497 1 file001.htm DEFINITIVE MATERIALS

Filed pursuant to Rule 497(c)
under the Securities Act of 1933, as amended.
Registration File No.: 33-65632

[SCHRODERS LOGO]

--------------------------------------------------------------------------------

PROSPECTUS
December 31, 2004

SCHRODER ENHANCED INCOME FUND
SCHRODER U.S. CORE FIXED INCOME FUND

Investor Shares

This Prospectus describes two fixed income mutual funds offered by Schroder
Series Trust (the "Trust").

SCHRODER ENHANCED INCOME FUND seeks high current income, consistent with
the preservation of capital and reasonable liquidity. As a secondary
objective, the Fund seeks a high rate of total return. The Fund invests in
U.S. Government and agency securities, mortgage-backed and asset-backed
securities, and other U.S. dollar-denominated investment-grade
income-producing obligations. The Fund's dollar weighted average portfolio
duration will typically be from three to six months, although the adviser
may extend the Fund's dollar weighted average portfolio duration to as
long as 1.5 years.

SCHRODER U.S. CORE FIXED INCOME FUND seeks a high level of total return.
The Fund invests in U.S. Government and agency securities, mortgage-backed
and asset-backed securities, and other investment grade fixed income
investments. The Fund intends to maintain a dollar-weighted average
portfolio duration of three to six years.

This Prospectus explains what you should know about the Funds before you
invest. Please read it carefully. You can call the Schroder Mutual Funds at
(800) 464-3108 to find out more about the Funds and other funds in the Schroder
family of funds. From outside the United States, please call collect to (617)
483-5000 and ask to speak with a representative of the Schroder Mutual Funds.

NEITHER THE U.S. SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF
THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.

SCHRODER SERIES TRUST

TABLE OF CONTENTS

PAGE
-----
SUMMARY INFORMATION ........................................ 3
Schroder Enhanced Income Fund ............................ 3
Schroder U.S. Core Fixed Income Fund ..................... 5
FEES AND EXPENSES .......................................... 8
PRINCIPAL RISKS OF INVESTING IN THE FUNDS .................. 9
NON-PRINCIPAL INVESTMENT STRATEGIES AND TECHNIQUES ......... 13
MANAGEMENT OF THE FUNDS .................................... 15
HOW THE FUNDS' SHARES ARE PRICED ........................... 17
HOW TO BUY SHARES .......................................... 17
HOW TO SELL SHARES ......................................... 20
EXCHANGES .................................................. 21
DIVIDENDS AND DISTRIBUTIONS ................................ 21
PAYMENT OF FEES ............................................ 22
TAXES ...................................................... 22
USA PATRIOT ACT ............................................ 23

SUMMARY INFORMATION

This summary provides a brief description of the Funds' investment objectives,
principal investment strategies, and principal risks.

SCHRODER ENHANCED INCOME FUND

o INVESTMENT OBJECTIVES. Principally, to seek high current income, consistent
with the preservation of capital and reasonable liquidity; secondarily, to
seek a high rate of total return.

o PRINCIPAL INVESTMENT STRATEGIES. The Fund invests in a diversified
portfolio of U.S. dollar-denominated income-producing obligations.

The Fund will normally invest at least 80% of its net assets in
income-producing obligations, which may include, for example:

o securities issued or guaranteed by the U.S. Government or its agencies
or instrumentalities;

o debt securities of domestic or foreign corporations;

o mortgage-backed and other asset-backed securities;

o obligations of non-U.S. governments or their subdivisions, agencies,
and government-sponsored enterprises;

o obligations of international agencies or supranational entities;

o commercial paper and master demand notes;

o preferred securities; and

o short-term investments, such as repurchase agreements, money market
securities, bank certificates of deposit, fixed time deposits, and
bankers' acceptances.

The Fund's adviser currently expects that a substantial portion of the
Fund's assets will be invested in mortgage-backed and asset-backed
securities.

Foreign securities in which the Fund invests will be denominated in the
U.S. dollar.

The Fund's dollar weighted average portfolio duration will typically be
from three to six months, although the adviser may extend the Fund's dollar
weighted average portfolio duration to as long as 1.5 years, in response to
economic, market, or other conditions. Duration is a measure of the
expected life of a fixed income security that is used to determine the
sensitivity of the security's price to changes in interest rates. Unlike
the maturity of a fixed income security, which measures only the time until
final payment is due, duration takes into account the time until all
payments of interest and principal on a security are expected to be made,
including how these payments are affected by prepayments and by changes in
interest rates.

The Fund is not a money market fund and is not subject to the portfolio
quality, maturity, and other requirements applicable to money market funds.

The Fund's investment adviser will trade the Fund's portfolio securities
actively. The adviser may sell certain investments it believes are fully
priced and purchase securities it believes may be undervalued, or it may
trade securities to take advantage of what it believes to be temporary
disparities in normal yield relationships between securities. The Fund's
adviser uses quantitative analysis to understand the structures and risks
of fixed income securities available for investment, and to identify market
sectors offering favorable investment opportunities.

The Fund may enter into interest rate futures and options, interest rate
swap agreements, and credit default swaps. (A derivative instrument will be
considered to be an income-producing obligation if it is itself an
income-producing obligation or, in the adviser's judgment, it may provide
an investment return

comparable to the return that might be provided by an income-producing
obligation.) The Fund may use these "derivatives" for hedging purposes. The
Fund may also use derivatives to gain exposure to securities or market
sectors as a substitute for cash investments (not for leverage) or pending
the sale of securities by the Fund and reinvestment of the proceeds. For
example, the Fund may enter into a so-called credit default swap with
respect to one or more fixed income securities to take advantage of
increases or decreases in the values of those securities without actually
purchasing or selling the securities. The Fund may also seek to obtain
market exposure to the securities in which it may invest by entering into
forward contracts or similar arrangements to purchase those securities in
the future. Any use of derivatives strategies entails the risks of
investing directly in the securities or instruments underlying the
derivatives strategies, as well as the risks of using derivatives
generally, described in this Prospectus and in the Statement of Additional
Information.

The Fund will normally maintain a dollar weighted average rating of the
securities owned by the Fund of at least Aa2 (or the equivalent),
considering unrated securities backed by the full faith and credit of the
U.S. Government to be rated AAA, by following the guidelines listed below:

o The Fund will normally invest only in securities issued or
guaranteed by the U.S. Government or its agencies or
instrumentalities and in securities of "investment grade," which
means either that a nationally recognized statistical rating
organization (for example, Moody's Investor Service, Inc.,
Standard & Poor's Rating Service, or Fitch Investors Service,
Inc.) has rated the securities Baa3 or BBB-- (or the equivalent)
or better, or the adviser has determined the securities to be of
comparable quality.

o The Fund will normally invest more than 50% of its total assets
in securities which a nationally recognized statistical rating
organization has rated Aaa or AAA (or the equivalent).

o The Fund will normally invest no more than 25% of its total
assets in securities that are rated below Aa3 (or the equivalent)
by a nationally recognized statistical rating organization.

o The Fund will normally invest no more than 10% of its total
assets in securities that are rated below A3 (or the equivalent)
by a nationally recognized statistical rating organization.

o The Fund expects not to invest in money market securities that
have a short-term rating lower than A2 (or the equivalent) by a
nationally recognized statistical rating organization.

In the event that different nationally recognized statistical rating
organizations have given different ratings to securities owned by the Fund,
the higher rating will be used for purposes of determining whether the Fund
has complied with these limitations. If a security is not rated by a
nationally recognized statistical rating organization but the Fund's
adviser believes that it is of comparable quality to a security that is so
rated, that security will be considered to have been rated at that level.

o PRINCIPAL RISKS.

o It is possible to lose money on an investment in the Fund.

o Interest Rate Risk. Interest rate increases can cause the price
of a debt security to decrease. In addition, if a security is
prepaid in a period of falling interest rates, the Fund may have
to reinvest the proceeds in lower-yielding investments. Interest
rate risk is generally greater in the case of securities with
longer durations and in the case of portfolios of securities with
longer average durations.

o Credit Risk. The ability, or perceived ability, of the issuer of
a debt security to make timely payments of interest and principal
on the security will affect the value of the security.

o Inflation/Deflation Risk. Inflation risk is the risk that the
value of the Fund's investments may decline as inflation reduces
the value of money. Deflation risk is the risk that prices
throughout the economy may decline over time, which may have an
adverse effect on the creditworthiness of issuers in whose
securities the Fund invests.

o Mortgage- and Asset-Backed Securities Risk. Mortgage-backed and
asset-backed investments tend to increase in value less than
other debt securities when interest rates decline, but are
subject to similar risk of decline in market value during periods
of rising interest rates. The values of mortgage-backed and
asset-backed securities become more volatile as interest rates
rise. In a period of declining interest rates, the Fund may be
required to reinvest prepayments on mortgage-backed and
asset-backed investments in lower-yielding investments.

o U.S. Government Securities Risk. Securities issued or guaranteed
by certain agencies and instrumentalities of the U.S. Government
are not supported by the full faith and credit of the United
States. For example, mortgage-backed bonds issued by Fannie Mae
or Freddie Mac are backed only by the credit of those issuers.

o Foreign Investment Risk. Adverse political, regulatory, market,
or economic developments in foreign countries can affect issuers
located in those countries.

o Derivatives Risk. Derivative transactions typically involve
leverage and may be highly volatile. It is possible that a
derivative transaction will result in a loss greater than the
principal amount invested, and the Fund may not be able to
close-out a derivative transaction at a favorable time or price.

o Frequent Trading / Portfolio Turnover Risk. Frequent trading of
the Fund's portfolio securities will result in relatively high
transaction costs and may result in taxable capital gains. The
Fund's adviser currently expects that the portfolio turnover rate
for the Fund's current fiscal year will be approximately 400%.

SCHRODER U.S. CORE FIXED INCOME FUND

o INVESTMENT OBJECTIVE. To seek a high level of total return.

o PRINCIPAL INVESTMENT STRATEGIES. The Fund normally invests at least 80% of
its net assets in fixed income obligations of issuers located in the United
States, which may include, for example:

o securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities;

o debt securities of domestic or foreign corporations;

o mortgage-backed and other asset-backed securities;

o taxable and tax-exempt municipal bonds;

o obligations of international agencies or supranational entities;

o debt securities convertible into equity securities;

o inflation-indexed bonds;

o structured notes, including hybrid or "indexed" securities,
event-linked bonds, and loan participations;

o delayed funding loans and revolving credit facilities; and

o short-term investments, such as repurchase agreements, bank
certificates of deposit, fixed time deposits, and bankers'
acceptances.

The Fund's adviser currently expects that a substantial portion of the Fund's
assets will be invested in mortgage-backed and asset-backed securities.

The Fund will consider an issuer located in the United States if it is
organized under the laws of the United States or any state of the United
States, or is domiciled or has its principal place of business located in
the United States, or if the Fund's adviser determines that the issuer has
more than 50% of its assets in or derives more than 50% of its revenues
from the United States. The Fund may invest up to 20% of its net assets in
obligations of issuers (including governmental issuers) that are not
located in the United States.

The Fund will normally invest only in securities issued or guaranteed by
the U.S. Government or its agencies or instrumentalities and in securities
of "investment grade" at the time of purchase, which means either that a
nationally recognized statistical rating organization (for example, Moody's
Investor Service, Inc., Standard & Poor's Rating Service, or Fitch
Investors Service, Inc.) has rated the securities Baa3 or BBB-- (or the
equivalent) or better, or the adviser has determined the securities to be
of comparable quality.

If more than one nationally recognized statistical rating organization has
rated a security, the adviser will consider the highest rating for the
purposes of determining whether the security is "investment grade."

Fixed income securities in which the Fund invests may include securities
that pay interest at fixed rates or at floating or variable rates; payments
of principal or interest may be made at fixed intervals or only at maturity
or upon the occurrence of stated events or contingencies.

The Fund may enter into interest rate futures and options, interest rate
swap agreements and credit default swaps. (A derivative instrument will be
considered to be a fixed income security if it is itself a fixed income
security or, in the adviser's judgment, it may provide an investment return
comparable to the return that might be provided by a fixed income
security.) The Fund may use these "derivatives" strategies for hedging
purposes. The Fund may also use derivatives to gain exposure to securities
or market sectors as a substitute for cash investments (not for leverage)
or pending the sale of securities by the Fund and reinvestment of the
proceeds. For example, the Fund may enter into a so-called credit default
swap with respect to one or more fixed income securities to take advantage
of increases or decreases in the values of those securities without
actually purchasing or selling the securities. The Fund may also seek to
obtain market exposure to the securities in which it may invest by entering
into forward contracts or similar arrangements to purchase those securities
in the future. Any use of derivatives strategies entails the risks of
investing directly in the securities or instruments underlying the
derivatives strategies, as well as the risks of using derivatives
generally, described in this Prospectus and in the Statement of Additional
Information.

The Fund intends to maintain a dollar weighted average portfolio duration
of three to six years. Duration is a measure of the expected life of a
fixed income security that is used to determine the sensitivity of the
security's price to changes in interest rates. Unlike the maturity of a
fixed income security, which measures only the time until final payment is
due, duration takes into account the time until all payments of interest
and principal on a security are expected to be made, including how these
payments are affected by prepayments and by changes in interest rates.

In managing the Fund, the Fund's adviser generally relies on detailed
proprietary research. The adviser focuses on the sectors and securities it
believes are undervalued relative to the market.

The Fund's adviser will trade the Fund's portfolio securities actively. In
selecting individual securities for investment, the Fund's adviser
typically:

o uses in-depth fundamental research to identify sectors and
securities for investment by the Fund and to analyze risk;

o exploits inefficiencies in the valuation of risk and reward;

o looks to capitalize on rapidly shifting market risks and dynamics
caused by economic and technical factors; and

o considers the liquidity of securities and the portfolio overall
as an important factor in portfolio construction.

o PRINCIPAL RISKS.

o It is possible to lose money on an investment in the Fund.

o Credit Risk. The ability, or perceived ability, of the issuer of
a debt security to make timely payments of interest and principal
on the security will affect the value of the security.

o Foreign Investment Risk. Adverse political, regulatory, market,
or economic developments in foreign countries can affect issuers
located in those countries. In addition, the values of
investments in foreign securities may be affected by changes in
the values of the currencies in which the securities are
denominated.

o Leverage Risk. Certain investments available to the Fund may
involve leverage. Leverage tends to make the Fund more volatile,
because it tends to exaggerate the effect of any increase or
decrease in the values of the Fund's portfolio securities.

o Liquidity Risk. The Fund may find it difficult to sell or to
close out certain investments at favorable prices or times.

FEES AND EXPENSES

THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD
INVESTOR SHARES OF THE FUNDS.

SHAREHOLDER FEES (paid directly from your investment):

Maximum Sales Load Imposed on Purchases .................... None
Maximum Deferred Sales Load ................................ None
Maximum Sales Load Imposed on Reinvested Dividends ......... None
Redemption Fee ............................................. None
Exchange Fee ............................................... None

ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from Fund assets):

SCHRODER ENHANCED SCHRODER U.S. CORE FIXED
INCOME FUND INCOME FUND
------------------- -------------------------

Management Fees .................................. 0.25% 0.25%
Distribution (12b-1) Fees ........................ None None
Other Expenses(1) ................................ 0.52% 0.57%
Total Annual Fund Operating Expenses ............. 0.77% 0.82%
Less:
Fee Waiver and/or Expense Limitation(2) ......... (0.37)% (0.42)%
Net Expenses(2) .................................. 0.40% 0.40%

(1) "Other Expenses" are based on estimated amounts for each Fund's current
fiscal year.

(2) The Net Expenses shown for each Fund reflect the effect of contractually
imposed fee waivers and/or expense limitations, in effect through
December 31, 2005, on the Total Annual Fund Operating Expenses of each
Fund. In order to limit the expenses of each Fund's Investor Shares, the
Fund's adviser is contractually obligated to reduce its compensation and,
if necessary, to pay certain other Fund expenses until December 31, 2005
to the extent that the Total Annual Fund Operating Expenses of the Fund
allocable to its Investor Shares exceed the annual rate of 0.40% of the
average daily net assets attributable to the Fund's Investor Shares.

EXAMPLE

This Example is intended to help you compare the cost of investing in a Fund
with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in Investor Shares of a Fund for
the time periods indicated and then redeem all of your Investor Shares at the
end of those periods. The Example also assumes that your investment earns a 5%
return each year and that the Fund's operating expenses for each year are the
same as the Fund's Total Annual Fund Operating Expenses shown above (except
that, in the first year, the operating expenses are the same as the Fund's Net
Expenses shown above). Your actual costs may be higher or lower. Based on these
assumptions, your costs would be:

1 YEAR 3 YEARS
-------- --------

Schroder Enhanced Income Fund ................ $41 $209
Schroder U.S. Core Fixed Income Fund ......... $41 $220

PERFORMANCE INFORMATION

Each of the Funds has only recently been organized and as a result has no
historical investment performance. For performance information with respect to
other investment accounts managed by the Funds' adviser, see the Statement of
Additional Information.

PRINCIPAL RISKS OF INVESTING IN THE FUNDS

A Fund may not achieve its objective(s) in all circumstances. The following
provides more detail about certain of the principal risks of investing in a
Fund and the circumstances which could adversely affect the value of a Fund's
shares or its investment return.

o Interest Rate Risk (Both Funds). The values of bonds and other debt
instruments usually rise and fall in response to changes in interest
rates. Declining interest rates generally increase the values of
existing debt instruments, and rising interest rates generally reduce
the value of existing debt instruments. Interest rate risk is
generally greater for investments with longer durations. Some
investments give the issuer the option to call or redeem an investment
before its maturity date. If an issuer calls or redeems an investment
during a time of declining interest rates, a Fund might have to
reinvest the proceeds in an investment offering a lower yield, and
therefore might not benefit from any increase in value as a result of
declining interest rates.

o Credit Risk (Both Funds). The ability, or perceived ability, of the
issuer of a debt security to make timely payments of interest and
principal on the security will affect the value of the security. It is
possible that the ability of an issuer to meet its obligations will
decline substantially during the period when a Fund owns securities of
that issuer, or that the issuer will default on its obligations. An
actual or perceived deterioration in the ability of an issuer to meet
its obligations will likely have an adverse effect on the value of the
issuer's securities.

Each of the Funds invests in securities of "investment grade" at the
time of purchase, which means either that a nationally recognized
statistical rating organization (for example, Moody's Investor
Service, Inc., Standard & Poor's, or Fitch Investors Service, Inc.)
has rated the securities Baa3 or BBB- (or the equivalent) or better,
or the Funds' investment adviser has determined the securities to be
of comparable quality. If a security has been rated by more than one
nationally recognized statistical rating organization the Funds'
adviser will consider the highest rating for the purposes of
determining whether the security is "investment grade." A Fund will
not necessarily dispose of a security held by it if its rating falls
below investment grade, although the Funds' adviser will consider
whether the security continues to be an appropriate investment for the
Fund. Each Fund considers whether a security is "investment grade"
only at the time of purchase.

Credit risk is generally greater for investments issued at less than
their face values and required to make interest payments only at
maturity rather than at intervals during the life of the investment.
Credit rating agencies base their ratings largely on the issuer's
historical financial condition and the rating agencies' investment
analysis at the time of rating. The rating assigned to any particular
investment does not necessarily reflect the issuer's current financial
condition, and does not reflect an assessment of an investment's
volatility or liquidity. Although investment grade investments
generally have lower credit risk than investments rated below
investment grade, they may share some of the risks of lower-rated
investments, including the possibility that the issuers may be unable
to make timely payments of interest and principal and thus default.

o Inflation/Deflation Risk (Both Funds). Inflation risk is the risk that
a Fund's assets or income from a Fund's investments may be worth less
in the future as inflation decreases the value of money. As inflation
increases, the real value of a Fund's portfolio could decline.
Deflation risk is the risk that prices throughout the economy may
decline over time -- the opposite of inflation. Deflation may have an
adverse effect on the creditworthiness of issuers and may make issuer
default more likely, which may result in a decline in the value of a
Fund's portfolio.

o Mortgage- and Asset-Backed Securities Risk (Both Funds). Traditional
debt investments typically pay a fixed rate of interest until
maturity, when the entire principal amount is due. By contrast,
payments on mortgage-backed and many asset-backed investments
typically include both interest and partial payment of principal.
Principal may also be prepaid voluntarily, or as a result of
refinancing or foreclosure. A Fund may have to invest the proceeds
from prepaid investments in other investments with less attractive
terms and yields. As a result, these securities may have less
potential for capital appreciation during periods of declining
interest rates than other securities of comparable maturities,
although they may have a similar risk of decline in market value
during periods of rising interest rates. Because the prepayment rate
generally declines as interest rates rise, an increase in interest
rates will likely increase the duration, and thus the volatility, of
mortgage-backed and asset-backed securities. Some mortgage-backed and
asset-backed investments receive only the interest portion ("IOs") or
the principal portion ("POs") of payments on the underlying assets.
The yields and values of these investments are extremely sensitive to
changes in interest rates and in the rate of principal payments on the
underlying assets. IOs tend to decrease in value if interest rates
decline and rates of repayment (including prepayment) on the
underlying mortgages or assets increase; it is possible that a Fund
may lose the entire amount of its investment in an IO due to a
decrease in interest rates. Conversely, POs tend to decrease in value
if interest rates rise and rates of repayment decrease. Moreover, the
market for IOs and POs may be volatile and limited, which may make
them difficult for a Fund to buy or sell. A Fund may gain investment
exposure to mortgage-backed and asset-backed investments by entering
into agreements with financial institutions to buy the investments at
a fixed price at a future date. A Fund may or may not take delivery of
the investments at the termination date of such an agreement, but will
nonetheless be exposed to changes in value of the underlying
investments during the term of the agreement.

o Foreign Investment Risk (Both Funds). Investments in foreign
securities entail certain risks. There may be a possibility of
nationalization or expropriation of assets, confiscatory taxation,
political or financial instability, and diplomatic developments that
could affect the value of a Fund's investments in certain foreign
countries. Since foreign securities in which Schroder U.S. Core Fixed
Income Fund invests may be denominated and traded in foreign
currencies, the value of that Fund's assets may be affected favorably
or unfavorably by currency exchange rates, currency exchange control
regulations, foreign withholding taxes, and restrictions or
prohibitions on the repatriation of foreign currencies, although the
Funds' adviser will typically (though not necessarily) attempt to
limit any foreign currency exposure by entering into foreign currency
exchange contracts or other hedging transactions. (Schroder Enhanced
Income Fund will only invest in securities denominated in U.S.
dollars.) In addition, there may be less information publicly
available about a foreign issuer than about a U.S. issuer, and foreign
issuers are not generally subject to accounting, auditing, and
financial reporting standards and practices comparable to those in the
United States. The securities of some foreign issuers are less liquid
and at times more volatile than securities of comparable U.S. issuers.
Foreign brokerage commissions and other fees are also generally higher
than in the United States. Foreign settlement procedures and trade
regulations may involve certain risks (such as delay in payment or
delivery of securities or in the recovery of the Funds' assets held
abroad) and expenses not present in the settlement of domestic
investments.

In addition, legal remedies available to investors in certain foreign
countries may be more limited than those available to investors in the
United States or in other foreign countries. The willingness and
ability of foreign governmental entities to pay principal and interest
on government securities depends on various economic factors,
including the issuer's balance of payments, overall debt level, and
cash-flow considerations related to the availability of tax or other
revenues to satisfy the issuer's obligations. If a foreign
governmental entity defaults on its obligations on the securities,

the Funds may have limited recourse available to them. The laws of
some foreign countries may limit the Funds' ability to invest in
securities of certain issuers located in those countries.

Special tax considerations apply to the Funds' investments in foreign
securities. In determining whether to invest a Fund's assets in debt
securities of foreign issuers, the Funds' adviser considers the likely
impact of foreign taxes on the net yield available to the Fund and its
shareholders. Income and/or gains received by a Fund from sources
within foreign countries may be reduced by withholding and other taxes
imposed by such countries. Tax conventions between certain countries
and the United States may reduce or eliminate such taxes. Any such
taxes paid by a Fund will reduce its income available for distribution
to shareholders. In certain circumstances, a Fund may be able to pass
through to shareholders credits for foreign taxes paid. Certain of
these risks may also apply to some extent to investments in U.S.
companies that are traded in foreign markets, or investments in U.S.
companies that have significant foreign operations.

o U.S. Government Securities Risk (Both Funds). U.S. Government
securities include a variety of securities that differ in their
interest rates, maturities, and dates of issue. While securities
issued or guaranteed by some agencies or instrumentalities of the U.S.
Government (such as the Government National Mortgage Association) are
supported by the full faith and credit of the United States,
securities issued or guaranteed by certain other agencies or
instrumentalities of the U.S. Government (such as Federal Home Loan
Banks) are supported by the right of the issuer to borrow from the
U.S. Government, and securities issued or guaranteed by certain other
agencies and instrumentalities of the U.S. Government (such as Fannie
Mae, Freddie Mac and the Student Loan Marketing Association) are
supported only by the credit of the issuer itself.

o Derivatives Risk (Both Funds). Derivatives are financial contracts
whose value depends on, or derives from, the value of an underlying
asset, reference rate, or index. Each Fund typically uses derivatives
as a substitute for taking a position in the underlying asset and/or
as part of a strategy designed to reduce exposure to other risks, such
as interest rate or currency risk. A Fund's use of derivative
instruments involves risks different from, and possibly greater than,
the risks associated with investing directly in securities and other
traditional investments. Derivatives are subject to a number of risks
described elsewhere in this section, such as liquidity risk, interest
rate risk, and credit risk, and the risk that a derivative transaction
may not have the effect the Funds' investment adviser anticipated.
Derivatives also involve the risk of mispricing or improper valuation
and the risk that changes in the value of the derivative may not
correlate perfectly with the underlying asset, rate, or index.
Derivative transactions typically involve leverage and may be highly
volatile. Use of derivatives other than for hedging purposes may be
considered speculative, and when a Fund invests in a derivative
instrument it could lose more than the principal amount invested.
Also, suitable derivative transactions may not be available in all
circumstances and there can be no assurance that a Fund will engage in
these transactions to reduce exposure to other risks when that would
be beneficial. Many derivative transactions are entered into "over the
counter" (not on an exchange or contract market); as a result, the
value of such a derivative transaction will depend on the ability and
willingness of a Fund's counterparty to perform its obligations under
the transaction.

transaction costs on the sale of securities and reinvestment in other
securities, and may result in the realization of taxable capital gains
(including short-term gains, which are generally taxed to shareholders
at ordinary income rates). The trading costs and tax effects
associated with portfolio turnover may adversely affect a Fund's
performance. During periods when a Fund experiences high portfolio
turnover rates, these effects are likely to be more pronounced.
Consult your tax advisor regarding the impact of a Fund's portfolio
turnover rate on your investments.

o Leveraging Risk (Schroder U.S. Core Fixed Income Fund). Certain
transactions by Schroder U.S. Core Fixed Income Fund may give rise to
a form of leverage. Such transactions may include, among others, loans
of portfolio securities, and the use of when-issued, delayed delivery,
or forward commitment transactions. The use of derivatives may also
create leveraging risk. Leverage, including borrowing money, may cause
Schroder U.S. Core Fixed Income Fund to be more volatile than if the
Fund had not been leveraged. This is because leverage tends to
exaggerate the effect of any increase or decrease in the value of
Schroder U.S. Core Fixed Income Fund's portfolio securities.

o Liquidity Risk (Schroder U.S. Core Fixed Income Fund). Liquidity risk
exists when particular investments are difficult to purchase or sell.
Schroder U.S. Core Fixed Income Fund's investments in illiquid
securities may reduce the returns of the Fund because it may be unable
to sell the illiquid securities at an advantageous time or price.
Investments in foreign securities, derivatives, or securities with
substantial market and/or credit risk tend to have the greatest
exposure to liquidity risk.

[Remainder of page intentionally left blank.]

NON-PRINCIPAL INVESTMENT STRATEGIES AND TECHNIQUES

In addition to the principal investment strategies described in the Summary
Information section above, each Fund may at times, but is not required to, use
the strategies and techniques described below, which involve certain special
risks. This Prospectus does not attempt to disclose all of the various
investment techniques and types of securities that the Funds' investment
adviser might use in managing the Funds. As in any mutual fund, investors must
rely on the professional investment judgment and skill of the Funds' adviser.

o When-issued and delayed delivery securities. A Fund may purchase
securities on a when-issued, delayed delivery, or forward commitment
basis. These transactions involve a commitment by a Fund to purchase a
security for a predetermined price or yield, with payments and
delivery taking place more than seven days in the future, or after a
period longer than the customary settlement period for that type of
security. These transactions may increase the overall investment
exposure for the Fund and involve a risk of loss if the value of the
securities declines prior to the settlement date.

o Temporary defensive strategies. At times, the Funds' investment
adviser may judge that conditions in the securities markets make
pursuing a Fund's basic investment strategy inconsistent with the best
interests of its shareholders. At such times, the adviser may, but is
not required to, temporarily use alternate investment strategies
primarily designed to reduce fluctuations in the value of the Fund's
assets. In implementing these "defensive" strategies, the adviser
would invest in investment grade fixed income securities, cash, or
money market instruments the adviser considers consistent with such
defensive strategies. It is impossible to predict when, or for how
long, a Fund would use these alternate strategies. One risk of taking
such temporary defensive positions is that the Fund may not achieve
its investment objectives.

o Pricing. At times market conditions might make it hard to value some
investments. If a Fund has valued securities it holds too high, you
may end up paying too much for the Fund's shares when you buy into a
Fund. If a Fund underestimates the price of its portfolio securities,
you may not receive the full market value for your Fund shares when
you sell. To the extent a Fund relies on a pricing service to value
some or all of its portfolio securities, it is possible that the
pricing information provided by the service will not reflect the
actual price the Fund would receive upon a sale of the security.

o Other investments. A Fund may also invest in other types of securities
and utilize a variety of investment techniques and strategies that are
not described in this Prospectus. These securities and techniques may
subject the Fund to additional risks. Please see the Statement of
Additional Information for additional information about the securities
and investment techniques described in this Prospectus and about
additional techniques and strategies that may be used by a Fund.

o Changes in investment objectives and policies. The investment policy
of Schroder U.S. Core Fixed Income Fund requiring it to invest at
least 80% of its net assets in fixed income obligations of issuers
located in the United States may be changed by the Trustees without
shareholder approval after providing shareholders of the Fund 60 days'
prior written notice. Similarly, the investment policy of Schroder
Enhanced Income Fund requiring it to invest at least 80% of its net
assets in income-producing obligations may be changed by the Trustees
without shareholder approval after providing shareholders of the Fund
60 days' prior written notice. The Trustees may change the investment
objectives and other policies of each Fund without a vote of the
shareholders.

o Percentage investment limitations. Unless otherwise noted, all
percentage limitations on Fund investments listed in this Prospectus
will apply at the time of investment. A Fund will not consider an
investment to violate these limitations unless an excess or deficiency
were to occur or exist immediately after and as a result of an
investment. References in any of the discussions of a Fund's
investment policies to 80% of a Fund's net assets refer to that
percentage of the aggregate of the Fund's net assets and the amount,
if any, of borrowings by the Fund for investment purposes.

[Remainder of page intentionally left blank.]

MANAGEMENT OF THE FUNDS

A Board of Trustees governs the Trust. The Board of Trustees has retained
Schroder Investment Management North America Inc. ("Schroders") to manage the
investments of each Fund. Subject to the control of the Trustees, Schroders
also manages the Funds' other affairs and business.

