FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON March 30, 1998.
FILE NO. 33-83430
FILE NO. 811-8738
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-lA
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 (X)
Post-Effective Amendment No. 5
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 (X)
Amendment No. 7
IBJ Funds Trust
(Exact name of Registrant as Specified in Charter)
4400 Computer Drive
Westborough, Massachusetts 01581 (617) 573-1529
- --------------------------------- --------------
(Address of Principal Executive Offices) (Registrant's Telephone Number)
Brigid O. Bieber
One Exchange Place
Boston, Massachusetts 02109
(Name and Address of Agent for Service)
With a Copy to:
Steven R. Howard, Esq.
Baker & McKenzie
805 Third Avenue
New York, New York 10022
It is proposed that this filing become effective (check appropriate box):
(X) immediately upon filing pursuant to Paragraph (b); on (date) pursuant
to Paragraph (b); 60 days after filing pursuant to paragraph (a)(i);
on (date) pursuant to Paragraph (a)(i); 75 days after filing pursuant
to paragraph (a)(ii); or on (date) pursuant to paragraph (a)(ii) of
Rule 485.
<PAGE>
IBJ FUNDS TRUST
Registration Statement on Form N-1A
Cross Reference Sheet Pursuant to Rule 481(a)
SERVICE CLASS PROSPECTUS
Part A--INFORMATION REQUIRED IN A PROSPECTUS:
<TABLE>
<CAPTION>
<S> <C>
Form N-lA Item Caption in Prospectus
1. Cover Page Cover Page
2. Synopsis Fund Expenses;
Fee Table
3. Condensed Financial Information Financial Highlights
4. General Description of Registrant Highlights; Investment Policies
and Practices of the Funds
5. Management of the Fund Management of the Funds
5A. Management's Discussion Not Applicable
of Fund Performance
6. Capital Stock and Other Securities Dividends, Distributions
and Federal Income Tax;
Other Information
7. Purchase of Securities Being Offered Fund Share Valuation;
Pricing and Purchase of Fund Shares
8. Redemption or Repurchase Redemption of Fund Shares
9. Legal Proceedings Not Applicable
</TABLE>
<PAGE>
IBJ FUNDS TRUST
Registration Statement on Form N-1A
Cross Reference Sheet Pursuant to Rule 481a
PREMIUM CLASS PROSPECTUS
Part A--INFORMATION REQUIRED IN A PROSPECTUS:
<TABLE>
<CAPTION>
<S> <C>
Form N-lA Item Caption in Prospectus
1. Cover Page Cover Page
2. Synopsis Fund Expenses;
Fee Table
3. Condensed Financial Information Financial Highlights
4. General Description of Registrant Highlights; Investment Policies
and Practices of the Funds
5. Management of the Fund Management of the Funds
5A. Management's Discussion Not Applicable
of Fund Performance
6. Capital Stock and Other Securities Dividends, Distribution
and Federal Income Tax;
Other Information
7. Purchase of Securities Being Offered Fund Share Valuation;
Pricing and Purchase of Fund Shares
8. Redemption or Repurchase Redemption of Fund Shares
9. Legal Proceedings Not Applicable
</TABLE>
<PAGE>
Part B--INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION:
<TABLE>
<CAPTION>
<S> <C>
Form N-lA Item Caption in SAI
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History Covered in Part A
13. Investment Objectives and Policies Investment Policies;
Investment Restrictions
14. Management of the Fund Management
15. Principal Holders of Securities Management
16. Investment Advisory and Other Services Management; Custodian;
Independent Auditors
17. Brokerage Allocation Portfolio Transactions
18. Capital Stock and Other Securities Other Information; Capitalization
19. Purchase, Redemption, and
Pricing of Securities Being Offered Covered in Part A
20. Tax Status Taxation
21. Underwriters Management
22. Calculations of Performance Data Yield and Performance Information
23. Financial Statements Financial Statements
</TABLE>
IBJ FUNDS Trust
4400 Computer Drive
Westborough, Massachusetts 01581-5120
- ---------------------------------------------------------------------------
General and Account Information: 1-800-99-IBJFD (1-800-994-2533)
- ---------------------------------------------------------------------------
SERVICE CLASS PROSPECTUS
IBJ SCHRODER BANK & TRUST COMPANY - Investment Adviser
("IBJS" OR THE "ADVISER")
FIRST DATA INVESTOR SERVICES GROUP, INC. - Administrator
("FDISG")
FIRST DATA DISTRIBUTORS, INC. - Distributor
("FDDI")
- --------------------------------------------------------------------------
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:
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 seeks to provide investors with a high level
of total return by investing in debt market securities.
The Core Equity Fund seeks to provide investors with long-term capital
appreciation.
The Blended Total Return 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 30, 1998,
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 30, 1998
<PAGE>
TABLE OF CONTENTS
Page
<PAGE>
g:/shared/clients/ibj/edgar/98prepro.doc 50
g:\shared\clients\ibj\edgar\98prepro.doc
Fund Expenses.................................. 3
Fee Table...................................... 3
Financial Highlights........................... 5
Highlights..................................... 7
The Investment Policies and
Practices of the Funds ...................... 11
Management of the Funds........................ 17
Fund Share Valuation........................... 19
Pricing and Purchase of Fund Shares............ 20
Minimum Purchase Requirements.................. 21
Individual Retirement Accounts ................ 21
Exchange of Fund Shares........................ 21
Redemption of Fund Shares...................... 22
Dividends, Distributions and
Federal Income Tax........................... 24
Investment Restrictions........................ 26
Risks of Investing in the Funds ............... 27
Other Information.............................. 28
Appendix....................................... 31
<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, 1997. 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."
<TABLE>
<CAPTION>
FEE TABLE
<S> <C> <C> <C> <C>
Reserve Core Blended
Money Fixed Core Total
Market Income Equity Return
Fund Fund Fund Fund
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 Fees (after waiver)1............................... 0.00% 0.40% 0.50% 0.50%
12b-1 Fees.................................................... None None None None
Other Expenses................................................ 0.64% 0.67% 0.39% 0.47%
-------- -------- -------- -----
Total Portfolio Operating Expenses (after waiver/reimbursements)1
0.64% 1.07% 0.89% 0.97%
======== ======== ======== =====
- ---------------------------------
(1) 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 0.99%, 1.17%, 0.99% and
1.07%, respectively.
</TABLE>
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.
<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>
<S> <C> <C> <C> <C>
Reserve Core Blended
Money Fixed Core Total Return
Market Income Equity Fund
Fund Fund Fund
1 year................................. $ 7 $ 11 $ 9 $ 10
3 years................................ $20 $ 34 $ 28 $ 31
5 years................................ $36 $ 59 $ 49 $ 54
10 years............................... $80 $131 $110 $119
- -------------------------
* 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.
</TABLE>
<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, 1997. The financial highlights for the periods indicated
have been audited by Coopers & Lybrand L.L.P., independent accountants.
Effective December 1, 1997, Ernst & Young LLP became the Funds' independent
auditor. The Funds' financial statements and report of Coopers & Lybrand L.L.P.
are included in the Funds' Annual Report, and are incorporated by reference into
the Funds' SAI. Contact the Funds at 1-800-99-IBJFD (1-800-994-2533) for a free
copy of the Annual Report or SAI.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Reserve Money Market Fund Core Fixed Income Fund
For the For the For the For the For the Year For the
Year Year Period Year ended Period
ended ended Feb. 1, ended Nov. 30, Feb. 1,
Nov. 30, Nov. 30, 1995* Nov. 30, 1995*
1997 1996 to Nov. 30, 1997 1996 to Nov. 30,
1995 1995
------------ ----
Net Asset Value, Beginning of Period. $1.00 $1.00 $1.00 $10.22 $10.72 $10.00
----- ----- ----- ------ ------ ------
Income from Investment Operations:
Net investment income.............. 0.05 0.05 0.04 0.57 0.54 0.48
Net realized and unrealized gains
(losses) on 0.00 0.00 0.00 0.14 (0.12) 0.72
---- ---- ---- ---- ------ ----
investment transactions........
Total income from investment 0.05 0.05 0.04 0.71 0.42 1.20
---- ---- ---- ---- ---- ----
operations...........................
Less Dividends from: (0.05) (0.05) (0.04) (0.57) (0.54) (0.48)
Net investment income..............
Realized gains..................... 0.00 0.00 0.00 0.00 (0.38) 0.00
---- ---- ---- ---- ------ ----
Net change in net asset value per 0.00 0.00 0.00 0.14 (0.50) 0.72
---- ---- ---- ---- ------ ----
share................................
Net Asset Value, End of Period....... $1.00 $1.00 $1.00 $10.36 $10.22 $10.72
===== ===== ===== ====== ====== ======
Total Return(a)...................... 4.96% 4.88% 4.55% 7.20% 4.25% 12.28%
Ratios/Supplemental Data:
Net Assets, End of Period (in $25,784 $34,269 $28,943 $31,628 $27,768 $26,849
thousands)...........................
Ratios to average net assets:
Expenses before 0.99% 0.95% 0.92%** 1.17% 1.22% 1.22%**
waivers/reimbursements+..............
Expenses net waivers/reimbursements 0.64% 0.65% 0.64%** 1.07% 1.12% 1.12%**
Net investment income.............. 4.84% 4.82% 5.40%** 5.61% 5.07% 5.59%**
Portfolio Turnover Rate(b)........... N/A N/A N/A 210% 160% 297%
* Commencement of operations.
** Annualized.
+ During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred,
the ratios would have been as indicated.
(a) Total return is based on the change in net asset value during and the period
and assumes reinvestment of all dividends and distributions. (b) Portfolio
turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Core Equity Fund Blended Total Return Fund
For the For the For the For the For the For the
Year Year Period Year Year Period
Ended Ended Feb. 1, 1995* Ended Ended Feb. 1,
Nov. 30, Nov. 30, to Nov. 30, Nov. 30, Nov. 30, 1995*
1997 1996 1995 1997 1996 to Nov. 30,
1995
Net Asset Value, Beginning of Period. $15.37 $12.97 $10.00 $12.76 $11.79 $10.00
------ ------ ------ ------ ------ ------
Income from Investment Operations:
Net investment income.............. 0.35 0.14 0.13 0.50 0.34 0.31
Net realized and unrealized gains
on 3.03 2.90 2.84 1.27 1.26 1.79
---- ---- ---- ---- ---- ----
investment transactions.......
Total income from investment 3.38 3.04 2.97 1.77 1.60 2.10
---- ---- ---- ---- ---- ----
operations...........................
Less Distributions from: (0.31) (0.19) 0.00 (0.50) (0.36) (0.31)
Net investment income.............. (0.24) ---- ---- ----- ---- ----
In excess of net investment income.
Realized gains..................... (1.53) (0.45) 0.00 (0.52) (0.27) 0.00
------ ------ ---- ------ ------ ----
Net change in net asset value per 1.30 2.40 2.97 0.75 0.97 1.79
share................................
Net Asset Value, End of Period....... $16.67 $15.37 $12.97 $13.51 $12.76 $11.79
====== ====== ====== ====== ====== ======
Total Return(a)...................... 24.68% 24.61% 29.70% 14.69% 14.08% 20.82%
Ratios/Supplemental Data:
Net Assets, End of Period (in $93,640 $86,596 $61,867 $64,232 $50,583
thousands)........................... $105,386
Ratios to average net assets:
Expenses before 0.99% 0.99% 1.09%** 1.07% 1.09% 1.15%**
waivers/reimbursements+..............
Expenses net waivers/reimbursements 0.89% 0.89% 0.89%** 0.97% 0.99% 1.05%**
Net investment income.............. 0.74% 0.93% 1.29%** 2.91% 2.98% 3.04%**
Portfolio Turnover Rate(b)........... 44% 27% 37% 138% 77% 78%
Average Commission Rate(c)........... $0.0701 $0.0776 ---- $0.0731 $0.0789 ----
------ ------
* Commencement of operations.
** Annualized.
+ During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred,
the ratios would have been as indicated.
(a) Total return is based on the change in net asset value during and the period
and assumes reinvestment of all dividends and distributions. (b) Portfolio
turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued. (c) Represents the dollar
amount of commissions paid on portfolio transactions divided by the total number
of
portfolio shares purchased and sold for which commissions were charged and
is calculated on the basis of the Fund as a whole without distinguishing
between the classes of shares issued.
</TABLE>
<PAGE>
HIGHLIGHTS
Investment Objectives and Policies of the Funds
This Prospectus describes four funds, one money market fund and three
Non-Money market funds, 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 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 Adviser to present minimal
credit risks.
The Money Market Fund may invest in obligations permitted to be
purchased under Rule 2a-7 of the Investment Company Act of 1940, as amended (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 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 Money Market Fund may also purchase
securities on a "when-issued" basis and purchase or sell securities on a
"forward commitment" basis.
The 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
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 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 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.
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. Except for temporary defensive
purposes, the Fund will not hold more than 20% of its total assets in the form
of cash or cash equivalents at any given time. 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, 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 derivative hedging vehicles (futures and/or options on securities)
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.
FDISG, 4400 Computer Drive, Westborough, Massachusetts 01581-5120, acts
as administrator to the Funds pursuant to an Administration Agreement dated
March 1, 1998. For its services, FDISG receives a fee from the Funds based on
each Fund's average daily net assets. See "Management of the Funds" in this
Prospectus.
Guide to Investing in the IBJ Family of Funds
Purchase orders for the Money Market Fund received by 12:00 noon
Eastern Standard Time will become effective that day. Purchase orders for the
Non-Money Market Funds received by your IBJS representative in "good order"
prior to 4:00 p.m., Eastern Standard Time, and transmitted to the Distributor
prior to 4:00 p.m. Eastern Standard Time, will become effective that day.
...Minimum Initial Investment $1,000
..Minimum Initial Investment for IRAs $ 250
..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.
..Minimum initial exchange $ 500
(minimum for subsequent exchanges)
Shareholders may redeem shares by telephone, mail or wire. Shares may
not be redeemed by facsimile.
If a redemption request is received by 12:00 noon Eastern
Standard Time, proceeds for the Money Market Fund will be
transferred to a designated account that day.
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.
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.
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 the Trust, which is 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.
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.
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.
The investment objective of the Core Equity Fund is to
provide investors with long-term capital appreciation.
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. It
is the intention of the Funds, unless otherwise indicated, that with respect to
the Funds' policies that are a result of application of law, the Funds will take
advantage of the flexibility provided by rules or interpretations of the SEC
currently in existence or promulgated in the future, or changes to such laws.
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
U.S. 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
U.S. 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 U.S. Government or U.S.
Treasury guarantees, such as mortgage-backed certificates guaranteed by
Ginnie Mae ("GNMA") (formerly known as the Government National Mortgage
Association). 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
U.S. 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 U.S. 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 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.
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
or unrated commercial paper and rated or unrated 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 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). 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
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 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.
Below-Investment Grade; High Yield Securities (Blended Total Return
Fund). The Blended Total Return Fund is permitted to invest in below-investment
grade (high-yield) securities with high yields and high risks. Fixed income
securities which are rated below "Baa3" by Moody's or "BBB-" by S&P, frequently
referred to as high yield securities, are considered to have speculative
characteristics and changes in economic conditions or other circumstances are
more likely to lead to a weakened capacity to make principal and interest
payments than in the case of higher-rated securities. Such securities are
subject to a substantial degree of credit risk.
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
U.S. Government agency or instrumentality.
Investments in Eurodollar and Yankee dollar obligations involve
additional risks. Most notably, there generally is less publicly available
information about foreign companies; there may be less governmental regulation
and supervision; they may use different accounting and financial standards; and
the adoption of foreign governmental restrictions may adversely affect the
payment of principal and interest on foreign investments. In addition, not all
foreign branches of United States banks are supervised or examined by regulatory
authorities as are United States banks, and such branches may not be subject to
reserve requirements.
Zero Coupon Securities (All Funds). The Funds may invest in zero coupon
securities. A zero coupon security pays no interest to its holder during its
life and is sold at a discount to its face value at maturity. The market prices
of zero coupon securities generally are more volatile than the market prices of
securities that pay interest periodically and are more sensitive to changes in
interest rates than non-zero coupon securities having similar maturities and
credit qualities. Although zero coupon securities do not pay interest to holders
prior to maturity, federal income tax law requires a Fund to recognize as
interest income a portion of the security's discount each year and that this
income must then be distributed to shareholders along with other income earned
by the Fund. To the extent that any shareholders in a Fund elect to receive
their dividends in cash rather than reinvest such dividends in additional
shares, cash to make these distributions will have to be provided from the
assets of the Fund or other sources such as proceeds of sales of Fund shares
and/or sales of portfolio securities. In such cases, the Fund will not be able
to purchase additional income producing securities with cash used to make such
distributions and its current income may ultimately be reduced as a result.
Variable rate demand obligations (All Funds). Variable rate demand
obligations have a maturity of 397 days or less with respect to the Money Market
Fund or 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 33-1/3% of each
such Fund's total assets (including the market value of the collateral received)
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 market-to-market basis in an amount at least
equal to the current market value of the securities loaned. For further
information, see "Investment Policies" in the SAI.
Repurchase Agreements (All Funds). The Funds may enter into repurchase
agreements with any bank and broker-dealer which, in the opinion of the
Trustees, presents a minimum risk of bankruptcy. Under a repurchase agreement, a
Fund acquires securities and obtains a simultaneous commitment from the seller
to repurchase the securities at a specified time and at an agreed upon yield.
The agreements will be fully collateralized and the value of the collateral,
including accrued interest, marked-to-market daily. The agreements may be
considered to be loans made by the purchaser, collateralized by the underlying
securities. If the seller should default on its obligation to repurchase the
securities, a Fund may experience a loss of income from the loaned securities
and a decrease in the value of any collateral, problems in exercising its rights
to the underlying securities and costs and time delays in connection with the
disposition of securities. The Money Market Fund may not invest more than 10%
and each Non-Money Market Fund 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.
Illiquid Investments (All Funds). No Fund may invest more than 15% (10%
with respect to the 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 recognized domestic or foreign
securities exchange).
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. 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.
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
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%.
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. He has managed each Fund since its inception.
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 Core Equity Fund and 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. He has managed the Core Equity Fund since
January 1, 1998 and the Blended Total Return Fund since
November 1, 1997.
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 97.7% owned by
The Industrial Bank of Japan, Limited (and 2.3% 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, 1997, included accounts with aggregate assets
of approximately $2.5 billion. The principal business address
of IBJS is One State Street, New York, New York 10004. As of
June 24, 1985, The Industrial Bank of Japan, Limited acquired
its interest in J. Henry Schroder Bank & Trust Company from
Schroders Incorporated. The name of the bank was changed from
J. Henry Schroder Bank & Trust Company to IBJ Schroder Bank &
Trust Company, effective January 1, 1987. The Industrial Bank
of Japan does not perform services for the Trust or any of the
Funds.
Based upon the advice of counsel, IBJS believes that the performance of
investment advisory services for the Funds will not violate the Glass Steagall
Act or other applicable banking laws or regulations. However, future statutory
or regulatory changes, as well as future judicial or administrative decisions
and interpretations of present and future statutes and regulations, could
prevent IBJS from continuing to perform such services for the Funds. If IBJS
were prohibited from acting as investment adviser to the Funds, it is expected
that the Board of Trustees would recommend to shareholders approval of a new
investment advisory agreement with another qualified investment adviser selected
by the Board or that the Board would recommend other appropriate action. The
Distributor
FDDI, 4400 Computer Drive, Westborough, Massachusetts 01581-5120, is
the Distributor of the Funds pursuant to a Distribution Agreement dated
March 1, 1998. FDDI is an indirect wholly-owned subsidiary of First Data
Corporation ("FDC"). Prior to March 1, 1998, IBJ Funds Distributor, Inc.
acted as sponsor and distributor of the Funds.
Administrative Services
As of March 1, 1998, the Funds have entered into an Administration
Agreement and a Transfer Agency and Services Agreement with FDISG. FDISG is a
wholly-owned subsidiary of FDC and is located at 4400 Computer Drive,
Westborough, Massachusetts 01581. Pursuant to the Administration Agreement,
FDISG 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 auditors 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, FDISG receives a fee
from each Fund computed daily and payable monthly, at the annual rate of: 0.15%
of average daily assets of each Fund up to $500 million; 0.10% of average daily
net assets of each Fund in excess of $500 million up to $1 billion; 0.075% of
average daily net assets of each Fund in excess of $1 billion. For fund
accounting services, FDISG receives a fee of $35,000 per Fund plus certain
out-of-pocket expenses. Pursuant to a Transfer Agency and Services Agreement
dated March 1, 1998, FDISG receives a fee of $20,000 per Fund plus certain
out-of-pocket expenses. Prior to March 1, 1998, BISYS Fund Services served as
administrator and transfer agent of the Funds. FDISG will perform substantially
identical services as its predecessor. Other Expenses
Each Fund bears all costs of its operations other than expenses
specifically assumed by FDDI, FDISG 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 Standard Time) for the Money Market Fund and at 4:00 p.m. (Eastern
Standard 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, Martin Luther King, Jr.'s Birthday,
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: 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 FDDI or FDISG 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.
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. FDISG 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 Standard Time), will become effective that day.
Orders for the Money Market Fund received in "good order" prior to 12:00 noon
Eastern Standard 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
their 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 1-800-99-IBJFD (1-800-994-2533) 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. Please call
1-800-99-IBJFD (1-800-994-2533) for wiring instructions. A completed application
must be sent by overnight delivery to the Fund in advance of the wire to IBJ
Funds Trust, P.O. Box 5183, Westborough, MA 01581-5183. Notification must be
given to the Fund at 1-800-99-IBJFD (1-800-994-2533) prior to 12:00 p.m. Eastern
Standard Time, of the wire date for the Money Market Fund and prior to 4:00 p.m.
Eastern Standard Time in the case of the Non-Money Market Funds.
By Mail. Payments to open new accounts should be sent to IBJ Funds
Trust, P.O. Box 5183, Westborough, MA 01581-5183, together with a completed
application. Fund purchases made by check 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 Funds by telephone at 1-800-99-IBJFD (1-800-994-2533).
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, FDDI, FDISG, 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 IRA information, call the Funds at
1-800-99-IBJFD (1-800-994-2533).
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 5183, Westborough, MA 01581-5183 or
by calling 1-800-99-IBJFD (1-800-994-2533). 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. A letter of instruction should be sent by mail to IBJ
Funds Trust, P.O. Box 5183, Westborough, MA 01581-5183. 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. No signature guarantee is required. Newly purchased shares
must remain in the account for 10 days.
Exchange by Telephone. To exchange Fund shares by telephone or if you
have any questions simply call the Funds at 1-800-99-IBJFD (1-800-994-2533). 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 may be delayed 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. Requests should be addressed to IBJ Funds Trust, P.O. Box
5183, Westborough, MA 01581-5183. To protect shareholder accounts, the Funds,
and the transfer agent from fraud, a signature guarantee will be required when
redemption proceeds are to be sent to an address other than the registered
address, or if the redemption is greater than $50,000. 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 Share Signature Guarantees" in this Prospectus).
Corporations, partnerships, trusts or other legal entities will be required to
submit additional documentation.
By Check: You may redeem your 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, FDISG 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 at
1-800-99-IBJFD (1-800-994-2533). 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 dollar or share 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 and telephone exchanges will be suspended for a
period of 10 days following an address change made by telephone.
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 Standard 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 dollar or share 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.
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 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 or
her 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
or her Fund shares. Distributions in excess of a shareholder's cost basis in his
or her 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 Fund and the Blended Total Return Fund 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 or
her pro rata share of the foreign taxes in computing his or her 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 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 Money Market Fund is subject to further diversification requirements with
respect to 100% of its assets. Also, each Fund will invest less than 25% of its
total assets in the securities of any one industry, excluding the 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 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 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 Money Market Fund invests.
The price per share of each of the other Funds will fluctuate with
changes in value of the investments held by the Fund. For example, the value of
a bond fund's shares will generally fluctuate inversely with the movements in
interest rates and a stock fund's shares will generally fluctuate as a result of
numerous factors, including, but not limited to, investors' expectations about
the economy and corporate earnings and interest rates. Shareholders of a Fund
should expect the value of their shares to fluctuate with changes in the value
of the securities owned by that Fund. Additionally, a Fund's investment in
smaller companies may involve greater risks than investments in large companies
due to such factors as limited product lines, markets and financial or
managerial resources, and less frequently traded securities that may be subject
to more abrupt price movements than securities of larger companies.
There is, of course, no assurance that a Fund will achieve its
investment objective or be successful in preventing or minimizing the risk of
loss that is inherent in investing in particular types of investment products.
In order to attempt to minimize that risk, the Adviser monitors developments in
the economy, the securities markets, and with each particular issuer. Also, as
noted earlier, each diversified Fund is managed within certain limitations that
restrict the amount of a Fund's investment in any single issuer.
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 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.
Below-Investment Grade; High Yield Securities (Blended Total Return
Fund). Below-investment grade (high-yield) bonds may be issued as a consequence
of corporate restructurings, such as leveraged buy-outs, mergers, acquisitions,
debt recapitalizations or similar events. Also, these bonds are often issued by
smaller, less creditworthy companies or by highly leveraged firms which are
generally less able than more financially stable firms to make scheduled
payments of interest and principal. The risks posed by bonds issued under such
circumstances are substantial. Also, during an economic downturn or substantial
period of rising interest rates, highly leveraged issuers my experience
financial stress which would adversely affect their ability to service principal
and interest payment obligations, to meet projected business goals and to obtain
additional financing. Changes by recognized rating agencies in the rating of any
security and in the ability of an issuer to make payments of interest and
principal will also ordinarily have a more dramatic affect on the values of
these investments than on the values of high-rated securities. Such changes in
value will not affect cash income derived from these securities, unless the
issuers fail to pay interest or dividends when due. Such changes will, however,
adversely affect a Fund's net asset value per share.
Year 2000 Risks. Like other mutual funds, financial and business
organizations and individuals around the world, a Fund could be adversely
affected if the computer systems used by IBJS and other service providers do not
properly process and calculate date-related information, certain dates, and in
particular, dates including the digit "9" and dates from and after January 1,
2000. This is commonly known as the "Year 2000 Problem." IBJS and FDISG are
taking steps that they each believe are reasonably designed to address the Year
2000 Problem with respect to the computer systems that each uses and to obtain
assurances that comparable steps are being taken by each of the Funds' other
major service providers. However, there can be no assurance that these steps
will be sufficient to avoid any adverse impact on the Funds.
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, FDDI, FDISG, 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 Trust
Instrument 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 Trust Instrument 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 Trust
Instrument, 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 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 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 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 a Fund's investment
objectives and policies, characteristics and quality of the Fund 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.
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 a 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.
The Trust compensates FDISG pursuant to the Transfer Agency and
Services Agreement described on page 18 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 5183, Westborough, Massachusetts 01581-5183.
General and Account Information: 1-800-99-IBJFD (1-800-994-2533).
<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 be below-investment grade and 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 - below-investment
grade (high yield), 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.
<PAGE>
IBJ FUNDS IBJ FUNDS TRUST
Address for A FAMILY OF
Trust Clients of IBSJ MUTUAL FUNDS
IBJ Schroder Bank & Trust Company The Reserve Money Market Fund seeks to provide
One State Street investors with current income, liquidity and the New York, New
York 10004 maintenance of a stable $1.00 net asset value by
investing in high quality, short-term obligations.
Investment Adviser The Core Fixed Income Fund seeks to provide
investors IBJ Schroder Bank & Trust Company with a high level of total
return by investing in fixed One State Street debt market securities
managed for total return. New York, New York 10004 The Core Equity
Fund seeks to provide investors with long-term capital appreciation.
Administrator
The Blended Total Return Fund seeks to provide
First Data Investor Services Group, Inc. investors with long-term
capital appreciation and 4400 Computer Drive current income for a high
total return by investing in Westborough, Massachusetts 01581-5120 a
balance of equities and debt market securities.
SERVICE CLASS PROSPECTUS
Distributor
First Data Distributors, Inc. March 30, 1998
4400 Computer Drive
Westborough, Massachusetts 01581-5120
Custodian Investment Adviser
IBJ SCHRODER BANK
IBJ Schroder Bank & Trust Company & TRUST COMPANY
One State Street
New York, New York 10004
Counsel
Baker & McKenzie
805 Third Avenue
New York, New York 10022
Independent Auditors
Ernst & Young LLP
787 7th Avenue
New York, New York 10019
IBJ FUNDS Trust
4400 Computer Drive
Westborough, Massachusetts 01581-5120
- -------------------------------------------------------------------------
General and Account Information: 1-800-99-IBJFD (1-800-994-2533)
- -------------------------------------------------------------------------
PREMIUM CLASS PROSPECTUS
IBJ SCHRODER BANK & TRUST COMPANY--Investment Adviser
("IBJS" or the "Adviser")
FIRST DATA INVESTOR SERVICES GROUP, INC.--Administrator
("FDISG")
- --------------------------------------------------------------------------
FIRST DATA DISTRIBUTORS, INC.--Distributor
- ----------------------------------------------------------------------------
("FDDI")
- ---------------------------------------------------------------------------
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:
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 seeks to provide investors with a high level of
total return by investing in debt market securities.
