<PAGE>
File No. 811-08612
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
ON AUGUST 21, 2000
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.______ / /
Post-Effective Amendment No.______ / /
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940
Amendment No. 8 / X /
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MARTIN CURRIE BUSINESS TRUST
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(Exact Name of Registrant as Specified in Charter)
Saltire Court, 20 Castle Terrace, Edinburgh, Scotland EH1 2ES
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(Address of principal executive offices)
011-44-131-229-5252
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(Registrant's telephone number, including area code)
Julian M. C. Livingston
Martin Currie, Inc.
Saltire Court
20 Castle Terrace
Edinburgh
Scotland EH1 2ES
with a copy to:
Steven Johnson J.B. Kittredge, Esq.
Martin Currie Investor Services, Inc. Ropes & Gray
53 Forest Avenue One International Place
Old Greenwich, CT 06870 Boston, Massachusetts 02110
_______________________________________________________________________________
(Name and address of agents for service)
It is proposed that this filing will become effective immediately upon filing in
accordance with Section 8 of the Investment Company Act of 1940 and the rules
thereunder.
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<PAGE>
EXPLANATORY NOTE
This Amendment No. 8 to the Registration Statement has been filed by the
Registrant pursuant to Section 8(b) of the Investment Company Act of 1940, as
amended. However, beneficial interests in the Registrant have not been and will
not be registered under the Securities Act of 1933, as amended (the "1933 Act"),
since such interests have been and will continue to be issued and sold solely in
private transactions which do not involve any "public offering" within the
meaning of Section 4(2) of the 1933 Act. Investments in the Registrant may only
be made by individuals or entities which are "accredited investors" within the
meaning of Regulation D under the 1933 Act. This Amendment No. 8 to the
Registration Statement does not constitute an offer to sell or the solicitation
of an offer to buy any beneficial interests in the Registrant.
<PAGE>
MARTIN CURRIE BUSINESS TRUST
c/o Martin Currie, Inc.
Saltire Court
20 Castle Terrace
Edinburgh, Scotland
United Kingdom EH1 2ES
011-44-131-229-5252
PRIVATE PLACEMENT MEMORANDUM
August 21, 2000
This Private Placement Memorandum concisely describes the information that
investors should know before investing. Please read it carefully and keep it for
future reference.
MCBT ALL COUNTRIES WORLD EX U.S. FUND MCBT ASIA PACIFIC EX JAPAN FUND
MCBT OPPORTUNISTIC EAFE FUND MCBT EMEA FUND
MCBT GLOBAL EMERGING MARKETS FUND MCBT JAPAN SMALL COMPANIES FUND
Martin Currie Business Trust (the Trust) is an open-end, management
investment company consisting of six diversified series (each a Fund) offering
portfolios with different objectives and strategies. Each Fund's manager is
Martin Currie, Inc. (the Manager).
In making an investment decision, investors must rely on their own
examination of the issuer and the terms of the offering, including the merits
and risks involved. These securities have not been approved or disapproved by
the Securities and Exchange Commission or any other federal or state
securities commission or regulatory authority, nor have any of these
authorities passed upon the accuracy or adequacy of this document. Any
representation to the contrary is a criminal offence.
These securities have not been registered under the Securities Act of 1933,
as amended, or the securities laws of any state, and may not be transferred or
resold unless so registered or exempt from registration. However, the securities
are redeemable as described in this Private Placement Memorandum. In certain
cases, investors may be redeemed "in kind" and receive upon redemption portfolio
securities held by a Fund in lieu of cash. In that case, an investor will incur
costs upon selling the securities so distributed.
No person has been authorized to make any representations or provide any
information with respect to these securities except the information as is
contained in this Private Placement Memorandum, in the Trust's Statement of
Additional Information (SAI) or in other materials approved by the Trust. No
sales made via this document shall under any circumstances create an implication
that there has been no change in any matters discussed in this document or in
the SAI since the date above.
<PAGE>
TABLE OF CONTENTS
FUND SUMMARIES.................................................................1
INFORMATION ABOUT THE FUNDS' INVESTMENT STRATEGIES AND RELATED RISKS..........12
MORE INFORMATION ABOUT THE FUNDS' INVESTMENT STRATEGIES AND RISKS.............18
PURCHASE OF SHARES............................................................29
REDEMPTION OF SHARES..........................................................31
DISTRIBUTION AND SERVICING PLANS..............................................32
DETERMINATION OF NET ASSET VALUE..............................................32
DISTRIBUTIONS.................................................................33
TAXES.........................................................................34
MANAGEMENT OF THE TRUST.......................................................35
DESCRIPTION OF THE TRUST AND OWNERSHIP OF SHARES..............................37
ADMINISTRATOR; CUSTODIAN; TRANSFER AND DIVIDEND PAYING AGENT..................38
INDEPENDENT ACCOUNTANTS.......................................................38
LEGAL COUNSEL.................................................................38
SHAREHOLDER INQUIRIES.........................................................38
FINANCIAL HIGHLIGHTS INFORMATION..............................................39
<PAGE>
FUND SUMMARIES
The Trust currently consists of six Funds offering investors a range of
foreign and international investment choices. Each Fund has its own investment
objective and strategies designed to meet its specific goals.
The following is a summary of certain key information about the Funds,
including information about the Funds' investment objectives and strategies,
risks, performance and fees. A further discussion of these and other
strategies and risks appears beginning on pages 12 and 18.
INVESTMENT OBJECTIVES AND PRINCIPAL INVESTMENT STRATEGIES
MCBT ALL COUNTRIES WORLD EX U.S. FUND (the All Countries Fund) seeks
capital appreciation through investment in an international portfolio of equity
securities. Current income will not be a consideration. Under normal conditions,
the Fund will not invest in securities of issuers located in the United States
or its territories. The Fund pursues an "opportunistic" strategy relative to the
Morgan Stanley Capital International All Countries World Free (ex USA) Index
(the MSCI ACWI Index), an index of securities traded in Europe, Canada,
Australia, the Far East and markets located in Latin America and in the emerging
European Middle Eastern and African markets weighted by market capitalisation.
The strategy is opportunistic because the Manager expects to typically invest
more or less in securities traded in a particular country than would be
suggested by the weighting of that country's market capitalisation in the MSCI
ACWI Index.
MCBT OPPORTUNISTIC EAFE FUND (the Opportunistic EAFE Fund) seeks capital
appreciation through investment in an international portfolio of equity
securities. Current income will not be a consideration. Under normal conditions,
the Fund will not invest in securities of issuers located in Canada or the
United States or its territories. The Fund pursues an "opportunistic" strategy
relative to the Morgan Stanley Capital International EAFE Index (the MSCI EAFE
Index), an index of securities traded in Europe, Australia and the Far East
weighted by market capitalisation. The strategy is opportunistic because the
Manager expects to typically invest more or less in securities traded in a
particular country than would be suggested by the weighting of that country's
market capitalisation in the MSCI EAFE Index.
MCBT GLOBAL EMERGING MARKETS FUND (the Global Emerging Markets Fund) seeks
capital appreciation through investment primarily in equity securities of
issuers located in countries with emerging markets and developing economies.
MCBT ASIA PACIFIC EX JAPAN FUND (the Asia Pacific Fund) seeks capital
appreciation through investment primarily in securities of issuers located in
Asian countries other than Japan.
MCBT EMEA FUND (the EMEA Fund) seeks capital appreciation through
investment
<PAGE>
primarily in equity securities of issuers located in the emerging markets and
developing economies in Central and Eastern Europe, the Middle East and
Africa.
MCBT JAPAN SMALL COMPANIES FUND (the Japan Small Companies Fund) seeks
capital appreciation through investment primarily in equity securities of
issuers located in Japan with relatively small equity capitalisation, which
may include companies without wide market recognition. Current income will
not be a consideration.
PRINCIPAL RISKS OF INVESTING IN THE FUNDS
Investors can lose money by investing in any of the Funds. Any of the Funds
may fail to achieve its objective, and no Fund, nor the Trust as a whole, is
intended or is appropriate as a complete investment program. The Trust and the
Funds should be considered as only part of an overall investment strategy.
Each of the Funds is subject to the risk that the value of its
investments will be adversely affected by fluctuations in the financial
markets and that prices overall will decline over short or longer-term
periods.
Because all of the Funds will be invested substantially in foreign
issuers, they will be subject to risks associated with foreign investment
that may result in greater losses and volatility than funds with investments
solely in U.S. companies. This is because the securities markets of many
foreign countries are relatively small, with a limited number of companies
representing a small number of industries. Additionally, foreign securities
issuers are usually not subject to the same degree of regulation as U.S.
issuers. Reporting, accounting and auditing standards of foreign countries
differ, in some cases significantly, from U.S. standards. Also,
nationalization, expropriation or confiscatory taxation, currency blockage,
economic or financial instability or political, diplomatic or legal
developments could adversely affect a Fund's investments. In the event of
nationalization, expropriation or other confiscation, a Fund could lose its
entire investment. These risks are increased for those Funds that invest in
emerging markets or developing economies.
Each of the Funds is subject to the risk that fluctuations in the
exchange rates between the U.S. Dollar and foreign currencies may negatively
affect the value of the Fund's investments.
Many of the Funds may concentrate their investments in particular
geographic regions, and the Japan Small Companies Fund invests most of its
assets in a single country. Events that effect the relevant region or country
will have a greater effect on the relevant Fund than on a fund that is more
geographically diversified, which may result in greater losses and volatility.
Each of the Funds may at times use certain types of investment
derivatives such as options, futures and forwards. The use of these
techniques involves special risks that are discussed in this Private
Placement Memorandum.
2
<PAGE>
The Funds may invest in lower-rated bonds, commonly known as "junk bonds."
Investments of this type are subject to a greater risk of loss of principal and
non-payment of interest. Investors should carefully assess the risks associated
with an investment in the Funds.
PERFORMANCE INFORMATION
The following information provides some indication of the risks of
investing in the Funds. For each of the Funds (other than the All Countries
Fund), the bar chart below shows year-to-year changes in the performance of the
Fund, and the table following the bar chart compares the Fund's performance to
that of a broad measure or measures of market performance. A Fund's past
performance is not necessarily an indication of future performance.
Performance information for the All Countries Fund will be available after
the Fund has completed a full calendar year of operations.
3
<PAGE>
THE OPPORTUNISTIC EAFE FUND
[GRAPHIC OMITTED: vertical bar chart]
CALENDAR YEAR TOTAL RETURNS
------------------------------------------------------
1995 1996 1997 1998 1999
10.26% 10.39% 10.25% 17.31% 36.13%
Year-to-date performance through June 30, 2000 was -6.44%. During the
periods shown in the bar chart, the highest return for a calendar quarter was
24.76% (quarter ending 12/31/99) and the lowest return for a calendar quarter
was -14.26% (quarter ending 9/30/98).
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (for periods ending December 31, 1999)
-------------------------------------------------------------------------------------------------------------------
SINCE
COMMENCEMENT OF
OPERATIONS
1 YEAR 5 YEARS (JULY 1, 1994)
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPPORTUNISTIC EAFE FUND 36.13% 16.47% 14.12%
MORGAN STANLEY CAPITAL INTERNATIONAL EAFE INDEX 27.30 13.15 11.73
-------------------------------------------------------------------------------------------------------------------
</TABLE>
The Fund's performance through April 30, 1996 benefited from the Manager's
agreement to limit the Fund's expenses. The Fund's performance is compared to
the MSCI EAFE Index, an index of securities traded in Europe, Australia and the
Far East weighted by market capitalisation.
4
<PAGE>
THE GLOBAL EMERGING MARKETS FUND
[GRAPHIC OMITTED: vertical bar chart]
CALENDAR YEAR TOTAL RETURNS
------------------------------------------------------
1998 1999
-26.22% 73.43%
Year-to-date performance through June 30, 2000 was -10.33%. During the
periods shown in the bar chart, the highest return for a calendar quarter was
34.24% (quarter ending 12/31/99) and the lowest return for a calendar quarter
was -19.54% (quarter ending 9/30/98).
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (for periods ending December 31, 1999)
--------------------------------------------------------------------------------------------------------------------
SINCE COMMENCEMENT
OF OPERATIONS
1 YEAR (FEBRUARY 14, 1997)
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
GLOBAL EMERGING MARKETS FUND 73.43% 4.03%
MORGAN STANLEY CAPITAL INTERNATIONAL EMERGING MARKETS FREE INDEX 66.41 -0.49
--------------------------------------------------------------------------------------------------------------------
</TABLE>
The Fund's performance is compared to the Morgan Stanley Capital
International Emerging Markets Free Index, an index of securities traded in
emerging European, Middle Eastern, African and Asian markets weighted by market
capitalisation.
5
<PAGE>
THE ASIA PACIFIC FUND
[GRAPHIC OMITTED: vertical bar chart]
CALENDAR YEAR TOTAL RETURNS
------------------------------------------------------
1996 1997 1998 1999
7.39% -71.94% -33.88% 50.25%
Year-to-date performance through June 30, 2000 was -14.10%. During the
periods shown in the bar chart, the highest return for a calendar quarter was
32.85% (quarter ending 6/30/99) and the lowest return for a calendar quarter was
-49.41% (quarter ending 9/30/97).
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (for periods ending December 31, 1999)
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SINCE COMMENCEMENT OF
OPERATIONS
1 YEAR (MARCH 24, 1995)
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASIA PACIFIC FUND 50.25% -21.24%
MORGAN STANLEY CAPITAL INTERNATIONAL ALL COUNTRIES ASIA 46.85 --
PACIFIC FREE (EX JAPAN & INDIA) INDEX
MORGAN STANLEY CAPITAL INTERNATIONAL ALL COUNTRIES ASIA 49.80 2.93
PACIFIC FREE (EX JAPAN) INDEX
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</TABLE>
The Fund's performance through April 30, 1998 benefited from the Manager's
agreement to limit the Fund's expenses. The Fund's performance is compared to
the Morgan Stanley Capital International All Countries Asia Pacific Free
(ex Japan & India) Index, an index of securities traded in Asia Pacific markets
(excluding Japan and India) weighted by market capitalisation. This index is
calculated by Morgan Stanley Capital International specifically for use by the
Fund and is the Fund's principal benchmark. The performance of this index is not
available for periods commencing prior to October 31, 1998. The Fund's
performance is also compared to the Morgan Stanley Capital International All
Countries Asia Pacific Free (ex Japan) Index, an index of securities traded in
Asia Pacific markets (excluding Japan) weighted by market capitalisation.
6
<PAGE>
THE EMEA FUND
[GRAPHIC OMITTED: vertical bar chart]
CALENDAR YEAR TOTAL RETURNS
------------------------------------------------------
1998 1999
-18.46% 55.52%
Year-to-date performance through June 30, 2000 was -11.44%. During the
periods shown in the bar chart, the highest return for a calendar quarter was
36.71% (quarter ending 12/31/99) and the lowest return for a calendar quarter
was -20.96% (quarter ending 9/30/98).
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (for periods ending December 31, 1999)
--------------------------------------------------------------------------------------------------------------------
SINCE COMMENCEMENT
OF OPERATIONS
1 YEAR (JUNE 25, 1997)
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
EMEA FUND 55.52% 9.22%
MORGAN STANLEY CAPITAL INTERNATIONAL EMEA INDEX 71.69 8.51
MORGAN STANLEY CAPITAL INTERNATIONAL EMERGING EUROPE 79.61 18.54
& MIDDLE EAST INDEX
--------------------------------------------------------------------------------------------------------------------
</TABLE>
The Fund's performance is compared to the Morgan Stanley Capital
International EMEA Index, an index of securities traded in emerging markets in
Europe, the Middle East and Africa weighted by market capitalisation. This index
is calculated by Morgan Stanley Capital International specifically for use by
the Fund and is the Fund's principal benchmark. The Fund's performance is also
compared to the Morgan Stanley Capital International Emerging Europe and Middle
East Index, an index of securities traded in emerging markets in Europe and the
Middle East weighted by market capitalisation.
7
<PAGE>
THE JAPAN SMALL COMPANIES FUND
[GRAPHIC OMITTED: vertical bar chart]
CALENDAR YEAR TOTAL RETURNS
------------------------------------------------------
1995 1996 1997 1998 1999
-1.13% -8.64% -24.31% 17.01% 138.54%
Year-to-date performance through June 30, 2000 was -13.93%. During the
periods shown in the bar chart, the highest return for a calendar quarter was
35.60% (quarter ending 9/30/99) and the lowest return for a calendar quarter was
-19.90% (quarter ending 12/31/97).
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (for periods ending December 31, 1999)
-------------------------------------------------------------------------------------------------------------------
SINCE COMMENCEMENT
OF OPERATIONS
1 YEAR 5 YEARS (AUGUST 15, 1994)
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
JAPAN SMALL COMPANIES FUND 138.54% 13.80% 12.94%
TOKYO STOCK EXCHANGE SECOND SECTION INDEX 145.48 4.41 1.78
-------------------------------------------------------------------------------------------------------------------
</TABLE>
The Fund's performance through April 30, 1995 benefited from the Manager's
agreement to limit the Fund's expenses. The Fund's performance is compared to
the Tokyo Stock Exchange Second Section Index, an index of securities traded in
Japan in the second section weighted by market capitalisation.
8
<PAGE>
FEES AND EXPENSES
This table summarizes the fees and expenses investors may pay by investing
in the Funds. Expenses are based on each Fund's last fiscal year, except that
expenses for the All Countries Fund are based on estimates for that Fund's first
full fiscal year.
<TABLE>
<CAPTION>
SHAREHOLDER FEES (fees paid directly from an investor's investment)
--------------------------------------------- -----------------------------------------------------------------------
Maximum Sales Charge (Load)
Imposed on Purchases Redemption Fee
(AS A PERCENTAGE OF THE OFFERING (AS A PERCENTAGE OF THE AMOUNT
PRICE) REDEEMED, IF APPLICABLE)
<S> <C> <C>
ALL COUNTRIES FUND None None
OPPORTUNISTIC EAFE FUND None None
GLOBAL EMERGING MARKETS FUND None None
ASIA PACIFIC FUND None None
EMEA FUND None None
JAPAN SMALL COMPANIES FUND None None
--------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES* (expenses that are deducted from Fund assets)
---------------------------------------------------------------------------------------------------------------------
Total
Annual
Fund Fee Waiver or
Management Other Operating Expense Net
Fees** Expenses Expenses Reimbursement Expenses
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ALL COUNTRIES FUND 1.00% 0.21% 1.21% 0.21% 1.00%
OPPORTUNISTIC EAFE FUND 0.70 0.22 0.92 -- 0.92
GLOBAL EMERGING MARKETS FUND 0.80 0.27 1.07 -- 1.07
ASIA PACIFIC FUND 1.50 0.22 1.72 -- 1.72
EMEA FUND 1.50 0.29 1.79 -- 1.79
JAPAN SMALL COMPANIES FUND 1.00 0.21 1.21 -- 1.21
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
* Reflects the Manager's contractual obligation to limit the All Countries
Fund's expenses through April 30, 2001.
** Each of the Funds has adopted a plan under Rule 12b-1 that permits the
Manager to spend an amount of the Management Fees it collects from the Fund
(up to 0.25% of average monthly net assets per annum) on distribution and
shareholder servicing activities. These amounts are included in, and are
not in addition to, the Management Fees shown in the table.
9
<PAGE>
EXAMPLE
The following example translates the expenses shown in the preceding table
into dollar amounts. By doing this, investors can more easily compare the cost
of investing in the Funds to the cost of investing in other mutual funds. The
example makes certain assumptions. It assumes an investor invests $10,000 in the
relevant Fund for the time periods indicated and redeems all the investor's
shares at the end of those periods. It also assumes a 5% return on investment
each year and that the Funds' operating expenses remain the same.
This example is hypothetical, and an investor's actual costs and returns
may be higher or lower.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ALL COUNTRIES FUND $103 $386 -- --
OPPORTUNISTIC EAFE FUND 94 295 $511 $1,135
GLOBAL EMERGING MARKETS FUND 110 342 593 1,311
ASIA PACIFIC FUND 176 546 940 2,043
EMEA FUND 183 568 977 2,119
JAPAN SMALL COMPANIES FUND 124 386 669 1,473
------------------------------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
SUPPLEMENTAL PERFORMANCE INFORMATION REGARDING THE ASIA PACIFIC FUND
The following information is a supplement to, but is not a substitute for,
the information presented above with respect to the Asia Pacific Fund under
"Fund Summaries - Performance Information."
As of November 1998, the Fund (formerly the MCBT Emerging Asia Fund)
changed its principal investment strategy and performance benchmark. Prior to
that time, the Emerging Asia Fund pursued a strategy of investing primarily
in issuers located in Asian countries with emerging markets and developing
economies. The benchmark against which the Emerging Asia Fund chose to
compare its performance was the Morgan Stanley Capital International Emerging
Free Asia Index, an index of securities traded in emerging Asian markets
weighted by market capitalisation. The principal investment strategy of the
Fund was expanded as of November 1998 to include investment in developed
Asian economies, and the Fund's name and performance benchmark were also
changed accordingly. See "Fund Summaries - Investment Objectives and
Principal Investment Strategies" above and "Information About the Funds'
Investment Strategies and Related Risks" and "More Information About the
Funds' Investment Strategies and Risks" below for more information about the
principal investment strategies of, and risks of investing in, the Fund.
