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THE HIRTLE CALLAGHAN TRUST
November 8, 1999
VIA EDGAR TRANSMISSION
Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549
Re: The Hirtle Callaghan Trust (the "Registrant")
Securities Act of 1933 Registration File No. 33-87762
Rule 497(c) Filing
Dear Sir or Madam:
On behalf of the Registrant, attached hereto for filing pursuant to Rule 497(c)
under the Securities Act of 1933, as amended, by electronic submission is a copy
of the Registrants' Prospectus, dated November 1, 1999. The attached copy of the
Prospectus has been marked to show changes made thereto from the form of said
Prospectus contained in the most recent Post-Effective Amendment on Form N-1A,
filed pursuant to EDGAR on October 28, 1999. As Assistant Secretary of the
Registrant, I hereby certify that the Registrant's definitive Statement of
Additional Information, also dated November 1, 1999, which would have been filed
pursuant to Rule 497(c), would not have differed from that contained in said
filing.
If you have any questions concerning this filing, please do not hesitate to
contact the undersigned at (614) 470-8543.
Sincerely,
/s/ Paige C. Hodgin
Paige C. Hodgin
Assistant Secretary
The Hirtle Callaghan Trust
cc: Laura A. Corsell, Esq.
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The Hirtle Callaghan Trust
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Prospectus
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November 1, 1999
The Value Equity Portfolio
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The Growth Equity Portfolio
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The Small Capitalization Equity Portfolio
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The International Equity Portfolio
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The Limited Duration Municipal Bond Portfolio
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The Intermediate Term Municipal Bond Portfolio
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The Fixed Income Portfolio
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The Securities and Exchange Commission has not approved or disapproved the
shares described in this prospectus or determined whether this prospectus is
accurate or complete. Any representation to the contrary is a criminal offense.
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Table of Contents
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A Summary of the risks, past performance Portfolio Descriptions and Expenses
and fees of each Portfolio The Equity Portfolios
The Value Equity Portfolio
The Growth Equity Portfolio
The Small Capitalization Equity Portfolio
The International Equity Portfolio
The Fixed Income Portfolios
The Limited Duration Municipal Bond Portfolio
The Intermediate Term Municipal Bond Portfolio
The Fixed Income Portfolio
An overview of securities that may be Investment Risk and Strategies
purchased, investment techniques that may be About Equity Securities
used and the risks associated with them. About Fixed Income Securities
About Temporary Investment Practices
About Hedging Strategies
About Other Permitted Instruments
About Year 2000
A look at the people and organizations Management of the Trust
responsible for the investments and Hirtle Callaghan & Co., Inc.
operation of the Trust's Portfolios The Specialist Managers
Your guide to an account in the Shareholder Information
Hirtle Callaghan Trust Purchases and Redemptions
Dividends, Distributions and Taxes
Additional Information
Selected Per Share Information Financial Highlights
Where to Learn More
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2
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Introduction to The Hirtle Callaghan Trust
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The Trust offers both equity The Hirtle Callaghan Trust ("Trust") offers seven separate investment portfolios (each a
oriented and fixed income "Portfolio"). Of these, four -- The Equity Portfolios -- invest primarily (i.e. at least 65% of
investments. assets) in equity securities. The remaining three portfolios -- The Fixed Income Portfolios --
invest primarily in fixed income securities.
Portfolio management is provided Hirtle Callaghan & Co. serves as the overall sponsor and investment adviser to the Trust,
by Specialist Managers seeking monitoring the performance of the individual Portfolios and advising the Trust's Board of
securities whose long-term Trustees. Day-to-day investment decisions are made for the Portfolios by one or more independent
economic value is not reflected money management organizations -- the Specialist Managers.
in current market prices.
The Equity Portfolios are designed to operate on a "multi-manager" basis. This means that each
Top-down investing means focusing of the Trust's Portfolios may be managed by more than one Specialist Manager. Each of the Equity
on industry and economic trends Portfolios has retained two separate portfolio management firms to make investment decisions on
to identify those market sectors its behalf. The multi-manager structure of the Equity Portfolios is designed to combine a top-
that may offer investment down investment philosophy, often coupled with quantitative techniques, and a bottom-up stock
opportunities, often before selection approach that focuses on fundamental analysis. At present, the Fixed Income Portfolios
analyzing information relating are each served by a single Specialist Manager.
to specific issuers.
There are two basic risks to which all mutual funds, including each of the Portfolios of the
Bottom-up investing means seeking Trust, are subject. Mutual fund shareholders run the risk that the value of the securities held
investment opportunities by by a Portfolio may move down in response to general market and economic conditions, or
analyzing fundamental conditions that affect specific market sectors or individual companies. This is referred to as
information about a company -- "market risk." The second risk common to all mutual fund investments is "management risk" -- the
factors such as earnings and risk that investment strategies employed in the investment selection process may not result in
sales, product lines and the an increase in the value of your investment or in overall performance equal to other
ability of the company's investments.
management.
Your investment in any Portfolio Investments in any one of the Equity Portfolios also involve other risks, which we refer to here
of the Trust involves a risk as "multi-manager risk." This is the risk that the Trust may be unable to (a) identify and
that you will lose money on your retain Specialist Managers who achieve superior investment records relative to other similar
investment. investments; (b) pair Specialist Manager that have complementary investment styles (e.g. top-
down vs. bottom-up investment selections processes; or (c) effectively allocate Portfolio assets
among Specialist Managers to enhance the return and reduce the volatility that would typically
be expected of any one management style. Moreover, use of the multi-manager structure may, under
certain circumstances, incur higher costs than might not occur in a portfolio that is served by
a single Specialist Manager.
Depending on the investments made by an individual Portfolio and the investment strategies and
techniques used by its Specialist Manager(s), a Portfolio may be subject to additional risks. On
the following pages you will find a Portfolio by Portfolio summary of the investment policies of
each Portfolio of the Trust, illustrations of the past performance of the individual Portfolios
and the expenses that you will bear as a shareholder of each Portfolio, and a summary of the
investment risks to which each Portfolio may be subject. A more detailed discussion of these
investment risks appears under the heading "Investment Risk and Strategies" later in this
prospectus.
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3
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Fund Description and Risk Factors -- The Value Equity Portfolio
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Investment Objective. The investment objective of this Portfolio is to provide
total return consisting of capital appreciation and current income. The Value
Equity Portfolio seeks to achieve its objective by investing primarily in a
diversified portfolio of equity securities.
Principal Investment Strategies. In selecting securities for the Portfolio, the
Specialist Managers follow a value-oriented investment approach. "Value
investing" means that the Specialist Managers generally emphasize common stock
issues which are inexpensive relative to the market. The price of value stocks
are typically below their worth in comparison to factors such as earnings, book
value and dividend paying ability. In general, value-oriented funds such as The
Value Equity Portfolio may appeal to investors who want some dividend income and
the potential for capital gains, but are less tolerant of the share-price
fluctuations typical in growth-oriented funds. Consistent with its investment
objective, many of the common stocks in which the Portfolio invests will be
dividend paying issues; up to 15% of the Portfolio's total assets may be
invested in other income-producing securities, such as preferred stocks or
bonds, that are convertible into common stock. Up to 20% of the Portfolio's
total assets may also be invested in securities issued by non-U.S. companies.
The Portfolio may engage in transactions involving "derivative instruments" --
option or futures contracts and similar instruments -- in order to hedge against
fluctuations in market price of the securities in which the Portfolio primarily
invests. The Portfolio may also acquire Standard & Poor's Depositary Receipts
(referred to as "SPDRs") in order to achieve market exposure pending direct
investments in equity securities.
Specialist Managers. Institutional Capital Corporation ("ICAP") and Geewax
Terker & Co. ("Geewax") currently provide portfolio management services to this
Portfolio.
The ICAP Investment ICAP adheres to a value oriented, fundamental
Selection Process investment style. Its investment process involves
three keys components: valuation, identification of a
"catalyst" and research.
First, ICAP uses its proprietary valuation models to
identify, from a universe of approximately 450 well
established large- and mid-capitalization companies,
those companies that ICAP believes offer the best
relative values. From these undervalued companies,
stocks that exhibit deteriorating earnings trends are
eliminated. Next, ICAP looks beyond traditional
measures of value to find companies where it believes
there exists a catalyst for positive change. The
catalyst can be thematic (e.g., consolidation of the
banking industry), something that would benefit a
number of companies (e.g. new technologies or product
markets), or an event that is company specific (e.g.,
a corporate restructuring or the introduction of a new
product). An integral part of ICAP's disciplined
process is continuous communication with the top
management at each of these companies, and often the
customers, competitors and suppliers of these
companies.
The Geewax Investment Geewax adheres to a top-down quantitative investment
Selection Process philosophy. In selecting investments for the
Portfolio, Geewax uses a proprietary valuation system
to identify those market sectors and industries that
Geewax believes have good prospects for growth. Geewax
then conducts in-depth analysis of the financial
quality, market capitalization, cash flow, earnings
and revenues of individual companies within those
sectors or industries. Stock selections are then made
using a variety of quantitative techniques and
fundamental research, and with a view with a view to
maintaining risk, capitalization and industry
characteristics similar to the Russell 1000 Value
Index(R).
Principal Investment The principal risks associated with an investment in
Risks. this Portfolio are:
. Market Risk -- changes in the market value of a security in response to
market factors and the equity markets can be volatile.
. Foreign Securities Risk -- Non-U.S. companies may be adversely affected by
political, social and/or economic developments abroad and differences
between U.S. and foreign regulatory requirements and market practices.
. Foreign Currency Risk -- the value of securities denominated in foreign
currencies may fall if the value of that currency relative to the U.S.
dollar falls, and may be adversely affected by volatile currency markets, or
actions of U.S. and foreign governments or central banks.
. Interest Rate Risk -- convertible securities are subject to the risk that,
if interest rates rise, the value of income-producing securities may
experience a corresponding decline.
. Credit Risk -- convertible securities are subject to the risk that the
issuing company may be fail to make principal and interest payments when
due.
. Derivative Risk -- the value of derivative instruments may rise or fall more
rapidly than other investments and there is a risk that the Portfolio may
lose more than the amount invested in the derivative instrument in the first
place. Derivative instruments also involve the risk that other parties to
the derivative contract may fail to meet their obligations, which could
cause losses to the Portfolio.
. Mid-Cap Risk - although the Portfolio's benchmark index is considered an
indicator of the performance of large capitalization stocks, the index does
include some "mid-cap" issuers in which the Portfolio may invest. These
companies may have more limited financial resources, markets and depth of
management than larger companies.
4
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5
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Performance and Shareholder Expenses -- The Value Equity Portfolio
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The chart and table on this page show how The Value Equity Portfolio has
performed and how its performance has varied from year to year. The bar chart
gives some indication of risk by showing changes in the Portfolio's yearly
performance for each full calendar year since the Portfolio's inception. The
table accompanying the bar chart compares the Portfolio's performance over time
to that of the Russell 1000 Value Stock Index(R) a widely recognized, unmanaged
index of common stocks. All of the information below -- the bar chart, tables
and example -- assume the reinvestment of all dividends and distributions in
shares of the Portfolio. Of course, past performance does not indicate how the
Portfolio will perform in the future.
[BAR CHART APPEARS HERE]
Year -by- Year Total Returns as of 12/31*
21.24% 30.88% 9.15%
1996 1997 1998
Average Annual Total Returns
12 mos. From
ended 12/31/98 inception
Value Equity 9.15% 21.08%
Russell 1000 Value
Stock Index 15.63% 24.94%
* Results are shown on a calendar year basis; the Portfolio's fiscal year,
however, is June 30. The Portfolio's return for calendar year 1999, as of
September 30, 1999 was 1.52% (annualized).
Best quarter: 2nd Qtr 1997 15.52%
Worst quarter: 3rd Qtr 1998 -14.69%
Shareholder Expenses
The following table describes the fees and expenses that you may pay if you buy
and hold shares of the Portfolio.
Shareholder Fees
(Fees paid directly from your investment, expressed as a percentage of offering
price)
Maximum Sales Charges...................... None
Maximum Redemption Fee..................... None
Annual Operating Expenses
(Expenses that are deducted from the Portfolio's assets, expressed as a
percentage of average net assets)
Management Fees............................ .38%
Other Expenses............................. .18%
Total Portfolio
Operating Expenses......................... .56%
Example: This Example is intended to help you compare the cost of investing in
- -------
the Portfolio with the cost of investing in other mutual funds. The Example
assumes that you invest $10,000 in the Portfolio for the time periods indicated
and then redeem all of your shares at the end of those periods. The Example also
assumes that your investment has a 5% return each year and that the Portfolio's
operating expenses remain the same. Although your actual cost may be higher or
lower, based on these assumptions, your costs would be:
1 Year............... $ 57
3 Years.............. $179
5 Years.............. $313
10 Years.............. $701
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6
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Fund Description and Risk Factors -- The Growth Equity Portfolio
================================================================================
Investment Objective. The investment objective of this Portfolio is to provide
capital appreciation, with income as secondary consideration. The Portfolio will
seek to achieve this objective by investing primarily in a diversified portfolio
of equity securities.