The Core Equity Fund seeks to provide investors with long-term
capital appreciation.
The Blended Total Return 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. 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 30, 1998,
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 30, 1998
<PAGE>
TABLE OF CONTENTS
Page
Page
<PAGE>
Fund Expenses.................................. 3
Fee Table...................................... 3
Financial Highlights........................... 5
Highlights..................................... 7
The Investment Policies and
Practices of the Funds ...................... 11
Management of the Funds........................ 17
Fund Share Valuation........................... 19
Pricing and Purchase of Fund Shares............ 20
Minimum Purchase Requirements.................. 21
Individual Retirement Accounts ................ 21
Exchange of Fund Shares........................ 21
Redemption of Fund Shares...................... 22
Dividends, Distributions and
Federal Income Tax........................... 24
Investment Restrictions........................ 26
Risks of Investing in the Funds ............... 27
Other Information.............................. 28
Appendix....................................... 31
<PAGE>
45
g:\shared\clients\ibj\edgar\98sai.doc
<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, 1997. 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."
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FEE TABLE
Reserve Core Blended
Money Fixed Core Total
Market Income Equity Return
Fund Fund Fund Fund
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 Fees (after waiver)(2).................. 0.00% 0.40% 0.50% 0.50%
12b-1 Fees(3)...................................... 0.35% 0.35% 0.35% 0.35%
Shareholder Servicing Fee.......................... 0.50% 0.50% 0.50% 0.50%
Other Expenses..................................... 0.64% 0.67% 0.39% 0.47%
----- ----- ----- -----
Total Portfolio Operating Expenses
(after waiver/reimbursements)(2)................ 1.49% 1.92% 1.74% 1.82%
===== ===== ===== =====
..................
- ---------------------------
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, FDDI,
FDISG, 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 1.84%, 2.02%, 1.84% and 1.92%, respectively.
3 Long-term shareholders may pay more than the economic equivalent of the maximum front-end sales charge
permitted by the NASD.
</TABLE>
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.
<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>
<S> <C> <C> <C> <C>
Reserve Core Blended
Money Fixed Core Total
Market Income Equity Return
Fund Fund Fund Fund
1 year............................................. $ 15 $ 19 $ 18 $ 18
3 years............................................ $ 47 $ 60 $ 55 $ 57
5 years............................................ $ 81 $104 $ 94 $ 99
10 years........................................... $178 $224 $205 $214
...........................
* 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.
</TABLE>
<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, 1997. The financial highlights for the periods indicated
have been audited by Coopers & Lybrand L.L.P., independent accountants.
Effective December 1, 1997, Ernst & Young LLP became the Funds' independent
auditor. The Funds' financial statements and report of Coopers & Lybrand L.L.P.
are included in the Funds' Annual Report, and are incorporated by reference into
the Funds' SAI. Contact the Funds at 1-800-99-IBJFD (1-800-994-2533) for a free
copy of the Annual Report or SAI.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Reserve Money Core Fixed
Market Fund Income Fund
------------------------------------------ -------------------------------------------
For the Year For the For the For the Year For the For the
ended Year Period Feb. ended Year ended Period Feb.
Nov. 30, ended 1, 1995* Nov.30, Nov. 30, 1, 1995*
1997 Nov. 30, to Nov. 30, 1997 1996 to Nov. 30,
1996 1995 1995
---- ---- ----
Net Asset Value, Beginning of Period $1.00 $1.00 $1.00 $10.22 $10.72 $10.00
----- ----- ----- ------ ------ ------
Income from Investment Operations:
Net investment income............ 0.05 0.05 0.04 0.57 0.54 0.48
---- ---- ---- ---- ---- ----
Net realized and unrealized
gains/losses on investment 0.00 0.00 0.00 0.13 (0.12) 0.72
---- ---- ---- ---- ------ ----
transactions...................
Total income from Investment 0.05 0.05 0.04 0.70 0.42 1.20
---- ---- ---- ---- ---- ----
Operations.....................
Less Dividends from:
Net investment income............ (0.05) (0.05) (0.04) (0.57) (0.54) (0.48)
Realized gains 0.00 0.00 0.00 0.00 (0.38) 0.00
---- ---- ---- ---- ------ ----
Net change in net asset value per 0.00 0.00 0.00 0.13 (0.50) 0.72
---- ---- ---- ---- ------ ----
share
Net Asset Value, End of Period...... $1.00 $1.00 $1.00 $10.35 $10.22 $10.72
===== ===== ===== ====== ====== ======
Total Return(a)..................... 4.96% 4.88% 4.55% 7.20% 4.25% 12.28%
Ratios/Supplemental Data:
Net Assets, End of Period (in $13 $14 $13 $13 $15 $14
thousands).....................
Ratios to average net assets:
Expenses before 0.99% 0.95% 0.92%** 1.17% 1.22% 1.22%**
waivers/reimbursements+........
Expenses net waivers/reimbursements 0.64% 0.65% 0.64%** 1.07% 1.12% 1.12%**
Net investment income............ 4.84% 4.82% 5.40%** 5.61% 5.07% 5.59%**
Portfolio Turnover Rate(b).......... N/A N/A N/A 210% 160% 297%
.........
- ---------------------------
* Commencement of Operations.
** Annualized.
+ During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
(a)Total return is based on the change in net asset value during the period and
assumes reinvestment of all dividends and distributions.
(b) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
<PAGE>
Blended Total
Core Equity Fund Return Fund
-------------------------------------------- ------------------------------------------
For the period For the
For the For the February 1, For the Year For the period
Year ended Year ended 1995* ended Year ended February 1,
November November to November November November 1995*
30, 1997 30, 1996 30, 1995 30, 1997 30, 1996 to Nov. 30,
1995
Net Asset Value, Beginning of Period $15.37 $12.97 $10.00 $12.76 $11.78 $10.00
------ ------ ------ ------ ------ ------
Income from Investment Operations:
Net investment income............ 0.35 0.14 0.13 0.50 0.34 0.27
Net realized and unrealized gains
on investment transactions..... 3.04 2.90 2.84 1.27 1.26 1.79
------- ---- ---- ------ ---- ----
Total income from Investment 3.39 3.04 2.97 1.77 1.60 2.06
------- ------
Operations.....................
Less Distributions from:
Net investment income............ (0.31) (0.19) 0.00 (0.50) (0.35) (0.28)
In excess of net investment income (0.24) 0.00 0.00 0.00 0.00 0.00
Realized gains................... (1.53) (0.45) 0.00 (0.52) (0.27) 0.00
------ ------ ---- ------ ------ ----
Net change in net asset value per 1.31 2.40 2.97 0.75 0.98 1.78
----- ---- ---- ---- ---- ----
share..........................
Net Asset Value, End of Period...... $16.68 $15.37 $12.97 $13.51 $12.76 $11.78
======= ====== ====== ====== ====== ======
Total Return(a)..................... 24.68% 24.61% 29.70% 14.69% 14.08% 20.72%
Ratios/Supplemental Data:
Net Assets, End of Period (in $15 $20 $16 $14 $17 $15
thousands).....................
Ratios to average net assets:
Expenses before 0.99% 0.99% 1.09%** 1.07% 1.09% 1.14%**
waivers/reimbursements+........
Expenses net waivers/reimbursements 0.89% 0.89% 0.89%** 0.97% 0.99% 1.04%**
Net investment income............ 0.74% 0.93% 1.30%** 2.91% 2.98% 3.04%**
Portfolio Turnover Rate(b).......... 44% 27% 37% 138% 77% 78%
Average Commission Rate(c).......... $0.0701 $0.0776 -- $0.0731 $0.0789 --
.........
* Commencement of Operations.
** Annualized.
+ During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
(a)Total return is based on the change in net asset value during the period and
assumes reinvestment of all dividends and distributions.
(b) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued. (c) Represents the dollar
amount of commissions paid on portfolio transactions divided by the total number
of portfolio shares purchased and sold for which commissions were charged and
is calculated on the basis of the Fund as a whole without distinguishing
between the classes of shares issued.
</TABLE>
<PAGE>
HIGHLIGHTS
Investment Objectives and Policies of the Funds
This Prospectus describes four funds, one money market fund and three
non-money market funds (collectively, the "Funds"), all of which are managed by
IBJS. Each Fund has a distinct investment objective and policies.
Money Market Fund:
Reserve Money Market Fund. The investment objectives of the 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 Money Market Fund may invest in obligations permitted to be
purchased under Rule 2a-7 of the Investment Company Act of 1940, as amended (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 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 Money Market Fund may also purchase
securities on a "when-issued" basis and purchase or sell securities on a
"forward commitment" basis.
The 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
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 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 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.
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. Except for
temporary defensive purposes, the Fund will not hold more than 20% of
its total assets in the form of cash or cash equivalents at any given
time. 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, 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
derivative hedging vehicles (futures and/or options on securities) when risks of
a substantial stock market correction have risen to levels where such action
appears warranted.
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.
<PAGE>
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.
FDISG, 4400 Computer Drive, Westborough, Massachusetts 01581-5120, acts
as administrator to the Funds pursuant to an Administration Agreement dated
March 1, 1998. For its services, FDISG receives a fee from the Funds based on
each Fund's average daily net assets. See "Management of the Funds" in this
Prospectus.
Guide to Investing in the IBJ Family of Funds
Purchase orders for the Money Market Fund received by 12:00 noon
Eastern Standard Time will become effective that day. Purchase orders for the
Non-Money Market Funds received by your IBJS representative in "good order"
prior to 4:00 p.m., Eastern Standard Time, and transmitted to the Distributor
prior to 4:00 p.m. Eastern Standard Time, will become effective that day.
Minimum Initial Investment.......................... $1,000
Minimum Initial Investment for IRAs................. $ 250
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.
Minimum initial exchange............................ $ 500
(minimum for subsequent exchanges)
Shareholders may redeem shares by telephone, mail or wire.
Shares may not be redeemed by facsimile.
If a redemption request is received by 12:00 noon Eastern
Standard Time, proceeds for the Money Market Fund will be
transferred to a designated account that day.
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.
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.
<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 the Trust, which is 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.
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.
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.
The investment objective of the Core Equity Fund is to provide
investors with long-term capital appreciation.
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. It
is the intention of the Funds, unless otherwise indicated, that with respect to
the Funds' policies that are a result of application of law, the Funds will take
advantage of the flexibility provided by rules or interpretations of the SEC
currently in existence or promulgated in the future, or changes to such laws.
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 U.S. 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 U.S. 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 U.S. Government or U.S. Treasury guarantees,
such as mortgage-backed certificates guaranteed by Ginnie
Mae ("GNMA") (formerly known as the Government National
Mortgage Association). 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 U.S. 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 U.S. 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 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.
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
or unrated commercial paper and rated or unrated 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
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). 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
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 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.
Below-Investment Grade; High Yield Securities (Blended Total Return
Fund). The Blended Total Return Fund is permitted to invest in below-investment
grade (high yield) securities with high yields and high risks. Fixed income
securities which are rated below "Baa3" by Moody's or "BBB-" by S&P, frequently
referred to as high yield securities, are considered to have speculative
characteristics and changes in economic conditions or other circumstances are
more likely to lead to a weakened capacity to make principal and interest
payments than in the case of higher-rated securities. Such securities are
subject to a substantial degree of credit risk.
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
U.S. Government agency or instrumentality.
Investments in Eurodollar and Yankee dollar obligations involve
additional risks. Most notably, there generally is less publicly available
information about foreign companies; there may be less governmental regulation
and supervision; they may use different accounting and financial standards; and
the adoption of foreign governmental restrictions may adversely affect the
payment of principal and interest on foreign investments. In addition, not all
foreign branches of United States banks are supervised or examined by regulatory
authorities as are United States banks, and such branches may not be subject to
reserve requirements.
Zero Coupon Securities (All Funds). The Funds may invest in zero coupon
securities. A zero coupon security pays no interest to its holder during its
life and is sold at a discount to its face value at maturity. The market prices
of zero coupon securities generally are more volatile than the market prices of
securities that pay interest periodically and are more sensitive to changes in
interest rates than non-zero coupon securities having similar maturities and
credit qualities. Although zero coupon securities do not pay interest to holders
prior to maturity, federal income tax law requires a Fund to recognize as
interest income a portion of the security's discount each year and that this
income must then be distributed to shareholders along with other income earned
by the Fund. To the extent that any shareholders in a Fund elect to receive
their dividends in cash rather than reinvest such dividends in additional
shares, cash to make these distributions will have to be provided from the
assets of the Fund or other sources such as proceeds of sales of Fund shares
and/or sales of portfolio securities. In such cases, the Fund will not be able
to purchase additional income producing securities with cash used to make such
distributions and its current income may ultimately be reduced as a result.
Variable rate demand obligations (All Funds). Variable rate demand
obligations have a maturity of 397 days or less with respect to the Money Market
Fund or 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 33 1/3% of each
such Fund's total assets (including the market value of the collateral received)
to brokers, dealers and financial institutions, provided certain conditions are
met, including the condition that each loan is secured continuously by
collateral maintained on a daily mark-to-market basis in an amount at least
equal to the current market value of the securities loaned. For further
information, see "Investment Policies" in the SAI.
Repurchase Agreements (All Funds). The Funds may enter into repurchase
agreements with any bank and broker-dealer which, in the opinion of the
Trustees, presents a minimum risk of bankruptcy. Under a repurchase agreement, a
Fund acquires securities and obtains a simultaneous commitment from the seller
to repurchase the securities at a specified time and at an agreed upon yield.
The agreements will be fully collateralized and the value of the collateral,
including accrued interest, marked-to-market daily. The agreements may be
considered to be loans made by the purchaser, collateralized by the underlying
securities. If the seller should default on its obligation to repurchase the
securities, a Fund may experience a loss of income from the loaned securities
and a decrease in the value of any collateral, problems in exercising its rights
to the underlying securities and costs and time delays in connection with the
disposition of securities. The Money Market Fund may not invest more than 10%
and each Non-Money Market Fund 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.
Illiquid Investments (All Funds). No Fund may invest more than 15% (10%
with respect to the 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 recognized domestic or foreign
securities exchange).
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. 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.
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
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%.
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. He has managed each Fund since inception.
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 Core Equity Fund and 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. He has managed the Core Equity Fund since
January 1, 1998 and Blended Total Return since November 1,
1997.
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 97.7% owned by
The Industrial Bank of Japan, Limited (and 2.3% 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, 1997, included accounts with aggregate assets
of approximately $2.5 billion. The principal business address
of IBJS is One State Street, New York, New York 10004. As of
June 24, 1985, The Industrial Bank of Japan, Limited acquired
its interest in J. Henry Schroder Bank & Trust Company from
Schroders Incorporated. The name of the bank was changed from
J. Henry Schroder Bank & Trust Company to IBJ Schroder Bank &
Trust Company, effective January 1, 1987. The Industrial Bank
of Japan does not perform services for the Trust or any of the
Funds.
Based upon the advice of counsel, IBJS believes that the performance of
investment advisory services for the Funds will not violate the Glass Steagall
Act or other applicable banking laws or regulations. However, future statutory
or regulatory changes, as well as future judicial or administrative decisions
and interpretations of present and future statutes and regulations, could
prevent IBJS from continuing to perform such services for the Funds. If IBJS
were prohibited from acting as investment adviser to the Funds, it is expected
that the Board of Trustees would recommend to shareholders approval of a new
investment advisory agreement with another qualified investment adviser selected
by the Board or that the Board would recommend other appropriate action.
The Distributor
FDDI, 4400 Computer Drive, Westborough, Massachusetts
01581-5120, is the Distributor of the Funds pursuant to a
Distribution Agreement dated March 1, 1998. FDDI is an
indirect wholly-owned subsidiary of First Data Corporation
("FDC"). Prior to March 1, 1998, IBJ Funds Distributor, Inc.
acted as sponsor and distributor of the Funds.
The Funds have adopted a Rule 12b-1 Distribution Plan and Agreement
(the "Plan") pursuant to which the Premium Class of each Fund may reimburse FDDI
on a monthly basis for costs and expenses of 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 FDDI, 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" shares. The "Service Class" is 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.
Premium Class distribution expenditures made by FDDI in any given year in excess
of the maximum amount payable under the Plan for that Fund year may be carried
over and paid to FDDI in the subsequent Plan year subject to the maximum limit
of 0.35% per annum. Administrative Services
As of March 1, 1998, the Funds have entered into an Administration
Agreement and a Transfer Agency and Services Agreement with FDISG. FDISG is a
wholly-owned subsidiary of FDC and is located at 4400 Computer Drive,
Westborough, Massachusetts 01581-5120. Pursuant to the Administration Agreement,
FDISG 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 auditors 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, FDISG receives a fee
from each Fund, computed daily and payable monthly, at the annual rate of 0.15%
of average daily net assets of each Fund up to $500 million; 0.10% of average
daily net assets of each Fund in excess of $500 million up to $1 billion; 0.075%
of average daily net assets of each Fund in excess of $1 billion. For fund
accounting services, FDISG receives a fee of $35,000 per Fund plus certain
out-of-pocket expenses. Pursuant to the Transfer Agency and Services Agreement
dated March 1, 1998, FDISG receives a fee of $20,000 per Fund plus certain
out-of-pocket expenses. Prior to March 1, 1998, BISYS Fund Services served as
administrator and transfer agent to the Funds. FDISG will perform substantially
identical services as its predecessor. Service Organizations
Various banks, trust companies, broker-dealers (other than FDDI and
FDISG) 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.
IBJS also may pay Service Organizations from time to time for rendering services
to shareholders.
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 FDDI, FDISG 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 Standard Time) for the Money Market Fund and at 4:00 p.m. (Eastern
Standard 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, Martin Luther King, Jr.'s Birthday,
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: 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 FDDI or FDISG 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.
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. FDISG 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 Standard Time), will become effective that day.
Orders for the Money Market Fund received in "good order" prior to 12:00 noon
Eastern Standard 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
their 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 1-800-99-IBJFD (1-800-994-2533) 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. Please call
1-800-99-IBJFD (1-800-994-2533) for wiring instructions. A completed application
must be sent by overnight delivery to the Fund in advance of the wire to IBJ
Funds Trust, P.O. Box 5183, Westborough, MA 01581-5183. Notification must be
given to the Fund 1-800-99-IBJFD (1-800-994-2533) prior to 12:00 p.m. Eastern
Standard Time of the wire date for the Money Market Fund and prior to 4:00 p.m.
Eastern Standard Time in the case of the Non-Money Market Funds.
By Mail. Payments to open new accounts should be sent to IBJ Funds
Trust, P.O. Box 5183, Westborough, MA 01581-5183, together with the completed
application. Fund purchases made by check 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 Funds by telephone at 1-800-99-IBJFD (1-800-994-2533).
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, FDDI, FDISG, 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 IRA information, call the Funds at
1-800-99-IBJFD (1-800-994-2533).
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 1583, Westborough, MA 01581-5183, or
by calling 1-800-99-IBJFD (1-800-994-2533). 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. A letter of instruction should be sent by mail to IBJ
Funds Trust at P.O. Box 1583, Westborough, MA 01581-5183. 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. No signature guarantee is required. Newly purchased shares
must remain in the account for 10 days.
Exchange by Telephone. To exchange Fund shares by telephone, or if you
have any questions simply call the Funds at 1-800-99-IBJFD (1-800-994-2533). 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 may be delayed 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. Requests should be addressed to IBJ Funds Trust, P.O. Box
5183, Westborough, MA 01581-5183. To protect shareholder accounts, the Funds,
and the transfer agent from fraud, a signature guarantee will required when
redemption proceeds are to be sent to an address other than the registered
address, or if the redemption is greater than $50,000. 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" in this Prospectus).
Corporations, partnerships, trusts or other legal entities will be required to
submit additional documentation.
By Check. You may redeem your 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, FDISG 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 at
1-800-99-IBJFD (1-800-994-2533). 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 dollar or share 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 redemptions and telephone exchanges will be suspended for a
period of 10 days following an address change made by phone.
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 Standard 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 dollar or share 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.
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 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 or
her 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
or her Fund shares. Distributions in excess of a shareholder's cost basis in his
or her 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 Fund and the Blended Total Return Fund 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 or
her pro rata share of the foreign taxes in computing his or her 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 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 Money Market Fund is subject to further diversification requirements with
respect to 100% of its assets. Also, each Fund will invest less than 25% of its
total assets in the securities of any one industry, excluding the 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 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 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 Money Market Fund invests.
The price per share of each of the other Funds will fluctuate with
changes in value of the investments held by the Fund. For example, the value of
a bond fund's shares will generally fluctuate inversely with the movements in
interest rates and a stock fund's shares will generally fluctuate as a result of
numerous factors, including, but not limited to, investors' expectations about
the economy and corporate earnings and interest rates. Shareholders of a Fund
should expect the value of their shares to fluctuate with changes in the value
of the securities owned by that Fund. Additionally, a Fund's investment in
smaller companies may involve greater risks than investments in large companies
due to such factors as limited product lines, markets and financial or
managerial resources, and less frequently traded securities that may be subject
to more abrupt price movements than securities of larger companies.
There is, of course, no assurance that a Fund will achieve its
investment objective or be successful in preventing or minimizing the risk of
loss that is inherent in investing in particular types of investment products.
In order to attempt to minimize that risk, the Adviser monitors developments in
the economy, the securities markets, and with each particular issuer. Also, as
noted earlier, each diversified Fund is managed within certain limitations that
restrict the amount of a Fund's investment in any single issuer.
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 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.
Below-Investment Grade; High Yield Securities (Blended Total Return
Fund) Below-investment grade (high yield) bonds may be issued as a consequence
of corporate restructurings, such as leveraged buy-outs, mergers, acquisitions,
debt recapitalizations or similar events. Also, these bonds are often issued by
smaller, less creditworthy companies or by highly leveraged firms which are
generally less able than more financially stable firms to make scheduled
payments of interest and principal. The risks posed by bonds issued under such
circumstances are substantial. Also, during an economic downturn or substantial
period of rising interest rates, highly leveraged issuers my experience
financial stress which would adversely affect their ability to service principal
and interest payment obligations, to meet projected business goals and to obtain
additional financing. Changes by recognized rating agencies in the rating of any
security and in the ability of an issuer to make payments of interest and
principal will also ordinarily have a more dramatic affect on the values of
these investments than on the values of high-rated securities. Such changes in
value will not affect cash income derived from these securities, unless the
issuers fail to pay interest or dividends when due. Such changes will, however,
adversely affect a Fund's net asset value per share.
Year 2000 Risks. Like other mutual funds, financial and business
organizations and individuals around the world, a Fund could be adversely
affected if the computer systems used by IBJS and other service providers do not
properly process and calculate date-related information, certain dates, and in
particular, dates including the digit "9" and dates from and after January 1,
2000. This is commonly known as the "Year 2000 Problem." IBJS and FDISG are
taking steps that they each believe are reasonably designed to address the Year
2000 Problem with respect to the computer systems that each uses and to obtain
assurances that comparable steps are being taken by each of the Funds' other
major service providers. However, there can be no assurance that these steps
will be sufficient to avoid any adverse impact on the Funds.
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, FDDI, FDISG, 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 Trust
Instrument 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 Trust Instrument 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 Trust
Instrument, 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 fee 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 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 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 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 a Fund's investment
objectives and policies, characteristics and quality of the Fund 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.
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 a 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.
The Trust compensates FDISG, the Trust's transfer agent, pursuant to
the Transfer Agency and Services Agreement described on page 18 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 5183, Westborough, Massachusetts 01581-5183.
General and Account Information: 1-800-99-IBJFD (1-800-994-2533).
<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 be below-investment grade and 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-below-investment grade (high yield),
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.
<PAGE>
IBJ FUNDS IBJ FUNDS TRUST
Address for A FAMILY OF
Trust Clients of IBJS MUTUAL FUNDS
IBJ Schroder Bank & Trust Company The Reserve Money
Market Fund seeks to provide One State Street investors with
current income, liquidity and the New York, New York 10004
maintenance of a stable $1.00 net asset value by investing
in high quality, short-term obligations.
Investment Adviser The Core Fixed Income Fund seeks
to provide investors IBJ Schroder Bank & Trust Company with
a high level of total return by investing in fixed One State
Street debt market securities managed for total return. New
York, New York 10004 The Core Equity Fund seeks to
provide investors with long-term capital appreciation.
Administrator The Blended Total Return Fund seeks to
provide First Data Investor Services Group, Inc. investors
with long-term capital appreciation and 4400 Computer Drive
current income for a high total return by investing in
Westborough, Massachusetts 01581-5120 a balance of equities
and debt market securities.
PREMIUM CLASS PROSPECTUS
Distributor
First Data Distributors, Inc. March 30, 1998
4400 Computer Drive
Westborough, Massachusetts 01581-5120
Custodian Investment Adviser
IBJ SCHRODER BANK
IBJ Schroder Bank & Trust Company & TRUST COMPANY
One State Street
New York, New York 10004
Counsel
Baker & McKenzie
805 Third Avenue
New York, New York 10022
Independent Auditors
Ernst & Young LLP
787 7th Avenue
New York, New York 10019
IBJ FUNDS TRUST
4400 Computer Drive
Westborough, Massachusetts 01581-5120
General and Account Information: 1-800-99-IBJFD
(1-800-994-2533)
- ----------------------------------------------------------------------
IBJ Schroder Bank & Trust Company--Investment Adviser
("IBJS")
First Data Investor Services Group, Inc.--Administrator ("FDISG")
First Data Distributors, Inc.--Distributor ("FDDI")
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information (the "SAI") describes one
money market fund (the "Money Market Fund") and three non-money market funds
(the "Non-Money Market Funds") (collectively, the "Funds"), all of which are
managed by IBJS. The Funds are:
MONEY MARKET FUND
Reserve Money Market Fund
NON-MONEY MARKET FUNDS
Core Fixed Income Fund
Core Equity Fund
Blended Total Return Fund
Each Fund constitutes a separate investment portfolio with distinct
investment objectives and policies. Shares of the Funds are sold to the public
by FDDI 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
30, 1998 (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 30, 1998
<PAGE>
TABLE OF CONTENTS
INVESTMENT POLICIES................................................. 1
INVESTMENT RESTRICTIONS............................................. 8
MANAGEMENT.......................................................... 9
EXPENSES............................................................. 13
DETERMINATION OF NET ASSET VALUE..................................... 13
PORTFOLIO TRANSACTIONS............................................... 14
PORTFOLIO TURNOVER.................................................... 15
TAXATION............................................................. 16
OTHER INFORMATION...................................................... 20
FINANCIAL STATEMENTS.................................................... 24
<PAGE>
112
2/97
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 Ginnie Mae
("GNMA") (formerly known as 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., GNMA). Guarantees of principal by agencies or
instrumentalities of the U.S. Government may be a guarantee of payment at the
maturity of the obligation so that in the event of a default prior to maturity
there might not be a market and thus no means of realizing the value of the
obligation prior to maturity.
COMMERCIAL PAPER. (All Funds). Commercial paper includes short-term
unsecured promissory notes, variable rate demand notes and variable rate master
demand notes issued by domestic and foreign bank holding companies, corporations
and financial institutions and similar taxable instruments issued by government
agencies and instrumentalities. All commercial paper purchased by the Funds are,
at the time of investment, rated in one of the top two rating categories of at
least one Nationally Recognized Statistical Rating Organization ("NRSRO") or, if
not rated, are, in the opinion of the Adviser, of an investment quality
comparable to rated commercial paper in which the Funds may invest, or, with
respect to the Reserve Money Market Fund, (i) rated "P-1" by Moody's Investors
Service, Inc. ("Moody's") and "A-1" or better by Standard & Poor's Corporation
("S&P") or in a comparable rating category by any two NRSROs that have rated the
commercial paper or (ii) rated in a comparable category by only one such
organization if it is the only organization that has rated the commercial paper
(and provided the purchase is approved or ratified by the Board of Trustees).
CORPORATE DEBT SECURITIES. (All Funds). Fund
investments in these securities are limited to corporate
debt securities (corporate bonds, debentures, notes and
similar corporate debt instruments) which meet the rating
criteria established for each Fund.
After purchase by a Fund, a security may cease to be rated or its
rating may be reduced below the minimum required for purchase by the Fund.
