485APOS 1 a13-12630_1485apos.htm 485APOS

 

As filed with the Securities and Exchange Commission on  May 17, 2013

Securities Act No. 33-44964

Investment Company Act File No. 811-6526

 

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM N-1A

 

 

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

x

 

 

 

 

Pre-Effective Amendment No.

o

 

 

 

 

Post-Effective Amendment No. 145

x

 


 

 

and/or

 

 

 

 

 

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

x

 

 

 

 

Amendment No. 147

x

 


 

THE BOSTON TRUST & WALDEN FUNDS

(Exact Name of Registrant as Specified in Charter)

 

3435 Stelzer Road, Columbus, Ohio 43219

(Address of Principal Executive Offices)

 

Registrant’s Telephone Number: (614) 470-8000

 


 

Michael V. Wible

Thompson Hine LLP

41 S. High Street,

Suite 1700 Columbus, Ohio 43215

(Address of Agent for Service)

 

With Copies to:

Jennifer Hankins

Citi Fund Services Ohio, Inc.

3435 Stelzer Road

Columbus, Ohio 43219

 

It is proposed that this filing will become effective (check appropriate box)

 

o immediately upon filing pursuant to paragraph (b)

 

o on (August 1, 2012) pursuant to paragraph (b)

 

o 60 days after filing pursuant to paragraph (a)(1)

 

o on (date) pursuant to paragraph (a)(1)

 

x on 75 days after filing pursuant to paragraph (a)(2)

 

o on (date) pursuant to paragraph (a)(2) of Rule 485.

 

If appropriate, check the following box:

 

o this post-effective amendment designates a new effective date for a previously filed post-effective amendment.

 

 

 



 

 

PROSPECTUS

 

Walden International Equity Fund (XXXXX)

 

 

Prospectus dated August 1, 2013

 

Neither the Securities and Exchange Commission nor any other regulatory body has approved the securities being offered by this prospectus or determined whether this prospectus is accurate and complete. It is unlawful for anyone to make any representation to the contrary.

 



 

Table of Contents

 

Fund Summary

1

Walden International Equity Fund

 

 

More About Investment Objectives, Strategies and Risks

21

Investment Objectives and Strategies

26

Investment Risks

27

Disclosure of Portfolio Holdings

27

The Walden Funds — Environmental, Social and Governance Guidelines

 

 

Shareholder Information

29

Pricing of Fund Shares

29

Purchasing and Adding to Your Shares

31

Selling Your Shares

32

Exchanging Your Shares

32

Dividends, Distributions and Taxes

 

 

Fund Management

34

The Investment Adviser

35

Portfolio Managers

35

The Distributor and Administrator

 

 

Financial Highlights

36

Walden International Equity Fund

 



 

August 1, 2013

 

 

Walden International Equity Fund

Fund Summary

 

Investment Goals

 

The Walden International Equity Fund seeks long-term capital growth through an actively managed portfolio of stocks of international  companies.

 

Fees and Expenses of the Fund

 

This table describes the fees and expenses that you may pay if you buy and hold shares of the Walden International Equity Fund.

 

Shareholder Fees (fees paid directly from your investment)

 

Maximum Sales Charge (load) Imposed on Purchases

 

None

 

Maximum Deferred Sales Charge (load)

 

None

 

Redemption Fee (as a percentage of amount redeemed, if applicable)

 

None

 

 

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

 

Management Fee

 

[      ]

%

Distribution (Rule 12b-1) Fees

 

None

 

Other Expenses(1)

 

[      ]

%

Total Annual Fund Operating Expenses

 

[      ]

%

Fee Waiver and/or Expense Reimbursement(2)

 

[      ]

%

Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement

 

[      ]

%

 


(1)                     Other expenses are based on estimated amounts for the Fund’s first fiscal year.

(2)                     Boston Trust Investment Management, Inc. (the “Adviser”) has entered into an expense limitation agreement with the Fund to reduce fees payable to the Adviser and/or reimburse the Fund to limit the Total Fund Operating Expenses of the Fund to [  ]% of its average daily net assets through [August 1, 2014 (exclusive of brokerage costs, interest, taxes, dividends, litigation, indemnification, expenses associated with the investments in underlying investment companies and extraordinary expenses (as determined under generally accepted accounting principles)). The Adviser may seek recoupment of fees waived or expenses reimbursed within three fiscal years after fees were waived or expenses reimbursed if the Fund is able to make the repayment without exceeding the current limitation on Total Fund Operating Expenses.

 

Example: The 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 a $10,000 investment, a 5% annual return, redemption at the end of each period and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

 

1 Year

 

3 Years

 

5 Years

 

10 Years

 

$

[    ]

 

$

[    ]

 

$

[    ]

 

$

[    ]

 

 

Portfolio Turnover: The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the Example, affect the Fund’s performance.

 

Principal Investment Strategies

 

The Fund invests in a diversified portfolio of equity securities of large and middle capitalization companies located throughout the world.  The Fund is broadly diversified across countries, with country weights generally comparable to those of the MSCI World (ex-US) Index. Additionally, the Fund seeks to have exposures to sectors and currencies that are comparable to the Index. Under normal circumstances, at least 80% of its assets will be invested in equity securities, including ordinary shares (also known as common stocks), depositary receipts, preferred stock, convertible securities, warrants and rights to purchase common stocks.  “Assets” means net assets, plus the amount of borrowing for investment purposes.  Shareholders will be given 60 days’ advance notice of any change to this policy.

 

The Walden International Equity Fund incorporates comprehensive environmental, social and governance (ESG) guidelines in portfolio construction. The Fund also seeks to strengthen ESG performance and accountability of portfolio companies through proxy voting and  shareholder engagement. In selecting stocks, Walden Asset Management (“Walden”), an affiliate of the Adviser, favors investment in companies and institutions it deems to have relatively strong ESG records and seeks to avoid those with inferior ESG performance relative to peers. After investing in a company, Walden may also choose to pursue shareholder advocacy to encourage stronger corporate responsibility and accountability.

 

Walden researches, evaluates and seeks to promote corporate responsibility in five broad areas of concern: products and services, workplace conditions, community impact, environmental impact and corporate governance. Hence, in each of the five broad areas identified above, and notwithstanding other investment considerations, Walden favors companies judged to demonstrate best practices relative to peers, improvement over time, robust management systems, and accountability through standardized public reporting and responsiveness to shareholders.

 

Principal Investment Risks

 

All investments carry a certain amount of risk and the Fund cannot guarantee that it will achieve its investment objective. The value of the Fund’s investments will fluctuate with market conditions and interest rates and the value of your investment in the Fund will also vary. You could lose money on your investment in the Fund, or the Fund could underperform other investments. Investments in the Fund are not deposits of Boston Trust Investment Management, Inc. (the “Adviser”) or Boston Trust & Investment Management Company and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Below are the main risks of investing in the Fund.

 

Market Risk: Market risk refers to the risk related to investments in securities in general and the daily fluctuations in the securities markets.

 

Equity Risk: The value of the equity securities held by the Fund, and thus the value of a Fund’s shares, can fluctuate — at times dramatically.

 

Mid Cap Company Risk: These companies may be subject to greater market risks and fluctuations in value than large capitalization companies and may not correspond to changes in the stock market in general.

 

www.btim.com

www.waldenassetmgmt.com

 

1



 

Foreign Investment Risk: Foreign investing involves risks not typically associated with U.S. investments, including adverse political, regulatory, social and economic developments and differing auditing and legal standards.

 

Currency Risk: A decline in the value of a foreign currency versus the U.S. dollar reduces the value in U.S. dollars of investments denominated in that foreign currency and can result in a loss to the Fund.

 

2



 

Performance

 

Because the Fund has not commenced operations and does not have returns for a calendar year, no investment return information is presented for the Fund at this time. In the future, investment return information will be presented in this section of the prospectus. The information will give some indication of the risks of investing in the Fund by comparing the Fund’s investment returns with a broad measure of market performance. Also, shareholder reports containing financial and investment return information will be provided to shareholders semi-annually. Updated performance information is available at no cost by visiting www.btim.com or by calling 1-800-282-8782, extension 7050.

 

Portfolio Management

 

Investment Adviser:

Boston Trust Investment Management, Inc.

Portfolio Manager:

William Apfel, CFA, Since 2013

 

Buying and Selling Fund Shares

 

Minimum Initial Investment:

 

$

1,000,000

 

Minimum Additional Investment:

 

$

1,000

 

 

To Place Orders:

 

Boston Trust Mutual Funds

c/o Boston Trust & Investment Management Company

One Beacon Street, Boston, MA 02108

 

Transaction Policies

 

You can buy or sell shares of the Fund on any business day by mail (Boston Trust & Walden Funds, One Beacon Street, Boston, MA 02108), by telephone (1-800-282-8782, ext 7050), or through your investment representative. You can pay for shares by check or wire transfer.

 

Dividends, Capital Gains and Taxes

 

The Fund’s distributions are taxable as ordinary income and/or capital gains, except when your investment is in an IRA, 401(k) or other tax- advantaged investment plan. Such tax deferred arrangements may be taxed later upon withdrawal of monies from these arrangements.

 

Potential Conflicts of Interest

 

If you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related companies may pay the intermediary an ongoing fee for providing administrative and related shareholder services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit your financial intermediary’s web site for more information.

 

3



 

August 1, 2013

 

More About Investment Objectives, Strategies And Risks

Fund Summary

 

INVESTMENT OBJECTIVES AND STRATEGIES

 

Walden International Equity Fund

 

Investment Objective

 

The investment objective of the Walden International Equity Fund is to seek long-term capital growth through an actively managed portfolio of stocks of international  companies.

 

Policies and Strategies

 

The Adviser pursues the Fund’s investment objective by investing primarily in a diversified portfolio of equity securities of large and middle capitalization companies located throughout the world.  The Fund is broadly diversified across countries, with country weights generally comparable to those of the MSCI World (ex-US) Index.  Sector, country, and currency weightings may vary from those of the Index, but portfolio construction is designed to achieve comparable exposure and diversification.

 

Consistent with the Fund’s investment objective, the Fund:

 

·                  Under normal circumstances will invest least 80% of its assets in equity securities.  Shareholders will be given 60 days’ advance notice of any change to this policy.

·                  will invest in one or more of the following types of equity securities: ordinary shares (also known as common stocks), sponsored and unsponsored American Depositary Receipts (ADRs), European Depositary Receipts (EDRs), Global Depositary Receipts (GDRs), preferred stocks, securities convertible or exchangeable into common stocks, warrants and any rights to purchase common stocks

 

While not part of its principal investment strategy, the Fund also:

 

·                  may invest in companies in emerging market countries

·                  may invest in fixed-income securities consisting of corporate notes, bonds and debentures that are rated investment grade at the time of purchase

·                  may invest in obligations issued or guaranteed by agencies or instrumentalities of the U.S. Government including U.S. Treasury instruments

·                  may invest in cash, cash equivalents, repurchase agreements and money market funds for liquidity and cash management purposes

·                  may invest in other investment companies

 

The Adviser may sell a security for numerous reasons.  A security may be sold due to a change in   the company’s fundamentals or if the Adviser believes the security is no longer attractively valued. Investments may also be sold if the Adviser identifies another industry, sector or stock that it believes offers a better investment opportunity.

 

Investment Process for Walden International Equity Fund

 

The Fund’s investment process focuses on security selection and portfolio construction. The Adviser’s goal is to construct a diversified portfolio of higher quality companies from a universe of the MSCI World (ex-US) Index. While the Fund seeks to avoid tracking error relative to the Index based on currency, country, or sector over/under weightings, it is of the belief of the Adviser that the higher

 

4



 

quality companies in which the Fund seeks to invest should provide the Fund with lower volatility of returns.

 

The Fund’s investment process begins with a two-fold preliminary screening: Environmental, Social, and Governance screens to eliminate worst performers and/or material exposure to controversial businesses, and valuation screens to eliminate the most expensive stocks relative to peers and/or historical evaluation.  Security selection is guided by a dual focus on quality and environmental, social, and governance guidelines:

 

Quality — The Adviser seeks to identify companies that exhibit high quality business and financial characteristics. The Adviser considers high quality companies to be those judged to have financial stability, effective capital management and financial statements that reflect economic success. The Adviser uses dynamic, qualitative and quantitative methods to identify companies judged to be suitable for investment consideration.  The Adviser ranks the universe of investable international companies through the use of quantitative tools focused primarily on business stability, balance sheet sustainability, growth opportunities, profitability, and accounting. The goal is to identify companies that exhibit a quality profile judged by the Adviser to be desirable relative to the universe and each company’s sector peers.

 

Environmental, Social & Governance Guidelines — The Walden International Equity Fund incorporates environmental, social and governance (“ESG”) guidelines in connection with the management of portfolio holdings. Walden Asset Management (“Walden”), an affiliate of the Adviser, also engages in shareholder advocacy, votes proxies, and pursues other initiatives with respect to Walden Funds.

 

The Portfolio is constructed via an iterative process involving factor-based quality rankings, qualitative ESG assessments, and optimizing Index-comparable characteristics. Portfolio construction seeks to adhere to the following guidelines:

 

· The Fund’s investments possess financial characteristics the Adviser judges to be superior to those of the MSCI World (ex-US) Index.

 

· The Fund’s emphasis is on investing in high quality companies that meet Walden’s Environmental, Social, and Governance (ESG) guidelines is the primary portfolio consideration.

 

· The Fund is broadly diversified across economic sectors with economic sector weights generally comparable to those of the MSCI World (ex-US) Index.

 

· The Fund is broadly diversified across countries with country weights generally comparable to those of the MSCI World (ex-US) Index.

 

· The Fund is broadly diversified across currencies with currency weights generally comparable to those of the MSCI World (ex-US) Index.

 

· The Fund will have a weighted average market capitalization comparable to that of the MSCI World (ex-US) Index.

 

·  The Fund will have comparable valuation characteristics to those of the MSCI World (ex-US) Index.

 

· The Fund will hold between 100 and 200 positions. The Adviser will

 

5



 

generally trim portfolio holding weights as they exceed 2% of a Fund’s total assets.

 

· The Fund attempts to maintain a cash and/or money market instrument position of no more than 5% of its net assets, although cash flows may cause the Fund’s cash position to be higher or lower.

 

The Fund seeks to adhere to consistent sell discipline with consideration of relative deterioration in quality, ESG concerns, portfolio construction guidelines (i.e. consistency with the Index), and/or valuation, among others.

 

Temporary Defensive Position

 

In the event that the Adviser determines that market conditions are not suitable for a Fund’s typical investments, the Adviser may, for temporary defensive purposes during such unusual market conditions, invest all or any portion of a Fund’s assets in money market instruments.

 

INVESTMENT RISKS

 

Any investment in the Fund is subject to investment risks, including the possible loss of the principal amount invested.

 

Generally, the Fund will be subject to the following risks:

 

·                 Market Risk: Market risk refers to the risk related to investments in securities in general and the daily fluctuations in the securities markets. The Fund’s performance per share will change daily based on many factors, including fluctuation in interest rates, the quality of the instruments in the Fund’s investment portfolio, national and international economic conditions and general market conditions.

 

·                 Equity Risk: The value of the equity securities held by a Fund, and thus the value of a Fund’s shares, can fluctuate — at times dramatically. The prices of equity securities are affected by various factors, including market conditions, political and other events, and developments affecting the particular issuer or its industry or geographic sector. When the value of a Fund’s investments goes down, your investment in the Fund decreases in value and you could lose money.

 

·                 Credit Risk: Credit risk refers to the risk related to the credit quality of the issuer of a security held in a Fund’s portfolio. The Fund could lose money if the issuer of a security is unable to meet its financial obligations or the market’s perception of the issuer not being able to meet those increases.

 

·                 Midcap Risk: Middle capitalization companies may not have the size, resources or other assets of large capitalization companies.  These mid-capitalization companies may be subject to greater market risks and fluctuations in value than large capitalization companies and may not correspond to changes in the stock market in general.

 

6


 


 

·       Management Risk: The Adviser’s judgments about the attractiveness, value and potential appreciation of particular asset class or individual security in which the Fund invests may prove to be incorrect and there is no guarantee that the adviser’s judgment will produce the desired results.

 

·       Convertible Security Risk: The market value of convertible securities and other debt securities tends to fall when prevailing interest rates rise. The value of convertible securities also tends to change whenever the market value of the underlying common or preferred stock fluctuates.

 

·       Foreign Market Investment Risk: Foreign investing involves risks not typically associated with U.S. investments. These risks include, among others, adverse fluctuations in foreign currency values as well as adverse political, regulatory, social and economic developments affecting a foreign country. In addition, foreign investing involves less publicly available information, and more volatile or less liquid securities markets. Investments in foreign countries could be affected by factors not present in the U.S., such as restrictions on receiving the investment proceeds from a foreign country, foreign tax laws, and potential difficulties in enforcing contractual obligations. Foreign accounting may be less transparent than U.S. accounting practices and foreign regulation may be inadequate or irregular. Owning foreign securities could cause the Fund’s performance to fluctuate more than if it held only U.S. securities. Foreign markets also may perform differently from the U.S. market. The risks associated with foreign securities are magnified in “emerging markets”, which may be more volatile and less liquid than more developed countries. The Fund’s investments in foreign and emerging market securities may also be subject to foreign withholding and/or other taxes, which would decrease the Fund’s yield on those securities.

 

·       Investment Company Risk: Investors in a Fund will indirectly bear fees and expenses charged by the underlying investment companies in which the Fund may invest in addition to the Fund’s direct fees and expenses.

 

·       Government Risk: The U.S. government’s guarantee of ultimate payment of principal and timely payment of interest on certain U.S. government securities owned by the Fund do not imply that the Fund’s shares are guaranteed or that the price of the Fund’s shares will not fluctuate. If a U.S. government agency or instrumentality in which the Fund invest defaults and the U.S. government does not stand behind the obligation, the Fund’s share prices or yields could fall.

 

·       Currency RiskSome or all of the Fund’s assets may be denominated in foreign (non- U.S.) currencies. The value of foreign currencies relative to the U.S. dollar fluctuates in response to market, economic, political, regulatory, geopolitical or other conditions. There is the risk that the value of such assets and/or the value of any distributions from such assets may decrease if the currency in which such assets are priced or in which they make distributions falls in relation to the value of the U.S. dollar. Some emerging markets countries may have fixed or managed currencies that are not free-floating against the U.S. dollar. The Fund is not required to hedge its foreign currency risk, although it may do so through foreign currency exchange contracts and other methods. Therefore, to the extent the Fund does not hedge its foreign currency risk, or the hedges are ineffective, the value of the Fund’s assets and income could be adversely affected by currency exchange rate movements.

 

Investments in the Fund are not deposits of Boston Trust Investment Management, Inc. or Boston Trust & Investment Management Company and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

 

7



 

DISCLOSURE OF PORTFOLIO HOLDINGS

 

A  complete  list  of  each  Fund’s  portfolio  holdings  is  publicly available  on  a  quarterly  basis  through  filings  made  with  the SEC on Forms N-CSR and N-Q and on the Fund’s website at www.btim.com. A description of the Fund’s policies and procedures with respect to the disclosure of the Fund’s portfolio securities is provided in the Statement of Additional Information (SAI).

 

THE WALDEN FUNDS – ENVIRONMENTAL SOCIAL & GOVERNANCE GUIDELINES

 

The Walden International Equity Fund incorporates environmental, social and governance (“ESG”) guidelines in connection with  the  management of  their  portfolio  holdings. Walden Asset Management (“Walden”), an affiliate of the Adviser, also engages in shareholder advocacy, votes proxies, and pursues other initiatives with respect to the Walden Funds.

 

The Walden Funds operate with the understanding that the sustainability of a business is connected, in part, to its treatment of customers, workers, communities and the natural environment as valuable, long- term assets. In selecting stocks, Walden favors investment in companies and institutions it deems to have relatively strong ESG records and seeks to avoid those with inferior ESG performance relative to peers. After investing in a company, Walden may also choose to pursue shareholder advocacy to encourage stronger corporate responsibility and accountability.

 

Walden researches, evaluates and seeks to promote corporate responsibility in five broad areas of concern: products and services, workplace conditions, community impact, environmental impact and corporate governance. In doing so, Walden understands that companies are complex entities that generally exhibit a range of corporate conduct, from commendable to objectionable, across various dimensions of ESG performance. In addition, company performance can improve or erode over time, especially relative to peers. Hence, in each of the five broad areas identified above, and notwithstanding other investment considerations, Walden favors companies judged to demonstrate best practices relative to peers, improvement over time, robust management systems, and accountability through standardized public reporting and responsiveness to shareholders.

 

Consistent with this ESG framework and subject to the Adviser’s knowledge and  judgment, potential and  current holdings in  each Walden Fund are evaluated as follows:

 

·       Products & Services: Favor companies offering safe, high quality products and services that provide societal or environmental benefits. Avoid companies that derive significant revenue from the manufacture of weapons systems or hand guns, tobacco products and alcoholic beverages, or from gaming activities. Also seek to avoid companies with equity ownership in operating nuclear power plants or other significant involvement in the nuclear power fuel cycle.

 

·       Workplace Conditions: Favor companies with strong policies and programs that encourage workplace diversity, equal employment opportunity and work-life balance; respect workers’ right to organize, and enforce high labor standards throughout their supply chains. Avoid companies with substandard performance in the hiring and promotion of women and minorities, or have a pattern of violating fair labor standards or health and safety regulations.

 

· Community Impact: Favor companies that have formal structures for constructive engagement and positive relationships with local, indigenous and underserved communities. Also favor companies with strong policies and practices that uphold international human rights standards.  Avoid companies believed to have significant complicity in serious violations of human rights. Also avoid companies that are unresponsive to local community concerns on key issues such as environmental impacts, facility siting, employment, or addressing the needs of disadvantaged populations.

