March 27, 1996
BY FEDERAL EXPRESS
Securities and Exchange Commission
Filing Desk, Mail Stop 1-4
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: IBJ FUNDS TRUST (FILE NOS. 33-83430 AND 811-8738)
Dear Sir/Madam:
On behalf of IBJ Funds Trust (the "Trust") and pursuant to the
Securities Act of 1933, as amended (the "1933 Act"), and the Investment Company
Act of 1940, as amended (the "1940 Act"), transmitted for filing is a copy of
Post-Effective Amendment No. 2 to the Trust's Registration Statement on Form
N-1A (the "Amendment") which has been marked to reflect changes made in the
Trust's Registration Statement since its last submission to the Staff of the
Commission, together with exhibits thereto.
This Amendment is filed pursuant to Rule 485(b) of the 1933 Act and it
is proposed that it will become effective immediately upon filing pursuant to
paragraph (b). It is being filed to revise the Trust's Prospectus and Statement
of Additional Information to include updated financial information from its most
recently completed fiscal year ended November 30, 1995.
As counsel to the Fund, we advise you that the Amendment does not
include disclosure which we believe would render it ineligible to become
effective under paragraph (b) of rule 485.
If you have any questions or comments concerning the enclosed, please
telephone Scott R. MacLeod at (212) 891-3947.
Sincerely,
Baker & McKenzie
TMM/ear
Enclosures
<PAGE>
As Filed with the Securities and Exchange Commission on March 27, 1996
Registration Nos. 33-83430
811-8738
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |X|
Post-Effective Amendment No. 2 |X|
Pre-Effective Amendment No. | |
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 |X|
AMENDMENT NO. 4 |X|
----------
IBJ Funds Trust
(Exact Name of Registrant as Specified in Charter)
237 Park Avenue, Suite 910
New York, New York 10017
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (800) 557-3768
John J. Pileggi
237 Park Avenue, Suite 910
New York, New York 10017
(Name and Address of Agent for Service)
Copy to:
Steven R. Howard, Esq.
Baker & McKenzie
805 Third Avenue
New York, New York 10022
----------
It is proposed that this filing will become effective (check appropriate
box):
X immediately upon filing pursuant to paragraph (b)
-----
_____ on (date) pursuant to paragraph (b)
_____ 60 days after filing
pursuant to paragraph (a)
_____ 75 days after filing pursuant to paragraph (a)(2)
_____ on (date) pursuant to paragraph (a) of Rule 485
Pursuant to Section 24f-2 of the Investment Company Act of 1940, the
Registrant has registered an indefinite number of shares of beneficial interest,
par value $.001 per share, under the Securities Act of 1933 and has filed a
24f-2 Notice with the Commission on January 17, 1996.
================================================================================
Total Pages: __
Exhibit Index: __
<PAGE>
IBJ FUNDS TRUST
Registration Statement on Form N-1A
CROSS REFERENCE SHEET
Pursuant to Rule 495(a)
under the Securities Act of 1933
SERVICE CLASS PROSPECTUS
------------------------
RESERVE MONEY MARKET FUND
BOND FUND
CORE EQUITY FUND
GROWTH AND INCOME FUND
PART A PROSPECTUS CAPTION
- ------ ------------------
Item 1. Cover Page............................... Cover Page
Item 2. Synopsis................................. Fund Expenses; Fee Table
Item 3. Condensed Financial
Information............................ Financial Highlights
Item 4. General Description of
Registrant............................. The Funds; The Investment
Policies and Practices of
the Funds
Item 5. Management of the Fund................... Management of the Funds
Item 5A. Management's Discussion of Information contained in
Fund Performance....................... Annual Report
Item 6. Capital Stock and Other
Securities............................. Dividends, Distributions
and Federal Income Tax;
Other Information
Item 7. Purchase of Securities
Being Offered.......................... Fund Share Valuation;
Pricing and Purchase of
Fund Shares
- i -
<PAGE>
Item 8. Redemption or Repurchase................. Redemption of Fund Shares
Item 9. Legal Proceedings........................ Not Applicable
- ii -
<PAGE>
IBJ FUNDS TRUST
Registration Statement on Form N-1A
CROSS REFERENCE SHEET
Pursuant to Rule 495(a)
under the Securities Act of 1933
PREMIUM CLASS PROSPECTUS
------------------------
RESERVE MONEY MARKET FUND
BOND FUND
CORE EQUITY FUND
GROWTH AND INCOME FUND
PART A PROSPECTUS CAPTION
- ------ ------------------
Item 1. Cover Page............................... Cover Page
Item 2. Synopsis................................. Fund Expenses; Fee Table
Item 3. Condensed Financial
Information............................ Financial Highlights
Item 4. General Description of
Registrant............................. The Funds; The Investment
Policies and Practices of
the Funds
Item 5. Management of the Fund................... Management of the Funds
Item 5A. Management's Discussion of Information contained in
Fund Performance....................... Annual Report
Item 6. Capital Stock and Other
Securities............................. Dividends, Distributions
and Federal Income Tax;
Other Information
Item 7. Purchase of Securities
Being Offered.......................... Fund Share Valuation;
Pricing and Purchase of
Fund Shares
- iii -
<PAGE>
Item 8. Redemption or Repurchase................. Redemption of Fund Shares
Item 9. Legal Proceedings........................ Not Applicable
- iv -
<PAGE>
RESERVE MONEY MARKET FUND
BOND FUND
CORE EQUITY FUND
GROWTH AND INCOME FUND
PART B Statement of Additional
- ------ INFORMATION CAPTION
-----------------------
Item 10. Cover Page............................... Cover Page
Item 11. Table of Contents........................ Table of Contents
Item 12. General Information and
History................................ Not Applicable
Item 13. Investment Objective and
Policies............................... Investment Policies;
Investment Restrictions
Item 14. Management of the
Registrant............................. Management
Item 15. Control Persons and Principal
Holders of Securities.................. Management
Item 16. Investment Advisory and
Other Services......................... Management; Custodian;
Independent Accountants
Item 17. Brokerage Allocation..................... Portfolio Transactions
Item 18. Capital Stock and Other
Securities............................. Other Information:
Capitalization
Item 19. Purchase, Redemption and
Pricing of Securities
Being Offered.......................... Pricing and Purchase of
Fund Shares (Part A);
Redemption of Fund Shares
(Part A); Determination
of Net Asset Value
Item 20. Tax Status............................... Taxation
Item 21. Underwriters............................. Management
- v -
<PAGE>
Item 22. Calculation of Performance
Data................................... Yield and Performance
Information
Item 23. Financial Statements..................... Financial Statements
- vi -
<PAGE>
IBJ FUNDS TRUST
237 Park Avenue
New York, New York 10017
- --------------------------------------------------------------------------------
GENERAL AND ACCOUNT INFORMATION: (800) 99-IBJFD
SERVICE CLASS PROSPECTUS
IBJ SCHRODER BANK & TRUST COMPANY--INVESTMENT ADVISER
("IBJS" OR THE "ADVISER")
FURMAN SELZ LLC--ADMINISTRATOR AND SPONSOR ("FURMAN SELZ")
IBJ FUNDS DISTRIBUTOR, INC.--DISTRIBUTOR
(THE "DISTRIBUTOR")
- --------------------------------------------------------------------------------
This Prospectus describes four funds, a money market fund (the "Money Market
Fund") and three non money market funds (the "Non Money Market Funds")
(collectively, the "Funds"), all of which are managed by IBJS. The Funds and
their investment objectives are:
o THE RESERVE MONEY MARKET FUND SEEKS TO PROVIDE INVESTORS WITH CURRENT
INCOME, LIQUIDITY AND THE MAINTENANCE OF A STABLE $1.00 NET ASSET
VALUE BY INVESTING IN HIGH QUALITY, SHORT-TERM OBLIGATIONS.
o THE BOND FUND SEEKS TO PROVIDE INVESTORS WITH A HIGH LEVEL OF TOTAL
RETURN BY INVESTING IN DEBT MARKET SECURITIES.
o THE CORE EQUITY FUND SEEKS TO PROVIDE INVESTORS WITH LONG-TERM CAPITAL
APPRECIATION.
o THE GROWTH AND INCOME FUND SEEKS TO PROVIDE INVESTORS WITH LONG-TERM
CAPITAL APPRECIATION AND CURRENT INCOME FOR A HIGH TOTAL RETURN BY
INVESTING IN A BALANCE OF EQUITIES AND DEBT MARKET SECURITIES.
This Prospectus describes only the "Service Class" of each Fund, which only
certain institutional and other investors are qualified to purchase. Each Fund
also offers a Premium Class of shares. See "Other
Information"--"Capitalization". The Funds are separate investment funds of IBJ
Funds Trust (the "Trust"), a Delaware business trust and registered management
investment company.
AN INVESTMENT IN SHARES OF THE TRUST IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE RESERVE MONEY MARKET FUND
WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE. SHARES OF
THE TRUST ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY,
IBJS, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENT AGENCY, AND MAY
INVOLVE INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
THIS PROSPECTUS SETS FORTH CONCISELY THE INFORMATION A PROSPECTIVE INVESTOR
SHOULD KNOW BEFORE INVESTING IN ANY OF THE FUNDS AND SHOULD BE READ AND RETAINED
FOR INFORMATION ABOUT EACH FUND.
A Statement of Additional Information (the "SAI"), dated March 27, 1996,
containing additional and more detailed information about the Funds has been
filed with the Securities and Exchange Commission ("SEC") and is hereby
incorporated by reference into this Prospectus. It is available without charge
and can be obtained by writing or calling the Funds at the address and
information numbers printed above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
March 27, 1996.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE PAGE
<S> <C> <C> <C>
Highlights............................ 1 Minimum Purchase Requirements............ 17
Fund Expenses......................... 5 Individual Retirement Accounts........... 17
Fee Table............................. 5 Exchange of Fund Shares.................. 17
Financial Highlights.................. 7 Redemption of Fund Shares................ 18
The Investment Policies and Dividends, Distributions and
Practices of the Funds.............. 8 Federal Income Tax..................... 20
Management of the Funds............... 13 Investment Restrictions.................. 22
Fund Share Valuation.................. 15 Risks of Investing in the Funds.......... 22
Pricing and Purchase of Fund Shares... 16 Other Information........................ 23
Appendix................................. i
</TABLE>
<PAGE>
HIGHLIGHTS
INVESTMENT OBJECTIVES AND POLICIES OF THE FUNDS
This Prospectus describes four funds, one money market fund and three
non-money market funds (collectively, the "Funds"), all of which are managed by
IBJS. Each Fund has a distinct investment objective and policies.
MONEY MARKET FUND:
RESERVE MONEY MARKET FUND. The investment objectives of the Reserve Money
Market Fund are current income, liquidity and the maintenance of a stable $1.00
net asset value per share by investing in high quality, U.S. dollar-denominated
short-term obligations which are determined by the investment adviser to present
minimal credit risks.
The Reserve Money Market Fund may invest in obligations permitted to be
purchased under Rule 2a-7 of the Investment Company Act of 1940 (the "1940 Act")
including, but not limited to, (1) obligations issued or guaranteed by the U.S.
Government or its agencies or instrumentalities; (2) commercial paper, loan
participation interests, medium-term notes, asset-backed securities and other
promissory notes, including floating or variable rate obligations; (3) domestic,
Yankee dollar and Eurodollar certificates of deposit, time deposits, money
market accounts, bankers' acceptances, commercial paper, bearer deposit notes
and other promissory notes, including floating or variable rate obligations
issued by U.S. or foreign bank holding companies and their bank subsidiaries,
branches and agencies; and (4) repurchase agreements with respect to (1)--(3)
above. The Reserve Money Market Fund will invest only in issuers or instruments
that at the time of purchase (1) have received the highest short-term rating by
at least two Nationally Recognized Statistical Rating Organizations ("NRSROs")
such as "A-1" by Standard & Poor's Corporation ("S&P") and "P-1" by Moody's
Investors Service, Inc. ("Moody's"); (2) are single rated and have received the
highest short-term rating by a NRSRO (and provided the purchase is approved or
ratified by the Board of Trustees); or (3) are unrated, but are determined to be
of comparable quality by the Adviser pursuant to guidelines approved by the
Board and subject to ratification by the Board. The Reserve Money Market Fund
may also purchase securities on a "when-issued" basis and purchase or sell them
on a "forward commitment" basis.
The Reserve Money Market Fund may also invest in variable amount master
demand obligations which are unsecured demand notes that permit the indebtedness
thereunder to vary, and provide for periodic adjustments in the interest rate.
Because master demand obligations are direct lending arrangements between the
Reserve Money Market Fund and the issuer, they are not normally traded. There is
no secondary market for the notes; however, the period of time remaining until
payment of principal and accrued interest can be recovered under a variable
amount master demand obligation generally shall not exceed seven days. To the
extent this period is exceeded, the obligation in question would be considered
illiquid. Issuers of variable amount master demand obligations must satisfy the
same criteria as set forth for other promissory notes (e.g., commercial paper).
The Reserve Money Market Fund will invest in variable amount master demand
obligations only when such obligations are determined by the Adviser, pursuant
to guidelines established by the Board of Trustees, to be of comparable quality
to rated issuers or instruments eligible for investment by the Reserve Money
Market Fund. In determining weighted average dollar portfolio maturity, a
variable amount master demand obligation will be deemed to have a maturity equal
to the longer of the period of time remaining until the next readjustment of the
interest rate or the period of time remaining until the principal amount can be
recovered from the issuer on demand.
AMORTIZED COST METHOD OF VALUATION FOR THE MONEY MARKET FUND
Portfolio investments of the Money Market Fund are valued based on the
amortized cost valuation technique pursuant to Rule 2a-7 under the 1940 Act.
Obligations in which the Money Market Fund invests have remaining maturities of
397 days or less, although instruments subject to repurchase agreements and
certain variable and floating rate obligations may bear longer final maturities.
The weighted average dollar portfolio maturity of the Money Market Fund will not
<PAGE>
exceed 90 days. See "Determination of Net Asset Value" in the SAI for an
explanation of the amortized cost valuation method.
NON-MONEY MARKET FUNDS:
BOND FUND. The investment objective of the Bond Fund is to provide a high
total return (appreciation plus current income) by investing at least 65% of its
total assets in bonds such as U.S. Government securities, corporate bonds,
asset-backed securities (including mortgage-backed securities), savings and loan
and U.S. and foreign bank obligations, commercial paper, and related repurchase
agreements. A minimum of 65% of the portfolio will be invested in securities
rated "A" or better by a NRSRO, or if unrated, determined by the Adviser to be
of comparable quality. The Fund may also invest in convertible securities,
preferred stocks and debt of foreign governments or corporations. Interest rate
futures and/or options and options on interest rate futures may be used to hedge
the portfolio against reinvestment and interest rate risk when deemed necessary.
For purposes of this Fund, a "bond" is defined as a debt instrument with a fixed
interest rate. The Fund may hold cash reserves if it is believed advisable for
temporary defensive or emergency purposes. The Fund has no limitation as to
average maturity or maturity of individual securities.
CORE EQUITY FUND. The objective of the Core Equity Fund is to seek
long-term capital appreciation through investment in a diversified portfolio of
common stock (and securities convertible into common stock) of publicly traded,
established companies. At least 65% of the Fund's total assets will consist of
common stocks of publicly traded U.S. companies, convertible securities,
preferred stocks of U.S. companies, equity securities of foreign companies if
those securities are traded "over-the-counter" typically through the NASDAQ
system, American Depository Receipts ("ADRs"), and warrants of U.S. companies.
Each stock that is purchased will be selected on the weight of available
evidence, including but not limited to: (1) the company's fundamental business
outlook and competitive position, (2) the valuation of the security relative to
its own historical norms, to the industry in which the company competes, and to
the market as a whole, and (3) the momentum of earnings growth expected to be
generated by the company. IBJS will seek to control performance risk in two
ways: (1) relative to the market, by diversifying investments across economic
sectors and amongst small-, medium-, and large-capitalization companies, and (2)
by increasing the level of money market reserves and/or employing hedging
vehicles (futures and/or options) when risks of a substantial stock market
correction have risen to levels where such action appears warranted. In
addition, assets may be held in debt securities (it is the Fund's current
intention to restrict these debt securities to those rated in the top three
quality categories by Moody's or S&P or determined to be of equivalent quality
by IBJS), cash or cash equivalents, U.S. Government securities, or
nonconvertible preferred stock. The Fund may invest up to 25% of its total
assets in investment grade debt obligations. Under normal market conditions, the
Fund will not hold more than 20% of its total assets in the form of cash or cash
equivalents at any given time except for temporary defensive purposes.
GROWTH AND INCOME FUND. The objective of the Growth and Income Fund is to
provide investors with long-term capital appreciation and current income for
high total return by investing in a balance of equities and debt market
securities.
The debt market portion of the Fund will invest in fixed income securities
such as U.S. Government securities, corporate bonds, asset-backed securities
(including mortgage-backed securities), savings and loan and U.S. and foreign
bank obligations, commercial paper, and related repurchase agreements,
convertible securities, preferred stocks and debt of foreign governments or
corporations. A minimum of 65% of the debt market portion of the portfolio will
be invested in securities rated "A" or better by a NRSRO, or if unrated,
determined by the Adviser to be of comparable quality. Interest rate futures
and/or options and options on interest rate futures may be used to hedge the
portfolio against reinvestment and interest rate risk when deemed necessary. The
Fund has no limitation as to average maturity or maturity of individual
securities.
The equity portion of the Fund will invest in common stocks of publicly
traded U.S. companies, convertible securities, preferred stocks of U.S.
companies, securities of foreign companies if those securities are traded
"over-the-counter" typically through the NASDAQ system, American Depository
Receipts ("ADRs"), and warrants of U.S. companies. Each stock that is purchased
will be selected on the weight of available evidence, including but not limited
to: (1) the company's fundamental business outlook and competitive position, (2)
2
<PAGE>
the valuation of the security relative to its own historical norms, to the
industry in which the company competes, and to the market as a whole, and (3)
the momentum of earnings growth expected to be generated by the company. IBJS
will seek to control performance risk in two ways: (1) relative to the market,
by diversifying investments across economic sectors and amongst small-, medium-,
and large-capitalization companies, and (2) by increasing the level of money
market reserves and/or employing hedging vehicles (futures and/or options) when
risks of a substantial stock market correction have risen to levels where such
action appears warranted.
The Fund will generally invest 30-70% of its assets in equity securities
and the remaining 30-70% in debt market securities. The Fund will not hold more
than 20% of its total assets in the form of cash or cash equivalents at any
given time except for temporary defensive purposes.
SHORT-TERM TRADING FOR THE CORE EQUITY FUND AND GROWTH AND INCOME FUND
Under certain market conditions, both the Core Equity Fund and the Growth
and Income Fund may seek profits by short-term trading. The length of time a
Fund has held a particular security is not generally a consideration in
investment decisions. A change in the number of securities owned by a Fund is
known as "portfolio turnover". To the extent short-term trading strategies are
used, a Fund's portfolio turnover rate may be higher than that of other mutual
funds. Portfolio turnover generally involves some expense to a Fund, including
brokerage commissions or dealer mark-ups and other transaction costs on the sale
of securities and reinvestment in other securities. Such transactions may result
in realization of taxable capital gains.
RISKS OF INVESTING IN THE FUNDS
The Money Market Fund attempts to maintain the value of its shares at a
constant $1.00 share price, although there can be no assurance that the Money
Market Fund will always be able to do so. The Money Market Fund may not achieve
as high a level of current income as other funds that do not limit their
investments to the high quality securities in which the Money Market Fund
invests.
The price per share of the Non-Money Market Funds will fluctuate with
changes in value of the investments held by each Fund. Additionally, there can
be no assurance that a Fund will achieve its investment objective or be
successful in preventing or minimizing the risk of loss that is inherent in
investing in particular types of securities. Such risks include the sensitivity
of the cash flows and yields of separately traded interest and principal
components of obligations to the rate of principal payments (including
prepayments). With respect to mortgage-backed securities, risks include a
similar sensitivity to the rate of prepayments in that, although the value of
fixed-income securities generally increases during periods of falling interest
rates as a result of prepayments and other factors, this is not always the case
with respect to mortgage-backed securities. Asset-backed securities involve the
risk that such securities do not usually have the benefit of a complete security
interest in the related collateral. Positions in options, futures and options on
futures involve the risks that such options and futures may fail as hedging
techniques, that the loss from investing in futures transactions is potentially
unlimited and that closing transactions may not be effected where a secondary
liquid market does not exist. Further, investment in the securities of issuers
in any foreign country involves special risks and considerations not typically
associated with investing in U.S. issuers. Bonds involve the risk that their
price will decrease if interest rates increase. While each of the portfolio
managers for the Funds has significant experience in managing registered
investment company portfolios similar to the Funds.
MANAGEMENT OF THE FUNDS
IBJS acts as investment adviser to all of the Funds. For its services, IBJS
receives a fee from each Fund based upon each Fund's average daily net assets.
See "Fee Table" and "Management of the Funds" in this Prospectus.
Furman Selz acts as administrator and sponsor to the Funds. For its
services, Furman Selz receives a fee from the Funds based on each Fund's average
daily net assets. See "Management of the Funds" in this Prospectus.
3
<PAGE>
GUIDE TO INVESTING IN THE IBJ FAMILY OF FUNDS
PURCHASE ORDERS FOR THE MONEY MARKET FUND RECEIVED BY 12:00 NOON EASTERN
TIME WILL BECOME EFFECTIVE THAT DAY. PURCHASE ORDERS FOR ALL OTHER FUNDS
RECEIVED BY YOUR IBJS REPRESENTATIVE IN PROPER FORM PRIOR TO 4:15 P.M., EASTERN
TIME, AND TRANSMITTED TO THE DISTRIBUTOR PRIOR TO 5:00 P.M. EASTERN TIME, WILL
BECOME EFFECTIVE THAT DAY.
o Minimum Initial Investment.....................$1,000
o Minimum Initial Investment for IRAs............$ 250
o Minimum Subsequent Investment..................$ 50
The Funds are purchased at net asset value.
SHAREHOLDERS MAY EXCHANGE SHARES BETWEEN FUNDS IN THE TRUST BY TELEPHONE OR
MAIL. EXCHANGES MAY NOT BE EFFECTED BY FACSIMILE.
o Minimum initial exchange.......................$ 500
(MINIMUM FOR SUBSEQUENT EXCHANGES)
Shareholders may redeem shares by telephone, mail or wire. Shares may not
be redeemed by facsimile.
o If a redemption request is received by 12:00 noon Eastern time,
proceeds for the Reserve Money Market Fund will be transferred to a
designated account that day.
o The Funds reserve the right to redeem upon not less than 30 days'
notice all shares in a Fund's account which have an aggregate value of
$500 or less.
(Redemption by telephone and wire is not available for IRAs and trust
relationships of IBJS.)
ALL DIVIDENDS AND DISTRIBUTIONS WILL BE AUTOMATICALLY PAID IN ADDITIONAL
SHARES AT NET ASSET VALUE OF THE APPLICABLE FUND UNLESS CASH PAYMENT IS
REQUESTED.
o Distributions for the Core Equity Fund are paid at least once
annually, distributions for the Growth and Income Fund are paid
quarterly and distributions for the other Funds are paid monthly.
4
<PAGE>
FUND EXPENSES
The following expense table lists the costs and expenses that an investor in the
Service Class of shares will incur either directly or indirectly as a
shareholder of a Fund. The information is based upon expenses incurred during
the first year of operations ended November 30, 1995. Shareholders in the
Premium Class of Shares may be subject to an additional 12b-1 fee up to 0.35% of
average daily net assets and a shareholder servicing charge of up to 0.50% of
average daily net assets. See "Other Information--Capitalization."
FEE TABLE
<TABLE>
<CAPTION>
RESERVE GROWTH
MONEY CORE AND
MARKET BOND EQUITY INCOME
FUND FUND FUND FUND
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)................ None None None None
Maximum Sales Load Imposed on Reinvested
Dividends (as a percentage of offering price) ..... None None None None
Deferred Sales Load (as a percentage of
redemption proceeds) .............................. None None None None
Redemption Fees...................................... None None None None
Exchange Fees........................................ None None None None
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees2 (after waiver).................... 0.08% 0.40% 0.50% 0.50%
12b-1 Fees........................................... None None None None
Other Expenses+...................................... 0.56% 0.72% 0.39% 0.55%
--------- --------- --------- ---------
Total Portfolio Operating Expenses1,2.............. 0.64% 1.12% 0.89% 1.05%
========= ========= ========= =========
</TABLE>
- ---------------------
1 Shareholders may be charged a wire redemption fee by their bank for
receiving a wire payment on their behalf.
2 Reflects advisory fees net of fees waived as a result of a voluntary waiver
by the Adviser. Absent such waiver the Management Fees for the Reserve
Money Market Fund, the Bond Fund, the Core Equity Fund and the Growth and
Income Fund are 0.35%, 0.50%, 0.60% and 0.60%, respectively, and the Total
Portfolio Operating Expenses of the Reserve Money Market Fund, the Bond
Fund, the Core Equity Fund and the Growth and Income Fund are 0.91%, 1.22%,
0.99% and 1.15%, respectively.
+ Includes a $15 per account fee per year for transfer agency functions.
5
<PAGE>
The purpose of this table is to assist a shareholder in the Service
Class of shares in understanding the various costs and expenses that an investor
in the Funds will bear.
Example:*
You would pay the following expenses on a $1,000 investment, assuming
(1) 5% gross annual return and (2) redemption at the end of each time period:
RESERVE GROWTH
MONEY CORE AND
MARKET BOND EQUITY INCOME
FUND FUND FUND FUND
------ ------ ------ -------
1 year.............. $ 7 $ 11 $ 9 $ 11
3 years............. $20 $ 36 $ 28 $ 33
5 years............. $36 $ 62 $ 49 $ 58
10 years............ $80 $136 $110 $128
- ------------------------
* This example should not be considered a representation of future expenses
which may be more or less than those shown. The assumed 5% annual return is
hypothetical and should not be considered a representation of past or
future annual return; actual return may be greater or less than the assumed
amount.
6
<PAGE>
FINANCIAL HIGHLIGHTS
The financial data shown below is to assist investors in evaluating the
performance of the Funds since February 1, 1995 (commencement of operations)
through November 30, 1995. The financial highlights for the period ended
November 30, 1995 have been audited by Coopers & Lybrand L.L.P., independent
accountants, whose report thereon appears in the Statement of Additional
Information (the "SAI"). The financial statements and related notes are included
in the SAI.
<TABLE>
<CAPTION>
RESERVE MONEY GROWTH AND
MARKET FUND BOND FUND CORE EQUITY FUND INCOME FUND
------------------- -------------------- --------------------- --------------------
SERVICE SERVICE SERVICE SERVICE
CLASS CLASS CLASS CLASS
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $1.00 $10.00 $10.00 $10.00
--------- --------- --------- ---------
Income from Investment Operations:
Net investment income......... 0.04 0.48 0.13 0.31
Net realized and unrealized
gain/(loss) on investments 0.00 0.72 2.84 1.79
--------- --------- --------- ---------
Total from Investment Operations 0.04 1.20 2.97 2.10
Less Distributions:
Dividends from net investment income (0.04) (0.48) 0.00 (0.31)
--------- --------- --------- ---------
Net Asset Value, End of Period..... $1.00 $10.72 $12.97 $11.79
Total Return....................... 4.55% 12.28% 29.70% 20.82%
Net Assets, End of Period (in thousands) $28,943 $26,849 $86,596 $50,583
Ratios to average net assets of:
Net investment income......... 5.35%* 5.59%* 1.29%* 3.04%*
Expenses before waivers/
reimbursements 0.92%* 1.22%* 0.99%* 1.15%*
Expenses net waivers/
reimbursements 0.64%* 1.12%* 0.89% 1.05%*
Portfolio Turnover Rate............ N/A 297% 37% 78%
</TABLE>
- ---------------------------------
+ Per share amounts based on the average number of shares outstanding during the
period February 1, 1995 (Commencement of Operations) to November 30, 1995.
* Annualized.
7
<PAGE>
THE INVESTMENT POLICIES AND PRACTICES OF THE FUNDS
Each Fund is a separate investment fund or portfolio, commonly known as
a mutual fund. The Funds are portfolios of a Delaware business trust, IBJ Funds
Trust, organized under the laws of Delaware as an open end, management
investment company. The Trust's Board of Trustees oversees the overall
management of the Funds and elects the officers of the Trust.
o The investment objective of the Reserve Money Market Fund is to
provide investors with current income, liquidity and the maintenance
of a stable $1.00 net asset value by investing in high quality,
short-term obligations.
o The investment objective of the Bond Fund is to provide investors with
a high level of total return by investing in debt market securities.
o The investment objective of the Core Equity Fund is to provide
investors with long-term capital appreciation.
o The investment objective of the Growth and Income Fund is to provide
investors with long-term capital appreciation and current income for a
high total return by investing in a balance of equities and debt
market securities.
Each Fund follows its own investment objectives and policies, including
certain investment restrictions. The SAI contains specific investment
restrictions which govern the Funds' investments. Those restrictions and the
Funds' investment objectives are fundamental policies, which means that they may
not be changed without a majority vote of shareholders of the affected Fund.
Except for the objectives and those restrictions specifically identified as
fundamental, all other investment policies and practices described in this
Prospectus and in the SAI are not fundamental and may change solely with Board
of Trustees approval.
The Adviser selects investments and makes investment decisions based on
the investment objective and policies of each Fund. The following is a
description of securities and investment practices.
U.S. TREASURY OBLIGATIONS (ALL FUNDS). The Funds may invest in U.S.
Treasury obligations, which are backed by the full faith and credit of the
United States Government as to the timely payment of principal and interest.
U.S. Treasury obligations consist of bills, notes, and bonds and separately
traded interest and principal component parts of such obligations known as
STRIPS which generally differ in their interest rates and maturities. U.S.
Treasury bills, which have maturities of up to one year, notes, which have
original maturities ranging from one year to 10 years, and bonds, which have
original maturities of 10 to 30 years, are direct obligations of the United
States Government. The Funds may invest in privately placed U.S. Treasury
obligations.
U.S. GOVERNMENT SECURITIES (ALL FUNDS). U.S. Government securities are
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities. U.S. Government securities include debt securities issued or
guaranteed by U.S. Government-sponsored enterprises and federal agencies and
instrumentalities. Some types of U.S. Government securities are supported by the
full faith and credit of the United States Government or U.S. Treasury
guarantees, such as mortgage-backed certificates guaranteed by the Government
National Mortgage Association ("GNMA"). Other types of U.S. Government
securities, such as obligations of the Student Loan Marketing Association,
provide recourse only to the credit of the agency or instrumentality issuing the
obligation. In the case of obligations not backed by the full faith and credit
of the United States Government, the investor must look to the agency issuing or
guaranteeing the obligation for ultimate repayment. The Funds may invest in
privately placed U.S. Government Securities.
COMMERCIAL PAPER (ALL FUNDS). Commercial paper includes short-term
unsecured promissory notes, variable rate demand notes and variable rate master
demand notes issued by both domestic and foreign bank holding companies,
corporations and financial institutions and United States Government agencies
and instrumentalities (but only includes taxable securities). All commercial
8
<PAGE>
paper purchased by the Funds is, at the time of investment, rated in one of the
top two rating categories of at least one NRSRO, or if not rated is, in the
opinion of the Adviser, of an investment quality comparable to rated commercial
paper in which the Funds may invest, or, with respect to the Reserve Money
Market Fund, (i) rated "P-1" by Moody's and "A-1" or better by S&P or in a
comparable rating category by any two NRSROs that have rated the commercial
paper or (ii) rated in a comparable category by only one such organization if it
is the only organization that has rated the commercial paper (and provided the
purchase is approved or ratified by the Board of Trustees).
CORPORATE DEBT SECURITIES (ALL FUNDS). These Funds may purchase
corporate debt securities, subject to the rating and quality requirements
specified with respect to each Fund as set forth in "Highlights--Investment
Objectives and Policies" in this Prospectus. The Funds may invest in both rated
commercial paper and rated corporate debt obligations of foreign issuers that
meet the same quality criteria applicable to investments by the Funds in
commercial paper and corporate debt obligations of domestic issuers.
MORTGAGE-RELATED SECURITIES (ALL FUNDS). These Funds are permitted to
invest in mortgage-related securities, subject to the rating and quality
requirements specified for debt securities with respect to each such Fund in
"Highlights--Investment Objectives and Policies" in this Prospectus. Mortgage
pass-through securities are securities representing interests in "pools" of
mortgages in which payments of both interest and principal on the securities are
made monthly, in effect, "passing through" monthly payments made by the
individual borrowers on the mortgage loans which underlie the securities (net of
fees paid to the issuer or guarantor of the securities). Early repayment of
principal on mortgage pass-through securities (arising from prepayments of
principal due to sale of the underlying property, refinancing, or foreclosure,
net of fees and costs which may be incurred) may expose a Fund to a lower rate
of return upon reinvestment of principal. Also, if a security subject to
prepayment has been purchased at a premium, in the event of prepayment the value
of the premium would be lost. Like other fixed-income securities, when interest
rates rise, the value of mortgage-related securities generally will decline;
however, when interest rates decline, the value of mortgage-related securities
with prepayment features may not increase as much as other fixed-income
securities. In recognition of this prepayment risk to investors, the Public
Securities Association (the "PSA") has standardized the method of measuring the
rate of mortgage loan principal prepayments. The PSA formula, the Constant
Prepayment Rate or other similar models that are standard in the industry will
be used by the Funds in calculating maturity for purposes of investment in
mortgage-related securities.
Payment of principal and interest on some mortgage pass-through
securities (but not the market value of the securities themselves) may be
guaranteed by the full faith and credit of the U.S. Government (in the case of
securities guaranteed by GNMA) or guaranteed by agencies or instrumentalities of
the U.S. Government (in the case of securities guaranteed by the Federal
National Mortgage Association ("FNMA") or the Federal Home Loan Mortgage
Corporation ("FHLMC"), which are supported only by the discretionary authority
of the U.S. Government to purchase the agency's obligations). Mortgage
pass-through securities created by non-governmental issuers (such as commercial
banks, savings and loan institutions, private mortgage insurance companies,
mortgage bankers and other secondary market issuers) may be supported in various
forms of insurance or guarantees issued by governmental entities.
Collateralized Mortgage Obligations ("CMOs") are hybrid instruments
with characteristics and risks of both mortgage-backed bonds and mortgage
pass-through securities. Similar to a bond, interest and prepaid principal on a
CMO are paid, in most cases, semi-annually. CMOs may be collateralized by whole
mortgage loans but are more typically collateralized by portfolios of mortgage
pass-through securities guaranteed by GNMA, FHLMC or FNMA. CMOs are structured
in multiple classes, with each class bearing a different stated maturity or
interest rate. Certain CMOs have recently posed liquidity problems in changing
rate environments.
ASSET-BACKED SECURITIES (ALL FUNDS). These Funds are permitted to
invest in asset-backed securities, subject to the rating and quality
requirements for debt securities specified with respect to each such Fund in
"Highlights--Investment Objectives and Policies" in this Prospectus. Through the
use of trusts and special purpose subsidiaries, various types of assets,
primarily home equity loans and automobile and credit card receivables, are
being securitized in pass-through structures similar to the mortgage
pass-through structures described above. Consistent with the Funds' investment
9
<PAGE>
objectives, policies and quality standards, a Fund may invest in these and other
types of asset- backed securities which may be developed in the future.
Asset-backed securities involve certain risks that are not posed by
mortgage-related securities, resulting mainly from the fact that asset-backed
securities do not usually contain the benefit of a complete security interest in
the related collateral. For example, credit card receivables generally are
unsecured and the debtors are entitled to the protection of a number of state
and Federal consumer credit laws, some of which may reduce the ability of the
Fund, as an investor, to obtain full payment in the event of default or
insolvency. In the case of automobile receivables, due to various legal and
economic factors, proceeds from repossessed collateral may not always be
sufficient to support payments on these securities. The risks associated with
asset-backed securities are often reduced by the addition of credit enhancements
such as a letter of credit from a bank, excess collateral or a third-party
guarantee. With respect to asset-backed securities arising from secured debt
(such as automobile receivables), there is a risk that parties other than the
originator and servicer of the loan may acquire a security interest superior to
that of the securities holders.
COMMON STOCKS (BOND FUND, CORE EQUITY FUND AND GROWTH AND INCOME FUND).
Common stock represents the residual ownership interest in the issuer after all
of its obligations and preferred stocks are satisfied. Common stock fluctuates
in price in response to many factors, including historical and prospective
earnings of the issuer, the value of its assets, general economic conditions,
interest rates, investor perceptions and market volatility.
PREFERRED STOCKS (BOND FUND, CORE EQUITY FUND AND GROWTH AND INCOME
FUND). Preferred stock has a preference over common stock in liquidation and
generally in dividends as well, but is subordinated to the liabilities of the
issuer in all respects. Preferred stock may or may not be convertible into
common stock. As a general rule, the market value of preferred stock with a
fixed dividend rate and no conversion element varies inversely with interest
rates and perceived credit risk. Because preferred stock is junior to debt
securities and other obligations of the issuer, deterioration in the credit
quality of the issuer will cause greater changes in the value of a preferred
stock than in a more senior debt security with similar stated yield
characteristics.
AMERICAN DEPOSITORY RECEIPTS (BOND FUND, CORE EQUITY FUND AND GROWTH
AND INCOME FUND). American Depository Receipts ("ADRs") are U.S.
dollar-denominated receipts generally issued by domestic banks, which evidence
the deposit with the bank of a foreign issuer and which are publicly traded on
exchanges or over-the-counter in the United States.
These Funds may each invest in both sponsored and unsponsored ADR
programs. There are certain risks associated with investments in unsponsored ADR
programs. Because the non-U.S. company does not actively participate in the
creation of the ADR program, the underlying agreement for service and payment
will be between the depository and the shareholder. The Company issuing the
stock underlying the ADR pays nothing to establish the unsponsored facility, as
fees for ADR issuance and cancellation are paid by brokers. Investors directly
bear the expenses associated with certificate transfer, custody and dividend
payment.
In an unsponsored ADR program, there also may be several depositories
with no defined legal obligations to the non-U.S. company. The duplicate
depositories may lead to marketplace confusion because there would be no central
source of information to buyers, sellers and intermediaries. The efficiency of
centralization gained in a sponsored program can greatly reduce the delays in
delivery of dividends and annual reports. In addition, with respect to all ADRs
there is always the risk of loss due to currency fluctuations.
Investments in ADRs involve certain risks not typically involved in
purely domestic investments, including future foreign political and economic
developments, and the possible imposition of foreign governmental laws or
restrictions applicable to such investments. Securities of foreign issuers
through ADRs are subject to different economic, financial, political and social
factors. Individual foreign economies may differ favorably or unfavorably from
the U.S. economy in such respects as growth of gross national product, rate of
inflation, capital reinvestment, resources, self-sufficiency and balance of
payments position. With respect to certain countries, there is the possibility
of expropriation of assets, confiscatory taxation, political or social
instability or diplomatic developments which could adversely affect the value of
the particular ADR. There may be less publicly available information about a
foreign company than about a U.S. company, and foreign companies may not be
10
<PAGE>
subject to accounting, auditing and financial reporting standards and
requirements comparable to those of U.S. companies.
INVESTMENT IN FOREIGN SECURITIES (ALL FUNDS). These Funds may each
invest in securities of foreign governmental and private issuers. Investments in
foreign securities involve certain considerations that are not typically
associated with investing in domestic securities. There may be less publicly
available information about a foreign issuer than about a domestic issuer.
Foreign issuers also are not generally subject to uniform accounting, auditing
and financial reporting standards comparable to those applicable to domestic
issuers. In addition, with respect to certain foreign countries, interest may be
withheld at the source under foreign income tax laws, and there is a possibility
of expropriation or confiscatory taxation, political or social instability or
diplomatic developments that could adversely affect investments in securities of
issuers located in those countries.
CONVERTIBLE AND EXCHANGEABLE SECURITIES (BOND FUND, CORE EQUITY FUND
AND GROWTH AND INCOME FUND). These Funds are permitted to invest in convertible
and exchangeable securities, subject to the rating and quality requirements
specified with respect to equity securities for the Core Equity Fund in
"Highlights--Investment Objectives and Policies" in this Prospectus. Convertible
securities generally offer fixed interest or dividend yields and may be
converted either at a stated price or stated rate for common or preferred stock.
Exchangeable securities may be exchanged on specified terms for common or
preferred stock. 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 or exchange feature, the market
value of convertible or exchangeable securities tends to vary with fluctuations
in the market value of the underlying common or preferred stock. Debt securities
that are convertible into or exchangeable for preferred or common stock are
liabilities of the issuer but are generally subordinated to senior debt of the
issuer. The Funds may invest in convertible securities rated below investment
grade.
DOMESTIC AND FOREIGN BANK OBLIGATIONS (ALL FUNDS). These obligations
include but are not restricted to certificates of deposit, commercial paper,
Yankee certificates of deposit, bankers' acceptances, Eurodollar certificates of
deposit and time deposits, promissory notes and medium term deposit notes. The
Funds will not invest in any obligations of their affiliates, as defined under
the 1940 Act.
Each Fund limits its investment in United States bank obligations to
obligations of United States banks (including foreign branches). Each Fund
limits its investment in foreign bank obligations to United States
dollar-denominated obligations of foreign banks (including United States
branches of foreign banks) which in the opinion of the Adviser, are of an
investment quality comparable to obligations of United States banks which may be
purchased by the Funds. There is no limitation on the amount of the Funds'
assets which may be invested in obligations of foreign banks which meet the
conditions set forth herein.
Fixed time deposits may be withdrawn on demand by the investor, but may
be subject to early withdrawal penalties which vary depending upon market
conditions and the remaining maturity of the obligation. There are no
contractual restrictions on the right to transfer a beneficial interest in a
fixed time deposit to a third party, although there is no market for such
deposits. Investments in fixed time deposits subject to withdrawal penalties
maturing from two days through seven days may not exceed 15% of the value of the
total assets of the Non-Money Market Funds and 10% of the value of the total
assets of the Money Market Fund.
Obligations of foreign banks involve somewhat different investment
risks than those affecting obligations of United States banks, including the
possibilities that their liquidity could be impaired because of future political
and economic developments, that the obligations may be less marketable than
comparable obligations of United States banks, that a foreign jurisdiction might
impose withholding taxes on interest income payable on those obligations, that
foreign deposits may be seized or nationalized, that foreign governmental
restrictions such as exchange controls may be adopted which might adversely
affect the payment of principal and interest on those obligations and that the
selection of those obligations may be more difficult because there may be less
publicly available information concerning foreign banks or the accounting,
auditing and financial reporting standards, practices and requirements
applicable to foreign banks may differ from those applicable to United States
11
<PAGE>
banks. In that connection, foreign banks are not subject to examination by any
United States Government agency or instrumentality.
Investments in Eurodollar and Yankee dollar obligations involve
additional risks. Most notably, there generally is less publicly available
information about foreign companies; there may be less governmental regulation
and supervision; they may use different accounting and financial standards; and
the adoption of foreign governmental restrictions may adversely affect the
payment of principal and interest on foreign investments. In addition, not all
foreign branches of United States banks are supervised or examined by regulatory
authorities as are United States banks, and such branches may not be subject to
reserve requirements.
ZERO COUPON SECURITIES (ALL FUNDS). The Funds may invest in zero coupon
securities. A zero coupon security pays no interest to its holder during its
life and is sold at a discount to its face value at maturity. The market prices
of zero coupon securities generally are more volatile than the market prices of
securities that pay interest periodically and are more sensitive to changes in
interest rates than non-zero coupon securities having similar maturities and
credit qualities. Although zero coupon securities do not pay interest to holders
prior to maturity, federal income tax law requires a Fund to recognize as
interest income a portion of the security's discount each year and that this
income must then be distributed to shareholders along with other income earned
by the Fund. To the extent that any shareholders in a Fund elect to receive
their dividends in cash rather than reinvest such dividends in additional
shares, cash to make these distributions will have to be provided from the
assets of the Fund or other sources such as proceeds of sales of Fund shares
and/or sales of portfolio securities. In such cases, the Fund will not be able
to purchase additional income producing securities with cash used to make such
distributions and its current income may ultimately be reduced as a result.
VARIABLE RATE DEMAND OBLIGATIONS (ALL FUNDS). Variable rate demand
obligations have a maturity of 397 days or less with respect to the Money Market
Fund or five to twenty years with respect to the Non-Money Market Funds, but
carry with them the right of the holder to put the securities to a remarketing
agent or other entity on short notice, typically seven days or less. Generally,
the remarketing agent will adjust the interest rate every seven days (or at
other intervals corresponding to the notice period for the put), in order to
maintain the interest rate at the prevailing rate for securities with a
seven-day maturity. The remarketing agent is typically a financial intermediary
that has agreed to perform these services. Variable rate master demand
obligations permit a Fund to invest fluctuating amounts at varying rates of
interest pursuant to direct arrangements between the Funds, as lender, and the
borrower. Because the obligations are direct lending arrangements between the
Funds and the borrower, they will not generally be traded, and there is no
secondary market for them, although they are redeemable (and thus immediately
repayable by the borrower) at principal amount, plus accrued interest, at any
time. The borrower also may prepay up to the full amount of the obligation
without penalty. While master demand obligations, as such, are not typically
rated by credit rating agencies, if not so rated, a Fund may, under its minimum
rating standards, invest in them only if, in the opinion of the Adviser, they
are of an investment quality comparable to other debt obligations in which the
Funds may invest and are within the credit quality policies, guidelines and
procedures established by the Board of Trustees. See "Investment Policies" in
the SAI for further details on variable rate demand obligations and variable
rate master demand obligations.
OTHER MUTUAL FUNDS (ALL FUNDS). Each Fund may invest in shares of other
open-end, management investment companies, subject to the limitations of the
1940 Act and subject to such investments being consistent with the overall
objective and policies of the Fund making such investment, provided that any
such purchases will be limited to shares of unaffiliated investment companies.
The purchase of securities of other mutual funds results in duplication of
expenses such that investors indirectly bear a proportionate share of the
expenses of such mutual funds including operating costs, and investment advisory
and administrative fees.
"WHEN ISSUED" AND "FORWARD COMMITMENT" TRANSACTIONS (ALL FUNDS). The
Funds may purchase securities on a when issued and delayed delivery basis and
may purchase or sell securities on a forward commitment basis. When issued or
delayed delivery transactions arise when securities are purchased by a Fund with
payment and delivery taking place in the future in order to secure what is
considered to be an advantageous price and yield to the Fund at the time of
entering into the transaction. A forward commitment transaction is an agreement
by a Fund to purchase or sell securities at a specified future date. When a Fund
engages in these transactions, the Fund relies on the buyer or seller, as the
12
<PAGE>
case may be, to consummate the sale. Failure to do so may result in the Fund
missing the opportunity to obtain a price or yield considered to be
advantageous. When issued and delayed delivery transactions and forward
commitment transactions may be expected to occur a month or more before delivery
is due. However, no payment or delivery is made by a Fund until it receives
payment or delivery from the other party to the transaction. A separate account
containing only liquid assets such as cash, U.S. Government securities, or other
liquid high grade debt obligations equal to the value of purchase commitments
will be maintained with the Funds' custodian until payment is made.
LOANS OF PORTFOLIO SECURITIES (ALL FUNDS). To increase current income,
each Fund may lend its portfolio securities in an amount up to 331/3% of each
such Fund's total assets to brokers, dealers and financial institutions,
provided certain conditions are met, including the condition that each loan is
secured continuously by collateral maintained on a daily mark-to-market basis in
an amount at least equal to the current market value of the securities loaned.
For further information, see "Investment Policies" in the SAI.
REPURCHASE AGREEMENTS (ALL FUNDS). The Funds may enter into repurchase
agreements with any bank and broker-dealer which, in the opinion of the
Trustees, presents a minimum risk of bankruptcy. Under a repurchase agreement a
Fund acquires securities and obtains a simultaneous commitment from the seller
to repurchase the securities at a specified time and at an agreed upon yield.
The agreements will be fully collateralized and the value of the collateral,
including accrued interest, marked-to-market daily. The agreements may be
considered to be loans made by the purchaser, collateralized by the underlying
securities. If the seller should default on its obligation to repurchase the
securities, a Fund may experience a loss of income from the loaned securities
and a decrease in the value of any collateral, problems in exercising its rights
to the underlying securities and costs and time delays in connection with the
disposition of securities. The Money Market Fund may not invest more than 10%
and the Non-Money Market Funds may not invest more than 15% of its net assets in
repurchase agreements maturing in more than seven business days and in
securities for which market quotations are not readily available. For more
information about repurchase agreements, see "Investment Policies" in the SAI.
PORTFOLIO TURNOVER. The Funds generally will not engage in the trading
of securities for the purpose of realizing short-term profits, but each Fund
will adjust its portfolio as it deems advisable in view of prevailing or
anticipated market conditions or fluctuations in interest rates to accomplish
its respective investment objective. For example, each Fund may sell portfolio
securities in anticipation of an adverse market movement. Other than for tax
purposes, frequency of portfolio turnover will not be a limiting factor if a
Fund considers it advantageous to purchase or sell securities. The Funds do not
anticipate that the respective annual portfolio turnover rates will exceed the
following: Bond Fund, 350%; Core Equity Fund, 200%; Growth and Income Fund,
280%. A high rate of portfolio turnover involves correspondingly greater
transaction expenses than a lower rate, which expenses must be borne by each
Fund and its shareholders. High portfolio turnover rates may also make it more
difficult for the Funds to satisfy the requirement for qualification as a
regulated investment company under the Internal Revenue Code of 1986, as amended
(the "Code"), that less than 30% of each Fund's gross income in any tax year be
derived from gains on the sale of securities held for less than three months.
MANAGEMENT OF THE FUNDS
The business and affairs of each Fund are managed under the direction
of the Board of Trustees. Information about the Trustees, as well as the Trust's
executive officers, may be found in the SAI under the heading
"Management--Trustees and Officers."
THE ADVISER: IBJ SCHRODER BANK & TRUST COMPANY
IBJ Schroder Bank & Trust Company ("IBJS") provides investment
advisory services to the Funds pursuant to an Advisory
Agreement with the Trust (the "Advisory Agreement"). Subject
to such policies as the Trust's Board of Trustees may
determine, IBJS makes investment decisions for the Funds. For
the advisory services it provides to the Funds, IBJS may
receive fees based on average daily net assets up to the
following annualized rates for the Funds: Reserve Money
Market Fund, 0.35%; Bond Fund, 0.50%; Core Equity Fund, 0.60%;
and Growth and Income Fund, 0.60%.
13
<PAGE>
Each of the portfolio managers listed below has significant
experience in managing registered investment company
portfolios similar to the Funds. Martin Liebgott, of IBJS, is
responsible for the day-to-day management of the Reserve Money
Market Fund, the Bond Fund and the debt market securities
portion of the Growth and Income Fund's portfolio. Mr.
Liebgott has been with IBJS since 1988 and was previously with
Citibank, N.A. from 1966 to 1988. Christian Kaefer, Senior
Investment Officer of IBJS, is responsible for the day-to-day
management of the portfolios of the Core Equity Fund and the
equity portion of the Growth and Income Fund. Mr. Kaefer has
been with IBJS since 1987 and was previously with Schroder
Capital Management International from 1982 to 1987.
Charles Porten, Chief Investment Officer of IBJS oversees the
Funds' investments. Mr. Porten does not manage any particular
portfolio but exercises general supervisory authority over all
portfolio managers. Mr. Porten has been with IBJS since 1988
and was previously with Citibank, N.A. from 1978 to 1988.
IBJS, formed in 1929, provides banking, trust and investment
services to individuals and institutions. It is 98.3% owned by
The Industrial Bank of Japan, Limited (and 1.7% owned by
Schroders Incorporated). IBJS acts as the investment adviser
to a wide variety of trusts, individuals, institutions and
corporations. Its investment management responsibilities, as
of December 31, 1995, included accounts with aggregate assets
of approximately $1.5 billion. The principal business address
of IBJS is One State Street, New York, New York 10004. As of
June 24, 1985, The Industrial Bank of Japan, Limited acquired
its interest in J. Henry Schroder Bank & Trust Company from
Schroders Incorporated. The name of the bank was changed from
J. Henry Schroder Bank & Trust Company to IBJ Schroder Bank &
Trust Company, effective January 1, 1987. The Industrial Bank
of Japan does not perform services for the Trust or any of the
Funds.
Based upon the advice of counsel, IBJS believes that the performance of
investment advisory services for the Funds will not violate the Glass Steagall
Act or other applicable banking laws or regulations. However, future statutory
or regulatory changes, as well as future judicial or administrative decisions
and interpretations of present and future statutes and regulations, could
prevent IBJS from continuing to perform such services for the Funds. If IBJS
were prohibited from acting as investment adviser to the Funds, it is expected
that the Board of Trustees would recommend to shareholders approval of a new
investment advisory agreement with another qualified investment adviser selected
by the Board or that the Board would recommend other appropriate action.
THE SPONSOR AND DISTRIBUTOR
Furman Selz LLC, 230 Park Avenue, New York, New York 10169, acts as
Sponsor of the Funds. Furman Selz is primarily an institutional brokerage firm
with membership on the New York, American, Boston, Midwest, Pacific and
Philadelphia Stock Exchanges. Furman Selz also serves as administrator and
distributor of other mutual funds. IBJ Funds Distributor, Inc., an affiliate of
Furman Selz LLC, acts as Distributor of the Funds.
ADMINISTRATIVE SERVICES
The Funds have also entered into an Administrative Services Contract
with Furman Selz pursuant to which Furman Selz provides certain management and
administrative services necessary for the Funds' operations including: (i)
general supervision of the operation of the Funds including coordination of the
services performed by the Funds' Advisers, transfer agent, custodian,
independent accountants and legal counsel, regulatory compliance, including the
compilation of information for documents such as reports to, and filings with,
the SEC and state securities commissions, and preparation of proxy statements
and shareholder reports for the Funds; (ii) general supervision relative to the
compilation of data required for the preparation of periodic reports distributed
to the Funds' Officers and Board of Trustees; and (iii) furnishing office space
and certain facilities required for conducting the business of the Funds. For
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<PAGE>
these services, Furman Selz receives from each Fund a fee, payable monthly, at
the annual rate of 0.15% of each Fund's average daily net assets. Pursuant to a
Services Agreement between the Trust and the Administrator, Furman Selz assists
the Trust with certain transfer and dividend disbursing agent functions and
receives a fee of $15 per account per year plus out of pocket expenses. Pursuant
to a Fund Accounting Agreement between the Trust and the Administrator, the
Administrator assists the Trust in calculating net asset values and provides
certain other accounting services for each Fund described therein, for an annual
fee of $30,000 per Fund plus out of pocket expenses.
OTHER EXPENSES
Each Fund bears all costs of its operations other than expenses
specifically assumed by Furman Selz or IBJS. The costs borne by the Funds
include legal and accounting expenses; Trustees' fees and expenses; insurance
premiums; custodian and transfer agent fees and expenses; expenses incurred in
acquiring or disposing of the Funds' portfolio securities; expenses of
registering and qualifying the Funds' shares for sale with the SEC and with
various state securities commissions; expenses of obtaining quotations on the
Funds' portfolio securities and pricing of the Funds' shares; expenses of
maintaining the Funds' legal existence and of shareholders' meetings; and
expenses of preparation and distribution to existing shareholders of reports,
proxies and prospectuses. Each Fund bears its own expenses associated with its
establishment as a series of the Trust; these expenses are amortized over a five
year period from the commencement of a Fund's operations. See "Management" in
the SAI. Trust expenses directly attributable to a Fund are charged to that
Fund; other expenses are allocated proportionately among all of the Funds in the
Trust in relation to the net assets of each Fund.
PORTFOLIO TRANSACTIONS
Pursuant to the applicable Advisory Agreement, the Adviser places
orders for the purchase and sale of portfolio investments for the Funds'
accounts with brokers or dealers selected by it in its discretion. In effecting
purchases and sales of portfolio securities for the account of the Funds, the
Adviser will seek the best available price and most favorable execution of the
Funds' orders. Trading does, however, involve transaction costs. Transactions
with dealers serving as primary market makers reflect the spread between the bid
and asked prices. Purchases of underwritten issues may be made, which will
include an underwriting fee paid to the underwriter. Purchases and sales of
securities are generally placed by the Adviser with broker dealers which, in the
Adviser's judgment, provide prompt and reliable execution at favorable security
prices and reasonable commission rates. The Adviser may cause a Fund to pay
commissions higher than another broker dealer would have charged if the Adviser
believes the commission paid is reasonable in relation to the value of the
brokerage and research services received by the Adviser. Broker dealers are
selected on the basis of a variety of factors such as reputation, capital
strength, size and difficulty of order, sale of Fund shares and research
provided to the Adviser.
FUND SHARE VALUATION
The net asset value per share of the Funds is calculated at 12:00 noon
(Eastern time) for the Money Market Fund and at 4:15 p.m. (Eastern time) for
each of the Non-Money Market Funds, Monday through Friday, on each day the New
York Stock Exchange is open for trading, which excludes the following business
holidays: New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day; and the
following additional business holidays for the Money Market Fund: Martin Luther
King's Birthday, Columbus Day and Veterans Day. The net asset value per share of
each Fund is computed by dividing the value of each Fund's net assets (i.e., the
value of the assets less the liabilities) by the total number of such Fund's
outstanding shares. All expenses, including fees paid to the Adviser and Furman
Selz, are accrued daily and taken into account for the purpose of determining
the net asset value.
Securities listed on an exchange are valued on the basis of the last
sale prior to the time the valuation is made. If there has been no sale since
the immediately previous valuation, then the current bid price is used.
Quotations are taken from the exchange where the security is primarily traded.
Portfolio securities which are primarily traded on foreign exchanges may be
valued with the assistance of a pricing service and are generally valued at the
preceding closing values of such securities on their respective exchanges,
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except that when an occurrence subsequent to the time a foreign security is
valued is likely to have changed such value, then the fair value of those
securities will be determined by consideration of other factors by or under the
direction of the Board of Trustees. Over the counter securities are valued on
the basis of the bid price at the close of business on each business day.
Securities for which market quotations are not readily available are valued at
fair value as determined in good faith by or at the direction of the Board of
Trustees. Notwithstanding the above, bonds and other fixed income securities are
valued by using market quotations and may be valued on the basis of prices
provided by a pricing service approved by the Board of Trustees. All assets and
liabilities initially expressed in foreign currencies will be converted into
U.S. dollars at the mean between the bid and asked prices of such currencies
against U.S. dollars as last quoted by any major bank.
The Money Market Fund uses the amortized cost method to value its
portfolio securities and seeks to maintain a constant net asset value of $1.00
per share, although there may be circumstances under which this goal cannot be
achieved. The amortized cost method involves valuing a security at its cost and
amortizing any discount or premium over the period until maturity, regardless of
the impact of fluctuating interest rates on the market value of the security.
See the SAI for a more complete description of the amortized cost method.
PRICING AND PURCHASE OF FUND SHARES
Orders for the purchase of shares will be executed at the net asset
value per share next determined after an order has been received.
The following purchase procedures do not apply to certain fund or trust
accounts that are managed by IBJS. The customer should consult his or her trust
administrator for proper instructions.
All funds received are invested in full and fractional shares of the
appropriate Fund. Certificates for shares are not issued. Furman Selz maintains
records of each shareholder's holdings of Fund shares, and each shareholder
receives a statement of transactions, holdings and dividends. The Funds reserve
the right to reject any purchase.
An investment may be made using any of the following methods:
THROUGH IBJS. Shares are available to new and existing shareholders
through IBJS or its affiliates or other authorized investment advisers. To make
an investment using this method, simply complete a Purchase Application and
contact your IBJS representative or investment adviser with instructions as to
the amount you wish to invest. They will then contact the Fund to place the
order on your behalf on that day.
Orders received by your IBJS representative for the Non-Money Market
Funds in proper order prior to the determination of net asset value and
transmitted to the Fund prior to the close of its business day (which is
currently 5:00 p.m., Eastern time), will become effective that day. Orders for
the Money Market Fund received prior to 12:00 noon Eastern time will become
effective that day. Parties who receive orders are obligated to transmit them
promptly. You should receive written confirmation of your order within a few
days of receipt of instructions from your representative.
BY WIRE. Investments may be made directly through the use of wire
transfers of Federal funds. Contact your bank and request it to wire Federal
funds to the applicable Fund. In most cases, your bank will either be a member
of the Federal Reserve Banking System or have a relationship with a bank that
is. Your bank may charge a fee for handling the transaction. To purchase shares
by a Federal funds wire, please first contact Furman Selz Mutual Funds Client
Services at (800) 99-IBJFD. They will establish a record of information for the
wire to insure the correct processing of funds. You can reach the Wire Desk at
(800) 99-IBJFD.
Then, have your bank wire funds using the following instructions:
Investors Fiduciary Trust Company
Kansas City, MO 64105
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ABA #1010-0362-1
Account Number: 751-3003
Further Credit to: Fund Name
As long as you have read the Prospectus, you may establish a new
regular account through the Wire Desk; IRAs may not be opened in this way. When
new accounts are established by wire, the distribution options will be set to
reinvest and the social security or tax identification number ("TIN") will not
be certified until a signed application is received. Completed applications
should be forwarded immediately to the Fund. With the Purchase Application, the
shareholder can specify other distribution options and add any special features
offered by a Fund. Should any dividend distributions or redemptions be paid
before the TIN is certified, they will be subject to 31% Federal tax
withholding.
INSTITUTIONAL ACCOUNTS. Bank trust departments and other institutional
accounts may place orders directly with the Fund by telephone at (800) 99-IBJFD.
MINIMUM PURCHASE REQUIREMENTS
The minimum initial investment in the Funds is $1,000 unless the
investor is a purchaser who at the time of purchase, has a balance of $1,000 or
more in any of the IBJ Funds, is a purchaser through a trust investment manager
or account manager or is administered by the Adviser, is an employee or an
ex-employee of IBJS or is an employee of any of its affiliates, Furman Selz LLC,
or any other service provider, or is an employee of any trust customer of IBJS
or any of its affiliates. Note that the minimum is $250 for an IRA, other than
an IRA for which IBJS or any of its affiliates acts as trustee or custodian. Any
subsequent investments must be at least $50, including an IRA investment. All
initial investments should be accompanied by a completed Purchase Application. A
Purchase Application accompanies this Prospectus. Different minimums apply, and
a separate application is required for IRA investments. The Funds reserve the
right to reject purchase orders.
INDIVIDUAL RETIREMENT ACCOUNTS
All Funds may be used as a funding medium for IRAs. Shares may also be
purchased for IRAs established with IBJS or any of its affiliates or other
authorized custodians. Completion of a special application is required in order
to create such an account, and the minimum initial investment for an IRA is
$250, other than an IRA for which IBJS or any of its affiliates acts as trustee
or custodian. Contributions to IRAs are subject to prevailing amount limits set
by the Internal Revenue Service. A $7.50 establishment fee and an annual $15
maintenance and custody fee is payable with respect to each IRA, and there will
be a $12 termination fee when the account is closed. For more information and
IRA information, call the Fund at (800) 99-IBJFD.
EXCHANGE OF FUND SHARES
The Funds offer two convenient ways to exchange shares in one Fund for
shares in another Fund in the Trust. Before engaging in an exchange transaction,
a shareholder should read carefully the Prospectus describing the Fund into
which the exchange will occur, which is available without charge and can be
obtained by writing to the Fund at 237 Park Avenue, New York, New York 10017, or
by calling (800) 99-IBJFD. A shareholder may not exchange shares of one Fund for
shares of another Fund if the new Fund is not qualified for sale in the state of
the shareholder's residence. The minimum amount for an initial exchange is $500.
No minimum is required in subsequent exchanges. The Trust may terminate or amend
the terms of the exchange privilege at any time.
A new account opened by exchange must be established with the same
name(s), address and social security number as the existing account. All
exchanges will be made based on the net asset value next determined following
receipt of the request by a Fund in good order, plus any applicable sales
charge.
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An exchange is taxable as a sale of a security on which a gain or loss
may be recognized. Shareholders should receive written confirmation of the
exchange within a few days of the completion of the transaction. Shareholders
will receive at least 60 days' prior written notice of any modification or
termination of the exchange privilege.
EXCHANGE BY MAIL. To exchange Fund shares by mail, simply send a letter
of instruction to Furman Selz. The letter of instruction must include: (i) your
account number; (ii) the Fund from and the Fund into which you wish to exchange
your investment; (iii) the dollar or share amount you wish to exchange; and (iv)
the signatures of all registered owners or authorized parties. All signatures
must be guaranteed by an eligible guarantor institution including a member of a
national securities exchange or by a commercial bank or trust company, broker
dealers, credit unions and savings associations.
EXCHANGE BY TELEPHONE. To exchange Fund shares by telephone or if you
have any questions simply call the Funds at (800) 99-IBJFD. You should be
prepared to give the telephone representative the following information: (i)
your account number, social security or tax identification number and account
registration; (ii) the name of the Fund from and the Fund into which you wish to
transfer your investment; and (iii) the dollar or share amount you wish to
exchange. The conversation may be recorded to protect you and the Funds.
Telephone exchanges are available only if the shareholder so indicates by
checking the "yes" box on the Purchase Application. See "Redemption of Fund
Shares--By Telephone" in this Prospectus for a discussion of telephone
transactions generally.
AUTOMATIC INVESTMENT PROGRAM. An eligible shareholder may also
participate in the Automatic Investment Program, an investment plan that
automatically debits money from the shareholder's bank account and invests it in
one or more of the Funds in the Trust through the use of electronic funds
transfers or automatic bank drafts. Shareholders may elect to make subsequent
investments by transfers of a minimum of $500 on either the fifth or twentieth
day of each month into their established Fund account. Contact the Funds for
more information about the Automatic Investment Program.
REDEMPTION OF FUND SHARES
Shareholders may redeem their shares, in whole or in part, on any
business day. Shares will be redeemed at the net asset value next determined
after a redemption request in good order has been received by the applicable
Fund. See "Determination of Net Asset Value" in the SAI. A redemption is a
taxable transaction on which gain or loss may be recognized. Generally, however,
gain or loss is not expected to be realized on a redemption of shares of the
Money Market Funds, both of which seek to maintain a net asset value per share
of $1.00.
Where the shares to be redeemed have been purchased by check, the
redemption request will be returned if the purchasing check has not cleared,
which may take up to 15 days. Shareholders may avoid this delay by investing
through wire transfers of Federal funds. During the period prior to the time the
shares are redeemed, dividends on the shares will continue to accrue and be
payable and the shareholder will be entitled to exercise all other beneficial
rights of ownership.
Once the shares are redeemed, a Fund will ordinarily send the proceeds
by check to the shareholder at the address of record on the next business day.
The Funds may, however, take up to seven days to make payment. This will not be
the customary practice. Also, if the New York Stock Exchange is closed (or when
trading is restricted) for any reason other than the customary weekend or
holiday closing or if an emergency condition as determined by the SEC merits
such action, the Funds may suspend redemptions or postpone payment dates.
REDEMPTION METHODS. To ensure acceptance of your redemption request, it
is important to follow the procedures described below. Although the Funds have
no present intention to do so, the Funds reserve the right to refuse or to limit
the frequency of any telephone or wire redemptions. Of course, it may be
difficult to place orders by telephone during periods of severe market or
economic change, and a shareholder should consider alternative methods of
communications, such as couriers. The Funds' services and their provisions may
be modified or terminated at any time by the Funds. If the Funds terminate any
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particular service, they will do so only after giving written notice to
shareholders. Redemption by mail will always be available to shareholders.
You may redeem your shares using any of the following methods:
THROUGH AN IBJS REPRESENTATIVE, OR AUTHORIZED INVESTMENT ADVISER. You
may redeem your shares by contacting your IBJS representative or investment
adviser and instructing him or her to redeem your shares. He or she will then
contact the Fund and place a redemption trade on your behalf. He or she may
charge you a fee for this service.
BY MAIL. You may redeem your shares by sending a letter directly to the
Fund. To be accepted, a letter requesting redemption must include: (i) the Fund
name and account registration from which you are redeeming shares; (ii) your
account number; (iii) the amount to be redeemed, (iv) the signatures of all
registered owners; and (v) a signature guarantee by any eligible guarantor
institution including a member of a national securities exchange or a commercial
bank or trust company, broker-dealers, credit unions and savings associations.
Corporations, partnerships, trusts or other legal entities will be required to
submit additional documentation.
BY CHECK: You may redeem your Reserve Money Market Fund shares by
drawing checks on your account. You must first complete the signature card
provided with the purchase application. Upon receiving the properly completed
application and signature card, the Administrator will provide you with checks
drawn on Investors Fiduciary Trust Company free of charge. These checks may be
made payable to the order of any person in the amount of $500 or more. When a
check is presented to Investors Fiduciary Trust Co. for payment, a sufficient
number of full and fractional shares in the shareholder's account will be
redeemed to cover the amount of the check. It is not possible to use a check to
close out your account since additional shares accrue daily.
BY TELEPHONE. You may redeem your shares by calling the Funds toll free
at (800) 99 IBJFD. You should be prepared to give the telephone representative
the following information: (i) your account number, social security number and
account registration; (ii) the Fund name from which you are redeeming shares;
and (iii) the amount to be redeemed. The conversation may be recorded to protect
you and the Funds. Telephone redemptions are available only if the shareholder
so indicates by checking the "yes" box on the Purchase Application or on the
Optional Services Form. The Funds employ reasonable procedures to confirm that
instructions communicated by telephone are genuine. If the Funds fail to employ
such reasonable procedures, they may be liable for any loss, damage or expense
arising out of any telephone transactions purporting to be on a shareholder's
behalf. In order to assure the accuracy of instructions received by telephone,
the Funds require some form of personal identification prior to acting upon
instructions received by telephone, record telephone instructions and provide
written confirmation to investors of such transactions. Redemption requests
transmitted via facsimile will not be accepted.
BY WIRE. You may redeem your shares by contacting the Funds by mail or
telephone and instructing them to send a wire transmission to your personal
bank. Proceeds of wire redemption for the Money Market Fund generally will be
transferred to the designated account on the day the request is received,
provided that it is received by 12:00 Noon (Eastern time).
Your instructions should include: (i) your account number, social
security or tax identification number and account registration; (ii) the Fund
name from which you are redeeming shares; and (iii) the amount to be redeemed.
Wire redemptions can be made only if the "yes" box has been checked on your
Purchase Application, and attach a copy of a void check of account where
proceeds are to be wired. Your bank may charge you a fee for receiving a wire
payment on your behalf.
The above mentioned services "By Telephone," "By Check" and "By Wire"
are not available for IRAs and trust relationships of IBJS.
SYSTEMATIC WITHDRAWAL PLAN. An owner of $10,000 or more of shares of a
Fund may elect to have periodic redemptions from his or her account to be paid
on a monthly, quarterly, semi annual or annual basis. The minimum periodic
payment is $100. A sufficient number of shares to make the scheduled redemption
will normally be redeemed on the date selected by the shareholder. Depending on
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the size of the payment requested and fluctuation in the net asset value, if
any, of the shares redeemed, redemptions for the purpose of making such payments
may reduce or even exhaust the account. A shareholder may request that these
payments be sent to a predesignated bank or other designated party. Capital
gains and dividend distributions paid to the account will automatically be
reinvested at net asset value on the distribution payment date.
REDEMPTION OF SMALL ACCOUNTS. Due to the disproportionately higher cost
of servicing small accounts, each Fund reserves the right to redeem, on not less
than 30 days' notice, an account in a Fund that has been reduced by a
shareholder to $500 or less. However, if during the 30 day notice period the
shareholder purchases sufficient shares to bring the value of the account above
$500, this restriction will not apply.
REDEMPTION IN KIND. All redemptions of shares of the Funds shall be
made in cash, except that the commitment to redeem shares in cash extends only
to redemption requests made by each shareholder of a Fund during any 90-day
period of up to the lesser of $250,000 or 1% of the net asset value of that Fund
at the beginning of such period. This commitment is irrevocable without the
prior approval of the SEC and is a fundamental policy of the Funds that may not
be changed without shareholder approval. In the case of redemption requests by
shareholders in excess of such amounts, the Board of Trustees reserves the right
to have the Funds make payment, in whole or in part, in securities or other
assets, in case of an emergency or any time a cash distribution would impair the
liquidity of a Fund to the detriment of the existing shareholders. In this
event, the securities would be valued in the same manner as the securities of
that Fund are valued. If the recipient were to sell such securities, he or she
could receive less than the redemption value of the securities and could incur
certain transaction costs.
DIVIDENDS, DISTRIBUTIONS AND FEDERAL INCOME TAX
Each Fund is treated as a separate entity for Federal income taxes.
Each Fund has elected to be treated and intends to continue to qualify to be
treated as a regulated investment company pursuant to the provisions of
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). By
so qualifying and electing, each Fund generally will not be subject to Federal
income tax to the extent that it distributes investment company taxable income
and net capital gains in the manner required under the Code.
Each Fund intends to distribute to its shareholders substantially all
of its investment company taxable income (which includes, among other items,
dividends and interest and the excess, if any, of net short term capital gains
(generally including any net option premium income) over net long term capital
losses). The Reserve Money Market Fund and the Bond Fund will declare
distributions of such income daily and pay those dividends monthly; the Core
Equity Fund will pay distributions annually and the Growth and Income Fund will
pay dividends at least quarterly. Each Fund intends to distribute, at least
annually, substantially all realized net capital gain (the excess of net long
term capital gains over net short term capital losses). In determining amounts
of capital gains to be distributed, any capital loss carryovers from prior years
will be applied against capital gains.
Distributions will be paid in additional Fund shares based on the net
asset value at the close of business on the payment date of the distribution,
unless the shareholder elects in writing, not less than five full business days
prior to the record date, to receive such distributions in cash. Dividends
declared in, and attributable to, the preceding month will be paid within five
business days after the end of each month.
In the case of the Reserve Money Market Fund, shares purchased will
begin earning dividends on the day the purchase order is executed and shares
redeemed will earn dividends through the previous day. Net investment income for
a Saturday, Sunday or a holiday will be declared as a dividend on the previous
business day. In the case of the other Funds that declare daily dividends,
shares purchased will begin earning dividends on the day after the purchase
order is executed, and shares redeemed will earn dividends through the day the
redemption is executed.
Investors who redeem all or a portion of Fund shares prior to a
dividend payment date will be entitled to all dividends declared but unpaid on
those shares at the time of their redemption.
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Distributions of investment company taxable income (regardless of
whether derived from dividends, interest or short term capital gains) will be
taxable to shareholders as ordinary income. Distributions of net long term
capital gains designated by a Fund as capital gain dividends will be taxable as
long term capital gains, regardless of how long a shareholder has held his Fund
shares. Distributions are taxable in the same manner whether received in
additional shares or in cash.
Earnings of the Funds not distributed on a timely basis in accordance
with a calendar year distribution requirement are subject to a nondeductible 4%
excise tax. To prevent imposition of this tax, each Fund intends to comply with
this distribution requirement.
A distribution, including an "exempt interest dividend," will be
treated as paid on December 31 of the calendar year if it is declared by a Fund
during October, November, or December of that year to shareholders of record in
such a month and paid by a Fund during January of the following calendar year.
Such distributions will be treated as received by shareholders in the calendar
year in which the distributions are declared, rather than the calendar year in
which the distributions are received.
A Fund's distributions with respect to a given taxable year may exceed
the current and accumulated earnings and profits of that Fund available for
distribution. In that event, distributions in excess of such earnings and
profits would be characterized as a return of capital to shareholders for
Federal income tax purposes, thus reducing each shareholder's cost basis in his
Fund shares. Distributions in excess of a shareholder's cost basis in his shares
would be treated as a gain realized from a sale of such shares.