Neither event will require a sale of such security by the Fund. However, the
Fund's Adviser will consider such event in its determination of whether the Fund
should continue to hold the security. To the extent the ratings given by a NRSRO
may change as a result of changes in such organizations or their rating systems,
the Fund will attempt to use comparable ratings as standards for investments in
accordance with the investment policies contained in the Prospectus and in this
SAI.
The Fund may invest in Convertible Debt rated in categories regarded as
having predominantly speculative characteristics with respect to capacity to pay
interest and repay principal. While such debt will likely have some quality and
protective characteristics, these are outweighed by large uncertainties or major
risk exposures to adverse conditions.
BANK OBLIGATIONS. (All Funds). A description of the bank obligations
which the Funds may purchase is set forth in the Prospectuses. These obligations
include, but are not limited to, domestic, Eurodollar and Yankeedollar
certificates of deposits, time deposits, bankers' acceptances, commercial paper,
bank deposit notes and other promissory notes including floating or variable
rate obligations issued by U.S. or foreign bank holding 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 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
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 33
1/3% of the total assets (including the market value of the collateral received)
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 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 calendar 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.
A large institutional market exists for certain securities that are not
registered under the Securities Act, including repurchase agreements, commercial
paper, foreign securities, municipal securities and corporate bonds and notes.
Institutional investors depend on either an efficient institutional market in
which the unregistered security can be readily resold or on the issuer's ability
to honor a demand for repayment. The fact that there are contractual or legal
restrictions on resale to the general public or to certain institutions may not
be indicative of the liquidity of such investments.
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.
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. Rule 144A securities and Section 4(2) instruments 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
and Section 4(2) instruments 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 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 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 liquid 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 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 Securities and Exchange Commission (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 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.
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."
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 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 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 securities 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);
(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;
(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, 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 or, for the Money Market Fund,
securities issued by domestic banks; (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 Non-Money Market Funds may purchase or sell puts
and calls as otherwise described in the Prospectus or SAI;
however, no Fund will invest more than 5% of its total assets in
these classes of securities for purposes other than bona fide
hedging; or
(15) Invest more than 5% of the current value of its total assets in
the securities of companies which, including predecessors, have a
record of less than three years' continuous operation.
MANAGEMENT
TRUSTEES AND OFFICERS
The principal occupations of the Trustees and executive officers of the
Trust for the past five years as well as ages are listed below. The address of
each, unless otherwise indicated, is 4400 Computer Drive, Westborough,
Massachusetts 01581-5120. 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: 67 STEPHEN V.R. GOODHUE,
Trustee (Retired); formerly, Senior Vice President Manufacturer's Hanover Trust
Company; 237 Mount Holly Road, Katonah, New York 10536; Age: 69 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: 76 GEORGE H. STEWART, Trustee and
Chairman; (Retired); formerly, Vice President and Treasurer, Ciba-Geigy
Corporation; 4425 SE Waterford Drive, Stuart, Florida 34997; Age: 66
JYLANNE M. DUNNE, President; Vice President and General Manager of Distribution
Services at FDISG since 1992; Age: 38 STEVEN L. LEVY, Treasurer; Vice
President of Fund Accounting and Administration at FDISG since 1997; Age: 33
WILLIAM J. GREILICH, Vice President; Vice President and Division
Manager of Client Services at FDISG since 1990; Age: 44 BRIGID O.
BIEBER, Secretary; Counsel of FDISG (5/94-Present); Vice President and Associate
General Counsel, The Boston Company Advisors, Inc. (5/87-5/94); Age: 37
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.
<TABLE>
<CAPTION>
COMPENSATION TABLE*
<S> <C> <C> <C> <C>
Pension or Total
Retirement Compensation
Aggregate Benefits Annual From the
Compensation Accrued as Benefits Upon Retirement Fund
NAME OF PERSON, POSITION from the Trust Part of Trust Expenses Complex
-------------- ------------- ------------ -------
Robert H. Dunker, Trustee $ 8,000 0 N/A $ 8,000
Stephen V.R. Goodhue, Trustee 8,000 0 N/A 8,000
Edward F. Ryan, Trustee 8,000 0 N/A 8,000
George Stewart, Trustee 10,500 0 N/A 10,500
* Represents the total compensation paid to such persons for the fiscal year ended November 30, 1997.
As of March 1, 1998, Officers and Trustees of the Trust, as a group, own less than 1% of the outstanding
shares of the Funds.
</R
</TABLE>
INVESTMENT ADVISER
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. 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, 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
voluntarily waived investment advisory fees of $106,107, $26,400, $88,874 and
$56,745, respectively. For the fiscal year ended November 30, 1997, IBJS earned
investment advisory fees of $101,221, $141,947, $588,328 and $381,947 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 $101,221, $28,390, $98,055 and $63,658,
respectively.
The Adviser voluntarily agreed to cap the expense ratio of the Reserve
Money Market Fund at 0.64% for the first year of the Fund's operations. 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 97.7% owned by The Industrial Bank of
Japan, Limited (and 2.3% 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,
1997, included accounts with aggregate assets of approximately $2.5 billion. The
principal business address of IBJS is One State Street, New York, New York
10004.
The Advisory Agreement 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 Advisory Agreement or
"interested persons" (as defined in the 1940 Act) of any such party. The
Advisory Agreement 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 Advisory Agreement and will terminate automatically if assigned.
The Advisory Agreement was last approved by the Board of Trustees, including a
majority of Trustees who are not "interested persons," on September 18, 1997.
DISTRIBUTION OF FUND SHARES
The Trust retains FDDI to serve as principal underwriter for the shares
of the Funds pursuant to a Distribution Agreement dated March 1, 1998. The
Distribution Agreement provides that FDDI will use its best efforts to maintain
a broad distribution of the Funds' shares among bona fide investors and may
enter into selling group agreements with responsible dealers and dealer managers
as well as sell the Funds' shares to individual investors. FDDI is not obligated
to sell any specific amount of shares.
Prior to March 1, 1998, IBJ Funds Distributor, Inc. served as
principal underwriter for the Funds.
DISTRIBUTION PLAN
The Trustees of the Fund have voted to adopt a Master Distribution Plan
(the "Plan") pursuant to Rule l2b-1 of 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 FDDI
in such amounts that FDDI 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").
FDDI 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. FDDI 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 FDDI 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 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 is 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, by vote cast in person
at a meeting called for the purpose of voting on the Plan. The Board of Trustees
of the Trust approved the Plan at a meeting held on December 18, 1997. 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 years ended November 30, 1996 and 1997.
ADMINISTRATION SERVICES
Under an Administration Agreement dated March 1, 1998 (the
"Administration Agreement") between the Trust and FDISG, FDISG 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 SEC
and state securities commissions and (iii) general supervision of the operation
of the Funds, including coordination of the services performed by IBJS, FDDI,
transfer agent, custodians, independent accountants, legal counsel and others.
In addition, FDISG 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 FDISG. For these services, FDISG receives
a fee from each Fund computed daily and payable monthly, at the annual rate of:
0.15% of average daily net assets of each Fund up to $500 million; 0.10% of
average daily net assets of each Fund in excess of $500 million up to $1
billion; 0.075% of average daily net assets of each Fund in excess of $1
billion. Pursuant to the Administration Agreement between the Trust and FDISG,
FDISG assists the Trust in calculating net asset values and provides certain
other accounting services for each Fund described therein, for an annual fee of
$35,000 per Fund plus out of pocket expenses.
The Administration Agreement was approved by the Board of Trustees at a
meeting held on December 18, 1997 and shall remain in effect for a period of
five years from its effective date. Thereafter, the Administration Agreement
will continue subject to termination without penalty upon sixty days prior
notice.
Prior to March 1, 1998, BISYS Fund Services acted as the Fund's
administrator. For these services, BISYS Fund Services received 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. For the fiscal
year ended November 30, 1997, BISYS Fund Services earned Administrative Services
fees of $43,380, $42,584, $147,082 and $95,487 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. assisted 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.
For the fiscal year ended November 30, 1997, BISYS Fund Services earned Fund
Accounting fees of $35,000, $29,999, $30,000 and $35,000 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. assisted the Trust with
certain transfer and dividend disbursing agent functions and received a fee of
$15 per account per year per fund plus out of pocket expenses.
<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 FDISG nor FDDI will be a Service Organization or receive fees
for servicing. No Service Organization fees have been paid.
The Glass-Steagall Act and other applicable laws, among other things,
prohibit banks from engaging in the business of underwriting, selling or
distributing securities. There currently is no precedent prohibiting banks from
performing administrative and shareholder servicing functions as Service
Organizations. However, judicial or administrative decisions or interpretations
of such laws, as well as changes in either Federal or state statutes or
regulations relating to the permissible activities of banks and their
subsidiaries or affiliates, could prevent a bank from continuing to perform all
or a part of its servicing activities. In addition, state securities laws on
this issue may differ from the interpretations of federal law expressed herein
and banks and financial institutions may be required to register as dealers
pursuant to state law.
If a bank were prohibited from so acting, its shareholder clients would
be permitted to remain shareholders of the Trust and alternative means for
continuing the servicing of such shareholders would be sought. In that event,
changes in the operation of the Trust might occur and a shareholder serviced by
such a bank might no longer be able to avail itself of any services then being
provided by the bank. It is not expected that shareholders would suffer any
adverse financial consequences as a result of any of these occurrences.
EXPENSES
Except for the expenses paid by IBJS, FDDI and FDISG, the Funds bear
all costs of their operations.
DETERMINATION OF NET ASSET VALUE
As indicated under "Fund Share Valuation" in the applicable Prospectus,
the Money Market Fund uses the amortized cost method to determine the value of
their portfolio securities pursuant to Rule 2a-7 under the 1940 Act. The
amortized cost method involves valuing a security at its cost and amortizing any
discount or premium over the period until maturity regardless of the impact of
fluctuating interest rates on the market value of the security. While this
method provides certainty in valuation, it may result in periods during which
the value, as determined by amortized cost, is higher or lower than the price
which the Funds would receive if the security were sold. During these periods,
the yield to a shareholder may differ somewhat from that which could be obtained
from a similar fund which utilizes a method of valuation based upon market
prices. Thus, during periods of declining interest rates, if the use of the
amortized cost method resulted in lower value of a Fund's portfolio on a
particular day, a prospective investor in the Fund would be able to obtain a
somewhat higher yield than would result from an investment in a fund utilizing
solely market values and existing Fund shareholders would receive
correspondingly less income. The converse would apply during periods of rising
interest rates.
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 or IBJS 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 may result in material dilution or
other unfair results to investors or existing shareholders, the Board of
Trustees will take such corrective action as it regards as necessary and
appropriate, which may include selling portfolio instruments prior to maturity
to realize capital gains or losses or to shorten average portfolio maturity,
withholding dividends or establishing a net asset value per share by using
available market quotations.
The Non-Money Market Funds value their portfolio securities in
accordance with the procedures described in the Prospectus.
PORTFOLIO TRANSACTIONS
Investment decisions for the Funds and for the other investment
advisory clients of IBJS are made with a view to achieving their respective
investment objectives. Investment decisions are the product of many factors in
addition to basic suitability for the particular client involved. Thus, a
particular security may be bought or sold for certain clients even though it
could have been bought or sold for other clients at the same time. Likewise, a
particular security may be bought for one or more clients when one or more
clients are selling the security. In some instances, one client may sell a
particular security to another client. It also sometimes happens that two or
more clients simultaneously purchase or sell the same security, in which event
each day's transactions in such security are, insofar as possible, averaged as
to price and allocated between such clients in a manner which in the opinion of
IBJS is equitable to each and in accordance with the amount being purchased or
sold by each. There may be circumstances when purchases or sales of portfolio
securities for one or more clients will have an adverse effect on other clients.
The Funds have no obligation to deal with any dealer or group of
dealers in the execution of transactions in portfolio securities. Subject to
policies established by the Trust's Board of Trustees, IBJS is primarily
responsible for portfolio decisions and the placing of portfolio transactions.
In placing orders, it is the policy of the Funds to obtain the best results
taking into account the broker-dealer's general execution and operational
facilities, the type of transaction involved and other factors such as the
dealer's risk in positioning the securities. While generally seek reasonably
competitive spreads or commissions, the Funds will not necessarily be paying the
lowest spread or commission available.
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 FDISG are prohibited
from dealing with the Funds as a principal in the purchase and sale of
securities unless a permissive order allowing such transactions is obtained from
the SEC.
IBJS may, in circumstances in which two or more broker-dealers are in a
position to offer comparable results, give preference to a dealer which has
provided statistical or other research services to IBJS. By allocating
transactions in this manner, IBJS is able to supplement its research and
analysis with the views and information of securities firms. These items, which
in some cases may also be purchased for cash, include such matters as general
economic and securities market reviews, industry and company reviews,
evaluations of securities and recommendations as to the purchase and sale of
securities.
Some of these services are of value to IBJS in advising various of
their clients (including the Funds), although not all of these services are
necessarily useful and of value in managing the Funds. The management fee paid
by the Funds is not reduced because IBJS or its affiliates receive such
services.
As permitted by Section 28(e) of the Securities Exchange Act of 1934
(the "Act"), IBJS may cause the Funds to pay a broker-dealer which provides
"brokerage and research services" (as defined in the Act) to IBJS an amount of
disclosed commission for effecting a securities transaction for the Funds in
excess of the commission which another broker-dealer would have charged for
effecting that transaction.
Consistent with the Rules of Fair Practice of the National Association
of Securities Dealers, Inc. and subject to seeking the most favorable price and
execution available and such other policies as the Trustees may determine, IBJS
may consider sales of shares of the Funds as a factor in the selection of
broker-dealers to execute portfolio transactions for the Funds.
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. For the fiscal year ended November
30, 1997, $0, $0, $137,378 and $129,698 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.
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%, 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. 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, 1997 were 210%, 44%, and
138%, 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, 1997. 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; and (c) diversify
its holdings so that, at the end of each quarter of the taxable year, (i) at
least 50% of the market value of the Fund's assets is represented by cash and
cash items (including receivables), U.S. Government securities, the securities
of other regulated investment companies and other securities, with such other
securities of any one issuer limited for the purposes of this calculation to an
amount not greater than 5% of the value of the Fund's total assets and not
greater than 10% of the outstanding voting securities of such issuer, and (ii)
not more than 25% of the value of its total assets is invested in the securities
of any one issuer (other than U.S. Government securities or the securities of
other regulated investment companies). In addition, a Fund earning tax-exempt
interest must, in each year, distribute at least 90% of its net tax-exempt
income. By meeting these requirements, the Funds generally will not be subject
to Federal income tax on their investment company taxable income and net capital
gains which are distributed to shareholders. If the Funds do not meet all of
these Code requirements, they will be taxed as ordinary corporations and their
distributions will be taxed to shareholders as ordinary income.
Amounts, other than tax-exempt interest, not distributed on a timely
basis in accordance with a calendar year distribution requirement are subject to
a nondeductible 4% excise tax. To prevent imposition of the excise tax, each
Fund must distribute for each calendar year an amount equal to the sum of (1) at
least 98% of its ordinary income (excluding any capital gains or losses) for the
calendar year, (2) at least 98% of the excess of its capital gains over capital
losses (adjusted for certain ordinary losses) for the one-year period ending
October 31 of such year, and (3) all ordinary income and capital gains net
income (adjusted for certain ordinary losses) for previous years that were not
distributed during such years. A distribution, including an "exempt-interest
dividend," will be treated as paid on December 31 of a calendar year if it is
declared by a Fund during October, November or December of that year to
shareholders of record on a date in such a month and paid by the Fund during
January of the following year. Such distributions will be taxable to
shareholders in the calendar year in which the distributions are declared,
rather than the calendar year in which the distributions are received.
Some Funds may invest in stocks of foreign companies that are
classified under the Code as passive foreign investment companies ("PFICs"). In
general, a foreign company is classified as a PFIC under the Code if at least
one-half of its assets constitutes investment-type assets or 75% or more of its
gross income is investment-type income. Under the PFIC rules, an "excess
distribution" received with respect to PFIC stock is treated as having been
realized ratably over the period during which the Fund held the PFIC stock. A
Fund itself will be subject to tax on the portion, if any, of the excess
distribution that is allocated to the Fund's holding period in prior taxable
years (and an interest factor will be added to the tax, as if the tax actually
been payable in such prior taxable years) even though the Fund distributes the
corresponding income to shareholders. Excess distributions include any gain from
the sale of PFIC stock as well as certain distributions from a PFIC.
All excess distributions are taxable as ordinary income.
A Fund may be able to elect alternative tax treatment with respect to
PFIC stock. Under an election that currently may be available, a Fund generally
would be required to include in its gross income its share of the earnings of a
PFIC on a current basis, regardless of whether any distributions are received
from the PFIC. If this election is made, the special rules, discussed above,
relating to the taxation of excess distributions, would not apply. In addition,
other elections may become available that would affect the tax treatment of PFIC
stock held by a Fund. Each Fund's intention to qualify annually as a regulated
investment company may limit its elections with respect to PFIC stock.
Because the application of the PFIC rules may affect, among other
things, the character of gains, the amount of gain or loss and the timing of the
recognition of income with respect to PFIC stock, as well as subject a Fund
itself to tax on certain income from PFIC stock, the amount that must be
distributed to shareholders, and which will be taxed to shareholders as ordinary
income or long-term capital gain, may be increased or decreased substantially as
compared to a fund that did not invest in PFIC stock.
Distributions of investment company taxable income generally are
taxable to shareholders as ordinary income. Distributions from certain of the
Funds may be eligible for the dividends-received deduction available to
corporations. Distributions of net long-term capital gains, if any, designated
by the Funds as long term capital gain dividends are taxable to shareholders as
long-term capital gain, regardless of the length of time the Funds' shares have
been held by a shareholder. All distributions are taxable to the shareholder in
the same manner whether reinvested in additional shares or received in cash.
Shareholders will be notified annually as to the Federal tax status of
distributions.
Distributions by a Fund reduce the net asset value of the Fund's
shares. Should a distribution reduce the net asset value below a shareholder's
cost basis, such distribution, nevertheless, would be taxable to the shareholder
as ordinary income or capital gain as described above, even though, from an
investment standpoint, it may constitute a partial return of capital. In
particular, investors should be careful to consider the tax implications of
buying shares just prior to a distribution by the Funds. The price of shares
purchased at that time includes the amount of the forthcoming distribution.
Those purchasing just prior to a distribution will receive a distribution which
will nevertheless generally be taxable to them.
Upon the taxable disposition (including a sale or redemption) of shares
of a Fund, a shareholder may realize a gain or loss depending upon his basis in
his shares. Such gain or loss generally will be treated as capital gain or loss
if the shares are capital assets in the shareholders hands. Such gain or loss
will be long-term or short-term, generally depending upon the shareholder's
holding period for the shares. However, a loss realized by a shareholder on the
disposition of Fund shares with respect to which capital gain dividends have
been paid will, to the extent of such capital gain dividends, be treated as 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 are acquired without a sales charge or at a reduced sales charge. In that
case, the gain or loss recognized on the exchange will be determined by
excluding from the tax basis of the shares exchanged all or a portion of the
sales charge incurred in acquiring those shares. This exclusion applies to the
extent that the otherwise applicable sales charge with respect to the newly
acquired shares is reduced as a result of having incurred the sales charge
initially. Instead, the portion of the sales charge affected by this rule will
be treated as a sales charge paid for the new shares.
The taxation of equity options is governed by Code section 1234.
Pursuant to Code section 1234, the premium received by a Fund for selling a put
or call option is not included in income at the time of receipt. If the option
expires, the premium is short-term capital gain to the Fund. If the Fund enters
into a closing transaction, the difference between the amount paid to close out
its position and the premium received is short-term capital gain or loss. If a
call option written by a Fund is exercised, thereby requiring the Fund to sell
the underlying security, the premium will increase the amount realized upon the
sale of such security and any resulting gain or loss will be a capital gain or
loss, and will be long-term or short-term depending upon the holding period of
the security. With respect to a put or call option that is purchased by a Fund,
if the option is sold, any resulting gain or loss will be a capital gain or
loss, and will be long-term or short-term, depending upon the holding period of
the option. If the option expires, the resulting loss is a capital loss and is
long-term or short-term, depending upon the holding period of the option. If the
option is exercised, the cost of the option, in the case of a call Option, is
added to the basis of the purchased security and, in the case of a put option,
reduces the amount realized on the underlying security in determining gain or
loss.
Certain of the options, futures contracts, and forward foreign currency
exchange contracts that several of the Funds may invest in are so-called
"section 1256 contracts." With certain exceptions, gains or losses on section
1256 contracts generally are considered 60% long-term and 40% short-term capital
gains or losses ("60/40"). Also, section 1256 contracts held by a Fund at the
end of each taxable year (and, generally, for purposes of the 4% excise tax, on
October 31 of each year) are "marked-to-market" with the result that unrealized
gains or losses are treated as though they were realized and the resulting gain
or loss is treated as 60/40 gain or loss.
Generally, the hedging transactions undertaken by a Fund may result in
"straddles" for Federal income tax purposes. The straddle rules may affect the
character of gains (or losses) realized by a Fund. In addition, losses realized
by a Fund on a position that are part of a straddle may be deferred under the
straddle rules, rather than being taken into account in calculating the taxable
income for the taxable year in which such losses are realized. Because only a
few regulations implementing the straddle rules have been promulgated, the tax
consequences to a Fund of hedging transactions are not entirely clear. Hedging
transactions may increase the amount of short-term capital gain realized by a
Fund which is taxed as ordinary income when distributed to stockholders.
A Fund may make one or more of the elections available under the Code
which are applicable to straddles. If a Fund makes any of the elections, the
amount, character and timing of the recognition of gains or losses from the
affected straddle positions will be determined under rules that vary according
to the election(s) made. The rules applicable under certain of the elections may
operate to accelerate the recognition of gains or losses from the affected
straddle positions.
Because application of the straddle rules may affect the character of
gains or losses, defer losses and/or accelerate the recognition of gains or
losses from the affected straddle positions, the amount which must be
distributed to shareholders, and which will be taxed to shareholders as ordinary
income or long-term capital gain, may be increased or decreased substantially as
compared to a fund that did not engage in such hedging transactions.
Certain requirements that must be met under the Code in order for a
Fund to qualify as a regulated investment company may limit the extent to which
a Fund will be able to engage in transactions in options, futures, and forward
contracts.
Under the Code, gains or losses attributable to fluctuations in
exchange rates which occur between the time a Fund accrues interest, dividends
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 the 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 preceding paragraph, the source of the Fund's income flows through to its
shareholders. With respect to a Fund, gains from the sale of securities will be
treated as derived from U.S. sources and certain currency fluctuations gains,
including fluctuation gains from foreign currency-denominated debt securities,
receivables and payables, will be treated as ordinary income derived from U.S.
sources. The limitation on the foreign tax credit is applied separately to
foreign source passive income has defined for purposes of the foreign tax
credit) including foreign source passive income of a Fund. The foreign tax
credit may offset only 90% of the alternative minimum tax imposed on
corporations and individuals, and foreign taxes generally may not be deducted in
computing alternative minimum taxable income.
The Funds are required to report to the Internal Revenue Service
("IRS") all distributions except in the case of certain exempt shareholders. All
such distributions generally are subject to withholding of Federal income tax at
a rate of 31% ("backup withholding") in the case of non-exempt shareholders if
(1) the shareholder fails to furnish the Funds with and to certify the
shareholder's correct taxpayer identification number or social security number,
(2) the IRS notifies the Funds or a shareholder that the shareholder has failed
to report properly certain interest and dividend income to the IRS and to
respond to notices to that effect, or (3) when required to do so, the
shareholder fails to certify that he is not subject to backup withholding. If
the withholding provisions are applicable, any such distributions, whether
reinvested in additional shares or taken in cash, will be reduced by the amounts
required to be withheld. Backup withholding is not an additional tax. Any amount
withheld may be credited against the shareholders U.S. Federal income tax
liability. Investors may wish to consult their tax advisors about the
applicability of the backup withholding provisions.
The foregoing discussion relates only to Federal income tax law as
applicable to U.S. persons (i.e., U.S. citizens and residents and U.S.
corporations, partnerships, trusts and estates). Distributions by the Funds also
may be subject to state and local taxes and their treatment under state and
local income tax laws may differ from the Federal income tax treatment.
Distributions of a Fund which are derived from interest on obligations of the
U.S. Government and certain of its agencies and instrumentalities may be exempt
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).
<PAGE>
OTHER INFORMATION
CAPITALIZATION
The Trust is a Delaware business trust established under a Declaration
of Trust dated August 25, 1994 and currently consists of four separately managed
portfolios. Each portfolio is comprised of two classes of shares -- the "Service
Class" and the "Premium Class." The capitalization of the Trust consists solely
of an unlimited number of shares of beneficial interest with a par value of
$0.001 each. The Board of Trustees may establish additional Funds (with
different investment objectives and fundamental policies) at any time in the
future. Establishment and offering of additional Funds will not alter the rights
of the Trust's shareholders. When issued, shares are fully paid, non-assessable,
redeemable and freely transferable. Shares do not have preemptive rights or
subscription rights. In any liquidation of a Fund, each shareholder is entitled
to receive his pro rata share of the net assets of that Fund.
Expenses incurred in connection with each Fund's organization and the
public offering of its shares are being amortized on a straight-line basis over
a period of not more than five years.
VOTING RIGHTS
Under the Declaration of Trust, the Trust is not required to hold
annual meetings of each Fund's shareholders to elect Trustees or for other
purposes. When certain matters affect only one class of shares but not another,
the shareholders would vote as a class regarding such matters. It is not
anticipated that the Trust will hold shareholders' meetings unless required by
law or the Declaration of Trust. In this regard, the Trust will be required to
hold a meeting to elect Trustees to fill any existing vacancies on the Board if,
at any time, fewer than a majority of the Trustees have been elected by the
shareholders of the Trust. In addition, the Declaration of Trust provides that
the holders of not less than two-thirds of the outstanding shares of the Trust
may remove persons serving as Trustee either by declaration in writing or at a
meeting called for such purpose. The Trustees are required to call a meeting for
the purpose of considering the removal of persons serving as Trustee if
requested in writing to do so by the holders of not less than 10% of the
outstanding shares of the Trust. To the extent required by applicable law, the
Trustees shall assist shareholders who seek to remove any person serving as
Trustee.
The Trust's shares do not have cumulative voting rights, so that the
holders of more than 50% of the outstanding shares may elect the entire Board of
Trustees, in which case the holders of the remaining shares would not be able to
elect any Trustees.
PRINCIPAL SHAREHOLDERS
As of March 1, 1998, 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
One State Street, 7th Floor 94.46%
New York, NY 10004-1505
<PAGE>
Reserve Money Market Fund
Premium Class Shares
-----------------
BISYS Fund Services, Inc.
3435 Stelzer Road 100.00%
Columbus, OH 43219
Core Fixed Income Fund
Service Class Shares
-----------------
IBJ Schroder Bank & Trust Company
One State Street, 7th Floor 98.99%
New York, NY 10004-1505
Core Fixed Income Fund
Premium Class Shares
-----------------
BISYS Fund Services Ohio Inc.
3435 Stelzer Road 100.00%
Columbus, OH 43219
Core Equity Fund
Service Class Shares
-----------------
IBJ Schroder Bank & Trust Company
One State Street, 7th Floor 98.18%
New York, NY 10004-1505
Core Equity Fund
Premium Class Shares
-----------------
BISYS Fund Services Ohio Inc.
3435 Stelzer Road 100.00%
Columbus, OH 43219
Blended Total Return Fund
Service Class Shares
-----------------
IBJ Schroder Bank & Trust Company
One State Street, 7th Floor 99.64%
New York, NY 10004-1505
<PAGE>
Blended Total Return Fund
Premium Class Shares
-----------------
BISYS Fund Services Ohio Inc.
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. First Data Investor Services Group, Inc. (the "Transfer Agent") acts as
transfer agent for the Funds. The Trust compensates the Transfer Agent 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, 1997, BISYS Fund Services, the
previous transfer agent, earned $9,465, $12,198, $15,874 and $7,424 for the
Reserve Money Market Fund, Core Fixed Income Fund, Core Equity Fund and Blended
Total Return Fund, respectively. INDEPENDENT AUDITORS
Effective December 1, 1997, Ernst & Young LLP has been selected as the
independent auditors for the Trust. Ernst & Young LLP provides audit services,
tax return review and assistance and consultation in connection with review of
certain SEC filings. Ernst & Young LLP's address is 787 7th Avenue, New York,
New York 10019.
Prior to December 1, 1997, Coopers & Lybrand L.L.P. served as the
independent accountants for the Trust.
COUNSEL
Baker & McKenzie serves as counsel to the Trust and also provides
advice to IBJS in its capacity as Investment Advisor to the Trust.