The following table provides some indication of the risks of investing
in the Asia Pacific Fund by presenting the performance of the Fund since the
change in its principal investment strategy from that of the former Emerging
Asia Fund, as described above. Because the performance information presented
in the table does not include information for periods prior to the change in
the Fund's principal investment strategy, you should refer to the information
presented with respect to the Fund under "Fund Summaries - Performance
Information," which does include performance information for those prior
periods.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (for periods ending December 31, 1999)
--------------------------------------------------------------------------------------------------------------------
SINCE CHANGE IN PRINCIPAL
INVESTMENT STRATEGY
1 YEAR (NOVEMBER 1, 1998)
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASIA PACIFIC FUND 50.25% 46.73%
MORGAN STANLEY CAPITAL INTERNATIONAL ALL COUNTRIES ASIA 46.85 49.62
PACIFIC FREE (EX JAPAN & INDIA) INDEX
MORGAN STANLEY CAPITAL INTERNATIONAL ALL COUNTRIES ASIA 49.80 52.01
PACIFIC FREE (EX JAPAN) INDEX
--------------------------------------------------------------------------------------------------------------------
</TABLE>
11
<PAGE>
INFORMATION ABOUT THE FUNDS'
INVESTMENT STRATEGIES AND RELATED RISKS
The following is a description of some of the investment strategies of
and related risks of investing in the Funds. An investor should pay
particular attention to the risks of investing in the Funds described below
and under "More Information About The Funds' Investment Strategies and
Risks," as well as in the SAI.
Unless otherwise noted, the investment objectives and principal investment
strategies of the Funds are non-fundamental and may be changed by the trustees
of the Trust without shareholder approval.
THE ALL COUNTRIES FUND
The All Countries Fund invests primarily in an international portfolio
of equity securities. Under normal conditions, the Fund will not invest in
securities of issuers located in the United States or its territories.
The Fund pursues an "opportunistic" strategy relative to the Morgan Stanley
Capital International All Countries World Free (ex USA) Index. The MSCI ACWI
Index is an index of securities traded in Europe, Canada, Australia, the Far
East and markets located in Latin America and in the emerging European Middle
Eastern and African markets weighted by market capitalisation. The strategy is
opportunistic because the Manager expects to typically invest more or less in
securities traded in a particular country than would be suggested by the
weighting of that country's market capitalisation in the MSCI ACWI Index. In
order to limit the investment risks associated with such a strategy, the Manager
will typically limit the Fund to an exposure of no more than 20 percentage
points above or below the current level of the MSCI ACWI Index as it applies to
each of the major investment regions of the United Kingdom, Continental Europe,
Canada, Japan, Pacific ex Japan, Latin America and EMEA Countries (as described
under "The EMEA Fund" below). The Fund has no prescribed limits on geographic
asset distribution and it has the authority to invest in securities traded in
any securities market of any country in the world, including over-the-counter
markets. In making the allocation of assets among the securities markets, the
Manager will consider such factors as it considers appropriate, including the
condition and growth potential of the various economies and securities markets
and the issuers located therein, currency considerations and other pertinent
financial, social, national and political factors which may have an effect upon
the climate for investing within such securities markets. Under normal market
circumstances, at least 65% of the Fund's investment will involve securities of
issuers in markets that are represented in the MSCI ACWI Index.
The Fund will invest primarily in equity securities which, in addition
to common stocks, may include convertible bonds, convertible preferred stocks,
warrants, rights or other securities convertible into common stock, and may also
invest in bonds and sovereign debt. The Fund may also invest in foreign issuers
by way of ADRs, GDRs and EDRs. See "More
12
<PAGE>
Information about the Funds' Investment Strategies and Risks -- Depositary
Receipts." Because the Fund invests primarily in securities of foreign
issuers and in securities traded in foreign markets, an investment in the
Fund involves special risks. See "More Information About the Funds'
Investment Strategies and Risks --Special Risks of Foreign Investments."
When the Manager believes that conditions in overseas securities markets
warrant investing in the United States for temporary defensive purposes, the
Fund may but shall not be obligated to invest a portion of its assets in
securities (including equity securities) principally traded in the United
States; provided, however, that the Fund's weighting of investments in U.S.
equity securities will not exceed the U.S. weighting in the Morgan Stanley
Capital International World Index (the MSCI World Index) by more than 20%. Also
for defensive purposes, the Fund may invest some or all of its asset in debt
instruments as described below under "More Information About the Funds'
Investment Strategies and Risks -- Temporary Defensive Strategies."
For a description of additional investment strategies that may be utilized
by the All Countries Fund and additional risks associated with the Fund's
investment strategies, see "More Information About the Funds' Investment
Strategies and Risks" below and the SAI.
THE OPPORTUNISTIC EAFE FUND
The Opportunistic EAFE Fund invests primarily in an international
portfolio of equity securities. Under normal conditions, the Fund will not
invest in securities of issuers located in Canada or the United States or its
territories.
The Fund pursues an "opportunistic" strategy relative to the Morgan Stanley
Capital International EAFE Index. The MSCI EAFE Index is an index of securities
traded in Europe, Australia and the Far East weighted by market capitalisation.
The strategy is opportunistic because the Manager expects to typically invest
more or less in securities traded in a particular country than would be
suggested by the weighting of that country's market capitalisation in the MSCI
EAFE Index. In order to limit the investment risks associated with such a
strategy, the Manager will typically limit the Fund to an exposure of no more
than 20 percentage points above or below the current level of the MSCI EAFE
Index as it applies to each of the major investment regions of the United
Kingdom, Continental Europe, Japan and Pacific ex Japan. The Fund has no
prescribed limits on geographic asset distribution and it has the authority to
invest in securities traded in any securities market of any country in the
world, including over-the-counter markets. In making the allocation of assets
among the securities markets, the Manager will consider such factors as it
considers appropriate, including the condition and growth potential of the
various economies and securities markets and the issuers located therein,
currency considerations and other pertinent financial, social, national and
political factors which may have an effect upon the climate for investing within
such securities markets. Under normal market circumstances, at least 65% of the
Fund's investment will involve securities of issuers located in European,
Australian and Far Eastern countries.
13
<PAGE>
The Fund will invest primarily in equity securities which, in addition
to common stocks, may include convertible bonds, convertible preferred
stocks, warrants, rights or other securities convertible into common stock,
and may also invest in bonds and sovereign debt. The Fund may also invest in
foreign issuers by way of ADRs, GDRs and EDRs. See "More Information About
the Funds' Investment Strategies and Risks -- Depositary Receipts." Because
the Fund invests primarily in securities of foreign issuers and in securities
traded in foreign markets, an investment in the Fund involves special risks.
See "More Information About the Funds' Investment Strategies and Risks --
Special Risks of Foreign Investments."
When the Manager believes that conditions in overseas securities markets
warrant investing in the United States for temporary defensive purposes, the
Fund may but shall not be obligated to invest a portion of its assets in
securities (including equity securities) principally traded in the United
States; provided, however, that the Fund's weighting of investments in U.S.
equity securities will not exceed the U.S. weighting in the MSCI World Index by
more than 20%. Also for defensive purposes, the Fund may invest some or all of
its assets in debt instruments as described below under "More Information About
the Funds' Investment Strategies and Risks -- Temporary Defensive Strategies."
For a description of additional investment strategies that may be utilized
by the Opportunistic EAFE Fund and additional risks associated with the Fund's
investment strategies, see "More Information About the Funds' Investment
Strategies and Risks" below and the SAI.
THE GLOBAL EMERGING MARKETS FUND
The Global Emerging Markets Fund invests primarily in equity securities
of issuers located in countries with emerging markets and developing
economies. In the opinion of the Manager, such countries are currently found
in Asia, the Indian subcontinent, Latin and Central America, the Middle and
Near East, Eastern and Central Europe and Africa. A number of these markets
are less accessible to foreign investors due to their tax structures or
limited liquidity making investments by the Fund less feasible. However, many
emerging markets have, in recent years, liberalized access and more are
expected to do so over the coming few years if the present trend continues.
The Fund invests, under normal market conditions, at least 65% of its total
assets in securities of issuers located in countries with emerging markets. For
this purpose, emerging markets will include any countries (i) having an
"emerging stock market" as defined by the International Finance Corporation; or
(ii) with low- to middle-income economies according to the International Bank
for Reconstruction and Development (the World Bank); or (iii) where, in the
opinion of the Manager, the markets may not fully reflect the potential of the
developing economy. The countries which the Manager believes do NOT constitute
emerging markets are the United States, the United Kingdom, Ireland, France,
Germany, Italy, Japan, Canada, The Netherlands, Australia, Hong Kong, New
Zealand, Singapore, the Scandinavian countries and Spain.
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The Fund may also invest up to 35% of its assets in issuers located in
countries with more established markets and economies not considered as emerging
as described above.
The Fund will invest primarily in equity securities listed on emerging
stock exchanges or in over-the-counter markets. Equity securities, in addition
to common stocks, include convertible bonds, convertible preferred stocks,
warrants, rights and other securities convertible into common stock. The Fund
may also invest in bonds and sovereign debt. The Fund may also make investments
through ADRs, GDRs and EDRs. See "More Information About the Funds' Investment
Strategies and Risks -- Depositary Receipts."
Because the Fund invests primarily in securities of foreign issuers and in
securities traded in foreign markets, an investment in the Fund involves special
risks. See "More Information About the Funds' Investment Strategies and
Risks -- Special Risks of Foreign Investments." These risks are heightened and
additional risks are present in the case of a fund such as the Global Emerging
Markets Fund which will invest primarily in issuers located in countries with
emerging markets and developing economies. See "More Information About the
Funds' Investment Strategies and Risks -- Risks of Emerging Markets."
For temporary defensive purposes, the Fund may invest some or all of its
assets in debt instruments and may invest up to 100% of its assets in securities
(including equity securities) principally traded in the United States. See
"More Information About the Funds' Investment Strategies and Risks -- Temporary
Defensive Strategies."
Generally, the securities markets of different nations are expected by the
Manager to move relatively independently of one another, because business cycles
and other economic or political events that influence one country's securities
markets may have little effect on the securities markets of other countries. By
investing in an international portfolio, the Fund seeks to reduce the risks
associated with investing in the economy of only one country and with investing
in foreign securities generally. See "More Information About the Funds'
Investment Strategies and Risks -- Special Risks of Foreign Investments" below.
For a description of additional investment strategies that may be
utilized by the Global Emerging Markets Fund and additional risks associated
with the Fund's investment strategies, see "More Information About the
Funds' Investment Strategies and Risks" below and the SAI.
THE ASIA PACIFIC FUND
The Asia Pacific Fund invests primarily in securities of issuers
located in Asia Pacific countries other than Japan. Such countries may
include Hong Kong, the Peoples Republic of China, India, Indonesia, the
Philippines, Sri Lanka, Pakistan, Thailand, Vietnam, South Korea, Taiwan,
Singapore, Malaysia, Australia and New Zealand. The Fund may also invest in
other countries in the Asia Pacific region when their markets, in the opinion
of the Manager, become sufficiently diversified.
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Under normal conditions, the Fund will invest at least 65% of its assets
in securities of issuers located in Asia Pacific countries. Such securities
may, in addition to common stocks, include bonds, sovereign debt, convertible
bonds, convertible preferred stocks, warrants, rights and other securities
convertible into common stocks. The Fund may also invest in below investment
grade debt of Asia Pacific issuers. In addition to investing in securities of
issuers located or having substantial operations in Asia Pacific countries,
the Fund may invest in securities through ADRs, GDRs and EDRs. See "More
Information About the Funds' Investment Strategies and Risks -- Depositary
Receipts." The Fund may also invest in securities traded in over-the-counter
markets. The Fund may also invest in non-Asian markets, including United
States and non-United States dollar denominated bonds.
Because the Fund invests primarily in securities of foreign issuers and in
securities traded in foreign markets, an investment in the Fund involves special
risks. See "More Information About the Funds' Investment Strategies and
Risks -- Special Risks of Foreign Investments." These risks are heightened and
additional risks are present in the case of a fund such as the Asia Pacific Fund
which will invest primarily in issuers located in Asia Pacific countries, some
of which are countries with emerging markets or with otherwise limited or
developing capital markets. See "More Information About the Funds' Investment
Strategies and Risks -- Risks of Emerging Markets."
For temporary defensive purposes, the Fund may invest up to 100% of its
assets in securities (including equity securities) principally traded in the
United States. See "More Information About the Funds' Investment Strategies and
Risks -- Temporary Defensive Strategies."
For a description of additional investment strategies that may be
utilized by the Asia Pacific Fund and additional risks associated with
the Fund's investment strategies, see "More Information About the Funds'
Investment Strategies and Risks" below and the SAI.
THE EMEA FUND
The EMEA Fund invests primarily in equity securities of issuers
located in the emerging markets and developing economies in Central and
Eastern Europe, the Middle East and Africa (EMEA Countries). Such EMEA
Countries may include Botswana, Croatia, Czech Republic, Egypt, Ghana,
Greece, Hungary, Israel, Jordan, Kazakhstan, Kenya, Lebanon, Mauritius,
Morocco, Namibia, Nigeria, Oman, Poland, Russia, Slovakia, Slovenia, South
Africa, Turkey, Ukraine and Zimbabwe. The Fund may also invest in other
countries in Europe, the Middle East or Africa when, in the opinion of the
Manager, their markets become sufficiently developed. In addition to
investing in securities of issuers located or having substantial operations
in EMEA Countries, the Fund may invest in securities listed on more
established securities markets through ADRs, GDRs, and EDRs. See "More
Information About the Funds' Investment Strategies and Risks -- Depositary
Receipts." The Fund may also invest in securities traded in over-the-counter
markets.
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Under normal conditions, the Fund will invest primarily in equity
securities which, in addition to common stocks, may include convertible
bonds, convertible preferred stocks, warrants, rights and other securities
convertible into common stock. The Fund may also invest in bonds and
sovereign debt.
Because the Fund invests primarily in securities of foreign issuers and
in securities traded in foreign markets, an investment in the Fund involves
special risks. See "More Information About the Funds' Investment Strategies and
Risks -- Special Risks of Foreign Investments." These risks are heightened and
additional risks are present in the case of a fund such as the EMEA Fund which
will invest primarily in issuers located in EMEA Countries, many of which are
countries with emerging markets or with otherwise limited or developing capital
markets. See "More Information About the Funds' Investment Strategies and Risks
-- Risks of Emerging Markets."
For temporary defensive purposes, the Fund may invest some or all of its
assets in debt instruments and may invest up to 100% of its assets in securities
(including equity securities) principally traded in the United States. See
"More Information About the Funds' Investments -- Temporary Defensive
Strategies."
For a description of additional investment strategies that may be utilized
by the EMEA Fund and additional risks associated with the Fund's investment
strategies, see "More Information About the Funds' Investment Strategies and
Risks" below and the SAI.
THE JAPAN SMALL COMPANIES FUND
The Japan Small Companies Fund invests primarily in equity securities of
issuers located in Japan with relatively small equity capitalisation, which
may include companies without wide market recognition. Current income will
not be a consideration. Under normal market conditions, at least 65% of the
Fund's assets will be invested in issuers located in Japan with equity
capitalisation of less than approximately U.S. $3.0 billion at the time of
initial purchase using current exchange rates.
The Fund will invest primarily in equity securities which, in addition to
common stocks, may include bonds, sovereign debt, convertible bonds, convertible
preferred stocks, warrants, rights or other securities convertible into common
stock. The Fund will invest in securities traded in Japanese or other foreign
securities markets (including over-the-counter markets) and may also make
investments by way of ADRs, GDRs and EDRs if desirable issues are available.
See "More Information About the Funds' Investments -- Depositary Receipts."
Because the Fund invests primarily in securities of foreign issuers and in
securities traded in foreign markets, an investment in the Fund involves special
risks. See "More Information About the Funds' Investment Strategies and
Risks -- Special Risks of Foreign Investments." These risks are increased and
additional risks are present in the case of a fund
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such as the Japan Small Companies Fund which will invest most of its assets
in the issuers of a single foreign country. This means that the Fund's
performance will be directly affected by political, economic and market
conditions in Japan. In addition, since the Japanese economy is dependent to
a significant extent on foreign trade, the relationships between Japan and
its trading partners and between the yen and other currencies are expected to
have a significant impact on particular Japanese companies and on the
Japanese economy generally. The Fund is designed for investors who are
willing to accept the risks associated with changes in such conditions and
relationships.
An investment in the Japan Small Companies Fund is subject to special risks
because all or a substantial portion of the Fund's assets may be invested in
securities of companies with relatively low equity market capitalisation. These
may include securities traded over-the-counter and securities of companies with
limited operating histories. Companies in which the Fund may invest may have
more restricted product lines or more limited financial resources than larger,
more established companies. For these and other reasons, they may be more
severely affected by economic downturns or other adverse developments than are
larger, more established companies. Trading volume of these companies'
securities may also be low and their market values volatile.
For temporary defensive purposes, the Fund may invest some or all of its
assets in debt instruments and may invest up to 100% of its assets in securities
(including equity securities) principally traded in the United States. See
"More Information About the Funds' Investment Strategies and Risks -- Temporary
Defensive Strategies."
For a description of additional investment strategies that may be utilized
by the Japan Small Companies Fund and additional risks associated with the
Fund's investment strategies, see "More Information About the Funds' Investment
Strategies and Risks" below and the SAI.
MORE INFORMATION ABOUT
THE FUNDS' INVESTMENT STRATEGIES AND RISKS
LOCATION OF ISSUERS. A number of the Funds' principal investment
strategies are determined by reference to whether an issuer is located in a
particular country or group of countries. In determining whether an issuer is
located in a particular country for those purposes, the Manager will consider:
(i) whether the issuer's securities are principally traded in the country's
markets; (ii) where the issuer's principal offices or operations are located;
and (iii) whether a significant portion of the issuer's revenues are derived
from goods or services sold or manufactured in the country. No single factor
will necessarily be determinative nor must all be present for the Manager to
determine that an issuer is located in a particular country. The Manager may
also consider other factors in making this determination.
INVESTMENT RISKS. A description of some of the principal risks
associated with investment in the Funds appears below. For any given Fund,
this section should be read
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together with the corresponding section under the heading "Information About
the Funds' Investment Strategies and Related Risks" above.
An investment in any Fund involves risks similar to those of investing
in common stock or other equity securities directly. Investment in a Fund's
shares is, like investment in equity securities, more volatile and risky than
some other forms of investment. Just as with such securities, the value of Fund
shares may increase or decrease depending on market, economic, political,
regulatory and other conditions affecting the Fund's portfolio. These types of
risks may be greater with respect to the Funds because they invest primarily in
securities of foreign issuers and may be further heightened in the case of those
Funds which invest primarily in emerging market securities. In addition, a
Fund's investments will often be denominated in foreign currencies, whose values
continually change in relation to the dollar. These varying relationships will
also affect the value of a Fund's shares.
SPECIAL RISKS OF FOREIGN INVESTMENTS. All of the Funds will invest
extensively in foreign securities (i.e., those which are not listed on a United
States securities exchange). Investing in foreign securities involves risks not
typically found in investing in U.S. markets. These include risks of adverse
change in foreign economic, political, regulatory and other conditions, and
changes in currency exchange rates, exchange control regulations (including
currency blockage), expropriation of assets or nationalization, imposition of
withholding taxes on capital, dividend or interest payments, and possible
difficulty in obtaining and enforcing judgments against foreign entities.
Furthermore, issuers of foreign securities are subject to different, and often
less comprehensive, accounting, reporting, regulatory and disclosure
requirements than domestic issuers. The securities of some foreign companies and
foreign securities markets are less liquid and at times more volatile than
securities of comparable U.S. companies and U.S. securities markets. Foreign
brokerage commissions, custodial and other fees are also generally higher than
in the United States. There are also special tax considerations which apply to
securities of foreign issuers and securities principally traded overseas. See
"Taxes."
RISKS OF EMERGING MARKETS. The risks of investing in foreign securities
may be heightened in the case of investments in emerging markets or countries
with limited or developing capital markets. Security prices in emerging markets
can be significantly more volatile than in the more developed nations of the
world, reflecting the greater uncertainties of investing in less established
markets and economies. In particular, countries with emerging markets may have
relatively unstable governments, present the risk of business or industry
nationalization, restrictions on foreign ownership, or prohibitions on
repatriation of assets, and may have less protection for property rights than
more developed countries. Political change or instability may adversely affect
the economies and securities markets of such countries. Expropriation,
nationalization or other confiscation due to political change could result in a
Fund's loss of its entire investment in the country involved. The possibility or
reality of nationalization, expropriation or confiscatory taxation, currency
blockage, political changes, government regulation, political or social
instability or diplomatic developments could affect adversely the economies of
countries and the value of the Funds' investments in those
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countries. For example, in September 1998 Malaysia imposed a tax on
repatriated foreign portfolio principal. The economies of individual
countries may differ favorably or unfavorably and significantly from the U.S.
economy in such respects as growth of gross domestic product GDP or gross
national product, rate of inflation, currency depreciation, capital
reinvestment, resource self-sufficiency, structural unemployment and balance
of payments position. The domestic economies of emerging countries are
generally not as diversified as those of the United States and certain
Western European countries. A significant portion of many of such countries'
national GDPs are represented by one commodity or groups of commodities.
World fluctuations in the prices of certain commodities may significantly
affect the economy involved. Such countries' economies may also be dependent
on international aid or development assistance, may be highly vulnerable to
changes in local or global trade conditions, including trade barriers, and
may suffer from extreme and volatile debt burdens or inflation rates. Local
securities markets may trade a small number of securities and may be unable
to respond effectively to increases in trading volume, potentially making
prompt liquidation of substantial holdings difficult or impossible at times.
