<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 16, 1999
FILE NO. 33-58041
FILE NO. 811-7257
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 4 /X/
AND
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 6 /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 610-989-1000
EDWARD D. LOUGHLIN
C/O SEI Investments Company
Oaks, Pennsylvania 19456
(Name and Address of Agent for Service)
COPIES TO:
Richard W. Grant, Esquire John H. Grady, Jr., Esquire
Morgan, Lewis & Bockius LLP Morgan, Lewis & Bockius LLP
1701 Market Street 1701 Market Street
Philadelphia, Pennsylvania 19103 Philadelphia, Pennsylvania 19103
------------------------
Title of Securities Being Registered Units of Beneficial Interest
It is proposed that this filing will become effective (check appropriate box):
<TABLE>
<C> <S>
/ / immediately upon filing pursuant to paragraph (b)
/ / on [date] pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)
/ / on [date] pursuant to paragraph (a)(1) of Rule 485
/X/ 75 days after filing pursuant to paragraph (a)(2)
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
SEI INSTITUTIONAL INVESTMENTS TRUST
PROSPECTUS
SEPTEMBER 30, 1999
EQUITY FUNDS:
LARGE CAP FUND
LARGE CAP VALUE FUND
LARGE CAP GROWTH FUND
SMALL CAP FUND
INTERNATIONAL EQUITY FUND
EMERGING MARKETS EQUITY FUND
FIXED INCOME FUNDS:
CORE FIXED INCOME FUND
HIGH YIELD BOND FUND
INTERNATIONAL FIXED INCOME FUND
INVESTMENT ADVISER:
SEI INVESTMENTS MANAGEMENT CORPORATION
SUB-ADVISERS:
ACADIAN ASSET MANAGEMENT, INC.
ALLIANCE CAPITAL MANAGEMENT L.P.
ARTISAN PARTNERS LIMITED PARTNERSHIP
BLACKROCK, INC.
BOSTON PARTNERS ASSET MANAGEMENT COMPANY, L.P.
CAPITAL GUARDIAN TRUST COMPANY
CORONATION ASSET MANAGEMENT (PROPRIETARY) LIMITED
CREDIT SUISSE ASSET MANAGEMENT
CREDIT SUISSE ASSET MANAGEMENT, LIMITED
FIRSTAR INVESTMENT RESEARCH & MANAGEMENT COMPANY, LLC
FURMAN SELZ CAPITAL MANAGEMENT, LLC
LSV ASSET MANAGEMENT, L.P.
MELLON EQUITY ASSOCIATES, LLP
MORGAN STANLEY ASSET MANAGEMENT INC.
NICHOLAS-APPLEGATE CAPITAL MANAGEMENT
Page 1 of 40
<PAGE>
OECHSLE INTERNATIONAL ADVISORS, LLC
PARAMETRIC PORTFOLIO ASSOCIATES
POLYNOUS CAPITAL MANAGEMENT, INC.
PROVIDENT INVESTMENT COUNSEL, INC.
RS INVESTMENT MANAGEMENT, L.P.
SANFORD C. BERNSTEIN & CO., INC.
SAWGRASS ASSET MANAGEMENT, LLC
SCOTTISH WIDOWS INVESTMENT MANAGEMENT LIMITED
SG PACIFIC ASSET MANAGEMENT, INC.
SGY PACIFIC ASSET MANAGEMENT (SINGAPORE) LIMITED
SG YAMAICHI ASSET MANAGEMENT CO., LTD.
STRATEGIC FIXED INCOME, LLC
TCW FUNDS MANAGEMENT INC.
WALL STREET ASSOCIATES
WESTERN ASSET MANAGEMENT COMPANY
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED ANY FUND
SHARES OR DETERMINED WHETHER THIS PROSPECTUS IS ACCURATE OR COMPLETE.
IT IS A CRIME FOR ANYONE TO TELL YOU OTHERWISE.
Page 2 of 40
<PAGE>
ABOUT THIS PROSPECTUS
SEI Institutional Investments Trust is a mutual fund family that offers a number
of separate investment portfolios (Funds). The Funds have individual investment
goals and strategies and are designed primarily for institutional investors and
financial institutions and their clients that have signed an Investment
Management Agreement (as discussed below). This prospectus gives you important
information about the shares of the Funds that you should know before investing.
Please read this prospectus and keep it for future reference.
THIS PROSPECTUS HAS BEEN ARRANGED INTO DIFFERENT SECTIONS SO THAT YOU CAN EASILY
REVIEW THIS IMPORTANT INFORMATION. ON THE NEXT PAGE, THERE IS SOME GENERAL
INFORMATION YOU SHOULD KNOW ABOUT RISK AND RETURN WHICH IS COMMON TO EACH FUND.
FOR MORE DETAILED INFORMATION ABOUT THE FUNDS, PLEASE SEE:
PAGE
LARGE CAP FUND. . . . . . . . . . . . . . . . . . . . . . XXX
LARGE CAP VALUE FUND. . . . . . . . . . . . . . . . . . . XXX
LARGE CAP GROWTH FUND . . . . . . . . . . . . . . . . . . XXX
SMALL CAP FUND. . . . . . . . . . . . . . . . . . . . . . XXX
INTERNATIONAL EQUITY FUND . . . . . . . . . . . . . . . . XXX
EMERGING MARKETS EQUITY FUND. . . . . . . . . . . . . . . XXX
CORE FIXED INCOME FUND. . . . . . . . . . . . . . . . . . XXX
HIGH YIELD BOND FUND. . . . . . . . . . . . . . . . . . . XXX
INTERNATIONAL FIXED INCOME FUND . . . . . . . . . . . . . XXX
THE FUNDS' OTHER INVESTMENTS. . . . . . . . . . . . . . . XXX
THE ADVISER AND SUB-ADVISERS. . . . . . . . . . . . . . . XXX
PURCHASING AND SELLING FUND SHARES. . . . . . . . . . . . XXX
DIVIDENDS AND DISTRIBUTIONS . . . . . . . . . . . . . . . XXX
TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . XXX
FINANCIAL HIGHLIGHTS. . . . . . . . . . . . . . . . . . . XXX
HOW TO OBTAIN MORE INFORMATION ABOUT
SEI INSTITUTIONAL INVESTMENTS TRUST. . . . . . . . . . BACK COVER
GLOBAL ASSET ALLOCATION
Each Fund has its own distinct risk and reward characteristics, investment
objectives, policies and strategies. In addition to managing the Funds, SEI
Investments Management Corporation (SIMC) constructs and maintains global asset
allocation strategies for certain clients, and the Funds are designed in part to
implement those strategies. The degree to which an investor's portfolio is
invested in the particular market segments and/or asset classes represented by
these Funds varies, as does the investment risk/return potential represented by
each Fund. Some Funds, especially the High Yield Bond and Emerging Markets
Equity Funds, may have extremely volatile returns. Because of the historical
lack of correlation among various asset classes, an investment in a portfolio of
Funds representing a range of asset classes as part of an asset allocation
strategy may reduce the strategy's overall level of volatility. As a result, a
global asset allocation strategy may reduce risk.
Page 3 of 40
<PAGE>
In managing the Funds, SIMC focuses on four key principles: asset allocation,
portfolio structure, the use of specialist managers, and continuous portfolio
management. Asset allocation across appropriate asset classes (represented by
some of the Funds) is the central theme of SIMC's investment philosophy. SIMC
seeks to reduce risk further by creating a portfolio that is diversified within
each asset class. SIMC then oversees a network of specialist managers who
invest the assets of these Funds in distinct segments of the market or class
represented by each Fund. These specialist managers adhere to distinct
investment disciplines, with the goal of providing greater consistency and
predictability of results, as well as broader diversification across and within
asset classes. Finally, SIMC regularly rebalances to ensure that the
appropriate mix of assets is constantly in place, and constantly monitors and
evaluates specialist managers for these Funds to ensure that they do not deviate
from their stated investment philosophy or process.
ELIGIBLE INVESTORS
Eligible investors are principally institutions, 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, that have entered into an Investment
Management Agreement (an "Agreement") with SIMC (collectively, "Eligible
Investors").
Under each Agreement, SIMC will consult with the Eligible Investor to define its
investment objectives, desired returns and tolerance for risk, and to develop a
plan for the allocation of its assets. Each Agreement sets forth the fee to be
paid to SIMC, which is ordinarily expressed as a percentage of the Eligible
Investor's assets managed by SIMC. This fee, which is negotiated by the
Eligible Investor and SIMC, may include a performance based fee or a
fixed-dollar fee for certain specified services.
Page 4 of 40
<PAGE>
RISK/RETURN INFORMATION COMMON TO THE FUNDS
Each Fund is a mutual fund. A mutual fund pools shareholders' money and, using
professional investment managers, invests it in securities.
Each Fund has its own investment goal and strategies for reaching that goal.
Each Fund's assets are managed under the direction of SIMC and one or more
Sub-Advisers who invest portions of the Funds' assets in a way that they believe
will help the Funds achieve their goal. SIMC acts as "manager of managers" for
the Funds, and attempts to ensure that the Sub-Adviser(s) comply with the Funds'
investment policies and guidelines. SIMC also recommends the appointment of
additional or replacement Sub-Advisers to the Funds' Board. Still, investing in
the Funds involves risks, and there is no guarantee that a Fund will achieve its
goal. SIMC and the Sub-Advisers (the "Advisers") make judgments about the
securities markets, the economy, or companies, but these judgments may not
anticipate actual market movements or the impact of economic conditions on
company performance. In fact, no matter how good a job the Sub-Advisers do, you
could lose money on your investment in a Fund, just as you could with other
investments. A Fund share is not a bank deposit, and it is not insured or
guaranteed by the FDIC or any government agency.
The value of your investment in a Fund is based on the market prices of the
securities the Fund holds. These prices change daily due to economic and other
events that affect securities markets generally, as well as those that affect
particular companies or governments. These price movements, sometimes called
volatility, will vary depending on the types of securities the Fund owns and the
markets in which they trade. The estimated level of volatility for each Fund is
set forth in the Fund Summaries that follow. The effect on a Fund's share price
of a change in the value of a single security holding will depend on how widely
the Fund's holdings are diversified.
YEAR 2000 RISKS
Like other mutual funds (and most organizations around the world), the Funds
could be affected by computer problems related to the transition to the year
2000. While no one knows if these problems will have any impact on the Funds
or on the financial markets in general, the Funds are taking steps to protect
Fund investors. These include efforts to ensure that the Funds' own systems
are prepared to make the transition to the year 2000, and to determine that
the problem will not affect the systems used by the Funds' mission critical
service providers. The Funds have also sought and received assurances from
these service providers that they are devoting significant resources to
prevent material adverse consequences to the Funds. Whether these steps will
be effective can only be known for certain in the year 2000. While such
assurances have been received, year 2000 problems may ultimately negatively
affect the companies and governments whose securities the Funds purchase,
which may have an impact on the value of the Funds' shares. There is
additional information on these risks in the Funds' Statement of Additional
Information.
Page 5 of 40
<PAGE>
LARGE CAP FUND
FUND SUMMARY
INVESTMENT GOAL Long-term growth of capital and income
SHARE PRICE VOLATILITY Medium to high
PRINCIPAL INVESTMENT STRATEGY Utilizing multiple specialist sub-
advisers, the Fund invests in large
cap U.S. common stocks
INVESTMENT STRATEGY
The Large Cap Fund invests primarily in common stocks of U.S. companies with
market capitalizations of more than $1 billion. The Fund uses a multi-manager
approach, relying on a number of Sub-Advisers with differing investment
philosophies to manage portions of the Fund's portfolio under the general
supervision of SIMC. Each Sub-Adviser, in managing its portion of the Fund's
assets, follows a distinct investment discipline. For example, the Sub-Advisers
may include both value managers (i.e., managers that select stocks they believe
are undervalued in light of such fundamental characteristics as earnings, book
value or return on equity), and growth managers (i.e., managers that select
stocks they believe have significant growth potential based on revenue and
revenue growth and other factors). The Fund's portfolio is diversified as to
issuers and industries.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
Since it purchases equity securities, the Fund is subject to the risk that stock
prices will fall over short or extended periods of time. Historically, the
equity markets have moved in cycles, and the value of the Fund's securities may
fluctuate drastically from day to day. Individual companies may report poor
results or be negatively affected by industry and/or economic trends and
developments. The price of securities issued by such companies may suffer a
decline in response. These factors contribute to price volatility, which is the
principal risk of investing in the Fund.
In addition, the Fund is subject to the risk that its principal market segment,
large capitalization stocks, may underperform other equity market segments or
the equity markets as a whole.
PERFORMANCE INFORMATION
The bar chart and the performance table below illustrate the volatility of an
investment in the Fund. Of course, the Fund's past performance does not
necessarily indicate how the Fund will perform in the future.
This bar chart shows changes in the performance of the Fund's shares from year
to year for two years.*
<TABLE>
<S> <C>
1997 X.XX%
1998 X.XX%
</TABLE>
Page 6 of 40
<PAGE>
<TABLE>
<CAPTION>
BEST QUARTER WORST QUARTER
<S> <C>
X.XX% X.XX%
(X/X/XX) (X/X/XX)
</TABLE>
* THE PERFORMANCE INFORMATION SHOWN ABOVE IS BASED ON A CALENDAR YEAR. THE
FUND'S TOTAL RETURN FROM JANUARY 1, 1999, TO JUNE 30, 1999, WAS ____%.
This table compares the Fund's average annual total returns for the periods
ended December 31, 1998, to those of the ___________ Index.
<TABLE>
<CAPTION>
SINCE INCEPTION
1 YEAR (JUNE 14, 1996)
- --------------------------------------------------------------------------------
<S> <C> <C>
LARGE CAP FUND X.XX% X.XX%
_____ INDEX* X.XX% X.XX%**
</TABLE>
* An index measures the market prices of a specific group of securities in a
particular market or securities in a market sector. You cannot invest
directly in an index. Unlike a mutual fund, an index does not have an
investment adviser and does not pay any commissions or expenses. If an
index had expenses, its market performance would be lower. [Insert Index
description]
** The inception date for the Index is ____, 1999.
FUND FEES AND EXPENSES
THIS TABLE DESCRIBES THE HIGHEST FEES AND EXPENSES THAT YOU MAY CURRENTLY PAY IF
YOU BUY AND HOLD SHARES OF THE FUND.
ANNUAL FUND OPERATING EXPENSES (EXPENSES DEDUCTED FROM FUND ASSETS)
<TABLE>
<CAPTION>
<S> <C>
Investment Advisory Fees 0.40%
Distribution (12b-1) Fees None
Other Expenses 0.10%
-----
Total Annual Fund Operating Expenses 0.50%*
</TABLE>
- --------------------------------------------------------------------------------
* The Fund's total actual annual fund operating expenses for the current
fiscal year are expected to be less than the amount shown above because the
[Adviser/Administrator] is voluntarily waiving a portion of its fee in order to
keep total operating expenses at a specified level. The [Adviser/Administrator]
may discontinue all or part of its waiver at any time. With this fee waiver,
the Fund's actual total operating expenses are expected to be as follows:
LARGE CAP FUND 0.28%
For more information about these fees, see "Investment Adviser and Sub-Advisers"
and "Distribution of Fund Shares."
Page 7 of 40
<PAGE>
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. The Example assumes that you
invest $10,000 in the Fund for the time periods indicated and that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, that Fund operating expenses remain the same, and
that you reinvest all dividends and distributions. Although your actual costs
and returns might be different, your approximate costs of investing $10,000 in
the Fund would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
LARGE CAP FUND $XXX $XXX $XXX $XXX
</TABLE>
Page 8 of 40
<PAGE>
LARGE CAP VALUE FUND
FUND SUMMARY
INVESTMENT GOAL Long-term growth of capital and income
SHARE PRICE VOLATILITY Medium to high
PRINCIPAL INVESTMENT STRATEGY Utilizing multiple specialist sub-
advisers that manage in a value style,
the Fund invests in large cap income-
producing U.S. common stocks
INVESTMENT STRATEGY OF THE LARGE CAP VALUE FUND
The Large Cap Value Fund invests primarily in common stocks of U.S. companies
with market capitalizations of more than $1 billion. The Fund uses a
multi-manager approach, relying on a number of Sub-Advisers with differing
investment philosophies to manage portions of the Fund's portfolio under the
general supervision of SIMC. Each Sub-Adviser, in managing its portion of the
Fund's assets, selects stocks it believes are undervalued in light of such
fundamental characteristics as earnings, book value or return on equity. The
Fund's portfolio is diversified as to issuers and industries.
WHAT ARE THE RISKS OF INVESTING IN THE LARGE CAP VALUE FUND?
Since it purchases equity securities, the Fund is subject to the risk that stock
prices will fall over short or extended periods of time. Historically, the
equity markets have moved in cycles, and the value of the Fund's securities may
fluctuate drastically from day to day. Individual companies may report poor
results or be negatively affected by industry and/or economic trends and
developments. The price of securities issued by such companies may suffer a
decline in response. These factors contribute to price volatility, which is the
principal risk of investing in the Fund.
In addition, the Fund is subject to the risk that its principal market segment,
large capitalization value stocks, may underperform other equity market segments
or the equity markets as a whole.
PERFORMANCE INFORMATION
As of September 30, 1999, the Large Cap Value Fund had not commenced operations,
and did not have a performance history.
FUND FEES AND EXPENSES
THIS TABLE DESCRIBES THE HIGHEST FEES AND EXPENSES THAT YOU MAY CURRENTLY PAY IF
YOU BUY AND HOLD SHARES OF THE FUND.
Page 9 of 40
<PAGE>
ANNUAL FUND OPERATING EXPENSES (EXPENSES DEDUCTED FROM FUND ASSETS)
<TABLE>
<CAPTION>
CLASS A SHARES
<S> <C>
Investment Advisory Fees 0.40%
Distribution (12b-1) Fees None
Other Expenses 0.10%*
-------
Total Annual Fund Operating Expenses 0.50%**
</TABLE>
- --------------------------------------------------------------------------------
* Other expenses are based on estimated amounts for the current fiscal year.
** The Fund's total actual annual fund operating expenses for the current
fiscal year are expected to be less than the amount shown above because the
[Adviser/Administrator] will voluntarily waive a portion of its fee in order to
keep total operating expenses at a specified level. The [Adviser/Administrator]
may discontinue all or part of its waiver at any time. With this fee waiver,
the Fund's actual total operating expenses are expected to be as follows:
LARGE CAP VALUE FUND 0.28%
For more information about these fees, see "Investment Adviser and Sub-Advisers"
and "Distribution of Fund Shares."
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. The Example assumes that you
invest $10,000 in the Fund for the time periods indicated and that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, that Fund operating expenses remain the same, and
that you reinvest all dividends and distributions. Although your actual costs
and returns might be different, your approximate costs of investing $10,000 in
the Fund would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
LARGE CAP VALUE FUND $XXX $XXX
</TABLE>
Page 10 of 40
<PAGE>
LARGE CAP GROWTH FUND
FUND SUMMARY
INVESTMENT GOAL Capital appreciation
SHARE PRICE VOLATILITY Medium to high
PRINCIPAL INVESTMENT STRATEGY Utilizing multiple specialist sub-
advisers that manage in a growth
style, the Fund invests in large cap
U.S. common stocks
INVESTMENT STRATEGY OF THE LARGE CAP GROWTH FUND
The Large Cap Growth Fund invests primarily in common stocks of U.S. companies
with market capitalizations of more than $1 billion. The Fund uses a
multi-manager approach, relying on a number of Sub-Advisers with differing
investment philosophies to manage portions of the Fund's portfolio under the
general supervision of SIMC. Each Sub-Adviser, in managing its portion of the
Fund's assets, selects stocks it believes have significant growth potential in
light of such characteristics as revenue and earnings growth and positive
earnings surprises. The Fund's portfolio is diversified as to issuers and
industries.
Due to its investment strategy, the Fund may buy and sell securities frequently.
This may result in higher transaction costs and additional capital gains tax
liabilities.
WHAT ARE THE RISKS OF INVESTING IN THE LARGE CAP GROWTH FUND?
Since it purchases equity securities, the Fund is subject to the risk that stock
prices will fall over short or extended periods of time. Historically, the
equity markets have moved in cycles, and the value of the Fund's securities may
fluctuate drastically from day to day. Individual companies may report poor
results or be negatively affected by industry and/or economic trends and
developments. The price of securities issued by such companies may suffer a
decline in response. These factors contribute to price volatility, which is the
principal risk of investing in the Fund.
In addition, the Fund is subject to the risk that its principal market segment,
large capitalization growth stocks, may underperform other equity market
segments or the equity markets as a whole.
PERFORMANCE INFORMATION
As of September 30, 1999, the Large Cap Growth Fund had not commenced
operations, and did not have a performance history.
FUND FEES AND EXPENSES
THIS TABLE DESCRIBES THE HIGHEST FEES AND EXPENSES THAT YOU MAY CURRENTLY PAY IF
YOU BUY AND HOLD SHARES OF THE FUND.
Page 11 of 40
<PAGE>
ANNUAL FUND OPERATING EXPENSES (EXPENSES DEDUCTED FROM FUND ASSETS)
<TABLE>
<CAPTION>
CLASS A SHARES
<S> <C>
Investment Advisory Fees 0.40%
Distribution (12b-1) Fees None
Other Expenses 0.10%*
-----
Total Annual Fund Operating Expenses 0.50%**
</TABLE>
- --------------------------------------------------------------------------------
* Other expenses are based on estimated amounts for the current fiscal year.
** The Fund's total actual annual fund operating expenses for the current
fiscal year are expected to be less than the amount shown above because the
[Adviser/Administrator] will voluntarily waive a portion of its fee in order to
keep total operating expenses at a specified level. The [Adviser/Administrator]
may discontinue all or part of its waiver at any time. With this fee waiver,
the Fund's actual total operating expenses are expected to be as follows:
LARGE CAP GROWTH FUND 0.28%
For more information about these fees, see "Investment Adviser and Sub-Advisers"
and "Distribution of Fund Shares."
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. The Example assumes that you
invest $10,000 in the Fund for the time periods indicated and that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, that Fund operating expenses remain the same, and
that you reinvest all dividends and distributions. Although your actual costs
and returns might be different, your approximate costs of investing $10,000 in
the Fund would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
LARGE CAP GROWTH FUND $XXX $XXX
</TABLE>
Page 12 of 40
<PAGE>
SMALL CAP FUND
FUND SUMMARY
INVESTMENT GOAL Capital appreciation
SHARE PRICE VOLATILITY High
PRINCIPAL INVESTMENT STRATEGY Utilizing multiple specialist sub-
advisers, the Fund invests in common
stocks of smaller U.S. companies
INVESTMENT STRATEGY
The Small Cap Fund invests primarily in common stocks of U.S. companies with
market capitalizations of less than $2 billion. The Fund uses a multi-manager
approach, relying upon a number of Sub-Advisers with differing investment
philosophies to manage portions of the Fund's portfolio under the general
supervision of SIMC. Each Sub-Adviser, in managing its portion of the Fund's
assets, follows a distinct investment discipline. For example, the Sub-Advisers
may include both value managers (i.e., managers that select stocks they believe
are undervalued in light of such fundamental characteristics as earnings, book
value or return on equity), and growth managers (i.e., managers that select
stocks they believe have significant earnings growth potential based on revenue
and earnings growth and other factors). The Fund's portfolio is diversified as
to issuers and industries.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
Since it purchases equity securities, the Fund is subject to the risk that stock
prices will fall over short or extended periods of time. Historically, the
equity markets have moved in cycles, and the value of the Fund's securities may
fluctuate drastically from day to day. Individual companies may report poor
results or be negatively affected by industry and/or economic trends and
developments. The price of securities issued by such companies may suffer a
decline in response. These factors contribute to price volatility, which is the
principal risk of investing in the Fund.
The Fund is also subject to the risk that its principal market segment, small
capitalization stocks, may underperform other equity market segments or the
equity markets as a whole. The smaller capitalization companies the Fund
invests in may be more vulnerable to adverse business or economic events than
larger, more established companies. In particular, these small companies may
have limited product lines, markets and financial resources, and may depend upon
a relatively small management group. Therefore, small cap stocks may be more
volatile than those of larger companies. These securities are traded over the
counter or listed on an exchange.
PERFORMANCE INFORMATION
The bar chart and the performance table below illustrate the volatility of an
investment in the Fund. Of course, the Fund's past performance does not
necessarily indicate how the Fund will perform in the future.
Page 13 of 40
<PAGE>
This bar chart shows changes in the performance of the Fund's shares from year
to year for two years.*
<TABLE>
<S> <C>
1997 X.XX%
1998 X.XX%
<CAPTION>
BEST QUARTER WORST QUARTER
<S> <C>
X.XX% X.XX%
(X/X/XX) (X/X/XX)
</TABLE>
* THE PERFORMANCE INFORMATION SHOWN ABOVE IS BASED ON A CALENDAR YEAR. THE
FUND'S TOTAL RETURN FROM JANUARY 1, 1999, TO JUNE 30, 1999, WAS ____%.
This table compares the Fund's average annual total returns for the periods
ended December 31, 1998, to those of the _____________ Index.
<TABLE>
<CAPTION>
SINCE INCEPTION
1 YEAR (JUNE 14, 1996)
- --------------------------------------------------------------------------------
<S> <C> <C>
SMALL CAP FUND X.XX% X.XX%
_____ INDEX* X.XX% X.XX%**
</TABLE>
* An index measures the market prices of a specific group of securities in a
particular market or securities in a market sector. You cannot invest
directly in an index. Unlike a mutual fund, an index does not have an
investment adviser and does not pay any commissions or expenses. If an
index had expenses, its market performance would be lower. [Insert Index
description]
** The inception date for the Index is ____, 1999.
FUND FEES AND EXPENSES
THIS TABLE DESCRIBES THE HIGHEST FEES AND EXPENSES THAT YOU MAY CURRENTLY PAY IF
YOU BUY AND HOLD SHARES OF THE FUND.
ANNUAL FUND OPERATING EXPENSES (EXPENSES DEDUCTED FROM FUND ASSETS)
<TABLE>
<CAPTION>
<S> <C>
Investment Advisory Fees 0.65%
Distribution (12b-1) Fees None
Other Expenses 0.10%
-----
Total Annual Fund Operating Expenses 0.75%*
</TABLE>
- --------------------------------------------------------------------------------
* The Fund's total actual annual fund operating expenses for the current
fiscal year are expected to be less than the amount shown above because the
[Adviser/Administrator] is voluntarily waiving a portion of its fee in order to
keep total operating expenses at a specified level. The [Adviser/Administrator]
may discontinue all or part of its waiver at any time. With this fee waiver,
the Fund's actual total operating expenses are expected to be as follows:
SMALL CAP FUND 0.56%
For more information about these fees, see "Investment Adviser and Sub-Advisers"
and "Distribution of Fund Shares."
Page 14 of 40
<PAGE>
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. The Example assumes that you
invest $10,000 in the Fund for the time periods indicated and that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, that Fund operating expenses remain the same, and
that you reinvest all dividends and distributions. Although your actual costs
and returns might be different, your approximate costs of investing $10,000 in
the Fund would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
SMALL CAP FUND $XXX $XXX $XXX $XXX
</TABLE>
Page 15 of 40
<PAGE>
INTERNATIONAL EQUITY FUND
FUND SUMMARY
INVESTMENT GOAL Capital appreciation
SHARE PRICE VOLATILITY Medium to High
PRINCIPAL INVESTMENT STRATEGY Utilizing multiple specialist sub-
advisers, the Fund invests in equity
securities of foreign companies
INVESTMENT STRATEGY
The International Equity Fund invests primarily in common stocks and other
equity securities of foreign companies. The Fund primarily invests in companies
located in developed countries, but may also invest in companies located in
emerging markets. The Fund uses a multi-manager approach, relying upon a number
of Sub-Advisers with differing investment philosophies to manage portions of the
Fund's portfolio under the general supervision of SIMC. The Fund is diversified
as to issuers, market capitalization, industry and country.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
Since it purchases equity securities, the Fund is subject to the risk that stock
prices will fall over short or extended periods of time. Historically, the
equity markets have moved in cycles, and the value of the Fund's securities may
fluctuate drastically from day to day. Individual companies may report poor
results or be negatively affected by industry and/or economic trends and
developments. The prices of securities issued by such companies may suffer a
decline in response. In the case of foreign stocks, these fluctuations will
reflect international economic and political events, as well as changes in
currency valuations relative to the U.S. dollar. These factors contribute to
price volatility, which is the principal risk of investing in the Fund.
Investing in issuers located in foreign countries poses distinct risks since
political and economic events unique to a country or region will affect those
markets and their issuers. These events will not necessarily affect the U.S.
economy or similar issuers located in the United States. In addition,
investments in foreign countries are generally denominated in a foreign
currency. As a result, changes in the value of those currencies compared to the
U.S. dollar may affect (positively or negatively) the value of a Fund's
investments. These currency movements may happen separately from and in
response to events that do not otherwise affect the value of the security in the
issuer's home country. These various risks will be even greater for investments
in emerging market countries since political turmoil and rapid changes in
economic conditions are more likely to occur in these countries.
The Fund is also subject to the risk that its market segment, developed
international equity securities, may underperform other equity market segments
or the equity markets as a whole.
The Fund invests a portion of its assets in securities issued by European
issuers. On January 1, 1999, the countries participating in the European
Monetary Union (EMU) implemented a new currency unit, the euro, which is
reshaping financial markets, banking systems and monetary policies in Europe and
other
Page 16 of 40
<PAGE>
parts of the world. Although it is not possible to predict the eventual impact
of the euro implementation plan on the Funds, the transition to the euro may
change the economic environment and behavior of investors, particularly in
European markets.
PERFORMANCE INFORMATION
The bar chart and the performance table below illustrate the volatility of an
investment in the Fund. Of course, the Fund's past performance does not
necessarily indicate how the Fund will perform in the future.
This bar chart shows changes in the performance of the Fund's shares from year
to year for two years.*
<TABLE>
<S> <C>
1997 X.XX%
1998 X.XX%
<CAPTION>
BEST QUARTER WORST QUARTER
<S> <C>
X.XX% X.XX%
(X/X/XX) (X/X/XX)
</TABLE>
* THE PERFORMANCE INFORMATION SHOWN ABOVE IS BASED ON A CALENDAR YEAR. THE
FUND'S TOTAL RETURN FROM JANUARY 1, 1999, TO JUNE 30, 1999, WAS ____%.
This table compares the Fund's average annual total returns for the periods
ended December 31, 1998 to those of the Morgan Stanley MSCI EAFE Index.
<TABLE>
<CAPTION>
SINCE INCEPTION
1 YEAR (JUNE 14, 1996)
- --------------------------------------------------------------------------------
<S> <C> <C>
INTERNATIONAL EQUITY FUND X.XX% X.XX%
MORGAN STANLEY MSCI EAFE INDEX* X.XX% X.XX%**
</TABLE>
* An index measures the market prices of a specific group of securities in a
particular market or securities in a market sector. You cannot invest
directly in an index. Unlike a mutual fund, an index does not have an
investment adviser and does not pay any commissions or expenses. If an
index had expenses, its market performance would be lower. The Morgan
Stanley MSCI EAFE Index is a widely-recognized, capitalization-weighted
(companies with larger market capitalizations have more influence than
those with smaller capitalizations) index of over 900 securities listed on
the stock exchanges in Europe, Australia and the Far East.
** The inception date for the Index is ____, 1999.
FUND FEES AND EXPENSES
THIS TABLE DESCRIBES THE HIGHEST FEES AND EXPENSES THAT YOU MAY CURRENTLY PAY IF
YOU BUY AND HOLD SHARES OF THE FUND.
Page 17 of 40
<PAGE>
ANNUAL FUND OPERATING EXPENSES (EXPENSES DEDUCTED FROM FUND ASSETS)
<TABLE>
<S> <C>
Investment Advisory Fees 0.51%
Distribution (12b-1) Fees None
Other Expenses 0.15%
-----
Total Annual Fund Operating Expenses 0.66%*
</TABLE>
- -------------------------------------------------------------------------------
The Fund's total actual annual fund operating expenses for the current fiscal
year are expected to be less than the amount shown above because the
[Adviser/Administrator] is voluntarily waiving a portion of its fee in order to
keep total operating expenses at a specified level. The [Adviser/Administrator]
may discontinue all or part of its waiver at any time. With this fee waiver,
the Fund's actual total operating expenses are expected to be as follows:
INTERNATIONAL EQUITY FUND 0.48%
For more information about these fees, see "Investment Adviser and Sub-Advisers"
and "Distribution of Fund Shares."
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. The Example assumes that you
invest $10,000 in the Fund for the time periods indicated and that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, that Fund operating expenses remain the same, and
that you reinvest all dividends and distributions. Although your actual costs
and returns might be different, your approximate costs of investing $10,000 in
the Fund would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
INTERNATIONAL EQUITY FUND $XXX $XXX $XXX $XXX
</TABLE>
Page 18 of 40
<PAGE>
EMERGING MARKETS EQUITY FUND
FUND SUMMARY
INVESTMENT GOAL Capital appreciation
SHARE PRICE VOLATILITY Very High
PRINCIPAL INVESTMENT STRATEGY Utilizing multiple specialist sub-
advisers, the Fund invests in equity
securities of emerging markets
companies
INVESTMENT STRATEGY
The Emerging Markets Equity Fund invests primarily in common stocks and other
equity securities of foreign companies located in emerging market countries.