Any gain or loss realized by a shareholder upon the sale or other
disposition of shares of a Fund, or upon receipt of a distribution in complete
liquidation of a Fund, generally will be a capital gain or loss which will be
long term or short term, generally depending upon the shareholder's holding
period for the shares. A loss realized by a shareholder on a redemption, sale,
or exchange of shares of a Fund with respect to which capital gain dividends
have been paid will be characterized as a long term capital loss to the extent
of such capital gain dividends.
It is anticipated that a portion of the dividends paid by the Funds
will qualify for the dividends received deduction available to corporations.
The Funds may be required to withhold for Federal income tax ("backup
withholding") 31% of the distributions and the proceeds of redemptions payable
to shareholders who fail to provide a correct taxpayer identification number or
to make required certifications, or where a Fund or shareholder has been
notified by the Internal Revenue Service that the shareholder is subject to
backup withholding. Most corporate shareholders and certain other shareholders
specified in the Code are exempt from backup withholding. Backup withholding is
not an additional tax. Any amounts withheld may be credited against the
shareholder's U.S. Federal income tax liability.
Those Funds that may invest in securities of foreign issuers may be
subject to withholding and other similar income taxes imposed by a foreign
country. Each of these Funds intends to elect, if it is eligible to do so under
the Code, to "pass through" to its shareholders the amount of such foreign taxes
paid. If such an election is made by a Fund, each shareholder of that Fund would
be required to include in gross income the taxable dividends received and the
amount of pro rata share of those foreign taxes paid by the Fund. Each
shareholder would be entitled either to deduct (as an itemized deduction) his
pro rata share of the foreign taxes in computing his taxable income or to use it
(subject to limitations) as a foreign tax credit against his U.S. Federal income
tax liability. No deduction for foreign taxes may be claimed by a shareholder
who does not itemize deductions. Each shareholder will be notified within 60
days after the close of a Fund's taxable year whether the foreign taxes paid by
the Fund will "pass through" for that year.
Shareholders will be notified annually by the Trust as to the Federal
tax status of distributions made by the Fund(s) in which they invest. Depending
on the residence of the shareholder for tax purposes, distributions also may be
subject to state and local taxes, including withholding taxes. Foreign
shareholders may, for example, be subject to special withholding requirements.
Special tax treatment, including a penalty on certain pre-retirement
distributions, is accorded to accounts maintained as IRAs. Shareholders should
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consult their own tax advisers as to the Federal, state and local tax
consequences of ownership of shares of the Funds in their particular
circumstances.
INVESTMENT RESTRICTIONS
(ALL FUNDS, EXCEPT AS INDICATED)
(1) No Fund may invest more than 15% (10% with respect to the Reserve
Money Market Fund) of the aggregate value of its total assets in investments
which are illiquid, or not readily marketable (including repurchase agreements
having maturities of more than seven calendar days, time deposits having
maturities of more than seven calendar days, and securities of foreign issuers
that are not listed on a domestic or foreign securities exchange).
(2) No Fund may borrow money or pledge or mortgage its assets, except
that a Fund may borrow from banks up to 10% of the current value of its total
net assets for temporary or emergency purposes and those borrowings may be
secured by the pledge of not more than 15% of the current value of that Fund's
total net assets (but investments may not be purchased by a Fund while any such
borrowings exist).
(3) No Fund may make loans, except loans of portfolio securities and
except that a Fund may enter into repurchase agreements with respect to its
portfolio securities and may purchase the types of debt instruments described in
this Prospectus.
The foregoing investment restrictions and those described in the SAI as
fundamental are policies of each Fund which may be changed only when permitted
by law and approved by the holders of a majority of the applicable Fund's
outstanding voting securities as described herein under "Other
Information--Voting."
In addition, each Fund is a diversified fund. As such, each will not,
with respect to 75% of its total assets, invest more than 5% of its total assets
in the securities of any one issuer (except for U.S. Government securities) or
purchase more than 10% of the outstanding voting securities of any such issuer.
The Reserve Money Market Fund is subject to further diversification requirements
with respect to 100% of their assets. Also, each Fund will invest less than 25%
of its total assets in the securities of any one industry, excluding the Reserve
Money Market Fund which may invest more than 25% of its total assets in
instruments issued by the banking industry. For this purpose, U.S. Government
securities (and repurchase agreements related thereto) are not considered
securities of a single industry.
If a percentage restriction on investment policies or the investment or
use of assets set forth in this Prospectus are adhered to at the time a
transaction is effected, later changes in percentage resulting from changing
asset values will not be considered a violation.
RISKS OF INVESTING IN THE FUNDS
CERTAIN RISK CONSIDERATIONS
The Reserve Money Market Fund attempts to maintain a constant net asset
value of $1.00 per share, although there can be no assurance that the Fund will
always be able to do so. The Reserve Money Market Fund may not achieve as high a
level of current income as other funds that do not limit their investment to the
high quality securities in which the Reserve Money Market Fund invests.
The price per share of each of the other Funds will fluctuate with
changes in value of the investments held by the Fund. For example, the value of
a bond fund's shares will generally fluctuate inversely with the movements in
interest rates and a stock fund's shares will generally fluctuate as a result of
numerous factors, including but not limited to investors' expectations about the
economy and corporate earnings and interest rates. Shareholders of a Fund should
expect the value of their shares to fluctuate with changes in the value of the
securities owned by that Fund. Additionally, a Fund's investment in smaller
companies may involve greater risks than investments in large companies due to
such factors as limited product lines, markets and financial or managerial
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resources, and less frequently traded securities that may be subject to more
abrupt price movements than securities of larger companies.
There is, of course, no assurance that a Fund will achieve its
investment objective or be successful in preventing or minimizing the risk of
loss that is inherent in investing in particular types of investment products.
In order to attempt to minimize that risk, the Adviser monitors developments in
the economy, the securities markets, and with each particular issuer. Also, as
noted earlier, each diversified Fund is managed within certain limitations that
restrict the amount of a Fund's investment in any single issuer.
While each of the portfolio managers for the Funds has significant
experience in managing registered investment company portfolios similar to the
Funds.
FOREIGN SECURITIES (ALL FUNDS). Investing in the securities of issuers
in any foreign country, including ADRs, involves special risks and
considerations not typically associated with investing in U.S. companies. These
include differences in accounting, auditing and financial reporting standards;
generally higher commission rates on foreign portfolio transactions; the
possibility of nationalization, expropriation or confiscatory taxation; adverse
changes in investment or exchange control regulations (which may include
suspension of the ability to transfer currency from a country); and political
instability which could affect U.S. investments in foreign countries.
Additionally, foreign securities and dividends and interest payable on those
securities may be subject to foreign taxes, including taxes withheld from
payments on those securities. Foreign securities often trade with less frequency
and volume than domestic securities and, therefore, may exhibit greater price
volatility. Additional costs associated with an investment in foreign securities
may include higher custodial fees than apply to domestic custodial arrangements
and transaction costs of foreign currency conversions. Changes in foreign
exchange rates also will affect the value of securities denominated or quoted in
currencies other than the U.S. dollar and, with respect to the Reserve Money
Market Fund, may affect the ability to maintain net asset value. A Fund's
objectives may be affected either unfavorably or favorably by fluctuations in
the relative rates of exchange between the currencies of different nations, by
exchange control regulations and by indigenous economic and political
developments. Through a Fund's flexible policies, management endeavors to avoid
unfavorable consequences and to take advantage of favorable developments in
particular nations where, from time to time, it places a Fund's investments.
OTHER INFORMATION
CAPITALIZATION
IBJ Funds Trust was organized as a Delaware business trust on August
25, 1994, and currently consists of four separately managed portfolios. The
Board of Trustees may establish additional portfolios in the future. The
capitalization of the Trust consists solely of an unlimited number of shares of
beneficial interest with a par value of $0.001 each. When issued, shares of the
Funds are fully paid, nonassessable and freely transferable.
Each Fund also offers a Premium Class of shares. The Service Class
shares are offered at net asset value without a sales load only to certain
institutional investors, or other investors who at the time of purchase have a
balance of $25,000 or more invested in any of the IBJ Funds, are purchasers
through a trust investment manager or account manager or administered by the
Adviser, are employees or ex-employees of IBJS or any of its affiliates, Furman
Selz LLC, or any other service provider, or employees of any trust customer of
IBJS or any of its affiliates. Shareholders in the Premium Class of shares may
be subject to an additional 12b-1 fee of up to 0.35% of average net assets and
an additional shareholder servicing charge of up to 0.50% of average net assets.
Under Delaware law, shareholders could, under certain circumstances, be
held personally liable for the obligations of the Trust. However, the
Declaration of Trust disclaims liability of the shareholders, Trustees or
officers of the Trust for acts or obligations of the Trust, which are binding
only on the assets and property of the Trust and requires that notice of the
disclaimer be given in each contract or obligation entered into or executed by
the Trust or the Trustees. The Declaration of Trust provides for indemnification
out of Trust property for all loss and expense of any shareholder held
23
<PAGE>
personally liable for the obligations of the Trust. The risk of a shareholder
incurring financial loss on account of shareholder liability is limited to
circumstances in which the Trust itself would be unable to meet its obligations
and should be considered remote.
VOTING
Shareholders have the right to vote in the election of Trustees and on
any and all matters on which, by law or under the provisions of the Declaration
of Trust, they may be entitled to vote. The Trust is not required to hold
regular annual meetings of the Funds' shareholders and does not intend to do so.
The Trustees are required to call a meeting for the purpose of considering the
removal of a person serving as Trustee if requested in writing to do so by the
holders of not less than 10% of the outstanding shares of the Trust and in
connection with such meeting to comply with the shareholders' communications
provisions of Section 16(c) of the Act. See "Other Information--Voting Rights"
in the SAI.
Shares entitle their holders to one vote per share (with proportionate
voting for fractional shares). As used in this Prospectus, the phrase "vote of a
majority of the outstanding shares" of a Fund (or the Trust) means the vote of
the lesser of: (1) 67% of the shares of a Fund (or the Trust) present at a
meeting if the holders of more than 50% of the outstanding shares are present in
person or by proxy; or (2) more than 50% of the outstanding shares of a Fund (or
the Trust).
PERFORMANCE INFORMATION
A Fund may, from time to time, include its yield and total return in
advertisements or reports to shareholders or prospective investors. Shareholders
of the Premium Class of shares will experience a lower net return on their
investment than shareholders of the Service Class of shares because of the
additional 12b-1 fees and shareholder servicing charge to which Premium Class
shareholders may be subject. The methods used to calculate the yield and total
return of the Funds is mandated by the SEC. Quotations of "yield" for a Fund
(other than the Reserve Money Market Fund) will be based on the investment
income per share during a particular 30 day (or one month) period (including
dividends and interest), less expenses accrued during the period ("net
investment income"), and will be computed by dividing net investment income by
the maximum public offering price per share on the last day of the period.
Quotations of "yield" for the Reserve Money Market Fund will be based
on the income received by a hypothetical investment (less a pro rata share of
Fund expenses) over a particular seven day period, which is then "annualized"
(i.e., assuming that the seven day yield would be received for 52 weeks, stated
in terms of an annual percentage return on the investment).
"Effective yield" for the Money Market Fund is calculated in a manner
similar to that used to calculate yield, but includes the compounding effect of
earnings on reinvested dividends.
Quotations of yield and effective yield reflect only a Fund's
performance during the particular period on which the calculations are based.
Yield and effective yield for a Fund will vary based on changes in market
conditions, the level of interest rates and the level of that Fund's expenses,
and no reported performance figure should be considered an indication of
performance which may be expected in the future.
Quotations of average annual total return for a Fund (other than the
Reserve Money Market Fund) will be expressed in terms of the average annual
compounded rate of return of a hypothetical investment in that Fund over periods
of 1, 5 and 10 years (up to the life of that Fund), reflect the deduction of a
proportional share of Fund expenses (on an annual basis), and assume that all
dividends and distributions are reinvested when paid.
Performance information for a Fund may be compared to various unmanaged
indices, such as those indices prepared by Lipper Analytical Services, Standard
& Poor's 500 Stock Index, the Dow Jones Industrial Average and other entities or
organizations which track the performance of investment companies. Any
performance information should be considered in light of the Fund's investment
24
<PAGE>
objectives and policies, characteristics and quality of the Funds and the market
conditions during the time period indicated, and should not be considered to be
representative of what may be achieved in the future. For a description of the
methods used to determine yield and total return for the Funds, see "Other
Information--Yield and Performance Information" in the SAI.
Each of the Funds is the successor to one or more collective investment
funds previously managed by IBJS. Investors in the collective investment funds
were invited to invest in the corresponding IBJS Fund at the inception of each
such Fund. Set forth below are certain performance data for the collective
investment funds for the past five years. The data shown below reflects total
return for the periods shown, reduced by the estimated expense ratio for each
corresponding IBJS Fund as indicated in the Fee Table in this Prospectus. This
performance information is deemed relevant since the collective investment funds
have been managed using the same investment objectives, policies and
restrictions and portfolio managers as those to be used by each corresponding
IBJ Fund. However, this performance data is not necessarily indicative of the
future performance of any of the Funds.
25
<PAGE>
IBJ COLLECTIVE INVESTMENT FUNDS
TOTAL RETURN FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
RESERVE GROWTH
MARKET CORE AND
MONEY BOND EQUITY INCOME
FUND FUND FUND FUND
<C> <C> <C> <C> <C>
1989................................................. 9.2% 10.7% 27.4% 17.7%
1990................................................. 9.4% 8.6% -1.2% 3.3%
1991................................................. 6.8% 17.4% 32.5% 22.4%
1992................................................. 4.9% 7.4% 10.4% 9.3%
1993................................................. 3.2% 9.1% 10.3% 8.9%
1994................................................. 3.4% -4.90% -2.7% -2.4%
Jan-95............................................... 0.3% 1.90% 2.7% 2.1%
5 Years (Annualized)
1990-1994................................... 5.5% 7.3% 9.2% 8.0%
</TABLE>
ACCOUNT SERVICES
All transactions in shares of the Funds will be reflected in a
statement for each shareholder. In those cases where a nominee is shareholder of
record of shares purchased for its customer, the Funds have been advised that
the statement may be transmitted to the customer at the discretion of the
nominee.
Furman Selz acts as the Funds' transfer agent. The Trust compensates
Furman Selz, the Trust's administrator, pursuant to a Services Agreement
described on page 14 of this Prospectus, for providing personnel and facilities
to perform dividend disbursing and transfer agency related services for the
Trust.
SHAREHOLDER INQUIRIES
All shareholder inquiries should be directed to Furman Selz Mutual
Funds Department, 237 Park Avenue, New York, New York 10017.
General and Account Information: (800) 99-IBJFD.
26
<PAGE>
APPENDIX
DESCRIPTION OF MOODY'S BOND RATINGS:
Excerpts from Moody's description of its four highest bond ratings are
listed as follows: Aaa--judged to be the best quality and they carry the
smallest degree of investment risk; Aa--judged to be of high quality by all
standards. Together with the Aaa group, they comprise what are generally known
as high grade bonds; A--possess many favorable investment attributes and are to
be considered as "upper medium grade obligations"; Baa--considered to be medium
grade obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Other Moody's bond descriptions
include: Ba--judged to have speculative elements, their future cannot be
considered as well assured; B--generally lack characteristics of the desirable
investment; Caa--are of poor standing. Such issues may be in default or there
may be present elements of danger with respect to principal or interest;
Ca--speculative in a high degree, often in default; C--lowest rated class of
bonds, regarded as having extremely poor prospects.
Moody's also supplies numerical indicators 1, 2 and 3 to rating
categories. The modifier 1 indicates that the security is in the higher end of
its rating category; the modifier 2 indicates a mid range ranking; and modifier
3 indicates a ranking toward the lower end of the category.
DESCRIPTION OF S&P'S BOND RATINGS:
Excerpts from S&P's description of its four highest bond ratings are
listed as follows: AAA--highest grade obligations, in which capacity to pay
interest and repay principal is extremely strong; AA--also qualify as high grade
obligations, having a very strong capacity to pay interest and repay principal,
and differs from AAA issues only in a small degree; A--regarded as upper medium
grade, having a strong capacity to pay interest and repay principal, although
they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories;
BBB--regarded as having an adequate capacity to pay interest and repay
principal. Whereas it normally exhibits adequate protection parameters, adverse
economic conditions or changing circumstances are more likely to lead to a
weakened capacity to pay interest and repay principal for debt in this category
than in higher rated categories. BB, B, CCC, CC--predominately speculative with
respect to capacity to pay interest and repay principal in accordance with terms
of the obligations; BB indicates the highest grade and CC the lowest within the
speculative rating categories.
S&P applies indicators "+, -," no character, and relative standing
within the major rating categories.
DESCRIPTION OF MOODY'S RATINGS OF NOTES AND VARIABLE RATE DEMAND INSTRUMENTS:
Moody's ratings for state and municipal short term obligations will be
designated Moody's Investment Grade or MIG. Such ratings recognize the
differences between short term credit and long-term risk. Short term ratings on
issues with demand features (variable rate demand obligations) are
differentiated by the use of the VMIG symbol to reflect such characteristics as
payment upon periodic demand rather than fixed maturity dates and payments
relying on external liquidity.
MIG 1/VMIG 1: This designation denotes best quality. There is present
strong protection by established cash flows, superior liquidity support or
demonstrated broad based access to the market for refinancing.
MIG 2/VMIG 2: This denotes high quality. Margins of protection are
ample although not as large as in the preceding group.
i
<PAGE>
IBJ FUNDS
Address for
TRUST CLIENTS OF IBJS
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
INVESTMENT ADVISER
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
ADMINISTRATOR AND SPONSOR
Furman Selz LLC
230 Park Avenue
New York, New York 10169
DISTRIBUTOR
IBJ Funds Distributor, Inc.
230 Park Avenue
New York, New York 10169
CUSTODIAN
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
COUNSEL
Baker & McKenzie
805 Third Avenue
New York, New York 10022
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
1301 Avenue of the Americas
New York, New York 10019
IBJ FUNDS TRUST
A FAMILY OF MUTUAL FUNDS
THE RESERVE MONEY MARKET FUND SEEKS TO PROVIDE INVESTORS WITH CURRENT INCOME,
LIQUIDITY AND THE MAINTENANCE OF A STABLE $1.00 NET ASSET VALUE BY INVESTING IN
HIGH QUALITY, SHORT-TERM OBLIGATIONS
THE BOND FUND SEEKS TO PROVIDE INVESTORS WITH A HIGH LEVEL OF TOTAL RETURN BY
INVESTING IN FIXED DEBT MARKET SECURITIES MANAGED FOR TOTAL RETURN
THE CORE EQUITY FUND SEEKS TO PROVIDE INVESTORS WITH
LONG-TERM CAPITAL APPRECIATION
THE GROWTH AND INCOME FUND SEEKS TO PROVIDE INVESTORS WITH LONG-TERM CAPITAL
APPRECIATION AND CURRENT INCOME FOR A HIGH TOTAL RETURN BY INVESTING IN A
BALANCE OF EQUITIES AND DEBT MARKET SECURITIES.
SERVICE CLASS PROSPECTUS
MARCH 27, 1996
Investment Adviser
IBJ SCHRODER BANK &
TRUST COMPANY
<PAGE>
IBJ FUNDS APPLICATION
Mail to: IBJ FUNDS
P.O. Box 4490
Grand Central Station
New York, NY 10163-4490
FOR ASSISTANCE IN COMPLETING THE APPLICATION CONTACT YOUR REPRESENTATIVE OR CALL
THE IBJ FUNDS AT 1-800-991IBJFD (800-994-2533).
PLEASE PRINT
- --------------------------------------------------------------------------------
1. FUND SELECTION - INITIAL INVESTMENT
Class of Shares: | | Institutional | | Class Service Class
IF NEITHER CLASS IS ELECTED, PURCHASE WILL DEFAULT TO SERVICE CLASS.
The Reserve Money Market Fund $ _________________________
The Core Equity Fund $ _________________________
The Bond Fund $ _________________________
The Growth & Income Fund $ _________________________
- --------------------------------------------------------------------------------
2. ACCOUNT REGISTRATION
| | Individual __________________________________________________________
FIRST M.I. LAST
| | Joint Tenant ________________________________________________________
FIRST M.I. LAST
| | If joint, check one:
| | With Right of Survivorship
| | Tenants in Common
| | Tenants by the Entireties
| | Uniform Gifts/Transfers to Minors Act ________________________________
CUSTODIAN'S NAME
Minor's Birthdate _______/_______/_______
as Custodian for_______________________________________ State of Residency
MINOR'S NAME
| | Corporation, Trust, Partnership, or Other Entity
____________________________________________________________
LEGAL ENTITY NAME
- ------------------------------------- -------------------------------------
Trustee's Name (for first trust only) Date of Trust (if applicable)
- --------------------------------------------------------------------------------
3. ACCOUNT ADDRESS
Street Address ______________________________________________________
Citizen of: | | U.S. | | Other Country____________________________
COUNTRY OF RESIDENCE
City/State/Zip_____________________ Daytime Telephone _______________________
- --------------------------------------------------------------------------------
4. SOCIAL SECURITY/TAX IDENTIFICATION NUMBER
______________________________ or ___________________________________
SOCIAL SECURITY NUMBER TAXPAYER IDENTIFICATION NUMBER
- --------------------------------------------------------------------------------
5. DISTRIBUTIONS
Dividends and capital gains will be reinvested unless otherwise indicated.
Dividends are to be: | | Reinvested | | Paid in Cash
| | Capital gains are to be: | | Reinvested | | Paid in Cash
- --------------------------------------------------------------------------------
6. DISTRIBUTIONS REINVESTED TO OTHER IBJ FUNDS
Permits all distributions from one Fund to be automatically reinvested into
another identically registered IBJ Fund. Transfer all distribution earned:
From Fund ______________________________ Account Number ______________________
To Fund _______________________________ Account Number ______________________
- --------------------------------------------------------------------------------
7. TELEPHONE EXCHANGES
If you want telephone exchange privileges, check here. | |
Fund exchanges: This authorizes exchanges between identically registered
accounts among all IBJ Funds upon instructions from shareholder or dealer of
record by telephone.
<PAGE>
- --------------------------------------------------------------------------------
IBJ FUNDS TRUST Check Writing Signature Card
Reserve Money Market Fund
Account Registration:
- --------------------------------------------------------------------------------
Name of Account
- --------------------------------------------------------------------------------
Address
- -------------------------------- ----------- ---------- ---------------------
Name State Zip Acct. # (IF EXISTING)
Authorized Signatures:
- ---------------------------------- --------------------------------------
Name Title
- ---------------------------------- --------------------------------------
Name Title
- ---------------------------------- --------------------------------------
Name Title
How many signatures on checks? | | 1 | | 2 | | 3
(____) SUBJECT TO CONDITIONS ON REVERSE SIDE
iv
<PAGE>
8. TELEPHONE REDEMPTIONS
If you want telephone redemption privileges, check here. | |
I (we) authorize The IBJ Funds and its agents to act upon instructions, from
shareholder or dealer of record, received by telephone or letter, to have
amounts wired to my (our) bank account designated below OR mailed to the address
of record established for this account. I (we) ratify any such instructions. If
you will be utilizing the bank wiring option, please attach a voided check from
your bank account and complete the information below.
- --------------------------------------------------------------------------------
BANK NAME STREET CITY STATE ZIP CODE
- --------------------------------------------------------------------------------
ABA ROUTING NUMBER ACCOUNT NAME ACCOUNT NUMBER
- --------------------------------------------------------------------------------
9. SYSTEMATIC WITHDRAWAL PLAN
| | Yes | | No (minimum payment $100)
This is available to shareholders with an account of $10,000 or more.
Dollar amount of each payment $ _______________
Beginning ____________________________________
(MONTH)
Checks will be made payable to registered owner(s) and sent to the address of
record unless a third party or bank is indicated below.
Third Party Name __________________________________________
Address ___________________________________________________
City/State/Zip ____________________________________________
Account Name & Number _____________________________________
Payment will be made:
Monthly | | Quarterly | | Semi-Annually | | Annually
- --------------------------------------------------------------------------------
10. YOUR SIGNATURE & CERTIFICATION FOR THE IRS
Each of the undersigned has the authority and legal capacity to purchase mutual
fund shares, each is of legal age in their state and believes each investment is
suitable for themselves. Each of the undersigned has received and read the
Prospectus and agrees to its terms.
Certification - Under penalties of perjury,
I certify that:
(1) The number shown on this form is my correct taxpayer identification number
(or I am waiting for a number to be issued to me), and
(2) I am not subject to backup withholding because: (a) I am exempt from backup
withholding as a result of a failure to report all interest or dividends,
or (c) the IRS has notified me that I am no longer subject to backup
withholding.
Certification Instructions - You must cross out item (2) above if you have
been notified by the IRS that you are currently subject to backup
withholding because of underreporting interest or dividends on your tax
return.
(3) I understand that the Funds are not deposits or obligations of IBJ Trust or
any bank, are not government guaranteed or FDIC insured, and involve
investment risks including possible loss of principal.
- ------------------------ -------------------------- ----------------------
SIGNATURE SIGNATURE DATE
* IF JOINT ACCOUNT, ALL TENANTS MUST SIGN.
** IF CORPORATE ACCOUNT OR OTHER LEGAL ENTITY, AUTHORIZED PERSON MUST SIGN
IN CAPACITY.
- --------------------------------------------------------------------------------
11. BROKER/DEALER USE ONLY
We hereby submit this application for the purchase of the Fund(s) indicated in
accordance with the terms of our selling agreement with the Distributor, and
with the Prospectus for the Fund(s). We agree to notify the Distributor of any
purchases made under a Letter of Intent or Right of Accumulation.
Securities Dealer Name _________________________________________________________
Office Address_______________________________ Telephone Number _________________
_________________________________
Branch # ____________ Rep # ______________ Representative Name _______________
Authorized Signature, Securities Dealer_________________________________________
Title__________________________________________
- --------------------------------------------------------------------------------
THE PAYMENT OF FUNDS IS AUTHORIZED,
BY THE SIGNATURE(S) APPEARING ON REVERSE SIDE.
If this card is signed by more than one person, all checks will require all
signatures appearing on the reverse side unless a lesser number is indicated. If
no indication is given, all checks will require all signatures. Each signatory
guarantees the genuineness of the other's signature(s). Checks may not be for
less than $500 or such other minimum or maximum amounts as may from time to time
be established by the Fund(s) upon prior written notice to its shareholders.
Furman Selz is hereby appointed agent by the person(s) signing this card
(the "Depositor(s)"), and as agent, is authorized and directed to present checks
drawn on this checking account to the Fund(s) and Furman Selz, as transfer
agent, as requests to redeem shares of the Fund(s) registered in the name of the
Depositor(s) in the amounts of such checks. Furman Selz shall be liable for only
its own negligence.
<PAGE>
The Depositor(s) hereby authorize(s) the Fund(s) and Furman Selz, as
transfer agent, to honor redemption requests presented in the above manner by
Furman Selz. The Fund(s), as transfer agent, will not be liable and will be
indemnified by Depositor(s) for any loss, expense or cost arising out of check
redemptions. No redemption of shares purchased by check will be permitted
pursuant to this Check Writing Privilege until 15 days after these shares were
credited to the shareholder's account. Furman Selz has the right not to honor
checks in amounts exceeding the value of the Depositor(s) shareholder account at
the time the check is presented for payment.
Furman Selz reserves the right to change, modify or terminate this checking
account at any time upon notification mailed to the address of record of the
Depositor(s).
vi
<PAGE>
IBJ FUNDS Trust
237 Park Avenue
New York, New York 10017
- --------------------------------------------------------------------------------
General and Account Information: (800) 99-IBJFD
PREMIUM CLASS PROSPECTUS
IBJ SCHRODER BANK & TRUST COMPANY--Investment Adviser
("IBJS" or the "Adviser")
FURMAN SELZ LLC--Administrator and Sponsor ("Furman Selz")
IBJ FUNDS DISTRIBUTOR , INC.--Distributor
(the "Distributor")
- --------------------------------------------------------------------------------
This Prospectus describes four funds, a money market fund (the "Money Market
Fund") and three non money market funds (the "Non Money Market Funds")
(collectively, the "Funds"), all of which are managed by IBJS. The Funds and
their investment objectives are:
o The Reserve Money Market Fund seeks to provide investors with current
income, liquidity and the maintenance of a stable $1.00 net asset
value by investing in high quality, short-term obligations.
o The Bond Fund seeks to provide investors with a high level of total
return by investing in debt market securities.
o The Core Equity Fund seeks to provide investors with long-term capital
appreciation.
o The Growth and Income Fund seeks to provide investors with long-term
capital appreciation and current income for a high total return by
investing in a balance of equities and debt market securities.
This Prospectus describes only the "Premium Class" of each Fund. Each Fund also
offers a Service Class of shares, which only certain institutional and other
investors are qualified to purchase. Each Fund also offers a Premium Class of
shares. See "Other Information"--"Capitalization". The Funds are separate
investment funds of IBJ Funds Trust (the "Trust"), a Delaware business trust and
registered management investment company.
An investment in shares of the Trust is neither insured nor guaranteed by the
U.S. Government. There can be no assurance that the Reserve Money Market Fund
will be able to maintain a stable net asset value of $1.00 per share. Shares of
the Trust are not deposits or obligations of, or guaranteed or endorsed by,
IBJS, and are not federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other government agency, and may
involve investment risk, including the possible loss of principal.
This Prospectus sets forth concisely the information a prospective investor
should know before investing in any of the Funds and should be read and retained
for information about each Fund.
A Statement of Additional Information (the "SAI"), dated March 27, 1996,
containing additional and more detailed information about the Funds has been
filed with the Securities and Exchange Commission ("SEC") and is hereby
incorporated by reference into this Prospectus. It is available without charge
and can be obtained by writing or calling the Funds at the address and
information numbers printed above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
March 27, 1996.
<PAGE>
Table of Contents
Page
----
Highlights .......................................... 1
Fund Expenses........................................ 5
Fee Table............................................ 5
Financial Highlights ................................ 7
The Investment Policies and
Practices of the Funds............................ 8
Management of the Funds..............................13
Fund Share Valuation.................................16
Pricing and Purchase of Fund Shares..................17
Minimum Purchase Requirements........................18
Individual Retirement Accounts.......................18
Exchange of Fund Shares..............................18
Redemption of Fund Shares............................19
Dividends, Distributions and
Federal Income Tax...............................21
Investment Restrictions..............................22
Risks of Investing in the Funds .....................23
Other Information ...................................24
Appendix............................................. i
<PAGE>
HIGHLIGHTS
INVESTMENT OBJECTIVES AND POLICIES OF THE FUNDS
This Prospectus describes four funds, one money market fund and three
non-money market funds (collectively, the "Funds"), all of which are managed by
IBJS. Each Fund has a distinct investment objective and policies.
MONEY MARKET FUND:
RESERVE MONEY MARKET FUND. The investment objectives of the Reserve
Money Market Fund are current income, liquidity and the maintenance of a stable
$1.00 net asset value per share by investing in high quality, U.S.
dollar-denominated short-term obligations which are determined by the investment
adviser to present minimal credit risks.
The Reserve Money Market Fund may invest in obligations permitted to be
purchased under Rule 2a-7 of the Investment Company Act of 1940 (the "1940 Act")
including, but not limited to, (1) obligations issued or guaranteed by the U.S.
Government or its agencies or instrumentalities; (2) commercial paper, loan
participation interests, medium-term notes, asset-backed securities and other
promissory notes, including floating or variable rate obligations; (3) domestic,
Yankee dollar and Eurodollar certificates of deposit, time deposits, money
market accounts, bankers' acceptances, commercial paper, bearer deposit notes
and other promissory notes, including floating or variable rate obligations
issued by U.S. or foreign bank holding companies and their bank subsidiaries,
branches and agencies; and (4) repurchase agreements with respect to (1)--(3)
above. The Reserve Money Market Fund will invest only in issuers or instruments
that at the time of purchase (1) have received the highest short-term rating by
at least two Nationally Recognized Statistical Rating Organizations ("NRSROs")
such as "A-1" by Standard & Poor's Corporation ("S&P") and "P-1" by Moody's
Investors Service, Inc. ("Moody's"); (2) are single rated and have received the
highest short-term rating by a NRSRO (and provided the purchase is approved or
ratified by the Board of Trustees); or (3) are unrated, but are determined to be
of comparable quality by the Adviser pursuant to guidelines approved by the
Board and subject to ratification by the Board. The Reserve Money Market Fund
may also purchase securities on a "when-issued" basis and purchase or sell them
on a "forward commitment" basis.
The Reserve Money Market Fund may also invest in variable amount master
demand obligations which are unsecured demand notes that permit the indebtedness
thereunder to vary, and provide for periodic adjustments in the interest rate.
Because master demand obligations are direct lending arrangements between the
Reserve Money Market Fund and the issuer, they are not normally traded. There is
no secondary market for the notes; however, the period of time remaining until
payment of principal and accrued interest can be recovered under a variable
amount master demand obligation generally shall not exceed seven days. To the
extent this period is exceeded, the obligation in question would be considered
illiquid. Issuers of variable amount master demand obligations must satisfy the
same criteria as set forth for other promissory notes (e.g., commercial paper).
The Reserve Money Market Fund will invest in variable amount master demand
obligations only when such obligations are determined by the Adviser, pursuant
to guidelines established by the Board of Trustees, to be of comparable quality
to rated issuers or instruments eligible for investment by the Reserve Money
Market Fund. In determining weighted average dollar portfolio maturity, a
variable amount master demand obligation will be deemed to have a maturity equal
to the longer of the period of time remaining until the next readjustment of the
interest rate or the period of time remaining until the principal amount can be
recovered from the issuer on demand.
AMORTIZED COST METHOD OF VALUATION FOR THE MONEY MARKET FUND
Portfolio investments of the Money Market Fund are valued based on the
amortized cost valuation technique pursuant to Rule 2a-7 under the 1940 Act.
Obligations in which the Money Market Fund invests have remaining maturities of
397 days or less, although instruments subject to repurchase agreements and
certain variable and floating rate obligations may bear longer final maturities.
The weighted average dollar portfolio maturity of the Money Market Fund will not
<PAGE>
exceed 90 days. See "Determination of Net Asset Value" in the SAI for an
explanation of the amortized cost valuation method.
NON-MONEY MARKET FUNDS:
BOND FUND. The investment objective of the Bond Fund is to provide a
high total return (appreciation plus current income) by investing at least 65%
of its total assets in bonds such as U.S. Government securities, corporate
bonds, asset-backed securities (including mortgage-backed securities), savings
and loan and U.S. and foreign bank obligations, commercial paper, and related
repurchase agreements. A minimum of 65% of the portfolio will be invested in
securities rated "A" or better by a NRSRO, or if unrated, determined by the
Adviser to be of comparable quality. The Fund may also invest in convertible
securities, preferred stocks and debt of foreign governments or corporations.
Interest rate futures and/or options and options on interest rate futures may be
used to hedge the portfolio against reinvestment and interest rate risk when
deemed necessary. For purposes of this Fund, a "bond" is defined as a debt
instrument with a fixed interest rate. The Fund may hold cash reserves if it is
believed advisable for temporary defensive or emergency purposes. The Fund has
no limitation as to average maturity or maturity of individual securities.
Core Equity Fund. The objective of the Core Equity Fund is to seek
long-term capital appreciation through investment in a diversified portfolio of
common stock (and securities convertible into common stock) of publicly traded,
established companies. At least 65% of the Fund's total assets will consist of
common stocks of publicly traded U.S. companies, convertible securities,
preferred stocks of U.S. companies, equity securities of foreign companies if
those securities are traded "over-the-counter" typically through the NASDAQ
system, American Depository Receipts ("ADRs"), and warrants of U.S. companies.
Each stock that is purchased will be selected on the weight of available
evidence, including but not limited to: (1) the company's fundamental business
outlook and competitive position, (2) the valuation of the security relative to
its own historical norms, to the industry in which the company competes, and to
the market as a whole, and (3) the momentum of earnings growth expected to be
generated by the company. IBJS will seek to control performance risk in two
ways: (1) relative to the market, by diversifying investments across economic
sectors and amongst small-, medium-, and large-capitalization companies, and (2)
by increasing the level of money market reserves and/or employing hedging
vehicles (futures and/or options) when risks of a substantial stock market
correction have risen to levels where such action appears warranted. In
addition, assets may be held in debt securities (it is the Fund's current
intention to restrict these debt securities to those rated in the top three
quality categories by Moody's or S&P or determined to be of equivalent quality
by IBJS), cash or cash equivalents, U.S. Government securities, or
nonconvertible preferred stock. The Fund may invest up to 25% of its total
assets in investment grade debt obligations. Under normal market conditions, the
Fund will not hold more than 20% of its total assets in the form of cash or cash
equivalents at any given time except for temporary defensive purposes.
Growth and Income Fund. The objective of the Growth and Income Fund is
to provide investors with long-term capital appreciation and current income for
high total return by investing in a balance of equities and debt market
securities.
The debt market portion of the Fund will invest in fixed income
securities such as U.S. Government securities, corporate bonds, asset-backed
securities (including mortgage-backed securities), savings and loan and U.S. and
foreign bank obligations, commercial paper, and related repurchase agreements,
convertible securities, preferred stocks and debt of foreign governments or
corporations. A minimum of 65% of the debt market portion of the portfolio will
be invested in securities rated "A" or better by a NRSRO, or if unrated,
determined by the Adviser to be of comparable quality. Interest rate futures
and/or options and options on interest rate futures may be used to hedge the
portfolio against reinvestment and interest rate risk when deemed necessary. The
Fund has no limitation as to average maturity or maturity of individual
securities.
The equity portion of the Fund will invest in common stocks of publicly
traded U.S. companies, convertible securities, preferred stocks of U.S.
companies, securities of foreign companies if those securities are traded
"over-the-counter" typically through the NASDAQ system, American Depository
Receipts ("ADRs"), and warrants of U.S. companies. Each stock that is purchased
will be selected on the weight of available evidence, including but not limited
to: (1) the company's fundamental business outlook and competitive position, (2)
the valuation of the security relative to its own historical norms, to the
2
<PAGE>
industry in which the company competes, and to the market as a whole, and (3)
the momentum of earnings growth expected to be generated by the company. IBJS
will seek to control performance risk in two ways: (1) relative to the market,
by diversifying investments across economic sectors and amongst small-, medium-,
and large-capitalization companies, and (2) by increasing the level of money
market reserves and/or employing hedging vehicles (futures and/or options) when
risks of a substantial stock market correction have risen to levels where such
action appears warranted.
The Fund will generally invest 30-70% of its assets in equity
securities and the remaining 30-70% in debt market securities. The Fund will not
hold more than 20% of its total assets in the form of cash or cash equivalents
at any given time except for temporary defensive purposes.
SHORT-TERM TRADING FOR THE CORE EQUITY FUND AND GROWTH AND INCOME FUND
Under certain market conditions, both the Core Equity Fund and the
Growth and Income Fund may seek profits by short-term trading. The length of
time a Fund has held a particular security is not generally a consideration in
investment decisions. A change in the number of securities owned by a Fund is
known as "portfolio turnover". To the extent short-term trading strategies are
used, a Fund's portfolio turnover rate may be higher than that of other mutual
funds. Portfolio turnover generally involves some expense to a Fund, including
brokerage commissions or dealer mark-ups and other transaction costs on the sale
of securities and reinvestment in other securities. Such transactions may result
in realization of taxable capital gains.
RISKS OF INVESTING IN THE FUNDS
The Money Market Fund attempts to maintain the value of its shares at a
constant $1.00 share price, although there can be no assurance that the Money
Market Fund will always be able to do so. The Money Market Fund may not achieve
as high a level of current income as other funds that do not limit their
investments to the high quality securities
in which the Money Market Fund invests.
The price per share of the Non-Money Market Funds will fluctuate with
changes in value of the investments held by each Fund. Additionally, there can
be no assurance that a Fund will achieve its investment objective or be
successful in preventing or minimizing the risk of loss that is inherent in
investing in particular types of securities. Such risks include the sensitivity
of the cash flows and yields of separately traded interest and principal
components of obligations to the rate of principal payments (including
prepayments). With respect to mortgage-backed securities, risks include a
similar sensitivity to the rate of prepayments in that, although the value of
fixed-income securities generally increases during periods of falling interest
rates as a result of prepayments and other factors, this is not always the case
with respect to mortgage-backed securities. Asset-backed securities involve the
risk that such securities do not usually have the benefit of a complete security
interest in the related collateral. Positions in options, futures and options on
futures involve the risks that such options and futures may fail as hedging
techniques, that the loss from investing in futures transactions is potentially
unlimited and that closing transactions may not be effected where a secondary
liquid market does not exist. Further, investment in the securities of issuers
in any foreign country involves special risks and considerations not typically
associated with investing in U.S. issuers. Bonds involve the risk that their
price will decrease if interest rates increase.
MANAGEMENT OF THE FUNDS
IBJS acts as investment adviser to all of the Funds. For its services,
IBJS receives a fee from each Fund based upon each Fund's average daily net
assets. See "Fee Table" and "Management of the Funds" in this Prospectus.
Furman Selz acts as administrator and sponsor to the Funds. For its
services, Furman Selz receives a fee from the Funds based on each Fund's average
daily net assets. See "Management of the Funds" in this Prospectus.
3
<PAGE>
GUIDE TO INVESTING IN THE IBJ FAMILY OF FUNDS
PURCHASE ORDERS FOR THE MONEY MARKET FUND RECEIVED BY 12:00 NOON
EASTERN TIME WILL BECOME EFFECTIVE THAT DAY. PURCHASE ORDERS FOR ALL OTHER FUNDS
RECEIVED BY YOUR IBJS REPRESENTATIVE IN PROPER FORM PRIOR TO 4:15 P.M., EASTERN
TIME, AND TRANSMITTED TO THE DISTRIBUTOR PRIOR TO 5:00 P.M. EASTERN TIME, WILL
BECOME EFFECTIVE THAT DAY.
o Minimum Initial Investment.....................$1,000
o Minimum Initial Investment for IRAs............ $ 250
o Minimum Subsequent Investment................... $ 50
The Funds are purchased at net asset value.
Shareholders may exchange shares between Funds in the Trust by
telephone or mail. Exchanges may not be effected by facsimile.
o Minimum initial exchange.......................$500
(minimum for subsequent exchanges)
Shareholders may redeem shares by telephone, mail or wire. Shares may
not be redeemed by facsimile.
o If a redemption request is received by 12:00 noon Eastern time,
proceeds for the Reserve Money Market Fund will be transferred to
a designated account that day.
o The Funds reserve the right to redeem upon not less than 30 days'
notice all shares in a Fund's account which have an aggregate
value of $500 or less.
(Redemption by telephone and wire is not available for IRAs and trust
relationships of IBJS.)
ALL DIVIDENDS AND DISTRIBUTIONS WILL BE AUTOMATICALLY PAID IN
ADDITIONAL SHARES AT NET ASSET VALUE OF THE APPLICABLE FUND UNLESS CASH PAYMENT
IS REQUESTED.
o Distributions for the Core Equity Fund are paid at least once
annually, distributions for the Growth and Income Fund are paid
quarterly and distributions for the other Funds are paid monthly.
4
<PAGE>
FUND EXPENSES
The following expense table lists the costs and expenses that an investor in the
Premium Class of shares will incur either directly or indirectly as a
shareholder of a Fund. The information is based upon expenses incurred during
the first year of operations ended November 30, 1995. Shareholders in the
Premium Class of Shares may be subject to an additional 12b-1 fee up to 0.35% of
average daily net assets and a shareholder servicing charge of up to 0.50% of
average daily net assets to which the Service Class Shareholders are not
subject.1 See "Other Information--Capitalization."
FEE TABLE
<TABLE>
<CAPTION>
Reserve Growth
Money Core and
Market Bond Equity Income
Fund Fund Fund Fund
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)................ None None None None
Maximum Sales Load Imposed on Reinvested
Dividends (as a percentage of offering price) ..... None None None None
Deferred Sales Load (as a percentage of
redemption proceeds) .............................. None None None None
Redemption Fees...................................... None None None None
Exchange Fees........................................ None None None None
Annual Fund Operating Expenses
(as a percentage of average net assets)
Management Fees2 (after waiver).................... 0.08% 0.40% 0.50% 0.50%
12b-1 Fees........................................... 0.35% 0.35% 0.35% 0.35%
Shareholder Servicing Fee.......................... 0.50% 0.50% 0.50% 0.50%
Other Expenses+...................................... 0.56% 0.72% 0.39% 0.55%
--------- --------- --------- ---------
Total Portfolio Operating Expenses2,3.............. 1.49% 1.97% 1.74% 1.90%
</TABLE>
- ---------------------
1 Service Class shares are offered only to certain institutional investors,
or other investors who at the time of purchase have a balance of $25,000 or
more invested in any of the IBJ Funds, are purchasers through a trust
investment manager or account manager or administered by the Adviser, are
employees or ex-employees of IBJS or any of its affiliates, Furman Selz
LLC, or any other service provider, or employees of any trust customer of
IBJS or any of its affiliates.
2 Reflects advisory fees net of fees waived as a result of a voluntary waiver
by the Adviser. Absent such waiver the Management Fees for the Reserve
Money Market Fund, the Bond Fund, the Core Equity Fund and the Growth and
Income Fund are 0.35%, 0.50%, 0.60% and 0.60%, respectively, and the Total
Portfolio Operating Expenses of the Reserve Money Market Fund, the Bond
Fund, the Core Equity Fund and the Growth and Income Fund are 1.76%, 2.07%,
1.84% and 2.00%, respectively.
3 Shareholders may be charged a wire redemption fee by their bank for
receiving a wire payment on their behalf.
+ Includes a $15 per account fee per year for transfer agency functions.
5
<PAGE>
The purpose of this table is to assist a shareholder in the Premium
Class of shares in understanding the various costs and expenses that an investor
in the Funds will bear.
Example:*
You would pay the following expenses on a $1,000 investment, assuming
(1) 5% gross annual return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
Reserve Growth
Money Core and
Market Bond Equity Income
Fund Fund Fund Fund
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
1 year............................................... $ 15 $ 20 $ 18 $ 19
3 years.............................................. $ 47 $ 62 $ 55 $ 60
5 years.............................................. $ 81 $ 106 $ 94 $ 103
10 years............................................. $ 178 $ 230 $ 205 $ 222
</TABLE>
- ------------------------
* This example should not be considered a representation of future expenses
which may be more or less than those shown. The assumed 5% annual return is
hypothetical and should not be considered a representation of past or
future annual return; actual return may be greater or less than the assumed
amount.
6
<PAGE>
FINANCIAL HIGHLIGHTS
The financial data shown below is to assist investors in evaluating the
performance of the Funds since February 1, 1995 (commencement of operations)
through November 30, 1995. The financial highlights for the period ended
November 30, 1995 have been audited by Coopers & Lybrand L.L.P., independent
accountants, whose report thereon appears in the Statement of Additional
Information (the "SAI"). Financial statements and related notes are included in
the SAI.
<TABLE>
<CAPTION>
RESERVE MONEY GROWTH AND
MARKET FUND BOND FUND CORE EQUITY FUND INCOME FUND
------------------- -------------------- --------------------- --------------------
PREMIUM PREMIUM PREMIUM PREMIUM
CLASS CLASS CLASS CLASS
-------- --------- ---------- --------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $1.00 $10.00 $10.00 $10.00
Income from Investment Operations:
Net investment income......... 0.04 0.48 0.13 0.27
Net realized and unrealized
gain/(loss) on investments 0.00 0.72 2.8 1.7
Total from Investment Operations 0.04 1.20 2.97 2.06
Less Distributions:
Dividends from net investment income (0.04) (0.48) 0.00 (0.28)
Net Asset Value, End of Period..... $1.00 $10.72 $12.97 $11.78
Total Return....................... 4.55% 12.28% 29.70% 20.72%
Net Assets, End of Period (in thousands) $13 $14 $16 $15
Ratios to average net assets of:
Net investment income......... 5.35%* 5.59%* 1.30%* 3.04%*
Expenses before waivers/reimbursements 0.92%* 1.22%* 0.99%* 1.14%*
Expenses net waivers/reimbursements 0.64%* 1.12%* 0.89%* 1.04%
Portfolio Turnover Rate............ N/A 297% 37% 78%
</TABLE>
- ---------------------------------
+ Per share amounts based on the average number of shares outstanding during the
period February 1, 1995 (Commencement of Operations) to November 30, 1995.
* Annualized.
7
<PAGE>
THE INVESTMENT POLICIES AND PRACTICES OF THE FUNDS
Each Fund is a separate investment fund or portfolio, commonly known as
a mutual fund. The Funds are portfolios of a Delaware business trust, IBJ Funds
Trust, organized under the laws of Delaware as an open end, management
investment company. The Trust's Board of Trustees oversees the overall
management of the Funds and elects the officers of the Trust.
o The investment objective of the Reserve Money Market Fund is to
provide investors with current income, liquidity and the maintenance
of a stable $1.00 net asset value by investing in high quality,
short-term obligations.
o The investment objective of the Bond Fund is to provide investors with
a high level of total return by investing in debt market securities .
o The investment objective of the Core Equity Fund is to provide
investors with long-term capital appreciation.
o The investment objective of the Growth and Income Fund is to provide
investors with long-term capital appreciation and current income for a
high total return by investing in a balance of equities and debt
market securities.
Each Fund follows its own investment objectives and policies, including
certain investment restrictions. The SAI contains specific investment
restrictions which govern the Funds' investments. Those restrictions and the
Funds' investment objectives are fundamental policies, which means that they may
not be changed without a majority vote of shareholders of the affected Fund.
Except for the objectives and those restrictions specifically identified as
fundamental, all other investment policies and practices described in this
Prospectus and in the SAI are not fundamental and may change solely with Board
of Trustees approval.
The Adviser selects investments and makes investment decisions based on
the investment objective and policies of each Fund. The following is a
description of securities and investment practices.
U.S. TREASURY OBLIGATIONS (ALL FUNDS). The Funds may invest in U.S.
Treasury obligations, which are backed by the full faith and credit of the
United States Government as to the timely payment of principal and interest.
U.S. Treasury obligations consist of bills, notes, and bonds and separately
traded interest and principal component parts of such obligations known as
STRIPS which generally differ in their interest rates and maturities. U.S.
Treasury bills, which have maturities of up to one year, notes, which have
original maturities ranging from one year to 10 years, and bonds, which have
original maturities of 10 to 30 years, are direct obligations of the United
States Government. The Funds may invest in privately placed U.S. Treasury
obligations.
U.S. GOVERNMENT SECURITIES (ALL FUNDS). U.S. Government securities are
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities. U.S. Government securities include debt securities issued or
guaranteed by U.S. Government-sponsored enterprises and federal agencies and
instrumentalities. Some types of U.S. Government securities are supported by the
full faith and credit of the United States Government or U.S. Treasury
guarantees, such as mortgage-backed certificates guaranteed by the Government
National Mortgage Association ("GNMA"). Other types of U.S. Government
securities, such as obligations of the Student Loan Marketing Association,
provide recourse only to the credit of the agency or instrumentality issuing the
obligation. In the case of obligations not backed by the full faith and credit
of the United States Government, the investor must look to the agency issuing or
guaranteeing the obligation for ultimate repayment. The Funds may invest in
privately placed U.S. Government Securities.
COMMERCIAL PAPER (ALL FUNDS). Commercial paper includes short-term
unsecured promissory notes, variable rate demand notes and variable rate master
demand notes issued by both domestic and foreign bank holding companies,
corporations and financial institutions and United States Government agencies
and instrumentalities (but only includes taxable securities). All commercial
8
<PAGE>
paper purchased by the Funds is, at the time of investment, rated in one of the
top two rating categories of at least one NRSRO, or if not rated is, in the
opinion of the Adviser, of an investment quality comparable to rated commercial
paper in which the Funds may invest, or, with respect to the Reserve Money
Market Fund, (i) rated "P-1" by Moody's and "A-1" or better by S&P or in a
comparable rating category by any two NRSROs that have rated the commercial
paper or (ii) rated in a comparable category by only one such organization if it
is the only organization that has rated the commercial paper (and provided the
purchase is approved or ratified by the Board of Trustees).
CORPORATE DEBT SECURITIES (ALL FUNDS). These Funds may purchase
corporate debt securities, subject to the rating and quality requirements
specified with respect to each Fund as set forth in "Highlights--Investment
Objectives and Policies" in this Prospectus. The Funds may invest in both rated
commercial paper and rated corporate debt obligations of foreign issuers that
meet the same quality criteria applicable to investments by the Funds in
commercial paper and corporate debt obligations of domestic issuers.
MORTGAGE-RELATED SECURITIES (ALL FUNDS). These Funds are permitted to
invest in mortgage-related securities, subject to the rating and quality
requirements specified for debt securities with respect to each such Fund in
"Highlights--Investment Objectives and Policies" in this Prospectus. Mortgage
pass-through securities are securities representing interests in "pools" of
mortgages in which payments of both interest and principal on the securities are
made monthly, in effect, "passing through" monthly payments made by the
individual borrowers on the mortgage loans which underlie the securities (net of
fees paid to the issuer or guarantor of the securities). Early repayment of
principal on mortgage pass-through securities (arising from prepayments of
principal due to sale of the underlying property, refinancing, or foreclosure,
net of fees and costs which may be incurred) may expose a Fund to a lower rate
of return upon reinvestment of principal. Also, if a security subject to
prepayment has been purchased at a premium, in the event of prepayment the value
of the premium would be lost. Like other fixed-income securities, when interest
rates rise, the value of mortgage-related securities generally will decline;
however, when interest rates decline, the value of mortgage-related securities
with prepayment features may not increase as much as other fixed-income
securities. In recognition of this prepayment risk to investors, the Public
Securities Association (the "PSA") has standardized the method of measuring the
rate of mortgage loan principal prepayments. The PSA formula, the Constant
Prepayment Rate or other similar models that are standard in the industry will
be used by the Funds in calculating maturity for purposes of investment in
mortgage-related securities.
Payment of principal and interest on some mortgage pass-through
securities (but not the market value of the securities themselves) may be
guaranteed by the full faith and credit of the U.S. Government (in the case of
securities guaranteed by GNMA) or guaranteed by agencies or instrumentalities of
the U.S. Government (in the case of securities guaranteed by the Federal
National Mortgage Association ("FNMA") or the Federal Home Loan Mortgage
Corporation ("FHLMC"), which are supported only by the discretionary authority
of the U.S. Government to purchase the agency's obligations). Mortgage
pass-through securities created by non-governmental issuers (such as commercial
banks, savings and loan institutions, private mortgage insurance companies,
mortgage bankers and other secondary market issuers) may be supported in various
forms of insurance or guarantees issued by governmental entities.
Collateralized Mortgage Obligations ("CMOs") are hybrid instruments
with characteristics and risks of both mortgage-backed bonds and mortgage
pass-through securities. Similar to a bond, interest and prepaid principal on a
CMO are paid, in most cases, semi-annually. CMOs may be collateralized by whole
mortgage loans but are more typically collateralized by portfolios of mortgage
pass-through securities guaranteed by GNMA, FHLMC or FNMA. CMOs are structured
in multiple classes, with each class bearing a different stated maturity or
interest rate. Certain CMOs have recently posed liquidity problems in changing
rate environments.
ASSET-BACKED SECURITIES (ALL FUNDS). These Funds are permitted to
invest in asset-backed securities, subject to the rating and quality
requirements for debt securities specified with respect to each such Fund in
"Highlights--Investment Objectives and Policies" in this Prospectus. Through the
use of trusts and special purpose subsidiaries, various types of assets,
primarily home equity loans and automobile and credit card receivables, are
being securitized in pass-through structures similar to the mortgage
pass-through structures described above. Consistent with the Funds' investment
9
<PAGE>
objectives, policies and quality standards, a Fund may invest in these and other
types of asset- backed securities which may be developed in the future.
Asset-backed securities involve certain risks that are not posed by
mortgage-related securities, resulting mainly from the fact that asset-backed
securities do not usually contain the benefit of a complete security interest in
the related collateral. For example, credit card receivables generally are
unsecured and the debtors are entitled to the protection of a number of state
and Federal consumer credit laws, some of which may reduce the ability of the
Fund, as an investor, to obtain full payment in the event of default or
insolvency. In the case of automobile receivables, due to various legal and
economic factors, proceeds from repossessed collateral may not always be
sufficient to support payments on these securities. The risks associated with
asset-backed securities are often reduced by the addition of credit enhancements
such as a letter of credit from a bank, excess collateral or a third-party
guarantee. With respect to asset-backed securities arising from secured debt
(such as automobile receivables), there is a risk that parties other than the
originator and servicer of the loan may acquire a security interest superior to
that of the securities holders.
COMMON STOCKS (BOND FUND, CORE EQUITY FUND AND GROWTH AND INCOME FUND).
Common stock represents the residual ownership interest in the issuer after all
of its obligations and preferred stocks are satisfied. Common stock fluctuates
in price in response to many factors, including historical and prospective
earnings of the issuer, the value of its assets, general economic conditions,
interest rates, investor perceptions and market volatility.
PREFERRED STOCKS (BOND FUND, CORE EQUITY FUND AND GROWTH AND INCOME
FUND). Preferred stock has a preference over common stock in liquidation and
generally in dividends as well, but is subordinated to the liabilities of the
issuer in all respects. Preferred stock may or may not be convertible into
common stock. As a general rule, the market value of preferred stock with a
fixed dividend rate and no conversion element varies inversely with interest
rates and perceived credit risk. Because preferred stock is junior to debt
securities and other obligations of the issuer, deterioration in the credit
quality of the issuer will cause greater changes in the value of a preferred
stock than in a more senior debt security with similar stated yield
characteristics.
AMERICAN DEPOSITORY RECEIPTS (BOND FUND, CORE EQUITY FUND AND GROWTH
AND INCOME FUND). American Depository Receipts ("ADRs") are U.S.
dollar-denominated receipts generally issued by domestic banks, which evidence
the deposit with the bank of a foreign issuer and which are publicly traded on
exchanges or over-the-counter in the United States.
These Funds may each invest in both sponsored and unsponsored ADR
programs. There are certain risks associated with investments in unsponsored ADR
programs. Because the non-U.S. company does not actively participate in the
creation of the ADR program, the underlying agreement for service and payment
will be between the depository and the shareholder. The Company issuing the
stock underlying the ADR pays nothing to establish the unsponsored facility, as
fees for ADR issuance and cancellation are paid by brokers. Investors directly
bear the expenses associated with certificate transfer, custody and dividend
payment.
In an unsponsored ADR program, there also may be several depositories
with no defined legal obligations to the non-U.S. company. The duplicate
depositories may lead to marketplace confusion because there would be no central
source of information to buyers, sellers and intermediaries. The efficiency of
centralization gained in a sponsored program can greatly reduce the delays in
delivery of dividends and annual reports. In addition, with respect to all ADRs
there is always the risk of loss due to currency fluctuations.
Investments in ADRs involve certain risks not typically involved in
purely domestic investments, including future foreign political and economic
developments, and the possible imposition of foreign governmental laws or
restrictions applicable to such investments. Securities of foreign issuers
through ADRs are subject to different economic, financial, political and social
factors. Individual foreign economies may differ favorably or unfavorably from
the U.S. economy in such respects as growth of gross national product, rate of
inflation, capital reinvestment, resources, self-sufficiency and balance of
payments position. With respect to certain countries, there is the possibility
of expropriation of assets, confiscatory taxation, political or social
instability or diplomatic developments which could adversely affect the value of
the particular ADR. There may be less publicly available information about a
foreign company than about a U.S. company, and foreign companies may not be
10
<PAGE>
subject to accounting, auditing and financial reporting standards and
requirements comparable to those of U.S. companies.
INVESTMENT IN FOREIGN SECURITIES (ALL FUNDS). These Funds may each
invest in securities of foreign governmental and private issuers. Investments in
foreign securities involve certain considerations that are not typically
associated with investing in domestic securities. There may be less publicly
available information about a foreign issuer than about a domestic issuer.
Foreign issuers also are not generally subject to uniform accounting, auditing
and financial reporting standards comparable to those applicable to domestic
issuers. In addition, with respect to certain foreign countries, interest may be
withheld at the source under foreign income tax laws, and there is a possibility
of expropriation or confiscatory taxation, political or social instability or
diplomatic developments that could adversely affect investments in securities of
issuers located in those countries.
CONVERTIBLE AND EXCHANGEABLE SECURITIES (BOND FUND, CORE EQUITY FUND
AND GROWTH AND INCOME FUND). These Funds are permitted to invest in convertible
and exchangeable securities, subject to the rating and quality requirements
specified with respect to equity securities for the Core Equity Fund in
"Highlights--Investment Objectives and Policies" in this Prospectus. Convertible
securities generally offer fixed interest or dividend yields and may be
converted either at a stated price or stated rate for common or preferred stock.
Exchangeable securities may be exchanged on specified terms for common or
preferred stock. 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 or exchange feature, the market
value of convertible or exchangeable securities tends to vary with fluctuations
in the market value of the underlying common or preferred stock. Debt securities
that are convertible into or exchangeable for preferred or common stock are
liabilities of the issuer but are generally subordinated to senior debt of the
issuer. The Funds may invest in convertible securities rated below investment
grade.
DOMESTIC AND FOREIGN BANK OBLIGATIONS (ALL FUNDS). These obligations
include but are not restricted to certificates of deposit, commercial paper,
Yankee certificates of deposit, bankers' acceptances, Eurodollar certificates of
deposit and time deposits, promissory notes and medium term deposit notes. The
Funds will not invest in any obligations of their affiliates, as defined under
the 1940 Act.
Each Fund limits its investment in United States bank obligations to
obligations of United States banks (including foreign branches). Each Fund
limits its investment in foreign bank obligations to United States
dollar-denominated obligations of foreign banks (including United States
branches of foreign banks) which in the opinion of the Adviser, are of an
investment quality comparable to obligations of United States banks which may be
purchased by the Funds. There is no limitation on the amount of the Funds'
assets which may be invested in obligations of foreign banks which meet the
conditions set forth herein.
Fixed time deposits may be withdrawn on demand by the investor, but may
be subject to early withdrawal penalties which vary depending upon market
conditions and the remaining maturity of the obligation. There are no
contractual restrictions on the right to transfer a beneficial interest in a
fixed time deposit to a third party, although there is no market for such
deposits. Investments in fixed time deposits subject to withdrawal penalties
maturing from two days through seven days may not exceed 15% of the value of the
total assets of the Non-Money Market Funds and 10% of the value of the total
assets of the Money Market Fund.
Obligations of foreign banks involve somewhat different investment
risks than those affecting obligations of United States banks, including the
possibilities that their liquidity could be impaired because of future political
and economic developments, that the obligations may be less marketable than
comparable obligations of United States banks, that a foreign jurisdiction might
impose withholding taxes on interest income payable on those obligations, that
foreign deposits may be seized or nationalized, that foreign governmental
restrictions such as exchange controls may be adopted which might adversely
affect the payment of principal and interest on those obligations and that the
selection of those obligations may be more difficult because there may be less
publicly available information concerning foreign banks or the accounting,
auditing and financial reporting standards, practices and requirements
applicable to foreign banks may differ from those applicable to United States
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banks. In that connection, foreign banks are not subject to examination by any
United States Government agency or instrumentality.
Investments in Eurodollar and Yankee dollar obligations involve
additional risks. Most notably, there generally is less publicly available
information about foreign companies; there may be less governmental regulation
and supervision; they may use different accounting and financial standards; and
the adoption of foreign governmental restrictions may adversely affect the
payment of principal and interest on foreign investments. In addition, not all
foreign branches of United States banks are supervised or examined by regulatory
authorities as are United States banks, and such branches may not be subject to
reserve requirements.
ZERO COUPON SECURITIES (ALL FUNDS). The Funds may invest in zero coupon
securities. A zero coupon security pays no interest to its holder during its
life and is sold at a discount to its face value at maturity. The market prices
of zero coupon securities generally are more volatile than the market prices of
securities that pay interest periodically and are more sensitive to changes in
interest rates than non-zero coupon securities having similar maturities and
credit qualities. Although zero coupon securities do not pay interest to holders
prior to maturity, federal income tax law requires a Fund to recognize as
interest income a portion of the security's discount each year and that this
income must then be distributed to shareholders along with other income earned
by the Fund. To the extent that any shareholders in a Fund elect to receive
their dividends in cash rather than reinvest such dividends in additional
shares, cash to make these distributions will have to be provided from the
assets of the Fund or other sources such as proceeds of sales of Fund shares
and/or sales of portfolio securities. In such cases, the Fund will not be able
to purchase additional income producing securities with cash used to make such
distributions and its current income may ultimately be reduced as a result.
VARIABLE RATE DEMAND OBLIGATIONS (ALL FUNDS). Variable rate demand
obligations have a maturity of 397 days or less with respect to the Money Market
Fund or five to twenty years with respect to the Non-Money Market Funds, but
carry with them the right of the holder to put the securities to a remarketing
agent or other entity on short notice, typically seven days or less. Generally,
the remarketing agent will adjust the interest rate every seven days (or at
other intervals corresponding to the notice period for the put), in order to
maintain the interest rate at the prevailing rate for securities with a
seven-day maturity. The remarketing agent is typically a financial intermediary
that has agreed to perform these services. Variable rate master demand
obligations permit a Fund to invest fluctuating amounts at varying rates of
interest pursuant to direct arrangements between the Funds, as lender, and the
borrower. Because the obligations are direct lending arrangements between the
Funds and the borrower, they will not generally be traded, and there is no
secondary market for them, although they are redeemable (and thus immediately
repayable by the borrower) at principal amount, plus accrued interest, at any
time. The borrower also may prepay up to the full amount of the obligation
without penalty. While master demand obligations, as such, are not typically
rated by credit rating agencies, if not so rated, a Fund may, under its minimum
rating standards, invest in them only if, in the opinion of the Adviser, they
are of an investment quality comparable to other debt obligations in which the
Funds may invest and are within the credit quality policies, guidelines and
procedures established by the Board of Trustees. See "Investment Policies" in
the SAI for further details on variable rate demand obligations and variable
rate master demand obligations.
OTHER MUTUAL FUNDS (ALL FUNDS). Each Fund may invest in shares of other
open-end, management investment companies, subject to the limitations of the
1940 Act and subject to such investments being consistent with the overall
objective and policies of the Fund making such investment, provided that any
such purchases will be limited to shares of unaffiliated investment companies.
The purchase of securities of other mutual funds results in duplication of
expenses such that investors indirectly bear a proportionate share of the
expenses of such mutual funds including operating costs, and investment advisory
and administrative fees.
"WHEN ISSUED" AND "FORWARD COMMITMENT" TRANSACTIONS (ALL FUNDS). The
Funds may purchase securities on a when issued and delayed delivery basis and
may purchase or sell securities on a forward commitment basis. When issued or
delayed delivery transactions arise when securities are purchased by a Fund with
payment and delivery taking place in the future in order to secure what is
considered to be an advantageous price and yield to the Fund at the time of
entering into the transaction. A forward commitment transaction is an agreement
by a Fund to purchase or sell securities at a specified future date. When a Fund
engages in these transactions, the Fund relies on the buyer or seller, as the
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case may be, to consummate the sale. Failure to do so may result in the Fund
missing the opportunity to obtain a price or yield considered to be
advantageous. When issued and delayed delivery transactions and forward
commitment transactions may be expected to occur a month or more before delivery
is due. However, no payment or delivery is made by a Fund until it receives
payment or delivery from the other party to the transaction. A separate account
containing only liquid assets such as cash, U.S. Government securities, or other
liquid high grade debt obligations equal to the value of purchase commitments
will be maintained with the Funds' custodian until payment is made.
LOANS OF PORTFOLIO SECURITIES (ALL FUNDS). To increase current income,
each Fund may lend its portfolio securities in an amount up to 331/3% of each
such Fund's total assets to brokers, dealers and financial institutions,
provided certain conditions are met, including the condition that each loan is
secured continuously by collateral maintained on a daily mark-to-market basis in
an amount at least equal to the current market value of the securities loaned.
For further information, see "Investment Policies" in the SAI.
REPURCHASE AGREEMENTS (ALL FUNDS). The Funds may enter into repurchase
agreements with any bank and broker-dealer which, in the opinion of the
Trustees, presents a minimum risk of bankruptcy. Under a repurchase agreement a
Fund acquires securities and obtains a simultaneous commitment from the seller
to repurchase the securities at a specified time and at an agreed upon yield.
The agreements will be fully collateralized and the value of the collateral,
including accrued interest, marked-to-market daily. The agreements may be
considered to be loans made by the purchaser, collateralized by the underlying
securities. If the seller should default on its obligation to repurchase the
securities, a Fund may experience a loss of income from the loaned securities
and a decrease in the value of any collateral, problems in exercising its rights
to the underlying securities and costs and time delays in connection with the
disposition of securities. The Money Market Fund may not invest more than 10%
and the Non-Money Market Funds may not invest more than
15% of its net assets in repurchase agreements maturing in more than seven
business days and in securities for which market quotations are not readily
available. For more information about repurchase agreements, see "Investment
Policies" in the SAI.
PORTFOLIO TURNOVER. The Funds generally will not engage in the trading
of securities for the purpose of realizing short-term profits, but each Fund
will adjust its portfolio as it deems advisable in view of prevailing or
anticipated market conditions or fluctuations in interest rates to accomplish
its respective investment objective. For example, each Fund may sell portfolio
securities in anticipation of an adverse market movement. Other than for tax
purposes, frequency of portfolio turnover will not be a limiting factor if a
Fund considers it advantageous to purchase or sell securities. The Funds do not
anticipate that the respective annual portfolio turnover rates will exceed the
following: Bond Fund, 350%; Core Equity Fund, 200%; Growth and Income Fund,
280%. A high rate of portfolio turnover involves correspondingly greater
transaction expenses than a lower rate, which expenses must be borne by each
Fund and its shareholders. High portfolio turnover rates may also make it more
difficult for the Funds to satisfy the requirement for qualification as a
regulated investment company under the Internal Revenue Code of 1986, as amended
(the "Code"), that less than 30% of each Fund's gross income in any tax year
be derived from gains on the sale of securities held for less than three months.
MANAGEMENT OF THE FUNDS
The business and affairs of each Fund are managed under the direction
of the Board of Trustees. Information about the Trustees, as well as the Trust's
executive officers, may be found in the SAI under the heading
"Management--Trustees and Officers.
THE Adviser: IBJ SCHRODER BANK & TRUST COMPANY
IBJ Schroder Bank & Trust Company ("IBJS") provides investment
advisory services to the Funds pursuant to an Advisory
Agreement with the Trust (the "Advisory Agreement"). Subject
to such policies as the Trust's Board of Trustees may
determine, IBJS makes investment decisions for the Funds. For
the advisory services it provides to the Funds, IBJS may
receive fees based on average daily net assets up to the
following annualized rates for the Funds: Reserve Money Market
Fund, 0.35%; Bond Fund, 0.50%; Core Equity Fund, 0.60%; and
Growth and Income Fund, 0.60%.
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Each of the portfolio managers listed below has significant
experience in managing registered investment company
portfolios similar to the Funds. Martin Liebgott, of IBJS, is
responsible for the day-to-day management of the Reserve Money
Market Fund, the Bond Fund and the debt market securities
portion of the Growth and Income Fund's portfolio. Mr.
Liebgott has been with IBJS since 1988 and was previously with
Citibank, N.A. from 1966 to 1988. Christian Kaefer, Senior
Investment Officer of IBJS, is responsible for the day-to-day
management of the portfolios of the Core Equity Fund and the
equity portion of the Growth and Income Fund. Mr. Kaefer has
been with IBJS since 1987 and was previously with Schroder
Capital Management International from 1982 to 1987.
Charles Porten, Chief Investment Officer of IBJS oversees
the ^Funds' investments. Mr. Porten does not manage any
particular portfolio but exercises general supervisory
authority over all portfolio managers. Mr. Porten has been
with IBJS since 1988 and was previously with Citibank, N.A.
from 1978 to 1988.
IBJS, formed in 1929, provides banking, trust and investment
services to individuals and institutions. It is 98.3% owned by
The Industrial Bank of Japan, Limited (and 1.7% owned by
Schroders Incorporated). IBJS acts as the investment adviser
to a wide variety of trusts, individuals, institutions and
corporations. Its investment management responsibilities, as
of December 31, 1995, included accounts with aggregate assets
of approximately $1.5 billion. The principal business address
of IBJS is One State Street, New York, New York 10004. As of
June 24, 1985, The Industrial Bank of Japan, Limited acquired
its interest in J. Henry Schroder Bank & Trust Company from
Schroders Incorporated. The name of the bank was changed from
J. Henry Schroder Bank & Trust Company to IBJ Schroder Bank &
Trust Company, effective January 1, 1987. The Industrial Bank
of Japan does not perform services for the Trust or any of
the Funds.
Based upon the advice of counsel, IBJS believes that the performance of
investment advisory services for the Funds will not violate the Glass Steagall
Act or other applicable banking laws or regulations. However, future statutory
or regulatory changes, as well as future judicial or administrative decisions
and interpretations of present and future statutes and regulations, could
prevent IBJS from continuing to perform such services for the Funds. If IBJS
were prohibited from acting as investment adviser to the Funds, it is expected
that the Board of Trustees would recommend to shareholders approval of a new
investment advisory agreement with another qualified investment adviser selected
by the Board or that the Board would recommend other appropriate action.
THE SPONSOR AND DISTRIBUTOR
Furman Selz LLC, 230 Park Avenue, New York, New York 10169, acts as
Sponsor of the Funds. Furman Selz is primarily an institutional brokerage firm
with membership on the New York, American, Boston, Midwest, Pacific and
Philadelphia Stock Exchanges. Furman Selz also serves as administrator and
distributor of other mutual funds. IBJ Funds Distributor, Inc., an affiliate of
Furman Selz LLC, acts as Distributor of the Funds.
The Funds have adopted a Rule 12b-1 Distribution Plan and Agreement
(the "Plan") pursuant to which the Premium Class of each Fund may reimburse the
Distributor on a monthly basis for costs and expenses of the Distribution in
connection with the distribution and marketing of Premium Class shares. These
costs and expenses, which are subject to a maximum limit of 0.35% per annum of
the average daily net assets of the Funds include (i) advertising by radio,
television, newspapers, magazines, brochures, sales literature, direct mail or
any other form of advertising, (ii) expenses of sales employees or agents of the
Distributor, including salary, commissions, travel and related expenses, (iii)
payments to broker-dealers and financial institutions for services in connection
with the distribution of shares, including promotional incentives and fees
calculated with reference to the average daily net asset value of shares held by
shareholders who have a brokerage or other service relationship with the
broker-dealer or other institution receiving such fees, (iv) costs of printing
prospectuses, statements of additional information and other materials to be
given or sent to prospective investors, (v) such other similar services as the
Trustees determine to be reasonably calculated to result in the sale of shares
of the Funds, (vi) costs of shareholder servicing which may be incurred by
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broker-dealers, banks or other financial institutions, and (vii) other direct
and indirect distribution-related expenses, including the provision of services
with respect to maintaining the assets of the Funds. As noted above, each Fund
also offers "Service Class" of shares. The "Service Classes" are not subject to
any Rule 12b-1 fees or entitled to benefits under a Distribution Plan. Each
Fund's Premium Class will pay all costs and expenses in connection with the
preparation, printing and distribution of its Prospectus to current shareholders
and the operation of its Plan, including related legal and accounting fees. No
Premium Class will be liable for distribution expenditures made by the
Distributor in any given year in excess of the maximum amount payable under the
Plan for that Fund year.