Principal Investment Strategies. In selecting securities for the Portfolio, the
Specialist Managers follow a growth-oriented investment approach. "Growth
investing" means that Specialist Managers will generally focus on companies
believed to have above-average potential for growth in revenue and earnings. The
prices of these stocks are typically above-average in relation to measures such
as revenue, earnings, book value and dividends. As a growth-oriented investment,
The Growth Equity Portfolio may appeal to investors willing to accept more
share-price fluctuation than may be the case for The Value Equity Portfolio, in
exchange for the potential for greater increases in share prices. Although some
of the equity securities in which the Portfolio will invest are expected to be
dividend paying issues, income is a secondary consideration in the stock
selection process. Accordingly, dividends paid by The Growth Equity Portfolio
can generally be expected to be lower than those paid by The Value Equity
Portfolio. Up to 15% of the Portfolio's total assets may be invested in
convertible securities. In addition, a maximum of 20% of the Portfolio's total
assets may be invested in securities of non-U.S. issuers. The Portfolio may
engage in transactions involving "derivative instruments" -- option or futures
contracts and similar instruments -- in order to hedge against fluctuations in
market price of the securities in which the Portfolio primarily invests. The
Portfolio may also acquire Standard & Poor's Depositary Receipts (referred to as
"SPDRs") in order to achieve market exposure pending direct investments in
equity securities.
Specialist Managers. Jennison Associates LLC ("Jennison") and Goldman Sachs
Asset Management ("GSAM") currently provide portfolio management services to
this Portfolio.
The Jennison Investment Jennison selects stocks on a company by company
Selection Process basis using fundamental analysis. This bottom-up
approach emphasizes companies that are experiencing
some or all of the following: above-average
revenues and earnings per share, growth, improving
profitability and /or strong market position.
Often, companies selected for investment by
Jennison have superior management, unique marketing
competence, strong research and development and
financial discipline.
The GSAM Investment In selecting investments for the Portfolio, GSAM
Selection Process emphasizes a company's growth prospects of equity
securities to be purchased for the Portfolio.
Investments are selected using both a variety of
quantitative techniques and fundamental research,
with a view to maintaining risk, capitalization and
industry characteristics similar to the Russell
1000 Growth Index(R). GSAM monitors the performance
of securities it purchased for the Portfolio
through the use of a proprietary computerized
ranking system designed to forecast the returns of
securities acquired for the Portfolio by GSAM. GSAM
also attempts to limit the extent to which
positions acquired by GSAM for the Portfolio
deviate from the benchmark.
Principal Investment Risks. The principal risks associated with an investment
in this Portfolio are:
. Market Risk -- changes in the market value of a security in response to
market factors and the equity markets can be volatile.
. Foreign Securities Risk -- Non-U.S. companies may be adversely affected by
political, social and/or economic developments abroad and differences
between U.S. and foreign regulatory requirements and market practices.
. Foreign Currency Risk -- the value of securities denominated in foreign
currencies may fall if the value of that currency relative to the U.S.
dollar falls, and may be adversely affected by volatile currency markets, or
actions of U.S. and foreign governments or central banks.
. Interest Rate Risk -- convertible securities are subject to the risk that,
if interest rates rise, the value of income-producing securities may
experience a corresponding decline.
. Credit Risk -- convertible securities are subject to the risk that the
issuing company may be fail to make principal and interest payments when
due.
. Derivative Risk -- the value of derivative instruments may rise or fall more
rapidly than other investments and there is a risk that the Portfolio may
lose more than the amount invested in the derivative instrument in the first
place. Derivative instruments also involve the risk that other parties to
the derivative contract may fail to meet their obligations, which could
cause losses to the Portfolio.
. Mid-Cap Risk -- although the Portfolio's benchmark index is considered an
indicator of the performance of large capitalization stocks, the index does
include some "mid-cap" issuers in which the Portfolio may invest. These
companies may have more limited financial resources, markets and depth of
management than larger companies.
7
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8
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Performance and Shareholder Expenses -- The Growth Equity Portfolio
================================================================================
The chart and table on this page show how The Growth Equity Portfolio has
performed and how its performance has varied from year to year. The bar chart
gives some indication of risk by showing changes in the Portfolio's yearly
performance for each full calendar year since the Portfolio's inception. The
table accompanying the bar chart compares the Portfolio's performance over time
to that of the Russell 1000 Growth Stock Index(R), a widely recognized,
unmanaged index of common stocks. Both the bar chart and the table assume all
dividends and distributions were reinvested in shares of the Portfolio. Of
course, past performance does not indicate how the Portfolio will perform in the
future. All of the information below -- the bar chart, tables and example --
assume the reinvestment of all dividends and distributions in shares of the
Portfolio. Of course, past performance does not indicate how the Portfolio will
perform in the future.
[BAR CHART APPEARS HERE]
Year-by-Year Total Returns as of 12/31*
20.11% 28.04% 32.54%
1996 1997 1998
Average Annual Total Returns
12 mos. From
ended 12/31/98 inception
Growth Equity 32.54% 24.18%
Russell 1000 Growth
Index 38.71% 30.64%
* Results are shown on a calendar year basis; the Portfolio's fiscal year,
however, in June 30. The Portfolio's return for calendar year 1999, as of
September 30, 1999 was 11.24% (annualized).
Best quarter: 4th Qtr 1998 28.16%
Worst quarter: 3rd Qtr 1998 -14.05%
Shareholder Expenses
The following table describes the fees and expenses that you may pay if you buy
and hold shares of the Portfolio.
Shareholder Fees
(Fees paid directly from your investment, expressed as a percentage of offering
price)
Maximum Sales Charges................. None
Maximum Redemption Fee................ None
Annual Operating Expenses
(Expenses that are deducted from the Portfolio's assets, expressed as a
percentage of average net assets)
Management Fees*...................... .45%
Other Expenses........................ .18%
Total Portfolio
Operating Expenses.................... .63%
Example: This Example is intended to help you compare the cost of investing in
the Portfolio with the cost of investing in other mutual funds. The Example
assumes that you invest $10,000 in the Portfolio for the time periods indicated
and then redeem all of your shares at the end of those periods. The Example
also assumes that your investment has a 5% return each year and that the
Portfolio's operating expenses remain the same. Although your actual cost may
be higher or lower, based on these assumptions, your costs would be:
1 Year $ 64
3 Years $202
5 Years $351
10 Years $786
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9
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* The figures shown reflect the total management fees payable by the Portfolio,
including the maximum performance fee to which GSAM may be entitled under the
performance arrangements. This maximum fee may be applicable only if the GSAM
portion of the Portfolio out performs the Russell 1000 Growth Index by 110 basis
points. A full description of the GSAM fee arrangement appears under the heading
"Management of the Trust -- Specialist Managers."
10
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Fund Description and Risk Factors -- The Small Capitalization Equity Portfolio
================================================================================
Investment Objective. The investment objective of this Portfolio is to provide
long term capital appreciation by investing primarily in equity securities of
smaller companies.
Principal Investment Strategies. Companies in which the Portfolio may invest are
those which, in the view of one or more of the Portfolio's Specialist Managers,
have demonstrated, or have the potential for, strong capital appreciation
potential due to their relative market position, anticipated earnings, changes
in management or other factors. Under normal market conditions, at least 65% of
the Portfolio's total assets are invested in equity securities of companies with
capitalizations of less than $1.5 billion at the time of purchase. Up to 35% of
the Portfolio's total assets may be invested in the equity securities of
companies with larger capitalizations. The Portfolio may engage in transactions
involving "derivative instruments" -- option or futures contracts, Standard &
Poor's Depositary Receipts (referred to as "SPDRS") and similar instruments --
in order to hedge against fluctuations in market price of the securities in
which the Portfolio primarily invests.
Specialist Managers. Frontier Capital Management Company ("Frontier") and Geewax
Terker & Co. ("Geewax") currently provide portfolio management services to this
Portfolio. Further information about this Portfolio's Specialist Managers
appears on page 23 of this Prospectus.
The Frontier Investment Frontier seeks to identify companies with
Selection Process unrecognized earning potential. Earnings per
share, growth and price appreciation are important
factors. Frontier's investment process combines
fundamental research with a valuation model that
screens for equity valuation, forecasts for
earnings growth and unexpectedly high or low
earnings. Generally, Frontier will consider
selling a security if earnings growth potential is
realized, when the fundamental reasons for
purchase are no longer valid, or when a more
attractive situation is identified.
The Geewax Investment Geewax adheres to a top-down quantitative
Selection Process investment philosophy. In selecting investments
for the Portfolio, Geewax uses a proprietary
valuation system to identify those market sectors
and industries that Geewax believes have good
prospects for growth. Geewax then conducts in-
depth analysis of the financial quality, market
capitalization, cash flow, earnings and revenues
of individual companies within those sectors or
industries. Stock selections are then made using a
variety of quantitative techniques and fundamental
research. and with a view to assembling a
portfolio of investments similar in terms of risk,
capitalization and represented market sectors to
the Russell 2000 Small Cap Stock Index(R).
Principal Investment Risks. The principal risks associated with an investment in
this Portfolio are:
. Market Risk -- changes in the market value of a security in response to
market factors and the equity markets can be volatile.
. Derivative Risk -- the value of derivative instruments may rise or fall
more rapidly than other investments and there is a risk that the Portfolio
may lose more than the amount invested in the derivative instrument in the
first place. Derivative instruments also involve the risk that other
parties to the derivative contract may fail to meet their obligations,
which could cause losses to the Portfolio.
. Small-Cap Risk -- small cap companies may be more vulnerable to adverse
business or economic developments. They may also be less liquid and/or more
volatile than securities of larger companies or the market averages in
general. Small cap companies may be adversely affected during periods when
investors prefer to hold securities of large capitalization companies
11
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12
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Performance and Shareholder Expenses--The Small Capitalization Equity Portfolio
================================================================================
The chart and table on this page show how The Small Capitalization Equity
Portfolio has performed and how its performance has varied from year to year.
The bar chart gives some indication of risk by showing changes in the
Portfolio's yearly performance for each full calendar year since the Portfolio's
inception. The table accompanying the bar chart compares the Portfolio's
performance over time to that of the Russell 2000 Small Cap Stock Index/(R)/ a
widely recognized, unmanaged index of small capitalization stocks. Both the bar
chart and the table assume all dividends and distributions were reinvested in
shares of the Portfolio. Of course, past performance does not indicate how the
Portfolio will perform in the future. All of the information below -- the bar
chart, tables and example -- assume the reinvestment of all dividends and
distributions in shares of the Portfolio. Of course, past performance does not
indicate how the Portfolio will perform in the future.
Year-by-Year Total Returns as of 12/31*
[BAR CHART APPEARS HERE]
26.47% 19.00% -4.08%
1996 1997 1998
Average Annual Total Returns
12 mos. From
ended 12/31/98 inception
Small Cap Equity -4.08% 11.67%
Russell 2000
Stock Index -2.55% 11.37%
* Results are shown on a calendar year basis; the Portfolio's fiscal year,
however, in June 30. The Portfolio's return for calendar year 1999, as of
September 30, 1999 was 5.07% (annualized).
Best quarter: 4th Qtr 1998 20.91%
Worst quarter: 3rd Qtr 1998 -21.10%
Shareholder Expenses
The following table describes the fees and expenses that you may pay if you buy
and hold shares of the Portfolio.
Shareholder Fees
(Fees paid directly from your investment, expressed as a percentage of offering
price)
Maximum Sales Charges............................................... None
Maximum Redemption Fee.............................................. None
Annual Operating Expenses
(Expenses that are deducted from the Portfolio's assets, expressed as a
percentage of average net assets)
Management Fees..................................................... .43%
Other Expenses...................................................... .19%
Total Portfolio
Operating Expenses.................................................. .62%
Example: This Example is intended to help you compare the cost of investing in
the Portfolio with the cost of investing in other mutual funds. The Example
assumes that you invest $10,000 in the Portfolio for the time periods indicated
and then redeem all of your shares at the end of those periods. The Example also
assumes that your investment has a 5% return each year and that the Portfolio's
operating expenses remain the same. Although your actual cost may be higher or
lower, based on these assumptions, your costs would be:
1 Year........................................................ $ 63
3 Years....................................................... $199
5 Years....................................................... $346
10 Years....................................................... $774
_______________________
13
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Fund Description and Risk Factors -- The International Equity Portfolio
================================================================================
Investment Objective. The investment objective of this Portfolio is to maximize
total return, consisting of capital appreciation and current income, by
investing primarily in a diversified portfolio of equity securities of non-U.S.
issuers. Under normal market conditions, at least 65% of the Portfolio's total
assets will be invested in equity securities of issuers located in at least
three countries other than the United States.
