-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PrL5iICAczeGw/8u4CPBUyYpsaY1N17P03rDcGiXeKt3Z5ZWnS2GEoK5cQK94TNd r2RbFRPzSvg+U+Axeo4hjg== 0000912057-01-511031.txt : 20010430 0000912057-01-511031.hdr.sgml : 20010430 ACCESSION NUMBER: 0000912057-01-511031 CONFORMED SUBMISSION TYPE: 485APOS PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20010427 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BARR ROSENBERG SERIES TRUST CENTRAL INDEX KEY: 0000832545 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: CA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 485APOS SEC ACT: SEC FILE NUMBER: 033-21677 FILM NUMBER: 1614061 FILING VALUES: FORM TYPE: 485APOS SEC ACT: SEC FILE NUMBER: 811-05547 FILM NUMBER: 1614062 BUSINESS ADDRESS: STREET 1: 3435 STELZER RD STREET 2: C/O FURMAN SELZ CITY: COLUMBUS STATE: OH ZIP: 43219 BUSINESS PHONE: 2128083942 MAIL ADDRESS: STREET 1: C/O FURMAN SELZ STREET 2: 237 PARK AVE CITY: NEW YORK STATE: NY ZIP: 10017 FORMER COMPANY: FORMER CONFORMED NAME: ROSENBERG SERIES TRUST DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: ROSENBERG SMALL CAPITALIZATION FUND DATE OF NAME CHANGE: 19881030 485APOS 1 a2044516z485apos.txt FORMN1A_2405 As filed with the Securities and Exchange Commission on April 27, 2001 Registration Nos. 33-21677, 811-5547 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-1A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X / ---- Pre-Effective Amendment No. / / ---- Post-Effective Amendment No. 36 / X / ---- REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / X / ---- Amendment No. 39 / X / ---- BARR ROSENBERG SERIES TRUST (Exact Name of Registrant as Specified in Charter) c/o AXA Rosenberg Investment Management LLC, Four Orinda Way, Building E, Orinda, CA 94563 (Address of Principal Executive Offices) (Zip code) 925-254-6464 (Registrant's Telephone Number, including Area Code) Name and address of agent for service: Copies to: --------------------- ---------- Kenneth Reid J.B. Kittredge, Esq. AXA Rosenberg Investment Ropes & Gray Management LLC One International Place Four Orinda Way Boston, MA 02110-2624 Building E Orinda, CA 94563 Approximate Date of Proposed Public Offering: Continuous. It is proposed that this filing will become effective (check appropriate box): / / Immediately upon filing pursuant to paragraph (b) / / On (date) pursuant to paragraph (b) / / 60 days after filing pursuant to paragraph (a)(1) / / On (date) pursuant to paragraph (a)(1) / X / 75 days after filing pursuant to paragraph (a)(2) / / On (date) pursuant to paragraph (a)(2) of Rule 485. If appropriate, check the following box: / / This post-effective amendment designates a new effective date for a previously filed post-effective amendment. NOTE: THIS AMENDMENT RELATES SOLELY TO SHARES OF BENEFICIAL INTEREST IN THE AXA ROSENBERG EUROPEAN FUND. INFORMATION CONTAINED IN THE TRUST'S REGISTRATION STATEMENT RELATING TO THE OTHER SERIES OF THE TRUST IS NEITHER AMENDED NOR SUPERSEDED HEREBY. INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY SUCH SECURITIES BE ACCEPTED PRIOR TO THE TIME SUCH REGISTRATION STATEMENT BECOME EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION, OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. BARR ROSENBERG SERIES TRUST AXA ROSENBERG EUROPEAN FUND JULY 11, 2001 Barr Rosenberg Series Trust is an open-end management investment company offering ten diversified portfolios with different investment objectives and strategies, including the AXA Rosenberg European Fund. The Fund's investment adviser is AXA Rosenberg Investment Management LLC. THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIME. SHAREHOLDER SERVICES 1-800-555-5737 Institutional Shares 1-800-447-3332 Investor Shares TABLE OF CONTENTS
PAGE ---- RISK/RETURN SUMMARY......................................... 2 AXA ROSENBERG EUROPEAN FUND................................. 2 FEES AND EXPENSES........................................... 3 INVESTMENT OBJECTIVE AND PRINCIPAL INVESTMENT STRATEGIES.... 5 PRINCIPAL RISKS............................................. 5 CERTAIN ADDITIONAL INVESTMENT TECHNIQUES AND RELATED RISKS..................................................... 7 PERFORMANCE INFORMATION FROM THE ADVISER'S OTHER SUBSTANTIALLY SIMILAR ACCOUNTS............................ 9 THE ADVISER'S GENERAL INVESTMENT PHILOSOPHY................. 11 MANAGEMENT OF THE TRUST..................................... 13 MULTIPLE CLASSES............................................ 17 PURCHASING SHARES........................................... 19 IRA ACCOUNTS................................................ 20 REDEMPTION OF SHARES........................................ 21 EXCHANGING SHARES........................................... 22 HOW THE TRUST PRICES SHARES OF THE FUND..................... 23 DISTRIBUTIONS............................................... 24 TAXES....................................................... 24 OTHER INFORMATION........................................... 25
1 RISK/RETURN SUMMARY The following is a summary of certain key information about the AXA Rosenberg European Fund (the "Fund"). You will find additional information about the Fund, including a detailed description of the risks of an investment in the Fund, after this Summary. This Summary identifies the Fund's investment objective, principal investment strategies and principal risks. The principal risks of the Fund are identified and more fully discussed beginning on page 5. You can find more detailed descriptions of the Fund further back in this Prospectus. Please be sure to read this additional information BEFORE you invest. Other important things for you to note: - You may lose money by investing in the Fund. - An investment in the Fund is not a deposit in a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. AXA ROSENBERG EUROPEAN FUND INVESTMENT OBJECTIVE The Fund seeks to provide long-term capital appreciation greater than that of the Morgan Stanley Capital International Europe Index (the "MSCI Europe Index") on a rolling three-year basis. SUMMARY OF PRINCIPAL INVESTMENT STRATEGIES The Fund invests primarily in equity securities of companies that are traded principally in regulated markets across Europe. Ordinarily, at least [ ]% of the Fund's total assets will be invested in these securities. The Fund will place relatively greater emphasis on capital appreciation than on current income. The Fund may also temporarily hold a portion of its assets not invested in these equity securities in "cash equivalents" -- highly liquid short-term, interest-bearing securities. The Adviser may also effect investments in the European market by utilizing futures, options and other derivative instruments on the European stock indices. As noted above, the Fund measures its return against that of the MSCI Europe Index. The MSCI Europe Index is the equity index prepared by Morgan Stanley Capital International, currently comprised of 15 developed European markets, including the United Kingdom, based on large and medium capitalization securities which are sorted by industry group and selected, at full market capitalization weight, on the basis of investability (as determined by size, long and short term volume and free float). The Fund's Investment Adviser, AXA Rosenberg Investment Management LLC (the "Adviser") uses fundamental and quantitative investment principles to determine which securities to buy and sell. Using these principles, the Adviser employs a bottom-up approach based on two stock selection models: (1) its Appraisal Model, which estimates a fair value for each company in the Adviser's database based on various fundamental data, and (2) its Near-Term prospects model, which estimates year-ahead earnings based on fundamental data as well as investor sentiment data such as analysts' earnings estimates and broker buy/ sell recommendations. These models tend to produce a "value" style of investment by favoring securities believed to be selling below a price that would accurately value the underlying company. The appraisal model is more likely to identify stocks that have lower price-to-earnings and price-to-book ratios (as compared to companies in the same industry) as attractive for purchase. While the Fund's portfolio has a modest value bias, there are other factors beyond value/growth exposures that affect the Fund's performance, such as industry exposures and risks associated with specific individual stock selections. For a more detailed description of the Adviser's stock selection models, see "The Adviser's General Investment Philosophy" below. 2 SUMMARY OF PRINCIPAL RISKS As with any stock mutual fund, you may lose money if you invest in the Fund. Among the principal risks that could adversely affect the value of the Fund's shares and cause you to lose money on your investment are: - INVESTMENT RISKS. The value of Fund shares may vary depending on external conditions affecting the Fund's portfolio. These conditions depend upon market, economic, political, regulatory and other factors. - MANAGEMENT RISK. Any actively managed investment portfolio is subject to the risk that its investment adviser will make poor stock selections. The Adviser will apply its investment techniques and risk analyses in making investment decisions for the Fund, but there can be no guarantee that they will produce the desired results. - PORTFOLIO TURNOVER. The Fund's portfolio turnover may exceed 100%. Higher portfolio turnover may result in increased transaction costs, which in turn may reduce the Fund's return. A high portfolio turnover rate may also result in negative tax consequences to shareholders. - FOREIGN INVESTMENT RISK. As a result of its foreign investments, the Fund may experience more rapid and extreme changes in value than funds that invest solely in securities of U.S. companies. This is because the securities markets of many foreign countries are relatively small, with a limited number of companies representing a small number of industries. Moreover, issuers of foreign securities are usually not subject to the same degree of regulation as U.S. issuers. Reporting, accounting and auditing standards of foreign countries differ, in some cases significantly, from U.S. standards. Also, nationalization, expropriation or confiscatory taxation, currency blockage, political changes or diplomatic developments could adversely affect the Fund's investments in a foreign country. - CURRENCY RISK. As a result of its investments in securities denominated in, and/or receiving revenues in, foreign currencies, the Fund will be subject to currency risk. This is the risk that those currencies will decline in value relative to the U.S. Dollar. In that event, the dollar value of these types of investments would be adversely affected. - DERIVATIVES RISK. As noted above, the Adviser may utilize derivative instruments, which are financial contracts whose value depends upon, or is derived from, the value of an underlying index. In addition to other risks such as the credit risk of the counterparty, derivatives involve the risk of mispricing or improper valuation and the risk that changes in the value of the derivative may not correlate perfectly with the relevant indices. For a more detailed description of these and other risks associated with an investment in the Fund, turn to page 5. PERFORMANCE INFORMATION The Fund does not have performance information because it is not yet operational. FEES AND EXPENSES FEES AND EXPENSES These tables describe the fees and expenses that you may pay if you buy and hold shares of the Fund. 3 AXA ROSENBERG EUROPEAN FUND [TO BE UPDATED.]
SHAREHOLDER FEES (PAID DIRECTLY FROM YOUR INVESTMENT): - -------------------------------------------------------------------------------------------------------------------- INSTITUTIONAL INVESTOR A B C ------------- -------- -------- -------- -------- Maximum Sales Charge (Load)................ None None 4.75% 5.00% 2.00% Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price)................................... None None 4.75%(a) None 1.00% Maximum Deferred Sales Charge (Load)....... None None None 5.00%(b) 1.00%(c) Maximum Sales Charge (Load) Imposed on Reinvested Dividends..................... None None None None None Redemption Fee............................. None None None None None Exchange Fee............................... None None None None None
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS) - -------------------------------------------------------------------------------------------------------------------- CLASS OF SHARES INSTITUTIONAL INVESTOR A B C - ------------------------------------------- ------------- -------- -------- -------- -------- Management Fees............................ 0.75% 0.75% 0.75% 0.75% 0.75% Distribution and Shareholder Service (12b-1) Fees............................. None 0.25% 0.50% 1.00% 1.00% Other Expenses(d).......................... % % % % Total Annual Fund Operating Expenses....... % % % % % Fee Waiver and/or Expense Reimbursement(e)......................... % % % % % Net Expenses............................... 1.25% % % % %
- ------------------------ (a) Class A Shares may be sold at net asset value without payment of any sales charge to the following entities: (i) Pension and profit sharing plans, pension funds and other company-sponsored benefit plans; and (ii) "Wrap" accounts for the benefit of clients of broker-dealers, financial institutions or financial planners, provided they have entered an agreement with the Trust or the Distributor. (b) The contingent deferred sales charge (CDSC) for Class B Shares decreases by 1% annually to 1% in the fifth year and 0% in the sixth year of ownership. Class B Shares convert to Class A Shares approximately six years after purchase. (c) The CDSC for Class C Shares of 1.00% applies to shares redeemed within eighteen months of purchase. (d) Because the Fund is a new fund (as defined in Form N-1A under the Investment Company Act of 1940, as amended), "Other Expenses" are based on estimated amounts for the current fiscal year. (e) The Adviser has undertaken contractually to waive its management fee and bear certain expenses (exclusive of nonrecurring account fees and extraordinary expenses) until further notice (and in any event at least until 3/31/02). Any amounts waived or reimbursed in a particular fiscal year will be subject to repayment by the Fund to the Adviser to the extent that from time to time through the next two fiscal years the repayment will not cause the Fund's expenses to exceed such limit during the respective year. 4 EXAMPLE [TO BE SUPPLIED] This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment earns a 5% return each year and that the Fund's operating expenses remain the same as the Total Annual Fund Operating Expenses shown above. Your actual costs may be higher or lower. Based on these assumptions, your costs would be:
CLASS 1 YEAR 3 YEARS - ----- ------------ ------------ Institutional............................................... $ $ Investor.................................................... $ $ A........................................................... $ $ B........................................................... $ $ C........................................................... $ $
You would pay the following expenses if you did not redeem your shares:
CLASS 1 YEAR 3 YEARS - ----- ------------ ------------ B........................................................... $ $ C........................................................... $ $
INVESTMENT OBJECTIVES AND PRINCIPAL INVESTMENT STRATEGIES The investment objective and policies of the Fund may be changed without shareholder approval. AXA ROSENBERG EUROPEAN FUND The investment objective of the AXA Rosenberg European Fund is to seek total return greater than that of the MSCI Europe Index on a rolling three-year basis through investment primarily in equity securities of companies that are traded principally in regulated markets across Europe. Total return is a combination of capital appreciation and current income (dividend or interest). The Fund will place relatively greater emphasis on capital appreciation than on current income. Because the companies in which the Fund invests are those that have been identified as undervalued, the Fund's objective will place relatively greater emphasis on capital appreciation than on current income. The Fund's investment objective is non-fundamental and thus may be changed by the Trustees of the Trust (the "Trustees") without shareholder approval. As noted above, the Fund measures its return against that of the MSCI Europe Index. The MSCI Europe Index is the equity index prepared by Morgan Stanley Capital International, currently comprised of 15 developed European markets, including the United Kingdom, based on large and medium capitalization securities which are sorted by industry group and selected, at full market capitalization weight, on the basis of investability (as determined by size, long and short term volume and free float). To meet redemption requests or for investment purposes, the Fund may temporarily hold a portion of its assets in "cash equivalents" -- highly liquid short-term, interest-bearing securities. The Adviser may also effect investments in the European market by utilizing futures, options and other derivative instruments on the European stock indices. It is currently expected that, under normal circumstances, % of the Fund's assets will be invested in equity securities of companies that are traded principally in regulated markets across Europe. Investments in issuers of foreign securities may present high opportunity for capital appreciation because of higher potential economic and earnings growth, but may also involve higher risk. See "Principal Risks--Foreign Investment Risk." [to be updated] 5 PRINCIPAL RISKS The value of your investment in the Fund changes with the values of the Fund's investments. Many factors can affect those values. This section describes the principal risks that may affect the Fund's investments as a whole. The Fund could be subject to additional risks because the types of investments made by the Fund can change over time. INVESTMENT RISKS. An investment in the Fund involves risks similar to those of investing in common stocks directly. Just as with common stocks, the value of Fund shares may vary depending on market, economic, political, regulatory and other conditions affecting the Fund's portfolio. These types of risks may be particularly high for the Fund because of its investments in the securities of foreign issuers. Investment in shares of the Fund is, like investment in common stocks, more volatile and risky than some other forms of investment. PORTFOLIO TURNOVER. The consideration of portfolio turnover will not constrain the Adviser's investment decisions. The Fund is actively managed, and the Fund's portfolio turnover may exceed 100%. Higher portfolio turnover rates are likely to result in comparatively greater brokerage commissions or transaction costs. Such costs will reduce the Fund's return. A higher portfolio turnover rate may also result in the realization of substantial net short-term gains, which are taxable as ordinary income to shareholders when distributed. MANAGEMENT RISK. The Fund is subject to management risk because it is an actively managed investment portfolio. Management risk is the risk that the Adviser will make poor investment decisions. The Adviser will apply its investment techniques and risk analyses in making investment decisions for the Fund, but there can be no guarantee that it will produce the desired results. In some cases, certain investments may be unavailable or the Adviser may not choose certain investments under market conditions when, in retrospect, their use would have been beneficial to the Fund. FOREIGN INVESTMENT RISK. Investments in securities of foreign issuers involve certain risks that are less significant for investments in securities of U.S. issuers. These include risks of adverse changes in foreign economic, political, regulatory and other conditions, changes in currency exchange rates or exchange control regulations (including limitations on currency movements and exchanges). A foreign government may expropriate or nationalize invested assets, or impose withholding taxes on dividend or interest payments. The Fund may be unable to obtain and enforce judgments against foreign entities. Furthermore, issuers of foreign securities are subject to different, and often less comprehensive, accounting, reporting and disclosure requirements than domestic issuers. In certain countries, legal remedies available to investors may be more limited than those available with respect to investments in the United States. The securities of some foreign companies may be less liquid and at times more volatile than securities of comparable U.S. companies. CURRENCY RISK. As a result of its investments in securities denominated in, and/or receiving revenues in, foreign currencies, the Fund will be subject to currency risk. This is the risk that those currencies will decline in value relative to the U.S. Dollar, or, in the case of hedging positions, that the U.S. Dollar will decline in value relative to the currency hedged. In either event, the dollar value of these types of investments would be adversely affected. DERIVATIVES RISK. The Fund may use derivative instruments, which in this case are financial contracts whose value depends upon, or is derived from, the value of an underlying index. The Adviser will sometimes use derivatives as a part of a strategy designed to reduce other risks and sometimes will use derivatives for leverage, which increases opportunities for gain but also involves greater risk. In addition to other risks such as the credit risk of the counterparty, derivatives involve the risk of mispricing or improper valuation and the risk that changes in the value of the derivative may not correlate perfectly with the relevant indices. 