The Fund uses a multi-manager approach, relying upon a number of Sub-Advisers
with differing investment philosophies to manage portions of the Fund's
portfolio under the general supervision of SIMC. The Fund is diversified as to
issuers, market capitalization, industry and country.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
Since it purchases equity securities, the Fund is subject to the risk that stock
prices will fall over short or extended periods of time. Historically, the
equity markets have moved in cycles, and the value of the Fund's securities may
fluctuate drastically from day to day. Individual companies may report poor
results or be negatively affected by industry and/or economic trends and
developments. The prices of securities issued by such companies may suffer a
decline in response. In the case of foreign stocks, these fluctuations will
reflect international economic and political events, as well as changes in
currency valuations relative to the U.S. dollar. These factors contribute to
price volatility, which is one principal risk of investing in the Fund.
Investing in issuers located in foreign countries poses distinct risks since
political and economic events unique to a country or region will affect those
markets and their issuers. These events will not necessarily affect the U.S.
economy or similar issuers located in the United States. In addition,
investments in foreign countries are generally denominated in a foreign
currency. As a result, changes in the value of those currencies compared to the
U.S. dollar may affect (positively or negatively) the value of a Fund's
investments. These currency movements may happen separately from and in
response to events that do not otherwise affect the value of the security in the
issuer's home country. These various risks will be even greater for investments
in emerging market countries since political turmoil and rapid changes in
economic conditions are more likely to occur in these countries.
The Fund is also subject to the risk that its market segment, emerging market
equity securities, may underperform other equity market segments or the equity
markets as a whole.
Emerging market countries are countries that the World Bank or the United
Nations considers to be emerging or developing. Emerging markets may be more
likely to experience political turmoil or rapid changes in market or economic
conditions than more developed countries. In addition, the financial
Page 19 of 40
<PAGE>
stability of issuers (including governments) in emerging market countries may be
more precarious than in other countries. As a result, there will tend to be an
increased risk of price volatility associated with the Fund's investments in
emerging market countries, which may be magnified by currency fluctuations
relative to the U.S. dollar.
PERFORMANCE INFORMATION
As of September 30, 1999, the Emerging Markets Equity Fund had not commenced
operations, and did not have a performance history.
FUND FEES AND EXPENSES
THIS TABLE DESCRIBES THE HIGHEST FEES AND EXPENSES THAT YOU MAY CURRENTLY PAY IF
YOU BUY AND HOLD SHARES OF THE FUND.
ANNUAL FUND OPERATING EXPENSES (EXPENSES DEDUCTED FROM FUND ASSETS)
<TABLE>
<S> <C>
Investment Advisory Fees 1.05%
Distribution (12b-1) Fees None
Other Expenses 0.51%*
-----
Total Annual Fund Operating Expenses 1.56%**
</TABLE>
- --------------------------------------------------------------------------------
* Other expenses are based on estimated amounts for the current fiscal year.
** The Fund's total actual annual fund operating expenses for the current
fiscal year are expected to be less than the amount shown above because the
[Adviser/Administrator] will voluntarily waive a portion of its fee in order to
keep total operating expenses at a specified level. The [Adviser/Administrator]
may discontinue all or part of its waiver at any time. With this fee waiver,
the Fund's actual total operating expenses are expected to be as follows:
EMERGING MARKETS EQUITY FUND 1.40%
For more information about these fees, see "Investment Adviser and Sub-Advisers"
and "Distribution of Fund Shares."
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. The Example assumes that you
invest $10,000 in the Fund for the time periods indicated and that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, that Fund operating expenses remain the same, and
that you reinvest all dividends and distributions. Although your actual costs
and returns might be different, your approximate costs of investing $10,000 in
the Fund would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
EMERGING MARKETS EQUITY FUND $XXX $XXX
</TABLE>
Page 20 of 40
<PAGE>
CORE FIXED INCOME FUND
FUND SUMMARY
INVESTMENT GOAL Current income and preservation of
capital
SHARE PRICE VOLATILITY Medium
PRINCIPAL INVESTMENT STRATEGY Utilizing multiple specialist sub-
advisers that have fixed income
investment expertise, the Fund invests
in investment grade U.S. fixed income
securities
INVESTMENT STRATEGY
The Core Fixed Income Fund invests primarily in investment grade U.S. corporate
and government fixed income securities, including mortgage-backed securities.
The Fund uses a multi-manager approach, relying upon a number of Sub-Advisers
with differing investment philosophies to manage portions of the Fund's
portfolio under the general supervision of SIMC. Sub-Advisers are selected for
their expertise in managing various kinds of fixed income securities, and each
Sub-Adviser makes investment decisions based on an analysis of yield trends,
credit ratings and other factors in accordance with its particular discipline.
While each Sub-Adviser chooses securities of different types and maturities, the
Fund in the aggregate generally will have a dollar-weighted average duration
that is consistent with that of the broad U.S. fixed income market (currently
4.5 years).
Due to its investment strategy, the Fund may buy and sell securities frequently.
This may result in higher transaction costs and additional capital gains tax
liabilities.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
The prices of the Fund's fixed income securities respond to economic
developments, particularly interest rate changes, as well as to perceptions
about the creditworthiness of individual issuers, including governments.
Generally, the Fund's fixed income securities will decrease in value if interest
rates rise and vice versa, and the volatility of lower rated securities is even
greater than that of higher rated securities. Also, longer-term securities are
generally more volatile, so the average maturity or duration of these securities
affects risk.
Although the Fund's U.S. government securities are considered to be among the
safest investments, they are not guaranteed against price movements due to
changing interest rates. Obligations issued by some U.S. government agencies
are backed by the U.S. Treasury, while others are backed solely by the ability
of the agency to borrow from the U.S. Treasury or by the agency's own resources.
Mortgage-backed securities are fixed income securities representing an interest
in a pool of underlying mortgage loans. They are sensitive to changes in
interest rates, but may respond to these changes differently from other fixed
income securities due to the possibility of prepayment of the underlying
mortgage loans. As a result, it may not be possible to determine in advance the
actual maturity date or average life of a mortgage-backed security. Rising
interest rates tend to discourage refinancings, with the result that the average
life and volatility of the security will increase, exacerbating its decrease in
market
Page 21 of 40
<PAGE>
price. When interest rates fall, however, mortgage-backed securities may not
gain as much in market value because of the expectation of additional mortgage
prepayments, that must be reinvested at lower interest rates. Prepayment risk
may make it difficult to calculate the average maturity of the Fund's
mortgage-backed securities and, therefore, to assess the volatility risk of the
Fund.
The privately issued mortgage-backed securities that the Fund invests in are not
issued or guaranteed by the U.S. Government or its agencies or instrumentalities
and may bear a greater risk of nonpayment than securities that are backed by the
U.S. Treasury. However, the timely payment of principal and interest normally
is supported, at least partially, by various credit enhancements by banks and
other financial institutions. There can be no assurance, however that such
credit enhancements will support full payment of the principal and interest on
such obligations. In addition, changes in the credit quality of the entity
which provides credit enhancement could cause losses to the Fund and affect its
share price.
The Fund is also subject to the risk that its market segment, U.S. fixed income
securities, may underperform other fixed income market segments or the fixed
income markets as a whole.
PERFORMANCE INFORMATION
The bar chart and the performance table below illustrate the volatility of an
investment in the Fund. Of course, the Fund's past performance does not
necessarily indicate how the Fund will perform in the future.
This bar chart shows changes in the performance of the Fund's shares from year
to year for two years.*
<TABLE>
<S> <C>
1997 X.XX%
1998 X.XX%
<CAPTION>
BEST QUARTER WORST QUARTER
<S> <C>
X.XX% X.XX%
(X/X/XX) (X/X/XX)
</TABLE>
* THE PERFORMANCE INFORMATION SHOWN ABOVE IS BASED ON A CALENDAR YEAR. THE
FUND'S TOTAL RETURN FROM JANUARY 1, 1999, TO JUNE 30, 1999, WAS ____%.
This table compares the Fund's average annual total returns for the periods
ended December 31, 1998, to those of the Lehman Brothers Aggregate Bond Index.
<TABLE>
<CAPTION>
SINCE INCEPTION
1 YEAR (JUNE 14, 1996)
<S> <C> <C>
CORE FIXED INCOME FUND X.XX% X.XX%
LEHMAN BROTHERS AGGREGATE BOND INDEX* X.XX% X.XX%**
</TABLE>
* An index measures the market prices of a specific group of securities in a
particular market or securities in a market sector. You cannot invest
directly in an index. Unlike a mutual fund, an index does not have an
investment adviser and does not pay any commissions or expenses. If an
index had expenses, its market performance would be lower. The Lehman
Brothers Aggregate Bond Index is a widely-recognized, market-weighted
(higher market value stocks have more influence than lower market value
stocks) index of U.S. government obligations, corporate debt securities and
AAA rated mortgage-backed securities. All securities in the index are
rated investment grade (BBB) or higher, with maturities of at least 1 year.
** The inception date for the Index is ____, 1999.
Page 22 of 40
<PAGE>
FUND FEES AND EXPENSES
THIS TABLE DESCRIBES THE HIGHEST FEES AND EXPENSES THAT YOU MAY CURRENTLY PAY IF
YOU BUY AND HOLD SHARES OF THE FUND.
ANNUAL FUND OPERATING EXPENSES (EXPENSES DEDUCTED FROM FUND ASSETS)
<TABLE>
<S> <C>
Investment Advisory Fees 0.30%
Distribution (12b-1) Fees None
Other Expenses 0.11%
-----
Total Annual Fund Operating Expenses 0.41%*
</TABLE>
- --------------------------------------------------------------------------------
* The Fund's total actual annual fund operating expenses for the current
fiscal year are expected to be less than the amount shown above because the
[Adviser/Administrator] is voluntarily waiving a portion of its fee in order to
keep total operating expenses at a specified level. The [Adviser/Administrator]
may discontinue all or part of its waiver at any time. With this fee waiver,
the Fund's actual total operating expenses are expected to be as follows:
CORE FIXED INCOME FUND 0.20%
For more information about these fees, see "Investment Adviser and Sub-Advisers"
and "Distribution of Fund Shares."
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. The Example assumes that you
invest $10,000 in the Fund for the time periods indicated and that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, that Fund operating expenses remain the same, and
that you reinvest all dividends and distributions. Although your actual costs
and returns might be different, your approximate costs of investing $10,000 in
the Fund would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
CORE FIXED INCOME FUND $XXX $XXX $XXX $XXX
</TABLE>
Page 23 of 40
<PAGE>
HIGH YIELD BOND FUND
FUND SUMMARY
INVESTMENT GOAL Total return
SHARE PRICE VOLATILITY High
PRINCIPAL INVESTMENT STRATEGY Utilizing a sub-adviser that has high
yield investment expertise, the Fund
invests in high yield, high risk
securities
INVESTMENT STRATEGY
The High Yield Bond Fund invests primarily in fixed income securities rated
below investment grade ("junk bonds"), including corporate bonds and debentures,
convertible and preferred securities, and zero coupon obligations. In managing
the Fund's assets, the Sub-Adviser selects securities that offer a high current
yield as well as total return potential. The Fund's securities are diversified
as to issuers and industries. The Fund's average weighted maturity may vary,
and will generally not exceed ten years. There is no limit on the maturity or
on the credit quality of any security.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
The prices of the Fund's fixed income securities respond to economic
developments, particularly interest rate changes, as well as to perceptions
about the creditworthiness of individual issuers, including governments.
Generally, the Fund's fixed income securities will decrease in value if interest
rates rise and vice versa, and the volatility of lower rated securities is even
greater than that of higher rated securities. Also, longer-term securities are
generally more volatile, so the average maturity or duration of these securities
affects risk.
Junk bonds involve greater risks of default or downgrade and are more volatile
than investment grade securities. Junk bonds involve a greater risk of price
declines than investment grade securities due to actual or perceived changes in
an issuer's creditworthiness. In addition, issuers of junk bonds may be more
susceptible than other issuers to economic downturns. Junk bonds are subject to
the risk that the issuer may not be able to pay interest or dividends and
ultimately to repay principal upon maturity. Discontinuation of these payments
could substantially adversely affect the market value of the security.
The Fund is also subject to the risk that its market segment, high yield
securities, may underperform other fixed income market segments or the fixed
income markets as a whole.
PERFORMANCE INFORMATION
As of September 30, 1999, the High Yield Bond Fund had not commenced operations,
and did not have a performance history.
Page 24 of 40
<PAGE>
FUND FEES AND EXPENSES
THIS TABLE DESCRIBES THE HIGHEST FEES AND EXPENSES THAT YOU MAY CURRENTLY PAY IF
YOU BUY AND HOLD SHARES OF THE FUND.
ANNUAL FUND OPERATING EXPENSES (EXPENSES DEDUCTED FROM FUND ASSETS)
<TABLE>
<S> <C>
Investment Advisory Fees 0.49%
Distribution (12b-1) Fees None
Other Expenses 0.14%*
-----
Total Annual Fund Operating Expenses 0.63%**
</TABLE>
- --------------------------------------------------------------------------------
* Other expenses are based on estimated amounts for the current fiscal year.
** The Fund's total actual annual fund operating expenses for the current
fiscal year are expected to be less than the amount shown above because the
[Adviser/Administrator] will voluntarily waive a portion of its fee in order to
keep total operating expenses at a specified level. The [Adviser/Administrator]
may discontinue all or part of its waiver at any time. With this fee waiver,
the Fund's actual total operating expenses are expected to be as follows:
HIGH YIELD BOND FUND 0.47%
For more information about these fees, see "Investment Adviser and Sub-Advisers"
and "Distribution of Fund Shares."
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. The Example assumes that you
invest $10,000 in the Fund for the time periods indicated and that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, that Fund operating expenses remain the same, and
that you reinvest all dividends and distributions. Although your actual costs
and returns might be different, your approximate costs of investing $10,000 in
the Fund would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
HIGH YIELD BOND FUND $XXX $XXX
</TABLE>
Page 25 of 40
<PAGE>
INTERNATIONAL FIXED INCOME FUND
FUND SUMMARY
INVESTMENT GOAL Capital appreciation and current income
SHARE PRICE VOLATILITY High
PRINCIPAL INVESTMENT STRATEGY Utilizing a specialist sub-adviser, the
Fund invests in investment grade fixed
income securities of foreign government
and corporate issuers
INVESTMENT STRATEGY
The International Fixed Income Fund invests primarily in foreign government,
corporate, and mortgage-backed securities. In selecting investments for the
Fund, the Sub-Adviser chooses investment grade securities issued by corporations
and governments located in various developed foreign countries, looking for
opportunities for capital appreciation and gain, as well as current income. The
Fund's portfolio is not hedged against currency fluctuations relative to the
U.S. dollar. There are no restrictions on the Fund's average portfolio maturity
or on the maturity of any specific security.
Due to its investment strategy, the Fund may buy and sell securities frequently.
This may result in higher transaction costs and additional capital gains tax
liabilities.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
The prices of the Fund's fixed income securities respond to economic
developments, particularly interest rate changes, as well as to perceptions
about the creditworthiness of individual issuers, including governments.
Generally, the Fund's fixed income securities will decrease in value if interest
rates rise and vice versa, and the volatility of lower rated securities is even
greater than that of higher rated securities. Also, longer-term securities are
generally more volatile, so the average maturity or duration of these securities
affects risk. In the case of foreign securities, price fluctuations will
reflect international economic and political events, as well as changes in
currency valuations relative to the U.S. dollar. The Fund also is subject to
the risk that its market segment, developed international fixed income
securities, may underperform other fixed income market segments or the fixed
income markets as a whole.
Investing in issuers located in foreign countries poses distinct risks since
political and economic events unique to a country or region will affect those
markets and their issuers. These events will not necessarily affect the U.S.
economy or similar issuers located in the United States. In addition,
investments in foreign countries are generally denominated in a foreign
currency. As a result, changes in the value of those currencies compared to the
U.S. dollar may affect (positively or negatively) the value of a Fund's
investments. These currency movements may happen separately from and in
response to events that do not otherwise affect the value of the security in the
issuer's home country. These various risks will be even greater for investments
in emerging market countries since political turmoil and rapid changes in
economic conditions are more likely to occur in these countries.
Page 26 of 40
<PAGE>
The Fund invests a portion of its assets in securities issued by European
issuers. On January 1, 1999, the countries participating in the European
Monetary Union (EMU) implemented a new currency unit, the euro, which is
reshaping financial markets, banking systems and monetary policies in Europe and
other parts of the world. Although it is not possible to predict the eventual
impact of the euro implementation plan on the Funds, the transition to the euro
may change the economic environment and behavior of investors, particularly in
European markets.
The Fund is non-diversified, which means that it may invest in the securities of
relatively few issuers. As a result, the Fund may be more susceptible to a
single adverse economic or political occurrence affecting one or more of these
issuers, and may experience increased volatility due to its investments in those
securities.
PERFORMANCE INFORMATION
As of September 30, 1999, the International Fixed Income Fund had not commenced
operations, and did not have a performance history.
FUND FEES AND EXPENSES
THIS TABLE DESCRIBES THE HIGHEST FEES AND EXPENSES THAT YOU MAY CURRENTLY PAY IF
YOU BUY AND HOLD SHARES OF THE FUND.
ANNUAL FUND OPERATING EXPENSES (EXPENSES DEDUCTED FROM FUND ASSETS)
<TABLE>
<S> <C>
Investment Advisory Fees 0.45%
Distribution (12b-1) Fees None
Other Expenses 0.32%*
-----
Total Annual Fund Operating Expenses 0.77%**
</TABLE>
- --------------------------------------------------------------------------------
* Other expenses are based on estimated amounts for the current fiscal year.
** The Fund's total actual annual fund operating expenses for the current
fiscal year are expected to be less than the amount shown above because the
[Adviser/Administrator] will voluntarily waive a portion of its fee in order to
keep total operating expenses at a specified level. The [Adviser/Administrator]
may discontinue all or part of its waiver at any time. With this fee waiver,
the Fund's actual total operating expenses are expected to be as follows:
INTERNATIONAL FIXED INCOME FUND 0.61%
For more information about these fees, see "Investment Adviser and Sub-Advisers"
and "Distribution of Fund Shares."
Page 27 of 40
<PAGE>
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. The Example assumes that you
invest $10,000 in the Fund for the time periods indicated and that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, that Fund operating expenses remain the same, and
that you reinvest all dividends and distributions. Although your actual costs
and returns might be different, your approximate costs of investing $10,000 in
the Fund would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
INTERNATIONAL FIXED INCOME FUND $XXX $XXX
</TABLE>
Page 28 of 40
<PAGE>
MORE INFORMATION ABOUT THE FUNDS' INVESTMENTS
This prospectus describes the Funds' primary strategies, and the Funds will
normally invest at least 65% of their assets in the types of securities
described in this prospectus. However, each Fund also may invest in other
securities, use other strategies and engage in other investment practices.
These investments and strategies, as well as those described in this prospectus,
are described in detail in the Funds' Statement of Additional Information (SAI).
The investments and strategies described throughout this prospectus are those
that the Sub-Advisers use under normal conditions. During unusual economic or
market conditions or for temporary defensive or liquidity purposes, each Fund
may invest up to 100% of its assets in cash, money market instruments,
repurchase agreements and short-term obligations that would not ordinarily be
consistent with the Funds' objectives. A Fund will do so only if the Adviser or
Sub-Advisers believe that the risk of loss outweighs the opportunity for capital
gains and higher income. Of course, there is no guarantee that any Fund will
achieve its investment goal.
INVESTMENT ADVISER AND SUB-ADVISERS
SEI INVESTMENTS MANAGEMENT CORPORATION (SIMC) ACTS AS THE MANAGER OF MANAGERS OF
THE FUNDS, AND IS RESPONSIBLE FOR THE INVESTMENT PERFORMANCE OF THE FUNDS SINCE
IT ALLOCATES EACH FUND'S ASSETS TO ONE OR MORE SUB-ADVISERS AND RECOMMENDS
HIRING OR CHANGING SUB-ADVISERS TO THE BOARD OF TRUSTEES. Each Sub-Adviser
makes investment decisions for the assets it manages and continuously reviews,
supervises and administers its investment program. SIMC oversees the
Sub-Advisers to ensure compliance with the Funds' investment policies and
guidelines, and monitors each Sub-Adviser's adherence to its investment style.
The Board of Trustees supervises SIMC and the Sub-Advisers; establishes policies
that they must follow in their management activities; and oversees the hiring
and termination of Sub-Advisers recommended by SIMC. SIMC pays the Sub-Advisers
out of the investment advisory fees it receives (described below).
SIMC, an SEC-registered adviser, serves as the Adviser to the Funds. As of
May 31, 1999, SIMC had approximately $44 billion in assets under management.
For the fiscal year ended May 31, 1999, SIMC received investment advisory fees
as follows:
<TABLE>
<S> <C>
LARGE CAP FUND X.XX%
LARGE CAP VALUE FUND X.XX%*
LARGE CAP GROWTH FUND X.XX%*
SMALL CAP FUND X.XX%
INTERNATIONAL EQUITY FUND X.XX%
EMERGING MARKETS EQUITY FUND X.XX%*
CORE FIXED INCOME FUND X.XX%
HIGH YIELD BOND FUND X.XX%*
INTERNATIONAL FIXED INCOME FUND X.XX%*
</TABLE>
* Not in operation as of May 31, 1999.
Page 29 of 40
<PAGE>
SUB-ADVISERS AND PORTFOLIO MANAGERS
LARGE CAP FUND:
ALLIANCE CAPITAL MANAGEMENT L.P.: A committee of investment professionals at
Alliance Capital Management L.P. manages a portion of the assets of the Large
Cap Fund.
LSV ASSET MANAGEMENT, L.P.: Josef Lakonishok, Andrei Shleifer and Robert Vishny
of LSV Asset Management, L.P. ("LSV"), serve as portfolio managers of a portion
of the assets of the Large Cap Fund. They are officers and partners of LSV. An
affiliate of SIMC owns an interest in LSV. SIMC pays LSV a fee, which is
calculated and paid monthly, based on an annual rate of .20% of the average
monthly market value of the assets of the Fund managed by LSV.
MELLON EQUITY ASSOCIATES, LLP: William P. Rydell and Robert A. Wilk of Mellon
Equity Associates, LLP ("Mellon Equity"), serve as portfolio managers of a
portion of the assets of the Large Cap Fund. Mr. Rydell is the President and
Chief Executive Officer of Mellon Equity, and has been managing individual and
collective portfolios at Mellon Equity since 1982. Mr. Wilk is a Senior Vice
President and Portfolio Manager of Mellon Equity, and has been involved with
securities analysis, quantitative research, asset allocation, trading, and
client services at Mellon Equity since April 1990.
PROVIDENT INVESTMENT COUNSEL, INC.: George E. Handtmann III and Jeffrey J.
Miller of Provident Investment Counsel, Inc. ("Provident"), serve as portfolio
managers of a portion of the assets of the Large Cap Fund. Mr. Handtmann has
been with Provident since 1982, and Mr. Miller has been with Provident since
1972.
SANFORD C. BERNSTEIN & CO., INC.: Lewis A. Sanders and Marilyn Goldstein Fedak
of Sanford C. Bernstein & Co., Inc. ("Bernstein"), serve as portfolio managers
of a portion of the assets of the Large Cap Fund. Mr. Sanders has been employed
by Bernstein since 1969, and is currently Chairman of the Board, Chief Executive
Officer, and a Director of Bernstein. Ms. Fedak, Chief Investment
Officer--Large Capitalization Domestic Equities and a Director of Bernstein, has
been employed by Bernstein since 1984.
TCW FUNDS MANAGEMENT INC.: Glen E. Bickerstaff of TCW Funds Management Inc.
("TCW") serves as portfolio manager of a portion of the assets of the Large Cap
Fund. Mr. Bickerstaff is a Managing Director of TCW, and has over 18 years of
investment experience dedicated to investing large cap growth securities. Mr.
Bickerstaff joined TCW in May, 1998 after 10 years at Transamerica Investment
Services, where he served as Vice President and Senior Portfolio Manager.
LARGE CAP VALUE FUND:
LSV ASSET MANAGEMENT, L.P.: Josef Lakonishok, Andrei Shleifer and Robert Vishny
of LSV Asset Management, L.P. ("LSV"), serve as portfolio managers of a portion
of the assets of the Large Cap Value Fund. They are officers and partners of
LSV. An Affiliate of SIMC owns an interest in LSV. SIMC pays LSV a fee, which
is calculated and paid monthly, based on an annual rate of .20% of the average
monthly market value of the assets of the Fund managed by LSV.
Page 30 of 40
<PAGE>
MELLON EQUITY ASSOCIATES, LLP: William P. Rydell and Robert A. Wilk of Mellon
Equity Associates, LLP ("Mellon Equity"), serve as portfolio managers of a
portion of the assets of the Large Cap Value Fund. Mr. Rydell is the President
and Chief Executive Officer of Mellon Equity, and has been managing individual
and collective portfolios at Mellon Equity since 1982. Mr. Wilk is a Senior
Vice President and Portfolio Manager of Mellon Equity, and has been involved
with securities analysis, quantitative research, asset allocation, trading, and
client services at Melon Equity since April 1990.
SANFORD C. BERNSTEIN & CO., INC.: Lewis A. Sanders and Marilyn Goldstein Fedak
of Sanford C. Bernstein & Co., Inc. ("Bernstein"), serve as portfolio managers
of a portion of the assets of the Large Cap Value Fund. Mr. Sanders has been
employed by Bernstein since 1969, and is currently Chairman of the Board, Chief
Executive Officer, and a Director of Bernstein. Ms. Fedak, Chief Investment
Officer - Large Capitalization Domestic Equities and a Director of Bernstein,
has been employed by Bernstein since 1984.
LARGE CAP GROWTH FUND:
ALLIANCE CAPITAL MANAGEMENT, L.P.: A committee of investment professionals at
Alliance Capital Management L.P. manages a portion of the assets of the Large
Cap Growth Fund.
PROVIDENT INVESTMENT COUNSEL, INC.: George E. Handtmann III and Jeffrey J.
Miller of Provident Investment Counsel, Inc. ("Provident"), serve as a portfolio
managers of a portion of the assets of the Large Cap Growth Fund. Mr. Handtmann
has been with Provident since 1982, and Mr. Miller has been with Provident since
1972.
TCW FUNDS MANAGEMENT INC.: Glen E. Bickerstaff of TCW Funds Management Inc.
("TCW") serves as portfolio manager of a portion of the assets of the Large Cap
Growth Fund. Mr. Bickerstaff is a Managing Director of TCW, and has over 18
years of investment experience dedicated to investing large cap growth
securities. Mr. Bickerstaff joined TCW in May, 1998 after 10 years at
Transamerica Investment Services, where he served as Vice President and Senior
Portfolio Manager.
SMALL CAP FUND:
ARTISAN PARTNERS LIMITED PARTNERSHIP: Scott Satterwhite of Artisan Partners
Limited Partnership ("Artisan") serves as portfolio manager of a portion of the
assets of the Small Cap Fund. Mr. Satterwhite, a managing director of Artisan,
has been with Artisan since 1996. Prior to joining Artisan, Mr. Satterwhite was
a portfolio manager at Wachovia Bank, N.A.
BOSTON PARTNERS ASSET MANAGEMENT, L.P.: Wayne J. Archambo, C.F.A., of Boston
Partners Asset Management, L.P. ("BPAM"), serves as portfolio manager of a
portion of the assets of the Small Cap Fund. He has been employed by BPAM since
its organization, and has 14 years experience investing in equities. Prior to
joining BPAM, Mr. Archambo was employed at The Boston Company Asset Management,
Inc. ("TBCAM"), from 1989 through April 1995. He created TBCAM's small cap
value product in 1992.
FURMAN SELZ CAPITAL MANAGEMENT, LLC: Matthew S. Price and David C. Campbell of
Furman Selz Capital Management, LLC ("Furman Selz"), serve as portfolio managers
of a portion of the assets of the Small Cap Fund. Mr. Price and Mr. Campbell
have been with Furman Selz for over 5 and 7 years, respectively. Prior to
Joining Furman Selz, Mr. Price and Mr. Campbell were Senior Portfolio Managers
at Value Line Asset Management.
Page 31 of 40
<PAGE>
LSV ASSET MANAGEMENT, L.P.: Josef Lakonishok, Andrei Shleifer and Robert Vishny
of LSV Asset Management, L.P. ("LSV"), serve as portfolio managers of a portion
of the assets of the Small Cap Fund. They are officers and partners of LSV. An
affiliate of SIMC owns an interest in LSV. SIMC pays LSV a fee, which is
calculated and paid monthly, based on an annual rate of .50% of the average
monthly market value of the assets of the Fund managed by LSV.
MELLON EQUITY ASSOCIATES, LLP: William P. Rydell and Robert A. Wilk of Mellon
Equity Associates, LLP ("Mellon Equity"), serve as portfolio managers of a
portion of the assets of the Small Cap Fund. Mr. Rydell is the President and
Chief Executive Officer of Mellon Equity, and has been managing individual and
collective portfolios at Mellon Equity since 1982. Mr. Wilk is a Senior Vice
President and Portfolio Manager of Mellon Equity, and has been involved with
securities analysis, quantitative research, asset allocation, trading, and
client services at Mellon Equity since April 1990.
NICHOLAS-APPLEGATE CAPITAL MANAGEMENT: Arthur E. Nicholas and John Kane of
Nicholas-Applegate Capital Management ("Nicholas-Applegate"), serve as portfolio
managers of a portion of the assets of the Small Cap Fund. Mr. Nicholas is the
founder and Chief Investment Officer of the firm. Under the supervision of Mr.
Nicholas, the U.S. Systematic team is responsible for the day to day management
of the Small Cap Growth Fund's assets. Mr. Kane is the lead portfolio manager
of the U.S. Systematic team. He has been a fund manager and investment team
leader since June 1994. Prior to joining Nicholas-Applegate, he had 25 years of
investment/economics experience with ARCO Investment Management Company and
General Electric Company.
POLYNOUS CAPITAL MANAGEMENT, INC.: Kevin Wenck, founder and President of
Polynous Capital Management, Inc. ("Polynous"), serves as portfolio manager of a
portion of the assets of the Small Cap Fund. Prior to founding Polynous, Mr.
Wenck was a portfolio manager at LGT Asset Management. He has over 20 years of
investment experience.
RS INVESTMENT MANAGEMENT, L.P.: Jim Callinan of RS Investment Management, L.P.
(formerly, Robertson Stephens Investment Management, L.P.) ("RSIM"), serves as
portfolio manager of a portion of the assets of the Small Cap Fund. Mr.
Callinan is a managing director of RSIM. He joined RSIM in June 1996 after nine
years at Putnam Investments ("Putnam") in Boston, where he served as a portfolio
manager of the Putnam OTC Emerging Growth Fund. Mr. Callinan also served as a
specialty growth research analyst and portfolio manager of both the Putnam
Emerging Information Science Trust Fund and the Putnam Emerging Health Sciences
Trust Fund while at Putnam.
SAWGRASS ASSET MANAGEMENT, LLC: Dean McQuiddy of Sawgrass Asset Management, LLC
("Sawgrass"), serves as portfolio manager of a portion of the assets of the
Small Cap Growth Fund. Mr. McQuiddy, a founding Principal of Sawgrass, has 12
years of investment experience. Prior to joining Sawgrass, he was a portfolio
manager at Barnett Capital Advisors.
WALL STREET ASSOCIATES: William Jeffery III and Kenneth F. McCain of Wall
Street Associates ("WSA") serve as portfolio managers of a portion of the assets
of the Small Cap Fund. Each is a controlling principal of WSA. They each have
over 27 years of investment management experience. David Baratta, who joined
WSA in 1999, also serves as a portfolio manager of a portion of the assets of
the Small Cap Fund. Prior to joining WSA, Mr. Baratta was a portfolio manager
of Morgan Grenfek, Inc. for 5 years. He has over 18 years of investment
experience.
Page 32 of 40
<PAGE>
INTERNATIONAL EQUITY FUND:
ACADIAN ASSET MANAGEMENT, INC.: A committee of investment professionals at
Acadian Asset Management, Inc. manages a portion of the assets of the
International Equity Fund.
CAPITAL GUARDIAN TRUST COMPANY: A committee of investment professionals at
Capital Guardian Trust Company manages a portion of the assets of the
International Equity Fund.
OECHSLE INTERNATIONAL ADVISORS, LLC: S. Dewey Keesler, Jr. of Oechsle
International Advisors, LLC ("Oechsle"), serves as portfolio manager of a
portion of the assets of the International Equity Fund. Prior to joining
Oechsle in 1995, Mr. Keesler was a Portfolio Manager and Investment Director for
the State of Wisconsin Investment Board and has over 17 years of investment
experience.
SCOTTISH WIDOWS INVESTMENT MANAGEMENT LIMITED: Albert Morillo of Scottish
Widows Investment Management Limited ("Scottish Widows") serves as portfolio
manager of a portion of the assets of the International Equity Fund. Mr.
Morillo joined Scottish Widows as a UK analyst in 1985, and became head of the
European Team in 1991. Mr. Morillo sits on the Investment Policy Committee and
has asset allocation responsibilities for the firm's global equity accounts.
Mr. Morillo has been a member of the European Team since 1986.
