<PAGE>
UAM FUNDS
Annual Report
----------------------
BHM&S Total Return
Bond Portfolio
----------------------
April 30, 1998
UAM
<PAGE>
UAM FUNDS BHM&S TOTAL RETURN BOND PORTFOLIO
- -------------------------------------------------------------------------------
May 27, 1998
Dear Shareholders:
The fiscal year began April 30, 1997 with the long Treasury bond yielding
6.95%. Concerns about an economy and job employment gains that were too strong
gave way to a realization that inflation was going to stay low. Rates began to
decline which accelerated in the last quarter of 1997 as a flight to quality
in the U.S. Treasury market resulted from the turmoil of the Asian markets.
The U.S. dollar appreciated as our currency was seen as the safe haven. Trea-
sury long bond rates had hit a low of 5.69% on January 12th before drifting
higher. Investor concerns resurfaced about economic growth being too strong,
and twice during the fiscal quarter we saw a long bond yield of 6.10%.
The long Treasury bond ended the fiscal year at 5.95% as market sentiment
turned positive with reports of the lowest inflation in three decades continu-
ing despite economic strength and its impact on the job market. The Federal
Government budget is now forecast to have a surplus for the current fiscal
year, and the supply of new Treasury bonds will be declining. Short-term rates
continue to respond to the Federal Reserve, which continues a vocal warning
about inflation but a passive strategy. The following table reviews Treasury
rates from the short term to the long bond.
<TABLE>
<CAPTION>
TREASURY INTEREST
RATES
----------------------
4/30/97 4/30/98 CHANGE
TREASURY ------- ------- ------
<S> <C> <C> <C>
3 Month.................................................. 5.24 4.98 -0.26
6 Month.................................................. 5.52 5.22 -0.30
2 Year................................................... 6.27 5.57 -0.70
3 Year................................................... 6.40 5.60 -0.80
5 Year................................................... 6.57 5.64 -0.93
10 Year.................................................. 6.71 5.67 -1.04
30 Year.................................................. 6.95 5.95 -1.00
</TABLE>
We are a "bottom-up value manager" focused not on market timing but on secu-
rity and sector selection. This process seeks to produce a yield in the port-
folio higher than the market benchmark with returns that are less volatile. We
believe that focus on the so-called "spread sectors" - investment grade
corporates, mortgages, and asset-backed securities offers higher return poten-
tial. Current strategies combine to produce the portfolio comparisons to the
Lehman Aggregate benchmark as shown below.
1
<PAGE>
UAM FUNDS BHM&S TOTAL RETURN BOND PORTFOLIO
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
4/30/98
4/30/98 LEHMAN
BHM&S AGGREGATE
FUND INDEX
-------- ---------
<S> <C> <C>
SUPERIOR RETURNS BELOW AVERAGE VOLATILITY
Yield to Maturity.......................................... 6.3% 6.2%
Current Yield.............................................. 6.8% 6.8%
Quality.................................................... AA AAA
Average Maturity........................................... 7.9 Yrs. 8.6 Yrs.
Modified Duration.......................................... 5.0 Yrs. 5.1 Yrs.
SECTORS*
U.S. Treasury/Agency....................................... 14.7% 48.4%
U.S. Agency Mortgages...................................... 27.5% 29.1%
Asset-backed............................................... 5.5% 1.3%
Industrial................................................. 27.5% 8.0%
Utility.................................................... 2.7% 3.4%
Finance.................................................... 17.0% 6.4%
Yankee..................................................... 0.7% 3.4%
Cash....................................................... 3.3% N/A
</TABLE>
- -----------
* Sector percentages are based on net assets.
BHM&S BOND INVESTMENT STRATEGIES
.CORPORATES
Corporate securities staged a remarkable comeback from the Asian inspired
dramatic spread widening of January, and withstood a record-breaking pace of
new issues during the first quarter of 1998 ($76.8 billion in investment grade
issues). Income offset marginal yield spread widening and as fears of the
Asian financial crisis subsided, investors embraced confidence in continued
strength of corporate cash flow coverages and balance sheet measures. Both
market technicals and fundamental credit parameters have continued to reward
investors' exposure to "credit risk".
BHM&S research success continued in the first quarter of 1998 with ratings
upgrades for NationsBank (A1 to AA3 by Moody's) and General Motors/GMAC (A- to
A S&P). Waste Management ("WMX") was downgraded during the quarter (BAA1A- to
BAA3/BBB) before we purchased bonds, and then put on upgrade watchlist by S&P
after we purchased bonds.
.WASTE MANAGEMENT (WMX) -- The fundamental merits of this company's sig-
nificant operating cash flow and debt service strengths continue
2
<PAGE>
UAM FUNDS BHM&S TOTAL RETURN BOND PORTFOLIO
- -------------------------------------------------------------------------------
to provide adequate protection for bond investors. What the company basi-
cally needed was new management! The ratings downgrade and emotional reac-
tion created attractive value. We therefore bought WMX bonds.
On March 11, 1998, USA Waste Service (the widely acknowledged best managed
company in the industry and another of our favored and owned credits) an-
nounced their $13.5 billion plus stock purchase of WMX. S&P promptly
watchlisted both companies for potential upgrade and Moody's confirmed its
ratings. Yield spreads of both credits have subsequently narrowed dramati-
cally.
.HALLIBURTON -- On February 26, HAL and Dresser announced a "strategic
combination" (merger!) creating an oilfield services and engineering and
construction company with the broadest range of services to the petroleum
industry worldwide. The combined revenues exceed $16 billion and a market
capitalization of over $19 billion. The conservative leverage of the com-
bined company also prompted both Moody's and S&P to immediately place both
companies on watchlist for upgrade.
.CHRYSLER -- Prospects remain solid for 1998 following strong 1997 results
which saw earnings exceed estimates, cash flow exceed capex and addition
of over $200 million in cash to total $7.1 billion at year-end. Notwith-
standing the possibility of further share repurchases in 1998, prospects
favor use of excess cash flow/cash in debt retirement.
.MORTGAGES
The "New Year's Rally" of early January produced a quick 20bp drop in Trea-
sury yields and an unexpectedly large increase in mortgage refinance activity.
As investors responded by reevaluating their opinion of the sector's call
risk, a robust jobs report sparked a sell-off that more than erased the prior
rally's rate decline. A more stable environment evolved over the course of the
first quarter, dampening rate volatility and prepayment fears. The mortgage
sector closed the quarter earning its coupon. The effective duration of the
sector is now a modest 2.29 years, essentially equal to that of the 1-to-5 ma-
turity segment of the market.
.ASSET-BACKED SECURITIES
Industry analysts believe the worst of personal bankruptcies and therefore
consumer installment debt problems have peaked. While this improvement in fun-
damentals may have improved investor sentiments towards credit card and auto
receivable issues, investor options are virtually restricted to floating rate
issues. Stranded-asset ABS's are still in rather limited supply as only a few
states have enacted the prerequisite legislation. Manufactured Housing (MFS),
Collateralized Loan Obligations (CLO) and Collateralized Bond Obligations
(CBO) issuers are using longer maturity structures than we prefer. Deal struc-
ture continues to be the overriding gauge of value.
3
<PAGE>
UAM FUNDS BHM&S TOTAL RETURN BOND PORTFOLIO
- -------------------------------------------------------------------------------
.TREASURY YIELD CURVE
A Federal Reserve "on hold" with Funds at 5.50%, and an underlying rate of
inflation of under 2% must surely satisfy the definition of "monetary re-
straint". These are factors in which the bond market has found great confi-
dence over the past several quarters. Long interest rates have consequently
declined and the curve has flattened. With the 2-to-30 year yield curve clos-
ing the quarter at a slope of +37 basis points after beginning the year at +28
basis points, we continue to favor intermediate maturities in the "belly" of
the curve. Given favorable fundamentals and technicals however, we also want
to be "market-weighted" at the long end of the curve.
INVESTMENT PERFORMANCE
The Portfolio has two separate classes of shares, Institutional Class Shares
("Institutional Shares") and Institutional Service Class Shares ("Service
Shares"). For the year ending April 30, 1998 the total return, encompassing
both price change and income, for the INSTITUTIONAL SHARES WAS 10.16% and the
return of the SERVICE SHARES WAS 9.85%, compared to the Lehman Aggregate Index
return of 10.91%.
Since inception on November 1, 1995 through April 30, 1998 the INSTITUTIONAL
SHARES ANNUALIZED TOTAL RETURN IS 6.74% and the return of the SERVICE SHARES
IS 6.44%, compared to the Lehman Aggregate Index return of 7.25%. Fund ex-
penses that are not included in the market index's return explain the
shortfall in performance for both classes of shares compared to the market in-
dex.
We hope this review answers your questions regarding the portfolio's manage-
ment.
Sincerely,
/s/ John S. Williams
John S. Williams, C.F.A.
Principal
The investment results presented in the Adviser's letter represent past per-
formance 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 be-
half 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.
4
<PAGE>
Performance Comparison
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 PURCHASE IN THE
BHM&S TOTAL RETURN BOND PORTFOLIO AND
THE LEHMAN AGGREGATE BOND INDEX
[LINE GRAPH APPEARS HERE]
- -------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN** FOR PERIOD ENDED APRIL 30, 1998
- -------------------------------------------------------------
1 YEAR SINCE 11/1/95*
- -------------------------------------------------------------
INSTITUTIONAL INSTITUTIONAL
INSTITUTIONAL SERVICE CLASS INSTITUTIONAL SERVICE CLASS
CLASS SHARES SHARES CLASS SHARES SHARES
10.16% 9.85% 6.74% 6.44%
- -------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
Label BHM&S TOTAL RETURN BOND LEHMAN
BHM&S TOTAL RETURN BOND Institutional Service Aggregate
Institutional Class Shares Class Shares Bond Index
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 11/1/95*++ 10000 10000 10000
- ------------------------------------------------------------------------------------------
2 4/30/96 10008 9993 10053
- ------------------------------------------------------------------------------------------
3 4/30/97 10684 10640 10738
- ------------------------------------------------------------------------------------------
4 4/30/98 11769 11688 11910
- ------------------------------------------------------------------------------------------
</TABLE>
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate. When shares are redeemed they may
be worth more or less than the original cost.
* Commencement of Operations
** Total return of the Portfolio reflects fees waived and expenses assumed by
the Adviser. Without such reduction of expenses, total return would be
lower.
+ The comparative index is not adjusted to reflect expenses or other fees
that the SEC requires to be reflected in the Portfolio's performance. The
fees, if reflected, would reduce the performance quoted. The Portfolio's
performance assumes the reinvestment of all dividends and distributions.
The comparative index has been adjusted to reflect reinvestment of
dividends on securities in the index.
Definition of the Comparative Index
-----------------------------------
The Lehman Aggregate Bond Index is an unmanaged index made up of the
Government/Corporate Index, the Mortgage-Backed Securities Index and the
Asset-Backed Securities Index.
Please note that one cannot invest in an unmanaged index.
5
<PAGE>
UAM FUNDS BHM&S TOTAL RETURN BOND PORTFOLIO
APRIL 30, 1998
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
CORPORATE BONDS & NOTES--47.2%
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
---------- ----------
<S> <C> <C>
BANKS - 3.9%
Chase Manhattan Corp., 8.625%, 05/01/02............... $ 400,000 $ 432,588
Chemical NY Corp., 9.75%, 06/15/99.................... 205,000 213,116
First Chicago Corp., 9.875%, 08/15/00................. 225,000 242,656
NationsBank Corp., Senior Notes 7.00%, 09/15/01....... 500,000 513,860
----------
1,402,220
----------
BROADCASTING & PUBLISHING - 1.6%
Viacom, Inc., 7.75%, 06/01/05......................... 540,000 569,262
----------
ENERGY - 1.5%
Louis Dreyfus Natural Gas Corp., 6.875%, 12/01/07..... 540,000 536,150
----------
FINANCIAL SERVICES - 13.1%
Associates Corp. of North America, Series G 8.35%,
12/09/99............................................. 400,000 415,548
Associates Corp. of North America, Series I 6.57%,
10/04/99............................................. 200,000 202,404
Caterpillar Financial Services, Series F 6.32%,
09/01/00............................................. 825,000 831,699
Countrywide Home Loan, Series F 6.38%, 10/08/02....... 900,000 899,811
Ford Motor Credit Corp., 6.125%, 04/28/03............. 345,000 343,886
Ford Motor Credit Corp., 6.625%, 06/30/03............. 450,000 457,375
General Motors Acceptance Corp., 6.375%, 12/01/01..... 950,000 956,925
Travelers Property Casualty Corp., 6.75%, 04/15/01.... 549,000 557,109
----------
4,664,757
----------
INDUSTRIAL - 22.4%
Atlantic Richfield Co., 8.50%, 04/01/12............... 225,000 265,138
Atlantic Richfield Co., 9.875%, 03/01/16.............. 300,000 400,743
Auburn Hills Trust, 12.00%, 05/01/20.................. 625,000 993,900
Belo (A.H.) Corp., 7.25%, 09/15/27.................... 340,000 351,995
Dresser Industries, Inc., 6.25%, 06/01/00............. 500,000 503,255
Halliburton Co., Series A 6.30%, 08/05/02............. 545,000 549,289
Ingersoll-Rand Co., Series B 6.34%, 12/03/01.......... 1,000,000 1,002,750
May Department Stores Co., 7.625%, 08/15/13........... 650,000 712,920
Occidental Petroleum Corp., 6.40%, 04/01/03........... 640,000 637,563
Occidental Petroleum Corp., 6.50%, 04/01/05........... 210,000 208,973
Potash Corp., 7.125%, 06/15/07........................ 425,000 435,396
R&B Falcon Corp., 7.375%, 04/15/18.................... 880,000 859,883
Sears, Roebuck & Co., 7.41%, 03/30/00................. 300,000 307,596
Texaco Capital Corp., 6.19%, 07/09/03................. 500,000 502,762
USA Waste Services Inc., 6.50%, 12/15/02.............. 250,000 250,040
----------
7,982,203
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
UAM FUNDS BHM&S TOTAL RETURN BOND PORTFOLIO
APRIL 30, 1998
- --------------------------------------------------------------------------------
CORPORATE BONDS & NOTES - CONTINUED
FACE
AMOUNT VALUE+
---------- -----------
TECHNOLOGY - 1.3%
WMX Technologies, Inc., 6.65%, 05/15/05............... $ 450,000 $ 453,645
-----------
TRANSPORTATION - 2.2%
Federal Express Corp., 9.65%, 06/15/12................ 250,000 311,880
Norfolk Southern Corp., 7.80%, 05/15/27............... 420,000 472,000
-----------
783,880
-----------
UTILITIES - 1.2%
KN Energy, Inc., 6.65%, 03/01/05...................... 320,000 321,159
Southern California Edison Co., 8.25%, 02/01/00....... 115,000 119,184
-----------
440,343
-----------
TOTAL CORPORATE BONDS & NOTES (Cost $16,674,102)................. 16,832,460
-----------
U.S. GOVERNMENT SECURITIES - 14.7%
U.S. TREASURY BONDS - 5.2%
10.375%, 11/15/12..................................... 930,000 1,230,651
8.125%, 08/15/19...................................... 500,000 623,750
-----------
1,854,401
-----------
U.S. TREASURY NOTES - 9.5%
7.875%, 08/15/01...................................... 1,455,000 1,550,477
7.00%, 07/15/06....................................... 685,000 739,156
6.125%, 11/15/27...................................... 1,060,000 1,084,507
-----------
3,374,140
-----------
TOTAL U.S. GOVERNMENT SECURITIES (Cost $5,224,901)............... 5,228,541
-----------
AGENCY SECURITIES - 27.5%
FEDERAL HOME LOAN MORTGAGE CORP. - 11.5%
Gold Pool #E00520, 7.00%, 12/01/12.................... 756,037 770,447
Gold Pool #E00540, 6.00%, 03/01/13.................... 847,000 835,354
Gold Pool #C00436, 7.50%, 12/01/25.................... 2,438,631 2,501,108
-----------
4,106,909
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 2.8%
Pool #303972, 7.00%, 07/01/03......................... 145,880 148,068
Pool #416831, 6.50%, 03/01/28......................... 849,162 840,398
-----------
988,466
-----------
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
UAM FUNDS BHM&S TOTAL RETURN BOND PORTFOLIO
APRIL 30, 1998
- --------------------------------------------------------------------------------
AGENCY SECURITIES - CONTINUED
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
---------- -----------
<S> <C> <C>
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 13.2%
Pool #407633, 7.50%, 07/15/25......................... $ 481,957 $ 495,207
Pool #439991, 7.50%, 01/15/27......................... 1,439,873 1,479,009
Pool #466318, 7.00%, 01/15/28......................... 2,694,855 2,726,843
-----------
4,701,059
-----------
TOTAL AGENCY SECURITIES (Cost $9,692,940)........................ 9,796,434
-----------
ASSET-BACKED SECURITIES - 5.5%
Chase Manhattan Auto Owner Trust, Series 1996-C A3
5.95%, 11/15/00...................................... 325,000 325,302
Chase Manhattan Credit Card Master Trust, Series 1996-
4, Class A 6.73%, 02/15/03........................... 800,000 807,744
Green Tree Financial Corp., Series 1997-2, Class A4
6.66%, 06/15/28...................................... 330,000 333,712
NationsBank Auto Owner Trust, Series 1996-A A3 6.375%,
07/15/00............................................. 496,427 497,887
-----------
TOTAL ASSET-BACKED SECURITIES (Cost $1,964,310).................. 1,964,645
-----------
FOREIGN GOVERNMENT BONDS - 0.7%
Province of Quebec, Global Bond 7.00%, 01/30/07
(Cost $259,572)...................................... 250,000 259,930
-----------
SHORT-TERM INVESTMENT - 3.3%
REPURCHASE AGREEMENT
Chase Securities, Inc. 5.37%, dated 04/30/98, due
05/01/98, to be repurchased at $1,170,175,
collateralized by $1,020,140 of various U.S. Treasury
Obligations, 5.50%-14.00%, due 05/15/04-11/15/27,
valued at $1,183,296 (Cost $1,170,000)............... 1,170,000 1,170,000
-----------
TOTAL INVESTMENTS--98.9% (Cost $34,985,825) (a).................. 35,252,010
-----------
OTHER ASSETS AND LIABILITIES (NET)--1.1%......................... 406,107
-----------
NET ASSETS--100%................................................. $35,658,117
===========
</TABLE>
+ See Note A to Financial Statements.
(a) The cost for federal income tax purposes was $35,007,408. At April 30, 1998,
net unrealized appreciation for all securities based on tax cost was
$244,602. This consisted of aggregate gross unrealized appreciation for all
securities of $324,186 and aggregate gross unrealized depreciation for all
securtities of $79,584.
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
UAM FUNDS BHM&S TOTAL RETURN BOND PORTFOLIO
APRIL 30, 1998
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
ASSETS
Investments, at Cost.............................................. $34,985,825
===========
Investments, at Value............................................. $35,252,010
Cash.............................................................. 128
Interest Receivable............................................... 512,942
Receivable for Portfolio Shares Sold.............................. 10,272
Other Assets...................................................... 227
-----------
Total Assets..................................................... 35,775,579
-----------
LIABILITIES
Payable for Portfolio Shares Redeemed............................. 64,099
Payable for Investment Advisory Fees--Note B...................... 14,637
Payable for Administrative Fees--Note C........................... 9,475
Payable for Distribution and Service Fees--Note E................. 3,235
Payable for Trustees' Fees--Note G................................ 687
Other Liabilities................................................. 25,329
-----------
Total Liabilities................................................ 117,462
-----------
NET ASSETS........................................................ $35,658,117
===========
NET ASSETS CONSIST OF:
Paid in Capital................................................... $34,625,865
Undistributed Net Investment Income............................... 230,556
Accumulated Net Realized Gain..................................... 535,511
Unrealized Appreciation........................................... 266,185
-----------
NET ASSETS........................................................ $35,658,117
===========
Institutional Class Shares
NET ASSETS........................................................ $19,926,506
===========
NET ASSET VALUE, Offering and Redemption Price Per Share 1,923,231
shares outstanding (unlimited authorization, no par value)....... $10.36
======
Institutional Service Class Shares
NET ASSETS........................................................ $15,731,611
===========
NET ASSET VALUE, Offering and Redemption Price Per Share 1,521,319
shares outstanding (unlimited authorization, no par value)....... $10.34
======
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
UAM FUNDS BHM&S TOTAL RETURN BOND PORTFOLIO
FOR THE YEAR ENDED APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
STATEMENT OF OPERATIONS
INTEREST INCOME
Interest.......................................................... $1,948,958
----------
EXPENSES
Investment Advisory Fees--Note B.................................. 107,452
Administrative Fees--Note C....................................... 110,247
Printing Fees..................................................... 42,857
Account Services Fees--Note F..................................... 40,175
Distribution and Service Fees--Note E............................. 30,070
Filing and Registration Fees...................................... 27,898
Audit Fees........................................................ 15,240
Legal Fees........................................................ 6,965
Custodian Fees--Note D............................................ 4,839
Trustees' Fees--Note G............................................ 2,794
Other Expenses.................................................... 4,436
Account Services Fees Waived--Note F.............................. (40,175)
Investment Advisory Fees Waived--Note B........................... (107,452)
Expenses Assumed by the Adviser--Note B........................... (3,527)
----------
Net Expenses Before Expense Offset............................... 241,819
Expense Offset--Note A............................................ (1,360)
----------
Net Expenses After Expense Offset................................ 240,459
----------
NET INVESTMENT INCOME............................................. 1,708,499
----------
NET REALIZED GAIN ON INVESTMENTS.................................. 719,181
NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION ON
INVESTMENTS...................................................... 340,239
----------
NET GAIN ON INVESTMENTS........................................... 1,059,420
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.............. $2,767,919
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
UAM FUNDS BHM&S TOTAL RETURN BOND PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEARS ENDED APRIL 30,
1998 1997
------------ -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income............................. $ 1,708,499 $ 696,689
Net Realized Gain (Loss).......................... 719,181 (41,214)
Net Change in Unrealized
Appreciation/Depreciation........................ 340,239 61,915
------------ -----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS....................................... 2,767,919 717,390
------------ -----------
DISTRIBUTIONS:
Net Investment Income
Institutional Class............................... (928,980) (462,628)
Institutional Service Class....................... (671,335) (152,667)
Net Realized Gain:
Institutional Class............................... (76,247) --
Institutional Service Class....................... (58,332) --
------------ -----------
TOTAL DISTRIBUTIONS............................... (1,734,894) (615,295)
------------ -----------
CAPITAL SHARE TRANSACTIONS (NOTE K):
Institutional Class:
Issued............................................ 16,743,202 10,616,111
In Lieu of Cash Distributions..................... 1,005,227 462,628
Redeemed.......................................... (11,553,123) (532,897)
------------ -----------
Net Increase from Institutional Class Shares...... 6,195,306 10,545,842
------------ -----------
Institutional Service Class:
Issued............................................ 14,982,887 2,374,305
In Lieu of Cash Distributions..................... 722,074 152,667
Redeemed.......................................... (4,382,135) (1,383,926)
------------ -----------
Net Increase from Institutional Service Class
Shares........................................... 11,322,826 1,143,046
------------ -----------
NET INCREASE FROM CAPITAL SHARE TRANSACTIONS...... 17,518,132 11,688,888
------------ -----------
TOTAL INCREASE.................................... 18,551,157 11,790,983
NET ASSETS:
Beginning of Year................................. 17,106,960 5,315,977
------------ -----------
End of Year (including undistributed net
investment income of $230,556 and $117,102,
respectively).................................... $ 35,658,117 $17,106,960
============ ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
UAM FUNDS 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
-------------------------------------- --------------------------------------
YEAR ENDED YEAR ENDED NOVEMBER 1, YEAR ENDED YEAR ENDED NOVEMBER 1,
APRIL 30, APRIL 30, 1995*** TO APRIL 30, APRIL 30, 1995*** TO
1998++ 1997++ APRIL 30, 1996++ 1998++ 1997++ APRIL 30, 1996++
---------- ---------- ---------------- ---------- ---------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 9.96 $ 9.85 $10.00 $ 9.95 $ 9.84 $10.00
------- ------- ------ ------- ------ ------
Income from Investment
Operations
Net Investment Income.. 0.58 0.60 0.28 0.56 0.57 0.27
Net Realized and
Unrealized Gain (Loss)
on Investments........ 0.41 0.05 (0.27) 0.40 0.05 (0.27)
------- ------- ------ ------- ------ ------
Total from Investment
Operations............ 0.99 0.65 0.01 0.96 0.62 --
------- ------- ------ ------- ------ ------
Distributions:
Net Investment Income.. (0.55) (0.54) (0.16) (0.53) (0.51) (0.16)
Net Realized Gain...... (0.04) -- -- (0.04) -- --
------- ------- ------ ------- ------ ------
Total Distributions.... (0.59) (0.54) (0.16) (0.57) (0.51) (0.16)
------- ------- ------ ------- ------ ------
Net Asset Value, End of
Period $ 10.36 $ 9.96 $ 9.85 $ 10.34 $ 9.95 $ 9.84
======= ======= ====== ======= ====== ======
TOTAL RETURN+........... 10.16% 6.75% 0.08%** 9.85% 6.47% (0.07)%**
======= ======= ====== ======= ====== ======
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of
Period (Thousands)..... $19,927 $13,062 $2,445 $15,732 $4,045 $2,871
Ratio of Expenses to
Average Net Assets..... 0.68% 0.57% 0.61%* 0.95% 0.82% 0.83%*
Ratio of Net Investment
Income to Average Net
Assets................. 5.69% 6.01% 5.53%* 5.42% 5.78% 5.44%*
Portfolio Turnover
Rate................... 210% 151% 55% 210% 151% 55%
Ratio of Voluntarily
Waived Fees and
Expenses Assumed by the
Adviser to Average Net
Assets................. 0.52% 1.16% 4.63%* 0.45% 1.43% 3.99%*
Ratio of Expenses to
Average Net Assets
Including Expense
Offsets................ 0.68% 0.55% 0.55%* 0.94% 0.80% 0.80%*
</TABLE>
* Annualized
** Not 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 are based on average outstanding shares.
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
UAM FUNDS BHM&S TOTAL RETURN BOND PORTFOLIO
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
UAM Funds Trust and UAM Funds, Inc. (collectively the "UAM Funds") are reg-
istered under the Investment Company Act of 1940, as amended. The BHM&S Total
Return Bond Portfolio (the "Portfolio"), a portfolio of UAM Funds Trust, is a
diversified, open-end management investment company. At April 30, 1998, the
UAM Funds were comprised of forty-four active portfolios. The financial state-
ments of the remaining portfolios are presented separately. The Portfolio is
authorized to offer two separate classes of shares--Institutional Class Shares
and Institutional Service Class Shares. Both classes of shares have identical
voting rights (except Institutional Service Class shareholders have exclusive
voting rights with respect to matters relating to distribution and shareholder
servicing of such shares), dividend, liquidation and other rights. The objec-
tive 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
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: 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.
During the year ended April 30, 1998, the Portfolio utilized capital
loss carryforwards for federal income tax purposes totaling $34,317.
13
<PAGE>
UAM FUNDS BHM&S TOTAL RETURN BOND PORTFOLIO
- -------------------------------------------------------------------------------
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.
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the UAM Funds may transfer their daily uninvested cash bal-
ances into a joint trading account which invests in one or more repurchase
agreement. 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. These dif-
ferences are primarily due to differing book and tax treatments for
paydown gains or losses and the timing of the recognition of gains or
losses on investments.
Permanent book and tax basis differences relating to shareholder distri-
butions resulted in reclassifications of $5,270 to increase undistributed
net investment income and $5,270 to decrease accumulated net realized
gain.
Permanent book-tax differences, if any, are not included in ending un-
distributed 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. 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 attrib-
14
<PAGE>
UAM FUNDS BHM&S TOTAL RETURN BOND PORTFOLIO
- -------------------------------------------------------------------------------
uted are apportioned among the portfolios of the UAM Funds based on their
relative net assets. Income, expenses (other than class specific expenses)
and realized and unrealized gains or losses are allocated to each class of
shares based upon their relative net assets. Custodian fees for the Port-
folio have been increased to include expense offsets, if any, for custo-
dian 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 for a monthly fee calculated at an annual
rate of 0.35% of average daily net assets for the month. For the period from
May 1, 1997 through December 31, 1997, the Adviser had 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 ef-
fect 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. For the period from January 1, 1998 through April
30, 1998, the Adviser has voluntarily agreed to waive a portion of its advi-
sory fees and to assume expenses, if necessary, in order to keep the Portfo-
lio's total annual operating expenses, after the effect of expense offset ar-
rangements, from exceeding 0.90% and 1.15% of average daily net assets of the
Portfolio's Institutional Class Shares and Service Class Shares, 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 un-
der a Fund Administration Agreement (the "Agreement"). Pursuant to the Agree-
ment, 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 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 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 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 at an annual rate of
0.04% of average daily net assets of the Portfolio. The Administrator has en-
tered into a Mutual Funds Service Agreement with Chase Global Funds Services
Company ("CGFSC"), a corporate affiliate of The Chase
15
<PAGE>
UAM FUNDS BHM&S TOTAL RETURN BOND PORTFOLIO
- -------------------------------------------------------------------------------
Manhattan Bank, under which CGFSC agrees to provide certain services, includ-
ing 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 year ended April 30, 1998,
$98,003 was paid to CGFSC for its services.
D. CUSTODIAN: The Chase Manhattan Bank is custodian for the Portfolio's as-
sets 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
Portfolio has adopted Distribution and Service Plans (the "Plans") on behalf
of the Institutional Service Class Shares ("Service Class Shares") pursuant to
Rule 12b-1 under the Investment Company Act of 1940. Under the Plans, the
Portfolio may not incur distribution and service fees which exceed an annual
rate of 0.75% of the Service Class Shares' net assets, however, the Board has
currently limited aggregate payments under the Plans to 0.50% per annum of the
Service Class Shares' net assets. The Portfolio's Service Class Shares are not
currently making payments for distribution fees, however the Service Class
Shares do pay service fees at an annual rate of 0.25% of the average daily
value of Service Class Shares owned by clients of the Service Agents.
F. ACCOUNT SERVICES: The UAM Funds entered into an Account Services Agree-
ment (the "Services Agreement") with UAM Retirement Plan Services, Inc.
("Service Provider"), a wholly-owned subsidiary of UAM. Under the Services
Agreement, the Service Provider agrees to perform certain services for partic-
ipants in a self-directed, defined contribution plan, and for whom the Service
Provider provides participant recordkeeping. Pursuant to the Services Agree-
ment, the Service Provider is entitled to receive, after the end of each
month, a fee at the annual rate of 0.15% of the average aggregate daily net
asset value of shares of the UAM Funds in the accounts for which they provide
services. The Service Provider has voluntarily agreed to waive a portion of
its fees in order to keep the Portfolio's total annual operating expenses, af-
ter the effect of expense offset arrangements, from exceeding 0.90% and 1.15%
of average daily net assets of the Portfolio's Institutional Class Shares and
Institutional Service Class Shares, respectively.
G. 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, plus a quarterly retainer of $150 for each
active portfolio of the UAM Funds and reimbursement of expenses incurred in
attending Trustee meetings.
16
<PAGE>
UAM FUNDS BHM&S TOTAL RETURN BOND PORTFOLIO
- -------------------------------------------------------------------------------
H. PURCHASES AND SALES: For the year ended April 30, 1998, the Portfolio
made purchases of $35,931,132 and sales of $18,942,277 of investment securi-
ties other than long-term U.S. Government and short-term securities. Purchases
and sales of long-term U.S. Government securities total $40,857,201 and
$41,184,514, respectively.
I. 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 0.50%. In addition, a
commitment fee of 0.08% per annum, payable at the end of each calendar quar-
ter, is accrued by each participating Portfolio based on its average daily un-
used portion of the line of credit. During the year ended April 30, 1998, the
Portfolio had no borrowings under the agreement.
J. OTHER: At April 30, 1998, 78% and 56% of total shares outstanding were
held by 4 and 3 record shareholders of the Institutional Class Shares and the
Institutional Service Class Shares, respectively, owning more than 10% of the
aggregate total shares outstanding.
K. CAPITAL SHARE TRANSACTIONS: Transactions in capital shares for the Port-
folios, by class, were as follows:
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS INSTITUTIONAL SERVICE
SHARES CLASS SHARES
----------------------------- -----------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
APRIL 30, 1998 APRIL 30, 1997 APRIL 30, 1998 APRIL 30, 1997
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Shares Issued........... 1,644,535 1,069,573 1,470,225 239,518
In Lieu of Cash
Distributions......... 98,356 46,682 70,652 15,482
Shares Redeemed......... (1,130,795) (53,183) (426,221) (140,200)
---------- --------- --------- --------
Net Increase from
Capital Share
Transactions.......... 612,096 1,063,072 1,114,656 114,800
========== ========= ========= ========
</TABLE>
17
<PAGE>
UAM FUNDS BHM&S TOTAL RETURN BOND PORTFOLIO
- -------------------------------------------------------------------------------
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 assets and liabilities, includ-
ing the portfolio of investments, and the related statements of operations and
of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the BHM&S Total Return Bond Port-
folio (the "Portfolio"), a portfolio of UAM Funds Trust, at April 30, 1998,
and the results of its operations, the changes in its net assets and the fi-
nancial highlights for the periods indicated in conformity with generally ac-
cepted 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 audits. We conducted our audits of
these financial statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain 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
audits, which included confirmation of securities at April 30, 1998 by corre-
spondence with the custodian, provide a reasonable basis for the opinion ex-
pressed above.
Price Waterhouse LLP
Boston, Massachusetts
June 3, 1998
- -------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION: (UNAUDITED)
For the year ended April 30, 1998, the percentage of income earned from direct
treasury obligations was 35.99%.
18
<PAGE>
UAM Funds BHM&S Total Return
Bond 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 Karl O. Hartmann
Trustee Assistant Secretary
Philip D. English Gary L. French
Trustee Treasurer
William A. Humenuk Robert R. Flaherty
Trustee Assistant Treasurer
Charles H. Salisbury, Jr. Gordon M. Shone
Trustee and Executive Vice President Assistant Treasurer
Peter M. Whitman, Jr.
================================================================================
Investment Adviser
Barrow, Hanley, Mewhinney & Strauss, Inc.