Schroders (itself and its predecessors) has been an investment manager since
1962, and currently serves as investment adviser to the Funds, other mutual
funds, and a broad range of institutional investors. Schroders' ultimate
parent, Schroders plc, and its affiliates currently engage in the asset
management business, and as of June 30, 2004, had in the aggregate assets under
management of approximately $181 billion.

o INVESTMENT ADVISORY FEES. The Schroder Enhanced Income Fund and the
Schroder U.S. Core Fixed Income Fund each pay an investment advisory
fee to Schroders at the annual rate of 0.25% of the Fund's average
daily net assets.

o EXPENSE LIMITATIONS AND WAIVERS. In order to limit the expenses of the
Funds' Investor Shares, Schroders is contractually obligated to reduce
its compensation and, if necessary, to pay certain other Fund expenses
until December 31, 2005 to the extent that the Total Annual Fund
Operating Expenses of each Fund allocable to its Investor Shares
exceed the annual rate of 0.40% of the average daily net assets
attributable to such Fund's Investor Shares. Only the Board of
Trustees of the Trust may terminate this contractual obligation prior
to December 31, 2005.

o PORTFOLIO MANAGEMENT. The following portfolio managers at Schroders
have primary responsibility for making investment decisions for each
of the Funds since the years shown below. As of September 30, 2004,
the portfolio management team was responsible for managing
approximately $2.3 billion in assets utilizing an investment strategy
similar to the strategy used in managing the Schroder Enhanced Income
Fund, and approximately $663 million in assets utilizing an investment
strategy similar to that used in managing the Schroder U.S. Core Fixed
Income Fund. The portfolio managers' recent professional experience is
also shown.

PORTFOLIO MANAGER SINCE RECENT PROFESSIONAL EXPERIENCE
------------------- ----------------------------------------- ------------------------------------------

Steven Lear Schroder Enhanced Income Fund -- Lead portfolio manager for each of the
Inception (December 2004) Funds. Mr. Lear is a Director and
Executive Vice President of Schroders and
Schroder U.S. Core Fixed Income Fund -- has been an employee of Schroders since
Inception (December 2004) June 1998.

David Harris Schroder Enhanced Income Fund -- Portfolio manager for each of the Funds.
Inception (December 2004) Mr. Harris is a Senior Vice President of
Schroders and has been an employee of
Schroder U.S. Core Fixed Income Fund -- Schroders since November 1992.
Inception (December 2004)

Wesley A. Sparks Schroder Enhanced Income Fund -- Portfolio manager for each of the Funds.
Inception (December 2004) Mr. Sparks has been at Schroders since
December 2000 and is currently First Vice
Schroder U.S. Core Fixed Income Fund -- President of Schroders. Prior to joining
Inception (December 2004) Schroders Mr. Sparks was a portfolio
manager at Aeltus Investment
Management since June 1999.

PORTFOLIO MANAGER SINCE RECENT PROFESSIONAL EXPERIENCE
------------------- ----------------------------------------- --------------------------------------------

Gregg Moore Schroder Enhanced Income Fund -- Portfolio manager for each of the Funds.
Inception (December 2004) Mr. Moore has been at Schroders since
June 2001 and is currently Vice President
Schroder U.S. Core Fixed Income Fund -- of Schroders. Prior to joining Schroders
Inception (December 2004) Mr. Moore was a quantitative analyst at
Aeltus Investment Management since
December 1999.

Matt Murphy Schroder Enhanced Income Fund -- Portfolio manager for each of the Funds.
Inception (December 2004) Mr. Murphy has been at Schroders since
July 2004 and is currently a Vice President
Schroder U.S. Core Fixed Income Fund -- of Schroders. Prior to joining Schroders
Inception (December 2004) Mr. Murphy was a Managing Director at
MONY Capital Management from
February 2002 to July 2004 and was
previously a Director at FitchRatings since
August 1996.

[Remainder of page intentionally left blank.]

HOW THE FUNDS' SHARES ARE PRICED

Each Fund calculates the net asset value of its Investor Shares by dividing the
total value of its assets attributable to its Investor Shares, less its
liabilities attributable to those shares, by the number of Investor Shares
outstanding. Each Fund values its Investor Shares as of the close of trading on
the New York Stock Exchange (normally 4:00 p.m., Eastern Time) each day the
Exchange is open. The Trust expects that days, other than weekend days, when
the Exchange will not be open are New Year's Day, Martin Luther King, Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, and Christmas Day. Each Fund values its portfolio securities
for which market quotations are readily available at market value. Investments
and assets for which market values are not readily available are valued by
Schroders at their fair values pursuant to guidelines established by the Board
of Trustees, generally by reference to other securities or indexes. For
instance, a pricing service may recommend a fair value based generally on
prices of comparable securities (or, when such prices are not available -- for
example, on a day when the bond markets are closed -- based on other factors
that may be indicative of the securities' values). Short-term investments that
will mature within 60 days are valued by Schroders using amortized cost, a form
of fair valuation, pursuant to procedures adopted by the Board of Trustees. The
net asset value of each Fund's Investor Shares may differ from that of its
Advisor Shares due to differences in the expenses of Investor Shares and
Advisor Shares.

HOW TO BUY SHARES

The Trust, through its distributor, Schroder Fund Advisors Inc., sells Investor
Shares of the Funds at their net asset value without any sales charges or
loads, so that the full amount of your purchase payment is invested in the Fund
you select.

You may purchase Investor Shares of a Fund by completing the Account
Application that accompanies this Prospectus, and sending payment by check or
wire as described below. Acceptance of your order may be delayed pending
receipt of additional documentation, such as copies of corporate resolutions
and instruments of authority, from corporations, administrators, executors,
personal representatives, directors, or custodians.

Each Fund sells its Investor Shares at their net asset value next determined
after the Fund or its transfer agent, Boston Financial Data Services, Inc.
("BFDS"), receives your request in good order (meaning that the request meets
the requirements set out below and in the Account Application, and otherwise
meets the requirements implemented from time to time by the Funds' transfer
agent or the Fund). In order for you to receive a Fund's next determined net
asset value, the Fund or BFDS must receive your order before the close of
trading on the New York Stock Exchange (normally 4:00 p.m., Eastern Time). The
Trust reserves the right to reject any order to purchase Investor Shares of a
Fund.

The minimum investments for initial and additional purchases of Investor Shares
of the Funds are as follows:

INITIAL ADDITIONAL
INVESTMENT INVESTMENTS
------------ ------------
Regular Accounts $100,000 $10,000

The Trust may, in its sole discretion, waive these minimum initial or
subsequent investment amounts for share purchases by: an employee of Schroders,
any of its affiliates or a financial intermediary authorized to sell shares of
the Funds, or such employee's spouse or life partner, or children or
step-children age 21 or younger; investment advisory clients of Schroders; and
current or former Trustees. Forshare purchases made through certain fund
networks or other financial intermediaries, the investment minimums associated
with the policies and programs of the fund network or financial intermediary
will apply.

The Funds do not issue share certificates.

The Trust may suspend the offering of Investor Shares of the Funds for any
period of time. Excessive trading can hurt Fund performance, operations, and
shareholders. The Trust may reject an order to purchase shares of a Fund
(including by way of exchange) if the Trust or Schroders believes that the
investor in question is engaged in "market timing" or similar activities that
may be harmful to a Fund or its shareholders. The Trust may change any
investment minimum from time to time.

Although Schroder Enhanced Income Fund is not a money market fund, investors
may invest in Schroder Enhanced Income Fund for short-term purposes and
purchase and sell shares of this Fund more frequently than they might shares of
another type of mutual fund. Investors in Schroder Enhanced Income Fund should
anticipate that, as a result, this Fund will likely incur costs and expenses
related to short-term trading in its shares (including possible dilution of the
Fund's investment return). Schroders expects to manage the Fund's portfolio in
light of anticipated frequent purchase and sale activity in order to limit any
adverse effect on the Fund.

PURCHASES BY CHECK
You may purchase Investor Shares of a Fund by mailing a check (in U.S. dollars)
payable to the Fund in which you wish to invest. If you wish to purchase
Investor Shares of two or more Funds, make your check payable to Schroder
Mutual Funds and include written instructions as to how the amount of your
check should be allocated among the Funds whose shares you are purchasing.
Schroder Mutual Funds will not accept third-party checks. You should direct
your check and your completed Account Application as follows:

REGULAR MAIL OVERNIGHT OR EXPRESS MAIL
---------------------------- -------------------------------------
Schroder Mutual Funds Boston Financial Data Services, Inc.
P.O. Box 8507 Attn: Schroder Mutual Funds
Boston, MA 02266 66 Brooks Drive
Braintree, MA 02184

For initial purchases, a completed Account Application must accompany your
check.

PURCHASES BY BANK WIRE
If you make your initial investment by wire, a completed Account Application
must precede your order. Upon receipt of the Application, BFDS will assign you
an account number. BFDS will process wire orders received prior to the close of
trading on the New York Stock Exchange (normally 4:00 p.m., Eastern Time) on
each day the Exchange is open for trading at the net asset value next
determined as of the end of that day. BFDS will process wire orders received
after that time at the net asset value next determined thereafter.

Please call BFDS at (800) 464-3108 to give notice that you will send funds by
wire, and obtain a wire reference number. (From outside the United States,
please call collect to (617) 483-5000 and ask to speak with a Schroder Mutual
Funds representative.) Please be sure to obtain a wire reference number.
Instruct your bank to wire funds with the assigned reference number as follows:

State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
ABA No.: 011000028
Attn: Schroder Mutual Funds
DDA No.: 9904-650-0
FBO: Account Registration
A/C: Mutual Fund Account Number
Name of Fund

BFDS will not process your purchase until it receives the wired funds.

AUTOMATIC PURCHASES

You can make regular investments of $100 or more per month or quarter in
Investor Shares of a Fund through automatic deductions from your bank account.
Please complete the appropriate section of the Account Application if you would
like to utilize this option. For more information, please call (800) 464-3108.

BROKERS AND OTHER FINANCIAL INSTITUTIONS

You may also buy, redeem, and exchange Investor Shares of a Fund through an
authorized broker or other financial institution that has an agreement with
Schroders or Schroder Fund Advisors Inc. The purchase, redemption and exchange
policies and fees charged such brokers and other institutions may be different
than those of the Funds. For instance, banks, brokers, retirement plans and
financial advisers may charge transaction fees and may set different investment
minimums or limitations on buying, exchanging, or redeeming Investor Shares.
Please consult a representative of your financial institution for further
information.

Certain brokers or other financial institutions may accept purchase and
redemption orders for Investor Shares on behalf of a Fund. Such brokers or
financial institutions may designate other intermediaries to accept purchase
and redemption orders on behalf of a Fund. For purposes of pricing, a Fund may
be deemed to have received a purchase or redemption order when an authorized
broker or financial institution or, if applicable, a broker or financial
institution's authorized designee, receives the order. Agreements between such
brokers or financial institutions and Schroder Fund Advisors Inc., the Trust's
distributor, provide that these orders would be priced at the Fund's net asset
value next determined after they are received by the broker or financial
institution or authorized designee.

Brokers or other agents may charge investors a fee for effecting transactions
in shares of a Fund, in addition to any fees the Funds charge.

PURCHASES IN-KIND

Investors may purchase Investor Shares of a Fund for cash or in exchange for
securities, subject to the determination by Schroders in its discretion that
the securities are acceptable. (For purposes of determining whether securities
will be acceptable, Schroders will consider, among other things, whether they
are liquid securities of a type consistent with the investment objectives and
policies of the Fund and have a readily ascertainable value.) If a Fund
receives securities from an investor in exchange for Investor Shares of the
Fund, the Fund will under some circumstances have the same tax basis in the
securities as the investor had prior to the exchange (and the Fund's gain for
tax purposes would be calculated with regard to the investor's tax basis), and
in such cases the Fund's holding period in those securities would include the
investor's holding period. Any gain on the sale of securities received in
exchange for Investor Shares of a Fund would be subject to distribution as
capital gain to all of the Fund's shareholders. (In some circumstances, receipt
of securities from an investor in exchange for Investor Shares of a Fund may be
a taxable transaction to the investor, in which case the Fund's tax basis in
the securities would reflect the fair market value of the securities on the
date of the exchange, and its holding period in the securities would begin on
that date.) Each Fund values securities accepted by Schroders in the same
manner as are the Fund's portfolio securities as of the time of the next
determination of the Fund's net asset value. Although each Fund seeks to
determine the fair value of securities contributed to the Fund, any valuation
that does not reflect fair value may dilute the interests of the purchasing
shareholder or the other shareholders of the Fund. All rights reflected in the
market price of accepted securities at the time of valuation become the
property of the Fund and must be delivered to the Fund upon receipt by the
investor. Investors may realize a taxable gain or loss upon the exchange.
Investors interested in purchases through exchange should telephone Schroders
at (800) 464-3108, their Schroders client representative, or other financial
intermediary.

CERTAIN PAYMENTS BY SCHRODERS OR ITS AFFILIATES

Schroder Fund Advisors Inc., Schroders, or their affiliates may, at their own
expense and out of their own assets, provide compensation to financial
intermediaries in connection with sales of Fund shares or shareholder
servicing. In some instances, they may make this compensation available only to
certain intermediaries who have sold or are expected to sell significant
amounts of shares of a Fund. If you purchase or sell shares through an
intermediary, the intermediary may charge a separate fee for its services.
Consult your intermediary for information.

If correspondence to the shareholder's address of record is returned, then,
unless the Transfer Agent determines the shareholder's new address, the
Transfer Agent will reinvest dividends and other distributions returned to it
in the applicable Fund(s), and the checks will be canceled.

HOW TO SELL SHARES

WHEN YOU MAY REDEEM

You may sell your Investor Shares back to a Fund on any day the New York Stock
Exchange is open by sending a letter of instruction or stock power form to
Schroder Mutual Funds, or by calling BFDS at (800) 464-3108. The price you will
receive is the net asset value next determined after receipt of your redemption
request in good order. A redemption request is in good order if it includes the
exact name in which the shares are registered, the investor's account number,
and the number of shares or the dollar amount of shares to be redeemed, and,
for written requests, if it is signed in accordance with the account
registration. A bank, broker-dealer, or certain other financial institutions
must guarantee any signature in the form of the Stamp 2000 Medallion Guarantee.
You may redeem your shares by telephone only if you elected the telephone
redemption privilege option on your Account Application or otherwise in
writing. Unless otherwise agreed, you may only exercise the telephone
redemption privilege to redeem shares worth not more than $50,000. The Trust
may require additional documentation from shareholders that are corporations,
partnerships, agents, fiduciaries, surviving joint owners, those acting through
powers of attorney, or similar delegation.

The Trust will pay you for your redemptions as promptly as possible and in any
event within seven days after the request for redemption is received in good
order. The Trust generally sends payment for shares on the business day after a
request is received. In case of emergencies, the Trust may suspend redemptions
or postpone payment for more than seven days, as permitted by law. If you paid
for your Investor Shares by check, the Trust will not send you your redemption
proceeds until the check you used to pay for the shares has cleared, which may
take up to 15 calendar days from the purchase date.

INVOLUNTARY REDEMPTIONS

If, because of your redemptions, your account balance for a Fund falls below a
minimum amount set by the Trustees (presently $2,000), the Trust may choose to
redeem your Investor Shares in that Fund and pay you for them. You will receive
at least 30 days written notice before the Trust redeems your Investor Shares,
and you may purchase additional Investor Shares at any time to avoid a
redemption. The Trust may also redeem Investor Shares if you own shares of a
Fund above a maximum amount set by the Trustees. There is currently no maximum,
but the Trustees may establish one at any time, which could apply to both
present and future shareholders.

SUSPENSION

The Trust may suspend the right of redemption for the Fund during any period
when: (1) trading on the New York Stock Exchange is restricted, as determined
by the SEC, or the Exchange is closed; (2) the SEC has by order permitted such
suspension; or (3) an emergency (as defined by rules of the SEC) exists, making
disposal of portfolio investments or determination of the Fund's net asset
value not reasonably practicable.

REDEMPTIONS IN KIND

The Trust has agreed to redeem Investor Shares of each Fund solely in cash up
to the lesser of $250,000 or 1% of the Fund's net assets attributable to
Investor Shares during any 90-day period for any one shareholder. In
consideration of the best interests of the remaining shareholders of a Fund,
the Trust may pay any redemption proceeds exceeding this amount in whole or in
part by a distribution in kind of securities held by a Fund in lieu of cash.
The Trust does not expect to redeem Investor Shares in kind under normal
circumstances. If the Trust redeems your Investor Shares in kind, you should
expect to incur brokerage expenses and other transaction costs upon the
disposition of the securities you receive from the Fund. In addition, the price
of those securities may change between the time when you receive the securities
and the time when you are able to dispose of them.

GENERAL

If you request that your redemption proceeds be sent to you at an address other
than your address of record, or to another party, you must include a signature
guarantee for each signature, by an eligible signature guarantor, such as a
member firm of a national securities exchange or a commercial bank or trust
company located in the United States. If you are a resident of a foreign
country, another type of certification may be required. For more details,
please contact BFDS at (800) 464-3108, your Schroders client representative or
your financial intermediary. The Trust may require corporations, fiduciaries,
and other types of shareholders to supply additional documents which support
their authority to effect a redemption. In an effort to prevent unauthorized or
fraudulent redemption requests by telephone, BFDS will follow reasonable
procedures to confirm that telephone instructions are genuine. BFDS and the
Trust generally will not be liable for any losses due to unauthorized or
fraudulent purchase or redemption requests, but the applicable party or parties
may be liable if they do not follow these procedures.

EXCHANGES

You can exchange your Investor Shares of a Fund for Investor Shares of other
funds in the Schroder family of funds at any time at their respective net asset
values. The Trust would treat the exchange as a sale of your Investor Shares,
and any gain on the exchange will generally be subject to tax. For a listing of
the Schroder funds available for exchange and to exchange Investor Shares,
please call (800) 464-3108. (From outside the United States, please call
collect to (617) 483-5000 and ask to speak with a representative of the
Schroder Mutual Funds.) In order to exchange shares by telephone, you must
complete the appropriate section of the Account Application. The Trust and
Schroders reserve the right to change or suspend the exchange privilege at any
time. Schroders would notify shareholders of any such change or suspension. The
Trust or Schroders may limit the amount or number of exchanges or reject any
exchange if the Trust or Schroders believes that the investor in question is
engaged in "market timing" activities or similar activities that may be harmful
to a Fund or its shareholders. See "How to Buy Shares," above for additional
information.

DIVIDENDS AND DISTRIBUTIONS

Each Fund declares dividends from net investment income daily and distributes
these dividends monthly. Each Fund distributes net realized capital gain at
least annually. Each Fund makes distributions from net capital gain after
applying any available capital loss carryovers.

Shares begin to earn dividends on the first business day following the day of
purchase. Shares earn dividends through the date of redemption.

YOU CAN CHOOSE FROM FOUR DISTRIBUTION OPTIONS:

o Reinvest all distributions in additional Investor Shares of your Fund;

o Receive distributions from net investment income in cash while
reinvesting capital gains distributions in additional Investor Shares
of your Fund;

o Receive distributions from net investment income in additional
Investor Shares of your Fund while receiving capital gain
distributions in cash; or

o Receive all distributions in cash.

You can change your distribution option by notifying BFDS in writing. If you do
not select an option when you open your account, a Fund will reinvest all
distributions in Investor Shares of that Fund. You will receive a statement
confirming reinvestment of distributions in additional Fund shares promptly
following the period in which the reinvestment occurs.

PAYMENT OF FEES

Each Fund may pay Schroders or its affiliates, banks, broker-dealers, financial
advisors, or other financial institutions fees for sub-administration,
sub-transfer agency, and other shareholder services associated with
shareholders whose shares are held of record in omnibus or other group
accounts. In addition, each Fund's service providers, including Schroders, or
any of their affiliates, may, from time to time, make these types of payment or
payments for other shareholder services or distribution, out of their own
resources and without additional cost to the Fund or its shareholders.

TAXES

TAXES ON DIVIDENDS AND DISTRIBUTIONS. For federal income tax purposes,
distributions of investment income are taxed as ordinary income. Taxes on
distributions of capital gains are determined by how long the Fund owned the
investments that generated the gains, rather than how long you have owned your
shares. Distributions of net capital gains from the sale of investments that a
Fund has held for more than one year and that are properly designated by the
Fund as capital gain dividends will be taxable as long-term capital gains.
Distributions of gains from the sale of investments that a Fund owned for one
year or less will be taxable as ordinary income. Generally, gains realized by a
Fund on the sale or exchange of investments, the income from which is tax
exempt, will be taxable to shareholders. For taxable years beginning on or
before December 31, 2008, distributions of investment income designated by a
Fund as derived from "qualified dividend income" will be taxed in the hands of
individuals at rates applicable to long-term capital gains provided holding
period and other requirements are met at both the shareholder and Fund level.
Neither Fund expects a significant portion of Fund distributions to be derived
from qualified dividend income.

Distributions are taxable to shareholders even if they are paid from income or
gains earned by a Fund before a shareholder's investment (and thus were
included in the price the shareholder paid). Distributions are taxable whether
shareholders receive them in cash or reinvest them in additional shares.

Long-term capital gain rates applicable to individuals have been temporarily
reduced -- in general, to 15% with lower rates applying to taxpayers in the 10%
and 15% rate brackets -- for taxable years beginning on or before December 31,
2008.

TAXES WHEN YOU SELL, REDEEM OR EXCHANGE YOUR SHARES. Any gain resulting from a
redemption, sale or exchange (including an exchange for shares of another fund)
of your shares in a Fund will also generally be subject to federal income tax
at either short-term or long-term capital gain rates depending on how long you
have owned your shares.

FOREIGN TAXES. A Fund's investments in foreign securities may be subject to
foreign withholding or other taxes. In that case, the Fund's yield on those
securities would be decreased. Shareholders generally will not be entitled to
claim a credit or deduction with respect to foreign taxes. In addition,
investments in foreign securities may increase or accelerate a Fund's
recognition of ordinary income and may affect the timing or amount of a Fund's
distributions.

INVESTMENTS IN DEBT OBLIGATIONS. A Fund's investment in certain debt
obligations may cause the Fund to recognize taxable income in excess of the
cash generated by such obligations. Thus, a Fund could be required at times to
liquidate other investments in order to satisfy its distribution requirements.

CONSULT YOUR TAX ADVISOR ABOUT OTHER POSSIBLE TAX CONSEQUENCES. This is a
summary of certain U.S. federal income tax consequences of investing in a Fund.
You should consult your tax advisor for more information on your own tax
situation, including possible other federal, state, local and foreign tax
consequences of investing in a Fund.

USA PATRIOT ACT

To help the government fight the funding of terrorism and money laundering
activities, federal law requires all financial institutions to obtain, verify,
and record information that identifies each person who opens an account. What
this means to you: When you open an account directly with a Fund, you will be
asked your name, address, date of birth, and other information that will allow
you to be identified. You may also be asked for other identifying
documentation. If the Trust is unable to verify the information shortly after
your account is opened, your account may be closed and your shares redeemed at
their net asset values at the time of the redemption.

INVESTMENT ADVISER
Schroder Investment Management North America Inc.
875 Third Avenue
New York, New York 10022

ADMINISTRATOR
SEI Investments Global Funds Services
1 Freedom Valley Drive
Oaks, Pennsylvania 19456

CUSTODIAN
J.P. Morgan Chase Bank
270 Park Avenue
New York, New York 10017

DISTRIBUTOR
Schroder Fund Advisors Inc.
875 Third Avenue
New York, New York 10022

TRANSFER AND DIVIDEND DISBURSING AGENT
Boston Financial Data Services, Inc.
Two Heritage Drive
North Quincy, Massachusetts 02171

COUNSEL
Ropes & Gray LLP
One International Place
Boston, Massachusetts 02110

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PricewaterhouseCoopers LLP
Two Commerce Square
Suite 1700
2001 Market Street
Philadelphia, Pennsylvania 19103

--------------------------------------------------------------------------------

SCHRODER SERIES TRUST
SCHRODER ENHANCED INCOME FUND
SCHRODER U.S. CORE FIXED INCOME FUND

Schroder Enhanced Income Fund and Schroder U.S Core Fixed Income Fund have a
statement of additional information (SAI) which includes additional information
about the Funds. The SAI is incorporated by reference into this Prospectus,
which means it is part of this Prospectus for legal purposes. You may get free
copies of these materials, request other information about the Funds, or make
shareholder inquiries by calling (800) 464-3108. From outside the United
States, please call collect to (617) 483-5000 and ask to speak with a
representative of the Schroder Mutual Funds.

You may review and copy information about each Fund, including its SAI, at the
Securities and Exchange Commission's public reference room in Washington, D.C.
You may call the Commission at 1-800-SEC-0330 for information about the
operation of the public reference room. You may also access reports and other
information about each Fund on the Commission's Internet site at www.sec.gov.
You may get copies of this information, with payment of a duplication fee, by
electronic request to the following e-mail address: publicinfo@sec.gov or by
writing the Public Reference Section of the Commission, Washington, D.C.
20549-0102. You may need to refer to Schroder Series Trust's file number under
the Investment Company Act, which is 811-7840.

SCHRODER SERIES TRUST
875 Third Avenue
New York, New York 10022
(800) 464-3108

File No. 811-7840

Filed pursuant to Rule 497(c)
under the Securities Act of 1933, as amended.
Registration File No.: 33-65632

[SCHRODERS LOGO OMITTED]
--------------------------------------------------------------------------------
PROSPECTUS

December 31, 2004

SCHRODER ENHANCED INCOME FUND
SCHRODER U.S. CORE FIXED INCOME FUND
Advisor Shares

This Prospectus describes two fixed income mutual funds offered by Schroder
Series Trust (the "Trust").

SCHRODER ENHANCED INCOME FUND seeks high current income, consistent with
the preservation of capital and reasonable liquidity. As a secondary
objective, the Fund seeks a high rate of total return. The Fund invests in
U.S. Government and agency securities, mortgage-backed and asset-backed
securities, and other U.S. dollar-denominated investment grade
income-producing obligations. The Fund's dollar weighted average portfolio
duration will typically be from three to six months, although the adviser
may extend the Fund's dollar weighted average portfolio duration to as
long as 1.5 years.

SCHRODER SERIES TRUST

TABLE OF CONTENTS

PAGE
-----
SUMMARY INFORMATION ........................................ 3
Schroder Enhanced Income Fund ............................ 3
Schroder U.S. Core Fixed Income Fund ..................... 5
FEES AND EXPENSES .......................................... 8
PRINCIPAL RISKS OF INVESTING IN THE FUNDS .................. 9
NON-PRINCIPAL INVESTMENT STRATEGIES AND TECHNIQUES ......... 13
MANAGEMENT OF THE FUNDS .................................... 15
HOW THE FUNDS' SHARES ARE PRICED ........................... 17
HOW TO BUY SHARES .......................................... 17
HOW TO SELL SHARES ......................................... 20
ADDITIONAL INFORMATION ABOUT ADVISOR SHARES;
DISTRIBUTION PLANS ......................................... 21
EXCHANGES .................................................. 22
DIVIDENDS AND DISTRIBUTIONS ................................ 22
TAXES ...................................................... 23
USA PATRIOT ACT ............................................ 23

SUMMARY INFORMATION
This summary provides a brief description of the Funds' investment objectives,
principal investment strategies, and principal risks.

SCHRODER ENHANCED INCOME FUND

o INVESTMENT OBJECTIVES. Principally, to seek high current income, consistent
with the preservation of capital and reasonable liquidity; secondarily, to
seek a high rate of total return.

o PRINCIPAL INVESTMENT STRATEGIES. The Fund invests in a diversified
portfolio of U.S. dollar-denominated income-producing obligations.

The Fund will normally invest at least 80% of its net assets in
income-producing obligations, which may include, for example:

o securities issued or guaranteed by the U.S. Government or its agencies
or instrumentalities;

o debt securities of domestic or foreign corporations;

o mortgage-backed and other asset-backed securities;

o obligations of non-U.S. governments or their subdivisions, agencies,
and government-sponsored enterprises;

o obligations of international agencies or supranational entities;

o commercial paper and master demand notes;

o preferred securities; and

o short-term investments, such as repurchase agreements, money market
securities, bank certificates of deposit, fixed time deposits, and
bankers' acceptances.

The Fund's adviser currently expects that a substantial portion of the
Fund's assets will be invested in mortgage-backed and asset-backed
securities.

Foreign securities in which the Fund invests will be denominated in the
U.S. dollar.

The Fund is not a money market fund and is not subject to the portfolio
quality, maturity, and other requirements applicable to money market funds.

o The Fund will normally invest only in securities issued or guaranteed
by the U.S. Government or its agencies or instrumentalities and in
securities of "investment grade," which means either that a nationally
recognized statistical rating organization (for example, Moody's
Investor Service, Inc., Standard & Poor's Rating Service, or Fitch
Investors Service, Inc.) has rated the securities Baa3 or BBB- (or the
equivalent) or better, or the adviser has determined the securities to
be of comparable quality.

o The Fund will normally invest more than 50% of its total assets in
securities which a nationally recognized statistical rating
organization has rated Aaa or AAA (or the equivalent).

o The Fund will normally invest no more than 25% of its total assets in
securities that are rated below Aa3 (or the equivalent) by a
nationally recognized statistical rating organization.

o The Fund will normally invest no more than 10% of its total assets in
securities that are rated below A3 (or the equivalent) by a nationally
recognized statistical rating organization.

o The Fund expects not to invest in money market securities that have a
short-term rating lower than A2 (or the equivalent) by a nationally
recognized statistical rating organization.

o PRINCIPAL RISKS.

o It is possible to lose money on an investment in the Fund.

o Interest Rate Risk. Interest rate increases can cause the price of a
debt security to decrease. In addition, if a security is prepaid in a
period of falling interest rates, the Fund may have to reinvest the
proceeds in lower-yielding investments. Interest rate risk is
generally greater in the case of securities with longer durations and
in the case of portfolios of securities with longer average durations.

o Credit Risk. The ability, or perceived ability, of the issuer of a
debt security to make timely payments of interest and principal on the
security will affect the value of the security.

o Inflation/Deflation Risk. Inflation risk is the risk that the value of
the Fund's investments may decline as inflation reduces the value of
money. Deflation risk is the risk that prices throughout the economy
may decline over time, which may have an adverse effect on the
creditworthiness of issuers in whose securities the Fund invests.

o Mortgage- and Asset-Backed Securities Risk. Mortgage-backed and
asset-backed investments tend to increase in value less than other
debt securities when interest rates decline, but are subject to
similar risk of decline in market value during periods of rising
interest rates. The values of mortgage-backed and asset-backed
securities become more volatile as interest rates rise. In a period of
declining interest rates, the Fund may be required to reinvest
prepayments on mortgage-backed and asset-backed investments in
lower-yielding investments.

o U.S. Government Securities Risk. Securities issued or guaranteed by
certain agencies and instrumentalities of the U.S. Government are not
supported by the full faith and credit of the United States. For
example, mortgage-backed bonds issued by Fannie Mae or Freddie Mac are
backed only by the credit of those issuers.

o Foreign Investment Risk. Adverse political, regulatory, market, or
economic developments in foreign countries can affect issuers located
in those countries.

o Derivatives Risk. Derivative transactions typically involve leverage
and may be highly volatile. It is possible that a derivative
transaction will result in a loss greater than the principal amount
invested, and the Fund may not be able to close-out a derivative
transaction at a favorable time or price.

o Frequent Trading/Portfolio Turnover Risk. Frequent trading of the
Fund's portfolio securities will result in relatively high transaction
costs and may result in taxable capital gains. The Fund's adviser
currently expects that the portfolio turnover rate for the Fund's
current fiscal year will be approximately 400%.

SCHRODER U.S. CORE FIXED INCOME FUND

o INVESTMENT OBJECTIVE. To seek a high level of total return.

o PRINCIPAL INVESTMENT STRATEGIES. The Fund normally invests at least 80% of
its net assets in fixed income obligations of issuers located in the United
States, which may include, for example:

o securities issued or guaranteed by the U.S. Government or its agencies
or instrumentalities;

o debt securities of domestic or foreign corporations;

o mortgage-backed and other asset-backed securities;

o taxable and tax-exempt municipal bonds;

o obligations of international agencies or supranational entities;

o debt securities convertible into equity securities;

o inflation-indexed bonds;

o structured notes, including hybrid or "indexed" securities,
event-linked bonds, and loan participations;

o delayed funding loans and revolving credit facilities; and

o short-term investments, such as repurchase agreements, bank
certificates of deposit, fixed time deposits, and bankers'
acceptances.

The Fund's adviser currently expects that a substantial portion of the
Fund's assets will be invested in mortgage-backed and asset-backed
securities.

