SEI INSTITUTIONAL INVESTMENTS TRUST, N-1A, 1995-03-10

SEI INSTITUTIONAL INVESTMENTS TRUST
N-1A, 1995-03-10

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 10, 1995

File No. 33- _______
File No. 811-_______

________________________________________________________________________________

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 /X/

and

REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 /X/

SEI INSTITUTIONAL INVESTMENTS TRUST
(Exact Name of Registrant as Specified in Charter)

c/o The CT Corporation System
2 Oliver Street
Boston, Massachusetts 02109
(Address of Principal Executive Offices, Zip Code)

Registrant's Telephone Number, including Area Code (610) 254-1000

DAVID G. LEE
C/O SEI CORPORATION
680 E. SWEDESFORD ROAD
WAYNE, PENNSYLVANIA 19087
(Name and Address of Agent for Service)

Copies to:
RICHARD W. GRANT, ESQUIRE
MORGAN, LEWIS & BOCKIUS
2000 ONE LOGAN SQUARE
PHILADELPHIA, PENNSYLVANIA 19103
________________________________________________________________________________

/X/ Approximate date of Proposed Public Offering:
As soon as practicable after the
effective date of this Registration Statement
________________________________________________________________________________

Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically
states that this Registration Statement shall thereafter
become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission acting
pursuant to said Section 8(a) may determine.

Pursuant to the provisions of Rule 24f-2 under the Investment Company
Act of 1940, an indefinite number of units of beneficial interest is
being registered by this Registration Statement.
________________________________________________________________________________
<PAGE>

SEI INSTITUTIONAL INVESTMENTS TRUST

CROSS REFERENCE SHEET

<TABLE>
N-1A ITEM NO. LOCATION
- - --------------------------------------------------------------------------------
PART A - PRIME MONEY MARKET, LARGE CAP VALUE, LARGE CAP GROWTH, SMALL CAP VALUE,
SMALL CAP GROWTH, CORE FIXED INCOME, HIGH YIELD BOND, INTERNATIONAL FIXED
INCOME, EMERGING MARKETS EQUITY, CORE INTERNATIONAL EQUITY, EUROPEAN EQUITY AND
PACIFIC BASIN EQUITY FUNDS

<S> <C> <C>
Item 1. Cover Page Cover Page
Item 2. Synopsis Annual Operating Expenses
Item 3. Condensed Financial Information *
Item 4. General Description of Registrant The Trust; Investment Objectives and
Policies; General Investment Policies;
Description of Permitted Investments and
Risk Factors
Item 5. Management of the Fund General Information-Trustees of
the Trust; The Money Managers;
General Management of the Funds;
Style Structured, Multi-Manager
Diversification
Item 6. Capital Stock & Other Securities General Information-Voting
Rights, Shareholder Inquiries,
Dividends; Taxes
Item 7. Purchase of Securities Being Purchase and Redemption of
Offered Shares
Item 8. Redemption or Repurchase Purchase and Redemption of
Shares
Item 9. Pending Legal Proceedings *

PART B - ALL FUNDS

Item 10. Cover Page Cover Page
Item 11. Table of Contents Table of Contents
Item 12. General Information & History The Trust
Item 13. Investment Objectives & Policies Investment Objectives and Policies;
Investment Limitations; Securities
Lending
Item 14. Management of the Registrant Trustees and Officers of the Trust
(Prospectus); The Manager and
Shareholder Servicing Agent
Item 15. Control Persons & Principal Trustees and Officers of
Holders of Securities the Trust (Prospectus)
Item 16. Investment Advisory & Other [GENERAL MANAGEMENT OF THE FUNDS
Services (PROSPECTUS); STYLE STRUCTURED,
MULTI-MANAGER DIVERSIFICATION
(PROSPECTUS)]; THE
</TABLE>

(i)
<PAGE>

<TABLE>
<S> <C> <C>
Manager and Shareholder Servicing
Agent; Distribution; Counsel &
Independent Public Accountants
Item 17. Brokerage Allocation Fund Transactions
Item 18. Capital Stock & Other Securities Description of Shares
Item 19. Purchase, Redemption, & Pricing Purchase and Redemption of
of Securities Being Offered Shares (Prospectus);
Determination of Net Asset
Value
Item 20. Tax Status Taxes (Prospectus); Taxes
Item 21. Underwriters Distribution
Item 22. Calculation of Yield Quotation Performance
Item 23. Financial Statements *
</TABLE>

PART C

Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C of this Registration Statement.

* Not Applicable

(ii)
<PAGE>

SEI INSTITUTIONAL INVESTMENTS TRUST

Large Cap Value Fund
Large Cap Growth Fund
Small Cap Value Fund
Small Cap Growth Fund
Core Fixed Income Fund
High Yield Bond Fund
International Fixed Income Fund
Emerging Markets Equity Fund
Core International Equity Fund
European Equity Fund
Pacific Basin Equity Fund
Prime Money Market Fund

________ __, 1995

================================================================================

Please read this Prospectus carefully before investing, and keep it on file for
future reference. This Prospectus sets forth concisely the information about
the SEI Institutional Investments Trust (the "Trust") that a prospective
investor should know before investing.

A Statement of Additional Information dated _______ __, 1995 has been filed with
the Securities and Exchange Commission and is available without charge through
the distributor, SEI Financial Services Company, 680 East Swedesford Road,
Wayne, PA 19087 or by calling 1-800-342-5734. The Statement of Additional
Information is incorporated into this Prospectus by reference.

THE HIGH YIELD BOND FUND INVESTS PRIMARILY AND MAY INVEST ALL OF ITS ASSETS IN
LOWER RATED BONDS, COMMONLY REFERRED TO AS "JUNK BONDS." THESE SECURITIES ARE
SPECULATIVE AND ARE SUBJECT TO GREATER RISK OF LOSS OF PRINCIPAL AND INTEREST
THAN ARE INVESTMENTS IN HIGHER RATED BONDS. BECAUSE INVESTMENT IN SUCH
SECURITIES ENTAILS GREATER RISKS, INCLUDING RISK OF DEFAULT, AN INVESTMENT IN
THE HIGH YIELD BOND FUND SHOULD NOT CONSTITUTE A COMPLETE INVESTMENT PROGRAM AND
MAY NOT BE APPROPRIATE FOR ALL INVESTORS. INVESTORS SHOULD CAREFULLY CONSIDER
THE RISKS POSED BY AN INVESTMENT IN THE HIGH YIELD BOND FUND BEFORE INVESTING.
SEE "INVESTMENT OBJECTIVES AND POLICIES," "GENERAL INVESTMENT POLICIES AND RISK
FACTORS - RISK FACTORS RELATING TO INVESTING IN LOWER RATED SECURITIES" AND THE
"APPENDIX."

An investment in the Prime Money Market Fund is neither insured nor guaranteed
by the U.S. Government, and there can be no assurance that the Fund will be able
to maintain a stable net asset value of $1.00 per share.

================================================================================

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
================================================================================
THE TRUST'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK. THE TRUST'S SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER
GOVERNMENT AGENCY. INVESTMENT IN THE SHARES INVOLVES RISK, INCLUDING POSSIBLE
LOSS OF THE PRINCIPAL AMOUNT INVESTED.
================================================================================
<PAGE>

TABLE OF CONTENTS
- - --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Page
----
<S> <C>
FUND HIGHLIGHTS................................................... 3

ANNUAL OPERATING EXPENSES......................................... 5

THE TRUST......................................................... 7

STYLE STRUCTURED, MULTI-MANAGER DIVERSIFICATION................... 8

GENERAL MANAGEMENT OF THE FUNDS................................... 8

THE MONEY MANAGERS................................................ 9

INVESTMENT OBJECTIVES AND POLICIES................................ 15

GENERAL INVESTMENT POLICIES AND RISK FACTORS...................... 22

INVESTMENT LIMITATIONS............................................ 24

PURCHASE AND REDEMPTION OF SHARES................................. 25

PERFORMANCE....................................................... 26

TAXES............................................................. 27

GENERAL INFORMATION............................................... 28

DESCRIPTION OF PERMITTED INVESTMENTS AND RISK FACTORS............. 29

APPENDIX.......................................................... A-1
</TABLE>

-2-
<PAGE>

FUND HIGHLIGHTS
================================================================================

THE PURPOSE OF THE FUNDS The purpose of the mutual funds described in this
Prospectus (each, a "Fund") is to provide a means
for eligible investors to use SEI Financial
Management Corporation's ("SFM") style structured,
multi-manager approach to investing on a cost
efficient basis.

STYLE STRUCTURED, Style structured, multi-manager investing provides
MULTI-MANAGER INVESTING diversification and risk control by allocating
investments among global equity and fixed income
asset classes. The Funds were created specifically
to support a style structured approach to
investing. Money managers ("Money Managers") are
utilized to select a Fund's individual securities.
These Money Managers are selected through SFM's
money manager research process.

MANAGEMENT PROFILE SFM, a registered investment adviser, provides
asset allocation advice to its clients based upon
the client's financial and investment objectives,
risk tolerance and investment restrictions. SFM
uses a proprietary asset allocation model to make
its recommendations. SFM and its affiliates have
been offering mutual funds to institutional
investors since 1981 and asset allocation models
since 1987.

SFM also serves as the administrator, transfer
agent, dividend disbursing agent, and shareholder
servicing agent for the SEI Institutional
Investments Trust (the "Trust"). SEI Financial
Services Company ("SFS") is a registered
broker/dealer and serves as distributor for the
Trust.

THE MONEY MANAGERS Each Money Manager is responsible for the day to
day investment management of all or a discrete
portion of the assets of a specific Fund. The Money
Managers are recommended and evaluated by SFM and
act in accordance with the investment objectives
and policies of the Fund and the specific
strategies developed by SFM.

RISK FACTORS The value of a Fund's shares will fluctuate with
the value of the underlying securities in its
portfolio. The Prime Money Market Fund attempts to
maintain a stable $1.00 share price. There is no
assurance that a Fund will achieve its investment
objectives. See "Investment Objectives and
Policies," "General Investment Policies and Risk
Factors" and "Description of Permitted Investments
and Risk Factors."

ELIGIBLE INVESTORS Shares of the Funds are primarily offered to
institutional investors who invest for their own
account or accounts for which they act in a
fiduciary or other intermediary capacity and that
have entered into Asset Management Services Client
Agreements (an "Agreement") with SFM.

-3-
<PAGE>

PURCHASE OF FUND SHARES Shares of the Funds may be purchased on any day on
which the New York Stock Exchange is open for
business ("Business Days"). Shares of the Funds are
offered without sales charges or 12b-1 fees.

REDEMPTION OF FUND SHARES Shares of the Funds may be redeemed on any Business
Day. There are no redemption charges. The Funds
reserve the right to redeem shares held by an
investor whose Agreement with SFM has been
terminated.

ADDITIONAL INFORMATION For more information regarding shares of the
Funds, call SFS at 1-800-342-5734.

-4-
<PAGE>

ANNUAL OPERATING EXPENSES (as a percentage of average net assets)

<TABLE>
<CAPTION>
- - ----------------------------------------------------------------------------------------------------------------------
LARGE CAP LARGE CAP SMALL CAP SMALL CAP CORE FIXED HIGH YIELD
VALUE FUND GROWTH FUND VALUE FUND GROWTH FUND INCOME FUND BOND FUND
- - ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Management Fees(1) .30% .35% .60% .60% .225% .4375%

Other Expenses(2)(3):
Custodian Fees .01% .01% .01% .01% .01% .01%
Other Fees .31% .33% .43% .43% .28% .36%

- - ----------------------------------------------------------------------------------------------------------------------
Total Other Expenses .32% .34% .44% .44% .29% .37%
- - ----------------------------------------------------------------------------------------------------------------------
Total Fund Operating
Expenses(3) .62% .69% 1.04% 1.04% .515% .8075%
======================================================================================================================

<CAPTION>
- - -----------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL EMERGING CORE EUROPEAN PACIFIC PRIME
FIXED INCOME MARKETS INTERNATIONAL EQUITY FUND BASIN MONEY
FUND EQUITY FUND EQUITY FUND EQUITY FUND MARKET FUND
- - -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Management Fees(1) .40% 1.00% .425% .425% .50% .175%
Other Expenses(2)(3):
Custodian Fees .05% .05% .05% .05% .05% .01%
Other Fees .35% .61% .38% .38% .41% .25%

Total Other Expenses .40% .66% .43% .43% .46% .26%
- - -----------------------------------------------------------------------------------------------------------------------------
Total Fund Operating
Expenses(4) .80% 1.66% .855% .855% .96% .435%
=============================================================================================================================
</TABLE>

(1) Each shareholder also enters into an Asset Management Services Client
Agreement with SEI Financial Management Company for investment strategies
and programs and asset allocation services, and agrees to pay annual fees
calculated as a specified percentage of the client's average net assets
invested in the Funds.

(2) "Custodian Fees" and "Other Fees" are based on estimated amounts for the
current fiscal year.

(3) "Custodian Fees" and "Other Fees" reflect the use of some brokerage to pay
expenses of the Funds; absent this directed brokerage, "Total Other
Expenses" and "Total Fund Operating Expenses" for each Fund would be: .80%
and 1.10% for the Large Cap Value Fund; .85% and 1.20% for the Large Cap
Growth Fund; 1.10% and 1.70% for the Small Cap Value Fund; 1.10% and 1.70%
for the Small Cap Growth Fund; .72% and .945% for the Core Fixed Income
Fund; .93% and 1.3675% for the High Yield Bond Fund; 1.00% and 1.40% for the
International Fixed Income Fund; 1.68% and 2.68% for the Emerging Markets
Equity Fund; 1.07% and 1.495% for the Core International Equity Fund; 1.07%
and 1.495% for the European Equity Fund; 1.15% and 1.65% for the Pacific
Basin Equity Fund; and .65% and .825% for the Prime Money Market Fund,
respectively.

(4) Investors purchasing Fund shares through a financial intermediary, such as a
bank or an investment adviser, also may be required to pay additional fees
for services provided by the intermediary. Such investors should contact
the intermediary for information concerning what additional fees, if any,
will be charged.

-5-
<PAGE>

<TABLE>
<CAPTION>
EXAMPLE
- - -------------------------------------------------------
1 yr. 3 yrs.
- - -------------------------------------------------------
<S> <C> <C>
An investor in a Fund would pay the
following expenses on a $1,000
investment assuming (1) 5% annual
return and (2) redemption at the end
of each time period:
Large Cap Value Fund............. $3 $10
Large Cap Growth Fund............ $3 $11
Small Cap Value Fund............. $5 $14
Small Cap Growth Fund............ $5 $14
Core Fixed Income Fund........... $3 $ 9
High Yield Bond Fund............. $4 $12
International Fixed Income Fund.. $4 $13
Emerging Markets Equity Fund..... $7 $21
Core International Equity Fund... $4 $14
European Equity Fund............. $4 $14
Pacific Basin Equity Fund........ $5 $15
Prime Money Market Fund.......... $3 $ 8
</TABLE>
- - -------------------------------------------------------

THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.

The purpose of the expense table and example is to assist the investor in
understanding the various costs and expenses that may be directly or indirectly
borne by investors in the Funds. Additional information may be found under
"General Management of the Funds" and "The Money Managers."

-6-
<PAGE>

THE TRUST
================================================================================

SEI Institutional Investments Trust (the "Trust") is an open-end management
investment company, organized as a Massachusetts business trust under a
Declaration of Trust dated March 1, 1995. The Declaration of Trust permits the
Trust to offer separate series ("funds") of units of beneficial interest
("shares") and different classes of each fund. Currently, the Trust has no
intention to issue additional classes of shares. All consideration received by
the Trust for shares of any fund and all assets of such fund belong to that fund
and would be subject to the liabilities related thereto.

This Prospectus offers shares of the following funds of the Trust: Large Cap
Value, Large Cap Growth, Small Cap Value, Small Cap Growth, Core Fixed Income,
High Yield Bond, International Fixed Income, Emerging Markets Equity, Core
International Equity, European Equity, Pacific Basin Equity and Prime Money
Market Funds (the "Funds," and each of these, a "Fund"). All of these Funds are
diversified funds except for the International Fixed Income Fund, which is a
non-diversified fund. Additional information pertaining to the Trust may be
obtained in writing from SEI Financial Services Company, 680 East Swedesford
Road, Wayne, PA 19087 or by calling 1-800-342-5734.

ELIGIBLE INVESTORS
================================================================================

Shares of the Funds are currently offered to eligible investors. Eligible
investors are principally institutions and high net worth individuals who have
investable pools of assets, including defined benefit plans, defined
contribution plans, health care defined benefit plans and board-designated
funds, insurance operating funds, foundations, endowments, public plans and
Taft-Hartley plans, registered investment advisers and bank trust departments
("Eligible Investors").

Pursuant to an Asset Management Client Service Agreement (the "Agreement"), SEI
Financial Management Corporation ("SFM") will consult with a client to define
its investment objectives, desired returns and tolerance for risk, and to
develop a plan for the allocation of assets among different asset classes. Once
these decisions have been made by the client, the client's assets are invested
in one or more of the Funds. A client may change the allocation of its assets
among the Funds, or withdraw some or all of its assets from the Funds at any
time by redeeming Fund shares.

Shares of the Funds are not generally offered to individual investors, although
SFM may enter into Agreements with individual investors. Eligible Investors,
such as bank trust departments and registered investment advisers ("Financial
Intermediaries"), may acquire shares of the Funds for the benefit of individual
customers. SFM develops investment strategies and programs and asset allocation
models for Financial Intermediaries which, in turn, provide these services to
their customers. Financial Intermediaries may charge their customers a fee for
providing these and other services.

The Agreement sets forth the fee to be paid to SFM, which is ordinarily
expressed as a percentage of the client's assets invested in the Funds. This
fee may include a fixed-dollar fee for certain specified services. The fee is
negotiated by the client and SFM based upon various considerations, including
the amount of the client's assets expected to be invested in the Funds and the
nature and extent of services to be provided by SFM to the client. Either the
client or SFM may terminate the Agreement upon written notice as provided in the
Agreement. SFM normally does not expect to exercise its right to terminate an
Agreement unless the client does not (i) promptly pay fees due to SFM; or (ii)
invest sufficient assets in the Funds to compensate SFM for providing services
to the client and operating the

-7-
<PAGE>

Funds. Upon termination of an Agreement by the client or SFM, SFM will no longer
provide investment strategies and programs and asset allocation models to the
client. The client may continue to hold its shares of the Funds as long as the
client pays fees owed to SFM.

STYLE STRUCTURED, MULTI-MANAGER DIVERSIFICATION
================================================================================

Style structured, multi-manager investing provides diversification and risk
control by allocating investments among global equity and fixed income asset
classes. The Funds were created specifically to support a style structured
approach to investing. Individual Funds are designed to capture distinct
investment styles within asset classes. SFM has developed investment strategies
by creating various combinations of Funds. By varying either the combination of
the Funds or the relative percentages of each Fund, SFM is able to offer
numerous distinct investment strategies. These investment strategies follow a
style structured approach to investing which tends to reduce volatility. For
example, the domestic equity portion of an investment strategy is exposed to the
various styles of the equity market including large capitalization value, large
capitalization growth, small capitalization value and small capitalization
growth.

Within each Fund one or more Money Managers are utilized to select that Fund's
individual securities. These Money Managers specialize in the particular style
or styles that each Fund is designed to capture. SFM utilizes a proprietary
money manager research process to select and recommend particular Money Managers
to the Board of Trustees. This research process provides a quantitative and
qualitative analysis of the Money Managers at their initial selection and, once
hired, on an ongoing basis.

The result of this process is an integrated investment program featuring asset
allocation and investment products based upon the principles of portfolio
structure, specialist Money Managers and continuous investment management.

GENERAL MANAGEMENT OF THE FUNDS
================================================================================

SFM is a wholly-owned subsidiary of SEI Corporation ("SEI"), a financial
services company located in Wayne, Pennsylvania. The principal business address
of SFM is 680 East Swedesford Road, Wayne, Pennsylvania, 19087-1658. SEI was
founded in 1968 and is a leading provider of investment solutions to banks,
institutional investors, investment advisers and insurance companies.
Affiliates of SFM have provided consulting advice to institutional investors for
more than 20 years, including advice regarding selection and evaluation of money
managers. SFM currently serves as manager and administrator to more than 26
investment companies, including more than 220 funds, with more than $42 billion
in assets as of December 31, 1994.

The Trust's Board of Trustees is responsible for overseeing the operation of the
Trust, including reviewing and approving the Trust's contracts with SFM and the
Money Managers. SFM and its affiliate, SEI Financial Services Company ("SFS"),
is responsible for (i) providing or overseeing all general management and
administration, investment advisory, portfolio management and distribution
services; (ii) developing the investment strategies, selecting the Money
Managers, allocating assets among the Money Managers and monitoring the Money
Managers' investment process and

-8-
<PAGE>

performance. SFM also provides transfer agent and shareholder recordkeeping
services to the Trust and provides the necessary office space, equipment and
personnel to operate and administer the Trust.

SFS serves as the distributor pursuant to a distribution agreement with the
Trust. No compensation is paid to the distributor for distribution services for
the shares of any Fund.

The Trust pays its expenses, including the fees of its service providers, audit
and legal expenses, expenses of preparing prospectuses, proxy solicitation
materials and reports to shareholders, costs of custodial services and
registering the shares under federal and state securities laws, pricing,
insurance expenses, litigation and other extraordinary expenses, brokerage
costs, interest charges, taxes and organizational expenses.

For its management services, SFM is entitled to a fee which is calculated daily
and paid monthly at the following annual rates (shown as a percentage of the
average daily net assets of each Fund): Large Cap Value Fund, 0.30%; Large Cap
Growth Fund, 0.35%; Small Cap Value Fund, 0.60%; Small Cap Growth Fund, 0.60%;
Core Fixed Income Fund, 0.225%; High Yield Bond Fund, 0.4375%; International
Fixed Income Fund, 0.40%; Emerging Markets Equity Fund, 1.00%; Core
International Equity Fund, 0.425%; European Equity Fund, 0.425%; Pacific Basin
Fund, 0.50%; and Prime Money Market Fund, 0.175%. SFM pays each Money Manager
for its services to a Fund from the management fee SFM receives from that Fund.

THE MONEY MANAGERS
================================================================================

SFM is the investment adviser for each Fund except the Prime Money Market Fund,
and in that capacity (i) has the ability to make investment decisions for a
Fund, and (ii) supervises the investment sub-advisers that are responsible for
the day to day investment management of a Fund. Wellington Management Company
("WMC") is the investment adviser for the Prime Money Market Fund; the Fund has
no investment sub-adviser.

SFM has been granted an exemptive order from the Securities and Exchange
Commission (the "SEC") that permits SFM, with the approval of the Trust's Board
of Trustees, to retain sub-advisers for a Fund without submitting the sub-
advisory agreement to a vote of the Fund's shareholders. The exemptive relief
also permits the disclosure of only the aggregate amount payable by SFM under
all such sub-advisory agreements. The Trust will notify shareholders of the
appropriate Fund in the event of any change in the identity of the sub-adviser
for a Fund. In addition, SFM may change the allocation of a Fund's assets among
Money Managers at any time. Currently, the assets of each Fund are allocated
among the Money Managers listed below.

Money Managers are selected for the Funds based primarily upon the research and
recommendations of SFM, which evaluates quantitatively and qualitatively a Money
Manager's skills and investment results in managing assets for specific asset
classes, investment styles and strategies. Short-term investment performance,
by itself, is not a controlling factor in selecting or terminating a Money
Manager.

-9-
<PAGE>

1838 INVESTMENT ADVISORS, L.P.

1838 Investment Advisors, L.P. ("1838") acts as a Money Manager for the Small
Cap Value Fund, which is also advised by SFM. 1838, a Delaware limited
partnership, was founded in 1988. As of December 6, 1994, 1838 Advisors managed
$4.0 billion in assets, $100 million of which is invested in small cap stocks in
the value style. The principal address of 1838 is 5 Radnor Corporate Center,
100 Matsonford Road, Suite 320, Radnor, Pennsylvania 19087.

Edwin B. Powell, Joseph T. Doyle, Jr., and Holly L. Guthrie have been the Fund
Managers for the Fund since the Fund's inception. These individuals work as a
team and share responsibility. Mr. Doyle has been with 1838 since 1988. Prior
to joining 1838 in 1994, Mr. Powell managed small cap equity funds for Provident
Capital Management from 1987 to 1993. Prior to joining 1838 in 1994, Ms.
Guthrie managed small cap equity funds for Provident Capital Management from
1992 to 1994. Prior to that she was employed by CoreStates Investment Advisers
from 1987 to 1992 as an equity analyst and fund manager.

ACADIAN ASSET MANAGEMENT, INC.

Acadian Asset Management, Inc. ("Acadian") acts as a Money Manager for a portion
of the Core International Equity Fund, which is also advised by SFM and
WorldInvest Limited. Acadian, a wholly-owned subsidiary of United Asset
Management Corporation, is a [state] corporation founded in 1977, and manages
approximately $2 billion in assets invested globally. The principal address of
Acadian is 260 Franklin Street, Boston, Massachusetts 02110.

An investment committee has been managing the Fund assets allocated to Acadian
since the Fund's inception.

ALLIANCE CAPITAL MANAGEMENT L.P.

Alliance Capital Management L.P. ("Alliance") acts as a Money Manager for a
portion of the Large Cap Growth Fund, which is also advised by SFM and IDS
Advisory Group Inc. Alliance, a Delaware limited partnership, originated as
Alliance Capital Management Corporation in 1971. Alliance Capital Management
Corporation, an indirect wholly-owned subsidiary of The Equitable Life Assurance
Society of the United States, is the general partner of Alliance. As of
September 30, 1994, Alliance managed approximately $123 billion in assets. The
principal address of Alliance is 1345 Avenue of the Americas, New York, New York
10105. Alliance is a majority owned subsidiary of the Equitable Life Assurance
Society.

John L. Blundin and Christopher Toub have been the Fund Managers for Alliance's
portion of the assets of the Fund since the Fund's inception. Mr. Blundin is
the Senior Vice President for Alliance and a Fund Manager with the Disciplined
Growth Group. He has been with Alliance since 1972. Mr. Toub is a Vice
President of Alliance and a Fund Manager with the Disciplined Growth Group.
Prior to joining Alliance in 1992, Mr. Toub was with Marcus, Schloss, a private
investment partnership, as an analyst and fund manager. Prior to Marcus,
Schloss, Mr. Toub worked at Bear Stearns in proprietary trading.

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<PAGE>

CS FIRST BOSTON INVESTMENT MANAGEMENT CORPORATION

CS First Boston Investment Management Corporation ("CS First Boston Management")
acts as a Money Manager for the High Yield Bond Fund, which is also advised by
SFM. CS First Boston Management, a [STATE] corporation was founded in [DATE].
CS First Boston Management, together with CS First Boston Corporation, is a
subsidiary of CS First Boston, Inc. CS First Boston Management has been
providing fixed income and equity investment management services to
institutional clients since 1984. Total assets under Management as of August
31, 1994 exceed $7.6 billion. The principal business address of CS First Boston
Investment Management is 599 Lexington Avenue, New York, New York 10022.

Richard J. Lindquist, CFA, Managing Director, has had primary responsibility for
the day to day management of the Fund since the Fund's inception. Mr. Lindquist
has been the leader of the Money Manager's high yield management team and
primary high yield fund manager since he joined the Money Manager in July 1989.

IDS ADVISORY GROUP INC.

IDS Advisory Group Inc. ("IDS") acts as a Money Manager for a portion of the
Large Cap Growth Fund, which is also advised by SFM and Alliance Capital
Management L.P. IDS, a Minnesota corporation was founded in 1972. IDS is a
registered investment adviser and wholly-owned subsidiary of American Express
Financial Corporation, formerly, IDS Financial Corporation. As of September 30,
1994, IDS managed over $20.5 billion in assets with $5 billion of this total in
large capitalization growth domestic equities. The principal business address
of IDS is IDS Tower 10, Minneapolis, Minnesota 55400-0010.

A committee composed of eight investment fund managers of the equity investment
team has been managing the Fund assets allocated to IDS since the Fund's
inception.

LSV ASSET MANAGEMENT

LSV Asset Management ("LSV") acts as a Money Manager for a portion of the Large
Cap Value Fund, which is also advised by SFM, Mellon Equity Associates and Merus
Capital Management. LSV is a Delaware general partnership established in 1994,
in which an affiliate of SFM owns a majority interest. The general partners of
LSV have developed quantitative value analysis methodology and software which
has been used to manage assets over the past 5 years. Although LSV has never
managed investment companies, the fund identified by the model has been
implemented by three institutional clients with aggregate assets invested of
approximately $455 million, including $15 million in a fund of U.S. securities.
The principal business address of LSV is 181 W. Madison Avenue, Chicago,
Illinois 60602.

Investment decisions for Fund assets allocated to LSV have been made by the
quantitative computer model since the Fund's inception. Josef Lakonishok,
Andrei Shleifer and Robert Vishny, officers of LSV, continually monitor the
quantitative analysis model, and based on their ongoing research and statistical
analysis make adjustments to the model. Securities are identified for purchase
or sale by the fund based upon the computer model and defined variance
tolerances. Purchases and sales are effected by LSV based upon the output from
the model.

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<PAGE>

MELLON EQUITY ASSOCIATES

Mellon Equity Associates ("Mellon") acts as a Money Manager for a portion of the
Large Cap Value Fund, which is also advised by SFM, LSV and Merus Capital
Management. Mellon is a Pennsylvania business trust founded in 1987 whose sole
beneficiary is MBC Investments Corporation, a wholly-owned subsidiary of the
Mellon Bank Corporation. Mellon's predecessor organization had managed domestic
equity tax-exempt institutional accounts since 1947. Mellon is a professional
investment counseling firm that provides investment management, services to the
equity and balanced pension, public fund and profit-sharing investment
management markets, and is a registered investment adviser under the Investment
Company Act of 1940, as amended (the "1940 Act"). As of September 30, 1994,
Mellon had discretionary management authority with respect to approximately $6.2
billion of assets. The principal address for Mellon is 500 Grant Street, Suite
3700, Pittsburgh, Pennsylvania 15258.

William P. Rydell and Robert A. Wilk have shared primary responsibility for
Mellon's portion of the Fund's assets since the Fund's inception. Mr. Rydell is
the President and Chief Executive Officer of Mellon, and has been managing
individual and collectivized portfolios at Mellon since 1982. Mr. Wilk is a
Senior Vice President and Portfolio Manager of Mellon, and has been involved
with securities analysis, quantitative research, asset allocation, trading and
client services at Mellon since April 1990. Prior to joining Mellon, Mr. Wilk
was in charge of portfolio management and conducted quantitative research for
another investment subsidiary of Mellon Bank Corporation, Triangle Portfolio
Associates.

MERUS CAPITAL MANAGEMENT

Merus Capital Management ("Merus") acts as a Money Manager for a portion of the
Large Cap Value Fund, which is also advised by SFM, Mellon and LSV. Merus, a
[STATE] [ORGANIZATIONAL FORM] was founded [DATE]. Merus is a division of the
Bank of California and provides equity and fixed income management services to a
broad array of corporate and municipal clients. As of September 30, 1994, Merus
had discretionary management authority with respect to approximately $6.2
billion of assets. The principal address of Merus is 475 Sansome Street, San
Francisco, California 94111.

A committee has been managing the Fund assets allocated to Merus since the
Fund's inception.

MONTGOMERY ASSET MANAGEMENT, L.P.

Montgomery Asset Management, L.P. ("MAM") acts as a Money Manager for the
Emerging Markets Equity Fund, which is also advised by SFM. MAM, a California
limited partnership, was founded in 1990. MAM is an independent affiliate of
Montgomery Securities, a San Francisco based investment banking firm. As of
July 31, 1994, MAM had approximately $2.8 billion in assets under management.
MAM has over four years experience providing investment management services.
The principal address of MAM is 600 Montgomery Street, San Francisco, California
94111.

Josephine S. Jimenez, CFA and Bryan L. Sudweeks, CFA, Ph.D have shared primary
responsibility for the Fund since the Fund's inception. Ms. Jimenez and Dr.
Sudweeks joined MAM in 1991. Prior to joining MAM, Ms. Jimenez and Dr. Sudweeks
worked together as senior analysts and Portfolio Managers with Emerging Markets
Investments/Emerging Markets Management, Washington, D.C.

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<PAGE>

Ms. Jimenez has 13 years investment experience. Dr. Sudweeks has ten years
emerging markets investment experience.

MORGAN GRENFELL INVESTMENT SERVICES LIMITED

Morgan Grenfell Investment Services Limited ("Morgan Grenfell") acts as a Money
Manager for the European Equity Fund, which is also advised by SFM. Morgan
Grenfell, a United Kingdom corporation organized under the laws of England and
Wales was founded in 1977. Morgan Grenfell, a subsidiary of Morgan Grenfell
Asset Management Limited, managed over $9 billion in assets as of December 31,
1994. Morgan Grenfell Asset Management Limited, a wholly-owned subsidiary of
Deutsche Bank, A.G., a German financial services conglomerate, managed over $48
billion in assets as of December 31, 1994. Morgan Grenfell has over 16 years
experience in managing international funds for North American clients. It
employs 21 European investment professionals. The principal address of Morgan
Grenfell is 20 Finsbury Circus, London, EC2M 1NB.

Jeremy G. Lodwick and Julian R. Johnston have shared primary responsibility for
the Fund since the Fund's inception. Mr. Lodwick has ten years experience in
European equity investment. He joined Morgan Grenfell in 1986 and was a UK
equity research analyst before moving to New York where he was a member of the
client liaison and marketing team for 5 years. He returned to the London office
in 1991 to manage European equity funds. Mr. Johnston has 21 years experience
in European equity investment. Mr. Johnston joined Morgan Grenfell in 1984 and
is currently the head of the Morgan Grenfell Continental European investment
team. He speaks French, German, Swedish and Danish fluently.

PILGRIM BAXTER & ASSOCIATES, LTD.

Pilgrim Baxter & Associates, Ltd. ("Pilgrim Baxter") acts as a Money Manager for
the Small Cap Growth Fund, which is also advised by SFM. Pilgrim Baxter, a
Pennsylvania corporation, was founded in 1982. Pilgrim Baxter has operated as a
professional investment counseling firm which provides investment services to
pension and profit-sharing plans, other institutions and investment companies
since November, 1982. As of September 30, 1994, Pilgrim Baxter had
discretionary management authority with respect to approximately $106 billion of
assets. Pilgrim Baxter is an "S" Corporation with majority ownership by Gary L.
Pilgrim (42.35%) and Harold J. Baxter (42.35%). Pilgrim Baxter has entered into
certain agreements with Framlington (USA), Inc., the U.S. affiliate of a British
financial services firm, Framlington Group plc ("Framlington"), for sharing the
profits of Pilgrim Baxter's advisory contract income (not including income from
Pilgrim Baxter's advisory agreement with the Trust and sub-advisory fees from
other mutual funds). The principal address of Pilgrim Baxter is 1255 Drummers
Lane, Suite 300, Wayne, Pennsylvania 19087.

John F. Force, CFA, has had primary responsibility for the day to day management
of the Fund since the Fund's inception. Mr. Force joined Pilgrim Baxter in
January 1993 and is a fund Manager/Analyst. Prior to joining Pilgrim Baxter,
Mr. Force was Vice President/Fund Manager at Fiduciary Management Associates
from July 1987 to September 1992.