3232 McKinney Avenue, 15th Floor
Dallas, TX 75204
Administrator
UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110
Custodian
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, NY 11245
Legal Counsel
Drinker, Biddle & Reath LLP
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, PA 19107-3496
Independent Accountants ------------------------------------
Price Waterhouse LLP This report has been prepared for
160 Federal Street shareholders and may be distributed
Boston, MA 02110 to others only if preceded or
accompanied by a current prospectus.
Distributor ------------------------------------
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
<PAGE>
UAM FUNDS
SEMI-ANNUAL REPORT
------------------------
McKEE PORTFOLIOS
- --------------------------------------------------------------------------------
April 30, 1998
UAM
<PAGE>
UAM FUNDS MCKEE PORTFOLIOS
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Shareholders' Letter........................................................ 1
Portfolio of Investments
U.S. Government........................................................... 10
Domestic Equity........................................................... 13
International Equity...................................................... 16
Small Cap Equity.......................................................... 21
Statement of Assets and Liabilities......................................... 24
Statement of Operations..................................................... 25
Statement of Changes in Net Assets
U.S. Government........................................................... 26
Domestic Equity........................................................... 27
International Equity...................................................... 28
Small Cap Equity.......................................................... 29
Financial Highlights
U.S. Government........................................................... 30
Domestic Equity........................................................... 31
International Equity...................................................... 32
Small Cap Equity.......................................................... 33
Notes to Financial Statements............................................... 34
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
UAM FUNDS MCKEE PORTFOLIOS
- -------------------------------------------------------------------------------
April 30, 1998
MCKEE U.S. GOVERNMENT PORTFOLIO
For the six months ended April 30, 1998, the McKee U.S. Government Portfolio
produced a total return of 2.67 percent. The Portfolio benefited modestly from
changes in duration during the period, but returns were lowered by troubles at
one corporate bond issuer.
Economic Perspective
The economy grew at an annual rate of about 4 percent during the last quarter
of 1997 and the first quarter of 1998. Growth was strong despite the Asian
crisis, which began affecting some manufacturing and export businesses and may
have subtracted as much as one to two percentage points from GDP growth.
Consumer price inflation remained low, at an annualized rate of approximately
1 percent. Falling commodity prices, particularly in the energy sector, as
well as the Asian slowdown and a strong dollar, helped to suppress inflation.
Although wages have been rising, continued U.S. productivity gains helped mit-
igate the effect on unit labor costs.
Despite the strong economy, the Federal Reserve continued to postpone an in-
terest-rate increase. The lack of any sign of rising inflation and the possi-
bility of an Asian-induced slowdown have kept the Fed from acting.
Performance
The Portfolio's performance trailed that of the benchmark Lehman Brothers
Government/Corporate Index, which returned 3.64 percent for the six-month pe-
riod ended April 30, 1998. The Portfolio benefited from a modest shortening of
duration in January (to 1/4 year under the benchmark), followed by a move to a
benchmark-neutral position in early March, when interest rates rose. The lower
return compared to the benchmark index was primarily related to holdings of
Columbia HCA bonds in the corporate sector. The healthcare company's well-pub-
licized troubles significantly affected the value of its bonds, which the
Portfolio sold in February.
Portfolio Structure
As of April 30, 1998, the Portfolio consisted of 31 percent corporate securi-
ties, 52 percent Treasury and government agency securities, 32 percent mort-
gage-backed securities, The ten largest holdings in the Portfolio are listed
below.
1
<PAGE>
UAM FUNDS MCKEE PORTFOLIOS
- -------------------------------------------------------------------------------
LARGEST HOLDINGS BY SECURITY
AT APRIL 30, 1998
<TABLE>
<CAPTION>
% OF
ISSUER COUPON DUE PORTFOLIO
- ------ ------ -------- ---------
<S> <C> <C> <C>
U.S. Treasury Note.................................... 5.875% 11/30/01 9.5%
U.S. Treasury Bond.................................... 9.375% 02/15/06 6.6%
FNMA 1998-26 PA....................................... 6.000% 11/18/17 6.5%
GNMA.................................................. 7.000% 09/15/24 6.5%
U.S. Treasury Note.................................... 8.500% 02/15/20 5.8%
FNMA.................................................. 5.750% 02/15/08 4.7%
FHLMC................................................. 6.750% 05/30/06 4.6%
FNMA.................................................. 7.500% 04/09/07 3.8%
GNMA.................................................. 7.500% 05/01/13 3.8%
FHLMC 2034............................................ 6.000% 04/15/18 3.6%
</TABLE>
Outlook
We expect interest rates to fluctuate within a narrow range for the near fu-
ture. Our expectation is based on a scenario of strong economic growth, low
inflation and stable monetary policy. Given the present environment, we fore-
see no near-term rate action by the Federal Reserve, which is counting on the
Asian situation to help slow economic growth.
MCKEE DOMESTIC EQUITY PORTFOLIO
The McKee Domestic Equity Portfolio had strong performance for the six months
ended April 30, 1998, with a total return of 18.10 percent. This performance
reflects a rebound in equity prices in the first months of 1998, after fears
ceased about the effects of the Asian crisis.
Economic Perspective
The U.S. economy remained vigorous during the six months ended April 30, 1998.
Inflation continued its decline from already low levels, and corporate earn-
ings remained strong. As investors learned more about the Asian crisis and its
likely effect on the U.S. economy, worst-case fears abated, adding to confi-
dence about domestic equities and helping cyclical stocks rebound. The market
was also aided by a surge in mergers and acquisitions.
2
<PAGE>
UAM FUNDS MCKEE PORTFOLIOS
- -------------------------------------------------------------------------------
Performance
The Portfolio's total return for the six months ended April 30 trailed the
benchmark S&P 500 Index, which returned 22.50 percent. Performance was nega-
tively affected by the Portfolio's substantial holding of cyclical stocks.
More recently, the Portfolio has benefited from rebounds in a number of stocks
that had been undeservedly marked down late in 1997 as a result of the Asian
crisis.
Positions in the healthcare, telecommunications, financial services, retailing
and computer software industries contributed positively to results. The Port-
folio was adversely affected by positions in the tobacco, food retailing and
computer hardware industries.
Among individual stocks, Southern New England Telecom, Sterling Software, Bec-
ton Dickinson, Lehman Brothers, Gap, Inc. and apparel-maker Tommy Hilfiger had
particularly good performance during the period. Below-average performers in-
cluded MEMC Electronic Materials, Loews Corporation, Olsten Corporation, Amer-
ican Stores and Philip Morris.
Portfolio Structure
The Portfolio is broadly diversified, but strategically weighted by economic
sector, industry and capitalization. Compared to the overall market, the Port-
folio emphasizes the capital goods, technology and basic industries sectors,
which should perform well under the reasonably healthy economic conditions we
foresee. The portfolio is relatively under-weighted in the utility, financial
and consumer staples sectors.
By industry, the Portfolio has a significant weighting, compared to the
benchmark, in oil refining, computer software and industrial services. It is
under-weighted in banking, home products and energy. The largest industry
holdings are shown below.
LARGEST HOLDINGS BY INDUSTRY
PERCENT OF NET ASSETS AT APRIL 30, 1998
<TABLE>
<S> <C>
Technology................................................................ 16.7%
Pharmaceuticals........................................................... 8.4%
Energy.................................................................... 8.2%
Retail.................................................................... 7.7%
Financial Services........................................................ 7.6%
Services.................................................................. 6.2%
Banks..................................................................... 4.9%
Capital Equipment......................................................... 4.9%
Chemicals................................................................. 4.2%
Beverages, Food & Tobacco................................................. 3.9%
</TABLE>
3
<PAGE>
UAM FUNDS MCKEE PORTFOLIOS
- -------------------------------------------------------------------------------
At April 30, 1998 the Portfolio held 50 stocks. The ten largest company hold-
ings are shown below.
LARGEST HOLDINGS BY COMPANY
PERCENT OF NET ASSETS AT APRIL 30, 1998
<TABLE>
<S> <C>
Green Tree Financial Corp.................................................. 4.7%
Sequent Computer Systems, Inc. ............................................ 3.7%
Sterling Software, Inc..................................................... 3.6%
Aluminum Company of America................................................ 3.3%
Akzo Nobel N.V. ADR........................................................ 3.0%
Advanced Micro Devices, Inc................................................ 2.9%
Stone Energy Corp. ........................................................ 2.9%
ITT Industries, Inc........................................................ 2.8%
AccuStaff, Inc. ........................................................... 2.7%
American Stores Co......................................................... 2.7%
</TABLE>
Outlook
Although we remain optimistic about the long-term outlook for equity in-
vestment, we have become increasingly concerned about the prospect of a down-
turn in the stock market later this year. The fundamental problem is the mar-
ket's overvaluation following the 150-percent advance of the past three years.
At current levels, the S&P 500 Index is trading at 24 times estimated 1998
earnings, which represent an increase of 8 percent from 1997. Simply put, in-
vestors may not continue buying stocks at three times their growth rate, espe-
cially when earnings are decelerating. Also, most valuation methods suggest
the overall market is about 15-25 percent overvalued. Accordingly, a price de-
cline in 1998 or early 1999 is quite possible.
In this more difficult environment, the Portfolio should perform relatively
well since its structure emphasizes mid-cap stocks with superior valuation and
earnings momentum characteristics rather than large cap growth issues, many of
which are trading in uncharted price territory. As a result, our shareholders
are well positioned to benefit from an important future performance
opportunity.
MCKEE INTERNATIONAL EQUITY PORTFOLIO
The McKee International Equity Portfolio continued to produce healthy returns
for the six months ended April 30, 1998. Total return for the period was 14.45
percent. Although the portfolio was initially penalized by its exposure to
Asian markets, it enjoyed vigorous gains from the partial recovery in some of
those markets beginning in February.
4
<PAGE>
UAM FUNDS MCKEE PORTFOLIOS
- -------------------------------------------------------------------------------
Economic Perspective
Most world stock markets outside Asia have risen strongly during recent
months, benefiting from low inflation, low interest rates and strong earnings
growth. European markets in particular registered high returns. While Japan
continued to exhibit lackluster performance, outstanding recent results in
Thailand, Korea and the Philippines suggests a lessening of investor concern
about Asian problems.
Performance
The benchmark Morgan Stanley Capital International EAFE Index returned 15.44
percent for the six-month period ended April 30, 1998. The Portfolio's rela-
tive performance was hurt by investments in Japan, China and Hong Kong. The
Portfolio benefited from relatively large investments in Canada, Finland, Ire-
land, Korea and Mexico.
The Portfolio also benefited from its investments in the healthcare, technolo-
gy, energy, food and chemicals industries. Comparative results were hurt by
investments in the railroad, airline and auto industries.
Among individual stocks, Montedison, Nokia, Alcatel, Svenska Handelsbanken and
Pohang Iron & Steel were the best performers. Nissan Motors, Guangshen Rail-
way, Mitsui & Company, Cathay Pacific and Amada under-performed.
Portfolio Structure
The Portfolio is structured to benefit from continued global economic growth.
At April 30, 1998, it was invested in 24 world markets. Compared to the bench-
mark index, the Portfolio is over-weighted in Canada, Korea and China, while
Japan, the United Kingdom, Germany and Switzerland are under-represented. The
ten largest country weightings are shown below.
LARGEST HOLDINGS BY COUNTRY
PERCENT OF NET ASSETS AT APRIL 30, 1998
<TABLE>
<S> <C>
Japan..................................................................... 12.5%
United Kingdom............................................................ 11.5%
Netherlands............................................................... 7.8%
France.................................................................... 7.7%
Hong Kong................................................................. 5.1%
Finland................................................................... 4.9%
Mexico.................................................................... 4.4%
Canada.................................................................... 4.4%
Germany................................................................... 3.9%
Switzerland............................................................... 3.8%
</TABLE>
5
<PAGE>
UAM FUNDS MCKEE PORTFOLIOS
- -------------------------------------------------------------------------------
Holdings are also widely diversified by company, economic sector and industry.
As of April 30, 1998, the Portfolio held stocks of 56 companies and was in-
vested in all global economic sectors and most major world industries. Com-
pared to the benchmark, the portfolio is over-weighted in the materials, capi-
tal equipment and energy sectors. It is under-weighted in the finance and
service sectors. The ten largest company holdings are shown below.
LARGEST HOLDINGS BY COMPANY
PERCENT OF NET ASSETS AT APRIL 30, 1998
<TABLE>
<S> <C>
Nokia Oyj.................................................................. 4.9%
Nestle S.A. ............................................................... 3.8%
Alcatel Alsthom............................................................ 3.1%
Asia Pulp & Paper Co., Ltd. ............................................... 3.0%
Akzo Nobel N.V. ........................................................... 3.0%
B.A.T. Industries.......................................................... 2.8%
Philips Electronics N.V.................................................... 2.8%
Elan Corp. ................................................................ 2.8%
Montedison S.p.A. ......................................................... 2.7%
YPF S.A. .................................................................. 2.5%
</TABLE>
Outlook
While corporate restructuring in Europe has already contributed to signifi-
cantly higher equity prices in that region, we continue to believe the invest-
ment outlook for most of these markets remain positive. In Asia, markets
should show further signs of recovery in coming months and several Latin Amer-
ican markets also appear to offer strong potential. Indeed, we expect non-U.S.
stocks to outperform domestic equities during the remainder of 1998.
From a strategic standpoint, we continue to favor undervalued stocks with
strong earnings momentum. Many of these stocks are cyclically sensitive and
should benefit from the global economic strength we foresee over the next
year.
MCKEE SMALL-CAP EQUITY PORTFOLIO
The McKee Small Cap Equity Portfolio was launched on November 4, 1997. From
its inception through April 30, 1998, the total return for the Portfolio was
10.06 percent which was a healthy return in a market that has recently favored
large capitalization stocks.
6
<PAGE>
UAM FUNDS MCKEE PORTFOLIOS
- -------------------------------------------------------------------------------
Economic Perspective
The continued vigor of the U.S. economy during the period contributed to the
performance of small-cap stocks. Inflation continued its decline from already
low levels, and small-cap company earnings remained strong, even while growth
slowed somewhat at a number of large companies. The easing of fears about the
Asian crisis also contributed to investor confidence. The investor surge in
merger and acquisition activity in the early months of 1998 gave a further
boost to the equity market and to many small cap stocks.
Performance
In the almost six months since inception, the Portfolio's performance compared
well to the benchmark Russell 2000 Index which returned 9.86 percent for the
period November 4 through April 30, 1998. In particular, the Portfolio bene-
fited from positions in the energy, finance and consumer sectors. With respect
to industries, the Portfolio was helped by positions in financial services,
oil and gas and computer software. Results were hurt by the positions in to-
bacco, forest products and computer hardware.
Among individual stocks, First American Financial, Commerce Bancorp, Avid
Technology, Structural Dynamics Research and LA-Z-Boy had the best perfor-
mance. Swisher International Group, Perceptron Inc., System Software Associ-
ates, Gymboree Corporation and Pioneer Standard Electronics under-performed.
Portfolio Structure
The Portfolio is broadly diversified, yet strategically weighted by economic
sector and industry. It has modest concentrations, compared to the benchmark
index, in the financial and basic industries sectors. It is slightly under-
weighted in capital goods and consumer cyclicals.
Among industries, the Portfolio has an emphasis on computer software, elec-
tronic equipment, and mining and metals compared to the benchmark. It is un-
der-weighted in semiconductors, information services and chemicals.
7
<PAGE>
UAM FUNDS MCKEE PORTFOLIOS
- -------------------------------------------------------------------------------
As of April 30, 1998, there were 44 stocks in the Portfolio. The largest hold-
ings are shown below.
LARGEST HOLDINGS BY COMPANY
PERCENT OF NET ASSETS AT APRIL 30, 1998
<TABLE>
<S> <C>
Delphi Financial Group, Inc. .............................................. 3.4%
Owens & Minor, Inc. ....................................................... 3.3%
Brown & Sharpe Manufacturing Co. .......................................... 3.3%
Commerce Bancorp, Inc. .................................................... 3.2%
Personnel Group of America, Inc. .......................................... 3.1%
Avid Technology, Inc. ..................................................... 3.0%
Stone Energy Corp. ........................................................ 2.9%
Structural Dynamics Research Corp. ........................................ 2.9%
Systems & Computer Technology Corp. ....................................... 2.8%
Mortons Restaurant Group, Inc. ............................................ 2.8%
</TABLE>
Outlook
Our outlook for small-cap stocks remains positive, despite growing concern
about the possibility of a downturn in the broad stock market. Even apart from
their demonstrated superior performance versus large-cap stock over the long
term, small caps are attractive at present because of their better earnings
outlook, their lower valuations and the recent reduction in the capital gains
tax rates, which benefits smaller, growing companies.
Yours truly,
C.S. McKee & Co., Inc.
Note: The investment results presented in the letter above represent past
performance and should not be construed as a guarantee of future results. The
investment return and principal value of an investment will fluctuate so that
an investor's shares, when redeemed, may be worth more or less than their
original cost.
For a complete discussion of the risks associated with international
investing, please refer to the prospectus for the McKee International Equity
Portfolio.
8
<PAGE>
UAM FUNDS MCKEE PORTFOLIOS
- -------------------------------------------------------------------------------
DEFINITION OF THE COMPARATIVE INDICES
The Lehman Brothers Government/Corporate Index is an unmanaged index composed
of a combination of the Government and Corporate Bond Indices. The Government
Index includes public obligations of the U.S. Treasury, issues of Government
agencies, and corporate debt backed by the U.S. Government. The Corporate Bond
Index includes fixed-rate nonconvertible corporate debt. Also included are
Yankee bonds and nonconvertible debt issued by or guaranteed by foreign or
international governments and agencies. All issues are investment grade (BBB)
or higher, with maturities of at least one year and outstanding par value of
at least $100 million for U.S. Government issues and $25 million for others.
Any security downgraded during the month is held in the index until month-end
and then removed. All returns are market value weighted inclusive of accrued
income.
The S&P 500 Index is an unmanaged index composed of 400 industrial, 40
financial, 40 utilities and 20 transportation stocks.
The Morgan Stanley Capital International EAFE Index is an unmanaged index
composed of arithmetic, market value weighted averages of the performance of
over 900 securities listed on the stock exchanges of countries in Europe,
Australia and the Far East.
The Russell 2000 Index is an unmanaged index composed of the 2,000 smallest
stocks in the Russell 3000, a market value weighted index of the 3,000 largest
U.S. publicly companies.
Comparisons of performance assume reinvestment of dividends.
Please note that one cannot invest in an unmanaged index.
9
<PAGE>
UAM FUND MCKEE U.S. GOVERNMENT PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
U.S. GOVERNMENT & AGENCY SECURITIES - 52.1%
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
---------- -----------
<S> <C> <C>
Federal Home Loan Bank
JK-01 1, 5.967%, 3/22/01............................. $ 311,048 $ 310,672
-----------
Federal Home Loan Mortgage Corp.
6.75%, 5/30/06....................................... 1,840,000 1,923,628
7.65%, 5/10/05....................................... 85,000 87,683
-----------
2,011,311
-----------
Federal National Mortgage Association
5.625%, 3/15/01...................................... 1,320,000 1,315,050
5.75%, 2/15/08....................................... 2,020,000 1,982,441
6.70%, 8/10/01....................................... 1,075,000 1,085,933
7.37%, 4/14/04....................................... 140,000 141,938
7.50%, 4/9/07........................................ 1,535,000 1,609,693
-----------
6,135,055
-----------
U.S. Treasury Bond
9.375%, 2/15/06...................................... 2,266,000 2,773,969
-----------
U.S. Treasury Notes
5.875%, 11/30/01..................................... 3,983,000 4,011,438
8.50%, 2/15/20....................................... 1,895,000 2,452,679
-----------
6,464,117
-----------
U.S. Treasury Principal Strips
5/15/17.............................................. 2,083,000 663,498
-----------
TOTAL U.S. GOVERNMENT & AGENCY SECURITIES (Cost $18,033,126).... 18,358,622
-----------
MORTGAGE OBLIGATIONS - 31.7%
Federal Home Loan Mortgage Corp.
Series 1995 PB, CMO, PAC 1, REMIC 6.50%, 9/20/25..... 1,393,000 1,400,383
Series 2034 PN, CMO, PAC (11), REMIC, 6.00%,
4/15/18............................................. 1,500,000 1,493,325
-----------
2,893,708
-----------
Federal National Mortgage Association
Pool #323057, 6.50%, 3/1/13.......................... 1,200,642 1,204,761
Series 1998-26 PA, CMO, PAC, REMIC, 6.00%, 11/18/17.. 2,750,000 2,740,547
-----------
3,945,308
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
UAM FUNDS MCKEE U.S. GOVERNMENT PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
MORTGAGE OBLIGATIONS - CONTINUED
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
---------- -----------
<S> <C> <C>
Government National Mortgage Association
Pool #780742, 7.00%, 9/15/24......................... $2,697,639 $ 2,739,790
TBA, 7.50%, 5/1/13................................... 1,548,000 1,599,270
-----------
4,339,060
-----------
TOTAL MORTGAGE OBLIGATIONS (Cost $11,196,459)................... 11,178,076
-----------
ASSET-BACKED SECURITIES - 7.9%
FINANCIAL SERVICES - 7.9%
Advanta Mortgage Loan Trust, Series 94-1 A1 6.30%,
7/25/25............................................. 78,663 78,259
Countrywide Funding Corp., Series D 6.875%, 9/15/05.. 525,000 538,781
Green Tree Financial Corp., Series 94-7 A4 8.35%,
3/15/20............................................. 250,000 258,877
Indymac Manufactured Housing Contract, Series 98-1 A2
6.39%, 9/25/28...................................... 340,000 342,853
Oakwood Mortgage Investors Inc., Series 95-A A2
6.50%, 9/15/20...................................... 439,853 440,897
The Money Store Home Equity Trust, Series 96-C A3
7.07%, 12/15/16..................................... 550,000 554,052
U.S. West Cap Funding, Inc. 6.75%, 10/1/05........... 155,000 158,294
World Financial Network Credit Card, Series 96-B A
6.95%, 4/15/06...................................... 405,000 420,684
-----------
TOTAL ASSET-BACKED SECURITIES (Cost $2,747,069)................. 2,792,697
-----------
CORPORATE BONDS - 23.2%
FINANCIAL SERVICES - 5.5%
Countrywide Capital I 8.00%, 12/15/26................ 445,000 456,681
Lehman Brothers Holdings 7.125%, 9/15/03............. 748,000 769,505
NB Capital Trust IV 8.25%, 4/15/27................... 626,000 690,947
-----------
1,917,133
-----------
INDUSTRIAL - 12.6%
Nabisco, Inc. 7.55%, 6/15/15......................... 834,000 866,317
News America Holdings, Inc. 7.60%, 10/11/15.......... 731,000 762,068
Philip Morris Cos., Inc. 7.25%, 9/15/01.............. 200,000 205,000
Phillips Petroleum Co. 7.125%, 3/15/28............... 443,000 430,818
Seagate Technology, Inc. Senior Notes 7.125%,
3/1/04.............................................. 833,000 838,206
Time Warner Entertainment Co. 8.375%, 3/15/23........ 775,000 884,469
Xerox Capital Trust I 8.00%, 2/1/27.................. 410,000 434,088
-----------
4,420,966
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
UAM FUND MCKEE U.S. GOVERNMENT PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
CORPORATE BONDS - CONTINUED
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
---------- -----------
<S> <C> <C>
TELECOMMUNICATIONS - 2.4%
Frontier Corp. 7.25%, 5/15/04......................... $ 809,000 $ 843,383
-----------
UTILITIES - 0.7%
Pacific Gas & Electric 5.875%, 10/1/05................ 260,000 254,150
-----------
YANKEE BONDS - 2.0%
Barrick Gold Corp. 7.50%, 5/1/07...................... 675,000 712,968
-----------
TOTAL CORPORATE BONDS (Cost $7,810,898)............... 8,148,600
-----------
</TABLE>
<TABLE>
<S> <C> <C>
SHORT-TERM INVESTMENT - 4.4%
REPURCHASE AGREEMENT - 4.4%
Chase Securities, Inc. 5.37%, dated 4/30/98, due
5/1/98, to be repurchased at $1,538,229,
collateralized by $1,341,004 of various U.S. Treasury
Obligations, 5.50%-14.00%, due 5/15/04-
11/15/27,valued at $1,555,478 (Cost $1,538,000)...... 1,538,000 1,538,000
-----------
TOTAL INVESTMENTS - 119.3% (Cost $41,325,552) (a)............... 42,015,995
-----------
OTHER ASSETS AND LIABILITIES (NET) - (19.3%).................... (6,786,596)
-----------
NET ASSETS - 100%............................................... $35,229,399
===========
</TABLE>
+ See Note A to Financial Statements.
CMO Collateralized Mortgage Obligation
PAC Planned Amortization Class
REMIC Real Estate Mortgage Investment Conduit
(a) The cost for federal income tax purposes was $41,325,552. At April 30,
1998, net unrealized appreciation for all securities based on tax cost
was $690,443. This consisted of aggregate gross unrealized
appreciation for all securities of $727,758 and aggregate gross
unrealized depreciation for all securities of $37,315.
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
UAM FUNDS MCKEE DOMESTIC EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 98.3%
<TABLE>
<CAPTION>
SHARES VALUE+
------ -----------
<S> <C> <C>
AUTOMOTIVE - 1.0%
General Motors Corp. ..................................... 9,200 $ 619,850
-----------
BANKS - 4.9%
BankBoston Corp. ......................................... 7,650 825,722
Bankers Trust New York Corp. ............................. 11,200 1,446,200
Golden West Financial Corp................................ 6,900 726,656
-----------
2,998,578
-----------
BEVERAGES, FOOD & TOBACCO - 3.9%
Philip Morris Cos., Inc................................... 28,600 1,067,137
Pioneer Hi-Bred International, Inc. ...................... 35,200 1,328,800
-----------
2,395,937
-----------
CAPITAL EQUIPMENT - 4.9%
Cincinnati Milacron, Inc. ................................ 40,200 1,248,712
ITT Industries, Inc. ..................................... 47,200 1,719,850
-----------
2,968,562
-----------
CHEMICALS - 4.2%
Akzo Nobel N.V. ADR....................................... 17,500 1,802,500
Ethyl Corp................................................ 93,900 715,988
-----------
2,518,488
-----------
COMPUTERS - 1.9%
Computer Associates International, Inc. .................. 20,000 1,171,250
-----------
ELECTRONICS - 1.0%
*MEMC Electronic Materials, Inc. ......................... 44,400 624,375
-----------
ENERGY - 8.2%
Mitchell Energy & Development Corp., Class B.............. 38,770 978,942
Occidental Petroleum Corp. ............................... 27,700 815,419
*Stone Energy Corp. ...................................... 45,500 1,743,219
Ultramar Diamond Shamrock Corp. .......................... 20,900 675,331
YPF S.A. ADR.............................................. 21,600 753,300
-----------
4,966,211
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
UAM FUNDS MCKEE DOMESTIC EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
------ -----------
<S> <C> <C>
FINANCIAL SERVICES - 7.6%
Green Tree Financial Corp. ............................... 70,300 $ 2,864,725
Lehman Brothers Holdings, Inc. ........................... 14,200 1,009,087
The PMI Group, Inc. ...................................... 9,200 747,500
-----------
4,621,312
-----------
HEALTH CARE - 2.0%
*Foundation Health Systems, Inc., Class A................. 41,850 1,211,034
-----------
INSURANCE - 1.9%
CIGNA Corp. .............................................. 5,500 1,138,156
-----------
MANUFACTURING - 1.2%
Tecumseh Products Co., Class A............................ 15,000 755,625
-----------
METALS - 3.3%
Aluminum Company of America............................... 25,700 1,991,750
-----------
MINING - 2.4%
Case Corp. ............................................... 22,900 1,455,581
-----------
MULTI-INDUSTRY - 1.4%
Loews Corp. .............................................. 8,300 830,519
-----------
PAPER & PACKAGING - 2.0%
Willamette Industries..................................... 30,900 1,199,306
-----------
PHARMACEUTICALS - 8.4%
American Home Products Corp. ............................. 9,200 856,750
Becton, Dickinson & Co. .................................. 16,500 1,148,813
*Biogen, Inc. ............................................ 34,200 1,509,075
Mylan Laboratories, Inc. ................................. 59,000 1,600,375
-----------
5,115,013
-----------
RETAIL - 7.7%
American Stores Co. ...................................... 68,700 1,648,800
*BJ'S Wholesale Club, Inc. ............................... 30,200 1,209,888
Dillard's Inc., Class A................................... 19,700 721,513
Gap, Inc. ................................................ 21,800 1,121,337
-----------
4,701,538
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
UAM FUNDS MCKEE DOMESTIC EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
------- -----------
<S> <C> <C>
SERVICES - 6.2%
*Accustaff, Inc.......................................... 46,200 $ 1,657,425
Olsten Corp.............................................. 63,400 867,787
Reynolds & Reynolds Co., Class A......................... 54,000 1,242,000
-----------
3,767,212
-----------
TECHNOLOGY - 16.7%
AMP, Inc................................................. 33,900 1,332,694
*Advanced Micro Devices, Inc............................. 63,800 1,770,450
*Policy Management Systems............................... 14,200 1,144,875
*Seagate Technology, Inc................................. 55,200 1,473,150
*Sequent Computer Systems, Inc........................... 115,100 2,258,838
*Sterling Software, Inc.................................. 81,492 2,154,445
-----------
10,134,452
-----------
TELECOMMUNICATIONS - 3.3%
Bell Atlantic Corp....................................... 9,563 894,738
SBC Communications, Inc.................................. 7,120 295,035
Sprint Corp.............................................. 11,500 785,594
-----------
1,975,367
-----------
TEXTILES & APPAREL - 2.2%
*Tommy Hilfiger Corp..................................... 21,500 1,311,500
-----------
UTILITIES - 2.0%
GPU, Inc................................................. 13,100 519,088
Southern New England Telecommunications Corp............. 9,700 679,000
-----------
1,198,088
-----------
TOTAL COMMON STOCKS (Cost $48,544,023)........................... 59,669,704
-----------
TOTAL INVESTMENTS - 98.3% (Cost $48,544,023) (a)................. 59,669,704
-----------
OTHER ASSETS AND LIABILITIES (NET) - 1.7%........................ 1,005,170
-----------
NET ASSETS - 100%................................................ $60,674,874
===========
</TABLE>
+ See Note A to Financial Statements.
* Non-Income Producing Security
ADR American Depositary Receipt
(a) The cost for federal income tax purposes was $48,544,023. At April 30,
1998, net unrealized appreciation for all securities based on tax cost was
$11,125,681. This consisted of aggregate gross unrealized appreciation for
all securities of $12,729,749 and aggregate gross unrealized depreciation
for all securities of $1,604,068.
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
UAM FUNDS MCKEE INTERNATIONAL EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 97.4%
<TABLE>
<CAPTION>
SHARES VALUE+
--------- -----------
<S> <C> <C>
ARGENTINA - 2.5%
YPF S.A. ADR........................................... 100,000 $ 3,487,500
-----------
AUSTRALIA - 1.5%
Westpac Banking Corp................................... 312,000 2,095,270
-----------
CANADA - 4.4%
Alcan Aluminium Ltd.................................... 48,925 1,587,718
Canadian Imperial Bank of Commerce..................... 50,358 1,790,970
Seagram Co., Ltd....................................... 31,830 1,357,973
West Coast Energy, Inc................................. 25,242 595,830
West Coast Energy, Inc. ADR............................ 27,600 648,600
-----------
5,981,091
-----------
CHINA - 1.5%
*Huaneng Power International, Inc. ADR................. 93,000 2,046,000
-----------
DENMARK - 2.1%
Unidanmark A/S, Class A (Registered)................... 33,950 2,855,236
-----------
FINLAND - 4.9%
Nokia Oyj, Class K..................................... 101,000 6,723,180
-----------
FRANCE - 7.7%
Alcatel Alsthom........................................ 22,615 4,194,930
Coflexip............................................... 23,000 3,263,850
Total S.A., Class B.................................... 26,400 3,140,243
-----------
10,599,023
-----------
GERMANY - 3.9%
Bayer AG............................................... 47,650 2,126,046
Bayer AG ADR........................................... 19,900 884,937
Commerzbank AG......................................... 40,000 1,556,051
Commerzbank AG ADR..................................... 20,000 771,246
-----------
5,338,280
-----------
HONG KONG - 5.1%
Cathay Pacific Airways Ltd............................. 1,828,000 1,604,854
Guangshen Railway Co., Ltd. ADR........................ 180,000 1,766,250
Hong Kong Electric Holdings............................ 240,000 737,461
Hong Kong Electric Holdings ADR........................ 244,800 752,148
HSBC Holdings plc...................................... 77,000 2,197,018
-----------
7,057,731
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
UAM FUNDS MCKEE INTERNATIONAL EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
--------- -----------
<S> <C> <C>
IRELAND - 2.8%
*Elan Corp. plc ADR.................................... 62,000 $ 3,851,750
-----------
ISRAEL - 2.3%
Teva Pharmaceutical Industries Ltd. ADR................ 75,000 3,187,500
-----------
ITALY - 2.7%
Montedison S.p.A....................................... 2,645,580 3,341,171
Montedison S.p.A. ADR.................................. 32,634 414,044
-----------
3,755,215
-----------
JAPAN - 12.5%
Amada Co., Ltd......................................... 258,000 1,044,574
Credit Saison Co....................................... 61,400 1,333,570
Hitachi Ltd............................................ 270,000 1,939,080
Hitachi Ltd. ADR....................................... 8,100 585,225
INES Corp.............................................. 171,000 1,255,260
Ito-Yokado Co., Ltd.................................... 24,000 1,244,135
Kao Corp............................................... 61,000 897,873
Mitsui & Co., Ltd...................................... 59,000 366,127
Mitsui & Co., Ltd. ADR................................. 4,900 602,700
Mitsui Marine & Fire Insurance......................... 170,000 873,543
Mitsui Marine & Fire Insurance ADR..................... 10,630 546,262
Nintendo Co., Ltd...................................... 22,800 2,094,687
Nissan Motor Co., Ltd.................................. 344,000 1,111,609
Nissan Motor Co., Ltd. ADR............................. 34,200 228,713
Sanwa Bank Ltd......................................... 154,000 1,363,554
Sanwa Bank Ltd. ADR.................................... 4,000 354,196
Toyota Motor Corp...................................... 51,000 1,331,542
-----------
17,172,650
-----------
KOREA - 3.5%
LG Electronics......................................... 233,556 2,781,678
Pohang Iron & Steel Co., Ltd........................... 13,700 750,422
Pohang Iron & Steel Co., Ltd. ADR...................... 72,000 1,282,500
-----------
4,814,600
-----------
MEXICO - 4.4%
*Grupo Industrial Durango ADR.......................... 220,000 3,162,500
Telefonos de Mexico S.A. ADR, Class L.................. 49,800 2,819,925
-----------
5,982,425
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
UAM FUNDS MCKEE INTERNATIONAL EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
--------- -----------
<S> <C> <C>
NETHERLANDS - 7.8%
Akzo Nobel N.V......................................... 20,000 $ 4,071,726
KLM Royal Dutch Airlines N.V........................... 69,900 2,749,187
Philips Electronics N.V................................ 44,160 3,893,640
-----------
10,714,553
-----------
NORWAY - 0.9%
Den norske Bank ASA.................................... 243,400 1,279,541
-----------
PHILIPPINES - 2.9%
Ionics Circuit, Inc.................................... 3,375,000 1,558,989
Philippine Long Distance Telephone Co.................. 88,400 2,372,784
-----------
3,931,773
-----------
SINGAPORE - 3.0%
Asia Pulp & Paper Co., Ltd. ADR........................ 286,600 4,173,613
-----------
SPAIN - 2.1%
Repsol S.A............................................. 52,230 2,864,314
-----------
SWEDEN - 2.0%
Svenska Handelsbanken, Class A......................... 62,000 2,812,573
-----------
SWITZERLAND - 3.8%
Nestle S.A. (Registered)............................... 2,670 5,180,145
-----------
THAILAND - 1.6%
Advanced Info Service Public Co., Ltd. (Foreign)....... 310,000 2,168,394
-----------
UNITED KINGDOM - 11.5%
BAT Industries plc ADR................................. 201,000 3,906,938
British Steel plc...................................... 751,300 1,997,804
Carlton Communications plc............................. 110,787 992,180
Diageo plc, Class B.................................... 31,452 268,263
Diageo plc............................................. 199,817 2,379,331
*Professional Staff plc ADR............................ 80,000 1,440,000
Rio Tinto plc ADR...................................... 14,600 850,450
RTZ Corp. plc (Registered)............................. 118,280 1,698,220
*Waste Management International plc.................... 504,100 1,902,452
*Waste Management International plc ADR................ 43,900 353,944
-----------
15,789,582
-----------
TOTAL COMMON STOCKS - 97.4% (Cost $106,582,821).................. 133,861,939
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
UAM FUNDS MCKEE INTERNATIONAL EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 1.9%
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
---------- ------------
<S> <C> <C>
REPURCHASE AGREEMENT - 1.9%
Chase Securities, Inc. 5.37%, dated 4/30/98, due
5/1/98, to be repurchased at $2,583,385,
collateralized by $2,252,154 of various U.S.