ADMINISTRATIVE SERVICES
The Funds have also entered into an Administrative Services Contract
with Furman Selz pursuant to which Furman Selz provides certain management and
administrative services necessary for the Funds' operations including: (i)
general supervision of the operation of the Funds including coordination of the
services performed by the Funds' Advisers, transfer agent, custodian,
independent accountants and legal counsel, regulatory compliance, including the
compilation of information for documents such as reports to, and filings with,
the SEC and state securities commissions, and preparation of proxy statements
and shareholder reports for the Funds; (ii) general supervision relative to the
compilation of data required for the preparation of periodic reports distributed
to the Funds' Officers and Board of Trustees; and (iii) furnishing office space
and certain facilities required for conducting the business of the Funds. For
these services, Furman Selz receives from each Fund a fee, payable monthly, at
the annual rate of 0.15% of each Fund's average daily net assets. Pursuant to a
Services Agreement between the Trust and the Administrator, Furman Selz assists
the Trust with certain transfer and dividend disbursing agent functions and
receives a fee of $15 per account per year plus out of pocket expenses.
Pursuant to a Fund Accounting Agreement between the Trust and the Administrator,
the Administrator assists the Trust in calculating net asset values and provides
certain other accounting services for each Fund described therein, for an annual
fee of $30,000 per Fund plus out of pocket expenses.
SERVICE ORGANIZATIONS
Various banks, trust companies, broker-dealers (other than the Sponsor)
or other financial organizations (collectively, "Service Organizations") also
may provide administrative services for the Funds, such as maintaining
shareholder accounts and records. The Funds may pay fees to Service
Organizations (which vary depending upon the services provided) in amounts up to
an annual rate of 0.50% of the daily net asset value of the Funds' shares owned
by shareholders with whom the Service Organization has a servicing relationship.
The Glass-Steagall Act and other applicable laws provide that, among
other things, banks may not engage in the business of underwriting, selling or
distributing securities. There is currently no precedent prohibiting banks from
performing administrative and shareholder servicing functions as Service
Organizations. However, judicial or administrative decisions or interpretations
of such laws, as well as changes in either Federal or state regulations relating
to the permissible activities of banks and their subsidiaries or affiliates,
could prevent a bank Service Organization from continuing to perform all or a
part of its servicing activities. If a bank were prohibited from so acting, its
shareholder clients would be permitted to remain shareholders of the Funds and
alternative means for continuing the servicing of such shareholders would be
sought. It is not expected that shareholders would suffer any adverse financial
consequences as a result of any of these occurrences.
OTHER EXPENSES
Each Fund bears all costs of its operations other than expenses
specifically assumed by Furman Selz or IBJS. The costs borne by the Funds
include legal and accounting expenses; Trustees' fees and expenses; insurance
premiums; custodian and transfer agent fees and expenses; expenses incurred in
acquiring or disposing of the Funds' portfolio securities; expenses of
registering and qualifying the Funds' shares for sale with the SEC and with
various state securities commissions; expenses of obtaining quotations on the
Funds' portfolio securities and pricing of the Funds' shares; expenses of
maintaining the Funds' legal existence and of shareholders' meetings; and
expenses of preparation and distribution to existing shareholders of reports,
proxies and prospectuses. Each Fund bears its own expenses associated with its
establishment as a series of the Trust; these expenses are amortized over a five
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year period from the commencement of a Fund's operations. See "Management" in
the SAI. Trust expenses directly attributable to a Fund are charged to that
Fund; other expenses are allocated proportionately among all of the Funds in the
Trust in relation to the net assets of each Fund.
PORTFOLIO TRANSACTIONS
Pursuant to the applicable Advisory Agreement, the Adviser places
orders for the purchase and sale of portfolio investments for the Funds'
accounts with brokers or dealers selected by it in its discretion. In effecting
purchases and sales of portfolio securities for the account of the Funds, the
Adviser will seek the best available price and most favorable execution of the
Funds' orders. Trading does, however, involve transaction costs. Transactions
with dealers serving as primary market makers reflect the spread between the bid
and asked prices. Purchases of underwritten issues may be made, which will
include an underwriting fee paid to the underwriter. Purchases and sales of
securities are generally placed by the Adviser with broker dealers which, in the
Adviser's judgment, provide prompt and reliable execution at favorable security
prices and reasonable commission rates. The Adviser may cause a Fund to pay
commissions higher than another broker dealer would have charged if the Adviser
believes the commission paid is reasonable in relation to the value of the
brokerage and research services received by the Adviser. Broker dealers are
selected on the basis of a variety of factors such as reputation, capital
strength, size and difficulty of order, sale of Fund shares and research
provided to the Adviser.
FUND SHARE VALUATION
The net asset value per share of the Funds is calculated at 12:00 noon
(Eastern time) for the Money Market Fund and at 4:15 p.m. (Eastern time) for
each of the Non-Money Market Funds, Monday through Friday, on each day the New
York Stock Exchange is open for trading, which excludes the following business
holidays: New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day; and the
following additional business holidays for the Money Market Fund: Martin Luther
King's Birthday, Columbus Day and Veterans Day. The net asset value per share of
each Fund is computed by dividing the value of each Fund's net assets (i.e., the
value of the assets less the liabilities) by the total number of such Fund's
outstanding shares. All expenses, including fees paid to the Adviser and Furman
Selz, are accrued daily and taken into account for the purpose of determining
the net asset value.
Securities listed on an exchange are valued on the basis of the last
sale prior to the time the valuation is made. If there has been no sale since
the immediately previous valuation, then the current bid price is used.
Quotations are taken from the exchange where the security is primarily traded.
Portfolio securities which are primarily traded on foreign exchanges may be
valued with the assistance of a pricing service and are generally valued at the
preceding closing values of such securities on their respective exchanges,
except that when an occurrence subsequent to the time a foreign security is
valued is likely to have changed such value, then the fair value of those
securities will be determined by consideration of other factors by or under the
direction of the Board of Trustees. Over the counter securities are valued on
the basis of the bid price at the close of business on each business day.
Securities for which market quotations are not readily available are valued at
fair value as determined in good faith by or at the direction of the Board of
Trustees. Notwithstanding the above, bonds and other fixed income securities are
valued by using market quotations and may be valued on the basis of prices
provided by a pricing service approved by the Board of Trustees. All assets and
liabilities initially expressed in foreign currencies will be converted into
U.S. dollars at the mean between the bid and asked prices of such currencies
against U.S. dollars as last quoted by any major bank.
The Money Market Fund uses the amortized cost method to value its
portfolio securities and seeks to maintain a constant net asset value of $1.00
per share, although there may be circumstances under which this goal cannot be
achieved. The amortized cost method involves valuing a security at its cost and
amortizing any discount or premium over the period until maturity, regardless of
the impact of fluctuating interest rates on the market value of the security.
See the SAI for a more complete description of the amortized cost method.
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PRICING AND PURCHASE OF FUND SHARES
Orders for the purchase of shares will be executed at the net asset
value per share next determined after an order has been received.
The following purchase procedures do not apply to certain fund or trust
accounts that are managed by IBJS. The customer should consult his or her trust
administrator for proper instructions.
All funds received are invested in full and fractional shares of the
appropriate Fund. Certificates for shares are not issued. Furman Selz maintains
records of each shareholder's holdings of Fund shares, and each shareholder
receives a statement of transactions, holdings and dividends. The Funds reserve
the right to reject any purchase.
An investment may be made using any of the following methods:
THROUGH IBJS. Shares are available to new and existing shareholders
through IBJS or its affiliates or other authorized investment advisers. To make
an investment using this method, simply complete a Purchase Application and
contact your IBJS representative or investment adviser with instructions as to
the amount you wish to invest. They will then contact the Fund to place the
order on your behalf on that day.
Orders received by your IBJS representative for the Non-Money Market
Funds in proper order prior to the determination of net asset value and
transmitted to the Fund prior to the close of its business day (which is
currently 5:00 p.m., Eastern time), will become effective that day. Orders for
the Money Market Fund received prior to 12:00 noon Eastern time will become
effective that day. Parties who receive orders are obligated to transmit them
promptly. You should receive written confirmation of your order within a few
days of receipt of instructions from your representative.
BY WIRE. Investments may be made directly through the use of wire
transfers of Federal funds. Contact your bank and request it to wire Federal
funds to the applicable Fund. In most cases, your bank will either be a member
of the Federal Reserve Banking System or have a relationship with a bank that
is. Your bank may charge a fee for handling the transaction. To purchase shares
by a Federal funds wire, please first contact Furman Selz Mutual Funds Client
Services at (800) 99-IBJFD. They will establish a record of information for the
wire to insure the correct processing of funds. You can reach the Wire Desk at
(800) 99-IBJFD.
Then, have your bank wire funds using the following instructions:
Investors Fiduciary Trust Company
Kansas City, MO 64105
ABA #1010-0362-1
Account Number: 751-3003
Further Credit to: Fund Name
As long as you have read the Prospectus, you may establish a new
regular account through the Wire Desk; IRAs may not be opened in this way. When
new accounts are established by wire, the distribution options will be set to
reinvest and the social security or tax identification number ("TIN") will not
be certified until a signed application is received. Completed applications
should be forwarded immediately to the Fund. With the Purchase Application, the
shareholder can specify other distribution options and add any special features
offered by a Fund. Should any dividend distributions or redemptions be paid
before the TIN is certified, they will be subject to 31% Federal tax
withholding.
INSTITUTIONAL ACCOUNTS. Bank trust departments and other institutional
accounts may place orders directly with the Fund by telephone at (800) 99-IBJFD.
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MINIMUM PURCHASE REQUIREMENTS
The minimum initial investment in the Funds is $1,000 unless the
investor is a purchaser who at the time of purchase, has a balance of $1,000 or
more in any of the IBJ Funds, is a purchaser through a trust investment manager
or account manager or is administered by the Adviser, is an employee or an
ex-employee of IBJS or is an employee of any of its affiliates, Furman Selz LLC,
or any other service provider, or is an employee of any trust customer of IBJS
or any of its affiliates. Note that the minimum is $250 for an IRA, other than
an IRA for which IBJS or any of its affiliates acts as trustee or custodian. Any
subsequent investments must be at least $50, including an IRA investment. All
initial investments should be accompanied by a completed Purchase Application. A
Purchase Application accompanies this Prospectus. Different minimums apply, and
a separate application is required for IRA investments. The Funds reserve the
right to reject purchase orders.
INDIVIDUAL RETIREMENT ACCOUNTS
All Funds may be used as a funding medium for IRAs. Shares may also be
purchased for IRAs established with IBJS or any of its affiliates or other
authorized custodians. Completion of a special application is required in order
to create such an account, and the minimum initial investment for an IRA is
$250, other than an IRA for which IBJS or any of its affiliates acts as trustee
or custodian. Contributions to IRAs are subject to prevailing amount limits set
by the Internal Revenue Service. A $7.50 establishment fee and an annual $15
maintenance and custody fee is payable with respect to each IRA, and there will
be a $12 termination fee when the account is closed. For more information and
IRA information, call the Fund at (800) 99-IBJFD.
EXCHANGE OF FUND SHARES
The Funds offer two convenient ways to exchange shares in one Fund for
shares in another Fund in the Trust. Before engaging in an exchange transaction,
a shareholder should read carefully the Prospectus describing the Fund into
which the exchange will occur, which is available without charge and can be
obtained by writing to the Fund at 237 Park Avenue, New York, New York 10017, or
by calling (800) 99-IBJFD. A shareholder may not exchange shares of one Fund for
shares of another Fund if the new Fund is not qualified for sale in the state of
the shareholder's residence. The minimum amount for an initial exchange is $500.
No minimum is required in subsequent exchanges. The Trust may terminate or amend
the terms of the exchange privilege at any time.
A new account opened by exchange must be established with the same
name(s), address and social security number as the existing account. All
exchanges will be made based on the net asset value next determined following
receipt of the request by a Fund in good order, plus any applicable sales
charge.
An exchange is taxable as a sale of a security on which a gain or loss
may be recognized. Shareholders should receive written confirmation of the
exchange within a few days of the completion of the transaction. Shareholders
will receive at least 60 days' prior written notice of any modification or
termination of the exchange privilege.
EXCHANGE BY MAIL. To exchange Fund shares by mail, simply send a letter
of instruction to Furman Selz. The letter of instruction must include: (i) your
account number; (ii) the Fund from and the Fund into which you wish to exchange
your investment; (iii) the dollar or share amount you wish to exchange; and (iv)
the signatures of all registered owners or authorized parties. All signatures
must be guaranteed by an eligible guarantor institution including a member of a
national securities exchange or by a commercial bank or trust company, broker
dealers, credit unions and savings associations.
EXCHANGE BY TELEPHONE. To exchange Fund shares by telephone or if you
have any questions simply call the Funds at (800) 99-IBJFD. You should be
prepared to give the telephone representative the following information: (i)
your account number, social security or tax identification number and account
registration; (ii) the name of the Fund from and the Fund into which you wish to
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transfer your investment; and (iii) the dollar or share amount you wish to
exchange. The conversation may be recorded to protect you and the Funds.
Telephone exchanges are available only if the shareholder so indicates by
checking the "yes" box on the Purchase Application. See "Redemption of Fund
Shares--By Telephone" in this Prospectus for a discussion of telephone
transactions generally.
AUTOMATIC INVESTMENT PROGRAM. An eligible shareholder may also
participate in the Automatic Investment Program, an investment plan that
automatically debits money from the shareholder's bank account and invests it in
one or more of the Funds in the Trust through the use of electronic funds
transfers or automatic bank drafts. Shareholders may elect to make subsequent
investments by transfers of a minimum of $500 on either the fifth or twentieth
day of each month into their established Fund account. Contact the Funds for
more information about the Automatic Investment Program.
REDEMPTION OF FUND SHARES
Shareholders may redeem their shares, in whole or in part, on any
business day. Shares will be redeemed at the net asset value next determined
after a redemption request in good order has been received by the applicable
Fund. See "Determination of Net Asset Value" in the SAI. A redemption is a
taxable transaction on which gain or loss may be recognized. Generally, however,
gain or loss is not expected to be realized on a redemption of shares of the
Money Market Funds, both of which seek to maintain a net asset value per share
of $1.00.
Where the shares to be redeemed have been purchased by check, the
redemption request will be returned if the purchasing check has not cleared,
which may take up to 15 days. Shareholders may avoid this delay by investing
through wire transfers of Federal funds. During the period prior to the time the
shares are redeemed, dividends on the shares will continue to accrue and be
payable and the shareholder will be entitled to exercise all other beneficial
rights of ownership.
Once the shares are redeemed, a Fund will ordinarily send the proceeds
by check to the shareholder at the address of record on the next business day.
The Funds may, however, take up to seven days to make payment. This will not be
the customary practice. Also, if the New York Stock Exchange is closed (or when
trading is restricted) for any reason other than the customary weekend or
holiday closing or if an emergency condition as determined by the SEC merits
such action, the Funds may suspend redemptions or postpone payment dates.
REDEMPTION METHODS. To ensure acceptance of your redemption request, it
is important to follow the procedures described below. Although the Funds have
no present intention to do so, the Funds reserve the right to refuse or to limit
the frequency of any telephone or wire redemptions. Of course, it may be
difficult to place orders by telephone during periods of severe market or
economic change, and a shareholder should consider alternative methods of
communications, such as couriers. The Funds' services and their provisions may
be modified or terminated at any time by the Funds. If the Funds terminate any
particular service, they will do so only after giving written notice to
shareholders. Redemption by mail will always be available to shareholders.
You may redeem your shares using any of the following methods:
THROUGH AN IBJS REPRESENTATIVE, OR AUTHORIZED INVESTMENT ADVISER. You
may redeem your shares by contacting your IBJS representative or investment
adviser and instructing him or her to redeem your shares. He or she will then
contact the Fund and place a redemption trade on your behalf. He or she may
charge you a fee for this service.
BY MAIL. You may redeem your shares by sending a letter directly to the
Fund. To be accepted, a letter requesting redemption must include: (i) the Fund
name and account registration from which you are redeeming shares; (ii) your
account number; (iii) the amount to be redeemed, (iv) the signatures of all
registered owners; and (v) a signature guarantee by any eligible guarantor
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institution including a member of a national securities exchange or a commercial
bank or trust company, broker-dealers, credit unions and savings associations.
Corporations, partnerships, trusts or other legal entities will be required to
submit additional documentation.
BY CHECK: You may redeem your Reserve Money Market Fund shares by
drawing checks on your account. You must first complete the signature card
provided with the purchase application. Upon receiving the properly completed
application and signature card, the Administrator will provide you with checks
drawn on Investors Fiduciary Trust Company free of charge. These checks may be
made payable to the order of any person in the amount of $500 or more. When a
check is presented to Investors Fiduciary Trust Co. for payment, a sufficient
number of full and fractional shares in the shareholder's account will be
redeemed to cover the amount of the check. It is not possible to use a check to
close out your account since additional shares accrue daily.
BY TELEPHONE. You may redeem your shares by calling the Funds toll free
at (800) 99 IBJFD. You should be prepared to give the telephone representative
the following information: (i) your account number, social security number and
account registration; (ii) the Fund name from which you are redeeming shares;
and (iii) the amount to be redeemed. The conversation may be recorded to protect
you and the Funds. Telephone redemptions are available only if the shareholder
so indicates by checking the "yes" box on the Purchase Application or on the
Optional Services Form. The Funds employ reasonable procedures to confirm that
instructions communicated by telephone are genuine. If the Funds fail to employ
such reasonable procedures, they may be liable for any loss, damage or expense
arising out of any telephone transactions purporting to be on a shareholder's
behalf. In order to assure the accuracy of instructions received by telephone,
the Funds require some form of personal identification prior to acting upon
instructions received by telephone, record telephone instructions and provide
written confirmation to investors of such transactions. Redemption requests
transmitted via facsimile will not be accepted.
BY WIRE. You may redeem your shares by contacting the Funds by mail or
telephone and instructing them to send a wire transmission to your personal
bank. Proceeds of wire redemption for the Money Market Fund generally will be
transferred to the designated account on the day the request is received,
provided that it is received by 12:00 Noon (Eastern time).
Your instructions should include: (i) your account number, social
security or tax identification number and account registration; (ii) the Fund
name from which you are redeeming shares; and (iii) the amount to be redeemed.
Wire redemptions can be made only if the "yes" box has been checked on your
Purchase Application, and attach a copy of a void check of account where
proceeds are to be wired. Your bank may charge you a fee for receiving a wire
payment on your behalf.
The above mentioned services "By Telephone," "By Check" and "By Wire"
are not available for IRAs and trust relationships of IBJS.
SYSTEMATIC WITHDRAWAL PLAN. An owner of $10,000 or more of shares of a
Fund may elect to have periodic redemptions from his or her account to be paid
on a monthly, quarterly, semi annual or annual basis. The minimum periodic
payment is $100. A sufficient number of shares to make the scheduled redemption
will normally be redeemed on the date selected by the shareholder. Depending on
the size of the payment requested and fluctuation in the net asset value, if
any, of the shares redeemed, redemptions for the purpose of making such payments
may reduce or even exhaust the account. A shareholder may request that these
payments be sent to a predesignated bank or other designated party. Capital
gains and dividend distributions paid to the account will automatically be
reinvested at net asset value on the distribution payment date.
REDEMPTION OF SMALL ACCOUNTS. Due to the disproportionately higher cost
of servicing small accounts, each Fund reserves the right to redeem, on not less
than 30 days' notice, an account in a Fund that has been reduced by a
shareholder to $500 or less. However, if during the 30 day notice period the
shareholder purchases sufficient shares to bring the value of the account above
$500, this restriction will not apply.
REDEMPTION IN KIND. All redemptions of shares of the Funds shall be
made in cash, except that the commitment to redeem shares in cash extends only
to redemption requests made by each shareholder of a Fund during any 90-day
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period of up to the lesser of $250,000 or 1% of the net asset value of that Fund
at the beginning of such period. This commitment is irrevocable without the
prior approval of the SEC and is a fundamental policy of the Funds that may not
be changed without shareholder approval. In the case of redemption requests by
shareholders in excess of such amounts, the Board of Trustees reserves the right
to have the Funds make payment, in whole or in part, in securities or other
assets, in case of an emergency or any time a cash distribution would impair the
liquidity of a Fund to the detriment of the existing shareholders. In this
event, the securities would be valued in the same manner as the securities of
that Fund are valued. If the recipient were to sell such securities, he or she
could receive less than the redemption value of the securities and could incur
certain transaction costs.
DIVIDENDS, DISTRIBUTIONS AND FEDERAL INCOME TAX
Each Fund is treated as a separate entity for Federal income taxes.
Each Fund has elected to be treated and intends to continue to qualify to be
treated as a regulated investment company pursuant to the provisions of
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). By
so qualifying and electing, each Fund generally will not be subject to Federal
income tax to the extent that it distributes investment company taxable income
and net capital gains in the manner required under the Code.
Each Fund intends to distribute to its shareholders substantially all
of its investment company taxable income (which includes, among other items,
dividends and interest and the excess, if any, of net short term capital gains
(generally including any net option premium income) over net long term capital
losses). The Reserve Money Market Fund and the Bond Fund will declare
distributions of such income daily and pay those dividends monthly; the Core
Equity Fund will pay distributions annually and the Growth and Income Fund will
pay dividends at least quarterly. Each Fund intends to distribute, at least
annually, substantially all realized net capital gain (the excess of net long
term capital gains over net short term capital losses). In determining amounts
of capital gains to be distributed, any capital loss carryovers from prior years
will be applied against capital gains.
Distributions will be paid in additional Fund shares based on the net
asset value at the close of business on the payment date of the distribution,
unless the shareholder elects in writing, not less than five full business days
prior to the record date, to receive such distributions in cash. Dividends
declared in, and attributable to, the preceding month will be paid within five
business days after the end of each month.
In the case of the Reserve Money Market Fund, shares purchased will
begin earning dividends on the day the purchase order is executed and shares
redeemed will earn dividends through the previous day. Net investment income for
a Saturday, Sunday or a holiday will be declared as a dividend on the previous
business day. In the case of the other Funds that declare daily dividends,
shares purchased will begin earning dividends on the day after the purchase
order is executed, and shares redeemed will earn dividends through the day the
redemption is executed.
Investors who redeem all or a portion of Fund shares prior to a
dividend payment date will be entitled to all dividends declared but unpaid on
those shares at the time of their redemption.
Distributions of investment company taxable income (regardless of
whether derived from dividends, interest or short term capital gains) will be
taxable to shareholders as ordinary income. Distributions of net long term
capital gains designated by a Fund as capital gain dividends will be taxable as
long term capital gains, regardless of how long a shareholder has held his Fund
shares. Distributions are taxable in the same manner whether received in
additional shares or in cash.
Earnings of the Funds not distributed on a timely basis in accordance
with a calendar year distribution requirement are subject to a nondeductible 4%
excise tax. To prevent imposition of this tax, each Fund intends to comply with
this distribution requirement.
A distribution, including an "exempt interest dividend," will be
treated as paid on December 31 of the calendar year if it is declared by a Fund
during October, November, or December of that year to shareholders of record in
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such a month and paid by a Fund during January of the following calendar year.
Such distributions will be treated as received by shareholders in the calendar
year in which the distributions are declared, rather than the calendar year in
which the distributions are received.
A Fund's distributions with respect to a given taxable year may exceed
the current and accumulated earnings and profits of that Fund available for
distribution. In that event, distributions in excess of such earnings and
profits would be characterized as a return of capital to shareholders for
Federal income tax purposes, thus reducing each shareholder's cost basis in his
Fund shares. Distributions in excess of a shareholder's cost basis in his shares
would be treated as a gain realized from a sale of such shares.
Any gain or loss realized by a shareholder upon the sale or other
disposition of shares of a Fund, or upon receipt of a distribution in complete
liquidation of a Fund, generally will be a capital gain or loss which will be
long term or short term, generally depending upon the shareholder's holding
period for the shares. A loss realized by a shareholder on a redemption, sale,
or exchange of shares of a Fund with respect to which capital gain dividends
have been paid will be characterized as a long term capital loss to the extent
of such capital gain dividends.
It is anticipated that a portion of the dividends paid by the Funds
will qualify for the dividends received deduction available to corporations.
The Funds may be required to withhold for Federal income tax ("backup
withholding") 31% of the distributions and the proceeds of redemptions payable
to shareholders who fail to provide a correct taxpayer identification number or
to make required certifications, or where a Fund or shareholder has been
notified by the Internal Revenue Service that the shareholder is subject to
backup withholding. Most corporate shareholders and certain other shareholders
specified in the Code are exempt from backup withholding. Backup withholding is
not an additional tax. Any amounts withheld may be credited against the
shareholder's U.S. Federal income tax liability.
Those Funds that may invest in securities of foreign issuers may be
subject to withholding and other similar income taxes imposed by a foreign
country. Each of these Funds intends to elect, if it is eligible to do so under
the Code, to "pass through" to its shareholders the amount of such foreign taxes
paid. If such an election is made by a Fund, each shareholder of that Fund would
be required to include in gross income the taxable dividends received and the
amount of pro rata share of those foreign taxes paid by the Fund. Each
shareholder would be entitled either to deduct (as an itemized deduction) his
pro rata share of the foreign taxes in computing his taxable income or to use it
(subject to limitations) as a foreign tax credit against his U.S. Federal income
tax liability. No deduction for foreign taxes may be claimed by a shareholder
who does not itemize deductions. Each shareholder will be notified within 60
days after the close of a Fund's taxable year whether the foreign taxes paid by
the Fund will "pass through" for that year.
Shareholders will be notified annually by the Trust as to the Federal
tax status of distributions made by the Fund(s) in which they invest. Depending
on the residence of the shareholder for tax purposes, distributions also may be
subject to state and local taxes, including withholding taxes. Foreign
shareholders may, for example, be subject to special withholding requirements.
Special tax treatment, including a penalty on certain pre-retirement
distributions, is accorded to accounts maintained as IRAs. Shareholders should
consult their own tax advisers as to the Federal, state and local tax
consequences of ownership of shares of the Funds in their particular
circumstances.
INVESTMENT RESTRICTIONS
(ALL FUNDS, EXCEPT AS INDICATED)
(1) No Fund may invest more than 15% (10% with respect to the Reserve
Money Market Fund) of the aggregate value of its total assets in investments
which are illiquid, or not readily marketable (including repurchase agreements
having maturities of more than seven calendar days, time deposits having
maturities of more than seven calendar days, and securities of foreign issuers
that are not listed on a domestic or foreign securities exchange).
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(2) No Fund may borrow money or pledge or mortgage its assets, except
that a Fund may borrow from banks up to 10% of the current value of its total
net assets for temporary or emergency purposes and those borrowings may be
secured by the pledge of not more than 15% of the current value of that Fund's
total net assets (but investments may not be purchased by a Fund while any such
borrowings exist).
(3) No Fund may make loans, except loans of portfolio securities and
except that a Fund may enter into repurchase agreements with respect to its
portfolio securities and may purchase the types of debt instruments described in
this Prospectus.
The foregoing investment restrictions and those described in the SAI as
fundamental are policies of each Fund which may be changed only when permitted
by law and approved by the holders of a majority of the applicable Fund's
outstanding voting securities as described herein under "Other
Information--Voting."
In addition, each Fund is a diversified fund. As such, each will not,
with respect to 75% of its total assets, invest more than 5% of its total assets
in the securities of any one issuer (except for U.S. Government securities) or
purchase more than 10% of the outstanding voting securities of any such issuer.
The Reserve Money Market Fund is subject to further diversification requirements
with respect to 100% of their assets. Also, each Fund will invest less than 25%
of its total assets in the securities of any one industry, excluding the Reserve
Money Market Fund which may invest more than 25% of its total assets in
instruments issued by the banking industry. For this purpose, U.S. Government
securities (and repurchase agreements related thereto) are not considered
securities of a single industry.
If a percentage restriction on investment policies or the investment or
use of assets set forth in this Prospectus are adhered to at the time a
transaction is effected, later changes in percentage resulting from changing
asset values will not be considered a violation.
RISKS OF INVESTING IN THE FUNDS
CERTAIN RISK CONSIDERATIONS
The Reserve Money Market Fund attempts to maintain a constant net asset
value of $1.00 per share, although there can be no assurance that the Fund
will always be able to do so. The Reserve Money Market Fund may not achieve as
high a level of current income as other funds that do not limit their investment
to the high quality securities in which the Reserve Money Market Fund invests.
The price per share of each of the other Funds will fluctuate with
changes in value of the investments held by the Fund. For example, the value of
a bond fund's shares will generally fluctuate inversely with the movements in
interest rates and a stock fund's shares will generally fluctuate as a result
of numerous factors, including but not limited to investors' expectations about
the economy and corporate earnings and interest rates. Shareholders of a Fund
should expect the value of their shares to fluctuate with changes in the value
of the securities owned by that Fund. Additionally, a Fund's investment in
smaller companies may involve greater risks than investments in large companies
due to such factors as limited product lines, markets and financial or
managerial resources, and less frequently traded securities that may be subject
to more abrupt price movements than securities of larger companies.
There is, of course, no assurance that a Fund will achieve its
investment objective or be successful in preventing or minimizing the risk of
loss that is inherent in investing in particular types of investment products.
In order to attempt to minimize that risk, the Adviser monitors developments in
the economy, the securities markets, and with each particular issuer. Also, as
noted earlier, each diversified Fund is managed within certain limitations that
restrict the amount of a Fund's investment in any single issuer.
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FOREIGN SECURITIES (ALL FUNDS). Investing in the securities of issuers
in any foreign country, including ADRs, involves special risks and
considerations not typically associated with investing in U.S. companies. These
include differences in accounting, auditing and financial reporting standards;
generally higher commission rates on foreign portfolio transactions; the
possibility of nationalization, expropriation or confiscatory taxation; adverse
changes in investment or exchange control regulations (which may include
suspension of the ability to transfer currency from a country); and political
instability which could affect U.S. investments in foreign countries.
Additionally, foreign securities and dividends and interest payable on those
securities may be subject to foreign taxes, including taxes withheld from
payments on those securities. Foreign securities often trade with less frequency
and volume than domestic securities and, therefore, may exhibit greater price
volatility. Additional costs associated with an investment in foreign securities
may include higher custodial fees than apply to domestic custodial arrangements
and transaction costs of foreign currency conversions. Changes in foreign
exchange rates also will affect the value of securities denominated or quoted in
currencies other than the U.S. dollar and, with respect to the Reserve Money
Market Fund, may affect the ability to maintain net asset value. A Fund's
objectives may be affected either unfavorably or favorably by fluctuations in
the relative rates of exchange between the currencies of different nations, by
exchange control regulations and by indigenous economic and political
developments. Through a Fund's flexible policies, management endeavors to avoid
unfavorable consequences and to take advantage of favorable developments in
particular nations where, from time to time, it places a Fund's investments.
OTHER INFORMATION
CAPITALIZATION
IBJ Funds Trust was organized as a Delaware business trust on August
25, 1994, and currently consists of four separately managed portfolios. The
Board of Trustees may establish additional portfolios in the future. The
capitalization of the Trust consists solely of an unlimited number of shares of
beneficial interest with a par value of $0.001 each. When issued, shares of the
Funds are fully paid, nonassessable and freely transferable.
Each Fund also offers a Service Class of shares. The Service Class
shares are offered at net asset value without a sales load only to certain
institutional investors, or other investors who at the time of purchase have a
balance of $25,000 or more invested in any of the IBJ Funds, are purchasers
through a trust investment manager or account manager or administered by the
Adviser, are employees or ex-employees of IBJS or any of its affiliates, Furman
Selz LLC, or any other service provider, or employees of any trust customer of
IBJS or any of its affiliates. Shareholders in the Premium Class of shares may
be subject to an additional 12b-1 fee of up to 0.35% of average net assets and
an additional shareholder servicing charge of up to 0.50% of average net assets.
Under Delaware law, shareholders could, under certain circumstances, be
held personally liable for the obligations of the Trust. However, the
Declaration of Trust disclaims liability of the shareholders, Trustees or
officers of the Trust for acts or obligations of the Trust, which are binding
only on the assets and property of the Trust and requires that notice of the
disclaimer be given in each contract or obligation entered into or executed by
the Trust or the Trustees. The Declaration of Trust provides for indemnification
out of Trust property for all loss and expense of any shareholder held
personally liable for the obligations of the Trust. The risk of a shareholder
incurring financial loss on account of shareholder liability is limited to
circumstances in which the Trust itself would be unable to meet its obligations
and should be considered remote.
VOTING
Shareholders have the right to vote in the election of Trustees and on
any and all matters on which, by law or under the provisions of the Declaration
of Trust, they may be entitled to vote. The Trust is not required to hold
regular annual meetings of the Funds' shareholders and does not intend to do so.
The Trustees are required to call a meeting for the purpose of considering the
removal of a person serving as Trustee if requested in writing to do so by the
holders of not less than 10% of the outstanding shares of the Trust and in
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connection with such meeting to comply with the shareholders' communications
provisions of Section 16(c) of the Act. See "Other Information--Voting Rights"
in the SAI.
Shares entitle their holders to one vote per share (with proportionate
voting for fractional shares). As used in this Prospectus, the phrase "vote of a
majority of the outstanding shares" of a Fund (or the Trust) means the vote of
the lesser of: (1) 67% of the shares of a Fund (or the Trust) present at a
meeting if the holders of more than 50% of the outstanding shares are present in
person or by proxy; or (2) more than 50% of the outstanding shares of a Fund (or
the Trust).
PERFORMANCE INFORMATION
A Fund may, from time to time, include its yield and total return in
advertisements or reports to shareholders or prospective investors. Shareholders
of the Premium Class of shares will experience a lower net return on their
investment than shareholders of the Service Class of shares because of the
additional 12b-1 fees and shareholder servicing charge to which Premium Class
shareholders may be subject. The methods used to calculate the yield and total
return of the Funds is mandated by the SEC. Quotations of "yield" for a Fund
(other than the Reserve Money Market Fund) will be based on the investment
income per share during a particular 30 day (or one month) period (including
dividends and interest), less expenses accrued during the period ("net
investment income"), and will be computed by dividing net investment income by
the maximum public offering price per share on the last day of the period.
Quotations of "yield" for the Reserve Money Market Fund will be based
on the income received by a hypothetical investment (less a pro rata share of
Fund expenses) over a particular seven day period, which is then "annualized"
(i.e., assuming that the seven day yield would be received for 52 weeks,
stated in terms of an annual percentage return on the investment).
"Effective yield" for the Money Market Fund is calculated in a manner
similar to that used to calculate yield, but includes the compounding effect of
earnings on reinvested dividends.
Quotations of yield and effective yield reflect only a Fund's
performance during the particular period on which the calculations are based.
Yield and effective yield for a Fund will vary based on changes in market
conditions, the level of interest rates and the level of that Fund's expenses,
and no reported performance figure should be considered an indication of
performance which may be expected in the future.
Quotations of average annual total return for a Fund (other than the
Reserve Money Market Fund) will be expressed in terms of the average annual
compounded rate of return of a hypothetical investment in that Fund over periods
of 1, 5 and 10 years (up to the life of that Fund), reflect the deduction of a
proportional share of Fund expenses (on an annual basis), and assume that all
dividends and distributions are reinvested when paid.
Performance information for a Fund may be compared to various unmanaged
indices, such as those indices prepared by Lipper Analytical Services, Standard
& Poor's 500 Stock Index, the Dow Jones Industrial Average and other entities or
organizations which track the performance of investment companies. Any
performance information should be considered in light of the Fund's investment
objectives and policies, characteristics and quality of the Funds and the market
conditions during the time period indicated, and should not be considered to be
representative of what may be achieved in the future. For a description of the
methods used to determine yield and total return for the Funds, see "Other
Information--Yield and Performance Information" in the SAI.
Each of the Funds is the successor to one or more collective investment
funds previously managed by IBJS. Investors in the collective investment funds
were invited to invest in the corresponding IBJS Fund at the inception of each
such Fund. Set forth below are certain performance data for the collective
investment funds for the past five years. The data shown below reflects total
return for the periods shown, reduced by the estimated expense ratio for each
corresponding IBJS Fund as indicated in the Fee Table in this Prospectus. This
performance information is deemed relevant since the collective investment funds
have been managed using the same investment objectives, policies and
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restrictions and portfolio managers as those to be used by each corresponding
IBJ Fund. However, this performance data is not necessarily indicative of the
future performance of any of the Funds.
26
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IBJ COLLECTIVE INVESTMENT FUNDS
TOTAL RETURN FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
RESERVE GROWTH
MARKET CORE AND
MONEY BOND EQUITY INCOME
FUND FUND FUND FUND
---- ---- ---- ----
<C> <C> <C> <C> <C>
1989................................................. 9.2% 10.7% 27.4% 17.7%
1990................................................. 9.4% 8.6% -1.2% 3.3%
1991................................................. 6.8% 17.4% 32.5% 22.4%
1992................................................. 4.9% 7.4% 10.4% 9.3%
1993................................................. 3.2% 9.1% 10.3% 8.9%
1994................................................. 3.4% -4.90% -2.7% -2.4%
Jan-95............................................... 0.3% 1.90% 2.7% 2.1%
5 Years (Annualized)
1990-1994................................... 5.5% 7.3% 9.2% 8.0%
</TABLE>
ACCOUNT SERVICES
All transactions in shares of the Funds will be reflected in a
statement for each shareholder. In those cases where a nominee is shareholder of
record of shares purchased for its customer, the Funds have been advised that
the statement may be transmitted to the customer at the discretion of the
nominee.
Furman Selz acts as the Funds' transfer agent. The Trust compensates
Furman Selz, the Trust's administrator, pursuant to a Services Agreement
described on page 15 of this Prospectus, for providing personnel and facilities
to perform dividend disbursing and transfer agency related services for the
Trust.
SHAREHOLDER INQUIRIES
All shareholder inquiries should be directed to Furman Selz Mutual
Funds Department, 237 Park Avenue, New York, New York 10017.
General and Account Information: (800) 99-IBJFD.
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APPENDIX
DESCRIPTION OF MOODY'S BOND RATINGS:
Excerpts from Moody's description of its four highest bond ratings are
listed as follows: Aaa--judged to be the best quality and they carry the
smallest degree of investment risk; Aa--judged to be of high quality by all
standards. Together with the Aaa group, they comprise what are generally known
as high grade bonds; A--possess many favorable investment attributes and are to
be considered as "upper medium grade obligations"; Baa--considered to be medium
grade obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Other Moody's bond descriptions
include: Ba--judged to have speculative elements, their future cannot be
considered as well assured; B--generally lack characteristics of the desirable
investment; Caa--are of poor standing. Such issues may be in default or there
may be present elements of danger with respect to principal or interest;
Ca--speculative in a high degree, often in default; C--lowest rated class of
bonds, regarded as having extremely poor prospects.
Moody's also supplies numerical indicators 1, 2 and 3 to rating
categories. The modifier 1 indicates that the security is in the higher end of
its rating category; the modifier 2 indicates a mid range ranking; and modifier
3 indicates a ranking toward the lower end of the category.
DESCRIPTION OF S&P'S BOND RATINGS:
Excerpts from S&P's description of its four highest bond ratings are
listed as follows: AAA--highest grade obligations, in which capacity to pay
interest and repay principal is extremely strong; AA--also qualify as high grade
obligations, having a very strong capacity to pay interest and repay principal,
and differs from AAA issues only in a small degree; A--regarded as upper medium
grade, having a strong capacity to pay interest and repay principal, although
they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories;
BBB--regarded as having an adequate capacity to pay interest and repay
principal. Whereas it normally exhibits adequate protection parameters, adverse
economic conditions or changing circumstances are more likely to lead to a
weakened capacity to pay interest and repay principal for debt in this category
than in higher rated categories. BB, B, CCC, CC--predominately speculative with
respect to capacity to pay interest and repay principal in accordance with terms
of the obligations; BB indicates the highest grade and CC the lowest within the
speculative rating categories.
S&P applies indicators "+, -," no character, and relative standing
within the major rating categories.
DESCRIPTION OF MOODY'S RATINGS OF NOTES AND VARIABLE RATE DEMAND INSTRUMENTS:
Moody's ratings for state and municipal short term obligations will be
designated Moody's Investment Grade or MIG. Such ratings recognize the
differences between short term credit and long-term risk. Short term ratings on
issues with demand features (variable rate demand obligations) are
differentiated by the use of the VMIG symbol to reflect such characteristics as
payment upon periodic demand rather than fixed maturity dates and payments
relying on external liquidity.
MIG 1/VMIG 1: This designation denotes best quality. There is present
strong protection by established cash flows, superior liquidity support or
demonstrated broad based access to the market for refinancing.
MIG 2/VMIG 2: This denotes high quality. Margins of protection are
ample although not as large as in the preceding group.
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IBJ FUNDS
Address for
TRUST CLIENTS OF IBJS
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
INVESTMENT ADVISER
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
ADMINISTRATOR AND SPONSOR
Furman Selz LLC
230 Park Avenue
New York, New York 10169
DISTRIBUTOR
IBJ Funds Distributor, Inc.
230 Park Avenue
New York, New York 10169
CUSTODIAN
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
COUNSEL
Baker & McKenzie
805 Third Avenue
New York, New York 10022
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
1301 Avenue of the Americas
New York, New York 10019
IBJ FUNDS TRUST
A FAMILY OF MUTUAL FUNDS
THE RESERVE MONEY MARKET FUND SEEKS TO PROVIDE INVESTORS WITH CURRENT INCOME,
LIQUIDITY AND THE MAINTENANCE OF A STABLE $1.00 NET ASSET VALUE BY INVESTING IN
HIGH QUALITY, SHORT-TERM OBLIGATIONS
THE BOND FUND SEEKS TO PROVIDE INVESTORS WITH A HIGH LEVEL OF TOTAL RETURN BY
INVESTING IN FIXED DEBT MARKET SECURITIES MANAGED FOR TOTAL RETURN
THE CORE EQUITY FUND SEEKS TO PROVIDE INVESTORS WITH
LONG-TERM CAPITAL APPRECIATION
THE GROWTH AND INCOME FUND SEEKS TO PROVIDE INVESTORS WITH LONG-TERM CAPITAL
APPRECIATION AND CURRENT INCOME FOR A HIGH TOTAL RETURN BY INVESTING IN A
BALANCE OF EQUITIES AND DEBT MARKET SECURITIES.
PREMIUM CLASS PROSPECTUS
MARCH 27, 1996
Investment Adviser
IBJ SCHRODER BANK &
TRUST COMPANY
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IBJ FUNDS APPLICATION
Mail to: IBJ FUNDS
P.O. Box 4490
Grand Central Station
New York, NY 10163-4490
FOR ASSISTANCE IN COMPLETING THE APPLICATION CONTACT YOUR REPRESENTATIVE OR CALL
THE IBJ FUNDS AT 1-800-991IBJFD (800-994-2533).
PLEASE PRINT
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1. FUND SELECTION - INITIAL INVESTMENT
Class of Shares: | | Institutional | | Class Service Class
IF NEITHER CLASS IS ELECTED, PURCHASE WILL DEFAULT TO SERVICE CLASS.
The Reserve Money Market Fund $ _________________________
The Core Equity Fund $ _________________________
The Bond Fund $ _________________________
The Growth & Income Fund $ _________________________
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2. ACCOUNT REGISTRATION
| | Individual __________________________________________________________
FIRST M.I. LAST
| | Joint Tenant ________________________________________________________
FIRST M.I. LAST
| | If joint, check one:
| | With Right of Survivorship
| | Tenants in Common
| | Tenants by the Entireties
| | Uniform Gifts/Transfers to Minors Act ________________________________
CUSTODIAN'S NAME
Minor's Birthdate _______/_______/_______
as Custodian for_______________________________________ State of Residency
MINOR'S NAME
| | Corporation, Trust, Partnership, or Other Entity
____________________________________________________________
LEGAL ENTITY NAME
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Trustee's Name (for first trust only) Date of Trust (if applicable)
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3. ACCOUNT ADDRESS
Street Address ______________________________________________________
Citizen of: | | U.S. | | Other Country____________________________
COUNTRY OF RESIDENCE
City/State/Zip_____________________ Daytime Telephone _______________________
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4. SOCIAL SECURITY/TAX IDENTIFICATION NUMBER
______________________________ or ___________________________________
SOCIAL SECURITY NUMBER TAXPAYER IDENTIFICATION NUMBER
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5. DISTRIBUTIONS
Dividends and capital gains will be reinvested unless otherwise indicated.
Dividends are to be: | | Reinvested | | Paid in Cash
| | Capital gains are to be: | | Reinvested | | Paid in Cash
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6. DISTRIBUTIONS REINVESTED TO OTHER IBJ FUNDS
Permits all distributions from one Fund to be automatically reinvested into
another identically registered IBJ Fund. Transfer all distribution earned:
From Fund ______________________________ Account Number ______________________
To Fund _______________________________ Account Number ______________________
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7. TELEPHONE EXCHANGES
If you want telephone exchange privileges, check here. | |
Fund exchanges: This authorizes exchanges between identically registered
accounts among all IBJ Funds upon instructions from shareholder or dealer of
record by telephone.
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IBJ FUNDS TRUST Check Writing Signature Card
Reserve Money Market Fund
Account Registration:
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Name of Account
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Address
- -------------------------------- ----------- ---------- ---------------------
Name State Zip Acct. # (IF EXISTING)
Authorized Signatures:
- ---------------------------------- --------------------------------------
Name Title
- ---------------------------------- --------------------------------------
Name Title
- ---------------------------------- --------------------------------------
Name Title
How many signatures on checks? | | 1 | | 2 | | 3
(8/95) SUBJECT TO CONDITIONS ON REVERSE SIDE
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8. TELEPHONE REDEMPTIONS
If you want telephone redemption privileges, check here. | |
I (we) authorize The IBJ Funds and its agents to act upon instructions, from
shareholder or dealer of record, received by telephone or letter, to have
amounts wired to my (our) bank account designated below OR mailed to the address
of record established for this account. I (we) ratify any such instructions. If
you will be utilizing the bank wiring option, please attach a voided check from
your bank account and complete the information below.
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BANK NAME STREET CITY STATE ZIP CODE
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ABA ROUTING NUMBER ACCOUNT NAME ACCOUNT NUMBER
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9. SYSTEMATIC WITHDRAWAL PLAN
| | Yes | | No (minimum payment $100)
This is available to shareholders with an account of $10,000 or more.
Dollar amount of each payment $ _______________
Beginning ____________________________________
(MONTH)
Payment will be made:
Monthly | | Quarterly | | Semi-Annually | | Annually
Checks will be made payable to registered owner(s) and sent to the address of
record unless a third party or bank is indicated below.
Third Party Name __________________________________________
Address ___________________________________________________
City/State/Zip ____________________________________________
Account Name & Number _____________________________________
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10. YOUR SIGNATURE & CERTIFICATION FOR THE IRS
Each of the undersigned has the authority and legal capacity to purchase mutual
fund shares, each is of legal age in their state and believes each investment is
suitable for themselves. Each of the undersigned has received and read the
Prospectus and agrees to its terms.
Certification - Under penalties of perjury,
I certify that:
(1) The number shown on this form is my correct taxpayer identification number
(or I am waiting for a number to be issued to me), and
(2) I am not subject to backup withholding because: (a) I am exempt from backup
withholding as a result of a failure to report all interest or dividends,
or (c) the IRS has notified me that I am no longer subject to backup
withholding.
Certification Instructions - You must cross out item (2) above if you have
been notified by the IRS that you are currently subject to backup
withholding because of underreporting interest or dividends on your tax
return.
(3) I understand that the Funds are not deposits or obligations of IBJ Trust or
any bank, are not government guaranteed or FDIC insured, and involve
investment risks including possible loss of principal.
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SIGNATURE SIGNATURE DATE
* IF JOINT ACCOUNT, ALL TENANTS MUST SIGN.
** IF CORPORATE ACCOUNT OR OTHER LEGAL ENTITY, AUTHORIZED PERSON MUST SIGN
IN CAPACITY.
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11. BROKER/DEALER USE ONLY
We hereby submit this application for the purchase of the Fund(s) indicated in
accordance with the terms of our selling agreement with the Distributor, and
with the Prospectus for the Fund(s). We agree to notify the Distributor of any
purchases made under a Letter of Intent or Right of Accumulation.
Securities Dealer Name _________________________________________________________
Office Address_______________________________ Telephone Number _________________
_________________________________
Branch # ____________ Rep # ______________ Representative Name _______________
Authorized Signature, Securities Dealer_________________________________________
Title__________________________________________
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THE PAYMENT OF FUNDS IS AUTHORIZED,
BY THE SIGNATURE(S) APPEARING ON REVERSE SIDE.
If this card is signed by more than one person, all checks will require all
signatures appearing on the reverse side unless a lesser number is indicated. If
no indication is given, all checks will require all signatures. Each signatory
guarantees the genuineness of the other's signature(s). Checks may not be for
less than $500 or such other minimum or maximum amounts as may from time to time
be established by the Fund(s) upon prior written notice to its shareholders.
Furman Selz is hereby appointed agent by the person(s) signing this card
(the "Depositor(s)"), and as agent, is authorized and directed to present checks
drawn on this checking account to the Fund(s) and Furman Selz, as transfer
agent, as requests to redeem shares of the Fund(s) registered in the name of the
Depositor(s) in the amounts of such checks. Furman Selz shall be liable for only
its own negligence.
The Depositor(s) hereby authorize(s) the Fund(s) and Furman Selz, as
transfer agent, to honor redemption requests presented in the above manner by
Furman Selz. The Fund(s), as transfer agent, will not be liable and will be
indemnified by Depositor(s) for any loss, expense or cost arising out of check
redemptions. No redemption of shares purchased by check will be permitted
pursuant to this Check Writing Privilege until 15 days after these shares were
credited to the shareholder's account. Furman Selz has the right not to honor
checks in amounts exceeding the value of the Depositor(s) shareholder account at
the time the check is presented for payment.
Furman Selz reserves the right to change, modify or terminate this checking
account at any time upon notification mailed to the address of record of the
Depositor(s)
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IBJ FUNDS TRUST
237 Park Avenue
New York, New York 10017
General and Account Information: (800) 99-IBJFD
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IBJ Schroder Bank & Trust Company--Investment Adviser
("IBJS")
Furman Selz LLC -
Administrator and Sponsor
("Furman Selz" or the "Sponsor")
IBJ Funds Distributor, Inc. -
Distributor
(the "Distributor")
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information (the "SAI") describes one
money market fund (the "Money Market Fund") and three non-money market funds
(the "Non-Money Market Funds") (collectively, the "Funds"), all of which are
managed by IBJS. The Funds are:
MONEY MARKET FUND
Reserve Money Market Fund
NON MONEY MARKET FUNDS
Bond Fund
Core Equity Fund
Growth and Income Fund
Each Fund constitutes a separate investment portfolio with distinct
investment objectives and policies. Shares of the Funds are sold to the public
by Furman Selz as an investment vehicle for individuals, institutions,
corporations and fiduciaries, including customers of IBJS or its affiliates.
This SAI is not a prospectus and is only authorized for
distribution when preceded or accompanied by a prospectus for the applicable
Fund dated March 27, 1996 (the "Prospectus"). This SAI contains additional and
more detailed information than that set forth in each Prospectus and should be
read in conjunction with the applicable Prospectus. The Prospectuses may be
obtained without charge by writing or calling the Funds at the address and
information telephone number printed above.
March 27, 1996
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TABLE OF CONTENTS
INVESTMENT POLICIES....................................................... 1
INVESTMENT RESTRICTIONS................................................... 15
MANAGEMENT................................................................ 17
EXPENSES AND EXPENSE LIMITS............................................... 25
DETERMINATION OF NET ASSET VALUE.......................................... 25
PORTFOLIO TRANSACTIONS.................................................... 27
TAXATION.................................................................. 30
OTHER INFORMATION......................................................... 38
FINANCIAL STATEMENTS...................................................... 43
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INVESTMENT POLICIES
The Prospectuses discuss the investment objectives of the Funds and
the policies to be employed to achieve those objectives. This section contains
supplemental information concerning certain types of securities and other
instruments in which the Funds may invest, the investment policies and portfolio
strategies that the Funds may utilize, and certain risks attendant to such
investments, policies and strategies.
U.S. GOVERNMENT AGENCY OBLIGATIONS (All Funds). These Funds may
invest in obligations of agencies of the United States Government. Such agencies
include, among others, Farmers Home Administration, Federal Farm Credit System,
Federal Housing Administration, Government National Mortgage Association,
Maritime Administration, Small Business Administration, and The Tennessee Valley
Authority. The Funds may purchase securities issued or guaranteed by the
Government National Mortgage Association which represent participation in
Veterans Administration and Federal Housing Administration backed mortgage
pools. Obligations of instrumentalities of the United States Government include
securities issued by, among others, Federal Home Loan Banks, Federal Home Loan
Mortgage Corporation, Federal Land Banks, Federal National Mortgage Association
and the United States Postal Service. Some of these securities are supported by
the full faith and credit of the United States Treasury (e.g., Government
National Mortgage Association). Guarantees of principal by agencies or
instrumentalities of the U.S. Government may be a guarantee of payment at the
maturity of the obligation so that in the event of a default prior to maturity
there might not be a market and thus no means of realizing the value of the
obligation prior to maturity.
COMMERCIAL PAPER (All Funds). Commercial paper includes short-term
unsecured promissory notes, variable rate demand notes and variable rate master
demand notes issued by domestic and foreign bank holding companies, corporations
and financial institutions and similar taxable instruments issued by government
agencies and instrumentalities. All commercial paper purchased by the Funds are,
at the time of investment, rated in one of the top two rating categories of at
least one Nationally Recognized Statistical Rating Organization ("NRSRO") or, if
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not rated, are, in the opinion of the Adviser, of an investment quality
comparable to rated commercial paper in which the Funds may invest, or, with
respect to the Reserve Money Market Fund, (i) rated "P-1" by Moody's Investors
Service, Inc. ("Moody's") and "A-1" or better by Standard & Poor's Corporation
("S&P") or in a comparable rating category by any two NRSROs that have rated the
commercial paper or (ii) rated in a comparable category by only one such
organization if it is the only organization that has rated the commercial paper
(and provided the purchase is approved or ratified by the Board of Trustees).
CORPORATE DEBT SECURITIES (All Funds). Fund investments in these
securities are limited to corporate debt securities (corporate bonds,
debentures, notes and similar corporate debt instruments) which meet the rating
criteria established for each Fund.
After purchase by a Fund, a security may cease to be rated or its
rating may be reduced below the minimum required for purchase by the Fund.
Neither event will require a sale of such security by the Fund. However, the
Fund's Adviser will consider such event in its determination of whether the Fund
should continue to hold the security. To the extent the ratings given by a NRSRO
may change as a result of changes in such organizations or their rating systems,
the Fund will attempt to use comparable ratings as standards for investments in
accordance with the investment policies contained in the Prospectus and in this
SAI.
The Fund may invest in Convertible Debt rated in categories
regarded as having predominantly speculative characteristics with respect to
capacity to pay interest and repay principal. While such debt will likely have
some quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.
BANK OBLIGATIONS. (All Funds). A description of the bank
obligations which the Funds may purchase is set forth in the Prospectuses. These
obligations include, but are not limited to, domestic, Eurodollar and
Yankeedollar certificates of deposits, time deposits, bankers' acceptances,
commercial paper, bank deposit notes and other promissory notes including
floating or variable rate obligations issued by U.S. or foreign bank holding
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companies and their bank subsidiaries, branches and agencies. Certificates of
deposit are issued against funds deposited in an eligible bank (including its
domestic and foreign branches, subsidiaries and agencies), are for a definite
period of time, earn a specified rate of return and are normally negotiable. A
bankers' acceptance is a short-term draft drawn on a commercial bank by a
borrower, usually in connection with a commercial transaction. The borrower is
liable for payment as is the bank, which unconditionally guarantees to pay the
draft at its face amount on the maturity date. Eurodollar obligations are U.S.
Dollar obligations issued outside the United States by domestic or foreign
entities. Yankeedollar obligations are U.S. dollar obligations issued inside the
United States by foreign entities. Bearer deposit notes are obligations of a
bank, rather than a bank holding company. Similar to certificates of deposit,
deposit notes represent bank level investments and, therefore, are senior to all
holding company corporate debt.
VARIABLE AND FLOATING RATE DEMAND AND MASTER DEMAND OBLIGATIONS
(All Funds). The Funds may, from time to time, buy variable rate demand
obligations issued by corporations, bank holding companies and financial
institutions and similar taxable and tax-exempt instruments issued by government
agencies and instrumentalities. These securities will typically have a maturity
of 397 days or less with respect to the Money Market Fund or five to twenty
years with respect to the Non-Money Market Funds, but carry with them the right
of the holder to put the securities to a remarketing agent or other entity on
short notice, typically seven days or less. The obligation of the issuer of the
put to repurchase the securities may or may not be backed by a letter of credit
or other obligation issued by a financial institution. The purchase price is
ordinarily par plus accrued and unpaid interest.
The Funds may also buy variable rate master demand obligations. The
terms of these obligations permit the investment of fluctuating amounts by the
Funds at varying rates of interest pursuant to direct arrangements between a
Fund, as lender, and the borrower. They permit weekly, and in some instances,
daily, changes in the amounts borrowed. The Funds have the right to increase the
amount under the obligation at any time up to the full amount provided by the
note agreement, or to decrease the amount, and the borrower may prepay up to the
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full amount of the obligation without penalty. The obligations may or may not be
backed by bank letters of credit. Because the obligations are direct lending
arrangements between the lender and the borrower, it is not generally
contemplated that they will be traded, and there is no secondary market for
them, although they are redeemable (and thus, immediately repayable by the
borrower) at principal amount, plus accrued interest, upon demand. The Funds
have no limitations on the type of issuer from whom the obligations will be
purchased. The Funds will invest in variable rate master demand obligations only
when such obligations are determined by the Adviser, pursuant to guidelines
established by the Board of Trustees, to be of comparable quality to rated
issuers or instruments eligible for investment by the Funds.
WHEN-ISSUED AND DELAYED-DELIVERY SECURITIES (All Funds). The Funds
may purchase securities on a when-issued or delayed-delivery basis. For example,
delivery of and payment for these securities can take place a month or more
after the date of the transaction. The securities so purchased are subject to
market fluctuation during this period and no income accrues to the Fund until
settlement takes place. To facilitate such acquisitions, the Funds will maintain
with the custodian a separate account with a segregated portfolio of securities
in an amount at least equal to the value of such commitments. On the delivery
dates for such transactions, each Fund will meet obligations from maturities or
sales of the securities held in the separate account and/or from cash flow.
While the Funds normally enter into these transactions with the intention of
actually receiving or delivering the securities, they may sell these securities
before the settlement date or enter into new commitments to extend the delivery
date into the future, if the Adviser considers such action advisable as a matter
of investment strategy. Such securities have the effect of leverage on the Funds
and may contribute to volatility of a Fund's net asset value.
LOANS OF PORTFOLIO SECURITIES (ALL FUNDS). The Funds may lend their
portfolio securities to brokers, dealers and financial institutions, provided:
(1) the loan is secured continuously by collateral consisting of U.S. Government
securities or cash or approved bank letters of credit maintained on a daily
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mark-to-market basis in an amount at least equal to the current market value of
the securities loaned; (2) the Funds may at any time call the loan and obtain
the return of the securities loaned within five business days; (3) the Funds
will receive any interest or dividends paid on the loaned securities; and (4)
the aggregate market value of securities loaned will not at any time exceed
331/3% of the total assets of a particular Fund.
The Funds will earn income for lending their securities because
cash collateral pursuant to these loans will be invested in short-term money
market instruments. In connection with lending securities, the Funds may pay
reasonable finders, administrative and custodial fees. Loans of securities
involve a risk that the borrower may fail to return the securities or may fail
to provide additional collateral.
REPURCHASE AGREEMENTS (All Funds). The Funds may invest in
securities subject to repurchase agreements with any bank or registered
broker-dealer who, in the opinion of the Trustees, present a minimum risk of
bankruptcy. Such agreements may be considered to be loans by the Funds for
purposes of the Investment Company Act of 1940, as amended (the "1940 Act"). A
repurchase agreement is a transaction in which the seller of a security commits
itself at the time of the sale to repurchase that security from the buyer at a
mutually agreed-upon time and price. The repurchase price exceeds the sale
price, reflecting an agreed-upon interest rate effective for the period the
buyer owns the security subject to repurchase. The agreed-upon rate is unrelated
to the interest rate on that security. IBJS will monitor the value of the
underlying security at the time the transaction is entered into and at all times
during the term of the repurchase agreement to insure that the value of the
security always equals or exceeds the repurchase price. In the event of default
by the seller under the repurchase agreement, the Funds may have problems in
exercising their rights to the underlying securities and may incur costs and
experience time delays in connection with the disposition of such securities.
REVERSE REPURCHASE AGREEMENTS (ALL FUNDS). The Funds may also enter
into reverse repurchase agreements to avoid selling securities during
unfavorable market conditions to meet redemptions. Pursuant to a reverse
repurchase agreement, a Fund will sell portfolio securities and agree to
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repurchase them from the buyer at a particular date and price. Whenever a Fund
enters into a reverse repurchase agreement, it will establish a segregated
account in which it will maintain liquid assets in an amount at least equal to
the repurchase price marked to market daily (including accrued interest), and
will subsequently monitor the account to ensure that such equivalent value is
maintained. The Fund pays interest on amounts obtained pursuant to reverse
repurchase agreements. Reverse repurchase agreements are considered to be
borrowings by a Fund under the 1940 Act.
ILLIQUID SECURITIES (All Funds). Each Fund has adopted a
fundamental policy with respect to investments in illiquid securities.
Historically, illiquid securities have included securities subject to
contractual or legal restrictions on resale because they have not been
registered under the Securities Act of 1933, as amended ("Securities Act"),
securities that are otherwise not readily marketable and repurchase agreements
having a maturity of longer than seven days. Securities that have not been
registered under the Securities Act are referred to as private placements or
restricted securities and are purchased directly from the issuer or in the
secondary market. Mutual funds do not typically hold a significant amount of
these restricted or other illiquid securities because of the potential for
delays on resale and uncertainty in valuation. Limitations on resale may have an
adverse effect on the marketability of portfolio securities and a mutual fund
might be unable to dispose of restricted or other illiquid securities promptly
or at reasonable prices and might thereby experience difficulty satisfying
redemptions within seven days. A mutual fund might also have to register such
restricted securities in order to dispose of them resulting in additional
expense and delay. Adverse market conditions could impede such a public offering
of securities.
In recent years, however, a large institutional market has
developed for certain securities that are not registered under the Securities
Act, including repurchase agreements, commercial paper, foreign securities,
municipal securities and corporate bonds and notes. Institutional investors
depend on either an efficient institutional market in which the unregistered
security can be readily resold or on the issuer's ability to honor a demand for
repayment. The fact that there are contractual or legal restrictions on resale
to the general public or to certain institutions may not be indicative of the
liquidity of such investments.
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Each Fund may also invest in restricted securities issued under
Section 4(2) of the Securities Act, which exempts from registration
"transactions by an issuer not involving any public offering." Section 4(2)
instruments are restricted in the sense that they can only be resold through the
issuing dealer and only to institutional investors; they cannot be resold to the
general public without registration. Restricted securities issued under Section
4(2) of the Securities Act will be treated as illiquid and subject to the Fund's
investment restriction on illiquid securities.
The Commission has adopted Rule 144A, which allows a broader
institutional trading market for securities otherwise subject to restrictions on
resale to the general public. Rule 144A establishes a "safe harbor" from the
registration requirements of the Securities Act applicable to resales of certain
securities to qualified institutional buyers. It is the intent of the Funds to
invest, pursuant to procedures established by the Board of Trustees and subject
to applicable investment restrictions, in securities eligible for resale under
Rule 144A which are determined to be liquid based upon the trading markets for
the securities.
Pursuant to guidelines set forth by and under the supervision of
the Board of Trustees, the Adviser will monitor the liquidity of restricted
securities in a Fund's portfolio. In reaching liquidity decisions, the Adviser
will consider, INTER ALIA, the following factors: (1)the frequency of trades and
quotes for the security over the course of six months or as determined in the
discretion of the Investment Adviser; (2)the number of dealers wishing to
purchase or sell the security and the number of other potential purchasers over
the course of six months or as determined in the discretion of the Investment
Adviser; (3) dealer undertakings to make a market in the security; (4)the nature
of the security and the marketplace in which it trades (E.G., the time needed to
dispose of the security, the method of soliciting offers and the mechanics of
the transfer); and (5) other factors, if any, which the Adviser deems relevant.
The Adviser will also monitor the purchase of Rule 144A securities to assure
that the total of all Rule 144A securities held by a Fund does not exceed 10% of
the Fund's average daily net assets. Rule 144A securities which are determined
to be liquid based upon their trading markets will not, however, be required to
be included among the securities considered to be illiquid for purposes of
Investment Restriction No. 1. Investments in Rule 144A securities could have the
effect of increasing Fund illiquidity.
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MUNICIPAL COMMERCIAL PAPER (All Funds). Municipal commercial
paper is a debt obligation with a stated maturity of one year or less which is
issued to finance seasonal working capital needs or as short-term financing in
anticipation of longer-term debt. Investments in municipal commercial paper are
limited to commercial paper which is rated at the date of purchase: (i) "P-1" by
Moody's and "A-1" or "A-1+" by S&P "P-2" (Prime-2) or better by Moody's and
"A-2" or better by S&P or (ii) in a comparable rating category by any two of the
NRSROs that have rated commercial paper or (iii) in a comparable rating category
by only one such organization if it is the only organization that has rated the
commercial paper or (iv) if not rated, is, in the opinion of IBJS, of comparable
investment quality and within the credit quality policies and guidelines
established by the Board of Trustees.
Issuers of municipal commercial paper rated "P-1" have a
"superior capacity for repayment of short-term promissory obligations". The
"A-1" rating for commercial paper under the S&P classification indicates that
the "degree of safety regarding timely payment is either overwhelming or very
strong." Commercial paper with "overwhelming safety characteristics" will be
rated "A-1+". Commercial paper receiving a "P-2" rating has a strong capacity
for repayment of short-term promissory obligations. Commercial paper rated "A-2"
has the capacity for timely payment although the relative degree of safety is
not as overwhelming as for issues designated "A-1". See the Appendix for a more
complete description of securities ratings.
MUNICIPAL NOTES (All Funds). Municipal notes are generally sold
as interim financing in anticipation of the collection of taxes, a bond sale or
receipt of other revenue. Municipal notes generally have maturities at the time
of issuance of one year or less. Investments in municipal notes are limited to
notes which are rated at the date of purchase: (i) MIG 1 or MIG 2 by Moody's and
in a comparable rating category by at least one other nationally recognized
statistical rating organization that has rated the notes, or (ii) in a
comparable rating category by only one such organization, including Moody's, if
it is the only organization that has rated the notes, or (iii) if not rated,
are, in the opinion of IBJS, of comparable investment quality and within the
credit quality policies and guidelines established by the Board of Trustees.
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Notes rated "MIG 1" are judged to be of the "best quality" and
carry the smallest amount of investment risk. Notes rated "MIG 2" are judged to
be of "high quality, with margins of protection ample although not as large as
in the preceding group."
MUNICIPAL BONDS (All Funds). Municipal bonds generally have a
maturity at the time of issuance of more than one year. Municipal bonds may be
issued to raise money for various public purposes -- such as constructing public
facilities and making loans to public institutions. There are generally two
types of municipal bonds: general obligation bonds and revenue bonds. General
obligation bonds are backed by the taxing power of the issuing municipality and
are considered the safest type of municipal bond. Revenue bonds are backed by
the revenues of a project or facility -- tolls from a toll road, for example.
Certain types of municipal bonds are issued to obtain funding for privately
operated facilities. Industrial development revenue bonds (which are private
activity bonds) are a specific type of revenue bond backed by the credit and
security of a private user, and therefore investments in these bonds have more
potential risk. Investments in municipal bonds are limited to bonds which are
rated at the date of purchase "A" or better by a NRSRO. Municipal bonds
generally have a maturity at the time of issuance of more than one year.
OPTIONS ON SECURITIES (Bond Fund, Core Equity Fund and Growth and
Income Fund). The Funds may purchase put and call options and write covered put
and call options on securities in which each Fund may invest directly and that
are traded on registered domestic securities exchanges or that result from
separate, privately negotiated transactions (i.e., over-the-counter (OTC)
options). The writer of a call option, who receives a premium, has the
obligation, upon exercise, to deliver the underlying security against payment of
the exercise price during the option period. The writer of a put, who receives a
premium, has the obligation to buy the underlying security, upon exercise, at
the exercise price during the option period.
The Funds may write put and call options on securities only if
they are covered, and such options must remain covered as long as the Fund is
obligated as a writer. A call option is covered if a Fund owns the underlying
security covered by the call or has an absolute and immediate right to acquire
that security without additional cash consideration (or for additional cash
consideration if the underlying security is held in a segregated account by its
custodian) upon conversion or exchange of other securities held in its
portfolio. A put option is covered if a Fund maintains cash, U.S. Treasury bills
or other high grade short-term obligations with a value equal to the exercise
price in a segregated account with its custodian.
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<PAGE>
The principal reason for writing put and call options is to
attempt to realize, through the receipt of premiums, a greater current return
than would be realized on the underlying securities alone. In return for the
premium received for a call option, the Funds forego the opportunity for profit
from a price increase in the underlying security above the exercise price so
long as the option remains open, but retain the risk of loss should the price of
the security decline. In return for the premium received for a put option, the
Funds assume the risk that the price of the underlying security will decline
below the exercise price, in which case the put would be exercised and the Fund
would suffer a loss. The Funds may purchase put options in an effort to protect
the value of a security it owns against a possible decline in market value.
Writing of options involves the risk that there will be no market
in which to effect a closing transaction. An exchange-traded option may be
closed out only on an exchange that provides a secondary market for an option of
the same series. OTC options are not generally terminable at the option of the
writer and may be closed out only by negotiation with the holder. There is also
no assurance that a liquid secondary market on an exchange will exist. In
addition, because OTC options are issued in privately negotiated transactions
exempt from registration under the Securities Act of 1933, there is no assurance
that the Funds will succeed in negotiating a closing out of a particular OTC
option at any particular time. If a Fund, as covered call option writer, is
unable to effect a closing purchase transaction in the secondary market or
otherwise, it will not be able to sell the underlying security until the option
expires or it delivers the underlying security upon exercise.
The staff of the SEC has taken the position that purchased
options not traded on registered domestic securities exchanges and the assets
used as cover for written options not traded on such exchanges are generally
illiquid securities. However, the staff has also opined that, to the extent a
mutual fund sells an OTC option to a primary dealer that it considers
creditworthy and contracts with such primary dealer to establish a formula price
at which the fund would have the absolute right to repurchase the option, the
fund would only be required to treat as illiquid the portion of the assets used
to cover such option equal to the formula price minus the amount by which the
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option is in-the-money. Pending resolution of the issue, the Funds will treat
such options and, except to the extent permitted through the procedure described
in the preceding sentence, assets as subject to each such Fund's limitation on
investments in securities that are not readily marketable.
FUTURES, RELATED OPTIONS AND OPTIONS ON STOCK INDICES (Bond Fund,
Core Equity Fund and Growth and Income Fund). Each Fund may attempt to reduce
the risk of investment in equity securities by hedging a portion of its
portfolio through the use of certain futures transactions, options on futures
traded on a board of trade and options on stock indices traded on national
securities exchanges. In addition, each Fund may hedge a portion of its
portfolio by purchasing such instruments during a market advance or when IBJS
anticipates an advance. In attempting to hedge a portfolio, a Fund may enter
into contracts for the future delivery of securities and futures contracts based
on a specific security, class of securities or an index, purchase or sell
options on any such futures contracts, and engage in related closing
transactions. Each Fund will use these instruments primarily as a hedge against
changes resulting from market conditions in the values of securities held in its
portfolio or which it intends to purchase.
A stock index assigns relative weighting to the common stocks in
the index, and the index generally fluctuates with changes in the market values
of these stocks. A stock index futures contract is an agreement in which one
party agrees to deliver to the other an amount of cash equal to a specific
dollar amount times the difference between the value of a specific stock index
at the close of the last trading day of the contract and the price at which the
agreement is made. Each Fund will sell stock index futures only if the amount
resulting from the multiplication of the then current level of the indices upon
which such futures contracts are based, and the number of futures contracts
which would be outstanding, do not exceed one-third of the value of the Fund's
net assets.
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<PAGE>
When a futures contract is executed, each party deposits with a
broker or in a segregated custodial account up to 5% of the contract amount,
called the "initial margin," and during the term of the contract, the amount of
the deposit is adjusted based on the current value of the futures contract by
payments of variation margin to or from the broker or segregated account.
In the case of options on stock index futures, the holder of the
option pays a premium and receives the right, upon exercise of the option at a
specified price during the option period, to assume the option writer's position
in a stock index futures contract. If the option is exercised by the holder
before the last trading day during the option period, the option writer delivers
the futures position, as well as any balance in the writer's futures margin
account. If it is exercised on the last trading day, the option writer delivers
to the option holder cash in an amount equal to the difference between the
option exercise price and the closing level of the relevant index on the date
the option expires. In the case of options on stock indexes, the holder of the
option pays a premium and receives the right, upon exercise of the option at a
specified price during the option period, to receive cash equal to the dollar
amount of the difference between the closing price of the relevant index and the
option exercise price times a specified multiple, called the "multiplier."
During a market decline or when IBJS anticipates a decline, each
Fund may hedge a portion of its portfolio by selling futures contracts or
purchasing puts on such contracts or on a stock index in order to limit exposure
to the decline. This provides an alternative to liquidation of securities
positions and the corresponding costs of such liquidation. Conversely, during a
market advance or when IBJS anticipates an advance, each Fund may hedge a
portion of its portfolio by purchasing futures, options on these futures or
options on stock indices. This affords a hedge against a Fund not participating
in a market advance at a time when it is not fully invested and serves as a
temporary substitute for the purchase of individual securities which may later
be purchased in a more advantageous manner. Each Fund will sell options on
futures and on stock indices only to close out existing positions.
-13-
<PAGE>
INTEREST RATE FUTURES CONTRACTS (Bond Fund, Core Equity Fund and
Growth and Income Fund). These Funds may, to a limited extent, enter into
interest rate futures contracts--i.e., contracts for the future delivery of
securities or index-based futures contracts--that are, in the opinion of IBJS,
sufficiently correlated with the Fund's portfolio. These investments will be
made primarily in an attempt to protect a Fund against the effects of adverse
changes in interest rates (i.e., "hedging"). When interest rates are increasing
and portfolio values are falling, the sale of futures contracts can offset a
decline in the value of a Fund's current portfolio securities. The Funds will
engage in such transactions primarily for bona fide hedging purposes.
OPTIONS ON INTEREST RATE FUTURES CONTRACTS (Bond Fund, Core
Equity Fund and Growth and Income Fund). These Funds may purchase put and call
options on interest rate futures contracts, which give a Fund the right to sell
or purchase the underlying futures contract for a specified price upon exercise
of the option at any time during the option period. Each Fund may also write
(sell) put and call options on such futures contracts. For options on interest
rate futures that a Fund writes, such Fund will receive a premium in return for
granting to the buyer the right to sell to the Fund or to buy from the Fund the
underlying futures contract for a specified price at any time during the option
period. As with futures contracts, each Fund will purchase or sell options on
interest rate futures contracts primarily for bona fide hedging purposes.
RISKS OF OPTIONS AND FUTURES CONTRACTS. One risk involved in the
purchase and sale of futures and options is that a Fund may not be able to
effect closing transactions at a time when it wishes to do so. Positions in
futures contracts and options on futures contracts may be closed out only on an
exchange or board of trade that provides an active market for them, and there
can be no assurance that a liquid market will exist for the contract or the
option at any particular time. To mitigate this risk, each Fund will ordinarily
purchase and write options only if a secondary market for the options exists on
a national securities exchange or in the over-the-counter market. Another risk
is that during the option period, if a Fund has written a covered call option,
it will have given up the opportunity to profit from a price increase in the
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underlying securities above the exercise price in return for the premium on the
option (although the premium can be used to offset any losses or add to a Fund's
income) but, as long as its obligation as a writer continues, such Fund will
have retained the risk of loss should the price of the underlying security
decline. Investors should note that because of the volatility of the market
value of the underlying security, the loss from investing in futures
transactions is potentially unlimited. In addition, a Fund has no control over
the time when it may be required to fulfill its obligation as a writer of the
option. Once a Fund has received an exercise notice, it cannot effect a closing
transaction in order to terminate its obligation under the option and must
deliver the underlying securities at the exercise price.
