As Filed with the Securities and Exchange Commission on April 16, 1997
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. 4 /X/
Pre-Effective Amendment No. / /
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 /X/
Amendment No. 6 /X/
--------------
IBJ Funds Trust
(Exact Name of Registrant as Specified in Charter)
3435 Stelzer Road
Columbus, Ohio 43219
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (800) 557-3768
George Martinez, Esq.
3435 Stelzer Road
Columbus, Ohio 43219
(Name and Address of Agent for Service)
Copy to:
Scott MacLeod, Esq.
Baker & McKenzie
805 Third Avenue
New York, New York 10022
---------------------
It is proposed that this filing will become effective (check appropriate
box):
____immediately upon filing pursuant to paragraph (b)
____ on March 28, 1997 pursuant to paragraph (b)
_X__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 28, 1997.
================================================================================
<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
CORE FIXED INCOME FUND
CORE EQUITY FUND
BLENDED TOTAL RETURN 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
CORE FIXED INCOME FUND
CORE EQUITY FUND
BLENDED TOTAL RETURN 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
CORE FIXED INCOME FUND
CORE EQUITY FUND
BLENDED TOTAL RETURN FUND
Statement of Additional
Part B 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
- v -
<PAGE>
Item 21. Underwriters........................... Management
Item 22. Calculation of Performance
Data................................. Yield and Performance
Information
Item 23. Financial Statements................... Financial Statements
- vi -
<PAGE>
IBJ FUNDS TRUST
Blended Total Return Fund (formerly the Growth and Income Fund) (the "Fund")
Supplement Dated March 28, 1997 to Prospectus Dated March 28, 1997
The following is a supplement to the Fund's Prospectus dated March 28,
1997. The supplement should be read in conjunction with the Prospectus.
Prior to June 15, 1997, with respect to the Blended Total Return Fund 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. Following June 15, 1997, the Blended Total
Return Fund will follow the credit quality standards described in the prospectus
to which this supplement relates.
This supplement should be discarded following June 15, 1997.
<PAGE>
IBJ FUNDS TRUST
3435 Stelzer Road
Columbus, Ohio 43219
- --------------------------------------------------------------------------------
GENERAL AND ACCOUNT INFORMATION: (800) 99-IBJFD
- --------------------------------------------------------------------------------
SERVICE CLASS PROSPECTUS
IBJ SCHRODER BANK & TRUST COMPANY--INVESTMENT ADVISER
("IBJS" OR THE "ADVISER")
BISYS FUND SERVICES LIMITED
PARTNERSHIP--ADMINISTRATOR
AND SPONSOR ("ADMINISTRATOR"
OR "SPONSOR") 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 CORE FIXED INCOME FUND (FORMERLY, 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 BLENDED TOTAL RETURN FUND (FORMERLY, 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 28, 1997,
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 28, 1997.
<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 .................................................. 15
Pricing and Purchase of Fund Shares ................................... 16
Minimum Purchase Requirements ......................................... 17
Individual Retirement Accounts ........................................ 17
Exchange of Fund Shares ............................................... 17
Redemption of Fund Shares ............................................. 18
Dividends, Distributions and Federal Income Tax ....................... 20
Investment Restrictions ............................................... 22
Risks of Investing in the Funds ....................................... 22
Other Information ..................................................... 23
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; or (3) are unrated, but are determined to
be of comparable quality by the Adviser pursuant to guidelines approved 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
exceed 90 days. See "Determination of Net Asset Value" in the SAI for an
explanation of the amortized cost valuation method.
1
<PAGE>
NON-MONEY MARKET FUNDS:
CORE FIXED INCOME FUND. The investment objective of the Core Fixed Income
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.
BLENDED TOTAL RETURN FUND. The objective of the Blended Total Return 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. The Fund is permitted to invest in below-investment grade
(high-yield) bonds, but will always maintain an investment grade weighted
average rating on the fixed income portion of the portfolio. 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 total 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 BLENDED TOTAL RETURN FUND
Under certain market conditions, both the Core Equity Fund and the Blended
Total Return 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.
BISYS Fund Services Limited Partnership acts as administrator and sponsor
to the Funds. For its services, BISYS Fund Services Limited Partnership 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 "GOOD ORDER" PRIOR TO 4:00 P.M., EASTERN
TIME, AND TRANSMITTED TO THE DISTRIBUTOR PRIOR TO 4:00 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 Blended Total Return 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 fiscal year ended November 30, 1996. 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 CORE BLENDED
MONEY FIXED CORE TOTAL
MARKET INCOME EQUITY RETURN
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).......................... 0.00% 0.40% 0.50% 0.50%
12b-1 Fees............................................... None None None None
Other Expenses+ ......................................... 0.65% 0.72% 0.39% 0.49%
---- ---- ---- ----
Total Portfolio Operating Expenses (after waiver)1,2 .... 0.65% 1.12% 0.89% 0.99%
==== ==== ==== ====
</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 Fixed Income Fund, the Core Equity Fund and the
Blended Total Return 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 Fixed Income Fund, the Core Equity Fund and the Blended Total
Return Fund are 1.00%, 1.22%, 0.99% and 1.09%, 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 CORE BLENDED
MONEY FIXED CORE TOTAL
MARKET INCOME EQUITY RETURN
FUND FUND FUND FUND
------ ---- ---- ----
1 year .............................. $ 7 $ 11 $ 9 $ 10
3 years ............................. $ 21 $ 36 $ 28 $ 32
5 years ............................. $ 36 $ 62 $ 49 $ 55
10 years ............................ $ 81 $136 $110 $121
- -----------
* 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, 1996. The financial highlights for the periods indicated
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 CORE FIXED INCOME
MARKET FUND FUND
------------------------------- -------------------------------
FOR THE YEAR FOR THE PERIOD FOR THE YEAR FOR THE PERIOD
ENDED FEBRUARY 1, 1995** ENDED FEBRUARY 1, 1995**
NOVEMBER 30, TO NOVEMBER 30, NOVEMBER 30, TO NOVEMBER 30,
1996 1995 1996 1995
------------- ----------------- ------------ -----------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period....... $1.00 $1.00 $10.72 $10.00
----- ----- ------ ------
Income from Investment Operations:
Net investment income..................... 0.05 0.04 0.54 0.48
Net realized and unrealized
gain/(loss) on investments.............. 0.00 0.00 (0.12) 0.72
----- ----- ------ ------
Total from Investment Operations.......... 0.05 0.04 0.42 1.20
Less Distributions:
Dividends from net investment income...... (0.05) (0.04) (0.54) (0.48)
Distributions from net realized
capital gains............................. -- -- (0.38) --
----- ----- ------ ------
Total Distributions......................... (0.05) (0.04) (0.92) (0.48)
Net Asset Value, End of Period.............. $1.00 $1.00 $10.22 $10.72
===== ===== ====== ======
Total Return................................ 4.88% 4.55% 4.25% 12.28%
Net Assets, End of Period (in thousands).... $34,269 $28,943 $27,768 $26,849
Ratios to average net assets of:
Net investment income..................... 4.82% 5.40%* 5.07% 5.59%*
Expenses before waivers/reimbursements.... 0.95%* 0.92%* 1.22%* 1.22%*
Expenses net waivers/reimbursements....... 0.65%* 0.64%* 1.12%* 1.12%*
Portfolio Turnover Rate..................... N/A N/A 160% 297%
Average Commission Rate..................... -- -- -- --
</TABLE>
<TABLE>
<CAPTION>
CORE EQUITY FUND BLENDED TOTAL RETURN FUND
------------------------------ -------------------------------
FOR THE YEAR FOR THE PERIOD FOR THE YEAR FOR THE PERIOD
ENDED FEBRUARY 1, 1995** EMDED FEBRUARY 1, 1995**
NOVEMBER 30, TO NOVEMBER 30, NOVEMBER 30, TO NOVEMBER 30,
1996 1995 1996 1995
------------- ---------------- -------------- ----------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period....... $12.97 $10.00 $11.79 $10.00
------ ------ ------ ------
Income from Investment Operations:
Net investment income..................... 0.14 0.13 0.34 0.31
Net realized and unrealized
gain/(loss) on investments.............. 2.90 2.84 1.26 1.79
------ ------ ------ ------
Total from Investment Operations.......... 3.04 2.97 1.60 2.10
Less Distributions:
Dividends from net investment income...... (0.19) 0.00 (0.36) (0.31)
Distributions from net realized
capital gains............................. (0.45) -- (0.27) --
------ ------ ------ ------
Total Distributions......................... (0.64) -- (0.63) (0.31)
Net Asset Value, End of Period.............. $15.37 $12.97 $12.76 $11.79
====== ====== ====== ======
Total Return................................ 24.61% 29.70% 14.08% 20.82%
Net Assets, End of Period (in thousands).... $93,640 $86,596 $64,232 $50,583
Ratios to average net assets of:
Net investment income..................... 0.93% 1.29%* 2.98% 3.04%*
Expenses before waivers/reimbursements.... 0.99% 0.99%* 1.09% 1.15%*
Expenses net waivers/reimbursements....... 0.89% 0.89%* .99% 1.05%*
Portfolio Turnover Rate..................... 27% 37% 77% 78%
Average Commission Rate..................... $0.0776 -- $0.0789 --
</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.
** Commencement of Operations.
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 Core Fixed Income 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 Blended Total Return 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
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.
8
<PAGE>
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. A rise in interest rates will also likely increase
inherent volatility of these securities as lower than estimated prepayment rates
will alter the expected life of the securities to effectively convert short-term
investments into long-term investments.
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 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
9
<PAGE>
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 (CORE FIXED INCOME FUND, CORE EQUITY FUND AND BLENDED TOTAL
RETURN 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 (CORE FIXED INCOME FUND, CORE EQUITY FUND AND BLENDED
TOTAL RETURN 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 (CORE FIXED INCOME FUND, CORE EQUITY FUND AND
BLENDED TOTAL RETURN 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
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
10
<PAGE>
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. These investments must be U.S.
dollar-denominated with respect to the Reserve Money Market Fund.
CONVERTIBLE AND EXCHANGEABLE SECURITIES (CORE FIXED INCOME FUND, CORE
EQUITY FUND AND BLENDED TOTAL RETURN 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
net assets of the Non-Money Market Funds and 10% of the value of the net 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
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.
11
<PAGE>
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 generally 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
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 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.
12
<PAGE>
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: Core Fixed Income Fund, 350%; Core Equity Fund, 200%; Blended Total
Return 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%;
Core Fixed Income Fund, 0.50%; Core Equity Fund, 0.60%;
and Blended Total Return Fund, 0.60%.
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 and the Core
Fixed Income Fund. 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 Core Equity Fund. Mr. Kaefer has been with IBJS
since 1987 and was previously with Schroder Capital
Management International from 1982 to 1987. James
O'Mealia, Senior Portfolio Manager, has been affiliated
with IBJS since October, 1996 and is responsible for the
day-to-day management of the Blended Total Return Fund.
Mr. O'Mealia was the Vice President in charge of New
York Life Insurance Company's equity and high yield
investments from 1989 to 1994, was Chief Operating
Officer for McGlinn Capital Management in Wyomissing, PA
from 1994 to 1995, and has served as the President of
Sunnymeath Asset Management, Inc. since February, 1996.
13
<PAGE>
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, 1996, included accounts with aggregate assets of
approximately $2.0 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
IBJ Funds Distributor, Inc. acts as Sponsor of the Funds. IBJ Funds
Distributor, Inc. is an affiliate of the Administrator of the Funds, BISYS Fund
Services Limited Partnership d/b/a BISYS Fund Services (the "Administrator").
BISYS Fund Services and its affiliated companies, including BISYS Funds
Services, Inc. are wholly owned by BISYS Group, Inc. ("BISYS"). BISYS,
headquartered in Little Falls, New Jersey, supports more than 5,000 financial
institutions and corporate clients through two strategic business units. BISYS
Information Services Group provides image and data processing outsourcing, and
pricing analysis to more than 600 banks nationwide. BISYS Investment Services
Group designs, administers and distributes over 60 families of proprietary
mutual funds consisting of more than 430 portfolios, and provides 401(k)
marketing support, administration, and recordkeeping services in partnership
with banking institutions and investment management companies. BISYS and its
affiliates BISYS Fund Services and BISYS Fund Services, Inc. have their
principal place of business at 3435 Stelzer Road, Columbus, Ohio 43219. IBJ
Funds Distributor, Inc. has its principal place of business at 125 West 55th
Street, New York, New York 10019.
ADMINISTRATIVE SERVICES
The Funds have also entered into an Administration Agreement with BISYS
Fund Services pursuant to which BISYS Fund Services 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, BISYS Fund Services 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 Transfer Agency Agreement between the Trust and BISYS Fund
Services, Inc., BISYS Fund Services, Inc. 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 BISYS Fund Services, Inc., BISYS Fund Services,
Inc. 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.
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OTHER EXPENSES
Each Fund bears all costs of its operations other than expenses
specifically assumed by BISYS, its affiliates 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 4:00 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 any
BISYS affiliate, 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.
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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 in "good order".
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. BISYS Fund Services,
Inc. 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. No third party or foreign checks
will be accepted.
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 "good 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 4:00 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
OTHER PURCHASE INFORMATION. Requests in "good order" must include the
following documentation : (a) A letter of instruction, if required, signed by
all registered owners of the shares in the exact names in which they are
registered; (b) Any required signature guarantees (see "Signature Guarantees"
below); and (c) Other supporting legal documents, if required, in the case of
estates, trusts, guardianships, custodianship, corporations pension and profit
sharing plans and other organizations.
SIGNATURE GUARANTEES. To protect shareholder accounts, the Funds and its
transfer agent from fraud, signature guarantees are required to enable the Funds
to verify the identity of the person who has authorized a redemption from an
account. Signature guarantees are required for (1) redemptions where the
proceeds are to be sent to someone other than the registered shareowner(s) and
the registered address and (2) share transfer requests. Shareholders may contact
the Funds at (800) 99-IBJFD for further details.
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 contact (800) 99-IBJFD for wiring instructions. A completed
Purchase Application must be overnighted to the Fund in advance of the wire at
IBJ Funds Trust, c/o BISYS Fund Services, 3435 Stelzer Road, Columbus, Ohio
43219-8021.
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BY MAIL. Purchases to open new accounts which are mailed should be sent to
IBJ Funds Trust, P.O. Box 182492, Columbus, Ohio 43218-2492, together with the
completed and signed Purchase Application. Purchases made by check in the Funds
are not permitted to be redeemed until payment of the purchase has been
collected, which may take up to fifteen days after purchase.
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 or investment account
administered by the Adviser, is an employee or an ex-employee of IBJS or is an
employee of any of its affiliates, BISYS Fund Services or its affiliates, 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. 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 P.O. Box 182492, Columbus, Ohio 43218-2492,
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 IBJ Funds Trust, P.O. Box 182492, Columbus, Ohio 43218-2492. The
letter of instruction must include: (i) your account number; (ii) the Fund from
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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.
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 Fund which seeks 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.
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<PAGE>
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 if
required (see "Pricing and Purchase of Fund Shares-Signature Guarantees.").
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 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 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. Telephone Redemption will be
suspended for a period of 10 business days following a telephonic address
change.
OTHER REDEMPTION INFORMATION. Requests in "good order" must include the
following documentation: (a) A letter of instruction, if required, signed by all
registered owners of the shares in the exact names in which they are registered;
(b) Any required signature guarantees (see "Signature Guarantees" above); and
(c) Other supporting legal documents, if required, in the case of estates,
trusts, guardianships, custodianship, corporations, pension and profit sharing
plans and other organizations.
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.
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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 Core Fixed Income Fund will
declare distributions of such income daily and pay those dividends monthly; the
Core Equity Fund will declare and pay distributions annually and the Blended
Total Return Fund will declare and 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.
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.
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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 Core Equity
and Blended Total Return 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.
If you elect to receive distributions in cash and checks (1) are returned
and marked as "undeliverable" or (2) remain uncashed for six months, your cash
election will be changed automatically and your future dividend and capital
gains distribution will be reinvested in the Fund at the per share net asset
value determined as of the date of payment of the distribution. In addition, any
undeliverable checks or checks that remain uncashed for six months will be
canceled and will be reinvested in the Fund at the per share net asset value
determined as of the date of cancellation.
21
<PAGE>
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 net 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
resources, and less frequently traded securities that may be subject to more
abrupt price movements than securities of larger companies.
22
<PAGE>
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.
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 who are purchasers through a trust or investment account
administered by the Adviser, are employees or ex-employees of IBJS or any of its
affiliates, BISYS Fund Services or its affiliates, 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 daily net assets and an additional
shareholder servicing charge of up to 0.50% of average daily 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.
23
<PAGE>
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
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.
24
<PAGE>
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.
BISYS Fund Services, Inc. d/b/a BISYS Fund Services acts as the Funds'
transfer agent. The Trust compensates BISYS Fund Services, the Trust's
administrator, pursuant to the Transfer Agency 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 IBJ Funds Trust, P.O. Box
182492, Columbus, Ohio 43218-2492.
General and Account Information: (800) 99-IBJFD.
25
<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
- -------------------------
BISYS Fund Services
3435 Stelzer Road
Columbus, Ohio 43219
Distributor
- -----------
IBJ Funds Distributor, Inc.
125 West 55th Street
New York, New York 10019
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 CORE FIXED INCOME FUND (FORMERLY, 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 BLENDED TOTAL RETURN FUND (FORMERLY, 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 28, 1997
Investment Adviser
IBJ SCHRODER BANK
& TRUST COMPANY
<PAGE>
IBJ FUNDS TRUST
Blended Total Return Fund (formerly the Growth and Income Fund) (the "Fund")
Supplement Dated March 28, 1997 to Prospectus Dated March 28, 1997
The following is a supplement to the Fund's Prospectus dated March 28,
1997. The supplement should be read in conjunction with the Prospectus.
Prior to June 15, 1997, with respect to the Blended Total Return Fund 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. Following June 15, 1997, the Blended Total
Return Fund will follow the credit quality standards described in the prospectus
to which this supplement relates.
This supplement should be discarded following June 15, 1997.
<PAGE>
IBJ FUNDS TRUST
3435 Stelzer Road
Columbus, Ohio 43219
- --------------------------------------------------------------------------------
GENERAL AND ACCOUNT INFORMATION: (800) 99-IBJFD
- --------------------------------------------------------------------------------
PREMIUM CLASS PROSPECTUS
IBJ SCHRODER BANK & TRUST COMPANY--INVESTMENT ADVISER
("IBJS" OR THE "ADVISER")
BISYS FUND SERVICES LIMITED PARTNERSHIP--ADMINISTRATOR AND SPONSOR
("ADMINISTRATOR" OR "SPONSOR")
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 CORE FIXED INCOME FUND (FORMERLY, 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 BLENDED TOTAL RETURN FUND (FORMERLY, 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 28, 1997,
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 28, 1997.
<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 ................ 16
Minimum Purchase Requirements ...................... 17
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; or (3) are unrated, but are determined to
be of comparable quality by the Adviser pursuant to guidelines approved 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
exceed 90 days. See "Determination of Net Asset Value" in the SAI for an
explanation of the amortized cost valuation method.
1
<PAGE>
NON-MONEY MARKET FUNDS:
CORE FIXED INCOME FUND. The investment objective of the Core Fixed
Income 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.
BLENDED TOTAL RETURN FUND. The objective of the Blended Total Return
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. The Fund is permitted to invest in below-investment grade
(high-yield) bonds, but will always maintain an investment grade weighted
average rating on the fixed income portion of the portfolio. 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
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
2
<PAGE>
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 total 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 BLENDED TOTAL RETURN FUND
Under certain market conditions, both the Core Equity Fund and the
Blended Total Return 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.
BISYS Fund Services Limited Partnership acts as administrator and
sponsor to the Funds. For its services, BISYS Fund Services Limited Partnership
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 "GOOD ORDER" PRIOR TO 4:00 P.M., EASTERN
TIME, AND TRANSMITTED TO THE DISTRIBUTOR PRIOR TO 4:00 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 Blended Total Return 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 fiscal year ended November 30, 1996. 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 CORE BLENDED
MONEY FIXED CORE TOTAL
MARKET INCOME EQUITY RETURN
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)...................... 0.00% 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+ ..................................... 0.65% 0.72% 0.39% 0.49%
------ ------ ------ ------
Total Portfolio Operating Expenses(after waiver)2,3 . 1.50% 1.97% 1.74% 1.84%
====== ====== ====== ======
</TABLE>
- ----------
1 Service Class shares are offered only to certain institutional
investors who are purchasers through a trust or account administered
by the Adviser, are employees or ex-employees of IBJS or any of its
affiliates, BISYS Fund Services or its affiliates, 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 Core Fixed Income Fund, the Core
Equity Fund and the Blended Total Return 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 Core Fixed Income
Fund, the Core Equity Fund and the Blended Total Return Fund are
1.85%, 2.07%, 1.84% and 1.94%, 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.
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.
5
<PAGE>
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 BLENDED
MONEY FIXED CORE TOTAL
MARKET INCOME EQUITY RETURN
FUND FUND FUND FUND
------- ----- ------ -------
<S> <C> <C> <C> <C>
1 year............................................... $ 15 $ 20 $ 18 $ 19
3 years.............................................. $ 47 $ 62 $ 55 $ 58
5 years.............................................. $ 82 $106 $ 94 $100
10 years............................................. $179 $230 $205 $216
</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.
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, 1996. The financial highlights for the periods indicated
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 CORE FIXED INCOME
MARKET FUND FUND
------------------------------- -------------------------------
FOR THE YEAR FOR THE PERIOD FOR THE YEAR FOR THE PERIOD
ENDED FEBRUARY 1, 1995** ENDED FEBRUARY 1, 1995**
NOVEMBER 30, TO NOVEMBER 30, NOVEMBER 30, TO NOVEMBER 30,
1996 1995 1996 1995
------------- ----------------- ------------ ----------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ... $1.00 $1.00 $10.72 $10.00
-------- -------- -------- --------
Income from Investment Operations:
Net investment income ................ 0.05 0.04 0.54 0.48
Net realized and unrealized
gain/(loss) on investments ......... 0.00 0.00 (0.12) 0.72
-------- -------- -------- --------
Total from Investment Operations ..... 0.05 0.04 0.42 1.20
Less Distributions:
Dividends from net investment income . (0.05) (0.04) (0.54) (0.48)
Distribution from net realized
capital gains ........................ -- -- (0.38) --
-------- -------- -------- --------
Total Distributions .................... (0.05) (0.04) (0.92) (0.48)
Net Asset Value, End of Period ......... $1.00 $1.00 $10.22 $10.72
======== ======== ======== ========
Total Return ........................... 4.88% 4.55% 4.25% 12.28%
Net Assets, End of Period (in thousands) $14 $13 $15 $14
Ratios to average net assets of:
Net investment income ................ 4.82% 5.40%* 5.07% 5.59%*
Expenses before waivers/reimbursements 0.95% 0.92%* 1.22% 1.22%*
Expenses net waivers/reimbursements .. 0.65% 0.64%* 1.12% 1.12%*
Portfolio Turnover Rate ................ N/A N/A 160% 297%
Average Commission Rate ................ -- -- -- --
</TABLE>
<TABLE>
<CAPTION>
CORE EQUITY FUND BLENDED TOTAL RETURN FUND
------------------------------ -------------------------------
FOR THE YEAR FOR THE PERIOD FOR THE YEAR FOR THE PERIOD
ENDED FEBRUARY 1, 1995** ENDED FEBRUARY 1, 1995**
NOVEMBER 30, TO NOVEMBER 30, NOVEMBER 30, TO NOVEMBER 30,
1996 1995 1996 1995
------------- ---------------- -------------- ----------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ... $12.97 $10.00 $11.78 $10.00
-------- -------- -------- --------
Income from Investment Operations:
Net investment income ................ 0.14 0.13 0.34 0.27
Net realized and unrealized
gain/(loss) on investments ......... 2.90 2.84 1.26 1.79
-------- -------- -------- --------
Total from Investment Operations ..... 3.04 2.97 1.60 2.06
Less Distributions:
Dividends from net investment income . (0.19) 0.00 (0.35) (0.28)
Distribution from net realized
capital gains ........................ (0.45) -- (0.27) --
-------- -------- -------- --------
Total Distributions .................... (0.64) -- (0.62) (0.28)
Net Asset Value, End of Period ......... $15.37 $12.97 $12.76 $11.78
======== ======== ======== ========
Total Return ........................... 24.61% 29.70% 14.08% 20.72%
Net Assets, End of Period (in thousands) $20 $16 $17 $15
Ratios to average net assets of:
Net investment income ................ 0.93% 1.30%* 2.98% 3.04%*
Expenses before waivers/reimbursements 0.99% 1.09%* -- 1.14%*
Expenses net waivers/reimbursements .. 0.89% 0.89%* 0.99% 1.04%*
Portfolio Turnover Rate ................ 27% 37% 77% 78%
Average Commission Rate ................ $0.0776 -- $0.0789 --
</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.
** Commencement of Operations.
6
<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 Core Fixed Income 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 Blended Total Return 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
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.
