497 1 file001.htm FORM 497

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

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PROSPECTUS
MAY 15, 2006

EQUITY FUNDS

SCHRODER EMERGING MARKET EQUITY FUND
SCHRODER INTERNATIONAL ALPHA FUND
SCHRODER NORTH AMERICAN EQUITY FUND
SCHRODER U.S. OPPORTUNITIES FUND
SCHRODER U.S. SMALL AND MID CAP OPPORTUNITIES FUND

TAXABLE FIXED INCOME FUNDS

SCHRODER ENHANCED INCOME FUND
SCHRODER TOTAL RETURN FIXED INCOME FUND

TAX-EXEMPT FIXED INCOME FUNDS

SCHRODER MUNICIPAL BOND FUND
SCHRODER SHORT-TERM MUNICIPAL BOND FUND

Investor Shares

This Prospectus describes nine mutual funds offered by Schroder Capital Funds
(Delaware), Schroder Series Trust, and Schroder Global Series Trust (each, a
"Trust" and collectively, the "Trusts").

SCHRODER EMERGING MARKET EQUITY FUND seeks capital appreciation through
investment principally in equity securities of companies in emerging market
countries in regions such as Asia, Latin America, Eastern Europe, the
Middle East, and Africa.

SCHRODER INTERNATIONAL ALPHA FUND seeks long-term capital appreciation
through investment in securities markets outside the United States.

SCHRODER NORTH AMERICAN EQUITY FUND seeks capital growth by investing
primarily in equity securities of companies in the United States.

SCHRODER U.S. OPPORTUNITIES FUND seeks capital appreciation by investing
primarily in equity securities of companies in the United States with
market capitalizations of $2.2 billion or less.

SCHRODER U.S. SMALL AND MID CAP OPPORTUNITIES FUND seeks capital
appreciation by investing primarily in equity securities of small and mid
cap companies in the United States.

SCHRODER ENHANCED INCOME FUND seeks high current income, consistent with
the preservation of capital and reasonable liquidity. As a secondary
objective, the Fund seeks a high rate of total return. The Fund invests in
a diversified portfolio of U.S. dollar-denominated income-producing
obligations. The Fund's dollar weighted average portfolio duration will
typically be from three to six months.

SCHRODER TOTAL RETURN FIXED INCOME FUND seeks a high level of total return
by investing in a portfolio of fixed income obligations. The Fund intends
to maintain a dollar-weighted average portfolio duration of three to six
years.

SCHRODER MUNICIPAL BOND FUND seeks a high level of income exempt from
regular federal income tax, consistent with the preservation of capital by
investing in a portfolio of investment grade municipal bonds. The Fund
intends to maintain a dollar-weighted average portfolio maturity of five to
ten years.

SCHRODER SHORT-TERM MUNICIPAL BOND FUND seeks a high level of income exempt
from regular federal income tax, consistent with the preservation of
capital by investing in a portfolio of investment grade short-term
municipal bonds. The Fund intends to maintain a dollar-weighted average
portfolio maturity of not more than three years.

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

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

SCHRODER CAPITAL FUNDS (DELAWARE)
SCHRODER SERIES TRUST
SCHRODER GLOBAL SERIES TRUST

TABLE OF CONTENTS

PAGE
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SUMMARY INFORMATION...................................................... 1
SCHRODER EMERGING MARKET EQUITY FUND.................................. 2
SCHRODER INTERNATIONAL ALPHA FUND..................................... 6
SCHRODER NORTH AMERICAN EQUITY FUND................................... 10
SCHRODER U.S. OPPORTUNITIES FUND...................................... 14
SCHRODER U.S. SMALL AND MID CAP OPPORTUNITIES FUND.................... 18
SCHRODER ENHANCED INCOME FUND......................................... 21
SCHRODER TOTAL RETURN FIXED INCOME FUND............................... 25
SCHRODER MUNICIPAL BOND FUND.......................................... 30
SCHRODER SHORT-TERM MUNICIPAL BOND FUND............................... 33
FEES AND EXPENSES........................................................ 37
PRINCIPAL RISKS OF INVESTING IN THE FUNDS................................ 40
NON-PRINCIPAL INVESTMENT STRATEGIES AND TECHNIQUES....................... 53
MANAGEMENT OF THE FUNDS.................................................. 55
HOW THE FUNDS' SHARES ARE PRICED......................................... 60
HOW TO BUY SHARES........................................................ 61
HOW TO SELL SHARES....................................................... 64
EXCHANGES................................................................ 67
DIVIDENDS AND DISTRIBUTIONS.............................................. 68
FREQUENT PURCHASES AND REDEMPTIONS OF FUND SHARES........................ 69
PAYMENT OF FEES.......................................................... 70
TAXES.................................................................... 71
DISCLOSURES OF FUND PORTFOLIO INFORMATION................................ 73
FINANCIAL HIGHLIGHTS..................................................... 74
USA PATRIOT ACT.......................................................... 78

-i-

SUMMARY INFORMATION

This summary identifies the investment objectives, principal investment
strategies, and principal risks of Schroder Emerging Market Equity Fund,
Schroder International Alpha Fund, Schroder North American Equity Fund, Schroder
U.S. Opportunities Fund, Schroder U.S. Small and Mid Cap Opportunities Fund,
Schroder Enhanced Income Fund, Schroder Total Return Fixed Income Fund, Schroder
Municipal Bond Fund, and Schroder Short-Term Municipal Bond Fund (each, a "Fund"
and collectively, the "Funds").

The summary for each of Schroder International Alpha Fund, Schroder North
American Equity Fund, Schroder U.S. Opportunities Fund, Schroder Enhanced Income
Fund, Schroder Total Return Fixed Income Fund, Schroder Municipal Bond Fund, and
Schroder Short-Term Municipal Bond Fund includes a bar chart that shows the
investment returns of that Fund's Investor Shares for each of its last ten full
calendar years of operation (or for each of its full calendar years since the
Fund commenced operations, if shorter). The table following each bar chart shows
how the Fund's average annual returns for the last year, for the last five
years, and for the last ten years or the life of the Fund (as applicable),
compare to a broad-based securities market index. The bar chart and table
provide some indication of the risks of investing in a Fund by comparing the
Fund's performance to a broad measure of market performance.

SCHRODER EMERGING MARKET EQUITY FUND

o INVESTMENT OBJECTIVE. To seek capital appreciation.

o PRINCIPAL INVESTMENT STRATEGIES. The Fund normally invests at least 80% of its
net assets in equity securities of companies the Fund's sub-adviser considers to
be "emerging market" issuers. The Fund may invest the remainder of its assets in
securities of issuers located anywhere in the world. The Fund may invest in
common and preferred stocks, securities convertible into common and preferred
stocks, and warrants to purchase common and preferred stocks. The Fund may also
invest in sponsored or unsponsored American Depositary Receipts ("ADRs"), Global
Depository Receipts ("GDRs"), European Depository Receipts ("EDRs") or other
similar securities representing ownership of foreign securities (collectively,
"Depositary Receipts"). The Fund may also invest in securities of closed-end
investment companies and exchange-traded funds ("ETFs"), including securities of
emerging market issuers. An investment in a domestic closed-end fund or ETF that
has a policy that it will normally invest at least 80% of its net assets in
equity securities of emerging market issuers, and has "emerging market" or the
equivalent in its name, or foreign funds with similar investment policies, will
be treated as an investment in equity securities of emerging market issuers for
purposes of determining if the Fund has invested at least 80% of its net assets
in such securities.

The Fund invests principally in equity securities of issuers domiciled or doing
business in "emerging market" countries in regions such as Asia, Latin America,
Eastern Europe, the Middle East and Africa. The Fund's sub-adviser currently
considers "emerging market" issuers to be issuers domiciled in or deriving a
substantial portion of their revenues from countries not included at the time of
investment in the Morgan Stanley International World Index of major world
economies. Countries currently in this Index include: Australia, Austria,
Belgium, Canada, Denmark, Finland, France, Germany, Greece, Hong Kong SAR,
Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal,
Singapore, Spain, Sweden, Switzerland, the United Kingdom, and the United
States. The Fund's sub-adviser may at times determine based on its own analysis
that an economy included in the Index should nonetheless be considered an
emerging market country, in which case that country would constitute an emerging
market country for purposes of the Fund's investments. The Fund's sub-adviser
has determined that Chinese companies listed in Hong Kong will be considered
emerging market issuers for this purpose. There is no limit on the amount of the
Fund's assets that may be invested in securities of issuers domiciled in any one
emerging market country, although the Fund will typically seek to allocate its
investments among a number of different emerging market countries.

The Fund invests in issuers and countries that its sub-adviser believes offer
the potential for capital growth. In identifying investments for the Fund, the
Fund's sub-adviser considers a variety of factors, including the issuer's
likelihood of above average earnings growth, the securities' attractive relative
valuation, and whether the issuer enjoys proprietary advantages. The Fund may
invest in securities of companies of any size, including companies with large,
medium, and small market capitalizations, including micro-cap companies. The
Fund may also purchase securities issued in initial public offerings. In
addition, the Fund's sub-adviser considers the risk of local political and/or
economic instability associated with particular countries and regions and the
liquidity of local markets. The Fund generally sells securities when the Fund's
sub-adviser believes they are fully priced or to take advantage of other
investments the Fund's sub-adviser considers more attractive.

The Fund may purchase or sell structured notes, or enter into swap transactions,
for hedging or as an alternative to purchasing or selling securities. The Fund's
sub-adviser may hedge some of the Fund's foreign currency exposure back into the
U.S. dollar, although it does not normally expect to do so. The Fund may also
purchase or sell futures on indices, including country specific or overall
emerging market indices. The Fund may use derivatives to gain exposure to
securities or market sectors as a substitute for cash investments (not for
leverage) or pending the sale of securities by the Fund and reinvestment of the
proceeds.

o PRINCIPAL RISKS.

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

o EMERGING MARKET SECURITIES RISK. The Fund may invest in "emerging market"
countries whose securities markets may experience heightened levels of
volatility. The risks of investing in emerging markets include greater
political and economic uncertainties than in foreign developed markets,
currency transfer restrictions, a more limited number of potential buyers,
and an emerging market country's dependence on revenue from particular
commodities or international aid. Additionally, the securities markets and
legal systems in emerging market countries may only be in a developmental
stage and may provide few, or none, of the advantages or protections of
markets or legal systems available in more developed countries. Emerging
market countries may experience extremely high levels of inflation, which
may adversely affect those countries' economies, currencies, and securities
markets. Also, emerging market issuers are often smaller and less
well-known than larger, more widely held companies, and involve certain
special risks associated with smaller capitalization companies described
below under "Small and Mid Cap Companies Risk."

o FOREIGN INVESTMENT RISK. Adverse political, regulatory, market, or
economic developments in foreign countries can affect issuers located in
those countries. Investments in foreign countries may also be subject to
foreign withholding taxes.

o FOREIGN CURRENCIES RISK. Investments in foreign securities are normally
denominated and traded in foreign currencies. The value of the Fund's
assets may be affected favorably or unfavorably by currency exchange rates,
currency exchange control regulations, and restrictions or prohibitions on
the repatriation of foreign currencies.

o GEOGRAPHIC FOCUS RISK. There is no limit on the amount of the Fund's
assets that may be invested in securities of issuers domiciled in any one
emerging market country, although the Fund will typically seek to allocate
its investments among a number of different emerging market countries. To
the extent the Fund invests a substantial amount of its assets in one
country, its performance may at times be worse than the performance of
other mutual funds that invest more broadly.

o SMALL AND MID CAP COMPANIES RISK. Many companies located in emerging
markets have smaller market capitalizations than those of comparable
companies located in developed markets. Small companies tend to be more
vulnerable to adverse developments than larger companies. The Fund may
invest in micro-cap companies, which tend to be particularly sensitive to
the risks associated with small companies. Small companies may have limited
product lines, markets, or financial resources, or may depend on a limited
management group. Their securities may trade less frequently and in limited
volumes. As a result, the prices of these securities may fluctuate more
than the prices of securities of larger, more widely traded companies.
Also, there may

be less publicly available information about small and mid cap companies or
less market interest in their securities as compared to larger companies,
and it may take longer for the price of the securities to reflect the full
value of their issuers' earnings potential or assets.

o EQUITY SECURITIES RISK. Equity securities are securities that represent
an ownership interest (or the right to acquire such an interest) in a
company and include common and preferred stocks. In the event an issuer is
liquidated or declares bankruptcy, the claims of owners of bonds take
priority over holders of preferred stock, whose claims take priority over
the claims of those who own common stock.

o CONVERTIBLE SECURITIES RISK. The Fund may invest in preferred stocks that
are convertible into common stocks, and so subject to the risks of
investments in both preferred and common stocks.

o WARRANTS RISK. The Fund may invest in warrants to purchase equity
securities. The price, performance and liquidity of such warrants are
typically linked to the underlying stock, less transaction costs. In
addition to the market risk related to the underlying holdings, the Fund
bears additional counterparty risk with respect to the issuing broker.
Moreover, there is currently no active trading market for equity-linked
warrants.

o INVESTMENTS IN OTHER INVESTMENT COMPANIES RISK. The Fund may invest in
shares of closed-end investment companies (including single country funds)
and ETFs. Investing in another investment company exposes the Fund to all
the risks of that investment company, and, in general, subjects it to a pro
rata portion of the other investment company's fees and expenses.

o DEPOSITARY RECEIPTS RISK. The Fund may invest in sponsored or unsponsored
Depositary Receipts. Investments in non-U.S. issuers through Depositary
Receipts and similar instruments may involve certain risks not applicable
to investing in U.S. issuers, including changes in currency rates,
application of local tax laws, changes in governmental administration or
economic or monetary policy or changed circumstances in dealings between
nations. Costs may be incurred in connection with conversions between
various currencies.

o EQUITY MARKETS RISK. The values of equity securities fluctuate in
response to issuer, political, market, and economic developments. Equity
prices can fluctuate dramatically over short time periods in response to
these developments. Different parts of the market and different types of
equity securities can react differently to these developments. For example,
large capitalization stocks can react differently from small capitalization
stocks, and "growth" stocks can react differently from "value" stocks.
Issuer, political, or economic developments can affect a single issuer,
issuers within an industry or economic sector or geographic region, or the
market as a whole.

o INITIAL PUBLIC OFFERINGS (IPOS) RISK. The Fund may purchase securities of
companies in initial public offerings of their securities, either in the
initial offering itself or shortly after the initial offering. Such
investments are subject generally to the risks described above under "Small
and Mid Cap Companies Risk." Such securities have no trading history, and
information about such companies may be available for very limited periods.
Under certain market conditions, very few companies, if any, may determine
to make initial public offerings of their securities. At any particular
time or from time to time the Fund may not be able to invest in securities
issued in IPOs or invest to the extent desired. The investment performance
of the Fund during periods when it is

unable to invest significantly or at all in initial public offerings may be
lower than during periods when the Fund is able to do so. The prices of
securities sold in initial public offerings can be highly volatile.

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

o LIQUIDITY RISK. The Fund may find it difficult to sell or to close out
certain investments at favorable prices or times. Illiquid securities may
be highly volatile and difficult to value.

o MANAGEMENT RISK. Because the Fund is actively managed, its investment
return depends on the ability of its sub-adviser to manage its portfolio
successfully. The Fund's sub-adviser and the investment team will apply
investment techniques and risk analyses in making investment decisions for
the Fund, but there can be no guarantee that these will produce the desired
results.

Performance Information. The Fund recently commenced operations and does not yet
have historical investment performance.

SCHRODER INTERNATIONAL ALPHA FUND

o INVESTMENT OBJECTIVE. Long-term capital appreciation through investment in
securities markets outside the United States.

o PRINCIPAL INVESTMENT STRATEGIES. The Schroder International Alpha Fund
(formerly, Schroder International Fund) will invest principally in securities of
companies located outside of the United States, and normally invests at least
65% of its total assets in equity securities of companies the Fund's adviser
considers to be located outside of the United States. The Fund will invest in a
variety of countries throughout the world. The Fund may, from time to time,
invest more than 25% of its net assets in any one country or group of countries.
The Fund will consider an issuer located in a country if it is organized under
the laws of that country and is principally traded in that country, or is
domiciled and has its principal place of business located in that country and is
principally traded in that country, or if the Fund's sub-adviser determines that
the issuer has more than 50% of its assets in or derives more than 50% of its
revenues from that country. The Fund invests in common and preferred stocks,
securities convertible into common and preferred stocks, and warrants to
purchase common and preferred stocks.

The Fund normally invests a substantial portion of its assets in countries
included in the Morgan Stanley Capital International EAFE Index, which is a
market weighted index of companies representative of the market structure of
certain developed market countries in Europe, Australia, Asia, and the Far East.
The Fund expects typically to invest in forty to sixty companies located outside
of the United States at any one time.

The Fund invests in issuers that the Fund's sub-adviser believes offer the
potential for capital growth. In identifying candidates for investment, the
Fund's sub-adviser may consider the issuer's likelihood of above average
earnings growth, the securities' attractive relative valuation, the quality of
the securities, and whether the issuer has any proprietary advantages. The Fund
generally sells securities when the Fund's sub-adviser believes they are fully
priced or when significantly more attractive investment candidates become
available. The Fund may invest in companies of any market capitalization. The
Fund may purchase or sell futures contracts and options, in order to gain
exposure to particular securities or markets, in connection with hedging
transactions, or otherwise to increase total return. By employing these
techniques the Fund's portfolio manager tries to add incremental return over the
Fund's benchmark index, which incremental return is sometimes referred to as
"alpha."

The Fund also may do the following:

o Invest in securities of issuers domiciled or doing business in
"emerging market" countries.

o Invest in securities of closed-end investment companies and
exchange-traded mutual funds ("ETFs") (open-end investment
companies whose shares may be bought or sold by investors in
transactions on major stock exchanges) that invest primarily in
foreign securities.

o PRINCIPAL RISKS.

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

o FOREIGN CURRENCY RISK. Investments in foreign securities are normally
denominated and traded in foreign currencies. The value of the Fund's
assets may be affected favorably or unfavorably by currency exchange rates,
currency exchange control regulations, and restrictions or prohibitions on
the repatriation of foreign currencies.

o EMERGING MARKETS SECURITIES RISK. The Fund may invest in "emerging
market" countries whose securities markets may experience heightened levels
of volatility. The risks of investing in emerging markets include greater
political and economic uncertainties than in foreign developed markets,
currency transfer restrictions, a more limited number of potential buyers,
and an emerging market country's dependence on revenue from particular
commodities or international aid. Additionally, the securities markets and
legal systems in emerging market countries may only be in a developmental
stage and may provide few, or none, of the advantages or protections of
markets or legal systems available in more developed countries. Emerging
market countries may experience extremely high levels of inflation, which
may adversely affect those countries' economies, currencies, and securities
markets. Also, emerging market issuers are often smaller and less
well-known than larger, more widely held companies, and involve certain
special risks associated with smaller capitalization companies.

o CONVERTIBLE SECURITIES RISK. The Fund may invest in preferred stocks that
are convertible into common stocks, and so subject to the risks of
investments in both preferred and common stocks.

o EQUITY MARKETS RISK. A risk of investing in the Fund is the risk that the
value of the equity securities in the portfolio will fall, or will not
appreciate as anticipated by the Fund's sub-adviser, due to factors that
adversely affect markets generally or particular companies in the
portfolio. The values of equity securities fluctuate in response to issuer,
political, market, and economic developments. Equity prices can fluctuate
dramatically over short time periods in response to these developments.
Different parts of the market and different types of equity securities can
react differently to these developments. For example, large capitalization
stocks can react differently from small capitalization stocks, and "growth"
stocks can react differently from "value" stocks. Issuer, political, or
economic developments can affect a single issuer, issuers within an
industry or economic sector or geographic region, or the market as a whole.

fluctuate more than the prices of securities of larger, more widely traded
companies. Also, there may be less publicly available information about
small and mid cap companies or less market interest in their securities as
compared to larger companies, and it may take longer for the price of the
securities to reflect the full value of their issuers' earnings potential
or assets.

o GEOGRAPHIC FOCUS RISK. The Fund may, from time to time, invest more than
25% of its net assets in any one country or group of countries. To the
extent that the Fund invests a substantial amount of its assets in one
country, its performance may at times be worse than the performance of
other mutual funds that invest more broadly.

o ISSUER FOCUS RISK. The Fund may invest in a smaller number of companies
than comprise the portfolios of other similar mutual funds. The Fund
expects typically to invest in forty to sixty companies at any time. When
the Fund invests in a relatively small number of issuers, changes in the
value of one or more portfolio securities may have a greater effect on the
Fund than if the Fund invested more broadly.

o LIQUIDITY RISK. The Fund may find it difficult to sell or to close out
certain investments at favorable prices or times. Illiquid securities may
be highly volatile and difficult to value.

Performance Information. (1)

[GRAPHIC OMITTED]

9.93% 3.34% 13.52% 30.99% -2.29% -25.81% -19.76% 32.93% 15.24% 18.32%
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

(1) Effective April 1, 2006, the combined advisory and administrative fees of
the Fund increased to 0.975% per annum. If the Fund had paid such higher fees
during the periods shown above, the returns shown above and in the table below
would have been lower. See "Management of the Funds - Management Fees."

During the periods shown above, the highest quarterly return was 21.57% for the
quarter ended December 31, 1999, and the lowest was -22.38% for the quarter
ended September 30, 2002.

AVERAGE ANNUAL TOTAL RETURNS+
(FOR THE PERIOD ENDED DECEMBER 31, 2005) One Year Five Years Ten Years
---------------------------------------- -------- ---------- ---------
Return Before Taxes 18.32% 1.53% 5.94%
Return After Taxes on Distributions (1) 17.96% 0.46% 2.87%
Return After Taxes on Distributions and
Sale of Fund Shares (1) 12.30% 0.69% 3.68%
Morgan Stanley Capital International
EAFE Index (2) (reflects no deduction
for fees, expenses or taxes) 13.54% 4.55% 5.84%

(1) After tax returns are estimated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state and
local taxes. Actual after-tax returns depend on an investor's tax situation and
may differ from those shown. After-tax returns are not relevant to investors who
hold their shares in the Fund through tax-deferred arrangements, such as 401(k)
plans or individual retirement accounts. In some cases, the return after taxes
may exceed the return before taxes due to an assumed tax benefit from any losses
on a sale of Fund shares at the end of the measurement period.

(2) The Morgan Stanley Capital International EAFE Index is a market weighted
index composed of companies representative of the market structure of certain
developed market countries in Europe, Australia, Asia, and the Far East, and
reflects dividends net of non-recoverable withholding tax.

+ The current portfolio management team primarily responsible for making
investment decisions for the Fund assumed this responsibility effective March
2005. The performance results shown in the bar chart and table above for periods
prior to such date were achieved by the Fund under different lead portfolio
managers.

PAST PERFORMANCE (BEFORE AND AFTER TAXES) IS NOT NECESSARILY AN INDICATION OF
FUTURE PERFORMANCE. It is possible to lose money on an investment in a Fund.

SCHRODER NORTH AMERICAN EQUITY FUND

o INVESTMENT OBJECTIVE. The Fund seeks long-term capital growth.

o PRINCIPAL INVESTMENT STRATEGIES. The Fund invests principally in equity
securities of companies in the United States. The Fund may invest in common and
preferred stocks, convertible preferred stocks, and warrants to purchase common
and preferred stocks.

The Fund's sub-adviser is responsible for day-to-day portfolio management. It
uses a proprietary quantitative investment analysis that evaluates market and
economic sectors, companies, and stocks on the basis of long-term historical
data. The Fund's sub-adviser uses that analysis to construct a highly
diversified portfolio of stocks. In addition, the Fund's sub-adviser attempts to
identify anticipated short-term deviations from longer-term historical trends
and cycles, and may adjust the Fund's portfolio to take advantage of those
deviations.

The Fund's investment portfolio, including the number of companies represented
in the portfolio and the sector weightings of the portfolio, will change as the
Fund's sub-adviser's evaluation of economic and market factors, as well as
factors affecting individual companies, changes.

The Fund will invest in a well diversified portfolio of companies of any size
that its sub-adviser judges to be attractive compared to the overall market. The
Fund's portfolio may include large, well known companies, as well as smaller,
less closely followed companies, including micro-cap companies. The Fund
generally sells securities when the Fund's sub-adviser believes they are fully
priced or when significantly more attractive investment candidates become
available.

The Fund may purchase or sell futures contracts and options, in order to gain
exposure to particular securities or markets, in connection with hedging
transactions, or otherwise to increase total return. The Fund may also invest in
closed-end investment companies and in exchange-traded mutual funds ("ETFs")
(open-end investment companies whose shares may be bought or sold by investors
in transactions on major stock exchanges).

The Fund normally invests at least 80% of its net assets in equity securities of
companies organized and principally traded in, or with their principal places of
business and principally traded in, North America. The Fund may use derivatives
for purposes of complying with this test. An investment in a U.S. closed-end
fund or ETF that has a policy that it will normally invest at least 80% of its
net assets in equity securities of North American companies, and has "North
America" or the equivalent in its name, or foreign funds with similar investment
policies, will be treated as an investment in equity securities of North
American companies for purposes of determining if the Fund has invested at least
80% of its net assets in such securities. The Fund considers North America to
consist of the United States and Canada.

The Fund's sub-adviser may trade the Fund's portfolio securities more frequently
than many other mutual funds. Frequent trading of the Fund's portfolio
securities will result in relatively high transaction costs and may result in
taxable capital gains.

o PRINCIPAL RISKS.

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

o CONVERTIBLE SECURITIES RISK. The Fund may invest in preferred stocks that
are convertible into common stocks, and so subject to the risks of
investments in both preferred and common stocks.

o EQUITY MARKETS RISK. A risk of investing in the Fund is the risk that the
value of the equity securities in the portfolio will fall, or will not
appreciate as anticipated by the Fund's sub-adviser, due to factors that
adversely affect North American equities markets generally or particular
companies in the portfolio. The values of equity securities fluctuate in
response to issuer, political, market, and economic developments. Equity
prices can fluctuate dramatically over short time periods in response to
these developments. Different parts of the market and different types of
equity securities can react differently to these developments. For example,
large capitalization stocks can react differently from small capitalization
stocks, and "growth" stocks can react differently from "value" stocks.
Issuer, political, or economic developments can affect a single issuer,
issuers within an industry or economic sector or geographic region, or the
market as a whole.

o MANAGEMENT RISK. Because the Fund is actively managed, its investment
return depends on the ability of its sub-adviser to manage its portfolio
successfully. There can be no assurance that the sub-adviser's use of the
quantitative analysis described above will produce a portfolio that will
achieve long-term capital growth or that the Fund's sub-adviser will
interpret or implement the results of any quantitative analysis in a manner
that will result in long-term capital growth. In addition, to the extent
that the sub-adviser adjusts the Fund's portfolio to take advantage of
short-term deviations from longer-term historical trends and cycles, there
can be no assurance that such deviations will in fact occur or that the
Fund's portfolio will be positioned optimally to take advantage of them.

o SMALL AND MID CAP COMPANIES RISK. Small and mid cap companies tend to be
more vulnerable to adverse developments than larger companies. The Fund may
invest in micro-cap companies, which tend to be particularly sensitive to
the risks associated with small companies. Small and mid cap companies may
have limited product lines, markets, or financial resources, or may depend
on a limited management group. Their securities may trade less frequently
and in limited volumes. As a result, the prices of these securities may
fluctuate more than the prices of securities of larger, more widely traded
companies. Also, there may be less publicly available information about
small and mid cap companies or less market interest in their securities as
compared to larger companies, and it may take longer for the price of the
securities to reflect the full value of their issuers' earnings potential
or assets.

o GEOGRAPHIC FOCUS RISK. Because the Fund invests principally in equity
securities of North American companies, its performance may at times be
worse than the performance of other mutual funds that invest more broadly.

o LIQUIDITY RISK. The Fund may find it difficult to sell or to close out
certain investments at favorable prices or times. Illiquid securities may
be highly volatile and difficult to value.

o FREQUENT TRADING/PORTFOLIO TURNOVER RISK. Frequent trading of the Fund's
portfolio securities will result in relatively high transaction costs and
may result in taxable capital gains. The Fund's sub-adviser currently
expects that the portfolio turnover rate for the Fund's current fiscal year
will be approximately 160%.

Performance Information.

[GRAPHIC OMITTED]

11.61% 7.01%
2004 2005

During the periods shown above, the highest quarterly return was 9.30% for the
quarter ended December 31, 2004, and the lowest was -1.40% for the quarter ended
March 31, 2005.

AVERAGE ANNUAL TOTAL RETURNS Life of Fund
(FOR THE PERIOD ENDED DECEMBER 31, 2005) One Year (Since September 17, 2003)
---------------------------------------- -------- --------------------------
Return Before Taxes 7.01% 12.43%
Return After Taxes on Distributions (1) 5.36% 10.59%
Return After Taxes on Distributions and
Sale of Fund Shares (1) 5.49% 9.79%
FTSE North American Index (2) (reflects
no deduction for fees, expenses or
taxes) 7.45% 12.48%
S&P 500 Index (3) 4.91% 10.90%

(1) After tax returns are estimated using the highest historical individual
federal margin income tax rates and do not reflect the impact of state and
local taxes. Actual after-tax returns depend on an investor's tax situation
and may differ from those shown. After-tax returns are not relevant to
investors who hold their shares in the Fund through tax-deferred
arrangements, such as 401(k) plans or individual retirement accounts. In
some cases, the return after taxes may exceed the return before taxes due
to an assumed tax benefit from any losses on a sale of Fund shares at the
end of the measurement period.

(2) The FTSE North American Index is a market capitalization value weighted
composite index of over 700 U.S. and Canadian companies and reflects the
reinvestment of dividends.

(3) The S&P 500 Index is a market capitalization value weighted composite index
of 500 large capitalization U.S. companies and reflects the reinvestment of
dividends.

PAST PERFORMANCE (BEFORE AND AFTER TAXES) IS NOT NECESSARILY AN INDICATION OF
FUTURE PERFORMANCE. It is possible to lose money on an investment in a Fund.

SCHRODER U.S. OPPORTUNITIES FUND

o INVESTMENT OBJECTIVE. To seek capital appreciation.

o PRINCIPAL INVESTMENT STRATEGIES. In selecting investments for the Fund, the
Fund's adviser seeks to identify securities of companies that it believes offer
the potential for capital appreciation, based on novel, superior or niche
products or services, operating characteristics, quality of management, an
entrepreneurial management team, their having gone public in recent years,
opportunities provided by mergers, divestitures or new management, or other
factors.