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:
Effective Yield = [(Base Period Return + 1)365/7] - 1.
For the period ended November 30, 1997, the seven day yield and seven
day effective yield of the Service Class Shares of the Reserve Money Market Fund
was 5.02% and 5.01%, respectively.
Quotations of yield for the Non-Money Market Funds will be based on the
investment income per share earned during a particular 30-day (or one month)
period, less expenses accrued during a period ("net investment income") and will
be computed by dividing net investment income by the maximum offering price per
share on the last day of the period, according to the following formula:
YIELD = 2[(a-b + 1)6 -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 November 30, 1997, the 30-day (or one month) yield
for Service Class shares of the Core Fixed Income Fund, Core Equity Fund and
Blended Total Return Fund was 5.26%, 0.63% and 2.79%, 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:
P (1 + T)n = 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, 1997 was 7.20%, 24.68% and 14.69%, respectively,
and for the period February 1, 1995 (commencement of operations) to November 30,
1997 was 8.35%, 28.06% and 17.55%. The average annual total return for the
Premium Class shares of the Core Fixed Income Fund, Core Equity Fund and Blended
Total Return Fund for the fiscal year ended November 30, 1997 were identical to
those for the Service Class of shares.
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 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 Funds' financial statements and financial highlights for the fiscal
year ended November 30, 1997, and the report of Coopers & Lybrand L.L.P., the
previous independent accountants, are included in the Funds' Annual Report,
which is a separate report supplied with this SAI. The Funds' financial
statements, including the financial highlights and report of the independent
accountants are incorporated herein by reference. For a free additional copy of
the Annual Report, please contact the Funds at 1-800-99-IBJFD (1-800-994-2533).
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: Financial Statements and
Financial Highlights included in the Annual Report
for the fiscal year ended November 30, 1997 are
incorporated by reference to the filing on February
6, 1998 for IBJ Funds Trust pursuant to Rule 30d-1
under the Investment Company Act of 1940 (Accession
#0000950132-98-000070).
(b) EXHIBITS
(1) Trust Instrument, filed with Post-Effective
Amendment No. 2 to Registration Statement No. 33-83430 on
March 27, 1996, and incorporated herein by reference.
(2) Amended Bylaws of Registrant, dated March 20, 1997,
filed with Post-Effective Amendment No. 4 to Registration
Statement No. 33-83430 on March 27, 1997, and incorporated
herein by reference.
(3) None.
(4) None.
(5)(a) Form of Master Investment Advisory Contract and
Supplements between Registrant and IBJ Schroder Bank
& Trust Company, filed with Post-Effective Amendment
No. 2 to Registration Statement No. 33-83430 on March
27, 1996, and incorporated herein by reference.
(5)(b) Administration Agreement dated March 1, 1998 between
First Data Investor Services Group, Inc. and IBJ
Funds Trust is filed herewith.
<PAGE>
(6) Distribution Agreement dated March 1, 1998 between
IBJ Funds Trust and First Data Distributors, Inc. is
filed herewith.
(7) None.
(8) Form of Custodian Contract between Registrant and IBJ
Schroder Bank & Trust Company, filed with
Post-Effective Amendment No. 2 to Registration
Statement No. 33-83430 on March 27, 1996, and
incorporated herein by reference.
(9)(a) Transfer Agency and Services Agreement dated March 1,
1998 between IBJ Funds Trust and First Data Investor
Services Group, Inc. is filed herewith.
(10) Opinion and Consent of Baker & McKenzie, counsel to
Registrant is filed herewith.
(11)(a) Consent of Coopers & Lybrand L.L.P., independent
accountants is filed herewith.
(11)(b) Consent of Ernst & Young LLP, independent auditors is
filed herewith.
(11)(c) Power of Attorney and Secretary's Certificate is filed
herewith.
(12) None.
(13) Subscription Agreement, filed with Post-Effective Amendment No. 2 to
Registration Statement No. 33-83430 on March 27, 1996, and incorporated herein
by reference.
(14) None.
(15)(a) Form of Distribution and Service Plan pursuant to
Rule 12b-1 for Premium Class shareholders is filed
herewith.
(15)(b) Form of Supplements to Distribution and Service Plan
is filed herewith.
(15)(c) Form of Servicing Organization Agreement is filed
herewith.
(16) Schedule of Computation of Performance Calculation, filed with
Post-Effective Amendment No. 2 to Registration Statement No. 33-83430 on March
27, 1996, and incorporated herein by reference.
(17) Financial Data Schedules are filed herewith.
(18) Form of Rule 18f-3 Plan, filed with Post-Effective Amendment No. 2 to
Registration Statement No. 33-83430 on March 27, 1996, and incorporated herein
by reference.
Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
None.
Item 26. NUMBER OF HOLDERS OF SECURITIES AT MARCH 1, 1998
Service Premium
Reserve Money Market Fund 20 1
Core Fixed Income Fund 14 1
Core Equity Fund 36 1
Blended Total Return 7 1
Item 27. INDEMNIFICATION.
As permitted by Section 17(h) and (i) of the Investment
Company Act of 1940, as amended (the "1940 Act") and pursuant
to Article X of the Registrant's Trust Instrument, Section 4
of the Master Investment Advisory Contract between Registrant
and IBJ Schroder Bank & Trust Company, and Section 1.13 of the
Distribution Agreement between Registrant and First Data
Distributors, 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 of failure to act, except for bad faith, willful
misfeasance, gross negligence or reckless disregard of duties,
and those individuals may be indemnified against liabilities
in connection with the Registrant, subject to the same
exceptions.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Securities Act") may be permitted
to trustees, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant understands that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy 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
First Data Distributors, Inc. limit the liability of IBJ
Schroder Bank & Trust Company and First Data Distributors,
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 Trust Instrument, 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
interpretations of Section 17(h) of such Act remain in effect
and are consistently applied.
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 Chairman
The Industrial Bank of Japan
Yoh Kurosawa Chairman
Masao Hishimura President
Yoshiyuki Fujisawa Deputy President
Yoshiomi Matsumoto Deputy President
Item 29. PRINCIPAL UNDERWRITER.
(a) In addition to IBJ Funds Trust, First Data Distributors, Inc. (the
"Distributor") currently acts as distributor for Alleghany Funds, BT Insurance
Funds Trust, First Choice Funds Trust, The Galaxy Fund, The Galaxy VIP Fund,
Galaxy Fund II, Panorama Trust, Wilshire Target Funds, Inc., Potomac Funds,
Undiscovered Managers Funds, LKCM Funds, Rembrandt Funds and the ICM Series
Trust. The Distributor is registered with the Securities and Exchange Commission
as a broker-dealer and is a member of the National Association of Securities
Dealers. The Distributor is a wholly-owned subsidiary of First Data Corporation
and is located at 4400 Computer Drive, Westborough, MA 01581.
(b) The information required by this Item 29(b) with
respect to each director, officer, or partner of
First Data Distributors, Inc. is incorporated by
reference to Schedule A of Form BD filed by First
Data Distributors, Inc. with the Securities and
Exchange Commission pursuant to the Securities Act of
1934 (File No. 8-45467).
(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 1940 Act and the rules
thereunder are maintained at the offices of First Data
Investor Services Group, Inc.
Item 31. MANAGEMENT SERVICES.
Not applicable.
Item 32. UNDERTAKINGS.
(a) Not Applicable.
(b) Not Applicable.
(c) The Registrant will furnish each person to whom a prospectus
is delivered with a copy of the Registrant's latest annual report to
shareholders, upon request and without charge.
(d) Registrant hereby undertakes to call a meeting of its
shareholders for the
purpose of voting upon the question of removal of a trustee or trustees of
Registrant when requested in writing to do so by the holders of at least 10% of
Registrant's outstanding shares. Registrant undertakes further, in connection
with
the meeting, to comply with the provisions of Section 16(c) of the
1940 Act
relating to communications with the shareholders of certain
common-law
trusts.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Westborough, Commonwealth of Massachusetts on the
30th day of March, 1998.
IBJ FUNDS TRUST
By: *
Jylanne M. Dunne, President
* By: /s/Brigid O. Bieber
Brigid O. Bieber
as Attorney-in-Fact
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement of IBJ Funds Trust has been signed below by the following persons in
his or her capacity and on the 30th day of March, 1998.
Signature Capacity
* Chairman, Board of Trustees
George H. Stewart
* Trustee
Robert H. Dunker
* Trustee
Stephen V. R. Goodhue
* Trustee
Edward F. Ryan
* President
Jylanne M. Dunne
(Chief Executive Officer)
* Treasurer
Steven L. Levy
(Principal Financial & Accounting Officer)
* By: /s/Brigid O. Bieber
Brigid O. Bieber
as Attorney-in-Fact
The Power of Attorney is filed herin as Exhibit No. 11(c) to this Registration
Statement.
IBJ FUNDS TRUST
REGISTRATION NO. 33-83430
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940
AND
THE SECURITIES ACT OF 1933
ITEM #24 Financial Statements and Exhibits 99.B Index to Exhibits Filed Pursuant
to Form N-IA:
(5)(b) Administration Agreement, dated March 1, 1998
(6) Distribution Agreement, dated March 1, 1998
(9)(a) Transfer Agency and Services Agreement, dated March 1, 1998
(10) Opinion and Consent of Counsel
(11)(a) Consent of Independent Accountants
(11)(b) Consent of Independent Auditors
(11)(c) Power of Attorney and Secretary Certificate
(15)(a) Form of Distribution and Service Plan
(15)(b) Form of Supplements to Distribution and Service Plan
(15)(c) Form of Servicing Organization Agreement
(17) Financial Data Schedules
ADMINISTRATION AGREEMENT
THIS ADMINISTRATION AGREEMENT is made as of March 1, 1998 (the
"Agreement"), by and between FIRST DATA INVESTOR SERVICES GROUP, INC., a
Massachusetts corporation ("FDISG"), and IBJ FUNDS TRUST, a Delaware business
trust (the "Company").
WHEREAS, the Company is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Company desires to retain FDISG to render certain
administrative services with respect to each investment portfolio listed in
Schedule A hereto, as the same may be amended from time to time by the parties
hereto (collectively, the "Funds"), and FDISG is willing to render such
services;
WITNESSETH:
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Company hereby appoints FDISG to act as Administrator
of the Company on the terms set forth in this Agreement. FDISG accepts such
appointment and agrees to render the services herein set forth for the
compensation herein provided. In the event that the Company decides to retain
FDISG to act as Administrator hereunder with respect to one or more portfolios
other than the Funds, the Company shall notify FDISG in writing. If FDISG is
willing to render such services, it shall notify the Company in writing
whereupon such portfolio shall become a Fund hereunder.
2. Delivery of Documents. The Company has furnished FDISG with copies
properly certified or authenticated of each of the following:
(a) Resolutions of the Company's Board of Trustees authorizing
the appointment of FDISG to provide certain administrative services required by
the Company for each Fund and approving this Agreement;
(b) The Company's Declaration of Trust (the "Declaration of
Trust") filed with the State of Delaware and all amendments thereto;
(c) The Company's By-Laws and all amendments thereto
(the "By-Laws");
(d) The Investment Advisory Agreement between IBJ Schroder Bank &
Trust Co. (the "Adviser") and the Company dated as of November 18, 1994, and all
amendments thereto (the "Advisory Agreement");
(e) The Custody Agreement between IBJ Schroder Bank & Trust
Company (the "Custodian") and the Company dated as of November 18, 1994, and all
amendments thereto (the "Custody Agreement");
(f) The Transfer Agency and Registrar Agreement between First Data Investor
Services Group, Inc. (the "Transfer Agent") and the Company dated as of March 1,
1998, and all amendments thereto;
(g) The Distribution Agreement between First Data Distributors, Inc. (the
"Distributor") and the
Company dated as of March 1, 1998 and all amendments thereto (the
"Distribution Agreement");
(h) The Company's Registration Statement on Form N-1A (the
"Registration Statement") under the Securities Act of 1933 and under the 1940
Act (File Nos. 3383430 and 8118738), as declared effective by the Securities and
Exchange Commission ("SEC") on November 9, 1994, relating to shares of the
Company's Shares of beneficial interest, $0.001 par value per share, and all
amendments thereto; and
(i) Each Fund's most recent prospectus and Statement of
Additional Information and all amendments and supplements thereto (collectively,
the "Prospectuses").
The Company will furnish FDISG from time to time with copies, properly
certified or authenticated, of all amendments of or supplements to the
foregoing. Furthermore, the Company will provide FDISG with any other documents
that FDISG may reasonably request and will notify FDISG as soon as possible of
any matter materially affecting the performance of FDISG of its services under
this Agreement.
3. Duties as Administrator. Subject to the supervision and direction of
the Board of Trustees of the Company, FDISG, as Administrator, will assist in
supervising various aspects of the Company's administrative operations and
undertakes to perform the following specific services:
(a) Maintaining office facilities (which may be in the offices of
FDISG or a corporate affiliate) and furnishing corporate officers for the
Company;
(b) Performing the functions ordinarily performed by a mutual
fund group's internal legal department as described in Schedule B to this
Agreement, furnishing data processing services, clerical services, and executive
and administrative services and standard stationery and office supplies in
connection with the foregoing;
(c) Accounting and bookkeeping services (including the
maintenance of such accounts, books and records of the Company as may be
required by Section 31(a) of the 1940 Act and the rules thereunder);
(d) Internal auditing;
(e) Performing all functions ordinarily performed by the office
of a corporate treasurer, and furnishing the services and facilities ordinarily
incident thereto, including calculating the net asset value of the shares in
conformity with the fund(s) prospectus;
(f) Preparing reports to the Company's shareholders of record and
the SEC including, but not necessarily limited to, Annual Reports and
Semi-Annual Reports on Form N-SAR;
(g) Preparing and filing various reports or other documents
required by federal, state and other applicable laws and regulations, other than
those filed or required to be filed by the Adviser or Transfer Agent;
(h) Preparing and filing the Company's tax returns;
(i) Assisting the Adviser, at the Adviser's request, in
monitoring and developing compliance procedures for the Company which will
include, among other matters, procedures to assist the Adviser in monitoring
compliance with each Fund's investment objective, policies, restrictions, tax
matters and applicable laws and regulations;
(j) Monitoring each Fund's compliance with certain investment
objectives, policies, restrictions, tax matters and applicable rules and
regulations as described in the Compliance Matrix provided by FDISG to the
Company;
(k) Performing all functions ordinarily performed by the office of
a corporate secretary, and furnishing the services and facilities incident
thereto, including all functions pertaining to matters organic to the
organization, existence and maintenance of the corporate franchise of the
Company, including preparation for, conduct of, and recording trustees' meetings
and shareholder meetings;
(l) Performing "Blue Sky" compliance functions, including
maintaining notice filings, registrations or "Blue Chip" exemptions (if
available) in all U.S. jurisdictions requested by the Company, monitoring sales
of shares in all such jurisdictions and filing such additional notice or
applying for such additional or amended registrations as may be reasonably
anticipated to be necessary to permit continuous sales of the shares of the
Funds in all such jurisdictions, filing sales literature and advertising
materials to the extent required, with such Blue Sky authorities, and making and
filing all other applications, reports, notices, documents and exhibits in
connection with the foregoing;
(m) Furnishing all other services identified on Schedule B annexed
hereto and incorporated herein which are not otherwise specifically set forth
above; and
(n) FDISG agrees to provide the services set forth herein in
accordance with performance standards annexed hereto as Exhibit 1 of Schedule B
and incorporated herein (the "Performance Standards"). Such Performance
Standards may be amended from time to time upon written agreement by the
parties.
In performing its duties under this Agreement, FDISG: (a) will act in
accordance with the Declaration of Trust, By-Laws, Prospectuses and with the
instructions and directions of the Company and will conform to and comply with
the requirements of the 1940 Act and all other applicable federal or state laws
and regulations; and (b) will consult with legal counsel to the Company, as
necessary and appropriate. Furthermore, FDISG shall not have or be required to
have any authority to supervise the investment or reinvestment of the securities
or other properties which comprise the assets of the Company or any of its Funds
and shall not provide any investment advisory services to the Company or any of
its Funds.
4. Compensation and Allocation of Expenses. FDISG shall bear all expenses
in connection with the performance of its services under this Agreement, except
as indicated below.
(a) FDISG will from time to time employ or associate with itself
such person or persons as FDISG may believe to be particularly suited to assist
it in performing services under this Agreement. Such person or persons may be
officers and employees who are employed by both FDISG and the Company. The
compensation of such person or persons shall be paid by FDISG and no obligation
shall be incurred on behalf of the Company in such respect.
(b) FDISG shall not be required to pay any of the following
expenses incurred by the Company: membership dues in the Investment Company
Institute or any similar organization; investment advisory expenses; costs of
printing and mailing stock certificates, prospectuses, reports and notices;
interest on borrowed money; brokerage commissions; stock exchange listing fees;
taxes and fees payable to Federal, state and other governmental agencies; fees
of Trustees of the Company who are not affiliated with FDISG; outside auditing
expenses; outside legal expenses; or other expenses not specified in this
Section 4 which may be properly payable by the Company.
(c) The Company on behalf of each of the Funds will compensate
FDISG for the performance of its obligations hereunder in accordance with the
fees set forth in the written Fee Schedule annexed hereto as Schedule C and
incorporated herein. Schedule C may be amended to add fee schedules for any
additional Funds for which FDISG has been retained as Administrator.
(d) The Company will compensate FDISG for its services rendered
pursuant to this Agreement in accordance with the fees set forth above. Such
fees do not include out-of-pocket disbursements of FDISG for which FDISG shall
be entitled to bill separately. Out-of-pocket disbursements shall include the
items specified in Schedule D annexed hereto and incorporated herein.
5. Limitation of Liability.
(a) FDISG shall not be liable for any error of judgment or mistake of law
or for any loss suffered by the Company in connection with the performance of
its obligations and duties under this Agreement, except a loss resulting from
FDISG's willful misfeasance, bad faith or negligence in the performance of such
obligations and duties, or by reason of its reckless disregard thereof.
(b) Each party shall have the duty to mitigate damages for which the
other party may become responsible.
(c) NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN NO
EVENT SHALL EITHER PARTY TO THIS AGREEMENT, ITS AFFILIATES OR ANY OF ITS OR
THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR SUBCONTRACTORS BE LIABLE FOR
CONSEQUENTIAL DAMAGES.
6. Indemnification.
(a) The Company shall indemnify and hold FDISG harmless from and
against any and all claims, costs, expenses (including reasonable attorneys'
fees), losses, damages, charges, payments and liabilities of any sort or kind
which may be asserted against FDISG or for which FDISG may be held to be liable
in connection with this Agreement or FDISG's performance hereunder (a "Claim"),
unless such Claim resulted from a negligent act or omission to act or bad faith
by FDISG in the performance of its duties hereunder.
(b) FDISG shall indemnify and hold the Company harmless from and
against any and all claims, costs, expenses (including reasonable attorneys'
fees), losses, damages, charges, payments and liabilities of any sort or kind
which may be asserted against the Company or for which the Company may be held
to be liable in connection with this Agreement (a "Claim"), provided that such
Claim resulted from a negligent act or omission to act, bad faith, willful
misfeasance or reckless disregard by FDISG in the performance of its duties
hereunder.
(c) In any case in which one party hereto (the "Indemnifying
Party") may be asked to indemnify or hold the other party (the "Indemnified
Party") harmless, the Indemnified Party will notify the Indemnifying Party
promptly after identifying any situation which it believes presents or appears
likely to present a claim for indemnification against the Indemnifying Party
although the failure to do so shall not prevent recovery by the Indemnified
Party and shall keep the Indemnifying Party advised with respect to all
developments concerning such situation. The Indemnified Party will not confess
any Claim or make any compromise in any case in which the Indemnifying Party
will be asked to provide indemnification, except with the Indemnifying Party's
prior written consent. The obligations of the parties hereto under this Section
6 shall survive the termination of this Agreement.
7. Termination of Agreement.
(a) This Agreement shall be effective on the date first written
above and shall continue for a period of five (5) years (the "Initial Term"),
unless earlier terminated pursuant to the terms of this Agreement. Thereafter,
this Agreement may be terminated at any time without penalty on sixty (60) days
prior written notice.
(b) This Agreement may be terminated by the Company prior to the
expiration of the Initial Term in the event FDISG has failed to meet the
Performance Standards, as set forth in Exhibit 1 to Schedule D, in three
consecutive quarters. The Company will provide FDISG with sixty (60) days
written notice after the third consecutive quarter of FDISG's failure to meet
the Performance Standards if the Company intends to exercise this option under
this Section 7(b). Notwithstanding the foregoing, the Company's right under this
Section 7(b) shall not be effective until ninety (90) days after FDISG has begun
providing services under this Agreement. In the event that the Transfer Agency
and Services Agreement dated March 1, 1998 (the "Transfer Ageny Agreement"),
between FDISG and the Company is terminated by the Company because of a breach
by FDISG of certain performance standards as provided in Section 13.3 of the
Transfer Agency Agreement, this Agreement may be terminated by the Company upon
sixty (60) prior written notice to FDISG.
(c) In the event a termination notice is given by the Company,
all reasonable expenses associated with movement of records and materials and
conversion thereof ("Conversion Costs") will be borne by the Company; provided,
however, that in the event that such termination notice is given as a result of
a breach of the Performance Standards by FDISG with respect to the services to
be provided under this Agreement as outlined in Section 7(b) of this Agreement
or Section 13.3 of the Transfer Agency Agreement or a material breach by FDISG
of its duties and obligations hereunder as outlined in Section 7(d) of this
Agreement or Section 13.5 of the Transfer Agency Agreement, the Conversion Costs
shall be payable by FDISG.
(d) If a party hereto is guilty of a material failure to perform
its duties and obligations hereunder (a "Defaulting Party") resulting in a
material loss to the other party, such other party (the "Non-Defaulting Party")
may give written notice thereof to the Defaulting Party, and if such material
breach shall not have been remedied within thirty (30) days after such written
notice is given, then the Non-Defaulting Party may terminate this Agreement by
giving thirty (30) days written notice of such termination to the Defaulting
Party. If FDISG is the Non-Defaulting Party, its termination of this Agreement
shall not constitute a waiver of any other rights or remedies of FDISG with
respect to services performed prior to such termination or rights of FDISG to be
reimbursed for out-of-pocket expenses. In all cases, termination by the
Non-Defaulting Party shall not constitute a waiver by the Non-Defaulting Party
of any other rights it might have under this Agreement or otherwise against the
Defaulting Party.
8. Modifications and Waivers. No change, termination, modification, or
waiver of any term or condition of the Agreement shall be valid unless in
writing signed by each party. A party's waiver of a breach of any term or
condition in the Agreement shall not be deemed a waiver of any subsequent breach
of the same or another term or condition.
9. No Presumption Against Drafter. FDISG and the Company have jointly
participated in the negotiation and drafting of this Agreement. The Agreement
shall be construed as if drafted jointly by the Company and FDISG, and no
presumptions arise favoring any party by virtue of the authorship of any
provision of this Agreement.
10. Publicity. Neither FDISG nor the Company shall release or publish
news releases, public announcements, advertising or other publicity relating to
this Agreement or to the transactions contemplated by it without prior review
and written approval of the other party; provided, however, that either party
may make such disclosures as are required by legal, accounting or regulatory
requirements.
11. Severability. The parties intend every provision of this Agreement to
be severable. If a court of competent jurisdiction determines that any term or
provision is illegal or invalid for any reason, the illegality or invalidity
shall not affect the validity of the remainder of this Agreement. In such case,
the parties shall in good faith modify or substitute such provision consistent
with the original intent of the parties. Without limiting the generality of this
paragraph, if a court determines that any remedy stated in this Agreement has
failed of its essential purpose, then all other provisions of this Agreement,
including the limitations on liability and exclusion of damages, shall remain
fully effective.
13. Miscellaneous.
(a) Any notice or other instrument authorized or required by this
Agreement to be given in writing to the Company or FDISG shall be sufficiently
given if addressed to the party and received by it at its office set forth below
or at such other place as it may from time to time designate in writing.
To the Company:
IBJ Funds Trust
One State Street
New York, New York 10004
Attention: President
with a copy to:
Baker & McKenzie
805 Third Avenue, 30th Floor
New York, New York 10022
Attention:
To FDISG:
First Data Investor Services Group, Inc.
4400 Computer Drive
Westborough, Massachusetts 01581
Attention: President
with a copy to FDISG's General Counsel at the
same address
(b) This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted assigns and
is not intended to confer upon any other person any rights or remedies
hereunder. This Agreement may not be assigned or otherwise transferred by either
party hereto, without the prior written consent of the other party, which
consent shall not be unreasonably withheld. With the prior written consent of
the Company, FDISG may engage subcontractors to perform any of the obligations
contained in this Agreement to be performed by FDISG.
(c) The laws of the State of New York, excluding the laws on
conflicts of laws, shall govern the interpretation, validity, and enforcement of
this Agreement. All actions arising from or related to this Agreement shall be
brought in the state and federal courts sitting in the City of New York, and
FDISG and the Company hereby submit themselves to the exclusive jurisdiction of
those courts.
(d) This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original and which collectively shall be
deemed to constitute only one instrument.
(e) The captions of this Agreement are included for convenience
of reference only and in no way define or delimit any of the provisions hereof
or otherwise affect their construction or effect.
(f) The Company and FDISG agree that the obligations of the
Company under the Agreement shall not be binding upon any of the Trustees,
shareholders, nominees, officers, employees or agents, whether past, present or
future, of the Company individually, but are binding only upon the assets and
property of the Company, as provided in the Declaration of Trust. The execution
and delivery of this Agreement have been authorized by the Trustees of the
Company, and signed by an authorized officer of the Company, acting as such, and
neither such authorization by such Trustees nor such execution and delivery by
such officer shall be deemed to have been made by any of them or any shareholder
of the Company individually or to impose any liability on any of them or any
shareholder of the Company personally, but shall bind only the assets and
property of the Company as provided in the Declaration of Trust.
13. Confidentiality.
(a) The parties agree that the Proprietary Information (defined
below) ("Confidential Information") are confidential information of the parties
and their respective licensers. The Company and FDISG shall exercise reasonable
care to safeguard the confidentiality of the Confidential Information of the
other. The Company and FDISG may each use the Confidential Information only to
exercise its rights or perform its duties under this Agreement. The Company and
FDISG shall not sell or disclose to others the Confidential Information of the
other, in whole or in part, without the prior written permission of the other
party. The Company and FDISG may, however, disclose Confidential Information to
its employees who have a need to know the Confidential Information to perform
work for the other, provided that each shall use reasonable efforts to ensure
that the Confidential Information is not duplicated or disclosed by its
employees in breach of this Agreement. The Company and FDISG may also disclose
the Confidential Information to independent contractors, auditors and
professional advisors and as legally required or requested by regulators.
Notwithstanding the previous sentence, in no event shall either the Company or
FDISG disclose the Confidential Information to any competitor of the other
without specific, prior written consent.
(b) Proprietary Information means:
(i) any data or information that is sensitive material, and not generally
known to the public, including, but not limited to, information about product
plans, marketing strategies, finance, operations, customer relationships,
customer profiles, sales estimates, business plans, and internal performance
results relating to the past, present or future business activities of the
Company or FDISG, their respective subsidiaries and affiliated companies and the
customers, clients and suppliers of any of them;
(ii) any scientific or technical information, design, process, procedure,
formula, or improvement that is commercially valuable and secret in the sense
that its confidentiality affords the Company or FDISG a competitive advantage
over its competitors; and
(iii) all confidential or proprietary concepts, documentation, reports,
data, specifications, computer software, source code, object code, flow charts,
databases, inventions, know-how, show-how and trade secrets, whether or not
patentable or copyrightable.
(c) Confidential Information may be memorialized in, without
limitation, documents, inventions, substances, engineering and laboratory
notebooks, drawings, diagrams, specifications, bills of material, equipment,
prototypes or models, and any other tangible manifestation of the foregoing of
either party which now exist or come into the control or possession of the
other.
(d) Each party acknowledges that breach of the restrictions on
use, dissemination or disclosure of any Confidential Information of the other
party would result in immediate and irreparable harm, and money damages would be
inadequate to compensate the other party for that harm. Each party shall be
entitled to equitable relief, in addition to all other available remedies, to
redress any such breach.
14. Force Majeure. No party shall be liable for any default or delay in
the performance of its obligations under this Agreement if and to the extent
such default or delay is caused, directly or indirectly, by (i) fire, flood,
elements of nature or other acts of God; (ii) any outbreak or escalation of
hostilities, war, riots or civil disorders in any country, (iii) any act or
omission of the other party or any governmental authority; (iv) any labor
disputes (whether or not the employees' demands are reasonable or within the
party's power to satisfy); or (v) nonperformance by a third party or any similar
cause beyond the reasonable control of such party, including without limitation,
failures or fluctuations in telecommunications or other equipment, provided such
party shall have had reasonable back-up equipment available. In any such event,
the non-performing party shall be excused from any further performance and
observance of the obligations so affected only for so long as such circumstances
prevail and such party continues to use commercially reasonable efforts to
recommence performance or observance as soon as practicable.