The Fund will normally invest only in securities issued or guaranteed by
the U.S. Government or its agencies or instrumentalities and in securities
of "investment grade" at the time of purchase, which means either that a
nationally recognized statistical rating organization (for example, Moody's
Investor Service, Inc., Standard & Poor's Rating Service, or Fitch
Investors Service, Inc.) has rated the securities Baa3 or BBB- (or the
equivalent) or better, or the adviser has determined the securities to be
of comparable quality. If more than one nationally recognized statistical
rating organization has rated a security, the adviser will consider the
highest rating for the purposes of determining whether the security is
"investment grade."

The Fund may enter into interest rate futures and options, interest rate
swap agreements and credit default swaps. (A derivative instrument will be
considered to be a fixed income security if it is itself a fixed income
security or, in the adviser's judgment, it may provide an investment return
comparable to the return that might be provided by a fixed income
security.) The Fund may use these "derivatives" for hedging purposes. The
Fund may also use derivatives to gain exposure to securities or market
sectors as a substitute for cash investments (not for leverage) or pending
the sale of securities by the Fund and reinvestment of the proceeds. For
example, the Fund may enter into a so-called credit default swap with
respect to one or more fixed income securities to take advantage of
increases or decreases in the values of those securities without actually
purchasing or selling the securities. The Fund may also seek to obtain
market exposure to the securities in which it may invest by entering into
forward contracts or similar arrangements to purchase those securities in
the future. Any use of derivatives strategies entails the risks of
investing directly in the securities or instruments underlying the
derivatives strategies, as well as the risks of using derivatives
generally, described in this Prospectus and in the Statement of Additional
Information.

In managing the Fund, the Fund's adviser generally relies on detailed
proprietary research. The adviser focuses on the sectors and securities it
believes are undervalued relative to the market.

The Fund's adviser will trade the Fund's portfolio securities actively. In
selecting individual securities for investment, the Fund's adviser
typically:

o uses in-depth fundamental research to identify sectors and securities
for investment by the Fund and to analyze risk;

o exploits inefficiencies in the valuation of risk and reward;

o looks to capitalize on rapidly shifting market risks and dynamics
caused by economic and technical factors; and

o considers the liquidity of securities and the portfolio overall as an
important factor in portfolio construction.

o PRINCIPAL RISKS.

o It is possible to lose money on an investment in the Fund.

investments. Interest rate risk is generally greater in the case of
securities with longer durations and in the case of portfolios of
securities with longer average durations.

o Credit Risk. The ability, or perceived ability, of the issuer of a
debt security to make timely payments of interest and principal on the
security will affect the value of the security.

o Inflation/Deflation Risk. Inflation risk is the risk that the value of
the Fund's investments may decline as inflation reduces the value of
money. Deflation risk is the risk that prices throughout the economy
may decline over time, which may have an adverse effect on the
creditworthiness of issuers in whose securities the Fund invests.

o Mortgage- and Asset-Backed Securities Risk. Mortgage-backed and
asset-backed investments tend to increase in value less than other
debt securities when interest rates decline, but are subject to
similar risk of decline in market value during periods of rising
interest rates. The values of mortgage-backed and asset-backed
securities become more volatile as interest rates rise. In a period of
declining interest rates, the Fund may be required to reinvest
prepayments on mortgage-backed and asset-backed investments in
lower-yielding investments.

o U.S. Government Securities Risk. Securities issued or guaranteed by
certain agencies and instrumentalities of the U.S. Government are not
supported by the full faith and credit of the United States. For
example, mortgage-backed bonds issued by Fannie Mae or Freddie Mac are
backed only by the credit of those issuers.

o Foreign Investment Risk. Adverse political, regulatory, market, or
economic developments in foreign countries can affect issuers located
in those countries. In addition, the values of investments in foreign
securities may be affected by changes in the values of the currencies
in which the securities are denominated.

o Derivatives Risk. Derivative transactions typically involve leverage
and may be highly volatile. It is possible that a derivative
transaction will result in a loss greater than the principal amount
invested, and the Fund may not be able to close-out a derivative
transaction at a favorable time or price.

o Frequent Trading/Portfolio Turnover Risk. Frequent trading of the
Fund's portfolio securities will result in relatively high transaction
costs and may result in taxable capital gains. The Fund's adviser
currently expects that the portfolio turnover rate for the Fund's
current fiscal year will be approximately 400%.

o Leverage Risk. Certain investments available to the Fund may involve
leverage. Leverage tends to make the Fund more volatile, because it
tends to exaggerate the effect of any increase or decrease in the
values of the Fund's portfolio securities.

o Liquidity Risk. The Fund may find it difficult to sell or to close out
certain investments at favorable prices or times.

FEES AND EXPENSES

THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD
ADVISOR SHARES OF THE FUNDS.

SHAREHOLDER FEES (paid directly from your investment):

ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from Fund assets):

SCHRODER ENHANCED SCHRODER U.S. CORE FIXED
INCOME FUND INCOME FUND
------------------- -------------------------

Management Fees ........................................ 0.25% 0.25%
Distribution (12b-1) Fees .............................. 0.25% 0.25%
Other Expenses(1) ...................................... 0.52% 0.57%
Total Annual Fund Operating Expenses ................... 1.02% 1.07%
Less: Fee Waiver and/or Expense Limitation(2) ......... (0.37)% (0.42)%
Net Expenses(2) ........................................ 0.65% 0.65%

(1) "Other Expenses" are based on estimated amounts for each Fund's current
fiscal year.

(2) The Net Expenses shown for each Fund reflect the effect of contractually
imposed fee waivers and/or expense limitations, in effect through
December 31, 2005, on the Total Annual Fund Operating Expenses of each
Fund. In order to limit the expenses of each Fund's Advisor Shares, the
Fund's adviser is contractually obligated to reduce its compensation and,
if necessary, to pay certain other Fund expenses until December 31, 2005
to the extent that the Total Annual Fund Operating Expenses of the Fund
allocable to its Advisor Shares exceed the annual rate of 0.65% of the
average daily net assets attributable to the Fund's Advisor Shares.

EXAMPLE

This Example is intended to help you compare the cost of investing in a Fund
with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in Advisor Shares of a Fund for the
time periods indicated and then redeem all of your Advisor Shares at the end of
those periods. The Example also assumes that your investment earns a 5% return
each year and that the Fund's operating expenses for each year are the same as
the Fund's Total Annual Fund Operating Expenses shown above (except that, in
the first year, the operating expenses are the same as the Fund's Net Expenses
shown above). Your actual costs may be higher or lower. Based on these
assumptions, your costs would be:

1 YEAR 3 YEARS
-------- --------
Schroder Enhanced Income Fund ................ $66 $288
Schroder U.S. Core Fixed Income Fund ......... $66 $299

PERFORMANCE INFORMATION

Each of the Funds has only been recently organized and as a result has no
historical investment performance. For performance information with respect to
other investment accounts managed by the Funds' adviser, see the Statement of
Additional Information.

PRINCIPAL RISKS OF INVESTING IN THE FUNDS

o Interest Rate Risk (Both Funds). The values of bonds and other debt
instruments usually rise and fall in response to changes in interest
rates. Declining interest rates generally increase the values of existing
debt instruments, and rising interest rates generally reduce the value of
existing debt instruments. Interest rate risk is generally greater for
investments with longer durations. Some investments give the issuer the
option to call or redeem an investment before its maturity date. If an
issuer calls or redeems an investment during a time of declining interest
rates, a Fund might have to reinvest the proceeds in an investment
offering a lower yield, and therefore might not benefit from any increase
in value as a result of declining interest rates.

o Credit Risk (Both Funds). The ability, or perceived ability, of the
issuer of a debt security to make timely payments of interest and
principal on the security will affect the value of the security. It is
possible that the ability of an issuer to meet its obligations will
decline substantially during the period when a Fund owns securities of
that issuer, or that the issuer will default on its obligations. An
actual or perceived deterioration in the ability of an issuer to meet its
obligations will likely have an adverse effect on the value of the
issuer's securities.

Each of the Funds invests in securities of "investment grade" at the
time of purchase, which means either that a nationally recognized
statistical rating organization (for example, Moody's Investor Service,
Inc., Standard & Poor's, or Fitch Investors Service, Inc.) has rated the
securities Baa3 or BBB- (or the equivalent) or better, or the Funds'
investment adviser has determined the securities to be of comparable
quality. If a security has been rated by more than one nationally
recognized statistical rating organization the Funds' adviser will
consider the highest rating for the purposes of determining whether the
security is "investment grade." A Fund will not necessarily dispose of a
security held by it if its rating falls below investment grade, although
the Funds' adviser will consider whether the security continues to be an
appropriate investment for the Fund. Each Fund considers whether a
security is "investment grade" only at the time of purchase.

Credit risk is generally greater for investments issued at less than
their face values and required to make interest payments only at
maturity rather than at intervals during the life of the investment.
Credit rating agencies base their ratings largely on the issuer's
historical financial condition and the rating agencies' investment
analysis at the time of rating. The rating assigned to any particular
investment does not necessarily reflect the issuer's current financial
condition, and does not reflect an assessment of an investment's
volatility or liquidity. Although investment grade investments generally
have lower credit risk than investments rated below investment grade,
they may share some of the risks of lower-rated investments, including
the possibility that the issuers may be unable to make timely payments
of interest and principal and thus default.

o Inflation/Deflation Risk (Both Funds). Inflation risk is the risk that a
Fund's assets or income from a Fund's investments may be worth less in
the future as inflation decreases the value of money. As inflation
increases, the real value of a Fund's portfolio could decline. Deflation
risk is the risk that prices throughout the economy may decline over time
-- the opposite of inflation. Deflation may have an adverse effect on the
creditworthiness of issuers and may make issuer default more likely,
which may result in a decline in the value of a Fund's portfolio.

refinancing or foreclosure. A Fund may have to invest the proceeds from
prepaid investments in other investments with less attractive terms and
yields. As a result, these securities may have less potential for
capital appreciation during periods of declining interest rates than
other securities of comparable maturities, although they may have a
similar risk of decline in market value during periods of rising
interest rates. Because the prepayment rate generally declines as
interest rates rise, an increase in interest rates will likely increase
the duration, and thus the volatility, of mortgage-backed and
asset-backed securities. Some mortgage-backed and asset-backed
investments receive only the interest portion ("IOs") or the principal
portion ("POs") of payments on the underlying assets. The yields and
values of these investments are extremely sensitive to changes in
interest rates and in the rate of principal payments on the underlying
assets. IOs tend to decrease in value if interest rates decline and
rates of repayment (including prepayment) on the underlying mortgages or
assets increase; it is possible that a Fund may lose the entire amount
of its investment in an IO due to a decrease in interest rates.
Conversely, POs tend to decrease in value if interest rates rise and
rates of repayment decrease. Moreover, the market for IOs and POs may be
volatile and limited, which may make them difficult for a Fund to buy or
sell. A Fund may gain investment exposure to mortgage-backed and
asset-backed investments by entering into agreements with financial
institutions to buy the investments at a fixed price at a future date. A
Fund may or may not take delivery of the investments at the termination
date of such an agreement, but will nonetheless be exposed to changes in
value of the underlying investments during the term of the agreement.

o Foreign Investment Risk (Both Funds). Investments in foreign securities
entail certain risks. There may be a possibility of nationalization or
expropriation of assets, confiscatory taxation, political or financial
instability, and diplomatic developments that could affect the value of a
Fund's investments in certain foreign countries. Since foreign securities
in which Schroder U.S. Core Fixed Income Fund invests may be denominated
and traded in foreign currencies, the value of that Fund's assets may be
affected favorably or unfavorably by currency exchange rates, currency
exchange control regulations, foreign withholding taxes, and restrictions
or prohibitions on the repatriation of foreign currencies, although the
Funds' adviser will typically (though not necessarily) attempt to limit
any foreign currency exposure by entering into foreign currency exchange
contracts or other hedging transactions. (Schroder Enhanced Income Fund
will only invest in securities denominated in U.S. dollars.) In addition,
there may be less information publicly available about a foreign issuer
than about a U.S. issuer, and foreign issuers are not generally subject
to accounting, auditing, and financial reporting standards and practices
comparable to those in the United States. The securities of some foreign
issuers are less liquid and at times more volatile than securities of
comparable U.S. issuers. Foreign brokerage commissions and other fees are
also generally higher than in the United States. Foreign settlement
procedures and trade regulations may involve certain risks (such as delay
in payment or delivery of securities or in the recovery of the Funds'
assets held abroad) and expenses not present in the settlement of
domestic investments.

In addition, legal remedies available to investors in certain foreign
countries may be more limited than those available to investors in the
United States or in other foreign countries. The willingness and ability
of foreign governmental entities to pay principal and interest on
government securities depends on various economic factors, including the
issuer's balance of payments, overall debt level, and cash-flow
considerations related to the availability of tax or other revenues to
satisfy the issuer's obligations. If a foreign governmental entity
defaults on its obligations on the securities, the Funds may have
limited recourse available to them. The laws of some foreign countries
may limit the Funds' ability to invest in securities of certain issuers
located in those countries.

withholding and other taxes imposed by such countries. Tax conventions
between certain countries and the United States may reduce or eliminate
such taxes. Any such taxes paid by a Fund will reduce its income
available for distribution to shareholders. In certain circumstances, a
Fund may be able to pass through to shareholders credits for foreign
taxes paid. Certain of these risks may also apply to some extent to
investments in U.S. companies that are traded in foreign markets, or
investments in U.S. companies that have significant foreign operations.

o U.S. Government Securities Risk (Both Funds). U.S. Government
securities include a variety of securities that differ in their interest
rates, maturities, and dates of issue. While securities issued or
guaranteed by some agencies or instrumentalities of the U.S. Government
(such as the Government National Mortgage Association) are supported by
the full faith and credit of the United States, securities issued or
guaranteed by certain other agencies or instrumentalities of the U.S.
Government (such as Federal Home Loan Banks) are supported by the right
of the issuer to borrow from the U.S. Government, and securities issued
or guaranteed by certain other agencies and instrumentalities of the
U.S. Government (such as Fannie Mae, Freddie Mac and the Student Loan
Marketing Association) are supported only by the credit of the issuer
itself.

o Derivatives Risk (Both Funds). Derivatives are financial contracts
whose value depends on, or derives from, the value of an underlying
asset, reference rate, or index. Each Fund typically uses derivatives as
a substitute for taking a position in the underlying asset and/or as
part of a strategy designed to reduce exposure to other risks, such as
interest rate or currency risk. A Fund's use of derivative instruments
involves risks different from, and possibly greater than, the risks
associated with investing directly in securities and other traditional
investments. Derivatives are subject to a number of risks described
elsewhere in this section, such as liquidity risk, interest rate risk,
and credit risk, and the risk that a derivative transaction may not have
the effect the Funds' investment adviser anticipated. Derivatives also
involve the risk of mispricing or improper valuation and the risk that
changes in the value of the derivative may not correlate perfectly with
the underlying asset, rate, or index. Derivative transactions typically
involve leverage and may be highly volatile. Use of derivatives other
than for hedging purposes may be considered speculative, and when a Fund
invests in a derivative instrument it could lose more than the principal
amount invested. Also, suitable derivative transactions may not be
available in all circumstances and there can be no assurance that a Fund
will engage in these transactions to reduce exposure to other risks when
that would be beneficial. Many derivative transactions are entered into
"over the counter" (not on an exchange or contract market); as a result,
the value of such a derivative transaction will depend on the ability
and willingness of a Fund's counterparty to perform its obligations
under the transaction.

o Frequent Trading/Portfolio Turnover Risk (Both Funds). The length of time
a Fund has held a particular security is not generally a consideration in
investment decisions. The investment policies of the Funds may lead to
frequent changes in a Fund's investments, particularly in periods of
volatile market movements, in order to take advantage of what the Funds'
investment adviser believes to be temporary disparities in normal yield
relationships between securities. A change in the securities held by a
Fund is known as "portfolio turnover." Portfolio turnover generally
involves some expense to a Fund, including bid-asked spreads, dealer
mark-ups, and other transaction costs on the sale of securities and
reinvestment in other securities, and may result in the realization of
taxable capital gains (including short-term gains, which are generally
taxed to shareholders at ordinary income rates). The trading costs and
tax effects associated with portfolio turnover may adversely affect a
Fund's performance. During periods when a Fund experiences high portfolio
turnover rates, these effects are likely to be more pronounced. Consult
your tax advisor regarding the impact of a Fund's portfolio turnover rate
on your investments.

o Leveraging Risk (Schroder U.S. Core Fixed Income Fund). Certain
transactions by Schroder U.S. Core Fixed Income Fund may give rise to a
form of leverage. Such transactions may include, among others, loans of
portfolio securities, and the use of when-issued, delayed delivery, or
forward commitment transactions. The use of derivatives may also create
leveraging risk. Leverage, including borrowing money, may cause Schroder
U.S. Core Fixed Income Fund to be more volatile than if the Fund had not
been leveraged. This is because leverage tends to exaggerate the effect
of any increase or decrease in the value of Schroder U.S. Core Fixed
Income Fund's portfolio securities.

o Liquidity Risk (Schroder U.S. Core Fixed Income Fund). Liquidity risk
exists when particular investments are difficult to purchase or sell.
Schroder U.S. Core Fixed Income Fund's investments in illiquid securities
may reduce the returns of the Fund because it may be unable to sell the
illiquid securities at an advantageous time or price. Investments in
foreign securities, derivatives, or securities with substantial market
and/or credit risk tend to have the greatest exposure to liquidity risk.

[Remainder of page intentionally left blank.]

NON-PRINCIPAL INVESTMENT STRATEGIES AND TECHNIQUES

o When-issued and delayed delivery securities. A Fund may purchase
securities on a when-issued, delayed delivery, or forward commitment
basis. These transactions involve a commitment by a Fund to purchase a
security for a predetermined price or yield, with payments and delivery
taking place more than seven days in the future, or after a period longer
than the customary settlement period for that type of security. These
transactions may increase the overall investment exposure for the Fund
and involve a risk of loss if the value of the securities declines prior
to the settlement date.

o Temporary defensive strategies. At times, the Funds' investment adviser
may judge that conditions in the securities markets make pursuing a
Fund's basic investment strategy inconsistent with the best interests of
its shareholders. At such times, the adviser may, but is not required to,
temporarily use alternate investment strategies primarily designed to
reduce fluctuations in the value of the Fund's assets. In implementing
these "defensive" strategies, the adviser would invest in investment
grade fixed income securities, cash, or money market instruments the
adviser considers consistent with such defensive strategies. It is
impossible to predict when, or for how long, a Fund would use these
alternate strategies. One risk of taking such temporary defensive
positions is that the Fund may not achieve its investment objectives.

o Pricing. At times market conditions might make it hard to value some
investments. If a Fund has valued securities it holds too high, you may
end up paying too much for the Fund's shares when you buy into a Fund. If
a Fund underestimates the price of its portfolio securities, you may not
receive the full market value for your Fund shares when you sell. To the
extent a Fund relies on a pricing service to value some or all of its
portfolio securities, it is possible that the pricing information
provided by the service will not reflect the actual price the Fund would
receive upon a sale of the security.

o Changes in investment objectives and policies. The investment policy of
Schroder U.S. Core Fixed Income Fund requiring it to invest at least 80%
of its net assets in fixed income obligations of issuers located in the
United States may be changed by the Trustees without shareholder approval
after providing shareholders of the Fund 60 days' prior written notice.
Similarly, the investment policy of Schroder Enhanced Income Fund
requiring it to invest at least 80% of its net assets in income-producing
obligations may be changed by the Trustees without shareholder approval
after providing shareholders of the Fund 60 days' prior written notice.
The Trustees may change the investment objectives and other policies of
each Fund without a vote of the shareholders.

o Percentage investment limitations. Unless otherwise noted, all percentage
limitations on Fund investments listed in this Prospectus will apply at
the time of investment. A Fund will not consider an investment to violate
these limitations unless an excess or deficiency were to occur or exist
immediately after and as a result of an investment. References in any of
the discussions of a Fund's investment policies to 80% of a Fund's net
assets refer to that percentage of the aggregate of the Fund's net assets
and the amount, if any, of borrowings by the Fund for investment
purposes.

[Remainder of page intentionally left blank.]

MANAGEMENT OF THE FUNDS

o INVESTMENT ADVISORY FEES. The Schroder Enhanced Income Fund and the
Schroder U.S. Core Fixed Income Fund each pay an investment advisory fee
to Schroders at the annual rate of 0.25% of the Fund's average daily net
assets.

o EXPENSE LIMITATIONS AND WAIVERS. In order to limit the expenses of the
Funds' Advisor Shares, Schroders is contractually obligated to reduce its
compensation and, if necessary, to pay certain other Fund expenses until
December 31, 2005 to the extent that the Total Annual Fund Operating
Expenses of each Fund allocable to its Advisor Shares exceed the annual
rate of 0.65% of the average daily net assets attributable to such Fund's
Advisor Shares. Only the Board of Trustees of the Trust may terminate
this contractual obligation prior to December 31, 2005.

o PORTFOLIO MANAGEMENT. The following portfolio managers at Schroders have
primary responsibility for making investment decisions for each of the
Funds since the years shown below. As of September 30, 2004, the
portfolio management team was responsible for managing approximately $2.3
billion in assets utilizing an investment strategy similar to the
strategy used in managing the Schroder Enhanced Income Fund, and
approximately $663 million in assets utilizing an investment strategy
similar to that used in managing the Schroder U.S. Core Fixed Income
Fund. The portfolio managers' recent professional experience is also
shown.

PORTFOLIO MANAGER SINCE RECENT PROFESSIONAL EXPERIENCE
------------------- ----------------------------------- --------------------------------------

Steven Lear Schroder Enhanced Income Fund -- Lead portfolio manager for each of
Inception (December 2004) the Funds. Mr. Lear is a Director and
Schroder U.S. Core Fixed Income Executive Vice President of Schroders
Fund -- Inception (December 2004) and has been an employee of
Schroders since June 1998.

David Harris Schroder Enhanced Income Fund -- Portfolio manager for each of the
Inception (December 2004) Funds. Mr. Harris is a Senior Vice
Schroder U.S. Core Fixed Income President of Schroders and has been
Fund -- Inception (December 2004) an employee of Schroders since
November 1992.

Wesley A. Sparks Schroder Enhanced Income Fund -- Portfolio manager for each of the
Inception (December 2004) Funds. Mr. Sparks has been at
Schroder U.S. Core Fixed Income Schroders since December 2000 and
Fund -- Inception (December 2004) is currently First Vice President of
Schroders. Prior to joining Schroders
Mr. Sparks was a portfolio manager
at Aeltus Investment Management
since June 1999.

PORTFOLIO MANAGER SINCE RECENT PROFESSIONAL EXPERIENCE
------------------- ----------------------------------- ---------------------------------------

Gregg Moore Schroder Enhanced Income Fund -- Portfolio manager for each of the
Inception (December 2004) Funds. Mr. Moore has been at
Schroder U.S. Core Fixed Income Schroders since June 2001 and is
Fund -- Inception (December 2004) currently Vice President of Schroders.
Prior to joining Schroders Mr. Moore
was a quantitative analyst at Aeltus
Investment Management since
December 1999.

Matt Murphy Schroder Enhanced Income Fund -- Portfolio manager for each of the
Inception (December 2004) Funds. Mr. Murphy has been at
Schroder U.S. Core Fixed Income Schroders since July 2004 and is
Fund -- Inception (December 2004) currently a Vice President of
Schroders. Prior to joining Schroders
Mr. Murphy was a Managing
Director at MONY Capital
Management from February 2002 to
July 2004 and was previously a
Director at FitchRatings since
August 1996.

[Remainder of page intentionally left blank.]

HOW THE FUNDS' SHARES ARE PRICED

Each Fund calculates the net asset value of its Advisor Shares by dividing the
total value of its assets attributable to its Advisor Shares, less its
liabilities attributable to those shares, by the number of Advisor Shares
outstanding. Each Fund values its Advisor Shares as of the close of trading on
the New York Stock Exchange (normally 4:00 p.m., Eastern Time) each day the
Exchange is open. The Trust expects that days, other than weekend days, when
the Exchange will not be open are New Year's Day, Martin Luther King, Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, and Christmas Day. Each Fund values its portfolio securities
for which market quotations are readily available at market value. Investments
and assets for which market values are not readily available are valued by
Schroders at their fair values pursuant to guidelines established by the Board
of Trustees, generally by reference to other securities or indexes. For
instance, a pricing service may recommend a fair value based generally on
prices of comparable securities (or, when such prices are not available -- for
example, on a day when the bond markets are closed -- based on other factors
that may be indicative of the securities' values). Short-term investments that
will mature within 60 days are valued by Schroders using amortized cost, a form
of fair valuation, pursuant to procedures adopted by the Board of Trustees. The
net asset value of each Fund's Advisor Shares may differ from that of its
Investor Shares due to differences in the expenses of Advisor Shares and
Investor Shares.

HOW TO BUY SHARES

You may purchase Advisor Shares of a Fund directly from the Trust (through
Schroder Fund Advisors Inc., the distributor of the Trust's shares), or through
a service organization such as a bank, trust company, broker-dealer, or other
financial organization (a "Service Organization") having an arrangement with
Schroder Fund Advisors Inc. If you do not have a Service Organization, Schroder
Fund Advisors Inc. can provide you with a list of available firms. Your Service
Organization is responsible for forwarding all of the necessary documentation
to the Trust, and may charge you separately for its services.

The purchase, redemption and exchange policies and fees charged by such Service
Organizations may be different than those of the Funds. For instance, banks,
brokers, retirement plans and financial advisers may charge transaction fees in
addition to any fees charged by a Fund, and may set different investment
minimums or limitations on buying, exchanging, or redeeming Advisor Shares.
Please consult a representative of your Service Organization for further
information.

If the Advisor Shares you purchase will be held in your own name (rather than
the name of your Service Organization), your payment for the shares must be
accompanied by a completed Account Application and payment by check or wire as
described below. Account Applications for Advisor Shares may be obtained from
the Funds' transfer agent, Boston Financial Data Services, Inc. ("BFDS"), at
the address provided below under "Purchases by Check," from your Service
Organization, or by calling the Schroder Mutual Funds at (800) 464-3108 (from
outside the United States, please call collect to (617) 483-5000 and ask to
speak with a Schroder Mutual Funds representative). Acceptance of your order
may be delayed pending receipt of additional documentation, such as copies of
corporate resolutions and instruments of authority, from corporations,
administrators, executors, personal representatives, directors, or custodians.

Each Fund sells its Advisor Shares at their net asset value next determined
after the Fund or BFDS receives your request in good order (meaning that the
request meets the requirements set out below and in the Account Application,
and otherwise meets the requirements implemented from time to time by the
Fund's transfer agent or by the Fund). In order for you to receive a Fund's
next determined net asset value, the Fund or BFDS must receive your order
before the close of trading on the New York Stock Exchange (normally 4:00 p.m.,
Eastern Time). The Trust reserves the right to reject any order to purchase
Advisor Shares of a Fund.

Certain brokers or financial institutions may accept purchase and redemption
orders for Advisor Shares on behalf of the Funds. Such brokers or financial
institutions may designate other intermediaries to accept purchase and
redemption orders on behalf of the Funds. For purposes of pricing, each Fund
may be deemed to have received a purchase or redemption order when an
authorized broker or financial institution or, if applicable, a broker or
financial institution's authorized designee, receives the order. Agreements
between such brokers or financial institutions and Schroder Fund Advisors Inc.,
the Trust's distributor, provide that these orders would be priced at the
Fund's net asset value next determined after they are received by the broker or
financial institution or authorized designee.

The minimum investments for initial and additional purchases of Advisor Shares
of the Funds are as follows:

INITIAL ADDITIONAL
INVESTMENT INVESTMENTS
------------ ------------
Regular Accounts 10,000 1,000
Traditional and Roth IRAs
o Investments in respect of calendar year 2004 3,000 250

o Investments in respect of calendar year 2005 4,000 250

The Trust may, in its sole discretion, waive these minimum initial or
subsequent investment amounts for share purchases by: an employee of Schroders,
any of its affiliates or a financial intermediary authorized to sell shares of
the Funds, or such employee's spouse or life partner, or children or
step-children age 21 or younger; investment advisory clients of Schroders; and
current or former Trustees. For share purchases made through certain fund
networks or other financial intermediaries, the investment minimums associated
with the policies and programs of the fund network or financial intermediary
will apply.

The Funds do not issue share certificates.

The Trust may suspend the offering of Advisor Shares of the Funds for any
period of time. Excessive trading can hurt Fund performance, operations, and
shareholders. The Trust may reject an order to purchase shares of a Fund
(including by way of exchange) if the Trust or Schroders believes that the
investor in question is engaged in "market timing" or similar activities that
may be harmful to a Fund or its shareholders. The Trust may change any
investment minimum from time to time.

PURCHASES BY CHECK

You may purchase Advisor Shares of a Fund by mailing a check (in U.S. dollars)
payable to the Fund in which you wish to invest. If you wish to purchase
Advisor Shares of two or more Funds, make your check payable to Schroder Mutual
Funds and include written instructions as to how the amount of your check
should be allocated among the Funds whose shares you are purchasing. Schroder
Mutual Funds will not accept third-party checks. You should direct your check
and your completed Account Application as follows:

REGULAR MAIL OVERNIGHT OR EXPRESS MAIL
------------ -------------------------
Schroder Mutual Funds Boston Financial Data Services, Inc.
P.O. Box 8507 Attn: Schroder Mutual Funds
Boston, MA 02266 66 Brooks Drive
Braintree, MA 02184

For initial purchases, a completed Account Application must accompany your
check.

PURCHASES BY BANK WIRE

If you make your initial investment by wire, a completed Account Application
must precede your order. Upon receipt of the Application, BFDS will assign you
an account number. BFDS will process wire orders received prior to the close of
trading on the New York Stock Exchange (normally 4:00 p.m., Eastern Time) on
each day the Exchange is open for trading at the net asset value next
determined as of the end of that day. BFDS will process wire orders received
after that time at the net asset value next determined thereafter.

Once you have an account number, you may purchase Advisor Shares through your
Service Organization or directly from the Funds by calling BFDS at (800)
464-3108 to give notice that you will send funds by wire, and obtain a wire
reference number. (From outside the United States, please call collect to (617)
483-5000 and ask to speak with a Schroder Mutual Funds representative.) Please
be sure to obtain a wire reference number. Instruct your bank to wire funds
with the assigned reference number as follows:

BFDS will not process your purchase until it receives the wired funds.

AUTOMATIC PURCHASES

If you purchase Advisor Shares directly from the Trust and the shares are held
in your own name, you can make regular investments of $100 or more per month or
quarter in Advisor Shares of your Fund through automatic deductions from your
bank account. Please complete the appropriate section of the Account
Application if you would like to utilize this option. For more information,
please call (800) 464-3108. If you purchase Advisor Shares through a Service
Organization, your firm may also provide automatic purchase options. Please
contact your Service Organization for details.

PURCHASES IN-KIND

Investors may purchase Advisor Shares of a Fund for cash or in exchange for
securities, subject to the determination by Schroders in its discretion that
the securities are acceptable. (For purposes of determining whether securities
will be acceptable, Schroders will consider, among other things, whether they
are liquid securities of a type consistent with the investment objectives and
policies of the Fund and have a readily ascertainable value.) If a Fund
receives securities from an investor in exchange for Advisor Shares of the
Fund, the Fund will under some circumstances have the same tax basis in the
securities as the investor had prior to the exchange (and the Fund's gain for
tax purposes would be calculated with regard to the investor's tax basis), and
in such cases the Fund's holding period in those securities would include the
investor's holding period. Any gain on the sale of securities received in
exchange for Advisor Shares of a Fund would be subject to distribution as
capital gain to all of the Fund's shareholders. (In some circumstances, receipt
of securities from an investor in exchange for Advisor Shares of a Fund may be
a taxable transaction to the investor, in which case the Fund's tax basis in
the securities would reflect the fair market value of the securities on the
date of the exchange, and its holding period in the securities would begin on
that date.) Each Fund values securities accepted by Schroders in the same
manner as are the Fund's portfolio securities as of the time of the next
determination of the Fund's net asset value. Although each Fund seeks to
determine the fair value of securities contributed to the Fund, any valuation
that does not reflect fair value may dilute the interests of the purchasing
shareholder or the other shareholders of the Fund. All rights reflected in the
market price of

accepted securities at the time of valuation become the property of the Fund
and must be delivered to the Fund upon receipt by the investor. Investors may
realize a taxable gain or loss upon the exchange. Investors interested in
purchases through exchange should telephone Schroders at (800) 464-3108, their
Schroders client representative, or other financial intermediary.