7
<PAGE>
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. A rise in interest rates will also likely increase
inherent volatility of these securities as lower than estimated prepayment rates
will alter the expected life of the securities to effectively convert short-term
investments into long-term investments.
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
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
8
<PAGE>
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 (CORE FIXED INCOME FUND, CORE EQUITY FUND AND BLENDED
TOTAL RETURN 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 (CORE FIXED INCOME FUND, CORE EQUITY FUND AND BLENDED
TOTAL RETURN 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 (CORE FIXED INCOME FUND, CORE EQUITY FUND
AND BLENDED TOTAL RETURN 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
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
9
<PAGE>
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. These investments must be U.S.
dollar-denominated with respect to the Reserve Money Market Fund.
CONVERTIBLE AND EXCHANGEABLE SECURITIES (CORE FIXED INCOME FUND, CORE
EQUITY FUND AND BLENDED TOTAL RETURN 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 Core 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
net assets of the Non-Money Market Funds and 10% of the value of the net 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
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.
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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 generally 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
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 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.
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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: Core Fixed Income Fund, 350%; Core Equity Fund, 200%; Blended Total
Return 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%; Core Fixed Income Fund, 0.50%; Core Equity Fund,
0.60%; and Blended Total Return Fund, 0.60%.
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 Core Fixed Income Fund and the debt market
securities portion of the Blended Total Return 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 Blended Total Return Fund.
Mr. Kaefer has been with IBJS since 1987 and was previously
with Schroder Capital Management International from 1982 to
1987. James O'Mealia, Senior Portfolio Manager, has been
affiliated with IBJS since October 1996 and is responsible for
the day-to-day management of the Blended Total Return Fund.
Mr. O'Mealia was the Vice President in charge of New York Life
Insurance Company's equity and high yield investment from 1989
to 1994, was Chief Operating Officer of McGlinn Capital
Management in Wyomissing, PA from 1994 to 1995, and has served
as the President of Sunnymeath Asset Management, Inc. since
February 1996.
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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, 1996, included accounts with aggregate assets
of approximately $2.0 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
IBJ Funds Distributor, Inc. acts as Sponsor of the Funds. IBJ Fund
Distributor, Inc. is an affiliate of the Administrator of the Funds, BISYS Fund
Services Limited Partnership d/b/a BISYS Fund Services (the "Administrator").
BISYS Fund Services and its affiliated companies, including BISYS Fund Services,
Inc. are wholly owned by BISYS Group, Inc. ("BISYS"). BISYS headquartered in
Little Falls, New Jersey, supports more than 5,000 financial institutions and
corporate clients through two strategic business units. BISYS Information
Services Group provides image and data processing outsourcing, and pricing
analysis to more than 600 banks nationwide. BISYS Investment Services Group
designs, administers and distributes over 60 families of proprietary mutual
funds consiting of more than 430 portfolios, and provided 401(k) marketing
support, administration, and recordkeeping services in partnership with banking
instiutions and investment management companies. BISYS and its affiliates BISYS
Fund Services and BISYS Fund Services, Inc. have their prinicipal place of
business at 3435 Stelzer Road, Columbus, Ohio 43219. IBJ Funds Distributor, Inc.
has its principal place of business at 125 West 55th Street, New York, New York
10019.
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
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
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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 Administration Agreement with BISYS
Fund Services pursuant to which BISYS Fund Services 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, BISYS Fund Services 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 Transfer Agency Agreement between the Trust and BISYS Fund
Services, Inc., BISYS Fund Services, Inc. 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 BISYS Fund Services, Inc., BISYS Fund Services,
Inc. 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 BISYS, its affiliates 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.
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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 4:00 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 any
BISYS affiliate, 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 Core 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 in "good
order".
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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. BISYS Fund Services,
Inc. 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. No third party or foreign checks
will be accepted.
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 "good 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 4:00 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.
OTHER PURCHASE INFORMATION. Requests in "good order" must include the
following documentation: (a) A letter of instruction, if required, signed by all
registered owners of the shares in the exact names in which they are registered;
(b) Any required signature guarantees (see "Signature Guarantees" below); and
(c) Other supporting legal documents, if required, in the case of estates,
trusts, guardianships, custodianship, corporations pension and profit sharing
plans and other organizations.
SIGNATURE GUARANTEES. To protect shareholder accounts, the Funds and
its transfer agent from fraud, signature guarantees are required to enable the
Funds to verify the identity of the person who has authorized a redemption from
an account. Signature guarantees are required for (1) redemptions where the
proceeds are to be sent to someone other than the registered shareowner(s) and
the registered address and (2) share transfer requests. Shareholders may contact
the Funds at (800) 99-IBJFD for further details.
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 contact (800) 99-IBJFD for wiring instructions.
A completed Purchase Application must be overnighted to the Fund in advance of
the wire at IBJ Funds Trust, c/o BISYS Fund Services, 3435 Stelzer Road,
Columbus, Ohio 43219-8021.
Purchases to open new accounts which are mailed should be sent to IBJ
Funds Trust, P.O. Box 182492, Columbus, Ohio 43218-2492, together with the
completed and signed Purchase Application. Purchases made by check in the Funds
are not permitted to be redeemed until payment of the purchase has been
collected, which may take up to fifteen days after purchase.
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 or investment
account administered by the Adviser, is an employee or an ex-employee of IBJS or
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is an employee of any of its affiliates, BISYS Fund Services or its affiliates,
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. 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 P.O. Box 182492, Columbus, Ohio 43218-2492,
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 IBJ Funds Trust, P.O. Box 182492, Columbus, Ohio 43218-2492.
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.
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
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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 Fund which seeks 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
institution including a member of a national securities exchange or a commercial
bank or trust company, broker-dealers, credit unions and savings associations if
required (see "Pricing and Purchase of Fund Shares-Signature Guarantees.").
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
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 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.
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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. Telephone Redemption will be
suspended for a period of 10 business days following a telephonic address
change.
OTHER REDEMPTION INFORMATION. Requests in "good order"must include the
following documentation: (a) A letter of instruction, if required, signed by all
registered owners of the shares int eh exact names in which they are registered;
(b) Any required signature guarantees (see "Signature Guarantees" above); and
(c) Other supporting legal documents, if required, in the case of estates,
trusts, guardianships, custodianship, corporations, pension and profit sharing
plans and other organizations.
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
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.
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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 Core Fixed Income Fund will
declare distributions of such income daily and pay those dividends monthly; the
Core Equity Fund will declare and pay distributions annually and the Blended
Total Return Fund will declare and 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.
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,
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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 Core
Equity and Blended Total Return 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.
If you elect to receive distributions in cash and checks (1)are
returned and marked as "undeliverable" or (2) remain uncashed for six months,
your cash election will be changed automatically and your future dividend and
capital gains distribution will be reinvested in the Fund at the per share net
asset value determined as of the date of payment of the distribution. In
addition, any undeliverable checks or checks that remain uncashed for six months
will be canceled and will be reinvested in the Fund at the per share net asset
value determined as of the date of cancellation.
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 net 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.
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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 Core Fixed Income 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.
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
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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, who are purchasers through a trust or investment
account administered by the Adviser, are employees or ex-employees of IBJS or
any of its affiliates, BISYS or its affiliates, 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 daily net assets and an additional
shareholder servicing charge of up to 0.50% of average daily 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
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).
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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.
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ACCOUNT SERVICES
All transactions in shares of the Funds will be reflected in a
statement for each shareholder. In those cases where a Service Organization or
its 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 service organization.
BISYS Fund Services Limited Partnership d/b/a BISYS Fund Services acts
as the Funds' transfer agent. The Trust compensates BISYS Fund Services, the
Trust's administrator, pursuant to the Transfer Agency 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 IBJ Funds Trust, P.O.
Box 182492, Columbus, Ohio 43218-2492.
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
- -------------------------
BISYS Fund Services
3435 Stelzer Road
Columbus, Ohio 43219
Distributor
- -----------
IBJ Funds Distributor, Inc.
125 West 55th Street
New York, New York 10019
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 CORE FIXED INCOME FUND (FORMERLY, 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 BLENDED TOTAL RETURN FUND (FORMERLY, 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 28, 1997
Investment Adviser
IBJ SCHRODER BANK
& TRUST COMPANY
IBJ FUNDS TRUST
3435 STELZER ROAD
COLUMBUS, OHIO 43219
GENERAL AND ACCOUNT INFORMATION: (800) 99-IBJFD
- --------------------------------------------------------------------------------
IBJ Schroder Bank & Trust Company--Investment Adviser
("IBJS")
BISYS Fund Services Limited Partnership
d/b/a BISYS Fund Services-
Administrator and Sponsor
("BISYS Fund Services" 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
o Reserve Money Market Fund
NON-MONEY MARKET FUNDS
o Core Fixed Income Fund (formerly, Bond Fund)
o Core Equity Fund
o Blended Total Return Fund (formerly, 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 IBJ Funds Distributor, Inc. 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 28, 1997 (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 28, 1997
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TABLE OF CONTENTS
INVESTMENT POLICIES................................................... 1
INVESTMENT RESTRICTIONS.............................................. 15
MANAGEMENT............................................................17
EXPENSES .............................................................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
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Statistical Rating Organization ("NRSRO") or, if 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
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variable rate obligations issued by U.S. or foreign bank holding 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 generally 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
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decrease the amount, and the borrower may prepay up to the 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
repurchase them from
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<PAGE>
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
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<PAGE>
institutions may not be indicative of the liquidity of such
investments.
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
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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.
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
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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.
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 (Core Fixed Income Fund, Core Equity Fund and
Blended Total Return 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
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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 illiquid securities with a value equal to the exercise price in a
segregated account with its custodian.
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
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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 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 (Core Fixed
Income Fund, Core Equity Fund and Blended Total Return 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
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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.
When a futures contract is executed, each party deposits with a
broker or in a segregated custodial account up to 5% or more (in foreign
markets) 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."
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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.
INTEREST RATE FUTURES CONTRACTS (Core Fixed Income Fund, Core
Equity Fund and Blended Total Return 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 (Core Fixed Income Fund,
Core Equity Fund and Blended Total Return 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
-13-
<PAGE>
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
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
-14-
<PAGE>
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.
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);
-15-
<PAGE>
(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;
(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;
-16-
<PAGE>
(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 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.
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<PAGE>
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 3435 Stelzer Road, Columbus, Ohio 43219.
Currently, no Trustee is deemed to be an "interested persons" of the Trust for
purposes of the 1940 Act.
ROBERT H. DUNKER, Trustee, (Retired); formerly, Executive Vice
President, Trust Administration, First Fidelity Bank, N.A., New
Jersey; Director, E.J. Brooks Co.; 410 NE Plantation Road #322,
Stuart, FL 34996; Age: 66
STEPHEN V.R. GOODHUE, Trustee (Retired); formerly, Senior Vice
President Manufacturer's Hanover Trust Company; 237 Mount Holly
Road, Katonah, New York 10536; Age: 68
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: 75
GEORGE H. STEWART, Trustee and Chairman; (Retired); formerly,
Vice President and Treasurer, Ciba-Geigy Corporation; 4425 SE
Waterford Drive, Stuart, Florida 34997; Age: 65
W. Anthony Turner, President; Senior Vice President and Regional
Client Executive, BISYS Fund Services, Inc. (1996-Present);
Senior Vice President and National Sales Manager, First Union
Brokerage Services, Inc. 1995; Senior Vice President, Global
Finance Group, NationsBanc Capital Markets Inc. (1993-1995);
executive vice president and Principal, The Selbst Groups, Inc.
(1988-1993); Vice President, Putnam Investments (1987-1988);
BISYS Fund Services, 125 West 55th Street, New York, New York
10019; Age: 36
MICHAEL SAKALA, Treasurer; Vice President and Treasurer, BISYS
Fund Services, Inc. (12/96-Present; Associate Director of Fund
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<PAGE>
Accounting BISYS Fund Services, Inc.(4/96-12/96);head of worldwide Fund
Administration at Bankque Paribas Luxemburg (4/94- 4/96);Accounting Manager at
Fidelity Investments in Boston, MA (6/89-4/94; BISYS Fund Services, 125 West
55th Street, New York, New York 10019; Age: 31
CHARLES L. BOOTH, Vice President; Vice President, BISYS Fund
Services, Inc. (9/96-Present); Associate Director, BISYS Fund
Services, Inc. (1/94-8/96); Manager, BISYS Fund Services, Inc.
(1/91-12/93); Age: 36
GEORGETTE L. HORTON, Vice President; Director, BISYS Fund
Services, Inc. (10/96-Present); Assistant Vice President of
Regional Sales at PaineWebber (6/93-9/96; Marketing
Representative for Eaton Vance Distributors (6/92-12/93); BISYS
Fund Service, Inc. 125 West 55th Street, New York, New York
10019; Age: 31
SHERYL HIRSCHFELD, Secretary ; Manager-Legal Services, BISYS Fund Services
(1/97-Present); formerly, Director of Corporate Secretary Services of Furman
Selz LLC (11/94-12/96); Assistant to Corporate Secretary and General Counsel of
The Dreyfus Corporation (1982-1994); BISYS Fund Services, Inc. 125 West 55th
Street, New York, New York 10019; Age: 36
ALAINA V. METZ, Assistant Secretary; Chief Administrative Officer
of BISYS Fund Services (6/95-Present); Supervisor of Blue Sky
Department at Alliance Capital Management, L.P. (5/89-6/95); Age:
29
BRUCE TREFF, Assistant Secretary; Counsel, BISYS Fund Services,
Inc.(9/95-Present);Manager, Alliance Capital Management, L.P.
(8/89-9/95); Age: 30
Trustees of the Trust not affiliated with the Sponsor receive from
the Trust an annual retainer of $5,000, $7,000 for the Chairman, and a fee of
$500 for each Board of Trustees meeting and $500 for each Board committee
meeting of the Trust attended and $500 additional for the Audit Committee
Chairman 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.
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<PAGE>
COMPENSATION TABLE*
<TABLE>
<CAPTION>
Pension or
Retirement
Benefits
Aggregate Accrued as Total
Compensation Part of Annual Compensation
from the Trust Benefits Upon From the
NAME OF PERSON, POSITION Trust Expenses Retirement Fund Complex
- ------------------------ ------------ ---------- ------------- ------------
<S> <C> <C> <C> <C>
Robert H. Dunker, Trustee................ $8,000 0 N/A $8,000
Stephen V.R. Goodhue, Trustee............ 9,500 0 N/A 9,500
Edward F. Ryan, Trustee.................. 8,000 0 N/A 8,000
George Stewart, Trustee.................. 10,000 0 N/A 10,000
- ----------------------------
* Represents the total compensation paid to such persons for the fiscal
year ended November 30, 1996.
As of March 3, 1997, Officers and Trustees of the Trust, as a
group, own less than 1% of the outstanding shares of the Funds.
</TABLE>
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, Core Fixed Income Fund, Core Equity Fund and Blended Total Return
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, Core Fixed Income Fund, Core Equity Fund and Blended Total Return
Fund, respectively. For the fiscal year ended November 30, 1996,
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<PAGE>
IBJS earned investment advisory fees of $106,107, $132,005, $533,300 and
$341,198 for the Reserve Money Market Fund, Core Fixed Income Fund, Core Equity
Fund and Blended Total Return Fund, respectively. For the same period, IBJS has
voluntarily waived investment advisory fees of $106,107, $26,400, $88,874 and
$56,745, 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 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,
1996, included accounts with aggregate assets of approximately $2.0 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.
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
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<PAGE>
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 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
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<PAGE>
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 Administration Agreement 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
Administration Agreement, 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 September 12, 1996. 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 Administration Agreement 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 and for the fiscal year
ended November 30, 1996.
ADMINISTRATION SERVICES
BISYS Fund Services 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, BISYS Fund
Services furnishes office space and facilities required for conducting the
business of the Funds and pays the compensation of the Funds' officers,
employees and Trustees affiliated with BISYS Fund Services. For these
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<PAGE>
services, BISYS Fund Services 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 LLC, the previous Administrator, earned Administrative Services fees of
$31,630, $29,070, $97,007 and $53,463 for the Reserve Money Market Fund, Core
Fixed Income Fund, Core Equity Fund and Blended Total Return Fund, respectively.
For the fiscal year ended November 30, 1996, Furman Selz LLC earned
Administrative Services fees of $52,601, $39,602, $133,328 and $85,315 for the
Reserve Money Market Fund, Core Fixed Income Fund, Core Equity Fund and Blended
Total Return Fund, respectively. Pursuant to a Fund Accounting Agreement between
the Trust and BISYS Fund Services, Inc., BISYS Fund Services, Inc. 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 LLC, the previous accounting
agent, earned Fund Accounting fees and expenses of $26,667, $30,757, $27,854 and
$40,164 for the Reserve Money Market Fund, Core Fixed Income Fund, Core Equity
Fund and Blended Total Return Fund, respectively. For the fiscal year ended
November 30, 1996, Furman Selz LLC earned Fund Accounting fees and expenses of
$30,668, $41,721, $33,836 and $43,504 for the Reserve Money Market Fund, Core
Fixed Income Fund, Core Equity Fund and Blended Total Return Fund, respectively.
Pursuant to a Transfer Agency Agreement between the Trust and BISYS Fund
Services, Inc. , BISYS Fund Services, Inc. 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 Administration Agreement is terminable with respect to the
Funds, 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 Administration Agreement upon written notice of
nonrenewal given at least 60 days prior to the end of the then-current term and
payment of the remaining fees for the then-current term. The Agreement shall
remain in effect for one year from the date of the conversion of services to
BISYS data processing system, and subject to annual approval of the Fund's Board
of Trustees for one-year periods thereafter.
-24-
<PAGE>
SERVICE ORGANIZATIONS
For Premium Class Shareholders, the Trust also contracts with banks
(including IBJS), trust companies, broker-dealers 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, 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 BISYS Fund Services, 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
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<PAGE>
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.
EXPENSES
Except for the expenses paid by the IBJS and BISYS Fund Services,
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
-26-
<PAGE>
shareholders would receive correspondingly less income. The converse would apply
during periods of rising interest rates.
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.
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, 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. 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.
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
what action, if any, will be initiated. In the event the Board of Trustees
determines that a deviation exists which
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<PAGE>
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
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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.
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.
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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.
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, Core Fixed Income Fund, Core
Equity Fund and Blended Total Return Fund, respectively. For the fiscal year
ended November 30, 1996, $0, $0, $88,696 ,and $30,396 in brokerage commissions
were paid on behalf of the Reserve Money Market Fund, Core Fixed Income Fund,
Core Equity Fund and Blended Total Return Fund, respectively of which $56,812
and $20,497.56 was allocated for soft dollar arrangements for Core Equity Fund
and Blended Total Return 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 Core Fixed
Income Fund, Core Equity Fund and Blended Total Return Fund for the period from
February 1, 1995 (commencement of operations) to November 30, 1995 was 297%,
37%, and 78%,
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respectively. The portfolio turnover rate for the Core Fixed Income Fund, Core
Equity Fund and Blended Total Return Fund for the fiscal year ended November 30,
1996 were 160%, 27%, and 77%, 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, 1996. 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
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
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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
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
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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.
Distributions by a Fund reduce the net asset value of the
Fund's shares. Should a distribution reduce the net asset value
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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 long
term 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
Fund
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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"
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with the result that 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
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Fund accrues interest, dividends 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
described in the
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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
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and instrumentalities may be exempt 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
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or the Declaration of Trust. In this regard, the Trust will be required to 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 April 10, 1997, 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 28,452,423
One State Street, 7th Floor 92.184%
New York, NY 10004-1505
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Reserve Money Market Fund
Premium Class Shares
--------------------
BISYS Fund Services, Inc. 12,568
3435 Stelzer Road 100.00%
Columbus, OH 43219
Core Fixed Income Fund
Service Class Shares
--------------------
IBJ Schroder Bank & Trust Company 2,597,246
One State Street, 7th Floor 98.82%
New York, NY 10004-1505
Core Fixed Income Fund
Premium Class Shares
--------------------
BISYS Fund Services Ohio Inc. 1,239
3435 Stelzer Road 100.00%
Columbus, OH 43219
Core Equity Fund
Service Class Shares
--------------------
IBJ Schroder Bank & Trust Company 6,502,651
One State Street, 7th Floor 98.46%
New York, NY 10004-1505
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Core Equity Fund
Premium Class Shares
--------------------
BISYS Fund Services Ohio Inc. 854.99
3435 Stelzer Road 100.00%
Columbus, OH 43219
Blended Total Return Fund
Service Class Shares
--------------------
IBJ Schroder Bank & Trust Company 5,278,852
One State Street, 7th Floor 99.83%
New York, NY 10004-1505
Blended Total Return Fund
Premium Class Shares
--------------------
BISYS Fund Services Ohio Inc. 997.50
3435 Stelzer Road 100.00%
Columbus, OH 43219
CUSTODIAN TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
IBJ Schroder Bank & Trust Company acts as custodian of the Trust's
assets. BISYS Fund Services, Inc. acts as transfer agent for the Funds. The
Trust compensates BISYS Fund Services, Inc. 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.
For the fiscal year ended, November 30, 1996, Furman Selz LLC, the
previous Tranfer Agent, earned $9,696, $5,881, $8,396 and $5,563 for the Reserve
Money Market Fund, Core Fixed Income
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Fund, Core Equity Fund and Blended Total Return Fund,
respectively.
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.
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, 1996, the seven day yield and
seven day effective yield of the Service Class Shares of the Reserve Money
Market Fund was 4.64% and 4.75%, respectively.
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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
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 January 31, 1997, the thirty day (or one
month) yield for Service Class shares of the Core Fixed Income Fund, Core Equity
Fund and Blended Total Return Fund was 5.37%, 0.82% and 2.59%, 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 Core Fixed Income Fund, Core Equity Fund and Blended Total Return Fund
for the fiscal year ended November 30, 1996 was 4.27%,24.61% and 14.08%,
respectively and for the period February
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1, 1995 (commencement of operations) to November 30, 1996 was 8.98%, 29.94% and
19.13%, 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
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
-45-
<PAGE>
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 fiscal
year ended November 30, 1996.
-46-
<PAGE>
IBJ FUNDS TRUST
IBJ MONEY MARKET RESERVE FUND
PORTFOLIO OF INVESTMENTS -- NOVEMBER 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YIELD TO
MATURITY
CREDIT AT TIME OF MATURITY SHARES/ VALUE
RATINGS* PURCHASE DATE PRINCIPAL (NOTE 2A)
------- --------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
COMMERCIAL PAPER -- 61.78%
A1/P1 American Express Credit.................................. 5.44% 1/16/97 $1,750,000 $ 1,738,899
A1/P1 BAT Capital Corp......................................... 5.37 12/4/96 1,750,000 1,749,261
A1+/P1 Coca-Cola Co............................................. 5.34 12/23/96 1,500,000 1,495,356
A1/P1 Daimler-Benz NA Corp..................................... 5.42 12/3/96 1,750,000 1,749,507
A1/P1 Ford Credit Europe PLC................................... 5.40 12/12/96 1,750,000 1,747,187
A1 +/P1 General Electric Capital Corp............................ 5.47 1/23/97 1,500,000 1,488,805
A1+/P1 Glaxo Wellcome PLC....................................... 5.37 12/16/96 1,750,000 1,746,179
A1/P1 IBM Credit Corp.......................................... 5.40 12/5/96 1,750,000 1,748,993
A1 +/P1 Mobil Australia Finance.................................. 5.46 1/13/97 1,500,000 1,490,674
A1 +/P1 Province of Alberta...................................... 5.43 1/14/97 1,500,000 1,490,885
A1 +/P1 Toyota Motor Credit Corp................................. 5.43 12/10/96 1,750,000 1.747,717
A1/P1 Weyerhauser Real Estate.................................. 5.37 12/20/96 1,500,000 1,495,959
A1 +/P1 Wisconsin Electric Fuel Trust............................ 5.47 1/13/97 1,500,000 1,490,645
-----------
TOTAL COMMERCIAL PAPER .................................. 21,180,067
-----------
U.S. GOVERNMENT OBLIGATIONS -- 34.97%
AAA/Aaa Federal Home Loan Bank Notes............................. 5.29 3/11/97 1,000,000 999,793
AAA/Aaa Federal Home Loan Bank Discount Notes.................... 5.37 1/9/97 2,500,000 2,486,141
AAA/Aaa Federal Home Loan Mortgage Corp. Discount Notes.......... 5.39 1/24/97 800,000 793,823
AAA/Aaa Federal National Mortgage Corp. Discount Notes........... 5.39 1/28/97 4,250,000 4,214,761
AAA/Aaa Federal National Mortgage Corp. Discount Notes........... 5.31 12/11/96 3,500,000 3,495,091
-----------
TOTAL U.S GOVERNMENT OBLIGATIONS ........................ N/R 11,989,609
-----------
SHORT-TERM INVESTMENTS -- 1.62%
N/R TempCash Provident Money Market Investment Fund.......... N/A 555,498 555,498
-----------
TOTAL SHORT-TERM INVESTMENTS ............................ 555,498
-----------
TOTAL INVESTMENTS (amortized cost $33,725,174)+-- 98.37% 33,725,174
Cash and other assets, net of liabilities-- 1.63% ....... 557,646
-----------
NET ASSETS-- 100.00% .................................... $34,282,820
===========
</TABLE>
* See page 13 for Credit Ratings Summary.
