<PAGE>
Securities Act File No. 33-79858
Investment Company Act of 1940 File No. 811-8544
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Post-Effective Amendment No. 30 /X/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/
Amendment No. 31 /X/
UAM FUNDS TRUST
(Exact Name of Registrant as specified in Charter)
--------------------------------------------------
c/o UAM Fund Services, Inc.
211 Congress St., 4th Floor
Boston, Massachusetts 02110
Registrant's Telephone Number (617) 542-5440
(Address of Principal Executive Offices)
-----------------------------------------
Michael E. DeFao, Esq.
Secretary
UAM Fund Services, Inc.
211 Congress Street
Boston, Massachusetts 02110
(Name and Address of Agent for Service)
----------------------------------------
COPY TO:
Audrey C. Talley, Esq.
Drinker Biddle & Reath LLP
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, PA 19107-3469
It is proposed that this filing become effective (check appropriate box):
[ ] Immediately upon filing pursuant to Paragraph (b)
[X] on April 28, 1999 pursuant to Paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a) (1)
[ ] on (date) pursuant to paragraph (a) (1)
[ ] 75 days after filing pursuant to Paragraph (a) (2)
[ ] on (date) pursuant to Paragraph (a) (2) of Rule 485
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date
for a previously filed post-effective amendment.
<PAGE>
PART A
UAM FUNDS TRUST
The following Prospectuses are included in this Post-Effective Amendment No. 30.
. Heitman Real Estate Portfolio Institutional Class Shares
. Heitman Real Estate Portfolio Advisor Class Shares
The following Prospectuses are contained in Post-Effective Amendment No. 29
filed April 12, 1999:
. Dwight Capital Preservation Portfolio Institutional Class Shares
. Dwight Capital Preservation Portfolio Institutional Service Class Shares
The following Prospectuses are contained in Post-Effective Amendment No. 24
filed July 10, 1998:
. BHM&S Total Return Bond Portfolio Institutional Class Shares
. BHM&S Total Return Bond Portfolio Institutional Service Class Shares
. Chicago Asset Management Intermediate Bond Portfolio Institutional Class
Shares
. Chicago Asset Management Value/Contrarian Portfolio Institutional Class
Shares
. FPA Crescent Portfolio Institutional Class Share
. FPA Crescent Portfolio Institutional Service Class Shares
. Hanson Equity Portfolio Institutional Class Shares
. Jacobs International Octagon Portfolio Institutional Class Shares
. MJI International Equity Portfolio Institutional Class Shares
. MJI International Equity Portfolio Institutional Service Class Shares
. TJ Core Equity Portfolio Institutional Service Class Shares
The following Prospectuses are contained in Post-Effective Amendment No. 23
filed July 2, 1998:
. Clipper Focus Portfolio Institutional Class Shares
. Clipper Focus Portfolio Institutional Service Class Shares
The Institutional Class Prospectus of PR Mid Cap Growth Portfolio is contained
in Post-Effective Amendment No. 22 filed June 24, 1998:
The Institutional Class Prospectus of Cambiar Opportunity Portfolio is contained
in Post-Effective Amendment No. 18 filed January 23, 1998:
<PAGE>
UAM Funds
Funds for the Informed Investor(SM)
Hietman Real Estate Portfolio
Institutional Class Prospectus April 28, 1999
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UAM(R)
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this prospectus. Any representation to
the contrary is a criminal offense.
<PAGE>
Table Of Contents
<TABLE>
<S> <C>
Portfolio Summary ............................................................ 1
What is the Objective of the Portfolio?.................................... 1
What are the Principal Investment Strategies of the Portfolio?............. 1
What are the Principal Risks of the Portfolio?............................. 1
How Has the Portfolio Performed?........................................... 2
What are the Portfolio's Fees and Expenses?................................ 3
Investing with the UAM Funds ................................................. 4
Buying Shares.............................................................. 4
Redeeming Shares........................................................... 5
Exchanging Shares.......................................................... 5
Transaction Policies....................................................... 5
Account Policies ............................................................. 9
Small Accounts............................................................. 9
Distributions.............................................................. 9
Federal Taxes.............................................................. 9
Fund Details ................................................................ 11
Principal Investments And Risks Of The Portfolio........................... 11
Other Investment Practices and Strategies.................................. 12
Year 2000.................................................................. 13
Investment Management...................................................... 13
Shareholder Servicing Arrangements......................................... 15
Financial Highlights ........................................................ 16
</TABLE>
<PAGE>
Portfolio Summary
WHAT IS THE OBJECTIVE OF THE PORTFOLIO?
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The portfolio seeks high total return consistent with reasonable risk by
investing primarily in equity securities of public companies principally
engaged in the real estate business. The portfolio cannot guarantee it
will meet its investment objective. The portfolio may not change its in-
vestment objective without shareholder approval.
WHAT ARE THE PRINCIPAL INVESTMENT STRATEGIES OF THE PORTFOLIO?
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This section summarizes the principal investment strategies of the portfo-
lio. For more information see "PRINCIPAL INVESTMENTS AND RISKS OF THE
PORTFOLIO."
The portfolio invests primarily in securities of companies engaged in the
real estate business, including real estate investment trusts. The invest-
ment adviser selects each investment based upon its determination that the
anticipated total return of the investment, considering both income and
potential for capital appreciation, is high relative to the risk assumed.
WHAT ARE THE PRINCIPAL RISKS OF THE PORTFOLIO?
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This section summarizes the principal risks associated with investing in
the portfolio. For more information see "PRINCIPAL INVESTMENTS AND RISKS
OF THE PORTFOLIO."
Risks Common to All Mutual Funds
As with all mutual funds, at any time your investment in a portfolio may
be worth more or less than the price that you originally paid for it. You
may lose money by investing in the portfolio because:
. The value of the securities it owns changes, sometimes rapidly and un-
predictably.
. The portfolio is not successful in reaching its goal because of its
strategy or because it did not implement its strategy properly.
. Unforeseen occurrences in the securities markets negatively affect the
portfolio.
1
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Heitman Real Estate Portfolio
The portfolio's main risks are associated with investing in equity securi-
ties and concentrating its investments in the real estate industry.
Developments in the real estate industry will greatly affect the value of
the shares of the portfolio. In addition, the portfolio may experience
greater price changes than a mutual fund that has securities representing
a broader range of industries. The real estate industry is particularly
sensitive to:
. Economic factors, such as interest rate changes or market recessions.
. Over-building in one particular area, changes in zoning laws, or
changes in neighborhood values.
. Increases in property taxes.
. Casualty and condemnation losses.
. Regulatory limitations on rents.
Equity securities may experience sudden, unpredictable drops in value or
long periods of decline in value. This may occur because of factors af-
fecting the securities markets generally, an entire industry or a particu-
lar company.
HOW HAS THE PORTFOLIO PERFORMED?
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The bar chart and table below illustrate how the performance of the port-
folio has varied from year to year and provide some indication of the
risks of investing in the portfolio. The bar chart shows the investment
returns of the portfolio for each calendar year. The table following the
bar chart compares the average annual returns of the portfolio to those of
a broad-based securities market index. Past performance does not guarantee
future results.
[BAR GRAPH APPEARS HERE]
1990 -22.10%
1991 28.56%
1992 17.87%
1993 19.90%
1994 3.00%
1995 10.87%
1996 38.06%
1997 21.12%
1998 -15.12%
2
<PAGE>
<TABLE>
<CAPTION>
Total Quarter
Return Ended
---------------------------------
<S> <C> <C>
Highest Quarter 3/31/91 23.02%
---------------------------------
Lowest Quarter 9/30/90 -17.80
</TABLE>
Average Annual Returns
<TABLE>
<CAPTION>
Since
Periods ended 12/31/98 1 Year 5 Year Inception*
-----------------------------------------------------------------
<S> <C> <C> <C>
Heitman Real Estate Portfolio -15.12% 10.14% 8.33%
-----------------------------------------------------------------
Wilshire Real Estate Securities Index -17.43% 9.36% 4.52%
-----------------------------------------------------------------
S&P 500 Index 28.60% 24.05% 18.77%
</TABLE>
* The portfolio began operations on 3/13/89.
WHAT ARE THE PORTFOLIO'S FEES AND EXPENSES?
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Annual Fund Operating Expenses (Expenses That Are Deducted From the Assets of
the Portfolio)
This table describes the fees and expenses that you may pay if you buy and
hold shares of the portfolio.
<TABLE>
-----------------------
<S> <C>
Management fees 0.75%
-----------------------
Other expenses 0.48%
-----------------------
Total expenses 1.23%
</TABLE>
Example
This example can help you to compare the cost of investing in this portfo-
lio to the cost of investing in other mutual funds. The example assumes
you invest $10,000 in the portfolio for the periods shown and then redeem
all of your shares at the end of those periods. The example also assumes
that you earned a 5% return on your investment each year and that you paid
the total expenses stated above throughout the period of your investment.
Although your actual costs may be higher or lower, based on these assump-
tions your costs would be:
<TABLE>
-----------------
<S> <C>
1 Year $ 124
-----------------
3 Years $ 387
-----------------
5 Years $ 670
-----------------
10 Years $1,477
</TABLE>
3
<PAGE>
Investing with the UAM Funds
BUYING SHARES
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To open an account To buy more shares
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By Mail Send a check or money Send a check and, if pos-
order and your account sible, the "Invest by
application to the UAM Mail" stub that accompa-
Funds. Make checks pay- nied your statement to the
able to "UAM Funds" UAM Funds. Be sure your
(the UAM Funds will not check identifies clearly
accept third-party your name, account number
checks). and the UAM Fund into
which you want to invest.
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By Wire Call 1-877-826-5465 for Call 1-877-826-5465 to get
an account number and a wire control number and
wire control number and wire your money to the UAM
then send your com- Funds as follows.
pleted account applica-
tion to the UAM Funds.
Wiring Instructions
United Missouri Bank
ABA # 101000695
UAM Funds
DDA Acct. # 9870964163
Ref: portfolio name/account number/
account name/wire control number
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By Automatic Not Available To set up a plan, mail a
Investment completed application to
Plan (Via ACH) the UAM Funds. To cancel
or change a plan, write to
the UAM Funds. Allow up to
15 days to create the plan
and 3 days to cancel or
change it.
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Minimum $2,500 -- regular ac- $100
Investments count
$500 -- IRAs
$250 -- spousal IRAs
UAM Funds
PO Box 419081
Kansas City, MO 64141-6081
(Toll free) 1-877-UAM-LINK (826-5465)
4
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REDEEMING SHARES
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By Mail Send a letter signed by all registered parties on the ac-
count to the UAM Funds specifying:
. The UAM Fund.
. The account number.
. The dollar amount or number of shares you wish to re-
deem.
Certain shareholders may have to include additional docu-
ments. Please see the Statement of Additional Information
(SAI) if you need more information.
---------------------------------------------------------------------------
By Telephone You must first establish the telephone redemption privi-
lege (and, if desired, the wire redemption privilege) by
completing the appropriate sections of the account appli-
cation.
Call 1-877-826-5465 to redeem your shares. Based on your
instructions, the UAM Funds will mail your proceeds to you
or wire them to your bank.
---------------------------------------------------------------------------
By If your account balance is at least $10,000, you may
Systematic transfer as little as $100 per month from your UAM account
Withdrawal to your financial institution.
Plan
(Via ACH)
To participate in this service, you must complete the ap-
propriate sections of the account application and mail it
to the UAM Funds.
EXCHANGING SHARES
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At no charge, you may exchange shares of one UAM Fund for shares of the
same class of any other UAM Fund by writing to or calling the UAM Funds.
Before exchanging your shares, please read the prospectus of the UAM Fund
for which you want to exchange. You may obtain any UAM Fund prospectus by
calling 1-877-826-5465. You may not exchange shares represented by certif-
icates over the telephone. You may only exchange shares between accounts
with identical registrations (i.e., the same names and addresses).
TRANSACTION POLICIES
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Calculating Your Share Price
You may buy, sell or exchange shares of a UAM Fund at a price equal to its
net asset value (NAV) next computed after it receives your order. The
portfolio calculates its NAV as of the close of trading on the New York
5
<PAGE>
Stock Exchange (NYSE) (generally 4:00 p.m. Eastern Time) on each day the
NYSE is open. Therefore, to receive the NAV on any given day, the UAM
Funds must accept your order by the close of trading on the NYSE that day.
Otherwise, you will receive the NAV that is calculated on the close of
trading on the following day. The UAM Funds are open for business on the
same days as the NYSE, which is closed on weekends and certain holidays.
Buying or Selling Shares through a Financial Intermediary
You may buy, exchange or sell shares of the UAM Funds through a financial
intermediary (such as a financial planner or adviser). Generally, to buy
or sell shares at the NAV on any given day, your financial intermediary
must receive your order by the close of trading on the NYSE that day. Your
financial intermediary is responsible for transmitting all subscription
and redemption requests, investment information, documentation and money
to the UAM Funds on time.
Certain financial intermediaries have agreements with the UAM Funds that
allow them to enter confirmed purchase or redemption orders on behalf of
clients and customers. Under this arrangement, the financial intermediary
must send your payment to the UAM Funds by the time they price their
shares on the following day. If your financial intermediary fails to do
so, it may be responsible for any resulting fees or losses.
Calculating NAV
The UAM Funds calculate their NAV by adding the total value of their as-
sets, subtracting their liabilities and then dividing the result by the
number of shares outstanding. The UAM Funds value their investments with
readily available market quotations at market value. Investments that do
not have readily available market quotations are valued at fair value, ac-
cording to guidelines established by the UAM Funds. The UAM Funds may also
value securities at fair value when events occur that make established
valuation methods (such as stock exchange closing prices) unreliable. The
UAM Funds value debt securities that will mature in 60 days or less at am-
ortized cost, which approximates market value.
In-Kind Transactions
Under certain conditions and at the UAM Funds' discretion, you may pay for
shares of a portfolio with securities instead of cash. In addition, the
UAM Funds may pay all or part of your redemption proceeds with securities
instead of cash.
6
<PAGE>
Payment of Redemption Proceeds
The UAM Funds will pay for all shares redeemed within seven days after
they receive a redemption request in proper order. If you redeem shares
that were purchased by check, you will not receive your redemption pro-
ceeds until the check has cleared, which may take up to 15 days from pur-
chase date. You may avoid these delays by paying for shares with a certi-
fied check, bank check or money order.
Signature Guarantee
You must have your signature guaranteed when (1) you want the proceeds
from your redemption sent to a person or address different from that reg-
istered on the account, or (2) you request a transfer of your shares.
You may obtain a signature guarantee from most banks, savings institu-
tions, securities dealers, national securities exchanges, registered secu-
rities associations, clearing agencies and other guarantor institutions. A
notary public cannot guarantee a signature.
Telephone Transactions
The UAM Funds will employ reasonable procedures to confirm that instruc-
tions communicated by telephone are genuine; they may be liable for any
losses if they fail to do so. The UAM Funds will not be responsible for
any loss, liability, cost or expense for following instructions received
by telephone that it reasonably believes to be genuine.
Rights Reserved by the UAM Funds
Purchases
At any time and without notice, the UAM Funds may:
. Stop offering shares of a portfolio.
. Reject any purchase order.
. Bar an investor engaged in a pattern of excessive trading from buying
shares of any portfolio. (Excessive trading can hurt the performance
of a portfolio by disrupting its management and by increasing its ex-
penses.)
7
<PAGE>
Redemptions
At any time, the UAM Funds may change or eliminate any of the redemption
methods described above, except redemption by mail. The UAM Funds may sus-
pend your right to redeem if:
. Trading on the NYSE is restricted.
. The SEC tells the UAM Funds to delay redemptions.
Exchanges
The UAM Funds may:
. Modify or cancel the exchange program at any time on 60 days' written
notice to shareholders.
. Reject any request for an exchange.
. Limit or cancel a shareholder's exchange privilege, especially when an
investor is engaged in a pattern of excessive trading.
8
<PAGE>
Account Policies
SMALL ACCOUNTS
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The UAM Funds may redeem your shares without your permission if the value
of your account falls below 50% of the required minimum initial invest-
ment. This provision does not apply:
. To retirement accounts and certain other accounts.
. When the value of your account falls below the required minimum be-
cause of market fluctuations.
The UAM Funds will notify you before liquidating your account and allow
you 60 days to increase the value of your account.
DISTRIBUTIONS
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Normally, the portfolio distributes its net investment income quarterly.
In addition, it distributes its net capital gains once a year. The UAM
Funds will automatically reinvest dividends and distributions in addi-
tional shares of the portfolio, unless you elect on your account applica-
tion to receive them in cash.
FEDERAL TAXES
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The following is a summary of the federal income tax consequences of in-
vesting in the UAM Funds. You may also have to pay state and local taxes
on your investment. You should always consult your tax advisor for spe-
cific guidance regarding the tax effect of your investment in the UAM
Funds.
Taxes on Distributions
The distributions of the portfolio will generally be taxable to sharehold-
ers as ordinary income or capital gains (which may be taxable at different
rates depending on the length of time the portfolio held the relevant as-
sets). You will be subject to income tax on these distributions regardless
of whether they are paid in cash or reinvested in additional shares. Once
a year UAM Funds will send you a statement showing the types and total
amount of distributions you received during the previous year.
You should note that if you purchase shares just before a distribution,
the purchase price would reflect the amount of the upcoming distribution.
In this case, you would be taxed on the entire amount of the distribution
received, even though, as an economic matter, the distribution simply
9
<PAGE>
constitutes a return of your investment. This is known as "buying into a
dividend" and should be avoided. Call 1-877-826-5465 to find out when the
portfolio expects to make a distribution to shareholders.
Taxes on Redemptions or Exchanges
When you redeem or exchange shares in any UAM Fund, you may recognize a
gain or loss for income tax purposes. This gain or loss will be based on
the difference between your tax basis in the shares and the amount you re-
ceive for them. (To aid in computing your tax basis, you generally should
retain your account statements for the periods during which you held
shares.) Any loss realized on shares held for six months or less will be
treated as a long-term capital loss to the extent of any capital gain div-
idends that were received with respect to the shares.
The one major exception to these tax principles is that distributions on,
and sales, exchanges and redemptions of, shares held in an IRA (or other
tax-qualified plan) will not be currently taxable, but they may be taxable
at some time in the future.
Backup Withholding
By law, the UAM Funds must withhold 31% of your distributions and proceeds
if you have not provided complete, correct taxpayer information.
10
<PAGE>
Fund Details
PRINCIPAL INVESTMENTS AND RISKS OF THE PORTFOLIO
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This section briefly describes the principal investment strategies the
portfolio may employ in seeking its objectives. For more information con-
cerning these investment practices and their associated risks, please read
the "PORTFOLIO SUMMARY" and the SAI. You can find information on the port-
folio's recent strategies and holdings in its annual report. The portfolio
may change these strategies without shareholder approval.
The portfolio normally invests at least 65% of its assets in common stocks
of public companies principally engaged in the real estate industry. The
adviser considers a company "principally engaged" in the real estate in-
dustry if it derives at least 50% of the fair market value of its assets,
or at least 50% of its gross income or net profits, from the ownership,
construction, management, financing or sale of real estate.
The portfolio may invest up to 35% of its total assets in equity securi-
ties of companies not principally engaged in the real estate business, but
which are engaged in businesses related to real estate, such as manufac-
turers and distributors of building supplies, financial institutions which
make or service mortgages, and companies whose real estate assets are sub-
stantial relative to the companies' stock market valuations, such as re-
tailers, railroads and paper and forest products companies.
Under normal circumstances, the portfolio may invest approximately 60% to
90% of its assets may be invested in real estate investment trusts
(REITs). The portfolio anticipates that approximately 10% to 15% of the
REITs held by the portfolio will have operating histories of less than
three years.
Investment Process
The adviser analyzes and selects investments that will normally provide a
relatively high and stable yield and are good prospects for future growth
in dividends. The adviser considers companies that it expects will gener-
ate good cash flow from the underlying properties, have proven management
track records, and histories of increasing dividends. Most of these compa-
nies specialize in one or two product types, such as office buildings,
shopping centers, industrial complexes, and hotels, or specialize in a
particular geographic region. The adviser then looks to purchase stocks
that are selling at a discount to its estimate of the market value of
11
<PAGE>
the underlying real estate. The adviser re-evaluates and considers selling
stocks that become overvalued or no longer contain these fundamental char-
acteristics.
Equity Securities
Equity securities represent an ownership interest, or the right to acquire
an ownership interest, in an issuer. Different types of equity securities
provide different voting and dividend rights and priority in case of the
bankruptcy of the issuer. Equity securities include common stocks, pre-
ferred stocks, convertible securities, rights and warrants.
Equity securities may lose value because of factors affecting the securi-
ties markets generally, such as adverse changes in economic conditions,
the general outlook for corporate earnings, interest rates or investor
sentiment. These circumstances may lead to long periods of poor perfor-
mance, such as during a "bear market." Equity securities may also lose
value because of factors affecting an entire industry, such as increases
in production costs, or factors directly related to a specific company,
such as decisions made by its management.
Real Estate Investment Trusts
The portfolio may invest in separately managed trusts that make invest-
ments in various real estate businesses (REITs). An equity REIT may own
real estate and pass the income it receives from rents from the proper-
ties, or the capital gain it receives from selling a building, to its
shareholders. A mortgage REIT specializes in lending money to building de-
velopers and passes the interest income it receives from the mortgages to
shareholders. A hybrid REIT combines the characteristics of equity and
mortgage REITs. REITs may invest in real estate such as shopping centers,
office buildings, apartment complexes, hotels and casinos.
REITs may expose the portfolio to similar risks associated with direct in-
vestment in real estate. REITs are more dependent upon specialized manage-
ment skills, have limited diversification and are, therefore, generally
dependent on their ability to generate cash flow to make distributions to
shareholders.
OTHER INVESTMENT PRACTICES AND STRATEGIES
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As described below, the portfolio may deviate from its investment strategy
from time to time. In addition, the portfolio may employ investment prac-
tices that are not described in this prospectus, such as repurchase agree-
ments, when-issued and forward commitment transactions, lending of securi-
ties, borrowing and other techniques. For more information con-
12
<PAGE>
cerning the risks associated with these investment practices, you should
read the SAI.
Short-Term Investing
At times, the adviser may decide to suspend temporarily the normal invest-
ment activities of the portfolio by investing up to 100% of its assets in
a variety of securities, such as U.S. government and other high quality
and short-term debt obligations. The adviser may temporarily adopt a de-
fensive position to reduce changes in the value of the shares of the port-
folio that may result from adverse market, economic, political or other
developments.
When the adviser pursues a temporary defensive strategy, the portfolio may
not profit from favorable developments that it would have otherwise prof-
ited from if it were pursuing its normal strategies. Likewise, these
strategies may prevent the portfolio from achieving its stated objectives.
YEAR 2000
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Many computer programs in use today cannot distinguish the year 2000 from
the year 1900 because of the way they encode and calculate dates. Conse-
quently, these programs may not be able to perform necessary functions and
could disrupt the operations of the UAM Funds or financial markets in gen-
eral. The year 2000 issue affects all companies and organizations, includ-
ing those that provide services to the UAM Funds and those in which the
UAM Funds invest.
The UAM Funds and their advisers, administrator, distributor and transfer
agent are taking steps they believe are reasonably necessary to address
any portfolio-related year 2000-related computer problems. They are ac-
tively working on necessary changes to their own computer systems to pre-
pare for the year 2000 and expect that their systems will be adapted be-
fore that date. They are also requesting information on each service prov-
ider's state of readiness and contingency plan. However, at this time the
degree to which the year 2000 issue will affect the UAM Funds' investments
or operations cannot be predicted. Any negative consequences could ad-
versely affect your investment in the UAM Funds.
INVESTMENT MANAGEMENT
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Investment Adviser
Heitman/PRA Securities Advisors LLC, a Delaware limited liability company
located at 180 LaSalle Street, Suite 3600, Chicago, Illinois, 60601, is
the investment adviser to the portfolio. The adviser manages and su-
13
<PAGE>
pervises the investment of the portfolio's assets on a discretionary ba-
sis. The adviser is a wholly owned subsidiary of Heitman Financial LLC, an
affiliate of United Asset Management Corporation. The adviser provides in-
vestment management services to corporations, foundations, endowments,
pension and profit sharing plans, trusts, estates and other institutions
as well as individuals.
During the fiscal year ended December 31, 1998, the portfolio paid the ad-
viser 0.71% of its average net assets in management fees.