Principal Investment Strategies. The International Equity Portfolio is designed
to invest in the equity securities of non-U.S. issuers. Although the Portfolio
may invest anywhere in the world, the Portfolio is expected to invest primarily
in the equity markets included in the Morgan Stanley Capital International
Europe, Australia and Far East Index ("EAFE Index"). Currently, these markets
are Australia, Austria, Belgium, Denmark, France, Finland, Germany, Hong Kong,
Ireland, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, , Singapore,
Spain, Sweden, Switzerland and the United Kingdom. Consistent with its
objective, the Portfolio will invest in both dividend-paying securities and
securities that do not pay dividends. The Portfolio may engage in transactions
involving "derivative instruments" -- forward foreign currency exchange
contracts, option or futures contracts or similar instruments -- in order to
hedge against fluctuations in the relative value of the currencies in which
securities held by the Portfolio are denominated or to achieve market exposure
pending investment. The International Equity Portfolio may also invest in high-
quality short-term debt instruments (including repurchase agreements)
denominated in U.S. or foreign currencies for temporary purposes. Up to 10% of
the assets of The International Equity Portfolio may be invested in securities
of companies located in emerging market countries.
Specialist Managers. Brinson Partners, Inc. ("Brinson") and Artisan Partners,
LLP ("Artisan") currently provide portfolio management services to this
Portfolio.
The Brinson Investment Brinson is a fundamental research oriented
Selection Process investor. Comparison of market price to its
assessment of fundamental value is the
cornerstone of Brinson's investment
philosophy. Brinson blends fundamental
security analysis with quantitative
analytical tools and modern portfolio theory.
Brinson's equity research and strategy focus
on the elements that explain portfolio
performance: country sensitivity, currency
exposures, industry weightings, common risk
factors and individual stock selections.
Portfolio construction integrates insights
associated with these elements to build
optimal equity portfolio consistent with the
Portfolio's objective.
The Artisan Investment In selecting investments for the Portfolio,
Selection Process Artisan emphasizes a bottom up investment
approach. In the context of The International
Equity Portfolio, this means that Artisan
focuses on identifying companies, including
companies located in emerging market
countries, that seem well positioned for
strong, sustainable growth, based on an
fundamental securities analysis and other
factors relating to individual issuers.
Artisan's research method favors countries
and regions with improving or rapidly
expanding economies, taking into account
factors such as gross domestic product
growth, corporate profitability, economic
climate and social change and avoids
securities and markets that appear
overvalued.
Principal Investment Risks. The principal risks associated with an investment in
this Portfolio are:
. Market Risk -- changes in the market value of a security in response to
market factors and the equity markets can be volatile.
. Foreign Securities Risk -- An investment in the Portfolio is subject to
risks that are not normally associated with investments in the securities
of U.S. companies. These include risks relating to political, social and
economic developments abroad and differences between U.S. and foreign
regulatory requirements and market practices.
. Emerging Markets Risk -- Risks associated with foreign investments may be
intensified in the case of investments in emerging market countries, whose
political, legal and economic systems are less developed and less stable
than those of more developed nation. Such investments are often less liquid
and more volatile than securities issued by companies located in developed
nations.
. Derivative Risk -- the value of derivative instruments may rise or fall
more rapidly than other investments and there is a risk that the Portfolio
may lose more than the amount invested in the derivative instrument in the
first place. Derivative instruments also involve the risk that other
parties to the derivative contract may fail to meet their obligations,
which could cause losses to the Portfolio.
. Foreign Currency Risk -- Securities denominated in foreign currencies are
subject to the risk that the value of the foreign currency will fall in
relation to the U.S. dollar. Currency exchange rates can be volatile and
can be affected by, among other factors, the general economics of a
country, or the actions of the U.S. or foreign governments or central
banks. In addition, transaction expenses related to foreign securities,
including custody fees, are generally more costly than is the case for
domestic securities.
14
<PAGE>
15
<PAGE>
Performance and Shareholder Expenses -- The International Equity Portfolio
================================================================================
The chart and table on this page show how The International Equity Portfolio has
performed and how its performance has varied from year to year. The bar chart
gives some indication of risk by showing changes in the Portfolio's yearly
performance for each full calendar year since the Portfolio's inception. The
table accompanying the bar chart compares the Portfolio's performance over time
to that of the EAFE Index. Both the bar chart and the table assume all dividends
and distributions were reinvested in shares of the Portfolio. Of course, past
performance does not indicate how the Portfolio will perform in the future. All
of the information below -- the bar chart, tables and example --assume the
reinvestment of all dividends and distributions in shares of the Portfolio. Of
course, past performance does not indicate how the Portfolio will perform in the
future.
<TABLE>
<CAPTION>
<S> <C>
Year-by-Year Total Returns as of 12/31*
13.85% 5.52% 15.57% Average Annual Total Returns
1996 1997 1998 12 mos. From
ended 12/31/98 inception
International
Equity 15.57% 12.50%
EAFE Index 20.33% 10.31%
</TABLE>
* Results are shown on a calendar year basis; the Portfolio's fiscal year,
however, is June 30. The Portfolio's return for 1999, as of September 30, 1999
was 5.17% (annualized).
Best quarter: 4th Qtr 1998 18.05%
Worst quarter: 3rd Qtr 1998 -13.62%
Shareholder Expenses
The following table describes the fees and expenses that you may pay if you buy
and hold shares of the Portfolio.
Shareholder Fees
(Fees paid directly from your investment, expressed as a percentage of offering
price)
Maximum Sales Charges............................................... None
Maximum Redemption Fee.............................................. None
Annual Operating Expenses
(Expenses that are deducted from the Portfolio's assets, expressed as a
percentage of average net assets)
Management Fees*.................................................... .45%
Other Expenses...................................................... .25%
Total Portfolio
Operating Expenses.................................................. .70%
* Before July 26, 1999, the Portfolio had only one Specialist Manager. The
addition of a second Specialist Manager resulted in an increase in the
management fee paid by The International Equity Portfolio. Figures shown have
been restated to reflect the impact of this increase, had it been in effect
during the fiscal year ended 6/30/99.
Example: This Example is intended to help you compare the cost of investing in
the Portfolio with the cost of investing in other mutual funds. The Example
assumes that you invest $10,000 in the Portfolio for the time periods indicated
and then redeem all of your shares at the end of those periods. The Example also
assumes that your investment has a 5% return each year and that the Portfolio's
operating expenses remain the same. Although your actual cost may be higher or
lower, based on these assumptions, your costs would be:
1 Year........................................................ $ 72
3 Years....................................................... $224
5 Years....................................................... $390
10 Years....................................................... $871
_________________
16
<PAGE>
Fund Description and Risk Factors -- The Limited Duration Municipal Bond
Portfolio
================================================================================
Investment Objective. The investment objective of this Portfolio is to provide a
high level of current income exempt from Federal income tax, consistent with the
preservation of capital. The Portfolio seeks to achieve this objective by
investing primarily in a diversified portfolio of short-term fixed income
securities the interest on which is exempt from regular Federal income tax.
These securities, which include both securities issued by municipalities and so-
called "private activity bonds" are referred to as "Municipal Securities."
Principal Investment Strategies. It is a fundamental policy of the Portfolio
that, under normal circumstances, at least 80% of its net assets will be
invested in Municipal Securities. Municipal Securities acquired for the
Portfolio will generally be rated within one of the three highest rating
categories by one of the major independent rating agencies or are in the view of
the Specialist Manager, of comparable quality. The Portfolio is, however,
authorized to invest up to 15% in Municipal Securities rated in the fourth
highest category. In order to maintain liquidity or in the event that the
Portfolio's Specialist Manager believes that securities meeting the Portfolio's
investment objective and policies are not otherwise readily available for
purchase, the Portfolio is authorized to invest up to 20% of its net assets in
taxable instruments. Under normal circumstances, the Portfolio will have a
duration of less than 4 years. Duration is a concept that incorporates a bond's
yield, coupon interest payments, final maturity and call features into one
measure that is used by investment professionals as a more precise alternative
to the concept of term-to-maturity. As a point of reference, the maturity of a
current coupon bond with a 3 year duration is approximately 3.5 years and the
maturity of a current coupon bond with a 6 year duration is approximately 9
years.
Specialist Managers. Morgan Grenfell Incorporated ("Morgan Grenfell") currently
provides portfolio management services to this Portfolio.
The Morgan Grenfell In selecting securities for investment by
Investment Selection Process the Portfolio, Morgan Grenfell generally uses
a bottom-up approach. This approach focuses
on individual security selection rather than
relying on interest rate forecasts. Morgan
Grenfell's analytic process involves
assigning a relative value, based on
creditworthiness, cash flow and price, to
each bond. Credit analysis is then used to
determine the issuer's ability to fulfill its
obligations. By comparing each bond to a U.S.
Treasury instrument, Morgan Grenfell then
seeks to identify whether the market price of
the bond is an accurate reflection of its
intrinsic value. Municipal Securities may be
undervalued for a variety of reasons, such as
market inefficiencies relating to lack of
market information about particular
securities and sectors, supply and demand
shifts and lack of market penetration by some
issuers. In the event any security held by
the Portfolio is downgraded below the
Portfolio's authorized rating categories,
Morgan Grenfell will review the security and
determine whether to retain or dispose of
that security.
Principal Investment Risks. The principal risks associated with an investment in
this Portfolio are:
. Interest Rate Risk -- One of the primary risks associated with an
investment in the Portfolio is the risk that the value of Municipal
Securities held in the Portfolio will decline with changes in interest
rates. Although The Limited Duration Municipal Bond Portfolio can be
expected to be less volatile in response to changes in interest rates than
an investment with a longer duration, such as The Intermediate Term
Municipal Bond Portfolio, its yield can also be expected to be lower than
such longer term investments. In addition, when interest rates are
declining, issuers of securities held by the Portfolio may prepay principal
earlier than scheduled. As a result of this prepayment risk, the Portfolio
may have to reinvest these prepayments at those lower rates, thus reducing
its income.
. Prepaymet Risk -- When interest rates are declining, issuers of securities
held by the Portfilio may prepay principal earlier than scheduled. As a
result of this prepayment risk, the Portfolio may have to reinvest these
prepayments at those lower rates, thus reducing its income.
. Credit Risk -- An investment in the Portfolio also involves the risk that
the issuer of a Municipal Security will not make principal or interest
payments when they are due, or that the value of the Municipal Securities
will decline because of a market perception that the issuer may not make
payments on time. This risk is greater for lower quality bonds, such as
those rated in the fourth highest category.
. AMT Risk -- There is no limit on purchases of Municipal Securities the
interest on which is a preference item for purposes of the Federal
alternative minimum tax. Moreover, the Portfolio may invest up to 20% of
its net assets in taxable securities. As a result, a signinficant portion
of the dividends paid by the Portfolio to shareholders who are subject to
AMT may be subject to Federal income tax.
17
<PAGE>
18
<PAGE>
Performance and Shareholder Expenses -- The Limited Duration Municipal Bond
===========================================================================
Portfolio
=========
The chart and table on this page show how the Portfolio has performed and how
its performance has varied from year to year. The bar chart gives some
indication of risk by showing changes in the Portfolio's yearly performance each
full calendar year since its inception. The accompanying table compares the
Portfolio's performance over time to that of the Merrill Lynch 1-3 Year
Municipal Index, an unmanaged index generally representative of U.S. Municipal
bonds. ("Merrill Lynch 1-3 Index"). Of course, past performance does not
indicate how the Portfolio will perform in the future. All of the information
below -- the bar chart, tables and example -- assume the reinvestment of all
dividends and distributions in shares of the Portfolio. Of course, past
performance does not indicate how the Portfolio will perform in the future.
<TABLE>
<CAPTION>
<S> <C>
Year-by-Year Total Returns as of 12/31*
4.55% 5.54% 4.38% Average Annual Total Returns
1996 1997 1998 12 mos. From
ended 12/31/98 inception
Limited
Duration 4.38% 5.17%
Merrill Lynch
1-3 Index 5.01% 4.52%
</TABLE>
* Results are shown on a calendar year basis; the Portfolio's fiscal year,
however, is June 30. The Portfolio's return for 1999, as of September 30, 1999
are 1.50% (annualized).