SG YAMAICHI ASSET MANAGEMENT COMPANY, LTD., SG PACIFIC ASSET MANAGEMENT, INC.,
AND SGY ASSET MANAGEMENT (SINGAPORE) LTD.: Marco Wong and Hiroyoshi Nakagawa of
SG Yamaichi Asset Management Co., Ltd. ("SG Yamaichi"), SG Pacific Asset
Management, Inc. ("SG Pacific"), and SGY Asset Management (Singapore) Ltd.
("SGY"), serve as portfolio managers of a portion of the assets of the
International Equity Fund. Mr. Wong leads the management team for the assets of
the Fund allocated to SG Pacific, SGY and SG Yamaichi. Mr. Wong has been with
SG Yamaichi since 1986. Mr. Nakagawa oversees the Japan investment team in
Tokyo, and also serves as portfolio manager for the International Equity Fund.
Mr. Nakagawa joined SG Yamaichi in 1977.
EMERGING MARKETS EQUITY FUND:
CORONATION ASSET MANAGEMENT (PROPRIETARY) LIMITED: Anthony Gibson and Louis
Stassen of Coronation Asset Management (Proprietary) Limited ("Coronation")
serve as portfolio managers of a portion of the assets of the Emerging Markets
Equity Fund. Prior to joining Coronation in 1993, Mr. Gibson, the head of
Coronation's Investment Committee, and Mr. Stassen, the head of Coronation's
research department, worked at Syfrets Managed Assets for seven years and one
year, respectively. Prior to joining Syfrets Managed Assets, Mr. Stassen worked
as an Investment Analyst for Allan Gray Investment Counsel.
CREDIT SUISSE ASSET MANAGEMENT LIMITED: Glenn Wellman and Isabel Knight of
Credit Suisse Asset Management Limited ("Credit Suisse") serve as portfolio
managers of a portion of the assets of the Emerging Markets Equity Fund. Mr.
Wellman is a Managing Director of Credit Suisse. Prior to joining Credit Suisse
in 1993, he was a Director and Senior Vice President at Alliance Capital
Limited. Ms. Knight is a Director of Credit Suisse. Prior to joining Credit
Suisse in 1997, she was Senior Fund Manager at Foreign and Colonial from 1995 to
1997. From 1992 to 1995, Ms. Knight was a Portfolio Manager for Morgan Stanley
Asset Management.
MORGAN STANLEY ASSET MANAGEMENT INC.: Robert L. Meyer, Michael Perl and Andy
Skov of Morgan
Page 33 of 40
<PAGE>
Stanley Asset Management Inc. ("MSAM") serve as portfolio managers of a portion
of the assets of the Emerging Markets Equity Fund. Mr. Meyer is a Managing
Director and joined MSAM in 1989 after working for the law firm of Irell &
Manella. Mr. Perl is a Vice President and joined MSAM after 6 years at Bankers
Trust Australia, where he served as a Portfolio Manager. Mr. Skov is a
Principal and joined MSAM after 4 years as an Associate at Bankers Trust.
NICHOLAS-APPLEGATE CAPITAL MANAGEMENT: Arthur E. Nicholas of Nicholas-Applegate
Capital Management ("Nicholas-Applegate") serves as portfolio manager of a
portion of the assets of the Emerging Markets Equity Fund. Mr. Nicholas is the
founder and Chief Investment Officer of the firm, and oversees the Firm's
investment teams. The Emerging Markets team is co-managed by Pedro Marcal and
Eswar Menon. Mr. Marcal joined Nicholas-Applegate in 1984. Mr. Menon joined
Nicholas-Applegate in 1995, and has 5 years' prior experience with Koeneman
Capital Management in Singapore.
PARAMETRIC PORTFOLIO ASSOCIATES: Clifford Quisenberry of Parametric Portfolio
Associates ("Parametric") serves as portfolio manager of a portion of the assets
of the Emerging Markets Equity Fund. Mr. Quisenberry, CFA, is a Vice President
and Portfolio Manager of Parametric. He joined Parametric in 1994, and has
eleven years' investment experience.
SG PACIFIC ASSET MANAGEMENT, INC. AND SGY ASSET MANAGEMENT (SINGAPORE) LTD.:
Marco Wong of SG Pacific Asset Management, Inc. ("SG Pacific") and SGY Asset
Management (Singapore) Ltd. ("SGY"), serves as portfolio manager of a portion of
the assets of the Emerging Markets Equity Fund. Mr. Wong leads the management
team for the assets of the Fund allocated to SG Pacific and SGY. Mr. Wong has
been with SG Yamaichi Asset Management Co., Ltd., the parent of SGY and SG
Pacific, since 1986.
CORE FIXED INCOME FUND:
BLACKROCK, INC.: Keith Anderson and Andrew Phillips of BlackRock, Inc.
("BlackRock"), serve as portfolio managers of a portion of the assets of the
Core Fixed Income Fund. Mr. Anderson is a Managing Director and Co-Head of
Portfolio Management at BlackRock, and has 14 years' experience investing in
fixed income securities. Mr. Phillips is a Principal and portfolio manager with
primary responsibility for the management of the firm's investment activities in
fixed-rate mortgage securities.
FIRSTAR INVESTMENT RESEARCH & MANAGEMENT COMPANY, LLC: Charles Groeschell of
Firstar Investment Research & Management Company, LLC ("FIRMCO"), serves as
portfolio manager of a portion of the assets of the Core Fixed Income Fund. Mr.
Groeschell is a Senior Vice President of FIRMCO, and has been employed by FIRMCO
or its affiliates since 1983. He has 16 years experience in fixed income
management.
WESTERN ASSET MANAGEMENT COMPANY: A committee of investment professionals at
Western Asset Management Company manages a portion of the assets of the Core
Fixed Income Fund.
HIGH YIELD BOND FUND:
CREDIT SUISSE ASSET MANAGEMENT: Richard J. Lindquist, C.F.A., of Credit Suisse
Asset Management (formerly, BEA Associates) ("CSAM") serves as portfolio manager
of the High Yield Bond Fund. Mr. Lindquist joined CSAM in 1995 as a result of
CSAM's acquisition of CS First Boston Investment Management, and has had 15
years of investment management experience, all of which were with high yield
bonds. Prior to joining CS First Boston, Mr. Lindquist was with Prudential
Insurance Company of America where he managed high yield funds totaling
approximately $1.3 billion.
Page 34 of 40
<PAGE>
INTERNATIONAL FIXED INCOME FUND:
STRATEGIC FIXED INCOME, L.L.C.: Kenneth Windheim, Gregory Barnett and David
Jallits of Strategic Fixed Income, L.L.C. ("Strategic"), serve as portfolio
managers of the International Fixed Income Fund. Mr. Windheim is the President
of Strategic. Prior to joining Strategic, Mr. Windheim was the Chief Investment
Officer and Managing Director of the group which managed global fixed income
portfolios at Prudential Asset Management. Prior to joining Strategic, Mr.
Barnett was portfolio manager for the Pilgrim Multi-Market Income Fund. Prior
to that, he was vice president and senior fixed income portfolio manager at
Lexington Management. Prior to joining Strategic, Mr. Jallits was Senior
Portfolio Manager for a hedge fund at Teton Partners. From 1992 to 1993, he was
Vice President and Global Fixed Income Portfolio Manager at The Putnam
Companies.
PURCHASING AND SELLING FUND SHARES
This section tells you how to buy or purchase (sometimes called "redeem") shares
of the Funds.
The Funds offer shares only to Eligible Investors that have signed an Investment
Management Agreement with SIMC. For information on how to open an account and
set up procedures for placing transactions, call 1-800-DIAL- SEI.
HOW TO PURCHASE FUND SHARES
You may purchase shares on any day that the New York Stock Exchange is open for
business (a Business Day).
Eligible Investors (as defined above) may purchase Class A shares by placing
orders with the Funds' Transfer Agent (or its authorized agent). Institutions
and intermediaries that use certain SEI proprietary systems may place orders
electronically through those systems. Cash investments must be transmitted or
delivered in federal funds to the Funds' wire agent by the close of business on
the same day the order is placed. The Funds may reject any purchase order if
they determine that accepting the order would not be in the best interests of
the Funds or their shareholders.
When you purchase or sell Fund shares through certain financial institutions
(rather than directly from the Funds), you may have to transmit your purchase
and sale requests to these financial institutions at an earlier time for your
transaction to become effective that day. This allows these financial
institutions time to process your requests and transmit them to the Funds.
Certain other Intermediaries, including certain broker-dealers and shareholder
organizations, are authorized to accept purchase, redemption and exchange
requests for Fund shares. These requests are normally executed at the NAV next
determined after the intermediary receives the request. These authorized
intermediaries are responsible for transmitting requests and delivering funds on
a timely basis.
Eligible investors who deal directly with a financial institution or financial
intermediary will have to follow the institution's or intermediary's procedures
for transacting with the Funds. For more information about how to purchase or
sell Fund shares through your financial institution, you should contact your
financial institution directly. Investors may be charged a fee for purchase
and/or redemption transactions effectuated through certain of these
broker-dealers or other financial intermediaries.
Page 35 of 40
<PAGE>
The price per share (the offering price) will be the NAV next determined after
the Funds receive your purchase order. Each Fund's NAV is calculated once each
Business Day at the regularly-scheduled close of normal trading on the New York
Stock Exchange (normally, 4:00 p.m. Eastern time). So, for you to receive the
current Business Day's NAV, generally the Funds (or an authorized agent) must
receive your purchase order before 4:00 p.m. Eastern time.
HOW THE FUNDS CALCULATE NAV
NAV for one Fund share is the value of that share's portion of all of the net
assets in the Fund. In calculating NAV, each Fund generally values its
investment portfolio at their market price. If market prices are unavailable or
the Funds think that they are unreliable, fair value prices may be determined in
good faith using methods approved by the Board of Trustees. Some Funds hold
portfolio securities that are listed on foreign exchanges. These securities may
trade on weekends or other days when the Funds do not calculate NAV. As a
result, the market value of these Funds' investments may change on days when you
cannot purchase or sell Fund shares.
MINIMUM PURCHASES
To purchase shares for the first time, you must invest at least $100,000 in any
Fund. The Funds may accept investments of smaller amounts at their discretion.
HOW TO SELL YOUR FUND SHARES
Holders of Fund shares may sell shares on any Business Day by following the
procedures established when they opened their account or accounts. If you have
questions, call 1-800-DIAL-SEI. If you own your shares through an account with
a broker or other institution, contact that broker or institution to sell your
shares. Your financial institution or intermediary may charge you a fee for its
services. The sale price of each share will be the next NAV determined after
the Funds (or their authorized intermediary) receive your request.
RECEIVING YOUR MONEY
Normally, the Funds will send your sale proceeds within three Business Days
after the Funds receive your request, but it may take up to seven days. Your
proceeds will be wired to your bank account.
REDEMPTIONS IN KIND
The Funds generally pay sale proceeds in cash. However, under unusual
conditions that make the payment of cash unwise (and for the protection of the
Funds' remaining shareholders) the Funds might pay all or part of your
redemption proceeds in liquid securities with a market value equal to the
redemption price (redemption in kind). Although it is highly unlikely that your
shares would ever be redeemed in kind, you would probably have to pay brokerage
costs to sell the securities distributed to you, as well as taxes on any capital
gains from the sale as with any redemption.
SUSPENSION OF YOUR RIGHT TO SELL YOUR SHARES
The Funds may suspend your right to sell your shares if the NYSE restricts
trading, the SEC declares an emergency or for other reasons. More information
about this is in the SAI.
Page 36 of 40
<PAGE>
TELEPHONE TRANSACTIONS
Purchasing and selling Fund shares over the telephone is extremely convenient,
but not without risk. Although the Funds have certain safeguards and procedures
to confirm the identity of callers and the authenticity of instructions, the
Funds are not responsible for any losses or costs incurred by following
telephone instructions the Funds reasonably believe to be genuine. If you or
your financial institution transact with the Funds over the telephone, you will
generally bear the risk of any loss.
DISTRIBUTION OF FUND SHARES
SEI Investments Distribution Co. (SIDCo.) is the distributor of the shares of
the Funds. SIDCo. receives no compensation for distributing the Funds' shares.
DIVIDENDS AND DISTRIBUTIONS
The Funds distribute their investment income periodically as a dividend to
shareholders. It is the policy of the International Fixed Income, Emerging
Markets Equity and International Equity Funds to pay dividends periodically, the
Core Fixed Income and High Yield Bond Funds to pay dividends monthly, and the
Small Cap, Large Cap, Large Cap Value and Large Cap Growth Funds to pay
dividends quarterly. The Funds make distributions of capital gains, if any, at
least annually.
You will receive dividends and distributions in cash unless otherwise stated.
TAXES
PLEASE CONSULT YOUR TAX ADVISOR REGARDING YOUR SPECIFIC QUESTIONS ABOUT FEDERAL,
STATE AND LOCAL INCOME TAXES. Below the Funds have summarized some important
tax issues that affect the Funds and their shareholders. This summary is based
on current tax laws, which may change.
Each Fund will distribute substantially all of its investment income and capital
gains, if any. The dividends and distributions you receive may be subject to
federal, state and local taxation, depending upon your tax situation. If so,
they are taxable whether or not you reinvest them. Income distributions are
generally taxable at ordinary income tax rates. Capital gains distributions are
generally taxable at the rates applicable to long-term capital gains. EACH SALE
OF FUND SHARES IS A TAXABLE EVENT.
The International Equity, Emerging Markets Equity, and International Fixed
Income Funds may be able to pass along a tax credit for foreign income taxes
they pay. The Funds will notify you if they give you this credit.
The Funds use a tax management technique known as "highest in, first out."
Using this technique, the portfolio holdings that have experienced the smallest
gain or largest loss are sold first in an effort to minimize capital gains and
enhance after-tax returns.
MORE INFORMATION ABOUT TAXES IS IN THE FUNDS' SAI.
Page 37 of 40
<PAGE>
FINANCIAL HIGHLIGHTS
The tables that follow present performance information about the shares of the
Large Cap, Small Cap, International Equity and Core Fixed Income Funds. This
information is intended to help you understand each Fund's financial performance
for the past five years, or, if shorter, the period of the Fund's operations.
Some of this information reflects financial information for a single Fund share.
The total returns in the tables represent the rate that you would have earned
(or lost) on an investment in a Fund, assuming you reinvested all of your
dividends and distributions.
This information has been audited by________________, independent public
accountants. Their report, along with each Fund's financial statements, appears
in the Funds' annual report that accompanies the SAI. You can obtain the Funds'
annual report, which contains more performance information, at no charge by
calling 1-800-DIAL-SEI.
Page 38 of 40
<PAGE>
SEI INSTITUTIONAL INVESTMENTS TRUST
INVESTMENT ADVISER
SEI Investments Management Corporation
One Freedom Valley Drive
Oaks, PA 19456
DISTRIBUTOR
SEI Investments Distribution Co.
One Freedom Valley Drive
Oaks, PA 19456
LEGAL COUNSEL
Morgan, Lewis & Bockius LLP
More information about the Funds is available without charge through the
following:
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI dated September 30, 1999, contains more detailed information about SEI
Institutional Investments Trust. The SAI is on file with the SEC and is
incorporated by reference into this prospectus. This means that the SAI, for
legal purposes, is a part of this prospectus.
ANNUAL AND SEMI-ANNUAL REPORTS
These reports list the Funds' holdings and contain information from the Fund's
managers about strategies and recent market conditions and trends and their
impact on performance. The reports also contain detailed financial information
about the Funds.
TO OBTAIN MORE INFORMATION:
BY TELEPHONE: Call 1-800-DIAL-SEI
BY MAIL: Write to the Funds at:
One Freedom Valley Drive
Oaks, PA 19456
BY INTERNET: http://www.seic.com
Page 39 of 40
<PAGE>
FROM THE SEC: You can also obtain the SAI or the Annual Report and Semi-Annual
Reports, as well as other information about SEI Institutional Investments Trust,
from the SEC's website ("http://www.sec.gov"). You may review and copy
documents at the SEC Public Reference Room in Washington, DC (for information
call 1-800-SEC-0330). You may request documents by mail from the SEC, upon
payment of a duplicating fee, by writing to: Securities and Exchange Commission,
Public Reference Section, Washington, DC 20549-6009.
The Funds' Investment Company Act registration number is 811-7257.
Page 40 of 40
<PAGE>
SEI INSTITUTIONAL INVESTMENTS TRUST
Adviser:
SEI Investments Management Corporation
Administrator:
SEI Investments Fund Management
Distributor:
SEI Investments Distribution Co.
Sub-Advisers:
Acadian Asset Management, Inc.
Alliance Capital Management L.P.
Artisan Partners Limited Partnership
BlackRock, Inc.
Boston Partners Asset Management, L.P.
Capital Guardian Trust Company
Coronation Asset Management (Proprietary)
Limited
Credit Suisse Asset Management
Credit Suisse Asset Management, Limited
Firstar Investment Research & Management
Company, LLC
Furman Selz Capital Management LLC
LSV Asset Management, L.P.
Mellon Equity Associates, LLP
Morgan Stanley Asset Management Inc.
Nicholas-Applegate Capital Management
Oechsle International Advisers, LLC
Parametric Portfolio Associates
Polynous Capital Management, Inc.
Provident Investment Counsel, Inc.
RS Investment Management, L.P.
Sanford C. Bernstein & Co., Inc.
Sawgrass Asset Management, LLC
Scottish Widows Investment Management
Limited
SG Pacific Asset Management, Inc.,
SGY Pacific Asset Management (Singapore)
Limited and SG Yamaichi Asset
Management Co., Ltd.
Strategic Fixed Income, LLC
TCW Funds Management Inc.
Wall Street Associates
Western Asset Management Company
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 September 30, 1999. A Prospectus
may be obtained through SEI Investments Distribution Co., Oaks, Pennsylvania
19456.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
The Trust................................................................. S-3
Investment Objectives and Policies........................................ S-3
Description of Permitted Investments and Risk Factors..................... S-6
Description of Ratings.................................................... S-23
Investment Limitations.................................................... S-25
The Administrator and Transfer Agent...................................... S-26
The Adviser and Sub-Advisers.............................................. S-27
Distribution and Shareholder Servicing.................................... S-29
Trustees and Officers of the Trust........................................ S-29
Performance............................................................... S-32
Purchase and Redemption of Shares......................................... S-33
Taxes..................................................................... S-33
Fund Transactions......................................................... S-35
Description of Shares..................................................... S-37
Limitation of Trustees' Liability......................................... S-37
Voting.................................................................... S-37
Shareholder Liability..................................................... S-38
5% Shareholders........................................................... S-38
Master/Feeder Option...................................................... S-
Custodian................................................................. S-39
Experts................................................................... S-39
Legal Counsel............................................................. S-40
Financial Statements...................................................... S-40
</TABLE>
September 30, 1999
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THE TRUST
SEI Institutional Investments Trust (the "Trust") is an open-end management
investment company that has diversified and non-diversified funds. The Trust was
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 shares. Each share of each fund represents an equal proportionate
interest in that fund with each other share of that fund.
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. 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. 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.
This Statement of Additional Information relates to the following funds:
Large Cap, Large Cap Value, Large Cap Growth, Small Cap, Core Fixed Income, High
Yield Bond, International Fixed Income, Emerging Markets Equity and
International Equity Funds (each a "Fund" and, together, the "Funds").
INVESTMENT OBJECTIVES AND POLICIES
LARGE CAP FUND--The investment objective of the Large Cap Fund is long-term
growth of capital and income.
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). Any
remaining assets may be invested in investment grade fixed income securities,
including variable and floating rate securities, or in equity securities of
smaller companies that the Fund's advisers believe are appropriate in light of
the Fund's objective. The Fund may also purchase illiquid securities, shares of
other investment companies and real estate investment trusts ("REITs"),
when-issued and delayed-delivery securities and zero coupon obligations. The
Fund may also borrow money and lend its securities to qualified borrowers.
LARGE CAP VALUE FUND--The investment objective of the Large Cap Value Fund
is long-term growth of capital and income. There can be 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 a diversified portfolio of high quality, income producing common
stocks of large companies (I.E., companies with market capitalizations of more
than $1 billion) which, in the opinion of the advisers, are undervalued in the
marketplace at the time of purchase. In general, the advisers characterize high
quality securities as those that have above-average reinvestment rates. The
advisers also consider other factors, such as earnings and dividend growth
prospects, as well as industry outlook and market share. Any remaining assets
may be invested in other equity securities and in investment grade fixed income
securities. Investment grade fixed income securities are securities that are
rated at least BBB by Standard & Poor's Corporation ("S&P") or Baa by Moody's
Investors Service, Inc. ("Moody's"). The Fund may also borrow money, invest in
illiquid securities, when-issued and delayed-delivery securities, shares of real
estate investment trusts ("REITs"), and shares of other investment companies,
and lend its securities to qualified buyers.
LARGE CAP GROWTH FUND--The investment objective of the Large Cap Growth Fund
is capital appreciation. There can be no assurance that the Fund will achieve
its investment objective.
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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) which, in the opinion of the
advisers, possess significant growth potential. Any remaining assets may be
invested in investment grade fixed income securities or in equity securities of
smaller companies that the Fund's advisers believe are appropriate in light of
the Fund's objective. The Fund may also borrow money, invest in illiquid
securities, when-issued and delayed-delivery securities, shares of REITs, and
shares of other investment companies, and lend its securities to qualified
buyers.
SMALL CAP FUND--The investment objective of the Small Cap Fund is capital
appreciation.
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 $2 billion at the time of purchase). Any
remaining assets may be invested in investment grade fixed income securities,
including variable and floating rate securities, or in equity securities of
larger companies that the Fund's advisers believe are appropriate in light of
the Fund's objective. The Fund may also purchase illiquid securities, shares of
other investment companies and REITs, when-issued and delayed-delivery
securities and zero coupon obligations. The Fund may also borrow money and lend
its securities to qualified borrowers.
INTERNATIONAL EQUITY FUND--The International Equity Fund seeks to provide
capital appreciation.
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. Any remaining assets will be invested in securities
of emerging markets issuers, U.S. or non-U.S. cash reserves and money market
instruments, as well as variable and floating rate securities. The Fund may also
purchase illiquid securities, shares of other investment companies, obligations
of supranational entities, when-issued and delayed-delivery securities and zero
coupon obligations. The Fund may also borrow money, enter into forward foreign
currency and swap contracts and lend its securities to qualified buyers.
Securities of non-U.S. issuers purchased by the Fund may be purchased on
exchanges in foreign markets, on U.S. registered exchanges or the domestic or
foreign over-the-counter markets.
EMERGING MARKETS EQUITY FUND--The Emerging Markets Equity Fund seeks to
provide capital appreciation.
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
defines an emerging market country as any country the economy and market of
which the World Bank or the United Nations considers to be emerging or
developing. The Fund's advisers consider emerging market issuers to include
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 may invest any remaining assets in investment grade fixed income
securities, including variable and floating rate securities, of emerging market
governments and companies, and may invest up to 5% of its total assets in
securities that are rated below investment grade. 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. Bonds rated below investment grade are often
referred to as "junk bonds." Such securities involve greater risk of default or
price volatility than investment grade securities.
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When in the Fund's adviser's 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 and 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 on
exchanges in foreign markets, on U.S. registered exchanges or the domestic or
foreign over-the-counter markets, and may be purchased in initial public
offerings. The Fund may also purchase illiquid securities, including "special
situation" securities, shares of other investment companies, obligations of
supranational entities, when-issued and delayed-delivery securities and zero
coupon obligations. The Fund may also borrow money, enter into forward foreign
currency transactions and swap contracts and lend its securities to qualified
buyers.
CORE FIXED INCOME FUND--The investment objective of the Core Fixed Income
Fund is current income consistent with the preservation of capital.
Under normal market conditions, the Fund will invest at least 65% of its
total assets in investment grade fixed income securities. The Fund may acquire
all types of fixed income securities issued by domestic and foreign private and
governmental issuers, including mortgage-backed and asset-backed securities and
variable and floating rate 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, construction loans, Yankee obligations, illiquid securities,
shares of other investment companies, obligations of supranational agencies,
warrants, when-issued and delayed-delivery securities and zero coupon
obligations. The Fund may also borrow money and lend its securities to qualified
borrowers.
The Core Fixed Income Fund invests in a portfolio with a dollar-weighted
average duration that will, under normal market conditions, stay within plus or
minus 20% of what the advisers believe to be the average duration of the
domestic bond market as a whole. The advisers base their analysis of the average
duration of the domestic bond market on bond market indices which they believe
to be representative. The advisers currently use the Lehman Aggregate Bond Index
for this purpose.
HIGH YIELD BOND FUND--The investment objective of the High Yield Bond Fund
is to maximize total return.
Under normal market conditions, the Fund will invest at least 65% of its
total assets in fixed income securities that are below investment grade, I.E.,
rated below the top four rating categories by a NRSRO at the time of purchase,
or, if not rated, determined to be of comparable quality by the Fund's advisers.
Below investment grade securities are commonly referred to as "junk bonds," and
generally entail increased credit and market risk. See "Lower Rated Securities"
in "General Investment Policies and Risk Factors." The achievement of the Fund's
investment objective may be more dependent on the advisers' own credit analysis
than would be the case if the Fund invested in higher rated securities. There is
no bottom limit on the ratings of high yield securities that may be purchased
and held by the Fund. These securities may have predominantly speculative
characteristics or may be in default. Any remaining assets may be invested in
equity, investment grade fixed income and money market securities that the
adviser believes are appropriate in light of the Fund's objective.
The Fund may acquire all types of fixed income securities issued by domestic
and foreign private and governmental issuers, including mortgage-backed and
asset-backed securities, and variable and floating rate securities. The Fund may
also invest in Yankee obligations, illiquid securities, shares of other
investment companies and REITs, warrants, when-issued and delayed-delivery
securities, zero coupon obligations, pay-in-kind and deferred payment
securities. The Fund may also borrow money, enter into
S-5
<PAGE>
forward foreign currency contracts, and lend its securities to qualified buyers.
The Fund's advisers 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 Fund's advisers will consider ratings, but it will perform its own
analyses and will not rely principally on ratings. The Fund's advisers 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.
INTERNATIONAL FIXED INCOME FUND--The International Fixed Income Fund seeks
to provide capital appreciation and current income.
Under normal market conditions, the Fund will invest in at least 65% of its
total assets in investment grade fixed income securities of issuers located in
at least three countries other than the United States.
The International Fixed Income Fund may invest its remaining assets in
obligations issued or guaranteed as to principal and interest by the United
States Government, its agencies or instrumentalities ("U.S. Government
securities") and preferred stocks of U.S. and foreign issuers. The Fund also may
engage in short selling against the box. The Fund may also invest in securities
of companies located in and governments of emerging market countries, as defined
below. Investments in emerging markets countries will not exceed 5% of the
Fund's total assets at the time of purchase. Such investments entail different
risks than investments in securities of companies and governments of more
developed, stable nations.
The Fund may acquire all types of fixed income securities issued by foreign
private and governmental issuers, including mortgage-backed and asset-backed
securities, and variable and floating rate securities. The Fund may invest in
traditional fixed income securities such as bonds and debentures, and in
structured securities that derive interest and principal payments from specified
assets or indices. All such investments will be in investment grade securities
denominated in various currencies, including the European Currency Unit. The
Fund may also invest in illiquid securities, shares of other investment
companies, obligations of supranational entities, warrants, when-issued and
delayed-delivery securities and zero coupon obligations. The Fund may also
borrow money, enter into forward foreign currency transactions and swap
contracts and lend its securities to qualified buyers. Furthermore, although the
Fund will concentrate its investments in relatively developed countries, the
Fund may invest up to 20% of its assets in fixed income securities of issuers
in, or denominated in the currencies of, developing countries and that are
investment-grade securities or determined by the advisers to be of comparable
quality to such securities and debt obligations at the time of purchase.
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 advisers' 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.
There can be no assurance that the Funds will achieve their respective
investment objectives.
DESCRIPTION OF PERMITTED INVESTMENTS
AMERICAN DEPOSITARY RECEIPTS ("ADRs"), EUROPEAN DEPOSITARY RECEIPTS
("EDRs"), CONTINENTAL DEPOSITARY RECEIPTS ("CDRs") AND GLOBAL DEPOSITARY
RECEIPTS ("GDRs")--ADRs are securities, typically issued by a U.S. financial
institution (a "depositary"),
S-6
<PAGE>
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
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 reciept'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.
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. 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. The Core Fixed Income,
High Yield Bond and International Fixed Income Funds may invest in asset-backed
securities. A Fund may also invest in other asset-backed securities that may be
created in the future if the advisers determine that they are suitable.
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.
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.
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<PAGE>
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").
CONSTRUCTION LOANS--in general, are mortgages on multifamily homes that are
insured by the Federal Housing Administration (FHA) under various federal
programs of the National Housing Act of 1934 and its amendments. Several FHA
programs have evolved to ensure the construction financing and permanent
mortgage financing on multifamily residences, nursing homes, elderly residential
facilities, and health care units. Project loans typically trade in two forms:
either as FHA- or GNMA-insured pass-through securities. In this case, a
qualified issuer issues the pass-through securities while holding the underlying
mortgage loans as collateral. Regardless of form, all projects are
government-guaranteed by the U.S. Department of Housing and Urban Development
(HUD) through the FHA insurance fund. The credit backing of all FHA and GNMA
projects derives from the FHA insurance fund, and so projects issued in either
form enjoy the full faith and credit backing of the U.S. Government.
Most project pools consist of one large mortgage loan rather than numerous
smaller mortgages, as is typically the case with agency single-family mortgage
securities. As such, prepayments on projects are driven by the incentives most
mortgagors have to refinance, and are very project-specific in nature. However,
to qualify for certain government programs, many project securities contain
specific prepayment restrictions and penalties.
Under multifamily insurance programs, the government insures the
construction financing of projects as well as the permanent mortgage financing
on the completed structures. This is unlike the single-family mortgage market,
in which the government only insures mortgages on completed homes. Investors
purchase new projects by committing to fund construction costs on a monthly
basis until the project is built. Upon project completion, an investors
construction loan commitments are converted into a proportionate share of the
final permanent project mortgage loan. The construction financing portion of a
project trades in the secondary market as an insured Construction Loan
Certificate (CLC). When the project is completed, the investor exchanges all the
monthly CLCs for an insured Permanent Loan Certificate (PLC). The PLC is an
insured pass-through security backed by the final mortgage on the completed
property. As such, PLCs typically have a thirty-five to forty year maturity,
depending on the type of final project. There are vastly more PLCs than CLCs in
the market, owing to the long economic lives of the project structures. While
neither CLCs or PLCs are as liquid as agency single-family mortgage securities,
both are traded on the secondary market and would generally not be considered
illiquid. The benefit to owning these securities is a relatively high yield
combined with significant prepayment protection, which generally makes these
types of securities more attractive when prepayments are expected to be high in
the mortgage market. CLCs typically offer a higher yield due to the fact that
they are somewhat more administratively burdensome to account for.
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.
EQUITY SECURITIES--Equity securities represent ownership interests in a
company or corporation and consist of common stock, preferred stock, warrants
and other rights to acquire such instruments. Equity securities may be listed on
exchanges or traded in the over-the-counter market. 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.
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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.
FIXED INCOME SECURITIES--Fixed income securities consist primarily of debt
obligations issued by governments, corporations, municipalities and other
borrowers, but may also include structured securities that provide for
participation interests in debt obligations. 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 also affect the value of these investments.
Changes in the value of these securities will not affect cash income derived
from these securities, but will affect a Fund's net asset value.
Fixed income securities are considered investment grade if they are rated in
one of the four highest rating categories by a nationally recognized statistical
rating organization ("NRSRO"), or, if not rated, are determined to be of
comparable quality by the Fund's advisers. 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. Fixed income securities rated BBB or Baa lack outstanding
investment characteristics, and have speculative characteristics as well. In the
event a security owned by a Fund is downgraded, the adviser will review the
situation and take appropriate action with regard to the security.
FOREIGN SECURITIES--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. 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, 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. dollar, and a Fund may be affected favorably or
unfavorably by changes in the exchange rates or exchange or currency 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
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and net investment income and gains if any, to be distributed to shareholders by
a Fund. 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.
A Fund's investments in emerging markets can be considered speculative, and
therefore may offer higher potential for gains and losses than investments in
developed markets of the world. With respect to any emerging country, there may
be a greater potential for nationalization, expropriation or confiscatory
taxation, political changes, government regulation, social instability or
diplomatic developments (including war) which could affect adversely the
economies of such countries or investments in such countries. The economies of
developing countries generally are heavily dependent upon international trade
and, accordingly, have been and may continue to be adversely affected by trade
barriers, exchange or currency controls, managed adjustments in relative
currency values and other protectionist measures imposed or negotiated by the
countries with which they trade.
In addition to the risks of investing in emerging market country debt
securities, a Fund's investment in government, government-related and
restructured debt instruments are subject to special risks, including the
inability or unwillingness to repay principal and interest, requests to
reschedule or restructure outstanding debt, and requests to extend additional
loan amounts. A Fund may have limited recourse in the event of default on such
debt instruments.
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. A Fund may 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. 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. 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.
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 adviser 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 Fund will place assets in a segregated account to assure that its
obligations under forward foreign currency contracts are covered.
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FUTURES AND OPTIONS ON FUTURES--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.
An index futures contract is a bilateral agreement pursuant to which two
parties agree to take or make delivery of an amount of cash equal to a specified
dollar amount times the difference between the index value at the close of
trading of the contract and the price at which the futures contract is
originally struck. No physical delivery of the securities comprising the Index
is made; generally contracts are closed out prior to the expiration date of the
contract.