+ Cost for book and tax purposes is the same.
See accompanying notes to financial statements
F-1
<PAGE>
IBJ FUNDS TRUST
IBJ BOND FUND
PORTFOLIO OF INVESTMENTS -- NOVEMBER 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT VALUE
RATINGS* PRINCIPAL COST (NOTE 2A)
- -------- --------- ---- ---------
U.S. GOVERNMENT OBLIGATIONS -- 15.64%
<S> <C> <C> <C> <C>
AAA/Aaa $ 650,000 Federal Farm Credit Medium Term Notes 6.32%, 9/9/2002......... $649,797 $ 659,763
---------- ----------
MORTGAGE OBLIGATIONS
AAA/Aaa 500,000 FHLMC 6.54%, 3/21/2001 ....................................... 496,304 500,790
AAA/Aaa 500,000 FHLMC 6.56%, 2/1/2006......................................... 499,844 496,770
AAA/Aaa 750,000 FHLMC Discount Notes due 12/20/1996........................... 747,994 747,994
AAA/Aaa 17,245 FHLMC Pool #285113, 7.50%, 2/1/2017........................... 16,855 17,455
AAA/Aaa 500,000 FNMA Medium Term Notes 6.08%, 9/25/2000....................... 500,120 502,135
AAA/Aaa 672,238 FNMA Pool #358604, 8.00%,11/1/2026............................ 690,513 691,145
AAA/Aaa 2,894 GNMA Pool #39821, 11.50%, 4/15/2010........................... 3,146 3,240
AAA/Aaa 98,653 GNMA Pool #102627,13.00%, 6/15/2014........................... 110,242 111,119
AAA/Aaa 73,448 GNMA Pool #115224, 13.00%, 11/15/2014......................... 82,008 82,648
AAA/Aaa 42,408 GNMA Pool #120883, 13.00%, 12/15/2014......................... 47,327 47,667
AAA/Aaa 487,034 GNMA Pool #398559, 7.00%, 4/15/2026........................... 470,901 484,305
---------- ----------
3,665,254 3,685,268
---------- ----------
TOTAL U.S. GOVERNMENT OBLIGATIONS ............................ 4,315,051 4,345,031
---------- ----------
U.S. TREASURY OBLIGATIONS -- 50.85%
AAA/Aaa 750,000 Bonds 5.75%, 10/31/1997....................................... 751,650 752,265
AAA/Aaa 1,500,000 Notes 6.375%, 5/15/1999....................................... 1,523,855 1,524,180
AAA/Aaa 2,000,000 Notes 6.75%, 6/30/1999........................................ 2,022,610 2,051,000
AAA/Aaa 500,000 Notes 6.00%,10/15/1999........................................ 495,018 504,665
AAA/Aaa 2,250,000 Notes 6.75%, 4/30/2000........................................ 2,264,804 2,317,927
AAA/Aaa 2,000,000 Notes 6.50%, 5/31/2001........................................ 2,007,388 2,052,680
AAA/Aaa 1,750,000 Notes 6.25%, 2/15/2003........................................ 1,745,335 1,780,135
AAA/Aaa 1,000,000 Notes 6.50%, 8/15/2005........................................ 984,219 1,030,030
AAA/Aaa 2,000,000 Notes 6.875%, 5/15/2006....................................... 2,098,881 2,113,159
---------- ----------
TOTAL U.S. TREASURY OBLIGATIONS .............................. 13,893,760 14,126,041
---------- ----------
CORPORATE OBLIGATIONS -- 29.67%
AUTOMOBILES -- 1.47%
A-/A3 400,000 GMAC Notes 7.00%, 3/1/2000.................................... 402,094 409,000
---------- ----------
BANKING -- 2.54%
A+/A2 300,000 BankAmerica Corp. Medium Term Notes 7.125%, 5/12/2005......... 303,260 309,000
A+/Baa1 400,000 Old Kent Financial Sub. Notes 6.625%, 11/15/2005.............. 397,808 397,000
---------- ----------
701,068 706,000
---------- ----------
DURABLE GOODS -- 1.02%
A+/A3 250,000 Whirlpool Corp. Debs. 9.00%, 3/1/2003......................... 257,490 281,875
---------- ----------
ENVIRONMENTAL CONTROL -- 1.42%
A/A2 400,000 Browning-Ferris Sr. Notes 6.10%, 1/15/2003.................... 404,851 393,500
---------- ----------
FINANCIAL SERVICES -- 2.75%
AA-/Aa3 350,000 Associates Corp. N.A. Sr. Notes 7.50%, 4/15/2002.............. 351,668 369,688
A+/A1 385,000 Commercial Credit Co. Notes 6.875%, 5/1/2002.................. 389,522 395,588
---------- ----------
741,190 765,276
---------- ----------
</TABLE>
See accompanying notes to financial statements
F-2
<PAGE>
IBJ FUNDS TRUST
IBJ BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- NOVEMBER 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT SHARES/ VALUE
RATINGS* PRINCIPAL COST (NOTE 2A)
- -------- --------- ---- ---------
<S> <C> <C> <C> <C>
FOOD -- 1.25%
BBB/Baa2 $350,000 Nabisco Inc. Notes 6.85%, 6/15/2005........................... $356,757 $ 347,813
---------- ----------
FOREST PRODUCTS & PAPER -- 2.62%
BBB-/Baa3 400,000 Boise Cascade Co. Debs. 7.35%, 2/1/2016....................... 399,656 388,000
BBB/Baa1 325,000 Champion International Corp. Notes 7.70%, 12/15/1999.......... 335,881 339,219
---------- ----------
735,537 727,219
---------- ----------
MACHINES -- 0.78%
BBB-/Baa3 210,000 Case Corp. Notes 7.25%, 8/1/2005.............................. 213,067 215,513
---------- ----------
OIL/GAS -- 0.95%
AAA/Aa1 250,000 Amoco Canada Debs. 7.95%,10/1/2022............................ 257,797 265,312
---------- ----------
TELEPHONE -- 1.45%
AA/Aa3 400,000 Southwestern Bell Capital Medium Term Notes 6.45%, 1/20/1998.. 401,956 402,500
---------- ----------
TRANSPORTATION -- 4.40%
BBB/Baa2 411,000 Canadian National Railway Notes 7.00%, 3/15/2004.............. 409,671 417,679
A-/A3 140,000 Canadian Pacific Notes 6.875%, 4/15/2003...................... 141,538 142,800
AA/Aa1 350,000 Conrail, Inc. Notes 6.86%, 12/31/2007......................... 344,435 352,129
BBB+/A3 300,000 CSX Corp Notes 7.00%, 9/15/2002............................... 299,280 310,875
----------- -----------
1,194,924 1,223,483
----------- -----------
UTILITIES -- 9.02%
A/A2 350,000 Central Power & Light Notes 6.875%, 2/1/2003.................. 358,472 359,625
A/A2 250,000 Delmarva Power & Light Notes 6.40%, 7/1/2003.................. 248,472 248,750
A+/A2 250,000 Hydro Quebec Medium Term Notes 8.59%, 8/22/2001............... 251,199 273,125
BBB/Baa2 500,000 Illinois Power Notes 6.50%, 8/1/2003 ......................... 502,598 501,875
BBB+/Baa1 300,000 Jersey Central Power & Light Notes 7.125%, 10/1/2004.......... 308,632 303,375
AA/Aa3 400,000 National Rural Utilities Notes 6.50%, 9/15/2002............... 402,226 404,500
NR/Baa2 400,000 New Orleans Public Service Inc. Notes 8.00%, 3/1/2006......... 396,580 415,500
2,468,179 2,506,750
----------- -----------
TOTAL CORPORATE OBLIGATIONS .................................. 8,134,910 8,244,241
----------- -----------
MUNICIPAL OBLIGATIONS -- 1.43%
A+/NR 361,000 Halifax NC Regional Economic Development
Notes 9.25%,10/1/2005......................................... 366,983 396,649
----------- -----------
TOTAL MUNICIPAL OBLIGATIONS .................................. 366,983 396,649
----------- -----------
SUPRA-NATIONAL OBLIGATIONS -- 0.96%
AA-/Aa1 250,000 African Development Bank Notes 7.70%, 7/15/2002............... 259,531 268,125
----------- -----------
TOTAL SUPRA-NATIONAL OBLIGATIONS ............................ 259,531 268,125
----------- -----------
SHORT TERM INVESTMENTS -- 1.25%
346,616 TempCash Provident Money Market Investment Fund............... 346,616 346,616
----------- -----------
TOTAL SHORT TERM INVESTMENTS ................................. 346,616 346,616
----------- -----------
TOTAL INVESTMENTS -- 99.80% ..................................$27,316,851+ 27,726,703
===========
Cash and other assets, net of liabilities-- 0.20% ............ 55,834
-----------
NET ASSETS-- 100.00% ......................................... $27,782,537
===========
</TABLE>
* See page 13 for Credit Ratings Summary.
+ Cost for book and tax purposes is the same.
See accompanying notes to financial statements
F-3
<PAGE>
IBJ FUNDS TRUST
IBJ CORE EQUITY FUND
PORTFOLIO OF INVESTMENTS -- NOVEMBER 30, 1996
- --------------------------------------------------------------------------------
VALUE
SHARES COST (NOTE 2A)
------- ---- ---------
COMMON STOCKS -- 97.77%
AEROSPACE/DEFENSE -- 4.21 %
38,200 Raytheon Co.................... $1,318,583 $1,952,975
14,200 United Technologies Corp....... 1,545,276 1,991,550
---------- ----------
2,863,859 3,944,525
---------- ----------
AUTOMOBILES -- 1.22%
34,000 Echlin Inc..................... 1,152,125 1,143,250
---------- ----------
BANKING -- 6.20%
16,500 First American Corp............ 492,937 944,625
20,400 NationsBank Corp............... 965,061 2,113,950
64,500 Signet Banking Corp............ 1,511,488 1,951,125
2,800 Wells Fargo & Co............... 745,200 796,950
---------- ----------
3,714,686 5,806,650
---------- ----------
BEVERAGES -- 1.74%
54,600 Pepsico. Inc................... 1,693,179 1,631,175
---------- ----------
BUILDING MATERIALS -- 0.79%
13,100 Sherwin-Williams Co............ 442,051 743,425
---------- ----------
BUSINESS SERVICES -- 4.02%
43,900 Automatic Data Processing Inc. 1,373,123 1,882,213
67,800 Reynolds & Reynolds Co......... 1,163,347 1,881,450
---------- ----------
2,536,470 3,763,663
---------- ----------
CHEMICALS -- 5.09%
29,000 Air Products & Chemicals Inc. 1,521,512 2,015,500
42,200 Monsanto Co.................... 659,067 1,677,450
26,700 Morton International Inc....... 1,098,743 1,078,012
---------- ----------
3,279,322 4,770,962
---------- ----------
ELECTRONICS -- 8.48%
22,000 General Electric Co............ 1,220,040 2,288,000
37,600 Hewlett-Packard Co............. 1,075,657 2,025,700
47,000 Molex Inc...................... 1,355,453 1,833,000
32,400 Motorola Inc................... 1,943,395 1,794,150
---------- ----------
5,594,545 7,940,850
---------- ----------
ENTERTAINMENT -- 3.75%
26,900 The Walt Disney Co............. 1,538,052 1,983,875
37,500 Time Warner Inc................ 1,371,720 1,528,125
---------- ----------
2,909,772 3,512,000
---------- ----------
FINANCIAL SERVICES -- 2.15%
21,200 Household International Inc.... 852,101 2,008,700
---------- ----------
FOOD -- 6.24%
50,000 Nabisco Holdings Corp.
Class A. .................... 1,384,522 1,937,500
51,300 Sara Lee Corp.................. 1,421,838 2,013,525
55,500 Sysco Corp..................... 1,722,940 1,893,937
---------- ----------
4,529,300 5,844,962
---------- ----------
HOUSEHOLD PRODUCTS -- 2.03%
20,500 Colgate-Palmolive Co........... 1,281,320 1,898,812
---------- ----------
INSURANCE -- 4.08%
17,000 American International
Group Inc................... 1,155,980 1,955,000
61,300 TIG Holdings Inc............... 1,332,157 1,869,650
---------- ----------
2,488,137 3,824,650
---------- ----------
MACHINES -- 2.05%
36,000 Dover Corp..................... 1,057,512 1,921,500
---------- ----------
MANUFACTURING -- 2.34%
29,900 Allied Signal Inc.............. 1,057,712 2,190,175
---------- ----------
MEDICAL -- 1.93%
45,300 Columbia HCA
Healthcare Corp............. 1,242,265 1,812,000
---------- ----------
METALS -- 2.90%
27,900 Aluminum Company
of America.................. 1,110,377 1,775,137
47,300 Worthington Industries Inc..... 978,500 940,087
---------- ----------
2,088,877 2,715,224
---------- ----------
OIL/GAS -- 7.97%
15,300 Atlantic Richfield Co.......... 1,637,010 2,128,613
42,500 Enron Corp..................... 1,528,594 1,944,375
18,000 Mobil Corp..................... 1,625,905 2,178,000
29,800 Unocal Corp.................... 1,224,012 1,214,350
---------- ----------
6,015,521 7,465,338
---------- ----------
PHARMACEUTICAL -- 6.09%
58,600 Alza Corp.*.................... 1,686,921 1,655,450
31,100 Amgen Inc.*.................... 1,796,332 1,893,213
24,000 Pfizer Inc..................... 973,500 2,151,000
---------- ----------
4,456,753 5,699,663
---------- ----------
See accompanying notes to financial statements
F-4
<PAGE>
IBJ FUNDS TRUST
IBJ CORE EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- NOVEMBER 30, 1996
- --------------------------------------------------------------------------------
VALUE
SHARES COST (NOTE 2A)
------- ---- ------
RETAIL -- 8.02%
39,000 Kroger Co.*.................... $ 926,250 $ 1,798,875
39,000 May Department Stores Co....... 1,257,102 1,901,250
85,100 Price/Costco Inc.*............. 1,201,163 1,978,575
53,000 Revco D.S. Inc.*............... 1,232,534 1,828,500
----------- -----------
4,617,049 7,507,200
----------- -----------
TELECOMMUNICATIONS -- 6.08%
58,199 360 Communications Co.*........ 1,242,858 1,382,226
9,236 Lucent Technologies Inc........ 398,653 473,345
35,300 SBC Communications Inc......... 1,541,117 1,857,663
47,400 Sprint Corp.................... 1,164,435 1,984,875
----------- -----------
4,347,063 5,698,109
----------- -----------
TEXTILES/APPAREL -- 1.74%
53,100 Jones Apparel Group Inc.*...... 630,307 1,632,825
----------- -----------
TOBACCO -- 0.88%
8,000 Philip Morris Companies Inc.... 726,224 825,000
----------- -----------
TRANSPORTATION -- 3.75%
35,000 Kansas City
Southern Industries, Inc.... 1,577,178 1,758,750
19,500 Norfolk Southern Corp.......... 1,570,497 1,755,000
----------- -----------
3,147,675 3,513,750
----------- -----------
UTILITIES-ELECTRIC -- 4.02%
55,400 Cinergy Corp................... 1,678,095 1,855,901
41,100 Duke Power Co.................. 1,743,973 1,906,013
----------- -----------
3,422,068 3,761,914
----------- -----------
Total Common Stocks ........... 66,145,893 91,576,322
----------- -----------
SHORT TERM INVESTMENTS -- 2.57%
2,404,534 TempCash Provident Money
Market Investment Fund...... 2,404,534 2,404,534
----------- -----------
TOTAL SHORT-TERM
INVESTMENTS ................ 2,404,534 2,404,534
----------- -----------
TOTAL INVESTMENTS -- 100.34%$ $68,550,427+ 93,980,856
===========
LIABILITIES, IN EXCESS OF CASH
AND OTHER ASSETS-- (0.34%) . (320,824)
-----------
NET ASSETS-- 100.00% .......... $93,660,032
===========
*Represents non-income producing securities.
+Cost for book and tax purposes is the same.
See accompanying notes to financial statements
F-5
<PAGE>
IBJ FUNDS TRUST
IBJ GROWTH AND INCOME FUND
PORTFOLIO OF INVESTMENTS - NOVEMBER 30, 1996
- --------------------------------------------------------------------------------
VALUE
SHARES COST (NOTE 2A)
------- ---- ------
COMMON STOCKS--48.49%
AEROSPACE/DEFENSE -- 2.25%
13,200 Raytheon Co.................... $ 460,642 $ 674,850
5,500 United Technologies Corp....... 595,896 771,375
---------- ----------
1,056,538 1,446,225
---------- ----------
AUTOMOBILES -- 0.61 %
11,600 Echlin Inc..................... 393,192 390,050
---------- ----------
BANKING -- 3.15%
5,900 First American Corp............ 212,263 337,775
7,400 NationsBank Corp............... 356,569 766,825
21,900 Signet Banking Corp............ 484,700 662,475
900 Wells Fargo & Co............... 239,529 256,163
---------- ----------
1,293,061 2,023,238
---------- ----------
BEVERAGES -- 0.87%
18,800 Pepsico Inc.................... 584,353 561,650
---------- ----------
BUILDING MATERIALS -- 0.40%
4,500 Sherwin-Williams Co............ 157,935 255,375
---------- ----------
BUSINESS SERVICES -- 1.91%
13,700 Automatic Data
Processing Inc.............. 417,022 587,388
23,100 Reynolds &
Reynolds Co................. 389,734 641,025
---------- ----------
806,756 1,228,413
---------- ----------
CHEMICALS -- 2.53%
9,900 Air Products & Chemicals Inc. 524,633 688,050
14,500 Monsanto Co.................... 244,278 576,375
8,900 Morton International Inc....... 366,227 359,338
---------- ----------
1,135,138 1,623,763
---------- ----------
ELECTRONICS -- 4.20%
7,600 General Electric Co............ 434,850 790,400
11,800 Hewlett-Packard Co............. 324,673 635,725
16,700 Molex Inc...................... 489,312 651,300
11,200 Motorola Inc................... 670,703 620,200
---------- ----------
1,919,538 2,697,625
---------- ----------
ENTERTAINMENT -- 1.85%
9,100 The Walt Disney Co............. 521,003 671,125
12,700 Time Warner Inc................ 481,570 517,525
---------- ----------
1,002,573 1,188,650
---------- ----------
FINANCIAL SERVICES -- 1.06%
7,200 Household International Inc.... 289,994 682,200
---------- ----------
FOOD -- 2.93%
15,800 Nabisco Holdings
Corp. Class A............... 438,399 612,250
17,200 Sara Lee Corp.................. 481,622 675,100
17,400 Sysco Corp..................... 539,075 593,775
---------- ----------
1,459,096 1,881,125
---------- ----------
HOUSEHOLD PRODUCTS -- 0.99%
6,900 Colgate-Palmolive Co........... 445,958 639,113
---------- ----------
INSURANCE -- 2.08%
6,000 American International
Group Inc................... 407,987 690,000
21,100 TIG Holdings Inc............... 472,889 643,550
---------- ----------
880,876 1,333,550
---------- ----------
MACHINES -- 1.01%
12,200 Dover Corp..................... 382,594 651,175
---------- ----------
MANUFACTURING -- 1.06%
9,300 Allied Signal Inc.............. 328,987 681,225
---------- ----------
MEDICAL -- 0.98%
15,750 Columbia HCA
Healthcare Corp............. 434,174 630,000
---------- ----------
METALS -- 1.40%
9,100 Aluminum Company of
America..................... 364,561 578,987
16,100 Worthington Industries Inc..... 332,875 319,988
---------- ----------
697,436 898,975
---------- ----------
OIL/GAS -- 3.99%
5,300 Atlantic Richfield Co.......... 577,671 737,363
14,500 Enron Corp..................... 518,718 663,375
6,200 Mobil Corp..................... 582,403 750,200
10,200 Unocal Corp.................... 418,938 415,650
---------- ----------
2,097,730 2,566,588
---------- ----------
PHARMACEUTICAL -- 2.94%
20,200 Alza Corp. *................... 580,953 570,650
10,600 Amgen Inc.*.................... 612,984 645,275
7,500 Pfizer Inc..................... 310,679 672,188
---------- ----------
1,504,616 1,888,113
---------- ----------
RETAIL -- 4.01%
13,300 Kroger Co.*.................... 315,875 613,463
14,000 May Department Stores Co....... 508,486 682,500
28,000 Price/Costco Inc.*............. 394,625 651,000
18,200 Revco D.S. Inc.*............... 424,226 627,900
---------- ----------
1,643,212 2,574,863
---------- ----------
See accompanying notes to financial statements
F-6
<PAGE>
IBJ FUNDS TRUST
IBJ GROWTH AND INCOME FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) - NOVEMBER 30, 1996
- --------------------------------------------------------------------------------
SHARES/ VALUE
PRINCIPAL COST (NOTE 2A)
--------- ---- ------
TELECOMMUNICATIONS -- 3.04%
20,133 360 Communications Co. * ...... $ 433,508 $ 478,159
3,305 Lucent Technologies Inc. ...... 147,237 169,380
12,500 SBC Communications Inc. ....... 539,556 657,812
15,400 Sprint Corp ................... 388,016 644,875
---------- ----------
1,508,317 1,950,226
---------- ----------
TEXTILES/APPAREL -- 0.95%
19,900 Jones Apparel Group Inc.* ..... 249,896 611,924
---------- ----------
TOBACCO -- 0.42%
2,600 Philip Morris Companies Inc.... 236,023 268,124
---------- ----------
TRANSPORTATION -- 1.84%
11,900 Kansas City Southern
Industries, Inc............. 531,284 597,974
6,500 Norfolk Southern Corp.......... 523,775 585,000
---------- ----------
1,055,059 1,182,974
---------- ----------
UTILITIES-ELECTRIC -- 2.02%
19,100 Cinergy Corp................... 578,327 639,850
14,200 Duke Power Co.................. 610,968 658,525
---------- ----------
1,189,295 1,298,375
---------- ----------
TOTAL COMMON STOCKS ........... 22,752,347 31,153,539
---------- ----------
U.S. GOVERNMENT OBLIGATIONS -- 18.73%
$2,000,000 FHLB Discount Notes
due 1/9/1997................ 1,989,182 1,989,182
500,000 FHLB Medium Term Notes
6.07%, 6/30/2003............ 489,755 498,005
500,000 FHLMC 6.54%, 3/21/2001 ........ 492,730 500,790
500,000 FHLMC 6.56%, 2/1/2006 ......... 499,687 496,770
2,000,000 FHLMC Discount Notes
due 12/20/1996.............. 1,994,616 1,994,616
2,500,000 FHLMC Discount Notes
due 2/10/1997............... 2,475,153 2,473,689
500,500 FNMA 6.50%, 8/25/2004 ......... 462,865 504,070
2,000,000 FNMA Discount Notes
due 1/17/1997............... 1,986,343 1,985,817
500,000 FNMA Medium Term Notes
7.52%, 4/23/2004............ 494,766 516,745
55,870 GNMA Pool #55056 13.00%,
3/15/2012................... 62,272 62,832
23,073 GNMA Pool #102470 13.00%,
10/15/2013.................. 25,707 25,917
487,444 GNMA Pool #406475 7.00%,
4/15/2026................... 472,287 484,748
491,426 GNMA Pool #422801 7.50%,
5/15/2026................... 487,395 498,485
---------- ----------
TOTAL U.S. GOVERNMENT
OBLIGATIONS ................ 11,932,758 12,031,666
---------- ----------
U.S. TREASURY OBLIGATIONS -- 19.07%
1,000,000 Notes 5.50%, 9/30/1997......... 1,000,703 1,000,790
1,250,000 Notes 5.75%, 10/31/1997 ....... 1,252,510 1,253,775
1,000,000 Notes 6.00%, 9/30/1998......... 1,002,492 1,007,800
1,250,000 Notes 7.00%, 4/15/1999......... 1,275,620 1,286,812
1,250,000 Notes 6.375%, 5/15/1999 ....... 1,269,879 1,270,150
1,750,000 Notes 6.375%, 3/31/2001 ....... 1,770,463 1,786,767
1,500,000 Notes 6.25%, 2/15/2003......... 1,503,247 1,525,830
750,000 Notes 6.50%, 5/15/2005......... 776,124 772,567
1,000,000 Notes 6.50%, 8/15/2005......... 985,000 1,030,030
1,250,000 Notes 6.875%, 5/15/2006 ....... 1,311,286 1,320,725
---------- ----------
TOTAL U.S. TREASURY
OBLIGATIONS ................ 12,147,324 12,255,246
---------- ----------
CORPORATE OBLIGATIONS -- 11.22%
AUTOMOBILES -- 0.64%
400,000 GMAC Notes 7.00%,
3/1/2000.................... 402,992 409,000
---------- ----------
BANKING -- 1.44%
250,000 BankAmerica Corp.