Portfolio Managers
A team of investment professionals is primarily responsible for the day-
to-day management of the portfolio. Listed below are the investment pro-
fessionals of the adviser that comprise the team and a description of
their business experience during the past five years.
<TABLE>
<CAPTION>
Name & Title Experience
------------------------------------------------------------
<S> <C>
Dean A. Sotter Mr. Sotter is President of the adviser
President with overall responsibility for
portfolio management and marketing.
Prior to joining the adviser, Mr.
Sotter was a Partner of PRA Securities
Advisors, L.P. He was a Portfolio
Manager and Vice President of JMB
Institutional Realty Corporation from
1985-1992, where his responsibilities
included property level analysis,
budgeting and valuation as well as
financial reporting and client
communications.
------------------------------------------------------------
Timothy J. Pire Mr. Pire is Vice President of the
Vice President adviser with responsibility for
portfolio management, research, and
analysis of publicly traded real estate
securities and implementation of the
investment strategy through portfolio
management. Prior to joining the
adviser, Mr. Pire served as a Research
Analyst with PRA Securities Advisors,
L.P., and he was an Associate Appraiser
with Lyon, Skelte & Speirs in Seattle,
Washington from 1990-1992 where he was
involved in valuation of commercial
real estate and writing full narrative
appraisals
------------------------------------------------------------
Randall E. Newsome Mr. Newsome is Vice President of the
Vice President adviser with responsibility for
portfolio management, research, and
analysis of publicly traded real estate
securities and implementation of the
investment strategy through portfolio
management. Mr. Newsome also oversees
the adviser's trading positions. Prior
to joining the adviser, Mr. Newsome
served as a Research Analyst with PRA
Securities Advisors, L.P. and he was a
Vice President with The Stratus
Corporation in Chicago, Illinois from
1989-1993 where he was responsible for
property management, leasing and
construction management.
</TABLE>
14
<PAGE>
SHAREHOLDER SERVICING ARRANGEMENTS
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Shareholder Servicing
Certain financial intermediaries (service agents) may charge their clients
account fees for buying or redeeming shares of the UAM Funds. These fees
may include transaction fees and/or service fees paid by the UAM Funds
from their assets attributable to the service agent. The UAM Funds do not
pay these fees on shares purchased directly from the UAM Funds' distribu-
tors. The service agents may provide shareholder services to their clients
that are not available to a shareholder dealing directly with the UAM
Funds. Each service agent is responsible for transmitting to its clients a
schedule of any such fees and information regarding any additional or dif-
ferent purchase or redemption conditions. You should consult your service
agent for information regarding these fees and conditions.
The adviser may pay its affiliated companies for referring investors to
the portfolio. The adviser and its affiliates may, at their own expense,
pay qualified service providers for marketing, shareholder servicing, rec-
ord-keeping and/or other services performed with respect to the portfolio.
The UAM Funds also offer Institutional Service Class shares, which pay
marketing or shareholder servicing fees, and Advisor Class shares, which
impose a sales load and fees for marketing and shareholder servicing,
for certain of its portfolios. Not all of the UAM Funds offer all of these
classes.
15
<PAGE>
Financial Highlights
The financial highlights table is intended to help you understand the fi-
nancial performance of the portfolio for the fiscal periods indicated.
Certain information contained in the table reflects the financial results
for a single Institutional Class share of the portfolio. The total returns
in the table represent the rate that an investor would have earned on an
investment in the portfolio assuming all dividends and distributions were
reinvested. PricewaterhouseCoopers LLP has audited this information. The
financial statements and the unqualified opinion of PricewaterhouseCoopers
LLP are included in the annual report of the portfolio, which is available
upon request by calling the UAM Funds at 1-877-826-5465.
<TABLE>
<CAPTION>
Fiscal Year Ended December 31, 1998 1997 1996 1995
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $10.49 $10.96 $8.65 $8.30
-------------------------------------------------------------------------------
Income from Investment Operations
Net Investment Income 0.32 0.40 0.37 0.33
Net Gains or Losses on Securities
(Realized and Unrealized) (1.88) 1.82 2.82 0.53
-------------------------------------------------------------------------------
Total From Investment Operations (1.56) 2.22 3.19 0.86
-------------------------------------------------------------------------------
Less Distributions
Net Investment Income (0.31) (0.40) (0.37) (0.33)
In Excess of Net Investment Income - (0.05) (0.10) -
Capital Gains - (2.24) (0.41) -
Tax Return of Capital (a) - - - (0.18)
-------------------------------------------------------------------------------
Total Distributions (0.31) (2.69) (0.88) (0.51)
-------------------------------------------------------------------------------
Net Asset Value, End of Year $8.62 $10.49 $10.96 $8.65
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Total Return (15.12)% 21.12% 38.06% 10.87%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (Thousands) $79,717 $134,746 $129,275 $95,692
-------------------------------------------------------------------------------
Ratio of Expenses to Average Net Assets 1.22% 1.09% 1.23% 1.29%
-------------------------------------------------------------------------------
Ratio of Net Investment Income to Average
Net Assets 3.14% 3.57% 4.09% 3.97%
-------------------------------------------------------------------------------
Portfolio Turnover Rate 80% 90% 60% 65%
</TABLE>
(a) Historically, the portfolio has distributed to its shareholders
amounts approximating dividends received from the REITs. A portion of
such distributions may be a return of capital.
16
<PAGE>
<TABLE>
<CAPTION>
Three-Month Fiscal Year
Period Ended Ended
December 31, September 30,
1994 1994
-----------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period $9.23 $10.95
-----------------------------------------------------------------------------
Income from Investment Operations
Net Investment Income 0.10 0.32
Net Gains or Losses on Securities (Realized and
Unrealized) (0.05) (0.92)
-----------------------------------------------------------------------------
Total From Investment Operations 0.05 (0.60)
-----------------------------------------------------------------------------
Less Distributions
Net Investment Income (0.10) (0.31)
Capital Gains (0.77) (0.67)
Tax Return of Capital (a) (0.11) (0.14)
Total Distributions (0.98) (1.12)
Net Asset Value, End of Period $8.30 $9.23
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
Total Return 0.65% (5.22)%
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Period (Thousands) $105,569 $116,268
-----------------------------------------------------------------------------
Ratio of Expenses to Average Net Assets 1.28%* 1.22%
-----------------------------------------------------------------------------
Ratio of Net Investment Income to Average Net
Assets 4.35%* 2.87%
-----------------------------------------------------------------------------
Portfolio Turnover Rate 38%* 90%
</TABLE>
* Annualized
(a) Historically, the portfolio has distributed to its shareholders
amounts approximating dividends received from the REITs. A portion of
such distributions may be a return of capital.
17
<PAGE>
Portfolio Codes
The reference information below will be helpful to you when you contact
the UAM Funds by phone or through the internet to purchase or exchange
shares of a UAM Fund, check daily NAVs or get additional information.
<TABLE>
<CAPTION>
Trading Symbol CUSIP Number Portfolio Number
------------------------------------------------------------------------------------------
<S> <C> <C>
PRREX 902556794 892
</TABLE>
<PAGE>
Heitman Real Estate Portfolio
For investors who want more information about the portfolio, the following
documents are available upon request.
Annual/Semi-Annual Reports
The annual and semi-annual reports of the portfolio provide additional in-
formation about the portfolio's investments. In the annual report, you
will also find a discussion of the market conditions and investment strat-
egies that significantly affected the performance of Heitman Real Estate
Portfolio during the last fiscal year.
Statement of Additional Information
The SAI contains additional detailed information about the portfolio and
is incorporated by reference into (legally part of) this prospectus.
How to Get More Information
Investors can receive free copies of these materials, request other infor-
mation about the portfolio and make shareholder inquiries by writing to or
calling:
UAM Funds
PO Box 419081
Kansas City, MO 64141-6081
(toll free) 1-877-UAM-LINK (826-5465)
www.uam.com
For a fee, you can get the reports of the portfolio and SAI by writing to
the SEC's Public Reference Section, Washington, D.C. 20459-6009, or by
calling the SEC at 1-800-SEC-0330. You can get copies of this information
for free, on the SEC's Internet site at www.sec.gov.
The portfolio's Investment Company Act of 1940 file number is 811-8544
[UAM LOGO APPEARS HERE]
<PAGE>
UAM Funds
Funds for the Informed Investor(SM)
Heitman Real Estate Portfolio
Advisor Class Prospectus April 28, 1999
================================================================================
UAM(R)
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this prospectus. Any representation to
the contrary is a criminal offense.
- --------------------------------------------------------------------------------
<PAGE>
Table Of Contents
Portfolio Summary ......................................................... 1
What is the Objective of the Portfolio?.................................... 1
What are the Principal Investment Strategies of the Portfolio?............. 1
What are the Principal Risks of the Portfolio?............................. 1
How Has the Portfolio Performed?........................................... 2
What are the Portfolio's Fees and Expenses?................................ 3
Investing with the UAM Portfolio .......................................... 5
Buying Shares.............................................................. 5
Redeeming Shares........................................................... 6
Exchanging Shares.......................................................... 6
Transaction Policies....................................................... 6
Account Policies .......................................................... 10
Small Accounts............................................................. 10
Distributions.............................................................. 10
Federal Taxes.............................................................. 10
Fund Details .............................................................. 12
Principal Investments And Risks Of The Portfolio........................... 12
Other Investment Practices and Strategies.................................. 13
Year 2000.................................................................. 14
Investment Management...................................................... 14
Shareholder Servicing Arrangements......................................... 16
Financial Highlights ...................................................... 17
<PAGE>
Portfolio Summary
WHAT IS THE OBJECTIVE OF THE PORTFOLIO?
- -------------------------------------------------------------------------------
The portfolio seeks high total return consistent with reasonable risk by
investing primarily in equity securities of public companies principally
engaged in the real estate business. The portfolio cannot guarantee it
will meet its investment objective. The portfolio may not change its in-
vestment objective without shareholder approval.
WHAT ARE THE PRINCIPAL INVESTMENT STRATEGIES OF THE PORTFOLIO?
- -------------------------------------------------------------------------------
This section summarizes the principal investment strategies of the portfo-
lio. For more information see "PRINCIPAL INVESTMENTS AND RISKS OF THE
PORTFOLIO."
The portfolio invests primarily in securities of companies engaged in the
real estate business, including real estate investment trusts. The invest-
ment adviser selects each investment based upon its determination that the
anticipated total return of the investment, considering both income and
potential for capital appreciation, is high relative to the risk assumed.
WHAT ARE THE PRINCIPAL RISKS OF THE PORTFOLIO?
- -------------------------------------------------------------------------------
This section summarizes the principal risks associated with investing in
the portfolio. For more information see "PRINCIPAL INVESTMENTS AND RISKS
OF THE PORTFOLIO."
Risks Common to All Mutual Funds
As with all mutual funds, at any time your investment in a portfolio may
be worth more or less than the price that you originally paid for it. You
may lose money by investing in the portfolio because:
. The value of the securities it owns changes, sometimes rapidly and un-
predictably.
. The portfolio is not successful in reaching its goal because of its
strategy or because it did not implement its strategy properly.
. Unforeseen occurrences in the securities markets negatively affect the
portfolio.
1
<PAGE>
Heitman Real Estate Portfolio
The portfolio's main risks are associated with investing in equity securi-
ties and concentrating its investments in the real estate industry.
Developments in the real estate industry will greatly affect the value of
the shares of the portfolio. In addition, the portfolio may experience
greater price changes than a mutual fund that has securities representing
a broader range of industries. The real estate industry is particularly
sensitive to:
. Economic factors, such as interest rate changes or market recessions.
. Over-building in one particular area, changes in zoning laws, or
changes in neighborhood values.
. Increases in property taxes.
. Casualty and condemnation losses.
. Regulatory limitations on rents.
Equity securities may experience sudden, unpredictable drops in value or
long periods of decline in value. This may occur because of factors af-
fecting the securities markets generally, an entire industry or a particu-
lar company.
HOW HAS THE PORTFOLIO PERFORMED?
- -------------------------------------------------------------------------------
The bar chart and table below illustrate how the performance of the port-
folio has varied from year to year and provide some indication of the
risks of investing in the portfolio. The bar chart shows the investment
returns of the portfolio for each calendar year. The table following the
bar chart compares the average annual returns of the portfolio to those of
a broad-based securities market index. Past performance does not guarantee
future results.
[CHART FOR UAM APPEARS HERE]
Calendar Year Returns
1996 37.44%
1997 20.44%
1998 -15.54%
2
<PAGE>
<TABLE>
<CAPTION>
Total Quarter
Return Ended
---------------------------------
<S> <C> <C>
Highest Quarter 19.35% 12/31/96
---------------------------------
Lowest Quarter -9.02% 9/30/98
</TABLE>
Average Annual Returns
<TABLE>
<CAPTION>
Since
Periods ended 12/31/98 1 Year Inception*
----------------------------------------------------------
<S> <C> <C>
Heitman Real Estate Portfolio -15.54% 13.46%
----------------------------------------------------------
Wilshire Real Estate Securities Index -17.43% 11.05%
----------------------------------------------------------
S&P 500 Index 28.60% 29.28%
</TABLE>
* The portfolio began operations on 5/15/95. Index comparisons begin on
4/30/95.
WHAT ARE THE PORTFOLIO'S FEES AND EXPENSES?
- -------------------------------------------------------------------------------
Shareholder Fees (Fees That Are Deducted Directly From Your Investment)
This table describes the transaction expenses that are charged directly to
your account.
<TABLE>
----------------------------------------------------------------------------
<S> <C>
Maximum sales charge (load) imposed on purchases (as a percentage of
the offering price) * 4.75%
</TABLE>
* Long-term shareholders may pay more than the economic equivalent of the
maximum front-end sales charge permitted by rules of the National Asso-
ciation of Securities Dealers, Inc.
Annual Fund Operating Expenses (Expenses That Are Deducted From the Assets of
the Portfolio)
This table describes the fees and expenses that you may pay if you buy and
hold Advisor Class Shares of the portfolio.
<TABLE>
---------------------------------------------
<S> <C>
Management fees 0.75%
---------------------------------------------
Distribution and Service (12b-1) fees 0.50%
---------------------------------------------
Other expenses 0.48%
---------------------------------------------
Total expenses 1.73%
</TABLE>
3
<PAGE>
Example
This example can help you to compare the cost of investing in this portfo-
lio to the cost of investing in other mutual funds. The example assumes
you invest $10,000 in the portfolio for the periods shown and then redeem
all of your shares at the end of those periods. The example also assumes
that you earned a 5% return on your investment each year and that you paid
the total expenses stated above throughout the period of your investment,
plus the maximum sales charge (load) that the portfolio may impose on pur-
chases. Although your actual costs may be higher or lower, based on these
assumptions your costs would be:
<TABLE>
-----------------
<S> <C>
1 Year $ 642
-----------------
3 Years $ 994
-----------------
5 Years $1,369
-----------------
10 Years $2,419
</TABLE>
4
<PAGE>
Investing with the UAM Funds
BUYING SHARES
- --------------------------------------------------------------------------------
To open an account To buy more shares
---------------------------------------------------------------------------
By Mail Send a check or money Send a check and, if pos-
order and your account sible, the "Invest by
application to the UAM Mail" stub that accompa-
Funds. Make checks pay- nied your statement to the
able to "UAM Funds" UAM Funds. Be sure your
(the UAM Funds will not check identifies clearly
accept third-party your name, account number
checks). and the UAM Fund into
which you want to invest.
---------------------------------------------------------------------------
By Wire Call 1-877-826-5465 for Call 1-877-826-5465 to get
an account number and a wire control number and
wire control number and wire your money to the UAM
then send your com- Funds as follows.
pleted account applica-
tion to the UAM Funds.
Wiring Instructions
United Missouri Bank
ABA # 101000695
UAM Funds
DDA Acct. # 9870964163
Ref: portfolio name/account number/
account name/wire control number
---------------------------------------------------------------------------
By Automatic Not Available To set up a plan, mail a
Investment Plan completed application to
(Via ACH) the UAM Funds. To cancel
or change a plan, write to
the UAM Funds. Allow up to
15 days to create the plan
and 3 days to cancel or
change it.
---------------------------------------------------------------------------
Minimum Investments $5,000 -- regular account $100
$500 -- IRAs
$250 -- spousal IRAs
UAM Funds
PO Box 419081
Kansas City, MO 64141-6081
(Toll free) 1-877-UAM-LINK (826-5465)
5
<PAGE>
REDEEMING SHARES
- -------------------------------------------------------------------------------
By Mail Send a letter signed by all registered parties on the ac-
count to the UAM Funds specifying:
. The UAM Fund.
. The account number.
. The dollar amount or number of shares you wish to
redeem.
Certain shareholders may have to include additional docu-
ments. Please see the Statement of Additional Information
(SAI) if you need more information.
---------------------------------------------------------------------------
By Telephone You must first establish the telephone redemption privi-
lege (and, if desired, the wire redemption privilege) by
completing the appropriate sections of the account appli-
cation.
Call 1-877-826-5465 to redeem your shares. Based on your
instructions, the UAM Funds will mail your proceeds to you
or wire them to your bank.
---------------------------------------------------------------------------
By Systematic If your account balance is at least $10,000, you may
withdrawal transfer as little as $100 per month from your UAM account
Plan (Via ACH) to your financial institution.
To participate in this service, you must complete the ap-
propriate sections of the account application and mail it
to the UAM Funds.
EXCHANGING SHARES
- -------------------------------------------------------------------------------
At no charge, you may exchange shares of one UAM Fund for shares of the
same class of any other UAM Fund by writing to or calling the UAM Funds.
Before exchanging your shares, please read the prospectus of the UAM Fund
for which you want to exchange. You may obtain any UAM Fund prospectus by
calling 1-877-826-5465. You may not exchange shares represented by certif-
icates over the telephone. You may only exchange shares between accounts
with identical registrations (i.e., the same names and addresses).
TRANSACTION POLICIES
- -------------------------------------------------------------------------------
Calculating Your Share Price
You may buy, sell or exchange shares of a UAM Fund at a price equal to its
net asset value (NAV) next computed after it receives your order, plus any
applicable sales charge. The portfolio calculates its NAV as of the
6
<PAGE>
close of trading on the New York Stock Exchange (NYSE) (generally 4:00
p.m. Eastern Time) on each day the NYSE is open. Therefore, to receive the
NAV on any given day, the UAM Funds must accept your order by the close of
trading on the NYSE that day. Otherwise, you will receive the NAV that is
calculated on the close of trading on the following day. The UAM Funds are
open for business on the same days as the NYSE, which is closed on week-
ends and certain holidays.
Calculating Sales Charges
The Fund includes a sales load in the offering price at the time you buy
your shares. The amount of the sales load you pay will vary depending on
the amount you invest in the portfolio. The distributor will pay a large
portion of the sales charge it receives to the authorized broker responsi-
ble for your purchase. You may calculate your sales charge using the fol-
lowing table:
<TABLE>
<CAPTION>
As a % of As a % of Your
Your Investment Offering Price Investment
----------------------------------------------------
<S> <C> <C>
Up to $99,999 4.75% 4.99%
----------------------------------------------------
$100,000 to $249,999 4.00 4.17
----------------------------------------------------
$250,000 to $499,999 3.00 3.09
----------------------------------------------------
$500,000 to $999,999 2.00 2.04
----------------------------------------------------
$1,000,000 and over 1.00 1.01
</TABLE>
You may reduce the sales charge you incur when purchasing shares of the
portfolio as follows:
. You may sign a letter of intent, which lets you buy shares of the
portfolio over a 13-month period and receive the same sales charge as
if all the shares had been bought at the same time. However, you must
agree to buy no less than $100,000 of shares within the 13 month peri-
od. See the SAI for more details.
. If you have given discretionary investment authority to certain serv-
ice agents or authorized brokers, you may not incur a sales charge.
See the SAI for more details.
Buying or Selling Shares through a Financial Intermediary
You may buy, exchange or sell shares of the UAM Funds through a financial
intermediary (such as a financial planner or adviser). Generally, to buy
or sell shares at the NAV on any given day, your financial intermediary
must receive your order by the close of trading on the NYSE that day. Your
financial intermediary is responsible for transmitting all sub-
7
<PAGE>
scription and redemption requests, investment information, documentation
and money to the UAM Funds on time.
Certain financial intermediaries have agreements with the UAM Funds that
allow them to enter confirmed purchase or redemption orders on behalf of
clients and customers. Under this arrangement, the financial intermediary
must send your payment to the UAM Funds by the time they price their
shares on the following day. If your financial intermediary fails to do
so, it may be responsible for any resulting fees or losses.
Calculating NAV
The UAM Funds calculate their NAV by adding the total value of their as-
sets, subtracting their liabilities and then dividing the result by the
number of shares outstanding. The UAM Funds value their investments with
readily available market quotations at market value. Investments that do
not have readily available market quotations are valued at fair value, ac-
cording to guidelines established by the UAM Funds. The UAM Funds may also
value securities at fair value when events occur that make established
valuation methods (such as stock exchange closing prices) unreliable. The
UAM Funds value debt securities that will mature in 60 days or less at am-
ortized cost, which approximates market value.
In-Kind Transactions
Under certain conditions and at the UAM Funds' discretion, you may pay for
shares of a portfolio with securities instead of cash. In addition, the
UAM Funds may pay all or part of your redemption proceeds with securities
instead of cash.
Payment of Redemption Proceeds
The UAM Funds will pay for all shares redeemed within seven days after
they receive a redemption request in proper order. If you redeem shares
that were bought by check, you will not receive your redemption proceeds
until the check has cleared, which may take up to 15 days from purchase
date. You may avoid these delays by paying for shares with a certified
check, bank check or money order.
Signature Guarantee
You must have your signature guaranteed when (1) you want the proceeds
from your redemption sent to a person or address different from that reg-
istered on the account, or (2) you request a transfer of your shares.
8
<PAGE>
You may obtain a signature guarantee from most banks, savings institu-
tions, securities dealers, national securities exchanges, registered secu-
rities associations, clearing agencies and other guarantor institutions. A
notary public cannot guarantee a signature.
Telephone Transactions
The UAM Funds will employ reasonable procedures to confirm that instruc-
tions communicated by telephone are genuine; they may be liable for any
losses if they fail to do so. The UAM Funds will not be responsible for
any loss, liability, cost or expense for following instructions received
by telephone that it reasonably believes to be genuine.
Rights Reserved by the UAM Funds
Purchases
At any time and without notice, the UAM Funds may:
. Stop offering shares of a portfolio.
. Reject any purchase order.
. Bar an investor engaged in a pattern of excessive trading from buying
shares of any portfolio. (Excessive trading can hurt the performance
of a portfolio by disrupting its management and by increasing its ex-
penses.)
Redemptions
At any time, the UAM Funds may change or eliminate any of the redemption
methods described above, except redemption by mail. The UAM Funds may sus-
pend your right to redeem if:
. Trading on the NYSE is restricted.
. The SEC tells the UAM Funds to delay redemptions.
Exchanges
The UAM Funds may:
. Modify or cancel the exchange program at any time on 60 days' written
notice to shareholders.
. Reject any request for an exchange.
. Limit or cancel a shareholder's exchange privilege, especially when an
investor is engaged in a pattern of excessive trading.
9
<PAGE>
Account Policies
SMALL ACCOUNTS
- --------------------------------------------------------------------------------
The UAM Funds may redeem your shares without your permission if the value
of your account falls below 50% of the required minimum initial invest-
ment. This provision does not apply:
. To retirement accounts and certain other accounts.
. When the value of your account falls below the required minimum be-
cause of market fluctuations.
The UAM Funds will notify you before liquidating your account and allow
you 60 days to increase the value of your account.
DISTRIBUTIONS
- --------------------------------------------------------------------------------
Normally, the portfolio distributes its net investment income quarterly.
In addition, it distributes its net capital gains once a year. The UAM
Funds will automatically reinvest dividends and distributions in addi-
tional shares of the portfolio, unless you elect on your account applica-
tion to receive them in cash.
FEDERAL TAXES
- --------------------------------------------------------------------------------
The following is a summary of the federal income tax consequences of in-
vesting in the UAM Funds. You may also have to pay state and local taxes
on your investment. You should always consult your tax advisor for spe-
cific guidance regarding the tax effect of your investment in the UAM
Funds.
Taxes on Distributions
The distributions of the portfolio will generally be taxable to sharehold-
ers as ordinary income or capital gains (which may be taxable at different
rates depending on the length of time the portfolio held the relevant as-
sets). You will be subject to income tax on these distributions regardless
of whether they are paid in cash or reinvested in additional shares. Once
a year UAM Funds will send you a statement showing the types and total
amount of distributions you received during the previous year.