The Fund may invest in common and preferred stocks, securities convertible into
common and preferred stocks and real estate investment trusts ("REITs"). Under
current market conditions, the Fund expects to invest primarily in equity
securities of small and micro capitalization companies in the United States. The
Fund's adviser considers small capitalization companies to be companies that
have market capitalizations of $2.2 billion or less, and micro-capitalization
companies to be companies with market capitalizations of $500 million or less,
measured at the time of investment. However, the Fund may invest any portion of
its assets in equity securities of larger companies. The Fund may also invest in
securities of companies outside the United States, although the Fund will
normally invest at least 80% of its net assets in securities of companies the
Fund's adviser considers to be located in the United States. The Fund will
consider an issuer located in the United States if it is organized under the
laws of the United States or any state of the United States and is principally
traded in the United States, or is domiciled and has its principal place of
business located in the United States and is principally traded in the United
States, or if the Fund's adviser determines that the issuer has more than 50% of
its assets in or derives more than 50% of its revenues from the United States.
The Fund generally sells securities when the Fund's adviser believes they are
fully priced or when more attractive investment candidates become available. The
Fund may purchase securities offered in initial public offerings.

The Fund may use options (puts and calls) for hedging purposes, or to gain
exposure to securities or market sectors as a substitute for cash investments
(not for leverage) or pending the sale of securities by the Fund and
reinvestment of the proceeds. Any use of derivatives strategies entails the
risks of investing directly in the securities or instruments underlying the
derivatives strategies, as well as the risks of using derivatives generally,
described in this Prospectus and in the SAI.

o PRINCIPAL RISKS.

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

o SMALL COMPANIES RISK. Small companies tend to be more vulnerable to
adverse developments than larger companies. The Fund may invest in
micro-cap companies, which tend to be particularly sensitive to the risks
associated with small companies. Small companies may have limited product
lines, markets, or financial resources, or may depend on a limited
management group. Their securities may trade less frequently and in limited
volumes. As a result, the prices of these securities may fluctuate more
than the prices of securities of larger, more widely traded companies.
Also, there may be less publicly available information about small
companies or less market interest in their securities as compared to larger
companies, and it may take longer for the price of the securities to
reflect the full value of their issuers' earnings potential or assets.

o CONVERTIBLE SECURITIES RISK. The Fund may invest in preferred stocks that
are convertible into common stocks, and so subject to the risks of
investments in both preferred and common stocks.

o REAL ESTATE INVESTMENT TRUST RISK. An investment in a real estate
investment trust ("REIT") may be subject to risks similar to those
associated with direct ownership of real estate, including losses from
casualty or condemnation, and changes in local and general economic
conditions, supply and demand, interest rates, zoning laws, regulatory
limitations on rents, property taxes and operating expenses. In addition,
an investment in a REIT is subject to additional risks, such as poor
performance by the manager of the REIT, adverse changes to the tax laws or
failure by the REIT to qualify for tax-free pass-through of income under
the Internal Revenue Code of 1986, as amended (the "Code"). In addition,
some REITs have limited diversification because they invest in a limited
number of properties, a narrow geographic area, or a single type of
property. Also, the organizational documents of a REIT may contain
provisions that make changes in control of the REIT difficult and
time-consuming. As a shareholder in a REIT a Fund, and indirectly the
Fund's shareholders, would bear its ratable share of the REIT's expenses
and would at the same time continue to pay its own fees and expenses.

o INITIAL PUBLIC OFFERINGS (IPOS) RISK. The Fund may purchase securities of
companies in initial public offerings of their securities, either in the
initial offering itself or shortly after the initial offering. Such
investments are subject generally to the risks described above under "Small
Companies Risk." Such securities have no trading history, and information
about such companies may be available for very limited periods. Under
certain market conditions, very few companies, if any, may determine to
make initial public offerings of their securities. At any particular time
or from time to time the Fund may not be able to invest in securities
issued in IPOs or invest to the extent desired. The investment performance
of the Fund during periods when it is unable to invest significantly or at
all in initial public offerings may be lower than during periods when the
Fund is able to do so. The prices of securities sold in initial public
offerings can be highly volatile.

o ISSUER FOCUS RISK. The Fund may invest in a smaller number of companies
than comprise the portfolios of other similar mutual funds. When the Fund
invests in a relatively small number of issuers, changes in the value of
one or more portfolio securities may have a greater effect on the Fund than
if the Fund invested more broadly.

o GEOGRAPHIC FOCUS RISK. Because the Fund invests principally in equity
securities of U.S. companies, its performance may at times be worse than
performance of other mutual funds that invest more broadly.

o LIQUIDITY RISK. The Fund may find it difficult to sell or to close out
certain investments at favorable prices or times. Illiquid securities may
be highly volatile and difficult to value.

o MANAGEMENT RISK. Because the Fund is actively managed, its investment
return depends on the ability of its adviser to manage its portfolio
successfully. The Fund's adviser and the portfolio manager will apply
investment techniques and risk analyses in making investment decisions for
the Fund, but there can be no guarantee that these will produce the desired
results.

o OVER-THE-COUNTER RISK. Securities traded in over-the-counter markets may
trade in smaller volumes, and their prices may be more volatile, than
securities principally traded on securities exchanges. Such securities may
be less liquid than more widely traded securities. In addition, the prices
of such securities may include an undisclosed dealer markup, which the Fund
pays as part of the purchase price.

Performance Information. (1)

22.29% 26.86% -9.23% 13.10% 31.22% 11.56% -18.87% 37.14% 25.29% 6.42%
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

(1) Effective May 1, 2006, the combined advisory and administrative fees of the
Fund increased to 1.00% per annum. If the Fund had paid such higher fees during
the periods shown above, the returns shown above and in the table below would
have been lower. See "Management of the Funds - Management Fees."

During the periods shown above, the highest quarterly return was 18.60% for the
quarter ended June 30, 1997, and the lowest was -23.27% for the quarter ended
September 30, 1998.

AVERAGE ANNUAL TOTAL RETURNS+
(FOR THE PERIOD ENDED DECEMBER 31, 2005 One Year Five Years Ten Years
--------------------------------------- -------- ---------- ---------
Return Before Taxes 6.42% 10.60% 13.21%
Return After Taxes on Distributions (1) 5.85% 9.49% 10.46%
Return After Taxes on Distributions and
Sale of Fund Shares (1) 4.96% 8.80% 10.02%
Russell 2000 Index (2) (reflects no
deduction for fees, expenses or
taxes) 4.55% 8.22% 9.26%

(2) The Russell 2000 Index is a market capitalization weighted broad based index
of 2000 small capitalization U.S. companies.

+ The current portfolio manager primarily responsible for making investment
decisions for the Fund assumed this responsibility effective January 1, 2003.
The performance results shown in the bar chart and table above for periods prior
to January 1, 2003 were achieved by the Fund under a different portfolio
manager.

PAST PERFORMANCE (BEFORE AND AFTER TAXES) IS NOT NECESSARILY AN INDICATION OF
FUTURE PERFORMANCE. It is possible to lose money on an investment in a Fund.

SCHRODER U.S. SMALL AND MID CAP OPPORTUNITIES FUND

o INVESTMENT OBJECTIVE. To seek capital appreciation.

o PRINCIPAL INVESTMENT STRATEGIES. The Fund invests primarily in companies in
the United States (determined as described below) that the Fund's adviser
considers to be small or mid cap companies. In selecting investments for the
Fund, the Fund's adviser seeks to identify securities of companies that it
believes offer the potential for capital appreciation, based on novel, superior,
or niche products or services, operating characteristics, quality of management,
an entrepreneurial management team, their having gone public in recent years,
opportunities provided by mergers, divestitures, new management, or other
factors. These factors generally apply to all investments made by the Fund,
including initial public offerings, although the Fund may also invest in certain
initial public offerings that the portfolio manager believes will be in high
demand. The Fund may sell a security when the Fund's adviser believes it is
fully priced or when investments become available that it believes are more
attractive.

The Fund normally invests at least 80% of its net assets in companies considered
by the Fund's adviser at the time to be small or mid cap companies located in
the United States. The Fund's adviser currently considers a company to be a
small or mid cap company if the company has a market capitalization (at the time
of purchase) of between $1 billion and $7 billion. The Fund may also invest in
equity securities of micro-cap companies or larger companies, if the Fund's
adviser believes they offer the potential for capital appreciation. The Fund
invests in common and preferred stocks, convertible preferred stocks, warrants
to purchase common and preferred stocks, and REITs. The Fund may purchase
securities on securities exchanges as well as over-the-counter, and may also
purchase securities offered in initial public offerings. The Fund may use
options for hedging purposes, or to gain exposure to securities or market
sectors as a substitute for cash investments (not for leverage) or pending the
sale of securities by the Fund and reinvestment of the proceeds. Any use of
derivatives strategies entails the risks of investing directly in the securities
or instruments underlying the derivatives strategies, as well as the risks of
using derivatives generally, described in this Prospectus and in the SAI.

The Fund's adviser will consider an issuer located in the United States if it is
organized under the laws of the United States or any state of the United States
and is principally traded in the United States, or is domiciled or has its
principal place of business located in the United States and is principally
traded in the United States, or if the Fund's adviser determines that the issuer
has more than 50% of its assets in or derives more than 50% of its revenues from
the United States.

o PRINCIPAL RISKS.

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

and mid cap companies or less market interest in their securities as
compared to larger companies, and it may take longer for the price of the
securities to reflect the full value of their issuers' earnings potential
or assets.

o CONVERTIBLE SECURITIES RISK. The Fund may invest in preferred stocks that
are convertible into common stocks, and so subject to the risks of
investments in both preferred and common stocks.

developments. For example, large capitalization stocks can react
differently from small capitalization stocks, and "growth" stocks can react
differently from "value" stocks. Issuer, political, or economic
developments can affect a single issuer, issuers within an industry or
economic sector or geographic region, or the market as a whole.

o LIQUIDITY RISK. The Fund may find it difficult to sell or to close out
certain investments at favorable prices or times. Illiquid securities may
be highly volatile and difficult to value.

o MANAGEMENT RISK. Because the Fund is actively managed, its investment
return depends on the ability of its adviser to manage its portfolio
successfully. The Fund's adviser and the investment team will apply
investment techniques and risk analyses in making investment decisions for
the Fund, but there can be no guarantee that these will produce the desired
results.

Performance Information. The Fund recently commenced operations and does not yet
have historical investment performance. For performance information with respect
to other investment accounts managed by the Fund's adviser, see the SAI.

SCHRODER ENHANCED INCOME FUND

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

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

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

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

o debt securities of domestic or foreign corporations;

o mortgage-backed and other asset-backed securities;

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

o obligations of international agencies or supranational entities;

o commercial paper and master demand notes;

o preferred securities; and

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

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

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

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

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

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

The Fund may enter into interest rate futures and options, interest rate swap
agreements, and credit default swaps. (A derivative instrument will be
considered to be an

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

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

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

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

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

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

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

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

o PRINCIPAL RISKS.

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

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

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

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

o EXTENSION RISK. During periods of rising interest rates, the average life
of certain types of securities may be extended because of slower than
expected principal payments. This may lock in a below-market interest rate,
increase the security's duration, and reduce the value of the security.

o MORTGAGE AND ASSET-BACKED SECURITIES RISK. Mortgage-backed and
asset-backed investments tend to increase in value less than other debt
securities when interest rates decline, but are subject to similar risk of
decline in market value during periods of rising interest rates. The values
of mortgage-backed and asset-backed securities become more volatile as
interest rates rise. In a period of declining interest rates, the Fund may
be required to reinvest more frequent prepayments on mortgage-backed and
asset-backed investments in lower-yielding investments. Asset-backed
securities in which the Fund invests may have underlying assets that
include motor vehicle installment sales or installment loan contracts,
leases of various types of real and personal property and receivables from
credit card agreements. Like mortgages underlying mortgage-backed
securities, underlying automobile sales contracts or credit card
receivables are subject to prepayment, which may reduce the overall return
to certificate holders. Certificate holders may also experience delays in
payment on the certificates if the full amounts due on underlying sales
contracts or receivables are not realized by the trust because of
unanticipated legal or administrative costs of enforcing the contracts or
because of depreciation or damage to the collateral (usually automobiles)
securing certain contracts, or other factors.

o U.S. GOVERNMENT SECURITIES RISK. Securities issued or guaranteed by
certain agencies and instrumentalities of the U.S. Government are not
supported by the full faith and credit of the United States. For example,
mortgage-backed bonds issued by Fannie Mae or Freddie Mac are backed only
by the credit of those issuers. Investments in these securities are also
subject to interest rate risk (as described above under "Interest Rate
Risk"), prepayment risk (as described above under "Mortgage and
Asset-Backed Securities Risk"), extension risk (as described above under
"Extension Risk"), and the risk that the value of the securities will
fluctuate in response to political, market, or economic developments.

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

o MANAGEMENT RISK. Because the Fund is actively managed, its investment
return depends on the ability of its adviser to manage its portfolio
successfully. The Fund's adviser and the investment team will apply
investment techniques and risk analyses in making investment decisions for
the Fund, but there can be no guarantee that these will produce the desired
results.

Performance Information.

[GRAPHIC OMITTED]

2.92%
2005

During the period shown above, the highest quarterly return was 0.95% for the
quarter ended June 30, 2005, and the lowest was 0.47% for the quarter ended
March 31, 2005.

AVERAGE ANNUAL TOTAL RETURNS One Year
(FOR THE PERIOD ENDED DECEMBER 31, 2005) (Life of Fund)
---------------------------------------- --------------
Return Before Taxes 2.92%
Return After Taxes on Distributions (1) 1.75%
Return After Taxes on Distributions and
Sale of Fund Shares (1) 1.89%
LIBOR 3 Month USD Fixed Index (2)
(reflects no deduction for fees,
expenses or taxes) 3.64%

(1) After tax returns are estimated using the highest historical
individual federal margin income tax rates and do not reflect the
impact of state and local taxes. Actual after-tax returns depend on an
investor's tax situation and may differ from those shown. After-tax
returns are not relevant to investors who hold their shares in the
Fund through tax-deferred arrangements, such as 401(k) plans or
individual retirement accounts. In some cases, the return after taxes
may exceed the return before taxes due to an assumed tax benefit from
any losses on a sale of Fund shares at the end of the measurement
period.

(2) The LIBOR 3 Month USD Fixed Index is a broad-based basket of U.S. debt
securities.

PAST PERFORMANCE (BEFORE AND AFTER TAXES) IS NOT NECESSARILY AN INDICATION OF
FUTURE PERFORMANCE. It is possible to lose money on an investment in a Fund.

SCHRODER TOTAL RETURN FIXED INCOME FUND

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

o PRINCIPAL INVESTMENT STRATEGIES. The Schroder Total Return Fixed Income
Fund (formerly, Schroder U.S. Core Fixed Income Fund) normally invests at
least 80% of its net assets in fixed income obligations of issuers located
in the United States, which may include, for example:

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

o debt securities of domestic or foreign corporations;

o mortgage-backed and other asset-backed securities;

o taxable and tax-exempt municipal bonds;

o obligations of international agencies or supranational entities;

o debt securities convertible into equity securities;

o inflation-indexed bonds;

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

o delayed funding loans and revolving credit facilities; and

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

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

Effective on or about August 1, 2006 the Fund's investment policies will change,
and will provide that the Fund will normally invest at least 80% of its net
assets in fixed income obligations, regardless of where the issuer is located.

The Fund will normally invest no more than 20% of its total assets in securities
that are not denominated in the U.S. dollar.

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

The Fund will invest principally in securities of "investment grade" at the time
of purchase, meaning either that a nationally recognized statistical rating
organization (for example, Moody's Investor Service, Inc., Standard & Poor's
Rating Service, or Fitch Investors Service, Inc.) has rated the securities Baa3
or BBB- (or the equivalent) or better, or the adviser has determined the
securities to be of comparable quality. The Fund may invest up to 20% of its
total assets in securities rated below "investment grade" (or, if unrated,
determined by the Fund's adviser to be of comparable quality), sometimes
referred to as

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

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

The Fund may enter into interest rate futures and options, interest rate swap
agreements and credit default swaps. (A derivative instrument will be considered
to be a fixed income security if it is itself a fixed income security or, in the
adviser's judgment, it may provide an investment return comparable to the return
that might be provided by a fixed income

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

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

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

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

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

o exploits inefficiencies in the valuation of risk and reward;

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

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

o PRINCIPAL RISKS.

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

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

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

o EXTENSION RISK. During periods of rising interest rates, the average
life of certain types of securities may be extended because of slower
than expected principal payments. This may lock in a below-market interest
rate, increase the security's duration, and reduce the value of the security.

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

o MORTGAGE AND ASSET-BACKED SECURITIES RISK. Mortgage-backed and
asset-backed investments tend to increase in value less than other
debt securities when interest rates decline, but are subject to
similar risk of decline in market value during periods of rising
interest rates. The values of mortgage-backed and asset-backed
securities become more volatile as interest rates rise. In a period of
declining interest rates, the Fund may be required to reinvest more
frequent prepayments on mortgage-backed and asset-backed investments
in lower-yielding investments. Asset-backed securities in which the
Fund invests may have underlying assets that include motor vehicle
installment sales or installment loan contracts, leases of various
types of real and personal property and receivables from credit card
agreements. Like mortgages underlying mortgage-backed securities,
underlying automobile sales contracts or credit card receivables are
subject to prepayment, which may reduce the overall return to
certificate holders. Certificate holders may also experience delays in
payment on the certificates if the full amounts due on underlying
sales contracts or receivables are not realized by the trust because
of unanticipated legal or administrative costs of enforcing the
contracts or because of depreciation or damage to the collateral
(usually automobiles) securing certain contracts, or other factors.

o U.S. GOVERNMENT SECURITIES RISK. Securities issued or guaranteed by
certain agencies and instrumentalities of the U.S. Government are not
supported by the full faith and credit of the United States. For
example, mortgage-backed bonds issued by Fannie Mae or Freddie Mac are
backed only by the credit of those issuers. Investments in these
securities are also subject to interest rate risk (as described above
under "Interest Rate Risk"), prepayment risk (as described above under
"Mortgage and Asset-Backed Securities Risk"), extension risk (as
described above under "Extension Risk"), and the risk that the value
of the securities will fluctuate in response to political, market, or
economic developments.

o FOREIGN INVESTMENT RISK. Adverse political, regulatory, market, or
economic developments in foreign countries can affect issuers located
in those countries. Investments in foreign countries may also be
subject to foreign withholding taxes.

o FOREIGN CURRENCY RISK. Investments in foreign securities are normally
denominated and traded in foreign currencies. The value of the Fund's
assets may be affected favorably or unfavorably by currency exchange
rates, currency exchange control regulations, and restrictions or
prohibitions on the repatriation of foreign currencies.

of markets or legal systems available in more developed countries.
Emerging market countries may experience extremely high levels of
inflation, which may adversely affect those countries' economies,
currencies, and securities markets. Also, emerging market issuers are
often smaller and less well-known than larger, more widely held
companies, and involve certain special risks associated with smaller
capitalization companies.

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

o CONVERTIBLE SECURITIES RISK. The Fund may invest in convertible
securities, which are corporate debt securities that may be converted
at either a stated price or stated rate into underlying shares of
common stock, and so subject to the risks of investments in both debt
securities and equity securities.

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

o HIGH-YIELD/JUNK BONDS RISK. Securities rated below investment grade
("high-yield bonds" or "junk bonds") lack outstanding investment
characteristics and have speculative characteristics and are subject
to greater credit and market risks than higher-rated securities. The
lower ratings of junk bonds reflect a greater possibility that adverse
changes in the financial condition of the issuer or in general
economic conditions, or an unanticipated rise in interest rates, may
impair the ability of the issuer to make payments of interest and
principal. If this were to occur, the values of such securities held
by the Fund may become more volatile.

o MANAGEMENT RISK. Because the Fund is actively managed, its investment
return depends on the ability of its adviser to manage its portfolio
successfully. The Fund's adviser and the investment team will apply
investment techniques and risk analyses in making investment decisions
for the Fund, but there can be no guarantee that these will produce
the desired results.

Performance Information.

[GRAPHIC OMITTED]

3.08%
2005

During the period shown above, the highest quarterly return was 3.20% for the
quarter ended June 30, 2005, and the lowest was -0.82% for the quarter ended
September 30, 2005.

AVERAGE ANNUAL TOTAL RETURNS One Year
(FOR THE PERIOD ENDED DECEMBER 31,2005) (Life of Fund)
--------------------------------------- --------------
Return Before Taxes 3.08%
Return After Taxes on Distributions (1) 1.60%
Return After Taxes on Distributions and
Sale of Fund Shares (1) 1.99%
Lehman US Aggregate Bond Index (2)
(reflects no deduction for fees,
expenses or taxes) 2.43%

(1) After tax returns are estimated using the highest historical
individual federal margin income tax rates and do not reflect the
impact of state and local taxes. Actual after-tax returns depend on an
investor's tax situation and may differ from those shown. After-tax
returns are not relevant to investors who hold their shares in the
Fund through tax-deferred arrangements, such as 401(k) plans or
individual retirement accounts. In some cases, the return after taxes
may exceed the return before taxes due to an assumed tax benefit from
any losses on a sale of Fund shares at the end of the measurement
period.

(2) The Lehman US Aggregate Bond Index is a widely used measure of
short-term debt returns. It is not managed.

PAST PERFORMANCE (BEFORE AND AFTER TAXES) IS NOT NECESSARILY AN INDICATION OF
FUTURE PERFORMANCE. It is possible to lose money on an investment in a Fund.

SCHRODER MUNICIPAL BOND FUND

o INVESTMENT OBJECTIVE. To seek a high level of current income exempt from
federal income tax, consistent with the preservation of capital.

o PRINCIPAL INVESTMENT STRATEGIES. The Fund invests primarily in municipal
bonds that:

o pay interest that is exempt from federal income tax (but which may be
subject to federal alternative minimum tax);

o are investment grade in quality; and

o have intermediate to long-term effective maturities (three years or
longer) (a bond's effective maturity is generally shorter than its
stated maturity due to several factors, including, for example,
prepayment patterns, call dates, and put features).

"Municipal bonds" are debt obligations of any maturity issued by a state, its
political subdivisions (for example, counties, cities, towns, villages,
districts, and authorities), and their agencies, instrumentalities, or other
governmental units, the interest from which is, in the opinion of bond counsel,
exempt from federal income tax.

The Fund's adviser considers a security "investment grade" if either a
nationally recognized statistical rating organization (for example, Moody's
Investor Service, Inc., Standard & Poor's Rating Service, or Fitch Investors
Service, Inc.) has rated the securities Baa3 or BBB- (or the equivalent) or
better, or the adviser has determined the securities to be of comparable
quality. In the event that different nationally recognized statistical ratings
organizations have given different ratings to securities owned by the Fund, the
higher rating will be used. The Fund's adviser expects that a significant
portion of the securities in which the Fund invests will not be rated by a
nationally recognized statistical rating organization, but the credit quality
will be determined by the adviser.

The Fund intends to maintain a dollar weighted average effective portfolio
maturity of five to ten years, although it may invest in securities of any
maturity. Under normal circumstances, the Fund invests at least 80% of its net
assets in municipal bonds. As a matter of fundamental policy, under normal
circumstances, the Fund invests at least 80% of its net assets in investments
the income from which is exempt from federal income tax, but which may be
subject to federal alternative minimum tax (AMT). The Fund may invest the
remainder of its assets in taxable municipal bonds, securities issued by the
U.S. Treasury, or in taxable money market obligations. The Fund may purchase
securities on a delayed delivery or when-issued basis.

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

The Fund's adviser allocates the Fund's assets among different issuers, states,
market sectors (for example, general obligation securities of specific states or
securities financing specific projects), and maturities based on its view of
their relative values.

The Fund may invest more than 25% of its assets in one or more sectors of the
municipal bond market - that is, in a group of issuers that finance similar
projects - including education, health care, housing, transportation, and
utilities sectors or in obligations of issuers in any state. In managing the
Fund, the Fund's adviser generally relies on detailed proprietary research. The
Fund's adviser focuses on the securities and sectors it believes are undervalued
relative to the market, rather than relying on interest rate forecasts.

In selecting individual securities for investment, the Fund's adviser typically:

o assigns a relative value, based on creditworthiness, cash flow,
liquidity, and price, to each bond;

o uses in-depth credit analysis to determine the issuer's ability to
fulfill its obligations;

o compares each bond with a pre-refunded or escrowed to maturity
municipal bond to develop a theoretical intrinsic value;

o looks to exploit any inefficiencies between intrinsic value and market
trading price; and

o subordinates sector weightings to individual securities that may be
undervalued.

The Fund's adviser may sell a security for the Fund if the security reaches the
adviser's target price or if the adviser's credit outlook for the security has
deteriorated. The Fund's adviser may also sell a security to facilitate the
purchase of a security it believes is more attractive for the Fund. Because the
Fund's adviser devotes substantial independent research to the selection of the
Fund's investments, the Fund will likely hold a number of investments that are
not generally held by other mutual funds.

o PRINCIPAL RISKS.

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

o VOLATILITY OF THE MUNICIPAL BOND MARKET RISK. The municipal bond
market is volatile and can be significantly affected by adverse tax,
legislative, or political changes and the financial condition of the
issuers of municipal bonds.

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

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

o EXTENSION RISK. During periods of rising interest rates, the average
life of certain types of securities may be extended because of slower
than expected principal payments. This may lock in a below-market
interest rate, increase the security's duration, and reduce the value
of the security.

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

o STATE AND ISSUER RISK. Investing in bonds issued by a state or by
state agencies or political subdivisions in the same state may make
the Fund more vulnerable to that state's economy and to issues
affecting its municipal bond issuers. Geographic or sector
concentration may cause the value of the Fund's shares to change more
than the value of shares of funds that invest in a greater variety of
investments. The Fund may also invest a substantial portion of its
assets in a particular issue, and to that extent the Fund's investment
performance and net asset value will be adversely affected by a
decrease in the value of that issue more than if such Fund invested in
a greater number of securities.

o U.S. GOVERNMENT SECURITIES RISK. Securities issued or guaranteed by certain
agencies and instrumentalities of the U.S. Government are not supported by
the full faith and credit of the United States. For example,
mortgage-backed bonds issued by Fannie Mae or Freddie Mac are backed only
by the credit of those issuers. Investments in these securities are also
subject to interest rate risk (as described above under "Interest Rate
Risk"), extension risk (as described above under "Extension Risk"), and the
risk that the value of the securities will fluctuate in response to
political, market, or economic developments.

o MANAGEMENT RISK. Because the Fund is an actively managed, its investment
return depends on the ability of its adviser to manage its portfolio
successfully. The adviser and the Fund's portfolio managers will apply
investment techniques and risk analyses in making investment decisions for
the Fund, but there can be no guarantee that these will produce the desired
results.

Performance Information.

[GRAPHIC OMITTED]

3.70% 3.07%
2004 2005

During the periods shown above, the highest quarterly return was 3.12% for the
quarter ended September 30, 2004, and the lowest was -1.70% for the quarter
ended June 30, 2004.

AVERAGE ANNUAL TOTAL RETURNS Life of the Fund
(FOR THE PERIOD ENDED DECEMBER 31, 2005) One Year (Since December 31, 2003)
---------------------------------------- -------- -------------------------
Return Before Taxes 3.07% 3.39%
Return After Taxes on Distributions (1) 2.83% 3.24%
Return After Taxes on Distributions and
Sale of Fund Shares (1) 3.08% 3.23%
Lehman 5-Year Municipal Bond Index (2)
(reflects no deduction for fees, 0.95% 1.82%
expenses or taxes)

(1) After tax returns are estimated using the highest historical
individual federal margin income tax rates and do not reflect the
impact of state and local taxes. Actual after-tax returns depend on an
investor's tax situation and may differ from those shown. After-tax
returns are not relevant to investors who hold their shares in the
Fund through tax-deferred arrangements, such as 401(k) plans or
individual retirement accounts. In some cases, the return after taxes
may exceed the return before taxes due to an assumed tax benefit from
any losses on a sale of Fund shares at the end of the measurement
period.

(2) The Lehman 5-Year Municipal Bond Index is a rules-based,
market-value-weighted unmanaged index of debt obligations issued by
municipalities with an approximate maturity of five years.

PAST PERFORMANCE (BEFORE AND AFTER TAXES) IS NOT NECESSARILY AN INDICATION OF
FUTURE PERFORMANCE. It is possible to lose money on an investment in a Fund.

SCHRODER SHORT-TERM MUNICIPAL BOND FUND

o INVESTMENT OBJECTIVE. To seek a high level of income exempt from federal
income tax, consistent with the preservation of capital.

o PRINCIPAL INVESTMENT STRATEGIES. The Fund invests primarily in municipal
bonds that:

o pay interest that is exempt from federal income tax (but which may be
subject to federal alternative minimum tax);

o are investment grade in quality; and

o have effective maturities of no more than three years (a bond's
effective maturity is generally shorter than its stated maturity due
to several factors, including, for example, prepayment patterns, call
dates, and put features).

The Fund intends to maintain a dollar weighted average effective portfolio
maturity of not more than three years, although it may invest in securities of
any maturity. Under normal circumstances, the Fund invests at least 80% of its
net assets in municipal bonds. As a matter of fundamental policy, under normal
circumstances, the Fund invests at least 80% of its net assets in investments
the income from which is exempt from federal income tax, but which may be
subject to federal alternative minimum tax (AMT). The Fund may invest the
remainder of its assets in taxable municipal bonds, securities issued by the
U.S. Treasury, or in taxable money market obligations. The Fund may purchase
securities on a delayed delivery or when issued basis.

In selecting individual securities for investment, the Fund's adviser typically:

o assigns a relative value, based on creditworthiness, cash flow,
liquidity, and price, to each bond;

o uses in-depth credit analysis to determine the issuer's ability to
fulfill its obligations;

o compares each bond with a pre-refunded or escrowed to maturity
municipal bond to develop a theoretical intrinsic value;

o looks to exploit any inefficiencies between intrinsic value and market
trading price; and

o subordinates sector weightings to individual securities that may be
undervalued.

The Fund's adviser may sell a security for the Fund if the security reaches the
adviser's target price or if the adviser's credit outlook for the security has
deteriorated. The Fund's adviser may also sell a security to facilitate the
purchase of a security it believes is more attractive for the Fund. Because the
Fund's adviser devotes substantial independent research to the selection of the
Funds' investments, the Fund will likely hold a number of investments that are
not generally held by other mutual funds.

o PRINCIPAL RISKS.

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

o VOLATILITY OF THE MUNICIPAL BOND MARKET. The municipal bond market is
volatile and can be significantly affected by adverse tax,
legislative, or political changes and the financial condition of the
issuers of municipal bonds.