6 CERTAIN ADDITIONAL INVESTMENT TECHNIQUES AND RELATED RISKS The Fund has the flexibility, within limits, to invest in a variety of instruments designed to enhance its investment capabilities. A brief description of certain of these investment instruments and the risks associated with them appears below. You can find more detailed information in the Trust's Statement of Additional Information ("SAI"). STOCK INDEX FUTURES. A stock index futures contract (an "Index Future") is a contract to buy an integral number of units of the relevant index at a specified future date at a price agreed upon when the contract is made. A unit is the value at a given time of the relevant index. An option on an Index Future gives the purchaser the right, in return for the premium paid, to assume a long or a short position in an Index Future. The Fund will realize a loss if the value of an Index Future declines between the time the Fund purchases an Index Future and the time it sells it and may realize a gain if the value of the Index Future rises between such dates. In connection with its investment in common stocks, the Fund may invest in Index Futures while the Adviser seeks favorable terms from brokers to effect transactions in common stocks selected for purchase. The Fund may also invest in Index Futures when the Adviser believes that there are not enough attractive common stocks available to maintain the standards of diversity and liquidity set for the Fund, pending investment in such stocks when they do become available. Through the use of Index Futures, the Fund may maintain a portfolio with diversified risk without incurring the substantial brokerage costs which may be associated with investment in multiple issuers. This may permit the Fund to avoid potential market and liquidity problems (E.G., driving up or forcing down the price by quickly purchasing or selling shares of a portfolio security) which may result from increases or decreases in positions already held by the Fund. The Fund may also use Index Futures in order to hedge its equity positions. In contrast to purchases of a common stock, no price is paid or received by the Fund upon the purchase of a futures contract. Upon entering into a futures contract, the Fund will be required to deposit with its custodian in a segregated account in the name of the futures broker a specified amount of cash or securities. This is known by participants in the market as "initial margin." The type of instruments that may be deposited as initial margin, and the required amount of initial margin, are determined by the futures exchange on which the Index Futures are traded. The nature of initial margin in futures transactions is different from that of margin in securities transactions in that futures contract margin does not involve the borrowing of funds by the customer to finance the transactions. Rather, the initial margin is in the nature of a performance bond or good faith deposit on the contract which is returned to the Fund upon termination of the futures contract, assuming all contractual obligations have been satisfied. Subsequent payments to and from the broker, called "variation margin," will be made on a daily basis as the price of the particular index fluctuates, making the position in the futures contract more or less valuable, a process known as "marking to market." The Fund may close out, or terminate its position in, a futures contract purchase by entering into a futures contract sale. Final determinations of variation margin are then made, additional cash is required to be paid by or released to the Fund, and the Fund realizes a loss or a gain. The Fund's use of Index Futures involves risk. Positions in Index Futures may be closed out by the Fund only on the futures exchanges on which the Index Futures are then traded. There can be no assurance that a liquid market will exist for any particular contract at any particular time. The liquidity of the market in futures contracts could be adversely affected by "daily price fluctuation limits" established by the relevant futures exchange which limit the amount of fluctuation in the price of an Index Futures contract during a single trading day. Once the daily limit has been reached in the contract, no trades may be entered into at a price beyond the limit. In such events, it may not be possible for the Fund to close its futures contract purchase, and, in the event of adverse price movements, the Fund would continue to be required to make daily cash payments of variation margin. The futures market may also attract more speculators than does the securities market, because deposit requirements in the futures market are less 7 onerous than margin requirements in the securities market. Increased participation by speculators in the futures market may also cause price distortions. In addition, the price of Index Futures may not correlate perfectly with movement in the underlying index due to certain market disturbances. The Fund will not purchase Index Futures if, as a result, the Fund's initial margin deposits on transactions that do not constitute "bona fide hedging" under relevant regulations of the Commodities Futures Trading Commission would be greater than 5% of the Fund's total assets. In addition to margin deposits, when the Fund purchases an Index Future, it is required to maintain, at all times while an Index Future is held by the Fund, cash, U.S. Government securities or other high grade liquid securities in a segregated account with its Custodian in an amount which, together with the initial margin deposit on the futures contract, is equal to the current value of the futures contract. Further, the ability to establish and close out positions in options on future contracts will be subject to the development and maintenance of a liquid secondary market. It is not certain that such a market will develop. There is no assurance that a liquid secondary market will exist for any particular option or at any particular time. REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements, by which the Fund purchases a security and obtains a simultaneous commitment from the seller (a bank or, to the extent permitted by the Investment Company Act of 1940, as amended (the "1940 Act"), a recognized securities dealer) to repurchase the security at an agreed-upon price and date (usually seven days or less from the date of original purchase). The resale price is in excess of the purchase price and reflects an agreed-upon market rate unrelated to the coupon rate on the purchased security. Such transactions afford the Fund the opportunity to earn a return on temporarily available cash. Although the underlying security may be a bill, certificate of indebtedness, note or bond issued by an agency, authority or instrumentality of the U.S. government, the obligation of the seller is not guaranteed by the U.S. government, and there is a risk that the seller may fail to honor its repurchase obligation. In such event, the Fund would attempt to exercise rights with respect to the underlying security, including possible disposition in the market. However, the Fund may be subject to various delays and risks of loss, including (a) possible declines in the value of the underlying security during the period while the Fund seeks to enforce its rights thereto, and (b) the inability to enforce rights and the expenses involved in attempted enforcement. LOANS OF PORTFOLIO SECURITIES. The Fund may lend some or all of its portfolio securities to broker-dealers. Securities loans are made to broker-dealers pursuant to agreements requiring that the loans be continuously secured by collateral in cash or U.S. Government securities at least equal at all times to the market value of the securities lent. The borrower pays to the Fund an amount equal to any dividends or interest received on the securities lent. When the collateral is cash, the Fund may invest the cash collateral in interest-bearing, short-term securities. When the collateral is U.S. Government securities, the Fund usually receives a fee from the borrower. Although voting rights or rights to consent with respect to the loaned securities pass to the borrower, the Fund retains the right to call the loans at any time on reasonable notice, and it will do so in order that the securities may be voted by the Fund if the holders of such securities are asked to vote upon or consent to matters materially affecting the investment. The Fund may also call loans in order to sell the securities involved. The risks in lending portfolio securities, as with other extensions of credit, include possible delay in recovery of the securities or possible loss of rights in the collateral should the borrower fail financially. However, such loans will be made only to broker-dealers that are believed by the Adviser to be of relatively high credit standing. ILLIQUID SECURITIES. The Fund may purchase "illiquid securities," defined as securities which cannot be sold or disposed of in the ordinary course of business within seven days at approximately the value at which the Fund has valued such securities, so long as no more than 15% of the Fund's net assets would be invested in such illiquid securities after giving effect to the purchase. Investment in illiquid securities involves the risk that, because of the lack of consistent market demand for such securities, the Fund may be forced to sell them at a discount from the last offer price. 8 PERFORMANCE INFORMATION FROM THE ADVISER'S OTHER EUROPEAN ACCOUNTS The Adviser also serves as adviser to other European accounts (the "Other Accounts") that have investment objectives, policies and strategies that are substantially similar to those of the Fund. THE INFORMATION BELOW DOES NOT REPRESENT THE HISTORICAL PERFORMANCE OF THE FUND AND SHOULD NOT BE CONSIDERED A PREDICTION OF ITS FUTURE PERFORMANCE. The performance of the Fund may be higher or lower than the performance of the Other Accounts. The performance information shown below is based on a composite of all of the accounts of the Adviser and its predecessor with investment objectives, policies and strategies that are substantially similar to those of the Fund and has been adjusted to give effect to the estimated annualized expenses (without giving effect to any expense waivers or reimbursements) of the Fund during its first fiscal year. None of the Other Accounts has been registered under the 1940 Act and therefore they are not subject to certain investment restrictions imposed by the 1940 Act. If the Other Accounts had been registered under the 1940 Act, their performance and the composite performance might have been adversely affected. In addition, all but one of the Other Accounts were not subject to Subchapter M of the Internal Revenue Code. If the Other Accounts had been subject to Subchapter M, their performance might have been adversely affected. As noted below, the returns in the bar chart reflect adjustments for the fees and expenses of Institutional Shares. The other classes of the Fund have higher expense ratios than the Institution Class, and therefore if the returns of the Other Accounts were adjusted for the fees and expenses of those classes, they would be lower than those shown in the bar chart. The bar chart and table below show: - CHANGES IN THE OTHER ACCOUNTS' PERFORMANCE FROM YEAR TO YEAR (OR OVER THE LIFE OF THE OTHER ACCOUNT COMPOSITE IF LESS THAN TEN YEARS OLD); AND - HOW THE OTHER ACCOUNTS' AVERAGE ANNUAL RETURNS FOR ONE, FIVE AND TEN YEARS (OR OVER THE LIFE OF THE OTHER ACCOUNT COMPOSITE IF LESS THAN TEN YEARS OLD) COMPARE TO THOSE OF A BROAD-BASED SECURITIES MARKET INDEX. YEARLY PERFORMANCE (%)--OTHER ACCOUNTS (ADJUSTED FOR FEES AND EXPENSES OF INSTITUTIONAL SHARES) [Bar chart to come] CALENDAR YEAR END During all periods shown in the bar graph, the Other Accounts' highest quarterly return was %, for the quarter ended , and their lowest quarterly return was %, for the quarter ended . 9 PERFORMANCE TABLE This table shows how the Other Accounts' performance compares with the returns of a broad-based securities market index. AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDING DECEMBER 31, 2000)
PAST ONE PAST FIVE PAST TEN YEAR YEARS YEARS -------- --------- -------- Other Accounts (adjusted for the fees and expenses of Institutional Shares)..................................... % % % Other Accounts (adjusted for the fees and expenses of Investor Shares).......................................... % % % Other Accounts (adjusted for the fees and expenses of Class A Shares)........................................... % % % Other Accounts (adjusted for the fees and expenses of Class B Shares)........................................... % % % Other Accounts (adjusted for the fees and expenses of Class C Shares)........................................... % % % MSCI Europe Index*.......................................... % % % Blended Benchmark**......................................... % % %
- ------------------------ * The MSCI Europe Index is an equity index prepared by Morgan Stanley Capital International, currently comprised of 15 developed European markets, including the United Kingdom, based on large and medium capitalization securities which are sorted by industry group and selected, at full market capitalization weight, on the basis of investability (as determined by size, long and short term volume and free float). ** The benchmark is a value-weighted composite of the indices selected by the Other Accounts for comparison purposes. The country weights of the portfolios are plus or minus 3% of the country weights' of the Other Accounts' designated benchmarks. Benchmark weights as of February 1, 2001 are: 40.7% Financial Times Europe, 58.4% MSCI-Europe, and 0.9% MCSI-Europe ex-Norway. For the period January 1, 2001 through March 31, 2000, the aggregate (non-annualized) total returns of the Other Accounts were % (based on fees and expenses of Institutional Shares) and % (based on fees and expenses of Investor Shares). [Line chart to come] 10 AVERAGE ANNUAL RETURNS (FOR PERIODS ENDING MARCH 31, 2001):
PAST ONE PAST FIVE PAST TEN YEAR YEARS YEARS -------- --------- -------- Other Accounts (adjusted for the fees and expenses of Institutional Shares)..................................... % % % Other Accounts (adjusted for the fees and expenses of Investor Shares).......................................... % % % Other Accounts (adjusted for the fees and expenses of Class A Shares)........................................... % % % Other Accounts (adjusted for the fees and expenses of Class B Shares)........................................... % % % Other Accounts (adjusted for the fees and expenses of Class C Shares)........................................... % % % MSCI Europe Index*.......................................... % % % Blended Benchmark**......................................... % % %
- ------------------------ * The MSCI Europe Index is the equity index prepared by Morgan Stanley Capital International, currently comprised of 15 developed European markets, including the United Kingdom, based on large and medium capitalization securities which are sorted by industry group and selected, at full market capitalization weight, on the basis of investability (as determined by size, long and short term volume and free float). ** The benchmark is a value-weighted composite of the indices selected by the Other Accounts for comparison purposes. The country weights of the portfolios are plus or minus 3% of the country weights' of the Other Accounts' designated benchmarks. Benchmark weights as of February 1, 2001 are: 40.7% Financial Times Europe, 58.4% MSCI-Europe, and 0.9% MCSI-Europe ex-Norway. THE ADVISER'S GENERAL INVESTMENT PHILOSOPHY The Adviser attempts to add value relative to a benchmark through a quantitative stock selection process and seeks to diversify investment risk across the Fund's holdings. In seeking to outperform the Fund's designated benchmark, the Adviser also attempts to control risk in the Fund's portfolio relative to the securities constituting that benchmark. Since the Fund is substantially invested in equities at all times, the Adviser does not earn the extraordinary return, or "alpha," by timing the market. The Adviser seeks to avoid constructing a portfolio that differs significantly from the benchmark with respect to characteristics such as market capitalization, historic volatility or "beta," and industry weightings. The Fund seeks to have exposure to these factors similar to that of the designated benchmark. INVESTMENT PHILOSOPHY The Adviser's investment strategy is based on the belief that stock prices imperfectly reflect the present value of the expected future earnings of companies, or their "fundamental values." The Adviser believes that market prices will converge towards respective fundamental values over time, and that therefore, if the Adviser can accurately determine fundamental value, and can apply a disciplined investment process to select for purchase those stocks that are currently undervalued (i.e., their current prices are cheaper than their fundamental values), the Adviser will outperform the Fund's benchmark over time. The premise of the Adviser's investment philosophy is that there is a link between the price of a stock and the underlying financial and operational characteristics of the company. In other words, the price reflects the market's assessment of how well the company is positioned to generate future earnings and/or future cash flow. The Adviser identifies and purchases those stocks that are undervalued and sells those stocks that have become overvalued (i.e., their prices are currently more expensive than their fundamental values). The Adviser believes that the market will recognize the "better value" and that the mispricings will be corrected as the stocks in the Fund's portfolios are purchased or sold by other investors. 