kl10043.htm

E.I.I. REALTY SECURITIES TRUST

E.I.I. Realty Securities Fund

E.I.I. International Property Fund

E.I.I. Global Property Fund

STATEMENT OF ADDITIONAL INFORMATION

November 1, 2007

This Statement of Additional Information (“SAI”) is not a prospectus. This SAI is incorporated by reference in its entirety in the prospectus dated November 1, 2007 for the E.I.I. Realty Securities Fund (the “Domestic Fund”), the E.I.I. International Property Fund (the “International Fund”), and the E.I.I. Global Property Fund (the “Global Fund”), as amended from time to time, and should be read in conjunction with that prospectus, copies of which may be obtained by writing E.I.I. Realty Securities Trust c/o PFPC Inc., P.O. Box 9822, Providence, Rhode Island 02940 or calling toll-free 800-667-0794. In this SAI, each of the Domestic, International and Global Funds is referred to as a “Fund.”

The audited financial statements for the fiscal year ended June 30, 2007 for the Domestic, International and Global Funds are incorporated in this SAI by reference to these Funds’ 2007 annual report to shareholders (File No. 811-08649). You may obtain a copy of these Funds’ latest annual report at no charge by writing to the address or calling the phone number noted above.

TABLE OF CONTENTS

Page

INVESTMENT POLICIES AND RISKS	2
INVESTMENT RESTRICTIONS	3
PORTFOLIO SECURITIES AND INVESTMENT PRACTICES	4
MANAGEMENT	10
ADVISER AND INVESTMENT ADVISORY AGREEMENT	14
ADMINISTRATIVE SERVICES AGREEMENT	18
PORTFOLIO TRANSACTIONS AND BROKERAGE	19
DISCLOSURE OF PORTFOLIO HOLDINGS	20
PORTFOLIO TURNOVER	21
ALLOCATION OF INVESTMENTS	21
COMPUTATION OF NET ASSET VALUE	22
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION	22
TAX MATTERS	23
PERFORMANCE CALCULATION	29
GENERAL INFORMATION	31
REPORTS	32
FINANCIAL STATEMENTS	32
PROXY VOTING SUMMARY	32
APPENDIX	34

Each Fund is a non-diversified series of the E.I.I. Realty Securities Trust, a Delaware statutory trust (the “Trust”), which is an open-end managed investment company commonly known as a mutual fund. Each Fund seeks to achieve its investment objective by investing primarily in companies whose business is to own, operate, develop and manage real estate. Much of the information contained in this SAI expands on subjects discussed in the prospectus. Capitalized terms not defined herein are used as defined in the prospectus. No investment in shares of a Fund should be made without first reading the prospectus.

INVESTMENT POLICIES AND RISKS

The following descriptions supplement the investment policies of the Funds as set forth in the prospectus. The Funds’ investments in the following securities and other financial instruments are subject to the investment policies and limitations described in the prospectus and this SAI.

Borrowing

Each Fund may, from time to time, borrow money to the maximum extent permitted by the Investment Company Act of 1940, as amended (the “1940 Act”), from banks at prevailing interest rates for temporary or emergency purposes (for example in order to meet redemptions), and to invest in additional securities. Each Fund’s borrowings are limited so that immediately after such borrowings the value of assets (including borrowings) less liabilities (not including borrowings) is at least three times the amount of the borrowings. Should a Fund, for any reason, have borrowings that do not meet the above test, within three business days, the Fund must reduce such borrowings so as to meet the necessary test. Under such a circumstance, the Fund may have to liquidate portfolio securities at a time when it is disadvantageous to do so. Gains made with additional funds borrowed generally will cause a Fund’s net asset value per share (“NAV”) to rise faster than could be the case without borrowings. Conversely, if investment results fail to cover the cost of borrowings, a Fund’s NAV could decrease faster than if there had been no borrowings.

Typically, each Fund borrows by entering into reverse repurchase agreements with banks, brokers, or dealers.

Repurchase Agreements

Each Fund may enter into repurchase agreements subject to resale to a bank or dealer at an agreed upon price which reflects a net interest gain for the Fund. A Fund will receive interest from the institution until the time the repurchase is to occur.

A Fund will always receive as collateral U.S. government or short-term money market securities whose market value is equal to at least 100% of the amount invested by the Fund, and the Fund will make payment for such securities only upon the physical delivery or evidence by book entry transfer to the account of its custodian. If the seller institution defaults, the Fund might incur a loss or delay in the realization of proceeds if the value of the collateral securing the repurchase agreement declines and it might incur disposition costs in liquidating the collateral. Each Fund will attempt to minimize such risks by entering into such transactions only with well-capitalized financial institutions and specifying the required value of the underlying collateral.

* * *

Unlike each Fund’s investment objective and the investment restrictions set forth below, which are fundamental and which may not be changed without shareholder approval, each Fund has the right to modify its investment policies without shareholder approval.

The Funds’ principal investment strategies are discussed in the prospectus.

INVESTMENT RESTRICTIONS

Fundamental Restrictions

The following fundamental investment restrictions have been adopted by each Fund and, except as noted, cannot be changed with respect to a Fund without approval by the vote of a majority of the outstanding voting shares of the Fund which, as defined by the 1940 Act, means the affirmative vote of the lesser of: (a) 67% or more of the shares of the Fund present at a meeting at which the holders of more than 50% of the outstanding shares of the Fund are represented in person or by proxy; or (b) more than 50% of the outstanding shares of the Fund.

No Fund may:

(1) issue senior securities, except that the Fund may borrow money from banks;

(2) concentrate its investments in particular industries other than the real estate industry. No Fund will invest more than 25% of the value of its assets in any one industry other than the real estate industry. Each Fund will concentrate its investments in the real estate industry;

(3) make loans of money or securities other than: (a) through the purchase of publicly distributed bonds, debentures, or other corporate or governmental obligations; (b) by investing in repurchase agreements; and (c) by lending its portfolio securities, provided the value of such loaned securities does not exceed 33-1/3% of its total assets;

(4) borrow money in excess of 33-1/3% of the value of its total assets from banks;

(5) buy or sell commodities or commodity contracts, except that each Fund may purchase or sell futures or options on futures; or

(6) underwrite securities.

Non-Fundamental Restrictions

The following restrictions are non-fundamental and may be changed by the Trust’s Board of Trustees (the “Board”). Pursuant to such restrictions, no Fund will:

(1) make short sales of securities, other than short sales “against the box,” or purchase securities on margin except for short-term credits necessary for clearance of portfolio transactions, provided that this restriction will not be applied to limit the use of options, futures contracts, and related options, in the manner otherwise permitted by the investment restrictions, policies, and investment program of the Fund;

(2) purchase the securities of any other investment company, if the Fund, immediately after such purchase or acquisition, owns in the aggregate: (i) more than 3% of the total outstanding voting stock of such investment company; (ii) securities issued by such investment company having an aggregate value in excess of 5% of the value of the total assets of the Fund; (iii) securities issued by such investment company and all other investment companies having an aggregate value in excess of 10% of the value of the total assets of the Fund; or (iv) unless the 100% of the total assets of the Fund are invested in the securities of another investment company with the same investment objective; or

(3) invest more than 10% of its net assets in illiquid securities. Illiquid securities are securities that are not readily marketable or cannot be disposed of promptly within seven days and in the usual course of business without taking a materially reduced price. Such securities include, but are not limited to, time deposits and repurchase agreements with maturities longer than seven days. Securities that may be resold under Rule 144A or securities offered pursuant to Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), shall not be deemed illiquid solely by reason of being unregistered. E.I.I. Realty Securities, Inc., each Fund’s investment adviser (“E.I.I.” or the “Adviser”), shall determine whether a particular security is deemed to be liquid based on the trading markets for the specific security and other factors.

In addition, the Domestic Fund may not invest more than 20% of its total assets in securities of foreign issuers (American Depository Receipts are not considered to be foreign securities for this purpose).

General

Whenever any investment policy or restriction states a minimum or maximum percentage of a Fund’s assets that may be invested in any security or other asset, it is intended that such minimum or maximum percentage limitation be determined immediately after and as a result of the Fund’s acquisition of such security or other asset. Accordingly, any later increase or decrease in percentage beyond the specified limitations resulting from a change in values or net assets will not be considered a violation of this percentage limitation. In the event that the aggregate of restricted and not readily marketable securities exceeds 10% of a Fund’s net assets, the Adviser will consider whether action should be taken to reduce the percentage of such securities.

PORTFOLIO SECURITIES AND INVESTMENT PRACTICES

Portfolio Securities

This section of the SAI describes the types of securities in which the Funds may invest. Unless otherwise noted, each Fund may invest in the securities described in this section.

Emerging Market Countries — The International and Global Funds may invest in the securities of issuers located in countries that are considered to be emerging or developing (“emerging countries”) by the World Bank, the International Finance Corporation, or the United Nations and its authorities. A company is considered to be an emerging country issuer if: (i) its securities are principally traded in an emerging country; (ii) it derives at least 50% of its total revenue from (a) providing goods or services in emerging countries or (b) sales made in emerging countries; (iii) it maintains 50% or more of its assets in one or more emerging countries; or (iv) it is organized under the laws of, or has a principal office in, an emerging country.

Emerging Market Securities — The International and Global Funds may invest in securities traded in emerging market countries. The securities markets of certain emerging market countries may be marked by a high concentration of market capitalization and trading volume in a small number of issuers representing a limited number of industries, as well as a high concentration of ownership of such securities by a limited number of investors. The markets for securities in certain emerging market countries are in early stages of their development. Even the markets for relatively widely traded securities in emerging markets may not be able to absorb, without price disruptions, a significant increase in trading volume or trades of a size customarily undertaken by institutional investors in the securities markets of developed countries. In addition, market making and arbitrage activities are generally less extensive in such markets, which may contribute to increased volatility and reduced liquidity of such markets. The limited liquidity of emerging markets may also affect the Fund’s ability to accurately value its portfolio securities or to acquire or dispose of securities at the price and time it wishes to do so or in order to meet redemption requests.

Transaction costs, including brokerage commissions or dealer mark-ups, in emerging market countries may be higher than in more developed securities markets.

In addition, the securities of non-U.S. issuers generally are not registered with the Securities and Exchange Commission (the “SEC”), and issuers of these securities usually are not subject to its reporting requirements. Accordingly, there may be less publicly available information about foreign securities and issuers than is available with respect to U.S. securities and issuers. Foreign companies generally are not subject to uniform accounting, auditing and financial reporting standards, practices and requirements comparable to those prevalent in the U.S.

Existing laws and regulations of emerging market countries may be inconsistently applied. As legal systems in emerging market countries develop, investors may be adversely affected by new or amended laws and regulations. In circumstances where adequate laws exist, it may not be possible to obtain swift and equitable enforcement of the law. The Fund’s ability to enforce its rights against private emerging market country issuers by attaching assets to enforce a judgment may be limited. Bankruptcy, moratorium and other similar laws applicable to private emerging market country issuers may differ substantially from those of other countries. The political context, expressed as an emerging market governmental issuer’s willingness to meet the terms of its debt obligations, for example, is of considerable importance. In addition, the holders of commercial bank debt may contest payments to the holders of emerging market country debt securities in the event of default under commercial bank loan agreements.

Certain emerging market countries require governmental approval prior to investments by foreign persons or limit investment by foreign persons to only a specified percentage of an issuer’s outstanding securities or a specific class of securities that may have less advantageous terms (including price) than securities of the company available for purchase by nationals. In addition, the repatriation of both investment income and capital from several of the emerging market countries is subject to restrictions such as the need for certain governmental consents. Even where there is no outright restriction on repatriation of capital, the mechanics of repatriation may affect certain aspects of the operation of the Fund. The Fund may be required to establish special custodial or other arrangements before investing in certain emerging market countries.

Emerging market countries may be subject to a greater degree of economic, political and social instability than is the case in Japan and most Western European countries. Such instability may result from, among other things, the following: (i) authoritarian governments or military involvement in political and economic decision making, including changes or attempted changes in governments through extra-constitutional means; (ii) popular unrest associated with demands for improved political, economic or social conditions; (iii) internal insurgencies; (iv) hostile relations with neighboring countries; and (v) ethnic, religious and racial disaffection or conflict. Such economic, political and social instability could disrupt the principal financial markets in which the Fund may invest and adversely affect the value of its assets.

The economies of emerging market countries may differ unfavorably from those of more developed countries in such respects as growth of gross domestic product, rate of inflation, capital reinvestment, resources, self-sufficiency and balance of payments. Many emerging market countries have experienced in the past, and continue to experience, high rates of inflation. In certain countries inflation has at times accelerated rapidly to hyperinflationary levels, creating a negative interest rate environment and sharply eroding the value of outstanding financial assets in those countries. The economies of certain emerging market countries are heavily dependent upon international trade and are accordingly affected by protective trade barriers and the economic conditions of their trading partners. In addition, the economies of certain emerging market countries are vulnerable to weakness in world prices for their commodity exports.

A Fund’s income and, in some cases, capital gains from foreign stocks and securities will be subject to applicable taxation in certain countries in which it invests, and treaties between the U.S. and such countries may not be available in some cases to reduce the otherwise applicable tax rates. See “Tax Matters.”

Foreign Government Securities — Each Fund may invest in foreign government securities. Investment in sovereign debt obligations involves special risks not present in debt obligations of U.S. corporate issuers. The issuer of the debt or the governmental authorities that control the repayment of the debt may be unable or unwilling to repay principal or interest when due in accordance with the terms of such debt, and an investor may have limited recourse in the event of a default. Periods of economic uncertainty may result in volatile sovereign debt market prices. A sovereign debtor’s willingness or ability to repay principal and pay interest in a timely manner may be affected by, among other factors, its cash flow situation, the extent of its foreign currency reserves, the availability of sufficient foreign exchange on the date a payment is due, the relative size of the debt service burden to the economy as a whole, the sovereign debtor’s policy toward international lenders and the political constraints to which a sovereign debtor may be subject. When an emerging country government defaults on its debt obligations, the investor must pursue any remedies in the courts of the defaulting party itself.

Certain emerging market governments that issue lower quality debt securities are among the largest debtors to commercial banks, foreign governments and supranational organizations such as the World Bank, and may be unwilling or unable to make repayments as they become due. Below-investment-grade debt securities are generally unsecured and may be subordinated to the claims of other creditors, resulting in a heightened risk of loss due to default.

Foreign Securities — Investing in foreign securities involves certain special considerations, including those set forth below, that are not typically associated with investing in U.S. dollar-denominated or quoted securities of U.S. issuers. Investments in foreign securities usually involve currencies of foreign countries. Accordingly, a Fund’s investment in foreign securities may be affected by changes in currency rates and in exchange control regulations and costs incurred in converting among various currencies. A Fund also may be subject to currency exposure as a result of its investment in currency or currency futures.

Currency exchange rates may fluctuate significantly over short periods of time. They generally are determined by the forces of supply and demand in the foreign exchange markets and the relative merits of investments in different countries, actual or anticipated changes in interest rates and other complex factors, as seen from an international perspective. Currency exchange rates also can be affected unpredictably by intervention by U.S. or foreign governments or central banks or the failure to intervene or by currency controls or political developments in the United States or abroad.