In order to avoid leveraging and related risks, when a Fund invests in
futures contracts, it will cover its position by depositing an amount of cash or
liquid securities, equal to the market value of the futures positions held, less
margin deposits, in a segregated account and that amount will be marked to
market on a daily basis.
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.
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. Illiquid securities include demand
instruments with a demand notice period exceeding seven days, securities for
which there is no active secondary market, and repurchase agreements with
durations over 7 days in length.
The Emerging Markets Equity Fund's advisers 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 advisers 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 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 advisers,
the potential benefits of such investments exceed the associated costs (which
includes any investment advisory fees
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charged by the investment companies) 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. A Fund may incur tax
liability to the extent it invests in the stock of a foreign issuer that
constitutes a "passive foreign investment company."
LOWER RATED SECURITIES--lower-rated bonds are 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. 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. 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 advisers 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, a Fund 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 also be affected by legislative and regulatory developments.
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.
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,
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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 value
and liquidity of high-yield, high-risk bonds, especially in a thin market.
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.
MONEY MARKET SECURITIES--Money market securities are high-quality dollar and
nondollar-denominated, 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 and governments that issue high-quality commercial paper or
similar securities; (v) repurchase agreements involving any of the foregoing
obligations entered into with highly-rated banks and broker-dealers; and (vi)
foreign government obligations.
MORTGAGE-BACKED SECURITIES--The Funds may invest in mortgage-backed
securities issued by GNMA and certain government-related organizations such as
Fannie Mae 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. 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 fifteen and thirty-year fixed-rate
mortgages, graduated payment mortgages, adjustable rate mortgages and balloon
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. 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
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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.
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 the Government National Mortgage Association ("GNMA"), Fannie Mae
and the Federal Home Loan Mortgage Company ("FHLMC"). Fannie Mae and FHLMC
obligations are not backed by the full faith and credit of the U.S. Government
as GNMA certificates are, but Fannie Mae and FHLMC securities are supported by
the instrumentalities' right to borrow from the U.S. Treasury. GNMA, Fannie Mae
and FHLMC each guarantee timely distributions of interest to certificate
holders. GNMA and Fannie Mae also each guarantee timely distributions of
scheduled principal.
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 Fannie Mae include Fannie Mae Guaranteed Mortgage Pass-
Through Certificates (also known as "Fannie Maes") which are solely the
obligations of Fannie Mae and are not backed by or entitled to the full faith
and credit of the United States. Fannie Mae is a government-sponsored
organization owned entirely by private stockholders. Fannie Maes are guaranteed
as to timely payment of the principal and interest by Fannie Mae.
Mortgage-backed securities issued by FHLMC include FHLMC Mortgage Participation
Certificates (also known as "Freddie Macs" or "PCs"). 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. 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. 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.
PRIVATE PASS-THROUGH SECURITIES: These are mortgage-backed securities
issued by a non-governmental entity, such as a trust. 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.
COMMERCIAL MORTGAGE-BACKED SECURITIES ("CMBS"): CMBS are generally
multi-class or pass-through securities backed by a mortgage loan or a pool of
mortgage loans secured by commercial property, such as industrial and warehouse
properties, office buildings, retail space and shopping malls, multifamily
properties and cooperative apartments. The commercial mortgage loans that
underlie CMBS have certain distinct characteristics. Commercial mortgage loans
are generally not amortizing or not fully amortizing. That is, at their maturity
date, repayment of the remaining principal balance or "balloon" is due and is
repaid
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through the attainment of an additional loan of sale of the property. Unlike
most single family residential mortgages, commercial real estate property loans
often contain provisions which substantially reduce the likelihood that such
securities will be prepaid. The provisions generally impose significant
prepayment penalties on loans and, in some cases there may be prohibitions on
principal prepayments for several years following origination.
COLLATERALIZED MORTGAGE OBLIGATIONS ("CMOS"): CMOs are debt obligations of
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 is issued with a specific fixed or floating coupon rate and has a
stated maturity or final distribution date.
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. Guaranteed REMIC pass-through certificates ("REMIC Certificates")
issued by Fannie Mae or FHLMC represent beneficial ownership interests in a
REMIC trust consisting principally of mortgage loans or Fannie Mae, FHLMC or
GNMA-guaranteed mortgage pass-through certificates.
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 while the other class may receive all of the principal
payments. SMBs are extremely sensitive to changes in interest rates because of
the impact thereon of prepayment of principal on the underlying mortgage
securities. The market for SMBs is not as fully developed as other markets; SMBs
therefore may be illiquid.
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. It is possible that payments on one class of parallel pay
security may be deferred or subordinated to payments on other classes. 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.
MORTGAGE DOLLAR ROLLS--Mortgage "dollar rolls" or "covered rolls," are
transactions in which a Fund sells 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. At the end of the roll commitment period, a Fund may or may not take
delivery of the securities it has contracted 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. A "covered roll" is a
specific type of mortgage 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 mortgage dollar roll transaction. As used herein
the term "mortgage dollar roll" refers to mortgage dollar rolls that are not
"covered rolls." 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.
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To avoid any leveraging concerns, the Fund will place liquid securities in a
segregated account in an amount sufficient to cover its repurchase obligation.
OBLIGATIONS OF SUPRANATIONAL AGENCIES--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 governmental members, or "stockholders," usually make initial capital
contributions to the supranational entity and, in many cases, are committed to
make additional capital contributions if the supranational entity is unable to
repay its borrowings. Obligations of Supranational entities may be purchased by
the Core Fixed Income, International Fixed Income, Emerging Markets Equity and
International Equity 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.
OPTIONS--A Fund may purchase and write put and call options on indices or
securities and enter into related closing transactions. A put option on a
security 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 on a security 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.
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 price of the
option. Alternatively, a Fund may choose to terminate an option position by
entering into a closing transaction. 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.
All options written on indices or securities must be covered. When a Fund
writes an option or security on an index, it will establish a segregated account
containing cash or liquid securities 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. 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. If a 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.
A Fund may purchase put and call options on securities 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 on securities 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 writes 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.
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When a put option of which a Fund is the writer is exercised, the Fund will be
required to purchase the underlying securities at a price in excess of the
market value of such securities.
A segregated account is maintained to cover the difference between the
closing price of the index and the exercise price of the index option, expressed
in dollars multiplied by a specified number. Thus, unlike options on individual
securities, the ability of a Fund to enter into closing transactions depends
upon the existence of a liquid secondary market for such transactions.
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.
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.
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 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.
PUT TRANSACTIONS--All of the Funds 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 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 advisers believe present
minimum credit risks, and the Fund's advisers 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 portfolio security in the open market or wait until the portfolio
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
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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 portfolio
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 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.
REITs--REITs are trusts that invest primarily in commercial real estate or
real estate-related loans. A real estate investment trust ("REIT") is not taxed
on income distributed to its shareholders or unitholders if it complies with
regulatory requirements relating to its organization, ownership, assets and
income, and with a regulatory requirement that it distribute to its shareholders
or unitholders at least 95% of its taxable income for each taxable year.
Generally, REITs can be classified as Equity REITs, Mortgage REITs and Hybrid
REITs. Equity REITs invest the majority of their assets directly in real
property and derive their income primarily from rents and capital gains from
appreciation realized through property sales. Mortgage REITs invest the majority
of their assets in real estate mortgages and derive their income primarily from
interest payments. Hybrid REITs combine the characteristics of both Equity and
Mortgage REITs. By investing in REITs indirectly through the Fund, shareholders
will bear not only the proportionate share of the expenses of the Fund, but
also, indirectly, similar expenses of underlying REITs.
A Fund may be subject to certain risks associated with the direct
investments of the REITs. REITs may be affected by changes in the value of their
underlying properties and by defaults by borrowers or tenants. Mortgage REITs
may be affected by the quality of the credit extended. Furthermore, REITs are
dependent on specialized management skills. Some REITs may have limited
diversification and may be subject to risks inherent in financing a limited
number of properties. REITs depend generally on their ability to generate cash
flow to make distributions to shareholders or unitholders, and may be subject to
defaults by borrowers and to self-liquidations. In addition, a REIT may be
affected by its failure to qualify for tax-free pass-through of income under the
Code or its failure to maintain exemption from registration under the 1940 Act.
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
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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
collateral securities. A Fund's advisers 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 advisers 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. Repurchase Agreements are considered loans under the
1940 Act.
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 loaned securities. A Fund will
continue to receive interest on the loaned securities 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 advisers to be of good
standing and when, in the judgment of the Fund's advisers, 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.
SHORT SALES--Selling securities short involves selling securities the Fund
does not own (but has borrowed) in anticipation of a decline in the market price
of such securities. To deliver the securities to the buyer, the seller must
arrange through a broker to borrow the securities and, in so doing, the seller
becomes obligated to replace the securities borrowed at their market price at
the time of replacement. In a short sale, the proceeds the seller receives from
the sale are retained by a broker until the seller replaces the borrowed
securities. The seller 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. A Fund may only 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.
SWAPS, CAPS, FLOORS AND COLLARS--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.
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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. 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.
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. 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.
Swap agreements will tend to shift a Fund's investment exposure from one
type of investment to another. Depending on how they are used, swap agreements
may increase or decrease the overall volatility of the Fund's investments and
their share price or yield.
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 High Yield Bond, International Fixed Income, Emerging Markets
Equity and International Equity Funds may invest in time deposits.
U.S. GOVERNMENT AGENCY OBLIGATIONS--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 FHLMC, 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., GNMA securities), others are
supported by the right of the issuer to borrow from the Treasury (E.G., Federal
Farm Credit Bank securities), while still others are supported only by the
credit of the instrumentality (E.G., Fannie Mae securities). 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.
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 or 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."
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
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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.
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.
These 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 advisers 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. 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.
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.
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.
WHEN-ISSUED AND DELAYED DELIVERY 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. 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. 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 it appropriate to do so. When investing in
when-issued securities, a Fund will not accrue income until delivery of the
securities and will invest in such securities only for purposes of actually
acquiring the securities and not for purposes of leveraging.
One form of when-issued or delayed-delivery security that a Portfolio may
purchase is a "to be announced" ("TBA") mortgage-backed security. A TBA
mortgage-backed security transaction arises when a mortgage-backed security,
such as a GNMA pass-through security, is purchased or sold with specific pools
that will constitute that GNMA pass-through security to be announced on a future
settlement date.
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 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.
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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. 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.
The Yankee obligations selected for a Fund will adhere to the same quality
standards as those utilized for the selection of domestic debt obligations.
YEAR 2000
The Trust depends on the smooth functioning of computer systems in almost
every aspect of its business. Like other mutual funds, business and individuals
around the world, the Trust could be adversely affected if the computer systems
used by its service providers do not properly process dates on and after January
1, 2000 and distinguish between the year 2000 and the year 1900. The Trust has
asked its mission critical service providers whether they expect to have their
computer systems adjusted for the year 2000 transition, and have sought and
received assurances from each that its system is expected to accommodate the
year 2000 without material adverse consequences to the Trust. The Trust and its
shareholders may experience losses if these assurances prove to be incorrect or
as a result of year 2000 computer difficulties experienced by issuers of
portfolio securities or third parties, such as custodians, banks, broker-dealers
or others with which the Trust does business.
ZERO COUPON 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. Pay-in-kind
securities 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. 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 until a predetermined date, at
which time the stated coupon rate becomes effective and interest becomes payable
at regular intervals.
To avoid any leveraging concerns, the Fund will place cash or liquid
securities in a segregated account in an amount sufficient to cover its
repurchase obligation. 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. 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
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likely to respond to a greater degree to interest rate changes than are non-zero
coupon securities with similar maturity and credit qualities.
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 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. A Fund may have to dispose of its 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.
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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.
STANDARD & POOR'S SHORT-TERM RATINGS
<TABLE>
<S> <C>
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.
</TABLE>
DESCRIPTION OF DUFF & PHELPS' SHORT-TERM RATINGS
<TABLE>
<S> <C>
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.
</TABLE>
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<TABLE>
<S> <C>
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
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.
</TABLE>
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<TABLE>
<S> <C>
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.
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.
</TABLE>
INVESTMENT LIMITATIONS
FUNDAMENTAL POLICIES
The following investment limitations and the investment limitations in the
Prospectus are fundamental policies of the Trust and may not be changed without
shareholder approval.
A Fund may not:
1. With respect to 75% of its total assets, (i) 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 its total assets would be invested in the securities of such issuer; or
(ii) acquire more than 10% of the outstanding voting securities of any one
issuer. This restriction does not apply to the International Fixed Income
Fund.
2. Purchase any securities which would cause more than 25% of its total assets
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 securities issued or guaranteed
by the United States Government, its agencies or instrumentalities.
3. Issue any class of senior security or sell any senior security of which it
is the issuer, except that a Fund may borrow from any bank, provided that
immediately after any such borrowing there is asset coverage of at least
300% for all borrowings of the Fund, and further provided that, to the
extent that such borrowings exceed 5% of a Fund's total assets, all
borrowings shall be repaid before such Fund makes additional investments.
The term "senior security" shall not include any temporary borrowings that
do not exceed 5% of the value of such Fund's total assets at the time the
Fund makes such temporary borrowing. In addition, investment strategies that
either obligate a Fund to purchase securities or require a Fund to segregate
assets will not be considered borrowings or senior securities.
4. Make loans if, as a result, more than 33 1/3% of its total assets would be
lent to other parties, except that each Fund may (i) purchase or hold debt
instruments in accordance with its investment objective and policies; (ii)
enter into repurchase agreements; and (iii) lend its securities.
5. Purchase or sell real estate, physical commodities, or commodities
contracts, except that each Fund may purchase (i) marketable securities
issued by companies which own or invest in real estate (including real
estate investment trusts), commodities, or commodities contracts, and (ii)
commodities contracts relating to financial instruments, such as financial
futures contracts and options on such contracts.
6. Act as an underwriter of securities of other issuers except as it may be
deemed an underwriter in selling a portfolio security.
7. Invest in interests in oil, gas or other mineral exploration or development
programs and oil, gas or mineral leases.
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The foregoing percentage limitations will apply at the time of the purchase
of a security. Additional fundamental and non-fundamental investment limitations
are set forth in the Statement of Additional Information.
For purposes of the industry concentration limitation specified in the
prospectus, (i) utility companies will be divided according to their services,
for example, gas, gas transmission, electric and telephone will each be
considered a separate industry; (ii) financial service companies will be
classified according to end users of their services, for example, automabile
finance, bank finance and diversified finance will each be considered a separate
industry; (iii) supranational agencies will be deemed to be issuers conducting
their principal business activities in the same industry; and (iv) governmental
issuers within a particular country will be deemed to be conducting their
principal business activities in that same industry.
NON-FUNDAMENTAL POLICIES
The following investment limitations are non-fundamental policies of the
Trust and may be changed without shareholder approval.
A Fund may not:
1. Pledge, mortgage or hypothecate assets except to secure borrowings permitted
by the Fund's fundamental limitation on borrowing.
2. Invest in companies for the purpose of exercising control.
3. Purchase securities on margin or effect short sales, except that each Fund
may (i) obtain short-term credits as necessary for the clearance of security
transactions, (ii) provide initial and variation margin payments in
connection with transactions involving futures contracts and options on such
contracts, and (iii) make short sales "against the box" or in compliance
with the SEC's position regarding the asset segregation requirements of
section 18 of the 1940 Act.
4. Invest its assets in securities of any investment company, except as
permitted by the 1940 Act.
5. Purchase or hold illiquid securities, I.E., securities that cannot be
disposed of for their approximate carrying value in seven days or less
(which term includes repurchase agreements and time deposits maturing in
more than seven days) if, in the aggregate, more than 15% of its net assets
would be invested in illiquid securities.
6. Purchase securities which are not readily marketable if, in the aggregate,
more than 15% of its total assets would be invested in such securities.
THE ADMINISTRATOR AND TRANSFER AGENT
The Administration Agreement provides that the Administrator, SEI
Investments Fund Management ("SEI Management" or the "Administrator") 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 Administration
Agreement relates, except a loss resulting from willful misfeasance, bad faith
or gross negligence on the part of SEI Management in the performance of its
duties or from reckless disregard of its duties and obligations thereunder.
The continuance of the Administration 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 the Fund, and
(ii) by the vote of a majority of the Trustees of the Trust who are not parties
to the Administration 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 Administration 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 SEI
Management on not less than 30 days' nor
S-26
<PAGE>
more than 60 days' written notice. This Agreement shall not be assignable by
either party without the written consent of the other party.
The Administrator, a Delaware business trust, has its principal business
offices at Oaks, Pennsylvania 19456. SEI Investments Management Corporation
("SIMC"), a wholly-owned subsidiary of SEI Investments Company ("SEI
Investments"), is the owner of all beneficial interest in the Administrator. SEI
Investments and its subsidiaries and affiliates, including the Administrator,
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 and its affiliates also serve
as administrator or sub-administrator to the following other mutual funds: The
Achievement Funds Trust, The Advisors' Inner Circle Fund, Alpha Select Funds,
The Arbor Fund, ARK Funds, Armada Funds, Bishop Street Funds, Boston 1784
Funds-Registered Trademark-, CNI Charter Funds, Crestfunds, Inc., CUFUND, the
Expedition Funds, First American Funds, Inc., First American Investment Funds,
Inc., First American Strategy Funds, Inc., HighMark Funds, Huntington Funds, The
Nevis Funds, Oak Associates Funds, The Parkstone Advantage Fund, The PBHG Funds,
Inc., PBHG Insurance Series Fund, Inc., The Pillar Funds, SEI Asset Allocation
Trust, SEI Daily Income Trust, SEI Index Funds, SEI Institutional Managed Trust,
SEI Institutional International Trust, SEI Insurance Products Trust, SEI Liquid
Asset Trust, SEI Tax Exempt Trust, STI Classic Funds, STI Classic Variable Trust
and TIP Funds.
If operating expenses of any Fund exceed applicable limitations, SEI
Management will pay such excess. SEI Management 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 of 1986, as amended (the "Code"). The term "expenses" is defined in
such laws or regulations, and generally excludes brokerage commissions,
distribution expenses, taxes, interest and extraordinary expenses.
For the fiscal year ended May 31, 1999, the Funds paid fees to SEI
Management as follows:
<TABLE>
<CAPTION>
FEES PAID FEES
FUND (REIMBURSED) (000) WAIVED (000)
- -------------------------------------------------- ------------------ ------------
1999 1999
------------------ ------------
<S> <C> <C>
Large Cap Fund.................................... $ -- $ --
Large Cap Value Fund.............................. * *
Large Cap Growth Fund............................. * *
Small Cap Fund.................................... $ -- $ --
Core Fixed Income Fund............................ $ -- $ --
High Yield Bond Fund.............................. * *
International Fixed Income Fund................... * *
Emerging Markets Equity Fund...................... * *
International Equity Fund......................... $ -- $ --
</TABLE>
- ------------------------
* Not in operation during such period.
THE ADVISER AND THE SUB-ADVISERS
The Advisory Agreement and certain of the Sub-Advisory Agreements provide
that SEI Investments Management Corporation ("SIMC" or the "Adviser") 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. In addition, certain of the Sub-Advisory Agreements provide
that the Sub-Adviser shall not be protected against any
S-27
<PAGE>
liability to the Trust or its shareholders by reason of willful misfeasance, bad
faith or negligence on its part in the performance of its duties, or from
reckless disregard of its obligations or duties thereunder.
The continuance of each Advisory and Sub-Advisory 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 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 Adviser or Sub-Advisers, or by the Adviser or
Sub-Advisers on 90 days' written notice to the Trust.
SIMC and the Trust have obtained an exemptive order from the SEC that
permits SIMC, with the approval of the Trust's Board of Trustees, to retain
unaffiliated Sub-Advisers for a Fund without submitting the Sub-Advisory
agreement to a vote of the Fund's shareholders. The exemptive relief permits the
non-disclosure of amounts payable by SIMC under such Sub-Advisory agreements.
The Trust will notify shareholders in the event of any change in the identity of
the Sub-Advisers for a Fund.
For the fiscal year ended May 31, 1999, the Funds paid SIMC fees as follows:
<TABLE>
<CAPTION>
FUND
- -------------------------------------------------------------------------------
FEES PAID (000) FEE WAIVERS (000)
--------------- -----------------
1999 1999
--------------- -----------------
<S> <C> <C>
Large Cap Fund................................................................. $ -- $ --
Large Cap Value Fund........................................................... * *
Large Cap Growth Fund.......................................................... * *
Small Cap Fund................................................................. $ -- $ --
Core Fixed Income Fund......................................................... $ -- $ --
High Yield Bond Fund........................................................... * *
International Fixed Income Fund................................................ * *
Emerging Markets Equity Fund................................................... * *
International Equity Fund...................................................... $ -- $ --
</TABLE>
- ------------------------
* Not in operation during such period.
For the fiscal year ended May 31, 1999, SIMC paid the Sub-Advisers as
follows:
<TABLE>
<CAPTION>
FUND
- -------------------------------------------------------------------------------
FEES PAID (000) FEE WAIVERS (000)
--------------- -------------------
1999 1999
--------------- -------------------
<S> <C> <C>
Large Cap Fund................................................................. $ -- $ --
Large Cap Value Fund........................................................... * *
Large Cap Growth Fund.......................................................... * *
Small Cap Fund................................................................. $ -- $ --
Core Fixed Income Fund......................................................... $ -- $ --
High Yield Bond Fund........................................................... * *
International Fixed Income Fund................................................ * *
Emerging Markets Equity Fund................................................... * *
International Equity Fund...................................................... $ -- $ --
</TABLE>
- ------------------------
* Not in operation during such period.
S-28
<PAGE>
DISTRIBUTION
The Distributor, a wholly-owned subsidiary of SEI Investments, 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.
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 SEC 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.
TRUSTEES AND OFFICERS OF THE TRUST
The Trustees and Executive Officers of the Trust, their respective dates of
birth, 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 each
Executive Officer is SEI Investments Company, Oaks, Pennsylvania 19456. Certain
officers of the Trust also serve as officers of some or all of the following:
The Achievement Funds Trust, The Advisors' Inner Circle Fund, Alpha Select
Funds, The Arbor Fund, ARK Funds, Armada Funds, Bishop Street Funds, Boston 1784
Funds-Registered Trademark-, CNI Charter Funds, CrestFunds, Inc., CUFUND, The
Expedition Funds, First American Funds, Inc., First American Investment Funds,
Inc., First American Strategy Funds, Inc., HighMark Funds, Huntington Funds, The
Novis Fund, Inc., Oak Associates Funds, The Parkstone Advantage Fund, The
Parkstone Group of Funds, The PBHG Funds, Inc., PBHG Insurance Series Fund,
Inc., The Pillar Funds, SEI Asset Allocation Trust, SEI Daily Income Trust, SEI
Index Funds, SEI Institutional International Trust, SEI Institutional Managed
Trust, SEI Insurance Products Trust, SEI Liquid Asset Trust, SEI Tax Exempt
Trust, STI Classic Funds, STI Classic Variable Trust and TIP Funds, each of
which is an open-end management investment company managed by SEI Investments
Fund Management or its affiliates and is distributed by SEI Investments
Distribution Co. (the "Distributor").
ROBERT A. NESHER (DOB 08/17/46)--Chairman of the Board of
Trustees*--Currently performs various services on behalf of SEI Investments for
which Mr. Nesher is compensated. Executive Vice President of SEI Investments,
1986-1994. Director and Executive Vice President of the Adviser, the
Administrator and the Distributor, 1981-1994. Trustee of The Advisors' Inner
Circle Fund, The Arbor Fund, Boston 1784 Funds-Registered Trademark-, The
Expedition Funds, Oak Associates Funds, Pillar Funds, SEI Asset Allocation
Trust, SEI Daily Income Trust, SEI Index Funds, SEI Institutional Managed Trust,
SEI Institutional International Trust, SEI Insurance Products Trust, SEI Liquid
Asset Trust and SEI Tax Exempt Trust.
WILLIAM M. DORAN (DOB 05/26/40)--Trustee*--1701 Market Street, Philadelphia,
PA 19103. Partner, Morgan, Lewis & Bockius LLP (law firm), counsel to the Trust,
SEI Investments, the Adviser, the Administrator and the Distributor, Director
and Secretary of SEI Investments and Secretary of the Adviser, the Administrator
and the Distributor. Trustee of The Advisors' Inner Circle Fund. The Arbor Fund,
The Expedition Funds, Oak Associates Funds, SEI Asset Allocation Trust, SEI
Daily Income Trust, SEI Index Funds, SEI Institutional Managed Trust, SEI
Institutional International Trust, SEI Insurance Products Trust, SEI Liquid
Asset Trust and SEI Tax Exempt Trust.
S-29
<PAGE>
F. WENDELL GOOCH (DOB 12/03/32)--Trustee**--President, Orange County
Publishing Co., Inc.; Publisher, Paoli News and Paoli Republican; and Editor,
Paoli Republican, October 1981-January 1997. President, H&W Distribution, Inc.,
since July 1984. Executive Vice President, Trust Department, Harris Trust and
Savings Bank and Chairman of the Board of Directors of The Harris Trust Company
of Arizona before January 1981. Trustee of SEI Asset Allocation Trust, SEI Daily
Income Trust, SEI Index Funds, SEI Institutional Managed Trust, SEI
Institutional International Trust, SEI Insurance Products Trust, SEI Liquid
Asset Trust, SEI Tax Exempt Trust, STI Classic Funds and STI Classic Variable
Trust.
JAMES M. STOREY (DOB 04/12/31)--Trustee**--Partner, Dechert Price & Rhoads,
from September 1987-December 1993. Trustee of The Advisors' Inner Circle Fund,
The Arbor Fund, The Expedition Funds, Oak Associates Funds, SEI Asset Allocation
Trust, SEI Daily Income Trust, SEI Index Funds, SEI Institutional Managed Trust,
SEI Institutional International Trust, SEI Insurance Products Trust, SEI Liquid
Asset Trust, and SEI Tax Exempt Trust.
GEORGE J. SULLIVAN, JR. (DOB 11/13/42)--Trustee**--Chief Executive Officer,
Newfound Consultants Inc. since April 1997. General Partner, Teton Partners,
L.P., June 1991-December 1996; Chief Financial Officer, Noble Partners, L.P.,
March 1991-December 1996; Treasurer and Clerk, Peak Asset Management, Inc.,
since 1991; Trustee, Navigator Securities Lending Trust, since 1995. Trustee of
The Advisors' Inner Circle Fund, The Arbor Fund, The Expedition Funds, Oak
Associate Funds, SEI Asset Allocation Trust, SEI Daily Income Trust, SEI Index
Funds, SEI Liquid Asset Trust, SEI Institutional Managed Trust, SEI
Institutional International Trust, SEI Insurance Products Trust, and SEI Tax
Exempt Trust.
EDWARD D. LOUGHLIN (DOB 03/07/51)--President and Chief Executive
Officer--Executive Vice President and President--Asset Management Division of
SEI Investments since 1993. Executive Vice President of the Adviser and the
Administrator since 1994. Senior Vice President of the Distributor, 1986-1991;
Vice President of the Distributor, 1981-1986.
TODD B. CIPPERMAN (DOB 02/14/66)--Vice President and Assistant
Secretary--Vice President and Assistant Secretary of SEI Investments, the
Adviser, the Administrator and the Distributor since 1995. Associate, Dewey
Ballantine (law firm), 1994-1995. Associate, Winston & Strawn (law firm),
1991-1994.
JAMES R. FOGGO (DOB 06/30/64)--Vice President and Assistant Secretary--Vice
President and Assistant Secretary of SEI Investments since January 1998. Vice
President of the Administrator and Distributor since May 1999. Associate, Paul
Weiss, Rifkind, Wharton & Garrison (law firm), 1998. Associate, Baker & McKenzie
(law firm), 1995-1998, Associate, Battle Fowler L.L.P. (law firm), 1993-1995.
Operations Manager, The Shareholder Services Group, Inc., 1986-1990.
LYDIA A. GAVALIS (DOB 06/05/64)--Vice President and Assistant
Secretary--Vice President and Assistant Secretary of SEI Investments, the
Adviser, the Administrator and the Distributor since 1998. Assistant General
Counsel and Director of Arbitration, Philadelphia Stock Exchange, 1989-1998.
KATHY HEILIG (DOB 12/21/58)--Vice President and Assistant
Secretary--Treasurer of SEI Investments since 1997; Vice President and Treasurer
of the Adviser and the Administrator since 1997; Assistant Controller of SEI
Investments and Vice President of the Distributor since 1995; Vice President of
SEI Investments Company since 1991; Director of Taxes of SEI Investments Company
1987 to 1991. Tax Manager, Arthur Anderson LLP prior to 1987.
JOSEPH M. O'DONNELL (DOB 11/13/54)--Vice President and Assistant
Secretary--Vice President and Assistant Secretary of SEI Investments, the
Adviser, the Administrator and the Distributor since 1998. Vice President and
General Counsel, FPS Services, Inc., 1993-1997. Staff Counsel and Secretary,
Provident Mutual Family of Funds, 1990-1993.
CYNTHIA M. PARRISH (DOB 10/23/59)--Vice President and Assistant
Secretary--Vice President and Assistant Secretary of the SEI Investments, the
Adviser, the Administrator and the Distributor since August 1997. Branch Chief,
Division of Enforcement, U.S. Securities and Exchange Commission, January
1995-August 1997. Senior Counsel--Division of Enforcement, U.S. Securities and
Exchange Commission,
S-30
<PAGE>
September 1992-January 1995. Staff Attorney--Division of Enforcement, U.S.
Securities and Exchange Commission, September 1990-September 1992.
KEVIN P. ROBINS (DOB 04/15/61)--Vice President and Assistant
Secretary--Senior Vice President and General Counsel of SEI Investments, the
Adviser, the Administrator and the Distributor since 1994. Assistant Secretary
of SEI Investments since 1992; Secretary of the Adviser and the Administrator
since 1994. Vice President, General Counsel and Assistant Secretary of the
Adviser, the Administrator and the Distributor, 1992-1994. Associate, Morgan,
Lewis & Bockius LLP (law firm), 1988-1992.
LYNDA J. STRIEGEL (DOB 10/30/48)--Vice President and Assistant
Secretary--Vice President and Assistant Secretary of SEI Investments, the
Adviser, the Administrator and the Distributor since 1998. Senior Asset
Management Counsel, Barnett Banks, Inc. (1997-1998). Partner, Groom and
Nordberg, Chartered, 1996-1997. Associate General Counsel, Riggs Bank, N.A.,
1991-1995.
RICHARD W. GRANT (DOB 10/25/45)--Secretary--1701 Market Street,
Philadelphia, PA 19103. Partner, Morgan, Lewis & Bockius LLP (law firm), counsel
to the Trust, SEI Investments, the Adviser, the Administrator and the
Distributor.
MARK E. NAGLE (DOB 10/20/59)--Controller and Chief Financial
Officer--President and Senior Vice President of Fund Accounting and
Administration of the Administrator since 1998. Vice President of Fund
Accounting and Administration of the Administrator, 1996-1998. Vice President of
the Distributor since December 1997. Vice President, Fund Accounting, BISYS Fund
Services September 1995 to November 1996. Senior Vice President and Site
Manager, Fidelity Investments 1981 to September 1995.
- ------------------------
*Messrs. Nesher and Doran are Trustees who may be deemed to be "interested
persons" of the Trust as the term is defined in the 1940 Act.
**Messrs. Gooch, Storey and Sullivan serve as members of the Audit Committee of
the Trust.
Compensation of officers and affiliated Trustees of the Trust is paid by SEI
Management. The Trust pays the fees for unaffiliated Trustees. For the fiscal
year ended May 31, 1999, the Trust paid the following amounts to the Trustees.
<TABLE>
<CAPTION>
AGGREGATE PENSION OR TOTAL COMPENSATION FROM
COMPENSATION RETIREMENT BENEFITS ESTIMATED REGISTRANT AND TRUST
FROM REGISTRANT ACCRUED AS ANNUAL COMPLEX PAID TO TRUSTEES
NAME OF FOR FISCAL YEAR PART OF BENEFITS UPON FOR
PERSON, POSITION ENDED 5/31/99 FUND EXPENSES RETIREMENT FISCAL YEAR ENDED 5/31/98
- ----------------------------------- ----------------- ----------------------- -------------- --------------------------
<S> <C> <C> <C> <C>
F. Wendell Gooch, Trustee.......... $ -- $ 0 $ 0 $-- for services on 9
boards
Frank E. Morris, Trustee*.......... $ -- $ 0 $ 0 $-- for services on 9
boards
James M. Storey, Trustee........... $ -- $ 0 $ 0 $-- for services on 9
boards
Robert A. Nesher, Trustee.......... $ 0 $ 0 $ 0 $0 for services on 9
boards
William M. Doran, Trustee.......... $ 0 $ 0 $ 0 $0 for services on 9
boards
George J. Sullivan, Trustee........ $ -- $ 0 $ 0 $-- for services on 9
boards
</TABLE>
- ------------------------
* Mr. Morris had retired as of March 31, 1999.
Mr. Edward W. Binshadler is a Trustee Emeritus of the Trust. Mr. Binshadler
serves as a consultant to the Audit Committee and receives as compensation
$5,000 per Audit Committee meeting attended.
S-31
<PAGE>
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 such 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 power of 6 -1], where a =
dividends and interest earned during the period; b = expenses
accrued for the period (net of 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.