11 In determining whether a stock is attractive, the Adviser estimates the company's current fundamental value, changes in the company's future earnings, and investor sentiment toward the stock. The Adviser identifies and causes the Fund to purchase undervalued stocks and to hold them in the Fund's portfolio until the market recognizes and corrects for the mispricings. Conversely, the Adviser identifies and causes a Fund to sell overvalued stocks. DECISION PROCESS The Adviser's decision process is a continuum. Its research function develops models that analyze the more than 14,000 securities in the global universe. These models include analyses of both fundamental data and historical price performance. The portfolio management function optimizes each portfolio's composition, executes trades, and monitors performance and trading costs. The essence of the Adviser's approach is attention to important aspects of the investment process. Factors crucial to successful stock selection include: (1) accurate and timely data on a large universe of companies; (2) subtle quantitative descriptors of value and predictors of changes in value; and (3) insightful definitions of similar businesses. The Adviser assimilates, checks and structures the input data on which its models rely. The Adviser believes that with correct data, the recommendations made by the system will be sound. STOCK SELECTION Fundamental valuation of stocks is key to the Adviser's investment process, and the heart of the valuation process lies in the Adviser's proprietary Appraisal Model. Analysis of companies in the United States and Canada is conducted in a single unified model. The Appraisal Model discriminates where the two markets are substantially different, while simultaneously comparing companies in the two markets according to their degrees of similarity. European companies and Asian companies (other than Japanese companies) are analyzed in a nearly global model, which includes the United States and Canada as a further basis for comparative valuation but which excludes Japan. Japanese companies are analyzed in an independent national model. The Appraisal Model incorporates the various accounting standards that apply in different markets and makes adjustments to ensure meaningful comparisons. An important feature of the Appraisal Model is the classification of companies into one or more of 170 groups of "similar" businesses. Each company is broken down into its individual business segments. Each segment is compared with similar segments of other companies doing business in the same geographical market and, in most cases, in different markets. The Adviser appraises the company's assets, operating earnings and sales within each business segment, using the market's valuation of the relevant category of business as a guide where possible. The Adviser then puts the segment appraisals together to create balance sheet, income statement, and sales valuation models for each total company while adjusting the segment appraisals to reflect variables which apply only to the total company, such as taxes, capital structure, and pension funding. The Adviser's proprietary Near-Term Prospects Model attempts to predict the earnings change for companies over a one-year period. This Model examines, among other things, measures of company profitability, measures of operational efficiency, analysts earnings estimates and measures of investor sentiment, including broker recommendations, earnings surprise and prior market performance. In different markets around the world, the Adviser has different levels of investor sentiment data available and observes differing levels of market response to the model's various predictors. The Adviser combines the results of the Near-Term Prospects Model with the results of the Appraisal Model to determine the attractiveness of a stock for purchase or sale. 12 OPTIMIZATION The Adviser's portfolio optimization system attempts to construct a Fund portfolio that will outperform the benchmark. The optimizer simultaneously considers both the recommendations of the Adviser's stock selection models and the risks in determining portfolio transactions. No transaction will be executed unless the opportunity offered by a purchase or sale candidate sufficiently exceeds the potential of an existing holding to justify the transaction costs. TRADING The Adviser's trading system aggregates the recommended transactions for the Fund and determines the feasibility of each recommendation in light of the stock's liquidity, the expected transaction costs, and general market conditions. It relays target price information to a trader for each stock considered for purchase or sale. Trades are executed through any one of four trading strategies: traditional brokerage, networks, accommodation, and package or "basket" trades. In the United States, the network arrangements the Adviser has developed with Instinet Matching System (IMS) and Portfolio System for Institutional Trading (POSIT) facilitate large volume trading with little or no price disturbance and low commission rates. Accommodative trading (also referred to herein as the Adviser's "match system") allows institutional buyers and sellers of stock to electronically present the Adviser with their "interest" lists each morning. Any matches between the inventory that the brokers have presented and the Adviser's own recommended trades are signaled to the Adviser's traders. Because the broker is doing agency business and has a client on the other side of the trade, the Adviser expects the other side to be accommodative in setting the price. The Adviser's objective in using this match system is to execute most trades on the Adviser's side of the bid/ask spread so as to minimize market impact. Package trades allow the Adviser to trade large lists of orders simultaneously using state of the art tools such as the Instinet Real-Time System, Instinet Order Matching System and Lattice Trading System. Those tools provide order entry, negotiation and execution capabilities, either directly to other institutions or electronically to the floor of the exchange. The advantages of using such systems include speed of execution, low commissions, anonymity and very low market impact. The Adviser continuously monitors trading costs to determine the impact of commissions and price disturbances on the Fund's portfolio. MANAGEMENT OF THE TRUST The Trust's trustees oversee the general conduct of the Fund's business. INVESTMENT ADVISER AXA Rosenberg Investment Management LLC (the "Adviser") is the Trust's investment adviser. The Adviser's address is Four Orinda Way, Building E, Orinda, CA 94563. The Adviser is responsible for making investment decisions for the Fund and managing the Fund's other affairs and business, subject to the supervision of the Board of Trustees. The Adviser provides investment advisory services to a number of institutional investors as well as to the other portfolios of the Trust. The Fund will pay the Adviser a management fee for these services, on a monthly basis, totaling 0.75% of its average daily net assets each year. The Adviser has entered into a contractual undertaking to reduce its management fee and bear certain expenses until further notice (and in any event until March 31, 2002) to limit the Fund's total annual operating expenses. Any amounts waived or reimbursed in a particular fiscal year will be subject to repayment by the Fund to the Adviser to the extent that from time to time through the next two fiscal years the repayment will not cause the Fund's expenses to exceed such limit during the respective year. 13 PORTFOLIO MANAGERS Management of the Fund's portfolio is overseen by the Adviser's executive officers who are responsible for design and maintenance of the Adviser's portfolio system, and by a portfolio manager who is responsible for research and monitoring the Fund's characteristic performance against the benchmark and for monitoring cash balances. Dr. Barr Rosenberg, Dr. Kenneth Reid and Philippe Sonne, the portfolio manager, are responsible for the day-to-day management of the Fund's portfolio. Dr. Rosenberg and Dr. Reid both have been employed by the Adviser or its predecessor since 1985. Mr. Sonne has been a Portfolio Manager for the Adviser since 1999. From 1998 to 1999, he was a research assistant for the Adviser's predecessor. Mr. Sonne earned an M.Sc. in Probabilities from the University of Paris at Orsay in 1993. He also earned a D.E.A. in Mathematics applied to Economics from Dauphine University (Paris) in 1994 and graduated from E.N.S.A.E. (French National School of Statistics and Economics Research) in 1996. Mr. Sonne has previously worked as a Marketing manager and consultant for a Hardware & System company, as a Risk Associate for Societe General in Paris, and as a Fund Manager's assistant for Credit Commercial de France, all in Paris. EXECUTIVE OFFICERS The biography of each of the executive officers of the Adviser is set forth below. Kenneth Reid is also a Trustee of the Trust. BARR ROSENBERG. Dr. Rosenberg is the Director of Research of the Adviser, Chairman of AXA Rosenberg Group LLC, the parent of the Adviser, and Managing Director of Barr Rosenberg Research Center LLC. As such, he has ultimate responsibility for the Adviser's securities valuation and portfolio optimization systems that are used to manage the Fund and for the implementation of the decisions developed therein. His area of special concentration is the design of the Adviser's proprietary securities valuation model. Dr. Rosenberg earned a B.A. degree from the University of California, Berkeley, in 1963. He earned an M.Sc. from the London School of Economics in 1965, and a Ph.D. from Harvard University, Cambridge, Massachusetts, in 1968. From 1968 until 1983, Dr. Rosenberg was a Professor of Finance, Econometrics, and Economics at the School of Business Administration at the University of California, Berkeley. Concurrently, from 1968 until 1974, Dr. Rosenberg worked as a consultant in applied decision theory in finance, banking and medicine. In 1975, he founded Barr Rosenberg Associates, a financial consulting firm (now known as BARRA) where he was a managing partner, and later chief scientist, until his departure in 1986. Dr. Rosenberg, the founder of the Berkeley Program in Finance, has experience in the modeling of complex processes with substantial elements of risk. From 1985 to 1998, he was the founder and Managing General Partner of Rosenberg Institutional Equity Management, the predecessor company to the Adviser. KENNETH REID. Dr. Reid is the Chief Executive Officer of the Adviser. His work is focused on the design and estimation of the Adviser's valuation models and he has primary responsibility for analyzing the empirical evidence that validates and supports the day-to-day recommendations of the Adviser's securities valuation models. Patterns of short-term price behavior discussed by Dr. Reid as part of his Ph.D. dissertation have been refined and incorporated into the Adviser's proprietary valuation and trading systems. Dr. Reid earned both a B.A. degree (1973) and an M.D.S. (1975) from Georgia State University, Atlanta. In 1982, he earned a Ph.D. from the University of California, Berkeley, where he was awarded the American Bankers Association Fellowship. From 1981 until June 1986, Dr. Reid worked as a consultant at BARRA in Berkeley, California. His responsibilities included estimating multiple-factor risk models, designing and evaluating active management strategies, and serving as an internal consultant on 14 econometric matters in finance. From 1986 to 1998, Dr. Reid was a general partner of Rosenberg Institutional Equity Management, the predecessor company to the Adviser. WILLIAM RICKS. Dr. Ricks is the Chief Investment Officer of the Adviser. His primary responsibilities are the various aspects of the investment process: trading, operations, portfolio engineering, and portfolio construction. He is responsible for the implementation of the investment strategies that are designed by the Research Center. Dr. Ricks earned a B.S. from the University of New Orleans, Louisiana and a Ph.D. from the University of California, Berkeley in 1980. He worked as a senior accountant for Ernst & Ernst in New Orleans from 1974 to 1976. He was a financial and managerial accounting instructor at the University of California, Berkeley from 1978 to 1979, after which he was an associate professor of finance and accounting at Duke University until 1989. From 1989 to 1998, he was a research associate, a portfolio engineer and the Director of Accounting Research at Rosenberg Institutional Equity Management, the predecessor company to the Adviser. INDEPENDENT TRUSTEES William F. Sharpe, Nils H. Hakansson and Dwight M. Jaffee are the Trustees of the Trust who are not "interested persons" (as defined in the 1940 Act) of the Trust or the Adviser. Dr. Sharpe is the STANCO 25 Professor of Finance Emeritus at Stanford University's Graduate School of Business. He is best known as one of the developers of the Capital Asset Pricing Model, including the beta and alpha concepts used in risk analysis and performance measurement. He developed the widely-used binomial method for the valuation of options and other contingent claims. He also developed the computer algorithm used in many asset allocation procedures. Dr. Sharpe has published articles in a number of professional journals. He has also written six books, including PORTFOLIO THEORY AND CAPITAL MARKETS, (McGraw-Hill, 1970), ASSET ALLOCATION TOOLS, (Scientific Press, 1987), FUNDAMENTALS OF INVESTMENTS (with Gordon J. Alexander and Jeffery Bailey, Prentice-Hall, 2000) and INVESTMENTS (with Gordon J. Alexander and Jeffery Bailey, Prentice-Hall, 1999). Dr. Sharpe is a past President of the American Finance Association. He is currently Chairman of Financial Engines Incorporated, an on-line investment advice company. He has also served as consultant to a number of corporations and investment organizations. He is also a member of the Board of Trustees of Smith Breeden Trust, an investment company, and a director of Stanford Management Company. He received the Nobel Prize in Economic Sciences in 1990. Professor Hakansson is the Sylvan C. Coleman Professor of Finance and Accounting at the Haas School of Business, University of California, Berkeley. He is a former member of the faculty at UCLA as well as at Yale University. At Berkeley, he served as Director of the Berkeley Program in Finance (1988-1991) and as Director of the Professional Accounting Program (1985-1988). Professor Hakansson is a Certified Public Accountant and spent three years with Arthur Young & Company prior to receiving his Ph.D. from UCLA in 1966. He has twice been a Visiting Scholar at Bell Laboratories in New Jersey and was, in 1975, the Hoover Fellow at the University of New South Wales in Sydney and, in 1982, the Chevron Fellow at Simon Fraser University in British Columbia. In 1984, Professor Hakansson was a Special Visiting Professor at the Stockholm School of Economics, where he was also awarded an honorary doctorate in economics. He is a past president of the Western Finance Association (1983-1984). Professor Hakansson has published a number of articles in academic journals and in professional volumes. Many of his papers address various aspects of asset allocation procedures as well as topics in securities innovation, information economics and financial reporting. He has served on the editorial boards of several professional journals and been a consultant to the RAND Corporation and a number of investment organizations. Professor Hakansson is a member of the board of two foundations and a past board member of SuperShare Services Corporation and of Theatrix Interactive, Inc. He is also a Fellow of the Accounting Researchers International Association and a member of the Financial Economists Roundtable. 15 Professor Jaffee is the Willis H. Booth Professor of Banking and Finance at the Haas School of Business, University of California, Berkeley. He was previously a Professor of Economics at Princeton University for many years, where he served as the Vice Chairman of the faculty. At Berkeley, he serves on a continuing basis as the Co-chairman of the Fisher Center for Real Estate and Urban Economics and as the Director of the UC Berkeley-St. Petersburg University (Russia) School of Management Program. He has been a Visiting Professor at many Universities around the world, most recently at the University of Aix/ Marseille in France and at the European University in Florence Italy. Professor Jaffee has authored five books and numerous articles in academic and professional journals. His research has focused on three key financial markets: business lending, real estate finance, and catastrophe insurance. His current research is focused on methods for securitizing real estate finance and catastrophe insurance risks, and on the impact of international trade on the U.S. computer industry. He has served on the editorial boards of numerous academic journals, and has been a consultant to a number of U.S. government agencies and to the World Bank. In the past, Professor Jaffee has been a member of the Board of Directors of various financial institutions, including the Federal Home Loan Bank of New York. He is currently a Visiting Scholar at the Federal Reserve Bank of San Francisco. DISTRIBUTOR Investor Shares, Institutional Shares, Class A, Class B and Class C Shares of the Fund are sold on a continuous basis by the Trust's distributor, Barr Rosenberg Funds Distributor, Inc. (the "Distributor"), a wholly-owned subsidiary of The BISYS Group, Inc. The Distributor's principal offices are located at 3435 Stelzer Road, Columbus, Ohio 43219. Solely for the purpose of compensating the Distributor for services and expenses primarily intended to result in the sale of Investor Shares, Class A Shares, Class B Shares and Class C Shares and/or in connection with the provision of direct client service, personal services, maintenance of shareholder accounts and reporting services to holders of Investor Shares, Class A Shares, Class B Shares and Class C Shares of the Trust, shares of each such class are subject to an annual distribution and shareholder service fee (each a "Distribution and Shareholder Service Fee") in accordance with a Distribution and Shareholder Service Plan (each a "Distribution and Shareholder Service Plan") adopted by the Trust pursuant to Rule 12b-1 under the 1940 Act. Although the Distributor sells Institutional Shares of the Fund, as noted below, the Fund pays no fees to the Distributor for sales of such shares. Under the Distribution and Shareholder Service Plans, the various classes of the Fund will pay Distribution and Shareholder Service Fees up to the following percentages:
INSTITUTIONAL INVESTOR A B C - ------------- -------- -------- -------- -------- None 0.25% 0.50% 1.00% 1.00%
Expenses and services for which the Distributor may be reimbursed include, without limitation, compensation to, and expenses (including overhead and telephone expenses) of, financial consultants or other employees of the Distributor or of participating or introducing brokers who engage in distribution of the relevant Shares, printing of prospectuses and reports for other than existing Investor, Class A, Class B and Class C shareholders, advertising, preparing, printing and distributing sales literature and forwarding communications from the Trust to such shareholders. Each Distribution and Shareholder Service Plan is of the type known as a "compensation" plan. This means that, although the trustees of the Trust are expected to take into account the expenses of the Distributor in their periodic review of the Distribution and Shareholder Service Plans, the fees are payable to compensate the Distributor for services rendered even if the amount paid exceeds the Distributor's expenses. Because these fees are paid out of the Fund's assets on an ongoing basis, over time these fees will increase the cost of your investment and may cost you more than other types of sales charges. 16 MULTIPLE CLASSES As indicated previously, the Fund offers five classes of shares to investors, with eligibility for purchase depending on the amount invested in the Fund. The five classes of shares are Institutional Shares, Investor Shares, Class A Shares, Class B Shares and Class C Shares. The following table sets forth basic investment and fee information for each class.