Consequently, securities of issuers located in countries with emerging
markets may have limited marketability and may be subject to more abrupt or
erratic price movements. Also, such local markets typically offer less
regulatory protections for investors.
As described above under "Information About the Funds' Investment
Strategies and Related Risks" all of the Funds may invest in issuers of
emerging markets and several of the Funds may invest primarily in such
markets. Several of the Funds may concentrate their investments in particular
regions, such as in the emerging markets of Latin America and the Asia
Pacific region. Such Funds will be subject to all of the general risks
described above as well as special risks (some of which are described below)
that may affect the region where the Fund invests. Also, adverse developments
in certain regions such as Southeast Asia or Russia can, however, adversely
affect securities of issuers located in countries or regions, such as Latin
America, whose economies appear to be unrelated.
ASIA. The Asia Pacific Fund is susceptible to political and economic
factors affecting issuers in Asia Pacific countries. Although the Fund will not
invest in Japanese companies or focus its investments in Chinese companies, some
Asian economies are directly affected by Japanese capital investment in the
region, by Japanese consumer demands and by the Chinese economy in general, and,
in the case of Hong Kong, by the actions and policies of the Chinese government.
Securities of issuers located in some Asian countries tend to have volatile
prices and may offer significant potential for loss as well as gain. Further,
certain companies in Asia may not have firmly established product markets, may
lack depth of management, or may be more vulnerable to political or economic
developments such as nationalization of their own industries. However, many of
the countries of the Asia Pacific region are developing both economically and
politically. Such countries may have relatively unstable governments, economies
based on only a few commodities or industries, and securities markets trading
infrequently or in low volumes. Some Asian countries restrict the extent to
which foreigners may invest in their securities markets. Taiwan, for example,
permits foreign investment only through authorized qualified foreign
institutional investors (QFII). The Manager has been
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granted QFII status with its own investment quota enabling the Trust to
purchase Taiwanese investments through various sub-accounts. The Manager will
not collect charges or fees for the use of these facilities; however, the
Funds' sub-accounts will owe custodial or transaction fees relating to
investments through these facilities. In 1997 and 1998, the region
experienced political and economic uncertainty, increased market volatility,
decline in foreign currency exchange rates, slower economic growth, high
inflation and higher interest rates. In addition, a number of regional
currencies, including those in China and Hong Kong have been under pressure
in the markets.
LATIN AMERICA. Although there have been significant improvements in recent
years, the Latin American economies continue to experience significant problems,
including high inflation rates and high interest rates. Inflation and rapid
fluctuations in inflation rates have had and may continue to have very negative
effects on the economies and securities markets of certain Latin American
countries. The emergence of the Latin American economies and securities markets
will require continued economic and fiscal discipline which has been lacking at
times in the past, as well as stable political and social conditions. There is
no assurance that economic initiatives will be successful. Recovery may also be
influenced by international economic conditions, particularly those in the
United States, and by world prices for oil and other commodities.
MIDDLE EAST/AFRICA. The securities markets of Middle Eastern and African
countries are significantly smaller than the U.S. securities markets and have
substantially less trading volume. There may be a high concentration of market
capitalisation and trading volume in a small number of issuers representing a
limited number of industries, as well as high concentrations of investors and
financial intermediaries. Many of the Middle Eastern and African countries may
be subject to a greater degree of economic, political and social instability
than is the case in the United States and Western Europe. Such instability may
result from, among other things; (i) authoritarian governments or military
involvement in political and economic decision-making, including changes in
government through extra-constitutional means; (ii) popular unrest associated
with demands for improved political, economic and social conditions; (iii)
internal insurgencies and terrorist activities; (iv) hostile relations with
neighboring counties; and (v) ethnic, religious and racial disaffection. Such
economic, political and social instability could severely disrupt the principal
financial markets in which the Fund invests and could severely affect the value
of the Fund's assets. In addition, governments of many Middle Eastern and
African countries have exercised and continue to exercise substantial influence
over many aspects of the private sector. In certain cases, the government owns
or controls many companies, including the largest in the country. Accordingly,
governmental actions in the future could have a significant effect on economic
conditions in Middle Eastern and African countries, which could affect private
sector companies and the Fund, as well as the value of securities in the Fund's
portfolio. The legal systems in certain Middle Eastern and African countries
also may have an adverse impact on the Fund. For example, while the potential
liability for a shareholder in a U.S. corporation with respect to acts of the
corporation generally is limited to the amount of the shareholder's investment,
the notion of limited liability is less clear in certain Middle Eastern and
African
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countries. Similarly, the rights of investors in Middle Eastern and African
issuers may be more limited than those of shareholders of U.S. corporations.
It may be difficult or impossible to obtain and/or enforce a judgement in a
Middle Eastern or African country.
CURRENCY RISKS; HEDGING TRANSACTIONS. The Funds may invest without
limitation in securities quoted or denominated in currencies other than the U.S.
dollar and may hold such currencies. As a result, fluctuations in currency
exchange rates and currency devaluations, if any, will affect the U.S. dollar
value of the Funds' portfolio securities as well as the net asset value of the
Funds' shares. The Funds may use various investment products to reduce certain
risks to the Funds of exposure to local currency movements. These products
include currency forward contracts, futures contracts and options thereon, and
options and "spot" transactions directly in foreign currencies. A Fund may, but
is not obligated to, attempt to hedge up to 75% of its foreign currency exposure
using such techniques. The Funds' ability to use these products and the other
strategies discussed below, may be limited by market conditions, regulatory
limits and tax considerations and there can be no assurance that any of these
products or strategies would succeed in reducing the risk to the Fund of
exposure to local currency movements. In addition, in certain cases these
products and strategies may be unavailable or the Funds may choose not to use
them when, in retrospect, these products and strategies would have been helpful
to the Funds. Movements in the prices or values of these investment products may
not correlate precisely with changes in the value of the related currency. New
financial products and risk management techniques continue to be developed and
the Funds may use these new investments and techniques to the extent consistent
with their investment objective and policies. Hedging against a decline in the
value of a currency does not eliminate fluctuations in the prices of portfolio
securities or prevent losses if the prices of such securities decline. Such
transactions also preclude the opportunity for gain if the value of the hedged
currency should rise. Moreover, it may not be possible for a Fund to hedge
against a devaluation that is so generally anticipated that the Fund is not able
to contract to sell the currency at a price above the devaluation level it
anticipates.
FORWARD CONTRACTS: A forward contract is an obligation to purchase or sell
a specific currency for an agreed price at a future date which is individually
negotiated and privately traded by currency traders and their customers.
CURRENCY FUTURES CONTRACTS: The Funds may enter into financial futures
contracts for the purchase or sale for future delivery of foreign currencies. A
sale of a futures contract entails entering into a contractual obligation to
deliver the foreign currency called for by the contract at a specified price on
a specified date. A purchase of a futures contract entails entering into a
contractual obligation to acquire the foreign currency called for by the
contract at a specified price on a specified date.
Although futures contracts by their terms often call for actual delivery or
acceptance, in most cases the contracts are closed out before the settlement
date without the making or taking of delivery. Closing out a futures contract
sale is effected by purchasing a futures contract for the same aggregate amount
of the specific type of financial instrument or commodity and the
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same delivery date. If the price of the initial sale of the futures contract
exceeds the price of the offsetting purchase, the seller is paid the
difference and realizes a gain. Conversely, if the price of the offsetting
purchase exceeds the price of the initial sale, the seller realizes a loss.
Similarly, the closing out of a futures contract purchase is effected by the
purchaser entering into a futures contract sale. If the offsetting sale price
exceeds the purchase price, the purchaser realizes a gain, and if the
purchase price exceeds the offsetting sale price, he realizes a loss.
The purchase or sale of a currency futures contract differs from the
purchase or sale of a security, in that no price or premium is paid or received.
Instead, an amount of cash or U.S. Treasury bills generally not exceeding 5% of
the contract amount must be deposited with the broker. This amount is known as
initial margin. Subsequent payments to and from the broker, known as variation
margin, are made on a daily basis as the price of the underlying futures
contract fluctuates making the long and short positions in the futures contract
more or less valuable, a process known as marking to the market. At any time
prior to the settlement date of the futures contract, the position may be closed
out by taking an opposite position which will operate to terminate the position
in the futures contract. A final determination of variation margin is then made,
additional cash is required to be paid to or released by the broker, and the
purchaser realizes a loss or gain. In addition, a commission is paid on each
completed purchase and sale transaction.
OPTIONS ON CURRENCY FUTURES. Unlike a currency futures contract, which
requires the parties to buy and sell currency on a set date, an option on a
currency futures contract entitles its holder to decide on or before a future
date whether to enter into such a contract. If the holder decides not to enter
into the contract, the premium paid for the option is lost. Since the value of
the option is fixed at the point of sale, there are no daily payments of cash by
the holder of the option in the nature of variation or maintenance margin
payments to reflect the change in the value of the underlying contract as there
are by a purchaser or seller of a currency futures contract.
The ability to establish and close out positions on options on futures will
be subject to the development and maintenance of a liquid secondary market. It
is not certain that this market will develop or be maintained.
A Fund will write (sell) only covered put and call options on currency
futures. This means that the Fund will provide for its obligations upon exercise
of the option by segregating sufficient cash or short-term obligations or by
holding an offsetting position in the option or underlying currency future, or a
combination of the foregoing. Set forth below is a description of methods of
providing cover that the Funds currently expect to employ, subject to applicable
exchange and regulatory requirements. If other methods of providing appropriate
cover are developed, the Fund reserves the right to employ them to the extent
consistent with applicable regulatory and exchange requirements.
A Fund will, so long as it is obligated as the writer of a call option on
currency futures,
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own on a contract-for-contract basis an equal long position in currency
futures with the same delivery date or a call option on currency futures with
the difference, if any, between the market value of the call written and the
market value of the call or long currency futures purchased maintained by the
Fund in cash, Treasury bills, or other high-grade short-term obligations in a
segregated account with its Custodian. If at the close of business on any day
the market value of the call purchased by a Fund falls below 100% of the
market value of the call written by the Fund, the Fund will so segregate an
amount of cash, Treasury bills or other high grade short-term obligations
equal in value to the difference.
In the case of put options on currency futures written by the Fund, the
Fund will hold the aggregate exercise price in cash, Treasury bills, or other
high grade short-term obligations in a segregated account with its Custodian, or
own put options on currency futures or short currency futures, with the
difference, if any, between the market value of the put written and the market
value of the puts purchased or the currency futures sold maintained by the Fund
in cash, Treasury bills or other high grade short-term obligations in a
segregated account with its Custodian. If at the close of business on any day
the market value of the put options purchased or the currency futures sold by
the Fund falls below 100% of the market value of the put options written by the
Fund, the Fund will so segregate an amount of cash, Treasury bills or other high
grade short-term obligations equal in value to the difference.
OPTIONS ON FOREIGN CURRENCIES: The Funds may purchase and write put options
on foreign currencies traded on securities exchanges or boards of trade (foreign
and domestic) or over-the-counter. As in the case of other kinds of options, the
writing of an option on a foreign currency constitutes only a partial hedge, up
to the amount of the premium received, and the Funds could be required to
purchase or sell foreign currencies at disadvantageous exchange rates, thereby
incurring losses. The purchase of an option on a foreign currency may constitute
an effective hedge against fluctuations in exchange rates although, in the event
of rate movements adverse to expected movements, it may forfeit the entire
amount of the premium plus related transaction costs. There is no specific
percentage limitation on the Funds' investments in options on foreign
currencies.
LIMITATIONS ON THE USE OF CURRENCY FUTURES PORTFOLIO STRATEGIES. The Funds'
ability to engage in currency futures strategies described above will depend on
the availability of liquid markets in such instruments. Markets in futures with
respect to currencies are relatively new and still developing. It is impossible
to predict the amount of trading interest that may exist in various types of
currency futures. Therefore, no assurance can be given that the Funds will be
able to utilize these instruments effectively for the purposes set forth above.
Furthermore, the Funds' ability to engage in such transactions may be limited by
tax considerations.
RISK FACTORS IN CURRENCY FORWARD AND FUTURES TRANSACTIONS. The Funds'
investment in currency forward and futures contracts involves risk. Some of that
risk may be caused by an imperfect correlation between movements in the price of
the forward or futures contract and the price of the related currency. The risk
of imperfect correlation generally tends to diminish as the maturity date of the
forward or futures contract approaches.
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Also, when a Fund purchases currency forward or futures contracts (or
options thereon) to hedge against a possible increase in the price of
currency in which the securities the Fund anticipates purchasing are
denominated, it is possible that the market may instead decline. If the Fund
does not then invest in such securities because of concern as to possible
further market decline or for other reasons, the Fund may realize a loss on
the forward or futures contract that is not offset by a reduction in the
price of the securities purchased.
The amount of risk a Fund assumes when it purchases an option on a
currency futures contract is the premium paid for the option plus related
transaction costs. In addition to the correlation risks discussed above, the
purchase of an option also entails the risk that changes in the value of the
underlying futures contract will not be fully reflected in the value of the
option purchased. By writing a call option, the Fund limits its opportunity to
profit from any increase in the market value of the underlying contract above
the exercise price of the option. By writing a put option, the Fund assumes the
risk that it may be required to purchase the underlying contract for an exercise
price higher than its then current market value, resulting in a potential loss
unless the contract subsequently appreciates in value.
The liquidity of a secondary market in a futures contract or related
option may be adversely affected by daily price fluctuation limits established
by commodity exchanges which limit the amount of fluctuation in a futures
contract price during a single trading day. Once the daily limit has been
reached in the contract, no trades may be entered into at a price beyond the
limit, thus preventing the liquidation of open futures positions. Prices have in
the past exceeded the daily limit on a number of consecutive trading days.
INDEX FUTURES. To the extent opportunities are available, each Fund may
purchase futures contracts or options on futures contracts on various stock
indices (Index Futures) for investment purposes. An Index Future is a contract
to buy an integral number of units of a stock index at a specified future date
at a price agreed upon when the contract is made. A unit is the value from time
to time of the relevant Index.
The Funds may invest in Index Futures while the Manager seeks favorable
terms from brokers to effect transactions in common stocks selected for
purchase. Each Fund may also invest in Index Futures when the Manager believes
that there are not enough attractive common stocks available to maintain the
standards of diversity and liquidity set for a Fund pending investment in such
stocks if and when they do become available. Through this use of Index Futures,
a Fund may maintain a portfolio with diversified risk without incurring the
substantial brokerage costs which may be associated with investment in multiple
issuers. This use may also permit a Fund to avoid potential market and liquidity
problems (e.g., driving up the price by purchasing additional shares of a
portfolio security or owning so much of a particular issuer's stock that the
sale of such stock depresses that stock's price) which may result from increases
in positions already held by a Fund.
As contrasted with purchases of a common stock, no price is paid or
received by a
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<PAGE>
Fund upon the purchase of a futures contract. Upon entering into a contract,
a Fund will be required to deposit with its custodian in a segregated account
in the name of the futures broker a specified amount of cash or securities.
This is known by participants in the market as initial margin. The type of
instruments that may be deposited as initial margin, and the required amount
of initial margin, will be determined by the futures exchange on which Index
Futures are traded before trading of Index Futures commences. The nature of
initial margin in futures transactions is different from that of margin in
securities transactions in that futures contract margin does not involve the
borrowing of funds by the customer to finance the transactions. Rather, the
initial margin is in the nature of a performance bond or good faith deposit
on the contract which is returned to the Fund upon termination of the futures
contract, assuming all contractual obligations have been satisfied.
Subsequent payments, called variation margin, to and from the broker, will be
made on a daily basis as the price of the particular Index fluctuates, making
the position in the futures contract more or less valuable, a process known
as marking to the market.
A Fund may close out a futures contract purchase by entering into a futures
contract sale. This will operate to terminate the Fund's position in the futures
contract. Final determinations of variation margin are then made, additional
cash is required to be paid by or released to the Fund, and the Fund realizes a
loss or a gain.
A Fund's investment in Index Futures involves risk. The Fund's ability to
use Index Futures may be limited by market conditions, or the Funds may choose
not to use Index Futures when, in retrospect, such Index Futures would have been
beneficial to the Funds. Positions in Index Futures may be closed out by a Fund
only on the futures exchanges on which Index Futures are then traded. There can
be no assurance that a liquid market will exist for any particular contract at
any particular time. The liquidity of the market in futures contracts could be
adversely affected by daily price fluctuation limits established by the relevant
futures exchange which limit the amount of fluctuation in the price of an Index
Futures contract during a single trading day. Once the daily limit has been
reached in the contract, no trades may be entered into in the price beyond the
limit. In such events, it may not be possible for a Fund to close its futures
contract purchase, and, in the event of adverse price movements, the Fund would
continue to be required to make daily cash payments of variation margin. When a
Fund has purchased a futures contract, its risk is, however, limited to the
amount of the contract. The futures market may attract more speculators than
does the securities market, because deposit requirements in the futures market
are less onerous than margin requirements in the securities market. Increased
participation by speculators in the futures market may also cause price
distortions. In addition, investment in Index Futures involves the risk of an
imperfect correlation between movement in the relevant Index and the price of
Index Futures. This lack of correlation may result from investors closing out
futures contracts in order to avoid additional margin deposit requirements or
from the fact that trading hours for Index Futures may not correspond perfectly
to hours of trading on the relevant foreign exchanges. Before a United States
entity may purchase or sell futures contracts traded on foreign exchanges, the
Commodity Futures Trading Commission (CFTC) must approve the contract for
purchase and sale by U.S. persons. Those contracts may involve greater risks,
26
<PAGE>
including less liquidity and less governmental supervision.
DEPOSITARY RECEIPTS. Each Fund may invest in American Depositary
Receipts (ADRs), Global Depositary Receipts (GDRs) and European Depositary
Receipts (EDRs) (collectively, Depositary Receipts) if issues of such
Depositary Receipts are available that are consistent with a Fund's
investment objective. Depositary Receipts generally evidence an ownership
interest in a corresponding security on deposit with a financial institution.
Transactions in Depositary Receipts usually do not settle in the same
currency as the underlying securities are denominated or traded. Generally,
ADRs, in registered form, are designed for use in the U.S. securities markets
and EDRs, in bearer form, are designed for use in European securities
markets. GDRs may be traded in any public or private securities markets and
may represent securities held by institutions located anywhere in the world.
FIXED INCOME AND LOWER RATED SECURITIES. Each Fund may invest some or all
of its assets in fixed income securities, including bonds and sovereign debt.
Each Fund may invest some or all of its assets in securities rated below
investment grade (that is, rated below BBB by Standard & Poor's or below Baa by
Moody's) at the time of purchase, including securities in the lowest rating
categories, and comparable unrated securities. Lower rated securities generally
provide higher yields, but are subject to greater credit and market risk, than
higher quality fixed income securities. Lower rated securities are considered
predominantly speculative with respect to the ability of the issuer to meet
principal and interest payments. The market for lower rated securities may be
more severely affected than some other financial markets by economic recession
or substantial interest rate increases, by changing public perceptions of this
market or by legislation that limits the ability of certain categories of
financial institutions to invest in these securities. In addition, the secondary
market may be less liquid for lower rated securities. This reduced liquidity at
certain times may affect the values of these securities and may make the
valuation and sale of these securities more difficult. Although higher quality
fixed income securities generally have lower credit risk than lower rated
securities, they may share some or all of the above risks of lower rated
securities, including interest rate risk.
INVESTMENT COMPANIES AND TRANSACTIONS WITH AFFILIATES. Each of the Funds
may invest up to 10% of its total assets through investment companies or other
collective investment vehicles designed to permit investments in a portfolio of
securities listed in a particular developing country or region, particularly in
the case of countries in which such an investment vehicle is the exclusive or
main vehicle for foreign portfolio investment. The Trust takes the position that
this limitation and the other applicable provisions of the Investment Company
Act of 1940, as amended (the 1940 Act) do not apply to foreign investment
companies not required to register under the 1940 Act due to their private
placement of shares and the limited number and/or sophistication of their
shareholders. As a shareholder of these kinds of investment vehicles, a Fund may
indirectly bear fees which are in addition to the fees the Fund pays its own
service providers. To the extent a Fund invests in an affiliated fund, these
assets are excluded for purposes of calculating the management fee payable by
the Fund to the Manager.
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<PAGE>
Section 17(a) of the 1940 Act prohibits most purchase and sale
transactions between a registered investment company and its affiliates (and
their affiliates), including transactions between separate series of a single
investment company. Thus, the sale or purchase of securities or other
property to or from any series of the Trust by an affiliate of such series
(or an affiliate of such an affiliate) is prohibited. This would include any
other series of the Trust, and any other investment company or account
managed by the Manager or an affiliate. Rule 17a-7 under the 1940 Act
provides an exemption for sales and purchases among investment companies and
other persons (or accounts) which are affiliated solely by reason of having a
common investment adviser (or affiliated investment advisers), common board
members and/or common officers, provided that certain conditions (designed to
ensure that the transaction is fair to the investment company) are met. Rule
17a-7 requires that the trustees of an investment company adopt procedures
designed to ensure that any transactions subject to the rule comply with the
rule's conditions and that the trustees review all transactions effected
pursuant to such procedures on a quarterly basis. The trustees of the Trust
approved such procedures governing transactions permitted by Rule 17a-7 on
June 6, 1994.
TEMPORARY DEFENSIVE STRATEGIES. For temporary defensive purposes, each
Fund may but shall not be obligated to vary from its investment strategies
during periods in which conditions in certain countries or securities markets or
other economic or political conditions warrant. Each Fund may reduce its
position in securities relating to its investment objective and may invest
without limit in short-term debt securities (for this purpose, securities with a
remaining maturity of one year or less) issued or guaranteed by the U.S.