SCHRODER CAPITAL MANAGEMENT INTERNATIONAL LIMITED

Schroder Capital Management International Limited ("SC") acts as a Money Manager
for the Pacific Basin Equity Fund, which is also advised by SFM. SC, a [state]
[organizational form] founded in

-13-
<PAGE>

1980, is a wholly-owned indirect subsidiary of Schroder plc, the holding company
parent of an investment banking and investment management group of companies
(the "Schroder Group"). The investment management operations of the Schroder
Group are located in 17 countries worldwide, including seven in Asia. As of
March 1, 1994, the Schroder Group had over $75 billion in assets under
management. As of that date, SC had over $11 billion in assets under management.
The Schroder Group has research resources throughout the Asian region,
consisting of offices in Tokyo, Hong Kong, Singapore, Kuala Lumpur, Seoul,
Taipei and Jakarta, staffed by 38 investment professionals. SC's investment
process emphasizes individual stock selection and company research conducted by
professionals at each local office which is integrated into SC's global research
network by the manager of research in London. The principal address of SC is 33
Gutter Lane, London EC2V 8AS, England.

John S. Ager, a Senior Vice President and Director of SC, has been the principal
manager of the Fund since the Fund's inception. Mr. Ager has over 17 years of
experience in managing client accounts invested in Asian countries.

STRATEGIC FIXED INCOME L.P.

Strategic Fixed Income L.P. ("Strategic") acts as the Money Manager for the
International Fixed Income Fund. Strategic, a [STATE] limited partnership was
formed in 1991 to specifically manage multi-currency fixed income funds. The
general partner of the firm is Kenneth Windheim and the limited partner is
Strategic Investment Management ("SIM"). As of March 1, 1994, Strategic had
approximately $2.2 billion of client assets under management. Together,
Strategic and SIM managed over $9.0 billion in client assets as of that date.
The principal address of Strategic is 1001 Nineteenth Street North, 16th Floor,
Arlington, Virginia 22209.

Kenneth Windheim, President, and Diane Bilverstone, Director, of Strategic share
primary responsibility for the Fund since the Fund's inception. Prior to
joining Strategic, Mr. Windheim managed a global fixed income fund at Prudential
Asset Management. Prior to joining Strategic, Ms. Bilverstone managed the
International Bond Funds as well as the capital reserves of the Hambros Bank in
London, United Kingdom.

WELLINGTON MANAGEMENT COMPANY

Wellington Management Company ("WMC") acts as the Money Manager of the Prime
Money Market Fund. WMC is a professional investment counseling firm which
provides investment services to investment companies, employee benefit plans,
endowments, foundations, and other institutions and individuals. WMC is a
Massachusetts general partnership of which Robert W. Doran, Duncan M. McFarland
and John B. Neff are managing partners. WMC's predecessor organizations have
provided investment advisory services to investment companies since 1933 and to
investment counseling clients since 1960. As of December 31, 1994, WMC had
discretionary management authority with respect to approximately $82.0 billion
of assets, including the assets of SEI Daily Income Trust and SEI Liquid Asset
Trust, both of which are open-ended money market investment companies.
Wellington Trust Company, National Association, a wholly-owned subsidiary of
WMC, utilizes SEI's trust accounting services. The principal address of WMC is
75 State Street, Boston, Massachusetts 02109.

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<PAGE>

WESTERN ASSET MANAGEMENT COMPANY

Western Asset Management Company ("Western") acts as a Money Manager for the
Core Fixed Income Fund, which is also advised by SFM. Western, a California
Corporation, was founded in 1971 and specializes in the management of fixed
income funds. Western is a wholly-owned subsidiary of Legg Mason, Inc., a
financial services company located in Baltimore, Maryland. As of September 30,
1994, Western managed approximately $12 billion in client assets, including $2
billion of investment company assets. The principal business address of Western
is 117 East Colorado Boulevard, Pasadena, California 91105.

Kent S. Engel, Director and Chief Investment Officer of Western, has been
primarily responsible for the day to day management of the Fund since the Fund's
inception. Mr. Engel has been with Western and its predecessor since 1969.

WORLDINVEST LIMITED

WorldInvest Limited ("WorldInvest") acts as a Money Manager for a portion of the
Core International Equity Fund, which is also advised by SFM and Acadian.
WorldInvest is incorporated in the United Kingdom and registered in England and
Wales, and was founded in 1976. An international investment manager,
WorldInvest has managed equity securities on a global basis since 1977.
WorldInvest is a wholly-owned subsidiary of WorldInvest Holdings Limited, an
English corporation formed in 1977. Total global assets under management as of
August 30, 1994 were more than $5.5 billion, of which more than $2.8 billion
were invested in global equities. The principal address of WorldInvest is 56
Russell Square, London, England.

A team of equity fund managers led by Mark Beale share primary responsibility
for the Fund since the Fund's inception. Mr. Beale is an Equity Investment
Manager for WorldInvest and has been with the firm since 1982.

INVESTMENT OBJECTIVES AND POLICIES
================================================================================

Each Fund's Investment Objectives and Policies are set forth below. See
"General Investment Policies and Risk Factors" for information about additional
investment practices that some or all of the Funds may employ.

LARGE CAP VALUE FUND

The investment objective of the Large Cap Value Fund is long-term growth of
capital and income. There is no assurance that the Fund will achieve its
investment objective.

Under normal market conditions, the Fund will invest at least 65% of its total
assets in equity securities of large companies (i.e., companies with market
----
capitalizations of more than $1 billion at the time of purchase). The Fund's
Money Managers will generally select income-producing securities of companies
believed to be undervalued on the basis of various market-related criteria. The
Fund also may invest in fixed income securities or in equity securities of
smaller companies that the Fund's Money Managers believe are appropriate in
light of the Fund's objective. Fixed income securities

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<PAGE>

must be rated investment grade or better, i.e., rated in one of the four highest
----
rating categories by an NRSRO, or, if not rated, determined to be of
comparable quality by the Fund's Money Managers. Fixed income securities rated
BBB or Baa lack outstanding investment characteristics, and have speculative
characteristics as well.

The Fund's Money Managers are SFM, LSV Asset Management, Merus Capital
Management and Mellon Equity Associates.

LARGE CAP GROWTH FUND

The investment objective of the Large Cap Growth Fund is capital appreciation.
There is no assurance that the Fund will achieve its investment objective.

Under normal market conditions, the Fund will invest at least 65% of its total
assets in the equity securities of large companies (i.e., companies with market
----
capitalizations of more than $1 billion at the time of purchase). The Fund's
Money Managers will generally select securities of issuers believed to possess
significant growth potential. The Fund also may invest in fixed income
securities or in equity securities of smaller companies that the Fund's Money
Managers believe are appropriate in light of the Fund's objective. Fixed income
securities must be rated investment grade or better, i.e., rated in one of the
----
four highest rating categories by an NRSRO, or, if not rated, determined to be
of comparable quality by the Fund's Money Managers. Fixed income securities
rated BBB or Baa lack outstanding investment characteristics, and have
speculative characteristics as well.

The Fund's Money Managers are SFM, Alliance Capital Management L.P. and IDS
Advisory Group Inc.

SMALL CAP VALUE FUND

The investment objective of the Small Cap Value Fund is capital appreciation.
There is no assurance that the Fund will achieve its investment objective.

Under normal market conditions, the Fund will invest at least 65% of its total
assets in the equity securities of smaller companies (i.e., companies with
----
market capitalizations of less than $1 billion at the time of purchase). The
Fund's Money Managers will select securities of companies believed to be
undervalued on the basis of various market-related criteria. The Fund also may
invest in fixed income securities or in equity securities of larger, more
established companies that the Fund's Money Managers believe are appropriate in
light of the Fund's objective. Fixed income securities must be rated investment
grade or better, i.e., rated in one of the four highest rating categories by an
----
NRSRO, or, if not rated, determined to be of comparable quality by the Fund's
Money Managers. Fixed income securities rated BBB or Baa lack outstanding
investment characteristics, and have speculative characteristics as well.

The Fund's Money Managers are SFM and 1838 Investment Advisors, L.P.

SMALL CAP GROWTH FUND

The investment objective of the Small Cap Growth Fund is long-term capital
appreciation. There is no assurance that the Fund will achieve its investment
objective.

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<PAGE>

Under normal market conditions, the Fund will invest at least 65% of its total
assets in the equity securities of smaller companies (i.e., companies with
----
market capitalizations of less than $1 billion at the time of purchase). The
Fund's Money Managers will generally select securities of issuers believed to
possess significant growth potential. The Fund also may invest in fixed income
securities or in equity securities of larger companies that the Fund's Money
Managers believe are appropriate in light of the Fund's objective. Fixed income
securities must be rated investment grade or better, i.e., rated in one of the
----
four highest rating categories by an NRSRO, or, if not rated, determined to be
of comparable quality by the Fund's Money Managers. Fixed income securities
rated BBB or Baa lack outstanding investment characteristics, and have
speculative characteristics as well.

The Fund's Money Managers are SFM and Pilgrim Baxter & Associates, Ltd.

CORE FIXED INCOME FUND

The investment objective of the Core Fixed Income Fund is current income
consistent with the preservation of capital. There is no assurance that the
Fund will achieve its investment objective.

Under normal market conditions, the Fund will invest at least 65% of its total
assets in fixed income securities that are rated in one of the three highest
rating categories by an NRSRO (e.g., AAA, AA or A by S&P or Aaa, Aa or A by
----
Moody's) at the time of purchase, or, if not rated are determined to be of
comparable quality by the Fund's Money Managers. The Fund also may invest in
fixed income securities that are rated BBB or Baa by an NRSRO at the time of
purchase, or, if not rated, determined to be of comparable quality by the Fund's
Money Managers. Fixed income securities rated BBB or Baa lack outstanding
investment characteristics, and have speculative characteristics as well.

The Fund may acquire all types of fixed income securities issued by domestic and
foreign private and governmental issuers, including convertible, mortgage-backed
and asset backed securities. The Fund may invest not only in traditional fixed
income securities, such as bonds and debentures, but in structured securities
that make interest and principal payments based upon the performance of
specified assets or indices. Structured securities include mortgage-backed
securities such as pass-through certificates, collateralized mortgage
obligations and interest and principal only components of mortgage-backed
securities. The Fund may also invest in mortgage dollar roll transactions and
warrants on fixed income securities. The Fund may invest in zero coupon
securities. Under normal market conditions, the average dollar-weighted
maturity of the Fund will range between 5 and 10 years.

The Fund's Money Managers are SFM and Western Asset Management.

HIGH YIELD BOND FUND

The investment objective of the High Yield Bond Fund is to maximize total
return. There is no assurance that the Fund will achieve its investment
objective.

Under normal market conditions, the Fund will invest at least 65% of its total
assets in fixed income securities that are rated below investment grade (i.e.,
----
below Baa or BBB) or, if not rated, determined to be of comparable quality by
the Fund's Money Managers. Below investment grade securities are commonly
referred to as "junk bonds," and generally entail increased credit and market
risk. The achievement of the Fund's investment objective may be more dependent
on the Fund's Money

-17-
<PAGE>

Managers' own credit analysis than would be the case if the Fund invested in
higher rated securities. The Fund also may invest in equity, investment grade
fixed income and money market securities that the Fund's Money Managers believe
are appropriate in light of the Fund's objective.

The Fund may acquire all types of fixed income securities issued by domestic and
foreign issuers, including convertible, mortgage-backed and asset-backed
securities. The Fund may invest in zero coupon, pay-in-kind or deferred payment
securities. The Fund may purchase securities in the lowest rating categories.
These securities may have predominantly speculative characteristics or may be in
default. The Fund's Money Managers may vary the average maturity of the
securities in the Fund without limit and there is no restriction on the maturity
of any individual security.

The "Appendix" to this Prospectus sets forth a description of the bond rating
categories of several NRSROs. Ratings of each NRSRO represents its opinion of
the safety of principal and interest payments (and not the market risk) of bonds
and other fixed income securities it undertakes to rate at the time of issuance.
Ratings are not absolute standards of quality and may not reflect changes in an
issuer's creditworthiness. Accordingly, although the Fund's Money Managers will
consider ratings, they will perform their own analyses and will not rely
principally on ratings. The Fund's Money Managers will consider, among other
things, the price of the security and the financial history and condition, the
prospects and the management of an issuer in selecting securities for the Fund.

The Fund's Money Managers are SFM and CS First Boston Investment Management
Corporation.

INTERNATIONAL FIXED INCOME FUND

The International Fixed Income Fund seeks to provide capital appreciation and
current income. There is no assurance that the Fund will achieve its investment
objective.

Under normal market conditions, the Fund will invest in at least 65% of its
total assets in investment grade fixed income securities of non-U.S. issuers
located in at least three different countries other than the United States. The
Fund also may invest in obligations issued or guaranteed as to principal and
interest by the United States Government, its agencies or instrumentalities,
swaps and preferred stocks. The Fund also may engage in short selling.
Although the Fund will concentrate its investments in the developed countries
listed above, the Fund may invest in securities of companies located in and
governments of emerging market countries, including countries formerly
controlled by communist governments. Investments in such emerging markets
countries will not exceed 5% of the Fund's total assets at the time of purchase.
Such investments entail risks which include the possibility of political or
social instability, adverse changes in investment or exchange control
regulations, expropriation and withholding of dividends at the source. In
addition, such securities may trade with less frequency and volume than
securities of companies and governments of developed, stable nations.

The Fund may acquire all types of fixed income securities issued by foreign
private and governmental issuers, including convertible, mortgage-backed and
asset-backed securities. The Fund may invest not only in traditional fixed
income securities, such as bonds and debentures, but in structured securities
that derive interest and principal payments from specified assets or indices.
The Fund's investments may pay interest not only at a fixed rate but on a zero
coupon basis. All such investments will be in investment grade securities
denominated in various currencies, including the European Currency Unit.
Investment grade securities are rated in one of the highest four rating
categories by an NRSRO, or, if not rated, determined to be of comparable quality
as determined by the Fund's Money Managers.

-18-
<PAGE>

Fixed income securities rated BBB or Baa lack outstanding investment
characteristics, and have speculative characteristics as well.

There are no restrictions on the average maturity of the Fund or the maturity of
any single instrument. Maturities may vary widely depending on the Fund's Money
Managers' assessment of interest rate trends and other economic and market
factors.

The Fund is a non-diversified fund. Investment in a non-diversified company may
entail greater risk than investment in a diversified company. The Fund's
ability to focus its investments on a fewer number of issuers means that
economic, political or regulatory developments affecting the Fund's investment
securities could have a greater impact on the total value of the Fund than would
be the case if the Fund were diversified among more issuers. The Fund intends
to comply with the diversification requirements of Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"). See "Taxes" for additional
information.

The Fund's Money Managers are SFM and Strategic Fixed Income, L.P.

EMERGING MARKETS EQUITY FUND

The Emerging Markets Equity Fund seeks to provide capital appreciation. There
is no assurance that the Fund will achieve its investment objective.

Under normal market conditions, the Fund will invest at least 65% of its total
assets in the equity securities of emerging market issuers. The Fund's Money
Managers consider emerging market issuers to be companies the securities of
which are principally traded in the capital markets of emerging market
countries; that derive at least 50% of their total revenue from either goods
produced or services rendered in emerging market countries, regardless of where
the securities of such companies are principally traded; or that are organized
under the laws of and have a principal office in an emerging market country.
Under normal market conditions, the Fund maintains investments in at least six
emerging market countries and does not invest more than 35% of its total assets
in any one country. The Fund also may invest in fixed income securities of
emerging market governments and companies. Certain securities issued by
governments of emerging market countries are or may be eligible for conversion
into investments in emerging market companies under debt conversion programs
sponsored by such governments. The Fund may invest in securities that are rated
below investment grade. Bonds rated below investment grade are often referred
to as "junk bonds." Such securities involve greater risk of default or price
decline than investment grade securities. See "Risks Factors Relating to
Investing in Lower Rated Securities" in "General Investment Policies and Risk
Factors."

When in the Fund's Money Managers' opinion there is an insufficient supply of
suitable securities from emerging market issuers, the Fund may invest up to 20%
of its total assets in the equity securities of non-emerging market companies
contained in the Morgan Stanley Capital International Europe, Australia, Far
East Index (the "EAFE Index"). These companies typically have larger average
market capitalizations than the emerging market companies in which the Fund
generally invests.

Securities of non-U.S. issuers purchased by the Fund may be purchased in foreign
markets, on U.S. registered exchanges or in the over-the-counter market. The
Fund will typically invest in equity securities listed on recognized foreign
exchanges, but may also invest in securities traded in over-the-counter markets.

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<PAGE>

The Fund's Money Managers are SFM and Montgomery Asset Management, L.P.

CORE INTERNATIONAL EQUITY FUND

The Core International Equity Fund seeks to provide capital appreciation. There
is no assurance that the Fund will achieve its investment objective.

Under normal market conditions, the Fund will invest at least 65% of its total
assets in the equity securities of non-U.S. issuers located in at least three
different countries other than the United States. The Fund also may invest in
U.S. or non-U.S. cash reserves and money market instruments. The Fund is also
permitted to acquire floating and variable rate securities.

The Fund's Money Managers are SFM, Acadian Asset Management, Inc. and
WorldInvest Limited.

EUROPEAN EQUITY FUND

The European Equity Fund seeks to provide capital appreciation. There is no
assurance that the Fund will achieve its investment objective.

Under normal market conditions, the Fund will invest at least 65% of its total
assets in the equity securities of European issuers. The Fund's Money Managers
consider European companies to be companies the securities of which are
principally traded in the European capital markets; that derive at least 50% of
their total revenue from either goods produced or services rendered in countries
located in Europe, regardless of where the securities of such companies are
principally traded; or that are organized under the laws of and have a principal
office in a European country. Investments could include securities of companies
located in and governments of emerging market countries, including countries
formerly controlled by communist governments. Investments in such emerging
markets countries will not exceed 5% of the Fund's total assets at the time of
purchase. Such investments entail risks which include the possibility of
political or social instability, adverse changes in investment or exchange
control regulations, expropriation and withholding of dividends at the source.
In addition, such securities may trade with less frequency and volume than
securities of companies and governments of developed, stable nations. The Fund
also may invest in U.S. or non-U.S. cash reserves and money market instruments.

The Fund's Money Managers are SFM and Morgan Grenfell Investment Services
Limited.

PACIFIC BASIN EQUITY FUND

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<PAGE>

The Pacific Basin Equity Fund seeks to provide capital appreciation. There is
no assurance that the Fund will achieve its investment objective.

Under normal market conditions, the Fund will invest at least 65% of its total
assets in the equity securities of Pacific Basin issuers. The Fund's Money
Managers consider Pacific Basin companies to be companies the securities of
which are principally traded in the capital markets of Pacific Basin countries;
that derive at least 50% of their total revenue from either goods produced or
services rendered in Pacific Basin countries, regardless of where the securities
of such companies are principally traded; or that are organized under the laws
of and have a principal office in a Pacific Basin country. Such investments
could include securities of companies located in and governments of emerging
market countries. Investments in such emerging markets countries will not
exceed 5% of the Fund's total assets at the time of purchase. Such investments
entail risks which include the possibility of political or social instability,
adverse changes in investment or exchange control regulations, expropriation and
withholding of dividends at the source. In addition, such securities may trade
with less frequency and volume than securities of companies and governments of
developed, stable nations. The Fund also may invest in U.S. or non-U.S. cash
reserves and money market instruments.

The Fund's Money Managers are SFM and Schroder Capital Management International
Limited.

PRIME MONEY MARKET FUND

The Prime Money Market Fund seeks to preserve principal value and maintain a
high degree of liquidity while providing current income. It is a fundamental
policy of the Fund to use its best efforts to maintain a constant net asset
value of $1.00 per share. There is no assurance that the Fund will achieve
either goal.

The Fund will invest only in U.S. dollar denominated money market instruments
that will mature within 397 days and are rated either (a) in the top rating
category for commercial paper or (b) in the top two rating categories for other
instruments, of at least two nationally recognized statistical rating
organizations (each, an "NRSRO") (or one NRSRO if the security has only one
rating); the issuers of which have outstanding other securities of comparable
maturity and priority that satisfy the foregoing criteria; or, if the security
is not rated, as determined by the Money Manager to be comparable in quality to
securities meeting the foregoing criteria. Money market instruments consist of
(i) securities issued or guaranteed by the U.S. Government or its agencies or
instrumentalities; (ii) obligations of banks or savings and loan institutions;
(iii) commercial paper and other short-term corporate obligations; (iv)
obligations of foreign governments including Canadian and Provincial Government
and Crown Agency Obligations; (v) short-term obligations issued by state and
local governmental issuers; (vi) securities that have been structured to be
eligible money market instruments, such as participation interests in special
purpose trusts, that meet the quality and maturity requirements in whole or in
part due to arrangements for credit enhancement or for shortening effective
maturity; and (vii) repurchase agreements involving any of such obligations.

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<PAGE>

The Fund complies with regulations of the SEC applicable to money market funds,
as amended from time to time. These regulations impose certain quality,
maturity and diversification restraints on investments by a money market fund.
For a description of certain of these restraints, see "Description of Permitted
Investments and Risk Factors."

The Fund's Money Manager is Wellington Management Company.

GENERAL INVESTMENT POLICIES AND RISK FACTORS
================================================================================

AMERICAN DEPOSITARY RECEIPTS
The Large Cap Value, Large Cap Growth, Small Cap Value, Small Cap Growth, Core
International Equity, European Equity, Pacific Basin Equity and Emerging Markets
Equity Funds may purchase American Depositary Receipts.

BORROWING
Each Fund may borrow money to meet redemptions or for temporary, emergency
purposes. No Fund will purchase securities while its borrowings exceed 5% of
its total assets.

EUROPEAN DEPOSITARY RECEIPTS
The Core International Equity, European Equity, Pacific Basin Equity and
Emerging Markets Equity Funds may purchase European Depositary Receipts.

FORWARD FOREIGN CURRENCY CONTRACTS
The High Yield Bond, International Fixed Income, Emerging Markets Equity, Core
International Equity, European Equity and Pacific Basin Equity Funds may enter
into forward foreign currency contracts.

GLOBAL DEPOSITARY RECEIPTS
The Core International Equity, European Equity, Pacific Basin Equity and
Emerging Markets Equity Funds may purchase Global Depositary Receipts.

ILLIQUID SECURITIES
Each Fund may invest in illiquid securities, including illiquid restricted
securities, up to 15% of their respective net assets, except that the Prime
Money Market Fund may invest up to 10% of its net assets in illiquid securities,
including illiquid restricted securities. However, restricted securities,
including Rule 144A securities and section 4(2) commercial paper, that meet the
criteria established by the Board of Trustees of the Trust will be considered
liquid. In addition, the Emerging Markets Equity Fund's Money Managers believe
that carefully selected investments in joint ventures, cooperatives,
partnerships, private placements, unlisted securities and other similar
situations (collectively, "special situations") could enhance its capital
appreciation potential. Investments in special situations may be illiquid, as
determined by the Emerging Markets Equity Fund's Money Managers based on
criteria approved by the Board of Trustees. To the extent these investments are
deemed illiquid, the Emerging Markets Equity Fund's investment in them will be
consistent with its 15% restriction on investment in illiquid securities.

INVESTMENT COMPANY SECURITIES

-22-
<PAGE>

Each Fund may purchase up to 10% of its total assets in investment company
securities, which will result in the layering of expenses. There are legal
limits on the amount of such securities that may be acquired by a Fund.

RISK FACTORS RELATING TO INVESTING IN LOWER RATED SECURITIES
The High Yield Bond and Emerging Markets Equity Funds may invest in lower rated
securities. Fixed income securities are subject to the risk of an issuer's
ability to meet principal and interest payments on the obligation (credit risk),
and may also be subject to price volatility due to such factors as interest rate
sensitivity, market perception of the creditworthiness of the issuer and general
market liquidity (market risk). Lower rated or unrated (i.e., high yield)
securities are more likely to react to developments affecting market and credit
risk than are more highly rated securities, which primarily react to movements
in the general level of interest rates primarily. The market values of fixed
income securities tend to vary inversely with the level of interest rates.
Yields and market values of high yield securities will fluctuate over time,
reflecting not only changing interest rates but the market's perception of
credit quality and the outlook for economic growth. When economic conditions
appear to be deteriorating, medium to lower rated securities may decline in
value due to heightened concern over credit quality, regardless of prevailing
interest rates. Investors should carefully consider the relative risks of
investing in high yield securities and understand that such securities generally
are not meant for short-term investing.

The high yield market is relatively new and its growth paralleled a long period
of economic expansion and an increase in merger, acquisition and leveraged
buyout activity. Adverse economic developments can disrupt the market for high
yield securities, and severely affect the ability of issuers, especially highly
leveraged issuers, to service their debt obligations or to repay their
obligations upon maturity which may lead to a higher incidence of default on
such securities. In addition, the secondary market for high yield securities,
which is concentrated in relatively few market makers, may not be as liquid as
the secondary market for more highly rated securities. As a result, a Fund's
Money Managers could find it more difficult to sell these securities or may be
able to sell the securities only at prices lower than if such securities were
widely traded. Furthermore, the Trust may experience difficulty in valuing
certain securities at certain times. Prices realized upon the sale of such
lower rated or unrated securities, under these circumstances, may be less than
the prices used in calculating such Fund's net asset value.

Prices for high yield securities may be affected by legislative and regulatory
developments. These laws could adversely affect a Fund's net asset value and
investment practices, the secondary market for high yield securities, the
financial condition of issuers of these securities and the value of outstanding
high yield securities. For example, federal legislation requiring the
divestiture by federally insured savings and loan associations of their
investments in high yield bonds and limiting the deductibility of interest by
certain corporate issuers of high yield bonds adversely affected the market in
recent years.

Lower rated or unrated fixed income obligations also present risks based on
payment expectations. If an issuer calls the obligations for redemption, a Fund
may have to replace the security with a lower yielding security, resulting in a
decreased return for investors. If a Fund experiences unexpected net
redemptions, it may be forced to sell its higher rated securities, resulting in
a decline in the overall credit quality of the Fund's investment portfolio and
increasing the exposure of the Fund to the risks of high yield securities.

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<PAGE>

OPTIONS AND FUTURES
Each Fund except the Prime Money Market Fund may purchase or write options,
futures and options on futures. Risks associated with investing in options and
futures may include lack of a liquid secondary market, trading restrictions
which may be imposed by an exchange, government regulations which may restrict
trading, an imperfect correlation between the prices of securities held by a
Fund and the price of an option or future and, in the case of non-U.S. futures
and options, the risks of investing in foreign markets generally.

PASSIVE FOREIGN INVESTMENT COMPANIES
The Core International Equity, European Equity, Pacific Basin Equity and
Emerging Markets Equity Funds may invest in securities issued by passive foreign
investment companies.

PORTFOLIO TURNOVER RATE
Each Fund's annual portfolio turnover rate may exceed 100%. Such a rate, if
achieved, will result in higher transaction costs and may result in additional
taxes for shareholders. See "Taxes."

SECURITIES LENDING
Each Fund may lend its fund securities in order to realize additional income.

TEMPORARY DEFENSIVE/LIQUIDITY NEEDS
In order to meet liquidity needs, or for temporary defensive purposes, each Fund
may invest up to 100% of its assets in cash and money market securities.

VARIABLE AND FLOATING RATE INSTRUMENTS
Each Fund may purchase instruments that pay interest on a variable or floating
rate basis.

WHEN-ISSUED OR DELAYED-DELIVERY SECURITIES
Each Fund may purchase securities on a when-issued or delayed-delivery basis.

WARRANTS
Each Fund except the Prime Money Market Fund may purchase warrants.

For additional information regarding the Funds' permitted investments, see
"Description of Permitted Investments and Risk Factors" in this Prospectus and
"Description of Permitted Investments" in the Statement of Additional
Information. For a description of the above ratings, see the "Appendix."

INVESTMENT LIMITATIONS
================================================================================

The investment objective and investment limitations are fundamental policies of
the Funds. Fundamental policies cannot be changed with respect to the Trust or
a Fund without the consent of the holders of a majority of the Trust's or that
Fund's outstanding shares.

No Fund may:

1. Purchase securities of any issuer (except securities issued or guaranteed by
the United States Government, its agencies or instrumentalities) if, as a
result, more than 5% of total assets of the Fund

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<PAGE>

would be invested in the securities of such issuer. This restriction applies to
75% of each Fund's total assets. This restriction does not apply to the
International Fixed Income Fund.

2. Purchase any securities which would cause more than 25% of the total assets
of the Fund to be invested in the securities of one or more issuers conducting
their principal business activities in the same industry, provided that this
limitation does not apply to investments in obligations issued or guaranteed by
the United States Government or its agencies and instrumentalities.

The foregoing percentage limitations will apply at the time of the purchase of a
security. Additional investment limitations are set forth in the Statement of
Additional Information.

PURCHASE AND REDEMPTION OF SHARES
================================================================================

Financial institutions may acquire shares of the Funds for their own accounts or
as record owner on behalf of fiduciary, agency or custody accounts by placing
orders with SFM. Institutions that use certain SEI proprietary systems may
place orders electronically through those systems. State securities laws may
require banks and financial institutions purchasing shares for their customers
to register as dealers pursuant to state laws. Financial institutions may
impose an earlier cut-off time for receipt of purchase orders directed through
them to allow for processing and transmittal of these orders to SFM for
effectiveness the same day. Financial institutions that purchase shares for the
accounts of their customers may impose separate charges on these customers for
account services. Shares of the Funds are offered only to residents of states
in which the shares are eligible for purchase.

Shares of each Fund may be purchased or redeemed on days on which the New York
Stock Exchange is open for business (each, a "Business Day"). However, shares
of the Prime Money Market Fund cannot be purchased by Federal Reserve wire on
federal holidays restricting wire transfers.

Shareholders who desire to purchase shares for cash must place their orders with
SFM prior to 4:00 p.m. Eastern time on any Business Day for the order to be
accepted on that Business Day. Cash investments must be transmitted or
delivered in federal funds to the wire agent on the next Business Day following
the day the order is placed. The Trust reserves the right to reject a purchase
order when the distributor determines that it is not in the best interest of the
Trust or its shareholders to accept such purchase order.

Purchases will be made in full and fractional shares of a Fund calculated to
three decimal places. The Trust will send shareholders a statement of shares
owned after each transaction. The purchase price of shares is the net asset
value next determined after a purchase order is received and accepted by the
Trust. The net asset value per share of each Fund is determined by dividing the
total market value of a Fund's investment and other assets, less any
liabilities, by the total outstanding shares of that Fund. Net asset value per
share is determined daily as of 4:00 p.m. Eastern time on any Business Day,
except that the net asset value per share of the Prime Money Market Fund is
determined daily as of 2:00 p.m. Eastern time on any Business Day.

The market value of each portfolio security is obtained by SFM from an
independent pricing service. Securities held by the Prime Money Market Fund and
securities held by the other Funds that have maturities of 60 days or less at
the time of purchase will be valued using the amortized cost method

-25-
<PAGE>

(described in the Statement of Additional Information). The pricing service
relies primarily on prices of actual market transactions as well as trader
quotations. However, the pricing service may use a matrix system to determine
valuations of equity and fixed income securities. This system considers such
factors as security prices, yields, maturities, call features, ratings and
developments relating to specific securities in arriving at valuations. The
procedures used by the pricing service and its valuations are reviewed by the
officers of the Trust under the general supervision of the Trustees.

Shareholders who desire to redeem shares of a Fund must place their redemption
orders with SFM prior to 4:00 p.m. Eastern time on any Business Day. The
redemption price is the net asset value per share of the Fund next determined
after receipt by SFM of the redemption order. Payment on redemption will be made
as promptly as possible and, in any event, within seven days after the
redemption order is received.

Purchase and redemption orders may be placed by telephone. Neither the Trust
nor SFM will be responsible for any loss, liability, cost or expense for acting
upon wire instructions or upon telephone instructions that it reasonably
believes to be genuine. The Trust and SFM will each employ reasonable
procedures to confirm that instructions communicated by telephone are genuine,
including requiring a form of personal identification prior to acting upon
instructions received by telephone and recording telephone instructions.

If market conditions are extraordinarily active, or other extraordinary
circumstances exist, and shareholders experience difficulties placing redemption
orders by telephone, shareholders may wish to consider placing their order by
other means.

PERFORMANCE
================================================================================

From time to time, a Fund may advertise yield and total return. These figures
will be based on historical earnings and are not intended to indicate future
performance. No representation can be made concerning actual yield or future
returns. The yield of a Fund refers to the annualized income generated by an
investment in the Fund over a specified thirty day period. The yield is
calculated by assuming that the same amount of income generated by the
investment during that period is generated in each 30-day period over one year
and is shown as a percentage of the investment.

From time to time, the Prime Money Market Fund may advertise the "current yield"
and "effective yield" (also called "effective compound yield"). These figures
are based on historical earnings and are not intended to indicate future
performance. No representation can be made concerning actual future yields or
returns. The "current yield" of the Fund refers to the income generated over a
seven-day period (which period will be stated in the advertisement). This
income is then "annualized," i.e., the income generated during that week is
assumed to be generated each week over a 52-week period and is shown as a
percentage of the investment. The "effective yield" (also "effective compound
yield") is calculated similarly but, when annualized, the income earned by an
investment in the Fund is assumed to be reinvested. The "effective yield" will
be slightly higher than the "current yield" because of the compounding effect of
this assumed reinvestment.

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<PAGE>

The total return of a Fund refers to the average compounded rate of return on a
hypothetical investment for designated time periods, assuming that the entire
investment is redeemed at the end of each period and assuming the reinvestment
of all dividend and capital gain distributions.

A Fund may periodically compare its performance to that of other mutual funds
tracked by mutual fund rating services (such as Lipper Analytical), or by
financial and business publications and periodicals, broad groups of comparable
mutual funds, unmanaged indices which may assume investment of dividends but
generally do not reflect deductions for administrative and management costs or
other investment alternatives. A Fund may quote Morningstar, Inc., a service
that ranks mutual funds on the basis of risk-adjusted performance. A Fund may
use long-term performance of these capital markets to demonstrate general long-
term risk versus reward scenarios and could include the value of a hypothetical
investment in any of the capital markets. A Fund may also quote financial and
business publications and periodicals as they relate to fund management,
investment philosophy and investment techniques.

A Fund may quote various measures of volatility and benchmark correlation in
advertising and may compare these measures to those of other funds. Measures of
volatility attempt to compare historical share price fluctuations or total
returns to a benchmark while measures of benchmark correlation indicate how
valid a comparative benchmark might be. Measures of volatility and correlation
are calculated using averages of historical data and cannot be calculated
precisely.

TAXES
================================================================================

The following summary of federal income tax consequences is based on current tax
laws and regulations, which may be changed by legislative, judicial or
administrative action. No attempt has been made to present a detailed
explanation of the federal, state or local tax treatment of the Funds or their
shareholders. Accordingly, shareholders are urged to consult their tax advisers
regarding specific questions as to federal, state and local taxes. State and
local tax consequences of an investment in a Fund may differ from the federal
income tax consequences described below. Additional information concerning
taxes is set forth in the Statement of Additional Information.

TAX STATUS OF THE FUNDS
Each Fund is treated as a separate entity for federal income tax purposes and is
not combined with the Trust's other funds. The Funds intend to qualify for the
special tax treatment afforded regulated investment companies ("RICs") under
Subchapter M of the Code, so as to be relieved of federal income tax on net
investment company taxable income and net capital gains (the excess of net long-
term capital gain over net short-term capital losses) distributed to
shareholders.

TAX STATUS OF DISTRIBUTIONS
Each Fund distributes substantially all of its net investment income (including
net short-term capital gains) to shareholders. Dividends from a Fund's net
investment income are taxable to its shareholders as ordinary income (whether
received in cash or in additional shares). Distributions of net capital gains
are taxable to shareholders as long-term capital gains regardless of how long
the shareholder has held shares. Dividends and capital gains distributions will
not qualify for the corporate dividends-received deduction. The Funds will
provide annual reports to shareholders of the federal income tax status of all
distributions.

