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UAM Funds
Funds for the Informed Investor(SM)
The McKee Portfolios
Annual Report October 31, 2000
[LOGO OF UAM]
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UAM FUNDS McKEE PORTFOLIOS
OCTOBER 31, 2000
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TABLE OF CONTENTS
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Shareholders' Letter .................................................... 1
Portfolios of Investments
U.S. Government .................................................... 16
Domestic Equity .................................................... 21
International Equity ............................................... 27
Small Cap Equity ................................................... 33
Statements of Assets and Liabilities .................................... 40
Statements of Operations ................................................ 41
Statements of Changes in Net Assets
U.S. Government .................................................... 42
Domestic Equity .................................................... 43
International Equity ............................................... 44
Small Cap Equity ................................................... 45
Financial Highlights
U.S. Government .................................................... 46
Domestic Equity .................................................... 47
International Equity ............................................... 48
Small Cap Equity ................................................... 49
Notes to Financial Statements ........................................... 50
Report of Independent Accountants ....................................... 57
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October 31, 2000
Dear Shareholders:
McKee U.S. Government Portfolio
The Portfolio returned 5.75 percent for the 12 months ended October 31, 2000.
The results benefited from the rally in long-term bonds early in the year and
the later rally in shorter maturities. Positions in corporate and
mortgage-backed securities, however, hurt performance compared to the benchmark
Lehman U.S. Government Bond Index.
Economic and Market Perspective
The early months of the year presented fixed income investors with a conflicting
picture. Strong economic growth, tight labor markets, rising energy prices, and
concerns about inflation should have resulted in rising interest rates. Instead,
the announced Treasury buyback, heavy cash inflows into Treasuries by
foreigners, and reported low inflation due to productivity gains caused interest
rates to decline, especially in the long end of the yield curve, inverting it.
At the most extreme point of the inversion, the yield on the 30-year Treasury
bond was three quarters of a point below the yield on the two-year.
The inversion began to reverse in May as signs of slowing economic growth
appeared. The reduced likelihood of Federal Reserve monetary tightening in the
second half of 2000 and diminishing investor reaction to the Treasury's buyback
program contributed to a substantial decrease in short- and medium-term yields
in the following months. By October 31 the yield curve remained only slightly
inverted.
Performance
The Treasury rally that began early in 2000 contributed importantly to the
Portfolio's 5.75 percent return for the 12 months ended October 31, 2000. But
that performance trailed the benchmark Lehman U.S. Government Bond Index, which
returned 8.02 percent for the period. The difference was primarily a result of
the Portfolio's substantial positions in non-Treasury (spread) sectors. The
Portfolio's over-weighted position in the spread sectors throughout the period
penalized relative performance during the Treasury rally. The corporate sector
in particular hurt relative performance in the face of investor concern about
the consequences of increased corporate debt, higher interest rates, slowing
economic growth and the possibility of reduced corporate earnings.
The changes in the yield curve during the period also hurt relative results. The
Portfolio's concentration in 5 and 10-year maturities and its under-weighting in
30-year maturities compared to the benchmark penalized relative return slightly
as a result of the inversion.
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Portfolio duration had a positive effect on relative return. We shortened
duration temporarily twice during the period to capture short-term
opportunities, afterwards returning to a neutral position compared to the
benchmark.
Portfolio Structure
At October 31, 2000 Treasuries composed 41.2 percent of the Portfolio, agencies
25.2 percent, corporates 14.4 percent, mortgages 13.4 percent, asset-backed
securities 2.3 percent and cash 2.8 percent.
Portfolio duration remains essentially neutral compared to the benchmark index.
We remain over-weighted in the spread sectors, confident that their potential
for performance exceeds Treasuries. As spreads between Treasuries and the
sectors diminished during the second half of the period, however, we reduced
spread-sector exposure to approximately 27 percentage points above the
benchmark. At year end corporates were over-weighted by approximately 15
percentage points compared to the benchmark, mortgages by 13 percentage points
and asset-backed securities by 2 percentage points. Agencies were under-weighted
by 3 percentage points. Our strategy in security selection continues to focus on
diversification, quality and liquidity.
Largest Holdings By Security
At October 31, 2000
Percent of % of Yield to
Issuer Coupon Maturity Portfolio Maturity
------ ---------- -------- --------- --------
U.S. Treasury STRIPS ........ 0.000% 05/15/17 9.20% 6.16%
FNMA ........................ 7.500% 12/01/23 8.22% 7.30%
U.S. Treasury Note .......... 5.750% 04/30/03 8.17% 6.20%
U.S. Treasury Note .......... 5.875% 11/30/01 6.67% 6.14%
FNMA ........................ 5.750% 02/15/08 6.58% 6.74%
FNMA ........................ 5.625% 03/15/01 5.72% 6.57%
FNMA ........................ 6.625% 09/15/09 5.37% 6.82%
U.S. Treasury Bond .......... 9.375% 02/15/06 5.13% 5.86%
U.S. Treasury Bond .......... 8.500% 02/15/20 3.88% 5.97%
U.S. Treasury Bond .......... 10.625% 08/15/15 3.34% 5.89%
U.S. Treasury Note .......... 4.875% 03/31/01 3.28% 6.38%
Outlook
If the stock market does not rally strongly from its recent slump, consumer
spending will be affected and economic growth, already slowing, will continue to
slow. In this environment we do not anticipate Federal Reserve action on
interest rates until early spring, when the Fed is more likely to ease than
tighten monetary policy. But the Fed could remove its tightening bias this year,
sparking a rally in 2-year maturities.
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In addition, the narrow majority in the new Congress and the lack of a clear
presidential mandate argue against passage of major spending or tax-cut programs
next year. Instead, we anticipate continued reduction of federal debt and an
expansion of the Treasury buyback program, further positives for the bond
market.
Although these conditions point to lower rates next year, we remain aware that
the market has historically been a poor performer in the first quarter as a
result of wage increases, new business spending and winter energy costs.
McKee Domestic Equity Portfolio
The Portfolio had a disappointing return of -1.24 percent for the 12 months
ended October 31, 2000 partly reflecting the weak performance of the
communications services sector and of a number of industry leaders in consumer
staples.
Economic and Market Perspective
The past twelve months will be remembered for bringing back the notion of value
and reminding investors that no company can grow forever at a 35-percent annual
rate. The NASDAQ Composite Index reached a high in March 2000 with an index
value above 5000 and a trailing price-to-earnings ratio over 400. This
astronomical price-to-earnings number was bound to correct itself, and the index
value has declined for the past six months. Management at the time did not
realize how fast and to what extent the market had to drop to reach a fair
value. Now an underlying fundamental shift has occurred, and traditional
valuation measures are being used. Small-cap and mid-cap stocks have
outperformed large-cap stocks over the past several months, and this should
continue for the next few months.
Performance
The Portfolio's return of -1.24 percent for the 12 months ended October 31, 2000
was substantially lower than the 6.09 percent return from the benchmark S&P 500
Composite Index. The difference is largely attributable to under-performance of
holdings in the consumer staples, healthcare, communications services and
consumer cyclicals sectors.
In absolute terms, communications services and consumer staples, together
representing about 14.5 percent of the Portfolio during the period, hurt return
the most. The market's punishment of the former had a particularly adverse
effect on a number of telecom industry leaders in the Portfolio, notably
WorldCom, Sprint and AT&T. Poor performance by Proctor & Gamble, General Mills
and H.J. Heinz penalized returns from the consumer staples sector.
On the other hand, the Portfolio's technology holdings, nearly a third
of total assets during the period, performed strongly, despite the widespread
carnage in the sector
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since March 2000. Return on technology holdings was nearly double that of the
benchmark index. Oracle and EMC-Mass were the best performers, but Sun
Microsystems and Cisco Systems also contributed robustly to return. Microsoft,
however, was the single largest detractor from total Portfolio return, which was
also hurt by Lucent Technologies' slide.
Financial sector holdings also contributed vigorously to absolute returns, with
Citigroup, AIG and Merrill Lynch performing best.
Portfolio Structure
Late in October we began reshaping the Portfolio for the changed market. We
liquidated positions and took gains in companies that had performed
exceptionally well, but become overvalued, such as Cisco Systems and EMC-Mass.
As part of this strategy we reduced holdings in large-cap technology stocks. At
the same time we added a sizeable position in Texaco and increased positions in
WorldCom, Schering Plough, Honeywell and Associates First Capital.
We have reduced our exposure to technology stocks and cyclicals. At October 31,
2000 technology stocks represented 13.3 percent of the Portfolio, still the
largest sector, but down from 35.8 percent at July 31. In addition, technology,
which had been over-weighted compared to the benchmark index, was under-weighted
at October 31, 2000. At this date the Portfolio was over-weighted in the
healthcare, commercial services, financial and energy sectors, compared to the
benchmark index. It was most significantly under-weighted in technology,
consumer cyclicals and capital goods.
At October 31, 2000 the Portfolio held 108 stocks.
Largest Holdings By Industry
Percent of Net Assets at October 31, 2000
Computers & Services ................................................. 13.3%
Pharmaceuticals ...................................................... 11.1%
Telephones & Telecommunications ...................................... 10.1%
Financial Services ................................................... 8.9%
Petroleum Refining ................................................... 5.4%
Semiconductors/Instruments ........................................... 4.3%
Insurance ............................................................ 3.7%
Banks ................................................................ 3.2%
Retail ............................................................... 3.1%
Food, Beverage & Tobacco ............................................. 3.0%
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Largest Holdings By Company
Percent of Net Assets at October 31, 2000
Intel ................................................................ 3.2%
Microsoft ............................................................ 2.9%
General Electric ..................................................... 2.8%
Exxon Mobile ......................................................... 2.7%
Associates First Capital, Cl A ....................................... 2.7%
Pfizer ............................................................... 2.5%
Oracle ............................................................... 2.5%
American International Group ......................................... 2.4%
Merck ................................................................ 2.3%
AT&T ................................................................. 2.0%
Outlook
Although the pace of growth has eased, the economy remains healthy, with
moderate inflation, rising productivity, rising corporate earnings and little
prospect of imminent monetary tightening by the Federal Reserve on the one hand
or of recession on the other. The global economy continues to grow, as well. In
this environment we expect demand for domestic equities to increase, but with
far more discrimination about value than in the past several years. We also
expect disappointing returns over the next several years from many of the
mega-cap star performers of the recent past and increasing investor focus on mid
and small-cap stocks.
McKee International Equity Portfolio
The Portfolio had a return of -1.69 percent for the year ended October 31, 2000,
as rising energy prices and the measured pace of economic recovery in Asia
punished returns from global markets. The results surpassed the return from the
benchmark MSCI EAFE Index, but were disappointing nevertheless.
Economic and Market Perspective
Amid positives that included economic growth, easing trade restrictions and
reviving corporate earnings, global markets struggled during the year ended
October 31, 2000. Sharply higher oil prices took a toll on numerous economies,
stalling many smaller ones. The slide in the value of the euro depressed returns
from Europe despite good underlying economic growth. The uncertain pace of
economic recovery in Japan and political conflicts in emerging economies such as
Indonesia and the Philippines impeded Asia's continued recovery from the
financial crises of 1998.
There were bright spots, though. Markets in China, Canada and parts of
Scandinavia performed particularly well.
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Performance
The Portfolio's -1.69 percent return for the 12 months ended October 31, 2000,
was better than the benchmark MSCI EAFE Index, which returned a -2.90 percent.
Investments in Finland, the Netherlands, Sweden, Switzerland and Spain, where
the Portfolio was over-weighted compared to the benchmark and out-performed it,
as well, contributed to the difference. The Portfolio also benefited from strong
results from investments in Israel, Mexico and Canada, which are unrepresented
in the benchmark index, and in Ireland, which is only minimally represented.
Weak performance in Japan, the U.K., and Germany, representing more than 46
percent of Portfolio investments, hurt both absolute and relative return.
Investments in Korea, where the benchmark is unrepresented, also hurt both
absolute and relative return.
Business services, the Portfolio's most heavily weighted economic sector,
contributed the most to return, with health care, consumer durables and capital
goods also making positive contributions. Technology and banking, together
representing more than 27 percent of the Portfolio during the period, had a
slightly negative effect. The financial and retail sectors hurt return the most.
The pharmaceuticals, telecomm services and household durables industries made
the largest contributions to return. Computer software companies, telephone
utilities and broad-line retailers penalized return the most.
Portfolio Structure
The Portfolio was invested in 21 world markets as of October 31, 2000. Europe,
including Scandinavia, and Japan together accounted for more than 90 percent of
the assets. Although Japan and the U.K. represent the largest individual country
holdings, they are the most under-weighted compared to the benchmark index. The
Portfolio is slightly over-weighted in Germany and includes small positions in
Canada, Israel, the U.S., Mexico, the Philippines, South Korea and Taiwan,
countries not represented in the benchmark index. The Portfolio is widely
diversified by industry, with the largest concentrations, banking and
telecommunications, each accounting for about 15 percent of assets.
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At October 31, 2000, the Portfolio held stock in 127 companies, representing 21
countries.
Largest Holdings By Country
Percent of Net Assets at October 31, 2000
Portfolio
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Japan ............................................................... 18.9%
United Kingdom ...................................................... 18.7%
France .............................................................. 12.3%
Netherlands ......................................................... 7.8%
Germany ............................................................. 7.3%
Switzerland ......................................................... 7.2%
Spain ............................................................... 3.4%
Sweden .............................................................. 2.3%
Italy ............................................................... 2.0%
Australia ........................................................... 1.9%
Largest Holdings By Company
Percent of Net Assets at October 31, 2000
Vodafone Group (United Kingdom) ..................................... 2.8%
BP Amoco (United Kingdom) ........................................... 2.3%
Royal Dutch Petroleum (Netherlands) ................................. 1.8%
Axa (France) ........................................................ 1.8%
Novartis (Switzerland) .............................................. 1.7%
HSBC (United Kingdom) ............................................... 1.7%
Alcatel (France) .................................................... 1.7%
Total Fina Elf (France) ............................................. 1.7%
Nippon Telegraph & Telephone (Japan) ................................ 1.6%
Glaxo Wellcome (United Kingdom) ..................................... 1.6%
Outlook
Continuing high-energy prices, conflicts in the Mideast and elsewhere, the
difficulty of economic and political reform in Asia and South America, and
tightening of monetary policy present challenges to international equity returns
in the next year and beyond. Yet gains in productivity, a rapidly expanding
technological revolution, corporate restructuring, continued moderate levels of
inflation and a widening recognition of the benefits of market economics and
world trade, exemplified by China's imminent entry into the World Trade
Organization, are cause for optimism. We believe the potential benefits may
indicate positive global market performance in the long term, but the challenges
assure plenty of bumps in the road immediately ahead.
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McKee Small Cap Value Equity
The Portfolio had a return of -5.08 percent for the year ended October 31, 2000.
The results, which were well below those of the benchmark Russell 2000 Index, in
particular reflected poor performance by investments in the consumer
discretionary sector, which includes traditional and internet retailers. But the
market has begun a change that augurs well for the small-cap value sector.