Treasury Obigations, 5.50%-14.00%, due 5/15/04-
11/15/27, valued at $2,612,354 (Cost $2,583,000)... $2,583,000 $ 2,583,000
------------
TOTAL INVESTMENTS - 99.3% (Cost $109,165,821) (a).............. 136,444,939
------------
OTHER ASSETS AND LIABILITIES (NET) - 0.7%...................... 1,030,739
------------
NET ASSETS - 100%.............................................. $137,475,678
============
</TABLE>
+ See Note A to Financial Statements.
* Non-Income Producing Security
ADR American Depositary Receipt
(a) The cost for federal income tax purposes was $109,165,821. At April 30,
1998, net unrealized appreciation for all securities based on tax cost was
$27,279,118. This consisted of aggregate gross unrealized appreciation for
all securities of $36,405,079 and aggregate gross unrealized depreciation
for all securities of $9,125,961.
The accompanying notes are an integral part of the financial statements.
19
<PAGE>
UAM FUNDS MCKEE INTERNATIONAL EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
SECTOR DIVERSIFICATION (UNAUDITED)
At April 30, 1998 sector diversification of the Portfolio was as follows:
<TABLE>
<CAPTION>
% OF
NET
INDUSTRY ASSETS VALUE
- -------- ------ ------------
<S> <C> <C>
Automotive................................................ 0.2% $ 228,712
Banks..................................................... 6.1 8,372,080
Beverages, Food & Tobacco................................. 4.8 6,554,531
Capital Equipment......................................... 9.3 12,785,742
Chemicals................................................. 7.6 10,423,880
Consumer Durables......................................... 12.0 16,554,461
Electronics............................................... 7.2 9,862,442
Energy.................................................... 9.4 12,871,348
Financial Services........................................ 7.3 10,037,146
Health Care............................................... 5.1 7,039,250
Insurance................................................. 0.6 873,543
Metals.................................................... 1.4 1,953,845
Multi-Industry............................................ 0.3 414,044
Natural Resources......................................... 7.1 9,741,896
Paper & Packaging......................................... 3.0 4,173,612
Repurchase Agreement...................................... 1.9 2,583,000
Services.................................................. 3.3 4,542,095
Technology................................................ 1.1 1,558,989
Telecommunications........................................ 4.4 5,980,499
Transportation............................................ 4.5 6,120,292
Utilities................................................. 2.7 3,773,532
----- ------------
Total Investments........................................ 99.3% $136,444,939
Other Assets and Liabilities (Net)........................ 0.7 1,030,739
----- ------------
Net Assets............................................... 100.0% $137,475,678
===== ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
20
<PAGE>
UAM FUNDS MCKEE SMALL CAP EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 98.9%
<TABLE>
<CAPTION>
SHARES VALUE+
------- -----------
<S> <C> <C>
BANKS - 10.6%
Coastal Bancorp, Inc..................................... 31,500 $ 1,134,000
Commerce Bancorp, Inc.................................... 39,060 2,241,067
MAF Bancorp, Inc......................................... 37,300 1,494,331
Peoples Heritage Financial Group, Inc.................... 38,100 1,838,325
S&T Bancorp, Inc......................................... 14,900 769,213
-----------
7,476,936
-----------
BEVERAGES, FOOD & TOBACCO - 3.9%
*Swisher International Group, Inc., Class A.............. 101,300 1,247,256
Tasty Baking Co.......................................... 71,600 1,476,750
-----------
2,724,006
-----------
CONSTRUCTION - 2.7%
*Toll Brothers, Inc...................................... 67,800 1,889,925
-----------
ELECTRONICS - 1.1%
Pioneer-Standard Electronics, Inc........................ 60,300 749,981
-----------
ENERGY - 4.3%
*Miller Exploration Co................................... 120,000 990,000
*Stone Energy Corp....................................... 54,000 2,068,875
-----------
3,058,875
-----------
HEALTH CARE - 2.7%
*Sierra Health Services, Inc............................. 48,600 1,868,063
-----------
HOME FURNISHINGS & APPLIANCES - 2.4%
La-Z-Boy, Inc............................................ 32,100 1,679,231
-----------
INDUSTRIAL - 5.1%
*Brown & Sharpe Manufacturing Co., Class A............... 167,000 2,285,812
*Dravo Corp.............................................. 129,200 1,324,300
-----------
3,610,112
-----------
INSURANCE - 11.3%
Arthur J. Gallagher & Co................................. 35,800 1,570,725
*Delphi Financial Group, Inc., Class A................... 42,228 2,406,996
LandAmerica Financial Group, Inc......................... 16,500 870,375
Selective Insurance Group, Inc........................... 47,900 1,317,250
The First American Financial Corp........................ 24,850 1,765,903
-----------
7,931,249
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
21
<PAGE>
UAM FUNDS MCKEE SMALL CAP EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
------- -----------
<S> <C> <C>
METALS - 7.6%
*Alltrista Corp.......................................... 45,300 $ 1,223,100
Century Aluminum Co...................................... 103,000 1,725,250
Intermet Corp............................................ 74,500 1,536,563
*Titanium Metals Corp.................................... 31,000 825,375
-----------
5,310,288
-----------
PAPER & PACKAGING - 2.0%
Pope & Talbot, Inc....................................... 89,100 1,386,619
-----------
PHARMACEUTICALS - 5.1%
Alpharma, Inc., Class A.................................. 57,900 1,317,225
Owens & Minor, Inc., Holding Company..................... 128,700 2,292,469
-----------
3,609,694
-----------
RETAIL - 9.8%
Claire's Stores, Inc..................................... 81,400 1,775,537
*Gymboree Corp........................................... 75,900 1,389,919
*Lands' End, Inc......................................... 47,500 1,751,563
*Mortons Restaurant Group, Inc........................... 79,400 1,955,225
-----------
6,872,244
-----------
SERVICES - 11.0%
*Aviall, Inc............................................. 116,400 1,629,600
Bowne & Co., Inc......................................... 42,300 1,747,519
*Integrated Systems Consulting Group, Inc................ 85,600 1,134,200
*Perceptron, Inc......................................... 70,400 1,056,000
*Personnel Group of America, Inc......................... 109,400 2,174,325
-----------
7,741,644
-----------
TECHNOLOGY - 14.9%
*Avid Technology, Inc.................................... 48,000 2,076,000
*Planar Systems, Inc..................................... 144,900 1,775,025
*Structural Dynamics Research Corp....................... 71,500 2,019,875
*Symantec Corp........................................... 59,500 1,725,500
*System Software Associates, Inc......................... 106,700 900,281
*Systems & Computer Technology Corp...................... 35,300 1,994,450
-----------
10,491,131
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
22
<PAGE>
UAM FUNDS MCKEE SMALL CAP EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
-------- -----------
<S> <C> <C>
UTILITIES - 4.4%
CILCORP, Inc........................................... 29,300 $ 1,400,906
Commonwealth Energy System............................. 43,900 1,679,175
-----------
3,080,081
-----------
TOTAL COMMON STOCKS (Cost $63,043,372).......................... 69,480,079
-----------
SHORT-TERM INVESTMENTS - 1.1%
<CAPTION>
FACE
AMOUNT
--------
<S> <C> <C>
REPURCHASE AGREEMENTS - 1.1%
Chase Securities, Inc. 5.37%, dated 4/30/98, due
5/1/98, to be repurchased at $810,121, collateralized
by $706,251 of various U.S. Treasury Obligations,
5.50%-14.00%, due 5/15/04-11/15/27, valued at $819,205
(Cost $810,000)....................................... $810,000 810,000
-----------
TOTAL INVESTMENTS - 100.0% (Cost $63,853,372) (a)............... 70,290,079
-----------
OTHER ASSETS AND LIABILITIES (NET) - (0.0%)..................... (20,038)
-----------
NET ASSETS - 100%............................................... $70,270,041
===========
</TABLE>
+ See Note A to Financial Statements.
* Non-Income Producing Security
(a) The cost for federal income tax purposes was $63,853,372. At April 30,
1998, net unrealized appreciation for all securities based on tax cost was
$6,436,707. This consisted of aggregate gross unrealized appreciation for
all securities of $9,234,163 and aggregate gross unrealized depreciation
for all securities of $2,797,456.
The accompanying notes are an integral part of the financial statements.
23
<PAGE>
UAM FUNDS MCKEE PORTFOLIOS
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
MCKEE MCKEE MCKEE MCKEE
U.S. DOMESTIC INTERNATIONAL SMALL CAP
GOVERNMENT EQUITY EQUITY EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ----------- ------------- -----------
<S> <C> <C> <C> <C>
ASSETS
Investments, at Cost........ $41,325,552 $48,544,023 $109,165,821 $63,853,372
=========== =========== ============ ===========
Investments, at Value....... $42,015,995 $59,669,704 $136,444,939 $70,290,079
Cash........................ 55 -- 883 159
Receivable for Investments
Sold....................... 6,266,817 8,476,445 -- --
Dividends Receivable........ -- 58,488 418,212 36,517
Receivable for Fund Shares
Sold....................... -- 68,831 733,046 9,556
Foreign Withholding Tax
Reclaim Receivable......... -- -- 87,065 --
Interest Receivable......... 524,506 -- 385 121
Other Assets................ 464 834 953 656
----------- ----------- ------------ -----------
Total Assets............... 48,807,837 68,274,302 137,685,483 70,337,088
----------- ----------- ------------ -----------
LIABILITIES
Payable for Investments
Purchased.................. 4,948,326 -- -- --
Payable for Fund Shares
Redeemed................... 8,584,848 7,403,427 -- --
Payable for Investment
Advisory Fees--Note B...... 16,292 36,449 78,025 57,599
Payable for Administrative
Fees--Note C............... 8,954 9,268 15,922 6,677
Payable for Custodian Fees--
Note D..................... 6,029 10,556 102,335 2,108
Payable for Account Services
Fees--Note F............... 8,361 17,934 206 --
Payable for Directors'
Fees--Note G............... 645 703 725 663
Due to Custodian Bank--Note
D.......................... -- 115,618 -- --
Other Liabilities........... 4,983 5,473 12,592 --
----------- ----------- ------------ -----------
Total Liabilities.......... 13,578,438 7,599,428 209,805 67,047
----------- ----------- ------------ -----------
NET ASSETS.................. $35,229,399 $60,674,874 $137,475,678 $70,270,041
=========== =========== ============ ===========
NET ASSETS CONSIST OF:
Paid in Capital............. $33,350,904 $32,584,885 $106,877,253 $63,740,891
Undistributed Net Investment
Income (Loss).............. 331,981 36,349 535,292 (69,760)
Accumulated Net Realized
Gain....................... 856,071 16,927,959 2,790,734 162,203
Unrealized Appreciation..... 690,443 11,125,681 27,272,399 6,436,707
----------- ----------- ------------ -----------
NET ASSETS.................. $35,229,399 $60,674,874 $137,475,678 $70,270,041
=========== =========== ============ ===========
Institutional Class Shares
Shares Issued and
Outstanding ($0.001 par
value) (Authorized
25,000,000)................ 3,273,378 3,306,880 10,730,844 6,386,479
NET ASSET VALUE, Offering
and Redemption Price Per
Share...................... $ 10.76 $ 18.35 $ 12.81 $ 11.00
=========== =========== ============ ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
24
<PAGE>
UAM FUNDS MCKEE PORTFOLIOS
FOR THE SIX MONTHS ENDED
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
MCKEE MCKEE MCKEE MCKEE
U.S. DOMESTIC INTERNATIONAL SMALL CAP
GOVERNMENT EQUITY EQUITY EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO*
----------- ----------- ------------- ----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends.................. $ -- $ 533,482 $ 1,153,276 $ 263,662
Interest................... 1,576,834 39,723 116,597 84,446
Less: Foreign Taxes
Withheld.................. -- -- (93,469) --
----------- ----------- ----------- ----------
TOTAL INCOME.............. 1,576,834 573,205 1,176,404 348,108
----------- ----------- ----------- ----------
EXPENSES
Investment Advisory Fees--
Note B.................... 107,254 249,786 406,155 307,548
Administrative Fees--Note
C......................... 51,778 59,728 90,146 40,485
Custodian Fees--Note D..... 3,303 8,164 41,436 2,976
Account Services Fees--Note
F......................... 27,021 43,381 1,273 61
Directors' Fees--Note G.... 1,506 1,758 1,817 1,474
Registration and Filing
Fees...................... 5,586 5,744 6,881 16,291
Other Expenses............. 16,683 20,683 21,980 19,428
----------- ----------- ----------- ----------
Net Expenses Before
Expense Offset........... 213,131 389,244 569,688 388,263
Expense Offset--Note A..... (162) (1,303) (2,839) (868)
----------- ----------- ----------- ----------
Net Expenses After Expense
Offset................... 212,969 387,941 566,849 387,395
----------- ----------- ----------- ----------
NET INVESTMENT INCOME
(LOSS).................... 1,363,865 185,264 609,555 (39,287)
----------- ----------- ----------- ----------
NET REALIZED GAIN (LOSS)
ON:
Investments............... 1,073,792 16,961,453 2,821,806 162,203
Foreign Exchange
Transactions............. -- -- (27,827) --
----------- ----------- ----------- ----------
TOTAL NET REALIZED GAIN ON
INVESTMENTS AND FOREIGN
EXCHANGE TRANSACTIONS..... 1,073,792 16,961,453 2,793,979 162,203
----------- ----------- ----------- ----------
NET CHANGE IN UNREALIZED
APPRECIATION/DEPRECIATION
ON:
Investments............... (1,124,527) (6,129,776) 14,056,845 6,436,707
Foreign Exchange
Translations............. -- -- 9,289 --
----------- ----------- ----------- ----------
TOTAL NET CHANGE IN
UNREALIZED
APPRECIATION/DEPRECIATION.. (1,124,527) (6,129,776) 14,066,134 6,436,707
----------- ----------- ----------- ----------
NET GAIN (LOSS) ON
INVESTMENTS AND FOREIGN
EXCHANGE TRANSACTIONS..... (50,735) 10,831,677 16,860,113 6,598,910
----------- ----------- ----------- ----------
NET INCREASE IN NET ASSETS
RESULTING FROM
OPERATIONS................ $ 1,313,130 $11,016,941 $17,469,668 $6,559,623
=========== =========== =========== ==========
</TABLE>
* The Portfolio commenced operations on November 4, 1997.
The accompanying notes are an integral part of the financial statements.
25
<PAGE>
UAM FUNDS MCKEE U.S. GOVERNMENT PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997
-------------- ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income........................... $ 1,363,865 $ 2,268,537
Net Realized Gain............................... 1,073,792 235,130
Net Change in Unrealized
Appreciation/Depreciation...................... (1,124,527) 1,536,088
------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS..................................... 1,313,130 4,039,755
------------ ------------
DISTRIBUTIONS:
Net Investment Income........................... (1,408,951) (2,031,045)
Net Realized Gain............................... (328,406) --
------------ ------------
TOTAL DISTRIBUTIONS............................. (1,737,357) (2,031,045)
------------ ------------
CAPITAL SHARE TRANSACTIONS: (1)
Issued.......................................... 5,412,575 46,890,798
In Lieu of Cash Distributions................... 1,734,420 2,025,173
Redeemed........................................ (29,020,537) (16,515,553)
------------ ------------
NET INCREASE (DECREASE) FROM CAPITAL SHARE
TRANSACTIONS................................... (21,873,542) 32,400,418
------------ ------------
TOTAL INCREASE (DECREASE)....................... (22,297,769) 34,409,128
NET ASSETS:
Beginning of Period............................. 57,527,168 23,118,040
------------ ------------
End of Period (including undistributed net
investment income of $331,981 and $377,067,
respectively................................... $ 35,229,399 $ 57,527,168
============ ============
(1) SHARES ISSUED AND REDEEMED:
Shares Issued................................... 499,928 4,485,792
In Lieu of Cash Distributions................... 161,932 191,612
Shares Redeemed................................. (2,694,958) (1,556,148)
------------ ------------
(2,033,098) 3,121,256
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
26
<PAGE>
UAM FUNDS MCKEE DOMESTIC EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997
-------------- ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income........................... $ 185,264 $ 580,671
Net Realized Gain............................... 16,961,453 7,558,630
Net Change in Unrealized
Appreciation/Depreciation...................... (6,129,776) 14,272,224
------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS..................................... 11,016,941 22,411,525
------------ ------------
DISTRIBUTIONS:
Net Investment Income........................... (214,413) (580,774)
Net Realized Gain............................... (7,577,519) (2,289,510)
------------ ------------
TOTAL DISTRIBUTIONS............................. (7,791,932) (2,870,284)
------------ ------------
CAPITAL SHARE TRANSACTIONS: (1)
Issued.......................................... 10,336,844 42,565,470
In Lieu of Cash Distributions................... 7,791,932 2,870,017
Redeemed........................................ (68,067,413) (19,758,239)
------------ ------------
NET INCREASE (DECREASE) FROM CAPITAL SHARE
TRANSACTIONS................................... (49,938,637) 25,677,248
------------ ------------
TOTAL INCREASE (DECREASE)....................... (46,713,628) 45,218,489
NET ASSETS:
Beginning of Period............................. 107,388,502 62,170,013
------------ ------------
End of Period (including undistributed net
investment income of $36,349 and $65,498,
respectively).................................. $ 60,674,874 $107,388,502
============ ============
(1) SHARES ISSUED AND REDEEMED:
Shares Issued................................... 632,656 2,738,317
In Lieu of Cash Distributions................... 500,413 207,257
Shares Redeemed................................. (4,196,006) (1,223,564)
------------ ------------
(3,062,937) 1,722,010
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
27
<PAGE>
UAM FUNDS MCKEE INTERNATIONAL EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997
-------------- ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income........................... $ 609,555 $ 998,276
Net Realized Gain............................... 2,793,979 9,912,396
Net Change in Unrealized
Appreciation/Depreciation...................... 14,066,134 8,498,768
------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS..................................... 17,469,668 19,409,440
------------ ------------
DISTRIBUTIONS:
Net Investment Income........................... (85,099) (961,510)
Net Realized Gain............................... (9,931,009) (1,154,956)
------------ ------------
TOTAL DISTRIBUTIONS............................. (10,016,108) (2,116,466)
------------ ------------
CAPITAL SHARE TRANSACTIONS: (1)
Issued.......................................... 77,084,177 56,400,614
In Lieu of Cash Distributions................... 9,122,749 1,966,598
Redeemed........................................ (59,234,581) (63,834,286)
------------ ------------
NET INCREASE (DECREASE) FROM CAPITAL SHARE
TRANSACTIONS................................... 26,972,345 (5,467,074)
------------ ------------
TOTAL INCREASE.................................. 34,425,905 11,825,900
NET ASSETS:
Beginning of Period............................. 103,049,773 91,223,873
------------ ------------
End of Period (including undistributed net
investment income of $535,292 and $10,836,
respectively).................................. $137,475,678 $103,049,773
============ ============
(1) SHARES ISSUED AND REDEEMED:
Shares Issued................................... 6,532,930 4,401,990
In Lieu of Cash Distributions................... 850,210 170,717
Shares Redeemed................................. (4,949,887) (4,919,903)
------------ ------------
2,433,253 (347,196)
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
28
<PAGE>
UAM FUNDS MCKEE SMALL CAP EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
NOVEMBER 4,
1997* TO
APRIL 30,
1998
(UNAUDITED)
-----------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Loss............................................ ($39,287)
Net Realized Gain.............................................. 162,203
Net Change in Unrealized Appreciation/Depreciation............. 6,436,707
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........... 6,559,623
-----------
DISTRIBUTIONS:
Net Investment Income.......................................... (30,473)
-----------
CAPITAL SHARE TRANSACTIONS: (1)
Issued......................................................... 63,714,383
In Lieu of Cash Distributions.................................. 29,824
Redeemed....................................................... (3,316)
-----------
NET INCREASE FROM CAPITAL SHARE TRANSACTIONS................... 63,740,891
-----------
TOTAL INCREASE................................................. 70,270,041
NET ASSETS:
Beginning of Period............................................ --
-----------
End of Period (including undistributed net investment loss of
$69,760)...................................................... $70,270,041
===========
(1) SHARES ISSUED AND REDEEMED:
Shares Issued.................................................. 6,383,689
In Lieu of Cash Distributions.................................. 3,094
Shares Redeemed................................................ (304)
-----------
6,386,479
===========
</TABLE>
* Commencement of Operations
The accompanying notes are an integral part of the financial statements.
29
<PAGE>
UAM FUNDS MCKEE U.S. GOVERNMENT PORTFOLIO
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS YEARS ENDED MARCH 2,
ENDED OCTOBER 31, 1995** TO
APRIL 30, 1998 ---------------- OCTOBER 31,
(UNAUDITED) 1997 1996 1995
-------------- ------- ------- -----------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period.................. $ 10.84 $ 10.58 $ 10.76 $10.00
------- ------- ------- ------
Income From Investment
Operations:
Net Investment Income...... 0.33 0.54 0.46 0.28
Net Realized and Unrealized
Gain (Loss)............... (0.04) 0.25 (0.07)++ 0.71
------- ------- ------- ------
Total From Investment
Operations................ 0.29 0.79 0.39 0.99
------- ------- ------- ------
Distributions:
Net Investment Income...... (0.30) (0.53) (0.44) (0.23)
Net Realized Gain.......... (0.07) -- -- --
In Excess of Net Realized
Gain...................... -- -- (0.13) --
------- ------- ------- ------
Total Distributions........ (0.37) (0.53) (0.57) (0.23)
------- ------- ------- ------
Net Asset Value, End of
Period..................... $ 10.76 $ 10.84 $ 10.58 $10.76
======= ======= ======= ======
TOTAL RETURN................ 2.67%*** 7.73% 3.77%+ 9.96%+***
======= ======= ======= ======
RATIO AND SUPPLEMENTAL DATA
Net Assets, End of Period
(Thousands)................ $35,229 $57,527 $23,118 $6,069
Ratio of Expenses to Average
Net Assets................. 0.89%* 0.94% 1.13% 0.89%*
Ratio of Net Investment
Income to Average Net
Assets..................... 5.72%* 5.67% 5.39% 5.39%*
Portfolio Turnover Rate..... 79% 124% 83% 104%
Ratio of Voluntarily Waived
Fees and Expenses Assumed
by the Adviser to Average
Net Assets................. N/A N/A 0.12% 1.93%*
Ratio of Expenses to Average
Net Assets Including
Expense Offsets............ 0.89%* 0.94% 1.13% 0.85%*
</TABLE>
* Annualized
** Commencement of Operations
*** Not Annualized
+ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser during the period indicated.
++ The amount shown for the year ended October 31, 1996 for a share
outstanding throughout the period does not accord with the aggregate net
gains on investments for that period because of the sales and repurchases
of Portfolio shares in relation to fluctuating market value of the
investments of the Portfolio.
The accompanying notes are an integral part of the financial statements.
30
<PAGE>
UAM FUNDS MCKEE DOMESTIC EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS YEARS ENDED MARCH 2,
ENDED OCTOBER 31, 1995** TO
APRIL 30, 1998 ----------------- OCTOBER 31,
(UNAUDITED) 1997 1996 1995
-------------- -------- ------- -----------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period.................. $ 16.86 $ 13.38 $ 11.44 $10.00
------- -------- ------- ------
Income From Investment
Operations:
Net Investment Income...... 0.04 0.10 0.10 0.08
Net Realized and Unrealized
Gain...................... 2.78 3.92 2.08 1.43
------- -------- ------- ------
Total From Investment
Operations................ 2.82 4.02 2.18 1.51
------- -------- ------- ------
Distributions:
Net Investment Income...... (0.04) (0.10) (0.09) (0.07)
Net Realized Gain.......... (1.29) (0.44) (0.15) --
------- -------- ------- ------
Total Distributions........ (1.33) (0.54) (0.24) (0.07)
------- -------- ------- ------
Net Asset Value, End of
Period..................... $ 18.35 $ 16.86 $ 13.38 $11.44
======= ======== ======= ======
TOTAL RETURN................ 18.10%*** 30.96% 19.31%+ 15.13%+***
======= ======== ======= ======
RATIO AND SUPPLEMENTAL DATA
Net Assets, End of Period
(Thousands)................ $60,675 $107,389 $62,170 $6,427
Ratio of Expenses to Average
Net Assets................. 1.01%* 0.94% 0.99% 1.08%*
Ratio of Net Investment
Income to Average Net
Assets..................... 0.48%* 0.64% 0.93% 1.12%*
Portfolio Turnover Rate..... 33% 47% 42% 27%
Average Commission Rate #... $0.0469 $ 0.0497 $0.0482 N/A
Ratio of Voluntarily Waived
Fees and Expenses Assumed
by the Adviser to Average
Net Assets................. N/A N/A 0.04% 1.65%*
Ratio of Expenses to Average
Net Assets Including
Expense Offsets............ 1.01%* 0.94% 0.99% 1.00%*
</TABLE>
* Annualized
** Commencement of Operations
*** Not Annualized
+ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser during the period indicated.
# For fiscal years beginning on or after September 1, 1995, a portfolio is
required to disclose the average commission rate per share it paid for
portfolio trades on which commissions were charged.
The accompanying notes are an integral part of the financial statements.
31
<PAGE>
UAM FUNDS MCKEE INTERNATIONAL EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS YEARS ENDED MAY 26,
ENDED OCTOBER 31, 1994** TO
APRIL 30, 1998 -------------------------- OCTOBER 31,
(UNAUDITED) 1997 1996 1995 1994
-------------- -------- ------- ------- -----------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 12.42 $ 10.55 $ 10.03 $ 10.40 $ 10.00
-------- -------- ------- ------- -------
Income From Investment
Operations:
Net Investment Income.. 0.06 0.11 0.09 0.11 0.04
Net Realized and
Unrealized Gain
(Loss)................ 1.51 2.01 0.73 (0.39) 0.39
-------- -------- ------- ------- -------
Total From Investment
Operations............ 1.57 2.12 0.82 (0.28) 0.43
-------- -------- ------- ------- -------
Distributions:
Net Investment Income.. (0.01) (0.11) (0.09) (0.09) (0.03)
Net Realized Gain...... (1.17) (0.14) (0.21) -- --
-------- -------- ------- ------- -------
Total Distributions.... (1.18) (0.25) (0.30) (0.09) (0.03)
-------- -------- ------- ------- -------
Net Asset Value, End of
Period................. $ 12.81 $ 12.42 $ 10.55 $ 10.03 $ 10.40
======== ======== ======= ======= =======
TOTAL RETURN............ 14.45%*** 20.31% 8.29% (2.69)% 4.31%***
======== ======== ======= ======= =======
RATIO AND SUPPLEMENTAL
DATA
Net Assets, End of
Period (Thousands)..... $137,476 $103,050 $91,224 $74,893 $37,257
Ratio of Expenses to
Average Net Assets..... 0.98%* 0.98% 1.01% 0.97% 1.12%*
Ratio of Net Investment
Income to Average Net
Assets................. 1.05%* 0.95% 0.92% 1.16% 0.97%*
Portfolio Turnover
Rate................... 4% 29% 9% 7% 11%
Average Commission Rate
#...................... $ 0.0121 $ 0.0428 $0.0560 N/A N/A
Ratio of Expenses to
Average Net Assets
Including Expense
Offsets................ 0.98%* 0.98% 1.01% 0.96% N/A
</TABLE>
* Annualized
** Commencement of Operations
*** Not Annualized
# For fiscal years beginning on or after September 1, 1995, a portfolio is
required to disclose the average commission rate per share it paid for
portfolio trades on which commissions were charged.
The accompanying notes are an integral part of the financial statements.
32
<PAGE>
UAM FUNDS MCKEE SMALL CAP EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
NOVEMBER 4,
1997** TO
APRIL 30,
1998
(UNAUDITED)
-----------
<S> <C>
Net Asset Value, Beginning of Period............................ $ 10.00
-------
Income From Investment Operations:
Net Investment Loss............................................ (0.01)
Net Realized and Unrealized Gain............................... 1.02
-------
Total From Investment Operations............................... 1.01
-------
Distributions:
Net Investment Income.......................................... (0.01)
-------
Net Asset Value, End of Period.................................. $ 11.00
=======
TOTAL RETURN.................................................... 10.06%***
=======
RATIO AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands)........................... $70,270
Ratio of Expenses to Average Net Assets......................... 1.26%*
Ratio of Net Investment Income to Average Net Assets............ (0.13)%*
Portfolio Turnover Rate......................................... 1%
Average Commission Rate......................................... $0.0457
Ratio of Expenses to Average Net Assets Including Expense
Offsets........................................................ 1.26%*
</TABLE>
* Annualized
** Commencement of Operations
*** Not Annualized
The accompanying notes are an integral part of the financial statements.
33
<PAGE>
UAM FUNDS MCKEE PORTFOLIOS
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
UAM Funds, Inc. and UAM Funds Trust (collectively the "UAM Funds") are reg-
istered under the Investment Company Act of 1940, as amended. The McKee U.S.
Government Portfolio, McKee Domestic Equity Portfolio, McKee International Eq-
uity Portfolio and McKee Small Cap Equity Portfolio (the "Portfolios"), port-
folios of UAM Funds, Inc., are diversified and non-diversified, open-end man-
agement investment companies. At April 30, 1998, the UAM Funds were comprised
of forty-four active portfolios. The financial statements of the remaining
portfolios are presented separately. The objectives of the McKee Portfolios is
as follows:
MCKEE U.S. GOVERNMENT PORTFOLIO seeks to achieve a high level of current
income consistent with preservation of capital by investing primarily in
U.S. Treasury and Government agency securities.
MCKEE DOMESTIC EQUITY PORTFOLIO seeks to achieve a superior long-term
total return over a market cycle by investing primarily in equity securi-
ties of U.S. issuers.
MCKEE INTERNATIONAL EQUITY PORTFOLIO seeks to achieve a superior long-
term total return over a market cycle by investing primarily in the equity
securities of non-U.S. issuers.
MCKEE SMALL CAP EQUITY PORTFOLIO seeks to achieve a superior long-term
total return by investing primarily in the equity securities of small com-
panies.
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: Equity securities listed on a United States secu-
rities exchange for which market quotations are readily available are val-
ued at the last quoted sales price as of the close of the exchange on the
day the valuation is made or, if no sale has occurred on such day, at the
bid price on such day. Securities listed on a foreign exchange are valued
at their closing price. Price information on listed securities is taken
from the exchange where the security is primarily traded. Over-the-counter
and unlisted equity securities are valued at the current bid prices. Fixed
income securities are stated on the
34
<PAGE>
UAM FUNDS MCKEE PORTFOLIOS
- -------------------------------------------------------------------------------
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 the
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 Directors.
2. INCOME TAXES: It is each Portfolio's intention to qualify as a regu-
lated investment company under Subchapter M of the Internal Revenue Code
and to distribute all of their taxable income. Accordingly, no provision
for Federal income taxes is required in the financial statements.
The McKee International Equity Portfolio may be subject to taxes imposed
by countries in which it invests. Such taxes are generally based on either
income earned or gains realized or repatriated. The Portfolio accrues such
taxes when the related income is earned or gains are realized.