Government, its agencies or instrumentalities and U.S. dollar-denominated money
market instruments or foreign currency-denominated short-term debt securities
issued or guaranteed by a foreign government or any of its political
subdivisions, authorities, agencies or instrumentalities, which in each case are
rated BB or higher by Standard & Poor's Corporation or Baa or higher by Moody's
Investors Service, Inc. or, if not so rated, deemed to be of equivalent quality
by the Manager. Each Fund may also at any time temporarily invest funds awaiting
reinvestment or held as reserves for dividends and other distributions to
shareholders in any of the foregoing types of securities as well as in
repurchase agreements as described below under the sub-caption "-Repurchase
Agreements." Also for defensive purposes, each Fund may invest its assets in
securities (including equity securities) principally traded in the United
States; provided, however, that each of the Opportunistic EAFE Fund's and the
All Countries Fund's weighting of investments in U.S. equity securities will not
exceed the U.S. weighting in the MSCI World Index by more than 20%. Although the
Funds have the flexibility to use these temporary defensive strategies, the
Manager may choose not to for a variety of reasons, even in very volatile market
conditions. Use of these strategies may prevent a Fund from achieving its
investment objective.
REPURCHASE AGREEMENTS. As a means of earning income for periods as short as
overnight, each Fund may enter into repurchase agreements with selected banks
and broker/dealers. Under a repurchase agreement, a Fund acquires securities
subject to the seller's agreement to repurchase at a specified time and price.
If the seller under a repurchase agreement becomes insolvent, a Fund's right to
dispose of the securities may be restricted. In
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<PAGE>
the event of the commencement of bankruptcy or insolvency proceedings with
respect to the seller of the security under a repurchase agreement, a Fund
may encounter delay and incur costs before being able to sell the security.
Also, if a seller defaults, the value of such securities may decline before a
Fund is able to dispose of them.
ILLIQUID SECURITIES. Each Fund may invest up to 15% of its net assets in
illiquid securities, meaning securities that the Fund may not readily dispose of
within 7 days at a price approximately the value used by the Fund for purposes
of calculating its net asset value on the date of disposition. These securities
include those whose disposition is restricted by securities laws. Investment in
illiquid securities involves the risk that, because of the lack of consistent
market demand for such securities, a Fund may be forced to sell them at a
discount.
PORTFOLIO TURNOVER. Portfolio turnover, which measures the extent to which
a Fund engages in active and frequent trading of its portfolio securities,is not
a limiting factor with respect to investment decisions for the Funds. The
portfolio turnover rates for the Funds' last three fiscal years are set forth
below. In general, a Fund's portfolio turnover rate for a given fiscal year is
the ratio of the amount of purchases or sales (whichever is less) of the Fund's
portfolio securities to the monthly average asset value of the Fund's portfolio
securities.
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
YEAR ENDED APRIL 30,
------------------------------------------------------------------------
2000 1999 1998
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPPORTUNISTIC EAFE FUND 71% 82% 63%
GLOBAL EMERGING MARKETS FUND 146 140 89
ASIA PACIFIC FUND 114 158 162
EMEA FUND 109 117 81
JAPAN SMALL COMPANIES FUND 37 27 26
---------------------------------------------------------------------------------------------------------------------
</TABLE>
In any particular year market conditions may well result in greater rates
than are presently anticipated. The rate of a Fund's turnover may vary
significantly from time to time depending on the volatility of economic and
market conditions. High portfolio turnover involves correspondingly greater
brokerage commissions and other transaction costs, which will be borne directly
by the relevant Fund. To the extent portfolio turnover results in the
realization of short-term capital gains, such gains generally will be taxed to
shareholders at ordinary income tax rates.
PURCHASE OF SHARES
You may make an initial purchase of shares of any Fund by submitting a
completed subscription agreement (attached as Exhibit A) and payment to the
Trust in accordance with the instructions set forth in the subscription
agreement.
Purchases are permitted on any business day. In order for a purchase order
to be effective as of a particular day, the Fund must have accepted the order
and have received immediately available funds by 5:00 p.m. (New York time) on
such day.
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<PAGE>
The minimum initial investment in each Fund must be worth at least
$1,000,000; subsequent investments must be worth at least $100,000. The Trust
reserves the right to waive these minimums in its sole discretion.
Shares of each Fund may be purchased by (i) giving cash, (ii) exchanging
securities on deposit with a custodian acceptable to the Manager or (iii) a
combination of giving cash and exchanging such securities. Purchase of shares of
the Funds in exchange for securities is subject in each case to the
determination by the Manager that the securities to be exchanged are acceptable
for purchase by the Fund. In all cases the Manager reserves the right to reject
any particular investment. In particular, and without limiting the generality of
the foregoing, the Manager may but shall not be obligated to reject an
investment if, in the opinion of the Manager, the size of the investment and/or
the transaction costs associated with the investment are such that there would
be a material discrepancy between the purchase premium, if any, and the Fund's
transaction expenses. Securities accepted by the Manager in exchange for Fund
shares will be valued in the same manner as the Fund's assets, as described
below, as of the time of the Fund's next determination of net asset value after
such acceptance. All dividends and subscription or other rights which are
reflected in the market price of accepted securities at the time of valuation
become the property of the Funds and must be delivered to the Funds upon receipt
by the investor from the issuer. A gain or loss for federal income tax purposes
is realized upon the exchange by an investor that is subject to federal income
taxation, depending upon the investor's basis in the securities tendered. A
shareholder who wishes to purchase shares by exchanging securities should obtain
instructions from the Trust by calling Timothy Hall at 011-44-131-229-5252
before 12:00 noon (New York time) or Steven Johnson at 203-698-9031 after 12:00
noon (New York time) on business days.
The purchase price of shares of a Fund is the net asset value next
determined after a purchase order is received
The Manager will not approve the acceptance of securities in exchange for
Fund shares unless (1) the Manager, in its sole discretion, believes the
securities are appropriate investments for the Fund; (2) the investor represents
and agrees that all securities offered to a Fund are not subject to any
restrictions upon their sale by the Fund under the Securities Act of 1933, as
amended, or otherwise; and (3) the securities may be acquired under the Fund's
investment policies and restrictions. No investor owning 5% or more of a Fund's
shares may purchase additional Fund shares by exchange of securities.
Upon acceptance of your order, the Trust opens an account for you, applies
the payment to the purchase of full and fractional Fund shares of beneficial
interest and mails a statement of the account confirming the transaction. After
an account has been established, you may send subsequent investments at any time
upon notification to and confirmation by the Trust (Attention: Timothy Hall) at
tel. 011-44-131-229-5252, fax 011-44-131-479-4747.
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<PAGE>
Purchases of shares in any Fund are limited to persons who are
"accredited investors" as defined in Regulation D under the Securities Act of
1933, as amended, and who have completed and signed a subscription agreement
in the form attached hereto as Exhibit A. Each Fund reserves the right to
reject any purchase order for any reason which the Fund in its sole
discretion deems appropriate. Purchasers must be acquiring shares for their
own account and for investment purposes only. Each Fund reserves the right to
suspend or change the terms of the offering of its shares.
REDEMPTION OF SHARES
THE SECURITIES OFFERED BY THIS PRIVATE PLACEMENT MEMORANDUM HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS
OF ANY STATE AND MAY NOT BE TRANSFERRED OR RESOLD UNLESS SO REGISTERED OR EXEMPT
FROM REGISTRATION. However, the securities are redeemable.
You can redeem your shares by sending a written request by mail or by
facsimile to the Trust (c/o Martin Currie, Inc., Saltire Court, 20 Castle
Terrace, Edinburgh, Scotland EH1 2ES; Attention: Timothy Hall; Fax #
011-44-131-479-4747 and to the Transfer Agent (State Street Bank and Trust
Company, Transfer Agent Operations, P.O. Box 1978, Boston, MA 02105; Attention:
Kelly Powers; Fax # 617-985-9626). The request must include the name of the
Fund, your account number, the exact name(s) in which your shares are
registered, and the number of shares or the dollar amount to be redeemed. All
owners of the shares must sign the request in the exact names in which the
shares are registered and should indicate any special capacity in which they are
signing (such as officers, trustees or custodian or on behalf of a partnership,
corporation or other entity).
Shares of a Fund may be redeemed on any business day.
The redemption price of shares of a Fund is the net asset value per share
next determined after the redemption request and any necessary special
documentation are received by the Trust in proper form.
Shares of a Fund may be redeemed by the payment of the redemption price in
whole or in part by a distribution in kind of securities held by the Fund in
lieu of cash if the Manager determines, in its sole discretion, that it would be
detrimental to the best interests of the remaining shareholders of the Fund to
make payment wholly or partly in cash. Securities used to redeem Fund shares in
kind will be valued in accordance with the Funds' procedures for valuation
described under "Determination of Net Asset Value." Securities distributed by a
Fund in kind will be selected by the Manager in light of the Fund's objective
and generally will not represent a pro rata distribution of each security held
in the Fund's portfolio. Investors may incur brokerage charges on the sale of
any such securities so received in payment of redemptions.
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<PAGE>
Payment on redemption will be made as promptly as possible and normally
within seven days after the request for redemption is received by the Trust
in good order. If an investor purchased shares by check and the check was
deposited less than fifteen days prior to the redemption request, a Fund may
withhold redemption proceeds until that check has cleared. A redemption
request is in good order if it includes the exact name in which shares are
registered and the number of shares or the dollar amount of shares to be
redeemed and if it is signed exactly in accordance with the form of
registration. Persons acting in a fiduciary capacity, or on behalf of a
corporation, partnership or trust, must specify, in full, the capacity in
which they are acting. Cash payments will be made by transfer of Federal
funds for payment into the investor's account.
When opening an account with the Trust, shareholders will be required to
designate the account(s) to which funds may be transferred upon redemption.
Designation of additional accounts and any change in the accounts originally
designated must be made in writing with the signature guaranteed by any of the
following entities: U.S. banks, foreign banks having a U.S. correspondent bank,
credit unions, savings associations, U.S. registered dealers and brokers,
municipal securities dealers and brokers, government securities dealers and
brokers, national securities exchanges, registered securities associations and
clearing agencies.
The Trust may suspend the right of redemption and may postpone payment for
any Fund for more than seven days during an emergency which makes it
impracticable for a Fund to dispose of its securities or to fairly determine the
value of the net assets of the Fund, or during any other period permitted by the
Securities and Exchange Commission for the protection of investors.
DISTRIBUTION AND SERVICING PLANS
The Trust has adopted a distribution and servicing plan pursuant to Rule
12b-1 under the Investment Company Act of 1940, as amended, for each Fund (the
Plans). The Plans authorize the Manager to spend an amount of the management
fees it collects from each Fund up to 0.25% per annum of the average monthly net
assets of the relevant Fund for activities or services primarily intended to
result in the sale of shares of the such Fund or for the provision of personal
services to shareholders of such Fund.
DETERMINATION OF NET ASSET VALUE
The net asset value of a share of each Fund will be determined as of the
close of each business day in New York. The net asset value per share for a Fund
is determined by dividing the total market value of the Fund's portfolio
investments and other assets, less any liabilities, by the total outstanding
shares of that Fund. Portfolio securities listed on a securities exchange for
which market quotations are available are valued at the last quoted sale price
on each business day, or, if there is no such reported sale, at the mean of the
most recent quoted bid
32
<PAGE>
and ask prices unless the trustees, or persons acting on their behalf,
determine that such value is not the fair value of such a security. Price
information on listed securities is generally taken from the closing price on
the exchange where the security is primarily traded. Unlisted securities for
which market quotations are readily available are valued at the mean of the
most recent quoted bid and ask prices, except that debt obligations with
sixty days or less remaining until maturity may be valued at their amortized
cost. Other assets and securities for which no quotations are readily
available (or for which quotations are not believed by the trustees to be
reliable) are valued at fair value as determined in good faith by the
trustees of the Trust, or by persons acting pursuant to procedures
established by the trustees. Because certain Funds will, under normal
conditions, hold securities that are primarily listed on foreign exchanges
that trade on weekends or other days when the Funds do not price their
shares, the net asset value of those Funds' shares may change on days when
shareholders will not be able to purchase or redeem shares.
DISTRIBUTIONS
Each Fund's policy is to declare and pay out as dividends, at least
annually, substantially all of its investment company taxable income (which
comes from dividends and any interest it receives from investments and net
realized short-term capital gains), if any, and to distribute, at least
annually, substantially all of its net realized capital gains (that is, the
excess of net long-term capital gains over net short-term capital losses
including capital loss carryovers), if any. For these purposes and federal
income tax purposes, a portion of the premiums from certain expired call or put
options on currency futures written by a Fund, net gains from certain closing
purchase and sale transactions with respect to such options and a portion of net
gains from other options and futures transactions may be treated as short-term
capital gain (i.e., gain from the sale of securities held for 12 months or
less). Each Fund's policy is to declare and pay distributions of its investment
company taxable income and net realized capital gains annually, although any
Fund may make more frequent distributions as determined by the trustees of the
Trust to the extent permitted by applicable regulations. Each Fund intends
generally to make distributions annually sufficient to avoid the imposition of a
non-deductible 4% excise tax on certain undistributed amounts of taxable
investment income and capital gains. For tax purposes, distributions to
shareholders will be deemed to be increased by each shareholder's allocable
share of a portion of a Fund's expenses, including a Fund's advisory expenses.
All dividends and/or distributions will be paid in shares of the relevant
Fund at net asset value unless the shareholder elects in the subscription
agreement to receive cash. Shareholders may make this election by marking the
appropriate box on the subscription agreement.
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<PAGE>
TAXES
Each Fund is treated as a separate taxable entity for U.S. federal
income tax purposes and intends to qualify each year as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986,
as amended. So long as a Fund qualifies for treatment as a regulated
investment company, the Fund itself will not be subject to federal income tax
to the extent its dividend, interest and certain other income, its net
realized short-term gains and its net realized long-term capital gains are
distributed to its shareholders.
If a Fund fails to distribute in a calendar year substantially all of its
ordinary income for such year and substantially all of its capital gain net
income for the one year period ending October 31 (or later if a Fund is
permitted to elect and so elects), plus any retained amount from the prior year,
such Fund will be subject to a 4% excise tax on undistributed amounts. A
distribution paid to shareholders by a Fund in January of a year is generally
deemed to have been received by shareholders on December 31 of the preceding
year, if the distribution was declared and payable to shareholders of record on
a date in October, November or December of that preceding year. Each Fund
intends generally to make distributions sufficient to avoid imposition of the 4%
excise tax.
Dividend distributions (i.e., distributions derived from interest,
dividends and certain other income, including in general short-term capital
gains) will be taxable to shareholders subject to federal income tax as ordinary
income. Distributions of net capital gains (that is, the excess of net long-term
capital gains over net short-term capital losses) on securities held for more
than twelve months will be taxable to shareholders as such, regardless of how
long a shareholder has held the shares in a Fund. Distributions from each Fund
will be taxed as described above whether received in cash or in shares through
reinvestment of dividends.
Dividends and distributions on a Fund's shares generally are subject to
federal income tax as described herein to the extent they do not exceed the
Fund's realized income and gains, even though they economically may represent a
return of a particular shareholder's investment. Such dividends and
distributions are likely to occur in respect of shares purchased at a time when
a Fund's net asset value reflects gains that are either unrealized, or realized
but not distributed. Such realized gains may be required to be distributed even
when a Fund's net asset value also reflects unrealized losses.
A Fund's transactions in options, futures contracts, hedging transactions,
forward contracts, straddles and foreign currencies will be subject to special
tax rules (including constructive sale, mark-to-market, straddle, wash-sale and
short sale rules), which could accelerate income, defer losses, or otherwise
affect the amount, timing or character of distributions to shareholders.
A Fund's transactions in foreign currencies and hedging activities likely
will produce a difference between its book income and taxable income. This
difference may cause a portion of a Fund's income distributions to constitute a
return of capital for tax purposes or require a
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<PAGE>
Fund to make distributions exceeding book income to qualify as a regulated
investment company.
Each Fund may be subject to foreign withholding taxes on dividends,
interest or capital gains which will decrease the Fund's yield. However, each
Fund may make an election with the Internal Revenue Service for each fiscal
year which would allow shareholders who are U.S. citizens or U.S.
corporations to claim a foreign tax credit or deduction (but not both) on
their U.S. income tax return for their pro-rata portion of foreign income
taxes paid by the Fund. As a result, income of a Fund from non-U.S. sources
that is distributed to Fund shareholders would be treated as income from
non-U.S. sources to the shareholders. The amount of foreign income taxes paid
by a Fund would be treated as foreign taxes paid directly by Fund
shareholders and, in addition, this amount would be treated as additional
income to Fund shareholders from non-U.S. sources regardless of whether the
Fund shareholder would be eligible to claim a foreign tax credit or
deduction. Investors should consult their tax advisors for further
information relating to the foreign tax credit and deduction, which are
subject to certain restrictions and limitations (including, with respect to
the foreign tax credit, a holding period requirement applied at both the Fund
and the shareholder level).
The sale or redemption of shares of a Fund, including a redemption in-kind,
is a taxable event to the selling or redeeming shareholder.
The Trust will provide federal tax information annually, including
information about dividends and distributions paid during the preceding year.
The foregoing is a general summary of the U.S. federal income tax
consequences for shareholders who are U.S. citizens or corporations. Fund
shareholders who are not U.S. citizens or that are foreign corporations may
receive substantially different tax treatment of distributions by the Funds.
Shareholders should consult their own tax advisors about the tax consequences of
an investment in a Fund in light of each shareholder's particular tax situation.
Shareholders also should consult their own tax advisors about consequences under
foreign, state, local or other applicable laws.
MANAGEMENT OF THE TRUST
Each Fund is advised and managed by Martin Currie, Inc., Saltire Court, 20
Castle Terrace, Edinburgh Scotland. The Manager is a registered investment
adviser which, together with its affiliates, advises other mutual funds,
offshore investment funds and other collective investment vehicles, separate
accounts for ERISA and other pension plans and other public and private
accounts.
The primary responsibility for the day-to-day management by the Manager of
the Funds' respective portfolios rests with committees organized for that
purpose.
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<PAGE>
Under the Management Contract with the Trust on behalf of each Fund, the
Manager selects and reviews each Fund's investments and provides executive
and other personnel for the management of the Trust. Pursuant to the Trust's
Agreement and Declaration of Trust, the Board of Trustees supervises the
affairs of the Trust as conducted by the Manager. In the event that the
Manager ceases to be the manager of the Funds, the right of the Trust to use
the identifying name "Martin Currie" or the prefix "MCBT" with respect to the
Trust or any Fund may be withdrawn.
Under the Management Contract, each Fund pays the Manager a quarterly
management fee based on the respective Fund's average net assets. The annual
rate at which each Fund pays a management fee, and the management fee paid by
each Fund for its last fiscal year, expressed as a percentage of the respective
Fund's average net assets, is set forth below.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
MANAGEMENT FEE MANAGEMENT FEE PAID FOR
LAST FISCAL YEAR
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ALL COUNTRIES FUND 1.00% --
OPPORTUNISTIC EAFE FUND 0.70 0.70%
GLOBAL EMERGING MARKETS FUND 0.80 0.80
ASIA PACIFIC FUND 1.50 1.50
EMEA FUND 1.50 1.50
JAPAN SMALL COMPANIES FUND 1.00 1.00
--------------------------------------------------------------------------------------------------------------------
</TABLE>
The Manager's fee for management of each Fund may be higher than that paid
by most other mutual funds but is comparable to the management fees of mutual
funds with similar investment objectives.
In order to limit the expenses of the All Countries Fund, the Manager has
agreed to waive its compensation and, to the extent necessary, bear other
expenses of the Fund, through April 30, 2001, to the extent that the Fund's
annual expenses (including the management fee but excluding brokerage, interest,
taxes and deferred organizational and extraordinary expenses) would exceed an
annual rate of 1.00% of the Fund's average monthly net assets. For purposes of
determining any such waiver or expense reimbursement, expenses of the Fund do
not reflect the application of custodial, transfer agency or other credits or
expense offset arrangements that may reduce the Fund's expenses.
The organizational expenses of the Funds as well as all other expenses
incurred in the operation of the Funds are borne by the relevant Fund, including
but not limited to brokerage commissions, transfer taxes and extraordinary
expenses in connection with its portfolio transactions, all applicable taxes,
the compensation of trustees who are not directors, officers or employees of the
Manager or its affiliates, interest charges, charges of custodians, registrars
and transfer agents, administrators, auditing and legal expenses.
The Manager and its affiliates advise other investment companies or
collective investment vehicles (including offshore funds) for which they receive
fees. Each of the Funds may invest in such affiliated investment vehicles, as
well as unaffiliated investment vehicles.
36
<PAGE>
As a shareholder of these kinds of investment vehicles, a Fund may indirectly
bear fees which are in addition to the fees the Fund pays its own service
providers. To the extent a Fund invests assets in an affiliated fund, those
assets are excluded for purposes of calculating the management fee payable by
the Fund to the Manager.
DESCRIPTION OF THE TRUST AND OWNERSHIP OF SHARES
The Trust is an open-end series investment company, registered under the
1940 Act, and organized as a Massachusetts business trust under the laws of
Massachusetts by an Agreement and Declaration of Trust dated May 20, 1994, as
amended.