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

o EXTENSION RISK. During periods of rising interest rates, the average
life of certain types of securities may be extended because of slower
than expected principal payments. This may lock in a below-market
interest rate, increase the security's duration, and reduce the value
of the security.

o STATE AND ISSUER RISK. Investing in bonds issued by a state or by
state agencies or political subdivisions in the same state may make a
Fund more vulnerable to that state's economy and to issues affecting
its municipal bond issuers. Geographic or sector concentration may
cause the value of the Fund's shares to change more than the value of
shares of funds that invest in a greater variety of investments. The
Fund may also invest a substantial portion of its assets in a
particular issue, and to that extent the Fund's investment performance
and net asset value will be adversely affected by a decrease in the
value of such issue more than if such Fund invested in a greater
number of securities.

o U.S. GOVERNMENT SECURITIES RISK. Securities issued or guaranteed by
certain agencies and instrumentalities of the U.S. Government are not
supported by the full faith and credit of the United States. For
example, mortgage-backed bonds issued by Fannie Mae or Freddie Mac are
backed only by the credit of those issuers. Investments in these
securities are also subject to interest rate risk (as described above
under "Interest Rate Risk"), extension risk (as described above under
"Extension Risk"), and the risk that the value of the securities will
fluctuate in response to political, market, or economic developments.

o MANAGEMENT RISK. Because the Fund is actively managed, its investment
return depends on the ability of its adviser to manage its portfolio
successfully. The adviser and the Fund's portfolio managers will apply
investment techniques and risk analyses in making investment decisions
for the Fund, but there can be no guarantee that these will produce
the desired results.

Performance Information.

[GRAPHIC OMITTED]

1.79% 2.52%
2004 2005

During the periods shown above, the highest quarterly return was 1.36% for the
quarter ended September 30, 2004, and the lowest was -0.84% for the quarter
ended June 30, 2004.

AVERAGE ANNUAL TOTAL RETURNS Life of the Fund
(FOR THE PERIOD ENDED DECEMBER 31, 2005) One Year (Since December 31, 2003)
---------------------------------------- -------- --------------------------
Return Before Taxes 2.52% 2.15%
Return After Taxes on Distributions (1) 2.31% 2.02%
Return After Taxes on Distributions and
Sale of Fund Shares (1) 2.52% 2.08%
Lehman 1-Year Municipal Bond Index (2)
(reflects no deduction for fees,
expenses or taxes) 1.49% 1.28%

(1) After tax returns are estimated using the highest historical
individual federal margin income tax rates and do not reflect the
impact of state and local taxes. Actual after-tax returns depend on an
investor's tax situation and may differ from those shown. After-tax
returns are not relevant to investors who hold their shares in the
Fund through tax-deferred arrangements, such as 401(k) plans or
individual retirement accounts. In some cases, the return after taxes
may exceed the return before taxes due to an assumed tax benefit from
any losses on a sale of Fund shares at the end of the measurement
period.

(2) The Lehman 1-Year Municipal Bond Index is a rules-based,
market-value-weighted index of debt obligations issued by
municipalities with short term maturities.

PAST PERFORMANCE (BEFORE AND AFTER TAXES) IS NOT NECESSARILY AN INDICATION OF
FUTURE PERFORMANCE. It is possible to lose money on an investment in a Fund.

----------

Changes in investment objective and policies. The policies described above
requiring the Funds to invest at least 80% of their net assets in certain
investments may be changed by the Trustees upon at least 60 days' prior written
notice to shareholders. Except for any policy described in this prospectus or in
the SAI as fundamental, the Funds' investment objectives and policies may be
changed by the Trustees without a vote of the shareholders.

FEES AND EXPENSES

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

SHAREHOLDER FEES (paid directly from your investment):

MAXIMUM SALES LOAD IMPOSED ON PURCHASES None
MAXIMUM DEFERRED SALES LOAD None
MAXIMUM SALES LOAD IMPOSED ON REINVESTED DIVIDENDS None
REDEMPTION FEE

Schroder Emerging Market Equity Fund 2.00%(1)
Schroder International Alpha Fund 2.00%(1)
Schroder North American Equity Fund None
Schroder U.S. Opportunities Fund 2.00%(1)
Schroder U.S. Small and Mid Cap Opportunities Fund 2.00%(1)
Schroder Enhanced Income Fund None
Schroder Total Return Fixed Income Fund None
Schroder Municipal Bond Fund None
Schroder Short-Term Municipal Bond Fund None
EXCHANGE FEE None

(1) Shares of this Fund held for two months or less are subject to a redemption
fee of 2.00%.

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

SCHRODER SCHRODER SCHRODER
EMERGING NORTH U.S. SMALL SCHRODER SCHRODER SCHRODER
MARKET SCHRODER AMERICAN SCHRODER U.S. AND MID CAP ENHANCED TOTAL RETURN SCHRODER SHORT-TERM
EQUITY INTERNATIONAL EQUITY OPPORTUNITIES OPPORTUNITIES INCOME FIXED INCOME MUNICIPAL MUNICIPAL
FUND ALPHA FUND(2) FUND FUND(2) FUND FUND FUND BOND FUND BOND FUND
-------- ------------- -------- ------------- ------------- -------- ------------ --------- ----------

Management Fees(1) 1.00% 0.975% 0.25% 1.00% 1.00% 0.25% 0.25% 0.40% 0.40%
Distribution None None None None None None None None None
(12b-1) Fees
Other Expenses 2.14% 3.152% 0.10% 0.40% 1.53% 0.57% 2.80% 0.53% 0.45%
(1)(3)
Total Annual Fund 3.14% 4.127% 0.35% 1.40% 2.53% 0.82% 3.05% 0.93% 0.85%
Operating
Expenses
Less: Fee (1.39)% (2.877)% None None (1.13)% (0.42)% (2.65)% (0.38)% (0.30)%
Waiver and
Expense
Limitation(4)
Net Expenses (4) 1.75% 1.25% 0.35% 1.40% 1.40% 0.40% 0.40% 0.55% 0.55%

(1) Management Fees for each Fund include all fees payable to the Funds'
adviser and its affiliates for investment advisory and fund administration
services. The Funds also pay administrative or sub-administrative fees
directly to SEI Investments Global Fund Services, and those fees are
included under "Other Expenses."

(2) Restated to reflect current fees.

(3) "Other Expenses" for Schroder Emerging Market Equity Fund and Schroder
U.S. Small and Mid Cap Opportunities Fund are based on estimated amounts
for each Fund's current fiscal year.

(4) The "Net Expenses" shown for Schroder Emerging Market Equity Fund,
Schroder International Alpha Fund, Schroder U.S. Small and Mid Cap
Opportunities Fund, Schroder Enhanced Income Fund, Schroder Total Return
Fixed Income Fund, Schroder Municipal Bond Fund, and Schroder Short-Term
Municipal Bond Fund reflect the effect of contractually imposed fee waivers
and/or expense limitations, in effect until February 28, 2007 (March 31,
2007 for the Schroder International Alpha Fund, Schroder Emerging Market
Equity Fund, and Schroder U.S. Small and Mid Cap Opportunities Fund), on
the Total Annual Fund Operating Expenses of each Fund. In order to limit
the expenses of these Funds' Investor Shares, the Funds' adviser has
contractually agreed to reduce its compensation (and, if necessary, to pay
other Fund expenses, other than interest, taxes, and extraordinary
expenses, which may include typically non-recurring expenses such as, for
example, organizational expenses, litigation expenses, and shareholder
meeting expenses) until February 28, 2007 (March 31, 2007 for the Schroder
International Alpha Fund, Schroder U.S. Opportunities Fund, Schroder
Emerging Market Equity Fund, and Schroder U.S. Small and Mid Cap
Opportunities Fund) to the extent that the Total Annual Fund Operating
Expenses of a Fund allocable to its Investor Shares exceed the following
annual rates (based on the average daily net assets attributable to each
Fund's Investor Shares): Schroder Emerging Market Equity Fund - 1.75%;
Schroder International Alpha Fund - 1.25%; Schroder U.S. Opportunities Fund
- 1.70%; Schroder U.S. Small and Mid Cap Opportunities Fund - 1.40%;
Schroder Enhanced Income Fund - 0.40%; Schroder Total Return Fixed Income
Fund - 0.40%; Schroder Municipal Bond Fund - 0.55%; and Schroder Short-Term
Municipal Bond Fund - 0.55%. The fee waiver and/or expense limitations for
the Funds may only be terminated during their term by the Board of
Trustees.

EXAMPLE

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

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

1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
SCHRODER EMERGING MARKET EQUITY FUND(1) $178 $838 N/A N/A
SCHRODER INTERNATIONAL ALPHA FUND(1) $127 $992 $1,871 $4,138
SCHRODER NORTH AMERICAN EQUITY FUND(2) $ 36 $113 $ 197 $ 443
SCHRODER U.S. OPPORTUNITIES FUND(1) $143 $443 $ 766 $1,680
SCHRODER U.S. SMALL AND MID CAP
OPPORTUNITIES FUND(1) $143 $680 N/A N/A
SCHRODER ENHANCED INCOME FUND(2) $ 41 $220 $ 414 $ 974
SCHRODER TOTAL RETURN FIXED INCOME
FUND(2) $ 41 $691 $1,368 $3,177
SCHRODER MUNICIPAL BOND FUND(2) $ 56 $258 $ 478 $1,108
SCHRODER SHORT-TERM MUNICIPAL BOND
FUND(2) $ 56 $241 $ 442 $1,021

(1) The Example assumes that you invest on March 31, 2006 for Schroder
Emerging Market Equity Fund, Schroder International Alpha Fund,
Schroder U.S. Opportunities Fund, and Schroder U.S. Small and Mid Cap
Opportunities Fund. If you invest after these dates your expenses may
be higher due to fee waivers for these funds expiring one year after
such date.

(2) The Example assumes that you invest on February 28, 2006 for Schroder
North American Equity Fund, Schroder Enhanced Income Fund, Schroder
Total Return Fixed Income Fund, Schroder Municipal Bond Fund and
Schroder Short-Term Municipal Bond Fund. If you invest after these
dates your expenses may be higher due to fee waivers for these funds
expiring one year after such date.

PRINCIPAL RISKS OF INVESTING IN THE FUNDS

A Fund may not achieve its objective. The following provides more detail about
certain of the Funds' principal risks and the circumstances which could
adversely affect the value of a Fund's shares or its investment return. Unless a
strategy or policy described below is specifically prohibited by a Fund's
investment restrictions as set forth in this Prospectus or under "Investment
Restrictions" in the Fund's SAI, or by applicable law, a Fund may engage in each
of the practices described below, although only the Funds specifically indicated
below use the applicable strategy as a principal investment strategy.

o INTEREST RATE RISK. (SCHRODER ENHANCED INCOME FUND, SCHRODER TOTAL
RETURN FIXED INCOME FUND, SCHRODER MUNICIPAL BOND FUND, AND SCHRODER
SHORT-TERM MUNICIPAL BOND FUND). The values of bonds and other debt
instruments usually rise and fall in response to changes in interest
rates. Declining interest rates generally increase the values of
existing debt instruments, and rising interest rates generally reduce
the value of existing debt instruments. Interest rate risk is
generally greater for investments with longer durations or maturities.
Some investments give the issuer the option to call or redeem an
investment before its maturity date. If an issuer calls or redeems an
investment during a time of declining interest rates, a Fund might
have to reinvest the proceeds in an investment offering a lower yield,
and therefore might not benefit from any increase in value as a result
of declining interest rates.

o CREDIT RISK. (SCHRODER ENHANCED INCOME FUND, SCHRODER TOTAL RETURN
FIXED INCOME FUND, SCHRODER MUNICIPAL BOND FUND, AND SCHRODER
SHORT-TERM MUNICIPAL BOND FUND). The ability, or perceived ability, of
the issuer of a debt security to make timely payments of interest and
principal on the security will affect the value of the security. It is
possible that the ability of an issuer to meet its obligations will
decline substantially during the period when a Fund owns securities of
that issuer, or that the issuer will default on its obligations. An
actual or perceived deterioration in the ability of an issuer to meet
its obligations will likely have an adverse effect on the value of the
issuer's securities.

Schroder Enhanced Income Fund invests in securities of "investment
grade" at the time of purchase, meaning either that a nationally
recognized statistical rating organization (for example, Moody's
Investors Service, Inc., Standard & Poor's, or Fitch Investors
Service, Inc.) has rated the securities Baa3 or BBB- (or the
equivalent) or better, or the Funds' investment adviser has determined
the securities to be of comparable quality. Schroder Total Return
Fixed Income Fund, Schroder Municipal Bond Fund and Schroder
Short-Term Municipal Bond Fund each invests principally in securities
of investment grade at the time of purchase. Up to 20% of the Schroder
Total Return Fixed Income Fund's total assets may be invested in
securities rated below "investment grade", sometimes referred to as
"junk bonds" (or, if unrated, determined by the Funds' adviser to be
of comparable quality). If a security has been rated by more than one
nationally recognized statistical rating organization the Funds'
adviser will consider the highest rating for the purposes of
determining whether the security is of "investment grade." A Fund will
not necessarily dispose of a security held by it if its rating falls
below investment grade, although the Fund's adviser will consider
whether the security continues to be an appropriate investment for the
Fund. A Fund considers whether a security is of "investment grade"
only at the time of purchase.

Schroder Municipal Bond Fund and Schroder Short-Term Municipal Bond
Fund's adviser expects that a significant portion of the securities in
which these Funds invest will not be rated by a nationally recognized
statistical rating organization, but the credit quality will be
determined by the adviser.

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

The value of a municipal bond depends on the ability and willingness
of its issuer to meet its obligations on the security. Changes in the
financial condition of an issuer, changes in specific economic or
political conditions that affect a particular type of security or
issuer, and changes in general economic or political conditions can
affect the credit quality or value of an issuer's securities. The
discontinuance of the taxation supporting a specific project or
specific assets or the inability to collect revenues from the project
or from the assets can negatively affect the municipal bonds backed by
current or anticipated revenues from the project or assets. If the
Internal Revenue Service or a state tax authority determines an issuer
of a municipal security has not complied with applicable tax
requirements, interest from the security could become taxable for
federal or state law purposes and the security's market value could
decline significantly.

o EXTENSION RISK. (SCHRODER ENHANCED INCOME FUND, SCHRODER TOTAL RETURN
FIXED INCOME FUND, SCHRODER MUNICIPAL BOND FUND, AND SCHRODER
SHORT-TERM MUNICIPAL BOND FUND). During periods of rising interest
rates, the average life of certain types of securities may be extended
because of slower than expected principal payments. This may lock in a
below-market interest rate, increase the security's duration, and
reduce the value of the security.

o HIGH-YIELD/JUNK BONDS RISK. (SCHRODER TOTAL RETURN FIXED INCOME FUND).
Schroder Total Return Fixed Income Fund may invest up to 20% of its
total assets in lower-rated fixed-income securities (commonly known
as "junk bonds"), although normally the Schroder Total Return Fixed
Income Fund will not invest in securities unless a nationally
recognized statistical rating organization (for example, Moody's
Investor Service, Inc., Standard & Poor's Rating Service, or Fitch
Investors Service, Inc.) has rated the securities CC- (or the
equivalent) or better, or the Fund's adviser has determined the
securities to be of comparable quality. The lower ratings of certain
securities held by the Fund reflect a greater possibility that adverse
changes in the financial condition of the issuer or in general
economic conditions, or both, or an unanticipated rise in interest
rates, may impair the ability of the issuer to make payments of
interest and principal. The inability (or perceived inability) of
issuers to make timely payment of interest and principal would likely
make the values of securities held by the Fund more volatile and could
limit the Fund's ability to sell its securities at prices
approximating the values the Fund has placed on such securities. In
the absence of a liquid trading market for securities held by them,
the Fund at times may be unable to establish the fair value of such
securities. To the extent the Fund invests in securities in the lower
rating categories, the achievement of the Fund's goals is more
dependent on the Fund adviser's investment analysis than would be the
case if the Fund was investing in securities in the higher rating
categories.

o INFLATION/DEFLATION RISK. (SCHRODER ENHANCED INCOME FUND, SCHRODER
TOTAL RETURN FIXED INCOME FUND, SCHRODER MUNICIPAL BOND FUND, AND
SCHRODER SHORT-TERM MUNICIPAL BOND FUND). Inflation risk is the risk
that a Fund's assets or income from a Fund's investments may be worth
less in the future as inflation decreases the value of money. As
inflation increases, the real value of a Fund's portfolio could
decline. Deflation risk is the risk that prices throughout the economy
may decline over time - the opposite of inflation. Deflation may have
an adverse effect on the creditworthiness of issuers and may make
issuer default more likely, which may result in a decline in the value
of a Fund's portfolio.

o MORTGAGE AND ASSET-BACKED SECURITIES RISK. (SCHRODER ENHANCED INCOME
FUND AND SCHRODER TOTAL RETURN FIXED INCOME FUND). Mortgage-backed
securities, including collateralized mortgage obligations and certain
stripped mortgage-backed securities represent a participation in, or
are secured by, mortgage loans. Asset-backed securities are structured
like mortgage-backed securities, but instead of mortgage loans or
interests in mortgage loans, the underlying assets may include such
items as motor vehicle installment sales or installment loan
contracts, leases of various types of real and personal property and
receivables from credit card agreements. The ability of an issuer of
asset-backed securities to enforce its security interest in
the underlying assets may be limited. Traditional debt investments
typically pay a fixed rate of interest until maturity, when the entire
principal amount is due. By contrast, payments on mortgage-backed and
many asset-backed investments typically include both interest and
partial payment of principal. Principal may also be prepaid
voluntarily, or as a result of refinancing or foreclosure. A Fund may
have to invest the proceeds from prepaid investments in other
investments with less attractive terms and yields. As a result, these
securities may have less potential for capital appreciation during
periods of declining interest rates than other securities of
comparable maturities, although they may have a similar risk of
decline in market value during periods of rising interest rates.
Because the prepayment rate generally declines as interest rates rise,
an increase in interest rates will likely increase the duration, and
thus the volatility, of mortgage-backed and asset-backed securities.
Duration is a measure of the expected life of a fixed income security
that is used to determine the sensitivity of the security's price to
changes in interest rates. Unlike the maturity of a fixed income
security, which measures only the time until final payment is due,
duration takes into account the time until all payments of interest
and principal on a security are expected to be made, including how
these payments are affected by prepayments and by changes in interest
rates. Some mortgage-backed and asset-backed investments receive only
the interest portion ("IOs") or the principal portion ("POs") of
payments on the underlying assets. The yields and values of these
investments are extremely sensitive to changes in interest rates and
in the rate of principal payments on the underlying assets. IOs tend
to decrease in value if interest rates decline and rates of repayment
(including prepayment) on the underlying mortgages or assets increase;
it is possible that a Fund may lose the entire amount of its
investment in an IO due to a decrease in interest rates. Conversely,
POs tend to decrease in value if interest rates rise and rates of
repayment decrease. Moreover, the market for IOs and POs may be
volatile and limited, which may make them difficult for a Fund to buy
or sell. A Fund may gain investment exposure to mortgage-backed and
asset-backed investments by entering into agreements with financial
institutions to buy the investments at a fixed price at a future date.
A Fund may or may not take delivery of the investments at the
termination date of such an agreement, but will nonetheless be exposed
to changes in value of the underlying investments during the term of
the agreement.

o LIQUIDITY RISK. (SCHRODER EMERGING MARKET EQUITY FUND, SCHRODER
INTERNATIONAL ALPHA FUND, SCHRODER NORTH AMERICAN EQUITY FUND,
SCHRODER U.S. OPPORTUNITIES FUND, AND SCHRODER U.S. SMALL AND MID CAP
OPPORTUNITIES FUND). Liquidity risk exists when particular investments
are difficult to purchase or sell. A Fund's investments in illiquid
securities may reduce the returns of the Fund because it may be unable
to sell the illiquid securities at an advantageous time or price.
Investments in foreign securities, derivatives, or securities with
substantial market and/or credit risk tend to have the greatest
exposure to liquidity risk. Illiquid securities may be highly volatile
and difficult to value.

o DERIVATIVES RISK. (SCHRODER EMERGING MARKET EQUITY FUND, SCHRODER
INTERNATIONAL ALPHA FUND, SCHRODER NORTH AMERICAN EQUITY FUND,
SCHRODER U.S. OPPORTUNITIES FUND, SCHRODER U.S. SMALL AND MID CAP
OPPORTUNITIES FUND, SCHRODER ENHANCED INCOME FUND, AND SCHRODER TOTAL
RETURN FIXED INCOME FUND). Derivatives are financial contracts whose
value depends on, or derives from, the value of an underlying asset,
reference rate, or index. A Fund's use of derivative instruments
involves risks different from, and possibly greater than, the risks
associated with investing directly in securities and other traditional
investments. Derivatives are subject to a number of risks described
elsewhere in this section, such as liquidity risk, interest rate risk,
and credit risk, and the risk that a derivative transaction may not
have the effect the Funds' adviser or sub-adviser anticipated.
Derivatives also involve the risk of mispricing or improper valuation
and the risk that changes in the value of the derivative may not
correlate perfectly with the underlying asset, rate, or index.
Derivative transactions typically involve leverage and may be highly
volatile. Use of derivatives other than for hedging purposes may be
considered speculative, and when a Fund invests in a derivative
instrument it could lose more than the principal amount invested.
Also, suitable derivative transactions may not be available in all
circumstances and there can be no assurance that a Fund will engage in
these transactions to reduce exposure to other risks when that would
be beneficial. Many derivative transactions are entered into "over the
counter" (not on an exchange or contract market); as a result, the
value of such a derivative transaction will depend on the ability and
willingness of a Fund's counterparty to perform its obligations under
the transaction. A Fund may be required to segregate certain of its
assets on the books of its custodian in respect of derivatives
transactions entered into by the Fund. See the applicable Fund's SAI
for more information.

o SMALL AND MID CAP COMPANIES RISK. (SCHRODER EMERGING MARKET EQUITY
FUND, SCHRODER INTERNATIONAL ALPHA FUND, SCHRODER NORTH AMERICAN
EQUITY FUND, SCHRODER U.S. OPPORTUNITIES FUND, AND SCHRODER U.S. SMALL
AND MID CAP OPPORTUNITIES FUND). The Funds may invest in companies
that are smaller and less well-known than larger, more widely held
companies. Micro, small and mid cap companies may offer greater
opportunities for capital appreciation than larger companies, but may
also involve certain special risks. They are more likely than larger
companies to have limited product lines, markets or financial
resources, or to depend on a small, inexperienced management group.
Securities of smaller companies may trade less frequently and in
lesser volume than more widely held securities and their values may
fluctuate more sharply than other securities. They may also trade in
the over-the-counter market or on a regional exchange, or may
otherwise have limited liquidity. These securities may therefore be
more vulnerable to adverse developments than securities of larger
companies, and the Funds may have difficulty establishing or closing
out their securities positions in smaller companies at prevailing
market prices. Also, there may be less publicly available information
about smaller companies or less market interest in their securities as
compared to larger

companies, and it may take longer for the prices of the securities to
reflect the full value of their issuers' earnings potential or assets.

o EQUITY SECURITIES RISK. (SCHRODER EMERGING MARKET EQUITY FUND,
SCHRODER INTERNATIONAL ALPHA FUND, SCHRODER NORTH AMERICAN EQUITY
FUND, SCHRODER U.S. OPPORTUNITIES FUND, AND SCHRODER U.S. SMALL AND
MID CAP OPPORTUNITIES FUND). The principal risks of investing in the
Funds include the risk that the value of the equity securities in the
portfolio will fall, or will not appreciate as anticipated by the
Funds' adviser or sub-adviser, due to factors that adversely affect
equities markets generally or particular companies in the portfolio.
Common stocks represent an equity or ownership interest in an issuer
and are subject to issuer and market risks that may cause their prices
to fluctuate over time. Preferred stocks represent an equity or
ownership interest in an issuer that typically pays dividends at a
specified rate and that has priority over common stock in the payment
of dividends and in liquidation. If interest rates rise, the fixed
dividend on preferred stocks may be less attractive, causing the price
of preferred stocks to decline. Different types of investments tend to
shift into and out of favor with investors depending on changes in
market and economic conditions.

o CONVERTIBLE SECURITIES RISK. (SCHRODER EMERGING MARKET EQUITY FUND,
SCHRODER INTERNATIONAL ALPHA FUND, SCHRODER NORTH AMERICAN EQUITY
FUND, SCHRODER U.S. OPPORTUNITIES FUND, SCHRODER U.S. SMALL AND MID
CAP OPPORTUNITIES FUND, AND SCHRODER TOTAL RETURN FIXED INCOME FUND).
Schroder Total Return Fixed Income Fund may invest in convertible
securities, which are corporate debt securities that may be converted
at either a stated price or stated rate into underlying shares of
common stock, and so subject to the risks of investments in both debt
securities and equity securities. Schroder Emerging Market Equity
Fund, Schroder International Alpha Fund, Schroder North American
Equity Fund, Schroder U.S. Opportunities Fund, and Schroder U.S. Small
and Mid Cap Opportunities Fund may invest in preferred stocks that are
convertible into common stocks, and so subject to the risks of
investments in both preferred and common stocks. The market value of
convertible securities tends to decline as interest rates increase
and, conversely, tends to increase as interest rates decline. In
addition, because of the conversion feature, the market value of
convertible securities tends to vary with fluctuations in the market
value of the underlying common stocks and, therefore, also will react
to variations in the general market for equity securities.

o WARRANTS RISK. (SCHRODER EMERGING MARKET EQUITY FUND, SCHRODER
INTERNATIONAL ALPHA FUND, SCHRODER NORTH AMERICAN EQUITY FUND, AND
SCHRODER U.S. SMALL AND MID CAP OPPORTUNITIES FUND). The Funds may
invest in warrants to purchase equity securities. The price,
performance and liquidity of such warrants are typically linked to the
underlying stock.

o REAL ESTATE INVESTMENT TRUST RISK. (SCHRODER U.S. OPPORTUNITIES FUND
AND SCHRODER U.S. SMALL AND MID CAP OPPORTUNITIES FUND). An investment
in a REIT may be subject to risks similar to those associated with
direct ownership of real estate, including losses from casualty or
condemnation, and changes in local and general economic conditions,
supply and demand, interest rates, zoning laws, regulatory limitations
on rents, property taxes and operating expenses. In addition, an
investment in a REIT is subject to additional risks, such as poor
performance by the manager of the REIT, adverse changes to the tax
laws or failure by the REIT to qualify for tax-free pass-through of
income under the Code. In addition, some REITs have limited
diversification because they invest in a limited number of properties,
a narrow geographic area, or a single type of property. Also, the
organizational documents of a REIT may contain provisions that make

changes in control of the REIT difficult and time-consuming. As a
shareholder in a REIT a Fund, and indirectly the Fund's shareholders,
would bear its ratable share of the REIT's expenses and would at the
same time continue to pay its own fees and expenses.

o INITIAL PUBLIC OFFERINGS (IPOS) RISK. (SCHRODER EMERGING MARKET EQUITY
FUND, SCHRODER U.S. OPPORTUNITIES FUND, AND SCHRODER U.S. SMALL AND
MID CAP OPPORTUNITIES FUND). The Funds may also purchase securities of
companies in initial public offerings (IPOs), which frequently are
smaller companies. Such securities have no trading history, and
information about these companies may be available for very limited
periods. The prices of securities sold in IPOs also can be highly
volatile. Under certain market conditions, very few companies, if any,
may determine to make initial public offerings of their securities. At
any particular time or from time to time the Funds may not be able to
invest in securities issued in IPOs or invest to the extent desired,
because, for example, only a small portion (if any) of the securities
being offered in an IPO may be made available to the Funds. The
investment performance of the Funds during periods when they are
unable to invest significantly or at all in initial public offerings
may be lower than during periods when the Funds are able to do so.

o FOREIGN INVESTMENT RISK. (SCHRODER EMERGING MARKET EQUITY FUND,
SCHRODER INTERNATIONAL ALPHA FUND, SCHRODER NORTH AMERICAN EQUITY
FUND, SCHRODER ENHANCED INCOME FUND, AND SCHRODER TOTAL RETURN FIXED
INCOME FUND). Schroder Emerging Market Equity Fund, Schroder
International Alpha Fund, Schroder Enhanced Income Fund, and Schroder
Total Return Fixed Income Fund may invest in foreign securities.
Schroder North American Equity Fund may invest in securities of
Canadian companies and in companies located in other countries in
North America. Investments in foreign securities entail certain risks.
There may be a possibility of nationalization or expropriation of
assets, confiscatory taxation, political or financial instability, and
diplomatic developments that could affect the value of a Fund's
investments in certain foreign countries. In addition, there may be
less information publicly available about a foreign issuer than about
a U.S. issuer, and foreign issuers are not generally subject to
accounting, auditing, and financial reporting standards and practices
comparable to those in the United States. The securities of some
foreign issuers are less liquid and at times more volatile than
securities of comparable U.S. issuers. Foreign brokerage commissions
and other fees are also generally higher than in the United States.
Foreign settlement procedures and trade regulations may involve
certain risks (such as delay in payment or delivery of securities or
in the recovery of a Fund's assets held abroad) and expenses not
present in the settlement of domestic investments.

Schroder Emerging Market Equity Fund may invest in Chinese companies.
While companies in China may be subject to limitations on their
business relationships under Chinese law, these laws may not be
consistent with certain political and security concerns of the United
States. As a result, Chinese companies may have material direct or
indirect business relationships with governments that are considered
state sponsors of terrorism by the United States government, or
governments that otherwise have policies in conflict with the U.S.
government. Investments in such companies may subject the Schroder
Emerging Market Equity Fund to the risk that these companies'
reputation and price in the market will be adversely affected.

In addition, legal remedies available to investors in certain foreign
countries may be more limited than those available to investors in the
United States or in other foreign countries. The willingness and
ability of foreign governmental entities to pay principal and interest
on government securities depends on various economic factors,
including the issuer's balance

of payments, overall debt level, and cash-flow considerations related
to the availability of tax or other revenues to satisfy the issuer's
obligations. If a foreign governmental entity defaults on its
obligations on the securities, a Fund may have limited recourse
available to it. The laws of some foreign countries may limit a Fund's
ability to invest in securities of certain issuers located in those
countries.

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

In addition, a Fund's investments in foreign securities or foreign
currencies may increase or accelerate the Fund's recognition of
ordinary income and may affect the timing or character of the Fund's
distributions.

o FOREIGN CURRENCIES RISK. (SCHRODER EMERGING MARKET EQUITY FUND,
SCHRODER INTERNATIONAL ALPHA FUND, SCHRODER NORTH AMERICAN EQUITY
FUND, AND SCHRODER TOTAL RETURN FIXED INCOME FUND). Since foreign
securities normally are denominated and traded in foreign currencies,
the value of a Fund's assets may be affected favorably or unfavorably
by currency exchange rates, currency exchange control regulations,
foreign withholding taxes, and restrictions or prohibitions on the
repatriation of foreign currencies. Schroder Total Return Fixed Income
Fund will normally invest no more than 20% of its total assets in
securities that are not denominated in the U.S. dollar. A Fund may,
but is not required to, buy or sell foreign securities and options and
futures contracts on foreign securities for hedging purposes in
connection with its foreign investments.