Since foreign issuers generally are not subject to uniform accounting, auditing and financial reporting standards, practices and requirements comparable to those applicable to U.S. companies, there may be less publicly available information about a foreign company than about a U.S. company. Volume and liquidity in most foreign securities markets are less than in the United States and securities of many foreign companies are less liquid and more volatile than securities of comparable U.S. companies. Fixed commissions on foreign securities exchanges are generally higher than negotiated commissions on U.S. exchanges, although each Fund will endeavor to achieve the most favorable net results on its portfolio transactions. There is generally less government supervision and regulation of foreign securities exchanges, brokers, dealers and listed and unlisted companies than in the United States.

Foreign markets also have different clearance and settlement procedures, and in certain markets there have been times when settlements have been unable to keep pace with the volume of securities transactions, making it difficult to conduct such transactions. Such delays in settlement could result in temporary periods when some of a Fund’s assets are uninvested and no return is earned on such assets. The inability of a Fund to make intended security purchases due to settlement problems could cause the Fund to miss attractive investment opportunities. Inability to dispose of portfolio securities due to settlement problems could result either in losses to a Fund due to subsequent declines in value of the portfolio securities or, if the Fund has entered into a contract to sell the securities, could result in possible liability to the purchaser. In addition, with respect to certain foreign countries, there is the possibility of expropriation or confiscatory taxation, political or social instability, or diplomatic developments that could affect a Fund’s investments in those countries. Moreover, individual foreign economies may differ favorably or unfavorably from the U.S. economy in such respects as growth of gross national product, rate of inflation, capital reinvestment, resource self-sufficiency and balance of payments position.

Investment in foreign companies, foreign branches of U.S. banks, foreign banks, or other foreign issuers, may take the form of ownership of securities issued by such entities or may take the form of sponsored and unsponsored American Depositary Receipts (“ADRs”), Global Depositary Receipts (“GDRs”), European Depositary Receipts (“EDRs”) or other similar instruments representing securities of foreign issuers. An ADR is a negotiable receipt, usually issued by a U.S. bank, that evidences ownership of a specified number of foreign securities on deposit with a U.S. depository and entitles the shareholder to all dividends and capital gains of the underlying securities. ADRs are traded on U.S. exchanges or in the U.S. over-the-counter market and, generally, are in registered form. EDRs and GDRs are receipts evidencing an arrangement with a non-U.S. bank similar to that for ADRs and are designed for use in the non-U.S. securities markets. EDRs and GDRs are not necessarily quoted in the same currency as the underlying security.

In the case of sponsored ADRs, the issuer of the underlying foreign security and the depositary enter into a deposit agreement, which sets out the rights and responsibilities of the issuer, the depositary and the ADR holder. Under the terms of most sponsored arrangements, depositaries agree to distribute notices of shareholder meetings and voting instructions, thereby ensuring that ADR holders will be able to exercise voting rights through the depositary with respect to deposited securities. In addition, the depositary usually agrees to provide shareholder communications and other information to the ADR holder at the request of the issuer of the deposited securities. In the case of an unsponsored ADR, there is no agreement between the depositary and the issuer and the depositary is usually under no obligation to distribute shareholder communications received from the issuer of the deposited securities or to pass through voting rights to ADR holders in respect of deposited securities. With regard to unsponsored ADRs, there may be an increased possibility that the Fund would not become aware of or be able to respond to corporate actions such as stock splits or rights offerings in a timely manner. In addition, the lack of information may result in inefficiencies in the valuation of such instruments.

Asset-Backed Securities — Asset-backed securities are a form of complex security. The securitization techniques used for asset-backed securities are similar to those used for mortgage-related securities. Asset-backed securities present certain risks that are not presented by mortgage-backed securities. Primarily, these securities may provide the Fund with a less effective security interest in the related collateral than do mortgage-backed securities. Therefore, there is the possibility that recoveries on the underlying collateral may not, in some cases, be available to support payments on these securities.

Convertible Securities — Convertible securities have characteristics similar to both fixed-income and equity securities. Convertible securities include bonds, debentures, notes, preferred stocks, or other securities that may be converted into or exchanged for a prescribed amount of common stock of the same or a different issuer within a particular period of time at a specified price or formula. A convertible security entitles the holder to receive interest generally paid or accrued on debt or the dividend paid on preferred stock until the convertible security matures or is redeemed, converted, or exchanged.

Corporate Debt Securities — Corporate debt securities include corporate bonds, debentures, notes, and other similar instruments, including convertible securities. Debt securities may be acquired with warrants attached. Corporate income-producing securities also may include forms of preferred or preference stock.

Money Market Instruments — Each Fund may invest in the following types of money market instruments:

U.S. Government Securities. Securities issued or guaranteed by the U.S. government or its agencies or instrumentalities include U.S. Treasury securities that differ in their interest rates, maturities and times of issuance. Some obligations issued or guaranteed by U.S. government agencies and instrumentalities are supported by the full faith and credit of the U.S. Treasury; others by the right of the issuer to borrow from the Treasury; others by discretionary authority of the U.S. government to purchase certain obligations of the agency or instrumentality; and others only by the credit of the agency or instrumentality.

Bank Obligations. Each Fund may purchase certificates of deposit, time deposits, bankers’ acceptances and other short-term obligations issued by domestic banks, foreign subsidiaries or foreign branches of domestic banks, domestic and foreign branches of foreign banks, domestic savings and loan associations, and other banking institutions.

·	Commercial Paper. Commercial paper consists of short-term, unsecured promissory notes issued to finance short-term credit needs.

·	Commercial Mortgage-Related Securities. Each Fund may invest in commercial mortgage-related securities, which generally are multi-class debt or pass-through certificates secured by mortgage loans on commercial properties.

Residential Mortgage-Related Securities. Each Fund may invest in mortgage-related securities representing participation interests in pools of one- to four-family residential mortgage loans issued or guaranteed by governmental agencies or instrumentalities, such as the Government National Mortgage Association (“GNMA”), the Federal National Mortgage Association (“FNMA”), and the Federal Home Loan Mortgage Corporation (“FHLMC”), or issued by private entities.

·	Collateral Mortgage Obligations and Multi-Class Pass-Through Securities. Collateralized mortgage obligations or “CMOs” are multiclass bonds backed by pools of mortgage pass-through certificates or mortgage loans. CMOs may be collateralized by:

·	pass-through certificates issued or guaranteed by GNMA, FNMA or FHLMC;

·	unsecuritized mortgage loans insured by the Federal Housing Administration (“FHA”) or guaranteed by the Department of Veterans’ Affairs;

·	unsecuritized conventional mortgages;

·	other mortgage-related securities; or

·	any combination of these.

Each class of a CMO, referred to as a “tranche,” is issued at a specific coupon rate and has a stated maturity or final distribution date. Principal prepayments on the underlying mortgages may cause the CMO to be retired much earlier than the stated maturity or final distribution date. The principal and interest on the underlying mortgages may be allocated among the several classes of a series of a CMO in different ways. One or more tranches may have coupon rates that reset periodically at a specified increase over an index. These are floating rate CMOs, and typically have a cap on the coupon rate. Inverse floating rate CMOs have coupon rates that move in the reverse direction to an applicable index. The coupon rates on these CMOs will increase as general interest rates decrease. These are usually much more volatile than fixed rate CMOs or floating rate CMOs.

Information About Mortgage-Related Securities. Mortgage-related securities are sensitive to changes in interest rates. The following risks apply to mortgage-related securities generally:

In periods of declining interest rates, mortgages are more likely to be prepaid. A mortgage-related security’s maturity can be shortened by unscheduled prepayments on the underlying mortgages. Therefore, it is not always possible to predict accurately the security’s yield. The principal that is returned earlier than expected may have to be reinvested in other investments having a lower yield than the prepaid security. Therefore, these securities may be less effective as a means of “locking in” attractive long-term interest rates, and they may have less potential for appreciation during periods of declining interest rates, than conventional bonds with comparable stated maturities.

Prepayment risks can lead to substantial fluctuations in the value of a mortgage-related security. In turn, this can affect the value of a Fund’s shares. If a mortgage-related security has been purchased at a premium, all of part of the premium a Fund paid may be lost if there is a decline in the market value of the security, whether that results from interest rate changes or prepayments on the underlying mortgages. In the case of stripped mortgage-related securities, if they experience greater rates of prepayment than were anticipated, a Fund may fail to recoup its initial investment on the security.

During periods of rapidly rising interest rates, prepayments of mortgage-related securities may occur at slower than expected rates. Slower prepayments effectively may lengthen a mortgage-related security’s expected maturity. Generally, that would cause the value of the security to fluctuate more widely in responses to changes in interest rates. If the prepayments on a Fund’s mortgage-related securities were to decrease broadly, the Fund’s effective duration, and therefore its sensitivity to interest rate changes, would increase.

·	As with other debt securities, the values of mortgage-related securities may be affected by changes in the market’s perception of the creditworthiness of the entity issuing the securities or guaranteeing them. Their values may also be affected by changes in government regulations and tax policies.

Real Estate Operating Companies — Each Fund may invest in Real Estate Operating Companies (“REOCs”). REOCs primarily own and operate real properties and derive a substantial portion of their earnings from rental income. Unlike REITs, these companies may retain a much greater share of their income as they are not required by law to pay dividends.

Restricted Securities — Each Fund may invest in securities that are subject to restrictions on resale because they have not been registered under the Securities Act. These securities are sometimes referred to as private placements. Although securities which may be resold only to “qualified institutional buyers” in accordance with the provisions of Rule 144A under the Securities Act are technically considered “restricted securities,” a Fund may purchase Rule 144A securities without regard to the limitation on investments in illiquid securities described above, provided that a determination is made that such securities have a readily available trading market. E.I.I. will determine the liquidity of Rule 144A securities under the supervision of the Board. The liquidity of Rule 144A securities will be monitored by E.I.I., and if as a result of changed conditions, it is determined that a Rule 144A security is no longer liquid, a Fund’s holdings of illiquid securities will be reviewed to determine what, if any, action is required to assure that the Fund does not exceed the applicable percentage limitation for investments in illiquid securities.

Zero Coupon Securities — The market prices of zero coupon securities generally are more volatile than the market prices of securities that pay interest periodically and are likely to respond to a greater degree to changes in interest rates than non-zero coupon securities having similar maturities and credit qualities.

Investment Practices

Forward Commitments — Each Fund may purchase or sell securities on a forward commitment, when-issued, or delayed delivery basis, which means delivery and payment take place a number of days after the date of the commitment to purchase or sell the securities at a predetermined price and/or yield. Each Fund intends to engage in forward commitments to increase its portfolio’s financial exposure to the types of securities in which it invests. Leveraging the portfolio in this manner will increase the Fund’s exposure to changes in interest rates and will increase the volatility of its returns. At no time will a Fund have more than 15% of its assets committed to purchase securities on a forward commitment basis.

Lending Portfolio Securities — Each Fund may lend securities from its portfolio to brokers, dealers, and other financial institutions needing to borrow securities to complete certain transactions. Loans of portfolio securities may not exceed 33 1/3% of the value of the Fund’s total assets. While a Fund will not have the right to vote securities on loan, it intends to terminate loans and regain the right to vote if that is considered important with respect to the investment.

Use of Complex Securities — Each Fund may invest for hedging purposes in derivative securities, such as futures and options. Complex securities can be volatile and involve various types and degrees of risk, depending upon the characteristics of the particular security and the portfolio as a whole. Such investments permit a Fund to increase or decrease the level of risk, or change the character of the risk, to which its portfolio is exposed in much the same way as the Fund can increase or decrease the level of risk, or change the character of the risk, of its portfolio by making investments in specific securities.

MANAGEMENT

The overall management of the business and affairs of the Trust is vested with the Board. The Board approves all significant agreements between the Trust or the Fund and persons or companies furnishing services to the Fund, including each Fund’s agreement with an investment adviser, custodian, and transfer agent. There are four Trustees, three of whom are not “interested persons” (as defined in the 1940 Act) of the Trust (“Independent Trustees”). The day-to-day operations of the Fund are delegated to the Trust’s officers subject always to the investment objectives and policies of the Fund and to general supervision by the Board. Each Trustee oversees the Fund and the Trust’s other two series. The Board met four times during the fiscal year ended June 30, 2007.

The following information is provided for each Trustee and officer of the Trust. The mailing address of the Trustees and officers is 717 Fifth Avenue, 10th Floor, New York, New York 10022. The term of office for a Trustee or officer is indefinite, until he or she resigns, is removed or a successor is elected and qualified.

Name and Age of Trustee	Position with the Trust and Length of Time Served	Principal Occupation(s) in the Past 5 Years	Other Directorships Held by Trustee
*INDEPENDENT TRUSTEES*
Warren K. Greene, 71	Trustee since 1998; Chairman since May 2005	Partner, American Investors Fund LP , Senior Vice President, NorthCoast Asset Management LLC.	Trustee, Renaissance Capital Greenwich Funds
Joseph Gyourko, 50	Trustee since June 1998	Martin Bucksbaum Professor of Real Estate & Finance, The Wharton School, University of Pennsylvania
Juan M. Meyer, 63	Trustee since December 2005	Executive Vice President, Asset Management Advisors, since February 2003; President, Eagle Capital International (family office), from February 1984 to February 2003.	Director, Cathay Investment Fund; Trustee, Northern Trust Multi-Advisor Fund.
*“INTERESTED” TRUSTEE ¹*
Christian A. Lange, 68	Trustee since October 2003	President and Chief Investment Officer of European Investors Incorporated	Director, E.I.I. Voyager U.S. Leaders Equity Company, Director of Amadeus Capital Vision PLC, Director of E.I.I. Real Estate Securities Advisors.

¹ Mr. Lange is considered to be an “interested person” (as defined by the 1940 Act) of the Trust because of his employment with an affiliate of the Adviser.

*OFFICERS*
Name and Age of Officer	Position with the Trust and Length of Time Served	Principal Occupation(s) in the Past 5 Years
Richard J. Adler, 61	Chief Executive Officer since June 1998, President since May 2004, Chairman from February 2003 to May 2005	Managing Director, E.I.I.
Lynn P. Marinaccio, 50	Secretary since February 2003	Director of Client Services, E.I.I.
Michael J. Meagher, 45	Treasurer since May 2003; Chief Compliance Officer since October 2004	Vice President, Chief Compliance Officer and Director of Mutual Funds, E.I.I. since March 2003; Vice President, J.P. Morgan Investment Management (1993 to 2002).

Board Committees

The Board currently has an Audit Committee and a Nominating Committee.

The members of the Audit Committee are Mr. Greene (Chairman), Mr. Gyourko and Mr. Meyer. The primary purpose of the Committee is to oversee the Trust’s accounting and financial reporting policies, practices and internal controls, as required by statutes and regulations administered by the SEC, including the 1940 Act, and selecting and directing the activities of the Trust’s independent auditors. The Committee met twice during the fiscal year ended June 30, 2007.