You should note that if you purchase shares just before a distribution,
the purchase price would reflect the amount of the upcoming distribution.
In this case, you would be taxed on the entire amount of the distribution
received, even though, as an economic matter, the distribution simply
10
<PAGE>
constitutes a return of your investment. This is known as "buying into a
dividend" and should be avoided. Call 1-877-826-5465 to find out when the
portfolio expects to make a distribution to shareholders.
Taxes on Redemptions or Exchanges
When you redeem or exchange shares in any UAM Fund, you may recognize a
gain or loss for income tax purposes. This gain or loss will be based on
the difference between your tax basis in the shares and the amount you re-
ceive for them. (To aid in computing your tax basis, you generally should
retain your account statements for the periods during which you held
shares.) Any loss realized on shares held for six months or less will be
treated as a long-term capital loss to the extent of any capital gain div-
idends that were received with respect to the shares.
The one major exception to these tax principles is that distributions on,
and sales, exchanges and redemptions of, shares held in an IRA (or other
tax-qualified plan) will not be currently taxable, but they may be taxable
at some time in the future.
Backup Withholding
By law, the UAM Funds must withhold 31% of your distributions and proceeds
if you have not provided complete, correct taxpayer information.
11
<PAGE>
Fund Details
PRINCIPAL INVESTMENTS AND RISKS OF THE PORTFOLIO
- --------------------------------------------------------------------------------
This section briefly describes the principal investment strategies the
portfolio may employ in seeking its objectives. For more information con-
cerning these investment practices and their associated risks, please read
the "PORTFOLIO SUMMARY" and the SAI. You can find information on the port-
folio's recent strategies and holdings in its annual report. The portfolio
may change these strategies without shareholder approval.
The portfolio normally invests at least 65% of its assets in common stocks
of public companies principally engaged in the real estate industry. The
adviser considers a company "principally engaged" in the real estate in-
dustry if it derives at least 50% of the fair market value of its assets,
or at least 50% of its gross income or net profits, from the ownership,
construction, management, financing or sale of real estate.
The portfolio may invest up to 35% of its total assets in equity securi-
ties of companies not principally engaged in the real estate business, but
which are engaged in businesses related to real estate, such as manufac-
turers and distributors of building supplies, financial institutions which
make or service mortgages, and companies whose real estate assets are sub-
stantial relative to the companies' stock market valuations, such as re-
tailers, railroads and paper and forest products companies.
Under normal circumstances, the portfolio may invest approximately 60% to
90% of its assets in real estate investment trusts (REITs). The portfolio
anticipates that approximately 10% to 15% of the REITs held by the portfo-
lio will have operating histories of less than three years.
Investment Process
The adviser analyzes and selects investments that will normally provide a
relatively high and stable yield and are good prospects for future growth
in dividends. The adviser considers companies that it expects will gener-
ate good cash flow from the underlying properties, have proven management
track records, and histories of increasing dividends. Most of these compa-
nies specialize in one or two product types, such as office buildings,
shopping centers, industrial complexes, and hotels, or specialize in a
particular geographic region. The adviser then looks to purchase stocks
that are selling at a discount to its estimate of the market value of
12
<PAGE>
the underlying real estate. The adviser re-evaluates and considers selling
stocks that become overvalued or no longer contain these fundamental char-
acteristics.
Equity Securities
Equity securities represent an ownership interest, or the right to acquire
an ownership interest, in an issuer. Different types of equity securities
provide different voting and dividend rights and priority in case of the
bankruptcy of the issuer. Equity securities include common stocks, pre-
ferred stocks, convertible securities, rights and warrants.
Equity securities may lose value because of factors affecting the securi-
ties markets generally, such as adverse changes in economic conditions,
the general outlook for corporate earnings, interest rates or investor
sentiment. These circumstances may lead to long periods of poor perfor-
mance, such as during a "bear market." Equity securities may also lose
value because of factors affecting an entire industry, such as increases
in production costs, or factors directly related to a specific company,
such as decisions made by its management.
Real Estate Investment Trusts
The portfolio may invest in separately managed trusts that make invest-
ments in various real estate businesses (REITs). An equity REIT may own
real estate and pass the income it receives from rents from the proper-
ties, or the capital gain it receives from selling a building, to its
shareholders. A mortgage REIT specializes in lending money to building de-
velopers and passes the interest income it receives from the mortgages to
shareholders. A hybrid REIT combines the characteristics of equity and
mortgage REITs. REITs may invest in real estate such as shopping centers,
office buildings, apartment complexes, hotels and casinos.
REITs may expose the portfolio to similar risks associated with direct in-
vestment in real estate. REITs are more dependent upon specialized manage-
ment skills, have limited diversification and are, therefore, generally
dependent on their ability to generate cash flow to make distributions to
shareholders.
OTHER INVESTMENT PRACTICES AND STRATEGIES
- -------------------------------------------------------------------------------
As described below, the portfolio may deviate from its investment strategy
from time to time. In addition, the portfolio may employ investment prac-
tices that are not described in this prospectus, such as repurchase agree-
ments, when-issued and forward commitment transactions, lending
13
<PAGE>
of securities, borrowing and other techniques. For more information con-
cerning the risks associated with these investment practices, you should
read the SAI.
Short-Term Investing
At times, the adviser may decide to suspend temporarily the normal invest-
ment activities of the portfolio by investing up to 100% of its assets in
a variety of securities, such as U.S. government and other high quality
and short-term debt obligations. The adviser may temporarily adopt a de-
fensive position to reduce changes in the value of the shares of the port-
folio that may result from adverse market, economic, political or other
developments.
When the adviser pursues a temporary defensive strategy, the portfolio may
not profit from favorable developments that it would have otherwise prof-
ited from if it were pursuing its normal strategies. Likewise, these
strategies may prevent the portfolio from achieving its stated objectives.
YEAR 2000
- -------------------------------------------------------------------------------
Many computer programs in use today cannot distinguish the year 2000 from
the year 1900 because of the way they encode and calculate dates. Conse-
quently, these programs may not be able to perform necessary functions and
could disrupt the operations of the UAM Funds or financial markets in gen-
eral. The year 2000 issue affects all companies and organizations, includ-
ing those that provide services to the UAM Funds and those in which the
UAM Funds invest.
The UAM Funds and their advisers, administrator, distributor and transfer
agent are taking steps they believe are reasonably necessary to address
any portfolio-related year 2000-related computer problems. They are ac-
tively working on necessary changes to their own computer systems to pre-
pare for the year 2000 and expect that their systems will be adapted be-
fore that date. They are also requesting information on each service prov-
ider's state of readiness and contingency plan. However, at this time the
degree to which the year 2000 issue will affect the UAM Funds' investments
or operations cannot be predicted. Any negative consequences could ad-
versely affect your investment in the UAM Funds.
INVESTMENT MANAGEMENT
- -------------------------------------------------------------------------------
Investment Adviser
Heitman/PRA Securities Advisors LLC, a Delaware limited liability company
located at 180 LaSalle Street, Suite 3600, Chicago, Illinois, 60601,
14
<PAGE>
is the investment adviser to the portfolio. The adviser manages and super-
vises the investment of the portfolio's assets on a discretionary basis.
The adviser is a wholly owned subsidiary of Heitman Financial LLC, an af-
filiate of United Asset Management Corporation. The adviser provides in-
vestment management services to corporations, foundations, endowments,
pension and profit sharing plans, trusts, estates and other institutions
as well as individuals.
During the fiscal year ended December 31, 1998, the portfolio paid the ad-
viser 0.71% of its average net assets in management fees.
Portfolio Managers
A team of investment professionals is primarily responsible for the day-
to-day management of the portfolio. Listed below are the investment pro-
fessionals of the adviser that comprise the team and a description of
their business experience during the past five years.
<TABLE>
<CAPTION>
Name & Title Experience
------------------------------------------------------------
<S> <C>
Dean A. Sotter Mr. Sotter is President of the adviser
President with overall responsibility for
portfolio management and marketing.
Prior to joining the adviser, Mr.
Sotter was a Partner of PRA Securities
Advisors, L.P. He was a Portfolio
Manager and Vice President of JMB
Institutional Realty Corporation from
1985-1992, where his responsibilities
included property level analysis,
budgeting and valuation as well as
financial reporting and client
communications.
------------------------------------------------------------
Timothy J. Pire Mr. Pire is Vice President of the
Vice President adviser with responsibility for
portfolio management, research, and
analysis of publicly traded real estate
securities and implementation of the
investment strategy through portfolio
management. Prior to joining the
adviser, Mr. Pire served as a Research
Analyst with PRA Securities Advisors,
L.P., and he was an Associate Appraiser
with Lyon, Skelte & Speirs in Seattle,
Washington from 1990-1992 where he was
involved in valuation of commercial
real estate and writing full narrative
appraisals
------------------------------------------------------------
Randall E. Newsome Mr. Newsome is Vice President of the
Vice President adviser with responsibility for
portfolio management, research, and
analysis of publicly traded real estate
securities and implementation of the
investment strategy through portfolio
management. Mr. Newsome also oversees
the adviser's trading positions. Prior
to joining the adviser, Mr. Newsome
served as a Research Analyst with PRA
Securities Advisors, L.P. and he was a
Vice President with The Stratus
Corporation in Chicago, Illinois from
1989-1993 where he was responsible for
property management, leasing and
construction management.
</TABLE>
15
<PAGE>
SHAREHOLDER SERVICING ARRANGEMENTS
- -------------------------------------------------------------------------------
Distribution Plans
The UAM Funds have adopted a Distribution Plan and Shareholder Services
Plan under Rule 12b-1 of the Investment Company Act of 1940 that permit
them to pay broker-dealers, financial institutions and other third parties
for marketing, distribution and shareholder services. The UAM Funds' 12b-1
plans allow the portfolio to pay up to 1.00% of its average daily net as-
sets annually for these services. However, the board of the UAM Funds has
authorized the portfolio to pay only 0.50% per year. Because Advisor Class
Shares pay these fees out of their assets on an ongoing basis, over time,
your shares may cost more than if you had paid another type of sales
charge. Long-term shareholders may pay more than the economic equivalent
of the maximum front-end sales charges permitted by rules of the National
Association of Securities Dealers, Inc.
Shareholder Servicing
Certain financial intermediaries (service agents) may charge their clients
account fees for buying or redeeming shares of the UAM Funds, which are
not subject to the UAM Funds' Distribution Plan or Shareholder Servicing
Plan. These fees may include transaction fees and/or service fees paid
from the assets of the UAM Funds attributable to the service agent. The
UAM Funds do not pay these fees on shares purchased directly from the UAM
Funds' distributors. The service agents may provide shareholder services
to their clients that are not available to a shareholder dealing directly
with the UAM Funds. Each service agent is responsible for transmitting to
its clients a schedule of any such fees and information regarding any ad-
ditional or different purchase or redemption conditions. You should con-
sult your service agent for information regarding these fees and condi-
tions.
Anyone entitled to receive compensation for selling or servicing shares of
the UAM Funds may receive different compensation with respect to one par-
ticular class of shares over another.
The adviser may pay its affiliated companies for referring investors to
the portfolio. The adviser and its affiliates may, at their own expense,
pay qualified service providers for marketing, shareholder servicing, rec-
ord-keeping and/or other services performed with respect to the portfolio.
The UAM Funds also offer Institutional Class shares, which do not pay mar-
keting or shareholder servicing fees, and Institutional Service Class
shares, which impose fees for marketing and shareholder servicing, for
certain of its portfolios. Not all of the UAM Funds offer all of these
classes.
16
<PAGE>
Financial Highlights
The financial highlights table is intended to help you understand the fi-
nancial performance of the portfolio for the fiscal periods indicated.
Certain information contained in the table reflects the financial results
for a single Advisor Class share of the portfolio. The total returns in
the table represent the rate that an investor would have earned on an in-
vestment in the portfolio assuming all dividends and distributions were
reinvested. PricewaterhouseCoopers LLP has audited this information. The
financial statements and the unqualified opinion of PricewaterhouseCoopers
LLP are included in the annual report of the portfolio, which is available
upon request by calling the UAM Funds at 1-877-826-5465.
<TABLE>
<CAPTION>
Fiscal Year Ended December 31, 1998 1997 1996 1995+
------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $10.50 $10.98 $8.67 $8.00
------------------------------------------------------------------------------
Income from Investment Operations
Net Investment Income 0.25 0.35 0.31 0.23
Net Gains or Losses on Securities
(Realized and Unrealized) (1.86) 1.80 2.84 0.80
------------------------------------------------------------------------------
Total From Investment Operations (1.61) 2.15 3.15 1.03
------------------------------------------------------------------------------
Less Distributions
Net Investment Income (0.27) (0.35) (0.31) (0.23)
In Excess of Net Investment Income - (0.04) (0.12) -
Capital Gains - (2.24) (0.41) -
Tax Return of Capital (a) - - - (0.13)
------------------------------------------------------------------------------
Total Distributions (0.27) (2.63) (0.84) (0.36)
------------------------------------------------------------------------------
Net Asset Value, End of Period $8.62 $10.50 $10.98 $8.67
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Total Return (b) (15.54%) 20.44% 37.44% 13.19%
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Period
(Thousands) $46,665 $85,222 $79,805 $5,520
Ratio of Expenses to Average Net
Assets 1.73% 1.59% 1.73% 1.99%*(c)
Ratio of Net Investment Income to
Average Net Assets 2.65% 3.14% 3.91% 4.27%*(c)
Portfolio Turnover Rate 80% 90% 60% 65%*
</TABLE>
* Annualized
+ For the period May 15, 1995 (commencement of operations) to December
31, 1995.
(a) Historically, the portfolio has distributed to its shareholders
amounts approximating dividends received from the REITs. A portion of
such distributions may be a return of capital.
(b) This result does not include the sales charge. If the charge had been
included, the return would have been lower.
(c) During 1995, the adviser agreed to reimburse a portion of the Advisor
Shares' expenses. Without reimbursement, the expense ratio would have
been 5.34% and the ratio of net investment income to average net as-
sets would have been 0.92%.
17
<PAGE>
Portfolio Codes
The reference information below will be helpful to you when you contact
the UAM Funds by phone or through the internet to purchase or exchange
shares of a UAM Fund, check daily NAVs or get additional information.
<TABLE>
<CAPTION>
Trading Symbol CUSIP Number Portfolio Number
------------------------------------------------------------------------------------------
<S> <C> <C>
HTREX 902556810 891
</TABLE>
<PAGE>
Heitman Real Estate Portfolio
For investors who want more information about the portfolio, the following
documents are available upon request.
Annual/Semi-Annual Reports
The annual and semi-annual reports of the portfolio provide additional in-
formation about the portfolio's investments. In the annual report, you
will also find a discussion of the market conditions and investment strat-
egies that significantly affected the performance of Heitman Real Estate
Portfolio during the last fiscal year.
Statement of Additional Information
The SAI contains additional detailed information about the portfolio and
is incorporated by reference into (legally part of) this prospectus.
How to Get More Information
Investors can receive free copies of these materials, request other infor-
mation about the portfolio and make shareholder inquiries by writing to or
calling:
UAM Funds
PO Box 419081
Kansas City, MO 64141-6081
(toll free) 1-877-UAM-LINK (826-5465)
www.uam.com
For a fee, you can get the reports of the portfolio and SAI by writing to
the SEC's Public Reference Section, Washington, D.C. 20459-6009, or by
calling the SEC at 1-800-SEC-0330. You can get copies of this information
for free, on the SEC's Internet site at www.sec.gov.
The portfolio's Investment Company Act of 1940 file number is 811-8544
[UAM LOGO APPEARS HERE]
<PAGE>
PART B
UAM FUNDS TRUST
The Statement of Additional Information of Heitman Real Estate Portfolio is
included in this Post-Effective Amendment No. 30.
The Statement of Additional Information of Dwight Capital Preservation Portfolio
is contained in Post-Effective Amendment No. 29 filed April 12, 1999:
The following Statements of Additional Information are contained in
Post-Effective Amendment No. 24 filed on July 10, 1998:
. BHM&S Total Return Bond Portfolio Institutional Class Shares and
Institutional Service Class Shares
. Chicago Asset Management Intermediate Bond Portfolio Institutional Class
Shares and Chicago Asset Management Value/Contrarian Portfolio
Institutional Class Shares
. FPA Crescent Portfolio Institutional Class Share and Institutional Service
Class Shares
. Hanson Equity Portfolio Institutional Class Shares
. Jacobs International Octagon Portfolio Institutional Class Shares
. MJI International Equity Portfolio Institutional Class Shares and
Institutional Service Class Shares
. TJ Core Equity Portfolio Institutional Service Class Shares
The Statement of Additional Information of Clipper Focus Portfolio is contained
in Post-Effective Amendment No. 23 filed July 2, 1998:
The Statement of Additional Information of PR Mid Cap Growth Portfolio is
contained in Post-Effective Amendment No. 22 filed June 24, 1998:
The Statement of Additional Information of Cambiar Opportunity Portfolio is
contained in Post-Effective Amendment No. 18 filed January 23, 1998:
<PAGE>
UAM Funds
PO Box 419081
Kansas City, MO 64141-6081
(Toll free) 1-877-UAM-LINK (826-5465)
Heitman Real Estate Portfolio
Institutional Class Shares
Advisor Class Shares
Statement of Additional Information
April 28, 1999
This statement of additional information (SAI) is not a prospectus. However,
you should read it in conjunction with the prospectus of The Heitman Real
Estate Portfolio Institutional Class Shares dated April 28 1999, and the
prospectus of The Heitman Real Estate Portfolio Advisor Class Shares dated
April 28 1999. You may obtain a prospectus for the portfolio by contacting
the UAM Funds at the address listed above, or at www.uam.com (the website is
not part of this SAI).
<PAGE>
<TABLE>
<CAPTION>
Table Of Contents
<S> <C>
Definitions...........................................................................1
The Fund..............................................................................1
Description of the Portfolio and Its Investments and Risks............................1
Equity Securities....................................................................1
Investment Companies.................................................................2
Repurchase Agreements................................................................2
Restricted Securities................................................................3
Securities Lending...................................................................3
Short-Term Investments...............................................................3
When-Issued, Forward Commitment and Delayed Delivery Transactions....................6
Investment Policies...................................................................6
Fundamental Investment Policies......................................................6
Non-Fundamental Policies.............................................................7
Management Of The Fund................................................................8
Principal Holders of Securities.......................................................9
Investment Advisory and Other Services...............................................10
Investment Adviser..................................................................10
Control of Adviser..................................................................10
Distributors........................................................................11
Administrative Services.............................................................11
Custodian...........................................................................13
Independent Public Accountant.......................................................13
Service And Distribution Plans......................................................13
Sales compensation..................................................................15
Brokerage Allocation and Other Practices.............................................17
Selection of Brokers................................................................17
Simultaneous Transactions...........................................................17
Brokerage Commissions...............................................................18
Capital Stock and Other Securities...................................................18
Description Of Shares And Voting Rights.............................................18
Dividends and Capital Gains Distributions...........................................19
Purchase Redemption and Pricing of Shares............................................19
Purchase of Shares..................................................................19
Redemption of Shares................................................................20
Exchange Privilege..................................................................21
Transfer Of Shares..................................................................21
Valuation of Shares.................................................................22
Performance Calculations.............................................................22
Total Return........................................................................22
Yield...............................................................................23
Comparisons.........................................................................23
Taxes................................................................................24
Expenses.............................................................................24
Financial Statements.................................................................25
Appendix A: Description Of Securities And Ratings..................................A-1
Appendix B - Comparisons............................................................B-1
</TABLE>
<PAGE>
DEFINITIONS
The "Fund" is UAM Funds Trust.
The term "adviser" means Heitman/PRA Securities Advisors, LLC, the Fund's
investment adviser.
UAM is United Asset Management Corporation.
UAMFSI is UAM Fund Services, Inc., the Fund's administrator.
UAMFDI is UAM Fund Distributors, Inc., the Fund's distributor.
ACG is ACG Capital Corporation, the portfolio's distributor of Advisor Class
shares only.
UAMSSC is UAM Fund Shareholder Servicing Center, the Fund's sub-shareholder-
servicing agent.
CGFSC is Chase Global Funds Service Company, the Fund's sub-administrator.
UAM Funds Complex includes UAM Funds, Inc., UAM Funds Trust, UAM Funds Trust
II, UAM Funds, Inc. II, and all of their portfolios.
The terms "the portfolio" is used to refer to Heitman Real Estate Portfolio ,
while " portfolio" or "portfolios" refers to some or all portfolios of the
UAM Funds Complex.
The terms "board" and "governing board" refer to the Fund's Board as a group,
while "board member" refers to a single member of the board.
1940 Act means the Investment Company Act of 1940, as amended.
All other defined terms, which are not otherwise defined in this SAI, have the
same meaning in the SAI as they do in the prospectuses of Heitman Real Estate
Portfolio.
THE FUND
The Fund was organized under the name "The Regis Fund II" as a Delaware
business trust on May 18, 1994. On October 31, 1995, the Fund changed its name
to "UAM Funds Trust." The Fund's principal executive office is located at 211
Congress Street, Boston, MA 02110; however, shareholders should direct all
correspondence to the address listed on the cover of this SAI.
The Fund is an open-end, management investment company under the 1940 Act.
Heitman Real Estate Portfolio is a diversified series of the Fund. This means
that with respect to 75% of its total assets, the portfolio may not invest
more than 5% of its total assets in the securities of any one issuer (except
U.S. government securities). The remaining 25% of its total assets are not
subject to this restriction. To the extent the portfolios invest a significant
portion of their respective assets in the securities of a particular issuer,
it will be subject to an increased risk of loss if the market value of such
issuer's securities declines.
DESCRIPTION OF THE PORTFOLIO AND ITS INVESTMENTS AND RISKS
EQUITY SECURITIES
- --------------------------------------------------------------------------------
The portfolio may invest in equity securities such as common and preferred
stocks. While investing in stocks allows the portfolio to participate in the
benefits of owning a company, the portfolio must accept the risks of
ownership. Unlike bondholders, who have preference to a company's earnings
and cash flow, preferred stockholders, followed by common stockholders in
order of priority, are entitled only to the residual amount after a company
meets its other obligations. For this reason, the value of a
1
<PAGE>
company's stock will usually react more strongly to actual or perceived
changes in the company's financial condition or prospects than its debt
obligations. Stockholders of a company that fares poorly can lose money.
Preferred stock has a preference over common stock in liquidation (and
generally dividends as well) but is subordinated to the liabilities of the
issuer in all respects. As a general rule, the market values of preferred
stock with a fixed dividend rate and no conversion element varies inversely
with interest rates and perceived credit risk. Because preferred stock is
generally junior to debt securities and other obligations of the issuer,
deterioration in the credit quality of the issuer will cause greater changes
in the value of a preferred stock than in a more senior debt security with
similar stated yield characteristics. Types of preferred stocks include
adjustable-rate preferred stock, fixed dividend preferred stock, perpetual
preferred stock, and sinking fund preferred stock.
Stock Market Risk
Stock markets tend to move in cycles with short or extended periods of rising
and falling stock prices. The value of a company's stock may fall because of:
. Factors that directly relate to that company, such as decisions made by
its management or lower demand for the company's products or services.
. Factors affecting an entire industry, such as increases in production
costs.
. Changes in financial market conditions that are relatively unrelated to
the company or its industry, such as changes in interest rates, currency
exchange rates or inflation rates.
Rights and Warrants
The portfolio may purchase warrants and rights, which are securities
permitting, but not obligating, their holder to purchase the underlying
securities at a predetermined price. Generally, warrants and stock purchase
rights do not carry with them the right to receive dividends or exercise
voting rights with respect to the underlying securities, and they do not
represent any rights in the assets of the issuer. Therefore, an investment in
warrants and rights may entail greater risk than certain other types of
investments. In addition, the value of warrants and rights does not
necessarily change with the value of the underlying securities, and they cease
to have value if they are not exercised on or prior to their expiration date.
Investment in warrants and rights increases the potential profit or loss to be
realized from the investment of a given amount of the portfolio's assets as
compared with investing the same amount in the underlying stock.
INVESTMENT COMPANIES
- --------------------------------------------------------------------------------
The portfolio may invest up to 10% of its total assets, calculated at the time
of investment, in the securities of other open-ended or closed-end investment
companies. The portfolio may not invest more than 5% of its total assets in
the securities of any one investment company nor may it acquire more than 3%
of the voting securities of any other investment company. The portfolio will
indirectly bear its proportionate share of any management fees paid by an
investment company in which it invests in addition to the management fee paid
by the portfolio.