CERTAIN PAYMENTS BY SCHRODERS OR ITS AFFILIATES

HOW TO SELL SHARES

WHEN YOU MAY REDEEM

You may sell your Advisor Shares back to a Fund on any day the New York Stock
Exchange is open, either through your Service Organization or directly to the
Fund. If your shares are held in the name of a Service Organization, you may
only sell the shares through that Service Organization. The Service
Organization may charge you a fee for its services. If you choose to sell your
shares directly to the Fund, you may do so by sending a letter of instruction
or stock power form to Schroder Mutual Funds, or by calling BFDS at (800)
464-3108. The price you will receive is the net asset value next determined
after receipt of your redemption request in good order. A redemption request is
in good order if it includes the exact name in which the shares are registered,
the investor's account number, and the number of shares or the dollar amount of
shares to be redeemed, and, for written requests, if it is signed in accordance
with the account registration. A bank, broker-dealer, or certain other
financial institutions must guarantee any signature in the form of the Stamp
2000 Medallion Guarantee. You may redeem your shares by telephone only if you
elected the telephone redemption privilege option on your Account Application
or otherwise in writing. Unless otherwise agreed, you may only exercise the
telephone redemption privilege to redeem shares worth not more than $50,000.
The Trust may require additional documentation from shareholders that are
corporations, partnerships, agents, fiduciaries, surviving joint owners, those
acting through powers of attorney, or similar delegation.

If you redeem shares through your Service Organization, your Service
Organization is responsible for ensuring that the Transfer Agent receives your
redemption request in proper form and at the appropriate time. If your Service
Organization receives Federal Reserve wires, you may instruct that your
redemption proceeds be forwarded by wire to your account with your Service
Organization; you may also instruct that your redemption proceeds be forwarded
to you by a wire transfer. Please indicate your Service Organization's or your
own complete wiring instructions. Your Service Organization may charge you
separately for this service.

The Trust will pay you for your redemptions as promptly as possible and in any
event within seven days after the request for redemption is received in good
order. The Trust generally sends payment for shares on the business day after a
request is received. In case of emergencies, the Trust may suspend redemptions
or postpone payment for more than seven days, as permitted by law. If you paid
for your Advisor Shares by check, the Trust will not send you your redemption
proceeds until the check you used to pay for the shares has cleared, which may
take up to 15 calendar days from the purchase date.

INVOLUNTARY REDEMPTIONS

If, because of your redemptions, your account balance for a Fund falls below a
minimum amount set by the Trustees (presently $2,000), the Trust may choose to
redeem your Advisor Shares in that Fund and pay you for them. You will receive
at least 30 days written notice before the Trust redeems your Advisor Shares,
and you may purchase additional Advisor Shares at any time to avoid a
redemption. The Trust may also redeem Advisor Shares if you own shares of a
Fund above a maximum amount set by the Trustees. There is currently no maximum,
but the Trustees may establish one at any time, which could apply to both
present and future shareholders.

SUSPENSION

REDEMPTIONS IN KIND

The Trust has agreed to redeem Advisor Shares of each Fund solely in cash up to
the lesser of $250,000 or 1% of the Fund's net assets attributable to Advisor
Shares during any 90-day period for any one shareholder. In consideration of
the best interests of the remaining shareholders of a Fund, the Trust may pay
any redemption proceeds exceeding this amount in whole or in part by a
distribution in kind of securities held by a Fund in lieu of cash. The Trust
does not expect to redeem Advisor Shares in kind under normal circumstances. If
the Trust redeems your Advisor Shares in kind, you should expect to incur
brokerage expenses and other transaction costs upon the disposition of the
securities you receive from the Fund. In addition, the price of those
securities may change between the time when you receive the securities and the
time when you are able to dispose of them.

GENERAL

ADDITIONAL INFORMATION ABOUT ADVISOR SHARES; DISTRIBUTION PLANS

The Trust sells Advisor Shares of each Fund at their net asset value without
any sales charges or loads, so that the full amount of your purchase payment is
invested in the Fund. You also receive the full value of your Advisor Shares
when you sell them back to a Fund, without any deferred sales charge.

Distribution plans. Each Fund has adopted a Distribution Plan pursuant to Rule
12b-1 under the Investment Company Act of 1940, as amended, that allows the
Fund to pay distribution and other fees with respect to its Advisor Shares.
Under the Plan, the Fund may make payments at an annual rate of up to 0.25%

of the average daily net assets attributable to its Advisor Shares to
compensate the distributor for distribution services and certain shareholder
services with respect to the Fund's Advisor Shares.

Because the fees are paid out of each Fund's assets on a ongoing basis, over
time these fees will increase the cost of an investment in Advisor Shares of
the Fund and may cost you more than paying other types of sales charges.

In addition, each Fund may pay Schroders or its affiliates, banks,
broker-dealers, financial advisors, or other financial institutions fees for
sub-administration, sub-transfer agency, and other shareholder services
associated with shareholders whose shares are held of record in omnibus or
other group accounts. In addition, each Fund's service providers, including
Schroders, or any of their affiliates, may, from time to time, make these types
of payment or payments for other shareholder services or distribution, out of
their own resources and without additional cost to the Fund or its
shareholders.

EXCHANGES

You can exchange your Advisor Shares of a Fund for Advisor Shares of most other
funds in the Schroder family of funds at any time at their respective net asset
values. The Trust would treat the exchange as a sale of your Advisor Shares,
and any gain on the exchange will generally be subject to tax. For a listing of
the Schroder funds available for exchange and to exchange Advisor Shares,
please contact your Service Organization or call the Trust directly at (800)
464-3108. (From outside the United States, please call collect to (617)
483-5000 and ask to speak with a representative of the Schroder Mutual Funds.)
In order to exchange shares by telephone, you must complete the appropriate
section of the Account Application. The Trust and Schroders reserve the right
to change or suspend the exchange privilege at any time. Schroders would notify
shareholders of any such change or suspension. The Trust or Schroders may limit
the amount or number of exchanges or reject any exchange if the Trust or
Schroders believes that the investor in question is engaged in "market timing"
activities or similar activities that may be harmful to a Fund or its
shareholders. See "How to Buy Shares," above for additional information.

DIVIDENDS AND DISTRIBUTIONS

Shares begin to earn dividends on the first business day following the day of
purchase. Shares earn dividends through the date of redemption.

YOU CAN CHOOSE FROM FOUR DISTRIBUTION OPTIONS:

o Reinvest all distributions in additional Advisor Shares of your Fund;

o Receive distributions from net investment income in cash while
reinvesting capital gains distributions in additional Advisor Shares of
your Fund;

o Receive distributions from net investment income in additional Advisor
Shares of your Fund while receiving capital gain distributions in cash;
or

o Receive all distributions in cash.

You can change your distribution option by notifying the Transfer Agent in
writing. If you do not select an option when you open your account, a Fund will
reinvest all distributions in Advisor Shares of that Fund. You will receive a
statement confirming reinvestment of distributions in additional Fund shares
promptly following the period in which the reinvestment occurs.

TAXES

USA PATRIOT ACT

INVESTMENT ADVISER
Schroder Investment Management North America Inc.
875 Third Avenue
New York, New York 10022

ADMINISTRATOR
SEI Investments Global Funds Services
1 Freedom Valley Drive
Oaks, Pennsylvania 19456

CUSTODIAN
J.P. Morgan Chase Bank
270 Park Avenue
New York, New York 10017

DISTRIBUTOR
Schroder Fund Advisors Inc.
875 Third Avenue
New York, New York 10022

TRANSFER AND DIVIDEND DISBURSING AGENT
Boston Financial Data Services, Inc.
Two Heritage Drive
North Quincy, Massachusetts 02171

COUNSEL
Ropes & Gray LLP
One International Place
Boston, Massachusetts 02110

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PricewaterhouseCoopers LLP
Two Commerce Square
Suite 1700
2001 Market Street
Philadelphia, Pennsylvania 19103

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

SCHRODER SERIES TRUST
SCHRODER ENHANCED INCOME FUND
SCHRODER U.S. CORE FIXED INCOME FUND

SCHRODER SERIES TRUST
875 Third Avenue
New York, New York 10022
(800) 464-3108

File No. 811-7840

Filed pursuant to Rule 497(c)
under the Securities Act of 1933, as amended.
Registration File No.: 33-65632

SCHRODER SERIES TRUST

Schroder Enhanced Income Fund
Schroder U.S. Core Fixed Income Fund

FORM N-1A
PART B

STATEMENT OF ADDITIONAL INFORMATION

December 31, 2004

This Statement of Additional Information ("SAI") is not a prospectus and is only
authorized for distribution when accompanied or preceded by a Prospectus for
Schroder Enhanced Income Fund and Schroder U.S. Core Fixed Income Fund
(collectively, the "Funds"), as amended or supplemented from time to time. This
SAI relates to the Funds' Investor Shares and Advisor Shares. Investor Shares
and Advisor Shares of the Funds are offered through separate Prospectuses, each
dated December 31, 2004 (each, a "Prospectus," and together, the
"Prospectuses"). This SAI contains information which may be useful to investors
but which is not included in the Prospectuses, as amended or supplemented from
time to time. Investors may obtain free copies of the Prospectuses by calling
the Funds at (800) 464-3108. From outside the United States, please call collect
to (617) 483-5000 and ask to speak with a Schroder Mutual Funds representative.
The Funds are series of Schroder Series Trust.

TABLE OF CONTENTS

TRUST HISTORY............................................................B-1
FUND CLASSIFICATION......................................................B-1
CAPITALIZATION AND SHARE CLASSES.........................................B-1
ADDITIONAL INFORMATION CONCERNING THE FUNDS' PRINCIPAL
INVESTMENT STRATEGIES...............................................B-2
NON-PRINCIPAL INVESTMENTS, INVESTMENT PRACTICES AND RISKS...............B-18
INVESTMENT RESTRICTIONS.................................................B-20
MANAGEMENT OF THE TRUST.................................................B-22
SCHRODERS AND ITS AFFILIATES............................................B-29
PERFORMANCE INFORMATION OF CERTAIN OTHER ACCOUNTS MANAGED
BY SCHRODERS.......................................................B-29
MANAGEMENT CONTRACT.....................................................B-32
ADMINISTRATIVE SERVICES.................................................B-34
DISTRIBUTOR.............................................................B-34
BROKERAGE ALLOCATION AND OTHER PRACTICES................................B-35
DETERMINATION OF NET ASSET VALUE........................................B-35
TAXES...................................................................B-36
PRINCIPAL HOLDERS OF SECURITIES.........................................B-39
CUSTODIAN...............................................................B-39
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT............................B-39
INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS...............................B-39
CODE OF ETHICS..........................................................B-39
PROXY VOTING POLICIES AND PROCEDURES....................................B-39
LEGAL COUNSEL...........................................................B-40
SHAREHOLDER LIABILITY...................................................B-40
FINANCIAL STATEMENTS....................................................B-40
APPENDIX A..............................................................B-41
APPENDIX B..............................................................B-47

SCHRODER ENHANCED INCOME FUND
SCHRODER U.S. CORE FIXED INCOME FUND

STATEMENT OF ADDITIONAL INFORMATION

TRUST HISTORY

Schroder Series Trust (the "Trust") is a Massachusetts business trust organized
under the laws of The Commonwealth of Massachusetts on May 6, 1993. The Trust's
Agreement and Declaration of Trust (as amended, the "Declaration of Trust"),
which is governed by Massachusetts law, is on file with the Secretary of State
of The Commonwealth of Massachusetts. Schroder Enhanced Income and Schroder U.S.
Core Fixed Income Fund (collectively, the "Funds") are series of the Trust. The
Trust currently also comprises two other series, Schroder Municipal Bond Fund
and Schroder Short-Term Municipal Bond Fund, which are offered through separate
prospectuses and a separate statement of additional information. Schroder
Investment Management North America Inc. ("Schroders") serves as investment
adviser to each Fund.

FUND CLASSIFICATION

Each Fund is a diversified, open-end, management investment company registered
under the Investment Company Act of 1940, as amended (the "Investment Company
Act"). This means that with respect to 75% of a Fund's total assets, that Fund
may not invest in securities of any issuer if, immediately after such
investment, more than 5% of the total assets of such Fund (taken at current
value) would be invested in the securities of that issuer (this limitation does
not apply to investments in U.S. Government securities or securities of other
investment companies). Neither Fund is subject to this limitation with respect
to the remaining 25% of its total assets.

CAPITALIZATION AND SHARE CLASSES

The Trust has an unlimited number of shares of beneficial interest that may,
without shareholder approval, be divided into an unlimited number of series of
such shares, which, in turn, may be divided into an unlimited number of classes
of such shares. The shares of each of the Funds described in this SAI are
currently divided into two classes, Investor Shares and Advisor Shares. Each
class of shares is offered through a separate Prospectus. Unlike Investor
Shares, Advisor Shares are currently subject to distribution fees, so that the
performance of a Fund's Investor Shares will normally be more favorable than
that of the Fund's Advisor Shares over the same time period. A Fund may suspend
the sale of shares at any time.

Shares of each Fund entitle their holders to one vote per share, with fractional
shares voting proportionally; however, a separate vote will be taken by a class
of shares on matters affecting the class, as determined by the Trustees. For
example, a change in a fundamental investment policy for a Fund would be voted
upon only by shareholders of that Fund and a change to a distribution plan
relating to a particular class and requiring shareholder approval would be voted
upon only by shareholders of that class. Shares have noncumulative voting
rights. Although the Trust is not required to hold annual meetings of its
shareholders, shareholders have the right to call a meeting to elect or remove
Trustees or to take other actions as provided in the Declaration of Trust.
Shares have no preemptive or subscription rights, and are transferable. Shares
are entitled to dividends as declared by the Trustees, and if a Fund were
liquidated, each class of shares of that Fund would receive the net assets of
that Fund attributable to the class of shares. Because Investor and Advisor
Shares are subject to different expenses, a Fund's dividends and other
distributions will normally differ between the two classes.

B-1

ADDITIONAL INFORMATION CONCERNING THE FUNDS' PRINCIPAL INVESTMENT STRATEGIES

The following discussion provides additional information concerning the Funds'
principal investment strategies and the principal risks of the Funds described
in the Prospectuses. Because the following is a combined description of
investment strategies and risks for both Funds, certain strategies or risks
described below may not apply to your Fund. Unless a strategy or policy
described below is specifically prohibited by a Fund's investment restrictions
as set forth in the Prospectuses or under "Investment Restrictions" in this SAI,
or by applicable law, a Fund may engage in each of the practices described
below.

FIXED INCOME SECURITIES. In periods of declining interest rates, the yield
(income from portfolio investments) of a Fund may tend to be higher than
prevailing market rates, and in periods of rising interest rates, the yield of a
Fund may tend to be lower. In addition, when interest rates are falling, the
inflow of net new money to a Fund will likely be invested in portfolio
instruments producing lower yields than the balance of the Fund's portfolio,
thereby reducing the yield of the Fund. In periods of rising interest rates, the
opposite can be true. The net asset value of a Fund can generally be expected to
change as general levels of interest rates fluctuate. The values of fixed income
securities in a Fund's portfolio generally vary inversely with changes in
interest rates. Prices of fixed income securities with longer effective
maturities are more sensitive to interest rate changes than those with shorter
effective maturities.

ZERO-COUPON SECURITIES. Zero-coupon securities in which a Fund may invest are
debt obligations which are generally issued at a discount and payable in full at
maturity, and which do not provide for current payments of interest prior to
maturity. Zero-coupon securities usually trade at a deep discount from their
face or par value and are subject to greater market value fluctuations from
changing interest rates than debt obligations of comparable maturities which
make current distributions of interest. As a result, the net asset value of
shares of a Fund investing in zero-coupon securities may fluctuate over a
greater range than shares of other funds of the Trust and other mutual funds
investing in securities making current distributions of interest and having
similar maturities. The Funds are required to distribute the income on
zero-coupon securities as the income accrues, even though the Funds are not
receiving the income in cash on a current basis. Thus, a Fund may have to sell
other investments, including when it may not be advisable to do so, to make
income distributions.

Zero-coupon securities may include U.S. Treasury bills issued directly by the
U.S. Treasury or other short-term debt obligations, and longer-term bonds or
notes and their unmatured interest coupons which have been separated by their
holder, typically a custodian bank or investment brokerage firm. A number of
securities firms and banks have stripped the interest coupons from the
underlying principal (the "corpus") of U.S. Treasury securities and resold them
in custodial receipt programs with a number of different names, including
Treasury Income Growth Receipts ("TIGRS") and Certificates of Accrual on
Treasuries ("CATS"). CATS and TIGRS are not considered U.S. Government
securities. The underlying U.S. Treasury bonds and notes themselves are held in
book-entry form at the Federal Reserve Bank or, in the case of bearer securities
(i.e., unregistered securities which are owned ostensibly by the bearer or
holder thereof), in trust on behalf of the owners thereof.

In addition, the Treasury has facilitated transfers of ownership of zero-coupon
securities by accounting separately for the beneficial ownership of particular
interest coupons and corpus payments on Treasury securities through the Federal
Reserve book-entry record-keeping system. The Federal Reserve program as
established by the Treasury Department is known as "STRIPS" or "Separate Trading
of Registered Interest and Principal of Securities." Under the STRIPS program,
the Funds will be able to have their beneficial ownership of U.S. Treasury
zero-coupon securities recorded directly in the book-entry record-keeping system
in lieu of having to hold certificates or other evidences of ownership of the
underlying U.S. Treasury securities.

When debt obligations have been stripped of their unmatured interest coupons by
the holder, the stripped coupons are sold separately. The principal or corpus is
sold at a deep discount because the buyer receives only the right to receive a
future fixed payment on the security and does not receive any rights to periodic
cash interest payments. Once stripped or separated, the corpus and coupons may
be sold separately. Typically, the coupons are sold separately or grouped with
other coupons with like maturity dates and sold in such bundled form. Purchasers
of

B-2

stripped obligations acquire, in effect, discount obligations that are
economically identical to the zero-coupon securities issued directly by the
obligor.

MORTGAGE RELATED AND ASSET-BACKED SECURITIES. Mortgage-backed securities,
including collateralized mortgage obligations ("CMOs") and certain stripped
mortgage-backed securities represent a participation in, or are secured by,
mortgage loans. Asset-backed securities are structured like mortgage-backed
securities, but instead of mortgage loans or interests in mortgage loans, the
underlying assets may include such items as motor vehicle installment sales or
installment loan contracts, leases of various types of real and personal
property and receivables from credit card agreements. The ability of an issuer
of asset-backed securities to enforce its security interest in the underlying
assets may be limited.

Mortgage-backed securities have yield and maturity characteristics corresponding
to the underlying assets. Unlike traditional debt securities, which may pay a
fixed rate of interest until maturity, when the entire principal amount comes
due, payments on certain mortgage-backed securities include both interest and a
partial repayment of principal. Besides the scheduled repayment of principal,
repayments of principal may result from the voluntary prepayment, refinancing or
foreclosure of the underlying mortgage loans. If property owners make
unscheduled prepayments of their mortgage loans, these prepayments will result
in early payment of the applicable mortgage-related securities. In that event a
Fund may be unable to invest the proceeds from the early payment of the
mortgage-related securities in an investment that provides as high a yield as
the mortgage-related securities. Consequently, early payment associated with
mortgage-related securities may cause these securities to experience
significantly greater price and yield volatility than that experienced by
traditional fixed-income securities. The occurrence of mortgage prepayments is
affected by factors including the level of interest rates, general economic
conditions, the location and age of the mortgage and other social and
demographic conditions. During periods of falling interest rates, the rate of
mortgage prepayments tends to increase, thereby tending to decrease the life of
mortgage-related securities. During periods of rising interest rates, the rate
of mortgage prepayments usually decreases, thereby tending to increase the life
of mortgage-related securities. If the life of a mortgage-related security is
inaccurately predicted, a Fund may not be able to realize the rate of return the
adviser expected.

Mortgage-backed and asset-backed securities are less effective than other types
of securities as a means of "locking in" attractive long-term interest rates.
One reason is the need to reinvest prepayments of principal; another is the
possibility of significant unscheduled prepayments resulting from declines in
interest rates. These prepayments would have to be reinvested at lower rates. As
a result, these securities may have less potential for capital appreciation
during periods of declining interest rates than other securities of comparable
maturities, although they may have a similar risk of decline in market value
during periods of rising interest rates. Prepayments may also significantly
shorten the effective maturities of these securities, especially during periods
of declining interest rates. Conversely, during periods of rising interest
rates, a reduction in prepayments may increase the effective maturities of these
securities, subjecting them to a greater risk of decline in market value in
response to rising interest rates than traditional debt securities, and,
therefore, potentially increasing the volatility of the Funds.

Prepayments may cause losses on securities purchased at a premium. At times,
some mortgage-backed and asset-backed securities will have higher than market
interest rates and therefore will be purchased at a premium above their par
value.

CMOs may be issued by a U.S. Government agency or instrumentality or by a
private issuer. Although payment of the principal of, and interest on, the
underlying collateral securing privately issued CMOs may be guaranteed by the
U.S. Government or its agencies or instrumentalities, these CMOs represent
obligations solely of the private issuer and are not insured or guaranteed by
the U.S. Government, its agencies or instrumentalities or any other person or
entity.

Prepayments could cause early retirement of CMOs. CMOs are designed to reduce
the risk of prepayment for investors by issuing multiple classes of securities,
each having different maturities, interest rates and payment schedules, and with
the principal and interest on the underlying mortgages allocated among the
several classes in various ways. Payment of interest or principal on some
classes or series of CMOs may be subject to contingencies or some classes or
series may bear some or all of the risk of default on the underlying mortgages.
CMOs of different

B-3

classes or series are generally retired in sequence as the underlying mortgage
loans in the mortgage pool are repaid. If enough mortgages are repaid ahead of
schedule, the classes or series of a CMO with the earliest maturities generally
will be retired prior to their maturities. Thus, the early retirement of
particular classes or series of a CMO would have the same effect as the
prepayment of mortgages underlying other mortgage-backed securities. Conversely,
slower than anticipated prepayments can extend the effective maturities of CMOs,
subjecting them to a greater risk of decline in market value in response to
rising interest rates than traditional debt securities, and, therefore,
potentially increasing their volatility.

Prepayments could result in losses on stripped mortgage-backed securities.
Stripped mortgage-backed securities are usually structured with two classes that
receive different portions of the interest and principal distributions on a pool
of mortgage loans. The yield to maturity on an interest only or "IO" class of
stripped mortgage-backed securities is extremely sensitive not only to changes
in prevailing interest rates but also to the rate of principal payments
(including prepayments) on the underlying assets. A rapid rate of principal
prepayments may have a measurable adverse effect on a Fund's yield to maturity
to the extent it invests in IOs. If the assets underlying the IO experience
greater than anticipated prepayments of principal, the Fund may fail to recoup
fully, or at all, its initial investment in these securities. Conversely,
principal only securities or "POs" tend to increase in value if prepayments are
greater than anticipated and decline if prepayments are slower than anticipated.

The secondary market for stripped mortgage-backed securities may be more
volatile and less liquid than that for other mortgage-backed securities,
potentially limiting a Fund's ability to buy or sell those securities at any
particular time.

LOAN PARTICIPATIONS AND OTHER FLOATING RATE LOANS. The Schroder U.S. Core Fixed
Income Fund may invest in "loan participations." By purchasing a loan
participation, the Fund acquires some or all of the interest of a bank or other
lending institution in a loan to a particular borrower. Many such loans are
secured, and most impose restrictive covenants which must be met by the
borrower. These loans are typically made by a syndicate of banks, represented by
an agent bank which has negotiated and structured the loan and which is
responsible generally for collecting interest, principal, and other amounts from
the borrower on its own behalf and on behalf of the other lending institutions
in the syndicate, and for enforcing its and their other rights against the
borrower. Each of the lending institutions, including the agent bank, lends to
the borrower a portion of the total amount of the loan, and retains the
corresponding interest in the loan.

The Fund's ability to receive payments of principal and interest and other
amounts in connection with loan participations held by it will depend primarily
on the financial condition of the borrower. The failure by the Fund to receive
scheduled interest or principal payments on a loan participation would adversely
affect the income of the Fund and would likely reduce the value of its assets,
which would be reflected in a reduction in the Fund's net asset value. Banks and
other lending institutions generally perform a credit analysis of the borrower
before originating a loan or participating in a lending syndicate. In selecting
the loan participations in which the Fund will invest, however, Schroders will
not rely solely on that credit analysis, but will perform its own investment
analysis of the borrowers. Schroders' analysis may include consideration of the
borrower's financial strength and managerial experience, debt coverage,
additional borrowing requirements or debt maturity schedules, changing financial
conditions, and responsiveness to changes in business conditions and interest
rates. Schroders will be unable to access non-public information to which other
investors in syndicated loans may have access. Because loan participations in
which the Schroder U.S. Core Fixed Income Fund may invest are not generally
rated by independent credit rating agencies, a decision by the Fund to invest in
a particular loan participation will depend almost exclusively on Schroders',
and the original lending institution's, credit analysis of the borrower.
Investments in loan participations may be of any quality, including "distressed"
loans, and will be subject to the Fund's credit quality policy.

Loan participations may be structured in different forms, including novations,
assignments and participating interests. In a novation, the Fund assumes all of
the rights of a lending institution in a loan, including the right to receive
payments of principal and interest and other amounts directly from the borrower
and to enforce its rights as a lender directly against the borrower. The Fund
assumes the position of a co-lender with other syndicate members. As an
alternative, the Fund may purchase an assignment of a portion of a lender's
interest in a loan. In this case, the

B-4

Fund may be required generally to rely upon the assigning bank to demand payment
and enforce its rights against the borrower, but would otherwise be entitled to
all of such bank's rights in the loan. The Fund may also purchase a
participating interest in a portion of the rights of a lending institution in a
loan. In such case, it will be entitled to receive payments of principal,
interest and premium, if any, but will not generally be entitled to enforce its
rights directly against the agent bank or the borrower, and must rely for that
purpose on the lending institution. The Fund may also acquire a loan
participation directly by acting as a member of the original lending syndicate.

The Fund will in many cases be required to rely upon the lending institution
from which it purchases the loan participation to collect and pass on to the
Fixed Income Fund such payments and to enforce the Fund's rights under the loan.
As a result, an insolvency, bankruptcy or reorganization of the lending
institution may delay or prevent the Fund from receiving principal, interest and
other amounts with respect to the underlying loan. When the Fund is required to
rely upon a lending institution to pay to the Fund principal, interest and other
amounts received by it, Schroders will also evaluate the creditworthiness of the
lending institution.

The borrower of a loan in which the Schroder U.S. Core Fixed Income Fund holds a
participation interest may, either at its own election or pursuant to terms of
the loan documentation, prepay amounts of the loan from time to time. There is
no assurance that the Fund will be able to reinvest the proceeds of any loan
prepayment at the same interest rate or on the same terms as those of the
original loan participation.

Corporate loans in which the Schroder U.S. Core Fixed Income Fund may purchase a
loan participation are made generally to finance internal growth, mergers,
acquisitions, stock repurchases, leveraged buy-outs and other corporate
activities. Under current market conditions, most of the corporate loan
participations purchased by the Fund will represent interests in loans made to
finance highly leveraged corporate acquisitions, known as "leveraged buy-out"
transactions. The highly leveraged capital structure of the borrowers in such
transactions may make such loans especially vulnerable to adverse changes in
economic or market conditions. In addition, loan participations generally are
subject to restrictions on transfer, and only limited opportunities may exist to
sell such participations in secondary markets. As a result, the Fund may be
unable to sell loan participations at a time when it may otherwise be desirable
to do so or may be able to sell them only at a price that is less than their
fair market value.

Certain of the loan participations acquired by the Fund may involve revolving
credit facilities under which a borrower may from time to time borrow and repay
amounts up to the maximum amount of the facility. In such cases, the Fund would
have an obligation to advance its portion of such additional borrowings upon the
terms specified in the loan participation. To the extent that the Fund is
committed to make additional loans under such a participation, it will at all
times hold and maintain in a segregated account liquid assets in an amount
sufficient to meet such commitments. Certain of the loan participations acquired
by the Fund may also involve loans made in foreign currencies. The Fund's
investment in such participations would involve the risks of currency
fluctuations described below with respect to investments in the foreign
securities.

Notwithstanding its intention generally not to receive material, non-public
information with respect to its management of investments in floating rate
loans, Schroders may from time to time come into possession of material,
non-public information about the issuers of loans that may be held in the
Schroder U.S. Core Fixed Income Fund's portfolio. Possession of such information
may in some instances occur despite Schroders' efforts to avoid such possession,
but in other instances Schroders may choose to receive such information (for
example, in connection with participation in a creditors' committee with respect
to a financially distressed issuer). As, and to the extent, required by
applicable law, Schroders' ability to trade in these loans for the account of
the Fund could potentially be limited by its possession of such information.
Such limitations on Schroders' ability to trade could have an adverse effect on
the Fund by, for example, preventing the Fund from selling a loan that is
experiencing a material decline in value. In some instances, these trading
restrictions could continue in effect for a substantial period of time.

In some instances, other accounts managed by Schroders may hold other securities
issued by borrowers whose floating rate loans may be held in the Schroder U.S.
Core Fixed Income Fund's portfolio. These other securities may include, for
example, debt securities that are subordinate to the floating rate loans held in
the Fund's portfolio, convertible debt or common or preferred equity securities.
In certain circumstances, such as if the credit quality of

B-5

the issuer deteriorates, the interests of holders of these other securities may
conflict with the interests of the holders of the issuer's floating rate loans.
In such cases, Schroders may owe conflicting fiduciary duties to the Fund and
other client accounts. Schroders will endeavor to carry out its obligations to
all of its clients to the fullest extent possible, recognizing that in some
cases certain clients may achieve a lower economic return, as a result of these
conflicting client interests, than if Schroders' client accounts collectively
held only a single category of the issuer's securities.

FORWARD COMMITMENTS. A Fund may enter into contracts to purchase securities for
a fixed price at a future date beyond customary settlement time ("forward
commitments") if the Fund holds, and maintains until the settlement date in a
segregated account, cash or liquid securities in an amount sufficient to meet
the purchase price, or if the Fund enters into offsetting contracts for the
forward sale of other securities they own. Forward commitments may be considered
securities in themselves, and involve a risk of loss if the value of the
security to be purchased declines prior to the settlement date, which risk is in
addition to the risk of decline in the value of the Fund's other assets. Where
such purchases are made through dealers, the Fund relies on the dealer to
consummate the sale. The dealer's failure to do so may result in the loss to the
Fund of an advantageous yield or price.

Although a Fund will generally enter into forward commitments with the intention
of acquiring securities for its portfolio or for delivery pursuant to options
contracts it has entered into, a Fund may dispose of a commitment prior to
settlement if Schroders deems it appropriate to do so. A Fund may realize
short-term profits or losses upon the sale of forward commitments.

FLOATING RATE AND VARIABLE RATE DEMAND NOTES. Floating rate and variable rate
demand notes and bonds may have a stated maturity in excess of one year, but may
have features that permit a holder to demand payment of principal plus accrued
interest upon a specified number of days notice. Frequently, such obligations
are secured by letters of credit or other credit support arrangements provided
by banks. The issuer has a corresponding right, after a given period, to prepay
in its discretion the outstanding principal of the obligation plus accrued
interest upon a specific number of days notice to the holders. The interest rate
of a floating rate instrument may be based on a known lending rate, such as a
bank's prime rate, and is reset whenever such rate is adjusted. The interest
rate on a variable rate demand note is reset at specified intervals at a market
rate.