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<PAGE>

Dividends declared by a Fund in October, November or December of any year and
payable to shareholders of record on a date in such a month will be deemed to
have been paid by the Fund and received by the Shareholders on December 31 of
the year declared if paid by the Fund at any time during the following January.

Each Fund intends to make sufficient distributions to avoid liability for the
federal excise tax.

Investment income received by the Funds from sources within foreign countries
may be subject to foreign income taxes withheld at the source. To the extent
that a Fund is liable for foreign income taxes so withheld, the Fund intends to
operate so as to meet the requirements of the Code to pass through to the
shareholders credit for foreign income taxes paid. Although the Funds intend to
meet Code requirements to pass through credit for such taxes, there can be no
assurance that the Funds will be able to do so.

Sale, exchange or redemption of Fund shares is a taxable transaction to the
shareholder.

GENERAL INFORMATION
================================================================================

TRUSTEES OF THE TRUST
The management and affairs of the Trust are supervised by the Trustees under the
laws of the Commonwealth of Massachusetts. The Trustees have approved contracts
under which, as described above, certain companies provide essential management
services to the Trust.

VOTING RIGHTS
Each share held entitles the shareholder of record to one vote. The shareholders
of each Fund will vote separately on matters pertaining solely to that Fund,
such as any distribution plan. As a Massachusetts business trust, the Trust is
not required to hold annual meetings of shareholders but approval will be sought
for certain changes in the operation of the Trust and for the election of
Trustees under certain circumstances. In addition, a Trustee may be removed by
the remaining Trustees or by shareholders at a special meeting called upon
written request of shareholders owning at least 10% of the outstanding shares of
the Trust. In the event that such a meeting is requested, the Trust will provide
appropriate assistance and information to the shareholders requesting the
meeting.

REPORTING
The Trust issues unaudited financial information semi-annually and audited
financial statements annually. The Trust furnishes proxy statements and other
reports to shareholders of record.

SHAREHOLDER INQUIRIES
Shareholder inquiries should be directed to the Manager, SEI Financial
Management Corporation, 680 East Swedesford Road, Wayne, Pennsylvania 19087.

DIVIDENDS
Substantially all of the net investment income (exclusive of capital gains) of
each Fund is periodically declared and paid as a dividend. Dividends currently
are paid periodically for the Large Cap Growth, Small Cap Value, Small Cap
Growth, International Fixed Income, Emerging Markets Equity, Core International
Equity, European Equity and Pacific Basin Equity Funds and currently are paid on
a

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<PAGE>

monthly basis for the Large Cap Value, Core Fixed Income and High Yield Bond
Funds and currently are paid on a quarterly basis for the Small Cap Growth Fund.
The Prime Money Market Fund declares dividends of substantially all of its net
investment income (exclusive of capital gains) daily and distributes such
dividends monthly. Purchased shares of the Prime Money Market Fund normally
begin earning dividends on the Business Day on which the purchase order relating
to such shares is effective. Currently, net capital gains for all the Funds
(the excess of net long-term capital gain over net short-term capital loss)
realized, if any, will be distributed at least annually.

Shareholders automatically receive all income dividends and capital gain
distributions in additional shares at the net asset value next determined
following the record date, unless the shareholder has elected to take such
payment in cash. Shareholders may change their election by providing written
notice to SFM at least 15 days prior to the distribution.

Dividends and capital gains of each Fund are paid on a per-share basis. The
value of each share will be reduced by the amount of any such payment. If shares
are purchased shortly before the record date for a dividend or capital gains
distributions, a shareholder will pay the full price for the share and receive
some portion of the price back as a taxable dividend or distribution.

COUNSEL AND INDEPENDENT ACCOUNTANTS
Morgan, Lewis & Bockius serves as counsel to the Trust. Coopers & Lybrand L.L.P.
serves as the independent accountants of the Trust.

CUSTODIAN AND WIRE AGENT
CoreStates Bank, N.A., Broad and Chestnut Streets, P.O. Box 7618, Philadelphia,
Pennsylvania 19101, acts as wire agent for each of the Funds and custodian for
the assets of the Prime Money Market, Large Cap Value, Large Cap Growth, Small
Cap Value, Small Cap Growth, Core Fixed Income and High Yield Bond Funds. The
Chase Manhattan Bank, N.A. Chase MetroTech Center, Brooklyn, NY 11245, acts as
custodian for the assets of the International Fixed Income, Emerging Markets
Equity, Core International Equity, European Equity and Pacific Basin Equity
Funds. CoreStates Bank, N.A. and Chase Manhattan Bank, N.A. (each, a
"Custodian," and together the "Custodians") hold cash, securities and other
assets of their respective Funds as required by the 1940 Act.

DESCRIPTION OF PERMITTED INVESTMENTS AND RISK FACTORS
================================================================================

The following is a description of the permitted investment practices for the
Funds, and the associated risk factors:

AMERICAN DEPOSITARY RECEIPTS ("ADRs"), EUROPEAN DEPOSITARY RECEIPTS ("EDRs") and
GLOBAL DEPOSITARY RECEIPTS ("GDRs") -- ADRs are securities, typically issued by
a U.S. financial institution (a "depositary"), that evidence ownership interests
in a security or a pool of securities issued by a foreign issuer and deposited
with the depositary. ADRs include American Depositary Shares and New York
Shares. EDRs, which are sometimes referred to as Continental Depositary
Receipts ("CDRs"), are securities, typically issued by a non-U.S. financial
institution, that evidence ownership interests in a security or a pool of
securities issued by either a U.S. or foreign issuer. GDRs are issued globally
and evidence a similar ownership arrangement. Generally, ADRs

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<PAGE>

are designed for trading in the U.S. securities market, EDRs are designed for
trading in European securities market and GDRs are designed for trading in non-
U.S. securities markets. ADRs, EDRs, CDRs and GDRs may be available for
investment through "sponsored" or "unsponsored" facilities. A sponsored facility
is established jointly by the issuer of the security underlying the receipt and
a depositary, whereas an unsponsored facility may be established by a depositary
without participation by the issuer of the receipt's underlying security.
Holders of an unsponsored depositary receipt generally bear all the costs of the
unsponsored facility. The depositary of an unsponsored facility frequently is
under no obligation to distribute shareholder communications received from the
issuer of the deposited security or to pass through to the holders of the
receipts voting rights with respect to the deposited securities. The Small Cap
Value, Small Cap Growth, Large Cap Value, Large Cap Growth, Emerging Markets
Equity, Core International Equity, European Equity and Pacific Basin Funds may
invest in ADRs; and the Emerging Markets Equity, Core International Equity,
European Equity and Pacific Basin Funds may invest in EDRs and GDRs.

ASSET-BACKED SECURITIES -- Asset-backed securities are secured by non-mortgage
assets such as company receivables, truck and auto loans, leases and credit card
receivables. Such securities are generally issued as pass-through certificates,
which represent undivided fractional ownership interests in the underlying pools
of assets. Such securities also may be debt instruments, which are also known
as collateralized obligations and are generally issued as the debt of a special
purpose entity, such as a trust, organized solely for the purpose of owning such
assets and issuing such debt.

Asset-backed securities are not issued or guaranteed by the United States
Government or its agencies or instrumentalities; however, the payment of
principal and interest on such obligations may be guaranteed up to certain
amounts and for a certain period by a letter of credit issued by a financial
institution (such as a bank or insurance company) unaffiliated with the issuers
of such securities. The purchase of asset-backed securities raises risk
considerations peculiar to the financing instruments underlying such securities.
For example, there is a risk that another party could acquire an interest in the
obligations superior to that of the holders of the asset-backed securities.
There also is the possibility that recoveries on repossessed collateral may not,
in some cases, be available to support payments on those securities. Asset-
backed securities entail prepayment risk, which may vary depending on the type
of asset, but is generally less than the prepayment risk associated with
mortgage-backed securities. In addition, credit card receivables are unsecured
obligations of the card holder.

The market for asset-backed securities is at a relatively early stage of
development. Accordingly, there may be limited secondary market for such
securities. The Core Fixed Income and High Yield Bond Funds may invest in
asset-backed securities.

BANKERS' ACCEPTANCES -- Bankers' acceptances are bills of exchange or time
drafts drawn on and accepted by a commercial bank. Bankers' acceptances are
issued by corporations to finance the shipment and storage of goods. Maturities
are generally six months or less. All Funds may invest in bankers' acceptances.

CERTIFICATES OF DEPOSIT -- Certificates of deposit are interest bearing
instruments with a specific maturity. They are issued by banks and savings and
loan institutions in exchange for the deposit of funds and normally can be
traded in the secondary market prior to maturity. Certificates of deposit with
penalties for early withdrawal will be considered illiquid. All Funds may
invest in certificates of deposit.

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<PAGE>

COMMERCIAL PAPER -- Commercial paper is a term used to described unsecured
short-term promissory notes issued by banks, municipalities, corporations and
other entities. Maturities on these issues vary from a few to 270 days. All
Funds may invest in commercial paper.

CONVERTIBLE SECURITIES -- Convertible securities are corporate securities that
are exchangeable for a set number of another security at a prestated price.
Convertible securities typically have characteristics similar to both fixed
income and equity securities. Because of the conversion feature, the market
value of a convertible security tends to move with the market value of the
underlying stock. The value of a convertible security is also affected by
prevailing interest rates, the credit quality of the issuer, and any call
provisions. All Funds except the Prime Money Market Fund may invest in
convertible securities.

DEMAND INSTRUMENTS -- Certain instruments may entail a demand feature which
permits the holder to demand payment of the principal amount of the instrument.
Demand instruments include variable rate demand notes. The Prime Money Market
Fund may invest in demand instruments.

EQUITY SECURITIES -- Equity securities represent ownership interests in a
company or corporation and consist of common stock, preferred stock, warrants
and rights to subscribe to common stock and in general, any security that is
convertible into or exchangeable for common stock. Investments in common stocks
are subject to market risks which may cause their prices to fluctuate over time.
The value of convertible securities is also affected by prevailing interest
rates, the credit quality of the issuer and any call provisions. Changes in the
value of fund securities will not necessarily affect cash income derived from
these securities but will affect a Fund's net asset value.

Investments in the equity securities of small capitalization companies involves
greater risk than is customarily associated with larger, more established
companies due to the greater business risks of small size, limited markets and
financial resources, narrow product lines and the frequent lack of depth of
management. The securities of small companies are often traded over-the-counter
and may not be traded in volumes typical on a national securities exchange.
Consequently, the securities of smaller companies may have limited market
stability and may be subject to more abrupt or erratic market movements than
securities of larger, more established growth companies or the market averages
in general. All Funds except the Core Fixed Income, International Fixed Income
and Prime Money Market Funds may invest in equity securities.

FIXED INCOME SECURITIES -- Fixed income securities are debt obligations issued
by corporations, municipalities and other borrowers. The market value of fixed
income investments will generally change in response to interest rate changes
and other factors. During periods of falling interest rates, the values of
outstanding fixed income securities generally rise. Conversely, during periods
of rising interest rates, the values of such securities generally decline.
Moreover, while securities with longer maturities tend to produce higher yields,
the prices of longer maturity securities are also subject to greater market
fluctuations as a result of changes in interest rates. Changes by recognized
agencies in the rating of any fixed income security and in the ability of an
issuer to make payments of interest and principal will also affect the value of
these investments. Changes in the value of portfolio securities will not affect
cash income derived from these securities but will affect a Fund's net asset
value. All Funds may invest in fixed income securities.

FORWARD FOREIGN CURRENCY CONTRACTS -- A forward contract involves an obligation
to purchase or sell a specific currency amount at a future date, agreed upon by
the parties, at a price set

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<PAGE>

at the time of the contract. A Fund may also enter into a contract to sell, for
a fixed amount of U.S. dollars or other appropriate currency, the amount of
foreign currency approximating the value of some or all of the Fund's securities
denominated in such foreign currency.

At the maturity of a forward contract, the Fund may either sell a fund security
and make delivery of the foreign currency, or it may retain the security and
terminate its contractual obligation to deliver the foreign currency by
purchasing an "offsetting" contract with the same currency trader, obligating it
to purchase, on the same maturity date, the same amount of the foreign currency.
The Fund may realize a gain or loss from currency transactions. The High Yield
Bond, International Fixed Income, Emerging Markets Equity, Core International
Equity, European Equity, Pacific Basin Equity and Prime Money Market Funds may
invest in forward foreign currency contracts.

FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS -- Futures contracts provide
for the future sale by one party and purchase by another party of a specified
amount of a specific security at a specified future time and at a specified
price. An option on a futures contract gives the purchaser the right, in
exchange for a premium, to assume a position in a futures contract at a
specified exercise price during the term of the option. A Fund may use futures
contracts and related options for bona fide hedging purposes, to offset changes
---- ----
in the value of securities held or expected to be acquired or be disposed of, to
minimize fluctuations in foreign currencies, or to gain exposure to a particular
market or instrument. A Fund will minimize the risk that it will be unable to
close out a futures contract by only entering into futures contracts which are
traded on national futures exchanges.

Stock index futures are futures contracts for various stock indices that are
traded on registered securities exchanges. A stock index futures contract
obligates the seller to deliver (and the purchaser to take) an amount of cash
equal to a specific dollar amount times the difference between the value of a
specific stock index at the close of the last trading day of the contract and
the price at which the agreement is made.

There are risks associated with these activities, including the following: (1)
the success of a hedging strategy may depend on an ability to predict movements
in the prices of individual securities, fluctuations in markets and movements in
interest rates, (2) there may be an imperfect or no correlation between the
changes in market value of the securities held by the Fund and the prices of
futures and options on futures, (3) there may not be a liquid secondary market
for a futures contract or option, (4) trading restrictions or limitations may be
imposed by an exchange, and (5) government regulations may restrict trading in
futures contracts and futures options.

A Fund may enter into futures contracts and options on futures contracts traded
on an exchange regulated by the Commodities Futures Trading Commission ("CFTC"),
as long as, to the extent that such transactions are not for "bona fide hedging
purposes," the aggregate initial margin and premiums on such positions
(excluding the amount by which such options are in the money) do not exceed 5%
of a Fund's net assets. A Fund may buy and sell futures contracts and related
options to manage its exposure to changing interest rates and securities prices.
Some strategies reduce a Fund's exposure to price fluctuations, while others
tend to increase its market exposure. Futures and options on futures can be
volatile instruments and involve certain risks that could negatively impact a
Fund's return.

The Large Cap Growth, Small Cap Value, Core Fixed Income, High Yield Bond,
International Fixed Income, Emerging Markets Equity, Core International Equity,
European Equity and Pacific Basin Funds may invest in futures contracts and
options on futures contracts.

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ILLIQUID SECURITIES -- Illiquid securities are securities that cannot be
disposed of within seven business days at approximately the price at which they
are being carried on the Fund's books. An illiquid security includes a demand
instrument with a demand notice period exceeding seven days, where there is no
secondary market for such security, and repurchase agreements with durations
over 7 days in length. The High Yield Bond, International Fixed Income, Emerging
Markets Equity, Core International Equity, European Equity, Pacific Basin and
Prime Money Market Funds may invest in illiquid securities.

INVESTMENT COMPANIES -- Each Fund may invest in shares of other investment
companies. Because of restrictions on direct investment by U.S. entities in
certain countries, investment in other investment companies may be the most
practical or only manner in which an international and global fund can invest in
the securities markets of those countries. A Fund does not intend to invest in
other investment companies unless, in the judgment of its Money Managers, the
potential benefits of such investments exceed the associated costs relative to
the benefits and costs associated with direct investments in the underlying
securities.

Investments in closed-end investment companies may involve the payment of
substantial premiums above the net asset value of such issuers' fund securities,
and are subject to limitations under the 1940 Act. As a shareholder in an
investment company, a Fund would bear its ratable share of that investment
company's expenses, including its advisory and administration fees.

[MONEY MARKET SECURITIES -- Money market securities are high-quality, short-term
debt instruments. They consist of: (i) bankers' acceptances, certificates of
deposits, notes and time deposits of highly-rated U.S. and foreign banks; (ii)
U.S. Treasury obligations and obligations issued or guaranteed by the agencies
and instrumentalities of the U.S. Government; (iii) high-quality commercial
paper issued by U.S. and foreign corporations; (iv) debt obligations with a
maturity of one year or less issued by corporations with outstanding high-
quality commercial paper; (v) repurchase agreements involving any of the
foregoing obligations entered into with highly-rated banks and broker-dealers;
and (vi) foreign government obligations. All Funds may invest in money market
securities. In addition, the International Funds may invest in non-dollar
denominated money market securities.]

MORTGAGE-BACKED SECURITIES -- Mortgage-backed securities are instruments that
entitle the holder to a share of all interest and principal payments from
mortgages underlying the security. The mortgages backing these securities
include conventional thirty-year fixed-rate mortgages, graduated payment
mortgages and adjustable rate mortgages. During periods of declining interest
rates, prepayment of mortgages underlying mortgage-backed securities can be
expected to accelerate. Prepayment of mortgages which underlie securities
purchased at a premium often results in capital losses, while prepayment of
mortgages purchased at a discount often results in capital gains. Because of
these unpredictable prepayment characteristics, it is often not possible to
predict accurately the average life or realized yield of a particular issue.

Government Pass-Through Securities: These are securities that are issued or
- - ----------------------------------
guaranteed by a U.S. Government agency representing an interest in a pool of
mortgage loans. The primary issuers or guarantors of these mortgage-backed
securities are GNMA, FNMA and FHLMC. FNMA and FHLMC obligations are not backed
by the full faith and credit of the U.S. Government as GNMA certificates are,
but FNMA and FHLMC securities are supported by the instrumentalities' right to
borrow from the U.S. Treasury. GNMA, FNMA and FHLMC each guarantees timely
distributions of interest to certificate holders. GNMA and FNMA also each
guarantees timely distributions of scheduled

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principal. FHLMC has in the past guaranteed only the ultimate collection of
principal of the underlying mortgage loan; however, FHLMC now issues mortgage-
backed securities (FHLMC Gold PCs) which also guarantee timely payment of
monthly principal reductions. Government and private guarantees do not extend to
the securities' value, which is likely to vary inversely with fluctuations in
interest rates.

Private Pass-Through Securities: These are mortgage-backed securities issued by
- - -------------------------------
a non-governmental entity, such as a trust. These securities include
collateralized mortgage obligations ("CMOs") and real estate mortgage investment
conduits ("REMICs") that are rated in one of the top two rating categories.
While they are generally structured with one or more types of credit
enhancement, private pass-through securities typically lack a guarantee by an
entity having the credit status of a governmental agency or instrumentality.

Collateralized Mortgage Obligations ("CMOs"): CMOs are debt obligations or
- - --------------------------------------------
multiclass pass-through certificates issued by agencies or instrumentalities of
the U.S. Government or by private originators or investors in mortgage loans.
In a CMO, series of bonds or certificates are usually issued in multiple
classes. Principal and interest paid on the underlying mortgage assets may be
allocated among the several classes of a series of a CMO in a variety of ways.
Each class of a CMO, often referred to as a "tranche," is issued with a specific
fixed or floating coupon rate and has a stated maturity or final distribution
date. Principal payments on the underlying mortgage assets may cause CMOs to be
retired substantially earlier then their stated maturities or final distribution
dates, resulting in a loss of all or part of any premium paid.

REMICs: A REMIC is a CMO that qualifies for special tax treatment under the
- - ------
Code and invests in certain mortgages principally secured by interests in real
property. Investors may purchase beneficial interests in REMICs, which are
known as "regular" interests, or "residual" interests. Guaranteed REMIC pass-
through certificates ("REMIC Certificates") issued by FNMA or FHLMC represent
beneficial ownership interests in a REMIC trust consisting principally of
mortgage loans or FNMA, FHLMC or GNMA-guaranteed mortgage pass-through
certificates. For FHLMC REMIC Certificates, FHLMC guarantees the timely payment
of interest, and also guarantees the payment of principal as payments are
required to be made on the underlying mortgage participation certificates. FNMA
REMIC Certificates are issued and guaranteed as to timely distribution of
principal and interest by FNMA.

Parallel Pay Securities; PAC Bonds: Parallel pay CMOs and REMICS are structured
- - ----------------------------------
to provide payments of principal on each payment date to more than one class.
These simultaneous payments are taken into account in calculating the stated
maturity date or final distribution date of each class, which must be retired by
its stated maturity date or final distribution date, but may be retired earlier.
Planned Amortization Class CMOs ("PAC Bonds") generally require payments of a
specified amount of principal on each payment date. PAC Bonds are always
parallel pay CMOs with the required principal payment on such securities having
the highest priority after interest has been paid to all classes.

REITs: REITs are trusts that invest primarily in commercial real estate or real
- - -----
estate-related loans. The value of interests in REITs may be affected by the
value of the property owned or the quality of the mortgages held by the trust.

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<PAGE>

Stripped Mortgage-Backed Securities ("SMBs"): SMBs are usually structured with
- - --------------------------------------------
two classes that receive specified proportions of the monthly interest and
principal payments from a pool of mortgage securities. One class may receive
all of the interest payments and is thus termed an interest-only class ("IO"),
while the other class may receive all of the principal payments and is thus
termed the principal-only class ("PO"). The value of IOs tends to increase as
rates rise and decrease as rates fall; the opposite is true of POs. SMBs are
extremely sensitive to changes in interest rates because of the impact thereon
of prepayment of principal on the underlying mortgage securities can experience
wide swings in value in response to changes in interest rates and associated
mortgage prepayment rates. During times when interest rates are experiencing
fluctuations, such securities can be difficult to price on a consistent basis.
The market for SMBs is not as fully developed as other markets; SMBs therefore
may be illiquid.

Risk Factors: Due to the possibility of prepayments of the underlying mortgage
- - ------------
instruments, mortgage-backed securities generally do not have a known maturity.
In the absence of a known maturity, market participants generally refer to an
estimated average life. An average life estimate is a function of an assumption
regarding anticipated prepayment patterns, based upon current interest rates,
current conditions in the relevant housing markets and other factors. The
assumption is necessarily subjective, and thus different market participants can
produce different average life estimates with regard to the same security.
There can be no assurance that estimated average life will be a security's
actual average life. The Core Fixed Income, High Yield Bond and Prime Money
Market Funds may invest in mortgaged-backed securities.

MORTGAGE DOLLAR ROLLS -- Mortgage "dollar rolls" are transactions in which
mortgage-backed securities are sold for delivery in the current month and the
seller simultaneously contracts to repurchase substantially similar securities
on a specified future date. Any difference between the sale price and the
purchase price is netted against the interest income foregone on the securities
sold to arrive at an implied borrowing rate. Alternatively, the sale and
purchase transactions can be executed at the same price, with the Fund being
paid a fee as consideration for entering into the commitment to purchase.
Mortgage dollar rolls may be renewed prior to cash settlement and initially may
involve only a firm commitment agreement by the Fund to buy a security. If the
broker-dealer to whom the Fund sells the security becomes insolvent, the Fund's
right to repurchase the security may be restricted. Other risks involved in
entering into mortgage dollar rolls include the risk that the value of the
security may change adversely over the term of the mortgage dollar roll and that
the security the Fund is required to repurchase may be worth less than the
security that the Fund originally held.

To avoid any leveraging concerns, the Fund will place U.S. Government or other
liquid, high grade assets in a segregated account in an amount sufficient to
cover its repurchase obligation. The Core Fixed Income Fund may invest in
mortgage dollar rolls.

OBLIGATIONS OF SUPRANATIONAL ENTITIES -- Supranational entities are entities
established through the joint participation of several governments and include
the Asian Development Bank, the Inter-American Development Bank, International
Bank for Reconstruction and Development (World Bank), African Development Bank,
European Economic Community, European Investment Bank and the Nordic Investment
Bank. The Core Fixed Income, International Fixed Income, Emerging Markets
Equity, Core International Equity, European Equity and Pacific Basin Funds may
invest in obligations of supranational entities.

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<PAGE>

OPTIONS -- A put option gives the purchaser of the option the right to sell,
and the writer of the option the obligation to buy, the underlying security at
any time during the option period. A call option gives the purchaser of the
option the right to buy, and the writer of the option the obligation to sell,
the underlying security at any time during the option period. The premium paid
to the writer is the consideration for undertaking the obligations under the
option contract. The initial purchase (sale) of an option contract is an
"opening transaction." In order to close out an option position, a Fund may
enter into a "closing transaction," which is simply the sale (purchase) of an
option contract on the same security with the same exercise price and expiration
date as the option contract originally opened.

A Fund may purchase put and call options to protect against a decline in the
market value of the securities in its portfolio or to anticipate an increase in
the market value of securities that the Fund may seek to purchase in the future.
A Fund purchasing put and call options pays a premium therefor. If price
movements in the underlying securities are such that exercise of the options
would not be profitable for the Fund, loss of the premium paid may be offset by
an increase in the value of the Fund's securities or by a decrease in the cost
of acquisition of securities by the Fund.

A Fund may write covered call options as a means of increasing the yield on its
fund and as a means of providing limited protection against decreases in its
market value. When a Fund sells an option, if the underlying securities do not
increase or decrease to a price level that would make the exercise of the option
profitable to the holder thereof, the option generally will expire without being
exercised and the Fund will realize as profit the premium received for such
option. When a call option of which a Fund is the writer is exercised, the Fund
will be required to sell the underlying securities to the option holder at the
strike price, and will not participate in any increase in the price of such
securities above the strike price. When a put option of which a Fund is the
writer is exercised, the Fund will be required to purchase the underlying
securities at the strike price, which may be in excess of the market value of
such securities.

A Fund may purchase and write options on an exchange or over-the-counter. Over-
the-counter options ("OTC options") differ from exchange-traded options in
several respects. They are transacted directly with dealers and not with a
clearing corporation, and therefore entail the risk of non-performance by the
dealer. OTC options are available for a greater variety of securities and for a
wider range of expiration dates and exercise prices than are available for
exchange-traded options. Because OTC options are not traded on an exchange,
pricing is done normally by reference to information from a market maker. It is
the position of the SEC that OTC options are generally illiquid.

A Fund may purchase and write put and call options on foreign currencies (traded
on U.S. and foreign exchanges or over-the-counter markets) to manage its
exposure to exchange rates. Call options on foreign currency written by a Fund
will be "covered," which means that the Fund will own an equal amount of the
underlying foreign currency. With respect to put options on foreign currency
written by a Fund, the Fund will establish a segregated account with its
custodian bank consisting of cash or liquid, high grade debt securities in an
amount equal to the amount the Fund would be required to pay upon exercise of
the put.

A Fund may purchase and write put and call options on indices and enter into
related closing transactions. Put and call options on indices are similar to
options on securities except that options on an index give the holder the right
to receive, upon exercise of the option, an amount of cash if the closing level
of the underlying index is greater than (or less than, in the case of puts) the
exercise

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<PAGE>

price of the option. This amount of cash is equal to the difference between the
closing price of the index and the exercise price of the option, expressed in
dollars multiplied by a specified number. Thus, unlike options on individual
securities, all settlements are in cash, and gain or loss depends on price
movements in the particular market represented by the index generally, rather
than the price movements in individual securities. A Fund may choose to
terminate an option position by entering into a closing transaction. The ability
of a Fund to enter into closing transactions depends upon the existence of a
liquid secondary market for such transactions.

The Fund may engage in writing covered call options. Under a call option, the
purchaser has the right to purchase and the writer (the Fund) the obligation to
sell the underlying security at the exercise price during the option period.
Options purchased by the Fund will be listed on a national securities exchange.
In order to close out an option position, the Fund may enter into a "closing
purchase transaction," which involves the purchase of an option on the same
security at the same exercise price and expiration date. If the Fund is unable
to effect a closing purchase transaction with respect to an option it has
written, it will not be able to sell the underlying security until the option
expires or the Fund delivers the security upon exercise. Permissible options
include options on stock indices.

Even where used only for hedging purposes, options involve risks, including the
following: (i) the success of any hedging strategy utilizing options will depend
on an ability to predict movements in the prices of individual securities and
interest rates, (ii) there may be an imperfect correlation between the movement
in prices of securities held by a Fund and the price of options, (iii) there may
not be a liquid secondary market for options, and (iv) while a Fund will receive
a premium when it writes covered call options, it may not participate fully in
any rise in the market value of the underlying security.

All options written on indices must be covered. When a Fund writes an option on
an index, it will establish a segregated account containing cash or liquid high
grade debt securities with its Custodian in an amount at least equal to the
market value of the option and will maintain the account while the option is
open or will otherwise cover the transaction.

Risk Factors. Risks associated with options transactions include: (1) the
- - ------------
success of a hedging strategy may depend on an ability to predict movements in
the prices of individual securities, fluctuations in markets and movements in
interest rates; (2) there may be an imperfect correlation between the movement
in prices of options and the securities underlying them; (3) there may not be a
liquid secondary market for options; and (4) while a Fund will receive a premium
when it writes covered call options, it may not participate fully in a rise in
the market value of the underlying security. All Funds except the Prime Money
Market Fund may invest in options.

PRIVATIZATIONS -- The Emerging Markets Equity Fund may invest in privatizations.
Privatizations are foreign government programs for selling all or part of the
interests in government owned or controlled enterprises. The ability of a U.S.
entity such as the Emerging Markets Equity Fund to participate in privatizations
in certain foreign countries may be limited by local law, or the terms on which
the Fund may be permitted to participate may be less advantageous than those
applicable for local investors. There can be no assurance that foreign
governments will continue to sell their interests in companies currently owned
or controlled by them or that privatization programs will be successful.

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<PAGE>

PAY-IN-KIND BONDS -- Investments of a Fund in fixed income securities may
include pay-in-kind bonds. These are securities which pay interest in either
cash or additional securities, at the issuer's option, for a specified period.
Pay-in-kind bonds, like zero coupon bonds, are designed to give an issuer
flexibility in managing cash flow. Pay-in-kind bonds are expected to reflect
the market value of the underlying debt plus an amount representing accrued
interest since the last payment. Pay-in-kind bonds are usually less volatile
than zero coupon bonds, but more volatile than cash pay securities. Large Cap
Value, Large Cap Growth, Small Cap Value, Small Cap Growth, Core Fixed Income
and High Yield Bond Funds may invest in pay-in-kind bonds.

RECEIPTS -- Receipts are sold as zero coupon securities which means that they
are sold at a substantial discount and redeemed at face value at their maturity
date without interim cash payments of interest or principal. This discount is
accreted over the life of the security, and such accretion will constitute the
income earned on the security for both accounting and tax purposes. Because of
these features, such securities may be subject to greater interest rate
volatility than interest paying fixed income securities. See also "Taxes." The
Large Cap Value, Large Cap Growth, Small Cap Value, Small Cap Growth, Core Fixed
Income and High Yield Bond Funds may invest in receipts.

RESTRAINTS ON INVESTMENTS BY MONEY MARKET FUNDS -- Investments by the Prime
Money Market Fund are subject to limitations imposed under regulations adopted
by the SEC. These regulations generally require money market funds to acquire
only U.S. dollar denominated obligations maturing in 397 days or less and to
maintain a dollar-weighted average fund maturity of 90 days or less. In
addition, under these regulations money market funds may acquire only
obligations that present minimal credit risks and that are "eligible
securities," which means they are rated, at the time of investment, by at least
two nationally recognized security rating organizations (one if it is the only
organization rating such obligation) in the highest short-term rating category
(within which there may be sub-categories or gradations indicating relative
standing) or, if unrated, determined to be of comparable quality (a "first tier
security"). A security is not considered to be unrated if its issuer has
outstanding obligations of comparable priority and security that have a short-
term rating. The Fund's Money Manager will determine that an obligation presents
minimal credit risks or that unrated instruments are of comparable quality in
accordance with guidelines established by the Trustees. The Trustees must ratify
or approve the purchase of obligations by the Fund that are unrated or rated by
only one rating organization. The Fund may hold up to 25% of its assets in the
first tier securities of a single issuer for three Business Days; otherwise, the
Fund must be 100% diversified (i.e., it may hold only 5% of its total assets in
such securities of one issuer).

REPURCHASE AGREEMENTS -- arrangements by which a Fund obtains a security and
simultaneously commits to return the security to the seller at an agreed upon
price (including principal and interest) on an agreed upon date within a number
of days from the date of purchase. A Custodian or its agent will hold the
security as collateral for the repurchase agreement. Collateral must be
maintained at a value at least equal to 102% of the purchase price. A Fund
bears a risk of loss in the event the other party defaults on its obligations
and the Fund is delayed or prevented from its right to dispose of the collateral
securities or if the Fund realizes a loss on the sale of the collateral
securities. A Fund's Money Managers will enter into repurchase agreements on
behalf of the Fund only with financial institutions deemed to present minimal
risk of bankruptcy during the term of the agreement based on guidelines
established and periodically reviewed by the Trustees. Repurchase agreements
are considered loans under the 1940 Act. All Funds may invest in repurchase
agreements.

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SECURITIES LENDING -- In order to generate additional income, a Fund may lend
securities that it owns pursuant to agreements requiring that the loan be
continuously secured by collateral consisting of cash, securities of the U.S.
Government or its agencies equal to at least 100% of the market value of the
securities lent. A Fund continues to receive interest on the securities lent
while simultaneously earning interest on the investment of cash collateral.
Collateral is marked to market daily. There may be risks of delay in recovery
of the securities or even loss of rights in the collateral should the borrower
of the securities fail financially or become insolvent. All Funds may invest in
securities lending.

SECURITIES OF FOREIGN ISSUERS -- There are certain risks connected with
investing in foreign securities. These include risks of adverse political and
economic developments (including possible governmental seizure or
nationalization of assets), the possible imposition of exchange controls or
other governmental restrictions, less uniformity in accounting and reporting
requirements, the possibility that there will be less information on such
securities and their issuers available to the public, the difficulty of
obtaining or enforcing court judgments abroad, restrictions on foreign
investments in other jurisdictions, difficulties in effecting repatriation of
capital invested abroad and difficulties in transaction settlements and the
effect of delay on shareholder equity. Foreign securities may be subject to
foreign taxes, and may be less marketable than comparable U.S. securities. The
value of a Fund's investments denominated in foreign currencies will depend on
the relative strengths of those currencies and the U.S. dollars, and a Fund may
be affected favorably or unfavorably by changes in the exchange rates or
exchange control regulations between foreign currencies and the U.S. dollar.
Changes in foreign currency exchange rates also may affect the value of
dividends and interest earned, gains and losses realized on the sale of
securities and net investment income and gains if any, to be distributed to
shareholders by a Fund. Furthermore, emerging market countries may have less
stable political environments than more developed countries. Also it may be
more difficult to obtain a judgment in a court outside the United States. The
Large Cap Value, Large Cap Growth, High Yield Bond, International Fixed Income,
Emerging Markets Equity, Core International Equity, European Equity and Pacific
Basin Funds may invest in securities of foreign issuers.

SHORT SALES -- The International Fixed Income Fund may sell securities short,
which involves selling securities the Fund does not own (but has borrowed) in
anticipation of a decline in the market price of such securities. When the Fund
makes a short sale, the proceeds it receives from the sale are retained by a
broker until the Fund replaces the borrowed securities. To deliver the
securities to the buyer, the Fund must arrange through a broker to borrow the
securities and, in so doing, the Fund becomes obligated to replace the
securities borrowed at their market price at the time of replacement, whatever
that price may be. The Fund may have to pay a premium to borrow the securities
and must pay any dividends or interest payable on the securities until they are
replaced. The Fund's obligation to replace the securities borrowed in
connection with a short sale will be secured by collateral that consists of
cash, U.S. Government securities or other liquid, high grade debt securities.