 

·       Environmental Impact: Favor above average companies with respect to energy and natural resource conservation, and reductions in the volume or toxicity of emissions and waste. Also favor companies that proactively address major environmental challenges, such  as  climate  change  or  water  scarcity. Avoid companies that have a pattern of serious or ongoing regulatory violations or below peer group performance on resource conservation and emissions and waste reduction.

 

·       Corporate Governance: Favor companies with governance structures and practices that foster executive and board-level commitment to high standards of business ethics, independent decision-making and accountability of board members, and an environment of responsiveness and accountability to shareholders and other key stakeholders.

 

Walden, on behalf of the Walden Funds, pursues shareholder advocacy strategies to promote greater corporate social responsibility and encourage sustainable business  practices. Additionally, if  the  ESG performance of a company in the Walden Funds is perceived to have weakened over time, Walden considers the potential for effective shareholder advocacy in deciding whether to hold or sell the company. Walden’s shareholder advocacy strategies focus on:

 

·       Proxy Voting: The voting of proxies is an important fiduciary responsibility of fund managers. The Walden Funds vote company proxies in a manner consistent with the Fund’s financial objectives and ESG guidelines.

 

·       Dialogue with Companies: Walden may initiate or participate in dialogues with management of companies held by the Walden International Equity Fund. Through telephone calls, letters and meetings with executives, the Fund may press portfolio companies to address issues of concern, such as workplace practices and policies, environmental impact of operations, international labor standards and human rights, corporate governance and public reporting.

 

8



 

·       Shareholder Resolutions: Walden may take ESG concerns directly to other shareholders through the shareholder resolution process at annual shareholder meetings, either through submission of a shareholder resolution the Walden International Equity Fund or through a submission presented by a partnership of Walden and other shareholders. However, due to varying country requirements and logistical considerations, Walden does not anticipate filing may shareholder resolutions at non-U.S. based companies.

 

Walden has sole discretion regarding the interpretation and implementation of the Walden Funds’ ESG guidelines. The Fund’s guidelines are subject to change without shareholder approval.

 

9



 

Shareholder Information

 

PRICING OF FUND SHARES

 

How NAV is Calculated

 

Shares of the Fund are sold at net asset value (“NAV”) per share.

 

The NAV is calculated by adding the total value of the Fund’s investments and other assets, subtracting its liabilities and then dividing that figure by the number of outstanding shares of that Fund:

 

 

 

TOTAL ASSETS — LIABILITIES

 

 

NAV =

NUMBER OF SHARES OUTSTANDING

 

 

The NAV per share of the Fund is determined at the close of trading (normally 4:00 p.m., Eastern Time) on each day the New York Stock Exchange (NYSE) is open for business. Generally, the NYSE is closed and the share price of the Fund is not calculated on Saturdays, Sundays and national holidays, including the following holidays: New Year’s Day, Martin Luther  King, Jr. Day, Presidents’ Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. Any other holiday recognized by the NYSE will be considered a business holiday on which the NAV of the Fund will not be calculated.

 

Your order for purchase, sale or exchange of shares is priced at the next NAV calculated after your order is received in good order by the Fund or your investment representative. This is known as the offering price. Only purchase orders received in good order by the Fund before 4:00 p.m. Eastern Time will be effective at that day’s NAV. On occasion, the NYSE will close before 4:00 p.m. Eastern Time. When that happens, purchase orders received after the NYSE closes will be effective the following business day. The NAV of the Fund may change every day.

 

Valuing Fund Assets

 

The Fund’s securities generally are valued at current market values using market quotations. The Fund may use pricing services to determine market value. If market prices are not available or, in the Adviser’s opinion, market prices do not reflect fair value, or if an event occurs after the close of trading on the exchange or market on which the security is principally traded (but prior to the time the NAV is calculated) that materially affects fair value, the Adviser will value a Fund’s assets at their fair value according to policies approved and periodically reviewed by the Fund’s Board of Trustees. For example, if trading in a portfolio security is halted and does not resume before a Fund calculates its NAV, the Adviser may need to price the security using the Fund’s fair value pricing guidelines. Without a fair value price, short term traders could take advantage of the arbitrage opportunity and dilute the NAV of long term investors. Foreign markets in which the a fund buys securities may be open on days the U.S. markets are closed, causing the fund’s NAV to change even though the fund is closed. In addition, securities trading on foreign markets present time zone arbitrage opportunities when events effecting portfolio security values occur after the close of the foreign market, bur prior to the close of the U.S. market.  Fair valuation of a Fund’s portfolio securities can serve to reduce arbitrage opportunities available to short-term traders, but there is no assurance that fair value pricing policies will prevent dilution of a Fund’s NAV by short-term traders. Fair valuation involves subjective judgments and it is possible that the fair value determined for a security may differ materially from the value that could be realized upon the sale of the security.

 

PURCHASING AND ADDING TO YOUR SHARES

 

You may purchase shares of the Fund from the Fund’s transfer agent or through investment representatives who may charge additional  fees  and  may  require  higher  minimum  investments or impose other limitations on buying and selling shares. If you purchase shares through an investment representative, that party is responsible for transmitting orders by close of business and may have an earlier cut-off time for purchase and sale requests. Consult your investment representative for specific information.

 

The Fund considers a purchase or sale order as received when a investment representative receives the order in proper form before 4:00 p.m. Eastern Time. These orders will be priced based on the

 

10



 

Fund’s NAV next computed after such order is received by the investment representative. It is the responsibility of the investment representative to transmit properly completed purchase orders to the Fund in a timely manner. Any change in price due to the failure of the Fund to timely receive an order must be settled between the investor and the investment representative placing the order.

 

Purchases of the Fund may be made on any business day. This includes any days on which the Fund is open for business, other than weekends and days on which the NYSE is closed, including the following holidays: New Year’s Day, Martin Luther King, Jr. Day, Presidents’ Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.

 

The minimum initial investment in the Fund is $1,000,000. Subsequent investments must be at least $1,000. Shares of the Fund are offered continuously for purchase at the NAV per share of the Fund next determined after a purchase order is received. Investors may purchase shares of the Fund by check or wire, as described below.

 

All purchases must be in U.S. dollars. A fee will be charged for any checks that do not clear. Third-party checks, starter checks, traveler’s checks, money orders, cash and credit card convenience checks are not accepted.

 

The Fund or the Adviser may waive its minimum purchase requirement, or the Fund may reject a purchase order, if it is deemed to be in the best interest of either the Fund and/or its shareholders.

 

Frequent Trading Policy

 

Frequent trading into and out of the Fund can have adverse consequences for the Fund and for long-term shareholders in the Fund. The Fund believes that frequent or excessive short-term trading activity by shareholders of the Fund may be detrimental to long-term shareholders because those activities may, among other things: (a) dilute the value of shares held by long-term shareholders; (b) cause the Fund to maintain larger cash positions than would otherwise be necessary; (c) increase brokerage commissions and related costs and expenses; and (d) incur additional tax liability. The Fund therefore discourages frequent purchase and redemptions by shareholders and does not make any effort to accommodate this practice. To protect against such activity, the Board of Trustees has adopted policies and procedures that are intended to permit the Fund to curtail frequent or excessive short-term trading by shareholders. At the present time the Fund does not impose limits

 

11



 

on the frequency of purchases and redemptions, nor do they limit the number of exchanges into the Fund. The Fund reserves the right, however, to impose certain limitations at any time with respect to trading in shares of the Fund, including suspending or terminating trading privileges in Fund shares, for any investor whom the Fund believes has a history of abusive trading or whose trading, in the judgment of the Fund, has been or may be disruptive to the Fund. The Fund’s ability to detect and prevent any abusive or excessive short-term trading may be limited to the extent such trading involves Fund shares held through omnibus accounts of a financial intermediary.

 

Investment representatives maintaining omnibus accounts with the Fund may impose market timing policies that are more restrictive than the market timing policy adopted by the Board of Trustees. For instance, these financial intermediaries may impose limits on the number of purchase and sale transactions that an investor may make over a set period of time and impose penalties for transactions in excess of those limits. Investment representatives also may exempt certain types of transactions from these limitations. If you purchased your shares through an investment representative, you should read carefully any materials provided by the investment representative together with this prospectus to fully understand the market timing policies applicable to you.

 

In accordance with Rule 22c-2 under the Investment Company Act of 1940, the Fund has entered into information sharing agreements with certain financial intermediaries.  Under these agreements, a  financial  intermediary  is  obligated  to  furnish  the Trust, upon its request, with information regarding customer trading activities in shares of the Fund and enforce the Funds’ market-timing policy with respect to customers identified by the Fund as having engaged in market timing. When information regarding transactions in Fund shares is requested by the Trusts and such information is in the possession of a person that is itself a financial intermediary to a financial intermediary (an “indirect intermediary”), any financial intermediary with whom the Fund has an information sharing agreement is obligated to obtain transaction information from the indirect intermediary or, if directed by the Fund, to restrict or prohibit the indirect intermediary from purchasing shares of the Fund on behalf of other persons.

 

Distribution and Shareholder Services Agreements

 

The Fund is entitled to enter into Shareholder Services Agreements pursuant to which the Fund is authorized to make payments to certain entities which may include investment advisers, banks, trust companies, retirement plan administrators and other types of service providers which provide administrative services with respect to shares of the Fund attributable to or held in the name of the service provider for its clients or other parties with whom they have a servicing relationship. Under the terms of each Shareholder Services Agreement, the Fund is authorized to pay a service provider (which may include affiliates of the Fund) a shareholder services fee which is based on the average daily net asset value of the shares of the Fund attributable to or held in the name of the service provider for providing certain administrative services to Fund shareholders with whom the service provider has a servicing relationship.

 

The Adviser (not the Fund) may pay certain financial institutions (which may include banks, brokers, securities dealers and other industry  professionals)  a  fee  from  its  bona  fide  profits  for providing distribution-related services and/or for performing certain administrative servicing functions for Fund shareholders to the extent these institutions are allowed to do so by applicable statute, rule or regulation.

 

Instructions for Opening or Adding to an Account

 

Important Information About Procedures for Opening a New Account

 

To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account. What this means for you is that when you open an account, you are required to provide your name, residential address, date of birth, and identification number. We may require other information that will allow us to identify you.

 

By Regular Mail or Overnight Service

 

Initial Investment:

 

1.              Carefully read and complete the application. Establishing your account privileges now saves you the inconvenience of having to add them later. Purchase orders must be received by the Fund in “good order”. This means your completed account application must be accompanied by payment for the shares you are purchasing.

2.              Make check or certified check payable to “Walden International Equity Fund”.

3.              Mail  to:  Boston Trust  Mutual  Funds,  c/o  Boston Trust  & Investment Management Company, One Beacon Street, Boston, MA 02108.

 

Subsequent Investments:

 

1.              Subsequent investments should be made by check or certified check payable to the applicable Fund and mailed to the address indicated above. Your account number should be written on the check.

 

By Wire Transfer

 

Note: Your bank may charge a wire transfer fee.

 

For initial investment: Before wiring funds, call 1-800-282-8782, ext. 7050, or 1-617-726-7050 to advise that an initial investment will be made by wire and to receive an account number and wire instructions.

 

12



 

Signature validation Program Non-Financial Transactions

 

The Fund and the Transfer Agent reserve the right to require signature guarantees for non-financial transactions, The Fund accepts a Signature Validation Program (SVP) stamp or a Medallion Signature Guarantee stamp if you request any of the following non-financial transactions:

 

· A change in account registration

· An addition to or change in banking instructions

· An addition to or change in beneficiaries

· An addition to or change in person authorized to execute transactions in your account

· The addition of a Power of Attorney

· The addition of or change in a Trustee

· A change in the custodian for a UTMA/UGMA

 

The SVP is intended to provide validation of authorized signatures for those transactions considered non-financial (i.e. transactions that do not involve the sale, redemption or transfer of securities). The purpose of the SVP stamp on a document is to authenticate your signature and to confirm that you have the authority to provide the instructions contained in the document. This stamp may be obtained from eligible members of a Medallion Signature Guarantee Program or other eligible guarantor institutions in accordance with SVP.

 

Eligible guarantor institutions generally include banks, broker/ dealers, credit unions, members of national securities exchanges, registered securities associations, clearing agencies and savings association. You should verify with the institutions that they are and eligible guarantor institution prior to signing. A notary public cannot provide a SVP stamp.

 

SELLING YOUR SHARES

 

Instructions for Selling Shares

 

You may sell your shares at any time. Your sales price will be the next NAV after your valid sell order is received by the Fund, its transfer agent, or your investment representative. Normally you will receive your proceeds within a week after your request is received. See section on “General Policies on Selling Shares” below.

 

Withdrawing Money from Your Fund Investment

 

A request for a withdrawal in cash from any Fund constitutes a redemption or sale of shares for a mutual fund shareholder.

 

By Telephone

(unless you have declined telephone sales privileges)

 

1.       Call 1-800-282-8782, ext. 7050 with instructions as to how you wish to receive your funds (mail, wire, electronic transfer).

 

By Mail

 

2(a)  Call 1-800-282-8782, ext. 7050 to request redemption forms or write a letter of instruction indicating:

 

· your Fund and account number

· amount you wish to redeem

· address to which your check should be sent

· account owner signature

 

2(b)  Mail to: Boston Trust Mutual Funds,

c/o Boston Trust & Investment Management Company,
One Beacon Street,

Boston, MA 02108

 

By Overnight Service

 

See instruction 2 above.

 

Send to: Boston Trust Mutual Funds,

c/o Boston Trust & Investment Management Company,
One Beacon Street,

Boston, MA 02108

 

By Wire Transfer

 

You must indicate this option on your application. The Fund may charge a wire transfer fee.

 

Note: Your financial institution may also charge a separate fee. Call 1-800-282-8782, ext. 7050 to request a wire transfer.

 

If you call by 4:00 p.m. Eastern Time, your payment normally will be wired to your bank on the next business day.

 

General Policies on Selling Shares

 

Redemptions in Writing Required

 

You must request redemption in writing in the following situations:

 

1.              Redemptions from Individual Retirement Accounts (“IRAs”).

2.              Circumstances under which redemption requests require a signature guarantee include, but may not be limited to, each of the following.

 

· Your account address has changed within the last 14 calendar days.

· The check is not being mailed to the address on your account.

· The check is not being made payable to the owner(s) of the account.

· The redemption proceeds are being transferred to another Fund account with a different registration.

· The redemption proceeds are being wired to bank instructions not on your account.

 

Signature guarantees must be obtained from members of the STAMP (Securities Transfer Agents Medallion Program), MSP (New York Stock Exchange Medallion Program) or SEMP (Stock Exchanges Medallion Program). Members are subject to dollar limitations which must be considered when requesting their guarantee. The Transfer Agent may reject any signature guarantee if it believes the transaction would otherwise be improper.

 

Verifying Telephone Redemptions

 

The Fund makes every effort to insure that telephone redemptions are only made by authorized shareholders. You will be asked for information to verify your identity. Given these precautions, unless you have specifically indicated on your application that you do not want the telephone  redemption feature, you  may  be  responsible for any fraudulent telephone orders. If appropriate precautions have

 

13



 

not been taken, the Transfer agent may be liable for losses due to unauthorized transactions. Telephone transaction privileges, including purchases, redemptions and exchanges by telephonic or facsimile instructions, may be revoked at the discretion of the Fund without advance notice to shareholders. In such cases, and at times of peak activity when it may be difficult to place orders requested by telephone, transaction requests may be made by registered or express mail.

 

Redemptions within 10 days of Initial Investment

 

When you have made your initial investment by check, you cannot redeem any portion of it until the Transfer Agent is satisfied that the check has cleared (which may require up to 10 business days). You can avoid this delay by purchasing shares with a certified check.

 

Refusal of Redemption Request

 

Payment for shares may be delayed under extraordinary circumstances or as permitted by the Securities and Exchange Commission in order to protect remaining shareholders.

 

Redemption in Kind

 

The Fund reserves the right to make payment in securities rather than cash, known as “redemption in kind.” This could occur under extraordinary circumstances, such as a very large redemption that could affect Fund operations (a redemption of more than 1% of a Fund’s net assets). If either Fund deems it advisable for the benefit of all shareholders, redemption in kind will consist of securities equal in market value to your shares. When you convert these securities to cash, you will pay brokerage charges.

 

Closing of Small Accounts

 

If your account value falls below $50,000 due to redemption activity, the Fund may ask you to increase your balance. If it is still below $50,000 after 60 days, the Fund may close your account and send you the proceeds at the then current NAV.

 

Undeliverable Redemption Checks

 

For any shareholder who chooses to receive distributions in cash: If distribution checks (1) are returned and marked as “undeliverable” or (2) are not cashed within six months, your account will be changed automatically so that all future distributions are reinvested in your account. Checks that are not cashed within six months will be canceled and the money reinvested in the Fund.

 

EXCHANGING YOUR SHARES

 

You can exchange your shares in one Fund for shares of another Boston Trust or Walden Mutual Fund. No transaction fees are charged for exchanges. An exchange is considered a sale. Consequently, gains from an exchange may be subject to applicable tax.

 

You must meet the minimum investment requirements for the Fund into which you are exchanging.

 

Instructions for Exchanging Shares

 

Exchanges may be made by sending a written request to Boston Trust Mutual Funds, c/o Boston Trust & Investment Management Company, One Beacon Street, Boston, MA 02108, or by calling 1-800-282-8782, ext. 7050. Please provide the following information:

 

· Your name and telephone number

· The exact name on your account and account number

· Taxpayer identification number (usually your social security number)

· Dollar value or number of shares to be exchanged

· The name of the Fund from which the exchange is to be made

· The name of the Fund into which the exchange is being made.

 

Please refer to “Selling your Shares” for important information about telephone transactions.

 

Notes on Exchanges

 

·                The registration and tax identification numbers of the two accounts must be identical.

·                 The Exchange Privilege (including automatic exchanges) may be changed or eliminated at any time upon a 60-day notice to shareholders.

 

DIVIDENDS, DISTRIBUTIONS AND TAXES

 

Dividends and Distributions

 

Any income a Fund receives in the form of dividends is paid out, less expenses, to its shareholders. Income dividends and capital gains distributions on the Fund usually are paid annually and are automatically reinvested in additional shares of the Fund at the applicable NAV on the distribution date unless you request cash distributions on your application or through a written request. You may elect to have distributions on shares held in IRAs paid in cash only if you are 59 1/2 years old or permanently and totally disabled or if you otherwise qualify under the applicable plan.

 

Dividends and distributions are treated in the same manner for federal income tax purposes whether you receive them in cash or in additional shares.

 

Taxes

 

The following information is provided to help you understand the federal income taxes you may have to pay on income dividends and capital gains distributions from the Fund, as well as on gains realized from your redemption of Fund shares. This discussion is not intended or written to be used as tax advice. Because everyone’s tax situation is unique, you should consult your tax professional about federal, state, local or foreign tax consequences before making an investment in the Fund.

 

Distributions. Dividends are taxable as ordinary income. Distributions designated by a Fund as long-term capital gain distributions will be taxable to you at your long-term capital gains rate, regardless of how long you have held your shares.

 

Dividends are taxable in the year they are paid or credited to your account. However, dividends declared in October, November or

 

14



 

December to shareholders of record in such a month and paid by January 31st are taxable on December 31st of the year they are declared.

 

Currently effective tax legislation generally provides, through December  31,  2012,  for  a  maximum  tax  rate  for  individual taxpayers of 15% on long-term gains and from certain qualifying dividends on corporate stock. These rate reductions do not apply to  corporate  taxpayers. The  following  are  guidelines  for  how certain distributions by the Fund are generally taxed to individual taxpayers: (i) distributions of earnings from qualifying dividends and qualifying long-term capital gains will be taxed at a maximum rate of 15%; (ii) a shareholder will also have to satisfy a greater than 60-day holding period with respect to any distributions of qualifying dividends in order to obtain the benefit of the lower tax rate; and (iii) distributions of earnings from non-qualifying dividends, interest income, other types of ordinary income and short-term capital gains will be taxed at the ordinary income tax rate applicable to the taxpayer.

 

If you are a taxable investor and invest in the Fund shortly before it makes a capital gain distribution, some of your investment may be returned to you in the form of a taxable distribution. Fund distributions will reduce a Fund’s NAV per share. Therefore, if you buy shares after the Fund has experienced capital appreciation but before the record date of a distribution of those gains, you may pay the full price for the shares and then effectively receive a portion of the purchase price back as a taxable distribution. This is commonly known as “buying a dividend.”

 

You will be notified in January each year about the federal tax status of distributions made by the Fund. Depending on your state of residence, distributions also may be subject to state and local taxes, including withholding taxes. There is a penalty on certain pre- retirement distributions from retirement accounts. Consult your tax adviser about the federal, state and local tax consequences in your particular circumstances.

 

Foreign shareholders may be subject to special withholding requirements.

 

Selling and Exchanging Shares. Selling your shares may result in a realized capital gain or loss, which is subject to federal income tax. For individuals, any long-term capital gains you realize from selling Fund shares currently are taxed at a maximum rate of 15%. Short- term capital gains are taxed at ordinary income tax rates. You or your tax adviser should track your purchases, tax basis, sales and any resulting gain or loss. If you redeem Fund shares for a loss, you may be able to use this capital loss to offset any other capital gains you have. An exchange of shares is considered a sale, and gains from any sale or exchange may be subject to applicable taxes.

 

Backup Withholding - By law, you may be subject to backup withholding on a portion of your taxable distributions and redemption proceeds unless you provide your correct Social Security or taxpayer identification number and certify that (1) this number is correct, (2) you are not subject to backup withholding, and (3) you are a U.S. person (including a U.S. resident alien).

 

You also may be subject to withholding if the Internal Revenue Service instructs us to withhold a portion of your distributions or proceeds. When withholding is required, the amount is 28% of any distributions or proceeds paid. You should be aware that a Fund may be fined $50 annually by the Internal Revenue Service for each account for which a certified taxpayer identification number is not provided. In the event that such a fine is imposed with respect to a specific account in any year, the applicable Fund may make a corresponding charge against the account.