Medium Term Notes
7.125%, 5/12/2005........... 252,715 257,500
250,000 JP Morgan Sub Notes
7.625%, 9/15/2004........... 248,078 268,125
400,000 Old Kent Financial
Sub. Notes 6.625%,
11/15/2005.................. 397,808 397,000
---------- ----------
898,601 922,625
---------- ----------
CHEMICALS -- 0.40%
250,000 Dupont El de Nemours
Medium Term Notes
8.35%, 5/15/1998............ 251,448 258,750
---------- ----------
DURABLE GOODS -- 0.34%
215,000 Xerox Corp. Debs. 9.625%,
9/1/1997.................... 217,822 220,960
---------- ----------
See accompanying notes to financial statements
F-7
<PAGE>
IBJ FUNDS TRUST
IBJ GROWTH AND INCOME FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) - NOVEMBER 30, 1996
- --------------------------------------------------------------------------------
VALUE
PRINCIPAL COST (NOTE 2A)
--------- ---- ------
FINANCIAL SERVICES -- 1.20%
$250,000 Associates Corp. N.A.
Sr. Notes 7.50%,
4/15/2002................... $ 251,190 $ 264,062
250,000 Commercial Credit Co.
Notes 6.375%, 9/15/2002..... 250,000 251,562
250,000 Heller Financial Notes 6.50%,
5/15/2000................... 249,515 252,812
---------- -----------
750,705 768,436
---------- -----------
FOOD -- 0.54%
350,000 Nabisco Inc. Notes
6.85%, 6/15/2005............ 356,756 347,813
---------- -----------
FOREST PRODUCTS & PAPER -- 0.53%
350,000 Boise Cascade Co. Debs.
7.35%, 2/1/2016............. 349,699 339,500
---------- -----------
OIL/GAS -- 0.58%
350,000 Amoco Canada Debs.
7.95%, 10/1/2022............ 361,246 371,438
---------- -----------
TELEPHONE -- 0.63%
400,000 Southwestern Bell Capital
Medium Term Notes
6.45%, 1/20/1998............ 401,956 402,500
---------- -----------
TRANSPORTATION -- 0.96%
300,000 Canadian National Railway
Notes 7.00%, 3/15/2004...... 303,530 304,875
300,000 CSX Corp. Notes
7.00%, 9/15/2002............ 299,280 310,875
---------- -----------
602,810 615,750
---------- -----------
UTILITIES -- 3.97%
300,000 Central Power & Light Notes
6.875%, 2/1/2003............ 307,262 308,250
250,000 Delmarva Power & Light
Notes 6.40%, 7/1/2003 ...... 248,473 248,750
250,000 Hydro Quebec Medium Term
Notes 8.59%, 8/22/2001 ..... 251,199 273,125
400,000 Illinois Power Notes
6.50%, 8/1/2003............. 402,078 401,500
350,000 Jersey Central Power & Light
Notes 7.125%,
10/1/2004................... 360,070 353,938
400,000 New Orleans Public
Service Inc. Notes
8.00%, 3/1/2006............. 396,580 415,500
300,000 Pacific Gas & Electric Medium
Term Notes
9.08%,12/15/1997............ 303,163 309,375
250,000 Philadelphia Electric Notes
6.375%, 8/15/2005........... 245,606 242,500
---------- -----------
2,514,431 2,552,938
---------- -----------
TOTAL CORPORATE OBLIGATIONS ... 7,108,466 7,209,710
---------- -----------
MUNICIPAL OBLIGATIONS -- 0.58%
338,000 Halifax NC Regional
Economic Development
Notes 9.25%, 10/1/2005...... 343,601 371,378
---------- -----------
TOTAL MUNICIPAL OBLIGATIONS ... 343,601 371,378
---------- -----------
SUPRA-NATIONAL OBLIGATIONS -- 0.42%
250,000 African Development
Bank Sub. Notes
7.70%, 7/15/2002............ 259,531 268,127
---------- -----------
TOTAL SUPRA-NATIONAL
OBLIGATIONS ................ 259,531 268,127
---------- -----------
SHORT TERM INVESTMENTS -- 2.20%
1,413,219 TempCash Provident Money
Market Investment Fund...... 1,413,219 1,413,219
---------- -----------
Total Short Term
Investments................. 1,413,219 1,413,219
---------- -----------
TOTAL INVESTMENTS -- 100.72%$ 55,957,246+ 64,702,885
==========
LIABILITIES, IN EXCESS OF CASH
AND OTHER ASSETS-- (0.72%) (453,271)
-----------
NET ASSETS-- 100.00% .......... $64,249,614
===========
*Represents non-income producing securities.
+Cost for book and tax purposes is the same.
See accompanying notes to financial statements
F-8
<PAGE>
IBJ FUNDS TRUST
PORTFOLIO OF INVESTMENTS (CONTINUED) - NOVEMBER 30, 1996
- --------------------------------------------------------------------------------
*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
F-9
<PAGE>
IBJ FUNDS TRUST
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RESERVE MONEY
MARKET FUND BOND FUND
----------- -----------
ASSETS
<S> <C> <C>
Investments, at value (amortized cost $33,725,174, cost
$27,316,851, $68,550,427, $55,957,246).......................... $33,725,174 $27,726,703
Cash.............................................................. 597,742 --
Receivable for investments sold................................... -- 1,283,476
Interest receivable............................................... 11,711 401,300
Dividends receivable.............................................. 1,697 2,956
Deferred organization expenses (Note 2e).......................... 18,223 18,223
----------- -----------
Total assets.................................................. 34,354,547 29,432,658
----------- -----------
LIABILITIES
Payable for investments purchased................................. -- 1,528,397
Payable to custodian.............................................. -- 46,164
Advisory fee payable (Note 3)..................................... -- 8,929
Administrative fee payable (Note 3)............................... 4,338 3,348
Accrued expenses.................................................. 67,389 63,283
----------- -----------
Total liabilities............................................. 71,727 1,650,121
----------- -----------
NET ASSETS........................................................ $34,282,820 $27,782,537
=========== ===========
NET ASSETS CONSIST OF:
Capital Stock, $.001 par value
per share; (unlimited shares authorized)........................ $ 34,290 $ 2,718
Additional paid-in capital........................................ 34,255,564 27,339,597
Accumulated undistributed/(excess distributions of) net
investment income............................................... -- --
Accumulated undistributed net realized gain/(loss) on investments. (7,034) 30,370
Net unrealized appreciation of investments........................ -- 409,852
----------- -----------
NET ASSETS........................................................ $34,282,820 $27,782,537
=========== ===========
SHARES OF BENEFICIAL INTEREST
Premium Class:
Net assets........................................................ $ 13,665 $ 14,630
=========== ===========
Shares of beneficial interest outstanding......................... 13,669 1,432
=========== ===========
Net asset value per share (Net Assets / Shares Outstanding)....... $ 1.00 $ 10.22
Service Class:
Net assets........................................................ $34,269,155 $27,767,907
=========== ===========
Shares of beneficial interest outstanding......................... 34,276,185 2,716,462
=========== ===========
Net asset value per share (Net Assets / Shares Outstanding)....... $ 1.00 $ 10.22
</TABLE>
<TABLE>
<CAPTION>
CORE EQUITY GROWTH AND
FUND INCOME FUND
---------- -----------
ASSETS
<S> <C> <C>
Investments, at value (amortized cost $33,725,174, cost
$27,316,851, $68,550,427, $55,957,246).......................... $93,980,856 $64,702,885
Cash.............................................................. 123,928 --
Receivable for investments sold................................... 704,672 1,377,945
Interest receivable............................................... -- 281,005
Dividends receivable.............................................. 153,826 53,998
Deferred organization expenses (Note 2e).......................... 18,223 18,223
----------- -----------
Total assets.................................................. 94,981,505 66,434,056
----------- -----------
LIABILITIES
Payable for investments purchased................................. 1,224,012 1,951,370
Payable to custodian.............................................. -- 127,538
Advisory fee payable (Note 3)..................................... 38,307 26,070
Administrative fee payable (Note 3)............................... 11,492 7,821
Accrued expenses.................................................. 47,662 71,643
----------- -----------
Total liabilities............................................. 1,321,473 2,184,442
----------- -----------
NET ASSETS........................................................ $93,660,032 $64,249,614
=========== ===========
NET ASSETS CONSIST OF:
Capital Stock, $.001 par value
per share; (unlimited shares authorized)........................ $ 6,093 $ 5,034
Additional paid-in capital........................................ 57,974,289 52,441,157
Accumulated undistributed/(excess distributions of) net
investment income............................................... 386,120 (9,267)
Accumulated undistributed net realized gain/(loss) on investments. 9,863,101 3,067,051
Net unrealized appreciation of investments........................ 25,430,429 8,745,639
----------- -----------
NET ASSETS........................................................ $93,660,032 $64,249,614
=========== ===========
SHARES OF BENEFICIAL INTEREST
Premium Class:
Net assets........................................................ $ 20,202 $ 17,230
=========== ===========
Shares of beneficial interest outstanding......................... 1,314 1,350
=========== ===========
Net asset value per share (Net Assets / Shares Outstanding)....... $ 15.37 $ 12.76
Service Class:
Net assets........................................................ $93,639,830 $64,232,384
=========== ===========
Shares of beneficial interest outstanding......................... 6,091,390 5,032,961
=========== ===========
Net asset value per share (Net Assets / Shares Outstanding)....... $ 15.37 $ 12.76
</TABLE>
See accompanying notes to financial statements
F-10
<PAGE>
IBJ FUNDS TRUST
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED NOVEMBER 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RESERVE MONEY CORE EQUITY GROWTH AND
MARKET FUND BOND FUND FUND INCOME FUND
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Investment income:
Interest income .................................................. $ 1,877,796 $ 1,683,989 $ 13,361 $1,687,563
Dividend income .................................................. 35,221 36,498 1,609,449 572,564
------------ ------------ ------------ ------------
Total Income ................................................... 1,913,017 1,720,487 1,622,810 2,260,127
------------ ------------ ------------ ------------
Expenses:
Advisory (Note 3) ................................................ 106,107 132,005 533,300 341,198
Administrative services (Note 3) ................................. 52,601 39,602 133,328 85,315
Fund accounting fees and expenses (Note 3) ....................... 30,668 41,721 33,836 43,504
Audit ............................................................ 15,850 23,850 23,850 23,850
Legal ............................................................ 25,253 17,604 62,403 39,867
Registration ..................................................... 4,635 2,510 1,910 4,910
Custodian fees ................................................... 14,034 10,490 35,446 22,424
Amortization of organization expense ............................. 5,768 5,768 5,768 5,768
Printing ......................................................... 4,060 2,269 2,864 2,047
Trustees' ........................................................ 9,067 9,067 9,067 9,067
Insurance ........................................................ 2,529 2,784 8,679 5,313
Transfer and shareholder servicing agent (Note 3) ................ 9,696 5,881 8,396 5,563
Miscellaneous .................................................... 52,196 28,542 21,105 31,695
------------ ------------ ------------ ------------
Total expenses before waivers/reimbursements ................... 332,464 322,093 879,952 620,521
Less expenses waived/reimbursed ................................ (106,107) (26,400) (88,874 ) (56,745)
------------ ------------ ------------ ------------
Net expenses ................................................... 226,357 295,693 791,078 563,776
------------ ------------ ------------ ------------
Net investment income .............................................. 1,686,660 1,424,794 831,732 1,696,351
------------ ------------ ------------ ------------
Net realized and unrealized gain/(loss) on investments:
Net realized gain/(loss) on investments ............................ (4,100) 30,875 9,863,103 3,067,207
Net increase in unrealized appreciation/depreciation of
investments ...................................................... -- (312,253) 9,092,966 3,016,124
------------ ------------ ------------ ------------
Net realized and unrealized gain/(loss) on investments ......... (4,100) (281,378) 18,956,069 6,083,331
------------ ------------ ------------ ------------
Net increase in net assets resulting from operations ............... $ 1,682,560 $ 1,143,416 $19,787,801 $ 7,779,682
============ ============ ============ ============
</TABLE>
See accompanying notes to financial statements
F-11
<PAGE>
<TABLE>
<CAPTION>
IBJ FUNDS TRUST
Statement of Changes in Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
Reserve Money Market Fund
-------------------------------------
For the For the Period
Year Ended February 1, 1995* to
November 30, 1996 November 30, 1995
----------------- -----------------
<S> <C> <C>
Operations:
Net investment income........................................................... $ 1,686,660 $1,127,106
Net realized gain/(loss) on investments......................................... (4,100) (2,934)
Net change in unrealized appreciation/(depreciation) of
investments................................................................... -- --
----------- -----------
Net increase in net assets resulting from operations................................ 1,682,560 1,124,172
----------- -----------
Dividends to shareholders from net investment income:
Premium Class................................................................... (607) (564)
Service Class................................................................... (1,686,053) (1,126,542)
----------- -----------
(1,686,660) (1,127,106)
----------- -----------
Distributions to shareholders from realized gain on investments:
Premium Class................................................................... -- --
Service Class................................................................... -- --
----------- -----------
-- --
----------- -----------
Decrease in net assets resulting from dividends and distributions
to shareholders............................................................... (1,686,660) (1,127,106)
----------- -----------
Capital Share Transactions:
Proceeds from sales of shares:
Premium Class................................................................... -- 60
Service Class................................................................... 121,313,703 66,759,082
----------- -----------
121,313,703 66,759,142
----------- -----------
Net asset value of shares issued to shareholders in reinvestment of dividends
and distributions:
Premium Class................................................................... 607 564
Service Class................................................................... 1,686,053 1,126,542
----------- -----------
1,686,660 1,127,106
----------- -----------
Net asset value of shares redeemed:
Premium Class................................................................... (62) --
Service Class................................................................... (117,669,088) (38,952,607)
----------- -----------
(117,669,150) (38,952,607)
----------- -----------
Net increase in net assets from capital share transactions...................... 5,331,213 28,933,641
----------- -----------
Total increase (decrease) in net assets............................................. 5,327,113 28,930,707
Net assets:
Beginning of period............................................................. 28,955,707 25,000
----------- -----------
End of period .................................................................. $34,282,820 $28,955,707
=========== ===========
Undistributed/(excess distributions
of) net investment income .................................................... -- --
- ------------------
*Commencement of operations.
</TABLE>
See accompanying notes to financial statements
F-12
<PAGE>
<TABLE>
<CAPTION>
IBJ FUNDS TRUST
Statement of Changes in Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
Bond Fund Core Equity Fund
------------------------------------- ---------------------------------------
For the For the Period For the For the Period
Year Ended February 1, 1995* to Year Ended February 1, 1995* to
November 30, 1996 November 30, 1995 November 30, 1996 November 30, 1995
----------------- ----------------- ----------------- -----------------
Operations:
<S> <C> <C> <C> <C>
Net investment income....................... $1,424,794 $1,088,323 $ 831,732 $ 839,554
Net realized gain/(loss) on investments..... 30,875 954,547 9,863,103 3,055,303
Net change in unrealized appreciation/
(depreciation) of investments............. (312,253) 722,105 9,092,966 16,337,463
---------- ---------- ---------- ----------
Net increase in net assets resulting from
operations................................. 1,143,416 2,764,975 19,787,801 20,232,320
---------- ---------- ---------- ----------
Dividends to shareholders from net investment income:
Premium Class............................... (759) (623) (247) --
Service Class............................... (1,424,035) (1,087,700) (1,284,919) --
---------- ---------- ---------- ----------
(1,424,794) (1,088,323) (1,285,166) --
---------- ---------- ---------- ----------
Distributions to shareholders from realized gain on investments:
Premium Class............................... (495) -- (569) --
Service Class............................... (954,557) -- (3,054,736) --
---------- ---------- ---------- ----------
(955,052) -- (3,055,305) --
---------- ---------- ---------- ----------
Decrease in net assets resulting from
dividends and distributions
to shareholders............................. (2,379,846) (1,088,323) (4,340,471) --
---------- ---------- ---------- ----------
Capital Share Transactions:
Proceeds from sales of shares:
Premium Class............................... -- 60 -- 60
Service Class............................... 11,985,540 29,612,433 30,155,508 89,149,468
---------- ---------- ---------- ----------
11,985,540 29,612,493 30,155,508 89,149,528
---------- ---------- ---------- ----------
Net asset value of shares issued to
shareholders in reinvestment of dividends
and distributions:
Premium Class............................... 1,254 623 816 --
Service Class............................... 2,378,592 1,087,700 4,339,655 --
---------- ---------- ---------- ----------
2,379,846 1,088,323 4,340,471 --
---------- ---------- ---------- ----------
Net asset value of shares redeemed:
Premium Class............................... (64) -- (92) --
Service Class............................... (12,209,202) (5,539,621) (42,895,923) (22,794,110)
---------- ---------- ---------- ----------
(12,209,266) (5,539,621) (42,896,015) (22,794,110)
---------- ---------- ---------- ----------
Net increase in net assets from capital
share transactions....................... 2,156,120 25,161,195 (8,400,036) 66,355,418
---------- ---------- ---------- ----------
Total increase (decrease) in net assets......... 919,690 26,837,847 7,047,29 86,587,738
Net assets:
Beginning of period......................... 26,862,847 25,000 86,612,738 25,000
---------- ---------- ---------- ----------
End of period .............................. $27,782,537 $26,862,847 $93,660,032 $86,612,738
========== ========== ========== ==========
Undistributed/(excess distributions
of) net investment income ................ -- -- $386,120 $839,554
- ------------------
*Commencement of operations.
</TABLE>
See accompanying notes to financial statements
F-13
<PAGE>
<TABLE>
<CAPTION>
IBJ FUNDS TRUST
Statement of Changes in Net Assets
- ----------------------------------------------------------------------------------------
Growth and Income Fund
-----------------------------------------
For the For the Period
Year Ended February 1, 1995* to
November 30, 1996 November 30, 1995
----------------- -----------------
<S> <C> <C>
Operations:
Net investment income....................... $1,696,351 $1,089,503
Net realized gain/(loss) on investments..... 3,067,207 1,173,268
Net change in unrealized appreciation/
(depreciation) of investments............. 3,016,124 5,729,515
----------- -----------
Net increase in net assets resulting from
operations.................................... 7,779,682 7,992,286
----------- -----------
Dividends to shareholders from net investment income:
Premium Class............................... (475) (348)
Service Class............................... (1,692,277) (1,102,021)
----------- -----------
(1,692,752) (1.102,369)
----------- -----------
Distributions to shareholders from realized gain on investments:
Premium Class............................... (352) --
Service Class............................... (1,173,072) --
----------- -----------
(1,173,424) --
----------- -----------
Decrease in net assets resulting from
dividends and distributions
to shareholders........................... (2,866,176) (1,102,369)
----------- -----------
Capital Share Transactions:
Proceeds from sales of shares:
Premium Class............................... -- 60
Service Class............................... 17,930,945 48,843,232
----------- -----------
17,930,945 48,843,292
----------- -----------
Net asset value of shares issued to
shareholders in reinvestment of dividends
and distributions:
Premium Class............................... 827 348
Service Class............................... 2,865,349 1,102,021
----------- -----------
2,866,176 1,102,369
----------- -----------
Net asset value of shares redeemed:
Premium Class............................... (79) --
Service Class............................... (12,059,267) (6,262,245)
----------- -----------
(12,059,346) (6,262,245)
----------- -----------
Net increase in net assets from capital
share transactions....................... 8,737,775 43,683,416
----------- -----------
Total increase (decrease) in net assets......... 13,651,281 50,573,333
Net assets:
Beginning of period......................... 50,598,333 25,000
----------- -----------
End of period .............................. $64,249,614 $50,598,333
=========== ===========
Undistributed/(excess distributions
of) net investment income ................ $(9,267) $(12,866)
- ------------------
*Commencement of operations.
</TABLE>
See accompanying notes to financial statements
F-14
<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.
F-15
<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 year ended November 30, 1996, the Adviser earned
fees of $106,107, $132,005, $533,300 and $341,198 for the Reserve Money Market
Fund, Bond Fund, Core Equity Fund and Growth and Income Fund, respectively. The
Adviser has voluntarily waived fees of $106,107, $26,400, $88,874 and $56,745
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
$52,601, $39,602, $133,328 and $85,315 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 year ended November 30, 1996, Furman Selz earned Transfer Agency fees of
$9,696, $5,881, $8,396 and $5,563 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 year ended November 30,
1996, Furman Selz earned Fund Accounting fees and expenses of $30,668, $41,721,
$33,836 and $43,504 for the Reserve Money Market Fund, Bond Fund, Core Equity
Fund and Growth and Income Fund, respectively.
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
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.
F-16
<PAGE>
IBJ FUNDS TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
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 year
ended November 30, 1996 were as follows:
<TABLE>
<CAPTION>
COMMON STOCKS & BONDS U.S. GOVERNMENT OBLIGATIONS
------------------------- ---------------------------
PURCHASES SALES PURCHASES SALES
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Bond Fund ................................ $ 2,636,105 $ 4,924,341 $37,207,797 $35,621,520
Core Equity Fund ......................... 22,435,463 34,469,103 -- --
Growth and Income Fund ................... 15,152,554 11,342,434 21,618,400 22,519,024
</TABLE>
(b) FEDERAL INCOME TAX BASIS. Gross unrealized appreciation and
depreciation on investment securities at November 30, 1996, 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................................. $ 451,665 $ (41,813) $ 409,852
Core Equity Fund.......................... 25,750,828 (320,399) 25,430,429
Growth and Income Fund.................... 8,893,602 (147,963) 8,745,639
</TABLE>
Note 5 -- FEDERAL INCOME TAXES.
For Federal income tax purposes, the Funds indicated below have capital
loss carryforwards at November 30, 1996, which are available to offset future
capital gains, if any:
CAPITAL LOSS
CARRYFORWARDS EXPIRES
------------- --------
Reserve Money Market Fund.................... $ 2,781 2003
4,253 2004
Bond Fund.................................... 102,125 2004
F-17
<PAGE>
IBJ FUNDS TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
NOTE 6 -- 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 year ended November 30, 1996
-------------------------------------------------------------------
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........................... 13,124 1,315 1,256 1,287
----------- --------- --------- ---------
Shares issued in reinvestment of dividends from net
investment income and capital gain distributions.... 607 123 64 69
Shares redeemed......................................... (62) (6) (6) (6)
----------- --------- --------- ---------
Net increase in shares.................................. 545 117 58 63
----------- --------- --------- ---------
Shares at end of period................................. 13,669 1,432 1,314 1,350
=========== ========= ========= =========
SERVICE CLASS
Shares at beginning of period........................... 28,945,517 2,505,331 6,675,290 4,292,094
----------- --------- --------- ---------
Shares sold............................................. 121,313,703 1,192,811 2,227,903 1,505,811
Shares issued in reinvestment of dividends from net
investment income and capital gain distributions.... 1,686,053 233,352 344,448 240,640
Shares redeemed......................................... (117,669,088) (1,215,032) (3,156,251) (1,005,584)
----------- --------- --------- ---------
Net increase/(decrease) in shares....................... 5,330,668 211,131 (583,900) 740,867
----------- --------- --------- ---------
Shares at end of period................................. 34,276,185 2,716,462 6,091,390 5,032,961
=========== ========= ========= =========
For the period February 1, 1995* to November 30, 1995
--------------------------------------------------------------------
Reserve Growth and
Money Market Bond Core Equity Income
Fund Fund Fund Fund
------------ ---------- ---------- ----------
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 -- 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 -- 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>
F-18
<PAGE>
BJ FUNDS Trust
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
NOTE 7 -- SUBSEQUENT EVENTS. Furman Selz has consummated an agreement
with BISYS Group, Inc. ("BISYS") whereby services currently provided to the
Trust by Furman Selz will be provided to the Trust by BISYS and certain of its
affiliates under new Administrative Services, Transfer Agency and Fund
Accounting Agreements between the Trust and BISYS.