WHEN-ISSUED SECURITIES. A Fund may from time to time purchase securities on a
"when-issued" basis. Debt securities are often issued on this basis. The price
of such securities, which may be expressed in yield terms, is fixed at the time
a commitment to purchase is made, but delivery and payment for the when-issued
securities take place at a later date. Normally, the settlement date occurs
within one month of the purchase. During the period between purchase and
settlement, no payment is made by a Fund and no interest accrues to a Fund. To
the extent that assets of a Fund are held in cash pending the settlement of a
purchase of securities, that Fund would earn no income. While a Fund may sell
its right to acquire when-issued securities prior to the settlement date, a Fund
intend actually to acquire such securities unless a sale prior to settlement
appears desirable for investment reasons. At the time a Fund makes the
commitment to purchase a security on a when-issued basis, it will record the
transaction and reflect the amount due and the value of the security in
determining the Fund's net asset value. The market value of the when-issued
securities may be more or less than the purchase price payable at the settlement
date. Each Fund will establish a segregated account in which it will maintain
cash and U.S. Government securities or other liquid securities at least equal in
value to commitments for when-issued securities. Such segregated securities
either will mature or, if necessary, be sold on or before the settlement date.

REPURCHASE AGREEMENTS. A repurchase agreement is a contract under which a Fund
acquires a security for a relatively short period (usually not more than one
week) subject to the obligation of the seller to repurchase and the Fund to
resell such security at a fixed time and price (representing the Fund's cost
plus interest). It is the Trust's present intention to enter into repurchase
agreements only with member banks of the Federal Reserve System and securities
dealers meeting certain criteria as to creditworthiness and financial condition,
and only with respect to obligations of the U.S. Government or its agencies or
instrumentalities or other high quality short-term debt obligations. A Fund will
only enter into repurchase agreements with entities that at the time have
outstanding unsecured indebtedness that would be eligible for purchase by the
Fund. Repurchase agreements may also be viewed as loans made by a Fund which are
collateralized by the securities subject to repurchase. Schroders will

B-6

monitor such transactions to ensure that the value of the underlying securities
will be at least equal at all times to the total amount of the repurchase
obligation, including the interest factor. If the seller defaults, a Fund could
realize a loss on the sale of the underlying security to the extent that the
proceeds of sale including accrued interest are less than the resale price
provided in the agreement including interest. In addition, if the seller should
be involved in bankruptcy or insolvency proceedings, a Fund may incur delay and
costs in selling the underlying security or may suffer a loss of principal and
interest if the Fund is treated as an unsecured creditor and required to return
the underlying collateral to the seller's estate. There is no limit on the
amount of a Fund's assets that may be invested in repurchase agreements. To the
extent that a Fund has invested a substantial portion of its assets in
repurchase agreements, the Fund's investment return on such assets, and
potentially the Fund's ability to achieve its investment objectives, will depend
on the counterparties' willingness and ability to perform their obligations
under the repurchase agreements.

DERIVATIVES. Certain of the instruments in which a Fund may invest, such as
futures contracts, options, swaps, and forward contracts, are considered to be
"derivatives." Derivatives are financial instruments whose value depends upon,
or derives from, the value of an underlying asset, such as a security or an
index. Further information about these instruments and the risks involved in
their use is included elsewhere in the prospectuses or in this SAI. A Fund's use
of derivatives may cause a Fund to recognize higher amounts of short-term
capital gains, generally taxed to shareholders at ordinary income tax rates.
Investments in derivatives may be applied toward meeting a requirement to invest
in a particular kind of investment if the derivatives have economic
characteristics similar to that investment. The Schroder U.S. Core Fixed Income
Fund may also engage in derivative transactions involving foreign currencies.
See "Foreign Currency Transactions."

OPTIONS. A Fund may purchase and sell put and call options on its portfolio
securities to protect against changes in market prices and for other purposes.

Call options. A Fund may write call options on its portfolio securities for
various purposes, including without limitation to realize a greater current
return through the receipt of premiums than it would realize on their securities
alone. Such transactions may also be used as a limited form of hedging against a
decline in the price of securities owned by a Fund.

A call option gives the holder the right to purchase, and obligates the writer
to sell, a security at the exercise price at any time before the expiration
date. A Fund may write covered call options or uncovered call options. A call
option is "covered" if the writer, at all times while obligated as a writer,
either owns the underlying securities (or comparable securities satisfying the
cover requirements of the securities exchanges), or has the right to acquire
such securities through immediate conversion of securities. When a Fund has
written an uncovered call option, the Fund will not necessarily hold securities
offsetting the risk to the Fund. As a result, if the call option were exercised,
the Fund might be required to purchase the security that is the subject of the
call at the market price at the time of exercise. The Fund's exposure on such an
option is theoretically unlimited.

In return for the premium received when it writes a call option, a Fund gives up
some or all of the opportunity to profit from an increase in the market price of
the securities covering the call option during the life of the option. The Fund
retains the risk of loss should the price of such securities decline. If the
option expires unexercised, the Fund realizes a gain equal to the premium, which
may be offset by a decline in price of the underlying security. If the option is
exercised, the Fund realizes a gain or loss equal to the difference between the
Fund's cost for the underlying security and the proceeds of the sale (exercise
price minus commissions) plus the amount of the premium.

A Fund may terminate a call option that it has written before it expires by
entering into a closing purchase transaction. A Fund may enter into closing
purchase transactions in order to realize a profit on a previously written call
option or, in the case of a covered call option, to free itself to sell the
underlying security or to write another call on the security or protect a
security from being called in an unexpected market rise.

Any profits from a closing purchase transaction in the case of a covered call
option may be offset by a decline in the value of the underlying security.
Conversely, because increases in the market price of a call option will
generally

B-7

reflect increases in the market price of the underlying security, any loss
resulting from a closing purchase transaction relating to a covered call option
is likely to be offset in whole or in part by unrealized appreciation of the
underlying security owned by a Fund.

Covered put options. A Fund may write covered put options in order to enhance
its current return. Such options transactions may also be used as a limited form
of hedging against an increase in the price of securities that a Fund plans to
purchase. A put option gives the holder the right to sell, and obligates the
writer to buy, a security at the exercise price at any time before the
expiration date. A put option is "covered" if the writer segregates cash and
high-grade short-term debt obligations or other permissible collateral equal to
the price to be paid if the option is exercised.

In addition to the receipt of premiums and the potential gains from terminating
such options in closing purchase transactions, a Fund also receives interest on
the cash and debt securities maintained to cover the exercise price of the
option. By writing a put option, a Fund assumes the risk that it may be required
to purchase the underlying security for an exercise price higher than its then
current market value, resulting in a potential capital loss unless the security
later appreciates in value.

A Fund may terminate a put option that it has written before it expires by a
closing purchase transaction. Any loss from this transaction may be partially or
entirely offset by the premium received on the terminated option.

Purchasing put and call options. A Fund may also purchase put options to protect
portfolio holdings against a decline in market value. This protection lasts for
the life of the put option because the Fund, as a holder of the option, may sell
the underlying security at the exercise price regardless of any decline in its
market price. In order for a put option to be profitable, the market price of
the underlying security must decline sufficiently below the exercise price to
cover the premium and transaction costs that the Fund must pay. These costs will
reduce any profit the Fund might have realized had it sold the underlying
security instead of buying the put option.

A Fund may purchase call options to hedge against an increase in the price of
securities that a Fund wants ultimately to buy. Such hedge protection is
provided during the life of the call option since the Fund, as holder of the
call option, are able to buy the underlying security at the exercise price
regardless of any increase in the underlying security's market price. In order
for a call option to be profitable, the market price of the underlying security
must rise sufficiently above the exercise price to cover the premium and
transaction costs. These costs will reduce any profit the Fund might have
realized had it bought the underlying security at the time it purchased the call
option.

The Schroder U.S. Core Fixed Income Fund may also purchase put and call options
to enhance its current return. The Schroder U.S. Core Fixed Income Fund may also
buy and sell combinations of put and call options on the same underlying
security to earn additional income.

Options on foreign securities. The Schroder U.S. Core Fixed Income Fund may
purchase and sell options on foreign securities if in Schroders' opinion the
investment characteristics of such options, including the risks of investing in
such options, are consistent with the Fund's investment objectives. It is
expected that risks related to such options will not differ materially from
risks related to options on U.S. securities. However, position limits and other
rules of foreign exchanges may differ from those in the U.S. In addition,
options markets in some countries, many of which are relatively new, may be less
liquid than comparable markets in the U.S.

Risks involved in the sale of options. Options transactions involve certain
risks, including the risks that Schroders will not forecast interest rate or
market movements correctly, that a Fund may be unable at times to close out such
positions, or that hedging transactions may not accomplish their purpose because
of imperfect market correlations. The successful use of these strategies depends
on the ability of Schroders to forecast market and interest rate movements
correctly.

An exchange-listed option may be closed out only on an exchange which provides a
secondary market for an option of the same series. Although a Fund will enter
into an option position only if Schroders believes that a liquid secondary
market exists, there is no assurance that a liquid secondary market on an
exchange will exist for any

B-8

particular option or at any particular time. If no secondary market were to
exist, it would be impossible to enter into a closing transaction to close out
an option position. As a result, a Fund may be forced to continue to hold, or to
purchase at a fixed price, a security on which it has sold an option at a time
when Schroders believes it is inadvisable to do so.

Higher than anticipated trading activity or order flow or other unforeseen
events might cause The Options Clearing Corporation or an exchange to institute
special trading procedures or restrictions that might restrict a Fund's use of
options. The exchanges have established limitations on the maximum number of
calls and puts of each class that may be held or written by an investor or group
of investors acting in concert. It is possible that the Funds and other clients
of Schroders may be considered such a group. These position limits may restrict
the Funds' ability to purchase or sell options on particular securities.

As described below, each Fund generally expects that its options transactions
will be conducted on recognized exchanges. In certain instances, however, a Fund
may purchase and sell options in the over-the-counter markets. Options which are
not traded on national securities exchanges may be closed out only with the
other party to the option transaction. For that reason, it may be more difficult
to close out over-the-counter options than exchange-traded options. Options in
the over-the-counter market may also involve the risk that securities dealers
participating in such transactions would be unable to meet their obligations to
a Fund. Furthermore, over-the-counter options are not subject to the protection
afforded purchasers of exchange-traded options by The Options Clearing
Corporation. A Fund will, however, engage in over-the-counter options
transactions only when appropriate exchange-traded options transactions are
unavailable and when, in the opinion of Schroders, the pricing mechanism and
liquidity of the over-the-counter markets are satisfactory and the participants
are responsible parties likely to meet their contractual obligations. A Fund
will treat over-the-counter options (and, in the case of options sold by a Fund,
the underlying securities held by the Fund) as illiquid investments as required
by applicable law.

Government regulations, particularly the requirements for qualification as a
"regulated investment company" (a "RIC") under the United States Internal
Revenue Code of 1986, may also restrict the Trust's use of options.

FUTURES CONTRACTS. To the extent permitted by the investment restrictions set
forth under "Investment Restrictions" below, by the investment policies
described in the Prospectuses and by applicable law, each Fund may buy and sell
futures contracts, options on futures contracts, and related instruments in
order to hedge against the effects of adverse market changes or to increase
current return. All such futures and related options will, as may be required by
applicable law, be traded on exchanges that are licensed and regulated by the
Commodity Futures Trading Commission (the "CFTC"). Depending upon the change in
the value of the underlying security or index when a Fund enters into or
terminates a futures contract, the Fund may realize a gain or loss.

The Funds are operated by a person who has claimed an exclusion from the
definition of the term "commodity pool operator" under the Commodity Exchange
Act (the "CEA") and, therefore, such person is not subject to registration or
regulation as pool operators under the CEA.

Futures on Securities and Related Options. A futures contract on a security is a
binding contractual commitment which, if held to maturity, will result in an
obligation to make or accept delivery, during a particular month, of securities
having a standardized face value and rate of return. By purchasing futures on
securities -- assuming a "long" position -- a Fund will legally obligate itself
to accept the future delivery of the underlying security and pay the agreed
price. By selling futures on securities -- assuming a "short" position - it will
legally obligate itself to make the future delivery of the security against
payment of the agreed price. Open futures positions on securities will be valued
at the most recent settlement price, unless that price does not, in the judgment
of persons acting at the direction of the Trustees as to the valuation of the
Fund's assets, reflect the fair value of the contract, in which case the
positions will be fair valued by the Trustees or such persons.

Positions taken in the futures markets are not normally held to maturity, but
are instead liquidated through offsetting transactions that may result in a
profit or a loss. While futures positions taken by a Fund will usually be
liquidated in this manner, a Fund may instead make or take delivery of the
underlying securities whenever it appears economically advantageous to the Fund
to do so. A clearing corporation associated with the exchange on which

B-9

futures are traded assumes responsibility for such closing transactions and
guarantees that a Fund's sale and purchase obligations under closed-out
positions will be performed at the termination of the contract.

Hedging by use of futures on securities seeks to establish more certainly than
would otherwise be possible the effective rate of return on portfolio
securities. A Fund may, for example, take a "short" position in the futures
market by selling contracts for the future delivery of securities held by the
Fund (or securities having characteristics similar to those held by the Fund) in
order to hedge against an anticipated rise in interest rates that would
adversely affect the value of the Fund's portfolio securities. When hedging of
this character is successful, any depreciation in the value of portfolio
securities may substantially be offset by appreciation in the value of the
futures position.

On other occasions, a Fund may take a "long" position by purchasing futures on
securities. This would be done, for example, when a Fund expects to purchase
particular securities when it has the necessary cash, but expects the rate of
return available in the securities markets at that time to be less favorable
than rates currently available in the futures markets. If the anticipated rise
in the price of the securities should occur (with its concomitant reduction in
yield), the increased cost to the Fund of purchasing the securities may be
offset, at least to some extent, by the rise in the value of the futures
position taken in anticipation of the subsequent securities purchase.

Successful use by a Fund of futures contracts on securities is subject to
Schroders' ability to predict correctly movements in the direction of the
security's price and factors affecting markets for securities. For example, if a
Fund has hedged against the possibility of an increase in interest rates which
would adversely affect the market prices of securities held by it and the prices
of such securities increase instead, the Fund will lose part or all of the
benefit of the increased value of its securities which it has hedged because it
will have offsetting losses in its futures positions. In addition, in such
situations, if the Fund has insufficient cash, it may have to sell securities to
meet daily maintenance margin requirements. The Fund may have to sell securities
at a time when it may be disadvantageous to do so.

A Fund may purchase and write put and call options on certain futures contracts,
as they become available. Such options are similar to options on securities
except that options on futures contracts give the purchaser the right, in return
for the premium paid, to assume a position in a futures contract (a long
position if the option is a call and a short position if the option is a put) at
a specified exercise price at any time during the period of the option. As with
options on securities, the holder or writer of an option may terminate his
position by selling or purchasing an option of the same series. There is no
guarantee that such closing transactions can be effected. A Fund will be
required to deposit initial margin and maintenance margin with respect to put
and call options on futures contracts written by it pursuant to brokers'
requirements, and, in addition, net option premiums received will be included as
initial margin deposits. See "Margin Payments" below. Compared to the purchase
or sale of futures contracts, the purchase of call or put options on futures
contracts involves less potential risk to a Fund because the maximum amount at
risk is the premium paid for the options plus transactions costs. However, there
may be circumstances when the purchase of call or put options on a futures
contract would result in a loss to a Fund when the purchase or sale of the
futures contracts would not, such as when there is no movement in the prices of
securities. The writing of a put or call option on a futures contract involves
risks similar to those risks relating to the purchase or sale of futures
contracts.

Index Futures Contracts and Options. A Fund may invest in debt index futures
contracts and stock index futures contracts, and in related options. A debt
index futures contract is a contract to buy or sell units of a specified debt
index at a specified future date at a price agreed upon when the contract is
made. A unit is the current value of the index. A stock index futures contract
is a contract to buy or sell units of a stock index at a specified future date
at a price agreed upon when the contract is made. A unit is the current value of
the stock index.

Depending on the change in the value of the index between the time when a Fund
enters into and terminates an index futures transaction, a Fund may realize a
gain or loss. The following example illustrates generally the manner in which
index futures contracts operate. The Standard & Poor's 100 Stock Index is
composed of 100 selected common stocks, most of which are listed on the New York
Stock Exchange. The S&P 100 Index assigns relative weightings to the common
stocks included in the Index, and the Index fluctuates with changes in the
market values of those common stocks. In the case of the S&P 100 Index,
contracts are to buy or sell 100 units. Thus, if the value of the S&P 100 Index
were $180, one contract would be worth $18,000 (100 units x $180). The stock
index futures

B-10

contract specifies that no delivery of the actual stocks making up the index
will take place. Instead, settlement in cash must occur upon the termination of
the contract, with the settlement being the difference between the contract
price and the actual level of the stock index at the expiration of the contract.
For example, if a Fund enters into a futures contract to buy 100 units of the
S&P 100 Index at a specified future date at a contract price of $180 and the S&P
100 Index is at $184 on that future date, the Fund will gain $400 (100 units x
gain of $4). If a Fund enters into a futures contract to sell 100 units of the
stock index at a specified future date at a contract price of $180 and the S&P
100 Index is at $182 on that future date, the Fund will lose $200 (100 units x
loss of $2).

A Fund may purchase or sell futures contracts with respect to any securities
indices. Positions in index futures may be closed out only on an exchange or
board of trade which provides a secondary market for such futures.

In order to hedge a Fund's investments successfully using futures contracts and
related options, a Fund must invest in futures contracts with respect to indices
or sub-indices the movements of which will, in Schroders' judgment, have a
significant correlation with movements in the prices of the Fund's portfolio
securities.

Options on index futures contracts are similar to options on securities except
that options on index futures contracts give the purchaser the right, in return
for the premium paid, to assume a position in an index futures contract (a long
position if the option is a call and a short position if the option is a put) at
a specified exercise price at any time during the period of the option. Upon
exercise of the option, the holder would assume the underlying futures position
and would receive a variation margin payment of cash or securities approximating
the increase in the value of the holder's option position. If an option is
exercised on the last trading day prior to the expiration date of the option,
the settlement will be made entirely in cash based on the difference between the
exercise price of the option and the closing level of the index on which the
futures contract is based on the expiration date. Purchasers of options who fail
to exercise their options prior to the exercise date suffer a loss of the
premium paid.

As an alternative to purchasing and selling call and put options on index
futures contracts, a Fund may purchase and sell call and put options on the
underlying indices themselves to the extent that such options are traded on
national securities exchanges. Index options are similar to options on
individual securities in that the purchaser of an index option acquires the
right to buy (in the case of a call) or sell (in the case of a put), and the
writer undertakes the obligation to sell or buy (as the case may be), units of
an index at a stated exercise price during the term of the option. Instead of
giving the right to take or make actual delivery of securities, the holder of an
index option has the right to receive a cash "exercise settlement amount". This
amount is equal to the amount by which the fixed exercise price of the option
exceeds (in the case of a put) or is less than (in the case of a call) the
closing value of the underlying index on the date of the exercise, multiplied by
a fixed "index multiplier".

A Fund may purchase or sell options on stock indices in order to close out its
outstanding positions in options on stock indices which they have purchased. A
Fund may also allow such options to expire unexercised.

Compared to the purchase or sale of futures contracts, the purchase of call or
put options on an index involves less potential risk to a Fund because the
maximum amount at risk is the premium paid for the options plus transactions
costs. The writing of a put or call option on an index involves risks similar to
those risks relating to the purchase or sale of index futures contracts.

A Fund may also purchase warrants, issued by banks and other financial
institutions, whose values are based on the values from time to time of one or
more securities indices.

Margin Payments. When a Fund purchases or sells a futures contract, it is
required to deposit with its custodian or with a futures commission merchant an
amount of cash, U.S. Treasury bills, or other permissible collateral equal to a
small percentage of the amount of the futures contract. This amount is known as
"initial margin". The nature of initial margin is different from that of margin
in security transactions in that it does not involve borrowing money to finance
transactions. Rather, initial margin is similar to a performance bond or good
faith deposit that is returned to the Fund upon termination of the contract,
assuming the Fund satisfies its contractual obligations.

B-11

Subsequent payments to and from the broker occur on a daily basis in a process
known as "marking to market". These payments are called "variation margin" and
are made as the value of the underlying futures contract fluctuates. For
example, when a Fund sells a futures contract and the price of the underlying
security rises above the delivery price, the Fund's position declines in value.
The Fund then pays the broker a variation margin payment equal to the difference
between the delivery price of the futures contract and the market price of the
securities underlying the futures contract. Conversely, if the price of the
underlying security falls below the delivery price of the contract, the Fund's
futures position increases in value. The broker then must make a variation
margin payment equal to the difference between the delivery price of the futures
contract and the market price of the securities underlying the futures contract.

When a Fund terminates a position in a futures contract, a final determination
of variation margin is made, additional cash is paid by or to the Fund, and the
Fund realizes a loss or a gain. Such closing transactions involve additional
commission costs.

SPECIAL RISKS OF TRANSACTIONS IN FUTURES CONTRACTS AND RELATED OPTIONS

Liquidity Risks. Positions in futures contracts may be closed out only on an
exchange or board of trade which provides a secondary market for such futures.
Although the Funds intend to purchase or sell futures only on exchanges or
boards of trade where there appears to be an active secondary market, there is
no assurance that a liquid secondary market on an exchange or board of trade
will exist for any particular contract or at any particular time. If there is
not a liquid secondary market at a particular time, it may not be possible to
close a futures position at such time and, in the event of adverse price
movements, a Fund would continue to be required to make daily cash payments of
variation margin. However, in the event financial futures are used to hedge
portfolio securities, such securities will not generally be sold until the
financial futures can be terminated. In such circumstances, an increase in the
price of the portfolio securities, if any, may partially or completely offset
losses on the financial futures.

In addition to the risks that apply to all options transactions, there are
several special risks relating to options on futures contracts. The ability to
establish and close out positions in such options will be subject to the
development and maintenance of a liquid secondary market. It is not certain that
such a market will develop. Although the Funds generally will purchase only
those options for which there appears to be an active secondary market, there is
no assurance that a liquid secondary market on an exchange will exist for any
particular option or at any particular time. In the event no such market exists
for particular options, it might not be possible to effect closing transactions
in such options with the result that the Funds would have to exercise the
options in order to realize any profit.

Hedging Risks. There are several risks in connection with the use by a Fund of
futures contracts and related options as a hedging device. One risk arises
because of the imperfect correlation between movements in the prices of the
futures contracts and options and movements in the underlying securities or
index or in the prices of a Fund's securities which are the subject of a hedge.
Schroders will, however, attempt to reduce this risk by purchasing and selling,
to the extent possible, futures contracts and related options on securities and
indices the movements of which will, in its judgment, correlate closely with
movements in the prices of the underlying securities or index and a Fund's
portfolio securities sought to be hedged.

Successful use of futures contracts and options by a Fund for hedging purposes
is also subject to Schroders' ability to predict correctly movements in the
direction of the market. It is possible that, where a Fund has purchased puts on
futures contracts to hedge its portfolio against a decline in the market, the
securities or index on which the puts are purchased may increase in value and
the value of securities held in the portfolio may decline. If this occurred, the
Fund would lose money on the puts and also experience a decline in value in its
portfolio securities. In addition, the prices of futures, for a number of
reasons, may not correlate perfectly with movements in the underlying securities
or index due to certain market distortions. First, all participants in the
futures market are subject to margin deposit requirements. Such requirements may
cause investors to close futures contracts through offsetting transactions which
could distort the normal relationship between the underlying security or index
and futures markets. Second, the margin requirements in the futures markets are
less onerous than margin requirements in the securities markets in general, and
as a result the futures markets may attract more speculators than the securities
markets do. Increased participation by speculators in the futures markets may
also cause temporary price

B-12

distortions. Due to the possibility of price distortion, even a correct forecast
of general market trends by Schroders may still not result in a successful
hedging transaction over a very short time period.

Lack of Availability. Because the markets for certain options and futures
contracts and other derivative instruments in which a Fund may invest (including
markets located in foreign countries) are relatively new and still developing
and may be subject to regulatory restraints, a Fund's ability to engage in
transactions using such instruments may be limited. Suitable derivative
transactions may not be available in all circumstances and there is no assurance
that a Fund will engage in such transactions at any time or from time to time. A
Fund's ability to engage in hedging transactions may also be limited by certain
regulatory and tax considerations.

Other Risks. A Fund will incur brokerage fees in connection with its futures and
options transactions. In addition, while futures contracts and options on
futures may be purchased and sold to reduce certain risks, those transactions
themselves entail certain other risks. Thus, while a Fund may benefit from the
use of futures and related options, unanticipated changes in interest rates or
stock price movements may result in a poorer overall performance for a Fund than
if it had not entered into any futures contracts or options transactions.
Moreover, in the event of an imperfect correlation between the futures position
and the portfolio position which is intended to be protected, the desired
protection may not be obtained and the Fund may be exposed to risk of loss.

WARRANTS TO PURCHASE SECURITIES. A Fund may invest in warrants to purchase
securities. Bonds issued with warrants attached to purchase equity securities
have many characteristics of convertible bonds and their prices may, to some
degree, reflect the performance of the underlying stock. Bonds also may be
issued with warrants attached to purchase additional fixed income securities at
the same coupon rate. A decline in interest rates would permit a Fund to buy
additional bonds at the favorable rate or to sell the warrants at a profit. If
interest rates rise, the warrants would generally expire with no value.

SWAP AGREEMENTS. A Fund may enter into swap agreements and other types of
over-the-counter transactions with broker-dealers or other financial
institutions. Depending on their structures, swap agreements may increase or
decrease a Fund's exposure to long-or short-term interest rates (in the United
States or abroad), foreign currency values, mortgage securities, corporate
borrowing rates, or other factors such as security prices or inflation rates.
The value of a Fund's swap positions would increase or decrease depending on the
changes in value of the underlying rates, currency values, or other indices or
measures.

A Fund may also enter into "credit default" swap transactions. In a credit
default swap, one party pays what is, in effect, an insurance premium through a
stream of payments to another party in exchange for the right to receive a
specified return in the event of a default (or similar events) by a third party
on its obligations. Therefore, in a credit default swap, a Fund may pay a
premium and, in return, have the right to put certain bonds or loans to the
counterparty upon default by the issuer of such bonds or loans (or similar
events) and to receive in return the par value of such bonds or loans (or
another agreed upon amount). A Fund would generally enter into this type of
transaction to limit or reduce risk with respect to bonds or loans that it owns
in its portfolios or otherwise in connection with transactions intended to
reduce one or more risks in the Fund's portfolio. In addition, a Fund could also
receive the premium referenced above, and be obligated to pay a counterparty the
par value of certain bonds or loans upon a default (or similar event) by the
issuer. A Fund would generally enter into this type of transaction as a
substitute for investment in the securities of the issuer, or otherwise to
increase the Fund's investment return.

A Fund's ability to realize a profit from such transactions will depend on the
ability of the financial institutions with which they enter into the
transactions to meet their obligations to the Fund. Under certain circumstances,
suitable transactions may not be available to a Fund, or a Fund may be unable to
close out its position under such transactions at the same time, or at the same
price, as if it had purchased comparable publicly traded securities. A Fund's
ability to engage in certain swap transactions may be limited by tax
considerations.

HYBRID INSTRUMENTS. These instruments are generally considered derivatives and
include indexed or structured securities, and combine the elements of futures
contracts or options with those of debt, preferred equity or a depository
instrument. A hybrid instrument may be a debt security, preferred stock,
warrant, convertible security, certificate of depositor other evidence of
indebtedness on which a portion of or all interest payments, and/or the

B-13

principal or stated amount payable at maturity, redemption or retirement, is
determined by reference to prices, changes in prices, or differences between
prices, of securities, currencies, intangibles, goods, articles or commodities
(collectively, "underlying assets"), or by another objective index, economic
factor or other measure, including interest rates, currency exchange rates, or
commodities or securities indices (collectively, "benchmarks"). Hybrid
instruments may take a number of forms, including, but not limited to, debt
instruments with interest or principal payments or redemption terms determined
by reference to the value of an index at a future time, preferred stock with
dividend rates determined by reference to the value of a currency, or
convertible securities with the conversion terms related to a particular
commodity.

The risks of investing in hybrid instruments reflect a combination of the risks
of investing in securities, options, futures and currencies. An investment in a
hybrid instrument may entail significant risks that are not associated with a
similar investment in a traditional debt instrument that has a fixed principal
amount, is denominated in U.S. dollars or bears interest either at a fixed rate
or a floating rate determined by reference to a common, nationally published
benchmark. The risks of a particular hybrid instrument will depend upon the
terms of the instrument, but may include the possibility of significant changes
in the benchmark(s) or the prices of the underlying assets to which the
instrument is linked. Such risks generally depend upon factors unrelated to the
operations or credit quality of the issuer of the hybrid instrument, which may
not be foreseen by the purchaser, such as economic and political events, the
supply and demand of the underlying assets and interest rate movements. Hybrid
instruments may be highly volatile and their use by the Funds may not be
successful.

Hybrid instruments may bear interest or pay preferred dividends at below market
(or even relatively nominal) rates. Alternatively, hybrid instruments may bear
interest at above market rates but bear an increased risk of principal loss (or
gain). The latter scenario may result if "leverage" is used to structure the
hybrid instrument. Leverage risk occurs when the hybrid instrument is structured
so that a given change in a benchmark or underlying asset is multiplied to
produce a greater value change in the hybrid instrument, thereby magnifying the
risk of loss as well as the potential for gain.

Hybrid instruments can be an efficient means of creating exposure to a
particular market, or segment of a market, with the objective of enhancing total
return. For example, the Schroder U.S. Core Fixed Income Fund may wish to take
advantage of expected declines in interest rates in several European countries,
but avoid the transaction costs associated with buying and currency-hedging the
foreign bond positions. One solution would be to purchase a U.S.
dollar-denominated hybrid instrument whose redemption price is linked to the
average three year interest rate in a designated group of countries. The
redemption price formula would provide for payoffs of less than par if rates
were above the specified level. Furthermore, the Fund could limit the downside
risk of the security by establishing a minimum redemption price so that the
principal paid at maturity could not be below a predetermined minimum level if
interest rates were to rise significantly. The purpose of this arrangement,
known as a structured security with an embedded put option, would be to give the
Fund the desired European bond exposure while avoiding currency risk, limiting
downside market risk, and lowering transaction costs. Of course, there is no
guarantee that the strategy will be successful and the Fund could lose money if,
for example, interest rates do not move as anticipated or credit problems
develop with the issuer of the hybrid instrument.

Hybrid instruments are potentially more volatile and carry greater market risks
than traditional debt instruments. Depending on the structure of the particular
hybrid instrument, changes in a benchmark may be magnified by the terms of the
hybrid instrument and have an even more dramatic and substantial effect upon the
value of the hybrid instrument. Also, the prices of the hybrid instrument and
the benchmark or underlying asset may not move in the same direction or at the
same time.

Hybrid instruments may also carry liquidity risk since the instruments are often
"customized" to meet the portfolio needs of a particular investor, and
therefore, the number of investors that are willing and able to buy such
instruments in the secondary market may be smaller than that for more
traditional debt securities. Under certain conditions, the redemption value of
such an investment could be zero. In addition, because the purchase and sale of
hybrid investments could take place in an over-the-counter market without the
guarantee of a central clearing organization, or in a transaction between a Fund
and the issuer of the hybrid instrument, the creditworthiness of the
counterparty of the issuer of the hybrid instrument would be an additional risk
factor the Funds would have to

B-14

consider and monitor. Hybrid instruments also may not be subject to regulation
by the CFTC, which generally regulates the trading of commodity futures by U.S.
persons, the SEC, which regulates the offer and sale of securities by and to
U.S. persons, or any other governmental regulatory authority.