 

Tax Status for Retirement Plans and Other Tax-Deferred Accounts - When you invest in a Fund through a qualified employee benefit plan, retirement plan or some other tax-deferred account, dividend and capital gain distributions generally are not subject to current federal income taxes. In general, these plans or accounts are governed by complex tax rules. You should ask your tax adviser or plan administrator for more information about your tax situation, including possible state or local taxes.

 

15



 

Fund Management

 

The Investment Adviser

 

Boston Trust Investment Management, Inc. (the “Adviser”), One Beacon Street, Boston, MA 02108, is the investment adviser for the Fund. The Adviser is a wholly-owned subsidiary of Boston Trust & Investment Management Company (“Boston Trust”).

 

The Adviser makes the day-to-day investment decisions for the Fund. In addition, the Adviser continuously reviews, supervises and administers the Fund’s investment program. For these advisory services, each of the Fund pays the Adviser an investment advisory fee equaling [0.75%] of its average daily net assets of the Fund..

 

The Adviser has contractually agreed to reduce the amount of advisory fees it receives from the Fund and/or reimburse the Fund to the extent necessary to limit the Total Fund Operating Expenses of the Fund to 1.00% of its average daily net assets. This agreement is effective through August 1, 2014 and is exclusive of brokerage costs, interest, taxes, dividends, litigation, indemnification, expenses associated with the investments in underlying investment companies and extraordinary expenses (as determined under generally accepted accounting principles). The Fund has agreed to repay the Adviser for amounts waived or reimbursed by the Adviser provided that such repayment does not cause a Fund’s Total Fund Operating Expenses to exceed 1.00% of its average daily net assets and the repayment is made within three years after the year in which the Adviser incurred the expense.

 

Information regarding the factors considered by the Board of Trustees of the Fund in connection with their most recent renewal of the Investment Advisory Agreement with respect to the Fund will be provided in the Fund’s Report to Shareholders for the period ended August 31, 2013.

 

ESG Research and Shareholder Advocacy

 

Walden Asset Management (“Walden”), an affiliate of the Adviser, performs environmental, social and governance (ESG) research and shareholder advocacy, proxy voting, and other initiatives for the Adviser with respect to the Walden International Equity Fund. Walden uses an in-house research and advocacy team to implement these Funds’ socially responsive investment criteria and shareholder advocacy initiatives. Since 1975, Walden has been a leader in socially responsive investing.

 

16



 

Portfolio Managers

 

The following individual serves as portfolio manager for the Fund and is primarily responsible for the day-to-day management of the Fund’s’s portfolio:

 

Walden International Equity Fund: William H. Apfel, CFA

 

Mr. Apfel, a portfolio manager at the Adviser, serves as Executive Vice President and Director of Securities Research at the Adviser’s parent company, where he has worked since 1989. Mr. Apfel earned his B.A. from Binghamton University, M.A. from Georgetown University and PhD from Brown University. Mr. Apfel also manages the Walden Asset Management Fund and the Walden Equity Fund.

 

The Statement of Additional Information has more detailed information about the Adviser as well as additional information about the portfolio manager’s compensation arrangements, other accounts managed, and ownership of securities of the Fund.

 

The Distributor and Administrator

 

BHIL Distributors, Inc., 4041 N. High Street, Suite 402, Columbus, OH 43214 is the Fund’s distributor and Citi Fund Services Ohio, Inc., 3435 Stelzer Road, Columbus, OH 43219 is the Fund’s administrator.

 

17



 

Financial Highlights

 

Financial information about the Fund is not provided because, as of the date of this prospectus, the Fund had not yet commenced operations.

 

18



 

This page is intentionally left blank.

 



 

For more information about the Fund, the following documents are available without charge upon request:

 

Annual/Semi-Annual Reports:

 

The Fund’s annual and semi-annual reports to shareholders contain additional investment information. In the annual report, you will find a discussion of the market conditions and investment strategies that significantly affected the Fund’s performance during its last fiscal year.

 

Statement of Additional Information (SAI):

 

The SAI provides more detailed information about the Fund, including its operations and investment policies. It is incorporated by reference and is legally considered a part of this prospectus.

 

The Fund currently maintains a separate Internet website containing copies of their reports or the SAI at www.btim.com.  You also can get free copies of reports and the SAI, or request other information and discuss your questions about the Fund by contacting the Fund at:

 

Boston Trust Mutual Funds

c/o Boston Trust & Investment Management Company

One Beacon Street

Boston, Massachusetts 02108

Telephone: 1-800-282-8782 x7050

 

Information from the Securities and Exchange Commission:

 

You can obtain copies of Fund documents from the SEC as follows:

 

In person:

 

The SEC’s Public Reference Room in Washington, D.C. (For their hours of operation, call 1-202-551-8090.)

 

By mail:

Securities and Exchange Commission

Public Reference Section

Washington, D.C. 20549-1520

(The SEC charges a fee to copy any documents.)

 

On the EDGAR database via the Internet:

 

www.sec.gov

 

By electronic request:

 

publicinfo@sec.gov

 

Investment Company Act File No. 811-06526.

BTWPU 09/13

 



 

WALDEN INTERNATIONAL EQUITY FUND

 

STATEMENT OF ADDITIONAL INFORMATION

 

August 1, 2013

 

This Statement of Additional Information is not a prospectus but should be read in conjunction with the prospectus for the Walden International Equity Fund, dated the same date as the date hereof (each a “Prospectus”). The Walden International Equity Fund is a separate investment portfolios of The Boston Trust & Walden Funds (the “Trust”), an open-end investment management company. This Statement of Additional Information is incorporated in its entirety into the Prospectuses. Copies of the Prospectuses may be obtained by writing the Boston Trust Mutual Funds c/o Boston Trust Investment Management, Inc. at One Beacon Street, Boston, Massachusetts 02108, by telephoning toll free (800) 282-8782, ext. 7050 and on the Funds’ website at www.btim.com.

 



 

TABLE OF CONTENTS

 

INVESTMENT OBJECTIVES AND POLICIES

3

Additional Information On Portfolio Instruments

3

 

 

INVESTMENT RESTRICTIONS

10

Portfolio Turnover

11

 

 

NET ASSET VALUE

11

Additional Purchase and Redemption Information

12

 

 

MANAGEMENT OF THE TRUST

12

Trustees and Officers

12

Investment Adviser

18

Portfolio Manager Information

19

Code of Ethics

21

Portfolio Transactions

21

Administrator and Fund Accounting Services

24

Distributor

26

Custodian

26

Transfer Agency Services

26

Independent Registered Public Accounting Firm

27

Legal Counsel

27

 

 

ADDITIONAL INFORMATION

28

Description Of Shares

28

Vote Of A Majority Of The Outstanding Shares

30

Additional Tax Information

30

Yields And Total Returns

34

Performance Comparisons

36

Proxy Voting

36

Disclosure of Fund Portfolio Holdings

37

 

 

MISCELLANEOUS

37

 

 

FINANCIAL STATEMENTS

37

 



 

STATEMENT OF ADDITIONAL INFORMATION

 

THE BOSTON TRUST & WALDEN FUNDS

 

The Boston Trust & Walden Funds (the “Trust”) is an open-end investment management company which currently offers its shares in separate series. The Trust was organized as a Massachusetts business trust on January 8, 1992. Prior to August 1, 2011, the Trust was known as The Coventry Group. Overall responsibility for the management of the Funds is vested in the Board of Trustees. Shareholders are entitled to one vote for each full share held and a proportionate fractional vote for any fractional shares held, and will vote in the aggregate and not by series except as otherwise expressly required by law. An annual or special meeting of shareholders to conduct necessary business is not required by the Trust’s Declaration of Trust, the Investment Company Act of 1940 (the “1940 Act”) or other authority, except under certain circumstances. Absent such circumstance, the Trust does not intend to hold annual or special meetings.

 

This Statement of Additional Information deals with one such series: Walden International Equity Fund.  Other series in the Trust include Boston Trust Asset Management Fund, Boston Trust Equity Fund, Boston Trust Midcap Fund, Boston Trust Small Cap Fund, Boston Trust SMID Cap Fund, Walden Asset Management Fund, Walden Equity Fund, Walden Midcap Fund, Walden SMID Cap Innovations Fund and Walden Small Cap Innovations Fund.  As used in this SAI, the term “Funds” collectively refers to each series of the Trust.  Much of the information contained in this Statement of Additional Information expands upon subjects discussed in the Prospectus. Capitalized terms not defined herein are defined in the Prospectus. No investment in shares of a Fund should be made without first reading the Prospectus.

 

 INVESTMENT OBJECTIVES AND POLICIES

 

Additional Information On Portfolio Instruments

 

The following policies supplement the investment objectives and policies of each Fund as set forth in the Prospectus.

 

MONEY MARKET INSTRUMENTS. Money market instruments selected for investment by the Funds include high grade, short-term obligations, including those issued or guaranteed by the U.S. Government, its agencies and instrumentalities, U.S. dollar-denominated certificates of deposit, time deposits and bankers’ acceptances of U.S. banks (generally banks with assets in excess of $1 billion), repurchase agreements with recognized dealers and banks and commercial paper (including participation interests in loans extended by banks to issuers of commercial paper) that at the date of investment are rated A-1 or A-1+ by S&P or P-1 by Moody’s, or, if unrated, of comparable quality as determined by the Adviser.

 

REPURCHASE AGREEMENTS. The Funds may enter into repurchase agreements. Under such agreements, the seller of a security agrees to repurchase it at a mutually agreed upon time and price. The repurchase price may be higher than the purchase price, the difference being income to the Funds, or the purchase and repurchase prices may be the same, with interest at a stated rate due to the Funds together with the repurchase price on repurchase. In either case, the income to the Funds is unrelated to the interest rate on the security itself. Such repurchase agreements will be made only with banks with assets of $500 million or more that are insured by the Federal Deposit Insurance Corporation or with Government securities dealers recognized by the Federal Reserve Board and registered as broker-dealers with the Securities and Exchange Commission (“SEC”) or exempt from such registration. The Funds will enter generally into repurchase agreements of short durations, from overnight to one week, although the underlying securities generally have longer maturities. The Funds may not enter into a repurchase agreement with more than seven days to maturity if, as a result, more than 5% of the value of the Funds’ net assets would be invested in illiquid securities including such repurchase agreements.

 

For purposes of the 1940 Act, a repurchase agreement is deemed to be a loan from the Funds to the seller of the U.S. Government security subject to the repurchase agreement. In the event of the insolvency or default of the seller, the Funds could encounter delays and incur costs before being able to sell the security. Delays may involve loss of interest or a decline in price of the U.S. Government security. As with any unsecured debt instrument purchased for the Funds, the Investment Adviser seeks to minimize the risk of loss through repurchase agreements by analyzing the creditworthiness of the obligor, in this case the seller of the U.S. Government security.

 

There is also the risk that the seller may fail to repurchase the security. However, the Funds will always receive as collateral for any repurchase agreement to which it is a party securities acceptable to it, the market value of which is equal to at least 100% of the amount invested by the Funds plus accrued interest, and the Funds will make payment against such securities only upon physical delivery or evidence of book entry transfer to the account of its Custodian. If the market

 

3



 

value of the U.S. Government security subject to the repurchase agreement becomes less than the repurchase price (including interest), the Funds will direct the seller of the U.S. Government security to deliver additional securities so that the market value of all securities subject to the repurchase agreement will equal or exceed the repurchase price. It is possible that the Funds will be unsuccessful in seeking to impose on the seller a contractual obligation to deliver additional securities.

 

WHEN-ISSUED SECURITIES. The Funds are authorized to purchase securities on a “when-issued” basis. The price of such securities, which may be expressed in yield terms, is fixed at the time the commitment to purchase is made, but delivery and payment for the when-issued securities take place at a later date. Normally, the settlement date occurs within one month of the purchase; during the period between purchase and settlement, no payment is made by the Funds to the issuer and no interest accrues to the Funds. To the extent that assets of the Funds are held in cash pending the settlement of a purchase of securities, the Funds would earn no income; however, it is the Funds’ intention to be fully invested to the extent practicable and subject to the policies stated above. While when-issued securities may be sold prior to the settlement date, any purchase of such securities would be made with the purpose of actually acquiring them unless a sale appears desirable for investment reasons. At the time the Fund makes the commitment to purchase a security on a when-issued basis, it will record the transaction and reflect the value of the security in determining its net asset value. The market value of the when-issued securities may be more or less than the purchase price. The Funds do not believe that its net asset value or income will be affected adversely by its purchase of securities on a when-issued basis. The Funds will designate liquid securities equal in value to commitments for when-issued securities. Such segregated assets either will mature or, if necessary, be sold on or before the settlement date.

 

FOREIGN SECURITIESForeign investments can involve significant risks in addition to the risks inherent in U.S. investments. The value of securities denominated in or indexed to foreign currencies, and of dividends and interest from such securities, can change significantly when foreign currencies strengthen or weaken relative to the U.S. dollar (See CURRENCY RISK). Foreign securities markets generally have less trading volume and less liquidity than U.S. markets, and prices on some foreign markets can be highly volatile. Many foreign countries lack uniform accounting and disclosure standards comparable to those applicable to U.S. companies, and it may be more difficult to obtain reliable information regarding an issuer’s financial condition and operations. Foreign branches of U.S. banks and foreign banks are not regulated by U.S. banking authorities and may be subject to less stringent reserve requirements than those applicable to domestic branches of U.S. banks. In addition, foreign banks generally are not bound by accounting, auditing, and financial reporting standards comparable to those applicable to U.S. banks.  Dividends and interest paid by foreign issuers may be subject to withholding and other foreign taxes which may decrease the net return on foreign investments as compared to dividends and interest paid to a Fund by domestic companies .In addition, the costs of foreign investing, including withholding taxes, brokerage commissions, and custodial costs, generally are higher than for U.S. investments.

 

Foreign markets may offer less protection to investors than U.S. markets. Foreign issuers, brokers, and securities markets may be subject to less government supervision. The settlement periods for foreign securities and instruments are often longer than those for securities or obligations of U.S. issuers or instruments denominated in U.S. dollars. Delayed settlement may affect the liquidity of a Fund’s holdings. Certain types of securities and other instruments are not traded “delivery versus payment” in certain markets (e.g., government bonds in Russia) meaning that a Fund may deliver securities or instruments before payment is received from the counterparty. In such markets, the Fund may not receive timely payment for securities or other instruments it has delivered and may be subject to increased risk that the counterparty will fail to make payments when due or default completely.  It also may be difficult to enforce legal rights in foreign countries.

 

Investing abroad also involves different political and economic risks. Foreign investments may be affected by actions of foreign governments adverse to the interests of U.S. investors, including the possibility of expropriation or nationalization of assets, confiscatory taxation, restrictions on U.S. investment or on the ability to repatriate assets or convert currency into U.S. dollars, or other government intervention. There may be a greater possibility of default by foreign governments or foreign government-sponsored enterprises. Investments in foreign countries also involve a risk of local political, economic, or social instability, military action or unrest, or adverse diplomatic developments. There can be no assurance that the Adviser will be able to anticipate these potential events and/or counter their impacts on a Fund’s share price.

 

Securities of foreign issuers may be held by the Funds in the form of American Depositary Receipts and European Depositary Receipts (“ADRs” and “EDRs”). These are certificates evidencing ownership of shares of a foreign-based issuer held in trust by a bank or similar financial institution. Designed for use in U.S. and European securities markets,

 

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respectively, ADRs and EDRs are alternatives to the purchase of the underlying securities in their national market and currencies. For more information, see “Depositary Receipts”.

 

.The Boston Trust Asset Management Fund and the Walden Asset Management Fund each may invest up to 25% of their assets in foreign securities.  Each other Fund, other than the Walden International Equity Fund, may invest up to 15% of its assets in foreign securities.  Each Fund may invest without regard to the these limitation in securities of foreign issuers which are listed and traded on a domestic national securities exchange.  The Walden International Equity Fund may invest without limit in foreign securities.

 

CURRENCY RISK..  Foreign securities may be denominated in foreign currencies, although foreign issuers may also issue securities denominated in U.S. dollars. The value of a Fund’s investments denominated in foreign currencies and any funds held in foreign currencies will be affected by changes in currency exchange rates, the relative strength of those currencies and the U.S. dollar, and exchange-control regulations. Changes in the foreign currency exchange rates also may affect the value of dividends and interest earned, gains and losses realized on the sale of securities and net investment income and gains, if any, to be distributed to shareholders by a Fund. The exchange rates between the U.S. dollar and other currencies are determined by the forces of supply and demand in foreign exchange markets. Accordingly, the ability of a Fund that invests in foreign securities as part of its principal investment strategy to achieve its investment objective may depend, to a certain extent, on exchange rate movements. In addition, while the volume of transactions effected on foreign stock exchanges has increased in recent years, in most cases it remains appreciably below that of domestic securities exchanges. Accordingly, a Fund’s foreign investments may be less liquid and their prices may be more volatile than comparable investments in securities of U.S. companies. In buying and selling securities on foreign exchanges, purchasers normally pay fixed commissions that are generally higher than the negotiated commissions charged in the U.S. In addition, there is generally less government supervision and regulation of securities exchanges, brokers and issuers located in foreign countries than in the U.S.

 

DEBT SECURITIES AND RATINGS. Ratings of debt securities represent the rating agencies’ (as described below) opinions regarding their quality, are not a guarantee of quality and may be reduced after a Fund has acquired the security.

 

If a security’s rating is reduced while it is held by the Funds, the Adviser will consider whether the Funds should continue to hold the security, but the Funds are not required to dispose of it. Credit ratings attempt to evaluate the safety of principal and interest payments and do not evaluate the risks of fluctuations in market value. Also, rating agencies may fail to make timely changes in credit ratings in response to subsequent events, so that an issuer’s current financial conditions may be better or worse than the rating indicates.

 

The Funds reserve the right to invest up to 20% of their assets in securities rated lower than BBB- by Standard & Poor’s Ratings Group (“S&P”) or lower than Baa3 by Moody’s Investors Service, Inc. (“Moody’s”), but rated at least B- by S&P or B3 by Moody’s (or, in either case, if unrated, deemed by the Adviser to be of comparable quality). Lower-rated securities generally offer a higher current yield than that available for higher grade issues. However, lower-rated securities involve higher risks, in that they are especially subject to adverse changes in general economic conditions and in the industries in which the issuers are engaged, to changes, or perceived changes, in the financial condition of the issuers and to price fluctuations in response to changes in interest rates. During periods of economic downturn or rising interest rates, highly leveraged issuers may experience financial stress which could affect adversely their ability to make payments of interest and principal and increase the possibility of default. In addition, the market for lower-rated debt securities has expanded rapidly in recent years, and its growth paralleled a long economic expansion. At times in recent years, the prices of many lower-rated debt securities declined substantially, reflecting an expectation that many issuers of such securities might experience financial difficulties. As a result, the yields on lower-rated debt securities rose dramatically, but such higher yields did not reflect the value of the income stream that holders of such securities expected, but rather, the risk that holders of such securities could lose a substantial portion of their value as a result of the issuers’ financial restructuring or default. There can be no assurance that such declines will not recur. The market for lower-rated debt issues generally is smaller and less active than that for higher quality securities, which may limit the Funds’ ability to sell such securities at fair value in response to changes in the economy or financial markets. Adverse publicity and investor perceptions, whether or not based on fundamental analysis, may also decrease the values and liquidity of lower-rated securities, especially in a smaller and less actively-traded market.

 

Lower-rated debt obligations also present risks based on payment expectations. If an issuer calls the obligation for redemption, the Funds may have to replace the security with a lower-yielding security, resulting in a decreased return to

 

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investors. Also, because the principal value of bonds moves inversely with movements in interest rates, in the event of rising interest rates, the value of the securities held by the Funds may decline proportionately more than funds consisting of higher-rated securities. If the Funds experience unexpected net redemptions, they may be forced to sell their higher-rated bonds, resulting in a decline in the overall credit quality of the securities held by the Funds and increasing the exposure of the Funds to the risks of lower-rated securities. Investments in zero-coupon bonds may be more speculative and subject to greater fluctuations in value due to changes in interest rates than bonds that pay interest currently.

 

GOVERNMENT SECURITIES. Obligations of certain agencies and instrumentalities of the U.S. government, such as the Government National Mortgage Association (“Ginnie Mae”) and the Export-Import Bank, are supported by the full faith and credit of the U.S. Treasury; others, such as the Federal National Mortgage Association (“Fannie Mae”), are supported by the right of the issuer to borrow from the Treasury; others are supported by the discretionary authority of the U.S. government to purchase the agency’s obligations; and still others, such as the Federal Farm Credit Banks and the Federal Home Loan Mortgage Corporation (“Freddie Mac”) are supported only by the credit of the instrumentality. No assurance can be given that the U.S. government would provide financial support to U.S. government-sponsored agencies or instrumentalities if it is not obligated to do so by law. On September 7, 2008, the U.S. Treasury Department and the Federal Housing Finance Authority (the “FHFA”) announced that Fannie Mae and Freddie Mac had been placed into conservatorship, a statutory process designed to stabilize a troubled institution with the objective of returning the entity to normal business operations. The U.S. Treasury Department and the FHFA at the same time established a secured lending facility and a Secured Stock Purchase Agreement with both Fannie Mae and Freddie Mac to ensure that each entity had the ability to fulfill its financial obligations. The FHFA announced that it does not anticipate any disruption in pattern of payments or ongoing business operations of Fannie Mae or Freddie Mac.

 

OPTIONS AND FUTURES CONTRACTS. To the extent consistent with its investment objectives and policies, each Fund may purchase and write call and put options on securities, securities indexes and on foreign currencies and enter into futures contracts and use options on futures contracts, to the extent of up to 5% of its assets. The Funds will engage in futures contracts and related options only for hedging purposes and will not engage in such transactions for speculation or leverage.