The Fund has received permission from the SEC to allow each of its portfolios
to invest, for cash management purposes, the greater of 5% of its total assets
or $2.5 million in the UAM DSI Money Market Portfolio, provided that the
investment is consistent with the portfolio's investment policies and
restrictions. Based upon the portfolio's assets invested in the UAM DSI Money
Market Portfolio, the investing portfolio's adviser will waive its investment
advisory and any other fees earned as a result of the portfolio's investment
in the UAM DSI Money Market Portfolio. The investing portfolio will bear
expenses of the UAM DSI Money Market Portfolio on the same basis as all of its
other shareholders.
REPURCHASE AGREEMENTS
- --------------------------------------------------------------------------------
In a repurchase agreement, the portfolio buys a security for a relatively
short period (usually not more than 7 days) and simultaneously agrees to sell
it back at a specified date and price. The portfolio normally uses repurchase
agreements to earn income on assets that are not invested. The portfolio will
require the counter-party to the agreement to deliver securities serving
2
<PAGE>
as collateral for each repurchase agreement to its custodian either physically
or in book-entry form. The counter party must add to the collateral whenever
the price of the repurchase agreement rises (i.e., the borrower "marks to the
market" on a daily basis).
If the seller of the security declares bankruptcy or otherwise becomes
financially unable to buy back the security, the portfolio's right to sell the
security may be restricted. In addition, the value of the security might
decline before the portfolio can sell it and the portfolio might incur
expenses in enforcing its rights.
RESTRICTED SECURITIES
- --------------------------------------------------------------------------------
The portfolio may purchase restricted securities that are not registered for
sale to the general public but which are eligible for resale to qualified
institutional investors under Rule 144A of the Securities Act of 1933. Under
the supervision of the Fund's board, the adviser determines the liquidity of
such investments by considering all relevant factors. Provided that a dealer
or institutional trading market in such securities exists, these restricted
securities are not treated as illiquid securities for purposes of the
portfolio's investment limitations. The price realized from the sales of
these securities could be more or less than those originally paid by the
portfolio or less than what may be considered the fair value of such
securities.
SECURITIES LENDING
- --------------------------------------------------------------------------------
To earn additional income, the portfolio may lend a portion of its total
assets (including the value of the collateral for the loans) at fair market
value to broker- dealers or other financial institutions. The portfolio may
reinvest any cash collateral in short-term securities and money market funds.
The portfolio will only lend its securities if:
. The borrower provides collateral at least equal to the market value of the
securities loaned.
. The collateral pledged and maintained by the borrower must consist of
cash, an irrevocable letter of credit issued by a domestic U.S. bank or
securities issued or guaranteed by the U. S. government.
. The borrower adds to the collateral whenever the price of the securities
loaned rises (i.e., the borrower "marks to the market" on a daily basis).
. The portfolio can terminate the loan at any time; and
. The portfolio receives reasonable interest on the loan (which may include
the portfolio investing any cash collateral in interest bearing short-term
investments).
. The borrower is determined to be an acceptable credit risk.
These risks are similar to the ones involved with repurchase agreements. When
the portfolio lends securities, there is a risk that it will lose money
because the borrower fails to return the securities involved in the
transaction. In addition, the borrower may become financially unable to honor
its contractual obligations, which may delay or prevent the portfolio from
liquidating the collateral.
SHORT-TERM INVESTMENTS
- --------------------------------------------------------------------------------
To earn a return on uninvested assets, meet anticipated redemptions, or for
temporary defensive purposes, the portfolio may invest a portion of its assets
in the short-term investments described below.
Debt Securities
Debt securities are used by corporations and governments to borrow money from
investors. Most debt securities promise a variable or fixed rate of return
and repayment of the amount borrowed at maturity. Some debt securities, such
as zero-coupon bonds, do not pay current interest and are purchased at a
discount from their face value. Debt securities may include, among other
things, all types of bills, notes, bonds, mortgage-backed securities or asset-
backed securities.
The total return of a debt instrument is composed of two elements: the
percentage change in the security's price and interest income earned. The
yield to maturity of a debt security estimates its total return only if the
price of the debt security remains unchanged during the holding period and
coupon interest is reinvested at the same yield to maturity. The total return
of a debt
3
<PAGE>
instrument, therefore, will be determined not only by how much
interest is earned, but also by how much the price of the security and
interest rates change.
Interest Rates
The price of a debt security generally moves in the opposite direction from
interest rates (i.e., if interest rates go up, the value of the bond will go
down, and vice versa). One can estimate the anticipated change in the price of
a fixed rate security for each 1% shift in interest rates by using a risk
measure known as effective duration. An effective duration of four years, for
example, would suggest that for each 1% reduction in interest rates at all
maturity levels, the price of a security is estimated to increase by 4%. An
increase in rates by the same magnitude is estimated to reduce the price of
the security by 4%. By knowing the yield and the effective duration of a debt
security, one can estimate total return based on an expectation of how much
interest rates, in general, will change.
While serving as a good estimator of prospective returns, effective duration
is an imperfect measure. While lower interest rates generally improve the
value of a fixed income portfolio, lower interest rates may also introduce
certain risks which may independently cause the share price of the portfolio
to fall. Lower rates motivate people to pay off mortgage-backed and asset-
backed securities earlier than expected, which introduces reinvestment risk.
Reinvesting portfolio assets at lower rates may reduce the yield of the
portfolio. The unexpected timing of mortgage and asset-backed prepayments
caused by the variations in interest rates may also shorten or lengthen the
average maturity of the portfolio. Neglecting this drift in average maturity
may have the unintended effect of increasing or reducing the effective
duration of the portfolio which may in turn adversely affect the expected
performance of the portfolio.
Credit Rating
Coupon interest is offered to investors of fixed income securities as
compensation for assuming risk, although short-term U.S. treasury securities,
such as three-month treasury bills, are considered "risk free." Corporate
securities offer higher yields than U.S. treasuries because their payment of
interest and complete repayment of principal is less certain. The credit
rating or financial condition of an issuer may affect the value of a debt
security. Generally, the lower the quality rating of a security, the greater
the risks that the issuer will fail to pay interest and return principal. To
compensate investors for taking on increased risk, issuers with lower credit
ratings usually offer their investors a higher "risk premium" in the form of
higher interest rates above comparable U.S. treasuries.
Changes in investor confidence regarding the certainty of interest and
principal payments of a fixed income corporate security will result in an
adjustment to this "risk premium." Since an issuer's outstanding debt carries
a fixed coupon, adjustments to the risk premium must occur in the price, which
effects the yield to maturity of the bond. If an issuer defaults or becomes
unable to honor its financial obligations, the bond may lose some or all of
its value
A security rated within the four highest rating categories by a rating agency
is called investment-grade because its issuer is more likely to pay interest
and repay principal than an issuer of a lower rated bond. Adverse economic
conditions or changing circumstances, however, may weaken the capacity of the
issuer to pay interest and repay principal. If a security is not rated or is
rated under a different system, the adviser may determine that it is of
investment-grade. The adviser may retain securities that are downgraded, if
it believes that keeping those securities is warranted.
Rating agencies are organizations that assign ratings to securities based
primarily on the rating agency's assessment of the issuer's financial
strength. The portfolios currently use ratings compiled by Standard and
Poor's Ratings Services, Duff & Phelps Rating Co., Fitch IBCA, Inc. and,
Moody's Investor Services. Credit ratings are only an agency's opinion, not an
absolute standard of quality, and they do not reflect an evaluation of market
risk. Appendix A contains further information concerning the ratings of
certain rating agencies and their significance.
The adviser may use ratings produced by ratings agencies as guidelines to
determine the rating of a security at the time the portfolio buys it. A rating
agency may change its credit ratings at any time. The adviser monitors the
rating of the security and will take appropriate actions if a rating agency
reduces the security's rating. The portfolio is not obligated to dispose of
securities whose issuers subsequently are in default or which are downgraded
below the above-stated ratings
4
<PAGE>
Bank Obligations
The portfolio will only invest in a security issued by a commercial bank if
the bank:
. Has total assets of at least $1 billion, or the equivalent in other
currencies;
. Is a U.S. bank and a member of the Federal Deposit Insurance Corporation;
and
. Is a foreign branch of a U.S. bank and the Adviser believes the security is
of an investment quality comparable with other debt securities that the
portfolio may purchase.
Time Deposits
Time deposits are non-negotiable deposits, such as savings accounts or
certificates of deposit, held by a financial institution for a fixed term with
the understanding that the depositor can withdraw its money only by giving
notice to the institution. However, there may be early withdrawal penalties
depending upon market conditions and the remaining maturity of the obligation.
The portfolio may only purchase time deposits maturing from two business days
through seven calendar days.
Certificates of Deposit
Certificates of deposit are negotiable certificates issued against funds
deposited in a commercial bank or savings and loan association for a definite
period of time and earning a specified return.
Banker's Acceptance
A banker's acceptance is a time draft drawn on a commercial bank by a
borrower, usually in connection with an international commercial transaction
(to finance the import, export, transfer or storage of goods).
Commercial Paper
Commercial paper constitutes short-term obligations with maturities ranging
from 2 to 270 days issued by banks, corporations and other borrowers. Such
investments are unsecured and usually discounted. The portfolio may invest in
commercial paper rated A-1 or A-2 by S&P or Prime-1 or Prime-2 by Moody's, or,
if not rated, issued by a corporation having an outstanding unsecured debt
issue rated A or better by Moody's or by S&P. See Appendix A for a description
of commercial paper ratings.
U.S. Government Securities
The portfolio may buy debt securities that are issued or guaranteed by the
U.S. Treasury or by an agency or instrumentality of the U.S. government. Some
U.S. government securities, such as Treasury bills, notes and bonds are
supported by the full faith and credit of the U.S. government. Others,
however, are supported only by the right of the instrumentality to borrow from
the U.S. government.
While U.S. government securities are guaranteed as to principal and interest,
their market value is not guaranteed. U.S. government securities are subject
to the same interest rate and credit risks as other fixed income securities.
However, since U.S. government securities are of the highest quality, the
credit risk is minimal. The U.S. government does not guarantee the net asset
value of the assets of the portfolio.
Corporate Debt Securities
The portfolio may buy investment-grade corporate debt securities and notes.
Corporations issue bonds and notes to raise money for working capital or for
capital expenditures such as plant construction, equipment purchases and
expansion. In return for the money loaned to the corporation by investors,
the corporation promises to pay investors interest, and repay the principal
amount of the bond or note.
Like other debt securities, corporate debt securities involve a risk that the
corporate issuer will not make timely payment of either interest or principal,
or may default entirely. In addition, the market price of corporate debt
securities may go down because of changes in interest rates.
5
<PAGE>
WHEN-ISSUED, FORWARD COMMITMENT AND DELAYED DELIVERY TRANSACTIONS
- --------------------------------------------------------------------------------
A when-issued security is one whose terms are available and for which a market
exists, but which have not been issued. In a forward delivery transaction,
the portfolio contracts to purchase securities for a fixed price at a future
date beyond customary settlement time. "Delayed delivery" refers to
securities transactions on the secondary market where settlement occurs in the
future. In each of these transactions, the parties fix the payment obligation
and the interest rate that they will receive on the securities at the time the
parties enter the commitment; however, they do not pay money or delivery
securities until a later date. Typically, no income accrues on securities the
portfolio has committed to purchase before the securities are delivered,
although the portfolio may earn income on securities it has in a segregated
account. The portfolio will only enter into these types of transactions with
the intention of actually acquiring the securities, but may sell them before
the settlement date.
The portfolio uses when-issued, delayed-delivery and forward delivery
transactions to secure what it considers an advantageous price and yield at
the time of purchase. When the portfolio engages in when-issued, delayed-
delivery and forward delivery transactions, it relies on the other party to
consummate the sale. If the other party fails to complete the sale, the
portfolio may miss the opportunity to obtain the security at a favorable price
or yield.
When purchasing a security on a when-issued, delayed delivery, or forward
delivery basis, the portfolio assumes the rights and risks of ownership of the
security, including the risk of price and yield changes. At the time of
settlement, the market value of the security may be more or less than the
purchase price. The yield available in the market when the delivery takes
place also may be higher than those obtained in the transaction itself.
Because the portfolio does not pay for the security until the delivery date,
these risks are in addition to the risks associated with its other
investments.
The portfolio will segregate cash and liquid securities equal in value to
commitments for the when-issued, delayed-delivery or forward delivery
transaction. The portfolio will segregate additional liquid assets daily so
that the value of such assets is equal to the amount of its commitments.
INVESTMENT POLICIES
Whenever an investment limitation sets forth a percentage limitation on
investment or utilization of assets, such limitation shall (with the exception
of a limitation relating to borrowing) be determined immediately after and as
a result of the portfolio's acquisition of such security or other asset.
Accordingly, any later increase or decrease resulting from a change in values,
net assets or other circumstances will not be considered when determining
whether the investment complies with the investment limitations of the
portfolio.
FUNDAMENTAL INVESTMENT POLICIES
- --------------------------------------------------------------------------------
The following investment limitations are fundamental, which means the
portfolio cannot change them without approval by vote of a majority of the
outstanding voting securities of the portfolio, as defined by the 1940 Act.
The portfolio will not:
. As to 75% of the total assets of the portfolio, purchase securities for
the portfolio of any issuer, if immediately thereafter (i) more than 5%
of the portfolio's total assets (taken at market value) would be invested
in the securities of such issuer, or (ii) more than 10% of the
outstanding voting securities of any class of such issuer would be held
by the portfolio, provided that this limitation does not apply to U.S.
government securities.
. Act as a securities underwriter.
. Borrow, except that (i) the portfolio may borrow money for temporary
administrative purposes provided that the aggregate of all such
borrowings does not exceed 33 1/3% of the value of the portfolio's total
assets and is not for more than 60 days, and (ii) the portfolio may enter
into interest-rate futures contracts. The portfolio may not borrow for
the purpose of leveraging its investment portfolio. The portfolio may not
purchase additional securities while outstanding borrowings exceed 5% of
the value of its assets.
. Lend the portfolio securities of the portfolio in an amount in excess of
33% of the total assets of the portfolio, taken at market value. Any
loans of portfolio securities will be made according to guidelines
established by the Securities and
6
<PAGE>
Exchange Commission and the board members, including the borrower's
maintaining collateral equal at all times to the value of the securities
loaned.
. Make investments in real estate (including real estate limited partnership
interests, but excluding readily marketable interest in real estate
investment trusts ("REITs") or readily marketable securities of companies
which invest in real estate) or commodities or commodity contracts,
although the portfolio may purchase securities of issuers which deal in
real estate and may purchase securities which are secured by interests in
real estate, and the portfolio may invest in futures contracts and related
options.
. Make loans, except that the portfolio may (i) purchase bonds, debentures
and other publicly-distributed securities of a like nature, (ii) make loans
in the form of call loans or loans maturing in not more than one year which
are secured by marketable collateral and are in amounts and on terms
similar to those currently in effect in the case of loans made by national
banks, (iii) enter into repurchase agreements with respect to portfolio
securities, and (iv) lend the portfolio securities of the portfolio.
Government securities in which the portfolio may invest include (a) direct
obligations of the U.S. Treasury, including bills, bonds and notes, and (b)
obligations issued or guaranteed as to principal and interest by U.S. Government
agencies or instrumentalities and supported by any of (i) the full faith and
credit of the U.S. Treasury (e.g., Government National Mortgage Association
participation certificates); (ii) the right of the issuer to borrow a limited
amount from the U.S. Treasury (e.g., securities of Federal Farm Credit Banks);
(iii) the discretionary authority of the U.S. Government to purchase certain
obligations of the agency or instrumentality (e.g., securities of the Federal
National Mortgage Association); or (iv) the credit of the agency or
instrumentality (e.g., securities of the Student Loan Marketing Association).
While the Fund has the power to pledge its assets to secure borrowings, the Fund
has no intention of pledging the assets of the portfolio taken at market value
in any amount in excess of 33 1/3 of the portfolio's total assets taken at
market value. The deposit of assets in escrow in connection with the writing of
covered put or call options and the purchase of securities on a when-issued or
delayed-delivery basis, and collateral arrangements with respect to the purchase
and sale of stock options and stock index options and initial and variation
margin for futures contracts, are not deemed to be pledges of assets of the
portfolio. Also, although the Fund has the power to make call loans, it has no
intention to do so.
NON-FUNDAMENTAL POLICIES
- --------------------------------------------------------------------------------
In addition to the policies described above, the following limitations are
non-fundamental (i.e., the portfolio may change them without shareholder
approval) policies.
. Invest in puts, calls, straddles, spreads and any combination thereof,
except that (i) the portfolio may write covered put and call options on
securities and write and purchase put and call options on stock indexes,
and (ii) the portfolio may write covered put and call options on U.S.
Government securities.
. Make short sales whereby the dollar amount of short sales at any one time
shall exceed 25% of the net assets of the portfolio, or the value of
securities of any one issuer in which the portfolio is short exceeds the
lesser of 2% of the value of the portfolio's net assets or 2% of the value
of securities of any class of any issuer, except that the portfolio may
make short sales against the box.
. Purchase illiquid securities for the portfolio, including repurchase
agreements maturing in more than seven days, options traded
"over-the-counter," securities lacking readily available market quotations
and securities which cannot be sold without registration or the filing of a
notification under federal or state securities laws, if, as a result, more
than 15% of the portfolio's net assets would then be invested in such
securities.
. Purchase securities for the portfolio of companies which together with
predecessors have a record of less than three years' continuous operation,
and equity securities of issuers which are not readily marketable, if, as a
result, more than 5% of the portfolio's net assets would then be invested
in such securities, except that this restriction shall not apply to the
purchase of securities of REITs.
. Purchase securities from or sell securities to any of its officers or Board
members, except with respect to its own shares and as is permissible under
applicable statutes, rules and regulations.
7
<PAGE>
. Purchase securities of any other investment company, except in connection
with a merger, consolidation, acquisition or reorganization, and except
that the portfolio may purchase securities of money market mutual funds to
the extent permitted by applicable law. This restriction shall not
prohibit the portfolio from investing in securities issued by REITs.
. Purchase securities on margin, except short-term credits as are necessary
for the purchase and sale of securities. For purposes of this restriction,
the deposit or payment of initial or variation margin in connection with
futures contracts or related options will not be deemed to be a purchase
of securities on margin by the portfolio.
MANAGEMENT OF THE FUND
The business of the Fund is managed by its governing board, which, in turn,
elects officers who are responsible for the day-to-day operations of the Fund
and who execute policies formulated by the board. The Fund pays each board
member who is not also an officer or affiliated person (independent board
member) a $150 quarterly retainer fee per active portfolio per quarter and a
$2,000 meeting fee. In addition, each independent board member is reimbursed
for travel and other expenses incurred while attending board meetings. The
$2,000 meeting fee and expense reimbursements are aggregated for all of the
board members and allocated proportionately among the portfolios of the UAM
Funds complex. The Fund does not pay the remaining board members, each of whom
are affiliated with the Fund, for their services as board members. UAM or its
affiliates or CGFSC pay the Fund's officers.
The following table lists the board members and officers of the Fund and
provides information regarding their present positions, date of birth,
address, principal occupations during the past five years, aggregate
compensation received from the Fund and total compensation received from the
UAM Funds complex, which is currently comprised of 47 portfolios. Those people
with an asterisk beside their name are "interested persons" of the Fund as
that term is defined in the 1940 Act.
<TABLE>
<CAPTION>
Total
Compensation
From UAM
Funds Complex
Aggregate Compensation as of
Position UAM from Registrant as of December 31,
Name, Address, DOB Funds Trust Principal Occupations During the Past 5 years December 31, 1998 1998 and
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
John T. Bennett, Jr. Board Member President of Squam Investment Management Company, $7,535 $37,000
College Road -- RFD 3 Inc. and Great Island Investment Company, Inc.;
Meredith, NH 03253 President of Bennett Management Company from 1988
1/26/29 to 1993.
- ---------------------------------------------------------------------------------------------------------------------------------
Nancy J. Dunn Board Member Financial Officer of World Wildlife Fund since January. $7,535 $37,000
10 Garden Street 1999. Formerly, Vice President for Finance and
Cambridge, MA 02138 Administration and Treasurer of Radcliffe College from
8/14/51 1991 to 1999.
- ---------------------------------------------------------------------------------------------------------------------------------
William A. Humenuk Board Member Executive Vice President and Chief Administrative Officer of $7,535 $37,000
100 King Street West Philip Services Corp.; Formerly, a Partner in the
P.O. Box 2440, LCD-1, Philadelphia office of the law firm Dechert Price & Rhoads
Hamilton Ontario, and a Director of Hofler Corp.
Canada L8N-4J6
4/21/42
- ---------------------------------------------------------------------------------------------------------------------------------
Philip D. English Board Member President and Chief Executive Officer of Broventure $7,535 $37,000
16 West Madison Street Company, Inc.; Chairman of the Board of Chektec
Baltimore, MD 21201 Corporation and Cyber Scientific, Inc
8/5/48
- ---------------------------------------------------------------------------------------------------------------------------------
James P. Pappas* Board Member President of UAM Investment Services, Inc. since March 0 0
211 Congress Street 1999 and Vice President UAM Trust Company since
Boston, MA 02110 January 1996; Principal of UAM Fund Distributors, Inc.
2/24/53 since December 1995; formerly Vice President of UAM
Investment Services, Inc. from January 1999 to 1996 and
a Director and Chief Operating Officer of CS First Boston
Investment Management from 1993-1995.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
Total
Compensation
From UAM
Funds Complex
Aggregate Compensation as of
Position UAM Principal Occupations During the Past 5 years from Registrant as of December 31,
Name, Address, DOB Funds Trust December 31, 1998 1998 and
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Norton H. Reamer* Board Member; Chairman, Chief Executive Officer and a Director of 0 0
One International Place President and United Asset Management Corporation; Director, Partner
Boston, MA 02110 Chairman or Trustee of each of the Investment Companies of the
3/21/35 Eaton Vance Group of Mutual Funds.
- ------------------------------------------------------------------------------------------------------------------------------------
Peter M. Whitman, Jr.* Board Member President and Chief Investment Officer of Dewey Square 0 0
One Financial Center Investors Corporation since 1988; Director and Chief
Boston, MA 02111 Executive Officer of H.T. Investors, Inc., formerly a
7/1/43 subsidiary of Dewey Square.
- ------------------------------------------------------------------------------------------------------------------------------------
William H. Park Vice President Executive Vice President and Chief Financial Officer of 0 0
One International Place United Asset Management Corporation.
Boston, MA 02110
9/19/47
- ------------------------------------------------------------------------------------------------------------------------------------
Gary L. French Treasurer President of UAMFSI and UAMFDI, formerly Vice 0 0
211 Congress Street President of Operations, Development and Control of
Boston, MA 02110 Fidelity Investments in 1995; Treasurer of the Fidelity
7/4/51 Group of Mutual Funds from 1991 to 1995.
- ------------------------------------------------------------------------------------------------------------------------------------
Michael E. DeFao Secretary Vice President and General Counsel of UAMFSI and 0 0
211 Congress Street UAMFDI; Associate Attorney of Ropes & Gray (a law firm)
Boston, MA 02110 from 1993 to 1995.
2/28/68
- ------------------------------------------------------------------------------------------------------------------------------------
Robert R. Flaherty Assistant Vice President of UAMFSI; formerly Manager of Fund 0 0
211 Congress Street Treasurer Administration and Compliance of CGFSC from 1995 to
Boston, MA 02110 1996; Senior Manager of Deloitte & Touche LLP from
9/18/63 1985 to 1995.
- ------------------------------------------------------------------------------------------------------------------------------------
Michael J. Leary Assistant Vice President of Chase Global Funds Services 0 0
73 Tremont Street Treasurer Company since 1993. Manager of Audit at Ernst & Young
Boston, MA 02108 from 1988 to 1993.
11/23/65
- ------------------------------------------------------------------------------------------------------------------------------------
Michelle Azrialy Assistant Assistant Treasurer of Chase Global Funds Services 0 0
73 Tremont Street Secretary Company since 1996. Senior Public Accountant with
Boston, MA 02108 Price Waterhouse LLP from 1991 to 1994.
4/12/69
</TABLE>
PRINCIPAL HOLDERS OF SECURITIES
As of March 31,. 1999, the members of the governing board and officers of the
Fund as a group owned less than 1% of the Fund's outstanding shares.