If a Fund purchases securities denominated in foreign currencies, a
change in the value of any such currency against the U.S. dollar will
result in a change in the U.S. dollar value of the Fund's assets and
the Fund's income available for distribution. Officials in foreign
countries may from time to time take actions in respect of their
currencies which could significantly affect the value of a Fund's
assets denominated in those currencies or the liquidity of such
investments. For example, a foreign government may unilaterally
devalue its currency against other currencies, which would typically
have the effect of reducing the U.S. dollar value of investments
denominated in that currency. A foreign government may also limit the
convertibility or repatriation of its currency or assets denominated
in its currency, which would adversely affect the U.S. dollar value
and liquidity of investments denominated in that currency. In
addition, although at times most of a Fund's income may be received or
realized in these currencies, the Fund will be required to compute and
distribute its income in U.S. dollars. As a result, if the exchange
rate for any such currency declines after the Fund's income has been
earned and translated into U.S. dollars but before payment to
shareholders, the Fund could be required to liquidate portfolio
securities to make such distributions. Similarly, if a Fund incurs an
expense in U.S. dollars and the exchange rate declines before the
expense is paid, the Fund would have to convert a greater amount of
U.S. dollars to pay for the expense at that time than it would have
had to convert at the time the Fund incurred the expense. A Fund may,
but is not required to,

buy or sell foreign currencies and options and futures contracts on
foreign currencies for hedging purposes in connection with its foreign
investments.

o EMERGING MARKET SECURITIES RISK. (SCHRODER EMERGING MARKET EQUITY
FUND, SCHRODER INTERNATIONAL ALPHA FUND, AND SCHRODER TOTAL RETURN
FIXED INCOME FUND). Investing in emerging market securities poses
risks different from, and/or greater than, risks of investing in
domestic securities or in the securities of foreign, developed
countries. These risks include: smaller market capitalization of
securities markets, which may suffer periods of relative illiquidity;
significant price volatility; restrictions on foreign investment; and
possible repatriation of investment income and capital. In addition,
foreign investors may be required to register the proceeds of sales,
and future economic or political crises could lead to price controls,
forced mergers, expropriation or confiscatory taxation, seizure,
nationalization or the creation of government monopolies. The
currencies of emerging market countries may experience significant
declines against the U.S. dollar, and devaluation may occur subsequent
to investments in these currencies by a Fund. Inflation and rapid
fluctuations in inflation rates have had, and may continue to have,
negative effects on the economies and securities markets of certain
emerging market countries. Although many of the emerging market
securities in which a Fund may invest are traded on securities
exchanges, they may trade in limited volume, and the exchanges may not
provide all of the conveniences or protections provided by securities
exchanges in more developed markets.

Additional risks of emerging market securities may include: greater
social, economic and political uncertainty and instability; more
substantial governmental involvement in the economy; less governmental
supervision and regulation; unavailability of currency hedging
techniques; companies that are newly organized and small; differences
in auditing and financial reporting standards, which may result in
unavailability of material information about issuers; and less
developed legal systems. In addition, emerging securities markets may
have different clearance and settlement procedures, which may be
unable to keep pace with the volume of securities transactions or
otherwise make it difficult to engage in such transactions. Settlement
problems may cause a Fund to miss attractive investment opportunities,
hold a portion of its assets in cash pending investment, or be delayed
in disposing of a portfolio security. Such a delay could result in
possible liability to a purchaser of the security.

o GEOGRAPHIC FOCUS RISK. (SCHRODER EMERGING MARKET EQUITY FUND, SCHRODER
INTERNATIONAL ALPHA FUND, SCHRODER NORTH AMERICAN EQUITY FUND,
SCHRODER U.S. OPPORTUNITIES FUND, AND SCHRODER U.S. SMALL AND MID CAP
OPPORTUNITIES FUND). To the extent that a Fund invests a substantial
amount of its assets in one country, its performance may at times be
worse than the performance of other mutual funds that invest more
broadly. Because the Schroder North American Equity Fund invests
principally in equity securities of North American companies, and the
Schroder U.S. Opportunities Fund and Schroder U.S. Small and Mid Cap
Opportunities Fund invest principally in equity securities of U.S.
companies, their performance may at times be worse than the
performance of other mutual funds that invest more broadly.

o ISSUER FOCUS RISK. (SCHRODER INTERNATIONAL ALPHA FUND AND SCHRODER
U.S. OPPORTUNITIES FUND). The Funds, and in particular the Schroder
International Alpha Fund, may invest in a smaller number of companies
than comprise the portfolios of other similar mutual funds. When a
Fund invests in a relatively small number of issuers, changes in the
value of one or more portfolio securities may have a greater effect on
the Fund than if the Fund invested more broadly.

o DEPOSITARY RECEIPTS RISK. (SCHRODER EMERGING MARKET EQUITY FUND). A
Fund may invest in ADRs, as well as GDRs, EDRs or other similar
securities representing ownership of foreign securities. Depositary
Receipts generally evidence an ownership interest in a corresponding
foreign security on deposit with a financial institution. Investments
in non-U.S. issuers through Depository Receipts and similar
instruments may involve certain risks not applicable to investing in
U.S. issuers, including changes in currency rates, application of
local tax laws, changes in governmental administration or economic or
monetary policy or changed circumstances in dealings between nations.
Costs may be incurred in connection with conversions between various
currencies. A Fund may invest in both sponsored and unsponsored
Depositary Receipts. Unsponsored Depositary Receipts are organized
independently and without the cooperation of the issuer of the
underlying securities. As a result, available information concerning
the issuers may not be as current for sponsored Depositary Receipts
and the prices of unsponsored Depositary Receipts may be more volatile
than if such instruments were sponsored by the issuer.

o INVESTMENTS IN OTHER INVESTMENT COMPANIES RISK. (SCHRODER EMERGING
MARKET EQUITY FUND, SCHRODER INTERNATIONAL ALPHA FUND, AND SCHRODER
NORTH AMERICAN EQUITY FUND). A Fund may invest in other investment
companies or pooled vehicles, including closed-end funds and ETFs,
that are advised by the Fund's sub-adviser or its affiliates or by
unaffiliated parties, to the extent permitted by applicable law. When
investing in a closed-end investment company, a Fund may pay a premium
above such investment company's net asset value per share and when the
shares are sold, the price received by the Fund may be at a discount
to net asset value. As a shareholder in an investment company, a Fund,
and indirectly that Fund's shareholders, would bear its ratable share
of the investment company's expenses, including advisory and
administrative fees, and would at the same time continue to pay its
own fees and expenses. ETFs issue redeemable securities, but because
these securities may only be redeemed in kind in significant amounts
investors generally buy and sell shares in transactions on securities
exchanges.

o OVER-THE-COUNTER RISK. (SCHRODER U.S. OPPORTUNITIES FUND AND SCHRODER
U.S. SMALL AND MID CAP OPPORTUNITIES FUND). Securities traded in
over-the-counter markets may trade in smaller volumes, and their
prices may be more volatile, than securities principally traded on
securities exchanges. Such securities may be less liquid than more
widely traded securities. In addition, the prices of such securities
may include an undisclosed dealer markup, which a Fund pays as part of
the purchase price.

o EQUITY MARKETS RISK. (SCHRODER EMERGING MARKET EQUITY FUND, SCHRODER
INTERNATIONAL ALPHA FUND, SCHRODER NORTH AMERICAN EQUITY FUND,
SCHRODER U.S. OPPORTUNITIES FUND, AND SCHRODER U.S. SMALL AND MID CAP
OPPORTUNITIES FUND). Although stocks may outperform other asset
classes over the long term, their prices tend to fluctuate more
dramatically over the shorter term. These movements may result from
factors affecting individual companies, or from broader influences
like changes in interest rates, market conditions, investor confidence
or announcements of economic, political or financial information.
While potentially offering greater opportunities for capital growth
than larger, more established companies, the stocks of smaller
companies may be particularly volatile, especially during periods of
economic uncertainty. These companies may face less certain growth
prospects, or depend heavily on a limited line of products and
services or the efforts of a small number of key management personnel.

o MANAGEMENT RISK. (ALL FUNDS). Because the Funds are actively managed,
each Fund's investment return depends on the ability of its adviser or
sub-adviser to manage its

portfolio successfully. A Fund's adviser or sub-adviser and its
investment team will apply investment techniques and risk analyses in
making investment decisions for the Fund, but there can be no
guarantee that these will produce the desired results.

o FREQUENT TRADING / PORTFOLIO TURNOVER RISK (SCHRODER NORTH AMERICAN
EQUITY FUND, SCHRODER ENHANCED INCOME FUND, AND SCHRODER TOTAL RETURN
FIXED INCOME FUND). The length of time a Fund has held a particular
security is not generally a consideration in investment decisions. The
investment policies of a Fund may lead to frequent changes in the
Fund's investments, particularly in periods of volatile market
movements, in order to take advantage of what the Fund's adviser or
sub-adviser believes to be temporary disparities in normal yield
relationships between securities. A change in the securities held by a
Fund is known as "portfolio turnover." Portfolio turnover generally
involves some expense to a Fund, including bid-asked spreads, dealer
mark-ups and other transaction costs on the sale of securities and
reinvestments in other securities, and may result in the realization
of taxable capital gains (including short-term gains, which are
generally taxed to shareholders at ordinary income rates). The trading
costs and tax effects associated with portfolio turnover may adversely
affect a Fund's performance. During periods when a Fund experiences
high portfolio turnover rates, these effects are likely to be more
pronounced. The Funds' adviser currently expects that the portfolio
turnover rate for the current fiscal year will be approximately 100%
for Schroder Emerging Market Equity Fund, will be greater than 400%
for each of Schroder Enhanced Income Fund and Schroder Total Return
Fixed Income Fund, will be approximately 160% for Schroder North
American Equity Fund, and will not exceed 100% for each of Schroder
International Alpha Fund, Schroder U.S. Opportunities Fund, Schroder
U.S. Small and Mid Cap Opportunities Fund, Schroder Municipal Bond
Fund and Schroder Short-Term Municipal Bond Fund. Consult your tax
advisor regarding a Fund's portfolio turnover rate on your
investments.

o MUNICIPAL BONDS RISK. (SCHRODER MUNICIPAL BOND FUND AND SCHRODER
SHORT-TERM MUNICIPAL BOND FUND). Municipal bonds are investments of
any maturity issued by states, public authorities or political
subdivisions to raise money for public purposes; they include, for
example, general obligations of a state or other government entity
supported by its taxing powers to acquire and construct public
facilities or to provide temporary financing in anticipation of the
receipt of taxes and other revenue. They also include obligations of
states, public authorities or political subdivisions to finance
privately owned or operated facilities or public facilities financed
solely by enterprise revenues. Changes in law or adverse
determinations by the Internal Revenue Service or a state tax
authority could make the income from some of these obligations
taxable.

General obligations. These are backed by the issuer's authority
to levy taxes and are considered an obligation of the issuer.
They are payable from the issuer's general unrestricted revenues,
although payment may depend upon government appropriation or aid
from other governments. These investments may be vulnerable to
legal limits on a government's power to raise revenue or increase
taxes, as well as economic or other developments that can reduce
revenues.

Special revenue obligations. These are payable from revenue
earned by a particular project or other revenue source. They
include private activity bonds for manufacturing facilities,
certain transportation facilities, and publicly-owned utilities,
and non-profit organizations such as private colleges, hospitals
and museums, and other facilities. Investors can look only to the
revenue generated by the project or the private company owning or
operating the project rather than the credit of the state or
local

government authority issuing the bonds. Revenue obligations are
often subject to greater credit risk than general obligations
debt because they do not rely on broad taxing powers.

Municipal bonds may be insured or guaranteed by public or private
guarantors or insurers. The credit standing of such a bond would
likely depend to a substantial extent on the ability and willingness
of the guarantor or insurer to meet its obligations.

The amount of public information available about the municipal bonds
in a Fund's portfolio is generally less than that available for
corporate equities or bonds, and the investment performance of a Fund
holding such securities may therefore be more dependent on the
analytical abilities of the Fund's adviser.

Interest income from private activity bonds may be subject to federal
AMT for individuals. Corporate shareholders will be required to
include all tax-exempt interest dividends in determining their federal
AMT. The Funds may each invest as much as 100% of their net assets in
investments, the income from which may result in liability for federal
AMT both for individual and corporate shareholders. For more
information, including possible state, local and other taxes, contact
your tax advisor.

At times, a portion of a Fund's assets may be invested in an issue of
which the Fund, by itself or together with other funds and accounts
managed by the Funds' adviser or its affiliates, holds all or a major
portion. It is possible that, under adverse market or economic
conditions or in the event of adverse changes in the financial
condition of the issuer, a Fund could find it more difficult to sell
these securities when the Funds' adviser believes it advisable to do
so or may be able to sell the securities only at prices lower than if
they were more widely held. Under these circumstances, it may also be
more difficult to determine the fair value of such securities for
purposes of computing a Fund's net asset value. In the event of a
default by an issuer of such securities, a Fund may be required to
incur expenses in enforcing its rights, and any income received by the
Fund in respect of its investment might not be tax-exempt.

o TAXABLE MUNICIPAL SECURITIES RISK. (SCHRODER MUNICIPAL BOND FUND AND
SCHRODER SHORT-TERM MUNICIPAL BOND FUND). The Funds may invest in
taxable municipal securities. These would typically include securities
issued by states, public authorities, or political subdivisions but
which fail to meet the requirements of the federal tax code necessary
so that interest payments made on the securities will be exempt from
federal income tax. These may include, for example, securities issued
to finance unfunded pension liabilities or issued to finance
governmental facilities where the nature or management of the facility
is such that the securities may not be issued on a tax-exempt basis.
The Funds may also hold a portion of their assets in securities issued
by the U.S. Treasury and they may hold taxable money market securities
or cash equivalents for liquidity or pending investment in tax-exempt
securities.

o VOLATILITY OF THE MUNICIPAL BOND MARKET RISK. (SCHRODER MUNICIPAL BOND
FUND AND SCHRODER SHORT-TERM MUNICIPAL BOND FUND). The values of
municipal bonds may rise or fall in response to a number of factors
affecting their issuers specifically or the municipal bond market
generally. For example, political or fiscal events affecting the
issuers of municipal bonds, as well as uncertainties in the municipal
bond market generally related to taxation, legislative changes, or the
enforceability of rights of municipal bond holders, can significantly
affect the values of municipal bonds. Because many municipal bonds are
issued to finance similar projects, such as those relating to
education, health care, housing, transportation, and utilities,
conditions in those sectors can affect the overall municipal bond
market.

o STATE AND ISSUER RISK. (SCHRODER MUNICIPAL BOND FUND AND SCHRODER
SHORT-TERM MUNICIPAL BOND FUND). A Fund may invest without limitation
in the debt of issuers, including conduit issuers, located in the same
state. Investing in bonds issued by a state, state agencies, or
political subdivisions in the same state may make a Fund more
vulnerable to that state's economy and to issues affecting its
municipal bond issuers, such as possible restrictions on additional
borrowings by issuers in that state or economic or legal limitations
on an issuer's ability to meet payment obligations. A Fund may also
invest more than 25% of its assets in a sector of the municipal bond
market, including education, health care, housing, transportation or
utilities sectors. Geographic or sector concentration may cause the
value of a Fund's shares to change more than the values of shares of
funds that invest in a greater variety of investments.

Municipal bonds backed by revenues from facilities in a particular
sector are subject to the risks of investment in that sector
generally. For example, investments in many of the sectors in which a
Fund may invest are subject to the risks of changes in government
regulation, fluctuations in revenues, including federal or state
assistance, competition, changes in labor relations and costs, and
difficulties in raising additional capital under a variety of
circumstances. Revenue bonds issued in the education sector can be
significantly affected also by levels of endowment, charitable giving,
costs of attendance, increases or decreases in governmental assistance
or other revenues, and, in the case of public schools, limits on the
ability of governmental entities to increase taxes or generate other
revenues, including fees, to pay for educational expenses. Investments
in a health care sector are subject to changes in patient income, the
availability of public or private insurance reimbursement for
procedures and drug costs, the timing of such payments, the quality of
management and the availability of qualified professional staff, and
demographics. The housing sector can be significantly affected by
changes in interest rates for single-family home buyers, governmental
regulations imposed on developers of low and moderate cost
multi-family units, as well as costs of land, construction and
maintenance costs, neighborhood opposition to mixed-income
developments, and the level of government incentives, including
subsidies and tax credits. Investments in a transportation sector can
be affected significantly by the cost of developing, maintaining,
updating and replacing infrastructure and other hard assets, levels of
federal and state assistance, quality of service, and the ability to
raise fees without losing ridership. Investments in a utilities sector
can be significantly affected by the ability to locate a reliable and
reasonable source of the resource to be provided, infrastructure
development and maintenance, the ability to pass on costs of services
and resources to customers, mandatory or voluntary natural resource
conservation efforts, alternatives by customers to the use of public
utilities, and the effects of deregulation by many states. The
foregoing factors are illustrative in nature. This discussion of the
risk of concentration in sectors is not, and is not intended to be,
comprehensive or exhaustive.

A Fund may at times invest a substantial portion of its assets in
securities of a particular issue, and to that extent, the Fund's
investment performance and net asset value will be adversely affected
by decreases in the value of such issue more than if such Fund
invested in a larger range of securities.

o U.S. GOVERNMENT SECURITIES RISK. (SCHRODER ENHANCED INCOME FUND,
SCHRODER TOTAL RETURN FIXED INCOME FUND, SCHRODER MUNICIPAL BOND FUND,
AND SCHRODER SHORT-TERM MUNICIPAL BOND FUND). U.S. Government
securities include a variety of securities that differ in their
interest rates, maturities, and dates of issue. While securities
issued or guaranteed by some agencies or instrumentalities of the U.S.
Government (such as the Government National Mortgage Association) are
supported by the full faith and

credit of the United States, securities issued or guaranteed by
certain other agencies or instrumentalities of the U.S. Government
(such as Federal Home Loan Banks) are supported by the right of the
issuer to borrow from the U.S. Government, and securities issued or
guaranteed by certain other agencies and instrumentalities of the U.S.
Government (such as Fannie Mae and Freddie Mac) are supported only by
the credit of the issuer itself. Investments in these securities are
also subject to interest rate risk (as described above under "Interest
Rate Risk"), prepayment risk (as described above under "Mortgage and
Asset-Backed Securities Risk"), extension risk (as described above
under "Extension Risk"), and the risk that the value of the securities
will fluctuate in response to political, market, or economic
developments.

NON-PRINCIPAL INVESTMENT STRATEGIES AND TECHNIQUES

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

o SHORT SALES. A Fund may sell a security short when the Fund's adviser
or sub-adviser anticipates that the price of the security will
decline. A Fund may make a profit or incur a loss depending on whether
the market price of the security decreases or increases between the
date of the short sale and the date on which the Fund "closes" the
short position. A short position will result in a loss if the market
price of the security in question increases between the date when the
Fund enters into the short position and the date when the Fund closes
the short position. Such a loss could theoretically be unlimited in a
case where such Fund is unable, for whatever reason, to close out its
short position. In addition, short positions may result in a loss if a
portfolio strategy of which the short position is a part is otherwise
unsuccessful.

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

o SECURITIES LOANS AND REPURCHASE AGREEMENTS. A Fund may lend portfolio
securities to broker-dealers, and may enter into repurchase
agreements. These transactions must be fully collateralized at all
times, but involve some risk to a Fund if the other party should
default on its obligation and the Fund is delayed or prevented from
recovering the collateral. A Fund may enter into securities loans and
repurchase agreements as a non-principal investment strategy, as a way
to recognize additional current income on securities that it owns.

o TEMPORARY DEFENSIVE STRATEGIES. At times, the Funds' adviser or
sub-adviser may judge that conditions in the securities markets make
pursuing a Fund's investment strategy inconsistent with the best
interests of its shareholders. At such times, the Fund's adviser or
sub-adviser may, but is not required to, take temporary "defensive"
positions that are inconsistent with a Fund's principal investment
strategies in attempting to respond to adverse market, economic,
political, or other conditions. In implementing these defensive
strategies, the Fund would invest in investment grade fixed income
securities, cash or money market instruments to any extent the Fund's
adviser or sub-adviser considers consistent with such defensive
strategies. It is impossible to predict when, or for how long, a Fund
would use these alternate strategies. One risk of taking such
temporary defensive positions is that the Fund may not achieve its
investment objective.

o PRICING. At times market conditions might make it hard to value some
investments. If a Fund has valued securities it holds too high, you
may end up paying too much for the

Fund's shares when you buy into a Fund. If a Fund underestimates the
price of its portfolio securities, you may not receive the full market
value for your Fund shares when you sell. To the extent a Fund relies
on a pricing service to value some or all of its portfolio securities,
it is possible that the pricing information provided by the service
will not reflect the actual price the Fund would receive upon a sale
of the security.

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

o PERCENTAGE INVESTMENT LIMITATIONS. Unless otherwise noted, all
percentage limitations on Fund investments will apply at the time of
investment, namely the requirements that: Schroder Emerging Market
Equity Fund normally invest at least 80% of its net assets in equity
securities of companies the Fund's sub-adviser considers to be
"emerging market" issuers; Schroder International Alpha Fund normally
invest at least 65% of its total assets in equity securities of
companies the Fund's adviser considers to be located outside of the
United States; Schroder North American Equity Fund normally invest at
least 80% of its net assets in equity securities of companies
organized and principally traded in, or with their principal places of
business and principally traded in, North America; Schroder U.S.
Opportunities Fund normally invest at least 80% of its net assets in
securities of companies the Fund's adviser considers to be located in
the United States; Schroder U.S. Small and Mid Cap Opportunities Fund
normally invest at least 80% of its net assets in companies considered
by the Fund's adviser at the time to be small or mid cap companies
located in the United States; Schroder Enhanced Income Fund normally
invest at least 80% of its net assets in income-producing obligations;
Schroder Total Return Fixed Income Fund normally invest at least 80%
of its net assets in fixed income obligations of issuers located in
the United States; Schroder Municipal Bond Fund normally invests at
least 80% of its net assets in municipal bonds; and Schroder
Short-Term Municipal Bond Fund normally invest at least 80% of its net
assets in municipal bonds and at least 80% of its net assets in
investments the income from which is exempt from federal income tax,
but which may be subject to federal alternative minimum tax. An
investment by a Fund would not be considered to violate these
limitations unless an excess or deficiency were to occur or exist
immediately after and as a result of an investment. References in the
discussion of the Funds' investment policies above to 80% of a Fund's
net assets refer to that percentage of the aggregate of the Fund's net
assets and the amount, if any, of borrowings by a Fund for investment
purposes.

o PRIVATE PLACEMENTS AND RESTRICTED SECURITIES. A Fund may invest in
securities that are purchased in private placements. Because there may
be relatively few potential purchasers for such investments,
especially under adverse market or economic conditions or in the event
of adverse changes in the financial condition of the issuer, a Fund
could find it more difficult to sell such securities when the Fund's
adviser believes it advisable to do so or may be able to sell such
securities only at prices lower than if such securities were more
widely held. At times, it may also be more difficult to determine the
fair value of such securities for purposes of computing a Fund's net
asset value. A Fund's sale of such investments may also be restricted
under securities laws. In the event that the Trustees, or persons
designated by the Trustees, determine that a security is "readily
marketable" pursuant to these procedures, and a Fund is not able to
sell such security at the price that such persons anticipate, the
Fund's net asset value will decrease.

MANAGEMENT OF THE FUNDS

Each Trust is governed by a Board of Trustees. The Board of Trustees of each
Trust has retained Schroders to serve as each Fund's adviser and to manage the
investments of each Fund. Subject to the control of the applicable Board of
Trustees, Schroders also manages each Fund's other affairs and business.

Schroder Investment Management North America Limited ("SIMNA Ltd."), an
affiliate of Schroders, serves as sub-adviser responsible for portfolio
management of Schroder Emerging Market Equity Fund, Schroder International Alpha
Fund, and Schroder North American Equity Fund.

Schroders (itself and its predecessors) has been an investment manager since
1962, and serves as investment adviser to the Funds and as investment adviser to
other mutual funds and a broad range of institutional investors. Schroders plc,
Schroders' ultimate parent, is a global asset management company with
approximately $211 billion under management as of December 31, 2005. Schroders
and its affiliates have clients that are major financial institutions including
banks and insurance companies, public and private pension funds, endowments and
foundations, high net worth individuals, financial intermediaries and retail
investors. Schroders plc has one of the largest networks of offices of any
dedicated asset management company and over 300 portfolio managers and analysts
covering the world's investment markets.

o MANAGEMENT FEES. For the fiscal year ended October 31, 2005, each of
the following Funds paid aggregate management fees, net of applicable
expense limitations and/or fee waivers, for investment management and
administration services to Schroders at the following annual rates
(based on each Fund's average daily net assets): Schroder North
American Equity Fund: 0.25%; Schroder U.S. Opportunities Fund: 0.73%
(effective May 1, 2006 the Fund's management fee is 1.00%); Schroder
Municipal Bond Fund: 0.02%; and Schroder Short-Term Municipal Bond
Fund: 0.10%. Schroder International Alpha Fund did not pay fees during
the fiscal year ended October 31, 2005 due to an expense limitation
and/or fee waiver in effect during that period (effective April 1,
2006 the Fund's management fee is 0.975% of the Fund's average daily
net assets). Each of the following Funds expect to pay management fees
for investment management services to Schroders at the following
annual rates (based on each Fund's average daily net assets): Schroder
Emerging Market Equity Fund - 1.00%; Schroder U.S. Small and Mid Cap
Opportunities Fund - 1.00%; Schroder Enhanced Income Fund - 0.25%; and
Schroder Total Return Fixed Income Fund - 0.25%. As compensation for
SIMNA Ltd.'s services as sub-adviser, Schroders pays to SIMNA Ltd.
fifty percent of the investment advisory fees Schroders receives from
each of Schroder Emerging Market Equity Fund, Schroder International
Alpha Fund, and Schroder North American Equity Fund. A discussion
regarding the basis for the Trustees' approval of the investment
management agreements for Schroder International Alpha Fund, Schroder
North American Equity Fund, Schroder U.S. Opportunities Fund, Schroder
Enhanced Income Fund, Schroder Total Return Fixed Income Fund,
Schroder Municipal Bond Fund, and Schroder Short-Term Municipal Bond
Fund is available in the Funds' annual report to shareholders for the
fiscal year ended October 31, 2005.

o EXPENSE LIMITATIONS AND WAIVERS. In order to limit the expenses of
Schroder Emerging Market Equity Fund, Schroder International Alpha
Fund, Schroder U.S. Opportunities Fund, Schroder U.S. Small and Mid
Cap Opportunities Fund, Schroder Enhanced Income Fund, Schroder Total
Return Fixed Income Fund, Schroder Municipal

Bond Fund, and Schroder Short-Term Municipal Bond Fund's Investor
Shares, Schroders has contractually agreed to reduce its compensation
(and, if necessary, to pay other Fund expenses, other than interest,
taxes, and extraordinary expenses, which may include typically
non-recurring expenses such as, for example, organizational expenses,
litigation expenses, and shareholder meeting expenses) until February
28, 2007 (March 31, 2007 for the Schroder International Alpha Fund,
Schroder U.S. Opportunities Fund, Schroder Emerging Market Equity
Fund, and Schroder U.S. Small and Mid Cap Opportunities Fund) to the
extent that the Total Annual Fund Operating Expenses of the Fund
allocable to its Investor Shares exceed the following annual rates
(based on the average daily net assets attributable to the Fund's
Investor Shares): Schroder Emerging Market Equity Fund - 1.75%;
Schroder International Alpha Fund - 1.25%; Schroder U.S. Opportunities
Fund - 1.70%; Schroder U.S. Small and Mid Cap Opportunities Fund -
1.40%; Schroder Enhanced Income Fund - 0.40%; Schroder Total Return
Fixed Income Fund - 0.40%; Schroder Municipal Bond Fund - 0.55%; and
Schroder Short-Term Municipal Bond Fund - 0.55%.

o PORTFOLIO MANAGEMENT. The following portfolio managers at Schroders
and SIMNA Ltd. have primary responsibility for making investment
decisions for the respective Funds. For Schroder North American Equity
Fund, all investment decisions are made by a team of investment
professionals at SIMNA Ltd. with the portfolio managers listed in the
table below for that Fund having primary responsibility for making
investment decisions for the Fund. Each portfolio manager's recent
professional experience is also shown. Each Fund's respective SAI
provides additional information about each portfolio manager's
compensation, other accounts managed by the portfolio managers, and
each portfolio manager's ownership of securities in the Fund.

FUND NAME TITLE SINCE RECENT PROFESSIONAL EXPERIENCE
--------------------- ------------------- ----------------- ---------------- ----------------------------------

Schroder Emerging James Gotto Portfolio Manager Inception Mr. Gotto is a Portfolio Manager
Market Equity Fund (March 31, 2006) of SIMNA Ltd. He has been an
employee of SIMNA Ltd. since
1991.

Schroder Emerging Waj Hashmi, CFA Portfolio Manager Inception Mr. Hashmi is a Portfolio
Market Equity Fund (March 31, 2006) Manager of SIMNA Ltd. He has
been an employee of SIMNA Ltd.
since 2000.

Schroder Emerging Robert Davy Portfolio Manager Inception Mr. Davy is a Portfolio Manager
Market Equity Fund (March 31, 2006) of SIMNA Ltd. He has been an
employee of SIMNA Ltd. since
1986.

Schroder Emerging Allan Conway Head of Emerging Inception Mr. Conway is Head of Emerging
Market Equity Fund Markets Equities (March 31, 2006) Markets Equities at SIMNA Ltd.
He has been an employee of SIMNA
Ltd. since 2004. Formerly, Head
of Global Emerging Markets, West
LB Asset Management and Chief
Executive Officer of WestAM (UK)
Ltd.

Schroder Virginie Lead Portfolio March 2005 Ms. Maisonneuve is a Director of
International Alpha Maisonneuve, CFA Manager Schroders. She has been an
Fund employee of SIMNA Ltd. since
2004. She is head of Schroders'
Europe, Australasia, Far East
(EAFE) Team. Formerly, Co-Chief
Investment Officer and Director,
Clay Finlay.

Schroder Matthew Dobbs Portfolio Manager 2004 Mr. Dobbs manages Pacific Basin
International Alpha and EAFE equities and is
Fund responsible for MultiRegional
Small Cap. He has been an
employee of Schroders since
1981.

Schroder North Justin Abercrombie Head of Inception Mr. Abercrombie is Head of QEP,
American Equity Fund Quantitative (September 2003) SIMNA Ltd. He has been an
Equity Products employee of Schroders since
("QEP") 1996. Formerly, founding member
of QEP, SIMNA Ltd.