Economic and Market Perspective
The fundamental market change that began after the NASDAQ's peak in March had
mixed effects on small-cap stocks. As the bubble in the valuation of
mega-capitalization and technology stocks began its slow leak, market interest
in small caps began to revive, following several years of neglect. Although
growth stocks still out-performed value stocks, the latter began to close the
gap. The reduced likelihood after July of continuing interest-rate increases by
the Federal Reserve no doubt helped. But the conditions that had set the stage
for the market change--higher interest rates, the prospect of slowing economic
growth, reduced earnings expectations and rising energy prices, carrying the
threat of inflation--in conjunction with mounting investor caution took a toll
on a number of small value stocks, including many in the consumer discretionary
and technology sectors.
Performance
The Portfolio returned a -5.08 percent which substantially under-performed the
benchmark Russell 2000 Index, which returned 17.41 percent for the year ending
October 31, 2000. Relative results were hurt by investments in several
industries -- retail, production technology equipment, telecommunications
utilities and communications technology -- where the Portfolio was over-weighted
compared to the benchmark and simultaneously under-performed by a wide margin.
Two retailers, Lands End and Tommy Hilfiger, and a computer services company,
Microstrategy, particularly hurt return.
Investments in the health care sector--notably the drug and pharmaceutical
industry and the biotechnology research and production industry, which were
over-weighted compared to the benchmark--made the biggest contribution to
relative return. A computer services company, Project Software and Development,
was the largest individual contributor.
Portfolio Structure
We have begun to re-structure the Portfolio, reducing the number of holdings to
allow closer scrutiny and quicker responses to market change. As part of the
changes we have reduced exposure in the technology and consumer discretionary
sectors and increased positions in financial services and health care.
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At October 31 the Portfolio held 186 stocks. The technology sector accounted for
approximately 13 percent of Portfolio assets, financial for 6 percent and health
care for 9 percent. Technology, health care and financial, in that order, were
also the most heavily over-weighted, compared to the benchmark index. The
materials and processing, and consumer discretionary sectors were the most
under-weighted, comparatively.
Largest Holdings By Industry
Percent of Net Assets at October 31, 2000
Computers & Services ................................................. 12.9%
Semiconductors/Instruments ........................................... 10.6%
Pharmaceuticals ...................................................... 9.9%
Medical Products & Services .......................................... 8.8%
Banks ................................................................ 7.1%
Insurance ............................................................ 6.5%
Financial Services ................................................... 5.5%
Communications Equipment ............................................. 4.4%
Electrical Technology ................................................ 3.9%
Energy ............................................................... 3.5%
Largest Holdings By Company
Percent of Net Assets at October 31, 2000
King Pharmaceuticals ................................................. 1.7%
Idee Pharmaceuticals ................................................. 1.4%
Human Genome Sciences ................................................ 1.4%
Millennium Pharmaceuticals ........................................... 1.3%
Federated Investors, Cl B ............................................ 1.1%
Emulex ............................................................... 1.1%
Celgene .............................................................. 1.1%
Arthur J. Gallagher .................................................. 1.1%
LifePoint Hospitals .................................................. 1.1%
IDT .................................................................. 1.0%
Outlook
The prospect for small cap value stocks appears to be better today than it has
been for several years. Interest rates may have peaked, the economy is still
expanding -- although at a reduced pace -- capital is still available to many
small companies, and many are realizing many of the production and communication
benefits of the electronic age. More immediately, investors' love affair with
size may be waning
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and their respect for valuation growing. While we expect considerable volatility
ahead in the small-cap segment of the market, we anticipate improvements for
rational and patient investors.
Yours truly,
/s/ Eugene M. Natali
Eugene M. Natali
C.S. McKee Chief Executive Officer
All performance presented in this report is historical and should not be
construed as a guarantee of future results. The investment return and principal
value of an investment will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. A portfolio's
performance assumes the reinvestment of all dividends and capital gains.
There are no assurances that a portfolio will meet its stated objectives.
A portfolio's holdings and allocations are subject to change because it is
actively managed and should not be considered recommendations to buy individual
securities.
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Definition of the Comparative Indices
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Lehman U.S. Government Bond Index is an unmanaged index of U.S. treasury bonds
and bonds issued by U.S. government agencies and quasi-federal corporation, and
corporate debt guaranteed by the U.S. government.
Lehman U.S. Government/Corporate Index is 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 (BBB) or higher, with maturities of at least one
year and outstanding par value of at least $100 million of U.S. government
issues and $25 million for others. Any security downgraded during the month is
held in the index until month end and then removed. All returns are market value
weighted inclusive of accrued income.
Morgan Stanley Capital International EAFE Index is an unmanaged index comprised
of over 900 securities listed on the stock exchanges of countries in Europe,
Australia and the Far East.
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.
Russell 2000 Index is an unmanaged index comprised of 2,000 stocks of U.S.
companies with small market capitalization.
S&P 500 Composite Index is an unmanaged index comprised of stocks representing
major U.S. market industries, including 400 industrial stocks, 40 financial
stocks, 40 utility stocks and 20 transportation stocks.
Index returns assume reinvestment of dividends and, unlike a portfolio's
returns, do not reflect any fees or expenses. If such fees and expenses were
included in the index returns, the performance would have been lower.
Please note that one cannot invest directly in an unmanaged index.
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Growth of a $10,000 Investment
---------------------------------
AVERAGE ANNUAL TOTAL RETURN**
FOR PERIOD ENDED OCTOBER 31, 2000
---------------------------------
Since
1 Year 5 Years 3/2/95*
---------------------------------
5.75% 4.37% 5.59%
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[GRAPH]
McKee LGB LGCP
--------- ------- --------
3/2/95 10,000 10,000 10,000
10/95 10,995 11,041 11,085
10/96 11,410 11,606 11,683
10/97 12,292 12,610 12,712
10/98 13,195 14,034 14,018
10/99 12,873 13,863 13,925
2000 13,614 14,975 14,915
Periods ended on October 31st
* Beginning of operations. Index comparisons begin on 2/28/95.
** If the adviser and/or portfolio service providers had not limited certain
expenses, the portfolio's total return would have been lower.
All performance presented in this report is historical and should not be
construed as a guarantee of future results. The investment return and principal
value of an investment will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
A portfolio's performance assumes the reinvestment of all dividends and capital
gains.
Index returns assume reinvestment of dividends and, unlike a portfolio's
returns, do not reflect any fees or expenses. If such fees and expenses were
included in the index returns, the performance would have been lower.
Please note that one cannot invest directly in an unmanaged index.
See definition of comparative indices on page 11.
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Growth of a $10,000 Investment
---------------------------------
AVERAGE ANNUAL TOTAL RETURN**
FOR PERIOD ENDED OCTOBER 31, 2000
---------------------------------
Since
1 Year 5 Years 3/2/95*
---------------------------------
-1.24% 12.65% 13.87%
---------------------------------
[GRAPH]
STERLING S&P
3/2/95 $10,000 $10,000
10/95 11,514 12,128
10/96 13,737 15,048
10/97 17,990 19,878
10/98 18,594 24,251
10/99 21,153 30,477
2000 20,891 32,333
Periods ended on October 31st
* Beginning of operations. Index comparisons begin on 2/28/95.
** If the adviser and/or portfolio service providers had not limited certain
expenses, the portfolio's total return would have been lower.
All performance presented in this report is historical and should not be
construed as a guarantee of future results. The investment return and principal
value of an investment will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
A portfolio's performance assumes the reinvestment of all dividends and capital
gains.
Index returns assume reinvestment of dividends and, unlike a portfolio's
returns, do not reflect any fees or expenses. If such fees and expenses were
included in the index returns, the performance would have been lower.
Please note that one cannot invest directly in an unmanaged index.
See definition of comparative indices on page 11.
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Growth of a $10,000 Investment
---------------------------------
AVERAGE ANNUAL TOTAL RETURN**
FOR PERIOD ENDED OCTOBER 31, 2000
---------------------------------
Since
1 Year 5 Years 5/26/94*
---------------------------------
-1.69% 11.05% 8.73%
---------------------------------
[GRAPH]
McKEE INTERNATIONAL MORGAN STANLEY CAPITAL
EQUITY PORTFOLIO INTERNATIONAL EAFE INDEX
5/26/94 10,000 10,000
1994 10,431 10,490
1995 10,151 10,452
1996 10,992 11,548
1997 13,225 12,082
1998 13,381 13,247
1999 17,439 16,298
2000 17,144 15,825
Periods ended on October 31st
* Beginning of operations. Index comparisons begin on 5/31/94.
** If the adviser and/or portfolio service providers had not limited certain
expenses, the portfolio's total return would have been lower.
All performance presented in this report is historical and should not be
construed as a guarantee of future results. The investment return and principal
value of an investment will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
A portfolio's performance assumes the reinvestment of all dividends and capital
gains.
Index returns assume reinvestment of dividends and, unlike a portfolio's
returns, do not reflect any fees or expenses. If such fees and expenses were
included in the index returns, the performance would have been lower.
Please note that one cannot invest directly in an unmanaged index.
See definition of comparative indices on page 11.
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Growth of a $10,000 Investment
---------------------------------
AVERAGE ANNUAL TOTAL RETURN**
FOR PERIOD ENDED OCTOBER 31, 2000
---------------------------------
Since
1 Year 11/4/97*
---------------------------------
-5.08% -6.80%
---------------------------------
[GRAPH]
MCKEE SMALL CAP RUSSELL 2000
EQUITY PORTFOLIO INDEX
11/4/97 $10,000 $10,000
1998 8,464 8,815
1999 8,533 10,126
2000 8,099 11,889
Periods ended on October 31st
* Beginning of operations. Index comparisons begin on 10/31/97.
** If the adviser and/or portfolio service providers had not limited certain
expenses, the portfolio's total return would have been lower.
All performance presented in this report is historical and should not be
construed as a guarantee of future results. The investment return and principal
value of an investment will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
A portfolio's performance assumes the reinvestment of all dividends and capital
gains.
Index returns assume reinvestment of dividends and, unlike a portfolio's
returns, do not reflect any fees or expenses. If such fees and expenses were
included in the index returns, the performance would have been lower.
Please note that one cannot invest directly in an unmanaged index.
See definition of comparative indices on page 11.
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PORTFOLIO OF INVESTMENTS
U.S. TREASURY OBLIGATIONS -- 40.9%
Face
Amount Value
----------- -----------
U.S. TREASURY BONDS -- 13.5%
10.750%, 08/15/05 ............................... $ 130,000 $ 155,984
9.375%, 02/15/06 ............................... 567,000 656,456
10.625%, 08/15/15 ............................... 290,000 420,300
8.500%, 02/15/20 ............................... 388,000 497,144
----------
1,729,884
----------
U.S. TREASURY NOTES -- 18.2%
4.875%, 03/31/01 ............................... 430,000 427,175
5.875%, 11/30/01 ............................... 858,000 854,242
5.750%, 04/30/03 ............................... 1,050,000 1,045,811
----------
2,327,228
----------
U.S. TREASURY PRINCIPAL STRIPS -- 9.2%
0.000%, 05/15/17 ............................... 3,168,000 1,178,401
----------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $5,143,791) .............................. 5,235,513
----------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 26.4%
FEDERAL HOME LOAN MORTGAGE CORPORATION -- 0.0%
7.650%, 05/10/05 ............................... 5,000 5,000
----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 26.4%
5.625%, 03/15/01 ............................... 735,000 732,126
5.750%, 02/15/08 ............................... 885,000 841,901
6.400%, 05/14/09 ............................... 145,000 138,475
6.625%, 09/15/09 ............................... 690,000 687,413
7.250%, 01/15/10 ............................... 395,000 409,303
7.125%, 01/15/30 ............................... 375,000 390,041
8.500%, 04/01/30 ............................... 174,648 178,478
----------
3,377,737
----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $3,406,464) .............................. 3,382,737
----------
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
UAM FUNDS McKEE U.S. GOVERNMENT PORTFOLIO
OCTOBER 31, 2000
--------------------------------------------------------------------------------
U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS -- 11.9%
Face
Amount Value
----------- -----------
FEDERAL HOME LOAN MORTGAGE CORPORATION -- 1.2%
6.500%, 07/01/29 ............................... $ 159,593 $ 153,507
----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 8.2%
7.500%, 12/01/23 ............................... 1,047,787 1,053,019
----------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 2.5%
7.000%, 09/15/24 ............................... 197,992 195,393
8.500%, 12/15/29 ............................... 118,677 121,754
----------
317,147
----------
TOTAL U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS
(Cost $1,557,444) .............................. 1,523,673
----------
CORPORATE OBLIGATIONS -- 14.3%
AEROSPACE & DEFENSE -- 1.1%
Raytheon
6.150%, 11/01/08 ............................... 150,000 137,625
----------
BANKS -- 0.5%
Bank of America
5.875%, 02/15/09 ............................... 65,000 58,419
First Union Institutional Capital
8.040%, 12/01/26 ............................... 10,000 8,962
----------
67,381
----------
FOOD, BEVERAGE & TOBACCO -- 1.0%
Philip Morris
7.250%, 09/15/01 ............................... 125,000 124,531
7.625%, 05/15/02 ............................... 6,000 5,970
----------
130,501
----------
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
UAM FUNDS McKEE U.S. GOVERNMENT PORTFOLIO
OCTOBER 31, 2000
--------------------------------------------------------------------------------
CORPORATE OBLIGATIONS -- continued
Face
Amount Value
----------- -----------
FINANCIAL SERVICES -- 3.9%
Countrywide Capital I
8.000%, 12/15/26 ............................... $ 200,000 $ 174,250
Ford Motor Credit
7.375%, 10/28/09 ............................... 180,000 175,500
General Motors Acceptance
7.500%, 07/15/05 ............................... 95,000 95,828
Mellon Funding
6.875%, 03/01/03 ............................... 60,000 60,000
----------
505,578
----------
METALS -- 0.5%
Alcoa
7.375%, 08/01/10 ............................... 65,000 65,609
----------
MULTIMEDIA -- 1.5%
News America Holdings
8.500%, 02/15/05 ............................... 180,000 187,650
----------
PETROLEUM & FUEL PRODUCTS -- 1.0%
Phillips Petroleum
7.125%, 03/15/28 ............................... 151,000 129,294
----------
REAL ESTATE -- 1.0%
EOP Operating
6.763%, 06/15/07 ............................... 130,000 123,987
----------
RETAIL -- 0.4%
J.C. Penney
7.250%, 04/01/02 ............................... 50,000 45,000
----------
TELEPHONES & TELECOMMUNICATIONS -- 0.1%
SBC Communications
6.250%, 03/01/05 ............................... 10,000 9,769
----------
TRANSPORTATION -- 0.8%
Norfolk Southern
7.350%, 05/15/07 ............................... 105,000 103,556
----------
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
UAM FUNDS McKEE U.S. GOVERNMENT PORTFOLIO
OCTOBER 31, 2000
--------------------------------------------------------------------------------
CORPORATE OBLIGATIONS -- continued
Face
Amount Value
----------- -----------
UTILITIES -- 2.5%
Consolidated Edison, Series 97-B
6.450%, 12/01/07 ............................... $ 331,000 $ 312,795
Pacific Gas & Electric, Series 93-E
5.875%, 10/01/05 ............................... 10,000 9,350
----------
322,145
----------
TOTAL CORPORATE OBLIGATIONS
(Cost $1,926,010) .............................. 1,828,095
----------
ASSET-BACKED SECURITIES -- 2.3%
CREDIT CARDS -- 1.8%
American Express Master Trust, Series 98-1 A
5.900%, 04/15/04 ............................... 8,000 7,860
World Financial Network Credit Card Series 96-B A
6.950%, 04/15/06 ............................... 225,000 226,582
----------
234,442
----------
MORTGAGE-RELATED SECURITIES -- 0.5%
Advanta Mortgage Loan Trust, Series 94-1 A1
6.300%, 07/25/25 ............................... 48,141 47,032
Contimortgage Home Equity Loan Trust Series 98-1 A5
6.430%, 04/15/16 ............................... 9,000 8,907
----------
55,939
----------
TOTAL ASSET-BACKED SECURITIES
(Cost $289,187) ................................ 290,381
----------
GOVERNMENT REGIONAL -- 0.1%
Province of Ontario
7.000%, 08/04/05 (Cost $10,501) ................ 10,000 10,112
----------
SUPRANATIONAL -- 0.5%
Inter-American Development Bank
7.375%, 01/15/10 (Cost $66,236) ................ 65,000 67,925
----------
The accompanying notes are an integral part of the financial statements.