Best quarter: 3rd Qtr 1998 1.70%
Worst quarter: 4th Qtr 1998 0.53%
Shareholder Expenses
The following table describes the fees and expenses that you may pay if you buy
and hold shares of the Portfolio.
Shareholder Fees
(Fees paid directly from your investment, expressed as a percentage of offering
price)
Maximum Sales Charges............................................... None
Maximum Redemption Fee.............................................. None
Annual Operating Expenses
(Expenses that are deducted from the Portfolio's assets, expressed as a
percentage of average net assets)
Management Fees..................................................... .25%
Other Expenses...................................................... .21%
Total Portfolio
Operating Expenses.................................................. .46%
Example: This Example is intended to help you compare the cost of investing in
the Portfolio with the cost of investing in other mutual funds. The Example
assumes that you invest $10,000 in the Portfolio for the time periods indicated
and then redeem all of your shares at the end of those periods. The Example also
assumes that your investment has a 5% return each year and that the Portfolio's
operating expenses remain the same. Although your actual cost may be higher or
lower, based on these assumptions, your costs would be:
1 Year........................................................ $ 47
3 Years....................................................... $148
5 Years....................................................... $258
10 Years....................................................... $579
_____________________________
19
<PAGE>
Fund Description and Risk Factors -- The Intermediate Term Municipal Bond
=========================================================================
Portfolio
=========
Investment Objective. The investment objective of this Portfolio is to provide a
high level of current income exempt from Federal income tax, consistent with the
preservation of capital. The Portfolio seeks to achieve this objective by
investing primarily in a diversified portfolio of intermediate-term fixed income
securities the interest on which is exempt from regular Federal income tax.
These securities, which include both securities issued by municipalities and so-
called "private activity bonds" are referred to as "Municipal Securities."
Principal Investment Strategies. It is a fundamental policy of the Portfolio
that, under normal circumstances, at least 80% of its net assets will be
invested in Municipal Securities. Municipal Securities acquired for the
Portfolio will generally be rated within one of the three highest rating
categories by one of the major independent rating agencies, or are in the view
of the Specialist Manager, of comparable quality deemed of comparable quality.
The Portfolio is, however, authorized to invest up to 15% in Municipal
Securities that are rated in the fourth highest category. In order to maintain
liquidity or in the event that the Portfolio's Specialist Manager believes that
securities meeting the Portfolio's investment objective and policies are not
otherwise readily available for purchase, the Portfolio is authorized to invest
up to 20% of its net assets in taxable instruments. Municipal Securities
purchased for the Portfolio will have varying maturities, but under normal
circumstances the Portfolio will have an effective dollar weighted average
portfolio maturity of between 5 and 10 years.
Specialist Managers. Morgan Grenfell Incorporated ("Morgan Grenfell") currently
provides portfolio management services to this Portfolio.
The Morgan Grenfell In selecting securities for investment by
Investment Selection Process the Portfolio, Morgan Grenfell generally uses
a bottom-up approach. This approach focuses
on individual security selection rather than
relying on interest rate forecasts. Morgan
Grenfell's analytic process involves
assigning a relative value, based on
creditworthiness, cash flow and price, to
each bond. Credit analysis is then used to
determine the issuer's ability to fulfill its
obligations. By comparing each bond to a U.S.
Treasury instrument, Morgan Grenfell then
seeks to identify whether the market price of
the bond is an accurate reflection of its
intrinsic value. Municipal Securities may be
undervalued for a variety of reasons, such as
market inefficiencies relating to lack of
market information about particular
securities and sectors, supply and demand
shifts and lack of market penetration by some
issuers. In the event any security held by
the Portfolio is downgraded below the
Portfolio's authorized rating categories,
Morgan Grenfell will review the security and
determine whether to retain or dispose of
that security.
Principal Investment Risks. The principal risks associated with an investment in
this Portfolio are:
. Interest Rate Risk -- One of the primary risks associated with an
investment in the Portfolio is the risk that the value of Municipal
Securities held in the Portfolio will decline with changes in interest
rates. Prices of fixed income securities with longer effective maturities
are more sensitive to interest rate changes than those with shorter
effective maturities. Accordingly, the yield of The Intermediate Term
Municipal Bond Portfolio can be expected to be somewhat more volatile in
response to changes in interest rates than its shorter-term counterpart,
The Limited Duration Municipal Bond Portfolio. In addition, when interest
rates are declining, issuers of securities held by the Portfolio may prepay
principal earlier than scheduled. As a result of this prepayment risk, the
Portfolio may have to reinvest these prepayments at those lower rates, thus
reducing its income.
. Prepayment Risk -- When interest rates are declining, issuers of securities
held by the Portfolio may prepay principal earlier than scheduled. As a
result of this prepayment risk, the Portfolio may have to reinvest these
prepayments at those lower rates, thus reducing its income.
. Credit Risk -- An investment in the Portfolio also involves the risk that
the issuer of a Municipal Security will not make principal or interest
payments when they are due, or that the value of the Municipal Securities
will decline because of a market perception that the issuer may not make
payments on time. This risk is greater for lower quality bonds, such as
those rated in the fourth highest category.
. AMT Risk -- There is no limit on purchases of Municipal Securities the
interest on which is a preference item for purposes of the Federal
alternative minimum tax. Moreover, the Portfolio may invest up to 20% of
its net assets in taxable securities. As a result, a significant portion of
the dividends paid by the Portfolio to shareholders who are subject to AMT
may be subject to Federal income tax.
20
<PAGE>
21
<PAGE>
Performance and Shareholder Expenses -- The Intermediate Term Municipal Bond
============================================================================
Portfolio
=========
Performance. The Intermediate Term Municipal Bond Portfolio commenced operations
on July 1, 1998. During the period since the Portfolio's inception, its
performance benchmark has been the Lehman Brothers 5 Year Government Index,
("Lehman 5 Year Gov't. Index") an unmanaged index of municipal securities that
is widely recognized as indicator of performance of types of securities in which
this Portfolio invests. Because the Portfolio has experienced less than a full
calendar year of operations, illustrations of the Portfolio's performance
against its benchmark, such as those presented for The Limited Duration
Municipal Bond Portfolio would not be meaningful and such illustrations are not
presented here. You may refer to the Financial Highlights section of this
prospectus for certain financial information about the Portfolio. Of course,
past performance does not indicate how the Portfolio will perform in the future.
Shareholder Expenses. The following table and accompanying example describe the
fees and expenses that you may pay if you buy and hold shares of the
Portfolio.
Shareholder Fees
(Fees paid directly from your investment, expressed as a percentage of offering
price)
Maximum Sales Charges........................... None
Maximum Redemption Fee.......................... None
Annual Operating Expenses
(Expenses that are deducted from the Portfolio's assets, expressed as a
percentage of average net assets)
Management Fees................................. 33%
Other Expenses.................................. 22%
Total Portfolio
Operating Expenses.............................. 55%
Example: This Example is intended to help you compare the cost of investing in
the Portfolio with the cost of investing in other mutual funds. The Example
assumes that you invest $10,000 in the Portfolio for the time periods indicated
and then redeem all of your shares at the end of those periods. The Example also
assumes the reinvestment of all dividends and distributions in shares of the
Portfolio and that your investment has a 5% return each year and that the
Portfolio's operating expenses remain the same. Although your actual cost may be
higher or lower, based on these assumptions, your costs would be:
1 Year .................... $ 56
3 Years................... $176
5 Years................... $307
10 Years................... $689
22
<PAGE>
Fund Description and Risk Factors -- The Fixed Income Portfolio
================================================================================
Investment Objective. The investment objective of this Portfolio is to provide a
high level of current income consistent with the preservation of capital. The
Portfolio seeks to achieve this objective by investing primarily in a
diversified portfolio of intermediate-term fixed income securities, but may
purchase securities with any stated maturity.
Principal Investment Strategies. The Portfolio will normally invest at least 80%
of its assets in fixed income securities of all types. These securities, which
may be issued by corporations, banks, government agencies or other issuers, may
have fixed, floating or variable rates of interest or include put features that
afford their holders the right to sell the security at face value prior to
maturity. From time to time, a substantial portion of the Portfolio may be
invested in mortgage-backed or asset-backed issues. Investments in U.S. dollar
denominated securities of non-U.S. issuers will not exceed 25% of its total
assets. Under normal conditions the Portfolio may hold up to 20% of its total
assets in cash or money market instruments in order to maintain liquidity, or in
the event that the Specialist Manager determines that securities meeting the
Portfolio's investment objective and policies are not otherwise readily
available for purchase. The Fixed Income Portfolio invests primarily in fixed
income securities that, at the time of purchase, are either rated in one of
three highest rating categories assigned by one of the major independent rating
agencies, or deemed of comparable quality. The Portfolio is, however, authorized
to invest up to 15% in fixed income securities that are rated in the fourth
highest category or are in the view of the Specialist Manager, of comparable
quality. Securities purchased for the Portfolio will have varying maturities,
but under normal circumstances the Portfolio will have an effective dollar
weighted average portfolio maturity of between 5 and 10 years.
Specialist Managers. Morgan Grenfell Incorporated ("Morgan Grenfell") currently
provides portfolio management services to this Portfolio. Further information
about this Portfolio's Specialist Manager appears on page 24 of this Prospectus.
The Morgan Grenfell
Investment Selection Process
In selecting securities for investment by the Portfolio, Morgan Grenfell
generally uses a bottom-up approach. This approach focuses on individual
security selection rather than relying on interest rate forecasts. Morgan
Grenfell's analytic process involves assigning a relative value, based on
creditworthiness, cash flow and price, to each bond. Credit analysis is then
used to determine the issuer's ability to fulfill its obligations. By comparing
each bond to a U.S. Treasury instrument, Morgan Grenfell then seeks to identify
whether the market price of the bond is an accurate reflection of its intrinsic
value. Fixed income securities may be undervalued for a variety of reasons, such
as market inefficiencies relating to lack of market information about particular
securities and sectors, supply and demand shifts and lack of market penetration
by some issuers. In the event any security held by the Portfolio is downgraded
below the Portfolio's authorized rating categories, Morgan Grenfell will review
the security and determine whether to retain or dispose of that security.
Principal Investment Risks. The principal risks associated with an investment in
this Portfolio are:
. Interest Rate Risk -- One of the primary risks associated with an investment
in the Portfolio is the risk that the value of fixed income securities held
in the Portfolio will decline with changes in interest rates. Prices of fixed
income securities with longer effective maturities are more sensitive to
interest rate changes than those with shorter effective maturities.
Accordingly, the yield of The Fixed Income Portfolio can be expected to be
somewhat more volatile in response to changes in interest rates than shorter-
term investment vehicles.
. Foreign Securities Risk - The value of the Portfolio's holdings of foreign
securities are subject to risks which are not normally associated with
investments in the securities of U.S. companies. These include risks relating
to political, social and economic developments abroad and differences between
U.S. and foreign regulatory requirements and market practices. Securities
that are denominated in foreign currencies are subject to the further risk
that the value of the foreign currency will fall in relation to the U.S.
dollar and/or will be affected by volatile currency markets or actions of
U.S. or foreign governments or central banks.
. Credit Risk -- An investment in the Portfolio also involves the risk that the
issuer of a Municipal Security will not make principal or interest payments
when they are due, or that the value of the Municipal Securities will decline
because of a market perception that the issuer may not make payments on time.
This risk is greater for lower quality bonds, such as those rated in the
fourth highest category.
. Prepayment Risk -- When interest rates are declining, issuers of securities
held by the Portfolio may prepay principal earlier than scheduled. As a
result of this risk, the Portfolio may have to reinvest these prepayments at
those lower rates, thus reducing its income. Mortgage-related and asset-
backed securities are especially sensitive to prepayment.
. Extension Risk -- These securities are also subject to the risk that payment
on the loans underlying the securities held by the Portfolio will be made
more slowly when interest rates are rising. This could cause the market value
of the securities to fall.
23
<PAGE>
24
<PAGE>
Performance and Shareholder Expenses -- The Fixed Income Portfolio
================================================================================
Performance. The Fixed Income Portfolio commenced operations on July 1, 1998.
During the period since the Portfolio's inception, its performance benchmark has
been the Lehman Aggregate Bond Index ("Lehman Aggregate Bond Index") a widely
recognized, unmanaged bond index. Because the Portfolio has experienced less
than a full calendar year of operations, illustrations of the Portfolio's
performance against its benchmark, such as those presented for The Limited
Duration Municipal Bond Portfolio, would not be meaningful and such
illustrations are not presented here. You may refer to the Financial Highlights
section of this prospectus, however, for certain financial information about the
Portfolio. Of course, past performance does not indicate how the Portfolio will
perform in the future.