Schroder North David Philpotts Senior March 2004 Mr. Philpotts is Senior
American Equity Quantitative Quantitative Analyst and
Fund Analyst and Portfolio Manager, SIMNA
Portfolio Manager Ltd. He has been an employee of
SIMNA Ltd. since 1999. Formerly,
Chief Investment Officer, Quaestor
Investment Management (2001 -
March 2004), Deputy Head of QEP,
SIMNA Ltd. (1999 - 2004).

Schroder North Stephen Langford Senior November 2003 Mr. Langford is Senior
American Equity Fund Quantitative Quantitative Analyst and
Analyst and Portfolio Manager, SIMNA Ltd. He
Portfolio Manager has been an employee of SIMNA
Ltd. since 2003. Formerly,
Senior Research Manager,
Quaestor Investment Management.

Schroder North Arnaud Amsellem Senior July 2005 Mr. Amsellem is Senior
American Equity Fund Quantitative Quantitative Analyst and
Analyst and Portfolio Manager, SIMNA Ltd. He
Portfolio Manager has been an employee of SIMNA
Ltd. since 2005. Formerly,
Senior Portfolio Manager, State
Street Hedge Fund Group,
Portfolio Manager, State Street
Active Team.

Schroder North Kristian Brock Quantitative Inception Mr. Brock is a Quantitative
American Equity Fund Analyst and (September 2003) Analyst and Portfolio Manager,
Portfolio Manager SIMNA Ltd. He has been an
employee of Schroders since 2001.

Schroder North James Larkman Quantitative October 2005 Mr. Larkman is a Quantitative
American Equity Fund Analyst and Analyst and Portfolio Manager,
Portfolio Manager SIMNA Ltd. He has been an
employee of Schroders since 2003.

Schroder U.S. Jenny B. Jones Lead Portfolio 2003 (U.S. Ms. Jones is an Executive Vice
Opportunities Fund Manager Opportunities President of Schroders. She has
and Schroder U.S. Fund) been an employee of Schroders
Small and Mid Cap since 2003. Formerly, portfolio
Opportunities Fund Inception manager and Executive Director,
(March 31, Morgan Stanley Investment
2006) (U.S. Advisors Inc.
Small and Mid
Cap
Opportunities
Fund)

Schroder Enhanced Steven S. Lear, CFA Lead Portfolio Inception Mr. Lear is an Executive Vice
Income Fund and Manager (December President of Schroders. He

Schroder Total Return 2004) for each has been an employee of Schroders
Fixed Income Fund Fund since June 1998.

Schroder Enhanced David Harris Portfolio Manager Inception Mr. Harris is a Senior Vice
Income Fund and (December 2004) President of Schroders. He has
Schroder Total Return for each Fund been an employee of Schroders
Fixed Income Fund since November 1992.

Schroder Enhanced Wesley A. Sparks, Portfolio Manager Inception Mr. Sparks is a Senior Vice
Income Fund and CFA (December 2004) President of Schroders. He has
Schroder Total Return for each Fund been an employee of Schroders
Fixed Income Fund since December 2000. Formerly,
portfolio manager at Aeltus
Investment Management.

Schroder Enhanced Gregg T. Moore, CFA Portfolio Manager Inception Mr. Moore is a Vice President of
Income Fund and (December 2004) Schroders and has been an
Schroder Total Return for each Fund employee of Schroders since June
Fixed Income Fund 2001. Formerly, quantitative
analyst at Aeltus Investment
Management.

Schroder Enhanced Matthew J. Murphy Portfolio Manager Inception Mr. Murphy is a Vice President
Income Fund and (December 2004) of Schroders. He has been an
Schroder Total Return for each Fund employee of Schroders since July
Fixed Income Fund 2004. Formerly, Managing
Director at MONY Capital
Management from February 2002 to
July 2004.

Schroder Municipal David Baldt, CFA Portfolio Manager Inception Mr. Baldt is an Executive Vice
Bond Fund and (December 2003) President of Schroders. He has
Schroder Short-Term for each Fund been an employee of Schroders
Municipal Bond Fund since fall 2003. Formerly,
Managing Director of Deutsche
Asset Management (formerly
Morgan Grenfell).

Schroder Municipal Daniel Scholl Portfolio Manager Inception Mr. Scholl is a Senior Vice
Bond Fund and (December 2003) President of Schroders. He has
Schroder Short-Term for each Fund been an employee of Schroders
Municipal Bond Fund since fall 2003.

Formerly a Director and
Portfolio Manager of Deutsche
Asset Management (formerly
Morgan Grenfell).

Schroder Municipal Susan Beck Portfolio Manager Inception Ms. Beck is a First Vice
Bond Fund and (December President of Schroders. She

Schroder Short-Term 2003) for each has been an employee of Schroders
Municipal Bond Fund Fund since fall 2003. Formerly, a Vice
President and Portfolio Manager of
Deutsche Asset Management
(formerly Morgan Grenfell).

Schroder Municipal Ted Manges Portfolio Manager Inception Mr. Manges is a First Vice
Bond Fund and (December 2003) President of Schroders. He has
Schroder Short-Term for each Fund been an employee of Schroders
Municipal Bond Fund since fall 2003. Formerly, Vice
President of Deutsche Asset
Management (1999-2003), and Manager
of Trading and Sales, Commerce
Capital Markets (1995-1999).

HOW THE FUNDS' SHARES ARE PRICED

Each Fund calculates the net asset value of its Investor Shares by dividing the
total value of its assets attributable to its Investor Shares, less its
liabilities attributable to those shares, by the number of Investor Shares
outstanding. Each Fund values its Investor Shares as of the close of trading on
the New York Stock Exchange (the "Exchange") (normally 4:00 p.m., Eastern Time)
each day the Exchange is open. The Trusts expect that days, other than weekend
days, when the Exchange will not be open are New Year's Day, Martin Luther King,
Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day, and Christmas Day. Securities for which market quotations
are readily available are valued at prices which, in the opinion of Schroders,
most nearly represent the market values of such securities. Securities for which
market values are not readily available, or for which the Funds' adviser
believes the market value is unreliable (including, for example, certain foreign
securities, thinly traded securities, initial public offerings, or when there is
a particular event that may affect the value of a security), are valued by
Schroders at their fair values pursuant to guidelines established by the Board
of Trustees, and under the ultimate supervision of the Board of Trustees,
generally by reference to other securities or indexes. For instance, a pricing
service may recommend a fair value based generally on prices of comparable
securities. Unlisted securities for which market quotations are readily
available generally are valued at the most recently reported sale prices on any
day or, in the absence of a reported sale price, at mid-market prices. Options
and futures contracts traded on a securities exchange or board of trade
generally are valued at the last reported sales price or, in the absence of a
sale, at the closing mid-market price on the principal exchange where they are
traded. Options and futures not traded on a securities exchange or board of
trade for which over-the-counter market quotations are readily available shall
be valued at the most recently reported mid-market price. If such prices are not
available, unlisted securities and derivatives are valued by Schroders at their
fair values based on quotations from dealers, and if such quotations are not
available, based on factors in the market where such securities trade, such as
security and bond prices, interest rates, and currency exchange rates. Certain
Funds may invest in foreign securities that are primarily listed on foreign
exchanges that trade on weekends and other days when the Fund does not price its
shares. As a result, the value of the Fund's portfolio securities may change on
days when the price of the Fund's shares is not calculated. The price of the
Fund's shares will reflect any such changes when the price of the Fund's shares
is next calculated, which is the next day the Exchange is open. The Funds may
use fair value pricing more frequently for securities primarily traded in
non-U.S. markets because, among other things, most foreign markets close well
before the Fund values its securities. The earlier close of these foreign
markets gives rise to the possibility that significant events, including broad
market moves, may have occurred in the interim. Schroder Emerging Market Equity
Fund and Schroder International Alpha Fund's investments may be priced based on
fair values provided by a third party fair valuation vendor, based on certain
factors and methodologies applied by such vendor, in the event that there is
movement in the U.S. market that exceeds a specific threshold established by the
Schroders' Fair Value Committee in consultation with the Board of Trustees,
pursuant to guidelines established by the Board of Trustees, and under the
ultimate supervision of the Board of Trustees. Short-term investments that will
mature within 60 days are valued by Schroders using amortized cost pursuant to
procedures adopted by the Board of Trustees. The net asset value of a Fund's
Investor Shares may differ from that of its Advisor Shares due to differences in
the expenses of Investor Shares and Advisor Shares.

HOW TO BUY SHARES

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

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

Each Fund sells its Investor Shares at their net asset value next determined
after the applicable Fund, its transfer agent, Boston Financial Data Services,
Inc. ("BFDS"), or an authorized broker or financial institution (as described
below) receives your request in good order (meaning that the request meets the
requirements set out below and in the Account Application, and otherwise meets
the requirements implemented from time to time by the applicable Fund's transfer
agent or the Fund). In order for you to receive a Fund's next determined net
asset value, the Fund, BFDS or the authorized broker or financial institution
must receive your order before the close of trading on the Exchange (normally
4:00 p.m., Eastern Time). Each Trust reserves the right to reject any order to
purchase Investor Shares of any of its Funds. Each Trust generally expects to
inform any persons that their purchase has been rejected within 24 hours.

The minimum investments for initial and additional purchases of Investor Shares
of a Fund are as follows:

INITIAL INVESTMENT ADDITIONAL INVESTMENTS
------------------ ----------------------
REGULAR ACCOUNTS $250,000 $1,000

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

Investor Shares of the Funds are intended for purchase by investors making a
minimum initial investment of $250,000 and purchasing shares directly from the
Fund. Advisor Shares of the Funds are offered through another prospectus and are
intended for investors making a minimum initial investment of $2,500 through a
regular account or a traditional or Roth IRA and purchasing shares through a
financial intermediary.

The Funds do not issue share certificates.

Each Trust may suspend the offering of Investor Shares of its Funds for any
period of time. Each Trust may change any investment minimum from time to time.
Purchases by check. You may purchase Investor Shares of a Fund by mailing a
check (in U.S. dollars) payable to the Fund. If you wish to purchase Investor
Shares of two or more Funds, make your check payable to Schroder Mutual Funds
and include written instructions as to how the amount of your check should be
allocated among the Funds whose shares you are purchasing. Schroder Mutual Funds
will not accept third-party

checks or starter checks. You should direct your check and your completed
Account Application as follows:

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

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

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

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

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

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

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

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

Certain brokers or other financial institutions may accept purchase orders for
Investor Shares on behalf of the Funds. Such brokers or financial institutions
may designate other intermediaries to accept purchase orders on behalf of the
Funds. For purposes of pricing,

a Fund will be deemed to have received a purchase order when an authorized
broker or financial institution or, if applicable, a broker or financial
institution's authorized designee, receives the order. Agreements between such
brokers or financial institutions and Schroder Fund Advisors Inc., the Trusts'
distributor, provide that these orders will be priced at the Fund's net asset
value next determined after they are received by the broker or financial
institution or authorized designee. Orders received in good order prior to the
close of the Exchange on any day the Exchange is open for trading will receive
the net asset value next determined as of the end of that day. Orders received
after that time will receive the next day's net asset value.

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

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

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

If correspondence to the shareholder's address of record is returned, then,
unless BFDS determines the shareholder's new address, BFDS will reinvest
dividends and other distributions returned to it in the applicable Fund(s), and
if the correspondence included checks, the checks will be canceled and
re-deposited to the shareholder's account at then-current net asset value.

HOW TO SELL SHARES

When you may redeem. You may sell your Investor Shares back to a Fund on any day
the Exchange is open by sending a letter of instruction or stock power form to
Schroder Mutual Funds, or by calling BFDS at (800) 464-3108. Redemption requests
received in good order by Schroder Mutual Funds, BFDS, or an authorized broker
or financial institution (as described below) prior to the close of the Exchange
on any day the Exchange is open for trading will be priced at the net asset
value next determined as of the end of that day. Orders received after that time
will receive the next day's net asset value. A redemption request is in good
order if it includes the exact name in which the shares are registered, the
investor's account number, and the number of shares or the dollar amount of
shares to be redeemed, and, for written requests, if it is signed in accordance
with the account registration. A bank, broker-dealer, or certain other financial
institutions must guarantee the signature(s) of all account holders for any
redemption request in excess of $50,000, or for any amount being sent to an
address or bank account that is not registered on the account. The Stamp 2000
Medallion Guarantee is the only acceptable form of guarantee. An investor can
obtain this signature guarantee from a commercial bank, savings bank, credit
union, or broker-dealer that participates in one of the Medallion signature
guarantee programs. You may redeem your shares by telephone only if you elected
the telephone redemption privilege option on your Account Application or
otherwise in writing. Telephone redemption proceeds will be sent only to you at
an address on record with the Fund for at least 30 days. Unless otherwise
agreed, you may only exercise the telephone redemption privilege to redeem
shares worth not more than $50,000. Each Trust may require additional
documentation from shareholders that are corporations, partnerships, agents,
fiduciaries, surviving joint owners, those acting through powers of attorney, or
similar delegation.

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

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

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

or financial institution or authorized designee. Orders received in good order
prior to the close of the Exchange on any day the Exchange is open for trading
will receive the net asset value next determined as of the end of that day.
Orders received after that time will receive the next day's net asset value.

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

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

Suspension. Each Trust may suspend the right of redemption of a Fund or postpone
payment by a Fund during any period when: (1) trading on the Exchange is
restricted, as determined by the Securities and Exchange Commission ("SEC"), or
the Exchange is closed; (2) the SEC has by order permitted such suspension; or
(3) an emergency (as defined by rules of the SEC) exists, making disposal of
portfolio investments or determination of a Fund's net asset value not
reasonably practicable.

Redemptions in kind. The Trusts do not expect to redeem Investor Shares in kind
under normal circumstances. If a Trust redeems your Investor Shares in kind, you
should expect to incur brokerage expenses and other transaction costs upon the
disposition of the securities you receive from the Fund. In addition, the price
of those securities may change between the time when you receive the securities
and the time when you are able to dispose of them. Schroder Capital Funds
(Delaware) has agreed to redeem Investor Shares of Schroder International Alpha
Fund and Schroder U.S. Opportunities Fund solely in cash up to the lesser of
$250,000 or 1% of the Fund's net assets attributable to Investor Shares during
any 90-day period for any one shareholder. In consideration of the best
interests of the remaining shareholders, Schroder Capital Funds (Delaware) may
pay any redemption proceeds exceeding this amount for any of these Funds in
whole or in part by a distribution in kind of securities held by the applicable
Fund in lieu of cash. Schroder Global Series Trust and Schroder Series Trust may
pay redemption proceeds in any amount with respect to Schroder Emerging Market
Equity Fund, Schroder North American Equity Fund, Schroder U.S. Small and Mid
Cap Opportunities Fund, Schroder Enhanced Income Fund, Schroder Total Return
Fixed Income Fund, Schroder Municipal Bond Fund, or Schroder Short-Term
Municipal Bond Fund in whole or in part by a distribution in kind of securities
held by the applicable Fund in lieu of cash.

General. If you request that your redemption proceeds be sent to you at an
address other than your address of record, or to another party, you must include
a signature guarantee for each signature, by an eligible signature guarantor,
such as a member firm of a national securities exchange or a commercial bank or
trust company located in the United States. If you are a resident of a foreign
country, another type of certification may be required. For more details, please
contact BFDS at (800) 464-3108, your Schroders client representative or your
financial intermediary. Each Trust may require corporations, fiduciaries, and
other types of shareholders to supply additional documents which support their
authority to effect a redemption. In an effort to prevent unauthorized or
fraudulent redemption requests by telephone, BFDS will follow reasonable
procedures to confirm that telephone instructions

are genuine. BFDS and the Trusts generally will not be liable for any losses due
to unauthorized or fraudulent purchase or redemption requests, but the
applicable party or parties may be liable if they do not follow these
procedures.

Redemption fee. Schroder Emerging Market Equity Fund, Schroder International
Alpha Fund, Schroder U.S. Opportunities Fund, and Schroder U.S. Small and Mid
Cap Opportunities Fund each imposes a 2.00% redemption fee on shares redeemed
(including in connection with an exchange) two months or less from their date of
purchase. The fee is not a sales charge (load); it is paid directly to the Fund.
The purpose of the redemption fee is principally to discourage market timing,
and also to help defray costs incurred by a Fund in connection with short-term
trading by investors in its shares.

To the extent that the redemption fee applies, the price you will receive when
you redeem your shares of a Fund is the net asset value next determined after
receipt of your redemption request in good order, minus the redemption fee. The
redemption fee is not assessed on shares acquired through the reinvestment of
dividends or distributions paid by the Fund, or shares redeemed through
designated systematic withdrawal plans. The redemption fee does apply to IRAs,
and may also apply to shares held in employer-sponsored retirement accounts
(such as 401(k), 403(b), Keogh, profit sharing, SIMPLE IRA, SEP-IRA and money
purchase pension accounts) and shares in retirement plans held in broker omnibus
accounts.

For purposes of computing the redemption fee, redemptions by a shareholder to
which the fee applies will be deemed to have been made on a first-purchased,
first-redeemed basis.

EXCHANGES

You can exchange your Investor Shares of a Fund for Investor Shares of other
funds in the Schroder family of funds at any time at their respective net asset
values. An exchange of shares of Schroder Emerging Market Equity Fund, Schroder
International Alpha Fund, Schroder U.S. Opportunities Fund, and Schroder U.S.
Small and Mid Cap Opportunities Fund may be subject to a redemption fee of 2.00%
as described above under "Redemption Fee" (such that the exchange would be made
at net asset value minus any redemption fee). The Trusts would treat the
exchange as a sale of your Investor Shares, and any gain on the exchange will
generally be subject to tax. For a listing of the Schroder funds available for
exchange and to exchange Investor Shares, please call (800) 464-3108. (From
outside the United States, please call (617) 483-5000 and ask to speak with a
representative of the Schroder Mutual Funds.) In order to exchange shares by
telephone, you must complete the appropriate section of the Account Application.
The Trusts and Schroders reserve the right to change or suspend the exchange
privilege at any time. Schroders would notify shareholders of any such change or
suspension.

DIVIDENDS AND DISTRIBUTIONS

Schroder Enhanced Income Fund, Schroder Total Return Fixed Income Fund, Schroder
Municipal Bond Fund, and Schroder Short-Term Municipal Bond Fund each declare
dividends from net investment income daily and distribute these dividends
monthly. Schroder Emerging Market Equity Fund, Schroder International Alpha
Fund, Schroder North American Equity Fund, Schroder U.S. Opportunities Fund, and
Schroder U.S. Small and Mid Cap Opportunities Fund each declare dividends from
net investment income and distribute these dividends annually. All Funds
distribute any net investment income and any net realized capital gain at least
annually. All Funds make distributions from net capital gain after applying any
available capital loss carryovers.

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

YOU CAN CHOOSE FROM FOUR DISTRIBUTION OPTIONS:

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

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

o For each Fund except Schroder North American Equity Fund, receive
distributions from net investment income in additional Investor Shares
of your Fund while receiving capital gain distributions in cash; or

o Receive all distributions in cash.

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

FREQUENT PURCHASES AND REDEMPTIONS OF FUND SHARES

Excessive trading can hurt Fund performance, operations, and shareholders. The
Board of Trustees of each of the Funds has adopted policies and procedures with
respect to frequent purchases and redemptions of Fund shares by Fund
shareholders. Each Fund discourages, and does not accommodate, frequent
purchases and redemption of the Fund's shares to the extent Schroders believes
that such trading is harmful to a Fund's shareholders, although a Fund will not
necessarily prevent all frequent trading in its shares. Each Fund reserves the
right, in its discretion, to reject any purchase, in whole or in part
(including, without limitation, purchases by persons whose trading activity
Schroders believes could be harmful to the Fund). Each Trust or Schroders may
also limit the amount or number of exchanges or reject any purchase by exchange
if the Trust or Schroders believes that the investor in question is engaged in
"market timing activities" or similar activities that may be harmful to a Fund
or its shareholders, although the Trusts and Schroders have not established any
maximum amount or number of such exchanges that may occur in any period. Each
Trust generally expects to inform any persons that their purchase has been
rejected within 24 hours. In addition, the Boards of Trustees of Schroder
Emerging Market Equity Fund, Schroder International Alpha Fund, Schroder U.S.
Opportunities Fund, and Schroder U.S. Small and Mid Cap Opportunities Fund have
established a 2.00% redemption fee for shares of these Funds held for two months
or less from their date of purchase. See "How to Sell Shares - Redemption Fee"
for further information. The ability of Schroders to monitor trades that are
placed through omnibus or other nominee accounts is limited in those instances
in which the broker, retirement plan administrator, or fee-based program sponsor
does not provide complete information to Schroders regarding underlying
beneficial owners of Fund shares. Each Trust or its distributor may enter into
written agreements with financial intermediaries who hold omnibus accounts that
require the intermediaries to provide certain information to the Trust regarding
shareholders who hold shares through such accounts and to restrict or prohibit
trading in Fund shares by shareholders identified by the Trust as having engaged
in trades that violate the Trusts' "market timing" policies. Each Trust or
Schroders may take any steps they consider appropriate in respect of frequent
trading in omnibus accounts, including seeking additional information from the
holder of the omnibus account or potentially closing the omnibus account
(although there can be no assurance that the Trust or Schroders would do so).
Please see the applicable SAI for additional information on frequent purchases
and redemptions of Fund shares. There can be no assurance that the Funds or
Schroders will identify all harmful purchase or redemption activity, or market
timing or similar activities, affecting the Funds, or that the Funds or
Schroders will be successful in limiting or eliminating such activities.

PAYMENT OF FEES

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

TAXES

TAXES ON DIVIDENDS AND DISTRIBUTIONS. For federal income tax purposes,
distributions of investment income are taxed as ordinary income. Taxes on
distributions of capital gains are determined by how long a Fund owned the
investments that generated the gains, rather than how long you have owned your
shares. Distributions of net capital gains from the sale of investments that a
Fund has held for more than one year and that are properly designated by the
Fund as capital gain dividends will be taxable as long-term capital gains.
Distributions of gains from the sale of investments that a Fund owned for one
year or less and gains on the sale of bonds characterized as a market discount
sale will be taxable as ordinary income. For taxable years beginning before
January 1, 2009, distributions of investment income designated by a Fund as
derived from "qualified dividend income" will be taxed in the hands of
individuals at rates applicable to long-term capital gains, provided holding
period and other requirements are met at both the shareholder and Fund level.
Schroder Enhanced Income Fund, Schroder Total Return Fixed Income Fund, Schroder
Municipal Bond Fund, and Schroder Short-Term Municipal Bond Fund do not expect a
significant portion of their distributions to be derived from qualified dividend
income.

For Schroder Municipal Bond Fund and Schroder Short-Term Municipal Bond Fund,
distributions designated as "exempt-interest dividends" will generally not be
subject to federal income tax. Gains realized by a Fund on the sale or exchange
of investments the income from which is tax-exempt will be taxable to
shareholders. Shareholders of the Funds who receive social security or railroad
retirement benefits should consult their tax advisor to determine what effect,
if any, an investment in the Funds may have on the federal taxation of their
benefits. In addition, an investment in the Funds may result in liability for
federal alternative minimum tax, both for individual and corporate shareholders.

Distributions by a Fund to retirement plans that qualify for tax-exempt
treatment under federal income tax laws will not be taxable. Special tax rules
apply to investments through such plans. You should consult your tax advisor to
determine the suitability of a Fund as an investment through such a plan and the
tax treatment of distributions (including distributions of amounts attributable
to an investment in a Fund) from such a plan.

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

In general, dividends (other than capital gain dividends) paid to a shareholder
that is not a "U.S. person" within the meaning of the Internal Revenue Code (a
"foreign person"), are subject to withholding of U.S. federal income tax at a
rate of 30% (or lower applicable treaty rate). However, under the American Jobs
Creation Act of 2004, effective for taxable years of the Funds beginning after
December 31, 2004 and before January 1, 2008, the Funds generally will not be
required to withhold any amounts with respect to distributions of (i) U.S.
source interest income that would not be subject to U.S. federal income tax if
earned directly by an individual foreign person, and (ii) net short-term capital
gains in excess of net long-term capital losses, in each case to the extent such
distributions are properly designated by the Funds.

Long-term capital gain rates applicable to individuals have been temporarily
reduced - in general, to 15% with lower rates applying to taxpayers in the 10%
and 15% rate brackets - for taxable years beginning before January 1, 2009.

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

FOREIGN TAXES. A Fund's investments in foreign securities may be subject to
foreign withholding or other taxes. In that case, the Fund's return on those
securities would be decreased. Shareholders of Schroders Funds that invest more
than 50% of their assets in foreign securities may be entitled to claim a credit
or deduction with respect to foreign taxes. Shareholders of other Schroders
funds generally will not be entitled to claim a credit or deduction with respect
to foreign taxes. In addition, investments in foreign securities may increase or
accelerate a Fund's recognition of ordinary income and may affect the timing or
amount of a Fund's distributions.

DERIVATIVES. A Fund's use of derivatives may affect the amount, timing, and
character of distributions to shareholders and, therefore, may increase the
amount of taxes payable by shareholders.

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

DISCLOSURES OF FUND PORTFOLIO INFORMATION

Please see the applicable Fund's SAI for a description of a Fund's policies and
procedures regarding the persons to whom the Funds or Schroders may disclose a
Fund's portfolio securities positions, and under which circumstances.

FINANCIAL HIGHLIGHTS

The financial highlights below are intended to help you understand financial
performance of each of the Schroder International Alpha Fund, Schroder North
American Equity Fund, Schroder U.S. Opportunities Fund, Schroder Enhanced Income
Fund, Schroder Total Return Fixed Income Fund, Schroder Municipal Bond Fund, and
Schroder Short-Term Municipal Bond Fund for the past five years or, if more
recent, since their inception. Certain information reflects financial results
for a single Fund share. The total returns represent the total return for an
investment in Investor Shares of a Fund, assuming reinvestment of all dividends
and distributions.

For all periods presented, the financial highlights have been audited by
PricewaterhouseCoopers LLP, independent registered public accountant to the
Funds. The audited financial statements for the Funds and the related
independent registered public accountant's report are contained in the Funds'
combined Annual Report and are incorporated by reference into each Fund's SAI.
Copies of the Annual Report may be obtained without charge by writing the Funds
at P.O. Box 8507, Boston, Massachusetts 02266, or by calling (800) 464-3108. The
Funds' Annual Report is also available on the following website:
www.schroderfunds.com.

[THIS PAGE INTENTIONALLY LEFT BLANK]

FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING
THROUGH THE PERIOD ENDED OCTOBER 31

NET REALIZED
AND
UNREALIZED DISTRIBUTIONS
GAINS FROM NET GAIN
(LOSSES) ON ON
NET ASSET NET INVESTMENTS DIVIDENDS INVESTMENTS
VALUE, INVESTMENT AND FOREIGN TOTAL FROM FROM NET AND FOREIGN DISTRIBUTIONS
BEGINNING INCOME CURRENCY INVESTMENT INVESTMENT CURRENCY FROM RETURN
OF PERIOD (LOSS) TRANSACTIONS OPERATIONS INCOME TRANSACTIONS OF CAPITAL
--------- ---------- ------------ ---------- ---------- ------------- -------------

INTERNATIONAL
ALPHA FUND
2005 $ 7.08 $ 0.14 $ 1.22 $ 1.36 $(0.09) $ -- $--
2004 6.37 0.09 0.75 0.84 (0.13) -- --
2003 5.37 0.10 1.08 1.18 (0.12) (0.06) --
2002 7.26 0.04 (1.13) (1.09) -- (0.80) --
2001 16.74 0.09 (2.38) (2.29) (0.31) (6.88) --

NORTH AMERICAN
EQUITY FUND
2005(b) $11.00 $ 0.06 $ 0.63 $ 0.69 $(0.05) $(0.49) $--
2005(c) 10.88 0.22 0.62 0.84 (0.20) (0.52) --
2004(c)(d) 10.00 0.09 0.86 0.95 (0.04) (0.03) --

U.S.
OPPORTUNITIES
FUND
2005 $19.58 --(e) $ 2.11* $ 2.11 $ -- $(2.03) $--
2004 16.18 --(e) 3.40* 3.40 -- -- --
2003 12.57 (0.16) 4.11 3.95 -- (0.34) --
2002 15.17 (0.10) (1.15) (1.25) -- (1.35) --
2001 18.01 (0.13) 0.59 0.46 -- (3.30) --

ENHANCED
INCOME FUND
2005(f) $10.00 $ 0.26 $(0.04) $ 0.22 $(0.26) $ -- $--

TOTAL RETURN
FIXED INCOME
FUND**
2005(f) $10.00 $ 0.30 $(0.15) $ 0.15 $(0.30) $ -- $--

MUNICIPAL BOND
FUND
2005 $10.12 $0.36 $(0.15) $ 0.21 $(0.36) $ -- $--
2004(g) 10.00 0.24 0.11 0.35 (0.23) -- --

SHORT-TERM
MUNICIPAL BOND
FUND
2005 $ 9.97 $0.29 $(0.05) $ 0.24 $(0.29) $ -- $--
2004(g) 10.00 0.15 (0.03) 0.12 (0.15) -- --

* Includes redemption fees. Amount was less than $0.01 per share.

** Schroder U.S. Core Fixed Income Fund was renamed Schroder Total Return
Fixed Income Fund effective May 15, 2006.

(a) Total returns would have been lower had certain Fund expenses not been
waived or reimbursed during the periods shown. Total return calculations
for a period of less than one year are not annualized.

(b) For the six months ended October 31, 2005, the North American Equity Fund's
fiscal year end changed from April 30 to October 31. All ratios for the
period have been annualized, except for the Portfolio Turnover Rate.

(d) Commenced operations on September 17, 2003. All ratios for the period have
been annualized, except for the Portfolio Turnover Rate.

(e) Amount was less than $(0.01) per share.

(f) Commenced operations on December 31, 2004. All ratios for the period have
been annualized, except for the Portfolio Turnover Rate.

(g) Commenced operations on December 31, 2003. All ratios for the period have
been annualized, except for the Portfolio Turnover Rate.