F-19
<PAGE>
<TABLE>
<CAPTION>
IBJ FUNDS Trust
Financial Highlights (For a Share Outstanding Throughout the Period+)
- ---------------------------------------------------------------------------------------------------------
Reserve Money Market Fund
----------------------------------------------
For the period
For the year ended February 1, 1995* to
November 30, 1996 November 30, 1995
------------------- ---------------------
Premium Service Premium Service
Class Class Class Class
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period................. $1.00 $1.00 $1.00 $ 1.00
----- ------ ----- ------
Income from Investment Operations:
Net investment income............................ 0.05 0.05 0.04 0.04
Net realized and unrealized gain/(loss) on
investments.................................... -- -- -- --
----- ------ ----- ------
Total from Investment Operations................. 0.05 0.05 0.04 0.04
----- ------ ----- ------
Less Distributions:
Dividends from net investment income............. (0.05) (0.05) (0.04) (0.04)
Distributions from net realized capital gains.... -- -- -- --
----- ------ ----- ------
Total Distributions.............................. (0.05) (0.05) (0.04) (0.04)
----- ------ ----- ------
Net Asset Value, End of Period....................... $1.00 $1.00 $1.00 $ 1.00
===== ====== ===== ======
Total Return......................................... 4.88% 4.88% 4.55% 4.55%
Net Assets, End of Period (in thousands)............. $14 $34,269 $13 $28,943
Ratios to average net assets of:
Net investment income............................ 4.82% 4.82% 5.40%** 5.40%**
Expenses before waivers/reimbursements........... 0.95% 0.95% 0.92%** 0.92%**
Expenses net of waivers/reimbursements........... 0.65% 0.65% 0.64%** 0.64%**
Portfolio Turnover Rate.............................. N/A N/A N/A N/A
</TABLE>
<TABLE>
<CAPTION>
Bond Fund
----------------------------------------------
For the period
For the year ended February 1, 1995* to
November 30, 1996 November 30, 1995
----------------- ---------------------
Premium Service Premium Service
Class Class Class Class
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period................. $10.72 $10.72 $10.00 $ 10.00
----- ------ ----- ------
Income from Investment Operations:
Net investment income............................ 0.54 0.54 0.48 0.48
Net realized and unrealized gain/(loss) on
investments.................................... (0.12) (0.12) 0.72 0.72
------ ------ ------ -------
Total from Investment Operations................. 0.42 0.42 1.20 1.20
------ ------ ------ -------
Less Distributions:
Dividends from net investment income............. (0.54) (0.54) (0.48) (0.48)
Distributions from net realized capital gains.... (0.38) (0.38) -- --
------ ------ ------ -------
Total Distributions.............................. (0.92) (0.92) (0.48) (0.48)
------ ------ ------ -------
Net Asset Value, End of Period....................... $10.22 $ 10.22 $10.72 $ 10.72
====== ====== ====== =======
Total Return......................................... 4.25% 4.25% 12.28% 12.28%
Net Assets, End of Period (in thousands)............. $15 $27,768 $14 $26,849
Ratios to average net assets of:
Net investment income............................ 5.07% 5.07% 5.59%** 5.59%**
Expenses before waivers/reimbursements........... 1.22% 1.22% 1.22%** 1.22%**
Expenses net of waivers/reimbursements........... 1.12% 1.12% 1.12%** 1.12%**
Portfolio Turnover Rate.............................. 160% 160% 297% 297%
------------------
* Commencement of operations.
** Annualized.
+ Per Share amounts are based on the average number of shares outstanding.
See accompanying notes to financial statements
</TABLE>
F-20
<PAGE>
IBJ FUNDS Trust
Financial Highlights (For a Share Outstanding Throughout the Period+)
<TABLE>
<CAPTION>
CORE EQUITY FUND
----------------------------------------------
FOR THE PERIOD
FOR THE YEAR ENDED FEBRUARY 1, 1995* TO
NOVEMBER 30, 1996 NOVEMBER 30, 1995
------------------- --------------------
PREMIUM SERVICE PREMIUM SERVICE
CLASS CLASS CLASS CLASS
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period................. $12.97 $ 12.97 $10.00 $10.00
----- ------ ----- ------
Income from Investment Operations:
Net investment income............................ 0.14 0.14 0.13 0.13
Net realized and unrealized gain/(loss) on
investments.................................... 2.90 2.90 2.84 2.84
----- ------ ----- ------
Total from Investment Operations................. 3.04 3.04 2.97 2.97
----- ------ ----- ------
Less Distributions:
Dividends from net investment income............. (0.19) (0.19) -- --
Distributions from net realized capital gains.... (0.45) (0.45) -- --
----- ------ ----- ------
Total Distributions.............................. (0.64) (0.64) -- --
----- ------ ----- ------
Net Asset Value, End of Period....................... $15.37 $ 15.37 $12.97 $12.97
===== ====== ===== ======
Total Return......................................... 24.61% 24.61% 29.70% 29.70%
Net Assets, End of Period (in thousands)............. $20 $93,640 $16 $86,596
Ratios to average net assets of:
Net investment income............................ 0.93% 0.93% 1.30%** 1.29%**
Expenses before waivers/reimbursements........... 0.99% 0.99% 1.09%** 1.09%**
Expenses net of waivers/reimbursements........... 0.89% 0.89% 0.89%** 0.89%**
Portfolio Turnover Rate.............................. 27% 27% 37% 37%
Average Commission Rate(a)........................... $0.0776 $0.0776 -- --
</TABLE>
<TABLE>
<CAPTION>
GROWTH AND INCOME FUND
-------------------------------------------
FOR THE PERIOD
FOR THE YEAR ENDED FEBRUARY 1, 1995* TO
NOVEMBER 30, 1996 NOVEMBER 30, 1995
------------------ ------------------
PREMIUM SERVICE PREMIUM SERVICE
CLASS CLASS CLASS CLASS
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period................. $11.78 $ 11.79 $10.00 $ 10.00
----- ------ ----- ------
Income from Investment Operations:
Net investment income............................ 0.34 0.34 0.27 0.31
Net realized and unrealized gain/(loss) on
investments.................................... 1.26 1.26 1.79 1.79
----- ------ ----- ------
Total from Investment Operations................. 1.60 1.60 2.06 2.10
----- ------ ----- ------
Less Distributions:
Dividends from net investment income............. (0.35) (0.36) (0.28) (0.31)
Distributions from net realized capital gains.... (0.27) (0.27) -- --
----- ------ ----- ------
Total Distributions.............................. (0.62) (0.63) (0.28) (0.31)
----- ------ ----- ------
Net Asset Value, End of Period....................... $12.76 $ 12.76 $11.78 $ 11.79
===== ====== ===== ======
Total Return......................................... 14.08% 14.08% 20.72% 20.82%
Net Assets, End of Period (in thousands)............. $17 $64,232 $15 $50,583
Ratios to average net assets of:
Net investment income............................ 2.98% 2.98% 3.04%** 3.04%**
Expenses before waivers/reimbursements........... 1.14%** 1.15%**
Expenses net of waivers/reimbursements........... 0.99% 0.99% 1.04%** 1.05%**
Portfolio Turnover Rate.............................. 77% 77% 78% 78%
Average Commission Rate(a)........................... $0.0789 $0.0789 -- --
</TABLE>
- ------------------
* Commencement of operations.
** Annualized.
+ Per Share amounts are based on the average number of shares outstanding.
(a) For fiscal years beginning on or after September 1, 1995, a fund is required
to disclose its average commission rate per share for security trades on
which commissions are charged. This amount may vary from period to period
and fund to fund depending on the mix of trades executed in various markets
where trading practices and commission rate structures may differ.
See accompanying notes to financial statements
F-21
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To The Shareholders and Board of Trustees of IBJ Funds Trust:
We have audited the accompanying statements of assets and liabilities,
including the portfolios of investments, 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) as of November 30, 1996, and the related statements of
operations for the year then ended and the related statements of changes in net
assets and the financial highlights for the year ended November 30, 1996 and 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 audits.
We conducted our audits 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, 1996 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 audits provide 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, 1996, the results of their operations for the year then ended and
the changes in their net assets and their financial highlights for the periods
referred to above, in conformity with generally accepted accounting principles.
Coopers & Lybrand L.L.P.
New York, New York
January 22, 1997
F-22
<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, 1996
Statement of Operations for the year ended
November 30, 1996
Statement of Changes in Net Assets for the
period February 1, 1995 (commencement of
operations) to November 30, 1995 and for the
year ended November 30, 1996
Notes to Financial Statements
Financial Highlights for the period February
1, 1995 (commencement of operations) to
November 30, 1995 and for the year ended
November 30, 1996
(b) EXHIBITS
(1) Trust Instrument.*
(2) Amended 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) Administration Contract with BISYS Fund
Services Limited Partnership.
(5)(c) Fund Accounting Agreement with BISYS Fund
Services, Inc.
(6) Distribution Contract with IBJ Funds
Distributor, Inc.
<PAGE>
(7) None.
(8) Form of Custodian Contract between Registrant
and IBJ Schroder Bank & Trust Company.*
(9)(a) Transfer Agency Agreement with BISYS Fund
Services, Inc.
(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.*
(17) Financial Data Schedule
(18) Form of Rule 18f-3 Plan.*
OTHER EXHIBITS
(A) Power of Attorney
- --------
- 2 -
<PAGE>
*Filed with Post-Effective Amendment No.2 to Registration
Statement No.33-83430 on March 27, 1996, and incorporated herein
by reference.
- 3 -
<PAGE>
Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH
REGISTRANT.
None.
Item 26. NUMBER OF HOLDERS OF SECURITIES AT APRIL 1, 1997
Service Premium
------- -------
Reserve Money Market Fund 23 2
Bond Fund 13 2
Core Equity Fund 31 2
Growth and Income Fund 6 2
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~1.11 of the
Distribution Agreement 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
- 4 -
<PAGE>
policy 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 1.11 of the Distribution Agreement between Registrant and
IBJ Funds Distributor, Inc. limit the liability of IBJ Schroder
Bank & Trust Company and IBJ Funds Distributor, Inc. 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 Agreement 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.
- 5 -
<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
- ---------------------------------
Dennis G. Buchert President and Chief Executive
Officer
Alva O. Way Chairman of the Board
Eisuke Kano Vice Chairman
Donald H. McCree Vice President
The Industrial Bank of Japan
- ----------------------------
Yoh Kurosawa Chairman
Masao Nishimura President
Kunio Seiki Deputy President
Item 29. PRINCIPAL UNDERWRITER
(a) The principal underwriter is IBJ Funds
Distributor, Inc.
(b) Officers and Directors
Positions and
Name and Principal Positions and Offices Offices with
Business Address* with Registrant Underwriter
- ----------------- --------------------- -------------
- 6 -
<PAGE>
Lynn J. Mangum None Chairman/CEO
Robert J. McMullan None Executive Vice
President and
Treasurer
J. David Huber None President
Kevin J. Dell None Vice President/
General Counsel/
Secretary
Mark J. Rybarczyk None Senior Vice
President
Dennis Sheehan None Senior Vice
President
W. Anthony Turner President Senior Vice
President
George Martinez None Senior Vice
President
Dale Smith None Vice President
Michael Burns None Vice President
Bruce Treff Assistant Secretary Assistant Secretary
Annamaria Porcaro 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 BISYS
Fund Services, Inc.
Item 31. MANAGEMENT SERVICES
Not applicable.
- ----------------------------
*3435 Stelzer Road, Columbus, Ohio 43219.
- 7 -
<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
- 8 -
<PAGE>
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/ W. Anthony Turner President April 15, 1997
- --------------------
W. Anthony Turner
/s/ Michael Sakala Treasurer April 15, 1997
- ------------------
Michael Sakala
*Robert H. Dunker
- -----------------
Robert H. Dunker Trustee April 15, 1997
*Stephen V.R. Goodhue
- ---------------------
Stephen V.R. Goodhue Trustee April 15, 1997
*Edward F. Ryan
- ---------------
Edward F. Ryan Trustee April 15, 1997
*George Stewart
- ---------------
George Stewart Trustee April 15, 1997
By:/s/W. Anthony Turner
---------------------
*W. Anthony Turner
Attorney-in-Fact
- ---------------------------
*Pursuant to Power of Attorney filed herewith.
- 10 -
<PAGE>
EXHIBIT INDEX
Exhibit
Number Document
- ------- --------
(2) Amended By-laws of the Registrant.
(5)(b) Master Administration Agreement with BISYS
Fund Services Limited Partnership.
(5)(c) Fund Accounting Agreement with BISYS Fund
Services, Inc.
(6) Master Distribution Agreement with IBJ Funds
Distributor, Inc.
(9)(a) Transfer Agency Agreement with BISYS Fund
Services, Inc.
(11) Consent of Coopers & Lybrand L.L.P.
Independent Accountants.
EX-27 Financial Data Schedule
Other Exhibits
--------------
EX-99.a Power of Attorney
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
- -------------------------------------------------------------------------------
EXHIBITS
to
POST-EFFECTIVE AMENDMENT NO. 4 TO
FORM N-1A
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
AND
THE INVESTMENT COMPANY ACT OF 1940
- -------------------------------------------------------------------------------
IBJ FUNDS TRUST
Exhibit 2
As amended March 20, 1997
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 President, Treasurer and Secretary shall be
chosen by 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.
- 2 -
<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.
- 3 -
<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.
- 4 -
<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
- 5 -
<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
- 6 -
<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.
- 7 -
<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.
- 8 -
<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.
- 9 -
<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
- 10 -
<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.
- 11 -
<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
- 12 -
<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.
- 13 -
<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.
- 14 -
<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.
- 15 -
<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.
- 16 -
<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
- 17 -
<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.
- 18 -
<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
- 19 -
<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.
- 20 -
<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
- 21 -
<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
- 22 -
<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.
- 23 -
<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.
- 24 -
<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 -
ADMINISTRATION AGREEMENT
THIS AGREEMENT is made as of this 1st day of October, 1996, by and
between the IBJ FUNDS TRUST, a Delaware business trust (the "Trust"), and BISYS
FUND SERVICES LIMITED PARTNERSHIP, d/b/a BISYS FUND SERVICES (the
"Administrator"), an Ohio limited partnership.
WHEREAS, the Trust is an open-end management investment company
registered under the Investment Trust Act of 1940, as amended (the "1940 Act"),
consisting of several series of shares of beneficial interest ("Shares"); and
WHEREAS, the Trust desires the Administrator to provide, and the
Administrator is willing to provide, management and administrative services to
such series of the Trust as the Trust and the Administrator may agree on
("Portfolios") and as listed on Schedule A attached hereto and made a part of
this Agreement, on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Trust and the Administrator hereby agree as follows:
ARTICLE 1. RETENTION OF THE ADMINISTRATOR; CONVERSION TO THE
SERVICES. The Trust hereby engages the Administrator to act as the administrator
of the Portfolios and to furnish the Portfolios with the management and
administrative services as set forth in Article 2 below (collectively, the
"Services"), and, in connection therewith, the Trust agrees to convert to the
Administrator's data processing systems and software (the "BISYS System") as
necessary in order to receive the Services. The Trust shall cooperate with the
Administrator to provide the Administrator with all necessary information and
assistance required to successfully convert to the BISYS System. The
Administrator shall provide the Trust with a schedule relating to such
conversion and the parties agree that the conversion may progress in stages. The
date upon which all Services shall have been converted to the BISYS System shall
be referred to herein as the "Conversion Date." The Administrator hereby accepts
such engagement and agrees to perform the Services commencing, with respect to
each individual Service, on the date that the conversion of such Service to the
BISYS System has been completed. The Administrator shall determine in accordance
with its normal acceptance procedures when the applicable Service has been
successfully converted.
The Administrator shall, for all purposes herein, be deemed to be an
independent contractor and, unless otherwise expressly provided or authorized,
shall have no authority to act for or represent the Trust in any way and shall
not be deemed an agent of the Trust.
ARTICLE 2. ADMINISTRATIVE SERVICES. The Administrator shall perform
or supervise the performance by others of administrative services in connection
with the operations of the Portfolios, and, on behalf of the Trust, will
<PAGE>
investigate, assist in the selection of and conduct relations with custodians,
depositories, accountants, legal counsel, underwriters, brokers and dealers,
corporate fiduciaries, insurers, banks and persons in any other capacity deemed
to be necessary or desirable for the Portfolios' operations. The Administrator
shall provide the Trustees of the Trust with such reports regarding investment
performance as they may reasonably request but shall have no responsibility for
supervising the performance by any investment adviser or sub-adviser of its
responsibilities.
The Administrator shall provide the Trust with regulatory reporting,
all necessary office space, equipment, personnel, compensation and facilities
(including facilities for meetings of shareholders ("Shareholders") and Trustees
of the Trust) for handling the affairs of the Portfolios and such other services
as the Administrator shall, from time to time, determine to be necessary to
perform its obligations under this Agreement. In addition, at the request of the
Board of Trustees, the Administrator shall make reports to the Trust's Trustees
concerning the performance of its obligations hereunder.
Without limiting the generality of the foregoing, the Administrator
shall:
(a) calculate contractual Trust expenses and control all
disbursements for the Trust, and as appropriate compute
the Trust's yields, total return, expense ratios,
portfolio turnover rate and, if required, portfolio
average dollar-weighted maturity;
(b) prepare and file with the SEC Post-Effective
Amendments to the Company's Registration Statement and
supplements thereto, Notices of Annual or Special
Meetings of Shareholders and Proxy materials relating to
such meetings; coordinate the printing of such
Post-Effective Amendments, supplements, and Proxy
materials; accumulate information for and, subject to
the approval by the Company's Treasurer, prepare reports
to the Company's shareholders of record and the SEC
including, but not necessarily limited to, the
preparation and filing of (i) Semi-Annual Reports on
Form N-SAR and (ii) Notices pursuant to Rule 24f-2;
(c) prepare such reports, applications and documents
(including reports regarding the sale and redemption of
Shares as may be required in order to comply with
Federal and state securities law) as may be necessary or
desirable to register the Trust's Shares with state
securities authorities, monitor the sale of Trust Shares
for compliance with state securities laws, and file with
the appropriate state securities authorities the
registration statements and reports for the Trust and
the Trust's Shares and all amendments thereto, as may be
necessary or convenient to register and keep effective
the Trust and the Trust's Shares with state securities
authorities to enable the Trust to make a continuous
offering of its Shares;
(d) review and provide advice and counsel on all sales
literature (E.G., advertisements, brochures and
shareholder communications) with respect to each of the
Portfolios;
<PAGE>
(e) administer contracts on behalf of the Trust with,
among others, the Trust's investment adviser,
distributor, custodian, transfer agent and fund
accountant;
(f) supervise the Trust's transfer agent with respect to
the payment of dividends and other distributions to
Shareholders;
(g) calculate performance data of the Trust and its
Portfolios for dissemination to information services
covering the investment company industry;
(h) coordinate and supervise the preparation and filing
of the Trust's tax returns;
(i) examine and review the operations and performance of
the various organizations providing services to the
Trust or any Portfolio of the Trust, including, without
limitation, the Trust's investment adviser, distributor,
custodian, fund accountant, transfer agent, outside
legal counsel and independent public accountants, and at
the request of the Board of Trustees, report to the
Board on the performance of organizations;
(j) assist with the layout and printing of publicly
disseminated prospectuses and assist with and coordinate
layout and printing of the Trust's semi-annual and
annual reports to Shareholders;
(k) assist with the design, development, and operation
of the Trust Portfolios, including new classes,
investment objectives, policies and structure;
(l) provide individuals reasonably acceptable to the
Trust's Board of Trustees to serve as officers of the
Trust, who will be responsible for the management of
certain of the Trust's affairs as determined by the
Trust's Board of Trustees;
(m) advise the Trust and its Board of Trustees on
matters concerning the Trust and its affairs;
(n) obtain and keep in effect fidelity bonds and
directors and officers/errors and omissions insurance
policies for the Trust in accordance with the
requirements of Rules 17g-1 and 17d-1(d)(7) under the
1940 Act as such bonds and policies are approved by the
Trust's Board of Trustees;
(o) monitor and advise the Trust and its Portfolios on
their regulated investment company status under the
Internal Revenue Code of 1986, as amended;
(p) perform all administrative services and functions of
the Trust and each Portfolio to the extent
administrative services and functions are not provided
<PAGE>
to the Trust or such Portfolio pursuant to the Trust's
or such Portfolio's investment advisory agreement,
distribution agreement, custodian agreement, transfer
agent agreement and fund accounting agreement;
(q) furnish advice and recommendations with respect to
other aspects of the business and affairs of the
Portfolios as the Trust and the Administrator shall
determine desirable; and
(r) assist in monitoring and developing compliance
procedures for each Portfolio which will include, among
other matters, procedures to monitor compliance with
each Portfolio's investment objective, policies,
restrictions, tax matters and applicable laws and
regulations;
(s) monitor the Company's arrangements with respect to
services provided by financial institutions which are,
or wish to become, shareholder servicing agents for the
Company ("Shareholder Servicing Agents"). With respect
to Shareholder Servicing Agents, the Administrator shall
specifically monitor and review the services rendered by
the Shareholder Servicing Agents to their customers, who
are the beneficial owners of Shares, pursuant to
agreements between the Company and such Shareholder
Servicing Agents ("Shareholder Servicing Agreements"),
including, among other things, reviewing the
qualifications of financial institutions wishing to be
Shareholder Servicing Agents, assisting in the execution
and delivery of Shareholder Servicing Agreements,
reporting to the Board of Directors with respect to the
amounts paid or payable by the Company from time to time
under the Shareholder Servicing Agreements and the
nature of the services provided by Shareholder Servicing
Agents, and maintaining appropriate records in
connection with its monitoring duties;
(t) provide legal advice and counsel to the Company with
respect to regulatory matters including: monitoring
regulatory and legislative developments which may affect
the Company and assisting in the strategic response to
such developments, counseling and assisting the Company
in routine regulatory examinations or investigations of
the Company, and working closely with outside counsel to
the Company in response to any litigation or non-routine
regulatory matters;
(u) assist each Company in preparing for Board meetings
by (i) coordinating board book production and
distribution, (ii) preparing Board agendas and minutes,
(iii) preparing the BISYS section of Board materials,
(iv) preparing special Board meeting materials,
including but not limited to, materials relating to
annual contract approvals and 12b-1 plan approvals, as
agreed upon by the parties, and (v) such other Board
meeting functions that are agreed upon by the parties;
and
<PAGE>
(v) perform internal audit examinations, mail annual
reports of the Portfolios, prepare an annual list of
Shareholders and mail notices of Shareholders' meetings,
proxies and proxy statements.
The Administrator shall perform such other services for the Trust
that are mutually agreed upon by the parties from time to time for which the
Trust will pay the Administrator's out-of-pocket expenses.
ARTICLE 3. ALLOCATION OF CHARGES AND EXPENSES.
(A) THE ADMINISTRATOR. The Administrator shall furnish at its own
expense the executive, supervisory and clerical personnel necessary to perform
its obligations under this Agreement. The Administrator shall also provide the
items which it is obligated to provide under this Agreement, and shall pay all
compensation, if any, of officers of the Trust as well as all Trustees of the
Trust who are affiliated persons of the Administrator or any affiliated
corporation of the Administrator; provided, however, that unless otherwise
specifically provided, the Administrator shall not be obligated to pay the
compensation of any employee of the Trust retained by the Trustees of the Trust
to perform services on behalf of the Trust.
(B) THE TRUST. The Trust assumes and shall pay or cause to be paid
all other expenses of the Trust not otherwise allocated herein, including,
without limitation, organization costs, taxes, expenses for legal and auditing
services, the expenses of preparing (including typesetting), printing and
mailing reports, prospectuses, statements of additional information, proxy
solicitation material and notices to existing Shareholders, all expenses
incurred in connection with issuing and redeeming Shares, the costs of custodial
services, the cost of initial and ongoing registration of the Shares under
Federal and state securities laws, fees and out-of-pocket expenses of Directors
who are not affiliated persons of the Administrator or the investment adviser to
the Trust or any affiliated corporation of the Administrator or the investment
adviser, insurance, interest, brokerage costs, litigation and other
extraordinary or nonrecurring expenses, and all fees and charges of investment
advisers to the Trust.
(C) EXPENSE LIMITATIONS UNDER STATE LAW.
(1) If the aggregate expenses of every character incurred by, or
allocated to, the Trust in any fiscal year, other than interest, taxes, expenses
under the 12b-1 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 Article 3(B) of this Agreement and under the Investment Advisory
Agreement ("includable expenses"), shall exceed the expense limitations
applicable to the Trust imposed by state securities laws or regulations
thereunder, as these limitations may be raised or lowered from time to time, the
Trust 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
<PAGE>
year by the Trust pursuant to this Agreement and the 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 Trust
pursuant to this Agreement.
(2) With respect to portions of a fiscal year in which this
Agreement shall be in effect, the limitation specified in subparagraph (1) 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 for a fiscal
year, the monthly fees relating to the Trust, payable to the Administrator under
this Agreement 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 (1) 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. For purposes of the
foregoing, the value of the net assets of the Trust shall be computed in the
manner specified in Schedule A of this Agreement, 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.
ARTICLE 4. COMPENSATION OF THE ADMINISTRATOR.
(A) ADMINISTRATION FEE. Commencing on the Conversion Date, for the
services to be rendered, the facilities furnished and the expenses assumed by
the Administrator pursuant to this Agreement, the Trust shall pay to the
Administrator compensation at an annual rate specified in Schedule A attached
hereto. Such compensation shall be calculated and accrued daily, and paid to the
Administrator monthly.
If the Conversion Date occurs subsequent to the first day of a
month or termination of this Agreement occurs before the last day of a month,
the Administrator's compensation for that part of the month in which this
Agreement is in effect shall be prorated in a manner consistent with the
calculation of the fees as set forth above. Payment of the Administrator's
compensation for the preceding month shall be made promptly.
(B) SURVIVAL OF COMPENSATION RIGHTS. All rights of compensation
under this Agreement for services performed as of the termination date shall
survive the termination of this Agreement.
ARTICLE 5. LIMITATION OF LIABILITY OF THE ADMINISTRATOR. The duties
of the Administrator shall be confined to those expressly set forth herein, and
no implied duties are assumed by or may be asserted against the Administrator
<PAGE>
hereunder. The Administrator shall not be liable for any error of judgment or
mistake of law or for any loss arising out of any act or omission in carrying
out its duties hereunder, except a loss resulting from willful misfeasance, bad
faith or negligence in the performance of its duties, or by reason of reckless
disregard of its obligations and duties hereunder, except as may otherwise be
provided under provisions of applicable law which cannot be waived or modified
hereby. (As used in this Article 5, the term "Administrator" shall include
partners, officers, employees and other agents of the Administrator as well as
the Administrator itself.)