19
<PAGE>
UAM FUNDS McKEE U.S. GOVERNMENT PORTFOLIO
OCTOBER 31, 2000
--------------------------------------------------------------------------------
SHORT-TERM INVESTMENT -- 2.8%
Face
Amount Value
----------- -----------
REPURCHASE AGREEMENT -- 2.8%
Chase Securities, Inc. 6.35%, dated 10/31/00,
due 11/01/00, to be repurchased at $356,063,
collateralized by $266,653 of various
U.S. Treasury Obligations, valued at
$356,007 (Cost $356,000) ....................... $ 356,000 $ 356,000
-----------
TOTAL INVESTMENTS -- 99.2%
(Cost $12,755,633) (a) ......................... 12,694,436
-----------
OTHER ASSETS AND LIABILITIES, NET -- 0.8% ......... 108,297
-----------
TOTAL NET ASSETS -- 100.0% ......................... $12,802,733
===========
STRIPS Separate Trading of Registered Interest and Principal of Securities
(a) The cost for federal income tax purposes was $12,874,260. At October 31,
2000, net unrealized depreciation for all securities based on tax cost
was $179,824. This consisted of gross unrealized appreciation for all
securities of $126,885 and aggregate gross unrealized depreciation for
all securities of $306,709.
The accompanying notes are an integral part of the financial statements.
20
<PAGE>
UAM FUNDS McKEE DOMESTIC EQUITY PORTFOLIO
OCTOBER 31, 2000
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
COMMON STOCKS -- 87.3%
Shares Value
-------- ----------
AEROSPACE & DEFENSE -- 0.5%
Boeing .......................................... 2,150 $ 145,797
----------
AIR TRANSPORTATION -- 0.6%
FedEx* .......................................... 3,750 175,725
----------
BANKS -- 3.2%
Bank of America ................................. 6,050 290,778
Chase Manhattan ................................. 5,425 246,837
FleetBoston Financial ........................... 3,550 134,900
SunTrust Banks .................................. 1,300 63,456
Wells Fargo ..................................... 4,450 206,091
----------
942,062
----------
BEAUTY PRODUCTS -- 0.3%
Procter & Gamble ................................ 1,250 89,297
----------
BIOTECHNOLOGY -- 1.1%
Amgen* .......................................... 4,550 263,616
Biogen* ......................................... 1,200 72,225
----------
335,841
----------
CHEMICALS -- 0.2%
E.I. du Pont de Nemours ......................... 1,650 74,869
----------
COMMUNICATIONS EQUIPMENT -- 0.9%
Motorola ........................................ 4,450 110,972
Qualcomm* ....................................... 2,150 139,985
----------
250,957
----------
COMPUTERS & SERVICES -- 13.3%
America Online* ................................. 7,100 358,053
Dell Computer* .................................. 5,450 160,775
Hewlett-Packard ................................. 5,400 250,762
IBM ............................................. 5,300 522,050
Intel ........................................... 21,100 948,181
Microsoft* ...................................... 12,600 867,825
Oracle* ......................................... 22,300 735,900
Yahoo* .......................................... 1,400 82,075
----------
3,925,621
----------
The accompanying notes are an integral part of the financial statements.
21
<PAGE>
UAM FUNDS McKEE DOMESTIC EQUITY PORTFOLIO
OCTOBER 31, 2000
--------------------------------------------------------------------------------
COMMON STOCKS -- continued
Shares Value
-------- ----------
CONSUMER DURABLES -- 2.8%
General Electric ................................ 15,000 $ 822,187
----------
DIVERSIFIED -- 0.0%
Corning ......................................... 1 76
----------
ELECTRIC UTILITIES -- 1.6%
Dominion Resources .............................. 2,250 134,016
Duke Energy ..................................... 1,150 99,403
Exelon .......................................... 1,550 93,194
FPL Group ....................................... 1,300 85,800
Southern ........................................ 2,300 67,562
----------
479,975
----------
ENERGY -- 0.9%
Enron ........................................... 3,250 266,703
----------
ENTERTAINMENT -- 2.2%
Time Warner ..................................... 4,500 341,595
Walt Disney ..................................... 8,550 306,197
----------
647,792
----------
FINANCIAL SERVICES -- 8.9%
American Express ................................ 5,300 318,000
Associates First Capital, Cl A .................. 21,150 785,194
Charles Schwab .................................. 6,950 244,119
Citigroup ....................................... 3,766 198,186
Goldman Sachs Group ............................. 700 69,869
JP Morgan ....................................... 650 107,575
Lehman Brothers Holdings ........................ 900 58,050
Mellon Financial ................................ 2,200 106,150
Merrill Lynch ................................... 4,050 283,500
Morgan Stanley Dean Witter ...................... 4,350 349,359
PNC Financial Services Group .................... 1,700 113,687
----------
2,633,689
----------
FOOD, BEVERAGE & TOBACCO -- 3.0%
Anheuser-Busch Companies ........................ 2,350 107,512
Coca-Cola ....................................... 4,550 274,706
H.J. Heinz ...................................... 2,850 119,522
Kroger* ......................................... 4,350 98,147
The accompanying notes are an integral part of the financial statements.
22
<PAGE>
UAM FUNDS McKEE DOMESTIC EQUITY PORTFOLIO
OCTOBER 31, 2000
--------------------------------------------------------------------------------
COMMON STOCKS -- continued
Shares Value
-------- ----------
FOOD, BEVERAGE & TOBACCO -- continued
Pepsico ......................................... 2,250 $ 108,984
Safeway* ........................................ 1,950 106,641
Sara Lee ........................................ 3,750 80,859
----------
896,371
----------
INSURANCE -- 3.7%
American International Group .................... 7,275 712,950
Hartford Financial Services ..................... 1,750 130,266
Marsh & McLennan ................................ 1,900 248,425
----------
1,091,641
----------
MACHINERY -- 1.9%
Applied Materials* .............................. 5,700 302,812
Emerson Electric ................................ 2,750 201,953
KLA-Tencor* ..................................... 1,250 42,266
----------
547,031
----------
MANUFACTURING -- 1.3%
Minnesota Mining & Manufacturing ................ 800 77,300
Tyco International .............................. 5,350 303,278
----------
380,578
----------
MEDIA-TV/RADIO/CABLE -- 1.3%
AT&T - Liberty Media, Cl A* ..................... 3,750 67,500
Clear Channel Communications* ................... 2,250 135,141
Comcast, Cl A* .................................. 4,500 183,375
----------
386,016
----------
MEDICAL PRODUCTS -- 2.2%
Johnson & Johnson ............................... 3,950 363,894
Medtronic ....................................... 5,000 271,562
----------
635,456
----------
OIL & GAS -- 1.6%
Royal Dutch Petroleum ADR ....................... 5,650 335,469
Schlumberger .................................... 1,900 144,638
----------
480,107
----------
The accompanying notes are an integral part of the financial statements.
23
<PAGE>
UAM FUNDS McKEE DOMESTIC EQUITY PORTFOLIO
OCTOBER 31, 2000
--------------------------------------------------------------------------------
COMMON STOCKS -- continued
Shares Value
-------- ----------
PAPER & PAPER PRODUCTS -- 0.4%
Kimberly-Clark .................................. 1,700 $ 112,200
----------
PETROLEUM REFINING -- 5.4%
Apache .......................................... 2,100 116,156
Exxon Mobil ..................................... 8,850 789,309
Halliburton ..................................... 2,700 100,069
Texaco .......................................... 9,700 572,906
----------
1,578,440
----------
PHARMACEUTICALS -- 11.1%
Abbott Laboratories ............................. 6,650 351,203
American Home Products .......................... 2,450 155,575
Bristol-Myers Squibb ............................ 6,100 371,719
Eli Lilly ....................................... 3,150 281,531
Merck ........................................... 7,450 670,034
Pfizer .......................................... 17,150 740,666
Pharmacia ....................................... 4,350 239,250
Schering-Plough ................................. 8,800 454,850
----------
3,264,828
----------
PRINTING & PUBLISHING -- 0.9%
Viacom, Cl B* ................................... 4,500 255,938
----------
RESTAURANTS -- 0.3%
McDonald's ...................................... 2,700 83,700
----------
RETAIL -- 3.1%
Home Depot ...................................... 6,400 275,200
Lowe's .......................................... 3,450 157,622
Wal-Mart Stores ................................. 10,800 490,050
----------
922,872
----------
SEMICONDUCTORS/INSTRUMENTS -- 4.3%
Altera* ......................................... 1,200 49,125
Analog Devices* ................................. 1,350 87,750
Linear Technology ............................... 1,500 96,844
Maxim Integrated Products* ...................... 1,250 82,891
Micron Technology* .............................. 1,200 41,700
National Semiconductor* ......................... 2,600 67,600
The accompanying notes are an integral part of the financial statements.
24
<PAGE>
UAM FUNDS McKEE DOMESTIC EQUITY PORTFOLIO
OCTOBER 31, 2000
--------------------------------------------------------------------------------
COMMON STOCKS -- continued
Shares Value
-------- ----------
SEMICONDUCTORS/INSTRUMENTS -- continued
Sanmina* ........................................ 600 $ 68,588
SDL* ............................................ 1,000 259,250
Texas Instruments ............................... 5,100 250,219
Xilinx* ......................................... 3,500 253,531
----------
1,257,498
----------
STEEL & STEEL WORKS -- 0.2%
Alcoa ........................................... 2,500 71,719
----------
TELEPHONES & TELECOMMUNICATIONS -- 10.1%
ADC Telecommunications* ......................... 2,700 57,712
Alltel .......................................... 2,050 132,097
AT&T ............................................ 25,075 581,427
Avaya* .......................................... 525 7,055
Bellsouth ....................................... 5,350 258,472
Nextel Communications, Cl A* .................... 3,000 115,313
SBC Communications .............................. 9,231 532,513
Sprint (FON Group) .............................. 4,250 108,375
Sprint (PCS Group)* ............................. 2,600 99,125
Tellabs* ........................................ 1,000 49,937
Verizon Communications .......................... 9,077 524,764
WorldCom* ....................................... 21,000 498,750
----------
2,965,540
----------
TOTAL COMMON STOCKS
(Cost $25,594,007) ........................... 25,720,526
----------
The accompanying notes are an integral part of the financial statements.
25
<PAGE>
UAM FUNDS McKEE DOMESTIC EQUITY PORTFOLIO
OCTOBER 31, 2000
--------------------------------------------------------------------------------
SHORT-TERM INVESTMENT -- 11.9%
Face
Amount Value
----------- -----------
REPURCHASE AGREEMENT -- 11.9%
Chase Securities, Inc. 6.35%, dated 10/31/00,
due 11/01/00, to be repurchased at $3,522,621,
collateralized by $2,638,063 of various
U.S. Treasury Obligations, valued at
$3,522,069 (Cost $3,522,000) ................. $ 3,522,000 $ 3,522,000
-----------
TOTAL INVESTMENTS -- 99.2%
(Cost $29,116,007) (a) ....................... 29,242,526
-----------
OTHER ASSETS AND LIABILITIES, NET -- 0.8% ....... 233,470
-----------
TOTAL NET ASSETS -- 100.0% ...................... $29,475,996
===========
* Non-income producing security
ADR American Depository Receipt
Cl Class
(a) The cost for federal income tax purposes was $29,189,170. At October 31,
2000, net unrealized appreciation for all securities based on tax cost was
$53,356. This consisted of gross unrealized appreciation for all securities
of $3,158,496 and aggregate gross unrealized depreciation for all
securities of $3,105,140.
The accompanying notes are an integral part of the financial statements.
26
<PAGE>
UAM FUNDS McKEE INTERNATIONAL EQUITY PORTFOLIO
OCTOBER 31, 2000
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
FOREIGN COMMON STOCKS -- 90.0%
Shares Value
-------- -----------
AUSTRALIA -- 1.9%
News ............................................ 160,600 $ 1,679,439
Westpac Banking ................................. 216,245 1,476,254
-----------
3,155,693
-----------
BELGIUM -- 0.7%
Fortis, Cl B .................................... 34,900 1,067,883
-----------
CANADA -- 1.5%
Alcan Aluminum .................................. 27,266 857,809
Seagram ......................................... 28,330 1,621,189
-----------
2,478,998
-----------
FINLAND -- 1.3%
Nokia Oyj ....................................... 50,000 2,055,006
-----------
FRANCE -- 12.3%
Alcatel ......................................... 44,605 2,718,338
Aventis ......................................... 13,050 940,200
Axa ............................................. 22,750 3,008,132
BNP Paribas ..................................... 19,900 1,713,712
Canal Plus ...................................... 4,100 592,515
Cap Gemini ...................................... 3,100 493,981
Carrefour Supermarche ........................... 16,000 1,072,723
Coflexip Stena Offshore ......................... 3,860 446,592
Ilog ADR* ....................................... 6,400 192,000
L'Oreal ......................................... 18,000 1,373,112
LVMH Moet-Hennessy Louis Vuitton ................ 18,500 1,348,532
Sanofi-Synthelabo ............................... 20,300 1,066,789
STMicroelectronics .............................. 25,600 1,289,979
Suez Lyonnaise des Eaux ......................... 4,450 678,173
Thomson CSF ..................................... 12,900 578,411
Total Fina Elf .................................. 18,580 2,655,182
-----------
20,168,371
-----------
GERMANY -- 7.3%
Allianz ......................................... 6,900 2,342,300
BASF ............................................ 16,900 664,654
Bayer ........................................... 24,450 1,058,987
The accompanying notes are an integral part of the financial statements.