The members of the Nominating Committee are Mr. Greene (Chairman), Mr. Gyourko and Mr. Meyer. The functions of the Committee are to hear and consider matters related to the Board, including nominating new Trustees, reviewing the compensation of Independent Trustees and reporting to the full Board. The Committee did not meet during the fiscal year ended June 30, 2007. The Committee will not consider nominees recommended by Fund shareholders.

Securities Beneficially Owned by Trustees

The following table shows the dollar range of each Trustee’s ownership of shares of each Fund and of all of the Funds as of December 31, 2006:

Trustee	Dollar Range of Domestic Fund Shares	Dollar Range of International Fund Shares	Dollar Range of Global Fund Shares	Dollar Range of All E.I.I. Fund Shares
*INDEPENDENT TRUSTEES*
Mr. Greene	None	$1 to $10,000	$1 to $10,000	$1 to $10,000
Mr. Gyourko	None	None	None	None
Mr. Meyer	None	None	None	None
*“INTERESTED” TRUSTEE”*
Mr. Lange	Over $100,000	None	None	Over $100,000

No Independent Trustee and no immediate family member of an Independent Trustee owns beneficially or of record an interest in the Adviser or in any person directly or indirectly controlling, controlled by or under common control with the Adviser.

The Trust may indemnify any person who was or is a Trustee, officer, or employee of the Trust to the maximum extent permitted by the Delaware statutory trust law; provided, however, that any such indemnification (unless ordered by a court) shall be made by the Trust only as authorized in the specific case upon a determination that indemnification of such persons is proper in the circumstances.

Such determination shall be made: (i) by the Board, by a majority vote of a quorum that consists of Trustees who are neither “interested persons” (as defined in the 1940 Act) of the Trust nor parties to the proceeding; or (ii) if the required quorum is not obtained or if a quorum of such Trustees so directs, by independent legal counsel in a written opinion. No indemnification will be provided by the Trust to any Trustee or officer of the Trust for any liability to the Trust or its shareholders to which he or she would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of duty.

As of September 30, 2007, the Trustees and officers collectively did not own more than 1% of any Fund’s outstanding shares.

Each Independent Trustee receives $4,000 per annum, and $2,500 per regular meeting plus expenses of attendance at Trustees meetings. “Interested” Trustees do not receive Trustees’ fees. The table below illustrates the compensation paid to each Trustee for the most recently completed fiscal year:

Name	Aggregate Compensation from the Trust	Pension or Retirement Benefits Accrued as Part of Trust Expenses	Estimated Annual Benefits Upon Retirement	Total Compensation from all Funds in the Complex Paid to Trustees
*INDEPENDENT TRUSTEES*
Mr. Greene	$20,000	N/A	N/A	$20,000
Mr. Gyourko	$16,000	N/A	N/A	$16,000
Mr. Meyer	$16,000	N/A	N/A	$16,000
*“INTERESTED” TRUSTEE*
Mr. Lange	None	N/A	N/A	None

Control Persons and Principal Holders of Securities

As of September 30, 2007, the following persons held five percent or more of the outstanding shares of the Institutional class of the Domestic Fund:

Name and Address of Owner	Percent of Domestic Fund	Nature of Ownership (Record, Beneficial or Both)
Soka University 1 University Drive Aliso Viejo, CA 92656-808	34.85%	Both
National Financial Svcs Llc For The Exclusive Benefit Of Our Customers 200 Liberty Street One World Financial Center New York, NY 10281	32.76%	Record
Julie Lane Gay and Craig Matthew Gay Jt Ten WROS 7060 Prescott St. Vancouver BC V6N4K5 Canada	8.28%	Both

As of September 30, 2007, the following persons held five percent or more of the outstanding shares of the Institutional class of the International Fund:

Name and Address of Owner	Percent of International Fund	Nature of Ownership (Record, Beneficial or Both)
Charles Schwab & Co. Inc. Special Custody Account For The Exclusive Benefit Of Customers 101 Montgomery St. San Francisco CA 94104-4122	26.01%	Record
Patterson & Co Omnibus Cash 1525 West WT Harris Blvd Charlotte, NC 28288-1151	9.03	Record

As of September 30, 2007, the following persons held five percent or more of the outstanding shares of the Institutional class of the Global Fund:

Name and Address of Owner	Percent of Global Fund	Nature of Ownership (Record, Beneficial or Both)
National Financial Services LLC for the Exclusive Benefit of our Customers 200 Liberty Street One World Financial Center New York, N.Y. 10281	23.32%	Record
Kansas State University Foundation 2323 Anderson Ave Suite 500 Manhattan, K.S. 66502-2911	10.34%	Both
Mac & Co.- A/C BENFO 743792 Mutual Fund Operations	9.24	Record
PO Box 3198 525 William Penn Place Pittsburgh PA 15230-3198
Morgan Keegan & Company Inc. FBO 014946321 50 North Front Street Memphis TN 38103	8.377	Record
Charles Schwab & Co. Inc. Special Custody Account For The Exclusive Benefit Of Customers 101 Montgomery St. San Francisco CA 94104-4122	8.08	Record
Winter Park Health Foundation 220 Edinburgh Drive Winter Park FL, 32792-4160	6.37	Both
Keybank NA Cust FBO JCF-EII (MIF) # 0959684-2024200 Mailcode OH-01-49-0302 4900 Tiedeman Rd Cleveland OH, 44144-2302	6.29	Record

Under the 1940 Act, a person who beneficially owns over 25% of the shares of any class of the Fund is presumed to control that class of shares. As such, a controlling shareholder may control the outcome of any proposal submitted to shareholders for approval, including changes to the Fund’s fundamental policies or the terms of the advisory agreement with the Adviser.

The control persons of the Domestic Fund were Soka University and National Financial Services, LLC. Soka University is a private non-profit university located in Orange County, California. National Financial Services, LLC (NFS) is a Fidelity Investments company whose parent is Fidelity Global Brokerage Group. NFS is a limited liability company organized in the state of Delaware that provides retail and institutional broker-dealer services to its clients and is registered as such under the Securities Exchange Act of 1934 (“Exchange Act”) and as an investment adviser under the Investment Advisers Act of 1940. The single control person of the International Fund was the Charles Schwab & Co. Inc. (CSC) Special Custody Account For The Exclusive Benefit Of Customers. CSC is a retail broker-dealer organized under the laws of the state of California. Its parent is Charles Schwab Corporation. As of September 30, 2007, there were no shareholders deemed to be control persons of the Global Fund.

ADVISER AND INVESTMENT ADVISORY AGREEMENT

E.I.I. Realty Securities, Inc., 717 Fifth Avenue, 10th Floor, New York, New York 10022, acts as the investment adviser to the Funds under an investment advisory agreement with the Trust, on behalf of the Fund (the “Agreement”). The Agreement provides that the Adviser identify and analyze possible investments for the Funds, determine the amount and timing of such investments, and the form of investment. The Adviser is responsible for monitoring and reviewing each Fund’s portfolio, and, on a regular basis, to recommend the ultimate disposition of such investments. The Adviser also is responsible for arranging for the purchase and sale of securities in each Fund’s portfolio, subject at all times to the policies set forth by the Board. In addition, the Adviser provides certain administrative and managerial services to the Funds.

About the Adviser

E.I.I. provides real estate securities portfolio management services to U.S. tax-exempt institutions and other investors. E.I.I. is a wholly-owned subsidiary of European Investors Incorporated, which is a registered investment adviser providing both general securities and real estate securities portfolio management services. European Investors Incorporated is owned by European Investors Holding Company, which is owned by management.

European Investors Incorporated was founded in 1983 to provide investment services primarily to foreign investors (with a focus in Europe) in the United States by managing securities portfolios as well as providing direct real estate advisory services and corporate advisory services. From these combined efforts, European Investors Incorporated determined that securitized real estate could serve as an alternative means of acquiring real estate assets and developed a portfolio management service specifically in this area, which now caters to both foreign and domestic investors. European Investors Incorporated commenced research into real estate securities as a separate portfolio product in 1986, began managing real estate securities portfolios in 1987, and is a recognized leader in real estate securities investment management.

E.I.I. and European Investors Incorporated collectively have a diversified client base that includes investors across the globe, encompassing taxable and tax-exempt investors, individuals, and both foreign and domestic institutional investors. As of September 30, 2007, the combined companies had approximately $6.46 billion in assets under management, with $5.0 billion invested in various types of real estate securities on behalf of clients. Included in that figure are several offshore real estate investment funds managed by the firm with assets of approximately $1 billion.

E.I.I. believes that investments in real estate offer a total return potential which may serve as an effective portfolio diversifier for many investors. In addition, E.I.I. believes that, for most investors, the most convenient and effective way to invest in real estate is through the ownership of a diversified portfolio of real estate securities. Real estate securities, and more specifically REITs, provide investors with many of the features particular to both real estate investments and publicly-traded securities, providing investors with a practical and efficient means to include professionally-managed real estate in an investment portfolio.

Why Real Estate? Investments in real estate offer the following benefits over investments in other asset classes:

·	Relatively low historical correlation to the equity market.

·	Relatively high levels of potential current income from contractual rental streams.

·	A potential hedge against inflation from rising asset values and the possibility of passing through higher costs to tenants.

Why Real Estate Securities? An investment in a portfolio of real estate securities offers the following benefits in addition to those provided by direct real estate investments:

·	Diversification of risk of real estate investments.

·	Market pricing of publicly-traded shares (instead of appraisal-based valuations).

·	Enhanced liquidity, which aids in investment speed as well as portfolio rebalancing.

Why E.I.I.? E.I.I. and its parent company, European Investors Incorporated, have been professionally managing real estate securities portfolios on behalf of their clients for more than a decade and have consistently outperformed their primary benchmark (the National Association of Real Estate Investment Trusts (“NAREIT”) Equity Index) by an average margin of more than 220 basis points on an annualized basis, before fees. The collective client base of E.I.I. and European Investors Incorporated includes an array of investors ranging from foreign and domestic high net worth individuals to U.S. foundations, endowments, and corporate pension plans. In addition, European Investors Incorporated serves as the adviser or sub-adviser for several offshore funds investing with substantially the same investment objective as the Fund.

Investment Advisory Agreement

Under the Agreement, E.I.I. is eligible to receive a fee from each Fund calculated daily and payable monthly, for the performance of its services at an annual rate of 0.75% of the average daily net assets of the relevant Fund. The fee is accrued daily for the purposes of determining the offering and redemption price of each Fund’s shares.

Under the terms of the Agreement, each Fund pays all of its expenses (other than those expenses specifically assumed by the Adviser) including the costs incurred in connection with the maintenance of its registration under the Securities Act and the 1940 Act, printing of prospectuses distributed to shareholders, taxes or governmental fees, brokerage commissions, custodial, transfer and shareholder servicing agents, expenses of outside counsel and independent accountants, preparation of shareholder reports, and expenses of Board and shareholder meetings.

Until further notice to shareholders, E.I.I. has voluntarily agreed to waive a portion of its investment advisory fee and/or absorb the expenses of the Global Fund, the International Fund, and the Domestic Fund to the extent necessary to keep the annual expenses of each Fund to not more than 1.00%, 1.00%, and 0.80%, respectively, of the average daily net assets of the Institutional Share Class of the Fund. To the extent that the Adviser waives these fees and/or absorbs these expenses, it may seek payment of a portion or all of these amounts at any time within three fiscal years after the fiscal year in which these amounts were waived and/or absorbed, subject to the expense limitation stated above. The Adviser may terminate this voluntary arrangement at any time.

The Agreement may be terminated with respect to a Fund without penalty on 60 days’ written notice by a vote of the majority of the Board or by E.I.I., or by holders of a majority of the relevant Fund’s outstanding shares. The Agreement will continue from year-to-year, provided it is approved, at least annually, in the manner described in the 1940 Act. This requires that the Agreement and any renewal thereof be approved by a vote of the majority of the Trustees who are not parties thereto or “interested persons” (as defined in the 1940 Act) of any such party, cast in person at a meeting specifically called for the purpose of voting on such approval.

For the last three fiscal years ended June 30^th, the amount of advisory fees paid by the Domestic Fund were as follows:

	Gross Advisory Fees	Waiver/Reimbursement	Net Advisory Fees
Year ended June 30, 2007	$288,964	($98,342)	$190,622
Year ended June 30, 2006	$426,752	($137,747)	$289,005
Year ended June 30, 2005	672,785	(182,824)	489,961

For the last three fiscal years (or periods) ended June 30^th, the amount of advisory fees paid by the International Fund were as follows:

	Gross Advisory Fees	Waiver/Reimbursement	Net Advisory Fees
Year ended June 30, 2007	$2,459,893	($376,627)	$2,083,266
Year ended June 30, 2006	$676,976	($214,586)	$462,390
Period ended June 30, 2005*	129,080	(111,909)	17,171

* The International Fund commenced operations on July 1, 2004.

Since its inception date of February 1, 2007, the net amount of advisory fees paid by the Global Fund was $139,171 for the year ended June 30, 2007, and the amount waived by the investment adviser was $105,894 which resulted in net advisory fees of $33,277.

Portfolio Managers.

This section includes information about the Funds’ portfolio managers, including information concerning other accounts they manage, the dollar range of Fund shares they own and how they are compensated. The portfolio managers listed in the following table manage all of the other investment companies, other pooled investment vehicles and other accounts shown below as a team.

Other Accounts

Portfolio Manager	Number of Other Accounts (Total Assets)^* as of June 30, 2007	Number of Other Accounts *(Total Assets)^ Subject to a Performance Fee as of June 30, 2007**
Alfred C. Otero
Other Investment Companies	None	N/A
Other Pooled Investment Vehicles	3 ($23.0 million)	N/A
Other Accounts	39 ($291.2 million)	1 ($14 million)
James E. Rehlaender
Other Investment Companies	None	N/A
Other Pooled Investment Vehicles	1 ($327 million)	1 ($327 million)
Other Accounts	15 ($998 million)	4 ($298 million)
Peter Nieuwland
Other Investment Companies	None	N/A
Other Pooled Investment Vehicles	1 ($327 million)	1 ($327 million))
Other Accounts	15 ($998 million)	4 ($298 million)

In managing other investment companies, other pooled investment vehicles and other accounts, the Adviser may employ strategies similar to those employed by the Funds. As a result, these other accounts may invest in the same securities as the Fund. The SAI section entitled “Portfolio Transactions and Brokerage” discusses the various factors that the Adviser considers in allocating investment opportunities among the Fund and other similarly managed accounts.

^* Rounded to the nearest million.

Fund Ownership

As of June 30, 2007, Mr. Otero owned $10,001 to $50,000 of the Domestic Fund’s shares.

As of June 30, 2007, neither Mr. Rehlaender or Mr. Nieuwland own any of the International Fund’s shares..

As of June 30, 2007, none of the portfolio managers owned any of the Global Fund’s shares.

Compensation

The Funds’ portfolio managers each receives a base salary plus an annual incentive bonus for managing the Funds, other investment companies, other pooled investment vehicles and other accounts (including other accounts for which the Adviser receives a performance fee). A portfolio manager’s base salary is dependent on the manager’s level of experience and expertise. The Adviser monitors each portfolio manager’s base salary relative to salaries paid for similar positions with peer firms by reviewing data provided by various consultants that specialize in competitive salary information.