Actual yield will depend on such variables as asset quality, average asset
maturity, the type of instruments a Fund invests in, changes in interest rates
on money market instruments, changes in the expenses of the Fund and other
factors. For the 30-day period ending May 31, 1999, the yields for the Large
Cap, Small Cap and Core Fixed Income Funds were --%, --% and --%, respectively.
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 power of n = 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.
Based on the foregoing, the average annual total return for the Funds from
inception (June 14, 1996) through May 31, 1999 were as follows:
<TABLE>
<CAPTION>
AVERAGE ANNUAL
TOTAL RETURN
FUND SINCE INCEPTION
- ---------------------------------------------------------------------------------------- ---------------
<S> <C>
Large Cap Fund.......................................................................... --%
Large Cap Value Fund.................................................................... *
Large Cap Growth Fund................................................................... *
Small Cap Fund.......................................................................... --%
Core Fixed Income Fund.................................................................. --%
High Yield Bond Fund.................................................................... *
International Fixed Income Fund......................................................... *
Emerging Markets Equity Fund............................................................ *
International Equity Fund............................................................... --%
</TABLE>
- ------------------------
* Not in operation during such period.
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 advisers
in advertisements and/or sales literature for the Trust.
S-32
<PAGE>
PURCHASE AND REDEMPTION OF SHARES
Each Fund's securities are valued by SEI Management pursuant to valuations
provided by an independent pricing service (generally the last quoted sale
price). Fund's 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 ("Business Day")) 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.
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 Adviser, the Administrator, the Distributor,
the Sub-Advisers and/or the Custodian are not open for business. Currently, the
following holidays are observed by the Trust: New Year's Day, Martin Luther
King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day.
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 advisers 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
S-33
<PAGE>
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, 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) 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 (iii) 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 will generally, for
individual shareholders, 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 net capital gain 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 net
capital gain distribution.
Long-term capital gains are currently taxed at a maximum rate of 20% and
short-term capital gains are currently taxed at ordinary income tax rates.
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
S-34
<PAGE>
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 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
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 advisers 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 advisers
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 advisers
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. These provisions further require that commissions
paid to the Distributor by the Trust for 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 remuneration 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
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<PAGE>
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 advisers 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
advisers may, consistent with the interests of the Fund, select brokers on the
basis of the research services they provide to the Fund's advisers. 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 advisers will be in addition to and not in lieu of the services
required to be performed by a Fund's advisers under the Advisory and/or
Sub-Advisory Agreements. If in the judgement of a Fund's advisers the Funds, or
other accounts managed by the Fund's advisers, will be benefitted by
supplemental research services, the Fund's advisers 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 advisers will not necessarily be reduced
as a result of the receipt of such supplemental information.
In connection with transactions effected for Funds operating within the
"Manager of Managers" structure, under this policy, SIMC and the various firms
that serve as money managers to certain Funds of the Trust, in the exercise of
joint investment discretion over the assets of a Fund, may direct a portion of a
Fund's brokerage to the Distributor. All such transactions directed to the
Distributor must be accomplished in a manner that is consistent with the Trust's
policy to achieve best net results, and must comply with the Trust's procedures
regarding the execution of transactions through affiliated brokers.
For the fiscal year ended May 31, 1999, the Funds paid the following
brokerage fees:
<TABLE>
<CAPTION>
% OF TOTAL
TOTAL $ AMOUNT TOTAL $ AMOUNT % OF TOTAL BROKERED
OF BROKERAGE OF BROKERAGE BROKERAGE TRANSACTIONS TOTAL $ AMOUNT
COMMISSION COMMISSIONS COMMISSIONS EFFECTED THROUGH OF BROKERED
PAID IN 1999 PAID TO AFFILIATES PAID TO AFFILIATES AFFILIATES TRANSACTIONS
FUND (000) IN 1999 (000) IN 1999 IN 1999 IN 1999
- -------------------------------- -------------- ------------------ ------------------- ----------------- --------------
<S> <C> <C> <C> <C> <C>
Large Cap Fund.................. $ -- $0 0% 0% $ --
Large Cap Value Fund............ * * * * *
Large Cap Growth Fund........... * * * * *
Small Cap Fund.................. $ -- $0 0% 0% $ --
Core Fixed Income Fund.......... * $0 0% 0% $ --
High Yield Bond Fund............ * * * * *
International
Fixed Income Fund.............. * * * * *
Emerging Markets Equity Fund.... * * * * *
International Equity Fund....... $ -- $0 0% 0% $ --
<CAPTION>
TOTAL BROKERAGE
COMMISSIONS
PAID TO THE DISTRIBUTOR
IN CONNECTION WITH
REPURCHASE AGREEMENT
FUND TRANSACTIONS IN 1999
- -------------------------------- -----------------------
<S> <C>
Large Cap Fund.................. $0
Large Cap Value Fund............ *
Large Cap Growth Fund........... *
Small Cap Fund.................. $0
Core Fixed Income Fund.......... $0
High Yield Bond Fund............ *
International
Fixed Income Fund.............. *
Emerging Markets Equity Fund.... *
International Equity Fund....... $0
</TABLE>
- ------------------------------
* Not in operation during such period.
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<PAGE>
The portfolio turnover rate for each Fund for the fiscal year ended May 31,
1999 was as follows:
<TABLE>
<CAPTION>
TURNOVER RATE
FUND 1999
- ------------------------------------------------------------------------------- -------------
<S> <C>
Large Cap Fund................................................................. --%
Large Cap Value Fund........................................................... *
Large Cap Growth Fund.......................................................... *
Small Cap Fund................................................................. --%
Core Fixed Income Fund......................................................... --%
High Yield Bond Fund........................................................... *
International Fixed Income Fund................................................ *
Emerging Markets Equity Fund................................................... *
International Equity Fund...................................................... --%
</TABLE>
- ------------------------
* Not in operation during such period.
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.
VOTING
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.
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.
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<PAGE>
As of September 1, 1999, SEI Trust Company owned a controlling interest (as
defined by the Investment Company Act of 1940) in the Trust's Large Cap, Small
Cap, Core Fixed Income, and International Equity Funds.
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.
5% SHAREHOLDERS
As of September 1, 1999, the following persons were the only persons who
were record owners (or to the knowledge of the Trust, beneficial owners) of 5%
or more of the shares of the Funds. The Trust believes that most of the shares
referred to above were held by the above persons in accounts for their
fiduciary, agency, or custodial customers.
<TABLE>
<CAPTION>
LARGE CAP FUND:
NAME AND ADDRESS NUMBER OF SHARES PERCENT OF FUND
- -------------------------------------------------------------------- ----------------- ---------------
<S> <C> <C>
<CAPTION>
SMALL CAP FUND:
NAME AND ADDRESS NUMBER OF SHARES PERCENT OF FUND
- -------------------------------------------------------------------- ----------------- ---------------
<S> <C> <C>
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
CORE FIXED INCOME FUND:
NAME AND ADDRESS NUMBER OF SHARES PERCENT OF FUND
- -------------------------------------------------------------------- ----------------- ---------------
<S> <C> <C>
<CAPTION>
INTERNATIONAL EQUITY FUND:
NAME AND ADDRESS NUMBER OF SHARES PERCENT OF FUND
- -------------------------------------------------------------------- ----------------- ---------------
<S> <C> <C>
</TABLE>
MASTER/FEEDER OPTION
The Trust may in the future seek to achieve any Fund's investment objective
by investing all of that Fund's assets in another investment company having the
same investment objective and substantially the same investment policies and
restrictions as those applicable to that Fund. It is expected that any such
investment company would be managed by SIMC in substantially the same manner as
the existing Fund. The initial shareholder(s) of each Fund voted to vest such
authority in the sole discretion of the Trustees and such investment may be made
without further approval of the shareholders of the Funds. However, shareholders
of the Funds will be given at least 30 days' prior notice of any such
investment. Such investment would be made only if the Trustees determine it to
be in the best interests of a Fund and its shareholders. In making that
determination the Trustees will consider, among other things, the benefits to
shareholders and/or the opportunity to reduce costs and achieve operational
efficiencies. Although the Funds believe that the Trustees will not approve an
arrangement that is likely to result in higher costs, no assurance is given that
costs will be materially reduced if this option is implemented.
CUSTODIAN
First Union National Bank, 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 Large Cap, Small Cap, Core Fixed Income and High
Yield Bond Funds. State Street Bank and Trust Company, 225 Franklin Street,
Boston, Massachusetts 02110, acts as custodian for the assets of the
International Fixed Income, Emerging Markets Equity and International Equity
Funds. First Union National Bank, and State Street Bank and Trust Company (each
a "Custodian," and, together, the "Custodians") hold cash, securities and other
assets of the respective Funds for which they act as custodian as required by
the 1940 Act.
EXPERTS
The financial statements in reliance on the report of ,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
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<PAGE>
LEGAL COUNSEL
Morgan, Lewis & Bockius LLP serves as counsel to the Trust.
FINANCIAL STATEMENTS
S-40
<PAGE>
SEI INSTITUTIONAL INVESTMENTS TRUST
PART C. OTHER INFORMATION
ITEM 23. EXHIBITS:
<TABLE>
<S> <C>
(a) Registrant's Declaration of Trust is incorporated herein by reference to
Exhibit (1) of Registrant's Registration Statement on Form N-1A (File
No. 33-58041), filed with the Securities and Exchange Commission ("SEC")
on March 10, 1995.
(b)(1) Registrant's By-Laws are incorporated herein by reference to Exhibit (2)
of Registrant's Registration Statement on Form N-1A (File No. 33-58041),
filed with the SEC on March 10, 1995.
(b)(2) Amended By-Laws are incorporated by reference to Exhibit (2)(a) of
Registrant's Registration Statement on Form N-1A (File No. 33-58041),
filed with the SEC on September 29, 1997.
(c) Not Applicable.
(d)(1) Investment Advisory Agreement between the Trust and SEI Investments
Management Corporation ("SIMC") (formerly "SEI Financial Management
Corporation") as previously filed with Registrant's Pre-Effective
Amendment No. 2 on Form N-1A (File No. 33-58041), filed with the SEC on
June 7, 1996 is herein incorporated by reference to Exhibit (5)(a) of
Post-Effective Amendment No. 2, filed with the SEC on September 29,
1997.
(d)(2) Investment Sub-Advisory Agreement between SIMC and 1838 Investment
Advisors, L.P. with respect to the Trust's Small Cap Fund as previously
filed with Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File
No. 33-58041), filed with the SEC on April 26, 1996 is herein
incorporated by reference to Exhibit (5)(b) of Post-Effective Amendment
No. 2, filed with the SEC on September 29, 1997.
(d)(3) Investment Sub-Advisory Agreement between SIMC and Acadian Asset
Management, L.P. with respect to the Trust's International Equity Fund
as previously filed with Registrant's Pre-Effective Amendment No. 1 on
Form N-1A (File No. 33-58041), filed with the SEC on April 26, 1996 is
herein incorporated by reference to Exhibit (5)(c) of Post-Effective
Amendment No. 2, filed with the SEC on September 29, 1997.
(d)(4) Investment Sub-Advisory Agreement between SIMC and Alliance Capital
Management L.P. with respect to the Trust's Large Cap Fund as previously
filed with Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File
No. 33-58041), filed with the SEC on April 26, 1996 is herein
incorporated by reference to Exhibit (5)(d) of Post-Effective Amendment
No. 2, filed with the SEC on September 29, 1997.
(d)(5) Form of Investment Sub-Advisory Agreement between SIMC and
Apodaca-Johnston Capital Management, Inc. with respect to the Trust's
Small Cap Fund is incorporated herein by reference to Exhibit (5)(e) of
Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File No.
33-58041), as previously filed with the SEC on April 26, 1996.
(d)(6) Investment Sub-Advisory Agreement between SIMC and BEA Associates with
respect to the High Yield Bond Fund as previously filed with
Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File No.
33-58041), filed with the SEC on April 26, 1996 is herein incorporated
by reference to Exhibit (5)(f) of Post-Effective Amendment No. 2, filed
with the SEC on September 29, 1997.
</TABLE>
C-1
<PAGE>
<TABLE>
<S> <C>
(d)(7) Investment Sub-Advisory Agreement between SIMC and BlackRock Financial
Management, Inc. with respect to the Core Fixed Income Fund as
previously filed with Registrant's Pre-Effective Amendment No. 1 on Form
N-1A (File No. 33-58041), filed with the SEC on April 26, 1996 is herein
incorporated by reference to Exhibit (5)(g) of Post-Effective Amendment
No. 2, filed with the SEC on September 29, 1997.
(d)(8) Investment Sub-Advisory Agreement between SIMC and Boston Partners Asset
Management, L.P. with respect to the Small Cap Fund as previously filed
with Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File No.
33-58041), filed with the SEC on April 26, 1996 is herein incorporated
by reference to Exhibit (5)(h) of Post-Effective Amendment No. 2, filed
with the SEC on September 29, 1997.
(d)(9) Investment Sub-Advisory Agreement between SIMC and Firstar Investment
Research & Management Company with respect to the Core Fixed Income Fund
as previously filed with Registrant's Pre-Effective Amendment No. 1 on
Form N-1A (File No. 33-58041), filed with the SEC on April 26, 1996 is
herein incorporated by reference to Exhibit (5)(i) of Post-Effective
Amendment No. 2, filed with the SEC on September 29, 1997.
(d)(10) Investment Sub-Advisory Agreement between SIMC and American Express Asset
Management Group, Inc. (formerly "IDS Advisory Group, L.P.") with
respect to the Trust's Large Cap Fund as previously filed with
Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File No.
33-58041), filed with the SEC on April 26, 1996 is herein incorporated
by reference to Exhibit (5)(j) of Post-Effective Amendment No. 2, filed
with the SEC on September 29, 1997.
(d)(11) Investment Sub-Advisory Agreement between SIMC and LSV Asset Management
with respect to the Trust's Large Cap and Small Cap Funds as previously
filed with Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File
No. 33-58041), filed with the SEC on April 26, 1996 is herein
incorporated by reference to Exhibit (5)(k) of Post-Effective Amendment
No. 2, filed with the SEC on September 29, 1997.
(d)(12) Investment Sub-Advisory Agreement between SIMC and Mellon Equity
Associates with respect to the Large Cap Fund as previously filed with
Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File No.
33-58041), filed with the SEC on April 26, 1996 is herein incorporated
by reference to Exhibit (5)(l) of Post-Effective Amendment No. 2, filed
with the SEC on September 29, 1997.
(d)(13) Investment Sub-Advisory Agreement between SIMC and HighMark Capital
Management, Inc. (formerly "Pacific Alliance Capital Management") with
respect to the Large Cap Fund as previously filed with Registrant's
Pre-Effective Amendment No. 1 on Form N-1A (File No. 33-58041), filed
with the SEC on April 26, 1996 is herein incorporated by reference to
Exhibit (5)(m) of Post-Effective Amendment No. 2, filed with the SEC on
September 29, 1997.
(d)(14) Investment Sub-Advisory Agreement between SIMC and Montgomery Asset
Management, L.P. with respect to the Emerging Markets Equity Fund as
previously filed with Registrant's Pre-Effective Amendment No. 1 on Form
N-1A (File No. 33-58041), filed with the SEC on April 26, 1996 is herein
incorporated by reference to Exhibit (5)(n) of Post-Effective Amendment
No. 2, filed with the SEC on September 29, 1997.
</TABLE>
C-2
<PAGE>
<TABLE>
<S> <C>
(d)(15) Form of Investment Sub-Advisory Agreement between SIMC and Morgan Grenfell
Investment Services Limited with respect to the International Equity
Fund is incorporated herein by reference to Registrant's Exhibit (5)(o)
of Pre-Effective Amendment No. 1 on Form N-1A (File No. 33-58041), as
previously filed with the SEC on April 26, 1996.
(d)(16) Investment Sub-Advisory Agreement between SIMC and Nicholas-Applegate
Capital Management, Inc. with respect to the Small Cap Fund as
previously filed with Registrant's Pre-Effective Amendment No. 1 on Form
N-1A (File No. 33-58041), filed with the SEC on April 26, 1996 is herein
incorporated by reference to Exhibit (5)(p) of Post-Effective Amendment
No. 2, filed with the SEC on September 29, 1997.
(d)(17) Investment Sub-Advisory Agreement between SIMC and Provident Investment
Counsel, Inc. with respect to the Large Cap Fund as previously filed
with Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File No.
33-58041), filed with the SEC on April 26, 1996 is herein incorporated
by reference to Exhibit (5)(q) of Post-Effective Amendment No. 2, filed
with the SEC on September 29, 1997.
(d)(18) Investment Sub-Advisory Agreement between SIMC and Schroder Capital
Management International Limited with respect to the International
Equity Fund is filed herewith incorporated herein by reference to
Exhibit (5)(r) of Registrant's Pre-Effective Amendment No. 1 on Form
N-1A (File No. 33-58041), as previously filed with the SEC on April 26,
1996.
(d)(19) Investment Sub-Advisory Agreement between SIMC and Strategic Fixed Income
L.P. with respect to the International Fixed Income Fund as previously
filed with Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File
No. 33-58041), filed with the SEC on April 26, 1996 is herein
incorporated by reference to Exhibit (5)(s) of Post-Effective Amendment
No. 2, filed with the SEC on September 29, 1997.
(d)(20) Investment Sub-Advisory Agreement between SIMC and Wall Street Associates
with respect to the Small Cap Fund as previously filed with Registrant's
Pre-Effective Amendment No. 1 on Form N-1A (File No. 33-58041), filed
with the SEC on April 26, 1996 is herein incorporated by reference to
Exhibit (5)(t) of Post-Effective Amendment No. 2, filed with the SEC on
September 29, 1997.
(d)(21) Investment Sub-Advisory Agreement between SIMC and Western Asset
Management Company with respect to the Core Fixed Income Fund as
previously filed with Registrant's Pre-Effective Amendment No. 1 on Form
N-1A (File No. 33-58041), filed with the SEC on April 26, 1996 is herein
incorporated by reference to Exhibit (5)(u) of Post-Effective Amendment
No. 2, filed with the SEC on September 29, 1997.
(d)(22) Investment Sub-Advisory Agreement between SIMC and First of America
Investment Corporation with respect to the Small Cap Fund as previously
filed as Exhibit (5)(w) with Registrant's Pre-Effective Amendment No. 2
on Form N-1A (File No. 33-58041), filed with the SEC on June 7, 1996 is
herein incorporated by reference to Exhibit (5)(v) of Post-Effective
Amendment No. 2, filed with the SEC on September 29, 1997.
(d)(23) Investment Sub-Advisory Agreement between SIMC and Farrell Wako Global
Investment Management, Inc. with respect to the International Equity
Fund as previously filed as Exhibit (5)(x) with Registrant's
Pre-Effective Amendment No. 2 on Form N-1A (File No. 33-58041), filed
with the SEC on June 7, 1996 is herein incorporated by reference to
Exhibit (5)(w) of Post-Effective Amendment No. 2, filed with the SEC on
September 29, 1997.
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
(d)(24) Investment Sub-Advisory Agreement between SIMC and Seligman Henderson Co.
with respect to the International Equity Fund as previously filed as
Exhibit (5)(y) with Registrant's Pre-Effective Amendment No. 2 on Form
N-1A (File No. 33-58041), filed with the SEC on June 7, 1996 is herein
incorporated by reference to Exhibit (5)(x) of Post-Effective Amendment
No. 2, filed with the SEC on September 29, 1997.
(d)(25) Investment Sub-Advisory Agreement between SIMC and SG Pacific Asset
Management, Inc. (formerly "Yamaichi Capital Management, Inc.") with
respect to the International Equity Fund as previously filed as Exhibit
(5)(z) with Registrant's Pre-Effective Amendment No. 2 on Form N-1A
(File No. 33-58041), filed with the SEC on June 7, 1996 is herein
incorporated by reference to Exhibit (5)(y) of Post-Effective Amendment
No. 2, filed with the SEC on September 29, 1997.
(d)(26) Investment Sub-Advisory Agreement between SIMC and Coronation Asset
Management (Proprietary) Limited with respect to the Emerging Markets
Equity Fund previously filed as Exhibit (5)(aa) to Registrant's
Post-Effective Amendment No. 1 on Form N-1A (File No. 33-58041), filed
with the SEC on December 30, 1996, is herein incorporated by reference
to Exhibit (5)(z) of Post-Effective Amendment No. 2, filed with the SEC
on September 29, 1997.
(d)(27) Investment Sub-Advisory Agreement between SIMC and Furman Selz Capital
Management LLC with respect to the Small Cap Fund as previously filed as
Exhibit (5)(bb) to Registrant's Post-Effective Amendment No. 1 on Form
N-1A (File No. 33-58041), filed with the SEC on December 30, 1996 is
herein incorporated by reference to Exhibit (5)(aa) of Post-Effective
Amendment No. 2, filed with the SEC on September 29, 1997.
(d)(28) Investment Sub-Advisory Agreement between SIMC and Lazard London
International Investment Management Limited with respect to the
International Equity Fund as previously filed as Exhibit (5)(cc) to
Registrant's Post-Effective Amendment No. 1 on Form N-1A (File No.
33-58041), filed with the SEC on December 30, 1996 is herein
incorporated by reference to Exhibit (5)(bb) of Post-Effective Amendment
No. 2, filed with the SEC on September 29, 1997.
(d)(29) Investment Sub-Advisory Agreement between SIMC and Parametric Portfolio
Associates with respect to the Emerging Markets Equity Fund previously
filed as Exhibit (5)(dd) to Registrant's Post-Effective Amendment No. 1
on Form N-1A (File No. 33-58041), filed with the SEC on December 30,
1996, is herein incorporated by reference to Exhibit (5)(cc) of
Post-Effective Amendment No. 2, filed with the SEC on September 29,
1997.
(d)(30) Investment Sub-Advisory Agreement between SIMC and SG Pacific Asset
Management, Inc. (formerly "Yamaichi Capital Management, Inc.") and SGY
Asset Management (Singapore) Ltd. (formerly "Yamaichi Capital Management
(Singapore) Limited) with respect to the International Equity Fund
previously filed as Exhibit (5)(ee) to Registrant's Post-Effective
Amendment No. 1 on Form N-1A (File No. 33-58041), filed with the SEC on
December 30, 1996, is herein incorporated by reference to Exhibit
(5)(dd) of Post-Effective Amendment No. 2, filed with the SEC on
September 29, 1997.
(d)(31) Schedule B dated January 1, 1997 to the Trust's Sub-Advisory Agreement
dated June 14, 1996 between SIMC and LSV Asset Management is
incorporated by reference to Exhibit (5)(ee) of Registrant's
Registration Statement on Form N-1A (File No. 33-58041), filed with the
SEC on September 29, 1997.
</TABLE>
C-4
<PAGE>
<TABLE>
<S> <C>
(d)(32) Investment Sub-Advisory Agreement between SIMC and Sanford C. Bernstein &
Co., Inc. with respect to the Large Cap Fund is herein incorporated by
reference to Exhibit (5)(ff) of Post-Effective Amendment No. 3 to
Registrant's Registration Statement on Form N-1A (File No. 33-58041),
filed with the SEC on September 25, 1998.
(d)(33) Investment Sub-Advisory Agreement between SIMC and Polynous Capital
Management with respect to the Small Cap Fund is herein incorporated by
reference to Exhibit (5)(gg) of Post-Effective Amendment No. 3 to
Registrant's Registration Statement on Form N-1A (File No. 33-58041),
filed with the SEC on September 25, 1998.
(d)(34) Investment Sub-Advisory Agreement between SIMC and Robertson Stephens
Investment Management, L.P. with respect to the Small Cap Fund is herein
incorporated by reference to Exhibit (5)(hh) of Post-Effective Amendment
No. 3 to Registrant's Registration Statement on Form N-1A (File No.
33-58041), filed with the SEC on September 25, 1998.
(d)(35) Investment Sub-Advisory Agreement between SIMC and Capital Guardian Trust
Company with respect to the International Equity Fund is herein
incorporated by reference to Exhibit (5)(ii) of Post-Effective Amendment
No. 3 to Registrant's Registration Statement on Form N-1A (File No.
33-58041), filed with the SEC on September 25, 1998.
(d)(36) Investment Sub-Advisory Agreement between SIMC and Scottish Widows
Investment Management Limited with respect to the International Equity
Fund is herein incorporated by reference to Exhibit (5)(jj) of
Post-Effective Amendment No. 3 to Registrant's Registration Statement on
Form N-1A (File No. 33-58041), filed with the SEC on September 25, 1998.
(d)(37) Investment Sub-Advisory Agreement between SIMC and Credit Suisse Asset
Management, Limited with respect to the Emerging Markets Equity Fund is
herein incorporated by reference to Exhibit (5)(kk) of Post-Effective
Amendment No. 3 to Registrant's Registration Statement on Form N-1A
(File No. 33-58041), filed with the SEC on September 25, 1998.
(d)(38) Investment Sub-Advisory Agreement between SIMC and TCW Funds Management
Inc. with respect to the Large Cap Fund is herein incorporated by
reference to Exhibit (5)(ll) of Post-Effective Amendment No. 3 to
Registrant's Registration Statement on Form N-1A (File No. 33-58041),
filed with the SEC on September 25, 1998.
(d)(39) Investment Sub-Advisory Agreement between SIMC and Mellon Equity
Associates, LLP with respect to the Small Cap Fund is herein
incorporated by reference to Exhibit (5)(mm) of Post-Effective Amendment
No. 3 to Registrant's Registration Statement on Form N-1A (File No.
33-58041), filed with the SEC on September 25, 1998.
(d)(40) Investment Sub-Advisory Agreement between SIMC and Spyglass Asset
Management, Inc. with respect to the Small Cap Fund is herein
incorporated by reference to Exhibit (5)(nn) of Post-Effective Amendment
No. 3 to Registrant's Registration Statement on Form N-1A (File No.
33-58041), filed with the SEC on September 25, 1998.
(d)(41) Investment Sub-Advisory Agreement between SIMC and Morgan Stanley Asset
Management Inc. with respect to the Emerging Markets Equity Fund is
herein incorporated by reference to Exhibit (5)(oo) of Post-Effective
Amendment No. 3 to Registrant's Registration Statement on Form N-1A
(File No. 33-58041), filed with the SEC on September 25, 1998.
</TABLE>
C-5
<PAGE>
<TABLE>
<S> <C>
(d)(42) Investment Sub-Advisory Agreement between SIMC and Nicholas-Applegate
Capital Management, Inc. with respect to the Emerging Markets Equity
Fund is herein incorporated by reference to Exhibit (5)(pp) of
Post-Effective Amendment No. 3 to Registrant's Registration Statement on
Form N-1A (File No. 33-58041), filed with the SEC on September 25, 1998.
(d)(43) Investment Sub-Advisory Agreement between SIMC and Artisan Partners
Limited Partnership with respect to the Small Cap Fund is filed
herewith.
(d)(44) Investment Sub-Advisory Agreement between SIMC and Sawgrass Asset
Management, LLC with respect to the Small Cap Fund is filed herewith.
(e) Distribution Agreement between the Trust and SEI Investments Distribution
Co. (formerly "SEI Financial Services Company") as previously filed with
Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File No.
33-58041), filed with the SEC on April 26, 1996 is herein incorporated
by reference to Exhibit (6) of Post-Effective Amendment No. 2, filed
with the SEC on September 29, 1997.
(f) Not Applicable.
(g)(1) Custodian Agreement between the Trust and First Union National Bank, N.A.
with respect to the Trust's Large Cap, Small Cap, Core Fixed Income and
High Yield Bond Funds as previously filed with Registrant's
Pre-Effective Amendment No. 2 on Form N-1A (File No. 33-58041), filed
with the SEC on June 7, 1996 is herein incorporated by reference to
Exhibit (8) of Post-Effective Amendment No. 2, filed with the SEC on
September 29, 1997.
(g)(2) Custodian Agreement between the Trust and State Street Bank and Trust
Company is incorporated by reference to Exhibit (8)(a) of Post-Effective
Amendment No. 2 to Registrant's Registration Statement on Form N-1A
(File No. 33-58041), filed with the SEC on September 29, 1997.
(h) Administration Agreement dated June 14, 1996 between the Trust and SEI
Investments Fund Management as previously filed with Registrant's
Pre-Effective Amendment No. 1 on Form N-1A (File No. 33-58041), filed
with the SEC on April 26, 1996 is herein incorporated by reference to
Exhibit (9)(a) Post-Effective Amendment No. 2, filed with the SEC on
September 29, 1997.
(i) Opinion and Consent of Counsel to be filed by later amendment.
(j) Not Applicable.
(k) Not Applicable.
(l) Not Applicable.
(m) Not Applicable.
(n) Not Applicable.
(o) Not Applicable.
(p) Powers of Attorney for Robert A. Nesher, William M. Doran, George J.
Sullivan, Jr., F. Wendell Gooch, Mark E. Nagle, James M. Storey and
Edward D. Loughlin are incorporated by reference to Exhibit (24) of
Registrant's Post-Effective Amendment No. 3 on Form N-14 (File No.
33-59041) filed with the SEC on September 25, 1998.
</TABLE>
ITEM 24.
See the Prospectus and Statement of Additional Information filed herewith
regarding the Trust's control relationships. The Administrator is a subsidiary
of SEI Investments Company which also controls the Distributor of the
Registrant, SEI Investments Distribution Co., and other corporations engaged in
providing various financial and record keeping services, primarily to bank trust
departments, pension plan sponsors, and investment managers.
C-6
<PAGE>
ITEM 25. 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, 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 26. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER AND
SUB-ADVISERS:
Other business, profession, vocation, or employment of a substantial nature
in which each director or principal officer of the adviser and each sub-adviser
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:
ACADIAN ASSET MANAGEMENT, INC.
Acadian Asset Management, Inc. ("Acadian") is a sub-adviser for the
Registrant's International Equity Fund. The principal business address of
Acadian is 260 Franklin Street, Boston, Massachusetts 02110. Acadian is an
investment adviser registered under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION WITH
INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Gary Leonard Bergstrom -- --
President, Treasurer, Director
Ronald Dickson Frashure -- --
Executive V.P., Director
Matthew Vassar Pierce -- --
Senior V.P., Chief Compliance
Officer
Barry Bennett White Foley, Hoag & Eliot Partner
Clerk
</TABLE>
ALLIANCE CAPITAL MANAGEMENT L.P.
Alliance Capital Management L.P. ("Alliance") is a sub-adviser for the
Registrant's Large Cap Fund. The principal business address of Alliance is 1345
Avenue of the Americas, New York, New York 10105. Alliance is an investment
adviser registered under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION POSITION WITH
WITH INVESTMENT ADVISER OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Alliance ALP, Inc. (ALP)
Assignor Limited Partner
Alliance Capital Management
Corporation
General Partner
</TABLE>
C-7
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION POSITION WITH
WITH INVESTMENT ADVISER OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Luis Javier Bastida Alliance Capital Management Director
Director of General Partner Corporation
Banco Bilbao Vizcaya CFO & Member of the Executive
Committee
Claude Bebear Alliance Capital Management Director
Director of General Partner Corporation
AXA-UAP Chairman of the Executive Board &
CEO
The Equitable Companies Inc. Chairman
John L. Blundin Alliance Capital Management Executive Vice President
Executive Vice President Corporation
David Remson Brewer, Jr. Alliance Capital Management Senior Vice President, General
Sr. Vice President, General Corporation Counsel & Secretary
Counsel & Secretary
Donald Hood Brydon Alliance Capital Management Director
Director Corporation
AXA Investment Managers S.A. Chairman & CEO
Bruce William Calvert Alliance Capital Management Vice Chairman, CIO & Director
Vice Chairman, CIO, Director Corporation
Henri de la Croix de Castries Alliance Capital Management Director
Director Corporation
AXA General Manager
John Donato Carifa Alliance Capital Management President, COO & Director
President, COO, Director Corporation
Kathleen Ann Corbet Alliance Capital Management Executive Vice President
Executive Vice President Corporation
Kevin C. Dolan Alliance Capital Management Director
Director of General Partner Corporation
AXA--UAP Senior Vice President
AXA Investment Managers S.A. Chief Executive Officer
Denis Duverne Alliance Capital Management Director
Director of General Partner Corporation
AXA Senior Vice President
Alfred Harrison Alliance Capital Management Vice Chairman & Director
Vice Chairman, Director Corporation
Herve Hatt Alliance Capital Management Director
Director of General Partner Corporation
AXA Executive
</TABLE>
C-8
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION POSITION WITH
WITH INVESTMENT ADVISER OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Michael Hegarty Alliance Capital Management Director
Director Corporation
The Equitable Companies Inc. Vice Chairman, COO & Director
The Equitable Life Assurance Society President, COO & Director
of the United States
Robert Gene Hysterberg Alliance Capital Management Senior Vice President
Senior Vice President Corporation
Jean-Pierre Hellebuyck Alliance Capital Management Director
Director of General Partner Corporation
AXA Chairman
Benjamin Duke Holloway Alliance Capital Management Director
Director Corporation
Nelson Rudolph Jantzen Alliance Capital Management Senior Vice President
Senior Vice President Corporation
Robert Henry Joseph, Jr. Alliance Capital Management Senior VP & CFO
Sr. Vice Pres., CFO Corporation
Wayne D. Lyski Alliance Capital Management Executive Vice President
Executive Vice President Corporation
Mark Randall Manley Alliance Capital Management Senior Vice President, Counsel,
Senior Vice President, Corporation Compliance Officer & Assistant
Counsel, Compliance Secretary
Officer & Assistant
Secretary
Joseph James Melone The Equitable Companies Inc. President, CEO & Director
Director
Alliance Capital Management Director
Corporation
The Equitable Life Assurance Society Chairman, President & CEO
of the United States
Equitable Investment Corporation President
Edward D. Miller Alliance Capital Management Director
Director Corporation
The Equitable Companies Inc. President & CFO
The Equitable Life Assurance Society Chairman & CEO
of the United States
AXA--UAP Senior Executive Vice President
Peter D. Noris Alliance Capital Management Director
Director of General Partner Corporation
</TABLE>
C-9
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION POSITION WITH
WITH INVESTMENT ADVISER OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
The Equitable Life Assurance Society EVP & CIO
of the United States
Joseph Edward Potter Alliance Capital Management Senior Vice President
Senior Vice President Corporation
Frank Savage Alliance Capital Management Director
Director Corporation
The Equitable Life Insurance Society SVP
of the United States
Alden Merle Stewart Alliance Capital Management Executive Vice President
Executive Vice President Corporation
Stanley B. Tulin Alliance Capital Management Director
Director Corporation
The Equitable Companies Inc. Executive Vice President & CFO
The Equitable Life Insurance Society Vice Chairman & CFO
of the United States
Dave Harrel Williams The Equitable Companies Inc. Director
Chairman of the Board,
CEO & Director
Alliance Capital Management Chairman of the Board, CEO &
Corporation Director
The Equitable Life Assurance Society Director
of the United States
Reba White Williams Alliance Capital Management Director
Director Corporation
Robert Bruce Zoellick Alliance Capital Management Director
Director of General Partner Corporation
United States Naval Academy John M. Olin Professor in National
Security Affairs
</TABLE>
ARTISAN PARTNERS LIMITED PARTNERSHIP
Artisan Partners Limited Partnership ("Artisan") is a sub-adviser for the
Registrant's Large Cap Fund. The principal business address of Artisan is 1000
N. Water Street, Milwaukee, Wisconsin 53202. Artisan is an investment adviser
registered under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION POSITION WITH
WITH INVESTMENT ADVISER OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Andrew A. Ziegler
Chief Executive Officer
Lawrence A Totsky
Chief Financial Officer
Mark L. Yockey
Portfolio Manager
</TABLE>
C-10
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION POSITION WITH
WITH INVESTMENT ADVISER OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Carlene M. Ziegler
Portfolio Manager
Millie A. Hurwitz
Portfolio Manager
Scott C. Satterwhite
Portfolio Manager
Andrew C. Stephens
Portfolio Manager
Robert M. Clark
Marketing & Client Service
Darren W. DeVore
Marketing & Client Service
Michael Steinrueck
Marketing & Client Service
</TABLE>
BLACKROCK, INC.