So long as the Administrator acts in good faith and with due
diligence and without negligence or reckless disregard of its obligations
hereunder, the Trust assumes full responsibility and shall indemnify the
Administrator and hold it harmless from and against any and all actions, suits
and claims, whether groundless or otherwise, and from and against any and all
losses, damages, costs, charges, reasonable counsel fees and disbursements,
payments, expenses and liabilities (including reasonable investigation expenses)
arising directly or indirectly out of said administration, transfer agency, and
dividend disbursing relationships to the Trust or any other service rendered to
the Trust hereunder. The Administrator agrees to indemnify and hold harmless the
Company, its employees, agents, Trustees, officers and nominees from and against
any and all actions, suits and claims, whether groundless or otherwise, and from
and against any and all judgments, liabilities, losses, damages, costs, charges,
reasonable counsel fees and other expenses of every nature and character arising
out of or in any way relating to the Administrator's bad faith, willful
misfeasance, negligence or reckless disregard by it of its obligations and
duties, with respect to the performance of services under this Agreement. The
indemnity and defense provisions set forth herein shall indefinitely survive the
termination of this Agreement.
The rights hereunder shall include the right to reasonable advances
of defense expenses in the event of any pending or threatened litigation with
respect to which indemnification hereunder may ultimately be merited. In order
that the indemnification provisions contained herein shall apply, however, it is
understood that if in any case the indemnifying party may be asked to indemnify
or hold the other party harmless, the indemnifying party shall be fully and
promptly advised of all pertinent facts concerning the situation in question,
and it is further understood that the indemnified party will use all reasonable
care to identify and notify the indemnifying party promptly concerning any
situation which presents or appears likely to present the probability of such a
claim for indemnification against the indemnifying party, but failure to do so
in good faith shall not affect the rights hereunder.
The indemnifying party shall be entitled to participate at its own
expense or, if it so elects, to assume the defense of any suit brought to
enforce any claims subject to this indemnity provision. If the indemnifying
party elects to assume the defense of any such claim, the defense shall be
conducted by counsel chosen by the indemnifying party and satisfactory to the
other party, whose approval shall not be unreasonably withheld. In the event
that the indemnifying party elects to assume the defense of any suit and retain
counsel, the indemnified party shall bear the fees and expenses of any
additional counsel retained by it. If the indemnifying party does not elect to
assume the defense of a suit, it will reimburse the other party for the
reasonable fees and expenses of any counsel retained by the other party.
<PAGE>
The Administrator may apply to the Trust at any time for
instructions and may consult counsel for the Trust or its own counsel and with
accountants and other experts with respect to any matter arising in connection
with the Administrator's duties, and the Administrator shall not be liable or
accountable for any action taken or omitted by it in good faith in accordance
with such instructions or with the opinion of such counsel, accountants or other
experts.
Also, the Administrator shall be protected in acting upon any
document which it reasonably believes to be genuine and to have been signed or
presented by the proper person or persons. The Administrator will not be held to
have notice of any change of authority of any officers, employees or agents of
the Trust until receipt of written notice thereof from the Trust.
ARTICLE 6. ACTIVITIES OF THE ADMINISTRATOR. The services of the
Administrator rendered to the Trust are not to be deemed to be exclusive. The
Administrator is free to render such services to others and to have other
businesses and interests. It is understood that trustees, officers, employees
and Shareholders of the Trust are or may be or become interested in the
Administrator, as directors, officers, employees and shareholders or otherwise
and that partners, officers and employees of the Administrator and its counsel
are or may be or become similarly interested in the Trust, and that the
Administrator may be or become interested in the Trust as a Shareholder or
otherwise.
ARTICLE 7. DURATION OF THIS AGREEMENT. The Term of this Agreement
shall be as specified in Schedule A hereto.
ARTICLE 8. ASSIGNMENT. This Agreement shall not be assignable by
either party without the written consent of the other party; provided, however,
that upon the provision of advanced written notice to the Trust, the
Administrator may, at its expense, subcontract with any entity or person
concerning the provision of the services contemplated hereunder. The
Administrator shall not, however, be relieved of any of its obligations under
this Agreement by the appointment of such subcontractor and provided further,
that the Administrator shall be responsible, to the extent provided in Article 5
hereof, for all acts of such subcontractor as if such acts were its own. This
Agreement shall be binding upon, and shall inure to the benefit of, the parties
hereto and their respective successors and permitted assigns.
ARTICLE 9. AMENDMENTS. This Agreement may be amended by the parties
hereto only if such amendment is specifically approved (i) by the vote of a
majority of the Trustees of the Trust, and (ii) by the vote of a majority of the
Trustees of the Trust who are not parties to this Agreement or interested
persons of any such party, cast in person at a Board of Trustees meeting called
for the purpose of voting on such approval.
For special cases, the parties hereto may amend such procedures set
forth herein as may be appropriate or practical under the circumstances, and the
Administrator may conclusively assume that any special procedure which has been
approved by the Trust does not conflict with or violate any requirements of its
Declaration of Trust or then current prospectuses, or any rule, regulation or
requirement of any regulatory body.
<PAGE>
ARTICLE 10. CERTAIN RECORDS. The Administrator shall maintain
customary records in connection with its duties as specified in this Agreement.
Any records required to be maintained and preserved pursuant to Rules 31a-1 and
31a-2 under the 1940 Act which are prepared or maintained by the Administrator
on behalf of the Trust shall be prepared and maintained at the expense of the
Administrator, but shall be the property of the Trust and will be made available
to or surrendered promptly to the Trust on request.
In case of any request or demand for the inspection of such records
by another party, the Administrator shall notify the Trust and follow the
Trust's instructions as to permitting or refusing such inspection; provided that
the Administrator may exhibit such records to any person in any case where it is
advised by its counsel that it may be held liable for failure to do so, unless
(in cases involving potential exposure only to civil liability) the Trust has
agreed to indemnify the Administrator against such liability.
ARTICLE 11. DEFINITIONS OF CERTAIN TERMS. The terms "interested
person" and "affiliated person," when used in this Agreement, shall have the
respective meanings specified in the 1940 Act and the rules and regulations
thereunder, subject to such exemptions as may be granted by the Securities and
Exchange Commission.
ARTICLE 12. NOTICE. Any notice required or permitted to be given by
either party to the other shall be deemed sufficient if sent by registered or
certified mail, postage prepaid, addressed by the party giving notice to the
other party at the following address: if to the Administrator, to it at 3435
Stelzer Road, Columbus, Ohio 43219; if to the Trust, to it at IBJ Schroder Bank
& Trust Co., One State Street, New York, New York 10004, Attn: Dennis Buchert,
with a copy to Steven Howard, Esq., Baker & McKenzie, 805 Third Avenue, New
York, New York 10022, or at such other address as such party may from time to
time specify in writing to the other party pursuant to this Section.
ARTICLE 13. GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the State of Ohio and the applicable provisions of
the 1940 Act. To the extent that the applicable laws of the State of Ohio, or
any of the provisions herein, conflict with the applicable provisions of the
1940 Act, the latter shall control.
ARTICLE 14. MULTIPLE ORIGINALS. This Agreement may be executed in
two or more counterparts, each of which when so executed shall be deemed to be
an original, but such counterparts shall together constitute but one and the
same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the day and year first above written.
IBJ FUNDS TRUST
By: /s/ John J. Pileggi
-----------------------
John J. Pileggi
Title: President
BISYS FUND SERVICES LIMITED PARTNERSHIP
BY: BISYS FUND SERVICES,
GENERAL PARTNER
By: /s/ J. David Huber
----------------------
J. David Huber
Title: Executive Vice President
<PAGE>
SCHEDULE A
TO THE ADMINISTRATION AGREEMENT
DATED AS OF OCTOBER , 1996
BETWEEN IBJ FUNDS TRUST
AND
BISYS FUND SERVICES LIMITED PARTNERSHIP
Portfolios: This Agreement shall apply to all Portfolios of IBJ
Funds Trust, either now or hereafter created
(collectively, the "Portfolios"). The current Portfolios
of the Trust are set forth below:
Reserve Money Market Fund;
Bond Fund;
Core Equity Fund; and
Growth and Income Fund.
Fees: Pursuant to Article 4, in consideration of services
rendered and expenses assumed pursuant to this
Agreement, the Trust will pay the Administrator on the
first business day of each month, or at such time(s) as
the Administrator shall request and the parties hereto
shall agree, a fee computed daily at the annual rate of:
Fifteen one-hundredths of one percent (.15%)
of the Trust's average daily net assets.
The fee for the period from the day of the month upon
which the Conversion Date occurs until the end of that
month shall be prorated according to the proportion
which such period bears to the full monthly period. Upon
any termination of this Agreement before the end of any
month, the fee for such part of a month shall be
prorated according to the proportion which such period
bears to the full monthly period and shall be payable
upon the date of termination of this Agreement.
For purposes of determining the fees payable to the
Administrator, the value of the net assets of a
particular Portfolio shall be computed in the manner
described in the Trust's Declaration of Trust or in the
Prospectus or Statement of Additional Information
respecting that Portfolio as from time to time is in
effect for the computation of the value of such net
assets in connection with the determination of the
liquidating value of the shares of such Portfolio.
The parties hereby confirm that the fees payable
hereunder shall be applied to each Portfolio as a whole,
and not to separate classes of shares within the
Portfolios.
<PAGE>
Term: The initial term of this Agreement (the "Initial Term")
shall be for a period commencing on the date this
Agreement is executed by both parties and ending one
year after the Conversion Date. In the event of a
material breach of this Agreement by either party, the
non-breaching party shall notify the breaching party in
writing of such breach and upon receipt of such notice,
the breaching party shall have 45 days to remedy the
breach. In the event the breach is not remedied within
such time period, the nonbreaching party may immediately
terminate this Agreement.
Unless 60 days advance written notice of nonrenewal is
provided by either party prior to the end of the Initial
Term or the Agreement is sooner terminated as set forth
above, this Agreement shall continue in effect following
the Initial Term unless and until it is terminated in
the manner set forth in this paragraph. Either party may
terminate this Agreement after the Initial Term, without
penalty, by the provision of 60 days advance written
notice to the other party.
Notwithstanding the foregoing, after such termination
for so long as the Administrator, with the written
consent of the Trust, in fact continues to perform any
one or more of the services contemplated by this
Agreement or any schedule or exhibit hereto, the
provisions of this Agreement, including without
limitation the provisions dealing with indemnification,
shall continue in full force and effect. Compensation
due the Administrator and unpaid by the Trust upon such
termination shall be immediately due and payable upon
and notwithstanding such termination. The Administrator
shall be entitled to collect from the Trust, in addition
to the compensation described in this Schedule A, the
amount of all of the Administrator's cash disbursements
for services in connection with the Administrator's
activities in effecting such termination, including
without limitation, the delivery to the Trust and/or its
designees of the Trust's property, records, instruments
and documents, or any copies thereof. Subsequent to such
termination, in exchange for payment of its costs, the
Administrator will provide the Trust with reasonable
access to any Trust documents or records remaining in
its possession.
If, during the Initial Term, for any reason other than
(i) nonrenewal, or (ii) termination based upon a
material breach of this Agreement, the Administrator is
replaced as administrator, or if a third party is added
to perform all or a part of the services provided by the
Administrator under this Agreement (excluding any
sub-administrator appointed by the Administrator as
provided in Article 7 hereof), then the Trust shall make
a one-time cash payment, as liquidated damages, to the
Administrator equal to the balance due the Administrator
for the remainder of the term of this Agreement,
assuming for purposes of calculation of the payment that
(i) the asset level of the Trust on the date the
Administrator is replaced, or a third party is added,
will remain constant for the balance of the Initial Term
and (ii) such payment shall be based upon the actual fee
being charged on such date (which may or may not be
lower than the contractual fee amount).
FUND ACCOUNTING AGREEMENT
AGREEMENT made this 1st day of October, 1996, between IBJ FUNDS
TRUST (the "Trust"), a Delaware business trust, and BISYS FUND SERVICES, INC.
("Fund Accountant"), a corporation organized under the laws of the State of
Delaware.
WHEREAS, the Trust desires that Fund Accountant perform certain fund
accounting services for each investment portfolio of the Trust, all as now or
hereafter may be established from time to time (individually referred to herein
as the "Fund" and collectively as the "Funds"); and
WHEREAS, Fund Accountant is willing to perform such services on the
terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual premises and
covenants herein set forth, the parties agree as follows:
1. SERVICES AS FUND ACCOUNTANT; CONVERSION TO SERVICES.
The Trust hereby engages Fund Accountant to perform fund accounting
services as set forth in this Section 1 (collectively, the "Services"), and, in
connection therewith, the Trust agrees to convert to Fund Accountant's data
processing systems and software (the "BISYS System") as necessary in order to
receive the Services. The Trust shall cooperate with Fund Accountant to provide
Fund Accountant with all necessary information and assistance required to
successfully convert to the BISYS System. Fund Accountant shall provide the
Trust with a schedule relating to such conversion and the parties agree that the
conversion may progress in stages. The date upon which all Services shall have
been converted to the BISYS System shall be referred to herein as the
"Conversion Date." Fund Accountant hereby accepts such engagement and agrees to
perform the Services commencing, with respect to each individual Service, on the
date that the conversion of such Service to the BISYS System has been completed.
Fund Accountant shall determine in accordance with its normal acceptance
procedures when the applicable Service has been successfully converted.
(a) MAINTENANCE OF BOOKS AND RECORDS. Fund Accountant will keep
and maintain the following books and records of each Fund
pursuant to Rule 31a-1 under the Investment Company Act of
1940 (the "Rule"):
(i) Journals containing an itemized daily record in
detail of all purchases and sales of securities, all
receipts and disbursements of cash and all other
debits and credits, as required by subsection (b)(1)
of the Rule;
<PAGE>
(ii) General and auxiliary ledgers reflecting all asset,
liability, reserve, capital, income and expense
accounts, including interest accrued and interest
received, as required by subsection (b)(2)(I) of the
Rule;
(iii) Separate ledger accounts required by subsection
(b)(2)(ii) and (iii) of the Rule; and
(iv) A monthly trial balance of all ledger accounts
(except shareholder accounts) as required by
subsection (b)(8) of the Rule.
(b) PERFORMANCE OF DAILY ACCOUNTING SERVICES. In addition to the
maintenance of the books and records specified above, Fund
Accountant shall perform the following accounting services
daily for each Fund:
(i) Calculate the net asset value per share utilizing
prices obtained from the sources described in
subsection 1(b)(ii) below;
(ii) Obtain security prices from independent pricing
services, or if such quotes are unavailable, then
obtain such prices from each Fund's investment
adviser or its designee, as approved by the Trust's
Board of Trustees;
(iii) Verify and reconcile with the Fund's custodian all
daily trade activity;
(iv) Compute, as appropriate, each Fund's net income and
capital gains, dividend payables, dividend factors,
7-day yields, 7-day effective yields, 30-day yields,
and weighted average portfolio maturity;
(v) Review daily the net asset value calculation and
dividend factor (if any) for each Fund prior to
release to shareholders, check and confirm the net
asset values and dividend factors for reasonableness
and deviations, and distribute net asset values and
yields to NASDAQ;
(vi) Report to the Trust the daily market pricing of
securities in any money market Funds, with the
comparison to the amortized cost basis;
(vii) Determine unrealized appreciation and depreciation
on securities held in variable net asset value
Funds;
(viii) Amortize premiums and accrete discounts on
securities purchased at a price other than face
value, if requested by the Trust;
<PAGE>
(ix) Update fund accounting system to reflect rate
changes, as received from a Fund's investment
adviser, on variable interest rate instruments;
(x) Post Fund transactions to appropriate categories;
(xi) Accrue expenses of each Fund according to
instructions received from the Trust's
Administrator;
(xii) Determine the outstanding receivables and payables
for all (1) security trades, (2) Fund share
transactions and (3) income and expense accounts;
(xiii) Provide accounting reports in connection with the
Trust's regular annual audit and other audits and
examinations by regulatory agencies; and
(xiv) Provide such periodic reports as the parties shall
agree upon, as set forth in a separate schedule.
(c) SPECIAL REPORTS AND SERVICES.
(i) Fund Accountant may provide additional special
reports upon the request of the Trust or a Fund's
investment adviser, which may result in an
additional charge, the amount of which shall be
agreed upon between the parties.
(ii) Fund Accountant may provide such other similar
services with respect to a Fund as may be reasonably
requested by the Trust, which may result in an
additional charge, the amount of which shall be
agreed upon between the parties.
(d) ADDITIONAL ACCOUNTING SERVICES. Fund Accountant shall also
perform the following additional accounting services for
each Fund:
(i) Provide monthly a download (and hard copy thereof)
of the financial statements described below, upon
request of the Trust. The download will include the
following items:
Statement of Assets and Liabilities,
Statement of Operations,
Statement of Changes in Net Assets, and
Condensed Financial Information;
<PAGE>
(ii) Provide accounting information for the following:
(A) federal and state income tax returns and federal
excise tax returns;
(B) the Trust's semi-annual reports with the
Securities and Exchange Commission ("SEC") on
Form N-SAR;
(C) the Trust's annual, semi-annual and quarterly
(if any) shareholder reports;
(D) registration statements on Form N-1A and other
filings relating to the registration of Shares;
(E) the Administrator's monitoring of the Trust's
status as a regulated investment company under
Subchapter M of the Internal Revenue Code, as
amended;
(F) annual audit by the Trust's auditors; and (G)
examinations performed by the SEC.
(G) examinations performed by the SEC.
2. SUBCONTRACTING.
Fund Accountant may, at its expense, subcontract with any entity
or person concerning the provision of the services contemplated hereunder;
provided, however, that Fund Accountant shall not be relieved of any of its
obligations under this Agreement by the appointment of such subcontractor and
provided further, that Fund Accountant shall be responsible, to the extent
provided in Section 6 hereof, for all acts of such subcontractor as if such acts
were its own.
3. COMPENSATION.
Commencing on the Conversion Date, the Trust shall pay Fund
Accountant for the services to be provided by Fund Accountant under this
Agreement in accordance with, and in the manner set forth in, Schedule A hereto,
as such Schedule may be amended from time to time.
4. REIMBURSEMENT OF EXPENSES.
In addition to paying Fund Accountant the fees described in
Section 3 hereof, the Trust agrees to reimburse Fund Accountant for its
out-of-pocket expenses in providing services hereunder, including without
limitation the following:
<PAGE>
(a) All freight and other delivery and bonding charges incurred
by Fund Accountant in delivering materials to and from the
Trust;
(b) All direct telephone, telephone transmission and telecopy or
other electronic transmission expenses incurred by Fund
Accountant in communication with the Trust, the Trust's
investment advisor or custodian, dealers or others as
required for Fund Accountant to perform the services to be
provided hereunder;
(c) The cost of obtaining security market quotes pursuant to
Section l(b)(ii) above;
(d) The cost of microfilm or microfiche of records or other
materials;
(e) Any expenses Fund Accountant shall incur at the written
direction of an officer of the Trust thereunto duly
authorized; and
(f) Any additional expenses reasonably incurred by Fund
Accountant in the performance of its duties and obligations
under this Agreement.
5. EFFECTIVE DATE.
This Agreement shall become effective with respect to a Fund as
of the date first written above.
6. TERM.
The initial term of this Agreement (the "Initial Term") shall be
for a period commencing on the date this Agreement is executed by both parties
and ending on the date that is one year after the Conversion Date. This
Agreement shall be renewed automatically for successive one-year terms unless
written notice not to renew is given by the non-renewing party to the other
party at least 60 days prior to the expiration of the then-current term;
provided, however, that after such termination for so long as Fund Accountant,
with the written consent of the Trust, in fact continues to perform any one or
more of the services contemplated by this Agreement or any schedule or exhibit
hereto, the provisions of this Agreement, including without limitation the
provisions dealing with indemnification, shall continue in full force and
effect. Compensation due Fund Accountant and unpaid by the Trust upon such
termination shall be immediately due and payable upon and notwithstanding such
termination. Fund Accountant shall be entitled to collect from the Trust, in
addition to the compensation described under Section 3 hereof, the amount of all
of Fund Accountant's costs for services in connection with Fund Accountant's
activities in effecting such termination, including without limitation, the
delivery to the Trust and/or its designees of the Trust's property, records,
instruments and documents, or any copies thereof. Subsequent to such
termination, in exchange for payment of its costs, Fund Accountant will provide
the Trust with reasonable access to any Trust documents or records remaining in
its possession.
<PAGE>
In the event of a material breach of this Agreement by either
party, the non-breaching party shall notify the breaching party in writing of
such breach and, upon receipt of such notice, the breaching party shall have 45
days to remedy the breach. In the event the breach is not remedied within such
time period, the nonbreaching party may immediately terminate this Agreement.
If during the Initial Term, for any reason other than (i)
nonrenewal or (ii) termination based upon a material breach of this Agreement,
Fund Accountant is replaced as Fund Accountant, or if a third party is added to
perform all or a part of the services provided by Fund Accountant under this
Agreement (excluding any sub-accountant appointed by Fund Accountant as provided
in Section 2 hereof), then the Trust shall make a one-time cash payment, as
liquidated damages, to Fund Accountant equal to the balance due Fund Accountant
for the remainder of the term of this Agreement, assuming for purposes of
calculation of the payment that (i) the asset level of the Trust on the date
Fund Accountant is replaced, or a third party is added, will remain constant for
the balance of the contract term and (ii) such payment shall be based upon the
actual fee being charged on such date (which may or may not be lower than the
contractual fee amount).
7. STANDARD OF CARE; RELIANCE ON RECORDS AND INSTRUCTIONS;
INDEMNIFICATION.
Fund Accountant shall use its best efforts to insure the
accuracy of all services performed under this Agreement, but shall not be liable
to the Trust for any action taken or omitted by Fund Accountant in the absence
of bad faith, willful misfeasance, negligence or from reckless disregard by it
of its obligations and duties. A Fund agrees to indemnify and hold harmless Fund
Accountant, its employees, agents, directors, officers and nominees from and
against any and all claims, demands, actions and suits, whether groundless or
otherwise, and from and against any and all judgments, liabilities, losses,
damages, costs, charges, counsel fees and other expenses of every nature and
character arising out of or in any way relating to Fund Accountant's actions
taken or nonactions with respect to the performance of services under this
Agreement with respect to such Fund or based, if applicable, upon reasonable
reliance on information, records, instructions or requests with respect to such
Fund given or made to Fund Accountant by a duly authorized representative of the
Trust; provided that this indemnification shall not apply to actions or
omissions of Fund Accountant in cases of its own bad faith, willful misfeasance,
negligence or from reckless disregard by it of its obligations and duties, and
further provided that prior to confessing any claim against it which may be the
subject of this indemnification, Fund Accountant shall give the Trust written
notice of and reasonable opportunity to defend against said claim in its own
name or in the name of Fund Accountant.
Fund Accountant agrees to indemnify and hold harmless the Trust,
its employees, agents, Trustees, officers and nominees from and against any and
all actions, suits and claims, whether groundless or otherwise, and from and
against any and all judgments, liabilities, losses, damages, costs, charges,
reasonable counsel fees and other expenses of every nature and character arising
out of or in any way relating to Fund Accountant's bad faith, willful
misfeasance, negligence or reckless disregard by it of its obligations and
duties, with respect to the performance of services under this Agreement;
provided, that, prior to confessing any claim against it which may be the
subject of this indemnification, the Trust shall give Fund Accountant written
notice of and a reasonable opportunity to defend against said claim in its own
name or in the name of the Trust.
<PAGE>
8. RECORD RETENTION AND CONFIDENTIALITY.
Fund Accountant shall keep and maintain on behalf of the Trust
all books and records which the Trust and Fund Accountant is, or may be,
required to keep and maintain pursuant to any applicable statutes, rules and
regulations, including without limitation Rules 31a-1 and 31a-2 under the
Investment Company Act of 1940, as amended (the "1940 Act"), relating to the
maintenance of books and records in connection with the services to be provided
hereunder. Fund Accountant further agrees that all such books and records shall
be the property of the Trust and to make such books and records available for
inspection by the Trust or by the Securities and Exchange Commission at
reasonable times and otherwise to keep confidential all books and records and
other information relative to the Trust and its shareholders; except when
requested to divulge such information by duly-constituted authorities or court
process.
9. UNCONTROLLABLE EVENTS.
Fund Accountant assumes no responsibility hereunder, and shall
not be liable, for any damage, loss of data, delay or any other loss whatsoever
caused by events beyond its reasonable control.
10. REPORTS.
Fund Accountant will furnish to the Trust and to its properly
authorized auditors, investment advisers, examiners, distributors, dealers,
underwriters, salesmen, insurance companies and others designated by the Trust
in writing, such reports and at such times as are prescribed pursuant to the
terms and the conditions of this Agreement to be provided or completed by Fund
Accountant, or as subsequently agreed upon by the parties pursuant to an
amendment hereto.