Shareholder Expenses
The following table describes the fees and expenses that you may pay if you buy
and hold shares of the Portfolio.
Shareholder Fees
(Fees paid directly from your investment, expressed as a
percentage of offering price)
Maximum Sales Charges....................... None
Maximum Redemption Fee...................... None
Annual Operating Expenses
(Expenses that are deducted from the Portfolio's assets, Expressed as a
percentage of average net assets)
Management Fees............................. .33%
Other Expenses.............................. .17%
Total Portfolio
Operating Expenses.......................... .50%
Example: This Example is intended to help you compare the cost of investing in
the Portfolio with the cost of investing in other mutual funds. The Example
assumes that you invest $10,000 in the Portfolio for the time periods indicated
and then redeem all of your shares at the end of those periods. The Example also
assumes the reinvestment of all dividends and distributions in shares of the
Portfolio and that your investment has a 5% return each year and that the
Portfolio's operating expenses remain the same. Although your actual cost may be
higher or lower, based on these assumptions, your costs would be:
1 Year............................... $ 51
3 Years.............................. $ 160
5 Years.............................. $ 280
10 Years.............................. $ 628
25
<PAGE>
More About Investment Risk and Strategies
================================================================================
The following is a summary of the types of investments that the Trust's
Portfolio's may make. A more extensive discussion appears in the Statement of
Additional Information.
About Equity Securities. The prices of equity and equity-related securities will
fluctuate -- sometimes dramatically -- over time and a Portfolio could lose a
substantial part, or even all, of its investment in a particular issue. The term
equity securities includes common and preferred stock; equity-related securities
refers to securities that may be convertible into common stock or preferred
stock, or securities that carry the right to purchase common or preferred stock.
Price fluctuations may reflect changes in the issuing company's financial
condition, overall market conditions or even perceptions in the marketplace
about the issuing company or economic trends.
Small Company Risk. Equity securities of smaller companies may be subject to
more abrupt or erratic price movements than larger, more established companies.
These securities are often traded in the over-the-counter markets and, if listed
on national or regional exchanges, may not be traded in volumes typical for such
exchanges. This may make them more difficult to sell at the time and at a price
that is desirable. Prices of convertible securities may, in addition, also be
affected by prevailing interest rates, the credit quality of the issuer and any
call provisions.
About Foreign Securities. Equity securities of non- U.S. companies are subject
to the same risks as other equity or equity-related securities. Foreign
investments also involve additional risks. These include the unavailability of
financial information or the difficulty of interpreting financial information
prepared under foreign accounting standards; less liquidity and more volatility
in foreign securities markets; the possibility of expropriation; the imposition
of foreign withholding and other taxes; the impact of foreign political, social
or diplomatic developments; limitations on the movement of funds or other assets
between different countries; difficulties in invoking legal process abroad and
enforcing contractual obligations; and the difficulty of assessing economic
trends in foreign countries. Transactions in markets overseas are generally more
costly than those associated with domestic securities of equal value. Certain
foreign governments levy withholding taxes against dividend and interest income.
Although in some countries a portion of these taxes is recoverable, the non-
recovered portion of foreign withholding taxes will reduce the Portfolio's
income.
Foreign Currency Risk. The prices of securities denominated in a foreign
currency will also be affected by the value of that currency relative to the
U.S. dollar. Exchange rate movements can be large and long-lasting, and can
affect either favorably or unfavorably the value of securities held in the
Portfolio. Such rate movements may result from actions taken by foreign
governments or central banks, actions of the U.S. government, or as a result of
speculation in the currency markets. On January 1, 1999, the European Economic
and Monetary Union introduced a single currency to be used by all of its member
states. This event has brought about some uncertainty in the international
markets. These include the legal treatment of certain outstanding financial
contracts after January 1, 1999, the establishment of exchange rates and the
creation of suitable clearing and settlement payment systems for the new
currency. Companies that issue securities have until July 1, 2002 to
redenominate corporate stocks and bonds from national currencies to the Euro
and, until January 2002, the Euro will only exist as book entries in financial
institutions. The lack of policies and laws or regulations in participating
countries makes is difficult to assess all of the processing and systems changes
that will be required as a result of the Euro conversion or the impact the
conversion process may have on international investors, including mutual
funds.
Foreign Government Securities. Foreign governments, as well as supranational or
quasi-governmental entities such as the World Bank for example, may issue fixed
income securities. Investments in these securities involve both the risks
associated with any fixed income investment and the risks associated with an
investment in foreign securities. In addition, a governmental entity's ability
or willingness to repay principal and interest due in a timely manner may be
affected not only by economic factors but also by political circumstances either
internationally or in the relevant region.
About Fixed-Income Securities. Fixed income securities -- sometimes referred to
as "debt securities" -- include bonds, notes (including structured notes),
mortgage-related and asset-backed securities, convertible and preferred
securities as well as short-term debt instruments, often referred to as money
market instruments. Fixed income securities may be issued by U.S. or foreign
corporations, banks, governments, government agencies or subdivisions or other
entities. A fixed-income security may have all types of interest rate payment
and reset terms, including fixed rate, adjustable rate, zero coupon, contingent,
deferred, payment in-kind and auction rate features. All of these factors -- the
type of instrument, the issuer and the payment terms will affect the volatility
and the risk of loss associated with a particular fixed-income issue.
Interest Rate Risk. Although the term fixed income securities includes a broad
range of sometimes very different investments, all fixed income securities are
subject to the risk that their value will fluctuate as interest rates in the
overall economy rise and fall. The value of fixed-income securities will tend to
decrease when interest rates are rising and, conversely, will tend to increase
when interest rates fall. Thus, in periods of falling interest rates, the yield
of a Portfolio that invests in fixed income securities will tend to be higher
than prevailing market rates, and in periods of rising interest rates, the yield
of the Portfolio will tend to be lower. Shorter term securities are generally
less sensitive to interest rate changes than longer term securities.
Prepayment Risk and Extension Risk. Prepayments of fixed-income securities will
also affect their value. When interest rates are falling, the issuers of fixed-
income securities may repay principal earlier than expected. As a result, the
Portfolio may have to reinvest these prepayments at those lower rates, thus
reducing its income. In the case of mortgage related or asset backed issues --
securities backed by pools of loans -- payments due on the security may also be
received earlier than expected. This may happen when market interest rates are
falling and the underlying loans are being prepaid. Conversely payments may be
received more slowly when interest rates are rising, as
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prepayments on the underlying loans slow. This may affect the value of the
mortgage or asset-backed issue if the market comes to view the interest rate to
be too low relative to the term of the investment. Either situation can affect
the value of the instrument adversely.
Credit Risk. Credit risk is the risk that an issuer (or in the case of certain
securities, the guarantor or counterparty) will be unable to make principal and
interest payments when due. The creditworthiness of an issuer may be affected by
a number of factors, including the financial condition of the issuer (or
guarantor) and, in the case of foreign issuers, the financial condition of the
region. Fixed income securities may be rated by one or more nationally
recognized statistical rating organization, such as S&P and Moody's. These
ratings represent the judgment of the rating organization about the safety of
principal and interest payments. They are not guarantees of quality and may be
subject to change even after a Portfolio has acquired the security. Not all
fixed income securities are rated, and unrated securities may be acquired by The
Fixed Income Portfolio if the relevant Specialist Manager determines that their
quality is comparable to rated issues.
When-issued Securities. Fixed-income securities may be purchased for future
delivery but at a predetermined price. The market value of securities purchased
on a "when-issued" basis may change before delivery; this could result in a gain
or loss to the purchasing Portfolio.
Mortgage-Backed and Asset-Backed Securities. Mortgage related securities
represent participations in (or are backed by) loans secured by real property.
Asset-backed securities represent participations in (or are backed by)
installment sales or loan contracts, leases, credit card receivables or other
receivables. Because of their derivative structure -- the fact that their value
is derived from the value of the underlying assets -- these securities are
particularly sensitive to prepayment and extension risks noted above. Small
changes in interest or prepayment rates may cause large and sudden price
movements. These securities can also become illiquid and hard to value in
declining markets.
Real Estate Investment Trusts. Each of the Equity Portfolios may invest up to
10% of its assets in equity interests issued by real estate investment trusts
("REITs"). REITs are pooled investment vehicles that invest the majority of
their assets directly in real property and derive income primarily from the
collection of rents. Equity REITs can also realize capital gains by selling
property that has appreciated in value. Similar to investment companies, REITs
are not taxed on income distributed to shareholders provided they comply with
several requirements of the Code. A Portfolio will indirectly bear its
proportionate share of expenses incurred by REITs in which a Portfolio invests
in addition to the expenses incurred directly by a Portfolio.
Municipal Securities. Municipal Securities -- fixed income securities issued by
local, state and regional governments or other governmental authorities --may be
issued for a wide range of purposes, including construction of public facilities
or short-term funding and may be issued for varying maturities. Interest on
Municipal Securities in which The Limited Duration Municipal Bond Portfolio and
The Intermediate Term Municipal Bond Portfolio may invest will be exempt from
regular Federal income taxes but may be a tax preference item for purposes of
computing alternative minimum tax ("AMT"). The Fixed Income Portfolio may invest
in Municipal Securities regardless of whether the interest is taxable. The tax
treatment that will be accorded to interest payable by issuers of Municipal
Securities will depend on the specific terms of the security involved.
Private Activity and Industrial Revenue Bonds. Municipal Bonds may be "general
obligations" of their issuers, the repayment of which is secured by the issuer's
pledge of full faith, credit and taxing power. Municipal Bonds may be payable
from revenues derived from a particular facility that will be operated by a non-
government user. The payment of principal and interest on these bonds is
generally dependent solely on the ability of the private user or operator to
meet its financial obligations and the pledge, if any, of real or personal
property securing that obligation.
Credit Supports. The creditworthiness of particular Municipal Securities will
generally depend on the creditworthiness of the entity responsible for payment
of interest on the Municipal Bond. Municipal Securities also include instruments
issued by financial institutions that represent interests in Municipal
Securities held by that institution -- sometimes referred to as participation
interests -- and securities issued by a municipal issuer that are guaranteed or
otherwise supported by a specified financial institution. Because investors will
generally look to the creditworthiness of the supporting financial institution,
changes in the financial condition of that institution or ratings assigned by
rating organizations of its securities, may affect the value of the instrument.
About Temporary Investment Practices. It is the intention of the Trust that each
of the Portfolios be fully invested in accordance with its respective investment
objectives and policies at all times. To maintain liquidity pending investment,
however, the Portfolios are authorized to invest up to 20% of their respective
assets in short-term money market instruments issued, sponsored or guaranteed by
the U.S. Government, its agencies or instrumentalities. Such securities are
referred to in this prospectus as U.S. Government Securities. The portfolios may
also invest repurchase agreements secured by U.S. Government Securities or
repurchase agreements secured by such securities, or short-term money market
instruments of other issuers, including corporate commercial paper, and variable
and floating rate debt instruments, that have received, or are comparable in
quality to securities that have received, one of the two highest ratings
assigned by at least one recognized rating organization. Under extraordinary
market or economic conditions, all or any portion of a Portfolio's assets may be
invested in short-term money market instruments for temporary defensive
purposes.
About Hedging Strategies. Each of the Portfolios may engage in certain
strategies ("Hedging Strategies") designed to reduce certain risks that would
otherwise be associated with their respective securities investments, and/or in
anticipation of future purchases and to gain market exposure pending direct
investment in securities. These strategies include the use of options on
securities and securities indices, options on stock index and interest rate
futures contracts and options on such futures contracts. Both the Equity
Portfolios and the Fixed Income Portfolios may also use forward foreign currency
contracts in connection with the purchase and sale of those securities,
denominated in foreign currencies, in which each is permitted to invest. In
addition, The International Equity Portfolio and The Fixed Income Portfolio may
use foreign currency options and foreign currency futures to hedge against
fluctuations in the relative value of the currencies in which securities held by
these Portfolios are denominated. A Portfolio may invest in the instruments
noted above (collectively, "Hedging
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Instruments") only in a manner consistent with its investment objective and
policies. A Portfolio may not invest more than 10% of its total assets in option
purchases and may not commit more than 5% of its net assets to margin deposits
on futures contracts and premiums for options on futures contracts. The
Portfolios may not use Hedging Instruments for speculative purposes. Further
information relating to the use of Hedging Instruments, and the limitations on
their use, appears in the Statement of Additional Information.