ANNUAL DISTRIBUTION AND NAME OF CLASS MINIMUM FUND INVESTMENT* SUBSEQUENT INVESTMENTS* ANNUAL SERVICE FEE SHAREHOLDER SERVICE FEE - ------------- ------------------------ ----------------------- ------------------ ----------------------- Institutional........ $1 million $10,000 None None Investor............. $ 2,500 $ 500 None 0.25% Class A.............. $ 1000 $ 100 None 0.50% Class B.............. $ 1000 $ 100 None 1.00% Class C.............. $ 1000 $ 100 None 1.00%
- ------------------------ * Certain exceptions apply. See "--Institutional Shares" and "--Investor Shares" below." The offering price of Fund shares is based on the net asset value per share next determined after an order is received, less any applicable front-end sales load. See "Purchasing Shares," "How the Trust Prices Shares of the Fund--Determination of Net Asset Value" and "Redemption of Shares." INSTITUTIONAL SHARES Institutional Shares may be purchased by institutions such as endowments and foundations, plan sponsors of 401(a), 401(k), 457 and 403(b) plans and individuals. In order to be eligible to purchase Institutional Shares, an institution, plan or individual must make an initial investment of at least $1 million in the Fund. In its sole discretion, the Adviser may waive this minimum investment requirement and the Adviser intends to do so for employees of the Adviser, for the spouse, parents, children, siblings, grandparents or grandchildren of such employees, for employees of the Administrator and for Trustees of the Trust who are not interested persons of the Trust or Adviser and their spouses. Institutional Shares are sold without any initial or deferred sales charges and are not subject to any ongoing Distribution and Shareholder Service Fee. INVESTOR SHARES Investor Shares may be purchased by institutions, certain individual retirement accounts and individuals. In order to be eligible to purchase Investor Shares, an investor must make an initial investment of at least $2,500 in the Fund. In its sole discretion, the Adviser may waive this minimum investment requirement. Investor Shares are subject to an annual Distribution and Shareholder Service Fee equal to 0.25% of the average daily net assets attributable to Investor Shares, and the Trustees have authorized the Fund to pay up to 0.15% of its average daily net assets attributable to Investor Shares for subtransfer and subaccounting services in connection with such shares. As described above, the Distribution and Shareholder Service Plan in connection with Investor Shares permits payments of up to 0.25% of the Fund's average daily net assets attributable to Investor Shares. See "Management of the Trust--Distributor." 17 CLASS A SHARES--INITIAL SALES CHARGE ALTERNATIVE You can purchase Class A shares of the Fund at net asset value with an initial sales charge as follows:
INITIAL SALES CHARGE ----------------------------------------------------- COMMISSION TO DEALER/ AS % OF AS % OF AGENT AS % OF AMOUNT PURCHASED NET AMOUNT INVESTED OFFERING PRICE OFFERING PRICE - ---------------- ------------------- -------------- -------------- Up to $100,000.................................... 4.99% 4.75% 4.275% $100,000 up to $250,000........................... 3.90% 3.75% 3.375% $250,000 up to $500,000........................... 2.83% 2.75% 2.475% $500,000 up to $1,000,000......................... 2.30% 2.25% 2.025%
You pay no initial sales charge on purchases of Class A Shares in the amount of $1,000,000 or more, but may pay a 1% contingent deferred sales charge ("CDSC") if you redeem your shares within 1 year. The Adviser may pay the dealer or agent a fee of up to 1% of the dollar amount purchased. CLASS B SHARES--DEFERRED SALES CHARGE ALTERNATIVE You can purchase Class B Shares at net asset value without an initial sales charge. The Fund will thus receive the full amount of your purchase. Your investment, however, will be subject to a CDSC if you redeem shares within 5 years of purchase. The CDSC varies depending on the number of years you hold the shares. The CDSC amounts are:
YEARS SINCE PURCHASE CDSC - -------------------- -------- First....................................................... 5.0% Second...................................................... 4.0% Third....................................................... 3.0% Fourth...................................................... 2.0% Fifth....................................................... 1.0% Sixth....................................................... None
If you exchange your shares for the Class B Shares of another Fund of the Trust, the CDSC also will apply to those Class B Shares. The CDSC period begins with the date of your original purchase, not the date of exchange for the other Class B Shares. The Fund's Class B Shares automatically convert to Class A Shares 6 years after the end of the month of your purchase. If you purchase shares by exchange of Class B Shares of another Fund, the conversion period runs from the date of your original purchase. CLASS C SHARES--ASSET-BASED SALES CHARGE ALTERNATIVE Initial Sales Charge on purchases of up $1,000,000: [to be supplied]
AS % OF AMOUNT INVESTED AS % OF OFFERING PRICE ----------------------- ---------------------- 1.01% 1.00%
You pay no initial sales charge on Purchases of Class C Shares in the amount of $1,000,000 or more. All investments will be subject to a CDSC of [1.00%] if you redeem your shares within 18 months. If you exchange your shares for Class C Shares of another Fund of the Trust, the CDSC will also apply to those Class C Shares. The 18 month period for the CDSC begins with the date of your initial purchase, not the date of the subsequent exchange. Class C Shares do not convert to any other class of shares of the Fund. 18 GENERAL Shares of the Fund may be sold to corporations or other institutions such as trusts, foundations or broker-dealers purchasing for the accounts of others (collectively, Shareholder Organizations"). Investors purchasing and redeeming shares of the Fund through a Shareholder Organization may be charged a transaction-based fee or other fee for the services provided by the Shareholder Organization. Each such Shareholder Organization is responsible for transmitting to its customers a schedule of any such fees and information regarding any additional or different conditions with respect to purchases and redemptions of Fund shares. Customers of Shareholder Organizations should read this Prospectus in light of the terms governing accounts with their particular organization. PURCHASING SHARES The offering price for shares of the Fund is the net asset value per share next determined after receipt of a purchase order, less any applicable front-end sales load. See "How the Trust Prices Shares of the Fund--Determination of Net Asset Value." Investors may be charged an additional fee by their broker or agent if they effect transactions through such persons. INITIAL CASH INVESTMENTS BY WIRE Subject to acceptance by the Trust, shares of the Fund may be purchased by wiring federal funds. Please first contact the Trust at 1-800-447-3332 for complete wiring instructions. Notification must be given to the Trust at 1-800-447-3332 prior to 4:00 p.m., New York Time, of the wire date. Federal funds purchases will be accepted only on a day on which the Trust, the Distributor and the Custodian are all open for business. A completed Account Application must be overnighted to the Trust at Barr Rosenberg Series Trust c/o BISYS Fund Services Ohio, Inc., 3435 Stelzer Road, Columbus, Ohio 43219-8021. Please note the minimum initial investment requirements for each class as set forth above under "Multiple Classes." INITIAL CASH INVESTMENTS BY MAIL Subject to acceptance by the Trust, an account may be opened by completing and signing an Account Application and mailing it to Barr Rosenberg Series Trust, P.O. Box 182495, Columbus, Ohio 43218-2495. The Fund should be specified on the Account Application. In all cases, subject to acceptance by the Trust, payment for the purchase of shares received by mail will be credited to a shareholder's account at the net asset value per share of the Fund next determined after receipt, even though the check may not yet have been converted into federal funds. Please note minimum initial investment requirements for each class as set forth above under "Multiple Classes." ADDITIONAL CASH INVESTMENTS Additional cash investments may be made at any time by mailing a check (payable to Barr Rosenberg Series Trust) to the Trust at the address noted under "--Initial Cash Investments by Mail" or by wiring monies as noted under "--Initial Cash Investments by Wire." Notification must be given at 1-800-447-3332 or to the appropriate broker-dealer prior to 4:00 p.m., New York time, of the wire date. Please note each class' minimum additional investment requirements as set forth above under "Multiple Classes." In its sole discretion, the Adviser may waive the minimum additional investment requirements. INVESTMENTS IN-KIND (INSTITUTIONAL SHARES) Institutional Shares may be purchased in exchange for common stocks on deposit at The Depository Trust Company ("DTC") or by a combination of such common stocks and cash. Purchase of Institutional Shares of the Fund in exchange for stocks is subject in each case to the determination by the Adviser that the stocks to be exchanged are acceptable. Securities accepted by the Adviser in exchange for Fund shares 19 will be valued as set forth under "How the Trust Prices Shares of the Fund--Determination of Net Asset Value" (generally the last quoted sale price) as of the time of the next determination of net asset value after such acceptance. All dividends, subscription or other rights which are reflected in the market price of accepted securities at the time of valuation become the property of the Fund and must be delivered to the Fund upon receipt by the investor from the issuer. Generally, the exchange of common stocks for Institutional Shares will be a taxable event for federal income tax purposes, which will trigger gain or loss to an investor subject to federal income taxation, measured by the difference between the value of the Institutional Shares received and the investor's basis in the securities tendered. The Adviser will not approve the acceptance of securities in exchange for Fund shares unless (i) the Adviser, in its sole discretion, believes the securities are appropriate investments for the Fund; (ii) the investor represents and agrees that all securities offered to the Fund are not subject to any restrictions upon their sale by the Fund under the Securities Act of 1933 or otherwise; and (iii) the securities may be acquired under the Fund's investment restrictions. OTHER PURCHASE INFORMATION An eligible shareholder may also participate in the Barr Rosenberg Automatic Investment Program, an investment plan that automatically debits money from the shareholder's bank account and invests it in Investor Shares, Class A Shares, Class B Shares or Class C Shares of the Fund through the use of electronic funds transfers. Investors may commence their participation in this program with a minimum initial investment of $2,500 and may elect to make subsequent investments by transfers of a minimum of $50 into their established Fund account. You may contact the Trust for more information about the Barr Rosenberg Automatic Investment Program. For purposes of calculating the purchase price of Fund shares, a purchase order is received by the Trust on the day that it is in "good order" unless it is rejected by the Distributor. For a cash purchase order of Fund shares to be in "good order" on a particular day, a check or money wire must be received on or before 4:00 p.m., New York time, of that day. If the consideration is received by the Trust after the deadline, the purchase price of Fund shares will be based upon the next determination of net asset value of Fund shares. No third party or foreign checks will be accepted. In the case of a purchase in-kind of Institutional Shares, such purchase order will be rejected if the investor's securities are not placed on deposit at DTC prior to 10:00 a.m., New York time. The Trust reserves the right, in its sole discretion, to suspend the offering of shares of the Fund or to reject purchase orders when, in the judgment of the Adviser, such suspension or rejection would be in the best interests of the Trust or the Fund. The Fund does not allow investments by market timers. You will be considered a market timer if you buy and sell your shares within 30 days or otherwise seem, in the judgment of the Adviser, to follow a timing pattern. Purchases of the Fund's shares may be made in full or in fractional shares calculated to three decimal places. In the interest of economy and convenience, certificates for shares will not be issued. IRA ACCOUNTS Investor Shares, Class A Shares, Class B Shares and Class C Shares of the Fund may be used as funding mediums for IRAs. The minimum initial investment for an IRA is $2,000. A special application must be completed in order to create such an account. Contributions to IRAs are subject to prevailing amount limits set by the Internal Revenue Service. For more information about IRAs, call the Trust at 1-800-447-3332. 20 REDEMPTION OF SHARES Shares of the Fund may be redeemed by mail, or, if authorized by an investor in an Account Application, by telephone. The value of shares redeemed may be more or less than the original cost of those shares, depending on the market value of the investment securities held by the Fund at the time of the redemption. BY MAIL The Trust will redeem its shares at the net asset value next determined after the request is received in "good order." See "How the Trust Prices Shares of the Fund--Determination of Net Asset Value." Requests should be addressed to Barr Rosenberg Series Trust, P.O. Box 182495, Columbus, Ohio 43218-2495. Requests in "good order" must include the following documentation: (a) a letter of instruction specifying the number of shares or dollar amount to be redeemed, signed by all registered owners of the shares in the exact names in which they are registered; (b) any required signature guarantees; and (c) other supporting legal documents, if required, in the case of estates, trusts, guardianships, custodianships, corporations, pension and profit sharing plans and other organizations. SIGNATURE GUARANTEES To protect shareholder accounts, the Trust and the Transfer Agent from fraud, signature guarantees may be required to enable the Trust to verify the identity of the person who has authorized a redemption from an account. Signature guarantees are required for (1) redemptions where the proceeds are to be sent to someone other than the registered shareholder(s) at the registered address, and (2) share transfer requests. Signature guarantees may be obtained from certain eligible financial institutions, including but not limited to, the following: banks, trust companies, credit unions, securities brokers and dealers, savings and loan associations and participants in the Securities and Transfer Association Medallion Program (STAMP), the Stock Exchange Medallion Program (SEMP) or the New York Stock Exchange Medallion Signature Program (MSP). Shareholders may contact the Trust at 1-800-447-3332 for further details. BY TELEPHONE Provided the Telephone Redemption Option has been authorized by an investor in an Account Application, a redemption of shares may be requested by calling the Trust at 1-800-447-3332 and requesting that the redemption proceeds be mailed to the primary registration address or wired per the authorized instructions. If the Telephone Redemption Option or the Telephone Exchange Option (as described below) is authorized, the Transfer Agent may act on telephone instructions from any person representing himself or herself to be a shareholder and believed by the Transfer Agent to be genuine. The Transfer Agent's records of such instructions are binding and the shareholder, and not the Trust or the Transfer Agent, bears the risk of loss in the event of unauthorized instructions reasonably believed by the Transfer Agent to be genuine. The Transfer Agent will employ reasonable procedures to confirm that instructions communicated are genuine and, if it does not, it may be liable for any losses due to unauthorized or fraudulent instructions. The procedures employed in connection with transactions initiated by telephone include tape recording of telephone instructions and requiring some form of personal identification prior to acting upon instructions received by telephone. Telephone Redemption will be suspended for a period of 10 business days following a telephonic address change. 21 SYSTEMATIC WITHDRAWAL PLAN An owner of $12,000 or more of shares of the Fund may elect to have periodic redemptions made from the investor's account to be paid on a monthly, quarterly, semiannual or annual basis. The maximum payment per year is 12% of the account value at the time of the election. The Trust will normally redeem a sufficient number of shares to make the scheduled redemption payments on a date selected by the shareholder. Depending on the size of the payment requested and fluctuation in the net asset value, if any, of the shares redeemed, redemptions for the purpose of making such payments may reduce or even exhaust the account. A shareholder may request that these payments be sent to a predesignated bank or other designated party. Capital gains and dividend distributions paid to the account will automatically be reinvested at net asset value on the distribution payment date. FURTHER REDEMPTION INFORMATION The Trust will not make payment on redemptions of shares purchased by check until payment of the purchase price has been collected, which may take up to fifteen days after purchase. Shareholders can avoid this delay by utilizing the wire purchase option. If the Adviser determines, in its sole discretion, that it would not be in the best interests of the remaining shareholders of the Fund to make a redemption payment to an Institutional Shareholder wholly or partly in cash, the Fund may pay the redemption price of Institutional Shares in whole or in part by a distribution in kind of readily marketable securities held by the Fund in lieu of cash. Securities used to redeem Fund shares in kind will be valued in accordance with the Fund's procedures for valuation described under "How the Trust Prices Shares of the Fund--Determination of Net Asset Value." Securities distributed by the Fund in kind will be selected by the Adviser in light of the Fund's objective and will not generally represent a pro rata distribution of each security held in the Fund's portfolio. Investors may incur brokerage charges on the sale of any such securities so received in payment of redemptions. The Trust may suspend the right of redemption and may postpone payment for more than seven days when the New York Stock Exchange is closed for other than weekends or holidays, or if permitted by the rules of the Securities and Exchange Commission, during periods when trading on the Exchange is restricted or during an emergency which makes it impracticable for the Fund to dispose of its securities or to fairly determine the value of its net assets, or during any other period permitted by the Securities and Exchange Commission for the protection of investors. EXCHANGING SHARES The Trust offers two convenient ways to exchange shares of one Fund of the Trust for those of another. Shares of a particular class of a Fund may be exchanged only for shares of the same class in another Fund. Before engaging in an exchange transaction, a shareholder should read carefully the information in the prospectus that relates to the Fund into which the exchange will occur. A shareholder may not exchange shares of one Fund for shares of another Fund that is not qualified for sale in the state of the shareholder's residence. Although the Trust has no current intention of terminating or modifying the exchange privilege, it reserves the right to do so at any time. An exchange is taxable as a sale of a security on which a gain or loss may be recognized. Shareholders should receive written confirmation of the exchange within a few days of the completion of the transaction. A new account opened by exchange must be established with the same name(s), address and social security number as the existing account. All exchanges will be made based on the respective net asset values next determined following receipt of the request by the Trust containing the information indicated below. 22 EXCHANGE BY MAIL To exchange Fund shares by mail, shareholders should simply send a letter of instruction to the Trust. The letter of instruction must include: (a) the investor's account number; (b) the class of shares to be exchanged; (c) the Fund from and the Fund into which the exchange is to be made; (d) the dollar or share amount to be exchanged; and (e) the signatures of all registered owners or authorized parties. EXCHANGE BY TELEPHONE To exchange Fund shares by telephone or to ask questions about the exchange privilege, shareholders may call the Trust at 1-800-447-3332. If you wish to exchange shares, please be prepared to give the telephone representative the following information: (a) the account number, social security number and account registration; (b) the class of shares to be exchanged; (c) the name of the Fund from which and the Fund into which the exchange is to be made; and (d) the dollar or share amount to be exchanged. Telephone exchanges are available only if the shareholder so indicates by checking the "yes" box on the Account Application. The Trust employs procedures, including recording telephone calls, testing a caller's identity, and written confirmation of telephone transactions, designed to give reasonable assurance that instructions communicated by telephone are genuine, and to discourage fraud. To the extent that the Fund does not follow such procedures, it may be liable for losses due to unauthorized or fraudulent telephone instructions. The Fund will not be liable for acting upon instructions communicated by telephone that it reasonably believes to be genuine. The Trust reserves the right to suspend or terminate the privilege of exchanging by mail or by telephone at any time. The telephone exchange privilege will be suspended for a period of 10 days following a telephonic address change. HOW THE TRUST PRICES SHARES OF THE FUND The price of the Fund's shares is based on its net asset value as next determined after receipt of a purchase order in good order. For purposes of calculating the purchase price of Fund shares, if it does not reject a purchase order, the Trust considers an order received on the day that it receives a check or money order on or before 4:00 p.m., New York Time. If the Trust receives the payment after the deadline, it will base the purchase price of Fund shares on the next determination of net asset value of Fund shares. The Trust reserves the right, in its sole discretion, to suspend the offering of shares of the Fund or to reject purchase orders when the Adviser believes that suspension or rejection would be in the best interests of the Trust. Purchases of the Fund's shares may be made in full or fractional shares calculated to three decimal places. In the interest of economy and convenience, the Trust will not issue certificates for shares. DETERMINATION OF NET ASSET VALUE The net asset value of each class of shares of the Fund will be determined once on each day on which the New York Stock Exchange is open as of 4:00 p.m., New York time. Shares will not be priced on the days on which the New York Stock Exchange is closed for trading. Because the Fund may invest in securities that are primarily listed on foreign exchanges that trade on weekends or other days when the Fund does not price its shares, the net asset value of its shares may change on days when shareholders will not be able to purchase or redeem shares. The net asset value per share of each class of the Fund is determined by dividing the particular class's proportionate interest in the total market value of the Fund's portfolio investments and other assets, less any applicable liabilities, by the total outstanding shares of that class of the Fund. Specifically, the Fund's liabilities are allocated among its classes. The total of such liabilities allocated to a particular class, plus that class's distribution and shareholder service expenses, if any, and any other expenses specially allocated to that class, are then deducted from the class's proportionate 23 interest in the Fund's assets. The resulting amount for each class is divided by the number of shares of that class outstanding to produce the "net asset value" per share. Portfolio securities listed on a securities exchange for which market quotations are available are valued at the last quoted sale price on each business day, or, if there is no such reported sale, at the most recent quoted bid price for long securities and the most recent quoted ask price for securities sold short. Price information on listed securities is generally taken from the closing price on the exchange where the security is primarily traded. Unlisted securities for which market quotations are readily available are valued at the most recent quoted bid price or the most recent quoted ask price, except that debt obligations with sixty days or less remaining until maturity may be valued at their amortized cost. Exchange-traded options, futures and options on futures are valued at the settlement price as determined by the appropriate clearing corporation. Other assets and securities for which no quotations are readily available are valued at fair value as determined in good faith by the Trustees of the Trust or by persons acting at their direction. DISTRIBUTIONS The Fund intends to pay out as dividends substantially all of its net investment income (which comes from dividends and any interest it receives from its investments and net short-term capital gains). The Fund also intends to distribute substantially all of its net long-term capital gains, if any, after giving effect to any available capital loss carryover. The Fund's policy is to declare and pay distributions of its dividends and interest annually although it may do so more frequently as determined by the Trustees of the Trust. The Fund's policy is to distribute net short-term capital gains and net long-term gains annually, although it may do so more frequently as determined by the Trustees of the Trust to the extent permitted by applicable regulations. All dividends and/or distributions will be paid out in the form of additional shares of the Fund at net asset value unless the shareholder elects to receive cash. Shareholders may make this election by marking the appropriate box on the Account Application or by writing to the Administrator. If you elect to receive distributions in cash and checks (i) are returned and marked as "undeliverable" or (ii) remain uncashed for six months, your cash election will be changed automatically and your future dividend and capital gains distributions will be reinvested in the Fund at the per share net asset value determined as of the date of payment of the distribution. In addition, any undeliverable checks or checks that remain uncashed for six months will be canceled and will be reinvested in the Fund at the per share net asset value determined as of the date of cancellation. TAXES The Fund intends to qualify each year as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. So long as the Fund distributes, as dividends, substantially all of the sum of its taxable net investment income and the excess, if any, of net short-term capital gains over net long-term capital losses for such year and otherwise qualifies for the special rules governing the taxation of regulated investment companies, the Fund itself will not pay federal income tax on the amount distributed. Such dividends will be taxable to shareholders as ordinary income. Distributions of long-term capital gains (generally taxed at 20%) will be taxable to shareholders as such, regardless of how long a shareholder has held the shares. Distributions will be taxed as described above whether received in cash or in shares through the reinvestment of distributions. A distribution paid to shareholders by the Fund in January of a year is generally deemed to have been received by shareholders on December 31 of the preceding year, if the distribution was declared and payable to shareholders of record on a date in October, November or December of that preceding year. The Fund will provide federal tax information annually, including information about dividends and distributions paid during the preceding year. The foregoing is a general summary of the federal income tax consequences of investing in the Fund to shareholders who are U.S. citizens or U.S. corporations. Shareholders should consult their own tax 24 advisers about the tax consequences of an investment in the Fund in light of each shareholder's particular tax situation. Shareholders should also consult their own tax advisers about consequences under foreign, state, local or other applicable tax laws. OTHER INFORMATION The Fund's investment performance may from time to time be included in advertisements about the Fund. Total return for the Fund is measured by comparing the value of an investment in the Fund at the beginning of the relevant period to the redemption value of the investment in the Fund at the end of such period (assuming immediate reinvestment of any dividends or capital gains distributions). All data are based on the Fund's past investment results and do not predict future performance. Investment performance, which will vary, is based on many factors, including market conditions, the composition of the Fund's portfolio, and operating expenses. Investment performance also often reflects the risks associated with the Fund's investment objective and policies. These factors should be considered when comparing the Fund's investment results with those of other mutual funds and other investment vehicles. Quotations of investment performance for any period when an expense limitation was in effect may be greater than if the limitation had not been in effect. 