The Declaration of Trust permits the trustees to issue an unlimited number
of full and fractional shares of beneficial interest which are presently divided
into six series. Each share of a series represents an equal proportionate
interest in that series with each other share. The Declaration of Trust also
permits the trustees, without shareholder approval, to subdivide any series of
shares into various sub-series (or classes) of shares with such dividend
preferences and other rights as the trustees may designate. The trustees may
also, without shareholder approval, establish one or more additional separate
portfolios for investments in the Trust or merge two or more existing
portfolios. Shareholders' investments in such a portfolio would be evidenced by
a separate series of shares.
Subject to the restrictions described under "Redemption of Shares," the
Trust's shares are freely transferable. Shareholders are entitled to dividends
as declared by the trustees, and, in liquidation of the relevant Fund's
portfolio, are entitled to receive the net assets of the portfolio. Shareholders
are entitled to vote at any meetings of shareholders. The Trust generally does
not hold annual meetings of shareholders and will do so only when required by
law. Special meetings of shareholders may be called for purposes such as
electing or removing trustees, changing a fundamental investment policy or
approving an investment advisory agreement. In addition, a special meeting of
shareholders of the Fund will be held if, at any time, less than a majority of
the trustees then in office have been elected by shareholders of the Fund.
The Declaration of Trust provides for the perpetual existence of the Trust.
The Trust, may, however, be terminated at any time by vote of at least
two-thirds of the outstanding shares of the Trust. The Declaration of Trust
further provides that the trustees may also terminate the Trust or any Fund upon
written notice to the shareholders.
37
<PAGE>
ADMINISTRATOR; CUSTODIAN;
TRANSFER AND DIVIDEND PAYING AGENT
State Street Bank and Trust Company (State Street), 225 Franklin Street,
Boston, MA 02110 serves as the Trust's administrator, custodian and transfer and
dividend paying agent. Each Fund pays State Street as administrator a fee at the
rate of 0.08% of such Fund's average net assets up to $125 million, 0.06% of the
next $125 million and 0.04% of those assets in excess of $250 million, subject
to certain minimum requirements, plus certain out of pocket costs. The amounts
paid to State Street as administrator under the relevant contract for each of
the Fund's last three fiscal years are set forth below.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
YEAR ENDED APRIL 30,
----------------------------------------------------------------------
2000 1999 1998
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPPORTUNISTIC EAFE FUND $164,100 $122,425 $103,773
GLOBAL EMERGING MARKETS FUND 118,243 73,785 54,976
ASIA PACIFIC FUND 228,935 82,673 58,649
EMEA FUND 71,101 55,000 33,551
JAPAN SMALL COMPANIES FUND 109,957 55,000 59,817
-------------------------------------------------------------------------------------------------------------------
</TABLE>
State Street also receives fees and compensation of expenses for certain
custodian and transfer agent services.
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP, 160 Federal Street, Boston, MA 02110 serves as
the Trust's independent accountants.
LEGAL COUNSEL
Ropes & Gray, One International Place, Boston, MA 02110, is the Trust's
legal counsel.
SHAREHOLDER INQUIRIES
Shareholders may direct inquiries to the Trust c/o Martin Currie, Inc.,
Saltire Court, 20 Castle Terrace, Edinburgh, Scotland, United Kingdom EH1 2ES
(Attention: Timothy Hall), tel. 011-44-131-229-5252, fax 011-44-131-479-4747.
During hours in which the offices in Scotland are closed, institutional
investors in the U.S. may contact Martin Currie Investor Services, Inc., an
affiliate of the Manager, 53 Forest Avenue, Old Greenwich, CT 06870, tel.
203-698-9031 (Attention: Steven Johnson). Shareholders may also direct inquiries
to the Trust by sending an e-mail message to [email protected], except
that, with respect to
38
<PAGE>
purchases and redemptions of shares, shareholders are asked to follow the
instructions set forth under "Purchase of Shares" and "Redemption of Shares"
above.
FINANCIAL HIGHLIGHTS INFORMATION
The financial highlights tables are intended to help investors understand
each Fund's recent financial performance. Certain information reflects financial
results for a single share of the relevant Fund. The total returns represent the
rate that an investor would have earned or lost on an investment in the relevant
Fund, assuming reinvestment of all dividends and distributions. This information
has been derived from the Funds' financial statements, which have been audited
by PricewaterhouseCoopers LLP. Its report and each Fund's financial statements
are included in the relevant Fund's annual report to shareholders, which is
available upon request.
39
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING FOR THE PERIOD
<TABLE>
<CAPTION>
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
APRIL 30, 2000 APRIL 30, 1999 APRIL 30, 1998 APRIL 30, 1997 APRIL 30, 1996
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING
-------------------
PERFORMANCE
-----------
Net asset value, beginning of period $ 13.490 $ 13.310 $ 11.320 $ 11.250 $ 9.860
---------- ----------- ----------- ----------- ----------
Net investment income 0.101 0.192 0.095 0.134 0.314
Net realized and unrealized gain(loss) on
investment and foreign currency
transactions 2.889 0.786 2.462 0.286 1.239
---------- ----------- ----------- ----------- -----------
Total from investment operations 2.990 0.978 2.557 0.420 1.553
---------- ----------- ----------- ----------- -----------
Less distributions:
Net investment income (0.203) (0.106) (0.153) (0.229) (0.167)
In excess of net investment income (0.023) 0.000 0.000 (0.127) (0.023)
Net realized gains (0.952) (0.728) (0.422) 0.000 0.000
---------- ----------- ----------- ----------- -----------
Total distributions (1.178) (0.834) (0.575) (0.356) (0.190)
---------- ----------- ----------- ----------- -----------
Paid in capital from subscription and
redemption fees 0.018 0.036 0.008 0.006 0.027
---------- ----------- ----------- ----------- -----------
Net asset value, end of period $ 15.320 $ 13.490 $ 13.310 $ 11.320 $ 11.250
========== =========== =========== =========== ===========
TOTAL INVESTMENT RETURN (1) 21.66% 7.92% 23.33% 3.85% 16.17%
----------------------- ========= ========== ========== ========== ==========
RATIOS AND SUPPLEMENTAL DATA
----------------------------
Net assets, end of period $261,771,264 $213,865,065 $159,362,284 $120,649,807 $108,295,237
Operating expenses, net, to average
net assets 0.92% 0.96% 0.96% 0.98% 1.00%
Operating expenses, gross, to average
net assets 0.92% 0.96% 0.96% 0.98% 1.05%
Net investment income to average net assets 0.89% 0.85% 1.08% 0.90% 1.46%
Portfolio turnover rate 71% 82% 63% 49% 37%
Per share amount of fees waived $ 0.000 $ 0.000 $ 0.000 $ 0.000 $ 0.012
</TABLE>
--------------------------------------------------------------------------------
(1) Total return at net asset value assuming all distributions reinvested and
no purchase premiums or redemption fees. Total return would have been lower
had certain expenses not been waived.
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING FOR THE PERIOD
<TABLE>
<CAPTION>
YEAR YEAR YEAR FEBRUARY 14, 1997*
ENDED ENDED ENDED THROUGH
APRIL 30, 2000(4) APRIL 30, 1999 APRIL 30, 1998 APRIL 30, 1997
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING
-------------------
PERFORMANCE
-----------
Net asset value, beginning of period $ 8.010 $ 8.990 $ 10.020 $ 10.000
------------- ------------- ------------- --------
Net investment income 0.030 0.081 0.004 0.055
Net realized and unrealized gain (loss) on
investment and foreign currency transactions 1.964 (1.016) (0.883) (0.035)
------------- ------------- ------------- -------------
Total from investment operations 1.994 (0.935) (0.879) 0.020
------------- ------------- ------------- -------------
Less distributions:
Net investment income (0.000) (0.012) (0.086) 0.000
In excess of net investment income (0.000) (0.033) (0.053) 0.000
Net realized gains (0.124) 0.000 (0.058) 0.000
-------------- ------------- ------------- ------------
Total distributions (0.124) (0.045) (0.197) 0.000
------------- ------------- ------------- ------------
Paid in capital from subscription and
redemption fees 0.000 0.000 0.046 0.000
------------- ------------- ------------- -------------
Net asset value, end of period $ 9.880 $ 8.010 $ 8.990 $ 10.020
============= ============= ============= =============
TOTAL INVESTMENT RETURN (1) (2) 25.00% (10.26)% (8.21)% 0.20%
----------------------- ============ ============ ============ ============
RATIOS AND SUPPLEMENTAL DATA
----------------------------
Net assets, end of period $166,388,245 $131,628,560 $99,831,879 $50,095,856
Operating expenses, net, to average net assets 1.07% 1.12% 1.14% 1.33%(3)
Operating expenses, gross, to average net assets 1.07% 1.12% 1.14% 1.33%(3)
Net investment income to average net assets 0.32% 1.16% 0.98% 2.83%(3)
Portfolio turnover rate 146% 140% 89% 0%
-------------------------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of investment operations.
(1) Total return at net asset value assuming all distributions reinvested and no
purchase premiums or redemption fees.
(2) Periods less than one year are not annualized.
(3) Annualized.
(4) The per share amounts were computed using an average number of shares
outstanding during the year.
<PAGE>
MCBT ASIA PACIFIC EX JAPAN FUND
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING FOR THE PERIOD
<TABLE>
<CAPTION>
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
APRIL 30, APRIL 30, APRIL 30, APRIL 30, APRIL 30,
2000(2) 1999(2) 1998 1997(2) 1997(2)
------------ ---------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING
-------------------
PERFORMANCE
-----------
Net asset value, beginning of period $ 2.490 $ 2.590 $ 9.630 $ 12.360 $ 9.980
----------- ----------- ----------- ----------- ----------
Net investment (loss) (0.003) (0.005) (0.227) (0.101) (0.029)
Net realized and unrealized gain (loss) on investment
and foreign currency transactions 0.073* (0.095) (6.871) (2.503) 2.466
----------- ----------- ---------- ------------ ------
Total from investment operations 0.070 (0.100) (7.098) (2.604) 2.417
----------- ----------- ---------- ----------- ------
Less distributions:
In excess of net investment income 0.000 0.000 0.000 (0.009) 0.000
Net realized gains 0.000 0.000 0.000 0.000 (0.209)
In excess of net realized gains 0.000 0.000 0.000 (0.305) 0.000
----------- ----------- ---------- ----------- ------
Total distributions 0.000 0.000 0.000 (0.314) (0.209)
----------- ----------- ---------- ----------- ------
Paid in capital from subscription and
redemption fees 0.000 0.000 0.058 0.188 0.172
----------- ----------- ---------- ----------- -----------
Net asset value, end of period $ 2.560 $ 2.490 $ 2.590 $ 9.630 $ 12.360
=========== =========== =========== =========== ===========
TOTAL INVESTMENT RETURN (1) 2.81% (3.86)% (73.10)% (19.82)% 26.30%
----------------------- ========== ========== ========= ========== ======
RATIOS AND SUPPLEMENTAL DATA
----------------------------
Net assets, end of period $375,444,715 $199,723,978 $21,072,974 $84,384,554 $129,326,397
Operating expenses, net, to average
net assets 1.72% 1.83% 2.00% 1.89% 1.93%
Operating expenses, gross, to average
net assets 1.72% 1.83% 2.23% 1.98% 2.18%
Net investment income (loss) to
average net assets (0.12)% (0.26)% (0.09)% (0.89)% (0.27)%
Portfolio turnover rate 114% 158% 162% 118% 65%
Per share amount of fees waived $ 0.000 $ 0.000 $ 0.552 $ 0.011 $ 0.027
-------------------------------------------------------------------------------------------------------------------
</TABLE>
* The amount shown for a share outstanding does not correspond with the
aggregate net realized and unrealized gain (loss) on investments for the
period ended due to the timing of sales of Fund shares in relation to the
fluctuating market value of the investments.
(1) Total return at net asset value assuming all distributions reinvested and no
purchase premiums or redemption fees. Total return would have been lower had
certain expenses not been waived.
(2) The per share amounts were computed using an average number of shares
outstanding during the year.
<PAGE>
MCBT EMEA FUND
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING FOR THE PERIOD
<TABLE>
<CAPTION>
Year Year June 25, 1997*
Ended Ended through
April 30, 2000(4) April 30, 1999 April 30, 1998
----------------- -------------- --------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
-------------------------------
Net asset value, beginning of period $ 8.480 $ 10.850 $ 10.000
----------------- ------------- ----------
Net investment income 0.006 0.119 0.041
Net realized and unrealized gain (loss) on investment
and foreign currency transactions 2.319 (2.041) 0.887
----------------- ------------- ----------
Total from investment operations 2.325 (1.922) 0.928
----------------- ------------- ----------
Less distributions:
Net investment income 0.000 (0.112) (0.020)
In excess of net investment income 0.000 (0.046) 0.00
Net realized gains (0.055) (0.371) (0.175)
------------------ ------------- ----------
Total distributions (0.055) (0.529) (0.195)
----------------- ------------- ----------
Paid in capital from subscription and
redemption fees 0.000 0.081 0.117
----------------- ------------- ----------
Net asset value, end of period $ 10.750 $ 8.480 $ 10.850
================== ============= ==========
TOTAL INVESTMENT RETURN (1) (2) 27.44% (16.20)% 10.71%
----------------------- ================== ================ ==========
RATIOS AND SUPPLEMENTAL DATA
----------------------------
Net assets, end of period $ 107,248,151 $ 29,149,329 $ 78,938,181
Operating expenses, net, to average net assets 1.79% 2.13% 1.93%(3)
Operating expenses, gross, to average net assets 1.79% 2.13% 1.93%(3)
Net investment income to average net assets 0.06% 0.95% 0.84%(3)
Portfolio turnover rate 109% 117% 81%
-------------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of investment operations.
(1) Total return at net asset value assuming all distributions reinvested and no
purchase premiums or redemption fees.
(2) Periods less than one year are not annualized.
(3) Annualized.
(4) The per share amounts were computed using an average number of shares
outstanding during the year.
<PAGE>
MCBT JAPAN SMALL COMPANIES FUND
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING FOR THE PERIOD
<TABLE>
<CAPTION>
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
APRIL 30, APRIL 30, APRIL 30, APRIL 30, APRIL 30,
2000 1999 1998 1997 1996
------------ ------------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING
-------------------
PERFORMANCE
-----------
Net asset value, beginning of period $ 9.290 $ 6.460 $ 7.720 $ 10.770 $ 9.610
----------- ----------- ---------- -------- --------
Net investment income (loss) (0.095) 0.102 (0.005) (0.027) (0.034)
Net realized and unrealized gain (loss)
on investment and foreign currency
transactions 5.544 2.727 (1.189) (2.384) 1.248
----------- ----------- ----------- ----------- -------
Total from investment operations 5.449 2.829 (1.194) (2.411) 1.214
----------- ----------- ----------- ----------- -------
Less distributions:
Net investment income 0.000 0.000 (0.069) (0.203) 0.000
In excess of net investment income 0.000 0.000 0.000 (0.314) (0.097)
Return of capital 0.000 0.000 (0.029) 0.000 0.000
Net realized gains (0.089) 0.000 0.000 (0.100) 0.000
In excess of net realized gains 0.000 0.000 0.000 (0.040) 0.000
----------- ----------- ----------- ----------- ------
Total distributions (0.089) 0.000 (0.098) (0.657) (0.097)
----------- ----------- ----------- ----------- -------
Paid in capital from subscription and
redemption fees 0.000 0.001 0.032 0.018 0.043
----------- ----------- ----------- ----------- --------
Net asset value, end of period $ 14.650 $ 9.290 $ 6.460 $ 7.720 $ 10.770
=========== =========== =========== ========== ==========
TOTAL INVESTMENT RETURN (1) 58.55% 43.80% (15.01)% (22.69)% 13.13%
----------------------- ========== ========== ========== =========== =========
RATIOS AND SUPPLEMENTAL DATA
----------------------------
Net assets, end of period $149,821,497 $81,800,071 $57,506,372 $66,748,656 $88,863,054
Operating expenses, net, to average
net assets 1.21% 1.31% 1.29% 1.26% 1.37%
Operating expenses, gross, to average
net assets 1.21% 1.31% 1.29% 1.26% 1.37%
Net investment income(loss) to
average net assets (0.57)% (0.34)% (0.30)% (0.41)% (0.36)%
Portfolio turnover rate 37% 27% 26% 26% 37%
Per share amount of fees waivd $0.000 $0.000 $0.000 $0.000 $0.000
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Total return at net asset value assuming all distributions reinvested and
no purchase premiums or redemption fees. Total return would have been lower
had certain expenses not been waived.
<PAGE>
FOR MORE INFORMATION ABOUT
THE FUNDS OF MARTIN CURRIE BUSINESS TRUST
The Funds' Statement of Additional Information (SAI) and, except with
respect to MCBT All Countries World ex U.S. Fund (which commenced operations
only recently and has not been required to produce any shareholder reports),
each Fund's annual and semi-annual reports to shareholders include additional
information about the Funds. The SAI, and the independent accountant's report
and financial statements included in each Fund's most recent annual report to
its shareholders, are incorporated by reference into this Private Placement
Memorandum. Each Fund's annual report discusses the market conditions and
investment strategies that significantly affected the Fund's performance during
its last fiscal year. You may get free copies of these materials, request other
information about the Funds or make shareholder inquiries, by calling Steven
Johnson at 1-800-698-9016 or by sending an e-mail message to
[email protected].
You may review and copy information about the Funds, including the SAI,
at the Securities and Exchange Commission's public reference room in Washington,
D.C. You may call the Commission at 1-202-942-8090 for information about the
operation of the public reference room. You may also access reports and other
information about the Funds on the EDGAR Database on the Commission's Internet
site at http://www.sec.gov. You may get copies of this information, with payment
of a duplication fee, by electronic request at the following e-mail address:
[email protected], or by writing the Commission's Public Reference Section,
Washington, D.C. 20549-0102. You may need to refer to the Trust's file number.
File No. 811-08612
<PAGE>
EXHIBIT A
MARTIN CURRIE BUSINESS TRUST
SUBSCRIPTION AGREEMENT
for
Shares of Beneficial Interest
Amount of
Subscription
(US$)
MCBT All Countries World ex U.S. Fund -------------
MCBT Opportunistic EAFE Fund -------------
MCBT Global Emerging Markets Fund -------------
MCBT Asia Pacific ex Japan Fund -------------
MCBT EMEA Fund -------------
MCBT Japan Small Companies Fund -------------
Total Amount Subscribed US$
--------------------
SUBSCRIBER INFORMATION
Name of Subscriber:
-------------------------------------------------------------
(hereinafter "SUBSCRIBER")
Name for Registration
--------------------------------------------------------------------------------
(if different from above)
Person Signing (if different):
--------------------------------------------------
Capacity (if applicable):
-------------------------------------------------------
<PAGE>
Address:
---------------------------------------------------------------
(Number and Street)
----------------------------------------------------------------
(City) (State) (Zip Code)
Telephone:
---------------------------------------------------------------
Fax:
---------------------------------------------------------------
BANK INFORMATION
Bank Name:
---------------------------------------------------------------
ABA Number:
---------------------------------------------------------------
Address:
---------------------------------------------------------------
(Number and Street)
---------------------------------------------------------------
(City) (State) (Zip Code)
Telephone:
---------------------------------------------------------------
Fax:
---------------------------------------------------------------
Account Name:
---------------------------------------------------------------
Account Number:
---------------------------------------------------------------
2
<PAGE>
SUBSCRIBER hereby agrees as follows:
1. SUBSCRIBER hereby subscribes for shares of beneficial interest in the one
or more series (each a "Fund") of Martin Currie Business Trust (the
"Trust") indicated above and in the dollar amount(s) set forth above. Upon
completion of this Subscription Agreement, SUBSCRIBER should send this
agreement by facsimile and courier to:
Martin Currie Business Trust
c/o Martin Currie, Inc.
20 Castle Terrace
Edinburgh, Scotland
United Kingdom EH1 2ES
ATTENTION: Timothy Hall
FAX: 011-44-131-479-4747
After the Trust has reviewed the completed Subscription Agreement,
SUBSCRIBER will receive telephonic notice of the acceptance or non-
acceptance of the subscription. If the subscription is accepted by the
Trust, SUBSCRIBER agrees to wire immediately available funds in the amounts
indicated on the cover of this Subscription Agreement to:
State Street Bank and Trust Company
Boston, Massachusetts
ABA # 011000028
BNF = AC-42306662 "Mutual Fund F/B/O
Martin Currie Business Trust"
OBI = "NAME OF FUND"
Shareholder Name
2. SUBSCRIBER agrees that, unless the Trust is otherwise specifically
notified, this subscription will be treated as a subscription for shares of
beneficial interest in the indicated Funds (the "Shares") to become
effective following the satisfaction of all of the conditions specified in
Section 3 of this Subscription Agreement unless otherwise agreed by the
Trust.
3. SUBSCRIBER understands and agrees that this subscription for the Shares
is ineffective and that SUBSCRIBER will not become a shareholder of the
Trust until (i) SUBSCRIBER completes all applicable information requested
in this Subscription Agreement, (ii) SUBSCRIBER executes this Subscription
Agreement and delivers it to the Trust, (iii) the Subscription Agreement is
accepted by or on behalf of the Trust, which acceptance may be withheld in
the Trust's sole discretion, and (iv) the Trust can
3
<PAGE>
and has confirmed that the subscription amount has been received in the
account listed in Section 1 above.