27
<PAGE>
UAM FUNDS McKEE INTERNATIONAL EQUITY PORTFOLIO
OCTOBER 31, 2000
--------------------------------------------------------------------------------
FOREIGN COMMON STOCKS -- continued
Shares Value
-------- -----------
GERMANY -- continued
Bayerische Hypo-und Vereinsbank ................. 17,900 $ 981,631
Commerzbank ..................................... 37,281 1,050,679
DaimlerChrysler ................................. 12,780 588,737
Deutsche Bank ................................... 18,500 1,521,018
E.ON ............................................ 16,500 837,725
Schering ........................................ 10,550 587,501
Siemens ......................................... 18,600 2,364,804
-----------
11,998,036
-----------
IRELAND -- 1.0%
Elan ADR* ....................................... 29,800 1,547,738
-----------
ITALY -- 2.0%
Enel* ........................................... 258,300 956,746
Telecom Italia* ................................. 97,350 1,126,314
TIM* ............................................ 135,750 1,152,918
-----------
3,235,978
-----------
JAPAN -- 18.9%
Bank of Tokyo-Mitsubishi ........................ 152,000 1,822,218
Canon ........................................... 21,000 832,769
Daiwa Securities Group .......................... 80,000 885,795
East Japan Railway .............................. 200 1,148,457
Fujitsu ......................................... 44,000 783,368
Hitachi ......................................... 145,000 1,553,714
Ito-Yokado ...................................... 38,000 1,715,725
KAO ............................................. 35,000 1,048,173
Matsushita Electric Industrial .................. 49,000 1,422,566
Mitsubishi ...................................... 104,000 857,221
Mitsui .......................................... 59,000 391,748
Mitsui ADR ...................................... 3,900 517,922
Mitsui Marine & Fire Insurance .................. 140,000 710,321
Mizuho Holding* ................................. 150 1,152,578
Nintendo ........................................ 6,800 1,124,096
Nippon Telegraph & Telephone .................... 290 2,637,329
Nomura Securities ............................... 69,000 1,462,909
Sanwa Bank ...................................... 154,000 1,368,074
Sony ............................................ 24,000 1,916,659
Sumitomo Bank ................................... 99,000 1,201,346
The accompanying notes are an integral part of the financial statements.
28
<PAGE>
UAM FUNDS McKEE INTERNATIONAL EQUITY PORTFOLIO
OCTOBER 31, 2000
--------------------------------------------------------------------------------
FOREIGN COMMON STOCKS -- continued
Shares Value
-------- -----------
JAPAN -- continued
Takeda Chemical Industries ...................... 24,000 1,580,365
Tokyo Electric Power ............................ 46,000 1,116,403
Tokyo Electron .................................. 6,000 469,274
Toyota Motor .................................... 57,300 2,288,012
Yamanouchi Pharmaceutical ....................... 21,000 950,087
-----------
30,957,129
-----------
MEXICO -- 0.5%
Telefonos de Mexico ADR ......................... 14,100 760,519
-----------
NETHERLANDS -- 7.8%
Aegon ........................................... 30,800 1,221,765
Akzo Nobel ...................................... 20,050 911,748
ASM Lithography Holding* ........................ 21,300 581,515
Heineken ........................................ 25,300 1,372,434
Koninklijke Ahold ............................... 28,800 835,584
Koninklijke Philips Electronics ................. 50,614 1,986,719
Royal Dutch Petroleum ........................... 50,900 3,022,188
Royal KPN ....................................... 50,752 1,026,825
TNT Post Group .................................. 45,707 966,982
Unilever ........................................ 18,350 919,210
-----------
12,844,970
-----------
PHILIPPINES -- 0.4%
Philippine Long Distance Telephone .............. 40,700 616,667
-----------
PORTUGAL -- 1.3%
Electricidade de Portugal* ...................... 195,000 528,902
Portugal Telecommunications* .................... 178,000 1,584,164
-----------
2,113,066
-----------
SINGAPORE -- 0.5%
Singapore Airlines .............................. 87,000 872,230
-----------
SOUTH KOREA -- 0.2%
Samsung Electronics ............................. 3,200 400,879
-----------
The accompanying notes are an integral part of the financial statements.
29
<PAGE>
UAM FUNDS McKEE INTERNATIONAL EQUITY PORTFOLIO
OCTOBER 31, 2000
--------------------------------------------------------------------------------
FOREIGN COMMON STOCKS -- continued
Shares Value
-------- -----------
SPAIN -- 3.4%
Banco Bilbao Vizcaya Argentaria ................. 128,700 $ 1,712,652
Endesa .......................................... 43,100 701,406
Repsol YPF ...................................... 48,415 768,204
Telefonica* ..................................... 125,802 2,395,971
-----------
5,578,233
-----------
SWEDEN -- 2.3%
LM Ericsson, Cl B ............................... 164,400 2,182,156
Nordic Baltic Holding* .......................... 212,792 1,599,375
-----------
3,781,531
-----------
SWITZERLAND -- 7.2%
Givaudan* ....................................... 150 35,955
Nestle .......................................... 1,200 2,485,957
Novartis ........................................ 1,850 2,805,712
Roche Holding ................................... 150 1,369,779
Swiss Re ........................................ 500 985,763
Swisscom ........................................ 7,100 1,802,542
UBS ............................................. 16,400 2,271,064
-----------
11,756,772
-----------
TAIWAN -- 0.8%
Taiwan Semiconductor Manufacturing ADR* ......... 56,900 1,290,919
-----------
UNITED KINGDOM -- 18.7%
ARM Holdings* ................................... 65,500 646,765
AstraZeneca ..................................... 13,000 609,359
Barclays ........................................ 78,900 2,259,334
BG Group ........................................ 139,300 558,286
BP Amoco ........................................ 451,100 3,828,722
British SKY Broadcasting* ....................... 55,400 800,441
British Telecommunications ...................... 130,900 1,535,846
Cable & Wireless ................................ 34,000 481,371
Carlton Communications .......................... 55,887 450,402
Diageo .......................................... 173,017 1,634,303
Glaxo Wellcome .................................. 89,600 2,581,346
HSBC Holdings (HKD) ............................. 199,600 2,776,808
Lattice Group* .................................. 139,300 297,348
Lloyds TSB Group ................................ 178,600 1,820,602
The accompanying notes are an integral part of the financial statements.
30
<PAGE>
UAM FUNDS McKEE INTERNATIONAL EQUITY PORTFOLIO
OCTOBER 31, 2000
--------------------------------------------------------------------------------
FOREIGN COMMON STOCKS -- continued
Shares Value
-------- -----------
UNITED KINGDOM -- continued
Marconi ......................................... 102,600 $ 1,296,174
Pearson ......................................... 30,300 813,535
Reuters Group ................................... 62,000 1,208,205
Scottish Power .................................. 100,300 753,716
SmithKline Beecham .............................. 125,800 1,625,800
Vodafone Group .................................. 1,098,512 4,574,091
------------
30,552,454
------------
TOTAL FOREIGN COMMON STOCKS
(Cost $145,548,514) .......................... 147,233,072
------------
COMMON STOCK -- 0.9%
UNITED STATES -- 0.9%
SDL* (Cost $1,885,997) .......................... 5,600 1,451,800
------------
SHORT-TERM INVESTMENT -- 1.0%
Face
Amount
----------
REPURCHASE AGREEMENT -- 1.0%
Chase Securities, Inc. 6.35%, dated 10/31/00,
due 11/01/00, to be repurchased at $1,693,299,
collateralized by $1,268,098 of various
U.S. Treasury Obligations, valued at
$1,693,033 (Cost $1,693,000) ................. $ 1,693,000 1,693,000
------------
TOTAL INVESTMENTS -- 91.9%
(Cost $149,127,511) (a) ...................... 150,377,872
------------
OTHER ASSETS AND LIABILITIES, NET -- 8.1% ....... 13,305,786
------------
TOTAL NET ASSETS -- 100.0% ...................... $163,683,658
============
* Non-income producing security
ADR American Depositary Receipt
Cl Class
HKD Hong Kong Dollar
(a) The cost for federal income tax purposes was $149,949,773. At October 31,
2000, net unrealized appreciation for all securities based on tax cost was
$428,099. This consisted of gross unrealized appreciation for all
securities of $16,697,247 and aggregate gross unrealized depreciation for
all securities of $16,269,148.
The accompanying notes are an integral part of the financial statements.
31
<PAGE>
UAM FUNDS McKEE INTERNATIONAL EQUITY PORTFOLIO
OCTOBER 31, 2000
--------------------------------------------------------------------------------
At October 31, 2000, sector diversification of the Portfolio was as follows:
% of Market
Sector Diversification (Unaudited) Net Assets Value
---------------------------------- ---------- ---------
Airlines ......................................... 0.5% $ 872,230
Automotive ....................................... 1.8 2,876,749
Banks ............................................ 15.1 24,727,346
Broadcasting, Newspapers & Advertising ........... 4.4 7,165,725
Chemicals ........................................ 1.6 2,635,390
Computers & Services ............................. 2.3 3,811,058
Consumer Goods ................................... 2.7 4,463,321
Consumer Services ................................ 1.1 1,766,892
Cosmetics & Toiletries ........................... 1.5 2,457,240
Diversified Operations ........................... 2.0 3,202,529
Electrical Components & Equipment ................ 6.4 10,513,640
Financial Services ............................... 2.1 3,416,587
Food, Beverage & Tobacco ......................... 6.3 10,346,916
Insurance ........................................ 5.1 8,268,281
Medical Products & Services ....................... 9.6 15,664,676
Metals ........................................... 0.5 857,809
Office Equipment ................................. 0.5 832,769
Petroleum & Fuel Products ........................ 7.1 11,576,522
Retail ........................................... 1.0 1,715,724
Telephones & Telecommunications .................. 18.0 29,398,030
Transportation ................................... 1.3 2,115,438
----- ------------
Total Common Stocks .............................. 90.9 148,684,872
Repurchase Agreement ............................. 1.0 1,693,000
----- ------------
Total Investments ................................ 91.9 150,377,872
Other Assets and Liabilities, Net ................ 8.1 13,305,786
----- ------------
Net Assets ....................................... 100.0% $163,683,658
===== ============
The accompanying notes are an integral part of the financial statements.
32
<PAGE>
UAM FUNDS McKEE SMALL CAP EQUITY PORTFOLIO
OCTOBER 31, 2000
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 98.7%
Shares Value
---------- ----------
AIR TRANSPORTATION -- 0.4%
Alaska Air Group* ............................. 4,600 $ 119,312
----------
AIRCRAFT -- 0.2%
AAR ........................................... 5,450 65,059
----------
AUTOMOTIVE -- 1.1%
Lear* ......................................... 5,500 149,875
SPX* .......................................... 1,050 129,806
TRW ........................................... 2,600 109,200
----------
388,881
----------
BANKS -- 7.0%
Amsouth Bancorporation ........................ 9,670 134,776
Astoria Financial ............................. 4,450 166,875
Bank United, Cl A ............................. 3,350 189,903
Banknorth Group ............................... 11,450 207,531
Cullen/Frost Bankers .......................... 8,900 296,481
Dime Bancorp .................................. 12,100 295,694
Hudson United Bancorp ......................... 5,100 114,112
MAF Bancorp ................................... 9,436 226,464
S&T Bancorp ................................... 11,550 217,284
Trustmark ..................................... 6,400 121,600
UnionBanCal ................................... 5,600 117,600
Wilmington Trust .............................. 5,550 292,069
----------
2,380,389
----------
BROADCASTING, NEWSPAPERS & ADVERTISING -- 3.2%
Citadel Communications* ....................... 4,850 58,806
Emmis Communications, Cl A* ................... 4,600 123,050
Entercom Communications* ...................... 5,000 195,937
Getty Images* ................................. 4,900 155,575
Pegasus Communications* ....................... 2,400 85,350
Price Communications* ......................... 10,100 218,412
True North Communications ..................... 3,600 135,675
Westwood One* ................................. 5,950 112,678
----------
1,085,483
----------
BUILDING & CONSTRUCTION -- 1.2%
Southdown ..................................... 1,500 106,312
Toll Brothers* ................................ 9,140 297,050
----------
403,362
----------
The accompanying notes are an integral part of the financial statements.
33
<PAGE>
UAM FUNDS McKEE SMALL CAP EQUITY PORTFOLIO
OCTOBER 31, 2000
--------------------------------------------------------------------------------
COMMON STOCKS -- continued
Shares Value
---------- ----------
CHEMICALS -- 1.3%
Cytec Industries* ............................. 4,900 $ 169,662
Ferro ......................................... 6,200 127,100
Solutia ....................................... 9,800 124,950
----------
421,712
----------
COMMUNICATIONS EQUIPMENT -- 4.4%
Advanced Fibre Communication* ................. 4,600 149,787
Andrew* ....................................... 7,550 198,659
Cable Design Technologies* .................... 6,975 160,861
Polycom* ...................................... 5,200 338,000
Powertel* ..................................... 3,550 309,737
Sawtek* ....................................... 4,300 218,762
Tekelec* ...................................... 3,100 114,119
----------
1,489,925
----------
COMPUTERS & SERVICES -- 12.9%
Barra* ........................................ 4,300 262,838
Be Free* ...................................... 27,050 106,509
Brooktrout* ................................... 6,650 96,009
C-Cube Microsystems* .......................... 3,650 71,175
Clarent* ...................................... 1,650 51,253
Cognex* ....................................... 4,400 147,400
Cybear Group* ................................. 461 317
Documentum* ................................... 3,000 255,000
Emulex* ....................................... 2,500 367,187
Factset Research Systems ...................... 5,000 189,350
I2 Technologies* .............................. 1,677 285,090
IDT* .......................................... 9,700 346,775
iGate Capital* ................................ 18,000 91,125
Interactive Intelligence* ..................... 4,650 169,725
Internet Security Systems* .................... 2,600 229,450
Interwoven* ................................... 1,300 130,975
Mercury Interactive* .......................... 1,400 155,400
Proxicom* ..................................... 4,600 62,100
Retek* ........................................ 3,791 149,508
RSA Security* ................................. 4,550 263,900
S1* ........................................... 1,600 19,300
Sandisk* ...................................... 4,200 225,684
Sybase* ....................................... 7,350 153,891
Verity* ....................................... 5,000 117,500
VerticalNet* .................................. 4,500 125,508
The accompanying notes are an integral part of the financial statements.
34
<PAGE>
UAM FUNDS McKEE SMALL CAP EQUITY PORTFOLIO
OCTOBER 31, 2000
--------------------------------------------------------------------------------
COMMON STOCKS -- continued
Shares Value
---------- ----------
COMPUTERS & SERVICES -- continued
Wind River Systems* ........................... 2,700 $ 110,869
Zebra Technologies, Cl A* ..................... 3,600 157,725
----------
4,341,563
----------
ELECTRICAL SERVICES -- 0.1%
Rare Medium Group* ............................ 4,800 22,200
----------
ELECTRICAL TECHNOLOGY -- 3.9%
APW* .......................................... 7,200 332,550
Artesyn Technologies* ......................... 7,600 308,750
C&D Technologies .............................. 5,600 331,100
CTS ........................................... 2,900 124,519
Kemet* ........................................ 7,300 203,487
----------
1,300,406
----------
ENERGY -- 3.5%
Energen ....................................... 11,150 319,169
New Jersey Resources .......................... 6,200 247,612
Public Service of New Mexico .................. 11,100 305,944
RGS Energy Group .............................. 10,550 311,225
----------
1,183,950
----------
FINANCIAL SERVICES -- 5.5%
Donaldson, Lufkin & Jenrette .................. 14,950 75,684
Federated Investors, Cl B ..................... 13,275 386,634
First Ecom.com* ............................... 14,250 43,641
LaBranche* .................................... 6,800 269,450
Metris ........................................ 8,000 259,000
PMI Group ..................................... 4,150 306,581
T. Rowe Price Associates ...................... 5,500 257,469
Waddell & Reed Financial, Cl A ................ 7,875 251,016
----------
1,849,475
----------
FOOD, BEVERAGE & TOBACCO -- 2.2%
Applebees International ....................... 6,400 193,300
Hain Celestial Group* ......................... 5,600 222,250
Ruddick ....................................... 10,100 132,562
Whole Foods Market* ........................... 3,950 182,687
----------
730,799
----------
The accompanying notes are an integral part of the financial statements.