STRUCTURED INVESTMENTS. A structured investment is a security having a return
tied to an underlying index or other security or asset class. Structured
investments generally are individually negotiated agreements and may be traded
over-the-counter. Structured investments are organized and operated to
restructure the investment characteristics of the underlying security. This
restructuring involves the deposit with or purchase by an entity, such as a
corporation or trust, or specified instruments (such as commercial bank loans)
and the issuance by that entity or one or more classes of securities
("structured securities") backed by, or representing interests in, the
underlying instruments. The cash flow on the underlying instruments may be
apportioned among the newly issued structured securities to create securities
with different investment characteristics, such as varying maturities, payment
priorities and interest rate provisions, and the extent of such payments made
with respect to structured securities is dependent on the extent of the cash
flow on the underlying instruments. Because structured securities typically
involve no credit enhancement, their credit risk generally will be equivalent to
that of the underlying instruments. Investments in structured securities are
generally of a class of structured securities that is either subordinated or
unsubordinated to the right of payment of another class. Subordinated structured
securities typically have higher yields and present greater risks than
unsubordinated structured securities. Structured securities are typically sold
in private placement transactions, and there currently is no active trading
market for structured securities. Investments in government and
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.

FOREIGN SECURITIES. A Fund may invest in securities principally traded in
foreign markets, although the Schroder Enhanced Income Fund may invest only in
U.S. dollar-denominated securities. A Fund may also invest in Eurodollar
certificates of deposit and other certificates of deposit issued by United
States branches of foreign banks and foreign branches of United States banks.

Investments in foreign securities may involve risks and considerations different
from or in addition to investments in domestic securities. There may be less
information publicly available about a foreign company than about a U.S.
company, and foreign companies are not generally subject to accounting,
auditing, and financial reporting standards and practices comparable to those in
the United States. The securities of some foreign companies are less liquid and
at times more volatile than securities of comparable U.S. companies. Foreign
brokerage commissions and other fees are also generally higher than in the
United States. Foreign settlement procedures and trade regulations may involve
certain risks (such as delay in payment or delivery of securities or in the
recovery of a Fund's assets held abroad) and expenses not present in the
settlement of domestic investments. Also, because foreign securities held by the
Schroder U.S. Core Fixed Income Fund may be denominated in foreign currencies,
the values of that Fund's assets may be affected favorably or unfavorably by
currency exchange rates and exchange control regulations, and that Fund may
incur costs in connection with conversion between currencies.

In addition, with respect to certain foreign countries, there is a possibility
of nationalization or expropriation of assets, imposition of currency exchange
controls, adoption of foreign governmental restrictions affecting the payment of
principal and interest, imposition of withholding or confiscatory taxes,
political or financial instability, and adverse political, diplomatic or
economic developments which could affect the values of investments in those
countries. In certain countries, legal remedies available to investors may be
more limited than those available with respect to investments in the United
States or other countries and it may be more difficult to obtain and enforce a
judgment against a foreign issuer. Also, the laws of some foreign countries may
limit a Fund's ability to invest in securities of certain issuers located in
those countries. Special tax considerations apply to foreign securities.

Income received by a Fund from sources within foreign countries may be reduced
by withholding and other taxes imposed by such countries. Tax conventions
between certain countries and the United States may reduce or eliminate such
taxes. It is impossible to determine the effective rate of foreign tax in
advance since the amount of a Fund's assets to be invested in various countries
is not known, and tax laws and their interpretations may change

B-15

from time to time and may change without advance notice. Any such taxes paid by
a Fund will reduce its net income available for distribution to shareholders.

FOREIGN CURRENCY TRANSACTIONS. The Schroder U.S. Core Fixed Income Fund may
engage in currency exchange transactions to protect against uncertainty in the
level of future foreign currency exchange rates and to increase current return.
The Schroder U.S. Core Fixed Income Fund may engage in both "transaction
hedging" and "position hedging".

When it engages in transaction hedging, the Schroder U.S. Core Fixed Income Fund
enters into foreign currency transactions with respect to specific receivables
or payables of that Fund generally arising in connection with the purchase or
sale of its portfolio securities. The Fund will engage in transaction hedging
when it desires to "lock in" the U.S. dollar price of a security it has agreed
to purchase or sell, or the U.S. dollar equivalent of a dividend or interest
payment in a foreign currency. By transaction hedging, the Fund will attempt to
protect against a possible loss resulting from an adverse change in the
relationship between the U.S. dollar and the applicable foreign currency during
the period between the date on which the security is purchased or sold or on
which the dividend or interest payment is declared, and the date on which such
payments are made or received.

The Schroder U.S. Core Fixed Income Fund may purchase or sell a foreign currency
on a spot (or cash) basis at the prevailing spot rate in connection with
transaction hedging. The Fund may also enter into contracts to purchase or sell
foreign currencies at a future date ("forward contracts") and purchase and sell
foreign currency futures contracts.

For transaction hedging purposes, the Schroder U.S. Core Fixed Income Fund may
also purchase exchange-listed and over-the-counter call and put options on
foreign currency futures contracts and on foreign currencies. A put option on a
futures contract gives the Fund the right to assume a short position in the
futures contract until expiration of the option. A put option on currency gives
the Fund the right to sell a currency at an exercise price until the expiration
of the option. A call option on a futures contract gives the Fund the right to
assume a long position in the futures contract until the expiration of the
option. A call option on currency gives the Fund the right to purchase a
currency at the exercise price until the expiration of the option. The Schroder
U.S. Core Fixed Income Fund will engage in over-the-counter transactions only
when appropriate exchange-traded transactions are unavailable and when, in
Schroders' opinion, the pricing mechanism and liquidity are satisfactory and the
participants are responsible parties likely to meet their contractual
obligations.

When it engages in position hedging, the Schroder U.S. Core Fixed Income Fund
enters into foreign currency exchange transactions to protect against a decline
in the values of the foreign currencies in which securities held by that Fund
are denominated or are quoted in their principal trading markets or an increase
in the value of currency for securities which the Fund expects to purchase. In
connection with position hedging, the Fund may purchase put or call options on
foreign currency and foreign currency futures contracts and buy or sell forward
contracts and foreign currency futures contracts. The Schroder U.S. Core Fixed
Income Fund may also purchase or sell foreign currency on a spot basis.

The precise matching of the amounts of foreign currency exchange transactions
and the value of the portfolio securities involved will not generally be
possible since the future value of such securities in foreign currencies will
change as a consequence of market movements in the values of those securities
between the dates the currency exchange transactions are entered into and the
dates they mature.

It is impossible to forecast with precision the market value of the Schroder
U.S. Core Fixed Income Fund's portfolio securities at the expiration or maturity
of a forward or futures contract. Accordingly, it may be necessary for the Fund
to purchase additional foreign currency on the spot market (and bear the expense
of such purchase) if the market value of the security or securities being hedged
is less than the amount of foreign currency the Fund is obligated to deliver and
if a decision is made to sell the security or securities and make delivery of
the foreign currency. Conversely, it may be necessary to sell on the spot market
some of the foreign currency received upon the sale of the portfolio security or
securities of the Fund if the market value of such security or securities
exceeds the amount of foreign currency the Fund is obligated to deliver.

B-16

To offset some of the costs to the Schroder U.S. Core Fixed Income Fund of
hedging against fluctuations in currency exchange rates, the Schroder U.S. Core
Fund may write covered call options on those currencies.

Transaction and position hedging do not eliminate fluctuations in the underlying
prices of the securities which the Schroder U.S. Core Fixed Income Fund owns or
intends to purchase or sell. They simply establish a rate of exchange which one
can achieve at some future point in time. Additionally, although these
techniques tend to minimize the risk of loss due to a decline in the value of
the hedged currency, they tend to limit any potential gain which might result
from the increase in the value of such currency. Also, suitable foreign currency
hedging transactions may not be available in all circumstances and there can be
no assurance that the Fund will utilize hedging transactions at any time or from
time to time.

The Schroder U.S. Core Fixed Income Fund may also seek to increase its current
return by purchasing and selling foreign currency on a spot basis, and by
purchasing and selling options on foreign currencies and on foreign currency
futures contracts, and by purchasing and selling foreign currency forward
contracts.

CURRENCY FORWARD AND FUTURES CONTRACTS. The Schroder U.S. Core Fixed Income Fund
may enter into currency forward and futures contracts. A forward foreign
currency exchange contract involves an obligation to purchase or sell a specific
currency at a future date, which may be any fixed number of days from the date
of the contract as agreed by the parties, at a price set at the time of the
contract. In the case of a cancelable forward contract, the holder has the
unilateral right to cancel the contract at maturity by paying a specified fee.
The contracts are traded in the interbank market conducted directly between
currency traders (usually large commercial banks) and their customers. A forward
contract generally has no deposit requirement, and no commissions are charged at
any stage for trades. A foreign currency futures contract is a standardized
contract for the future delivery of a specified amount of a foreign currency at
a future date at a price set at the time of the contract. Foreign currency
futures contracts traded in the United States are designed by and traded on
exchanges regulated by the Commodity Futures Trading Commission ("CFTC"), such
as the New York Mercantile Exchange.

Forward foreign currency exchange contracts differ from foreign currency futures
contracts in certain respects. For example, the maturity date of a forward
contract may be any fixed number of days from the date of the contract agreed
upon by the parties, rather than a predetermined date in a given month. Forward
contracts may be in any amounts agreed upon by the parties rather than
predetermined amounts. Also, forward foreign exchange contracts are traded
directly between currency traders so that no intermediary is required. A forward
contract generally requires no margin or other deposit.

At the maturity of a forward or futures contract, the Schroder U.S. Core Fixed
Income Fund may either accept or make delivery of the currency specified in the
contract, or at or prior to maturity enter into a closing transaction involving
the purchase or sale of an offsetting contract. Closing transactions with
respect to forward contracts are usually effected with the currency trader who
is a party to the original forward contract. Closing transactions with respect
to futures contracts are effected on a commodities exchange; a clearing
corporation associated with the exchange assumes responsibility for closing out
such contracts.

Positions in foreign currency futures contracts and related options may be
closed out only on an exchange or board of trade which provides a secondary
market in such contracts or options. Although the Schroder U.S. Core Fixed
Income Fund will normally purchase or sell foreign currency futures contracts
and related options only on exchanges or boards of trade where there appears to
be an active secondary market, there is no assurance that a secondary market on
an exchange or board of trade will exist for any particular contract or option
or at any particular time. In such event, it may not be possible to close a
futures or related option position and, in the event of adverse price movements,
the Fund would continue to be required to make daily cash payments of variation
margin on its futures positions.

FOREIGN CURRENCY OPTIONS. The Schroder U.S. Core Fixed Income Fund may enter
into options on foreign currencies. Options on foreign currencies operate
similarly to options on securities, and are traded primarily in the
over-the-counter market, although options on foreign currencies have been listed
on several exchanges. Such options will be purchased or written by the Schroder
U.S. Core Fixed Income Fund only when Schroders believes

B-17

that a liquid secondary market exists for such options. There can be no
assurance that a liquid secondary market will exist for a particular option at
any specific time. Options on foreign currencies are affected by all of those
factors which influence exchange rates and investments generally.

The value of a foreign currency option is dependent upon the value of the
foreign currency and the U.S. dollar, and may have no relationship to the
investment merits of a foreign security. Because foreign currency transactions
occurring in the interbank market involve substantially larger amounts than
those that may be involved in the use of foreign currency options, investors may
be disadvantaged by having to deal in an odd lot market (generally consisting of
transactions of less than $1 million) for the underlying foreign currencies at
prices that are less favorable than for round lots.

There is no systematic reporting of last sale information for foreign currencies
and there is no regulatory requirement that quotations available through dealers
or other market sources be firm or revised on a timely basis. Available
quotation information is generally representative of very large transactions in
the interbank market and thus may not reflect relatively smaller transactions
(less than $1 million) where rates may be less favorable. The interbank market
in foreign currencies is a global, around-the-clock market. To the extent that
the U.S. options markets are closed while the markets for the underlying
currencies remain open, significant price and rate movements may take place in
the underlying markets that cannot be reflected in the U.S. options markets.

FOREIGN CURRENCY CONVERSION. Although foreign exchange dealers do not charge a
fee for currency conversion, they do realize a profit based on the difference
(the "spread") between prices at which they buy and sell various currencies.
Thus, a dealer may offer to sell a foreign currency to the Schroder U.S. Core
Fixed Income Fund at one rate, while offering a lesser rate of exchange should
the Schroder U.S. Core Fixed Income Fund desire to resell that currency to the
dealer.

NON-PRINCIPAL INVESTMENTS, INVESTMENT PRACTICES AND RISKS

In addition to the principal investment strategies and the principal risks of
the Funds described in the Prospectuses and this SAI, the Funds may employ other
investment practices and may be subject to additional risks, which are described
below.

LOANS OF FUND PORTFOLIO SECURITIES. A Fund may lend its portfolio securities,
provided: (1) the loan is secured continuously by collateral consisting of U.S.
Government securities, cash, or cash equivalents adjusted daily to have market
value at least equal to the current market value of the securities loaned; (2)
the Fund may at any time call the loan and regain the securities loaned; (3) the
Fund will receive any interest or dividends paid on the loaned securities; and
(4) the aggregate market value of the Fund's portfolio securities loaned will
not at any time exceed one-third of the total assets of the Fund. In addition,
it is anticipated that the Fund may share with the borrower some of the income
received on the collateral for the loan or that they will be paid a premium for
the loan. Before a Fund enters into a loan, Schroders considers all relevant
facts and circumstances, including the creditworthiness of the borrower. The
risks in lending portfolio securities, as with other extensions of credit,
consist of possible delay in recovery of the securities or possible loss of
rights in the collateral should the borrower fail financially. Although voting
rights or rights to consent with respect to the loaned securities pass to the
borrower, a Funds retains the right to call the loans at any time on reasonable
notice, and it will do so in order that the securities may be voted by the Fund
if the holders of such securities are asked to vote upon or consent to matters
materially affecting the investment. A Fund will not lend portfolio securities
to borrowers affiliated with that Fund.

CONVERTIBLE SECURITIES. The Schroder U.S. Core Fixed Income Fund may invest in
convertible securities. Convertible securities include bonds, debentures, notes,
preferred stocks and other securities that may be converted into or exchanged
for, at a specific price or formula within a particular period of time, a
prescribed amount of common stock or other equity securities of the same or a
different issuer. Convertible securities entitle the holder to receive interest
paid or accrued on debt or dividends paid or accrued on preferred stock until
the security matures or is redeemed, converted or exchanged.

B-18

The market value of a convertible security is a function of its "investment
value" and its "conversion value." A security's "investment value" represents
the value of the security without its conversion feature (i.e., a nonconvertible
fixed income security). The investment value may be determined by reference to
its credit quality and the current value of its yield to maturity or probable
call date. At any given time, investment value is dependent upon such factors as
the general level of interest rates, the yield of similar nonconvertible
securities, the financial strength of the issuer and the seniority of the
security in the issuer's capital structure. A security's "conversion value" is
determined by multiplying the number of shares the holder is entitled to receive
upon conversion or exchange by the current price of the underlying security.

If the conversion value of a convertible security is significantly below its
investment value, the convertible security will trade like nonconvertible debt
or preferred stock and its market value will not be influenced greatly by
fluctuations in the market price of the underlying security. Conversely, if the
conversion value of a convertible security is near or above its investment
value, the market value of the convertible security will be more heavily
influenced by fluctuations in the market price of the underlying security.

The Schroder U.S. Core Fixed Income Fund's investments in convertible securities
may at times include securities that have a mandatory conversion feature,
pursuant to which the securities convert automatically into common stock or
other equity securities at a specified date and a specified conversion ratio, or
that are convertible at the option of the issuer. Because conversion of the
security is not at the option of the holder, the Fund may be required to convert
the security into the underlying common stock even at times when the value of
the underlying common stock or other equity security has declined substantially.

The Schroder U.S. Core Fixed Income Fund's investments in convertible
securities, particularly securities that are convertible into securities of an
issuer other than the issuer of the convertible security, may be illiquid. The
Fund may not be able to dispose of such securities in a timely fashion or for a
fair price, which could result in losses to the Fund.

SHORT SALES. A Fund may seek to hedge investments or, in the case of the
Schroder U.S. Core Fixed Income Fund, realize additional gains, through short
sales. Short sales are transactions in which a Fund sells a security it does not
own, in anticipation of a decline in the market value of that security. To
complete such a transaction, a Fund must borrow the security to make delivery to
the buyer. A Fund then is obligated to replace the security borrowed by
purchasing it at the market price at or prior to the time of replacement. The
price at such time may be more or less than the price at which the security was
sold by a Fund. Until the security is replaced, a Fund is required to repay the
lender any dividends or interest that accrue during the period of the loan. To
borrow the security, a Fund also may be required to pay a premium, which would
increase the cost of the security sold. The net proceeds of the short sale will
be retained by the broker (or by the Fund's custodian in a special custody
account), to the extent necessary to meet margin requirements, until the short
position is closed out. A Fund also will incur transaction costs in effecting
short sales.

A Fund will incur a loss as a result of the short sale if the price of the
security increases between the date of the short sale and the date on which the
Fund replaces the borrowed security. A Fund may realize a gain if the security
declines in price between those dates. The amount of any gain will be decreased,
and the amount of any loss increased, by the amount of the premium, dividends,
interest or expenses the Fund may be required to pay in connection with a short
sale. The Fund's loss on a short sale could theoretically be unlimited in a case
where the Fund is unable, for whatever reason, to close out their short
position. There can be no assurance that a Fund will be able to close out a
short position at any particular time or at an acceptable price. In addition,
short positions may result in a loss if a portfolio strategy of which the short
position is a part is otherwise unsuccessful.

At any time that a Fund has sold a security short, it will maintain liquid
securities, in a segregated account with its custodian, in an amount that, when
combined with the amount of collateral deposited with the broker in connection
with the short sale, equals the value at the time of the securities sold short.

PRIVATE PLACEMENTS AND RESTRICTED SECURITIES. A Fund may invest in securities
that are purchased in private placements and, accordingly, are subject to
restrictions on resale as a matter of contract or under federal securities

B-19

laws. Because there may be relatively few potential purchasers for such
investments, especially under adverse market or economic conditions or in the
event of adverse changes in the financial condition of the issuer, a Fund could
find it more difficult to sell such securities when Schroders believes it
advisable to do so or may be able to sell such securities only at prices lower
than if such securities were more widely held. At times, it may also be more
difficult to determine the fair value of such securities for purposes of
computing a Fund's net asset value.

While such private placements may often offer attractive opportunities for
investment not otherwise available on the open market, the securities so
purchased are often "restricted securities," i.e., securities which cannot be
sold to the public without registration under the Securities Act of 1933 or the
availability of an exemption from registration (such as Rules 144 or 144A), or
which are "not readily marketable" because they are subject to other legal or
contractual delays in or restrictions on resale.

The absence of a trading market can make it difficult to ascertain a market
value for illiquid investments. Disposing of illiquid investments may involve
time-consuming negotiation and legal expenses, and it may be difficult or
impossible for the Funds to sell them promptly at an acceptable price. A Fund
may have to bear the extra expense of registering such securities for resale and
the risk of substantial delay in effecting such registration. Also market
quotations are less readily available. The judgment of Schroders may at times
play a greater role in valuing these securities than in the case of publicly
traded securities.

Generally speaking, restricted securities may be sold only to qualified
institutional buyers, or in a privately negotiated transaction to a limited
number of purchasers, or in limited quantities after they have been held for a
specified period of time and other conditions are met pursuant to an exemption
from registration, or in a public offering for which a registration statement is
in effect under the Securities Act of 1933. A Fund may be deemed to be an
"underwriter" for purposes of the Securities Act of 1933 when selling restricted
securities to the public, and in such event a Fund may be liable to purchasers
of such securities if the registration statement prepared by the issuer, or the
prospectus forming a part of it, is materially inaccurate or misleading. The SEC
Staff currently takes the view that any delegation by the Trustees of the
authority to determine that a restricted security is readily marketable (as
described in the investment restrictions of the Funds) must be pursuant to
written procedures established by the Trustees and the Trustees have delegated
such authority to Schroders. Schroders will consider a restricted security to be
readily marketable if it reasonably concludes that the security can be disposed
of within seven days in the ordinary course of business for a price
approximately the same as the price at which the Fund values the security,
considering factors such as the nature of the security and the market for the
security, the frequency of recent trades and quotes for such security and the
availability of information regarding prospective purchasers of such security.

TEMPORARY DEFENSIVE STRATEGIES. As described in the Prospectuses, Schroders may
at times judge that conditions in the securities markets make pursuing a Fund's
basic investment strategies inconsistent with the best interests of its
shareholders and may temporarily use alternate investment strategies primarily
designed to reduce fluctuations in the value of the Fund's assets. In
implementing these "defensive" strategies, a Fund would invest in investment
grade debt securities, cash, or money market instruments to any extent Schroders
considers consistent with such defensive strategies. It is impossible to predict
when, or for how long, a Fund will use these alternate strategies, and a Fund is
not required to use alternate strategies in any case. One risk of taking such
temporary defensive positions is that a Fund may not achieve its investment
objectives.

INVESTMENT RESTRICTIONS

As fundamental investment restrictions, which may not be changed with respect to
a Fund without approval by the holders of a majority of the outstanding voting
securities of that Fund, a Fund may not:

1. issue any class of securities which is senior to the Fund's shares of
beneficial interest, except to the extent the Fund is permitted to
borrow money or otherwise to the extent consistent with applicable law
from time to time.

B-20

Note: The Investment Company Act currently prohibits an open-end
investment company from issuing any senior securities, except to the
extent it is permitted to borrow money (see Note following restriction
2, below).

2. borrow money, except to the extent permitted by applicable law from
time to time, or purchase securities when outstanding borrowings of
money exceed 5% of the Fund's total assets;

Note: The Investment Company Act currently permits an open-end
investment company to borrow money from a bank (including by entering
into reverse repurchase agreements) so long as the ratio which the
value of the total assets of the investment company (including the
amount of any such borrowing), less the amount of all liabilities and
indebtedness (other than such borrowing) of the investment company,
bears to the amount of such borrowing is at least 300%.

3. act as underwriter of securities of other issuers except to the extent
that, in connection with the disposition of portfolio securities, it
may be deemed to be an underwriter under certain federal securities
laws;

4. (i) as to 75% of its total assets, purchase any security (other than
Government securities, as such term is defined in the 1940 Act, and
securities of other investment companies), if as a result more than 5%
of the Fund's total assets (taken at current value) would then be
invested in securities of a single issuer or the Fund would hold more
than 10% of the outstanding voting securities of such issuer, or

(ii) purchase any security (other than Government securities, as such
term is defined in the 1940 Act) if as a result 25% or more of the
Fund's total assets (taken at current value) would be invested in a
single industry;

5. make loans, except by purchase of debt obligations or other financial
instruments, by entering into repurchase agreements, or through the
lending of its portfolio securities;

6. purchase or sell commodities or commodity contracts, except that the
Fund may purchase or sell financial futures contracts, options on
financial futures contracts, and futures contracts, forward contracts,
and options with respect to foreign currencies, and may enter into swap
transactions or other financial transactions, and except in connection
with otherwise permissible options, futures, and commodity activities
as described elsewhere in the Prospectuses or this SAI from time to
time; and

7. purchase or sell real estate or interests in real estate, including
real estate mortgage loans, although the Fund may purchase and sell
securities which are secured by real estate and securities of
companies, including limited partnership interests, that invest or deal
in real estate and it may purchase interests in real estate investment
trusts. (For purposes of this restriction, investments by a Fund in
mortgage-backed securities and other securities representing interests
in mortgage pools shall not constitute the purchase or sale of real
estate or interests in real estate or real estate mortgage loans).

--------------------

It is contrary to the current policy of each of the Funds, which policy may be
changed without shareholder approval, to invest more than 15% of its net assets
in securities which are not readily marketable, including securities restricted
as to resale (other than securities restricted as to resale but determined by
the Trustees, or persons designated by the Trustees to make such determinations,
to be readily marketable).

B-21

In addition, each of the Funds may, as a matter of non-fundamental policy,
engage in short sales of securities as described in this Statement of Additional
Information from time to time and pledge up to one-third of its assets in
connection with permissible borrowings by the Fund. In addition, as a
non-fundamental policy, neither Fund will invest in other companies for the
purpose of exercising control of those companies.

All percentage limitations on investments (except the limitation with respect to
securities that are not readily marketable set forth in the preceding paragraph)
will apply at the time of investment and shall not be considered violated unless
an excess or deficiency occurs or exists immediately after and as a result of
such investment; except that, if a Fund is required by law to maintain the 300%
asset coverage ratio described above in the Note following restriction 2, and
the Fund for any reason ceases to maintain that asset coverage, it will take
steps to restore that asset coverage ratio within three days thereafter
(excluding Sundays and holidays) or such longer period as may be prescribed by
applicable regulations.

Except for the investment restrictions listed above as fundamental or to the
extent designated as such in the Prospectuses, the other investment policies
described in this SAI or in the Prospectuses are not fundamental and may be
changed by approval of the Trustees.

The 1940 Act provides that a "vote of a majority of the outstanding voting
securities" of a Fund means the affirmative vote of the lesser of (1) more than
50% of the outstanding shares of that Fund, or (2) 67% or more of the shares
present at a meeting if more than 50% of the outstanding shares are represented
at the meeting in person or by proxy.

MANAGEMENT OF THE TRUST

The Trustees of the Trust are responsible for the general oversight of the
Trust's business. Subject to such policies as the Trustees may determine,
Schroders furnishes a continuing investment program for the Funds and makes
investment decisions on its behalf. Subject to the control of the Trustees,
Schroders also manages the Funds' other affairs and business.

The names, addresses and ages of the Trustees and executive officers of the
Trust, together with information as to their principal business occupations
during the past five years, are set forth in the following tables. Unless
otherwise indicated, each Trustee and executive officer shall hold the indicated
positions until his or her resignation or removal.

DISINTERESTED TRUSTEES

The following table sets forth certain information concerning Trustees who are
not "interested persons" (as defined in the Investment Company Act) of the Trust
(each, a "Disinterested Trustee").

----------------------------------------------------------------------------------------------------------------------
NUMBER OF
TERM OF PORTFOLIOS IN
POSITION(S) OFFICE AND PRINCIPAL FUND COMPLEX
NAME, AGE AND HELD WITH LENGTH OF OCCUPATION(S) OVERSEEN BY OTHER DIRECTORSHIPS
ADDRESS OF TRUST TIME DURING PAST 5 TRUSTEE HELD BY TRUSTEE
DISINTERESTED TRUSTEE SERVED YEARS
----------------------------------------------------------------------------------------------------------------------

David N. Dinkins, 77 Trustee Indefinite Trustee of the 10 None
875 Third Avenue, 22nd Fl. Since 1994 Trust and
New York, NY 10022 Schroder Capital
Funds (Delaware);
Professor,
Columbia School
of International
and Public Affairs
----------------------------------------------------------------------------------------------------------------------

B-22

----------------------------------------------------------------------------------------------------------------------
Peter E. Guernsey, 83 Trustee Indefinite Trustee of the 9 None
875 Third Avenue, 22nd Fl. Since 1993 Trust and
New York, NY 10022 Schroder Capital
Funds (Delaware);
Retired.
Formerly, Senior
Vice President,
Marsh & McLennan,
Inc. (insurance
services).

----------------------------------------------------------------------------------------------------------------------

John I. Howell, 88 Trustee Indefinite Trustee and Lead 10 American Life
875 Third Avenue, 22nd Fl. Since 1993 Disinterested Assurance Co. of New
New York, NY 10022 Trustee of the York; United States
Trust, Schroder Life Insurance Co. of
Capital Funds the City of New York;
(Delaware) and First SunAmerica Life
Schroder Global Insurance Co.
Series Trust;
Private
Consultant,
Indian Rock
Corporation
(individual
accounting)

----------------------------------------------------------------------------------------------------------------------

Peter S. Knight, 53 Trustee Indefinite Trustee of the 9 Schroder Japan
875 Third Avenue, 22nd Fl. Since 1993 Trust, Schroder Long/Short Fund;
New York, NY 10022 Capital Funds Schroder Credit
(Delaware) and Renaissance Fund, LP;
Schroder Global Schroder Alternative
Series Trust; Strategies Fund;
President, Schroder Emerging
Generation Markets Debt
Investment Opportunity Fund;
Management US. Medicis
Formerly:
Managing
Director, MetWest
Financial
(financial
services);
President, Sage
Venture Partners
(investing); and
Partner, Wunder,
Knight, Forscey &
DeVierno (law
firm)

----------------------------------------------------------------------------------------------------------------------

William L. Means, 68 Trustee Indefinite Trustee of the 9 None
875 Third Avenue, 22nd Fl. Since 1997 Trust and
New York, NY 10022 Schroder Capital
Funds
(Delaware).
Retired.
Formerly,
Director,
Schroder Asian
Growth Fund.
----------------------------------------------------------------------------------------------------------------------

Clarence F. Michalis, 82 Trustee Indefinite Trustee of the 10 None
875 Third Avenue, 22nd Fl. Since 1993 Trust, Schroder
New York, NY 10022 Capital Funds
(Delaware) and Schroder
Global Series Trust;
Chairman of the Board
of Directors, Josiah
Macy, Jr., Foundation

----------------------------------------------------------------------------------------------------------------------

B-23

----------------------------------------------------------------------------------------------------------------------
Hermann C. Schwab, 84 Trustee Indefinite Trustee of the 9 None
875 Third Avenue, 22nd Fl. Since 1993 Trust and
New York, NY 10022 Schroder Capital
Funds
(Delaware).
Retired.
Formerly,
consultant to
Schroder Capital
Management
International,
Inc.; Trustee,
St.
Luke's/Roosevelt
Hospital Center
----------------------------------------------------------------------------------------------------------------------

James D. Vaughn, 59 Trustee Indefinite Trustee and 10 None
875 Third Avenue, 22nd Fl. Since 2003 Chairman of the
New York, New York 10022 Audit Committee
of the Trust,
Schroder Capital
Funds (Delaware)
and Schroder
Global Series
Trust. Managing
Partner
(retired),
Deloitte & Touche
USA, LLP-Denver.
----------------------------------------------------------------------------------------------------------------------

INTERESTED TRUSTEES

The following table sets forth certain information concerning Trustees who are
"interested persons" (as defined in the Investment Company Act) of the Trust
(each, an "Interested Trustee").

Peter L. Clark, 40* Trustee Indefinite Trustee and 9 None
875 Third Avenue, 22nd Fl. and Since 2003 Chairman of the
New York, NY 10022 Chairman Trust and
Schroder Capital
Funds (Delaware);
Chief Executive
Officer,
Schroders.
Formerly,
Managing Director
and Head of
Emerging Markets,
JP Morgan/JP
Morgan Investment
Management; Vice
President and
Head of
Proprietary
Trading, JP
Morgan.
----------------------------------------------------------------------------------------------------------------------

* Mr. Clark is an Interested Trustee due to his status as an officer and
employee of Schroders and its affiliates.

OFFICERS

The following table sets forth certain information concerning the Trust's
officers. The officers of the Trust are employees of organizations that provide
services to the Funds.

B-24

----------------------------------------------------------------------------------------------------------------------
NAME, AGE AND ADDRESS POSITION(S) HELD WITH TERM OF OFFICE PRINCIPAL OCCUPATION(S)
OF OFFICER TRUST AND LENGTH OF TIME SERVED DURING PAST 5 YEARS
----------------------------------------------------------------------------------------------------------------------

Peter L. Clark, 40 Trustee and Chairman Indefinite Trustee and Chairman of the Trust
875 Third Avenue, 22ndFl. Since 2003 and Schroder Capital Funds
New York, NY 10022 (Delaware); Chief Executive
Officer , Schroders. Formerly,
Managing Director and Head of
Emerging Markets, JP Morgan/JP
Morgan Investment Management; Vice
President and Head of Proprietary
Trading, JP Morgan.
----------------------------------------------------------------------------------------------------------------------

Mark A. Hemenetz, 48 President and Indefinite Chief Operating Officer, Director
875 Third Avenue, 22ndFl. Principal Executive Since May 2004 and Executive Vice President,
New York, NY 10022 Officer Schroders; Chairman and Director,
Schroder Fund Advisors Inc.;
President, Schroder Capital Funds
(Delaware) and Schroder Global
Series Trust; formerly, Executive
Vice President and Director of
Investment Management, Bank of New
York.
----------------------------------------------------------------------------------------------------------------------

Alan M. Mandel, 47 Treasurer and Chief Indefinite First Vice President, Schroders;
875 Third Avenue, 22ndFl. Financial Officer Since May 2003 Chief Operating Officer, Treasurer
New York, NY 10022 and Director, Schroder Fund
Advisors Inc.; Treasurer and Chief
Financial Officer, Schroder Global
Series Trust and Schroder Capital
Funds (Delaware).