The Fund may maintain "short" positions in forward currency exchange
transactions, which would involve the Fund's agreeing to exchange currency that
it does not own at the time of such agreement for another currency at a future
date and specified price in anticipation of a decline in the value of the
currency sold short relative to the currency that the Fund has contracted to
receive in the exchange. To ensure that any short position of the Fund is not
used to achieve leverage with respect to the Fund's investments, the Fund will
establish with its Custodian a segregated account consisting of cash, U.S.
Government securities or other liquid, high grade debt securities equal to the
fluctuating market

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<PAGE>

value of the securities or currency as to which any short position is being
maintained. The segregated account will be adjusted at least daily to reflect
changes in the market value of the short position.

The International Fixed Income Fund may sell securities "short against the box."
A short sale is "against the box" if at all times during which the short
position is open, the Fund owns at least an equal amount of the securities or
securities convertible into, or exchangeable without further consideration for,
securities of the same issue as the securities that are sold short.

The dollar amount of short sales at any one time shall not exceed 25% of the net
equity of the Fund, and the value of the securities of any one issuer in which
the Fund is short may not exceed the lesser of 2.0% of the value of the Fund's
net assets or 2.0% of the securities of any class of any issuer. Short sales
may be made only in securities that are fully listed on a national securities
exchange. This provision does not include short sales against the box.

SWAPS, CAPS, FLOORS AND COLLARS -- Interest rate swaps, mortgage swaps, currency
swaps and other types of swap agreements such as caps, floors and collars are
designed to permit the purchaser to preserve a return or spread on a particular
investment or portion of its portfolio, and to protect against any increase in
the price of securities a Fund anticipates purchasing at a later date. In a
typical interest rate swap, one party agrees to make regular payments equal to a
floating interest rate times a "notional principal amount," in return for
payments equal to a fixed rate times the same amount, for a specific period of
time. If a swap agreement provides for payment in different currencies, the
parties might agree to exchange the notional principal amount as well. Swaps
may also depend on other prices or rates, such as the value of an index or
mortgage prepayment rates.

In a typical cap or floor agreement, one party agrees to make payments only
under specified circumstances, usually in return for payment of a fee by the
other party. For example, the buyer of an interest rate cap obtains the right
to receive payments to the extent that a specific interest rate exceeds an
agreed-upon level, while the seller of an interest rate floor is obligated to
make payments to the extent that a specified interest rate falls below an
agreed-upon level. An interest rate collar combines elements of buying a cap
and selling a floor.

Swap agreements are sophisticated hedging instruments that typically involve a
small investment of cash relative to the magnitude of risk assumed. As a
result, swaps can be highly volatile and have a considerable impact on a Fund's
performance. Swap agreements are subject to risks related to the counterparty's
ability to perform, and may decline in value if the counterparty's
creditworthiness deteriorates. A Fund may also suffer losses if it is unable to
terminate outstanding swap agreements or reduce its exposure through offsetting
transactions. Any obligation a Fund may have under these types of arrangements
will be covered by setting aside liquid high grade securities in a segregated
account. A Fund will enter into swaps only with counterparties believed to be
creditworthy. The International Fixed Income Fund may invest in swaps, caps,
floors and collars.

TIME DEPOSITS -- Time deposits are non-negotiable receipts issued by a bank in
exchange for the deposit of funds. Like a certificate of deposit, it earns a
specified rate of interest over a definite period of time; however, it cannot be
traded in the secondary market. Time deposits are considered to be illiquid
securities. The International Fixed Income, Emerging Markets Equity, Core
International Equity, European Equity, Pacific Basin Equity and Prime Money
Market Funds may invest in time deposits.

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U.S. GOVERNMENT AGENCIES -- Obligations issued or guaranteed by agencies of the
U.S. Government, including, among others, the Federal Farm Credit Bank, the
Federal Housing Administration and the Small Business Administration, and
obligations issued or guaranteed by instrumentalities of the U.S. Government,
including, among others, the Federal Home Loan Mortgage Corporation, the Federal
Land Banks and the U.S. Postal Service. Some of these securities are supported
by the full faith and credit of the U.S. Treasury (e.g., Government National
Mortgage Association), others are supported by the right of the issuer to borrow
from the Treasury (e.g., Federal Farm Credit Bank), while still others are
supported only by the credit of the instrumentality (e.g., Federal National
Mortgage Association). Guarantees of principal by agencies or instrumentalities
of the U.S. Government may be a guarantee of payment at the maturity of the
obligation so that in the event of a default prior to maturity there might not
be a market and thus no means of realizing on the obligation prior to maturity.
Guarantees as to the timely payment of principal and interest do not extend to
the value or yield of these securities nor to the value of a Fund's shares. All
Funds may invest in obligations issued or guaranteed by U.S. Government
agencies.

U.S. TREASURY OBLIGATIONS -- U.S. Treasury obligations consist of bills, notes
and bonds issued by the U.S. Treasury and separately traded interest and
principal component parts of such obligations that are transferable through the
Federal book-entry Principal Securities ("STRIPS"). All the Funds may invest in
U.S. Treasury Obligations.

U.S. TREASURY RECEIPTS -- U. S. Treasury receipts are interests in separately
traded interest and principal component parts of U.S. Treasury obligations that
are issued by banks or brokerage firms and are created by depositing U.S.
Treasury notes and obligations into a special account at a custodian bank. The
custodian holds the interest and principal payments for the benefit of the
registered owners of the certificates of receipts. The custodian arranges for
the issuance of the certificates or receipts evidencing ownership and maintains
the register. Receipts include "Treasury Receipts" ("TRs"), "Treasury
Investment Growth Receipts" ("TIGRs"), "Liquid Yield Option Notes" ("LYONs") and
"Certificates of Accrual on Treasury Securities" ("CATS"). TIGRs and CATS are
interests in private proprietary accounts while TRs and STRIPS are interest in
accounts sponsored by the U.S. Treasury. All Funds may invest in U.S. Treasury
receipts.

VARIABLE AND FLOATING RATE INSTRUMENTS -- Certain obligations may carry variable
or floating rates of interest, and may involve a conditional or unconditional
demand feature. Such instruments bear interest at rates that are not fixed, but
which vary with changes in specified market rates or indices. The interest
rates on these securities may be reset daily, weekly, quarterly or some other
reset period, and may have a floor or ceiling on interest rate changes. There
is a risk that the current interest rate on such obligations may not accurately
reflect existing market interest rates. A demand instrument with a demand
notice exceeding seven days may be considered illiquid if there is no secondary
market for such security. All Funds may invest in variable and floating rate
instruments.

WARRANTS -- Warrants are instruments giving holders the right, but not the
obligation, to buy equity or fixed income securities of a company at a given
price during a specified period. All Funds except the Prime Money Market Fund
may invest in warrants.

WHEN-ISSUED AND DELAYED DELIVERY SECURITIES -- When-issued or delayed delivery
basis transactions involve the purchase of an instrument with payment and
delivery taking place in the future. Delivery of and payment for these
securities may occur a month or more after the date of the purchase commitment.
A Fund will maintain with its Custodian a separate account with liquid high

-41-
<PAGE>

grade debt securities or cash in an amount at least equal to these commitments.
The interest rate realized on these securities is fixed as of the purchase date
and no interest accrues to a Fund before settlement. These securities are
subject to market fluctuation due to changes in market interest rates and it is
possible that the market value at the time of settlement could be higher or
lower than the purchase price if the general level of interest rates has
changed. Although a Fund generally purchases securities on a when-issued or
forward commitment basis with the intention of actually acquiring securities, a
Fund may dispose of a when-issued security or forward commitment prior to
settlement if it deems appropriate. All Funds may invest in when-issued and
delayed delivery securities.

YANKEE OBLIGATIONS -- Yankee obligations ("Yankees") are U.S. dollar-denominated
instruments of foreign issuers who either register with the SEC or issue under
Rule 144A under the Securities Act of 1933, as amended. These obligations
consist of debt securities (including preferred or preference stock of non-
governmental issuers), certificates of deposit, fixed time deposits and bankers'
acceptances issued by foreign banks, and debt obligations of foreign governments
or their subdivisions, agencies and instrumentalities, international agencies
and supranational entities. Some securities issued by foreign governments or
their subdivisions, agencies and instrumentalities may not be backed by the full
faith and credit of the foreign government.

Investing in the securities of issuers based in any foreign country involves
special risks and considerations not typically associated with investing in U.S.
companies. These include risks resulting from differences in accounting,
auditing and financial reporting standards, lower liquidity than U.S. fixed
income or debt securities, the possibility of nationalization, expropriation or
confiscatory taxation; adverse changes in investment or exchange control
regulations and political instability. There may be less publicly available
information concerning foreign issuers of securities held by the Fund than is
available concerning U.S. issuers. Purchases and sales of foreign securities
and dividends and interest payable on those securities may be subject to foreign
taxes and taxes may be withheld from dividend and interest payments on those
securities. Foreign securities often trade with less frequency and volume than
domestic securities and therefore may exhibit greater price volatility and a
greater risk of liquidity.

The Yankee obligations selected for a Fund will adhere to the same quality
standards as those utilized for the selection of domestic debt obligations. The
Core Fixed Income Fund may invest in Yankee obligations.

ZERO COUPON, PAY-IN-KIND AND DEFERRED PAYMENT SECURITIES -- Zero coupon
securities are securities that are sold at a discount to par value and
securities on which interest payments are not made during the life of the
security. Upon maturity, the holder is entitled to receive the par value of the
security. While interest payments are not made on such securities, holders of
such securities are deemed to have received "phantom income" annually. Because
a Fund will distribute its "phantom income" to shareholders, to the extent that
shareholders elect to receive dividends in cash rather than reinvesting such
dividends in additional shares, the Fund will have fewer assets with which to
purchase income producing securities. Alternatively, shareholders may have to
redeem shares to pay tax on this "phantom income." In either case, a Fund may
have to dispose of its fund securities under disadvantageous circumstances to
generate cash, or may have to leverage itself by borrowing cash to satisfy
distribution requirements. A Fund accrues income with respect to the securities
prior to the receipt of cash payments. Pay-in-kind securities are securities
that have interest payable by delivery of additional securities. Upon maturity,
the holder is entitled to receive the aggregate par value of the securities.
Deferred payment securities are securities that remain zero coupon securities

-42-
<PAGE>

until a predetermined date, at which time the stated coupon rate becomes
effective and interest becomes payable at regular intervals. Zero coupon,
pay-in-kind and deferred payment securities may be subject to greater
fluctuation in value and lesser liquidity in the event of adverse market
conditions than comparably rated securities paying cash interest at regular
interest payment periods. The Large Cap Value, Large Cap Growth, Small Cap
Value, Small Cap Growth, Core Fixed Income and High Yield Bond Funds may invest
in zero coupon, pay-in-kind and deferred payment securities.

Additional information on permitted investments and risk factors can be found in
the Statement of Additional Information.

-43-
<PAGE>

APPENDIX

DESCRIPTION OF CORPORATE BOND RATINGS

DESCRIPTION OF MOODY'S LONG-TERM RATINGS

Aaa Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edged". Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.

Aa Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high-grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risk appear somewhat larger than the Aaa securities.

A Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper-medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment some time in the future.

Baa Bonds which are rated Baa are considered as medium-grade obligations (i.e.,
they are neither highly protected nor poorly secured). Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.

Ba Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well-assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.

B Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.

Caa Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.

Ca Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked
shortcomings.

C Bonds which are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.

A-1

<PAGE>

Moody's bond ratings, where specified, are applied to senior bank obligations
and insurance company senior policyholder and claims obligations with an
original maturity in excess of one year. Obligations relying upon support
mechanisms such as letters-of-credit and bonds of indemnity are excluded unless
explicitly rated.

Obligations of a branch of a bank are considered to be domiciled in the country
in which the branch is located. Unless noted as an exception, Moody's rating on
a bank's ability to repay senior obligations extends only to branches located in
countries which carry a Moody's sovereign rating. Such branch obligations are
rated at the lower of the bank's rating or Moody's sovereign rating for the bank
deposits for the country in which the branch is located.

When the currency in which an obligation is denominated is not the same as the
currency of the country in which the obligation is domiciled, Moody's ratings do
not incorporate an opinion as to whether payment of the obligation will be
affected by the actions of the government controlling the currency of
denomination. In addition, risk associated with bilateral conflicts between an
investor's home country and either the issuer's home country or the country
where an issuer branch is located are not incorporated into Moody's ratings.

Moody's makes no representation that rated bank obligations or insurance company
obligations are exempt from registration under the U.S. Securities Act of 1933
or issued in conformity with any other applicable law or regulation. Nor does
Moody's represent that any specific bank or insurance company obligation is
legally enforceable or is a valid senior obligation of a rated issuer.

Moody's ratings are opinions, not recommendations to buy or sell, and their
accuracy is not guaranteed. A rating should be weighed solely as one factor in
an investment decision and you should make your own study and evaluation of any
issuer whose securities or debt obligations you consider buying or selling.

Note: Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.

DESCRIPTION OF STANDARD & POOR'S LONG-TERM RATINGS

INVESTMENT GRADE

AAA Debt rated 'AAA' has the highest rating assigned by S&P. Capacity to pay
interest and repay principal is extremely strong.

AA Debt rated 'AA' has a very strong capacity to pay interest and repay
principal and differs from the highest rated debt only in small degree.

A Debt rated 'A' has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to adverse effects of changes in
circumstances and economic conditions than debt in higher-rated categories.

A-2

<PAGE>

BBB Debt rated 'BBB' is regarded as having an adequate capacity to pay interest
and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal
for debt in this category than in higher rated categories.

SPECULATIVE GRADE

Debt rated 'BB', 'B', 'CCC', 'CC', and 'C' is regarded as having predominantly
speculative characteristics with respect to capacity to pay interest and repay
principal. 'BB' indicates the least degree of speculation and 'C' the highest
degree of speculation. While such debt will likely have some quality and
protective characteristics, these are outweighed by large uncertainties or major
risk exposures to adverse conditions.

BB Debt rated 'BB' has less near-term vulnerability to default than other
speculative grade debt. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions that could
lead to inadequate capacity to meet timely interest and principal payments.
The 'BB' rating category is also used for debt subordinated to senior debt
that is assigned an actual or implied 'BBB-' rating.

B Debt rate 'B' has greater vulnerability to default but presently has the
capacity to meet interest payments and principal repayments. Adverse
business, financial, or economic conditions would likely impair capacity or
willingness to pay interest and repay principal. The 'B' rating category
also is used for debt subordinated to senior debt that is assigned an actual
or implied 'BB' or 'BB-' rating.

CCC Debt rated 'CCC' has a current identifiable vulnerability to default, and is
dependent on favorable business, financial, and economic conditions to meet
timely payment of interest and repayment of principal. In the event of
adverse business, financial, or economic conditions, it is not likely to
have the capacity to pay interest and repay principal. The 'CCC' rating
category also is used for debt subordinated to senior debt that is assigned
an actual or implied 'B' or 'B-' rating.

CC The rating 'CC' is typically applied to debt subordinated to senior debt
which is assigned an actual or implied 'CCC' rating.

C The rating 'C' is typically applied to debt subordinated to senior debt
which is assigned an actual or implied 'CCC-' debt rating. The 'C' rating
may be used to cover a situation where a bankruptcy petition has been filed,
but debt service payments are continued.

CI Debt rated 'CI' is reserved for income bonds on which no interest is being
paid.

D Debt is rated 'D' when the issue is in payment default, or the obligor has
filed for bankruptcy. The 'D' rating is used when interest or principal
payments are not made on the date due, even if the applicable grace period
has not expired, unless S&P believes that such payments will be made during
such grace period.

Plus (+) or minus (-): The ratings from 'AA' to 'CCC' may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.

A-3

<PAGE>

DESCRIPTION OF DUFF & PHELPS' LONG-TERM DEBT RATINGS

AAA Highest credit quality. The risk factors are negligible, being only
slightly more than for risk-free U.S. Treasury debt.

AA+ High credit quality. Protection factors are strong. Risk is modest but may
AA- vary slightly from time to time because of economic conditions.

A+ Protection factors are average but adequate. However, risk factors are
A- more variable and greater in periods of economic stress.

BBB+ Below average protection factors but still considered sufficient for
BBB- prudent investment. Considerable variability in risk during economic
cycles.

BB+ Below investment grade but deemed likely to meet obligations when due.
BB Present or prospective financial protection factors fluctuate according to
BB- industry conditions or company fortunes. Overall quality may move up or
down frequently within this category.

B+ Below investment grade and possessing risk that obligations will not be met
B when due. Financial protection factors will fluctuate widely according to
B- economic cycles, industry conditions and/or company fortunes. Potential
exists for frequent changes in the rating within this category or into a
higher or lower rating grade.

CCC Well below investment grade securities. Considerable uncertainty exists as
to timely payment of principal, interest or preferred dividends. Protection
factors are narrow and risk can be substantial with unfavorable
economic/industry conditions, and/or with unfavorable company developments.

DD Defaulted debt obligations. Issuer failed to meet scheduled principal
and/or interest payments.

DP Preferred stock with dividend arrearages.

DESCRIPTION OF FITCH'S LONG-TERM RATINGS

INVESTMENT GRADE BOND

AAA Bonds considered to be investment grade and of the highest credit quality.
The obligor has an exceptionally strong ability to pay interest and repay
principal, which is unlikely to be affected by reasonably foreseeable
events.

AA Bonds considered to be investment grade and of very high credit quality.
The obligor's ability to pay interest and repay principal is very strong,
although not quite as strong as bonds rated 'AAA'. Because bonds rated in
the 'AAA' and 'AA' categories are not significantly vulnerable to
foreseeable future developments, short-term debt of these issuers is
generally rated 'F-1+'.

A-4

<PAGE>

A Bonds considered to be investment grade and of high credit quality. The
obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic
conditions and circumstances than bonds with higher ratings.

BBB Bonds considered to be investment grade and of satisfactory credit quality.
The obligor's ability to pay interest and repay principal is considered to
be adequate. Adverse changes in economic conditions and circumstances,
however, are more likely to have adverse impact on these bonds, and
therefore impair timely payment. The likelihood that the ratings of these
bonds will fall below investment grade is higher than for bonds with higher
ratings.

SPECULATIVE GRADE BOND

BB Bonds are considered speculative. The obligor's ability to pay interest
and repay principal may be affected over time by adverse economic changes.
However, business and financial alternatives can be identified which could
assist the obligor in satisfying its debt service requirements.

B Bonds are considered highly speculative. While bonds in this class are
currently meeting debt service requirements, the probability of continued
timely payment of principal and interest reflects the obligor's limited
margin of safety and the need for reasonable business and economic activity
throughout the life of the issue.

CCC Bonds have certain identifiable characteristics which, if not remedied, may
lead to default. The ability to meet obligations requires an advantageous
business and economic environment.

CC Bonds are minimally protected. Default in payment of interest and/or
principal seems probable over time.

C Bonds are in imminent default in payment of interest or principal.

DDD, DD, AND D Bonds are in default on interest and/or principal payments.
Such bonds are extremely speculative and should be valued on
the basis of their ultimate recovery value in liquidation or
reorganization of the obligor. 'DDD' represents the lowest
potential for recovery on these bonds, and 'D' represents
the lowest potential for recovery.

PLUS (+) MINUS (-) Plus and minus signs are used with a rating symbol to
indicate the relative position of a credit within the rating
category. Plus and minus signs, however, are not used in the
'AAA', 'DDD', 'DD', or 'D' categories.

DESCRIPTION OF IBCA'S LONG-TERM RATINGS

AAA Obligations for which there is the lowest expectation of investment risk.
Capacity for timely repayment of principal and interest is substantial,
such that adverse changes in business, economic or financial conditions are
unlikely to increase investment risk substantially.

A-5

<PAGE>

AA Obligations for which there is a very low expectation of investment risk.
Capacity for timely repayment of principal and interest is substantial.
Adverse changes in business, economic or financial conditions may increase
investment risk, albeit not very significantly.

A Obligations for which there is a low expectation of investment risk.
Capacity for timely repayment of principal and interest is strong, although
adverse changes in business, economic or financial conditions may lead to
increased investment risk.

BBB Obligations for which there is currently a low expectation of investment
risk. Capacity for timely repayment of principal and interest is adequate,
although adverse changes in business, economic or financial conditions are
more likely to lead to increased investment risk than for obligations in
other categories.

BB Obligations for which there is a possibility of investment risk developing.
Capacity for timely repayment of principal and interest exists, but is
susceptible over time to adverse changes in business, economic or financial
conditions.

B Obligations for which investment risk exists. Timely repayment of principal
and interest is not sufficiently protected against adverse changes in
business, economic or financial conditions.

CCC Obligations for which there is a current perceived possibility of default.
Timely repayment of principal and interest is dependent on favorable
business, economic or financial conditions.

CC Obligations which are highly speculative or which have a high risk of
default.

C Obligations which are currently in default.

Notes:"+" or "-" may be appended to a rating to denote relative status within
major rating categories.

Ratings of BB and below are assigned where it is considered that
speculative characteristics are present.

DESCRIPTION OF THOMSON BANKWATCH'S LONG-TERM DEBT RATINGS

INVESTMENT GRADE

AAA The highest category; indicates that the ability to repay principal and
interest on a timely basis is very high.

AA The second-highest category; indicates a superior ability to repay
principal and interest on a timely basis, with limited incremental risk
compared to issues rated in the highest category.

A The third-highest category; indicates the ability to repay principal and
interest is strong. Issues rated "A" could be more vulnerable to adverse
developments (both internal and external) than obligations with higher
ratings.

A-6

<PAGE>

BBB The lowest investment-grade category; indicates an acceptable capacity to
repay principal and interest. Issues rated "BBB" are, however, more
vulnerable to adverse developments (both internal and external) than
obligations with higher ratings.

Non-Investment Grade
(Issues regarded as having speculative characteristics in the likelihood of
timely repayment of principal and interest.)

BB While not investment grade, the "BB" rating suggests that the likelihood of
default is considerably less than for lower-rated issues. However, there
are significant uncertainties that could affect the ability to adequately
service debt obligations.

B Issues rated "B" show a higher degree of uncertainty and therefore greater
likelihood of default than higher-rated issues. Adverse developments could
well negatively affect the payment of interest and principal on a timely
basis.

CCC Issues rated "CCC" clearly have a high likelihood of default, with little
capacity to address further adverse changes in financial circumstances.

CC "CC" is applied to issues that are subordinate to other obligations rated
"CCC" and are afforded less protection in the event of bankruptcy or
reorganization.

D Default

Ratings in the Long-Term Debt categories may include a plus (+) or minus (-)
designation, which indicates where within the respective category the issue is
placed.

A-7
<PAGE>

SEI INSTITUTIONAL INVESTMENTS TRUST

MANAGER AND SHAREHOLDER SERVICING AGENT:
SEI FINANCIAL MANAGEMENT CORPORATION

DISTRIBUTOR:
SEI FINANCIAL SERVICES COMPANY

MONEY MANAGERS:
1838 INVESTMENT ADVISORS, L.P.
ACADIAN ASSET MANAGEMENT, INC.
ALLIANCE CAPITAL MANAGEMENT, L.P.
CS FIRST BOSTON INVESTMENT MANAGEMENT CORPORATION
IDS ADVISORY GROUP, INC.
LSV ASSET MANAGEMENT
MELLON EQUITY ASSOCIATES
MERUS CAPITAL MANAGEMENT
MONTGOMERY ASSET MANAGEMENT, L.P.
MORGAN GRENFELL INVESTMENT SERVICES LIMITED
PILGRIM BAXTER & ASSOCIATES, LTD.
SCHRODER CAPITAL MANAGEMENT INTERNATIONAL LIMITED
STRATEGIC FIXED INCOME L.P.
SEI FINANCIAL MANAGEMENT CORPORATION
WELLINGTON MANAGEMENT COMPANY
WESTERN ASSET MANAGEMENT
WORLDINVEST LIMITED

This STATEMENT OF ADDITIONAL INFORMATION is not a Prospectus. It is intended to
provide additional information regarding the activities and operations of the
SEI Institutional Investments Trust (the "Trust") and should be read in
conjunction with the Trust's Prospectus dated ______ __, 1995. A Prospectus may
be obtained through SEI Financial Services Company, 680 East Swedesford Road,
Wayne, Pennsylvania 19087.

TABLE OF CONTENTS

<TABLE>
<S> <C>
The Trust................................................................... S-2
Description of Permitted Investments........................................ S-2
Description of Ratings......................................................S-10
Investment Limitations......................................................S-13
The Money Managers..........................................................S-15
The Manager and Shareholder Servicing Agent.................................S-15
Distribution................................................................S-16
Trustees and Officers of the Trust..........................................S-16
Performance.................................................................S-17
Purchase and Redemption of Shares...........................................S-18
Taxes.......................................................................S-19
Fund Transactions...........................................................S-21
Description of Shares.......................................................S-22
Limitation of Trustees' Liability...........................................S-22
Voting......................................................................S-22
Shareholder Liability.......................................................S-22
</TABLE>

________ __, 1995

SEI-_-___-___
<PAGE>

THE TRUST

SEI Institutional Investments Trust (the "Trust") is an open-end management
investment company established under Massachusetts law as a Massachusetts
business trust under a Declaration of Trust dated March 1, 1995 which has
diversified and non-diversified funds. The Declaration of Trust permits the
Trust to offer separate series ("funds") of units of beneficial interest
("shares") and different classes of shares. Each share of each fund represents
an equal proportionate interest in that fund with each other share of that fund.

This Statement of Additional Information relates to the following funds: Large
Cap Value, Large Cap Growth, Small Cap Value, Small Cap Growth, Core Fixed
Income, High Yield Bond, International Fixed Income, Emerging Markets Equity,
Core International Equity, European Equity, Pacific Basin and Prime Money Market
Funds (each a "Fund," and collectively, the "Funds").

DESCRIPTION OF PERMITTED INVESTMENTS

ALL FUNDS MAY INVEST IN THE FOLLOWING INVESTMENTS AND INVESTMENT PRACTICES
UNLESS SPECIFICALLY NOTED OTHERWISE.

ASSET-BACKED SECURITIES--the Core Fixed Income and High Yield Bond Funds may
invest in securities backed by automobile receivables and credit-card
receivables and other securities backed by other types of receivables or other
assets. Credit support for asset-backed securities may be based on the
underlying assets and/or provided through credit enhancements by a third party.
Credit enhancement techniques include letters of credit, insurance bonds,
limited guarantees (which are generally provided by the issuer), senior-
subordinated structures and overcollateralization.

BANKERS' ACCEPTANCES--a bill of exchange or time draft drawn on and accepted by
a commercial bank. It is used by corporations to finance the shipment and
storage of goods and to furnish dollar exchange. Maturities are generally six
months or less.

CERTIFICATES OF DEPOSIT--a negotiable interest bearing instrument with a
specific maturity. Certificates of deposit are issued by banks and savings and
loan institutions in exchange for the deposit of funds and normally can be
traded in the secondary market, prior to maturity. Certificates of deposit have
penalties for early withdrawal.

COMMERCIAL PAPER--the term used to designate unsecured short-term promissory
notes issued by corporations and other entities. Maturities on these issues
vary from a few days to nine months. (See "Description of Ratings").

CONVERTIBLE SECURITIES--convertible securities have characteristics similar to
both fixed income and equity securities. Because of the conversion feature, the
market value of convertible securities tends to move together with the market
value of the underlying stock. As a result, a Fund's selection of convertible
securities is based, to a great extent, on the potential for capital
appreciation that may exist in the underlying stock. The value of convertible
securities is also affected by prevailing interest rates, the credit quality of
the issuer and any call provisions. All Funds except the Prime Money Market
Fund may invest in convertible securities.

CORPORATE ZERO COUPON SECURITIES--corporate zero coupon securities are: (i)
notes or debentures which do not pay current interest and are issued at
substantial discounts from par value, or (ii) notes or debentures that pay no
current interest until a stated dated one or more years into the future, after
which the issuer is obligated to pay interest until maturity, usually at a
higher rate than if interest were

S-2
<PAGE>

payable from the date of issuance and may also make interest payments in kind
(e.g., with identical zero coupon securities). Such corporate zero coupon
securities, in addition to the risks identified above, are subject to the risk
of the issuer's failure to pay interest and repay principal in accordance with
the terms of the obligation. A Fund must accrete the discount or interest on
high-yield bonds structured as zero coupon securities as income even though it
does not receive a corresponding cash interest payment until the security's
maturity or payment date. The Large Cap Value, Large Cap Growth, Small Cap
Value, Small Cap Growth, Core Fixed Income and High Yield Bond Funds may invest
in corporate zero coupon securities.

DOLLAR ROLLS--in order to seek a high level of current income, the Core Fixed
Income and Prime Money Market Funds may enter into dollar rolls or "covered
rolls" in which a Fund sell securities (usually mortgage-backed securities) and
simultaneously contracts to repurchase, typically in 30 or 60 days,
substantially similar, but not identical, securities on a specified future date.
During the roll period, a Fund forgoes principal and interest paid on such
securities. A Fund is compensated by the difference between the current sales
price and the forward price for the future purchase (often referred to as the
"drop") as well as by the interest earned on the cash proceeds of the initial
sale. A "covered roll" is a specific type of dollar roll for which there is an
offsetting cash position or cash equivalent securities position that matures on
or before the forward settlement date of the dollar roll transaction. As used
herein the term "dollar roll" refers to dollar rolls that are not "covered
rolls." At the end of the roll commitment period, a Fund may or may not take
delivery of the securities it has contracted to purchase.

FOREIGN SECURITIES--the Large Cap Value, Large Cap Growth, High Yield Bond,
International Fixed Income, Emerging Markets Equity, Core International Equity,
European Equity and Pacific Basin Equity Funds may invest in U.S. dollar
denominated obligations or securities of foreign issuers. The Prime Money
Market Fund may invest in U.S. dollar denominated obligations of foreign
issuers. Permissible investments may consist of obligations of foreign branches
of U.S. banks and foreign banks, including European Certificates of Deposit,
European Time Deposits, Canadian Time Deposits and Yankee Certificates of
Deposit and investments in Canadian Commercial Paper, foreign securities and
Europaper. In addition, a Fund may invest in American Depositary Receipts
("ADRs") traded on registered exchanges or NASDAQ. While a Fund expects to
invest primarily in sponsored ADRs, a joint arrangement between the issuer and
the depositary, some ADRs may be unsponsored. Unlike sponsored ADRs, the
holders of unsponsored ADRs bear all expenses and the depositary may not be
obligated to distribute shareholder communications or to pass through the voting
rights on the deposited securities. These instruments may subject a Fund to
investment risks that differ in some respects from those related to investments
in obligations of U.S. domestic issuers. Such risks include future adverse
political and economic developments, the possible imposition of withholding
taxes on interest or other income, possible seizure, nationalization, or
expropriation of foreign deposits, the possible establishment of exchange
controls or taxation at the source, greater fluctuations in value due to changes
in the exchange rates, or the adoption of other foreign governmental
restrictions which might adversely affect the payment of principal and interest
on such obligations. Such investments may also entail higher custodial fees and
sales commissions than domestic investments. Foreign issuers of securities or
obligations are often subject to accounting treatment and engage in business
practices different from those respecting domestic issuers of similar securities
or obligations. Foreign branches of U.S. banks and foreign banks may be subject
to less stringent reserve requirements than those applicable to domestic
branches of U.S. banks.

FORWARD FOREIGN CURRENCY CONTRACTS--involve an obligation to purchase or sell a
specified currency at a future date at a price set at the time of the contract.
Forward currency contracts do not eliminate fluctuations in the values of fund
securities but rather allow a Fund to establish a rate of exchange for a future
point in time.

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<PAGE>

When entering into a contract for the purchase or sale of a security in a
foreign currency, a Fund may enter into a foreign forward currency contract for
the amount of the purchase or sale price to protect against variations, between
the date the security is purchased or sold and the date on which payment is made
or received, in the value of the foreign currency relative to the United States
Dollar or other foreign currency.

Also, when the Money Manager anticipates that a particular foreign currency may
decline substantially relative to the United States dollar or other leading
currencies, in order to reduce risk, a Fund may enter into a forward contract to
sell, for a fixed amount, the amount of foreign currency approximating the value
of its securities denominated in such foreign currency. With respect to any
such forward foreign currency contract, it generally will not be possible to
match precisely the amount covered by that contract and the value of the
securities involved due to changes in the values of such securities resulting
from market movements between the date the forward contract is entered into and
the date it matures. In addition, while forward currency contracts may offer
protection from losses resulting from declines in value of a particular foreign
currency, they also limit potential gains which might result from increases in
the value of such currency. A Fund will also incur costs in connection with
forward foreign currency contracts and conversions of foreign currencies into
United States dollars. The High Yield Bond, International Fixed Income,
Emerging Markets Equity, Core International Equity, European Equity, Pacific
Basin Equity and Prime Money Market Funds may enter into forward foreign
currency contracts.

Investment company shares that are purchased by a Fund shall be limited to
shares of money market open-end investment companies and the Fund's Money
Manager will waive its fee on that portion of the assets placed in such money
market open-end investment companies.

GNMA SECURITIES--securities issued by the Government National Mortgage
Association ("GNMA"), a wholly-owned U.S. Government corporation, are guaranteed
by GNMA as to the timely payment of principal and interest. However, any
premiums paid to purchase these instruments are not subject to GNMA guarantees.
The market value and interest yield of these instruments can vary due to market
interest rate fluctuations and early prepayments of underlying mortgages. These
securities represent ownership in a pool of federally insured mortgage loans.
GNMA certificates consist of underlying mortgages with a maximum maturity of 30
years. However, due to scheduled and unscheduled principal payments, GNMA
certificates have a shorter average maturity and, therefore, less principal
volatility than a comparable 30-year bond. Since prepayment rates vary widely,
it is not possible to accurately predict the average maturity of a particular
GNMA pool. The scheduled monthly interest and principal payments relating to
mortgages in the pool will be "passed through" to investors. GNMA securities
differ from conventional bonds in that principal is paid back to the certificate
holders over the life of the loan rather than at maturity. As a result, the
Fund will receive monthly scheduled payments of principal and interest. In
addition, the Fund may receive unscheduled principal payments representing
prepayments on the underlying mortgages. Any prepayments will be reinvested at
the then prevailing interest rate.

Although GNMA certificates may offer yields higher than those available from
other types of U.S. Government securities, GNMA certificates may be less
effective than other types of securities as a means of "locking in" attractive
long-term rates because of the prepayment feature.

LOWER RATED SECURITIES--The High Yield Bond and Emerging Markets Equity Funds
will invest in lower-rated bonds commonly referred to as "junk bonds" or high
yield/high risk securities. These securities are rated "Baa" or "BBB" or lower
by an NRSRO. Each Fund may invest in securities rated as low as "C" by Moody's
or "D" by S&P. These ratings indicate that the obligations are speculative and
may be in default. In addition, each Fund may invest in unrated securities
subject to the restrictions stated in the Prospectus.

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<PAGE>

CERTAIN RISK FACTORS RELATING TO HIGH-YIELD, HIGH-RISK SECURITIES. The
descriptions below are intended to supplement the discussion in the Prospectus
under "General Investment Policies and Risk Factors - Risk Factors Relating to
Investing in Lower Rated Securities."

GROWTH OF HIGH YIELD BOND, HIGH-RISK BOND MARKET. The widespread expansion of
government, consumer and corporate debt within the U.S. economy has made the
corporate sector more vulnerable to economic downturns or increased interest
rates. Further, an economic downturn could severely disrupt the market for
lower rated bonds and adversely affect the value of outstanding bonds and the
ability of the issuers to repay principal and interest.