15. Access to Books and Records. FDISG agrees to grant to the auditors
and regulators of the Company the same access to the books and records of the
Company held by FDISG as if such were held by the Company.
16. Year 2000. FDISG warrants that all equipment and software provided by
FDISG in connection with the services rendered hereunder includes or shall
include design and performance capabilities so that prior to, during and after
the calendar year 2000, they will not malfunction, produce invalid or incorrect
results, or abnormally cease to function due solely to the year 2000 date change
or any other problematic date, e.g. leap year, 9/9/1999. Such broader design and
performance capabilities shall include, without limitation, the ability to
recognize the century and manage and manipulate data involving dates, including
single century and multi-century formulas and date values, without resulting in
the generation of incorrect values involving such dates or causing an abnormal
ending; date data interfaces with functionalities and data fields that indicate
the century; and date-related functions that indicate the century. FDISG shall
upon request from time to time provide a status of the progress regarding this
provision.
17. Entire Agreement. This Agreement, including all Schedules hereto,
constitutes the entire Agreement between the parties with respect to the subject
matter hereof and supersedes all prior and contemporaneous proposals,
agreements, contracts, representations, and understandings, whether written or
oral, between the parties with respect to the subject matter hereof.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
duly executed and delivered by their duly authorized officers as of the date
first written above.
FIRST DATA INVESTOR SERVICES GROUP, INC.
By:
Name:
Title:
IBJ FUNDS TRUST
By:
Name:
Title:
<PAGE>
SCHEDULE A
The Reserve Money Market Fund
The Core Fixed Income Fund
The Core Equity Fund
The Blended Total Return Fund
<PAGE>
SCHEDULE B
Fund Accounting and Administrative Services
Routine Projects
o Daily, Weekly, and Monthly Reporting o Portfolio and General Ledger Accounting
o Daily Pricing of all Securities o Daily Valuation and NAV Calculation o
Comparison of NAV to market movement o Review of price tolerance/fluctuation
report
o Research items appearing on the price exception report
o Weekly cost monitoring along with marked-to-market valuations
in accordance with Rule 2a7
o Preparation of monthly ex-dividend monitor
o Daily cash reconciliation with the custodian bank
o Daily updating of price and rate information to the Transfer
Agent/Insurance Agent
o Daily support and report delivery to Portfolio Management
o Daily calculation of fund advisor fees and waivers
o Daily calculation of distribution rates
o Daily maintenance of each fund's general ledger including expense accruals
o Daily price notification to other vendors as required
o Calculation of 30-day adjusted SEC yields
o Preparation of month-end reconciliation package
o Monthly reconciliation of Fund expense records
o Preparation of monthly pay down gain/loss summaries
o Preparation of all annual and semi-annual audit work papers
o Preparation and Printing of Financial Statements
o Providing Shareholder Tax Information to Transfer Agent
o Producing Drafts of IRS and State Tax Returns
o Treasury Services including:
Provide Officer for the Fund
Expense Accrual Monitoring
Determination of Dividends
Prepare materials for review by the Board, e.g., 2a-7,10f-3, 17a-7,
17e-1, Rule 144a Tax and Financial Counsel
o Monthly Compliance Testing including Section 817H
<PAGE>
SCHEDULE B (continued)
Legal, Regulatory and Board of Trustees Support
Routine Legal Services
Corporate Secretarial
o Assist in maintaining corporate records and good standing status of Fund in
its state of organization o Provide Secretary/Assistant Secretary for Fund o
Develop and maintain calendar of annual and quarterly board approvals and
regulatory filings o Prepare notice, agenda, memoranda, resolutions and
background materials for legal approval at quarterly and
special board meetings; attend meetings; make presentations where
appropriate; prepare minutes; follow up on
issues
Regulatory/Filings
o Prepare and file annual Post-Effective Amendment o Assist in preparation of
Fund Registration Statement o Prepare and file Rule 24f-2 and Rule 24e-2 Notices
o Prepare and file proxy materials (including merger documents) (one in a two
year period) o Review and file Form N-SAR o Review and file Annual and
Semi-Annual Financial Reports o Prepare prospectus supplements as needed
Miscellaneous Routine Legal Services o Communicate significant regulatory
or legislative developments to Fund management and directors and provide related
planning assistance where needed o Consult with Fund management regarding
portfolio compliance and Fund corporate and regulatory issues as needed o
Maintain effective communication with outside counsel and counsel for IBJ
Schroder Bank and Trust Company and review legal bills of outside counsel o
Coordinate the printing and mailing process with outside printers for all
shareholder publications o Assist in managing SEC audits of Funds o Review sales
material and advertising for Fund SEC and NASD compliance o Assist in conversion
Coordinate time and responsibility schedules Draft notice, agenda, memoranda,
resolutions and background materials for board approval o Assist in new fund
start-up (to the extent requested) Coordinate time and responsibility schedules
Prepare Fund corporate documents (MTA/by-laws) Draft/file registration statement
(including investment objectives/policies and prospectuses) Respond to and
negotiate SEC comments Draft notice, agenda and resolutions for organizational
meeting; attend board meeting; make presentations where appropriate; prepare
minutes and follow up on issues o Arrange D&O/E&O insurance and fidelity bond
coverage for Fund o Assist in monitoring Fund Code of Ethics reporting and
provide such reports to Adviser o Assist in developing compliance guidelines and
procedures to improve overall compliance by Fund and service providers o Prepare
notice, agenda, memoranda and background materials for special board meetings,
make presentations where appropriate, prepare minutes and follow up on issues o
Prepare PEA for special purposes (e.g., new funds or classes, changes in
advisory relationships, mergers, restructurings) o Prepare special prospectus
supplements where needed o Assist in preparation of exemptive order applications
(one per year)
<PAGE>
Exhibit 1 to Schedule B
Performance Standards
Pursuant to Section 3(n) of this Agreement, FDISG has agreed to perform
the services described in this Agreement in accordance with the Performance
Standards set forth in this Exhibit 1 to Schedule B. The parties agree that the
measurement of the Performance Standards will not begin until ninety (90) days
after FDISG has begun providing services under this Agreement. The parties agree
that each quarterly period, as described below, will be measured on a rolling
three calendar month period. The parties agree that such Performance Standards,
which are described below, may be revised from time to time upon the mutual
agreement of the parties. The parties agree that any new Funds that may be added
to the Company from time to time will be entitled to similar Performance
Standards and measuring periods.
(a) In the event that FDISG fails to meet a particular Performance
Standard category in any particular quarter, the Company will provide FDISG with
written notice of such failure, and FDISG agrees to take appropriate prompt
corrective action.
(b) In the event that FDISG fails to meet a particular Performance
Standard category (except for any failure due to circumstances beyond its
control) in two (2) consecutive quarters, the fee payable to FDISG hereunder for
such service shall be reduced by ten percent (10%) for the second of those two
quarters.
(c) In the event that FDISG fails to meet a particular Performance
Standard category (except for any failure due to circumstances beyond its
control) for any three (3) consecutive quarters, the Company shall have the
right to terminate this Agreement upon sixty (60) days' written notice to FDISG.
(d) Compliance with the Performance Standards shall be measured
quarterly based on the average performance during that quarter. In the event
that the number of Funds shall increase to five (5), compliance with the
Performance Standards shall then be measured monthly based on the average
performance during that month, except with respect to those services which are
provided only on a quarterly basis. A month shall be defined as a calendar
month.
(e) The Performance Standards shall be as follows:
SEE ATTACHED
<PAGE>
SCHEDULE C
FEE SCHEDULE
For the services to be rendered, the facilities to be furnished and the
payments to be made by FDISG, as provided for in this Agreement, the Company, on
behalf of each Fund, will pay FDISG on the first business day of each month a
fee for the previous month at the rates listed below. The fee for the period
from the effective date of this Agreement to the end of such month shall be
prorated according to the proportion that 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.
Fund Accounting Services:
$35,000 per Fund per annum
$5,000 per class per annum for each class in excess of one class
Fund Administration Services:
Aggregate Assets Fee
Less than $500 million 0.15%
$500 million to $1 billion 0.10%
Greater than $1 billion 0.075%
FDISG shall be entitled to collect all out-of-pocket fees
described in Schedule D.
<PAGE>
SCHEDULE D
OUT-OF-POCKET EXPENSES
Out-of-pocket expenses include the following:
- Postage of Board meeting materials and other materials to the
Company's Board members and service providers (including
overnight or other courier services)
- Telecommunications charges (including FAX) with respect to
communications with the Company's directors, officers and
service
providers
- Duplicating charges with respect to filings with federal
and state authorities
and Board meeting materials
- Courier services
- Pricing services
- Forms and supplies for the preparation of Board meetings
and other
materials for the Company
- Vendor set-up charges for Blue Sky services
- Customized programming requests
- Such other expenses as are agreed to by FDISG and the Company
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made as of this 1ST day of March, 1998 (the
"Agreement") by and between IBJ Funds Trust, a Delaware business trust (the
"Company") and First Data Distributors, Inc. (the "Distributor"), a
Massachusetts corporation.
WHEREAS, the Company is registered as a diversified, open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"); and is currently offering units of beneficial interest
(such units of all series are hereinafter called the "Shares"), representing
interests in investment portfolios of the Company identified on Schedule A
hereto (the "Funds") which are registered with the Securities and Exchange
Commission (the "SEC") pursuant to the Company's Registration Statement on Form
N-1A (the "Registration Statement"); and
WHEREAS, the Company desires to retain the Distributor as distributor
for the Funds to provide for the sale and distribution of the Shares of the
Funds identified on Schedule A and for such additional classes or series as the
Company may issue, and the Distributor is prepared to provide such services
commencing on the date first written above.
NOW THEREFORE, in consideration of the premises and mutual covenants
set forth herein and intending to be legally bound hereby the parties hereto
agree as follows:
1. Service as Distributor
1.1 The Distributor will act on behalf of the Company for the distribution
of the Shares covered by the Registration Statement under the
Securities Act of 1933, as amended (the "1933 Act"). The Distributor
will have no liability for payment for the purchase of Shares sold
pursuant to this Agreement or with respect to redemptions or
repurchases of Shares.
1.2 The Distributor agrees to use efforts deemed appropriate by the
Distributor to solicit orders for the sale of the Shares and will
undertake such advertising and promotion as it believes reasonable in
connection with such solicitation. To the extent that the Distributor
receives shareholder services fees under any shareholder services plan
adopted by the Company, the Distributor agrees to furnish, and/or enter
into arrangements with others for the furnishing of, personal and/or
account maintenance services with respect to the relevant shareholders
of the Company as may be required pursuant to such plan. It is
contemplated that the Distributor will enter into sales or servicing
agreements with securities dealers, financial institutions and other
industry professionals, such as investment advisers, accountants and
estate planning firms.
1.3 The Company understands that the Distributor is now, and may in the
future be, the distributor of the shares of several investment
companies or series (collectively, the "Investment Entities"),
including Investment Entities having investment objectives similar to
those of the Company. The Company further understands that investors
and potential investors in the Company may invest in shares of such
other Investment Entities. The Company agrees that the Distributor's
duties to such Investment Entities shall not be deemed in conflict with
its duties to the Company under this Section 1.3.
1.4 The Distributor shall not utilize any materials in connection with the
sale or offering of Shares except the Company's prospectus and
statement of additional information and such other materials as the
Company shall provide or approve.
1.5 All activities by the Distributor and its employees, as distributor of
the Shares, shall comply with all applicable laws, rules and
regulations, including, without limitation, all rules and regulations
made or adopted by the SEC or the National Association of Securities
Dealers.
1.6 The Distributor will transmit any orders received by it for purchase
or redemption of the Shares to the
transfer agent for the Company.
1.7 Whenever in its judgment such action is warranted by unusual market,
economic or political conditions or abnormal circumstances of any kind,
the Company may decline to accept any orders for, or make any sales of,
the Shares until such time as the Company deems it advisable to accept
such orders and to make such sales, and the Company advises the
Distributor promptly of such determination.
1.8 The Company agrees to pay all reasonable costs and expenses in
connection with the registration of Shares under the Securities Act of
1933, as amended, and all reasonable expenses in connection with
maintaining facilities for the issue and transfer of Shares and for
supplying information, prices and other data to be furnished by the
Fund hereunder, and all reasonable expenses in connection with the
preparation and printing of the Fund's prospectuses and statements of
additional information for regulatory purposes and for distribution to
shareholders.
1.9 The Company 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 the Distributor
may designate. The Company shall notify the Distributor in writing of
the states in which the Shares may be sold and shall notify the
Distributor in writing of any changes to the information contained in
the previous notification.
1.10 The Company shall furnish from time to time, for use in connection with
the sale of the Shares, such information with respect to the Company
and the Shares as the Company may reasonably request; and the Company
warrants that the statements contained in any such information shall
fairly show or represent what they purport to show or represent. The
Company shall also furnish the Distributor upon request with: (a)
audited annual statements and unaudited semi-annual statements of a
Fund's books and accounts prepared by the Company, (b) quarterly
earnings statements prepared by the Company, (c) a monthly itemized
list of the securities in the Funds, and (d) monthly balance sheets as
soon as practicable after the end of each month.
1.11 The Company represents to the Distributor that all Registration
Statements and prospectuses filed by the Company with the SEC under the
1933 Act with respect to the Shares have been prepared in conformity
with the requirements of the 1933 Act and the rules and regulations of
the SEC thereunder. As used in this Agreement, the term "Registration
Statement" shall mean any Registration Statement and any prospectus and
any statement of additional information relating to the Company filed
with the SEC and any amendments or supplements thereto at any time
filed with the SEC. Except as to information included in the
Registration Statement in reliance upon information provided to the
Company by the Distributor or any affiliate of the Distributor
expressly for use in the Registration Statement, the Company represents
and warrants to the Distributor that any Registration Statement, when
such Registration Statement becomes effective, will contain statements
required to be stated therein in conformity with the 1933 Act and the
rules and regulations of the SEC; that all statements of fact contained
in any such Registration Statement will be true and correct when such
Registration Statement becomes effective; and that no Registration
Statement when such Registration Statement becomes effective will
include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading to a purchaser of the Shares. The
Distributor 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 Distributor's counsel, be
necessary or advisable. The Company shall promptly notify the
Distributor of any advice given to it by its counsel regarding the
necessity or advisability of amending or supplementing such
Registration Statement. If the Company shall not propose such amendment
or amendments and/or supplement or supplements within fifteen days
after receipt by the Company of a reasonable written request from the
Distributor to do so, the Distributor may, at its option, terminate
this Agreement. The Company shall not file any amendment to any
Registration Statement or supplement to any prospectus without giving
the Distributor reasonable notice thereof in advance; provided,
however, that nothing contained in this Agreement shall in any way
limit the Company's right to file at any time such amendments to any
Registration Statements and/or supplements to any prospectus, of
whatever character, as the Company may deem advisable, such right being
in all respects absolute and unconditional.
1.12 The Company authorizes the Distributor to use in connection with
the sale of the Shares any prospectus or statement of additional
information in the form furnished from time to time. The Company agrees
to indemnify and hold harmless the Distributor, its officers,
directors, and employees, and any person who controls the Distributor
within the meaning of Section 15 of the 1933 Act, free and harmless (a)
from and against any and all claims, costs, expenses (including
reasonable attorneys' fees) losses, damages, charges, payments and
liabilities of any sort or kind which the Distributor, its officers,
directors, employees or any such controlling person may incur under the
1933 Act, under any other statute, at common law or otherwise, arising
out of or based upon: (i) any untrue statement, or alleged untrue
statement, of a material fact contained in the Company's Registration
Statement, prospectus, statement of additional information, or sales
literature (including amendments and supplements thereto), or (ii) any
omission, or alleged omission, to state a material fact required to be
stated in the Company's Registration Statement, prospectus, statement
of additional information or sales literature (including amendments or
supplements thereto), necessary to make the statements therein not
misleading, provided, however, that insofar as losses, claims, damages,
liabilities or expenses arise out of or are based upon any such untrue
statement or omission or alleged untrue statement or omission made in
reliance on and in conformity with information furnished to the Company
by the Distributor or its affiliated persons for use in the Company's
Registration Statement, prospectus, or statement of additional
information or sales literature (including amendments or supplements
thereto), such indemnification is not applicable; and (b) from and
against any and all such claims, demands, liabilities and expenses
(including such costs and counsel fees) which you, your officers and
directors, or such controlling person, may incur in connection with
this Agreement or the Distributor's performance hereunder (but
excluding such claims, demands, liabilities and expenses (including
such costs and counsel fees) 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), unless such claims, demands, liabilities and expenses
(including such costs and counsel fees) arise by reason of the
Distributor's willful misfeasance, bad faith or negligence in the
performance of the Distributor's duties hereunder. The Company
acknowledges and agrees that in the event that the Distributor, at the
request of the Company, is required to give indemnification comparable
to that set forth in clause (a) of this Section 1.12 to any
broker-dealer selling Shares of the Company and such broker-dealer
shall make a claim for indemnification against the Distributor, the
Distributor shall make a similar claim for indemnification against the
Company.
1.13 The Distributor agrees to indemnify and hold harmless the Company, its
several officers and Trustees and each person, if any, who controls a
Fund within the meaning of Section 15 of the 1933 Act against any and
all claims, costs, expenses (including reasonable attorneys' fees),
losses, damages, charges, payments and liabilities of any sort or kind
which the Company, its officers, Trustees or any such controlling
person may incur under the 1933 Act, under any other statute, at common
law or otherwise, but only to the extent that such liability or expense
incurred by the Company, its officers or Trustees, or any controlling
person resulting from such claims or demands arise out of the
acquisition of any Shares by any person which may be based upon any
untrue statement, or alleged untrue statement, of a material fact
contained in the Company's Registration Statement, prospectus or
statement of additional information (including amendments and
supplements thereto), or any omission, or alleged omission, to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, if such statement or omission was
made in reliance upon information furnished or confirmed in writing to
the Company by the Distributor or its affiliated persons (as defined in
the 1940 Act) or in connection with the Distributor's willful
misfeasance, bad faith or negligence.
1.14 In any case in which one party hereto (the "Indemnifying Party") may be
asked to indemnify or hold the other party hereto (the "Indemnified
Party") harmless, the Indemnified Party will notify the Indemnifying
Party promptly after identifying any situation which it believes
presents or appears likely to present a claim for indemnification (an
"Indemnification Claim") against the Indemnifying Party, although the
failure to do so shall not prevent recovery by the Indemnified Party,
and shall keep the Indemnifying Party advised with respect to all
developments concerning such situation. The Indemnified Party will not
confess any Indemnification Claim or make any compromise in any case in
which the Indemnifying Party will be asked to provide indemnification,
except with the Indemnifying Party's prior written consent. The
obligations of the parties hereto under this Section 1.14 and Section
3.1 shall survive the termination of this Agreement.
The Indemnifying Party's indemnification agreement contained in this
Section 1.14 and Section 3.1 and the Indemnifying Party'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 the Indemnified Party, its officers, directors and
employees, or any controlling person, and shall survive the delivery of
any Shares. This agreement of indemnity will inure exclusively to the
Indemnified Party's benefit, to the benefit of its several officers,
directors and employees, and their respective estates and to the
benefit of the controlling persons and their successors. The
Indemnifying Party agrees promptly to notify the Indemnified Party of
the commencement of any litigation or proceedings against the
Indemnifying Party or any of its officers or directors in connection
with the issue and sale of any Shares.
1.15 No Shares shall be offered by either the Distributor or the Company
under any of the provisions of this Agreement and no orders for the
purchase or sale of Shares hereunder shall be accepted by the Company
if and so long as effectiveness of the Registration Statement then in
effect or any necessary amendments thereto shall be suspended under any
of the provisions of the 1933 Act, or if and so long as a current
prospectus as required by Section 5(b)(2) of the 1933 Act is not on
file with the SEC; provided, however, that nothing contained in this
Section 1.15 shall in any way restrict or have any application to or
bearing upon the Company's obligation to redeem Shares tendered for
redemption by any shareholder in accordance with the provisions of the
Company's Registration Statement, Declaration of Trust, or bylaws.
1.16 The Company agrees to advise the Distributor as soon as reasonably
practical by a notice in writing delivered to the Distributor:
(a) of any request by the SEC for amendments to the Registration
Statement, prospectus or statement of additional information then in
effect or for additional information;
(b) in the event of the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement, prospectus
or statement of additional information then in effect or the initiation
by service of process on the Company 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, prospectus or
statement of additional information then in effect or that requires the
making of a change in such Registration Statement, prospectus or
statement of additional information in order to make the statements
therein not misleading; and
(d) of all actions of the SEC with respect to any amendments to any
Registration Statement, prospectus or statement of additional
information which may from time to time be filed with the SEC.
For purposes of this section, informal requests by or acts of the Staff
of the SEC shall not be deemed actions of or requests by the SEC.
2. Term
2.1 This Agreement shall become effective on the date first written above
and, unless sooner terminated as provided herein, shall continue for an
initial two-year term and thereafter shall be renewed for successive
one-year terms, provided such continuance is specifically approved at
least annually by (i) the Company's Board of Trustees or (ii) by a vote
of a majority (as defined in the 1940 Act and Rule 18f-2 thereunder) of
the outstanding voting securities of the Company, provided that in
either event the continuance is also approved by a majority of the
Trustees who are not parties to this Agreement and who are not
interested persons (as defined in the 1940 Act) of any party to this
Agreement, by vote cast in person at a meeting called for the purpose
of voting on such approval. This Agreement is terminable without
penalty, on at least sixty days' written notice, by the Company's Board
of Trustees, by vote of a majority (as defined in the 1940 Act and Rule
18f-2 thereunder) of the outstanding voting securities of the Company,
or by the Distributor. This Agreement will also terminate automatically
in the event of its assignment (as defined in the 1940 Act and the
rules thereunder).
2.2 In the event a termination notice is given by the Company, all
reasonable expenses associated with movement of records and materials
and conversion thereof will be borne by the Company.
3. Limitation of Liability
3.1 Each party to this Agreement shall not be liable to the other party for
any error of judgment or mistake of law or for any loss suffered by the
other party in connection with the performance of its obligations and
duties under this Agreement, except a loss resulting from the such
party's willful misfeasance, bad faith or negligence in the performance
of such obligations and duties, or by reason of its reckless disregard
thereof. Each party (the "Indemnifying Party") will indemnify the other
party (the "Indemnified Party") against and hold it harmless from any
and all claims, costs, expenses (including reasonable attorneys' fees),
losses, damages, charges, payments and liabilities of any sort or kind
which may be asserted against the Indemnified Party for which the
Indemnified Party may be held to be liable in connection with this
Agreement or the Indemnified Party's performance hereunder (a "Section
3.1 Claim"), unless such Section 3.1 Claim resulted from a negligent
act or omission to act or bad faith by the Indemnified Party in the
performance of its duties hereunder. The provisions of Section 1.14
shall apply to any indemnification provided by the Indemnifying Party
pursuant to this Section 3.1. The obligations of the parties hereto
under this Section 3.1 shall survive termination of this Agreement.
3.2 Each party shall have the duty to mitigate damages for which the other
party may become responsible.
3.5 NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN NO EVENT
SHALL EITHER PARTY, ITS AFFILIATES OR ANY OF ITS OR THEIR DIRECTORS,
OFFICERS, EMPLOYEES, AGENTS OR SUBCONTRACTORS BE LIABLE FOR
CONSEQUENTIAL DAMAGES.
4. Modifications and Waivers
No change, termination, modification, or waiver of any term or
condition of the Agreement shall be valid unless in writing signed by
each party. A party's waiver of a breach of any term or condition in
the Agreement shall not be deemed a waiver of any subsequent breach of
the same or another term or condition.
5. No Presumption Against Drafter
The Distributor and the Company have jointly participated in the
negotiation and drafting of this Agreement. The Agreement shall be
construed as if drafted jointly by the Company and the Distributor, and
no presumptions arise favoring any party by virtue of the authorship of
any provision of this Agreement.
6. Publicity
Neither the Distributor nor the Company shall release or publish news
releases, public announcements, advertising or other publicity relating
to this Agreement or to the transactions contemplated by it without
prior review and written approval of the other party; provided,
however, that either party may make such disclosures as are required by
legal, accounting or regulatory requirements.
7. Severability
The parties intend every provision of this Agreement to be severable.
If a court of competent jurisdiction determines that any term or
provision is illegal or invalid for any reason, the illegality or
invalidity shall not affect the validity of the remainder of this
Agreement. In such case, the parties shall in good faith modify or
substitute such provision consistent with the original intent of the
parties. Without limiting the generality of this paragraph, if a court
determines that any remedy stated in this Agreement has failed of its
essential purpose, then all other provisions of this Agreement,
including the limitations on liability and exclusion of damages, shall
remain fully effective.
8. Force Majeure
No party shall be liable for any default or delay in the performance of
its obligations under this Agreement if and to the extent such default
or delay is caused, directly or indirectly, by (i) fire, flood,
elements of nature or other acts of God; (ii) any outbreak or
escalation of hostilities, war, riots or civil disorders in any
country, (iii) any act or omission of the other party or any
governmental authority; (iv) any labor disputes (whether or not the
employees' demands are reasonable or within the party's power to
satisfy); or (v) nonperformance by a third party or any similar cause
beyond the reasonable control of such party, including without
limitation, failures or fluctuations in telecommunications or other
equipment. In any such event, the non-performing party shall be excused
from any further performance and observance of the obligations so
affected only for so long as such circumstances prevail and such party
continues to use commercially reasonable efforts to recommence
performance or observance as soon as practicable.
9. Miscellaneous
9.1 Any notice or other instrument authorized or required by this Agreement
to be given in writing to the Company or the Distributor shall be
sufficiently given if addressed to the party and received by it at its
office set forth below or at such other place as it may from time to
time designate in writing.
To the Company:
IBJ Funds Trust
One State Street
New York, New York 10004
Attention: President
with a copy to:
Baker & McKenzie 805 Third Avenue,
30th Floor New York, New York 10022
Attention:
To the Distributor:
First Data Distributors, Inc.
4400 Computer Drive
Westboro, Massachusetts 01581
Attention: President
with a copy to the Distributor's
Chief Legal Officer at the same
address
9.2 The laws of the State of New York, excluding the laws on conflicts of
laws, and the applicable provisions of the 1940 Act shall govern the
interpretation, validity, and enforcement of this Agreement. To the
extent the provisions of New York law or the provisions hereof conflict
with the 1940 Act, the 1940 Act shall control. All actions arising from
or related to this Agreement shall be brought in the state and federal
courts sitting in the City of New York, and the Distributor and the
Company hereby submit themselves to the exclusive jurisdiction of those
courts.
9.3 This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original and which collectively shall be
deemed to constitute only one instrument.
9.4 The captions of this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect.
9.5 This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and is not intended
to confer upon any other person any rights or remedies hereunder.
9.6 The Distributor agrees to grant to the auditors and regulators of the
Company the same access to the books and records of the Company held by
the Distributor as if such were held by the Company.
10. Confidentiality
10.1 The parties agree that the Proprietary Information (defined below)
(collectively "Confidential Information") are confidential information
of the parties and their respective licensers. The Company and the
Distributor shall exercise reasonable care to safeguard the
confidentiality of the Confidential Information of the other. The
Company and the Distributor may each use the Confidential Information
only to exercise its rights or perform its duties under this Agreement.
The Company and the Distributor shall not sell or disclose to others
the Confidential Information of the other, in whole or in part, without
the prior written permission of the other party. The Company and the
Distributor may, however, disclose Confidential Information to its
employees who have a need to know the Confidential Information to
perform work for the other, provided that each shall use reasonable
efforts to ensure that the Confidential Information is not duplicated
or disclosed by its employees in breach of this Agreement. The Company
and the Distributor may also disclose the Confidential Information to
independent contractors, auditors and professional advisors and as
required by law or regulatory authorities. Notwithstanding the previous
sentence, in no event shall either the Company or the Distributor
disclose the Confidential Information to any competitor of the other
without specific, prior written consent.