 

Transactions in options on securities and on indexes involve certain risks. For example, there are significant differences between the securities and options markets that could result in an imperfect correlation between these markets, causing a given transaction not to achieve its objectives. A decision as to whether, when and how to use options involves the exercise of skill and judgment, and even a well-conceived transaction may be unsuccessful to some degree because of market behavior or unexpected events.

 

There can be no assurance that a liquid market will exist when the Funds seek to close out an option position. If the Funds were unable to close out an option that it had purchased on a security, it would have to exercise the option in order to realize any profit or the option would expire worthless. If the Funds were unable to close out a covered call option that it had written on a security, it would not be able to sell the underlying security unless the option expired without exercise. As the writer of a covered call option, the Funds forgo, during the option’s life, the opportunity to profit from increases in the market value of the security covering the call option above the sum of the premium and the exercise price of the call.

 

If trading were suspended in an option purchased by the Funds, the Funds would not be able to close out the option. If restrictions on exercise were imposed, the Funds might be unable to exercise an option it had purchased. Except to the extent that a call option on an index written by the Funds is covered by an option on the same index purchased by the Funds, movements in the index may result in a loss to the Funds; such losses might be mitigated or exacerbated by changes in the value of the Funds’ securities during the period the option was outstanding.

 

Use of futures contracts and options thereon also involves certain risks. The variable degree of correlation between price movements of futures contracts and price movements in the related portfolio positions of the Funds creates the possibility that losses on the hedging instrument may be greater than gains in the value of the Fund’s position. Also, futures and options markets may not be liquid in all circumstances and certain over the counter options may have no markets. As a result, in certain markets, the Funds might not be able to close out a transaction at all or without incurring losses. Although the use of options and futures transactions for hedging should minimize the risk of loss due to a decline in the value of the hedged position, at the same time they tend to limit any potential gain which might result from an increase in the value of such position. If losses were to result from the use of such transactions, they could reduce net asset value and possibly income. The Funds may use these techniques to hedge against changes in interest rates or securities prices or as part of its

 

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overall investment strategy. The Funds will segregate liquid assets (or, as permitted by applicable regulation, enter into certain offsetting positions) to cover its obligations under options and futures contracts to avoid leveraging of the Funds.

 

ILLIQUID AND RESTRICTED SECURITIES. The Funds may not invest more than 5% of its net assets in illiquid securities, including (i) securities for which there is no readily available market; (ii) securities the disposition of which would be subject to legal restrictions (so-called “restricted securities”); and (iii) repurchase agreements having more than seven days to maturity. A considerable period of time may elapse between the Funds’ decision to dispose of such securities and the time when the Funds are able to dispose of them, during which time the value of the securities could decline. Securities which meet the requirements of Securities Act Rule 144A are restricted, but may be determined to be liquid by the Trustees, based on an evaluation of the applicable trading markets.

 

CONVERTIBLE SECURITIES. Convertible securities include fixed income securities that may be exchanged or converted into a predetermined number of shares of the issuer’s underlying common stock at the option of the holder during a specified period. Convertible securities may take the form of convertible preferred stock, convertible bonds or debentures, units consisting of “usable” bonds and warrants or a combination of the features of several of these securities. Convertible securities are senior to common stocks in an issuer’s capital structure, but are usually subordinated to similar non-convertible securities. While providing a fixed-income stream (generally higher in yield than the income derivable from common stock but lower than that afforded by a similar nonconvertible security), a convertible security also gives an investor the opportunity, through its conversion feature, to participate in the capital appreciation of the issuing company depending upon a market price advance in the convertible security’s underlying common stock.

 

CLOSED-END INVESTMENT COMPANIES. Each Fund may invest in closed-end investment companies. Shares of closed-end funds are typically offered to the public in a one-time initial public offering by a group of underwriters who retain a spread or underwriting commission of between 4% or 6% of the initial public offering price. Such securities are then listed for trading on the New York Stock Exchange, the American Stock Exchange, the National Association of Securities Dealers Automated Quotation System (commonly known as “NASDAQ”) and, in some cases, may be traded in other over-the-counter markets. Because the shares of closed-end funds cannot be redeemed upon demand to the issuer like the shares of an open-end investment company (such as each Fund), investors seek to buy and sell shares of closed-end funds in the secondary market.

 

Each Fund generally will purchase shares of closed-end funds only in the secondary market. Each Fund will incur normal brokerage costs on such purchases similar to the expenses each Fund would incur for the purchase of securities of any other type of issuer in the secondary market. Each Fund may, however, also purchase securities of a closed-end fund in an initial public offering when, in the opinion of the Adviser, based on a consideration of the nature of the closed-end Fund’s proposed investments, the prevailing market conditions and the level of demand for such securities, they represent an attractive opportunity for growth of capital. The initial offering price typically will include a dealer spread, which may be higher than the applicable brokerage cost if each Fund purchased such securities in the secondary market.

 

The shares of many closed-end funds, after their initial public offering, frequently trade at a price per share that is less than the net asset value per share, the difference representing the “market discount” of such shares. This market discount may be due in part to the investment objective of long-term appreciation, which is sought by many closed-end funds, as well as to the fact that the shares of closed-end funds are not redeemable by the holder upon demand to the issuer at the next determined net asset value, but rather, are subject to supply and demand in the secondary market. A relative lack of secondary market purchasers of closed-end fund shares also may contribute to such shares trading at a discount to their net asset value.

 

A closed end fund in which a Fund invests may issue auction preferred shares (“APS”). The dividend rate for the APS normally is set through an auction process. In the auction, holders of APS may indicate the dividend rate at which they would be willing to hold or sell their APS or purchase additional APS. The auction also provides liquidity for the sale of APS. A Fund may not be able to sell its APS at an auction if the auction fails. An auction fails if there are more APS offered for sale than there are buyers. A closed end fund may not be obligated to purchase APS in an auction or otherwise, nor may the closed end fund be required to redeem APS in the event of a failed auction. As a result, a Fund’s investment in APS may be illiquid. In addition, if the Fund buys APS or elects to retain APS without specifying a dividend rate below which it would not wish to buy or continue to hold those APS, the Fund could receive a lower rate of return on its APS than the market rate.

 

Each Fund may invest in shares of closed-end funds that are trading at a discount to net asset value or at a premium

 

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to net asset value. There can be no assurance that the market discount on shares of any closed-end fund purchased by each Fund will ever decrease. In fact, it is possible that this market discount may increase and each Fund may suffer realized or unrealized capital losses due to further decline in the market price of the securities of such closed-end funds, thereby adversely affecting the net asset value of each Fund’s shares. Similarly, there can be no assurance that any shares of a closed-end fund purchased by each Fund at a premium will continue to trade at a premium or that the premium will not decrease subsequent to a purchase of such shares by each Fund.

 

Closed-end funds may issue senior securities (including preferred stock and debt obligations) for the purpose of leveraging the closed-end Fund’s common shares in an attempt to enhance the current return to such closed-end Fund’s common shareholders. Each Fund’s investment in the common shares of closed-end funds that are financially leveraged may create an opportunity for greater total return on its investment, but at the same time may be expected to exhibit more volatility in market price and net asset value than an investment in shares of investment companies without a leveraged capital structure.

 

DEPOSITARY RECEIPTS. Sponsored and unsponsored American Depositary Receipts (“ADRs”), which are receipts issued by an American bank or trust company evidencing ownership of underlying securities issued by a foreign issuer. ADRs, in sponsored form, are designed for use in U.S. securities markets. A sponsoring company provides financial information to the bank and may subsidize administration of the ADR. Unsponsored ADRs may be created by a broker-dealer or depository bank without the participation of the foreign issuer. Holders of these ADRs generally bear all the costs of the ADR facility, whereas foreign issuers typically bear certain costs in a sponsored ADR. The bank or trust company depositary of an unsponsored ADR may be under no obligation to distribute shareholder communications received from the foreign issuer or to pass through voting rights. Unsponsored ADRs may carry more risk than sponsored ADRs because of the absence of financial information provided by the underlying company. Many of the risks described below regarding foreign securities apply to investments in ADRs.

 

INVESTMENT COMPANY SECURITIES. Each Fund may invest in the securities of other investment companies, including those described under “Closed-End Investment Companies”, to the extent that such an investment would be consistent with the requirements of the 1940 Act and each Fund’s investment objectives. Investments in the securities of other investment companies may involve duplication of advisory fees and certain other expenses. By investing in another investment company, each Fund becomes a shareholder of that investment company. As a result, each Fund’s shareholders indirectly will bear each Fund’s proportionate share of the fees and expenses paid by shareholders of the other investment company, in addition to the fees and expenses each Fund’s shareholders directly bear in connection with each Fund’s own operations.

 

Except as described below, the 1940 Act currently requires that, as determined immediately after a purchase is made, (i) not more than 5% of the value of a fund’s total assets will be invested in the securities of any one investment company, (ii) not more than 10% of the value of its total assets will be invested in the aggregate in securities of investment companies as a group and (iii) not more than 3% of the outstanding voting stock of any one investment company will be owned by a fund.

 

Under Rule 12d1-1 under the 1940 Act, however, a Fund may invest in affiliated and unaffiliated money market funds without limit subject to the acquiring Fund’s investment policies and restrictions and the conditions of the rule. Pursuant to Rule 12d1-2 under the 1940 Act, funds of funds that previously were permitted only to invest in affiliated funds, government securities and short-term paper are now permitted under certain circumstances to invest in: (1) unaffiliated investment companies (subject to certain limits), (2) other types of securities (such as stocks, bonds and other securities) not issued by an investment company that are consistent with the fund’s investment policies and (3) affiliated or unaffiliated money market funds as part of “cash sweep” arrangements. One consequence of these new rules is that any fund, whether or not previously designated as a fund of funds, may invest without limit in affiliated funds if the acquisition is consistent with the investment policies of the fund and the restrictions of the rules. A Fund investing in affiliated funds under these new rules could not invest in a Fund that did not have a policy prohibiting it from investing in shares of other funds in reliance on Section 12(d)(1)(F) and (G) of the 1940 Act.

 

PREFERRED STOCK. Preferred stocks are securities that have characteristics of both common stocks and corporate bonds. Preferred stocks may receive dividends but payment is not guaranteed as with a bond. These securities may be undervalued because of a lack of analyst coverage resulting in a high dividend yield or yield to maturity. The risks of preferred stocks are a lack of voting rights and the Adviser may incorrectly analyze the security, resulting in a loss to

 

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each Fund. Furthermore, preferred stock dividends are not guaranteed and management can elect to forego the preferred dividend, resulting in a loss to each Fund.

 

RIGHTS. Rights are usually granted to existing shareholders of a corporation to subscribe to shares of a new issue of common stock before it is issued to the public. The right entitles its holder to buy common stock at a specified price. Rights have similar features to warrants, except that the life of a right is typically much shorter, usually a few weeks. The Adviser believes rights may become underpriced if they are sold without regard to value and if analysts do not include them in their research. The risk in investing in rights is that the Adviser might miscalculate their value resulting in a loss to each Fund. Another risk is the underlying common stock may not reach the Adviser’s anticipated price within the life of the right.

 

WARRANTS. Warrants are securities that are usually issued with a bond or preferred stock but may trade separately in the market. A warrant allows its holder to purchase a specified amount of common stock at a specified price for a specified time. The risk in investing in warrants is the Adviser might miscalculate their value, resulting in a loss to each Fund. Another risk is the warrants will not realize their value because the underlying common stock does reach the Adviser’s anticipated price within the life of the warrant.

 

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INVESTMENT RESTRICTIONS

 

The following policies and investment restrictions have been adopted by each Fund and (unless otherwise noted) are fundamental and cannot be changed without the affirmative vote of a majority of the Funds’ outstanding voting securities as defined in the 1940 Act. The Funds may not:

 

1.                                      Make loans to others, except (a) through the purchase of debt securities, (b) by investing in repurchase agreements and (c) by loaning portfolio securities.

 

2.                                      Borrow money, except (a) from a bank, provided that immediately after such borrowing there is an asset coverage of 300% for all borrowings of the Fund; or (b) from a bank or other persons for temporary purposes only, provided that such temporary borrowings are in an amount not exceeding 5% of a Fund’s total assets at the time the borrowing is made. This limitation does not preclude a Fund from entering into reverse repurchase agreements.

 

3.                                      Underwrite securities of other issuers, except to the extent that a Fund may be deemed an underwriter under the Securities Act of 1933 by virtue of disposing of portfolio securities or when selling its own shares.

 

4.                                      Purchase or sell real estate unless acquired as a result of ownership of securities or other instruments. This limitation is not applicable to investments in marketable securities that are secured by or represent interests in real estate. This limitation also does not preclude a Fund from investing in mortgage-related securities or investing in companies engaged in the real estate business or that have a significant portion of their assets in real estate, including real estate investment trusts.

 

5.                                      Purchase or sell commodities or commodity contracts except as may be permitted by the Investment Company Act of 1940, as amended, or unless acquired as a result of ownership of securities or other investments.  This limitation does not preclude a Fund from purchasing, selling and entering into financial futures contracts (including futures contracts on indices of securities, interest rates and currencies), options on financial futures contracts (including futures contracts on indices of securities, interest rates and currencies), warrants, swaps, forward contracts, foreign currency spot and forward contracts or other derivative instruments, including derivatives related to physical commodities; or purchasing or selling securities or other instruments backed by commodities; or purchasing or selling securities of companies that are engaged in a commodities business or have a significant portion of their assets in commodities.

 

6.                                      Invest more than 25% of the value of its net assets in the securities of companies engaged in any particular industry or group of industries, except as permitted by the SEC. This restriction does not apply to investments in securities issued or guaranteed by the U.S. government or any of its agencies or instrumentalities or repurchase agreements secured thereby.

 

7.                                      Will not issue senior securities. This limitation is not applicable to activities that may be deemed to involve the issuance or sale of a senior security by a Fund, provided that the Fund’s engagement in such activities is consistent with or permitted by the 1940 Act, as amended, the rules and regulations promulgated thereunder or interpretations of the SEC or its staff.

 

8.                                      Purchase the securities of any issuer, if as a result more than 5% of the total assets of the Funds would be invested in the securities of that issuer, other than obligations of the U.S. Government, its agencies or instrumentalities, provided that up to 25% of the value of the Funds’ assets may be invested without regard to this limitation.

 

The Funds observe the following policies, which are not deemed fundamental and which may be changed without shareholder vote. The Funds may not:

 

1.                                      Purchase any security if as a result the Funds would then hold more than 10% of any class of securities of an issuer (taking all common stock issues of an issuer as a single class, all preferred stock issues as a single class, and all debt issues as a single class) or more than 10% of the outstanding voting securities of

 

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a single issuer.

 

2.                                      Invest in any issuer for purposes of exercising control or management.

 

3.                                      Invest in securities of other investment companies which would result in the Funds owning more than 3% of the outstanding voting securities of any one such investment company, Funds owning securities of another investment company having an aggregate value in excess of 5% of the value of the Fund’s total assets, or Funds owning securities of investment companies in the aggregate which would exceed 10% of the value of the Funds’ total assets, except as permitted by the Investment Company Act of 1940 and the rules thereunder.

 

4.                                      Invest, in the aggregate, more than 5% of its net assets in securities with legal or contractual restrictions on resale, securities which are not readily marketable and repurchase agreements with more than seven days to maturity.

 

5.                                      Invest more than 15% of its assets in securities of foreign issuers (including American Depositary Receipts with respect to foreign issuers, but excluding securities of foreign issuers listed and traded on a domestic national securities exchange); provided, however, that the Boston Trust Asset Management Fund and the Walden Asset Management Fund each may invest up to 25% of their assets in foreign securities and the Walden International Equity Fund may invest in foreign securities without limitation.

 

6.                                      Invest in securities issued by any affiliate of the Adviser. If a percentage restriction described in the Prospectus or this Statement of Additional Information is adhered to at the time of investment, a subsequent increase or decrease in a percentage resulting from a change in the values of assets will not constitute a violation of that restriction, except for the policies regarding borrowing and illiquid securities or as otherwise specifically noted.

 

7.                                      The Funds may not sell securities short or purchase securities on margin, This limitation does not preclude a Fund from obtaining such short-term credit as may be necessary for the clearance of purchases and sales of its portfolio securities or depositing or paying initial or variation margin in connection with financial futures contracts, related options transactions or other permissible investments.

 

Portfolio Turnover

 

The portfolio turnover rate for the Funds is calculated by dividing the lesser of the Funds’ purchases or sales of portfolio securities for the year by the monthly average value of the portfolio securities. The calculation excludes all securities whose remaining maturities at the time of acquisition were one year or less.

 

The portfolio turnover rate may vary greatly from year to year, as well as within a particular year, and may also be affected by cash requirements for redemptions of Shares. High portfolio turnover rates generally will result in higher transaction costs, including brokerage commissions, to the Funds and may result in additional tax consequences to the Funds’ Shareholders. Portfolio turnover will not be a limiting factor in making investment decisions.

 

NET ASSET VALUE

 

As indicated in the Prospectus, the net asset value of the Funds is determined once daily as of the close of public trading on the New York Stock Exchange (normally 4:00 p.m. Eastern time) on each day that the Exchange is open for trading. The New York Stock Exchange will not open inobservance of the following holidays: New Year’s Day, Martin Luther King, Jr.’s Day, Presidents’ Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving, and Christmas. The Funds do not expect to determine the net asset value of their shares on any day when the Exchange is not open for trading, even if there is sufficient trading in portfolio securities on such days to materially affect the net asset value per share.

 

Investments in securities for which market quotations are readily available are valued based upon their current available prices in the principal market in which such securities are normally traded. Unlisted securities for which market quotations are readily available are valued at such market value. Securities and other assets for which quotations (i) are not readily available, or (ii) in the opinion of the Adviser, do not reflect fair value, or if an event occurs after the close of trading on the exchange or market on which they security is principally traded (but prior to the time the net asset value is

 

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calculated) that materially affects fair value, are valued at their fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Trustees of the Trust. Short-term securities (i.e., with maturities of 60 days or less) are valued at either amortized cost or original cost plus accrued interest, which approximates current value.

 

Among the factors that will be considered, if they apply, in valuing portfolio securities held by a Fund are the existence of restrictions upon the sale of the security by the Fund, the absence of a market for the security, the extent of any discount in acquiring the security, the estimated time during which the security will not be freely marketable, the expenses of registering or otherwise qualifying the security for public sale, underwriting commissions if underwriting would be required to effect a sale, the current yields on comparable securities for debt obligations traded independently of any equity equivalent, changes in the financial condition and prospects of the issuer, and any other factors affecting fair value. In making valuations, opinions of counsel may be relied upon as to whether or not securities are restricted securities and as to the legal requirements for public sale.

 

The Trust may use a pricing service to value certain portfolio securities where the prices provided are believed to reflect the fair market value of such securities. A pricing service would normally consider such factors as yield, risk, quality, maturity, type of issue, trading characteristics, special circumstances and other factors it deems relevant in determining valuations of normal institutional trading units of debt securities and would not rely exclusively on quoted prices. Certain instruments, for which pricing services used for the Funds do not provide prices, may be valued by the Trust using methodologies similar to those used by pricing services, where such methodologies are believed to reflect fair value of the subject security. The methods used by the pricing service and the Funds and the valuations so established will be reviewed by the Trust under the general supervision of the Trust’s Board of Trustees. Several pricing services are available, one or more of which may be used by the Adviser from time to time.

 

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION

 

Shares of each of the Funds are sold on a continuous basis by BHIL Distributors, Inc.  (“BHIL”), and BHIL has agreed to use appropriate efforts to solicit all purchase orders. In addition to purchasing Shares directly from the Fund, Shares may be purchased through procedures established by BHIL in connection with the requirements of accounts at the Adviser or the Adviser’s affiliated entities (collectively, “Entities”). Customers purchasing Shares of the Funds may include officers, directors, or employees of the Adviser or the Entities.

 

The Trust may suspend the right of redemption or postpone the date of payment for Shares during any period when (a) trading on the NYSE is restricted by applicable rules and regulations of the Commission, (b) the NYSE is closed for other than customary weekend and holiday closings, (c) the Commission has by order permitted such suspension, or (d) an emergency exists as a result of which (i) disposal by the Trust of securities owned by it is not reasonably practical, or (ii) it is not reasonably practical for the Trust to determine the fair value of its net assets.

 

MANAGEMENT OF THE TRUST

 

THE BOARD OF TRUSTEES

 

The Board of Trustees has general oversight responsibility with respect to the business and affairs of the Trust and the Funds. The Board has engaged service providers to manage and/or administer the day-to-day operations of the Funds and is responsible for overseeing such service providers. The Trustees also have engaged legal counsel (who is also legal counsel to the Trust) that is independent of the Adviser or its affiliates to advise them on matters relating to their responsibilities in connection with the Trust.  In addition to four regularly scheduled meetings per year, the Board holds special meetings or informal conference calls to discuss specific matters that may require action prior to the next regular meeting.  The Board is currently composed of five Trustees, three of whom are not an “interested persons” of the Fund, as that term is defined in the 1940 Act (each an “Independent Trustee”). In addition to four regularly scheduled meetings per year, the Board holds special meetings or informal conference calls to discuss specific matters that may require action prior to the next regular meeting. The Chairman of the Board is an Independent Trustee.  The Chairman’s responsibilities include, among other things, scheduling Board meetings, setting and prioritizing Board meeting agendas, serving as a point person for the exchange of information between management and the Board of Trustees, coordinating communications among the Trustees, and ensuring that the Board receives reports from management on essential matters.  The Trustees meet

 

12



 

separately in an executive session on a quarterly basis and meet separately in executive session with the Funds’ Chief Compliance Officer at least annually. On an annual basis, the Board conducts a self-assessment and evaluates its structure.