There are certain overall considerations to be aware of in connection with the
use of Hedging Instruments in any of the Portfolios. The ability to predict the
direction of the securities or currency markets and interest rates involves
skills different from those used in selecting securities. Although the use of
various Hedging Instruments is intended to enable each of the Portfolios to
hedge against certain investment risks, there can be no guarantee that this
objective will be achieved. For example, in the event that an anticipated change
in the price of the securities (or currencies) that are the subject of the
strategy does not occur, it may be that the Portfolio employing the Hedging
Strategy would have been in a better position had it not used such a strategy at
all. Moreover, even if the Specialist Manager correctly predicts interest rate
or market price movements, a hedge could be unsuccessful if changes in the value
of the option or futures position do not correspond to changes in the value of
investments that the position was designed to hedge. Liquid markets do not
always exist for certain Hedging Instruments and lack of a liquid market for any
reason may prevent a Portfolio from liquidating an unfavorable position. In the
case of an option, the option could expire before it can be sold, with the
resulting loss of the premium paid by a Portfolio for the option. In the case of
a futures contract, a Portfolio would remain obligated to meet margin
requirements until the position is closed. In addition, options that are traded
over-the-counter differ from exchange traded options in that they are two-party
contracts with price and other terms negotiated between the parties. For this
reason, the liquidity of these instruments may depend on the willingness of the
counterparty to enter into a closing transaction. In the case of currency-
related instruments, such as foreign currency options, options on foreign
currency futures, and forward foreign currency contracts, it is generally not
possible to structure transactions to match the precise value of the securities
involved since the future value of the securities will change during the period
that the arrangement is outstanding. As a result, such transactions may preclude
or reduce the opportunity for gain if the value of the hedged currency changes
relative to the U.S. dollar. Like over-the-counter options, such instruments are
essentially contracts between the parties and the liquidity of these instruments
may depend on the willingness of the counterparty to enter into a closing
transaction.
About Other Permitted Instruments. Each of the Portfolios may borrow money from
a bank for temporary emergency purposes, and may enter into reverse repurchase
agreements. A reverse repurchase agreement, which is considered a borrowing for
purposes of the Investment Company Act, involves the sale of a security by the
Trust and its agreement to repurchase the instrument at a specified time and
price. Accordingly, the Trust will maintain a segregated account consisting of
cash, U.S. Government securities or high-grade, liquid obligations, maturing not
later than the expiration of the reverse repurchase agreement, to cover its
obligations under reverse repurchase agreements. To avoid potential leveraging
effects of a Portfolio's borrowings, additional investments will not be made
while aggregate borrowings, including reverse repurchase agreements, are in
excess of 5% of a Portfolio's total assets. Borrowings outstanding at any time
will be limited to no more than one-third of a Portfolio's total assets. Each of
the Portfolios may lend portfolio securities to brokers, dealers and financial
institutions provided that cash, or equivalent collateral, equal to at least
100% of the market value (plus accrued interest) of the securities loaned is
maintained by the borrower with the lending Portfolio. During the time
securities are on loan, the borrower will pay to the Portfolio any income that
may accrue on the securities. The Portfolio may invest the cash collateral and
earn additional income or may receive an agreed upon fee from the borrower who
has delivered equivalent collateral. No Portfolio will enter into any securities
lending transaction if, at the time the loan is made, the value of all loaned
securities, together with any other borrowings, equals more than one-third of
the value of that Portfolio's total assets.
Each of the Portfolios of the Trust may acquire securities issued by other
investment companies to the extent permitted under the Investment Company Act,
provided that such investments are otherwise consistent with the overall
investment objectives and policies of that Portfolio. Investment company
securities include interests in unit investment trusts structured to reflect a
specified index, such as the Standard & Poor's 500 Composite Stock Price Index
Depositary Receipts ("SPDRs") or the Standard & Poor's Mid-Cap 400 Index
Depositary Receipts ("MidCap SPDRs"). SPDRs and MidCap SPDRs may be obtained
from the issuing unit investment trust or purchased in the secondary market.
Because the market value of these instruments is derived from the value of the
equity securities held by the issuing unit investment trust, these instruments
may be used by an Specialist Manager to achieve market exposure pending
investment. Both SPDRs and MidCap SPDRs are listed on the American Stock
Exchange. Further information about these instruments is contained in the
Statement of Additional Information. Generally, the Investment Company Act
limits investments in instruments such as SPDRs or MidCap SPDRs to 5% of a
Portfolio's total assets. Provided certain requirements set forth in that Act
are met, however, investments in excess of 5% of a Portfolio's assets may be
made. SPDRs and similar instruments may be used by a Specialist Manager to hedge
against the relative value of the securities in which the acquiring portfolio
primarily invests, facilitate the management of cash flows in or out of that
portfolio or to achieve market exposure pending investment.
About Year 2000. Many computer systems today cannot distinguish the year 2000
from the year 1900 because of the way dates were encoded and calculated. This
problem -- known as the Year 2000 Problem -- could adversely affect the Trust
and its Portfolios unless the computer systems upon which they rely are properly
adapted. In the event that any system upon which the Trust depends is not year
2000 ready by December 31, 1999, administrative errors and account maintenance
failure would likely occur. In addition, the Year 2000 Problem could affect
companies in which the Trust invests. The various organizations that furnish the
Trust with administration and investment advisory services have assured the
Trust that each has taken appropriate steps to minimize risks associated with
the Year 2000 Problem. Although there can be no assurance that each of the
systems upon which the Trust relies will be properly adapted in time for the
Year 2000, Hirtle Callaghan and the Board of Trustees expects that they will
be.
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Management of the Trust
Hirtle Callaghan & Co., Inc. Hirtle Callaghan & Co., Inc. serves as the overall
investment advisor to the Trust under the terms of its investment advisory
agreement ("Hirtle Callaghan Agreement") with the Trust. Hirtle Callaghan
continuously monitors the performance of various investment management
organizations, including the Specialist Managers and generally oversees the
services provided to the Trust by its administrator, custodian and other service
providers. Although Hirtle Callaghan advises the Board of Trustees with regard
to investment matters, Hirtle Callaghan is not responsible for day-to-day
investment decisions for the Trust or its Portfolios. Hirtle Callaghan is,
however, responsible for monitoring both the overall performance of each
Portfolio, and the individual performance of each Specialist Manager within
those portfolios served by more than one Specialist Manager Hirtle Callaghan
may, from time to time recommend that the assets of a multi-manager portfolio be
reallocated between the Specialist Managers that provide portfolio management
services to that portfolio when it believes that such action would be
appropriate to achieve the overall objectives of the particular portfolio.
Officers of Hirtle Callaghan serve as the executive officers of the Trust and/or
as members of the Board of Trustees. For its services under the Hirtle
Callaghan Agreement, Hirtle Callaghan is entitled to receive an annual fee of
.05% of each Portfolio's average net assets.
The principal offices of Hirtle Callaghan are located at 100 Four Falls
Corporate Center, Suite 500, West Conshohocken, PA, 19428-2970. A registered
investment adviser under the Investment Advisers Act, Hirtle Callaghan has over
$3.0 billion in assets under management. Hirtle Callaghan is controlled by its
founders, Jonathan Hirtle and Donald E. Callaghan
Specialist Managers. Day-to-day investment decisions for each of the Portfolios
are the responsibility of one or more Specialist Managers retained by the Trust.
In accordance with the terms of separate portfolio management agreements
relating to the respective Portfolios, and subject to the general supervision of
the Trust's Board, each of the Specialist Managers is responsible for providing
a continuous program of investment management to, and placing all orders for,
the purchase and sale of securities and other instruments the Portfolios they
serve.
In the case of those portfolios that are served by more than one Specialist
Managers, the Board is responsible for determining the appropriate manner in
which to allocate assets to each such Specialist Manager. Under normal
circumstances, it is expected that the assets of each of these portfolios will
be allocated equally among its Specialist Managers. The Board may, however,
increase or decrease the allocation to a Specialist Manager, or to terminate a
particular Specialist Manager, if the Board deems it appropriate to do so in
order to achieve the overall objectives of the Portfolio involved. The goal of
the multi-manager structure is to achieve a better rate of return with lower
volatility than would typically be expected of any one management style. Its
success depends upon the ability of the Trust to (a) identify and retain
Specialist Managers who have achieved and will continue to achieve superior
investment records relative to selected benchmarks; (b) pair Specialist Manager
that have complementary investment styles (e.g. top-down vs bottom-up investment
selections processes: (c) monitor Specialist Managers' performance and adherence
to stated styles, and (d) effectively allocate Portfolio assets among Specialist
Managers.
The Specialist Managers that currently serve the Trust's various portfolios are:
Artisan Partners Limited Partnership ("Artisan") serves as a Specialist Manager
for the International Equity Portfolio. For its services to the Portfolio,
Artisan receives an annual fee of 0.40% of the average daily net asset value of
that portion of the Portfolio's assets managed by it. Artisan, the principal
offices of which are located at 1000 N. Water Street, Suite 1770, Milwaukee,
Wisconsin 53202, has provided investment management services for international
equity assets since 1995. Artisan also maintains offices at 100 Pine Street,
Suite 2950, San Francisco, California and Five Concourse Parkway, Suite 2120,
Atlanta, Georgia. As of July 30, 1999, Artisan managed total assets in excess
of $ 2.6 billion, of which approximately $1.6 billion consisted of mutual fund
assets. Artisan's sole general partner is Artisan Investment Corporation, which
is controlled by its founders, Mr. Ziegler and Carlene Murphy Ziegler.
A team of investment professionals, lead by Mr. Mark L. Yockey, an Artisan
partner, will be responsible for making day-to-day investment decisions for that
portion of the International Portfolio allocated to Artisan. Mr. Yockey has
been with Artisan since 1995 and currently serves as a vice president of Artisan
Funds, Inc., an open-end, series management investment company registered under
the Investment Company Act. Before joining Artisan, Mr. Yockey was portfolio
manager of United International Growth Fund and Vice President of Waddell &
Reed, Inc., an investment adviser and mutual fund organization located in
Missouri. Mr. Yockey holds BA and MBA degrees from Michigan State University
and is a Chartered Financial Analyst.
The Trust has conditionally approved an amendment to the portfolio management
agreement relating to Artisan's services to the Portfolio ("Performance Fee
Amendment"). Under the Performance Fee Amendment, Artisan would be compensated
based, in part, on the investment results achieved by it. Implementation of the
Performance Fee Amendment, however, is subject to receipt of certain assurances
from the staff of the SEC that such implementation will not be viewed by the SEC
staff as inconsistent with the requirements of the Investment Advisers Act.
There can be no assurance that such relief will be granted by the SEC. If the
Performance Fee Amendment is implemented, it could, under certain circumstances,
increase or decrease the fee paid to Artisan, when compared to the current fixed
fee arrangement and could result in the payment of incentive compensation during
periods of declining markets.
Brinson Partners, Inc. ("Brinson") serves as a Specialist Manager for The
International Equity Portfolio. For its services to the Portfolio, Brinson
receives an annual fee, based on the average daily net asset value of that
portion of the Portfolio's assets managed by it, which fee is calculated as
follows: 0.40% of the Portfolio's average net assets of $200 million or less;
0.35% of such assets over $200 million up to $300 million; and 0.30% of such
assets over $300 million. Brinson, the principal offices of which are located
at 209 South LaSalle Street, Chicago, Illinois 60604-1295, and its predecessor
entities have provided investment management services for international equity
assets since 1974. The day-to-day management of The International Equity
Portfolio is the responsibility of a team of Brinson's investment professionals;
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investment decisions are made by committee and no person has primary
responsibility for making recommendations to the committee. Brinson had
discretionary assets of approximately $159 billion under management as of June
30, 1999 of which approximately $3 billion represented assets of U.S. mutual
funds. Brinson is a wholly-owned subsidiary of UBS AG, an internationally
diversified organization with operations in many aspects of the financial
services industry.
Frontier Capital Management Company ("Frontier") serves as a Specialist Manager
for The Small Capitalization Equity Portfolio. For its services to the
Portfolio, Frontier receives a fee based on the average daily net asset value of
that portion of the Portfolio's assets managed by it, at an annual rate of
0.45%. Frontier, the principal offices of which are located at 99 Summer
Street, Boston, Massachusetts 02110, was established in 1980. Michael
Cavarretta is responsible for making the day-to-day investment decisions for
that portion of the Portfolio's assets assigned to Frontier. Mr. Cavarretta has
been an investment professional with Frontier since 1988. Before joining
Frontier, Mr. Cavarretta, a chartered financial analyst, was a financial analyst
with General Electric Co. and attended Harvard Business School (M.B.A. 1988).