BlackRock, Inc. ("BlackRock") is a sub-adviser for the Registrant's Core
Fixed Income Fund. The principal business address of BlackRock is 345 Park
Avenue, 30th Floor, New York, New York 10154. BlackRock is an investment adviser
registered under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Keith Thomas Anderson BlackRock, Inc. Managing Director
Managing Director
BlackRock Advisors, Inc. Managing Director
BlackRock (Japan) Inc. Managing Director
BlackRock International, Ltd. Managing Director
BlackRock Institutional Management Managing Director
Corporation
Provident Advisers, Inc. Managing Director
Robert Peter Connolly BlackRock, Inc. Managing Director & General Counsel
Managing Director & General
Counsel
BlackRock Advisors, Inc, General Counsel & Assistant
Secretary
BlackRock (Japan) Inc. General Counsel & Assistant
Secretary
BlackRock International, Ltd. General Counsel & Assistant
Secretary
BlackRock Institutional Management General Counsel & Assistant
Corporation Secretary
</TABLE>
C-11
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Provident Advisers, Inc. General Counsel & Assistant
Secretary
Laurence Douglas Fink BlackRock, Inc. Chairman, CEO & Director
Chairman, CEO & Director
BlackRock Advisors, Inc. Chairman, CEO & Director
BlackRock (Japan) Inc. Chairman, CEO & Director
BlackRock International, Ltd. Chairman, CEO & Director
BlackRock Institutional Management Chairman, CEO & Director
Corporation
Provident Advisers, Inc. Chairman, CEO & Director
Hugh Robert Frater BlackRock, Inc. Managing Director
Managing Director
BlackRock Advisors, Inc. Managing Director
BlackRock (Japan) Inc. Managing Director
BlackRock International, Ltd. Managing Director
BlackRock Institutional Management Managing Director
Corporation
Provident Advisers, Inc. Managing Director
Henry Gabbay BlackRock, Inc. Chief Operating & Compliance Officer
Chief Operating & Compliance Officer
BlackRock Advisors, Inc. Chief Operating & Compliance Officer
BlackRock (Japan) Inc. Chief Compliance Officer
BlackRock International, Ltd. Chief Compliance Officer
BlackRock Institutional Management Chief Compliance Officer
Corporation
Provident Advisers, Inc. Chief Compliance Officer
Bennett William Golub BlackRock, Inc. Managing Director
Managing Partner
BlackRock Advisors, Inc. Managing Director
BlackRock (Japan) Inc. Managing Director
BlackRock International, Ltd. Managing Director
BlackRock Institutional Management Managing Director
Corporation
Provident Advisers, Inc. Managing Director
</TABLE>
C-12
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Walter Emmor Gregg, Jr. PNC Asset Management, Inc. Director
Director
PNC Investment Holdings, Inc. Director
PNC Investment Holdings, LLC Director
BlackRock, Inc. Director
BlackRock Advisors, Inc. Director
BlackRock (Japan) Inc. Director
BlackRock International, Ltd. Director
BlackRock Institutional Management Director
Corporation
Provident Advisers, Inc. Director
Charles Shaul Hallac BlackRock, Inc. Managing Director
Managing Director
BlackRock Advisors, Inc. Managing Director
BlackRock (Japan) Inc. Managing Director
BlackRock International, Ltd. Managing Director
BlackRock Institutional Management Managing Director
Corporation
Provident Advisers, Inc. Managing Director
Robert Steven Kapito BlackRock, Inc. Vice-Chairman
Vice Chairman
BlackRock Advisors, Inc. Vice-Chairman
BlackRock (Japan) Inc. Vice-Chairman
BlackRock International, Ltd. Vice-Chairman
BlackRock Institutional Management Vice-Chairman
Corporation
Provident Advisers, Inc. Vice-Chairman
James Joseph Lillis BlackRock, Inc. Treasurer & Assistant Secretary
Treasurer & Assistant Secretary
BlackRock Advisors, Inc. Treasurer & Assistant Secretary
BlackRock (Japan) Inc. Treasurer & Assistant Secretary
BlackRock International, Ltd. Treasurer & Assistant Secretary
BlackRock Institutional Management Treasurer & Assistant Secretary
Corporation
Provident Advisers, Inc. Treasurer & Assistant Secretary
</TABLE>
C-13
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Barbara Goldman Novick BlackRock, Inc. Managing Director
Managing Director
BlackRock Advisors, Inc. Managing Director
BlackRock (Japan) Inc. Managing Director
BlackRock International, Ltd. Managing Director
BlackRock Institutional Management Managing Director
Corporation
Provident Advisers, Inc. Managing Director
Thomas Henry O'brien PNC Bank Corp. Chairman, CEO & Director
CEO, Chairman, Director
PNC Bank Corp.
PNC Bank, National Association Chairman
Helen Pomerantz Pudlin PNC Asset Management, Inc. Director
Director
PNC Investment Holdings, LLC Director
BlackRock, Inc. Director
BlackRock Advisers, Inc. Director
BlackRock (Japan) Inc. Director
BlackRock International, Ltd. Director
BlackRock Institutional Director
BlackRock Institutional Management Director
Corporation
Provident Advisers, Inc. Director
James Edward Rohr PNC Asset Management Inc. Director
Director
PNC Investment Holdings, Inc. Director
PNC Investment Holdings, LLC Director
BlackRock Financial Management, Inc. Director
BlackRock Advisors, Inc. Director
BlackRock (Japan) Inc. Director
BlackRock International, Ltd. Director
BlackRock Institutional Management Director
Corporation
Provident Advisers, Inc. Director
PNC Bank Corp. President, Director
</TABLE>
C-14
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
PNC Bank, National Association Director
Karen Horwitz Sabath BlackRock, Inc. Managing Director
Managing Director
BlackRock Advisors, Inc. Managing Director
BlackRock (Japan) Inc. Managing Director
BlackRock International, Ltd. Managing Director
BlackRock Institutional Management Managing Director
Corporation
Provident Advisers, Inc. Managing Director
Susan Lynne Wagner BlackRock, Inc. Chief Financial Officer, Secretary
Chief Financial Officer, Secretary
BlackRock Advisors, Inc. Chief Financial Officer, Secretary
BlackRock (Japan) Inc. Chief Financial Officer, Secretary
BlackRock International, Ltd. Chief Financial Officer, Secretary
BlackRock Institutional Management Chief Financial Officer, Secretary
Corporation
Provident Advisers, Inc. Chief Financial Officer, Secretary
</TABLE>
BOSTON PARTNERS ASSET MANAGEMENT, L.P.
Boston Partners Asset Management, L.P. ("BPAM") is a sub-adviser for the
Registrant's Small Cap Fund. The principal business address of BPAM is One
Financial Center, 43rd Floor, Boston, Massachusetts 02111. BPAM is an investment
adviser registered under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Boston Partners, Inc. -- --
General Partner
Wayne J. Archambo -- --
Limited Partner
William W. Carter, Jr. -- --
Limited Partner
Mark E. Donovan -- --
Limited Partner
Harry J. Rosenbluth -- --
Limited Partner
</TABLE>
CREDIT SUISSE ASSET MANAGEMENT
Credit Suisse Asset Management ("Credit Suisse") is the sub-adviser for the
Registrant's High Yield Fund. The principal business address of Credit Suisse is
One Citicorp Center, 153 East 53rd Street, New York, New York 10022. Credit
Suisse is an investment adviser registered under the Advisers Act.
C-15
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Credit Suisse Capital Corporation
General Partner
CS Advisers Corporation
General Partner
Phillip Maxwell Colebatch Credit Suisse Asset Management Ltd. President/head of CS Global Asset
Member of Partnership Board Management
Jeffrey Alan Geller -- --
Member of Partnership Board
Robert John Moore -- --
COO/Member of Partnership Board
William Wallace Priest, Jr. Credit Suisse Asset Management Ltd. Managing Director
CEO/Member of Partnership Board
Philip Keebler Ryan Credit Suisse Asset Management Ltd. Chief Financial Officer
Member of Partnership Board
William Paul Sterling Credit Suisse Asset Management Ltd. Managing Director
Member of Partnership Board
Timothy Torrey Taussig Credit Suisse Asset Management Ltd. Managing Director
Member of Partnership Board
</TABLE>
CAPITAL GUARDIAN TRUST COMPANY
Capital Guardian Trust Company ("CGTC") is a sub-adviser for the
Registrant's International Equity Fund. The principal business address of CGTC
is 333 South Hope Street, Los Angeles, California 90071.
<TABLE>
<CAPTION>
NAME AND POSITION WITH
INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------- ---------------------------------------- ---------------------------------------
<S> <C> <C>
Richard C. Barker Capital Group International, Inc. Vice Chairman of the Board and Director
Capital International Limited Chairman of the Board
Michael D. Beckman Capital Guardian Research Company Treasurer
Senior Vice President, Capital Guardian Trust Company, a Nevada Director
Treasurer, and Director Corporation
David I. Fisher The Capital Group Companies, Inc. Chairman of the Board
Chairman of the Board Capital Group International, Inc. President, Director
Capital International, Inc. Vice Chairman of the Board
Capital International S.A. Chairman of the Board
Capital International Limited Vice Chairman
Capital International K.K. Vice Chairman
Capital Group Research, Inc. Director
Capital Research Company Director
Capital Research International Director
</TABLE>
C-16
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION WITH
INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------- ---------------------------------------- ---------------------------------------
<S> <C> <C>
William H. Hurt Capital Guardian Trust Company, a Nevada Chairman of the Board
Senior Vice President and Corporation
Director Capital Strategy Research, Inc. Chairman of the Board
Robert G. Kirby The Capital Group Partners L.P. Senior Partner
Director and portfolio manager
Nancy J. Kyle -- --
Senior Vice President-
International, Director of the
Executive Committee,
international equity and
emerging markets portfolio
manager
Karin L. Larson Capital Guardian Research Company President, Director of Research and
Director member of the Board
Capital Research International President, Director of Research and
member of the Board
The Capital Group Companies, Inc. Director
D. James Martin Capital Guardian Research Company Senior Vice President and Director
Director
John McIlwralth Capital International Limited Senior Vice President and Director
Senior Vice President-
International and Director
James R. Mulally Capital Guardian Research Company Director
Senior Vice President, Capital Research Company Vice President
Director and Chairman of the Capital International Limited Senior Vice President
Fixed Income Subcommittee
Jason M. Pilalas Capital Guardian Research Company Senior Vice President and Director
Director
Robert Ronus Capital Research International Chairman of the Board
President and Director Capital International S.A. Senior Vice President
Capital International Limited Senior Vice President
Theodore R. Samuels Capital Guardian Research Company Director
Senior Vice President and
Director, portfolio manager
John B. Seiter Capital Group International, Inc. Senior Vice President
Executive Vice President and The Capital Group Companies, Inc. Vice President
Director
Eugene P. Stein Capital Guardian Research Company Director
Executive Vice President,
Director, portfolio manager
and Chairman of the Investment
Committee
Edus H. Warren The Capital Group Partners, L.P. Senior Partner
</TABLE>
C-17
<PAGE>
CORONATION ASSET MANAGEMENT (PROPRIETARY) LIMITED
Coronation Asset Management (Proprietary) Limited ("Coronation") is a
sub-adviser for the Registrant's Emerging Markets Equity Fund. The principal
business address of Coronation is 80 Strand Street, Cape Town, South Africa
8001. Coronation is an investment adviser registered under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION WITH
INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Walter Arthur Aylett -- --
Alternate Director and Investment
Manager
David L. Barnes Coronation Holdings Limited Director and CEO
Director African Harvest Limited Director
Hugh Richard Broadhurst -- --
Director and Investment Manager
Philip Leon Campher Coronation Holdings Limited Director
Director African Harvest Limited Director & COO
Michielse Matthys du Toit -- --
Managing Director (President)
Anthony John Gibson -- --
Director and Chief Investment
Officer
Bruce Meredith Ilsley Sage Group Limited Director and CEO
Director
Leon Kaplan Sage Life Limited Director
Director
Gavan Mark Ryan Coronation Holdings Limited Director and Chairman
Director and Chairman
Andrew Charles Salmon -- --
Director and Investment Manager
John Ashley Snalam -- --
Financial Director and Compliance
Officer
Louis Francois Stassen -- --
Director and Investment Manager
</TABLE>
CREDIT SUISSE ASSET MANAGEMENT LIMITED
Credit Suisse Asset Management Limited ("Credit Suisse") is a sub-adviser
for the Registrant's Emerging Market Equity Fund. The principal business address
of Credit Suisse is Beaufort House, 15 St. Botolph Street, London, EC3A 7JJ.
<TABLE>
<CAPTION>
NAME AND POSITION WITH
INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Jonathan W. Brooke -- --
Director-Investment Management
</TABLE>
C-18
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION WITH
INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
David Maxwell Collins -- --
Compliance Officer
Neil D. Gregson -- --
Director-Investment Management
William Arthur Kendrick Edmonds -- --
Company Secretary
Harjeet Heer -- --
Director-Investment Management
Heinz Hofmann Credit International Fund Holding Chief Executive
Managing Director Ltd.
Beatrice Hannah Millicent Hollond -- --
Managing Director
Stephanie E. Howard -- --
Director-Investment Management
Robert Warren Jenkins -- --
Chief Operating Officer
Ramesh Lakshman -- --
Director-Investment Management
Patricia Jeanne Maxwell-Arnot -- --
Managing Director
Stephen John Maynard -- --
Finance Director
Mark Julian Morris -- --
Director-Investment Management
William Charles Mott -- --
Managing Director
Robert John Parker CS First Boston Investment Director
Chief Executive Management Corporation
William Wallace Priest, Jr. Credit Suisse Asset Management CEO/Executive Director/Exec
Managing Director Comm/Portfolio Manager
Dilip Krishna Rasgotra -- --
Managing Director
Emanuele Stefano Ravano -- --
Director-Investment Management
Winifred Robbins -- --
Director-Investment Management
William Paul Sterling Credit Suisse Asset Management Managing Director/portfolio Manager
Managing Director
</TABLE>
C-19
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION WITH
INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Stephen Maxwell Swift -- --
Managing Director
Timothy Torrey Taussig Credit Suisse Asset Management Executive Director/Executive
Managing Director Committee
Dominic Wallington -- --
Director-Investment Management
Heinrich Hans Wegman Credit Suisse Asset Management Chief Executive
Managing Director
Glenn Wellman -- --
Managing Director
</TABLE>
FIRSTAR INVESTMENT RESEARCH & MANAGEMENT COMPANY, LLC
Firstar Investment Research & Management Company, LLC ("FIRMCO") is a
sub-adviser for the Registrant's Core Fixed Income Fund. The principal business
address of FIRMCO is 777 East Wisconsin Avenue, Suite 800, Milwaukee, Wisconsin
53202. FIRMCO is an investment adviser registered under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
John Alphonsus Becker Firstar Corporation President & COO
Manager
Mary Ellen Stanek -- --
President & CEO
Dennis A. Wallestad -- --
Compliance Officer
Robert Loudon Webster Firstar Trust Company President
Manager
Marian E. Zentmyer -- --
Chief Investment Officer
Todd M. Krieg -- --
Manager
Jeffrey Morna Squires -- --
Compliance & Operations Officer
Laura Jean Rauman -- --
Vice President, Secretary/ Treasurer
</TABLE>
C-20
<PAGE>
FURMAN SELZ CAPITAL MANAGEMENT LLC
Furman Selz Capital Management LLC ("Furman Selz") is a sub-adviser for the
Registrant's Small Cap Fund. The principal business address of Furman Selz is
230 Park Avenue, New York, NY 10169. Furman Selz is an investment adviser
registered under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Steven Donald Blecher -- --
VP, Treasurer, Secretary
Edmund Hajim -- --
President
Vincent Jude Lepore -- --
Vice President
</TABLE>
LSV ASSET MANAGEMENT
LSV Asset Management ("LSV") is a sub-adviser for the Registrant's Large Cap
and Small Cap Funds. The principal business address of LSV is 181 West Madison
Street, Chicago, Illinois 60602. LSV is an investment adviser registered under
the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Henry H. Greer SEI Corporation President
Management Committee
Lakonishok Corporation -- --
General Partner
Josef Lakonishok University of Illinois Professor
Principal, CEO
SEI Funds, Inc. -- --
General Partner
Shleifer Corporation -- --
General Partner
Andrei Shleifer Harvard University Professor
Principal
Kathryn Leigh Stanton SEI Corporation VP--Legal
Management Committee
Vishny Corporation -- --
General Partner
Robert W. Vishny University of Chicago, Graduate Professor
Principal School of Business
Al West SEI Corp. CEO
(Management Committee)
Kevin Robbins -- General Counsel
(Management Committee)
Tremaine Atkinson Formerly with PricewaterhouseCoopers Principal Consultant
COO within last 2 yrs.
</TABLE>
C-21
<PAGE>
MELLON EQUITY ASSOCIATES, LLP
Mellon Equity Associates ("Mellon Equity") is a sub-adviser for the
Registrant's Large Cap and Small Cap Funds. The principal business address of
Mellon Equity is 500 Grant Street, Suite 3715, Pittsburgh, PA 15258. Mellon
Equity is an investment adviser registered under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Ronald Phillip O'Hanley Franklin Portfolio Holdings, Inc. Director
Chairman, Executive Committee Member
The Boston Company Asset Management, Director
Inc.
Boston Safe Advisors, Inc. Director
Mellon Capital Management Director
Corporation
Certus Asset Advisors Corporation Director
Mellon Bond Associates, LLP Chairman, Executive Committee Member
Mellon-France Corporation Director
Mellon Global Investing Corp. Director, Chairman, President, Chief
Executive Officer
Christopher Mark Condron The Dreyfus Corporation President, COO
Trustee
Franklin Portfolio Associates Trust Trustee
Pareto Partners Partner Representative
The Boston Company Asset Management President
Inc.
Certus Asset Advisors Corporation Director
The Boston Company of Southern CEO/Director
California
Access Capital Strategies Corp. Executive Committee Member
Mellon Bond Associates Trustee
Mellon Capital Management Corp. Director
The Boston Company Income Securities Director/President
Advisors Inc.
The Boston Company Asset Mgmt. Inc. President, Chief Operating Officer,
Director
Mellon Bank, N.A. Director
Mellon Bank Corporation Executive VP/Chairman
</TABLE>
C-22
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
The Boston Company Financial Vice Chairman
Services Inc.
The Boston Company Inc. Director/Vice Chairman
Laurel Capital Advisors Trustee
Boston Safe Deposit & Trust Co. of
California
James Milton Gockley Franklin Portfolio Associates Trust Vice President, Chief Legal Officer
Trustee
Mellon Securities Trust Company Vice President
Boston Safe Deposit And Trust Vice President
Company
The Boston Company, Inc. General Counsel
Mellon Accounting Services, Inc. Vice President
Mellon Bond Associates, LLP Vice President, Executive Committee
Member
Mellon Capital Management Vice President
Corporation
Mellon Financial Services Corp. Trustee/Vice President
Mellon-France Corporation Vice President
Mellon Bank, N.A. Vice President, Assistant General
Counsel, Assistant Secretary
Joan Antoniazzi Greene Mellon Bond Associates, LLP Treasurer
Treasurer
Mellon Securities Trust Company Assistant Treasurer
William P. Rydell Mellon Bank, N.A. Vice President
President and CEO, Executive
Committee Member
The Dreyfus Corporation Group Manager
Robert A. Wilk Mellon Bank, N.A. Vice President
Senior Vice President
The Dreyfus Corporation Portfolio Manager
John R. O'Toole Mellon Bank, N.A. Vice President
Senior Vice President
The Dreyfus Corporation Portfolio Manager
Steven A. Falci Mellon Bank, N.A. Vice President
Senior Vice President
The Dreyfus Corporation Portfolio Manager
</TABLE>
C-23
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Ronald P. Gala Mellon Bank, N.A. Vice President
Senior Vice President
The Dreyfus Corporation Portfolio Manager
Scott D. Pitz Dewey Square Investors Corporation Portfolio Manager
Senior Vice President (2/85-10/98)
John W. Keller The Dreyfus Corporation Trader
Senior Vice President/Director of
Trading
</TABLE>
MORGAN STANLEY ASSET MANAGEMENT INC.
Morgan Stanley Asset Management Inc. ("Morgan Stanley") is a sub-adviser for
the Registrant's Emerging Market Equity Fund. The principal business address of
Morgan Stanley is 1221 Avenue of the Americas, New York, NY 10020. Morgan
Stanley is an investment adviser registered under the Adviser Act.
<TABLE>
<CAPTION>
NAME AND POSITION WITH
INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Barton M. Biggs Morgan Stanley & Co. Incorporated Managing Director
Chairman, Director and Managing
Director
Dennis G. Sherva Morgan Stanley & Co. Incorporated Managing Director
Director and Managing Director
Harold J. Schaff, Jr. Morgan Stanley & Co. Incorporated Principal
General Counsel, Secretary and
Principal
Donald P. Ryan Morgan Stanley & Co. Incorporated Principal
Compliance Officer and Principal
John R. Alkire Morgan Stanley Asset & Investment Managing Director
Managing Director Trust Management Co., Limited
Morgan Stanley & Co. Incorporated Managing Director
Peter D. Caldecott Morgan Stanley Dean Witter Managing Director
Managing Director and Member of Investment Management, Ltd.
Executive Committee
Morgan Stanley International Vice President & Investment Manager
David Martin Darst Morgan Stanley & Co. Incorporated Managing Director
Managing Director
Robert L. Meyer -- Managing Director
Managing Director
</TABLE>
C-24
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION WITH
INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Russell Christopher Platt Morgan Stanley & Co. Incorporated Managing Director
Managing Director
Vinod Sethi Morgan Stanley & Co. Incorporated Managing Director
Managing Director
Marna C. Whittington Miller Anderson & Sherrerd, LLP Exec. Committee Member
Chief Operating Officer, Managing
Director and Member of Executive
Committee
Richard B. Worley Miller Anderson & Sherrerd, LLP Portfolio Manager and Executive
President, Director, Portfolio Committee Member
Manager and Member of Executive
Committee
MAS Fund Distribution, Inc. Registered Representative
Morgan Stanley & Co. Incorporated Managing Director
</TABLE>
NICHOLAS-APPLEGATE CAPITAL MANAGEMENT, INC.
Nicholas-Applegate Capital Management, Inc. ("Nicholas-Applegate") is a
sub-adviser for the Registrant's Small Cap Fund and Emerging Markets Equity
Fund. The principal business address of Nicholas-Applegate is 600 West Broadway,
29th Floor, San Diego, California 92101. Nicholas-Applegate is an investment
adviser registered under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Thomas E. Bleakley -- --
Limited Partner of LP
Mark J. Correnti -- --
Limited Partner of LP
Laura Stanley DeMarco -- --
Limited Partner of LP
Andrew B. Gallagher Nicholas-Applegate Capital Partner, Portfolio Manager,
Limited Partner of LP Management Institutional Equity Management
Richard E. Graf -- --
Limited Partner of LP
Peter J. Johnson -- --
Limited Partner of LP
Jill B. Jordan -- --
Limited Partner of LP
John J. Kane -- --
Limited Partner of LP
James E. Kellerman -- --
Limited Partner of LP
George C. Kenney -- --
Limited Partner of LP
</TABLE>
C-25
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Pedro V. Marcal -- --
Limited Partner of LP
James T. McComsey -- --
Limited Partner of LP
Edward B. Moore, Jr. -- --
Limited Partner of LP
Arthur E. Nicholas Nicholas-Applegate Securities President, Chairman
Managing Partner Nicholas-Applegate Capital Chairman, Dir. of Gen Partner, CIO
Management
Thomas Pindelski -- --
Limited Partner of LP
John R. Pipkin -- --
Limited Partner of LP
Frederick S. Robertson Nicholas-Applegate Capital Partner, CIO/Fixed Income
Limited Partner of LP Management
Catherine C. Somhegyi Nicholas-Applegate Capital CIO, Global Equity Management,
Limited Partner of LP Management Partner, and Portfolio Manager
Lawrence S. Speidell -- --
Limited Partner of LP
Todd L. Spillane -- --
Director of Compliance
James W. Szabo -- --
Limited Partner of LP
Nicholas-Applegate Global Holding -- --
Co. LP
Limited Partner
Nicholas-Applegate Capital -- --
Management Inc.
Limited Partner of Limited
Partner
</TABLE>
OECHSLE INTERNATIONAL ADVISORS, LLC
Oechsle International Advisors, LLC ("Oechsle") is a sub-adviser for the
Registrant's International Equity Fund. The principal business address of
Oechsle is One International Place, 23rd Floor, Boston, Massachusetts 02110.
Oechsle is an investment adviser registered under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
S. Dewey Keesler -- --
CIO and Principal
Stephen P. Langer -- --
Principal/Director of Marketing
Sean Roche -- --
COO and Principal
</TABLE>
C-26
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Warren Walker -- --
Principal/Portfolio Manager
</TABLE>
PARAMETRIC PORTFOLIO ASSOCIATES
Parametric Portfolio Associates ("Parametric") is a sub-adviser for the
Registrant's Emerging Markets Equity Fund. The principal business address of
Parametric is 700 Newport Center Drive, Newport Beach, CA 92660. Parametric is
an investment adviser registered under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION WITH
INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Parametric Management, Inc. -- --
General Partner
PIMCO Advisors, LP -- --
General Partner to Applicant
PIMCO Advisors Holding LP -- --
General Partner to PALP
PIMCO Partners G.P. -- --
General Partner of PALP & PAHLP
PIMCO Partners LLC -- --
General Partner of PIMCO GP
Thompson Advisory Group, Inc. -- --
Limited Partner of PALP
</TABLE>
POLYNOUS CAPITAL MANAGEMENT, INC.
Polynous Capital Management, Inc. ("Polynous") is a sub-adviser for the
Registrant's Small Cap Fund. The principal business address of Polynous is 88
Kearny Street, Suite 1300, San Francisco, California 94108.
<TABLE>
<CAPTION>
NAME AND POSITION WITH
INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Kevin Laurence Wenck -- --
President, CEO, Secretary, Director
</TABLE>
PROVIDENT INVESTMENT COUNSEL, INC.
Provident Investment Counsel, Inc. ("Provident") is a sub-adviser for the
Registrant's Large Cap Fund. The principal business address of Provident is 300
North Lake Avenue, Pasadena, CA 91101. Provident is an investment adviser
registered under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Thad Michael Brown -- --
SVP, CFO
Thomas John Condon -- --
Managing Director
Lauro F. Guerra -- --
Managing Director
</TABLE>
C-27
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
George Edward Handtmann III -- --
Executive Managing Director
Robert Marvin Kommerstad -- --
President/Chairman
Jeffrey John Miller -- --
Managing Director
Larry Dee Tashjian -- --
Executive Managing Director
</TABLE>
RS INVESTMENT MANAGEMENT, L.P.
RS Investment Management, L.P. ("RS") is a sub-adviser for the Registrant's
Small Cap Fund. The principal business address of Robertson is 555 California
Street, Suite 2600, San Francisco, California 94104.
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
George Randall Hecht Robertson Stephens Investment President, CEO
President Management Company
Paul Harbor Stephens Robertson, Stephens Investment Chief Investment Officer
Chief Investment Officer Management Company
</TABLE>
SALOMON BROTHERS ASSET MANAGEMENT INC.
Salomon Brothers Asset Management Inc. ("SBAM") is the sub-adviser for the
Registrant's Emerging Markets Debt Portfolio. The principal address of SBAM is 7
World Trade Center, New York, New York 10048. SBAM is an investment adviser
registered under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION WITH
INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Andrew T. Alter -- --
Assistant Secretary
Howard M. Darmstadter Travelers Group, Inc. Assistant General Counsel
Assistant Secretary
Noel B. Daugherty Salomon Brothers, Inc. Legal Assistant
Assistant Secretary
Vilas V. Gadkari Salomon Brothers Asset Management Managing Director & Chief Investment
Director Limited Officer
Salomon Brothers, Inc. Managing Director
Michael S. Hyland, Jr. Salomon Brothers, Inc. Managing Director
President/Managing Director
Salomon Brothers Asset Director, Chairman
Management Limited
Thomas W. Jasper
Treasurer
Alan M. Mandel Salomon Brothers, Inc. Director
Vice President-Chief Operating
Officer-Portfolios
</TABLE>
C-28
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION WITH
INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Marcus A. Peckman Salomon Brothers, Inc. Director
Vice President-Chief Financial
Officer
Michael F. Rosenbaum Salomon Brothers Asset Chief Legal Officer
Chief Legal Officer Management Limited
Salomon Brothers Asia Pacific Chief Legal Officer
Limited
The Travelers Group Inc. Corporate Secretary
Mitchel E. Schulman Salomon Brothers, Inc. Director/COO Portfolios
Director-Chief Operating
Officer-Portfolios
Zachary Snow Salomon Brothers, Inc. Managing Director
Secretary
</TABLE>
SANFORD C. BERNSTEIN & CO., INC.
Sanford C. Bernstein & Co., Inc. ("Bernstein") is a sub-adviser for the
Registrant's Large Cap Fund. The principal business address of Bernstein is 767
Fifth Avenue, New York, New York 10153.
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Lewis A. Sanders -- --
Chairman of the Board, Chief
Executive Officer, Director
Roger Hertog -- --
President and Chief Operating
Officer
Andrew S. Adelson -- --
Senior Vice President, Chief
Investment Officer-- International
Equities, Director
Kevin R. Brine -- --
Senior Vice President--Global Asset
Management Services, Director
Charles C. Cahn, Jr. -- --
Senior Vice President, Director of
Global Fixed Income, Director
Marilyn Goldstein Fedak -- --
Senior Vice President, Chief
Investment Officer--U.S. Equities,
Director
Michael L. Goldstein -- --
Senior Vice President--Chief
Investment Strategist, Director
</TABLE>
C-29
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Thomas S. Hexner -- --
Senior Vice President--Private
Client Services
Gerald M. Lieberman -- --
Senior Vice President--Finance and
Administration
Jean Margo Reid -- --
Senior Vice President, General
Counsel, Director
Francis H. Trainer, Jr. -- --
Senior Vice President, Chief
Investment Officer--Fixed Income,
Director
</TABLE>
SAWGRASS ASSET MANAGEMENT, LLC
Sawgrass Asset Management, LLC is a sub-adviser for the Registrant's Small
Cap Fund. The principal business address of Sawgrass Asset Management, LLC is
4337 Pablo Oaks Court, Building 200, Jacksonville, Florida 32224.
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Andrew M. Cantor -- --
Principal
Dean E. McQuiddy -- --
Principal
Brian K. Monroe -- --
Principal
Martin E. Laprade -- --
Partner
Joe Beattie, III -- --
Partner
Patrick A. Riley -- --
Partner
David A Furfine -- --
Partner
Janet B. Emmick -- --
Partner
Judy Z. Doyle -- --
Partner
</TABLE>
SCOTTISH WIDOWS INVESTMENT MANAGEMENT LIMITED
Scottish Widows Investment Management Limited ("Scottish Widows") is a
sub-adviser for the Registrant's International Equity Fund. The principal
business address of Scottish Widows is P.O. Box 17036, 69 Morris Street,
Edinburgh EH3 8YF, Scotland.