10.2 Proprietary Information means:
(a) any data or information that is sensitive material, and not
generally known to the public, including, but not limited to,
information about product plans, marketing strategies, finance,
operations, customer relationships, customer profiles, sales estimates,
business plans, and internal performance results relating to the past,
present or future business activities of the Company or the
Distributor, their respective subsidiaries and affiliated companies and
the customers, clients and suppliers of any of them;
(b) any scientific or technical information, design, process,
procedure, formula, or improvement that is commercially valuable and
secret in the sense that its confidentiality affords the Company or the
Distributor a competitive advantage over its competitors: and
(c) all confidential or proprietary concepts, documentation, reports,
data, specifications, computer software, source code, object code, flow
charts, databases, inventions, know-how, show-how and trade secrets,
whether or not patentable or copyrightable.
10.3 Confidential Information may be memorialized in, without limitation,
documents, inventions, substances, engineering and laboratory
notebooks, drawings, diagrams, specifications, bills of material,
equipment, prototypes or models, and any other tangible manifestation
of the foregoing of either party which now exist or come into the
control or possession of the other.
10.4 Each party acknowledges that breach of the restrictions on use,
dissemination or disclosure of any Confidential Information of the
other party would result in immediate and irreparable harm, and money
damages would be inadequate to compensate the other party for that
harm. Each Party shall be entitled to equitable relief, in addition to
all other available remedies, to redress any such breach.
11. The Company and the Distributor agree that the obligations of the
Company under the Agreement shall not be binding upon any of the Trustees,
shareholders, nominees, officers, employees or agents, whether past, present or
future, of the Company individually, but are binding only upon the assets and
property of the Company, as provided in the Declaration of Trust. The execution
and delivery of this Agreement have been authorized by the Trustees of the
Company, and signed by an authorized officer of the Company, acting as such, and
neither such authorization by such Trustees nor such execution and delivery by
such officer shall be deemed to have been made by any of them or any shareholder
of the Company individually or to impose any liability on any of them or any
shareholder of the Company personally, but shall bind only the assets and
property of the Company as provided in the Declaration of Trust.
12. Entire Agreement
This Agreement, including all Schedules hereto, constitutes the entire
agreement between the parties with respect to the subject matter hereof
and supersedes all prior and contemporaneous proposals, agreements,
contracts, representations, and understandings, whether written or
oral, between the parties with respect to the subject matter hereof.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
IBJ FUNDS TRUST
By:_________________________
Name:______________________
Title:________________________
FIRST DATA DISTRIBUTORS, INC.
By:_________________________
Name:_______________________
Title:________________________
<PAGE>
- 130 -
contract/ta/openend/ibj/agr2.doc
SCHEDULE A
Name of Funds
The Reserve Money Market Fund
The Core Fixed Income Fund
The Core Equity Fund
The Blended Total Return Fund
TRANSFER AGENCY AND SERVICES AGREEMENT
THIS AGREEMENT, dated as of this 1ST day of March, 1998 between IBJ
FUNDS TRUST (the "Fund"), a Delaware business trust having its principal place
of business at 4400 Computer Drive, Westborough, Massachusetts 01581, and FIRST
DATA INVESTOR SERVICES GROUP, INC. ("FDISG"), a Massachusetts corporation with
principal offices at 4400 Computer Drive, Westboro, Massachusetts 01581.
WITNESSETH
WHEREAS, the Fund is authorized to issue Shares in separate series,
with each such series representing interests in a separate portfolio of
securities or other assets.
WHEREAS, the Fund initially intends to offer Shares in those Portfolios
identified in the attached Exhibit 1, each such Portfolio, together with all
other Portfolios subsequently established by the Fund shall be subject to this
Agreement in accordance with Article 14;
WHEREAS, the Fund on behalf of the Portfolios, desires to appoint FDISG
as its transfer agent, dividend disbursing agent and agent in connection with
certain other activities and FDISG desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants and promises
hereinafter set forth, the Fund and FDISG agree as follows:
Article 1 Definitions.
1.1 Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
(a) "Articles of Incorporation" shall mean the Articles of
Incorporation, Declaration of Trust, or other similar organizational
document as the case may be, of the Fund as the same may be amended
from time to time.
(b) "Authorized Person" shall be deemed to include (i) any
authorized officer of the Fund; or (ii) any person, whether or not such
person is an officer or employee of the Fund, duly authorized to give
Oral Instructions or Written Instructions on behalf of the Fund as
indicated in writing to FDISG from time to time.
(c) "Board of Directors" shall mean the Board of Directors or
Board of Trustees of the Fund, as the case may be.
(d) "Commission" shall mean the Securities and Exchange
Commission.
(e) "Custodian" refers to any custodian or subcustodian of
securities and other property which the Fund may from time to time
deposit, or cause to be deposited or held under the name or account of
such a custodian pursuant to a Custodian Agreement.
(f) "1934 Act" shall mean the Securities Exchange Act of 1934
and the rules and regulations promulgated thereunder, all as amended from time
to time.
(g) "1940 Act" shall mean the Investment Company Act of 1940
and the rules and regulations promulgated thereunder, all as amended
from time to time.
(h) "Oral Instructions" shall mean instructions, other than
Written Instructions, actually received by FDISG from a person
reasonably believed by FDISG to be an Authorized Person;
(i) "Portfolio" shall mean each separate series of shares
offered by the Fund representing interests in a separate portfolio of
securities and other assets;
(j) "Prospectus" shall mean the most recently dated Fund
Prospectus and Statement of Additional Information, including any
supplements thereto if any, which has become effective under the
Securities Act of 1933 and the 1940 Act.
(k) "Shares" refers collectively to such shares of capital
stock or beneficial interest, as the case may be, or class thereof, of
each respective Portfolio of the Fund as may be issued from time to
time.
(l) "Shareholder" shall mean a record owner of Shares of each
respective Portfolio of the Fund.
(m) "Written Instructions" shall mean a written communication
signed by a person reasonably believed by FDISG to be an Authorized
Person and actually received by FDISG. Written Instructions shall
include manually executed originals and authorized electronic
transmissions, including telefacsimile of a manually executed original
or other process.
Article 2 Appointment of FDISG.
The Fund, on behalf of the Portfolios, hereby appoints and constitutes
FDISG as transfer agent and dividend disbursing agent for Shares of each
respective Portfolio of the Fund and as shareholder servicing agent for the
Fund, and FDISG hereby accepts such appointments and agrees to perform the
duties hereinafter set forth.
Article 3 Duties of FDISG.
3.1 FDISG shall be responsible for:
(a) Administering and/or performing the customary services of
a transfer agent; acting as service agent in connection with dividend
and distribution functions; and for performing shareholder account and
administrative agent functions in connection with the issuance,
transfer and redemption or repurchase (including coordination with the
Custodian) of Shares of each Portfolio, as more fully described in the
written schedule of Duties of FDISG annexed hereto as Schedule A and
incorporated herein, and in accordance with the terms of the Prospectus
of the Fund on behalf of the applicable Portfolio, applicable law and
the procedures established from time to time between FDISG and the
Fund.
(b) Recording the issuance of Shares and maintaining pursuant
to Rule 17Ad-10(e) of the 1934 Act a record of the total number of
Shares of each Portfolio which are authorized, based upon data provided
to it by the Fund, and issued and outstanding. FDISG shall provide the
Fund on a regular basis with the total number of Shares of each
Portfolio which are authorized and issued and outstanding and shall
have no obligation, when recording the issuance of Shares, to monitor
the issuance of such Shares or to take cognizance of any laws relating
to the issue or sale of such Shares, which functions shall be the sole
responsibility of the Fund.
(c) In addition to providing the foregoing services, the Fund
hereby engages FDISG as its exclusive service provider with respect to
the Print/Mail Services as set forth in Schedule B for the fees also
identified in Schedule B. FDISG agrees to perform the services and its
obligations subject to the terms and conditions of this Agreement.
(d) Notwithstanding any of the foregoing provisions of this
Agreement, FDISG shall be under no duty or obligation to inquire into,
and shall not be liable for: (i) the legality of the issuance or sale
of any Shares or the sufficiency of the amount to be received therefor;
(ii) the legality of the redemption of any Shares, or the propriety of
the amount to be paid therefor; (iii) the legality of the declaration
of any dividend by the Board of Directors, or the legality of the
issuance of any Shares in payment of any dividend; or (iv) the legality
of any recapitalization or readjustment of the Shares.
3.2 In addition, the Fund shall (i) identify to FDISG in writing those
transactions and assets to be treated as exempt from blue sky reporting for each
State and (ii) verify the establishment of transactions for each State on the
system prior to activation and thereafter monitor the daily activity for each
State. The responsibility of FDISG for the Fund's blue sky State registration
status is solely limited to the initial establishment of transactions subject to
blue sky compliance by the Fund and the reporting of such transactions to the
Fund as provided above.
3.3 FDISG agrees to provide the services set forth herein in accordance
with the performance standards annexed hereto as Exhibit 1-A of Schedule A and
incorporated herein (the "Performance Standards"). Such Performance Standards
may be amended from time to time upon written agreement of the parties.
3.4 In addition to the duties set forth herein, FDISG shall perform
such other duties and functions, and shall be paid such amounts therefor, as may
from time to time be agreed upon in writing between the Fund and FDISG.
Article 4 Recordkeeping and Other Information.
4.1 FDISG shall create and maintain all records required of it pursuant
to its duties hereunder and as set forth in Schedule A in accordance with all
applicable laws, rules and regulations, including records required by Section
31(a) of the 1940 Act. Where applicable, such records shall be maintained by
FDISG for the periods and in the places required by Rule 31a-2 under the 1940
Act.
4.2 To the extent required by Section 31 of the 1940 Act, FDISG agrees
that all such records prepared or maintained by FDISG relating to the services
to be performed by FDISG hereunder are the property of the Fund and will be
preserved, maintained and made available in accordance with such section, and
will be surrendered promptly to the Fund on and in accordance with the Fund's
request.
4.3 In case of any requests or demands for the inspection of
Shareholder records of the Fund, FDISG will endeavor to notify the Fund of such
request and secure Written Instructions as to the handling of such request.
FDISG reserves the right, however, to exhibit the Shareholder records to any
person whenever it is advised by its counsel that it may be held liable for the
failure to comply with such request.
Article 5 Fund Instructions.
5.1 FDISG will have no liability when acting upon Written or Oral
Instructions reasonably believed to have been executed or orally communicated by
an Authorized Person and will not be held to have any notice of any change of
authority of any person until receipt of a Written Instruction thereof from the
Fund. FDISG will also have no liability when processing Share certificates which
it reasonably believes to bear the proper manual or facsimile signatures of the
officers of the Fund and the proper countersignature of FDISG.
5.2 At any time, FDISG may request Written Instructions from the Fund
and may seek advice from legal counsel for the Fund, or its own legal counsel,
with respect to any matter arising in connection with this Agreement, and it
shall not be liable for any action taken or not taken or suffered by it
reasonably and in good faith in accordance with such Written Instructions or in
accordance with the opinion of counsel for the Fund or for FDISG. Written
Instructions requested by FDISG will be provided by the Fund within a reasonable
period of time.
5.3 FDISG, its officers, agents or employees, shall accept Oral
Instructions or Written Instructions given to them by any person representing or
acting on behalf of the Fund only if said representative is an Authorized
Person. The Fund agrees that all Oral Instructions shall be followed within one
business day by confirming Written Instructions, and that the Fund's failure to
so confirm shall not impair in any respect FDISG's right to rely on Oral
Instructions.
Article 6 Compensation.
6.1 The Fund on behalf of each of the Portfolios will compensate FDISG
for the performance of its obligations hereunder in accordance with the fees set
forth in the written Fee Schedule annexed hereto as Schedule B and incorporated
herein.
6.2 In addition to those fees set forth in Section 6.1 above, the Fund
on behalf of each of the Portfolios agrees to pay, and will be billed separately
for, out-of-pocket expenses incurred by FDISG in the performance of its duties
hereunder. Out-of-pocket expenses shall include the items specified in the
written schedule of out-of-pocket charges annexed hereto as Schedule C and
incorporated herein. Schedule C may be modified by written agreement between the
parties. Out-of-pocket expenses shall be limited to those out-of-pocket expenses
reasonably incurred by FDISG in the performance of its obligations hereunder.
6.3 The Fund on behalf of each of the Portfolios agrees to pay all fees
and out-of-pocket expenses to FDISG by Federal Funds Wire within fifteen (15)
business days following the receipt of the respective invoice unless further
verification or documentation is required.
6.4 Any compensation agreed to hereunder may be adjusted from time to
time by attaching to Schedule B, a revised Fee Schedule executed and dated by
the parties hereto.
Article 7 Documents.
In connection with the appointment of FDISG, the Fund shall, on or
before the date this Agreement goes into effect, but in any case within a
reasonable period of time for FDISG to prepare to perform its duties hereunder,
deliver or caused to be delivered to FDISG the documents set forth in the
written schedule of Fund Documents annexed hereto as Schedule D.
Article 8 Transfer Agent System.
8.1 FDISG shall retain title to and ownership of any and all data
bases, computer programs, screen formats, report formats, interactive design
techniques, derivative works, inventions, discoveries, patentable or
copyrightable matters, concepts, expertise, patents, copyrights, trade secrets,
and other related legal rights utilized by FDISG in connection with the services
provided by FDISG to the Fund herein (the "FDISG System").
8.2 FDISG hereby grants to the Fund a limited license to the FDISG
System for the sole and limited purpose of having FDISG provide the services
contemplated hereunder and nothing contained in this Agreement shall be
construed or interpreted otherwise and such license shall immediately terminate
with the termination of this Agreement.
8.3 In the event that the Fund, including any affiliate or agent of the
Fund or any third party acting on behalf of the Fund, is provided with direct
access to the FDISG System for either account inquiry or to transmit transaction
information, including but not limited to maintenance, exchanges, purchases and
redemptions, such direct access capability shall be limited to direct entry to
the FDISG System by means of on-line mainframe terminal entry or PC emulation of
such mainframe terminal entry, and any other non-conforming method of
transmission of information to the FDISG System is strictly prohibited without
the prior written consent of FDISG.
Article 9 Representations and Warranties.
9.1 FDISG represents and warrants to the Fund that:
(a) it is a corporation duly organized, existing
and in good standing under the laws of
the Commonwealth of Massachusetts;
(b) it is empowered under applicable laws and by its
Articles of Incorporation and By-Laws
to enter into and perform this Agreement;
(c) all requisite corporate proceedings have been
taken to authorize it to enter into this
Agreement;
(d) it is duly registered with its appropriate regulatory
agency as a transfer agent and such registration will remain in effect
for the duration of this Agreement; and
(e) it has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement.
9.2 The Fund represents and warrants to FDISG that:
(a) it is duly organized, existing and in good standing
under the laws of the jurisdiction
in which it is organized;
(b) it is empowered under applicable laws and by its
Articles of Incorporation and By-Laws
to enter into this Agreement;
(c) all corporate proceedings required by said Articles of
Incorporation, By-Laws and applicable laws have been taken to authorize
it to enter into this Agreement;
(d) a registration statement under the Securities Act of 1933,
as amended, and the 1940 Act on behalf of each of the Portfolios is
currently effective and will remain effective, and all appropriate
state securities law filings have been made and will continue to be
made, with respect to all Shares of the Fund being offered for sale;
and
(e) all outstanding Shares are validly issued, fully paid and
non-assessable and when Shares are hereafter issued in accordance with
the terms of the Fund's Articles of Incorporation and its Prospectus
with respect to each Portfolio, such Shares shall be validly issued,
fully paid and non-assessable.
Article 10 Indemnification.
10.1 FDISG shall not be responsible for and the Fund on behalf of each
Portfolio shall indemnify and hold FDISG harmless from and against any and all
claims, costs, expenses (including reasonable attorneys' fees), losses, damages,
charges, payments and liabilities of any sort or kind which may be asserted
against FDISG or for which FDISG may be held to be liable (a "Claim") arising
out of or attributable to any of the following:
(a) any actions of FDISG required to be taken pursuant to this
Agreement unless such Claim resulted from a negligent act or omission
to act or bad faith by FDISG in the performance of its duties
hereunder;
(b) FDISG's reasonable reliance on, or reasonable use of
information, data, records and documents (including but not limited to
magnetic tapes, computer printouts, hard copies and microfilm copies)
received by FDISG from the Fund, or any authorized third party acting
on behalf of the Fund, including but not limited to the prior transfer
agent for the Fund, in the performance of FDISG's duties and
obligations hereunder;
(c) the reasonable reliance on, or the implementation of, any
Written or Oral Instructions or any other instructions or requests of
the Fund on behalf of the applicable Portfolio;
(d) the offer or sales of shares in violation of any
requirement under the securities laws or regulations of any state that
such shares be registered in such state or in violation of any stop
order or other determination or ruling by any state with respect to the
offer or sale of such shares in such state; and
(e) the Fund's refusal or failure to comply with the terms of
this Agreement, or any Claim which arises out of the Fund's negligence
or misconduct or the breach of any representation or warranty of the
Fund made herein.
10.2 The Fund shall not be responsible for and FDISG shall indemnify
and hold the Fund harmless from and against any and all claims, costs, expenses
(including reasonable attorneys' fees), losses, damages, charges, payments and
liabilities of any sort or kind which may be asserted against the Fund or for
which the Fund may be held to be liable (a "Claim") arising out of or
attributable to any of the following:
(a) any actions of FDISG required to be taken pursuant to this
Agreement provided that such Claim resulted from a negligent act or
omission to act, bad faith, willful misfeasance or reckless disregard
by FDISG in the performance of its duties hereunder; and
(b) FDISG's refusal or failure to comply with the terms of
this Agreement, or any Claim which arises out of the FDISG's negligence
or misconduct or the breach of any representation or warranty of FDISG
made herein.
10.3 In any case in which the one party (the "Indemnifying Party") may
be asked to indemnify or hold the other party (the "Indemnified Party")
harmless, the Indemnified Party will notify the Indemnifying Party promptly
after identifying any situation which it believes presents or appears likely to
present a claim for indemnification against the Indemnifying Party although the
failure to do so shall not prevent recovery by the Indemnified Party and shall
keep the Indemnifying Party advised with respect to all developments concerning
such situation. The Indemnified Party will not confess any Claim or make any
compromise in any case in which the Indemnifying Party will be asked to provide
indemnification, except with the Indemnifying Party's prior written consent. The
obligations of the parties hereto under this Article 10 shall survive the
termination of this Agreement.
10.4 Any claim for indemnification under this Agreement must be made
prior to the earlier of:
(a) one year after the Indemnifying Party becomes
aware of the event for which
indemnification is claimed; or
(b) one year after the earlier of the termination of this
Agreement or the expiration of the term of this Agreement.
10.5 Except for remedies that cannot be waived as a matter of law (and
injunctive or provisional relief), the provisions of this Article 10 shall be
FDISG's sole and exclusive remedy for claims or other actions or proceedings to
which the Fund's indemnification obligations pursuant to this Article 10 may
apply.
Article 11 Standard of Care.
11.1 FDISG shall at all times act in good faith and agrees to use its
best efforts within commercially reasonable limits to ensure the accuracy of all
services performed under this Agreement, but assumes no responsibility for loss
or damage to the Fund unless said errors are caused by FDISG's own negligence,
bad faith or willful misconduct or that of its employees.
11.2 Each party shall have the duty to mitigate damages for which the
other party may become responsible.
Article 12 Consequential Damages.
NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN NO EVENT
SHALL EITHER PARTY, ITS AFFILIATES OR ANY OF ITS OR THEIR DIRECTORS, OFFICERS,
EMPLOYEES, AGENTS OR SUBCONTRACTORS BE LIABLE FOR CONSEQUENTIAL DAMAGES.
Article 13 Term and Termination.
13.1 This Agreement shall be effective on the date first written above
and shall continue for a period of five (5) years (the "Initial Term"), unless
earlier terminated pursuant to the terms of this Agreement.
13.2 Either party may terminate this Agreement at the end of the
Initial Term upon not than less than sixty (60) days or more than one
hundred-eighty (180) days prior written notice to the other party.
13.3 This Agreement may be terminated by the Fund prior to the
expiration of the Initial Term in the event FDISG has failed to meet the
Performance Standards, as set forth in Exhibit 1-A to Schedule A, in three
consecutive quarters. The Fund will provide FDISG with sixty (60) days written
notice after the third consecutive quarter of FDISG's failure to meet the
Performance Standards if the Fund intends to exercise this option under this
Section 13.3. Notwithstanding the foregoing, the Fund's right under this Section
13.3 shall not be effective until ninety (90) days after FDISG has begun
providing services under this Agreement. In the event that the Administration
Agreement dated March 1, 1998 (the "Administration Agreement"), between FDISG
and the Fund is terminated by the Fund because of a breach by FDISG of certain
performance standards as provided in Section 7(b) of the Administration
Agreement, this Agreement may be terminated by the Fund upon sixty (60) days'
prior written notice to FDISG.
13.4 In the event a termination notice is given by the Fund, all
reasonable expenses associated with movement of records and materials and
conversion thereof to a successor transfer agent ("Conversion Costs") will be
borne by the Fund; provided, however, that in the event that such termination
notice is given as a result of a breach of the Performance Standards by FDISG
with respect to the services to be provided under this Agreement as outlined in
Section 13.3 of this Agreement or Section 7(b) of the Administration Agreement
or a material breach by FDISG of its duties and obligations hereunder as
outlined in Section 13.5 of this Agreement or Section 7(d) of the Administration
Agreement, the Conversion Costs shall be payable by FDISG.
13.4 If a party hereto is guilty of a material failure to perform its
duties and obligations hereunder (a "Defaulting Party") the other party (the
"Non-Defaulting Party") may give written notice thereof to the Defaulting Party,
and if such material breach shall not have been remedied within thirty (30) days
after such written notice is given, then the Non-Defaulting Party may terminate
this Agreement by giving thirty (30) days written notice of such termination to
the Defaulting Party. If FDISG is the Non-Defaulting Party, its termination of
this Agreement shall not constitute a waiver of any other rights or remedies of
FDISG with respect to services performed prior to such termination of rights of
FDISG to be reimbursed for out-of-pocket expenses. In all cases, termination by
the Non-Defaulting Party shall not constitute a waiver by the Non-Defaulting
Party of any other rights it might have under this Agreement or otherwise
against the Defaulting Party.
Article 14 Additional Portfolios
14.1 In the event that the Fund establishes one or more Portfolios in
addition to those identified in Exhibit 1, with respect to which the Fund
desires to have FDISG render services as transfer agent under the terms hereof,
the Fund shall so notify FDISG in writing, and if FDISG agrees in writing to
provide such services, Exhibit 1 shall be amended to include such additional
Portfolios.
Article 15 Confidentiality.
15.1 The parties agree that the Proprietary Information (defined below)
("Confidential Information") are confidential information of the parties and
their respective licensers. The Fund and FDISG shall exercise reasonable care to
safeguard the confidentiality of the Confidential Information of the other. The
Fund and FDISG may each use the Confidential Information only to exercise its
rights or perform its duties under this Agreement. The Fund and FDISG shall not
sell or disclose to others the Confidential Information of the other, in whole
or in part, without the prior written permission of the other party. The Fund
and FDISG may, however, disclose Confidential Information to its employees who
have a need to know the Confidential Information to perform work for the other,
provided that each shall use reasonable efforts to ensure that the Confidential
Information is not duplicated or disclosed by its employees in breach of this
Agreement. The Fund and FDISG may also disclose the Confidential Information to
independent contractors, auditors and professional advisors and as legally
required or requested by regulators. Notwithstanding the previous sentence, in
no event shall either the Fund or FDISG disclose the Confidential Information to
any competitor of the other without specific, prior written consent.
15.2 Proprietary Information means:
(a) any data or information that is sensitive material, and not
generally known to the public, including, but not limited to, information about
product plans, marketing strategies, finance, operations, customer
relationships, customer profiles, sales estimates, business plans, and internal
performance results relating to the past, present or future business activities
of the Fund or FDISG, their respective subsidiaries and affiliated companies and
the customers, clients and suppliers of any of them;
(b) any scientific or technical information, design, process,
procedure, formula, or improvement that is commercially valuable and secret in
the sense that its confidentiality affords the Fund or FDISG a competitive
advantage over its competitors; and
(c) all confidential or proprietary concepts, documentation,
reports, data, specifications, computer software, source code, object code, flow
charts, databases, inventions, know-how, show-how and trade secrets, whether or
not patentable or copyrightable.
15.3 Confidential Information may be memorialized in, without limitation,
documents, inventions, substances, engineering and laboratory notebooks,
drawings, diagrams, specifications, bills of material, equipment, prototypes or
models, and any other tangible manifestation of the foregoing of either party
which now exist or come into the control or possession of the other.
15.4 Each party acknowledges that breach of the restrictions on use,
dissemination or disclosure of any Confidential Information of the other party
would result in immediate and irreparable harm, and money damages would be
inadequate to compensate the other party for that harm. Each party shall be
entitled to equitable relief, in addition to all other available remedies, to
redress any such breach.
Article 16 Force Majeure.
No party shall be liable for any default or delay in the performance of
its obligations under this Agreement if and to the extent such default or delay
is caused, directly or indirectly, by (i) fire, flood, elements of nature or
other acts of God; (ii) any outbreak or escalation of hostilities, war, riots or
civil disorders in any country, (iii) any act or omission of the other party or
any governmental authority; (iv) any labor disputes (whether or not the
employees' demands are reasonable or within the party's power to satisfy); or
(v) nonperformance by a third party or any similar cause beyond the reasonable
control of such party, including without limitation, failures or fluctuations in
telecommunications or other equipment, provided such party shall have had
reasonable back-up equipment available. In any such event, the non-performing
party shall be excused from any further performance and observance of the
obligations so affected only for as long as such circumstances prevail and such
party continues to use commercially reasonable efforts to recommence performance
or observance as soon as practicable.
Article 17 Assignment and Subcontracting.
This Agreement, its benefits and obligations shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. This Agreement may not be assigned or otherwise transferred
by either party hereto, without the prior written consent of the other party,
which consent shall not be unreasonably withheld. With the consent of the Fund,
FDISG may engage subcontractors to perform any of the obligations contained in
this Agreement to be performed by FDISG.
Article 18 Notice.
Any notice or other instrument authorized or required by this Agreement
to be given in writing to the Fund or FDISG, shall be sufficiently given if
addressed to that party and received by it at its office set forth below or at
such other place as it may from time to time designate in writing.
To the Fund:
IBJ Funds Trust
One State Street
New York, New York 10004
Attention: President
with a copy to:
Baker & McKenzie
805 Third Avenue, 30th Floor
New York, New York 10022
Attention:
To FDISG:
First Data Investor Services Group, Inc.
4400 Computer Drive
Westboro, Massachusetts 01581
Attention: President
with a copy to FDISG's General Counsel at the same address
Article 19 Governing Law/Venue.
The laws of the State of New York, excluding the laws on conflicts of
laws, shall govern the interpretation, validity, and enforcement of this
agreement. All actions arising from or related to this Agreement shall be
brought in the state and federal courts sitting in the City of New York, and
FDISG and the Fund hereby submit themselves to the exclusive jurisdiction of
those courts.
Article 20 Counterparts.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original; but such counterparts shall, together,
constitute only one instrument.
Article 21 Captions.
The captions of this Agreement are included for convenience of
reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.
Article 22 Publicity.
Neither FDISG nor the Fund shall release or publish news releases,
public announcements, advertising or other publicity relating to this Agreement
or to the transactions contemplated by it without the prior review and written
approval of the other party; provided, however, that either party may make such
disclosures as are required by legal, accounting or regulatory requirements.
Article 23 Relationship of Parties.
23.1 The parties agree that they are independent contractors and not
partners or co-venturers and nothing contained herein shall be interpreted or
construed otherwise.
Article 24 Year 2000
FDISG warrants that all equipment and software provided by FDISG in
connection with the services rendered hereunder includes or shall include design
and performance capabilities so that prior to, during and after the calendar
year 2000, they will not malfunction, produce invalid or incorrect results, or
abnormally cease to function due solely to the year 2000 date change or any
other problematic dates, e.g. leap year, 9/9/1999. Such broader design and
performance capabilities shall include, without limitation, the ability to
recognize the century and manage and manipulate data involving dates, including
single century and multi-century formulas and date values, without resulting in
the generation of incorrect values involving such dates or causing an abnormal
ending; date data interfaces with functionalities and data fields that indicate
the century; and date-related functions that indicate the century. FDISG shall
upon request from time to time provide a status of the progress regarding this
provision.
Article 25 Entire Agreement; Severability.
25.1 This Agreement, including Schedules, Addenda, and Exhibits hereto,
constitutes the entire Agreement between the parties with respect to the subject
matter hereof and supersedes all prior and contemporaneous proposals,
agreements, contracts, representations, and understandings, whether written or
oral, between the parties with respect to the subject matter hereof. No change,
termination, modification, or waiver of any term or condition of the Agreement
shall be valid unless in writing signed by each party. A party's waiver of a
breach of any term or condition in the Agreement shall not be deemed a waiver of
any subsequent breach of the same or another term or condition.