A portfolio manager’s annual incentive bonus is based on several factors, including but not limited to the manager’s performance results and overall contribution made to the firm. The Adviser may establish a “target” incentive for each portfolio manager based on the manager’s level of experience and expertise in the manager’s investment style. This target can be derived by a percentage of base salary, generally ranging from 40% to 100%. The overall performance results of the Fund and all similarly-managed investment companies, pooled investment vehicles and other accounts may be compared to the performance information of a peer group of similarly-managed competitors, as may be supplied by third party analytical agencies. The manager’s performance versus the peer group may factor into the final incentive amount. Performance results for a manager are based on the composite performance of all accounts managed by that manager on a combination of one and or multi year rolling performance. Composite performance is calculated on a pre-tax basis and does not reflect applicable fees.

The Funds’ portfolio manager may participate in the Adviser’s Pension & Profit Sharing plan, the results for which are based on the Adviser’s business results. Eligibility for participation in Pension & Profit Sharing plan depends on the manager’s performance and seniority. Each of the Funds’ portfolio managers participates in the Adviser’s Pension & Profit Sharing Plan.

ADMINISTRATIVE SERVICES AGREEMENT

E.I.I. also serves as the Trust’s administrator. E.I.I. supervises administration of the Funds pursuant to an Administrative Services Agreement with the Trust, on behalf of the Funds. Under this agreement, E.I.I. supervises the administration of all aspects of the Funds’ operations, including the Funds’ receipt of services for which the Funds are obligated to pay, provides the Funds with general office facilities, and provides, at the Funds’ expense, the services of persons necessary to perform such supervisory, administrative, and clerical functions as are needed to operate the Funds effectively. Those persons, as well as certain officers and Trustees of the Trust, may be directors, officers, or employees of (and persons providing services to the Funds may include) E.I.I. and its affiliates. For these services and facilities, for Institutional Shares, E.I.I. receives with respect to each Fund a fee calculated daily and paid monthly at an annual rate of 0.15% of the average daily net assets of those shares of the Funds.

E.I.I. may subcontract some of its administrative duties to other service providers. E.I.I. has entered into a sub-administration contract with PFPC Inc. under which PFPC Inc. will act as sub-administrator and E.I.I. will pay PFPC Inc. to provide certain administrative services to the Funds. Payment for these services is made by E.I.I. and not the Fund.

For the last three fiscal years ended June 30^th, the amount of administration fees paid by the Domestic Fund (net of any waivers or reimbursements) were as follows:

	Net Administration Fees
Year ended June 30, 2007	$57,793
Year ended June 30, 2006	$85,350
Year ended June 30, 2005	134,690

For the last three fiscal years (or periods) ended June 30^th, the amount of administration fees paid by the International Fund (net of any waivers or reimbursements) were as follows:

	Net Administration Fees
Year ended June 30, 2007	$491,979
Year ended June 30, 2006	$135,395
Period ended June 30, 2005*	25,816

* The International Fund commenced operations on July 1, 2004.

Since its inception date of February 1, 2007, the amount of administration fees paid by the Global Property Fund was $27,834 for the period ended June 30, 2007 (net of any waivers or reimbursements.

The Distributor

PFPC Distributors, Inc., located at 760 Moore Road, King of Prussia, Pennsylvania 19406, serves as the distributor of the Funds’ shares.

The Sub-Administrator, Transfer Agent, and Custodian

PFPC Inc., an indirect majority-owned subsidiary of The PNC Financial Services Group, Inc., serves as the Funds’ sub-administrator, transfer agent and custodian. As sub-administrator, PFPC Inc. is located at 4400 Computer Drive, Westborough, Massachusetts 01581. As transfer agent, PFPC Inc. is located at 101 Sabin Street, Pawtucket, RI 02860-1427. As custodian, PFPC Inc. is located at 8800 Tinicum Boulevard, Philadelphia, Pennsylvania 19153.

Independent Registered Public Accounting Firm

Ernst & Young LLP, located at 5 Times Square, New York, New York 10036, serves as the Trust’s independent registered public accounting firm.

Legal Counsel

Kramer Levin Naftalis & Frankel LLP, located at 1177 Avenue of the Americas, New York, New York 10036, serves as the Trust’s legal counsel.

PORTFOLIO TRANSACTIONS AND BROKERAGE

Subject to the supervision of the Board and a duty to obtain best overall execution, decisions to buy and sell securities for the Funds are made by E.I.I. E.I.I. is authorized to allocate the orders placed by it on behalf of the Funds to such unaffiliated brokers who also provide research or statistical material or other services to the Funds or E.I.I. for the Funds’ use. Such allocation shall be in such amounts and proportions as E.I.I. shall determine and E.I.I. will report on said allocations regularly to the Board indicating the unaffiliated brokers to whom such allocations have been made and the basis therefor. E.I.I. does not direct brokerage business to brokers as an incentive to sell Fund shares. At times, the Funds also may purchase portfolio securities directly from dealers acting as principals, underwriters, or market makers. As these transactions are usually conducted on a net basis, no brokerage commissions are paid by the Funds.

In selecting a broker to execute each particular transaction and in determining whether a Fund is receiving best execution, E.I.I. will take the following into consideration: the best net price available; the reliability, integrity, and financial condition of the broker; the size and difficulty in executing the order; and the value of the expected contribution of the broker to the investment performance of the Fund on a continuing basis. Accordingly, the cost of the brokerage commissions to a Fund in any transaction may be greater than that available from other brokers if the difference is reasonably justified by other aspects of the portfolio execution services offered. Subject to such policies and procedures as the Board may determine, E.I.I. shall not be deemed to have acted unlawfully or to have breached any duty solely by reason of its having caused a Fund to pay an unaffiliated broker that provides research services to E.I.I. for the Fund’s use an amount of commission for effecting a portfolio investment transaction in excess of the amount of commission another broker would have charged for effecting the transaction, if E.I.I. determines in good faith that such amount of commission was reasonable in relation to the value of the research service provided by such broker viewed in terms of either that particular transaction of E.I.I.’s ongoing responsibilities with respect to the Fund.

DISCLOSURE OF PORTFOLIO HOLDINGS

The Board has adopted policies with respect to the disclosure of each Fund’s portfolio holdings by the Fund, the Adviser, or their affiliates. These policies provide that a Fund’s portfolio holdings information generally may not be disclosed to any party prior to the information becoming public. Certain limited exceptions are described below. These policies apply to disclosures to all categories of persons, including individual investors, institutional investors, intermediaries who sell shares of the Funds, third parties providing services to the Funds (accounting agent, print vendors, etc.), rating and ranking organizations (Lipper, Morningstar, etc.) and affiliated persons of the Funds.

The Trust’s Chief Compliance Officer is responsible for monitoring the Funds’ compliance with these policies and for providing regular reports (at least annually) to the Board regarding the adequacy and effectiveness of the policy and recommend changes, if necessary.

Non-Public Disclosures

The Adviser may authorize the disclosure of non-public portfolio holdings information under certain limited circumstances. Each Fund’s policies provide that non-public disclosures of the Fund’s portfolio holdings may only be made if: (i) the Fund has a “legitimate business purpose” (as determined by the President of the Trust) for making such disclosure; and (ii) the party receiving the non-public information enters into a confidentiality agreement, which includes a duty not to trade on the non-public information and describes any compensation to be paid to the Fund or any “affiliated person” of the Adviser, including any arrangement to maintain assets in the Fund or in other investment companies or accounts managed by the Adviser or by any “affiliated person” of the Adviser.

The Adviser will consider any actual or potential conflicts of interest between the Adviser and a Fund’s shareholders and will act in the best interest of the Fund’s shareholders with respect to any such disclosure of portfolio holdings information. If a potential conflict can be resolved in a manner that does not present detrimental effects to Fund shareholders, the Adviser may authorize release of portfolio holdings information. Conversely, if the potential conflict cannot be resolved in a manner that does not present detrimental effects to Fund shareholders, the Adviser will not authorize such release.

Ongoing Arrangements to Disclose Portfolio Holdings

As previously authorized by the Board and/or the Trust’s executive officers, each Fund periodically discloses non-public portfolio holdings on a confidential basis to various service providers that require such information in order to assist the Fund in its day-to-day operations, as well as public information to certain ratings organizations. These entities are described in the following table. The table also includes information as to the timing of these entities receiving the portfolio holdings information from the Funds. In none of these arrangements does a Fund or any “affiliated person” of the Adviser receive any compensation, including any arrangement to maintain assets in the Fund or in other investment companies or accounts managed by the Adviser or by any “affiliated person” of the Adviser.

Type of Service Provider	Name of Service Provider	Timing of Release of Portfolio Holdings Information
Adviser and Administrator	E.I.I. Realty Securities, Inc.	Daily
Sub-Administrator	PFPC Inc.	Daily
Custodian	PFPC Trust Company	Daily
Independent Registered Public Accounting Firm	Ernst & Young LLP	Annual Reporting Period: Within Accounting Firm, 15 business days of end of reporting period. Semiannual Reporting Period: within 31 business days of end of reporting period.
Printer for Financial Reports	G-Com	Up to 60 days before distribution to shareholders.
Legal Counsel, for EDGAR filings on Forms N-CSR and Form N-Q	Kramer Levin Naftalis & Frankel LLP	Up to 30 days before filing with the SEC.

These service providers are required to keep all non-public information confidential and are prohibited from trading based on the information or otherwise using the information, except as necessary in providing services to the Funds.

There is no guarantee that a Fund’s policies on use and dissemination of holdings information will protect the Fund from the potential misuse of holdings by individuals or firms in possession of such information.

PORTFOLIO TURNOVER

The Domestic Fund anticipates that its that its portfolio turnover rate for any one year will not exceed 60% and each of the International and Global Funds anticipates that its portfolio turnover rate for any one year will not exceed 75%, which, in each case, is lower than the turnover rate for many comparable real estate securities funds. No Fund, however, will limit its portfolio turnover when market conditions dictate a more active trading policy and trading portfolio securities is appropriate. A lower portfolio turnover rate will result in a lower rate of net realized capital gains to a Fund and will decrease the portion of the Fund’s distributions constituting taxable capital gains.

ALLOCATION OF INVESTMENTS

E.I.I. has other advisory clients, some of which have similar investment objectives to the Funds. As such, there will be times when E.I.I. may recommend purchases and/or sales of the same portfolio securities for the Funds and its other clients. In such circumstances, it will be the policy of E.I.I. to allocate purchases and sales among the Funds and its other clients in a manner which E.I.I. deems equitable, taking into consideration such factors as size of account, concentration of holdings, investment objectives, tax status, cash availability, purchase cost, holding period, and other pertinent factors relative to each account. Simultaneous transactions may have an adverse effect upon the price or volume of a security purchased by a Fund.

COMPUTATION OF NET ASSET VALUE

Each Fund will determine its NAV once daily as of the close of trading on the New York Stock Exchange (the “NYSE”) on each day that the NYSE is open. It is expected that the NYSE will be closed on Saturdays and Sundays and on New Year’s Day, Dr. Martin Luther King, Jr. Day, Presidents’ Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. A Fund may make or cause to be made a more frequent determination of its NAV and offering price, which determination shall reasonably reflect any material changes in the value of securities and other assets held by the Fund from the immediately preceding determination of NAV. Each Fund’s NAV is determined by dividing the market value of the Fund’s investments as of the close of trading plus any cash or other assets (including dividends receivable and accrued interest) less all liabilities (including accrued expenses) by the number of the Fund’s outstanding shares. Securities traded on the NYSE or the American Stock Exchange will be valued at the last sale price, or if no sale, at the mean between the latest bid and asked price. Securities for which the primary market is Nasdaq will be valued at the Nasdaq Official Closing Price, or if no sale, at the mean between the latest bid and asked price. Securities traded in any other U.S or foreign market shall be valued in a manner as similar as possible to the above, or if not so traded or a significant event occurs that could affect the value of the security, in accordance with procedures for fair valuing securities adopted by the Funds and approved by the Board. Securities sold short “against the box” will be valued at market as determined above; however, in instances where a Fund has sold securities short against a long position in the issuer’s convertible securities, for the purpose of valuation, the securities in the short position will be valued at the “asked” price rather than the mean of the last “bid” and “asked” prices. Where there are no readily available quotations for securities they will be valued at a fair value as determined by the Board acting in good faith.

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION

A complete description of the manner by a which the Funds’ shares may be purchased and redeemed appears in the prospectus under the heading “Investing in the Funds.”

Each Fund has elected to be governed by Rule 18f-1 under the 1940 Act, under which a fund is obligated to redeem the shares of any shareholders solely in cash up to the lesser of 1% of the net asset value of the fund or $250,000 during any 90 day period. Pursuant to the operating agreement between Charles Schwab & Co. Inc. (“Schwab”) and the Funds, each Fund agrees that it will treat as a “shareholder” each shareholder that holds Fund shares through the Schwab omnibus account (the “Account”), provided that Schwab provides to the relevant Fund, upon request, the name or account number, number of Fund shares and other relevant information for each such shareholder. Each Fund acknowledges that treatment of Schwab as the sole shareholder of Fund shares held in the Account for purposes of applying the limits in Rule 18f-1 would be inconsistent with the intent of the Rule and the Fund’s election on Form N-18F-1 and could unfairly prejudice shareholders that hold Fund shares through the Account.

Should any shareholder’s redemption exceed the limitation described in the paragraph above, a Fund can, at its sole option, redeem the excess in cash or in readily marketable portfolio securities. Such securities would be selected solely by the Fund and valued as in computing net asset value. In these circumstances, a shareholder selling such securities would probably incur a brokerage charge and there can be no assurance that the price realized by a shareholder upon the sale of such securities will not be less than the value used in computing net asset value for the purpose of such redemption.

TAX MATTERS

The following is only a summary of certain additional federal income tax considerations generally affecting the Fund and its shareholders that are not described in the prospectus. No attempt is made to present a detailed explanation of the tax treatment of a Fund or its shareholders, and the discussions here and in the prospectus are not intended as substitutes for careful tax planning. Accordingly, potential purchasers of shares of a Fund are urged to consult their tax advisers with specific reference to their own tax circumstances. Special tax considerations may apply to certain types of investors subject to special treatment (including, for example, insurance companies, banks and tax-exempt organizations) under the Internal Revenue Code of 1986, as amended (the “Code”). In addition, the tax discussion in the prospectus and this SAI is based on tax law in effect on the date of the prospectus and this SAI; such laws and regulations may be changed by legislative, judicial, or administrative action, sometimes with retroactive effect.

Qualification as a Regulated Investment Company

Each Fund has elected to be taxed as a regulated investment company under Subchapter M of the Code. As a regulated investment company, a Fund is not subject to federal income tax on the portion of its net investment income (i.e., taxable interest, dividends, and other taxable ordinary income, net of expenses) and capital gain net income (i.e., the excess of capital gains over capital losses) that it distributes to shareholders, provided that it distributes at least 90% of its investment company taxable income (i.e., net investment income and the excess of net short-term capital gain over net long-term capital loss) for the taxable year (the “Distribution Requirement”) and satisfies certain other requirements of the Code that are described below. Distributions by a Fund made during the taxable year or, under specified circumstances, within twelve months after the close of the taxable year, will be considered distributions of income and gains of the taxable year and will, therefore, count towards satisfaction of the Distribution Requirement.