SENSITIVITY TO INTEREST RATE AND ECONOMIC CHANGES. Lower rated bonds are very
sensitive to adverse economic changes and corporate developments. During an
economic down turn or substantial period of rising interest rates, highly
leveraged issuers may experience financial stress that would adversely affect
their ability to service their principal and interest payment obligations, to
meet projected business goals, and to obtain additional financing. If the
issuer of a bond defaulted on its obligations to pay interest or principal or
entered into bankruptcy proceedings, a Fund may incur losses or expenses in
seeking recovery of amounts owed to it. In addition, periods of economic
uncertainty and change can be expected to result in increased volatility of
market prices of high-yield, high-risk bonds and a Fund's net asset value.

PAYMENT EXPECTATIONS. High-yield, high-risk bonds may contain redemption or
call provisions. If an issuer exercised these provisions in a declining
interest rate market, a Fund would have to replace the security with a lower
yielding security, resulting in a decreased return for investors. Conversely, a
high-yield, high-risk bond's value will decrease in a rising interest rate
market, as will the value of a Fund's assets. If a Fund experiences significant
unexpected net redemptions, this may force it to sell high-yield, high-risk
bonds without regard to their investment merits, thereby decreasing the asset
base upon which expenses can be spread and possibly reducing the Fund's rate of
return.

LIQUIDITY AND VALUATION. There may be little trading in the secondary market
for particular bonds, which may affect adversely a Fund's ability to value
accurately or dispose of such bonds. Adverse publicity and investor perception,
whether or not based on fundamental analysis, may decrease the vales and
liquidity of high-yield, high-risk bonds, especially in a thin market.

LEGISLATION. Federal laws require the divestiture by federally insured savings
and loan associations of their investments in lower rated bonds and limit the
deductibility of interest by certain corporate issuers of high yield bonds.
These laws could adversely affect a Fund's net asset value and investment
practices, the secondary market for high yield securities, the financial
condition of issuers of these securities and the value of outstanding high yield
securities.

TAXES. A Fund may purchase debt securities (such as zero-coupon or pay-in-kind
securities) that contain original issue discount. Original issue discount that
accretes in a taxable year is treated as earned by a Fund and therefore is
subject to the distribution requirements of the Internal Revenue Code of 1986,
as amended (the "Code"). Because the original issue discount earned by a Fund
in a taxable year may not be represented by cash income, the Fund may have to
dispose of other securities and use the proceeds to make distributions to
shareholders.

MORTGAGE-BACKED SECURITIES--the Core Fixed Income, High Yield Bond and Prime
Money Market Funds may, consistent with their respective investment objective
and policies, invest in mortgage-backed securities issued or guaranteed by the
U.S. Government or its agencies or instrumentalities. The High Yield Bond Fund
may also purchase mortgage-backed securities issued by non-governmental entities
as set forth in the Prospectus.

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<PAGE>

Mortgage-backed securities in which the Funds may invest in represent pools of
mortgage loans assembled for sale to investors by various governmental agencies
such as the GNMA and government-related organizations such as the Federal
National Mortgage Association ("FNMA") and the Federal Home Loan Mortgage
Corporation ("FHLMC"). In addition, the High Yield Bond may invest in pools of
mortgage loans from nongovernmental issuers such as commercial banks, savings
and loan institutions, mortgage bankers, and private mortgage insurance
companies. Although certain mortgage-backed securities are guaranteed by a
third party or otherwise similarly secured, the market value of the security,
which may fluctuate, is not so secured. If a Fund purchases a mortgage-backed
security at a premium, that portion may be lost if there is a decline in the
market value of the security whether resulting from changes in interest rates or
prepayments in the underlying mortgage collateral. As with other interest-
bearing securities, the prices of such securities are inversely affected by
changes in interest rates. However, though the value of a mortgage-backed
security may decline when interest rates rise, the converse is not necessarily
true since in periods of declining interest rates the mortgages underlying the
securities are prone to prepayment. For this and other reasons, a mortgage-
backed security's stated maturity may be shortened by unscheduled prepayments on
the underlying mortgages and, therefore, it is not possible to predict
accurately the security's return to a Fund. In addition, regular payments
received in respect of mortgage-backed securities include both interest and
principal. No assurance can be given as to the return a Fund will receive when
these amounts are reinvested.

A Fund may also invest in mortgage-backed securities that are collateralized
mortgage obligations structured on pools of mortgage pass-through certificates
or mortgage loans.

There are a number of important differences among the agencies and
instrumentalities of the U.S. Government that issue mortgage-backed securities
and among the securities that they issue. Mortgage-backed securities issued by
GNMA include GNMA Mortgage Pass-Through Certificates (also known as "Ginnie
Maes") which are guaranteed as to the timely payment of principal and interest
by GNMA and is backed by the full faith and credit of the United States. GNMA
certificates also are supported by the authority of GNMA to borrow funds from
the U.S. Treasury to make payments under its guarantee. Mortgage-backed
securities issued by FNMA include FNMA Guaranteed Mortgage Pass-Through
Certificates (also known as "Fannie Maes") which are solely the obligations of
the FNMA and are not backed by or entitled to the full faith and credit of the
United States. FNMA is a government-sponsored organization owned entirely by
private stockholders. Fannie Maes are guaranteed as to timely payment of the
principal and interest by FNMA. Mortgage-backed securities issued by FHLMC
include FHLMC Mortgage Participation Certificates (also known as "Freddie Macs"
or "PC's"). FHLMC is a corporate instrumentality of the United States, created
pursuant to an Act of Congress, which is owned entirely by Federal Home Loan
Banks. Freddie Macs are not guaranteed by the United States or by any Federal
Home Loan Banks and do not constitute a debt or obligation of the United States
or of any Federal Home Loan Bank. Freddie Macs entitle the holder to timely
payment of interest, which is guaranteed by FHLMC. FHLMC guarantees either
ultimate collection or timely payment of all principal payments on the
underlying mortgage loans. When FHLMC does not guarantee timely payment of
principal, FHLMC may remit the amount due on account of its guarantee of
ultimate payment of principal at any time after default on an underlying
mortgage, but in no event later than one year after it becomes payable.

OBLIGATIONS OF SUPRANATIONAL AGENCIES--may be purchased by the Core Fixed
Income, International Fixed Income, Emerging Markets Equity, Core International
Equity, European Equity and Pacific Basin Funds. Currently, each Fund intends
to invest only in obligations issued or guaranteed by the Asian Development
Bank, Inter-American Development Bank, European Coal and Steel Community,
European Economic Community, European Investment Bank and the Nordic Investment
Bank.

PUT TRANSACTIONS--All of the Funds except the Prime Money Market Fund may
purchase securities at a price which would result in a yield to maturity lower
than generally offered by the seller at the time of purchase when a Fund can
simultaneously acquire the right to sell the securities back to the seller, the
issuer

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<PAGE>

or a third party (the "writer") at an agreed-upon price at any time during a
stated period or on a certain date. Such a right is generally denoted as a
"standby commitment" or a "put." The purpose of engaging in transactions
involving puts is to maintain flexibility and liquidity to permit a Fund to meet
redemptions and remain as fully invested as possible in municipal securities. A
Fund reserves the right to engage in put transactions. The right to put the
securities depends on the writer's ability to pay for the securities at the time
the put is exercised. A Fund would limit its put transactions to institutions
which the Fund's Money Managers believe present minimum credit risks, and the
Fund's Money Managers would use their best efforts to initially determine and
continue to monitor the financial strength of the sellers of the options by
evaluating their financial statements and such other information as is available
in the marketplace. It may, however, be difficult to monitor the financial
strength of the writers because adequate current financial information may not
be available. In the event that any writer is unable to honor a put for
financial reasons, a Fund would be a general creditor (i.e. on a parity with all
other unsecured creditors) of the writer. Furthermore, particular provisions of
the contract between a Fund and the writer may excuse the writer from
repurchasing the securities; for example, a change in the published rating of
the underlying municipal securities or any similar event that has an adverse
effect on the issuer's credit or a provision in the contract that the put will
not be exercised except in certain special cases, for example, to maintain fund
liquidity. A Fund could, however, at any time sell the underlying fund security
in the open market or wait until the fund security matures, at which time it
should realize the full par value of the security.

The securities purchased subject to a put may be sold to third persons at any
time, even though the put is outstanding, but the put itself, unless it is an
integral part of the security as originally issued, may not be marketable or
otherwise assignable. Therefore, the put would have value only to that
particular Fund. Sale of the securities to third parties or lapse of time with
the put unexercised may terminate the right to put the securities. Prior to the
expiration of any put option, a Fund could seek to negotiate terms for the
extension of such an option. If such a renewal cannot be negotiated on terms
satisfactory to the Fund, the Fund could, of course, sell the fund security.
The maturity of the underlying security will generally be different from that of
the put. There will be no limit to the percentage of fund securities that a
Fund may purchase subject to a put but the amount paid directly or indirectly
for puts which are not integral parts of the security as originally issued will
not exceed 1/2 of 1% of the value of the total assets of such Fund calculated
immediately after any such put is acquired. For the purpose of determining the
"maturity" of securities purchased subject to an option to put, and for the
purpose of determining the dollar-weighted average maturity of a Fund including
such securities, the Trust will consider "maturity" to be the first date on
which it has the right to demand payment from the writer of the put although the
final maturity of the security is later than such date.

RECEIPTS--interests in separately traded interest and principal component parts
of U.S. Government obligations that are issued by banks or brokerage firms and
are created by depositing U.S. Government obligations into a special account at
a custodian bank. The custodian holds the interest and principal payments for
the benefit of the registered owners of the certificates or receipts. The
custodian arranges for the issuance of the certificates or receipts evidencing
ownership and maintains the register. Receipts include "Treasury Receipts"
("TRs"), "Treasury Investment Growth Receipts" ("TIGRs"), and "Certificates of
Accrual on Treasury Securities" ("CATS"). TIGRs and CATS are interests in
private proprietary accounts while TRs and STRIPS (See "U.S. Treasury
Obligations") are interests in accounts sponsored by the U.S. Treasury.
Receipts are sold as zero coupon securities; for more information, see "Zero
Coupon Securities." The Large Cap Value, Large Cap Growth, Core Fixed Income,
Small Cap Value, Small Cap Growth and High Yield Bond Funds may invest in
receipts.

REPURCHASE AGREEMENTS--agreements under which securities are acquired from a
securities dealer or bank subject to resale on an agreed upon date and at an
agreed upon price which includes principal and interest. A Fund involved bears a
risk of loss in the event that the other party to a repurchase agreement
defaults on its obligations and the Fund is delayed or prevented from exercising
its rights to dispose of the

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<PAGE>

collateral securities. A Fund's Money Managers enter into repurchase agreements
only with financial institutions that they deem to present minimal risk of
bankruptcy during the term of the agreement, based on guidelines that are
periodically reviewed by the Board of Trustees. These guidelines currently
permit each Fund to enter into repurchase agreements only with approved banks
and primary securities dealers, as recognized by the Federal Reserve Bank of New
York, which have minimum net capital of $100 million, or with a member bank of
the Federal Reserve System. Repurchase agreements are considered to be loans
collateralized by the underlying security. Repurchase agreements entered into by
a Fund will provide that the underlying security at all times shall have a value
at least equal to 102% of the price stated in the agreement. This underlying
security will be marked to market daily. A Fund's Money Managers will monitor
compliance with this requirement. Under all repurchase agreements entered into
by a Fund, the Custodian or its agent must take possession of the underlying
collateral. However, if the seller defaults, a Fund could realize a loss on the
sale of the underlying security to the extent the proceeds of the sale are less
than the resale price. In addition, even though the Bankruptcy Code provides
protection for most repurchase agreements, if the seller should be involved in
bankruptcy or insolvency proceedings, a Fund may incur delay and costs in
selling the security and may suffer a loss of principal and interest if the Fund
is treated as an unsecured creditor.

SECURITIES LENDING--in order to generate additional income, a Fund may lend the
securities in which it is invested pursuant to agreements requiring that the
loans be continuously secured by cash, securities of the U.S. Government or its
agencies, or any combination of cash and such securities, as collateral equal to
at least the market value at all times of the securities lent. Such loans will
not be made if, as a result, the aggregate amount of all outstanding securities
loans for a Fund exceeds 20% of the value of that Fund's total assets taken at
fair market value. A Fund will continue to receive interest on the securities
lent while simultaneously earning interest on the investment of the cash
collateral in U.S. Government securities. However, a Fund will normally pay
lending fees to such broker-dealers and related expenses from the interest
earned on invested collateral. There may be risks of delay in receiving
additional collateral or risks of delay in recovery of the securities or even
loss of rights in the collateral should the borrower of the securities fail
financially. However, loans are made only to borrowers deemed by the Fund's
Money Managers to be of good standing and when, in the judgment of the Fund's
Money Managers, the consideration which can be earned currently from such
securities loans justifies the attendant risk. Any loan may be terminated by
either party upon reasonable notice to the other party. Each Fund may use the
Distributor as a broker in these transactions.

TIME DEPOSITS--a non-negotiable receipt issued by a bank in exchange for the
deposit of funds. Like a certificate of deposit, it earns a specified rate of
interest over a definite period of time; however, it cannot be traded in the
secondary market.

Time deposits with a withdrawal penalty are considered to be illiquid
securities; the Prime Money Market will not invest more than 10% of its assets
in such time deposits and other illiquid securities. The International Fixed
Income, Emerging Markets Equity, Core International Equity, European Equity,
Pacific Basin and Prime Money Market Funds may invest in time deposits.

U.S. GOVERNMENT AGENCY OBLIGATIONS--agencies of the United States Government
that issue obligations, including, among others, Export Import Bank of the
United States, Farmers Home Administration, Federal Farm Credit System, Federal
Housing Administration, Government National Mortgage Association, Maritime
Administration, Small Business Administration and The Tennessee Valley
Authority. A Fund may purchase securities issued or guaranteed by the GNMA
which represent participations in Veterans Administration and Federal Housing
Administration backed mortgage pools. Obligations of instrumentalities of the
United States Government include securities issued by, among others, Federal
Home Loan Banks, FHLMC, Federal Intermediate Credit Banks, Federal Land Banks,
FNMA and the United States Postal Service. Some of these securities are
supported by the full faith and credit of the United States Treasury (e.g.,
GNMA), others are supported by the right of the issuer to borrow from the

S-8
<PAGE>

Treasury and still others are supported only by the credit of the
instrumentality (e.g., FNMA). Guarantees of principal by agencies or
instrumentalities of the U.S. Government may be a guarantee of payment at the
maturity of the obligation so that in the event of a default prior to maturity
there might not be a market and thus no means of realizing the value of the
obligation prior to maturity. Guarantees as to the timely payment of principal
and interest do not extend to the value or yield of these securities nor to the
value of a Fund's shares.

U.S. TREASURY OBLIGATIONS--bills, notes and bonds issued by the U.S. Treasury
and separately traded interest and principal component parts of such obligations
that are transferable through the Federal book-entry system known as Separately
Traded Registered Interest and Principal Securities ("STRIPS"). No Fund may
actively trade STRIPS. STRIPS are sold as zero coupon securities; for more
information, see "Zero Coupon Securities."

VARIABLE OR FLOATING RATE INSTRUMENTS--may involve a demand feature and may
include variable amount master demand notes available through the Custodian, or
otherwise. Variable or floating rate instruments bear interest at a rate which
varies with changes in market rates. The holder of an instrument with a demand
feature may tender the instrument back to the issuer at par prior to maturity.
A variable amount master demand note is issued pursuant to a written agreement
between the issuer and the holder, its amount may be increased by the holder or
decreased by the holder or issuer, it is payable on demand, and the rate of
interest varies based upon an agreed formula. The quality of the underlying
credit must, in the opinion of the Fund's managers, be equivalent to the long-
term bond or commercial paper ratings applicable to permitted investments for
each Fund. Each Fund's Money Managers will monitor on an ongoing basis the
earning power, cash flow, and liquidity ratios of the issuers of such
instruments and will similarly monitor the ability of an issuer of a demand
instrument to pay principal and interest on demand.

In case of obligations which include a put feature at the option of the debt
holder, the date of the put may be used as an effective maturity date for the
purpose of determining weighted average fund maturity.

WHEN-ISSUED SECURITIES--involve the purchase of debt obligations on a when-
issued basis, in which case delivery and payment normally take place within 45
days after the date of commitment to purchase. A Fund will only make
commitments to purchase obligations on a when-issued basis with the intention of
actually acquiring the securities, but may sell them before the settlement date.
The when-issued securities are subject to market fluctuation, and no interest
accrues to the purchaser during this period. The payment obligation and the
interest rate that will be received on the securities are each fixed at the time
the purchaser enters into the commitment. Purchasing obligations on a when-
issued basis is a form of leveraging and can involve a risk that the yields
available in the market when the delivery takes place may actually be higher
than those obtained in the transaction itself. In that case there could be an
unrealized loss at the time of delivery. A Fund will establish a segregated
account with its Custodian and maintain liquid assets in an amount at least
equal in value to that Fund's commitments to purchase when-issued securities.
If the value of these assets declines, the Fund involved will place additional
liquid assets in the account on a daily basis so that the value of the assets in
the account is equal to the amount of such commitments.

ZERO COUPON SECURITIES--STRIPS and receipts (TRs, TIGRs and CATS) are sold as
zero coupon securities, that is, fixed income securities that have been stripped
of their unmatured interest coupons. Zero coupon securities are sold at a
(usually substantial) discount and redeemed at face value at their maturity date
without interim cash payments of interest or principal. The amount of this
discount is accreted over the life of the security, and the accretion
constitutes the income earned on the security for both accounting and tax
purposes. Because of these features, the market prices of zero coupon
securities are generally more volatile than the market prices of securities that
have similar maturity but that pay interest periodically. Zero coupon
securities are likely to respond to a greater degree to interest rate changes
than are non-zero coupon securities with similar maturity and credit qualities.
See also "Taxes." The Large Cap Value, Large Cap

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Growth, Small Cap Value, Small Cap Growth, Core Fixed Income and High Yield Bond
Funds may invest in zero coupon securities.

OTHER INVESTMENTS

The Trust is not prohibited from investing in obligations of banks that are
clients of SEI Corporation ("SEI"). However, the purchase of shares of the
Trust by them or by their customers will not be a consideration in determining
which bank obligations the Trust will purchase. The Trust will not purchase
obligations of any of the Money Managers to the Trust.

DESCRIPTION OF RATINGS

DESCRIPTION OF MOODY'S SHORT-TERM RATINGS

PRIME-1 Issuers rated Prime-1 (or supporting institutions) have a superior
ability for repayment of senior short-term debt obligations. Prime-1 repayment
ability will often be evidenced by many of the following characteristics:

- - --Leading market positions in well-established industries.
- - --High rates of return on funds employed.
- - --Conservative capitalization structure with moderate reliance on debt and ample
asset protection.
- - --Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.
- - --Well-established access to a range of financial markets and assured sources of
alternate liquidity.

PRIME-2 Issuers rated Prime-2 (or supporting institutions) have a strong
ability for repayment of senior short-term debt obligations. This will normally
be evidenced by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, may be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.

PRIME-3 Issuers rated Prime-3 (or supporting institutions) have an acceptable
ability for repayment of senior short-term obligations. The effect of industry
characteristics and market compositions may be more pronounced. Variability in
earnings and profitability may result in changes in the level of debt protection
measurements and may require relatively high financial leverage. Adequate
alternate liquidity is maintained.

NOT PRIME Issuers rated Not Prime do not fall within any of the Prime rating
categories.

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STANDARD & POOR'S SHORT-TERM RATINGS

A-1 This highest category indicates that the degree of safety regarding timely
payment is strong. Debt determined to possess extremely strong safety
characteristics is denoted with a plus sign (+) designation.

A-2 Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated 'A-1'.

A-3 Debt carrying this designation has an adequate capacity for timely
payment. It is, however, more vulnerable to the adverse effects of changes
in circumstances than obligations carrying the higher designations.

B Debt rated 'B' is regarded as having only speculative capacity for timely
payment.

C This rating is assigned to short-term debt obligations with a doubtful
capacity for payment.

D This rating indicates that the obligation is in payment default.

DESCRIPTION OF DUFF & PHELPS' SHORT-TERM RATINGS

Duff 1+ Highest certainty of timely payment. Short-term
liquidity, including internal operating factors and/or
access to alternative sources of funds, is outstanding,
and safety is just below risk-free U.S. Treasury short-
term obligations.

Duff 1 Very high certainty of timely payment. Liquidity factors
are excellent and supported by good fundamental
protection factors. Risk factors are minor.

Duff 1- High certainty of timely payment. Liquidity factors are
strong and supported by good fundamental protection
factors. Risk factors are very small.

GOOD GRADE

Duff 2 Good certainty of timely payment. Liquidity factors and
company fundamentals are sound. Although ongoing funding
needs may enlarge total financing requirements, access
to capital markets is good. Risk factors are small.

SATISFACTORY GRADE

Duff 3 Satisfactory liquidity and other protection factors
qualify issue as to investment grade. Risk factors are
larger and subject to more variation. Nevertheless,
timely payment is expected.

NON-INVESTMENT GRADE

Duff 4 Speculative investment characteristics. Liquidity is not
sufficient to insure against disruption in debt service.
Operating factors and market access may be subject to a
high degree of variation.

DEFAULT
<PAGE>

Duff 5 Issuer failed to meet scheduled principal and/or interest
payments.

DESCRIPTION OF FITCH'S SHORT-TERM RATINGS

F-1+ Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.

F-1 Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues
rated 'F-1+'

F-2 Good Credit Quality. Issues assigned this rating have a satisfactory
degree of assurance for timely payment, but the margin of safety is not
as great as for issues assigned 'F-1+' and 'F-1' ratings.

F-3 Fair Credit Quality. Issues assigned this rating have characteristics
suggesting that the degree of assurance for timely payment is adequate,
however, near-term adverse changes could cause these securities to be
rated below investment grade.

F-S Weak Credit Quality. Issues assigned this rating have characteristics
suggesting a minimal degree of assurance for timely payment and are
vulnerable to near-term adverse changes in financial and economic
conditions.

D Default. Issues assigned this rating are in actual or imminent payment
default.

LOC The symbol LOC indicates that the rating is based on a letter of credit
issued by a commercial bank.

DESCRIPTION OF IBCA'S SHORT-TERM RATINGS (UP TO 12 MONTHS)

A1+ Obligations supported by the highest capacity for timely repayment.

A1 Obligations supported by a strong capacity for timely repayment.

A2 Obligations supported by a satisfactory capacity for timely repayment,
although such capacity may be susceptible to adverse changes in business,
economic, or financial conditions.

A3 Obligations supported by an adequate capacity for timely repayment. Such
capacity is more susceptible to adverse changes in business, economic, or
financial conditions than for obligations in higher categories.

B Obligations for which the capacity for timely repayment is susceptible to
adverse changes in business, economic, or financial conditions.

C Obligations for which there is an inadequate capacity to ensure timely
repayment.

D Obligations which have a high risk of default or which are currently in
default.

DESCRIPTION OF THOMSON BANKWATCH'S SHORT-TERM RATINGS

TBW-1 The highest category; indicates a very high likelihood that principal and
interest will be paid on a timely basis.

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TBW-2 The second-highest category; while the degree of safety regarding timely
repayment of principal and interest is strong, the relative degree of
safety is not as high as for issues rated "TBW-1".

TBW-3 The lowest investment-grade category; indicates that while the obligation
is more susceptible to adverse developments (both internal and external)
than those with higher ratings, the capacity to service principal and
interest in a timely fashion is considered adequate.

TBW-4 The lowest rating category; this rating is regarded as non-investment
grade and therefore speculative.

INVESTMENT LIMITATIONS

FUNDAMENTAL POLICIES

A Fund may not:

1. Purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (except this shall not
prevent the Fund from purchasing or selling options or futures contracts
or from investing in securities or other instruments backed by physical
commodities);

2. Purchase or sell real estate, although it may purchase and sell securities
of companies that deal in real estate and may purchase and sell securities
that are secured by interests in real estate;

3. Lend any security or make any other loan, if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt instruments or repurchase
agreements;

4. With respect to 75% of each Fund's total assets, purchase more than 10% of
any class of the outstanding voting securities of any issuer;

5. Issue senior securities except as permitted under the Investment Company
Act of 1940, as amended ("1940 Act");

6. Borrow, except from banks and as a temporary measure for extraordinary or
emergency purposes, and then, in no event, in excess of 33 1/3% of its
total assets (including the amount borrowed) less liabilities (other than
borrowings), and any borrowings that come to exceed this amount will be
reduced within three days (not including Sundays and holidays) to the
extent necessary to comply with the 33 1/3% limitation; and

7. Underwrite securities issued by others, except to the extent that the Fund
may be considered an underwriter within the meaning of the Securities Act
of 1933, as amended, in the disposition of restricted securities.

NON-FUNDAMENTAL POLICIES

In addition, the following investment limitations are not fundamental policies
and may be changed without shareholder approval. No Fund will:

1. Purchase on margin or sell short, except [(i) that each Fund may from time
to time sell securities short without limitation but consistent with
applicable legal requirements, including (a) short sales against the box,
(b) short-term credits necessary for the clearance of security
transactions and (c)

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<PAGE>

margin payments in connection with futures contracts and options futures
contracts]; and (ii) [as specified above in Fundamental Restriction
No.#(1);] [each Fund may purchase options and futures contracts];

2. Purchase or retain securities of an issuer if those Officers and Directors
of the Fund or its investment adviser owning more than 1/2 of 1% of such
securities together own more than 5% of such securities;

3. Pledge, mortgage, or hypothecate any of its assets to an extent greater
than 33 1/3% of its total assets at fair market value;

4. Invest for the purpose of exercising control over management of any
company;

[5. Invest its assets in securities of any investment company, except by
purchase in the open market involving only customary brokers' commissions
or in connection with mergers, acquisitions of assets or consolidations
and except as may otherwise be permitted by the 1940 Act;] [California may
require as a fundamental limitation if no exemption]

6. Invest more than 5% of its total assets in securities of companies that
have (with predecessors) a record of less than three years' continuous
operation;

7. Purchase warrants if, by reason of such purchase, more than 5% of the
value of the Fund's net assets (taken at market value) would be invested
in warrants, valued at the lower of cost or market. Included within this
amount, but not to exceed 2% of the value of the Fund's net assets, may be
warrants that are not listed on a recognized stock exchange;

8. Invest in real estate limited partnership interests[, except that this
shall not prevent the Fund from investing in Real Estate Investment
Trusts];

9. Invest in oil, gas or other mineral exploration or development programs or
leases;

10. Purchase puts, calls, straddles, spreads and any combination thereof if
any reason thereof the value of its aggregate investment in such classes
of securities will exceed 5% of their respective total assets [; except
that each Fund may purchase such instruments as described in the
Prospectus and this Statement of Additional Information;]

11. Invest more than 15% of the value of its net assets in illiquid securities
(as defined under federal and state securities laws), including repurchase
agreements with remaining maturities in excess of seven days, except that
the Prime Money Market Fund may not invest more than 10% in such
securities; provided, however, restricted securities, including Rule 144A
securities and section 4(2) commercial paper, that meet the criteria
established by the Board of Trustees of the Trust will be considered
liquid restricted securities; and

12. Invest more than 10% of its total assets in restricted securities.

The foregoing percentages will apply at the time of the purchase of a security
and shall not be considered violated unless an excess or deficiency occurs
immediately after or as a result of a purchase of such security. The above
investment limitations and the investment limitations in the Prospectus that are
fundamental policies of the Trust may not be changed without shareholder
approval.

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<PAGE>

THE MONEY MANAGERS

Each Money Manager Agreement provides that a Money Manager shall not be
protected against any liability to the Trust or its shareholders by reason of
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard of its obligations or
duties thereunder.

The continuance of each Money Manager Agreement must be specifically approved at
least annually (i) by the vote of a majority of the outstanding shares of that
Fund or by the Trustees, and (ii) by the vote of a majority of the Trustees who
are not parties to such Agreement or "interested persons" of any party thereto,
cast in person at a meeting called for the purpose of voting on such approval.
Each Money Manager Agreement will terminate automatically in the event of its
assignment, and is terminable at any time without penalty by the Trustees of the
Trust or, with respect to a Fund, by a majority of the outstanding shares of
that Fund, on not less than 30 days nor more than 60 days written notice to the
Money Manager or by the Money Manager on 90 days written notice to the Trust.

THE MANAGER AND SHAREHOLDER SERVICING AGENT

The Management Agreement provides that SFM shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Trust in connection
with the matters to which the Management Agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on the part of
SFM in the performance of its duties or from reckless disregard of its duties
and obligations thereunder.

The continuance of the Management Agreement must be specifically approved at
least annually (i) by the vote of a majority of the Trustees or by the vote of a
majority of the outstanding voting securities of that Fund, and (ii) by the vote
of a majority of the Trustees of the Trust who are not parties to the Management
Agreement or an "interested person" (as that term is defined in the 1940 Act) of
any party thereto, cast in person at a meeting called for the purpose of voting
on such approval. The Management Agreement is terminable at any time as to any
Fund without penalty by the Trustees of the Trust, by a vote of a majority of
the outstanding shares of the Fund or by SFM on not less than 30 days nor more
than 60 days written notice.

SFM, a wholly owned subsidiary of SEI Corporation ("SEI"), was organized as a
Delaware corporation in 1969 and has its principal business offices at 680 East
Swedesford Road, Wayne, PA 19087-1658. Alfred P. West, Jr., Henry H. Greer and
Carmen V. Romeo constitute the Board of Directors of the Administrator. Mr.
West is the Chairman of the Board and Chief Executive Officer of the
Administrator and of SEI. Mr. Greer is the President and Chief Operating
Officer of the Administrator and of SEI. SEI and its subsidiaries are leading
providers of funds evaluation services, trust accounting systems, and brokerage
and information services to financial institutions, institutional investors and
money managers. The Administrator also serves as administrator to the following
other mutual funds: SEI Liquid Asset Trust; SEI Tax Exempt Trust; SEI
Institutional Managed Trust; SEI Index Funds; SEI International Trust; SEI Daily
Income Trust; Stepstone Funds; FFB Lexicon Funds; The Advisors' Inner Circle
Fund; Compass Capital Group; The Pillar Funds; STI Classic Funds; CUFUND;
CoreFunds, Inc.; First American Funds, Inc.; First American Investment Funds,
Inc.; Rembrandt FundsSM; The Arbor Fund; 1784 Funds; The PBHG Funds, Inc.;
Marquis FundsSM; Morgan Grenfell Investment Trust; Nationar Funds, Inc.;
Inventor Funds; Bishop Street Funds; The Achievement Funds Trust and Insurance
Investment Products Trust.

If operating expenses of any Fund exceed limitations established by certain
states, SFM will pay such excess. SFM will not be required to bear expenses of
any Fund to an extent which would result in the Fund's inability to qualify as a
regulated investment company under provisions of the Internal Revenue Code. The

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<PAGE>

term "expenses" is defined in such laws or regulations, and generally excludes
brokerage commissions, distribution expenses, taxes, interest and extraordinary
expenses.

DISTRIBUTION

Although banking laws and regulations prohibit banks from distributing shares of
open-end investment companies such as the Trust, according to an opinion issued
to the staff of the Securities and Exchange Commission by the Office of the
Comptroller of the Currency, financial institutions are not prohibited from
acting in other capacities for investment companies, such as providing
shareholder services. Should future legislative, judicial or administrative
action prohibit or restrict the activities of financial institutions in
connection with providing shareholder services, the Trust may be required to
alter materially or discontinue its arrangements with such financial
institutions.

SEI Financial Services Company (the "Distributor"), a wholly-owned subsidiary of
SEI, and the Trust are parties to a distribution agreement ("Distribution
Agreement"). The Distribution Agreement shall be reviewed and ratified at least
annually (i) by the Trust's Trustees or by the vote of a majority of the
outstanding shares of the Trust, and (ii) by the vote of a majority of the
Trustees of the Trust who are not parties to the Distribution Agreement or
interested persons (as defined in the 1940 Act) of any party to the Distribution
Agreement, cast in person at a meeting called for the purpose of voting on such
approval. The Distribution Agreement will terminate in the event of any
assignment, as defined in the 1940 Act, and is terminable with respect to a
particular Fund on not less than sixty days' notice by the Trust's Trustees, by
vote of a majority of the outstanding shares of such Fund or by the Distributor.
The Distributor will receive no compensation for the distribution of Fund
shares.

The Distributor may, from time to time in its sole discretion, institute one or
more promotional incentive programs, which will be paid by the Distributor from
the sales charge it receives or from any other source available to it. Under
any such program, the Distributor will provide promotional incentives, in the
form of cash or other compensation, including merchandise, airline vouchers,
trips and vacation packages, to all dealers selling shares of the Funds. Such
promotional incentives will be offered uniformly to all dealers and predicated
upon the amount of shares of the Funds sold by the dealer.

TRUSTEES AND OFFICERS OF THE TRUST

The Trustees and executive officers of the Trust and their principal occupations
for the last five years are set forth below. Each may have held other positions
with the named companies during that period. Unless otherwise noted, the
business address of each Trustee and executive officer is SEI Financial
Management Corporation, 680 East Swedesford Road, Wayne, PA 19087. Certain
trustees and officers of the Trust also serve as trustees and officers of some
or all of the following: SEI Liquid Asset Trust; SEI Tax Exempt Trust; SEI
Institutional Managed Trust; SEI Index Funds; SEI International Trust; SEI Daily
Income Trust; Stepstone Funds; FFB Lexicon Funds; The Advisors' Inner Circle
Fund; Compass Capital Group; The Pillar Funds; STI Classic Funds; CUFUND;
CoreFunds, Inc.; First American Funds, Inc.; First American Investment Funds,
Inc.; Rembrandt Funds(SM); The Arbor Fund, 1784 Funds; The PBHG Funds, Inc.;
Marquis FundsSM; Morgan Grenfell Investment Trust Nationar Funds, Inc.; Inventor
Funds; Bishop Street Funds; The Achievement Funds Trust and Insurance Investment
Products Trust.

DAVID G. LEE - President, Chief Executive Officer - Senior Vice President of
the Distributor since 1993. Vice President of the Distributor since 1991.
President, GW Sierra Trust Funds prior to 1991.

S-16
<PAGE>

CARMEN V. ROMEO - Treasurer, Assistant Secretary - Director, Executive Vice
President, Chief Financial Officer and Treasurer of SEI since 1977. Director
and Treasurer of the Manager and Distributor since 1981.

SANDRA K. ORLOW - Vice President, Assistant Secretary - Vice President and
Assistant Secretary of the Manager and Distributor since 1988. Corporate Legal
Assistant, Omni Exploration (oil and gas investment) prior to 1983.

ROBERT B. CARROLL - Vice President, Assistant Secretary - Vice President and
Assistant Secretary of the SEI Corporation, the Manager and Distributor since
1994. United States Securities and Exchange Commission, Division of Investment
Management, 1990-94. Associate, McGuire, Woods, Battle & Boothe (law firm),
prior to 1990.

KATHRYN L. STANTON - Vice President, Assistant Secretary - Vice President and
Assistant Secretary of SEI Corporation, the Manager and Distributor since 1994.
Associate, Morgan, Lewis & Bockius (law firm), 1989-94.

KEVIN P. ROBINS - Vice President, Assistant Secretary - Senior Vice President
and General Counsel of SEI and the Distributor since 1994. Vice President and
Assistant Secretary of the Manager and Distributor 1992-94. Associate, Morgan,
Lewis & Bockius (law firm) prior to 1992.

JEFFREY A. COHEN - Controller, Assistant Secretary - Director of Funds
Accounting of SEI since 1991. Senior Accountant of Price Waterhouse 1988-1991.