----------------------------------------------------------------------------------------------------------------------

Barbara Brooke Manning, 57 Chief Compliance Indefinite Senior Vice President, Director
875 Third Avenue, 22nd Fl. Officer Since May 2004 and Chief Compliance Officer,
New York, NY 10022 Schroders and Schroder Fund
Advisors Inc.; Chief Compliance
Officer, Schroder Global Series
Trust and Schroder Capital Funds
(Delaware).
----------------------------------------------------------------------------------------------------------------------

Carin F. Muhlbaum, 42 Vice President and Indefinite Senior Vice President and General
875 Third Avenue, 22nd Fl. Clerk Vice President since 1998; Counsel, Schroders; Senior Vice
New York, NY 10022 Clerk since 2001 President, Secretary and General
Counsel, Schroder Fund Advisors
Inc.; Vice President and
Secretary/Clerk, Schroder Global
Series Trust and Schroder Capital
Funds (Delaware).
----------------------------------------------------------------------------------------------------------------------

CERTAIN AFFILIATIONS

The following table lists the positions held by the Trust's officers and any
Interested Trustees with affiliated persons or principal underwriters of the
Trust:

--------------------------------------------------------------------------------------------------------
POSITIONS HELD WITH
AFFILIATED PERSONS OR
PRINCIPAL UNDERWRITERS
NAME OF THE TRUST
--------------------------------------------------------------------------------------------------------

Peter L. Clark Trustee and Chairman of the Trust and Schroder
Capital Funds (Delaware); Chief Executive Officer,
Schroders; Chairman and Director, Schroder Fund
Advisors, Inc. Formerly, Managing Director and Head
of Emerging Markets, JP Morgan/JP Morgan Investment
Management; Vice President and Head of Proprietary
Trading, JP Morgan.
--------------------------------------------------------------------------------------------------------

B-25

--------------------------------------------------------------------------------------------------------
Mark A. Hemenetz President of the Trust, Schroder Capital Funds
(Delaware) and Schroder Global Series Trust; Chief
Operating Officer, Director and Executive Vice
President, Schroders; Chairman and Director,
Schroder Fund Advisors Inc.

--------------------------------------------------------------------------------------------------------
Alan M. Mandel First Vice President, Schroders; Chief Operating
Officer, Treasurer and Director, Schroder Fund
Advisors Inc.; Treasurer and Chief Financial
Officer, Schroder Global Series Trust, Schroder
Capital Funds (Delaware) and the Trust.
--------------------------------------------------------------------------------------------------------
Barbara Brooke Manning Senior Vice President, Director and Chief
Compliance Officer, Schroders and Schroder Fund
Advisors Inc.; Chief Compliance Officer, Schroder
Global Series Trust, Schroder Capital Funds
(Delaware) and the Trust.
--------------------------------------------------------------------------------------------------------
Carin F. Muhlbaum Senior Vice President and General Counsel,
Schroders; Senior Vice President, Secretary and
General Counsel, Schroder Fund Advisors Inc.; Vice
President and Secretary/Clerk, Schroder Global
Series Trust, Schroder Capital Funds (Delaware) and
the Trust.
--------------------------------------------------------------------------------------------------------

COMMITTEES OF THE BOARD OF TRUSTEES

Audit Committee. The Board of Trustees has an Audit Committee composed of all of
the Disinterested Trustees (Messrs. Dinkins, Guernsey, Howell, Knight, Means,
Michalis, Schwab and Vaughn). The Audit Committee provides oversight with
respect to the internal and external accounting and auditing procedures of the
Funds and, among other things, considers the selection of independent public
accountants for the Funds and the scope of the audit, approves all audit and
permitted non-audit services proposed to be performed by those accountants on
behalf of the Funds, and considers other services provided by those accountants
to the Funds and Schroders and their affiliates and the possible effect of those
services on the independence of those accountants. The Audit Committee met five
times during the fiscal year ended October 31, 2004.

Nominating Committee. All of the Disinterested Trustees (Messrs. Dinkins,
Guernsey, Howell, Knight, Means, Michalis, Schwab and Vaughn) serve as a
Nominating Committee of the Board responsible for reviewing and recommending
qualified candidates to the Board in the event that a position is vacated or
created. The Nominating Committee will consider nominees recommended by
shareholders if the Committee is considering other nominees at the time of the
nomination and the nominee meets the Committee's criteria. Nominee
recommendations may be submitted to the Clerk of the Trust at the Trust's
principal business address. The Nominating Committee met once during the fiscal
year ended October 31, 2004.

SECURITIES OWNERSHIP

For each Trustee, the following table discloses the dollar range of equity
securities beneficially owned by the Trustee, on an aggregate basis, in any
registered investment companies overseen by the Trustee within the Schroder
family of investment companies, as of December 31, 2003.

B-26

-------------------------------------------------------------------------------------------------------------
AGGREGATE DOLLAR
RANGE OF EQUITY
SECURITIES IN ALL
DOLLAR RANGE OF REGISTERED INVESTMENT
EQUITY COMPANIES OVERSEEN BY
SECURITIES IN THE TRUSTEE IN FAMILY OF
NAME OF TRUSTEE FUND FUND INVESTMENT COMPANIES*
-------------------------------------------------------------------------------------------------------------
Ranges: Ranges:
------- -------
None None
$1-$10,000 $1-$10,000
$10,001-$50,000 $10,001-$50,000
$50,001-$100,000 $50,001-$100,000
Over $100,000 Over $100,000

-------------------------------------------------------------------------------------------------------------
Disinterested Trustees
-------------------------------------------------------------------------------------------------------------

David N. Dinkins None
-------------------------------------------------------------------------------------------------------------
ENHANCED INCOME FUND None
-------------------------------------------------------------------------------------------------------------
U.S. CORE FIXED INCOME FUND None
-------------------------------------------------------------------------------------------------------------
Peter E. Guernsey None
-------------------------------------------------------------------------------------------------------------
ENHANCED INCOME FUND None
-------------------------------------------------------------------------------------------------------------
U.S. CORE FIXED INCOME FUND None
-------------------------------------------------------------------------------------------------------------
John I. Howell $10,001-$50,000
-------------------------------------------------------------------------------------------------------------
ENHANCED INCOME FUND None
-------------------------------------------------------------------------------------------------------------
U.S. CORE FIXED INCOME FUND None
-------------------------------------------------------------------------------------------------------------
Peter S. Knight None
-------------------------------------------------------------------------------------------------------------
ENHANCED INCOME FUND None
-------------------------------------------------------------------------------------------------------------
U.S. CORE FIXED INCOME FUND None
-------------------------------------------------------------------------------------------------------------
William L. Means $1-10,000
-------------------------------------------------------------------------------------------------------------
ENHANCED INCOME FUND None
-------------------------------------------------------------------------------------------------------------
U. S. CORE FIXED INCOME FUND None
-------------------------------------------------------------------------------------------------------------
Clarence F. Michalis Over $100,000
-------------------------------------------------------------------------------------------------------------
ENHANCED INCOME FUND None
-------------------------------------------------------------------------------------------------------------
U.S. CORE FIXED INCOME FUND None
-------------------------------------------------------------------------------------------------------------
Hermann C. Schwab None
-------------------------------------------------------------------------------------------------------------
ENHANCED INCOME FUND None
-------------------------------------------------------------------------------------------------------------
U.S. CORE FIXED INCOME FUND None
-------------------------------------------------------------------------------------------------------------
James D. Vaughn Over $100,000
-------------------------------------------------------------------------------------------------------------
ENHANCED INCOME FUND None
-------------------------------------------------------------------------------------------------------------
U.S. CORE FIXED INCOME FUND None
-------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------
Interested Trustees
-------------------------------------------------------------------------------------------------------------
Peter L. Clark None
-------------------------------------------------------------------------------------------------------------
ENHANCED INCOME FUND None
-------------------------------------------------------------------------------------------------------------
U.S. CORE FIXED INCOME FUND None
-------------------------------------------------------------------------------------------------------------

*For these purposes, the Trust, Schroder Capital Funds (Delaware), and Schroder
Global Series Trust are considered part of the same "Family of Investment
Companies."

B-27

For Disinterested Trustees and their immediate family members, the following
table provides information regarding each class of securities owned beneficially
in an investment adviser or principal underwriter of the Trust, or a person
(other than a registered investment company) directly or indirectly controlling,
controlled by, or under common control with an investment adviser or principal
underwriter of the Trust, as of December 31, 2003:

-------------------------------------------------------------------------------------------------------------
NAME OF TRUSTEE NAME OF OWNERS
AND RELATIONSHIPS VALUE OF
TO TRUSTEE COMPANY TITLE OF CLASS SECURITIES PERCENT OF CLASS
-------------------------------------------------------------------------------------------------------------

David N. Dinkins N/A N/A N/A N/A N/A
-------------------------------------------------------------------------------------------------------------
Peter E. Guernsey N/A N/A N/A N/A N/A
-------------------------------------------------------------------------------------------------------------
John I. Howell N/A N/A N/A N/A N/A
-------------------------------------------------------------------------------------------------------------
Peter S. Knight N/A N/A N/A N/A N/A
-------------------------------------------------------------------------------------------------------------
William L. Means N/A N/A N/A N/A N/A
-------------------------------------------------------------------------------------------------------------
Clarence F. Michalis N/A N/A N/A N/A N/A
-------------------------------------------------------------------------------------------------------------
Hermann C. Schwab N/A N/A N/A N/A N/A
-------------------------------------------------------------------------------------------------------------
James D. Vaughn N/A N/A N/A N/A N/A
-------------------------------------------------------------------------------------------------------------

TRUSTEES' COMPENSATION

Trustees who are not employees of Schroders or its affiliates receive an annual
retainer of $11,000 for their services as Trustees of all open-end investment
companies distributed by Schroder Fund Advisors Inc., and $1,250 per meeting
attended in person or $500 per meeting attended by telephone. Members of an
Audit Committee for one or more of such investment companies receive an
additional $1,000 per year. Payment of the annual retainer is allocated among
such investment companies based on their relative net assets. Payments of
meeting fees are allocated only among those investment companies to which the
meeting relates.

The following table sets forth approximate information regarding compensation
received by Trustees from the "Fund Complex" for the fiscal year ended October
31, 2004. (Interested Trustees who are employees of Schroders or its affiliates
and officers of the Trust receive no compensation from the Trust and are
compensated in their capacities as employees of Schroders and its affiliates).

--------------------------------------------------------------------------------------------------------------
AGGREGATE
COMPENSATION TOTAL COMPENSATION FROM TRUST AND
NAME OF TRUSTEE FROM TRUST FUND COMPLEX PAID TO TRUSTEES*
--------------------------------------------------------------------------------------------------------------

David N. Dinkins $9,023 $19,000
--------------------------------------------------------------------------------------------------------------
Peter E. Guernsey $9,498 $20,000
--------------------------------------------------------------------------------------------------------------
John I. Howell $4,415 $22,200
--------------------------------------------------------------------------------------------------------------
Peter S. Knight $4,420 $22,200
--------------------------------------------------------------------------------------------------------------
William L. Means $9,498 $20,000
--------------------------------------------------------------------------------------------------------------
Clarence F. Michalis $4,415 $22,200
--------------------------------------------------------------------------------------------------------------
Hermann C. Schwab $9,261 $19,500
--------------------------------------------------------------------------------------------------------------
James D. Vaughn $4,901 $20,647
--------------------------------------------------------------------------------------------------------------

* The Total Compensation shown in this column for each Trustee includes
compensation for services as a Trustee of the Trust, Schroder Capital Funds
(Delaware) and Schroder Global Series Trust. The Trust, Schroder Capital Funds
(Delaware) and Schroder Global Series Trust are considered part of the same
"Fund Complex" for these purposes.

B-28

The Trust's Declaration of Trust provides that the Trust will indemnify its
Trustees and officers against liabilities and expenses incurred in connection
with litigation in which they may be involved because of their offices with the
Trust, except if it is determined in the manner specified 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 or that such indemnification
would relieve any officer or Trustee of any liability to the Trust or its
shareholders by reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of his or her duties. The Trust, at its expense, provides
liability insurance for the benefit of its Trustees and officers.

SCHRODERS AND ITS AFFILIATES

Schroders serves as the investment adviser for the Funds. Schroders is a wholly
owned subsidiary of Schroder U.S. Holdings Inc., which currently engages through
its subsidiary firms in the asset management business. Affiliates of Schroder
U.S. Holdings Inc. (or their predecessors) have been investment managers since
1927. Schroder U.S. Holdings Inc. is a wholly owned subsidiary of Schroder
International Holdings, which is a wholly owned subsidiary of Schroders plc, a
publicly owned holding company organized under the laws of England. Schroders
plc and its affiliates currently engage in the asset management business, and as
of June 30, 2004, had under management assets of approximately $181 billion.
Schroders' address is 875 Third Avenue, 22nd Floor, New York, New York 10022.

Schroder Fund Advisors Inc., the Trust's principal underwriter, is a wholly
owned subsidiary of Schroder Investment Management North America Inc.

PERFORMANCE INFORMATION OF CERTAIN OTHER ACCOUNTS MANAGED BY SCHRODERS

The following table sets forth historical performance information for the
institutional investment accounts managed by Schroders that have investment
objectives, policies, strategies, and investment restrictions that are
substantially similar to those of the Schroder Enhanced Income Fund (the
"Schroders Enhanced Income Composite") and the Schroder U.S. Core Fixed Income
Fund (the "Schroders U.S. Core Fixed Income Composite," and, collectively, the
"Schroders Composites"), respectively. The Schroders Enhanced Income Composite
includes both private investment accounts and pooled investment vehicles managed
by Schroders that are not registered under the Investment Company Act and are
offered principally outside the United States ("unregistered funds").

The composite data is provided to illustrate the past performance of Schroders
in managing substantially similar accounts as measured against a specified
market index and does not represent the performance of the Funds. The
information shown below does not represent either Fund's performance, and should
not be considered a prediction of the future performance of the Schroder
Enhanced Income Fund, the Schroder U.S. Core Fixed Income Fund or of Schroders.
The Schroder Enhanced Income Fund and the Schroder U.S. Core Fixed Income Fund
are recently organized and do not yet have historical investment performance
information.

The Schroders Composites performance data shown below was calculated in
accordance with recommended standards of the CFA Institute,1 retroactively
applied to all time periods. The Schroders Enhanced Income Composite and the
Schroders U.S. Core Fixed Income Composite include all actual, fee-paying,
discretionary, institutional private accounts, including, in the case of the
Schroders Enhanced Income Composite, unregistered funds, managed by Schroders
that have investment objectives, policies, strategies, and risks substantially
similar to those of the Schroder Enhanced Income Fund and the Schroder U.S. Core
Fixed Income, respectively, and that have a minimum account size of $2 million
(accounts with assets of below $2 million are managed following a strategy
Schroders considers to be substantially different from the Fund due to their
small size).

------------------------
1 CFA Institute (formerly the Association for Investment Management and Research
(AIMR)) is a non-profit membership and education organization with more than
60,000 members worldwide that, among other things, has formulated a set of
performance presentation standards for investment advisers. These performance
presentation standards are intended to (i) promote full and fair presentations
by investment advisers of their performance results, and (ii) ensure uniformity
in reporting so that performance results of investment advisers are directly
comparable.

B-29

Each Schroders Composite assumes the reinvestment of all earnings. No leverage
has been used in the accounts included in the Schroders Composites.

A complete list and description of Schroders' composites and presentations are
available upon request by contacting (800) 464-3108, or writing Schroders, at
875 Third Avenue, 22nd Floor, New York, New York 10022.

Securities transactions are accounted for on the trade date and accrual
accounting is utilized. Cash and equivalents are included in performance
returns. The monthly returns of the Composite combine the individual accounts'
returns by asset-weighing each individual account's asset value as of the
beginning of the month. Quarterly and yearly returns are calculated by
geometrically linking the monthly and quarterly returns, respectively. The
yearly returns are computed by geometrically linking the returns of each quarter
within the calendar year. Investors should be aware that the SEC uses a
methodology different from that used below to calculate performance which, as
with the use of any methodology different from that below, could result in
different performance results.

All returns presented were calculated on a total return basis and include all
dividends and interest, accrued income, and realized and unrealized gains and
losses. The results presented below have been calculated without deduction of
investment advisory fees or other expenses of the accounts in the Schroders
Composites. Rather, the performance of such accounts has been restated by
applying the Net Expenses of the each Fund shown in the Prospectuses (0.40% per
annum for Investor Shares; 0.65% per annum for Advisor Shares) to all periods.
The Net Expenses for the Schroder Enhanced Income Fund exceed the expenses for
each of the accounts in the Schroders Enhanced Income Composite (investment
advisory fees for private accounts; total expense ratio for unregistered funds)
for all periods shown except that some, though not all, share classes offered by
unregistered funds to certain investors paid higher advisory fees and had higher
expense ratios. The Net Expenses for the Schroder U.S. Core Fixed Income Fund
exceed the investment advisory fees paid by each of the accounts in the
Schroders U.S. Core Fixed Income Composite for all periods shown.

The institutional private accounts and unregistered funds are not subject to the
diversification requirements, specific tax restrictions, and investment
limitations imposed on the Funds by the Investment Company Act or Subchapter M
of the Internal Revenue Code. As a result, the investment portfolios of the
Funds, if they had been in operation during the periods shown, would likely have
differed to some extent from those of the institution and private accounts and
the unregistered funds.

The results presented below may not necessarily equate with the return
experienced by any particular investor as a result of the timing of investments
and redemptions. In addition, the effect of taxes on any investor will depend on
such person's tax status, and the results have not been reduced to reflect any
income tax which may have been payable.

SCHRODER ENHANCED INCOME FUND - PRIOR PERFORMANCE OF SIMILAR ACCOUNTS

The table below shows the average annual total returns for the Schroders
Enhanced Income Composite (in one column, restated to reflect deduction of Net
Expenses for Investor Shares of the Enhanced Income Fund; in the other, to
reflect deduction of Net Expenses for Advisor Shares of the Enhanced Income
Fund) and a broad-based securities market index as of September 30, 2004.

----------------------------------------------------------------------------------------------------------------------
Year Schroders Enhanced Income Schroders Enhanced Income
Composite (reflecting Net Composite (reflecting Net
Expenses for Investor Expenses for Advisor 3-month US$ LIBOR (2)
Shares of the Schroder Shares of the Schroder
Enhanced Income Fund) (1) Enhanced Income Fund) (1)
----------------------------------------------------------------------------------------------------------------------

1999 4.75% 4.49% 5.41%
----------------------------------------------------------------------------------------------------------------------

B-30

----------------------------------------------------------------------------------------------------------------------
2000 7.57% 7.31% 6.53%
----------------------------------------------------------------------------------------------------------------------
2001 5.95% 5.69% 3.77%
----------------------------------------------------------------------------------------------------------------------
2002 2.85% 2.59% 1.79%
----------------------------------------------------------------------------------------------------------------------
2003 1.88% 1.63% 1.23%
----------------------------------------------------------------------------------------------------------------------
2004(3) 1.21% 1.02% 1.05%
----------------------------------------------------------------------------------------------------------------------
1 year(3) 1.67% 1.42% 1.35%
----------------------------------------------------------------------------------------------------------------------
5 years(3) 4.11% 3.85% 3.16%
----------------------------------------------------------------------------------------------------------------------
Since Inception(3) 5.21% 4.95% 4.39%
------------------------------- ---------------------------- ---------------------------- ----------------------------

(1) The "Since Inception" Date of the Schroders Enhanced Income Composite is
October 31, 1994. However, not all of the accounts included in the Schroders
Enhanced Income Composite have been in existence for the full period of that
Composite.

(2) Performance is compared to the 3-month LIBOR rate which is not managed and
does not reflect the deduction of any fees or expenses.

(3) For periods ended September 30, 2004.

SCHRODER U.S. CORE FIXED INCOME FUND - PRIOR PERFORMANCE OF SIMILAR ACCOUNTS

The table below shows the average annual total returns for the Schroders U.S.
Core Fixed Income Composite (in one column, restated to reflect deduction of Net
Expenses for Investor Shares of the Schroder U.S. Core Fixed Income Fund; in the
other, to reflect deduction of Net Expenses for Advisor Shares of the Schroder
U.S. Core Fixed Income Fund) and a broad-based securities market index as of
September 30, 2004.

----------------------------------------------------------------------------------------------------------------------
Year Schroders U.S. Core Fixed Schroders U.S. Core Fixed
Income Composite Income Composite
(reflecting Net Expenses (reflecting Net Expenses Lehman Brothers Aggregate
for Investor Shares of the for Advisor Shares of the Bond Index (2)
Schroder U.S. Core Fixed Schroder U.S. Core Fixed
Income Fund) (1) Income Fund) (1)
----------------------------------------------------------------------------------------------------------------------

1999 -0.19% -0.44% -0.83%
----------------------------------------------------------------------------------------------------------------------
2000 10.99% 10.71% 11.63%
----------------------------------------------------------------------------------------------------------------------
2001 8.70% 8.43% 8.44%
----------------------------------------------------------------------------------------------------------------------
2002 10.06% 9.79% 10.26%
----------------------------------------------------------------------------------------------------------------------
2003 5.02% 4.75% 4.10%
----------------------------------------------------------------------------------------------------------------------

B-31

----------------------------------------------------------------------------------------------------------------------
2004(3) 3.48% 3.29% 3.35%
----------------------------------------------------------------------------------------------------------------------
1 year(3) 4.21% 3.95% 3.68%
----------------------------------------------------------------------------------------------------------------------
5 years(3) 7.64% 7.38% 7.48%
----------------------------------------------------------------------------------------------------------------------
Since Inception(3) 7.90% 7.63% 8.24%
----------------------------------------------------------------------------------------------------------------------

(1) The "Since Inception" Date of the Schroders U.S. Core Fixed Income Composite
is December 31, 1985. However, not all of the accounts included in the Schroders
U.S. Core Fixed Income Composite have been in existence for the full period of
that Composite.

(2) The Lehman Brothers Aggregate Bond Index is an unmanaged index of fixed rate
investment grade securities with at least one year to maturity combining the
Lehman Brothers Government/Credit Index and the Lehman Brothers Mortgage-Backed
Securities Index. The Index does not incur expenses or reflect any deduction for
taxes and cannot be purchased directly by investors.

(3) For periods ended September 30, 2004.

MANAGEMENT CONTRACT

Management Contract. Under a Management Contract between the Trust, on behalf of
the Funds, and Schroders, Schroders, at its expense, provides each Fund with
investment advisory services and advises and assists the officers of the Trust
in taking such steps as are necessary or appropriate to carry out the decisions
of its Trustees regarding the conduct of business of the Trust and the Funds.

Under the Management Contract, Schroders is required to continuously furnish
each of the Funds with investment programs consistent with the investment
objectives and policies of each Fund, and to determine, for each Fund, what
securities shall be purchased, what securities shall be held or sold, and what
portion of each Fund's assets shall be held uninvested, subject always to the
provisions of the Trust's Declaration of Trust and By-laws, and of the
Investment Company Act, and to each Fund's investment objectives, policies, and
restrictions, and subject further to such policies and instructions as the
Trustees may from time to time establish. As compensation for services provided
to each Fund pursuant to the Management Contract, Schroders is entitled to
receive from the Trust a fee, computed and paid monthly, at the annual rate of
0.25% of each Fund's average daily net assets.

Schroders makes available to the Trust, without additional expense to the Trust,
the services of such of its directors, officers, and employees as may duly be
elected Trustees or officers of the Trust, subject to their individual consent
to serve and to any limitations imposed by law. Schroders pays the compensation
and expenses of officers and executive employees of the Trust. Schroders also
provides investment advisory research and statistical facilities and all
clerical services relating to such research, statistical, and investment work.
Schroders pays the Trust's office rent.

Under the Management Contract, the Trust is responsible for all its other
expenses, which may include clerical salaries not related to investment
activities; fees and expenses incurred in connection with membership in
investment company organizations; brokers' commissions; payment for portfolio
pricing services to a pricing agent, if any; legal expenses; auditing expenses;
accounting expenses; payments under any distribution plan; shareholder servicing
payments; taxes and governmental fees; fees and expenses of the transfer agent
and investor servicing agent of the Trust; the cost of preparing share
certificates or any other expenses, including clerical expenses, incurred in
connection with the issue, sale, underwriting, redemption, or repurchase of
shares; the expenses of and fees for registering or qualifying securities for
sale; the fees and expenses of the Trustees of the Trust who are not affiliated
with Schroders; the cost of preparing and distributing reports and notices to
shareholders; public and

B-32

investor relations expenses; and fees and disbursements of custodians of the
Funds' assets. The Trust is also responsible for its expenses incurred in
connection with litigation, proceedings, and claims and the legal obligation it
may have to indemnify its officers and Trustees with respect thereto.

The Management Contract provides that Schroders shall not be subject to any
liability for any error of judgment or mistake of law or for any loss suffered
by the Trust in connection with rendering service to the Trust in the absence of
willful misfeasance, bad faith, gross negligence, or reckless disregard of its
duties.

The Management Contract may be terminated as to each Fund without penalty by
vote of the Trustees, by the shareholders of that Fund, or by Schroders, on 60
days' written notice. The Management Contract also terminates without payment of
any penalty in the event of its assignment. In addition, the Management Contract
may be amended only by a vote of the shareholders of the affected Fund(s), and
the Management Contract provides that it will continue in effect from year to
year (after an initial two-year period) only so long as such continuance is
approved at least annually with respect to a Fund by vote of either the Trustees
or the shareholders of that Fund, and, in either case, by a majority of the
Trustees who are not "interested persons" of Schroders. In each of the foregoing
cases, the vote of the shareholders is the affirmative vote of a "majority of
the outstanding voting securities" as defined in the Investment Company Act.

Trustees' Approval of Management Contract. In determining to approve each Fund's
Management Contract with Schroders, the Trustees considered information provided
by Schroders relating to the education, experience and number of investment
professionals and other personnel providing services under each Management
Contract. For more information on these personnel of Schroders responsible for
the management of the Funds, see the Section entitled "Management of the Funds"
in the Funds' Prospectuses. The Trustees also took into account the time and
attention devoted by senior management to each Fund. The Trustees evaluated the
level of skill required to manage each Fund. The Trustees considered other
resources at Schroders to support the Funds' portfolio management team. The
Trustees also considered the business reputation of Schroders and its financial
resources.

The Trustees received information concerning the investment processes to be
applied by Schroders in managing each Fund, as disclosed in the Prospectuses,
including methods for identifying fixed income securities believed to be
mispriced relative to the market, techniques for risk management, portfolio
construction and performance attribution. The Trustees considered Schroders'
qualifications as a manager of municipal security and fixed income investment
portfolios and the proposed services to be provided to each Fund. In connection
to the investment processes to be applied by Schroders, the Trustees considered
the research capabilities, including the fixed income research capabilities, of
Schroders.

The Trustees considered the quality of the services to be provided by Schroders
to each Fund. The Trustees evaluated the records of Schroders with respect to
regulatory compliance and compliance with the investment policies of the Funds.
The Trustees also evaluated the procedures of Schroders designed to fulfill its
fiduciary duties to the Funds with respect to possible conflicts of interest,
including the Code of Ethics of Schroders (regulating the personal trading of
its officers and employees), the procedures by which Schroders allocates trades
among its various investment advisory clients and the record of Schroders in
these matters.

The Trustees also gave substantial consideration to the fees payable under the
Management Contract. The Trustees reviewed information, including information
supplied by third parties, concerning fees paid to investment advisers of
similarly-managed funds. The Trustees also received information concerning the
historical performance of other client accounts managed by Schroders utilizing
these same investment processes and the fees paid by them to Schroders. The
Trustees evaluated the expected profitability of Schroders with respect to each
Fund, concluding that such profitability was not inconsistent with levels of
profitability that had been determined by courts not to be "excessive."

Based on the foregoing, the Trustees concluded that the fees to be paid
Schroders under the Management Contract were fair and reasonable, given the
scope and quality of the services rendered by Schroders.

B-33

ADMINISTRATIVE SERVICES

On behalf of each Fund, the Trust has entered into an administration and
accounting agreement with SEI Investments Global Fund Services ("SEI"), under
which SEI provides administrative services necessary for the operation of each
Fund, including recordkeeping, preparation of shareholder communications,
assistance with regulatory compliance (such as reports to and filings with the
Securities and Exchange Commission and state securities commissions),
preparation and filing of tax returns, preparation of the Trust's periodic
financial reports, and certain other fund accounting services. Under the
agreement with SEI, the Trust, together with all mutual funds managed by
Schroders, pays fees to SEI based on the combined average daily net assets of
all of the funds in the Schroders complex, according to the following annual
rates: 0.15% on the first $300 million of such assets, and 0.12% on such assets
in excess of $300 million, subject to certain minimum charges. Each Fund pays
its pro rata portion of such expenses. The agreement is terminable with respect
to the Funds without penalty, at any time, by the Trustees upon six (6) months'
written notice to SEI or by SEI upon six (6) months' written notice to the
Trust. The agreement is terminable by either party upon a material breach by the
other party, provided that the terminating party has provided 45 days' notice of
such material breach and the specified date of termination and the breaching
party has not remedied the breach by the specified termination date.

DISTRIBUTOR

Pursuant to a Distribution Agreement with the Trust, Schroder Fund Advisors Inc.
(the "Distributor"), 875 Third Avenue, 22nd Floor, New York, New York 10022,
serves as the distributor for the Trust's continually offered shares. The
Distributor pays all of its own expenses in performing its obligations under the
Distribution Agreement. The Distributor is not obligated to sell any specific
amount of shares of any Fund. Please see "Schroders and its Affiliates" for
ownership information regarding the Distributor.

Distribution plan for Advisor Shares. Each Fund has adopted a Distribution Plan
pursuant to Rule 12b-1 under the Investment Company Act that allows the Fund to
compensate the Distributor in connection with the distribution of that Fund's
shares. Under the Plan, a Fund may make payments at an annual rate up to 0.25%
of the average daily net assets attributable to its Advisor Shares. Because the
fees are paid out of a Fund's assets on a ongoing basis, over time these fees
will increase the cost of an investment in Advisor Shares of a Fund and may cost
an investor more than paying other types of sales charges.

The Distribution Plan is a compensation plan. The various costs and expenses
that may be paid or reimbursed by amounts paid under the Distribution Plan
include advertising expenses, costs of printing prospectuses and other materials
to be given or sent to prospective investors, expenses of sales employees or
agents of the Distributor, including salary, commissions, travel and related
expenses in connection with the distribution of Advisor Shares, payments to
broker-dealers who advise shareholders regarding the purchase, sale, or
retention of Advisor Shares, and payments to banks, trust companies,
broker-dealers (other than the Distributor), or other financial organizations.

A Distribution Plan may not be amended to increase materially the amount of
payments permitted thereunder without the approval of a majority of the
outstanding Advisor Shares of the relevant Fund. Any other material amendment to
a Distribution Plan must be approved both by a majority of the Trustees and a
majority of those Trustees ("Qualified Trustees") who are not "interested
persons" (as defined in the Investment Company Act) of the Trust, and who have
no direct or indirect financial interest in the operation of the Distribution
Plan or in any related agreement, by vote cast in person at a meeting called for
the purpose. Each Distribution Plan will continue in effect for successive
one-year periods provided each such continuance is approved by a majority of the
Trustees and the Qualified Trustees by vote cast in person at a meeting called
for the purpose. Each Distribution Plan may be terminated at any time by vote of
a majority of the Qualified Trustees or by vote of a majority of the Fund's
outstanding Advisor Shares.

B-34

BROKERAGE ALLOCATION AND OTHER PRACTICES

SELECTION OF BROKERS. Schroders, in selecting brokers to effect transactions on
behalf of the Fund, seeks to obtain the best price and execution available.