In addition to satisfying the Distribution Requirement, a regulated investment company must derive at least 90% of its gross income from dividends, interest, certain payments with respect to securities loans, gains from the sale or other disposition of stock or securities or foreign currencies (to the extent such currency gains are directly related to the regulated investment company’s principal business of investing in stock or securities), and other income (including but not limited to gains from options, futures, or forward contracts) derived with respect to its business of investing in such stock, securities or currencies.

A Fund may purchase securities of certain foreign investment funds or trusts which constitute passive foreign investment companies (“PFICs”) for federal income tax purposes. If a Fund invests in a PFIC, it has three separate options. First, it may elect to treat the PFIC as a qualifying electing fund (a “QEF”), in which case it will each year have ordinary income equal to its pro rata share of the PFIC’s ordinary earnings for the year and long-term capital gain equal to its pro rata share of the PFIC’s net capital gain for the year, regardless of whether the Fund receives distributions of any such ordinary earnings or capital gains from the PFIC. Second, the Fund may make a mark-to-market election with respect to its PFIC stock. Pursuant to such an election, the Fund will include as ordinary income any excess of the fair market value of such stock at the close of any taxable year over its adjusted tax basis in the stock. If the adjusted tax basis of the PFIC stock exceeds the fair market value of such stock at the end of a given taxable year, such excess will be deductible as ordinary loss in the amount equal to the lesser of the amount of such excess or the net mark-to-market gains on the stock that the Fund included in income in previous years. Under proposed Treasury Regulations, solely for purposes of Code Sections 1291-1298, a Fund’s holding period with respect to its PFIC stock subject to the election will commence on the first day of the first taxable year beginning after the last taxable year for which the election applied. If a Fund makes the mark-to-market election in the first taxable year it holds PFIC stock, it will not incur the tax described below under the third option.

Finally, if a Fund does not elect to treat the PFIC as a QEF and does not make a mark-to-market election, then, in general, (1) any gain recognized by the Fund upon a sale or other disposition of its interest in the PFIC or any “excess distribution” (as defined) received by the Fund from the PFIC will be allocated ratably over the Fund’s holding period in the PFIC stock, (2) the portion of such gain or excess distribution so allocated to the year in which the gain is recognized or the excess distribution is received shall be included in the Fund’s gross income for such year as ordinary income (and the distribution of such portion by the Fund to shareholders will be taxable as an ordinary income dividend, but such portion will not be subject to tax at the Fund level), (3) the Fund shall be liable for tax on the portions of such gain or excess distribution so allocated to prior years in an amount equal to, for each such prior year, (i) the amount of gain or excess distribution allocated to such prior year multiplied by the highest tax rate (individual or corporate, as the case may be) in effect for such prior year, plus (ii) interest on the amount determined under clause (i) for the period from the due date for filing a return for such prior year until the date for filing a return for the year in which the gain is recognized or the excess distribution is received, at the rates and methods applicable to underpayments of tax for such period, and (4) the distribution by the Fund to shareholders of the portions of such gain or excess distribution so allocated to prior years (net of the tax payable by the Fund thereon) will be taxable to the shareholders as an ordinary income dividend.

Treasury Regulations permit a regulated investment company, in determining its investment company taxable income and net capital gain (i.e., the excess of net long-term capital gain over net short-term capital loss) for any taxable year, to elect (unless it made a taxable year election for excise tax purposes as discussed below) to treat all or any part of any net capital loss, any net long-term capital loss or any net foreign currency loss (including, to the extent provided in Treasury Regulations, losses recognized pursuant to the PFIC mark-to-market election) incurred after October 31 as if it had been incurred in the succeeding year.

Each Fund also must satisfy an asset diversification test in order to qualify as a regulated investment company. Under this test, at the close of each quarter of a Fund’s taxable year, at least 50% of the value of the Fund’s assets must consist of cash and cash items, U.S. government securities, securities of other regulated investment companies, and securities of other issuers (limited, for this purpose, in respect of any one issuer to no more than 5% of the value of the Fund’s total assets and to no more than 10% of the outstanding voting securities of such issuer) and no more than 25% of the value of its total assets may be invested in the securities (other than U.S. government securities and securities of other regulated investment companies) of any one issuer or of two or more issuers which the Fund controls and which are engaged in the same or similar trades or businesses. Generally, an option (a call or a put) with respect to a security is treated as issued by the issuer of the security rather than the issuer of the option.

If for any taxable year a Fund does not qualify as a regulated investment company, all of its taxable income (including its net capital gain) will be subject to tax at regular corporate rates without any deduction for distributions to shareholders, and such distributions will be taxable to the shareholders as dividends to the extent of the Fund’s current and accumulated earnings and profits. Such distributions will be eligible for the dividends-received deduction in the case of corporate shareholders and may be eligible for treatment as “qualified dividend income” in the case of noncorporate shareholders.

Excise Tax On Regulated Investment Companies

A 4% non-deductible excise tax is imposed on a regulated investment company to the extent that it fails to distribute in each calendar year an amount equal to 98% of its ordinary income for such calendar year and 98% of its capital gain net income for the one-year period ended on October 31 of such calendar year (or, at the election of a regulated investment company having a taxable year ending November 30 or December 31, for its taxable year (a “taxable year election”)). The balance of such income must be distributed during the next calendar year. For the foregoing purposes, a regulated investment company is treated as having distributed any amount on which it is subject to income tax for any taxable year ending in such calendar year.

For purposes of the excise tax, a regulated investment company shall: (1) reduce its capital gain net income (but not below its net capital gain) by the amount of any net ordinary loss for the calendar year and (2) exclude foreign currency gains and losses and ordinary gains and loses arising as a result of a PFIC mark-to-market election (or upon an actual disposition of the PFIC stock subject to such election) incurred after October 31 of any year (or after the end of its taxable year if it has made a taxable year election) in determining the amount of ordinary taxable income for the current calendar year (and, instead, include such gains and losses in determining ordinary taxable income for the succeeding calendar year).

Each Fund intends to make sufficient distributions or deemed distributions of its ordinary taxable income and capital gain net income prior to the end of each calendar year to avoid liability for the excise tax. However, investors should note that a Fund may in certain circumstances be required to liquidate portfolio investments to make sufficient distributions to avoid excise tax liability.

Fund Distributions

Each Fund anticipates distributing substantially all of its investment company taxable income for each taxable year. Such distributions will be treated as dividends for federal income tax purposes and may be taxable to non-corporate shareholders as long-term capital gains (a “qualified dividend”), provided that certain requirements, as discussed below, are met. Dividends received by corporate shareholders and dividends that do not constitute qualified dividends are taxable as ordinary income. The portion of dividends received from a Fund that are qualified dividends generally will be determined on a look-through basis. If the aggregate qualified dividends received by a Fund are less than 95% of the Fund’s gross income (as specially computed), the portion of dividends received from the Fund that constitute qualified dividends will be designated by the Fund and generally cannot exceed the ratio that the qualified dividends received by the Fund bears to its gross income. If the aggregate qualified dividends received by a Fund equal at least 95% of its gross income, then all of the dividends received from the Fund will constitute qualified dividends.

No dividend will constitute a qualified dividend (1) if it has been paid with respect to any share of stock that a Fund has held for less than 61 days (91 days in the case of certain preferred stock) during the 121-day period (181-day period in the case of certain preferred stock) beginning on the date that is 60 days (90 days in the case of certain preferred stock) before the date on which such share becomes ex-dividend with respect to such dividend, excluding for this purpose, under the rules of Code section 246(c), any period during which the Fund has an option to sell, is under a contractual obligation to sell, has made and not closed a short sale of, is the grantor of a deep-in-the-money or otherwise nonqualified option to buy, or has otherwise diminished its risk of loss by holding other positions with respect to, such (or substantially identical) stock; (2) if the noncorporate shareholder fails to meet the holding period requirements set forth in (1) with respect to its shares in the Fund to which the dividend is attributable; or (3) to the extent that the Fund is under an obligation (pursuant to a short sale or otherwise) to make related payments with respect to positions in property substantially similar or related to stock with respect to which an otherwise qualified dividend is paid.

Dividends received by a Fund from a foreign corporation will be qualified dividends if: (1) the stock with respect to which the dividend is paid is readily tradable on an established securities market in the U.S., (2) the foreign corporation is incorporated in a possession of the U.S.; or (3) the foreign corporation is eligible for the benefits of a comprehensive income tax treaty with the U.S. that includes an exchange of information program (and that the Treasury Department determines to be satisfactory for these purposes). Until the Treasury Department issues guidance identifying which treaties are satisfactory for these purposes, all comprehensive income tax treaties with the U.S. that include an exchange of information program will be deemed satisfactory (other than the current U.S.-Barbados income tax treaty). Notwithstanding the above, dividends received from: (1) passive foreign investment companies; (2) foreign personal holding companies; and (3) foreign investment companies will not constitute qualified dividends. Special rules apply for determining whether a distribution from a real estate investment trust (a “REIT”) constitutes a qualified dividend.

Distributions attributable to dividends received by a Fund from domestic corporations will qualify for the 70% dividends-received deduction (“DRD”) for corporate shareholders only to the extent discussed below. Distributions attributable to: (i) interest; or (ii) distributions from REITs received by a Fund will not, and distributions attributable to dividends paid by a foreign corporation generally should not, qualify for the DRD.

Ordinary income dividends paid by a Fund with respect to a taxable year may qualify for the 70% DRD generally available to corporations (other than corporations such as S corporations, which are not eligible for the deduction because of their special characteristics, and other than for purposes of special taxes such as the accumulated earnings tax and the personal holding company tax) to the extent of the amount of dividends received by the Fund from domestic corporations for the taxable year. No DRD will be allowed with respect to any dividend: (1) if it has been received with respect to any share of stock that a Fund has held for less than 46 days (91 days in the case of certain preferred stock) during the 90-day period (180-day period in the case of certain preferred stock) beginning on the date that is 45 days (90 days in the case of certain preferred stock) before the date on which such share becomes ex-dividend with respect to such dividend, excluding for this purpose under the rules of Code Section 246(c) any period during which the Fund has an option to sell, is under a contractual obligation to sell, has made and not closed a short sale of, is the grantor of a deep-in-the-money or otherwise nonqualified option to buy, or has otherwise diminished its risk of loss by holding other positions with respect to, such (or substantially identical) stock; (2) to the extent that the Fund is under an obligation (pursuant to a short sale or otherwise) to make related payments with respect to positions in substantially similar or related property; or (3) to the extent the stock on which the dividend is paid is treated as debt-financed under the rules of Code Section 246A. Moreover, the DRD for a corporate shareholder may be disallowed or reduced: (1) if the corporate shareholder fails to satisfy the foregoing requirements with respect to its shares of a Fund; or (2) by application of Code Section 246(b), which in general limits the DRD to 70% of the shareholder’s taxable income (determined without regard to the DRD and certain other items).

Alternative minimum tax (“AMT”) is imposed in addition to, but only to the extent that it exceeds, the regular income tax and is computed at a maximum marginal rate of 28% for noncorporate taxpayers and 20% for corporate taxpayers on the excess of the taxpayer’s alternative minimum taxable income (“AMTI”) over an exemption amount. For purposes of the corporate AMT, the corporate dividends-received deduction is not itself an item of tax preference that must be added back to taxable income or is otherwise disallowed in determining a corporation’s AMTI. However, a corporate shareholder generally will be required to take the full amount of any dividend received from the Fund into account (without a dividends-received deduction) in determining its adjusted current earnings, which are used in computing an additional corporate preference item (i.e., 75% of the excess of a corporate taxpayer’s adjusted current earnings over its AMTI (determined without regard to this item and the AMT net operating loss deduction)) includable in AMTI.

Distributions by a Fund from net long-term capital gains are taxable to a shareholder as long-term capital gains regardless of the length of time the shares on which such distributions are paid have been held by the shareholder and ordinary gains and loses arising as a result of a PFIC mark-to-market election (or upon an actual disposition of the PFIC stock subject to such election). However, shareholders should note that any loss realized upon the sale or redemption of shares held for six months or less will be treated as a long-term capital loss to the extent of any distribution of long-term capital gain to the shareholder with respect to such shares.

If a Fund elects to retain its net capital gain, the Fund will be taxed thereon (except to the extent of any available capital loss carryovers) at the 35% corporate tax rate. If a Fund elects to retain its net capital gain, it is expected that the Fund also will elect to have shareholders of record on the last day of its taxable year treated as if each received a distribution of his pro rata share of such gain, with the result that each shareholder will be required to report his pro rata share of such gain on his tax return as long-term capital gain, will receive a refundable tax credit for his pro rata share of tax paid by the Fund on the gain, and will increase the tax basis for his shares by an amount equal to the deemed distribution less the tax credit.

Investment income that may be received by a Fund from sources within foreign countries may be subject to foreign taxes withheld at the source. The United States has entered into tax treaties with many foreign countries that may entitle a Fund to a reduced rate of, or exemption from, taxes on such income. 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. If more than 50% of the value of a Fund’s total assets at the close of its taxable year consist of the stock or securities of foreign corporations, the Fund may elect to “pass through” to the Fund’s shareholders the amount of foreign taxes paid by the Fund. If the Fund so elects, each shareholder would be required to include in gross income, even though not actually received, his pro rata share of the foreign taxes paid by the Fund, but would be treated as having paid his pro rata share of such foreign taxes and would therefore be allowed to either deduct such amount in computing taxable income or use such amount (subject to various Code limitations) as a foreign tax credit against federal income tax (but not both). For purposes of the foreign tax credit limitation rules of the Code, each shareholder would treat as foreign source income his pro rata share of such foreign taxes plus the portion of dividends received from a Fund representing income derived from foreign sources. No deduction for foreign taxes could be claimed by an individual shareholder who does not itemize deductions. Each shareholder should consult his own tax adviser regarding the potential application of foreign tax credits.

Distributions by a Fund that do not constitute ordinary income dividends, qualified dividends or capital gain dividends will be treated as a return of capital to the extent of (and in reduction of) the shareholder’s tax basis in his shares; any excess will be treated as gain from the sale of his shares, as discussed below.

Distributions by a Fund will be treated in the manner described above regardless of whether such distributions are paid in cash or reinvested in additional shares of the Fund. Shareholders receiving a distribution in the form of additional shares will be treated as receiving a distribution in an amount equal to the fair market value of the shares received, determined as of the reinvestment date. In addition, if the net asset value at the time a shareholder purchases shares of a Fund reflects undistributed net investment income or recognized capital gain net income or unrealized appreciation in the value of the assets of the Fund, distributions of such amounts will be taxable to the shareholder in the manner described above, although such distributions economically constitute a return of capital to the shareholder.