4. SUBSCRIBER represents and warrants to the Trust that SUBSCRIBER has
received a copy of the Private Placement Memorandum dated August 21, 2000
(the "Placement Memorandum") relating to the offer for sale by the Trust of
the Shares and has had an opportunity to request a Statement of Additional
Information dated as of August 21, 2000 (the "SAI"), and has reviewed the
Placement Memorandum carefully prior to executing this Subscription
Agreement. SUBSCRIBER acknowledges that SUBSCRIBER had the opportunity to
ask questions of, and receive answers from, representatives of the Trust
concerning terms and conditions of the offering and to obtain any
additional information necessary to verify the accuracy of the information
contained in the Placement Memorandum or the SAI. SUBSCRIBER further
acknowledges that no person is authorized to give any information or to
make any representation which is contrary to the information contained in
the Placement Memorandum or the SAI and that, if given or made, any such
contrary information or representation may not be relied upon as having
been authorized.
5. SUBSCRIBER hereby elects:
- To reinvest all distributions of income and realized capital gains from
a Fund in additional shares of that Fund OR
- To receive all distributions of income and realized capital gains from
a Fund as cash when declared OR
- To reinvest all realized capital gains from a Fund in additional shares
of the Fund and to receive all distributions of income as cash.
SUBSCRIBER understands and agrees that, unless otherwise indicated above,
SUBSCRIBER will be deemed to have elected to reinvest all distributions of
income and capital gains.
6. SUBSCRIBER understands and acknowledges that, in selling the Shares to
SUBSCRIBER, the Trust is relying on the representations made and
information supplied in this Subscription Agreement to determine that the
sale of the Shares to SUBSCRIBER complies with (or meets the requirements
of any applicable exemption from) the Securities Act of 1933, as amended
(the "1933 Act"), and applicable state securities laws.
7. SUBSCRIBER represents that it is acquiring the Shares subscribed for by
this Subscription Agreement for its own account for investment only and
not with a view to any resale or distribution.
4
<PAGE>
8. SUBSCRIBER represents that it (either alone or together with its purchaser
representative, whose identity has been disclosed to the Trust, if any) has
such knowledge and experience in financial and business matters to be
capable of evaluating the merits and risks of the investment represented by
the Trust and that SUBSCRIBER is able to bear the economic risk of this
investment including the risk of loss of the investment.
9. SUBSCRIBER understands that the Trust will offer the Shares only to
investors which qualify as "accredited investors" as defined in Regulation
D under the 1933 Act. SUBSCRIBER represents that it qualifies as an
"accredited investor" because SUBSCRIBER is described in the paragraph or
paragraphs indicated below: (CHECK ONE OR MORE)
- A natural person who had an individual income in excess of $200,000 in
each of the two most recent years or joint income with his or her
spouse in excess of $300,000 in each of those years and has a
reasonable expectation of reaching the same income level in the
current year.
- A natural person whose individual net worth, or joint net worth with
his or her spouse, exceeds $1,000,000 at the time of purchase of the
Shares.
A trust, with total assets in excess of $5,000,000, not formed for the
specific purpose of acquiring the Shares offered, whose purchase is
directed by a sophisticated person as described in Rule 506(b)(2)(ii)
of Regulation D of the 1933 Act.
- An organization described in Section 501(c)(3) of the Internal Revenue
Code, corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the
Shares offered, with total assets in excess of $5,000,000.
- A private business development company as defined in Section 202(a)
(22) of the Investment Advisers Act of 1940, as amended.
- A bank as defined in Section 3(a)(2) of the 1933 Act, or savings and
loan association or other institution as defined in Section 3(a)(5)(A)
of the 1933 Act, whether acting in its individual or fiduciary
capacity; a broker or dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934; an insurance company as defined in
Section 2(13) of the 1933 Act; an investment company registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), or a
business development company as defined in Section 2(a)(48) of the
1940 Act; a Small Business Investment Company
5
<PAGE>
licensed by the U.S. Small Business Administration under Section
301(c) or (d) of the Small Business Investment Act of 1958; an
employee benefit plan within the meaning of Title I of the Employee
Retirement Income Security Act of 1974, if the investment decision is
made by a plan fiduciary, as defined in Section 3(21) of such Act,
which is either a bank, savings and loan association, insurance
company, or registered investment adviser, or if the employee benefit
plan has total assets in excess of $5,000,000 or, if a self-directed
plan, with investment decisions made solely by persons that are
accredited investors.
- A Trustee or Executive Officer of the Trust whose purchase exceeds
$1,000,000.
- An entity in which all of the equity owners are accredited investors
as defined above.
10. SUBSCRIBER represents that it is a resident of (or, if SUBSCRIBER is
an entity, its principal offices are located in) __________________.
(U.S. State)
11. SUBSCRIBER agrees to promptly notify the Trust of any development that
causes any of the representations made or information supplied in this
Subscription Agreement to be untrue at any time.
12. SUBSCRIBER understands that the Shares are not publicly traded and
that there will be no public market for the Shares upon completion of
the Offering.
13. SUBSCRIBER understands and agrees that the Shares are being sold in a
transaction which is exempt from the registration requirements of the
1933 Act and, in certain cases, of state securities laws, and that
such interests will be subject to transfer restrictions under the 1933
Act and applicable state securities laws and, except to the extent
that redemption is permitted as described in the Placement Memorandum
and the SAI, must be held indefinitely unless subsequently registered
under the 1933 Act and applicable state securities laws or an
exemption from such registration is available. The undersigned further
understands and agrees that the Trust is under no obligation to
register such Shares and that any exemptions are extremely limited.
14. SUBSCRIBER agrees to transfer all or any part of its Shares only in
compliance with all applicable conditions and restrictions contained
in this Subscription Agreement, the Placement Memorandum, the SAI, the
1933 Act and any applicable state securities laws.
15. SUBSCRIBER hereby agrees to be bound by all terms and conditions of
this Subscription Agreement.
6
<PAGE>
This Subscription Agreement shall be governed by and construed under the laws of
The Commonwealth of Massachusetts and is intended to take effect as an
instrument under seal and shall be binding on SUBSCRIBER in accordance with its
terms.
Please sign this Subscription Agreement exactly as you wish your Shares to be
registered. (The information supplied by you below should conform to that given
on the cover page).
Dated: __________, _____ Name of SUBSCRIBER:____________________
By:_______________________
Name of Person Signing if different
from SUBSCRIBER:______________________
(please print)
Capacity:______________________
(please print)
Accepted:
MARTIN CURRIE BUSINESS TRUST
By:___________________________
Name:
Title:
A copy of the Agreement and Declaration of Trust establishing the Trust is
on file with the Secretary of State of The Commonwealth of Massachusetts, and
notice is hereby given that this Subscription Agreement is executed on behalf of
the Trust by officers of the Trust as officers and not individually and that the
obligations of or arising out of this Agreement are not binding upon any of the
trustees, officers or shareholders of any Fund individually but are binding only
upon the assets and property belonging to the Funds.
7
<PAGE>
MARTIN CURRIE BUSINESS TRUST
MCBT All Countries World ex U.S. Fund
MCBT Opportunistic EAFE Fund
MCBT Global Emerging Markets Fund
MCBT Asia Pacific ex Japan Fund
MCBT EMEA Fund
MCBT Japan Small Companies Fund
STATEMENT OF ADDITIONAL INFORMATION
August 21, 2000
This Statement of Additional Information is not a prospectus. This
Statement of Additional Information relates to the Martin Currie Business Trust
Private Placement Memorandum dated August 21, 2000, and should be read in
conjunction therewith. Certain disclosure has been incorporated by reference to
portions of the Trust's Annual Reports to Shareholders. A free copy of the
Trust's Annual Reports to Shareholders or Private Placement Memorandum may be
obtained by writing or telephoning (by collect call) Martin Currie Business
Trust, c/o Martin Currie, Inc., Saltire Court, 20 Castle Terrace, Edinburgh,
Scotland EH1 2ES (Attention: Timothy Hall), tel. 011-44-131-229-5252, fax
011-44-131-479-4747 or c/o Martin Currie Investor Services, Inc., 53 Forest
Avenue, Old Greenwich, Connecticut 06870 (Attention: Steven Johnson), tel.
203-698-9031.
<PAGE>
TABLE OF CONTENTS
INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS...............................1
MANAGEMENT OF THE TRUST........................................................4
INVESTMENT ADVISORY AND OTHER SERVICES.........................................7
DISTRIBUTION AND SERVICING PLANS...............................................9
PORTFOLIO TRANSACTIONS AND BROKERAGE..........................................10
DESCRIPTION OF THE TRUST......................................................11
HOW TO BUY SHARES.............................................................14
NET ASSET VALUE AND OFFERING PRICE............................................14
REDEMPTIONS...................................................................15
INCOME DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS AND TAX STATUS...................15
FINANCIAL STATEMENTS..........................................................18
i
<PAGE>
INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS
The investment objective and policies of each series ("Fund") of Martin
Currie Business Trust (the "Trust"), are summarized in the Private Placement
Memorandum under "Fund Summaries," "Information About the Funds' Investment
Strategies and Related Risks" and "More Information About the Funds' Investment
Strategies and Risks." The investment objective and policies of each Fund set
forth in the Private Placement Memorandum and in this Statement of Additional
Information may be changed by the Trust's trustees, without shareholder
approval except that any policy explicitly identified as "fundamental" may not
be changed without the approval of the holders of a majority of the outstanding
shares of the relevant Fund (which means the lesser of (i) 67% of the shares of
that Fund represented at a meeting at which 50% of the outstanding shares are
represented or (ii) more than 50% of the outstanding shares).
In addition to its investment objective and policies set forth in the
Private Placement Memorandum, the following investment restrictions are policies
of each Fund (and those marked with an asterisk are fundamental policies of each
Fund):
Each Fund will not:
*(1) Act as underwriter of securities issued by other persons, except to
the extent that, in connection with the disposition of portfolio securities,
it may be deemed to be an underwriter under certain federal securities laws.
(2) Change its classification pursuant to Section 5(b) of the Investment
Company Act of 1940, as amended (the "1940 Act") from a "diversified" management
investment company to a "non-diversified" one without shareholder approval.
*(3) Borrow money in excess of 10% of its total assets (taken at cost) or
5% of its total assets (taken at current value), whichever is lower, nor borrow
any money except as a temporary measure for extraordinary or emergency purposes,
however, any sale coupled with an agreement to repurchase or any Fund's use of
reverse repurchase agreements and "dollar roll" arrangements shall not
constitute borrowing by such Fund for purposes of this restriction.
*(4) Purchase or sell real estate or interests in real estate, except that
the Fund may purchase and sell securities that are secured by real estate or
interests in real estate and may purchase securities issued by companies that
invest or deal in real estate.
*(5) Invest in commodities, except that the Fund may invest in financial
futures contracts and options thereon, and options on currencies.
*(6) Make loans to others, except through the purchase of qualified debt
obligations, the entry into repurchase agreements and/or the making of loans of
portfolio securities consistent with the Fund's investment objectives and
policies.
<PAGE>
*(7) Purchase any securities which would cause more than 25% of the value
of the Fund's total assets at the time of purchase to be invested in the
securities of issuers conducting their principal business activities in the same
industry; provided that there shall be no limit on the purchase of U.S.
government securities, including securities issued by any agency or
instrumentality of the U.S. government, and related repurchase agreements. The
Securities and Exchange Commission (SEC) takes the position that government
securities of a single foreign country (including agencies and instrumentalities
of such government, to the extent such obligations are backed by the assets and
revenues of such government) are a separate industry for these purposes.
*(8) Pledge, hypothecate, mortgage or otherwise encumber the Fund's assets
except to secure borrowings and as margin or collateral for financial futures,
swaps, and other negotiable transactions in the over-the-counter market.
The Trust understands that the staff of the SEC deems certain transactions
that a Fund may enter into to involve the issuance of a senior security unless
certain cash, U.S. government securities, high grade debt instruments or other
liquid securities are deposited in a segregated account or are otherwise
covered. Such transactions include: short sales, reverse repurchase agreements,
forward contracts, futures contracts and options thereon, options on securities
and currencies, dollar rolls, and swaps, caps, floors and collars.
CONVERTIBLE SECURITIES
Convertible securities are fixed income securities that may be converted at
either a stated price or a stated rate into underlying shares of common stock.
Convertible securities have general characteristics similar to both fixed income
and equity securities. Although to a lesser extent than with fixed income
securities generally, the market value of convertible securities tends to
decline as interest rates increase and, conversely, tends to increase as
interest rates decline. In addition, because of the conversion feature, the
market value of convertible securities tends to vary with fluctuations in the
market value of the underlying common stocks and, therefore, also will react to
variations in the general market for equity securities.
Like fixed income securities, convertible securities are investments which
provide for a stable stream of income with generally higher yields than common
stocks. Of course, like all fixed income securities, there can be no assurance
of current income because the issuers of the convertible securities may default
on their obligations. Convertible securities, however, generally offer lower
interest or dividend yields than non-convertible securities of similar quality
because of the potential for capital appreciation. A convertible security, in
addition to providing fixed income, offers the potential for capital
appreciation through the conversion feature, which enables the holder to benefit
from increases in the market price of the underlying common stock. However,
there can be no assurance of capital appreciation because securities prices
fluctuate.
2
<PAGE>
Convertible securities generally are subordinated to other similar but
non-convertible securities of the same issuer, although convertible bonds enjoy
seniority in right of payment to all equity securities, and convertible
preferred stock is senior to common stock of the same issuer. Because of the
subordination feature, however, convertible securities typically have lower
ratings than similar non-convertible securities.
YANKEE BONDS
The Funds may invest in U.S. dollar denominated bonds sold in the United
States by non-U.S. issuers ("Yankee bonds"). As compared with bonds issued in
the United States, such bond issues normally carry a higher interest rate but
are less actively traded.
REPURCHASE AGREEMENTS
Pursuant to guidelines adopted by the trustees of the Trust, each Fund may
enter into repurchase agreements, by which the Fund purchases a security and
obtains a simultaneous commitment from the seller (a bank or, to the extent
permitted by the 1940 Act, a recognized securities dealer) to repurchase the
security at an agreed upon price and date (usually seven days or less from the
date of original purchase). The resale price is in excess of the purchase price
and reflects an agreed upon market rate unrelated to the coupon rate on the
purchased security. Such transactions afford the Funds the opportunity to earn a
return on temporarily available cash at minimal market risk. While the
underlying security may be a bill, certificate of indebtedness, note or bond
issued by an agency, authority or instrumentality of the U.S. Government, the
obligation of the seller is not guaranteed by the U.S. Government and there is a
risk that the seller may fail to repurchase the underlying security. In such
event, the Fund would attempt to exercise rights with respect to the underlying
security, including possible disposition in the market. However, the Fund may be
subject to various delays and risks of loss, including (a) possible declines in
the value of the underlying security during the period while the Fund seeks to
enforce its rights thereto and (b) inability to enforce rights and the expenses
involved in attempted enforcement. Pursuant to the guidelines, Martin Currie,
Inc. (the "Manager") maintains an approved list of banks and non-bank dealers
with which the Trust may engage in repurchase agreement transactions, and the
Manager may propose changes to such list which are reviewed by the trustees of
the Trust on at least a quarterly basis.
Currently, State Street Bank and Trust Company is the only counterparty on
the approved list.
TEMPORARY DEFENSIVE STRATEGIES
For temporary defensive purposes, each Fund may vary its investment policy
during periods in which conditions in certain countries or securities markets or
other economic or
3
<PAGE>
political conditions warrant. For discussion of the types of investments each
Fund may make in assuming a temporary defensive position, see "Information
About the Funds' Investment Strategies and Related Risks" and "More Information
About the Funds' Investment Strategies and Risks -- Temporary Defensive
Strategies" in the Private Placement Memorandum.
MANAGEMENT OF THE TRUST
The trustees of the Trust are responsible for generally overseeing the
conduct of Fund business. Subject to such policies as the trustees may
determine, Martin Currie, Inc. (the "Manager") furnishes a continuing investment
program for each Fund and makes investment decisions on its behalf. Subject to
the control of the trustees, the Manager also manages each Fund's other affairs
and business.
The trustees and officers of the Trust and their principal occupations
during the past five years are as follows:
C. JAMES P. DAWNAY* 53 -- TRUSTEE AND PRESIDENT. Deputy Chairman of Martin
Currie Limited since 1999. Formerly Director of Corporate Development at Martin
Currie Limited since 1992. Prior to joining Martin Currie Limited, Director of
Mercury Asset Management and Chairman of Mercury Fund Managers.
PATRICK R. WILMERDING 56 -- TRUSTEE. 79 Milk Street, Room 907, Boston, MA
02109. Self-employed investment manager since 1993. Director of The
Providence Journal. Formerly, Director of Lenox Capital and Division Executive
of The First National Bank of Boston.
SIMON D. ECCLES 64 -- TRUSTEE. 27 Chestnut Street, Boston, MA 02108.
Chairman and Manager of Venturi Investment Trust.
COLIN WINCHESTER 50 -- VICE PRESIDENT AND TREASURER. Director of Finance
and Administration of Martin Currie Limited. since 1997. Associated with Martin
Currie Limited since 1994.
J. GRANT WILSON 37 -- VICE PRESIDENT. Director of Martin Currie
Investment Management Ltd. and head of the global technology research group
Associated with the Martin Currie Group since 1992. Formerly a North American
fund manager at Gartmore Investments.
---------------------------------
* Trustee who is an "interested person" (as defined in the 1940 Act) of the
Trust and the Manager.
4
<PAGE>
JULIAN M.C. LIVINGSTON 40 -- CLERK. Group Legal Director at Martin Currie
Group since April 1997. Formerly Legal Executive and Compliance officer at
Martin Currie Group since August 1992.
Previous positions during the past five years with Martin Currie are
omitted, if not materially different from the positions listed.
The address of each trustee and officer of the Trust affiliated with Martin
Currie is Saltire Court, 20 Castle Terrace, Edinburgh, Scotland EH1 2ES. The
Trust pays no compensation to its officers or to the trustees listed above who
are interested persons of the Trust. For the fiscal year ended April 30, 2000,
Simon Eccles and Patrick Wilmerding were paid $10,000 each. Currently, the Trust
pays both Messrs. Eccles and Wilmerding $10,000 per annum.
As of the date hereof, the trustees and officers as a group owned less than
1% of the outstanding shares of each Fund.
Each of the Trust and the Manager has adopted a Code of Ethics under Rule
17j-l of the 1940 Act containing provisions and requirements designed to
identify and address certain conflicts of interest between the personal
investment activities of personnel of the Trust or of the Manager and the
interests of the Funds. These Codes of Ethics permit personnel to invest in
securities, including securities that may be purchased or held by the Funds,
subject to restrictions.
The following table sets forth the name, address and percentage ownership
of the control persons and each other holder of 5% or more of a Fund's
outstanding securities as of July 31, 2000. Other than those shareholders noted
below, the Trust believes that no person or group owns, of record or
beneficially, 5% or more of the shares of any Fund. A holder is deemed to
control a Fund through possession of beneficial ownership, either directly or
indirectly, of more than 25% of the Fund's shares.
<TABLE>
<CAPTION>
OPPORTUNISTIC EAFE FUND
--------------------------------------------------------------------------------------------------------------------
PERCENTAGE
OF SHARES
SHAREHOLDER ADDRESS HELD
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Children's Memorial Medical Center 2300 Children's Plaza
Chicago,IL 60614 19.9
--------------------------------------------------------------------------------------------------------------------
Medtronics Inc. 7000 Central Ave, N.E.
Minneapolis, MN 55432 9.5
--------------------------------------------------------------------------------------------------------------------
Bankers Trust 500 Washington Avenue, Suite 1010
St. Louis, MO 63102 7.8
--------------------------------------------------------------------------------------------------------------------
Georgia Tech Foundation 177 North Avenue, Room 109
Alanta, GA 30332 7.6
--------------------------------------------------------------------------------------------------------------------
National Geographic Society 1145 17th Street NW
Washington, DC. 20036 7.0
--------------------------------------------------------------------------------------------------------------------
5
<PAGE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERCENTAGE
OF SHARES
SHAREHOLDER ADDRESS HELD
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
The Fresh Air Fund 1040 Avenue of the Americas
New York, NY 10018 6.2
--------------------------------------------------------------------------------------------------------------------
<CAPTION>
GLOBAL EMERGING MARKETS FUND
--------------------------------------------------------------------------------------------------------------------
PERCENTAGE
OF SHARES
SHAREHOLDER ADDRESS HELD
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
State Universities Retirement System of Illinois 1901 Fox Drive
P.O. Box 2710
Champaign, IL 61825-2710 100.0
--------------------------------------------------------------------------------------------------------------------
<CAPTION>
ASIA PACIFIC FUND
--------------------------------------------------------------------------------------------------------------------
PERCENTAGE
OF SHARES
SHAREHOLDER ADDRESS HELD
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Pennsylvania Public Schools Employee Retirement P.O. Box 125
Harrisburg, PA 17108-0125 41.2
--------------------------------------------------------------------------------------------------------------------
State Universities Retirement System of Illinois 1901 Fox Drive
P.O. Box 2710
Champaign, IL 61825-2710 12.1
--------------------------------------------------------------------------------------------------------------------
Maine State Retirement System State House Station #46
Augusta, ME 04333 9.9
--------------------------------------------------------------------------------------------------------------------
CAAT Pension Plan 50 Burnhamthorpe Road West, Suite 902
Mississauga, Ontario
Canada L5B 3CZ 5.9
--------------------------------------------------------------------------------------------------------------------
<CAPTION>
EMEA FUND
--------------------------------------------------------------------------------------------------------------------
PERCENTAGE
OF SHARES
SHAREHOLDER ADDRESS HELD
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Pennsylvania Public Schools Employee Retirement P.O. Box 125
Harrisburg, PA 17108-0125 45.3
--------------------------------------------------------------------------------------------------------------------
State Universities Retirement System of Illinois 1901 Fox Drive
P.O. Box 2710
Champaign, IL 61825-2710 12.4
--------------------------------------------------------------------------------------------------------------------
Maine State Retirement System State House Station #46
Augusta, ME 04333 11.0
--------------------------------------------------------------------------------------------------------------------
CAAT Pension Plan 50 Burnhamthorpe Road West, Suite 902
Mississauga, Ontario
Canada L5B 3CZ 5.1
--------------------------------------------------------------------------------------------------------------------
6
<PAGE>
<CAPTION>
JAPAN SMALL COMPANIES FUND
--------------------------------------------------------------------------------------------------------------------
PERCENTAGE
OF SHARES
SHAREHOLDER ADDRESS HELD
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Pennsylvania Public Schools Employee Retirement P.O. Box 125
Harrisburg, PA 17108-0125 33.0
--------------------------------------------------------------------------------------------------------------------
State Universities Retirement System of Illinois 1901 Fox Drive
P.O. Box 2710
Champaign, IL 61825-2710 10.0
--------------------------------------------------------------------------------------------------------------------
Maine State Retirement System State House Station #46
Augusta, ME 04333 8.1
--------------------------------------------------------------------------------------------------------------------
CAAT Pension Plan 50 Burnhamthorpe Road West, Suite 902 7.9
Mississauga, Ontario
Canada L5B 3CZ
--------------------------------------------------------------------------------------------------------------------
</TABLE>
INVESTMENT ADVISORY AND OTHER SERVICES
ADVISORY AGREEMENTS Martin Currie serves as the investment adviser of each
Fund under a separate investment advisory agreement. Martin Currie is a wholly-
owned subsidiary of Martin Currie Limited. Martin Currie Limited. is the parent
company of the Martin Currie group, which is one of the oldest Scottish
investment advisors providing investment management, advisory, secretarial and
administrative services to its clients. Under each investment advisory
agreement, Martin Currie manages the investment and reinvestment of the assets
of the relevant Fund, subject to supervision by the trustees of the Trust.