As of March 31, 1999, the following persons or organizations held of record or
beneficially 5% or more of the shares of the portfolio:
<TABLE>
<CAPTION>
Name and Address of Shareholder Percentage of Shares Owned Class
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Charles Schwab & Company Inc. 41.31% Advisor Class Shares
Special Custody Acct FBO Cust Reinv
101 Montgomery Street 18.93% Institutional Class Shares
San Francisco, CA 94104-4122
- ----------------------------------------------------------------------------------------------------------------------------------
United Nations Joint Staff Pension Plan 33.06% Institutional Class Shares
Investment Management Service
United Nations Room S-0702
New York, NY 10017
- ----------------------------------------------------------------------------------------------------------------------------------
National Financial Securities Corp. 12.74% Institutional Class Shares
FBO LCM
200 Liberty Street LBBY 5
New York, NY 10281-0095
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
HAWCO 8.86% Institutional Class Shares
c/o Hawaiian Trust Co
Client Mutual Funds 769
PO Box 1930
Honolulu HI 96805-1930
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Any persons or organizations listed above as owning 25% or more of the
outstanding shares of the portfolio may be presumed to "control" (as that term
is defined in the 1940 Act) the portfolio. As a result, those persons or
organizations could have the ability to vote a majority of the shares of the
portfolio on any matter requiring the approval of shareholders of the
portfolio.
INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT ADVISER
- --------------------------------------------------------------------------------
CONTROL OF ADVISER
The adviser is located at 180 LaSalle Street, Suite 3600, Chicago, Illinois,
60601. The adviser is a subsidiary of UAM and provides investment management
services to corporations, pension and profit-sharing plans, 401(k) and thrift
plans, trusts, estates and other institutions and individuals.
UAM is a holding company incorporated in Delaware in December 1980 for the
purpose of acquiring and owning firms engaged primarily in institutional
investment management. Since its first acquisition in August 1983, UAM has
acquired or organized approximately 45 such affiliated firms (the "UAM
Affiliated Firms"). UAM believes that permitting UAM Affiliated Firms to
retain control over their investment advisory decisions is necessary to allow
them to continue to provide investment management services that are intended
to meet the particular needs of their respective clients. Accordingly, after
acquisition by UAM, UAM Affiliated Firms continue to operate under their own
firm name, with their own leadership and individual investment philosophy and
approach. Each UAM Affiliated Firm manages its own business independently on a
day-to-day basis. Investment strategies employed and securities selected by
UAM Affiliated Firms are separately chosen by each of them. Several UAM
Affiliated Firms also act as investment advisers to separate series or
portfolios of the UAM Funds complex.
Investment Advisory Agreement
Service Performed by Adviser
Pursuant to the Investment Advisory Agreement (Advisory Agreement) between the
Fund, on behalf of the portfolio, and the adviser, the adviser has agreed to:
. Manage the investment and reinvestment of the assets of the portfolio.
. Continuously review, supervise and administer the investment program of the
portfolio.
. Determine in its discretion the securities the portfolio will buy or sell
and the portion of its assets such portfolio will hold uninvested.
Limitation of Liability
In the absence of (1) willful misfeasance, bad faith, or gross negligence of
the part of the adviser in the performance of its obligations and duties under
the Advisory Agreement, (2) reckless disregard by the adviser of its
obligations and duties under the Advisory Agreement, or (3) a loss resulting
from a breach of fiduciary duty with respect to the receipt of compensation
for services, the adviser shall not be subject to any liability whatsoever to
the Fund, for any error of judgment, mistake of law or any other act or
omission in the course of, or connected with, rendering services under the
Advisory Agreement.
10
<PAGE>
Continuing an Advisory Agreement
Unless sooner terminated, an Advisory Agreement shall continue for periods of
one year so long as such continuance is specifically approved at least
annually (a) by a majority of those members of the governing board of the Fund
who are not parties to the Advisory Agreement or interested persons of any
such party and (b) by a majority of the governing board of the Fund or a
majority of the shareholders of the portfolio. An Advisory Agreement may be
terminated at any time by the Fund, without the payment of any penalty, by
vote of a majority of the portfolio's shareholders on 60 days' written notice
to the adviser. The adviser may terminate the Advisory Agreements at any time,
without the payment of any penalty, upon 90 days' written notice to the Fund.
An Advisory Agreement will automatically and immediately terminate if it is
assigned.
Investment Advisory Fee
For its services, the portfolio pays the adviser a fee in monthly installments
at the annual rate of 0.75% of the first $100 million of the portfolio's
average net assets, and 0.65% in excess of $100 million.
Expense Limitation
The adviser may voluntarily agree to limit the expenses of the portfolio. The
adviser may further reduce its compensation to the extent that the expenses of
the portfolio exceed such lower expense limitation as the adviser may, by
notice to the portfolio, declare to be appropriate. The expenses subject to
this limitation are exclusive of brokerage commissions, interest, taxes,
deferred organizational and extraordinary expenses and, if the Fund has a
distribution plan, payments required under such plan. The prospectus describes
the terms of any expense limitation that are in effect from time to time.
Philosophy and Style
The adviser believes that, over the long term, publicly traded real estate
securities' performance is determined by the underlying real estate assets,
real estate market cycles and management's ability to operate and invest in
these assets during each market cycle. The adviser's primary objective is to
generate long-term, superior, risk-adjusted returns by identifying and
investing in publicly traded real estate companies which demonstrate the
highest probability of growing cash flow per share without undue risk to
achieve such growth. As a value-oriented manager, The adviser is committed to
a strategy of investing in companies which offer growth at a reasonable price.
DISTRIBUTORS
- --------------------------------------------------------------------------------
UAMFDI serves as the Fund's distributor. The Fund offers its shares
continuously. While UAMFDI will use its best efforts to sell shares of the
Fund, it is not obligated to sell any particular amount of shares. UAMFDI, an
affiliate of UAM, is located at 211 Congress Street, Boston, Massachusetts
02110.
UAMFDI receives no compensation for its services as distributor of the
Institutional Class Shares. In order to compensate financial services firms
that sell the portfolio's Advisor Class Shares, any amounts UAMFSI may receive
under the Service and Distribution Plan are passed through in their entirely
to third parties. At the discretion of UAMFDI, the entire sales charge it
receives for distribution of the Advisor Class Shares may at times be
reallowed to authorized dealers responsible for the sale.
ACG provides distribution services to the Fund with respect to Advisor Class
shares. ACG sells Advisor Class Shares as agent for the Fund and has agreed
to use all reasonable efforts to secure purchasers for the Advisor Class
Shares and to pay expenses of printing and distributing prospectuses,
statements of additional information, reports, and any other literature and
advertising necessary to sell shares. ACG is located at 1661 Tice Valley
Boulevard, #200, Walnut Creek, California 94592.
ADMINISTRATIVE SERVICES
- --------------------------------------------------------------------------------
Administrator
Pursuant to a Fund Administration Agreement with the Fund, UAMFSI manages,
administers and conducts the general business activities of the Fund. As a
part of its responsibilities, UAMFSI provides and oversees the provision by
various third parties of administrative, fund accounting, dividend disbursing
and transfer agent services for the Fund. UAMFSI, an affiliate of UAM, has its
principal office at 211 Congress Street, Boston, Massachusetts 02110.
11
<PAGE>
UAMFSI will bear all expenses in connection with the performance of its
services under the Fund Administration Agreement. Other expenses to be
incurred in the operation of the Fund will be borne by the Fund or other
parties, including:
. Taxes, interest, brokerage fees and commissions.
. Salaries and fees of officers and members of the board who are not
officers, directors, shareholders or employees of an affiliate of UAM,
including UAMFSI, UAMFDI or the adviser.
. SEC fees and state Blue-Sky fees.
. EDGAR filing fees.
. Processing services and related fees.
. Advisory and administration fees.
. Charges and expenses of pricing and data services, independent public
accountants and custodians.
. Insurance premiums including fidelity bond premiums.
. Outside legal expenses.
. Costs of maintenance of corporate existence.
. Typesetting and printing of prospectuses for regulatory purposes and for
distribution to current shareholders of the Fund.
. Printing and production costs of shareholders' reports and corporate
meetings.
. Cost and expenses of Fund stationery and forms.
. Costs of special telephone and data lines and devices.
. Trade association dues and expenses.
. Any extraordinary expenses and other customary Fund expenses.
Unless sooner terminated, the Fund Administration Agreement shall continue in
effect from year to year provided the board specifically approves such
continuance at least annually. The Board or UAMFSI may terminate the Fund
Administration Agreement, without penalty, on not less than ninety (90) days'
written notice. The Fund Administration Agreement shall automatically
terminate upon its assignment by UAMFSI without the prior written consent of
the Fund.
UAMFSI will from time to time employ or associate with such person or persons
as may be fit to assist them in the performance of the Fund Administration
Agreement. Such person or persons may be officers and employees who are
employed by both UAMFSI and the Fund. UAMFSI will pay such person or persons
for such employment. The Fund will not incur any obligations with respect to
such persons.
Sub-Administrator
UAMFSI has subcontracted some of the its administrative and fund accounting
services to CGFSC, an affiliate of The Chase Manhattan Bank, under a Mutual
Funds Service Agreement dated October 26, 1998. CGFSC is located at 73 Tremont
Street, Boston, Massachusetts 02108.
Sub-Transfer Agent and Sub-Shareholder Servicing Agent
UAMFSI has subcontracted its transfer agent and dividend-disbursing agent
services to DST Systems, Inc. under an Agency Agreement between UAMFSI and DST
Systems Inc. DST Systems, Inc., is located at P.O. Box 419534, Kansas City,
Missouri 64141-6534.
UAMSSC serves as sub-shareholder servicing agent for the Fund under an
agreement between UAMSSC and UAMFSI. The principal place of business of UAMSSC
is 825 Duportail Road, Wayne, Pennsylvania 19087.
12
<PAGE>
Administrative Fees
In exchange for administrative services, the portfolio pays a five-part fee to
UAMFSI as follows:
A. An annual base fee calculated at the annual rate equal to $14,500 for the
first operational class and $3,000 for each additional class.
B. The portfolio specific fee to UAMFSI calculated from the aggregate net
assets of the portfolio at the annual rate of 0.04% .
C. An annual base fee that UAMFSI pays to CGFSC for its sub-administration
and other services calculated at the annual rate of $52,500 for the first
operational class; $7,500 for each additional operational class; and
0.039% of their pro rata share of the combined assets of the UAM Funds .
D. An annual base fee that UAMFSI pays to DST Systems, Inc. for its services
as transfer agent and dividend-disbursing agent equal to $10,500 for the
first operational class and $10,500 for each additional class.
E. An annual base fee that UAMFSI pays to UAMSSC for its services as sub-
shareholder-servicing agent equal to $7,500 for the first operational
class and $2,500 for each additional class.
The portfolio also pays certain account and transaction fees and out-of-pocket
expenses that may be based on the number of open and closed accounts, the type
of account or the services provided to the account.
CUSTODIAN
- --------------------------------------------------------------------------------
The Chase Manhattan Bank, 3 Chase MetroTech Center, Brooklyn, New York 11245,
provides for the custody of the Fund's assets pursuant to the terms of a
custodian agreement with the Fund.
INDEPENDENT PUBLIC ACCOUNTANT
- --------------------------------------------------------------------------------
PricewaterhouseCoopers LLP, 160 Federal Street, Boston, Massachusetts 02110,
serves as independent accountant for the Fund.
SERVICE AND DISTRIBUTION PLANS
- --------------------------------------------------------------------------------
The Fund has adopted a Shareholder Servicing Plan and a Distribution Plan (the
"Plans") for their Advisor Class Shares pursuant to Rule 12b-1 under the 1940
Act.
Shareholder Servicing Plan
The Shareholder Servicing Plan (Service Plan) permits the Fund to compensate
broker-dealers or other financial institutions (Service Agents) that have
agreed with UAMFDI to provide administrative support services to Advisor Class
shareholders that are their customers. Under the Service Plan, Advisor Class
Shares may pay service fees at the maximum annual rate of 0.25% of the average
daily net asset value of such shares held by the Service Agent for the benefit
of its customers. The Fund pays these fees out of the assets allocable to
Advisor Class Shares to the Distributors, to the Service Agent directly or
through UAMFDI. Each item for which a payment may be made under the Service
Plan constitutes personal service and/or shareholder account maintenance and
may constitute an expense of distributing Fund Advisor Class Shares as the SEC
construes such term under Rule 12b-1. Services for which Advisor Class Shares
may compensate Service Agents include:
. Acting as the sole shareholder of record and nominee for beneficial owners.
. Maintaining account records for such beneficial owners of the Fund's
shares.
. Opening and closing accounts.
. Answering questions and handling correspondence from shareholders about
their accounts.
. Processing shareholder orders to purchase, redeem and exchange shares.
. Handling the transmission of funds representing the purchase price or
redemption proceeds.
13
<PAGE>
. Issuing confirmations for transactions in the Fund's shares by
shareholders.
. Distributing current copies of prospectuses, statements of additional
information and shareholder reports.
. Assisting customers in completing application forms, selecting dividend and
other account options and opening any necessary custody accounts.
. Providing account maintenance and accounting support for all transactions.
. Performing such additional shareholder services as may be agreed upon by
the Fund and the Service Agent, provided that any such additional
shareholder services must constitute a permissible non-banking activity in
accordance with the then current regulations of, and interpretations
thereof by, the Board of Governors of the Federal Reserve System, if
applicable.
Rule 12b-1 Distribution Plan
The Distribution Plan permits the portfolio to pay UAMFDI or others for
certain distribution, promotional and related expenses involved in marketing
its Advisor Class Shares. Under the Distribution Plan, Advisor Class Shares
may pay distribution fees at the maximum annual rate of 0.50% of the average
daily net asset value of such shares held by the Service Agent for the benefit
of its customers. These expenses include, among other things:
. Advertising the availability of services and products.
. Designing materials to send to customers and developing methods of making
such materials accessible to customers.
. Providing information about the product needs of customers.
. Providing facilities to solicit Fund sales and to answer questions from
prospective and existing investors about the Fund.
. Receiving and answering correspondence from prospective investors,
including requests for sales literature, prospectuses and statements of
additional information.
. Displaying and making available sales literature and prospectuses.
. Acting as liaison between shareholders and the Fund, including obtaining
information from the Fund and providing performance and other information
about the Fund.
In addition, the Advisor Class Shares may make payments directly to other
unaffiliated parties, who either aid in the distribution of their shares or
provide services to the Class.
Fees Paid under the Service and Distribution Plans
The Plans permit Advisor Class Shares to pay distribution and service fees at
the maximum annual rate of 0.50% of the class' average daily net assets for
the year. The Fund's governing board has limited the amount the Advisor Class
may pay under the Plans to 0.25% of the class' average daily net assets for
the year, and may increase such amount to the plan maximum at any time.
The Fund will not reimburse UAMFDI or others for distribution expenses
incurred in excess of the amount permitted by the Plans.
Subject to seeking best price and execution, the Fund may buy or sell
portfolio securities through firms that receive payments under the Plans.
UAMFDI, at its own expense, may pay dealers for aid in distribution or for aid
in providing administrative services to shareholders.
Approving, Amending and Terminating the Fund's Distribution Arrangements
Shareholders of the portfolio have approved the Plans. The Plans also were
approved by the governing board of the Fund, including a majority of the
members of the board who are not interested persons of the Fund and who have
no direct or indirect financial interest in the operation of the Plans (Plan
Members), by votes cast in person at meetings called for the purpose of voting
on these Plans.
14
<PAGE>
Continuing the Plans
The Plans continue in effect from year to year so long as they are approved
annually by a majority of the Fund's board members and its Plan Members. To
continue the Plans, the board must determine whether such continuation is in
the best interest of the Advisor Class shareholders and that there is a
reasonable likelihood of the Plans providing a benefit to the class. The
board has determined that the Fund's distribution arrangements are likely to
benefit the Fund and its shareholders by enhancing the Fund's ability to
efficiently service the accounts of its Advisor Class shareholders.
Amending the Plans
A majority of the Fund's governing board and a majority of its the Plan
Members must approve any material amendment to the Plans. Likewise, any
amendment materially increasing the maximum percentage payable under the Plans
must be approved by a majority of the outstanding voting securities of the
Class, as well as by a majority of the Plan Members.
Terminating the Plans
A majority of the Plan Members or a majority of the outstanding voting
securities of the Class may terminate the Plans at any time without penalty.
In addition, the Plans will terminate automatically upon their assignment.
Miscellaneous
So long as the Plans are in effect, the non-interested board members will
select and nominate the non-interested board members who may or may not be
Plan Members of the Fund.
The Fund and UAMFDI intend to comply with the Conduct Rules of the National
Association of Securities Dealers relating to investment company sales
charges.
Pursuant to the Plans, the board reviews, at least quarterly, a written report
of the amounts expended under each agreement with Service Agents and the
purposes for which the expenditures were made.
Additional Non-12b-1 Shareholder Servicing Arrangements
In addition to payments by the Fund under the Plans, UAM and any of its
affiliates, may, at its own expense, compensate a Service Agent or other
person for marketing, shareholder servicing, record-keeping and/or other
services performed with respect to the Fund, the portfolio or any class of
shares of the portfolio. The person making such payments may do so out of its
revenues, its profits or any other source available to it. Such services
arrangements, when in effect, are made generally available to all qualified
service providers. The adviser may also compensate its affiliated companies
for referring investors to the portfolio.
SALES COMPENSATION
- --------------------------------------------------------------------------------
Sales Charges
Shareholders of the portfolio incur a sales charge when they purchase Advisor
Class shares. The amount of the sales charge is contingent upon the amount of
the shareholder's investment, as described in the table below. The reduced
charges are applicable to purchases of at least $100,000. A group of "related
investors" such as immediate family members, may received the reduced charge.
<TABLE>
<CAPTION>
Dealer
Concession as a
As a % of As a % of Your % of Offering
Your Investment Offering Price Investment Price
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Up to $99,999 4.75% 4.99% 4.00
- ----------------------------------------------------------------------------------------------
$100,000 to $249,999 4.00 4.17 3.50
- ----------------------------------------------------------------------------------------------
$250,000 to $499,999 3.00 3.09 2.50
</TABLE>
15
<PAGE>
<TABLE>
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
$500,000 to $999,999 2.00 2.04 1.75
- ----------------------------------------------------------------------------------------------
$1,000,000 and over 1.00 1.01 0.75
- ----------------------------------------------------------------------------------------------
</TABLE>
Letter of Intent
Shareholders may purchase shares of the portfolio at a reduced sales charge by
executing a letter of intent to purchase no less than $100,000 of shares of
the portfolio within a 13-month period. The shareholder will be charged the
sales charge applicable to each purchase made pursuant to a letter of intent
as if the total dollar amount were being bought in a single transaction.
Purchases made within a 90-day period prior to the letter of intent may be
included in the minimum calculation; however, in such case the date of the
earliest of such purchases marks the commencement of the 13-month period.
A shareholder may include toward completion of a letter of intent the current
value of all of the shareholder's shares of the portfolio held of record as of
the date of the letter of intent, plus the current value as of such date of
all of such shares held by any "related person" as eligible to join with the
investor in a single purchase.
A letter of intent does not bind the investor to purchase the specified
amount. Shares equivalent to 2% of the specified amount will, however, be
taken from the initial purchase (or, if necessary, subsequent purchases) and
held in escrow in the investor's account as collateral against the higher
sales charge which would apply if the total purchase is not completed within
the allotted time. The escrowed shares will be released when the aggregate
purchase specified under the Letter of Intent is completed, or if it is not
completed, when the balance of the higher sales charge is, upon notice,
remitted by the investor. All dividends and capital gains distributions with
respect to the escrowed shares will be credited to the investor's account.
Special Programs
Shareholders may also purchase Advisor Class shares without a sales charge if
they participate in one of the following special programs:
. Purchase shares through a registered investment advisers exercising
discretionary investment authority with respect to the purchase of
portfolio shares.
. If they are a Service Agent that charges account management fees.
. If they are a registered representative or employee (and their spouses and
minor children) of any Authorized Broker or Service Agent; trust
departments of financial institutions; other investment companies in
connection with the sale to the portfolio of cash and securities owned by
such other investment companies.
. If they established a separate account maintained by an insurance company
that is exempt from registration under Section 3(c)(11) of the 1940 Act.
. If they are a member of an organization that make recommendations to or
permit group solicitations in connection with the purchase of shares of the
Fund.
. If they maintain an "eligible employee benefit plans" of employers who
have at least 2,000 U.S. employees to whom such a plan is made available
and, regardless of the number of employees, if such plan is established and
maintained by any Authorized Broker or Service Agent. An "eligible
employee benefit plan" means any plan or arrangement, whether or not tax
qualified, which provides for the purchase of Fund shares. Sales of shares
to such plans must be made in connection with a payroll deduction system of
plan funding or other system acceptable to the Distributor.
Purchases may also be made at net asset value, without a sales charge,
provided that such purchases are placed through a Service Agent and such
purchases are made by the following:
. Investment advisers or financial planners who place trades for their own
accounts or the accounts of their clients and who charge a management,
consulting or other fee for their services.
. Clients of such investment advisers or financial planners who place trades
for their own accounts if the accounts are linked to the master account of
such investment adviser or financial planner on the books and records of
the Service Agent; and
. Retirement and deferred compensation plans and trusts used to fund those
plans, including, but not limited to, those defined in section 401(a),
403(b) or 457 of the Internal Revenue Code and "rabbi trusts."
16
<PAGE>
Additional Compensation to Dealers
At the discretion of the Distributor, the entire sales charge it receives for
distribution of the Advisor Class shares may at times be reallowed to
authorized dealers responsible for the sale. When more than 90% of the sales
charge is reallowed, such dealers may be deemed to be underwriters, as that
term is defined in the Securities Act of 1933. The Distributor may also, at
their own expense, provide additional compensation to dealers in connection
with the sale of shares of the portfolio. This compensation may only be
available to those dealers whose representatives have sold or are expected to
sell significant amounts of shares of the portfolio. This compensation may
include:
. Financial assistance to dealers in connection with conferences, sales or
training programs for their employees.
. Seminars for the public.
. Advertising, sales companies and/or shareholder services and programs
regarding the portfolio.
. Various other dealer-sponsored programs or events.
. Travel expenses, including lodging, incurred in connection with trips taken
by registered representatives and members of their families for meetings or
seminars of a business nature.
Dealers are not permitted to use sales of the portfolio's shares to qualify
for this compensation to the extent prohibited by the laws of any state or any
self-regulatory agency, such as the national Association of Securities
Dealers, Inc., none of this additional compensation is paid for by the
portfolio or its shareholders.
Brokerage Allocation and Other Practices
SELECTION OF BROKERS
- --------------------------------------------------------------------------------
The Advisory Agreement authorizes the adviser to select the brokers or dealers
that will execute the purchases and sales of investment securities for the
portfolio. The Advisory Agreement also directs the adviser to use its best
efforts to obtain the best execution with respect to all transactions for the
portfolio. The adviser may select brokers based on research, statistical and
pricing services they provide to the adviser. Information and research
provided by a broker will be in addition to, and not instead of, the services
the adviser is required to perform under the Advisory Agreement. In so doing,
the portfolio may pay higher commission rates than the lowest rate available
when the adviser believes it is reasonable to do so in light of the value of
the research, statistical, and pricing services provided by the broker
effecting the transaction.
It is not the practice of the Fund to allocate brokerage or effect principal
transactions with dealers based on sales of shares that a broker-dealer firm
makes. However, the Fund may place trades with qualified broker-dealers who
recommend the Fund or who act as agents in the purchase of Fund shares for
their clients. During the Fund's fiscal year ended December 31, 1998, neither
the Fund nor the adviser directed any of the Fund's brokerage transactions to
a broker because of research services provided.
SIMULTANEOUS TRANSACTIONS
- --------------------------------------------------------------------------------
The adviser makes investment decisions for the portfolio independently of
decisions made for its other clients. When a security is suitable for the
investment objective of more than one client, it may be prudent for the
adviser to engage in a simultaneous transaction, that is, buy or sell the same
security for more than one client. The adviser strives to allocate such
transactions among its clients, including the portfolio, in a fair and
reasonable manner. Although there is no specified formula for allocating such
transactions, the Fund's governing board periodically reviews the various
allocation methods used by the adviser.