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, each
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 UAM Funds may transfer their daily uninvested cash bal-
ances into a joint trading account which invests in one or more repurchase
agreement. 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 McKee In-
ternational Equity Portfolio are maintained in U.S. dollars. Investment
securities and other assets and liabilities denominated in a foreign cur-
rency are translated into U.S. dollars on the date of valuation. The McKee
International Equity Portfolio does not isolate that portion of realized
or
35
<PAGE>
UAM FUNDS MCKEE PORTFOLIOS
- -------------------------------------------------------------------------------
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 transac-
tions represent net foreign exchange gains or losses from forward foreign
currency exchange contracts, disposition of foreign currencies, currency
gains or losses realized between trade and settlement dates on securities
transactions and the difference between the amount of the investment in-
come and foreign withholding taxes recorded on the McKee International Eq-
uity Portfolio's books and the U.S. dollar equivalent amounts actually re-
ceived or paid.
5. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS: The McKee International
Equity Portfolio may enter into forward foreign currency exchange con-
tracts to protect the value of securities held and related receivables and
payables against changes in future foreign exchange rates. A forward cur-
rency contract is an agreement between two parties to buy and sell cur-
rency at a set price on a future date. The market value of the contract
will fluctuate with changes in currency exchange rates. The contract is
marked-to-market daily using the current forward rate and the change in
market value is recorded by the McKee International Equity Portfolio as
unrealized gain or loss. The McKee International Equity Portfolio recog-
nizes realized gain or loss when the contract is closed, equal to the dif-
ference between the value of the contract at the time it was opened and
the value at the time it was closed. Risks may arise upon entering into
these contracts from the potential inability of counterparties to meet the
terms of their contracts and are generally limited to the amount of
unrealized gain on the contracts, if any, at the date of default. Risks
may also arise from the unanticipated movements in the value of a foreign
currency relative to the U.S. dollar.
6. 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. These dif-
ferences are primarily due to differing book and tax treatments in the
timing of the recognition of gains or losses on investments and foreign
currency transactions.
36
<PAGE>
UAM FUNDS MCKEE PORTFOLIOS
- -------------------------------------------------------------------------------
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.
Permanent book-tax differences, if any, are not included in ending un-
distributed net investment income (loss) for the purpose of calculating
net investment income (loss) per share in the financial highlights.
7. OTHER: Security transactions are accounted for on trade date, the
date the trade was executed. Costs used in determining realized gains and
losses on the sale of investment securities are based on the specific
identification method. Dividend income is recorded on the ex-dividend
date, except that certain dividends from foreign securities are recorded
as soon as the McKee International Equity Portfolio is informed of the ex-
dividend date. Interest income is recognized on the accrual basis. Dis-
counts and premiums on securities purchased are amortized using the effec-
tive 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. Custodian fees for the Port-
folios have been increased to include expense offsets, if any, for custo-
dian balance credits.
B. ADVISORY SERVICES: Under the terms of an investment advisory agreement,
C.S. McKee & Co., Inc. (the "Adviser"), a wholly-owned subsidiary of United
Asset Management Corporation ("UAM"), provides investment advisory services to
each Portfolio for a monthly fee calculated at an annual rate of 0.45%, 0.65%,
0.70% and 1.00% of average daily net assets for the month for the McKee U.S.
Government, McKee Domestic Equity, McKee International Equity and McKee Small
Cap Equity Portfolios, 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 un-
der a Fund Administration Agreement (the "Agreement"). Pursuant to the Agree-
ment, the Administrator is entitled to receive annual fees, 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 al-
located among the portfolios of the UAM Funds 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
37
<PAGE>
UAM FUNDS MCKEE PORTFOLIOS
- -------------------------------------------------------------------------------
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 at an annual rate of 0.04%, 0.04%, 0.06% and 0.04% of aver-
age daily net assets for the McKee U.S. Government, McKee Domestic Equity, Mc-
Kee International Equity and McKee Small Cap Equity Portfolios, respectively.
The Administrator has entered into a Mutual Funds Service Agreement with Chase
Global Funds Services Company ("CGFSC"), a corporate affiliate of The Chase
Manhattan Bank, under which CGFSC agrees to provide certain services, includ-
ing 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 six months ended April 30,
1998, UAM Fund Services, Inc. earned the following amounts from the Portfolios
as Administrator and paid the following portion to CGFSC for its services as
sub-Administrator:
<TABLE>
<CAPTION>
ADMINISTRATION PORTION PAID
MCKEE PORTFOLIOS FEES TO CGFSC
- ---------------- -------------- ------------
<S> <C> <C>
U.S. Government..................................... $51,778 $42,244
Domestic Equity..................................... 59,728 44,357
International Equity................................ 90,146 55,333
Small Cap Equity.................................... 40,485 28,183
</TABLE>
D. CUSTODIAN: The Chase Manhattan Bank is custodian for the Portfolios' as-
sets held in accordance with the custodian agreement. As part of the custodian
agreement, the custodian bank has a lien on the securities of the Portfolios
to cover any advances made by the custodian to the Portfolios. At April 30,
1998, the payable to custodian bank represents the amount due for cash ad-
vances for shareholder redemptions on the Domestic Equity Portfolio.
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. ACCOUNT SERVICES: The UAM Funds entered into an Account Services Agree-
ment (the "Services Agreement") with UAM Retirement Plan Services, Inc. (the
"Service Provider"), a wholly-owned subsidiary of UAM. Under the Services
Agreement, the Service Provider agrees to perform certain services for partic-
ipants in a self-directed, defined contribution plan, and for whom the Service
Provider provides participant recordkeeping. Pursuant to the Services Agree-
ment, the Service Provider is entitled to receive, after the end of each
month, a fee at the annual rate of 0.15% of the average aggregate daily net
asset value of shares of the UAM Funds in the accounts for which they provide
services.
38
<PAGE>
UAM FUNDS MCKEE PORTFOLIOS
- -------------------------------------------------------------------------------
G. DIRECTORS' FEES: Each Director, who is not an officer or affiliated per-
son, receives $2,000 per meeting attended, 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 and reimbursement of expenses in-
curred in attending Board meetings.
H. PURCHASES AND SALES: For the six months ended April 30, 1998, purchases
and sales of investment securities other than long-term U.S. Government and
short-term securities were:
<TABLE>
<CAPTION>
MCKEE PORTFOLIOS PURCHASES SALES
- ---------------- ----------- -----------
<S> <C> <C>
U.S. Government......................................... $ 4,220,044 $12,231,079
Domestic Equity......................................... 24,522,234 81,260,712
International Equity.................................... 24,613,023 4,812,132
Small Cap Equity........................................ 63,556,271 675,102
</TABLE>
Purchases and sales of long-term U.S. Government securities were $32,045,195
and $37,616,211 respectively, for the McKee U.S. Government Portfolio. There
were no purchase or sales of long-term U.S. Government securities for the Mc-
Kee Domestic Equity, McKee International Equity and the McKee Small Cap Equity
Portfolios.
I. LINE OF CREDIT: The Portfolios, except the Small Cap Equity Portfolio,
along with certain other Portfolios of UAM Funds, collectively entered into an
agreement which enables them to participate in a $100 million unsecured line
of credit with several banks. Borrowings will be made solely to temporarily
finance the repurchase of Capital shares. Interest is charged to each partici-
pating Portfolio based on its borrowings at a rate per annum equal to the Fed-
eral Funds rate plus 0.50%. In addition, a commitment fee of 0.08% 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 six months ended April 30, 1998, the Portfolios had no borrowings
under the agreement.
J. OTHER: At April 30, 1998, the percentage of total shares outstanding were
held by record shareholders owning 10% or greater of the aggregate total
shares outstanding for each portfolio was as follows:
<TABLE>
<CAPTION>
NO. OF %
MCKEE PORTFOLIOS SHAREHOLDERS OWNERSHIP
- ---------------- ------------ ---------
<S> <C> <C>
U.S. Government.......................................... 2 61%
Domestic Equity.......................................... 3 48%
International Equity..................................... 3 43%
Small Cap Equity......................................... 3 45%
</TABLE>
39
<PAGE>
UAM FUNDS MCKEE PORTFOLIOS
- -------------------------------------------------------------------------------
At April 30, 1998, the net assets of the McKee International Equity Portfo-
lio was substantially composed of foreign denominated securities and/or cur-
rency. Changes in currency exchange rates will affect the value of and invest-
ment income from such securities 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.
40
<PAGE>
UAM FUNDS MCKEE PORTFOLIOS
- --------------------------------------------------------------------------------
OFFICERS AND DIRECTORS
Norton H. Reamer William H. Park
Director, President and Chairman Vice President
John T. Bennett, Jr. Michael E. DeFao
Director Secretary
Nancy J. Dunn Karl O. Hartmann
Director Assistant Secretary
Philip D. English Gary L. French
Director Treasurer
William A. Humenuk Robert R. Flaherty
Director Assistant Treasurer
Charles H. Salisbury, Jr. Gordon M. Shone
Director and Executive Vice President Assistant Treasurer
Peter M. Whitman, Jr.
Director
- --------------------------------------------------------------------------------
INVESTMENT ADVISER
C.S. McKee & Co., Inc.
One Gateway Center
Pittsburg, PA 15222
ADMINISTRATOR
UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110
CUSTODIAN
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, NY 11245
LEGAL COUNSEL
Drinker, Biddle & Reath LLP
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, PA 19107-3496
INDEPENDENT ACCOUNTANTS --------------------------------------
Price Waterhouse LLP This report has been prepared for
160 Federal Street shareholders and may be distributed
Boston, MA 02110 to others only if preceded or
accompanied by a current prospectus.
DISTRIBUTOR --------------------------------------
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
<PAGE>
UAM Funds
Annual Report
------------------------------
Chicago Asset Management
Company Portfolios
------------------------------
April 30, 1998
UAM
<PAGE>
UAM FUNDS CHICAGO ASSET MANAGEMENT COMPANY
- -------------------------------------------------------------------------------
Dear Shareholders:
April 30th is the fiscal year-end for the Chicago Asset Management Company
Portfolios. The Value/Contrarian Portfolio is the investment vehicle for cli-
ents interested in equity exposure and the Intermediate Bond Portfolio is for
our fixed income clients. In this letter we will review the Portfolio returns
and the investment environment for the fiscal year. We thank you for your con-
tinued commitment to the firm's conservative investment style.
CHICAGO ASSET MANAGEMENT VALUE/CONTRARIAN PORTFOLIO
This Portfolio has consistently maintained the value/contrarian approach. In-
vestments are selected after they have underperformed the general market and
with the intent that they have the clear potential to outperform in the fu-
ture. To do this we review a wide range of larger capitalization issues,
searching for the ones which have underperformed for reasons that we find both
identifiable and which we believe are temporary. The valuation of these issues
generally is lower than that of the market as a whole based on traditional
measures of price/earnings ratio, price to book, and higher in terms of divi-
dend yield. The strategy suggests that the potential outperformance would be
derived from the recovery from temporary difficulties in addition to the nor-
mal ongoing operating earnings of the company.
For the year ended April 30, 1998 the market environment was quite optimistic
for equity investing in general. It was a continuation of an optimistic equity
investment environment of the past few years. The market not only continued to
advance strongly, but actually accelerated. The Standard & Poor's 500 Index
continued to dominate market returns with its heavy reliance on large capital-
ization weighted issues. The popularity and momentum of a minority of the
largest issues within the Index contributed significantly to the relatively
high overall return of the Standard & Poor's 500 Index during this recent
year.
In this investment environment the Portfolio performance was less than that of
the popular Standard & Poor's 500 Index. For the year ended April 30, 1998 the
Portfolio produced a total return net of expenses of 31.71% in comparison to
the Standard & Poor's 500 Index return of 41.06%. Measured on a trailing six
month basis, the Portfolio returned 15.86% and the Index 22.49%. Measured on a
trailing three months basis, the Portfolio produced 12.52% in comparison to
the Index return of 13.85%.
When viewing the investment performance for this year, it is not so much that
the Portfolio had a low return--indeed, historically the absolute rates of re-
turn would be considered high--the issue seems to be the fact that the Index
return is higher. In looking at the individual securities which produced these
returns, it is quite
1
<PAGE>
UAM FUNDS CHICAGO ASSET MANAGEMENT COMPANY
- -------------------------------------------------------------------------------
apparent that the Index return, which was driven by the high capitalization
issues, is higher not because the earnings growth was greater, but because the
price /earnings ratio expanded. In other words, the price of the securities
rose more than
the operating results of the companies they represent. This kind of situation,
we believe, is temporary. We find comfort in maintaining our identical invest-
ment style so as not to join in the investor enthusiasm which has produced
these expanding security prices even when operating characteristics do not
seem to justify such a result.
We believe that various individual investment styles will inevitably cycle in
and out of favor and will go through periods of producing performance greater
than the market index, followed by periods of performance less than the market
index. We believe the inevitability of these cycles suggests that it is of
greatest importance to maintain strict adherence to discipline and style dur-
ing times of underperformance in order to be positioned properly to achieve
the potential for outperformance as the cycle turns.
Therefore, we continue to follow carefully our original principles of
value/contrarian investing. Not only do we select securities which appear to
be out of favor temporarily, but we actively maintain our ongoing rebalancing.
Through rebalancing we add to holdings which have underperformed and thereby
in our opinion become more attractive, while selling portions of holdings
which have outperformed and are approaching fair valuation based on our esti-
mates. Since most any kind of equity investing should be viewed from a long
term point of view, we believe this consistency of style will enhance the po-
tential for achieving superior long term investment returns.
CHICAGO ASSET MANAGEMENT INTERMEDIATE BOND PORTFOLIO
The fiscal year ended April 30, 1998 was a favorable period for fixed income
investors. Interest rates on intermediate maturity securities varied widely
during the year. This is true even though the Federal Reserve's Federal Open
Market Committee maintained an unchanged policy. Fed Funds were targeted at 5
1/2% for the full year.
Despite the Federal Reserve's policy of maintaining overnight interest rates
at 5 1/2%, it was possible for intermediate term rates to decline for the full
period. The yield on two-year Treasury notes declined approximately 70 basis
points to 5.56%. Longer intermediate rates as represented by ten-year Treasury
securities dropped by over 100 basis points to 5.67%. This relatively flat
yield curve reflects the fact that inflation, while an on again, off again
concern of the market, did not materialize. Prices on outstanding securities
rose due to the decline in interest rates. This
2
<PAGE>
UAM FUNDS CHICAGO ASSET MANAGEMENT COMPANY
- -------------------------------------------------------------------------------
price appreciation coupled with the income generated by the Portfolio's in-
vestments produced returns higher than the yield on the Portfolio.
The major investment themes for the bond market were a continuation of recent
years. The U.S. economy continued to expand at a higher than anticipated pace.
Corporate profits were greater than expected. Therefore, corporate bonds were
a very attractive investment. A strong economy coupled with capital gains tax
receipts due to an exceptional stock market produced much higher than antici-
pated revenues for the Federal and State governments. For the first time in
thirty years the Federal budget will show a surplus and Treasury's debt issu-
ance will subside. The dollar remained strong, and after the Asia financial
crisis, dollar-denominated assets became even more highly prized. Overall,
this has been a favorable period for investors.
The Portfolio remains focused on its two major objectives, safety and income.
Investments are concentrated in U.S. Treasury notes, agencies, and obligations
of large U.S. corporations. Corporate debt is utilized to enhance the long
term return and current income of the Portfolio. Emphasis is on securities
with maturities between two to ten years. This reduces the possibility of sig-
nificant principal fluctuation while producing a high level of income.
The Portfolio had the following characteristics relative to the Lehman Broth-
ers Intermediate Government/Corporate Index as of April 30, 1998:
<TABLE>
<CAPTION>
PORTFOLIO INDEX
---------- ----------
<S> <C> <C>
Average Maturity....................................... 5.41 Years 4.28 Years
Average Duration....................................... 3.32 Years 3.31 Years
Average Coupon......................................... 6.28% 6.75%
Yield to Maturity...................................... 5.96% 5.87%
</TABLE>
For the twelve months ended April 30, 1998, the Portfolio produced a total
rate of return, net of expenses, of 8.08% versus the Lehman Brothers Interme-
diate Government/Corporate Index return of 8.94%.
CHICAGO ASSET MANAGEMENT COMPANY
The investment results presented in the Adviser's letter represent past per-
formance and should not be construed as a guarantee of future results. If the
advisor did not have temporary fee waivers and did not assume expenses on be-
half of the Portfolios, total returns would have been lower. The investment
return and principal value of an investment will fluctuate so that an invest-
or's shares, when redeemed, may be worth more or less than their original
cost.
3
<PAGE>
Performance Comparison
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 PURCHASE
IN THE CHICAGO ASSET MANAGEMENT VALUE/CONTRARIAN
PORTFOLIO AND THE STANDARD & POOR'S 500 INDEX (S&P 500)
---------------------------------
AVERAGE ANNUAL TOTAL RETURN**
FOR PERIOD ENDED APRIL 30, 1998
---------------------------------
1 YEAR SINCE 12/16/94*++
---------------------------------
31.71% 21.97%
---------------------------------
[LINE GRAPH APPEARS HERE]
CHICAGO ASSET
MANAGEMENT VALUE/
CONTRARIAN
DATE PORTFOLIO S&P 500 INDEX+
---- --------- --------------
12/16/94 10,000 10,000
4/30/95 11,181 11,295
4/30/96 14,311 14,705
4/30/97 14,843 18,399
4/30/98 19,550 25,954
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate. When shares are redeemed, they may
be worth more or less than the original cost.
* Commencement of Operations
** Total return of the Portfolio reflects fees waived and expenses assumed by
the Adviser. Without such reduction of expenses, total return would be
lower.
+ The comparative index is not adjusted to reflect expenses or other fees that
the SEC requires to be reflected in the Portfolio's performance. The fees,
if reflected, would reduce the performance quoted. The Portfolio's
performance assumes the reinvestment of all dividends and distributions. The
comparative index has been adjusted to reflect reinvestment of dividends on
securities in the index.
++ For comparative purposes, the value of the S&P 500 Index on 12/31/94 is used
as the beginning value on 12/16/94.
DEFINITION OF THE COMPARATIVE INDEX
The S&P 500 Index is an unmanaged index composed of 400 industrial, 40
financial, 40 utilities and 20 transportation stocks.
Please note that one cannot invest in an unmanaged index.
4
<PAGE>
Performance Comparison
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 PURCHASE
IN THE CHICAGO ASSET MANAGEMENT INTERMEDIATE
BOND PORTFOLIO AND THE LEHMAN BROTHERS INTERMEDIATE
GOVERNMENT/CORPORATE INDEX
---------------------------------
AVERAGE ANNUAL TOTAL RETURN**
FOR PERIOD ENDED APRIL 30, 1998
---------------------------------
1 YEAR SINCE 1/24/95*++
---------------------------------
8.08% 7.85%
---------------------------------
[LINE GRAPH APPEARS HERE]
CHICAGO ASSET
MANAGEMENT LEHMAN BROTHERS
INTERMEDIATE BOND INTERMEDIATE GOVERNMENT/
DATE PORTFOLIO CORPORATE INDEX+
---- --------- ----------------
1/24/95 10,000 10,000
4/30/95 10,431 10,393
4/30/96 11,226 11,347
4/30/97 11,847 12,074
4/30/98 12,804 13,153
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate. When shares are redeemed, they may
be worth more or less than the original cost.
* Commencement of Operations
** Total return of the Portfolio reflects fees waived and expenses assumed by
the Adviser. Without such reduction of expenses, total return would be
lower.
+ The comparative index is not adjusted to reflect expenses or other fees that
the SEC requires to be reflected in the Portfolio's performance. The fees,
if reflected, would reduce the performance quoted. The Portfolio's
performance assumes the reinvestment of all dividends and distributions.
++ For comparative purposes, the value of the Lehman Brothers Intermediate
Government/Corporate Index on 1/31/95 is used as the beginning value on
1/24/95.
DEFINITION OF THE COMPARATIVE INDEX
-----------------------------------
The Lehman Brothers Intermediate Government/Corporate Index is an unmanaged
index composed of a combination of the Government and Corporate Bond Indices.
All issues are investment grade (BBB) or higher with maturities of one to ten
years and an outstanding par value of at least $100 million for U.S. Government
issues and $25 million for others. The Government Index includes public
obligations of the U.S. Treasury, issues of Government agencies, and corporate
debt backed by the U.S. government. The Corporate Bond Index includes fixed-
rate nonconvertible corporate debt. Also included are Yankee bonds and
nonconvertible debt issued by or guaranteed by foreign or international
governments and agencies. Any security downgraded below investment grade during
the month is held in the index until month-end and then removed. All returns
are market value weighted inclusive of accrued income.
Please note that one cannot invest in an unmanaged index.
5
<PAGE>
UAM FUNDS CHICAGO ASSET MANAGEMENT VALUE/
CONTRARIAN PORTFOLIO
APRIL 30, 1998
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 98.4%
SHARES VALUE+
------ -----------
AEROSPACE & DEFENSE - 3.4%
Raytheon Co. ............................................. 13,856 $ 764,678
-----------
AUTOMOTIVE - 6.8%
Chrysler Corp. ........................................... 19,100 767,581
General Motors Corp. ..................................... 11,425 769,760
-----------
1,537,341
-----------
BANKS - 6.6%
Banc One Corp. ........................................... 12,682 745,860
BankAmerica Corp. ........................................ 8,750 743,750
-----------
1,489,610
-----------
BEVERAGES, FOOD & TOBACCO - 5.5%
IBP, Inc. ................................................ 33,175 684,234
Sysco Corp. .............................................. 23,500 559,594
-----------
1,243,828
-----------
CHEMICALS - 3.5%
Dow Chemical Co. ......................................... 8,150 788,003
-----------
COMMUNICATIONS - 3.6%
Motorola, Inc. ........................................... 14,600 812,125
-----------
CONSUMER DURABLES - 3.2%
Goodyear Tire & Rubber Co. ............................... 10,175 712,250
-----------
ELECTRONICS - 3.3%
AMP, Inc. ................................................ 18,875 742,023
-----------
ENERGY - 7.1%
Enron Corp. .............................................. 16,400 806,675
Mobil Corp. .............................................. 10,200 805,800
-----------
1,612,475
-----------
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
UAM FUNDS CHICAGO ASSET MANAGEMENT VALUE/
CONTRARIAN PORTFOLIO
APRIL 30, 1998
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
SHARES VALUE+
------ ------
HEALTH CARE - 10.8%
Aetna Inc. ............................................ 9,300 $ 751,556
Columbia/HCA Healthcare Corp. ......................... 27,025 890,136
United Healthcare Corp. ............................... 11,250 790,313
-----------
2,432,005
-----------
INSURANCE - 2.9%
Chubb Corp. ........................................... 8,325 657,155
-----------
MANUFACTURING - 7.3%
Eastman Kodak Co. ..................................... 12,300 887,906
Tenneco, Inc. ......................................... 17,600 757,900
-----------
1,645,806
-----------
MINING - 4.0%
Newmont Mining Corp. .................................. 27,700 891,594
-----------
PAPER & PACKAGING - 6.9%
International Paper Co. ............................... 14,425 752,805
Weyerhaeuser Co. ...................................... 14,075 811,072
-----------
1,563,877
-----------
PHARMACEUTICALS - 7.0%
*Amgen, Inc. .......................................... 13,500 804,094
Pharmacia & Upjohn, Inc. .............................. 18,250 767,640
-----------
1,571,734
-----------
PRINT & PUBLISHING - 3.2%
Deluxe Corp. .......................................... 21,675 726,112
-----------
RETAIL - 3.5%
Sears, Roebuck and Co. ................................ 13,200 782,925
-----------
TECHNOLOGY - 7.0%
Electronic Data Systems Corp. ......................... 17,400 748,200
International Business Machines Corp. ................. 7,200 834,300
-----------
1,582,500
-----------
TELECOMMUNICATIONS - 2.8%
Bell Atlantic Corp. ................................... 6,725 629,208
-----------
TOTAL COMMON STOCKS (Cost $19,413,188)................. 22,185,249
-----------
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
UAM FUNDS CHICAGO ASSET MANAGEMENT VALUE/
CONTRARIAN PORTFOLIO
APRIL 30, 1998
- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENT - 1.6%
FACE
AMOUNT VALUE+
------ ------
REPURCHASE AGREEMENT
Chase Securities, Inc. 5.37%, dated 4/30/98, due
5/01/98, to be repurchased at $359,054, collateralized
by $313,017 of various U.S. Treasury Obligations,
5.50%-14.00%, due 5/15/04-11/15/27, valued at $363,080
(Cost $359,000)........................................ $359,000 $ 359,000
-----------
TOTAL INVESTMENTS - 100.0% (Cost $19,772,188)(a)........ 22,544,249
-----------
OTHER ASSETS AND LIABILITIES (NET) - 0.0%............... 7,523
-----------
NET ASSETS - 100%....................................... $22,551,772
===========
+ See Note A to Financial Statements.
* Non-Income Producing Security
(a) The cost for federal income tax purposes was $19,790,425. At April 30, 1998,
net unrealized appreciation for all securities based on tax cost was
$2,753,824. This consisted of aggregate gross unrealized appreciation for
all securities of $3,075,373 and aggregate gross unrealized depreciation for
all securities of $321,549.
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
UAM FUNDS CHICAGO ASSET MANAGEMENT
INTERMEDIATE BOND PORTFOLIO
APRIL 30, 1998
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
CORPORATE BONDS & NOTES - 54.8%
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
------ ------
<S> <C> <C>
BANKS - 8.8%
BankAmerica Corp. 7.625%, 06/15/04.................... $ 250,000 $ 265,345
Northern Trust Co. 6.50%, 05/01/03.................... 250,000 252,368
State Street Boston Corp. 7.35%, 06/15/26............. 250,000 271,342
SunTrust Banks, Inc. 6.00%, 02/15/26.................. 275,000 268,939
Wachovia Corp. 6.625%, 11/15/06....................... 100,000 101,842
-----------
1,159,836
-----------
FINANCIAL SERVICES - 19.9%
Associates Corp. of North America
6.50%, 10/15/02....................................... 150,000 151,631
7.75%, 02/15/05....................................... 250,000 269,085
Chrysler Financial Corp. 5.93%, 12/08/98.............. 250,000 249,910
CIT Group Holdings, Inc. 6.25%, 10/25/99.............. 200,000 200,778
Commercial Credit Corp. 6.125%, 03/01/00.............. 250,000 250,228
Exxon Capital Corp. 6.625%, 08/15/02.................. 59,000 60,405
Ford Motor Credit Co.--Global Bond 6.25%, 11/08/00.... 250,000 251,417
General Electric Capital Corp. 6.50%, 11/01/06........ 250,000 254,898
General Motors Acceptance Corp.
5.75%, 01/05/00....................................... 100,000 99,686
6.125%, 01/22/08...................................... 100,000 97,274
General Motors Acceptance Corp.--Global Bond
6.75%, 02/07/02...................................... 100,000 101,717
Heller Financial, Inc. 6.25%, 03/01/01................ 250,000 249,757
Sears Roebuck Acceptance Corp.
Series 1 6.16%, 12/04/00.............................. 250,000 250,487
Series 2 6.70%, 08/13/01.............................. 150,000 152,422
-----------
2,639,695
-----------
INDUSTRIAL - 11.3%
Cooper Industries, Inc. 5.88%, 02/20/03............... 250,000 247,872
General Motors 6.25%, 05/01/05........................ 250,000 249,047
Ingersoll-Rand 6.23%, 11/19/27........................ 250,000 250,625
PepsiCo, Inc. 6.25%, 09/01/99......................... 250,000 251,183
Shell Oil Co. 6.625%, 07/01/99........................ 250,000 252,285
WMX Technologies, Inc. 6.25%, 10/15/00................ 250,000 249,743
-----------
1,500,755
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
UAM FUNDS CHICAGO ASSET MANAGEMENT
INTERMEDIATE BOND PORTFOLIO
APRIL 30, 1998
- --------------------------------------------------------------------------------
CORPORATE BONDS & NOTES - CONTINUED
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
------ ------
<S> <C> <C>
RETAIL - 5.4%
J.C. Penney & Co.
5.375%, 11/15/98...................................... $ 53,000 $ 52,895
6.90%, 08/15/26....................................... 200,000 207,874
Motorola, Inc. 6.50%, 09/01/25........................ 300,000 309,408
Wal-Mart Stores, Inc. 6.375%, 03/01/03................ 140,000 142,033
-----------
712,210
-----------
UTILITIES - 9.4%
Central Illinois Public Service Co. 6.68%, 03/15/00... 250,000 253,395
Florida Power & Light Co. 5.50%, 07/01/99............. 250,000 248,835
National Rural Utilities 5.95%, 01/15/03.............. 250,000 247,105
Potomac Electric Power Co. 6.25%, 10/15/07............ 250,000 251,272
Virginia Electric Power Co. 6.25%, 08/01/98........... 250,000 250,313
-----------
1,250,920
-----------
TOTAL CORPORATE BONDS & NOTES (COST $7,121,527)....... 7,263,416
-----------
U.S. GOVERNMENT SECURITIES - 30.5%
U.S. TREASURY NOTES
5.875%, 08/15/98...................................... 250,000 250,353
5.875%, 02/28/99...................................... 250,000 250,665
5.625%, 10/31/99...................................... 250,000 250,077
5.875%, 11/15/99...................................... 250,000 251,015
7.75%, 01/31/00....................................... 500,000 517,655
5.50%, 02/29/00....................................... 150,000 149,766
5.75%, 11/15/00....................................... 750,000 752,340
7.50%, 11/15/01....................................... 250,000 264,492
6.125%, 12/31/01...................................... 300,000 304,452
7.50%, 05/15/02....................................... 50,000 53,250
5.75%, 10/31/02....................................... 1,000,000 1,002,500
-----------
TOTAL U.S. GOVERNMENT SECURITIES (Cost $4,005,819).... 4,046,565
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
UAM FUNDS CHICAGO ASSET MANAGEMENT
INTERMEDIATE BOND PORTFOLIO
APRIL 30, 1998
- --------------------------------------------------------------------------------
AGENCY SECURITIES - 7.4%
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
------ ------
<S> <C> <C>
FEDERAL NATIONAL MORTGAGE ASSOCIATION
5.42%, 01/23/01......................................... $ 50,000 $ 49,515
5.37%, 02/07/01......................................... 250,000 247,228
6.40%, 09/27/05......................................... 200,000 204,562
5.875%, 02/02/06........................................ 250,000 247,655
7.00%, 12/01/07......................................... 233,376 238,088
-----------
TOTAL AGENCY SECURITIES (Cost $982,337)................. 987,048
-----------
ASSET-BACKED SECURITIES - 4.2%
Chase Manhattan Grantor Trust, Series 1995-B, Class A
5.90%, 11/15/01........................................ 59,396 59,452
Norwest Automobile Trust, Series 1996-A, Class A4 6.10%,
03/15/01............................................... 250,000 250,780
Premier Auto Trust, Series 1998-1, Class A3 5.63%,
08/06/01............................................... 250,000 248,982
-----------
TOTAL ASSET-BACKED SECURITIES (Cost $559,367)........... 559,214
-----------
SHORT-TERM INVESTMENT - 1.8%
REPURCHASE AGREEMENT
Chase Securities, Inc. 5.37%, dated 4/30/98, due
5/01/98, to be repurchased at $233,035, collateralized
by $203,156 of various U.S. Treasury Obligations,
5.50%-14.00%, due 5/15/04-11/15/27, valued at $235,648
(Cost $233,000)........................................ 233,000 233,000
-----------
TOTAL INVESTMENTS - 98.7% (Cost $12,902,050)(a)......... 13,089,243
-----------
OTHER ASSETS AND LIABILITIES (NET) - 1.3%............... 172,074
-----------
NET ASSETS - 100%....................................... $13,261,317
===========
</TABLE>
+ See Note A to Financial Statements.
(a) The cost for federal income tax purposes was $12,902,050. At April 30, 1998,
net unrealized appreciation for all securities based on tax cost was
$187,193. This consisted of aggregate gross unrealized appreciation for all
securities of $208,493 and aggregate gross unrealized depreciation for all
securities of $21,300.