Ordinarily, shareholders are required to take distributions by a Fund into account in the year in which the distributions are made. However, dividends declared in October, November, or December of any year and payable to shareholders of record on a specified date in such a month will be deemed to have been received by the shareholders (and paid by a Fund) on December 31 of such calendar year if such dividends are actually paid in January of the following year. Shareholders will be advised annually as to the U.S. federal income tax consequences of distributions made (or deemed made) during the year.

Backup Withholding

Each Fund will be required in certain cases to withhold and remit to the Internal Revenue Service backup withholding taxes at the applicable rate on ordinary income dividends, qualified dividends and capital gain dividends and the proceeds of redemption of shares paid to any shareholder: (1) who failed to provide to the Fund a correct taxpayer identification number; (2) who is subject to backup withholding for failure to report properly the receipt of interest or dividend income; or (3) who has failed to certify to the Fund that it is not subject to backup withholding or that it is a corporation or other “exempt recipient.”

Redemption of Shares

A shareholder will recognize gain or loss on the redemption of shares of a Fund (including an exchange of shares of the Fund for shares of another Fund) in an amount equal to the difference between the proceeds of the redemption and the shareholder’s adjusted tax basis in the shares redeemed. All or a portion of any loss so recognized may be disallowed if the shareholder purchases other shares of the Fund within 30 days before or after the redemption. In general, any gain or loss arising from (or treated as arising from) the redemption of shares of a Fund will be considered capital gain or loss and will be long-term capital gain or loss if the shares were held for longer than one year. Any capital loss arising from the redemption of shares held for six months or less will be treated as a long-term capital loss to the extent of the amount of capital gain dividends received on such shares. For this purpose, the special holding period rules of Code section 246(c) (discussed above in connection with the dividends-received deduction for corporations) generally will apply in determining the holding period of shares. Capital losses in any year are deductible only to the extent of capital gains plus, in the case of a noncorporate taxpayer, $3,000 of ordinary income.

Taxation of Certain Mortgage REITs

Each Fund may invest in REITs that hold residual interests in real estate mortgage investment conduits (“REMICs”). Under Treasury Regulations that have not yet been issued, but may apply retroactively, the portion of a Fund’s income from a REIT that is attributable to the REIT’s residual interest in a REMIC (referred to in the Code as an “excess inclusion”) will be allocated to shareholders of the Fund in proportion to the dividends received by them with the same consequences as if the shareholders held their proportionate share of the REMIC residual interest directly. In general, excess inclusion income allocated to shareholders: (1) cannot be offset by net operating losses (subject to a limited exception for certain thrift institutions); and (2) will constitute unrelated business taxable income to entities that are subject to tax on unrelated business income (including a qualified pension plan, an individual retirement account, a 401(k) plan, a Keogh plan, or other tax-exempt entity), thereby potentially requiring such entity to file a federal income tax return and remit tax on its excess inclusion income. In addition, if at any time during any taxable year a “disqualified organization” (as defined in the Code) is a record holder of a share in a Fund, then the Fund will be subject to tax, at the highest federal income tax rate imposed on corporations, on that portion of its excess inclusion income for the taxable year that is allocable to the disqualified organization.

Foreign Shareholders

Taxation of a shareholder who, as to the United States, is a nonresident alien individual, foreign trust or estate, foreign corporation, or foreign partnership (“foreign shareholder”), depends on whether the income from a Fund is “effectively connected” with a U.S. trade or business carried on by such shareholder.

If the income from a Fund is not effectively connected with a U.S. trade or business carried on by a foreign shareholder, ordinary income dividends (including dividends that would otherwise be treated as qualified dividends to an applicable non-foreign shareholder) paid to such foreign shareholder will be subject to U.S. withholding tax at the rate of 30% (or lower applicable treaty rate) upon the gross amount of the dividend. Such foreign shareholder generally would be exempt from U.S. federal income tax on gains realized on the sale of shares of the Fund, capital gain dividends, and amounts retained by the Fund that are designated as undistributed capital gains.

If the income from a Fund is (or is treated as) effectively connected with a U.S. trade or business carried on by a foreign shareholder, then ordinary income dividends, qualified dividends, capital gain dividends, and any gains realized upon the sale of shares of the Fund will be subject to U.S. federal income tax at the rates applicable to U.S. citizens or domestic corporations. Under certain circumstances, certain distributions from a Fund or gains from the sale or redemption of shares of the Fund may be treated as effectively connected with a U.S. trade or business carried on by a foreign shareholder under the Foreign Investment in Real Property Tax Act of 1980 (“FIRPTA”). In addition, FIRPTA may in certain circumstances require a 10% withholding tax on distributions and the proceeds of sales or redemptions. The withholding tax, which may be greater or less than the foreign shareholder’s final U.S. tax obligation, may be claimed as a credit on the foreign shareholder’s U.S. income tax return.

In the case of foreign shareholders other than corporations, a Fund may be required to withhold backup withholding taxes at the applicable rate on distributions and the proceeds of redemptions that are otherwise exempt from withholding tax (or taxable at a reduced treaty rate) unless such shareholders furnish the Fund with proper certification of their foreign status.

The tax consequences to a foreign shareholder entitled to claim the benefits of an applicable tax treaty may be different from those described herein. Foreign shareholders are urged to consult their own tax advisers with respect to the particular tax consequences to them of an investment in the Fund, including the applicability of foreign taxes.

Effect of Future Legislation; Local Tax Considerations

The foregoing general discussion of U.S. federal income tax consequences is based on the Code and the Treasury Regulations issued thereunder as in effect on the date of this SAI. Future legislative or administrative changes or court decisions may significantly change the conclusions expressed herein, and any such changes or decisions may have a retroactive effect.

Rules of state and local taxation of ordinary income dividends, qualified dividends and capital gain dividends from regulated investment companies may differ from the rules for U.S. federal income taxation described above. Shareholders are urged to consult their tax advisers as to the consequences of these and other state and local tax rules affecting investment in the Fund.

PERFORMANCE CALCULATION

For purposes of quoting and comparing the performance of the Funds to that of other mutual funds and to other relevant market indices in advertisements or in reports to shareholders, performance may be stated in terms of total return. Under rules promulgated by the SEC, a fund’s advertising performance must include total return quotations calculated according to the following formula:

P(1 + T)n = ERV

Where: P = a hypothetical initial payment of $1,000

T = average annual total return

n = number of years (1, 5, or 10)

ERV = ending redeemable value of a hypothetical $1,000 payment, made at the beginning of the 1, 5, or 10 year period, at the end of such period (or fractional portion thereof).

Under the foregoing formula, the time periods used in advertising will be based on rolling calendar quarters, updated to the last day of the most recent quarter prior to submission of the advertising for publication, and will cover 1, 5, and 10 year periods of a Fund’s existence or such shorter period dating from the effectiveness of the Trust’s registration statement. In calculating the ending redeemable value, all dividends and distributions by a Fund are assumed to have been reinvested at net asset value as described in the prospectus on the reinvestment dates during the period. Total return, or “T” in the formula above, is computed by finding the average annual compounded rates of return over the 1, 5, and 10 year periods (or fractional portion thereof) that would equate the initial amount invested to the ending redeemable value. Any recurring account charges that might in the future be imposed by the Fund would be included at that time.

In addition to the total return quotations discussed above, a Fund may advertise its yield based on a 30-day (or one month) period ended on the date of the most recent balance sheet included in the Trust’s registration statement, computed by dividing the net investment income per share earned during the period by the maximum offering price per share on the last day of the period, according to the following formula:

a - b

YIELD = 2[( —— +1)6-1]

Where: a = dividends and interest earned during the period.

b = expenses accrued for the period (net of reimbursements).

c = the average daily number of shares outstanding during the period that were entitled to receive dividends.

d = the maximum offering price per share on the last day of the period.

Under this formula, interest earned on debt obligations for purposes of “a” above, is calculated by: (1) computing the yield to maturity of each obligation held by a Fund based on the market value of the obligation (including actual accrued interest) at the close of business on the last day of each month, or, with respect to obligations purchased during the month, the purchase price (plus actual accrued interest); (2) dividing that figure by 360 and multiplying the quotient by the market value of the obligation (including actual accrued interest as referred to above) to determine the interest income on the obligation for each day of the subsequent month that the obligation is in the Fund’s portfolio (assuming a month of 30 days); and (3) computing the total of the interest earned on all debt obligations and all dividends accrued on all equity securities during the 30-day or one month period. In computing dividends accrued, dividend income is recognized by accruing 1/360 of the stated dividend rate of a security each day that the security is in the Fund’s portfolio. For purposes of “b” above, Rule 12b-1 expenses are included among the expenses accrued for the period. Undeclared earned income, computed in accordance with generally accepted accounting principles, may be subtracted from the maximum offering price calculation required pursuant to “d” above.

30-day yield

The “30-day yield” is an “annualized” figure--the amount you would earn if you stayed in a Fund for a year and the Fund continued to earn the same net interest income throughout that year. To calculate 30-day yield, a Fund’s net investment income per share for the most recent 30 days is divided by the maximum offering price per share. To calculate “total return,” a Fund starts with the total number of shares that you can buy for $1,000 at the beginning of the period. Then the Fund adds all dividends and distributions paid as if they were reinvested in additional shares. This takes into account the Fund’s dividend distributions, if any. The total number of shares is multiplied by the net asset value on the last day of the period and the result is divided by the initial $1,000 investment to determine the percentage gain or loss. For periods of more than one year, the cumulative total return is adjusted to get an average annual total return. Yield is a measure of net dividend income. Average annual total return is a hypothetical measure of past dividend income plus capital appreciation. It is the sum of all parts of the Fund’s investment return for periods greater than one year. Total return is the sum of all parts of a Fund’s investment return. Whenever you see information on a Fund’s performance, do not consider the past performance to be an indication of the performance you could expect by making an investment in the Fund today.

Any quotation of performance stated in terms of yield will be given no greater prominence than the information prescribed under the SEC’s rules. In addition, all advertisements containing performance data of any kind will include a legend disclosing that such performance data represents past performance and that the investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.

GENERAL INFORMATION

Organization and Description of Shares of the Funds

The Trust was organized as a Delaware statutory trust (formerly known as a “business trust”) under the laws of the state of Delaware. The Trust’s Certificate of Trust was filed December 22, 1997. The Trust’s Declaration of Trust, dated as of December 22, 1997, permits the Board to issue an unlimited number of shares of beneficial interest with a par value of $0.01 per share in the Trust in an unlimited number of series of shares. The Trust consists of three series, the E.I.I. Realty Securities Fund, the E.I.I. International Property Fund, and the E.I.I. Global Property Fund. Each share of beneficial interest has one vote and shares equally in dividends and distributions when and if declared by a Fund and in the Fund’s net assets upon liquidation. All shares, when issued, are fully paid and nonassessable. There are no preemptive, conversion, or exchange rights. Fund shares do not have cumulative voting rights and, as such, holders of at least 50% of the shares voting for Trustees can elect all Trustees and the remaining shareholders would not be able to elect any Trustees. The Board may classify or reclassify any unissued shares of the Trust into shares of any series by setting or changing in any one or more respects, from time to time, prior to the issuance of such shares, the preference, conversion, or other rights, voting powers, restrictions, limitations as to dividends, or qualifications of such shares. Any such classification or reclassification will comply with the provisions of the 1940 Act. Shareholders of each series as created will vote as a series to change, among other things, a fundamental policy of the Fund and to approve the investment advisory agreement.

The Trust is not required to hold annual meetings of shareholders but will hold special meetings of shareholders when, in the judgment of the Board, it is necessary or desirable to submit matters for a shareholder vote. Shareholders have, under certain circumstances, the right to communicate with other shareholders in connection with requesting a meeting of shareholders for the purpose of removing one or more Trustees. Shareholders also have, in certain circumstances, the right to remove one or more Trustees without a meeting.

REPORTS

Shareholders receive reports at least semi-annually showing the Funds’ holdings and other information. In addition, shareholders receive annual financial statements that have been audited by the Funds’ independent registered public accounting firm. Shareholders receive quarterly Fund performance updates and review.

FINANCIAL STATEMENTS

The audited financial statements of the Domestic and International Funds, including the Financial Highlights for these Funds, for the year ended June 30, 2007, appearing in the Annual Report to Shareholders and the report thereon of Ernst & Young LLP, independent registered public accounting firm, appearing therein, are incorporated by reference in this SAI.

As the Global Fund is new, it has no financial statements.

PROXY VOTING SUMMARY

The Trust has delegated to E.I.I. the responsibility for voting proxies of issuers of securities held in each Fund’s portfolio. E.I.I. has adopted the proxy voting polices and procedures of its parent, European Investors Incorporated. These policies and procedures are attached in the Appendix to this SAI. The proxy voting policies and procedures of European Investors Incorporated are designed to meet all applicable fiduciary standards and to protect the rights and enhance the economic welfare of those to whom we owe a fiduciary duty.

European Investors Incorporated’s Proxy Committee, including portfolio managers, analysts, marketing, client service personnel, compliance and operations personnel, is responsible for establishing and maintaining our policies and procedures. The Committee reviews these policies and procedures periodically and will make such changes, as it believes are necessary. Our guidelines and voting actions are to a large extent aligned with the voting recommendations of Institutional Shareholder Services (“ISS”), a third-party proxy voting service to which we subscribe. ISS provides extensive research on individual proxy issues and publishes this information in reports that are reviewed by our analysts.

We review all proxies for which we have voting responsibility, and vote all proxies according to our written guidelines, taking into account ISS recommendations and/or investment team input. Our guidelines address such areas as elections of directors and auditors, corporate defenses, corporate governance, mergers and acquisitions, corporate restructuring, state of incorporation, proxy contest issues, executive compensation, employee considerations and social issue proposals.

The guidelines we have written reflect our normal voting position on certain issues, and will not apply in every situation. The guidelines are intended to generally cover both U.S. and international proxy voting, although due to country differences and requirements, international proxy voting may differ depending on individual facts and circumstances. Some issues require a case-by-case analysis prior to voting and, in those situations; input from our investment team will normally be solicited. Even when our guidelines specify how we normally vote on particular issues, we may change the vote if it is reasonably determined to be in our clients’ best interest.

To ensure that voting responsibilities are met, our third party vendor reconciles client proxies it receives from the custodian with client holdings from our portfolio system through a direct data link. The procedures are also intended to ensure that proxies are voted consistent with voting guidelines and that the best proxy analysis is used for each issue, and all votes are recorded and justified. Any variance from stated policy is carefully noted, including the rationale for the variance.

The Trust, in accordance with SEC rules, annually will disclose on Form N-PX its proxy voting record. The Trust also will post its voting record on a specified SEC website. In addition, the Trust will post its voting record on its own public website. If the Trust does not post its voting record on a public website, it will send a copy of the voting record within three business days, free of charge, to anyone who requests a copy by calling toll-free 1-888-323-8912.