RICHARD W. GRANT - Secretary - 2000 One Logan Square, Philadelphia, PA 19103,
Partner, Morgan, Lewis & Bockius, counsel to the Trust, Manager and Distributor.

The Trustees and officers of the Trust own less than 1% of the outstanding
shares of the Trust. The Trust pays the fees for unaffiliated Trustees.
Compensation of officers and affiliated Trustees of the Trust is paid by SFM.
The following table exhibits compensation for the fiscal year ended _____ __,
____.

<TABLE>
<CAPTION>
====================================================================================================================================

Aggregate Total Compensation
Compensation From From Registrant and
Registrant for the Pension or Retirement Estimated Annual Fund Complex Paid to
Fiscal Year Ended Benefits Accrued as Benefits Upon Trustees for the Fiscal
_______ __, ___ Part of Fund Expenses Retirement Year Ended

Name of Person, Position ________ __, ____
- - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>

====================================================================================================================================
</TABLE>

PERFORMANCE

From time to time, each Fund may advertise yield and/or total return. These
figures will be based on historical earnings and are not intended to indicate
future performance.

The yield of a Fund refers to the annualized income generated by an investment
in the Fund over a specified 30-day period. The yield is calculated by assuming
that the income generated by the investment during that period generated each
period over one year and is shown as a percentage of the investment. In
particular, yield will be calculated according to the following formula: Yield =
2[(((a-b)/cd) + 1)(to the 6 power)-1], where a = dividends and interest earned
during the period; b = expenses accrued for the period (net of

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<PAGE>

reimbursement); c = the current daily number of shares outstanding during the
period that were entitled to receive dividends; and d = the maximum offering
price per share on the last day of the period.

The current yield of the Prime Money Market Fund, which is a money market fund,
is calculated daily based upon the 7 days ending on the date of calculation
("base period"). The yield is computed by determining the net change (exclusive
of capital changes) in the value of a hypothetical pre-existing shareholder
accounts having a balance of one share at the beginning of the period,
subtracting a hypothetical charge reflecting deductions from shareholder
accounts and dividing such net change by the value of the account at the
beginning of the same period to obtain the base period return and multiplying
the result by (365/7). Realized and unrealized gains and losses are not
included in the calculation of the yield.

The total return of a Fund refers to the average compounded rate of return to a
hypothetical investment for designated time periods (including, but not limited
to, the period from which the Fund commenced operations through the specified
date), assuming that the entire investment is redeemed at the end of each
period. In particular, total return will be calculated according to the
following formula: P(1 + T)(to the n power) = ERV, where P = a hypothetical
initial payment of $1,000; T = average annual total return; n = number of years;
and ERV = ending redeemable value of a hypothetical $1,000 payment made at the
beginning of the designated time period as of the end of such period.

These money market Funds compute their effective compound yield by determining
the net changes, exclusive of capital changes, in the value of a hypothetical
pre-existing account having a balance of one share at the beginning of the
period, subtracting a hypothetical charge reflecting deductions from shareholder
accounts, and dividing the difference by the value of the account at the
beginning of the base period to obtain the base period return, and then
compounding the base period return by adding 1, raising the sum to a power equal
to 365 divided by 7, and subtracting 1 from the result, according to the
following formula: Effective Yield = {(Base Period Return + 1)(365 divided by
7)power} - 1. The current and the effective yields reflect the reinvestment of
net income earned daily on fund assets.

The Funds may, from time to time, compare their performance to other mutual
funds tracked by mutual fund rating services, to broad groups of comparable
mutual funds or to unmanaged indices which may assume investment of dividends
but generally do not reflect deductions for administrative and management costs.

From time to time the Trust may include the names of clients of the Money
Managers in advertisements and/or sales literature for the Trust.

PURCHASE AND REDEMPTION OF SHARES

The purchase and redemption price of shares is the net asset value of each
share. A Fund's securities are valued by SFM pursuant to valuations provided by
an independent pricing service (generally the last quoted sale price). Fund
securities listed on a securities exchange for which market quotations are
available are valued at the last quoted sale price on each Business Day (defined
as days on which the New York Stock Exchange is open for business or, if there
is no such reported sale, at the most recently quoted bid price. Unlisted
securities for which market quotations are readily available are valued at the
most recently quoted bid price. The pricing service may also use a matrix system
to determine valuations. This system considers such factors as security prices,
yields, maturities, call features, ratings and developments relating to specific
securities in arriving at valuations. The procedures of the pricing service and
its valuations are reviewed by the officers of the Trust under the general
supervision of the Trustees.

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<PAGE>

It is currently the Trust's policy to pay all redemptions in cash. The Trust
retains the right, however, to alter this policy to provide for redemptions in
whole or in part by a distribution in kind of readily marketable securities held
by a Fund in lieu of cash. Shareholders may incur brokerage charges on the sale
of any such securities so received in payment of redemptions. However, a
shareholder will at all times be entitled to aggregate cash redemptions from all
Funds of the Trust during any 90-day period of up to the lesser of $250,000 or
1% of the Trust's net assets.

A gain or loss for federal income tax purposes may be realized by a taxable
shareholder upon an in-kind redemption depending upon the shareholder's basis in
the shares of the Trust redeemed.

The Trust reserves the right to suspend the right of redemption and/or to
postpone the date of payment upon redemption for any period during which trading
on the New York Stock Exchange is restricted, or during the existence of an
emergency (as determined by the SEC by rule or regulation) as a result of which
disposal or evaluation of the fund securities is not reasonably practicable, or
for such other periods as the SEC may by order permit. The Trust also reserves
the right to suspend sales of shares of the Funds for any period during which
the New York Stock Exchange, the Manager, the Distributor, the Money Managers
and/or the Custodian are not open for business.

The Manager or Distributor will not accept securities as payment for shares of
the Prime Money Market Fund unless (a) such securities meet the investment
objectives and policies of the Trust; (b) the securities are acquired for
investment and not for resale; (c) such securities are liquid securities which
are not restricted as to transfer either by law or liquidity of market; (d) such
securities have a value which is readily ascertainable (and not established only
by evaluation).

The securities may be traded on foreign markets on days other than Business Days
or the net asset value of a Fund may be computed on days when such foreign
markets are closed. In addition, foreign markets may close at times other than
4:00 p.m. Eastern time. As a consequence, the net asset value of a share of a
Fund may not reflect all events that may affect the value of the Fund's foreign
securities unless the Money Managers determine that such events materially
affect net asset value in which case net asset value will be determined by
consideration of other factors.

TAXES

The following is only a summary of certain additional federal tax considerations
generally affecting the Funds and their shareholders that are not described in
the Funds' Prospectus. No attempt is made to present a detailed explanation of
the federal, state or local tax treatment of the Funds or their shareholders and
the discussion here and in the Funds' Prospectus is not intended as a substitute
for careful tax planning.

This discussion of federal income tax consequences is based on the Code and the
regulations issued thereunder as in effect on the date of this Statement of
Additional Information. New legislation, as well as administrative changes or
court decisions, may significantly change the conclusions expressed herein, and
may have a retroactive effect with respect to the transactions contemplated
herein.

Each Fund is treated as a separate entity for federal income tax purposes and is
not combined with the Trust's other Funds. Each Fund intends to qualify as a
regulated investment company ("RIC") under Subchapter M of the Code so that it
will be relieved of federal income tax on that part of its income that is
distributed to shareholders. In order to qualify for treatment as a RIC, a Fund
must distribute annually to its shareholders at least 90% of its investment
company taxable income (generally, net investment income plus the excess, if
any, of net short-term capital gain over net long-term capital losses)
("Distribution Requirement") and also must meet several additional requirements.
Among these requirements are the following: (i) at least 90% of a Fund's gross
income each taxable year must be derived from dividends,

S-19
<PAGE>

interest, payments with respect to securities loans, and gains from the sale or
other disposition of stock, securities or foreign currencies, or other income
derived with respect to its business of investing in such stock or securities or
currencies; (ii) less than 30% of a Fund's gross income each taxable year may be
derived from the sale or other disposition of stock, securities or certain other
assets held for less than three months; (iii) at the close of each quarter of a
Fund's taxable year, at least 50% of the value of its total assets must be
represented by cash and cash items, U.S. government securities, securities of
other RICs and other securities, with such other securities limited, in respect
of any one issuer, to an amount that does not exceed 5% of the value of a Fund's
assets and that does not represent more than 10% of the outstanding voting
securities of such issuer; and (iv) at the close of each quarter of a Fund's
taxable year, not more than 25% of the value of its assets may be invested in
securities (other than U.S. government securities or the securities of other
RICs) of any one issuer or of two or more issuers which the Fund controls and
which are engaged in the same, similar, or related trades or businesses.

Notwithstanding the Distribution Requirement described above, which only
requires a Fund to distribute at least 90% of its annual investment company
taxable income and does not require any minimum distribution of net capital
gain, a Fund will be subject to a nondeductible 4% federal excise tax to the
extent it fails to distribute by the end of any calendar year at least 98% of
its ordinary income for that year and 98% of its capital gain net income (the
excess of short- and long-term capital gain over short- and long-term capital
loss) for the one-year period ending on October 31 of that year, plus certain
other amounts. Each Fund intends to make sufficient distributions to avoid
liability for the federal excise tax. A Fund may in certain circumstances be
required to liquidate Fund investments in order to make sufficient distributions
to avoid federal excise tax liability at a time when the investment advisor
might not otherwise have chosen to do so, and liquidation of investments in such
circumstances may affect the ability of a Fund to satisfy the requirements for
qualification as a RIC.

Any gain or loss recognized on a sale, exchange or redemption of shares of a
Fund by a shareholder who is not a dealer in securities generally will be
treated as a long-term capital gain or loss if the shares have been held for
more than twelve months and otherwise will be treated as a short-term capital
gain or loss. However, if shares on which a shareholder has received a capital
gains distribution are subsequently sold, exchanged or redeemed and such shares
have been held for six months or less, any loss recognized will be treated as a
long-term capital loss to the extent of the capital gain distribution.

If a Fund fails to qualify as a RIC for any year, all of its income will be
subject to federal income tax at corporate rates, and its distributions
(including capital gain distributions) generally will be taxable as ordinary
income dividends to its shareholders, subject to the dividends received
deduction for eligible corporate shareholders.

A Fund will be required in certain cases to withhold and remit to the United
States Treasury 31% of amounts payable to any shareholder who (1) has provided
the Fund either an incorrect tax identification number or no number at all, (2)
who is subject to backup withholding by the Internal Revenue Service for failure
to properly report payments of interest or dividends, or (3) who has failed to
certify to the Fund that such shareholder is not subject to backup withholding.

Dividends and interest received by a Fund may be subject to income, withholding
or other taxes imposed by foreign countries and United States possessions that
would reduce the yield on a Fund's securities. Tax conventions between certain
countries and the United States may reduce or eliminate these taxes. Foreign
countries generally do not impose taxes on capital gains with respect to
investments by foreign investors. If more than 50% of the value of a Fund's
total assets at the close of its taxable year consists of securities of foreign
corporations, a Fund will be eligible to, and will, file an election with the
Internal Revenue Service that will enable shareholders, in effect, to receive
the benefit of the foreign tax credit with respect to any foreign and United
States possessions income taxes paid by a Fund. Pursuant to the election, a
Fund will

S-20
<PAGE>

treat those taxes as dividends paid to its shareholders. Each shareholder will
be required to include a proportionate share of those taxes in gross income as
income received from a foreign source and must treat the amount so included as
if the shareholder had paid the foreign tax directly. The shareholder may then
either deduct the taxes deemed paid by him or her in computing his or her
taxable income or, alternatively, use the foregoing information in calculating
the foreign tax credit (subject to significant limitations) against the
shareholder's federal income tax. If a Fund makes the election, it will report
annually to its shareholders the respective amounts per share of the Fund's
income from sources within, and taxes paid to, foreign countries and United
States possessions.

STATE TAXES

A Fund is not liable for any income or franchise tax in Massachusetts if it
qualifies as a RIC for federal income tax purposes. Distributions by a Fund to
shareholders and the ownership of shares may be subject to state and local
taxes. Shareholders should consult their own tax advisers regarding the affect
of federal, state and local taxes in their own individual circumstances.

FUND TRANSACTIONS

Money Managers make decisions to buy or sell securities independently from one
another. Thus, one Money Manager could sell a security at approximately the
same time another Money Manager for the same Fund is purchasing the same type of
security. In addition, when a Money Manager's services are terminated and/or a
new Money Manager is retained, the new Money Manager may significantly
restructure the Fund's portfolio. These practices may increase the Funds'
portfolio turnover rates, realization of gains or losses, brokerage commissions
and other transaction based costs.

The Trust has no obligation to deal with any dealer or group of dealers in the
execution of transactions in fund securities. Subject to policies established by
the Trustees, the Money Managers are responsible for placing orders to execute
Fund transactions. In placing orders, it is the Trust's policy to seek to obtain
the best net results taking into account such factors as price (including the
applicable dealer spread), size, type and difficulty of the transaction
involved, the firm's general execution and operational facilities, and the
firm's risk in positioning the securities involved. While the Money Managers
generally seek reasonably competitive spreads or commissions, the Trust will not
necessarily be paying the lowest spread or commission available. The Trust will
not purchase fund securities from any affiliated person acting as principal
except in conformity with the regulations of the SEC.

The money market securities in which a Fund invests are traded primarily in the
over-the-counter market. Bonds and debentures are usually traded over-the-
counter, but may be traded on an exchange. Where possible, the Money Managers
will deal directly with the dealers who make a market in the securities involved
except in those circumstances where better prices and execution are available
elsewhere. Such dealers usually are acting as principal for their own account.
On occasion, securities may be purchased directly from the issuer. Money market
securities are generally traded on a net basis and do not normally involve
either brokerage commissions or transfer taxes. The cost of executing fund
securities transactions of a Fund will primarily consist of dealer spreads and
underwriting commissions.

It is expected that the Funds may execute brokerage or other agency transactions
through the Distributor, a registered broker-dealer, for a commission, in
conformity with the 1940 Act, the Securities Exchange Act of 1934, as amended,
and rules of the SEC. Under these provisions, the Distributor is permitted to
receive and retain compensation for effecting fund transactions for a Fund on an
exchange if a written contract is in effect between the Distributor and the
Trust expressly permitting the Distributor to receive and retain such
compensation. These provisions further require that commissions paid to the
Distributor by the Trust for

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<PAGE>

exchange transactions not exceed "usual and customary" brokerage commissions.
The rules define "usual and customary" commissions to include amounts which are
"reasonable and fair compared to the commission, fee or other renumeration
received or to be received by other brokers in connection with comparable
transactions involving similar securities being purchased or sold on a
securities exchange during a comparable period of time." In addition, a Fund may
direct commission business to one or more designated broker-dealers, including
the Distributor, in connection with such broker-dealer's payment of certain of
the Fund's expenses. The Trustees, including those who are not "interested
persons" of the Trust, have adopted procedures for evaluating the reasonableness
of commissions paid to the Distributor and will review these procedures
periodically.

Since the Trust does not market its shares through intermediary brokers or
dealers, it is not the Trust's practice to allocate brokerage or principal
business on the basis of sales of its shares which may be made through such
firms. However, the Fund's Money Managers may place fund orders with qualified
broker-dealers who recommend the Trust to clients, and may, when a number of
brokers and dealers can provide best price and execution on a particular
transaction, consider such recommendations by a broker or dealer in selecting
among broker-dealers.

The Trust does not expect to use one particular dealer, but a Fund's Money
Managers may, consistent with the interests of the Fund, select brokers on the
basis of the research services they provide to the Fund's Money Managers. Such
services may include analysis of the business or prospects of a company,
industry or economic sector or statistical and pricing services. Information so
received by the Money Manager will be in addition to and not in lieu of the
services required to be performed by a Fund's Money Managers under the Advisory
and/or Sub-Advisory Agreements. If in the judgement of a Fund's Money Managers
the Funds, or other accounts managed by the Fund's Money Managers, will be
benefitted by supplemental research services, the Fund's Money Managers are
authorized to pay brokerage commissions to a broker furnishing such services
which are in excess of commissions which another broker may have charged for
effecting the same transaction. The expenses of a Fund's Money Managers will
not necessarily be reduced as a result of the receipt of such supplemental
information.

DESCRIPTION OF SHARES

The Declaration of Trust authorizes the issuance of an unlimited number of
shares of each Fund, each of which represents an equal proportionate interest in
that Fund. Each share upon liquidation entitles a shareholder to a pro rata
share in the net assets of that Fund. Shareholders have no preemptive rights.
The Declaration of Trust provides that the Trustees of the Trust may create
additional series of shares or separate classes of funds. Share certificates
representing the shares will not be issued.

LIMITATION OF TRUSTEES' LIABILITY

The Declaration of Trust provides that a Trustee shall be liable only for his or
her own willful defaults and, if reasonable care has been exercised in the
selection of officers, agents, employees or administrators, shall not be liable
for any neglect or wrongdoing of any such person. The Declaration of Trust also
provides that the Trust will indemnify its Trustees and officers against
liabilities and expenses incurred in connection with actual or threatened
litigation in which they may be involved because of their offices with the Trust
unless it is determined in the manner provided in the Declaration of Trust that
they have not acted in good faith in the reasonable belief that their actions
were in the best interests of the Trust. However, nothing in the Declaration of
Trust shall protect or indemnify a Trustee against any liability for his or her
willful misfeasance, bad faith, gross negligence or reckless disregard of his or
her duties.

S-22
<PAGE>

VOTING

Where the Prospectus for the Funds or this Statement of Additional Information
state that an investment limitation or a fundamental policy may not be changed
without shareholder approval, such approval means the vote of (i) 67% or more of
the Fund's shares present at a meeting if the holders of more than 50% of the
outstanding shares of the Fund are present or represented by Proxy, or (ii) more
than 50% of the Fund's outstanding shares, whichever is less.

SHAREHOLDER LIABILITY

The Trust is an entity of the type commonly known as a "Massachusetts business
trust." Under Massachusetts law, shareholders of such a Trust could, under
certain circumstances, be held personally liable as partners for the obligations
of the Trust. Even if, however, the Trust were held to be a partnership, the
possibility of the shareholders' incurring financial loss for that reason
appears remote because the Trust's Declaration of Trust (i) contains an express
disclaimer of shareholder liability for obligations of the Trust and requires
that notice of such disclaimer be given in each agreement, obligation or
instrument entered into or executed by or on behalf of the Trust or the
Trustees, and (ii) provides for indemnification out of the Trust property for
any shareholders held personally liable for the obligations of the Trust.

S-23
<PAGE>

PART C. OTHER INFORMATION

Item 24. Financial Statements and Exhibits:

(a) Not Applicable

(b) Additional Exhibits:

(1) Declaration of Trust.*
(2) By-Laws.*

* Filed herewith.

As of ______ __, 1995

NUMBER OF
RECORD
TITLE OF CLASS HOLDERS
-------------- ---------

<S> <C>
Prime Money Market Fund..................................................... 0
Large Cap Value Fund........................................................ 0
Large Cap Growth Fund....................................................... 0
Small Cap Value Fund........................................................ 0
Small Cap Growth Fund....................................................... 0
Core Fixed Income Fund...................................................... 0
High Yield Bond Fund........................................................ 0
International Fixed Income Fund............................................. 0
Emerging Markets Equity Fund................................................ 0
Core International Equity Fund.............................................. 0
European Equity Fund........................................................ 0
Pacific Basin Fund.......................................................... 0
</TABLE>

Item 27. Indemnification:

Article VIII of the Agreement and Declaration of Trust is filed as Exhibit 1 to
the Registration Statement. Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to trustees, directors,
officers and controlling persons of the Registrant by the Registrant pursuant to
the Declaration of Trust or otherwise, the Registrant is aware that in the
opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Act and, therefore, is unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by trustees,
directors, officers or controlling persons of the Registrant in connection with
the successful defense of any act, suite or proceeding) is asserted by such
trustees, directors,
<PAGE>

officers or controlling persons in connection with the shares being registered,
the Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issues.

Item 28. Business and Other Connections of Money Managers:

Other business, profession, vocation, or employment of a substantial nature
in which each director or principal officer of each Money Manager is or has
been, at any time during the last two fiscal years, engaged for his own account
or in the capacity of director, officer, employee, partner or trustee are as
follows:

1838 INVESTMENT ADVISORS, L.P.

1838 Investment Advisors L.P. ("1838") is the money manager for Registrant's the
Small Cap Value Fund. The principal business address of 1838 is 5 Radnor
Corporate Center, 100 Matsonford Road, Suite 320, Radnor, Pennsylvania 19087.
1838 is an investment money manager registered under the Advisers Act.

The list required by this Item 28 of officers and directors of Acadian, together
with information as to any other business, profession, vocation or employment of
substantial nature engaged in by such officers and directors during the past two
years, is incorporated by reference to Schedules A and D of Form ADV filed by
1838 pursuant to the Advisers Act (SEC File No. 801-33025).

ACADIAN ASSET MANAGEMENT, INC.

Acadian Asset Management, Inc. ("Acadian") is the money manager for Registrant's
the Core International Equity Fund. The principal business address of Acadian is
260 Franklin Street, Boston, Massachusetts 02110. Acadian is an investment money
manager registered under the Advisers Act.

The list required by this Item 28 of officers and directors of Acadian, together
with information as to any other business, profession, vocation or employment of
substantial nature engaged in by such officers and directors during the past two
years, is incorporated by reference to Schedules A and D of Form ADV filed by
Acadian pursuant to the Advisers Act (SEC File No. 28078).

ALLIANCE CAPITAL MANAGEMENT

Alliance Capital Management L.P. ("Alliance") is a money manager for
Registrant's Large Cap Growth Fund. The principal business address of Alliance
is 1345 Avenue of the Americas, New York, New York 10105. Alliance is an
investment money manager registered under the Advisers Act.

The list required by this Item 28 of officers and directors of Alliance,
together with information as to any other business, profession, vocation or
employment of substantial nature engaged in by such officers and directors
during the past two years, is incorporated by reference to Schedules A and D of
Form ADV filed by Alliance pursuant to the Advisers Act (SEC File No. 801-
32361).

CS FIRST BOSTON INVESTMENT MANAGEMENT CORPORATION

CS First Boston Investment Management Corporation ("CS First Boston Management")
is the money manager Registrant's High Yield Fund. The principal address of CS
First Boston Management is 599 Lexington Avenue, New York, New York 10022. CS
First Boston Management is an investment money manager registered under the
Advisers Act.

2
<PAGE>

The list required by this Item 28 of officers and directors of CS First Boston
Management, together with information as to any other business, profession,
vocation or employment of a substantial nature engaged in by such officers and
directors during the past two years, is incorporated by reference to Schedules A
and D of Form ADV filed by CS First Boston Management pursuant to the Advisers
Act (SEC File No. 801-19906).

IDS ADVISORY GROUP, INC.

IDS Advisory Group, Inc. ("IDS") is a money manager for Registrant's Large Cap
Growth Fund. The principal business address of IDS is IDS Tower 10, Minneapolis,
Minnesota 55400-0010. IDS is an investment money manager registered under the
Advisers Act.

The list required by this Item 28 of officers and directors of IDS, together
with information as to any other business, profession, vocation or employment of
substantial nature engaged in by such officers and directors during the past two
years, is incorporated by reference to Schedules A and D of Form ADV filed by
IDS pursuant to the Advisers Act (SEC File No. 801-25943).

LSV ASSET MANAGEMENT

LSV Asset management ("LSV") is a money manager for Registrant's Large Cap Value
Fund. The principal business address of LSV is 181 West Madison Street,
Chicago, Illinois 60602. LSV is an investment money manager registered under the
Advisers Act.

The list required by this Item 28 of officers and directors of LSV, together
with information as to any other business, profession, vocation or employment of
substantial nature engaged in by such officers and directors during the past two
years, is incorporated by reference to Schedules A and D of Form ADV filed by
LSV pursuant to the Advisers Act (SEC File No. 801-38734).

MELLON EQUITY ASSOCIATES

Mellon Equity Associates ("Mellon") is a money manager for Registrant's Large
Cap Value Fund. The principal business address of Mellon is 500 Grant Street,
Suite 3700, Pittsburgh, PA 15258. Mellon is an investment money manager
registered under the Advisers Act.

The list required by this Item 28 of officers and directors of Mellon, together
with information as to any other business, profession, vocation or employment of
substantial nature engaged in by such officers and directors during the past two
years, is incorporated by reference to Schedule A and D of Form ADV filed by
Mellon pursuant to the Advisers Act (SEC File No. 801-28692).

MERUS CAPITAL MANAGEMENT

<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
with Investment Adviser NAME OF OTHER COMPANY OTHER COMPANY
----------------------- --------------------- ---------------
<S> <C> <C>
Stanley F. Farrar Sullivan & Cromwell Partner
Director of Adviser

Kazuo Ibuki The Mitsubishi Bank Limited Chairman
Director
</TABLE>

3
<PAGE>

<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
with Investment Adviser NAME OF OTHER COMPANY OTHER COMPANY
----------------------- --------------------- ---------------
<S> <C> <C>
Raymond E. Miles Univ. of California Dean
Director of Adviser School of Bus. Admin.

J. Fernado Niedbla Infotec Development, Inc. Chairman & CEO
Director of Adviser

Hiroo Nozawa BanCal Tri-State Chairman, President &
Director of Adviser Corporation CEO
Chairman, President & CEO

Carl W. Robertson Warland Investments Managing Director
Director of Adviser Company

Paul W. Steere Bogle & Gates Partner
Director of Adviser

Charles R. Scott Intermark, Inc. President & CEO
Director of Adviser

Henry T. Swigert ESCO Corporation Chairman
Director of Adviser

Yasuyuki Hirai The Mitsubishi Bank --
Director of Adviser,
Chief Executive Officer

Minoru Noda
Director of Adviser, -- --
Vice Chairman Credit & Finance

Samuel L. Williams Hufstedler, Miller Partner
Director of Adviser Kaus & Beardsley

Roy A. Henderson -- --
Director of Advisor,
Chairman, Regional Banking

Takejiro Sneyoshi MBL New York Branch Director & General Manager
Director of Adviser

Peter R. Butcher -- --
Executive Vice President
Chief Credit Officer

David W. Ehlers -- --
Executive Vice President
Chief Financial Officer
</TABLE>

4
<PAGE>

<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
with Investment Adviser NAME OF OTHER COMPANY OTHER COMPANY
----------------------- --------------------- -----------------
<S> <C> <C>
Michael Spilsbury -- --
Executive Vice President
Resources & Services Sector

William R. Sweet -- --
Executive Vice President
Wholesale & International Group

James M. Castro
Secretary -- --

Luke Mazor
Senior Vice President & -- --
Manager
</TABLE>

MONTGOMERY ASSET MANAGEMENT, L.P.

Montgomery Asset Management, L.P. ("MAM") is a money manager for Registrant's
Emerging Markets Equity Fund. The principal business address of MAM is 600
Montgomery Street, San Francisco, California 94111. MAM is an investment money
manager registered under the Advisers Act.

The list required by this Item 28 of officers and directors of MAM, together
with information as to any other business, profession, vocation or employment of
substantial nature engaged in by such officers and directors during the past two
years, is incorporated by reference to Schedules A and D of Form ADV filed by
MAM pursuant to the Advisers Act (SEC File No. 801-36790).]

MORGAN GRENFELL INVESTMENT SERVICES LIMITED

Morgan Grenfell Investment Services Limited ("Morgan Grenfell") is a money
manager for Registrant's European Equity Fund. The principal business address of
Morgan Grenfell is 20 Finsbury Circus, London EC2M INB, England. Morgan Grenfell
is an investment money manager registered under the Advisers Act.

The list required by this Item 28 of officers and directors of Morgan Grenfell,
together with information as to any other business, profession, vocation or
employment of substantial nature engaged in by such officers and directors
during the past two years, is incorporated by reference to Schedules A and D of
Form ADV filed by Morgan Grenfell pursuant to the Advisers Act (SEC File No.
801-12880).

PILGRIM BAXTER & ASSOCIATES LTD.

Pilgrim Baxter & Associates, Ltd. ("Pilgrim Baxter") is a money manager for
Registrant's Small Cap Growth Fund. The principal business address of Pilgrim
Baxter & Associates is 1255 Drimmers Lane, Suite 300, Wayne, Pennsylvania 19087.
Pilgrim Baxter is an investment money manager registered under the Advisers Act.

The list required by this Item 28 of officers and directors of Pilgrim Baxter &
Associates, together with information as to any other business, profession,
vocation or employment of substantial nature engaged in by such officers and
directors during the past two years, is incorporated by reference to Schedules A
and D of Form ADV filed by Pilgrim Baxter pursuant to the Advisers Act (SEC File
No. 801-19165).

5
<PAGE>

SCHRODER CAPITAL MANAGEMENT INTERNATIONAL LIMITED

Schroder Capital Management International Limited ("Schroder") is the money
manager for Registrant's Pacific Basin Equity Fund. The principal business
address of Schroder is 33 Gutter Lane, London EC2V 8AS, England. Schroder is an
investment money manager registered under the Adviser Act.

The list required by this Item 28 of officers and directors of Schroder,
together with information as to any other business, profession, vocation or
employment of substantial nature engaged in by such officers and directors
during the past two years, is incorporated by reference to Schedules A and D of
Form ADV filed by Schroder pursuant to the Advisers Act (SEC File No. 801-
15834).

SEI FINANCIAL MANAGEMENT CORPORATION

SEI Financial Management Company ("SFM") is the money manager for the Large Cap
Value, Large Cap Growth, Small Cap Value, Small Cap Growth, Core Fixed Income,
High Yield Bond, International Fixed Income, Emerging Markets Equity, Core
International Equity, European Equity and Pacific Basin Equity Funds. The
principal address of SFM is 680 East Swedesford Road, Wayne, Pennsylvania 19087.
SFM is an investment money manager registered under the Advisers Act.

The list required by this Item 28 of officers and directors of SFM, together
with information as to any other business profession, vocation, or employment of
a substantial nature engaged in by such officers and directors during the past
two years is incorporated by reference to Schedules A and D of Form ADV filed by
SFM to the Advisers Act (SEC File No. 801-24593).

STRATEGIC FIXED INCOME L.P.

Strategic Fixed Income L.P. ("Strategic") is a money manager for Registrant's
International Fixed Income Fund. The principal business address of Strategic is
1001 Nineteenth Street North, 16th Floor, Arlington, Virginia 22209. Strategic
is an investment money manager registered under the Advisers Act.

The list required by this Item 28 of officers and directors of Strategic,
together with information as to any other business, profession, vocation or
employment of substantial nature engaged in by such officers and directors
during the past two years, is incorporated by reference to Schedules A and D of
Form ADV filed by Strategic pursuant to the Advisers Act (SEC File No. 801-
38734).

WELLINGTON MANAGEMENT COMPANY

Wellington Management Company ("WMC") is the money manager for the Prime Money
Market Fund. The principal address for Wellington is 75 State Street, Boston, MA
02109. WMC is an investment money manager registered under the Advisers Act.

The list required by this Item 28 of officers and directors of WMC, together
with information as to any other business, profession, vocation or employment of
substantial nature engaged in by such officers and directors during the past two
years, is incorporated by reference to Schedules A and D of Form ADV filed by
WMC pursuant to the Advisers Act (SEC File No. 801-15908).

WESTERN ASSET MANAGEMENT COMPANY

Western Asset Management Company ("Western") is the money manager for
Registrant's Core Fixed Income Fund. The principal business address of Western
is 117 East Colorado Boulevard, Pasadena, California 91105. Western is an
investment money manager registered under the Advisers Act.

6
<PAGE>

The list required by this Item 28 of officers and directors of Western, together
with information as to any other business, profession, vocation or employment of
substantial nature engaged in by such officers and directors during the past two
years, is incorporated by reference to Schedules A and D of Form ADV filed by
Western pursuant to the Advisers Act (SEC File No. 801-08162).

WORLDINVEST LIMITED

WorldInvest Limited ("WorldInvest") is a money manager for Registrant's Core
International Equity Fund. The principal address of WorldInvest is 56 Russell
Square, London, England. WorldInvest is an investment money manager registered
under the Advisers Act.

The list required by this Item 28 of officers and directors of WorldInvest,
together with information as to any other business, profession, vocation or
employment of substantial nature engaged in by such officers and directors
during the past two years, is incorporated by reference to Schedules A and D of
Form ADV filed by WorldInvest pursuant to the Advisers Act (SEC File No. 801-
26315).

Item 29. Principal Underwriters:

Registrant's distributor, SEI Financial Services Company ("SFS"), acts as
distributor for:

<TABLE>
<S> <C>
SEI Daily Income Trust July 15, 1982
SEI Liquid Asset Trust November 29, 1982
SEI Tax Exempt Trust December 3, 1982
SEI Index Funds July 10, 1985
SEI Institutional Managed Trust January 22, 1987
SEI International Trust August 30, 1988
Stepstone Funds January 30, 1991
The Compass Capital Group of Funds March 8, 1991
FFB Lexicon Funds October 18, 1991
The Advisors' Inner Circle Fund November 14, 1991
The Pillar Funds February 28, 1992
CUFUND May 1, 1992
STI Classic Funds May 29, 1992
CoreFunds, Inc. October 30, 1992
First American Funds, Inc. November 1, 1992
First American Investment Funds, Inc. November 1, 1992
The Arbor Fund January 28, 1993
1784 Funds June 1, 1993
Marquis/SM/ Funds August 17, 1993
Morgan Grenfell Investment Trust January 3, 1994
The PBHG Funds, Inc. July 16, 1993
Nationar Funds, Inc. June 15, 1994
Inventor Funds, Inc. August 1, 1994
The Achievement Funds Trust December 27, 1994
Insurance Investment Products Trust December 30, 1994
Bishop Street Funds January 27, 1995
</TABLE>

SFS provides numerous financial services to investment managers, pension plan
sponsors, and bank trust departments. These services include portfolio
evaluation, performance measurement and consulting services ("Funds Evaluation")
and automated execution, clearing and settlement of securities transactions
("MarketLink").