C-30
<PAGE>
[INSERT TO COME]
SEI INVESTMENTS MANAGEMENT CORPORATION
SEI Investments Management Corporation ("SIMC") is the adviser for the Large
Cap, Large Cap Value, Large Cap Growth, Small Cap, Emerging Markets Equity,
International Equity, Core Fixed Income, High Yield Bond and International Fixed
Income Funds. The principal address of SIMC is Oaks, Pennsylvania 19456. SIMC is
an investment adviser registered under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION WITH
INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Henry H. Greer SEI Investments Company President
President, COO, Director
Maryeva Schmitt Kindelan SEI Investments Company Director of Advisory Services
Director of Advisory Services
Richard B. Lieb SEI Investments Company Executive Vice President
Executive Vice President
SEI Investments Corporation Executive Vice President
Edward D. Loughlin SEI Investments Company Executive Vice President
Executive Vice President
SEI Investments Corporation Executive Vice President
Sandra K. Orlow SEI Investments Company CCO, Vice President and Asst.
CCO, Vice President & Asst. Secretary
SEI Investments Company Vice President and Asst. Secretary
Kevin P. Robins SEI Investments Company General Counsel
General Counsel, Sr. VP & Secretary
Carmen V. Romeo SEI Investments Company Executive VP
Executive VP, Director & CFO
Alfred P. West, Jr. SEI Investments Company Chairman and CEO
Chairman, CEO, Director
</TABLE>
SG PACIFIC ASSET MANAGEMENT, INC.
SG Pacific Asset Management, Inc. ("SG Pacific") is a sub-adviser for the
Registrant's International Equity and Emerging Markets Equity Funds. The
principal business address of SG Pacific is 30 Wall Street, 8th Floor, New York,
New York 10005. SG Pacific is an investment adviser registered under the
Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION WITH
INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Masatada Honmura SG Yamaichi Asset Management President
Director
Yoichi Kataoka SG Yamaichi Asset Management Managing Director
President, Director
</TABLE>
C-31
<PAGE>
SGY ASSET MANAGEMENT (SINGAPORE) LIMITED
SGY Asset Management (Singapore) Limited ("SGY") is a sub-adviser for the
Registrant's International Equity and Emerging Markets Equity Funds. The
principal address of SGY is 138 Robinson Road #13-01/05, Hong Leong Center,
Singapore, 068906. SGY is an investment adviser registered under the Advisers
Act.
<TABLE>
<CAPTION>
NAME AND POSITION WITH
INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Yukihiro Yamaguchi -- --
Managing Director
Marco Sau Kwan Wong -- --
Director & Portfolio Manager
Laurent Michel Bertiau -- --
Co-Managing Director
Hiroo Takaishi SG Yamaichi Asset Management Executive Vice President
Director
Christian D'Allest Societe Generale Asset Management Head of International Network
Director
Philippe Collas Societe Generale Asset Management Chairman
Director
</TABLE>
SG YAMAICHI ASSET MANAGEMENT CO., LTD.
SG Yamaichi Asset Management Co., Ltd. ("SG Yamaichi") is a sub-adviser for
the Registrant's International Equity Fund. The principal business address of SG
Yamaichi is 5-1. Nihombashi Kabutocho, Chuo-ku, Tokyo 103, Japan. SG Yamaichi is
an investment adviser registered under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION WITH
INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Masatada Hommura SG Pacific Asset Management Director
President
Hiroo Takaishi SG Asset Management (H.K.) Managing Director
Executive Vice President
Katsumi Deguchi -- --
Executive Vice President
Michael Fromaget -- --
Executive Vice President
Masami Fukuoka -- --
Managing Director
Naoshi Saito -- --
Managing Director, Compliance
Officer
Shigeharu Shiraishi -- --
Managing Director
Tatsuo Nakajima -- --
Auditor
Teijiro Yamada -- --
Director
</TABLE>
C-32
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION WITH
INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Yoichi Kataoka SG Pacific Asset Management President
Managing Director
Christian d'Allset Societe Genrerale Asset Management Head of International Network
Director
Kazuo Ohnuma -- --
Auditor
Tomoko Sasahara -- --
Auditor
Tokuo Ukon -- --
Managing Director
Takeo Igeta -- --
Director
Bruno Leroy -- --
Director
</TABLE>
STRATEGIC FIXED INCOME, LLC
Strategic Fixed Income, LLC ("SFI") is a sub-adviser for the Registrant's
International Fixed Income Fund. The principal business address of SFI is 1001
Nineteenth Street North, 17th Floor, Arlington, Virginia 22209. SFI is an
investment adviser registered under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION WITH
INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
GML Corporation (GML) -- --
G.P. of Ltd. Partner
Gobi Investment, Inc. -- --
General Partner
Strategic Investment Management -- --
(SIM) Limited Partner
Kenneth A. Windheim -- --
President, CIO, Managing Director
</TABLE>
C-33
<PAGE>
TCW FUNDS MANAGEMENT, INC.
TCW Funds Management, Inc. ("TCW") is an investment sub-adviser for the
Registrant's Large Cap Growth Fund. The principal address of TCW is 865 S.
Figuero Street, Suite 1800, Los Angeles, CA 90017. TCW is an investment adviser
registered under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Alvin Robert Albe, Jr. TCW/Latin America Partners, L.L.C. Director of Member
Director & Exec. VP, Fin. & Admin.
TCW Advisors, Inc. Director/Executive VP--Finance &
Admin.
TCW Asia Limited Director
TCW Investment Management Company Director, CAO, Managing Director &
Vice President
TCW London International, Limited Director/Exec. VP--Finance & Admin.
TCW Asset Management Company Director/Exec. VP--Finance & Admin.
Trust Company of the West Director/Exec. VP--Finance & Admin.
The TCW Group, Inc. Exec. VP--Finance & Admin.
TCW Americas Development, Inc. Director, CAO
Mark Louis Attanasio TCW/Crescent Mezzanine, L.L.C. Director & Managing Director
Group MD & CIO-- International Fixed
Income
TCW Investment Management Company Group Managing Director & CIO--Below
Investment Grade Fixed Income
TCW Asset Management Company Director & Group Managing Director &
CIO--Below Investment Grade Fixed
Income
Trust Company of the West Group Managing Director & CIO--Below
Investment Grade Fixed Income
Crescent MACH I G.P. Corporation Senior Vice President
Crescent Interfunding Partners Principal
("CIP")
Philip Alan Barach TCW Advisors, Inc. Group Managing director &
Grp. MD & CIO--International Fixed CIO--Investment Grade Fixed Income
Income
</TABLE>
C-34
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
TCW Investment Management Company Group Managing director &
CIO--Investment Grade Fixed Income
TCW Asset Management Company Director & Group Managing director &
CIO--Investment Grade Fixed Income
Trust Company of the West Group Managing director &
CIO--Investment Grade Fixed Income
Javier Weichers Baz TCW/Latin America Partners L.L.C. Investment Committee Member
Managing Director, CIO--
International & Ch. IAAC
TCW London International, Limited Director, President & CEO
TCW Asia Limited CIO--International
TCW Asset Management Company director & Managing Director,
CIO--International & Chairman,
International Asset Allocation
Committee
Trust Company of the West Managing Director, CIO--
International & Chairman,
International Asset Allocation
Committee
Michael Edward Cahill TCW/Latin America Partners, L.L.C. Managing Director & Gen. Counsel of
General Counsel, Sec. & Managing Member
Director
TCW/Crescent Mezzanine, L.L.C. Vice President & Secretary
TCW Advisors, Inc. Managing Director, General Counsel &
Secretary
TCW Asia Limited Director
TCW Investment Management Company Managing Director, general Counsel &
Secretary
TCW London International, Limited Director & Managing Director,
General Counsel & Secretary
TCW Americas Development, Inc. General Counsel and Assistant
Secretary
TCW Asset Management Company Managing Director, General Counsel &
Secretary
Trust Company of the West Managing Director, General Counsel &
Secretary
The TCW Group, Inc. Managing Director, General Counsel &
Secretary
</TABLE>
C-35
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Robert Addison Day TCW/Latin America Partners, L.L.C. Shareholder of Parent Member
Indirect Owner
TCW Advisors Inc. Director (COB) & Chief Executive
Officer
TCW Asia Limited Member--Comprehensive Asset
Allocation and International Asset
Allocation Committees
TCW London International, Limited Member--Comprehensive Asset
Allocation and International Asset
Allocation Committees
TCW Investment Management Company Member--Comprehensive Asset
Allocation and International Asset
Allocation Committees
The TCW Group, Inc. Director (COB) & Chief Executive
Officer
Oakmont Corporation Chairman of the Board
TCW Asset Management Company Director (COB) & Chief Executive
Officer
Trust Company of the West Director (COB) & Chief Executive
Officer
Ernest Odin Ellison TCW Investment Management Company Chairman, Investment Policy
Ch., Investment Policy Committee Committee
TCW Advisors, Inc. Investment Committee Member
TCW Asset Management Company Chairman, CEO & Managing Director
TCW Asia Limited Chairman, Investment Policy
Committee
TCW London International, Limited Director--Vice President
The TCW Group, Inc. Director--Vice Chairman
Trust Company of the West Director--Vice Chairman, Chairman,
Investment Policy Committee
TCW Americans Development, Inc. Director--Vice Chairman
TCW Special Credits Chairman, Investment Committee
TCW Capital Chairman, Investment Committee
Douglas Stephen Foreman TCW Asset Management Company Group Managing Director, Chief
Group MD & CIO U.S. Equities Investment Officer-- U.S. Equities
</TABLE>
C-36
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Trust Company of the West Group Managing Director, Chief
Investment Officer-- U.S. Equities
Robert Maxwell Hanisee TCW Asset Management Company Group Managing Director, Chief
MD & IO--Private Client Services Investment Officer - Private
Client Services
Trust Company of the West Group Managing Director, Chief
Investment Officer - Private
Client Services
Thomas Ernest Larkin, Jr. TCW/Latin America Partners, L.L.C. Shareholder of Parent Member
Chairman of the Board
TCW Advisors, Inc. Director--Vice Chairman
TCW Investment Management Company Director--Vice Chairman
TCW Americas Development, Inc. Director
TCW Asset Management Company Director--Vice Chairman
Trust Company of the West Director and President
The TCW Group, Inc. Director, Exec. VP & Managing
Director
Hillary Gillian Darcy Lord TCW Advisors, Inc. Managing Director, CCO & Asst.
Managing Director, CCO, & Asst. Secretary
Secretary
TCW Investment Management Company Managing Director, CCO & Asst.
Secretary
The TCW Group, Inc. Managing Director, CCO & Asst.
Secretary
TCW Asset Management company Managing Director, CCO & Asst.
Secretary
Trust Company of the West Managing Director, CCO & Asst.
Secretary
Ronald Elwin Robison TCW Asset Management Company Managing Director
COO & Managing Director
Trust Company of the West Managing Director
William Charles Sonneborn TCW Advisors, Inc. Managing Director, CFO & Asst.
CFO, Managing Director, & Asst. Sec. Secretary
TCW America Development, Inc. Treasurer & Asst. Secretary
TCW Asset Management Company Managing Director, CFO & Asst.
Secretary
</TABLE>
C-37
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
TCW/Crescent Mezzanine, L.L.C. CFO
TCW Investment Management Company Managing Director, CFO & Asst.
Secretary
TCW London International, Limited Managing Director, CFO & Asst.
Secretary
Trust Company of the West Managing Director, CFO & Asst.
Secretary
The TCW Group, Inc. Managing Director, CFO & Asst.
Secretary
TCW/Latin American Partners, L.L.C. Managing Director, CFO & Asst.
Secretary
Marc Irwin Stern TCW/Latin America Partners, L.L.C. Management Committee Member
Director and President
TCW/Crescent Mezzanine, L.L.C. Director
TCW Advisors, Inc. Director, Vice Chairman
TCW Special Credits Investment Committee Member
TCW Asia Limited Chairman of the Board & Invest.
Comm. Member
TCW Investment Management Company Director, Vice Chairman
TCW London International, Limited Chairman of the Board
TCW Asset Management Company Director, Vice Chairman
The TCW Group, Inc. Director & President
Trust Company of the West Director, Exec. VP & Group Managing
Director
</TABLE>
WALL STREET ASSOCIATES
Wall Street Associates ("WSA") is a money manager for the Registrant's Small
Cap Fund. The principal address for WSA is 1200 Prospect Street, Suite 100, La
Jolla, California 92037. WSA is an investment money manager registered under the
Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION POSITION WITH
WITH INVESTMENT ADVISER OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Richard S. Coons -- --
Director/Portfolio Manager
William Jeffery, III -- --
Director/Portfolio Manager
Kenneth F. McCain -- --
Director/Portfolio Manager
</TABLE>
C-38
<PAGE>
WESTERN ASSET MANAGEMENT COMPANY
Western Asset Management Company ("Western") is a sub-adviser for the
Registrant's Core Fixed Income Fund. The principal business address of Western
is 117 East Colorado Boulevard, Pasadena, California 91105. Western is an
investment adviser registered under the Advisers Act.
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Carl L. Eichstaedt -- --
Portfolio Manager
Kent S. Engel -- --
Vice Chairman
Keith J. Gardner -- --
Portfolio Manager
Scott F. Grannis -- --
Director & Economist
Ilene S. Harker -- --
Director of Admin & Controls
James W. Hirschmann III -- --
Director of Marketing
Randolph L. Kohn -- --
Director of Client Services
S. Kenneth Leech -- --
Director & CIO
W. Curtis Livingston -- --
Director & CEO
Raymond A. Mason Legg Mason, Inc. Chairman, President & CEO
Non-Employee Director
Legg Mason Wood Walker, Inc. Chairman, President & CEO
Ronald D. Mass -- --
Portfolio Manager
Edward A. Moody -- --
Director & Sr. Portfolio Manager
James V. Nelson -- --
Director of Invest. Research
Elisabeth N. Spector Legg Mason, Inc. Senior Vice President
Non-Employee Director
Legg Mason Wood Walker, Inc. Senior Vice President
Edward A. Taber III Legg Mason, Inc. Sr. Exec VP & Investment Management
Non-Employee Director
Legg Mason Wood Walker, Inc. Director & Sr. Executive Vice
President
Jeffrey D. Van Schaick -- --
Director & Sr. Research Analyst
</TABLE>
C-39
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Stephen A. Walsh -- --
Director of Portfolio Management
</TABLE>
ITEM 27. PRINCIPAL UNDERWRITERS:
(a) Furnish the name of each investment company (other than the Registrant)
for which each principal underwriter currently distributing the securities of
the Registrant also acts as a principal underwriter, distributor or investment
adviser.
Registrant's distributor, SEI Investments Distribution Co. (the
"Distributor"), 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 Institutional International Trust August 30, 1988
The Advisors' Inner Circle Fund November 14, 1991
The Pillar Funds February 28, 1992
CUFUND May 1, 1992
STI Classic Funds May 29, 1992
First American Funds, Inc. November 1, 1992
First American Investment Funds, Inc. November 1, 1992
The Arbor Fund January 28, 1993
Boston 1784 Funds-Registered Trademark- June 1, 1993
The PBHG Funds, Inc. July 16, 1993
Morgan Grenfell Investment Trust January 3, 1994
The Achievement Funds Trust December 27, 1994
Bishop Street Funds January 27, 1995
CrestFunds, Inc. March 1, 1995
STI Classic Variable Trust August 18, 1995
ARK Funds November 1, 1995
Huntington Funds January 11, 1996
SEI Asset Allocation Trust April 1, 1996
TIP Funds April 28, 1996
First American Strategy Funds, Inc. October 1, 1996
HighMark Funds February 15, 1997
Armada Funds March 8, 1997
PBHG Insurance Series Fund, Inc. April 1, 1997
The Expedition Funds June 9, 1997
Alpha Select January 1, 1998
Oak Associates Funds February 27, 1998
The Nevis Funds, Inc. June 29, 1998
The Parkstone Group of Funds September 14, 1998
CNI Charter Funds April 1, 1999
The Parkstone Advantage Fund May 1, 1999
</TABLE>
The Distributor provides numerous financial services to investment managers,
pension plan sponsors, and bank trust departments. These services include
portfolio evaluation, performance measurement
C-40
<PAGE>
and consulting services ("Funds Evaluation") and automated execution,
clearing and settlement of securities transactions ("MarketLink").
(b) Furnish the Information required by the following table with respect to
each director, officer or partner of each principal underwriter named in the
answer to Item 21 of Part B. Unless otherwise noted, the business address of
each director or officer is Oaks, PA 19456.
<TABLE>
<CAPTION>
POSITION AND OFFICE POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
- ------------------------------ ------------------------------------------------------- ------------------------
<S> <C> <C>
Alfred P. West, Jr. Director, Chairman of the Board of Directors --
Henry H. Greer Director --
Carmen V. Romeo Director --
Mark J. Held President & Chief Operating Officer --
Gilbert L. Beebower Executive Vice President --
Richard B. Lieb Executive Vice President --
Dennis J. McGonigle Executive Vice President --
Robert M. Silvestri Chief Financial Officer & Treasurer --
Leo J. Dolan, Jr. Senior Vice President --
Carl A. Guarino Senior Vice President --
Larry Hutchison Senior Vice President --
Jack May Senior Vice President --
Hartland J. McKeown Senior Vice President --
Barbara J. Moore Senior Vice President --
Kevin P. Robins Senior Vice President & General Counsel Vice President &
Assistant Secretary
Patrick K. Walsh Senior Vice President --
Robert Aller Vice President --
Gordon W. Carpenter Vice President --
Todd Cipperman Vice President & Assistant Secretary Vice President &
Assistant Secretary
S. Courtney E. Collier Vice President & Assistant Secretary --
Robert Crudup Vice President & Managing Director --
Barbara Doyne Vice President --
Jeff Drennen Vice President --
Vic Galef Vice President & Managing Director --
Lydia A. Gavalis Vice President & Assistant Secretary Vice President &
Assistant Secretary
Greg Gettinger Vice President & Assistant Secretary --
Kathy Heilig Vice President --
Jeff Jacobs Vice President --
Samuel King Vice President --
Kim Kirk Vice President & Managing Director --
John Krzeminski Vice President & Managing Director --
</TABLE>
C-41
<PAGE>
<TABLE>
<CAPTION>
POSITION AND OFFICE POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
- ------------------------------ ------------------------------------------------------- ------------------------
<S> <C> <C>
Carolyn McLaurin Vice President & Managing Director --
W. Kelso Morrill Vice President --
Mark Nagle Vice President Controller & Chief
Financial Officer
Joanne Nelson Vice President --
Joseph M. O'Donnell Vice President & Assistant Secretary Vice President &
Assistant Secretary
Sandra K. Orlow Vice President & Secretary Vice President &
Assistant Secretary
Cynthia M. Parrish Vice President & Assistant Secretary Vice President &
Assistant Secretary
Kim Rainey Vice President --
Rob Redican Vice President --
Maria Rinehart Vice President --
Mark Samuels Vice President & Managing Director --
Steve Smith Vice President --
Daniel Spaventa Vice President --
James R. Foggo Vice President & Assistant Secretary Vice President &
Assistant Secretary
Lynda J. Striegel Vice President & Assistant Secretary Vice President &
Assistant Secretary
Lori L. White Vice President & Assistant Secretary --
Wayne M. Withrow Vice President & Managing Director --
</TABLE>
ITEM 28. 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:
First Union National Bank
Broad and Chestnut Streets
P.O. Box 7618
Philadelphia, PA 19101
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
(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 Administrator:
SEI Investments Fund Management
Oaks, PA 19456
C-42
<PAGE>
(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:
Acadian Asset Management
Two International Place
Boston, Massachusetts 02110
Alliance Capital Management L.P.
1345 Avenue of the Americas
New York, New York 10105
Artisan Partners Limited Partnership
1000 N. Water Street
Milwaukee, Wisconsin 53202
Credit Suisse Asset Management
One Citicorp Center
153 East 53rd Street
New York, New York 10022
BlackRock, Inc.
345 Park Avenue
30th Floor
New York, New York 10154
Boston Partners Asset Management, L.P.
One Financial Center
43rd Floor
Boston, Massachusetts 02111
Capital Guardian Trust Company
630 5th Avenue, 36th Floor
New York, New York 10111
Coronation Asset Management (Proprietary) Limited
80 Strand Street
Cape Town, South Africa, 8001
Credit Suisse Asset Management Limited
Beaufort House
15 St. Botolph Street
London, England EC3A 7JJ
Firstar Investment Research & Management Company, LLC
777 East Wisconsin Avenue
Suite 800
Milwaukee, Wisconsin 53202
Furman Selz Capital Management LLC
230 Park Avenue
New York, NY 10169
LSV Asset Management, L.P.
200 W. Madison Ave.
Chicago, Illinois 60606
Mellon Equity Associates, LLP
500 Grant Street
Suite 3715
Pittsburgh, PA 15258
C-43
<PAGE>
Morgan Stanley Asset Management
1221 Avenue of the Americas
New York, New York 10020
Nicholas-Applegate Capital Management, Inc.
600 West Broadway, 29th Floor
San Diego, California 92101
Oechsle International Advisors, LLC
One International Place
23rd Floor
Boston, Massachusetts 02110
Parametric Portfolio Associates
701 5th Ave.,
Suite 1220
San Francisco, CA 94101
Polynous Capital Management, Inc.
345 California Street,
Suite 1220
San Francisco, California 94101
Provident Investment Counsel, Inc.
300 North Lake Avenue
Penthouse
Pasadena, CA 91101
RS Investment Management, L.P.
555 California Street
Suite 2600
San Francisco, California 94104
SEI Investments Management Corporation
One Freedom Valley Drive
Oaks, PA 19456
Salomon Brothers Asset Management, Inc.
30 Wall Street, 8th Floor
New York, New York 10005
Sanford C. Bernstein & Co., Inc.
767 Fifth Avenue
New York, NY 10153-0185
Sawgrass Asset Management, LLC
4337 Pablo Oaks Court, Building 200
Jacksonville, FL 3224
Scottish Widows Investment Management Limited
P.O. Box 17036
69 Morrison Street
Edinburgh EH3 8YF
Scotland
C-44
<PAGE>
SG Pacific Asset Management, Inc.
/SGY Asset Management (Singapore) Ltd.
/SG Yamaichi Asset Management Co., Ltd.,
30 Wall Street, 8th Floor
New York, New York 10005
Strategic Fixed Income, LLC
1001 Nineteenth Street North
Suite 1720
Arlington, VA 22209
TCW Funds Management, Inc.
8655 Figueroa Street
Los Angeles, California 90017
Wall Street Associates
1200 Prospect Street
Suite 100
La Jolla, California 92037
Western Asset Management Company
117 East Colorado Boulevard
Pasadena, CA 91105
ITEM 29. MANAGEMENT SERVICES:
None.
ITEM 30. UNDERTAKINGS:
None.
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.
C-45
<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 Post-Effective Amendment No. 4 to Registration Statement No. 33-58041 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Oaks, Commonwealth of Pennsylvania on the 16th day of July, 1999.
SEI INSTITUTIONAL INVESTMENTS TRUST
By: /s/ EDWARD D. LOUGHLIN
-----------------------------------------
Edward D. Loughlin
PRESIDENT & CHIEF EXECUTIVE OFFICER
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following persons in
the capacity on the date(s) indicated.
*
- ------------------------------ Trustee July 16, 1999
William M. Doran
*
- ------------------------------ Trustee July 16, 1999
F. Wendell Gooch
*
- ------------------------------ Trustee July 16, 1999
George J. Sullivan, Jr.
*
- ------------------------------ Trustee July 16, 1999
James M. Storey
*
- ------------------------------ Trustee July 16, 1999
Robert A. Nesher
/s/ EDWARD D. LOUGHLIN
- ------------------------------ President & Chief July 16, 1999
Edward D. Loughlin Executive Officer
/s/ MARK E. NAGLE
- ------------------------------ Controller & Chief July 16, 1999
Mark E. Nagle Financial Officer
*By: /s/ EDWARD D. LOUGHLIN
-------------------------
Edward D. Loughlin
ATTORNEY-IN-FACT
C-46
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
- -------------------- -----------------------------------------------------------------------------------
<S> <C>
EX-99.B(a) Registrant's Declaration of Trust is incorporated herein by reference to Exhibit
(1) of Registrant's Registration Statement on Form N-1A (File No. 33-58041),
filed with the Securities and Exchange Commission ("SEC") on March 10, 1995.
EX-99.B(b)(1) Registrant's By-Laws are incorporated herein by reference to Exhibit (2) of
Registrant's Registration Statement on Form N-1A (File No. 33-58041), filed with
the SEC on March 10, 1995.
EX-99.B(b)(2) Amended By-Laws are incorporated by reference to Exhibit (2)(a) of Registrant's
Registration Statement on Form N-1A (File No. 33-58041), filed with the SEC on
September 29, 1997.
EX-99.B(c) Not Applicable.
EX-99.B(d)(1) Investment Advisory Agreement between the Trust and SEI Investments Management
Corporation ("SIMC") (formerly "SEI Financial Management Corporation") as
previously filed with Registrant's Pre-Effective Amendment No. 2 on Form N-1A
(File No. 33-58041), filed with the SEC on June 7, 1996 is herein incorporated by
reference to Exhibit (5)(a) of Post-Effective Amendment No. 2, filed with the SEC
on September 29, 1997.
EX-99.B(d)(2) Form of Investment Sub-Advisory Agreement between SIMC and 1838 Investment
Advisors, L.P. with respect to the Trust's Small Cap Fund as previously filed
with Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File No. 33-58041),
filed with the SEC on April 26, 1996 is herein incorporated by reference to
Exhibit (5)(b) of Post-Effective Amendment No. 2, filed with the SEC on September
29, 1997.
EX-99.B(d)(3) Investment Sub-Advisory Agreement between SIMC and Acadian Asset Management, L.P.
with respect to the Trust's International Equity Fund as previously filed with
Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File No. 33-58041),
filed with the SEC on April 26, 1996 is herein incorporated by reference to
Exhibit (5)(c) of Post-Effective Amendment No. 2, filed with the SEC on September
29, 1997.
EX-99.B(d)(4) Investment Sub-Advisory Agreement between SIMC and Alliance Capital Management L.P.
with respect to the Trust's Large Cap Fund as previously filed with Registrant's
Pre-Effective Amendment No. 1 on Form N-1A (File No. 33-58041), filed with the
SEC on April 26, 1996 is herein incorporated by reference to Exhibit (5)(d) of
Post-Effective Amendment No. 2, filed with the SEC on September 29, 1997.
EX-99.B(d)(5) Investment Sub-Advisory Agreement between SIMC and Apodaca-Johnston Capital
Management, Inc. with respect to the Trust's Small Cap Fund is filed herewith.
EX-99.B(d)(6) Investment Sub-Advisory Agreement between SIMC and BEA Associates with respect to
the High Yield Bond Fund as previously filed with Registrant's Pre-Effective
Amendment No. 1 on Form N-1A (File No. 33-58041), filed with the SEC on April 26,
1996 is herein incorporated by reference to Exhibit (5)(f) of Post-Effective
Amendment No. 2, filed with the SEC on September 29, 1997.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
- -------------------- -----------------------------------------------------------------------------------
<S> <C>
EX-99.B(d)(7) Investment Sub-Advisory Agreement between SIMC and BlackRock Financial Management,
Inc. with respect to the Core Fixed Income Fund as previously filed with
Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File No. 33-58041),
filed with the SEC on April 26, 1996 is herein incorporated by reference to
Exhibit (5)(g) of Post-Effective Amendment No. 2, filed with the SEC on September
29, 1997.
EX-99.B(d)(8) Investment Sub-Advisory Agreement between SIMC and Boston Partners Asset
Management, L.P. with respect to the Small Cap Fund as previously filed with
Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File No. 33-58041),
filed with the SEC on April 26, 1996 is herein incorporated by reference to
Exhibit (5)(h) of Post-Effective Amendment No. 2, filed with the SEC on September
29, 1997.
EX-99.B(d)(9) Investment Sub-Advisory Agreement between SIMC and Firstar Investment Research &
Management Company with respect to the Core Fixed Income Fund as previously filed
with Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File No. 33-58041),
filed with the SEC on April 26, 1996 is herein incorporated by reference to
Exhibit (5)(i) of Post-Effective Amendment No. 2, filed with the SEC on September
29, 1997.
EX-99.B(d)(10) Investment Sub-Advisory Agreement between SIMC and American Express Asset
Management Group, Inc. (formerly "IDS Advisory Group, L.P.") with respect to the
Trust's Large Cap Fund as previously filed with Registrant's Pre-Effective
Amendment No. 1 on Form N-1A (File No. 33-58041), filed with the SEC on April 26,
1996 is herein incorporated by reference to Exhibit (5)(j) of Post-Effective
Amendment No. 2, filed with the SEC on September 29, 1997.
EX-99.B(d)(11) Investment Sub-Advisory Agreement between SIMC and LSV Asset Management with
respect to the Trust's Large Cap and Small Cap Funds as previously filed with
Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File No. 33-58041),
filed with the SEC on April 26, 1996 is herein incorporated by reference to
Exhibit (5)(k) of Post-Effective Amendment No. 2, filed with the SEC on September
29, 1997.
EX-99.B(d)(12) Investment Sub-Advisory Agreement between SIMC and Mellon Equity Associates with
respect to the Large Cap Fund as previously filed with Registrant's Pre-Effective
Amendment No. 1 on Form N-1A (File No. 33-58041), filed with the SEC on April 26,
1996 is herein incorporated by reference to Exhibit (5)(l) of Post-Effective
Amendment No. 2, filed with the SEC on September 29, 1997.
EX-99.B(d)(13) Investment Sub-Advisory Agreement between SIMC and Highmark Capital Management,
Inc. (formerly "Pacific Alliance Capital Management") with respect to the Large
Cap Fund as previously filed with Registrant's Pre-Effective Amendment No. 1 on
Form N-1A (File No. 33-58041), filed with the SEC on April 26, 1996 is herein
incorporated by reference to Exhibit (5)(m) of Post-Effective Amendment No. 2,
filed with the SEC on September 29, 1997.
EX-99.B(d)(14) Investment Sub-Advisory Agreement between SIMC and Montgomery Asset Management,
L.P. with respect to the Emerging Markets Equity Fund as previously filed with
Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File No. 33-58041),
filed with the SEC on April 26, 1996 is herein incorporated by reference to
Exhibit (5)(n) of Post-Effective Amendment No. 2, filed with the SEC on September
29, 1997.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
- -------------------- -----------------------------------------------------------------------------------
<S> <C>
EX-99.B(d)(15) Investment Sub-Advisory Agreement between SIMC and Morgan Grenfell Investment
Services Limited with respect to the International Equity Fund is filed herewith.
EX-99.B(d)(16) Investment Sub-Advisory Agreement between SIMC and Nicholas-Applegate Capital
Management, Inc. with respect to the Small Cap Fund as previously filed with
Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File No. 33-58041),
filed with the SEC on April 26, 1996 is herein incorporated by reference to
Exhibit (5)(p) of Post-Effective Amendment No. 2, filed with the SEC on September
29, 1997.
EX-99.B(d)(17) Investment Sub-Advisory Agreement between SIMC and Provident Investment Counsel,
Inc. with respect to the Large Cap Fund as previously filed with Registrant's
Pre-Effective Amendment No. 1 on Form N-1A (File No. 33-58041), filed with the
SEC on April 26, 1996 is herein incorporated by reference to Exhibit (5)(q) of
Post-Effective Amendment No. 2, filed with the SEC on September 29, 1997.
EX-99.B(d)(18) Investment Sub-Advisory Agreement between SIMC and Schroder Capital Management
International Limited with respect to the International Equity Fund is
incorporated herein by reference to Exhibit (5)(r) of Registrant's Pre-Effective
Amendment No. 1 on Form N-1A (File No. 33-58041), as previously filed with the
SEC on April 26, 1996.
EX-99.B(d)(19) Investment Sub-Advisory Agreement between SIMC and Strategic Fixed Income L.P. with
respect to the International Fixed Income Fund as previously filed with
Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File No. 33-58041),
filed with the SEC on April 26, 1996 is herein incorporated by reference to
Exhibit (5)(s) of Post-Effective Amendment No. 2, filed with the SEC on September
29, 1997.
EX-99.B(d)(20) Investment Sub-Advisory Agreement between SIMC and Wall Street Associates with
respect to the Small Cap Fund as previously filed with Registrant's Pre-Effective
Amendment No. 1 on Form N-1A (File No. 33-58041), filed with the SEC on April 26,
1996 is herein incorporated by reference to Exhibit (5)(t) of Post-Effective
Amendment No. 2, filed with the SEC on September 29, 1997.