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
UAM FUNDS CHICAGO ASSET MANAGEMENT COMPANY
PORTFOLIOS
APRIL 30, 1998
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
CHICAGO ASSET CHICAGO ASSET
MANAGEMENT MANAGEMENT
VALUE/ INTERMEDIATE
CONTRARIAN BOND
PORTFOLIO PORTFOLIO
------------- -------------
<S> <C> <C>
ASSETS
Investments, at Cost............................. $19,772,188 $12,902,050
=========== ===========
Investments, at Value............................ $22,544,249 $13,089,243
Cash............................................. 286 559
Deferred Organization Costs--Note A.............. 7,247 7,800
Dividends Receivable............................. 23,082 --
Receivable for Investments Sold.................. 105,697 --
Receivable for Portfolio Shares Sold............. 17,880 62
Interest Receivable.............................. 54 187,270
Other Assets..................................... 147 77
----------- -----------
Total Assets.................................... 22,698,642 13,285,011
----------- -----------
LIABILITIES
Payable for Investments Purchased................ 100,284 --
Payable for Portfolio Shares Redeemed............ 14,548 --
Payable for Administrative Fees--Note C.......... 7,332 7,024
Payable for Investment Advisory Fees--Note B..... 3,629 286
Payable for Trustees' Fees--Note G............... 627 616
Other Liabilities................................ 20,450 15,768
----------- -----------
Total Liabilities............................... 146,870 23,694
----------- -----------
NET ASSETS....................................... $22,551,772 $13,261,317
=========== ===========
NET ASSETS CONSIST OF:
Paid in Capital.................................. $18,387,505 $12,969,351
Undistributed Net Investment Income.............. 25,950 87,263
Accumulated Net Realized Gain.................... 1,366,256 17,510
Unrealized Appreciation.......................... 2,772,061 187,193
----------- -----------
NET ASSETS....................................... $22,551,772 $13,261,317
=========== ===========
INSTITUTIONAL CLASS SHARES
Shares Issued and Outstanding (Unlimited authori-
zation, no par value)........................... 1,413,162 1,258,182
Net Asset Value, Offering and Redemption Price
Per Share....................................... $15.96 $10.54
====== ======
</TABLE>
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
UAM FUNDS CHICAGO ASSET MANAGEMENT COMPANY
PORTFOLIOS FOR THE YEAR ENDED
APRIL 30, 1998
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
CHICAGO ASSET CHICAGO ASSET
MANAGEMENT MANAGEMENT
VALUE/ INTERMEDIATE
CONTRARIAN BOND
PORTFOLIO PORTFOLIO
------------- -------------
<S> <C> <C>
INVESTMENT INCOME
Dividends................................. $ 385,704 $ --
Interest.................................. 21,032 706,247
---------- --------
TOTAL INCOME............................. 406,736 706,247
---------- --------
EXPENSES
Investment Advisory Fees--Note B.......... 120,386 52,374
Administrative Fees--Note C............... 85,252 83,276
Custodian Fees--Note D.................... 5,659 1,317
Audit Fees................................ 13,206 13,122
Legal Fees................................ 4,936 3,210
Printing Fees............................. 21,201 11,897
Account Services Fees--Note F............. 656 1,520
Shareholder Servicing Fees................ 22,535 --
Trustees' Fees--Note G.................... 2,646 2,559
Filing and Registration Fees.............. 18,574 14,355
Amortization of Organization Expense--Note
A........................................ 4,454 4,454
Other Expenses............................ 7,017 2,244
Account Services Fees Waived--Note F...... (656) (1,520)
Investment Advisory Fees Waived--Note B... (120,386) (52,374)
Expenses Assumed by the Adviser--Note B... (2,293) (48,377)
---------- --------
Net Expenses Before Expense Offset....... 183,187 88,057
Expense Offset--Note A.................... (74) (342)
---------- --------
Net Expenses After Expense Offset........ 183,113 87,715
---------- --------
NET INVESTMENT INCOME..................... 223,623 618,532
---------- --------
NET REALIZED GAIN ON INVESTMENTS.......... 2,464,320 19,841
NET CHANGE IN UNREALIZED
APPRECIATION/DEPRECIATION OF
INVESTMENTS.............................. 2,363,924 190,831
---------- --------
NET GAIN ON INVESTMENTS................... 4,828,244 210,672
---------- --------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS............................... $5,051,867 $829,204
========== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
UAM FUNDS CHICAGO ASSET MANAGEMENT VALUE/
CONTRARIAN PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEARS ENDED APRIL 30,
1998 1997
----------- -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income............................. $ 223,623 $ 41,317
Net Realized Gain................................. 2,464,320 126,824
Net Change in Unrealized
Appreciation/Depreciation........................ 2,363,924 219,469
----------- -----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERA-
TIONS............................................ 5,051,867 387,610
----------- -----------
DISTRIBUTIONS:
Net Investment Income............................. (232,720) (20,547)
Net Realized Gain................................. (1,179,952) (80,161)
----------- -----------
TOTAL DISTRIBUTIONS............................... (1,412,672) (100,708)
----------- -----------
CAPITAL SHARE TRANSACTIONS: (1)
Issued............................................ 7,498,917 12,634,715
In Lieu of Cash Distributions..................... 1,412,462 96,713
Redeemed.......................................... (3,803,208) (105,728)
----------- -----------
NET INCREASE FROM CAPITAL SHARE TRANSACTIONS...... 5,108,171 12,625,700
----------- -----------
TOTAL INCREASE.................................... 8,747,366 12,912,602
NET ASSETS:
Beginning of Year................................. 13,804,406 891,804
----------- -----------
End of Year (including undistributed net
investment income of $25,950 and $30,593,
respectively).................................... $22,551,772 $13,804,406
=========== ===========
(1) SHARES ISSUED AND REDEEMED:
Shares Issued.................................. 509,622 991,693
In Lieu of Cash Distributions.................. 98,063 7,527
Redeemed....................................... (250,654) (8,321)
----------- -----------
357,031 990,899
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
UAM FUNDS CHICAGO ASSET MANAGEMENT
INTERMEDIATE BOND PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEARS ENDED APRIL 30,
1998 1997
----------- -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income............................. $ 618,532 $ 508,576
Net Realized Gain................................. 19,841 8,536
Net Change in Unrealized
Appreciation/Depreciation........................ 190,831 (57,181)
----------- -----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERA-
TIONS............................................ 829,204 459,931
----------- -----------
DISTRIBUTIONS:
Net Investment Income............................. (596,183) (506,282)
Net Realized Gain................................. (4,101) (22,948)
----------- -----------
TOTAL DISTRIBUTIONS............................... (600,284) (529,230)
----------- -----------
CAPITAL SHARE TRANSACTIONS: (1)
Issued............................................ 2,879,576 1,826,542
In Lieu of Cash Distributions..................... 600,151 528,662
Redeemed.......................................... (491,507) (222,819)
----------- -----------
NET INCREASE FROM CAPITAL SHARE TRANSACTIONS...... 2,988,220 2,132,385
----------- -----------
TOTAL INCREASE.................................... 3,217,140 2,063,086
NET ASSETS:
Beginning of Year................................. 10,044,177 7,981,091
----------- -----------
End of Year (including undistributed net
investment income of $87,263 and $60,816,
respectively).................................... $13,261,317 $10,044,177
=========== ===========
(1) SHARES ISSUED AND REDEEMED:
Shares Issued.................................. 272,351 176,865
In Lieu of Cash Distributions.................. 57,529 51,334
Redeemed....................................... (46,828) (21,434)
----------- -----------
283,052 206,765
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
UAM FUNDS CHICAGO ASSET MANAGEMENT VALUE/
CONTRARIAN PORTFOLIO
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
DECEMBER 16,
YEARS ENDED APRIL 30, 1994*** TO
------------------------- APRIL 30,
1998 1997 1996 1995
------- ------- ------- ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period... $ 13.07 $ 13.67 $ 11.14 $10.00
------- ------- ------- ------
Income From Investment Operations
Net Investment Income................. 0.17 0.18 0.19 0.05
Net Realized and Unrealized Gain on
Investments.......................... 3.84 0.30 2.86 1.13
------- ------- ------- ------
Total from Investment Operations...... 4.01 0.48 3.05 1.18
------- ------- ------- ------
Distributions
Net Investment Income................. (0.18) (0.24) (0.23) (0.04)
Net Realized Gain..................... (0.94) (0.84) (0.29) --
------- ------- ------- ------
Total Distributions................... (1.12) (1.08) (0.52) (0.04)
------- ------- ------- ------
Net Asset Value, End of Period......... $ 15.96 $ 13.07 $ 13.67 $11.14
======= ======= ======= ======
TOTAL RETURN+.......................... 31.71% 3.72% 28.00% 11.81%**
======= ======= ======= ======
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands).. $22,552 $13,804 $ 892 $ 696
Ratio of Expenses to Average Net
Assets................................ 0.95% 0.95% 1.06% 0.95%*
Ratio of Net Investment Income to
Average Net Assets.................... 1.16% 1.89% 1.51% 1.54%*
Portfolio Turnover Rate................ 55% 21% 33% 4%
Average Commission Rate#............... $0.0552 $0.0574 $0.0600 N/A
Ratio of Voluntarily Waived Fees and
Expenses Assumed by the Adviser to
Average Net Assets.................... 0.64% 6.32% 12.20% 17.05%*
Ratio of Expenses to Average Net Assets
Including Expense Offsets............. 0.95% 0.95% 0.95% 0.95%*
</TABLE>
* Annualized
** Not 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.
16
<PAGE>
UAM FUNDS CHICAGO ASSET MANAGEMENT
INTERMEDIATE BOND PORTFOLIO
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
JANUARY 24,
YEARS ENDED APRIL 30, 1995*** TO
------------------------ APRIL 30,
1998 1997 1996 1995
------- ------- ------ -----------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.... $ 10.30 $ 10.39 $10.33 $10.00
------- ------- ------ ------
Income From Investment Operations
Net Investment Income.................. 0.57 0.61 0.64 0.17
Net Realized and Unrealized Gain on
Investments........................... 0.24 (0.05) 0.14++ 0.26
------- ------- ------ ------
Total from Investment Operations....... 0.81 0.56 0.78 0.43
------- ------- ------ ------
Distributions
Net Investment Income.................. (0.57) (0.62) (0.64) (0.10)
Net Realized Gain...................... -- @ (0.03) (0.08) --
------- ------- ------ ------
Total Distributions.................... (0.57) (0.65) (0.72) (0.10)
------- ------- ------ ------
Net Asset Value, End of Period.......... $ 10.54 $ 10.30 $10.39 $10.33
======= ======= ====== ======
TOTAL RETURN+........................... 8.08% 5.53% 7.62% 4.31%**
======= ======= ====== ======
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands)... $13,261 $10,044 $7,981 $5,267
Ratio of Expenses to Average Net
Assets................................. 0.80% 0.80% 0.84% 0.80%*
Ratio of Net Investment Income to
Average Net Assets..................... 5.64% 5.88% 6.17% 6.20%*
Portfolio Turnover Rate................. 40% 31% 24% 0%
Ratio of Voluntarily Waived Fees and
Expenses Assumed by the Adviser to
Average Net Assets..................... 0.93% 1.39% 1.20% 2.78%*
Ratio of Expenses to Average Net Assets
Including Expense Offsets.............. 0.80% 0.80% 0.80% 0.80%*
</TABLE>
* Annualized
** Not 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 a share outstanding throughout the year does not ac-
cord with the aggregate net losses on investments for that year because of
the timing of sales and repurchases of the Portfolio shares in relation to
fluctuating market value of the investments of the Portfolio.
@ Amount is less than $0.01 per share.
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
UAM FUNDS CHICAGO ASSET MANAGEMENT
COMPANY PORTFOLIOS
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
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 April 30, 1998, the
UAM Funds were comprised of forty-four 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
18
<PAGE>
UAM FUNDS CHICAGO ASSET MANAGEMENT
COMPANY PORTFOLIOS
- -------------------------------------------------------------------------------
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 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 have 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 UAM Funds may transfer their daily uninvested cash bal-
ances into a joint trading account which invests in one or more repurchase
agreement. 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. These dif-
ferences are primarily due to differing book and tax treatments in the
timing of the recognition of gains or losses on investments.
Permanent book and tax basis differences relating to shareholder distri-
butions resulted in reclassifications as follows:
<TABLE>
<CAPTION>
UNDISTRIBUTED
NET ACCUMULATED
CHICAGO ASSET MANAGEMENT INVESTMENT NET REALIZED PAID IN
COMPANY PORTFOLIOS INCOME GAIN (LOSS) CAPITAL
------------------------ ------------- ------------ -------
<S> <C> <C> <C>
Value/Contrarian....................... $4,454 $ -- $(4,454)
Intermediate Bond...................... 4,098 356 (4,454)
</TABLE>
Permanent book-tax differences, if any, are not included in ending un-
distributed net investment income (loss) for the purpose of calculating
net investment income (loss) per share in the financial highlights.
19
<PAGE>
UAM FUNDS CHICAGO ASSET MANAGEMENT
COMPANY PORTFOLIOS
- -------------------------------------------------------------------------------
5. ORGANIZATION COST: 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.
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 assets. Custodian fees for the Portfolios have
been increased to include expense offsets, if any, 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
services to the Portfolios for a monthly fee calculated at an annual rate of
average daily net assets for the month, 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, after the effect of expense
offset arrangements, from exceeding 0.95% and 0.80% of average daily net as-
sets, 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 un-
der a Fund Administration Agreement (the "Agreement"). Pursuant to the Agree-
ment, 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 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 on the basis of
their relative net assets and are subject to a graduated minimum fee schedule
per portfolio which rises from
20
<PAGE>
UAM FUNDS CHICAGO ASSET MANAGEMENT
COMPANY PORTFOLIOS
- -------------------------------------------------------------------------------
$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 at an annual rate of 0.06% of average daily net assets of
the Chicago Asset Management Value/Contrarian Portfolio and 0.04% of average
daily net assets of the Chicago Asset Management Intermediate Bond Portfolio.
The Administrator has entered into a Mutual Funds Service Agreement with Chase
Global Funds Services Company ("CGFSC"), a corporate affiliate of The Chase
Manhattan Bank, under which CGFSC agrees to provide certain services, includ-
ing 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 year ended April 30, 1998, CGFSC was paid the following amounts by
the Administrator:
<TABLE>
<CAPTION>
CHICAGO ASSET MANAGEMENT COMPANY PORTFOLIOS
- -------------------------------------------
<S> <C>
Value/Contrarian....................................................... $73,676
Intermediate Bond...................................................... 78,912
</TABLE>
D. CUSTODIAN: The Chase Manhattan Bank is custodian for the Portfolios' as-
sets 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 Portfolios. The
Distributor does not receive any fee or other compensation with respect to the
Portfolios.
F. ACCOUNT SERVICES: The UAM Funds entered into an Account Services Agree-
ment (the "Services Agreement") with UAM Retirement Plan Services, Inc.
("Service Provider"), a wholly-owned subsidiary of UAM. Under the Services
Agreement, the Service Provider agrees to perform certain services for partic-
ipants in a self-directed, defined contribution plan, and for whom the Service
Provider provides participant recordkeeping. Pursuant to the Services Agree-
ment, the Service Provider is entitled to receive, after the end of each
month, a fee at the annual rate of 0.15% of the average aggregate daily net
asset value of shares of the UAM Funds in the accounts for which they provide
services. The Service Provider has voluntarily agreed to waive its fees in or-
der to keep the Portfolios' total annual operating expenses, after the effect
of expense offset arrangements, from exceeding 0.95% and 0.80% of average
daily net assets for the Chicago Asset Management Value/Contrarian Portfolio
and Chicago Asset Management Intermediate Bond Portfolio, respectively.
21
<PAGE>
UAM FUNDS CHICAGO ASSET MANAGEMENT
COMPANY PORTFOLIOS
- -------------------------------------------------------------------------------
G. 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, plus a quarterly retainer of $150 for each
active portfolio of the UAM Funds, and reimbursement of expenses incurred in
attending Trustee meetings.
H. PURCHASES AND SALES: For the year ended April 30, 1998, the Portfolios'
purchases and sales of investment securities other than long-term U.S. Govern-
ment securities and short-term securities were:
<TABLE>
<CAPTION>
CHICAGO ASSET MANAGEMENT COMPANY PORTFOLIOS PURCHASES SALES
- ------------------------------------------- ----------- -----------
<S> <C> <C>
Value/Contrarian....................................... $14,240,956 $10,210,846
Intermediate Bond...................................... 3,792,041 1,462,571
</TABLE>
Purchases and sales of long-term U.S. Government securities were $3,408,016
and $2,536,477 respectively, for Chicago Asset Management Intermediate Bond
Portfolio. There were no purchases and sales of long-term U.S. Government se-
curities for Chicago Asset Management Value/Contrarian Portfolio.
I. LINE OF CREDIT: The Chicago Asset Management Intermediate Bond Portfolio,
along with certain other Portfolios of UAM Funds, collectively entered into an
agreement which enables them to participate in a $100 million unsecured line
of credit with several banks. Borrowings will be made solely to temporarily
finance the repurchase of Capital shares. Interest is charged to each partici-
pating Portfolio based on its borrowings at a rate per annum equal to the Fed-
eral Funds rate plus 0.50%. In addition, a commitment fee of 0.08% per annum,
payable at the end of each calendar quarter, is accrued by each participating
Portfolio based on its average daily unused portion of the line of credit.
During the year ended April 30, 1998, the Chicago Asset Management Intermedi-
ate Bond Portfolio had no borrowings under the agreement.
J. OTHER: At April 30, 1998, the percentage of total shares outstanding held
by record shareholders owning 10% or greater of the aggregate total shares
outstanding for each Portfolio was as follows:
<TABLE>
<CAPTION>
NO. OF %
CHICAGO ASSET MANAGEMENT COMPANY PORTFOLIOS SHAREHOLDERS OWNERSHIP
- ------------------------------------------- ------------ ---------
<S> <C> <C>
Value/Contrarian......................................... 1 87%
Intermediate Bond........................................ 1 89%
</TABLE>
22
<PAGE>
UAM FUNDS CHICAGO ASSET MANAGEMENT
COMPANY PORTFOLIOS
- -------------------------------------------------------------------------------
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 assets and liabilities,
including the portfolios of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of the Chicago Asset
Management Value/Contrarian Portfolio and the Chicago Asset Management
Intermediate Bond Portfolio (the "Portfolios"), portfolios of the UAM Funds
Trust, at April 30, 1998, and the results of each of their operations, the
changes in each of their net assets and the financial highlights for the
periods indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the
Portfolio's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included conformation of securities at April 30, 1998 by
correspondence with the custodian and the application of alternative auditing
procedures where securities purchased were not received by the custodian,
provide a reasonable basis for the opinion expressed above.
Price Waterhouse LLP
Boston, Massachusetts
June 3, 1998
23
<PAGE>
UAM FUNDS CHICAGO ASSET MANAGEMENT
COMPANY PORTFOLIOS
- -------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION (UNAUDITED):
Chicago Asset Management Value/Contrarian Portfolio and Chicago Asset
Management Intermediate Bond Portfolio hereby designate approximately $157,458
and $0, respectively, as 20% long-term capital gain dividends and $96,506 and
$4,101, respectively, as 28% long-term capital gain dividends for the purpose
of the dividend paid deduction on their federal income tax returns.
For the year ended April 30, 1998, the percentage of dividends paid from
investment company taxable income that qualify for the 70% dividend received
deduction for corporate shareholders is 17.98% for Chicago Asset Management
Value/Contrarian Portfolio.
The percentage of income earned from direct treasury obligations was 35.80%
for Chicago Asset Management Intermediate Bond Portfolio.
24
<PAGE>
UAM Funds Chicago Asset Management
Company Portfolios
- --------------------------------------------------------------------------------
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 Karl O. Hartmann
Trustee Assistant Secretary
Philip D. English Gary L. French
Trustee Treasurer
William A. Humenuk Robert R. Flaherty
Trustee Assistant Treasurer
Charles H. Salisbury, Jr. Gordon M. Shone
Trustee and Executive Vice President Assistant Treasurer
Peter M. Whitman, Jr.
Trustee
- --------------------------------------------------------------------------------
Investment Adviser
Chicago Asset Management Company
70 West Madison Street, 56th Floor
Chicago, IL 60602
Administrator
UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110
Custodian
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, NY 11245
Legal Counsel
Drinker, Biddle & Reath LLP
Philadelphia National Bank Building
1345 Chestnut Street
-----------------------------------
Independent Accountants This report has been prepared for
Price Waterhouse LLP shareholders and may be distributed
160 Federal Street to others only if preceded or
Boston, MA 02110 accompanied by a current prospectus.
------------------------------------
Distributor
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
<PAGE>
UAM FUNDS
ANNUAL-REPORT
- ------------------------------
MJI INTERNATIONAL EQUITY
PORTFOLIO
- --------------------------------------------------------------------------------
April 30, 1998
UAM
<PAGE>
UAM FUNDS MJI INTERNATIONAL EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
Dear Shareholder,
PERFORMANCE
This has been a year of momentous events with widely varying returns between
markets. Contrast the unexpectedly long cycle in the US with the collapse in
Asia while the European markets managed to achieve one of their best years ev-
er. Returns for the Portfolio were well ahead of the index for the year ended
April 30, 1998, with a gain of 20.39% for the Institutional Class while the
MSCI EAFE Index returned 18.91%. For the same time period, the Portfolio's In-
stitutional Service Class Shares returned 20.11%. The key feature of these re-
sults was the cautious attitude we adopted toward markets in the Far East when
it became clear that the problems of the region were likely to persist.
MARKET REVIEW
The year divided sharply into two: the period to December 1997 was dominated
by the events in Asia while the 1998 markets saw a strong rebound. The col-
lapse in Thailand was followed in due course by the remaining "tiger" econo-
mies, with the exception of Taiwan. The "tiger" economies were dependent on
exports and foreign capital to support their high rates of growth. All became
vulnerable when global growth slowed. At the same time, with currencies pegged
to the rising US dollar, export performance suffered and the downward spiral
of deteriorating current accounts, currencies and equity markets followed.
Weak government controls meant that remedial action tended to be slow.
The impact of the crisis extended well beyond the Asian region. During 1997,
markets tried to assess the impact on the global economy and fluctuations in
the US and European markets reflected the changes in mood from optimism to
pessimism, the depths of pessimism being reached in October when the EAFE In-
dex fell by 7.7% for the month. The most important and sympathetic response at
this time came from the Federal Reserve Board which resisted the pressure to
increase rates in spite of the firm domestic US economy. This policy in itself
prevented the weak Asian economies suffering from the additional pain of
higher rates on their already heavy dollar borrowings. Markets outside Asia
regained their composure over the next two months.
Within Europe the persistence of low global rates of interest at a time when
growth was beginning to improve made equities an enormously attractive asset
class and markets continued their steady rise. Two other developments were
critical to the performance of the European markets: the convergence of inter-
est rates within Europe in preparation for the single currency and the broad
rationalisation programme which was enhancing shareholder value, a similar
phenomenon to that seen in the US in recent years. Europe proved to be the
area offering the best returns during the year.
1
<PAGE>
UAM FUNDS MJI INTERNATIONAL EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
INVESTMENT STRATEGY
The portfolio was overweighted in the Asian markets in early 1997 but we re-
duced this exposure aggressively as we saw the situation beginning to deterio-
rate. Investments in Thailand, at 1.3% of total assets, were sold in May while
the overweight exposure to Malaysia was reduced to a market weight in that
month. The remaining investments in Malaysia were sold in July and August, at
a lower level on the index but before the worst of the crisis. In the Septem-
ber quarter we continued to withdraw assets from the region, reducing exposure
by a third, to 14.4% of the portfolio, and focusing the remaining investments
on Hong Kong, Singapore, Australia and New Zealand, markets which we believed
were strong enough to withstand the worst of the collapse.
The assets from Southeast Asia were reinvested in the UK, Continental Europe
and Japan. In the UK, we increased exposure to financial services which would
benefit from both the low interest rate environment and corporate activity in
the sector, adding to the bank, Lloyds TSB and making new investments in Nor-
wich Union and Halifax, two new banks, recently de-mutualised. We also added
to European financials, Fortis, the Belgian insurer, the French bank, BNP and
Credit Suisse. Exposure was trimmed back in both Spain and Italy, the two best
performing European markets. Investments in Japan were made in anticipation of
significant stimulus packages being announced by the government in late
1997/early 1998. The Japanese market surged on this theme in January 1998 but
when the packages fell short of expectations, investors began to withdraw as-
sets. We maintained our position through the first quarter of 1998 but cut
back in April when renewed weakness in the region began to impact the curren-
cy.
Throughout the year, investments in the emerging markets suffered as a result
of the interest rate premium attached to the region due to the problems in
Asia. Various markets stood out with strong contributions such as Argentina
and Mexico early in the year but these were sold heavily in the December quar-
ter, along with Chile. They continued this weakness in the first four months
of 1998 when confidence in the emerging markets generally remained at a low
ebb. The portfolio maintained an exposure of approximately 10.0% to the region
throughout the period, switching the emphasis late in the year to include
South Africa. Returns in South Africa were excellent in early 1998 when the
financial stocks in which the portfolio was invested responded to falling in-
flation and interest rates and broad rationalisation plans. Corporations in
South Africa are just beginning the process which has already led to sparkling
returns in Europe.
2
<PAGE>
UAM FUNDS MJI INTERNATIONAL EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
MARKET OUTLOOK
Notwithstanding the problems in the Asian region, the international markets
generated strong returns in 1997. In the coming year, it should be expected
that returns will be more muted. After presenting an optimistic outlook for
growth and earnings in 1998, many Asian governments are at last coming to
terms with the credit crunch and collapse in activity which is gripping the
region. Likewise, western economies have also down-played the possible conse-
quences of the Asian crisis in terms of a weaker global trade outlook and
changes to this view may emerge. The relationship between economies in the
Asian region and Japan is increasingly being seen as critical to recovery and
pressure on Japan to expand its internal economy is growing. On the other
hand, investors can take comfort in the knowledge that recovery in Europe is
still progressing and global interest rates are liable to remain benign, even
if small increases become necessary. Our outlook therefore is for continued
modest returns from equities. The portfolio focus will remain on Europe but we
will be looking for opportunities to rebuild exposure to Asia, but only as
conditions improve. The most attractive valuations are still to be found in
Latin America and markets in the region should offer investors sound returns
in 1998 after a low-key start to the year.
MURRAY JOHNSTONE INTERNATIONAL LTD.
The investment results presented in the Adviser's letter represent past per-
formance 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 be-
half of the Portfolio, total return for the Portfolio would have been lower.
The investment return and principal value of an investment will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than their
original cost. For a complete discussion of the risks associated with interna-
tional investing, please refer to the Portfolio's Prospectus.
3
<PAGE>
COMPARISON OF CHANGE IN VALUE OF $10,000 PURCHASE IN THE
MJI INTERNATIONAL EQUITY PORTFOLIO AND THE
MORGAN STANLEY CAPITAL INTERNATIONAL EAFE INDEX
- -------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN** FOR PERIOD ENDED APRIL 30, 1998
- -------------------------------------------------------------
1 YEAR SINCE 9/16/94* SINCE 12/31/96*
- -------------------------------------------------------------
INSTITUTIONAL INSTITUTIONAL
INSTITUTIONAL SERVICE CLASS INSTITUTIONAL SERVICE CLASS
CLASS SHARES SHARES CLASS SHARES SHARES
20.39% 20.11% 7.53% 15.73%
- -------------------------------------------------------------
[LOGO APPEARS HERE]
<TABLE>
<CAPTION>
- -----------------------------------------------------
Label MJI International Morgan Stanley
- -----------------------------------------------------
<S> <C> <C> <C>
1 Sep 16, 94 10000 10000
- -----------------------------------------------------
2 Apr 30, 95 9500 10462
- -----------------------------------------------------
3 Apr 30, 96 10324 11655
- -----------------------------------------------------
4 Apr 30, 97 10806 11551
- -----------------------------------------------------
5 Apr 30, 98 13009 13735
- -----------------------------------------------------
</TABLE>
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate. When shares are redeemed, they may
be worth more or less than the original cost.
* Commencement of Operations
** Total return of the Portfolio reflects fees waived and expenses assumed by
the Adviser. Without such reduction of expenses, total return would be
lower.
+ The comparative index is not adjusted to reflect expenses or other fees
that the SEC requires to be reflected in the Portfolio's performance. The
fees, if reflected, would reduce the performance quoted. The Portfolio's
performance assumes the reinvestment of all dividends and distributions.
The comparative index has been adjusted to reflect reinvestment of
dividends on securities in the index.
Definition of the Comparative Index
-----------------------------------
The Morgan Stanley Capital International EAFE Index is an unmanaged index
composed of arithmetic, market value weighted averages of the performance of
over 900 securities listed on the stock exchanges of countries in Europe,
Australia and the Far East.
The graph presents the performance of the Institutional Class shares which
have been in existence since the Portfolio's inception. The performance of the
Institutional Service Class shares will vary based upon the different
inception date and fees assessed to that Class.
Please note that one cannot invest in an unmanaged index.
4
<PAGE>
UAM FUNDS MJI INTERNATIONAL EQUITY PORTFOLIO
APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 94.1%
SHARES VALUE+
------- -----------
<S> <C> <C>
ARGENTINA - 2.3%
Banco Frances del Rio de la Plata S.A. ADR............... 14,050 $ 408,328
Telecom Argentina S.A. ADR............................... 6,000 216,000
YPF S.A. ADR............................................. 8,600 299,925
-----------
924,253
-----------
AUSTRALIA - 1.9%
Commonwealth Bank of Australia........................... 30,000 360,100
Telstra Corp. Ltd........................................ 160,000 375,553
-----------
735,653
-----------
BELGIUM - 2.2%
Fortis AG................................................ 3,143 888,333
-----------
BRAZIL - 2.2%
Petrobras ADR............................................ 18,000 455,499
Unibanco GDR............................................. 10,000 397,500
-----------
852,999
-----------
CHILE - 2.6%
Cia. de Telecomunicaciones de Chile S.A. ADR............. 25,000 626,562
Madeco S.A. ADR.......................................... 7,500 120,000
Quimica y Minera Chile S.A. ADR.......................... 6,200 269,313
-----------
1,015,875
-----------
FRANCE - 10.8%
Banque Nationale de Paris................................ 3,590 302,800
Cap Gemini S.A........................................... 6,077 789,576
Cie Generale des Eaux.................................... 3,380 628,654
Rhone-Poulenc............................................ 21,330 1,043,612
*SGS-Thomson Microelectronics N.V........................ 5,400 461,753
Suez Lyonnaise........................................... 1,034 175,458
Total S.A., Class B...................................... 7,300 868,325
-----------
4,270,178
-----------
GERMANY - 7.4%
Allianz AG............................................... 2,970 918,497
Allianz AG (New)......................................... 87 26,663
Mannesmann AG............................................ 1,409 1,111,169
Volkswagen AG............................................ 1,086 867,043
-----------
2,923,372
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
UAM FUNDS MJI INTERNATIONAL EQUITY PORTFOLIO
APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCKS - CONTINUED
SHARES VALUE+
------- -----------
<S> <C> <C>
HONG KONG - 1.8%
Hong Kong Land Holdings, Ltd. ADR......................... 150,000 $ 211,500
Hutchison Whampoa, Ltd.................................... 50,000 309,212
Swire Pacific, Ltd., Class A.............................. 35,000 174,876
-----------
695,588
-----------
IRELAND - 2.0%
Allied Irish Banks plc.................................... 26,225 365,447
Bank of Ireland........................................... 20,770 424,126
-----------
789,573
-----------
ITALY - 3.7%
Telecom Italia Mobile S.p.A............................... 156,886 895,377
Telecom Italia S.p.A...................................... 73,650 551,428
-----------
1,446,805
-----------
JAPAN - 12.4%
Anritsu Corp.............................................. 41,000 421,977
Dai-Ichi Kangyo Bank, Ltd................................. 31,000 210,905
Fanuc, Ltd................................................ 14,000 517,027
Fuji Machine Manufacturing Co............................. 18,000 514,909
Fuji Photo Film Co........................................ 8,000 285,152
Fujitsu, Ltd.............................................. 42,000 491,070
Matsumoto Kenko Co., Ltd.................................. 400 1,517
Matsushita Communication Industrial....................... 12,000 355,078
Mitsui & Co., Ltd......................................... 60,000 372,332
Nippon Telegraph & Telephone Corp......................... 50 438,929
Ricoh Co., Ltd............................................ 42,000 435,765
Sumitomo Metal & Mining Co................................ 106,000 439,594
Takeda Chemical Industries................................ 15,000 429,090
-----------
4,913,345
-----------
MEXICO - 1.9%
Cifra S.A. de C.V. ADR Class V............................ 13,062 229,251
Grupo Imsa, S.A. de C.V. ADR.............................. 9,000 171,563
*Grupo Industrial Durango ADR............................. 24,000 345,000
-----------
745,814
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
UAM FUNDS MJI INTERNATIONAL EQUITY PORTFOLIO
APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCKS - CONTINUED
SHARES VALUE+
------ -----------
<S> <C> <C>
NETHERLANDS - 6.3%
Aegon N.V.................................................. 2,505 $ 325,099
ING Groep N.V.............................................. 7,160 465,677
Koninklijke KNP BT N.V..................................... 26,103 717,613
Vendex International N.V. BDR.............................. 5,320 341,526
VNU........................................................ 20,040 649,205
-----------
2,499,120
-----------
NORWAY - 2.2%
Christiania Bank Og Kreditkasse............................ 90,506 416,312
*Petroleum Geo-Services ADR................................ 7,135 469,126
-----------
885,438
-----------
PORTUGAL - 2.5%
Portugal Telecom S.A. (Registered)......................... 18,200 978,553
-----------
SINGAPORE - 1.8%
City Developments, Ltd..................................... 65,000 281,448
*Creative Technology Ltd................................... 4,000 83,186
Singapore Press Holdings Ltd............................... 30,000 331,858
-----------
696,492
-----------
SOUTH AFRICA - 2.9%
Liberty Life Association of Africa Ltd..................... 11,000 372,291
Standard Bank Investment Corp., Ltd........................ 13,000 769,322
-----------
1,141,613
-----------
SPAIN - 3.1%
Banco Santander S.A........................................ 9,837 520,083
Telefonica de Espana S.A................................... 17,159 716,743
-----------
1,236,826
-----------
SWITZERLAND - 8.4%
Credit Suisse Group (Registered)........................... 5,532 1,217,121
Novartis AG (Registered)................................... 371 613,427
Zurich Insurance (Registered).............................. 2,470 1,505,154
-----------
3,335,702
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
UAM FUNDS MJI INTERNATIONAL EQUITY PORTFOLIO
APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCKS - CONTINUED
SHARES VALUE+
-------- -----------
<S> <C> <C>
UNITED KINGDOM - 15.7%
Barclays plc........................................... 15,300 $ 441,390
British Aerospace plc.................................. 13,100 437,733
Cadbury Schweppes plc.................................. 33,300 485,627
Halifax plc............................................ 30,200 403,296
Kingfisher plc......................................... 25,600 464,956
Ladbroke Group plc..................................... 81,500 448,091
Lloyds TSB Group plc................................... 30,620 458,578
Misys plc.............................................. 6,800 326,956
Norwich Union plc...................................... 53,600 400,472
Safeway plc............................................ 43,400 258,757
ScottishPower plc...................................... 41,700 383,393
Shell Transport & Trading Co. plc...................... 55,900 416,020
SmithKline Beecham plc................................. 39,900 475,778
Williams Holdings plc.................................. 62,800 482,075
Wolseley plc........................................... 49,300 345,877
-----------
6,228,999
-----------
TOTAL COMMON STOCKS (Cost $30,417,913).......................... 37,204,531
-----------
PREFERRED STOCK - 1.5%
GERMANY - 1.5%
Marschollek, Lautenschlaeger und Partner AG (Cost
$537,959)............................................. 1,513 589,842
-----------
RIGHTS - 0.0%
<CAPTION>
NO. OF
RIGHTS
--------
<S> <C> <C>
SPAIN - 0.0%
*Telefonica de Espana S.A., expiring 05/07/98 (Cost
$0)................................................... 17,159 10,348
-----------
WARRANTS - 0.0%
<CAPTION>
NO. OF
WARRANTS
--------
<S> <C> <C>
FRANCE - 0.0%
*Cie Generale des Eaux, expiring 05/02/01 (Cost $0).... 3,380 4,920
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
UAM FUNDS MJI INTERNATIONAL EQUITY PORTFOLIO
APRIL 30, 1998
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHORT-TERM INVESTMENT - 7.2%
FACE
AMOUNT VALUE+
---------- -----------
<S> <C> <C>
REPURCHASE AGREEMENT
Chase Securities, Inc. 5.37%, dated 04/30/98, due
5/01/98, to be repurchased at $2,851,425,
collateralized by $2,485,827 of various U.S.