7
<PAGE>

<TABLE>
<CAPTION>
Position and Office Positions and Offices
Name with Underwriter with Registrant
- - ---- ---------------- ---------------
<S> <C> <C>
Alfred P. West, Jr. Director, Chairman & Chief Executive Officer [_]
Henry H. Greer Director, President & Chief Operating Officer [_]
Carmen V. Romeo Director, Executive Vice President & Treasurer [_]
Gilbert L. Beebower Executive Vice President [_]
Richard B. Lieb Executive Vice President [_]
Charles A. Marsh Executive Vice President-Capital Resources Division [_]
Donal Botkin Senior Vice President [_]
Leo J. Dolan, Jr. Senior Vice President [_]
Carl A. Guarino Senior Vice President [_]
Jerome Hickey Senior Vice President [_]
David G. Lee Senior Vice President [_]
William Madden Senior Vice President [_]
A. Keith McDowell Senior Vice President [_]
Dennis J. McGonigle Senior Vice President [_]
Hartland J. McKeown Senior Vice President [_]
James V. Morris Senior Vice President [_]
Steven Onofrio Senior Vice President [_]
Kevin P. Robins Senior Vice President, General Counsel & Secretary [_]
Robert Wagner Senior Vice President [_]
Patrick K. Walsh Senior Vice President [_]
Kenneth Zimmer Senior Vice President [_]
Robert Crudup Managing Director [_]
Ward Curtis Managing Director [_]
Jeff Drennen Managing Director [_]
Vic Galef Managing Director [_]
Michael Howard Managing Director [_]
Lawrence D. Hutchison Managing Director [_]
Kim Kirk Managing Director [_]
John Krzeminski Managing Director [_]
Carolyn McLaurin Managing Director [_]
Barbara Moore Managing Director [_]
Donald Pepin Managing Director [_]
Mark Samuels Managing Director [_]
Wayne M. Withrow Managing Director [_]
Robert Ludwig Team Leader [_]
Vicki Malloy Team Leader [_]
Chris Schwartz Team Leader [_]
Robert Aller Vice President [_]
Charles Baker Vice President [_]
Steve Bendinelli Vice President [_]
Gordon W. Carpenter Vice President [_]
Robert B. Carroll Vice President & Assistant Secretary [_]
Ed Daly Vice President [_]
Lucinda Duncalfe Vice President [_]
Michael Kantor Vice President [_]
Samuel King Vice President [_]
Donald H. Korytowski Vice President [_]
Jack May Vice President [_]
Matt Mille Vice President [_]
</TABLE>

8
<PAGE>

<TABLE>
<CAPTION>
Position and Office Positions and Offices
Name with Underwriter with Registrant
- - ---- ---------------- ---------------
<S> <C> <C>
David O'Donovan Vice President [_]
Sandra K. Orlow Vice President & Assistant Secretary [_]
Kim Rainey Vice President [_]
David Ray Vice President [_]
Paul Sachs Vice President [_]
Steve Smith Vice President [_]
Kathryn L. Stanton Vice President & Assistant Secretary [_]
Joseph Velez Vice President [_]
David Wheeler Vice President [_]
Daniel Spaventa Vice President [_]
William Zawaski Vice President [_]
James Dougherty Director of Brokerage Services [_]
</TABLE>

Item 30. Location of Accounts and Records:

Books or other documents required to be maintained by Section 31(a) of
the Investment Company Act of 1940, and the rules promulgated thereunder, are
maintained as follows:

(a) With respect to Rules 31a-1(a); 31a-1(b)(1); (2)(a) and (b); (3);
(6); (8); (12); and 31a-1(d), the required books and records are
maintained at the offices of Registrant's Custodians:

CoreStates Bank, N.A.
Broad and Chestnut Streets
P.O. Box 7618
Philadelphia, PA 19101

The Chase Manhattan Bank, N.A.
Chase MetroTech Center
Brooklyn, NY 11245

(b)/(c) With respect to Rules 31a-1(a); 31a-1(b)(1),(4); (2)(C) and
(D); (4); (5); (6); (8); (9); (10); (11); and 31a-1(f), the required
books and records are maintained at the offices of Registrant's
Manager:

SEI Financial Management Corporation
680 E. Swedesford Road
Wayne, PA 19087

(c) With respect to Rules 31a-1(b)(5),(6),(9) and 10 and 31a-1(f), the
required books and records are maintained at the principal offices of
the Registrant's Money Managers:

1838 Investment Advisors, L.P.
5 Radnor Corporate Center
100 Matsonford Road
Suite 320
Radnor, Pennsylvania 19087

9
<PAGE>

Acadian Asset Management
260 Franklin Street
Boston, Massachusetts 02110

Alliance Capital Management
1345 Avenue of the Americas
New York, New York 10105

CS First Boston Investment Management Corporation
599 Lexington Avenue
New York, New York 10022

IDS Advisory Group, Inc.
IDS Tower 10
Minneapolis, Minnesota 55400-0010

LSV Asset Management
181 West Madison Street
Chicago, Illinois 60602

Mellon Equity Associates
500 Grant Street
Suite 3700
Pittsburgh, PA 15258

Merus Capital Management
475 Sansome Street
San Francisco, CA 94104

Montgomery Asset Management, L.P.
600 Montgomery Street
San Francisco, California 94111

Morgan Grenfell Investment Services Limited
20 Finsbury Circus
London EC2M INB
England

Pilgrim Baxter & Associates, Ltd.
1255 Drummers Lane
Suite 300
Wayne, Pennsylvania 19087

Schroder Capital Management International Limited
33 Gutterlane
London ECZV 8AS
England

SEI Financial Management Corporation
680 E. Swedesford Road
Wayne, PA 19087

10
<PAGE>

Strategic Fixed Income L.P.
1001 Nineteenth Street North, 16th Floor
Arlington, VA 22209

Wellington Management Company
75 State Street
Boston, Massachusetts 02109

Western Asset Management
117 East Colorado Boulevard
Pasadena, CA 91105

WorldInvest Limited
56 Russell Square
London, England

Item 31. Management Services:

None.

Item 32. Undertakings:

Registrant undertakes to file a post-effective amendment containing
reasonably current financial statements, which need not be certified, within
four to six months of the effective date of the Registrant's 1933 Act
Registration Statement or the commencement of the operations of each Fund,
whichever is later.

Registrant hereby undertakes that whenever Shareholders meeting the
requirements of Section 16(c) of the Investment Company Act of 1940 inform the
Board of Trustees of their desire to communicate with Shareholders of the Trust,
the Trustees will inform such Shareholders as to the approximate number of
Shareholders of record and the approximate cost of mailing or afford said
Shareholders access to a list of Shareholders.

Registrant undertakes to hold a meeting of Shareholders for the purpose
of voting upon the question of removal of a Trustee(s) when requested in writing
to do so by the holders of at least 10% of Registrant's outstanding shares and
in connection with such meetings to comply with the provisions of Section 16(c)
of the Investment Company Act of 1940 relating to Shareholder communications.

Registrant undertakes to furnish each person to whom a prospectus for
any series of the Registrant is delivered with a copy of the Registrant's latest
annual report to shareholders for such series, when such annual report is issued
containing information called for by Item 5A of Form N-1A, upon request and
without charge.

11
<PAGE>

NOTICE

A copy of the Agreement and Declaration of Trust of SEI Institutional
Investments Trust is on file with the Secretary of State of The Commonwealth of
Massachusetts and notice is hereby given that this Registration Statement has
been executed on behalf of the Trust by an officer of the Trust as an officer
and by its Trustees as trustees and not individually and the obligations of or
arising out of this Registration Statement are not binding upon any of the
Trustees, Officers, or Shareholders individually but are binding only upon the
assets and property of the Trust.

12
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, the Registrant has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Wayne in the Commonwealth of Pennsylvania on the
10th day of March, 1995.

SEI INSTITUTIONAL INVESTMENTS TRUST

By: /s/ Kevin P. Robins
----------------------
Kevin P. Robins

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacity on the date(s) indicated.

/s/ Kevin P. Robins Sole Trustee, Controller, March 10, 1995
- - ----------------------- President Chief
Kevin P. Robins Executive Officer

13
<PAGE>

Exhibit Index

Exhibit Page
- - ------- ----

99.B1 Declaration of Trust.*
99.B2 Bylaws.*

* Filed herewith.

<PAGE>

AGREEMENT AND DECLARATION OF TRUST

SEI INSTITUTIONAL INVESTMENTS TRUST

AGREEMENT AND DECLARATION OF TRUST dated as of the 1st day of March, 1995,
by Kevin P. Robins, the Trustee hereunder, and by the holders of Shares of
beneficial interest to be issued hereunder as hereinafter provided.

WITNESSETH that

WHEREAS, this Trust has been formed to carry on the business of an
investment company; and

WHEREAS, the Trustee and any successor Trustees elected in accordance with
Article IV hereof have agreed to manage all property coming into their hands as
trustees of a Massachusetts voluntary association with transferable Shares in
accordance with the provisions hereinafter set forth.

NOW, THEREFORE, the Trustee and any successor Trustees elected in
accordance with Article IV hereof hereby declare that they will hold all cash,
securities and other assets, which they may from time to time acquire in any
manner as Trustees hereunder IN TRUST to manage and dispose of the same for the
pro rata benefit of the holders from time to time of Shares in this Trust issued
hereunder on the terms and conditions hereinafter set forth.

ARTICLE I
Name, Principal Place of Business and Resident Agent, and Definitions

Name
- - ----

Section 1. This Trust shall be known as the SEI Institutional Investments
---------
Trust, and the Trustees shall conduct the business of the Trust under that name
or any other name as they may from time to time determine.

Principal Place of Business and Resident Agent
- - ----------------------------------------------

Section 2. The principal place of business of the Trust is c/o CT
---------
Corporation System, 2 Oliver Street, Boston, MA 02109. The name of the Trust's
resident agent in the Commonwealth of Massachusetts is CT Corporation System at
2 Oliver Street, Boston, Massachusetts 02109.

Definitions
- - -----------

Section 3. Whenever used herein, unless otherwise required by the context
---------
or
<PAGE>

specifically provided:

(a) The "Trust" refers to the SEI Institutional Investments Trust, the
trust created hereby.

(b) "Trustee" or "Trustees" refers to the Trustees of the Trust named
herein or elected in accordance with Article IV hereof and then in
office.

(c) "Shares" refers to units of beneficial interest in the assets of the
Trust, when used in relation to any particular series established by
the Trustees hereunder refers to units of beneficial interest in the
assets specifically allocated to that series, and includes fractional
as well as whole Shares.

(d) "Shareholder" means a record owner of Shares.

(e) "Affiliated Person," "Assignment," "Commission," "Interested Person,"
and "Principal Underwriter" shall have the meanings given them in the
1940 Act.

(f) "Majority Shareholder Vote" shall have the same meaning as "vote of a
majority of the outstanding voting securities" as that phrase is
defined in the 1940 Act, except that such term may be used herein with
respect to the Shares of the Trust as a whole or the Shares of a
particular series, as the context may require.

(g) "Declaration of Trust" shall mean this Agreement and Declaration of
Trust, as amended or restated from time to time, provided that
reference made in this Agreement and Declaration of Trust to "hereby,"
"hereof," "herein," "hereunder" or similar terms shall be deemed to
refer to this Declaration of Trust rather than the Article or Section
in which such words appear, unless the context otherwise requires.

(h) "By-Laws" shall mean the By-Laws of the Trust referred to in Article
IV, Section 4 hereof, as amended from time to time.

(i) The "1940 Act" refers to the Investment Company Act of 1940 and the
Rules and Regulations thereunder, all as amended from time to time.

(j) "Disinterested Trustees" shall mean Trustees who are not "interested
persons" as such term is defined in the 1940 Act (including any
Trustee who has been exempted from being an "interested person" by any
rule, regulation or order of the Commission). In limitation of the
foregoing, however, as used in Article VIII hereof, a "Disinterested
Trustee" shall mean a Disinterested Trustee against whom, at the time
of the votes to be taken pursuant to said Article VIII, none of the
actions, suits or other proceedings referred to in such Article

2
<PAGE>

VIII, nor any other action, suit or other proceeding on the same or
similar grounds is or has been pending.

ARTICLE II
Purpose

The purpose of the Trust is to provide investors with one or more
investment portfolio(s) consisting primarily of securities, including debt
instruments or obligations.

ARTICLE III
Shares

Division of Beneficial Interest
- - -------------------------------

Section 1. The Trustees may divide the beneficial interest in the Trust
---------
into an unlimited number of Shares and authorize the issuance of Shares without
prior Shareholder approval. Shares may be issued in series and, if so, Shares
of any series will constitute units of beneficial interest in assets of the
Trust specifically allocated to such series. Shares of the Trust, or any series
thereof, shall have no par value, shall represent equal and proportionate
interests in the Trust, or such series, with none having priority or preference
over any other except as specifically set forth in this Article III, and shall
be transferable. All Shares issued hereunder, including any Shares issued in
payment of dividends or other distributions or in connection with any split of
Shares, shall be fully paid and non-assessable. Shares of the Trust or of any
series may be issued in two or more classes, as the Trustees may, without
Shareholder approval, authorize, and Shares of any class shall be identical to
those of any other class of the Trust or such series except that, if the
Trustees have authorized the issuance of Shares of any particular series in two
or more classes, then such classes may, consistent with the 1940 Act, or
pursuant to any exemptive order issued by the Commission and other applicable
law, have such variations as to dividends, redemption charges, conversion,
voting rights, net asset value, expenses borne by the class, and other matters
as the Trustees shall have determined. The Trustees may from time to time,
without Shareholder approval, divide or combine the Shares of a series into a
greater or lesser number without thereby changing their proportionate beneficial
interests in assets allocated to such series.

Ownership of Shares
- - -------------------

Section 2. The ownership of Shares shall be recorded on the books of the
---------
Trust or its transfer or similar agent. No certificates certifying the
ownership of Shares shall be issued except as the Trustees may otherwise
determine from time to time. The Trustees may make such rules as they consider
appropriate for the issuance of Share certificates, the transfer of Shares and
similar matters. The record books of the Trust as kept by the Trust or any

3
<PAGE>

transfer or similar agent of the Trust, as the case may be, shall be conclusive
as to who are the Shareholders of each series or class and as to the number of
Shares of each series or class held from time to time by each Shareholder.

Investments in the Trust; Assets of the Series
- - -----------------------------------------------

Section 3. The Trustees may accept investments in the Trust from such
---------
persons and on such terms and, subject to any requirements of law, for such
consideration, which may consist of cash or tangible or intangible property or a
combination thereof, as they may from time to time authorize.

All consideration received by the Trust for the issue or sale of Shares of
each series, together with all income, earnings, profits, and proceeds thereof,
including any proceeds derived from the sale, exchange or liquidation thereof,
and any funds or payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall irrevocably belong to the series of Shares
with respect to which the same were received by the Trust for all purposes,
subject only to the rights of creditors, and shall be so recorded upon the books
of account of the Trust and are herein referred to as "assets of" such series.
In addition, any assets, income, earnings, profits, and proceeds thereof, funds,
or payments which are not readily identifiable as belonging to any particular
series shall be allocated by the Trustees between and among one or more of the
series in such manner as they, in their sole discretion, deem fair and
equitable. Each such allocation to any series shall be conclusive and binding
upon the Shareholders of all series for all purposes, and shall be referred to
as assets belonging to that series. No holder of Shares of any particular
series shall have any claim on or right to any assets allocated or belonging to
any other series.

Establishment of Class or Series
- - --------------------------------

Section 4. The establishment and designation of any class or series of
---------
Shares shall be effective upon the adoption of a resolution by a majority of the
Trustees (or of a committee thereof) setting forth such establishment and
designation and the relative rights and preferences of the Shares of such class
or series. Such establishment and designation shall not constitute an amendment
to this Declaration of Trust, although the Trustees may, at their option, set
forth such establishment and designation in a written instrument signed by them
or by an officer of the Trust. The Trustees (or a committee thereof) may by
majority vote amend such establishment and designation. At any time, if no
Shares are outstanding of a particular class or series previously so established
and designated, the Trustees (or a committee thereof) may by majority vote
abolish such class or series and said establishment and designation thereof.

No Preemptive Rights
- - --------------------

Section 5. Shareholders shall have no preemptive or other right to
---------
receive, purchase or subscribe for any additional Shares or other securities
issued by the Trust, except as

4
<PAGE>

otherwise provided herein or as the Trustees in their sole discretion shall have
determined by resolution.

Status of Shares and Limitation of Personal Liability
- - -----------------------------------------------------

Section 6. Shares shall be deemed to be personal property giving only the
---------
rights provided in this instrument. Every Shareholder by virtue of having
become a Shareholder shall be held to have expressly assented and agreed to the
terms of this Declaration of Trust and to have become a party hereto. The death
of a Shareholder during the continuance of the Trust shall not operate to
terminate the same nor entitle the representative of any deceased Shareholder to
an accounting or to take any action in court or elsewhere against the Trust or
the Trustees, but only to the rights of said decedent under this Trust.
Ownership of Shares shall not entitle the Shareholder to any title in or to the
whole or any part of the Trust property or right to call for a partition or
division of the same or for an accounting, nor shall the ownership of Shares
constitute the Shareholders partners. Neither the Trust nor the Trustees, nor
any officer, employee or agent of the Trust shall have any power to bind
personally any Shareholder, nor, except as specifically provided herein, to call
upon any Shareholder for the payment of any sum of money or assessment
whatsoever other than such as the Shareholder may at any time personally agree
to pay.

Trustees and Officers as Shareholders
- - -------------------------------------

Section 7. Any Trustee, officer or other agent of the Trust may acquire,
---------
own and dispose of Shares of the Trust to the same extent as if he or she were
not a Trustee, officer or agent; and the Trustees may issue and sell or cause to
be issued and sold Shares to and buy such Shares from any such person of any
firm or company in which he is interested, subject only to the general
limitations herein contained as to the sale and purchase of such Shares; and all
subject to any restrictions which may be contained in the By-Laws.

ARTICLE IV
The Trustees

Qualification; Number of Trustees; Election
- - -------------------------------------------

Section 1. Each Trustee shall be a natural person and may, but need not,
---------
be a Shareholder. A Trustee may be elected either by the Trustees or the
Shareholders subject to the limitations of the 1940 Act. Each Trustee shall
hold office during the lifetime of this Trust until the election and
qualification of his or her successor, or until he or she sooner dies, resigns
or is removed. The initial Trustee shall be Kevin P. Robins. The number of
Trustees shall be fixed from time to time by a vote of a majority of the
Trustees then in office, except that, commencing with the first Shareholders'
meeting at which Trustees are elected, there shall be not fewer than three nor
more than fifteen Trustees. The number of

5
<PAGE>

Trustees so fixed may be increased either by the Shareholders or by the Trustees
by a vote of a majority of the Trustees then in office. The number of Trustees
so fixed may be decreased either by the Shareholders or by the Trustees by vote
of a majority of the Trustees then in office, but only to eliminate vacancies
existing by reason of the death, resignation or removal of one or more Trustees.

In case of the declination, death, resignation, retirement, removal,
incapacity, or inability of any of the Trustees, or in case a vacancy shall
exist by reason of an increase in number, or for any other reason, the remaining
Trustees shall fill such vacancy by appointing such other person as they in
their discretion shall see fit consistent with the 1940 Act. Until any such
vacancy is filled as provided in this Section 1, the Trustees then in office
shall, regardless of their number, have all powers granted to and discharge all
duties imposed on the Trustees hereby. Such appointment shall be evidenced by a
written instrument signed by a majority of the Trustees in office, even though
less than a quorum, or by recording in the records of the Trust, and shall take
effect upon such signing or recording and the acceptance of such appointment by
the Trustee so appointed. An appointment of a Trustee may be made by the
Trustees then in office in anticipation of a vacancy to occur by reason of
retirement, resignation or increase in number of Trustees effective at a later
date, provided that said appointment shall become effective only at or after the
effective date of said retirement, resignation or increase in number of
Trustees.

Removal and Resignation
- - -----------------------

Section 2. By vote of the Shareholders holding a majority of the shares
---------
entitled to vote, the Shareholders may remove a Trustee with or without cause.
By vote of a majority of the Trustees then in office, the Trustees may remove a
Trustee with or without cause. Any Trustee may resign at any time by written
instrument signed by him or her and delivered to any officer of the Trust, to
each other Trustee or to a meeting of the Trustees. Such resignation shall be
effective upon receipt unless specified to be effective at some other time.
Except to the extent expressly provided in a written agreement with the Trust,
no Trustee resigning and no Trustee removed shall have any right to any
compensation for any period following his or her resignation or removal, or any
right to damages on account of such removal.

Effect of Death, Resignation, Etc. of a Trustee
- - -----------------------------------------------

Section 3. The death, declination, resignation, retirement, removal, or
---------
incapacity of the Trustees, or any one of them, shall not operate to annul the
Trust or to revoke any existing agency created pursuant to the terms of this
Declaration of Trust.

Powers
- - ------

Section 4. Subject to the provisions of this Declaration of Trust, the
---------
Trustees shall manage the business of the Trust as an investment company, and
they shall have all powers

6
<PAGE>

necessary or convenient to carry out that responsibility. Without limiting the
foregoing, the Trustees may adopt By-Laws not inconsistent with this Declaration
of Trust providing for the conduct of the business of the Trust and may amend
and repeal them to the extent that such By-Laws do not reserve that right to the
Shareholders; they may fill vacancies in their number, including vacancies
resulting from increases in their number, and may elect and remove such officers
and appoint and terminate such agents as they consider appropriate; they may
appoint from their own number, and terminate, any one or more committees
consisting of two or more Trustees, including an executive committee which may,
when the Trustees are not in session, exercise some or all of the powers and
authority of the Trustees as the Trustees may determine; they may appoint an
advisory board, the members of which shall not be Trustees and need not be
Shareholders; they may employ one or more investment advisers or administrators
as provided in Section 9 of this Article IV; they may employ one or more
custodians of the assets of the trust and may authorize such custodians to
employ subcustodians and to deposit all or any part of such assets in a system
or systems for the central handling of securities, retain a transfer agent or a
Shareholder servicing agent, or both, provide for the distribution of Shares by
the Trust, through one or more principal underwriters or otherwise, set record
dates for the determination of Shareholders with respect to various matters, and
in general delegate such authority as they consider desirable to any officer of
the Trust, to any committee of the Trustees and to any agent or employee of the
Trust or to any such custodian or underwriter; and they may elect and remove
such officers and appoint and terminate such agents as they consider
appropriate.

Without limiting the foregoing, the Trustees shall have power and
authority:

(a) To invest and reinvest cash, and to hold cash uninvested;

(b) To sell, exchange, lend, pledge, mortgage, hypothecate, write options
on and lease any or all of the assets of the Trust;

(c) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property, and to execute and
deliver proxies or powers of attorney to such person or persons as the
Trustees shall deem proper, granting to such person or persons such
power and discretion with relation to securities or property as the
Trustees shall deem proper;

(d) To exercise powers and rights of subscription or otherwise which in
any manner arise out of ownership of securities;

(e) To hold any security or property in a form not indicating any trust,
whether in bearer, unregistered or other negotiable form, or in the
name of the Trustees or of the Trust or in the name of a custodian,
subcustodian or other depositary or a nominee or nominees or
otherwise;

(f) To establish separate and distinct series of shares with separately
defined

7
<PAGE>

investment objectives, policies and purposes, and with separately
defined relative powers, rights, privileges and liabilities, and to
allocate assets, liabilities and expenses of the Trust to a particular
series of Shares or to apportion the same among two or more series,
provided that any liability or expense determined by the Trustees to
have been incurred by a particular series of Shares shall be payable
solely out of the assets of that series and to establish separate
classes of shares of each series, all in accordance with Article III
hereof;

(g) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or issuer, any security or
property which is or was held in the Trust; to consent to any
contract, lease, mortgage, purchase or sale of property by such
corporation or issuer, and to pay calls or subscriptions with respect
to any security held in the Trust;

(h) To join with other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection to
deposit any security with, or transfer any security to, any such
committee, depositary or trustee, and to delegate to them such power
and authority with relation to any security (whether or not so
deposited or transferred) as the Trustees shall deem proper, and to
agree to pay, and to pay, such portion of the expenses and
compensation of such committee, depositary or trustee as the Trustees
shall deem proper;

(i) To compromise, arbitrate or otherwise adjust claims in favor of or
against the Trust or any matter in controversy, including but not
limited to claims for taxes;

(j) To enter into joint ventures, general or limited partnerships and any
other combinations or associations;

(k) To borrow funds;

(l) To endorse or guarantee the payment of any notes or other obligations
of any person; to make contracts of guaranty or suretyship, or
otherwise assume liability for payment thereof; and to mortgage and
pledge the Trust property or any part thereof to secure any or all of
such obligations;

(m) To purchase and pay for entirely out of Trust property such insurance
as they may deem necessary or appropriate for the conduct of the
business, including, without limitation, insurance policies insuring
the assets of the Trust and payment of distributions and principal on
its portfolio investments, and insurance policies insuring the
Shareholders, Trustees, officers, employees, agents, investment
advisers or administrators, principal underwriters, or independent
contractors of the Trust individually against all claims and

8
<PAGE>

liabilities of every nature arising by reason of holding, being or
having held any such office or position, or by reason of any action
alleged to have been taken or omitted by any such person as
Shareholder, Trustee, officer, employee, agent, investment adviser or
administrator, principal underwriter, or independent contractor,
including any action taken or omitted that may be determined to
constitute negligence, whether or not the Trust would have the power
to indemnify such person against such liability;

(n) To pay pensions for faithful service, as deemed appropriate by the
Trustees, and to adopt, establish and carry out pension, profit-
sharing, share bonus, share purchase, savings, thrift and other
retirement, incentive and benefit plans, trusts and provisions,
including the purchasing of life insurance and annuity contracts as a
means of providing such retirement and other benefits, for any or all
of the Trustees, officers, employees and agents of the Trust;

(o) To establish, from time to time, a minimum total investment for
Shareholders, and to require the redemption of the Shares of any
Shareholders whose investment is less than such minimum upon giving
notice to such Shareholder;

(p) To enter into contracts of any kind and description;

(q) To name, or to change the name or designation of the Trust or any
series or class of the Trust;

(r) To take whatever action may be necessary to enable the Trust to comply
with any applicable Federal, state or local statute, rule or
regulation; and

(s) To engage in any other lawful act or activity in which corporations
organized under the Massachusetts Business Corporation Law may engage.

The Trustees shall not in any way be bound or limited by any present or
future law or custom in regard to investments by Trustees.

Manner of Acting
- - ----------------

Section 5. Except as otherwise provided herein or from time to time in the
---------
By-Laws, any action to be taken by the Trustees, or a committee thereof, may be
taken by a majority of the Trustees present at a meeting of Trustees, or of the
committee members present at a meeting of such committee (if in either case a
quorum be present), within or without Massachusetts, including any meeting held
by means of a conference telephone or other communications equipment by means of
which all persons participating in the meeting can communicate with each other
simultaneously and participation by such means shall constitute presence in
person at a meeting, or by written consent of a majority of the Trustees, or
members of such committee, then in office. At any meeting of the Trustees, or a
committee

9
<PAGE>

thereof, a majority of the trustees or members of such committee, as the case
may be, shall constitute a quorum. If a quorum is present when a duly called or
held meeting is convened, the Trustees present thereat may, following the
withdrawal of one or more Trustees originally present, continue to transact
business until adjournment thereof, even though such Trustees would not
otherwise constitute a quorum. Meetings of the Trustees, or a committee
thereof, may be called orally or in writing by the Chairman of the Trustees or
of such committee or by any two other Trustees or committee members, as the case
may be. Notice of the time, date and place of all meeting of the Trustees, or a
committee thereof, shall be given to each Trustee or committee member as
provided in the By-Laws.

Notice of any meeting need not be given to any Trustee (or committee
member) who attends that meeting without objecting to the lack of notice or who
executes a written waiver of notice with respect to the meeting. Subject to the
requirements of the 1940 Act, the Trustees by majority vote may delegate to any
one of their number the authority to approve particular matters or take
particular actions on behalf of the Trust.

Payment of Expenses by the Trust
- - --------------------------------

Section 6. The Trustees are authorized to pay or to cause to be paid out
---------
of the principal or income of the Trust, or partly out of principal and partly
out of income, as they deem fair, all expenses, fees, charges, taxes and
liabilities incurred or arising in connection with the Trust, or in connection
with the management thereof, including, but not limited to, the Trustees'
compensation, as authorized pursuant to Article VII, Section 1 hereof, and
reimbursement for expenses and disbursements and such expenses and charges for
the services of the Trust's officers, employees, investment adviser or
administrator, principal underwriter, auditor, counsel, custodian, transfer
agent, Shareholder servicing agent, and such other agents or independent
contractors and such other expenses and charges as the Trustees may deem
necessary or proper to incur, provided, however, that all expenses, fees,
--------
charges, taxes and liabilities incurred or arising in connection with a
particular series of Shares or class as determined by the Trustees consistent
with applicable law, shall be payable solely out of the assets of that series or
class. Any general liabilities, expenses, costs, charges or reserves of the
Trust which are not readily identifiable as belonging to any particular series
shall be allocated and charged by the Trustees between or among any one or more
of the series in such manner as the Trustees in their sole discretion deem fair
and equitable. Each such allocation shall be conclusive and binding upon the
Shareholders of all series for all purposes. Any creditor of any series may
look only to the assets of that series to satisfy such creditor's debt.

Section 7. The Trustees shall have the power, as frequently as they may
---------
determine, to cause each Shareholder to pay directly, in advance or arrears, for
any and all expenses of the Trust, an amount fixed from time to time by the
Trustees, by setting off such charges due from such Shareholder from declared
but unpaid dividends owed such Shareholder and/or by reducing the number of
Shares in the account of such Shareholder by that number of full and/or
fractional Shares which represents the outstanding amount of such charges due
from

10
<PAGE>

such Shareholder.

Ownership of Assets of the Trust
- - --------------------------------

Section 8. Title to all of the assets of each series of Shares and the
---------
Trust shall at all times be considered as vested in the Trustees as joint
tenants. The right, title and interest of the Trustees in such assets shall
vest automatically in each person who may hereafter become a Trustee, and upon
any Trustees' death, resignation or removal, such Trustee shall automatically
cease to have any right, title or interest in such assets. Vesting and
cessation of title as set forth in this Section 8 shall be effective
notwithstanding the absence of execution and delivery of any conveyancing
documents.

Advisory, Administration and Distribution
- - -----------------------------------------

Section 9. The Trustees may, at any time and from time to time, contract
---------
with respect to the Trust or any series thereof for exclusive or nonexclusive
advisory and/or administration services with SEI Financial Management
Corporation, a Delaware corporation, and/or any other corporation, trust,
association or other organization, every such contract to comply with such
requirements and restrictions as may be set forth in the By-Laws; and any such
contract may contain such other terms interpretive of or in addition to said
requirements and restrictions as the Trustees may determine, including, without
limitation, in the case of a contract for advisory or sub-advisory services,
authority to determine from time to time what investments shall be purchased,
held, sold or exchanged and what portion, if any, of the assets of the Trust or
any series thereof shall be held uninvested and to make changes in the
investments of the Trust or any series thereof. Any contract for advisory
services shall be subject to such Shareholder approval as is required by the
1940 Act. The Trustees may also, at any time and from time to time, contract
with SEI Financial Services Company, a Pennsylvania corporation, and/or any
other corporation, trust, association or other organization, appointing it
exclusive or nonexclusive distributor or principal underwriter for the Shares,
every such contract to comply with such requirements and restrictions as may be
set forth in the By-Laws, and any such contract may contain such other terms
interpretive of or in addition to said requirements and restrictions as the
Trustees may determine.

The fact that:

(i) any of the Shareholders, Trustees or officers of the Trust is a
shareholder, director, officer, partner, trustee, employee,
administrator, adviser, principal underwriter, or distributor or agent
of or for any corporation, trust, association, or other organization,
or of or for any parent or affiliate of any organization, with which
an advisory or administration or principal underwriter's or
distributor's contract, or transfer, Shareholder servicing or other
agency contract may have been or may hereafter be made, or that any
such organization, or any parent or affiliate thereof, is a
Shareholder or has an interest in the Trust, or that

11
<PAGE>

(ii) any corporation, trust, association or other organization with which
an advisory or administration or principal underwriter's or
distributor's contract, or transfer, Shareholder servicing or other
agency contract may have been or may hereafter be made also has an
advisory or administration contract, or principal underwriter's or
distributor's contract, or transfer, Shareholder servicing or other
agency contract with one or more other corporations, trusts,
associations, or other organizations, or has other businesses or
interests

shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing the
same or create any liability or accountability to the Trust or its Shareholders.

ARTICLE V
Shareholders' Voting Powers and Meetings

The Shareholders shall have power to vote only (i) for the election or
removal of Trustees as provided in Article IV, Section 1 hereof, (ii) with
respect to any investment adviser as provided in Article IV, Section 7 hereof,
(iii) with respect to any termination of the Trust or any series or class to the
extent and as provided in Article IX, Section 4 hereof, (iv) with respect to any
amendment of this Declaration of Trust to the extent and as provided in Article
IX, Section 7 hereof, (v) to the same extent as the stockholders of a
Massachusetts business corporation as to whether or not a court action,
proceeding or claim should or should not be brought or maintained derivatively
or as a class action on behalf of the Trust or the Shareholders, (vi) with
respect to any merger, consolidation, sale of assets, or incorporation of the
Trust or any series to the extent and as provided in Article IX, Sections 6 and
7 hereof, and (vii) with respect to such additional matters relating to the
Trust as may be required by law, by this Declaration of Trust, by the By-Laws or
by any registration of the Trust with the Securities and Exchange Commission or
any state, or as the Trustees may consider necessary or desirable.
Notwithstanding any other provisions of this Declaration of Trust, on any matter
submitted to a vote of Shareholders, all Shares of the Trust then entitled to
vote shall be voted by individual series or class, except that (1) when so
required by the 1940 Act, then Shares shall be voted in the aggregate and not by
individual series or class, and (2) when the Trustees have determined that the
matter affects only the interests of one or more series or class, then only
Shareholders of such series or class(es) shall be entitled to vote thereon. The
Shareholders may hold meetings and take action as provided in the By-Laws,
subject to the requirements of the 1940 Act where applicable. Until Shares are
issued, the Trustees may exercise all rights of Shareholders and may take any
action required by law, this Declaration of Trust or the By-Laws to be taken by
Shareholders.

ARTICLE VI
Distributions, Redemptions, Repurchases
and Determination of Net Asset Value

12
<PAGE>

Distributions
- - -------------

Section 1. The Trustees may, but need not, distribute from time to time to
---------
the Shareholders of each series such income and gains, accrued or realized, as
the Trustees may determine, after providing for actual and accrued expenses and
liabilities (including such reserves as the Trustees may establish) determined
in accordance with good accounting practices. The Trustees shall have full
discretion to determine which items shall be treated as income and which items
as capital and their determination shall be binding upon the Shareholders.
Distributions of each year's income of each series, if any be made, may be made
in one or more payments, which shall be in Shares, in cash or otherwise and on a
date or dates determined by the Trustees. At any time and from time to time in
their discretion, the Trustees may distribute to the Shareholders of any one or
more series as of a record date or dates determined by the Trustees, in Shares,
in cash or otherwise, all or part of any gains realized on the sale or
disposition of property of the series or otherwise, or all or part of any other
principal of the Trust attributable to the series. Each distribution pursuant
to this Section 1 shall be made ratably according to the number of Shares of the
series or class held by the several Shareholders on the applicable record date
thereof, provided that no distributions need be made on Shares purchased
pursuant to orders received, or for which payment is made, after such time or
times as the Trustees may determine. Any such distribution paid in Shares will
be paid at the net asset value thereof as determined in accordance with this
Declaration of Trust.

Redemptions and Repurchases
- - ---------------------------

Section 2. Any holder of Shares of the Trust may, by presentation of a
---------
written request, together with his or her certificates, if any, for such Shares,
in proper form for transfer, at the office of the Trust, the adviser, the
underwriter or the distributors, or at a principal office of a transfer or
Shareholder services agent appointed by the Trust (as the Trustees may
determine), or in accordance with such other procedures for redemption as the
Trustees may from time to time authorize, redeem his or her Shares in accordance
with the provisions of this Section 2 for the net asset value thereof determined
and computed in accordance with the By-Laws, less any redemption charge the
Trustees may establish including any contingent deferred sales charge to which
redemption of such Shares may be subject. Upon receipt of such written request
for redemption of Shares by the Trust, the adviser, the underwriter or the
distributor, or the Trust's transfer or Shareholder services agent, the Trust
shall purchase such Shares and shall pay therefor the net asset value thereof
next determined after such receipt or, in the case of Shares for which
certificates have been issued, the net asset value thereof next determined after
such Shares are tendered in proper form for transfer to the Trust or, in either
case, the net asset value thereof determined as of such other time fixed by the
Trustees, as may be permitted or required by the 1940 Act.