35
<PAGE>
UAM FUNDS McKEE SMALL CAP EQUITY PORTFOLIO
OCTOBER 31, 2000
--------------------------------------------------------------------------------
COMMON STOCKS -- continued
Shares Value
---------- ----------
INSURANCE -- 6.5%
Alleghany* .................................... 700 $ 134,531
Arthur J. Gallagher ........................... 5,800 366,125
Delphi Financial Group, Cl A* ................. 925 34,225
E.W. Blanch Holdings .......................... 5,850 110,419
First American ................................ 14,350 300,453
Horace Mann Educators ......................... 13,700 230,331
Mony Group .................................... 6,100 250,862
Nationwide Financial Services, Cl A ........... 6,800 330,650
Radian Group .................................. 4,000 283,500
Stancorp Financial Group ...................... 3,650 148,737
----------
2,189,833
----------
INVESTMENT COMPANY -- 0.3%
American Capital Strategies ................... 4,900 108,106
----------
MACHINERY -- 1.8%
Black & Decker ................................ 5,250 197,531
Donaldson ..................................... 4,100 92,763
Pentair ....................................... 4,200 125,213
PerkinElmer ................................... 1,550 185,225
----------
600,732
----------
MEDICAL PRODUCTS & SERVICES -- 8.8%
Affymetrix* ................................... 2,800 155,050
Celgene* ...................................... 5,700 366,938
Cephalon* ..................................... 4,600 246,675
Coherent* ..................................... 3,200 111,400
Core Laboratories* ............................ 6,750 145,547
Human Genome Sciences* ........................ 5,300 468,470
Incyte Genomics* .............................. 1,200 43,950
Laser Vision Centers* ......................... 12,400 50,375
LifePoint Hospitals* .......................... 9,400 364,250
Millennium Pharmaceuticals* ................... 6,000 435,375
PE-Celera Genomics Group* ..................... 2,200 148,500
Transkaryotic Therapies* ...................... 2,200 81,950
Varian Medical Systems* ....................... 4,300 210,163
Wellpoint Health Networks* .................... 1,300 152,019
----------
2,980,662
----------
METALS -- 0.4%
Mueller Industries* ........................... 5,300 123,556
----------
The accompanying notes are an integral part of the financial statements.
36
<PAGE>
UAM FUNDS McKEE SMALL CAP EQUITY PORTFOLIO
OCTOBER 31, 2000
--------------------------------------------------------------------------------
COMMON STOCKS -- continued
Shares Value
---------- ----------
MISCELLANEOUS MANUFACTURING -- 0.5%
Actuant ....................................... 7,200 $ 26,100
Furniture Brands International* ............... 8,200 138,375
----------
164,475
----------
OIL & GAS -- 2.9%
CAL Dive International* ....................... 3,950 195,772
Diamond Offshore Drilling ..................... 5,600 193,550
Helmerich & Payne ............................. 6,550 205,916
Stone Energy* ................................. 2,800 143,360
Tosco ......................................... 8,500 243,313
----------
981,911
----------
PHARMACEUTICALS -- 9.9%
Alkermes* ..................................... 4,000 148,250
Alpharma, Cl A ................................ 3,600 139,725
Andrx Group* .................................. 2,750 198,000
Biomatrix* .................................... 5,500 105,188
Biovail* ...................................... 5,500 231,344
Gilead Sciences* .............................. 3,650 313,900
Idec Pharmaceuticals* ......................... 2,400 470,700
ImClone Systems* .............................. 5,400 295,313
IVAX* ......................................... 5,650 245,775
King Pharmaceuticals* ......................... 13,012 583,100
Medicis Pharmaceutical, Cl A* ................. 4,650 342,356
Mylan Laboratories ............................ 5,000 140,000
Owens & Minor ................................. 8,550 129,319
----------
3,342,970
----------
PRINTING & PUBLISHING -- 0.9%
Bowne ......................................... 7,300 61,138
Scholastic* ................................... 2,100 168,000
Valassis Communications* ...................... 3,200 88,800
----------
317,938
----------
RETAIL -- 3.4%
American Eagle Outfitters* .................... 5,350 184,241
BJ's Wholesale Club* .......................... 4,190 138,008
Callaway Golf ................................. 12,600 201,600
La-Z-Boy ...................................... 8,700 137,025
Michaels Stores* .............................. 2,400 58,350
Mortons Restaurant Group* ..................... 5,250 99,750
The accompanying notes are an integral part of the financial statements.
37
<PAGE>
UAM FUNDS McKEE SMALL CAP EQUITY PORTFOLIO
OCTOBER 31, 2000
--------------------------------------------------------------------------------
COMMON STOCKS -- continued
Shares Value
---------- ----------
RETAIL -- continued
Ross Stores ................................... 9,000 $ 118,688
ShopKo Stores* ................................ 8,000 51,000
Wendy's International ......................... 7,600 165,300
----------
1,153,962
----------
SEMICONDUCTORS/INSTRUMENTS -- 10.6%
Alpha Industries* ............................. 5,800 231,275
Amkor Technology* ............................. 6,800 153,000
ATMI* ......................................... 4,850 91,544
Cree* ......................................... 2,100 208,425
Cypress Semiconductor* ........................ 7,900 295,756
Dallas Semiconductor .......................... 7,200 285,300
ESS Technology* ............................... 9,100 141,050
Integrated Device Technology* ................. 3,800 213,988
International Rectifier* ...................... 4,800 214,200
LTX* .......................................... 6,300 88,200
Methode Electronics, Cl A ..................... 4,700 176,838
Micrel* ....................................... 4,000 181,000
MRV Communications* ........................... 4,600 181,700
Pixelworks* ................................... 4,300 143,244
Plexus* ....................................... 2,150 135,584
Semtech* ...................................... 7,100 228,975
Transwitch* ................................... 5,150 297,413
Triquint Semiconductor* ....................... 6,400 245,200
Varian Semiconductor Equipment* ............... 2,700 62,100
----------
3,574,792
----------
SERVICES -- 1.0%
Dollar Thrifty Automotive Group* .............. 6,450 99,169
Korn/Ferry International* ..................... 4,050 141,750
Modis Professional Services* .................. 10,250 42,281
Personnel Group Of America* ................... 15,850 48,541
----------
331,741
----------
TELEPHONES & TELECOMMUNICATIONS -- 3.5%
Adelphia Business Solutions* .................. 4,100 25,625
Adtran* ....................................... 3,200 121,600
Commscope* .................................... 5,500 139,219
Digital Island* ............................... 3,700 46,713
ITC Deltacom* ................................. 7,600 61,513
Mastec* ....................................... 5,250 151,922
Mpower Communications* ........................ 7,350 47,775
The accompanying notes are an integral part of the financial statements.
38
<PAGE>
UAM FUNDS McKEE SMALL CAP EQUITY PORTFOLIO
OCTOBER 31, 2000
--------------------------------------------------------------------------------
COMMON STOCKS -- continued
Shares Value
---------- ----------
TELEPHONES & TELECOMMUNICATION -- continued
Plantronics* .................................. 4,200 $ 191,625
RSL Communications, Cl A* ..................... 12,400 15,500
Tollgrade Communications* ..................... 1,500 143,625
XO Communications* ............................ 6,884 232,227
-----------
1,177,344
-----------
TRUCKING -- 0.5%
USFreightways ................................. 6,000 154,500
----------
WHOLESALE -- 0.8%
United Stationers* ............................ 5,500 165,344
W.W. Grainger ................................. 3,000 95,813
----------
261,157
----------
TOTAL COMMON STOCKS
(Cost $33,483,288) ......................... 33,246,195
==========
SHORT-TERM INVESTMENT -- 1.3%
Face
Amount
--------
REPURCHASE AGREEMENT -- 1.3%
Chase Securities, Inc. 6.35%, dated 10/31/00,
due 11/01/00, to be repurchased at $454,080,
collateralized by $340,057 of various
U.S. Treasury Obligations, valued at
$454,009 (Cost $454,000) ................... $454,000 454,000
-----------
TOTAL INVESTMENTS -- 100.0%
(Cost $33,937,288) (a) ..................... 33,700,195
-----------
OTHER ASSETS AND LIABILITIES, NET -- 0.0% ...... (14,490)
-----------
TOTAL NET ASSETS -- 100.0% ..................... $33,685,705
===========
* Non-income producing security
Cl Class
(a) The cost for federal income tax purposes was $34,067,289. At October 31,
2000, net unrealized depreciation for all securities based on tax cost was
$367,094. This consisted of gross unrealized appreciation for all
securities of $6,237,739 and aggregate gross unrealized depreciation for
all securities of $6,604,833.
The accompanying notes are an integral part of the financial statements.
39
<PAGE>
UAM FUNDS McKEE PORTFOLIO
FOR THE YEAR ENDED OCTOBER 31, 2000
--------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
McKee McKee McKee McKee
U.S. Domestic International Small Cap
Government Equity Equity Equity
Portfolio Portfolio Portfolio Portfolio
------------ ----------- ------------ -------------
<S> <C> <C> <C> <C>
Assets
Investments, at Cost ............................. $ 12,399,633 $25,594,007 $147,434,511 $ 33,483,288
============ =========== ============ ============
Investments, at Value -- Note A .................. $ 12,338,436 $25,720,526 $148,684,872 $ 33,246,195
Repurchase Agreements, at Value -- Note A
(Cost $356,000, $3,522,000, $1,693,000
and $454,000, respectively) ................... 356,000 3,522,000 1,693,000 454,000
Receivable for Investments Sold .................. -- 1,352,543 13,992,093 --
Interest Receivable .............................. 145,344 -- -- --
Foreign Withholding Tax Reclaim
Receivable .................................... -- -- 172,841 --
Dividends Receivable ............................. -- 16,633 175,303 19,213
Receivable for Portfolio Shares Sold ............. -- -- 3,535 --
Cash ............................................. 730 396 925 719
Foreign Cash (Cost $0, $0, $142,098,
and $0, respectively) ......................... -- -- 142,753 --
Other Assets ..................................... 1,266 5,015 10,796 6,036
------------ ----------- ------------ ------------
Total Assets .................................. 12,841,776 30,617,113 164,876,118 33,726,163
------------ ----------- ------------ ------------
Liabilities
Payable for Investments Purchased ................ -- 1,090,070 973,846 --
Payable for Investment Advisory
Fees -- Note B ................................ 5,064 14,600 92,997 2,863
Payable for Administrative
Fees -- Note C ................................ 8,388 9,472 22,068 9,663
Payable for Custodian Fees -- Note D ............. 2,500 3,500 32,000 3,500
Payable for Directors' Fees -- Note F ............ 850 850 1,250 850
Unrealized Foreign Exchange Losses ............... -- -- 25,200 --
Other Liabilities ................................ 22,241 22,625 45,099 23,582
------------ ----------- ------------ ------------
Total Liabilities ............................. 39,043 1,141,117 1,192,460 40,458
------------ ----------- ------------ ------------
Net Assets ....................................... $ 12,802,733 $29,475,996 $163,683,658 $ 33,685,705
============ =========== ============ ============
Net Assets Consist of:
Paid in Capital .................................. 13,405,455 25,949,633 138,354,448 48,288,216
Undistributed Net Investment Income .............. 76,315 -- 18,166 --
Accumulated Net Realized Gain (Loss) ............. (617,840) 3,399,844 24,105,968 (14,365,418)
Unrealized Appreciation (Depreciation) ........... (61,197) 126,519 1,205,076 (237,093)
------------ ----------- ------------ ------------
Net Assets ....................................... $ 12,802,733 $29,475,996 $163,683,658 $ 33,685,705
============ =========== ============ ============
Institutional Class Shares:
Shares Issued and Outstanding
($0.001 par value)(Authorized
25,000,000) 1,305,553 2,787,555 13,277,878 4,194,314
Net Asset Value, Offering and Redemption
Price Per Share ............................... $9.81 $10.57 $12.33 $8.03
===== ====== ====== =====
</TABLE>
The accompanying notes are an integral part of the financial statements.
40
<PAGE>
UAM FUNDS McKEE PORTFOLIO
FOR THE YEAR ENDED OCTOBER 31, 2000
--------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
McKee McKee McKee McKee
U.S. Domestic International Small Cap
Government Equity Equity Equity
Portfolio Portfolio Portfolio Portfolio
-------------- -------------- -------------- --------------
Investment Income
<S> <C> <C> <C> <C>
Dividends ................................... $ -- $ 381,197 $ 2,562,696 $ 374,416
Interest .................................... 913,817 22,198 171,730 47,292
Less: Foreign Taxes Withheld ................ -- (1,686) (193,708) --
--------- ----------- ------------ -----------
Total Income ............................. 913,817 401,709 2,540,718 421,708
--------- ----------- ------------ -----------
Expenses
Investment Advisory Fees -- Note B .......... 64,174 235,002 1,301,284 484,984
Administrative Fees -- Note C ............... 91,396 107,381 256,555 115,076
Filing and Registration Fees ................ 16,399 14,001 28,074 13,925
Audit Fees .................................. 15,228 14,332 18,985 15,991
Printing Fees ............................... 13,906 14,483 22,445 24,220
Custodian Fees -- Note D .................... 4,618 10,230 163,305 15,031
Directors' Fees -- Note F ................... 3,336 3,607 6,238 11,635
Shareholder Servicing Fees -- Note G ........ 1,818 8,894 33,482 4,401
Legal Fees .................................. 901 1,914 9,646 2,250
Interest Expense ............................ -- -- 6,579 --
Other Expenses .............................. 5,524 8,481 42,281 12,975
Investment Advisory Fees Waived ............. -- -- -- (151,000)
--------- ----------- ------------ -----------
Net Expenses Before Expense Offset 217,300 418,325 1,888,874 549,488
Expense Offset -- Note A .................... (656) (208) (33,769) (2,074)
--------- ----------- ------------ -----------
Net Expenses After Expense Offset ........ 216,644 418,117 1,855,105 547,414
--------- ----------- ------------ -----------
Net Investment Income (Loss) ................ 697,173 (16,408) 685,613 (125,706)
--------- ----------- ------------ -----------
Net Realized Gain (Loss) on:
Investments .............................. (503,285) 3,581,951 26,313,266 (5,344,249)
Foreign Currency Transactions ............ -- -- (315,426) --
--------- ----------- ------------ -----------
Net Realized Gain (Loss) on
Investments and Foreign
Exchange Transactions .................... (503,285) 3,581,951 25,997,840 (5,344,249)
--------- ----------- ------------ -----------
Net Change in Unrealized
Appreciation (Depreciation) on:
Investments .............................. 525,601 (3,774,923) (29,967,671) 3,703,047
Foreign Currency Transactions ............ -- -- (45,417) --
--------- ----------- ------------ -----------
Net Change in Unrealized
Appreciation (Depreciation) .............. 525,601 (3,774,923) (30,013,088) 3,703,047
--------- ----------- ------------ -----------
Net Gain (Loss) on Investments and
Foreign Currency ......................... 22,316 (192,972) (4,015,248) (1,641,202)
--------- ----------- ------------ -----------
Net Increase (Decrease) in Net Assets
Resulting from Operations ................ $ 719,489 $ (209,380) $ (3,329,635) $(1,766,908)
========= =========== ============ ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
41
<PAGE>
UAM FUNDS McKEE U.S. GOVERNMENT PORTFOLIO
--------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Year Year
Ended Ended
October 31, October 31,
2000 1999
------------ ------------
Increase (Decrease) in Net Assets
Operations:
Net Investment Income ......................... $ 697,173 $ 1,055,148
Net Realized Gain (Loss) ...................... (503,285) 56,877
Net Change in Unrealized
Appreciation (Depreciation) ................. 525,601 (1,598,999)
------------ ------------
Net Increase (Decrease) in Net Assets Resulting
from Operations ............................. 719,489 (486,974)
------------ ------------
Distributions:
Net Investment Income ......................... (743,835) (1,136,270)
Net Realized Gain ............................. (169,786) (1,198,752)
------------ ------------
Total Distributions ........................... (913,621) (2,335,022)
------------ ------------
Capital Share Transactions (1):
Issued ........................................ 1,743,896 44,476,684
In Lieu of Cash Distributions ................. 874,381 2,272,326
Redeemed ...................................... (8,095,861) (61,933,981)
------------ ------------
Net Decrease from Capital Share Transactions .. (5,477,584) (15,184,971)
------------ ------------
Total Decrease ............................. (5,671,716) (18,006,967)
------------ ------------
Net Assets:
Beginning of Period ........................... 18,474,449 36,481,416
------------ ------------
End of Period (including undistributed
net investment income of
$76,315 and $126,893, respectively) ......... $ 12,802,733 $ 18,474,449
============ ============
(1) Shares Issued and Redeemed:
Issued ........................................ 179,838 4,281,599
In Lieu of Cash Distributions ................. 91,021 218,088
Redeemed ...................................... (837,615) (5,965,511)
------------ ------------
Net Decrease from Shares Issued and Redeemed .. (566,756) (1,465,824)
============ ============
The accompanying notes are an integral part of the financial statements.