RATIO OF NET
RATIO OF RATIO OF INVESTMENT
EXPENSES TO EXPENSES TO INCOME (LOSS)
AVERAGE NET AVERAGE NET TO AVERAGE
ASSETS ASSETS NET ASSETS
(INCLUDING (EXCLUDING (INCLUDING
WAIVERS, WAIVERS, WAIVERS,
NET ASSET NET ASSETS, REIMBURSE- REIMBURSE- REIMBURSE-
TOTAL VALUE, END TOTAL END OF PERIOD MENTS AND MENTS AND MENTS AND PORTFOLIO
DISTRIBUTIONS OF PERIOD RETURN(A) (000) OFFSETS) OFFSETS) OFFSETS) TURNOVER RATE
------------- ---------- --------- ------------- ----------- ----------- ------------- -------------

$(0.09) $ 8.35 19.45% $ 6,545 1.25% 3.88% 1.85% 126%
(0.13) 7.08 13.31 5,233 1.25 3.36 1.16 136
(0.18) 6.37 22.66 6,242 1.25 3.27 2.09 50
(0.80) 5.37 (17.20) 6,427 1.14 1.94 0.60 111
(7.19) 7.26 (24.96) 20,850 0.99 1.41 0.57 146
$(0.54) $11.15 6.35% $1,303,276 0.35% 0.35% 1.39% 30%
(0.72) 11.00 7.59 883,146 0.33 0.33 1.79 89
(0.07) 10.88 9.56 890,929 0.37 0.37 1.29 54
$(2.03) $19.66 11.26% $ 140,467 1.13% 1.13% (0.29)% 107%
-- 19.58 21.01 73,679 1.62 1.62 (0.83) 144
(0.34) 16.18 32.13 46,783 1.93 2.25 (1.22) 162
(1.35) 12.57 (9.91) 41,857 1.49 1.50 (0.75) 81
(3.30) 15.17 3.25 28,096 1.49 1.83 (0.79) 105
$(0.26) $ 9.96 2.17% $ 101,106 0.40% 0.82% 3.08% 61%
$(0.30) $ 9.85 1.51% $ 9,138 0.40% 3.05% 3.61% 571%
$(0.36) $ 9.97 2.14% $ 96,114 0.55% 0.93% 3.70% 27%
(0.23) 10.12 3.53 45,781 0.55 1.41 2.82 46
$(0.29) $ 9.92 2.47% $ 131,062 0.55% 0.85% 3.03% 36%
(0.15) 9.97 1.26 74,031 0.55 1.30 1.95 17

USA PATRIOT ACT

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

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

INVESTMENT SUB-ADVISER
SCHRODER EMERGING MARKET EQUITY FUND, SCHRODER INTERNATIONAL ALPHA FUND, AND
SCHRODER NORTH AMERICAN EQUITY FUND
Schroder Investment Management North America Limited
31 Gresham Street
London EC2V 7QA

ADMINISTRATOR
SCHRODER EMERGING MARKET EQUITY FUND, SCHRODER U.S. SMALL AND MID CAP
OPPORTUNITIES FUND, SCHRODER ENHANCED INCOME FUND,
SCHRODER TOTAL RETURN FIXED INCOME FUND,
SCHRODER MUNICIPAL BOND FUND, AND SCHRODER SHORT-TERM MUNICIPAL BOND FUND
SEI Investments Global Funds Services
1 Freedom Valley Drive
Oaks, Pennsylvania 19456

ADMINISTRATOR
SCHRODER NORTH AMERICAN EQUITY FUND
Schroder Fund Advisors, Inc.
875 Third Avenue
New York, New York 10022

SUB-ADMINISTRATOR
SCHRODER INTERNATIONAL ALPHA FUND, SCHRODER NORTH AMERICAN EQUITY FUND,
AND SCHRODER U.S. OPPORTUNITIES FUND
SEI Investments Global Funds Services
1 Freedom Valley Drive
Oaks, Pennsylvania 19456

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

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

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

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

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

SCHRODER CAPITAL FUNDS (DELAWARE)
Schroder International Alpha Fund
Schroder U.S. Opportunities Fund

SCHRODER SERIES TRUST
Schroder Emerging Market Equity Fund
Schroder U.S. Small and Mid Cap Opportunities Fund
Schroder Enhanced Income Fund
Schroder Total Return Fixed Income Fund
Schroder Municipal Bond Fund
Schroder Short-Term Municipal Bond Fund

SCHRODER GLOBAL SERIES TRUST
Schroder North American Equity Fund

Schroder Emerging Market Equity Fund and Schroder U.S. Small and Mid Cap
Opportunities Fund have a SAI which includes additional information about the
Funds. Schroder International Alpha Fund, Schroder North American Equity Fund,
Schroder U.S. Opportunities Fund, Schroder Enhanced Income Fund, Schroder Total
Return Fixed Income Fund, Schroder Municipal Bond Fund, and Schroder Short-Term
Municipal Bond Fund each has a SAI and annual and semi-annual reports to
shareholders which contain additional information about the applicable Fund. In
the applicable Fund's annual report, you will find a discussion or the market
conditions and investment strategies that significantly affected the Fund's
performance during its last fiscal year. The SAIs and the financial statements
included in the Funds' most recent annual report to shareholders are
incorporated by reference into this Prospectus, which means they are part of
this Prospectus for legal purposes. You may get free copies of these materials,
request other information about the Funds, or make shareholder inquiries by
calling (800) 464-3108. From outside the United States, please call (617)
483-5000 and ask to speak with a representative of the Schroder Mutual Funds.
The Funds' SAIs and annual and semi-annual reports are also available on the
following website: www.schroderfunds.com.

You may review and copy information about each Fund, including its SAI, at the
Securities and Exchange Commission's public reference room in Washington, D.C.
You may call the Commission at 1-800-SEC-0330 for information about the
operation of the public reference room. You may also access reports and other
information about each Fund on the Commission's Internet site at www.sec.gov.
You may get copies of this information, with payment of a duplication fee, by
electronic request to the following e-mail address: publicinfo@sec.gov or by
writing the Public Reference Section of the Commission, Washington, D.C.
20549-0102. You may need to refer to the Trusts' file number under the
Investment Company Act, which are: Schroder Capital Funds (Delaware): 811-1911;
Schroder Series Trust: 811-7840; and Schroder Global Series Trust: 811-21364.

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

File No. 811-1911 - Schroder Capital Funds (Delaware)
File No. 811-7840 - Schroder Series Trust
File No. 811-21364 - Schroder Global Series Trust

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

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

PROSPECTUS
MAY 15, 2006

EQUITY FUNDS

SCHRODER EMERGING MARKET EQUITY FUND
SCHRODER INTERNATIONAL ALPHA FUND
SCHRODER NORTH AMERICAN EQUITY FUND
SCHRODER U.S. OPPORTUNITIES FUND
SCHRODER U.S. SMALL AND MID CAP OPPORTUNITIES FUND

TAXABLE FIXED INCOME FUNDS

SCHRODER ENHANCED INCOME FUND
SCHRODER TOTAL RETURN FIXED INCOME FUND

TAX-EXEMPT FIXED INCOME FUNDS

SCHRODER MUNICIPAL BOND FUND
SCHRODER SHORT-TERM MUNICIPAL BOND FUND

Advisor Shares

This Prospectus describes nine mutual funds offered by Schroder Capital Funds
(Delaware), Schroder Series Trust, and Schroder Global Series Trust (each, a
"Trust" and collectively, the "Trusts").

SCHRODER INTERNATIONAL ALPHA FUND seeks long-term capital appreciation
through investment in securities markets outside the United States.

SCHRODER NORTH AMERICAN EQUITY FUND seeks capital growth by investing
primarily in equity securities of companies in the United States.

SCHRODER U.S. OPPORTUNITIES FUND seeks capital appreciation by investing
primarily in equity securities of companies in the United States with
market capitalizations of $2.2 billion or less.

SCHRODER U.S. SMALL AND MID CAP OPPORTUNITIES FUND seeks capital
appreciation by investing primarily in equity securities of small and mid
cap companies in the United States.

SCHRODER CAPITAL FUNDS (DELAWARE)
SCHRODER SERIES TRUST
SCHRODER GLOBAL SERIES TRUST

TABLE OF CONTENTS

PAGE
----
SUMMARY INFORMATION...................................................... 1
SCHRODER EMERGING MARKET EQUITY FUND.................................. 2
SCHRODER INTERNATIONAL ALPHA FUND..................................... 6
SCHRODER NORTH AMERICAN EQUITY FUND................................... 10
SCHRODER U.S. OPPORTUNITIES FUND...................................... 14
SCHRODER U.S. SMALL AND MID CAP OPPORTUNITIES FUND.................... 18
SCHRODER ENHANCED INCOME FUND......................................... 21
SCHRODER TOTAL RETURN FIXED INCOME FUND............................... 25
SCHRODER MUNICIPAL BOND FUND.......................................... 30
SCHRODER SHORT-TERM MUNICIPAL BOND FUND............................... 34
FEES AND EXPENSES........................................................ 38
PRINCIPAL RISKS OF INVESTING IN THE FUNDS................................ 41
NON-PRINCIPAL INVESTMENT STRATEGIES AND TECHNIQUES....................... 54
MANAGEMENT OF THE FUNDS.................................................. 56
HOW THE FUNDS' SHARES ARE PRICED......................................... 61
HOW TO BUY SHARES........................................................ 62
HOW TO SELL SHARES....................................................... 66
EXCHANGES................................................................ 69
ADDITIONAL INFORMATION ABOUT ADVISOR SHARES; DISTRIBUTION PLANS.......... 70
DIVIDENDS AND DISTRIBUTIONS.............................................. 71
FREQUENT PURCHASES AND REDEMPTIONS OF FUND SHARES........................ 72
PAYMENT OF FEES.......................................................... 73
TAXES.................................................................... 74
DISCLOSURES OF FUND PORTFOLIO INFORMATION................................ 76
FINANCIAL HIGHLIGHTS..................................................... 77
USA PATRIOT ACT.......................................................... 80

SUMMARY INFORMATION

The summary for each of Schroder Enhanced Income Fund, Schroder Total Return
Fixed Income Fund, Schroder Municipal Bond Fund, and Schroder Short-Term
Municipal Bond Fund includes a bar chart that shows the investment returns of
that Fund's Advisor Shares for each of its last ten full calendar years of
operation (or for each of its full calendar years since the Fund commenced
operations, if shorter). The summary for each of Schroder International Alpha
Fund, Schroder North American Equity Fund, and Schroder U.S. Opportunities Fund
includes a bar chart that shows the investment returns of that Fund's Investor
Shares, adjusted to reflect the 12b-1 fees paid by the Advisor Shares, for each
of its last ten full calendar years of operation (or for each of its full
calendar years since the Fund commenced operations, if shorter). The table
following each bar chart shows how the Fund's average annual returns for the
last year, for the last five years, and for the last ten years or the life of
the Fund (as applicable), compare to a broad-based securities market index. The
bar chart and table provide some indication of the risks of investing in a Fund
by comparing the Fund's performance to a broad measure of market performance.

SCHRODER EMERGING MARKET EQUITY FUND

o INVESTMENT OBJECTIVE. To seek capital appreciation.

o PRINCIPAL RISKS.

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

Also, there may be less publicly available information about small and mid
cap companies or less market interest in their securities as compared to
larger companies, and it may take longer for the price of the securities to
reflect the full value of their issuers' earnings potential or assets.

o CONVERTIBLE SECURITIES RISK. The Fund may invest in preferred stocks that
are convertible into common stocks, and so subject to the risks of
investments in both preferred and common stocks.

when it is unable to invest significantly or at all in initial public
offerings may be lower than during periods when the Fund is able to do so.
The prices of securities sold in initial public offerings can be highly
volatile.

o LIQUIDITY RISK. The Fund may find it difficult to sell or to close out
certain investments at favorable prices or times. Illiquid securities may
be highly volatile and difficult to value.

Performance Information. The Fund recently commenced operations and does not yet
have historical investment performance.

SCHRODER INTERNATIONAL ALPHA FUND

o INVESTMENT OBJECTIVE. Long-term capital appreciation through investment in
securities markets outside the United States.

The Fund also may do the following:

o Invest in securities of issuers domiciled or doing business in
"emerging market" countries.

o PRINCIPAL RISKS.

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

o CONVERTIBLE SECURITIES RISK. The Fund may invest in preferred stocks that
are convertible into common stocks, and so subject to the risks of
investments in both preferred and common stocks.

o SMALL AND MID CAP COMPANIES RISK. Small companies tend to be more
vulnerable to adverse developments than larger companies. The Fund may
invest in micro-cap companies, which tend to be particularly sensitive to
the risks associated with small companies. Small companies may have limited
product lines, markets, or financial resources, or may depend on a limited
management group. Their securities may trade less frequently and in limited
volumes. As a result, the prices of these securities may fluctuate more
than the prices of securities of larger, more widely traded companies.
Also, there may be less publicly available information about small and mid
cap companies or less market interest in their securities as compared to
larger companies, and it may take longer for the price of the securities to
reflect the full value of their issuers' earnings potential or assets.

o LIQUIDITY RISK. The Fund may find it difficult to sell or to close out
certain investments at favorable prices or times. Illiquid securities may
be highly volatile and difficult to value.

Performance Information.(1) (2)

[GRAPHIC OMITTED]

9.65% 3.08% 13.24% 30.66% -2.54% -25.96% -20.00% 32.53% 15.08% 18.00%
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

(1) Advisor Shares of the Fund are offered commencing May 15, 2006. The
performance information provided above and in the table below for periods prior
to May 15, 2006 reflects the performance of the Investor Shares of the Fund,
offered through a separate prospectus, adjusted to reflect the 12b-1 fees paid
by Advisor Shares.

(2) Effective April 1, 2006, the combined advisory and administrative fees of
the Fund increased to 0.975% per annum. If the Fund had paid such higher fees
during the periods shown above, the returns shown above and in the table below
would have been lower. See "Management of the Funds - Management Fees."

During the periods shown above, the highest quarterly return was 21.49% for the
quarter ended December 31, 1999, and the lowest was -22.35% for the quarter
ended September 30, 2002.

AVERAGE ANNUAL TOTAL RETURNS+
(FOR THE PERIOD ENDED DECEMBER 31, 2005) One Year Five Years Ten Years
------------------------------------------------------ -------- ---------- ---------

Return Before Taxes 18.00% 1.29% 5.68%
Return After Taxes on Distributions (1) 17.22% -0.18% 2.39%
Return After Taxes on Distributions 11.68% 0.11% 3.26%
and Sale of Fund Shares (1)
Morgan Stanley Capital International EAFE Index (2) 13.54% 4.55% 5.84%
(reflects no deduction for fees, expenses or taxes)

PAST PERFORMANCE (BEFORE AND AFTER TAXES) IS NOT NECESSARILY AN INDICATION OF
FUTURE PERFORMANCE. It is possible to lose money on an investment in a Fund.

SCHRODER NORTH AMERICAN EQUITY FUND

o INVESTMENT OBJECTIVE. The Fund seeks long-term capital growth.

o PRINCIPAL RISKS.

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

o CONVERTIBLE SECURITIES RISK. The Fund may invest in preferred stocks that
are convertible into common stocks, and so subject to the risks of
investments in both preferred and common stocks.

o EQUITY MARKETS RISK. A risk of investing in the Fund is the risk that the
value of the equity securities in the portfolio will fall, or will not
appreciate as anticipated by the Fund's sub-adviser, due to factors that
adversely affect North American equities markets generally or particular
companies in the portfolio. The values of equity securities fluctuate in
response to issuer, political, market, and economic developments. Equity
prices can fluctuate dramatically over short time periods in response to
these developments. Different parts of the market and different types of
equity securities can react differently to these developments. For example,
large capitalization stocks can react differently from small capitalization
stocks, and "growth" stocks can react differently from "value" stocks.
Issuer, political, or economic developments can affect a single issuer,
issuers within an industry or economic sector or geographic region, or the
market as a whole.

o LIQUIDITY RISK. The Fund may find it difficult to sell or to close out
certain investments at favorable prices or times. Illiquid securities may
be highly volatile and difficult to value.

Performance Information. (1)

[GRAPHIC OMITTED]

11.22% 6.64%
2004 2005

(1) Advisor Shares of the Fund are offered commencing March 31, 2006. The
performance information provided above and in the table below for periods prior
to March 31, 2006 reflects the performance of the Investor Shares of the Fund,
offered through a separate prospectus, adjusted to reflect the 12b-1 fees paid
by Advisor Shares.

During the periods shown above, the highest quarterly return was 9.20% for the
quarter ended December 31, 2004, and the lowest was -1.49% for the quarter ended
March 31, 2005.

AVERAGE ANNUAL TOTAL RETURNS Life of Fund
(FOR THE PERIOD ENDED DECEMBER 31, 2005) One Year (Since September 17, 2003)
---------------------------------------- -------- --------------------------
Return Before Taxes 6.64% 12.04%
Return After Taxes on Distributions (1) 5.07% 10.25%
Return After Taxes on Distributions
and Sale of Fund Shares (1) 5.20% 9.48%
FTSE North American Index (2)
(reflects no deduction for fees,
expenses or taxes) 7.45% 12.48%
S&P 500 Index (3) 4.91% 10.90%

(2) The FTSE North American Index is a market capitalization value weighted
composite index of over 700 U.S. and Canadian companies and reflects the
reinvestment of dividends.

(3) The S&P 500 Index is a market capitalization value weighted composite index
of 500 large capitalization U.S. companies and reflects the reinvestment of
dividends.

PAST PERFORMANCE (BEFORE AND AFTER TAXES) IS NOT NECESSARILY AN INDICATION OF
FUTURE PERFORMANCE. It is possible to lose money on an investment in a Fund.

SCHRODER U.S. OPPORTUNITIES FUND

o INVESTMENT OBJECTIVE. To seek capital appreciation.

o PRINCIPAL RISKS.

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

o CONVERTIBLE SECURITIES RISK. The Fund may invest in preferred stocks that
are convertible into common stocks, and so subject to the risks of
investments in both preferred and common stocks.

o INITIAL PUBLIC OFFERINGS (IPOS) RISK. The Fund may purchase securities of
companies in initial public offerings of their securities, either in the
initial offering itself or shortly after the initial offering. Such
investments are subject generally to the risks described above under "Small
Companies Risk." Such securities have no trading history, and information
about such companies may be available for very limited periods. Under
certain market conditions, very few companies, if any, may determine to
make initial public offerings of their securities. At any particular time
or from time to time the Fund may not be able to invest in securities
issued in IPOs or invest to the extent desired. The investment performance
of the Fund during periods when it is unable to invest significantly or at
all in initial public offerings may be lower than during periods when the
Fund is able to do so. The prices of securities sold in initial public
offerings can be highly volatile.

o LIQUIDITY RISK. The Fund may find it difficult to sell or to close out
certain investments at favorable prices or times. Illiquid securities may
be highly volatile and difficult to value.

Performance Information. (1) (2)
[GRAPHIC OMITTED]

21.98% 26.54% -9.45% 12.82% 30.90% 11.31% -19.07% 36.78% 25.00% 6.11%
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

(2) Effective May 1, 2006, the combined advisory and administrative fees of the
Fund increased to 1.00% per annum. If the Fund had paid such higher fees during
the periods shown above, the returns shown above and in the table below would
have been lower. See "Management of the Funds - Management Fees."

During the periods shown above, the highest quarterly return was 18.52% for the
quarter ended June 30, 1997, and the lowest was -23.32% for the quarter ended
September 30, 1998.

AVERAGE ANNUAL TOTAL RETURNS+
(FOR THE PERIOD ENDED DECEMBER 31, 2005) One Year Five Years Ten Years
---------------------------------------- -------- ---------- ---------
Return Before Taxes 6.11% 10.33% 12.93%
Return After Taxes on Distributions (1) 5.54% 9.20% 10.18%
Return After Taxes on Distributions
and Sale of Fund Shares (1) 4.75% 8.54% 9.76%
Russell 2000 Index (2) (reflects no
deduction for fees, expenses or taxes) 4.55% 8.22% 9.26%

(2) The Russell 2000 Index is a market capitalization weighted broad based index
of 2000 small capitalization U.S. companies.

PAST PERFORMANCE (BEFORE AND AFTER TAXES) IS NOT NECESSARILY AN INDICATION OF
FUTURE PERFORMANCE. It is possible to lose money on an investment in a Fund.

SCHRODER U.S. SMALL AND MID CAP OPPORTUNITIES FUND

o INVESTMENT OBJECTIVE. To seek capital appreciation.

o PRINCIPAL RISKS.

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

available information about small and mid cap companies or less market
interest in their securities as compared to larger companies, and it may
take longer for the price of the securities to reflect the full value of
their issuers' earnings potential or assets.

o CONVERTIBLE SECURITIES RISK. The Fund may invest in preferred stocks that
are convertible into common stocks, and so subject to the risks of
investments in both preferred and common stocks.

o LIQUIDITY RISK. The Fund may find it difficult to sell or to close out
certain investments at favorable prices or times. Illiquid securities may
be highly volatile and difficult to value.

o MANAGEMENT RISK. Because the Fund is actively managed, its investment
return depends on the ability of its adviser to manage its portfolio
successfully. The Fund's adviser and the investment team will apply
investment techniques and risk analyses in making investment decisions for
the Fund, but there can be no guarantee that these will produce the desired
results.

SCHRODER ENHANCED INCOME FUND

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

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

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

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

o debt securities of domestic or foreign corporations;

o mortgage-backed and other asset-backed securities;

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

o obligations of international agencies or supranational entities;

o commercial paper and master demand notes;

o preferred securities; and

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

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

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

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

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

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

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

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

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

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

o PRINCIPAL RISKS.

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

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

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

o MANAGEMENT RISK. Because the Fund is actively managed, its investment
return depends on the ability of its adviser to manage its portfolio
successfully. The Fund's adviser and the investment team will apply
investment techniques and risk analyses in making investment decisions for
the Fund, but there can be no guarantee that these will produce the desired
results.

Performance Information.

[GRAPHIC OMITTED]

2.64%
2005

During the period shown above, the highest quarterly return was 0.89% for the
quarter ended June 30, 2005, and the lowest was 0.41% for the quarter ended
March 31, 2005.

AVERAGE ANNUAL TOTAL RETURNS One Year
(FOR THE PERIOD ENDED DECEMBER 31, 2005) (Life of Fund)
---------------------------------------------- --------------
Return Before Taxes 2.64%
Return After Taxes on Distributions (1) 1.57%
Return After Taxes on Distributions and Sale
of Fund Shares (1) 1.71%
LIBOR 3 Month USD Fixed Index (2) (reflects no
deduction for fees, expenses or taxes) 3.64%

(2) The LIBOR 3 Month USD Fixed Index is a broad-based basket of U.S. debt
securities.

PAST PERFORMANCE (BEFORE AND AFTER TAXES) IS NOT NECESSARILY AN INDICATION OF
FUTURE PERFORMANCE. It is possible to lose money on an investment in a Fund.

SCHRODER TOTAL RETURN FIXED INCOME FUND

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

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

o debt securities of domestic or foreign corporations;

o mortgage-backed and other asset-backed securities;

o taxable and tax-exempt municipal bonds;

o obligations of international agencies or supranational entities;

o debt securities convertible into equity securities;

o inflation-indexed bonds;

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

o delayed funding loans and revolving credit facilities; and

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

The Fund will normally invest no more than 20% of its total assets in securities
that are not denominated in the U.S. dollar.

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

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

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

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

o exploits inefficiencies in the valuation of risk and reward;

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

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

o PRINCIPAL RISKS.

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

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

o CONVERTIBLE SECURITIES RISK. The Fund may invest in convertible
securities, which are corporate debt securities that may be converted at
either a stated price or stated rate into underlying shares of common
stock, and so subject to the risks of investments in both debt securities
and equity securities.

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

o HIGH-YIELD/JUNK BONDS RISK. Securities rated below investment grade
("high-yield bonds" or "junk bonds") lack outstanding investment
characteristics and have speculative characteristics and are subject to
greater credit and market risks than higher-rated securities. The lower
ratings of junk bonds reflect a greater possibility that adverse changes in
the financial condition of the issuer or in general economic conditions, or
an unanticipated rise in interest rates, may impair the ability of the
issuer to make payments of interest and principal. If this were to occur,
the values of such securities held by the Fund may become more volatile.

o MANAGEMENT RISK. Because the Fund is actively managed, its investment
return depends on the ability of its adviser to manage its portfolio
successfully. The Fund's adviser and the investment team will apply
investment techniques and risk analyses in making investment decisions for
the Fund, but there can be no guarantee that these will produce the desired
results.

Performance Information.

[GRAPHIC OMITTED]

2.85%
2005

During the period shown above, the highest quarterly return was 3.14% for the
quarter ended June 30, 2005, and the lowest was -0.88% for the quarter ended
September 30, 2005.

AVERAGE ANNUAL TOTAL RETURNS One Year
(FOR THE PERIOD ENDED DECEMBER 31, 2005) (Life of Fund)
---------------------------------------------- --------------
Return Before Taxes 2.85%
Return After Taxes on Distributions (1) 1.52%
Return After Taxes on Distributions and Sale
of Fund Shares (1) 1.84%
Lehman US Aggregate Bond Index (2) (reflects
no deduction for fees, expenses or taxes) 2.43%

(2) The Lehman US Aggregate Bond Index is a widely used measure of short-term
debt returns. It is not managed.

PAST PERFORMANCE (BEFORE AND AFTER TAXES) IS NOT NECESSARILY AN INDICATION OF
FUTURE PERFORMANCE. It is possible to lose money on an investment in a Fund.

SCHRODER MUNICIPAL BOND FUND

o INVESTMENT OBJECTIVE. To seek a high level of current income exempt from
federal income tax, consistent with the preservation of capital.

o PRINCIPAL INVESTMENT STRATEGIES. The Fund invests primarily in municipal
bonds that:

o pay interest that is exempt from federal income tax (but which may be
subject to federal alternative minimum tax);

o are investment grade in quality; and

In selecting individual securities for investment, the Fund's adviser typically:

o assigns a relative value, based on creditworthiness, cash flow,
liquidity, and price, to each bond;

o uses in-depth credit analysis to determine the issuer's ability to
fulfill its obligations;

o compares each bond with a pre-refunded or escrowed to maturity
municipal bond to develop a theoretical intrinsic value;

o looks to exploit any inefficiencies between intrinsic value and market
trading price; and

o subordinates sector weightings to individual securities that may be
undervalued.

o PRINCIPAL RISKS.

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

o VOLATILITY OF THE MUNICIPAL BOND MARKET RISK. The municipal bond market
is volatile and can be significantly affected by adverse tax, legislative,
or political changes and the financial condition of the issuers of
municipal bonds.

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

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

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

the value of shares of funds that invest in a greater variety of
investments. The Fund may also invest a substantial portion of its assets
in a particular issue, and to that extent the Fund's investment performance
and net asset value will be adversely affected by a decrease in the value
of that issue more than if such Fund invested in a greater number of
securities.

o U.S. GOVERNMENT SECURITIES RISK. Securities issued or guaranteed by
certain agencies and instrumentalities of the U.S. Government are not
supported by the full faith and credit of the United States. For example,
mortgage-backed bonds issued by Fannie Mae or Freddie Mac are backed only
by the credit of those issuers. Investments in these securities are also
subject to interest rate risk (as described above under "Interest Rate
Risk"), extension risk (as described above under "Extension Risk"), and the
risk that the value of the securities will fluctuate in response to
political, market, or economic developments.

Performance Information.

[GRAPHIC OMITTED]

3.44% 2.82%
2004 2005

During the periods shown above, the highest quarterly return was 3.06% for the
quarter ended September 30, 2004, and the lowest was -1.86% for the quarter
ended June 30, 2004.

AVERAGE ANNUAL TOTAL RETURNS Life of the Fund
(FOR THE PERIOD ENDED DECEMBER 31, 2005) One Year (Since December 31, 2003)
---------------------------------------- -------- -------------------------
Return Before Taxes 2.82% 3.13%
Return After Taxes on Distributions (1) 2.59% 2.99%
Return After Taxes on Distributions and
Sale of Fund Shares (1) 2.84% 2.98%
Lehman 5-Year Municipal Bond Index (2)
(reflects no deduction for fees,
expenses or taxes) 0.95% 1.82%

(2) The Lehman 5-Year Municipal Bond Index is a rules-based,
market-value-weighted unmanaged index of debt obligations issued by
municipalities with an approximate maturity of five years.

PAST PERFORMANCE (BEFORE AND AFTER TAXES) IS NOT NECESSARILY AN INDICATION OF
FUTURE PERFORMANCE. It is possible to lose money on an investment in a Fund.

SCHRODER SHORT-TERM MUNICIPAL BOND FUND

o INVESTMENT OBJECTIVE. To seek a high level of income exempt from federal
income tax, consistent with the preservation of capital.

o PRINCIPAL INVESTMENT STRATEGIES. The Fund invests primarily in municipal
bonds that:

o pay interest that is exempt from federal income tax (but which may be
subject to federal alternative minimum tax);

o are investment grade in quality; and

In selecting individual securities for investment, the Fund's adviser typically:

o assigns a relative value, based on creditworthiness, cash flow,
liquidity, and price, to each bond;

o uses in-depth credit analysis to determine the issuer's ability to
fulfill its obligations;

o compares each bond with a pre-refunded or escrowed to maturity
municipal bond to develop a theoretical intrinsic value;

o looks to exploit any inefficiencies between intrinsic value and market
trading price; and

o subordinates sector weightings to individual securities that may be
undervalued.

The Fund's adviser may sell a security for the Fund if the security reaches the
adviser's target price or if the adviser's credit outlook for the security has
deteriorated. The Fund's adviser may also sell a security to facilitate the
purchase of a security it believes is more attractive for the Fund. Because the
Fund's adviser devotes substantial independent research to the selection of the
Funds' investments, the Fund will likely hold a number of investments that are
not generally held by other mutual funds.

o PRINCIPAL RISKS.

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

o VOLATILITY OF THE MUNICIPAL BOND MARKET. The municipal bond market is
volatile and can be significantly affected by adverse tax, legislative, or
political changes and the financial condition of the issuers of municipal
bonds.

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

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

o STATE AND ISSUER RISK. Investing in bonds issued by a state or by state
agencies or political subdivisions in the same state may make a Fund more
vulnerable to that state's economy and to issues affecting its municipal
bond issuers. Geographic or sector concentration may cause the value of the
Fund's shares to change more than the value of shares of funds that invest
in a greater variety of investments. The Fund may also invest a substantial
portion of its assets in a particular issue, and to that extent the Fund's
investment performance and net asset value will be adversely affected by a
decrease in the value of such issue more than if such Fund invested in a
greater number of securities.

o U.S. GOVERNMENT SECURITIES RISK. Securities issued or guaranteed by
certain agencies and instrumentalities of the U.S. Government are not
supported by the full faith and credit of the United States. For example,
mortgage-backed bonds issued by Fannie Mae or Freddie Mac are backed only
by the credit of those issuers. Investments in these securities are also
subject to interest rate risk (as described above under "Interest Rate
Risk"), extension risk (as described above under "Extension Risk"), and the
risk that the value of the securities will fluctuate in response to
political, market, or economic developments.

o MANAGEMENT RISK. Because the Fund is actively managed, its investment
return depends on the ability of its adviser to manage its portfolio
successfully. The adviser and the Fund's portfolio managers will apply
investment techniques and risk analyses in making investment decisions for
the Fund, but there can be no guarantee that these will produce the desired
results.

Performance Information.

[GRAPHIC OMITTED]

1.53% 2.26%
2004 2005

During the periods shown above, the highest quarterly return was 1.32% for the
quarter ended June 30, 2005, and the lowest was -0.90% for the quarter ended
June 30, 2004.