ALLOCATION. Schroders may deem the purchase or sale of a security to be in the
best interest of a Fund as well as other clients of Schroders. In such cases,
Schroders may, but is under no obligation to, aggregate all such transactions in
order to obtain the most favorable price or lower brokerage commissions and
efficient execution. In such event, such transactions will be allocated among
the clients in a manner believed by Schroders to be fair and equitable and
consistent with its fiduciary obligations to each client at an average price and
commission.

OTHER PRACTICES. Schroders and its affiliates also manage private investment
companies ("hedge funds") that are marketed to, among others, existing Schroders
clients. These hedge funds may invest in the same securities as those invested
in by the Funds. The hedge funds' trading methodologies are generally different
than those of the Funds and usually include short selling and the aggressive use
of leverage.

DETERMINATION OF NET ASSET VALUE

The net asset value per share of each class of shares of each of the Funds is
determined daily as of the close of trading on the New York Stock Exchange
(normally 4:00 p.m., Eastern Time) on each day the Exchange is open for trading.

The Trustees have established procedures for the valuation of the Funds'
securities, which are summarized below.

Equities listed or traded on a domestic or foreign stock exchange for which last
sales information is regularly reported are valued at their last reported sale
prices on such exchange on that day or, in the absence of sales that day, such
securities are valued at the mean of the closing bid and ask prices ("mid-market
price") or, if none, the last sale price on the preceding trading day. (Where
the securities are traded on more than one exchange, they are valued on the
exchange on which the security is primarily traded.) Securities purchased in an
initial public offering and which have not commenced trading in a secondary
market are valued at cost. Unlisted securities for which over-the-counter market
quotations are readily available generally are valued at the most recently
reported mid-market prices. In the case of securities traded primarily on the
National Association of Securities Dealers' Automated Quotation System
("NASDAQ"), the NASDAQ Official Closing Price will, if available, be used to
value such securities as such price is reported by NASDAQ to market data
vendors.

Fixed income securities with remaining maturities of more than 60 days are
valued on the basis of valuations provided by pricing services that determine
valuations for normal institutional size trading units of fixed income
securities, or through obtaining independent quotes from market makers. Below
investment grade and emerging markets debt instruments ("high yield debt") will
ordinarily be valued at prices supplied by a Fund's pricing services based on
the mean of bid and asked prices supplied by brokers or dealers. Short-term
fixed income securities with remaining maturities of 60 days or less are valued
at amortized cost, a form of fair valuation, in accordance with procedures
established by the Trustees, unless Schroders believes another valuation is more
appropriate. Securities for which current market quotations are not readily
available are valued at fair value pursuant to procedures established by the
Trustees.

Options not traded on a securities exchange or board of trade for which
over-the-counter market quotations are readily available shall be valued at the
most recently reported mid-market price (the average of the most recently
reported bid and asked prices).

B-35

All assets and liabilities of the Schroder U.S. Core Fixed Income Fund
denominated in foreign currencies are translated into U.S. dollars based on the
mid-market price of such currencies against the U.S. dollar at the time when
last quoted.

Long-term corporate bonds and notes, certain preferred stocks, tax-exempt
securities, and certain foreign securities may be stated at fair value on the
basis of valuations furnished by pricing services, which determine valuations
for normal, institutional-size trading units of such securities using methods
based on market transactions for comparable securities (or, when such prices for
such securities are not available -- for example, on a day when bond markets are
closed -- based on other factors that may be indicative of the securities'
values).

If any securities held by a Fund are restricted as to resale, Schroders will
obtain a valuation based on the current bid for the restricted security from one
or more independent dealers or other parties reasonably familiar with the facts
and circumstances of the security. If Schroders is unable to obtain a fair
valuation for a restricted security from an independent dealer or other
independent party, a pricing committee (comprised of certain officers at
Schroders) shall determine the bid value of such security. The valuation
procedures applied in any specific instance are likely to vary from case to
case. However, consideration is generally given to the financial position of the
issuer and other fundamental analytical data relating to the investment and to
the nature of the restrictions on disposition of the securities (including any
registration expenses that might be borne by the Trust in connection with such
disposition). In addition, specific factors are also generally considered, such
as the cost of the investment, the market value of any unrestricted securities
of the same class (both at the time of purchase and at the time of valuation),
the size of the holding, the prices of any recent transactions or offers with
respect to such securities, and any available analysts' reports regarding the
issuer.

Generally, trading in certain securities (such as foreign securities) is
substantially completed each day at various times prior to the close of the New
York Stock Exchange. The values of these securities used in determining the net
asset value of a Fund's shares are computed as of such times. Also, because of
the amount of time required to collect and process trading information as to
large numbers of securities issues, the values of certain securities (such as
convertible bonds and U.S. Government securities) are determined based on market
quotations collected earlier in the day at the latest practicable time prior to
the close of the Exchange. Occasionally, events affecting the value of such
securities may occur between such times and the close of the Exchange which will
not be reflected in the computation of the Trust's net asset value. If events
materially affecting the value of such securities occur during such period, then
the Pricing Committee will consider whether it is appropriate to value these
securities at their fair value.

The proceeds received by each Fund for each issue or sale of its shares, and all
income, earnings, profits, and proceeds thereof, subject only to the rights of
creditors, will be specifically allocated to such Fund, and constitute the
underlying assets of such Fund. The underlying assets of each Fund will be
segregated on the Trust's books of account, and will be charged with the
liabilities in respect of such Fund and with a share of the general liabilities
of the Trust. Each Fund's assets will be further allocated among its constituent
classes of shares on the Trust's books of account. Expenses with respect to any
two or more funds or classes may be allocated in proportion to the net asset
values of the respective funds or classes except where allocations of direct
expenses can otherwise be fairly made to a specific fund or class. The net asset
value of a Fund's Advisor Shares will generally differ from that of its Investor
Shares due to the variance in dividends paid on each class of shares and
differences in the expenses of Advisor Shares and Investor Shares.

TAXES

This discussion provides information generally about the U.S. federal income tax
consequences of investing in the Funds, including, without limitation,
consequences for taxable U.S. and non-U.S. shareholders.

TAXATION OF THE FUNDS. Each Fund intends to qualify each year and elect to be
taxed as a "regulated investment company" (a "RIC") under Subchapter M of the
United States Internal Revenue Code of 1986, as amended (the "Code").

B-36

As RICs qualifying to have their tax liability determined under Subchapter M, a
Fund will not be subject to federal income tax on income paid to shareholders in
the form of dividends or capital gain distributions.

In order to qualify as a RIC each Fund must, among other things, (a) derive at
least 90% of its gross income from dividends, interest, payments with respect to
securities loans, gains from the sale or other disposition of stock, securities,
or foreign currencies, and other income (including gains from options, futures,
or forward contracts) derived with respect to its business of investing in such
stock, securities, or currencies; (b) diversify its holdings so that, at the
close of each quarter of its taxable year, (i) at least 50% of the value of the
Fund's total assets consists of cash, cash items, U.S. Government securities,
securities of other RICs and other securities limited generally with respect to
any one issuer to not more than 5% of the total assets of the Fund and not more
than 10% of the outstanding voting securities of such issuer, and (ii) not more
than 25% of the value of its assets is invested in the securities of any one
issuer (other than the U.S. Government or other RICs) or of two or more issuers
which such Fund controls and which are engaged in the same, similar or related
trades and businesses; and (c) distribute with respect to each taxable year at
least 90% of the sum of its taxable net investment income, its net tax-exempt
interest income, and the excess, if any, of net short-term capital gains over
net long-term capital losses for such year. Each Fund intends to make such
distributions.

If a Fund does not qualify for taxation as a RIC for any taxable year, the
Fund's taxable income will be subject to corporate income taxes, and all
distributions from earnings and profits, including distributions of net
tax-exempt income and net long-term capital gains (if any), will be taxable to
shareholders as ordinary income. In addition, in order to requalify for taxation
as a RIC, the Fund may be required to recognize unrealized gains, pay
substantial taxes and interest, and make certain distributions.

If a Fund fails to distribute in a calendar year substantially all of its
ordinary income for such year and substantially all of its capital gain net
income for the one-year period ending October 31 (or later if that Fund is
permitted so to elect and so elects), plus any retained amount from the prior
years (to the extent not previously subject to tax under subchapter M), the Fund
will be subject to a 4% excise tax on the under-distributed amounts. A dividend
paid to shareholders by a Fund in January of a year generally is deemed to have
been paid by that Fund on December 31 of the preceding year, if the dividend was
declared and payable to shareholders of record on a date in October, November,
or December of that preceding year. Each Fund intends generally to make
distributions sufficient to avoid imposition of the 4% excise tax.

TAXABLE DISTRIBUTIONS. For federal income tax purposes, distributions of
investment income (other than exempt-interest dividends, as described below) are
taxed as ordinary income. Taxes on distributions of capital gains are determined
by how long your Fund owned the investments that generated the gains, rather
than how long you owned your shares. Distributions of net capital gains from the
sale of investments that a Fund has held for more than one year and that are
properly designated by the Fund as capital gain dividends will be taxable as
long-term capital gains. Distributions of gains from the sale of investments
that a Fund owned for one year or less will be taxable as ordinary income.
Generally, gains realized by the Funds on the sale or exchange of investments,
the income from which is tax exempt, will be taxable to shareholders. For
taxable years beginning on or before December 31, 2008, distributions of
investment income designated by the Funds as derived from "qualified dividend
income" will be taxed in the hands of individual shareholders at the rates
applicable to long-term capital gain, provided holding period and other
requirements are met at both the shareholder and Fund level. The Funds do not
expect a significant portion of Fund distributions to be derived from qualified
dividend income.

Distributions are taxable to shareholders even if they are paid from income or
gains earned by the Funds before a shareholder's investment (and thus were
included in the price the shareholder paid). Distributions are taxable whether
shareholders receive them in cash or reinvest them in additional shares.

Long-term capital gain rains applicable to individuals have been temporarily
reduced - in general, to 15% with lower rates applying to taxpayers in the 10%
and 15% rate brackets - for taxable years beginning on or before December 31,
2008.

B-37

TRANSACTIONS IN FUND SHARES. Any gain resulting from a redemption, exchange
(including an exchange for shares of another fund) of shares in a Fund will
generally be subject to federal income tax at either short-term or long-term
capital gain rates, depending on how long a shareholder has owned his or her
shares. Any loss realized upon the redemption of shares held for six months or
less at the time of redemption will be treated as a long-term capital loss to
the extent of any amounts treated as distributions of long-term capital gain
during such six-month period. Furthermore, any loss from the sale or redemption
of shares held six months or less generally will be disallowed to the extent
that tax-exempt interest dividends were paid on such shares.

FOREIGN INVESTMENTS. With respect to investment income and gains received by a
Fund from sources outside the United States, such income and gains may be
subject to foreign taxes which are withheld at the source. The effective rate of
foreign taxes to which a Fund will be subject depends on the specific countries
in which its assets will be invested and the extent of the assets invested in
each such country and, therefore, cannot be determined in advance. In addition,
a Fund's investments in foreign securities may increase or accelerate a Fund's
recognition of ordinary income or loss and may affect the timing or amount of a
Fund's distributions, including in situations where such distributions may
economically represent a return of a particular shareholder's investment.
Investments, if any, in "passive foreign investment companies" could subject a
Fund to U.S. federal income tax or other charges on certain distributions from
such companies and on disposition of investments in such companies; however, the
tax effects of such investments may be mitigated by making an election to mark
such investments to market annually or treat the passive foreign investment
company as a "qualified electing fund."

Because it is not anticipated that more than 50% of the value of a Fund's total
assets at the close of its taxable year will consist of stocks or securities of
foreign corporations, a Fund will not be able to elect to permit its
shareholders to claim a credit or deduction on their income tax returns for
taxes paid by the Fund to foreign countries.

HEDGING TRANSACTIONS. If a Fund engages in hedging transactions, including
hedging transactions in options, forward or futures contracts, and straddles, or
other similar transactions, they will be subject to special tax rules (including
constructive sale, mark-to-market, straddle, wash sale, and short sale rules),
the effect of which may be to accelerate income to the Fund, defer losses to the
Fund, cause adjustments in the holding periods of the Fund's securities, convert
long-term capital gain into short-term capital gain, or convert short-term
capital losses into long-term capital losses. These rules could therefore affect
the amount, timing and character of distributions to shareholders. Each Fund
will endeavor to make any available elections pertaining to such transactions in
a manner believed to be in the best interests of the Fund.

SECURITIES ISSUED OR PURCHASED AT A DISCOUNT. A Fund's investments, if any, in
securities issued at a discount (for example, zero-coupon bonds) and certain
other obligations will (and investments in securities purchased at a discount
may) require the Fund to accrue and distribute income not yet received. In order
to generate sufficient cash to make the requisite distributions, a Fund may be
required to sell securities that it otherwise would have continued to hold.

BACKUP WITHHOLDING. A Fund is generally required to withhold a percentage of
certain of your dividends and other distributions if you have not provided the
Fund with your correct taxpayer identification number (normally your Social
Security number), or if you are otherwise subject to backup withholding. The
backup withholding tax rate is 28% for amounts paid through 2010. The backup
withholding tax rate will be 31% for amounts paid after December 31, 2010.

TAX SHELTER REPORTING REGULATIONS. Under recently promulgated Treasury
regulations, if a shareholder recognizes a loss with respect to a Fund's shares
of $2 million or more for an individual shareholder or $10 million or more for a
corporate shareholder, the shareholder must file with the Internal Revenue
Service a disclosure statement on Form 8886. Direct shareholders of portfolio
securities are in many cases excepted from this reporting requirement, but under
current guidance, shareholders of a RIC are not excepted. Future guidance may
extend the current exception from this reporting requirement to shareholders of
most or all regulated investment companies. The fact that a loss is reportable
under these regulations does not affect the legal determination of whether the
taxpayer's treatment of the loss is proper. Shareholders should consult their
tax advisors to determine the applicability of these regulations in light of
their individual circumstances.

B-38

The foregoing discussion is primarily a summary of certain federal income tax
consequences of investing in a Fund, based on the law as of the date of this
SAI. The discussion does not address special tax rules applicable to certain
classes of investors, such as, among others, IRAs and other retirement plans,
tax-exempt entities, foreign investors, insurance companies, financial
institutions and investors making in-kind contributions to a Fund. You should
consult your tax advisor for more information about your own tax situation,
including possible other federal, state, local, and, where applicable, foreign
tax consequences of investing in a Fund.

PRINCIPAL HOLDERS OF SECURITIES

As of the date of this Statement of Additional Information, no person owned of
record, or is known by the Trust to have owned beneficially, 5% or more of the
outstanding shares of either class of either Fund. It is expected that an
affiliate of Schroders will make an investment in each Fund and will likely
control each Fund for a period after its initial offering.

As of the date of this Statement of Additional Information, the Trustees of the
Trust and the officers of the Trust, as a group, owned none of the outstanding
shares of either class of either Fund.

CUSTODIAN

J.P. Morgan Chase Bank, 270 Park Avenue, New York, New York 10017, is the
custodian of the assets of the Funds. The custodian's responsibilities include
safeguarding and controlling each Fund's cash and securities, handling the
receipt and delivery of securities, and collecting interest and dividends on
each Fund's investments. The custodian does not determine the investment
policies of a Fund or decide which securities a Fund will buy or sell.

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

Boston Financial Data Services, Inc., Two Heritage Drive, Quincy, Massachusetts
02171, is the Trust's registrar, transfer agent and dividend disbursing agent.

INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS

PricewaterhouseCoopers LLP, the Trust's independent registered public accounting
firm, provide audit services, and tax return preparation services. Their address
is Two Commerce Square, Suite 1700, 2001 Market Street, Philadelphia,
Pennsylvania 19103.

CODE OF ETHICS

The Trust, Schroders, and Schroder Fund Advisors Inc., the Trust's distributor,
have each adopted a combined Code of Ethics and SIMNA Ltd. has adopted a Code of
Ethics, pursuant to the requirements of Rule 17j-1 of the Investment Company
Act. Subject to certain restrictions, these Codes of Ethics permit personnel
subject to the Code to invest in securities, including securities that may be
purchased or held by a Fund. The Codes of Ethics have been filed as exhibits to
the Trust's Registration Statement.

PROXY VOTING POLICIES AND PROCEDURES

The Trust has delegated authority and responsibility to vote any proxies
relating to voting securities held by a Fund to Schroders, which intends to vote
such proxies in accordance with its proxy voting policies and procedures. A copy
of Schroders' proxy voting policies and procedures is attached as Appendix B to
this SAI.

B-39

LEGAL COUNSEL

Ropes & Gray LLP, One International Place, Boston, Massachusetts 02110-2624,
serves as counsel to the Trust.

SHAREHOLDER LIABILITY

Under Massachusetts law, shareholders could, under certain circumstances, be
held personally liable for the obligations of the Trust. However, the Trust's
Declaration of Trust disclaims shareholder liability for acts or obligations of
the Trust and requires that notice of such disclaimer be given in each
agreement, obligation, or instrument entered into or executed by the Trust or
the Trustees. The Trust's Declaration of Trust provides for indemnification out
of a Fund's property for all loss and expense of any shareholder held personally
liable for the obligations of a Fund. Thus the risk of a shareholder's incurring
financial loss on account of shareholder liability is limited to circumstances
in which a Fund would be unable to meet its obligations.

FINANCIAL STATEMENTS

As neither Fund has commenced operations, financial statements for the Funds are
unavailable.

B-40

APPENDIX A
----------

FIXED INCOME AND COMMERCIAL PAPER RATINGS

MOODY'S INVESTORS SERVICE INC. ("MOODY'S")

FIXED-INCOME SECURITY RATINGS

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

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

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

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

Fixed-income securities rated "Aaa", "Aa", "A" and "Baa" are considered
investment grade.

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

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

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

"Ca" Fixed-income securities which are rated "Ca" present obligations which are
speculative in a high degree. Such issues are often in default or have other
marked shortcomings.

"C" Fixed-income securities which are rated "C" are the lowest rated class of
fixed-income securities, and issues so rated can be regarded as having extremely
poor prospects of ever attaining any real investment standing.

B-41

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

COMMERCIAL PAPER RATINGS

Moody's Commercial Paper ratings are opinions of the ability to repay punctually
promissory obligations not having an original maturity in excess of nine months.
The ratings apply to Municipal Commercial Paper as well as taxable Commercial
Paper. Moody's employs the following three designations, all judged to be
investment grade, to indicate the relative repayment capacity of rated issuers:
"Prime-1", "Prime-2", "Prime-3".

Issuers rated "Prime-1" have a superior capacity for repayment of short-term
promissory obligations. Issuers rated "Prime-2" have a strong capacity for
repayment of short-term promissory obligations; and Issuers rated "Prime-3" have
an acceptable capacity for repayment of short-term promissory obligations.
Issuers rated "Not Prime" do not fall within any of the Prime rating categories.

STANDARD & POOR'S RATING SERVICES ("STANDARD & POOR'S")

FIXED-INCOME SECURITY RATINGS

A Standard & Poor's fixed-income security rating is a current assessment of the
creditworthiness of an obligor with respect to a specific obligation. This
assessment may take into consideration obligors such as guarantors, insurers, or
lessees.

The ratings are based on current information furnished by the issuer or obtained
by Standard & Poor's from other sources it considers reliable. The ratings are
based, in varying degrees, on the following considerations: (1) likelihood of
default-capacity and willingness of the obligor as to the timely payment of
interest and repayment of principal in accordance with the terms of the
obligation; (2) nature of and provisions of the obligation; and (3) protection
afforded by, and relative position of, the obligation in the event of
bankruptcy, reorganization or other arrangement under the laws of bankruptcy and
other laws affecting creditors' rights.

Standard & Poor's does not perform an audit in connection with any rating and
may, on occasion, rely on unaudited financial information. The ratings may be
changed, suspended or withdrawn as a result of changes in, or unavailability of,
such information, or for other reasons.

"AAA" Fixed-income securities rated "AAA" have the highest rating assigned by
Standard & Poor's. Capacity to pay interest and repay principal is extremely
strong.

"AA" Fixed-income securities rated "AA" have a very strong capacity to pay
interest and repay principal and differs from the highest-rated issues only in
small degree.

"A" Fixed-income securities rated "A" have a strong capacity to pay interest and
repay principal although they are somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than fixed-income
securities in higher-rated categories.

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

B-42

Fixed-income securities rated "AAA", "AA", "A" and "BBB" are considered
investment grade.

"BB" Fixed-income securities rated "BB" have less near-term vulnerability to
default than other speculative grade fixed-income securities. However, it faces
major ongoing uncertainties or exposure to adverse business, financial or
economic conditions which could lead to inadequate capacity or willingness to
pay interest and repay principal.

"B" Fixed-income securities rated "B" have a greater vulnerability to default
but presently have the capacity to meet interest payments and principal
repayments. Adverse business, financial or economic conditions would likely
impair capacity or willingness to pay interest and repay principal.

"CCC" Fixed-income securities rated "CCC" have a current identifiable
vulnerability to default, and the obligor is dependent upon favorable business,
financial and economic conditions to meet timely payments of interest and
repayments of principal. In the event of adverse business, financial or economic
conditions, it is not likely to have the capacity to pay interest and repay
principal.

"CC" The rating "CC" is typically applied to fixed-income securities
subordinated to senior debt which is assigned an actual or implied "CCC" rating.

"C" The rating "C" is typically applied to fixed-income securities subordinated
to senior debt which is assigned an actual or implied "CCC-" rating.

"CI" The rating "CI" is reserved for fixed-income securities on which no
interest is being paid.

"NR" Indicates that no rating has been requested, that there is insufficient
information on which to base a rating or that Standard & Poor's does not rate a
particular type of obligation as a matter of policy.

Fixed-income securities rated "BB", "B", "CCC", "CC" and "C" are regarded as
having predominantly speculative characteristics with respect to capacity to pay
interest and repay principal. "BB" indicates the least degree of speculation and
"C" the highest degree of speculation. While such fixed-income securities will
likely have some quality and protective characteristics, these are out-weighed
by large uncertainties or major risk exposures to adverse conditions.

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

COMMERCIAL PAPER RATINGS

Standard & Poor's commercial paper rating is a current assessment of the
likelihood of timely payment of debt having an original maturity of no more than
365 days. The commercial paper rating is not a recommendation to purchase or
sell a security. The ratings are based upon current information furnished by the
issuer or obtained by Standard & Poor's from other sources it considers
reliable. The ratings may be changed, suspended, or withdrawn as a result of
changes in or unavailability of such information. Ratings are graded into group
categories, ranging from "A" for the highest quality obligations to "D" for the
lowest. Ratings are applicable to both taxable and tax-exempt commercial paper.

Issues assigned "A" ratings are regarded as having the greatest capacity for
timely payment. Issues in this category are further refined with the designation
"1", "2", and "3" to indicate the relative degree of safety.

"A-1" Indicates that the degree of safety regarding timely payment is very
strong.

"A-2" Indicates capacity for timely payment on issues with this designation is
strong. However, the relative degree of safety is not as overwhelming as for
issues designated "A-1".

B-43

"A-3" Indicates a satisfactory capacity for timely payment. Obligations carrying
this designation are, however, somewhat more vulnerable to the adverse effects
of changes in circumstances than obligations carrying the higher designations.

FITCH INVESTORS SERVICE, INC. ("FITCH")

FIXED INCOME SECURITY RATINGS

Investment Grade

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

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

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

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

High Yield Grade

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

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

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

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

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

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

B-44

Plus (+) or Minus (-): The ratings from AA to C may be modified by the addition
of a plus or minus sign to indicate the relative position of a credit within the
rating category.

NR: Indicates that Fitch does not rate the specific issue.

Conditional: A conditional rating is premised on the successful completion of a
project or the occurrence of a specific event.

Short-Term Ratings

Fitch's short-term ratings apply to debt obligations that are payable on demand
or have original maturities of generally up to three years, including commercial
paper, certificates of deposit, medium-term notes, and municipal and investment
notes.

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 the
"F-1+" and "F-1 " categories.

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.

DUFF & PHELPS

FIXED INCOME SECURITIES

Investment Grade

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

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

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

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

High Yield Grade

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

B-45

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

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

Preferred stocks are rated on the same scale as bonds but the preferred rating
gives weight to its more junior position in the capital structure. Structured
financings are also rated on this scale.

CERTIFICATES OF DEPOSIT RATINGS

Category 1: Top Grade

Duff 1 plus: Highest certainty of timely payment. Short-term liquidity including
internal operating factors and/or ready access to alternative sources of funds,
is outstanding, and safety is just below risk-free US 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 minus: High certainty of timely payment. Liquidity factors are strong and
supported by good Fundamental protection factors. Risk factors are very small.

Category 2: 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.

Category 3: 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.

No ratings are issued for companies whose paper is not deemed to be of
investment grade.

B-46

APPENDIX B
----------

SCHRODER INVESTMENT MANAGEMENT NORTH AMERICA
POLICY RELATING TO IDENTIFYING AND ACTING UPON CONFLICTS
OF INTEREST IN CONNECTION WITH ITS PROXY VOTING OBLIGATIONS

This document sets forth Schroder Investment Management North America Inc.'s
("Schroders") policy with respect to proxy voting and its procedures to comply
with Rule 206(4)-6 under the Investment Advisers Act of 1940 and Rule 30b1-4
under the Investment Company Act of 1940. Specifically, Rule 206(4)-6 requires
that Schroders:

o Adopt and implement written policies and procedures reasonably designed to
ensure that proxies are voted in the best interest of clients and

o Disclose its proxy voting policies and procedures to clients and inform
them how they may obtain information about how Schroders voted proxies.

Rule 30b1-4 requires that the Schroder US Mutual Funds (the "Funds"):

o Disclose their proxy voting policies and procedures in their registration
statements and

o Annually, file with the SEC and make available to shareholders their actual
proxy voting.

1. Proxy Voting General Principles

o Schroders will evaluate and usually vote for or against all proxy requests
relating to securities held in any account managed by Schroders (unless
this responsibility has been retained by the client).

Proxies will be treated and evaluated with the same attention and investment
skill as the trading of securities in the accounts.

Proxies will be voted in a manner which is deemed most likely to protect and
enhance the longer term value of the security as an asset to the account.

PROXY COMMITTEE

The Proxy Committee consists of investment professionals and other officers and
is responsible for ensuring compliance with this proxy voting policy. The
Committee meets quarterly to review proxies voted, policy guidelines and to
examine any issues raised, including a review of any votes cast in connection
with controversial issues.

The procedure for evaluating proxy requests is as follows:

Schroders' Global Corporate Governance Team (the "Team") is responsible for the
initial evaluation of the proxy request, for seeking advice where necessary,
especially from the US small cap and mid cap product heads, and for consulting
with portfolio managers who have invested in the company should a controversial
issue arise.

When making proxy-voting decisions, Schroders generally adheres to the Global
Corporate Governance Policy (the "Policy"), as revised from time to time. The
Policy, which has been developed by Schroders' Global Corporate

B-47

Governance Team and approved by the Schroders Proxy Committee, sets forth
Schroders' positions on recurring issues and criteria for addressing
non-recurring issues. The Policy is a part of these procedures and is
incorporated herein by reference. The Proxy Committee exercises oversight to
assure that proxies are voted in accordance with the Policy and that any votes
inconsistent with the Policy or against management are appropriately documented.

Schroders uses Institutional Shareholder Services, Inc. ("ISS") to assist in
voting proxies. ISS provides proxy research, voting and vote-reporting services.
ISS's primary function with respect to Schroders is to apprise the Group of
shareholder meeting dates of all securities holdings, translate proxy materials
received from companies, provide associated research and provide considerations
and recommendations for voting on particular proxy proposals. Although Schroders
may consider ISS' and others' recommendations on proxy issues, Schroders bears
ultimate responsibility for proxy voting decisions.

Schroders may also consider the recommendations and research of other providers,
including the National Association of Pension Funds' Voting Issues Service.

CONFLICTS

From time to time, proxy voting proposals may raise conflicts between the
interests of Schroders' clients and the interests of Schroders and/or its
employees. Schroders is adopting this policy and procedures to ensure that
decisions to vote the proxies are based on the clients' best interests.

For example, conflicts of interest may arise when:

o Proxy votes regarding non-routine matters are solicited by an issuer that,
directly or indirectly, has a client relationship with Schroders;

o A proponent of a proxy proposal has a client relationship with Schroders;

o A proponent of a proxy proposal has a business relationship with Schroders;

o Schroders has business relationships with participants in proxy contests,
corporate directors or director candidates;

The Team is responsible for identifying proxy voting proposals that may present
a material conflict of interest. If Schroders receives a proxy relating to an
issuer that raises a conflict of interest, the Team shall determine whether the
conflict is "material" to any specific proposal included within the proxy. The
Team will determine whether a proposal is material as follows:

o Routine Proxy Proposals: Proxy proposals that are "routine" shall be
presumed not to involve a material conflict of interest unless the Team has
actual knowledge that a routine proposal should be treated as material. For
this purpose, "routine" proposals would typically include matters such as
uncontested election of directors, meeting formalities, and approval of an
annual report/financial statements.

o Non-Routine Proxy Proposals: Proxy proposals that are "non-routine" will be
presumed to involve a material conflict of interest, unless the Team
determines that neither Schroders nor its personnel have a conflict of
interest or the conflict is unrelated to the proposal in question. For this
purpose, "non-routine" proposals would typically include any contested
matter, including a contested election of directors, a merger or sale of
substantial assets, a change in the articles of incorporation that
materially affects the rights of shareholders, and compensation matters for
management (e.g., stock, option plans, retirement plans, profit-sharing or
other special remuneration plans). If the Team determines that there is, or
may be perceived to be, a conflict of interest when voting a proxy,
Schroders will address matters involving such conflicts of interest as
follows:

A. if a proposal is addressed by the Policy, Schroders will vote in
accordance with such Policy;

B-48

B. if Schroders believes it is in the best interests of clients to
depart from the Policy, Schroders will be subject to the requirements of C or D
below, as applicable;

C. if the proxy proposal is (1) not addressed by the Policy or (2)
requires a case-by-case determination, Schroders may vote such proxy as it
determines to be in the best interest of clients, without taking any action
described in D below, provided that such vote would be against Schroders' own
interest in the matter (i.e., against the perceived or actual conflict). The
rationale of such vote will be memorialized in writing; and

D. if the proxy proposal is (1) not addressed by the Policy or (2)
requires a case-by-case determination, and Schroders believes it should vote in
a way that may also benefit, or be perceived to benefit, its own interest, then
Schroders must take one of the following actions in voting such proxy: (a) vote
in accordance with ISS' recommendation; (b) inform the client(s) of the conflict
of interest and obtain consent to vote the proxy as recommended by Schroders; or
(c) obtain approval of the decision from the Chief Compliance Officer and the
Chief Investment Officer. The rationale of such vote will be memorialized in
writing.

RECORD OF PROXY VOTING

The Team will maintain, or have available, written or electronic copies of each
proxy statement received and of each executed proxy.

The Team will also maintain records relating to each proxy, including (i) the
voting decision with regard to each proxy; and (ii) any documents created by the
Team and/or the Proxy Committee, or others, that were material to making the
voting decision; (iii) any decisions of the Chief Compliance Officer and the
Chief Investment Officer.

Schroders will maintain a record of each written request from a client for proxy
voting information and its written response to any request (oral or written)
from any client for proxy voting information.

Such records will be maintained for six years and may be retained
electronically.

Additional Reports and Disclosures for the Schroder Funds

The Fund must disclose its policies and procedures for voting proxies in their
Statement of Additional Information. In addition to the records required to be
maintained by Schroders, the following information will be made available to the
Fund or its agent to enable the Fund to file Form N-PX under Rule 30b1-4:

For each matter on which a fund is entitled to vote:

o Name of the issuer of the security;

o Exchange ticker symbol;

o CUSIP number, if available;

o Shareholder meeting date;

o Brief summary of the matter voted upon;

o Source of the proposal, i.e., issuer or shareholder;

o Whether the fund voted on the matter;

o How the fund voted; and

B-49

o Whether the fund voted with or against management.

Further, the Fund is required to make available to shareholders the Fund's
actual proxy voting record. If requested, the most recently filed Form N-PX must
be sent within three (3) days of receipt of the request.

July 30, 2003