11. RIGHTS OF OWNERSHIP.
All computer programs and procedures developed to perform
services required to be provided by Fund Accountant under this Agreement are the
property of Fund Accountant. All records and other data except such computer
programs and procedures are the exclusive property of the Trust and all such
other records and data will be furnished to the Trust in appropriate form as
soon as practicable after termination of this Agreement for any reason.
12. RETURN OF RECORDS.
Fund Accountant may at its option at any time, and shall
promptly upon the Trust's demand, turn over to the Trust and cease to retain
Fund Accountant's files, records and documents created and maintained by Fund
Accountant pursuant to this Agreement which are no longer needed by Fund
Accountant in the performance of its services or for its legal protection. If
not so turned over to the Trust, such documents and records will be retained by
Fund Accountant for six years from the year of creation. At the end of such
six-year period, such records and documents will be turned over to the Trust
unless the Trust authorizes in writing the destruction of such records and
documents.
<PAGE>
13. REPRESENTATIONS OF THE TRUST.
The Trust certifies to Fund Accountant that: (1) as of the close
of business on each Conversion Date, each Fund that is in existence as of the
Conversion Date has authorized unlimited shares, and (2) this Agreement has been
duly authorized by the Trust and, when executed and delivered by the Trust, will
constitute a legal, valid and binding obligation of the Trust, enforceable
against the Trust in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting the rights and remedies of creditors and secured parties.
14. REPRESENTATIONS OF FUND ACCOUNTANT.
Fund Accountant represents and warrants that: (1) the various
procedures and systems which Fund Accountant has implemented with regard to
safeguarding from loss or damage attributable to fire, theft, or any other cause
the records, and other data of the Trust and Fund Accountant's records, data,
equipment facilities and other property used in the performance of its
obligations hereunder are adequate and that it will make such changes therein
from time to time as are required for the secure performance of its obligations
hereunder, and (2) this Agreement has been duly authorized by Fund Accountant
and, when executed and delivered by Fund Accountant, will constitute a legal,
valid and binding obligation of Fund Accountant, enforceable against Fund
Accountant in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting the
rights and remedies of creditors and secured parties.
15. INSURANCE.
Fund Accountant shall notify the Trust should any of its
insurance coverage be canceled or reduced. Such notification shall include the
date of change and the reasons therefor. Fund Accountant shall notify the Trust
of any material claims against it with respect to services performed under this
Agreement, whether or not they may be covered by insurance, and shall notify the
Trust from time to time as may be appropriate of the total outstanding claims
made by Fund Accountant under its insurance coverage.
16. INFORMATION TO BE FURNISHED BY THE TRUST AND FUNDS.
The Trust has furnished to Fund Accountant the following:
<PAGE>
(a) Copies of the Declaration of Trust of the Trust and of any
amendments thereto, certified by the proper official of the
state in which such document has been filed.
(b) Copies of the following documents:
(i) The Trust's Bylaws and any amendments thereto; and
(ii) Certified copies of resolutions of the Board of
Trustees covering the approval of this Agreement,
authorization of a specified officer of the Trust to
execute and deliver this Agreement and authorization
for specified officers of the Trust to instruct Fund
Accountant thereunder.
(c) A list of all the officers of the Trust, together with
specimen signatures of those officers who are authorized to
instruct Fund Accountant in all matters.
(d) Two copies of the Prospectuses and Statements of Additional
Information for each Fund.
17. INFORMATION FURNISHED BY FUND ACCOUNTANT.
(a) Fund Accountant has furnished to the Trust the following:
(i) Fund Accountant's Articles of Incorporation; and
(ii) Fund Accountant's Bylaws and any amendments thereto.
(b) Fund Accountant shall, upon request, furnish certified
copies of corporate actions covering the following matters:
(i) Approval of this Agreement, and authorization of a
specified officer of Fund Accountant to execute and
deliver this Agreement; and
(ii) Authorization of Fund Accountant to act as fund
accountant for the Trust and to provide accounting
services for the Trust.
18. AMENDMENTS TO DOCUMENTS.
The Trust shall furnish Fund Accountant written copies of any
amendments to, or changes in, any of the items referred to in Section 16 hereof
forthwith upon such amendments or changes becoming effective. In addition, the
Trust agrees that no amendments will be made to the Prospectuses or Statements
of Additional Information of the Trust which might have the effect of changing
the procedures employed by Fund Accountant in providing the services agreed to
hereunder or which amendment might affect the duties of Fund Accountant
hereunder unless the Trust first obtains Fund Accountant's approval of such
amendments or changes.
<PAGE>
19. COMPLIANCE WITH LAW.
Except for the obligations of Fund Accountant set forth in
Section 8 hereof, the Trust assumes full responsibility for the preparation,
contents and distribution of each prospectus of the Trust as to compliance with
all applicable requirements of the Securities Act of 1933, as amended (the
"Securities Act"), the 1940 Act and any other laws, rules and regulations of
governmental authorities having jurisdiction. Fund Accountant shall have no
obligation to take cognizance of any laws relating to the sale of the Trust's
Shares. The Trust represents and warrants that no Shares of the Trust will be
offered to the public until the Trust's registration statement under the
Securities Act and the 1940 Act has been declared or becomes effective.
20. NOTICES.
Any notice provided hereunder shall be sufficiently given when
sent by registered or certified mail to the party required to be served with
such notice at the following address: if to the Trust, to it at IBJ Schroder
Bank & Trust Co., One State Street, New York, New York 10004, Attn: Dennis
Buchert, with a copy to Steven Howard, Esq., Baker & McKenzie, 805 Third Avenue,
New York, New York 10022; if to Fund Accountant, to it at 3435 Stelzer Road,
Columbus, Ohio 43219, or at such other address as such party may from time to
time specify in writing to the other party pursuant to this Section.
21. HEADINGS.
Paragraph headings in this Agreement are included for
convenience only and are not to be used to construe or interpret this Agreement.
22. ASSIGNMENT.
This Agreement and the rights and duties hereunder shall not be
assignable with respect to a Fund by either of the parties hereto except by the
specific written consent of the other party. This Agreement shall be binding
upon, and shall inure to the benefit of, the parties hereto and their respective
successors and permitted assigns.
23. GOVERNING LAW.
This Agreement shall be governed by and provisions shall be
construed in accordance with the laws of the State of Ohio.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the day and year first above written.
IBJ FUNDS TRUST
By: /s/ John J. Pileggi
-----------------------
John J. Pileggi
Title: President
BISYS FUND SERVICES, INC.
By: /s/ J. David Huber
----------------------
J. David Huber
Title: Executive Vice President
<PAGE>
Dated: October 1, 1996
SCHEDULE A
TO THE FUND ACCOUNTING AGREEMENT
BETWEEN
IBJ FUNDS TRUST
AND
BISYS FUND SERVICES, INC..
FEES
Effective as of the Conversion Date, Fund Accountant shall be entitled to
receive a fee from each Fund in accordance with the following schedule:
A monthly fee of $2,500 per Fund plus out-of-pocket
expenses, as described in Section 4.
IBJ FUNDS TRUST BISYS FUND SERVICES, INC.
By: /s/ John J. Pileggi By: /s/ J. David Huber
- ----------------------- ----------------------
John J. Pileggi David Huber
President
DISTRIBUTION AGREEMENT
AGREEMENT made this 1st day of October, 1996, between IBJ FUNDS
TRUST (the "Trust"), a Delaware business trust, and IBJ FUNDS DISTRIBUTOR, INC.
("Distributor"), a Delaware corporation.
WHEREAS, the Trust is an open-end management investment company,
organized as a Delaware business trust and registered with the Securities and
Exchange Commission (the "Commission") under the Investment Company Act of 1940,
as amended (the "1940 Act"); and
WHEREAS, it is intended that Distributor act as the distributor of
the units of beneficial interest ("Shares") of each of the investment portfolios
of the Trust (such portfolios being referred to individually as a "Fund" and
collectively as the "Funds").
NOW, THEREFORE, in consideration of the mutual premises and
covenants herein set forth, the parties agree as follows:
1. SERVICES AS DISTRIBUTOR; CONVERSION TO THE SERVICES.
1.1 Distributor (i) will act as agent for the distribution of
the Shares covered by the registration statement and prospectus of the Trust
then in effect under the Securities Act of 1933, as amended (the "Securities
Act") and (ii) will perform such additional services as are provided in this
Section 1 (collectively, the "Services"). In connection therewith, the Trust
agrees to convert to the Distributor's data processing systems and software (the
"BISYS System"). The Trust shall cooperate with the Distributor to provide the
Distributor with all necessary information and assistance required to
successfully convert to the BISYS System. The Distributor shall provide the
Trust with a schedule relating to such conversion and the parties agree that the
conversion may progress in stages. The date upon which all Services shall have
been converted to the BISYS System shall be referred to herein as the
"Conversion Date." The Distributor hereby accepts such engagement and agrees to
perform the Services commencing, with respect to each individual Service, on the
date that the conversion of such Service to the BISYS System has been completed.
The Distributor shall determine in accordance with its normal acceptance
procedures when the applicable Service has been successfully converted. As used
in this Agreement, the term "registration statement" shall mean Parts A (the
prospectus), B (the Statement of Additional Information) and C of each
registration statement that is filed on Form N-1A, or any successor thereto,
with the Commission, together with any amendments thereto. The term "prospectus"
shall mean each form of prospectus and Statement of Additional Information used
by the Funds for delivery to shareholders and prospective shareholders after the
effective dates of the above-referenced registration statements, together with
any amendments and supplements thereto.
1.2 Distributor agrees to use appropriate efforts to solicit
orders for the sale of the Shares and will undertake such advertising and
<PAGE>
promotion as it believes reasonable in connection with such solicitation. The
Trust understands that Distributor is now and may in the future be the
distributor of the shares of several investment companies or series (together,
"Investment Companies") including Investment Companies having investment
objectives similar to those of the Trust. The Trust further understands that
investors and potential investors in the Trust may invest in shares of such
other Investment Companies. The Trust agrees that Distributor's duties to such
Investment Companies shall not be deemed in conflict with its duties to the
Trust under this paragraph 1.2.
Distributor shall, at its own expense, finance appropriate
activities which it deems reasonable, which are primarily intended to result in
the sale of the Shares, including, but not limited to, advertising, compensation
of underwriters, dealers and sales personnel, the printing and mailing of
prospectuses to other than current Shareholders, and the printing and mailing of
sales literature.
1.3 In its capacity as distributor of the Shares, all activities
of Distributor and its partners, agents, and employees shall comply with all
applicable laws, rules and regulations, including, without limitation, the 1940
Act, all rules and regulations promulgated by the Commission thereunder and all
rules and regulations adopted by any securities association registered under the
Securities Exchange Act of 1934.
1.4 Distributor will provide one or more persons, during normal
business hours, to respond to telephone questions with respect to the Trust.
1.5 Distributor will transmit any orders received by it for
purchase or redemption of the Shares to the transfer agent and custodian for the
Funds.
1.6 Whenever in their judgment such action is warranted by
unusual market, economic or political conditions, or by abnormal circumstances
of any kind, the Trust's officers may decline to accept any orders for, or make
any sales of, the Shares until such time as those officers deem it advisable to
accept such orders and to make such sales.
1.7 Distributor will act only on its own behalf as principal if
it chooses to enter into selling agreements with selected dealers or others.
1.8 The Trust agrees at its own expense to execute any and all
documents and to furnish any and all information and otherwise to take all
actions that may be reasonably necessary in connection with the qualification of
the Shares for sale in such states as Distributor may designate.
1.9 The Trust shall furnish from time to time, for use in
connection with the sale of the Shares, such information with respect to the
Funds and the Shares as Distributor may reasonably request; and the Trust
warrants that the statements contained in any such information shall fairly show
or represent what they purport to show or represent. The Trust shall also
furnish Distributor upon request with: (a) unaudited semi-annual statements of
the Funds' books and accounts prepared by the Trust, (b) a monthly itemized list
<PAGE>
of the securities in the Funds, (c) monthly balance sheets as soon as
practicable after the end of each month, and (d) from time to time such
additional information regarding the financial condition of the Funds as
Distributor may reasonably request.
1.10 The Trust represents to Distributor that, with respect to
the Shares, all registration statements and prospectuses filed by the Trust with
the Commission under the Securities Act have been carefully prepared in
conformity with requirements of said Act and rules and regulations of the
Commission thereunder. The registration statement and prospectus contain all
statements required to be stated therein in conformity with said Act and the
rules and regulations of said Commission and all statements of fact contained in
any such registration statement and prospectus are true and correct.
Furthermore, neither any registration statement nor any prospectus includes an
untrue statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
to a purchaser of the Shares. The Trust may, but shall not be obligated to,
propose from time to time such amendment or amendments to any registration
statement and such supplement or supplements to any prospectus as, in the light
of future developments, may, in the opinion of the Trust's counsel, be necessary
or advisable. If the Trust shall not propose such amendment or amendments and/or
supplement or supplements within fifteen days after receipt by the Trust of a
written request from Distributor to do so, Distributor may, at its option,
terminate this Agreement. The Trust shall not file any amendment to any
registration statement or supplement to any prospectus without giving
Distributor reasonable notice thereof in advance; provided, however, that
nothing contained in this Agreement shall in any way limit the Trust's right to
file at any time such amendments to any registration statement and/or
supplements to any prospectus, of whatever character, as the Trust may deem
advisable, such right being in all respects absolute and unconditional.
1.11 The Trust authorizes Distributor and dealers to use any
prospectus in the form furnished from time to time in connection with the sale
of the Shares. The Trust agrees to indemnify, defend and hold Distributor, its
several partners and employees, and any person who controls Distributor within
the meaning of Section 15 of the Securities Act free and harmless 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 Distributor, its partners
and employees, or any such controlling person, may incur under the Securities
Act or under common law or otherwise, arising out of or based upon any untrue
statement, or alleged untrue statement, of a material fact contained in any
registration statement or any prospectus or arising out of or based upon any
omission, or alleged omission, to state a material fact required to be stated in
either any registration statement or any prospectus or necessary to make the
statements in either thereof not misleading; provided, however, that the Trust's
agreement to indemnify Distributor, its partners or employees, and any such
controlling person shall not be deemed to cover any claims, demands, liabilities
or expenses arising out of any statements or representations as are contained in
any prospectus and in such financial and other statements as are furnished in
writing to the Trust by Distributor and used in the answers to the registration
statement or in the corresponding statements made in the prospectus, or arising
<PAGE>
out of or based upon any omission or alleged omission to state a material fact
in connection with the giving of such information required to be stated in such
answers or necessary to make the answers not misleading; and further provided
that the Trust's agreement to indemnify Distributor and the Trust's
representations and warranties hereinbefore set forth in paragraph 1.10 shall
not be deemed to cover any liability to the Trust or its Shareholders to which
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
Distributor's reckless disregard of its obligations and duties under this
Agreement. The Trust's agreement to indemnify Distributor, its partners and
employees and any such controlling person, as aforesaid, is expressly
conditioned upon the Trust being notified of any action brought against
Distributor, its partners or employees, or any such controlling person, such
notification to be given by letter or by telegram addressed to the Trust at its
principal office specified in the first paragraph of this Agreement 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 so notify the Trust of any such action shall not relieve the Trust
from any liability which the Trust may have to the person against whom such
action is brought by reason of any such untrue, or allegedly untrue, statement
or omission, or alleged omission, otherwise than on account of the Trust's
indemnity agreement contained in this paragraph 1.11. The Trust will be entitled
to assume the defense of any suit brought to enforce any such claim, demand or
liability, but, in such case, such defense shall be conducted by counsel of good
standing chosen by the Trust and approved by Distributor, which approval shall
not be unreasonably withheld. In the event the Trust elects to assume the
defense of any such suit and retain counsel of good standing approved by
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 case
Distributor reasonably does not approve of counsel chosen by the Trust, the
Trust will reimburse Distributor, its partners and employees, or the controlling
person or persons named as defendant or defendants in such suit, for the fees
and expenses of any counsel retained by Distributor or them. The Trust's
indemnification agreement contained in this paragraph 1.11 and the Trust's
representations and warranties in this Agreement shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
Distributor, its partners and employees, or any controlling person, and shall
survive the delivery of any Shares.
This Agreement of indemnity will inure exclusively to
Distributor's benefit, to the benefit of its several partners and employees, and
their respective estates, and to the benefit of the controlling persons and
their successors. The Trust agrees promptly to notify Distributor of the
commencement of any litigation or proceedings against the Trust or any of its
officers or Trustees in connection with the issue and sale of any Shares.
1.12 Distributor agrees to indemnify, defend and hold the Trust,
its several officers and Trustees and any person who controls the Trust within
the meaning of Section 15 of the Securities Act free and harmless from and
against any and all claims, demands, liabilities and expenses (including the
costs of investigating or defending such claims, demands, or liabilities and any
counsel fees incurred in connection therewith) which the Trust, its officers or
<PAGE>
Trustees or any such controlling person, may incur under the Securities Act or
under 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 any untrue, or alleged untrue, statement of a material fact contained in
information furnished in writing by Distributor to the Trust and used in the
answers to any of the items of the registration statement or in the
corresponding statements made in the prospectus, or shall arise out of or be
based upon any omission, or alleged omission, to state a material fact in
connection with such information furnished in writing by Distributor to the
Trust required to be stated in such answers or necessary to make such
information not misleading. Distributor's agreement to indemnify the Trust, its
officers and Trustees, and any such controlling person, as aforesaid, is
expressly conditioned upon Distributor being notified of any action brought
against the Trust, its officers or Trustees, or any such controlling person,
such notification to be given by letter or telegram addressed to Distributor at
its principal office in Columbus, Ohio, and sent to 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. Distributor shall have the right of
first control of the defense of such action, with counsel of its own choosing,
satisfactory to the Trust, if such action is based solely upon such alleged
misstatement or omission on Distributor's part, and in any other event the
Trust, its officers or Trustees or such controlling person shall each have the
right to participate in the defense or preparation of the defense of any such
action. The failure to so notify Distributor of any such action shall not
relieve Distributor from any liability which Distributor may have to the Trust,
its officers or Trustees, or to such controlling person by reason of any such
untrue or alleged untrue statement, or omission or alleged omission, otherwise
than on account of Distributor's indemnity agreement contained in this paragraph
1.12.
1.13 No Shares shall be offered by either Distributor or the
Trust under any of the provisions of this Agreement and no orders for the
purchase or sale of Shares hereunder shall be accepted by the Trust if and so
long as the effectiveness of the registration statement then in effect or any
necessary amendments thereto shall be suspended under any of the provisions of
the Securities Act or if and so long as a current prospectus as required by
Section 10(b)(2) of said Act is not on file with the Commission; provided,
however, that nothing contained in this paragraph 1.13 shall in any way restrict
or have an application to or bearing upon the Trust's obligation to repurchase
Shares from any Shareholder in accordance with the provisions of the Trust's
prospectus, Agreement and Declaration of Trust, or Bylaws.
1.14 The Trust agrees to advise Distributor as soon as
reasonably practical by a notice in writing delivered to Distributor or its
counsel:
(a) of any request by the Commission for amendments to
the registration statement or prospectus then in
effect or for additional information;
(b) in the event of the issuance by the Commission of
any stop order suspending the effectiveness of the
registration statement or prospectus then in effect
or the initiation by service of process on the Trust
of any proceeding for that purpose;
(c) of the happening of any event that makes untrue any
statement of a material fact made in the
registration statement or prospectus then in effect
or which requires the making of a change in such
registration statement or prospectus in order to
make the statements therein not misleading; and
(d) of all action of the Commission with respect to any
amendment to any registration statement or
prospectus which may from time to time be filed with
the Commission.
For purposes of this section, informal requests by or acts
of the Staff of the Commission shall not be deemed actions of or requests by the
Commission.
1.15 Distributor agrees on behalf of itself and its partners
and employees to treat confidentially and as proprietary
information of the Trust all records and other information
relative to the Trust and its prior, present or potential
Shareholders, and not to use such records and information
for any purpose other than performance of its
responsibilities and duties hereunder, except, after prior
notification to and approval in writing by the Trust,
which approval shall not be unreasonably withheld and may
not be withheld where Distributor 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
Trust.
1.16 This Agreement shall be governed by the laws of the State
of Ohio.
2. FEE.
Distributor shall receive from the Funds identified in the
Distribution and Shareholder Service Plan attached as Schedule A hereto (the
"Distribution Plan Funds") a distribution fee at the rate and upon the terms and
conditions set forth in such Plan. The distribution fee shall be accrued daily
and shall be paid on the first business day of each month, or at such time(s) as
the Distributor shall reasonably request.
3. SALE AND PAYMENT.
Shares of a Fund may be subject to a sales load and may be
subject to the imposition of a distribution fee pursuant to the Distribution and
Shareholder Service Plan referred to above. To the extent that Shares of a Fund
are sold at an offering price which includes a sales load or at net asset value
subject to a contingent deferred sales load with respect to certain redemptions
(either within a single class of Shares or pursuant to two or more classes of
Shares), such Shares shall hereinafter be referred to collectively as "Load
Shares" (in the case of Shares that are sold with a front-end sales load or
Shares that are sold subject to a contingent deferred sales load), "Front-End
Load Shares" or "CDSL Shares" and individually as a "Load Share," a "Front-End
Load Share" or a "CDSL Share." A Fund that contains Front-End Load Shares shall
hereinafter be referred to collectively as "Load Funds" or "Front-End Load
Funds" and individually as a "Load Fund" or a "Front-end Load Fund." A Fund that
contains CDSL Shares shall hereinafter be referred to collectively as "Load
Funds" or "CDSL Funds" and individually as a "Load Fund" or a "CDSL Fund." Under
this Agreement, the following provisions shall apply with respect to the sale
of, and payment for, Load Shares.
<PAGE>
3.1 Distributor shall have the right to purchase Load Shares at
their net asset value and to sell such Load Shares to the public against orders
therefor at the applicable public offering price, as defined in Section 4
hereof. Distributor shall also have the right to sell Load Shares to dealers
against orders therefor at the public offering price less a concession
determined by Distributor, which concession shall not exceed the amount of the
sales charge or underwriting discount, if any, referred to in Section 4 below.
3.2 Prior to the time of delivery of any Load Shares by a Load
Fund to, or on the order of, Distributor, Distributor shall pay or cause to be
paid to the Load Fund or to its order an amount in Boston or New York clearing
house funds equal to the applicable net asset value of such Shares. Distributor
may retain so much of any sales charge or underwriting discount as is not
allowed by Distributor as a concession to dealers.
4. PUBLIC OFFERING PRICE.
The public offering price of a Load Share shall be the net
asset value of such Load Share, plus any applicable sales charge, all as set
forth in the current prospectus of the Load Fund. The net asset value of Shares
shall be determined in accordance with the provisions of the Agreement and
Declaration of Trust and Bylaws of the Trust and the then-current prospectus of
the Load Fund.
5. ISSUANCE OF SHARES.
The Trust reserves the right to issue, transfer or sell Load
Shares at net asset value (a) in connection with the merger or consolidation of
the Trust or the Load Fund(s) with any other investment company or the
acquisition by the Trust or the Load Fund(s) of all or substantially all of the
assets or of the outstanding Shares of any other investment company; (b) in
connection with a pro rata distribution directly to the holders of Shares in the
nature of a stock dividend or split; (c) upon the exercise of subscription
rights granted to the holders of Shares on a pro rata basis; (d) in connection
with the issuance of Load Shares pursuant to any exchange and reinvestment
privileges described in any then-current prospectus of the Load Fund; and (e)
otherwise in accordance with any then-current prospectus of the Load Fund.
6. TERM, DURATION AND TERMINATION.
The initial term of this Agreement (the "Initial Term") shall
be for a period commencing on the date this Agreement is executed by both
parties and ending on the date that is one year after the Conversion Date.
<PAGE>
Thereafter, if not terminated, this Agreement shall continue with respect to a
particular Fund automatically for successive one-year terms, provided that such
continuance is specifically approved at least annually by (a) by the vote of a
majority of those members of the Trust's Board of Trustees who are not parties
to this Agreement or interested persons of any such party, cast in person at a
meeting for the purpose of voting on such approval and (b) by the vote of the
Trust's Board of Trustees or the vote of a majority of the outstanding voting
securities of such Fund. This Agreement is terminable without penalty, on not
less than sixty days' prior written notice, by the Trust's Board of Trustees, by
vote of a majority of the outstanding voting securities of the Trust or by the
Distributor. This Agreement will also terminate automatically in the event of
its assignment. (As used in this Agreement, the terms "majority of the
outstanding voting securities," "interested persons" and "assignment" shall have
the same meanings as ascribed to such terms in the 1940 Act.)
IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be executed by their officers designated below as of the day and year first
written above.
IBJ FUNDS TRUST IBJ FUNDS DISTRIBUTOR, INC.
By: /s/ John J. Pileggi By: /s/ Gordon M. Forrester
- ----------------------- ---------------------------
John J. Pileggi Gordon M. Forrester
Title: President Title: Vice President
Date: October 1, 1996 Date: October 1, 1996
<PAGE>
Dated: January 1, 1997
SCHEDULE A
TO THE DISTRIBUTION AGREEMENT
BETWEEN
IBJ FUNDS TRUST
AND
IBJ FUNDS DISTRIBUTOR, INC.