25.2 The parties intend every provision of this Agreement to be
severable. If a court of competent jurisdiction determines that any term or
provision is illegal or invalid for any reason, the illegality or invalidity
shall not affect the validity of the remainder of this Agreement. In such case,
the parties shall in good faith modify or substitute such provision consistent
with the original intent of the parties. Without limiting the generality of this
paragraph, if a court determines that any remedy stated in this Agreement has
failed of its essential purpose, then all other provisions of this Agreement,
including the limitations on liability and exclusion of damages, shall remain
fully effective.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers, as of the day and year first above
written.
IBJ FUNDS TRUST
By:
Title:
FIRST DATA INVESTOR SERVICES GROUP, INC.
By:
Title:
<PAGE>
Exhibit 1
LIST OF PORTFOLIOS
The Reserve Money Market Fund
The Core Fixed Income Fund
The Core Equity Fund
The Blended Total Return Fund
<PAGE>
Schedule A
DUTIES OF FDISG
1. Shareholder Information. FDISG shall maintain a record of the number
of Shares held by each Shareholder of record which shall include name, address,
taxpayer identification numbers and which shall indicate whether such Shares are
held in certificates or uncertificated form.
2. Shareholder Services. FDISG shall respond as appropriate to all
inquiries and communications from Shareholders relating to Shareholder accounts
with respect to its duties hereunder and as may be from time to time mutually
agreed upon between FDISG and the Fund.
3. Share Certificates.
(a) At the expense of the Fund, the Fund shall supply FDISG
with an adequate supply of blank share certificates to meet FDISG requirements
therefor. Such Share certificates shall be properly signed by facsimile. The
Fund agrees that, notwithstanding the death, resignation, or removal of any
officer of the Fund whose signature appears on such certificates, FDISG or its
agent may continue to countersign certificates which bear such signatures until
otherwise directed by Written Instructions.
(b) FDISG shall issue replacement Share certificates in lieu
of certificates which have been lost, stolen or destroyed, upon receipt by FDISG
of properly executed affidavits and lost certificate bonds, in form satisfactory
to FDISG, with the Fund and FDISG as obligees under the bond.
(c) FDISG shall also maintain a record of each certificate
issued, the number of Shares represented thereby and the Shareholder of record.
With respect to Shares held in open accounts or uncertificated form (i.e., no
certificate being issued with respect thereto) FDISG shall maintain comparable
records of the Shareholders thereof, including their names, addresses and
taxpayer identification numbers. FDISG shall further maintain a stop transfer
record on lost and/or replaced certificates.
4. Mailing Communications to Shareholders; Proxy Materials. FDISG will
address and mail to Shareholders of the Fund, all reports to Shareholders,
dividend and distribution notices and proxy material for the Fund's meetings of
Shareholders. In connection with meetings of Shareholders, FDISG will prepare
Shareholder lists, mail and certify as to the mailing of proxy materials,
process and tabulate returned proxy cards, report on proxies voted prior to
meetings, act as inspector of election at meetings and certify Shares voted at
meetings.
5. Sales of Shares
(a) FDISG shall not be required to issue any Shares of the
Fund where it has received a Written Instruction from the Fund or official
notice from any appropriate authority that the sale of the Shares of the Fund
has been suspended or discontinued. The existence of such Written Instructions
or such official notice shall be conclusive evidence of the right of FDISG to
rely on such Written Instructions or official notice.
(b) In the event that any check or other order for the payment
of money is returned unpaid for any reason, FDISG will endeavor to: (i) give
prompt notice of such return to the Fund or its designee; (ii) place a stop
transfer order against all Shares issued as a result of such check or order; and
(iii) take such actions as FDISG may from time to time deem appropriate.
6. Transfer and Repurchase
(a) FDISG shall process all requests to transfer or redeem
Shares in accordance with the transfer or repurchase procedures set forth in the
Fund's Prospectus.
(b) FDISG will transfer or repurchase Shares upon receipt of
Oral or Written Instructions or otherwise pursuant to the Prospectus and Share
certificates, if any, properly endorsed for transfer or redemption, accompanied
by such documents as FDISG reasonably may deem necessary.
(c) FDISG reserves the right to refuse to transfer or
repurchase Shares until it is satisfied that the endorsement on the instructions
is valid and genuine. FDISG also reserves the right to refuse to transfer or
repurchase Shares until it is satisfied that the requested transfer or
repurchase is legally authorized, and it shall incur no liability for the
refusal, in good faith, to make transfers or repurchases which FDISG, in its
good judgment, deems improper or unauthorized, or until it is reasonably
satisfied that there is no basis to any claims adverse to such transfer or
repurchase.
(d) When Shares are redeemed, FDISG shall, upon receipt of the
instructions and documents in proper form, deliver to the Custodian and the Fund
or its designee a notification setting forth the number of Shares to be
repurchased. Such repurchased shares shall be reflected on appropriate accounts
maintained by FDISG reflecting outstanding Shares of the Fund and Shares
attributed to individual accounts.
(e) FDISG shall upon receipt of the monies provided to it by
the Custodian for the repurchase of Shares, pay such monies as are received from
the Custodian, all in accordance with the procedures described in the written
instruction received by FDISG from the Fund.
(f) FDISG shall not process or effect any repurchase with
respect to Shares of the Fund after receipt by FDISG or its agent of
notification of the suspension of the determination of the net asset value of
the Fund.
7. Dividends
(a) Upon the declaration of each dividend and each capital
gains distribution by the Board of Directors of the Fund with respect to Shares
of the Fund, the Fund shall furnish or cause to be furnished to FDISG Written
Instructions setting forth the date of the declaration of such dividend or
distribution, the ex-dividend date, the date of payment thereof, the record date
as of which Shareholders entitled to payment shall be determined, the amount
payable per Share to the Shareholders of record as of that date, the total
amount payable on the payment date and whether such dividend or distribution is
to be paid in Shares at net asset value.
(b) On or before the payment date specified in such resolution
of the Board of Directors, the Fund will provide FDISG with sufficient cash to
make payment to the Shareholders of record as of such payment date.
(c) If FDISG does not receive sufficient cash from the Fund to
make total dividend and/or distribution payments to all Shareholders of the Fund
as of the record date, FDISG will, upon notifying the Fund, withhold payment to
all Shareholders of record as of the record date until sufficient cash is
provided to FDISG.
8. In addition to and neither in lieu nor in contravention of the
services set forth above, FDISG shall: (i) perform all the customary services of
a transfer agent, registrar, dividend disbursing agent and agent of the dividend
reinvestment and cash purchase plan as described herein consistent with those
requirements in effect as at the date of this Agreement. The detailed
definition, frequency, limitations and associated costs (if any) set out in
Schedule B, include but are not limited to: maintaining all Shareholder
accounts, preparing Shareholder meeting lists, mailing proxies, tabulating
proxies, mailing Shareholder reports to current Shareholders, withholding taxes
on U.S. resident and non-resident alien accounts where applicable, preparing and
filing U.S. Treasury Department Forms 1099 and other appropriate forms required
with respect to dividends and distributions by federal authorities for all
Shareholders.
<PAGE>
Schedule B
FEE SCHEDULE
1. Standard Fees
$20,000 per Portfolio per annum
2. Programming Costs
(a) Dedicated Team:
Programmer $100,000 per annum
BSA $ 85,000 per annum
Tester $ 65,000 per annum
(b) System Enhancements (Non Dedicated Team):
Programmer $135.00 per hour
The above rates are subject to an annual 5% increase after the one year
anniversary of the effective date of this
Agreement.
3. PRINT/MAIL CHARGES [TO BE CONFIRMED]
<TABLE>
<CAPTION>
<S> <C> <C>
Work Order $7.00 per work order
Daily Work (Confirms)
Hand $71/M with $75.00 minimum
$0.07/each insert (BRE & CRE have no
charge)
Machine $42/M with $50.00 minimum
$0.003/each insert (BRE & CRE have no
charge)
Daily Checks
Hand $71/M with $100.00 minimum daily
$0.08/each insert (BRE & CRE have no
charge)
Machine $42/M with $75.00 minimum daily
$0.003/each insert (BRE & CRE have no
charge)
There is a $2.50 charge for each Form 3606 sent.
Statements
Hand $78/M with $75.00 minimum
$0.08/each insert (BRE & CRE have no
charge)
Machine $52/M with $75.00 minimum
$0.003/each insert (BRE & CRE have no
charge)
$58/M for intelligent inserting
Periodic Checks
Hand $78/M with $100.00 minimum
$0.08/each insert (BRE & CRE have no
charge)
Machine $52/M with $100.00 minimum
$0.01/each insert (BRE & CRE have no
charge)
12b-1/Dealer Commission
Checks/Statements $0.78/each envelope with $100.00 minimum
Spac Reports/Group Statements $78/M with $75.00 minimum
Messaging $20/message
Listbills $0.78 per envelope with $75.00 minimum
Printing Charges $0.08/confirm/statement/page
$0.10/check
Folding (Machine) $18/M
Folding (Hand) $.12 each
Presort Charge $0.277 postage rate
$0.035/piece
Courier Charge $15.00 for each on call courier trip/
or actual cost for on demand
Overnight Charge $3.50/package service charge plus
Federal Express/Airborne charge
Inventory Charge $20.00 for each inventory location as of
the 15th of the month
Hourly Work: Special Projects,
Opening Envelopes, etc. $24.00/hour
Special Pulls $2.50 per account pull
Boxes/Envelopes
Shipping Boxes $0.85 each
Oversized Envelopes $0.45 each
Forms Development/Programming Fee $100.00/hour
Cutting Charges $10.00/M
</TABLE>
<PAGE>
Schedule C
OUT-OF-POCKET EXPENSES
The Fund shall reimburse FDISG monthly for applicable out-of-pocket
expenses, including the following items:
Microfiche/microfilm production
Magnetic media tapes and freight
Printing costs, including certificates, envelopes, checks and
stationery Postage (bulk, pre-sort, ZIP+4, barcoding, first
class) direct pass through to the Fund Due diligence mailings
Telephone and telecommunication costs
Ad hoc reports as approved by the Fund Proxy solicitations,
mailings and tabulations Daily & Distribution advice mailings
Shipping, Certified and Overnight mail and insurance Year-end
form production and mailings Duplicating services Courier
services Incoming and outgoing wire charges Federal Reserve
charges for check clearance Overtime, as approved by the Fund
Temporary staff, as approved by the Fund Travel and
entertainment, as approved by the Fund
Record retention, retrieval and destruction costs, including, but
not limited to exit fees charged by third party record keeping
vendors
Third party audit reviews
Ad hoc SQL time as approved by the Fund
The Fund agrees that postage and mailing expenses will be paid on the
day of or prior to mailing as agreed with FDISG. In addition, the Fund will
promptly reimburse FDISG for any other unscheduled expenses incurred by FDISG
whenever the Fund and FDISG mutually agree that such expenses are not otherwise
properly borne by FDISG as part of its duties and obligations under the
Agreement.
<PAGE>
g:\shared\clients\ibj\peas\1998\pea#5\exh15bdoc
g:\shared\clients\ibj\peas\1998\pea#5\exh15b.doc
Schedule D
FUND DOCUMENTS
Certified copy of the Articles of Incorporation of the Fund,
as amended
Certified copy of the By-laws of the Fund, as amended,
Copy of the resolution of the Board of Directors authorizing
the execution and delivery of this
Agreement
Specimens of the certificates for Shares of the Fund, if
applicable, in the form approved by the Board of Directors of the
Fund, with a certificate of the Secretary of the Fund as to such
approval
All account application forms and other documents relating to
Shareholder accounts or to any plan, program or service offered by
the Fund
Certified list of Shareholders of the Fund with the name, address
and taxpayer identification number of each Shareholder, and the
number of Shares of the Fund held by each, certificate numbers and
denominations (if any certificates have been issued), lists of any
accounts against which stop transfer orders have been placed,
together with the reasons therefor, and the number of Shares
redeemed by the Fund
All notices issued by the Fund with respect to the Shares in
accordance with and pursuant to the Articles of Incorporation or
By-laws of the Fund or as required by law and notices of any
special or annual meetings of shareholders and any other notices
required.
<PAGE>
Exhibit 1-A to Schedule A
Performance Standards
Pursuant to Section 3.3 of this Agreement, FDISG has agreed to perform
the services described in this Agreement in accordance with the Performance
Standards set forth in this Exhibit 1 to Schedule A. The parties agree that the
measurement of the Performance Standards will not begin until ninety (90) days
after FDISG has begun providing services under this Agreement. The parties agree
that each quarterly period, as described below, will be measured on a rolling
three calendar month period. The parties agree that such Performance Standards,
which are described below, may be revised from time to time upon the mutual
agreement of the parties. The parties agree that any new Funds that may be added
to the Fund from time to time will be entitled to similar Performance Standards
and measuring periods.
(a) In the event that FDISG fails to meet a particular Performance
Standard category in any particular quarter, the Fund will provide FDISG with
written notice of such failure, and FDISG agrees to take appropriate corrective
action as soon as reasonably possible.
(b) In the event that FDISG fails to meet a particular Performance
Standard category (except for any failure due to circumstances beyond its
control) in two (2) consecutive quarters, the fee payable to FDISG hereunder for
such service shall be reduced by ten percent (10%) for the second of those two
quarters.
(c) In the event that FDISG fails to meet a particular Performance
Standard category (except for any failure due to circumstances beyond its
control) for any three (3) consecutive quarters, the Fund shall have the right
to terminate this Agreement upon sixty (60) days' written notice to FDISG.
(d) Compliance with the Performance Standards shall be measured
quarterly based on the average performance during that quarter. In the event
that volumes shall exceed 500 wires per day, compliance with the Performance
Standards shall then be measured monthly based on the average performance during
that month. A month shall be defined as a calendar month.
(e) The Performance Standards shall be as follows:
SEE ATTACHED
March 25, 1998
IBJ Funds Trust
237 Park Avenue
New York, NY 10017
Re: IBJ Funds Trust
Registration No. 33-83430
File No. 811-8738
Dear Sir or Madam:
As counsel to the IBJ Funds Trust (the "Trust"), we have
reviewed Post-Effective Amendment No. 5 to the Trust's Registration Statement on
Form N-1A (the "Amendment"). The Amendment is being filed pursuant to Rule 485
of the 1933 Act and it is proposed that it will become effective immediately
upon filing pursuant to paragraph (b).
Based on our review, it is our view that the Amendment does
not include disclosure which we believe would render it ineligible to become
effective under paragraph (b) of Rule 485.
In addition, it is our opinion that the securities being
registered hereunder will, when sold, be legally issued, fully paid and
non-assessable, and we hereby consent to the reference to our firm as Counsel in
this Amendment.
Very truly yours,
/s/BAKER & McKENZIE
BAKER & McKENZIE
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Post-Effective Amendment
No. 5 to the Registration Statement of IBJ Funds Trust on Form N-1A (File No.
33-83430) of our report dated January 19, 1998 on our audits of the financial
statements and financial highlights of IBJ Funds Trust (comprising,
respectively, the IBJ Reserve Money Market Fund, IBJ Core Fixed Income Fund, IBJ
Core Equity Fund, and IBJ Blended Total Return Fund), which report is included
in the Annual Report to Shareholders for the year ended November 30, 1997 which
is incorporated by reference in Post-Effective Amendment No. 5 to the
Registration Statement. We also consent to the reference to our Firm under the
captions "Financial Highlights" in the Prospectuses and "Independent Auditors"
and "Financial Statements" in the Statement of Additional Information in this
Post-Effective Amendment No. 5 to the Registration Statement of IBJ Funds Trust
on Form N-1A (File No. 33-83430).
\s\Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
Columbus, Ohio
March 27, 1998
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption
"Independent Auditors" in this Registration Statement (Form N-1A
No. 33-83430) of IBJ Funds Trust.
/s/Ernst & Young LLP
Ernst & Young LLP
New York, New York
March 27, 1998
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose name appears
below nominates, constitutes and appoints Brigid O. Bieber and Elizabeth A.
Russell (with full power to each of them to act alone) his or her true and
lawful attorney-in-fact and agent, for him or her and on his or her behalf and
in his or her place and stead in any and all capacities, to make execute and
sign all amendments and supplements to the Registration Statement on Form N-1A
under the Securities Act of 1933 and the Investment Company Act of 1940 of the
IBJ Funds Trust (the "Trust"), and to file with the Securities and Exchange
Commission, and any other regulatory authority having jurisdiction over the
offer and sale of shares of beneficial interest of each Fund of the Trust, and
any and all amendments and supplements to such Registration Statement, and any
and all exhibits and other documents requisite in connection therewith, granting
unto said attorneys and each of them, full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and about the
premises as fully to all intents and purposes as the undersigned officers
themselves might or could do.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands this
17th day of March, 1998.
/s/ Robert H. Dunker
Robert H. Dunker
Trustee
/s/ Stephen V.R. Goodhue
Stephen V.R. Goodhue
Trustee
/s/ Edward F. Ryan
Edward F. Ryan
Trustee
/s/ George H. Stewart
George H. Stewart
Trustee and Chairman
/s/ Jylanne Dunne
Jylanne Dunne
President
/s/ Steven Levy
Steven Levy
Treasurer
<PAGE>
SECRETARY'S CERTIFICATE
I, Brigid O. Bieber, Secretary of IBJ Funds Trust (the "Trust"), hereby
certify that the following resolution was unanimously adopted by the Board of
Trustees of the Trust at a meeting duly held on March 17, 1998 and that as of
this date said resolution is still in full force and effect:
RESOLVED: That the Board Members hereby approve the
power of attorney authorizing Brigid O.
Bieber and Elizabeth A. Russell to execute
and sign on behalf of each of the Chief
Executive Officer and Chief Financial and
Accounting Officer of the Trust, all
amendments and supplements to the Trust's
Registration Statement on Form N-1A.
HEREUNTO I set my hand this 27th day of March, 1998.
/s/Brigid O. Bieber
Brigid O. Bieber, Secretary
IBJ Funds Trust
Form of
RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT (PREMIUM CLASS)
IBJ FUNDS TRUST
4400 Computer Drive
Westborough, Massachusetts 01581
March 1, 1998
First Data Distributors, Inc.
4400 Computer Drive
Westborough, Massachusetts 01581
Dear Sirs or Madams:
This will confirm the agreement between IBJ Funds Trust (the
"Trust") and First Data Distributors, Inc.(the "Distributor") as follows:
1. Definitions. 2. The Trust is an open-end management investment
company organized under the laws of the State of Delaware. The Trust is
registered under the Investment Company Act of 1940, as amended (the "Act"). The
Trust's shares of beneficial interest may be classified into series in which
each series represents the entire undivided interests of a separate portfolio of
assets. Each series may be divided into multiple classes. For all purposes of
this Agreement and Plan, a "Fund" shall mean a separate portfolio of assets of
the Trust which has entered into a Rule 12b-1 Distribution Plan and Agreement
Supplement, and a "Series" shall mean the series of shares of beneficial
interest representing undivided interests in a Fund. All references herein to
this Agreement and Plan shall be deemed to be references to this Agreement and
Plan as it may from time to time be supplemented by Rule 12b- 1 Distribution
Plan and Agreement Supplements.
3. As permitted by Rule 12b-1 (the "Rule") under the Act, the Trust has
adopted a Distribution Plan and Agreement (the "Plan") for the Premium Class of
Shares of each Fund pursuant to which the Trust may make certain payments to the
Distributor for direct and indirect expenses incurred in connection with the
distribution of shares of the Funds. The Trust's Board of Trustees has
determined that there is a reasonable likelihood that the Plan, if implemented,
will benefit each Fund and its shareholders.
4. Adoption of Plan. The Trust hereby adopts this Plan, and the parties
hereto enter into this Plan, on the terms and conditions specified herein.
5. Distribution-Related Fee.
(a) For Premium Class Shares the trust shall pay the
Distributor on the first business day of each month in such an amount as the
Distributor may have requested for distribution activities, provided that each
such payment shall not exceed an annual rate of 0.35% of the average daily value
of a Fund's net assets (as determined on each business day at the time set forth
in the Trust's currently effective prospectus for determining net asset value
per share) during the preceding month in which the Plan is implemented.
(b) For purposes of calculating the maximum of each such
monthly fee, the value of a Fund's net assets shall be computed in the manner
specified in the Trust's Declaration of Trust, dated August 25, 1994 and in the
Trust's Prospectus or Prospectuses. All expenses incurred by the Trust hereunder
shall be charged against such Fund's assets. For purposes of this Plan, a
"business day" is any day the New York Stock Exchange is open for trading.
6. Purposes of Payments.
(a) The Distributor must use all amounts received under the
Plan for (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 in connection with the distribution of 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 institution has a distributing
relationship, (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 and administrative services support which may be incurred
by broker-dealers, banks or other financial institutions, and (vii) other direct
and indirect distribution-related activities, including the provision of
services with respect to maintaining the assets of the Funds.
(b) The services rendered by the Distributor hereunder are in
addition to the distribution and administrative services reasonably necessary
for the operation of the Trust and the Fund pursuant to the Master
Administrative Services Contract between the Trust and IBJ Funds Distributor,
Inc. and the Master Distribution Contract between the Trust and the Distributor,
other than those services which are to be provided by the investment adviser
pursuant to the Master Investment Advisory Agreement between the Trust and IBJ
Schroder Bank & Trust Company.
7. Related Agreements. All other agreements relating to the
implementation of this Plan (the "related agreements") shall be in writing, and
such related agreements shall be subject to termination, without penalty, on not
more than sixty days' written notice to any other party to the agreement, in
accordance with the provisions of clauses (a) and (b) of paragraph 9 hereof.
8. Approvals by Trustees and Shareholders. This Plan shall become
effective upon approval by (a) a majority of the Board of Trustees of the Trust
for each Fund, including a majority of the Trustees who are not "interested
persons" (as defined in the Act) of the Trust and who have no direct or indirect
financial interest in the operation of the Plan or in any related agreements
(the "Plan Trustees"), pursuant to a vote cast in person at a meeting called for
the purpose of voting on the Plan, and (b) the holders of a majority of the
outstanding securities of a Fund (as defined in the Act). Related agreements
shall be subject to approval by the Trustees in the manner provided in clause
(a) of the preceding sentence.
9. Duration and Annual Approval by Trustees. This Plan and any related
agreements shall continue in effect for a period of more than one year from the
date of their adoption or execution, provided such continuances are approved
annually by a majority of the Board of Trustees, including a majority of the
Plan Trustees, pursuant to a vote east in person at a meeting called for the
purpose of voting on the continuance of this Plan or any related agreement.
10. Amendments. This Plan may be amended at any time with the approval
of a majority of the Board of Trustees, provided that (a) any material amendment
of this Plan must be approved by the Trustees in accordance with procedures set
forth in paragraph 7 hereof, and (b) any amendment to increase materially the
amount to be expended by the Fund pursuant to this Plan must also be approved by
the vote of the holders of a majority of the outstanding voting securities of
the Fund (as defined in the Act), provided that no approval shall be required in
respect of a Rule 12b-1 Distribution Plan and Agreement Supplement entered into
to add a Fund to those covered by this Plan (or to amend or terminate such
supplement) by the holders of the outstanding voting securities of any Series
other than that of such Fund.
11. Termination. This Plan may be terminated at any time, without the
payment of any penalty, by (a) the vote of a majority of the Plan Trustees or
(b) the vote of the holders of a majority of the outstanding voting securities
of a Fund (as defined in the Act). If this Plan is terminated with respect to
any Fund, it shall nonetheless remain in effect with respect to any remaining
Funds.
12. Selection and Nomination of Trustees. While this Plan is in effect,
the selection and nomination of the Trustees who are not "interested persons" of
the Trust (as defined in the Act) shall be committed to the discretion of the
Trustees then in office who are not "interested persons" of the Trust.
13. Effect of Assignment. To the extent that this Plan constitutes a
plan of distribution adopted pursuant to the Rule, it shall remain in effect as
such so as to authorize the use of the Fund's assets in the amounts and for the
purposes set forth herein, notwithstanding the occurrence of an assignment (as
defined in the Act). To the extent this Plan concurrently constitutes an
agreement relating to implementation of the plan of distribution, it shall
terminate automatically in the event of its assignment, and the Trust may
continue to make payments pursuant to this Plan only (a) upon the approval of
the Board of Trustees in accordance with the procedures set forth in paragraph 7
hereof, and (b) if the obligations of the Distributor under this Plan are to be
performed by any organization other than the Distributor, upon such
organization's adoption and assumption in writing of all provisions of this Plan
as party hereto.
14. Quarterly Reports to Trustees. The Distributor shall prepare and
furnish to the Board of Trustees, at least quarterly, a written report setting
forth all amounts expended pursuant to this Plan and any related agreements and
the purposes for which such expenditures were made. The written report shall
include a detailed description of the continuing services provided by
broker-dealers and other financial intermediaries pursuant to paragraph 4 of
this Plan.
15. Preservation of Records. The Trust shall preserve copies of this
Plan, any related agreements and any reports made pursuant to this Plan for a
period of not less than six years from the date of this Plan or any such related
agreement or report. For the first two years, copies of such documents shall be
preserved in an easily accessible place.
16. Limitations on Liability of Distributor. The Distributor shall give
the Trust the benefit of the Sponsor's best judgment and efforts in rendering
services under this Plan. As an inducement to the Distributor's undertaking to
render these services, the Trust agrees that the Distributor shall not be liable
under this Plan for any mistake in judgment or in any other event whatsoever
except for lack of good faith, provided that nothing in this Plan shall be
deemed to protect or purport to protect the Distributor against any liability to
the Trust or its shareholders to which the Distributor would otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence in the
performance of the Distributor's duties under this Plan or by reason of the
Distributor's reckless disregard of its obligations and duties hereunder.
17. Other Distribution-Related Expenditures. Nothing in this Plan shall
operate or be construed to limit the extent to which the Distributor or any
other person other than the Trust may incur costs and pay expenses associated
with the distribution of Fund shares.
18. Miscellaneous. The Trust's Certificate of Trust, dated as of August
25, 1994, as amended, is on file with the Secretary of State of the State of
Delaware. The obligations of the Trust are not personally binding upon, nor
shall resort be had to the private property of any of the Trustees,
shareholders, officers, employees or agents of the Trust, but only the Trust's
property shall be bound.
IN WITNESS WHEREOF, each of the parties has caused this
instrument to be executed in its name and on its behalf by its duly authorized
representative as of the date first above written.
Very truly yours,
IBJ FUNDS TRUST
By:___________________________
Title:
FIRST DATA DISTRIBUTORS, INC.
By:___________________________
Title:
Form of
RESERVE MONEY MARKET FUND
(Premium Class)
A Series of IBJ Funds Trust
4400 Computer Drive
Westborough, Massachusetts 01518
March 1, 1998
First Data Funds Distributors, Inc.
4400 Computer Drive
Westborough, Massachusetts 01518
Rule 12b-1 Distribution Plan and Agreement Supplement
Dear Sirs or Madams:
This will confirm the agreement between IBJ Funds Trust (the
"Trust") and First Data Distributors, Inc. (the "Distributor") as follows:
The Reserve Money Market Fund (the "Fund") is a series
portfolio of the Trust which has been organized as a business trust under the
laws of the State of Delaware and is an open-end management investment company.
The Trust and the Distributor have entered into a Rule 12b-1 Distribution Plan
and Agreement, dated March 1, 1998(as from time to time amended and
supplemented, the "Master Agreement"), pursuant to which the Distributor has
agreed to pay broker-dealers and other financial intermediaries for rendering
certain distribution related services, as more fully set forth therein. Certain
capitalized terms used without definition in this Supplement have the meaning
specified in the Master Agreement.
The Trust agrees with the Sponsor as follows:
19. Adoption of Master Agreement. The Master Agreement is hereby
adopted for the Premium Class of Shares of the Fund. The Fund shall be one of
the "Funds" referral to in the Master Agreement; and its Premium shares shall be
a "Series" of shares as referred to therein.
20. Payment of Fees. Payments pursuant to the Master Agreement and this
Supplement are paid in accordance with paragraph 3 of the Master Agreement and
at an annual rate not in excess of 0.35% of the average daily value of the net
assets of Reserve Money Market Fund.
If the foregoing correctly sets forth the agreement between
the Trust and the Distributor, please so indicate by signing and returning to
the Trust the enclosed copy hereof.
Very truly yours,
RESERVE MONEY MARKET FUND,
a Series of IBJ Funds Trust
By:__________________________
Title:
The foregoing Plan and Agreement is hereby agreed to as of the date hereof:
FIRST DATA DISTRIBUTORS, INC.