The Funds' successful use of stock index futures contracts,
options on such contracts and options on indices depends upon the ability of
IBJS to predict the direction of the market and is subject to various additional
risks. The correlation between movements in the price of the futures contract
and the price of the securities being hedged is imperfect and the risk from
imperfect correlation increases in the case of stock index futures as the
composition of the Funds' portfolios diverge from the composition of the
relevant index. Such imperfect correlation may prevent the Funds from achieving
the intended hedge or may expose the Funds to risk of loss. In addition, if the
Funds purchase futures to hedge against market advances before they can invest
in common stock in an advantageous manner and the market declines, the Funds
might create a loss on the futures contract. Particularly in the case of options
on stock index futures and on stock indices, the Funds' ability to establish and
maintain positions will depend on market liquidity. The successful utilization
of options and futures transactions requires skills different from those needed
in the selection of the Funds' portfolio securities. The Funds believe that IBJS
possesses the skills necessary for the successful utilization of such
transactions.
The Funds are permitted to engage in bona fide hedging
transactions (as defined in the rules and regulations of the Commodity Futures
Trading Commission) without any quantitative limitations. Futures and related
option transactions which are not for bona fide hedging purposes may be used
provided the total amount of the initial margin and any option premiums
attributable to such positions does not exceed 5% of each Fund's liquidating
value after taking into account unrealized profits and unrealized losses, and
excluding any in-the-money option premiums paid. The Funds will not market, and
are not marketing, themselves as commodity pools or otherwise as vehicles for
trading in futures and related options. The Funds will segregate liquid assets
such as cash, U.S. Government securities or other liquid high grade debt
obligations to cover the futures and options.
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<PAGE>
INVESTMENT RESTRICTIONS
The following restrictions, all of which are fundamental
policies, restate or are in addition to those described under "Investment
Restrictions" in the Prospectuses.
Each Fund, except as indicated, may not:
(1) Invest more than 15% (10% with respect to the Money Market
Fund) of the value of its net assets in investments which are illiquid
(including repurchase agreements having maturities of more than seven calendar
days, variable and floating rate demand and master demand notes not requiring
receipt of principal note amount within seven days notice and securities of
foreign issuers which are not listed on a recognized domestic or foreign
securities exchange);
(2) Borrow money or pledge, mortgage or hypothecate its assets,
except that a Fund may enter into reverse repurchase agreements or borrow from
banks up to 10% of the current value of its net assets for temporary or
emergency purposes and those borrowings may be secured by the pledge of not more
than 15% of the current value of its total net assets (but investments may not
be purchased by the Fund while any such borrowings exist);
(3) Issue senior securities, except insofar as a Fund may be
deemed to have issued a senior security in connection with any repurchase
agreement or any permitted borrowing;
(4) Make loans, except loans of portfolio securities and except
that a Fund may enter into repurchase agreements with respect to its portfolio
securities and may purchase the types of debt instruments described in its
Prospectus or the SAI;
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<PAGE>
(5) Invest in companies for the purpose of exercising control or
management;
(6) Invest more than 10% of its net assets in shares of other
investment companies;
(7) Invest in real property (including limited partnership
interests but excluding real estate investment trusts and master limited
partnerships), commodities, commodity contracts, or oil, gas and other mineral
resource, exploration, development, lease or arbitrage transactions;
(8) Engage in the business of underwriting securities of other
issuers, except to the extent that the disposal of an investment position may
technically cause it to be considered an underwriter as that term is defined
under the Securities Act of 1933;
(9) Sell securities short, except to the extent that a Fund
contemporaneously owns or has the right to acquire at no additional cost
securities identical to those sold short;
(10) Purchase securities on margin, except that a Fund may obtain
such short-term credits as may be necessary for the clearance of purchases and
sales of securities;
(11) Purchase or retain the securities of any issuer, if those
individual officers and Trustees of the Trust, IBJS, the Sponsor, or the
Distributor, each owning beneficially more than 1/2 of 1% of the securities of
such issuer, together own more than 5% of the securities of such issuer;
(12) Purchase a security if, as a result, more than 25% of the
value of its total assets would be invested in securities of one or more issuers
conducting their principal business activities in the same industry, provided
that (a) this limitation shall not apply to obligations issued or guaranteed by
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the U.S. Government or its agencies and instrumentalities; (b) wholly owned
finance companies will be considered to be in the industries of
their parents; and (c) utilities will be divided according to their services.
For example, gas, gas transmission, electric and gas, electric, and telephone
will each be considered a separate industry;
(13) Invest more than 5% of its net assets in warrants which are
unattached to securities, included within that amount, no more than 2% of the
value of the Fund's net assets, may be warrants which are not listed on the New
York or American Stock Exchanges;
(14) Write, purchase or sell puts, calls or combinations thereof,
except that the Income, Stock and Growth and Income Funds may purchase or sell
puts and calls as otherwise described in the Prospectus or SAI; however, no Fund
will invest more than 5% of its total assets in these classes of securities for
purposes other than bona fide hedging; or
(15) Invest more than 5% of the current value of its total assets
in the securities of companies which, including predecessors, have a record of
less than three years' continuous operation.
MANAGEMENT
TRUSTEES AND OFFICERS
The principal occupations of the Trustees and executive officers
of the Trust for the past five years as well as ages are listed below. The
address of each, unless otherwise indicated, is 230 Park Avenue, New York, New
York 10169. Trustees deemed to be "interested persons" of the Trust for purposes
of the 1940 Act are indicated by an asterisk.
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<PAGE>
*JOHN J. PILEGGI, TRUSTEE and PRESIDENT; Director of Furman Selz LLC since 1994;
Senior Managing Director of Furman Selz LLC (1992-1994); Managing Director of
Furman Selz LLC (1984-1992); Age: 37
ROBERT H. DUNKER, TRUSTEE, (Retired); formerly, Executive Vice President, Trust
Administration, First Fidelity Bank, N.A., New Jersey; Director, E.J. Brooks
Co.; Trustee, Hanover Funds, Inc. (registered investment company); 410 NE
Plantation Road #322, Stuart, FL 34996; Age: 65
STEPHEN V.R. GOODHUE, TRUSTEE; Retired; 237 Mount Holly Road, Katonah, New York
10536; Age: 67
EDWARD F. RYAN, TRUSTEE; Member, Arbitration Committee, New York Stock Exchange
(5/85-11/91); Member, Advisory Board, MBW Venture Capital Partners Limited
Partnership (5/84-Present); Director, Financial News Network Inc. (12/83-7/92);
Director, Data Broadcasting Corporation (7/92-12/93);177 Highland Avenue, Short
Hills, New Jersey 07078; Age: 73
GEORGE H. STEWART, TRUSTEE AND CHAIRMAN; (Retired); formerly, Vice President and
Treasurer, Ciba-Geigy Corporation; 12380 Harbor Ridge Road, Palm City, Florida
34990; Age: 64
GORDON M. FORRESTER, VICE PRESIDENT AND TREASURER; Managing Director of Furman
Selz LLC since 1995; Director of Furman Selz LLC from 1994 to 1995; Associate
Director of Furman Selz prior to 1994; Age: 35
JOAN V. FIORE, VICE PRESIDENT AND SECRETARY, Managing Director and Counsel of
Furman Selz LLC since 1991; Attorney at the U.S. Securities and Exchange
Commission, Division of Investment Management (1986-1991); Age: 39
SHERYL HIRSCHFELD, ASSISTANT SECRETARY, Director of Corporate Secretary Services
of Furman Selz LLC since 1994; Assistant to Corporate Secretary and General
Counsel of the Dreyfus Corporation (1982-1994); Age: 35
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Trustees of the Trust not affiliated with the Sponsor receive
from the Trust an annual retainer of $3,000 and a fee of $500 for each Board of
Trustees meeting and $500 for each Board committee meeting of the Trust attended
and are reimbursed for all out-of-pocket expenses relating to attendance at such
meetings. Trustees who are affiliated with the Sponsor do not receive
compensation from the Trust.
<TABLE>
<CAPTION>
Compensation Table*
PENSION OR
RETIREMENT
BENEFITS TOTAL
AGGREGATE ACCRUED AS COMPENSATION
COMPENSATION PART OF ESTIMATED FROM THE
FROM THE TRUST ANNUAL BENEFITS FUND
NAME OF PERSON, POSITION TRUST EXPENSES UPON RETIREMENT COMPLEX
- ------------------------ ----- -------- --------------- -------
<S> <C> <C> <C>
Robert H. Dunker, Trustee $4,000 0 N/A $4,000
Stephen V.R. Goodhue, Trustee 4,000 0 N/A . 4,000
Edward F. Ryan, Trustee 4,000 0 N/A . 4,000
George Stewart, Trustee 4,000 0 N/A 4,000
</TABLE>
- ----------------
* The total compensation estimated to be paid to such persons during a full
fiscal year would be $5,500.
As of the date of this SAI, Officers and Trustees of the Trust, as
a group, own less than 1% of the outstanding shares of the Funds.
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INVESTMENT ADVISER
IBJ SCHRODER BANK & TRUST COMPANY
IBJ Schroder Bank & Trust Company provides investment advisory
services to the Funds pursuant to an Advisory Agreement with the Trust (the
"Advisory Agreement"). Subject to such policies as the Trust's Board of Trustees
may determine, IBJS makes investment decisions for the Funds. The Advisory
Agreement provides that, as compensation for services thereunder, IBJS is
entitled to receive from each Fund it manages a monthly fee at an annual rate
based upon average daily net assets of the Fund as set forth in the table of
Fund Expenses in the Prospectus. For the period from February 1, 1995
(commencement of operations) to November 30, 1995, IBJS earned investment
advisory fees of $74,958, $96,897, $387,797 and $214,009 for the Reserve Money
Market Fund, Bond Fund, Core Equity Fund and Growth and Income Fund,
respectively. For the same period, IBJS has voluntarily waived investment
advisory fees of $11,703, $19,383, $64,441 and $35,817, for the Reserve Money
Market Fund, Bond Fund, Core Equity Fund and Growth and Income Fund,
respectively.
The Adviser voluntarily agreed to cap the expense ratio of the
Reserve Money Market Fund at 0.64% for the first year. In order to maintain this
ratio the adviser has agreed to reimburse $46,886 to the Fund.
IBJS, formed in 1929, provides banking, trust and investment
services to individuals and institutions. It is 98.3% owned by The Industrial
Bank of Japan, Limited (and 1.7% owned by Schroder Incorporated). IBJS acts as
the investment adviser to a wide variety of trusts, individuals, institutions
and corporation. Its investment management responsibilities, as of December 31,
1995, included accounts with aggregate assets of approximately $1.5 billion. The
principal business address of IBJS is One State Street, New York, New York
10004.
The Investment Advisory Contracts for the Funds will continue in
effect for a period beyond two years from the date of their execution only as
long as such continuance is approved annually (i) by the holders of a majority
of the outstanding voting securities of the Funds or by the Board of Trustees
and (ii) by a majority of the Trustees who are not parties to such Contract or
"interested persons" (as defined in the 1940 Act) of any such party. The
Contracts may be terminated without penalty by vote of the Trustees or the
shareholders of the Funds, or by IBJS, on 60 days written notice by either party
to the Contract and will terminate automatically if assigned.
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DISTRIBUTION OF FUND SHARES
The Trust retains IBJ Funds Distributor, Inc., to serve as
principal underwriter for the shares of the Funds pursuant to a Distribution
Contract. The Distribution Contract provides that the Distributor will use its
best efforts to maintain a broad distribution of the Funds' shares among bona
fide investors and may enter into selling group agreements with responsible
dealers and dealer managers as well as sell the Funds' shares to individual
investors. The Distributor is not obligated to sell any specific amount of
shares.
DISTRIBUTION PLAN
The Trustees of the Fund have voted to adopt a Master
Distribution Plan (the "Plan") pursuant to Rule l2b-1 of the Investment Company
Act of 1940 (the "1940 Act") for the Premium class shares of the Fund after
having concluded that there is a reasonable likelihood that the Plan will
benefit the Fund and its Premium class shareholders. The Plan provides for a
monthly payment by the Premium class shares of the Fund to the Distributor in
such amounts that the Distributor may request or for direct payment by the
Premium class shares of the Fund, for certain costs incurred under the Plan,
subject to periodic Board approval, provided that each such payment is based on
the average daily value of the Fund's net assets during the preceding month and
is calculated at an annual rate not to exceed 0.35%. (Certain expenses of the
Fund may be reduced in accordance with applicable state expense limitations. See
"Fees and Expenses").
The Distributor will use all amounts received under the Plan for
payments to broker-dealers or financial institutions (but not including banks)
for their assistance in distributing shares of the Fund and otherwise promoting
the sale of Fund shares, including payments in amounts based on the average
daily value of Fund shares owned by shareholders in respect of which the
broker-dealer or financial institution has a distributing relationship. The
Distributor may also use all or any portion of such fees to pay Fund expenses
such as the printing and distribution of prospectuses sent to prospective
investors; the preparation, printing and distribution of sales literature and
expenses associated with media advertisements.
The Plan provides for the Distributor to prepare and submit to
the Board of Trustees on a quarterly basis written reports of all amounts
expended pursuant to the Plan and the purpose for which such expenditures were
made. The Plan provides that it may not be amended to increase materially the
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costs which the Premium class shares of the Fund may bear pursuant to the Plan
without shareholder approval and that other material amendments of the Plan must
be approved by the Board of Trustees, and by the Trustees who neither are
"interested persons" (as defined in the 1940 Act) of the Trust nor have any
direct or indirect financial interest in the operation of the Plan or in any
related agreement, by vote cast in person at a meeting called for the purpose of
considering such amendments. The selection and nomination of the Trustees of the
Trust has been committed to the discretion of the Trustees who are not
"interested persons" of the Trust.
The Plan and the related Administrative Services Contract between
the Trust and the Sponsor are subject to annual approval, by the Board of
Trustees and by the Trustees who neither are "interested persons" nor have any
direct or indirect financial interest in the operation of the Plan or in the
Administrative Services Contract, by vote cast in person at a meeting called for
the purpose of voting on the Plan. The Board of Trustees of the Trust approved
the Plan at a meeting held on December 21, 1995. The Plan was submitted to the
shareholders of the Premium class shares of the Fund and approved at a special
meeting held on November 17, 1994. The Plan is terminable with respect to the
Fund at any time by a vote of a majority of the Trustees who are not "interested
persons" of the Trust and who have no direct or indirect financial interest in
the operation of the Plan or in the Administrative Services Contract or by vote
of the holders of a majority of the shares of the Fund. No payments were made
pursuant to the Plan on behalf of any of the Funds during the period from
February 1, 1995 (commencement of operations) to November 30, 1995.
ADMINISTRATIVE SERVICES
Furman Selz provides management and administrative services
necessary for the operation of the Funds, including among other things, (i)
preparation of shareholder reports and communications, (ii) regulatory
compliance, such as reports to and filings with the Securities and Exchange
Commission ("SEC") and state securities commissions and (iii) general
supervision of the operation of the Funds, including coordination of the
services performed by IBJS, the Distributor, transfer agent, custodians,
independent accountants, legal counsel and others. In addition, Furman Selz
furnishes office space and facilities required for conducting the business of
the Funds and pays the compensation of the Funds' officers, employees and
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<PAGE>
Trustees affiliated with Furman Selz. For these services, Furman Selz receives
from each Fund a fee, payable monthly, at the annual rate of 0.15% of each
Fund's average daily net assets. For the period from February 1, 1995
(commencement of Operations) to November 30,1995, Furman Selz earned
Administrative Services fees of $31,630, $29,070, $97,007 and $53,463 for the
Reserve Money Market Fund, Bond Fund, Core Equity Fund and Growth and Income
Fund, respectively. Pursuant to a Fund Accounting Agreement between the Trust
and the Administrator, the Administrator assists the Trust in calculating net
asset values and provides certain other accounting services for each Fund
described therein, for an annual fee of $30,000 per Fund plus out of pocket
expenses. For the period from February 1, 1995 (commencement of operations) to
November 30, 1995, Furman Selz earned Fund Accounting fees and expenses of
$26,667, $30,757, $27,854 and $40,164 for the Reserve Money Market Fund, Bond
Fund, Core Equity Fund and Growth and Income Fund, respectively. Pursuant to a
Services Agreement between the Trust and the Administrator, Furman Selz assists
the Trust with certain transfer and dividend disbursing agent functions and
receives a fee of $15 per account per year per fund plus out of pocket expenses.
The Administrative Services Contract is terminable with respect
to the Funds without penalty, at any time, by vote of a majority of the Trustees
who are not "interested persons" of the Trust and who have no direct or indirect
financial interest in the operation of the Administrative Services Contract upon
not more than 60 days written notice to the Administrator or by vote of the
holders of a majority of the shares of the Funds, or, upon 60 days notice, by
the Administrator. The Administrative Services Contract will terminate
automatically in the event of its assignment.
SERVICE ORGANIZATIONS
For Premium Class Shareholders, the Trust also contracts with
banks (including IBJS), trust companies, broker-dealers (other than Furman Selz)
or other financial organizations ("Service Organizations") to provide certain
administrative services for the Funds. Services provided by Service
Organizations may include among other things: providing necessary personnel and
facilities to establish and maintain certain shareholder accounts and records;
assisting in processing purchase and redemption transactions; arranging for the
wiring of funds; transmitting and receiving funds in connection with
shareholders orders to purchase or redeem shares; verifying and guaranteeing
client signatures in connection with redemption orders, transfers among and
changes in shareholders designating accounts; providing periodic statements
showing a shareholder's account balance and, to the extent practicable,
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<PAGE>
integrating such information with other client transactions; furnishing periodic
and annual statements and confirmations of all purchases and redemptions of
shares in a shareholder's account; transmitting proxy statements, annual
reports, and updating prospectuses and other communications from the Funds to
shareholders; and providing such other services as the Funds or a shareholder
reasonably may request, to the extent permitted by applicable statute, rule or
regulation. The payments will not exceed on an annualized basis an amount equal
to 0.50% of the average daily value during the month of Fund shares owned by
customers in subaccounts of which the Service Organization is record owner as
nominee for its customers. Neither Furman Selz, nor the Distributor will be a
Service Organization or receive fees for servicing.
The Glass-Steagall Act and other applicable laws, among other
things, prohibit banks from engaging in the business of underwriting, selling or
distributing securities. There currently is no precedent prohibiting banks from
performing administrative and shareholder servicing functions as Service
Organizations. However, judicial or administrative decisions or interpretations
of such laws, as well as changes in either Federal or state statutes or
regulations relating to the permissible activities of banks and their
subsidiaries or affiliates, could prevent a bank from continuing to perform all
or a part of its servicing activities. In addition, state securities laws on
this issue may differ from the interpretations of federal law expressed herein
and banks and financial institutions may be required to register as dealers
pursuant to state law.
If a bank were prohibited from so acting, its shareholder clients
would be permitted to remain shareholders of the Trust and alternative means for
continuing the servicing of such shareholders would be sought. In that event,
changes in the operation of the Trust might occur and a shareholder serviced by
such a bank might no longer be able to avail itself of any services then being
provided by the bank. It is not expected that shareholders would suffer any
adverse financial consequences as a result of any of these occurrences.
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<PAGE>
EXPENSES AND EXPENSE LIMITS
Currently, California is the only state imposing limitations on
the expenses of the Funds. Those expense limitations are 2-1/2 percent of the
first $30 million of a Fund's average net assets, 2 percent of the next $70
million and 1-1/2 percent of a Fund's remaining average net assets. If in any
fiscal year expenses of the Funds (excluding taxes, interest, expenses under the
Plan, brokerage commissions and other portfolio transaction expenses, other
expenditures which are capitalized in accordance with generally accepted
accounting principles and extraordinary expenses, but including the advisory and
administrative fees) exceed the expense limitations applicable to the Funds
imposed by the securities regulations of any state, IBJS will reimburse the
Funds for the excess.
Except for the expenses paid by the IBJS and Furman Selz, the
Funds bear all costs of their operations.
DETERMINATION OF NET ASSET VALUE
As indicated under "Fund Share Valuation" in the applicable
Prospectus, the Money Market Fund uses the amortized cost method to determine
the value of their portfolio securities pursuant to Rule 2a-7 under the 1940
Act. The amortized cost method involves valuing a security at its cost and
amortizing any discount or premium over the period until maturity regardless of
the impact of fluctuating interest rates on the market value of the security.
While this method provides certainty in valuation, it may result in periods
during which the value, as determined by amortized cost, is higher or lower than
the price which the Funds would receive if the security were sold. During these
periods, the yield to a shareholder may differ somewhat from that which could be
obtained from a similar fund which utilizes a method of valuation based upon
market prices. Thus, during periods of declining interest rates, if the use of
the amortized cost method resulted in lower value of a Fund's portfolio on a
particular day, a prospective investor in the Fund would be able to obtain a
somewhat higher yield than would result from an investment in a fund utilizing
solely market values and existing Fund shareholders would receive
correspondingly less income. The converse would apply during periods of rising
interest rates.
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Rule 2a-7 provides that in order to value its portfolio using the
amortized cost method, each Money Market Fund must maintain a dollar-weighted
average portfolio maturity of 90 days or less, purchase securities having
remaining maturities of 397 days or less and invest only in U.S. dollar
denominated eligible securities determined by the Trust's Board of Trustees to
be of minimal credit risks and which (1) have received the highest short-term
rating by at least two NATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATIONS
("NRSROS"), such as "A-1" by Standard & Poor's and "P-1" by Moody's; (2) are
single rated and have received the highest short-term rating by a NRSRO; or (3)
are unrated, but are determined to be of comparable quality by the Adviser
pursuant to guidelines approved by the Board and subject to the ratification of
the Board.
In addition, a Fund will not invest more than 5% of its total
assets in the securities (including the securities collateralizing a repurchase
agreement) of, or subject to puts issued by, a single issuer, except that, a
Fund may invest in U.S. Government securities or repurchase agreements that are
collateralized by U.S. Government securities without any such limitation, and
the limitation with respect to puts does not apply to unconditional puts if no
more than 10% of a Fund's total assets are invested in securities issued or
guaranteed by the issuer of the unconditional put. Investments in rated
securities not rated in the highest category by at least two rating
organizations (or one rating organization if the instrument was rated by only
one such organization), and unrated securities not determined by the Board of
Trustees to be comparable to those rated in the highest rating category, will be
limited to 5% of a Fund's total assets, with investment in any one such issuer
being limited to no more than the greater of 1% of a Fund's total assets or
$1,000,000.
Pursuant to Rule 2a-7, the Board of Trustees is also required to
establish procedures designed to stabilize, to the extent reasonably possible,
the price per share of the Funds, as computed for the purpose of sales and
redemptions, at $1.00. Such procedures include review of the Fund's portfolio
holdings by the Board of Trustees, at such intervals as it may deem appropriate,
to determine whether the net asset value of the Funds calculated by using
available market quotations deviates from $l.00 per share based on amortized
cost. The extent of any deviation will be examined by the Board of Trustees. If
such deviation exceeds 1/2 of 1%, the Board of Trustees will promptly consider
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what action, if any, will be initiated. In the event the Board of
Trustees determines that a deviation exists which may result in material
dilution or other unfair results to investors or existing shareholders, the
Board of Trustees will take such corrective action as it regards as necessary
and appropriate, which may include selling portfolio instruments prior to
maturity to realize capital gains or losses or to shorten average portfolio
maturity, withholding dividends or establishing a net asset value per share by
using available market quotations.
The Non-Money Market Funds value their portfolio securities in
accordance with the procedures described in the Prospectus.
PORTFOLIO TRANSACTIONS
Investment decisions for the Funds and for the other investment
advisory clients of IBJS are made with a view to achieving their respective
investment objectives. Investment decisions are the product of many factors in
addition to basic suitability for the particular client involved. Thus, a
particular security may be bought or sold for certain clients even though it
could have been bought or sold for other clients at the same time. Likewise, a
particular security may be bought for one or more clients when one or more
clients are selling the security. In some instances, one client may sell a
particular security to another client. It also sometimes happens that two or
more clients simultaneously purchase or sell the same security, in which event
each day's transactions in such security are, insofar as possible, averaged as
to price and allocated between such clients in a manner which in the opinion of
IBJS is equitable to each and in accordance with the amount being purchased or
sold by each. There may be circumstances when purchases or sales of portfolio
securities for one or more clients will have an adverse effect on other clients.
The Funds have no obligation to deal with any dealer or group of
dealers in the execution of transactions in portfolio securities. Subject to
policies established by the Trust's Board of Trustees, IBJS is primarily
responsible for portfolio decisions and the placing of portfolio transactions.
In placing orders, it is the policy of the Funds to obtain the best results
taking into account the broker-dealer's general execution and operational
facilities, the type of transaction involved and other factors such as the
dealer's risk in positioning the securities. While generally seek reasonably
competitive spreads or commissions, the Funds will not necessarily be paying the
lowest spread or commission available.
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Purchases and sales of securities will often be principal
transactions in the case of debt securities and equity securities traded
otherwise than on an exchange. The purchase or sale of equity securities will
frequently involve the payment of a commission to a broker-dealer who effects
the transaction on behalf of a Fund. Debt securities normally will be purchased
or sold from or to issuers directly or to dealers serving as market makers for
the securities at a net price. Generally, money market securities are traded on
a net basis and do not involve brokerage commissions.
The cost of executing portfolio securities transactions for the
Money Market Fund primarily consists of dealer spreads and underwriting
commissions. Under the 1940 Act, persons affiliated with the Funds or the
Sponsor are prohibited from dealing with the Funds as a principal in the
purchase and sale of securities unless a permissive order allowing such
transactions is obtained from the SEC.
IBJS may, in circumstances in which two or more broker-dealers
are in a position to offer comparable results, give preference to a dealer which
has provided statistical or other research services to IBJS. By allocating
transactions in this manner, IBJS is able to supplement its research and
analysis with the views and information of securities firms. These items, which
in some cases may also be purchased for cash, include such matters as general
economic and securities market reviews, industry and company reviews,
evaluations of securities and recommendations as to the purchase and sale of
securities.
Some of these services are of value to IBJS in advising various
of their clients (including the Funds), although not all of these services are
necessarily useful and of value in managing the Funds. The management fee paid
by the Funds is not reduced because IBJS or its affiliates receive such
services.
As permitted by Section 28(e) of the Securities Exchange Act of
1934 (the "Act"), IBJS may cause the Funds to pay a broker-dealer which provides
"brokerage and research services" (as defined in the Act) to IBJS an amount of
disclosed commission for effecting a securities transaction for the Funds in
excess of the commission which another broker-dealer would have charged for
effecting that transaction.
Consistent with the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. and subject to seeking the most
favorable price and execution available and such other policies as the Trustees
may determine, IBJS may consider sales of shares of the Funds as a factor in the
selection of broker-dealers to execute portfolio transactions for the Funds.
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For the period from February 1, 1995 (commencement of operations)
to November 30, 1995,$0, $0, $110,373 and $40,160 in brokerage commissions were
paid on behalf of the Reserve Money Market Fund, Bond Fund, Core Equity Fund and
Growth and Income Fund, respectively.
PORTFOLIO TURNOVER
Changes may be made in the portfolio consistent with the
investment objectives and policies of the Funds whenever such changes are
believed to be in the best interests of the Funds and their shareholders. It is
anticipated that the annual portfolio turnover rate normally will not exceed the
amounts stated in the Funds' Prospectuses. The portfolio turnover rate is
calculated by dividing the lesser of purchases or sales of portfolio securities
by the average monthly value of the Fund's portfolio securities. For purposes of
this calculation, portfolio securities exclude all securities having a maturity
when purchased of one year or less. The portfolio turnover rate for the Bond
Fund, Core Equity Fund and Growth and Income Fund for the period from February
1, 1995 (commencement of operations) to November 30, 1995 was 297%, 37%, and
78%, respectively.
TAXATION
The Fund has elected to be treated as a regulated investment
company and qualifies as such for the fiscal year ended November 30, 1995. The
Fund intends to continue to qualify by complying with the provisions of
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). To
qualify as a regulated investment company, a Fund must (a) distribute to
shareholders at least 90% of its investment company taxable income (which
includes, among other items, dividends, taxable interest and the excess of net
short-term capital gains over net long-term capital losses); (b) derive in each
taxable year at least 90% of its gross income from dividends, interest, payments
with respect to securities loans and gains from the sale or other disposition of
stock, securities or foreign currencies or other income derived with respect to
its business of investing in such stock, securities or currencies; (c) derive
less than 30% of its gross income from the sale or other disposition of certain
assets (namely, (i) stock or securities; (ii) options, futures, and forward
contracts (other than those on foreign currencies), and (iii) foreign currencies
(including options, futures, and forward contracts on such currencies) not
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directly related to the Fund's principal business of investing in stock or
securities (or options and futures with respect to stocks or securities)) held
less than 3 months; and (d) diversify its holdings so that, at the end of each
quarter of the taxable year, (i) at least 50% of the market value of the Fund's
assets is represented by cash and cash items (including receivables), U.S.
Government securities, the securities of other regulated investment companies
and other securities, with such other securities of any one issuer limited for
the purposes of this calculation to an amount not greater than 5% of the value
of the Fund's total assets and not greater than 10% of the outstanding voting
securities of such issuer, and (ii) not more than 25% of the value of its total
assets is invested in the securities of any one issuer (other than U.S.
Government securities or the securities of other regulated investment
companies). In addition, a Fund earning tax-exempt interest must, in each year,
distribute at least 90% of its net tax-exempt income. By meeting these
requirements, the Funds generally will not be subject to Federal income tax on
their investment company taxable income and net capital gains which are
distributed to shareholders. If the Funds do not meet all of these Code
requirements, they will be taxed as ordinary corporations and their
distributions will be taxed to shareholders as ordinary income.
Amounts, other than tax-exempt interest, not distributed on a
timely basis in accordance with a calendar year distribution requirement are
subject to a nondeductible 4% excise tax. To prevent imposition of the excise
tax, each Fund must distribute for each calendar year an amount equal to the sum
of (1) at least 98% of its ordinary income (excluding any capital gains or
losses) for the calendar year, (2) at least 98% of the excess of its capital
gains over capital losses (adjusted for certain ordinary losses) for the
one-year period ending October 31 of such year, and (3) all ordinary income and
capital gains net income (adjusted for certain ordinary losses) for previous
years that were not distributed during such years. A distribution, including an
"exempt-interest dividend," will be treated as paid on December 31 of a calendar
year if it is declared by a Fund during October, November or December of that
year to shareholders of record on a date in such a month and paid by the Fund
during January of the following year. Such distributions will be taxable to
shareholders in the calendar year in which the distributions are declared,
rather than the calendar year in which the distributions are received.
Some Funds may invest in stocks of foreign companies that are
classified under the Code as passive foreign investment companies ("PFICs"). In
general, a foreign company is classified as a PFIC under the Code if at least
one-half of its assets constitutes investment-type assets or 75% or more of its
gross income is investment-type income. Under the PFIC rules, an "excess
distribution" received with respect to PFIC stock is treated as having been
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realized ratably over the period during which the Fund held the PFIC stock.
A Fund itself will be subject to tax on the portion, if any, of the
excess distribution that is allocated to the Fund's holding period in prior
taxable years (and an interest factor will be added to the tax, as if the tax
actually been payable in such prior taxable years) even though the Fund
distributes the corresponding income to shareholders. Excess distributions
include any gain from the sale of PFIC stock as well as certain distributions
from a PFIC. All excess distributions are taxable as ordinary income.
A Fund may be able to elect alternative tax treatment with
respect to PFIC stock. Under an election that currently may be available, a Fund
generally would be required to include in its gross income its share of the
earnings of a PFIC on a current basis, regardless of whether any distributions
are received from the PFIC. If this election is made, the special rules,
discussed above, relating to the taxation of excess distributions, would not
apply. In addition, other elections may become available that would affect the
tax treatment of PFIC stock held by a Fund. Each Fund's intention to qualify
annually as a regulated investment company may limit its elections with respect
to PFIC stock.
Because the application of the PFIC rules may affect, among other
things, the character of gains, the amount of gain or loss and the timing of the
recognition of income with respect to PFIC stock, as well as subject a Fund
itself to tax on certain income from PFIC stock, the amount that must be
distributed to shareholders, and which will be taxed to shareholders as ordinary
income or long-term capital gain, may be increased or decreased substantially as
compared to a fund that did not invest in PFIC stock.
Distributions of investment company taxable income generally are
taxable to shareholders as ordinary income. Distributions from certain of the
Funds may be eligible for the dividends-received deduction available to
corporations. Distributions of net long-term capital gains, if any, designated
by the Funds as long term capital gain dividends are taxable to shareholders as
long-term capital gain, regardless of the length of time the Funds' shares have
been held by a shareholder. All distributions are taxable to the shareholder in
the same manner whether reinvested in additional shares or received in cash.
Shareholders will be notified annually as to the Federal tax status of
distributions.
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Distributions by a Fund reduce the net asset value of the Fund's
shares. Should a distribution reduce the net asset value below a shareholder's
cost basis, such distribution, nevertheless, would be taxable to the shareholder
as ordinary income or capital gain as described above, even though, from an
investment standpoint, it may constitute a partial return of capital. In
particular, investors should be careful to consider the tax implications of
buying shares just prior to a distribution by the Funds. The price of shares
purchased at that time includes the amount of the forthcoming distribution.
Those purchasing just prior to a distribution will receive a distribution which
will nevertheless generally be taxable to them.
Upon the taxable disposition (including a sale or redemption) of
shares of a Fund, a shareholder may realize a gain or loss depending upon his
basis in his shares. Such gain or loss generally will be treated as capital gain
or loss if the shares are capital assets in the shareholders hands. Such gain or
loss will be long-term or short-term, generally depending upon the shareholder's
holding period for the shares. However, a loss realized by a shareholder on the
disposition of Fund shares with respect to which capital gain dividends have
been paid will, to the extent of such capital gain dividends, be treated as
longterm capital loss if such shares have been held by the shareholder for six
months or less. A loss realized on the redemption, sale or exchange of Fund
shares will be disallowed to the extent an exempt-interest dividend was received
with respect to those shares if the shares have been held by the shareholder for
six months or less. Further, a loss realized on a disposition will be disallowed
to the extent the shares disposed of are replaced (whether by reinvestment of
distributions or otherwise) within a period of 61 days beginning 30 days before
and ending 30 days after the shares are disposed of. In such a case, the basis
of the shares acquired will be adjusted to reflect the disallowed loss.
Shareholders receiving distributions in the form of additional shares will have
a cost basis for Federal income tax purposes in each share received equal to the
net asset value of a share of the Funds on the reinvestment date.
Under certain circumstances, the sales charge incurred in acquiring
shares of a Fund may not be taken into account in determining the gain or loss
on the disposition of those shares. This rule applies where shares of a Fund are
exchanged within 90 days after the date they were purchased and new shares of a
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Fund are acquired without a sales charge or at a reduced sales charge. In that
case, the gain or loss recognized on the exchange will be determined by
excluding from the tax basis of the shares exchanged all or a portion of the
sales charge incurred in acquiring those shares. This exclusion applies to the
extent that the otherwise applicable sales charge with respect to the newly
acquired shares is reduced as a result of having incurred the sales charge
initially. Instead, the portion of the sales charge affected by this rule will
be treated as a sales charge paid for the new shares.
The taxation of equity options is governed by Code section 1234.
Pursuant to Code section 1234, the premium received by a Fund for selling a put
or call option is not included in income at the time of receipt. If the option
expires, the premium is short-term capital gain to the Fund. If the Fund enters
into a closing transaction, the difference between the amount paid to close out
its position and the premium received is short-term capital gain or loss. If a
call option written by a Fund is exercised, thereby requiring the Fund to sell
the underlying security, the premium will increase the amount realized upon the
sale of such security and any resulting gain or loss will be a capital gain or
loss, and will be long-term or short-term depending upon the holding period of
the security. With respect to a put or call option that is purchased by a Fund,
if the option is sold, any resulting gain or loss will be a capital gain or
loss, and will be long-term or short-term, depending upon the holding period of
the option. If the option expires, the resulting loss is a capital loss and is
long-term or short-term, depending upon the holding period of the option. If the
option is exercised, the cost of the option, in the case of a call Option, is
added to the basis of the purchased security and, in the case of a put option,
reduces the amount realized on the underlying security in determining gain or
loss.
Certain of the options, futures contracts, and forward foreign
currency exchange contracts that several of the Funds may invest in are
so-called "section 1256 contracts." With certain exceptions, gains or losses on
section 1256 contracts generally are considered 60% long-term and 40% short-term
capital gains or losses ("60/40"). Also, section 1256 contracts held by a Fund
at the end of each taxable year (and, generally, for purposes of the 4% excise
tax, on October 31 of each year) are "marked-to-market" with the result that
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unrealized gains or losses are treated as though they were realized and the
resulting gain or loss is treated as 60/40 gain or loss.
Generally, the hedging transactions undertaken by a Fund may result
in "straddles" for Federal income tax purposes. The straddle rules may affect
the character of gains (or losses) realized by a Fund. In addition, losses
realized by a Fund on a position that are part of a straddle may be deferred
under the straddle rules, rather than being taken into account in calculating
the taxable income for the taxable year in which such losses are realized.
Because only a few regulations implementing the straddle rules have been
promulgated, the tax consequences to a Fund of hedging transactions are not
entirely clear. Hedging transactions may increase the amount of short-term
capital gain realized by a Fund which is taxed as ordinary income when
distributed to stockholders.
A Fund may make one or more of the elections available under the
Code which are applicable to straddles. If a Fund makes any of the elections,
the amount, character and timing of the recognition of gains or losses from the
affected straddle positions will be determined under rules that vary according
to the election(s) made. The rules applicable under certain of the elections may
operate to accelerate the recognition of gains or losses from the affected
straddle positions.
Because application of the straddle rules may affect the character
of gains or losses, defer losses and/or accelerate the recognition of gains or
losses from the affected straddle positions, the amount which must be
distributed to shareholders, and which will be taxed to shareholders as ordinary
income or long-term capital gain, may be increased or decreased substantially as
compared to a fund that did not engage in such hedging transactions.
Certain requirements that must be met under the Code in order for a
Fund to qualify as a regulated investment company may limit the extent to which
a Fund will be able to engage in transactions in options, futures, and forward
contracts.
Under the Code, gains or losses attributable to fluctuations in
exchange rates which occur between the time a Fund accrues interest, dividends
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or other receivables, or accrues expenses or other liabilities denominated in a
foreign currency, and the time the Fund actually collects such receivables, or
pays such liabilities, generally are treated as ordinary income or ordinary
loss. Similarly, on disposition of debt securities denominated in a foreign
currency and on disposition of certain options and forward and futures
contracts, gains or losses attributable to fluctuations in the value of foreign
currency between the date of acquisition of the security or contract and the
date of disposition also are treated as ordinary gain or loss. These gains or
losses, referred to under the Code as "section 988" gains or losses, may
increase, decrease, or eliminate the amount of a Fund's investment company
taxable income to be distributed to its shareholders as ordinary income.
Income received by a Fund from sources within foreign countries may
be subject to withholding and other similar income taxes imposed by the foreign
country. If more than 50% of the value of a Fund's total assets at the close of
its taxable year consists of securities of foreign governments and corporations,
the Fund will be eligible and intends to elect to "pass-through" to its
shareholders the amount of such foreign taxes paid by the Fund. Pursuant to this
election, a shareholder would be required to include in gross income (in
addition to taxable dividends actually received) his pro rata share of the
foreign taxes paid by a Fund, and would be entitled either to deduct his pro
rata share of foreign taxes in computing his taxable income or to use it as a
foreign tax credit against his U.S. Federal income tax liability, subject to
limitations. No deduction for foreign taxes may be claimed by a shareholder who
does not itemize deductions, but such a shareholder may be eligible to claim the
foreign tax credit (see below). Each shareholder will be notified within 60 days
after the close of a Fund's taxable year whether tho foreign taxes paid by a
Fund will "pass-through" for that year and, if so, such notification will
designate (a) the shareholder's portion of the foreign taxes paid to each such
country and (b) the portion of the dividend which represents income derived from
foreign sources.
Generally, a credit for foreign taxes is subject to the limitation
that it may not exceed the shareholder's U.S. tax attributable to his total
foreign source taxable income. For this purpose, if a Fund makes the election
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described in the preceding paragraph, the source of the Fund's income flows
through to its shareholders. With respect to a Fund, gains from the sale of
securities will be treated as derived from U.S. sources and certain currency
fluctuations gains, including fluctuation gains from foreign
currency-denominated debt securities, receivables and payables, will be treated
as ordinary income derived from U.S. sources. The limitation on the foreign tax
credit is applied separately to foreign source passive income has defined for
purposes of the foreign tax credit) including foreign source passive income of a
Fund. The foreign tax credit may offset only 90% of the alternative minimum tax
imposed on corporations and individuals, and foreign taxes generally may not be
deducted in computing alternative minimum taxable income.
The Funds are required to report to the Internal Revenue Service
("IRS") all distributions except in the case of certain exempt shareholders. All
such distributions generally are subject to withholding of Federal income tax at
a rate of 31% ("backup withholding") in the case of non-exempt shareholders if
(1) the shareholder fails to furnish the Funds with and to certify the
shareholder's correct taxpayer identification number or social security number,
(2) the IRS notifies the Funds or a shareholder that the shareholder has failed
to report properly certain interest and dividend income to the IRS and to
respond to notices to that effect, or (3) when required to do so, the
shareholder fails to certify that he is not subject to backup withholding. If
the withholding provisions are applicable, any such distributions, whether
reinvested in additional shares or taken in cash, will be reduced by the amounts
required to be withheld. Backup withholding is not an additional tax. Any amount
withheld may be credited against the shareholders U.S. Federal income tax
liability. Investors may wish to consult their tax advisors about the
applicability of the backup withholding provisions.
The foregoing discussion relates only to Federal income tax law as
applicable to U.S. persons (i.e., U.S. citizens and residents and U.S.
corporations, partnerships, trusts and estates). Distributions by the Funds also
may be subject to state and local taxes and their treatment under state and
local income tax laws may differ from the Federal income tax treatment.
Distributions of a Fund which are derived from interest on obligations of the
U.S. Government and certain of its agencies and instrumentalities may be exempt
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from state and local taxes in certain states. Shareholders should consult their
tax advisors with respect to particular questions of Federal, state and local
taxation. Shareholders who are not U.S. persons should consult their tax
advisers regarding U.S. and foreign tax consequences of ownership of shares of
the Funds including the likelihood that distributions to them would be subject
to withholding of U.S. tax at a rate of 30% (or at a lower rate under a tax
treaty).
OTHER INFORMATION
CAPITALIZATION
The Trust is a Delaware business trust established under a
Declaration of Trust dated August 25, 1994 and currently consists of four
separately managed portfolios. Each portfolio is comprised of two classes of
shares -- the "Service Class" and the "Premium Class". The capitalization of the
Trust consists solely of an unlimited number of shares of beneficial interest
with a par value of $0.001 each. The Board of Trustees may establish additional
Funds (with different investment objectives and fundamental policies) at any
time in the future. Establishment and offering of additional Funds will not
alter the rights of the Trust's shareholders. When issued, shares are fully
paid, non-assessable, redeemable and freely transferable. Shares do not have
preemptive rights or subscription rights. In any liquidation of a Fund, each
shareholder is entitled to receive his pro rata share of the net assets of that
Fund.
Expenses incurred in connection with each Fund's organization and
the public offering of its shares are being amortized on a straight-line basis
over a period of not more than five years.
VOTING RIGHTS
Under the Declaration of Trust, the Trust is not required to
hold annual meetings of each Fund's shareholders to elect Trustees or for other
purposes. When certain matters affect only one class of shares but not another,
the shareholders would vote as a class regarding such matters. It is not
anticipated that the Trust will hold shareholders' meetings unless required by
law or the Declaration of Trust. In this regard, the Trust will be required to
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hold a meeting to elect Trustees to fill any existing vacancies on the Board if,
at any time, fewer than a majority of the Trustees have been elected by the
shareholders of the Trust. In addition, the Declaration of Trust provides that
the holders of not less than two-thirds of the outstanding shares of the Trust
may remove persons serving as Trustee either by declaration in writing or at a
meeting called for such purpose. The Trustees are required to call a meeting for
the purpose of considering the removal of persons serving as Trustee if
requested in writing to do so by the holders of not less than 10% of the
outstanding shares of the Trust. To the extent required by applicable law, the
Trustees shall assist shareholders who seek to remove any person serving as
Trustee.
The Trust's shares do not have cumulative voting rights, so that
the holders of more than 50% of the outstanding shares may elect the entire
Board of Trustees, in which case the holders of the remaining shares would not
be able to elect any Trustees.
PRINCIPAL SHAREHOLDERS
As of March 4, 1996, the following persons owned of record or
beneficially 5% or more of each of the Fund's Shares:
Reserve Money Market Fund
Service Class Shares
IBJ Schroder Bank & Trust Company 37,746,472.07
One State Street, 7th Floor 92.44%
New York, NY 10004-1505
Patterson Belknap 2,480,070.91
Webb E. Tyler LLP 6.07%
1133 Avenue of the Americas
New York, NY 10036-6710
Bond Fund
SERVICE CLASS SHARES
IBJ Schroder Bank & Trust Company 2,736,458.29
One State Street, 7th Floor 99.95%
New York, NY 10004-1505
Core Equity Fund
SERVICE CLASS SHARES
IBJ Schroder Bank & Trust Company 6,838,235.21
One State Street, 7th Floor 99.91%
New York, NY 10004-1505
Core Equity
Premium Class Shares
Furman Selz LLC 1,308.29
230 Park Avenue, 12th Floor 99.53%
New York, NY 10169-0005
CUSTODIAN TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
IBJ Schroder Bank & Trust Company acts as custodian of the Trust's
assets. Furman Selz acts as transfer agent for the Funds. The Trust compensates
Furman Selz for providing personnel and facilities to perform transfer agency
related services for the Trust at a rate intended to represent the cost of
providing such services.
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P. has been selected as the independent
accountants for the Trust. Coopers & Lybrand L.L.P. provides audit services, tax
return review and assistance and consultation in connection with review of
certain SEC filings. Coopers & Lybrand L.L.P.'s address is 1301 Avenue of the
Americas, New York, New York 10019-6013.
-40-
<PAGE>
YIELD AND PERFORMANCE INFORMATION
The Funds may, from time to time, include their yield, effective
yield, tax equivalent yield and average annual total return in advertisements or
reports to shareholders or prospective investors.
Current yield for the Money Market Fund will be based on the change
in the value of a hypothetical investment (exclusive of capital changes such as
gains or losses from the sale of securities and unrealized appreciation and
depreciation) over a particular seven-day period, less a pro-rata share of each
Fund's expenses accrued over that period (the "base period"), and stated as a
percentage of the investment at the start of the base period (the "base period
return"). The base period return is then annualized by multiplying by 365/7,
with the resulting yield figure carried to at least the nearest hundredth of one
percent. "Effective yield" for the Money Market Fund assumes that all dividends
received during the base period have been reinvested. Calculation of "effective
yield" begins with the same "base period return" used in the calculation of
yield, which is then annualized to reflect weekly compounding pursuant to the
following formula:
/365/7/
Effective Yield [(Base Period Return + 1) - 1.
For the period ended November 30, 1995, the seven day yield and
seven day effective yield for the Service Class Shares of the Reserve Money
Market Fund was 4.95% and 5.07%, respectively.
Quotations of yield for the Non-Money Market Funds will be based on
the investment income per share earned during a particular 30-day (or one month)
period, less expenses accrued during a period ("net investment income") and will
be computed by dividing net investment income by the maximum offering price per
share on the last day of the period, according to the following formula:
/6/
YIELD = 2[(A-B + 1) -l]
---
cd
where a = dividends and interest earned during the period, b = expenses accrued
for the period (net of any reimbursements), c = the average daily number of
-41-
<PAGE>
shares outstanding during the period that were entitled to receive dividends,
and d the maximum offering price per share on the last day of the period.
For the period ended November 30, 1995, the thirty day (or one
month) yield for the Service Class shares of the Bond Fund, Core Equity Fund and
Growth and Income Fund was 5.16%, 1.07% and 2.78%, respectively.
Quotations of average annual total return will be expressed in
terms of the average annual compounded rate of return of a hypothetical
investment in a Fund over periods of 1, 5 and 10 years and since inception (up
to the life of the Fund), calculated pursuant to the following formula:
/n/
P (1 + T) = ERV
(where P = a hypothetical initial payment of $l,000, T = the average annual
total return, n = the number of years, and ERV = the ending redeemable value of
a hypothetical $1,000 payment made at the beginning of the period). All total
return figures will reflect the deduction of the maximum sales charge and a
proportional share of Fund expenses (net of certain reimbursed expenses) on an
annual basis, and will assume that all dividends and distributions are
reinvested when paid.
The average annual total return for the Service Class Shares of the
Bond Fund, Core Equity Fund and Growth and Income Fund for the period February
1, 1995 (commencement of operations) to November 30, 1995 was 12.28%, 29.70% and
20.82%, respectively.
Quotations of yield and total return will reflect only the
performance of a hypothetical investment in the Funds during the particular time
period shown. Yield and total return for the Funds will vary based on changes in
the market conditions and the level of the Fund's expenses, and no reported
performance figure should be considered an indication of performance which may
be expected in the future.
In connection with communicating its yields or total return to
current or prospective unit holders, the Funds also may compare these figures to
the performance of other mutual funds tracked by mutual fund rating services or
-42-
<PAGE>
to other unmanaged indices which may assume reinvestment of dividends but
generally do not reflect deductions for administrative and management costs.
Performance information for the Funds may be compared, in reports
and promotional literature, to: (i) the Standard & Poor's 500 Stock Index, Dow
Jones Industrial Average, or other unmanaged indices so that investors may
compare the Funds' results with those of a group of unmanaged securities widely
regarded by investors as representative of the securities markets in general;
(ii) other groups of mutual funds tracked by Lipper Analytical Services, a
widely used independent research firm which ranks mutual funds by overall
performance, investment objectives, and assets, or tracked by other services,
companies, publications, or persons who rank mutual funds on overall performance
or other criteria; and (iii) the Consumer Price Index (measure for inflation) to
assess the real rate of return from an investment of dividends but generally do
not reflect deductions for administrative and management costs and expenses.
Investors who purchase and redeem shares of the Funds through a
customer account maintained at a Service Organization may be charged one or more
of the following types of fees as agreed upon by the Service Organization and
the investor, with respect to the customer services provided by the Service
Organization: account fees (a fixed amount per month or per year); transaction
fees (a fixed amount per transaction processed); compensating balance
requirements (a minimum dollar amount a customer must maintain in order to
obtain the services offered); or account maintenance fees (a periodic charge
based upon a percentage of the assets in the account or of the dividends paid on
those assets). Such fees will have the effect of reducing the yield and average
annual total return of the Funds for those investors. Investors who maintain
accounts with the Trust as transfer agent will not pay these fees.
FINANCIAL STATEMENTS
The Financial Statements, including the report of Coopers & Lybrand
L.L.P., are included in this Statement of Additional Information for the period
from February 1, 1995 (commencement of operations) to November 30, 1995.
43
<PAGE>
IBJ FUNDS Trust
RESERVE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS -- NOVEMBER 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Yield to
Maturity
Credit at Time of Maturity Value
Ratings* Purchase Date Principal (Note 2a)
- ------- ---------- -------- --------- ---------
COMMERCIAL PAPER -- 52.04%
<S> <C> <C> <C> <C>
A1/P1 American Express Credit........................... 5.70% 12/01/95 $ 600,000 $ 600,000
A1/P1 American Express Credit........................... 5.65 12/06/95 500,000 499,622
A1/P1 Brown-Forman Corp................................. 5.72 12/08/95 1,330,000 1,328,521
A1+/P1 Chevron Oil Finance Co............................ 5.72 12/07/95 1,250,000 1,248,849
A1/P1 Ford Credit Europe plc............................ 5.73 12/04/95 1,250,000 1,249,421
A1+/P1 General Electric Capital Corp..................... 5.74 12/21/95 1,250,000 1,246,457
A1/P1 IBM Credit Corp................................... 5.73 12/15/95 1,250,000 1,247,326
A1/P1 Kubota Finance USA Inc............................ 6.04 01/22/96 1,250,000 1,239,289
A1+/P1 National Rural Utilities Cooperative Finance Corp. 5.69 12/13/95 1,200,000 1,197,771
A1/P1 Southern Company (a).............................. 5.73 12/01/95 780,000 780,000
A1/P1 Southern Company (a).............................. 5.71 12/06/95 700,000 699,465
A1/P1 Texaco Inc........................................ 5.74 12/19/95 1,250,000 1,246,412
A1/P1 US West Capital Funding........................... 5.70 12/04/95 1,240,000 1,239,469
A1/P1 Weyerhauser Real Estate........................... 5.72 12/18/95 1,250,000 1,246,950
-----------
TOTAL COMMERCIAL PAPER ........................... 15,069,552
-----------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 45.07%
AAA/Aaa Federal Farm Credit Discount Notes................ 5.60 12/01/95 4,250,000 4,250,000
AAA/Aaa Federal Home Loan Bank Discount Notes............. 5.62 01/04/96 1,250,000 1,243,780
AAA/Aaa Federal Home Loan Bank Discount Notes............. 5.57 01/10/96 2,500,000 2,485,049
AAA/Aaa Federal Home Loan Mortgage Corp. Discount Notes... 5.61 12/13/95 1,000,000 998,130
AAA/Aaa Federal Home Loan Mortgage Corp. Discount Notes... 5.59 01/22/96 3,300,000 3,274,449
AAA/Aaa Federal National Mortgage Corp. Discount Notes.... 5.58 12/13/95 800,000 798,538
-----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS ......... 13,049,946
-----------
SHORT-TERM INVESTMENTS -- 1.92%
NR/NR TempCash Provident Money Market Investment Fund... N/A 555,538 555,538
-----------
TOTAL SHORT-TERM INVESTMENTS ..................... 555,538
-----------
TOTAL INVESTMENTS (AMORTIZED COST $28,675,036)+-- 99.03%
28,675,036
CASH AND OTHER ASSETS, NET OF LIABILITIES-- 0.97% 280,671
-----------
NET ASSETS-- 100.00% ............................. $28,955,707
===========
</TABLE>
* See page 13 for Credit Ratings Summary.
+ Cost for book and tax purposes is the same.
(a) Security exempt from registration under Rule 144A of the Securities Act of
1933. The security may be resold in transactions exempt from registration,
normally to qualified institutional buyers.
See accompanying notes to financial statements.
44
<PAGE>
IBJ FUNDS Trust
BOND FUND
PORTFOLIO OF INVESTMENTS -- NOVEMBER 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Credit Market
Ratings* Principal Cost Value
- -------- --------- ---- -----
U.S. GOVERNMENT AND AGENCY OBLIGATIONS -- 54.03%
GOVERNMENT AGENCY OBLIGATIONS -- 18.15%
<S> <C> <C> <C> <C>
AAA/Aaa $1,250,000 Federal Farm Credit Medium Term Notes, 6.32%, 09/09/2002.......... $1,249,609 $1,278,650
AAA/Aaa 500,000 Federal Home Loan Mortgage Corp., 6.385%, 06/13/2000.............. 497,890 501,595
AAA/Aaa 1,250,000 Federal Home Loan Mortgage Corp., 6.54%, 03/21/2001............... 1,245,595 1,266,125
AAA/Aaa 1,000,000 Federal Home Loan Mortgage Corp., 7.55%, 06/10/2004............... 997,940 1,042,770
AAA/Aaa 500,000 Federal National Mortgage Association Medium Term Notes, 6.08%,
09/25/2000 ..................................................... 500,152 505,970
AAA/Aaa 21,510 Federal Home Loan Mortgage Corp. Pool #285113, 7.50%, 02/01/2017.. 21,024 21,755
AAA/Aaa 4,020 Government National Mortgage Association Pool #39821, 11.50%,
04/15/2010 ..................................................... 4,381 4,504
AAA/Aaa 100,479 Government National Mortgage Association Pool #102627, 13.00%,
06/15/2014 ..................................................... 112,494 113,208
AAA/Aaa 74,364 Government National Mortgage Association Pool #115224, 13.00%,
11/15/2014 ..................................................... 83,179 83,700
AAA/Aaa 50,489 Government National Mortgage Association Pool #120883, 13.00%,
12/15/2014 ..................................................... 56,444 56,779
---------- ----------
4,768,708 4,875,056
---------- ----------
U.S. TREASURY OBLIGATIONS -- 35.88%
AAA/Aaa 1,500,000 Notes, 6.50%, 05/15/2005.......................................... 1,558,710 1,577,940
AAA/Aaa 1,500,000 Notes, 6.75%, 06/30/1999.......................................... 1,536,546 1,560,090
AAA/Aaa 1,000,000 Notes, 6.75%, 04/30/2000.......................................... 1,027,339 1,046,510
AAA/Aaa 1,000,000 Notes, 8.00%, 05/15/2001.......................................... 1,081,821 1,112,310
AAA/Aaa 1,500,000 Notes, 6.375%, 08/15/2002......................................... 1,504,529 1,560,585
AAA/Aaa 2,000,000 Notes, 6.25%, 02/15/2003.......................................... 2,018,585 2,066,380
AAA/Aaa 650,000 Notes, 7.25%, 08/15/2004.......................................... 677,098 714,161
---------- ----------
9,404,628 9,637,976
---------- ----------
TOTAL U.S. GOVERNMENT AND AGENCY OBLIGATIONS ..................... 14,173,336 14,513,032
---------- ----------
CORPORATE OBLIGATIONS -- 40.50%
AUTOMOBILES -- 1.35%
A-/A3 350,000 GMAC Notes, 7.00%, 03/01/2000..................................... 351,843 361,812
---------- ----------
BANKING -- 3.45%
A+/A2 500,000 BankAmerica Corp. Medium Term Notes, 7.125%, 05/12/2005........... 505,905 524,375
A-/Baa1 400,000 Old Kent Financial Sub. Notes, 6.625%, 11/15/2005................. 397,808 401,000
---------- ----------
903,713 925,375
---------- ----------
BEVERAGES -- 1.29%
AA/Aa3 350,000 Coca-Cola Co. Notes, 6.00%, 07/15/2003............................ 341,548 346,062
---------- ----------
CHEMICALS -- 1.95%
A-/A3 350,000 International Minerals & Chemicals Debs., 9.875%, 03/15/2011...... 368,559 394,187
BBB-/Baa3 125,000 Lyondell Petrochemical Co. Notes, 8.25%, 03/15/1997............... 124,524 128,386
---------- ----------
493,083 522,573
---------- ----------
DURABLE GOODS -- 2.07%
A+/A3 250,000 Whirlpool Corp. Debs., 9.00%, 03/01/2003.......................... 258,378 286,875
A/A2 254,000 Xerox Corp. Debs., 9.625%, 09/01/1997............................. 261,539 270,193
---------- ----------
519,917 557,068
---------- ----------
See accompanying notes to financial statements.
</TABLE>
45
<PAGE>
IBJ FUNDS Trust
BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)-- NOVEMBER 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Credit Market
Ratings* Principal Cost Value
- -------- --------- ---- -----
<S> <C> <C> <C> <C>
CORPORATE OBLIGATIONS (CONTINUED)
FINANCIAL SERVICES -- 4.97%
AA-/Aa3 $350,000 Associates Corp. N.A. Sr. Notes, 7.50%, 04/15/2002................ $ 351,913 $ 374,500
A+/A1 285,000 Commercial Credit Co. Notes, 6.875%, 05/01/2002................... 289,878 295,331
A/A2 350,000 Household Finance Co. Notes, 6.75%, 06/01/2000.................... 352,272 358,750
BBB/Baa1 263,000 ITT Financial Debs., 9.375%, 12/15/2001........................... 283,070 307,053
---------- ----------
1,277,133 1,335,634
---------- ----------
FOOD -- 1.11%
BBB/Baa2 283,000 Nabisco Inc. Medium Term Notes, 7.63%, 08/13/2001................. 290,713 298,919
---------- ----------
FOREST PRODUCTS & PAPER -- 1.28%
BBB/Baa1 325,000 Champion International Corp. Notes, 7.70%, 12/15/1999............. 339,048 342,875
---------- ----------
MACHINERY -- 0.81%
BBB-/Baa3 210,000 Case Corp. Notes, 7.25%, 08/01/2005............................... 213,321 218,400
---------- ----------
OIL/GAS -- 5.26%
AAA/Aa1 500,000 Amoco Canada Debs., 7.95%,10/01/2022.............................. 517,293 553,750
AA-/A1 250,000 British Gas Financial Debs., 8.75%, 03/15/1998.................... 254,952 265,625
NR/NR 250,000 Hydro Quebec Medium Term Notes, 8.59%, 08/22/2001................. 251,404 276,250
A+/A1 300,000 Texaco Capital Debs., 9.00%, 11/15/1997........................... 309,281 318,375
---------- ----------
1,332,930 1,414,000
---------- ----------
PHARMACEUTICAL -- 0.95%
AAA/Aaa 250,000 Johnson & Johnson Debs., 8.00%, 09/01/1998........................ 251,361 254,375
---------- ----------
TRANSPORTATION -- 4.62%
BBB/Baa2 411,000 Canadian National Railway Notes, 7.00%, 03/15/2004................ 409,795 420,761
A-/A3 140,000 Canadian Pacific Notes, 6.875%, 04/15/2003........................ 141,726 143,675
AA/Aa1 350,000 Conrail, Inc. Notes, 6.86%, 12/31/2007............................ 344,435 362,485
BBB+/A3 300,000 CSX Corp Notes, 7.00%, 09/15/2002................................. 299,280 314,625
---------- ----------
1,195,236 1,241,546
---------- ----------
UTILITIES -- 11.39%
A/A2 350,000 Central Power & Light Notes, 6.875%, 02/01/2003................... 359,576 361,813
A-/A3 250,000 Cincinnati Gas & Electric Notes, 6.45%, 02/15/2004................ 249,875 249,063
A/A2 250,000 Delmarva Power & Light Notes, 6.40%, 07/01/2003................... 248,472 251,563
BBB/Baa2 500,000 Illinois Power Notes, 6.50%, 08/01/2003........................... 502,914 506,505
A/A2 276,000 Iowa Electric Light & Power Notes, 6.00%, 10/01/2008.............. 261,344 263,925
BBB+/Baa1 310,000 Jersey Central Power & Light Notes, 6.375%, 05/01/2003............ 305,031 308,062
AA/Aa3 400,000 National Rural Utilities Notes, 6.50%, 09/15/2002................. 402,535 407,500
A-/A3 300,000 Pacific Gas & Electric Medium Term Notes, 9.08%, 12/15/1997....... 306,029 318,375
BBB+/Baa1 400,000 Philadelphia Electric Notes, 6.375%, 08/15/2005................... 392,992 393,000
---------- ----------
3,028,768 3,059,806
---------- ----------
TOTAL CORPORATE OBLIGATIONS ...................................... 10,538,614 10,878,445
---------- ----------
</TABLE>
See accompanying notes to financial statements.
46
<PAGE>
IBJ FUNDS Trust
BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)-- NOVEMBER 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Credit Market
Ratings* Principal Cost Value
- -------- --------- ---- -----
<S> <C> <C> <C> <C>
MUNICIPAL OBLIGATIONS -- 1.61 %
A+/NR $393,000 Halifax NC Regional Economic Development Notes, 9.25%,
10/01/2005. ....................................................$ 399,997 $ 433,773
----------- -----------
TOTAL MUNICIPAL OBLIGATIONS ...................................... 399,997 433,773
----------- -----------
SUPRA-NATIONAL OBLIGATIONS -- 1.00%
AA-/Aa1 250,000 African Development Bank Notes, 7.70%, 07/15/2002................. 260,886 269,688
----------- -----------
TOTAL SUPRA-NATIONAL OBLIGATIONS ................................. 260,886 269,688
----------- -----------
. SHORT TERM INVESTMENTS -- 2.31%
619,231 TempCash Provident Money Market Investment Fund................... 619,231 619,231
----------- -----------
TOTAL SHORT TERM INVESTMENTS ..................................... 619,231 619,231
----------- -----------
TOTAL INVESTMENTS-- 99.45% ..................................... $25,992,064+ 26,714,169
===========
CASH AND OTHER ASSETS, NET OF LIABILITIES-- 0.55% ................ 148,678
-----------
NET ASSETS-- 100.00% ............................................. $26,862,847
===========
</TABLE>
* See page 13 for Credit Ratings Summary.
+ Cost for book and tax purposes is the same.
See accompanying note to financial statements.
47
<PAGE>
IBJ FUNDS Trust
CORE EQUITY FUND
PORTFOLIO OF INVESTMENTS -- NOVEMBER 30, 1995
- --------------------------------------------------------------------------------
Market
Shares Cost Value
------ ---- ------
COMMON STOCKS -- 97.60 %
AEROSPACE / DEFENSE -- 4.45%
54,500 Loral Corp............. $ 1,083,187 $ 1,846,187
45,200 Raytheon Co............ 1,514,200 2,011,400
----------- -----------
2,597,387 3,857,587
----------- -----------
APPAREL -- 1.78%
42,600 Jones Apparel Group
Inc.++ 1,011,494 1,538,925
----------- -----------
AUTOMOBILES -- 2.07%
49,000 Echlin Inc............. 1,646,150 1,788,500
----------- -----------
BANKING -- 5.90%
40,500 First American Corp.... 1,209,937 1,847,812
25,400 Nationsbank Corp....... 1,195,686 1,812,925
59,500 Signet Banking Corp.... 1,375,353 1,450,312
----------- -----------
3,780,976 5,111,049
----------- -----------
BUILDING MATERIALS -- 2.11%
46,100 Sherwin-Williams Co.... 1,555,802 1,826,713
----------- -----------
CHEMICALS -- 5.94%
24,000 Air Products &
Chemicals Inc. ...... 1,242,112 1,332,000
26,200 Great Lakes Chemical
Corp. ............... 1,496,675 1,863,475
17,000 Monsanto Co............ 1,281,807 1,946,500
----------- -----------
4,020,594 5,141,975
----------- -----------
COMPUTERS -- 3.75%
26,000 Automatic Data
Processing Inc. 1,534,000 2,070,250
30,900 Reynolds & Reynolds Co. 990,771 1,178,063
----------- -----------
2,524,771 3,248,313
----------- -----------
ELECTRICAL EQUIPMENT-- 2.36%
30,400 General Electric Co.... 1,580,760 2,044,400
----------- -----------
ELECTRONICS -- 5.54%
20,400 Hewlett-Packard Co..... 1,157,558 1,690,650
46,000 Molex Inc.............. 1,321,203 1,541,000
25,600 Motorola Inc........... 1,580,708 1,568,000
----------- -----------
4,059,469 4,799,650
----------- -----------
ENGINEERING -- 2.23%
29,700 Fluor Corp............. 1,414,442 1,930,500
----------- -----------
ENTERTAINMENT -- 4.18%
30,700 The Walt Disney Co..... 1,759,706 1,845,838
44,300 Time Warner Inc........ 1,616,520 1,772,000
----------- -----------
3,376,226 3,617,838
----------- -----------
FINANCIAL SERVICES -- 2.04%
28,200 Household International
Inc. ................ 1,131,226 1,762,500
----------- -----------
FOOD -- 7.74%
33,600 Campbell Soup Co....... 1,443,360 1,877,400
67,000 Nabisco Holdings Corp.
Class A.............. 1,853,212 1,892,750
56,300 Sara Lee Corp.......... 1,530,296 1,815,675
36,500 Sysco Corp............. 1,114,360 1,117,813
----------- -----------
5,941,228 6,703,638
----------- -----------
HOTELS / MOTELS -- 1.84%
24,600 Hilton Hotels Corp..... 1,623,387 1,589,775
----------- -----------
HOUSEHOLD PRODUCTS -- 2.24%
26,500 Colgate-Palmolive Co... 1,652,570 1,941,125
----------- -----------
INSURANCE -- 4.13%
20,500 American International
Group Inc............ 1,393,980 1,839,875
64,500 TIG Holdings Inc....... 1,328,517 1,741,500
----------- -----------
2,722,497 3,581,375
----------- -----------
MACHINERY -- 1.91%
42,600 Dover Corp............. 1,211,437 1,656,075
----------- -----------
MANUFACTURING -- 2.25%
41,200 Allied Signal Inc...... 1,457,450 1,946,700
----------- -----------
MEDICAL -- 3.42%
61,100 Caremark International
Inc. ................ 1,062,183 1,199,088
34,200 Columbia HCA Healthcare
Corp................. 1,408,265 1,765,575
----------- -----------
2,470,448 2,964,663
----------- -----------
METALS -- 1.88%
27,900 Aluminum Company of
America.............. 1,110,377 1,632,150
----------- -----------
OIL / GAS -- 8.25%
15,200 Atlantic Richfield Co.. 1,615,000 1,647,300
50,200 Enron Corp............. 1,776,081 1,882,500
15,500 Mobil Corp............. 1,339,993 1,617,813
27,000 Texaco Inc............. 1,689,595 1,998,000
----------- -----------
6,420,669 7,145,613
----------- -----------
PHARMACEUTICALS -- 3.79%
58,000 Ivax Corp.............. 1,289,700 1,544,250
30,000 Pfizer Inc............. 1,216,875 1,740,000
----------- -----------
2,506,575 3,284,250
----------- -----------
RETAIL -- 7.63%
49,000 Kroger Co.++........... 1,163,750 1,641,500
39,000 May Department Stores
Co. 1,385,452 1,701,375
85,100 Price/Costco Inc.++.... 1,201,163 1,414,788
67,100 Revco D.S. Inc.++...... 1,401,302 1,853,637
----------- -----------
5,151,667 6,611,300
----------- -----------
See accompanying notes to financial statements.
48
<PAGE>
IBJ FUNDS Trust
CORE EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)-- NOVEMBER 30, 1995
- --------------------------------------------------------------------------------
Market
Shares Cost Value
------ ---- ------
COMMON STOCKS (CONTINUED)
TRANSPORTATION -- 1.11 %
20,700 Kansas City Southern
Industries, Inc........ $ 941,367 $ 957,375
----------- -----------
UTILITIES -- 9.06%
32,500 AT&T Corp.............. 1,610,618 2,145,000
41,100 Duke Power Co.......... 1,708,758 1,844,361
36,300 SBC Communications Inc. 1,537,533 1,960,200
47,400 Sprint Corp............ 1,424,209 1,896,000
----------- -----------
6,281,118 7,845,561
----------- -----------
TOTAL COMMON STOCKS ... 68,190,087 84,527,550
----------- -----------
SHORT TERM INVESTMENTS -- 2.44%
$2,116,832 TempCash Provident
Money Market
Investment Fund...... 2,116,832 2,116,832
----------- -----------
TOTAL SHORT TERM
INVESTMENTS ......... 2,116,832 2,116,832
----------- -----------
TOTAL
INVESTMENTS--100.04% $70,306,919+ 86,644,382
===========
LIABILITIES IN EXCESS
OF CASH AND OTHER
ASSETS -- (0.04%) (31,644)
-----------
NET ASSETS-- 100.00% .. $86,612,738
===========
+ Cost for book and tax purposes is the same
++ Non-income producing security
See accompanying notes to financial statements.
49
<PAGE>
IBJ FUNDS Trust
GROWTH AND INCOME FUND
PORTFOLIO OF INVESTMENTS -- NOVEMBER 30, 1995
- --------------------------------------------------------------------------------
Market
Shares Cost Value
------ ---- -----
COMMON STOCKS -- 54.38%
AEROSPACE/DEFENSE -- 2.35%
18,000 Loral Corp............. $ 357,750 $ 609,750
13,000 Raytheon Co............ 435,500 578,500
----------- -----------
793,250 1,188,250
----------- -----------
APPAREL -- 1.06%
14,900 Jones Apparel Group
Inc.++ .............. 367,459 538,263
----------- -----------
AUTOMOBILES -- 1.15%
15,900 Echlin Inc............. 534,862 580,350
----------- -----------
BANKING -- 3.49%
13,400 First American Corp.... 400,325 611,375
8,500 Nationsbank Corp....... 407,306 606,688
22,400 Signet Banking Corp.... 495,610 546,000
----------- -----------
1,303,241 1,764,063
----------- -----------
BUILDING MATERIALS-- 1.28%
16,300 Sherwin Williams Co.... 556,185 645,888
----------- -----------
CHEMICALS -- 3.44%
8,000 Air Products &
Chemicals Inc. ...... 414,037 444,000
9,200 Great Lakes Chemical
Corp. ............... 532,235 654,350
5,600 Monsanto Co............ 440,703 641,200
----------- -----------
1,386,975 1,739,550
----------- -----------
COMPUTERS -- 1.96%
7,500 Automatic Data
Processing Inc....... 442,500 597,188
10,400 Reynolds & Reynolds Co. 333,002 396,500
----------- -----------
775,502 993,688
----------- -----------
ELECTRICAL EQUIPMENT-- 1.36%
10,200 General Electric Co.... 543,762 685,950
----------- -----------
ELECTRONICS -- 3.13%
6,700 HewlettPackard Co...... 365,623 555,262
15,400 Molex Inc.............. 452,262 515,900
8,400 Motorola Inc........... 521,564 514,500
----------- -----------
1,339,449 1,585,662
----------- -----------
ENGINEERING -- 1.26%
9,800 Fluor Corp............. 471,382 637,000
----------- -----------
ENTERTAINMENT -- 2.36%
10,300 The Walt Disney Co..... 590,999 619,287
14,400 Time Warner Inc........ 536,995 576,000
----------- -----------
1,127,994 1,195,287
----------- -----------
FINANCIAL SERVICES -- 1.06%
8,600 Household International
Inc. ................ 345,818 537,500
----------- -----------
FOOD -- 4.47%
11,300 Campbell Soup Co....... 500,293 631,387
21,800 Nabisco Holdings Corp.
Class A.............. 603,819 615,850
20,000 Sara Lee Corp.......... 546,511 645,000
12,000 Sysco Corp............. 366,410 367,500
----------- -----------
2,017,033 2,259,737
----------- -----------
HOTELS/MOTELS -- 1.01 %
7,900 Hilton Hotels Corp..... 527,264 510,538
----------- -----------
HOUSEHOLD PRODUCTS-- 1.29%
8,900 ColgatePalmolive Co.... 569,709 651,925
----------- -----------
INSURANCE -- 2.33%
6,700 American International
Group Inc............ 455,588 601,325
21,300 TIG Holdings Inc....... 451,769 575,100
----------- -----------
907,357 1,176,425
----------- -----------
MACHINERY -- 1.11%
14,400 Dover Corp............. 409,500 559,800
----------- -----------
MANUFACTURING -- 1.01%
10,800 Allied Signal Inc...... 382,050 510,300
----------- -----------
MEDICAL -- 1.87%
18,500 Caremark International
Inc. ................ 321,645 363,063
11,300 Columbia HCA Healthcare
Corp................. 467,374 583,362
----------- -----------
789,019 946,425
----------- -----------
METALS -- 1.05%
9,100 Aluminum Company of
America.............. 364,561 532,350
----------- -----------
OIL/GAS -- 4.50%
4,900 Atlantic Richfield Co.. 523,300 531,037
16,600 Enron Corp............. 587,956 622,500
4,500 Mobil Corp............. 389,277 469,688
8,800 Texaco Inc............. 556,823 651,200
----------- -----------
2,057,356 2,274,425
----------- -----------
PHARMACEUTICALS -- 2.18%
19,500 Ivax Corp.............. 433,830 519,187
10,100 Pfizer Inc............. 416,141 585,800
----------- -----------
849,971 1,104,987
----------- -----------
RETAIL -- 4.11 %
16,400 Kroger Co.++........... 389,500 549,400
10,200 May Department Stores Co. 361,828 444,975
28,000 Price/Costco Inc.++.... 394,625 465,500
22,500 Revco D.S. Inc.++...... 469,063 621,563
----------- -----------
1,615,016 2,081,438
----------- -----------
TRANSPORTATION -- 0.58%
6,400 Kansas City Southern
Industries, Inc...... 290,401 296,000
----------- -----------
See accompanying notes to financial statements.