42
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UAM FUNDS McKEE DOMESTIC EQUITY PORTFOLIO
--------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Year Year
Ended Ended
October 31, October 31,
2000 1999
------------- -------------
Increase (Decrease) in Net Assets
Operations:
Net Investment Income (Loss) .................. $ (16,408) $ 237,303
Net Realized Gain ............................. 3,581,951 3,977,986
Net Change in Unrealized
Appreciation (Depreciation) ................. (3,774,923) 2,134,232
------------ ------------
Net Increase (Decrease) in Net Assets Resulting
from Operations ............................. (209,380) 6,349,521
------------ ------------
Distributions:
Net Investment Income ......................... (55,421) (215,684)
Net Realized Gain ............................. (3,277,245) (19,716,343)
------------ ------------
Total Distributions ........................... (3,332,666) (19,932,027)
------------ ------------
Capital Share Transactions (1):
Issued ........................................ 2,168,169 8,858,663
In Lieu of Cash Distributions ................. 3,228,788 19,496,011
Redeemed ...................................... (14,365,632) (22,172,949)
------------ ------------
Net Increase (Decrease) from
Capital Share Transactions .................. (8,968,675) 6,181,725
------------ ------------
Total Decrease ............................ (12,510,721) (7,400,781)
------------ ------------
Net Assets:
Beginning of Period ........................... 41,986,717 49,387,498
------------ ------------
End of Period (including undistributed
net investment income of
$0 and $43,200, respectively) ............... $ 29,475,996 $ 41,986,717
============ ============
(1) Shares Issued and Redeemed:
Issued ........................................ 196,813 635,193
In Lieu of Cash Distributions ................. 293,260 1,846,546
Redeemed ...................................... (1,310,554) (1,954,556)
------------ ------------
Net Increase (Decrease) from Shares
Issued and Redeemed ......................... (820,481) 527,183
============ ============
The accompanying notes are an integral part of the financial statements.
43
<PAGE>
UAM FUNDS McKEE INTERNATIONAL EQUITY PORTFOLIO
--------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Year Year
Ended Ended
October 31, October 31,
2000 1999
------------- --------------
Increase (Decrease) in Net Assets
Operations:
Net Investment Income ......................... $ 685,613 $ 1,582,368
Net Realized Gain ............................. 25,997,840 18,260,136
Net Change in Unrealized Appreciation
(Depreciation) on Investments and
Foreign Currency Transactions ............... (30,013,088) 21,624,763
------------- -------------
Net Increase (Decrease) in Net Assets Resulting
from Operations ............................. (3,329,635) 41,467,267
------------- -------------
Distributions:
Net Investment Income ......................... (1,580,781) (1,141,638)
Net Realized Gain ............................. (17,461,421) (4,907,462)
------------- -------------
Total Distributions ........................... (19,042,202) (6,049,100)
------------- -------------
Capital Share Transactions (1):
Issued ........................................ 50,920,263 222,007,586
Redemption Fees-- Note I ...................... 170,674 --
In Lieu of Cash Distributions ................. 18,155,174 5,380,915
Redeemed ...................................... (55,217,292) (224,854,697)
------------- -------------
Net Increase from Capital Share Transactions .. 14,028,819 2,533,804
------------- -------------
Total Increase (Decrease) ................. (8,343,018) 37,951,971
------------- -------------
Net Assets:
Beginning of Period ........................... 172,026,676 134,074,705
------------- -------------
End of Period (including undistributed net
investment income of $18,166
and $714,199, respectively) ................. $ 163,683,658 $ 172,026,676
============= =============
(1) Shares Issued and Redeemed:
Issued ........................................ 3,594,743 17,641,170
In Lieu of Cash Distributions ................. 1,323,892 475,647
Redeemed ...................................... (3,891,871) (17,808,365)
------------- -------------
Net Increase from Shares
Issued and Redeemed ......................... 1,026,764 308,452
============= =============
The accompanying notes are an integral part of the financial statements.
44
<PAGE>
UAM FUNDS McKEE SMALL CAP EQUITY PORTFOLIO
--------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Year Year
Ended Ended
October 31, October 31,
2000 1999
------------- ------------
Increase (Decrease) in Net Assets
Operations:
Net Investment Loss ........................... $ (125,706) $ (149,369)
Net Realized Loss ............................. (5,344,249) (9,021,169)
Net Change in Unrealized Appreciation ......... 3,703,047 9,695,047
------------ ------------
Net Increase (Decrease) in Net Assets Resulting
from Operations ............................. (1,766,908) 524,509
------------ ------------
Distributions:
Net Realized Gain ............................. -- (653,862)
------------ ------------
Total Distributions ........................... -- (653,862)
------------ ------------
Capital Share Transactions (1):
Issued ........................................ 129,263 2,280,123
In Lieu of Cash Distributions ................. -- 641,141
Redeemed ...................................... (46,239,980) (2,679,727)
------------ ------------
Net Increase (Decrease) from
Capital Share Transactions .................. (46,110,717) 241,537
------------ ------------
Total Increase (Decrease) ................... (47,877,625) 112,184
------------ ------------
Net Assets:
Beginning of Period ........................... 81,563,330 81,451,146
------------ ------------
End of Period (including undistributed
net investment income of
$0 and $0, respectively) .................. $ 33,685,705 $ 81,563,330
============ ============
(1) Shares Issued and Redeemed:
Issued ........................................ 15,024 259,781
In Lieu of Cash Distributions ................. -- 76,236
Redeemed ...................................... (5,464,181) (319,227)
------------ ------------
Net Increase (Decrease) from
Shares Issued and Redeemed .................. (5,449,157) 16,790
============ ============
The accompanying notes are an integral part of the financial statements.
45
<PAGE>
UAM FUNDS McKEE U.S. GOVERNMENT PORTFOLIO
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Selected Per Share Data & Ratios
For a Share Outstanding Throughout Each Period
Years Ended October 31,
-------------------------------------------
2000 1999 1998 1997 1996
------- ------- ------- ------- -------
Net Asset Value,
Beginning of Period ....... $ 9.87 $ 10.93 $ 10.84 $ 10.58 $ 10.76
------- ------- ------- ------- -------
Income from Investment
Operations
Net Investment Income ..... 0.50 0.47 0.62 0.54 0.46
Net Realized
and Unrealized
Gain (Loss) ............. 0.04 (0.72) 0.16 0.25 (0.07)++
------- ------- ------- ------- -------
Total from Investment
Operations .............. 0.54 (0.25) 0.78 0.79 0.39
------- ------- ------- ------- -------
Distributions:
Net Investment Income ..... (0.50) (0.46) (0.62) (0.53) (0.44)
Net Realized Gain ......... (0.10) (0.35) (0.07) -- --
In Excess of
Net Investment Income ... -- -- -- -- (0.13)
------- ------- ------- ------- -------
Total Distributions ..... (0.60) (0.81) (0.69) (0.53) (0.57)
------- ------- ------- ------- -------
Net Asset Value,
End of Period ............. $ 9.81 $ 9.87 $ 10.93 $ 10.84 $ 10.58
======= ======= ======= ======= =======
Total Return ................. 5.75% (2.44)% 7.35% 7.73% 3.77%+
======= ======= ======= ======= =======
Ratios and Supplemental Data
Net Assets, End of Period
(Thousand's) .............. $12,803 $18,474 $36,481 $57,527 $23,118
Ratio of Expenses to Average
Net Assets ................ 1.52% 1.22% 0.96% 0.94% 1.13%
Ratio of Net Investment Income
to Average Net Assets ..... 4.89% 4.63% 5.51% 5.67% 5.39%
Portfolio Turnover Rate ...... 49% 87% 119% 124% 83%
+ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser during the periods indicated.
++ The amount shown for the year ended October 31, 1996 for a share
outstanding throughout the period does not accord with the aggregate net
gains on investments for that period because of the sales and repurchases
of Portfolio shares in relation to fluctuating market value of the
investments of the Portfolio.
The accompanying notes are an integral part of the financial statements.
46
<PAGE>
UAM FUNDS McKEE DOMESTIC EQUITY PORTFOLIO
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Selected Per Share Data & Ratios
For a Share Outstanding Throughout Each Period
<TABLE>
<CAPTION>
Years Ended October 31,
--------------------------------------------
2000 1999 1998 1997 1996
------- ------- ------- -------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period .............. $ 11.64 $ 16.03 $ 16.86 $ 13.38 $ 11.44
------- ------- ------- -------- -------
Income from Investment
Operations
Net Investment Income ............ -- 0.06 0.08 0.10 0.10
Net Realized
and Unrealized
Gain (Loss) .................... (0.10) 1.50 0.46 3.92 2.08
------- ------- ------- -------- -------
Total from Investment
Operations ..................... (0.10) 1.56 0.54 4.02 2.18
------- ------- ------- -------- -------
Distributions:
Net Investment Income ............ (0.02) (0.06) (0.08) (0.10) (0.09)
Net Realized Gain ................ (0.95) (5.89) (1.29) (0.44) (0.15)
------- ------- ------- -------- -------
Total Distributions ............ (0.97) (5.95) (1.37) (0.54) (0.24)
------- ------- ------- -------- -------
Net Asset Value, End of Period ...... $ 10.57 $ 11.64 $ 16.03 $ 16.86 $ 13.38
======= ======= ======= ======== =======
Total Return ........................ (1.24)% 13.76% 3.36% 30.96% 19.31%+
======= ======= ======= ======== =======
Ratios and Supplemental Data
Net Assets, End of Period
(Thousands) ...................... $29,476 $41,987 $49,387 $107,389 $62,170
Ratio of Expenses to Average
Net Assets ....................... 1.16% 1.05% 1.02% 0.94% 0.99%
Ratio of Net Investment Income (Loss)
to Average Net Assets ............ (0.05)% 0.51% 0.46% 0.64% 0.93%
Portfolio Turnover Rate ............. 66% 93% 61% 47% 42%
</TABLE>
+ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser during the periods indicated.
The accompanying notes are an integral part of the financial statements.
47
<PAGE>
UAM FUNDS McKEE INTERNATIONAL EQUITY PORTFOLIO
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Selected Per Share Data & Ratios
For a Share Outstanding Throughout Each Period
Years Ended October 31,
----------------------------------------------
2000 1999 1998 1997 1996
-------- -------- -------- -------- -------
Net Asset Value,
Beginning of Period ....... $ 14.04 $ 11.23 $ 12.42 $ 10.55 $ 10.03
-------- -------- -------- -------- -------
Income from Investment
Operations
Net Investment Income ..... 0.05 0.11 0.12 0.11 0.09
Net Realized
and Unrealized
Gain (Loss) ............. (0.17) 3.20 (0.03) 2.01 0.73
-------- -------- -------- -------- -------
Total from Investment
Operations .............. (0.12) 3.31 0.09 2.12 0.82
-------- -------- -------- -------- -------
Redemption Fees .............. 0.01 -- -- -- --
-------- -------- -------- -------- -------
Distributions:
Net Investment Income ..... (0.13) (0.09) (0.11) (0.11) (0.09)
Net Realized Gain ......... (1.47) (0.41) (1.17) (0.14) (0.21)
-------- -------- -------- -------- -------
Total Distributions ..... (1.60) (0.50) (1.28) (0.25) (0.30)
-------- -------- -------- -------- -------
Net Asset Value,
End of Period ............. $ 12.33 $ 14.04 $ 11.23 $ 12.42 $ 10.55
======== ======== ======== ======== =======
Total Return ................. (1.69)% 30.33% 1.18% 20.31% 8.29%
======== ======== ======== ======== =======
Ratios and Supplemental Data
Net Assets, End of
Period (Thousands) ........ $163,684 $172,027 $134,075 $103,050 $91,224
Ratio of Expenses
to Average Net Assets .... 1.02% 1.02% 1.00% 0.98% 1.01%
Ratio of Net Investment
Income to Average
Net Assets ............... 0.37% 1.05% 1.08% 0.95% 0.92%
Portfolio Turnover Rate ...... 60% 40% 20% 29% 9%
The accompanying notes are an integral part of the financial statements.
48
<PAGE>
UAM FUNDS McKEE INTERNATIONAL EQUITY PORTFOLIO
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Selected Per Share Data & Ratios
For a Share Outstanding Throughout Each Period
<TABLE>
<CAPTION>
November 4
Year Ended Year Ended 1997* to
October 31, October 31, October 31,
2000 1999 1998
----------- ----------- -----------
<S> <C> <C> <C>
Net Asset Value,
Beginning of Period ........................... $ 8.46 $ 8.46 $ 10.00
------- ------- -------
Income from Investment
Operations
Net Investment Loss ........................... (0.03) (0.02) (0.01)
Net Realized and Unrealized Gain (Loss) ....... (0.40) 0.09 (1.52)
------- ------- -------
Total from Investment Operations ................. (0.43) 0.07 (1.53)
------- ------- -------
Distributions:
Net Realized Gain ............................. -- (0.07) (0.01)
------- ------- -------
Total Distributions .............................. -- (0.07) (0.01)
------- ------- -------
Net Asset Value, End of Period ................ $ 8.03 $ 8.46 $ 8.46
======= ======= =======
Total Return ..................................... (5.08)%+ 0.81% (15.36)%***
======= ======= =======
Ratios and Supplemental Data
Net Assets, End of Period (Thousands) ............ $33,686 $81,563 $81,451
Ratio of Expenses to Average Net Assets .......... 1.45% 1.26% 1.27%**
Ratio of Net Investment Loss to
Average Net Assets ............................ (0.57)% (0.18)% (0.12)%**
Portfolio Turnover Rate .......................... 102% 53% 5%
</TABLE>
* Commencement of Operations
** Annualized
*** Not Annualized
+ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser during the periods indicated.