 

INTERESTED TRUSTEES

 

NAME, ADDRESS AND
AGE

 

POSITION(S)
HELD WITH
THE FUNDS

 

TERM OF
OFFICE* AND
LENGTH OF
TIME SERVED

 

PRINCIPAL
OCCUPATION(S)
DURING PAST
FIVE YEARS

 

NUMBER OF
FUNDS IN
FUND
COMPLEX**
OVERSEEN
BY TRUSTEE

 

OTHER
DIRECTORSHIPS
HELD BY
TRUSTEE
DURING THE
PAST FIVE
YEARS

 

 

 

 

 

 

 

 

 

 

 

Lucia B. Santini

One Beacon Street, 33rd Floor

Boston, MA 02108

Date of Birth: 10/2/1958

 

Trustee and President

 

Indefinite;

Since May 2011

 

Managing Director, Boston Trust Investment Management, Inc., February, 2001 to present; Senior Vice President and Senior Portfolio Manager, Boston Trust & Investment Management Company (bank trust company), November 1993 to present.

 

11

 

None

 

 

 

 

 

 

 

 

 

 

 

Heidi Soumerai

One Beacon Street, 33rd Floor

Boston, MA 02108

Date of Birth:  9/14/57

 

Trustee

 

Indefinite, Since May 2013

 

Senior Vice President and Director of ESG Research, Boston Trust & Investment Management Company, August 2004 - present; Research Analyst, Boston Trust & Investment Management, January 1985 to present

 

11

 

None

 


*                                         Trustees and officers hold their positions until resignation or removal.

**                                  The “Fund Complex” consists of The Boston Trust and Walden Funds.

 

Ms. Santini and Ms. Soumerai are considered “interested persons” of the Trust as defined in the 1940 Act due to their employment with Boston Trust Investment Management, Inc., the Funds’ investment adviser.

 

13



 

INDEPENDENT TRUSTEES

 

NAME, ADDRESS AND AGE

 

POSITION(S)
HELD WITH
THE FUNDS

 

TERM OF OFFICE*
AND LENGTH OF
TIME SERVED

 

PRINCIPAL OCCUPATION(S)
DURING PAST FIVE YEARS

 

NUMBER OF
FUNDS IN
FUND
COMPLEX**
OVERSEEN
BY TRUSTEE

 

OTHER
DIRECTORSHIPS
HELD BY TRUSTEE
DURING THE PAST
FIVE YEARS

 

 

 

 

 

 

 

 

 

 

 

Diane E. Armstrong

3435 Stelzer Road

Columbus, Ohio 43219

Date of Birth: 7/2/1964

 

Trustee

 

 

Indefinite; Since November 2004

 

President, Armstrong Financial Services (financial planning firm), November, 2012 to present; Managing Director of Financial Planning Services, WealthStone (financial planning firm), July, 2008 to November, 2012; Principal of King, Dodson Armstrong Financial Advisors, Inc. August, 2003 to July, 2008.

 

11

 

The Coventry Funds Trust

 

 

 

 

 

 

 

 

 

 

 

Michael M. Van Buskirk

3435 Stelzer Road

Columbus, Ohio 43219

Date of Birth: 2/22/1947

 

Trustee and Chairman of the Board

 

 

Indefinite; Trustee since January, 1992. Chairman since January, 2006.

 

President and Chief Executive Officer, Ohio Bankers League. May, 1991 to present.

 

11

 

The Coventry Funds Trust Advisers Investment Trust

 

 

 

 

 

 

 

 

 

 

 

James H. Woodward

3435 Stelzer Road Columbus, Ohio 43219

Date of Birth: 11/24/1939

 

Trustee

 

 

Indefinite; Since February, 2006

 

 

Chancellor Emeritus, University of North Carolina at Charlotte, August, 2005 to present. Chancellor, North Carolina State University, June, 2009 to April, 2010; Chancellor, University of North Carolina at Charlotte. July, 1989 to July, 2005.

 

11

 

The Coventry Funds Trust

 


*                                           Trustees hold their position until their resignation or removal.

**                                      The “Fund Complex” consists of The Boston Trust and Walden Funds.

 

OFFICERS WHO ARE NOT TRUSTEES

 

NAME, ADDRESS AND AGE

 

POSITION(S)
HELD WITH
THE FUNDS

 

TERM OF OFFICE* AND
LENGTH OF TIME SERVED

 

PRINCIPAL OCCUPATION(S) DURING PAST FIVE
YEARS

 

 

 

 

 

 

 

Jennifer Ellis

One Beacon Street, 33rd Floor

Boston, MA 02108

Date of Birth: 7/29/1972

 

Treasurer

 

 

Indefinite;

Since May, 2011

 

Chief Financial Officer/Treasurer, Boston Trust & Investment Management Company, May 2011 to present; Finance Director, Bain Capital, June 2008 to May 2010; Vice-President of Finance, Vesbridge Partners, June 2004 to June 2008

 

 

 

 

 

 

 

Curtis Barnes

100 Summer Street

Boston, MA 02110

Date of Birth: 9/24/1953

 

Secretary

 

Indefinite;

Since May, 2007

 

 

Senior Vice President, Citi Fund Services Ohio, Inc. (formerly BISYS Fund Services Ohio, Inc.), August, 2007 to present; Vice President, BISYS Fund Services Ohio, Inc., July, 2004 to July, 2007.

 

 

 

 

 

 

 

Eric B. Phipps

3435 Stelzer Road Columbus, Ohio 43219

Date of Birth: 6/20/1971

 

Chief Compliance Officer

 

Indefinite;

Since February, 2006

 

 

Vice President, Citi Fund Services Ohio, Inc. (formerly, BISYS Fund Services Ohio, Inc.) June, 2006 to present. Staff Accountant, United States Securities and Exchange Commission October, 2004 to May, 2006. Director of Compliance, BISYS Fund Services Ohio, Inc., December, 1995 to October, 2004.

 


*                 Officers hold their positions until a successor has been duly elected and qualified.

 

Each Trustee is nominated to serve on the Board of Trustees based on their particular experiences, qualifications, attributes and skills.  The characteristics that led the Board to conclude that each of the Trustees should continue to serve as a Trustee of the Trust are discussed below.

 

14



 

Michael M.  Van Buskirk.  Mr. Van Buskirk has been a Trustee since the 1992 and has served as Chairman of the Board of Trustees since 2006.  Mr. Van Buskirk is the Chairman and Chief Executive Officer of the Ohio Bankers League, a financial trade association.  Mr. Van Buskirk formerly was a senior executive of a major financial services company.  Mr. Van Buskirk’s has deep knowledge of the Trust and its service providers, the creation and distribution of financial products and the regulatory framework under with the Trust operates.

 

Diane E. Armstrong.  Ms. Armstrong is the Chairwomen of the Trust’s Audit Committee and is the Director of Financial Planning for WealthStone, a wealth management and financial planning firm.  Ms. Armstrong has served on the Board of Trustees since 2004 and is Chairwomen of the Trust’s Audit Committee.  Ms. Armstrong brings investment, auditing, budgeting and financial reporting skills to the Board of Trustees and her investment management background provides important insights into the needs of Fund shareholders.

 

Lucia B. Santini.  Ms. Santini was appointed to the Board of Trustees in 2011 and elected by shareholders on May 24, 2013.  She also serves as President of the Trust.  Ms. Santini has been a Managing Director of Boston Trust Investment Management, Inc., the Funds’ Adviser, since 2001 and Senior Vice President and Senior Portfolio Manager of Boston Trust & Investment Management Company, the parent of the Adviser, since 1993.  Ms. Santini brings operational, investment management and marketing knowledge to the Board of Trustees.

 

James H. Woodward.  Mr. Woodward has served on the Board of Trustees since 2006 and is Chairman of the Trust’s Nominating Committee. Mr. Woodward is the Chancellor Emeritus of both North Carolina State University and the University of North Carolina at Charlotte.  His strategic planning, organizational and leadership skills help the Board set long-term goals for the Funds and establish processes for overseeing Trust policies and procedures.

 

Heidi Soumerai.  Ms. Soumerai was elected to the Board of Trustees on May 24, 2013.   Ms. Soumerai is a Senior Vice President and Director of ESG Research for Boston Trust & Investment Management Company, the parent company of the Adviser, and a member of the Board of Directors of Boston Trust.  As the firm’s director of ESG research, she oversees the evaluation of existing and potential securities relative to environmental, social and governance (ESG) factors. Ms. Soumerai has extensive portfolio t management experience, including extensive social investing knowledge.

 

BOARD COMMITTEES

 

The Board has established an Audit Committee, Nominating Committee and Valuation Committee to assist it in performing its oversight function. The Audit Committee, composed entirely of Independent Trustees, oversees the Trust’s accounting and financial reporting policies and practices and the quality and objectivity of the Trust’s financial statements and the independent audit thereof. The Audit Committee generally is responsible for (i) overseeing and monitoring the Trust’s internal accounting and control structure, its auditing function and its financial reporting process, (ii) selecting and recommending to the full Board of Trustees the appointment of auditors for the Trust, (iii) reviewing audit plans, fees, and other material arrangements with respect to the engagement of auditors, including the performance of permissible non-audit services; (iv) reviewing the qualifications of the auditor’s key personnel involved in the foregoing activities and (v) monitoring the auditor’s independence.  The Audit Committee met two times during the last fiscal year. The Nominating Committee, also comprised of all of the Independent Trustees, evaluates the qualifications of candidates and makes nominations for independent trustee membership on the Board. The Nominating Committee does not consider nominees recommended by shareholders. During the last fiscal year, the Nominating Committee held one meeting. The purpose of the Valuation Committee, which is comprised of at least two Trustees at all times, one of whom must be an Independent Trustee, is to oversee the implementation of the Trust’s valuation procedures and to make fair value determinations on behalf of the Board as specified in the valuation procedures. The Valuation Committee meets as necessary. The Board has determined that leadership by an Independent Trustee and a committee structure that is led by Independent Trustees is appropriate for the Trust and allows the Board to effectively and efficiently evaluate issues that impact the Trust as a whole as well as issues that are unique to each Fund.

 

RISK OVERSIGHT

 

Mutual funds face a number of risks, including investment risk, compliance risk and valuation risk.  The Board oversees management of the Funds’ risks directly and through its committees.  While day-to-day risk management responsibilities rest with the Trust’s Chief Compliance Officer, investment adviser and other service providers, the Board monitors and tracks risk by:

 

15



 

1.                                      Receiving and reviewing quarterly and ad hoc reports related to the performance and operations of the Funds;

 

2.                                      Reviewing and approving, as applicable, the compliance policies and procedures of the Trust, including the Trust’s valuation policies and transaction procedures;

 

3.                                      Periodically meeting with portfolio management to review investment strategies, techniques and the processes used to manage related risks;

 

4.                                      Meeting with representatives of key service providers, including the Fund’s investment adviser, administrator, transfer agent and independent registered public accounting firm to discuss the activities of the Funds;

 

5.                                      Engaging the services of the Chief Compliance Officer of the Trust to test the compliance procedures of the Trust and its service providers;

 

6.                                      Receiving and reviewing reports from the Trust’s independent registered public accounting firm regarding the Fund’s financial condition and the Trust’s internal controls

 

7.                                      Receiving reports from the investment adviser’s Chief Compliance Officer and the Trust’s Anti-Money Laundering Compliance Officer; and

 

8.                                      Receiving and reviewing an annual written report prepared by the Trust’s Chief Compliance Officer reviewing the adequacy of the Trust’s compliance policies and procedures and the effectiveness of their implementation.

 

The Board has concluded that its general oversight of the investment adviser and other service providers as implemented through the reporting and monitoring process outlined above allows the Board to effectively administer its risk oversight function.

 

OWNERSHIP OF SECURITIES

 

As of June 30, 2013, the Trust’s Trustees and officers, as a group, owned less than 1% of each Fund’s outstanding Shares.

 

For the year ended December 31, 2012, the dollar range of equity securities owned beneficially by each Trustee in the Funds and in any registered investment companies overseen by the Trustee within the same family of investment companies as the Funds is as follows:

 

16



 

INTERESTED TRUSTEES

 

NAME OF TRUSTEE

 

DOLLAR RANGE OF EQUITY SECURITIES
IN THE FUNDS

 

AGGREGATE DOLLAR RANGE OF EQUITY
SECURITIES IN ALL
REGISTERED INVESTMENT COMPANIES
OVERSEEN BY TRUSTEE IN FAMILY OF
INVESTMENT COMPANIES*

 

Lucia B. Santini

 

Over $100,000

 

Over $100,000

 

 

 

 

 

 

 

Heidi Soumerai

 

Over $100,000

 

Over $100,000

 

 

INDEPENDENT TRUSTEES

 

NAME OF TRUSTEE

 

DOLLAR RANGE OF EQUITY SECURITIES
IN THE FUNDS

 

AGGREGATE DOLLAR RANGE OF EQUITY
SECURITIES IN ALL
REGISTERED INVESTMENT COMPANIES
OVERSEEN BY TRUSTEE IN FAMILY OF
INVESTMENT COMPANIES*

 

Diane E. Armstrong

 

None

 

None

 

 

 

 

 

 

 

Michael M. Van Buskirk

 

Over $100,000

 

Over $100,000

 

 

 

 

 

 

 

James H. Woodward

 

$0 - $10,000

 

$0 - $10,000

 

 


* “Family of Investment Companies” means The Boston Trust and Walden Funds.

 

The Officers of the Trust (other than the Chief Compliance Officer) receive no compensation directly from the Trust for performing the duties of their offices. Citi Fund Services Ohio, Inc. (“Citi”) receives fees from the Funds for acting as administrator and sub-transfer agent and for providing certain fund accounting services. Messrs. Barnes and Phipps are employees of Citi.

 

Trustees of the Trust not affiliated with Citi or the Adviser receive from the Trust, effective as of December 5, 2008, the following fees: a quarterly retainer fee of $2,000 per quarter; a regular meeting fee of $1,000 per meeting; a special in-person meeting fee of $1,000; a telephonic meeting fee of $500; and a $500 per meeting fee for all other committee meetings. Trustees are also reimbursed for all out-of-pocket expenses relating to attendance at such meetings. Trustees who are affiliated with Citi do not receive compensation from the Trust.

 

For the fiscal year ended March 31, 2013 the Trustees received the following compensation from the Trust and from certain other investment companies (if applicable) that have the same investment adviser as the Funds or an investment adviser that is an affiliated person of the Trust’s investment adviser:

 

NAME OF TRUSTEE

 

AGGREGATE
COMPENSATION
FROM THE
FUNDS

 

PENSION OR
RETIREMENT BENEFITS
ACCRUED AS PART OF
FUNDS EXPENSES

 

ESTIMATED ANNUAL
BENEFITS UPON
RETIREMENT

 

TOTAL COMPENSATION
FROM THE FUND AND
FUND COMPLEX PAID
TO THE TRESTEES*

 

Diane E. Armstrong

 

$

12,000

 

$

0

 

$

0

 

$

12,000

 

 

 

 

 

 

 

 

 

 

 

Lucia B. Santini**

 

$

0

 

$

0

 

$

0

 

$

0

 

 

 

 

 

 

 

 

 

 

 

Michael M. Van Buskirk

 

$

16,000

 

$

0

 

$

0

 

$

16,000

 

 

 

 

 

 

 

 

 

 

 

James H. Woodward

 

$

12,000

 

$

0

 

$

0

 

$

12,000

 

 

 

 

 

 

 

 

 

 

 

Heidi Soumerai i**

 

$

0

 

$

0

 

$

0

 

$

0

 

 


*                                         The “Fund Complex” consists of The Boston Trust and Walden Funds.

**                                  Ms. Santini appointed to the Board on May 19, 2011 and elected by shareholders on May 24, 2013.  Ms. Soumerai was elected to the Board by shareholders on May 24, 2013.  As interested Trustees, Ms. Santini and Ms. Soumerai receive no compensation.

 

17



 

INVESTMENT ADVISER

 

Investment advisory and management services are provided to the Funds by Boston Trust Investment Management, Inc. (the “Adviser”), pursuant to an Investment Advisory Agreement dated as of September 30, 2004, as amended. The Adviser is a wholly-owned subsidiary of Boston Trust & Investment Management Company, a Massachusetts chartered banking and trust company (“Boston Trust”), which in turn is a wholly-owned subsidiary of BTIM Corporation, a bank holding company organized as a Delaware corporation. Under the terms of the Investment Advisory Agreement, the Adviser has agreed to provide investment advisory services as described in the Prospectus of the Funds. For the services provided and expenses assumed pursuant to the Investment Advisory Agreement, each Fund pays the Adviser a fee, computed daily and paid monthly, at the following annual rates: Investment 0.75% of average daily net assets; Boston Trust Equity Fund 0.75% of average daily net assets; Boston Trust Small Cap Fund 0.75% of average daily net assets; Boston Trust Midcap Fund 0.75% of average daily net assets; Boston Trust SMID Cap Fund 0.75% of average daily net assets; Walden Asset Management Fund 0.75% of average daily net assets; Walden Equity Fund 0.75% of average daily net assets; Walden Midcap Fund 0.75% of average daily net assets; Walden SMID Cap Innovations Fund 0.75% of average daily net assets, Walden Small Cap Fund 0.75% and Walden International Equity Fund [    %] of average daily net assets.

 

The Investment Advisory Agreement for each Fund continues year to year for successive annual periods if, as to each Fund, such continuance is approved at least annually by the Trust’s Board of Trustees or by vote of a majority of the outstanding Shares of the relevant Fund (as defined in the Funds’ Prospectus), and a majority of the Trustees who are not parties to the Investment Advisory Agreement or interested persons (as defined in the 1940 Act) of any party to the Investment Advisory Agreement by votes cast in person at a meeting called for such purpose. The Investment Advisory Agreement is terminable as to the Funds at any time on 60 days’ written notice without penalty by the Trustees, by vote of a majority of the outstanding Shares of that Fund, or by the Adviser. The Investment Advisory Agreement also terminates automatically in the event of any assignment, as defined in the 1940 Act, or for reasons as set forth in the Agreement.

 

The Investment Advisory Agreement provides that the Adviser shall not be liable for any error of judgment or mistake of law or for any loss suffered by the Funds in connection with the performance of the Investment Advisory Agreement, except a loss resulting from a breach of fiduciary duty with respect to the receipt of compensation for services or a loss resulting from willful misfeasance, bad faith, or gross negligence on the part of the Adviser in the performance of its duties, or from reckless disregard by the Adviser of its duties and obligations thereunder.

 

For each of the past three fiscal years ending March 31, the Funds paid the Adviser investment advisory fees pursuant to the terms of the Investment Advisory Agreement and the Adviser waived and/or reimbursed investment advisory fees pursuant to the terms of an expense limitation agreement in effect with respect to each of the Funds as follows:

 

FUND

 

 

 

2011

 

2012

 

2013

 

Boston Trust Asset Management Fund

 

Advisory Fees Paid

 

$

1,558,874

**

$

1,847,873

***

 

 

 

 

Waived and/Reimbursed

 

$

0

 

$

0

 

 

 

Boston Trust Equity Fund

 

Advisory Fees Paid

 

$

415,918

 

$

479,132

****

 

 

 

 

Waived and/Reimbursed

 

$

13,866

 

$

0

 

 

 

Boston Trust Midcap Fund

 

Advisory Fees Paid

 

$

151,132

 

$

199,657

 

 

 

 

 

Waived and/Reimbursed

 

$

27,687

 

$

33,899

 

 

 

Boston Trust Small Cap Fund

 

Advisory Fees Paid

 

$

1,381,352

 

$

2,096,847

 

 

 

 

 

Waived and/Reimbursed

 

$

105,195

 

$

60,584

 

 

 

 

18



 

Boston Trust SMID Cap Fund

 

Advisory Fees Paid

 

$

0

*

$

7,496

 

 

 

 

 

Waived and/Reimbursed

 

$

0

*

$

11,533

 

 

 

Walden Asset Management Fund

 

Advisory Fees Paid

 

$

326,088

 

$

379,758

 

 

 

 

 

Waived and/Reimbursed

 

$

32,028

 

$

33,900

 

 

 

Walden Equity Fund

 

Advisory Fees Paid

 

$

584,290

 

$

702,014

 

 

 

 

 

Waived and/Reimbursed

 

$

51,177

 

$

26,043

 

 

 

Walden Midcap Fund

 

Advisory Fees Paid

 

$

0

*

$

48,078

 

 

 

 

 

Waived and/Reimbursed

 

$

0

*

$

18,288

 

 

 

Walden Small Cap Innovations Fund

 

Advisory Fees Paid

 

$

228,601

 

$

406,952

 

 

 

 

 

Waived and/Reimbursed

 

$

61,924

 

$

45,712

 

 

 

Walden SMID Cap Innovations Fund

 

Advisory Fees Paid

 

$

0

*

$

0

*

 

 

 

 

Waived and/Reimbursed

 

$

0

*

$

0

*

 

 

Walden International Equity Fund

 

Advisory Fees Paid

 

$

0

*

$

0

*

$

0

*

 

 

Waived and/Reimbursed

 

$

0

*

$

0

*

$

0

*

 


*

The Fund had not commenced operations as of this period.