Martin Currie furnishes, at its own expense, all necessary office space,
facilities and equipment, services of executive and other personnel of the Fund
and certain administrative services. For these services, the investment advisory
agreements provide that each Fund shall pay Martin Currie a quarterly investment
advisory fee as stated in the Private Placement Memorandum.
Under each investment advisory agreement, if the total ordinary business
expenses of a Fund or the Trust as a whole for any fiscal year exceed the lowest
applicable limitation (based on percentage of average net assets or income)
prescribed by any state in which the shares of the Fund or the Trust are
qualified for sale, Martin Currie shall pay such excess. Presently, none of the
Funds nor the Trust as a whole is subject to any such expense limitation,
however.
As described in the Private Placement Memorandum, Martin Currie has agreed
to certain arrangements to limit the expenses of the All Countries Fund.
During each Fund's last three fiscal years (or, for each Fund that does not
have three full fiscal years of operations, during each fiscal year from each
such Fund's commencement of operations (shown below) to April 30, 2000), Martin
Currie received the following amount of investment advisory fees from each Fund
(before fee reductions and expense assumptions) and bore the following amounts
of fee reductions and expense assumptions for each Fund.
7
<PAGE>
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
ADVISORY FEES FOR FISCAL YEAR ENDING FEE WAIVERS AND EXPENSE LIMITATIONS
COMMENCE- APRIL 30, FOR FISCAL YEAR ENDING APRIL 30,
MENT OF -----------------------------------------------------------------------------------
OPERATIONS 2000 1999 1998 2000 1999 1998
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
OPPORTUNISTIC 7/1/94 $1,638,996 $1,148,111 $934,444 $0 $0 $0
EAFE FUND
----------------------------------------------------------------------------------------------------------------------
GLOBAL EMERGING 2/14/97 1,162,592 691,612 518,048 0 0 0
MARKETS FUND
----------------------------------------------------------------------------------------------------------------------
ASIA PACIFIC FUND 3/24/95 5,718,428 1,340,186 640,772 0 0 96,494
----------------------------------------------------------------------------------------------------------------------
EMEA FUND 6/25/97 1,211,447 669,841 729,204 0 0 0
----------------------------------------------------------------------------------------------------------------------
JAPAN SMALL 8/15/94 1,424,398 608,552 712,359 0 0 0
COMPANIES FUND
----------------------------------------------------------------------------------------------------------------------
</TABLE>
Each investment advisory agreement provides that it will continue in effect
for two years from its date of execution and thereafter from year to year if its
continuance is approved at least annually (i) by the trustees of the Trust or by
vote of a majority of the outstanding voting securities of the relevant Fund and
(ii) by vote of a majority of the trustees who are not "interested persons" of
the Trust, as that term is defined in the 1940 Act, cast in person at a meeting
called for the purpose of voting on such approval. Any amendment to an
investment advisory agreement must be approved by vote of a majority of the
outstanding voting securities of the relevant Fund and by vote of a majority of
the trustees who are not interested persons, cast in person at a meeting called
for the purpose of voting on such approval. Each investment advisory agreement
may be terminated without penalty by vote of the trustees or by vote of a
majority of the outstanding voting securities of the relevant Fund, upon sixty
days' written notice, or by Martin Currie upon sixty days' written notice, and
each terminates automatically in the event of its assignment.
Each investment advisory agreement provides that Martin Currie shall not be
subject to any liability in connection with the performance of its services
thereunder in the absence of willful misfeasance, bad faith, gross negligence or
reckless disregard of its obligations and duties.
Martin Currie acts as investment adviser to other registered investment
companies and to numerous other corporate and fiduciary clients.
Certain officers and trustees of the Trust also serve as officers,
directors and trustees of other investment companies and clients advised by
Martin Currie. The other investment companies and clients sometimes invest in
securities in which the Funds also invest. If a Fund and such other investment
companies or clients desire to buy or sell the same portfolio securities at the
same time, purchases and sales may be allocated, to the extent practicable, on a
pro rata basis in proportion to the amounts desired to be purchased or sold for
each. It is recognized that in some cases the practices described in this
paragraph could have a detrimental effect on the price or amount of the
securities which a Fund purchases or sells. In
8
<PAGE>
other cases, however, it is believed that these practices may benefit the Funds.
It is the opinion of the trustees that the desirability of retaining Martin
Currie as adviser for the Funds outweighs the disadvantages, if any, which might
result from these practices.
CUSTODIAL ARRANGEMENTS State Street Bank and Trust Company ("State Street
Bank"), Boston, Massachusetts 02110, provides certain administrative services to
each Fund and serves as the Trust's custodian. As such, State Street Bank or
sub-custodians acting at its direction hold in safekeeping certificated
securities and cash belonging to the Funds and, in such capacity, are the
registered owners of securities held in book entry form belonging to the Funds.
Upon instruction, State Street Bank or such sub-custodians receive and deliver
cash and securities of the Funds in connection with Fund transactions and
collect all dividends and other distributions made with respect to Fund
portfolio securities.
With respect to securities obtained by the Trust through the Manager's
investment quota granted by authorities in Taiwan, such purchases will be made
through various sub-accounts, the custody of which will be maintained by the
Hong Kong and Shanghai Banking Corporation Limited, Taipei, acting on
instructions from State Street Bank relating to order confirmation and the
settlement of transactions.
INDEPENDENT ACCOUNTANTS The Fund's independent accountants are
PricewaterhouseCoopers LLP, 160 Federal Street, Boston, Massachusetts.
PricewaterhouseCoopers LLP conducts an annual audit of the Trust's financial
statements, assists in the preparation of the Funds' federal and state income
tax returns and consults with the Funds as to matters of accounting and federal
and state income taxation.
AFFILIATED BROKER-DEALER Martin Currie Investor Services, Inc. ("MCIS") is
under common control with the Manager and was registered with the National
Association of Securities Dealers, Inc. on April 23, 1996. Investors may be
solicited for investment in the Funds by MCIS and MCIS may charge a fee for
these services. MCIS does not have custody of customer funds or securities.
DISTRIBUTION AND SERVICING PLANS
The Trust has adopted a distribution and servicing plan pursuant to Rule
12b-1 under the 1940 Act for each Fund (the "Plans"). The Plans authorize the
Manager to spend an amount of the management fees it collects from each Fund up
to 0.25% per annum of the average monthly net assets of the relevant Fund for
activities or services primarily intended to result in the sale of shares of
such Fund or for the provision of personal services to shareholders of such
Fund.
9
<PAGE>
PORTFOLIO TRANSACTIONS AND BROKERAGE
In placing orders for the purchase and sale of portfolio securities for
each Fund, Martin Currie always seeks the best price and execution. Transactions
in unlisted securities are carried out through broker-dealers who make the
primary market for such securities unless, in the judgment of Martin Currie, a
more favorable price can be obtained by carrying out such transactions through
other brokers or dealers.
Martin Currie selects only brokers or dealers which it believes are
financially responsible, will provide efficient and effective services in
executing, clearing and settling an order and will charge commission rates
which, when combined with the quality of the foregoing services, will produce
the best price and execution for the transaction. This does not necessarily mean
that the lowest available brokerage commission will be paid. However, the
commissions are believed to be competitive with generally prevailing rates.
Martin Currie will use its best efforts to obtain information as to the general
level of commission rates being charged by the brokerage community from time to
time and will evaluate the overall reasonableness of brokerage commissions paid
on transactions by reference to such data. In making such evaluation, all
factors affecting liquidity and execution of the order, as well as the amount of
the capital commitment by the broker in connection with the order, are taken
into account. The Funds may pay a broker a commission at a higher rate than
otherwise available for the same transaction in recognition of the value of
research services provided by the broker or in recognition of the value of any
other services provided by the broker.
Receipt of research services from brokers may sometimes be a factor in
selecting a broker that Martin Currie believes will provide the best price and
execution for a transaction. These research services include not only a wide
variety of reports on such matters as economic and political developments,
industries, companies, securities, portfolio strategy, account performance,
daily prices of securities, stock and bond market conditions and projections,
asset allocation and portfolio structure, but also meetings with management
representatives of issuers and with other analysts and specialists. Although it
is not possible to assign an exact dollar value to these services, they may, to
the extent used, tend to reduce Martin Currie's expenses. Such services may be
used by Martin Currie in servicing other client accounts and in some cases may
not be used with respect to the Funds. Receipt of services or products other
than research from brokers is not a factor in the selection of brokers.
The following table sets forth for each Fund's last three fiscal years
(or, for each Fund that does not have three full fiscal years of operations, for
each fiscal year from each such Fund's commencement of operations (shown below)
to April 30, 2000), the aggregate dollar amount of brokerage commissions paid on
portfolio transactions during the period. During such periods there were no
transactions on which commissions were paid that were directed to brokers
providing research services.
10
<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
AGGREGATE BROKERAGE COMMISSIONS FOR FISCAL YEAR
ENDING APRIL 30,
COMMENCEMENT -----------------------------------------------------------
OF OPERATIONS 2000 1999 1998
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPPORTUNISTIC EAFE FUND 7/1/94 $740,934 $656,362 $354,011
------------------------------------------------------------------------------------------------------------------
GLOBAL EMERGING MARKETS FUND 2/14/97 1,402,572 817,956 332,523
------------------------------------------------------------------------------------------------------------------
ASIA PACIFIC FUND 3/24/95 3,425,258 1,213,193 703,503
------------------------------------------------------------------------------------------------------------------
EMEA FUND 6/25/97 700,348 384,649 342,376
------------------------------------------------------------------------------------------------------------------
JAPAN SMALL COMPANIES FUND 8/15/94 239,961 112,819 123,592
------------------------------------------------------------------------------------------------------------------
</TABLE>
The increase in brokerage commissions paid by the Global Emerging Markets
Fund during fiscal 2000 was due primarily to the increase in the fund's assets
under management and to investment in new markets (or increased investment in
those markets) involving higher transaction costs. The increase in brokerage
commissions paid by the Asia Pacific Fund during fiscal 2000 and fiscal 1999 was
due primarily to the change in its principal investment strategy and performance
benchmark as of November 1998 and the accompanying reallocation of assets; prior
to that time, the fund was known as the MCBT Emerging Asia Fund. The increase in
brokerage commissions paid by the EMEA Fund during fiscal 2000 was due primarily
to an increase in cash subscriptions. The increase in brokerage commissions paid
by the Japan Small Companies Fund during fiscal 2000 was due primarily to the
increase in the fund's assets under management.
DESCRIPTION OF THE TRUST
The Trust, registered with the SEC as an open-end management investment
company, is organized as a Massachusetts business trust under the laws of
Massachusetts by an Agreement and Declaration of Trust (the "Declaration of
Trust") dated May 20, 1994, as amended. The Trust currently consists of six
diversified series, being the Funds.
The Declaration of Trust permits the trustees to issue an unlimited number
of full and fractional shares of each series. Each share of each Fund represents
an equal proportionate interest in such Fund with each other share of that
Fund and is entitled to a proportionate interest in the dividends and
distributions from that Fund. The shares of each Fund do not have any preemptive
rights. Upon termination of any Fund, whether pursuant to liquidation of the
Trust or otherwise, shareholders of that Fund are entitled to share pro rata in
the net assets of that Fund available for distribution to shareholders. The
Declaration of Trust also permits the trustees to charge shareholders directly
for custodial, transfer agency and servicing expenses.
The assets received by each Fund for the issue or sale of its shares
and all income, earnings, profits, losses and proceeds therefrom, subject only
to the rights of creditors, are allocated to, and constitute the underlying
assets of, that Fund. The underlying assets are segregated and are charged with
the expenses with respect to that Fund and with a share of the general expenses
of the Trust. Any general expenses of the Trust that are not readily
11
<PAGE>
identifiable as belonging to a particular Fund are allocated by or under the
direction of the trustees in such manner as the trustees determine to be fair
and equitable. While the expenses of the Trust are allocated to the separate
books of account of each Fund, certain expenses may be legally chargeable
against the assets of all Funds.
The Declaration of Trust also permits the trustees, without shareholder
approval, to issue shares of the Trust in one or more series, and to subdivide
any series of shares into various classes of shares with such dividend
preferences and other rights as the trustees may designate. While the trustees
have no current intention to exercise this power, it is intended to allow them
to provide for an equitable allocation of the impact of any future regulatory
requirements that might affect various classes of shareholders differently, or
to permit shares of a series to be distributed through more than one
distribution channel, with the costs of the particular means of distribution (or
costs of related services) to be borne by the shareholders who purchase through
that means of distribution. The trustees may also, without shareholder approval,
establish one or more additional separate portfolios for investments in the
Trust or merge two or more existing portfolios. Shareholders' investments in
such an additional or merged portfolio would be evidenced by a separate series
of shares (i.e., a new "Fund").
The Declaration of Trust provides for the perpetual existence of the Trust.
The Trust or any Fund, however, may be terminated at any time by vote of at
least two-thirds of the outstanding shares of each Fund affected. The
Declaration of Trust further provides that the trustees may also terminate the
Trust or any Fund upon written notice to the shareholders.
VOTING RIGHTS
As summarized in the Private Placement Memorandum, shareholders are
entitled to one vote for each full share held (with fractional votes for each
fractional share held) and may vote (to the extent provided in the Declaration
of Trust) in the election of trustees and the termination of the Trust and on
other matters submitted to the vote of shareholders.
The Declaration of Trust provides that on any matter submitted to a vote of
all Trust shareholders, all Trust shares entitled to vote shall be voted
together irrespective of series or sub-series unless the rights of a particular
series or sub-series would be affected by the vote, in which case a separate
vote of that series or sub-series shall also be required to decide the question.
Also, a separate vote shall be held whenever required by the 1940 Act or any
rule thereunder. Rule 18f-2 under the 1940 Act provides in effect that a class
shall be deemed to be affected by a matter unless it is clear that the interests
of each class in the matter are substantially identical or that the matter does
not affect any interest of such class. On matters affecting an individual
series, only shareholders of that series are entitled to vote. Consistent with
the current position of the SEC, shareholders of all series vote together,
irrespective of series, on the election of trustees and the selection of the
Trust's independent accountants, but shareholders of each series vote separately
on other matters requiring shareholder approval, such as certain changes in
fundamental investment policies of that series or the approval of the investment
advisory agreement relating to that series.
12
<PAGE>
There normally will be no meetings of shareholders for the purpose of
electing trustees except that, in accordance with the 1940 Act, (i) the Trust
will hold a shareholders' meeting for the election of trustees at such time as
less than a majority of the trustees holding office have been elected by
shareholders, and (ii) if, as a result of a vacancy on the board of trustees,
less than two-thirds of the trustees holding office have been elected by the
shareholders, that vacancy may be filled only by a vote of the shareholders. In
addition, trustees may be removed from office by a written consent signed by the
holders of two-thirds of the outstanding shares and filed with the Trust's
custodian or by a vote of the holders of two-thirds of the outstanding shares at
a meeting duly called for that purpose, which meeting shall be held upon the
written request of the holders of not less than 10% of the outstanding shares.
Upon written request by the holders of shares having a net asset value
constituting 1% of the outstanding shares stating that such shareholders wish to
communicate with the other shareholders for the purpose of obtaining the
signatures necessary to demand a meeting to consider removal of a trustee, the
Trust has undertaken to provide a list of shareholders or to disseminate
appropriate materials (at the expense of the requesting shareholders).
Except as set forth above, the trustees shall continue to hold office and
may appoint successor trustees. Voting rights are not cumulative.
No amendment may be made to the Declaration of Trust without the
affirmative vote of a majority of the outstanding shares of the Trust, except
(i) to change the Trust's name or to cure technical problems in the Declaration
of Trust, (ii) to establish, change or eliminate the par value of any shares
(currently all shares have no par value) and (iii) to issue shares of the Trust
in one or more series, and to subdivide any series of shares into various
classes of shares with such dividend preferences and other rights as the
trustees may designate.
SHAREHOLDER AND TRUSTEE LIABILITY
Under Massachusetts law shareholders could, under certain circumstances, be
held personally liable for the obligations of the Fund of which they are
shareholders. However, the Declaration of Trust disclaims shareholder liability
for acts or obligations of each Fund and requires that notice of such disclaimer
be given in each agreement, obligation or instrument entered into or executed by
the Trust or the trustees. The Declaration of Trust provides for indemnification
out of Fund property for all loss and expense of any shareholder held personally
liable for the obligations of the Fund. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is considered
remote since it is limited to circumstances in which the disclaimer is
inoperative and the Fund itself would be unable to meet its obligations.
The Declaration of Trust further provides that the trustees will not be
liable for errors of judgment or mistakes of fact or law. However, nothing in
the Declaration of Trust protects a trustee against any liability to which the
trustee would otherwise be subject by reason of
13
<PAGE>
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office. The By-Laws of the Trust provide
for indemnification by the Trust of the trustees and officers of the Trust
except with respect to any matter as to which any such person did not act in
good faith in the reasonable belief that such action was in or not opposed to
the best interests of the Trust. No officer or trustee may be indemnified
against any liability to the Trust or the Trust's shareholders to which such
person would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
his or her office.
HOW TO BUY SHARES
The procedures for purchasing shares of the Funds are summarized in the
Private Placement Memorandum under "Purchase of Shares."
NET ASSET VALUE AND OFFERING PRICE
The net asset value of the shares of each Fund is determined by dividing
that Fund's total net assets (the excess of its assets over its liabilities) by
the total number of shares of the Fund outstanding and rounding to the nearest
cent. Such determination is made as of the close of regular trading on the New
York Stock Exchange on any day that the Exchange is open for unrestricted
trading. Equity securities listed on an established securities exchange or on
the NASDAQ National Market System normally are valued at their last sale price
on the exchange where primarily traded or, if there is no reported sale during
the day, and in the case of over the counter securities not so listed, at the
mean between the last bid and asked price. Other securities for which current
market quotations are not readily available (including restricted securities,
if any) and all other assets are taken at fair value as determined in good faith
by the trustees, although the actual calculations may be made by persons acting
pursuant to the direction of the trustees or by pricing services.
Generally, trading in foreign securities markets is substantially completed
each day at various times prior to the close of regular trading on the New York
Stock Exchange. Occasionally, events affecting the value of foreign fixed income
securities and of equity securities of non-U.S. issuers not traded on a U.S.
exchange may occur between the completion of substantial trading of such
securities for the day and the close of regular trading on the New York Stock
Exchange, which events will not be reflected in the computation of a Fund's net
asset value. If events materially affecting the value of any Fund's portfolio
securities occur during such period, then these securities will be valued at
their fair value as determined in good faith by or in accordance with procedures
approved by the trustees.
14
<PAGE>
REDEMPTIONS
The procedures for redemption of Fund shares are summarized in the Private
Placement Memorandum under "How to Redeem Shares."
INCOME DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS AND TAX STATUS
As described in the Private Placement Memorandum under the heading
"Distributions," each Fund's policy is to pay out at least annually as dividends
to its shareholders substantially all investment company taxable income (which
comes from dividends and any interest it receives from investments and net
realized short-term capital gains), if any, and to distribute at least annually
substantially all net realized capital gains (that is, the excess of net
long-term capital gains over net short-term capital losses including capital
loss carryovers), if any. Income dividends and capital gain distributions are
payable in full and fractional shares of the relevant Fund, based upon the net
asset value determined as of the close of regular trading on the New York Stock
Exchange on the record date for each dividend or distribution. Shareholders,
however, may elect to receive their distributions in cash. The election may be
made at any time by submitting a written request directly to the Trust. In order
for a change to be in effect for any dividend or distribution, it must be
received by the Trust on or before the record date for such dividend or
distribution.