APPENDIX

E.I.I. REALTY SECURITIES TRUST

Proxy Voting Policies and Procedures

E.I.I. Realty Securities Trust (the Trust) has adopted these Proxy Voting Policies and Procedures (“Policies”) to:

·	ensure that proxies are voted in the best interests of shareholders of the Fund with a view toward maximizing the value of their investments;

·	address any conflicts that may arise between shareholders on the one hand; and “affiliated persons” of the Fund or of E.I.I. Realty Securities, Inc. (“E.I.I.”) (all referred to as “Affiliated Persons”) on the other;

·	provide for oversight of proxy voting by the Board of Trustees of the Trust, and

·	provide for the disclosure of the Fund’s proxy voting record and these Policies.

I.	Delegation to E.I.I.

The Trust hereby delegates the responsibility for voting proxies on behalf of the Fund with respect to all equity securities held by the Fund to E.I.I. in accordance with these Policies, subject to oversight by the Trustees.

The Trustees have reviewed E.I.I.’s Proxy Voting Summary and Guidelines (the “Procedures”) and have determined that they are reasonably designed to ensure that E.I.I. will vote all proxies in the best interests of the shareholders, untainted by conflicts of interests. The Procedures (attached as Exhibit A), are adopted as part of these Policies. The Board of Trustees must approve any material change in the Procedures before they become effective with respect to the Fund.

II.	Disclosure

A.	Voting Records

In accordance with Rule 30b1-4 under the Investment Company Act of 1940, as amended, the Trusts shall file annually with the Securities and Exchange Commission (the “SEC”) on Form N-PX (or such other form as the SEC may designate) the Fund’s proxy voting record for the most recent twelve–month period ended June 30 (the “Voting Record”). The Fund’s Voting Record shall be available upon request within three (3) business days after filing the Voting Record with the SEC.

The Voting Record shall consist of, for each proposal on which the Fund was entitled to vote with respect to a security held by the Fund (for the designated time period of the Voting Record):

·	the name of the issuer of the portfolio security

·	the exchange ticker symbol of the portfolio security

·	the CUSIP number for the portfolio security

·	the shareholder meeting date

·	a brief identification of the matter voted upon

·	whether the matter was proposed by the issuer or by a security holder

·	whether the fund cast a vote and, if so, how the vote was cast

·	whether the vote cast was for or against management of the issuer

B.	Disclosure of the Policies and How to Obtain Information

1. Description of the policies. The Fund’s statement of additional information (“SAI”) shall describe these Policies, including the Procedures.

2. How to obtain a copy of the Policies. The Funds shall disclose in all shareholder reports that a description of these Policies is available

·	without charge, upon request, by calling a toll-free number; and

·	at the SEC’s website, www.sec.gov.

3. How to obtain a copy of proxy votes. The Fund shall disclose in all shareholder reports and the SAI that information regarding how the Fund voted proxies relating to portfolio securities is available:

·	without charge, upon request, by calling a toll-free number; and

·	at the SEC’s website, www.sec.gov.

The Fund must send the information disclosed in their most recently filed report on Form N-PX within three (3) business days of receipt of a request for this information, by first-class mail or other means designed to ensure equally prompt delivery.

III.	Review by Trustees

E.I.I. shall report to the Trustees, at least annually, the Voting Record of the Fund in a form as the Trustees may request. This report shall:

·	describe any conflicts of interests that were identified in connection with the voting of securities under the Procedures and how they were addressed; and

·	summarize all votes that were made other than in accordance with the Procedures.

The Trustees will review these Policies and the Procedures at the same meeting, and determine whether any amendments to these Policies or the Procedures would be appropriate.

Adopted: August 25, 2003

European Investors

Proxy Voting Summary

European Investors takes seriously the responsibility of voting proxies on behalf of our clients. Our policies and procedures are designed to meet all applicable fiduciary standards and to protect the rights and enhance the economic welfare of those to whom we owe a fiduciary duty.

A Proxy Committee, including portfolio managers, analysts, marketing and client service personnel, compliance and operations personnel, is responsible for establishing and maintaining our policies and procedures. The Committee reviews these policies and procedures periodically and will make such changes, as it believes are necessary. Our guidelines and voting actions are to a large extent aligned with the voting recommendations of Institutional Shareholder Services (“ISS”), a third-party proxy voting service to which we subscribe. ISS provides extensive research on individual proxy issues and publishes this information in reports that are reviewed by our analysts.

We review all proxies for clients’ whom we have voting responsibility, and vote all proxies according to our written guidelines, taking into account ISS recommendations and/or investment team input. Our guidelines address such areas as elections of directors and auditors, corporate defenses, corporate governance, mergers and acquisitions, corporate restructuring, state of incorporation, proxy contest issues, executive compensation, employee considerations and social issue proposals.

The guidelines we have written reflect our normal voting position on certain issues, and will not apply in every situation. The guidelines are intended to generally cover both U.S. and international proxy voting, although due to country differences and requirements, international proxy voting may differ depending on individual facts and circumstances. Some issues require a case-by-case analysis prior to voting and, in those situations, input from our investment team will normally be solicited. Even when our guidelines specify how we normally vote on particular issues, we may change the vote if it is reasonably determined to be in our clients’ best interest.

We maintain proxy voting records for all accounts and make these records available to clients at their request.

EUROPEAN INVESTORS

Proxy Voting Guidelines

I	External Auditor

Auditors

Vote for proposals to ratify auditors, unless there is a reason to believe the auditing firm has a financial interest in or association with the company and is, therefore, not independent; or there is reason to believe the auditor has rendered an opinion that is neither accurate nor indicative of the company’s financial position.

II	Board of Directors

A.	Director Nominees

Votes on director nominees are normally voted in accordance with ISS analysis and recommendation on each individual proposal. Evaluations are based on the following criteria (and any others that may be deemed relevant by ISS or European Investors):

Long term corporate performance record based on increases in shareholder wealth, earnings, or financial strength, executive compensation, director compensation, corporate governance provisions and takeover activity, criminal activity, investment in the company, interlocking directorships, inside, outside, and independent directors, board composition, number of other board seats and support of majority-supported shareholder proposals.

B.	Director Indemnification and Liability Protection

1. Proposals concerning director and officer indemnification and liability protection are normally voted in accordance with ISS analysis and recommendation on each individual proposal.

2. Vote against proposals to limit or eliminate entirely the liability for monetary damages of directors and officers for violating the duty of care.

3. Vote against indemnification proposals that would expand coverage beyond just legal expenses to acts like negligence that are more serious violations of fiduciary obligation than mere carelessness.

4. Vote for only those proposals providing such expanded coverage on cases when a director’s or officer’s legal defense was unsuccessful if: (i) the director was found to have acted in good faith and in a manner that he reasonably believed was in the best interest of the company, and (ii) if only the director’s legal expenses would be covered.

C.	Director Duties and Stakeholder Laws

Vote against management or shareholder proposals to allow the board of directors to consider the interests of “stakeholders” or “non-shareholder constituents,” unless these proposals make it clear that these interests are to be considered in the context of the prevailing commitment to shareholders.

D.	Director Nominations

Vote for shareholder proposals asking that management allow large shareholders equal access to management’s proxy to discuss and evaluate management’s director nominees, and/or to nominate and discuss shareholder nominees to the board.

E.	Inside Versus Independent Directors

1. Shareholder proposals asking that boards be comprised of a majority of independent directors are normally voted in accordance with ISS analysis and recommendation on each individual proposal.

2. Vote for shareholder proposals asking that board audit, compensation and/or nominating committees be comprised exclusively of independent directors.

F.	Stock Ownership Requirements

Vote against shareholder proposals requiring directors to own a minimum amount of company stock in order to qualify as a director, or to remain on the board.

G.	Term of Office

Vote against proposals to limit the tenure of outside directors.

III	Proxy Contests and Corporate Defenses

A.	Proxy Contests for Board Seats

All votes in a contested election of directors are normally voted in accordance with ISS analysis and recommendation on each individual proposal.

B.	Classified Boards

1. Vote against proposals to classify the board.

2. Vote for proposals to repeal a classified board, and to elect all directors annually.

C.	Cumulative Voting

1. Vote for proposals to permit cumulative voting in the election of directors.

2. Vote against proposals to eliminate cumulative voting in the election of directors.

D.	Director Nominations

Vote against management proposals to limit shareholders’ ability to nominate directors.

E.	Shareholders’ Right to Call Special Meetings

1. Vote against management proposals to restrict or prohibit shareholders’ ability to call special meetings.

2. Vote for shareholder proposals that remove restrictions on the right of shareholders to act independently of management.

F.	Shareholder Action by Written Consent

1. Vote against management proposals to restrict or prohibit shareholders’ ability to take action by written consent.

2. Vote for shareholder proposals to allow or make easier shareholder action by written consent.

G.	Size of the Board

1. Vote against management proposals that give management the ability to alter the size of the Board without shareholder approval.

2. Vote for proposals that seek to fix the size of the Board.

H.	Shareholders’ Ability to Remove Directors

1. Vote against proposals that state directors may be removed only for cause.

2. Vote for proposals to restore shareholder ability to remove directors with or without cause.

3. Vote against proposals that provide that only continuing directors may elect replacements to fill board vacancies.

4. Vote for proposals that permit shareholders to elect directors to fill board vacancies.

IV	Tender Offers and Corporate Defenses

A.	Fair Price Provisions

1. Vote for management proposals to adopt a fair price provision, as long as the shareholder vote requirement imbedded in the provision is no more than a majority of the disinterested shares.

2. Vote for shareholder proposals to lower the shareholder vote requirements imbedded in existing fair price provisions.

Greenmail

1. Vote for proposals to adopt anti-greenmail charter or bylaw amendments or otherwise restrict a company’s ability to make greenmail payments.

2. Vote in accordance with ISS analysis and recommendation on each individual proposal regarding anti-greenmail proposals when they are bundled with other charter or bylaw amendments.

3. Vote on a case-by-case basis regarding restructuring plans that involve the payment of pale greenmail.

C.	Poison Pills

1. Vote for shareholder proposals asking that a company submit its poison pill for shareholder ratification.

2. Shareholder proposals to redeem a company’s poison pill are normally voted in accordance with ISS analysis and recommendation on each individual proposal.

3. Management proposals to ratify a poison pill are normally voted in accordance with ISS analysis and recommendation on each individual proposal.

D.	Stakeholder Provisions

Vote against management proposals allowing the board to consider stakeholders’ (outside constituencies’) interests when faced with a tender offer.

E.	Super-majority Vote Requirement to Approve Mergers

1. Vote for shareholder proposals to lower super-majority vote requirements for mergers and other business combinations.

2. Vote against management proposals to require a super-majority shareholders’ vote to approve mergers and other significant business combinations.

F.	Super-majority Shareholder Vote Requirements to Amend Charter or Bylaws

1. Vote for shareholder proposals to lower super-majority vote requirements to amend any bylaw or charter provision.

2. Vote against management proposals to require a super-majority vote to amend any bylaw or charter provision.

G.	Unequal Voting Rights

Vote against proposals for dual class exchange offers and dual class recapitalizations.

H.	Existing Dual Class Companies

1. Vote for shareholder proposals asking that a company report to shareholders on the financial impact of its dual class voting structure.

2. Vote for shareholder proposals asking that a company submit its dual class voting structure for shareholder ratification.

I.	White Squire Placements

Vote for shareholder proposals to require approval of blank check preferred stock issues for other than general corporation purposes. (e.g. raising capital or making acquisitions in the normal course of business).

V	Miscellaneous Corporate Governance Provisions

A.	Abstention Votes

Vote for shareholder proposals recommending that votes to “abstain” not be considered votes “cast” at an annual or special meeting, unless that consideration is required by state law.

B.	Annual Meetings

1. Vote for management proposals asking for authority to vote at the meeting for “other matters” not already described in the proxy statement unless there is a reason to believe the other matters involve substantive issues.

2. Vote against shareholder proposals to rotate the time or place of annual meetings.

C.	Confidential Voting and Independent Tabulation and Inspections

Vote for proposals to adopt a policy that comprises both confidential voting and the use of independent vote tabulators of elections.

D.	Equal Access

Vote for shareholder proposals to allow significant company shareholders equal access to management’s proxy material in order to evaluate and propose voting recommendations on proxy proposals and director nominees, and/or to nominate their own candidates to the board.

E.	Bundled Proposals

Bundled or “conditioned” proxy proposals are normally voted in accordance with ISS analysis and recommendation on each individual proposal. (e.g., management proposals to provide shareholders a special dividend that are bundled with other charter or bylaw changes).

F.	Shareholder Advisory Committee

1. Shareholder proposals to establish shareholder advisory committees are normally voted in accordance with ISS analysis and recommendation on each individual proposal.

2. Decisions on whether or not to join a shareholder advisory committee are normally voted in accordance with ISS analysis and recommendation on each individual proposal.

G.	Disclosure Proposals

Shareholder proposals requesting fuller disclosure of company policies, plans or business practices are normally voted in accordance with ISS analysis and recommendation on each individual proposal.

H.	Conflict of Interest

All votes submitted by European Investors on behalf of its clients are not biased in any way by other clients of European Investors. For example, the fact that XYZ Corporation is a client of European Investors does not impact the proxy voting of XYZ stock that may be held in the portfolios of other clients. All proxy voting proposals are voted with regard to enhancing shareholder wealth and voting power (unless otherwise directed by a client with respect to that client’s stock).

VI	Capital Structure

A.	Common Stock Authorization

1. Proposals to increase the number of shares of common stock the board is authorized to issue are normally voted in accordance with ISS analysis and recommendation on each individual proposal.

2. Proposals to increase the number of shares of common stock authorized for issue are normally voted in accordance with ISS analysis and recommendation on each individual proposal.

3. Vote against proposed common share authorizations that increase existing authorization by more than 100 percent unless a clear need for the excess shares is presented by the company.

B.	Stock Distributions: Splits and Dividends

Vote for management proposals to increase common share authorization for a stock split, provided that the increase in authorized shares following the split is not greater than 100 percent of existing authorized shares.

C.	Reverse Stock Splits

Vote for management proposals to implement a reverse stock split that also reduces the number of authorized common shares to a level that does not represent an increase of more than 100 percent of existing authorized common shares.

D.	Blank Check Preferred Stock

1. Vote against management proposals authorizing the creation of new classes of preferred stock that have unspecified rights including voting, conversion or dividend distribution rights.

2. Management proposals to increase the number of authorized blank check preferred shares are normally voted in accordance with ISS analysis and recommendation on each individual proposal.

3. Vote for shareholder proposals asking that any placement of blank check preferred stock be first approved by shareholders, unless the placement is for ordinary business purposes.

4. Vote for proposals to create “blank check” preferred stock in cases when the company expressly states that the stock will not be used as a takeover defense or carry superior voting rights.

E.	Adjustments to Par Value of Common Stock

Vote for management proposals to reduce the par value of common stock.

F.	Preemptive Rights

Proposals to provide shareholders with preemptive rights are normally voted in accordance with ISS analysis and recommendation on each individual proposal.

G.	Debt Restructuring

Proposals to increase common and/or preferred shares and to issue shares as part of a debt-restructuring plan are normally voted in accordance with ISS analysis and recommendation on each individual proposal.

H.	Share Repurchase Programs

Vote for management proposals to institute open-market share repurchase plans in which all shareholders may participate on equal terms.