DISTRIBUTION AND SHAREHOLDER SERVICE PLAN
TRANSFER AGENCY AGREEMENT
AGREEMENT made this 1st day of October, 1996, between IBJ FUNDS
TRUST (the "Trust"), a Delaware business trust, and BISYS FUND SERVICES, INC.
("BISYS"), a Delaware corporation.
WHEREAS, the Trust desires that BISYS perform certain services for
each series of the Trust (individually referred to herein as a "Fund" and
collectively as the "Funds"); and
WHEREAS, BISYS is willing to perform such services on the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual premises and
covenants herein set forth, the parties agree as follows:
1. RETENTION OF BISYS; CONVERSION TO THE SERVICES.
The Trust hereby engages BISYS to act as the transfer agent for
the Funds to perform (i) the transfer agent services set forth in Schedule A
hereto (the "Initial Services"), (ii) such special services (the "Special
Services") incidental to the performance of such services as may be agreed to by
the parties from time to time (for such fees as the parties may agree as
aforesaid) and (iii) such additional services (collectively with the Initial
Services and the Special Services, the "Services"), as may be agreed to by the
parties from time to time and set forth in an amendment to said Schedule A (for
such fees as the parties may agree as aforesaid), and, in connection therewith,
the Trust agrees to convert to BISYS' data processing systems and software (the
"BISYS System") as necessary in order to receive the Services. The Trust shall
cooperate with BISYS to provide BISYS with all necessary information and
assistance required to successfully convert to the BISYS System. BISYS shall
provide the Trust with a schedule relating to such conversion and the parties
agree that the conversion may progress in stages. The date upon which all
Initial Services shall have been converted to the BISYS System shall be referred
to herein as the "Conversion Date." BISYS hereby accepts such engagement and
agrees to perform the Services commencing, with respect to each individual
Service, on the date that the conversion of such Service to the BISYS System has
been completed. BISYS shall determine in accordance with its normal acceptance
procedures when the applicable Service has been successfully converted.
BISYS may, in its discretion, appoint in writing other parties
qualified to perform transfer agency services reasonably acceptable to the Trust
(individually, a "Sub-transfer Agent") to carry out some or all of its
responsibilities under this Agreement with respect to a Fund; provided, however,
that the Sub-transfer Agent shall be the agent of BISYS and not the agent of the
Trust or such Fund, and that BISYS shall be fully responsible for the acts of
such Sub-transfer Agent and shall not be relieved of any of its responsibilities
hereunder by the appointment of such Sub-transfer Agent.
<PAGE>
2. FEES.
Commencing on the Conversion Date, the Trust shall pay BISYS for
the services to be provided by BISYS under this Agreement in accordance with,
and in the manner set forth in, Schedule B hereto. Fees for any additional
services to be provided by BISYS pursuant to an amendment to Schedule A hereto
shall be subject to mutual agreement at the time such amendment to Schedule A is
proposed.
3. REIMBURSEMENT OF EXPENSES.
In addition to paying BISYS the fees described in Section 2
hereof, the Trust agrees to reimburse BISYS for BISYS' out-of-pocket expenses in
providing services hereunder, including without limitation, the following:
(a) All freight and other delivery and bonding charges incurred
by BISYS in delivering materials to and from the Trust and
in delivering all materials to shareholders;
(b) All direct telephone, telephone transmission and telecopy or
other electronic transmission expenses incurred by BISYS in
communication with the Trust, the Trust's investment adviser
or custodian, dealers, shareholders or others as required
for BISYS to perform the services to be provided hereunder;
(c) Costs of postage, couriers, stock computer paper,
statements, labels, envelopes, checks, reports, letters, tax
forms, proxies, notices or other form of printed material
which shall be required by BISYS for the performance of the
services to be provided hereunder;
(d) The cost of microfilm or microfiche of records or other
materials; and
(e) Any expenses BISYS shall incur at the written direction of
an officer of the Trust thereunto duly authorized.
4. EFFECTIVE DATE.
This Agreement shall become effective as of the date first
written above (the "Effective Date").
5. TERM.
The initial term of this Agreement (the "Initial Term") shall be
for a period commencing on the date this Agreement is executed by both parties
and ending on the date that is one year after the Conversion Date. Thereafter,
<PAGE>
it shall be renewed automatically for successive one-year terms unless written
notice not to renew is given by the non-renewing party to the other party at
least 60 days prior to the expiration of the then-current term; provided,
however, that after such termination, for so long as BISYS, with the written
consent of the Trust, in fact continues to perform any one or more of the
services contemplated by this Agreement or any Schedule or exhibit hereto, the
provisions of this Agreement, including without limitation the provisions
dealing with indemnification, shall continue in full force and effect. Fees and
out-of-pocket expenses incurred by BISYS but unpaid by the Trust upon such
termination shall be immediately due and payable upon and notwithstanding such
termination. BISYS shall be entitled to collect from the Trust, in addition to
the fees and disbursements provided by Sections 2 and 3 hereof, the amount of
all of BISYS' actual costs incurred for services in connection with BISYS'
activities in effecting such termination, including without limitation, the
delivery to the Trust and/or its distributor or investment adviser and/or other
parties, of the Trust's property, records, instruments and documents, or any
copies thereof. To the extent that BISYS may retain in its possession copies of
any Trust documents or records subsequent to such termination which copies had
not been requested by or on behalf of the Trust in connection with the
termination process described above, BISYS, in exchange for payment of its
costs, will provide the Trust with reasonable access to such copies.
In the event of a material breach of this Agreement by either
party, the non-breaching party shall notify the breaching party in writing of
such breach and, upon receipt of such notice, the breaching party shall have 45
days to remedy the breach. In the event the breach is not remedied within such
time period, the nonbreaching party may immediately terminate this Agreement.
If during the Initial Term, for any reason other than (i)
nonrenewal or (ii) termination based upon a material breach of this Agreement,
BISYS is replaced as transfer agent, or if a third party is added to perform all
or a part of the services provided by BISYS under this Agreement (excluding any
sub-transfer agent appointed by BISYS as provided in Section 1 hereof), then the
Trust shall make a one-time cash payment, as liquidated damages to, BISYS equal
to the balance due BISYS for the remainder of the term of this Agreement,
assuming for purposes of calculation of the payment that (i) the asset level of
the Trust on the date BISYS is replaced, or a third party is added, will remain
constant for the balance of the contract term and (ii) such payment shall be
based upon the actual fee being charged on such date (which may or may not be
lower than the contractual fee amount).
6. UNCONTROLLABLE EVENTS.
BISYS assumes no responsibility hereunder, and shall not be
liable for any damage, loss of data, delay or any other loss whatsoever caused
by events beyond its reasonable control.
7. LEGAL ADVICE.
BISYS shall notify the Trust at any time BISYS believes that it
is in need of the advice of counsel (other than counsel in the regular employ of
BISYS or any affiliated companies) with regard to BISYS' responsibilities and
<PAGE>
duties pursuant to this Agreement; and after so notifying the Trust, BISYS, at
its discretion, shall be entitled to seek, receive and act upon advice of legal
counsel of its choosing, such advice to be at the expense of the Trust or Funds
unless relating to a matter involving BISYS' willful misfeasance, bad faith,
gross negligence or reckless disregard with respect to BISYS' responsibilities
and duties hereunder and BISYS shall in no event be liable to the Trust or any
Fund or any shareholder or beneficial owner of the Trust for any action
reasonably taken pursuant to such advice.
8. INSTRUCTIONS.
Whenever BISYS is requested or authorized to take action
hereunder pursuant to instructions from a shareholder, or a properly authorized
agent of a shareholder ("shareholder's agent"), concerning an account in a Fund,
BISYS shall be entitled to rely upon any certificate, letter or other instrument
or communication, believed by BISYS to be genuine and to have been properly
made, signed or authorized by an officer or other authorized agent of the Trust
or by the shareholder or shareholder's agent, as the case may be, and shall be
entitled to receive as conclusive proof of any fact or matter required to be
ascertained by it hereunder a certificate signed by an officer of the Trust or
any other person authorized by the Trust's Board of Trustees or by the
shareholder or shareholder's agent, as the case may be.
As to the services to be provided hereunder, BISYS may rely
conclusively upon the terms of the Prospectuses and Statement of Additional
Information of the Trust relating to the Funds to the extent that such services
are described therein unless BISYS receives written instructions to the contrary
in a timely manner from the Trust.
9. STANDARD OF CARE; RELIANCE ON RECORDS AND INSTRUCTIONS;
INDEMNIFICATION.
BISYS shall use its best efforts to ensure the accuracy of all
services performed under this Agreement, but shall not be liable to the Trust
for any action taken or omitted by BISYS in the absence of bad faith, willful
misfeasance, negligence or from reckless disregard by it of its obligations and
duties. The Trust agrees to indemnify and hold harmless BISYS, its employees,
agents, directors, officers and nominees from and against any and all claims,
demands, actions and suits, whether groundless or otherwise, and from and
against any and all judgments, liabilities, losses, damages, costs, charges,
counsel fees and other expenses of every nature and character arising out of or
in any way relating to BISYS' actions taken or nonactions with respect to the
performance of services under this Agreement or based, if applicable, upon
reasonable reliance on information, records, instructions or requests given or
made to BISYS by the Trust, the investment adviser and on any records provided
by any fund accountant or custodian thereof; provided that this indemnification
shall not apply to actions or omissions of BISYS in cases of its own bad faith,
willful misfeasance, negligence or from reckless disregard by it of its
obligations and duties; and further provided that prior to confessing any claim
against it which may be the subject of this indemnification, BISYS shall give
the Trust written notice of and reasonable opportunity to defend against said
claim in its own name or in the name of BISYS.
<PAGE>
BISYS agrees to indemnify and hold harmless the Trust, its
employees, agents, Trustees, officers and nominees from and against any and all
actions, suits and claims, whether groundless or otherwise, and from and against
any and all judgments, liabilities, losses, damages, costs, charges, reasonable
counsel fees and other expenses of every nature and character arising out of or
in any way relating to BISYS' bad faith, willful misfeasance, negligence or
reckless disregard by it of its obligations and duties, with respect to the
performance of services under this Agreement, provided, that, prior to
confessing any claim against it which may be the subject of this
indemnification, the Trust shall give BISYS written notice of and a reasonable
opportunity to defend against said claim in its own name or in the name of the
Trust.
10. RECORD RETENTION AND CONFIDENTIALITY.
BISYS shall keep and maintain on behalf of the Trust all books
and records which the Trust or BISYS is, or may be, required to keep and
maintain pursuant to any applicable statutes, rules and regulations, including
without limitation Rules 31a-1 and 31a-2 under the Investment Company Act of
1940, as amended (the "1940 Act"), relating to the maintenance of books and
records in connection with the services to be provided hereunder. BISYS further
agrees that all such books and records shall be the property of the Trust and to
make such books and records available for inspection by the Trust or by the
Securities and Exchange Commission (the "Commission") at reasonable times and
otherwise to keep confidential all books and records and other information
relative to the Trust and its shareholders, except when requested to divulge
such information by duly-constituted authorities or court process, or requested
by a shareholder or shareholder's agent with respect to information concerning
an account as to which such shareholder has either a legal or beneficial
interest or when requested by the Trust, the shareholder, or shareholder's
agent, or the dealer of record as to such account.
11. REPORTS.
BISYS will furnish to the Trust and to its properly-authorized
auditors, investment advisers, examiners, distributors, dealers, underwriters,
salesmen, insurance companies and others designated by the Trust in writing,
such reports at such times as are prescribed in Schedule C attached hereto, or
as subsequently agreed upon by the parties pursuant to an amendment to Schedule
C.
12. RIGHTS OF OWNERSHIP.
All computer programs and procedures developed to perform
services required to be provided by BISYS under this Agreement are the property
of BISYS. All records and other data except such computer programs and
procedures are the exclusive property of the Trust and all such other records
and data will be furnished to the Trust in appropriate form as soon as
practicable after termination of this Agreement for any reason.
<PAGE>
13. RETURN OF RECORDS.
BISYS may at its option at any time, and shall promptly upon the
Trust's demand, turn over to the Trust and cease to retain BISYS' files, records
and documents created and maintained by BISYS pursuant to this Agreement which
are no longer needed by BISYS in the performance of its services or for its
legal protection. If not so turned over to the Trust, such documents and records
will be retained by BISYS for six years from the year of creation. At the end of
such six-year period, such records and documents will be turned over to the
Trust unless the Trust authorizes in writing the destruction of such records and
documents.
14. BANK ACCOUNTS.
The Trust and the Funds shall establish and maintain such bank
accounts with such bank or banks as are selected by the Trust, as are necessary
in order that BISYS may perform the services required to be performed hereunder.
To the extent that the performance of such services shall require BISYS directly
to disburse amounts for payment of dividends, redemption proceeds or other
purposes, the Trust and Funds shall provide such bank or banks with all
instructions and authorizations necessary for BISYS to effect such
disbursements.
15. REPRESENTATIONS OF THE TRUST.
The Trust certifies to BISYS that: (a) as of the close of
business on the Effective Date, each Fund which is in existence as of the
Effective Date has authorized unlimited shares, and (b) by virtue of its
Declaration of Trust, shares of each Fund which are redeemed by the Trust may be
sold by the Trust from its treasury, and (c) this Agreement has been duly
authorized by the Trust and, when executed and delivered by the Trust, will
constitute a legal, valid and binding obligation of the Trust, enforceable
against the Trust in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting the rights and remedies of creditors and secured parties.
16. REPRESENTATIONS OF BISYS.
BISYS represents and warrants that: (a) BISYS has been in, and
shall continue to be in, substantial compliance with all provisions of law,
including Section 17A(c) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), required in connection with the performance of its duties under
this Agreement; and (b) the various procedures and systems which BISYS has
implemented with regard to safekeeping from loss or damage attributable to fire,
theft or any other cause of the blank checks, records, and other data of the
Trust and BISYS' records, data, equipment, facilities and other property used in
the performance of its obligations hereunder are adequate and that it will make
such changes therein from time to time as are required for the secure
performance of its obligations hereunder.
<PAGE>
17. INSURANCE.
BISYS shall notify the Trust should its insurance coverage with
respect to professional liability or errors and omissions coverage be canceled
or reduced. Such notification shall include the date of change and the reasons
therefor. BISYS shall notify the Trust of any material claims against it with
respect to services performed under this Agreement, whether or not they may be
covered by insurance, and shall notify the Trust from time to time as may be
appropriate of the total outstanding claims made by BISYS under its insurance
coverage.
18. INFORMATION TO BE FURNISHED BY THE TRUST AND FUNDS.
The Trust has furnished to BISYS the following:
(a) Copies of the Declaration of Trust of the Trust and of any
amendments thereto, certified by the proper official of the
state in which such Declaration has been filed.
(b) Copies of the following documents:
1. The Trust's By-Laws and any amendments thereto.
2. Certified copies of resolutions of the Board of Trustees
covering the following matters:
A. Approval of this Agreement and authorization of a
specified officer of the Trust to execute and
deliver this Agreement and authorization for
specified officers of the Trust to instruct BISYS
hereunder; and
B. Authorization of BISYS to act as Transfer Agent for
the Trust on behalf of the Funds.
(c) A list of all officers of the Trust, together with specimen
signatures of those officers, who are authorized to instruct
BISYS in all matters.
(d) Two copies of the following (if such documents are employed
by the Trust):
1. Prospectuses and Statement of Additional Information;
2. Distribution Agreement; and
3. All other forms commonly used by the Trust or its
Distributor with regard to their relationships and
transactions with shareholders of the Funds.
<PAGE>
(e) A certificate as to shares of beneficial interest of the
Trust authorized, issued, and outstanding as of the
Effective Date of BISYS' appointment as Transfer Agent (or
as of the date on which BISYS' services are commenced,
whichever is the later date) and as to receipt of full
consideration by the Trust for all shares outstanding, such
statement to be certified by the Treasurer of the Trust.
19. INFORMATION FURNISHED BY BISYS.
BISYS has furnished to the Trust the following:
(a) BISYS' Articles of Incorporation.
(b) BISYS' By-Laws and any amendments thereto.
(c) Certified copies of actions of BISYS covering the following
matters:
1. Approval of this Agreement, and authorization of a
specified officer of BISYS to execute and deliver this
Agreement;
2. Authorization of BISYS to act as Transfer Agent for the
Trust.
(d) A copy of the most recent independent accountants' report
relating to internal accounting control systems as filed
with the Commission pursuant to Rule 17Ad-13 under the
Exchange Act.
20. AMENDMENTS TO DOCUMENTS.
The Trust shall furnish BISYS written copies of any amendments
to, or changes in, any of the items referred to in Section 18 hereof forthwith
upon such amendments or changes becoming effective. In addition, the Trust
agrees that no amendments will be made to the Prospectuses or Statement of
Additional Information of the Trust which might have the effect of changing the
procedures employed by BISYS in providing the services agreed to hereunder or
which amendment might affect the duties of BISYS hereunder unless the Trust
first obtains BISYS' approval of such amendments or changes.
21. RELIANCE ON AMENDMENTS.
BISYS may rely on any amendments to or changes in any of the
documents and other items to be provided by the Trust pursuant to Sections 18
and 20 of this Agreement and the Trust hereby indemnifies and holds harmless
BISYS from and against any and all claims, demands, actions, suits, judgments,
liabilities, losses, damages, costs, charges, counsel fees and other expenses of
every nature and character which may result from actions or omissions on the
part of BISYS in reasonable reliance upon such amendments and/or changes.
Although BISYS is authorized to rely on the above-mentioned amendments to and
<PAGE>
changes in the documents and other items to be provided pursuant to Sections 18
and 20 hereof, BISYS shall be under no duty to comply with or take any action as
a result of any of such amendments or changes unless the Trust first obtains
BISYS' written consent to and approval of such amendments or changes.
22. COMPLIANCE WITH LAW.
Except for the obligations of BISYS set forth in Section 10
hereof, the Trust assumes full responsibility for the preparation, contents, and
distribution of each prospectus of the Trust as to compliance with all
applicable requirements of the Securities Act of 1933, as amended (the "1933
Act"), the 1940 Act, and any other laws, rules and regulations of governmental
authorities having jurisdiction. BISYS shall have no obligation to take
cognizance of any laws relating to the sale of the Trust's shares. The Trust
represents and warrants that no shares of the Trust will be offered to the
public until the Trust's registration statement under the 1933 Act and the 1940
Act has been declared or becomes effective.
23. NOTICES.
Any notice provided hereunder shall be sufficiently given when
sent by registered or certified mail to the party required to be served with
such notice at the following address: if to the Trust, to it at IBJ Schroder
Bank & Trust Co., One State Street, New York, New York 10004, Attn: Dennis
Buchert, with a copy to Steven Howard, Esq., Baker & McKenzie, 805 Third Avenue,
New York, New York 10022; if to BISYS, to it at 3435 Stelzer Road, Columbus,
Ohio 43219, or at such other address as such party may from time to time specify
in writing to the other party pursuant to this Section.
24. HEADINGS.
Paragraph headings in this Agreement are included for
convenience only and are not to be used to construe or interpret this Agreement.
25. ASSIGNMENT.
This Agreement and the rights and duties hereunder shall not be
assignable by either of the parties hereto except by the specific written
consent of the other party. This Section 25 shall not limit or in any way affect
BISYS' right to appoint a Sub-transfer Agent pursuant to Section 1 hereof. This
Agreement shall be binding upon, and shall inure to the benefit of, the parties
hereto and their respective successors and permitted assigns.
26. GOVERNING LAW.
This Agreement shall be governed by and provisions shall be
construed in accordance with the laws of the State of Ohio. IN WITNESS WHEREOF,
the parties hereto have executed and delivered this Agreement as of the day and
year first above written.
IBJ FUNDS TRUST
By: /s/ John J. Pileggi
-----------------------
John J. Pileggi
Title: President
BISYS FUND SERVICES, INC.
By: /s/ J. David Huber
----------------------
J. David Huber
Title: Executive Vice President
<PAGE>
Dated: October , 1996
SCHEDULE A
TO THE TRANSFER AGENCY AGREEMENT
BETWEEN
IBJ FUNDS TRUST
AND
BISYS FUND SERVICES, INC.
TRANSFER AGENCY SERVICES
1. SHAREHOLDER TRANSACTIONS
a. Process shareholder purchase and redemption orders.
b. Set up account information, including address, dividend option,
taxpayer identification numbers and wire instructions.
c. Issue confirmations in compliance with Rule 10 under the Securities
Exchange Act of 1934, as amended.
d. Issue periodic statements for shareholders.
e. Process transfers and exchanges.
f. Process dividend payments, including the purchase of new shares,
through dividend reimbursement.
2. SHAREHOLDER INFORMATION SERVICES
a. Make information available to shareholder servicing unit and other
remote access units regarding trade date, share price, current
holdings, yields, and dividend information.
b. Produce detailed history of transactions through duplicate or special
order statements upon request.
c. Provide mailing labels for distribution of financial reports,
prospectuses, proxy statements or marketing material to current
shareholders.
<PAGE>
3. COMPLIANCE REPORTING
a. Provide reports to the Securities and Exchange Commission, the
National Association of Securities Dealers and the States in which the
Fund is registered.
b. Prepare and distribute appropriate Internal Revenue Service forms for
corresponding Fund and shareholder income and capital gains.
c. Issue tax withholding reports to the Internal Revenue Service.
4. DEALER/LOAD PROCESSING (IF APPLICABLE)
a. Provide reports for tracking rights of accumulation and purchases made
under a Letter of Intent.
b. Account for separation of shareholder investments from transaction
sale charges for purchase of Fund shares.
c. Calculate fees due under 12b-1 plans for distribution and marketing
expenses.
d. Track sales and commission statistics by dealer and provide for
payment of commissions on direct shareholder purchases in a load Fund.
5. SHAREHOLDER ACCOUNT MAINTENANCE
a. Maintain all shareholder records for each account in the Trust.
b. Issue customer statements on scheduled cycle, providing duplicate
second and third party copies if required.
c. Record shareholder account information changes.
d. Maintain account documentation files for each shareholder.
<PAGE>
SCHEDULE B
TO THE TRANSFER AGENCY AGREEMENT
BETWEEN
IBJ FUNDS TRUST
AND
BISYS FUND SERVICES, INC.
TRANSFER AGENT FEES
Effective as of the Conversion Date, the Transfer Agent shall
receive an account maintenance fee of $15.00 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.
ADDITIONAL SERVICES:
Additional services such as IRA processing, development of interface
capabilities, servicing of 403(b) and 408(c) accounts, management of cash sweeps
between DDAs and mutual fund accounts and coordination of the printing and
distribution of prospectuses, annual reports and semi-annual reports are subject
to additional fees which will be quoted upon request. Programming costs or
database management fees for special reports or specialized processing will be
quoted upon request.
OUT-OF-POCKET EXPENSES:
BISYS shall be entitled to be reimbursed for all reasonable
out-of-pocket expenses including, but not limited to, the expenses set forth in
Section 3 of the Transfer Agency Agreement to which this Schedule B is attached.
<PAGE>
SCHEDULE C
TO THE TRANSFER AGENCY AGREEMENT
BETWEEN
IBJ FUNDS TRUST
AND
BISYS FUND SERVICES, INC.
REPORTS
1. Daily Shareholder Activity Journal
2. Daily Fund Activity Summary Report
a. Beginning Balance
b. Dealer Transactions
c. Shareholder Transactions
d. Reinvested Dividends
e. Exchanges
f. Adjustments
g. Ending Balance
3. Daily Wire and Check Registers
4. Monthly Dealer Processing Reports
5. Monthly Dividend Reports
6. Sales Data Reports for Blue Sky Registration
7. Annual report by independent public accountants concerning BISYS'
shareholder system and internal accounting control systems to be filed with
the Securities and Exchange Commission pursuant to Rule 17Ad-13 of the
Securities Exchange Act of 1934, as amended.
[LETTERHEAD OF COOPERS & LYBRAND]
CONSENT OF INDEPENDENT ACCOUNTANTS
----------
We consent to the inclusion in this Post-Effective Amendment No. 6 to the
Registration Statement on Form N-1A (Registration Nos. 33-83430 and 811-8738) of
our report dated January 22, 1997, on our audits of the financial statements and
financial highlights of IBJ Funds Trust.
We also consent to the reference to our Firm in the Prospectus under the caption
"Financial Highlights" and in the Statement of Additional Information under the
captions "Other Information--Independent Accounts" and "Financial Statements".
/s/ Coopers & Lybrand L.L.P.
-------------------------------
Coopers & Lybrand L.L.P.
New York, New York
April 14, 1997
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<PER-SHARE-NAV-END> 12.76<F1>
<EXPENSE-RATIO> 2.98<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Service Class
</FN>
</TABLE>
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 W. Anthony Turner, Georgette L. Horton,
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 Funds 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
- 25 -
<PAGE>
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 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
the 20th day of March, 1997.
/s/Robert Dunker
----------------
Robert Dunker
/s/Stephen V. R. Goodhue
------------------------
Stephen V. R. Goodhue
/s/Edward F. Ryan
-----------------
Edward F. Ryan
/s/George H. Stewart
--------------------
George H. Stewart
- 26 -