25 For more information about the Fund: Statement of Additional Information (SAI): The SAI provides more detailed information about the Fund. It is incorporated by reference into this prospectus and is legally considered a part of this prospectus. You may obtain a text-only copy, for a fee, by writing to the Public Reference Section of the Commission, Washington D.C. 20549-0102, or by calling 1-202-942-8090, or by electronic request via e-mail at the following address: publicinfo@sec.gov. You may obtain a text-only copy for free from the EDGAR database on the Commission's website at http://www.sec.gov. You can get a free copy of the SAI, request other information about the Fund or make shareholder inquiries by contacting the Fund at: - -------------------------------------- Barr Rosenberg Series Trust 3435 Stelzer Road Columbus, Ohio 43219-8021 1.800.555.5737 (Institutional Shares) 1.800.447.3332 (Investor Shares) Adviser AXA Rosenberg Investment Management LLC Four Orinda Way, Building E Orinda, California 94563 Administrator, Transfer Agent and Dividend Paying Agent BISYS Fund Services Ohio, Inc. 3435 Stelzer Road Columbus, Ohio 43219 Custodian of Assets State Street Bank and Trust Company Mutual Funds Division Boston, MA 02102 Independent Accountants Legal Counsel Ropes & Gray One International Place Boston, MA 02110 BRG-- Investment Company Act File No. 811-05547 [LOGO] BARR ROSENBERG SERIES TRUST AXA Rosenberg European Fund PROSPECTUS July 11, 2001 BARR ROSENBERG SERIES TRUST AXA ROSENBERG EUROPEAN FUND STATEMENT OF ADDITIONAL INFORMATION July 11, 2001 This Statement of Additional Information is not a prospectus. This Statement of Additional Information relates to the prospectus dated July 11, 2001 of the AXA Rosenberg European Fund of Barr Rosenberg Series Trust (the "Prospectus") and should be read in conjunction therewith. A copy of the Prospectus may be obtained from Barr Rosenberg Series Trust, 3435 Stelzer Road, Columbus, Ohio 43219. 1 TABLE OF CONTENTS PAGE ---- INVESTMENT OBJECTIVES AND POLICIES .......................................... MISCELLANEOUS INVESTMENT PRACTICES .......................................... INVESTMENT RESTRICTIONS ..................................................... INCOME DIVIDENDS, DISTRIBUTIONS AND TAX STATUS .............................. MANAGEMENT OF THE TRUST ..................................................... INVESTMENT ADVISORY AND OTHER SERVICES ...................................... PORTFOLIO TRANSACTIONS ...................................................... TOTAL RETURN CALCULATIONS ................................................... DESCRIPTION OF THE TRUST AND OWNERSHIP OF SHARES ............................ DETERMINATION OF NET ASSET VALUE ............................................ PURCHASE AND REDEMPTION OF SHARES ........................................... 2 INVESTMENT OBJECTIVES AND POLICIES The investment objective and policies of the AXA Rosenberg European Fund (the "Fund") of Barr Rosenberg Series Trust (the "Trust") are summarized in the Prospectus under the heading "Risk/Return Summary" and described in more detail in the Prospectus under the headings "Investment Objective and Principal Investment Strategies" and "Principal Risks." The following is an additional description of certain investments of the Fund. INDEX FUTURES. An index futures contract (an "Index Future") is a contract to buy or sell an integral number of units of an Index at a specified future date at a price agreed upon when the contract is made. A unit is the value of the relevant Index from time to time. Entering into a contract to buy units is commonly referred to as "buying" or "purchasing" a contract or "holding a long position" in an Index. Index Futures contracts can be traded through all major commodity brokers. Currently, contracts are expected to expire on the tenth day of March, June, September and December. The Fund will ordinarily be able to close open positions on the United States futures exchange on which Index Futures are then traded at any time up to and including the expiration day. Upon entering into a futures contract, the Fund will be required to deposit initial margin with its custodian in a segregated account in the name of the futures broker. Variation margin will be paid to and received from the broker on a daily basis as the contracts are marked to market. For example, when the Fund has purchased an Index Future and the price of the relevant Index has risen, that position will have increased in value and the Fund will receive from the broker a variation margin payment equal to that increase in value. Conversely, when the Fund has purchased an Index Future and the price of the relevant Index has declined, the position would be less valuable and the Fund would be required to make a variation margin payment to the broker. The price of Index Futures may not correlate perfectly with movement in the underlying Index due to certain market distortions. First, all participants in the futures market are subject to margin deposit and maintenance requirements. Rather than meeting additional margin deposit requirements, investors may close futures contracts through offsetting transactions which could distort the normal relationship between the Index and futures markets. Second, the deposit requirements in the futures market are less onerous than margin requirements in the securities market, and as a result the futures market may attract more speculators than does the securities market. Increased participation by speculators in the futures market may also cause temporary price distortions. MISCELLANEOUS INVESTMENT PRACTICES PORTFOLIO TURNOVER. A change in securities held by the Fund is known as "portfolio turnover" and almost always involves the payment by the Fund of brokerage commissions or dealer markup and other transaction costs on the sale of securities as well as on the reinvestment of the proceeds in other securities. Portfolio turnover is not a limiting factor with respect to investment decisions. As disclosed in the Prospectus, high portfolio turnover involves correspondingly greater brokerage commissions and other transaction costs, which would be borne directly by the Fund, and could involve realization of capital gains that would be taxable when distributed to shareholders of the Fund. To the extent that portfolio turnover results in the realization of net short-term capital gains, such gains are ordinarily taxed to shareholders at ordinary income tax rates. 3 NOTICE ON SHAREHOLDER APPROVAL. Unless otherwise indicated in the Prospectus or this Statement of Additional Information, the investment objective and policies of the Fund may be changed without shareholder approval. INVESTMENT RESTRICTIONS Without a vote of the majority of the outstanding voting securities of the Fund, the Trust will not take any of the following actions with respect to the Fund: (1) Borrow money in excess of 10% of the value (taken at the lower of cost or current value) of the Fund's total assets (not including the amount borrowed) at the time the borrowing is made, and then only from banks as a temporary measure to facilitate the meeting of redemption requests (not for leverage) which might otherwise require the untimely disposition of portfolio investments or for extraordinary or emergency purposes or for payments of variation margin. Such borrowings will be repaid before any additional investments are purchased. Short sales and related borrowings of securities are not subject to this restriction. (2) Pledge, hypothecate, mortgage or otherwise encumber assets in excess of 10% of the Fund's total assets (taken at cost) and then only to secure borrowings permitted by Restriction 1 above. (For the purposes of this restriction, collateral arrangements with respect to options, short sales, stock index, interest rate, currency or other futures, options on futures contracts and collateral arrangements with respect to initial and variation margin are not deemed to be a pledge or other encumbrance of assets. Collateral arrangements with respect to swaps and other derivatives are also not deemed to be a pledge or other encumbrance of assets.) (3) Purchase securities on margin, except such short-term credits as may be necessary for the clearance of purchases and sales of securities. (For this purpose, the deposit or payment of initial or variation margin in connection with futures contracts or related options transactions is not considered the purchase of a security on margin.) (4) Make short sales of securities or maintain a short position if, when added together, more than 100% of the value of the Fund's net assets would be (i) deposited as collateral for the obligation to replace securities borrowed to effect short sales, and (ii) allocated to segregated accounts in connection with short sales. Short sales "against the box" are not subject to this limitation. (5) Underwrite securities issued by other persons except to the extent that, in connection with the disposition of its portfolio investments, it may be deemed to be an underwriter under federal securities laws. (6) Purchase or sell real estate, although it may purchase securities of issuers that deal in real estate, including securities of real estate investment trusts, and may purchase securities which are secured by interests in real estate. (7) Concentrate more than 25% of the value of its total assets in any one industry. (8) Invest in securities of other investment companies, except to the extent permitted by the Investment Company Act of 1940, as amended (the "1940 Act"), or by an exemptive order issued by the Securities and Exchange Commission. (9) Purchase or sell commodities or commodity contracts, except that the Fund may purchase and sell stock index and other financial futures contracts and options thereon. 4 (10) Make loans, except by purchase of debt obligations or by entering into repurchase agreements or through the lending of the Fund's portfolio securities. (11) Issue senior securities. (For the purpose of this restriction none of the following is deemed to be a senior security: any pledge or other encumbrance of assets permitted by restriction (2) above; any borrowing permitted by restriction (1) above; short sales permitted by restriction (4) above; any collateral arrangements with respect to short sales, swaps, options, future contracts and options on future contracts and with respect to initial and variation margin; and the purchase or sale of options, future contracts or options on future contracts.) Notwithstanding the latitude permitted by Restriction 9 above, the Fund has no current intention of purchasing interest rate futures. It is contrary to the present policy of the Fund, which may be changed by the Trustees of the Trust without shareholder approval, to: (a) Invest in warrants or rights (other than warrants or rights acquired by the Fund as a part of a unit or attached to securities at the time of purchase). (b) Write, purchase or sell options on particular securities (as opposed to market indices). (c) Buy or sell oil, gas or other mineral leases, rights or royalty contracts. (d) Make investments for the purpose of exercising control of a company's management. (e) Invest in (a) securities which at the time of investment are not readily marketable and (b) repurchase agreements maturing in more than seven days if, as a result, more than 15% of the Fund's net assets (taken at current value) would then be invested in such securities. (f) With respect to 75% of its total assets, invest in a security if, as a result of such investment, (a) more than 5% of the Fund's total assets would be invested in the securities of that issuer, or (b) it would hold more than 10% (taken at the time of such investment) of the outstanding voting securities of any one issuer, except that this restriction does not apply to securities issued or guaranteed by the U.S. government or its agencies or instrumentalities. Unless otherwise indicated, all percentage limitations on investments set forth herein and in the Prospectus will apply at the time of the making of an investment and shall not be considered violated unless an excess or deficiency occurs or exists immediately after and as a result of such investment. The phrase "shareholder approval," as used in the Prospectus and herein, and the phrase "vote of a majority of the outstanding voting securities," as used herein, means the affirmative vote of the lesser of (1) more than 50% of the outstanding shares of the Fund or the Trust, as the case may be, or (2) 67% or more of the shares of the Fund or the Trust, as the case may be, present at a meeting if more than 50% of the outstanding shares are represented at the meeting in person or by proxy. INCOME, DIVIDENDS, DISTRIBUTIONS AND TAX STATUS The tax status of the Fund and the distributions which it may make are summarized in the Prospectus under the headings "Distributions" and "Taxes." The Fund intends to qualify each year as a regulated investment company under the Internal Revenue Code of 1986, as amended. In order to qualify as a "regulated investment company" and to qualify for the special tax treatment accorded regulated 5 investment companies and their shareholders, the Fund must, among other things, (a) derive at least 90% of its gross income from dividends, interest, payments with respect to certain securities loans, gains from the sale or other disposition of securities or foreign currencies or other income (including but not limited to gains from options, futures or forward contracts) derived with respect to its business of investing in such securities or currencies; (b) diversify its holdings so that, at the close of each quarter of its taxable year, (i) at least 50% of the value of its total assets consists of cash, cash items, U.S. government securities, securities of other regulated investment companies, and other securities limited generally with respect to any one issuer to not more than 5% of the total assets of the Fund and not more than 10% of the outstanding voting securities of such issuer, and (ii) not more than 25% of the value of its total assets is invested in the securities of any issuer (other than U.S. government securities or securities of other regulated investment companies); and (c) distribute annually at least 90% of the sum of its taxable net investment income, its net tax-exempt income (if any), and, the excess, if any, of net short-term capital gains over net long-term capital losses for such year. To the extent the Fund qualifies for treatment as a regulated investment company, the Fund will not be subject to federal income tax on income paid to its shareholders in the form of dividends or capital gain distributions. As described in the Prospectus under the heading "Distributions," the Fund intends to pay out substantially all of its ordinary income and net short-term capital gains, and to distribute substantially all of its net capital gains, if any, after giving effect to any available capital loss carryover. Net capital gain is the excess of net gains from assets held for more than one year over net losses from capital assets held for not more than one year. In order to avoid an excise tax imposed on certain undistributed income, the Fund must distribute prior to each calendar year end and without regard to the Fund's fiscal year end (i) 98% of the Fund's ordinary income, (ii) 98% of the Fund's capital gain net income, if any, realized in the one-year period ending on October 31, and (iii) 100% of any undistributed income from prior years. In general, all dividend distributions derived from ordinary income and short-term capital gain are taxable to investors as ordinary income. Distributions of long-term gains (generally taxed at a 20% rate) will be taxable to shareholders as such, regardless of how long a shareholder has held the shares in the Fund. Distributions will be taxable as described above whether received in cash or in shares through the reinvestment of distributions. The dividends-received deduction for corporations will generally apply to the Fund's dividends from investment income to the extent derived from dividends received by the Fund from domestic corporations, provided the Fund and the shareholder each meet the relevant holding period requirements. Dividends and distributions on the Fund's shares are generally subject to federal income tax as described herein to the extent they do not exceed the Fund's realized income and gains, even though such dividends and distributions may economically represent a return of a particular shareholder's investment. Such distributions are likely to occur in respect of shares purchased at a time when the Fund's net asset value reflects gains that are either unrealized, or realized but not distributed. Certain tax-exempt organizations or entities may not be subject to federal income tax on dividends or distributions from the Fund. Each organization or entity should review its own circumstances and the federal tax treatment of its income. The Fund is generally required to withhold and remit to the U.S. Treasury 31% of the taxable dividends and other distributions, whether distributed in cash or reinvested in shares of the Fund, paid or credited to any shareholder account for which an incorrect or no taxpayer identification number has been provided or where the Fund is notified that the shareholder has underreported income in the past (or the shareholder fails to certify that he is not subject to such withholding). However, the general back-up withholding rules set forth above will 6 not apply to tax-exempt entities so long as each such entity furnishes the Fund with an appropriate certificate. The Internal Revenue Service recently revised its regulations affecting the application to foreign investors of the back-up withholding and withholding tax rules described above. The new regulations generally became effective for payments made after December 31, 2000. In some circumstances, the new rules increased the certification and filing requirements imposed on foreign investors in order to qualify for exemption from the 31% back-up withholding tax and for reduced withholding tax rates under income tax treaties. Foreign investors in the Fund should consult their tax advisors with respect to the potential application of these new regulations. To the extent such investments are permissible for the Fund, its transactions in options, futures contracts, hedging transactions, forward contracts and straddles will be subject to special tax rules (including mark-to-market, constructive sale, straddle, wash sale and short sale rules), the effect of which may be to accelerate income to the Fund, defer losses to the Fund, cause adjustments in the holding periods of the Fund's securities, convert long-term capital gains into short-term capital gains and convert short-term capital losses into long-term capital losses. These rules could therefore affect the amount, timing and character of distributions to shareholders. "Constructive sale" provisions apply to activities by the Fund which lock in gain on an "appreciated financial position." Generally, a "position" is defined to include a stock, debt instrument, or partnership interest, or an interest in any of the foregoing, including through a short sale, a swap contract, or a future or forward contract. The entry into a short sale, a swap contract or a future or forward contract relating to an appreciated direct position in any stock or debt instrument, or the acquisition of a stock or debt instrument at a time when the Fund occupies an offsetting (short) appreciated position in the stock or debt instrument, is treated as a "constructive sale" that gives rise to the immediate recognition of gain (but not loss). The application of these new provisions may cause the Fund to recognize taxable income from these offsetting transactions in excess of the cash generated by such activities. THE TAX DISCUSSION SET FORTH ABOVE IS A SUMMARY INCLUDED FOR GENERAL INFORMATION PURPOSES ONLY. EACH SHAREHOLDER IS ADVISED TO CONSULT ITS OWN TAX ADVISER WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES TO IT OF AN INVESTMENT IN THE FUND, INCLUDING THE EFFECT AND APPLICABILITY OF STATE, LOCAL, FOREIGN, AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX LAWS. THIS DISCUSSION IS NOT INTENDED AS A SUBSTITUTE FOR CAREFUL TAX PLANNING. MANAGEMENT OF THE TRUST The Trust's trustees oversee the general conduct of the Fund's business. The Trustees and officers of the Trust and their principal occupations during the past five years are as follows:
- ----------------------------------------- --------------------------------------- --------------------------------------- Name (Age) Position with the Trust Principal Occupation - ----------------------------------------- --------------------------------------- --------------------------------------- Barr M. Rosenberg (57) Vice President Director of Research, AXA Rosenberg Investment Management LLC, January 1999 to present; Chairman, AXA Rosenberg Group LLC, January 1999 to present; Director, Barr Rosenberg Research Center LLC, January 1999 to present; Managing General Partner and Chief Investment Officer, 7 Rosenberg Institutional Equity Management, January 1985 to December 1998. - ----------------------------------------- --------------------------------------- --------------------------------------- Kenneth Reid* (50) Trustee Chief Executive Officer, AXA Rosenberg Investment Management LLC, January 1999 to present; General Partner and Director of Research, Rosenberg Institutional Equity Management, June 1986 to December 1998. - ----------------------------------------- --------------------------------------- --------------------------------------- Marlis S. Fritz (50) Vice President Vice Chairman and Global Marketing Director, AXA Rosenberg Group LLC, January 1999 to present; Managing Director AXA Rosenberg Global Services LLC, January 1999 to present; General Partner and Director of Marketing, Rosenberg Institutional Equity Management, April 1985 to December 1998. - ----------------------------------------- --------------------------------------- --------------------------------------- Nils H. Hakansson (62) Trustee Sylvan C. Coleman Professor of Finance and Accounting, Haas School of Business, University of California, Berkeley, June 1969 to present; Director, Supershare Services Corporation (investment management), Los Angeles, California, November 1989 to 1995. - ----------------------------------------- --------------------------------------- --------------------------------------- William F. Sharpe (66) Trustee STANCO 25 Professor of Finance, Stanford University, September 1995 to present; Professor of Finance, Stanford University, September 1992 to September 1995; Timken Professor Emeritus of Finance, Stanford University, September 1989 to September 1992; Timken Professor of Finance, Stanford University, September 1970 to 1989; Chairman, Financial Engines Incorporated, Los Altos, California (electronic investment advice), March 1996 to present. - ----------------------------------------- --------------------------------------- --------------------------------------- Dwight M. Jaffee (56) Trustee Professor of Finance and 8 Real Estate, Haas School of Business, University of California, Berkeley, California, July 1991 to present. - ----------------------------------------- --------------------------------------- --------------------------------------- Po-Len Hew (33) Treasurer Director of Finance, AXA Rosenberg Global Services LLC, January 1999 to present; Chief Financial Officer, Barr Rosenberg Investment Management Inc., April 1994 to December 1998; Accounting Manager, Rosenberg Institutional Equity Management, October 1989 to December 1998. - ----------------------------------------- --------------------------------------- --------------------------------------- Sara Ronan (40) Clerk Global Services Coordinator and Paralegal, AXA Rosenberg Global Services LLC, January 1999 to present; Paralegal, Barr Rosenberg Investment Management, September 1997 to December 1998; Director of Marketing, MIG Realty Advisors, January 1996 to September 1997; Vice President, Liquidity Financial Advisors, May, 1985 to January 1996. - ----------------------------------------- --------------------------------------- --------------------------------------- Edward H. Lyman (55) Vice President Chief Operating Officer, AXA Rosenberg Group LLC, January 1999 to present; Chief Executive Officer, AXA Rosenberg Global Services LLC, January 1999 to present; Executive Vice President, Barr Rosenberg Investment Management, Inc. and General Counsel to the Rosenberg Group of companies, 1990 to present. - ----------------------------------------- --------------------------------------- --------------------------------------- Richard L. Saalfeld (56) President President and Chief Executive Officer, Barr Rosenberg Mutual Funds, a division of AXA Rosenberg Investment Management LLC, January 1999 to present; President and Chief Executive Officer of mutual fund unit of Rosenberg Institutional 9 Equity Management, June 1996 to December 1998; Consultant to Rosenberg Institutional Equity Management, September 1995 to May 1996; Chairman and Chief Executive Officer of CoreLink Resources, Inc. (mutual fund marketing organization), Concord, California, April 1993 to August 1995; Consultant, December 1992 to March 1993. - ----------------------------------------- --------------------------------------- --------------------------------------- Manderley Rush (33) Clerk Counsel, BISYS Fund Services, April 1998 to present; Staff Attorney, Ohio Department of Commerce, 1997 to 1998; Associate Attorney, Boyd & Boyd Co., LPA, 1995-1997 - ----------------------------------------- --------------------------------------- --------------------------------------- Alaina V. Metz (34) Assistant Clerk Chief Administrative Officer, BISYS Fund Services, 1995 to present.