**

Includes $17,016 recoupment of amounts previously waived and/or reimbursed

***

Includes $80,412 recoupment of amounts previously waived and/or reimbursed

****

Includes $6,335 recoupment of amounts previously waived and/or reimbursed

 

As of March 31, 2013, the Adviser may recoup $          $          $          $          $          $           and $           from the Funds as follows:

 

Funds

 

Amount

 

Expires

 

Boston Trust Fund

 

 

 

 

 

 

Boston Trust Equity Fund

 

 

 

 

 

 

 

 

 

 

 

Boston Trust Midcap Fund

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Boston Trust SMID Cap Fund

 

 

 

 

 

Boston Trust Small Cap Fund

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Walden Asset Management Fund

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Walden Equity Fund

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Walden Mid Cap Fund

 

 

 

 

 

Walden Small Cap Innovations Fund

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PORTFOLIO MANAGER INFORMATION

 

Domenic Colasacco serves as Portfolio Manager for both the Boston Trust Asset Management Fund and the Boston Trust Equity Fund. Kenneth Scott serves as Portfolio Manager for the Boston Trust Small Cap Fund, the Boston Trust SMID Cap Fund, the Walden Small Cap Innovations Fund and the Walden SMID Cap Innovations Fund. William H. Apfel serves as Portfolio Manager for the Walden Asset Management Fund, the Walden Equity Fund and the Walden International Equity Fund and Stephen Amyouny serves as Portfolio Manager for the Boston Trust Midcap Fund. Stephen Franco serves as Portfolio Manager for both the Boston Trust SMID Cap Fund and the Walden SMID Cap Innovations Fund. Heidi Vanni serves as Portfolio Manager for both the Boston Trust SMID Cap Fund and the Walden SMID Cap

 

19



 

Innovations Fund. The following table lists the number and types of other accounts managed by each individual and assets under management in those accounts as of March 31, 2013:

 

PORTFOLIO MANAGER

 

OTHER
REGISTERED
INVESTMENT
COMPANY
ACCOUNTS

 

ASSETS
MANAGED
($ MILLIONS)

 

OTHER
POOLED
INVESTMENT
VEHICLE
ACCOUNTS

 

ASSETS
MANAGED
($ MILLIONS)

 

OTHER
ACCOUNTS
*

 

ASSETS MANAGED
($ MILLIONS)

DOMENIC COLASACCO

 

 

 

 

 

 

 

 

 

 

 

 

KENNETH SCOTT

 

 

 

 

 

 

 

 

 

 

 

 

STEPHEN AMYOUNY

 

 

 

 

 

 

 

 

 

 

 

 

WILLIAM H. APFEL

 

 

 

 

 

 

 

 

 

 

 

 

STEPHEN FRANCO

 

 

 

 

 

 

 

 

 

 

 

 

HEIDI VANNI

 

 

 

 

 

 

 

 

 

 

 

 

 


*                                         The majority of these other accounts are invested in one of the other pooled investment vehicles listed above.

 

The Adviser has no performance-based accounts.

 

Portfolio managers at the Adviser may manage accounts for multiple clients. Portfolio managers at the Adviser make investment decisions for each account based on the investment objectives and policies and other relevant investment considerations applicable to that portfolio. The management of multiple accounts may result in a portfolio manager devoting unequal time and attention to the management of each account. Even where multiple accounts are managed by the same portfolio manager within the same investment discipline, however, the Adviser may take action with respect to one account that may differ from the timing or nature of action taken, with respect to another account. Accordingly, the performance of each account managed by a portfolio manager will vary.

 

The compensation of the portfolio managers varies with the general success of the Adviser as a firm and its affiliates. Each portfolio manager’s compensation consists of a fixed annual salary, plus additional remuneration based on the overall performance of the Adviser and its affiliates for the given time period. The portfolio managers’ compensation is not linked to any specific factors, such as a Fund’s performance or asset level.

 

The Adviser’s compensation structure is designed to recognize cumulative contribution to its investment policies and process, and client service. Compensation incentives align portfolio manager interests with the long-term interest of clients. Short-term, return based incentives, which may encourage undesirable risk are not employed. Returns and portfolios are monitored for consistency with investment policy parameters.

 

The Adviser has adopted and implemented policies and procedures, including brokerage and trade allocation policies and procedures, which it believes address the potential conflicts associated with managing multiple accounts for multiple clients.

 

The dollar range of equity securities beneficially owned by the Funds’ portfolio managers in the Funds they manage as of March 31, 2013 is as follows:

 

PORTFOLIO MANAGER

 

 

 

DOLLAR RANGE OF EQUITY SECURITIES
BENEFICIALLY OWNED

DOMENIC COLASACCO

 

Boston Trust Asset Management Fund

 

Over $1,000,000

 

 

Boston Trust Equity Fund

 

$500,001 - $1,000,000

KENNETH SCOTT

 

Boston Trust Small Cap Fund

 

$10,001 - $50,000

 

 

Boston Trust SMID Cap Fund

 

$10,001 - $50,000

 

 

Walden Small Cap Innovations Fund

 

$10,001 - $50,000

STEPHEN AMYOUNY

 

Boston Trust Midcap Fund

 

$100,0001- $500,000

 

 

Walden Midcap Fund

 

$0

WILLIAM APFEL

 

Walden Equity Fund

 

Over $1,000,000

 

20



 

 

 

Walden Asset Management Fund

 

$0

STEPHEN FRANCO

 

Boston Trust SMID Cap Fund

 

$50,001 - $500,000

HEIDI VANNI

 

Boston Trust SMID Cap Fund

 

$0

 

Code of Ethics

 

The Boston Trust & Walden Funds and the Adviser have each adopted a Code of Ethics, pursuant to Rule 17j-1 under the Investment Company Act of 1940, applicable to securities trading practices of its personnel. Each Code permits covered personnel to trade in securities in which a Fund may invest, subject to certain restrictions and reporting requirements.

 

Portfolio Transactions

 

References to the Adviser with respect to portfolio transactions include its affiliate, Boston Trust & Investment Management Company. Pursuant to the Investment Advisory Agreement with respect to the Funds, the Adviser determines, subject to the general supervision of the Board of Trustees of the Trust and in accordance with the Funds’ investment objectives and restrictions, which securities are to be purchased and sold by the Funds, and which brokers are to be eligible to execute such Funds’ portfolio transactions.

 

Purchases from underwriters of portfolio securities generally include a commission or concession paid by the issuer to the underwriter, and purchases from dealers serving as market makers may include the spread between the bid and asked price.

 

Transactions on stock exchanges involve the payment of negotiated brokerage commissions. Transactions in the over-the-counter market are generally principal transactions with dealers. With respect to the over-the-counter market, the Trust, where possible, will deal directly with dealers who make a market in the securities involved except in those circumstances where better price and execution are available elsewhere.

 

Allocation of transactions, including their frequency, to various brokers and dealers is determined by the Adviser in its best judgment and in a manner deemed fair and reasonable to Shareholders. The primary consideration is prompt execution of orders in an effective manner at the most favorable price. Subject to this consideration, brokers and dealers who provide supplemental investment research to the Adviser may receive orders for transactions on behalf of the Funds. The Adviser is authorized to pay a broker-dealer who provides such brokerage and research services a commission for executing the Funds’ brokerage transactions which are in excess of the amount of commission another broker would have charged for effecting that transaction if, but only if, the Adviser determines in good faith that such commission was reasonable in relation to the value of the brokerage and research services provided by such broker viewed in terms of that particular transaction or in terms of all of the accounts over which it exercises investment discretion. Any such research and other statistical and factual information provided by brokers to the Funds or to the Adviser is considered to be in addition to and not in lieu of services required to be performed by the Adviser under its respective agreement regarding management of the Funds. The cost, value and specific application of such information are indeterminable and hence are not practicably allocable among the Funds and other clients of the Adviser who may indirectly benefit from the availability of such information. Similarly, the Funds may indirectly benefit from information made available as a result of transactions effected for such other clients. Under the Investment Advisory Agreement, the Adviser is permitted to pay higher brokerage commissions for brokerage and research services in accordance with Section 28(e) of the Securities Exchange Act of 1934. In the event the Adviser does follow such a practice, it will do so on a basis which is fair and equitable to the Trust and the Funds. For each of the past three fiscal years ending March 31, the Funds paid commissions to firms that provide brokerage and research services to the Funds as follows:

 

21



 

FUND

 

 

 

2011

 

2012

 

2013

 

Boston Trust Asset Management Fund

 

Commissions

 

$

35,102

 

$

24,096

 

 

 

 

 

Aggregate Portfolio Transactions

 

$

49,444,056

 

$

34,683,380

 

 

 

Boston Trust Equity Fund

 

Commissions

 

$

11,890

 

$

10,378

 

 

 

 

 

Aggregate Portfolio Transactions

 

$

17,647,735

 

$

15,091,981

 

 

 

Boston Trust Midcap Fund

 

Commissions

 

$

8,395

 

$

7,185

 

 

 

 

 

Aggregate Portfolio Transactions

 

$

12,741,803

 

$

10,618,861

 

 

 

Boston Trust Small Cap Fund

 

Commissions

 

$

65,663

 

$

176,214

 

 

 

 

 

Aggregate Portfolio Transactions

 

$

217,016,255

 

$

223,506,544

 

 

 

Boston Trust SMID Cap Fund

 

Commissions

 

$

0

*

$

1,195

 

 

 

 

 

Aggregate Portfolio Transactions

 

$

0

*

$

3,852,311

 

 

 

Walden Asset Management Fund

 

Commissions

 

$

10,997

 

$

10,032

 

 

 

 

 

Aggregate Portfolio Transactions

 

$

17,918,542

 

$

18,851,856

 

 

 

Walden Equity Fund

 

Commissions

 

$

22,781

 

$

17,048

 

 

 

 

 

Aggregate Portfolio Transactions

 

$

28,265,432

 

$

25,254,830

 

 

 

Walden Midcap Fund

 

Commissions

 

$

0

*

$

8,051

 

 

 

 

 

Aggregate Portfolio Transactions

 

$

0

*

$

13,471,774

 

 

 

Walden Small Cap Innovations Fund

 

Commissions

 

$

6,940

 

$

33,936

 

 

 

 

 

Aggregate Portfolio Transactions

 

$

38,816,000

 

$

36,206,119

 

 

 

Walden SMID Cap Innovations Fund

 

Commissions

 

$

0

*

$

0

*

 

 

 

 

Aggregate Portfolio Transactions

 

$

0

*

$

0

*

 

 

 

22



 

Walden International Equity Fund

 

Commissions

 

$

0

*

$

0

*

$

0

*

 

 

Aggregate Portfolio Transactions

 

$

0

*

$

0

*

$

0

*

 


*              The Fund had not commenced operations as of this period.

 

The Adviser may not give consideration to sales of shares of the Funds as a factor in the selection of brokers-dealers to execute portfolio transactions. However, the Adviser may place portfolio transactions with brokers or dealers that promote or sell the Funds’ shares so long as such selection is based on the quality of the broker’s execution and not on its sales efforts.

 

Except as otherwise disclosed to the shareholders of the Funds and, as permitted by applicable laws, rules and regulations, the Trust will not, on behalf of the Funds, execute portfolio transactions through, acquire portfolio securities issued by, make savings deposits in, or enter into repurchase or reverse repurchase agreements with the Adviser or its affiliates, and will not give preference to the Adviser’s correspondents with respect to such transactions, securities, savings deposits, repurchase agreements, and reverse repurchase agreements.

 

Investment decisions for each Fund are made independently from those for the other Funds, other funds of the Trust or any other investment company or account managed by the Adviser, but may be contemporaneous. Any such other fund, investment company or account may also invest in the same securities as the Trust on behalf of the Funds. When a purchase or sale of the same security is made at substantially the same time on behalf of a Fund and another fund of the Trust managed by the Adviser, investment company or account, the transaction will be averaged as to price and available investments will be allocated as to amount in a manner which the Adviser believes to be equitable to the Fund and such other fund, investment company or account. In some instances, this investment procedure may affect adversely the price paid or received by a Fund or the size of the position obtained by a Fund. To the extent permitted by law, the Adviser may aggregate the securities to be sold or purchased for a Fund with those to be sold or purchased for the other Funds or for other investment companies or accounts in order to obtain best execution. As provided by the Investment Advisory Agreement, in making investment recommendations for the Funds, the Adviser will not inquire nor take into consideration whether an issuer of securities proposed for purchase or sale by the Trust is a customer of the Adviser, any of its subsidiaries or affiliates and, in dealing with its customers, the Adviser, its subsidiaries and affiliates will not inquire or take into consideration whether securities of such customers are held by the Funds or any other fund of the Trust.

 

For each of the past three fiscal years ending March 31, the Funds paid brokerage commissions as follows:

 

FUND

 

2011

 

2012

 

2013

 

Boston Trust Asset Management Fund

 

$

40,619

 

$

24,098

 

 

 

Boston Trust Equity Fund

 

$

14,673

 

$

10,380

 

 

 

Boston Trust Midcap Fund

 

$

10,180

 

$

7,154

 

 

 

Boston Trust Small Cap Fund

 

$

208,538

 

$

176,442

 

 

 

Boston Trust SMID Cap Fund

 

$

0

*

$

1,916

 

 

 

Walden Asset Management Fund

 

$

14,714

 

$

10,033

 

 

 

Walden Equity Fund

 

$

25,338

 

$

17,050

 

 

 

Walden Midcap Fund

 

$

0

*

$

8,051

 

 

 

Walden Small Cap Innovations Fund

 

$

33,672

 

$

34,089

 

 

 

 

23



 

Walden SMID Cap Innovations Fund

 

$

0

*

$

0

*

 

 

Walden International Equity Fund

 

$

0

*

$

0

*

 

 

 


*                  The Fund had not commenced operations as of this period.

 

Administrator and Fund Accounting Services

 

Citi serves as administrator (the “Administrator”) to the Funds pursuant to a Management and Administration Agreement dated as of March 23, 1999 (the “Administration Agreement”). Prior to its acquisition by Citigroup on August 1, 2007, the Administrator was known as BISYS Fund Services Ohio, Inc. The Administrator assists in supervising all operations of the Funds.

 

Under the Administration Agreement, the Administrator has agreed to maintain office facilities; furnish statistical and research data, clerical, certain bookkeeping services and stationery and office supplies; prepare the periodic reports to the Commission on Form N-SAR or any replacement forms therefore; compile data for, assist the Trust or its designee in the preparation of, and file all of the Funds’ federal and state tax returns and required tax filings other than those required to be made by the Funds’ custodian and Transfer Agent; prepare compliance filings pursuant to state securities laws with the advice of the Trust’s counsel; assist to the extent requested by the Trust with the Trust’s preparation of its Annual and Semi-Annual Reports to Shareholders and its Registration Statement (on Form N-1A or any replacement therefor); compile data for, prepare and file timely Notices to the Commission required pursuant to Rule 24f-2 under the 1940 Act; keep and maintain the financial accounts and records of each Fund, including calculation of daily expense accruals; and generally assist in all aspects of the Funds’ operations. Under the Administration Agreement, the Administrator may delegate all or any part of its responsibilities thereunder.

 

The Administrator receives a tiered fee from the Trust for its services as Administrator pursuant to an Administration Agreement. The fee is calculated daily and paid periodically at an annual rate of up to 0.15% of the Funds’ average daily net assets on the first $250 million in Trust assets, 0.13% on Trust assets in excess of $250 million and up to $500 million, 0.11% on Trust assets in excess of $500 million and up to $750 million and 0.09% on Trust assets in excess of $750 million.

 

For each of the past three fiscal years ending March 31, the Funds paid the Administrator total Administration Fees as follows:

 

FUND

 

 

 

2011

 

2012

 

2013

 

Boston Trust Asset Management Fund

 

Administrative Fees Paid

 

$

422,609

 

$

453,899

 

 

 

 

 

Administrative Fees Voluntarily Waived

 

$

136,554

 

$

154,412

 

 

 

Boston Trust Equity Fund

 

Administrative Fees Paid

 

$

115,179

 

$

121,376

 

 

 

 

 

Administrative Fees Voluntarily Waived

 

$

36,462

 

$

41,273

 

 

 

Boston Trust Midcap Fund

 

Administrative Fees Paid

 

$

44,410

 

$

51,301

 

 

 

 

 

Administrative Fees Voluntarily Waived

 

$

13,302

 

$

17,468

 

 

 

Boston Trust Small Cap Fund

 

Administrative Fees Paid

 

$

373,124

 

$

536,687

 

 

 

 

 

Administrative Fees Voluntarily Waived

 

$

121,777

 

$

182,005

 

 

 

Boston Trust SMID Cap Fund

 

Administrative Fees Paid

 

$

0

*

$

1,755

 

 

 

 

 

Administrative Fees Voluntarily Waived

 

$

0

*

$

521

 

 

 

 

24



 

Walden Asset Management Fund

 

Administrative Fees Paid

 

$

93,388

 

$

97,401

 

 

 

 

 

Administrative Fees Voluntarily Waived

 

$

28,564

 

$

33,082

 

 

 

Walden Equity Fund

 

Administrative Fees Paid

 

$

160,000

 

$

180,184

 

 

 

 

 

Administrative Fees Voluntarily Waived

 

$

51,264

 

$

61,254

 

 

 

Walden Midcap Fund

 

Administrative Fees Paid

 

$

0

*

$

11,874

 

 

 

 

 

Administrative Fees Voluntarily Waived

 

$

0

*

$

3,794

 

 

 

Walden Small Cap Innovations Fund

 

Administrative Fees Paid

 

$

65,793

 

$

103,944

 

 

 

 

 

Administrative Fees Voluntarily Waived

 

$

20,187

 

$

35,071

 

 

 

Walden SMID Cap Innovations Fund

 

Administrative Fees Paid

 

$

0

*

$

0

*

 

 

 

 

Administrative Fees Voluntarily Waived

 

$

0

*

$

0

*

 

 

Walden International Equity Fund

 

Administrative Fees Paid

 

$

0

*

$

0

*

$

0

*

 

 

Administrative Fees Voluntarily Waived

 

$

0

*

$

0

*

$

0

*

 


*                  The Fund had not commenced operations as of this period.

 

The Administration Agreement is renewed automatically for successive one-year terms, unless written notice not to renew is given by the non-renewing party to the other party at least 60 days prior to the expiration of the then-current term. The Administration Agreement is terminable with respect to a particular Fund only upon mutual agreement of the parties to the Administration Agreement and for cause (as defined in the Administration Agreement) by the party alleging cause, on not less than 60 days’ notice by the Trust’s Board of Trustees or by the Administrator.

 

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

 

In addition, Citi provides certain fund accounting services to the Funds pursuant to a Fund Accounting Agreement dated as of March 23, 1999. Under such Agreement, Citi maintains the accounting books and records for the Funds, including journals containing an itemized daily record of all purchases and sales of portfolio securities, all receipts and disbursements of cash and all other debits and credits, general and auxiliary ledgers reflecting all asset, liability, reserve, capital, income and expense accounts, including interest accrued and interest received, and other required separate ledger accounts; maintains a monthly trial balance of all ledger accounts; performs certain accounting services for the Funds, including calculation of the net asset value per share, calculation of the dividend and capital gain distributions, if any, and of yield, reconciliation of cash movements with the Funds’ custodian, affirmation to the Funds’ custodian of all portfolio trades and cash settlements, verification and reconciliation with the Funds’ custodian of all daily trade activity; provides

 

25



 

certain reports; obtains dealer quotations, prices from a pricing service or matrix prices on all portfolio securities in order to mark the portfolio to the market; and prepares an interim balance sheet, statement of income and expense, and statement of changes in net assets for each Fund.

 

Distributor

 

BHIL serves as agent for each of the Funds in the distribution of its Shares pursuant to an Underwriting Agreement dated as of August 1, 2012 (the “Underwriting Agreement”). Unless otherwise terminated, the Underwriting Agreement will continue in effect for successive annual periods if, as to each Fund, such continuance is approved at least annually by (i) by the Trust’s Board of Trustees or by the vote of a majority of the outstanding shares of that Fund, and (ii) by the vote of a majority of the Trustees of the Funds who are not parties to the Underwriting Agreement or interested persons (as defined in the 1940 Act) of any party to the Underwriting Agreement, cast in person at a meeting called for the purpose of voting on such approval. The Underwriting Agreement may be terminated in the event of any assignment, as defined in the 1940 Act.

 

In its capacity as distributor, BHIL enters into selling agreements with intermediaries that solicit orders for the sale of Shares, advertises and pays the costs of advertising, office space and the personnel involved in such activities. The Distributor continually distributes shares of the Funds on a best efforts basis. The Distributor has no obligation to sell any specific quantity of the Funds’ shares. BHIL receives an annual base fee of $17,500 under the Underwriting Agreement, plus per item fees for sales literature review and dealer set-up. The Trust compensates the Distributor for the review and maintenance of the Trust’s website and reimburses the Distributor for out-of-pocket expenses.

 

Custodian

 

Boston Trust & Investment Management Company, One Beacon Street, Boston, Massachusetts 02108 (the “Custodian”), serves as the Funds’ custodian pursuant to the Custody Agreement dated as of December 8, 2005. The Custodian’s responsibilities include safeguarding and controlling the Funds’ cash and securities, handling the receipt and delivery of securities, and collecting interest and dividends on the Funds’ investments. The Custodian is an affiliate of the Funds and it receives fees for the custodial services it provides.

 

Transfer Agency Services

 

Boston Trust & Investment Management Company serves as transfer agent and dividend disbursing agent (the “Transfer Agent”) for all of the Funds pursuant to the Transfer Agency Agreement dated as of March 23, 1999. Pursuant to such Transfer Agency Agreement, the Transfer Agent, among other things, performs the following services in connection with each Fund’s shareholders of record: maintenance of shareholder records for each of the Fund’s shareholders of record; processing shareholder purchase and redemption orders; processing transfers and exchanges of shares of the Funds on the shareholder files and records; processing dividend payments and reinvestments; and assistance in the mailing of shareholder reports and proxy solicitation materials. For such services the Transfer Agent receives a fee based on the number of shareholders of record. Citi serves as sub-transfer agent for NSCC clearing arrangements under a Sub-Transfer Agency Agreement dated February 24, 2010.

 

Shareholder Services Agreements

 

The Fund has authorized certain financial intermediaries to accept purchase and redemption orders on their behalf. The Fund will be deemed to have received a purchase or redemption order when a financial intermediary or its designee accepts the order. These orders will be priced at the NAV next calculated after the order is accepted.