Frontier had, as of July 30, 1999, approximately $4.3 billion in assets under
management, of which approximately $149 million represented assets of mutual
funds. Affiliated Managers Group, Inc. (AMG) has announced that it will
acquire a substantial equity interest in Frontier. Following this transaction,
AMG is expected to control Frontier. AMG is a Boston-based asset management
holding company that holds majority interests in over a dozen investment
management firms, which collectively manage approximately $70 billion in assets.
Shares of AMG are listed on the New York Stock Exchange (Symbol: AMG).
Geewax, Terker and Co. ("Geewax"), a Pennsylvania partnership and registered
investment adviser, serves as a Specialist Manager for The Value Equity
Portfolio and The Small Capitalization Equity Portfolio. For its services to
The Value Equity, Portfolio, Geewax receives a fee, based on the average daily
net asset value of that portion of the assets of The Value Equity Portfolio
managed by it, at an annual rate of 0.30%. For its services to The Small
Capitalization Equity, Portfolio, Geewax receives a fee, based on the average
daily net asset value of that portion of the assets of The Small Capitalization
Equity Portfolio managed by it, at an annual rate of 0. 30 %. The principal
offices of Geewax are located at 99 Starr Road, Phoenixville, PA 19460. John
Geewax has been a general partner and chief investment officer of the firm since
its founding in 1982. Mr. Geewax, who holds an MBA and JD from the University
of Pennsylvania, is primarily responsible for making day-to-day investment
decisions for that portion of the Portfolio's assets assigned to Geewax. He is
supported by Christopher P. Ouimet. Mr. Ouimet, who holds an MBA from St.
Joseph's University, joined Geewax in 1994. Prior to that, Mr. Ouimet was at
The Vanguard Group as a quantitative analyst from 1992 to 1994, and as a
marketing analyst from 1990 to 1992. As of July 30, 1999, Geewax managed assets
of approximately $5.4 billion, of which approximately $700 million represented
assets of mutual funds. Geewax is controlled by Mr. Geewax and Bruce Terker, the
firm's general partners.
Goldman Sachs Asset Management ("GSAM") serves as a Specialist Manager for The
Growth Equity Portfolio. GSAM's principal offices of which are located at 32 Old
Slip, New York, New York 10004. As of June 30, 1999, GSAM, together with its
affiliates, managed total assets of in excess of $191 billion. Robert C. Jones,
Victor Pinter, Kent Clark and Melissa Brown are responsible for making day-to-
day investment decisions for that portion of The Growth Equity Portfolio
allocated to GSAM. Mr. Jones, a chartered financial analyst and Managing
Director of GSAM, has been an officer and investment professional with GSAM
since 1989. Mr. Clark is a Managing director of GSAM. He joined GSAM as a member
of the quantitative equity management team in 1992. Mr. Pinter is a Vice
President of GSAM. He joined GSAM in 1990 as a research analyst and became a
portfolio manager in 1992. Ms. Brown is a Vice President. She joined GSAM in
1998. From 1994 to 1998, Ms. Brown was the director of Quantitative Equity
Research and served on the Investment Policy Committee at Prudential Securities
Incorporated. GSAM is a separate operating division of Goldman Sachs & Co.
Goldman Sachs & Co. is controlled by Goldman Sachs Group, Inc.
GSAM is currently compensated for its services to The Growth Equity Portfolio at
an annual rate of 0.30% of those assets of the Portfolio's assets allocated to
GSAM ("GSAM Account"). Under the terms of a performance fee arrangement which
first became effective on October 1, 1999, GSAM's asset-based fee ("Base Fee")
may be adjusted to reflect the performance of the GSAM Account. Under the
arrangement, the Base Fee may be increased or decreased at an annual rate of 25%
of the net value added by GSAM over the total return of the Russell 1000 Growth
Index plus 30 basis points during the 12 months immediately preceding the date
on which the fee is calculated. This 30 basis point "performance hurdle" is
designed to assure that GSAM will earn a performance adjustment only with
respect to the value that its portfolio management adds to the GSAM Account.
GSAM's fee will not be adjusted in accordance with the performance fee
arrangement until the performance fee arrangement has been in effect for 12
months. Because the performance of the GSAM Account will vary, the advisory fee
payable to GSAM will also vary. The maximum fee payable to GSAM for any annual
period under the incentive fee arrangement is .50% of the average net assets of
the GSAM Account and the minimum fee payable to GSAM for any annual period under
the incentive fee arrangement is 0.10% of the average net assets of the GSAM
Account. Shareholders should be aware that one consequence of the performance
fee arrangement is that GSAM could be entitled to a positive performance
adjustment even during periods when the value of the GSAM Account and or the
Portfolio overall declines. This could occur if the decline in the value of the
Russell 1000 Growth Index is greater than the decline in the value of the
Portfolio. Detailed information about the performance fee arrangement,
including the manner in which the fee is computed, appears in the Statement of
Additional Information.
Institutional Capital Corporation ("ICAP") serves as a Specialist Manager for
The Value Equity Portfolio. For its services to the Portfolio, ICAP receives a
fee, based on the average daily net asset value of that portion of the
Portfolio's assets managed by it, at an annual rate of 0.35%. ICAP, the
principal offices of which are located at 225 West Wacker, Chicago, Illinois
60606, has provided investment management services for equity assets since 1970.
Investment decisions for those assets of the Portfolio assigned to ICAP are made
by a team of ICAP investment professionals; investment decisions are made by
committee and no single individual has primary responsibility for making
recommendations to the committee. ICAP had assets of approximately $11.9 billion
under management as of August 31, 1999, of which approximately $2.4 billion
represented assets of mutual funds.
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Jennison Associates LLC ("Jennison") serves as a Specialist Manager for The
Growth Equity Portfolio. For its services to the Portfolio, Jennison receives a
fee, based on the average daily net asset value of that portion of the
Portfolio's assets managed by it, at an annual rate of 0.30%. Jennison, the
principal offices of which are located at 466 Lexington Avenue, New York, New
York 10017, was established in 1969. Spiros Segalas, is responsible for making
day-to-day investment decisions for that portion of The Growth Equity Portfolio
allocated to Jennison. Mr. Segalas is Jennison's Chief Investment Officer and
President, and is a founding member and director of the firm. As of August 31,
1999, Jennison had approximately $49.4 billion under management, of which
approximately $15.8 billion represented assets of mutual funds. Jennison is a
wholly-owned subsidiary of The Prudential Insurance Company of America.
Morgan Grenfell Incorporated ("Morgan Grenfell") serves as the Specialist
Manager for The Limited Duration Municipal Bond Portfolio, The Intermediate Term
Municipal Bond Portfolio and The Fixed Income Portfolio. For its services to
each of the Intermediate Term Municipal Bond Portfolio and the Fixed Income
Portfolio, Morgan Grenfell receives, based of the average daily net assets value
of each such portfolio, an annual fee of 0.275%. For its services to the
Limited Duration Municipal Bond Portfolio, Morgan Grenfell receives a fee of
.20% of the average net asset value of that Portfolio. Morgan Grenfell, whose
principal offices are located at 885 Third Avenue, New York, New York 10022, has
been active in managing municipal securities since 1989. David Baldt, an
Executive Vice-President of Morgan Grenfell, is primarily responsible for making
the day-to-day investment decisions for each of the Trust's Fixed- Income
Portfolios. Mr. Baldt has managed fixed income investments since 1973, and has
been with Morgan Grenfell since 1989. As of June 30, 1999, Morgan Grenfell
managed assets of approximately $14.0 billion, of which approximately $2.5
billion represented assets of mutual funds. Morgan Grenfell is an indirect,
wholly-owned subsidiary of Deutschebank, A.G., a German financial services
conglomerate.
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Shareholder Information
Purchasing Shares of the Portfolios
You may purchase shares of any of the Portfolios only if you are a client of
Hirtle Callaghan or a financial intermediary that has established a relationship
with Hirtle Callaghan. Shares of each of the Portfolios are sold at its net
asset value per share ("NAV") next calculated after your purchase order is
accepted by the Trust.
A Portfolio's NAV is determined at the close of regular trading on the New York
Stock Exchange, normally at 4:00 p.m. Eastern time on days the Exchange is open.
The NAV is calculated by adding the total value of the Portfolio's investments
and other assets, subtracting its liabilities and then dividing that figure by
the number of outstanding shares of the Portfolio:
NAV = total assets - liabilities
--------------------------
number of shares outstanding
The value of each Portfolio's investments is generally determined by current
market quotations. If market quotations are not available, prices will be based
on fair value as determined by the Trust's Trustees. Short-term obligations with
maturities of 60 days or less are valued at amortized cost, which constitutes
fair value as determined by the Trust's Board.
Payment for purchases of Trust shares may be made by wire transfer or by check
drawn on a U.S. bank. All purchases must be made in U.S. dollars. The Trust
reserves the right to reject any purchase order. Purchase orders may be
received by the Trust's transfer agent on any regular business day.
Selling Your Shares
You may redeem your shares in any Portfolio on any regular business day. Shares
will be redeemed at the NAV next computed after receipt of your redemption order
by the Trust. You will receive redemption proceeds within 7 days after receipt
of your redemption order by the Trust. Redemption proceeds may be wired to an
account that you have predesignated and which is on record with the Trust.
Shares purchased by check will not be redeemed until that payment has cleared --
normally, within 15 days of receipt of the check by the Trust.
As a mutual fund shareholder, you are technically selling shares when you
request a withdrawal in cash. This is also known as redeeming shares or a
redemption of shares.
Redemption requests must be in writing and must be signed by the shareholder(s)
named on the account. If you wish to redeem shares of any Portfolio valued at
$25,000 or more, each signature must be guaranteed.
Other Information about Purchases and Redemptions. Distributions are made on a
per share basis regardless of how long you have owned your shares. Therefore,
if you invest shortly before the distribution date, some of your investment will
be returned to you in the form of a distribution. Capital gains, if any, are
distributed at least annually.
The value of securities that are primarily listed on foreign exchanges may
change on days when the New York Stock Exchange is closed and the NAV of a
Portfolio is not calculated. You will not be able to purchase or redeem your
shares on days when the New York Stock Exchange is closed. The Trust may permit
investors to purchase shares of a Portfolio "in kind" by exchanging securities
for shares of the selected Portfolio. This is known as an "in-kind" purchase.
Shares acquired in an in-kind transaction will not be redeemed until the
transfer of securities to the Trust has settled -- usually within 15 days
following the in-kind purchase. The Trust may also redeem shares in-kind. This
means that all or a portion of the redemption amount would be paid by
distributing to the redeeming shareholder securities held in a Portfolio's
investment portfolio. Investors will incur brokerage charges on the sale of
these portfolio securities. In kind purchases and sales will be permitted
solely at the discretion of the Trust.
The Trust does not impose investment minimums or sales charges of any kind. If
your account falls below $5,000, the Portfolio may ask you to increase your
balance. If it is still below $5,000 after 30 days, the Portfolio may close your
account and send you the proceeds at the current NAV. In addition, if you
purchase shares of the Trust through a program of services offered by a
financial intermediary, you may incur advisory fees or custody expenses in
addition to those expenses described in this Prospectus. Investors should
contact such intermediary for information concerning what, if any, additional
fees may be charged.
Shareholder Reports and Inquiries. Shareholders will receive semi-annual
reports containing unaudited financial statements as well as annual reports
containing financial statements which have been audited by the Trust's
independent accountants. Each shareholder will be notified annually as to the
Federal tax status of distributions made by the Portfolios in which such
shareholder is invested. Shareholders may contact the Trust by calling the
telephone number, or by writing to the Trust at the address, shown on the first
page of this prospectus
Dividends, Distributions and Taxes
Any income a Portfolio receives is paid out, less expenses, in the form of
dividends to its shareholders. Income dividends on The Value Equity Portfolio,
The Growth Equity Portfolio and The Small Capitalization Equity Portfolio are
usually paid on a quarterly basis. Dividends on The International Equity
Portfolio are paid semi-annually. Dividends on The Limited Duration Municipal
Bond Portfolio, The Fixed
33
<PAGE>
Income Portfolio and The Intermediate Term Municipal Bond Portfolio are paid
monthly. Capital gains for all Portfolios, if any, are distributed at least
annually.
Federal Taxes. The following discussion is only a brief summary of some of the
important Federal tax considerations that may affect your investment in the
Trust. It is not a substitute for careful tax planning. Furthermore, future
legislative or administrative changes or court decisions may materially affect
the tax consequences of investing in one or more Portfolios of the Trust.
Accordingly, shareholders are urged to consult their tax advisers with specific
reference to his or her particular tax situation.