Treasury Obligations, 5.50%-14.00%, due 05/15/04-
11/15/27, valued at $2,883,400 (Cost $2,851,000)... $2,851,000 $ 2,851,000
-----------
TOTAL INVESTMENTS - 102.8% (Cost $33,806,872) (a).............. 40,660,641
-----------
OTHER ASSETS AND LIABILITIES (NET) - (2.8)%.................... (1,113,792)
-----------
NET ASSETS - 100%.............................................. $39,546,849
===========
</TABLE>
+ See Note A to Financial Statements.
* Non-Income Producing Security
ADR American Depositary Receipt
BDR British Depositary Receipt
GDR Global Depositary Receipt
(a) The cost for federal income tax purposes was $33,923,398. At April 30,
1998, net unrealized appreciation for all securities based on tax cost was
$6,737,243. This consisted of aggregate gross unrealized appreciation for
all securities of $8,022,620 and aggregate gross unrealized depreciation
for all securities of $1,285,377.
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
UAM FUNDS MJI INTERNATIONAL EQUITY PORTFOLIO
APRIL 30, 1998
- --------------------------------------------------------------------------------
At April 30, 1998 sector diversification of the Portfolio was as follows:
<TABLE>
<CAPTION>
% OF
NET
SECTOR DIVERSIFICATION (UNAUDITED) ASSETS VALUE
- ---------------------------------- ------ -----------
<S> <C> <C>
Aerospace & Defense........................................ 1.1% $ 437,733
Agriculture................................................ 4.0 1,575,766
Automotive................................................. 2.2 867,044
Banks...................................................... 14.9 5,883,685
Beverages, Food & Tobacco.................................. 1.2 485,627
Broadcasting & Publishing.................................. 1.6 649,206
Building Materials......................................... 0.9 347,393
Capital Equipment.......................................... 2.8 1,111,169
Chemicals.................................................. 1.8 698,403
Commercial Services........................................ 1.0 403,296
Computers.................................................. 2.1 818,026
Computers & Office Equipment............................... 0.2 83,186
Construction............................................... 0.4 175,458
Electronics................................................ 2.1 816,831
Energy..................................................... 2.0 769,051
Entertainment & Leisure.................................... 1.1 448,091
Financial Services......................................... 3.5 1,398,642
Insurance.................................................. 9.4 3,710,938
Machine.................................................... 1.3 514,908
Manufacturing.............................................. 1.3 517,027
Metals..................................................... 0.3 120,000
Mining..................................................... 1.1 439,594
Multi-Industry............................................. 0.9 372,332
Natural Resources.......................................... 1.2 482,075
Office Equipment........................................... 1.1 435,765
Oil & Gas.................................................. 4.4 1,739,844
Paper & Packaging.......................................... 2.7 1,062,613
Pharmaceuticals............................................ 1.2 475,779
Print & Publishing......................................... 0.8 331,858
Real Estate................................................ 1.3 492,948
Repurchase Agreement....................................... 7.2 2,851,000
Retail..................................................... 3.3 1,294,490
Services................................................... 2.0 789,575
Technology................................................. 3.4 1,328,764
Telecommunications......................................... 11.1 4,374,662
Transportation............................................. 0.4 174,876
Utilities.................................................. 5.5 2,182,986
----- -----------
Total Investments.......................................... 102.8% $40,660,641
Other Assets and Liabilities............................... (2.8) (1,113,792)
----- -----------
Net Assets................................................. 100.0% $39,546,849
===== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
UAM FUNDS MJI INTERNATIONAL EQUITY PORTFOLIO
APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
STATEMENT OF ASSETS AND LIABILITIES
ASSETS
Investments, at Cost.............................................. $33,806,872
===========
Investments, at Value............................................. $40,660,641
Cash.............................................................. 27,743
Foreign Currency (Cost $152,610).................................. 151,422
Dividends Receivable.............................................. 131,584
Receivable for Portfolio Shares Sold.............................. 42,947
Foreign Withholding Tax Reclaim Receivable........................ 18,117
Deferred Organization Costs--Note A............................... 2,683
Interest Receivable............................................... 425
Other Assets...................................................... 299
-----------
Total Assets..................................................... 41,035,861
-----------
LIABILITIES
Payable for Investments Purchased................................. 1,391,451
Payable for Investment Advisory Fees--Note B...................... 37,431
Payable for Portfolio Shares Redeemed............................. 15,315
Payable for Administrative Fees--Note C........................... 10,681
Payable for Distribution and Service Fees--Note E................. 1,298
Payable for Trustees' Fees--Note G................................ 653
Other Liabilities................................................. 32,183
-----------
Total Liabilities................................................ 1,489,012
-----------
NET ASSETS........................................................ $39,546,849
===========
NET ASSETS CONSIST OF:
Paid in Capital................................................... $32,223,942
Undistributed Net Investment Income............................... 176,583
Accumulated Net Realized Gain..................................... 290,631
Unrealized Appreciation........................................... 6,855,693
-----------
NET ASSETS........................................................ $39,546,849
===========
Institutional Class Shares
NET ASSETS........................................................ $32,295,559
===========
NET ASSET VALUE, Offering and Redemption Price Per Share 2,628,369
shares
outstanding (Unlimited authorization, no par value).............. $12.29
======
Institutional Service Class Shares
NET ASSETS........................................................ $ 7,251,290
===========
NET ASSET VALUE, Offering and Redemption Price Per Share 591,675
shares
outstanding (Unlimited authorization, no par value).............. $12.26
======
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
UAM FUNDS MJI INTERNATIONAL EQUITY PORTFOLIO
FOR THE YEAR ENDED APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
STATEMENT OF OPERATIONS
INVESTMENT INCOME
Dividends..................... $ 750,140
Interest...................... 119,169
Less Foreign Taxes Withheld... (77,886)
----------
TOTAL INCOME................. 791,423
----------
EXPENSES
Investment Advisory Fees--Note
B............................ 284,464
Administrative Fees--Note C... 128,497
Custodian Fees--Note D........ 41,594
Printing Fees................. 39,783
Account Services Fees--Note
F............................ 30,161
Filing and Registration Fees.. 24,753
Audit Fees.................... 16,130
Distribution and Service
Fees--Note E................. 15,037
Legal Fees.................... 11,421
Shareholder Servicing Fees.... 7,339
Trustees' Fees--Note G........ 2,943
Amortization of Organization
Expense--Note A.............. 1,945
Other Expenses................ 6,862
Account Services Fees Waived--
Note F....................... (27,286)
----------
Net Expenses Before Expense
Offset...................... 583,643
Expense Offset--Note A........ (1,053)
----------
Net Expenses After Expense
Offset...................... 582,590
----------
NET INVESTMENT INCOME......... 208,833
----------
NET REALIZED GAIN:
Investments.................. 1,687,896
Foreign Currency
Transactions................ 77,450
----------
TOTAL NET REALIZED GAIN ON
INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS........ 1,765,346
----------
NET CHANGE IN UNREALIZED
APPRECIATION/DEPRECIATION ON:
Investments.................. 4,787,063
Foreign Currency
Translations................ 3,482
----------
TOTAL NET CHANGE IN UNREALIZED
APPRECIATION/DEPRECIATION.... 4,790,545
----------
NET GAIN ON INVESTMENTS AND
FOREIGN CURRENCY............. 6,555,891
----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS.... $6,764,724
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
UAM FUNDS MJI INTERNATIONAL EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
YEARS ENDED APRIL 30,
1998 1997
------------ -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income............................ $ 208,833 $ 127,697
Net Realized Gain (Loss)......................... 1,765,346 (102,551)
Net Change in Unrealized
Appreciation/Depreciation....................... 4,790,545 1,537,020
------------ -----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS...................................... 6,764,724 1,562,166
------------ -----------
DISTRIBUTIONS:
Net Investment Income:
Institutional Class.............................. (108,747) (23,511)
Institutional Service Class...................... (22,024) --
Net Realized Gain:
Institutional Class.............................. (1,117,397) (203,657)
Institutional Service Class...................... (226,269) --
------------ -----------
TOTAL DISTRIBUTIONS.............................. (1,474,437) (227,168)
------------ -----------
CAPITAL SHARE TRANSACTIONS (NOTE K):
Institutional Class:
Issued........................................... 11,589,426 25,675,829
In Lieu of Cash Distributions.................... 846,389 156,098
Redeemed......................................... (13,518,209) (6,848,127)
------------ -----------
Net Increase (Decrease) from Institutional Class
Shares.......................................... (1,082,394) 18,983,800
------------ -----------
Institutional Service Class:
Issued........................................... 4,127,880 3,864,032
In Lieu of Cash Distributions.................... 248,290 --
Redeemed......................................... (1,774,985) (37,097)
------------ -----------
Net Increase from Institutional Service Class
Shares.......................................... 2,601,185 3,826,935
------------ -----------
NET INCREASE FROM CAPITAL SHARE TRANSACTIONS..... 1,518,791 22,810,735
------------ -----------
TOTAL INCREASE................................... 6,809,078 24,145,733
NET ASSETS:
Beginning of Year................................ 32,737,771 8,592,038
------------ -----------
End of Year (including undistributed net
investment income of $176,583 and $19,125,
respectively)................................... $ 39,546,849 $32,737,771
============ ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
UAM FUNDS MJI INTERNATIONAL EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS INSTITUTIONAL SERVICE CLASS
----------------------------------------- --------------------------------
YEAR
YEARS ENDED APRIL 30, SEPTEMBER 16, ENDED DECEMBER 31,
------------------------- 1994*** TO APRIL 30, 1996*** TO
1998 1997 1996 APRIL 30, 1995 1998 APRIL 30, 1997
------- ------- ------- -------------- ------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period..... $ 10.65 $ 10.27 $ 9.50 $10.00 $ 10.65 $ 10.53
------- ------- ------- ------ ------------- -------------
Income from Investment
Operations
Net Investment Income... 0.07 0.06 0.07 0.04 0.04 0.01
Net Realized and
Unrealized Gain (Loss)
on Investments......... 2.02 0.42 0.75 (0.54)++ 2.02 0.11
------- ------- ------- ------ ------------- -------------
Total from Investment
Operations............. 2.09 0.48 0.82 (0.50) 2.06 0.12
------- ------- ------- ------ ------------- -------------
Distributions:
Net Investment Income... (0.04) (0.01) -- @ -- (0.04) --
In Excess of Net
Investment Income...... -- -- (0.03) -- -- --
Net Realized Gain....... (0.41) (0.09) (0.02) -- (0.41) --
------- ------- ------- ------ ------------- -------------
Total Distributions..... (0.45) (0.10) (0.05) -- (0.45) --
------- ------- ------- ------ ------------- -------------
Net Asset Value, End of
Period.................. $ 12.29 $ 10.65 $ 10.27 $ 9.50 $ 12.26 $ 10.65
======= ======= ======= ====== ============= =============
TOTAL RETURN+............ 20.39% 4.67% 8.67% (5.00)%** 20.11% 1.14%**
======= ======= ======= ====== ============= =============
RATIOS AND SUPPLEMENTAL
DATA
Net Assets, End of Period
(Thousands)............. $32,296 $28,818 $ 8,592 $5,535 $ 7,251 $ 3,920
Ratio of Expenses to
Average Net Assets...... 1.50% 1.50% 1.45% 1.00%* 1.75% 1.76%*
Ratio of Net Investment
Income to Average Net
Assets.................. 0.60% 0.68% 0.88% 1.49%* 0.29% 0.59%*
Portfolio Turnover Rate.. 80% 47% 59% 81% 80% 47%
Average Commission
Rate#................... $0.0278 $0.0323 $0.0316 N/A $ 0.0278 $ 0.0323
Ratio of Voluntarily
Waived Fees and Expenses
Assumed by the Adviser
to Average Net Assets... 0.07% 0.53% 1.62% 5.50%* 0.06% 0.47%*
Ratio of Expenses to
Average Net Assets
Including Expense
Offsets................. 1.50% 1.50% 1.43% 1.00%* 1.75% 1.75%*
</TABLE>
* Annualized
** Not 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 a share outstanding throughout the period does not
accord with the aggregate net gains on investments for that period because
of the timing of sales and repurchases of 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.
14
<PAGE>
UAM FUNDS MJI INTERNATIONAL EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
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 April 30, 1998, the
UAM Funds were comprised of forty-four active portfolios. The financial state-
ments of the remaining portfolios are presented separately. The Portfolio is
authorized to offer two separate classes of shares--Institutional Class Shares
and Institutional Service Class Shares. Both classes of shares have identical
voting rights (except Institutional Service Class shareholders have exclusive
voting rights with respect to matters relating to distribution and shareholder
servicing of such shares), dividend, liquidation and other rights. The objec-
tive of the MJI International Equity Portfolio is to provide maximum total re-
turn, including 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. Quotations of foreign secu-
rities and other assets in a foreign currency are converted to U.S. dollar
equivalents. The converted value is based upon the bid price of the for-
eign currency against U.S. dollars quoted by any major bank or by a bro-
ker. 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 the Portfolio's intention to qualify as a
regulated investment company under Subchapter M of the Internal Revenue
15
<PAGE>
UAM FUNDS MJI INTERNATIONAL EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
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 earned or gains
realized or repatriated. The Portfolio accrues such taxes when the related
income is earned or gains are recorded.
During the year ended April 30, 1998, the Portfolio utilized capital
loss carryforwards for federal income tax purposes totaling approximately
$45,000.
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.
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the UAM Funds may transfer their daily uninvested cash bal-
ances into a joint trading account which invests in one or more repurchase
agreement. 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.
16
<PAGE>
UAM FUNDS MJI INTERNATIONAL EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
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 it was opened and the value at the
time it was closed. Risks may arise upon entering into these contracts
from the potential inability of counterparties to meet the terms of their
contracts and are generally limited to the amount of unrealized gain on
the contracts, if any, at the date of default. Risks may also arise from
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, deferred organization costs and the timing of
the recognition of gains or losses on investments.
Permanent book and tax basis differences relating to shareholder distri-
butions resulted in reclassifications of $79,396 to increase undistributed
net investment income, $77,451 to decrease accumulated net realized gains
and $1,945 to decrease paid-in capital.
Permanent book-tax differences, if any, are not included in ending un-
distributed net investment income (loss) for the purpose of calculating
net investment income (loss) per share in the financial highlights.
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
identifica-
17
<PAGE>
UAM FUNDS MJI INTERNATIONAL EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
tion method. Dividend income is recorded on the ex-dividend date, except
that certain dividends from foreign securities are recorded as soon as the
Portfolio is informed of the ex-dividend date. Interest income is recog-
nized 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. Income, expenses (other than class specific ex-
penses) and realized and unrealized gains or 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, if any, for
custodian balance credits.
B. ADVISORY SERVICES: Under the terms of an investment advisory agreement,
Murray Johnstone International Ltd., (the "Adviser"), a subsidiary of United
Asset Management Corporation ("UAM"), provides investment advisory services to
the Portfolio for a monthly fee calculated at an annual rate of 0.75% of aver-
age daily net assets for the month. 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 ef-
fect of expense offset arrangements, from exceeding 1.50% and 1.75% of average
daily net assets of the Portfolio's Institutional Class Shares and Institu-
tional Service Class Shares, 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 un-
der a Fund Administration Agreement (the "Agreement"). Pursuant to the Agree-
ment, 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 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 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 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 at an annual rate of
0.06% of average daily net assets of the Portfolio. The Administrator has en-
tered into a Mutual Funds Service Agreement with Chase Global Funds Services
Company ("CGFSC"), a corporate 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
18
<PAGE>
UAM FUNDS MJI INTERNATIONAL EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
agent services. Pursuant to the Mutual Funds Service Agreement, the Adminis-
trator pays CGFSC a monthly fee. For the year ended April 30, 1998, $105,743
was paid to CGFSC for its services.
D. CUSTODIAN: The Chase Manhattan Bank is custodian for the Portfolio's as-
sets 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
Portfolio has adopted Distribution and Service Plans (the "Plans") on behalf
of the Institutional Service Class Shares ("Service Class Shares") pursuant to
Rule 12b-1 under the Investment Company Act of 1940. Under the Plans, the
Portfolio may not incur distribution and service fees which exceed an annual
rate of 0.75% of the Service Class Shares' net assets, however, the Board has
currently limited aggregate payments under the Plans to 0.50% per annum of the
Service Class Shares' net assets. The Portfolio's Service Class Shares are not
currently making payments for distribution fees, however the Service Class
Shares do pay service fees at an annual rate of 0.25% of the average daily
value of Service Class Shares owned by clients of the Service Agents.
F. ACCOUNT SERVICES: The UAM Funds entered into an Account Services Agree-
ment (the "Services Agreement") with UAM Retirement Plan Services, Inc.
("Service Provider"), a wholly-owned subsidiary of UAM. Under the Services
Agreement, the Service Provider agrees to perform certain services for partic-
ipants in a self-directed, defined contribution plan, and for whom the Service
Provider provides participant recordkeeping. Pursuant to the Services Agree-
ment, the Service Provider is entitled to receive, after the end of each
month, a fee at the annual rate of 0.15% of the average aggregate daily net
asset value of shares of the UAM Funds in the accounts for which they provide
services. The Service Provider has voluntarily agreed to waive a portion of
its fees in order to keep the Portfolio's total annual operating expenses, af-
ter the effect of expense offset arrangements, from exceeding 1.50% and 1.75%
of average daily net assets of the Portfolio's Institutional Class Shares and
Institutional Service Class Shares, respectively.
G. 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, plus a quarterly retainer of $150 for each
active portfolio of the UAM Funds and reimbursement of expenses incurred in
attending Trustee meetings.
H. PURCHASES AND SALES: For the year ended April 30, 1998, the Portfolio
made purchases of $28,493,073 and sales of $28,605,663 of investment securi-
ties
19
<PAGE>
UAM FUNDS MJI INTERNATIONAL EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
other than long-term U.S. Government and short-term securities. There were no
purchases or sales of long-term U.S. Government securities.
I. 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 0.50%. In addition, a
commitment fee of 0.08% per annum, payable at the end of each calendar quar-
ter, is accrued by each participating Portfolio based on its average daily un-
used portion of the line of credit. During the year ended April 30, 1998, the
Portfolio had no borrowings under the agreement.
J. OTHER: At April 30, 1998, 81% and 74% of total shares outstanding were
held by 4 and 3 record shareholders of the Institutional Class Shares and the
Institutional Service Class Shares, respectively, owning more than 10% of the
aggregate total shares outstanding.
At April 30, 1998, the net assets of the Portfolio were substantially com-
prised of foreign denominated securities and currency. Changes in currency ex-
change rates will affect the value of and investment income from such securi-
ties 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.
K. CAPITAL SHARE TRANSACTIONS: Transactions in capital shares for the Port-
folios, by class, were as follows:
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS INSTITUTIONAL SERVICE
SHARES CLASS SHARES
----------------------------- -----------------------------
YEAR YEAR YEAR DECEMBER 31,
ENDED ENDED ENDED 1996* TO
APRIL 30, 1998 APRIL 30, 1997 APRIL 30, 1998 APRIL 30, 1997
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Shares Issued........... 997,759 2,516,858 351,711 371,710
In Lieu of Cash
Distributions......... 81,227 15,170 23,874 --
Shares Redeemed......... (1,155,750) (663,721) (152,109) (3,511)
---------- --------- -------- -------
Net Increase (Decrease)
from Capital Share
Transactions.......... (76,764) 1,868,307 223,476 368,199
========== ========= ======== =======
</TABLE>
- -----------
* Commencement of Operations
20
<PAGE>
UAM FUNDS MJI INTERNATIONAL EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of
UAM Funds Trust and Shareholders of
MJI International Equity Portfolio
In our opinion, the accompanying statement of assets and liabilities, includ-
ing the portfolio of investments, and the related statements of operations and
of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the MJI International Equity
Portfolio (the "Portfolio"), a portfolio of the UAM Funds Trust, at April 30,
1998, and the results of its operations, the changes in its net assets and the
financial highlights for the periods indicated, 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 audits. We conducted our audits of
these financial statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain 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
audits, which included confirmation of securities at April 30, 1998 by corre-
spondence with the custodian and the application of alternative auditing pro-
cedures where securities purchased were not received by the custodian, provide
a reasonable basis for the opinion expressed above.
Price Waterhouse LLP
Boston Massachusetts
June 3, 1998
- -------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION (UNAUDITED):
Foreign taxes during the fiscal year ended April 30, 1998 amounting to approx-
imately $78,000 are expected to be passed through to the shareholders as 100%
allowable foreign tax credits on Form 1099-DIV for the year ending December
31, 1998 which shareholders of this Portfolio will receive in late January,
1999.
MJI International Equity Portfolio hereby designates approximately $445,000
and $245,000 at 20% and 28%, respectively, as a long-term capital gain divi-
dend for the purpose of the dividend paid deduction on its federal income tax
return.
For the fiscal year ended April 30, 1998, gross income derived from sources
within foreign countries amounted to approximately $750,000 for the Portfolio.
21
<PAGE>
UAM FUNDS MJI INTERNATIONAL 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 Karl O. Hartmann
Trustee Assistant Secretary
Philip D. English Gary L. French
Trustee Treasurer
William A. Humenuk Robert R. Flaherty
Trustee Assistant Treasurer
Charles H. Salisbury, Jr. Gordon M. Shone
Trustee and Executive Vice President Assistant Treasurer
Peter M. Whitman, Jr.
Trustee
- --------------------------------------------------------------------------------
INVESTMENT ADVISER
Murray Johnstone International Ltd.
John Hancock Center, Suite 3640
875 North Michigan Avenue
Chicago, IL 60611
ADMINISTRATOR
UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110
CUSTODIAN
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, NY 11245
LEGAL COUNSEL
Drinker, Biddle & Reath LLP
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, PA 19107-3496
INDEPENDENT ACCOUNTANTS --------------------------------------
Price Waterhouse LLP This report has been prepared for
160 Federal Street shareholders and may be distributed
Boston, MA 02110 to others only if preceded or
accompanied by a current prospectus.
DISTRIBUTOR --------------------------------------
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
<PAGE>
UAM Funds
Annual Report
- -------------------------------
Hanson Equity Portfolio
- -------------------------------
April 30, 1998
UAM
<PAGE>
UAM FUND HANSON EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
April 30, 1998
Dear Fellow Shareholders:
It is our pleasure to present to you the Annual Shareholder Report for the
Hanson Equity Portfolio ("the Portfolio"). The Portfolio was launched on Octo-
ber 3, 1997 and had net assets of $25.7 million at April 30, 1998.
PERFORMANCE RESULTS AND OVERVIEW
The Hanson Equity Portfolio posted a 13.91% return for the fourth quarter and
a 14.03% return for the four months ending April 30, 1998. This compares well
to the S&P 500 that generated returns of 13.85% and 15.11% for the same peri-
ods respectively. The Portfolio's performance since inception is 13.80% com-
pared to 16.76% for the S&P 500.
Sectors of the Portfolio that contributed positive results relative to the S&P
500 for the year-to-date period include energy and insurance. In the energy
sector, the Portfolio's investments in companies that have the ability to grow
earnings and cash flows despite low energy prices have propelled the perfor-
mance. In particular, Enron and British Petroleum continue to grow earnings
despite a tough price environment for energy. Increased merger activity,
globalization of business lines and low nominal interest rates continue to
drive asset prices higher in the financial sector. Stellar performers from the
Portfolio include AFLAC and American International Group, both of whom have
benefited from low interest rates and growing demand for their services.
The Portfolio's under-performance for the inception-to-date period can be
traced to the fourth quarter of 1997 and the turmoil in Asia. The economic and
fiscal crisis in Asia negatively impacted the capital goods and the technology
stocks held in the Portfolio. Investors quickly anticipated the worst for Asia
and feared a global economic slowdown would have an adverse impact on the de-
mand for many goods including: computers, industrial machinery, airplanes and
oil. While we have witnessed a slowdown in Asia, the other world economies
have helped support the continued growth in corporate earnings in the first
quarter of 1998. We still expect select technology stocks and the oil service
sector to significantly outperform the overall market over the long term. The
continuation of low oil prices continues to drive merger activity in the en-
ergy sector, where both service companies and exploration companies are com-
bining to reduce expenses and increase cash flows.
STRATEGY AND INVESTMENT STYLE
Hanson Investment Management will celebrate its 25th anniversary in 1998 and
has established a long track record of out-performance versus the S&P 500. Al-
though the Portfolio has only been in existence for seven months, it is our
goal through strict adherence to our investment philosophy and process to gen-
erate positive future results versus the S&P 500.
1
<PAGE>
UAM FUND HANSON EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
Hanson's investment philosophy consists of investing in a concentrated portfo-
lio of no more than 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 continu-
ously over the 25-year history of the firm.
Hanson's investment style can best be characterized as large capitalization,
conservative growth or "growth-at-a-reasonable-price". Hanson will however,
invest in companies of smaller capitalization if all other criteria are met.
EQUITY MARKET OVERVIEW AND THE 1998 OUTLOOK
At the beginning of the year there was great concern that the financial crisis
in Asia might disrupt our unprecedented economic expansion. However, the first
quarter passed without any significant economic displacement. Though certain
economic measures reflect weakness from Asia, mitigating the negative impact
have been lower interest rates and broad based domestic economic strength,
which have positively impacted retail, housing, and construction activity.
While turmoil in Asia, the former Soviet Republics and other regions will con-
tinue to create volatile markets abroad during the remainder of 1998, we see
little chance of an extended downturn in domestic economic strength or asset
prices.
Tight labor markets continue to put upward pressure on wage prices and may
eventually ignite inflation. However, a strong U.S. dollar, lower producer
prices, and weaker commodity prices (particularly oil) ease the inflationary
pressure of tight labor markets. As a result, inflation (ex asset prices)
should remain relatively benign and interest rates low, offering a continua-
tion of the ripe environment for economic growth and stock market strength.
It is said that the stock market "climbs a wall of worry". Such was the case
in the first part of 1998, as Asia, deflation, inflation, flat corporate earn-
ings, and interest rates, all provided the worries over which the stock market
climbed. After some trepidation in January and early February, investors
poured money into equity mutual funds as never before, driving the Dow and S&P
500 indexes to all-time highs.
The challenge to sustaining such stock market strength will be for corporate
America to deliver upon earnings expectations as well as investors willingness
to discount these earnings further into the future. Most would agree that
keeping up the pace of recent earnings growth will be quite difficult. Howev-
er, low inflation and interest rates, combined with a substantial and steady
stream of retirement money
2
<PAGE>
UAM FUND HANSON EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
into the equity markets, may cause stock valuations to hold until corporate
profits can again move upward.
The above comments notwithstanding, our investment focus is not on the economy
or the broad markets. Rather, we focus on our companies and their ability to
generate consistent and dependable earnings growth over the long-term, irre-
spective of economic conditions. In this regard, we have great confidence in
our portfolio companies and their future prospects. However, given the unprec-
edented valuation of the market in general, we observe with caution the abso-
lute and relative valuations of our companies in particular.
MISCELLANEOUS
Investment Strategies and Techniques with Respect to Derivatives: Hanson does
not employ the use of any derivatives in the management of our investment
portfolios.
Marketing Plans: Our marketing plan for this mutual fund includes both direct
marketing to our existing client base, as well as the channels of distribution
offered by UAM.
Soft Dollar Arrangements: Hanson uses "soft dollars" to pay for investment re-
lated services such as research and portfolio management software. Various
brokerage firms are used for these purposes including, Jeffries, Autranet,
Goldman Sachs, Paine Webber and Merrill Lynch.
Percentage of Business Represented by the Hanson Equity Portfolio: On an
annualized basis the gross revenue derived from Hanson's management of the
fund comprise approximately 2.4% of all investment management fees generated
by Hanson.
Please do not hesitate to call with any questions regarding the information
contained in this letter.
Sincerely,
/s/ David E. Post
- --------------------
David E. Post
President
The investment results presented in the Adviser's letter represent past per-
formance 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 be-
half 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.
3
<PAGE>
COMPARISON OF CHANGE IN VALUE OF $10,000 PURCHASE IN THE
HANSON EQUITY PORTFOLIO AND THE
STANDARD & POOR'S 500 INDEX (S&P 500)
- -----------------------------------------------------
CUMULATIVE TOTAL RETURN
FOR PERIOD ENDED APRIL 30, 1998
- -----------------------------------------------------
SINCE 10/3/97*
- -----------------------------------------------------
13.80%
- -----------------------------------------------------
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Measurement Period HANSON S&P 500
(Fiscal Year Covered) EQUITY INDEX
- --------------------- ---------- -------
<S> <C> <C>
Measurement Pt-10/03/97 $10000 $10000
FYE 04/30/98 11380 11676
</TABLE>
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate. When shares are redeemed, they may
be worth more or less than the original cost.
* Commencement of Operations
+ The comparative index is not adjusted to reflect expenses or other fees that
the SEC requires to be reflected in the Portfolio's performance. The fees,
if reflected, would reduce the performance quoted. The Portfolio's
performance assumes the reinvestment of all dividends and distributions. The
comparative index has been adjusted to reflect reinvestment of dividends on
securities in the index.
Definition of the Comparative Index
The 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
APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 96.7%
SHARES VALUE+
-------- -----------
<S> <C> <C>
AEROSPACE & DEFENSE - 5.0%
AlliedSignal, Inc. ...................................... 16,700 $ 731,669
Lockheed Martin Corp. ................................... 5,000 556,875
-----------
1,288,544
-----------
AUTOMOTIVE - 2.9%
*Lear Corp. ............................................. 14,100 755,231
-----------
BANKS - 3.2%
Wells Fargo & Co. ....................................... 2,200 810,700
-----------
BEVERAGES, FOOD & TOBACCO - 1.6%
ConAgra, Inc. ........................................... 13,900 405,706
-----------
CAPITAL EQUIPMENT - 2.8%
Deere & Co. ............................................. 12,400 724,625
-----------
COMPUTERS - 9.2%
Hewlett-Packard Co. ..................................... 12,300 926,344
Intel Corp. ............................................. 10,000 808,125
International Business Machines Corp. ................... 5,300 614,137
-----------
2,348,606
-----------
CONSTRUCTION - 5.8%
*American Standard Companies, Inc. ...................... 17,000 827,687
Clayton Homes, Inc. ..................................... 32,300 648,019
-----------
1,475,706
-----------
CONSUMER STAPLES - 4.7%
Colgate-Palmolive Co. ................................... 7,000 627,813
Kimberly-Clark Corp. .................................... 11,500 583,625
-----------
1,211,438
-----------
ELECTRONICS - 6.0%
Rockwell International Corp. ............................ 12,500 699,219
*Solectron Corp. ........................................ 19,000 841,937
-----------
1,541,156
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
UAM FUNDS HANSON EQUITY PORTFOLIO
APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCKS - CONTINUED
SHARES VALUE+
------ ----------
<S> <C> <C>
ENERGY - 11.0%
British Petroleum Co. plc ADR............................... 8,000 $ 756,000
Enron Corp. ................................................ 15,000 737,813
ENSCO International, Inc. .................................. 19,500 550,875
Transocean Offshore Inc. ................................... 14,000 782,250
----------
2,826,938
----------
ENTERTAINMENT & LEISURE TIME - 3.1%
Carnival Corp., Class A..................................... 11,500 799,969
----------
FINANCIAL SERVICES - 5.6%
Fannie Mae.................................................. 12,400 742,450
Franklin Resources, Inc. ................................... 13,000 695,500
----------
1,437,950
----------
HOME FURNISHINGS & APPLIANCES - 3.2%
Newell Co. ................................................. 17,000 821,312
----------
INDUSTRIAL - 2.5%
Dover Corp. ................................................ 16,500 651,750
----------
INSURANCE - 5.9%
AFLAC Inc. ................................................. 11,500 747,500
American International Group, Inc. ......................... 5,800 763,063
----------
1,510,563
----------
MANUFACTURING - 3.0%
General Electric Co. ....................................... 9,000 766,125
----------
MULTI-INDUSTRY - 2.8%
Raychem Corp. .............................................. 18,000 723,375
----------
PHARMACEUTICALS - 2.6%
Johnson & Johnson........................................... 9,500 678,062
----------
RETAIL - 3.9%
Walgreen Co. ............................................... 7,000 241,500
Wal-Mart Stores, Inc. ...................................... 15,000 758,438
----------
999,938
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
UAM FUNDS HANSON EQUITY PORTFOLIO
APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCKS - CONTINUED
SHARES VALUE+
---------- ------------
<S> <C> <C>
SERVICES - 5.8%
Manpower, Inc. ....................................... 17,000 $ 749,062
Omnicom Group Inc. ................................... 15,800 748,525
------------
1,497,587
------------
TELECOMMUNICATIONS - 3.3%
*AirTouch Communications, Inc. ....................... 16,000 850,000
------------
TRANSPORTATION - 2.8%
Burlington Northern Santa Fe.......................... 7,350 727,650
------------
TOTAL COMMON STOCKS (Cost $22,174,488)........................... 24,852,931
------------
</TABLE>
<TABLE>
<CAPTION>
SHORT-TERM INVESTMENT - 3.8%
FACE
AMOUNT
--------
<S> <C> <C>
REPURCHASE AGREEMENT
Chase Securities, Inc. 5.37%, dated 4/30/98, due
5/01/98, to be repurchased at $965,144,
collateralized by $841,397 of various U.S. Treasury
Obligations, 5.50%-14.00%, due 5/15/04-11/15/27,
valued at $975,967 (Cost $965,000).................. $965,000 965,000
-----------
TOTAL INVESTMENTS - 100.5% (Cost $23,139,488) (a)............. 25,817,931
-----------
OTHER ASSETS AND LIABILITIES (NET) - (0.5)% (128,117)
-----------
NET ASSETS -- 100%............................................ $25,689,814
===========
</TABLE>
+ See Note A to Financial Statements.
* Non-Income Producing Security
ADR American Depositary Receipt
(a) The cost for federal income tax purposes was $23,139,488. At April 30,
1998, net unrealized appreciation for all securities based on tax cost was
$2,678,443. This consisted of aggregate gross unrealized appreciation for
all securities of $2,848,636 and aggregate gross unrealized depreciation
for all securities of $170,193.