VII	Executive Compensation/Employee Consideration

A.	Incentive Plans

All proposals on incentive compensation plans (including option plans) for executives and directors are normally voted in accordance with ISS analysis and recommendation on each individual proposal. The evaluation is based on the following considerations (and any other that may be deemed relevant by ISS or European Investors):

Necessity, reasonableness test, participation, dilution, shares available, exercise and payment terms, change-in-control provisions, types of awards, company specific dilution cap calculated, present value of all incentives, derivative awards, cash/bonus compensation, shareholder wealth transfer (dollar amount of shareholders’ equity paid it’s executives), voting power dilution - potential percent reduction in relative voting power, criteria for awarding grants, and process for determining pay levels.

B.	Shareholder Proposals to Limit Executive and Director Compensation

1. Generally, vote for shareholder proposals that seek additional disclosure of executive and director compensation information.

2. All other shareholder proposals that seek to limit executive and director compensation are normally voted in accordance with ISS analysis and recommendation on each individual proposal.

C.	Golden Parachutes

1. Vote for shareholder proposals to have golden and tin parachutes submitted for shareholder ratification.

2. Proposals to ratify or cancel golden or tin parachutes are normally voted in accordance with ISS analysis and recommendation on each individual proposal.

D.	Employee Stock Ownership Plans (ESOP)

1. Vote for proposals requesting shareholder approval to implement Employee Stock Ownership Plans, or increase authorized shares for existing Employee Stock Ownership Plans except when the number of shares allocated to the ESOP is excessive (i.e. greater than 5% of outstanding shares).

2. Votes directly pertaining to the approval of an ESOP or a leveraged ESOP are normally voted in accordance with ISS analysis and recommendation on each individual proposal. Our evaluation is based on the following criteria (and any other that may be deemed relevant):

Reasonableness test, participation, administration, shares available, exercise and payment terms, change-in-control provisions, types of awards and dilution.

E.	401(k) Employee Benefit Plans

Vote for proposals to implement a 401(k) savings plan for employees.

F.	Discounted Options/Restricted Stock

Vote against discounted options and restricted stock without performance criteria (except restricted stock in U.S.-style stock option plans, which are normally voted in accordance with ISS analysis and recommendation on each individual proposal.)

VIII	State of Incorporation

A.	Re-Incorporation Proposals

Proposals to change a corporation’s state of incorporation are normally voted in accordance with ISS analysis and recommendation on each individual proposal.

B.	State Takeover Statutes

Proposals to opt in or opt out of state takeover statutes are normally voted in accordance with ISS analysis and recommendation on each individual proposal.

C.	State Fair Price Provisions

Proposals to opt out of S.F.P’s are normally voted in accordance with ISS analysis and recommendation on each individual proposal.

D.	Stakeholder Laws

Vote for proposals to opt out of stakeholder laws (allowing directors to weigh the interest of constituencies other than shareholders in the process of corporate decision making).

E.	Disgorgement Provisions

Proposals to opt out of disgorgement provisions are normally voted in accordance with ISS analysis and recommendation on each individual proposal.

IX	Mergers and Corporate Restructurings

A.	Mergers and Acquisitions

Votes on mergers and acquisitions are normally voted in accordance with ISS analysis and recommendation on each individual proposal. The voting decision depends on a number of factors, including:

Anticipated financial and operating benefits, offer price (cost vs. premium), prospects of the combined companies, how the deal was negotiated, changes in corporate governance and their impact on shareholder rights, and other pertinent factors discussed below.

B.	Corporate Restructurings

Votes on corporate restructuring proposals, including minority squeezeouts, leveraged buyouts, spin-offs, liquidations and asset sales, are normally voted in accordance with ISS analysis and recommendation on each individual proposal.

Spin-Offs

Votes on spin-offs are normally voted in accordance with ISS analysis and recommendation on each individual proposal, considering:

The tax and regulatory advantages, planned use of the sale proceeds, market focus and managerial incentives.

D.	Asset Sales

Votes on asset sales are normally voted in accordance with ISS analysis and recommendation on each individual proposal, considering:

The impact on the balance sheet/working capital, the value received for the asset, and the potential elimination of diseconomies.

E.	Liquidations

Votes on liquidations normally voted in accordance with ISS analysis and recommendation on each individual proposal, after reviewing: management’s efforts to pursue other alternatives; the appraisal value of the assets; and the compensation plan for executives managing the liquidation.

F.	Rights of Appraisal

Vote for shareholder proposals to provide rights of appraisal to dissenting shareholders.

G.	Changing Corporate Name

Vote for changing the corporate name.

X	Social Issues Proposals

A.	Social Issues Proposals

These issues are normally voted in accordance with ISS analysis and recommendation on each individual proposal, which is based on expected effect on shareholder value, and then voted accordingly.

Generally, vote for disclosure reports that seek additional information.

XI	Proxies Not Voted

A.	Shares Out on Loan

Proxies are not available to be voted when shares are out on loan through client securities lending programs with their custodians.

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933	[X]
Pre-Effective Amendment No. _____	[ ]
Post-Effective Amendment No. 15	[X]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940	[X]
Amendment No. 17

xImmediately upon filing pursuant to paragraph (b)	¨on ______ pursuant to paragraph (b)
¨60 days after filing pursuant to paragraph (a)(1)	¨on (date) pursuant to paragraph (a)(1)
¨75 days after filing pursuant to paragraph (a)(2)	¨on (date) pursuant to paragraph (a)(2) of rule 485.

Maximum Sales Charge (Load) Imposed on Purchases	None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends	None
Maximum Deferred Sales Charge	None
Redemption Fees	1.50%*
Exchange Fees	None
Maximum Account Fee	None

	Institutional Shares
Investment Advisory Fees	0.75%
Administration Fees	0.15%
Rule 12b-1 Distribution Fees	None
Other Expenses *	0.67%
Total Fund Operating Expenses **	1.57%

1 Year	3 Years
$102	$318

E.I.I. Global Property Fund — Risk/Return Summary	1
E.I.I. Global Property Fund — Fund Expenses	3
E.I.I. International Property Fund — Risk/Return Summary	4
E.I.I. International Property Fund — Fund Expenses	7
E.I.I. Realty Securities Fund — Risk/Return Summary	9
E.I.I. Realty Securities Fund — Fund Expenses	11
Principal Strategies and Related Risks	13
Portfolio Management and Fund Operations	19
Securities in which the Funds Invest	20
Investing in the Funds	21
Dividends, Distributions and Taxes	25
Additional Information	27
Other Information about the Funds	27
Other Securities and Investment Practices	28
Financial Highlights	30

	One Year	Since Inception⁽¹⁾

E.I.I. International Property Fund before taxes	59.78%	43.20%

E.I.I. International Property Fund after taxes on distributions ⁽²⁾	58.54%	42.33%

E.I.I. International Property Fund after taxes on distributions and sale of shares ⁽²⁾	39.27%	37.46%

European Public Real Estate Association (EPRA) Europe Index	67.01%	43.14%

European Public Real Estate Association (EPRA) Asia Index	36.48%	33.83%

FTSE EPRA/NAREIT Global Ex-U.S. Index⁽³⁾	46.67%	37.50%

⁽¹⁾ Inception date was July 1, 2004.
⁽²⁾After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on your tax situation and may differ from those shown and are not relevant if you hold your shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.
⁽³⁾Effective February 1, 2007, the International Fund utilizes the FTSE EPRA/NAREIT Global Ex-U.S. Index as its primary benchmark, as the Adviser has determined that the composition of this Index better reflects the manner in which the Fund is managed.

1 Year	3 Years	5 Years	10 Years
$102	$318	$552	$1225

	One Year	Five Years	Since Inception⁽¹⁾

E.I.I. Realty Securities Fund before taxes	33.98%	21.89%	15.31%

E.I.I. Realty Securities Fund after taxes on distributions ⁽²⁾	23.53%	16.38%	11.43%

E.I.I. Realty Securities Fund after taxes on distributions and sale of shares ⁽²⁾	33.87%	17.49%	11.98%

NAREIT Equity Index	35.06%	23.20%	15.64%

Wilshire Real Estate Securities Index	35.85%	24.07%	16.42%

⁽¹⁾ Inception date was June 11, 1998.
⁽²⁾After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on your tax situation and may differ from those shown and are not relevant if you hold your shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.

	For the periods ended December 31, 2006
Annualized Summary	1 Year	3 Years	Since Inception**
E.I.I. Global Property Offshore Separate Account* - Before taxes	60.88%	37.72%	39.16%
FTSE EPRA/NAREIT Global Index	42.33%	31.34%	34.52%

	Year Ended June 30, 2007		Year Ended June 30, 2006		Period Ended June 30, 2005 ¹
Net Asset Value, Beginning of Year	$	17.65	$	12.88	$	10.00
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net Investment Income		0.26²		0.22²		0.09
Net Gain on Securities (Realized and Unrealized)		7.21		4.78		2.88
Total from Investment Operations		7.47		5.00		2.97

LESS DISTRIBUTIONS
Net Investment Income		(0.39)		(0.09)		(0.04)
Net Capital Gains		(0.32)		(0.14)		(0.05)
Total Distributions		(0.71)		(0.23)		(0.09)

Net Asset Value, End of Year	$	24.41	$	17.65	$	12.88

TOTAL RETURN		42.61%		39.14%		29.68%

RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Year (thousands)	$	567,638	$	156,032	$	47,925

Ratio of Expenses to Average Net Assets		1.00%		1.00%		1.00%
Ratio of Expenses to Average Net Assets (Excluding Waivers and Assumptions of Expenses)		1.12%		1.23%		1.65%
Ratio of Net Investment Income to Average Net Assets		1.12%		1.39%		1.59%
Ratio of Net Investment Income to Average Net Assets (Excluding Waivers and Assumptions of Expenses)		1.00%		1.16%		0.94%
Portfolio Turnover Rate		20%		14%		27%

Officers and Trustees		Transfer Agent
Richard J. Adler, Chief Executive Officer and President		PFPC Inc.
		760 Moore Road
Lynn P. Marinaccio, Secretary		King of Prussia, Pennsylvania 19406
Michael J. Meagher, Treasurer and Chief Compliance Officer
Warren K. Greene, Independent Chairman and Trustee		Custodian
Joseph Gyourko, Independent Trustee		PFPC Trust Company
Christian A. Lange, Trustee		8800 Tinicum Boulevard
Juan M. Meyer, Independent Trustee		Philadelphia, Pennsylvania 19153

Investment Adviser and Administrator E.I.I. Realty Securities, Inc. 717 Fifth Avenue, 10th Floor		Independent Registered Public Accounting Firm Ernst & Young LLP
New York, New York 10022		5 Times Square
(212) 644-0794		New York, New York 10036

Sub-Administrator		Legal Counsel
PFPC Inc.		Kramer Levin Naftalis & Frankel LLP
4400 Computer Drive		1177 Avenue of the Americas
Westborough, Massachusetts 01581		New York, New York 10036

Distributor
PFPC Distributors, Inc.
760 Moore Road
King of Prussia, Pennsylvania 19406

(a)(1)	Corrected Certificate of Trust as of December 22, 1997. ⁽¹⁾
(a)(2)	Trust Instrument dated December 22, 1997. ⁽²⁾
(b)	Amended By-Laws dated May 21, 2001. ⁽³⁾
(c)	The rights of holders of the securities being registered are set out in Articles II, VII, IX and X of the Trust Instrument referenced in Exhibit (a)(2) and Article IV of the By-Laws referenced in Exhibit (b) above.
(d)	Investment Advisory Agreement between Registrant and E.I.I. Realty Securities, Inc. dated June 4, 1998. ⁽⁴⁾
(e)(1)	Form of Distribution Agreement between E.I.I. Realty Securities, Inc. and PFPC Distributors, Inc. dated April 1, 2006. ⁽⁵⁾
(e)(2)	Form of Agreement between European Investors Inc. and PFPC Distributors, Inc. dated March 8, 2006 regarding payment of fees under the Distribution Agreement. ⁽⁵⁾
(f)	None.
(g)	Custodian Services Agreement between PNC Bank, National Association and Registrant dated June 4, 1998. ⁽⁴⁾
(h)(1)	Administration Agreement between Registrant and E.I.I. Realty Securities, Inc. dated June 4, 1998.⁽⁴⁾
(h)(2)	Sub-Administration and Accounting Services Agreement between European Investors Incorporated, Registrant and PFPC Inc. dated June 4, 1998.⁽⁴⁾
(h)(3)	Transfer Agency Services Agreement between PFPC Inc. and Registrant dated June 4, 1998.⁽⁴⁾
(h)(4)	Anti-Money Laundering and Privacy Amendment to Transfer Agency and Services Agreement and Sub-Administration and Accounting Services Agreement dated May 20, 2002. ⁽⁶⁾
(i)(1)	Not applicable
(i)(2)	Consent of Kramer Levin Naftalis & Frankel LLP, Counsel for Registrant.
(j)	Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm for Registrant.
(k)	Not applicable.
(l)	Investment letter re: initial $100,000 capital.⁽⁴⁾
(m)(1)	Distribution Plan pursuant to Rule 12b-1, with Form of Shareholder Servicing Agreement and Form of Selected Dealer Agreement, for the Investor Shares of Registrant.⁽⁴⁾
(m)(2)	Shareholder Servicing Plan, with Form of Shareholder Servicing Agreement, for the Investor Shares and Adviser Shares of Registrant .⁽⁴⁾
(o)	Rule 18f-3 Multiple Class Plan.⁽⁴⁾
(p)(1)	Registrant’s Code of Ethics.⁽²⁾
(p)(2)	Registrant’s adviser’s Code of Ethics
	Powers of Attorney of Warren K. Greene and Joseph Gyourko⁽²⁾

Name	Position(s) with Distributor

Steven Turowski	President; Chief Executive Officer

Michael Denofrio	Director
(i) Nicholas Marsini	(ii) Director

Rita G. Adler	Chief Compliance Officer
John Munera	Anti-Money Laundering Officer
Jodi Jamison	Chief Legal Officer
Bradley A. Stearns	Secretary; Clerk
Julie Bartos	Assistant Secretary; Assistant Clerk

Charlene Wilson	Treasurer; Chief Financial Officer; Financial & Operations Principal
Maria Schaffer	Assistant Treasurer; Controller

Bruno Di Stefano	Vice President
Susan K. Moscaritolo	Vice President

SIGNATURE	TITLE
/s/ Richard J. Adler Richard J. Adler	Chief Executive Officer and President
/s/ Michael J. Meagher Michael J. Meagher	Treasurer
/s/ Warren K. Greene Warren K. Greene	Chairman of the Board and Trustee
/s/ Joseph Gyourko Joseph Gyourko	Trustee
/s/ Juan M. Meyer Juan M. Meyer	Trustee
/s/ Christian A. Lange Christian A. Lange	Trustee

EX-99.i	Consent of Kramer Levin Naftalis & Frankel LLP, Counsel for Registrant.
EX-99.j	Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm for Registrant.
EX-99.p	Registrant’s adviser’s Code of Ethics