Dividends that are derived from taxable investments are taxable as ordinary
income. Dividends and capital gain distributions are taxable in the year in
which they are paid, even if they appear on your account statement the following
year. The manner in which they are taxed will be the same, regardless of
whether you elect to receive your dividends and capital gains distributions in
cash or in additional shares. Taxes on capital gains by the Portfolios will
vary with the length of time the Portfolio has held the security - not how long
you have invested in the Portfolio.
During normal market conditions, it is expected that substantially all of the
dividends paid by The Limited Duration Municipal Bond Portfolio and The
Intermediate Term Municipal Bond Portfolio will be excluded from gross income
for Federal income tax purposes. These Portfolios may, however, invest in
certain securities with interest that may be a preference item for the purposes
of the alternative minimum tax or a factor in determining whether Social
Security benefits are taxable. In such event, a portion of the Portfolio's
dividends would not be exempt from Federal income taxes. If a Portfolio invests
in foreign securities, it may be subject to foreign withholding taxes, and under
certain circumstances, may elect to pass-through to its shareholders their pro
rata share of foreign taxes paid by such Portfolio. If this election is made,
shareholders will be (i) required to include in their gross income their pro
rata share of foreign source income (including any foreign taxes paid by the
Portfolio), and (ii) entitled to either deduct (as an itemized deduction in the
case of individuals) their share of such foreign taxes in computing their
taxable income or to claim a credit for such taxes against their U.S. income
tax, subject to certain limitations under the Code.
You will be notified each year about the Federal tax status of dividends and
capital gains distributions made by the Portfolios. Depending on your residence
for tax purposes, dividends and capital gains distributions may also be subject
to state and local taxes, including withholding taxes. Foreign shareholders may
be subject to special withholding requirements.
Financial Highlights
The financial highlights tables are intended to help you understand the Funds'
financial performance for the past 5 years or since the inception of the
Portfolio, if less than 5 years. Certain information reflects financial results
for a single Portfolio share. The total returns in the tables represent the
rate that you would have earned [or lost] on an investment in the Portfolio
(assuming reinvestment of all dividends and distributions). This information
has been audited by PricewaterhouseCoopers LLP, whose report, along with the
Trust's financial statements, are included in the Statement of Additional
Information, which is available upon request.
34
<PAGE>
35
<PAGE>
<TABLE>
<CAPTION>
Value Equity Portfolio Growth Equity Portfolio
-------------------------------------- --------------------------------------
Year Year Year Period Year Year Year Period
Ended Ended Ended Ended Ended Ended Ended Ended
June 30, June 30, June 30, June 30, June 30, June 30, June 30, June 30,
1999 1998 1997 1996(a) 1999 1998 1997 1996(b)
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 15.49 $ 14.41 $ 11.48 $ 10.00 $ 15.25 $ 13.67 $ 11.13 $ 10.00
-------- -------- -------- ------- -------- -------- -------- --------
Income from Investment
Operations:
Net investment income.. 0.22 0.24 0.23 0.22 0.03 0.04 0.06 0.04
Net realized and
unrealized gain on
investments, futures
and foreign currency
transactions.......... 0.87 2.87 3.65 1.51 3.76 4.37 2.58 1.13
-------- -------- -------- ------- -------- -------- -------- --------
Total from investment
operations............ 1.09 3.11 3.88 1.73 3.79 4.41 2.64 1.17
-------- -------- -------- ------- -------- -------- -------- --------
Distributions to
Shareholders from:
Net investment income.. (0.22) (0.25) (0.21) (0.22) (0.03) (0.04) (0.05) (0.04)
In excess of net
investment income..... -- -- -- -- -- (0.02) -- --
Net realized gain on
investments, futures
and foreign currency
transactions.......... (1.51) (1.78) (0.74) (0.03) (1.05) (2.77) (0.05) --
-------- -------- -------- ------- -------- -------- -------- --------
Total distribution to
shareholders.......... (1.73) (2.03) (0.95) (0.25) (1.08) (2.83) (0.10) (0.04)
-------- -------- -------- ------- -------- -------- -------- --------
Net Asset Value, End of
Period................. $ 14.85 $ 15.49 $ 14.41 $ 11.48 $ 17.96 $ 15.25 $ 13.67 $ 11.13
======== ======== ======== ======= ======== ======== ======== ========
Total Return............ 9.07% 23.42% 35.28% 17.28%(d) 26.76% 37.00% 23.83% 11.69%(d)
Ratios to Average Net
Assets/Supplemental
Data:
Net assets, end of
period (in
thousands)............ $216,940 $176,587 $117,092 $71,503 $264,877 $216,129 $160,961 $110,537
Ratio of expenses to
average net assets.... 0.56% 0.52% 0.63% 0.63%(c) 0.53% 0.53% 0.55% 0.63%(c)
Ratio of net investment
income to average net
assets................ 1.64% 1.69% 1.89% 2.55%(c) 0.20% 0.33% 0.49% 0.46%(c)
Ratio of expenses to
average net assets
excluding fee
waivers............... 0.56% 0.52% 0.65% 0.68%(c) 0.53% 0.53% 0.55% 0.68%(c)
Portfolio turnover
rate.................. 108.79% 86.45% 97.39% 92.00%(d) 70.61% 95.07% 80.47% 80.00%(d)
</TABLE>
- --------
(a) For the period August 25, 1995 (commencement of operations) through June
30, 1996.
(b) For the period August 8, 1995 (commencement of operations) through June 30,
1996.
(c) Annualized.
(d) Not annualized.
<PAGE>
<TABLE>
<CAPTION>
Small Capitalization Equity
Portfolio International Equity Portfolio
-------------------------------------- --------------------------------------
Year Year Year Period Year Year Year Period
Ended Ended Ended Ended Ended Ended Ended Ended
June 30, June 30, June 30, June 30, June 30, June 30, June 30, June 30,
1999 1998 1997 1996(a) 1999 1998 1997 1996(b)
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 13.13 $ 12.95 $ 11.07 $ 10.00 $ 12.70 $ 12.84 $ 11.26 $ 10.00
-------- -------- -------- ------- -------- -------- -------- -------
Income from Investment
Operations:
Net investment income.. 0.04 0.06 0.07 0.10 0.24 0.16 0.22 0.16
Net realized and
unrealized gain on
investments, futures
and foreign currency
transactions.......... 0.35 1.54 2.11 1.07 0.39 0.49 1.92 1.35
-------- -------- -------- ------- -------- -------- -------- -------
Total from investment
operations............. 0.39 1.60 2.18 1.17 0.63 0.65 2.14 1.51
-------- -------- -------- ------- -------- -------- -------- -------
Distributions to
Shareholders from:
Net investment income.. (0.04) (0.06) (0.07) (0.10) (0.21) (0.47) (0.22) (0.24)
In excess of net
investment income...... -- -- -- -- -- -- (0.04) --
Net realized gain on
investments, futures
and foreign currency
transactions.......... (1.15) (1.36) (0.23) -- (0.27) (0.32) (0.30) (0.01)
-------- -------- -------- ------- -------- -------- -------- -------
Total distribution to
shareholders........... (1.19) (1.42) (0.30) (0.10) (0.48) (0.79) (0.56) (0.25)
-------- -------- -------- ------- -------- -------- -------- -------
Net Asset Value, End of
Period................. $ 12.33 $ 13.13 $ 12.95 $ 11.07 $ 12.85 $ 12.70 $ 12.84 $ 11.26
======== ======== ======== ======= ======== ======== ======== =======
Total Return............ 4.73% 12.66% 19.88% 11.82%(d) 5.20% 5.91% 19.61% 15.15%(d)
Ratios to Average Net
Assets/ Supplemental
Data:
Net assets, end of
period (in
thousands)............ $210,737 $150,527 $113,480 $61,503 $256,177 $229,875 $146,122 $77,732
Ratio of expenses to
average net assets.... 0.62% 0.70% 0.78% 0.78%(c) 0.69% 0.70% 0.78% 0.81%(c)
Ratio of net investment
income to average net
assets................ 0.39% 0.41% 0.68% 1.33%(c) 1.51% 2.00% 1.97% 1.75%(c)
Ratio of expenses to
average net assets
excluding fee
waivers............... 0.62% 0.70% 0.78% 0.90%(c) 0.69% 0.71% 0.78% 0.92%(c)
Portfolio turnover
rate................... 125.52% 103.41% 54.16% 38.00%(d) 56.77% 36.80% 29.85% 15.00%(d)
</TABLE>
- --------
(a) For the period September 5, 1995 (commencement of operations) through June
30, 1996.
(b) For the period August 17, 1995 (commencement of operations) through June
30, 1996.
(c) Annualized.
(d) Not annualized.
<PAGE>
<TABLE>
<CAPTION>
Intermediate
Term
Fixed Municipal
Limited Duration Income Bond
Municipal Bond Portfolio Portfolio Portfolio
-------------------------------------- --------- ------------
Year Year Year Period Year Year
Ended Ended Ended Ended Ended Ended
June 30, June 30, June 30, June 30, June 30, June 30,
1999 1998 1997 1996(a) 1999(b) 1999(b)
-------- -------- -------- -------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 10.11 $ 10.04 $ 10.00 $ 10.00 $ 10.00 $ 10.00
------- ------- ------- ------- -------- --------
Income from Investment
Operations:
Net investment income.. 0.47 0.47 0.48 0.35 0.58 0.45
Net realized and
unrealized gain (loss)
on
investments, futures.. (0.15) 0.07 0.04 0.01 (0.28) (0.21)
------- ------- ------- ------- -------- --------
Total from investment
operations............ 0.32 0.54 0.52 0.36 0.30 0.24
------- ------- ------- ------- -------- --------
Distributions to
Shareholders from:
Net investment income.. (0.47) (0.47) (0.48) (0.36) (0.58) (0.45)
Net realized gain on
investments, futures
and foreign currency
transactions.......... -- -- -- -- (0.08) --
------- ------- ------- ------- -------- --------
Total distribution to
shareholders.......... (0.47) (0.47) (0.48) (0.36) (0.66) (0.45)
------- ------- ------- ------- -------- --------
Net Asset Value, End of
Period................. $ 9.96 $ 10.11 $ 10.04 $ 10.00 $ 9.64 $ 9.79
======= ======= ======= ======= ======== ========
Total Return............ 3.17% 5.48% 5.34% 3.60%(d) 2.88% 2.44%
Ratios to Average Net
Assets/Supplemental
Data:
Net assets, end of
period (in
thousands)............ $45,567 $46,677 $40,963 $29,485 $108,074 $107,105
Ratio of expenses to
average net assets.... 0.46% 0.47% 0.52% 0.53%(c) 0.50% 0.47%
Ratio of net investment
income to average net
assets................ 4.61% 4.65% 4.78% 4.78%(c) 5.78% 4.54%
Ratio of expenses to
average net assets
excluding fee
waivers............... 0.46% 0.51% 0.68% 0.81%(c) 0.50% 0.54%
Portfolio turnover
rate.................. 116.22% 42.50% 44.57% 116.00%(d) 146.78% 42.24%
</TABLE>
- --------
(a) For the period October 10, 1995 (commencement of operations) through June
30, 1996.
(b) For the period July 1, 1998 (commencement of operations) through June 30,
1999.
(c) Annualized.
(d) Not annualized.
<PAGE>
- --------------------------------------------------------------------------------
The Hirtle Callaghan Trust
================================================================================
For More Information:
For more information about the Funds, the following documents are available free
upon request:
Annual/Semi-Annual Reports:
The Trust's annual and semi-annual reports to shareholders contain additional
information on the Trust's investments. In the annual report, you will find a
discussion of the market conditions and investment strategies that significantly
affected the Trust's performance during its last fiscal year.
Statement of Additional Information ("SAI"):
The SAI provides more detailed information about the Trust, including its
operations and investment policies. It is incorporated by reference and is
legally considered a part of this prospectus.
- --------------------------------------------------------------------------------
You can get free copies of these reports and the SAI, or request other
information and discuss your questions about the Trust by contacting a broker or
bank that sells the Portfolios. Or contact the Trust at:
The Hirtle Callaghan Trust
100 Four Falls Corporate Center, Suite 500
West Conshohocken, PA 19428-2970
Telephone: 610-828-7200
- --------------------------------------------------------------------------------
You can review the Trust's reports and SAI at the Public Reference Room of the
Securities and Exchange Commission. You can get text-only copies:
. For a fee, by writing the Public Reference Section of the Commission,
Washington, D.C. 20549-6009 or calling 1-800-SEC-0330.
. Free from the Commission's website at http://www.sec.gov.
Investment Company Act File No. 811-8918.