* Trustee who is an "interested person" (as defined in the 1940 Act) of the Trust or AXA Rosenberg Investment Management LLC. The mailing address of each of the officers and Trustees is c/o Barr Rosenberg Series Trust, 3435 Stelzer Road, Columbus, OH 43219. The principal occupations of the officers and Trustees for the last five years have been with the employers as shown above, although in some cases they have held different positions with such employers. The Trust pays the Trustees other than those who are interested persons of the Trust or AXA Rosenberg Investment Management LLC ("the Adviser") an annual fee of _____ plus an additional fee for each meeting attended. The Trust does not pay any pension or retirement benefits for its Trustees. The Trust does not pay any compensation to officers or Trustees of the Trust other than those Trustees who are not interested persons of the Trust or Adviser. The following table sets forth information concerning the total compensation accrued and payable to each of the Trustees of the Trust or Adviser in the fiscal year ended March 31, 2001: [to be supplied]
- ------------------------- ----------------------- ----------------------- ----------------------- ----------------------- Name of Person, Position Aggregate Pension or Retirement Estimated Annual Total Compensation Compensation from Benefits Accrued as Benefits upon from Registrant Registrant Part of Fund Expenses Retirement and Fund Complex* Paid to Directors - ------------------------- ----------------------- ----------------------- ----------------------- ----------------------- Nils H. Hakansson Trustee $** $0 $0 $** - ------------------------- ----------------------- ----------------------- ----------------------- ----------------------- William F. Sharpe Trustee $** $0 $0 $** - ------------------------- ----------------------- ----------------------- ----------------------- ----------------------- Dwight M. Jaffee $** $0 $0 $** Trustee - ------------------------- ----------------------- ----------------------- ----------------------- ----------------------- Kenneth Reid Trustee $0 $0 $0 $0 - ------------------------- ----------------------- ----------------------- ----------------------- -----------------------
* The Fund Complex consists of ten funds: the AXA Rosenberg U.S. Small Capitalization Fund, the AXA Rosenberg International Small Capitalization Fund, the AXA Rosenberg Value Market Neutral Fund, the AXA Rosenberg Double Alpha Market Fund, the AXA Rosenberg Select Sectors Market Neutral Fund, the AXA Rosenberg Enhanced 500 Fund, the AXA Rosenberg International Equity Fund, the AXA Rosenberg 10 Multi-Strategy Market Neutral Fund, the AXA Rosenberg U.S. Discovery Fund, and the AXA Rosenberg European Fund. ** Reflects fees accrued for the fiscal year regardless of the actual payment date. Messrs. Rosenberg, Reid, Lyman and Saalfeld and Ms. Fritz, Ronan and Hew, each being an officer or employee of the Adviser or its affiliates, will each benefit from the management fees paid by the Trust to the Adviser, but receive no direct compensation from the Trust. INVESTMENT ADVISORY AND OTHER SERVICES INVESTMENT ADVISORY CONTRACT. As disclosed in the Prospectus under the heading "Management of the Trust," under a management contract (a "Management Contract") between the Trust, on behalf of the Fund, and the Adviser, subject to the control of the Trustees of the Trust and such policies as the Trustees may determine, the Adviser will furnish continuously an investment program for the Fund and will make investment decisions on behalf of the Fund and place all orders for the purchase and sale of portfolio securities. Subject to the control of the Trustees, the Adviser furnishes office space and equipment, provides certain bookkeeping and clerical services, and pays all salaries, fees and expenses of officers and Trustees of the Trust who are affiliated with the Adviser. As indicated under "Portfolio Transactions - -Brokerage and Research Services," the Trust's portfolio transactions may be placed with broker-dealers which furnish the Adviser, at no cost, certain research, statistical and quotation services of value to the Adviser in advising the Trust or its other clients. The Fund has agreed to pay the Adviser a monthly management fee at the annual percentage rate of the Fund's average daily net assets as set forth in the Prospectus. The Adviser has informed the Trust that it will waive some or all of its management fees under the Management Contract and, if necessary, will bear certain expenses of the Fund until further notice (but in any event at least through 3/31/02) so that the Fund's total annual operating expenses (exclusive of nonrecurring account fees and extraordinary expenses) applicable to each class will not exceed the percentage of the Fund's average daily net assets attributable to that class as set forth in the Prospectus. Any accounts waived or reimbursed in a particular fiscal year will be subject to repayment by the Fund to the Adviser to the extent that from time to time through the next two fiscal years the repayment will not cause the Fund's expenses to exceed such limit during the respective year. In addition, the Adviser's compensation under each Management Contract is subject to reduction to the extent that in any year the expenses of the Fund (including investment advisory fees but excluding taxes, portfolio brokerage commissions and any distribution and shareholder service expenses paid by a class of shares of the Fund pursuant to a distribution and shareholder service plan or otherwise) exceed the limits on investment company expenses imposed by any statute or regulatory authority of any jurisdiction in which shares of the Fund are qualified for offer and sale. The Management Contract provides that the Adviser shall not be subject to any liability to the Trust or to any shareholder of the Trust in connection with the performance of its services thereunder in the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of its obligations and duties thereunder. The Management Contract will continue in effect for a period no more than one year from the date of its execution, and renewals thereof must be approved by (i) vote, cast in person at a meeting called for that purpose, of a majority of those Trustees who are not "interested persons" of the Adviser or the Trust, and by (ii) the majority vote of either the full Board of Trustees or the vote of a majority of the outstanding shares of the Fund. The Management Contract automatically terminates on assignment and is terminable on not more than 60 days' notice by the Trust to the Adviser. In addition, the Management Contract may be terminated on not more than 60 days' written notice by the Adviser to the Trust. 11 The Adviser is wholly owned by AXA Rosenberg Group LLC. AXA Rosenberg Group LLC is contractually controlled by AXA-IM Rose Inc. AXA-IM Rose Inc. is wholly owned by AXA-IM Holdings U.S. Inc. AXA-IM Holdings U.S. Inc. is wholly owned by AXA Investment Managers S.A., a French societe anonyme, which, in turn, is owned, collectively, by AXA Assurances IARD, S.A., a French societe anonyme, and AXA-UAP, a French holding company. AXA Assurances IARD, S.A. is owned, collectively, by AXA France Assurance, a French insurance holding company, and UAP Incendie Accidents, a French casualty and insurance company, each of which, in turn, is wholly owned by AXA-UAP. Finaxa, a French holding company, beneficially owns more than 25% of the voting securities of ("Controls") AXA-UAP. Mutuelles AXA, a group of four French mutual insurance companies, one of which Controls Finaxa, acting as a group, Controls both AXA-UAP and Finaxa. Each of these entities may be deemed a controlling person of the Adviser. As discussed in this Statement of Additional Information under the heading "Management of the Trust." Kenneth Reid is a Trustee of the Trust and the Chief Executive Officer of the Adviser; Barr M. Rosenberg is a Vice President of the Trust and the Director of Research of the Adviser. Dr. Rosenberg, Dr. Reid and Marlis S. Fritz, the former general partners of Rosenberg Institutional Equity Management, the predecessor company to the Adviser, may be deemed to be controlling persons of the Adviser as a result of their interest in AXA Rosenberg Group LLC, the parent of the Adviser. As noted in the Prospectus, the Fund will pay the Adviser a management fee, on a monthly basis, totaling 0.75% of its average daily net assets each year. ADMINISTRATIVE SERVICES. The Trust has entered into a Fund Administration Agreement with BISYS Fund Services Ohio, Inc. (the "Administrator") pursuant to which the Administrator provides certain management and administrative services necessary for the Fund's operations, including: (i) general supervision of the operation of the Fund including coordination of the services performed by the Fund's custodians, depositories, accountants, legal counsel, underwriters, brokers and dealers, corporate fiduciaries, insurers and banks, regulatory compliance, including the compilation of information for documents such as reports to, and filings with, the SEC and state securities commissions, and preparation of proxy statements and shareholder reports for the Fund; (ii) general supervision relative to the compilation of data required for the preparation of periodic reports distributed to the Fund's officers and Board of Trustees; and (iii) furnishing office space and certain facilities required for conducting the business of the Fund. The Trust's principal underwriter is an affiliate of the Administrator. For these services, the Administrator is entitled to receive a fee, payable monthly, at the annual rate of 0.15% of the average daily net assets of the Trust. The Trust has also entered into a Fund Accounting Agreement with BISYS Fund Services Ohio, Inc. (the "Fund Accountant") pursuant to which the Fund Accountant provides certain accounting services necessary for the Fund's operations. For these services, the Fund Accountant is entitled to receive an annual fee of [$_________] from the Fund. DISTRIBUTOR AND DISTRIBUTION AND SHAREHOLDER SERVICE PLAN. As stated in the Prospectus under the heading "Management of the Trust -- Distributor," Institutional Shares, Investor Shares, Class A Shares, Class B Shares and Class C Shares of the Fund are sold on a continuous basis by the Trust's distributor, Barr Rosenberg Funds Distributor, Inc. (the "Distributor"). Under a Distributor's Contract between the Trust and the Distributor (the "Distributor's Contract"), the Distributor is not obligated to sell any specific amount of shares of the Trust and will purchase shares for resale only against orders for shares. Pursuant to Distribution and Shareholder Service Plans (the "Plans") described in the Prospectus, in connection with the distribution of Investor Shares, Class A Shares, Class B Shares and Class C Shares of the Trust and/or in connection with the provision of direct client service, personal services, 12 maintenance of shareholder accounts and reporting services to holders of Investor Shares, Class A Shares, Class B Shares and Class C Shares of the Trust, the Distributor receives certain distribution and shareholder service fees from the Trust. The Distributor may pay all or a portion of the distribution and service fees it receives from the Trust to participating and introducing brokers. The Fund pays no fees in connection with the distribution of Institutional Shares. Any of the Plans may be terminated by vote of a majority of the Trustees of the Trust who are not interested persons of the Trust and who have no direct or indirect financial interest in the operation of the Plans or the Distributor's Contract (the "Independent Trustees"), or by vote of a majority of the outstanding voting securities of the relevant class. Any change in a Plan that would materially increase the cost to Investor Shares, Class A Shares, Class B Shares or Class C Shares requires approval by holders of the relevant class of Shares. The Trustees of the Trust review quarterly a written report of such costs and the purposes for which such costs have been incurred. Except as described above, the Plans may be amended by vote of the Trustees of the Trust, including a majority of the Independent Trustees, cast in person at a meeting called for the purpose. For so long as the Plans are in effect, selection and nomination of those Trustees of the Trust who are not interested persons of the Trust shall be committed to the discretion of such disinterested persons. The Distributor's Contract may be terminated with respect to the Fund or Investor Shares, Class A Shares, Class B Shares or Class C Shares thereof at anytime by not more than 60 days' nor less than 30 days' written notice without payment of any penalty either by the Distributor or by the Fund or class and will terminate automatically, without the payment of any penalty, in the event of its assignment. The Plans and the Distributor's Contract will continue in effect with respect to each class of shares to which they relate for successive one-year periods, provided that each such continuance is specifically approved (i) by the vote of a majority of the Independent Trustees and (ii) by the vote of a majority of the entire Board of Trustees (or by vote of a majority of the outstanding shares of a class, in the case of the Distributor's Contract) cast in person at a meeting called for that purpose. If the Plans or the Distributor's Contract are terminated (or not renewed) with respect to one or more classes, they may continue in effect with respect to the class as to which they have not been terminated (or have been renewed). The Trustees of the Trust believe that each of the Plans will provide benefits to the Trust. The Trustees believe that the Plans will result in greater sales and/or fewer redemptions of Investor Shares, Class A Shares, Class B Shares and Class C Shares, although it is impossible to know for certain the level of sales and redemptions of Investor Shares, Class A Shares, Class B Shares or Class C Shares that would occur in the absence of the Plans or under alternative distribution schemes. The Trustees believe that the effect on sales and/or redemptions benefits the Trust by reducing Fund expense ratios and/or by affording greater flexibility to the Trust. Each Plan is of the type known as a "compensation" plan. This means that, although the trustees of the Trust are expected to take into account the expenses of the Distributor in their periodic review of the Plans, the fees are payable to compensate the Distributor for services rendered even if the amount paid exceeds the Distributor's expenses. Because these fees are paid out of the Fund's assets on an ongoing basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges. 13 CUSTODIAL ARRANGEMENTS. State Street Bank and Trust Company, Boston, Massachusetts 02102, is the Fund's custodian (the "Custodian"). As such, the Custodian holds in safekeeping certificated securities and cash belonging to the Fund and, in such capacity, is the registered owner of securities in book-entry form belonging to the Fund. Upon instruction, the Custodian receives and delivers cash and securities of the Fund in connection with Fund transactions and collects all dividends and other distributions made with respect to Fund portfolio securities. INDEPENDENT ACCOUNTANTS. The Trust's independent accountants are ____________ LLP. ____________ LLP conducts an annual audit of the Trust's financial statements, assists in the preparation of the Trust's federal and state income tax returns and the Trust's filings with the Securities and Exchange Commission, and consults with the Trust as to matters of accounting and federal and state income taxation. PORTFOLIO TRANSACTIONS INVESTMENT DECISIONS. The purchase and sale of portfolio securities for the Fund and for the other investment advisory clients of the Adviser are made by the Adviser with a view to achieving each client's investment objective. For example, a particular security may be purchased or sold on behalf of certain clients of the Adviser even though it could also have been purchased or sold for other clients at the same time. Likewise, a particular security may be purchased on behalf of one or more clients when the Adviser is selling the same security on behalf of one or more other clients. In some instances, therefore, the Adviser, acting for one client may sell indirectly a particular security to another client. It also happens that two or more clients may simultaneously buy or sell the same security, in which event purchases or sales are effected PRO RATA on the basis of cash available or other equitable basis so as to avoid any one account's being preferred over any other account. BROKERAGE AND RESEARCH SERVICES. Transactions on stock exchanges and other agency transactions involve the payment of negotiated brokerage commissions. Such commissions vary among different brokers. There is generally no stated commission in the case of securities traded in the over-the-counter markets, but the price paid for such securities usually includes an undisclosed dealer commission or mark up. In placing orders for the portfolio transactions of the Fund, the Adviser will seek the best price and execution available, except to the extent it may be permitted to pay higher brokerage commissions for brokerage and research services as described below. The determination of what may constitute best price and execution by a broker-dealer in effecting a securities transaction involves a number of considerations, including, without limitation, the overall net economic result to the Fund (involving price paid or received and any commissions and other costs paid), the efficiency with which the transaction is effected, the ability to effect the transaction at all, particularly where a large block is involved, availability of the broker to stand ready to execute possibly difficult transactions in the future, and the financial strength and stability of the broker. Because of such factors, a broker-dealer effecting a transaction may be paid a commission higher than that charged by another broker-dealer. Most of the foregoing are judgmental considerations. Over-the-counter transactions often involve dealers acting for their own account. It is the Adviser's policy to place over-the-counter market orders for the Fund with primary market makers unless better prices or executions are available elsewhere. Although the Adviser does not consider the receipt of research services as a factor in selecting brokers to effect portfolio transactions for the Fund, the Adviser will receive such services from brokers who are expected to handle a 14 substantial amount of the Fund's portfolio transactions. Research services may include a wide variety of analyses, reviews and reports on such matters as economic and political developments, industries, companies, securities and portfolio strategy. The Adviser uses such research in servicing other clients as well as the Trust. As permitted by Section 28(e) of the Securities Exchange Act of 1934, as amended, and subject to such policies as the Trustees of the Trust may determine, the Adviser may pay an unaffiliated broker or dealer that provides "brokerage and research services" (as defined in the Act) to the Adviser an amount of commission for effecting a portfolio investment transaction in