into a Mutual Funds Service
Agreement (the "Mutual Funds Service Agreement") with Chase Global Funds
Services Company ("CGFSC"), a corporate affiliate of The Chase Manhattan Bank,
under which CGFSC provides certain services including, but not limited to,
administrative, fund accounting, dividend disbursing, shareholder servicing
and transfer agent services.
Pursuant to the Agreement, the Portfolio pays the Administrator a two part
monthly fee:
--a Portfolio-specific monthly fee of 0.04% per annum of the average daily
net assets of the Portfolio which is retained by the Administrator.
--a sub-administration fee (the "Sub-Administration Fee") which the
Administrator in turn pays to CGFSC on a monthly basis, calculated as
0.19% of the first $200 million of the combined aggregate net assets of
the UAM Funds; plus 0.11% of the next $800 million of the combined
aggregate net assets of the UAM Funds; plus 0.07% of the next $2 billion
of the combined aggregate net assets of the UAM Funds; plus 0.05% of the
combined aggregate net assets of the UAM Funds in excess of $3 billion.
The Sub-Administration Fee is allocated among the portfolios of the UAM
Funds on the basis of their relative net assets and is 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 over the same period.
Effective October 23, 1998, the Mutual Funds Service Agreement with CGFSC
was revised to exclude dividend disbursing, shareholder servicing and transfer
agent services. Pursuant to the revised Mutual Funds Service Agreement, the
Sub-Administration Fee paid by the Portfolio to the Administrator and in turn
paid to CGFSC is calculated as a base fee per Portfolio of $52,500 annually
plus $7,500 annually for each additional class of shares; plus 0.039% of the
net assets of the Portfolio. Certain portfolios which commenced operations
after October 1, 1997 have a base fee of $39,500 for a period of twelve
months, which increases to $52,500 annually once the twelve months have
expired.
For the six months ended October 31, 1998, UAM Funds Services, Inc. earned
$31,331 from the Portfolio as Administrator of which $25,058 was paid to CGFSC
for its services as Sub-Administrator.
14
<PAGE>
UAM FUNDS HANSON EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
Also, effective October 23, 1998, dividend disbursing and transfer agent
services were sub-contracted to DST Systems, Inc. and shareholder servicing
has been sub-contracted to UAM Shareholder Service Center, Inc., an affiliate
of UAM. The portfolios pay dividend disbursing, transfer agent and shareholder
servicing fees to the Administrator who in turn pays them to DST Systems, Inc.
and UAM Shareholder Services Center, Inc., as appropriate. For the six months
ended October 31, 1998, the Portfolio incurred $129 in shareholder servicing
fees with UAM Shareholder Service Center, Inc. This fee is based on the number
of classes of shares and shareholder accounts.
D. CUSTODIAN: The Chase Manhattan Bank is custodian for the Portfolio's
assets and the assets are held in accordance with the custodian agreement.
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 plus reimbursement of expenses incurred
in attending Trustee meetings, which is allocated proportionally among the
active portfolios of UAM Funds, plus a quarterly retainer of $150 for each
active portfolio of the UAM Funds.
G. PURCHASES AND SALES: For the six months ended October 31, 1998, the
Portfolio made purchases of $3,263,079 and sales of $3,855,662 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, 1998, 100% of total shares outstanding were held by
1 record shareholder.
15
<PAGE>
UAM FUNDS HANSON EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
OFFICERS AND TRUSTEES
Norton H. Reamer William H. Park
Trustee, President and Chairman Vice President
John T. Bennett, Jr. Michael E. DeFao
Trustee Secretary
Nancy J. Dunn Gary L. French
Trustee Treasurer
Philip D. English Robert R. Flaherty
Trustee Assistant Treasurer
William A. Humenuk Michael J. Leary
Trustee Assistant Treasurer
Peter M. Whitman, Jr. Michelle Azrialy
Trustee Assistant Secretary
- --------------------------------------------------------------------------------
UAM FUNDS
P.O. Box 419081
Kansas City, MO 64141-6081
(toll free)
1-877-UAM-LINK (826-5465)
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
This report has been prepared for
shareholders and may be distributed
to others only if preceded or
accompanied by a current prospectus.