AVERAGE ANNUAL TOTAL RETURNS Life of the Fund
(FOR THE PERIOD ENDED DECEMBER 31, 2005) One Year (Since December 31, 2003)
---------------------------------------- -------- -------------------------
Return Before Taxes 2.26% 1.90%
Return After Taxes on Distributions (1) 2.07% 1.77%
Return After Taxes on Distributions and
Sale of Fund Shares (1) 2.28% 1.83%
Lehman 1-Year Municipal Bond Index (2)
(reflects no deduction for fees,
expenses or taxes) 1.49% 1.28%

(2) The Lehman 1-Year Municipal Bond Index is a rules-based,
market-value-weighted index of debt obligations issued by municipalities
with short term maturities.

PAST PERFORMANCE (BEFORE AND AFTER TAXES) IS NOT NECESSARILY AN INDICATION OF
FUTURE PERFORMANCE. It is possible to lose money on an investment in a Fund.

----------

FEES AND EXPENSES

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

SHAREHOLDER FEES (paid directly from your investment):

MAXIMUM SALES LOAD IMPOSED ON PURCHASES None
MAXIMUM DEFERRED SALES LOAD None
MAXIMUM SALES LOAD IMPOSED ON REINVESTED DIVIDENDS None
REDEMPTION FEE
Schroder Emerging Market Equity Fund 2.00%(1)
Schroder International Alpha Fund 2.00%(1)
Schroder North American Equity Fund None
Schroder U.S. Opportunities Fund 2.00%(1)
Schroder U.S. Small and Mid Cap Opportunities Fund 2.00%(1)
Schroder Enhanced Income Fund None
Schroder Total Return Fixed Income Fund None
Schroder Municipal Bond Fund None
Schroder Short-Term Municipal Bond Fund None
EXCHANGE FEE None

(1) Shares of this Fund held for two months or less are subject to a redemption
fee of 2.00%.

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

SCHRODER SCHRODER SCHRODER
SCHRODER SCHRODER U.S. SMALL TOTAL SHORT-
EMERGING NORTH SCHRODER AND MID SCHRODER RETURN SCHRODER TERM
MARKET SCHRODER AMERICAN U.S. CAP ENHANCED FIXED MUNICIPAL MUNICIPAL
EQUITY INTERNATIONAL EQUITY OPPORTUNITIES OPPORTUNITIES INCOME INCOME BOND BOND
FUND ALPHA FUND(2) FUND FUND(2) FUND FUND FUND FUND FUND
-------- ------------- -------- ------------- ------------- -------- -------- --------- ---------

Management Fees (1) 1.00% 0.975% 0.25% 1.00% 1.00% 0.25% 0.25% 0.40% 0.40%
Distribution
(12b-1) Fees 0.25% 0.25% 0.35% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
Other Expenses
(1)(3) 2.14% 3.152% 0.08% 0.40% 1.53% 0.57% 2.80% 0.53% 0.45%
Total Annual Fund
Operating
Expenses 3.39% 4.377% 0.68% 1.65% 2.78% 1.07% 3.30% 1.18% 1.10%
Less: Fee Waiver
and Expense
Limitation(4) (1.39)% (2.877)% None None (1.13)% (0.42)% (2.65)% (0.38)% (0.30)%
Net Expenses (4) 2.00% 1.50% 0.68% 1.65% 1.65% 0.65% 0.65% 0.80% 0.80%

(2) Restated to reflect current fees.

(3) "Other Expenses" for Schroder Emerging Market Equity Fund and Schroder U.S.
Small and Mid Cap Opportunities Fund are based on estimated amounts for
each Fund's current fiscal year.

(4) The "Net Expenses" shown for Schroder Emerging Market Equity Fund, Schroder
International Alpha Fund, Schroder U.S. Small and Mid

Cap Opportunities Fund, Schroder Enhanced Income Fund, Schroder Total
Return Fixed Income Fund, Schroder Municipal Bond Fund, and Schroder
Short-Term Municipal Bond Fund reflect the effect of contractually imposed
fee waivers and/or expense limitations, in effect until February 28, 2007
(March 31, 2007 for the Schroder Emerging Market Equity Fund and Schroder
U.S. Small and Mid Cap Opportunities Fund; May 9, 2007 for the Schroder
International Alpha Fund), on the Total Annual Fund Operating Expenses of
each Fund. In order to limit the expenses of these Funds' Advisor Shares,
the Funds' adviser has contractually agreed to reduce its compensation
(and, if necessary, to pay other Fund expenses, other than interest, taxes,
and extraordinary expenses, which may include typically non-recurring
expenses such as, for example, organizational expenses, litigation
expenses, and shareholder meeting expenses) until February 28, 2007 (March
31, 2007 for the Schroder Emerging Market Equity Fund and Schroder U.S.
Small and Mid Cap Opportunities Fund; May 9, 2007 for the Schroder
International Alpha Fund and Schroder U.S. Opportunities Fund) to the
extent that the Total Annual Fund Operating Expenses of a Fund allocable to
its Advisor Shares exceed the following annual rates (based on the average
daily net assets attributable to each Fund's Advisor Shares): Schroder
Emerging Market Equity Fund - 2.00%; Schroder International Alpha Fund -
1.50%; Schroder U.S. Opportunities Fund - 1.95%; Schroder U.S. Small and
Mid Cap Opportunities Fund - 1.65%; Schroder Enhanced Income Fund - 0.65%;
Schroder Total Return Fixed Income Fund - 0.65%; Schroder Municipal Bond
Fund - 0.80%; and Schroder Short-Term Municipal Bond Fund - 0.80%. The fee
waiver and/or expense limitations for the Funds may only be terminated
during their term by the Board of Trustees.

EXAMPLE

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

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

1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------

SCHRODER EMERGING MARKET EQUITY FUND(1) $203 $ 913 N/A N/A
SCHRODER INTERNATIONAL ALPHA FUND(2) $153 $1,065 $1,989 $4,348
SCHRODER NORTH AMERICAN EQUITY FUND(3) $ 69 $ 218 $ 379 $ 847
SCHRODER U.S. OPPORTUNITIES FUND(2) $168 $ 520 $ 897 $1,955
SCHRODER U.S. SMALL AND MID CAP OPPORTUNITIES FUND(1) $168 $ 755 N/A N/A
SCHRODER ENHANCED INCOME FUND(3) $ 66 $ 299 $ 549 $1,268
SCHRODER TOTAL RETURN FIXED INCOME FUND(3) $ 66 $ 767 $1,491 $3,413
SCHRODER MUNICIPAL BOND FUND(3) $ 82 $ 337 $ 612 $1,398
SCHRODER SHORT-TERM MUNICIPAL BOND FUND(3) $ 82 $ 320 $ 577 $1,313

(1) The Example assumes that you invest on March 31, 2006 for Schroder Emerging
Market Equity Fund and Schroder U.S. Small and Mid Cap Opportunities Fund.
If you invest after these dates your expenses may be higher due to fee
waivers for these funds expiring one year after such date.

(2) The Example assumes that you invest on May 9, 2006 for Schroder
International Alpha Fund and Schroder U.S. Opportunities Fund. If you
invest after these dates your expenses may be higher due to fee waivers for
these funds expiring one year after such date.

(3) The Example assumes that you invest on February 28, 2006 for Schroder North
American Equity Fund, Schroder Enhanced Income Fund, Schroder Total Return
Fixed Income Fund, Schroder Municipal Bond Fund and Schroder Short-Term
Municipal Bond Fund. If you invest after these dates your expenses may be
higher due to fee waivers for these funds expiring one year after such
date.

Because of Rule 12b-1 fees paid by the Funds, long-term shareholders may pay
more than the economic equivalent of the maximum front-end sales load permitted
under the applicable broker-dealer sales rules.

PRINCIPAL RISKS OF INVESTING IN THE FUNDS

o MORTGAGE AND ASSET-BACKED SECURITIES RISK. (SCHRODER ENHANCED INCOME
FUND AND SCHRODER TOTAL RETURN FIXED INCOME FUND). Mortgage-backed
securities, including collateralized mortgage obligations and certain
stripped mortgage-backed securities represent a participation in, or
are secured by, mortgage loans. Asset-backed securities are structured
like mortgage-backed securities, but instead of mortgage loans or
interests in mortgage loans, the underlying assets may include such
items as motor vehicle installment sales or installment loan
contracts, leases of various types of real and personal property and
receivables from credit card agreements. The ability of an issuer of
asset-backed securities to enforce its security interest in the
underlying assets may be limited. Traditional debt investments
typically pay a fixed rate of interest until maturity, when the entire
principal amount is due. By contrast, payments on mortgage-backed and
many asset-backed investments typically include both interest and
partial payment of principal. Principal may also be prepaid
voluntarily, or as a result of refinancing or foreclosure. A Fund may
have to invest the proceeds from prepaid investments in other
investments with less attractive terms and yields. As a result, these
securities may have less potential for capital appreciation during
periods of declining interest rates than other securities of
comparable maturities, although they may have a similar risk of
decline in market value during periods of rising interest rates.
Because the prepayment rate generally declines as interest rates rise,
an increase in interest rates will likely increase the duration, and
thus the volatility, of mortgage-backed and asset-backed securities.
Duration is a measure of the expected life of a fixed income security
that is used to determine the sensitivity of the security's price to
changes in interest rates. Unlike the maturity of a fixed income
security, which measures only the time until final payment is due,
duration takes into account the time until all payments of interest
and principal on a security are expected to be made, including how
these payments are affected by prepayments and by changes in interest
rates. Some mortgage-backed and asset-backed investments receive only
the interest portion ("IOs") or the principal portion ("POs") of
payments on the underlying assets. The yields and values of these
investments are extremely sensitive to changes in interest rates and
in the rate of principal payments on the underlying assets. IOs tend
to decrease in value if interest rates decline and rates of repayment
(including prepayment) on the underlying mortgages or assets increase;
it is possible that a Fund may lose the entire amount of its
investment in an IO due to a decrease in interest rates. Conversely,
POs tend to decrease in value if interest rates rise and rates of
repayment decrease. Moreover, the market for IOs and POs may be
volatile and limited, which may make them difficult for a Fund to buy
or sell. A Fund may gain investment exposure to mortgage-backed and
asset-backed investments by entering into agreements with financial
institutions to buy the investments at a fixed price at a future date.
A Fund may or may not take delivery of the investments at the
termination date of such an agreement, but will nonetheless be exposed
to changes in value of the underlying investments during the term of
the agreement.

companies, and it may take longer for the prices of the securities to
reflect the full value of their issuers' earnings potential or assets.

buy or sell foreign currencies and options and futures contracts on
foreign currencies for hedging purposes in connection with its foreign
investments.

o DEPOSITARY RECEIPTS RISK. (SCHRODER EMERGING MARKET EQUITY FUND ). A
Fund may invest in ADRs, as well as GDRs, EDRs or other similar
securities representing ownership of foreign securities. Depositary
Receipts generally evidence an ownership interest in a corresponding
foreign security on deposit with a financial institution. Investments
in non-U.S. issuers through Depository Receipts and similar
instruments may involve certain risks not applicable to investing in
U.S. issuers, including changes in currency rates, application of
local tax laws, changes in governmental administration or economic or
monetary policy or changed circumstances in dealings between nations.
Costs may be incurred in connection with conversions between various
currencies. A Fund may invest in both sponsored and unsponsored
Depositary Receipts. Unsponsored Depositary Receipts are organized
independently and without the cooperation of the issuer of the
underlying securities. As a result, available information concerning
the issuers may not be as current for sponsored Depositary Receipts
and the prices of unsponsored Depositary Receipts may be more volatile
than if such instruments were sponsored by the issuer.

o MANAGEMENT RISK. (ALL FUNDS). Because the Funds are actively managed,
each Fund's investment return depends on the ability of its adviser or
sub-adviser to manage its

General obligations. These are backed by the issuer's authority to
levy taxes and are considered an obligation of the issuer. They are
payable from the issuer's general unrestricted revenues, although
payment may depend upon government appropriation or aid from other
governments. These investments may be vulnerable to legal limits on a
government's power to raise revenue or increase taxes, as well as
economic or other developments that can reduce revenues.

Special revenue obligations. These are payable from revenue earned by
a particular project or other revenue source. They include private
activity bonds for manufacturing facilities, certain transportation
facilities, and publicly-owned utilities, and non-profit organizations
such as private colleges, hospitals and museums, and other facilities.
Investors can look only to the revenue generated by the project or the
private company owning or operating the project rather than the credit
of the state or local

government authority issuing the bonds. Revenue obligations are often
subject to greater credit risk than general obligations debt because
they do not rely on broad taxing powers.

o VOLATILITY OF THE MUNICIPAL BOND MARKET RISK. (SCHRODER MUNICIPAL BOND
FUND AND SCHRODER SHORT-TERM MUNICIPAL BOND FUND). The values of
municipal bonds may rise or fall in response to a number of factors
affecting their issuers specifically or the municipal bond market
generally. For example, political or fiscal events affecting the
issuers of municipal bonds, as well as uncertainties in the municipal
bond market generally related to taxation, legislative changes, or
the enforceability of rights of municipal bond holders, can
significantly affect the values of municipal bonds. Because many
municipal bonds are issued to finance similar projects, such as those
relating to education, health care, housing, transportation, and
utilities, conditions in those sectors can affect the overall
municipal bond market.

NON-PRINCIPAL INVESTMENT STRATEGIES AND TECHNIQUES

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

o TEMPORARY DEFENSIVE STRATEGIES. At times, the Funds' adviser or
sub-adviser may judge that conditions in the securities markets make
pursuing a Fund's investment strategy inconsistent with the best
interests of its shareholders. At such times, the Fund's adviser or
sub-adviser may, but is not required to, take temporary "defensive"
positions that are inconsistent with a Fund's principal investment
strategies in attempting to respond to adverse market, economic,
political, or other conditions. In implementing these defensive
strategies, the Fund would invest in investment grade fixed income
securities, cash or money market instruments to any extent the
Fund's adviser or sub-adviser considers consistent with such defensive
strategies. It is impossible to predict when, or for how long, a Fund
would use these alternate strategies. One risk of taking such
temporary defensive positions is that the Fund may not achieve its
investment objective.

o PRICING. At times market conditions might make it hard to value some
investments. If a Fund has valued securities it holds too high, you
may end up paying too much for the

MANAGEMENT OF THE FUNDS

Schroder Short-Term Municipal Bond Fund's Advisor Shares, Schroders
has contractually agreed to reduce its compensation (and, if
necessary, to pay other Fund expenses, other than interest, taxes, and
extraordinary expenses, which may include typically non-recurring
expenses such as, for example, organizational expenses, litigation
expenses, and shareholder meeting expenses) until February 28, 2007
(March 31, 2007 for the Schroder Emerging Market Equity Fund and
Schroder U.S. Small and Mid Cap Opportunities Fund; May 9, 2007 for
the Schroder International Alpha Fund and Schroder U.S. Opportunities
Fund) to the extent that the Total Annual Fund Operating Expenses of
the Fund allocable to its Advisor Shares exceed the following annual
rates (based on the average daily net assets attributable to the
Fund's Advisor Shares): Schroder Emerging Market Equity Fund - 2.00%;
Schroder International Alpha Fund - 1.50%; Schroder U.S. Opportunities
Fund - 1.95%; Schroder U.S. Small and Mid Cap Opportunities Fund -
1.65%; Schroder Enhanced Income Fund - 0.65%; Schroder Total Return
Fixed Income Fund - 0.65%; Schroder Municipal Bond Fund - 0.80%; and
Schroder Short-Term Municipal Bond Fund - 0.80%.

FUND NAME TITLE SINCE RECENT PROFESSIONAL EXPERIENCE
------------------- ------------ -------------- ---------------- -----------------------------------------

Schroder Emerging James Gotto Portfolio Inception Mr. Gotto is a Portfolio Manager of SIMNA
Market Equity Fund Manager (March 31, 2006) Ltd. He has been an employee of SIMNA
Ltd. since 1991.

Schroder Emerging Waj Hashmi, Portfolio Inception Mr. Hashmi is a Portfolio Manager of
Market Equity Fund CFA Manager (March 31, 2006) SIMNA Ltd. He has been an employee of
SIMNA Ltd. since 2000.

Schroder Emerging Robert Davy Portfolio Inception Mr. Davy is a Portfolio Manager of SIMNA
Market Equity Fund Manager (March 31, 2006) Ltd. He has been an employee of SIMNA
Ltd. since 1986.

Schroder Emerging Allan Conway Head of Inception Mr. Conway is Head of Emerging Markets
Market Equity Fund Emerging (March 31, 2006) Equities at SIMNA Ltd. He has been an
Markets employee of SIMNA Ltd. since 2004.
Equities Formerly, Head of Global Emerging
Markets, West LB Asset Management and
Chief Executive Officer of WestAM (UK)
Ltd.

Schroder Virginie Lead Portfolio March 2005 Ms. Maisonneuve is a Director of
International Alpha Maisonneuve, Manager Schroders. She has been an employee of
Fund CFA SIMNA Ltd. since 2004. She is head of
Schroders' Europe, Australasia, Far East
(EAFE) Team. Formerly, Co-Chief
Investment Officer and Director, Clay Finlay.

Schroder Matthew Portfolio 2004 Mr. Dobbs manages Pacific Basin and EAFE
International Alpha Dobbs Manager equities and is responsible for
Fund MultiRegional Small Cap. He has been an
employee of Schroders since 1981.

Schroder North Justin Head of Inception Mr. Abercrombie is Head of QEP, SIMNA
American Equity Abercrombie Quantitative (September 2003) Ltd. He has been an employee of Schroders
Fund Equity since 1996. Formerly, founding member of
Products QEP, SIMNA Ltd.
("QEP")

Schroder North David Senior March 2004 Mr. Philpotts is Senior Quantitative
American Equity Philpotts Quantitative Analyst and Portfolio Manager, SIMNA Ltd.
Fund Analyst and He has been an employee of SIMNA Ltd.
Portfolio since 1999. Formerly, Chief Investment
Manager Officer, Quaestor Investment Management
(2001 - March 2004), Deputy Head of QEP,
SIMNA Ltd. (1999 - 2004).

Schroder North Stephen Senior November 2003 Mr. Langford is Senior Quantitative
American Equity Langford Quantitative Analyst and Portfolio Manager, SIMNA Ltd.
Fund Analyst and He has been an employee of SIMNA Ltd.
Portfolio since 2003. Formerly, Senior Research
Manager Manager, Quaestor Investment Management.

Schroder North Arnaud Senior July 2005 Mr. Amsellem is Senior Quantitative
American Equity Amsellem Quantitative Analyst and Portfolio Manager, SIMNA Ltd.
Fund Analyst and He has been an employee of SIMNA Ltd.
Portfolio since 2005. Formerly, Senior Portfolio
Manager Manager, State Street Hedge Fund Group,
Portfolio Manager, State Street Active
Team.

Schroder North Kristian Quantitative Inception Mr. Brock is a Quantitative Analyst and
American Equity Brock Analyst and (September 2003) Portfolio Manager, SIMNA Ltd. He has been
Fund Portfolio an employee of Schroders since 2001.
Manager

Schroder North James Quantitative October 2005 Mr. Larkman is a Quantitative

American Equity Larkman Analyst and Analyst and Portfolio Manager, SIMNA Ltd.
Fund Portfolio He has been an employee of Schroders
Manager since 2003.

Schroder U.S. Jenny Lead Portfolio 2003 (U.S. Ms. Jones is an Executive Vice President
Opportunities Fund B. Jones Manager Opportunities of Schroders. She has been an employee of
and Schroder U.S. Fund) Schroders since 2003. Formerly, portfolio
Small and Mid Cap manager and Executive Director, Morgan
Opportunities Fund Inception Stanley Investment Advisors Inc.
(March 31, 2006)
(U.S. Small and
Mid Cap
Opportunities
Fund)

Schroder Enhanced Steven S. Lead Portfolio Inception Mr. Lear is an Executive Vice President
Income Fund and Lear, CFA Manager (December 2004) of Schroders. He has been an employee of
Schroder Total for each Fund Schroders since June 1998.
Return Fixed Income
Fund

Schroder Enhanced David Portfolio Inception Mr. Harris is a Senior Vice President of
Income Fund and Harris Manager (December 2004) Schroders. He has been an employee of
Schroder Total for each Fund Schroders since November 1992.
Return Fixed Income
Fund

Schroder Enhanced Wesley A. Portfolio Inception Mr. Sparks is a Senior Vice President of
Income Fund and Sparks, CFA Manager (December 2004) Schroders. He has been an employee of
Schroder Total for each Fund Schroders since December 2000. Formerly,
Return Fixed Income portfolio manager at Aeltus Investment
Fund Management.

Schroder Enhanced Gregg T. Portfolio Inception Mr. Moore is a Vice President of
Income Fund and Moore, CFA Manager (December 2004) Schroders and has been an employee of
Schroder Total for each Fund Schroders since June 2001. Formerly,
Return Fixed Income quantitative analyst at Aeltus Investment
Fund Management.

Schroder Enhanced Matthew J. Portfolio Inception Mr. Murphy is a Vice President of
Income Fund and Murphy Manager (December 2004) Schroders. He has been an employee of
Schroder Total for each Fund Schroders since July 2004. Formerly,
Return Fixed Income Managing Director at MONY Capital
Fund Management from February 2002 to July
2004.

Schroder Municipal David Baldt, Portfolio Inception Mr. Baldt is an Executive Vice President
Bond Fund and CFA Manager (December of Schroders.

Schroder Short-Term 2003) for each He has been an employee of Schroders
Municipal Bond Fund since fall 2003. Formerly, Managing
Fund Director of Deutsche Asset Management
(formerly Morgan Grenfell).

Schroder Municipal Daniel Portfolio Inception Mr. Scholl is a Senior Vice President of
Bond Fund and Scholl Manager (December 2003) Schroders. He has been an employee of
Schroder Short-Term for each Fund Schroders since fall 2003. Formerly a
Municipal Bond Director and Portfolio Manager of
Fund Deutsche Asset Management (formerly
Morgan Grenfell).

Schroder Municipal Susan Beck Portfolio Inception Ms. Beck is a First Vice President of
Bond Fund and Manager (December 2003) Schroders. She has been an employee of
Schroder Short-Term for each Fund Schroders since fall 2003. Formerly, a
Municipal Bond Vice President and Portfolio Manager of
Fund Deutsche Asset Management (formerly
Morgan Grenfell).

Schroder Municipal Ted Manges Portfolio Inception Mr. Manges is a First Vice President of
Bond Fund and Manager (December 2003) Schroders. He has been an employee of
Schroder Short-Term for each Fund Schroders since fall 2003. Formerly, Vice
Municipal Bond President of Deutsche Asset Management
Fund (1999-2003), and Manager of Trading and
Sales, Commerce Capital Markets
(1995-1999).

HOW THE FUNDS' SHARES ARE PRICED

Each Fund calculates the net asset value of its Advisor Shares by dividing the
total value of its assets attributable to its Advisor Shares, less its
liabilities attributable to those shares, by the number of Advisor Shares
outstanding. Each Fund values its Advisor Shares as of the close of trading on
the New York Stock Exchange (the "Exchange") (normally 4:00 p.m., Eastern Time)
each day the Exchange is open. The Trusts expect that days, other than weekend
days, when the Exchange will not be open are New Year's Day, Martin Luther King,
Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day, and Christmas Day. Securities for which market quotations
are readily available are valued at prices which, in the opinion of Schroders,
most nearly represent the market values of such securities. Securities for which
market values are not readily available, or for which the Funds' adviser
believes the market value is unreliable (including, for example, certain foreign
securities, thinly traded securities, initial public offerings, or when there is
a particular event that may affect the value of a security), are valued by
Schroders at their fair values pursuant to guidelines established by the Board
of Trustees, and under the ultimate supervision of the Board of Trustees,
generally by reference to other securities or indexes. For instance, a pricing
service may recommend a fair value based generally on prices of comparable
securities. Unlisted securities for which market quotations are readily
available generally are valued at the most recently reported sale prices on any
day or, in the absence of a reported sale price, at mid-market prices. Options
and futures contracts traded on a securities exchange or board of trade
generally are valued at the last reported sales price or, in the absence of a
sale, at the closing mid-market price on the principal exchange where they are
traded. Options and futures not traded on a securities exchange or board of
trade for which over-the-counter market quotations are readily available shall
be valued at the most recently reported mid-market price. If such prices are not
available, unlisted securities and derivatives are valued by Schroders at their
fair values based on quotations from dealers, and if such quotations are not
available, based on factors in the market where such securities trade, such as
security and bond prices, interest rates, and currency exchange rates. Certain
Funds may invest in foreign securities that are primarily listed on foreign
exchanges that trade on weekends and other days when the Fund does not price its
shares. As a result, the value of the Fund's portfolio securities may change on
days when the price of the Fund's shares is not calculated. The price of the
Fund's shares will reflect any such changes when the price of the Fund's shares
is next calculated, which is the next day the Exchange is open. The Funds may
use fair value pricing more frequently for securities primarily traded in
non-U.S. markets because, among other things, most foreign markets close well
before the Fund values its securities. The earlier close of these foreign
markets gives rise to the possibility that significant events, including broad
market moves, may have occurred in the interim. Schroder Emerging Market Equity
Fund and Schroder International Alpha Fund's investments may be priced based on
fair values provided by a third party fair valuation vendor, based on certain
factors and methodologies applied by such vendor, in the event that there is
movement in the U.S. market that exceeds a specific threshold established by the
Schroders' Fair Value Committee in consultation with the Board of Trustees,
pursuant to guidelines established by the Board of Trustees, and under the
ultimate supervision of the Board of Trustees. Short-term investments that will
mature within 60 days are valued by Schroders using amortized cost pursuant to
procedures adopted by the Board of Trustees. The net asset value of a Fund's
Investor Shares may differ from that of its Advisor Shares due to differences in
the expenses of Investor Shares and Advisor Shares.

HOW TO BUY SHARES

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

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

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

Each Fund sells its Advisor Shares at their net asset value next determined
after the applicable Fund, its transfer agent, BFDS, or another authorized
broker or financial institution (as described below) receives your request in
good order (meaning that the request meets the requirements set out below and in
the Account Application, and otherwise meets the requirements implemented from
time to time by the applicable Fund's transfer agent or the Fund). In order for
you to receive a Fund's next determined net asset value, the Fund, BFDS, the
Service Organization, or the authorized broker or financial institution must
receive your order before the close of trading on the Exchange (normally 4:00
p.m., Eastern Time). Each Trust reserves the right to reject any order to
purchase Advisor Shares of any of its Funds. Each Trust generally expects to
inform any persons that their purchase has been rejected within 24 hours.

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

Exchange on any day the Exchange is open for trading will receive the net asset
value next determined as of the end of that day. Orders received after that time
will receive the next day's net asset value.

The minimum investments for initial and additional purchases of Advisor Shares
of a Fund are as follows:

INITIAL INVESTMENT ADDITIONAL INVESTMENTS
------------------ ----------------------
REGULAR ACCOUNTS $2,500 $1,000
TRADITIONAL AND ROTH IRAS $2,500 $1,000

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

Advisor Shares of the Funds are intended for purchase by investors making a
minimum initial investment of $2,500 through a regular account or a traditional
or Roth IRA account and purchasing through an investment intermediary. Investor
Shares of the Funds are offered through another prospectus and are intended for
investors making a minimum initial investment of $250,000 and purchasing
directly from the Fund.

The Funds do not issue share certificates.

Each Trust may suspend the offering of Advisor Shares of its Funds for any
period of time. Each Trust may change any investment minimum from time to time.

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

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

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

Once you have an account number, you may purchase Advisor Shares through your
Service Organization or directly from the Fund by calling BFDS at (800) 464-3108
to give

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

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

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

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

HOW TO SELL SHARES

When you may redeem. You may sell your Advisor Shares back to a Fund on any day
the Exchange is open either through your Service Organization or directly to the
Fund. If your shares are held in the name of a Service Organization, you may
only sell the shares through that Service Organization. The Service Organization
may charge you a fee for its services. If you choose to sell your shares
directly to the Fund, you may do so by sending a letter of instruction or stock
power form to Schroder Mutual Funds, or by calling BFDS at (800) 464-3108.
Redemption requests received in good order by Schroder Mutual Funds, BFDS, your
Service Organization or another authorized broker or financial institution (as
described below) prior to the close of the Exchange on any day the Exchange is
open for trading will be priced at the net asset value next determined as of the
end of that day. Orders received after that time will receive the next day's net
asset value. A redemption request is in good order if it includes the exact name
in which the shares are registered, the investor's account number, and the
number of shares or the dollar amount of shares to be redeemed, and, for written
requests, if it is signed in accordance with the account registration. A bank,
broker-dealer, or certain other financial institutions must guarantee the
signature(s) of all account holders for any redemption request in excess of
$50,000, or for any amount being sent to an address or bank account that is not
registered on the account. The Stamp 2000 Medallion Guarantee is the only
acceptable form of guarantee. An investor can obtain this signature guarantee
from a commercial bank, savings bank, credit union, or broker-dealer that
participates in one of the Medallion signature guarantee programs. You may
redeem your shares by telephone only if you elected the telephone redemption
privilege option on your Account Application or otherwise in writing. Telephone
redemption proceeds will be sent only to you at an address on record with the
Fund for at least 30 days. Unless otherwise agreed, you may only exercise the
telephone redemption privilege to redeem shares worth not more than $50,000.
Each Trust may require additional documentation from shareholders that are
corporations, partnerships, agents, fiduciaries, surviving joint owners, those
acting through powers of attorney, or similar delegation.

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

Certain brokers or other financial institutions may accept redemption orders for
Advisor Shares on behalf of the Funds. Such brokers or financial institutions
may designate other intermediaries to accept redemption orders on behalf of the
Funds. For purposes of pricing, a Fund will be deemed to have received a
redemption order when an authorized broker or financial institution or, if
applicable, a broker or financial institution's authorized designee, receives
the order. Agreements between such brokers or financial institutions and
Schroder Fund Advisors Inc., the Trusts' distributor, provide that these orders
will be priced at the Fund's net asset value next determined after they are
received by the broker or financial institution or authorized designee. Orders
received in good order prior to the close of the Exchange on any day the
Exchange is open for trading will receive the net asset value next determined as
of the end of that day. Orders received after that time will receive the next
day's net asset value.