By:________________________
Title:
<PAGE>
Form of
THE CORE FIXED INCOME FUND
(Premium Class)
A Series of IBJ Funds Trust
4400 Computer Drive
Westborough, Massachusetts 01581
March 1, 1998
First Data Distributors, Inc.
4400 Computer Drive
Westborough, Massachusetts 01581
Rule 12b-1 Distribution Plan and Agreement Supplement
Dear Sirs or Madams:
This will confirm the agreement between IBJ Funds Trust (the
"Trust") and First Data Distributors, Inc. (the "Distributor") as follows:
The Core Fixed Income Fund (the "Fund") is a series portfolio
of the Trust which has been organized as a business trust under the laws of the
State of Delaware and is an open-end management investment company. The Trust
and the Distributor have entered into a Rule 12b-1 Distribution Plan and
Agreement, dated March 1, 1998 (as from time to time amended and supplemented,
the "Master Agreement"), pursuant to which the Distributor has agreed to pay
broker-dealers and other financial intermediaries for rendering certain
distribution related services, as more fully set forth therein. Certain
capitalized terms used without definition in this Supplement have the meaning
specified in the Master Agreement.
The Trust agrees with the Sponsor as follows:
21. Adoption of Master Agreement. The Master Agreement is hereby
adopted for the Fund. The Fund shall be one of the "Funds" referral to in the
Master Agreement; and its shares shall be a "Series" of shares as referred to
therein.
22. Payment of Fees. Payments pursuant to the Master Agreement and this
Supplement are paid in accordance with paragraph 3 of the Master Agreement and
at an annual rate not in excess of 0.35% of the average daily value of the net
assets of The Core Fixed Income Fund.
If the foregoing correctly sets forth the agreement between
the Trust and the Distributor, please so indicate by signing and returning to
the Trust the enclosed copy hereof.
Very truly yours,
THE CORE FIXED INCOME FUND,
a Series of IBJ Funds Trust
By:_________________________
Title:
The foregoing Plan and Agreement is hereby agreed to as of the date hereof:
First Data Distributors, Inc.
By:________________________
Title:
<PAGE>
Form of
CORE EQUITY FUND
(Premium Class)
A Series of IBJ Funds Trust
4400 Computer Drive
Westborough, Massachusetts 01581
March 1, 1998
First Data Distributors, Inc.
4400 Computer Drive
Westborough, Massachusetts 01581
Rule 12b-1 Distribution Plan and Agreement Supplement
Dear Sirs or Madams:
This will confirm the agreement between IBJ Funds Trust (the
"Trust") and First Data Distributors, Inc.(the "Distributor") as follows:
The Core Equity Fund (the "Fund") is a series portfolio of the
Trust which has been organized as a business trust under the laws of the State
of Delaware and is an open-end management investment company. The Trust and the
Distributor have entered into a Rule 12b-1 Distribution Plan and Agreement,
dated March 1, 1998 (as from time to time amended and supplemented, the "Master
Agreement"), pursuant to which the Distributor has agreed to pay broker-dealers
and other financial intermediaries for rendering certain distribution related
services, as more fully set forth therein. Certain capitalized terms used
without definition in this Supplement have the meaning specified in the Master
Agreement.
The Trust agrees with the Sponsor as follows:
23. Adoption of Master Agreement. The Master Agreement is hereby
adopted for the Fund. The Fund shall be one of the "Funds" referral to in the
Master Agreement; and its shares shall be a "Series" of shares as referred to
therein.
24. Payment of Fees. Payments pursuant to the Master Agreement and this
Supplement are paid in accordance with paragraph 3 of the Master Agreement and
at an annual rate not in excess of 0.35% of the average daily value of the net
assets of Core Equity Fund.
If the foregoing correctly sets forth the agreement between
the Trust and the Distributor, please so indicate by signing and returning to
the Trust the enclosed copy hereof.
Very truly yours,
CORE EQUITY FUND,
a Series of IBJ Funds Trust
By:_________________________
Title:
The foregoing Plan and Agreement is hereby agreed to as of the date hereof:
First Data Distributors, Inc.
By:________________________
Title:
<PAGE>
g:\shared\clients\ibj\peas\1998\pea#5\face-tie.doc 10
Form of
THE BLENDED TOTAL RETURN FUND
(Premium Class)
A Series of IBJ Funds Trust
4400 Computer Drive
Westborough, Massachusetts 01581
March 1, 1998
First Data Distributors, Inc.
4400 Computer Drive
Westborough, Massachusetts 01581
Rule 12b-1 Distribution Plan and Agreement Supplement
Dear Sirs or Madams:
This will confirm the agreement between IBJ Funds Trust (the
"Trust") and First Data Distributors, Inc.(the "Distributor") as follows:
The Blended Total Return Fund(the "Fund") is a series
portfolio of the Trust which has been organized as a business trust under the
laws of the State of Delaware and is an open-end management investment company.
The Trust and the Distributor have entered into a Rule 12b-1 Distribution Plan
and Agreement, dated March 1, 1998 (as from time to time amended and
supplemented, the "Master Agreement"), pursuant to which the Distributor has
agreed to pay broker-dealers and other financial intermediaries for rendering
certain distribution related services, as more fully set forth therein. Certain
capitalized terms used without definition in this Supplement have the meaning
specified in the Master Agreement.
The Trust agrees with the Sponsor as follows:
25. Adoption of Master Agreement. The Master Agreement is hereby
adopted for the Fund. The Fund shall be one of the "Funds" referral to in the
Master Agreement; and its shares shall be a "Series" of shares as referred to
therein.
26. Payment of Fees. Payments pursuant to the Master Agreement and this
Supplement are paid in accordance with paragraph 3 of the Master Agreement and
at an annual rate not in excess of 0.35% of the average daily value of the net
assets of The Blended Total Return Fund.
If the foregoing correctly sets forth the agreement between
the Trust and the Distributor, please so indicate by signing and returning to
the Trust the enclosed copy hereof.
Very truly yours,
THE BLENDED TOTAL RETURN FUND,
a Series of IBJ Funds Trust
By:___________________________
Title:
The foregoing Plan and Agreement is hereby agreed to as of the date hereof:
First Data Distributors, Inc.
By:________________________
Title:
Form of
SERVICING ORGANIZATION AGREEMENT
(PREMIUM CLASS)
SERVICE ORGANIZATION AGREEMENT, dated as of ________________,
by and between IBJ Funds Trust (the "Trust"), a Delaware business trust, and
__________________________ (the "Financial Institution"), as a shareholder
servicing agent hereunder (the "Agent") relating to transactions in Premium
Class shares of capital stock, $0.001 par value (the "Shares"), of any of the
existing investment portfolios offered by the Trust (the "Funds"). In the event
that the Trust establishes one or more portfolios other than the Funds with
respect to which it decides to retain the Financial Institution hereunder, the
Trust shall promptly notify the Financial Institution in writing. If the
Financial Institution is willing to render such services, it shall notify the
Trust in writing whereupon such portfolio shall become a Fund hereunder.
The Trust and the Financial Institution hereby agree as
follows:
1. Appointment. The Financial Institution, as Agent, hereby
agrees to perform certain services for its customers (the "Customers") as
hereinafter set forth. The Agent's appointment hereunder is non-exclusive, and
the parties recognize and agree that, from time to time, the Trust may enter
into other shareholder servicing agreements, in writing, with other financial
institutions.
2. Services to be Performed. The Agent, as agent for its
Customers, shall be responsible for performing shareholder administrative
support services, which will include the following: (i) answering customer
inquiries regarding account status and history, the manner in which purchases,
exchanges and redemptions of shares of the Funds may be effected and certain
other matters pertaining to the Funds; (ii) assisting shareholders in
designating and changing dividend options, account designations and addresses;
(iii) providing necessary personnel and facilities to establish and maintain
shareholder accounts and records; (iv) assisting in aggregating and processing
purchase, exchange and redemption transactions; (v) placing net purchase and
redemption orders with the Trust's distributor; (vi) arranging for wiring of
funds; (vii) transmitting and receiving funds in connection with customer orders
to purchase or redeem shares; (viii) processing dividend payments; (ix)
verifying and guaranteeing shareholder signatures in connection with redemption
orders and transfers and changes in shareholder-designated accounts, as
necessary; (x) providing periodic statements showing a customer's account
balance and, to the extent practicable, integrating such information with other
customer transactions otherwise effected through or with the Shareholder
Servicing Agent; (xi) furnishing (either separately or on an integrated basis
with other reports sent to a shareholder by a Shareholder Servicing Agent)
monthly and year-end statement and confirmations of purchases, exchanges and
redemptions; (xii) transmitting on behalf of the Trust, proxy statements annual
reports, updating prospectuses and other communications from the Trust to the
shareholders of the Funds; (xiii) receiving, tabulating and transmitting to the
Trust proxies executed by shareholders with respect to meetings of shareholders
of the Funds; and (xiv) providing such other related services as the Trust or a
shareholder may request.
The Agent shall provide all personnel and facilities necessary
in order for it to perform the functions described in this paragraph with
respect to its Customers.
3. Fees.
3.1. Fees from the Trust. In consideration for
the services described in Section 2
hereof and the incurring of expenses in connection therewith, the Agent shall
receive a fee, computed daily and payable monthly, at the annual rate of 0.50 of
1% of the average daily net asset value of Premium Class Shares of each Fund
3.2. Fees from Customers. It is agreed that the
Financial Institution may impose
certain conditions on Customers, in addition to or different from those imposed
by the Trust, such as requiring a minimum initial investment or imposing
limitations on the amounts of transactions. It is also understood that the
Financial Institution may directly credit or charge fees to Customers in
connection with an investment in the Funds. The Financial Institution shall
credit or bill Customers directly for such credits or fees. In the event the
Financial Institution charges Customers such fees, it shall make appropriate
prior written disclosure (such disclosure to be in accordance with all
applicable laws) to Customers both of any direct fees charged to the Customer
and of the fees received or to be received by it from the Trust pursuant to
Section 3.1 of this Agreement. It is understood however, that in no event shall
the Financial Institution have recourse or access as Agent or otherwise to the
account of any shareholder of the Trust except to the extent expressly
authorized by law or by such shareholder, or to any assets of the Trust, for
payment of any direct fees referred to in this Section 3.2.
4. Approval of Materials to be Circulated. Advance copies or
proofs of all materials which are to be generally circulated or disseminated by
the Agent to Customers or prospective Customers which identify or describe the
Trust shall be provided to the Trust at least 10 days prior to such circulation
or dissemination (unless the Trust consents in writing to a shorter period), and
such materials shall not be circulated or disseminated or further circulated or
disseminated at any time after the Trust shall have given written notice to the
Agent of any objection thereto.
Nothing in this Section 4 shall be construed to make the Trust
liable for the use of any information about the Trust which is disseminated by
the Agent.
5. Compliance with Laws, etc. The Agent shall comply with all
applicable federal and state laws and regulations in the performance of its
duties under this Agreement, including securities laws.
6. Limitation of Agent's Liability. In consideration of the
Agent's undertaking to render the services described in this Agreement, the
Trust agrees that the Agent shall not be liable under this Agreement for any
error of judgment or mistake of law or for any loss suffered by the Trust in
connection with the performance of this Agreement, provided that nothing in this
Agreement shall be deemed to protect or purport to protect the Agent against any
liability to the Trust or its stockholders to which the Agent would otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence in the
performance of the Agent's duties under this Agreement or by reason of the
Agent's reckless disregard of its obligations and duties hereunder.
7. Indemnification. The Trust agrees to indemnify and hold
harmless the Agent from all taxes, charges, expenses, assessments, claims and
liabilities (including, without limitation, liabilities arising under the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the Investment Company Act of 1940, as amended (the "1940 Act"), and
any state and foreign securities and blue sky laws, all as or to be amended from
time to time) and expenses, including attorneys' fees and disbursements arising
directly or indirectly from (i) any misstatements or omissions in the Trust's
Prospectus, or (ii) any action or thing which the Agent takes or does or omits
to take or do reasonably believed by the Agent to be at the request or direction
or in reliance on the advice or instructions, whether oral or written, of the
Trust provided, that the Agent shall not be indemnified against any liability to
the Trust or to its shareholders (or any expenses incident to such liability)
arising out of the Agent's own willful misfeasance, bad faith or gross
negligence in the performance of its duties hereunder or by reason of its
reckless disregard of its obligations and duties hereunder. In order that the
indemnification provision contained in this paragraph shall apply, it is
understood that if in any case the Trust may be asked to indemnify or save the
Agent harmless, the Trust shall be fully and promptly advised of all pertinent
facts concerning the situation in question, and it is further understood that
the Agent will use all reasonable care to identify and notify the Trust promptly
concerning any situation which presents or appears likely to present the
probability of such a claim for indemnification against the Trust. The Trust
shall have the option to defend the Agent against any claim which may be the
subject of this indemnification and, in the event that the Trust so elects, it
will so notify the Agent and thereupon the Trust shall take over complete
defense for the claim, and the Agent shall in such situation incur no further
legal or other expenses for which it shall seek indemnification under this
paragraph. The Agent shall in no case confess any claim or make any compromise
or settlement in any case in which the Trust will be asked to indemnify the
Agent, except with the Trust's prior written consent.
8. Limitation of Shareholder Liability, etc. The Agent hereby
agrees that obligations assumed by the Trust pursuant to this Agreement shall be
limited in all cases to the Trust and its assets and that the Agent shall not
seek satisfaction of any such obligation from the shareholders or any
shareholder of the Trust. It is further agreed that the Agent shall not seek
satisfaction of any such obligations from the Board of Trustees or any
individual Trustee of the Trust.
9. Notices. All notices or other communications hereunder to
either party shall be in writing or by confirming telegram, cable, telex or
facsimile sending device. Notices shall be addressed (a) if to the Trust, at the
address of the Trust, or (b) if to the Agent, at 4400 Computer Drive,
Westborough, Massachusetts 01581.
10. Further Assurances. Each party agrees to perform
such further acts and execute such
further documents as are necessary to effectuate the purposes hereof.
11. Termination. This Agreement will continue in effect until
two years from the date hereof and thereafter for successive annual periods,
provided that such continuance is specifically approved at least annually (a) by
the Trust's Board of Trustees and (b) by the vote, cast in person at a meeting
called for the purpose, of a majority of the Trust's trustees who are not
parties to this Agreement or "interested persons" (as defined in the 1940 Act)
of any such party. This Agreement may be terminated at any time, without the
payment of any penalty, by a vote of a majority of the Trust's outstanding
voting securities (as defined in the 1940 Act) or by a vote of a majority of the
Trust's entire Board of Trustees on 60 days' written notice to the Agent or by
the Agent on (60) days' written notice to the Trust. Notice of termination of
the Shareholder Servicing Plan by the Board of Trustees, pursuant to which this
Agreement has been entered, shall constitute a notice of termination of this
Agreement.
12. Changes; Amendments. This Agreement may be changed
or amended only by written
instrument signed by both Parties.
13. Reports. The Agent will provide the Trust or its designees
such information as the Trust or its designees may reasonably request
(including, without limitation, periodic certifications confirming the provision
to Customers of the services described herein), and will otherwise cooperate
with the Trust and its designees (including, without limitation, any auditors
designated by the Trust), in connection with the preparation of reports to its
Board of Trustees concerning this Agreement and the monies paid or payable under
this Agreement, as well as any other reports or filings that may be required by
law.
14. Subcontracting by Agent. The Agent may subcontract for the
performance of the Agent's obligations hereunder with any one or more persons,
including but not limited to any one or more persons which is an affiliate of
the Agent; provided, however, that the Agent shall be as fully responsible to
the Trust for the acts and omissions of any subcontractor as it would be for its
own acts or omissions. The Agent shall notify the Trust of any such arrangements
no later than the next meeting of the Trust's Board of Trustees following the
entry by the Agent into such arrangements. Notwithstanding this paragraph or
paragraph 11 of this Agreement, the Trust reserves the right to terminate this
Agreement immediately or upon such notice as the Trust, in its sole discretion,
determines to give, and without payment of any penalty, if the Trust notifies
the Agent that any subcontractor of the Agent is unacceptable to the Trust for
any reason and the Agent does not terminate its arrangements with such
subcontractor as promptly as reasonably practicable.
15. Governing Law. This Agreement shall be governed by
the laws of the State of New York.
16. Miscellaneous. The captions in this Agreement are
included for convenience of
reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect. This Agreement has been executed
on behalf of the Trust by the undersigned not individually, but in the capacity
indicated.
IBJ FUNDS TRUST
By:___________________________
Title:
[FINANCIAL INSTITUTION]
By:___________________________
Title:
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<FISCAL-YEAR-END> NOV-30-1997
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<FN>
<F1>Premier Class
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<CIK> 0000929189
<NAME> IBJ FUNDS TRUST
<SERIES>
<NUMBER> 002
<NAME> IBJ CORE FIXED INCOME FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-END> NOV-30-1997
<INVESTMENTS-AT-COST> 30921418
<INVESTMENTS-AT-VALUE> 31607730
<RECEIVABLES> 513714
<ASSETS-OTHER> 12474
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 32133918
<PAYABLE-FOR-SECURITIES> 250670
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 241588
<TOTAL-LIABILITIES> 492258
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 30747700
<SHARES-COMMON-STOCK> 1281<F1>
<SHARES-COMMON-PRIOR> 1432<F1>
<ACCUMULATED-NII-CURRENT> 122034
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 85614
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 686312
<NET-ASSETS> 31641660
<DIVIDEND-INCOME> 26567
<INTEREST-INCOME> 1869000
<OTHER-INCOME> 0
<EXPENSES-NET> 304191
<NET-INVESTMENT-INCOME> 1591376
<REALIZED-GAINS-CURRENT> 177278
<APPREC-INCREASE-CURRENT> 276460
<NET-CHANGE-FROM-OPS> 2045114
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 740<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 761978
<NUMBER-OF-SHARES-REDEEMED> 567978
<SHARES-REINVESTED> 142962
<NET-CHANGE-IN-ASSETS> 3859123
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 30370
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 141947
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 332581
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 10.22<F1>
<PER-SHARE-NII> .57<F1>
<PER-SHARE-GAIN-APPREC> .13<F1>
<PER-SHARE-DIVIDEND> .57<F1>
<PER-SHARE-DISTRIBUTIONS> 0<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 10.35<F1>
<EXPENSE-RATIO> 1.07
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Premier Class
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<CIK> 0000929189
<NAME> IBJ FUNDS TRUST
<SERIES>
<NUMBER> 03
<NAME> IBJ CORE EQUITY FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-END> NOV-30-1997
<INVESTMENTS-AT-COST> 78090215
<INVESTMENTS-AT-VALUE> 107324475
<RECEIVABLES> 141194
<ASSETS-OTHER> 22791
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 107488460
<PAYABLE-FOR-SECURITIES> 443615
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1644405
<TOTAL-LIABILITIES> 2088020
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 60317593
<SHARES-COMMON-STOCK> 871<F1>
<SHARES-COMMON-PRIOR> 1314
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 860711
<ACCUMULATED-NET-GAINS> 16709298
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 29234260
<NET-ASSETS> 105400440
<DIVIDEND-INCOME> 1573130
<INTEREST-INCOME> 27378
<OTHER-INCOME> 0
<EXPENSES-NET> 872210
<NET-INVESTMENT-INCOME> 728298
<REALIZED-GAINS-CURRENT> 17291184
<APPREC-INCREASE-CURRENT> 3803831
<NET-CHANGE-FROM-OPS> 21823313
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 310<F1>
<DISTRIBUTIONS-OF-GAINS> 2169<F1>
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1466620
<NUMBER-OF-SHARES-REDEEMED> 2013631
<SHARES-REINVESTED> 775739
<NET-CHANGE-IN-ASSETS> 3859123
<ACCUMULATED-NII-PRIOR> 386120
<ACCUMULATED-GAINS-PRIOR> 9863101
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 588328
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 970265
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 15.37<F1>
<PER-SHARE-NII> .35<F1>
<PER-SHARE-GAIN-APPREC> 3.04<F1>
<PER-SHARE-DIVIDEND> .55<F1>
<PER-SHARE-DISTRIBUTIONS> 1.53<F1>
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 16.68<F1>
<EXPENSE-RATIO> .89
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Premier Class
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<CIK> 0000929189
<NAME> IBJ FUNDS TRUST
<SERIES>
<NUMBER> 004
<NAME> IBJ BLENDED TOTAL RETURN FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-END> NOV-30-1997
<INVESTMENTS-AT-COST> 56238205
<INVESTMENTS-AT-VALUE> 62336768
<RECEIVABLES> 1423759
<ASSETS-OTHER> 49884
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 63810411
<PAYABLE-FOR-SECURITIES> 1396609
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 532760
<TOTAL-LIABILITIES> 1929369
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 46382411
<SHARES-COMMON-STOCK> 1024<F1>
<SHARES-COMMON-PRIOR> 1350
<ACCUMULATED-NII-CURRENT> 51339
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 9348729
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 6098563
<NET-ASSETS> 61881042
<DIVIDEND-INCOME> 500603
<INTEREST-INCOME> 1973375
<OTHER-INCOME> 0
<EXPENSES-NET> 619160
<NET-INVESTMENT-INCOME> 1854818
<REALIZED-GAINS-CURRENT> 9499637
<APPREC-INCREASE-CURRENT> (2647076)
<NET-CHANGE-FROM-OPS> 8707379
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 475<F1>
<DISTRIBUTIONS-OF-GAINS> 818<F1>
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 576525
<NUMBER-OF-SHARES-REDEEMED> 1398756
<SHARES-REINVESTED> 367303
<NET-CHANGE-IN-ASSETS> (2368572)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 3067051
<OVERDISTRIB-NII-PRIOR> 9267
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 381947
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 682818
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 12.76<F1>
<PER-SHARE-NII> .50<F1>
<PER-SHARE-GAIN-APPREC> 1.27<F1>
<PER-SHARE-DIVIDEND> .50<F1>
<PER-SHARE-DISTRIBUTIONS> .52<F1>
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.51<F1>
<EXPENSE-RATIO> .97
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Premier Class
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<RESTATED>
<CIK> 0000929189
<NAME> IBJ FUNDS TRUST
<SERIES>
<NUMBER> 011
<NAME> IBJ RESERVE MONEY MARKET FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-END> NOV-30-1997
<INVESTMENTS-AT-COST> 25870664
<INVESTMENTS-AT-VALUE> 25870664
<RECEIVABLES> 9087
<ASSETS-OTHER> 111517
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 25991268
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 193991
<TOTAL-LIABILITIES> 193991
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 25805830
<SHARES-COMMON-STOCK> 25792975<F1>
<SHARES-COMMON-PRIOR> 34276185<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 8553
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 25797277
<DIVIDEND-INCOME> 29494
<INTEREST-INCOME> 1557649
<OTHER-INCOME> 0
<EXPENSES-NET> 186379
<NET-INVESTMENT-INCOME> 1400764
<REALIZED-GAINS-CURRENT> (1601)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 1399163
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1400133<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 67540758
<NUMBER-OF-SHARES-REDEEMED> 77319264
<SHARES-REINVESTED> 1294564
<NET-CHANGE-IN-ASSETS> (8485543)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 7034
<GROSS-ADVISORY-FEES> 101221
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 287600
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .05
<PER-SHARE-GAIN-APPREC> .00
<PER-SHARE-DIVIDEND> .05
<PER-SHARE-DISTRIBUTIONS> .00
<RETURNS-OF-CAPITAL> .00
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .64
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Service Class
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<CIK> 0000929189
<NAME> IBJ FUNDS TRUST
<SERIES>
<NUMBER> 012
<NAME> IBJ CORE FIXED INCOME FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-END> NOV-30-1997
<INVESTMENTS-AT-COST> 30921418
<INVESTMENTS-AT-VALUE> 31607730
<RECEIVABLES> 513714
<ASSETS-OTHER> 12474
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 32133918
<PAYABLE-FOR-SECURITIES> 250670
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 241588
<TOTAL-LIABILITIES> 492258
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 30747700
<SHARES-COMMON-STOCK> 3053575<F1>
<SHARES-COMMON-PRIOR> 2716462<F1>
<ACCUMULATED-NII-CURRENT> 122034
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 85614
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 686312
<NET-ASSETS> 31641660
<DIVIDEND-INCOME> 26567
<INTEREST-INCOME> 1869000
<OTHER-INCOME> 0
<EXPENSES-NET> 304191
<NET-INVESTMENT-INCOME> 1591376
<REALIZED-GAINS-CURRENT> 177278
<APPREC-INCREASE-CURRENT> 276460
<NET-CHANGE-FROM-OPS> 2045114
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1590636<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 761978
<NUMBER-OF-SHARES-REDEEMED> 567978
<SHARES-REINVESTED> 142962
<NET-CHANGE-IN-ASSETS> 3859123
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 30370
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 141947
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 332581
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 10.22<F1>
<PER-SHARE-NII> .57<F1>
<PER-SHARE-GAIN-APPREC> .14<F1>
<PER-SHARE-DIVIDEND> .57<F1>
<PER-SHARE-DISTRIBUTIONS> 0<F1>
<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 10.36<F1>
<EXPENSE-RATIO> 1.07
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Service Class
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<CIK> 0000929189
<NAME> IBJ FUNDS TRUST
<SERIES>
<NUMBER> 013
<NAME> IBJ CORE EQUITY FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-END> NOV-30-1997
<INVESTMENTS-AT-COST> 78090215
<INVESTMENTS-AT-VALUE> 107324475
<RECEIVABLES> 141194
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<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 107488460
<PAYABLE-FOR-SECURITIES> 443615
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1644405
<TOTAL-LIABILITIES> 2088020
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 60317593
<SHARES-COMMON-STOCK> 6320118<F1>
<SHARES-COMMON-PRIOR> 6091390<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 860711
<ACCUMULATED-NET-GAINS> 16709298
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 29234260
<NET-ASSETS> 105400440
<DIVIDEND-INCOME> 1573130
<INTEREST-INCOME> 27378
<OTHER-INCOME> 0
<EXPENSES-NET> 872210
<NET-INVESTMENT-INCOME> 728298
<REALIZED-GAINS-CURRENT> 17291184
<APPREC-INCREASE-CURRENT> 3803831
<NET-CHANGE-FROM-OPS> 21823313
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1974604<F1>
<DISTRIBUTIONS-OF-GAINS> 10445960<F1>
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1466620
<NUMBER-OF-SHARES-REDEEMED> 2013631
<SHARES-REINVESTED> 775739
<NET-CHANGE-IN-ASSETS> 3859123
<ACCUMULATED-NII-PRIOR> 386120
<ACCUMULATED-GAINS-PRIOR> 9863101
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 588328
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 970265
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 15.37<F1>
<PER-SHARE-NII> .35<F1>
<PER-SHARE-GAIN-APPREC> 3.03<F1>
<PER-SHARE-DIVIDEND> .55<F1>
<PER-SHARE-DISTRIBUTIONS> 1.53<F1>
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 16.67<F1>
<EXPENSE-RATIO> .89
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Service Class
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<CIK> 0000929189
<NAME> IBJ FUNDS TRUST
<SERIES>
<NUMBER> 014
<NAME> IBJ BLENDED TOTAL RETURN FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-END> NOV-30-1997
<INVESTMENTS-AT-COST> 56238205
<INVESTMENTS-AT-VALUE> 62336768
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<PAYABLE-FOR-SECURITIES> 1396609
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 532760
<TOTAL-LIABILITIES> 1929369
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 46382411
<SHARES-COMMON-STOCK> 4578359<F1>
<SHARES-COMMON-PRIOR> 5032961<F1>
<ACCUMULATED-NII-CURRENT> 51339
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 9348729
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 6098563
<NET-ASSETS> 61881042
<DIVIDEND-INCOME> 500603
<INTEREST-INCOME> 1973375
<OTHER-INCOME> 0
<EXPENSES-NET> 619160
<NET-INVESTMENT-INCOME> 1854818
<REALIZED-GAINS-CURRENT> 9499637
<APPREC-INCREASE-CURRENT> (2647076)
<NET-CHANGE-FROM-OPS> 8707379
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1842417<F1>
<DISTRIBUTIONS-OF-GAINS> 3160241<F1>
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 576525
<NUMBER-OF-SHARES-REDEEMED> 1398756
<SHARES-REINVESTED> 367303
<NET-CHANGE-IN-ASSETS> (2368572)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 3067051
<OVERDISTRIB-NII-PRIOR> 9267
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 381947
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 682818
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 12.76<F1>
<PER-SHARE-NII> .50<F1>
<PER-SHARE-GAIN-APPREC> 1.27<F1>
<PER-SHARE-DIVIDEND> .50<F1>
<PER-SHARE-DISTRIBUTIONS> .52<F1>
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.51<F1>
<EXPENSE-RATIO> .97
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Service Class
</FN>
</TABLE>