Each Fund is treated as a separate taxable entity for federal income tax
purposes. Each Fund intends to qualify each year as a "regulated investment
company" under Subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code"). In order to qualify for the special tax treatment accorded
regulated investment companies and their shareholders, each Fund must, among
other things, (a) derive at least 90% of its gross income from dividends,
interest, payments with respect to certain securities loans, and gains from the
sale of stock, securities and foreign currencies, or other income (including but
not limited to gains from options, futures or forward contracts) derived with
respect to its business of investing in such stock, securities or currencies;
(b) distribute with respect to each taxable year at least 90% of the sum of its
taxable net investment income, net tax-exempt income, and the excess, if any, of
net short-term capital gains over net long-term capital losses for such year;
and (c) diversify its holdings so that, at the end of each fiscal quarter, (i)
at least 50% of the market value of the Fund's assets is represented by cash and
cash items, U.S. Government securities, securities of other regulated investment
companies, and other securities, limited in respect of any one issuer to a value
not greater than 5% of the value of Fund's total assets and 10% of the
outstanding voting securities of such issuer, and (ii) not more than 25% of the
value of its assets is invested in the securities (other than those of the U.S.
Government or other regulated investment companies) of any one issuer or of two
or more issuers which the Fund controls and which are engaged in the same,
similar, or related trades or businesses. If a Fund qualifies as a regulated
investment company that is accorded special tax treatment, such Fund will not be
subject to federal income tax on income paid to its shareholders in the form of
dividends or capital gain distributions.
15
<PAGE>
If a Fund fails to distribute in a calendar year substantially all of its
ordinary income for such year and substantially all of its capital gain net
income for the one-year period ending October 31 (or later if a Fund is
permitted so to elect and so elects), plus any retained amount from the prior
year, such Fund will be subject to a 4% excise tax on the undistributed amounts.
A dividend paid to shareholders by a Fund in January of a year generally is
deemed to have been paid by the Fund on December 31 of the preceding year, if
the dividend was declared and payable to shareholders of record on a date in
October, November, or December of that preceding year. Each Fund intends
generally to make distributions sufficient to avoid imposition of the 4% excise
tax.
Non-tax-exempt shareholders of each Fund will be subject to federal income
taxes on distributions made by the Fund whether received in cash or additional
shares. Distributions by each Fund derived from interest, dividends, and certain
other income, including in general short-term capital gains, if any, will be
taxable to shareholders as ordinary income. Distributions of net capital gains
(that is, the excess of net long-term capital gains over net short-term capital
losses) on securities held for more than 12 months will be taxable as such,
regardless of how long a shareholder has held the shares in the Fund. Dividends
and distributions on a Fund's shares generally are subject to federal income tax
as described herein to the extent they do not exceed the Fund's realized income
and gains, even though such dividends and distributions economically may
represent a return of a particular shareholder's investment. Such dividends and
distributions are likely to occur in respect of shares purchased at a time when
the Fund's net asset value reflects gains that are either unrealized, or
realized but not distributed.
If in any taxable year, a Fund distributes amounts in excess of its current
and accumulated earnings and profits, such distributions may be treated in part
as a return of capital. A return of capital is not taxable to a shareholder and
has the effect of reducing the shareholder's basis in the shares. To the extent
such distributions exceed a shareholder's basis in the shares, the distributions
will be taxed to the Shareholder as capital gain.
As required by federal law, detailed federal tax information will be
provided to each shareholder for each calendar year on or before January 31 of
the succeeding year.
Redemptions and exchanges of each Fund's shares are taxable events and,
accordingly, shareholders may realize gains and losses on these transactions. If
shares have been held for more than twelve months, gain or loss realized will be
long-term capital gain or loss, provided the shareholder holds the shares as a
capital asset. However, if a shareholder sells Fund shares at a loss within six
months after purchasing the shares, the loss will be treated as a long-term
capital loss to the extent of any long-term capital gain distributions received
by the shareholder. Furthermore, no loss will be allowed on the sale of Fund
shares to the extent the shareholder acquired other shares of the same Fund
within 30 days prior to or after the sale of the loss shares. In such a case,
the basis of the newly purchased shares will be adjusted to reflect the
disallowed loss.
16
<PAGE>
A Fund's transactions in options, futures contracts, hedging transactions,
forward contracts, straddles and foreign currencies will be subject to special
tax rules (including constructive sale, mark-to-market, straddle, wash-sale and
short-sale rules), the effect of which may be to accelerate income to the Fund,
defer losses to the Fund, cause adjustments in the holding periods of the Fund
securities, convert long-term capital gains into short-term capital gains and
convert short-term capital losses into long-term capital losses. These rules,
therefore, could affect the amount, timing, and character of distributions to
shareholders.
A Fund's transactions in foreign currencies and hedging activities likely
will produce a difference between book income and taxable income. This
difference may cause a portion of a Fund's income distributions to constitute a
return of capital for tax purposes or require a Fund to make distribution's
exceeding book income to qualify as a regulated investment company. A Fund's
transactions in foreign currency-denominated debt securities, certain foreign
currency options, futures contracts and forward contracts may give rise to
ordinary income or loss to the extent such income or loss results from
fluctuations in the value of the foreign currency concerned.
Each Fund may be subject to foreign withholding taxes on income and gains
derived from foreign investments. Such investments would reduce the yield on a
Fund's investments, but as discussed in the Private Placement Memorandum under
the heading "Taxes," U.S. citizens and corporations may be entitled to take such
taxes as either a deduction or a credit (but not both).
Each Fund generally is required to withhold and remit to the U.S. Treasury
31% on all dividends from net investment income and capital gain distributions,
whether distributed in cash or reinvested in shares of the relevant Fund, and on
the amount of proceeds of any redemption of Fund shares, paid or credited to any
shareholder account for which an incorrect or no taxpayer identification number
has been provided, where the Fund is notified that the shareholder has
underreported in the past and where appropriate certification that a shareholder
is not subject to withholding has not been provided. In addition, each Fund
generally will be required to withhold and remit to the U.S. Treasury 31% of the
amount of proceeds of any redemption of Fund shares from a shareholder account
for which an incorrect or no taxpayer identification number has been provided.
The Internal Revenue Service recently revised its regulations affecting the
application to foreign investors of the back-up withholding and withholding tax
rules described above. The new regulations will be effective for payments after
December 31, 2000. In some circumstances, the new rules will increase the
certification and filing requirements imposed on foreign investors in order to
qualify for exemption from the 31% back-up withholding tax and for reduced
withholding tax rates under income tax treaties. Foreign investors in a Fund
should consult their tax advisors with respect to the potential application of
these new regulations.
17
<PAGE>
The foregoing is a general and abbreviated summary of the applicable
provisions of the Code and regulations currently in effect. For the complete
provisions, reference should be made to the pertinent Code sections and
regulations. The Code and regulations are subject to change by legislative or
administrative action.
The foregoing discussion relates solely to U.S. federal income tax law.
Dividends and distributions also may be subject to foreign, state and local
taxes. Shareholders are urged to consult their tax advisers regarding specific
questions as to foreign, federal, state or local taxes. Non-U.S. investors
should consult their tax advisers concerning the tax consequences of ownership
of shares of the Fund including the possibility that distributions may be
subject to a 30% U.S. withholding tax (or a reduced rate of withholding provided
by treaty).
FINANCIAL STATEMENTS
Financial statements of each Fund (other than the All Countries Fund) for
the fiscal year ended April 30, 2000 are incorporated by reference to the Annual
Reports for each such Fund filed on June 30, 2000. These financial statements
have been incorporated by reference in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
<PAGE>
Part C. OTHER INFORMATION
Item 23. EXHIBITS
1. (a) Agreement and Declaration of Trust of Martin Currie Business
Trust (the "Trust") dated May 20, 1994 incorporated by reference to
the original registration statement on Form N-1A (File No. 811-8612)
filed on July 7, 1994 (the "Registration Statement").
(b) Amendment No. 1 to Agreement and Declaration of Trust dated May
27, 1994 incorporated by reference to the Registration Statement
filed on July 7, 1994.
(c) Amendment No. 2 to Agreement and Declaration of Trust dated June
13, 1997 incorporated by reference to Amendment No. 3 to the
Registration Statement filed on June 16, 1997.
(d) Amendment No. 3 to Agreement and Declaration of Trust dated
November 10, 1998 filed herewith.
(e) Amendment No. 3 to Agreement and Declaration of Trust dated April
3, 2000 filed herewith.
2. By-Laws of the Trust incorporated by reference to the Registration
Statement filed on July 7, 1994.
3. Not Applicable.
4. (a) Investment Advisory Agreements between the Trust and Martin
Currie, Inc. ("Martin Currie") for each of MCBT Opportunistic EAFE
Fund, MCBT Global Emerging Markets Fund, MCBT Japan Small Companies
Fund and MCBT Asia Pacific ex Japan Fund incorporated by reference
to the Registration Statement filed on July 7, 1994.
(b) Investment Advisory Agreement between the Trust and Martin Currie
for the MCBT EMEA Fund incorporated by reference to Amendment No. 3
to the Registration Statement filed on June 16, 1997.
(c) Investment Advisory Agreement between the Trust and Martin Currie
for the MCBT All Countries World ex U.S. Fund filed herewith.
5. Not Applicable.
6. Not Applicable.
1
<PAGE>
7. (a) Form of Custodian Agreement between the Trust and State Street
Bank and Trust Company ("State Street") incorporated by reference
to the Registration Statement filed on July 7, 1994.
(b) Form of letter amendment to Custodian Agreement between the Trust
and State Street dated June 10, 1997 relating to the MCBT EMEA Fund
incorporated by reference to Amendment No. 3 to the Registration
Statement filed on June 16, 1997.
(c) Form of letter amendment to Custodian agreement between the Trust
and State Street dated August 7, 2000 relating to the MCBT All
Countries World ex U.S. Fund filed herewith.
8. (a) Form of Administration Agreement between the Trust and State
Street incorporated by reference to the Registration Statement filed
on July 7, 1994.
(b) Form of letter amendment to Administration Agreement between the
Trust and State Street dated June 10, 1997 relating to the MCBT EMEA
Fund incorporated by reference to Amendment No. 3 to the Registration
Statement filed on June 16, 1997.
(c) Form of letter amendment to Administration Agreement between the
Trust and State Street dated August 7, 2000 relating to the MCBT All
Countries World ex U.S. Fund filed herewith.
(d) Form of Transfer Agency and Service Agreement between the Trust
and State Street incorporated by reference to the Registration
Statement filed on July 7, 1994.
(e) Form of letter amendment to Transfer Agency and Service Agreement
between the Trust and State Street dated June 10, 1997 relating to
the MCBT EMEA Fund incorporated by reference to Amendment No. 3 to
the Registration Statement filed on June 16, 1997.
(f) Form of letter amendment to Transfer Agency and Service Agreement
between the Trust and State Street dated August 7, 2000 relating to
the MCBT All Countries World ex U.S. Fund filed herewith.
(g) Form of Subscription Agreement for the purchase of Shares of any
series of the Trust filed herewith (included as Exhibit A to Part A
hereof).
9. Not Applicable. See Paragraph 2(b) of General Instruction B.
10. Consent of PricewaterhouseCoopers LLP.
11. Not Applicable. See Paragraph 2(b) of General Instruction B.
2
<PAGE>
12. Not Applicable.
13. (a) Distribution and Servicing Plans adopted pursuant to Rule 12b-1
for each of MCBT Opportunistic EAFE Fund, MCBT Global Emerging
Markets Fund, MCBT Japan Small Companies Fund and MCBT Asia Pacific
ex Japan Fund incorporated by reference to the Registration Statement
filed on July 7, 1994.
(b) Distribution and Servicing Plan adopted pursuant to Rule 12b-1
for MCBT EMEA Fund incorporated by reference to Amendment No. 3 to
the Registration Statement filed on June 16, 1997.
(c) Distribution and Servicing Plan adopted pursuant to Rule 12b-1
for MCBT All Countries World ex U.S. Fund filed herewith.
14. Not Applicable.
15. (a) Code of Ethics of the Trust filed herewith.
(b) Code of Ethics of Martin Currie filed herewith.
Item 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND
Not applicable.
Item 25. INDEMNIFICATION
Article VIII of the Registrant's Agreement and Declaration of Trust
(Exhibit 1 hereto) provides for indemnification of its trustees and
officers. The effect of this provision is to provide indemnification
for each of the Registrant's trustees and officers against
liabilities and counsel fees reasonably incurred in connection with
the defense of any legal proceeding in which such trustee or officer
may be involved by reason of being or having been a trustee or
officer, except with respect to any matter as to which such trustee
or officer shall have been adjudicated to be liable to the Trust or
its Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the
conduct of such person's office. As to any matter disposed of without
an adjudication by a court or other body, indemnification will be
provided to the Registrant's trustees and officers if (a) such
indemnification is approved by a majority of the disinterested
trustees, or (b) an opinion of independent legal counsel is obtained
that such indemnification would not protect the trustee or officer
against any liability to which he would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of duties.
3
<PAGE>
Item 26. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER
Martin Currie is a New York corporation and is registered as an
investment adviser under the Investment Advisers Act of 1940. Its
principal place of business is Saltire Court, 20 Castle Terrace,
Edinburgh, Scotland EH1 2ES. Martin Currie and other subsidiaries
of its parent company, Martin Currie Limited, provide investment
advice to other registered investment companies and advise and manage
individual and institutional accounts.
Other business, profession, vocation or employment of a substantial
nature in which each director or officer of Martin Currie is or has
been, at any time during the past two fiscal years, engaged for his
own account or in the capacity of director, officer, employee,
partner or trustee is as follows:
NAME AND POSITION WITH
MARTIN CURRIE BUSINESS AND OTHER CONNECTIONS
A. P. Hanlon Director of Martin Currie Investment
Director and Vice President Management Limited and Martin Currie
Services Limited.
P. J. Scott Plummer Chairman and Chief Executive Officer of
Director and President Martin Currie Limited. Chairman of
Martin Currie Private Clients Ltd. and
Saltire Private Fund Managers Limited.
Director of Martin Currie Investment
Management Limited, Martin Currie
Services Limited, Martin Currie
Trustees Limited, Edinburgh
International Investment Trust, Ltd.,
Scottish Unit Managers Limited,
Candover Investments plc, Near East
Opportunities Fund Limited, Martin
Currie Portfolio Investment Trust plc
and The Merchants Trust plc. Prior to
April 1999, Director of Martin Currie
Unit Trusts Limited. Prior to March
1999, Director of The Scottish Eastern
Investment Trust plc.
4
<PAGE>
J. M. A. Fairweather Director of Martin Currie Limited,
Director and Vice President Martin Currie Investment Management
Limited, Martin Currie Unit Trusts
Limited and Martin Currie European
Investment Trust plc.
J. G. Wilson Director of Martin Currie Investment
Director and Vice President Management Limited.
J. K. R. Falconer Director of Martin Currie Investment
Director and Vice President Management Limited, Martin Currie
Limited, Martin Currie Management
Limited, Martin Currie Gefinor Fund
Management Co. SA, Edinburgh
International Investment Trust Ltd.,
Martin Currie Services Ltd., Moorgate
Investment Management Limited, The
Western Canada Investment Company Ltd.
and 3I Smaller Quoted Companies Trust
plc.
C. J. P. Dawnay Deputy Chairman of Martin Currie
Director and Vice President Limited. Chairman of Martin Currie Unit
Trusts Limited. Director of Martin
Currie Investment Management Ltd.,
Martin Currie Management Limited, China
Heartland Fund Limited, Heartland
Investment Consulting Corporation
(Shanghai) Ltd., Martin Currie Business
Trust and Taiwan American Fund Limited.
M. W. Thomas Director of Martin Currie Investment
Director and Vice President Management Limited, Martin Currie
Limited, Martin Currie Pacific
Investment Trust plc and Martin Currie
Japan Investment Trust plc. Prior to
July 1999, Director of Schroder Korea
Fund plc.
5
<PAGE>
Colin Winchester Director of Martin Currie Services
Director and Secretary Limited, Martin Currie Trustees
Limited, Martin Currie (Bermuda)
Limited, Martin Currie Limited, Martin
Currie Management Ltd., Moorgate
Investment Management Limited and The
Western Canada Investment Ltd. Prior to
May 1999, Director of Craigengillan
Estates (No. 2) Company Limited, Little
Hoblyn Holdings Limited and Tippet Hill
Investment Company Limited.
J. M. C. Livingston Group Legal Director, Martin Currie
General Counsel Investment Management Limited. Director
of Martin Currie Services Ltd., Martin
Currie Private Clients Ltd., Martin
Currie (Bermuda) Ltd., Martin Currie
Absolute Return Fund G.P. Limited and
Saltire Private Fund Managers Limited.
S. N. Johnson President, Martin Currie Investor
Director and Vice President Services, Inc.
Timothy J.D. Hall Director, Martin Currie Investment
Director and Vice President Management Limited. Prior to April
1999, Director of Martin Currie Private
Clients Limited and Saltire Private
Fund Managers Limited.
A.D. MacLeod Director, Martin Currie Investment
Director and Vice President Management Limited, Ardroil Consultancy
Services Limited and Ardroil Investment
Services Limited.
Barry Sagraves Prior to February 2000, Vice President
Director and Vice President of John Nuveen & Co.
The principal business address of Martin Currie Limited and its affiliates and,
unless otherwise noted, each of the above entities, is Saltire Court, 20 Castle
Terrace, Edinburgh, Scotland EH1 2ES.
The principal business address of Moorgate Investment Management Limited is 46
Cannon Street, London EG4 N6JG.
6
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The principal business address of 3I Smaller Quoted Companies Trust plc is 91
Waterloo Road, London SE1 8XP.
The principal business address of China Heartland Fund Limited is presently c/o
International Corporate Management of Bermuda Limited, 44 Church Street,
Hamilton HM12 Bermuda, but is presently expected to become as of August 26,
2000, c/o Forum Fund Services Ltd., Washington Mall, 3rd Floor, Church Street,
Hamilton HM11 Bermuda.
The principal business address of Heartland Investment Consulting Corporation
(Shanghai) Ltd. is 2206 China Merchant Tower, 66 Lujiazui Road, Shanghai 200 120
PRC.
The principal business address of Taiwan American Fund Limited is c/o Forum Fund
Services Ltd., Washington Mall, 3rd Floor, Church Street, Hamilton HM11 Bermuda.
The principal business address of Ardroil Consultancy Services Limited and
Ardroil Investment Services Limited is 6 Westfield Terrace, Aberdeen AB25 2RU.
The principal business address of John Nuveen & Co. is 333 W. Wacker Drive,
Chicago, IL 60606.
Item 27. PRINCIPAL UNDERWRITERS
Not Applicable.
Item 28. LOCATION OF ACCOUNTS AND RECORDS
The following companies maintain possession of the documents required
by the specified rules:
(a) Registrant
Rule 31a-1(b)(4), (9), (10), (11)
Rule 31a-2(a)
(b) State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
Rule 31a-1(a)
Rule 31a-1(b)(1), (2), (3), (5), (6), (7), (8)
Rule 31a-2(a)
7
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(c) Martin Currie, Inc.
Saltire Court
20 Castle Terrace
Edinburgh, Scotland EH1 2ES
Rule 31a-1(f)
Rule 31a-2(e)
Item 29. MANAGEMENT SERVICES
Not Applicable.
Item 30. UNDERTAKINGS
Not Applicable.
8
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* * * * * * * * * * *
NOTICE
A copy of the Agreement and Declaration of Trust of Martin Currie Business
Trust (the "Trust") is on file with the Secretary of State of The Commonwealth
of Massachusetts and the Clerk of the City of Boston and notice is hereby given
that this Registration Statement has been executed on behalf of the Trust and
each of its series ("Funds") by an officer of the Trust as an officer and by its
trustees as trustees and not individually and the obligations of or arising out
of this Registration Statement are not binding upon any of the trustees,
officers or shareholders individually but are binding only upon the assets and
property of the Trust or the Funds, as the case may be.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Investment Company Act of 1940, the
Registrant has duly caused this Amendment No. 8 to the Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in
Edinburgh, Scotland on this 21st day of August, 2000.
MARTIN CURRIE BUSINESS TRUST
By: /S/ C. James P. Dawnay
----------------------
C. James P. Dawnay,
President
<PAGE>
Exhibit Index
EXHIBIT # DESCRIPTION
1(d) Amendment No. 3 dated November 10, 1998 to Agreement
and Declaration of Trust
1(e) Amendment No. 3 dated April 3, 2000 to Agreement and
Declaration of Trust
4(c) Investment Advisory Agreement between the Trust and
Martin Currie, Inc. - MCBT All Countries World ex
U.S. Fund
7(c) Letter amendment to Custodian Agreement between the
Trust and State Street Bank and Trust Company - MCBT
All Countries World ex U.S. Fund
8(c) Letter amendment to Administration Agreement between
the Trust and State Street Bank and Trust Company -
MCBT All Countries World ex U.S. Fund
8(f) Letter amendment to Transfer Agency and Service
Agreement between the Trust and State Street Bank and
Trust Company - MCBT All Countries World ex U.S. Fund
10 Consent of PricewaterhouseCoopers LLP
13(c) Distribution and Servicing Plan - MCBT All Countries
World ex U.S. Fund
15(a) Code of Ethics of the Trust
15(b) Code of Ethics of Martin Currie, Inc.