50
<PAGE>
IBJ FUNDS Trust
GROWTH AND INCOME FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)-- NOVEMBER 30, 1995
- --------------------------------------------------------------------------------
Market
Shares Cost Value
------ ---- -----
COMMON STOCKS -- (CONTINUED)
UTILITIES -- 4.97%
9,600 AT&T Corp.............. $ 475,779 $ 633,600
13,800 Duke Power Co.......... 573,270 619,275
12,000 SBC Communications Inc. 515,443 648,000
15,400 Sprint Corp............ 474,580 616,000
----------- -----------
2,039,072 2,516,875
----------- -----------
TOTAL COMMON STOCKS.... 22,364,188 27,512,676
----------- -----------
U.S. GOVERNMENT AND
AGENCY OBLIGATIONS -- 27.38%
GOVERNMENT AGENCY OBLIGATIONS -- 12.34%
$2,000,000 Federal Home Loan Bank
Discount Notes,
02/16/1996........... 1,976,344 1,975,906
500,000 Federal Home Loan Bank
Medium Term Notes,
6.07%, 06/30/2003.... 488,551 505,695
350,000 Tennessee Valley Authority
Notes, 7.625%,
09/15/1999........... 353,789 354,375
750,000 Federal Home Loan
Mortgage Corp.,
6.54%, 03/21/2001.... 736,930 759,675
500,000 Federal Home Loan
Mortgage Corp.,
6.61%, 06/01/2000.... 505,322 508,885
500,000 Federal Home Loan
Mortgage Corp., 7.445%,
04/14/2004........... 494,219 516,420
500,500 Federal National Mortgage
Association, 6.50%,
08/25/2004........... 459,439 507,634
500,000 Federal National Mortgage
Association Medium Term
Notes, 6.08%,
09/25/2000........... 500,152 505,970
500,000 Federal National Mortgage
Association Medium Term
Notes, 7.52%, 04/23/2004 494,766 518,825
23,448 Government National Mortgage
Association Pool #102470,
13.00%, 10/15/2013... 26,178 26,345
57,025 Government National Mortgage
Association Pool #55056,
13.00%, 03/15/2012... 63,718 64,148
----------- -----------
6,099,408 6,243,878
----------- -----------
U.S. TREASURY OBLIGATIONS -- 15.04%
$ 500,000 Notes, 6.875%, 07/31/1999 509,054 522,160
1,500,000 Notes, 7.00%, 04/15/1999 1,532,221 1,568,730
1,500,000 Notes, 6.375%, 08/15/2002 1,521,557 1,560,585
1,250,000 Notes, 6.25%, 02/15/2003 1,270,695 1,291,487
750,000 Notes, 7.25%, 08/15/2004 793,359 824,033
1,500,000 Notes, 6.50%, 05/15/2005 1,558,255 1,577,940
250,000 Notes, 6.50%, 08/15/2005 258,738 263,045
----------- -----------
7,443,879 7,607,980
----------- -----------
TOTAL U.S. GOVERNMENT AND
AGENCY OBLIGATIONS .. 13,543,287 13,851,858
----------- -----------
CORPORATE OBLIGATIONS -- 14.68%
AUTOMOBILES -- 1.22%
250,000 GMAC Notes, 7.00%,
03/01/2000........... 251,317 258,437
350,000 GMAC Notes, 6.625%,
10/01/2002........... 350,454 356,562
----------- -----------
601,771 614,999
----------- -----------
BANKING -- 1.83%
500,000 BankAmerica Corp. Medium
Term Notes, 7.125%,
05/12/2005........... 505,905 524,375
400,000 Old Kent Financial Sub. Notes,
6.625%, 11/15/2005... 397,808 401,000
----------- -----------
903,713 925,375
----------- -----------
CHEMICALS -- 0.86%
250,000 Dupont El de Nemours Medium
Term Notes, 8.35%,
05/15/1998........... 252,394 264,062
150,000 International Minerals &
Chemicals Debs.,
9.875%, 03/15/2011... 157,954 168,938
----------- -----------
410,348 433,000
----------- -----------
COMPUTERS -- 0.21%
100,000 IBM Corp. Notes, 7.25%,
11/01/2002........... 99,828 106,000
----------- -----------
DURABLE GOODS -- 0.45%
215,000 Xerox Corp. Debs., 9.625%,
09/01/1997........... 221,382 228,706
----------- -----------
FINANCIAL SERVICES -- 1.91 %
250,000 Associates Corp. N.A. Sr. Notes,
7.50%, 04/15/2002.... 251,367 267,500
250,000 Commercial Credit Co. Notes,
6.375%, 09/15/2002... 250,000 254,687
See accompanying notes to financial statements.
51
<PAGE>
IBJ FUNDS Trust
GROWTH AND INCOME FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)-- NOVEMBER 30, 1995
- --------------------------------------------------------------------------------
Market
Shares Cost Value
------ ---- -----
CORPORATE OBLIGATIONS (CONTINUED)
FINANCIAL SERVICES -- (CONTINUED)
150,000 ITT Financial Debs., 9.375%,
12/15/2001........... $ 161,447 $ 175,125
250,000 JP Morgan Sub Notes, 7.625%,
09/15/2004........... 248,077 270,312
----------- -----------
910,891 967,624
----------- -----------
OIL/GAS -- 2.33%
$350,000 Amoco Canada Debs., 7.95%,
10/01/2022........... 362,758 387,625
250,000 British Gas Financial Debs.,
8.75%, 03/15/1998.... 254,952 265,625
250,000 Exxon Capital Corp. Debs.,
7.75%, 02/14/1996.... 250,114 251,018
250,000 Hydro Quebec Medium Term
Notes, 8.59%, 08/22/2001 251,404 276,250
----------- -----------
1,119,228 1,180,518
----------- -----------
TRANSPORTATION -- 1.23%
300,000 Canadian National Railway Notes,
7.00%, 03/15/2004.... 303,905 307,125
300,000 CSX Corp Notes, 7.00%,
09/15/2002........... 299,280 314,625
----------- -----------
603,185 621,750
----------- -----------
UTILITIES -- 4.64%
300,000 Central Power & Light Notes,
6.875%, 02/01/2003... 308,208 310,125
250,000 Cincinnati Gas & Electric Notes,
6.45%, 02/15/2004.... 249,875 249,062
250,000 Delmarva Power & Light Notes,
6.40%, 07/01/2003.... 248,472 251,563
400,000 Illinois Power Notes, 6.50%,
08/01/2003........... 402,331 405,204
300,000 Pacific Gas & Electric Medium
Term Notes, 9.08%,
12/15/1997........... 306,029 318,375
420,000 Philadelphia Electric Notes,
6.625%, 03/01/2003... 420,000 424,200
400,000 Philadelphia Electric Notes,
6.375%, 08/15/2005... 392,988 393,000
----------- -----------
2,327,903 2,351,529
----------- -----------
TOTAL CORPORATE
OBLIGATIONS 7,198,249 7,429,501
----------- -----------
MUNICIPAL OBLIGATIONS -- 0.82%
$ 377,000 Halifax NC Regional Economic
Development Notes,
9.25%, 10/01/2005.... 383,711 416,114
----------- -----------
TOTAL MUNICIPAL
OBLIGATIONS 383,711 416,114
----------- -----------
SUPRA-NATIONAL OBLIGATIONS -- 0.53%
250,000 African Development Bank
Sub. Notes, 7.70%,
07/15/2002........... 260,887 269,688
----------- ------------
TOTAL SUPRA NATIONAL
OBLIGATIONS ......... 260,887 269,688
----------- -----------
SHORT TERM INVESTMENTS -- 1.97%
998,549 TempCash Provident Money
Market Investment Fund 998,549 998,549
----------- -----------
TOTAL SHORT TERM
INVESTMENTS ......... 998,549 998,549
----------- -----------
TOTAL
INVESTMENTS-- 99.76% $44,748,871+ 50,478,386
===========
CASH AND OTHER ASSETS
NET OF LIABILITIES-- 0.24% 119,947
-----------
NET ASSETS-- 100.00% .. $50,598,333
===========
+ Cost for book and tax purposes is the same.
++ Non-income producing security.
See accompanying notes to financial statements.
52
<PAGE>
IBJ FUNDS Trust
PORTFOLIO OF INVESTMENTS (CONTINUED)-- NOVEMBER 30, 1995
- --------------------------------------------------------------------------------
*CREDIT RATINGS GIVEN BY STANDARD & POOR'S CORPORATION AND MOODY'S INVESTORS
SERVICE INC. (UNAUDITED)
STANDARD & POOR'S MOODY'S
- --------------- -------
A1 P1 Instrument of the highest quality.
AAA Aaa Instrument judged to be of the highest
quality and carrying the smallest amount
of investment risk.
AA Aa Instrument judged to be of high quality by
all standards.
A A Instrument judged to be adequate by all
standards.
BBB Baa Instrument judged to be of modest quality
by all standards.
NR NR Not Rated. In the opinion of the Investment
Adviser, instrument judged to be of
comparable investment quality to rated
securities which may be purchased by the
Fund.
For items possessing the strongest investment attributes of their category,
Moody's gives that letter rating followed by a number. The Standard & Poor's
ratings may be modified by the addition of a plus or minus sign to show relative
standing within the major rating categories.
U.S. Government Issues have an assumed rating of AAA/Aaa.
See accompanying notes to financial statements.
53
<PAGE>
IBJ FUNDS Trust
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RESERVE MONEY CORE EQUITY GROWTH AND
MARKET FUND BOND FUND FUND INCOME FUND
----------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
ASSETS
Investments, at value (cost $28,675,036, $25,992,064,
$70,306,919, $44,748,871)............................. $28,675,036 $26,714,169 $86,644,382 $50,478,386
Cash.................................................... 260,756 6,053 11,512 8,747
Receivable for investments sold......................... 0 264,460 57,783 281,795
Receivable for Fund shares sold......................... 0 4,538 14,424 34,791
Interest receivable..................................... 2,055 440,450 9,685 293,609
Dividends receivable.................................... 0 0 190,969 62,370
Receivable from sponsor (Note 3)........................ 46,886 0 0 0
Deferred organization expenses (Note 2e)................ 23,987 23,987 23,987 23,987
----------- ----------- ----------- -----------
Total assets........................................ 29,008,720 27,453,657 86,952,742 51,183,685
----------- ----------- ----------- -----------
LIABILITIES
Payable for investments purchased....................... 0 514,109 181,856 443,380
Payable for Fund shares redeemed........................ 0 623 12,516 31,920
Income distribution payable (Note 2c)................... 0 0 0 0
Advisory fee payable (Note 3)........................... 7,097 8,722 34,497 20,467
Administrative fee payable (Note 3)..................... 3,551 3,271 10,349 6,146
Accrued expenses........................................ 42,365 64,085 100,786 83,439
----------- ----------- ----------- -----------
Total liabilities................................... 53,013 590,810 340,004 585,352
----------- ----------- ----------- -----------
NET ASSETS.............................................. $28,955,707 $26,862,847 $86,612,738 $50,598,333
=========== =========== =========== ===========
NET ASSETS CONSIST OF:
Capital Stock, $.001 par value
per share; (unlimited shares authorized).............. $ 28,959 $ 2,507 $ 6,677 $ 4,293
Additional paid-in capital.............................. 28,929,682 25,183,688 66,373,741 43,704,123
Accumulated undistributed/(excess distributions of) net
investment income..................................... 0 0 839,554 (12,866)
Accumulated undistributed net realized gain/(loss) on investments (2,934) 954,547 3,055,303 1,173,268
Net unrealized appreciation of investments.............. 0 722,105 16,337,463 5,729,515
----------- ----------- ----------- -----------
NET ASSETS.............................................. $28,955,707 $26,862,847 $86,612,738 $50,598,333
=========== =========== =========== ===========
SHARES OF BENEFICIAL INTEREST
Premium Class:
Net assets.............................................. $ 13,123 $ 14,091 $ 16,292 $ 15,166
=========== =========== =========== ===========
Shares of beneficial interest outstanding............... 13,124 1,315 1,256 1,287
=========== =========== =========== ===========
Net asset value per share (Net Assets / Shares Outstanding) $ 1.00 $ 10.72 $ 12.97 $ 11.78
Service Class:
Net assets.............................................. $28,942,584 $26,848,756 $86,596,446 $50,583,167
=========== =========== =========== ===========
Shares of beneficial interest outstanding............... 28,945,517 2,505,331 6,675,290 4,292,094
=========== =========== =========== ===========
Net asset value per share (Net Assets / Shares Outstanding) $ 1.00 $ 10.72 $ 12.97 $ 11.79
See accompanying notes to financial statements.
</TABLE>
54
<PAGE>
IBJ FUNDS Trust
STATEMENT OF OPERATIOINS
FOR THE PERIOD FEBRUARY 1, 1995* TO NOVEMBER 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RESERVE MONEY CORE EQUITY GROWTH AND
MARKET FUND BOND FUND FUND INCOME FUND
------------ ---------- ---------- ----------
<S> <C> <C> <C> <C>
Investment income:
Interest income....................................... $1,262,054 $ 1,306,925 $ 168,231 $1,080,474
Dividend income....................................... 0 0 1,246,534 383,216
---------- ---------- ----------- ----------
Total Income........................................ 1,262,054 1,306,925 1,414,765 1,463,690
---------- ---------- ----------- ----------
Expenses:
Advisory (Note 3)..................................... 74,958 96,897 387,797 214,009
Administrative services (Note 3)...................... 31,630 29,070 97,007 53,463
Fund accounting fees and expenses (Note 3)............ 26,667 30,757 27,854 40,164
Audit................................................. 11,000 18,000 18,000 18,000
Legal................................................. 12,005 10,276 31,814 19,405
Registration.......................................... 9,250 9,833 22,375 13,042
Custodian fees........................................ 6,000 6,672 21,000 10,333
Amortization of organization expense.................. 4,788 4,788 4,788 4,788
Printing.............................................. 4,109 4,109 4,411 4,109
Trustees'............................................. 3,975 3,975 3,975 3,975
Insurance............................................. 2,416 2,341 7,693 3,837
Transfer and shareholder servicing agent (Note 3)..... 2,958 2,567 2,215 2,125
Miscellaneous......................................... 3,781 18,700 10,723 22,754
---------- ---------- ----------- ----------
Total expenses before waivers/reimbursements........ 193,537 237,985 639,652 410,004
Less expenses waived/reimbursed..................... (58,589) (19,383) (64,441) (35,817)
---------- ---------- ----------- ----------
Net expenses........................................ 134,948 218,602 575,211 374,187
---------- ---------- ----------- ----------
Net investment income................................... 1,127,106 1,088,323 839,554 1,089,503
---------- ---------- ----------- ----------
Net realized and unrealized gain/(loss) on investments:
Net realized gain/(loss) on investments................. (2,934) 954,547 3,055,303 1,173,268
Net increase in unrealized appreciation of investments.. 0 722,105 16,337,463 5,729,515
---------- ---------- ----------- ----------
Net realized and unrealized gain/(loss) on investments (2,934) 1,676,652 19,392,766 6,902,783
---------- ---------- ----------- ----------
Net increase in net assets resulting from operations.... $1,124,172 $ 2,764,975 $20,232,320 $7,992,286
========== ========== =========== ==========
*Commencement of Operations.
See accompanying notes to financial statements.
</TABLE>
55
<PAGE>
IBJ FUNDS Trust
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD FEBRUARY 1, 1995* TO NOVEMBER 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RESERVE MONEY CORE EQUITY GROWTH AND
MARKET FUND BOND FUND FUND INCOME FUND
------------ ---------- ---------- ----------
<S> <C> <C> <C> <C>
Operations:
Net investment income............................... $ 1,127,106 $ 1,088,323 $ 839,554 $ 1,089,503
Net realized gain/(loss) on investments............. (2,934) 954,547 3,055,303 1,173,268
Net change in unrealized appreciation of investments 0 722,105 16,337,463 5,729,515
----------- ----------- ----------- -----------
Net increase in net assets resulting from operations.... 1,124,172 2,764,975 20,232,320 7,992,286
----------- ----------- ----------- -----------
Dividends to shareholders from net investment income:
Premium Class....................................... (564) (623) 0 (348)
Service Class....................................... (1,126,542) (1,087,700) 0 (1,102,021)
----------- ----------- ----------- -----------
Decrease in net assets resulting from dividends
to shareholders................................... (1,127,106) (1,088,323) 0 (1,102,369)
----------- ----------- ----------- -----------
Capital Share Transactions:
Proceeds from sales of shares:
Premium Class....................................... 60 60 60 60
Service Class....................................... 66,759,082 29,612,433 89,149,468 48,843,232
----------- ----------- ----------- -----------
66,759,142 29,612,493 89,149,528 48,843,292
----------- ----------- ----------- -----------
Net asset value of shares issued to shareholders in
reinvestment of dividends:
Premium Class....................................... 564 623 0 348
Service Class....................................... 1,126,542 1,087,700 0 1,102,021
----------- ----------- ----------- -----------
1,127,106 1,088,323 0 1,102,369
----------- ----------- ----------- -----------
Net asset value of shares redeemed:
Premium Class....................................... 0 0 0 0
Service Class....................................... (38,952,607) (5,539,621) (22,794,110) (6,262,245)
----------- ----------- ----------- -----------
(38,952,607) (5,539,621) (22,794,110) (6,262,245)
----------- ----------- ----------- -----------
Net increase in net assets from capital share
transactions ..................................... 28,933,641 25,161,195 66,355,418 43,683,416
----------- ----------- ----------- -----------
Total increase in net assets............................ 28,930,707 26,837,847 86,587,738 50,573,333
Net assets:
Beginning of period................................. 25,000 25,000 25,000 25,000
----------- ----------- ----------- -----------
End of period (includes undistributed/(excess distributions
of) net investment income of $0, $0, $839,554 and
$(12,866), respectively).......................... $28,955,707 $26,862,847 $86,612,738 $50,598,333
=========== =========== =========== ===========
*Commencement of Operations.
</TABLE>
See accompanying notes to financial statements.
56
<PAGE>
IBJ FUNDS Trust
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 1 -- DESCRIPTION. IBJ FUNDS Trust (the "Trust") is registered under
the Investment Company Act of 1940, as amended, as an open-end diversified
management investment company and currently consists of four separate investment
portfolios: IBJ Reserve Money Market Fund, IBJ Bond Fund, IBJ Core Equity Fund
and IBJ Growth and Income Fund, each with two (2) classes of shares known as the
Premium Class and the Service Class. Each class of shares outstanding bears the
same voting, dividend, liquidation and other rights and conditions, except that
the expenses incurred in the distribution and marketing of such shares are
different for each class. The Premium Class may be subject to a 12b-1 fee of up
to 0.35% of average daily net assets and a shareholder servicing fee of up to
0.50% of average daily net assets. Currently, the 12b-1 and shareholder
servicing fees are not being charged. The Service Class will not be subject to
such fees.
NOTE 2-- SIGNIFICANT ACCOUNTING POLICIES. The following is a summary of the
significant accounting policies followed by the Funds:
(a) PORTFOLIO VALUATION. The net asset value per share of the Funds is
calculated as of 12:00 noon (Eastern time) for the Money Market Fund and as
of 4:15 p.m. (Eastern time) for each of the non-money market funds.
Securities listed on an exchange are valued on the basis of the last sale
prior to the time the valuation is made. If there has been no sale since
the immediately previous valuation, then the current bid price is used.
Quotations are taken from the exchange where the security is primarily
traded. Portfolio securities which are primarily traded on foreign
exchanges may be valued with the assistance of a pricing service and are
generally valued at the preceding closing values of such securities on
their respective exchanges. Over the counter securities are valued on the
basis of the bid price at the close of business on each business day.
Securities for which market quotations are not readily available are valued
at fair value as determined in good faith by or at the direction of the
Board of Trustees. The Money Market Fund uses the amortized cost method to
value its portfolio securities, in accordance with Rule 2a-7 under the
Investment Company Act of 1940, as amended, and seeks to maintain a
constant net asset value of $1.00 per share, although there may be
circumstances under which this goal cannot be achieved. The amortized cost
method involves valuing a security at its cost and amortizing any discount
or premium over the period until maturity, regardless of impact of
fluctuating interest rates on the market value of the security.
(b) SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions
are recorded on a trade date basis. Realized gains and losses from
securities transactions are recorded on the identified cost basis. Dividend
income is recognized on the ex-dividend date and interest income, including
amortization of premium and accretion of discount, is accrued daily.
(c) DISTRIBUTIONS TO SHAREHOLDERS. The Reserve Money Market Fund and Bond
Fund each declare dividends from net investment income daily and distribute
those dividends monthly. The Core Equity Fund will declare and pay
dividends annually and the Growth and Income Fund declares and pays
dividends quarterly. Distributions of net realized gains will be declared
and paid annually by each Fund. Distributions are recorded on the
ex-dividend date.
(d) FEDERAL INCOME TAXES. It is the policy of each of the Funds to qualify
as a "regulated investment company" under Subchapter M of the Internal
Revenue Code of 1986, as amended. By so qualifying, the Funds will not be
subject to Federal income taxes to the extent that they distribute all of
their taxable income for the fiscal year. The Funds also intend to meet the
distribution requirements to avoid the payment of an excise tax.
(e) ORGANIZATION EXPENSES. Costs incurred in connection with the
organization and initial registration of the Funds have been deferred and
are being amortized on a straight-line basis over sixty months beginning
with each Fund's commencement of operations. In the event any of the
initial shares of any of the Funds, which were purchased by Furman Selz
Incorporated ("Furman Selz"), are redeemed, the appropriate Fund will be
reimbursed for any unamortized organization expenses in the same proportion
as the number of shares redeemed bears to the number of initial shares held
at the time of redemption.
57
<PAGE>
IBJ FUNDS Trust
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
(f) DETERMINATION OF NET ASSET VALUE AND CALCULATION OF EXPENSES. Expenses
directly attributable to a Fund are charged to that Fund. Other expenses
are allocated proportionately among each Fund within the Trust in relation
to the net assets of each Fund or on another reasonable basis. In
calculating net asset value per share of each class, investment income,
realized and unrealized gains and losses and expenses other than class
specific expenses, are allocated daily to each class of shares based upon
the proportion of net assets of each class at the beginning of each day.
NOTE 3 -- INVESTMENT ADVISORY, ADMINISTRATIVE AND OTHER TRANSACTIONS WITH
AFFILIATES. IBJ Schroder Bank & Trust Company ("IBJS") (the "Adviser") provides
investment advisory services to the Funds pursuant to an Advisory Agreement with
the Trust (the "Advisory Agreement"). Subject to such policies as the Trust's
Board of Trustees may determine, IBJS makes investment decisions for the Funds.
For the advisory services it provides to the Funds, IBJS receives fees based on
average daily net assets up to the following annualized rates: Reserve Money
Market Fund, 0.35%; Bond Fund, 0.50%; Core Equity Fund, 0.60%; and Growth and
Income Fund, 0.60%. For the period ended November 30, 1995, the Adviser earned
fees of $74,958, $96,897, $387,797 and $214,009 for the Reserve Money Market
Fund, Bond Fund, Core Equity Fund and Growth and Income Fund, respectively. The
Adviser has voluntarily waived fees of $11,703, $19,383, $64,441 and $35,817 for
the Reserve Money Market Fund, Bond Fund, Core Equity Fund, and Growth and
Income Fund, respectively.
The Funds have also entered into an Administrative Service Contract with
Furman Selz (the "Administrator") pursuant to which Furman Selz provides certain
management and administrative services necessary for the Funds' operations
including: (i) general supervision of the operation of the Funds including
coordination of the services performed by the Funds' Adviser, transfer agent,
custodian, independent accountants and legal counsel, regulatory compliance,
including the compilation of information for documents such as reports to, and
filings with, the SEC and state securities commissions, and preparation of proxy
statements and shareholder reports for the Funds; (ii) general supervision
relative to the compilation of data required for the preparation of periodic
reports distributed to the Funds' Officers and Board of Trustees; and (iii)
furnishing office space and certain facilities required for conducting the
business of the Funds. For these services, Furman Selz receives from each Fund a
fee, payable monthly, at the annual rate of 0.15% of each Fund's average daily
net assets. For Administrative Services provided, Furman Selz earned fees of
$31,630, $29,070, $97,007 and $53,463 for the Reserve Money Market Fund, Bond
Fund, Core Equity Fund and Growth and Income Fund, respectively. Pursuant to a
Services Agreement between the Trust and the Administrator, Furman Selz assists
the Trust with certain transfer and dividend disbursing agent functions and
receives a fee of $15 per account per year per fund plus out of pocket expenses.
For the period ended November 30, 1995, Furman Selz earned Transfer Agency fees
of $2,958, $2,567, $2,215 and $2,125 for the Reserve Money Market Fund, Bond
Fund, Core Equity Fund and Growth and Income Fund, respectively. Pursuant to a
Fund Accounting Agreement between the Trust and the Administrator, the
Administrator assists the Trust in calculating net asset values and provides
certain other accounting services for each Fund described therein, for an annual
fee of $30,000 per Fund plus out of pocket expenses. For the period ended
November 30, 1995, Furman Selz earned Fund Accounting fees and expenses of
$26,667, $30,757, $27,854 and $40,164 for the Reserve Money Market Fund, Bond
Fund, Core Equity Fund and Growth and Income Fund, respectively.
The Adviser has voluntarily agreed to cap the expense ratio for the Reserve
Money Market Fund at 0.64%. In order to maintain this ratio the Adviser has
agreed to reimburse $46,886 to the Fund.
Certain of the states in which the shares of the Funds are qualified for
sale impose limitations on the expenses of funds. If, in any fiscal year, the
total expenses of the Fund (excluding taxes, interest, distribution expenses,
brokerage commissions, certain portfolio transaction expenses, other expenses
which are capitalized in accordance with generally accepted accounting
58
<PAGE>
IBJ FUNDS Trust
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
principles and extraordinary expenses, but including advisory and administrative
services fees) exceed the expense limitation applicable to the Funds imposed by
the securities regulation of any state, the Adviser will pay or reimburse the
Funds to the extent of advisory fees earned. No such amounts were required to be
reimbursed for the current period.
The Trust has adopted a distribution and service plan (the "Plan") pursuant
to Rule 12b-1 under the Investment Company Act of 1940 for each Fund of the
Trust. There are no fees or expenses chargeable to the Trust under the Plan and
the Trust's Board of Trustees has adopted the Plan in case certain expenses of
the Trust might be considered to constitute indirect payments by the Trust of
distribution expenses. IBJ Funds Distributor, Inc. (the "Distributor"), an
affiliate of Furman Selz serves as the exclusive Distributor of the shares of
each Fund pursuant to its Distribution Agreement with the Trust.
NOTE 4 -- SECURITIES TRANSACTIONS.
(a) PURCHASE AND SALE TRANSACTIONS. The aggregate amount of purchases and
sales of investment securities, other than short-term securities, for the period
ended November 30, 1995 were as follows:
<TABLE>
<CAPTION>
COMMON STOCKS & BONDS U.S. GOVERNMENT OBLIGATIONS
------------------------------ ------------------------------
PURCHASES SALES PURCHASES SALES
----------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
Bond Fund......................................... $14,373,522 $ 3,259,270 $68,695,946 $55,361,447
Core Equity Fund.................................. 92,741,272 27,606,488 0 0
Growth and Income Fund............................ 38,786,295 8,978,221 30,041,652 19,210,190
</TABLE>
(b) FEDERAL INCOME TAX BASIS. Gross unrealized appreciation and
depreciation on investment securities at November 30, 1995, based on cost for
Federal income tax purposes, is as follows:
<TABLE>
<CAPTION>
NET
GROSS GROSS UNREALIZED
UNREALIZED UNREALIZED APPRECIATION/
APPRECIATION DEPRECIATION (DEPRECIATION)
----------- ----------- -----------
<S> <C> <C> <C>
Bond Fund................................................ .$ 722,917 $ (812) $ 722,105
Core Equity Fund.......................................... 16,383,782 (46,319) 16,337,463
Growth and Income Fund.................................... 5,754,555 (25,040) 5,729,515
</TABLE>
59
<PAGE>
IBJ FUNDS Trust
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
NOTE 5 -- CAPITAL SHARE TRANSACTIONS. The Trust is authorized to issue an
unlimited number of shares of beneficial interest with a par value of $0.001
each. Transactions in shares of the Funds are as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD FEBRUARY 1, 1995* TO NOVEMBER 30, 1995
-----------------------------------------------------------
RESERVE GROWTH AND
MONEY MARKET BOND CORE EQUITY INCOME
FUND FUND FUND FUND
------------ ---------- ---------- ----------
<S> <C> <C> <C> <C>
PREMIUM CLASS
Shares at beginning of period............................. 12,500 1,250 1,250 1,250
----------- --------- --------- ---------
Shares sold............................................... 60 6 6 6
Shares issued in reinvestment of dividends from net
investment income...................................... 564 59 0 31
----------- --------- --------- ---------
Net increase in shares.................................... 624 65 6 37
----------- --------- --------- ---------
Shares at end of period................................... 13,124 1,315 1,256 1,287
=========== ========= ========= =========
SERVICE CLASS
Shares at beginning of period............................. 12,500 1,250 1,250 1,250
----------- --------- --------- ---------
Shares sold............................................... 66,759,082 2,930,127 8,685,326 4,761,936
Shares issued in reinvestment of dividends from net
investment income...................................... 1,126,542 103,626 0 98,242
Shares redeemed........................................... (38,952,607) (529,672) (2,011,286) (569,334)
----------- --------- --------- ---------
Net increase in shares.................................... 28,933,017 2,504,081 6,674,040 4,290,844
----------- --------- --------- ---------
Shares at end of period................................... 28,945,517 2,505,331 6,675,290 4,292,094
=========== ========= ========= =========
*Commencement of Operations.
</TABLE>
60
<PAGE>
<TABLE>
<CAPTION>
IBJ FUNDS Trust
FINANCIAL HIGHLIGHTS
FOR THE PERIOD FEBRUARY 1, 1995 (COMMENCEMENT OF OPERATIONS) TO NOVEMBER 30, 1995
- ---------------------------------------------------------------------------------
RESERVE MONEY GROWTH AND
MARKET FUND BOND FUND CORE EQUITY FUND INCOME FUND
------------------ ------------------ ------------------ ------------------
PREMIUM SERVICE PREMIUM SERVICE PREMIUM SERVICE PREMIUM SERVICE
CLASS CLASS CLASS CLASS CLASS CLASS CLASS CLASS
------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period... $ 1.00 $ 1.00 $10.00 $10.00 $10.00 $ 10.00 $10.00 $ 10.00
------ ------ ------ ------- ------ ------- ------ -------
Income from Investment Operations:
Net investment income.............. 0.04 0.04 0.48 0.48 0.13 0.13 0.27 0.31
Net realized and unrealized gain/
(loss) on investments............ 0 00 0.00 0.72 0.72 2.84 2.84 1.79 1.79
------ ------ ------ ------- ------ ------- ------ -------
Total from Investment Operations... 0.04 0.04 1.20 1.20 2.97 2.97 2.06 2.10
------ ------ ------ ------- ------ ------- ------ -------
Less Distributions:
Dividends from net investment income (0.04) (0.04) (0.48) (0.48) 0.00 0.00 (0.28) (0.3)
------ ------ ------ ------- ------ ------- ------ -------
Net Asset Value, End of Period......... $ 1.00 $ 1.00 $10.72 $ 10.72 $12.97 $ 12.97 $11.78 $ 11.79
====== ====== ====== ======= ====== ======= ====== =======
Total Return........................... 4.55% 4.55% 12.28% 12.28% 29.70% 29.70% 20.72% 20.82%
Net Assets, End of Period (in thousands) $13 $28,943 $14 $26,849 $16 $86,596 $15 $50,583
Ratios to average net assets of:
Net investment income.............. 5.35%* 5.35%* 5.59%* 5.59%* 1.30%* 1.29%* 3.04%* 3.04%*
Expenses before waivers/reimbursements 0.92 %*0.92 %*1.22 %*1.22 %*0.99 %*0.99 %*1.14 %*1.15 %*
Expenses net waivers/reimbursements 0.64 %*0.64 %*1.12 %*1.12 %*0.89 %*0.89 %*1.04 %*1.05 %*
Portfolio Turnover Rate................ N/A N/A 297% 297% 37% 37% 78% 78%
- ------------------
+ Per share amounts based on the average number of shares outstanding during the
period February 1, 1995 (Commencement of Operations) to November 30, 1995.
* Annualized.
</TABLE>
See accompanying notes to financial statements.
61
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To The Shareholders and Board of Trustees of IBJ Funds Trust:
We have audited the accompanying statement of assets and liabilities of IBJ
Funds Trust, comprised of the IBJ Reserve Money Market Fund, IBJ Bond Fund, IBJ
Core Equity Fund and IBJ Growth and Income Fund, including the portfolios of
investments, as of November 30, 1995, and the related statements of operations,
changes in net assets and the financial highlights for the period February 1,
1995 (commencement of operations) to November 30, 1995. These financial
statements and financial highlights are the responsibility of the Trust's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
November 30, 1995 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
each of the respective funds constituting IBJ Funds Trust as of November 30,
1995, the results of their operations, the changes in their net assets and their
financial highlights for the period February 1, 1995 (commencement of
operations) to November 30, 1995, in conformity with generally accepted
accounting principles.
Coopers & Lybrand L.L.P.
New York, New York
January 12, 1996
62
<PAGE>
PART C. OTHER INFORMATION
Item 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) (1) Financial Statements included in Part A of this
Registration Statement: Financial Highlights
(2) Financial Statements included in Part B of this
Registration Statement:
Statement of Assets and Liabilities at
November 30, 1995
Statement of Operations for the period
February 1, 1995 (commencement of operations)
to November 30, 1995
Statement of Changes in Net Assets for the
period February 1, 1995 (commencement of
operations) to November 30, 1995
Notes to Financial Statements
Financial Highlights for the period February
1, 1995 (commencement of operations) to
November 30, 1995
(b) EXHIBITS
(1) Trust Instrument.
(2) Bylaws of Registrant.
(3) None.
(4) None.
(5)(a) Form of Master Investment Advisory Contract and
Supplements between Registrant and IBJ
Schroder Bank & Trust Company.
(5)(b) Form of Master Administration Contract and Supplements
between Registrant and Furman Selz
Incorporated.
(6) Form of Master Distribution Contract and Supplements
between Registrant and IBJ Funds
Distributor, Incorporated.
(7) None.
<PAGE>
(8) Form of Custodian Contract between Registrant and IBJ
Schroder Bank & Trust Company.
(9)(a) Form of Transfer Agency and Service Agreement between
Registrant and Furman Selz Incorporated.
(10) Opinion and Consent of Baker & McKenzie, counsel to
Registrant.
(11) Consent of Coopers & Lybrand L.L.P. Independent
Accountants.
(12) None.
(13) Subscription Agreement.
(14) None.
(15) None.
(16) Schedule of Computation of Performance Calculation.
(to be filed by Amendment)
(18) Form of Rule 18f-3 Plan
(27) Financial Data Schedule
OTHER EXHIBITS
(99) Power of Attorney
- 1 -
<PAGE>
Item 25. Persons Controlled by or under Common Control with REGISTRANT.
None.
Item 26. NUMBER OF HOLDERS OF SECURITIES AT MARCH 4, 1996
------------------------------------------------
Reserve Money Market Fund 111
Bond Fund 39
Core Equity Fund 64
Growth and Income Fund 32
Item 27. INDEMNIFICATION.
As permitted by Section 17(h) and (i) of the Investment
Company Act of 1940 (the "1940 Act") and pursuant to Article [X] of the
Registrant's Trust Instrument (Exhibit 1 to the Registration Statement), Section
4 of the Master Investment Advisory Contract between Registrant and IBJ Schroder
Bank & Trust Company (Exhibit 5(a) to this Registration Statement), and Section
9 of the Master Distribution Contract between Registrant and IBJ Funds
Distributor Inc. (Exhibit 6 to this Registration Statement), officers, trustees,
employees and agents of the Registrant will not be liable to the Registrant, any
shareholder, officer, trustee, employee, agent or other person for any action or
failure to act, except for bad faith, willful misfeasance, gross negligence or
reckless disregard of duties, and those individuals may be indemnified against
liabilities in connection with the Registrant, subject to the same exceptions.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Securities Act") may be permitted to trustees,
officers and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant understands that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
-2-
<PAGE>
as expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a trustee, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such trustee, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The Registrant purchased an insurance policy insuring its
officers and trustees against liabilities, and certain costs of defending claims
against such officers and trustees, to the extent such officers and trustees are
not found to have committed conduct constituting willful misfeasance, bad faith,
gross negligence or reckless disregard in the performance of their duties. The
insurance policy also insures the Registrant against the cost of indemnification
payments to officers under certain circumstances.
Section 4 of the Master Investment Advisory Contract between
Registrant and IBJ Schroder Bank & Trust Company and Section 9 of the Master
Distribution Contract between Registrant and IBJ Funds Distributor Inc. limit
the liability of IBJ Schroder Bank & Trust Company and IBJ Funds Distributor
Incorporated liabilities arising from willful misfeasance, bad faith or gross
negligence in the performance of their respective duties or from reckless
disregard by them of their respective obligations and duties under the
agreements.
The Registrant hereby undertakes that it will apply the
indemnification provisions of its Declaration of Trust, By-Laws, Investment
Advisory Contracts and Distribution Contract in a manner consistent with Release
No. 11330 of the Securities and Exchange Commission under the 1940 Act so long
as the interpreta tions of Section 17(h) and 17(i) of such Act remain in effect
and are consistently applied.
-3-
<PAGE>
Item 28. BUSINESS AND OTHER CONNECTIONS OF IBJ SCHRODER BANK & TRUST
COMPANY
IBJ Schroder Bank & Trust Company is a subsidiary of The
Industrial Bank of Japan, Limited, a bank holding company
headquartered in Japan. IBJ Schroder Bank & Trust Company
provides investment advisory services to the Funds pursuant to
an Advisory Agreement with the Trust.
The executive officers of IBJ Schroder Bank & Trust Company
and The Industrial Bank of Japan, Limited and such executive
officers' positions during the past five years are as follows:
NAME POSITION AND OFFICES
IBJ SCHRODER BANK & TRUST COMPANY
Donald H. McCree, Jr. President and Chief Executive
Officer
Alva O. Way Chairman
Eisuke Kano Vice Chairman
Dennis Buchert Executive Vice President and Chief
Banking Officer
THE INDUSTRIAL BANK OF JAPAN
Yoh Kurosawa President
Masao Nishimura Deputy President
Kunio Seiki Deputy President
Item 29. PRINCIPAL UNDERWRITER
(a) The principal underwriter is IBJ Funds Distributor, Inc.
(b) Officers and Directors
-4-
<PAGE>
POSITIONS AND
NAME AND PRINCIPAL POSITIONS AND OFFICES OFFICES WITH
BUSINESS ADDRESS* WITH REGISTRANT UNDERWRITER
- ----------------- --------------- -----------
Robert Hering None President
Michael C. Petrycki None Vice President and
Director
Gordon Forrester Vice President and Vice President
Treasurer
Lawrence Wagner Vice President and
Chief Financial
Officer
Steven D. Blecher None Vice President,
Secretary, and
Treasurer
Elizabeth Q. Solazzo None Assistant Secretary
Thalia M. Cody None Assistant Secretary
(c) Not applicable.
Item 30. LOCATION OF ACCOUNTS AND RECORDS
All accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the rules thereunder are
maintained at the offices of Furman Selz LLC.
Item 31. MANAGEMENT SERVICES
Not applicable.
- -------------------------
* 230 Park Avenue,13th Floor, New York, New York 10169.
- 5 -
<PAGE>
Item 32. UNDERTAKINGS.
(a) Registrant undertakes to call a meeting of share
holders for the purpose of voting upon the removal of
a trustee if requested to do so by the holders of at
least 10% of the Registrant's outstanding shares.
(b) Registrant undertakes to provide the support to
shareholders specified in Section 16(c) of the 1940
Act as though that section applied to the Registrant.
(c) Inapplicable
- 6 -
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and
the Investment Company Act of 1940, the Registrant hereby certifies that it
meets all of the requirements for effectiveness of this Amendment to the
Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933
and has duly caused this Amendment to the Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of New
York, and State of New York, on March 27, 1996.
IBJ FUNDS TRUST
By:/s/ JOHN J. PILEGGI
John J. Pileggi, President
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/JOHN J. PILEGGI
_____________________ President and
John J. Pileggi Trustee March 27, 1996
/s/ROBERT H. DUNKER
_____________________
Robert H. Dunker Trustee March 27, 1996
*STEPHEN V.R. GOODHUE
_____________________
Stephen V.R. Goodhue Trustee March 27, 1996
*EDWARD F. RYAN
_____________________
Edward F. Ryan Trustee March 27, 1996
*GEORGE STEWART
_____________________
George Stewart Trustee March 27, 1996
By:/s/JOHN J. PILEGGI
__________________
*John J. Pileggi
Attorney-in-Fact
- ----------------------------
*Pursuant to Power of Attorney filed with Pre-Effective Amendment No. 1.
- 7 -
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
- --------------------------------------------------------------------------------
EXHIBITS
to
POST-EFFECTIVE AMENDMENT NO. 2 TO
FORM N-1A
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
AND
THE INVESTMENT COMPANY ACT OF 1940
- --------------------------------------------------------------------------------
IBJ FUNDS TRUST
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DOCUMENT
(1) Trust Instrument.
(2) Bylaws of Registrant.
(5)(a) Form of Master Investment Advisory Contract and
Supplements between Registrant and IBJ Schroder Bank
& Trust Company.
(5)(b) Form of Master Administration Contract and Supplements
between Registrant and Furman Selz Incorporated.
(6) Form of Master Distribution Contract and Supplements
between Registrant and IBJ Funds Distributor
Incorporated.
(8) Form of Custodian Contract between Registrant and IBJ
Schroder Bank & Trust Company.
(9)(a) Form of Transfer Agency and Service Agreement between
Registrant and Furman Selz Incorporated.
(10) Opinion and Consent of Baker & McKenzie, counsel to
Registrant.
(11) Consent of Coopers & Lybrand L.L.P. Independent
Accountants.
(13) Subscription Agreement.
(16) Schedule of Computation of Performance Calculation.
(to be filed by Amendment)
(18) Form of Rule 18f-3 Plan
(27) Financial Data Schedule
OTHER EXHIBITS
(99) Power of Attorney
Exhibit 1
Trust Instrument
<PAGE>
IBJ FUNDS TRUST
TRUST INSTRUMENT
DATED AUGUST 25, 1994
<PAGE>
IBJ FUNDS TRUST
DATED AUGUST 25, 1994
TRUST INSTRUMENT, made August 25, 1994 by Gordon Forrester
(the "Trustees").
WHEREAS, the Trustees desire to establish a business trust for
the investment and reinvestment of funds contributed thereto;
NOW, THEREFORE, the Trustees declare that all money and
property contributed to the trust hereunder shall be held and managed in trust
under this Trust Instrument as herein set forth below.
<PAGE>
ARTICLE I
NAME AND DEFINITIONS
NAME
SECTION 1.01. The name of the trust created hereby is "IBJ
Funds Trust".
DEFINITIONS.
SECTION 1.02. Wherever used herein, unless otherwise required
by the context or specifically provided:
(a) "Bylaws" means the Bylaws referred to in Article IV,
Section 4.01(e) hereof, as from time to time amended;
(b) The term "Commission" has the meaning given it in the 1940
Act (as defined below). The terms "Affiliated Person", "Assignment", "Interested
Person" and "Principal Underwriter" shall have the meanings given them in the
1940 Act, as modified by or interpreted by any applicable order or orders of the
Commission or any rules or regulations adopted or interpretive
- 2 -
<PAGE>
releases of the Commission thereunder. "Majority Shareholder Vote" shall have
the same meaning as the term "vote of a majority of the outstanding voting
securities" is given in the 1940 Act, as modified by or interpreted by any
applicable order or orders of the Commission or any rules or regulations adopted
or interpretive releases of the Commission thereunder.
(c) The "Delaware Act" refers to Chapter 38 of Title 12 of the
Delaware Code entitled "Treatment of Delaware Business Trusts," as it may be
amended from time to time.
(d) "Net Asset Value" means the net asset value of each Series
(as defined below) of the Trust determined in the manner provided in Article IX,
Section 9.03 hereof;
(e) "Outstanding Shares" means those Shares shown from time to
time in the books of the Trust or its Transfer Agent as then issued and
outstanding, but shall not include Shares which have been redeemed or
repurchased by the Trust and which are at the time held in the treasury of the
Trust;
- 3 -
<PAGE>
(f) "Series" means a series of Shares (as defined below) of
the Trust established in accordance with the provisions of Article II, Section
2.06 hereof.
(g) "Shareholder" means a record owner of Outstanding Shares
of the Trust;
(h) "Shares" means the equal proportionate transferable units
of beneficial interest into which the beneficial interest of each Series of the
Trust or class thereof shall be divided and may include fractions of Shares as
well as whole Shares;
(i) The "Trust" refers to all IBJ Funds Trust Funds and
reference to a Fund, when applicable to one or more Series of the Trust, shall
refer to any such Series;
(j) The "Trustees" means the person or persons who has or have
signed this Trust Instrument, so long as he or they shall continue in office in
accordance with the terms hereof, and all other persons who may from time to
time be duly qualified and serving as Trustees in accordance with the provisions
of Article III hereof and reference herein to a Trustee or to the Trustees
- 4 -
<PAGE>
shall refer to the individual Trustees in their capacity as
Trustees hereunder;
(k) "Trust Property" means any and all property, real or
personal, tangible or intangible, which is owned or held by or for the account
of one or more of the Trust or any Series, or the Trustees on behalf of the
Trust or any Series.
(l) The "1940 Act" refers to the Investment Company Act of
1940, as amended from time to time.
ARTICLE II
BENEFICIAL INTEREST
SHARES OF BENEFICIAL INTEREST
SECTION 2.01. The beneficial interest in the Trust shall be
divided into such transferable Shares of one or more separate and distinct
Series or classes of a Series as the Trustees shall from time to time create and
establish. The number of Shares of each Series, and class thereof, authorized
- 5 -
<PAGE>
hereunder is unlimited. Each Share shall have a par value of $0.001. All Shares
issued hereunder, including without limitation, Shares issued in connection with
a dividend in Shares or a split or reverse split of Shares, shall be fully paid
and nonassessable.
ISSUANCE OF SHARES
SECTION 2.02. The Trustees in their discretion may, from time
to time, without vote of the Shareholders, issue Shares, in addition to the then
issued and outstanding Shares and Shares held in the treasury, to such party or
parties and for such amount and type of consideration, subject to applicable
law, including cash or securities, at such time or times and on such terms as
the Trustees may deem appropriate, and may in such manner acquire other assets
(including the acquisition of assets subject to, and in connection with, the
assumption of liabilities) and businesses. In connection with any issuance of
Shares, the Trustees may issue fractional Shares and Shares held in the
treasury. The Trustees may from time to time divide or combine the Shares into a
greater or lesser number without thereby changing the proportionate beneficial
interests in the
- 6 -
<PAGE>
Trust. Contributions to the Trust may be accepted for, and
Shares shall be redeemed as, whole Shares and/or 1/1,000th of a
Share or integral multiples thereof.
REGISTER OF SHARES AND SHARE CERTIFICATES
SECTION 2.03. A register shall be kept at the principal office
of the Trust or an office of the Trust's transfer agent which shall contain the
names and addresses of the Shareholders of each Series, the number of Shares of
that Series (or any class or classes thereof) held by them respectively and a
record of all transfers thereof. As to Shares for which no certificate has been
issued, such register shall be conclusive as to who are the holders of the
Shares and who shall be entitled to receive dividends or other distributions or
otherwise to exercise or enjoy the rights of Shareholders. No Shareholder shall
be entitled to receive payment of any dividend or other distribution, nor to
have notice given to him as herein or in the Bylaws provided, until he has given
his address to the transfer agent or such other officer or agent of the Trustees
as shall keep the said registrar for entry thereon. The Trustees, in their
discretion, may authorize the issuance of share certificates and promulgate
appropriate rules and regulations as
- 7 -
<PAGE>
to their use. Such certificates may be issuable for any purpose limited in the
Trustees discretion. In the event that one or more certificates are issued,
whether in the name of a shareholder or a nominee, such certificate or
certificates shall constitute evidence of ownership of Shares for all purposes,
including transfer, assignment or sale of such Shares, subject to such
limitations as the Trustees may, in their discretion, prescribe.
TRANSFER OF SHARES
SECTION 2.04. Except as otherwise provided by the Trustees,
Shares shall be transferable on the records of the Trust only by the record
holder thereof or by his agent thereunto duly authorized in writing, upon
delivery to the Trustees or the Trust's transfer agent of a duly executed
instrument of transfer, together with a Share certificate, if one is
outstanding, and such evidence of the genuineness of each such execution and
authorization and of such other matters as may be required by the Trustees. Upon
such delivery the transfer shall be recorded on the registrar of the Trust.
Until such record is made, the Shareholder of record shall be deemed to be the
holder of such Shares for all purposes hereunder and neither the Trustees nor
- 8 -
<PAGE>
the Trust, nor any transfer agent or registrar nor any officer, employee or
agent of the Trust shall be affected by any notice of the proposed transfer.
TREASURY SHARES
SECTION 2.05. Shares held in the treasury shall, until
reissued pursuant to Section 2.02 hereof, not confer any voting rights on the
Trustees, nor shall such Shares be entitled to any dividends or other
distributions declared with respect to the Shares.
ESTABLISHMENT OF SERIES
SECTION 2.06. The Trust created hereby shall consist of one or
more Series and separate and distinct records shall be maintained by the Trust
for each Series and the assets associated with any such Series shall be held and
accounted for separately from the assets of the Trust or any other Series. The
Trustees shall have full power and authority, in their sole discretion, and
without obtaining any prior authorization or vote of the Shareholders of any
Series of the Trust, to establish and designate and to change in any manner such
Series of Shares or
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any classes of initial or additional Series and to fix such preferences, voting
powers, right and privileges of such Series or classes thereof as the Trustees
may from time to time determine, to divide and combine the Shares or any Series
or classes thereof into a greater or lesser number, to classify or reclassify
any issued Shares or any Series or classes thereof into one or more Series or
classes of Shares, and to take such other action with respect to the Shares as
the Trustees may deem desirable. The establishment and designation of any Series
shall be effective upon the adoption of a resolution by a majority of the
Trustees setting forth such establishment and designation and the relative
rights and preferences of the Shares of such Series. A Series may issue any
number of Shares and need not issue shares. At any time that there are no Shares
outstanding of any particular Series previously established and designated, the
Trustees may by a majority vote abolish that Series and the establishment and
designation thereof.
All references to Shares in this Trust Instrument shall be
deemed to be Shares of any or all Series, or classes thereof, as the context may
require. All provisions herein relating to the Trust shall apply equally to each
Series of the Trust, and each class thereof, except as the context otherwise
requires.
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Each Share of a Series of the Trust shall represent an equal
beneficial interest in the net assets of such Series. Each holder of Shares of a
Series shall be entitled to receive his pro rata share of distributions of
income and capital gains, if any, made with respect to such Series. Upon
redemption of his Shares, such Shareholder shall be paid solely out of the funds
and property of such Series of the Trust.
INVESTMENT IN THE TRUST
SECTION 2.07. The Trustees shall accept investments in any
Series of the Trust from such persons and on such terms as they may from time to
time authorize. At the Trustees' discretion, such investments, subject to
applicable law, may be in the form of cash or securities in which the affected
Series is authorized to invest, valued as provided in Article IX, Section 9.03
hereof. Investments in a Series shall be credited to each Shareholder's account
in the form of full Shares at the Net Asset Value per Share next determined
after the investment is received; provided, however, that the Trustees may, in
their sole discretion, (a) fix the Net Asset Value per Share of the initial
capital contribution, (b) impose a sales charge upon investments
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in the Trust in such manner and at such time determined by the Trustees or (c)
issue fractional Shares.
ASSETS AND LIABILITIES OF SERIES
SECTION 2.08. All consideration received by the Trust for the
issue or sale of Shares of a particular Series, together with all assets in
which such consideration is invested or reinvested, all income, earnings,
profits, and proceeds thereof, including any proceeds derived from the sale,
exchange or liquidation of such assets, and any funds or payments derived from
any reinvestment of such proceeds in whatever form the same may be, shall be
held and accounted for separately from the other assets of the Trust and of
every other Series and may be referred to herein as "assets belonging to" that
Series. The assets belonging to a particular Series shall belong to that Series
for all purposes, and to no other Series, subject only to the rights of
creditors of that Series. In addition, any assets, income, earnings, profits or
funds, or payments and proceeds with respect thereto, which are not readily
identifiable as belonging to any particular Series shall be allocated by the
Trustees between and among one or more of the Series in such manner as the
Trustees, in their sole discretion, deem fair and equitable. Each such
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allocation shall be conclusive and binding upon the Shareholders of all Series
for all purposes, and such assets, income, earnings, profits or funds, or
payments and proceeds with respect thereto shall be assets belonging to that
Series. The assets belonging to a particular Series shall be so recorded upon
the books of the Trust, and shall be held by the Trustees in trust for the
benefit of the holders of Shares of that Series. The assets belonging to each
particular Series shall be charged with the liabilities of that Series and all
expenses, costs, charges and reserves attributable to that Series. Any general
liabilities, expenses, costs, changes or reserves of the Trust which are not
readily identifiable as belonging to a particular Series shall be allocated and
changed by the Trustees belonging to any one or more of the Series in such
manner as the Trustees in their sole discretion deem fair and equitable. Each
such allocation shall be conclusive and binding upon the Shareholders of all
Series for all purposes. Without limitation of the foregoing provisions of this
Section 2.08, but subject to the right of the Trustees in their discretion to
allocate general liabilities, expenses, costs, charges or reserves as herein
provided, the debts, liabilities, obligations and expenses incurred, contracted
for or otherwise existing with respect to a particular Series shall be
enforceable against the assets of such
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Series only, and not against the assets of the Trust generally. Notice of this
contractual limitation on inter-Series liabilities may, in the Trustee's sole
discretion, be set forth in the certificate of trust of the Trust (whether
originally or by amendment) as filed or to be filed in the Office of the
Secretary of State of the State of Delaware pursuant to the Delaware Act, and
upon the giving of such notice in the certificate of trust, the statutory
provisions of Section 3804 of the Delaware Act relating to limitations on
inter-Series liabilities (and the statutory effect under Section 3804 of setting
forth such notice in the certificate of trust) shall become applicable to the
Trust and each Series. Any person extending credit to, contracting with or
having any claim against any Series may look only to the assets of that Series
to satisfy or enforce any debt, liability, obligation or expense incurred,
contracted for or otherwise existing with respect to that Series. No Shareholder
or former Shareholder of any Series shall have a claim on or any right to any
assets allocated or belonging to any other Series.
NO PREEMPTIVE RIGHTS
SECTION 2.09. Shareholders shall have no preemptive or
other right to subscribe to any additional Shares or other
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securities issued by the Trust or the Trustees, whether of the
same or other Series.
PERSONAL LIABILITY OF SHAREHOLDERS
SECTION 2.10. Each Shareholder of the Trust and of each Series
shall not be personally liable for the debts, liabilities, obligations and
expenses incurred by, contracted for, or otherwise existing with respect to, the
Trust or by or on behalf of any Series. The Trustees shall have no power to bind
any Shareholder personally or to call upon any Shareholder for the payment of
any sum of money or assessment whatsoever other than such as the Shareholder may
at any time personally agree to pay by way of subscription for any Shares or
otherwise. Every note, bond, contract or other undertaking issued by or on
behalf of the Trust or the Trustees relating to the Trust or to a Series shall
include a recitation limiting the obligation represented thereby to the Trust or
to one or more Series and its or their assets (but the omission of such a
recitation shall not operate to bind any Shareholder or Trustee of the Trust).
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ASSENT TO TRUST INSTRUMENT
SECTION 2.11. Every Shareholder, by virtue of having purchased
a Share shall become a Shareholder and shall be held to have expressly assented
and agreed to be bound by the terms hereof.
ARTICLE III
THE TRUSTEES
MANAGEMENT OF THE TRUST
SECTION 3.01. The Trustees shall have exclusive and absolute
control over the Trust Property and over the business of the Trust to the same
extent as if the Trustees were the sole owners of the Trust Property and
business in their own right, but with such powers of delegation as may be
permitted by this Trust Instrument. The Trustees shall have power to conduct the
business of the Trust and carry on its operations in any and all of its branches
and maintain offices both within and without the State of Delaware, in any and
all states of the United States of America, in the District of Columbia, in any
and all
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commonwealths, territories, dependencies, colonies, or possessions of the United
States of America, and in any foreign jurisdiction and to do all such other
things and execute all such instruments as they deem necessary, proper or
desirable in order to promote the interests of the Trust although such things
are not herein specifically mentioned. Any determination as to what is in the
interests of the Trust made by the Trustees in good faith shall be conclusive.
In construing the provisions of this Trust Instrument, the presumption shall be
in favor of a grant of power to the Trustees.
The enumeration of any specific power in this Trust Instrument
shall not be construed as limiting the aforesaid power. The powers of the
Trustees may be exercised without order of or resort to any court.
Except for the Trustees named herein or appointed to fill
vacancies pursuant to Section 3.04 of this Article III, the Trustees shall be
elected by the Shareholders owning of record a plurality of the Shares voting at
a meeting of Shareholders. Such a meeting shall be held on a date fixed by the
Trustees. In the event that less than a majority of the Trustees holding office
have been elected by Shareholders, the Trustees then in
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office will call a Shareholders' meeting for the election of
Trustees.
INITIAL TRUSTEES
SECTION 3.02. The initial Trustees shall be the persons named
herein. On a date fixed by the Trustees, the Shareholders shall elect at least
one but not more than twelve Trustees, as specified by the Trustees pursuant to
Section 3.06 of this Article III.
TERM OF OFFICE OF TRUSTEES
SECTION 3.03. The Trustees shall hold office during the
lifetime of this Trust, and until its termination as herein provided; except (a)
that any Trustee may resign his trust by written instrument signed by him and
delivered to the other Trustees, which shall take effect upon such delivery or
upon such later date as is specified therein; (b) that any Trustee may be
removed at any time by written instrument, signed by at least two-thirds of the
number of Trustees prior to such removal, specifying the date when such removal
shall become effective; (c) that any Trustee who requests in writing to be
retired or who has
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died, become physically or mentally incapacitated by reason of disease or
otherwise, or is otherwise unable to serve, may be retired by written instrument
signed by a majority of the other Trustees, specifying the date of his
retirement; and (d) that a Trustee may be removed at any meeting of the
Shareholders of the Trust by a vote of Shareholders owning at least two-thirds
of the outstanding Shares.
VACANCIES AND APPOINTMENT OF TRUSTEES
SECTION 3.04. In case of the declination to serve, death,
resignation, retirement, removal, physical or mental incapacity by reason of
disease or otherwise, or a Trustee is otherwise unable to serve, or an increase
in the number of Trustees, a vacancy shall occur. Whenever a vacancy in the
Board of Trustees shall occur, until such vacancy is filled, the other Trustees
shall have all the powers hereunder and the certificate of the other Trustees of
such vacancy shall be conclusive. In the case of an existing vacancy, the
remaining Trustees shall fill such vacancy by appointing such other person as
they in their discretion shall see fit consistent with the limitations under the
1940 Act. Such appointment shall be evidenced by a written instrument signed by
a majority of the Trustees in office
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or by resolution of the Trustees, duly adopted, which shall be recorded in the
minutes of a meeting of the Trustees, whereupon the appointment shall take
effect.
An appointment of a Trustee may be made by the Trustees then
in office in anticipation of a vacancy to occur by reason of retirement,
resignation or increase in number of Trustees effective at a later date,
provided that said appointment shall become effective only at or after the
effective date of said retirement, resignation or increase in number of
Trustees. As soon as any Trustee appointed pursuant to this Section 3.04 shall
have accepted this trust, the trust estate shall vest in the new Trustee or
Trustees, together with the continuing Trustees, without any further act or
conveyance, and he shall be deemed a Trustee hereunder. The power to appoint a
Trustee pursuant to this Section 3.04 is subject to the provisions of Section
16(a) of the 1940 Act.
TEMPORARY ABSENCE OF TRUSTEE
SECTION 3.05. Any Trustee may, by power of attorney, delegate
his power for a period not exceeding six months at any one time to any other
Trustee or Trustees, provided that in no
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case shall less than two Trustees personally exercise the other powers hereunder
except as herein otherwise expressly provided.
NUMBER OF TRUSTEES
SECTION 3.06. The number of Trustees shall be at least one
(1), and thereafter shall be such number as shall be fixed from time to time by
a majority of the Trustees, provided, however, that the number of Trustees shall
in no event be more than twelve (12).
EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE
SECTION 3.07. The declination to serve, death, resignation,
retirement, removal, incapacity, or inability of the Trustees, or any one of
them, shall not operate to terminate the Trust or to revoke any existing agency
created pursuant to the terms of this Trust Instrument.
OWNERSHIP OF ASSETS OF THE TRUST
SECTION 3.08. The assets of the Trust and of each Series shall
be held separate and apart from any assets now or
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hereafter held in any capacity other than as Trustee hereunder by the Trustees
or any successor Trustees. Legal title in all of the assets of the Trust and the
right to conduct any business shall at all times be considered as vested in the
Trustees on behalf of the Trust, except that the Trustees may cause legal title
to any Trust Property to be held by, or in the name of the Trust, or in the name
of any person as nominee. No Shareholder shall be deemed to have a severable
ownership in any individual asset of the Trust or of any Series or any right of
partition or possession thereof, but each Shareholder shall have, except as
otherwise provided for herein, a proportionate undivided beneficial interest in
the Trust or Series. The Shares shall be personal property giving only the
rights specifically set forth in this Trust Instrument.
ARTICLE IV
POWERS OF THE TRUSTEES
POWERS
SECTION 4.01. The Trustees in all instances shall act as
principals, and are and shall be free from the control of the
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Shareholders. The Trustees shall have full power and authority to do any and all
acts and to make and execute any and all contracts and instruments that they may
consider necessary or appropriate in connection with the management of the
Trust. The Trustees shall not in any way be bound or limited by present or
future laws or customs in regard to trust investments, but shall have full
authority and power to make any and all investments which they, in their sole
discretion, shall deem proper to accomplish the purpose of this Trust without
recourse to any court or other authority. Subject to any applicable limitation
in this Trust Instrument or the Bylaws of the Trust, the Trustees shall have
power and authority:
(a) To invest and reinvest cash and other property, and to
hold cash or other property uninvested, without in any event being bound or
limited by any present or future law or custom in regard to investments by
trustees, and to sell, exchange, lend, pledge, mortgage, hypothecate, write
options on and lease any or all of the assets of the Trust;
(b) To operate as and carry on the business of an investment
company, and exercise all the powers necessary and appropriate to the conduct of
such operations;
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(c) To borrow money and in this connection issue notes or
other evidence of indebtedness; to secure borrowings by mortgaging, pledging or
otherwise subjecting as security the Trust Property; to endorse, guarantee, or
undertake the performance of an obligation or engagement of any other Person and
to lend Trust Property;
(d) To provide for the distribution of interests of the Trust
either through a principal underwriter in the manner hereinafter provided for or
by the Trust itself, or both, or otherwise pursuant to a plan of distribution of
any kind;
(e) To adopt Bylaws not inconsistent with this Trust
Instrument providing for the conduct of the business of the Trust and to amend
and repeal them to the extent that they do not reserve that right to the
Shareholders; such Bylaws shall be deemed incorporated and included in this
Trust Instrument;
(f) To elect and remove such officers and appoint and
terminate such agents as they consider appropriate;
(g) To employ one or more banks, trust companies or companies
that are members of a national securities exchange or
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such other entities as the Commission may permit as custodians of any assets of
the Trust subject to any conditions set forth in this Trust Instrument or in the
Bylaws;
(h) To retain one or more transfer agents and shareholder
servicing agents, or both;
(i) To set record dates in the manner provided herein or in
the Bylaws;
(j) To delegate such authority as they consider desirable to
any officers of the Trust and to any investment adviser, manager, custodian,
underwriter or other agent or independent contractor;
(k) To sell or exchange any or all of the assets of the Trust,
subject to the provisions of Article IX, Section 11.04(b) hereof;
(l) To vote or give assent, or exercise any rights of
ownership, with respect to stock or other securities or property; and to execute
and deliver powers of attorney to such person or persons as the Trustees shall
deem proper, granting to such
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person or persons such power and discretion with relation to securities or
property as the Trustees shall deem proper;
(m) To exercise powers and rights of subscription or otherwise
which in any manner arise out of ownership of securities;
(n) To hold any security or property in a form not indicating
any trust, whether in bearer, book entry, unregistered or other negotiable form;
or either in the name of the Trust or in the name of a custodian or a nominee or
nominees, subject in either case to proper safeguards according to the usual
practice of Delaware business trusts or investment companies;
(o) To establish separate and distinct Series with separately
defined investment objectives and policies and distinct investment purposes in
accordance with the provisions of Article II hereof and to establish classes of
such Series having relative rights, powers and duties as they may provide
consistent with applicable law;
(p) Subject to the provisions of Section 3804 of the Delaware
Act, to allocate assets, liabilities and expenses of the
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Trust to a particular Series or to apportion the same between or among two or
more Series, provided that any liabilities or expenses incurred by a particular
Series shall be payable solely out of the assets belonging to that Series as
provided for in Article II hereof;
(q) To consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation or concern, any
security of which is held in the Trust; to consent to any contract, lease,
mortgage, purchase, or sale of property by such corporation or concern, and to
pay calls or subscriptions with respect to any security held in the Trust;
(r) To compromise, arbitrate, or otherwise adjust claims in
favor of or against the Trust or any matter in controversy including, but not
limited to, claims for taxes;
(s) To make distributions of income and of capital gains to
Shareholders in the manner hereinafter provided;
(t) To establish, from time to time, a minimum investment for
Shareholders in the Trust or in one or more Series or class, and to require the
redemption of the Shares of any
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Shareholders whose investment is less than such minimum upon giving notice to
such Shareholder;
(u) To establish one or more committees, to delegate any of
the powers of the Trustees to said committees and to adopt a committee charter
providing for such responsibilities, membership (including Trustees, officers or
other agents of the Trust therein) and any other characteristics of said
committees as the Trustees may deem proper. Notwithstanding the provisions of
this Article IV, and in addition to such provisions or any other provision of
this Trust Instrument or of the Bylaws, the Trustees may by resolution appoint a
committee consisting of less than the whole number of Trustees then in office,
which committee may be empowered to act for and bind the Trustees and the Trust,
as if the acts of such committee were the acts of all the Trustees then in
office, with respect to the institution, prosecution, dismissal, settlement,
review or investigation of any action, suit or proceeding which shall be pending
or threatened to be brought before any court, administrative agency or other
adjudicatory body;
(v) To interpret the investment policies, practices or
limitations of any Series;
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(w) To establish a registered office and have a registered
agent in the state of Delaware; and
(x) In general to carry on any other business in connection
with or incidental to any of the foregoing powers, to do everything necessary,
suitable or proper for the accomplishment of any purpose or the attainment of
any object or the furtherance of any power hereinbefore set forth, either alone
or in association with others, and to do every other act or thing incidental or
appurtenant to or growing out of or connected with the aforesaid business or
purposes, objects or powers.
The foregoing clauses shall be construed both as objects and
power, and the foregoing enumeration of specific powers shall not be held to
limit or restrict in any manner the general powers of the Trustees. Any action
by one or more of the Trustees in their capacity as such hereunder shall be
deemed an action on behalf of the Trust or the applicable Series, and not an
action in an individual capacity.
The Trustees shall not be limited to investing in obligations
maturing before the possible termination of the Trust.
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No one dealing with the Trustees shall be under any obligation
to make any inquiry concerning the authority of the Trustees, or to see to the
application of any payments made or property transferred to the Trustees or upon
their order.
ISSUANCE AND REPURCHASE OF SHARES
SECTION 4.02. The Trustees shall have the power to issue,
sell, repurchase, redeem, retire, cancel, acquire, hold, resell, reissue,
dispose of, and otherwise deal in Shares and, subject to the provisions set
forth in Article II and Article IX, to apply to any such repurchase, redemption,
retirement, cancellation or acquisition of Shares any funds or property of the
Trust, or the particular Series of the Trust, with respect to which such Shares
are issued.
TRUSTEES AND OFFICERS AS SHAREHOLDERS
SECTION 4.03. Any Trustee, officer or other agent of the Trust
may acquire, own and dispose of Shares to the same extent as if he were not a
Trustee, officer or agent; and the Trustees may issue and sell or cause to be
issued and sold Shares to and buy such Shares from any such person or any firm
or
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company in which he is interested, subject only to the general limitations
herein contained as to the sale and purchase of such Shares; and all subject to
any restrictions which may be contained in the Bylaws.
ACTION BY THE TRUSTEES
SECTION 4.04. The Trustees shall act by majority vote at a
meeting duly called or by unanimous written consent without a meeting or by
telephone meeting provided a quorum of Trustees participate in any such
telephone meeting, unless the 1940 Act requires that a particular action be
taken only at a meeting at which the Trustees are present in person. At any
meeting of the Trustees, a majority of the Trustees shall constitute a quorum.
Meetings of the Trustees may be called orally or in writing by the Chairman
and/or Trustees or by any two other Trustees. Notice of the time, date and place
of all meetings of the Trustees shall be given by the party calling the meeting
to each Trustee by telephone, telefax, or telegram sent to his home or business
address at least twenty-four hours in advance of the meeting or by written
notice mailed to his home or business address at least seventy-two hours in
advance of the meeting. Notice need not be given to any Trustee who attends the
meeting
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without objecting to the lack of notice or who executes a written waiver of
notice with respect to the meeting. Any meeting conducted by telephone shall be
deemed to take place at the principal office of the Trust, as determined by the
Bylaws or by the Trustees. Subject to the requirements of the 1940 Act, the
Trustees by majority vote may delegate to any one or more of their number their
authority to approve particular matters or take particular actions on behalf of
the Trust. Written consents or waivers of the Trustees may be executed in one or
more counterparts. Execution of a written consent or waiver and delivery thereof
to the Trust may be accomplished by telefax.
CHAIRMAN OF THE TRUSTEES
SECTION 4.05. The Trustees shall appoint one of their number
to be Chairman of the Board of Trustees. The Chairman shall preside at all
meetings of the Trustees, shall be responsible for the execution of policies
established by the Trustees and the administration of the Trust, and may be (but
is not required to be) the chief executive, financial and/or accounting officer
of the Trust.
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PRINCIPAL TRANSACTIONS
SECTION 4.06. Except to the extent prohibited by applicable
law, the Trustees may, on behalf of the Trust, buy any securities from or sell
any securities to, or lend any assets of the Trust to, any Trustees or officer
of the Trust or any firm of which any such Trustee or officer is a member acting
as principal, or have any such dealings with any investment adviser, distributor
or transfer agent for the Trust or with any Interested Person of such person;
and the Trust may employ any such person, or firm or company in which such
person is an Interested Person, as broker, legal counsel, registrar, investment
adviser, distributor, transfer agent, dividend disbursing agent, custodian or in
any other capacity upon customary terms.
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ARTICLE V
EXPENSES OF THE TRUST
TRUSTEE REIMBURSEMENT
SECTION 5.01. Subject to the provisions of Article II, Section
2.08 hereof, the Trustees shall be reimbursed from the Trust estate or the
assets belonging to the appropriate Series for their expenses and disbursement,
including, without limitation, fees and expenses of Trustees who are not
Interested Persons of the Trust, interest expense, taxes, fees and commissions
of every kind, expenses of pricing Trust portfolio securities, expenses of
issue, repurchase and redemption of shares, including expenses attributable to a
program of periodic repurchases or redemptions, expenses of registering and
qualifying the Trust and its Shares under Federal and State laws and regulations
or under the laws of any foreign jurisdiction, charges of third parties,
including investment advisers, managers, custodians, transfer agents, portfolio
accounting and/or pricing agents, and registrars, expenses of preparing and
setting up in type prospectuses and statements of additional information and
other related Trust documents, expenses of
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printing and distributing prospectuses sent to existing Shareholders, auditing
and legal expenses, reports to Shareholders, expenses of meetings of
Shareholders and proxy solicitations therefor, insurance expenses, association
membership dues and for such non-recurring items as may arise, including
litigation to which the Trust (or a Trustee acting as such) is a party, and for
all losses and liabilities by them incurred in administering the Trust, and for
the payment of such expenses, disbursements, losses and liabilities the Trustees
shall have a lien on the assets belonging to the appropriate Series, or in the
case of an expense allocable to more than one Series, on the assets of each such
Series, prior to any rights or interests of the Shareholders thereto. This
section shall not preclude the Trust from directly paying any of the
aforementioned fees and expenses.
ARTICLE VI
INVESTMENT ADVISER, PRINCIPAL UNDERWRITER AND TRANSFER AGENT
INVESTMENT ADVISER
SECTION 6.01. The Trustees may in their discretion,
from time to time, enter into an investment advisory or
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management contract or contracts with respect to the Trust or any Series whereby
the other party or parties to such contract or contracts shall undertake to
furnish the Trustees with such management, investment advisory, statistical and
research facilities and services and such other facilities and services, if any,
and all upon such terms and conditions, as the Trustees may in their discretion
determine; provided, however, that the initial approval and entering into of
such contract or contracts shall be subject to a Majority Shareholder Vote.
Notwithstanding any other provision of this Trust Instrument, the Trustees may
authorize any investment adviser (subject to such general or specific
instructions as the Trustees may from time to time adopt) to effect purchases,
sales or exchanges of portfolio securities, other investment instruments of the
Trust, or other Trust Property on behalf of the Trustees, or may authorize any
officer, agent, or Trustee to effect such purchases, sales or exchanges pursuant
to recommendations of the investment adviser (and all without further action by
the Trustees). Any such purchases, sales and exchanges shall be deemed to have
been authorized by all of the Trustees.
The Trustees may authorize, subject to applicable requirements
of the 1940 Act, including those relating to
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Shareholder approval, the investment adviser to employ, from time to time, one
or more sub-advisers to perform such of the acts and services of the investment
adviser, and upon such terms and conditions, as may be agreed upon between the
investment adviser and sub-adviser. Any reference in this Trust Instrument to
the investment adviser shall be deemed to include such sub-advisers, unless the
context otherwise requires.
PRINCIPAL UNDERWRITER
SECTION 6.02. The Trustees may in their discretion from time
to time enter into an exclusive or non-exclusive underwriting contract or
contracts providing for the sale of Shares, whereby the Trust may either agree
to sell Shares to the other party to the contract or appoint such other party
its sales agent for such Shares. In either case, the contract shall be on such
terms and conditions, if any, as may be prescribed in the Bylaws, and such
further terms and conditions as the Trustees may in their discretion determine
not inconsistent with the provisions of this Article VI, or of the Bylaws; and
such contract may also provide for the repurchase or sale of Shares by such
other party as principal or as agent of the Trust.
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TRANSFER AGENT
SECTION 6.03. The Trustees may in their discretion from time
to time enter into one or more transfer agency and shareholder service contracts
whereby the other party or parties shall undertake to furnish the Trustees with
transfer agency and shareholder services. The contract or contracts shall be on
such terms and conditions as the Trustees may in their discretion determine not
inconsistent with the provisions of this Trust Instrument or of the Bylaws.