excess of the amount of commission another broker or dealer would have charged for effecting that transaction. The Fund may pay brokerage commissions to Donaldson Lufkin and Jenrette and Nomura International, each of which may be deemed to be an "affiliate of an affiliate" of the Trust. Securities and Exchange Commission rules require that commissions paid to an affiliate of an affiliate by the Fund for portfolio transactions not exceed "usual and customary" brokerage commissions. The rules define "usual and customary" commissions to include amounts which are "reasonable and fair compared to the commission, fee or other remuneration received or to be received by other brokers in connection with comparable transactions involving similar securities being purchased or sold on a securities exchange during a comparable period of time." The Trustees, including those who are not "interested persons" of the Trust, have adopted procedures for evaluating the reasonableness of commissions paid to such affiliates and will review these procedures periodically. TOTAL RETURN CALCULATIONS The Fund computes its average annual total return separately for its share classes by determining the average annual compounded rates of return during specified periods that would equate the initial amount invested in a particular share class to the ending redeemable value of such investment in such class, according to the following formula: n P(1 + T) = ERV Where: T = Average annual total return ERV = Ending redeemable value of a hypothetical $1,000 investment made at the beginning of a period at the end of such period P = A hypothetical initial investment of $1,000 n = Number of years The Fund computes its cumulative total return separately for its share classes by determining the cumulative rates of return during specified periods that would equate the initial amount invested in a particular share class to the ending redeemable value of such investment in such class, according to the following formula: T = ERV-1,000 --------- 1,000 Where: T = Cumulative rate of return 15 ERV = Ending redeemable value of a hypothetical $1,000 investment made at the beginning of a period at the end of such period. The calculations of average annual total return and cumulative total return assume that any dividends and distributions are reinvested immediately, rather than paid to the investor in cash. The ending redeemable value (variable "ERV" in each formula) is determined by assuming complete redemption of the hypothetical investment and the deduction of all nonrecurring charges at the end of the period covered by the computations. Unlike bank deposits or other investments that pay a fixed yield or return for a stated period of time, the return for the Fund will fluctuate from time to time and does not provide a basis for determining future returns. Average annual total return and cumulative return are based on many factors, including market conditions, the composition of the Fund's portfolio and the Fund's operating expenses. Average annual total returns are calculated separately for Investor Shares, Institutional Shares and Class A, B and C Shares. Investor Shares, Institutional Shares and Class A, B and C Shares are subject to different fees and expenses and may have different performance for the same period. PERFORMANCE COMPARISONS. Investors may judge the performance of the Fund by comparing it to the performance of other mutual fund portfolios with comparable investment objectives and policies through various mutual fund or market indices such as those prepared by Dow Jones & Co., Inc. and Standard & Poor's and to data prepared by Lipper, Inc., a widely recognized independent service which monitors the performance of mutual funds. Comparisons may also be made to indices or data published in MONEY MAGAZINE, FORBES, BARRON'S, THE WALL STREET JOURNAL, MORNINGSTAR, INC., IBBOTSON ASSOCIATES, CDA/WIESENBERGER, THE NEW YORK TIMES, BUSINESS WEEK, U.S.A. TODAY, INSTITUTIONAL INVESTOR and other periodicals. In addition to performance information, general information about the Fund that appears in a publication such as those mentioned above may be included in advertisements, sales literature and reports to shareholders. The Fund may also include in advertisements and reports to shareholders information discussing the performance of the Adviser in comparison to other investment advisers and to other institutions. From time to time, the Trust may include the following types of information in advertisements, supplemental sales literature and reports to shareholders: (1) discussions of general economic or financial principles (such as the effects of inflation, the power of compounding and the benefits of dollar cost averaging); (2) discussions of general economic trends; (3) presentations of statistical data to supplement such discussions; (4) descriptions of past or anticipated portfolio holdings for the Fund; (5) descriptions of investment strategies for the Fund; (6) descriptions or comparisons of various investment products, which may or may not include the Fund; (7) comparisons of investment products (including the Fund) with relevant market or industry indices or other appropriate benchmarks; (8) discussions of fund rankings or ratings by recognized rating organizations; and (9) testimonials describing the experience of persons that have invested in the Fund. The Trust may also include calculations, such as hypothetical compounding examples, which describe hypothetical investment results in such communications. Such performance examples will be based on an express set of assumptions and are not indicative of the performance of the Fund. DESCRIPTION OF THE TRUST AND OWNERSHIP OF SHARES The Trust is a diversified open-end series investment company organized as a Massachusetts business trust. A copy of the Agreement and Declaration of Trust of the Trust, as amended (the "Declaration of Trust"), is on file with the Secretary 16 of The Commonwealth of Massachusetts. The fiscal year of the Trust ends on March 31. The Trust changed its name to "Barr Rosenberg Series Trust" from "Rosenberg Series Trust" on August 5, 1996. Interests in the Trust's portfolios are currently represented by shares of ten series, the AXA Rosenberg European Fund, the AXA Rosenberg U.S. Discovery Fund, the AXA Rosenberg Enhanced 500 Fund, the AXA Rosenberg International Equity Fund, the AXA Rosenberg Multi-Strategy Market Neutral Fund, the AXA Rosenberg Value Market Neutral Fund, the AXA Rosenberg Double Alpha Market Fund, the AXA Rosenberg Select Sectors Market Neutral Fund, the AXA Rosenberg U.S. Small Capitalization Fund, and the AXA Rosenberg International Small Capitalization Fund, issued pursuant to the Declaration of Trust. The rights of shareholders and powers of the Trustees of the Trust with respect to such shares are described in the Prospectus. Each series of the Trust is further divided into multiple classes of shares. As noted in the Prospectus, each of the AXA Rosenberg International Small Capitalization Fund, the AXA Rosenberg Value Market Neutral Fund, the AXA Rosenberg Double Alpha Market Fund, the AXA Rosenberg Select Sectors Market Neutral Fund, the AXA Rosenberg Enhanced 500 Fund, AXA Rosenberg International Equity Fund, the AXA Rosenberg Multi-Strategy Market Neutral Fund, the AXA Rosenberg U.S. Discovery Fund, and the AXA Rosenberg European Fund is divided into five classes of shares: Institutional Shares, Investor Shares, Class A Shares, Class B Shares and Class C Shares. The AXA Rosenberg U.S. Small Capitalization Fund is divided into three classes of shares: Institutional Shares, Adviser Shares and Investor Shares. Each class of shares of the Fund represents interests in the assets of the Fund and has identical dividend, liquidation and other rights and the same terms and conditions except that expenses, if any, related to the distribution and shareholder servicing of a particular class are borne solely by such class and each class may, at the discretion of the Trustees of the Trust, also pay a different share of other expenses, not including advisory or custodial fees or other expenses related to the management of the Trust's assets, if these expenses are actually incurred in a different amount by that class, or if the class receives services of a different kind or to a different degree than the other classes. All other expenses are allocated to each class on the basis of the net asset value of that class in relation to the net asset value of the particular Fund. The Declaration of Trust provides for the perpetual existence of the Trust. The Trust may, however, be terminated at any time by vote of at least two-thirds of the outstanding shares of each series of the Trust. VOTING RIGHTS. Shareholders are entitled to one vote for each full share held (with fractional votes for fractional shares held) and will vote (to the extent provided herein) in the election of Trustees and the termination of the Trust and on other matters submitted to the vote of shareholders. Shareholders will vote by individual series on all matters except (i) when required by the 1940 Act, shares shall be voted in the aggregate and not by individual series, and (ii) when the Trustees have determined that the matter affects only the interests of one or more series, then only shareholders of such series shall be entitled to vote thereon. Shareholders of one series shall not be entitled to vote on matters exclusively affecting another series, such matters including, without limitation, the adoption of or change in any fundamental policies or restrictions of the other series and the approval of the investment advisory contracts of the other series. Each class of shares of the Fund has identical voting rights except that each class has exclusive voting rights on any matter submitted to shareholders that relates solely to that class, and has separate voting rights on any matter submitted to shareholders in which the interests of one class differ from the interests of any other class. Each class of shares has exclusive voting rights with respect to matters pertaining to any distribution and shareholder service plan applicable to that class. All classes of shares of the Fund will vote together, except with respect to any distribution and shareholder service plan applicable to 17 a class or when a class vote is required as specified above or otherwise by the 1940 Act. There will normally be no meetings of shareholders for the purpose of electing Trustees, except that in accordance with the 1940 Act (i) the Trust will hold a shareholders' meeting for the election of Trustees at such time as less than a majority of the Trustees holding office have been elected by shareholders, and (ii) if, as a result of a vacancy in the Board of Trustees, less than two-thirds of the Trustees holding office have been elected by the shareholders, that vacancy may only be filled by a vote of the shareholders. In addition, Trustees may be removed from office by a written consent signed by the holders of two-thirds of the outstanding shares and filed with the Trust's custodian or by a vote of the holders of two-thirds of the outstanding shares at a meeting duly called for the purpose, which meeting shall be held upon the written request of the holders of not less than 10% of the outstanding shares. Upon written request by the holders of at least 1% of the outstanding shares stating that such shareholders wish to communicate with the other shareholders for the purpose of obtaining the signatures necessary to demand a meeting to consider removal of a Trustee, the Trust has undertaken to provide a list of shareholders or to disseminate appropriate materials (at the expense of the requesting shareholders). Except as set forth above, the Trustees shall continue to hold office and may appoint successor Trustees. Voting rights are not cumulative. No amendment may be made to the Declaration of Trust without the affirmative vote of a majority of the outstanding shares of the Trust except (i) to change the Trust's name or to cure technical problems in the Declaration of Trust and (ii) to establish, designate or modify new and existing series, sub-series or classes of shares of any series of Trust shares or other provisions relating to Trust shares in response to applicable laws or regulations. SHAREHOLDER AND TRUSTEE LIABILITY. Under Massachusetts law, shareholders could, under certain circumstances, be held personally liable for the obligations of the Trust. However, the Declaration of Trust disclaims shareholder liability for acts or obligations of the Trust and requires that notice of such disclaimer be given in each agreement, obligation, or instrument entered into or executed by the Trust or the Trustees. The Declaration of Trust provides for indemnification out of all the property of the relevant series for all loss and expense of any shareholder of that series held personally liable for the obligations of the Trust. Thus, the risk of a shareholder incurring financial loss on account of shareholder liability is considered remote since it is limited to circumstances in which the disclaimer is inoperative and the series of which he is or was a shareholder would be unable to meet its obligations. The Declaration of Trust further provides that the Trustees will not be liable for errors of judgment or mistakes of fact or law. However, nothing in the Declaration of Trust protects a Trustee against any liability to which the Trustee would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his office. The Declaration of Trust also provides for indemnification by the Trust of the Trustees and the officers of the Trust against liabilities and expenses reasonably incurred in connection with litigation in which they may be involved because of their offices with the Trust, except if it is determined in the manner specified in the Declaration of Trust that such Trustees are liable to the Trust or its shareholders by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of his or her duties. In addition, the Adviser has agreed to indemnify each Trustee who is not "an interested person" of the Trust to the maximum extent permitted by the 1940 Act against any liabilities arising by reason of such Trustee's status as a Trustee of the Trust. The officers and Trustees of the Trust, as a group, own less than 1% of any class of outstanding shares of the Fund. 18 DETERMINATION OF NET ASSET VALUE As indicated in the Prospectus, the net asset value of each Fund share is determined on each day on which the New York Stock Exchange is open for trading. The Trust expects that the days, other than weekend days, that the New York Stock Exchange will not be open are New Year's Day, Martin Luther King's Day, President's Day, Good Friday, Memorial Day, Independence Day (observed), Labor Day, Thanksgiving Day and Christmas Day. Portfolio securities listed on a securities exchange for which market quotations are available are valued at the last quoted sale price on each business day, or, if there is no such reported sale, at the most recent quoted bid price. Price information on listed securities is generally taken from the closing price on the exchange where the security is primarily traded. Unlisted securities for which market quotations are readily available are valued at the most recent quoted bid price, except that debt obligations with sixty days or less remaining until maturity may be valued at their amortized cost. Exchange-traded options on futures are valued at the settlement price as determined by the appropriate clearing corporation. Futures contracts are valued by comparing the gain or loss by reference to the current settlement price as determined by the appropriate clearing corporation. Other assets and securities for which no quotations are readily available are valued at fair value as determined in good faith by the Trustees of the Trust or by persons acting at their direction. PURCHASE AND REDEMPTION OF SHARES The procedures for purchasing shares of the Fund and for determining the offering price of such shares are described in the Prospectus. The Trust has elected to be governed by Rule 18f-1 under the 1940 Act pursuant to which the Trust is obligated to redeem shares solely in cash for any shareholder during any 90-day period up to the lesser of (i) $250,000 or (ii) 1% of the total net asset value of the Trust at the beginning of such period. The procedures for redeeming shares of the Fund are described in the Prospectus. The Fund has authorized one or more brokers to accept on its behalf purchase and redemption orders. Such brokers are authorized to designate other intermediaries to accept purchase and redemption orders on the Fund's behalf. The Fund will be deemed to have received a purchase or redemption order when an authorized broker or, if applicable, a broker's authorized designee, accepts such order. Such orders will be priced at the Fund's net asset value per share next determined after such orders are received by an authorized broker or the broker's authorized designee. 