The obligation of the Trust to redeem its Shares as set forth in this
Section 2 shall be subject to the condition that, during any time of emergency,
as hereinafter defined, such

13
<PAGE>

obligation may be suspended by the Trust by or under authority of the Trustees
for such period or periods during such time of emergency as shall be determined
by or under authority of the Trustees. If there is such a suspension, any
Shareholder may withdraw any demand for redemption and any tender of Shares
which has been received by the Trust during any such period and any tender of
Shares the applicable net asset value of which would but for such suspension be
calculated as of a time during such period. Upon such withdrawal, the Trust
shall return to the Shareholder the certificates therefor, if any. Shareholders
who do not so withdraw any such demand shall receive payment based on the net
asset value next determined after the termination of such suspension. For the
purposes of any such suspension "time of emergency" shall mean, either with
respect to all Shares or any series of Shares, as appropriate, any period during
which:

(a) the New York Stock Exchange is closed other than for customary weekend
and holiday closings; or

(b) the Trustees or authorized officers of the Trust shall have
determined, in compliance with any applicable rules and regulations or
orders of the Commission, either that trading on the New York Stock
Exchange is restricted, or that an emergency exists as a result of
which (i) disposal by the Trust of securities owned by it is not
reasonably practicable or (ii) it is not reasonably practicable for
the Trust fairly to determine the current value of the net assets of
the Trust or of a series; or

The Trust may also purchase, repurchase or redeem Shares in accordance with
such other methods, upon such other terms and subject to such other conditions
as the Trustees may from time to time authorize at a price not exceeding the net
asset value of such Shares in effect when the purchase or repurchase or any
contract to purchase or repurchase is made.

Payment in Kind
- - ---------------

Section 3. Subject to any generally applicable limitation imposed by the
---------
Trustees, any payment on redemption, purchase or repurchase by the Trust of
Shares may, if authorized by the Trustees, be made wholly or partly in kind,
instead of in cash. Such payment in kind shall be made by distributing
securities or other property, constituting, in the opinion of the Trustees, a
fair representation of the various types of securities and other property then
held by the series of Shares being redeemed, purchased or repurchased (but not
necessarily involving a portion of each of that series' holdings) and taken at
their value used in determining the net asset value of the Shares in respect of
which payment is made.

Additional Provisions Relating to Redemptions and Repurchases
- - -------------------------------------------------------------

14
<PAGE>

Section 4. The completion of redemption, purchase or repurchase of Shares
---------
shall constitute a full discharge of the Trust and the Trustees with respect to
such Shares and the Trustees may require that any certificate or certificates
issued by the Trust to evidence the ownership of such Shares shall be
surrendered to the Trustees for cancellation or notation.

Assets Available for Dividends, Distributions, Redemptions and Repurchases
- - --------------------------------------------------------------------------

Section 5. No dividend or distribution (including, without limitation, any
---------
distribution paid upon termination of the Trust or of any series) with respect
to, nor any redemption or repurchase of, the Shares of any series shall be
effected by the Trust other than from the assets of such series.

Redemptions at the Option of the Trust
- - --------------------------------------

Section 6. The Trustees shall have the power at any time to redeem Shares,
---------
of any class of any series, of a Shareholder at a redemption price determined in
accordance with the provisions of Section 2 of this Article if at such time the
aggregate net asset value of the Shares of that class of that series in such
Shareholder's account is less than the minimum investment amount established by
the Trustees for that class of that series. A Shareholder shall be notified
prior to any such redemption and shall be allowed [60 days] to make additional
investments in Shares of that class of that series before such redemption is
effected.

ARTICLE VII
Compensation and Limitation
of Liability of Trustees

Compensation
- - ------------

Section 1. The Trustees as such shall be entitled to reasonable
---------
compensation from the Trust; they may fix the amount of their compensation.
Nothing herein shall in any way prevent the employment of any Trustee for
advisory, administration, legal, accounting, investment banking or other
services and payment for the same by the Trust.

Limitation of Liability
- - -----------------------

Section 2. The Trustees shall not be responsible or liable in any event
---------
for any neglect or wrongdoing of any officer, agent, employee, investment
adviser or administrator, principal underwriter or custodian, nor shall any
Trustee be responsible for the act or omission of any other Trustee, but nothing
herein contained shall protect any Trustee against any liability to which he or
she would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
his or her office.

15
<PAGE>

Every note, bond, contract, instrument, certificate, Share or undertaking
and every other act or thing whatsoever executed or done by or on behalf of the
Trust or the Trustees or any of them in connection with the Trust shall be
conclusively deemed to have been executed or done only in or with respect to
their or his or her capacity as Trustees or Trustee, and such Trustees or
Trustee shall not be personally liable thereon.

ARTICLE VIII
Indemnification

Subject to the exceptions and limitations contained in this Article, every
person who is, or has been, a Trustee or officer of the Trust shall be
indemnified by the Trust to the fullest extent permitted by law against
liability and against all expenses reasonably incurred or paid by him in
connection with any claim, action, suit or proceeding in which he becomes
involved as a party or otherwise by virtue of his being or having been a Trustee
or officer and against amounts paid or incurred by him in settlement thereof.

No indemnification shall be provided hereunder to a Trustee or officer:

(a) against any liability to the Trust or its Shareholders by reason of a
final adjudication by the court or other body before which the
proceeding was brought that he engaged in willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved
in the conduct of his office;

(b) with respect to any matter as to which he shall have been finally
adjudicated not to have acted in good faith in the reasonable belief
that his action was in the best interests of the Trust;

(c) in the event of a settlement or other disposition not involving a
final adjudication (as provided in paragraph (a) or (b)) and resulting
in a payment by a Trustee or officer, unless there has been either a
determination that such Trustee or officer did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office by the court or other
body approving the settlement or other disposition or a reasonable
determination, based on a review of readily available facts (as
opposed to a full trial-type inquiry) that he did not engage in such
conduct:

(i) by a vote of a majority of the Disinterested Trustees acting on
the matter (provided that a majority of the Disinterested
Trustees then in office act on the matter); or

(ii) by written opinion of independent legal counsel.

16
<PAGE>

The rights of indemnification hereinafter provided may be insured against
by policies maintained by the Trust, shall be severable, shall not affect any
other rights to which any Trustee or officer may now or hereafter be entitled,
shall continue as to a person who has ceased to be such Trustee or officer and
shall inure to the benefit of the heirs, executors and administrators of such a
person. Nothing contained herein shall affect any rights to indemnification to
which Trust personnel other than Trustees and officers may be entitled by
contract or otherwise under law.

Expenses of preparation and presentation of a defense to any claim, action,
suit or proceeding of the character described in the next to the last paragraph
of this Article shall be advanced by the Trust prior to final disposition
thereof upon receipt of an undertaking by or on behalf of the recipient to repay
such amount if it is ultimately determined that he is not entitled to
indemnification under this Article, provided that either:

(a) such undertaking is secured by a surety bond or some other appropriate
security or the Trust shall be insured against losses arising out of
any such advances; or

(b) a majority of the Disinterested Trustees acting on the matter
(provided that a majority of the Disinterested Trustees then in office
act on the matter) or independent legal counsel in a written opinion
shall determine, based upon a review of the readily available facts
(as opposed to a full trial-type inquiry), that there is reason to
believe that the recipient ultimately will be found entitled to
indemnification.

As used in this Article, the words "claim," "action," "suit" or
"proceeding" shall apply to all claims, actions, suits or proceedings (civil,
criminal or other, including appeals), actual or threatened; and the words
"liability" and "expenses" shall include without limitation, attorney's fees,
costs, judgments, amounts paid in settlement, fines, penalties and other
liabilities.

In case any Shareholder or former Shareholder shall be held to be
personally liable solely by reason of being or having been a shareholder and not
because of acts or omissions or for some other reason, the shareholder or former
Shareholder (or his or her heirs, executors, administrators or other legal
representatives or in the case of a corporation or other entity, its corporate
or other general successor) shall be entitled to be held harmless from and
indemnified against all loss and expenses arising from such liability, but only
out of the assets of the particular series of Shares of which he or she is or
was a Shareholder.

ARTICLE IX
Miscellaneous

17
<PAGE>

Trustees, Shareholders, Etc. Not Personally Liable; Notice
- - ----------------------------------------------------------

Section 1. All persons extending credit to, contracting with or having any
---------
claim against the Trust or a particular series or class of Shares shall look
only to the assets of the Trust or the assets of that particular series of
Shares for payment under such credit, contract or claim; and neither the
Shareholders nor the Trustees, nor any of the Trust's officers, employees or
agents, whether past, present or future, shall be personally liable therefor.
Nothing in this Declaration of Trust shall protect any Trustee against any
liability to which such Trustee would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of the office of Trustee.

Every note, bond, contract, instrument, certificate or undertaking made or
issued by the Trustees or by any officers or officer shall give notice that this
Declaration of Trust is on file with the Secretary of the Commonwealth of
Massachusetts and shall recite that the same was executed or made by or on
behalf of the Trust or by them as Trustees or Trustee or as officers or officer
and not individually and that the obligations of such instrument are not binding
upon any of them or the Shareholders individually but are binding only upon the
assets and property of the Trust, and may contain such further recital as he or
she or they may deem appropriate, but the omission thereof shall not operate to
bind any Trustees or Trustee or officers or officer or Shareholders or
Shareholder individually.

Trustees' Good Faith Action, Expert Advice; No Bond or Surety
- - -------------------------------------------------------------

Section 2. The exercise by the Trustees of their powers and discretion
---------
hereunder shall be binding upon everyone interested. A Trustee shall be liable
for his or her own willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of the office of Trustee, and
for nothing else, and shall not be liable for errors of judgment or mistakes of
fact or law. The Trustees may take advice of counsel or other experts with
respect to the meaning and operation of this Declaration of Trust, and shall be
under no liability for any act or omission in accordance with such advice or for
failing to follow such advice. The Trustees shall not be required to give any
bond as such, nor any surety if a bond is required.

Liability of Third Persons Dealing with Trustees
- - ------------------------------------------------

Section 3. No person dealing with the Trustees shall be bound to make any
---------
inquiry concerning the validity of any transaction made or to be made by the
Trustees or to see to the application of any payments made or property
transferred to the Trust or upon its order.

Duration and Termination of Trust
- - ---------------------------------

Section 4. Unless terminated as provided herein, the Trust shall continue
---------
without limitation of time. The Trust may be terminated at any time by vote of
Shareholders holding at least a majority of the Shares entitled to vote or by
the Trustees by written notice to the

18
<PAGE>

Shareholders. Any series of Shares may be terminated at any time by vote of
Shareholders holding at least a majority of the Shares of such series entitled
to vote or by the Trustees by written notice to the Shareholders of such series.
Upon termination of the Trust or of any one or more series of Shares, after
paying or otherwise providing for all charges, taxes, expenses and liabilities,
whether due or accrued or anticipated, of the Trust or of the particular series
as may be determined by the Trustees, the Trust shall, in accordance with such
procedures as the Trustees consider appropriate, reduce the remaining assets to
distributable form in cash or Shares or other securities, or any combination
thereof, and distribute the proceeds to the Shareholders of the series involved,
ratably according to the number of Shares of such series held by the several
Shareholders of such series on the date of termination.

Section 5. The original or a copy of this instrument and of each amendment
---------
hereto shall be kept at the office of the Trust where it may be inspected by any
Shareholder. A copy of this instrument and of each amendment hereto shall be
filed by the Trust with the Secretary of the Commonwealth of Massachusetts and
with the Boston City Clerk, as well as any other governmental office where such
filing may from time to time be required. Anyone dealing with the Trust may
rely on a certificate by an officer of the Trust as to whether or not any such
amendments have been made and as to any matters in connection with the Trust
hereunder; and, with the same effect as if it were the original, may rely on a
copy certified by an officer of the Trust to be a copy of this instrument or of
any such amendments. In this instrument and in such amendment, references to
this instrument, and the expression "herein," "hereof," and "hereunder" shall be
deemed to refer to this instrument as amended from time to time. Headings are
placed herein for convenience of reference only and shall not be taken as part
hereof or control or affect the meaning, construction or effect of this
instrument. This instrument may be executed in any number of counterparts each
of which shall be deemed an original.

Merger, Consolidation and Sale of Assets
- - ----------------------------------------

Section 6. The Trust may merge or consolidate with any other corporation,
---------
association, trust or other organization or may sell, lease or exchange all or
substantially all of the assets of the Trust (or all or substantially all of the
assets allocated or belonging to a particular series of the Trust) including its
good will, upon such terms and conditions and for such consideration when and as
authorized, at any meeting of Shareholders called for such purpose, by the vote
or written consent of the Shareholders of all series of the Trust voting as a
single class, or of the affected series of the Trust, as the case may be; and
any such merger, consolidation, sale, lease or exchange shall be deemed for all
purposes to have been accomplished under and pursuant to the statutes of the
Commonwealth of Massachusetts. Nothing contained herein shall be construed as
requiring approval of Shareholders for any sale of assets in the ordinary course
of the business of the Trust. Holders of Shares of any series or class shall
have no appraisal rights with respect to their Shares.

Incorporation, Reorganization
- - -----------------------------

19
<PAGE>

Section 7. With the approval of the Shareholders, the Trustees may cause
---------
to be organized or assist in organizing a corporation or corporations under the
laws of any jurisdiction, or any other trust, unit investment trust,
partnership, association or other organization to take over the assets of the
Trust or to carry on any business in which the Trust shall directly or
indirectly have any interest, and to sell, convey and transfer such assets to
any such corporation, trust, partnership, association or organization in
exchange for the shares or securities thereof or otherwise, and to lend money
to, subscribe for the shares or securities of, and enter into any contracts with
any such corporation, trust, partnership, association or organization in which
the Trust holds or is about to acquire shares or any other interest. Subject to
Section 6 of this Article IX, the Trustees may also cause a merger or
consolidation between the Trust or any successor thereto and any such
corporation, trust, partnership, association or other organization if and to the
extent permitted by law. Nothing contained in this Section shall be construed
as requiring approval of Shareholders for the Trustees to organize or assist in
organizing one or more corporations, trusts, partnerships, associations or other
organizations and selling, conveying or transferring a portion of the assets of
the Trust to such organization or entities.

With the approval of Shareholders of any series, the Trustees may sell,
lease or exchange all of the assets allocated or belonging to that series, or
cause to be organized or assist in organizing a corporation or corporations
under the laws of any other jurisdiction, or any other trust, unit investment
trust, partnership, association or other organization, to take over all of the
assets allocated or belonging to that series and to sell, convey or transfer
such assets to any such corporation, trust, unit investment trust, partnership,
association, or other organization in exchange for the shares or securities
thereof or otherwise.

Applicable Law
- - --------------

Section 8. The Trust shall be of the type commonly called a Massachusetts
---------
business trust, and without limiting the provisions hereof, the Trust may
exercise all powers which are ordinarily exercised by such a trust. This
Declaration of Trust is to be governed by and construed and administered
according to the laws of said Commonwealth.

Amendments
- - ----------

Section 9. This Declaration of Trust may be amended at any time by an
---------
instrument in writing signed by a majority of the then Trustees when authorized
to do so by a vote or written consent of Shareholders, except that an amendment
which shall affect the holders of one or more series or classes of Shares but
not the holders of all outstanding series or classes shall be authorized by vote
or written consent of the Shareholders of each series or classes affected and no
vote of Shareholders of a series or classes not affected shall be required.
Amendments having the purpose of changing the name of the Trust or of supplying
any omission, curing any ambiguity or curing, correcting or supplementing any
defective or inconsistent provision contained herein shall not require
authorization by Shareholder vote.

20
<PAGE>

IN WITNESS WHEREOF, the undersigned being the sole initial Trustee of the
Trust has executed this document this 1st day of March, 1995.

/s/ Kevin P. Robins
-----------------------------------
Kevin P. Robins
c/o SEI Financial Services Company
680 E. Swedesford Road
Wayne, PA 19087

COMMONWEALTH OF PENNSYLVANIA
COUNTY OF PHILADELPHIA

I, the undersigned authority, hereby certify that the foregoing is a true and
correct copy of the instrument presented to me by Kevin P. Robins as the
original of such instrument.

WITNESS my hand and official seal, this 1st day of March, 1995.

/s/ Colleen L. Stanton
------------------------------
Notary Public

My commission expires: 9/1/97
-------------

Resident Agent: CT Corporation, 2 Oliver Street, Boston, MA 02109

<PAGE>

BY-LAWS

SEI INSTUTIONAL INVESTMENTS TRUST

Section 1. Agreement and Declaration of Trust and Principal Office

1.1 Agreement and Declaration of Trust. These By-Laws shall be subject to the
-----------------------------------
Agreement and Declaration of Trust, as from time to time in effect (the
"Declaration of Trust"), of the SEI Institutional Investments Trust, a
Massachusetts business trust established by the Declaration of Trust (the
"Trust").

1.2 Principal Office of the Trust. The principal office of the Trust shall be
------------------------------
located in Boston, Massachusetts.

Section 2. Shareholders

2.1 Annual Meeting. The Trust will not hold annual meetings of the
---------------
shareholders.

2.2 Special Meetings. A special meeting of the Shareholders of the Trust or of
-----------------
any series or class may be called at any time by the Trustees, by the
President or such other person or persons as may be specified in these By-
Laws, and held from time to time for the purpose of taking action upon any
matter requiring the vote or the authority of the Shareholders of the Trust
or any series or class as herein provided or upon any other matter deemed
by the Trustees to be necessary or desirable. Written notice of any
meeting of Shareholders shall be given or caused to be given by the
Trustees by mailing such notice at least seven days before such meeting,
postage prepaid, stating the time, place and purpose of the meeting, to
each Shareholder at the Shareholder's address as it appears on the records
of the Trust. Each call of a meeting shall state the place, date, hour and
purposes of the meeting. If the Trustees shall fail to call or give notice
of any meeting of Shareholders for a period of thirty days after written
application by Shareholders holding at least 10% of the Shares then
outstanding requesting a meeting to be called for a purpose requiring
action by the Shareholders as provided herein or in the By-Laws, then
Shareholders holding at least 10% of the Shares then outstanding may call
and give notice of such meeting, and thereupon the meeting shall be held in
the manner provided for herein in case of call thereof by the Trustees.
Notice of a meeting need not be given to any Shareholder if a written
waiver of notice, executed by him or her before or after the meeting, is
filed with the records of the meeting, or to any Shareholder who attends
the meeting without protesting prior thereto or at its commencement the
lack of notice to him or her.

1
<PAGE>

2.3 Place of Meetings. All meetings of the shareholders shall be held at such
------------------
place within the United States as shall be designated by the Trustees or
the president of the Trust.

2.4 Notice of Meetings. A written notice of each meeting of shareholders,
-------------------
stating the place, date and hour and the purposes of the meeting, shall be
given at least seven days before the meeting to each shareholder entitled
to vote thereat by leaving such notice with him or at his residence or
usual place of business or by mailing it, postage prepaid, and addressed to
such shareholder at his address as it appears in the records of the Trust.
Such notice shall be given by the secretary or an assistant secretary or by
an officer designated by the Trustees. No notice of any meeting of
shareholders need be given to a shareholder if a written waiver of notice,
executed before or after the meeting by such shareholder or his attorney
thereunto duly authorized, is filed with the records of the meeting.

2.5 Voting Powers. Each whole Share shall be entitled to one vote as to any
--------------
matter on which it is entitled to vote and each fractional Share shall be
entitled to a proportionate fractional vote. There shall be no cumulative
voting in the election of Trustees. Shares may be voted in person or by
proxy.

A proxy with respect to Shares held in the name of two or more persons
shall be valid if executed by any one of them unless at or prior to the
exercise of the proxy the Trust receives a specific written notice to the
contrary from any one of them. A proxy purporting to be executed by or on
behalf of a Shareholder shall be deemed valid unless challenged at or prior
to its exercise and the burden of proving invalidity shall rest on the
challenger.

2.6 Quorum and Required Vote. A majority of the Shares entitled to vote shall
-------------------------
be a quorum for the transaction of business at a Shareholders' meeting,
except that where any provision of law or of the Declaration of Trust
permits or requires that holders of any series or class shall vote as a
series or class, then a majority of the aggregate number of Shares of that
series or class entitled to vote shall be necessary to constitute a quorum
for the transaction of business by that series or class. Any lesser
number, however, shall be sufficient for adjournments. Any adjourned
session or sessions may be held within a reasonable time after the date set
for the original meeting without the necessity of further notice.

Except when a larger vote is required by any provisions of the Declaration
of Trust or these By-Laws, a majority of the Shares voted on any matter
shall decide such matter and a plurality shall elect a Trustee, provided
that where any provision of law or of this Declaration of Trust permits or
requires that the holders of any series or class shall vote as a series or
class, then a majority of the Shares of that series or class voted on the
matter shall decide that matter insofar as that series or class is
concerned.

2.7 Ballots. No ballot shall be required for any election unless requested by
--------
a shareholder present or represented at the meeting and entitled to vote in
the election.

2
<PAGE>

2.8 Proxies. Shareholders entitled to vote may vote either in person or by
--------
proxy in writing dated not more than six months before the meeting named
therein, which proxies shall be filed with the secretary or other person
responsible to record the proceedings of the meeting before being voted.
Unless otherwise specifically limited by their terms, such proxies shall
entitle the holders thereof to vote at any adjournment of such meeting but
shall not be valid after the final adjournment of such meeting.

2.9 Action by Written Consent. Any action taken by Shareholders may be taken
--------------------------
without a meeting if a majority of Shareholders entitled to vote on the
matter (or such larger vote as shall be required by any provision of the
Declaration of Trust or these By-Laws) consent to the action in writing and
such written consents are filed with the records of the meetings of
Shareholders. Such consent shall be treated for all purposes as a vote
taken at a meeting of Shareholders.

Section 3. Trustees

3.1 Committees and Advisory Board. The Trustees may appoint from their number
------------------------------
an executive committee and other committees. Except as the Trustees may
otherwise determine, any such committee may make rules for conduct of its
business. The Trustees may appoint an advisory board to consist of not
less than two nor more than five members. The members of the advisory
board shall be compensated in such manner as the Trustees may determine and
shall confer with and advise the Trustees regarding the investments and
other affairs of the Trust. Each member of the advisory board shall hold
office until the first meeting of the Trustees following the next annual
meeting of the shareholders and until his successor is elected and
qualified, or until he sooner dies, resigns, is removed, or becomes
disqualified, or until the advisory board is sooner abolished by the
Trustees.

3.2 Regular Meetings. Regular meetings of the Trustees may be held without
-----------------
call or notice at such places and at such times as the Trustees may from
time to time determine, provided that notice of the first regular meeting
following any such determination shall be given to absent Trustees. A
regular meeting of the Trustees may be held without call or notice
immediately after and at the same place as the annual meeting of the
shareholders.

3.3 Special Meetings. Special meetings of the Trustees may be held at any time
-----------------
and at any place designated in the call of the meeting, when called by the
Chairman of the Board, the president or the treasurer or by two or more
Trustees, sufficient notice thereof being given to each Trustee by the
secretary or an assistant secretary or by the officer or one of the
Trustees calling the meeting.

3.4 Notice. It shall be sufficient notice to a Trustee to send notice by mail
-------
at least forty-eight hours or by telegram at least twenty-four hours before
the meeting addressed to the Trustee at his or her usual or last known
business or residence address or to give notice

3
<PAGE>

to him or her in person or by telephone at least twenty-four hours before
the meeting. Notice of a meeting need not be given to any Trustee if a
written waiver of notice, executed by him or her before or after the
meeting, is filed with the records of the meeting, or to any Trustee who
attends the meeting without protesting prior thereto or at its commencement
the lack of notice to him or her. Neither notice of a meeting nor a waiver
of a notice need specify the purposes of the meeting.

3.5 Quorum. At any meeting of the Trustees one-third of the Trustees then in
-------
office shall constitute a quorum; provided, however, a quorum shall not be
less than two. Any meeting may be adjourned from time to time by a
majority of the votes cast upon the question, whether or not a quorum is
present, and the meeting may be held as adjourned without further notice.

Section 4. Officers and Agents

4.1 Enumeration; Qualification. The officers of the Trust shall be a
---------------------------
president, a treasurer, a secretary and such other officers, if any, as the
Trustees from time to time may in their discretion elect or appoint. The
Trust may also have such agents, if any, as the Trustees from time to time
may in their discretion appoint. Any officer may be but none need be a
Trustee or shareholder. Any two or more offices may be held by the same
person.

4.2 Powers. Subject to the other provisions of these By-Laws, each officer
-------
shall have, in addition to the duties and powers herein and in the
Declaration of Trust set forth, such duties and powers as are commonly
incident to his or her office as if the Trust were organized as a
Massachusetts business corporation and such other duties and powers as the
Trustees may from time to time designate.

4.3 Election. The president, the treasurer and the secretary shall be elected
---------
annually by the Trustees. Other officers, if any, may be elected or
appointed by the Trustees at any time.

4.4 Tenure. The president, the treasurer and the secretary shall hold office
-------
for a one year term and until their respective successors are chosen and
qualified, or in each case until he or she sooner dies, resigns, is removed
or becomes disqualified. Each agent shall retain his or her authority at
the pleasure of the Trustees.

4.5 President and Vice Presidents. The president shall be the chief executive
------------------------------
officer of the Trust. The president shall, subject to the control of the
Trustees, have general charge and supervision of the business of the Trust.
Any vice president shall have such duties and powers as shall be designated
from time to time by the Trustees.

4.6 Chairman of the Board. If a Chairman of the Board of Trustees is elected,
----------------------
he shall have the duties and powers specified in these By-Laws and, except
as the Trustees shall otherwise determine, preside at all meetings of the
shareholders and of the Trustees at which he or she is present and have
such other duties and powers as may be determined

4
<PAGE>

by the Trustees.

4.7 Treasurer and Controller. The treasurer shall be the chief financial
-------------------------
officer of the Trust and subject to any arrangement made by the Trustees
with a bank or trust company or other organization as custodian or transfer
or shareholder services agent, shall be in charge of its valuable papers
and shall have such other duties and powers as may be designated from time
to time by the Trustees or by the president. If at any time there shall be
no controller, the treasurer shall also be the chief accounting officer of
the Trust and shall have the duties and powers prescribed the Trust and
shall have the duties and powers prescribed herein for the controller. Any
assistant treasurer shall have such duties and powers as shall be
designated from time to time by the Trustees.

The controller, if any be elected, shall be the chief accounting officer of
the Trust and shall be in charge of its books of account and accounting
records. The controller shall be responsible for preparation of financial
statements of the Trust and shall have such other duties and powers as may
be designated from time to time by the Trustees or the president.

4.8 Secretary and Assistant Secretaries. The secretary shall record all
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proceedings of the shareholders and the Trustees in books to be kept
therefor, which books shall be kept at the principal office of the Trust.
In the absence of the secretary from any meeting of shareholders or
Trustees, an assistant secretary, or if there be none or he or she is
absent, a temporary clerk chosen at the meeting shall record the
proceedings thereof in the aforesaid books.

Section 5. Resignation and Removals

Any Trustee, officer or advisory board member may resign at any time by
delivering his or her resignation in writing to the Chairman of the Board, the
president, the treasurer or the secretary or to a meeting of the Trustees. The
Trustees may remove any officer elected by them with or without cause by the
vote of a majority of the Trustees then in office. Except to the extent
expressly provided in a written agreement with the Trust, no Trustee, officer,
or advisory board member resigning, and no officer or advisory board member
removed shall have any right to any compensation for any period following his or
her resignation or removal, or any right to damages on account of such removal.

Section 6. Vacancies

A vacancy in any office may be filled at any time. Each successor shall hold
office for the unexpired term, and in the case of the president, the treasurer
and the secretary, until his or her successor is chosen and qualified, or in
each case until he or she sooner dies, resigns, is removed or becomes
disqualified.

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Section 7. Shares of Beneficial Interest

In lieu of issuing certificates for shares, the Trustees or the transfer or
shareholder services agent may either issue receipts therefor or may keep
accounts upon the books of the Trust for the record holders of such shares, who
shall in either case be deemed, for all purposes hereunder, to be the holders of
certificates for such shares as if they had accepted such certificates and shall
be held to have expressly assented and agreed to the terms hereof.

Section 8. Record Date

The Trustees may fix in advance a time, which shall not be more than 60 days
before the date of any meeting of shareholders or the date for the payment of
any dividend or making of any other distribution to shareholders, as the record
date for determining the shareholders having the right to notice and to vote at
such meeting and any adjournment thereof or the right to receive such dividend
or distribution, and in such case only shareholders of record on such record
date shall have such right, notwithstanding any transfer of shares on the books
of the Trust after the record date.

Section 9. Seal

The seal of the Trust shall, subject to alteration by the Trustees, consist of a
flat-faced circular die with the word "Massachusetts", together with the name of
the Trust and the year of its organization, cut or engraved thereon; but, unless
otherwise required by the Trustees, the seal shall not be necessary to be placed
on, and its absence shall not impair the validity of, any document, instrument
or other paper executed and delivered by or on behalf of the Trust.

Section 10. Execution of Papers

Except as the Trustees may generally or in particular cases authorize the
execution thereof in some other manner, all deeds, leases, transfers, contracts,
bonds, notes, checks, drafts and other obligations made, accepted or endorsed by
the Trust shall be signed, and any transfers of securities standing in the name
of the Trust shall be executed, by the president or by one of the vice
presidents or by the treasurer or by whomsoever else shall be designated for
that purpose by the vote of the Trustees and need not bear the seal of the
Trust.

Section 11. Fiscal Year

The fiscal year of the Trust shall end on such date in each year as the Trustees
shall from time to time determine.

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Section 12. Provisions Relating to the Conduct of the Trust's Business

12.1 Dealings with Affiliates. The Trust shall not purchase or retain
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securities issued by any issuer if one or more of the holders of the
securities of such issuer or one or more of the officers or directors of
such issuer is an officer or Trustee of the Trust or officer or director of
any organization, association or corporation with which the Trust has an
investment adviser's contract ("investment adviser"), if to the knowledge
of the Trust one or more of such officers or Trustees of the Trust or such
officers or directors of such investment advisers owns beneficially more
than one-half of one percent of the shares or securities of such issuer and
such officers, Trustees and directors owning more than on-half of one
percent of such shares or securities together own beneficially more than
five percent of such outstanding shares or securities. Each Trustee and
officer of the Trust shall give notice to the secretary of the identity of
all issuers whose securities are held by the Trust of which such officer or
Trustee owns as much as one-half of one percent of the outstanding
securities, and the Trust shall not be charged with the knowledge of such
holdings in the absence of receiving such notice if the Trust has requested
such information not less often than quarterly.

Subject to the provisions of the preceding paragraph, no officer, Trustee
or agent of the Trust and no officer, director or agent of any investment
adviser shall deal for or on behalf of the Trust with himself as principal
or agent, or with any partnership, association or corporation in which he
has a material financial interest; provided that the foregoing provisions
shall not prevent (a) officers and Trustees of the Trust from buying,
holding or selling shares in the Trust, or from being partners, officers or
directors of or financially interested in any investment adviser to the
Trust or in any corporation, firm or association which may at any time have
a distributor's or principal underwriter's contract with the Trust; (b)
purchases or sales of securities or other property if such transaction is
permitted by or is exempt or exempted from the provisions of the Investment
Company Act of 1940 or any Rule or Regulation thereunder and if such
transaction does not involve any commission or profit to any security
dealer who is, or one or more of whose partners, shareholders, officers or
directors is, an officer or Trustee of the Trust or an officer or director
of the investment adviser, administrator or principal underwriter of the
Trust; (c) employment of legal counsel, registrar, transfer agent,
shareholder services, dividend disbursing agent or custodian who is, or has
a partner, stockholder, officer or director who is, an officer or Trustee
of the Trust; (d) sharing statistical, research and management expenses,
including office hire and services, with any other company in which an
officer or Trustee of the Trust is an officer or director or financially
interested.

12.2 Dealing in Securities of the Trust. The Trust, the investment adviser, any
-----------------------------------
corporation, firm or association which may at any time have an exclusive
distributor's or principal underwriter's contract with the Trust (the
"distributor") and the officers and Trustees of the Trust and officers and
directors of every investment adviser and distributor, shall not take long
or short positions in the securities of the Trust, except that:

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(a) the distributor may place orders with the Trust for its shares
equivalent to orders received by the distributor;

(b) shares of the Trust may be purchased at not less than net asset value
for investment by the investment adviser and by officers and directors
of the distributor, investment adviser, or the Trust and by any trust,
pension, profit-sharing or other benefit plan for such persons, no
such purchase to be in contravention of any applicable state or
federal requirement.

12.3 Limitation on Certain Loans. The Trust shall not make loans to any
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officer, Trustee or employee of the Trust or any investment adviser or
distributor or their respective officers, directors or partners or
employees.

12.4 Custodian. All securities and cash owned by the Trust shall be maintained
----------
in the custody of one or more banks or trust companies having (according to
its last published report) not less than two million dollars ($2,000,000)
aggregate capital, surplus and undivided profits (any such bank or trust
company is hereinafter referred to as the "custodian"); provided, however,
the custodian may deliver securities as collateral on borrowings effected
by the Trust, provided, that such delivery shall be conditioned upon
receipt of the borrowed funds by the custodian except where additional
collateral is being pledged on an outstanding loan and the custodian may
deliver securities lent by the Trust against receipt of initial collateral
specified by the Trust. Subject to such rules, regulations and orders, if
any, as the Securities and Exchange Commission may adopt, the Trust may, or
may not permit any custodian to, deposit all or any part of the securities
owned by the Trust in a system for the central handling of securities
operated by the Federal Reserve Banks, or established by a national
securities exchange or national securities association registered with said
Commission under the Securities Exchange Act of 1934, or such other person
as may be permitted by said Commission, pursuant to which system all
securities of any particular class or series of any issue deposited with
the system are treated as fungible and may be transferred or pledged by
bookkeeping entry, without physical delivery of such securities.

The Trust shall upon the resignation or inability to serve of its custodian
or upon change of the custodian:

(a) in the case of such resignation or inability to serve use its best
efforts to obtain a successor custodian;

(b) require that the cash and securities owned by this corporation be
delivered directly to the successor custodian; and

(c) in the event that no successor custodian can be found, submit to the
shareholders, before permitting delivery of the cash and securities
owned by this Trust otherwise than to a successor custodian, the
question whether or not this Trust shall be

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liquidated or shall function without a custodian.

12.5 Limitations on Investment. Each series of shares may not invest in
--------------------------
securities other than those described in the Trust's then current
prospectus as appropriate for the series of shares for which such
securities are being purchased.

12.6 Determination of Net Asset Value. Determinations of net asset value made
--------------------------------
in good faith shall be binding on all parties concerned.

The term "net asset value" with respect to Shares of any series shall mean
that amount by which the assets of that series exceed its liabilities, all
as determined by or under the direction of the Trustees. Such value shall
be determined on such days and at such times as the Trustees may determine.
Such determination shall be made with respect to securities for which
market quotations are readily available, at the market value of such
securities; and with respect to other securities and assets, at the fair
value as determined in good faith by the Trustees, provided, however, that
the Trustees, without Shareholder approval, may alter the method of
appraising portfolio securities insofar as permitted under the 1940 Act and
interpretations thereof promulgated or issued by the Commission or insofar
as permitted by any order of the Commission. The Trustees may delegate any
powers and duties under this Section 12.6 with respect to appraisal of
assets and liabilities. At any time the Trustees may cause the value per
Share last determined to be determined again in similar manner and may fix
the time when such redetermined value shall become effective.

12.7 Reports to Shareholders; Distributions from Realized Gains. The Trust
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shall send to each shareholder of record at least annually a statement of
the condition of the Trust and of the results of its operation, containing
all information required by applicable laws or regulations.

Section 13. Amendments

These By-Laws may be amended or repealed, in whole or in part, by a majority of
the Trustees then in office at any meeting of the Trustees, or by one or more
writings signed by such majority.