PARTIES TO CONTRACT
SECTION 6.04. Any contract of the character described in
Sections 6.01, 6.02 and 6.03 of this Article VI or any contract of the character
described in Article VIII hereof may be entered into with any corporation, firm,
partnership, trust or association, although one or more of the Trustees or
officers of the Trust may be an officer, director, trustee, shareholder, or
member of such other party to the contract, and no such contract shall be
invalidated or rendered void or voidable by reason of the existence of any
relationship, nor shall any person holding such relationship be disqualified
from voting on or executing the
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same in his capacity as Shareholder and/or Trustee, nor shall any person holding
such relationship be liable merely by reason of such relationship for any loss
or expense to the Trust under or by reason of said contract or accountable for
any profit realized directly or indirectly therefrom, provided that the contract
when entered into was not inconsistent with the provisions of this Article VI or
Article VIII hereof or of the Bylaws. The same person (including a firm,
corporation, partnership, trust or association) may be the other party to
contracts entered into pursuant to Sections 6.01, 6.02 and 6.03 of this Article
VI or pursuant to Article VIII hereof, and any individual may be financially
interested or otherwise affiliated with persons who are parties to any or all of
the contracts mentioned in this Section 6.04.
PROVISIONS AND AMENDMENTS
SECTION 6.05. Any contract entered into pursuant to Sections
6.01 or 6.02 of this Article VI shall be consistent with and subject to the
requirements of Section 15 of the 1940 Act or other applicable Act of Congress
hereafter enacted with respect to its continuance in effect, its termination,
and the method of authorization and approval of such contract or renewal
thereof,
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and no amendment to any contract, entered into pursuant to Section 6.01 of this
Article VI shall be effective unless assented to in a manner consistent with the
requirements of said Section 15, as modified by any applicable rule, regulation
or order of the Commission.
ARTICLE VII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
VOTING POWERS
SECTION 7.01. The Shareholders shall have power to vote only
(i) for the election of Trustees as provided in Article III, Sections 3.01 and
3.02 hereof, (ii) for the removal of Trustees as provided in Article III,
Section 3.03(d) hereof, (iii) with respect to any investment advisory or
management contract as provided in Article VI, Sections 6.01 and 6.05 hereof,
and (iv) with respect to such additional matters relating to the Trust as may be
required by law, by this Trust Instrument, or the Bylaws or any registration of
the Trust with the Commission or any State, or as the Trustees may consider
desirable.
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On any matter submitted to a vote of the Shareholders, all
Shares shall be voted separately by individual Series, except (i) when required
by the 1940 Act, Shares shall be voted in the aggregate and not by individual
Series; and (ii) when the Trustees have determined that the matter affects the
interests of more than one Series, then the Shareholders of all such Series
shall be entitled to vote thereon. The Trustees may also determine that a matter
affects only the interests of one or more classes of a Series, in which case any
such matter shall be voted on by such class or classes. Each whole Share shall
be entitled to one vote as to any matter on which it is entitled to vote, and
each fractional Share shall be entitled to a proportionate fractional vote.
There shall be no cumulative voting in the election of Trustees. Shares may be
voted in person or by proxy or in any manner provided for in the Bylaws. A proxy
may be given in writing. The Bylaws may provide that proxies may also, or may
instead, be given by any electronic or telecommunications device or in any other
manner. Notwithstanding anything else herein or in the Bylaws, in the event a
proposal by anyone other than the officers or Trustees of the Trust is submitted
to a vote of the Shareholders of one or more Series or of the Trust, or in the
event of any proxy contest or proxy solicitation or proposal in opposition to
any proposal by the officers or Trustees of the
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Trust, Shares may be voted only in person or by written proxy. Until Shares are
issued, the Trustees may exercise all rights of Shareholders and may take any
action required or permitted by law, this Trust Instrument or any of the Bylaws
of the Trust to be taken by Shareholders.
MEETINGS
SECTION 7.02. The first Shareholders' meeting shall be held in
order to elect Trustees as specified in Section 3.02 of Article III hereof at
the principal office of the Trust or such other place as the Trustees may
designate. Meetings may be held within or without the State of Delaware. Special
meetings of the Shareholders of any Series may be called by the Trustees and
shall be called by the Trustees upon the written request of Shareholders owning
at least one-tenth of the Outstanding Shares entitled to vote. Whenever ten or
more Shareholders meeting the qualifications set forth in Section 16(c) of the
1940 Act, as the same may be amended from time to time, seek the opportunity of
furnishing materials to the other Shareholders with a view to obtaining
signatures on such a request for a meeting, the Trustees shall comply with the
provisions of said Section 16(c)
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with respect to providing such Shareholders access to the list of the
Shareholders of record of the Trust or the mailing of such materials to such
Shareholders of record, subject to any rights provided to the Trust or any
Trustees provided by said Section 16(c). Notice shall be sent, by First Class
Mail or such other means determined by the Trustees, at least 15 days prior to
any such meeting.
QUORUM AND REQUIRED VOTE
SECTION 7.03. One-third of Shares entitled to vote in person
or by proxy shall be a quorum for the transaction of business at a Shareholders'
meeting, except that where any provision of law or of this Trust Instrument
permits or requires that holders of any Series shall vote as a Series (or that
holders of a class shall vote as a class), then one-third of the aggregate
number of Shares of that Series (or that class) entitled to vote shall be
necessary to constitute a quorum for the transaction of business by that Series
(or that class). Any lesser number shall be sufficient for adjournments. Any
adjourned session or sessions may be held, within a reasonable time after the
date set for the original meeting, without the necessity of further notice.
Except when a larger vote is
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required by law or by any provision of this Trust Instrument or the Bylaws, a
majority of the Shares voted in person or by proxy shall decide any questions
and a plurality shall elect a Trustee, provided that where any provision of law
or of this Trust Instrument permits or requires that the holders of any Series
shall vote as a Series (or that the holders of any class shall vote as a class),
then a majority of the Shares present in person or by proxy of that Series or,
if required by law, a Majority Shareholder Vote of that Series (or class), voted
on the matter in person or by proxy shall decide that matter insofar as that
Series (or class) is concerned. Shareholders may act by unanimous written
consent. Actions taken by Series (or class) may be consented to unanimously in
writing by Shareholders of that Series.
ARTICLE VIII
CUSTODIAN
APPOINTMENT AND DUTIES
SECTION 8.01. The Trustees shall at all times employ a
bank, a company that is a member of a national securities
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exchange, or a trust company, each having capital, surplus and undivided profits
of at least two million dollars ($2,000,000) as custodian with authority as its
agent, but subject to such restrictions, limitations and other requirements, if
any, as may be contained in the Bylaws of the Trust:
(1) to hold the securities owned by the Trust and
deliver the same upon written order or oral order
confirmed in writing;
(2) to receive and receipt for any moneys due to the
Trust and deposit the same in its own banking
department or elsewhere as the Trustees may
direct; and
(3) to disburse such funds upon orders or vouchers;
and the Trust may also employ such custodian as
its agent:
(4) to keep the books and accounts of the Trust or of
any Series or class and furnish clerical and
accounting services; and
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(5) to compute, if authorized to do so by the Trustees,
the Net Asset Value of any Series, or class thereof,
in accordance with the provisions hereof; all upon
such basis of compensation as may be agreed upon
between the Trustees and the custodian.
The Trustees may also authorize the custodian to employ one or
more sub-custodians from time to time to perform such of the acts and services
of the custodian, and upon such terms and conditions, as may be agreed upon
between the custodian and such sub-custodian and approved by the Trustees,
provided that in every case such sub-custodian shall be a bank, a company that
is a member of a national securities exchange, or a trust company organized
under the laws of the United States or one of the states thereof and having
capital, surplus and undivided profits of at least two million dollars
($2,000,000) or such other person as may be permitted by the Commission, or
otherwise in accordance with the 1940 Act.
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CENTRAL CERTIFICATE SYSTEM
SECTION 8.02. Subject to such rules, regulations and orders as
the Commission may adopt, the Trustees may direct the custodian to deposit all
or any part of the securities owned by the Trust in a system for the central
handling of securities established by a national securities exchange or a
national securities association registered with the Commission under the
Securities Exchange Act of 1934, as amended, or such other person as may be
permitted by the Commission, or otherwise in accordance with the 1940 Act,
pursuant to which system all securities of any particular class or series of any
issuer deposited within the system are treated as fungible and may be
transferred or pledged by bookkeeping entry without physical delivery of such
securities, provided that all such deposits shall be subject to withdrawal only
upon the order of the Trust or its custodians, subcustodians or other agents.
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ARTICLE IX
DISTRIBUTIONS AND REDEMPTIONS
DISTRIBUTIONS
SECTION 9.01.
(a) The Trustees may from time to time declare and pay
dividends or other distributions with respect to any Series. The amount of such
dividends or distributions and the payment of them and whether they are in cash
or any other Trust Property shall be wholly in the discretion of the Trustees.
(b) Dividends and other distributions may be paid or made to
the Shareholders of record at the time of declaring a dividend or other
distribution or among the Shareholders of record at such other date or time or
dates or times as the Trustees shall determine, which dividends or
distributions, at the election of the Trustees, may be paid pursuant to a
standing resolution or resolutions adopted only once or with such frequency as
the Trustees may determine. The Trustees may adopt and offer to Shareholders
such dividend reinvestment plans, cash
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dividend payout plans or related plans as the Trustees shall deem
appropriate.
(c) Anything in this Trust Instrument to the contrary
notwithstanding, the Trustees may at any time declare and distribute a stock
dividend pro rata among the Shareholders of a particular Series, or class
thereof, as of the record date of that Series fixed as provided in Section (b)
hereof.
REDEMPTIONS
SECTION 9.02. In case any holder of record of Shares of a
particular Series desires to dispose of his Shares or any portion thereof, he
may deposit at the office of the transfer agent or other authorized agent of
that Series a written request or such other form of request as the Trustees may
from time to time authorize, requesting that the Series purchase the shares in
accordance with this Section 9.02; and the Shareholder so requesting shall be
entitled to require the Series to purchase, and the Series or the principal
underwriter of the Series shall purchase his said Shares, but only at the Net
Asset Value thereof (as described in Section 9.03 of this Article IX). The
Series shall make payment for any shares to be redeemed, as aforesaid,
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in cash or property from the assets of that Series and payment for such Shares
shall be made by the Series or the principal underwriter of the Series to the
Shareholder of record within seven (7) days after the date upon which the
request is effective. Upon redemption, shares shall become Treasury shares and
may be re-issued from time to time.
DETERMINATION OF NET ASSET VALUE
AND VALUATION OF PORTFOLIO ASSETS
SECTION 9.03. The term "Net Asset Value" of any Series shall
mean that amount by which the assets of that Series exceed its liabilities, all
as determined by or under the direction of the Trustees. Such value shall be
determined separately for each Series and shall be determined on such days and
at such times as the Trustees may determine. Such determination shall be made
with respect to securities for which market quotations are readily available, at
the market value of such securities; and with respect to other securities and
assets, at the fair value as determined in good faith by the Trustees; provided,
however, that the Trustees, without Shareholder approval, may alter the method
of valuing portfolio securities insofar as permitted under the 1940 Act and the
rules, regulations and interpretations thereof
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promulgated or issued by the Commission or insofar as permitted by any Order of
the Commission applicable to the Series. The Trustees may delegate any of their
powers and duties under this Section 9.03 with respect to valuation of assets
and liabilities. The resulting amount, which shall represent the total Net Asset
Value of the particular Series, shall be divided by the total number of shares
of that Series outstanding at the time and the quotient so obtained shall be the
Net Asset Value per Share of that Series. At any time the Trustees may cause the
Net Asset Value per Share last determined to be determined again in similar
manner and may fix the time when such redetermined value shall become effective.
If, for any reason, the net income of any Series determined at any time, is a
negative amount, the Trustees shall have the power with respect to that Series
(i) to offset each Shareholder's pro rata share of such negative amount from the
accrued dividend account of such Shareholder, or (ii) to reduce the number of
Outstanding Shares of such Series by reducing the number of Shares in the
account of each Shareholder by a pro rata portion of the number of full and
fractional Shares which represents the amount of such excess negative net
income, or (iii) to cause to be recorded on the books of such Series an asset
account in the amount of such negative net income (provided that the same shall
thereupon become the property of such Series
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with respect to such Series and shall not be paid to any Shareholder), which
account may be reduced by the amount, of dividends declared thereafter upon the
Outstanding Shares of such Series on the day such negative net income is
experienced, until such asset account is reduced to zero; (iv) to combine the
methods described in clauses (i) and (ii) and (iii) of the sentence; or (v) to
take any other action they deem appropriate, in order to cause (or in order to
assist in causing) the Net Asset Value per Share of such Series to remain at a
constant amount per Outstanding Share immediately after each such determination
and declaration. The Trustees shall also have the power not to declare a
dividend out of net income for the purpose of causing the Net Asset Value per
share to be increased. The Trustees shall not be required to adopt, but may at
any time adopt, discontinue or amend the practice of maintaining the Net Asset
Value per Share of the Series at a constant amount.
SUSPENSION OF THE RIGHT OF REDEMPTION
SECTION 9.04. The Trustees may declare a suspension of the
right of redemption or postpone the date of payment as permitted under the 1940
Act. Such suspension shall take effect at such time as the Trustees shall
specify but not later than the
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close of business on the business day next following the declaration of
suspension, and thereafter there shall be no right of redemption or payment
until the Trustees shall declare the suspension at an end. In the case of a
suspension of the right of redemption, a Shareholder may either withdraw his
request for redemption or receive payment based on the Net Asset Value per Share
next determined after the termination of the suspension. In the event that any
Series are divided into classes, the provisions of this Section 9.03, to the
extent applicable as determined in the discretion of the Trustees and consistent
with applicable law, may be equally applied to each such class.
REDEMPTION OF SHARES IN ORDER TO
QUALIFY AS REGULATED INVESTMENT COMPANY
SECTION 9.05. If the Trustees shall, at any time and in good
faith, be of the opinion that direct or indirect ownership of Shares of any
Series has or may become concentrated in any Person to an extent which would
disqualify any Series as a regulated investment company under the Internal
Revenue Code, then the Trustees shall have the power (but not the obligation) by
lot or other means deemed equitable by them (i) to call for redemption by any
such person of a number, or principal amount,
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of Shares sufficient to maintain or bring the direct or indirect ownership of
Shares into conformity with the requirements for such qualification and (ii) to
refuse to transfer or issue Shares to any person whose acquisition of the Shares
in question would result in such disqualification. The redemption shall be
effected at the redemption price and in the manner provided in this Article IX.
The holders of Shares shall upon demand disclose to the
Trustees in writing such information with respect to direct and indirect
ownership of Shares as the Trustees deem necessary to comply with the provisions
of the Internal Revenue Code, or to comply with the requirements of any other
taxing authority.
ARTICLE X
LIMITATION OF LIABILITY AND INDEMNIFICATION
LIMITATION OF LIABILITY
SECTION 10.01. A Trustee, when acting in such capacity, shall
not be personally liable to any person other than the Trust or a beneficial
owner for any act, omission or
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obligation of the Trust or any Trustee. A Trustee shall not be liable for any
act or omission or any conduct whatsoever in his capacity as Trustee, provided
that nothing contained herein or in the Delaware Act shall protect any Trustee
against any liability to the Trust or to Shareholders to which he would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of the
office of Trustee hereunder.
INDEMNIFICATION
SECTION 10.02.
(a) Subject to the exceptions and limitations contained in
Section (b) below:
(i) every Person who is, or has been, a Trustee or
officer of the Trust (hereinafter referred to as a "Covered Person")
shall be indemnified by the Trust to the fullest extent permitted by
law against liability and against all expenses reasonably incurred or
paid by him in connection with any claim, action, suit or proceeding in
which he becomes involved as a party or otherwise by virtue
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of his being or having been a Trustee or officer and against amounts
paid or incurred by him in the settlement thereof;
(ii) the words "claim," "action," "suit," or
"proceeding" shall apply to all claims, actions, suits or proceedings
(civil, criminal or other, including appeals), actual or threatened
while in office or thereafter, and the words "liability" and "expenses"
shall include, without limitation, attorneys' fees, costs, judgments,
amounts paid in settlement, fines, penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a
Covered Person:
(i) who shall have been adjudicated by a court or
body before which the proceeding was brought (A) 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 his office or (B) not to have acted in good faith in the
reasonable belief that his action was in the best interest of the
Trust; or
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(ii) in the event of a settlement, unless there has
been a determination that such Trustee or officer did not engage in
willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his office,
(A) by the court or other body approving the
settlement;
(B) by at least a majority of those Trustees
who are neither Interested Persons of the Trust nor are
parties to the matter based upon a review of readily available
facts (as opposed to a full trial-type inquiry); or
(C) by written opinion of independent legal
counsel based upon a review of readily available facts (as
opposed to a full trial-type inquiry);
provided, however, that any Shareholder may, by appropriate legal
proceedings, challenge any such determination by the Trustees or by
independent counsel.
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(c) The rights of indemnification herein provided may be
insured against by policies maintained by the trust, shall be severable, shall
not be exclusive of or affect any other rights to which any Covered Person may
now or hereafter be entitled, shall continue as to a person who has ceased to be
a Covered Person and shall inure to the benefit of the heirs, executors and
administrators of such a person. Nothing contained herein shall affect any
rights to indemnification to which Trust personnel, other than Covered Persons,
and other persons may be entitled by contract or otherwise under law.
(d) Expenses in connection with the preparation and
presentation of a defense to any claim, action, suit or proceeding of the
character described in paragraph (a) of this Section 10.02 may be paid by the
Trust or Series from time to time prior to final disposition thereof upon
receipt of an undertaking by or on behalf of such Covered Person that such
amount will be paid over by him to the Trust or Series if it is ultimately
determined that he is not entitled to indemnification under this Section 10.02;
provided, however, that either (a) such Covered Person shall have provided
appropriate security for such undertaking, (b) the Trust is insured against
losses arising out of any such advance payments or (c) either a majority of the
Trustees who are neither Interested
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Persons of the Trust nor parties to the matter, or independent legal counsel in
a written opinion, shall have determined, based upon a review of readily
available facts (as opposed to a trial-type inquiry or full investigation), that
there is reason to believe that such Covered Person will be found entitled to
indemnification under this Section 10.02.
SHAREHOLDERS
SECTION 10.03. In case any Shareholder or former Shareholder
of any Series shall be held to be personally liable solely by
reason of his being or having been a Shareholder of such Series and not because
of his acts or omissions or for some other reason, the Shareholder or former
Shareholder (or his heirs, executors, administrators or other legal
representatives, or, in the case of a corporation or other entity, its corporate
or other general successor) shall be entitled out of the assets belonging to the
applicable Series to be held harmless from and indemnified against all loss and
expense arising from such liability. The Trust, on behalf of the affected
Series, shall, upon request by the Shareholder, assume the defense of any claim
made against the Shareholder for any act or obligation of the Series and satisfy
any judgment thereon from the assets of the Series.
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ARTICLE XI
MISCELLANEOUS
TRUST NOT A PARTNERSHIP
SECTION 11.01. It is hereby expressly declared that a trust
and not a partnership is created hereby. No Trustee hereunder shall have any
power to bind personally either the Trust's officers or any Shareholder. All
persons extending credit to, contracting with or having any claim against the
Trust or the Trustees shall look only to the assets of the appropriate Series or
(if the Trustees shall have yet to have established Series) of the Trust for
payment under such credit, contract or claim; and neither the Shareholders nor
the Trustees, nor any of their agents, whether past, present or future, shall be
personally liable therefor. Nothing in this Trust Instrument shall protect a
Trustee against any liability to which the Trustee would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of the office of Trustee hereunder.
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TRUSTEE'S GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR SURETY
SECTION 11.02. The exercise by the Trustees of their powers
and discretions hereunder in good faith and with reasonable care under the
circumstances then prevailing shall be binding upon everyone interested. Subject
to the provisions of Article X hereof and to Section 11.01 of this Article XI,
the Trustees shall not be liable for errors of judgment or mistakes of fact or
law. The Trustees may take advice of counsel or other experts with respect to
the meaning and operation of this Trust Instrument, and subject to the
provisions of Article X hereof and Section 11.01 of this Article XI, shall be
under no liability for any act or omission in accordance with such advice or for
failing to follow such advice. The Trustees shall not be required to give any
bond as such, nor any surety if a bond is obtained.
ESTABLISHMENT OF RECORD DATES
SECTION 11.03. The Trustees may close the Share transfer books
of the Trust for a period not exceeding sixty (60) days preceding the date of
any meeting of Shareholders, or the date for the payment of any dividends or
other distributions, or the date for the allotment of rights, or the date when
any change or
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conversion or exchange of Shares shall go into effect; or in lieu of closing the
stock transfer books as aforesaid, the Trustees may fix in advance a date, not
exceeding sixty (60) days preceding the date of any meeting of Shareholders, or
the date for payment of any dividend or other distribution, or the date for the
allotment of rights, or the date when any change or conversion or exchange of
Shares shall go into effect, as a record date for the determination of the
Shareholders entitled to notice of, and to vote at, any such meeting, or
entitled to receive payment of any such dividend or other distribution, or to
any such allotment of rights, or to exercise the rights in respect of any such
change, conversion or exchange of Shares, and in such case such Shareholders and
only such Shareholders as shall be Shareholders of record on the date so fixed
shall be entitled to such notice of, and to vote at, such meeting, or to receive
payment of such dividend or other distribution, or to receive such allotment or
rights, or to exercise such rights, as the case may be, notwithstanding any
transfer of any Shares on the books of the Trust after any such record date
fixed as aforesaid.
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TERMINATION OF TRUST
SECTION 11.04.
(a) This Trust shall continue without limitation of time but
subject to the provisions of sub-section (b) of this Section 11.04.
(b) The Trustees may, subject to a Majority Shareholder Vote
of each Series affected by the matter or, if applicable, to a Majority
Shareholder Vote of the Trust, and subject to a vote of a majority of the
Trustees,
(i) sell and convey all or substantially all of the
assets of the Trust or any affected Series to another trust,
partnership, association or corporation, or to a separate series of
shares thereof, organized under the laws of any state which trust,
partnership, association or corporation is an open-end management
investment company as defined in the 1940 Act, or is a series thereof,
for adequate consideration which may include the assumption of all
outstanding obligations, taxes and other liabilities, accrued or
contingent, of the Trust or any affected Series, and which may
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include shares of beneficial interest, stock or other ownership
interests of such trust, partnership, association or corporation or of
a series thereof; or
(ii) at any time sell and convert into money all of
the assets of the Trust or any affected Series.
Upon making reasonable provision, in the determination of the
Trustees, for the payment of all such liabilities in either (i) or (ii), by such
assumption or otherwise, the Trustees shall distribute the remaining proceeds or
assets (as the case may be) of each Series (or class) ratably among the holders
of Shares of that Series then outstanding.
(c) Upon completion of the distribution of the remaining
proceeds or the remaining assets as provided in sub-section (b), the Trust or
any affected Series shall terminate and the Trustees and the Trust shall be
discharged of any and all further liabilities and duties hereunder and the
right, title and interest of all parties with respect to the Trust or Series
shall be cancelled and discharged.
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Upon termination of the Trust, following completion of winding
up of its business, the Trustees shall cause a certificate of cancellation of
the Trust's certificate of trust to be filed in accordance with the Delaware
Act, which certificate of cancellation may be signed by any one Trustee.
REORGANIZATION
SECTION 11.05. Notwithstanding anything else herein, the
Trustees, in order to change the form of organization of the Trust, may, without
prior Shareholder approval, (i) cause the Trust to merge or consolidate with or
into one or more trusts, partnerships, associations or corporations so long as
the surviving or resulting entity is an open-end management investment company
under the 1940 Act, or is a series thereof, that will succeed to or assume the
Trust's registration under that Act and which is formed, organized or existing
under the laws of a state, commonwealth possession or colony of the United
States or (ii) cause the Trust to incorporate under the laws of Delaware. Any
agreement of merger or consolidation or certificate of merger may be signed by a
majority of Trustees and facsimile signatures conveyed by electronic or
telecommunication means shall be valid.
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Pursuant to and in accordance with the provisions of Section
3815(f) of the Delaware Act, and notwithstanding anything to the contrary
contained in this Trust Instrument, an agreement of merger or consolidation
approved by the Trustees in accordance with this Section 11.05 may effect any
amendment to the Trust Instrument or effect the adoption of a new trust
instrument of the Trust if it is the surviving or resulting trust in the merger
or consolidation.
FILING OF COPIES, REFERENCES, HEADINGS
SECTION 11.06. The original or a copy of this Trust Instrument
and of each amendment hereof or Trust Instrument supplemental hereto shall be
kept at the office of the Trust where it may be inspected by any Shareholder.
Anyone dealing with the Trust may rely on a certificate by an officer or Trustee
of the Trust as to whether or not any such amendments or supplements have been
made and as to any matters in connection with the Trust hereunder, and with the
same effect as if it were the original, may rely on a copy certified by an
officer or Trustee of the Trust to be a copy of this Trust Instrument or of any
such amendment or supplemental Trust Instrument, references to this Trust
Instrument, and all expressions like "herein," "hereof" and "hereunder," shall
be deemed to refer to this Trust Instrument as amended or affected
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by any such supplemental Trust Instrument. All expressions like "his", "he" and
"him", shall be deemed to include the feminine and neuter, as well as masculine,
genders. Headings are placed herein for convenience of reference only and in
case of any conflict, the text of this Trust Instrument, rather than the
headings, shall control. This Trust Instrument may be executed in any number of
counterparts each of which shall be deemed an original.
APPLICABLE LAW
SECTION 11.07. The trust set forth in this instrument is made
in the State of Delaware, and the Trust and this Trust Instrument, and the
rights and obligations of the Trustees and Shareholders hereunder, are to be
governed by and construed and administered according to the Delaware Act and the
laws of said State; provided, however, that there shall not be applicable to the
Trust, the Trustees or this Trust Instrument (a) the provisions of Section 3540
of Title 12 of the Delaware Code or (b) any provisions of the laws (statutory or
common) of the State of Delaware (other than the Delaware Act) pertaining to
trusts which relate to or regulate (i) the filing with any court or governmental
body or agency of trustee accounts or schedules of trustee fees and charges,
(ii) affirmative requirements to post bonds for trustees,
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officers, agents or employees of a trust, (iii) the necessity for obtaining
court or other governmental approval concerning the acquisition, holding or
disposition of real or personal property, (iv) fees or other sums payable to
trustees, officers, agents or employees of a trust, (v) the allocation of
receipts and expenditures to income and principal, (vi) restrictions or
limitations on the permissible nature, amount or concentration of trust
investments or requirements relating to the titling, storage or other manner of
holding of trust assets, or (vii) the establishment of fiduciary or other
standards or responsibilities or limitations on the acts or powers of trustees,
which are inconsistent with the limitations or liabilities or authorities and
powers of the Trustees set forth or referenced in this Trust Instrument. The
Trust shall be of the type commonly called a "business trust", and without
limiting the provisions hereof, the Trust may exercise all powers or privileges
afforded to trusts or actions that may be engaged in by trusts under the
Delaware Act, and the absence of a specific reference herein to any such power,
privilege or action shall not imply that the Trust may not exercise such power
or privilege or take such actions.
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<PAGE>
AMENDMENTS
SECTION 11.08. Except as specifically provided herein, the
Trustees may, without shareholder vote, amend or otherwise supplement this Trust
Instrument by making an amendment, a Trust Instrument supplemental hereto or an
amended and restated trust instrument. Shareholders shall have the right to vote
(i) on any amendment which would affect their right to vote granted in Section
7.01 of Article VII hereof, (ii) on any amendment to this Section 11.08, (iii)
on any amendment as may be required by law or by the Trust's registration
statement filed with the Commission and (iv) on any amendment submitted to them
by the Trustees. Any amendment required or permitted to be submitted to
Shareholders which, as the Trustees determine, shall affect the Shareholders of
one or more Series shall be authorized by vote of the Shareholders of each
Series affected and no vote of shareholders of a Series not affected shall be
required. Notwithstanding anything else herein, any amendment to Article 10
hereof shall not limit the rights to indemnification or insurance provided
therein with respect to action or omission of Covered Persons prior to such
amendment.
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<PAGE>
FISCAL YEAR
SECTION 11.09. The fiscal year of the Trust shall end on a
specified date as set forth in the Bylaws, provided, however, that the Trustees
may, without Shareholder approval, change the fiscal year of the Trust.
PROVISIONS IN CONFLICT WITH LAW
SECTION 11.10. The provisions of this Trust Instrument are
severable, and if the Trustees shall determine, with the advice of counsel, that
any of such provisions is in conflict with the 1940 Act, the regulated
investment company provisions of the Revenue Code or with other applicable laws
and regulations, the conflicting provision shall be deemed never to have
constituted a part of this Trust Instrument; provided, however, that such
determination shall not affect any of the remaining provisions of this Trust
Instrument or render invalid or improper any action taken or omitted prior to
such determination. If any provision of this Trust Instrument shall be held
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision in such jurisdiction, such
invalidity or unenforceability shall attach only to such provision in such
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<PAGE>
jurisdiction and shall not in any manner affect such provisions in any other
jurisdiction or any other provision of this Trust Instrument in any
jurisdiction.
IN WITNESS WHEREOF, the undersigned, being all of the initial
Trustees of the Trust, have executed this instrument this 25th day of August,
1994.
--------------------------------
Gordon Forrester, as Trustee and
not individually
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<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I -- NAME AND DEFINITIONS .................................. 1
Section 1.01 Name ........................................... 1
Section 1.02 Definitions..................................... 2
ARTICLE II -- BENEFICIAL INTEREST...................................... 4
Section 2.01 Shares of Beneficial Interest .................. 4
Section 2.02 Issuance of Shares.............................. 5
Section 2.03 Register of Shares and Share
Certificates ................................... 6
Section 2.04 Transfer of Shares ............................. 7
Section 2.05 Treasury Shares ................................ 8
Section 2.06 Establishment of Series ........................ 8
Section 2.07 Investment in the Trust ........................ 10
Section 2.08 Assets and Liabilities of Series ............... 10
Section 2.09 No Preemptive Rights ........................... 13
Section 2.10 Personal Liability of
Shareholders ................................... 13
Section 2.11 Assent to Trust Instrument ..................... 14
ARTICLE III -- THE TRUSTEES ............................................ 14
Section 3.01 Management of the Trust ........................ 14
Section 3.02 Initial Trustees ............................... 16
Section 3.03 Term of Office of Trustees ..................... 16
Section 3.04 Vacancies and Appointment of Trustees .......... 17
Section 3.05 Temporary Absence of Trustee ................... 18
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<PAGE>
Section 3.06 Number of Trustees ............................. 18
Section 3.07 Effect of Death, Resignation, etc of a Trustee.. 19
Section 3.08 Ownership of Assets of the Trust ............... 19
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<PAGE>
TABLE OF CONTENTS (cont'd.)
PAGE
----
ARTICLE IV -- POWERS OF THE TRUSTEES .................................. 20
Section 4.01 Powers ......................................... 20
Section 4.02 Issuance and Repurchase of Shares .............. 27
Section 4.03 Trustees and Officers as Shareholders .......... 27
Section 4.04 Action By The Trustees ......................... 28
Section 4.05 Chairman of the Trustees ....................... 29
Section 4.06 Principal Transactions ......................... 29
ARTICLE V -- EXPENSES OF THE TRUST ................................... 30
Section 5.01 Trustee Reimbursement .......................... 30
ARTICLE VI -- INVESTMENT ADVISER, PRINCIPAL
UNDERWRITER AND TRANSFER AGENT .......................... 31
Section 6.01 Investment Adviser ............................. 31
Section 6.02 Principal Underwriter .......................... 33
Section 6.03 Transfer Agent ................................. 33
Section 6.04 Parties to Contract ............................ 34
Section 6.05 Provisions and Amendments ...................... 35
ARTICLE VII -- SHAREHOLDERS' VOTING POWER AND
MEETINGS ................................................ 35
Section 7.01 Voting Powers ................................... 35
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Section 7.02 Meetings ........................................ 37
Section 7.03 Quorum and Required Vote ........................ 38
ARTICLE VIII -- CUSTODIAN ................................................ 39
Section 8.01 Appointment and Duties .......................... 39
Section 8.02 Central Certificate System ...................... 41
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<PAGE>
TABLE OF CONTENTS (cont'd.)
PAGE
ARTICLE IX - DISTRIBUTIONS AND REDEMPTIONS ............................ 42
Section 9.01 Distributions ................................... 42
Section 9.02 Redemptions ..................................... 43
Section 9.03 Determination of Net Asset Value and
Valuation of Portfolio Assets ................... 44
Section 9.04 Suspension of the Right of Redemption ........... 46
Section 9.05 Redemption of Shares in Order
to Qualify as Regulated
Investment Company .............................. 46
ARTICLE X - LIMITATION OF LIABILITY AND
INDEMNIFICATION .......................................... 48
Section 10.01 Limitation of Liability ......................... 48
Section 10.02 Indemnification ................................. 49
Section 10.03 Shareholders .................................... 52
ARTICLE XI - MISCELLANEOUS ............................................ 53
Section 11.01 Trust Not a Partnership ......................... 53
Section 11.02 Trustee's Good Faith Action,
Expert Advice, No Bond or Surety ................ 54
Section 11.03 Establishment of Record Dates ................... 54
Section 11.04 Termination of Trust............................. 55
Section 11.05 Reorganization .................................. 57
Section 11.06 Filing of Copies, References, Headings .......... 58
Section 11.07 Applicable Law................................... 59
Section 11.08 Amendments....................................... 61
Section 11.09 Fiscal Year...................................... 61
Section 11.10 Provisions in Conflict with Law.................. 62
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Exhibit 2
Bylaws of Registrant
<PAGE>
BY-LAWS
OF
IBJ FUNDS TRUST
These Bylaws of IBJ Funds Trust (the "Trust"), a Delaware
business trust, are subject to the Trust's Instrument of Trust dated August 25,
1994 as from time to time amended, supplemented or restated (the "Trust
Instrument"). Capitalized terms used herein which are defined in the Trust
Instrument are used as therein defined.
ARTICLE I
PRINCIPAL OFFICE
The principal office of the Trust shall be located in New
York, New York or such other location as the Trustees may, from time to time,
determine. The Trust may establish and maintain such other offices and places of
business as the Trustees may, from time to time, determine.
<PAGE>
ARTICLE II
OFFICERS AND THEIR ELECTION
OFFICERS
SECTION 1. The officers of the Trust shall be President, a
Treasurer, a Secretary, and such other officers as the Trustees may from time to
time elect. The Trustees may delegate to any officer or committee the power to
appoint any subordinate officers or agents. It shall not be necessary for any
Trustee or other officer to be a holder of Shares in the Trust.
ELECTION OF OFFICERS
SECTION 2. The Treasurer and Secretary shall be chosen by the
Trustees. The President shall be chosen by and from the Trustees. Two or more
offices may be held by a single person except the offices of President and
Secretary. Subject to the provisions of Section 12 hereof, the President, the
Treasurer and the Secretary shall each hold office until their successors are
chosen and qualified and all other officers shall hold office at the pleasure of
the Trustees.
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<PAGE>
RESIGNATIONS
SECTION 3. Any officer of the Trust may resign,
notwithstanding Section 2 hereof, by filing a written resignation with the
President, the Trustees or the Secretary, which resignation shall take effect on
being so filed or at such time as may be therein specified.
ARTICLE III
POWERS AND DUTIES OF OFFICERS AND TRUSTEES
MANAGEMENT OF THE TRUST-GENERAL
SECTION 1. The business and affairs of the Trust shall be
managed by, or under the direction of, the Trustees, and they shall have all
powers necessary and desirable to carry out their responsibilities, so far as
such powers are not inconsistent with the laws of the State of Delaware, the
Trust Instrument or with these Bylaws.
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<PAGE>
EXECUTIVE AND OTHER COMMITTEES
SECTION 2. The Trustees may elect from their own number an
executive committee, which shall have any or all the powers of the Trustees
while the Trustees are not in session. The Trustees may also elect from their
own number other committees from time to time. The number composing such
committees and the powers conferred upon the same are to be determined by vote
of a majority of the Trustees. All members of such committees shall hold such
offices at the pleasure of the Trustees. The Trustees may abolish any such
committee at any time. Any committee to which the Trustees delegate any of their
powers or duties shall keep records of its meetings and shall report its actions
to the Trustees. The Trustees shall have power to rescind any action of any
committee, but no such rescission shall have retroactive effect.
COMPENSATION
SECTION 3. Each Trustee and each committee member may receive
such compensation for his services and reimbursement for his expenses as may be
fixed from time to time by resolution of the Trustees.
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<PAGE>
CHAIRMAN OF THE TRUSTEES
SECTION 4. The Trustees shall appoint from among their number
a Chairman who shall serve as such at the pleasure of the Trustees. When
present, he shall preside at all meetings of the Shareholders and the Trustees,
and he may, subject to the approval of the Trustees, appoint a Trustee to
preside at such meetings in his absence. He shall perform such other duties as
the Trustees may from time to time designate.
PRESIDENT
SECTION 5. The President shall be the chief executive officer
of the Trust and, subject to the direction of the Trustees, shall have general
administration of the business and policies of the Trust. Except as the Trustees
may otherwise order, the President shall have the power to grant, issue, execute
or sign such powers of attorney, proxies, agreements or other documents as may
be deemed advisable or necessary in the furtherance of the interests of the
Trust or any Series thereof. He shall also have the power to employ attorneys,
accountants and other advisers and agents and counsel for the Trust. The
President shall perform such
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<PAGE>
duties additional to all of the foregoing as the Trustees may from
time to designate.
TREASURER
SECTION 6. The Treasurer shall be the principal financial and
accounting officer of the Trust. He shall deliver all funds and securities of
the Trust which may come into his hands to such company as the Trustees shall
employ as Custodian in accordance with the Trust Instrument and applicable
provisions of law. He shall make annual reports regarding the business and
condition of the Trust, which reports shall be preserved in Trust records, and
he shall furnish such other reports regarding the business and condition of the
Trust as the Trustees may from time to time require. The Treasurer shall perform
such additional duties as the Trustees may from time to time designate.
SECRETARY
SECTION 7. The Secretary shall record in books kept for the
purpose all votes and proceedings of the Trustees and the Shareholders at their
respective meetings. He shall have the
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<PAGE>
custody of the seal of the Trust. The Secretary shall perform such additional
duties as the Trustees may from time to time designate.
VICE PRESIDENT
SECTION 8. Any Vice President of the Trust shall perform such
duties as the Trustees or the President may from time to time designate. At the
request or in the absence or disability of the President, the Vice President
(or, if there are two or more Vice Presidents, then the senior of the Vice
Presidents present and able to act) may perform all the duties of the President
and, when so acting, shall have all the powers of and be subject to all the
restrictions upon the President.
ASSISTANT TREASURER
SECTION 8. Any Assistant Treasurer of the Trust shall perform
such duties as the Trustees or the Treasurer may from time to time designate,
and, in the absence of the Treasurer, the senior Assistant Treasurer, present
and able to act, may perform all the duties of the Treasurer.
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<PAGE>
ASSISTANT SECRETARY
SECTION 9. Any Assistant Secretary of the Trust shall perform
such duties as the Trustees or the Secretary may from time to time designate,
and, in the absence of the Secretary, the senior Assistant Secretary, present
and able to act, may perform all the duties of the Secretary.
SUBORDINATE OFFICERS
SECTION 10. The Trustees from time to time may appoint such
other officers or agents as they may deem advisable, each of whom shall have
such title, hold office for such period, have such authority and perform such
duties as the Trustees may determine. The Trustees from time to time may
delegate to one or more officers or committees of Trustees the power to appoint
any such subordinate officers or agents and to prescribe their respective terms
of office, authorities and duties.
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<PAGE>
SURETY BONDS
SECTION 11. The Trustees may require any officer or agent of
the Trust to execute a bond (including, without limitation, any bond required by
the Investment Company Act of 1940, as amended ("the 1940 Act") and the rules
and regulations of the Securities and Exchange Commission ("Commission")) to the
Trust in such sum and with such surety or sureties as the Trustees may
determine, conditioned upon the faithful performance of his duties to the Trust
including responsibility for negligence and for the accounting of any of the
Trust's property, funds or securities that may come into his hands.
REMOVAL
SECTION 12. Any officer may be removed from office whenever in
the judgment of the Trustees the best interest of the Trust will be served
thereby, by the vote of a majority of the Trustees given at any regular meeting
or any special meeting of the Trustees. In addition, any officer or agent
appointed in accordance with the provisions of Section 10 hereof may be removed,
either with or without cause, by any officer upon whom such power of removal
shall have been conferred by the Trustees.
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<PAGE>
REMUNERATION
SECTION 13. The salaries or other compensation, if any, of the
officers of the Trust shall be fixed from time to time by resolution of the
Trustees.
ARTICLE IV
SHAREHOLDERS' MEETINGS
SPECIAL MEETINGS
SECTION 1. A special meeting of the shareholders shall be
called by the Secretary whenever (i) ordered by the Trustees or (ii) requested
in writing by the holder or holders of at least 10% of the Outstanding Shares
entitled to vote. If the Secretary, when so ordered or requested, refuses or
neglects for more than 30 days to call such special meeting, the Trustees or the
Shareholders so requesting, may, in the name of the Secretary, call the meeting
by giving notice thereof in the manner required when notice is given by the
Secretary. If the meeting is a meeting of the Shareholders of one or more Series
or classes of Shares, but not a meeting of all Shareholders of the Trust, then
only special meetings of the
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<PAGE>
Shareholders of such one or more Series or any Classes thereof shall be entitled
to notice of and to vote at such meeting.
NOTICES
SECTION 2. Except as above provided, notices of any meeting of
the Shareholders shall be given by the Secretary by delivering or mailing,
postage prepaid, to each Shareholder entitled to vote at said meeting, written
or printed notification of such meeting at least fifteen days before the
meeting, to such address as may be registered with the Trust by the Shareholder.
Notice of any Shareholder meeting need not be given to any Shareholder if a
written waiver of notice, executed before or after such meeting, is filed with
the record of such meeting, or to any Shareholder who shall attend such meeting
in person or by proxy. Notice of adjournment of a Shareholders' meeting to
another time or place need not be given, if such time and place are announced at
the meeting and reasonable notice is given to persons present at the meeting and
the adjourned meeting is held within a reasonable time after the date set for
the original meeting.
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<PAGE>
VOTING-PROXIES
SECTION 3. Subject to the provisions of the Trust Instrument,
shareholders entitled to vote may vote either in person or by proxy, provided
that either (i) an instrument authorizing such proxy to act is executed by the
Shareholder in writing and dated not more than eleven months before the meeting,
unless this instrument specifically provides for a longer period or (ii) the
Trustees adopt by resolution an electronic, telephonic, computerized or other
alternative to execution of a written instrument authorizing the proxy to act
which authorization is received no more than eleven months before the meeting.
Proxies shall be delivered to the Secretary of the Trust or other persons
responsible for recording the proceedings before being voted. A proxy with
respect to Shares held in the name of two or more persons shall be valid if
executed by one of them unless at or prior to exercise of such proxy the Trust
receives specific written notice to the contrary from any one of them. Unless
otherwise specifically limited by their terms, proxies shall entitle the holder
thereof to vote at any adjournment of a meeting. A proxy purporting to be
exercised by or on behalf of a Shareholder shall be deemed valid unless
challenged at or prior to its exercise and the burden in proving invalidity
shall rest on the challenger. At
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<PAGE>
all meetings of the Shareholders, unless the voting is conducted by inspectors,
all questions relating to the qualifications of voting, the validity of proxies,
and the acceptance or rejection of votes shall be decided by the Chairman of the
meeting. Except as otherwise provided herein or in the Trust Instrument, as
these By-laws or such Trust Instrument may be amended or supplemented from time
to time, all matters relating to the giving, voting or validity or proxies shall
be governed by the General Corporation Law of the State of Delaware relating to
proxies, and judicial interpretations thereunder, as if the Trust were a
Delaware corporation and the Shareholders were shareholders of a Delaware
corporation.
PLACE OF MEETING
SECTION 4. All special meetings of the Shareholders shall be
held at the principal place of business of the Trust or at such other place in
the United States as the Trustees may designate.
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<PAGE>
ACTION WITHOUT A MEETING
SECTION 5. Any action to be taken by Shareholders may be taken
without a meeting if all shareholders entitled to vote on the matter consent to
the action in writing and the written consents are filed with the records of
meetings of Shareholders of the Trust. Such consent shall be treated for all
purposes as a vote at a meeting of the Trustees held at the principal place of
business of the Trust.
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<PAGE>
ARTICLE V
TRUSTEES' MEETINGS
SPECIAL MEETINGS
SECTION 1. Special meetings of the Trustees may be called
orally or in writing by the Chairman of the Board of Trustees or any two other
Trustees.
REGULAR MEETINGS
SECTION 2. Regular meetings of the Trustees may be held at
such places and at such times as the Trustees may from time to time determine;
each Trustee present at such determination shall be deemed a party calling the
meeting and no call or notice will be required to such Trustee provided that any
Trustee who is absent when such determination is made shall be given notice of
the determination by the Chairman or any two other Trustees, as provided for in
Section 4.04 of the Trust Instrument.
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<PAGE>
QUORUM
SECTION 3. A majority of the Trustees shall constitute a
quorum for the transaction of business and an action of a majority of the quorum
shall constitute action of the Trustees.
NOTICE
SECTION 4. Except as otherwise provided, notice of any special
meeting of the Trustees shall be given by the party calling the meeting to each
Trustee, as provided for in Section 4.04 of the Trust Instrument. A written
notice may be mailed, postage prepaid, addressed to him at his address as
registered on the books of the Trust or if not so registered, at his last known
address.
PLACE OF MEETING
SECTION 5. All special meetings of the Trustees shall be held
at the principal place of business of the Trust or such other place as the
Trustees may designate. Any meeting may adjourn to any place.
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<PAGE>
SPECIAL ACTION
SECTION 6. When all the Trustees shall be present at any
meeting, however called or wherever held, or shall assent to the holding of the
meeting without notice, or shall sign a written assent thereto filed with the
record of such meeting, the acts of such meeting shall be valid as if such
meeting had been regularly held.
ACTION BY CONSENT
SECTION 7. Any action by the Trustees may be taken without a
meeting if a written consent thereto is signed by all the Trustees and filed
with the records of the Trustees' meeting. Such consent shall be treated, for
all purposes, as a vote at a meeting of the Trustees held at the principal place
of business of the Trustees.
PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE
SECTION 8. Trustees may participate in a meeting of Trustees
by conference telephone or similar communications equipment by means of which
all persons participating in the
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<PAGE>
meeting can hear each other, and such participation shall constitute presence in
person at such meeting. Any meeting conducted by telephone shall be deemed to
take place at and from the principal office of the Trust.
ARTICLE VI
SHARES OF BENEFICIAL INTEREST
BENEFICIAL INTEREST
SECTION 1. The beneficial interest in the Trust shall at all
times be divided into such transferable Shares of one or more separate and
distinct Series, or classes thereof, as the Trustees shall from time to time
create and establish. The number of Shares is unlimited, and each Share of each
Series or class thereof shall be without par value and shall represent an equal
proportionate interest with each other Share in the Series, none having priority
or preference over another, except to the extent that such priorities or
preferences are established with respect to one or more classes of shares
consistent with applicable law and any rule or order to the Commission.
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<PAGE>
TRANSFER OF SHARES
SECTION 2. the Shares of the Trust shall be transferable, so
as to affect the rights of the Trust, only by transfer recorded on the books of
the Trust, in person or by attorney.
EQUITABLE INTEREST NOT RECOGNIZED
SECTION 3. The Trust shall be entitled to treat the holder of
record of any Share or Shares of beneficial interest as the holder in fact
thereof, and shall not be bound to recognize any equitable or other claim or
interest in such Share or Shares on the part of any other person except as may
be otherwise expressly provided by law.
SHARE CERTIFICATE
SECTION 4. No certificates certifying the ownership of Shares
shall be issued except as the Trustees may otherwise authorize. The Trustees may
issue certificates to a Shareholder of any Series or class thereof for any
purpose and the issuance of a certificate to one or more Shareholders shall not
require the
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<PAGE>
issuance of certificates generally. In the event that the Trustees authorize the
issuance of Share certificates, such certificate shall be in the form prescribed
from time to time by the Trustees and shall be signed by the President or a Vice
President and by the Treasurer, Assistant Treasurer, Secretary or Assistant
Secretary. Such signatures may be facsimiles if the certificate is signed by a
transfer or shareholder services agent or by a registrar, other than a Trustee,
officer or employee of the Trust. In case any officer who has signed or whose
facsimile signature has been placed on such certificate shall have ceased to be
such officer before such certificate is issued, it may be issued by the Trust
with the same effect as if he or she were such officer at the time of its issue.
In lieu of issuing certificates for Shares, the Trustees or
the transfer or shareholder services agent may either issue receipts therefor or
may keep accounts upon the books of the Trust for the record holders of such
Shares, who shall in either case be deemed, for all purposes hereunder, to be
holders of certificates for such Shares as if they had accepted such
certificates and shall be held to have expressly assented and agreed to the
terms hereof.
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<PAGE>
LOSS OF CERTIFICATE
SECTION 5. In the case of the alleged loss or destruction or
the mutilation of a Share certificate, a duplicate certificate may be issued in
place thereof, upon such terms as the Trustees may prescribe.
DISCONTINUANCE OF ISSUANCE OF CERTIFICATES
SECTION 6. The Trustees may at any time discontinue the
issuance of Share certificates and may, by written notice to each Shareholder,
require the surrender of Share certificates to the Trust for cancellation. Such
surrender and cancellation shall not affect the ownership of Shares in the
Trust.
ARTICLE VII
OWNERSHIP OF ASSETS OF THE TRUST
The Trustees, acting for and on behalf of the Trust, shall be
deemed to hold legal and beneficial ownership of any income earned on securities
held by the Trust issued by any business entity formed, organized or existing
under the laws of any
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<PAGE>
jurisdiction other than a state, commonwealth, possession or colony of the
United States or the laws of the United States.
ARTICLE VIII
INSPECTION OF BOOKS
The Trustees shall from time to time determine whether and to
what extent, and at what times and places, and under what conditions and
regulations the accounts and books of the Trust or any of them shall be open to
the inspection of the Shareholders; and no Shareholder shall have any right to
inspect any account or book or document of the Trust except as conferred by law
or otherwise by the Trustees or by resolution of the Shareholders.
ARTICLE IX
INSURANCE OF OFFICERS, TRUSTEES, AND EMPLOYEES
The Trust may purchase and maintain insurance on behalf of any
Covered Person or employee of the Trust, including any Covered Person or
employee of the Trust who is or was serving at the request of the Trust as a
Trustee, officer or employee of a corporation, partnership, joint venture, trust
or other enterprise against any liability asserted against him and incurred by
him in
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<PAGE>
any such capacity or arising out of his status as such, whether or not the
Trustees would have the power to indemnify him against such liability.
The Trust may not acquire or obtain a contract for insurance
that protects or purports to protect any Trustee or officer of the Trust against
any liability to the Trust or its Shareholder to which he would otherwise be
subject by reason or willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of his office.
ARTICLE X
SEAL
The seal of the Trust shall be circular in form bearing the
inscription:
"IBJ FUNDS TRUST
THE STATE OF DELAWARE"
The form of the seal shall be subject to alternation by the
Trustees and the seal my be used by causing it or a facsimile to be impressed or
affixed or printed or otherwise reproduced.
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<PAGE>
Any officer or Trustee of the trust shall have authority to
affix the seal of the Trust to any document, instrument or other paper executed
and delivered by or on behalf of the Trust; however, unless otherwise required
by the Trustees, the seal shall not be necessary to be placed on and its absence
shall not impair the validity of any document, instrument, or other paper
executed by or on behalf of the Trust.
ARTICLE XI
FISCAL YEAR
The fiscal year of the Trust shall end on such date as the
Trustees shall from time to time determine.
ARTICLE XII
AMENDMENTS
These Bylaws may be amended at any meeting of the Trustees of
the Trust by a majority vote.
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<PAGE>
ARTICLE XIII
REPORT TO SHAREHOLDERS
The Trustees shall at least semi-annually submit to the
Shareholders a written financial report of the Trust including financial
statements which shall be certified at least annually by independent public
accountants.
XIV
HEADINGS
Headings are placed in these Bylaws for convenience of
reference only and in case of any conflict, the text of these Bylaws rather than
the headings shall control.
- 25 -
Exhibit 5(a)
Form of Master Investment Advisory Contract and
Supplements between Registrant and IBJ
Schroder Bank & Trust Company
<PAGE>
MASTER INVESTMENT ADVISORY CONTRACT
IBJ FUNDS TRUST
237 PARK AVENUE
NEW YORK, NEW YORK 10017
November 18, 1994
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
Dear Sirs or Madams:
This will confirm the agreement between IBJ Funds Trust (the
"Trust") and IBJ Schroder Bank & Trust Company (the "Adviser") as follows:
1. DEFINITIONS AND DELIVERY OF DOCUMENTS. The Trust has been
organized as a business trust under the laws of the State of Delaware and is an
open-end management investment company. The Trust's shares of beneficial
interest may be classified into series in which each series represents the
entire undivided interests of a separate portfolio of assets. For all purposes
of this Contract, a "Fund" shall mean a separate portfolio of assets of the
Trust with respect to which the Trust has entered into an Investment Advisory
Contract Supplement, and a "Series" shall mean the series of shares of
beneficial interest representing undivided interests in a Fund. All references
herein to this Contract shall be deemed to be references to this Contract as it
may from time to time be supplemented by Investment Advisory Contract
Supplements. The Trust engages in the business of investing and reinvesting the
assets of each Fund in the manner and in accordance with the investment
objective and restrictions specified in the Trust's Certificate of Trust, dated
August 25, 1994 (the "Certificate of Trust"), and the Prospectus or Prospectuses
(the "Prospectus") relating to the Trust and the Funds included in the Trust's
Registration Statement, as amended from time to time (the "Registration
Statement"), filed by the
<PAGE>
Trust under the Investment Company Act of 1940 (the "1940 Act") and the
Securities Act of 1933 (the "1933 Act"). Copies of the documents referred to in
the preceding sentence have been furnished to the Adviser. Any amendments to
those documents shall be furnished to the Adviser promptly.
2. INVESTMENT ADVISORY AND MANAGEMENT SERVICES. (a) The
Adviser shall provide to the Trust investment guidance and policy direction in
connection with the management of the portfolio of each Fund, including oral and
written research, analysis, advice, statistical and economic data and
information and judgments, of both a macroeconomic and microeconomic character,
concerning, among other things, interest rate trends, portfolio composition,
credit conditions of both a general and special nature and the average maturity
of the portfolio of each Fund.
(b) The Adviser shall also provide to the Trust's officers
administrative assistance in connection with the operation of the Trust and each
of the Funds. Administrative services provided by the Adviser shall include (i)
data processing, clerical and bookkeeping services required in connection with
maintaining the financial accounts and records for the Trust and each of the
Funds, (ii) the compilation of statistical and research data required for the
preparation of periodic reports and statements of each of the Funds which are
distributed to the Trust's officers and Board of Trustees, (iii) the compilation
of information required in connection with the Trust's filings with the
Securities and Exchange Commission and (iv) such other services as the Adviser
shall from time to time determine, upon consultation with the Administrator, to
be necessary or useful to the administration of the Trust and
each of the Funds.
(c) As a manager of the assets of each Fund, the Adviser shall
make investments for the account of each Fund in accordance with the Adviser's
best judgment and within the investment objectives and restrictions of each such
Fund set forth in the Trust's Declaration of Trust, the Prospectus of each such
Fund, the 1940 Act and the provisions of the Internal Revenue Code relating to
regulated investment companies, subject to policy decisions adopted by the
Trust's Board of Trustees. The Adviser shall advise the Trust's Officers and
Board of Trustees, at such times as the Board of Trustees may specify, of
investments made for each of the Funds and shall, when requested
- 2 -
<PAGE>
by the Trust's officers or Board of Trustees, supply the reasons
for making particular investments.
(d) The Adviser, subject to and in accordance with any
directions which the Trust's Board of Trustees may issue from time to time,
shall place, in the name of the Funds, orders for the execution of the Fund's
securities transactions. When placing such orders the Adviser shall generally
seek to obtain the best net price and execution for the Funds, but this
requirement shall not be deemed to obligate the Adviser to place any order
solely on the basis of obtaining the lowest commission rate or spread if the
other standards set forth below have been satisfied. The parties recognize that
there are likely to be many cases in which different brokers or dealers are
equally able to provide such best price and execution and that, in selecting
among such brokers or dealers with respect to particular trades, it is desirable
to choose those brokers or dealers who furnish research, statistics, quotations
and other information to the Funds and the Adviser in accordance with the
standards set forth below. Moreover, to the extent that it continues to be
lawful to do so and so long as the Board of Trustees determines that the Funds
will benefit, directly or indirectly, by doing so, the Adviser may place orders
with a broker who charges a commission for that transaction which is in excess
of the amount of commission that another broker would have charged for effecting
that transaction, provided that the excess commission is reasonable in relation
to the value of "brokerage and research services" (as defined in Section
28(e)(3) of the Securities Exchange Act of 1934) provided by that broker.
Accordingly, the Trust and the Adviser agree that the Adviser
shall select brokers for the execution of the Funds' transactions from among
those brokers and dealers who provide quotations and other services to the
Funds, specifically including the quotations necessary to determine the Funds'
net assets, in such amount of total brokerage as may reasonably be required in
light of such services; and those brokers and dealers who supply research,
statistical and other data to the Adviser or its affiliates which the Adviser or
its affiliates may lawfully and appropriately use in their investment advisory
capacities, which relate directly to securities, actual or potential, of the
Funds, or which place the Adviser in a better position to make decisions in
connection with the management of the Funds' assets and securities, whether or
not such data may also be useful to the Adviser and its affiliates in managing
other portfolios or
- 3 -
<PAGE>
advising other clients, in such amount of total brokerage as may
reasonably be required.
(e) The Adviser shall render regular reports to the Trust, not
more frequently than quarterly, of how much total business for the Funds'
portfolio transactions has been placed by the Adviser with brokers or dealers
falling into each of the categories referred to above and the manner in which
the allocation has been accomplished.
(f) The Adviser agrees that no investment decision will be
made or influenced by a desire to direct portfolio transactions for allocation
in accordance with the foregoing, and that the right to make such allocation
shall not interfere with the Adviser's paramount duty to obtain the best net
price and execution for the Funds.
(g) The Adviser shall furnish to the Board of Trustees
periodic reports on the investment performance of each Fund and on the
performance of its obligations under this Contract and shall supply such
additional reports and information as the Trust's officers or Board of Trustees
shall reasonably request.
3. EXPENSES. (a) The Adviser shall, at its expense, (i) employ
or associate with itself such persons as it believes appropriate to assist in
performing its obligations under this Contract and (ii) provide all advisory
services, equipment, facilities and personal necessary to perform its
obligations under this Contract.
The Trust shall be responsible for all of its expenses and
liabilities, including compensation of its Trustees who are not affiliated with
the Administrator or the Adviser or any of their affiliates; taxes and
governmental fees; interest charges; fees and expenses of the Trust's
independent accountants and legal counsel; trade association membership dues;
fees and expenses of any custodian (including for keeping books and accounts and
calculating the net asset value of shares of each Series, transfer agent,
registrar and dividend disbursing agent of the Trust; expenses of issuing,
selling, redeeming, registering and qualifying for sale the Trust's shares of
beneficial interest; expenses of preparing and printing share certificates,
prospectuses, shareholders' reports, notices, proxy statements and reports to
regulatory agencies; the cost of office
- 4 -
<PAGE>
supplies; travel expenses of all officers, trustees and employees; insurance
premiums; brokerage and other expenses of executing portfolio transactions;
expenses of shareholders' meetings; organizational expenses; and extraordinary
expenses).
4. LIMITATION OF LIABILITY OF ADVISER. The Adviser shall give
the Trust the benefit of the Adviser's best judgment and efforts in rendering
services under this Contract. As an inducement to the Adviser's undertaking to
render these services, the Trust agrees that the Adviser shall not be liable
under this Contract for any mistake in judgment or in any other event whatsoever
except for lack of good faith, PROVIDED that nothing in this Contract shall be
deemed to protect or purport to protect the Adviser against any liability to the
Trust or its shareholders to which the Adviser would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence in the performance
of the Adviser's duties under this Contract or by reason of the Adviser's
reckless disregard of its obligations and duties hereunder.
5. COMPENSATION OF THE ADVISER. In consideration of the
services to be rendered, facilities furnished and expenses paid or assumed by
the Adviser under this Contract, the Trust shall pay the Adviser a fee with
respect to each Fund in accordance with the applicable Investment Advisory
Contract Supplement. Fees under this Contract will begin to accrue on the first
day of a Fund's operations.
If the fees payable to the Adviser pursuant to this paragraph
5 and the applicable Investment Advisory Contract Supplement begin to accrue
before the end of any month or if this Contract terminates before the end of any
month, the fees for the period from that date to the end of that month or from
the beginning of that month to the date of termination, as the case may be,
shall be prorated according to the proportion which the period bears to the full
month in which the effectiveness or termination occurs. For purposes of
calculating the monthly fees, the value of the net assets of each Fund shall be
computed in the manner specified in the Prospectus for the computation of net
asset value. For purposes of this Contract, "business day" means each weekday
except those holidays on which the Federal Reserve Bank of New York, the New
York Stock Exchange (the "Exchange") or the Adviser are closed. Currently, those
holidays include: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day,
Good Friday, Memorial Day, Independence Day,
- 5 -
<PAGE>
Labor Day, Columbus Day, Veterans' Day, Thanksgiving and
Christmas.
6. LIMITATION OF EXPENSES PAID BY THE FUNDS. The limitation of
expenses for each Fund is set forth in the applicable Investment Advisory
Contract Supplement.
7. DURATION AND TERMINATION OF THIS CONTRACT. This Contract
and any Investment Advisory Contract Supplement, shall become effective with
respect to a Fund on the date specified in the Supplement and shall thereafter
continue in effect PROVIDED, that this Contract shall continue in effect with
respect to a Fund for a period of more than two years from such date specified
in the Supplement only so long as the continuance is specifically approved at
least annually (a) by the vote of a majority of the outstanding voting
securities of that Fund (as defined in the 1940 Act) or by the Trust's Board of
Trustees and (b) by the vote, cast in person at a meeting called for the
purpose, of a majority of the Trust's Trustees who are not parties to this
Contract or "interested persons" (as defined in the 1940 Act) of any such party.
This Contract may be terminated with respect to a Fund at any time, without the
payment of any penalty, by a vote of a majority of the outstanding voting
securities of that Fund (as defined in the 1940 Act) or by a vote of a majority
of the Trust's Board of Trustees on 60 days' written notice to the Adviser or by
the Adviser on 60 days' written notice to the Trust. If this Contract is
terminated with respect to any Fund, it shall nonetheless remain in effect with
respect to any remaining Funds. This Contract shall terminate automatically in
the event of its assignment (as defined in the
1940 Act).
8. AMENDMENT OF THIS CONTRACT. No provision of this Contract
may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought, and no amendment, transfer,
assignment, sale, hypothecation or pledge of this Contract shall be effective
until approved by (a) the vote, cast in person at a meeting called for the
purpose, of a majority of the Trustees who are not parties to this Contract or
"interested persons" (as defined in the 1940 Act) of any such party, and (b)
with respect to any Fund affected by such change, waiver, discharge or
termination, by the vote of a majority of the outstanding voting securities of
the Series relating to such Fund, PROVIDED that no approval shall be required
pursuant to this clause (b) in respect of an Investment
- 6 -
<PAGE>
Advisory Contract Supplement entered into to add a Fund to those covered by this
Contract (or any amendment or termination of such Supplement) by the holders of
the outstanding voting securities of any Series other than that of such Fund.
9. OTHER ACTIVITIES OF THE ADVISER. Except to the extent
necessary to perform the Adviser's obligations under this Contract, nothing
herein shall be deemed to limit or restrict the right of the Adviser, or any
affiliate of the Adviser, or any employee of the Adviser, to engage in any other
business or to devote time and attention to the management or other aspects of
any other business, whether of a similar or dissimilar nature, or to render
services of any kind to any other corporation, firm, individual or association.
10. MISCELLANEOUS. The captions in this Contract are included
for convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. This
Contract may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. The Declaration of the Trust has been filed with
the Secretary of State of the State of Delaware. The obligations of the Trust
are not personally binding upon, nor shall resort be had to the private property
of, any of the Trustees, shareholders, officers, employees or agents of the
Trust, but only the Trust's property shall be bound.
The Trust recognizes that from time to time directors,
officers and employees of the Adviser may serve as trustees, directors, officers
and employees of other business trusts and corporations (including other
investment companies) and that such other entities may include the name "IBJ" as
part of their name, and that the Adviser or its affiliates may enter into
investment advisory or other agreements with such other entities. If the Adviser
ceases to act as investment adviser to the Trust and its Funds, the Trust agrees
that, upon the instruction of the Adviser, the Trust will take all necessary
action to change the names of the Trust and the Funds to names not including
"IBJ" in any form or combination of words.
- 7 -
<PAGE>
If the foregoing correctly sets forth the agreement between
the Trust and the Adviser please so indicate by signing and returning to the
Trust the enclosed copy hereof.
Very truly yours,
IBJ FUNDS TRUST
By: ___________________________
Title:
ACCEPTED:
IBJ SCHRODER BANK & TRUST COMPANY
By: _______________________
Title:
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<PAGE>
RESERVE MONEY MARKET FUND
A SERIES OF IBJ FUNDS TRUST
237 PARK AVENUE
NEW YORK, NEW YORK 10017
November 18, 1994
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
INVESTMENT ADVISORY CONTRACT SUPPLEMENT
Dear Sirs or Madams:
This will confirm the agreement between IBJ Funds Trust (the
"Trust") and IBJ Schroder Bank & Trust Company (the "Adviser") as follows:
Reserve Money Market Fund (the "Fund") is a series portfolio of
the Trust which has been organized as a business trust under the laws of the
State of Delaware and is an open-end management investment company. The Trust
and the Adviser have entered into a Master Investment Advisory Contract, dated
November 18, 1994 (as from time to time amended and supplemented, the "Master
Advisory Contract"), pursuant to which the Adviser has undertaken to provide or
make provision for the Trust for certain investment advisory and management
services identified therein and to provide certain other services, as more fully
set forth therein. Certain capitalized terms used without definition in this
Investment Advisory Contract Supplement have the meaning specified in the Master
Advisory Contract.
The Trust agrees with the Adviser as follows:
1. ADOPTION OF MASTER ADVISORY CONTRACT. The Master Advisory
Contract is hereby adopted for the Fund. The Fund shall be one of the "Funds"
referred to in the Master Advisory
- 1 -
<PAGE>
Contract; and its shares shall be a "Series" of shares as referred to therein.
2. PAYMENT OF FEES. For all services to be rendered,
facilities furnished and expenses paid or assumed by the Adviser as provided in
the Master Advisory Contract and herein, the Fund shall pay a monthly fee on the
first business day of each month, based upon the average daily value (as
determined on each business day at the time set forth in the Prospectus for
determining net asset value per share) of the net assets of the Fund during the
preceding month, at the annual rate of 0.35%.
3. LIMITATION OF EXPENSES PAID BY THE FUND. (a) If the
aggregate expenses of every character incurred by, or allocated to, a Fund in
any fiscal year, other than interest, taxes, expenses under the Plan, brokerage
commissions and other portfolio transaction expenses, other expenditures which
are capitalized in accordance with generally accepted accounting principles and
any extraordinary expenses (including, without limitation, litigation and
indemnification expenses) but including the fees payable under the Master
Administrative Services Contract and the fees provided for in paragraph 5 of the
Master Advisory Contract ("includable expenses"), shall exceed the expense
limitations applicable to the Fund imposed by state securities laws or
regulations thereunder, as these limitations may be raised or lowered from time
to time, the Fund may deduct from the fees to be paid to the Adviser, or the
Adviser will bear, to the extent required by state law, that portion of such
excess which bears the same relation to the total of such excess as the fee to
be paid to the Adviser bears to the total fee otherwise payable for the fiscal
year by the Fund pursuant to the Master Advisory Contract and the Master
Administrative Services Contract between the Trust and the Administrator. The
Adviser's obligation pursuant hereto will be limited to the amount of the fees
payable for the fiscal year by the Fund pursuant to the Master Advisory
Contract.
(b) With respect to portions of a fiscal year in which this
Contract shall be in effect, the limitation specified in subparagraph (a) of
paragraph 3 above shall be prorated according to the proportion which that
portion of the fiscal year bears to the full fiscal year. At the end of each
month of the Trust's fiscal year, the Administrator will review the includable
expenses accrued during that fiscal year to the end of the period and shall
estimate the contemplated includable expenses for the
- 2 -
<PAGE>
balance of that fiscal year. If, as a result of that review and estimation, it
appears likely that the includable expenses will exceed such limitation for a
fiscal year with respect to the Fund, the monthly fees relating to that Fund
payable to the Adviser under this Contract for such month shall be reduced,
subject to the later adjustments at the end of each month through the end of the
fiscal year to reflect actual expenses, by an amount equal to the proportionate
share attributable to the Adviser as described in subparagraph (a) of paragraph
3 above of a pro rata portion (prorated on the basis of the remaining months of
the fiscal year, including the month just ended) of the amount by which the
includable expenses for the fiscal year (less an amount equal to the aggregate
of actual reductions made pursuant to this provision with respect to prior
months of the fiscal year) are expected to exceed such limitation. For purposes
of the foregoing, the value of the net assets of the Fund shall be computed in
the manner specified in the penultimate sentence of paragraph 5 of the Master
Advisory Contract, and any payments required to be made by the Adviser shall be
made once a year promptly after the end of the Trust's fiscal year.
- 3 -
<PAGE>
If the foregoing correctly sets forth the agreement between the
Trust and the Adviser, please so indicate by signing and returning to the Trust
the enclosed copy hereof.
Very truly yours,
RESERVE MONEY MARKET FUND,
a Series of IBJ Funds Trust
By: ------------------------
Title:
The foregoing Contract
is hereby agreed to as of
the date hereof:
IBJ SCHRODER BANK & TRUST COMPANY
By: ---------------------
Title:
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<PAGE>
BOND FUND
A SERIES OF IBJ FUNDS TRUST
237 PARK AVENUE
NEW YORK, NEW YORK 10017
November 18, 1994
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
INVESTMENT ADVISORY CONTRACT SUPPLEMENT
Dear Sirs or Madams:
This will confirm the agreement between IBJ Funds Trust (the
"Trust") and IBJ Schroder Bank & Trust Company (the "Adviser") as follows:
Bond Fund (the "Fund") is a series portfolio of the Trust which
has been organized as a business trust under the laws of the State of Delaware
and is an open-end management investment company. The Trust and the Adviser have
entered into a Master Investment Advisory Contract, dated November 18, 1994 (as
from time to time amended and supplemented, the "Master Advisory Contract"),
pursuant to which the Adviser has undertaken to provide or make provision for
the Trust for certain investment advisory and management services identified
therein and to provide certain other services, as more fully set forth therein.
Certain capitalized terms used without definition in this Investment Advisory
Contract Supplement have the meaning specified in the Master Advisory Contract.
The Trust agrees with the Adviser as follows:
1. ADOPTION OF MASTER ADVISORY CONTRACT. The Master Advisory
Contract is hereby adopted for the Fund. The Fund shall be one of the "Funds"
referred to in the Master Advisory
- 1 -
<PAGE>
Contract; and its shares shall be a "Series" of shares as referred to therein.
2. PAYMENT OF FEES. For all services to be rendered,
facilities furnished and expenses paid or assumed by the Adviser as provided in
the Master Advisory Contract and herein, the Fund shall pay a monthly fee on the
first business day of each month, based upon the average daily value (as
determined on each business day at the time set forth in the Prospectus for
determining net asset value per share) of the net assets of the Fund during the
preceding month, at the annual rate of 0.50%.
3. LIMITATION OF EXPENSES PAID BY THE FUND. (a) If the
aggregate expenses of every character incurred by, or allocated to, a Fund in
any fiscal year, other than interest, taxes, expenses under the Plan, brokerage
commissions and other portfolio transaction expenses, other expenditures which
are capitalized in accordance with generally accepted accounting principles and
any extraordinary expenses (including, without limitation, litigation and
indemnification expenses) but including the fees payable under the Master
Administrative Services Contract and the fees provided for in paragraph 5 of the
Master Advisory Contract ("includable expenses"), shall exceed the expense
limitations applicable to the Fund imposed by state securities laws or
regulations thereunder, as these limitations may be raised or lowered from time
to time, the Fund may deduct from the fees to be paid to the Adviser, or the
Adviser will bear, to the extent required by state law, that portion of such
excess which bears the same relation to the total of such excess as the fee to
be paid to the Adviser bears to the total fee otherwise payable for the fiscal
year by the Fund pursuant to the Master Advisory Contract and the Master
Administrative Services Contract between the Trust and the Administrator. The
Adviser's obligation pursuant hereto will be limited to the amount of the fees
payable for the fiscal year by the Fund pursuant to the Master Advisory
Contract.
(b) With respect to portions of a fiscal year in which this
Contract shall be in effect, the limitation specified in subparagraph (a) of
paragraph 3 above shall be prorated according to the proportion which that
portion of the fiscal year bears to the full fiscal year. At the end of each
month of the Trust's fiscal year, the Administrator will review the includable
expenses accrued during that fiscal year to the end of the period and shall
estimate the contemplated includable expenses for the
- 2 -
<PAGE>
balance of that fiscal year. If, as a result of that review and estimation, it
appears likely that the includable expenses will exceed such limitation for a
fiscal year with respect to the Fund, the monthly fees relating to that Fund
payable to the Adviser under this Contract for such month shall be reduced,
subject to the later adjustments at the end of each month through the end of the
fiscal year to reflect actual expenses, by an amount equal to the proportionate
share attributable to the Adviser as described in subparagraph (a) of paragraph
3 above of a pro rata portion (prorated on the basis of the remaining months of
the fiscal year, including the month just ended) of the amount by which the
includable expenses for the fiscal year (less an amount equal to the aggregate
of actual reductions made pursuant to this provision with respect to prior
months of the fiscal year) are expected to exceed such limitation. For purposes
of the foregoing, the value of the net assets of the Fund shall be computed in
the manner specified in the penultimate sentence of paragraph 5 of the Master
Advisory Contract, and any payments required to be made by the Adviser shall be
made once a year promptly after the end of the Trust's fiscal year.
- 3 -
<PAGE>
If the foregoing correctly sets forth the agreement between the
Trust and the Adviser, please so indicate by signing and returning to the Trust
the enclosed copy hereof.
Very truly yours,
BOND FUND, a Series of IBJ Funds
Trust
By: ---------------------
Title:
The foregoing Contract
is hereby agreed to as of
the date hereof:
IBJ SCHRODER BANK & TRUST COMPANY
By: --------------------
Title:
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<PAGE>
CORE EQUITY FUND
A SERIES OF IBJ FUNDS TRUST
237 PARK AVENUE
NEW YORK, NEW YORK 10017
November 18, 1994
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
INVESTMENT ADVISORY CONTRACT SUPPLEMENT
Dear Sirs or Madams:
This will confirm the agreement between IBJ Funds Trust (the
"Trust") and IBJ Schroder Bank & Trust Company (the "Adviser") as follows:
Core Equity Fund (the "Fund") is a series portfolio of the Trust
which has been organized as a business trust under the laws of the State of
Delaware and is an open-end management investment company. The Trust and the
Adviser have entered into a Master Investment Advisory Contract, dated November
18, 1994 (as from time to time amended and supplemented, the "Master Advisory
Contract"), pursuant to which the Adviser has undertaken to provide or make
provision for the Trust for certain investment advisory and management services
identified therein and to provide certain other services, as more fully set
forth therein. Certain capitalized terms used without definition in this
Investment Advisory Contract Supplement have the meaning specified in the Master
Advisory Contract.