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
UAM FUNDS HANSON EQUITY PORTFOLIO
APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
STATEMENT OF ASSETS AND LIABILITIES
ASSETS
Investments, at Cost............................................. $23,139,488
===========
Investments, at Value............................................ $25,817,931
Cash............................................................. 879
Dividends and Interest Receivable................................ 16,638
Receivable for Portfolio Shares Sold............................. 11,718
-----------
Total Assets.................................................... 25,847,166
-----------
LIABILITIES
Payable for Investments Purchased................................ 104,538
Payable for Investment Advisory Fees--Note B..................... 10,791
Payable for Portfolio Shares Redeemed............................ 9,876
Payable for Administrative Fees--Note C.......................... 4,643
Payable for Trustees' Fees--Note F............................... 628
Other Liabilities................................................ 26,876
-----------
Total Liabilities............................................... 157,352
-----------
NET ASSETS....................................................... $25,689,814
===========
NET ASSETS CONSIST OF:
Paid in Capital.................................................. $22,886,905
Accumulated Net Realized Gain.................................... 124,466
Unrealized Appreciation.......................................... 2,678,443
-----------
NET ASSETS....................................................... $25,689,814
===========
INSTITUTIONAL CLASS SHARES
Shares Issued and Outstanding (Unlimited authorization, no par
value).......................................................... 2,257,986
Net Asset Value, Offering and Redemption Price Per Share......... $11.38
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
UAM FUNDS HANSON EQUITY PORTFOLIO
FOR THE PERIOD
OCTOBER 3, 1997*
TO APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
STATEMENT OF OPERATIONS
INVESTMENT INCOME
Dividends......................................................... $ 110,927
Interest.......................................................... 33,551
----------
TOTAL INCOME..................................................... 144,478
----------
EXPENSES
Investment Advisory Fees--Note B.................................. 83,786
Filing and Registration Fees...................................... 22,608
Administrative Fees--Note C....................................... 22,082
Printing Fees..................................................... 18,529
Shareholder Servicing Fees........................................ 17,601
Audit Fees........................................................ 15,000
Trustees' Fees--Note F............................................ 1,960
Custodian Fees--Note D............................................ 1,811
Legal Fees........................................................ 1,121
Other Expenses.................................................... 2,086
----------
Net Expenses Before Expense Offset............................... 186,584
Expense Offset--Note A............................................ (115)
----------
Net Expenses After Expense Offset................................ 186,469
----------
NET INVESTMENT LOSS............................................... (41,991)
----------
NET REALIZED GAIN ON INVESTMENTS.................................. 166,457
NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION OF
INVESTMENTS...................................................... 2,678,443
----------
NET GAIN ON INVESTMENTS........................................... 2,844,900
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.............. $2,802,909
==========
</TABLE>
*Commencement of Operations
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
UAM FUNDS HANSON EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
OCTOBER 3,
1997* TO
APRIL 30,
1998
-----------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Loss............................................. $ (41,991)
Net Realized Gain............................................... 166,457
Net Change in Unrealized Appreciation/Depreciation.............. 2,678,443
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............ 2,802,909
-----------
CAPITAL SHARE TRANSACTIONS: (1)
Issued.......................................................... 23,828,465
Redeemed........................................................ (941,560)
-----------
NET INCREASE FROM CAPITAL SHARE TRANSACTIONS.................... 22,886,905
-----------
TOTAL INCREASE.................................................. 25,689,814
NET ASSETS:
Beginning of Period............................................. --
-----------
End of Period................................................... $25,689,814
===========
(1) SHARES ISSUED AND REDEEMED:
Shares Issued................................................... 2,346,914
Shares Redeemed................................................. (88,928)
-----------
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
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
OCTOBER 3,
1997* TO
APRIL 30,
1998
----------
<S> <C>
Net Asset Value, Beginning of Period............................ $ 10.00
-------
Income From Investment Operations
Net Investment Loss............................................ (0.02)
Net Realized and Unrealized Gain on Investments................ 1.40
-------
Total from Investment Operations............................... 1.38
-------
Net Asset Value, End of Period.................................. $ 11.38
=======
TOTAL RETURN.................................................... 13.80 %***
=======
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands)........................... $25,690
Ratio of Expenses to Average Net Assets......................... 1.56 %**
Ratio of Net Investment Loss to Average Net Assets.............. (0.35)%**
Portfolio Turnover Rate......................................... 11 %
Average Commission Rate......................................... $0.0598
Ratio of Expenses to Average Net Assets Including Expense
Offsets........................................................ 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
UAM Funds Trust and UAM Funds, Inc. (collectively the "UAM Funds") are reg-
istered under the Investment Company Act of 1940, as amended. The Hanson Eq-
uity Portfolio (the "Portfolio"), a portfolio of UAM Funds Trust, is a diver-
sified, open-end management investment company. At April 30, 1998, the UAM
Funds were comprised of forty-four 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, consis-
tent with reasonable risk to principal, by investing in a diversified portfo-
lio of equity securities, primarily the common stock of large, U.S.-based com-
panies 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: 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
12
<PAGE>
UAM FUNDS HANSON EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
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 satisfac-
tion 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 UAM Funds may transfer their daily uninvested cash bal-
ances into a joint trading account which invests in one or more repurchase
agreement. 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 resulted in reclassifications of $41,991 to increase undistributed
net investment income and $41,991 to decrease accumulated net realized
gain.
Permanent book-tax differences, if any, are not included in ending un-
distributed 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. Ex-
penses which cannot be directly attributed are apportioned among the port-
folios of the UAM Funds based on their relative net assets. Custodian fees
for the Portfolio have been increased to include 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 subsidi-
ary of United Asset Management Corporation ("UAM"), provides investment advi-
sory services to the Portfolio for a monthly 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. 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 un-
der a Fund Administration Agreement (the "Agreement"). Pursuant to the Agree-
ment, 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 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 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 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 at an annual rate of
0.04% of average daily net assets of the Portfolio. The Administrator has en-
tered into a Mutual Funds Service Agreement with Chase Global Funds Services
Company ("CGFSC"), a corporate 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 October 3, 1997 (commencement of opera-
tions) to April 30, 1998, $17,295 was paid to CGFSC for its services.
D. CUSTODIAN: The Chase Manhattan Bank is custodian for the Portfolio's as-
sets 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, 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, and reimbursement of expenses incurred in
attending Trustee meetings.
G. PURCHASES AND SALES: For the period October 3, 1997 (commencement of op-
erations) to April 30, 1998, the Portfolio made purchases of $24,244,636 and
sales of $2,236,605 of investment securities other than long-term U.S. Govern-
ment and short-term securities. There were no purchases or sales of long-term
U.S. Government securities.
14
<PAGE>
UAM FUNDS HANSON EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
H. OTHER: At April 30, 1998, 100% of total shares outstanding were held by
one record shareholder.
15
<PAGE>
UAM FUNDS HANSON EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of
UAM Funds Trust and Shareholders of
Hanson Equity Portfolio
In our opinion, the accompanying statement of assets and liabilities, includ-
ing the portfolio of investments, and the related statement of operations and
of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the Hanson Equity Portfolio (the
"Portfolio"), a portfolio of the UAM Funds Trust, at April 30, 1998, and the
results of its operations, the changes in its net assets and the financial
highlights for the period indicated, in conformity with generally accepted ac-
counting principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of
the Portfolio's management; our responsibility is to express an opinion on
these financial statements based on our audit. We conducted our audit of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assur-
ance 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 princi-
ples used and significant estimates made by management, and evaluating the
overall financial statement presentation. We believe that our audit, which in-
cluded confirmation of securities at April 30, 1998 by correspondence with the
custodian and the application of alternative auditing procedures where securi-
ties purchased were not received by the custodian, provides a reasonable basis
for the opinion expressed above.
Price Waterhouse LLP
Boston, Massachusetts
June 3, 1998
- -------------------------------------------------------------------------------
FEDERAL TAX INFORMATION (UNAUDITED):
For the year ended April 30, 1998, the percentage of investment company tax-
able income that qualifies for the 70% dividend received deduction for corpo-
rate shareholders is 82.84% for Hanson Equity Portfolio.
16
<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 Karl O. Hartmann
Trustee Assistant Secretary
Philip D. English Gary L. French
Trustee Treasurer
William A. Humenuk Robert R. Flaherty
Trustee Assistant Treasurer
Charles H. Salisbury, Jr. Gordon M. Shone
Trustee and Executive Vice President Assistant Treasurer
Peter M. Whitman, Jr.
Trustee
================================================================================
Investment Adviser
Hanson Investment Management Company
400 Civic Center Drive
Suite 200
San Rafael, CA 94903
Administrator
UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110
Custodian
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, NY 11245
Legal Counsel
Drinker, Biddle & Reath LLP
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, PA 19107-3496
Independent Accountants ------------------------------------
Price Waterhouse LLP This report has been prepared for
160 Federal Street shareholders and may be distributed
Boston, MA 02110 to others only if preceded or
accompanied by a current prospectus.
Distributor ------------------------------------
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
<PAGE>
UAM Funds
Annual Report
Jacobs International
Octagon Portfolio
- --------------------------------------------------------------------------------
April 30, 1998
UAM
- --------------------------------------------------------------------------------
<PAGE>
UAM FUNDS JACOBS INTERNATIONAL OCTAGON PORTFOLIO
- -------------------------------------------------------------------------------
April 30, 1998 Review
To the Shareholders:
For the twelve months ended April 30, 1998, the total return of the Jacobs In-
ternational Octagon Portfolio was 19.19% compared to 19.23% for the MSCI EAFE
Index.
International equity investors fared much better in Europe than in Asia and
other markets. Our bottom up stock picking approach produced a portfolio at
year end which was approximately 51.5% invested in Developed Europe and the
UK, 17.6% in Asia & Australia, 11.8% in Latin America, and 7.7% in Emerging
Europe and the Middle East. Our top five country exposures were in France
(16.1%), the United Kingdom (9.2%), Sweden (7.0%), the Netherlands (4.9%) and
Mexico (4.8%). The Asian currency turmoil has had a negative impact on our
Asian stocks while other emerging markets including Latin America have been
vulnerable to the Asian crisis as well. On the other hand, healthy corporate
profitability and a favorable macro environment in Europe have led to strong
gains in European stock markets. Euro rate convergence and expectations of ac-
celerating corporate earnings momentum have fueled powerful rallies in the Eu-
ropean stock markets. The European corporate sector is experiencing improved
profit margins helped by widespread restructuring begun a few years ago in
preparation for European economic and monetary union. In the European portfo-
lio we have been emphasizing sectors such as defense, financials, and autos
and auto components, where we see significant further potential for consolida-
tion and cost cutting as companies prepare themselves for a more transparent
and competitive market post EMU. Recent additions to the portfolio which are
consistent with the above theme of consolidation and cost cutting include;
Thomson CSF and Celsius in the defense sector, Christiania Bank and Den Norske
Bank in the financials sector and Renault and Plastic Omnium in the autos and
auto components sector.
Looking forward, we remain cautious on the near term outlook for Asian equi-
ties. Signs of a real turnaround in Asia are few and questionable. The much
needed policy reforms and financial restructuring to help pave the way for
more stable currencies and declining interest rates is slowly starting to take
place in some countries while social unrest and instability is growing in
countries such as Indonesia. We continue to see weak fundamentals in Japan and
inadequate efforts by the Japanese government to stimulate domestic demand.
Meanwhile, the Chinese authorities have become even more proactive in address-
ing their economic slowdown. Despite this difficult environment in which we
expect the work-out and recovery process will be an extended one, we continue
our search for value and future winners.
1
<PAGE>
UAM FUNDS JACOBS INTERNATIONAL OCTAGON PORTFOLIO
- -------------------------------------------------------------------------------
We are more upbeat on European growth prospects and believe that better value
exists in the small caps, which have lagged behind the big caps.
Thank you for selecting the Jacobs International Octagon Portfolio.
Sincerely,
/s/ Daniel L. Jacobs
Daniel L. Jacobs, CFA
President
Jacobs Asset Management
The investment results presented in the Adviser's letter represent past per-
formance 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 be-
half of the Portfolio, total return for the Portfolio would have been lower.
The investment return and principal value of an investment will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than their
original cost. For a complete discussion of the risks associated with interna-
tional investing, please refer to the Portfolio's Prospectus.
2
<PAGE>
Performance Comparison
================================================================================
COMPARISON OF CHANGE IN VALUE OF $10,000 PURCHASE
IN THE JACOBS INTERNATIONAL OCTAGON PORTFOLIO AND THE
MORGAN STANLEY CAPITAL INTERNATIONAL EAFE INDEX
- -------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN**
FOR PERIOD ENDED APRIL 30, 1998
- -------------------------------------------------------
1 YEAR SINCE 01/02/97*++
- -------------------------------------------------------
19.19% 15.62%
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Measurement Period JACOBS MORGAN
(Fiscal Year Covered) INTERNATIONAL STANLEY
- ------------------- ------------- ---------
<S> <C> <C>
Measurement Pt-1/2/97 $10000 $10000
FYE 4/30/97 $10170 $ 9896
FYE 4/30/98 $12122 $11799
</TABLE>
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate. When shares are redeemed, they may
be worth more or less than the original cost.
* Commencement of Operations
** Total return of the Portfolio reflects fees waived and expenses assumed by
the Adviser. Without such reduction of expenses, total return would be
lower.
+ The comparative index is not adjusted to reflect expenses or other fees that
the SEC requires to be reflected in the Portfolio's performance. The fees,
if reflected, would reduce the performance quoted. The Portfolio's
performance assumes the reinvestment of all dividends and distributions. The
comparative index has been adjusted to reflect reinvestment of dividends on
securities in the index.
++ For comparative purposes, the value of the Morgan Stanley Capital
International EAFE Index on 12/31/96 is used as the beginning value on
01/02/97.
Definition of the Comparative Index
The Morgan Stanley Capital International EAFE Index is an unmanaged index
composed of arithmetic, market value weighted averages of the performance of
over 900 securities listed on the stock exchanges of countries in Europe,
Australia and the Far East.
Please note that one cannot invest in an unmanaged index.
3
<PAGE>
UAM FUND JACOBS INTERNATIONAL OCTAGON PORTFOLIO
APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 83.8%
SHARES VALUE+
---------- ------------
<S> <C> <C>
ARGENTINA - 1.4%
Central Costanera S.A., Class B..................... 64,300 $ 215,439
Transportadora de Gas del Sur S.A. ADR.............. 13,800 159,563
YPF S.A. ADR........................................ 33,500 1,168,312
------------
1,543,314
------------
AUSTRALIA - 1.6%
Colonial Ltd. ...................................... 504,000 1,774,486
------------
BRAZIL - 3.0%
#*Bompreco S.A. GDR................................. 19,512 370,728
*Bompreco S.A. GDR.................................. 3,900 74,100
#CELESC ADR, Class B................................ 500 59,000
#CELESC GDR......................................... 600 69,230
COELBA.............................................. 10,080,000 568,570
Companhia Brasileira de Distribuicao Grupo Pao de
Acucar ADR......................................... 1,100 29,287
Copel ADR........................................... 15,500 178,842
Telebras............................................ 2,810,000 278,911
Telebras ADR........................................ 1,400 170,538
*Telepar............................................ 870,000 315,741
Telesp S.A.......................................... 4,000,000 1,044,163
#USIMINAS S.A. ADR.................................. 40,000 276,216
------------
3,435,326
------------
CHILE - 0.9%
*Supermercados Unimarc S.A. ADR..................... 67,100 725,519
Telex-Chile S.A. ADR................................ 133,000 274,312
------------
999,831
------------
CHINA - 0.7%
Guangdong Kelon Electrical Holdings Co., Ltd. Class
H.................................................. 449,000 460,855
Shandong Huaneng Power Co., Ltd. ADR................ 44,700 324,075
------------
784,930
------------
CZECH REPUBLIC - 0.3%
*SPT Telecom A.S.................................... 2,500 364,017
------------
DENMARK - 4.1%
Alm. Brand A/S Class B (Registered)................. 40,640 1,379,038
*Olicom A/S......................................... 30,600 940,950
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
UAM FUNDS JACOBS INTERNATIONAL OCTAGON PORTFOLIO
APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCKS - CONTINUED
SHARES VALUE+
--------- ------------
<S> <C> <C>
DENMARK - CONTINUED
Sydbank A/S (Registered).............................. 23,990 $ 1,340,380
Unidanmark A/S, Class A (Registered).................. 11,907 1,001,393
------------
4,661,761
------------
FINLAND - 2.1%
Enso Oy............................................... 99,241 1,058,434
Valmet Oy............................................. 80,000 1,328,381
------------
2,386,815
------------
FRANCE - 16.1%
Assurances Generales de France........................ 24,160 1,527,333
*Bull S.A............................................. 126,176 1,686,615
Compagnie Financiere de Paribas....................... 19,459 2,071,828
Compagnie Plastic-Omnium S.A. ........................ 12,472 1,645,366
Lafarge S.A........................................... 3,200 302,379
Lagardere S.C.A. (Registered)......................... 40,000 1,530,527
Natexis............................................... 22,900 1,656,450
*Renault S.A.......................................... 39,666 1,841,094
Scor.................................................. 22,726 1,401,897
Sylea................................................. 10,410 943,844
Thomson CSF........................................... 39,015 1,544,763
Union des Assurances Federales........................ 12,688 1,986,260
------------
18,138,356
------------
GERMANY - 1.6%
Volkswagen AG......................................... 2,257 1,801,950
------------
GREECE - 2.5%
Hellenic Telecommunication Organization S.A. ......... 56,600 1,621,673
Sarantis S.A. ........................................ 77,377 1,204,551
------------
2,826,224
------------
HONG KONG - 4.6%
CLP Holdings Ltd. .................................... 129,500 621,961
Cheung Kong Holdings, Ltd............................. 208,000 1,382,996
International Bank of Asia............................ 2,380,871 676,253
JCG Holdings Ltd...................................... 628,000 287,832
Li & Fung Ltd. ....................................... 326,000 547,156
National Mutual Asia Ltd.............................. 1,252,000 1,002,182
Smartone Telecommunications........................... 202,000 530,721
Tingyi Holding Co..................................... 1,070,000 104,990
------------
5,154,091
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
UAM FUNDS JACOBS INTERNATIONAL OCTAGON PORTFOLIO
APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCKS - CONTINUED
SHARES VALUE+
--------- ------------
<S> <C> <C>
INDONESIA - 0.6%
Bank Nisp (Foreign)................................... 1,456,100 $ 128,210
Bimantara Citra (Foreign)............................. 168,000 20,076
Indosat ADR........................................... 37,600 531,100
PT Bank Tiara Asia (Foreign).......................... 319,500 6,028
------------
685,414
------------
IRELAND - 1.0%
Irish Life plc (New).................................. 6,700 62,223
Irish Life plc........................................ 114,180 1,067,167
------------
1,129,390
------------
ISRAEL - 2.4%
Bank Hapoalim, Ltd.................................... 385,000 1,033,788
ECI Telecommunications Ltd............................ 54,800 1,671,400
------------
2,705,188
------------
JAPAN - 4.2%
Fuji Photo Film Co.................................... 34,000 1,211,896
Hitachi, Ltd.......................................... 99,000 710,996
Laox.................................................. 40,000 278,493
Marukyo............................................... 31,000 178,296
Matsumotokiyoshi...................................... 14,500 501,476
Nintendo Corp., Ltd................................... 600 55,123
Paris Miki, Inc. ..................................... 3,600 58,029
Sony Corp............................................. 15,000 1,249,811
Sony Corp. ADR........................................ 6,400 543,600
------------
4,787,720
------------
KOREA - 0.2%
#Housing & Commercial Bank GDR........................ 36,528 228,300
------------
MEXICO - 4.8%
*Banacci, Class B..................................... 217,900 679,092
*Empaques Ponderosa S.A., Class B..................... 1,145,800 904,544
Fomento Economico Mexicano S.A. de C.V., Class B...... 79,000 584,565
*Grupo Financiero Banorte S.A., Class B............... 496,000 800,660
*Grupo Industrial Camesa S.A.......................... 1,031,200 534,615
#Hylsamex ADR......................................... 39,000 1,080,483
*Industrias CH, S.A., Series B........................ 151,000 745,481
Sistema Argos S.A., Class B........................... 128,200 146,221
------------
5,475,661
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
UAM FUNDS JACOBS INTERNATIONAL OCTAGON PORTFOLIO
APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCKS - CONTINUED
SHARES VALUE+
--------- ------------
<S> <C> <C>
NETHERLANDS - 4.9%
Akzo Nobel N.V........................................ 6,260 $ 1,274,450
Akzo Nobel N.V. ADR................................... 11,100 1,143,300
Apothekers Cooperatie OPG............................. 6,700 207,425
Polynorm N.V.......................................... 11,785 1,260,928
Royal Philips Electronics N.V.-- New York Shares...... 18,400 1,656,000
------------
5,542,103
------------
NORWAY - 3.3%
Christiania Bank Og Kreditkasse....................... 231,800 1,066,240
Den Norske Bank ASA................................... 182,200 957,816
SAS Norge ASA, Class B................................ 82,700 1,380,773
*Storebrand ASA....................................... 41,000 362,890
------------
3,767,719
------------
PERU - 0.3%
Telefonica del Peru S.A. ADR.......................... 14,000 309,750
Telefonica del Peru S.A., Class B..................... 12,000 26,440
------------
336,190
------------
PHILIPPINES - 0.1%
*Bankard, Inc......................................... 1,608,400 73,091
*Marsman & Company, Inc., Class B..................... 2,343,000 40,951
------------
114,042
------------
POLAND - 0.8%
Bank Handlowy W Warszawie............................. 51,000 946,671
------------
RUSSIA - 2.0%
#Mosenergo ADR........................................ 24,100 851,983
*Vimpel-Communications ADR............................ 25,450 1,374,300
------------
2,226,283
------------
SINGAPORE - 1.7%
Jardine Matheson Holdings, Ltd. ADR................... 106,000 447,320
Jardine Matheson Holdings, Ltd........................ 108,800 459,136
*Mandarin Oriental International Ltd.................. 1,460,498 1,036,954
------------
1,943,410
------------
SPAIN - 1.4%
Banco de Valencia S.A. (Registered)................... 38,441 1,136,113
Banco Pastor S.A. (Registered)........................ 1,800 205,110
Electricas Reunidas de Zaragoza, S.A.................. 5,087 229,192
------------
1,570,415
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
UAM FUNDS JACOBS INTERNATIONAL OCTAGON PORTFOLIO
APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCKS - CONTINUED
SHARES VALUE+
--------- ------------
<S> <C> <C>
SWEDEN - 7.0%
Althin Medical AB, Class B........................... 6,100 $ 69,377
Astra AB, Class A.................................... 69,000 1,417,918
Celsius AB, Class B.................................. 82,700 1,838,395
Enator AB............................................ 31,000 889,446
Finnveden Invest AB, Class B......................... 16,300 360,237
IFS AB, Class B...................................... 65,300 687,822
Investment AB Bure................................... 35,100 551,174
Marieberg Tidnings, Class A Fria..................... 31,085 952,148
Pharmacia & Upjohn, Inc. ............................ 26,100 1,097,831
------------
7,864,348
------------
THAILAND - 1.0%
#Bangkok Bank PCL (Foreign).......................... 215,000 540,285
Dhipaya Insurance PCL................................ 100,100 120,587
#Thai Farmers Bank PCL (Foreign)..................... 197,000 451,671
------------
1,112,543
------------
UNITED KINGDOM - 9.2%
Berisford plc........................................ 96,000 355,621
BTR plc.............................................. 245,340 815,489
National Power plc................................... 45,255 440,864
National Westminster Bank plc........................ 86,440 1,730,419
Premier Oil plc...................................... 1,532,000 1,165,769
Racal Electronics plc................................ 185,900 1,038,408
Save Group plc....................................... 473,000 767,318
Somerfield plc....................................... 383,740 2,171,301
United Utilities plc................................. 136,180 1,894,868
------------
10,380,057
------------
TOTAL COMMON STOCKS (Cost $86,822,551)......................... 94,686,555
------------
PREFERRED STOCKS - 4.8%
AUSTRALIA - 1.5%
*News Corp., Ltd. ADR................................ 73,600 1,715,800
------------
AUSTRIA - 1.9%
*Bank Austria AG..................................... 28,050 2,169,662
------------
BRAZIL - 1.4%
Companhia Brasileira de Distribuicao Grupo Pao de
Acucar.............................................. 800,000 21,408
Confeccoes Guararapes S.A. .......................... 143,200 438,303
Itausa Investimentos Itau S.A. ...................... 469,000 397,840
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
UAM FUNDS JACOBS INTERNATIONAL OCTAGON PORTFOLIO
APRIL 30, 1998
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PREFERRED STOCKS - CONTINUED
SHARES VALUE+
----------- -------------
<S> <C> <C>
BRAZIL - CONTINUED
Telepar............................................ 548,130 $ 313,012
Telerj............................................. 2,370,000 373,065
-------------
1,543,628
-------------
TOTAL PREFERRED STOCKS (Cost $3,947,078)....................... 5,429,090
-------------
SHORT-TERM INVESTMENT - 5.3%
<CAPTION>
FACE
AMOUNT
<S> <C> <C>
-----------
REPURCHASE AGREEMENT
Chase Securities, Inc. 5.37%, dated 04/30/98, due
05/01/98, to be repurchased at $6,001,895,
collateralized by $5,232,357 of various U.S.
Treasury Obligations, 5.50%-14.00%, due 05/15/04-
11/15/27, valued at $6,069,198
(Cost $6,001,000)................................. $ 6,001,000 6,001,000
-------------
TOTAL INVESTMENTS - 93.9% (Cost $96,770,629) (a)... 106,116,645
-------------
OTHER ASSETS AND LIABILITIES (NET) - 6.1%.......... 6,916,420
-------------
NET ASSETS - 100%.................................. $ 113,033,065
=============
</TABLE>
+See Note A to Financial Statements.
*Non-Income Producing Security
#144A Security--Certain conditions for public resale may exist.
ADRAmerican Depositary Receipt
GDRGlobal Depositary Receipt
(a)
The cost for federal income tax purposes was $96,770,629. At April 30,
1998, net unrealized appreciation for all securities based on tax cost
was $9,346,016. This consisted of aggregate gross unrealized
appreciation for all securities of $16,787,113 and aggregate gross
unrealized depreciation for all securities of $7,441,097.
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
UAM FUNDS JACOBS INTERNATIONAL OCTAGON PORTFOLIO
APRIL 30, 1998
- --------------------------------------------------------------------------------
At April 30, 1998 sector diversification of the Portfolio was as follows:
<TABLE>
<CAPTION>
% OF
NET
SECTOR DIVERSIFICATION (UNAUDITED) ASSETS VALUE
- ---------------------------------- ------ ------------
<S> <C> <C>
Aerospace & Defense....................................... 1.6% $ 1,838,395
Auto & Truck Parts........................................ 1.9 2,196,715
Automotive................................................ 2.4 2,745,794
Banks..................................................... 17.3 19,588,497
Beverages, Food & Tobacco................................. 0.7 730,785
Building Materials........................................ 0.3 302,379
Chemicals................................................. 1.1 1,274,450
Computers................................................. 1.4 1,577,268
Computers & Office Equipment.............................. 0.8 940,950
Consumer Durables......................................... 1.9 2,164,139
Consumer Non-Durables..................................... 1.1 1,204,551
Electronics............................................... 5.9 6,636,782
Energy.................................................... 0.8 851,983
Financial Services........................................ 2.1 2,391,848
Food...................................................... 2.0 2,305,578
Holding Company........................................... 1.8 2,077,684
Industrial................................................ 1.1 1,280,097
Insurance................................................. 7.9 8,909,577
Iron & Steel.............................................. 0.2 276,216
Lodging & Restaurants..................................... 0.9 1,036,954
Manufacturing............................................. 4.9 5,501,694
Metals.................................................... 0.3 360,237
Multi-Industry............................................ 2.5 2,815,765
Natural Resources......................................... 1.0 1,080,483
Oil & Gas................................................. 2.1 2,334,082
Paper & Packaging......................................... 1.7 1,962,978
Pharmaceuticals........................................... 2.6 2,891,533
Print & Publishing........................................ 0.8 952,147
Real Estate............................................... 2.7 3,054,397
Repurchase Agreement...................................... 5.3 6,001,000
Retail.................................................... 2.3 2,546,608
Telecommunications........................................ 8.2 9,243,543
Textiles & Apparel........................................ 0.4 438,303
Transportation............................................ 1.4 1,540,336
Utilities................................................. 4.5 5,062,897
----- ------------
Total Investments......................................... 93.9% $106,116,645
Other Assets and Liabilities.............................. 6.1 6,916,420
----- ------------
Net Assets................................................ 100.0% $113,033,065
===== ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
UAM FUNDS JACOBS INTERNATIONAL OCTAGON PORTFOLIO
APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
STATEMENT OF ASSETS AND LIABILITIES
ASSETS
Investments, at Cost............................................ $ 96,770,629
============
Investments, at Value........................................... $106,116,645
Cash............................................................ 2,816
Dividends Receivable............................................ 483,145
Receivable for Investments Sold................................. 4,593,257
Receivable for Portfolio Shares Sold............................ 4,379,041
Foreign Withholding Tax Reclaim Receivable...................... 85,504
Interest Receivable............................................. 895
Other Assets.................................................... 10,093
------------
Total Assets................................................... 115,671,396
------------
LIABILITIES
Payable for Investments Purchased............................... 2,462,340
Payable for Investment Advisory Fees--Note B.................... 80,101
Payable for Shares Redeemed..................................... 17,657
Payable for Administrative Fees--Note C......................... 12,490
Payable for Trustees' Fees--Note G.............................. 811
Other Liabilities............................................... 64,932
------------
Total Liabilities.............................................. 2,638,331
------------
NET ASSETS...................................................... $113,033,065
============
NET ASSETS CONSIST OF:
Paid in Capital................................................. $101,419,475
Undistributed Net Investment Income............................. 435,850
Accumulated Net Realized Gain................................... 1,834,281
Unrealized Appreciation......................................... 9,343,459
------------
NET ASSETS...................................................... $113,033,065
============
Institutional Class Shares
Shares Issued and Outstanding (Unlimited authorization, no par
value)......................................................... 9,541,635
NET ASSET VALUE, Offering and Redemption Price Per Share........ $11.85
======
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
UAM FUNDS JACOBS INTERNATIONAL OCTAGON PORTFOLIO
FOR THE YEAR ENDED
APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
STATEMENT OF OPERATIONS
INVESTMENT INCOME
Dividends.................................................... $ 1,766,625
Interest..................................................... 382,281
Less Foreign Taxes Withheld.................................. (159,955)
-----------
TOTAL INCOME................................................ 1,988,951
-----------
EXPENSES
Investment Advisory Fees--Note B............................. 730,085
Administrative Fees--Note C.................................. 108,020
Custodian Fees--Note D....................................... 94,264
Filing and Registration Fees................................. 45,979
Shareholder Servicing Fees................................... 39,494
Printing Fees................................................ 29,065
Legal Fees................................................... 15,191
Audit Fees................................................... 13,098
Trustees' Fees--Note G....................................... 3,368
Account Services Fees--Note F................................ 1,789
Foreign Tax Expense.......................................... 1,507
Other Expenses............................................... 10,356
-----------
Net Expenses Before Expense Offset.......................... 1,092,216
Expense Offset--Note A....................................... (4,215)
-----------
Net Expenses After Expense Offset........................... 1,088,001
-----------
NET INVESTMENT INCOME........................................ 900,950
-----------
NET REALIZED GAIN (LOSS):
Investments................................................. 3,053,470
Foreign Currency Transactions............................... (165,111)
-----------
TOTAL NET REALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS................................................ 2,888,359
-----------
NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION ON:
Investments................................................. 9,445,507
Foreign Currency Translations............................... (2,004)
-----------
TOTAL NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION..... 9,443,503
-----------
NET GAIN ON INVESTMENTS AND FOREIGN CURRENCY................. 12,331,862
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS......... $13,232,812
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
UAM FUNDS JACOBS INTERNATIONAL OCTAGON PORTFOLIO
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
YEAR JANUARY 2,
ENDED 1997* TO
APRIL 30, APRIL 30,
1998 1997
------------ -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income............................. $ 900,950 $ 218,770
Net Realized Gain (Loss).......................... 2,888,359 (45,962)
Net Change in Unrealized
Appreciation/Depreciation........................ 9,443,503 (100,044)
------------ -----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERA-
TIONS............................................ 13,232,812 72,764
------------ -----------
DISTRIBUTIONS:
Net Investment Income............................. (493,305) --
Net Realized Gain................................. (1,198,681) --
------------ -----------
TOTAL DISTRIBUTIONS............................... (1,691,986) --
------------ -----------
CAPITAL SHARE TRANSACTIONS: (1)
Issued............................................ 81,835,524 35,936,680
In Lieu of Cash Distributions..................... 1,549,072 --
Redeemed.......................................... (17,725,147) (176,654)
------------ -----------
NET INCREASE FROM CAPITAL SHARE TRANSACTIONS...... 65,659,449 35,760,026
------------ -----------
TOTAL INCREASE.................................... 77,200,275 35,832,790
NET ASSETS:
Beginning of Period............................... 35,832,790 --
------------ -----------
End of Period (including undistributed net
investment income of $435,850 and $193,316,
respectively).................................... $113,033,065 $35,832,790
============ ===========
(1) SHARES ISSUED AND REDEEMED:
Shares Issued..................................... 7,481,824 3,542,188
In Lieu of Cash Distributions..................... 149,207 --
Shares Redeemed................................... (1,613,998) (17,586)
------------ -----------
6,017,033 3,524,602
============ ===========
</TABLE>
*Commencement of Operations
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
UAM FUNDS JACOBS INTERNATIONAL OCTAGON PORTFOLIO
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
YEAR JANUARY 2,
ENDED 1997* TO,
APRIL 30, APRIL 30,
1998 1997
--------- ----------
<S> <C> <C>
Net Asset Value, Beginning of Period................. $ 10.17 $ 10.00
-------- -------
Income From Investment Operations
Net Investment Income............................... 0.10 0.06
Net Realized and Unrealized Gain on Investments..... 1.82 0.11++
-------- -------
Total from Investment Operations.................... 1.92 0.17
-------- -------
Distributions
Net Investment Income............................... (0.09) --
Net Realized Gain................................... (0.15) --
-------- -------
Total Distributions................................. (0.24) --
-------- -------
Net Asset Value, End of Period....................... $ 11.85 $ 10.17
======== =======
TOTAL RETURN......................................... 19.19% 1.70%***+
======== =======
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands)................ $113,033 $35,833
Ratio of Expenses to Average Net Assets.............. 1.49% 1.75%**
Ratio of Net Investment Income to Average Net As-
sets................................................ 1.23% 3.67%**
Portfolio Turnover Rate.............................. 39% 7%
Average Commission Rate.............................. $ 0.0014 $0.0037
Ratio of Voluntarily Waived Fees and Expenses Assumed
by the Adviser to Average Net Assets................ N/A 0.40%**
Ratio of Expenses to Average Net Assets Including Ex-
pense Offsets....................................... 1.49% 1.75%**
</TABLE>
* Commencement of Operations
** Annualized
*** Not Annualized
+ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser.