The accompanying notes are an integral part of the financial statements.
49
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UAM FUNDS McKEE PORTFOLIOS
--------------------------------------------------------------------------------
NOTES TO THE FINANCIAL STATEMENTS
UAM Funds, Inc., UAM Funds, Inc. II and UAM Funds Trust (collectively the
"UAM Funds") are registered under the Investment Company Act of 1940, as
amended. The McKee U.S. Government Portfolio, McKee Domestic Equity Portfolio,
McKee International Equity Portfolio and McKee Small Cap Equity Portfolio (the
"Portfolios"), portfolios of UAM Funds, Inc., are diversified (except for the
McKee U.S. Government Portfolio which is non-diversified), open-end management
investment companies. At October 31, 2000, the UAM Funds were comprised of 49
active portfolios. The information presented in the financial statements
pertains only to the Portfolios. The objective of the McKee Portfolios is as
follows:
McKee U.S. Government Portfolio seeks to achieve a high level of current
income consistent with preservation of capital by investing primarily in
U.S. Treasury and Government agency securities.
McKee Domestic Equity Portfolio seeks to achieve a superior long-term total
return over a market cycle by investing primarily in equity securities of
U.S. issuers.
McKee International Equity Portfolio seeks to achieve a superior long-term
total return over a market cycle by investing primarily in the equity of
non-U.S. issuers.
McKee Small Cap Equity Portfolio seeks to achieve a superior long-term
total return by investing primarily in the equity securities of small
companies.
Effective May 10, 2000, the McKee Small Cap Equity Portfolio's prospectus
was revised to permit the portfolio to invest, under normal circumstances,
at least 65% of its assets in companies with small market capitalizations
at the time of initial purchase.
The McKee Small Cap Equity Portfolio considers a company to have a small
market capitalization when its market capitalization is less than $1
billion or when its market capitalization falls within the market
capitalization range of the Russell 2000 Index.
A. Significant Accounting Policies: The following significant accounting
policies are in conformity with accounting principles generally accepted in the
United States of America. Such policies are consistently followed by the
Portfolios in the preparation of their financial statements. Accounting
principles generally accepted in the United States of America may require
Management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results may differ from
those estimates.
50
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UAM FUNDS McKEE PORTFOLIOS
--------------------------------------------------------------------------------
1. Security Valuation: Investments for which market quotations are
readily available are stated at market value, which is determined using the
last reported sale price from the exchange where the security is primarily
traded. If no sales are reported, as in the case of some securities traded
over-the-counter, the market value is determined using the last reported
bid price. Fixed income securities are stated on the basis of valuation
provided by brokers and/or a pricing service which use information with
respect to transactions in fixed income securities, quotations from
dealers, market transactions in comparable securities and various
relationships between securities in determining value. Securities quoted in
foreign currencies are translated into U.S. dollars at the current exchange
rate. The converted value is based on the bid price of the foreign currency
against U.S. dollar quoted by a pricing vendor. Short-term investments with
maturities of sixty days or less at time of purchase are valued at
amortized cost, if it approximates market value. The value of other assets
and securities for which no quotations are readily available are stated at
fair value following procedures approved by the Board of Directors.
2. Federal Income Taxes: It is each Portfolio's intention to qualify as
a regulated investment company under Subchapter M of the Internal Revenue
Code and to distribute all of its taxable income. Accordingly, no provision
for Federal income taxes is required in the financial statements.
The McKee International Equity Portfolio may be subject to taxes
imposed by countries in which it invests. Such taxes are generally based on
either income or gains earned or repatriated. The McKee International
Equity Portfolio accrues and applies such taxes to net investment income,
net realized gains and net unrealized gains as income and/or capital gains
are earned.
3. Repurchase Agreements: In connection with transactions involving
repurchase agreements, the Portfolios' custodian bank takes possession of
the underlying securities ("collateral"), the value of which exceeds the
principal amount of the repurchase transaction, including accrued interest.
To the extent that any repurchase transaction exceeds one business day, the
value of the collateral is monitored on a daily basis to determine the
adequacy of the collateral. In the event of default on the obligation to
repurchase, each Portfolio has the right to liquidate the collateral and
apply the proceeds in satisfaction of the obligation. In the event of
default or bankruptcy by the counterparty to the agreement, realization
and/or retention of the collateral or proceeds may be subject to legal
proceedings.
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the UAM Funds may transfer their daily uninvested cash balances
into a joint trading account which invests in one or more repurchase
51
<PAGE>
UAM FUNDS McKEE PORTFOLIOS
--------------------------------------------------------------------------------
agreements. This joint repurchase agreement is covered by the same
collateral requirements as discussed above.
4. Foreign Currency Translation: The books and records of the McKee
International Equity Portfolio are maintained in U.S. dollars. Investment
securities and other assets and liabilities denominated in a foreign
currency are translated into U.S. dollars on the date of valuation. The
McKee International Equity Portfolio does not isolate that portion of
realized or unrealized gains and losses resulting from changes in the
foreign exchange rate from fluctuations arising from changes in the market
prices of the securities. These gains and losses are included in net
realized and unrealized gains and losses on investments on the statement of
operations. Net realized and unrealized gains and losses on foreign
currency transactions represent net foreign exchange gains or losses from
forward foreign currency exchange contracts, disposition of foreign
currencies, currency gains or losses realized between trade and settlement
dates on securities transactions and the difference between the amount of
the investment income and foreign withholding taxes recorded on the McKee
International Equity Portfolio's books and the U.S. dollar equivalent
amounts actually received or paid.
5. Forward Foreign Currency Exchange Contracts: The McKee International
Equity Portfolio may enter into forward foreign currency exchange contracts
to protect the value of securities held and related receivables and
payables against changes in future foreign exchange rates. A forward
currency contract is an agreement between two parties to buy and sell
currency at a set price on a future date. The market value of the contract
will fluctuate with changes in currency exchange rates. The contract is
marked-to-market daily using the current forward rate and the change in
market value is recorded by the McKee International Equity Portfolio as
unrealized gain or loss. The McKee International Equity Portfolio
recognizes realized gains or losses when the contract is closed, equal to
the difference between the value of the contract at the time it was opened
and the value at the time it was closed. Risks may arise from the
unanticipated movements in the value of a foreign currency relative to the
U.S. dollar. Risks may also arise upon entering into these contracts from
the potential inability of counterparties to meet the terms of their
contracts and are generally limited to the amount of unrealized gain on the
contracts, if any, at the date of default.
6. Distributions to Shareholders: Each Portfolio will distribute
substantially all of its net investment income quarterly. Any realized net
capital gains will be distributed annually. All distributions are recorded
on ex-dividend date.
52
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UAM FUNDS McKEE PORTFOLIOS
--------------------------------------------------------------------------------
The amount and character of income and capital gain distributions to be
paid are determined in accordance with Federal income tax regulations,
which may differ from accounting principles generally accepted in the
United States of America. These differences are primarily due to differing
book and tax treatments in the timing of the recognition of gains or losses
on investments and foreign currency transactions.
Permanent book and tax differences relating to shareholder
distributions may result in reclassifications to undistributed net
investment income (loss), accumulated net realized gain (loss) and paid in
capital.
Permanent book and tax basis differences relating to shareholder
distributions, differing book and tax treatments for foreign currency
transactions, and for the timing of the recognition of gains or losses on
investments resulted in reclassifications as follows:
Undistributed
Undistributed Capital Paid in
McKee Portfolios Net Income Gain Capital
---------------- ------------- ------------- -----------
U.S. Government $ (3,916) $ 3,916 $ --
Domestic Equity 28,629 (28,629) --
International Equity 199,135 (199,135) --
Small Cap Equity 125,706 -- (125,706)
Permanent book-tax differences, if any, are not included in ending
undistributed net investment income (loss) for the purpose of calculating
net investment income (loss) per share in the financial highlights.
7. Other: Security transactions are accounted for on trade date, the
date the trade is executed. Costs used in determining realized gains and
losses on the sale of investment securities are based on the specific
identification method. Dividend income is recorded on the ex-dividend date,
except that certain dividends from foreign securities are recorded as soon
as the McKee International Equity Portfolio is informed of the ex-dividend
date. Interest income is recognized on the accrual basis. Discounts and
premiums on securities purchased are amortized using the scientific
interest method, which approximates the effective method. Most expenses of
the UAM Funds can be directly attributed to a particular portfolio.
Expenses which cannot be directly attributed are apportioned among the
portfolios of the UAM Funds based on their relative net assets. Custodian
fees for the Portfolios are shown gross of expense offsets, if any, for
custodian balance credits.
B. Investment Advisory Services: Under the terms of an investment advisory
agreement, C.S. McKee & Co., Inc. (the "Adviser"), a subsidiary of United Asset
Management Corporation ("UAM"), provides investment advisory services to each
Portfolio at a fee calculated at an annual rate of 0.45%, 0.65%, 0.70% and 1.00%
of
53
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UAM FUNDS McKEE PORTFOLIOS
--------------------------------------------------------------------------------
average daily net assets for the McKee U.S. Government, McKee Domestic Equity,
McKee International Equity and McKee Small Cap Equity Portfolios, respectively.
The Adviser has voluntarily agreed to waive a portion of its advisory fees and
to assume expenses, if necessary, in order to keep the McKee Small Cap
Portfolio's total annual operating expenses, after the effects of expense offset
arrangements, from exceeding 1.75% of average daily net assets. Effective May
10, 2000, the Board of Directors of the UAM funds approved an amendment to the
McKee Small Cap Equity Portfolio's prospectus to permit the Adviser to invest at
least 65% of total assets of the portfolio in securities with market
capitalization of less than $1 billion or within the range of the Russell 2000
Index, the portfolio's performance benchmark. Prior to that date, the prospectus
limited holdings in securities with market capitalization of less than $1
billion to at least 65% of total assets. From January 19, 2000 through May 10,
2000 the Adviser purchased securities in excess of such limitation in the McKee
Small Cap Equity Portfolio. Realized gains on such securities disposed of during
the period were $72,115. The cost of such securities held as of May 10, 2000 was
$30,076,380 with a market value of $24,452,210. Subsequent to May 10, 2000,
there were significant increases in the market value of such securities. On June
27, 2000, at the request of the Board of Directors, the Adviser agreed to waive
fees with respect to such Portfolio in the amount of $151,000. Old Mutual, Plc.
gained control of United Asset Management on Sept. 26, 2000.
C. Administrative Services: UAM Fund Services, Inc. (the "Administrator"),
a wholly-owned subsidiary of UAM, provides and oversees administrative, fund
accounting, dividend disbursing, shareholder servicing and transfer agent
services to the Portfolios under a Fund Administration Agreement (the
"Agreement"). The Administrator has entered into separate Service Agreements
with SEI Investments Mutual Funds Services ("SEI"), a wholly-owned subsidiary of
SEI Investments Company, DST Systems, Inc. ("DST"), and UAM Shareholder Service
Center ("UAMSSC"), an affiliate of UAM, to assist in providing certain services
to the Portfolios.
Pursuant to the Agreement, the Portfolios pay the Administrator 0.093% for
International Equity, 0.073% for U.S. Government, Domestic Equity and Small Cap
Equity per annum of the average daily net assets of the Portfolios, an annual
base fee of $72,500 per Portfolio, and a fee based on the number of active
shareholder accounts.
For the period ended October 31, 2000, the Administrator earned the
following amounts from the Portfolios and paid the following to SEI, UAMSSC and
DST for their services:
54
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UAM FUNDS McKEE PORTFOLIOS
--------------------------------------------------------------------------------
Portion Portion Portion
Administrative Paid to Paid to Paid to
McKee Portfolios Fees SEI UAMSSC DST
---------------- -------------- ------- ------- -------
U.S. Government Portfolio ... $ 91,396 $ 40,277 $8,972 $16,549
Domestic Equity ............. 107,381 46,304 9,308 16,754
International Equity ........ 256,555 89,996 13,486 17,362
Small Cap Equity ............ 115,076 49,568 9,596 15,537
D. Custodian: The Chase Manhattan Bank is custodian for the Portfolios'
assets and the assets are held in accordance with the custodian agreement. As a
part of the custodian agreement, the custodian has a lien on the securities of
the Portfolios to cover any advances made by the custodian to the Portfolios.
E. Distribution Services: UAM Fund Distributors, Inc. (the "Distributor "),
a wholly-owned subsidiary of UAM, distributes the shares of the Portfolios.
The Distributor does not receive any fee or other compensation with respect to
the Portfolios.
F. Directors' Fees: Each Director, who is not an officer or affiliated
person, receives $3,000 per meeting attended plus reimbursement of expenses
incurred in attending Board meetings, which is allocated proportionally among
the active portfolios of UAM Funds, plus a quarterly retainer of $200 for each
active portfolio of the UAM Funds.
G. Shareholder Servicing Fees: Certain brokers, dealers, trust companies
and other financial representatives receive compensation from the UAM Funds for
providing a variety of services, including record keeping and transaction
processing. Such fees are based on the assets of the UAM Funds that are serviced
by the financial representative.
H. Purchases and Sales: For the period ended October 31, 2000, purchases
and sales of investment securities other than long-term U.S. Government and
agency securities and short-term securities were:
McKee Portfolios Purchases Sales
---------------- ----------- -----------
U.S. Government .............................. $ 1,046,442 $ 2,511,702
Domestic Equity .............................. 23,677,497 39,198,039
International Equity ......................... 107,674,295 116,971,998
Small Cap Equity ............................. 48,745,192 91,596,865
Purchases and sales of long-term U.S. Government securities were $5,691,095 and
$9,818,515 respectively, for the McKee U.S. Government Portfolio. There were no
purchases or sales of long-term U.S. Government securities for the McKee
Domestic Equity, McKee International Equity or the McKee Small Cap Equity
Portfolios.
55
<PAGE>
UAM FUNDS McKEE PORTFOLIOS
--------------------------------------------------------------------------------
I. Line of Credit: The Portfolios, along with certain other portfolios of
UAM Funds, collectively entered into an agreement which enables them to
participate in a $100 million unsecured line of credit with several banks.
Borrowings will be made solely to temporarily finance the repurchase of capital
shares. Interest is charged to each participating portfolio based on its
borrowings at a rate per annum equal to the Federal Funds rate plus 0.50%. In
addition, a commitment fee of 0.09% per annum, payable at the end of each
calendar quarter, is accrued by each participating portfolio based on its
average daily unused portion of the line of credit. For the year ended October
31, 2000, the Portfolios had no borrowings under the agreement.
J. Other: At October 31, 2000, the percentage of total shares outstanding
held by record shareholders each owning 10% or greater of the aggregate total
shares outstanding for each Portfolio was as follows:
No. of %
McKee Portfolios Shareholders Ownership
---------------- ------------ ---------
U.S. Government ............................... 1 35%
Domestic Equity ............................... 1 25%
International Equity .......................... 2 28%
Small Cap Equity .............................. 3 58%
At October 31, 2000, the net assets of the McKee International Equity
Portfolio were substantially comprised of foreign denominated securities and/or
currency. Changes in currency exchange rates will affect the value of and
investment income from such securities and currency.