The Trust agrees with the Adviser as follows:
1. ADOPTION OF MASTER ADVISORY CONTRACT. The Master Advisory
Contract is hereby adopted for the Fund. The Fund shall be one of the "Funds"
referred to in the Master Advisory
- 1 -
<PAGE>
Contract; and its shares shall be a "Series" of shares as referred to therein.
2. PAYMENT OF FEES. For all services to be rendered,
facilities furnished and expenses paid or assumed by the Adviser as provided in
the Master Advisory Contract and herein, the Fund shall pay a monthly fee on the
first business day of each month, based upon the average daily value (as
determined on each business day at the time set forth in the Prospectus for
determining net asset value per share) of the net assets of the Fund during the
preceding month, at the annual rate of 0.60%.
3. LIMITATION OF EXPENSES PAID BY THE FUND. (a) If the
aggregate expenses of every character incurred by, or allocated to, a Fund in
any fiscal year, other than interest, taxes, expenses under the Plan, brokerage
commissions and other portfolio transaction expenses, other expenditures which
are capitalized in accordance with generally accepted accounting principles and
any extraordinary expenses (including, without limitation, litigation and
indemnification expenses) but including the fees payable under the Master
Administrative Services Contract and the fees provided for in paragraph 5 of the
Master Advisory Contract ("includable expenses"), shall exceed the expense
limitations applicable to the Fund imposed by state securities laws or
regulations thereunder, as these limitations may be raised or lowered from time
to time, the Fund may deduct from the fees to be paid to the Adviser, or the
Adviser will bear, to the extent required by state law, that portion of such
excess which bears the same relation to the total of such excess as the fee to
be paid to the Adviser bears to the total fee otherwise payable for the fiscal
year by the Fund pursuant to the Master Advisory Contract and the Master
Administrative Services Contract between the Trust and the Administrator. The
Adviser's obligation pursuant hereto will be limited to the amount of the fees
payable for the fiscal year by the Fund pursuant to the Master Advisory
Contract.
(b) With respect to portions of a fiscal year in which this
Contract shall be in effect, the limitation specified in subparagraph (a) of
paragraph 3 above shall be prorated according to the proportion which that
portion of the fiscal year bears to the full fiscal year. At the end of each
month of the Trust's fiscal year, the Administrator will review the includable
expenses accrued during that fiscal year to the end of the period and shall
estimate the contemplated includable expenses for the
- 2 -
<PAGE>
balance of that fiscal year. If, as a result of that review and estimation, it
appears likely that the includable expenses will exceed such limitation for a
fiscal year with respect to the Fund, the monthly fees relating to that Fund
payable to the Adviser under this Contract for such month shall be reduced,
subject to the later adjustments at the end of each month through the end of the
fiscal year to reflect actual expenses, by an amount equal to the proportionate
share attributable to the Adviser as described in subparagraph (a) of paragraph
3 above of a pro rata portion (prorated on the basis of the remaining months of
the fiscal year, including the month just ended) of the amount by which the
includable expenses for the fiscal year (less an amount equal to the aggregate
of actual reductions made pursuant to this provision with respect to prior
months of the fiscal year) are expected to exceed such limitation. For purposes
of the foregoing, the value of the net assets of the Fund shall be computed in
the manner specified in the penultimate sentence of paragraph 5 of the Master
Advisory Contract, and any payments required to be made by the Adviser shall be
made once a year promptly after the end of the Trust's fiscal year.
- 3 -
<PAGE>
If the foregoing correctly sets forth the agreement between the
Trust and the Adviser, please so indicate by signing and returning to the Trust
the enclosed copy hereof.
Very truly yours,
CORE EQUITY FUND, a Series of IBJ
Funds Trust
By: ------------------------
Title:
The foregoing Contract
is hereby agreed to as of
the date hereof:
IBJ SCHRODER BANK & TRUST COMPANY
By: -----------------------
Title:
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<PAGE>
GROWTH AND INCOME FUND
A SERIES OF IBJ FUNDS TRUST
237 PARK AVENUE
NEW YORK, NEW YORK 10017
November 18, 1994
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
INVESTMENT ADVISORY CONTRACT SUPPLEMENT
Dear Sirs or Madams:
This will confirm the agreement between IBJ Funds Trust (the
"Trust") and IBJ Schroder Bank & Trust Company (the "Adviser") as follows:
Growth and Income Fund (the "Fund") is a series portfolio of the
Trust which has been organized as a business trust under the laws of the State
of Delaware and is an open-end management investment company. The Trust and the
Adviser have entered into a Master Investment Advisory Contract, dated November
18, 1994 (as from time to time amended and supplemented, the "Master Advisory
Contract"), pursuant to which the Adviser has undertaken to provide or make
provision for the Trust for certain investment advisory and management services
identified therein and to provide certain other services, as more fully set
forth therein. Certain capitalized terms used without definition in this
Investment Advisory Contract Supplement have the meaning specified in the Master
Advisory Contract.
The Trust agrees with the Adviser as follows:
1. ADOPTION OF MASTER ADVISORY CONTRACT. The Master
Advisory Contract is hereby adopted for the Fund. The Fund shall
be one of the "Funds" referred to in the Master Advisory
- 1 -
<PAGE>
Contract; and its shares shall be a "Series" of shares as referred to therein.
2. PAYMENT OF FEES. For all services to be rendered,
facilities furnished and expenses paid or assumed by the Adviser as provided in
the Master Advisory Contract and herein, the Fund shall pay a monthly fee on the
first business day of each month, based upon the average daily value (as
determined on each business day at the time set forth in the Prospectus for
determining net asset value per share) of the net assets of the Fund during the
preceding month, at the annual rate of 0.60%.
3. LIMITATION OF EXPENSES PAID BY THE FUND. (a) If the
aggregate expenses of every character incurred by, or allocated to, a Fund in
any fiscal year, other than interest, taxes, expenses under the Plan, brokerage
commissions and other portfolio transaction expenses, other expenditures which
are capitalized in accordance with generally accepted accounting principles and
any extraordinary expenses (including, without limitation, litigation and
indemnification expenses) but including the fees payable under the Master
Administrative Services Contract and the fees provided for in paragraph 5 of the
Master Advisory Contract ("includable expenses"), shall exceed the expense
limitations applicable to the Fund imposed by state securities laws or
regulations thereunder, as these limitations may be raised or lowered from time
to time, the Fund may deduct from the fees to be paid to the Adviser, or the
Adviser will bear, to the extent required by state law, that portion of such
excess which bears the same relation to the total of such excess as the fee to
be paid to the Adviser bears to the total fee otherwise payable for the fiscal
year by the Fund pursuant to the Master Advisory Contract and the Master
Administrative Services Contract between the Trust and the Administrator. The
Adviser's obligation pursuant hereto will be limited to the amount of the fees
payable for the fiscal year by the Fund pursuant to the Master Advisory
Contract.
(b) With respect to portions of a fiscal year in which this
Contract shall be in effect, the limitation specified in subparagraph (a) of
paragraph 3 above shall be prorated according to the proportion which that
portion of the fiscal year bears to the full fiscal year. At the end of each
month of the Trust's fiscal year, the Administrator will review the includable
expenses accrued during that fiscal year to the end of the period and shall
estimate the contemplated includable expenses for the
- 2 -
<PAGE>
balance of that fiscal year. If, as a result of that review and estimation, it
appears likely that the includable expenses will exceed such limitation for a
fiscal year with respect to the Fund, the monthly fees relating to that Fund
payable to the Adviser under this Contract for such month shall be reduced,
subject to the later adjustments at the end of each month through the end of the
fiscal year to reflect actual expenses, by an amount equal to the proportionate
share attributable to the Adviser as described in subparagraph (a) of paragraph
3 above of a pro rata portion (prorated on the basis of the remaining months of
the fiscal year, including the month just ended) of the amount by which the
includable expenses for the fiscal year (less an amount equal to the aggregate
of actual reductions made pursuant to this provision with respect to prior
months of the fiscal year) are expected to exceed such limitation. For purposes
of the foregoing, the value of the net assets of the Fund shall be computed in
the manner specified in the penultimate sentence of paragraph 5 of the Master
Advisory Contract, and any payments required to be made by the Adviser shall be
made once a year promptly after the end of the Trust's fiscal year.
- 3 -
<PAGE>
If the foregoing correctly sets forth the agreement between the
Trust and the Adviser, please so indicate by signing and returning to the Trust
the enclosed copy hereof.
Very truly yours,
GROWTH AND INCOME FUND,
a Series of IBJ Funds Trust
By: -------------------------
Title:
The foregoing Contract
is hereby agreed to as of
the date hereof:
IBJ SCHRODER BANK & TRUST COMPANY
By: ------------------------
Title:
- 4 -
<PAGE>
Exhibit 5(b)
Form of Master Administration Contract
and Supplements between Registrant
and Furman Selz Incorporated
<PAGE>
MASTER ADMINISTRATIVE SERVICES CONTRACT
IBJ FUNDS TRUST
237 PARK AVENUE
NEW YORK, NEW YORK 10017
November 18, 1994
Furman Selz Incorporated
237 Park Avenue
New York, New York 10017
Dear Sirs or Madams:
This will confirm the agreement between the undersigned (the
"Trust") and you (the "Administrator") as follows:
1. The Trust is an open-end investment company organized as a
Delaware business trust, and consists of one or more separate investment
portfolios, as may be established and designated by the Trustees from time to
time (the "Funds"). This contract shall pertain to any Fund as shall be
designated in a Supplement to this contract ("Supplement"), as further agreed by
the Trust and the Administrator. A separate class of shares of beneficial
interest in the Trust is offered to investors with respect to each Fund. The
Trust engages in the business of investing and reinvesting the assets of the
Funds in the manner and in accordance with the investment objective and
restrictions specified in the Prospectus or Prospectuses (the "Prospectus")
relating to the Trust and the Fund included in the Registration Statement, as
amended from time to time (the "Registration Statement"), filed by the Trust
under the Investment Company Act of 1940 (the "1940 Act") and the Securities Act
of 1933 (the "1933 Act"). Copies of the documents referred to in the preceding
sentence have been furnished to the Administrator. Any amendments to those
documents shall be furnished to the Administrator promptly.
2. (a) The Administrator shall provide all management and
administrative services reasonably necessary for
- 1 -
<PAGE>
the operation of the Trust and the Funds, other than those investment management
and administrative services which are to be provided pursuant to the Master
Investment Advisory Agreement, Custodian Contract or Transfer Agency Agreement
(each as defined in the Prospectus or Statement of Additional Information). The
Administrator shall make periodic reports to the Trust's Board of Trustees on
the performance of its obligations under this Contract.
(b) The Administrator shall, at its expense, (i) provide
the Trust with office space and office facilities reasonably necessary for the
operation of the Trust and the Funds, (ii) employ or associate with itself such
persons as it believes appropriate to assist it in performing its obligations
under this contract and (iii) provide the Trust with persons satisfactory to the
Trust's Board of Trustees to serve as officers and employees of the Trust in the
discretion of the Trustees of the Trust. The Administrator shall pay the entire
compensation of all of the Trust's officers and employees who are affiliated
persons of the Administrator and the compensation shall not be deemed to be
expenses of the Trust for purposes of paragraph 5 hereof.
(c) Except as provided in subparagraph 2(b) above, and in
the Master Investment Advisory Agreement between the Trust and IBJ Schroder Bank
& Trust Company (the "Master Advisory Agreement"), the Trust shall be
responsible for all of its expenses and liabilities, including compensation of
its trustees who are not affiliated with the Sponsor; taxes and governmental
fees; interest charges; fees and expenses of the Trust's independent accountants
and legal counsel; trade association membership dues; fees and expenses of any
custodian, transfer agent, registrar and dividend disbursing agent of the Trust;
expenses of issuing, redeeming, registering and qualifying for sale shares of
beneficial interest in the Trust; expenses of preparing and printing share
certificates, prospectuses and reports to shareholders, notices, proxy
statements and reports to regulatory agencies; the cost of office supplies,
including stationery; travel expenses of all officers, trustees and employees;
insurance premiums; fidelity bonds; brokerage and other expenses of executing
portfolio transactions; expenses of shareholders' meetings; organizational
expenses; extraordinary expenses; and reimbursements to the Administrator in
accordance with the Trust's Distribution Plan and Agreement (and Supplements
thereto)(the "Plan"), pursuant to Rule 12b-1 under the 1940 Act.
- 2 -
<PAGE>
3. The Administrator shall give the Trust the benefit of the
Administrator's best judgment and efforts in rendering services under this
contract. As an inducement to the Administrator's undertaking to render these
services, the Trust agrees that the Administrator shall not be liable under this
contract for any mistake in judgment or in any other event whatsoever except for
lack of good faith, provided that nothing in this contract shall be deemed to
protect or purport to protect the Administrator against any liability to the
Trust or its shareholders to which the Administrator would otherwise be subject
by reason of willful misfeasance, bad faith or gross negligence in the
performance of the Administrator's duties under this contract or by reason of
the Administrator's reckless disregard of its obligations and duties hereunder.
4. In consideration of the services to be rendered by the
Administrator under this contract, the Trust shall pay the Administrator a
monthly fee with respect to each Fund on the first business day of each month,
based upon the average daily value of the net assets of the Fund during the
preceding month at annual rates set forth in a Supplement to this contract with
respect to the Fund. Fees under this Contract will begin to accrue on the first
day of a Fund's operations.
If the fees payable to the Administrator pursuant to this
paragraph 4 begin to accrue before the end of any month or if this contract
terminates before the end of any month, the fees for the period from that date
to the end of that month or from the beginning of that month to the date of
termination, as the case may be, shall be prorated according to the proportion
that the period bears to the full month in which the effectiveness or
termination occurs. For purposes of calculating the monthly fees, the value of
the net assets of the Fund shall be computed in the manner specified in the
Prospectus for the computation of net asset value. For purposes of this
contract, "business day" means each weekday except those holidays on which the
Federal Reserve Bank of New York, the New York Stock Exchange (the "Exchange")
or the investment adviser is closed. Currently, those holidays include: New
Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas.
5. The limitation of expenses of each Fund is set forth in a
supplement to this contract with respect to each Fund.
- 3 -
<PAGE>
6. This contract and any Supplement shall become effective
with respect to a Fund only if they have been approved by vote of a majority of
(i) the Board of Trustees of the Trust, and (ii) the trustees who are not
"interested persons" (as defined in the 1940 Act) of the Trust and who have no
direct or indirect financial interest in this contract, cast in person at a
meeting called for the purpose of voting on such approval. This contract, and
any Supplement, shall continue in effect with respect to a Fund until the last
day of the calendar year next following the date of effectiveness specified in a
Supplement to the contract, and thereafter shall continue automatically for
successive annual periods ending on the last day of each calendar year, subject
to the immediately following sentence, and provided such continuance is
specifically approved at least annually by a vote of a majority of (i) the
Trust's Board of Trustees and (ii) the trustees who are not "interested persons"
(as defined in the 1940 Act) of the Trust and who have no direct or indirect
financial interest in the contract, by vote cast in person at a meeting called
for the purpose of voting on such approval. This contract may be terminated with
respect to a Fund at any time, without payment of any penalty, by a vote of a
majority of the outstanding voting securities of the Fund (as defined in the
1940 Act) or by a vote of a majority of the Trust's Board of Trustees on 60
days' written notice to the Administrator or by the Administrator on 60 days'
written notice to the Trust. If this contract is terminated with respect to any
Fund, it shall nonetheless remain in effect with respect to any remaining Funds.
This contract shall terminate automatically in the event of its assignment (as
defined in the 1940 Act).
7. Except to the extent necessary to perform the
Administrator's obligations under this contract, nothing herein shall be deemed
to limit or restrict the right of the Administrator, or any affiliate of the
Administrator, or any employee of the Administrator, to engage in any other
business or to devote time and attention to the management or other aspects of
any other business, whether of a similar or dissimilar nature, or to render
services of any kind to any other corporation, firm, individual or association.
8. The Certificate of Trust, establishing the Trust, dated as
of August 25, 1994, together with all amendments thereto (the "Certificate"), is
on file in the Office of the Secretary of the State of Delaware. The obligations
of the Trust are not personally binding upon, nor shall resort be had to the
private
- 4 -
<PAGE>
property of, any of the Trustees, shareholders, officers, employees, or agents
of the Trust, but only the Trust's property shall be bound.
9. This contract shall be construed and its provisions
interpreted in accordance with the laws of the State of New York.
If the foregoing correctly sets forth the agreement between the
Trust and the Administrator, please so indicate by signing and returning to the
Trust the enclosed copy hereof.
Very truly yours,
IBJ FUNDS TRUST
By -------------------------
Title:
ACCEPTED:
FURMAN SELZ INCORPORATED
By -----------------------
Title:
- 5 -
<PAGE>
RESERVE MONEY MARKET FUND
A SERIES OF IBJ FUNDS TRUST
237 PARK AVENUE
NEW YORK, NEW YORK 10017
November 18, 1994
Furman Selz Incorporated
237 Park Avenue
New York, New York 10017
ADMINISTRATIVE SERVICES CONTRACT SUPPLEMENT
Dear Sirs or Madams:
This will confirm the agreement between the undersigned (the
"Trust") and Furman Selz Incorporated (the "Administrator") as follows:
1. The Trust is an open-end management investment company,
organized as a Delaware business trust, and consists of such separate investment
portfolios as have been or may be established by the Trustees of the Trust from
time to time. A separate class of shares of beneficial interest of the Trust is
offered to investors with respect to each investment portfolio. Reserve Money
Market Fund (the "Fund") is a separate investment portfolio of the Trust.
2. The Trust and the Administrator have entered into a Master
Administrative Services Contract ("Master Contract") dated November 18, 1994
pursuant to which the Administrator has agreed to provide management and
administrative services to the Trust as set forth in that contract.
3. As provided for in paragraph 1 of the Master Contract, the
Trust hereby adopts the Master Contract with respect to the Fund and the
Administrator hereby acknowledges that the Master Contract shall pertain to the
Fund, the terms and
- 1 -
<PAGE>
conditions of such Master Contract being hereby incorporated herein by
reference.
4. The term "Fund" as used in the Master Contract shall, for
purposes of this Supplement, pertain to the Fund.
5. As provided in paragraph 4 of the Master Contract and
subject to further conditions as set forth therein, the Trust shall with respect
to the Fund pay the Administrator a monthly fee on the first business day of
each month based upon the average daily value of the net assets of the Fund
during the preceding month at the annual rate of 0.15%.
6. This Supplement and the Master Contract (together, the
"Contract") shall become effective on November 18, 1994, and shall continue in
effect with respect to the Fund until the last day of the calendar year next
following such date, and thereafter shall continue automatically for successive
annual periods ending on the last day of each calendar year, subject to the
immediately following sentence, and provided such continuance is specifically
approved at least annually by a vote of a majority of (i) the Trust's Board of
Trustees and (ii) the trustees who are not "interested persons" (as defined in
the 1940 Act) of the Trust and who have no direct or indirect financial interest
in the Contract, by vote cast in person at a meeting called for the purpose of
voting on such approval. This Contract may be terminated with respect to the
Fund at any time, without payment of any penalty, by vote of a majority of the
outstanding voting securities of the Fund (as defined in the 1940 Act) or by a
vote of a majority of the Trust's Board of Trustees on 60 days' written notice
to the Administrator or by the Administrator on 60 days' written notice to the
Trust. This Contract shall terminate automatically in the event of its
assignment (as defined in the 1940 Act).
7. (a) If the aggregate expenses of every character incurred
by, or allocated to, the Fund in any fiscal year, other than interest, taxes,
expenses under the Plans, brokerage commissions and other portfolio transaction
expenses, other expenditures which are capitalized in accordance with generally
accepted accounting principles and any extraordinary expense (including, without
limitation, litigation and indemnification expense), but including the fees
provided for in paragraph 4 of the Master Contract and under the Master
Investment Advisory Agreement ("includable expenses"), shall exceed the expense
- 2 -
<PAGE>
limitations applicable to the Fund imposed by state securities laws or
regulations thereunder, as these limitations may be raised or lowered from time
to time, the Fund may deduct from the fees to be paid to the Administrator, or
the Administrator will bear, to the extent required by state law, that portion
of such excess which bears the same relation to the total of such excess as the
fee to the Administrator bears to the total fee otherwise payable for the fiscal
year by the Fund pursuant to the Master Contract and the Master Advisory
Agreement between the Trust and the Adviser. The Administrator's obligation
pursuant hereto will be limited to the amount of the fees payable for the fiscal
year by the Fund pursuant to the Master Contract.
(b) With respect to portions of a fiscal year in which this
contract shall be in effect, the limitation specified in subparagraph (a) of
paragraph 7 above shall be prorated according to the proportion which that
portion of the fiscal year bears to the full fiscal year. At the end of each
month of the Trust's fiscal year, the Administrator will review the includable
expenses accrued during that fiscal year to the end of the period and shall
estimate the contemplated includable expenses for the balance of that fiscal
year. If, as a result of that review and estimation, it appears likely that the
includable expenses will exceed the limitations referred to in this paragraph 7
for a fiscal year, the monthly fees relating to the Fund, payable to the
Administrator under this contract for such month shall be reduced, subject to
later adjustments at the end of each month through the end of the fiscal year to
reflect actual expenses, by an amount equal to the proportionate share
attributable to the Administrator as described in subparagraph (a) of paragraph
7 above of a pro rata portion (prorated on the basis of the remaining months of
the fiscal year, including the month just ended) of the amount by which the
includable expenses for the fiscal year (less an amount equal to the aggregate
of actual reductions made pursuant to this provision with respect to prior
months of the fiscal year) are expected to exceed the limitations provided in
this paragraph 7. For purposes of the foregoing, the value of the net assets of
the Fund shall be computed in the manner specified in paragraph 4 of the Master
Contract, and any payments required to be made by the Administrator shall be
made once a year promptly after the end of the Trust's fiscal year.
- 3 -
<PAGE>
If the foregoing correctly sets forth the agreement between the
Trust and the Administrator, please so indicate by signing and returning to the
Trust the enclosed copy hereof.
Very truly yours,
RESERVE MONEY MARKET FUND, a
Series of IBJ Funds Trust
By:---------------------------
Title:
Accepted:
FURMAN SELZ INCORPORATED
By:------------------------
Title:
- 4 -
<PAGE>
BOND FUND
A SERIES OF IBJ FUNDS TRUST
237 PARK AVENUE
NEW YORK, NEW YORK 10017
November 18, 1994
Furman Selz Incorporated
237 Park Avenue
New York, New York 10017
ADMINISTRATIVE SERVICES CONTRACT SUPPLEMENT
Dear Sirs or Madams:
This will confirm the agreement between the undersigned (the
"Trust") and Furman Selz Incorporated (the "Administrator") as follows:
1. The Trust is an open-end management investment company,
organized as a Delaware business trust, and consists of such separate investment
portfolios as have been or may be established by the Trustees of the Trust from
time to time. A separate class of shares of beneficial interest of the Trust is
offered to investors with respect to each investment portfolio. Bond Fund (the
"Fund") is a separate investment portfolio of the Trust.
2. The Trust and the Administrator have entered into a Master
Administrative Services Contract ("Master Contract") dated November 18, 1994
pursuant to which the Administrator has agreed to provide management and
administrative services to the Trust as set forth in that contract.
3. As provided for in paragraph 1 of the Master Contract, the
Trust hereby adopts the Master Contract with respect to the Fund and the
Administrator hereby acknowledges that the Master Contract shall pertain to the
Fund, the terms and
- 1 -
<PAGE>
conditions of such Master Contract being hereby incorporated herein by
reference.
4. The term "Fund" as used in the Master Contract shall, for
purposes of this Supplement, pertain to the Fund.
5. As provided in paragraph 4 of the Master Contract and
subject to further conditions as set forth therein, the Trust shall with respect
to the Fund pay the Administrator a monthly fee on the first business day of
each month based upon the average daily value of the net assets of the Fund
during the preceding month at the annual rate of 0.15%.
6. This Supplement and the Master Contract (together, the
"Contract") shall become effective on November 18, 1994, and shall continue in
effect with respect to the Fund until the last day of the calendar year next
following such date, and thereafter shall continue automatically for successive
annual periods ending on the last day of each calendar year, subject to the
immediately following sentence, and provided such continuance is specifically
approved at least annually by a vote of a majority of (i) the Trust's Board of
Trustees and (ii) the trustees who are not "interested persons" (as defined in
the 1940 Act) of the Trust and who have no direct or indirect financial interest
in the Contract, by vote cast in person at a meeting called for the purpose of
voting on such approval. This Contract may be terminated with respect to the
Fund at any time, without payment of any penalty, by vote of a majority of the
outstanding voting securities of the Fund (as defined in the 1940 Act) or by a
vote of a majority of the Trust's Board of Trustees on 60 days' written notice
to the Administrator or by the Administrator on 60 days' written notice to the
Trust. This Contract shall terminate automatically in the event of its
assignment (as defined in the 1940 Act).
7. (a) If the aggregate expenses of every character incurred
by, or allocated to, the Fund in any fiscal year, other than interest, taxes,
expenses under the Plans, brokerage commissions and other portfolio transaction
expenses, other expenditures which are capitalized in accordance with generally
accepted accounting principles and any extraordinary expense (including, without
limitation, litigation and indemnification expense), but including the fees
provided for in paragraph 4 of the Master Contract and under the Master
Investment Advisory Agreement ("includable expenses"), shall exceed the expense
- 2 -
<PAGE>
limitations applicable to the Fund imposed by state securities laws or
regulations thereunder, as these limitations may be raised or lowered from time
to time, the Fund may deduct from the fees to be paid to the Administrator, or
the Administrator will bear, to the extent required by state law, that portion
of such excess which bears the same relation to the total of such excess as the
fee to the Administrator bears to the total fee otherwise payable for the fiscal
year by the Fund pursuant to the Master Contract and the Master Advisory
Agreement between the Trust and the Adviser. The Administrator's obligation
pursuant hereto will be limited to the amount of the fees payable for the fiscal
year by the Fund pursuant to the Master Contract.
(b) With respect to portions of a fiscal year in which this
contract shall be in effect, the limitation specified in subparagraph (a) of
paragraph 7 above shall be prorated according to the proportion which that
portion of the fiscal year bears to the full fiscal year. At the end of each
month of the Trust's fiscal year, the Administrator will review the includable
expenses accrued during that fiscal year to the end of the period and shall
estimate the contemplated includable expenses for the balance of that fiscal
year. If, as a result of that review and estimation, it appears likely that the
includable expenses will exceed the limitations referred to in this paragraph 7
for a fiscal year, the monthly fees relating to the Fund, payable to the
Administrator under this contract for such month shall be reduced, subject to
later adjustments at the end of each month through the end of the fiscal year to
reflect actual expenses, by an amount equal to the proportionate share
attributable to the Administrator as described in subparagraph (a) of paragraph
7 above of a pro rata portion (prorated on the basis of the remaining months of
the fiscal year, including the month just ended) of the amount by which the
includable expenses for the fiscal year (less an amount equal to the aggregate
of actual reductions made pursuant to this provision with respect to prior
months of the fiscal year) are expected to exceed the limitations provided in
this paragraph 7. For purposes of the foregoing, the value of the net assets of
the Fund shall be computed in the manner specified in paragraph 4 of the Master
Contract, and any payments required to be made by the Administrator shall be
made once a year promptly after the end of the Trust's fiscal year.
- 3 -
<PAGE>
If the foregoing correctly sets forth the agreement between
the Trust and the Administrator, please so indicate by signing and returning to
the Trust the enclosed copy hereof.
Very truly yours,
BOND FUND, a Series of IBJ
Funds Trust
By:------------------------------
Title:
Accepted:
FURMAN SELZ INCORPORATED
By:--------------------------
Title:
- 4 -
<PAGE>
CORE EQUITY FUND
A SERIES OF IBJ FUNDS TRUST
237 PARK AVENUE
NEW YORK, NEW YORK 10017
November 18, 1994
Furman Selz Incorporated
237 Park Avenue
New York, New York 10017
ADMINISTRATIVE SERVICES CONTRACT SUPPLEMENT
Dear Sirs or Madams:
This will confirm the agreement between the undersigned (the
"Trust") and Furman Selz Incorporated (the "Administrator") as follows:
1. The Trust is an open-end management investment company,
organized as a Delaware business trust, and consists of such separate investment
portfolios as have been or may be established by the Trustees of the Trust from
time to time. A separate class of shares of beneficial interest of the Trust is
offered to investors with respect to each investment portfolio. Core Equity Fund
(the "Fund") is a separate investment portfolio of the Trust.
2. The Trust and the Administrator have entered into a Master
Administrative Services Contract ("Master Contract") dated November 18, 1994
pursuant to which the Administrator has agreed to provide management and
administrative services to the Trust as set forth in that contract.
3. As provided for in paragraph 1 of the Master Contract, the
Trust hereby adopts the Master Contract with respect to the Fund and the
Administrator hereby acknowledges that the Master Contract shall pertain to the
Fund, the terms and
- 1 -
<PAGE>
conditions of such Master Contract being hereby incorporated herein by
reference.
4. The term "Fund" as used in the Master Contract shall, for
purposes of this Supplement, pertain to the Fund.
5. As provided in paragraph 4 of the Master Contract and
subject to further conditions as set forth therein, the Trust shall with respect
to the Fund pay the Administrator a monthly fee on the first business day of
each month based upon the average daily value of the net assets of the Fund
during the preceding month at the annual rate of 0.15%.
6. This Supplement and the Master Contract (together, the
"Contract") shall become effective on November 18, 1994, and shall continue in
effect with respect to the Fund until the last day of the calendar year next
following such date, and thereafter shall continue automatically for successive
annual periods ending on the last day of each calendar year, subject to the
immediately following sentence, and provided such continuance is specifically
approved at least annually by a vote of a majority of (i) the Trust's Board of
Trustees and (ii) the trustees who are not "interested persons" (as defined in
the 1940 Act) of the Trust and who have no direct or indirect financial interest
in the Contract, by vote cast in person at a meeting called for the purpose of
voting on such approval. This Contract may be terminated with respect to the
Fund at any time, without payment of any penalty, by vote of a majority of the
outstanding voting securities of the Fund (as defined in the 1940 Act) or by a
vote of a majority of the Trust's Board of Trustees on 60 days' written notice
to the Administrator or by the Administrator on 60 days' written notice to the
Trust. This Contract shall terminate automatically in the event of its
assignment (as defined in the 1940 Act).
7. (a) If the aggregate expenses of every character incurred
by, or allocated to, the Fund in any fiscal year, other than interest, taxes,
expenses under the Plans, brokerage commissions and other portfolio transaction
expenses, other expenditures which are capitalized in accordance with generally
accepted accounting principles and any extraordinary expense (including, without
limitation, litigation and indemnification expense), but including the fees
provided for in paragraph 4 of the Master Contract and under the Master
Investment Advisory Agreement ("includable expenses"), shall exceed the expense
- 2 -
<PAGE>
limitations applicable to the Fund imposed by state securities laws or
regulations thereunder, as these limitations may be raised or lowered from time
to time, the Fund may deduct from the fees to be paid to the Administrator, or
the Administrator will bear, to the extent required by state law, that portion
of such excess which bears the same relation to the total of such excess as the
fee to the Administrator bears to the total fee otherwise payable for the fiscal
year by the Fund pursuant to the Master Contract and the Master Advisory
Agreement between the Trust and the Adviser. The Administrator's obligation
pursuant hereto will be limited to the amount of the fees payable for the fiscal
year by the Fund pursuant to the Master Contract.
(b) With respect to portions of a fiscal year in which this
contract shall be in effect, the limitation specified in subparagraph (a) of
paragraph 7 above shall be prorated according to the proportion which that
portion of the fiscal year bears to the full fiscal year. At the end of each
month of the Trust's fiscal year, the Administrator will review the includable
expenses accrued during that fiscal year to the end of the period and shall
estimate the contemplated includable expenses for the balance of that fiscal
year. If, as a result of that review and estimation, it appears likely that the
includable expenses will exceed the limitations referred to in this paragraph 7
for a fiscal year, the monthly fees relating to the Fund, payable to the
Administrator under this contract for such month shall be reduced, subject to
later adjustments at the end of each month through the end of the fiscal year to
reflect actual expenses, by an amount equal to the proportionate share
attributable to the Administrator as described in subparagraph (a) of paragraph
7 above of a pro rata portion (prorated on the basis of the remaining months of
the fiscal year, including the month just ended) of the amount by which the
includable expenses for the fiscal year (less an amount equal to the aggregate
of actual reductions made pursuant to this provision with respect to prior
months of the fiscal year) are expected to exceed the limitations provided in
this paragraph 7. For purposes of the foregoing, the value of the net assets of
the Fund shall be computed in the manner specified in paragraph 4 of the Master
Contract, and any payments required to be made by the Administrator shall be
made once a year promptly after the end of the Trust's fiscal year.
- 3 -
<PAGE>
If the foregoing correctly sets forth the agreement between
the Trust and the Administrator, please so indicate by signing and returning to
the Trust the enclosed copy hereof.
Very truly yours,
CORE EQUITY FUND, a Series of
IBJ Funds Trust
By:--------------------------
Title:
Accepted:
FURMAN SELZ INCORPORATED
By:---------------------------
Title:
- 4 -
<PAGE>
GROWTH AND INCOME FUND
A SERIES OF IBJ FUNDS TRUST
237 PARK AVENUE
NEW YORK, NEW YORK 10017
November 18, 1994
Furman Selz Incorporated
237 Park Avenue
New York, New York 10017
ADMINISTRATIVE SERVICES CONTRACT SUPPLEMENT
Dear Sirs or Madams:
This will confirm the agreement between the undersigned (the
"Trust") and Furman Selz Incorporated (the "Administrator") as follows:
1. The Trust is an open-end management investment company,
organized as a Delaware business trust, and consists of such separate investment
portfolios as have been or may be established by the Trustees of the Trust from
time to time. A separate class of shares of beneficial interest of the Trust is
offered to investors with respect to each investment portfolio. Growth and
Income Fund (the "Fund") is a separate investment portfolio of the Trust.
2. The Trust and the Administrator have entered into a Master
Administrative Services Contract ("Master Contract") dated November 18, 1994
pursuant to which the Administrator has agreed to provide management and
administrative services to the Trust as set forth in that contract.
3. As provided for in paragraph 1 of the Master Contract, the
Trust hereby adopts the Master Contract with respect to the Fund and the
Administrator hereby acknowledges that the Master Contract shall pertain to the
Fund, the terms and
- 1 -
<PAGE>
conditions of such Master Contract being hereby incorporated herein by
reference.
4. The term "Fund" as used in the Master Contract shall, for
purposes of this Supplement, pertain to the Fund.
5. As provided in paragraph 4 of the Master Contract and
subject to further conditions as set forth therein, the Trust shall with respect
to the Fund pay the Administrator a monthly fee on the first business day of
each month based upon the average daily value of the net assets of the Fund
during the preceding month at the annual rate of 0.15%.
6. This Supplement and the Master Contract (together, the
"Contract") shall become effective on November 18, 1994, and shall continue in
effect with respect to the Fund until the last day of the calendar year next
following such date, and thereafter shall continue automatically for successive
annual periods ending on the last day of each calendar year, subject to the
immediately following sentence, and provided such continuance is specifically
approved at least annually by a vote of a majority of (i) the Trust's Board of
Trustees and (ii) the trustees who are not "interested persons" (as defined in
the 1940 Act) of the Trust and who have no direct or indirect financial interest
in the Contract, by vote cast in person at a meeting called for the purpose of
voting on such approval. This Contract may be terminated with respect to the
Fund at any time, without payment of any penalty, by vote of a majority of the
outstanding voting securities of the Fund (as defined in the 1940 Act) or by a
vote of a majority of the Trust's Board of Trustees on 60 days' written notice
to the Administrator or by the Administrator on 60 days' written notice to the
Trust. This Contract shall terminate automatically in the event of its
assignment (as defined in the 1940 Act).
7. (a) If the aggregate expenses of every character incurred
by, or allocated to, the Fund in any fiscal year, other than interest, taxes,
expenses under the Plans, brokerage commissions and other portfolio transaction
expenses, other expenditures which are capitalized in accordance with generally
accepted accounting principles and any extraordinary expense (including, without
limitation, litigation and indemnification expense), but including the fees
provided for in paragraph 4 of the Master Contract and under the Master
Investment Advisory Agreement ("includable expenses"), shall exceed the expense
- 2 -
<PAGE>
limitations applicable to the Fund imposed by state securities laws or
regulations thereunder, as these limitations may be raised or lowered from time
to time, the Fund may deduct from the fees to be paid to the Administrator, or
the Administrator will bear, to the extent required by state law, that portion
of such excess which bears the same relation to the total of such excess as the
fee to the Administrator bears to the total fee otherwise payable for the fiscal
year by the Fund pursuant to the Master Contract and the Master Advisory
Agreement between the Trust and the Adviser. The Administrator's obligation
pursuant hereto will be limited to the amount of the fees payable for the fiscal
year by the Fund pursuant to the Master Contract.
(b) With respect to portions of a fiscal year in which this
contract shall be in effect, the limitation specified in subparagraph (a) of
paragraph 7 above shall be prorated according to the proportion which that
portion of the fiscal year bears to the full fiscal year. At the end of each
month of the Trust's fiscal year, the Administrator will review the includable
expenses accrued during that fiscal year to the end of the period and shall
estimate the contemplated includable expenses for the balance of that fiscal
year. If, as a result of that review and estimation, it appears likely that the
includable expenses will exceed the limitations referred to in this paragraph 7
for a fiscal year, the monthly fees relating to the Fund, payable to the
Administrator under this contract for such month shall be reduced, subject to
later adjustments at the end of each month through the end of the fiscal year to
reflect actual expenses, by an amount equal to the proportionate share
attributable to the Administrator as described in subparagraph (a) of paragraph
7 above of a pro rata portion (prorated on the basis of the remaining months of
the fiscal year, including the month just ended) of the amount by which the
includable expenses for the fiscal year (less an amount equal to the aggregate
of actual reductions made pursuant to this provision with respect to prior
months of the fiscal year) are expected to exceed the limitations provided in
this paragraph 7. For purposes of the foregoing, the value of the net assets of
the Fund shall be computed in the manner specified in paragraph 4 of the Master
Contract, and any payments required to be made by the Administrator shall be
made once a year promptly after the end of the Trust's fiscal year.
- 3 -
<PAGE>
If the foregoing correctly sets forth the agreement between the
Trust and the Administrator, please so indicate by signing and returning to the
Trust the enclosed copy hereof.
Very truly yours,
GROWTH AND INCOME FUND, a
Series of IBJ Funds Trust
By:-------------------------
Title:
Accepted:
FURMAN SELZ INCORPORATED
By:-------------------------
Title:
- 4 -
Exhibit 6
Form of Master Distribution Contract and
Supplements between Registrant and IBJ
Funds Distributor, Incorporated
<PAGE>
MASTER DISTRIBUTION CONTRACT
IBJ FUNDS TRUST
237 PARK AVENUE
NEW YORK, NEW YORK 10017
November 18, 1994
Furman Selz Incorporated
237 Park Avenue
New York, New York 10017
Dear Sirs or Madams:
This will confirm the agreement between the undersigned (the
"Trust") and you (the "Distributor") as follows:
1. The Trust is an open-end investment company organized as a
Delaware business trust, and consists of one or more separate investment
portfolios as may be established and designated by the Trustees from time to
time (the "Funds"). This contract shall pertain to any Fund as shall be
designated in a Supplement to this Contract ("Supplement"), as further agreed
between the Trust and the Distributor. A separate series of shares of beneficial
interest in the Trust is offered to investors with respect to each Fund. The
Trust engages in the business of investing and reinvesting the assets of the
Funds in the manner and in accordance with the investment objectives and
restrictions specified in the Prospectus or Prospectuses (the "Prospectus")
relating to the Trust and the Funds included in the Trust's Registration
Statement, as amended from time to time (the "Registration Statement"), filed by
the Trust under the Investment Company Act of 1940 (the "1940 Act") and the
Securities Act of 1933 (the "1933 Act"). Copies of the documents referred to in
the preceding sentence have been furnished to the Distributor. Any amendments to
those documents shall be furnished to the Distributor promptly. The Trust has
also adopted a Distribution Plan and Agreement (and Supplements
- 1 -
<PAGE>
thereto) (the "Plan") pursuant to Rule 12b-1 under the 1940 Act, to which this
contract is related.
2. As the Trust's agent, the Distributor shall be the
exclusive distributor for the unsold portion of shares of beneficial interest in
the Funds (the "shares") which may from time to time be registered under the
1933 Act.
3. The Trust shall sell through the Distributor, as the
Trust's agent, shares to the eligible investors as described in the Prospectus.
All orders through the Distributor shall be subject to acceptance and
confirmation by the Trust. The Trust shall have the right, at its election, to
deliver either shares issued upon original issue or treasury shares.
4. As the Trust's agent, the Distributor may sell and
distribute shares in such manner not inconsistent with the provisions hereof and
the Prospectus as the Distributor may determine from time to time. In this
connection, the Distributor shall comply with all laws, rules and regulations
applicable to it, including without limiting the generality of the foregoing,
all applicable rules or regulations under the 1940 Act and of any securities
association registered under the Securities Exchange Act of 1934 (the "1934
Act").
5. The Trust reserves the right to sell shares to purchasers
to the extent that it or the transfer agent for its shares receives purchase
requests therefor.
6. All shares offered for sale and sold by the Distributor
shall be offered for sale and sold by the Distributor to designated investors at
the price per share (the "offering price") specified and determined as provided
in the Prospectus. The Trust shall determine and promptly furnish to the
Distributor a statement of the offering price at least once on each day on which
the New York Stock Exchange is open for trading and on each additional day on
which a Fund's net asset value might be materially affected by changes in the
value of its portfolio securities. Each offering price shall become effective at
the time and shall remain in effect during the period specified in the
statement. Each such statement shall show the basis of its computation.
- 2 -
<PAGE>
7. The Trust shall furnish the Distributor from time to time,
for use in connection with the sale of shares, such written information with
respect to the Trust as the Distributor may reasonably request. In each case,
such written information shall be signed by an authorized officer of the Trust.
The Trust represents and warrants that such information, when signed by one of
its officers, shall be true and correct. The Trust also shall furnish to the
Distributor copies of its reports to its shareholders and such additional
information regarding the Trust's financial condition as the Distributor may
reasonably request from time to time.
8. The Registration Statement and the Prospectus have been or
will be, as the case may be, prepared in conformity with the 1933 Act, the 1940
Act and the rules and regulations of the Securities and Exchange Commission (the
"SEC"). The Trust represents and warrants to the Distributor that the
Registration Statement and the Prospectus contain or will contain all statements
required to be stated therein in accordance with the 1933 Act, the 1940 Act and
the rules and regulations thereunder, that all statements of fact contained or
to be contained therein are or will be true and correct at the time indicated or
the effective date, as the case may be, and that neither the Registration
Statement nor the Prospectus, when it shall become effective under the 1933 Act
or be authorized for use, shall include an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading to a purchaser of shares. The Trust
shall from time to time file such amendment or amendments to the Registration
Statement and the Prospectus as, in the light of future developments, shall, in
the opinion of the Trust's counsel, be necessary in order to have the
Registration Statement and the Prospectus at all times contain all material
facts required to be stated therein or necessary to make the statements therein
not misleading to a purchaser of shares. If the Trust shall not file such
amendment or amendments within 15 days after receipt by the Trust of a written
request from the Distributor to do so, the Distributor may, at its option,
terminate this contract immediately. The Trust shall not file any amendment to
the Registration Statement of the Prospectus without giving the Distributor
reasonable notice thereof in advance, provided that nothing in this contract
shall in any way limit the Trust's right to file at any time such amendments to
- 3 -
<PAGE>
the Registration Statement or the Prospectus as the Trust may deem advisable.
The Trust represents and warrants to the Distributor that any amendment to the
Registration Statement or the Prospectus filed hereafter by the Trust will, when
it becomes effective under the 1933 Act, contain all statements required to be
stated therein in accordance with the 1933 Act, the 1940 Act and the rules and
regulations thereunder, that all statements of fact contained therein will, when
the same shall become effective, be true and correct, and that no such
amendment, when it becomes effective, will include an untrue statement of a
material fact or will omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading to a
purchaser of shares.
9. The Trust shall prepare and furnish to the Distributor from
time to time such number of copies of the most recent form of the Prospectus
filed with the SEC as the Distributor may reasonably request. The Trust
authorizes the Distributor to use the Prospectus, in the form furnished to the
Distributor from time to time, in connection with the sale of shares. The Trust
shall indemnify, defend and hold harmless the Distributor, its officers and
directors and any person who controls the Distributor within the meaning of the
1933 Act, from and against any and all claims, demands, liabilities and expenses
(including the cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection therewith) which the
Distributor, its officers and directors or any such controlling person may incur
under the 1933 Act, the 1940 Act, the common law or otherwise, arising out of or
based upon any alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus or arising out of or based upon any
alleged omission to state a material fact required to be stated in either or
necessary to make the statements in either not misleading. This contract shall
not be construed to protect the Distributor against any liability to the Trust
or its shareholders to which the Distributor would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence in the performance
of its duties or by reason of its reckless disregard of its obligations and
duties under this contract. This indemnity agreement is expressly conditioned
upon the Trust being notified of any action brought against the Distributor, its
officers or directors or any such controlling person, which notification
- 4 -
<PAGE>
shall be given by letter or by telegram addressed to the Trust at its principal
office in New York, New York, and sent to the Trust by the person against whom
such action is brought within 10 days after the summons or other first legal
process shall have been served. The failure to notify the Trust of any such
action shall not relieve the Trust from any liability which it may have to the
person against whom such action is brought by reason of any such alleged untrue
statement or omission otherwise than on account of the indemnity agreement
contained in this paragraph. The Trust shall be entitled to assume the defense
of any suit brought to enforce any such claims, demand or liability, but, in
such case, the defense shall be conducted by counsel chosen by the Trust and
approved by the Distributor. If the Trust elects to assume the defense of any
such suit and retain counsel approved by the Distributor, the defendant or
defendants in such suit shall bear the fees and expenses of any additional
counsel retained by any of them, but in case the Trust does not elect to assume
the defense of any such suit, or in the case the Distributor does not approve of
counsel chosen by the Trust, the Trust will reimburse the Distributor, its
officers and directors or the controlling person or persons named as defendant
or defendants in such suit, for the fees and expenses of any counsel retained by
the Distributor or them. In addition, the Distributor shall have the right to
employ counsel to represent it, its officers and directors and any such
controlling person who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by the Distributor against the Trust
hereunder if in the reasonable judgment of the Distributor it is advisable for
the Distributor, its officers and directors or such controlling person to be
represented by separate counsel, in which event the fees and expenses of such
separate counsel shall be borne by the Trust. This indemnity agreement and the
Trust's representations and warranties in this contract shall remain operative
and in full force and effect regardless of any investigation made by or on
behalf of the Distributor, its officers and directors or any such controlling
person. This indemnity agreement shall inure exclusively to the benefit of the
Distributor and its successors, the Distributor's officers and trustees and
their respective estates and any such controlling persons and their successors
and estates. The Trust shall promptly notify the Distributor of the commencement
of any litigation or proceedings against it in connection with the issue and
sale of any shares.
- 5 -
<PAGE>
10. The Distributor agrees to indemnify, defend and hold
harmless the Trust, its officers and trustees and any person who controls the
Trust within the meaning of the 1933 Act, from and against any and all claims,
demands, liabilities and expenses (including the cost of investigating or
defending such claims, demands or liabilities and any counsel fees incurred in
connection therewith) which the Trust, its officers or trustees or any such
controlling person, may incur under the 1933 Act, the 1940 Act, the common law
or otherwise, but only to the extent that such liability or expense incurred by
the Trust, its officers or trustees or such controlling person resulting from
such claims or demands shall arise out of or be based upon (a) any alleged
untrue statement of a material fact contained in information furnished in
writing by the Distributor to the Trust specifically for use in the Registration
Statement or the Prospectus or shall arise out of or be based upon any alleged
omission to state a material fact in connection with such information required
to be stated in the Registration Statement or the Prospectus or necessary to
make such information not misleading and (b) any alleged act or omission on the
Distributor's part as the Trust's agent that has not been expressly authorized
by the Trust in writing. This indemnity agreement is expressly conditioned upon
the Distributor being notified of any action brought against the Trust, its
officers or trustees or any such controlling person, which notification shall be
given by letter or telegram addressed to the Distributor at its principal office
in New York, New York, and sent to the Distributor by the person against whom
such action is brought, within 10 days after the summons or other first legal
process shall have been served. The failure to notify the Distributor of any
such action shall not relieve the Distributor from any liability which it may
have to the Trust, its officers or trustees or such controlling person by reason
of any such alleged misstatement or omission on the Distributor's part otherwise
than on account of the indemnity agreement contained in this paragraph. The
Distributor shall have a right to control the defense of such action with
counsel of its own choosing and approved by the Trust, its officers and trustees
or such controlling person shall each have the right to participate in the
defense or preparation of the defense of any such action at their own expense.
- 6 -
<PAGE>
11. No shares shall be sold through the Distributor or by the
Trust under this contract and no orders for the purchase of shares shall be
confirmed or accepted by the Trust if and so long as the effectiveness of the
Registration Statement shall be suspended under any of the provisions of the
1933 Act. Nothing contained in this paragraph 11 shall in any way restrict,
limit or have any application to or bearing upon the Trust's obligation to
redeem shares from any shareholder in accordance with the provisions of its
Declaration of Trust. The Trust will use its best efforts at all times to have
shares effectively registered under the 1933 Act.
12. The Trust agrees to advise the Distributor immediately:
(a) of any request by the SEC for amendments to the
Registration Statement or the Prospectus or for additional
information;
(b) in the event of the issuance by the SEC of any stop
order suspending the effectiveness of the Registration Statement or
the Prospectus under the 1933 Act or the initiation of any proceedings
for that purpose;
(c) of the happening of any material event which makes
untrue any statement made in the Registration Statement or the
Prospectus or which requires the making of a change in either thereof
in order to make the statements therein not misleading; and
(d) of all action of the SEC with respect to any
amendments to the Registration Statement or the Prospectus which may
from time to time be filed with the SEC under the 1933 Act or the 1940
Act.
13. Insofar as they concern the Trust, the Trust shall comply
with all applicable laws, rules and regulations, including, without limiting the
generality of the foregoing, all rules or regulations made or adopted pursuant
to the 1933 Act, the 1940 Act or by any securities association registered under
the 1934 Act.
- 7 -
<PAGE>
14. The Distributor may, if it desires and at its own cost and
expense, appoint or employ agents to assist it in carrying out its obligations
under this contract, but no such appointment or employment shall relieve the
Distributor of any of its responsibilities or obligations to the Trust under
this contract.
15. (a) The Distributor shall from time to time employ or
associate with it such persons as it believes necessary to assist it in carrying
out its obligations under this contract. The compensation of such persons shall
be paid by the Distributor.
(b) The Distributor shall pay all expenses incurred in
connection with its qualification as a dealer or broker under Federal
or State law.
(c) The Trust shall pay all expenses incurred in
connection with (i) the preparation, printing and distribution to
shareholders of the Prospectus and reports and other communications to
shareholders, (ii) future registrations of shares under the 1933 Act
and the 1940 Act, (iii) amendments of the Registration Statement
subsequent to the initial public offering of shares, (iv)
qualification of shares for sale in jurisdictions designated by the
Distributor, (v) qualification of the Trust as a dealer or broker
under the laws of jurisdictions designated by the Distributor, (vi)
qualification of the Trust as a foreign corporation authorized to do
business in any jurisdiction if the Distributor determines that such
qualification is necessary or desirable for the purpose of
facilitating sales of shares, (vii) maintaining facilities for the
issue and transfer of shares and (viii) supplying information, prices
and other data to be furnished by the Trust under this contract.
(d) The Trust shall pay any original issue taxes or
transfer taxes applicable to the sale or delivery of shares or
certificates therefor.
(e) The Trust shall execute all documents and furnish any
information which may be reasonably necessary in connection with the
qualification of shares of the Trust for sale in jurisdictions
designated by the Distributor.
- 8 -
<PAGE>
16. Except to the extent of that which is set forth in
paragraph 15 and under the Plan and of that portion of any applicable sales
charge which may be retained by the Distributor on the sale of certain Fund
shares (as set forth in the Prospectus), the Distributor will render all
services hereunder without compensation or reimbursement.
17. This contract, and any Supplement, shall become effective
with respect to a Fund on the date specified in the Supplement, and shall
continue in effect with respect to a Fund until such time as there shall remain
no unsold balance of shares registered under the 1933 Act, PROVIDED that this
contract shall continue in effect with respect to a Fund for a period of more
than two years from such date specified in the Supplement only so long as such
continuance is specifically approved at least annually by (a) the Trust's Board
of Trustees or by the vote of a majority of the Fund's outstanding voting
securities (as defined in the 1940 Act), and (b) by the vote, cast in person at
a meeting called for the purpose, of a majority of the Trust's trustees who are
not parties to this contract or "interested persons" (as defined in the 1940
Act) of any such party. This contract, and any Supplement, shall terminate
automatically in the event of its assignment (as defined in the 1940 Act). This
contract, and any Supplement, may, in any event, be terminated at any time,
without the payment of any penalty, by the Trust upon 60 days' written notice to
the Distributor and by the Distributor upon 60 days' written notice to the
Trust. If this contract is terminated with respect to any Fund, it shall
nonetheless remain in effect with respect to any remaining Funds.
18. Except to the extent necessary to perform the
Distributor's obligations under this contract, nothing herein shall be deemed to
limit or restrict the right of the Distributor or any affiliate of the
Distributor or any employee of the Distributor, to engage in any other business
or to devote time and attention to the management of any other business, whether
of a similar or dissimilar nature, or to render services of any kind to any
other corporation, firm, individual or association.
19. The Certificate of Trust, establishing the Trust, dated as
of August 25, 1994, together with all amendments thereto (the "Certificate"), is
on file in the Office of the Secretary of the State of Delaware. The obligations
of the Trust are not
- 9 -
<PAGE>
personally binding upon, nor shall resort be had to the private property of, any
of the Trustees, shareholders, officers, employees or agents of the Trust, but
only the Trust's property shall be bound.
20. This contract shall be construed and its provisions
interpreted, in accordance with the laws of the State of New York.
- 10 -
<PAGE>
If the foregoing correctly sets forth the agreement between the
Trust and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof.
Very truly yours,
IBJ FUNDS TRUST
By---------------------
Title:
ACCEPTED
FURMAN SELZ INCORPORATED
By-------------------------
Title
- 11 -
<PAGE>
RESERVE MONEY MARKET FUND
A SERIES OF IBJ FUNDS TRUST
237 PARK AVENUE
NEW YORK, NEW YORK 10017
November 18, 1994
Furman Selz Incorporated
237 Park Avenue
New York, New York 10017
DISTRIBUTION CONTRACT SUPPLEMENT
Dear Sirs or Madams:
This will confirm the agreement between the undersigned (the
"Trust") and you (the "Distributor") as follows:
1. The Trust is an open-end management investment company
organized as a Delaware business trust and consists of such separate investment
portfolios as have been or may be established by the Trustees of the Trust from
time to time. A separate class of shares of beneficial interest of the Trust is
offered to investors with respect to each investment portfolio. Reserve Money
Market Fund (the "Fund") is a separate investment portfolio of the Trust.
2. The Trust and the Distributor have entered into a Master
Distribution Contract ("Master Contract") pursuant to which the Distributor has
agreed to be the distributor of shares of the Trust.
3. As provided in paragraph 1 of the Master Contract, the
Trust hereby adopts the Master Contract with respect to the Fund, and the
Distributor hereby acknowledges that the Master Contract shall pertain to the
Fund, the terms and conditions of
- 1 -
<PAGE>
such Master Contract being hereby incorporated herein by reference.
4. The term "Fund" as used in the Master Contract shall, for
purposes of this Supplement, pertain to the Fund.
5. This Supplement and the Master Distribution Contract
(together, the "Contract") shall become effective on November 18, 1994 and shall
continue in effect with respect to the Fund until such time as there shall
remain no unsold balance of shares registered under the 1933 Act, PROVIDED that
this Contract shall continue in effect for a period of more than two years from
the effective date of this Supplement only so long as such continuance is
specifically approved at least annually by (a) the Trust's Board of Trustees or
by the vote of a majority of the Fund's outstanding voting securities (as
defined in the 1940 Act), and (b) by the vote, cast in person at a meeting
called for the purpose, of a majority of the Trust's trustees who are not
parties to this Contract or "interested persons" (as defined in the 1940 Act) of
any such party. This Contract and any Supplement shall terminate automatically
in the event of its assignment (as defined in the 1940 Act). This Contract may,
in any event, be terminated at any time, without the payment of any penalty, by
the Trust upon 60 days' written notice to the Distributor and by the Distributor
upon 60 days' written notice to the Trust.
If the foregoing correctly sets forth the agreement between the
Trust and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof.
Very truly yours,
RESERVE MONEY MARKET
FUND, a Series of IBJ
Funds Trust
By------------------------
Title:
- 2 -
<PAGE>
ACCEPTED:
FURMAN SELZ INCORPORATED
By-----------------------
Title:
- 3 -
<PAGE>
CORE EQUITY FUND
A SERIES OF IBJ FUNDS TRUST
237 PARK AVENUE
NEW YORK, NEW YORK 10017
November 18, 1994
Furman Selz Incorporated
237 Park Avenue
New York, New York 10017
DISTRIBUTION CONTRACT SUPPLEMENT
Dear Sirs or Madams:
This will confirm the agreement between the undersigned (the
"Trust") and you (the "Distributor") as follows:
1. The Trust is an open-end management investment company
organized as a Delaware business trust and consists of such separate investment
portfolios as have been or may be established by the Trustees of the Trust from
time to time. A separate class of shares of beneficial interest of the Trust is
offered to investors with respect to each investment portfolio. Core Equity Fund
(the "Fund") is a separate investment portfolio of the Trust.
2. The Trust and the Distributor have entered into a Master
Distribution Contract ("Master Contract") pursuant to which the Distributor has
agreed to be the distributor of shares of the Trust.
3. As provided in paragraph 1 of the Master Contract, the
Trust hereby adopts the Master Contract with respect to the Fund, and the
Distributor hereby acknowledges that the Master Contract shall pertain to the
Fund, the terms and conditions of
- 1 -
<PAGE>
such Master Contract being hereby incorporated herein by reference.
4. The term "Fund" as used in the Master Contract shall, for
purposes of this Supplement, pertain to the Fund.
5. This Supplement and the Master Distribution Contract
(together, the "Contract") shall become effective on November 18, 1994 and shall
continue in effect with respect to the Fund until such time as there shall
remain no unsold balance of shares registered under the 1933 Act, PROVIDED that
this Contract shall continue in effect for a period of more than two years from
the effective date of this Supplement only so long as such continuance is
specifically approved at least annually by (a) the Trust's Board of Trustees or
by the vote of a majority of the Fund's outstanding voting securities (as
defined in the 1940 Act), and (b) by the vote, cast in person at a meeting
called for the purpose, of a majority of the Trust's trustees who are not
parties to this Contract or "interested persons" (as defined in the 1940 Act) of
any such party. This Contract and any Supplement shall terminate automatically
in the event of its assignment (as defined in the 1940 Act). This Contract may,
in any event, be terminated at any time, without the payment of any penalty, by
the Trust upon 60 days' written notice to the Distributor and by the Distributor
upon 60 days' written notice to the Trust.
If the foregoing correctly sets forth the agreement between the
Trust and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof.
Very truly yours,
CORE EQUITY FUND, a
Series of IBJ Funds Trust
By---------------------------
Title:
- 2 -
<PAGE>
ACCEPTED:
FURMAN SELZ INCORPORATED
By-------------------------
Title:
- 3 -
<PAGE>
BOND FUND
A SERIES OF IBJ FUNDS TRUST
237 PARK AVENUE
NEW YORK, NEW YORK 10017
November 18, 1994
Furman Selz Incorporated
237 Park Avenue
New York, New York 10017
DISTRIBUTION CONTRACT SUPPLEMENT
Dear Sirs or Madams:
This will confirm the agreement between the undersigned (the
"Trust") and you (the "Distributor") as follows:
1. The Trust is an open-end management investment company
organized as a Delaware business trust and consists of such separate investment
portfolios as have been or may be established by the Trustees of the Trust from
time to time. A separate class of shares of beneficial interest of the Trust is
offered to investors with respect to each investment portfolio. Bond Fund (the
"Fund") is a separate investment portfolio of the Trust.
2. The Trust and the Distributor have entered into a Master
Distribution Contract ("Master Contract") pursuant to which the Distributor has
agreed to be the distributor of shares of the Trust.
3. As provided in paragraph 1 of the Master Contract, the
Trust hereby adopts the Master Contract with respect to the Fund, and the
Distributor hereby acknowledges that the Master Contract shall pertain to the
Fund, the terms and conditions of
- 1 -
<PAGE>
such Master Contract being hereby incorporated herein by reference.
4. The term "Fund" as used in the Master Contract shall, for
purposes of this Supplement, pertain to the Fund.
5. This Supplement and the Master Distribution Contract
(together, the "Contract") shall become effective on November 18, 1994 and shall
continue in effect with respect to the Fund until such time as there shall
remain no unsold balance of shares registered under the 1933 Act, PROVIDED that
this Contract shall continue in effect for a period of more than two years from
the effective date of this Supplement only so long as such continuance is
specifically approved at least annually by (a) the Trust's Board of Trustees or
by the vote of a majority of the Fund's outstanding voting securities (as
defined in the 1940 Act), and (b) by the vote, cast in person at a meeting
called for the purpose, of a majority of the Trust's trustees who are not
parties to this Contract or "interested persons" (as defined in the 1940 Act) of
any such party. This Contract and any Supplement shall terminate automatically
in the event of its assignment (as defined in the 1940 Act). This Contract may,
in any event, be terminated at any time, without the payment of any penalty, by
the Trust upon 60 days' written notice to the Distributor and by the Distributor
upon 60 days' written notice to the Trust.
If the foregoing correctly sets forth the agreement between
the Trust and the Distributor, please so indicate by signing and returning to
the Trust the enclosed copy hereof.
Very truly yours,
BOND FUND, a Series of
IBJ Funds Trust
By-------------------------
Title:
- 2 -
<PAGE>
ACCEPTED:
FURMAN SELZ INCORPORATED
By----------------------------
Title:
- 3 -
<PAGE>
GROWTH AND INCOME FUND
A SERIES OF IBJ FUNDS TRUST
237 PARK AVENUE
NEW YORK, NEW YORK 10017
November 18, 1994
Furman Selz Incorporated
237 Park Avenue
New York, New York 10017
DISTRIBUTION CONTRACT SUPPLEMENT
Dear Sirs or Madams:
This will confirm the agreement between the undersigned (the
"Trust") and you (the "Distributor") as follows:
1. The Trust is an open-end management investment company
organized as a Delaware business trust and consists of such separate investment
portfolios as have been or may be established by the Trustees of the Trust from
time to time. A separate class of shares of beneficial interest of the Trust is
offered to investors with respect to each investment portfolio. Growth and
Income Fund (the "Fund") is a separate investment portfolio of the Trust.
2. The Trust and the Distributor have entered into a Master
Distribution Contract ("Master Contract") pursuant to which the Distributor has
agreed to be the distributor of shares of the Trust.
3. As provided in paragraph 1 of the Master Contract, the
Trust hereby adopts the Master Contract with respect to the Fund, and the
Distributor hereby acknowledges that the Master Contract shall pertain to the
Fund, the terms and conditions of
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<PAGE>
such Master Contract being hereby incorporated herein by reference.
4. The term "Fund" as used in the Master Contract shall, for
purposes of this Supplement, pertain to the Fund.
5. This Supplement and the Master Distribution Contract
(together, the "Contract") shall become effective on November 18, 1994 and shall
continue in effect with respect to the Fund until such time as there shall
remain no unsold balance of shares registered under the 1933 Act, PROVIDED that
this Contract shall continue in effect for a period of more than two years from
the effective date of this Supplement only so long as such continuance is
specifically approved at least annually by (a) the Trust's Board of Trustees or
by the vote of a majority of the Fund's outstanding voting securities (as
defined in the 1940 Act), and (b) by the vote, cast in person at a meeting
called for the purpose, of a majority of the Trust's trustees who are not
parties to this Contract or "interested persons" (as defined in the 1940 Act) of
any such party. This Contract and any Supplement shall terminate automatically
in the event of its assignment (as defined in the 1940 Act). This Contract may,
in any event, be terminated at any time, without the payment of any penalty, by
the Trust upon 60 days' written notice to the Distributor and by the Distributor
upon 60 days' written notice to the Trust.
If the foregoing correctly sets forth the agreement between the
Trust and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof.
Very truly yours,
GROWTH AND INCOME FUND, a
Series of IBJ Funds Trust
By----------------------------
Title:
- 2 -
<PAGE>
ACCEPTED:
FURMAN SELZ INCORPORATED
By------------------------
Title:
- 3 -
Exhibit 8
Form of Custodian Contract between Registrant
and IBJ Schroder Bank & Trust Company
<PAGE>
CUSTODIAN AGREEMENT
between
IBJ FUNDS TRUST
and
IBJ SCHRODER BANK & TRUST COMPANY
DATED NOVEMBER 18, 1994
<PAGE>
TABLE OF CONTENTS
PAGE NO.
I. DEFINITION AND EMPLOYMENT OF IBJS AS CUSTODIAN AND
PROPERTY TO BE HELD BY IT..........................................1
II. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY
OF THE TRUST HELD BY THE CUSTODIAN.................................2
A. Holding Securities............................................2
B. Delivery of Securities........................................3
C. Registration of Securities....................................6
D. Bank Accounts.................................................6
E. Payments for Portfolio Shares.................................7
F. Availability of Federal Funds.................................7
G. Collection of Income..........................................8
H. Payment of Portfolio Moneys...................................8
I. Liability for Payment in Advance of Receipt
of Securities Purchased..................................10
J. Payments for Repurchases or Redemptions of
Portfolio Shares of the Trust............................10
K. Appointment of Agents........................................11
L. Deposit of Portfolio Assets in a Securities
Systems..................................................12
M. Ownership Certificates for Tax Purchases.....................14
N. Proxies......................................................14
O. Communications Relating to Portfolio
Securities...............................................14
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P. Proper Instructions..........................................16
Q. Actions Permitted Without Express Authority..................17
R. Evidence of Authority........................................18
S. No Liability Until Receipt...................................19
T. Segregated Accounts..........................................19
III. DUTIES OF CUSTODIAN WITH RESPECT TO BOOKS OF
ACCOUNT AND CALCULATION OF NET ASSET VALUE
AND NET INCOME....................................................20
IV. RECORDS...........................................................20
V. OPINIONS OF TRUST'S INDEPENDENT PUBLIC
ACCOUNTANTS.......................................................20
VI. REPORTS TO EACH PORTFOLIO AND INDEPENDENT
PUBLIC ACCOUNTANTS................................................21
VII. COMPENSATION OF CUSTODIAN.........................................21
VIII. RESPONSIBILITY OF CUSTODIAN.......................................21
IX. FUNDS TRANSFERS...................................................23
X. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT.......................25
XI. SUCCESSOR CUSTODIAN...............................................27
XII. INTERPRETIVE AND ADDITIONAL PROVISIONS............................28
XIII. TRUSTEES..........................................................28
XIV. APPLICABLE LAW....................................................28
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<PAGE>
CUSTODIAN AGREEMENT
This Custodian Agreement between IBJ Funds Trust, hereinafter
called the "Trust," a Delaware business trust, organized on August 25, 1994,
pursuant to the Trust Instrument, as the same may be amended from time to time,
and IBJ Schroder Bank & Trust Copany, hereinafter called "IBJS" or the
"Custodian."
WITNESSETH:
That in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
I. DEFINITIONS AND EMPLOYMENT OF BANK IV AS CUSTODIAN AND PROPERTY TO BE HELD
BY IT. The Trust is an open-end investment company organized under the General
Laws of the State of Delaware. The Trust's shares of beneficial interest may be
classified into series in which each series represents the entire undivided
interests of a separate portfolio of assets. For all purposes of this Agreement,
a "Portfolio" shall mean a separate portfolio of assets of the Trust and a
"Series" shall mean the series of shares of beneficial interest representing
undivided interests in a Portfolio. The current portfolios are Reserve Money
Market Fund, Bond Fund, Core Equity Fund, and Balanced Fund. For the purposes of
this Agreement, the term "Portfolio Shares" shall be deemed to refer to the
shares of beneficial interest which are offered for each Portfolio, and the term
"Adviser" shall be deemed to refer to the investment adviser of
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<PAGE>
the Trust. The Trust hereby employs IBJS as the custodian of the assets of each
Portfolio. In the event the Trust establishes one or more portfolios other than
the Portfolios with respect to which the Trust decides to retain the Custodian
to act as custodian hereunder, the Trust shall so notify the Custodian in
writing. If the Custodian is willing to render such services, the Custodian
shall promptly notify the Trust in writing whereupon such portfolio shall be
deemed to be a Portfolio hereunder. The Trust agrees to deliver to IBJS all
securities other than securities issued by the Trust (the "Portfolio
Securities") and cash owned by the Trust for the account of each Portfolio, and
all payments of income, payments of principal or capital distributions received
by the Trust with respect to all securities owned by the Trust for the account
of each Portfolio from time to time, and the cash consideration received by the
Trust for Portfolio Shares which may be issued or sold from time to time. IBJS
shall not be responsible for any property of the Trust held or received by the
Trust and not delivered to IBJS.
The Custodian may from time to time employ one or more
sub-custodians. The terms of each sub-custodian agreement shall be approved by a
vote of the Trustees of the Trust. Each sub-custodian agreement shall specify
the same standard of care as is set forth in this Agreement.
II. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE TRUST HELD BY THE
CUSTODIAN.
A. HOLDING SECURITIES. The Custodian shall hold, earmark and
physically segregate for the account of each
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<PAGE>
Portfolio all non-cash property delivered to it, including all securities owned
by each Portfolio, other than securities which are maintained pursuant to
Section L of this Article II in a clearing agency which acts as a securities
depository or in a book-entry system authorized by the U.S. Department of the
Treasury, collectively referred to herein as a "Securities System".
B. DELIVERY OF SECURITIES. The Custodian shall release and deliver
securities owned by each Portfolio held by the Custodian or in a Securities
System account of the Custodian only upon receipt of Proper Instructions (as
defined below in Section P of this Article II), which may be continuing
instructions when deemed appropriate by the Trust and the Custodian, and only in
the following cases:
(1) Except in the case of a sale effected through a Securities
System, upon sale of such securities for the account of each
Portfolio and receipt of payment therefor;
(2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by a
Portfolio;
(3) In the case of a sale effected through a Securities System, in
accordance with the provisions of Section L hereof;
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<PAGE>
(4) To the transfer or forwarding agent in connection with tender or
other similar offers for Portfolio Securities of each Portfolio;
(5) To the issuer thereof or its agent when such Portfolio
Securities are called, redeemed, retired or otherwise become
payable; provided that, in any such case, the cash or other
consideration is to be delivered to the Custodian;
(6) To the issuer thereof, or its agent, for transfer into the name
of a Portfolio or into the name of any nominee or nominees of
the Custodian or into the name or nominee name of any agent
appointed pursuant to Section K of this Article II or into the
name or nominee name of any sub-custodian appointed pursuant to
Article I; or for exchange for a different number of bonds,
certificates or other evidence representing the same aggregate
face amount or number of units; provided that, in any such case,
the new securities are to be delivered to the Custodian;
(7) Upon the sale of such securities for the account of a Portfolio,
to the broker or its clearing agent against a receipt for
examination in accordance with "street delivery" custom;
(8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization,
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<PAGE>
reorganization or readjustment of the securities of the issuer,
or pursuant to provisions for conversion contained in such
securities, or pursuant to any deposit agreement; provided that,
in any such case, the new securities and cash, if any, are to be
delivered to the Custodian;
(9) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights or
similar securities or the surrender of interim receipts or
temporary securities for definitive securities; provided that,
in any such case, the new securities and cash, if any, are to be
delivered to the Custodian;
(10) For delivery in connection with any loans of securities made by
a Portfolio, BUT ONLY against Proper Instructions from the
Adviser, against receipt of the designated collateral, which may
be in the form of cash or obligations issued by the United
States Government, its agencies or instrumentalities;
(11) For delivery as security in connection with any borrowings by a
Portfolio requiring a pledge of assets by such Portfolio, but
only against receipt of amounts borrowed;
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<PAGE>
(12) Upon receipt of instructions from the transfer agent for the
Trust, for delivery to such transfer agent or to holders of
Portfolio Shares in connection with distributions in kind in
satisfaction of requests by holders of Portfolio Shares for
repurchase or redemption;
(13) For delivery in accordance with the provisions of any agreement
among the Portfolio, the Custodian and a broker-dealer
registered under the Securities Exchange Act of 1934 (the
"Exchange Act") and a member of The National Association of
Securities, Inc. (the "NASD"), relating to compliance with the
rules of The Options Clearing Corporation and of any registered
national securities exchange, or of any similar organization or
organizations, regarding escrow or other arrangements in
connection with transactions by the Portfolio;
(14) For delivery in accordance with the provisions of any agreement
among the Portfolio, the Custodian, and a Futures Commission
Merchant registered under the Commodity Exchange Act, relating
to compliance with the rules of the Commodity Futures Trading
Commission and/or any contract market or any similar
organization or organizations, regarding account deposits in
connection with transactions by the Portfolio; and
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<PAGE>
(15) For any other proper corporate purposes, but only upon receipt
of, in addition to Proper Instructions, a notification signed by
two officers of the Trust and certified by the Secretary or an
Assistant Secretary of the Trust, specifying the securities to
be delivered, setting forth the purposes for which such delivery
is to be made, declaring such purposes to be proper corporate
purposes, and naming the person or persons to whom delivery of
such securities shall be made.
C. REGISTRATION OF SECURITIES. Securities held by the Custodian
(other than bearer securities) shall be registered in the name of a Portfolio or
in the name of any nominee of the Custodian, or in the name or nominee name of
any agent appointed pursuant to Section K of Article II hereof or in the name or
nominee name of any sub-custodian appointed pursuant to Article I. All
securities accepted by the Custodian on behalf of a Portfolio under the terms of
this Contract shall be in "street" or other good delivery form.
D. BANK ACCOUNTS. The Custodian shall open and maintain a separate
bank account or accounts in the name of each Portfolio, subject only to draft or
order by the Custodian acting pursuant to the terms of this Contract, and shall
hold in such account or accounts, subject to the provisions hereof, all cash
received by it from or for the account of each Portfolio, other than cash
maintained by each Portfolio in a bank account established and used in
accordance with Rule 17f-3 under the
- 7 -
<PAGE>
Investment Company Act of 1940. Funds held by the Custodian for each Portfolio
may be deposited by it to its credit as Custodian in the commercial banking side
of the Custodian or in such other banks or trust companies as it may in its
discretion deem necessary or desirable; PROVIDED, HOWEVER, that every such bank
or trust company shall be qualified to act as a custodian under the Investment
Company Act of 1940 and that each such bank or trust company and the funds to be
deposited with each such bank or trust company shall be approved by vote of a
majority of the Trustees of the Trust. Such funds shall be deposited by the
Custodian in its capacity as Custodian and shall be withdrawable by the
Custodian only in that capacity.
E. PAYMENT FOR PORTFOLIO SHARES. The Custodian shall receive from
the distributor of each Portfolio's Portfolio Shares or from the transfer agent
of the Trust and deposit into each Portfolio's account such payments as are
received for Portfolio Shares of each Portfolio issued or sold from time to time
by such Portfolio. The Custodian will provide timely notification to each
Portfolio and the transfer agent of any receipt by it of cash payments for
Portfolio Shares of such Portfolio.