 

The Funds are entitled to enter into Shareholder Services Agreements pursuant to which the Funds are authorized to make payments to certain entities which may include investment advisers, banks, trust companies and other types of organizations (“Authorized Service Providers”) for providing administrative services with respect to shares of the Funds attributable to or held in the name of the Authorized Service Provider for its clients or other parties with whom they have a servicing relationship. Under the terms of each Shareholder Services Agreement, a Fund is authorized to pay an Authorized Service Provider (which include affiliates of the Funds) a shareholder services fee which may be based on the average daily net asset value of the shares of the Fund attributable to or held in the name of the Authorized Service Provider for providing certain administrative services to Fund shareholders with whom the Authorized Service Provider has a servicing

 

26



 

relationship, on a fixed dollar amount for each account serviced by the Authorized Service Provider, or some combination of each of those methods of calculation. Among the types of shareholder services that may be compensated under the Agreements are: (1) answering customer inquiries of a general nature regarding the Funds; (2) responding to customer inquiries and requests regarding statements of additional information, reports, notices, proxies and proxy statements, and other Fund documents; (3) delivering prospectuses and annual and semi-annual reports to beneficial owners of Fund shares; (4) assisting the Funds in establishing and maintaining shareholder accounts and records; (5) assisting customers in changing account options, account designations and account addresses; (6) sub-accounting for all Fund share transactions at the shareholder level; (7) crediting distributions from the Funds to shareholder accounts; (8) determining amounts to be reinvested in the Funds; and (9) providing such other administrative services as may be reasonably requested and which are deemed necessary and beneficial to the shareholders of the Funds.

 

PAYMENT OF ADDITIONAL CASH COMPENSATION

 

On occasion, the Adviser may make payments out of its resources and legitimate profits, which may include profits the Adviser derives from investment advisory fees paid by the Fund, to financial intermediaries as incentives to market the Fund, to cooperate with the Adviser’s promotional efforts, or in recognition of the provision of administrative services and marketing and/or processing support. These payments are often referred to as “additional cash compensation” and are in addition to the payments to financial intermediaries as discussed in above. The payments are made pursuant to agreements between financial intermediaries and the Adviser and do not affect the price investors pay to purchase shares of a Fund, the amount a Fund will receive as proceeds from such sales and other the expenses paid by a Fund.

 

Additional cash compensation payments may be used to pay financial intermediaries for: (a) transaction support, including any one-time charges for establishing access to Fund shares on particular trading systems (known as “platform access fees”); (b) program support, such as expenses related to including the Fund in retirement programs, fee-based advisory or wrap fee programs, fund supermarkets, bank or trust company products, and/or insurance programs (e.g., individual or group annuity contracts); (c) placement by a financial intermediary on its offered, preferred, or recommended fund list; (d) marketing support, such as providing representatives of the Adviser access to sales meetings, sales representatives and management representatives; (e) firm support, such as business planning assistance, advertising, and assistance with educating sales personnel about the Fund and shareholder financial planning needs; (f) providing shareholder and administrative services; and (g) providing other distribution-related or asset retention services.

 

Additional cash compensation payments generally are structured as basis point payments on positions held or, in the case of platform access fees, fixed dollar amounts.

 

The Adviser and its affiliates also may pay non-cash compensation to financial intermediaries and their representatives in the form of (a) occasional gifts; (b) occasional meals, tickets or other entertainment; and/or (c) sponsorship support of regional or national conferences or seminars. Such non-cash compensation will be made subject to applicable law.

 

Independent Registered Public Accounting Firm

 

The independent registered public accounting firm of Cohen Fund Audit Services, Ltd., 800 Westpoint Parkway, Suite 1100, Westlake, Ohio 44145, has been selected as the independent accountants for the Funds for their current fiscal year. The independent registered public accounting firm performs an annual audit of the Funds’ financial statements and provides other related services. Reports of their activities are provided to the Trust’s Board of Trustees.

 

Legal Counsel

 

Thompson Hine LLP, 41 South High Street, Suite 1700, Columbus, Ohio 43215, is counsel to the Trust.

 

27



 

ADDITIONAL INFORMATION

 

DESCRIPTION OF SHARES

 

The Funds are a Massachusetts business trust organized on January 8, 1992. The Trust’s Declaration of Trust is on file with the Secretary of State of Massachusetts. The Declaration of Trust authorizes the Board of Trustees to issue an unlimited number of shares, which are shares of beneficial interest, with a par value of $0.01 per share. The Funds consists of several funds organized as separate series of shares. The Trust’s Declaration of Trust authorizes the Board of Trustees to divide or redivide any unissued shares of the Trust into one or more additional series by setting or changing in any one or more respects their respective preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption.

 

Shares have no subscription or preemptive rights and only such conversion or exchange rights as the Board of Trustees may grant in its discretion. When issued for payment as described in the Prospectus and this Statement of Additional Information, the Shares will be fully paid and non-assessable. In the event of a liquidation or dissolution of the Trust, shareholders of a fund are entitled to receive the assets available for distribution belonging to that fund, and a proportionate distribution, based upon the relative asset values of the respective Funds, of any general assets not belonging to any particular Fund which are available for distribution.

 

Rule 18f-2 under the 1940 Act provides that any matter required to be submitted to the holders of the outstanding voting securities of an investment company such as the Funds shall not be deemed to have been effectively acted upon unless approved by the holders of a majority of the outstanding shares of each Fund affected by the matter. For purposes of determining whether the approval of a majority of the outstanding shares of the Fund will be required in connection with a matter, the Funds will be deemed to be affected by a matter unless it is clear that the interests of each Fund in the matter are identical, or that the matter does not affect any interest of the Funds. Under Rule 18f-2, the approval of an investment advisory agreement or any change in investment policy would be acted effectively upon with respect to the Funds only if approved by a majority of the outstanding shares of the Funds. However, Rule 18f-2 also provides that the approval of principal underwriting contracts and the election of Trustees may be effectively acted upon by shareholders of the Trust voting without regard to series.

 

Under Massachusetts law, shareholders, under certain circumstances, could be held personally liable for the obligations of the Trust. However, the Declaration of Trust disclaims liability of the Shareholders, Trustees or officers of the Trust for acts or obligations of the Trust, which are binding only on the assets and property of the Trust, and requires that notice of the disclaimer be given in each contract or obligation entered into or executed by the Trust or the Trustees. The Declaration of Trust provides for indemnification out of Trust property for all loss and expense of any shareholder held personally liable for the obligations of the Trust. The risk of a shareholder incurring financial loss on account of shareholder liability is limited to circumstances in which the Trust itself would be unable to meet its obligations, and thus should be considered remote.

 

28



 

Control Persons and Principal Holders of Securities

 

A principal shareholder is any person who owns (either of record or beneficially) 5% or more of the outstanding shares of a Fund. A control person is one who owns, either directly or indirectly, more than 25% of the voting securities of a Fund or acknowledges the existence of such control. As a controlling shareholder, each of these persons could control the outcome of any proposal submitted to the shareholders for approval, including changes to the Fund’s fundamental policies or the terms of the management agreement with the Adviser. Ms. Santini is a Senior Vice President and Senior Portfolio Manager of Boston Trust & Investment Management Company , which has discretionary voting and investment authority over Fund shares held in client discretionary accounts.  Ms. Santini also owns over 10% of the outstanding shares of BTIM, Inc., a subsidiary of Boston Trust & Investment Management Company . As a result, Ms. Santini and/or the Boston Trust & Investment Management Company  may be deemed to have control over certain Funds.

 

The following tables set forth information concerning such persons that, to the knowledge of the Trust’s Board of Trustees, owned, of record or beneficially, at least five percent of a Fund’s Shares as of June 30, 2013:

 

Fund

 

Name and Address

 

Percent
Ownership

 

Nature of
Ownership

 

 

 

 

 

 

 

Boston Trust Asset Management Fund

 

Boston Trust & Investment Management Co.

 

 

 

Record

 

 

One Beacon Street

 

 

 

 

 

 

Boston, MA 02108

 

 

 

 

 

 

 

 

 

 

 

Boston Trust Equity Fund

 

Boston Trust & Investment Management Co.

 

 

 

Record

 

 

One Beacon Street

 

 

 

 

 

 

Boston, MA 02108

 

 

 

 

 

 

 

 

 

 

 

Boston Trust Midcap Fund

 

Boston Trust & Investment Management Co.

 

 

 

Record

 

 

One Beacon Street

 

 

 

 

 

 

Boston, MA 02108

 

 

 

 

 

 

 

 

 

 

 

Boston Trust SMID Cap Fund

 

Boston Trust & Investment Management Co.

 

 

 

Record

 

 

One Beacon Street

 

 

 

 

 

 

Boston, MA 02108

 

 

 

 

 

 

 

 

 

 

 

 

 

Wells Fargo Bank N.A

 

 

 

Record

 

 

1525 West W.T. Harris Blvd

 

 

 

 

 

 

Charlotte, NC 28262-1151

 

 

 

 

 

 

 

 

 

 

 

 

 

SEI Private Trust Company

 

 

 

Record

 

 

One Freedom Valley Drive

 

 

 

 

 

 

Oaks, PA 19456

 

 

 

 

 

 

 

 

 

 

 

Boston Trust Small Cap Fund

 

National Financial Services

 

 

 

Record

 

 

200 Liberty Street, 5th Floor

1 World Financial

 

 

 

 

 

 

New York, NY 10281

 

 

 

 

 

 

 

 

 

 

 

 

 

Wells Fargo Bank N.A

 

 

 

Record

 

 

1525 West W.T. Harris Blvd

 

 

 

 

 

 

Charlotte, NC 28262-1151

 

 

 

 

 

 

 

 

 

 

 

 

 

Boston Trust & Investment Management Co.

 

 

 

Record

 

 

One Beacon Street

 

 

 

 

 

 

Boston, MA 02108

 

 

 

 

 

 

 

 

 

 

 

 

 

Charles Schwab & Co., Inc.

 

 

 

Record

 

 

101 Montgomery Street

 

 

 

 

 

 

San Francisco, CA 94104

 

 

 

 

 

 

 

 

 

 

 

 

 

Fidelity Investments

 

 

 

Record

 

 

100 Magellan Way

 

 

 

 

 

 

Covington, KY 41015-1987

 

 

 

 

 

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Walden Asset Management Fund

 

Boston Trust & Investment Management Co.

 

 

 

Record

 

 

One Beacon Street

 

 

 

 

 

 

Boston, MA 02108

 

 

 

 

 

 

 

 

 

 

 

 

 

JP Morgan Chase Bank

 

 

 

Record

 

 

4 NY Plaza

 

 

 

 

 

 

New York, NY 10004

 

 

 

 

 

 

 

 

 

 

 

Walden Equity Fund

 

JP Morgan Chase Bank

 

 

 

Record

 

 

4 NY Plaza

 

 

 

 

 

 

New York, NY 10004

 

 

 

 

 

 

 

 

 

 

 

 

 

Charles Schwab & Co., Inc.

 

 

 

Record

 

 

101 Montgomery Street

 

 

 

 

 

 

San Francisco, CA 94104

 

 

 

 

 

 

 

 

 

 

 

 

 

Boston Trust & Investment Management Co.

 

 

 

Record

 

 

One Beacon Street

 

 

 

 

 

 

Boston, MA 02108

 

 

 

 

 

 

 

 

 

 

 

Walden Midcap  Fund

 

Boston Trust & Investment Management Co.

 

 

 

Record

 

 

One Beacon Street

 

 

 

 

 

 

Boston, MA 02108

 

 

 

 

 

 

 

 

 

 

 

Walden Small Cap Innovations Fund

 

Boston Trust & Investment Management Co.

 

 

 

Record

 

 

One Beacon Street

 

 

 

 

 

 

Boston, MA 02108

 

 

 

 

 

 

 

 

 

 

 

 

 

Charles Schwab & Co., Inc.

 

 

 

Record

 

 

101 Montgomery Street

 

 

 

 

 

 

San Francisco, CA 94104

 

 

 

 

 

 

 

 

 

 

 

Walden SMID Cap Innovations Fund

 

Boston Trust & Investment Management Co.

 

 

 

Record

 

 

One Beacon Street

 

 

 

 

 

 

Boston, MA 02108

 

 

 

 

 

The Trustees and officers, as a group, owned less than 1% of the Fund’s outstanding shares.

 

Vote Of A Majority Of The Outstanding Shares

 

As used in the Prospectus and this Statement of Additional Information, a “vote of a majority of the outstanding Shares” of the Funds means the affirmative vote, at a meeting of Shareholders duly called, of the lesser of (a) 67% or more of the votes of Shareholders of that Fund present at a meeting at which the holders of more than 50% of the votes attributable to Shareholders of record of that Fund are represented in person or by proxy, or (b) the holders of more than 50% of the outstanding votes of Shareholders of that Fund.

 

Additional Tax Information

 

Set forth below is a discussion of certain U.S. federal income tax issues concerning the Funds and the purchase, ownership, and disposition of Fund shares. This discussion does not purport to be complete or to deal with all aspects of federal income taxation that may be relevant to Shareholders in light of their particular circumstances. For example, this discussion does not apply to qualified tax deferred accounts or other non-taxable entities. This discussion is based upon present provisions of the Internal Revenue Code of 1986, as amended (the “Code”), the regulations promulgated thereunder, and judicial and administrative ruling authorities, all of which are subject to change, which change may be retroactive. Prospective investors should consult their own tax advisors with regard to the federal tax consequences of the purchase, ownership, or disposition of the Funds’ shares, as well as the tax consequences arising under the laws of any state, foreign country, or other taxing jurisdiction.

 

Each of the Funds is treated as a separate entity for federal income tax purposes and intends each year to qualify and elect to be treated as a “regulated investment company” under the Code.

 

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To qualify as a regulated investment company, each Fund must, among other things: diversify its investments within certain prescribed limits; derive at least 90% of its gross income from dividends, interest, payments with respect to securities loans, and gains from the sale or other disposition of securities or foreign currencies, or other income derived with respect to its business of investing in such stock, securities, or currencies; and, distribute to its Shareholders at least 90% of its investment company taxable income for the year. In general, the Funds’ investment company taxable income will be its taxable income subject to certain adjustments and excluding the excess of any net long-term capital gain for the taxable year over the net short-term capital loss, if any, for such year.

 

A non-deductible 4% excise tax is imposed on regulated investment companies that do not distribute in each calendar year (regardless of whether they otherwise have a non-calendar taxable year) an amount equal to 98% of their ordinary income for the calendar year plus 98.2% of their capital gain net income for the one-year period ending on October 31 of such calendar year. The balance of such income must be distributed during the next calendar year. If distributions during a calendar year were less than the required amount, the Funds would be subject to a non-deductible excise tax equal to 4% of the deficiency.

 

Although the Funds expect to qualify as “regulated investment companies” and thus to be relieved of all or substantially all of their federal income tax liability, depending upon the extent of their activities in states and localities in which their offices are maintained, in which their agents or independent contractors are located, or in which they are otherwise deemed to be conducting business, the Funds may be subject to the tax laws of such states or localities. In addition, if for any taxable year a Fund does not qualify for the special tax treatment afforded regulated investment companies, all of its taxable income will be subject to federal tax at regular corporate rates (without any deduction for distributions to its Shareholders). In such event, dividend distributions would be taxable to Shareholders to the extent of earnings and profits, and would be eligible for the dividends received deduction for corporations.

 

It is expected that each Fund will distribute annually to Shareholders all or substantially all of the Fund’s net ordinary income and net realized capital gains and that such distributed net ordinary income and distributed net realized capital gains will be taxable income to Shareholders for federal income tax purposes, even if paid in additional Shares of the Fund and not in cash.

 

The excess of net long-term capital gains over short-term capital losses realized and distributed by the Funds and designated as capital gain dividends, whether paid in cash or reinvested in Fund shares, will be taxable to Shareholders.  Under current law, capital gain dividends recognized by a non-corporate shareholder generally will be taxed at a maximum federal income tax rate of 20%. Capital gains of corporate shareholders are taxed at the same rate as ordinary income. A portion of the dividends paid by a Fund may be qualified dividends subject to the same maximum federal income tax rate applicable to capital gains dividends. A shareholder would also have to satisfy a 61-day holding period with respect to any distributions of qualifying dividends in order to obtain the benefit of the lower rate. Note that distributions of earnings from dividends paid by “qualified foreign corporations” can also qualify for the lower tax rates on qualifying dividends. Qualified foreign corporations are corporations incorporated in a U.S. possession, corporations whose stock is readily tradable on an established securities market in the U.S., and corporations eligible for the benefits of a comprehensive income tax treaty with the United States which satisfy certain other requirements. Passive foreign investment companies are not treated as “qualified foreign corporations.” Foreign tax credits associated with dividends from “qualified foreign corporations” will be limited to reflect the reduced U.S. tax on those dividends.

 

Foreign taxes may be imposed on the Funds by foreign countries with respect to income from foreign securities, if any. It is expected that, because more  than 50% in value of the International Equity  Fund’s total assets at the end of its fiscal year will be invested in stocks or securities of foreign corporations,  the Fund will be entitled under the Code to pass through to its Shareholders their pro rata share of the foreign taxes paid by the Fund.  Because the remaining Funds are not expected to qualify for pass-through treatment, any such taxes will be taken as a deduction by those Funds.

 

The Funds may be required by federal law to withhold U.S. tax (currently at a rate of 28%) from taxable dividends and capital gain distributions and the proceeds of redemption or the values of any exchanges of Shares of the Funds by a Shareholder, if the Shareholder (1) fails to furnish the Trust with a correct taxpayer identification number, (2) under-reports dividend or interest income, or (3) fails to certify to the Trust that he or she is not subject to such withholding. An individual’s taxpayer identification number is his or her Social Security number.

 

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For taxable years beginning after December 31, 2012, an additional 3.8% Medicare tax generally will be imposed on certain net investment income (including ordinary dividends and capital gain distributions received from the Fund and net gains from redemptions or other taxable dispositions of Fund shares) of U.S. individuals, estates and trusts to the extent that any such person’s “modified adjusted gross income” (in the case of an individual) or “adjusted gross income” (in the case of an estate or trust) exceeds certain threshold amounts.

 

Information as to the Federal income tax status of all distributions will be mailed annually to each Shareholder.

 

CAPITAL LOSS CARRYFORWARDS. As of March 31, 2013, the following Funds had net capital loss carryforwards, which are available to offset future realized gains. To the extent these carryforwards are used to offset future gains, it is probable that the amounts offset will not be distributed to shareholders.

 

Pre-enactment capital loss carryforwards subject to expiration:

 

Fund

 

Amount

 

Expires

 

Boston Trust Asset Management Fund (formerly, Boston Trust Balanced Fund)

 

$

 

 

 

 

Boston Trust Equity Fund

 

 

 

 

 

Boston Trust Equity Fund

 

 

 

 

 

Walden Asset Management Fund (formerly, Walden Balanced Fund)

 

 

 

 

 

Walden Equity Fund

 

 

 

 

 

 

Post-enactment capital loss carryforwards not subject to expiration:

 

Fund

 

Short-Term Amount

 

Long Term Amount

 

Walden Midcap Fund

 

$

 

 

$

 

 

Net short-term or long-term capital losses realized in the tax years beginning after April 1, 2012 will be applied as capital loss realized in the following tax year before application to any capital loss carryovers from tax years ending on or before March 31, 2011 as summarized in the above schedule.

 

MARKET DISCOUNT. If any of the Funds purchases a debt security at a price lower than the stated redemption price of such debt security, the excess of the stated redemption price over the purchase price is “market discount”. If the amount of market discount is more than a de minimis amount, a portion of such market discount generally must be included as ordinary income (not capital gain) by the Fund in each taxable year in which the Fund owns an interest in such debt security and receives a principal payment on it. In particular, the Fund will be required to allocate that principal payment first to the portion of the market discount on the debt security that has accrued but has not previously been includable in income. In general, the amount of market discount that must be included for each period is equal to the lesser of (i) the amount of market discount accruing during such period (plus any accrued market discount for prior periods not previously taken into account) or (ii) the amount of the principal payment with respect to such period. Generally, market discount accrues on a daily basis for each day the debt security is held by a Fund at a constant rate over the time remaining to the debt security’s maturity or, at the election of the Fund, at a constant yield to maturity which takes into account the semi-annual compounding of interest. Gain realized on the disposition of a market discount obligation must be recognized as ordinary interest income (not capital gain) to the extent of the “accrued market discount.”

 

ORIGINAL ISSUE DISCOUNT. Certain debt securities acquired by a Fund may be treated as debt securities that were originally issued at a discount. Very generally, original issue discount is defined as the difference between the price at which a security was issued and its stated redemption price at maturity. Although no cash income on account of such discount is actually received by the Fund, original issue discount that accrues on a debt security in a given year generally is treated for federal income tax purposes as interest and, therefore, such income would be subject to the distribution requirements applicable to regulated investment companies. Some debt securities may be purchased by the Funds at a discount that exceeds the original issue discount on such debt securities, if any. This additional discount represents market discount for federal income tax purposes (see above).

 

OPTIONS, FUTURES AND FORWARD CONTRACTS. Any regulated futures contracts and certain options (namely, nonequity options and dealer equity options) in which a Fund may invest may be “section 1256 contracts.” Gains (or losses) on these contracts generally are considered to be 60% long-term and 40% short-term capital gains or

 

32



 

losses. Also, section 1256 contracts held by a Fund at the end of each taxable year (and on certain other dates prescribed in the Code) are “marked to market” with the result that unrealized gains or losses are treated as though they were realized.