Foreign security and currency transactions may involve certain
considerations and risks not typically associated with those of U.S. dollar
denominated transactions as a result of, among other factors, the possibly lower
level of governmental supervision and regulation of foreign securities markets
and the possibility of political or economic instability.
Effective November 1, 1999, the Board of Directors of UAM Funds, Inc.
approved a 1.00% redemption fee on Institutional Class shares of the McKee Small
Cap Portfolio, the McKee International Equity Portfolio and the McKee U.S.
Government Portfolio. For the year ended October 31, 2000 the McKee
International Equity Portfolio retained redemption fees in the amount of
$170,674.
At October 31, 2000, the McKee U.S. Government Portfolio and the McKee
Small Cap Equity Portfolio had available a capital loss carryover for Federal
income tax purposes of approximately $449,209 and $14,235,417, respectively. The
McKee U.S. Government's capital loss carryover of $499,209 will expire on
October 31, 2008. For the McKee Small Cap Equity Portfolio, $9,021,169 will
expire on October 31, 2007 and $5,214,248 will expire on October 31, 2008.
56
<PAGE>
UAM FUNDS McKEE PORTFOLIOS
--------------------------------------------------------------------------------
On December 14, 2000, the Board of Directors of UAM Funds, Inc. approved the
liquidation of McKee U.S. Government Portfolio pending shareholder approval at a
special meeting of shareholders to be held on January 29, 2001.
57
<PAGE>
UAM FUNDS McKEE PORTFOLIOS
--------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
UAM Funds, Inc. and Shareholders of
McKee U.S. Government Portfolio
McKee Domestic Equity Portfolio
McKee International Portfolio
McKee Small Cap Equity Portfolio
In our opinion, the accompanying statements of assets and liabilities, including
the portfolios of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of McKee U.S. Government Portfolio,
McKee Domestic Equity Portfolio, McKee International Portfolio and McKee Small
Cap Equity Portfolio (the "Portfolios"), each a portfolio of UAM Funds Inc., at
October 31, 2000, and the results of each of their operations, the changes in
each of their net assets and the financial highlights for the periods indicated,
in conformity with accounting principles generally accepted in the United States
of America. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Portfolio's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at October 31, 2000 by
correspondence with the custodian, provide a reasonable basis for our opinion.
PRICEWATERHOUSECOOPERS LLP
Boston, Massachusetts
December 20, 2000
58
<PAGE>
UAM FUNDS McKEE PORTFOLIOS
--------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION (Unaudited)
Each of the Portfolios designate the following amounts as long-term capital gain
dividends for the purpose of the dividend paid deduction on their Federal income
tax return:
Long
McKee Portfolios Term
---------------- -----------
U.S. Government ............................................. $ 165,870
Domestic Equity ............................................. 2,696,770
International Equity ........................................ 17,821,060
Foreign taxes during the fiscal year ended October 31, 2000 for the McKee
International Equity Portfolio amounted to $193,708 are expected to be passed
through to the shareholders as foreign tax credits on Form 1099-Dividend for the
year ending December 31, 2000, which shareholders of the McKee International
Equity Portfolio will receive in late January, 2001. In addition, for the year
ended October 31, 2000, gross income derived from sources within foreign
countries amounted to $2,562,696 for the McKee International Equity Portfolio.
For the year ended October 31, 2000, the percentage of dividends paid that
qualify for the 70% dividend received deduction for corporate shareholders was
81.3% for the McKee Domestic Equity Portfolio.
For the year ended October 31, 2000, the percentage of income earned from direct
Treasury obligations for the McKee U.S. Government Portfolio was 41.1%.
The accompanying notes are an integral part of the financial statements.
59
<PAGE>
NOTES
<PAGE>
UAM FUNDS McKEE PORTFOLIOS
--------------------------------------------------------------------------------
OFFICERS AND DIRECTORS
James F. Orr, III William H. Park
Director, President and Chairman Vice President
John T. Bennett, Jr. Gary L. French
Director Treasurer
Nancy J. Dunn Robert J. Della Croce
Director Assistant Treasurer
Philip D. English Linda T. Gibson, Esq.
Director Secretary
William A. Humenuk Martin J. Wolin, Esq.
Director Assistant Secretary
James P. Pappas Theresa DelVecchio
Vice President Assistant Secretary
--------------------------------------------------------------------------------
UAM Funds
P.O. Box 219081
Kansas City, MO 64121
(toll free)
1-877-UAM-LINK (826-5465)
www.uam.com
Investment Adviser
C.S. McKee & Co., Inc.
One Gateway Center
Pittsburgh, PA 15222
Distributor
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
-------------------------------------------
This report has been prepared for
shareholders and may be distributed to
others only if preceded or accompanied by
a current prospectus.
-------------------------------------------
<PAGE>
[LOGO OF UAM FUNDS]
Supplement dated October 27, 2000, to the Annual Report of the Financials for
the McKee Domestic Equity Portfolio.
The Annual Report is hereby supplemented to reflect the following:
On October 27, 2000, there was a Special Meeting of Shareholders of the
Fund, at which the shareholders of the Portfolio voted on the listed
proposals. The following were the results of the vote:
<TABLE>
<CAPTION>
For: Against: Abstain:
---------- -------- --------
<S> <C> <C> <C>
1.To elect the Trustees/Directors.
01) John T. Bennett, Jr.......................... 19,010,168 -- 451,579
02) Nancy J. Dunn................................ 19,032,354 -- 429,393
03) William A. Humenuk........................... 19,032,469 -- 429,278
04) Philip D. English............................ 19,032,469 -- 429,278
05) James F. Orr, III............................ 19,030,371 -- 431,371
2.To approve the proposed change of the investment objective of the Fund from
fundamental to non-fundamental.
1,686,906 -- 110,664
3.To approve the proposed changes to the Fund's fundamental investment
restrictions.
a) Diversification of Investments:............... 1,686.906 -- 110,664
b) Borrowing:.................................... 1,686,906 -- 110,664
c) Issuing of Senior Securities:................. 1,686,906 -- 110,664
d) Underwriting:................................. 1,686,906 -- 110,664
e) Industry Concentration:....................... 1,686,906 -- 110,664
f) Investment in Real Estate:.................... 1,686,906 -- 110,664
g) Commodities:.................................. 1,686,906 -- 110,664
h) Lending:...................................... 1,686,906 -- 110,664
i) Illiquid Securities:.......................... 1,686,906 -- 110,664
j) Control or Management:........................ 1,686,906 -- 110,664
k) Unseasoned Issuers:........................... 1,686,906 -- 110,664
l) Borrowing exceeding 5%:....................... 1,686,906 -- 110,664
m) Pledging:..................................... 1,686,906 -- 110,664
n) Margin Purchases and Short Sales:............. 1,686,906 -- 110,664
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
For: Against: Abstain:
---------- --------- --------
<S> <C> <C> <C>
o) Directors' Ownership of Shares:............. 1,686,906 -- 110,664
p) Interest in Oil, Gas or Other Mineral
Exploration or Development Programs:........ 1,686,906 -- 110,664
q) Futures and Options:........................ 1,686,906 -- 110,664
4.To ratify the selection of PricewaterhouseCoopers LLP as the independent
auditors.
1,690,485 -- 110,664
5.To approve an Interim Investment Advisory Agreement between each Fund and
its investment adviser.
1,690,485 -- 110,664
6.To approve an Investment Advisory Agreement between the Fund and its
investment adviser, subject to completion of the merger between United Asset
Management Corporation and Old Mutual Plc.
1,690,485 -- 110,664
Supplement dated October 27, 2000, to the Annual Report of the Financials for
the McKee International Equity Portfolio.
The Annual Report is hereby supplemented to reflect the following:
On October 27, 2000, there was a Special Meeting of Shareholders of the
Fund, at which the shareholders of the Portfolio voted on the listed
proposals. The following were the results of the vote:
<CAPTION>
For: Against: Abstain:
---------- --------- --------
<S> <C> <C> <C>
1.To elect the Trustees/Directors.
06) John T. Bennett, Jr........................ 19,010,168 -- 451,579
07) Nancy J. Dunn.............................. 19,032,354 -- 429,393
08) William A. Humenuk......................... 19,032,469 -- 429,278
09) Philip D. English.......................... 19,032,469 -- 429,278
10) James F. Orr, III.......................... 19,030,371 -- 431,371
2.To approve the proposed change of the investment objective of the Fund from
fundamental to non-fundamental.
4,598,408 1,202,403 98,617
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
For: Against: Abstain:
--------- -------- --------
3.To approve the proposed changes to the Fund's fundamental investment
restrictions.
<S> <C> <C> <C>
a) Diversification of Investments:............... 5,800,811 -- 98,617
b) Borrowing:.................................... 5,800,811 -- 98,617
c) Issuing of Senior Securities:................. 5,800,811 -- 98,617
d) Underwriting:................................. 5,800,811 -- 98,617
e) Industry Concentration:....................... 5,800,811 -- 98,617
f) Investment in Real Estate:.................... 5,800,811 -- 98,617
g) Commodities:.................................. 5,800,811 -- 98,617
h) Lending:...................................... 5,800,811 -- 98,617
i) Illiquid Securities:.......................... 5,800,811 -- 98,617
j) Control or Management:........................ 5,800,811 -- 98,617
k) Unseasoned Issuers:........................... 5,800,811 -- 98,617
l) Borrowing exceeding 5%:....................... 5,800,811 -- 98,617
m) Pledging:..................................... 5,800,811 -- 98,617
n) Margin Purchases and Short Sales:............. 5,800,811 -- 98,617
o) Directors' Ownership of Shares:............... 5,800,811 -- 98,617
p) Interest in Oil, Gas or Other Mineral
Exploration or Development Programs:.......... 5,800,811 -- 98,617
q) Futures and Options:.......................... 5,800,811 -- 98,617
4.To ratify the selection of PricewaterhouseCoopers LLP as the independent
auditors.
6,092,578 1,521 19,589
5.To approve an Interim Investment Advisory Agreement between each Fund and
its investment adviser.
6,094,099 -- 19,589
6.To approve an Investment Advisory Agreement between the Fund and its
investment adviser, subject to completion of the merger between United Asset
Management Corporation and Old Mutual Plc.
6,094,099 -- 19,589
</TABLE>
Supplement dated October 27, 2000, to the Annual Report of the Financials for
the McKee Small Cap Equity Portfolio.
The Annual Report is hereby supplemented to reflect the following:
<PAGE>
On October 27, 2000, there was a Special Meeting of Shareholders of the
Fund, at which the shareholders of the Portfolio voted on the listed
proposals. The following were the results of the vote:
<TABLE>
<CAPTION>
For: Against: Abstain:
---------- --------- --------
<S> <C> <C> <C>
1.To elect the Trustees/Directors.
11) John T. Bennett, Jr........................ 19,010,168 -- 451,579
12) Nancy J. Dunn.............................. 19,032,354 -- 429,393
13) William A. Humenuk......................... 19,032,469 -- 429,278
14) Philip D. English.......................... 19,032,469 -- 429,278
15) James F. Orr, III.......................... 19,030,371 -- 431,371
2.To approve the proposed change of the investment objective of the Fund from
fundamental to non-fundamental.
2,207,999 1,347,451 --
3.To approve the proposed changes to the Fund's fundamental investment
restrictions.
a) Diversification of Investments:............. 3,555,449 -- --
b) Borrowing:.................................. 3,555,449 -- --
c) Issuing of Senior Securities:............... 3,555,449 -- --
d) Underwriting:............................... 3,555,449 -- --
e) Industry Concentration:..................... 3,555,449 -- --
f) Investment in Real Estate:.................. 3,555,449 -- --
g) Commodities:................................ 3,555,449 -- --
h) Lending:.................................... 3,555,449 -- --
i) Illiquid Securities:........................ 3,555,449 -- --
j) Control or Management:...................... 3,555,449 -- --
k) Unseasoned Issuers:......................... 3,555,449 -- --
l) Borrowing exceeding 5%:..................... 3,555,449 -- --
m) Pledging:................................... 3,555,449 -- --
n) Margin Purchases and Short Sales:........... 3,555,449 -- --
o) Directors' Ownership of Shares:............. 3,555,449 -- --
p) Interest in Oil, Gas or Other Mineral
Exploration or Development Programs:........ 3,555,449 -- --
q) Futures and Options:........................ 3,555,449 -- --
4.To ratify the selection of PricewaterhouseCoopers LLP as the independent
auditors.
3,648,780 -- --
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
For: Against: Abstain:
---------- -------- --------
5.To approve an Interim Investment Advisory Agreement between each Fund and
its investment adviser.
<S> <C> <C> <C>
3,648,780 -- --
6.To approve an Investment Advisory Agreement between the Fund and its
investment adviser, subject to completion of the merger between United Asset
Management Corporation and Old Mutual Plc.
3,648,780 -- --
Supplement dated October 27, 2000, to the Annual Report of the Financials for
the McKee U.S. Government Portfolio.
The Annual Report is hereby supplemented to reflect the following:
On October 27, 2000, there was a Special Meeting of Shareholders of the
Fund, at which the shareholders of the Portfolio voted on the listed
proposals. The following were the results of the vote:
<CAPTION>
For: Against: Abstain:
---------- -------- --------
<S> <C> <C> <C>
1.To elect the Trustees/Directors.
16) John T. Bennett, Jr.......................... 19,010,168 -- 451,579
17) Nancy J. Dunn................................ 19,032,354 -- 429,393
18) William A. Humenuk........................... 19,032,469 -- 429,278
19) Philip D. English............................ 19,032,469 -- 429,278
20) James F. Orr, III............................ 19,030,371 -- 431,371
2.To approve the proposed change of the investment objective of the Fund from
fundamental to non-fundamental.
805,119 -- --
3.To approve the proposed changes to the Fund's fundamental investment
restrictions.
a) Diversification of Investments:............... 805,119 -- --
b) Borrowing:.................................... 805,119 -- --
c) Issuing of Senior Securities:................. 805,119 -- --
d) Underwriting:................................. 805,119 -- --
e) Industry Concentration:....................... 805,119 -- --
f) Investment in Real Estate:.................... 805,119 -- --
g) Commodities:.................................. 805,119 -- --
h) Lending:...................................... 805,119 -- --
i) Illiquid Securities:.......................... 805,119 -- --
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
For: Against: Abstain:
------- -------- --------
<S> <C> <C> <C>
j) Control or Management:.......................... 805,119 -- --
k) Unseasoned Issuers:............................. 805,119 -- --
l) Borrowing exceeding 5%:......................... 805,119 -- --
m) Pledging:....................................... 805,119 -- --
n) Margin Purchases and Short Sales:............... 805,119 -- --
o) Directors' Ownership of Shares:................. 805,119 -- --
p) Interest in Oil, Gas or Other Mineral
Exploration or Development Programs:............ 805,119 -- --
q) Futures and Options:............................ 805,119 -- --
4.To ratify the selection of PricewaterhouseCoopers LLP as the independent
auditors.
805,119 -- --
5.To approve an Interim Investment Advisory Agreement between each Fund and
its investment adviser.
805,119 -- --
6.To approve an Investment Advisory Agreement between the Fund and its
investment adviser, subject to completion of the merger between United Asset
Management Corporation and Old Mutual Plc.
805,119 -- --
</TABLE>
[LOGO OF UAM FUNDS]