19 PART C OTHER INFORMATION THE AXA ROSENBERG EUROPEAN FUND ITEM 23. EXHIBITS. (a) (1) Second Amended and Restated Agreement and Declaration of Trust of the Registrant -- incorporated by reference to Post-Effective Amendment No. 19 to the Registration Statement filed on July 29, 1998; (2) Amendment No. 1 to Second Amended and Restated Agreement and Declaration of Trust of the Registrant -- incorporated by reference to Post-Effective Amendment No. 19 to the Registration Statement filed on July 29, 1998; (3) Amendment No. 2 to Second Amended and Restated Agreement and Declaration of Trust of the Registrant -- incorporated by reference to Post-Effective Amendment No. 24 to the Registration Statement filed on May 28, 1999; (4) Amendment No. 3 to the Second Amended and Restated Agreement and Declaration of Trust of the Registrant -- incorporated by reference to Post-Effective Amendment No. 33 to the Registration Statement filed on July 31, 2000; (5) Amendment No. 4 to the Second Amended and Restated Agreement and Declaration of Trust of the Registrant - incorporated by reference to Post-Effective Amendment No. 35 to the Registration Statement filed on December 4, 2000; (6) Amendment No. 5 to the Second Amended and Restated Agreement and Declaration of Trust of the Registrant - to be filed by amendment; (b) By-Laws of the Registrant -- incorporated by reference to Post-Effective Amendment No. 17 to the Registration Statement filed on December 9, 1997; (c) Not applicable; (d) Management Contract between the Registrant on behalf of its AXA Rosenberg European Fund and AXA Rosenberg Investment Management LLC - to be filed by amendment; (e) Further Amended and Restated Distributor's Contract between the Registrant and Barr Rosenberg Funds Distributor, Inc. - incorporated by reference to Post-Effective Amendment No. 35 to the Registration Statement filed on December 4, 2000.; (f) None; (g) Custody Agreement between the Registrant and State Street Bank and Trust Company - to be filed by amendment; (h) (1) Transfer Agency Agreement between the Registrant and BISYS Fund Services Ohio, Inc. -- incorporated by reference to Post-Effective 1 Amendment No. 35 to the Registration Statement filed on December 4, 2000; (2) Expense Limitation Agreement between AXA Rosenberg Investment Management LLC and the Registrant on behalf of its Funds - to be filed by amendment; (3) Administration Agreement between the Registrant and BISYS Fund Services Ohio, Inc. -- incorporated by reference to Post-Effective Amendment No. 35 to the Registration Statement filed on December 4, 2001; (4) Fund Accounting Agreement between the Registrant and BISYS Fund Services Ohio, Inc -- incorporated by reference to Post-Effective Amendment No. 35 to the Registration Statement filed on December 4, 2000; (i) Opinion of Ropes & Gray - to be filed by amendment; (j) Consent of ________________ -- to be filed by amendment; (k) None; (l) Investment letter regarding initial capital -- incorporated by reference to Post-Effective Amendment No. 19 to the Registration Statement filed on July 29, 1998; (m) (1) Amended and Restated Distribution and Shareholder Service Plan for Investor shares - incorporated by reference to Post-Effective Amendment No. 33 to the Registration Statement filed on July 28, 2000; (2) Distribution and Shareholder Service Plan for Class A Shares - incorporated by reference to Post-Effective Amendment No. 35 to the Registration Statement filed on December 4, 2000; (3) Distribution and Shareholder Service Plan for Class B Shares -- incorporated by reference to Post-Effective Amendment No. 35 to the Registration Statement filed on December 4, 2000; (4) Distribution and Shareholder Service Plan for Class C Shares -- incorporated by reference to Post-Effective Amendment No. 35 to the Registration Statement filed on December 4, 2000; (n) Further Amended and Restated Multi-Class Plan - incorporated by reference to Post-Effective Amendment No. 35 to the Registration Statement filed on December 4, 2000; (p) (1) Code of Ethics of the Registrant -- incorporated by reference to Post-Effective Amendment No. 31 filed on May 1, 2000; (2) Code of Ethics of AXA Rosenberg Investment Management LLC, investment adviser to the Funds -- incorporated by reference to Post-Effective Amendment No. 31 filed on May 1, 2000; (3) Code of Ethics of BISYS Fund Services Ohio, Inc., principal underwriter to the Funds -- incorporated by reference to Post-Effective Amendment No. 31 filed on May 1, 2000; 2 (q) (1) Power of Attorney of Po-Len Hew -- filed herewith; (2) Power of Attorney of Nils H. Hakansson -- filed herewith; (3) Power of Attorney of William F. Sharpe -- filed herewith; (4) Power of Attorney of Dwight M. Jaffee -- incorporated by reference to Post-Effective Amendment No. 24 to the Registration Statement filed on May 28, 1999. ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT. The Board of Trustees of Registrant is substantially similar to the Board of Trustees of other Funds advised by AXA Rosenberg Investment Management LLC. In addition, the officers of these Funds are substantially identical. Nonetheless, the Registrant takes the position that it is not under common control with these other Funds since the power residing in the respective boards and officers arises as the result of an official position with the respective Funds. ITEM 25. INDEMNIFICATION. (a) Indemnification Article VIII of the Registrant's Second Amended and Restated Agreement and Declaration of Trust reads as follows (referring to the Registrant as the "Trust"): ARTICLE VIII Indemnification SECTION 1. TRUSTEES, OFFICERS, ETC. The Trust shall indemnify each of its Trustees and officers (including persons who serve at the Trust's request as directors, officers or trustees of another organization in which the Trust has any interest as a shareholder, creditor or otherwise) (hereinafter referred to as a "Covered Person") against all liabilities and expenses, including but not limited to amounts paid in satisfaction of judgments, in compromise or as fines and penalties, and counsel fees reasonably incurred by any Covered Person in connection with the defense or disposition of any action, suit or other proceeding, whether civil or criminal, before any court or administrative or legislative body, in which such Covered Person may be or may have been involved as a party or otherwise or with which such Covered Person may be or may have been threatened, while in office or thereafter, by reason of being or having been such a Covered Person except with respect to any matter as to which such Covered Person shall have been finally adjudicated in any such action, suit or other proceeding to be liable to the Trust or its Shareholders by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of such Covered Person's office. Expenses, including counsel fees so incurred by any such Covered Person (but excluding amounts paid in satisfaction of judgments, in compromise or as fines or penalties), shall 3 be paid from time to time by the Trust in advance of the final disposition of any such action, suit or proceeding upon receipt of an undertaking by or on behalf of such Covered Person to repay amounts so paid to the Trust if it is ultimately determined that indemnification of such expenses is not authorized under this Article, provided, however, that either (a) such Covered Person shall have provided appropriate security for such undertaking, (b) the Trust shall be insured against losses arising from any such advance payments or (c) either a majority of the disinterested Trustees acting on the matter (provided that a majority of the disinterested Trustees then in office act on the matter), or independent legal counsel in a written opinion, shall have determined, based upon a review of readily available facts (as opposed to a full trial type inquiry) that there is reason to believe that such Covered Person will be found entitled to indemnification under this Article. SECTION 2. COMPROMISE PAYMENT. As to any matter disposed of (whether by a compromise payment, pursuant to a consent decree or otherwise) without an adjudication by a court, or by any other body before which the proceeding was brought, that such Covered Person is liable to the Trust or its Shareholders by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office, indemnification shall be provided if (a) approved, after notice that it involves such indemnification, by at least a majority of the disinterested Trustees acting on the matter (provided that a majority of the disinterested Trustees then in office act on the matter) upon a determination, based upon a review of readily available fact (as opposed to a full trial type inquiry) that such Covered Person is not liable to the Trust or its Shareholders by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office, or (b) there has been obtained an opinion in writing of independent legal counsel, based upon a review of readily available facts (as opposed to a full trial type inquiry) to the effect that such indemnification would not protect such Person against any liability to the Trust to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office. Any approval pursuant to this Section shall not prevent the recovery from any Covered Person of any amount paid to such Covered Person in accordance with this Section as indemnification if such Covered Person is subsequently adjudicated by a court of competent jurisdiction to have been liable to the Trust or its Shareholders by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of such Covered Person's office. SECTION 3. INDEMNIFICATION NOT EXCLUSIVE. The right of indemnification hereby provided shall not be exclusive of or affect any other rights to which such Covered Person may be entitled. As used in this Article VIII, the term "Covered Person" shall include such person's heirs, executors and administrators and a "disinterested Trustee" is a Trustee who is not an "interested person" of the Trust as defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended, (or who has been exempted from being an "interested person" by any rule, regulation or order of the Commission ) and against whom none of such actions, suits or other proceedings or another action, suit or other proceeding on the same or similar grounds is then or has been pending. Nothing contained in this Article shall affect any rights to indemnification to which personnel of the Trust, other than Trustees or officers, and other persons may be entitled by contract or otherwise under law, nor the power of the Trust to purchase and maintain liability insurance on behalf of any such person; provided, however, that the Trust shall not purchase or maintain any such liability insurance in contravention of applicable law, including without limitation the 1940 4 Act. SECTION 4. SHAREHOLDERS. In case any Shareholder or former Shareholder shall be held to be personally liable solely by reason of his or her being or having been a Shareholder and not because of his or her acts or omissions or for some other reason, the Shareholder or former Shareholder (or his or her heirs, executors, administrators or other legal representatives or in the case of a corporation or other entity, its corporate or other general successor) shall be entitled to be held harmless from and indemnified against all loss and expense arising from such liability, but only out of the assets of the particular series of Shares of which he or she is or was a Shareholder." (b) Insurance The Trust maintains Professional Liability Insurance for each of its directors and officers. The Trust's policy is carried by the American International Specialty Lines Insurance Company and insures each director and officer against professional liability for decisions made in connection with the Trust, to the extent permitted by the 1940 Act, up to a maximum of $3,000,000. ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER. AXA Rosenberg Investment Management LLC (the "Adviser") was organized as a limited liability company under the laws of the State of Delaware in 1998, and is registered as an investment adviser under the Investment Advisers Act of 1940. The Adviser provides investment advisory services to a substantial number of institutional investors, to the AXA Rosenberg U.S. Small Capitalization Fund, the AXA Rosenberg International Small Capitalization Fund, the AXA Rosenberg Value Market Neutral Fund, the AXA Rosenberg Double Alpha Market Fund, the AXA Rosenberg Select Sectors Market Neutral Fund, the AXA Rosenberg Enhanced 500 Fund, the AXA Rosenberg International Equity Fund, the AXA Rosenberg Multi-Strategy Market Neutral Fund, the AXA Rosenberg U.S. Discovery Fund and the AXA Rosenberg European Fund, and to the series of Barr Rosenberg Variable Insurance Trust, an open-end management investment company. Set forth below are the substantial business engagements during at least the past two fiscal years of each director or officer of the Adviser:
Name and Position with Adviser Business and Other Connections Barr M. Rosenberg General Partner, Rosenberg Alpha L.P. Director of Research (formerly RBR Partners (limited partner of Manager)), 12 El Sueno, Orinda, California, December 1984 to present; Chairman of the Board, Rosenberg Management Company S.A., 2 Place WinstonChurchill, L-1340 Luxembourg, April 1989 to present; Chairman of the Board, Rosenberg U.S. Japan Management Company S.A., 2 Place Winston Churchill, L-1340 Luxembourg, July 1989 to present. Chairman of the Board, Rosenberg Global Management Company, S.A., 2 Place Winston Churchill, L-1340 Luxemburg, April 1990 to present; Director and Chairman of the Board, Rosenberg Nomura Asset Management Company, Ltd., Dai-Ichi 5 Edobashi Bldg., 1-11-1 Nihonbashi Chuo-Ku, Tokyo 103, Japan; Chairman of the Board and Director of Barr Rosenberg Investment Management, Inc., 4 Orinda Way, Orinda, California, February 1990 to present. Chairman, Barr Rosenberg European Management, Ltd., 9A Devonshire Square, London EC2M 4LY, United Kingdom, March 1990 to present. Chairman, AXA Rosenberg Group LLC, January 1999 to present; Director, Barr Rosenberg Research Center LLC, January 1999 to present; Managing General Partner and Chief Investment Officer, Rosenberg Institutional Equity Management, January 1985 to December 1998. Kenneth Reid Director, Barr Rosenberg Investment Chief Executive Officer Management, Inc., 4 Orinda Way, Orinda, California, February 1990 to present; General Partner and Director of Research, Rosenberg Institutional Equity Management, June 1986 to December 1998. William Ricks Director of Accounting Research, Chief Investment Officer Portfolio Engineer and Research Associate, Rosenberg Institutional Equity Management, 1989 to 1998. Cecelia Baron Marketing Director, Rosenberg Marketing Director Institutional Equity Management, 1993 to 1998; Vice president and Manager of Business Development, Fischer Francis Trees & Watts, New York, 1985 to 1993.
ITEM 27. PRINCIPAL UNDERWRITERS: (a) Barr Rosenberg Funds Distributor, Inc. (the "Distributor") is the principal underwriter of the Trust's Institutional Class, Investor Class, Adviser Class, Class A, Class B and Class C shares. The Distributor does not act as principal underwriter, depositor or investment adviser for any other investment company. (b) Information with respect to the Distributor's directors and officers is as follows:
Name and Principal Positions and Offices Positions and Offices Business Address with Underwriter with Registrant ------------------ --------------------- --------------------- Irimga McKay President None Lynn J. Mangum Chairman None Dennis Sheehan EVP/Director None William Tomko Senior Vice President None Greg Maddox Supervising Principal/VP None Kevin J. Dell Vice President, Secretary None
6 The business address of all directors and officers of the Distributor is 90 Park Avenue, New York, NY 10016. (c) None ITEM 28. LOCATION OF ACCOUNTS AND RECORDS. All accounts, books and other documents required to be maintained by Section 31(a) of the Investment Company Act of 1940, as amended, and the rules thereunder will be maintained at the offices of: 1. Barr Rosenberg Series Trust 3435 Stelzer Road Columbus, Ohio 43219 Rule 31a-1 (b)(1),(2),(3), (4), (5), (6), (7), (8), (9), (10), (11) Rule 31a-2 (a) 2. AXA Rosenberg Investment Management LLC Four Orinda Way Building E Orinda, CA 94563 Rule 31a-1 (f) Rule 31a-2 (e) 3. Barr Rosenberg Funds Distributor, Inc. 90 Park Avenue New York, NY 10016 Rule 31a-1 (d) Rule 31a-2 (c) ITEM 29. MANAGEMENT SERVICES. None. ITEM 32. UNDERTAKINGS. The Registrant undertakes to comply with the last three paragraphs of Section 16(c) of the Investment Company Act of 1940 as though such provisions of the Act were applicable to the Trust. NOTICE A copy of the Second Amended and Restated Agreement and Declaration of Trust, as amended, of the Registrant is on file with the Secretary of The Commonwealth of Massachusetts and notice is hereby given that this instrument is executed on behalf of the Registrant by an officer of the Registrant as an officer and not individually and that the obligations of or arising out of this instrument are not binding for any of the trustees or shareholders individually but are binding only upon the assets and property of the Registrant. 7 SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant has duly caused this Post-Effective Amendment No. 36 to its Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Orinda, and the State of California, on the 26th day of April, 2001. BARR ROSENBERG SERIES TRUST By: RICHARD L. SAALFELD ------------------------- Richard L. Saalfeld President Pursuant to the requirements of the Securities Act of 1933, this Amendment to its Registration Statement has been signed below by the following persons in the capacities indicated and on the 26th day of April, 2001.
SIGNATURE TITLE DATE --------- ----- ---- RICHARD L. SAALFELD President (Principal April 26, 2001 ------------------- Executive Officer) Richard L. Saalfeld KENNETH REID Trustee April 26, 2001 ------------ Kenneth Reid Po-Len Hew* Treasurer (principal April 26, 2001 ---------- financial and accounting Po-Len Hew officer) William F. Sharpe* Trustee April 26, 2001 ----------------- William F. Sharpe Nils H. Hakansson* Trustee April 26, 2001 ----------------- Nils H. Hakansson Dwight M. Jaffee* Trustee April 26, 2001 ---------------- Dwight M. Jaffee *By: KENNETH REID ------------ Kenneth Reid Attorney-in-Fact Date: April 26, 2001
8 EXHIBIT INDEX EXHIBIT NUMBER DESCRIPTION 23(q)(1) Power of Attorney of Po-Len Hew; 23(q)(2) Power of Attorney of Nils H. Hakansson; 23(q)(3) Power of Attorney of William F. Sharpe. EX-23.Q-1 2 a2044516zex-23_q1.txt EXHIBIT 23.Q-1 POWER OF ATTORNEY The undersigned hereby constitutes Kenneth Reid her true and lawful attorney, with full power to sign for her, in her name and in the capacity indicated below, any and all registration statements of Barr Rosenberg Series Trust and Barr Rosenberg Variable Insurance Trust, each a Massachusetts business trust, under the Securities Act of 1933 or the Investment Company Act of 1940, and generally to do all things in her name and on her behalf to enable Barr Rosenberg Series Trust and Barr Rosenberg Variable Insurance Trust to comply with the provisions of the Securities Act of 1933, the Investment Company Act of 1940, and all requirements and regulations of the Securities and Exchange Commission, hereby ratifying and confirming her signature as it may be signed by her said attorney to any and all registration statements and amendments thereto. Witness my hand this 1st day of February, 2001. PO-LEN HEW ---------- Po-Len Hew Treasurer EX-23.Q-2 3 a2044516zex-23_q2.txt EXHIBIT 23.Q-2 POWER OF ATTORNEY The undersigned hereby constitutes Kenneth Reid his true and lawful attorney, with full power to sign for him, in his name and in the capacity indicated below, any and all registration statements of Barr Rosenberg Series Trust and Barr Rosenberg Variable Insurance Trust, each a Massachusetts business trust, under the Securities Act of 1933 or the Investment Company Act of 1940, and generally to do all things in his name and on his behalf to enable Barr Rosenberg Series Trust and Barr Rosenberg Variable Insurance Trust to comply with the provisions of the Securities Act of 1933, the Investment Company Act of 1940, and all requirements and regulations of the Securities and Exchange Commission, hereby ratifying and confirming his signature as it may be signed by his said attorney to any and all registration statements and amendments thereto. Witness my hand this 1st day of February, 2001. NILS H. HAKANSSON ------------------------------- Nils H. Hakansson Trustee EX-23.Q-3 4 a2044516zex-23_q3.txt EXHIBIT 23.Q-3 POWER OF ATTORNEY The undersigned hereby constitutes Kenneth Reid his true and lawful attorney, with full power to sign for him, in his name and in the capacity indicated below, any and all registration statements of Barr Rosenberg Series Trust and Barr Rosenberg Variable Insurance Trust, each a Massachusetts business trust, under the Securities Act of 1933 or the Investment Company Act of 1940, and generally to do all things in his name and on his behalf to enable Barr Rosenberg Series Trust and Barr Rosenberg Variable Insurance Trust to comply with the provisions of the Securities Act of 1933, the Investment Company Act of 1940, and all requirements and regulations of the Securities and Exchange Commission, hereby ratifying and confirming his signature as it may be signed by his said attorney to any and all registration statements and amendments thereto. Witness my hand this 1st day of February, 2001. WILLIAM F. SHARPE ------------------------------- William F. Sharpe Trustee -----END PRIVACY-ENHANCED MESSAGE-----