++ The amount shown for a share outstanding throughout the period does not
accord with the aggregate net loss on investments for that period because
of the timing of sales and repurchases of the Portfolio shares in relation
to fluctuating market value of the investments of the Portfolio.
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
UAM FUNDS JACOBS INTERNATIONAL OCTAGON PORTFOLIO
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
UAM Funds Trust and UAM Funds, Inc. (collectively the "UAM Funds") are reg-
istered under the Investment Company Act of 1940, as amended. The Jacobs In-
ternational Octagon Portfolio (the "Portfolio"), a portfolio of UAM Funds
Trust, is a diversified, open-end management investment company. At April 30,
1998, the UAM Funds were comprised of forty-four active portfolios. The finan-
cial statements of the remaining portfolios are presented separately. The ob-
jective of the Jacobs International Octagon Portfolio is to provide long-term
capital appreciation by investing in equity securities of companies in devel-
oped and emerging markets.
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. Quotations of foreign secu-
rities and other assets in a foreign currency are converted to U.S. dollar
equivalents. The converted value is based upon the bid price of the for-
eign currency against U.S. dollars quoted by any major bank or by a bro-
ker. 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 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 earned or gains
realized or repatriated. The Portfolio accrues such taxes when the related
income is earned or gains are recorded.
15
<PAGE>
UAM FUNDS JACOBS INTERNATIONAL OCTAGON PORTFOLIO
- -------------------------------------------------------------------------------
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.
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the UAM Funds may transfer their daily uninvested cash bal-
ances into a joint trading account which invests in one or more repurchase
agreement. 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
disposition of foreign currencies, currency gains or losses realized be-
tween trade and settlement dates on securities transactions and the dif-
ference between the amount of the investment income and foreign withhold-
ing taxes recorded on the Portfolio's books and the U.S. dollar equivalent
amounts actually received or paid.
5. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS: The Portfolio may enter
into forward foreign currency exchange contracts to protect the value of
securities held and related receivables and payables against changes in
future foreign exchange rates. A forward currency contract is an agreement
between two parties to buy 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
16
<PAGE>
UAM FUNDS JACOBS INTERNATIONAL OCTAGON PORTFOLIO
- -------------------------------------------------------------------------------
is closed, equal to the difference between the value of the contract at
the time it was opened and the value at the time it was closed. Risks may
arise upon entering into these contracts from the potential inability of
counterparties to meet the terms of their contracts and are generally 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 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 dif-
ferences are primarily due to differing book and tax treatments for for-
eign currency transactions.
Permanent book and tax basis differences relating to shareholder distri-
butions resulted in reclassifications of $165,111 to decrease undistrib-
uted net investment income and $165,111 to increase accumulated net real-
ized gain.
Permanent book-tax differences, if any, are not included in ending un-
distributed net investment income (loss) for the purpose of calculating
net investment income (loss) per share in the financial highlights.
7. OTHER: Security transactions are accounted for on trade date, the
date the trade was executed. Costs used in determining realized gains and
losses on the sale of investment securities are based on the specific
identification method. Dividend income is recorded on the ex-dividend
date, except that certain dividends from foreign securities are recorded
as soon as the Portfolio is informed of the ex-dividend date. Interest in-
come is recognized on the accrual basis. Most expenses of the UAM Funds
can be directly attributed to a particular portfolio. Expenses which can-
not be directly attributed are apportioned among the portfolios of the UAM
Funds based on their relative net assets. Custodian fees for the Portfolio
have been increased to include expense offsets, if any, for custodian bal-
ance credits.
B. ADVISORY SERVICES: Under the terms of an investment advisory agreement,
Jacobs Asset Management (the "Adviser") provides investment advisory services
to the Portfolio for a monthly fee calculated at an annual rate of 1.00% of
average daily net assets for the month. The Adviser has voluntarily agreed to
waive a portion of its advisory fees and to assume expenses, if necessary, in
order to keep
17
<PAGE>
UAM FUNDS JACOBS INTERNATIONAL OCTAGON PORTFOLIO
- -------------------------------------------------------------------------------
the Portfolio's total annual operating expenses, after the effect of expense
offset arrangements, from exceeding 1.75% of average daily net assets. United
Asset Management Corporation ("UAM") is a limited partner of the Adviser.
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 un-
der a Fund Administration Agreement (the "Agreement"). Pursuant to the Agree-
ment, 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 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 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 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 at an annual rate of
0.04% of average daily net assets of the Portfolio. The Administrator has en-
tered into a Mutual Funds Service Agreement with Chase Global Funds Services
Company ("CGFSC"), a corporate 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 year ended April 30, 1998, $78,772 was paid to
CGFSC for its services.
D. CUSTODIAN: The Chase Manhattan Bank is custodian for the Portfolio's as-
sets 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. ACCOUNT SERVICES: The UAM Funds entered into an Account Services Agree-
ment (the "Services Agreement") with UAM Retirement Plan Services, Inc.
("Service Provider"), a wholly-owned subsidiary of UAM. Under the Services
Agreement, the Service Provider agrees to perform certain services for partic-
ipants in a self-directed, defined contribution plan, and for whom the Service
Provider provides participant recordkeeping. Pursuant to the Services Agree-
ment, the Serv-
18
<PAGE>
UAM FUNDS JACOBS INTERNATIONAL OCTAGON PORTFOLIO
- -------------------------------------------------------------------------------
ice Provider is entitled to receive, after the end of each month, a fee at the
annual rate of 0.15% of the average aggregate daily net asset value of shares
of the UAM Funds in the accounts for which they provide services. The Service
Provider has voluntarily agreed to waive its fees in order to keep the Portfo-
lio's total annual operating expenses, after the effect of expense offset ar-
rangements, from exceeding 1.75% of average daily net assets.
G. 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, plus a quarterly retainer of $150 for each
active portfolio of the UAM Funds and reimbursement of expenses incurred in
attending Trustee meetings.
H. PURCHASES AND SALES: For the year ended April 30, 1998, the Portfolio
made purchases of $81,328,368 and sales of $26,047,299 of investment securi-
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.
I. 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 0.50%. In addition, a
commitment fee of 0.08% per annum, payable at the end of each calendar quar-
ter, is accrued by each participating Portfolio based on its average daily un-
used portion of the line of credit. During the year ended April 30, 1998, the
Portfolio had no borrowings under the agreement.
J. OTHER: At April 30, 1998, 31% of total shares outstanding were held by 2
record shareholders owning more than 10% of the aggregate total shares out-
standing.
At April 30, 1998, the net assets of the Portfolio were substantially com-
prised of foreign denominated securities. Changes in currency exchange rates
will affect the value of and investment income from such securities.
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.
19
<PAGE>
UAM FUNDS JACOBS INTERNATIONAL OCTAGON PORTFOLIO
- -------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of
UAM Funds Trust and Shareholders of
Jacobs International Octagon Portfolio
In our opinion, the accompanying statement of assets and liabilities, includ-
ing the portfolio of investments, and the related statements of operations and
of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Jacobs International Octagon
Portfolio (the "Portfolio"), a portfolio of the UAM Funds Trust, at April 30,
1998, and the results of its operations, the changes in its net assets and the
financial highlights for the periods indicated, 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 audits. We conducted our audits of
these financial statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain 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
audits, which included confirmation of securities at April 30, 1998 by corre-
spondence with the custodian and the application of alternative auditing pro-
cedures where securities purchased were not received by the custodian, provide
a reasonable basis for the opinion expressed above.
Price Waterhouse LLP
Boston Massachusetts
June 3, 1998
- -------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION (UNAUDITED):
Foreign taxes during the fiscal year ended April 30, 1998 amounting to approx-
imately $160,000 are expected to be passed through to the shareholders as 100%
allowable foreign tax credits on Form 1099-DIV for the year ending December
31, 1998 which shareholders of this Portfolio will receive in late January,
1999.
For the fiscal year ended April 30, 1998, gross income derived from sources
within foreign countries amounted to approximately $1,749,000 for the Portfo-
lio.
20
<PAGE>
UAM Funds Jacobs International
Octagon Portfolio
- --------------------------------------------------------------------------------
Officers and Trustees
Norton H. Reamer
Trustee, President and Chairman William H. Park
Vice President
John T. Bennett, Jr.
Trustee Michael E. DeFao
Secretary
Nancy J. Dunn
Trustee Karl O. Hartmann
Assistant Secretary
Philip D. English
Trustee Gary L. French
Treasurer
William A. Humenuk
Trustee Robert R. Flaherty
Assistant Treasurer
Charles H. Salisbury, Jr.
Trustee and Executive Vice President Gordon M. Shone
Assistant Treasurer
Peter M. Whitman, Jr.
Trustee
- --------------------------------------------------------------------------------
Investment Adviser
Jacobs Asset Management
200 East Broward Boulevard, Suite 1920
Fort Lauderdale, FL 33301
Administrator
UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110
Custodian
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, NY 11245
Legal Counsel
Drinker, Biddle & Reath LLP
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, PA 19107-3496
Independent Accountants --------------------------------------
Price Waterhouse LLP This report has been prepared for
160 Federal Street shareholders and may be distributed
Boston, MA 02110 to others only if preceded or
accompanied by a current prospectus.
Distributor ---------------------------------------
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
<PAGE>
UAM Funds
Annual Report
- -------------------------------
TJ Core Equity
Portfolio
- -------------------------------
April 30, 1998
UAM
<PAGE>
UAM FUNDS TJ CORE EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
Dear Fellow Shareholders:
The equity markets continue their onward and upward march to record territory.
In October, the market dramatically rebounded from the Asian market decline.
In fact, this decline seems to have emboldened the "bulls" like a red flag to
take the market higher. Market participants decided that the Federal Reserve
could not raise interest rates because Indonesia, Malaysia, Thailand, and
South Korea would collapse financially. Meanwhile, the weakness from those
countries' lack of economic growth has been offset by the constant merger wave
running through the domestic equity market. For the twelve months ending April
30, 1998, the Dow Jones Industrial Averages and the S&P 500 Index posted gains
of 31.59% and 41.06% respectively while the TJ Core Equity Fund produced gains
of 36.05%.
The constant drumbeat of market optimism and dearth of any respected market
skeptics breeds high valuation levels. As is our style, the portfolio has been
structured defensively to do better in a choppier environment than one in
which there is only smooth sailing. This modestly defensive outlook may at
times hinder performance in an exuberant market. As a result, the Fund's de-
fensive portfolio underperformed the explosive S&P 500 but still outpaced the
Dow Jones Industrial Averages for the twelve months ended April 30, 1998.
The fiscal year ended April 30, 1998 is weighing excellent domestic economic
numbers (employment and inflation) against the Federal Reserve's fears that
employment tightness and financial and real estate price increases are signal-
ing inflation. For this reason it appears that every economic indicator is the
straw that breaks the camel's back, to force the Federal Reserve to either
lower/raise interest rates. It seems like a World War I trench warfare battle
with many casualties and a lot of gnashing of teeth yet very little ground
gained by either side. Eventually that war ended too. For the quarter ended
April 30, 1998 the TJ Core Equity Fund gained 13.50% versus a gain of 13.85%
in the S&P 500 and 15.10% in the Dow Jones Industrial Averages.
The adviser has taken advantage of the market's obsession with growth and dis-
gust with lackluster current earnings to reduce our exposure to fully valued
securities and reinvest proceeds in new positions. During the twelve months
ended April 30, 1998 the Fund eliminated positions in A.C. Nielsen, Cognizant,
Columbia HCA, Cooper Industries, Halliburton, NCR, Pitney Bowes, and Waste
Management. The Fund established new positions in Allergan, AMP, Johnson &
Johnson, Jostens, Limited, McDonald's, Raytheon, Philip Morris, Schlumberger,
Tricon Global, and USWest Media Group.
In our view returns similar to the recent years' outstanding gains are not
likely, as the economic outlook becomes more uncertain and earnings advances
become more
1
<PAGE>
UAM FUNDS TJ CORE EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
difficult to achieve. While mergermania and investor enthusiasm continue un-
abated, valuation levels are becoming stretched. As a result, the adviser will
continue to emphasize the defensive posture of the TJ Core Equity Fund and
will use instances of increasing volatility as opportunities to accumulate un-
dervalued companies with favorable long-term prospects.
TOM JOHNSON INVESTMENT MANAGEMENT, INC.
The investment results presented in the Adviser's letter represent past per-
formance 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 be-
half of the Portfolio, total return for the Portfolio would have been lower.
The investment return and principal value of an investment will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than their
original cost.
2
<PAGE>
Performance Comparison
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 PURCHASE IN THE
TJ CORE EQUITY PORTFOLIO AND THE
STANDARD & POOR'S 500 INDEX (S&P 500)
- ----------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN**
FOR PERIOD ENDED APRIL 30, 1998
- ----------------------------------------------------
1 YEAR SINCE 9/28/95*++
- ----------------------------------------------------
36.05% 25.90%
- ----------------------------------------------------
<TABLE>
<CAPTION>
Measurement Period TJ CORE S&P
(Fiscal Year Covered) EQUITY 500 INDEX
- ------------------- ---------- ---------
<S> <C> <C>
FYE 09/28/95 $10000 $10000
FYE 04/30/96 $11113 $11335
FYE 04/30/97 $13355 $14182
FYE 04/30/98 $18164 $20005
</TABLE>
COMPARISON OF CHANGE IN VALUE OF $10,000 PURCHASE IN THE
TJ CORE EQUITY PORTFOLIO AND THE
STANDARD & POOR'S 500 INDEX (S&P 500)
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate. When shares are redeemed, they may
be worth more or less than the original cost.
* Commencement of Operations
** Total return of the Portfolio reflects fees waived and expenses assumed by
the Adviser. Without such reduction of expenses, total return would be
lower.
+ The comparative index is not adjusted to reflect expenses or other fees that
the SEC requires to be reflected in the Portfolio's performance. The fees,
if reflected, would reduce the performance quoted. The Portfolio's
performance assumes the reinvestment of all dividends and distributions. The
comparative index has been adjusted to reflect reinvestment of dividends on
securities in the index.
++ For comparative purposes, the value of the S&P 500 Index on 9/30/95 is used
as the beginning value on 9/28/95.
Definition of the Comparative Index
The S&P 500 Index is an unmanaged index composed of 400 industrial, 40
financial, 40 utilities and 20 transportation stocks.
Please note that one cannot invest in an unmanaged index.
3
<PAGE>
UAM FUNDS TJ CORE EQUITY PORTFOLIO
APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 95.5%
<CAPTION>
SHARES VALUE+
------ -----------
<S> <C> <C>
AEROSPACE & DEFENSE - 2.7%
Raytheon Co., Class A...................................... 800 $ 44,150
Raytheon Co., Class B...................................... 4,600 260,762
-----------
304,912
-----------
AUTOMOTIVE - 1.3%
Ford Motor Co. ............................................ 3,300 151,181
-----------
BANKS - 4.4%
First Union Corp. ......................................... 5,100 307,912
NationsBank Corp. ......................................... 2,500 189,375
-----------
497,287
-----------
BEVERAGES, FOOD & TOBACCO - 7.2%
Anheuser-Busch Cos., Inc. ................................. 2,700 123,694
Heinz (H.J.) Co. .......................................... 5,000 272,500
Philip Morris Cos., Inc. .................................. 2,600 97,012
Sara Lee Corp. ............................................ 5,500 327,594
-----------
820,800
-----------
BROADCASTING & PUBLISHING - 5.5%
Dun & Bradstreet Corp. .................................... 4,000 142,000
Gannett Co. ............................................... 3,600 244,575
McGraw-Hill Cos., Inc. .................................... 3,000 232,312
-----------
618,887
-----------
COMMUNICATIONS - 2.1%
*U.S. West Media Group..................................... 6,200 234,050
-----------
CONGLOMERATES - 1.9%
Textron, Inc. ............................................. 2,800 219,100
-----------
ELECTRICAL EQUIPMENT - 3.0%
General Electric Co. ...................................... 4,000 340,500
-----------
ENERGY - 6.4%
Amoco Corp. ............................................... 5,300 234,525
Coastal Corp. ............................................. 3,300 235,744
Mobil Corp. ............................................... 3,300 260,700
-----------
730,969
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
UAM FUNDS TJ CORE EQUITY PORTFOLIO
APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCKS - CONTINUED
SHARES VALUE+
------ -----------
<S> <C> <C>
FINANCIAL SERVICES - 8.6%
American Express Co. ...................................... 2,300 $ 234,600
Associates First Capital Corp., Class A.................... 864 64,584
Block, H&R Inc. ........................................... 5,000 225,000
Fannie Mae................................................. 5,000 299,375
Lehman Brothers Holdings, Inc. ............................ 2,100 149,231
-----------
972,790
-----------
HEALTH CARE - 1.7%
United Healthcare Corp. ................................... 2,800 196,700
-----------
HOSPITAL--SUPPLIES - 3.6%
Johnson & Johnson.......................................... 3,400 242,675
Mallinckrodt, Inc. ........................................ 5,100 164,475
-----------
407,150
-----------
INSURANCE - 3.2%
Hartford Financial Services Group, Inc. ................... 3,300 365,475
-----------
LODGING & RESTAURANTS - 4.2%
McDonald's Corp. .......................................... 5,700 352,688
*Tricon Global Restaurants, Inc. .......................... 3,800 120,650
-----------
473,338
-----------
MACHINERY & CONSTRUCTION - 2.0%
Foster Wheeler Corp. ...................................... 8,300 229,806
-----------
MANUFACTURING - 5.9%
ITT Industries, Inc. ...................................... 7,700 280,569
Tyco International Ltd. ................................... 7,100 386,950
-----------
667,519
-----------
METALS - 1.1%
USX-U.S. Steel Group, Inc. ................................ 3,300 129,113
-----------
MISCELLANEOUS CONSUMER SERVICES - 1.5%
Jostens, Inc. ............................................. 7,000 165,812
-----------
OIL SERVICES - 1.2%
Schlumberger Ltd. ......................................... 1,600 132,600
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
UAM FUNDS TJ CORE EQUITY PORTFOLIO
APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCKS - CONTINUED
SHARES VALUE+
------ -----------
<S> <C> <C>
PAPER & PACKAGING - 1.1%
Union Camp Corp. .......................................... 2,100 $ 126,788
-----------
PHARMACEUTICALS - 6.6%
Allergan, Inc. ............................................ 6,000 249,375
*Allergan Specialty Therapeutics, Inc., Class A............ 300 3,075
Bristol-Myers Squibb Co. .................................. 2,300 243,513
Merck & Co., Inc. ......................................... 2,100 253,050
-----------
749,013
-----------
RETAIL - 3.9%
Limited, Inc. ............................................. 4,500 151,031
Wal-Mart Stores, Inc. ..................................... 5,800 293,263
-----------
444,294
-----------
TECHNOLOGY - 9.7%
AMP, Inc. ................................................. 5,200 204,425
Avnet, Inc. ............................................... 4,000 246,750
Compaq Computer Corp. ..................................... 9,600 269,400
International Business Machines Corp. ..................... 3,300 382,388
-----------
1,102,963
-----------
TELECOMMUNICATIONS - 2.4%
Lucent Technologies, Inc. ................................. 3,600 274,050
-----------
TRANSPORTATION - 2.5%
Southwest Airlines Co. .................................... 10,400 285,350
-----------
UTILITIES-COMMUNICATIONS - 1.8%
AT&T Corp. ................................................ 3,300 198,206
-----------
TOTAL COMMON STOCKS (Cost $8,621,370)............................. 10,838,653
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
UAM FUNDS TJ CORE EQUITY PORTFOLIO
APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHORT-TERM INVESTMENTS - 6.6%
FACE
AMOUNT VALUE+
-------- -----------
<S> <C> <C>
REPURCHASE AGREEMENT
Chase Securities, Inc. 5.37%, dated 4/30/98, due
5/01/98, to be repurchased at $744,111, collateralized
by $648,704 of various U.S. Treasury Obligations,
5.50%-14.00%, due 5/15/04-11/15/27, valued at $752,455
(Cost $744,000)....................................... $744,000 $ 744,000
-----------
TOTAL INVESTMENTS - 102.1% (Cost $9,365,370) (a)................ 11,582,653
-----------
OTHER ASSETS AND LIABILITIES (NET) - (2.1)%..................... (234,610)
-----------
NET ASSETS - 100%............................................... $11,348,043
===========
</TABLE>
+ See Note A to Financial Statements.
* Non-Income Producing Security
(a) The cost for federal income tax purposes was $9,365,478. At April 30, 1998,
net unrealized appreciation for all securities based on tax cost was
$2,217,175. This consisted of aggregate gross unrealized appreciation for
all securities of $2,355,693 and aggregate gross unrealized depreciation
for all securities of $138,518.
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
UAM FUNDS TJ CORE EQUITY PORTFOLIO
APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
STATEMENT OF ASSETS AND LIABILITIES
ASSETS
Investments, at Cost............................................. $ 9,365,370
===========
Investments, at Value............................................ $11,582,653
Cash............................................................. 939
Receivable for Portfolio Shares Sold............................. 10,703
Receivable for Investments Sold.................................. 94,408
Dividends Receivable............................................. 6,894
Other Assets..................................................... 168
-----------
Total Assets.................................................... 11,695,765
-----------
LIABILITIES
Payable for Investments Purchased................................ 219,156
Payable for Portfolio Shares Redeemed............................ 100,103
Payable for Administrative Fees - Note C......................... 6,472
Payable for Distribution and Service Fees - Note E............... 2,334
Payable for Trustees' Fees - Note G.............................. 614
Payable for Investment Advisory Fees - Note B.................... 143
Other Liabilities................................................ 18,900
-----------
Total Liabilities............................................... 347,722
-----------
NET ASSETS....................................................... $11,348,043
===========
NET ASSETS CONSIST OF:
Paid in Capital.................................................. $ 8,750,770
Undistributed Net Investment Income.............................. 83
Accumulated Net Realized Gain.................................... 379,907
Unrealized Appreciation.......................................... 2,217,283
-----------
NET ASSETS....................................................... $11,348,043
===========
INSTITUTIONAL SERVICE CLASS SHARES
Shares Issued and Outstanding (Unlimited authorization, no par
value)......................................................... 655,964
Net Asset Value, Offering and Redemption Price Per Share........ $17.30
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
UAM FUNDS TJ CORE EQUITY PORTFOLIO
FOR THE YEAR ENDED
APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
STATEMENT OF OPERATIONS
INVESTMENT INCOME
Dividends........................................................... $ 131,795
Interest............................................................ 35,270
----------
TOTAL INCOME....................................................... 167,065
----------
EXPENSES
Investment Advisory Fees - Note B................................... 63,097
Administrative Fees - Note C........................................ 76,356
Printing Fees....................................................... 23,632
Distribution and Service Fees - Note E.............................. 18,198
Registration and Filing Fees........................................ 15,604
Audit Fees.......................................................... 11,820
Account Services Fees - Note F...................................... 10,898
Legal Fees.......................................................... 4,840
Custodian Fees - Note D............................................. 3,642
Trustees' Fees - Note G............................................. 2,461
Other Expenses...................................................... 2,263
Account Services Fees Waived - Note F............................... (10,898)
Investment Advisory Fees Waived - Note B............................ (63,097)
Expenses Assumed by the Adviser - Note B............................ (53,588)
----------
Net Expenses Before Expense Offset................................. 105,228
Expense Offset - Note A............................................. (172)
----------
Net Expenses After Expense Offset.................................. 105,056
----------
NET INVESTMENT INCOME............................................... 62,009
----------
NET REALIZED GAIN ON INVESTMENTS.................................... 512,167
NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION
OF INVESTMENTS..................................................... 1,815,201
----------
NET GAIN ON INVESTMENTS............................................. 2,327,368
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................ $2,389,377
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
UAM FUNDS TJ CORE EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
YEARS ENDED APRIL 30,
1998 1997
----------- ----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income.......................... $ 62,009 $ 20,486
Net Realized Gain.............................. 512,167 60,890
Net Change in Unrealized
Appreciation/Depreciation..................... 1,815,201 317,028
----------- ----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS.................................... 2,389,377 398,404
----------- ----------
DISTRIBUTIONS:
Net Investment Income.......................... (64,393) (18,293)
Net Realized Gain.............................. (179,488) (16,792)
----------- ----------
TOTAL DISTRIBUTIONS............................ (243,881) (35,085)
----------- ----------
CAPITAL SHARE TRANSACTIONS: (1)
Issued......................................... 9,086,285 1,596,878
In Lieu of Cash Distributions.................. 241,967 35,048
Redeemed....................................... (3,014,063) (130,217)
----------- ----------
NET INCREASE FROM CAPITAL SHARE TRANSACTIONS... 6,314,189 1,501,709
----------- ----------
TOTAL INCREASE................................. 8,459,685 1,865,028
NET ASSETS:
Beginning of Year.............................. 2,888,358 1,023,330
----------- ----------
End of Year (including undistributed net
investment
income of $83 and $2,467, respectively)....... $11,348,043 $2,888,358
=========== ==========
(1) SHARES ISSUED AND REDEEMED:
Shares Issued.................................. 610,019 136,745
In Lieu of Cash Distributions.................. 15,730 3,000
Shares Redeemed................................ (191,077) (11,047)
----------- ----------
434,672 128,698
=========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
UAM FUNDS TJ CORE EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SEPTEMBER 28,
YEARS ENDED APRIL 30, 1995* TO
---------------------- APRIL 30,
1998 1997 1996
---------- ---------- -------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period.... $ 13.05 $ 11.05 $ 10.00
---------- ---------- -------
Income From Investment Operations
Net Investment Income.................. 0.10 0.12 0.06
Net Realized and Unrealized Gain on
Investments........................... 4.55 2.08 1.05
---------- ---------- -------
Total from Investment Operations....... 4.65 2.20 1.11
---------- ---------- -------
Distributions
Net Investment Income.................. (0.11) (0.11) (0.06)
Net Realized Gain...................... (0.29) (0.09) --
---------- ---------- -------
Total Distributions.................... (0.40) (0.20) (0.06)
---------- ---------- -------
Net Asset Value, End of Period.......... $ 17.30 $ 13.05 $ 11.05
========== ========== =======
TOTAL RETURN+........................... 36.05% 20.14% 11.13%***
========== ========== =======
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands)... $ 11,348 $ 2,888 $ 1,023
Ratio of Expenses to Average Net
Assets................................. 1.25% 1.26% 1.38%**
Ratio of Net Investment Income to
Average Net Assets..................... 0.74% 1.07% 1.06%**
Portfolio Turnover Rate................. 52% 27% 17%
Average Commission Rate................. $ 0.0600 $ 0.0600 $0.0600
Ratio of Voluntarily Waived Fees and
Expenses Assumed by the Adviser to
Average Net Assets..................... 1.52% 5.38% 12.48%**
Ratio of Expenses to Average Net Assets
Including Expense Offsets.............. 1.25% 1.25% 1.25%**
</TABLE>
*Commencement of Operations
**Annualized
***Not 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.
11
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UAM FUNDS TJ CORE EQUITY PORTFOLIO
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NOTES TO FINANCIAL STATEMENTS
UAM Funds Trust and UAM Funds, Inc. (collectively the "UAM Funds") are reg-
istered under the Investment Company Act of 1940, as amended. The TJ Core Eq-
uity Portfolio (the "Portfolio"), a portfolio of UAM Funds Trust, is a diver-
sified, open-end management investment company. At April 30, 1998, the UAM
Funds were comprised of forty-four active portfolios. The financial statements
of the remaining portfolios are presented separately. The objective of the TJ
Core Equity Portfolio is to provide maximum total return consistent with rea-
sonable risk to principal by investing in the common stock of quality compa-
nies with lower valuations in sectors of the economy exhibiting strong, or im-
proving relative performance.
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
12
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UAM FUNDS TJ CORE EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
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 UAM Funds may transfer their daily uninvested cash bal-
ances into a joint trading account which invests in one or more repurchase
agreement. 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. These dif-
ferences are primarily due to differing book and tax treatments in the
timing of the recognition of gains or losses on investments.
Permanent book-tax differences, if any, are not included in ending un-
distributed 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. Ex-
penses which cannot be directly attributed are apportioned among the port-
folios of the UAM Funds based on their relative net assets. Custodian fees
for the Portfolio have been increased to include expense offsets, if any,
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 sub-
sidiary of United Asset Management Corporation ("UAM"), provides investment
advisory services to the Portfolio for a monthly fee calculated at an annual
rate of 0.75% of average daily net assets for the month. Through January 1,
2000, 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
13
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UAM FUNDS TJ CORE EQUITY PORTFOLIO
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operating expenses, after the effect of expense offset arrangements, from ex-
ceeding 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 un-
der a Fund Administration Agreement (the "Agreement"). Pursuant to the Agree-
ment, 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 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 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 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 at an annual rate of
0.04% of average daily net assets of the Portfolio. The Administrator has en-
tered into a Mutual Funds Service Agreement with Chase Global Funds Services
Company ("CGFSC"), a corporate 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 year ended April 30, 1998, $72,990 was paid to
CGFSC for its services.
D. CUSTODIAN: The Chase Manhattan Bank is custodian for the Portfolio's as-
sets 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
Portfolio has adopted Distribution and Service Plans (the "Plans") pursuant to
Rule 12b-1 under the Investment Company Act of 1940. Under the Plans, the
Portfolio may not incur distribution and service 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 Plans to 0.50% per annum of the Portfo-
lio's net assets. The Portfolio is not currently making payments for distribu-
tion fees, however the Portfolio does pay service fees at an annual rate of
0.25% of the average daily value of shares owned by clients of the Service
Agents.
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UAM FUNDS TJ CORE EQUITY PORTFOLIO
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F. ACCOUNT SERVICES: The UAM Funds entered into an Account Services Agree-
ment (the "Services Agreement") with UAM Retirement Plan Services, Inc.
("Service Provider"), a wholly-owned subsidiary of UAM. Under the Services
Agreement, the Service Provider agrees to perform certain services for partic-
ipants in a self-directed, defined contribution plan, and for whom the Service
Provider provides participant recordkeeping. Pursuant to the Services Agree-
ment, the Service Provider is entitled to receive, after the end of each
month, a fee at the annual rate of 0.15% of the average aggregate daily net
asset value of shares of the UAM Funds in the accounts for which they provide
services. The Service Provider has voluntarily agreed to waive its fees in or-
der to keep the Portfolio's total annual operating expenses, after the effect
of expense offset arrangements, from exceeding 1.25% of average daily net as-
sets.
G. 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, plus a quarterly retainer of $150 for each
active portfolio of the UAM Funds, and reimbursement of expenses incurred in
attending Trustee meetings.
H. PURCHASES AND SALES: For the year ended April 30, 1998, the Portfolio
made purchases of $9,730,083 and sales of $3,990,851 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.
I. 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 0.50%. In addition, a
commitment fee of 0.08% per annum, payable at the end of each calendar quarter
is accrued by each participating Portfolio based on its average daily unused
portion of the line of credit. During the year ended April 30, 1998, the Port-
folio had no borrowings under the agreement.
J. OTHER: At April 30, 1998, 56% of total shares outstanding were held by 3
record shareholders owning more than 10% of the aggregate total shares out-
standing.
15
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UAM FUNDS TJ CORE EQUITY PORTFOLIO
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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 assets and liabilities, includ-
ing the portfolio of investments, and the related statements of operations and
of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the TJ Core Equity Portfolio (the
"Portfolio"), a portfolio of the UAM Funds Trust, at April 30, 1998, and the
results of its operations, the changes in its net assets and the financial
highlights for the periods indicated, in conformity with generally accepted
accounting principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of
the Portfolio's management; our responsibility is to express an opinion on
these financial statements based on our audits. We conducted our audits of
these financial statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain 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
audits, which included confirmation of securities at April 30, 1998 by corre-
spondence with the custodian and the application of alternative auditing pro-
cedures where securities purchased were not received by the custodian, provide
a reasonable basis for the opinion expressed above.
Price Waterhouse LLP
Boston, Massachusetts
June 3, 1998
- -------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION: (UNAUDITED)
TJ Core Equity Portfolio hereby designates approximately $41,182 and $32,358
as 20% and 28% long-term capital gain dividends, respectively, for the purpose
of the dividend paid deduction on their federal income tax return.
For the year ended April 30, 1998, the percentage of dividends paid from in-
vestment company taxable income that qualify for the 70% dividend received de-
duction for corporate shareholders is 65.50%.
16
<PAGE>
UAM Funds TJ Core 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 Karl O. Hartmann
Trustee Assistant Secretary
Philip D. English Gary L. French
Trustee Treasurer
William A. Humenuk Robert R. Flaherty
Trustee Assistant Treasurer
Charles H. Salisbury, Jr. Gordon M. Shone
Trustee and Executive Vice President Assistant Treasurer
Peter M. Whitman, Jr.
Trustee
================================================================================
Investment Adviser
Tom Johnson Investment Management, Inc.
211 North Robinson,
Suite 450
Oklahoma City, OK 73102
Administrator
UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110
Custodian
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, NY 11245
Legal Counsel
Drinker, Biddle & Reath LLP
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, PA 19107-3496
Independent Accountants ------------------------------------
Price Waterhouse LLP This report has been prepared for
160 Federal Street shareholders and may be distributed
Boston, MA 02110 to others only if preceded or
accompanied by a current prospectus.
Distributor ------------------------------------
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