17
<PAGE>
BROKERAGE COMMISSIONS
- --------------------------------------------------------------------------------
Equity Securities
Generally, equity securities are bought and sold through brokerage
transactions for which commissions are payable. Purchases from underwriters
will include the underwriting commission or concession, and purchases from
dealers serving as market makers will include a dealer's mark-up or reflect a
dealer's mark-down.
Debt Securities
Debt securities are usually bought and sold directly from the issuer or an
underwriter or market maker for the securities. Generally, each Fund will not
pay brokerage commissions for such purchases. When a debt security is bought
from an underwriter, the purchase price will usually include an underwriting
commission or concession. The purchase price for securities bought from
dealers serving as market makers will similarly include the dealer's mark up
or reflect a dealer's mark down. When the portfolio executes transactions in
the over-the-counter market, it will deal with primary market makers unless
prices that are more favorable are otherwise obtainable.
Capital Stock and Other Securities
DESCRIPTION OF SHARES AND VOTING RIGHTS
- --------------------------------------------------------------------------------
The Fund's Agreement and Declaration of Trust permits the Fund to issue an
unlimited number of shares of beneficial interest, without par value. The
Board members have the power to designate one or more series (portfolios) or
classes of shares of beneficial interest without further action by
shareholders. The board has authorized an additional class of shares known as
Institutional Service Class Shares. As of the date of this SAI, no
Institutional Service Class Shares have been offered by this portfolio.
When issued and paid for, the shares of each series and class of the Fund are
fully paid and nonassessable, and have no pre-emptive rights or preference as
to conversion, exchange, dividends, retirement or other features. The shares
of the Fund have noncumulative voting rights, which means that the holders of
more than 50% of the shares voting for the election of board members can elect
100% of the board if they choose to do so. On each matter submitted to a vote
of the shareholders, a shareholder is entitled to one vote for each full share
held (and a fractional vote for each fractional share held), then standing in
his name on the books of the Fund. Shares of all classes will vote together as
a single class except when otherwise required by law or as determined by the
members of the Fund's governing board.
If the Fund is liquidated, the shareholders of each portfolio or any class
thereof are entitled to receive the net assets belonging to that portfolio, or
in the case of a class, belonging to that portfolio and allocable to that
class. The Fund will distribute is net assets to its shareholders in
proportion to the number of shares of that portfolio or class thereof held by
them and recorded on the books of the Fund. The liquidation of any portfolio
or class thereof may be authorized at any time by vote of a majority of the
members of the governing board.
The governing board has authorized three classes of shares, Institutional,
Institutional Service and Advisor. The three classes represent interests in
the same assets of the portfolio and, except as discussed below, are identical
in all respects. Unlike Institutional and Advisor Class Shares, Institutional
Service Class Shares bear certain expenses related to shareholder servicing
and the distribution of such shares and have exclusive voting rights with
respect to matters relating to such distribution expenditures. The Advisor
Class Shares impose a sales load on purchases. The classes also have
different exchange privileges. The net income attributable to Advisor Class
Shares and the dividends payable on Advisor Class Shares will be reduced by
the amount of the shareholder servicing and distribution fees; accordingly,
the net asset value of the Advisor Class Shares will be reduced by such amount
to the extent the portfolio has undistributed net income.
The Fund will not hold annual meetings except when required to by the 1940 Act
or other applicable law.
18
<PAGE>
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
- --------------------------------------------------------------------------------
The Fund intends to distribute substantially all of the net investment income
of the portfolio and net realized capital gains so as to avoid income taxes on
its dividends and distributions and the imposition of the federal excise tax
on undistributed income and capital gains. However, the Fund cannot predict
the time or amount of any such dividends or distributions.
Distributions by the portfolio reduce its net asset value ("NAV"). A
distribution that reduces the NAV of the portfolio below its cost basis is
taxable as described in the prospectus of the portfolio, although from an
investment standpoint, it is a return of capital. If you buy shares of the
portfolio on or before the "record date" (the date that establishes which
shareholders will receive an upcoming distribution) for a distribution, you
will receive some of the money you invested as a taxable distribution.
Unless the shareholder elects otherwise in writing, all dividend and capital
gains distributions are automatically received in additional shares of the
portfolio at net asset value (as of the business day following the record
date). This will remain in effect until the Fund is notified by the
shareholder in writing at least three days prior to the record date that
either the Income Option (income dividends in cash and capital gains
distributions in additional shares at net asset value) or the Cash Option
(both income dividends and capital gains distributions in cash) has been
elected. An account statement is sent to shareholders whenever an income
dividend or capital gains distribution is paid.
The portfolio will be treated as a separate entity (and hence as a separate
"regulated investment company") for federal tax purposes. The portfolio will
distribute its net capital gains to its investors, but will not offset (for
federal income tax purposes) such gains against any net capital losses of
another portfolio.
Purchase Redemption and Pricing of Shares
PURCHASE OF SHARES
- --------------------------------------------------------------------------------
Service Agents may enter confirmed purchase orders on behalf of their
customers. If shares of the portfolio are purchased in this manner, the
Service Agent must receive your investment order before the close of trading
on the New York Stock Exchange ("NYSE") and transmit it to UAMSSC before the
close of its business day to receive that day's share price. UAMSSC must
receive proper payment for the order by the time the portfolio is priced on
the following business day. Service Agents are responsible to their customers
and the Fund for timely transmission of all subscription and redemption
requests, investment information, documentation and money.
Purchases of shares of the portfolio will be made in full and fractional
shares of the portfolio calculated to three decimal places. Certificates for
fractional shares will not be issued. Certificates for whole shares will not
be issued except at the written request of the shareholder.
The Fund reserves the right in its sole discretion to reduce or waive the
minimum for initial and subsequent investment for certain fiduciary accounts
such as employee benefit plans or under circumstances where certain economies
can be achieved in sales of the portfolio's shares.
In-Kind Purchases
If accepted by the Fund, shareholders may purchase shares of the portfolio in
exchange for securities that are eligible for acquisition by the portfolio.
Securities to be exchanged that are accepted by the Fund will be valued as
described under "VALUATION OF SHARES" at the next determination of net asset
value after acceptance. Shares issued by the portfolio in exchange for
securities will be issued at net asset value determined as of the same time.
All dividends, interest, subscription, or other rights pertaining to such
securities shall become the property of the portfolio and must be delivered to
the Fund by the investor upon receipt from the issuer. Securities acquired
through an in-kind purchase will be acquired for investment and not for
immediate resale.
The Fund will not accept securities in exchange for shares of the portfolio
unless:
. At the time of exchange, such securities are eligible to be included in the
portfolio (current market quotations must be readily available for such
securities).
19
<PAGE>
. The investor represents and agrees that all securities offered to be
exchanged are liquid securities and not subject to any restrictions upon
their sale by the portfolio under the Securities Act of 1933, or otherwise.
. The value of any such securities (except U.S. government securities) being
exchanged together with other securities of the same issuer owned by the
portfolio will not exceed 5% of the net assets of the portfolio immediately
after the transaction.
Investors who are subject to Federal taxation upon exchange may realize a gain
or loss for Federal income tax purposes depending upon the cost of securities
or local currency exchanged. Investors interested in such exchanges should
contact the adviser.
REDEMPTION OF SHARES
- --------------------------------------------------------------------------------
When you redeem, your shares may be worth more or less than the price you paid
for them depending on the market value of the investments held by the
portfolio.
By Mail
. Requests to redeem shares must include:
. Share certificates, if issued.
. A letter of instruction or an assignment specifying the number of shares or
dollar amount to be redeemed, signed by all registered owners of the shares
in the exact names in which they are registered.
. Any required signature guarantees (see "SIGNATURE GUARANTEES").
. Any other necessary legal documents, if required, in the case of estates,
trusts, guardianships, custodianships, corporations, pension and profit
sharing plans and other organizations.
By Telephone
The following tasks cannot be accomplished by telephone:
. Changing the name of the commercial bank or the account designated to
receive redemption proceeds (this can be accomplished only by a written
request signed by each shareholder, with each signature guaranteed).
. Redemption of certificated shares by telephone.
The Fund and its Sub-Transfer Agent will employ reasonable procedures to
confirm that instructions communicated by telephone are genuine, and they may
be liable for any losses if they fail to do so. These procedures include
requiring the investor to provide certain personal identification at the time
an account is opened, as well as prior to effecting each transaction requested
by telephone. In addition, all telephone transaction requests will be recorded
and investors may be required to provide additional telecopied written
instructions of such transaction requests. The Fund or Sub-Transfer Agent may
be liable for any losses due to unauthorized or fraudulent telephone
instructions if the Fund or the Sub-Transfer Agent does not employ the
procedures described above. Neither the Fund nor the Sub-Transfer Agent will
be responsible for any loss, liability, cost or expense for following
instructions received by telephone that it reasonably believes to be genuine.
Redemptions-In-Kind
If the governing board determines that it would be detrimental to the best
interests of remaining shareholders of the Fund to make payment wholly or
partly in cash, the Fund may pay redemption proceeds in whole or in part by a
distribution in-kind of liquid securities held by the portfolio in lieu of
cash in conformity with applicable rules of the SEC. Investors may incur
brokerage charges on the sale of portfolio securities received in payment of
redemptions.
However, the Fund has made an election with the SEC to pay in cash all
redemptions requested by any shareholder of record limited in amount during
any 90-day period to the lesser of $250,000 or 1% of the net assets of the
Fund at the beginning of such period. Such commitment is irrevocable without
the prior approval of the SEC. Redemptions in excess of the above limits may
be paid in whole or in part, in investment securities or in cash, as the
Directors may deem advisable; however, payment will be made wholly in cash
unless the governing board believes that economic or market conditions exist
which would make such a practice detrimental to the best interests of the
Fund. If redemptions are paid in investment securities, such securities will
be
20
<PAGE>
valued as set forth under "Valuation of Shares." A redeeming shareholder
would normally incur brokerage expenses if these securities were converted to
cash.
Signature Guarantees
To protect your account, the Fund and its sub-transfer agent from fraud,
signature guarantees are required for certain redemptions. The purpose of
signature guarantees is to verify the identity of the person who has
authorized a redemption from your account.
Signatures must be guaranteed by an "eligible guarantor institution" as
defined in Rule 17Ad-15 under the Securities Exchange Act of 1934. Eligible
guarantor institutions include banks, brokers, dealers, credit unions,
national securities exchanges, registered securities associations, clearing
agencies and savings associations. A complete definition of eligible
guarantor institutions is available from the Fund's transfer agent. Broker-
dealers guaranteeing signatures must be a member of a clearing corporation or
maintain net capital of at least $100,000. Credit unions must be authorized
to issue signature guarantees. Signature guarantees will be accepted from any
eligible guarantor institution that participates in a signature guarantee
program.
The signature guarantee must appear either (1) on the written request for
redemption, (2) on a separate instrument for assignment ("stock power") which
should specify the total number of shares to be redeemed, or (3) on all stock
certificates tendered for redemption and, if shares held by the Fund are also
being redeemed, on the letter or stock power.
Other Redemption Information
Normally, the Fund will pay for all shares redeemed under proper procedures
within one business day of and no more than seven days after the receipt of
the request, or earlier if required under applicable law. The Fund may suspend
the right of redemption or postpone the date at times when both the NYSE and
Custodian Bank are closed, or under any emergency circumstances determined by
the SEC.
The Fund may suspend redemption privileges or postpone the date of payment:
. During any period that both the NYSE and custodian bank are closed, or
trading on the NYSE is restricted as determined by the Commission.
. During any period when an emergency exists as defined by the rules of the
Commission as a result of which it is not reasonably practicable for the
portfolio to dispose of securities owned by it, or to fairly determine
the value of its assets.
. For such other periods as the Commission may permit.
EXCHANGE PRIVILEGE
- --------------------------------------------------------------------------------
The exchange privilege is only available with respect to portfolios that are
qualified for sale in the shareholder's state of residence. Exchanges are
based on the respective net asset values of the shares involved. The
Institutional Class and Advisor Class Shares of UAM Funds do not charge a
sales commission or charge of any kind for exchanges.
Neither the Fund nor any of its service providers will be responsible for the
authenticity of the exchange instructions received by telephone. The
governing board of the Fund may restrict the exchange privilege at any time.
Such instructions may include limiting the amount or frequency of exchanges
and may be for the purpose of assuring such exchanges do not disadvantage the
Fund and its shareholders.
TRANSFER OF SHARES
- --------------------------------------------------------------------------------
Shareholders may transfer shares of the portfolio to another person by making
a written request to the Fund. Your request should clearly identify the
account and number of shares you wish to transfer. All registered owners
should sign the request and all stock certificates, if any, which are subject
to the transfer. The signature on the letter of request, the stock certificate
or any stock power must be guaranteed in the same manner as described under
"Signature Guarantees." As in the case of redemptions, the written request
must be received in good order before any transfer can be made.
21
<PAGE>
VALUATION OF SHARES
- --------------------------------------------------------------------------------
The Fund does not price its shares on those days when the New York Stock
Exchange is closed, which are currently: New Year's Day, Dr. Martin Luther
King, Jr. Day, Presidents' Day; Good Friday; Memorial Day; Independence Day;
Labor Day; Thanksgiving Day; and Christmas Day.
Equity Securities
Equity securities listed on a securities exchange for which market quotations
are readily available are valued at the last quoted sale price of that day.
Price information on listed securities is taken from the exchange where the
security is primarily traded. If no sale price is available, the security is
valued at the average price between the last report bid and the last reported
offer prices on that day. The value of securities for which market quotations
are not readily available is determined in good faith at fair value using
methods determined by the board members. Quotations of foreign securities in
a foreign currency are converted to U.S. dollar equivalents. The converted
value is based upon the bid price of the foreign currency against U.S. dollars
quoted by any major bank or by a broker.
Debt Securities
Debt securities are valued according to the broadest and most representative
market, which will ordinarily be the over-the-counter market. Debt securities
may be valued based on prices provided by a pricing service when such prices
are believed to reflect the fair market value of such securities. Securities
purchased with remaining maturities of 60 days or less are valued at amortized
cost when the governing board determines that amortized cost reflects fair
value.
Other Assets
The value of other assets and securities for which no quotations are readily
available (including restricted securities) is determined in good faith at
fair value using methods determined by the governing board.
Performance Calculations
The portfolio measures performance by calculating yield and total return. Both
yield and total return figures are based on historical earnings and are not
intended to indicate future performance. Performance quotations by investment
companies are subject to rules adopted by the SEC, which require the use of
standardized performance quotations or, alternatively, that every non-
standardized performance quotation furnished by the Fund be accompanied by
certain standardized performance information computed as required by the SEC.
Current yield and average annual compounded total return quotations used by
the Fund are based on the standardized methods of computing performance
mandated by the SEC. An explanation of the method used to compute or express
performance follows.
Performance is calculated separately for Institutional Class and Advisor Class
Shares. Dividends paid by the portfolio with respect to Institutional Class
and Advisor Class Shares, to the extent any dividends are paid, will be
calculated in the same manner at the same time on the same day and will be in
the same amount, except that service fees, distribution charges and any
incremental transfer agency costs relating to Advisor Class Shares will be
borne exclusively by that class.
TOTAL RETURN
- --------------------------------------------------------------------------------
Total return is the change in value of an investment in the portfolio over a
given period, assuming reinvestment of any dividends and capital gains. A
cumulative or aggregate total return reflects actual performance over a stated
period of time. An average annual total return is a hypothetical rate of
return that, if achieved annually, would have produced the same cumulative
total return if performance had been constant over the entire period.
The average annual total return of the portfolio is determined by finding the
average annual compounded rates of return over 1, 5 and 10 year periods that
would equate an initial hypothetical $1,000 investment to its ending
redeemable value. The calculation assumes that all dividends and distributions
are reinvested when paid. The quotation assumes the amount was completely
redeemed at the end of each one, five and ten-year period and the deduction of
all applicable Fund expenses on an
22
<PAGE>
annual basis. Since Advisor Class Shares bear additional service and
distribution expenses, their average annual total return will generally be
lower than that of the Institutional Class Shares.
These figures are calculated according to the following formula:
P (1 + T)/n/ = ERV
Where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment made
at the beginning of the 1, 5 or 10 year periods at the end of
the 1, 5 or 10 year periods (or fractional portion thereof).
For the periods ended December 31, 1998, the average annual total rates of
return of the Institutional and Advisor Classes of the portfolio are as
follows:
<TABLE>
<CAPTION>
One Year Five Years Since Inception*
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Heitman Real Estate Portfolio (15.12)% 10.14% 8.33%
Institutional Class Shares
- --------------------------------------------------------------------------------------------------------
Advisor Class Shares (15.54)% n/a 13.46%
</TABLE>
* The Institutional Class Shares began operations on 5/15/95, and the Advisor
Class Shares began operations on 3/13/89.
YIELD
- --------------------------------------------------------------------------------
Yield refers to the income generated by an investment in the portfolio over a
given period of time, expressed as an annual percentage rate. Yields are
calculated according to a standard that is required for all funds. As this
differs from other accounting methods, the quoted yield may not equal the
income actually paid to shareholders.
The current yield is determined by dividing the net investment income per
share earned during a 30-day base period by the maximum offering price per
share on the last day of the period and annualizing the result. Expenses
accrued for the period include any fees charged to all shareholders during the
base period. Since Advisor Class Shares bear additional service and
distribution expenses, their yield will generally be lower than that of the
Institutional Class Shares.
Yield is obtained using the following formula:
Yield = 2[((a-b)/(cd)+1)/6/-1]
Where:
a = dividends and interest earned during the period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of shares outstanding during the period that
were entitled to receive income distributions
d = the maximum offering price per share on the last day of the period.
COMPARISONS
- --------------------------------------------------------------------------------
The portfolio's performance may be compared to data prepared by independent
services which monitor the performance of investment companies, data reported
in financial and industry publications, and various indices as further
described in the SAI. This information may also be included in sales
literature and advertising.
To help investors better evaluate how an investment in the portfolio of the
Fund might satisfy their investment objective, advertisements regarding the
Fund may discuss various measures of Fund performance as reported by various
financial
23
<PAGE>
publications. Advertisements may also compare performance (as
calculated above) to performance as reported by other investments, indices and
averages. Please see Appendix B for publications, indices and averages that
may be used.
In assessing such comparisons of performance, an investor should keep in mind
that the composition of the investments in the reported indices and averages
is not identical to the composition of investments in the]portfolio, that the
averages are generally unmanaged, and that the items included in the
calculations of such averages may not be identical to the formula used by the
portfolio to calculate its performance. In addition, there can be no assurance
that the portfolio will continue this performance as compared to such other
averages.
Taxes
In order for the portfolio to continue to qualify for federal income tax
treatment as a regulated investment company under the Internal Revenue Code of
1986, as amended, at least 90% of its gross income for a taxable year must be
derived from qualifying income; i.e., dividends, interest, income derived from
loans of securities, and gains from the sale of securities or foreign
currencies, or other income derived with respect to its business of investing
in such securities or currencies, as applicable.
The portfolio will distribute to shareholders annually any net capital gains
that have been recognized for federal income tax purposes. Shareholders will
be advised on the nature of the payments.
If for any taxable year the portfolio does not qualify as a "regulated
investment company" under Subchapter M of the Internal Revenue Code, all of
the portfolio's taxable income would be subject to tax at regular corporate
rates without any deduction for distributions to shareholders. In this event,
the portfolio's distributions to shareholders would be taxable as ordinary
income to the extent of the current and accumulated earnings and profits of
the particular portfolio, and would be eligible for the dividends received
deduction in the case of corporate shareholders. The portfolio intends to
qualify as a "regulated investment company" each year.
Dividends and interest received by the portfolio may give rise to withholding
and other taxes imposed by foreign countries. These taxes would reduce the
portfolio's dividends but are included in the taxable income reported on your
tax statement if the portfolio qualifies for this tax treatment and elects to
pass it through to you. Consult a tax adviser for more information regarding
deductions and credits for foreign taxes.
Expenses
<TABLE>
<CAPTION>
Commissions
Commissions for
to ACG for Distribution
Investment Investment Distribution retained by
Advisory Advisory Administrator Brokerage (Advisor Class Principal
Fees Paid Fees Waived Fee Commissions Shares only) Underwriter
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
Heitman Real Estate Portfolio
1998 $1,185,717 $0 $260,996 $429,132 $173,096 $0
- --------------------------------------------------------------------------------------------------------------------------------
1997 $1,489,121 $0 $213,711 $480,427 $190,631 $0
- --------------------------------------------------------------------------------------------------------------------------------
1996 $ 992,968 $0 $141,640 $400,540 $ 89,289 $0
</TABLE>
Effective March 1, 1998, UAMFDI became the fund's administrator. Prior to
June 30, 1998, another firm provided administrative services to the fund.
<TABLE>
<CAPTION>
Distribution and Service Plan Expenses
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Heitman Real Estate Portfolio
Advisor Class $346,192
</TABLE>
24
<PAGE>
Financial Statements
The financial statements for the portfolio for the fiscal year ended December
31, 1998, the financial highlights for the respective periods presented, and
the report thereon by PricewaterhouseCoopers LLP, the Fund's independent
accountant, which appear in the portfolio's 1998 Annual Report, are
incorporated by reference into this SAI. No other parts of the Annual Report
are incorporated by reference herein. Copies of the 1998 Annual Report may be
obtained free of charge by telephoning the UAM Funds at the telephone number
appearing on the front page of this SAI.
25
<PAGE>
Appendix A: Description Of Securities And Ratings
MOODY'S INVESTORS SERVICE, INC.
- --------------------------------------------------------------------------------
Preferred Stock Ratings
<TABLE>
<S> <C>
aaa An issue which is rated "aaa" is considered to be a top-quality preferred stock. This rating
indicates good asset protection and the least risk of dividend impairment within the universe
of preferred stock.
aa An issue which is rated "aa" is considered a high-grade preferred stock. This rating
indicates that there is a reasonable assurance the earnings and asset protection will remain
relatively well maintained in the foreseeable future.
a An issue which is rated "a" is considered to be an upper-medium grade preferred stock. While
risks are judged to be somewhat greater than in the "aaa" and "aa" classification, earnings
and asset protection are, nevertheless, expected to be maintained at adequate levels.
baa An issue which is rated "baa" is considered to be a medium-grade preferred stock, neither
highly protected nor poorly secured. Earnings and asset protection appear adequate at
present but may be questionable over any great length of time.
ba An issue which is rated "ba" is considered to have speculative elements and its future cannot
be considered well assured. Earnings and asset protection may be very moderate and not well
safeguarded during adverse periods. Uncertainty of position characterizes preferred stocks
in this class.
b An issue which is rated "b" generally lacks the characteristics of a desirable investment.
Assurance of dividend payments and maintenance of other terms of the issue over any long
periods of time may be small.
caa An issue which is rated "caa" is likely to be in arrears on dividend payments. This rating
designation does not purport to indicate the future status of payments.
ca An issue which is rated "ca" is speculative in a high degree and is likely to be in arrears
on dividends with little likelihood of eventual payments.
c This is the lowest rated class of preferred or preference stock. Issues so rated can thus be
regarded as having extremely poor prospects of ever attaining any real investment standing.
</TABLE>
Note: Moody's applies numerical modifiers 1, 2, and 3 in each rating
classification: the modifier 1 indicates that the security ranks in the
higher end of its generic rating category; the modifier 2 indicates a mid-
range ranking and the modifier 3 indicates that the issue ranks in the lower
end of its generic rating category.
Debt Ratings - Taxable Debt & Deposits Globally
<TABLE>
<S> <C>
Aaa Bonds which are rated Aaa are judged to be of the best quality. They carry the smallest
degree of investment risk and are generally referred to as "gilt-edged." Interest payments
are protected by a large or by an exceptionally stable margin and principal is secure. While
the various protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
</TABLE>
A-1
<PAGE>
Aa Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are
generally known as high-grade bonds. They are rated lower than the
best bonds because margins of protection may not be as large as in
Aaa securities or fluctuation of protective elements may be of
greater amplitude or there may be other elements present which make
the long-term risks appear somewhat larger than the Aaa securities.
A Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper-medium grade obligations. Factors
giving security to principal and interest are considered adequate,
but elements may be present which suggest a susceptibility to
impairment sometime in the future.
Baa Bonds which are rated Baa are considered as medium-grade
obligations, (i.e., they are neither highly protected nor poorly
secured). Interest payments and principal security appear adequate
for the present but certain protective elements may be lacking or
may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and in fact
have speculative characteristics as well.
Ba Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well-assured. Often the
protection of interest and principal payments may be very moderate,
and thereby not well safeguarded during both good and bad times over
the future. Uncertainty of position characterizes bonds in this
class.
B Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments
or of maintenance of other terms of the contract over any long
period of time may be small.
Caa Bonds which are rated Caa are of poor standing. Such issues may be
in default or there may be present elements of danger with respect
to principal or interest.
Ca Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other
marked shortcomings.
C Bonds which are rated C are the lowest rated class of bonds, and
issues so rated can be regarded as having extremely poor prospects
of ever attaining any real investment standing.
Note: Moody's applies numerical modifiers 1, 2 and 3 in each generic rating
classification from Aa through Caa. The modifier 1 indicates that the
obligation ranks in the higher end of its generic rating category; modifier 2
indicates a mid-range ranking; and the modifier 3 indicates a ranking in the
lower end of that generic rating category.
Short-Term Prime Rating System - Taxable Debt & Deposits Globally
Moody's short-term debt ratings are opinions of the ability of issuers to
repay punctually senior debt obligations. These obligations have an original
maturity not exceeding one year, unless explicitly noted.
Moody's employs the following three designations, all judged to be investment
grade, to indicate the relative repayment ability of rated issuers:
Prime-1 Issuers rated Prime-1 (or supporting institution) have a superior
ability for repayment of senior short-term debt obligations. Prime-1
repayment ability will often be evidenced by many of the following
characteristics:
. High rates of return on funds employed.
. Conservative capitalization structure with moderate reliance on
debt and ample asset protection.
. Broad leading market positions in well-established industries.
. margins in earnings coverage of fixed financial charges and
high internal cash generation.
A-2
<PAGE>
. Well-established access to a range of financial markets and
assured sources of alternate liquidity.
Prime-2 Issuers rated Prime-2 (or supporting institutions) have a strong
ability for repayment of senior short-term debt obligations. This
will normally be evidenced by many of the characteristics cited
above but to a lesser degree. Earnings trends and coverage ratios,
while sound, may be more subject to variation. Capitalization
characteristics, while still appropriate, may be more affected by
external conditions. Ample alternate liquidity is maintained.
Prime 3 Issuers rated Prime-3 (or supporting institutions) have an
acceptable ability for repayment of senior short-term obligation.
The effect of industry characteristics and market compositions may
be more pronounced. Variability in earnings and profitability may
result in changes in the level of debt protection measurements and
may require relatively high financial leverage. Adequate alternate
liquidity is maintained.
Not Prime Issuers rated Not Prime do not fall within any of the Prime rating
categories.
STANDARD & POOR'S RATINGS SERVICES
- --------------------------------------------------------------------------------
Preferred Stock Ratings
AAA This is the highest rating that may be assigned by Standard &
Poor's to a preferred stock issue and indicates an extremely
strong capacity to pay the preferred stock obligations.
AA A preferred stock issue rated AA also qualifies as a high-quality,
fixed-income security. The capacity to pay preferred stock
obligations is very strong, although not as overwhelming as for
issues rated AAA.
A An issue rated A is backed by a sound capacity to pay the
preferred stock obligations, although it is somewhat more
susceptible to the adverse effects of changes in circumstances and
economic conditions.
BBB An issue rated BBB is regarded as backed by an adequate capacity
to pay the preferred stock obligations. Whereas it normally
exhibits adequate protection parameters, adverse economic
conditions or changing circumstances are more likely to lead to a
weakened capacity to make payments for a preferred stock in this
category than for issues in the A category.
BB, B, Preferred stock rated BB, B, and CCC are regarded, on balance,
CCC as predominantly speculative with respect to the issuer's capacity
to pay preferred stock obligations. BB indicates the lowest degree
of speculation and CCC the highest. While such issues will likely
have some quality and protective characteristics, these are
outweighed by large uncertainties or major risk exposures to
adverse conditions.
CC The rating CC is reserved for a preferred stock issue that is in
arrears on dividends or sinking fund payments, but that is
currently paying.
C A preferred stock rated C is a nonpaying issue.
D A preferred stock rated D is a nonpaying issue with the issuer in
default on debt instruments.
N.R. This indicates that no rating has been requested, that there is
insufficient information on which to base a rating, or that
Standard & Poor's does not rate a particular type of obligation as
a matter of policy.
A-3
<PAGE>
Plus (+) or To provide more detailed indications of preferred stock
minus (-) quality, ratings from AA to CCC may be modified by the
addition of a plus or minus sign to show relative standing
within the major rating categories.
Long-Term Issue Credit Ratings
Issue credit ratings are based, in varying degrees, on the following
considerations:
Likelihood of payment-capacity and willingness of the obligor to meet its
financial commitment on an obligation in accordance with the terms of the
obligation;
Nature of and provisions of the obligation;
Protection afforded by, and relative position of, the obligation in the event
of bankruptcy, reorganization, or other arrangement under the laws of
bankruptcy and other laws affecting creditors' rights.
AAA An obligation rated AAA have the highest rating assigned by
Standard & Poor's. The obligor's capacity to meet its financial
commitment on the obligation is extremely strong.
AA An obligation rated AA differs from the highest-rated
obligations only in small degree. The obligor's capacity to meet
its financial commitment on the obligation is very strong.
A An obligation rated A is somewhat more susceptible to the
adverse effects of changes in circumstances and economic
conditions than obligations in higher- rated categories.
However, the obligor's capacity to meet its financial commitment
on the obligation is still strong.
BBB An obligation rated BBB exhibits adequate protection parameters.
However, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity of the obligator
to meet its financial commitment on the obligation.
Obligations rated BB, B, CCC , CC and C are regarded as having significant
speculative characteristics. BB indicates the least degree of speculation and
C the highest. While such obligations will likely have some quality and
protective characteristics, these may be outweighed by large uncertainties or
major risk exposures to adverse conditions.
BB An obligation rated BB is less vulnerable to nonpayment than
other speculative issues. However, it faces major ongoing
uncertainties or exposures to adverse business, financial, or
economic conditions which could lead to the obligor's inadequate
capacity to meet its financial commitment on the obligation.
B An obligation rated B is more vulnerable to nonpayment than
obligations rated BB, but the obligor currently has the capacity
to meet its financial commitment on the obligation. Adverse
business, financial, or economic conditions will likely impair
the obligor's capacity or willingness to meet its financial
commitment on the obligation.
CCC An obligation rated CCC is currently vulnerable to non-payment,
and is dependent upon favorable business, financial, and
economic conditions for the obligor to meet its financial
commitment on the obligation. In the event of adverse business,
financial, or economic conditions, the obligor is not likely to
have the capacity to meet its financial commitment on the
obligations.
CC An obligation rated CC is currently highly vulnerable to
nonpayment.
C The C rating may be used to cover a situation where a bankruptcy
petition has been filed or similar action has been taken, but
payments on this obligation are being continued.
A-4
<PAGE>
D An obligation rated D is in payment default. The D rating
category is used when payments on an obligation are not made on
the date due even if the applicable grace period has not
expired, unless Standard & Poor's believes that such payments
will be made during such grace period. The D rating also will be
used upon the filing of a bankruptcy petition or the taking of a
similar action if payments on an obligation are jeopardized.
Plus (+) or minus (-) The ratings from AA to CCC may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
r This symbol is attached to the ratings of instruments with significant
noncredit risks. It highlights risks to principal or volatility of expected
returns which are not addressed in the credit rating. Examples include:
obligation linked or indexed to equities, currencies, or commodities;
obligations exposed to severe prepayment risk-such as interest-only or
principal-only mortgage securities; and obligations with unusually risky
interest terms, such as inverse floaters.
Short-Term Issue Credit Ratings
Short-term ratings are generally assigned to those obligations considered
short-term in the relevant market. In the U.S., for example, that means
obligations with an original maturity of no more than 365 days - including
commercial paper. Short-term ratings are also used to indicate the
creditworthiness of an obligor with respect to put features on long-term
obligations. The result is a dual rating in which the short-term rating
addresses the put feature, in addition to the usual long-term rating. Medium-
term notes are assigned long-term ratings.
A-1 A short-term obligation rated A-1 is rated in the highest
category by Standard & Poor's. The obligor's capacity to meet
its financial commitment on the obligation is strong. Within
this category, certain obligations are designated with a plus
sign (+). This indicates that the obligor's capacity to meet its
financial commitment on these obligations is extremely strong.
A-2 A short-term obligation rated A-2 is somewhat more susceptible
to the adverse effects of changes in circumstances and economic
conditions than obligation in higher rating categories. However,
the obligor's capacity to meet its financial commitment on the
obligation is satisfactory.
A-3 A short-term obligation rated A-3 exhibits adequate protection
parameters. However, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity of
the obligor to meet its financial commitment on the obligation.
B A short-term obligation rated B is regarded as having
significant speculative characteristics. The obligor currently
has the capacity to meet its financial commitment on the
obligation; however, it faces major ongoing uncertainties which
could lead to the obligor's inadequate capacity to meet its
financial commitment on the obligation.
C A short-term obligation rated C is currently vulnerable to
nonpayment and is dependent upon favorable business, financial,
and economic conditions for the obligor to meet its financial
commitment on the obligation.
D A short-term obligation rated D is in payment default. The D
rating category is used when payments on an obligation are not
made on the date due even if the applicable grace period has not
expired, unless Standard & Poors' believes that such payments
will be made during such grace period. The D rating also will be
used upon the filing of a bankruptcy petition or the taking of a
similar action if payments on an obligation are jeopardized.
A-5
<PAGE>
DUFF & PHELPS CREDIT RATING CO.
- --------------------------------------------------------------------------------
Long-Term Debt and Preferred Stock
AAA Highest credit quality. The risk factors are negligible, being
only slightly more than for risk-free U.S. Treasury debt.
AA+/AA High credit quality. Protection factors are strong. Risk is
modest but may vary slightly from time to time because of
economic conditions.
A+/A/A- Protection factors are average but adequate. However, risk
factors are more variable in periods of greater economic
stress.
BBB+/BBB Below-average protection factors but still considered
sufficient for prudent investment. Considerable variability in
risk during economic cycles.
BBB-
BB+/BB/B Below investment grade but deemed likely to meet obligations
B- when due. Present or prospective financial protection factors
fluctuate according to industry conditions. Overall quality may
move up or down frequently within this category.
B+/B/B- Below investment grade and possessing risk that obligation will
not be net when due. Financial protection factors will
fluctuate widely according to economic cycles, industry
conditions and/or company fortunes. Potential exists for
frequent changes in the rating within this category or into a
higher or lower rating grade.
CCC Well below investment-grade securities. Considerable
uncertainty exists as to timely payment of principal, interest
or preferred dividends. Protection factors are narrow and risk
can be substantial with unfavorable economic/industry
conditions, and/or with unfavorable company developments.
DD Defaulted debt obligations. Issuer failed to meet scheduled
principal and/or interest payments. Issuer failed to meet
scheduled principal and/or interest payments.
DP Preferred stock with dividend arrearages.
Short-Term Debt
High Grade
D-1+ Highest certainty of timely payment. Short-term liquidity,
including internal operating factors and/or access to
alternative sources of funds, is outstanding, and safety is
just below risk-free U.S. Treasury short-term obligations.
D-1 Very high certainty of timely payment. Liquidity factors are
excellent and supported by good fundamental protection factors.
Risk factors are minor.
D-1- High certainty of timely payment. Liquidity factors are strong
and supported by good fundamental protection factors. Risk
factors are very small.
Good Grade
D-2 Good certainty of timely payment. Liquidity factors and company
fundamentals are sound. Although ongoing funding needs may
enlarge total financing requirements, access to capital markets
is good. Risk factors are small.
A-6
<PAGE>
Satisfactory Grade
D-3 Satisfactory liquidity and other protection factors qualify
issues as to investment grade. Risk factors are larger and
subject to more variation. Nevertheless, timely payment is
expected.
Non-Investment Grade
D-4 Speculative investment characteristics. Liquidity is not
sufficient to insure against disruption in debt service.
Operating factors and market access may be subject to a high
degree of variation.
Default
D-5 Issuer failed to meet scheduled principal and/or interest
payments.
FITCH IBCA RATINGS
- --------------------------------------------------------------------------------
International Long-Term Credit Ratings
Investment Grade
AAA Highest credit quality. `AAA' ratings denote the lowest
expectation of credit risk. They are assigned only in case of
exceptionally strong capacity for timely payment for financial
commitments. This capacity is highly unlikely to be adversely
affected by foreseeable events.
AA Very high credit quality. `AA' ratings denote a very low
expectation of credit risk. They indicate very strong capacity
for timely payment of financial commitments. This capacity is
not significantly vulnerable to foreseeable events.
A High credit quality. `A' ratings denote a low expectation of
credit risk. The capacity for timely payment of financial
commitments is considered strong. This capacity may,
nevertheless, be more vulnerable to changes in circumstances or
in economic conditions than is the case for higher ratings.
B Good credit quality. `BBB' ratings indicate that there is
currently a low expectation of credit risk. The capacity for
timely payment of financial commitments is considered adequate,
but adverse changes in circumstances and in economic conditions
are more likely to impair this capacity. This is the lowest
investment-grade category.
Speculative Grade
BB Speculative. `BB' ratings indicate that there is a possibility
of credit risk developing, particularly as the result of adverse
economic change over time; however, business or financial
alternatives may be available to allow financial commitments to
be met. Securities rated in this category are not investment
grade.
B Highly speculative. `B' ratings indicate that significant credit
risk is present, but a limited margin of safety remains.
Financial commitments are currently being met; however, capacity
for continued payment is contingent upon a sustained, favorable
business and economic environment.
CCC,CC,C High default risk. Default is a real possibility. Capacity for
meeting financial commitments is solely reliant upon sustained,
favorable business or economic developments. A `CC' rating
indicates that default of some kind appears probable. `C'
ratings signal imminent default.
A-7
<PAGE>
DDD,DD,D Default. Securities are not meeting current obligations and are
extremely speculative. `DDD' designates the highest potential
for recovery of amounts outstanding on any securities involved.
For U.S. corporates, for example, `DD' indicates expected
recovery of 50% - 90% of such outstandings, and `D' the lowest
recovery potential, i.e. below 50%.
International Short-Term Credit Ratings
F1 Highest credit quality. Indicates the strongest capacity for
timely payment of financial commitments; may have an added "+"
to denote any exceptionally strong credit feature.
F2 Good credit quality. A satisfactory capacity for timely payment
of financial commitments, but the margin of safety is not as
great as in the case of the higher ratings.
F3 Fair credit quality. The capacity for timely payment of
financial commitments is adequate; however, near-term adverse
changes could result in a reduction to non-investment grade.
B Speculative. Minimal capacity for timely payment of financial
commitments, plus vulnerability to near-term adverse changes in
financial and economic conditions.
C High default risk. Default is a real possibility. Capacity for
meeting financial commitments is solely reliant upon a
sustained, favorable business and economic environment.
D Default. Denotes actual or imminent payment default.
Notes
"+" or "-" may be appended to a rating to denote relative status within major
rating categories. Such suffixes are not added to the `AAA' long-term rating
category, to categories below `CCC', or to short-term ratings other than `F1'.
`NR' indicates that Fitch IBCA does not rate the issuer or issue in question.
`Withdrawn': A rating is withdrawn when Fitch IBCA deems the amount of
information available to be inadequate for rating purposes, or when an
obligation matures, is called, or refinanced.
RatingAlert: Ratings are placed on RatingAlert to notify investors that there
is a reasonable probability of a rating change and the likely direction of
such change. These are designated as "Positive", indicating a potential
upgrade, "Negative", for a potential downgrade, or "Evolving", if ratings may
be raised, lowered or maintained. RatingAlert is typically resolved over a
relatively short period.
A-8
<PAGE>
Appendix B - Comparisons
CDA Mutual Fund Report, published by CDA Investment Technologies, Inc. --
analyzes price, current yield, risk, total return and average rate of return
(average annual compounded growth rate) over specified time periods for the
mutual fund industry.
Consumer Price Index (or Cost of Living Index), published by the U.S. Bureau
of Labor Statistics -- a statistical measure of change, over time in the price
of goods and services in major expenditure groups.
Donoghue's Money Fund Average -- is an average of all major money market fund
yields, published weekly for 7 and 30-day yields.
Dow Jones Industrial Average a price-weighted average of thirty blue-chip
stocks that are generally the leaders in their industry and are listed on the
New York Stock Exchange. It has been a widely followed indicator of the stock
market since October 1, 1928.
Dow Jones Industrial Average -- an unmanaged price weighted average of 30
blue-chip stocks.
Financial publications: Business Week, Changing Times, Financial World,
Forbes, Fortune, Money, Barron's, Consumer's Digest, Financial Times, Global
Investor, Investor's Daily, Lipper Analytical Services, Inc., Morningstar,
Inc., New York Times, Personal Investor, Wall Street Journal and Weisenberger
Investment Companies Service -- publications that rate fund performance over
specified time periods.
Historical data supplied by the research departments of First Boston
Corporation, J.P. Morgan & Co, Inc., Salomon Smith Barney, Merrill Lynch &
Co., Inc., Lehman Brothers, Inc. and Bloomberg L.P.
IBC's Money Fund Average/All Taxable an average of all major money market
fund yields, published weekly for 7- and 30-day yields.
IFC Investable Index an unmanaged index maintained by the International
Finance Corporation. This index consists of 890 companies in 25 emerging
equity markets, and is designed to measure more precisely the returns
portfolio managers might receive from investment in emerging markets equity
securities by focusing on companies and markets that are legally and
practically accessible to foreign investors.
Lehman Aggregate Bond Index an unmanaged fixed income market value-weighted
index that combines the Lehman Government/Corporate Index and the Lehman
Mortgage-Backed Securities Index, and includes treasury issues, agency issues,
corporate bond issues and mortgage backed securities. It includes fixed rate
issuers of investment grade (BBB) or higher, with maturities of at least one
year and outstanding par values of at least $200 million for U.S. government
issues and $25 million for others.
Lehman Corporate Bond Index - an unmanaged indices of all publicly issues,
fixed-rate, nonconvertible investment grade domestic corporate debt. Also
included are yankee bonds, which are dollar-denominated SEC registered public,
noncovertible debt issued or guaranteed by foreign sovereign governments,
municipalities, or governmental agencies, or international agencies.
Lehman Government Bond Index -an unmanaged treasury bond index including all
public obligations of the U.S. Treasury, excluding flower bonds and foreign-
targeted issues, and the Agency Bond Index (all publicly issued debt of U.S.
government agencies and quasi-federal corporation, and corporate debt
guaranteed by the U.S. government). In addition to the aggregate index, sub-
indices cover intermediate and long term issues.
Lehman Government/Corporate Index -- an unmanaged fixed income market value-
weighted index that combines the Government and Corporate Bond Indices,
including U.S. government treasury securities, corporate and yankee bonds.
All issues are investment grade (BB) or higher, with maturities of at least
one year and outstanding par value of at least $100 million of r U.S.
government issues and $25 million for others. Any security downgraded during
the month is held in the index
B-1
<PAGE>
until month end and then removed. All returns are market value weighted
inclusive of accrued income.
Lehman High Yield Bond Index - an unmanaged index of fixed rate, non-
investment grade debt. All bonds included in the index are dollar denominated,
noncovertible, have at least one year remaining to maturity and an outstanding
par value of at least $100 million.
Lehman Intermediate Government/Corporate Index - an unmanaged fixed income
market value-weighted index that combines the Lehman Government Bond Index
(intermediate-term sub-index) and Lehman Corporate Bond Index.
Lipper 1-5 Year Short Investment Grade Debt Funds Average -- is an average of
100 funds that invest at least 65% of assets in investment grade debt issues
(BBB or higher) with dollar-weighted average maturities of 5 years or less.
Lipper Balanced Fund Index - an unmanaged index of open-end equity funds whose
primary objective is to conserve principal by maintaining at all time a
balanced portfolio of both stocks and bonds. Typically, the stock/bond ratio
ranges around 60%/40%.
Lipper Equity Income Fund Index - an unmanaged index of equity funds which
seek relatively high current income and growth of income through investing 60%
or more of the portfolio in equities.
Lipper Equity Mid Cap Fund Index - an unmanaged index of funds which by
prospectus or portfolio practice invest primarily in companies with market
capitalizations less than $5 billion at the time of purchase.
Lipper Equity Small Cap Fund Index - an unmanaged index of funds by prospectus
or portfolio practice invest primarily in companies with market
capitalizations less than $1 billion at the time of purchase.
Lipper Growth Fund Index - an unmanaged index composed of the 30 largest funds
by asset size in this investment objective.
Lipper Mutual Fund Performance Analysis and Lipper - Fixed Income Fund
Performance Analysis -- measures total return and average current yield for
the mutual fund industry. Rank individual mutual fund performance over
specified time periods, assuming reinvestments of all distributions, exclusive
of any applicable sales charges.
Merrill Lynch 1-4.99 Year Corporate/Government Bond Index -- is an unmanaged
index composed of U.S. treasuries, agencies and corporates with maturities
from 1 to 4.99 years. Corporates are investment grade only (BBB or higher).
Morgan Stanley Capital International EAFE Index -- 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.
Mutual Fund Source Book, published by Morningstar, Inc. analyzes price,
yield, risk and total return for equity funds.
NASDAQ Composite Index -- is a market capitalization, price only, unmanaged
index that tracks the performance of domestic common stocks traded on the
regular NASDAQ market as well as national market System traded foreign common
stocks and ADRs..
New York Stock Exchange composite or component indices -- unmanaged indices of
all industrial, utilities, transportation and finance stocks listed on the New
York Stock Exchange.
Russell 1000 Index - an unmanaged index composed of the 1000 largest stocks in
the Russell 3000 Index.
Russell 2000 Growth Index contains those Russell 2000 securities with higher
price-to-book ratios and higher forecasted growth values.
Russell 2000 Index -- an unmanaged index composed of the 2,000 smallest stocks
in the Russell 3000 Index.
B-2
<PAGE>
Russell 2000 Value Index - contains those Russell 2000 securities with a less-
than-average growth orientation. Securities in this index tend to exhibit
lower price-to-book and price-earnings ratios, higher dividend yields and
lower forecasted growth values than the growth universe.
Russell 2500 Growth Index - contains those Russell 2500 securities with a
greater-than-average growth orientation. Securities in this index tend to
exhibit higher price-to-book and price-earnings ratios, lower dividend yields
and higher forecasted growth values than the value universe.
Russell 2500 Index - an unmanaged index composed of the 2,5000 smallest stocks
in the Russell 3000.
Russell 2500 Value Index - contains those Russell 2500 securities with a less-
than-average growth orientation. Securities in this index tend to exhibit
lower price-to-book and price-earnings ratios, higher dividend yields and
lower forecasted growth values then the Growth universe.
Russell 3000 Index - composed of the 3,000 largest U.S. publically traded
companies based on total market capitalization, which represents approximately
98% of the investable U.S. equity market.
Russell Mid-Cap Index -- is composed of the 800 smallest stocks in the Russell
1000 Index, with an average capitalization of $1.96 billion.
Salomon Smith Barney Global excluding U.S. Equity Index - an comprised of the
smallest stocks (less than $1 billion market capitalization) of the Extended
Market Index, of both developed and emerging markets.
Salomon Smith Barney One to Three Year Treasury Index - an unmanaged index
comprised of U.S. treasury notes and bonds with maturities one year or
greater, but less than three years.
Salomon Smith Barney Three-Month T-Bill Average - the average for all treasury
bills for the previous three-month period.
Salomon Smith Barney Three-Month U.S. Treasury Bill Index - a return
equivalent yield average based on the last three 3-month Treasury bill issues.
Savings and Loan Historical Interest Rates - as published by the U.S. Savings
and Loan League Fact Book.
Standard & Poors' 600 Small Cap Index - an unmanaged index comprised of 600
domestic stocks chosen for market size, liquidity, and industry group
representation. The index is comprised of stocks from the industrial, utility,
financial, and transportation sectors.
Standard & Poors' Midcap 400 Index - consists of 400 domestic stocks chosen
for market size (medium market capitalization of approximately $700 million),
liquidity, and industry group representation. It is a market-value weighted
index with each stock affecting the index in proportion to its market value.
Standard & Poors' 500 Stock Index - an unmanaged index composed of 400
industrial stocks, 40 financial stocks, 40 utilities stocks and 20
transportation stocks.
Standard & Poors' Barra Value Index - is constructed by dividing the
securities in the S&P 500 Index according to price-to-book ratio. This index
contains the securities with the lower price-to-book ratios; the securities
with the higher price-to-book ratios are contained in the Standard & Poor's
Barra Growth Index.