F. AVAILABILITY OF FEDERAL FUNDS. Upon mutual agreement between
each Portfolio and the Custodian, the Custodian shall, upon the receipt of
Proper Instructions and in accordance with the agreed deadlines, which may be
continuing instructions when deemed appropriate by the parties, make federal
funds available to each Portfolio as of specified times agreed upon from time to
time by such Portfolio and the Custodian in the
- 8 -
<PAGE>
amount of checks received in payment for Portfolio Shares of each Portfolio
which are deposited into such Portfolio's account.
G. COLLECTION OF INCOME. The Custodian shall collect on a timely
and reasonable basis all income and other payments with respect to registered
securities held hereunder to which each Portfolio shall be entitled either by
law or pursuant to custom in the securities business and shall collect on a
timely and reasonable basis all income and other payments with respect to bearer
securities if, on the date of payment by the issuer, such securities are held by
the Custodian or agent thereof and shall credit such income, as collected, to
such Portfolio's Custodian account. Without limiting the generality of the
foregoing, the Custodian shall detach and present for payment all coupons and
other income items requiring presentation as and when they become due and shall
collect interest when due on securities held hereunder. The Custodian's
obligations under this Section II.G. shall be to take all reasonable and
customary steps to collect such income and payments, and the Custodian shall
bear no responsibility for its failure to make collections beyond the exercise
of such reasonable and customary steps.
H. PAYMENT OF PORTFOLIO MONEYS. Upon receipt of Proper
Instructions, which may be continuing instructions when deemed appropriate by
the parties, the Custodian shall pay out moneys of a Portfolio in accordance
with its usual and customary business practice, in the following cases only:
(1) Upon the purchase of securities for the account of a Portfolio
but only (a) against the delivery of
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<PAGE>
such securities to the Custodian (or any bank, banking firm or
trust company doing business in the United States or abroad
which is qualified under the Investment Company Act of 1940, as
amended, to act as custodian and has been designated by the
Custodian as its agent for this purpose) registered in the name
of such Portfolio or in the name of a nominee of the Custodian
referred to in Section C of Article II hereof or in proper form
for transfer; (b) in the case of a purchase effected through a
Securities System, in accordance with the conditions set forth
in Section L of Article II hereof, or (c) in the case of
repurchase agreements, (i) against delivery of securities either
in certificate form or through an entry crediting the
Custodian's account at the Federal Reserve Bank with such
securities, or (ii) against delivery of the receipt evidencing
purchase by the Portfolio of securities owned by the Custodian
along with written evidence of the agreement by the Custodian to
repurchase such securities from the Portfolio;
(2) In connection with conversion, exchange or surrender of
securities owned by a Portfolio as set forth in Section B of
Article II hereof;
(3) For the redemption or repurchase of Portfolio Shares as set
forth in Section J of Article II hereof;
- 10 -
<PAGE>
(4) For the payment of any expense or liability incurred by a
Portfolio, including but not limited to the following payments
for the accounts of such Portfolio: interest, taxes, management,
administration, accounting, transfer agent and legal fees, and
operating expenses of such Portfolio whether or not such
expenses are to be in whole or in part capitalized or treated as
deferred expenses;
(5) For the payment of any dividends declared pursuant to the
governing documents of a Portfolio; and
(6) For any other proper corporate purposes, BUT ONLY upon receipt
of, in addition to Proper Instructions, a notification signed by
two officers of the Trust and certified by its Secretary or an
Assistant Secretary of the Trust, specifying the amount of such
payment, setting forth the purpose of which such payment is to
be made, declaring such purpose to be a proper corporate
purpose, and naming the person or persons to whom such payment
is to be made.
I. LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES
PURCHASED. In any and every case where payment for purchase of securities for
the account of a Portfolio is made by the Custodian in advance of receipt of the
securities purchased in the absence of specific written instructions from such
Portfolio to so pay in advance, the Custodian shall be absolutely
- 11 -
<PAGE>
liable to such Portfolio for such securities to the same extent as if the
securities had been received by the Custodian.
J. PAYMENTS FOR REPURCHASES OR REDEMPTIONS OF PORTFOLIO SHARES OF
THE TRUST. The Custodian shall upon instruction from the distributor or transfer
agent deposit into the account of the appropriate Portfolio such payments as are
received for Shares of that Portfolio issued or sold from time to time by the
Portfolio. The Custodian will provide timely notification to the Portfolio and
the transfer agent of any receipt by it of payments for Shares of such
Portfolio.
From such funds as may be available for the purpose but subject
to the limitations of the Trust Instrument and any applicable votes of the Board
of Trustees of the Trust pursuant thereto, the Custodian shall, upon receipt of
Proper Instructions from the transfer agent, make funds available for payment to
holders of Shares who have delivered to the transfer agent a request for
redemption or repurchase of their Shares. In connection with the redemption or
repurchase of Shares of a Portfolio, the Custodian is authorized upon receipt of
instructions from the transfer agent to wire funds to the transfer agent for
payment by the transfer agent or through a commercial bank designated by the
redeeming shareholders. In connection with the redemption or repurchase of
Shares of the Portfolio, the Custodian shall honor checks drawn on the Custodian
by a holder of Shares, which checks have been furnished by the Trust to the
holder of Shares, when presented to the Custodian in accordance with such
procedures and controls as are
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<PAGE>
mutually agreed upon from time to time between the Trust and the Custodian.
K. APPOINTMENT OF AGENTS. Subject to prior approval by the Board of
Trustees of the Trust, the Custodian may at any time appoint any other bank or
trust company which is itself qualified under the Investment Company Act of
1940, as amended, to act as a custodian, as its agent to carry out such of the
provisions of this Article II as the Custodian may from time to time direct.
L. DEPOSIT OF PORTFOLIO ASSETS IN A SECURITIES SYSTEMS. The
Custodian may deposit and/or maintain securities owned by each Portfolio in a
clearing agency registered with the Securities and Exchange Commission under
Section 17A of the Securities Exchange Act of 1934, which acts as a securities
depository, or in the book-entry system authorized by the U.S. Department of
Treasury and certain federal agencies, collectively referred to herein as a
"Securities Systems" in accordance with applicable Federal Reserve Board and
Securities and Exchange Commission rules and regulations, if any, and subject to
the following provisions:
(1) The Custodian may keep securities of each Portfolio in a
Securities System provided that such securities are represented
in an account (the "Account") of the Custodian in a Securities
System which shall not include any assets of the Custodian other
than assets held as a fiduciary, custodian, or otherwise for
customers;
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<PAGE>
(2) The records of the Custodian with respect to securities of each
Portfolio which are maintained in its Securities System shall
identify by book-entry those securities belonging to each
Portfolio;
(3) The Custodian shall pay for securities purchased for the account
of each Portfolio upon (i) receipt of advices from a Securities
System that such securities have been transferred to the
Account, and (ii) the making of an entry on the records of the
Custodian to reflect such payment and transfer for the account
of each Portfolio. The Custodian shall transfer securities sold
for the account of each Portfolio upon (i) receipt of advices
from a Securities System that payment for such securities has
been transferred to the Account, and (ii) the making of an entry
on the records of the Custodian to reflect such transfer and
payment for the account of such Portfolio. Copies of all advices
from its Securities System of transfers of securities for the
account of each Portfolio shall be maintained for such Portfolio
by the Custodian and be provided to such Portfolio at its
request. The Custodian shall furnish each Portfolio confirmation
of each transfer to or from the account of such Portfolio in the
form of copies of daily transaction advices reflecting each
day's transactions in its Securities System for the account of
such Portfolio on the next business
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<PAGE>
day, which daily transaction advices may be provided by
electronic means;
(4) The Custodian shall have received the initial or annual
certificate, as the case may be, required by Article X hereof;
(5) The Custodian shall provide each Portfolio with any report
obtained by the Custodian on its Securities System's accounting
system, internal accounting control and procedures for
safeguarding securities deposited in its Securities System;
(6) Anything to the contrary in this Agreement notwithstanding, the
Custodian shall be liable to each Portfolio for any loss or
damage to such Portfolio resulting from use of its Securities
System by reason of any acts of negligence, misfeasance or
misconduct of the Custodian or of any of its employees or from
any failure of the Custodian or any such agent to make
reasonable efforts to enforce effectively such rights as it may
have against a Securities System; at the election of each
Portfolio, it shall be entitled to be subrogated to the rights
of the Custodian with respect to any claim against a Securities
System or any other person which the Custodian may have as a
consequence of any such loss or damage if and to the extent that
a Portfolio has not been made whole for any such loss or damage.
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<PAGE>
M. OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The Custodian shall
execute ownership and other certificates and affidavits for all federal and
state tax purposes in connection with receipt of income or other payments with
respect to securities of each Portfolio held by it and in connection with
transfers of securities.
N. PROXIES. The Custodian shall, with respect to the securities
held by it hereunder, cause to be promptly executed by the registered holder of
such securities, if the securities are registered otherwise than in the name of
a Portfolio, all proxies, without indication of the manner in which such proxies
are to be voted, and shall promptly deliver to the Adviser such proxies, all
proxy soliciting materials and all notices relating to such securities.
O. COMMUNICATIONS RELATING TO PORTFOLIO SECURITIES. The Custodian
shall transmit promptly to the Adviser all written information (including,
without limitation, pendency of calls and maturities of securities and
expirations of rights in connection therewith) received by the Custodian from
issuers of the securities being held for such Portfolio.
(1) Notwithstanding any provision hereunder to the contrary, with
respect to Securities which possess so-called put options or
similar characteristics which grant the Trust the option to
redeem such Securities prior to their maturity date (the "Put
Option Securities"), including, but not limited to, so-called
put bonds, the Custodian shall not
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<PAGE>
have any liability with respect to the exercise or non-exercise
of any such Put Option, except that:
(a) With respect to put options which are exercisable semiannually
or less frequently than semiannually, and where such Put Option
Security is actually delivered to the Custodian not less than
fifteen business days prior to the put option exercise date, the
Custodian will use its best efforts to notify the Trust and the
Adviser of such put options where correct and timely
notification is published in the publications or services (the
"Notification Sources") the Custodian routinely uses for this
purpose, or as to which the Custodian receives timely notice
from the Trust;
(b) Once notified, the Trust must direct the exercise or
non-exercise of such put option by written instrument delivered
to the Custodian not less than five business days prior to the
put option exercise date;
(c) For the purposes of this Section O(1)(a), a "business day" is a
day on which the Custodian is open for business under the laws
of the State of New York; the Notification Sources include, but
are not limited to The Wall Street Journal and/or Depository
Trust Company of New York. The Custodian reserves the right to
utilize other Notification Sources or discontinue any of the
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<PAGE>
aforementioned Notification Sources at any time and without
notice. The Custodian will not notify the Trust of put options
exercisable more frequently than semiannually.
(2) With respect to tender or exchange offers, the Custodian shall
transmit promptly to the Adviser all written information
received by the Custodian from issuers of the securities whose
tender or exchange is sought and from the party (or his agents)
making the tender or exchange offer. If the Adviser desires to
take action with respect to any tender offer, exchange offer or
any other similar transaction, the Adviser shall notify the
Custodian at least three business days prior to the date on
which the Custodian is to take such action.
P. PROPER INSTRUCTIONS. "Proper Instructions" as used throughout
this Article II means a writing signed or initialed by one or more person or
persons and in the manner as the Trustees, the Adviser or the transfer agent, as
the case may be, shall have authorized from time to time. Each such writing
shall set forth the transaction involved, including a specific statement of the
purpose of which such action is requested. The Custodian may also accept and
rely on instructions transmitted by the Trust or the Trust's authorized agent
including the Adviser, whether given orally, by telephone, cable or telex,
facsimile transmission or other electronic means which the Custodian reasonably
believes to be genuine. Oral instructions will be
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<PAGE>
considered Proper Instructions if the Custodian believes them to have been given
by a person authorized to give such instructions with respect to the transaction
involved. The Trust and the Adviser shall cause all oral instructions to be
confirmed in writing. Written confirmation of oral instructions shall in no way
affect any action the Custodian takes in reliance upon the oral instructions.
Upon receipt of a certificate of the Secretary or an Assistant Secretary as to
the authorization by the Trustees of the Trust accompanied by a detailed
description of procedures approved by the Trustees, "Proper Instructions" may
include communications effected directly between electromechanical or electronic
devices provided that the Trustees and the Custodian agree that such procedures
afford adequate safeguards for each Portfolio's assets.
Q. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY. The Custodian may
in its discretion, without express authority from each Portfolio:
(1) Make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under
this Agreement, provided that all such payments shall be
accounted for to each Portfolio, such expenses shall include,
but not be limited to postage, shipping, courier, wire
transfers, expenses to enforce any obligation of any agent,
sub-custodian or Securities System and other out-of-pocket
expenses not assumed by the Custodian pursuant to this
Agreement;
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<PAGE>
(2) Surrender securities in temporary form in exchange for
securities in definitive form;
(3) Endorse for collection, in the name of each Portfolio, checks,
drafts and other negotiable instruments; and
(4) In general, attend to all non-discretionary details in
connection with the sale, exchange, substitution, purchase,
transfer and other dealings with the securities and property of
each Portfolio except as otherwise directed by the Board of
Trustees of the Trust.
R. EVIDENCE OF AUTHORITY. The Custodian shall be protected in
acting upon any Proper Instructions whether oral or in writing, and any notice,
request, consent, certificate or other instrument or paper believed by it to be
genuine and to have been properly executed by or on behalf of a Portfolio. The
Custodian may receive and accept a certificate copy of a vote of the Board of
Trustees of the Trust as conclusive evidence (a) of the authority of any person
to act in accordance with such vote, or (b) of any determination or of any
action by the Board of Trustees pursuant to the Trust Instrument as described in
such vote, and such vote may be considered as in full force and effect until
receipt by the Custodian of written notice to the contrary.
S. NO LIABILITY UNTIL RECEIPT. The Custodian shall not be liable
for, or considered to be the Custodian of, any money whether or not represented
by any check, draft, or other
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<PAGE>
instrument for the payment of money, or any securities received by it on behalf
of any Portfolio until the Custodian actually receives and collects such money
or securities directly or by the final crediting of the Account representing the
Portfolio's interest in a Securities System, or a subcustodian.
T. SEGREGATED ACCOUNTS. The Custodian shall upon receipt of Proper
Instructions establish and maintain a segregated account or accounts for and on
behalf of a Portfolio, into which account or accounts may be transferred cash
and/or securities, including securities maintained in an account by the
Custodian in a Securities System or with a subcustodian, (i) in accordance with
the provisions of any agreement among the Trust, the Custodian and a
broker-dealer registered under the Exchange Act and a member of the NASD (or any
futures commission merchant registered under the Commodity Exchange Act),
relating to compliance with the rules of The Options Clearing Corporation and of
any registered national securities exchange (or Commodity Futures Trading
Commission or any registered contract market) or of any similar organization or
organizations, regarding escrow or other arrangements in connection with
transactions by such Portfolio, (ii) for purposes of segregating cash or
government securities in connection with options purchased, sold or written by
such Portfolio or commodity futures contracts or options thereon purchased of
sold by such Portfolio, (iii) for the purposes of compliance by such Portfolio
with the procedures required by Investment Company Act Release No. 10666, or any
subsequent release or releases of the Securities and Exchange Commission
relating to the maintenance of segregated accounts by
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<PAGE>
registered investment companies, and (iv) for other corporate purposes.
III. DUTIES OF CUSTODIAN WITH RESPECT TO BOOKS OF ACCOUNT AND CALCULATION OF
NET ASSET VALUE AND NET INCOME. The Custodian shall cooperate with and supply
necessary information to the entity or entities appointed by the Trustees to
keep the books of account of each Portfolio, compute the net asset value per
share of the outstanding shares of each Portfolio and compute the daily net
income of each Portfolio.
IV. RECORDS. The Custodian shall create and maintain all records relating to
its activities and obligations under this Agreement in such manner as will meet
the obligations of each Portfolio under the Investment Company Act of 1940,
including, but not limited to Section 31 thereof and Rules 31a-1 and 31a-2
thereunder, applicable federal and state tax laws and any other law or
administrative rules or procedures which may be applicable to each Portfolio.
All such records shall be available to each Portfolio and shall at all times
during the regular business hours of the Custodian be open for inspection by
duly authorized officers, employees or agents of each Portfolio and employees
and agents of the Securities and Exchange Commission. The Custodian shall, at
each Portfolio's request, supply such Portfolio with a tabulation of securities
owned by such Portfolio and held by the Custodian and shall, when requested to
do so by a Portfolio and for such compensation as shall be agreed upon between
such Portfolio and the Custodian, include certificate numbers in such
tabulations.
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<PAGE>
V. OPINION OF TRUST'S INDEPENDENT PUBLIC ACCOUNTANTS. The Custodian shall
take all reasonable action, as the Trust may from time to time request, to
obtain from year to year favorable opinions from the Trust's independent public
accountants with respect to its activities hereunder in connection with the
preparation of the Trust's Form N-1A and the Trust's Form N-SAR or other annual
reports to the Securities and Exchange Commission and with respect to any other
requirements of such Commission.
VI. REPORTS TO EACH PORTFOLIO BY INDEPENDENT PUBLIC ACCOUNTANTS. The
Custodian shall provide each Portfolio, at such times as each Portfolio may
reasonably require and at the Portfolio's expenses, with reports by independent
public accountants on the accounting system, internal accounting control and
procedures for safeguarding securities, including securities deposited and/or
maintained in a Securities System, relating to the services provided by the
Custodian under this Agreement; such reports, which shall be of sufficient scope
and in sufficient detail, as may reasonably be required by each Portfolio, to
provide reasonable assurance that any material inadequacies disclosed by such
examination, and, if there are no such inadequacies, shall so state.
VII. COMPENSATION OF CUSTODIAN. The Custodian shall be entitled to reasonable
compensation for its services as Custodian, as set forth in the Supplements to
this Agreement.
VIII. RESPONSIBILITY OF CUSTODIAN. The Custodian shall not be responsible for
the title, validity or genuineness of any property or evidence of title thereto
received by it or delivered
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<PAGE>
by it pursuant to this Agreement and shall be held harmless in acting upon any
notice, request, consent, certificate or other instrument believed by it to be
genuine and to be signed by the proper party or parties.
The Custodian shall be entitled to rely on and may act upon
advice of counsel (who may be counsel for the Trust) on all matters, and shall
be without liability for any action taken or omitted by it in good faith in
accordance with such advice. Notwithstanding the foregoing, the responsibility
of the Custodian with respect to redemptions effected by check may be set forth
in a separate agreement entered into between the Custodian, a Portfolio and the
Adviser.
In carrying out the provisions of this Agreement the Custodian
shall not be held liable for any act or failure to act which shall constitute
the exercise of reasonable care, or is in accordance with industry standards and
practice. Each Portfolio shall indemnify the Custodian and hold it harmless from
and against all claims, liabilities, and expenses (including attorneys' fees)
which the Custodian may suffer or incur on account of being Custodian hereunder
except such claims, liabilities and expenses arising from the Custodian's own
acts or omissions to act which shall fail to meet the foregoing standard of
care.
If a Portfolio requires the Custodian to take any action with
respect to securities, which action involves the payment of money or which
action may, in the opinion of the Custodian, result in the Custodian or its
nominee assigned to
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<PAGE>
such Portfolio being liable for the payment of money or incurring liability of
some other form, such Portfolio, as a prerequisite to requiring the Custodian to
take such action, shall provide indemnity to the Custodian in an amount and form
satisfactory to it.
If a Portfolio requires the Custodian to advance cash or
securities for any purpose or in the event that the Custodian or its nominee
shall incur or be assessed any taxes, charges, expenses, assessments, claims or
liabilities in connection with the performance of this Agreement, except such as
may arise from the Custodian's own acts or omissions to act in the absence of
reasonable care and in a manner that is not consistent with industry standards
and practice, any property at any time held for the account of such Portfolio
shall be security therefor and should such Portfolio fail to repay the Custodian
promptly, the Custodian shall be entitled to utilize available cash and to
dispose of such Portfolio's assets to the extent necessary to obtain
reimbursement.
IX. FUNDS TRANSFERS. For the purposes of this Section IX, "funds transfer"
shall mean a series of transactions, beginning with a payment order of an
originator made for the purpose of making payment to the beneficiary of such
order (such beneficiary is referred to as the "beneficiary") but does not
include debit transfer made through the automated clearing house system or
transfers governed by the Federal Electronic Funds Transfer Act and "payment
order" shall mean an instruction transmitted orally, electronically, or in
writing to pay a fixed or determinable amount to a beneficiary.
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<PAGE>
In accepting any payment order directing payment from the
account of a Portfolio to a beneficiary, the Custodian and the beneficiary's
bank may rely solely upon any account number or similar identifying number such
Portfolio has provided to identify (i) the beneficiary, (ii) the beneficiary's
bank, or (iii) an intermediary bank to be used in executing such payment order.
A Portfolio shall be required to pay the Custodian and the Custodian is
authorized to charge the account of such Portfolio for any funds transfer made
by the Custodian at the direction of such Portfolio utilizing any such
identifying numbers even where their use may result in a person other than the
beneficiary being paid or the transfer of funds to a bank other than the
beneficiary's bank or an intermediary bank other than that intended. In sending
any payment order the Custodian may send only the account number (or similar
identifying number) and the bank identification number provided.
When the Custodian receives a payment order to which a Portfolio
is the beneficiary it may credit the proceeds of that order solely on the basis
of the account number (or similar identifying number) contained in such payment
order.
If any payment order is transmitted through any funds transfer
system including, but not limited to the Clearing House Interbank Payment System
(CHIPS) or the automated clearing house system (ACH), a Portfolio shall be
subject to the rules of such funds transfer system in effect at the time that
such transfer is made. Any provisional credit granted on any ACH credit entry
may be reversed by the Custodian if final settlement does not occur.
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<PAGE>
Should the Custodian be required to pay a Portfolio any interest
in connection with a payment order (whether as the originator or the
beneficiary) such interest shall be computed based on the Rules on Interbank
Compensation then in effect in The New York Clearing House Association.
In executing any payment order the Custodian may use the
services of correspondent and intermediary banks, funds transfer systems,
telecommunication companies and other entities of similar purpose. Such entities
shall not be deemed the Custodian's agents, and the Custodian will not be
responsible for their acts or omissions with regard to any payment orders in the
absence of the exercise of reasonable care as is consistent with industry
standards and practice on the part of the Custodian.
X. EFFECTIVE PERIOD - TERMINATION AND AMENDMENT.
(a) Subject to prior termination as provided in paragraph (d)
of this Section X, this Agreement shall continue in force for two (2) years from
the date hereof and indefinitely thereafter, but only so long as the continuance
shall be specifically approved at least annually by vote of the Trust's Board of
Trustees or by vote of a majority of the outstanding voting securities of the
Trust;
(b) This Agreement may be modified by mutual consent;
(c) In addition to the requirements of sub-paragraph (a) of
this Section X, the terms of any continuance or modification of the Agreement
must have been approved by the vote
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<PAGE>
of a majority of those Trustees of the Trust who are not parties to such
Agreement or interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval; and
(d) Either party hereto may, at any time, on sixty (60) days' prior
written notice to the other, terminate this Agreement, without payment of any
penalty, provided however that the Trust shall only do so by action of its Board
of Trustees, or by vote of a majority of its outstanding voting securities. This
Agreement shall terminate automatically in the event of its assignment.
The Custodian shall receive an initial certificate from the Trust
that the Trustees of the Trust have approved the initial use of a particular
Securities System and an annual certificate reporting that the Trustees, as
required by Rule 17f-4 under the Investment Company Act of 1940, as amended,
have reviewed the use by each Portfolio of such Securities System; further the
Trust shall not amend or terminate the Agreement in contravention of any
applicable federal or state regulations, or any provision of the Trust
Instrument; and the Trust may at any time by action of its Trustees (i)
substitute another bank or trust company for the Custodian by giving notice as
described above to the Custodian, or (ii) immediately terminate this Agreement
in the event of the appointment of a conservator or receiver for the Custodian
by the appropriate banking authorities or upon the happening of a like event at
the direction of an appropriate regulatory agency or court of competent
jurisdiction.
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<PAGE>
Upon termination of the Agreement, the Trust shall pay to the
Custodian such compensation as may be due as of the date of such termination and
shall likewise reimburse the Custodian for its costs, expenses and
disbursements, including any costs, expenses and disbursements incurred in
performing the obligations set forth in Section XI hereof.
If this Agreement is terminated with respect to any Portfolio, it
shall nonetheless remain in effect with respect to any remaining Portfolio.
XI. SUCCESSOR CUSTODIAN. If a successor custodian is appointed by the
Trustees of the Trust, the Custodian shall, upon termination, deliver to such
successor custodian at the office of the Custodian, duly endorsed and in the
form for transfer, all securities and other assets of each Portfolio then held
by it hereunder. The Custodian shall also deliver to such successor custodian
copies of such books and records relating to each Portfolio including but not
limited to the records required to be maintained by the Custodian in accordance
with the Investment Company Act of 1940.
If no such successor custodian is appointed, the Custodian shall, in
like manner, upon receipt of a certified copy of a vote of the Trustees of the
Trust, deliver at the office of the Custodian such securities, funds and other
properties in accordance with such vote.
In the event that no written order designating a successor custodian
or certified copy of a vote of the Board of
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<PAGE>
Trustees shall have been delivered to the Custodian on or before the date when
such termination shall become effective, then the Custodian shall have the right
to deliver to a bank or trust company of its own selection, having an aggregate
capital, surplus, and undivided profits, as shown by its last published report,
of not less than $25,000,000, all securities, funds and other properties held by
the Custodian and all instruments held by the Custodian relative thereto and all
other property held by it under this Agreement. Thereafter, such bank or trust
company shall be the successor of the Custodian under this Agreement.
In the event that securities, funds and other properties remain in
the possession of the Custodian after the date of termination hereof owing to
failure of the Trust to procure the certified copy of a vote of the Board of
Trustees to appoint a successor custodian, the Custodian shall be entitled to
fair compensation for its services during such period as the Custodian retains
possession of such securities, funds and other properties and the provisions of
this Agreement relating to the duties and obligations of the Custodian shall
remain in full force and effect.
XII. INTERPRETIVE AND ADDITIONAL PROVISIONS. In connection with the operation
of this Agreement, the Custodian and the Trust may from time to time agree on
such provisions interpretive of or in addition to the provisions of this
Agreement as may in their joint opinion be consistent with the general tenor of
this Agreement. Any such interpretive or additional provisions shall be in
writing signed by both parties and shall be annexed hereto, provided that no
such interpretive or additional provisions shall
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contravene any applicable federal or state regulations or any provision of the
Trust Instrument of the Trust. No interpretive or additional provisions made as
provided in the preceding sentence shall be deemed to be an amendment to this
Agreement.
XIII. TRUSTEES. All references to actions of or by Trustees of the Trust shall
require action by such Trustees acting as a Board or formally constituted group
and not individually.
XIV. APPLICABLE LAW. This Agreement shall be construed and the provision
thereof interpreted under and in accordance with the laws of New York. The name
"IBJ Funds Trust" is the designation by the Trustees under the Trust Instrument,
dated August 25, 1994, as amended, and all persons dealing with the Trust must
look solely to the Trust property for the enforcement of any claims against the
Trust as neither any or all of the Trustees, officers, or agents, nor any or all
of the shareholders assume(s) any personal liability for obligations entered
into on behalf of the Trust.
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<PAGE>
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the day and year first above written.
IBJ SCHRODER BANK & TRUST COMPANY
By:-------------------------------
Title:
IBJ FUNDS TRUST
By:-------------------------------
Title:
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<PAGE>
IBJ Funds Trust
237 Park Avenue
New York, New York 10017
November 18, 1994
IBJ Schroder Bank & Trust Company
1 State Street
New York, New York 10004
Re: CUSTODIAN AGREEMENT
Dear Sirs:
This will confirm the agreement between IBJ Funds Trust (the
"Company") and IBJ Schroder Bank & Trust Company (the "Custodian") as follows:
The Company and the Custodian have entered into a Custodian Agreement,
dated as of November 18, 1994 (as from time to time amended and supplemented,
the "Custodian Agreement"), pursuant to which the Custodian has undertaken to
provide or make provision for the Company for certain custody services
identified therein and to provide certain other services, as more fully set
forth therein. Certain capitalized terms used without definition in this
Custodian Agreement Supplement have the meaning specified in the Custodian
Agreement.
The Company agrees with the Custodian that for all services to be
rendered, facilities furnished and expenses paid or assumed by the Custodian as
provided in the Custodian Agreement and herein, the Company shall pay the
following fees:
a monthly fee at an annual rate of % of the aggregate average daily
net assets of the Funds Out of pocket expenses are billed at cost.
<PAGE>
If the foregoing correctly sets forth the agreement between the
Company and the Custodian, please so indicate by signing and returning to the
Company the enclosed copy hereof.
Very truly yours,
IBJ FUNDS
By:______________________
Title:
The foregoing Agreement is hereby
agreed to as of the date hereof:
IBJ SCHRODER BANK & TRUST COMPANY
By:_______________________________
Title:
<PAGE>
Exhibit 9(a)
Form of Transfer Agency and Service Agreement between
Registrant and Furman Selz Incorporated
<PAGE>
TRANSFER AGENCY AGREEMENT
THIS AGREEMENT is made as of the 18th day of November, 1994 between IBJ
Funds Trust, a Delaware business trust (the "Company"), and FURMAN SELZ
INCORPORATED, a Delaware corporation (the "Transfer Agent").
R E C I T A L
WHEREAS, the Company is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Company desires to retain the Transfer Agent to serve as
the Company's transfer agent, registrar, and dividend disbursing agent, and the
Transfer Agent is willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Company hereby appoints the Transfer Agent to serve
as transfer agent, registrar and dividend disbursing agent for the Company with
respect to the shares of the Company's four existing investment portfolios:
Reserve Money Market Fund, Bond Fund, Core Equity Fund and Growth and Income
Fund (collectively, the "Funds"), for the period and on the terms
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<PAGE>
set forth in this Agreement. In the event that the Company establishes one or
more portfolios other than the Funds with respect to which the Company decides
to retain the Transfer Agent to act as transfer agent hereunder, the Company
shall so notify the Transfer Agent in writing. If the Transfer Agent is willing
to render such services, the Transfer Agent shall promptly notify the Company in
writing whereupon such portfolio shall be deemed to be a Fund hereunder.
2. DELIVERY OF DOCUMENTS. The Company has furnished the Transfer Agent
with copies properly certified or authenticated of each of the following:
(a) Resolutions of the Company's Board of Trustees authorizing the
appointment of the Transfer Agent as transfer agent and registrar and dividend
disbursing agent for the Company and approving this Agreement;
(b) Appendix A identifying and containing the signatures of the
Company's officers and other persons authorized to issue Oral Instructions and
to sign Written Instructions, as hereinafter defined, on behalf of the Company
and to execute stock certificates representing Shares;
(c) the Company's Declaration of Trust filed with the Department of
Assessments and Taxation of the State of Delaware on May 2, 1994 and all
amendments thereto (the "Articles");
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<PAGE>
(d) The Company's By-Laws and all amendments thereto (the"By-Laws");
(e) (i) The Advisory Agreement between IBJ Schroder Bank & Trust
Company and the Company with respect to the Funds;
(f) The Custodian Agreement between IBJ Schroder Bank & Trust
Company and the Company dated as of November 18, 1994 (IBJ Schroder Bank & Trust
Company, being referred to herein as the "Custodian" for the period during which
the agreement between the Company and such entity is in effect);
(g) The Fund Administration Services Agreement between Furman Selz
Incorporated (the "Administrator") and the Company dated as of November 18,
1994;
(h) The Distribution Agreement between IBJ Funds Distributor
Incorporated (the "Distributor") and the Company dated as of November 18, 1994;
(i) The Company's most recent Registration Statement on Form N-lA
under the Securities Act of 1933 (the "1933 Act") and under the 1940 Act as
filed with the SEC relating to shares of the Company's Capital Stock, $.001 par
value (the "Shares"), and all amendments thereto;
(j) The Company's most recent prospectus and statement of additional
information and all amendments and supplements thereto (the "Prospectus"); and
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(k) Before the Company engages in any transaction regulated by the
Commodity Futures Trading Commission ("CFTC"), a copy of either (i) a filed
notice of eligibility to claim the exclusion from the definition of "commodity
pool operator" contained in Section 2(a)(1)(A) of the Commodity Exchange Act
("CEA") that is provided in Rule 4.5 under the CEA, together with all
supplements as are required by the CFTC, or (ii) a letter which has been granted
the Company by the CFTC which states that the Company will not be treated as a
"pool" as defined in Section 4.10(d) of the CFTC's General Regulations, or (iii)
a letter which has been granted the Company by the CFTC which states that the
CFTC will not take any enforcement action if the Company does not register as a
"commodity pool operator".
The Company will furnish the Transfer Agent from time to time with
copies, properly certified or authenticated, of all amendments of or supplements
to the foregoing, if any.
3. DEFINITIONS.
(a) "AUTHORIZED PERSON". As used in this Agreement, the term
"Authorized Person" means any officer of the Company and any other person,
whether or not any such person is an officer or employee of the Company, duly
authorized by the Board of Directors of the Company to give Oral and Written
Instructions on behalf of the Company and listed on the Certificate annexed
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<PAGE>
hereto as Appendix A or any amendment thereto as may be received by the Transfer
Agent from time to time.
(b) "ORAL INSTRUCTIONS". As used in this Agreement, the term "Oral
Instructions" means oral instructions actually received by the Transfer Agent
from an Authorized Person or from a person reasonably believed by the Transfer
Agent to be an Authorized Person. The Company agrees to deliver to the Transfer
Agent, at the time and in the manner specified in Paragraph 4(b) of this
Agreement, Written Instructions confirming Oral Instructions.
(c) "WRITTEN INSTRUCTIONS". As used in this Agreement, the term
"Written Instructions" means written instructions delivered by hand, mail,
tested telegram, cable, telex or facsimile sending device including buy or sell
tickets, computer transmissions, and received by the Transfer Agent and signed
by an Authorized Person.
4. INSTRUCTIONS CONSISTENT WITH ARTICLES, ETC.
(a) Unless otherwise provided in this Agreement, the Transfer Agent
shall act only upon Oral or Written Instructions. Although the Transfer Agent
may know of the provisions of the Articles and By-Laws of the Company, the
Transfer Agent may assume that any Oral or Written Instructions received
hereunder are not in any way inconsistent with any provisions of such
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<PAGE>
Articles or By-Laws or any vote, resolution or proceeding of the Shareholders,
or of the Board of Directors, or of any committee thereof.
(b) The Transfer Agent shall be entitled to rely upon any Oral
Instructions and any Written Instructions actually received by the Transfer
Agent pursuant to this Agreement. The Company agrees to forward to the Transfer
Agent Written Instructions confirming Oral Instructions in such manner that the
Written Instructions are received by the Transfer Agent by the close of business
of the same day that such Oral Instructions are given to the Transfer Agent. The
Company agrees that the fact that such confirming Written Instructions are not
received by the Transfer Agent shall in no way affect the validity of the
transactions or enforceability of the transactions authorized by the Company by
giving Oral Instructions. The Company agrees that the Transfer Agent shall incur
no liability to the Company in acting upon Oral Instructions given to the
Transfer Agent hereunder concerning such transactions, provided such Oral
Instructions reasonably appear to have been received from an Authorized Person.
5. TRANSACTIONS NOT REQUIRING INSTRUCTIONS. In the absence of contrary
Written Instructions, the Transfer Agent is authorized to take the following
actions:
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<PAGE>
(a) ISSUANCE OF SHARES. Upon receipt of a purchase order from the
Distributor for the purchase of Shares and sufficient information to enable the
Transfer Agent to establish a Shareholder account, and after confirmation of
receipt or crediting of Federal funds for such order from the Company's
Custodian, the Transfer Agent shall issue and credit the account of the investor
or other record holder with Shares in the manner described in the Prospectus.
(b) TRANSFER OF SHARES; UNCERTIFICATED SECURITIES. Where a
Shareholder does not hold a certificate representing the number of Shares in his
account and does provide the Transfer Agent with instructions for the transfer
of such Shares which include appropriate documentation to permit a transfer,
then the Transfer Agent shall register such Shares and shall deliver them
pursuant to instructions received from the transferor, pursuant to the rules and
regulations of the SEC, and the law of the State of Maryland relating to the
transfer of shares of common stock.
(c) STOCK CERTIFICATES. If at any time the Company issues stock
certificates, the following provisions will apply:
(i) The Company will supply the Transfer Agent with a sufficient
supply of stock certificates representing Shares, in the form approved from
time to time by the Board of Directors of the Company, and, from time to
time, shall
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<PAGE>
replenish such supply upon request of the Transfer Agent. Such stock
certificates shall be properly signed, manually or by facsimile signature,
by the duly authorized officers of the Company, whose names and positions
shall be set forth on Appendix A, and shall bear the corporate seal or
facsimile thereof of the Company, and notwithstanding the death,
resignation or removal of any officer of the Company, such executed
certificates bearing the manual or facsimile signature of such officer
shall remain valid and may be issued to Shareholders until the Transfer
Agent is otherwise directed by Written Instructions.
(ii) In the case of the loss or destruction of any certificate
representing Shares, no new certificate shall be issued in lieu thereof,
unless there shall first have been furnished an appropriate bond of
indemnity issued by the surety company approved by the Transfer Agent.
(iii) Upon receipt of signed stock certificates, which shall be in
proper form for transfer, and upon cancellation or destruction thereof, the
Transfer Agent shall countersign, register and issue new certificates for
the same number of Shares and shall deliver them pursuant to instructions
received from the transferor, the rules and
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<PAGE>
regulations of the SEC, and the law of the State of Maryland relating to
the transfer of shares of common stock.
(iv) Upon receipt of the stock certificates, which shall be in
proper form for transfer, together with the Shareholder's instructions to
hold such stock certificates for safekeeping, the Transfer Agent shall
reduce such Shares to uncertificated status, while retaining the
appropriate registration in the name of the Shareholder upon the transfer
books.
(v) Upon receipt of written instructions from a Shareholder of
uncertificated securities for a certificate in the number of shares in his
account, the Transfer Agent will issue such stock certificates and deliver
them to the Shareholder.
(d) REDEMPTION OF SHARES. Upon receipt of a redemption order from
the Distributor, the Transfer Agent shall redeem the number of Shares indicated
thereon from the redeeming Shareholder's account and receive from the Company's
Custodian and disburse to the redeeming Shareholder the redemption proceeds
therefor, or arrange for direct payment of redemption proceeds to such
Shareholders by the Company's Custodian, in accordance with such procedures and
controls as are mutually agreed upon from time to time by and among the Company,
the Transfer Agent and the
- 9 -
<PAGE>
Company's Custodian. Authority to perform the above shall be suspended when the
Company suspends the Shareholders' right of redemption, provided that the
Company delivers Notice of such suspension to the Transfer Agent.
6. AUTHORIZED SHARES. The Company's authorized capital stock
consists of an unlimited amount of shares of Capital Stock, par value $.001 per
Share.
The Transfer Agent shall record issues of all Shares and shall notify
the Company in case any proposed issue of Shares by the Company for a particular
Fund shall result in an over-issue for that Fund as defined by Section 8-104(2)
of Article 8 of the Maryland Uniform Commercial Code. In case any such issue of
Shares would result in such an over-issue, the Transfer Agent shall refuse to
issue said Shares and shall not countersign and issue certificates for such
Shares. The Company agrees to notify the Transfer Agent promptly of any change
in the number of authorized Shares or their classification and of any change in
the number of Shares registered under the 1933 Act.
7. DIVIDENDS AND DISTRIBUTIONS.
(a) The Company shall furnish the Transfer Agent with appropriate
evidence of action by the Company's Board of Directors authorizing the
declaration and payment of dividends and distributions as described in the
Prospectus. After
- 10 -
<PAGE>
deducting any amount required to be withheld by any applicable tax laws, rules
and regulations or other applicable laws, rules and regulations, the Transfer
Agent shall in accordance with the instructions in proper form from a
Shareholder and the provisions of the Company's Articles and Prospectus, issue
and credit the account of the Shareholder with Shares, or, if the Shareholder so
elects, pay such dividends to the Shareholder in the manner described in the
Prospectus. In lieu of receiving from the Company's Custodian and paying to
Shareholders cash dividends or distributions, the Transfer Agent may arrange for
the direct payment of cash dividends and distributions to Shareholders by the
Company's Custodian, in accordance with such procedures and controls as are
mutually agreed upon from time to time by and among the Company, the Transfer
Agent and the Company's Custodian.
(b) The Transfer Agent shall prepare, file with the Internal Revenue
Service and other appropriate taxing authorities, and address and mail to
Shareholders such returns and information relating to dividends and
distributions paid by the Company as are required to be so prepared, filed and
mailed by applicable laws, rules and regulations, or such substitute form of
notice as may from time to time be permitted or required by the Internal Revenue
Service. On behalf of the Company, the
- 11 -
<PAGE>
Transfer Agent shall mail certain requests for Shareholders' certifications
under penalties of perjury and pay on a timely basis to the appropriate Federal
authorities any taxes to be withheld on dividends and distributions paid by the
Company, all as required by applicable Federal tax laws and regulations.
In accordance with the Prospectus and such procedures and controls
as are mutually agreed upon from time to time by and among the Company, the
Transfer Agent and the Company's Custodian, the Transfer Agent shall (a) arrange
for issuance of Shares obtained through (1) transfers of funds from
Shareholders' accounts at financial institutions, (2) a Pre-Authorized Check
Plan, if any, and (3) a Right of Accumulation, if any; (b) arrange for the
exchange of Shares for shares of such other funds designated by the Company from
time to time; and (c) arrange for systematic withdrawals from the account of a
Shareholder participating in the Systematic Withdrawal Plan, if any.
8. COMMUNICATIONS WITH SHAREHOLDERS.
(a) COMMUNICATIONS TO SHAREHOLDERS. The Transfer Agent will address
and mail all communications by the Company to its Shareholders, including
reports to Shareholders, confirmations of purchases and sales of Company Shares,
monthly statements, dividend and distribution notices and proxy material for its
meetings of Shareholders. The Transfer Agent will
- 12 -
<PAGE>
receive and tabulate the proxy cards for the meetings of the Company's
Shareholders.
(b) CORRESPONDENCE. The Transfer Agent will answer such
correspondence from Shareholders, securities brokers and others relating to its
duties hereunder and such other correspondence as may from time to time be
mutually agreed upon between the Transfer Agent and the Company.
9. RECORDS. The Transfer Agent shall maintain records of the accounts
for each Shareholder showing the following information:
(a) name, address and United States Tax Identification oor Social
Security number;
(b) number and class of Shares held and number and class of Shares
for which certificates, if any, have been issued, including certificate numbers
and denominations;
(c) historical information regarding the account of each
Shareholder, including dividends and distributions paid and the date and price
for all transactions on a Shareholder's account;
(d) any stop or restraining order placed against a Shareholder's
account;
(e) any correspondence relating to the current maintenance of a
Shareholder's account;
- 13 -
<PAGE>
(f) information with respect to withholdings; and
(g) any information required in order for the Transfer Agent to
perform any calculations contemplated or required by this Agreement.
The books and records pertaining to the Company which are in the
possession of the Transfer Agent shall be the property of the Company. Such
books and records shall be prepared and maintained as required by the 1940 Act
and other applicable securities laws and rules and regulations. The Company, or
the Company's authorized representatives, shall have access to such books and
records at all times during the Transfer Agent's normal business hours. Upon the
reasonable request of the Company, copies of any such books and records shall be
provided by the Transfer Agent to the Company or the Company's authorized
representative at the Company's expense.
10. ONGOING FUNCTIONS. The Transfer Agent will perform the following
functions on an ongoing basis:
(a) furnish state-by-state registration and sales reports to the
Administrator;
(b) calculate Account Executive load or compensation payment and
provide such information to the Company, if any;
(c) calculate dealer commissions for the Company, if any;
- 14 -
<PAGE>
(d) provide toll-free lines for direct Shareholder use, plus
customer liaison staff with on-line inquiry capacity;
(e) mail duplicate confirmations to dealers of their clients'
activity, whether executed through the dealer or
directly with the Transfer Agent, if any;
(f) provide detail for underwriter or broker confirmations and other
participating dealer Shareholder accounting, in accordance with such procedures
as may be agreed upon between the Company and the Transfer Agent, if any;
(g) provide Shareholder lists and statistical information concerning
accounts to the Company; and
(h) provide timely notification of Company activity and such other
information as may be agreed upon from time to time between the Transfer Agent
and the Custodian, to the Company or the Custodian.
11. COOPERATION WITH ACCOUNTANTS. The Transfer Agent shall cooperate
with the Company's independent public accountants and shall take all reasonable
action in the performance of its obligations under this Agreement to assure that
the necessary information is made available to such accountants for the
expression of their opinion as such may be required by the Company from time to
time.
- 15 -
<PAGE>
12. CONFIDENTIALITY. The Transfer Agent agrees on behalf of itself and
its employees to treat confidentially all records and other information relative
to the Company and its prior, present or potential Shareholders and relative to
Equitable Securities Corporation and its prior, present or potential customers,
except, after prior notification to and approval in writing by the Company,
Equitable Securities Corporation, which approval shall not be unreasonably
withheld and may not be withheld where the Transfer Agent may be exposed to
civil or criminal contempt proceedings for failure to comply, when requested to
divulge such information by duly constituted authorities, or when so requested
by the Company or Equitable Securities Corporation as appropriate.
13. EQUIPMENT FAILURES. In the event of equipment failures beyond the
Transfer Agent's control, the Transfer Agent shall, at no additional expense to
the Company, take reasonable steps to minimize service interruptions but shall
have no liability with respect thereto. The foregoing obligation shall not
extend to computer terminals located outside of premises maintained by the
Transfer Agent. The Transfer Agent shall enter into and shall maintain in effect
with appropriate parties one or more agreements making reasonable provision for
emergency use of
- 16 -
<PAGE>
electronic data processing equipment to the extent appropriate equipment is
available.
14. RIGHT TO RECEIVE ADVICE.
(a) ADVICE OF COMPANY. If the Transfer Agent shall be in doubt as to
any action to be taken or omitted by it, it may request, and shall receive, from
the Company directions or advice, including Oral or Written Instructions where
appropriate.
(b) ADVICE OF COUNSEL. If the Transfer Agent shall be in doubt as to
any question of law involved in any action to be taken or omitted by the
Transfer Agent, it may request advice at its own cost from counsel of its own
choosing (who may be counsel for Equitable Securities Corporation, the Company
or the Transfer Agent at the option of the Transfer Agent).
(c) CONFLICTING ADVICE. In case of conflict between directions,
advice or Oral or Written Instructions received by the Transfer Agent pursuant
to subparagraph (a) of this Paragraph and advice received by the Transfer Agent
pursuant to subparagraph (b) of this Paragraph, the Transfer Agent shall be
entitled to rely on and follow the advice received pursuant to the latter
provision alone.
(d) PROTECTION OF THE TRANSFER AGENT. The Transfer Agent shall be
protected in any action or inaction which it takes in reliance on any
directions, advice or Oral or Written
- 17 -
<PAGE>
Instructions received pursuant to subparagraphs (a) or (b) of this Paragraph
which the Transfer Agent, after receipt of any such directions, advice or Oral
or Written Instructions, in good faith believes to be consistent with such
directions, advice or Oral or Written Instructions, as the case may be. However,
nothing in this Paragraph shall be construed as imposing upon the Transfer Agent
any obligation (i) to seek such directions, advice or Oral or Written
Instructions, or (ii) to act in accordance with such directions, advice or Oral
or Written Instructions when received, unless, under the terms of another
provision of this Agreement, the same is a condition to the Transfer Agent's
properly taking or omitting to take such action. Nothing in this subparagraph
shall excuse the Transfer Agent when an action or omission on the part of the
Transfer Agent constitutes willful misfeasance, bad faith, gross negligence or
reckless disregard by the Transfer Agent of its duties and obligations under
this Agreement.
15. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS. The Transfer
Agent undertakes to comply with all applicable requirements of the 1933 Act, the
Securities Exchange Act of 1934, as amended (the "1934 Act"), the 1940 Act, the
CEA, and any laws, rules and regulations of governmental authorities having
jurisdiction.
- 18 -
<PAGE>
16. COMPENSATION. As compensation for the services rendered by the
Transfer Agent during the term of this Agreement, the Company will pay to the
Transfer Agent monthly fees plus certain of the Transfer Agent's expenses
relating to such services, as shall be agreed to from time to time by the
Company and the Transfer Agent. The Company and the Transfer Agent have
initially agreed to the compensation set forth on Exhibit A attached hereto.
17. INDEMNIFICATION. The Company agrees to indemnify and hold harmless
the Transfer Agent and its nominees and sub-contractors from all taxes, charges,
expenses, assessments, claims and liabilities (including, without limitation,
liabilities arising under the 1933 Act, the 1934 Act, the 1940 Act, the CEA, and
any state and foreign securities and blue sky laws, all as or to be amended from
time to time) and expenses, including attorneys' fees and disbursements (as long
as such attorney has been retained with the consent of the Company, which
consent shall not be unreasonably withheld), arising directly or indirectly from
any action or thing which the Transfer Agent takes or does or omits to take or
do (i) at the request or on the direction of or in reliance on the advice of the
Company or (ii) upon Oral or Written Instructions, PROVIDED, that neither the
Transfer Agent nor any of its nominees or sub-contractors shall
- 19 -
<PAGE>
be indemnified against any liability to the Company or to its Shareholders (or
any expenses incident to such liability) arising out of the Transfer Agent's or
such nominee's or such sub-contractor's own willful misfeasance, bad faith or
negligence or reckless disregard of its duties in connection with the
performance of its duties and obligations specifically described in this
Agreement. In order that the indemnification provision contained in this
Paragraph 17 shall apply, it is understood that if in any case the Company may
be asked to indemnify or save the Transfer Agent harmless, the Company shall be
fully and promptly advised of all pertinent facts concerning the situation in
question, and it is further understood that the Transfer Agent will use all
reasonable care to identify and notify the Company promptly concerning any
situation which presents or appears likely to present the probability of such a
claim for indemnification against the Company. The Company shall have the option
to defend the Transfer Agent against any claim which may be the subject of this
indemnification and, in the event that the Company so elects, it will so notify
the Transfer Agent and thereupon the Company shall take over complete defense
for the claim, and the Transfer Agent shall in such situation incur no further
legal or other expenses for which it shall seek indemnification under this
Paragraph 17. The Transfer Agent
- 20 -
<PAGE>
shall in no case confess any claim or make any compromise or settlement in any
case in which the Company will be asked to indemnify the Transfer Agent, except
with the Company's prior written consent.
18. RESPONSIBILITY OF THE TRANSFER AGENT. The Transfer Agent shall be
under no duty to take any action on behalf of the Company except as specifically
set forth herein or as may be specifically agreed to by the Transfer Agent in
writing. In the performance of its duties hereunder, the Transfer Agent shall be
obligated to exercise care and diligence and to act in good faith and to use its
best efforts within reasonable limits to insure the accuracy and completeness of
all services performed under this Agreement. The Transfer Agent shall be
responsible for and shall hold the Company harmless from all loss, cost, damage
and expense, including reasonable attorney fees (as long as such attorney has
been retained with the consent of the Transfer Agent, which consent shall not be
unreasonably withheld), incurred by it resulting from any claim, demand, action
or suit arising out of the Transfer Agent's own negligent failure to perform its
duties under this Agreement. In order that the indemnification provision
contained in this Paragraph 18 shall apply, it is understood that if in any case
the Transfer Agent may be asked to indemnify or save the Company harmless, the
- 21 -
<PAGE>
Transfer Agent shall be fully and promptly advised of all pertinent facts
concerning the situation in question, and it is further understood that the
Company will use all reasonable care to indemnify and notify the Transfer Agent
promptly concerning any situation which presents or appears likely to present
the probability of such a claim for indemnification against the Transfer Agent.
The Transfer Agent shall have the option to defend the Company against any claim
which may be subject to this indemnification and, in the event that the Transfer
Agent so elects, it will so notify the Company and thereupon the Transfer Agent
shall take over complete defense for the claim, and the Company shall in such
situation incur no further legal or other expenses for which it shall seek
indemnification under this Paragraph 18. The Company shall in no case confess
any claim or make any compromise or settlement in any case in which the Transfer
Agent will be asked to indemnify the Company except with the Transfer Agent's
prior written consent.
To the extent that duties, obligations and responsibilities are not
expressly set forth in this Agreement, however, the Transfer Agent shall not be
liable for any act or omission which does not constitute willful misfeasance,
bad faith or gross negligence on the part of the Transfer Agent or reckless
disregard of such duties, obligations and responsibilities.
- 22 -
<PAGE>
Without limiting the generality of the foregoing or of any other provision of
this Agreement, the Transfer Agent in connection with its duties under this
Agreement shall not be under any duty or obligation to inquire into and shall
not be liable for or in respect of (a) the validity or invalidity or authority
or lack thereof of any Oral or Written Instruction, notice or other instrument
which conforms to the applicable requirements of this Agreement, if any, and
which the Transfer Agent reasonably believes to be genuine, or (b) delays or
errors or loss of data occurring by reason of circumstances beyond the Transfer
Agent's control, including acts of civil or military authority, national
emergencies, labor difficulties, fire, mechanical breakdown (except as provided
in Paragraph 13), flood or catastrophe, acts of God, insurrection, war, riots or
failure of the mails, transportation, communication or power supply.
Notwithstanding the foregoing, the Transfer Agent shall use its best efforts to
mitigate the effects of the events set forth in clause (b) above, although such
efforts shall not impute any liability thereto. The Transfer Agreement expressly
disclaims all responsibility for consequential damages, including but not
limited to any that may result from performance or non-performance of any duty
or obligation whether express or implied in this Agreement, and also
- 23 -
<PAGE>
expressly disclaims any express or implied warranty of products or services
provided in connection with this Agreement.
19. DURATION AND TERMINATION. This Agreement shall continue in effect
until two years from the date thereof and thereafter for successive annual
periods, provided that such continuance is specifically approved at least
annually (a) by the company's Board of Directors and (b) by the vote, cast in
person at a meeting called for the purpose, of the majority of the Company's
Directors who are not parties to this Agreement or "interested persons" (as
defined in the 1940 Act) of any such party. This Agreement may be terminated at
any time, without the payment of any penalty, by a vote of a majority of the
Company's outstanding voting securities (as defined in the 1940 Act) or by a
vote of a majority of the Company's entire Board of Directors on 60 days'
written notice to the Transfer Agent or by the Transfer Agent on 60 days'
written notice to the Company.
20. REGISTRATION AS A TRANSFER AGENT. The Transfer Agent represents that
it is currently registered with the appropriate federal agency for the
registration of transfer agents, and that it will remain so registered for the
duration of this Agreement. The Transfer Agent agrees that it will promptly
notify the Company in the event of any material change in its status as a
registered transfer agent. Should the Transfer Agent fail to be
- 24 -
<PAGE>
registered with the appropriate federal agency as a transfer agent at any time
during this Agreement, the Company may, on written notice to the Transfer Agent,
immediately terminate this Agreement.
21. NOTICES. All notices and other communications, including Written
Instructions (collectively referred to as "Notice" or "Notices" in this
Paragraph), hereunder shall be in writing or by confirming telegram, cable,
telex or facsimile sending device. Notices shall be addressed (a) if to the
Transfer Agent at Furman Selz Incorporated, 237 Park Avenue, New York, New York
10017, attention: John J. Pileggi; (b) if to the Company, at the address of the
Company; or (c) if to neither of the foregoing, at such other address as shall
have been notified to the sender of any such Notice or other communication. A
Notice may be sent by first-class mail, in which case it shall be deemed to have
been given five days after it is sent, or if sent by messenger, it shall be
deemed to have been given on the day it is delivered, or if sent by confirming
telegram, cable, telex or facsimile sending device, it shall be deemed to have
been given immediately. All postage, cable, telegram, telex and facsimile
sending device charges arising from the sending of a Notice hereunder shall be
paid by the sender.
- 25 -
<PAGE>
22. FURTHER ACTIONS. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.
23. AMENDMENTS. This Agreement or any part hereof may be changed or
waived only by an instrument in writing signed by the party against which
enforcement of such change or waiver is sought.
24. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
25. MISCELLANEOUS. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior agreements
and understandings relating to the subject matter hereof, PROVIDED that the
parties hereto may embody in one or more separate documents their agreement, if
any, with respect to Oral Instructions. The captions in this Agreement are
included for convenience of reference only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction or effect. If
any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby. This Agreement shall be
- 26 -
<PAGE>
binding and shall inure to the benefit of the parties hereto and their
respective successors.
26. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below on the day and year first above
written.
IBJ FUNDS Trust
Attest: ---------------------- By: ------------------------
Title:
FURMAN SELZ INCORPORATED
Attest: ---------------------- By: ------------------------
Title:
- 27 -
<PAGE>
EXHIBIT A
TRANSFER AGENCY AGREEMENT
COMPENSATION
The Transfer Agent shall receive an account maintenance fee of $15 per year for
each account which is in existence at any time during the month for which
payment is made, such fee to be paid in equal monthly installments, plus
out-of-pocket expenses. The Transfer Agent shall be entitled to this account
maintenance fee on all accounts maintained in its records during the year,
including those accounts which have a zero balance during any portion of the
year.
- 28 -
<PAGE>
INDEX
PARAGRAPH PAGE
1. Appointment..............................................................1
2. Delivery of Documents....................................................2
3. Definitions..............................................................4
4. Instructions Consistent with Articles, etc...............................5
5. Transactions Not Requiring Instructions..................................6
6. Authorized Shares........................................................9
7. Dividends and Distributions..............................................9
8. Communications with Shareholders........................................11
9. Records.................................................................12
10. Ongoing Functions.......................................................13
11. Cooperation with Accountants............................................14
12. Confidentiality.........................................................14
13. Equipment Failures......................................................14
14. Right to Receive Advice.................................................15
15. Compliance with Governmental Rules and Regulations......................16
16. Compensation............................................................17
17. Indemnification.........................................................17
18. Responsibility of the Transfer Agent....................................18
19. Duration and Termination................................................21
20. Registration as a Transfer Agent........................................22
21. Notices.................................................................22
22. Further Actions.........................................................23
- 29 -
<PAGE>
23. Amendments..............................................................23
24. Counterparts............................................................23
25. Miscellaneous...........................................................23
26. Governing Law...........................................................24
- 30 -
Exhibit 10
Opinion and Consent of Baker & McKenzie,
counsel to Registrant
<PAGE>
March 27, 1996
IBJ Funds Trust
237 Park Avenue
New York, NY 10017
RE: IBJ FUNDS TRUST
REGISTRATION NO. 33-83430
FILE NO. 811-8738
Dear Sir or Madam:
We hereby consent to the reference to our firm as Counsel in Post-Effective
Amendment No. 2 to Registration No. 33-83430.
Very truly yours,
BAKER & McKENZIE
Exhibit 11
Consent of Coopers & Lybrand L.L.P.
Independent Accountants
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in Post-Effective Amendment No. 2 to the
Registration Statement (No. 33-83430) of IBJ Funds Trust on Form N-1A of our
report dated January 12, 1996 on our audit of the financial statements and
financial highlights of the Fund.
We also consent to the reference to our firm under the captions "Financial
Highlights" in the prospectus and "Independent Accountants" and "Financial
Statements" in the Statement of Additional Information.
/s/ Coopers & Lybrand L.L.P.
---------------------------
COOPERS & LYBRAND L.L.P.
New York, New York
March 25, 1996
Exhibit 13
Subscription Agreement
<PAGE>
PURCHASE AGREEMENT
IBJ Funds Trust, a Delaware business trust (the "Company"),
and Furman Selz, Incorporated (the "Distributor"), hereby agree as follows:
1. The Company hereby offers the Distributor and the
Distributor hereby purchases the following shares, par value $.001 per share, of
each portfolio ("Fund") of the Company: 25,000 shares at $1.00 per share
representing shares in Reserve Money Market Fund, 2,500 shares at $10.00 per
share representing shares in Bond Fund, 2,500 shares at $10.00 per share
representing shares in Core Equity Fund, and 2,500 shares at $10.00 per share
representing shares in Growth and Income Fund (the "Shares"). The Distributor
hereby acknowledges receipt of a purchase confirmation reflecting the purchase
of the Shares, and the Company hereby acknowledges receipt from the Distributor
of funds in the amount of $100,000 in full payment for the Shares.
2. The Distributor represents and warrants to the Trust that
the Shares are being acquired for investment purposes and not with a view to the
distribution thereof.
3. The Distributor agrees that if it or any direct or indirect
transferee of the Shares redeems the Shares prior to the fifth anniversary of
the date the Company begins its investment activities, the Distributor will pay
to the Company an amount equal to the number resulting from multiplying each
Fund's total unamortized organizational expenses by a fraction, the numerator of
which is equal to the number of Shares redeemed by the Distributor or such
transferee and the denominator of which is equal to the number of shares of each
Fund outstanding as of the date of such redemption, as long as the
administrative position of the staff of the Securities and Exchange Commission
requires such reimbursement.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the 18th day of November, 1994.
IBJ FUNDS TRUST
Attest:
_________________________ By:_________________________
Name: Name:
Title:
FURMAN SELZ, INCORPORATED
Attest:
_________________________ By:_________________________
Name: Name:
Title:
<PAGE>
Exhibit 18
Form of Rule 18f-3 Plan
<PAGE>
IBJ FUNDS TRUST
RULE 18F-3 PLAN
RULE 18F-3
Pursuant to Rule 18f-3 ("Rule 18f-3") of the Investment Company Act
of 1940, as amended (the "Act"), an open end investment company whose shares are
registered on Form N-1A may issue more than one class of voting stock
(hereinafter referred to as "shares"), provided that such multiple classes of
shares differ either in the manner of distribution, or in services they provide
to shareholders, or both. IBJ Funds Trust (the "Trust"), a registered open-end
investment management company whose shares are registered on Form N-1A,
consisting of the Reserve Money Market Fund, The Bond Fund, The Core Equity
Fund, The Growth and Income Fund and any future fund or series created by the
Trust (collectively, the "Funds"), may offer to shareholders multiple classes of
shares in the Funds in accordance with the Rule 18f-3 and this Rule 18f-3 Plan
(or as amended) as described herein, upon approval of the Board of Trustees of
the Trust.
AUTHORIZED CLASSES
Each Fund may issue two classes of shares - the Service Class and the
Premium Class (collectively, the "Classes" and individually, a "Class"). The
Service Class may only be purchased by certain institutional investors, or other
investors who at the time of purchase have a balance of $25,000 or more invested
in any of the IBJ Funds, are purchasers through a trust investment manager or
account manager or administered by the Adviser, are employees or ex-employees of
IBJS or any of its affiliates, Furman Selz Incorporated, or any other service
provider or employees of any trust customer of IBJS or any of its affiliates.
The Service Class will not be offered subject to a sales load or in connection
with any 12b-1 Plan or shareholder servicing fee.
The Premium Class shares will be issued to all investors purchasing
shares of the Funds who do not qualify as Service Class Investors. The Premium
Class will be offered to investors subject to up to 0.35% Rule 12b-1 Plan
distribution fees adopted pursuant to a Rule 12b-1 Distribution Plan (the "12b-1
Plan") and shareholder servicing fees of up to 0.50%.
The Classes of shares issued by any Fund will be identical in all
respects except for Class designation, allocation of certain expenses directly
related to the distribution and/or service arrangement for a Class, and voting
rights with respect to the 12b-1 Plan for the Premium Class. Shares of both
Classes will represent interests in the same investment portfolio therefore,
each Class is subject to the same investment objectives, policies and
limitations.
<PAGE>
CLASS EXPENSES
Each Class of shares shall bear expenses, not including advisory or
custodial fees or other expenses related to the management of the Fund's assets,
that are directly attributable to the kind or degree of services rendered to
that Class ("Class Expenses"). Class Expenses, including the investment advisory
fee or the fee of other service providers, may be waived or reimbursed by the
Fund's investment adviser, underwriter or any other provider of services to the
Fund.
EXCHANGES AND CONVERSION PRIVILEGES
None of the Funds may offer exchange and conversion features between
the Classes unless otherwise approved by the Board of Trustees of the Trust.
<PAGE>
Exhibit 27
Financial Data Schedules
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 011
<NAME> IBJ RESERVE MONEY MARKET FUND - PREMIUM CLASS
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 10-MOS
<FISCAL-YEAR-END> NOV-30-1995
<PERIOD-END> NOV-30-1995
<INVESTMENTS-AT-COST> 28675
<INVESTMENTS-AT-VALUE> 28675
<RECEIVABLES> 49
<ASSETS-OTHER> 285
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 29009
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 53
<TOTAL-LIABILITIES> 53
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 28930
<SHARES-COMMON-STOCK> 13
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (3)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 13
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1262
<OTHER-INCOME> 0
<EXPENSES-NET> 135
<NET-INVESTMENT-INCOME> 1127
<REALIZED-GAINS-CURRENT> (3)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 1124
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 1
<NET-CHANGE-IN-ASSETS> 1
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 75
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 194
<AVERAGE-NET-ASSETS> 13
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .04
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> .04
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .64
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 012
<NAME> IBJ RESERVE MONEY MARKET FUND - SERVICE CLASS
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 10-MOS
<FISCAL-YEAR-END> NOV-30-1995
<PERIOD-END> NOV-30-1995
<INVESTMENTS-AT-COST> 28675
<INVESTMENTS-AT-VALUE> 28675
<RECEIVABLES> 49
<ASSETS-OTHER> 285
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 29009
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 53
<TOTAL-LIABILITIES> 53
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 28930
<SHARES-COMMON-STOCK> 28946
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (3)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 28943
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1262
<OTHER-INCOME> 0
<EXPENSES-NET> 135
<NET-INVESTMENT-INCOME> 1127
<REALIZED-GAINS-CURRENT> (3)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 1124
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1126
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 66759
<NUMBER-OF-SHARES-REDEEMED> 38953
<SHARES-REINVESTED> 1127
<NET-CHANGE-IN-ASSETS> 26836
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 75
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 194
<AVERAGE-NET-ASSETS> 25387
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .04
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> .04
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .64
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 021
<NAME> IBJ BOND FUND - PREMIUM CLASS
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 10-MOS
<FISCAL-YEAR-END> NOV-30-1995
<PERIOD-END> NOV-30-1995
<INVESTMENTS-AT-COST> 25992
<INVESTMENTS-AT-VALUE> 26714
<RECEIVABLES> 709
<ASSETS-OTHER> 31
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 27454
<PAYABLE-FOR-SECURITIES> 514
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 77
<TOTAL-LIABILITIES> 591
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 25184
<SHARES-COMMON-STOCK> 1
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 955
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 722
<NET-ASSETS> 14
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1307
<OTHER-INCOME> 0
<EXPENSES-NET> 219
<NET-INVESTMENT-INCOME> 1088
<REALIZED-GAINS-CURRENT> 955
<APPREC-INCREASE-CURRENT> 722
<NET-CHANGE-FROM-OPS> 2765
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 2
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 97
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 238
<AVERAGE-NET-ASSETS> 13
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> .48
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> .72
<PER-SHARE-DISTRIBUTIONS> .48
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.72
<EXPENSE-RATIO> 1.12
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 022
<NAME> IBJ BOND FUND - SERVICE CLASS
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 10-MOS
<FISCAL-YEAR-END> NOV-30-1995
<PERIOD-END> NOV-30-1995
<INVESTMENTS-AT-COST> 25992
<INVESTMENTS-AT-VALUE> 26714
<RECEIVABLES> 709
<ASSETS-OTHER> 31
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 27454
<PAYABLE-FOR-SECURITIES> 514
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 77
<TOTAL-LIABILITIES> 591
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 25184
<SHARES-COMMON-STOCK> 2505
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 955
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 722
<NET-ASSETS> 26849
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1307
<OTHER-INCOME> 0
<EXPENSES-NET> 219
<NET-INVESTMENT-INCOME> 1088
<REALIZED-GAINS-CURRENT> 955
<APPREC-INCREASE-CURRENT> 722
<NET-CHANGE-FROM-OPS> 2765
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1087
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2930
<NUMBER-OF-SHARES-REDEEMED> 530
<SHARES-REINVESTED> 104
<NET-CHANGE-IN-ASSETS> 26836
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 97
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 238
<AVERAGE-NET-ASSETS> 23424
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> .48
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> .72
<PER-SHARE-DISTRIBUTIONS> .48
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.72
<EXPENSE-RATIO> 1.12
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 031
<NAME> IBJ CORE EQUITY FUND - PREMIUM CLASS
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 10-MOS
<FISCAL-YEAR-END> NOV-30-1995
<PERIOD-END> NOV-30-1995
<INVESTMENTS-AT-COST> 70307
<INVESTMENTS-AT-VALUE> 86644
<RECEIVABLES> 273
<ASSETS-OTHER> 36
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 86953
<PAYABLE-FOR-SECURITIES> 182
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 158
<TOTAL-LIABILITIES> 340
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 66374
<SHARES-COMMON-STOCK> 1
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 840
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3055
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 16337
<NET-ASSETS> 16
<DIVIDEND-INCOME> 1247
<INTEREST-INCOME> 168
<OTHER-INCOME> 0
<EXPENSES-NET> 575
<NET-INVESTMENT-INCOME> 840
<REALIZED-GAINS-CURRENT> 3055
<APPREC-INCREASE-CURRENT> 16337
<NET-CHANGE-FROM-OPS> 20232
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 4
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 388
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 640
<AVERAGE-NET-ASSETS> 14
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> .13
<PER-SHARE-GAIN-APPREC> 2.84
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.97
<EXPENSE-RATIO> .89
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 032
<NAME> IBJ CORE EQUITY FUND - SERVICE CLASS
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 10-MOS
<FISCAL-YEAR-END> NOV-30-1995
<PERIOD-END> NOV-30-1995
<INVESTMENTS-AT-COST> 70307
<INVESTMENTS-AT-VALUE> 86644
<RECEIVABLES> 273
<ASSETS-OTHER> 36
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 86953
<PAYABLE-FOR-SECURITIES> 182
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 158
<TOTAL-LIABILITIES> 340
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 66372
<SHARES-COMMON-STOCK> 6675
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 840
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3055
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 16337
<NET-ASSETS> 86596
<DIVIDEND-INCOME> 1247
<INTEREST-INCOME> 168
<OTHER-INCOME> 0
<EXPENSES-NET> 575
<NET-INVESTMENT-INCOME> 840
<REALIZED-GAINS-CURRENT> 3055
<APPREC-INCREASE-CURRENT> 16337
<NET-CHANGE-FROM-OPS> 20232
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 8685
<NUMBER-OF-SHARES-REDEEMED> 2011
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 86584
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 388
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 640
<AVERAGE-NET-ASSETS> 14
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> .13
<PER-SHARE-GAIN-APPREC> 2.84
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.97
<EXPENSE-RATIO> .89
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 041
<NAME> IBJ GROWTH & INCOME FUND - PREMIUM CLASS
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 10-MOS
<FISCAL-YEAR-END> NOV-30-1995
<PERIOD-END> NOV-30-1995
<INVESTMENTS-AT-COST> 44749
<INVESTMENTS-AT-VALUE> 50478
<RECEIVABLES> 673
<ASSETS-OTHER> 33
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 51184
<PAYABLE-FOR-SECURITIES> 443
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 142
<TOTAL-LIABILITIES> 585
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 43704
<SHARES-COMMON-STOCK> 1
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 13
<ACCUMULATED-NET-GAINS> 1173
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 5729
<NET-ASSETS> 15
<DIVIDEND-INCOME> 383
<INTEREST-INCOME> 1081
<OTHER-INCOME> 0
<EXPENSES-NET> 374
<NET-INVESTMENT-INCOME> 1090
<REALIZED-GAINS-CURRENT> 1173
<APPREC-INCREASE-CURRENT> 5729
<NET-CHANGE-FROM-OPS> 7992
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 3
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 214
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 410
<AVERAGE-NET-ASSETS> 14
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> .27
<PER-SHARE-GAIN-APPREC> 1.79
<PER-SHARE-DIVIDEND> .28
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.78
<EXPENSE-RATIO> 1.04
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 042
<NAME> IBJ GROWTH & INCOME FUND - SERVICE CLASS
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 10-MOS
<FISCAL-YEAR-END> NOV-30-1995
<PERIOD-END> NOV-30-1995
<INVESTMENTS-AT-COST> 44749
<INVESTMENTS-AT-VALUE> 50478
<RECEIVABLES> 673
<ASSETS-OTHER> 33
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 51184
<PAYABLE-FOR-SECURITIES> 443
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 142
<TOTAL-LIABILITIES> 585
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 43704
<SHARES-COMMON-STOCK> 4292
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 13
<ACCUMULATED-NET-GAINS> 1173
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 5729
<NET-ASSETS> 50583
<DIVIDEND-INCOME> 383
<INTEREST-INCOME> 1081
<OTHER-INCOME> 0
<EXPENSES-NET> 374
<NET-INVESTMENT-INCOME> 1090
<REALIZED-GAINS-CURRENT> 1173
<APPREC-INCREASE-CURRENT> 5729
<NET-CHANGE-FROM-OPS> 7992
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1102
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4762
<NUMBER-OF-SHARES-REDEEMED> 569
<SHARES-REINVESTED> 98
<NET-CHANGE-IN-ASSETS> 50570
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 214
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 410
<AVERAGE-NET-ASSETS> 43117
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> .31
<PER-SHARE-GAIN-APPREC> 1.79
<PER-SHARE-DIVIDEND> .31
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.79
<EXPENSE-RATIO> 1.05
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
Other Exhibits
<PAGE>
POWER OF ATTORNEY
We, the undersigned Trustees of IBJ Funds Trust (the "Funds"),
an open-ended, diversified, management investment company, organized as a
Delaware business trust, do hereby constitute and appoint John J. Pileggi, Joan
V. Fiore, Steven R. Howard and Scott MacLeod and each of them individually, our
true and lawful attorneys and agents to take any and all action and execute any
and all instruments which said attorneys and agents may deem necessary or
advisable to enable the Funds to comply with:
(i) The Securities Act of 1933, as amended, and any
rules, regulations, orders or other requirements of
the Securities and Exchange Commission thereunder, in
connection with the registration under such
Securities Act of 1933, as amended, of shares of
beneficial interest of the Funds to be offered by the
Funds;
(ii) the Investment Company Act of 1940, as amended,
and any rules, regulations, orders or other
requirements of the Securities and Exchange
Commission thereunder, in connection with the
registration of the Funds under the Investment
Company Act of 1940, as amended; and
(iii) state securities laws and any rules,
regulations, orders or other requirements of state
securities commissions, in connection with the
registration under state securities laws of the Funds
and with the registration under state securities laws
of shares of beneficial interest of the Fund to be
offered by the Funds;
including specifically, but without limitation of the foregoing, power and
authority to sign the name of the Funds in its behalf and to affix its seal, and
to sign the name of such Trustee in his behalf as such Trustee to any amendment
or supplement (including post-effective amendments) to the registration
statement or statements filed with the Securities and Exchange Commission under
such Securities Act of 1933, as amended, and to execute any instruments or
documents filed or to be filed as part of or in connection with such
registration statement or statements, and to execute any instruments or
documents filed or to be filed as a part of or in connection with compliance
with state securities laws, including, but not limited to, all state filings for
any purpose, state filings in connection with corporate or trust organization or
amending corporate or trust documentation, filings for purposes of amending
corporate or trust documentation, filings for purposes of state tax laws and
filings in connection with blue sky regulations; and the undersigned hereby
ratifies and confirms all that said attorneys and agents shall do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned place their hands as of
this 18th day of November, 1994.
----------------------
George H. Stewart
----------------------
Edward F. Ryan
----------------------
Stephen V.R. Goodhue