 

Transactions in options, futures and forward contracts undertaken by a Fund may result in “straddles” for federal income tax purposes. The straddle rules may affect the character of gains (or losses) realized by the Fund, and losses realized by the Fund on positions that are part of a straddle may be deferred under the straddle rules, rather than being taken into account in calculating the taxable income for the taxable year in which the losses are realized. In addition, certain carrying charges (including interest expense) associated with positions in a straddle may be required to be capitalized rather than deducted currently. Certain elections that a Fund may make with respect to its straddle positions may also affect the amount, character and timing of the recognition of gains or losses from the affected positions.

 

Because only a few regulations implementing the straddle rules have been promulgated, the consequences of such transactions to a Fund are not entirely clear. The straddle rules may increase the amount of short-term capital gain realized by a Fund, which is taxed as ordinary income when distributed to Shareholders. Because application of the straddle rules may affect the character of gains or losses, defer losses and/or accelerate the recognition of gains or losses from the affected straddle positions, the amount which must be distributed to Shareholders as ordinary income or long-term capital gain may be increased or decreased substantially as compared to a fund that did not engage in such transactions.

 

CONSTRUCTIVE SALES. Under certain circumstance, a Fund may recognize gain from the constructive sale of an appreciated financial position. If a Fund enters into certain transactions in property while holding substantially identical property, the Fund would be treated as if it had sold and immediately repurchased the property and would be taxed on any gain (but not loss) from the constructive sale. The character of gain from a constructive sale generally would depend upon the Fund’s holding period in the property. Loss from a constructive sale would be recognized when the property was subsequently disposed of, and its character would depend on the Fund’s holding period and the application of various loss deferral provisions of the Code.

 

SECTION 988 GAINS OR LOSSES. Gains or losses attributable to fluctuations in exchange rates which occur between the time a Fund accrues income or other receivables or accrues expenses or other liabilities denominated in a foreign currency and the time the Fund actually collects such receivables or pays such liabilities generally are treated as ordinary income or ordinary loss. Similarly, on disposition of some investments, including debt securities and certain forward contracts denominated in a foreign currency, gains or losses attributable to fluctuations in the value of the foreign currency between the acquisition and disposition of the position also are treated as ordinary gain or loss. These gains and losses, referred to under the Code as “section 988” gains or losses, increase or decrease the amount of the Fund’s investment company taxable income available to be distributed to its Shareholders as ordinary income. If section 988 losses exceed other investment company taxable income during a taxable year, the Fund would not be able to make any ordinary dividend distributions, or distributions made before the losses were realized would be recharacterized as a return of capital to Shareholders, rather than as an ordinary dividend, reducing each Shareholder’s basis in his or her Fund shares.

 

PASSIVE FOREIGN INVESTMENT COMPANIES. The Funds may invest in shares of foreign corporations that may be classified under the Code as passive foreign investment companies (“PFICs”). In general, a foreign corporation is classified as a PFIC if at least one-half of its assets constitute investment-type assets, or 75% or more of its gross income is investment-type income. If a Fund receives a so-called “excess distribution” with respect to PFIC stock, the Fund may be subject to a tax on a portion of the excess distribution, whether or not the corresponding income is distributed by the Fund to Shareholders. In general, under the PFIC rules, an excess distribution is treated as having been realized ratably over the period during which the Fund held the PFIC shares. The Fund will be subject to tax on the portion, if any, of an excess distribution that is so allocated to prior Fund taxable years and an interest factor will be added to the tax, as if the tax had been payable in such prior taxable years. Certain distributions from a PFIC as well as gain from the sale of PFIC shares are treated as excess distributions. Excess distributions are characterized as ordinary income even though, absent application of the PFIC rules, certain excess distributions might have been classified as capital gain.

 

Each Fund may be eligible to elect alternative tax treatment with respect to PFIC shares. Under an election that currently is available in some circumstances, a Fund would be required to include in its gross income its share of the earnings of a PFIC on a current basis, regardless of whether distributions were received from the PFIC in a given year.

 

33



 

If this election were made, the special rules, discussed above, relating to the taxation of excess distributions, would not apply. In addition, another election would involve marking to market the Fund’s PFIC shares at the end of each taxable year, with the result that unrealized gains would be treated as though they were realized and reported as ordinary income. Any mark-to-market losses and any loss from an actual disposition of PFIC shares would be deductible as ordinary losses to the extent of any net mark-to-market gains included in income in prior years.

 

YIELDS AND TOTAL RETURNS

 

YIELD CALCULATIONS. Yields on each Fund’s Shares are computed by dividing the net investment income per share (as described below) earned by the Fund during a 30-day (or one month) period by the maximum offering price per share on the last day of the period and annualizing the result on a semi-annual basis by adding one to the quotient, raising the sum to the power of six, subtracting one from the result and then doubling the difference. The net investment income per share of a Fund earned during the period is based on the average daily number of Shares of that Fund outstanding during the period entitled to receive dividends and includes dividends and interest earned during the period minus expenses accrued for the period, net of reimbursements. This calculation can be expressed as follows:

 

a - b

Yield = 2 [(cd + 1)exp(6) - 1]

 

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

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

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

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

 

For the purpose of determining net investment income earned during the period (variable “a” in the formula), dividend income on equity securities held by a Fund is recognized by accruing 1/360 of the stated dividend rate of the security each day that the security is held by the Fund. Interest earned on any debt obligations held by the Fund is calculated by computing the yield to maturity of each obligation held by the Fund based on the market value of the obligation (including actual accrued interest) at the close of business on the last Business Day of each month, or, with respect to obligations purchased during the month, the purchase price (plus actual accrued interest) and dividing the result by 360 and multiplying the quotient by the market value of the obligation (including actual accrued interest) in order to determine the interest income on the obligation for each day of the subsequent month that the obligation is held by the Fund. For purposes of this calculation, it is assumed that each month contains 30 days. The maturity of an obligation with a call provision is the next call date on which the obligation reasonably may be expected to be called or, if none, the maturity date. With respect to debt obligations purchased at a discount or premium, the formula generally calls for amortization of the discount or premium. The amortization schedule will be adjusted monthly to reflect changes in the market values of such debt obligations.

 

Undeclared earned income will be subtracted from the net asset value per share (variable “d” in the formula). Undeclared earned income is the net investment income which, at the end of the base period, has not been declared as a dividend, but is reasonably expected to be and is declared as a dividend shortly thereafter.

 

During any given 30-day period, the Adviser and the Administrator may voluntarily waive all or a portion of their fees with respect to a Fund. Such waiver would cause the yield of a Fund to be higher than it would otherwise be in the absence of such a waiver.

 

TOTAL RETURN CALCULATIONS. Average annual total return is a measure of the change in value of an investment in a Fund over the period covered, which assumes any dividends or capital gains distributions are reinvested in Shares of that Fund immediately rather than paid to the investor in cash. A Fund computes the average annual total return by determining the average annual compounded rates of return during specified periods that equate the initial amount invested to the ending redeemable value of such investment. This is done by dividing the ending redeemable value of a hypothetical $1,000 initial payment by $1,000 and raising the quotient to a power equal to one divided by the number of years (or fractional portion thereof) covered by the computation and subtracting one from the result. This calculation can be expressed as follows:

 

34



 

Average Annual

Total Return                                       = [(ERV/P)exp(1/n)-1]

 

Where: ERV                                                                                      = ending redeemable value at the end of the period covered by the computation of a hypothetical $1,000 payment made at the beginning of the period.

P                                                                           = hypothetical initial payment of $1,000.

n                                                                            = period covered by the computation, expressed in terms of years.

 

The Funds compute their aggregate total return by determining the aggregate compounded rate of return during specified periods that likewise equate the initial amount invested to the ending redeemable value of such investment. The formula for calculating aggregate total return is as follows:

 

Aggregate Total Return = [(ERV/P)-1]

 

ERV                                                                      = ending redeemable value at the end of the period covered by the computation of a hypothetical $1,000 payment made at the beginning of the period.

P                                                                             = hypothetical initial payment of $1,000.

 

The calculations of average annual total return and aggregate total return assume the reinvestment of all dividends and capital gain distributions on the reinvestment dates during the period. 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.

 

The Funds compute their average annual total return after taxes on distributions by determining the average annual compounded rates of return during specified periods that equate the initial amount invested to the ending redeemable value of such investment after taxes on fund distributions but not after taxes on redemptions. This is done by dividing the ending redeemable value after taxes on fund distributions of a hypothetical $1,000 initial payment by $1,000 and raising the quotient to a power equal to one divided by the number of years (or fractional portion thereof) covered by the computation and subtracting one from the result. This calculation can be expressed as follows:

 

Average Annual Total Return After Taxes

(after taxes on distributions)       = [(ATV(D)/P)exp(1/n)-1]

 

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

n                                                                                               = number of years.

ATV(D)                                                          = ending value of a hypothetical $1,000 payment made at the beginning of the 1-, 5-, or 10-year periods at the end of such periods after taxes on fund distributions but not after taxes on redemption.

 

The Funds compute their average annual total return after taxes on distributions and redemptions by determining the average annual compounded rates of return during specified periods that equate the initial amount invested to the ending redeemable value of such investment after taxes on fund distributions and redemptions. This is done by dividing the ending redeemable value after taxes on fund distributions and redemptions of a hypothetical $1,000 initial payment by $1,000 and raising the quotient to a power equal to one divided by the number of years (or fractional portion thereof) covered by the computation and subtracting one from the result. This calculation can be expressed as follows:

 

Average Annual Total Return After Taxes

(after taxes on distributions and redemptions) = [(ATV(DR)/P)exp 1/n -1]

 

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

n                                                                                               = number of years.

ATV(DR)                                                 = ending value of a hypothetical $1,000 payment made at the beginning of the 1-, 5-, or 10-year periods at the end of such periods, after taxes on fund distributions and redemption.

 

35



 

Performance of Predecessor Collective Investment Fund. The Boston Trust Small Cap Fund commenced operations on December 16, 2005, subsequent to the transfer of assets from a collective investment fund (“Collective Fund”) operated by the Adviser with substantially similar investment objectives, policies and guidelines. The performance data for the Boston Trust Small Cap Fund includes the performance of the Collective Fund for periods prior to the Boston Trust Small Cap Fund’s commencement of operations as adjusted to reflect the expenses of the Fund.

 

PERFORMANCE COMPARISONS

 

Investors may analyze the performance of the Funds by comparing them to the performance of other mutual funds or 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 Corporation and to data prepared by Lipper Analytical Services, 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, USA Today and local periodicals. In addition to performance information, general information about these Funds that appears in a publication such as those mentioned above may be included in advertisements, sales literature and reports to shareholders. The Funds may also include in advertisements and reports to shareholders information discussing the performance of the Adviser in comparison to other investment advisers.

 

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 one or more of the Funds within the Trust; (5) descriptions of investment strategies for one or more of such Funds; (6) descriptions or comparisons of various investment products, which may or may not include the Funds; (7) comparisons of investment products (including the Funds) 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 one or more of the Funds. The Trust may also include calculations, such as hypothetical compounding examples, which describe hypothetical investment results in such communications. Such performance examples must state clearly that they are based on an express set of assumptions and are not indicative of the performance of any Fund.

 

Current yields or total return will fluctuate from time to time and may not be representative of future results. Accordingly, a Fund’s yield or total return may not provide for comparison with bank deposits or other investments that pay a fixed return for a stated period of time. Yield and total return are functions of a Fund’s quality, composition and maturity, as well as expenses allocated to such Fund.

 

PROXY VOTING

 

The Board of Trustees of the Trust has adopted proxy voting policies and procedures (the “Group Policy”), pursuant to which the Trustees have delegated proxy voting responsibility to the Adviser and adopted the Adviser’s proxy voting policies and procedures (the “Policy”) which are described below. The Trustees will review each Fund’s proxy voting records from time to time and will annually consider approving the Policy for the upcoming year. In the event that a conflict of interest arises between a Fund’s Shareholders and the Adviser or any of its affiliates or any affiliate of the Fund, the Adviser will generally refrain from voting the proxies related to the companies giving rise to such conflict until it consults with the Board of Trustees. A Committee of the Board with responsibility for proxy oversight will instruct the Adviser on the appropriate course of action.

 

The Policy is designed to promote accountability of a company’s management to its shareholders and to align the interests of management with those of shareholders. The Adviser generally reviews each matter on a case-by-case basis in order to make a determination of how to vote in a manner that best serves the interests of Fund shareholders. The Adviser may abstain from voting from time to time where it determines that the costs associated with voting a proxy outweigh the benefits derived from exercising the right to vote. In addition, the Adviser will monitor situations that may result in a conflict of interest between a Fund’s shareholders and the Adviser or any of its affiliates or any affiliate of the Fund by maintaining a list of significant existing and prospective corporate clients. Information on how the Funds voted proxies

 

36



 

relating to portfolio securities during the 12 month period ended June 30th each year is available (1) without charge, upon request, by calling 1-800-282-8782, ext. 7050, (2) on the Funds’ Form N-PX on the Securities and Exchange Commission’s website at http://www.sec.gov., or (3) on the Funds’ website at www.btim.com.

 

DISCLOSURE OF FUND PORTFOLIO HOLDINGS

 

The Board of Trustees has adopted policies and procedures for the public and nonpublic disclosure of the Funds’ portfolio securities. A complete list of the Funds’ portfolio holdings is made publicly available on a quarterly basis through filings made with the SEC on Forms N-CSR and N-Q and on the Funds’ website at www.btim.com. As a general matter, in order to protect the confidentiality of the Funds’ portfolio holdings, no information concerning the portfolio holdings of the Funds may be disclosed to any unaffiliated third party except: (1) to service providers that require such information in the course of performing their duties (such as the Funds’ custodian, fund accountants, investment adviser, administrator, independent public accountants, attorneys, officers and trustees and each of their respective affiliates and advisors) and are subject to a duty of confidentiality; (2) in marketing materials, provided that the information regarding the portfolio holdings contained therein is at least fifteen days old; or (3) pursuant to certain enumerated exceptions that serve a legitimate business purpose. These exceptions include: (1) disclosure of portfolio holdings only after such information has been publicly disclosed, and (2) to third-party vendors, such as Morningstar Investment Services, Inc. and Lipper Analytical Services that (a) agree to not distribute the portfolio holdings or results of the analysis to third parties, other departments or persons who are likely to use the information for purposes of purchasing or selling the Funds before the portfolio holdings or results of the analysis become publicly available; and (b) sign a written confidentiality agreement, or where the Board of Trustees has determined that the polices of the recipient are adequate to protect the information that is disclosed. The confidentiality agreement must provide, among other things, that the recipient of the portfolio holdings information agrees to limit access to the portfolio information to its employees (and agents) who, on a need to know basis, are (1) authorized to have access to the portfolio holdings information and (2) subject to confidentiality obligations, including duties not to trade on non-public information, no less restrictive than the confidentiality obligations contained in the confidentiality agreement. Such disclosures must be authorized by the President or Chief Compliance Officer of the Adviser and shall be reported periodically to the Board.

 

Neither the Funds nor the Adviser may enter into any arrangement providing for the disclosure of non-public portfolio holding information for the receipt of compensation or benefit of any kind. Any exceptions to the policies and procedures may only be made by the consent of a majority of the Board of Trustees upon a determination that such disclosure serves a legitimate business purpose and is in the best interests of the Funds. Any amendments to these policies and procedures must be approved and adopted by the Board of Trustees. The Board may, on a case-by-case basis, impose additional restrictions on the dissemination of portfolio holdings information beyond those found in the policies and procedures, as necessary.

 

MISCELLANEOUS

 

Individual Trustees are generally elected by the Shareholders and, subject to removal by the vote of two-thirds of the Board of Trustees, serve for a term lasting until the next meeting of shareholders at which Trustees are elected. Such meetings are not required to be held at any specific intervals.

 

The Trust is registered with the Commission as an investment management company. Such registration does not involve supervision by the Commission of the management or policies of the Trust.

 

The Prospectus and this Statement of Additional Information are not an offering of the securities herein described in any state in which such offering may not lawfully be made. No salesperson, dealer, or other person is authorized to give any information or make any representation other than those contained in the Prospectus and this Statement of Additional Information.

 

FINANCIAL STATEMENTS

 

Because the Fund has not commenced operations as of the date of this Statement of Additional Information, it has not produced financial statements.

 

37



 

PART C

 


 

OTHER INFORMATION

 


 

ITEM 28. EXHIBITS

 

(a)(1)

 

Declaration of Trust(1)

(a)(2)

 

Establishment and Designation of Series of Shares (Boston Trust Balanced Fund, Boston Trust Equity Fund, Walden Balanced Fund, and Walden Equity Fund(3)

(a)(3)

 

Establishment and Designation of Series of Shares (Boston Trust Small Cap Fund) (8)

(a)(4)

 

Establishment and Designation of Series of Shares (Boston Trust Midcap Fund)(10)

(a)(5)

 

Establishment and Designation of Series of Shares (Walden Small Cap Innovations Fund)(12)

(a)(6)

 

Establishment and Designation of Series of Shares (Walden Midcap Fund)(16)

(a)(7)

 

Establishment and Designation of Series of Shares (Boston Trust SMID Cap Fund and Walden Small Cap Innovations Fund)(19)

(a)(7)

 

Establishment and Designation of Series of Shares (Walden International Equity Fund) is filed herewith

(b)(1)

 

By-Laws(2)

(c)

 

Certificates for Shares are not issued. Articles IV, V, VI and VII of the Declaration of Trust, previously filed as Exhibit (a) hereto, define rights of holders of Shares (1)

(d)(1)

 

Investment Advisory Agreement between Registrant and Boston Trust Investment Management, Inc.(7)

(d)(2)

 

Amended Schedule A to the Investment Advisory Agreement dated May 19, 2011 (17)

(d)(3)

 

Amended Schedule A to the Investment Advisory Agreement dated August 12, 2011 (19)

(d)(4)

 

Amendment to the Investment Advisory Agreement dated May 24, 2012 (20)

(d)(5)

 

Amended Schedule A to Investment Advisory Agreement to be filed by amendment

(e)(1)

 

Underwriting Agreement between Registrant and BHIL Distributors, Inc. dated August 1, 2012 is filed herewith (20)

(f)

 

Not Applicable

(g)(1)

 

Custody Agreement between Registrant and Boston Trust & Investment Management Company (formerly United States Trust Company of Boston)(3)

(g)(2)

 

Amended Schedule A to the Custody Agreement dated May 19, 2011 (17)

(g)(3)

 

Amended Schedule A to the Custody Agreement dated August 12, 2011 (19)

(g)(4)

 

Amendment to the Custody Agreement dated May 24, 2012 (20)

(g)(5)

 

Amended Schedule A to the Custody Agreement to be filed by amendment

(h)(1)

 

Administration Agreement between the Registrant and BISYS Fund Services(3)

(h)(2)

 

Amendment to the Administration Agreement dated May 19, 2011(17)

(h)(3)

 

Amendment to the Administration Agreement dated August 12, 2011(19)

(h)(4)

 

Amendment to the Administration Agreement dated March 1, 2012 (20)

(h)(5)

 

Amendment to Administrative Agreement to be filed by amendment

(h)(6)

 

Fund Accounting Agreement between the Registrant and BISYS Fund Services(3)

(h)(7)

 

Amended Schedule A to Fund Accounting Agreement dated May 19, 2011(16)

(h)(8)

 

Amendment to the Fund Accounting Agreement dated August 1, 2011(19)

 

C-1



 

(h)(9)

 

Amendment to the Fund Accounting Agreement dated August 12, 2011(19)

(h)(10)

 

Amended Schedule A to the Fund Accounting Agreement to be filed by amendment

(h)(11)

 

Transfer Agency Agreement between the Registrant and United States Trust Company of Boston Management Company(8)

(h)(12)

 

Schedule A to Transfer Agency Agreement dated May 19, 2011(17)

(h)(13)

 

Schedule A to Transfer Agency Agreement dated August 12, 2011 (19)

(h)(14)

 

Amendment to the Transfer Agency Agreement dated May 24, 2012 (20)

(h)(15)

 

Amended Schedule A to the Transfer Agency Agreement to be filed by amendment

(h)(16)

 

Amended and Restated Sub-Transfer Agency Agreement between Registrant, Boston Trust & Investment Management, Inc. and Citi Fund Services Ohio, Inc.(15)

(h)(17)

 

Amendment to Sub-Transfer Agency Agreement dated July 26, 2010(16)

(h)(18)

 

Amendment to Sub-Transfer Agency Agreement dated December 21, 2011(16)

(h)(19)

 

Amendment to Sub-Transfer Agency Agreement dated May 19, 2011(17)

(h)(20)

 

Amendment to Sub-Transfer Agency Agreement dated April 2, 2012 (20)

(h)(21)

 

Amended Schedule A to the Sub-Transfer Agency Agreement to be filed by amendment

(h)(22)

 

Expense Limitation Agreement between the Registrant and Boston Trust & Investment Management, Inc.(13)

(h)(23)

 

Amended Schedule A to the Expense Limitation Agreement dated August 12, 2011(19)

(h)(24)

 

Amendment to the Expense Limitation Agreement dated May 24, 2012 (20)

(h)(25)

 

Amended Expense Limitation Agreement to be filed by amendment

(h)(26)

 

Compliance Services Agreement between Registrant and Citi Fund Services Ohio, Inc.(10)

(h)(27)

 

Amendment to Compliance Services Agreement(19)

(i)

 

Opinion and Consent of Counsel to be filed by amendment

(j)

 

Consent of Independent Registered Public Accounting Firm - Cohen Fund Audit Services, Ltd. to be filed by aemndment

(k)

 

Not Applicable

(l)

 

Not Applicable

(m)

 

Not Applicable

(n)

 

Not Applicable

(o)

 

Not Applicable

(p)(1)(i)

 

Code of Ethics of Registrant(6)

(p)(1)(ii)

 

Supplemental Code of Ethics of Registrant (20)

(p)(2)

 

Code of Ethics of BHIL Distributors, Inc. (20)

(p)(3)

 

Code of Ethics of Boston Trust Investment Management, Inc.(14)

(p)(4)