Standard & Poors' Utilities Stock Price Index - a market capitalization
weighted index representing three utility groups and, with the three groups,
43 of the largest utility companies listed on the New York Stock Exchange,
including 23 electric power companies, 12 natural gas distributors and 8
telephone companies.
Stocks, Bonds, Bills and Inflation, published by Ibbotson Associates --
historical measure of yield, price and total return for common and small
company stock, long-term government bonds, U.S. treasury bills and inflation.
U.S. Three-Month Treasury Bill Average - the average return for all treasury
bills for the previous three month period.
B-3
<PAGE>
Value Line -- composed of over 1,600 stocks in the Value Line Investment
Survey.
Wilshire Real Estate Securities Index - a market capitalization weighted index
of publicly traded real estate securities, including real estate investment
trusts, real estate operating companies and partnerships. The index is used by
he institutional investment community as a broad measure of the performance of
public real estate equity for asset allocation and performance comparison.
Wilshire REIT Index - includes 112 real estate investment trusts (REITs) but
excludes seven real estate operating companies that are included in the
Wilshire Real Estate Securities Index..
Note: With respect to the comparative measures of performance for equity
securities described herein, comparisons of performance assume reinvestment of
dividends, except as otherwise stated.
B-4
<PAGE>
PART C
UAM FUNDS TRUST
OTHER INFORMATION
ITEM 23. EXHIBITS
Exhibits previously filed by the Fund are incorporated by reference to such
filings. The following table describes the location of all exhibits. In the
table, the following references are used: PEA 29 = Post-Effective Amendment No.
2 filed on April 22, 1999, PEA 27 = Post-Effective Amendment No. 27 filed on
February 5, 1999, PEA 24 = Post Effective Amendment No. 24 filed on July 10,
1998; PEA 19 = Post-Effective Amendment No. 19 filed on February 3, 1998; PEA17
= Post-Effective Amendment No. 17 filed on December 15, 1997, PEA16 =
Post-Effective Amendment No. 16 filed on July 10, 1997.
<TABLE>
<CAPTION>
Incorporated by
Reference to
Exhibit (Location):
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
A.1. Agreement and Declaration of Trust PEA 24
- ----------------------------------------------------------------------------------------------------------------------------
2. Certificate of Trust PEA 24
- ----------------------------------------------------------------------------------------------------------------------------
3. Certificate of Amendment to Certificate of Trust PEA 24
- ----------------------------------------------------------------------------------------------------------------------------
B.1. By-Laws PEA 24
- ----------------------------------------------------------------------------------------------------------------------------
2. Amendment to By-Laws dated December 10, 1998 PEA 27
- ----------------------------------------------------------------------------------------------------------------------------
C.1. Form of Specimen Share Certificate PEA 24
- ----------------------------------------------------------------------------------------------------------------------------
2. The rights of security holders are defined in the Registrant's Agreement and Declaration of PEA 24
of Trust and By-Laws
- ----------------------------------------------------------------------------------------------------------------------------
D.1. Investment Advisory Agreement between Registrant and Barrow, Hanley, Mewhinney & Strauss PEA 27
- ----------------------------------------------------------------------------------------------------------------------------
2. Investment Advisory Agreement between Registrant and Cambiar Investors, Inc. PEA 27
- ----------------------------------------------------------------------------------------------------------------------------
3. Investment Advisory Agreement between Registrant and Chicago Asset Management Company PEA 27
(Intermediate Bond Portfolio)
- ----------------------------------------------------------------------------------------------------------------------------
4. Investment Advisory Agreement between Registrant and Chicago Asset Management Company PEA 27
(Value/Contrarian Portfolio)
- ----------------------------------------------------------------------------------------------------------------------------
5. Investment Advisory Agreement between Registrant and Dwight Asset Management Company PEA 27
- ----------------------------------------------------------------------------------------------------------------------------
6. Investment Advisory Agreement between Registrant and First Pacific Advisors, Inc. PEA 27
- ----------------------------------------------------------------------------------------------------------------------------
7. Investment Advisory Agreement between Registrant and Hanson Investment Management Company PEA 27
- ----------------------------------------------------------------------------------------------------------------------------
8. Investment Advisory Agreement between Registrant and Heitman/PRA Securities Advisors, Inc. PEA 27
- ----------------------------------------------------------------------------------------------------------------------------
9. Investment Advisory Agreement between Registrant and Jacobs Asset Management, L.P. PEA 27
- ----------------------------------------------------------------------------------------------------------------------------
10. Investment Advisory Agreement between Registrant and Murray Johnstone International Limited PEA 27
- ----------------------------------------------------------------------------------------------------------------------------
11. Investment Advisory Agreement between Registrant and Pacific Financial Research, Inc. PEA 27
- ----------------------------------------------------------------------------------------------------------------------------
12. Investment Advisory Agreement between Registrant and Pell Rudman Trust Company, N.A. PEA 27
- ----------------------------------------------------------------------------------------------------------------------------
13. Investment Advisory Agreement between Registrant and Tom Johnson Investment Management PEA 27
- ----------------------------------------------------------------------------------------------------------------------------
E. 1. Distribution Agreement between Registrant and UAM Fund Distributors PEA 24
- ----------------------------------------------------------------------------------------------------------------------------
2. Distribution Agreement between Registrant and UAM Fund Distributors, Inc. dated as of PEA 29
March 31, 1999 (Advisor Class Shares)
- ----------------------------------------------------------------------------------------------------------------------------
3. Distribution Agreement between Registrant and ACG Capital Corporation (Advisor Class Shares) PEA 19
- ----------------------------------------------------------------------------------------------------------------------------
4. Amendment to Distribution Agreement between Registrant and ACG Capital Corporation dated as PEA 29
of March 31, 1999
- ----------------------------------------------------------------------------------------------------------------------------
5. Selling Dealer Agreement PEA 24
- ----------------------------------------------------------------------------------------------------------------------------
F. Trustees' and Officers' Contracts and Programs Not applicable
- ----------------------------------------------------------------------------------------------------------------------------
G. 1. Global Custody Agreement PEA 16
- ----------------------------------------------------------------------------------------------------------------------------
H. 1. Fund Administration Agreement PEA 27
- ----------------------------------------------------------------------------------------------------------------------------
Fund Administration Agreement Fee Schedule Filed herewith
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
2. Mutual Funds Service Agreement PEA 16
- ----------------------------------------------------------------------------------------------------------------------------
I. Opinions and Consents of Counsel Filed herewith
- ----------------------------------------------------------------------------------------------------------------------------
J. Consent of Independent Auditors Filed herewith
- ----------------------------------------------------------------------------------------------------------------------------
K. Other Financial Statements Not applicable
- ----------------------------------------------------------------------------------------------------------------------------
L. Purchase Agreement PEA 24
- ----------------------------------------------------------------------------------------------------------------------------
M. 1. Distribution Plan PEA 24
- ----------------------------------------------------------------------------------------------------------------------------
2. Shareholder Services Plan PEA 24
- ----------------------------------------------------------------------------------------------------------------------------
3. Service Agreement PEA 24
- ----------------------------------------------------------------------------------------------------------------------------
N. Financial Data Schedule Filed herewith
- ----------------------------------------------------------------------------------------------------------------------------
O. Amended and Restated Rule 18f-3 Multiple Class Plan PEA 24
- ----------------------------------------------------------------------------------------------------------------------------
P. Powers of Attorney PEA 24, PEA 27
</TABLE>
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND
Not applicable.
ITEM 25. INDEMNIFICATION
Reference is made to Article VI of Registrant's Declaration of Trust, which is
incorporated herein by reference. Registrant hereby also makes the undertaking
consistent with Rule 484 under the Securities Act of 1933, as amended. Insofar
as indemnification for liability arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a trustee, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
Provisions for indemnification of UAM Fund Services, Inc. are contained in
Section 6 of its Fund Administration Agreement with the Registrant.
Provisions for indemnification of the Registrant's investment advisers are
contained in Section 7 of their respective Investment Advisory Agreements with
the Registrant.
Provisions for indemnification of Registrant's principal underwriter, UAM Fund
Distributors, Inc., are contained in its Distribution Agreement with the
Registrant.
Provisions for indemnification of Registrant's custodian, The Chase Manhattan
Bank, are contained in Section 12 of its Fund Global Custody Agreement with the
Registrant.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Reference is made to the caption "Investment Adviser" in the Prospectuses
constituting Part A of this Registration Statement and "Investment Adviser" in
Part B of this Registration Statement. Except for information with respect to
Pell Rudman Trust Company, N.A., the information required by this Item 26 with
respect to each director, officer, or partner of each other investment adviser
of the Registrant is incorporated by reference to the Forms ADV filed by the
investment advisers listed below with the Securities and Exchange Commission
pursuant to the Investment Advisers Act of 1940, as amended, under the file
numbers indicated:
<TABLE>
<CAPTION>
Investment Adviser File No.
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Barrow, Hanley, Mewhinney & Strauss, Inc. 801-31237
- ---------------------------------------------------------------------------------------------------------------------------------
Cambiar Investors, Inc. 801-09538
- ---------------------------------------------------------------------------------------------------------------------------------
Chicago Asset Management Company 801-20197
- ---------------------------------------------------------------------------------------------------------------------------------
Dwight Asset Management Company 801-45304
- ---------------------------------------------------------------------------------------------------------------------------------
First Pacific Advisors, Inc. 801-39512
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Hanson Investment Management Company 801-14817
- ---------------------------------------------------------------------------------------------------------------------------------
Heitman/PRA Securities Advisors, Inc. 801-48252
- ---------------------------------------------------------------------------------------------------------------------------------
Jacobs Asset Management, L.P. 801-49790
- ---------------------------------------------------------------------------------------------------------------------------------
Murray Johnstone International Ltd. 801-34926
- ---------------------------------------------------------------------------------------------------------------------------------
Pacific Financial Research, Inc. 801-54352
- ---------------------------------------------------------------------------------------------------------------------------------
Tom Johnson Investment Management, Inc. 801-42549
<CAPTION>
Positions and Offices with Pell Rudman Positions and Offices with
Name and Principal Business Address Trust Company, N.A. Pell Rudman & Co., Inc.
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Jeffrey S. Thomas Director Chief Financial Officer of
100 Federal Street Pell, Rudman & Co., Inc.
Boston, Massachusetts
- ---------------------------------------------------------------------------------------------------------------------------------
Edward I. Rudman Director Chairman and President of
100 Federal Street Pell, Rudman & Co., Inc.
Boston, Massachusetts
- ---------------------------------------------------------------------------------------------------------------------------------
James S. McDonald Director Executive Vice President of
100 Federal Street Pell, Rudman & Co., Inc.
Boston, Massachusetts
- ---------------------------------------------------------------------------------------------------------------------------------
Susan W. Hunnewell Director Senior Vice President of Pell,
100 Federal Street Rudman & Co., Inc.
Boston, Massachusetts
</TABLE>
Barrow, Hanley, Mewhinney & Strauss, Inc., Cambiar Investors, Inc., Chicago
Asset Management Company, Dwight Asset Management Company, First Pacific
Advisors, Inc., Hanson Investment Management Company, Heitman/PRA Securities
Advisors, Inc., Jacobs Asset Management, L.P., Murray Johnstone International
Ltd., Pacific Financial Research, Inc., Pell Rudman Trust Company, N.A., and Tom
Johnson Investment Management, Inc., are affiliates of United Asset Management
Corporation ("UAM"), a Delaware corporation owning firms engaged primarily in
institutional investment management.
ITEM 27. PRINCIPAL UNDERWRITERS
(a) UAM Fund Distributors, Inc. ("UAMFDI") acts as distributor of the
registrant's shares. ACG Capital Corporation ("ACG") also acts as
distributor of the Heitman Real Estate Portfolio Advisor Class Shares.
(b) The information required with respect to each director and officer of
UAMFDI is incorporated by reference to Schedule A of Form BD filed pursuant
to the Securities and Exchange Act of 1934 (SEC File No. 8-41126).
(c) The information required with respect to each Director and officer of ACG
is incorporated by reference to Schedule A of Form BD filed pursuant to the
Securities and Exchange Act of 1934 (SEC File No. 8-47813).
(d) Not applicable.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS
Books or other documents required to be maintained by Section 31(a) of the
Investment Company Act of 1940, and the Rules promulgated thereunder, are
maintained as follows:
<TABLE>
<CAPTION>
Name and Address of Service Provider Relationship with Registrant
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C>
The Chase Manhattan Bank Custodian bank
4 Chase MetroTech Center
Brooklyn, New York, 11245
- ---------------------------------------------------------------------------------------------------------------------------------
Chase Global Funds Services Company Sub-administrator
73 Tremont Street
Boston, Massachusetts 02108
- ---------------------------------------------------------------------------------------------------------------------------------
UAM Fund Services, Inc. Administrator
211 Congress Street, 4th Floor
Boston, Massachusetts 02110
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Service Provider Relationship with Registrant
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C>
UAM Shareholder Services Center, Inc. Sub-shareholder servicing agent
825 Duportail Road
Wayne, PA 19087
- ---------------------------------------------------------------------------------------------------------------------------------
DST Systems, Inc. Sub-transfer agent
210 West 10th Street
Kansas City, Missouri 64105
</TABLE>
The registrant's investment advisers will also maintain physical possession of
certain of the books, accounts and other documents required by Section 31(a)
under the Investment Company Act of 1940, as amended, and the rules promulgated
thereunder.
ITEM 29. MANAGEMENT SERVICES
Not Applicable.
ITEM 30. UNDERTAKINGS
Not Applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act and the Investment Company
Act, the Fund certifies that it meets all of the requirement for effectiveness
of this registration statement under Rule 485(b) under the Securities Act and
has duly caused this registration statement to be signed on its behalf by the
undersigned, duly authorized, in the City of Boston, and State of Massachusetts
on this 22nd day of April 1999.
UAM FUNDS TRUST
/s/ Michael E. DeFao
----------------------------
Michael E. DeFao
Secretary
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the 22nd day of April, 1999:
*
- ----------------------------------
Norton H. Reamer, Chairman and
President
*
- ----------------------------------
John T. Bennett, Jr., Trustee
*
- ----------------------------------
Nancy J. Dunn, Trustee
*
- ----------------------------------
Philip D. English, Trustee
*
- ----------------------------------
William A. Humenuk, Trustee
*
- ----------------------------------
Peter M. Whitman, Jr., Trustee
*
- ----------------------------------
James P. Pappas, Trustee
/s/ Gary L. French, Treasurer
- ----------------------------------
Gary L. French, Treasurer
/s/ Michael E. DeFao
- ----------------------------------
* Michael E. DeFao
(Attorney-in-Fact)
<PAGE>
UAM FUNDS TRUST
EXHIBIT INDEX
Exhibit Description
- -------------------------------------------------------------------------------
H1 Fund Administration Agreement Fee Schedule
I. Opinions and Consents of Counsel
J Consent of Independent Auditors
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 011
<NAME> HEITMAN REAL ESTATE FUND, INSTITUTIONAL CLASS
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 122,870,595
<INVESTMENTS-AT-VALUE> 126,956,761
<RECEIVABLES> 1,456,847
<ASSETS-OTHER> 2,772
<OTHER-ITEMS-ASSETS> 984
<TOTAL-ASSETS> 128,417,364
<PAYABLE-FOR-SECURITIES> 1,167,962
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 866,580
<TOTAL-LIABILITIES> 2,034,542
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 124,599,033
<SHARES-COMMON-STOCK> 9,245,571
<SHARES-COMMON-PRIOR> 12,843,243
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (2,302,377)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 4,086,166
<NET-ASSETS> 126,382,822
<DIVIDEND-INCOME> 6,655,957
<INTEREST-INCOME> 649,714
<OTHER-INCOME> 0
<EXPENSES-NET> (2,391,656)
<NET-INVESTMENT-INCOME> 4,914,015
<REALIZED-GAINS-CURRENT> (1,119,614)
<APPREC-INCREASE-CURRENT> (32,818,271)
<NET-CHANGE-FROM-OPS> (29,023,870)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (2,991,800)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,780,776
<NUMBER-OF-SHARES-REDEEMED> (6,508,467)
<SHARES-REINVESTED> 130,019
<NET-CHANGE-IN-ASSETS> (93,585,016)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (190,679)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,185,717
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,391,656
<AVERAGE-NET-ASSETS> 167,021,540
<PER-SHARE-NAV-BEGIN> 10.49
<PER-SHARE-NII> 0.32
<PER-SHARE-GAIN-APPREC> (1.88)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (0.31)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.62
<EXPENSE-RATIO> 1.22
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 012
<NAME> HEITMAN REAL ESTATE FUND, ADVISOR CLASS
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 122,870,595
<INVESTMENTS-AT-VALUE> 126,956,761
<RECEIVABLES> 1,456,847
<ASSETS-OTHER> 2,772
<OTHER-ITEMS-ASSETS> 984
<TOTAL-ASSETS> 128,417,364
<PAYABLE-FOR-SECURITIES> 1,167,962
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 866,580
<TOTAL-LIABILITIES> 2,034,542
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 124,599,033
<SHARES-COMMON-STOCK> 5,412,355
<SHARES-COMMON-PRIOR> 8,114,536
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (2,302,377)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 4,086,166
<NET-ASSETS> 126,382,822
<DIVIDEND-INCOME> 6,655,957
<INTEREST-INCOME> 649,714
<OTHER-INCOME> 0
<EXPENSES-NET> (2,391,656)
<NET-INVESTMENT-INCOME> 4,914,015
<REALIZED-GAINS-CURRENT> (1,119,614)
<APPREC-INCREASE-CURRENT> (32,818,271)
<NET-CHANGE-FROM-OPS> (29,023,870)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1,920,451)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,747,978
<NUMBER-OF-SHARES-REDEEMED> (4,639,720)
<SHARES-REINVESTED> 189,561
<NET-CHANGE-IN-ASSETS> (93,585,016)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (190,679)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,185,717
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,391,656
<AVERAGE-NET-ASSETS> 167,021,540
<PER-SHARE-NAV-BEGIN> 10.50
<PER-SHARE-NII> 0.25
<PER-SHARE-GAIN-APPREC> (1.86)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (0.27)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.62
<EXPENSE-RATIO> 1.73
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<PAGE>
Exhibit H1
Amendment To Fund Administration Agreement Dated October 26, 1998
WITNESSETH
WHEREAS, UAM Funds Trust (the "Fund") and UAM Fund Services, Inc. ("UAMFSI")
desire to amend the Fund Administration Agreement (the "Agreement") dated
October 26, 1998, by replacing the existing Attachment C with a revised
Attachment C.
NOW THEREFORE, the above parties agree to amend the Agreement by replacing the
existing Attachment C with a revised Attachment C as follows:
Attachment C
Fee Schedule to the Fund Administration Agreement
For its services, the Fund pays a five-part fee to the Administrator as follows:
1. An annual base fee calculated at the annual rate of:
A. $14,500 for the first operational class of each portfolio; plus
B. $ 3,000 for each additional operational class of each portfolio
2. A portfolio specific fee calculated from the aggregate net assets of the
portfolios at an annual rate that ranges from 0.02% to 0.06%, according to
the attached Exhibit 1.
3. An annual base fee that the Administrator pays to Chase Global Funds
Services Company pursuant to a Mutual Funds Service Agreement calculated at
the annual rate of:
A. $52,500 for the first operational class of each portfolio; plus
B. $7,500 for each additional operational class of each portfolio; plus
C. 0.039% of their pro rata share of the combined assets of the Fund.
Note, until October 31, 1999, and for certain Portfolios of the Fund, the
Administrator pays the sub-administrator a different fee, which is
calculated the annual rate of (1) $39,500 for the first operational Class
of a Portfolio; plus (2) $7,500 for each additional operational Class of a
Portfolio; plus (3) 0.039% of the total net assets of the Funds.
Thereafter, UAMFSI shall pay Chase monthly fees for its services for each
portfolio at the annual rate set forth above.
3. An annual base fee according to Exhibit B that the Administrator pays to
DST Systems, Inc., the Fund's sub-transfer agent, pursuant to an Agency
Agreement.
4. An annual base fee that the Administrator pays to UAM Shareholder Services
Center, Inc. pursuant to a Sub-Shareholder Servicing Agreement at the
annual rate of:
<PAGE>
A. $7,500 for the first operational class of each portfolio; plus
B. $2,500 for each additional class of each portfolio; plus
C. $30 per account.
These fees do not include out-of-pocket expenses, which under this Agreement
will be billed separately.
All other provisions of the Agreements shall remain unchanged and in full force
and effect.
IN WITNESS WHEREOF, the parties above have caused this amendment to be executed
by their duly authorized officer and shall be effective as of the 15th day of
April, 1999.
UAM FUNDS TRUST UAM FUND SERVICES, INC.
By: /s/ Gary L. French By: /s/ Michael E. DeFao
------------------ --------------------
Gary L. French Michael E. DeFao
Treasurer Vice President and General Counsel
<PAGE>
Exhibit I
DRINKER BIDDLE & REATH LLP
1345 Chestnut Street
Philadelphia, PA 19107-3496
(215) 988-2700
April 16, 1999
UAM Funds Trust
211 Congress Street
Fourth Floor
Boston, MA 02110
Re: UAM Funds Trust - Shares of Beneficial Interest
-----------------------------------------------
Ladies and Gentlemen:
We have acted as counsel for UAM Funds Trust, a Delaware
business trust, ("UAM") in connection with the registration by UAM of shares of
beneficial interest without par value of its Heitman Real Estate Portfolio (the
"Portfolio"). The Agreement and Declaration of Trust of UAM authorizes the
issuance of an unlimited number of shares of beneficial interest, which are
divided into multiple series and classes (each a "Class" and collectively
"Classes"). The shares of beneficial interest designated into each such series
are referred to herein as the "Shares." You have asked for our opinion on
certain matters relating to the Shares of the Portfolio.
We have reviewed UAM's Agreement and Declaration of Trust and
By-laws, resolutions of UAM's Board of Trustees ("Board"), certificates of
public officials and of UAM's officers and such other legal and factual matters
as we have deemed appropriate. We have also reviewed UAM's Registration
Statement on Form N-1A under the Securities Act of 1933 (the "Registration
Statement"), as amended through Post-Effective Amendment No.
30 thereto.
This opinion is based exclusively on the Delaware Business
Trust Act and the federal law of the United States of America.
We have assumed the following for purposes of this opinion:
1. The shares of beneficial interest have been issued in
accordance with the Agreement and Declaration of Trust and By-laws of UAM and
resolutions of UAM's Board relating to the creation, authorization and issuance
of the Shares.
2. Prior to the issuance of any future Shares, the Board (a)
will duly authorize the issuance of such future Shares, (b) will determine with
respect to each class of such future Shares the preferences, limitations and
relative rights applicable thereto and (c) if such future
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Shares are classified into separate series, will duly take the action necessary
to create such series and to determine the number of shares of such series and
the relative designations, preferences, limitations and relative rights thereof.
3. With respect to the future Shares, there will be
compliance with the terms, conditions and restrictions applicable to the
issuance of such shares that are set forth in (i) UAM's Agreement and
Declaration of Trust and By-laws, each as amended as of the date of such
issuance, and (ii) the applicable future series designations.
4. The Board will not change the preferences, limitations or
relative rights of any class or series of Shares after any shares of such class
or series have been issued.
Based upon the foregoing, we are of the opinion that the
Shares of the Portfolio will be, when issued in accordance with, and sold for
the consideration described in the Registration Statement, validly issued, fully
paid and non-assessable by UAM, and that the holders of the Portfolio's Shares
will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the general
corporation law of the State of Delaware (except that we express no opinion as
to such holders who are also trustees of UAM).
We consent to the filing of this opinion with Post-Effective
Amendment No. 30 to the Registration Statement to be filed by UAM with the
Securities and Exchange Commission.
Very truly yours,
/s/Drinker Biddle and Reath LLP
DRINKER BIDDLE AND REATH LLP
-2-
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Exhibit J
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 30 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated February 4, 1999 relating to the financial
statements and financial highlights appearing in the December 31, 1998 Annual
Report to the Shareholders of the Heitman Real Estate Portfolio, a series of UAM
Funds Trust, which is also incorporated by reference into the Registration
Statement. We also consent to the references to us under the heading "Financial
Highlights" in such Prospectus and to the references to us under the headings
"Financial Statements" and "Independent Public Accountant" in such Statement of
Additional Information.
PricewaterhouseCoopers LLP
Boston, Massachusetts
April 20, 1999