EX-99.B(d)(21) Investment Sub-Advisory Agreement between SIMC and Western Asset Management Company
with respect to the Core Fixed Income Fund as previously filed with Registrant's
Pre-Effective Amendment No. 1 on Form N-1A (File No. 33-58041), filed with the
SEC on April 26, 1996 is herein incorporated by reference to Exhibit (5)(u) of
Post-Effective Amendment No. 2, filed with the SEC on September 29, 1997.
EX-99.B(d)(22) Investment Sub-Advisory Agreement between SIMC and First of America Investment
Corporation with respect to the Small Cap Fund as previously filed as Exhibit
(5)(w) with Registrant's Pre-Effective Amendment No. 2 on Form N-1A (File No.
33-58041), filed with the SEC on June 7, 1996 is herein incorporated by reference
to Exhibit (5)(v) of Post-Effective Amendment No. 2, filed with the SEC on
September 29, 1997.
</TABLE>
<PAGE>
<TABLE>
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EXHIBIT NUMBER DESCRIPTION
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EX-99.B(d)(23) Investment Sub-Advisory Agreement between SIMC and Farrell Wako Global Investment
Management, Inc. with respect to the International Equity Fund as previously
filed as Exhibit (5)(x) with Registrant's Pre-Effective Amendment No. 2 on Form
N-1A (File No. 33-58041), filed with the SEC on June 7, 1996 is herein
incorporated by reference to Exhibit (5)(w) of Post-Effective Amendment No. 2,
filed with the SEC on September 29, 1997.
EX-99.B(d)(24) Investment Sub-Advisory Agreement between SIMC and Seligman Henderson Co. with
respect to the International Equity Fund as previously filed as Exhibit (5)(y)
with Registrant's Pre-Effective Amendment No. 2 on Form N-1A (File No. 33-58041),
filed with the SEC on June 7, 1996 is herein incorporated by reference to Exhibit
(5)(x) of Post-Effective Amendment No. 2, filed with the SEC on September 29,
1997.
EX-99.B(d)(25) Investment Sub-Advisory Agreement between SIMC and SG Pacific Asset Management,
Inc. (formerly "Yamaichi Capital Management, Inc.") with respect to the
International Equity Fund as previously filed as Exhibit (5)(z) with Registrant's
Pre-Effective Amendment No. 2 on Form N-1A (File No. 33-58041), filed with the
SEC on June 7, 1996 is herein incorporated by reference to Exhibit (5)(y) of
Post-Effective Amendment No. 2 filed with the SEC on September 29, 1997.
EX-99.B(d)(26) Investment Sub-Advisory Agreement between SIMC and Coronation Asset Management
(Proprietary) Limited with respect to the Emerging Markets Equity Fund is
incorporated herein by reference to Exhibit (5)(a) of Post-Effective Amendment
No. 3 and to Exhibit (5)(aa) to Registrant's Post-Effective Amendment No. 1 on
Form N-1A (File No. 33-58041), filed with the SEC on December 30, 1996.
EX-99.B(d)(27) Investment Sub-Advisory Agreement between SIMC and Furman Selz Capital Management
LLC with respect to the Small Cap Fund as previously filed as Exhibit (5)(bb) to
Registrant's Post-Effective Amendment No. 1 on Form N-1A (File No. 33-58041),
filed with the SEC on December 30, 1996 is herein incorporated by reference to
Exhibit (5)(aa) of Post-Effective Amendment No. 2, filed with the SEC on
September 29, 1997.
EX-99.B(d)(28) Investment Sub-Advisory Agreement between SIMC and Lazard London International
Investment Management Limited with respect to the International Equity Fund as
previously filed as Exhibit (5)(cc) to Registrant's Post-Effective Amendment No.
1 on Form N-1A (File No. 33-58041), filed with the SEC on December 30, 1996 is
herein incorporated by reference to Exhibit (5)(bb) of Post-Effective Amendment
No. 2, filed with the SEC on September 29, 1997.
EX-99.B(d)(29) Investment Sub-Advisory Agreement between SIMC and Parametric Portfolio Associates
with respect to the Emerging Markets Equity Fund is incorporated herein by
reference to Exhibit (5)(cc) of Post-Effective Amendment No. 3 and to Exhibit
(5)(dd) to Registrant's Post-Effective Amendment No. 1 on Form N-1A (File No.
33-58041), filed with the SEC on December 30, 1996.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
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EX-99.B(d)(30) Investment Sub-Advisory Agreement between SIMC and Yamaichi Capital Management,
Inc. And Yamaichi Capital Management (Singapore) Limited with respect to the
International Equity Fund is incorporated herein to Exhibit (5)(dd) of
Post-Effective Amendment No. 3 and to reference as Exhibit (5)(ee) to
Registrant's Post-Effective Amendment No. 1 on Form N-1A (File No. 33-58041),
filed with the SEC on December 30, 1996.
EX-99.B(d)(31) Schedule B dated January 1, 1997 to the Trust's Sub-Advisory Agreement dated June
14, 1996 between SIMC and LSV Asset Management is herein incorporated by
reference to Exhibit (5)(ee) of Post-Effective Amendment No. 2, filed with the
SEC on September 29, 1997.
EX-99.B(d)(32) Investment Sub-Advisory Agreement between SIMC and Sanford C. Bernstein & Co., Inc.
with respect to the Large Cap Fund is herein incorporated by reference to Exhibit
(5)(ff) of Post-Effective Amendment No. 7 to Registrant's Registration Statement
on Form N-1A (File No. 33-58041), filed with the SEC on September 25, 1998.
EX-99.B(d)(33) Investment Sub-Advisory Agreement between SIMC and Polynous Capital Management with
respect to the Small Cap Fund is herein incorporated by reference to Exhibit
(5)(gg) of Post-Effective Amendment No. 3 to Registrant's Registration Statement
on Form N-1A (File No. 33-58041), filed with the SEC on September 25, 1998.
EX-99.B(d)(34) Investment Sub-Advisory Agreement between SIMC and Robertson Stephens Investment
Management, L.P. with respect to the Small Cap Fund is herein incorporated by
reference to Exhibit (5)(hh) of Post-Effective Amendment No. 3 to Registrant's
Registration Statement on Form N-1A (File No. 33-58041), filed with the SEC on
September 25, 1998.
EX-99.B(d)(35) Investment Sub-Advisory Agreement between SIMC and Capital Guardian Trust Company
with respect to the International Equity Fund is herein incorporated by reference
to Exhibit (5)(ii) of Post-Effective Amendment No. 3 to Registrant's Registration
Statement on Form N-1A (File No. 33-58041), filed with the SEC on September 25,
1998.
EX-99.B(d)(36) Investment Sub-Advisory Agreement between SIMC and Scottish Widows Investment
Management Limited with respect to the International Equity Fund is herein
incorporated by reference to Exhibit (5)(jj) of Post-Effective Amendment No. 3 to
Registrant's Registration Statement on Form N-1A (File No. 33-58041), filed with
the SEC on September 25, 1998.
EX-99.B(d)(37) Investment Sub-Advisory Agreement between SIMC and Credit Suisse Asset Management,
Limited with respect to the Emerging Markets Equity Fund is herein incorporated
by reference to Exhibit (5)(kk) of Post-Effective Amendment No. 3 to Registrant's
Registration Statement on Form N-1A (File No. 33-58041), filed with the SEC on
September 25, 1998.
EX-99.B(d)(38) Investment Sub-Advisory Agreement between SIMC and TCW Funds Management Inc. with
respect to the Large Cap Fund is herein incorporated by reference to Exhibit
(5)(ll) of Post-Effective Amendment No. 3 to Registrant's Registration Statement
on Form N-1A (File No. 33-58041), filed with the SEC on September 25, 1998.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
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EX-99.B(d)(39) Investment Sub-Advisory Agreement between SIMC and Mellon Equity Associates, LLP
with respect to the Large Cap Fund is herein incorporated by reference to Exhibit
(5)(mm) of Post-Effective Amendment No. 3 to Registrant's Registration Statement
on Form N-1A (File No. 33-58041), filed with the SEC on September 25, 1998.
EX-99.B(d)(40) Investment Sub-Advisory Agreement between SIMC and Spyglass Asset Management, Inc.
with respect to the Large Cap Fund is herein incorporated by reference to Exhibit
(5)(nn) of Post-Effective Amendment No. 3 to Registrant's Registration Statement
on Form N-1A (File No. 33-58041), filed with the SEC on September 25, 1998.
EX-99.B(d)(41) Investment Sub-Advisory Agreement between SIMC and Morgan Stanley Asset Management
Inc. with respect to the Large Cap Fund is herein incorporated by reference to
Exhibit (5)(oo) of Post-Effective Amendment No. 3 to Registrant's Registration
Statement on Form N-1A (File No. 33-58041), filed with the SEC on September 25,
1998.
EX-99.B(d)(42) Investment Sub-Advisory Agreement between SIMC and Nicholas-Applegate Capital
Management, Inc. with respect to the Large Cap Fund is herein incorporated by
reference to Exhibit (5)(pp) of Post-Effective Amendment No. 3 to Registrant's
Registration Statement on Form N-1A (File No. 33-58041), filed with the SEC on
September 25, 1998.
EX-99.B(d)(43) Investment Sub-Advisory Agreement between SIMC and Artisan Partners Limited
Partnership with respect to the Small Cap Fund is filed herewith.
EX-99.B(d)(44) Investment Sub-Advisory Agreement between SIMC and Sawgrass Asset Management, LLC
with respect to the Small Cap Fund is filed herewith.
EX-99.B(e) Distribution Agreement between the Trust and SEI Investments Distribution Co.
(formerly "SEI Financial Services Company") as previously filed with Registrant's
Pre-Effective Amendment No. 1 on Form N-1A (File No. 33-58041), filed with the
SEC on April 26, 1996 is herein incorporated by reference to Exhibit (6) of
Post-Effective Amendment No. 2, filed with the SEC on September 29, 1997.
EX-99.B(f) Not Applicable.
EX-99.B(g)(1) Custodian Agreement between the Trust and First Union National Bank, N.A. with
respect to the Trust's Large Cap, Small Cap, Core Fixed Income and High Yield
Bond Funds as previously filed with Registrant's Pre-Effective Amendment No. 2 on
Form N-1A (File No. 33-58041), filed with the SEC on June 7, 1996 is herein
incorporated by reference to Exhibit (8) of Post-Effective Amendment No. 2, filed
with the SEC on September 29, 1997.
EX-99.B(g)(2) Custodian Agreement between the Trust and State Street Bank and Trust Company is
incorporated by reference to Exhibit (8)(a) of Registrant's Registration
Statement on Form N-1A (File No. 33-58041), filed with the SEC on September 29,
1997.
EX-99.B(h)(1) Administration Agreement dated June 14, 1996 between the Trust and SEI Investments
Fund Management as previously filed with Registrant's Pre-Effective Amendment No.
1 on Form N-1A (File No. 33-58041), filed with the SEC on April 26, 1996 is
herein incorporated by reference to Exhibit (9)(a) of Post-Effective Amendment
No. 2, filed with the SEC on September 29, 1997.
EX-99.B(i) Not Applicable
</TABLE>
<PAGE>
<TABLE>
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EXHIBIT NUMBER DESCRIPTION
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EX-99.B(j) Not Applicable
EX-99.B(k) Not Applicable.
EX-99.B(l) Not Applicable.
EX-99.B(m) Not Applicable.
EX-99.B(p) Powers of Attorney for Robert A. Nesher, William M. Doran, George J. Sullivan, Jr.,
F. Wendell Gooch, Mark E. Nagle, and James M. Storey, Edward D. Loughlin are
incorporated by reference to Exhibit 24 of Registrant's Post-Effective Amendment
No. 3 on Form N-1A (File No. 33-58041), filed with the SEC on September 25, 1998.
</TABLE>
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSTITUTIONAL INVESTMENTS TRUST
AGREEMENT made this 26th day of March, 1999, between SEI Investments
Management Corporation, (the "Adviser") and Artisan Partners Limited Partnership
(the "Sub-Adviser").
WHEREAS, SEI Institutional Investments Trust, a Massachusetts business
trust (the "Trust"), is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated June 14, 1996 (the "Advisory Agreement") with the Trust, pursuant to which
the Adviser will act as investment adviser to the Small Cap Fund (the
"Portfolio"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain
the Sub-Adviser to provide investment advisory services to the Adviser in
connection with the management of the Portfolio, and the Sub-Adviser is willing
to render such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and the
Trust's Board of Trustees, the Sub-Adviser shall manage all of the
securities and other assets of the Portfolio entrusted to it hereunder
(the "Assets"), including the purchase, retention and disposition of the
Assets, in accordance with the Portfolio's investment objectives,
policies and restrictions as stated in the Portfolio's prospectus and
statement of additional information, as currently in effect and as
amended or supplemented from time to time (referred to collectively as
the "Prospectus"), and subject to the following:
(a) The Sub-Adviser shall, in consultation with and subject to the direction
of the Adviser, determine from time to time what Assets will be
purchased, retained or sold by the Portfolio, and what portion of the
Assets will be invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement,
the Sub-Adviser shall act in conformity with the Trust's Declaration of
Trust (as defined herein) and the Prospectus and with the instructions
and directions of the Adviser and of the Board of Trustees of the Trust
and will conform to and comply with the requirements of the 1940 Act,
the Internal Revenue Code of 1986, and all other applicable federal and
state laws and regulations, as each is amended from time to time.
(c) The Sub-Adviser shall determine the Assets to be purchased or sold by
the Portfolio as provided in subparagraph (a) and will place orders with
or through such persons, brokers or dealers to carry out the policy with
respect to brokerage set forth in the Portfolio's Registration Statement
(as defined herein) and Prospectus or as the Board of Trustees or the
Adviser may direct from time to time, in conformity with federal
securities laws. In executing Portfolio transactions and selecting
brokers or dealers, the Sub-Adviser will use its best efforts to seek
1
<PAGE>
on behalf of the Portfolio the best overall terms available. In
assessing the best overall terms available for any transaction, the
Sub-Adviser shall consider all factors that it deems relevant,
including the breadth of the market in the security, the price of the
security, the financial condition and execution capability of the
broker or dealer, and the reasonableness of the commission, if any,
both for the specific transaction and on a continuing basis. In
evaluating the best overall terms available, and in selecting the
broker-dealer to execute a particular transaction, the Sub-Adviser
may also consider the brokerage and research services provided (as
those terms are defined in Section 28(e) of the Securities Exchange
Act of 1934). Consistent with any guidelines established by the Board
of Trustees of the Trust, the Sub-Adviser is authorized to pay to a
broker or dealer who provides such brokerage and research services a
commission for executing a portfolio transaction for the Portfolio
which is in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if, but only
if, the Sub-Adviser determines in good faith that such commission was
reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer -- viewed in terms of that
particular transaction or terms of the overall responsibilities of
the Sub-Adviser to the Portfolio. In addition, the Sub-Adviser is
authorized to allocate purchase and sale orders for securities to
brokers or dealers (including brokers and dealers that are affiliated
with the Adviser, Sub-Adviser or the Trust's principal underwriter)
to take into account the sale of shares of the Trust if the
Sub-Adviser believes that the quality of the transaction and the
commission are comparable to what they would be with other qualified
firms. In no instance, however, will the Portfolio's Assets be
purchased from or sold to the Adviser, Sub-Adviser, the Trust's
principal underwriter, or any affiliated person of either the Trust,
Adviser, the Sub-Adviser or the principal underwriter, acting as
principal in the transaction, except to the extent permitted by the
Securities and Exchange Commission ("SEC") and the 1940 Act.
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5), (6),
(7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940
Act. The Sub-Adviser shall provide to the Adviser or the Board of
Trustees such periodic and special reports, balance sheets or financial
information, and such other information with regard to its affairs as
the Adviser or Board of Trustees may reasonably request.
The Sub-Adviser shall keep the books and records relating to the Assets
required to be maintained by the Sub-Adviser under this Agreement and
shall timely furnish to the Adviser all information relating to the
Sub-Adviser's services under this Agreement needed by the Adviser to
keep the other books and records of the Portfolio required by Rule 31a-1
under the 1940 Act. The Sub-Adviser shall also furnish to the Adviser
any other information relating to the Assets that is required to be
filed by the Adviser or the Trust with the SEC or sent to shareholders
under the 1940 Act (including the rules adopted thereunder) or any
exemptive or other relief that the Adviser or the Trust obtains from the
SEC. The Sub- Adviser agrees that all records that it maintains on
behalf of the Portfolio are property of the Portfolio and the
Sub-Adviser will surrender promptly to the Portfolio any of such records
upon the Portfolio's request; provided, however, that the Sub-Adviser
may retain a copy of such records. In addition, for the duration of this
Agreement, the Sub-Adviser shall preserve for the periods
2
<PAGE>
prescribed by Rule 31a-2 under the 1940 Act any such records as are
required to be maintained by it pursuant to this Agreement, and shall
transfer said records to any successor sub-adviser upon the termination
of this Agreement (or, if there is no successor sub-adviser, to the
Adviser).
(e) The Sub-Adviser shall provide the Portfolio's custodian on each business
day with information relating to all transactions concerning the
Portfolio's Assets and shall provide the Adviser with such information
upon request of the Adviser.
(f) The investment management services provided by the Sub-Adviser under
this Agreement are not to be deemed exclusive and the Sub-Adviser shall
be free to render similar services to others, as long as such services
do not impair the services rendered to the Adviser or the Trust.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill
its commitment under this Agreement.
(h) The Sub-Adviser shall review all proxy solicitation materials and be
responsible for voting and handling all proxies in relation to the
securities held in the Portfolio. The Adviser shall instruct the
custodian and other parties providing services to the Portfolio to
promptly forward misdirected proxies to the Sub-Adviser.
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners,
officers or employees.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have responsibility
for all services to be provided to the Portfolio pursuant to the
Advisory Agreement and shall oversee and review the Sub-Adviser's
performance of its duties under this Agreement; provided, however, that
in connection with its management of the Assets, nothing herein shall be
construed to relieve the Sub-Adviser of responsibility for compliance
with the Trust's Declaration of Trust (as defined herein), the
Prospectus, the instructions and directions of the Board of Trustees of
the Trust, the requirements of the 1940 Act, the Internal Revenue Code
of 1986, and all other applicable federal and state laws and
regulations, as each is amended from time to time.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the
Secretary of State of the Commonwealth of Massachusetts (such Agreement
and Declaration of Trust, as in effect on the date of this Agreement and
as amended from time to time, herein called the "Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Prospectus(es) of the Portfolio.
3
<PAGE>
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in the Schedule(s)
which is attached hereto and made part of this Agreement. The fee will
be calculated based on the average monthly market value of the Assets
under the Sub-Adviser's management and will be paid to the Sub-Adviser
monthly. Except as may otherwise be prohibited by law or regulation
(including any then current SEC staff interpretation), the Sub-Adviser
may, in its discretion and from time to time, waive a portion of its
fee.
5. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or
damages (including reasonable attorney's fees and other related
expenses) howsoever arising from or in connection with the performance
of the Sub-Adviser's obligations under this Agreement; provided,
however, that the Sub-Adviser's obligation under this Section 5 shall
be reduced to the extent that the claim against, or the loss, liability
or damage experienced by the Adviser, is caused by or is otherwise
directly related to the Adviser's own willful misfeasance, bad faith or
negligence, or to the reckless disregard of its duties under this
Agreement.
6. DURATION AND TERMINATION. This Agreement shall become effective upon its
approval by the Trust's Board of Trustees and by the vote of a majority
of the outstanding voting securities of the Portfolio; provided,
however, that at any time the Adviser shall have obtained exemptive
relief from the Securities and Exchange Commission permitting it to
engage a Sub-Adviser without first obtaining approval of the Agreement
from a majority of the outstanding voting securities of the Portfolio(s)
involved, the Agreement shall become effective upon its approval by the
Trust's Board of Trustees. Any Sub-Adviser so selected and approved
shall be without the protection accorded by shareholder approval of an
investment adviser's receipt of compensation under Section 36(b) of the
1940 Act.
This Agreement shall continue in effect for a period of more than two
years from the date hereof only so long as continuance is specifically
approved at least annually in conformance with the 1940 Act; provided,
however, that this Agreement may be terminated with respect to the
Portfolio (a) by the Portfolio at any time, without the payment of any
penalty, by the vote of a majority of Trustees of the Trust or by the
vote of a majority of the outstanding voting securities of the
Portfolio, (b) by the Adviser at any time, without the payment of any
penalty, on not more than 60 days' nor less than 30 days' written notice
to the Sub-Adviser, or (c) by the Sub-Adviser at any time, without the
payment of any penalty, on 90 days' written notice to the Adviser. This
Agreement shall terminate automatically and immediately in the event of
its assignment, or in the event of a termination of the Adviser's
agreement with the Trust. As used in this Section 6, the terms
"assignment" and "vote of a majority of the outstanding voting
securities" shall have the respective meanings set forth in the 1940 Act
and the rules and regulations thereunder, subject to such exceptions as
may be granted by the SEC under the 1940 Act.
7. GOVERNING LAW. This Agreement shall be governed by the internal laws of
the Commonwealth
4
<PAGE>
of Massachusetts, without regard to conflict of law principles;
provided, however, that nothing herein shall be construed as being
inconsistent with the 1940 Act.
8. SEVERABILITY. Should any part of this Agreement be held invalid by a
court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their
respective successors.
9. NOTICE: Any notice, advice or report to be given pursuant to this
Agreement shall be deemed sufficient if delivered or mailed by
registered, certified or overnight mail, postage prepaid addressed by
the party giving notice to the other party at the last address furnished
by the other party:
To the Adviser at: SEI Investments Management Corporation
One Freedom Valley Road
Oaks, PA 19456
Attention: Legal Department
To the Sub-Adviser at: Artisan Partnership Limited Partnership
1000 North Water Street - Suite 1770
Milwaukee, WI 53202
Attention: Chief Financial Officer
10. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject
matter. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but such counterparts
shall, together, constitute only one instrument.
A copy of the Declaration of Trust is on file with the Secretary of
State of the Commonwealth of Massachusetts, and notice is hereby given that the
obligations of this instrument are not binding upon any of the Trustees,
officers or shareholders of the Portfolio or the Trust.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
SEC, whether of special or general application, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
5
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
SEI INVESTMENTS MANAGEMENT ARTISAN PARTNERS LIMITED PARTNERSHIP, BY
CORPORATION ARTISAN INVESTMENT CORP., ITS GENERAL PARTNER
By: /s/ Cynthia M. Parrish By: /s/ Andrew A. Ziegler
-------------------------- --------------------------
Name: Cynthia M. Parrish Name: Andrew A. Ziegler
------------------------ ------------------------
Title: Vice President Title: President
----------------------- -----------------------
6
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI INVESTMENTS MANAGEMENT CORPORATION
AND
ARTISAN PARTNERS LIMITED PARTNERSHIP
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
Small Cap Fund 0.50%
7
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSTITUTIONAL INVESTMENTS TRUST
AGREEMENT made this 30th day of March, 1999, between SEI Investments
Management Corporation, (the "Adviser") and Sawgrass Asset Management, L.L.C.
(the "Sub-Adviser").
WHEREAS, SEI Institutional Investments Trust, a Massachusetts business
trust (the "Trust"), is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated June 14, 1996 (the "Advisory Agreement") with the Trust, pursuant to which
the Adviser will act as investment adviser to the Small Cap Fund (the
"Portfolio"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain
the Sub-Adviser to provide investment advisory services to the Adviser in
connection with the management of the Portfolio, and the Sub-Adviser is willing
to render such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and the
Trust's Board of Trustees, the Sub-Adviser shall manage all of the
securities and other assets of the Portfolio entrusted to it hereunder
(the "Assets"), including the purchase, retention and disposition of the
Assets, in accordance with the Portfolio's investment objectives,
policies and restrictions as stated in the Portfolio's prospectus and
statement of additional information, as currently in effect and as
amended or supplemented from time to time (referred to collectively as
the "Prospectus"), and subject to the following:
(a) The Sub-Adviser shall, in consultation with and subject to the direction
of the Adviser, determine from time to time what Assets will be
purchased, retained or sold by the Portfolio, and what portion of the
Assets will be invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement,
the Sub-Adviser shall act in conformity with the Trust's Declaration of
Trust (as defined herein) and the Prospectus and with the instructions
and directions of the Adviser and of the Board of Trustees of the Trust
and will conform to and comply with the requirements of the 1940 Act,
the Internal Revenue Code of 1986, and all other applicable federal and
state laws and regulations, as each is amended from time to time.
(c) The Sub-Adviser shall determine the Assets to be purchased or sold by
the Portfolio as provided in subparagraph (a) and will place orders with
or through such persons, brokers or dealers to carry out the policy with
respect to brokerage set forth in the Portfolio's Registration Statement
(as defined herein) and Prospectus or as the Board of Trustees or the
Adviser may direct from time to time, in conformity with federal
securities laws. In executing Portfolio transactions and selecting
brokers or dealers, the Sub-Adviser will use its best efforts to seek on
behalf of the Portfolio the best overall terms available. In assessing
<PAGE>
the best overall terms available for any transaction, the Sub-Adviser
shall consider all factors that it deems relevant, including the breadth
of the market in the security, the price of the security, the financial
condition and execution capability of the broker or dealer, and the
reasonableness of the commission, if any, both for the specific
transaction and on a continuing basis. In evaluating the best overall
terms available, and in selecting the broker-dealer to execute a
particular transaction, the Sub-Adviser may also consider the brokerage
and research services provided (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934). Consistent with any
guidelines established by the Board of Trustees of the Trust, the
Sub-Adviser is authorized to pay to a broker or dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting
that transaction if, but only if, the Sub-Adviser determines in good
faith that such commission was reasonable in relation to the value of
the brokerage and research services provided by such broker or
dealer -- viewed in terms of that particular transaction or terms of the
overall responsibilities of the Sub-Adviser to the Portfolio. In
addition, the Sub-Adviser is authorized to allocate purchase and sale
orders for securities to brokers or dealers (including brokers and
dealers that are affiliated with the Adviser, Sub-Adviser or the
Trust's principal underwriter) to take into account the sale of
shares of the Trust if the Sub-Adviser believes that the quality of
the transaction and the commission are comparable to what they would
be with other qualified firms. In no instance, however, will the
Portfolio's Assets be purchased from or sold to the Adviser,
Sub-Adviser, the Trust's principal underwriter, or any affiliated
person of either the Trust, Adviser, the Sub-Adviser or the principal
underwriter, acting as principal in the transaction, except to the
extent permitted by the Securities and Exchange Commission ("SEC")
and the 1940 Act.
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5), (6),
(7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940
Act. The Sub-Adviser shall provide to the Adviser or the Board of
Trustees such periodic and special reports, balance sheets or financial
information, and such other information with regard to its affairs as
the Adviser or Board of Trustees may reasonably request.
The Sub-Adviser shall keep the books and records relating to the Assets
required to be maintained by the Sub-Adviser under this Agreement and
shall timely furnish to the Adviser all information relating to the
Sub-Adviser's services under this Agreement needed by the Adviser to
keep the other books and records of the Portfolio required by Rule 31a-1
under the 1940 Act. The Sub-Adviser shall also furnish to the Adviser
any other information relating to the Assets that is required to be
filed by the Adviser or the Trust with the SEC or sent to shareholders
under the 1940 Act (including the rules adopted thereunder) or any
exemptive or other relief that the Adviser or the Trust obtains from the
SEC. The Sub-Adviser agrees that all records that it maintains on
behalf of the Portfolio are property of the Portfolio and the
Sub-Adviser will surrender promptly to the Portfolio any of such records
upon the Portfolio's request; provided, however, that the Sub-Adviser
may retain a copy of such records. In addition, for the duration of this
Agreement, the Sub-Adviser shall preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act any such records as are required
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<PAGE>
to be maintained by it pursuant to this Agreement, and shall transfer
said records to any successor sub-adviser upon the termination of this
Agreement (or, if there is no successor sub-adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Portfolio's custodian on each business
day with information relating to all transactions concerning the
Portfolio's Assets and shall provide the Adviser with such information
upon request of the Adviser.
(f) The investment management services provided by the Sub-Adviser under
this Agreement are not to be deemed exclusive and the Sub-Adviser shall
be free to render similar services to others, as long as such services
do not impair the services rendered to the Adviser or the Trust.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill
its commitment under this Agreement.
(h) The Sub-Adviser shall review all proxy solicitation materials and be
responsible for voting and handling all proxies in relation to the
securities held in the Portfolio. The Adviser shall instruct the
custodian and other parties providing services to the Portfolio to
promptly forward misdirected proxies to the Sub-Adviser.
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners,
officers or employees.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have responsibility
for all services to be provided to the Portfolio pursuant to the
Advisory Agreement and shall oversee and review the Sub-Adviser's
performance of its duties under this Agreement; provided, however, that
in connection with its management of the Assets, nothing herein shall be
construed to relieve the Sub-Adviser of responsibility for compliance
with the Trust's Declaration of Trust (as defined herein), the
Prospectus, the instructions and directions of the Board of Trustees of
the Trust, the requirements of the 1940 Act, the Internal Revenue Code
of 1986, and all other applicable federal and state laws and
regulations, as each is amended from time to time.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the
Secretary of State of the Commonwealth of Massachusetts (such Agreement
and Declaration of Trust, as in effect on the date of this Agreement and
as amended from time to time, herein called the "Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
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<PAGE>
(c) Prospectus(es) of the Portfolio.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in the Schedule(s)
which is attached hereto and made part of this Agreement. The fee will
be calculated based on the average monthly market value of the Assets
under the Sub-Adviser's management and will be paid to the Sub-Adviser
monthly. Except as may otherwise be prohibited by law or regulation
(including any then current SEC staff interpretation), the Sub-Adviser
may, in its discretion and from time to time, waive a portion of its
fee.
5. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or
damages (including reasonable attorney's fees and other related
expenses) howsoever arising from or in connection with the performance
of the Sub-Adviser's obligations under this Agreement; provided,
however, that the Sub-Adviser's obligation under this Section 5 shall
be reduced to the extent that the claim against, or the loss, liability
or damage experienced by the Adviser, is caused by or is otherwise
directly related to the Adviser's own willful misfeasance, bad faith or
negligence, or to the reckless disregard of its duties under this
Agreement.
6. DURATION AND TERMINATION. This Agreement shall become effective upon its
approval by the Trust's Board of Trustees and by the vote of a majority
of the outstanding voting securities of the Portfolio; provided,
however, that at any time the Adviser shall have obtained exemptive
relief from the Securities and Exchange Commission permitting it to
engage a Sub-Adviser without first obtaining approval of the Agreement
from a majority of the outstanding voting securities of the Portfolio(s)
involved, the Agreement shall become effective upon its approval by the
Trust's Board of Trustees. Any Sub-Adviser so selected and approved
shall be without the protection accorded by shareholder approval of an
investment adviser's receipt of compensation under Section 36(b) of the
1940 Act.
This Agreement shall continue in effect for a period of more than two
years from the date hereof only so long as continuance is specifically
approved at least annually in conformance with the 1940 Act; provided,
however, that this Agreement may be terminated with respect to the
Portfolio (a) by the Portfolio at any time, without the payment of any
penalty, by the vote of a majority of Trustees of the Trust or by the
vote of a majority of the outstanding voting securities of the
Portfolio, (b) by the Adviser at any time, without the payment of any
penalty, on not more than 60 days' nor less than 30 days' written notice
to the Sub-Adviser, or (c) by the Sub-Adviser at any time, without the
payment of any penalty, on 90 days' written notice to the Adviser. This
Agreement shall terminate automatically and immediately in the event of
its assignment, or in the event of a termination of the Adviser's
agreement with the Trust. As used in this Section 6, the terms
"assignment" and "vote of a majority of the outstanding voting
securities" shall have the respective meanings set forth in the 1940 Act
and the rules and regulations thereunder, subject to such exceptions as
may be granted by the SEC under the 1940 Act.
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<PAGE>
7. GOVERNING LAW. This Agreement shall be governed by the internal laws of
the Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed as
being inconsistent with the 1940 Act.
8. SEVERABILITY. Should any part of this Agreement be held invalid by a
court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their
respective successors.
9. NOTICE: Any notice, advice or report to be given pursuant to this
Agreement shall be deemed sufficient if delivered or mailed by
registered, certified or overnight mail, postage prepaid addressed by
the party giving notice to the other party at the last address furnished
by the other party:
To the Adviser at: SEI Investments Management Corporation
One Freedom Valley Road
Oaks, PA 19456
Attention: Legal Department
To the Sub-Adviser at: Sawgrass Asset Management, L.L.C.
4337 Pablo Oaks Court
Jacksonville, FL 32224
Attention: Brian Monroe
10. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject
matter. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but such counterparts
shall, together, constitute only one instrument.
A copy of the Declaration of Trust is on file with the Secretary of
State of the Commonwealth of Massachusetts, and notice is hereby given that the
obligations of this instrument are not binding upon any of the Trustees,
officers or shareholders of the Portfolio or the Trust.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
SEC, whether of special or general application, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
SEI INVESTMENTS MANAGEMENT SAWGRASS ASSET MANAGEMENT, L.L.C.
CORPORATION
By: /s/ Cynthia M. Parrish By: /s/ Dean McQuiddy
-------------------------- --------------------------
Name: Cynthia M. Parrish Name: Dean McQuiddy
------------------------ ------------------------
Title: Vice President Title: Principal
----------------------- -----------------------
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<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI INVESTMENTS MANAGEMENT CORPORATION
AND
SAWGRASS ASSET MANAGEMENT, L.L.C.
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
Small Cap Fund 0.50%
7