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

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

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

Redemptions in kind. The Trusts do not expect to redeem Advisor Shares in kind
under normal circumstances. If a Trust redeems your Advisor Shares in kind, you
should expect to incur brokerage expenses and other transaction costs upon the
disposition of the securities you receive from the Fund. In addition, the price
of those securities may change between the time when you receive the securities
and the time when you are able to dispose of them. Schroder Capital Funds
(Delaware) has agreed to redeem Advisor Shares of Schroder International Alpha
Fund and Schroder U.S. Opportunities Fund solely in cash up to the lesser of
$250,000 or 1% of the Fund's net assets attributable to Advisor Shares during
any 90-day period for any one shareholder. In consideration of the best
interests of the remaining shareholders, Schroder Capital Funds (Delaware) may
pay any redemption proceeds exceeding this amount for any of these Funds in
whole or in part by a distribution in kind of securities held by the applicable
Fund in lieu of cash. Schroder Global Series Trust and Schroder Series Trust may
pay redemption proceeds in any amount with respect to Schroder Emerging Market
Equity Fund, Schroder North American Equity Fund, Schroder U.S. Small and Mid
Cap Opportunities Fund, Schroder Enhanced Income Fund, Schroder Total Return
Fixed Income Fund, Schroder Municipal Bond Fund, or Schroder Short-Term
Municipal Bond Fund in whole or in part by a distribution in kind of securities
held by the applicable Fund in lieu of cash.

fiduciaries, and other types of shareholders to supply additional documents
which support their authority to effect a redemption. In an effort to prevent
unauthorized or fraudulent redemption requests by telephone, BFDS will follow
reasonable procedures to confirm that telephone instructions are genuine.
BFDS and the Trusts generally will not be liable for any losses due to
unauthorized or fraudulent purchase or redemption requests, but the applicable
party or parties may be liable if they do not follow these procedures.

For purposes of computing the redemption fee, redemptions by a shareholder to
which the fee applies will be deemed to have been made on a first-purchased,
first-redeemed basis.

EXCHANGES

You can exchange your Advisor Shares of a Fund for Advisor Shares of other funds
in the Schroder family of funds at any time at their respective net asset
values. An exchange of shares of Schroder Emerging Market Equity Fund, Schroder
International Alpha Fund, Schroder U.S. Opportunities Fund, and Schroder U.S.
Small and Mid Cap Opportunities Fund may be subject to a redemption fee of 2.00%
as described above under "Redemption Fee" (such that the exchange would be made
at net asset value minus any redemption fee). The Trusts would treat the
exchange as a sale of your Advisor Shares, and any gain on the exchange will
generally be subject to tax. For a listing of the Schroder funds available for
exchange and to exchange Advisor Shares, please call (800) 464-3108. (From
outside the United States, please call (617) 483-5000 and ask to speak with a
representative of the Schroder Mutual Funds.) In order to exchange shares by
telephone, you must complete the appropriate section of the Account Application.
The Trusts and Schroders reserve the right to change or suspend the exchange
privilege at any time. Schroders would notify shareholders of any such change or
suspension.

ADDITIONAL INFORMATION ABOUT ADVISOR SHARES; DISTRIBUTION PLANS

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

Distribution plans. Each Fund has adopted a Distribution Plan pursuant to Rule
12b-1 under the Investment Company Act of 1940, as amended, that allows the Fund
to pay distribution and other fees with respect to its Advisor Shares. Under the
Distribution Plan, a Fund may make payments at an annual rate of up to 0.25%
(0.35% for Schroder North American Equity Fund) of the average daily net assets

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

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

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

DIVIDENDS AND DISTRIBUTIONS

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

YOU CAN CHOOSE FROM FOUR DISTRIBUTION OPTIONS:

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

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

o For each Fund except Schroder North American Equity Fund, receive
distributions from net investment income in additional Advisor Shares
of your Fund while receiving capital gain distributions in cash; or

o Receive all distributions in cash.

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

FREQUENT PURCHASES AND REDEMPTIONS OF FUND SHARES

PAYMENT OF FEES

TAXES

Distributions are taxable to shareholders even if they are paid from income or
gains earned by a Fund before a shareholder's investment (and thus were included
in the price the shareholder paid). Distributions are taxable whether
shareholders receive them in cash or reinvest them in additional shares. For
Schroder Municipal Bond Fund and Schroder Short-Term Municipal Bond Fund,
distributions designated as "exempt-interest dividends" will generally not be
subject to federal income tax. Gains realized by a Fund on the sale or exchange
of investments the income from which is tax-exempt will be taxable to
shareholders. Shareholders of the Funds who receive social security or railroad
retirement benefits should consult their tax advisor to determine what effect,
if any, an investment in the Funds may have on the federal taxation of their
benefits. In addition, an investment in the Funds may result in liability for
federal alternative minimum tax, both for individual and corporate shareholders.

DERIVATIVES. A Fund's use of derivatives may affect the amount, timing, and
character of distributions to shareholders and, therefore, may increase the
amount of taxes payable by shareholders.

DISCLOSURES OF FUND PORTFOLIO INFORMATION

FINANCIAL HIGHLIGHTS

The financial highlights below are intended to help you understand financial
performance of each of the Schroder Enhanced Income Fund, Schroder Total Return
Fixed Income Fund, Schroder Municipal Bond Fund, and Schroder Short-Term
Municipal Bond Fund for the past five years or, if more recent, since their
inception. Certain information reflects financial results for a single Fund
share. The total returns represent the total return for an investment in Advisor
Shares of a Fund, assuming reinvestment of all dividends and distributions.

FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING
THROUGH THE PERIOD ENDED OCTOBER 31

ENHANCED INCOME FUND
2005(b) $10.00 $0.23 $(0.04) $0.19 $(0.23) $-- $--
TOTAL RETURN FIXED
INCOME FUND*
2005(b) $10.00 $0.28 $(0.15) $0.13 $(0.28) $-- $--
MUNICIPAL BOND FUND
2005 $10.11 $0.34 $(0.14) $0.20 $(0.34) $-- $--
2004(c) 10.00 0.21 0.11 0.32 (0.21) -- --
SHORT-TERM MUNICIPAL
BOND FUND
2005 $ 9.97 $0.27 $(0.05) $0.22 $(0.27) $-- $--
2004(c) 10.00 0.13 (0.03) 0.10 (0.13) -- --

* Schroder U.S. Core Fixed Income Fund was renamed Schroder Total Return
Fixed Income Fund effective May 15, 2006.

(b) Commenced operations on December 31, 2004. All ratios for the period have
been annualized, except for the Portfolio Turnover Rate.

(c) Commenced operations on December 31, 2003. All ratios for the period have
been annualized, except for the Portfolio Turnover Rate.

$(0.23) $ 9.96 1.96% $1,029 0.65% 1.07% 2.69% 61%
$(0.28) $ 9.85 1.30% $1,013 0.65% 3.30% 3.35% 571%
$(0.34) $ 9.97 1.99% $8,375 0.80% 1.18% 3.52% 27%
(0.21) 10.11 3.21 1,888 0.80 1.64 2.49 46
$(0.27) $ 9.92 2.21% $3,112 0.80% 1.10% 2.80% 36%
(0.13) 9.97 1.05 1,320 0.80 1.44 1.68 17

USA PATRIOT ACT

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

ADMINISTRATOR
SCHRODER NORTH AMERICAN EQUITY FUND AND SCHRODER U.S. OPPORTUNITIES FUND
Schroder Fund Advisors, Inc.
875 Third Avenue
New York, New York 10022

SUB-ADMINISTRATOR
SCHRODER INTERNATIONAL ALPHA FUND, SCHRODER NORTH AMERICAN EQUITY FUND, AND
SCHRODER U.S. OPPORTUNITIES FUND
SEI Investments Global Funds Services
1 Freedom Valley Drive
Oaks, Pennsylvania 19456

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

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

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

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

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

SCHRODER CAPITAL FUNDS (DELAWARE)
Schroder International Alpha Fund
Schroder U.S. Opportunities Fund

SCHRODER GLOBAL SERIES TRUST
Schroder North American Equity Fund

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

File No. 811-1911 - Schroder Capital Funds (Delaware)
File No. 811-7840 - Schroder Series Trust
File No. 811-21364 - Schroder Global Series Trust

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

SCHRODER SERIES TRUST

Schroder Emerging Market Equity Fund
Schroder U.S. Small and Mid Cap Opportunities Fund
Schroder Enhanced Income Fund
Schroder Total Return Fixed Income Fund
Schroder Municipal Bond Fund
Schroder Short-Term Municipal Bond Fund

FORM N-1A
PART B

STATEMENT OF ADDITIONAL INFORMATION

May 15, 2006

This Statement of Additional Information consists of three parts. Part 1 relates
to the Schroder Emerging Market Equity Fund and Schroder U.S. Small and Mid Cap
Opportunities Fund series of Schroder Series Trust. Part 2 relates to the
Schroder Enhanced Income Fund and Schroder Total Return Fixed Income Fund
series of Schroder Series Trust. Part 3 relates to the Schroder Municipal Bond
Fund and Schroder Short-Term Municipal Bond Fund series of Schroder Series
Trust.

This Statement of Additional Information ("SAI") is not a prospectus and is only
authorized for distribution when accompanied or preceded by a Prospectus for the
Funds, as amended or supplemented from time to time. This SAI relates to the
funds' Investor Shares and Advisor Shares. Investor Shares and Advisor Shares
are offered through separate Prospectuses, each dated May 15, 2006 (each, a
"Prospectus," and together, the "Prospectuses"). This SAI contains information
which may be useful to investors but which is not included in the Prospectuses,
as amended or supplemented from time to time. Investors may obtain free copies
of the Prospectuses by calling the Funds at (800) 464-3108. From outside the
United States, please call (617) 483-5000 and ask to speak with a Schroder
Mutual Funds representative.

Certain disclosure has been incorporated by reference into this SAI from the
Trust's most recent annual report. For a free copy of the annual report, please
call 1-800-464-3108.

SCHRODER SERIES TRUST

Schroder Emerging Market Equity Fund
Schroder U.S. Small and Mid Cap Opportunities Fund

FORM N-1A
PART B

STATEMENT OF ADDITIONAL INFORMATION

PART 1

MAY 15, 2006

TABLE OF CONTENTS

STATEMENT OF ADDITIONAL INFORMATION....................................... 1
TRUST HISTORY............................................................. 1
FUND CLASSIFICATION....................................................... 1
CAPITALIZATION AND SHARE CLASSES.......................................... 1
ADDITIONAL INFORMATION CONCERNING THE FUNDS' PRINCIPAL INVESTMENT
STRATEGIES............................................................. 2
NON-PRINCIPAL INVESTMENTS, INVESTMENT PRACTICES AND RISKS................. 18
INVESTMENT RESTRICTIONS................................................... 21
DISCLOSURE OF PORTFOLIO HOLDINGS.......................................... 23
MANAGEMENT OF THE TRUST................................................... 25
SCHRODERS AND ITS AFFILIATES.............................................. 33
PORTFOLIO MANAGERS........................................................ 33
PERFORMANCE INFORMATION OF CERTAIN OTHER ACCOUNTS MANAGED BY SCHRODERS.... 35
MANAGEMENT CONTRACT....................................................... 38
ADMINISTRATIVE SERVICES................................................... 40
DISTRIBUTOR............................................................... 40
BROKERAGE ALLOCATION AND OTHER PRACTICES.................................. 41
DETERMINATION OF NET ASSET VALUE.......................................... 42
REDEMPTION OF SHARES...................................................... 44
ARRANGEMENTS PERMITTING FREQUENT PURCHASES AND REDEMPTIONS OF FUND
SHARES................................................................. 44
TAXES..................................................................... 44
PRINCIPAL HOLDERS OF SECURITIES........................................... 49
CUSTODIAN................................................................. 49
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT.............................. 50
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM............................. 50
CODE OF ETHICS............................................................ 50
PROXY VOTING POLICIES AND PROCEDURES...................................... 50
LEGAL COUNSEL............................................................. 50
SHAREHOLDER LIABILITY..................................................... 50
FINANCIAL STATEMENTS...................................................... 51
APPENDIX A................................................................ A-1

STATEMENT OF ADDITIONAL INFORMATION

TRUST HISTORY

Schroder Series Trust (the "Trust") is a Massachusetts business trust
organized under the laws of The Commonwealth of Massachusetts on May 6, 1993.
The Trust's Agreement and Declaration of Trust (as amended, the "Declaration of
Trust"), which is governed by Massachusetts law, is on file with the Secretary
of State of The Commonwealth of Massachusetts. Schroder Emerging Market Equity
Fund and Schroder U.S. Small and Mid Cap Opportunities Fund (each, a "Fund," and
collectively, the "Funds") are series of the Trust. The Trust currently also
comprises four other publicly offered series, Schroder Enhanced Income Fund,
Schroder Total Return Fixed Income Fund, Schroder Municipal Bond Fund, and
Schroder Short-Term Municipal Bond Fund. Schroder Investment Management North
America Inc. ("Schroders") serves as investment manager to the Funds. Schroder
Investment Management North America Limited ("SIMNA Ltd.") serves as investment
sub-adviser to Schroder Emerging Market Equity Fund.

FUND CLASSIFICATION

Each Fund is an open-end management investment company registered under the
Investment Company Act of 1940, as amended (the "Investment Company Act"). Each
Fund is a "diversified" investment company under the Investment Company Act. For
a diversified investment company, this means that with respect to 75% of a
Fund's total assets (i) that Fund may not invest in securities of any issuer if,
immediately after such investment, more than 5% of the total assets of that Fund
(taken at current value) would be invested in the securities of that issuer
(this limitation does not apply to investments in U.S. government securities or
securities of other investment companies) or (ii) that Fund may not invest in a
security if, as a result of such investment, it would hold more than 10% (taken
at the time of such investment) of the outstanding voting securities of any one
issuer (this limitation does not apply to investments in U.S. Government
securities or securities of other investment companies). The Funds are not
subject to this limitation with respect to the remaining 25% of their total
assets.

CAPITALIZATION AND SHARE CLASSES

The Trust has an unlimited number of shares of beneficial interest that
may, without shareholder approval, be divided into an unlimited number of series
of such shares, which, in turn, may be divided into an unlimited number of
classes of such shares. The shares of each of the Funds described in this
Statement of Additional Information ("SAI") are currently divided into two
classes, Investor Shares and Advisor Shares. Each class of shares is offered
through a separate Prospectus. Unlike Investor Shares, Advisor Shares are
currently subject to distribution fees, so that the performance of a Fund's
Investor Shares will normally be more favorable than that of the Fund's Advisor
Shares over the same time period. Generally, expenses and liabilities particular
to a class of a Fund, such as distribution fees applicable only to Advisor
Shares, are allocated only to that class. Expenses and liabilities not related
to a particular class are allocated in relation to the respective net asset
value of each class, or on such other basis as the Trustees may in their
discretion consider fair and equitable to each class. A Fund may suspend the
sale of shares at any time.

-1-

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

ADDITIONAL INFORMATION CONCERNING THE FUNDS' PRINCIPAL INVESTMENT STRATEGIES

The following discussion provides additional information concerning each
Fund's principal investment strategies and the principal risks of each Fund
described in the Prospectuses. Unless a strategy or policy described below is
specifically prohibited by a Fund's investment restrictions as set forth in the
Prospectuses or under "Investment Restrictions" in this SAI, or by applicable
law, a Fund may engage in each of the practices described below, although only
the Funds indicated below and in the Prospectuses use the applicable strategy as
a principal investment strategy.

EQUITY SECURITIES (BOTH FUNDS). A Fund may primarily invest in equity
securities. Equity securities are securities that represent an ownership
interest (or the right to acquire such an interest) in a company and include
common and preferred stocks. Common stocks represent an equity or ownership
interest in an issuer. Preferred stocks represent an equity or ownership
interest in an issuer that pays dividends at a specified rate and that has
priority over common stock in the payment of dividends. In the event an issuer
is liquidated or declares bankruptcy, the claims of owners of bonds take
priority over holders of preferred stock, whose claims take priority over the
claims of those who own common stock.

While offering greater potential for long-term growth, equity securities
generally are more volatile and riskier than some other forms of investment,
particularly debt securities. Therefore, the value of an investment in a Fund
may at times decrease instead of increase.

Schroder U.S. Small and Mid Cap Opportunities Fund's investments may
include securities traded "over-the-counter" as well as those traded on a
securities exchange. Some securities, particularly over-the-counter securities,
may be more difficult to sell under some market conditions. Schroder Emerging
Market Equity Fund may also invest in securities traded "over-the-counter" as a
non-principal investment strategy.

Smaller Company Equity Securities. A Fund may invest in equity securities
of companies with small market capitalizations. Such investments may involve
greater risk than is usually associated with larger, more established companies.
These companies often have sales and earnings growth rates that exceed those of
companies with larger market capitalization. Such growth rates may in turn be
reflected in more rapid share price appreciation. However, companies with small
market capitalizations often have limited product lines, markets or financial
resources and may be dependent upon a relatively small

-2-

management group. These securities may have limited marketability and may be
subject to more abrupt or erratic movements in price than securities of
companies with larger market capitalizations or market averages in general.
Therefore, to the extent a Fund invests in securities with small market
capitalizations, the net asset value of the Fund may fluctuate more widely than
market averages.

Preferred Stock. Preferred stock represents an equity interest in a company
that generally entitles the holder to receive, in preference to holders of other
stocks such as common stocks, dividends at a specified rate and a fixed share of
proceeds resulting from a liquidation of the company. Preferred stock, unlike
common stock, generally has a stated dividend rate payable from the
corporation's earnings. Preferred stock dividends may be "cumulative" or
"non-cumulative." "Cumulative" dividend provisions require all or a portion of
prior unpaid dividends to be paid to preferred stockholders before dividends can
be paid on the issuer's common stock. Preferred stock may be "participating"
stock, which means that it may be entitled to a dividend that exceeds the stated
dividend in certain cases.

If interest rates rise, the fixed dividend on preferred stocks may be less
attractive, causing the price of preferred stocks to decline.

A company's preferred stock generally pays a dividend only after the
company makes required payments to holders of its bonds and other debt. In
addition, the rights of preferred stock on distribution of a company's assets in
the event of a liquidation are generally subordinate to the rights of holders of
the company's bonds or other creditors. As a result, the value of preferred
stock will usually react more strongly than bonds and other debt to actual or
perceived changes in the company's financial condition or prospects. Preferred
stocks of small companies may be more vulnerable to adverse developments than
those of larger companies.

WARRANTS TO PURCHASE SECURITIES (BOTH FUNDS). The Funds may invest in
equity-linked warrants. A Fund purchases the equity-linked warrants from a
broker, who in turn is expected to purchase shares in the local market and issue
a call warrant hedged on the underlying holdings. If a Fund exercises its call
and closes its position, the shares are expected to be sold and the warrant
redeemed with the proceeds. Each warrant represents one share of the underlying
stock. Therefore, the price, performance and liquidity of the warrant are all
directly linked to the underlying stock, less transaction costs. Equity-linked
warrants are valued at the closing price of the underlying security, then
adjusted for stock dividends declared by the underlying security. In addition to
the market risk related to the underlying holdings, a Fund bears additional
counterparty risk with respect to the issuing broker. Moreover, there is
currently no active trading market for equity-linked warrants.

FOREIGN INVESTMENTS (SCHRODER EMERGING MARKET EQUITY FUND). A Fund may
invest in securities principally traded in foreign markets. A Fund may also
invest in Eurodollar certificates of deposit and other certificates of deposit
issued by United States branches of foreign banks and foreign branches of United
States banks.

-3-

(such as delay in payment or delivery of securities or in the recovery of a
Fund's assets held abroad) and expenses not present in the settlement of
domestic investments. Also, because foreign securities may be denominated in
foreign currencies, the values of a Fund's assets may be affected favorably or
unfavorably by currency exchange rates and exchange control regulations, and a
Fund may incur costs in connection with conversion between currencies.

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

Income received by a Fund from sources within foreign countries may be
reduced by withholding and other taxes imposed by such countries. Tax
conventions between certain countries and the United States may reduce or
eliminate such taxes. It is impossible to determine the effective rate of
foreign tax in advance since the amount of a Fund's assets to be invested in
various countries is not known, and tax laws and their interpretations may
change from time to time and may change without advance notice. Any such taxes
paid by a Fund will reduce its net income available for distribution to
shareholders.

EMERGING MARKET SECURITIES (BOTH FUNDS). A Fund may invest in securities of
companies determined by Schroders to be "emerging market" issuers. The risks of
investing in foreign securities are particularly high when securities of issuers
based in developing or emerging market countries are involved. Investing in
emerging market countries involves certain risks not typically associated with
investing in U.S. securities, and imposes risks greater than, or in addition to,
risks of investing in foreign, developed countries. These risks include: greater
risks of nationalization or expropriation of assets or confiscatory taxation;
currency devaluations and other currency exchange rate fluctuations; greater
social, economic and political uncertainty and instability (including the risk
of war); more substantial government involvement in the economy; less government
supervision and regulation of the securities markets and participants in those
markets; controls on foreign investment and limitations on repatriation of
invested capital and on a Fund's ability to exchange local currencies for U.S.
dollars; unavailability of currency hedging techniques in certain emerging
market countries; the fact that companies in emerging market countries may be
smaller, less seasoned and newly organized companies; the difference in, or lack
of, auditing and financial reporting standards, which may result in
unavailability of material information about issuers; the risk that it may be
more difficult to obtain and/or enforce a judgment in a court outside the United
States; and, greater price volatility, substantially less liquidity, and
significantly smaller market capitalization of securities markets. Also, any
change in the leadership or politics of emerging market countries, or the
countries that exercise a significant influence over those countries, may halt
the expansion of or reverse the liberalization of foreign investment policies
now occurring and adversely affect existing investment opportunities.

In addition, a number of emerging market countries restrict, to various
degrees, foreign investment in securities. Furthermore, high rates of inflation
and rapid fluctuations in inflation rates have had, and may continue to have,
negative effects on the economies and securities markets of certain emerging
market countries.

-4-

DEPOSITARY RECEIPTS (SCHRODER EMERGING MARKET EQUITY FUND). A Fund may
invest in American Depositary Receipts ("ADRs"), Global Depository Receipts
("GDRs"), European Depository Receipts ("EDRs") or other similar securities
representing ownership of foreign securities (collectively, "Depositary
Receipts") if issues of these Depositary Receipts are available that are
consistent with the Fund's investment objective. Depositary Receipts generally
evidence an ownership interest in a corresponding foreign security on deposit
with a financial institution. Transactions in Depositary Receipts usually do not
settle in the same currency in which the underlying securities are denominated
or traded. Generally, ADRs, in registered form, are designed for use in the U.S.
securities markets and EDRs, in bearer form, are designed for use in European
securities markets. GDRs may be traded in any public or private securities
markets and may represent securities held by institutions located anywhere in
the world.

Investments in non-U.S. issuers through Depositary Receipts and similar
instruments may involve certain risks not applicable to investing in U.S.
issuers, including changes in currency rates, application of local tax laws,
changes in governmental administration or economic or monetary policy or changed
circumstances in dealings between nations. Costs may be incurred in connection
with conversions between various currencies. The Funds may enter into forward
currency contracts and purchase currencies on a spot basis to reduce currency
risk; however, currency hedging involves costs and may not be effective in all
cases.

FOREIGN CURRENCY TRANSACTIONS (SCHRODER EMERGING MARKET EQUITY FUND). A
Fund may engage in currency exchange transactions to protect against uncertainty
in the level of future foreign currency exchange rates and to increase current
return. A Fund may engage in both "transaction hedging" and "position hedging".

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

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

For transaction hedging purposes, a Fund may also purchase exchange-listed
and over-the-counter call and put options on foreign currency futures contracts
and on foreign currencies. A put option on a futures contract gives a Fund the
right to assume a short position in the futures contract until expiration of the
option. A put option on currency gives a Fund the right to sell a currency at an
exercise price until the expiration of the option. A call option on a futures
contract gives a Fund the right to assume a long position in the futures
contract until the expiration of the option. A call option on currency gives a
Fund the right to purchase a currency at the exercise price until the expiration
of the option. A Fund will engage in over-the-counter transactions only when
appropriate exchange-traded transactions are

-5-

unavailable and when, in Schroders' opinion, the pricing mechanism and liquidity
are satisfactory and the participants are responsible parties likely to meet
their contractual obligations.

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

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

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

To offset some of the costs to a Fund of hedging against fluctuations in
currency exchange rates, a Fund may write covered call options on those
currencies.

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

A Fund may also seek to increase its current return by purchasing and
selling foreign currency on a spot basis, and by purchasing and selling options
on foreign currencies and on foreign currency futures contracts, and by
purchasing and selling foreign currency forward contracts.

Currency Forward and Futures Contracts. A forward foreign currency exchange
contract involves an obligation to purchase or sell a specific currency at a
future date, which may be any fixed number of days from the date of the contract
as agreed by the parties, at a price set at the time of the contract. In the
case of a cancelable forward contract, the holder has the unilateral right to
cancel the contract at maturity by paying a specified fee. The contracts are
traded in the interbank market conducted directly between currency traders
(usually large commercial banks) and their customers. A forward contract
generally has no deposit requirement, and no commissions are charged at any
stage for trades. A foreign currency futures contract is a standardized contract
for the future delivery of a specified amount of

-6-

a foreign currency at a future date at a price set at the time of the contract.
Foreign currency futures contracts traded in the United States are designed by
and traded on exchanges regulated by the CFTC, such as the New York Mercantile
Exchange.

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

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

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

Foreign Currency Options. Options on foreign currencies operate similarly
to options on securities, and are traded primarily in the over-the-counter
market, although options on foreign currencies have been listed on several
exchanges. Such options will be purchased or written only when Schroders
believes that a liquid secondary market exists for such options. There can be no
assurance that a liquid secondary market will exist for a particular option at
any specific time. Options on foreign currencies are affected by all of those
factors which influence exchange rates and investments generally.

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

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

-7-

underlying currencies remain open, significant price and rate movements may take
place in the underlying markets that cannot be reflected in the U.S. options
markets.

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

CERTAIN DERIVATIVE INSTRUMENTS (BOTH FUNDS). Derivative instruments are
financial instruments whose value depends upon, or is derived from, the value of
an underlying asset, such as a security, index or currency. As described below,
to the extent permitted under "Investment Restrictions" below and in the
Prospectuses, a Fund may engage in a variety of transactions involving the use
of derivative instruments, including options and futures contracts on securities
and securities indices, options on futures contracts, and short sales. These
transactions may be used by a Fund for hedging purposes or, to the extent
permitted by applicable law, to increase its current return. Use of derivatives
other than for hedging purposes may be considered speculative, and when a Fund
invests in a derivative instrument it could lose more than the principal amount
invested.

OPTIONS. A Fund may purchase and sell covered put and call options on its
portfolio securities to enhance investment performance and to protect against
changes in market prices.

Covered call options. A Fund may write covered call options on its
portfolio securities to realize a greater current return through the receipt of
premiums than it would realize on its securities alone. Such option transactions
may also be used as a limited form of hedging against a decline in the price of
securities owned by a Fund.

A call option gives the holder the right to purchase, and obligates the
writer to sell, a security at the exercise price at any time before the
expiration date. A call option is "covered" if the writer, at all times while
obligated as a writer, either owns the underlying securities (or comparable
securities satisfying the cover requirements of the securities exchanges), or
has the right to acquire such securities through immediate conversion of
securities.

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

A Fund may terminate a call option that it has written before it expires by
entering into a closing purchase transaction. A Fund may enter into closing
purchase transactions in order to free itself to sell the underlying security or
to write another call on the security, realize a profit on a previously written
call option, or protect a security from being called in an unexpected market
rise. Any profits from a closing purchase transaction may be offset by a decline
in the value of the underlying security. Conversely, because increases in the
market price of a call option will generally reflect increases in the market
price of

-8-

the underlying security, any loss resulting from a closing purchase transaction
is likely to be offset in whole or in part by unrealized appreciation of the
underlying security owned by the Fund.

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

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

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

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

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

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

A Fund may also purchase put and call options to enhance its current
return. A Fund may also buy and sell combinations of put and call options on the
same underlying security to earn additional income.

-9-

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

An exchange-listed option may be closed out only on an exchange which
provides a secondary market for an option of the same series. Although a Fund
will enter into an option position only if Schroders believes that a liquid
secondary market exists, there is no assurance that a liquid secondary market on
an exchange will exist for any particular option or at any particular time. If
no secondary market were to exist, it would be impossible to enter into a
closing transaction to close out an option position. As a result, a Fund may be
forced to continue to hold, or to purchase at a fixed price, a security on which
it has sold an option at a time when Schroders believes it is inadvisable to do
so.

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

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

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

FUTURES CONTRACTS. To the extent permitted under "Investment Restrictions"
below and in the Prospectuses and by applicable law, a Fund may buy and sell
futures contracts, options on futures contracts, and related instruments in
order to hedge against the effects of adverse market changes or to increase
current return. Depending upon the change in the value of the underlying
security or index when a Fund enters into or terminates a futures contract, that
Fund may realize a gain or loss.

-10-

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

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

Positions taken in the futures markets are not normally held to maturity,
but are instead liquidated through offsetting transactions that may result in a
profit or a loss. While futures positions taken by a Fund will usually be
liquidated in this manner, a Fund may instead make or take delivery of the
underlying securities whenever it appears in Schroders' judgment economically
advantageous for the Fund to do so. A clearing corporation associated with the
exchange on which futures are traded assumes responsibility for such closing
transactions and guarantees that a Fund's sale and purchase obligations under
closed-out positions will be performed at the termination of the contract.

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

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

A Fund that invests in fixed income securities may also use futures to
adjust the duration of its fixed income portfolio and otherwise to manage
(increase or decrease) the Fund's exposure to interest rate risk.

-11-

hedged because it will have offsetting losses in its futures positions. In
addition, in such situations, if a Fund has insufficient cash, it may have to
sell securities to meet daily maintenance margin requirements. A Fund may have
to sell securities at a time when it may be disadvantageous to do so.

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

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

Depending on the change in the value of the index between the time when a
Fund enters into and terminates an index futures transaction, a Fund may realize
a gain or loss. The following example illustrates generally the manner in which
index futures contracts operate. The Standard & Poor's 100 Stock Index is
composed of 100 selected common stocks, most of which are listed on the New York
Stock Exchange. The S&P 100 Index assigns relative weightings to the common
stocks included in the Index, and the Index fluctuates with changes in the
market values of those common stocks. In the case of the S&P 100 Index,
contracts are to buy or sell 100 units. Thus, if the value of the S&P 100 Index
were $180, one contract would be worth $18,000 (100 units x $180). The stock
index futures contract specifies that no delivery of the actual stocks making up
the index will take place. Instead, settlement in cash must occur upon the
termination of the contract, with the settlement being the difference between
the contract price and the actual level of the stock index at the expiration of
the contract. For example, if a Fund enters into a futures contract to buy 100
units of the S&P 100 Index at a specified future date at a contract price of
$180 and the S&P 100 Index is at $184 on that future date, the Fund will gain
$400 (100 units x gain of $4). If a Fund enters into a futures contract to sell
100 units of the stock index at a specified future date at a contract price of
$180 and the S&P 100 Index is at $182 on that future date, the Fund will lose
$200 (100 units x loss of $2).

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

-12-

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

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

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

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

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

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

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

-13-

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

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

SPECIAL RISKS OF TRANSACTIONS IN FUTURES CONTRACTS AND RELATED OPTIONS

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

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

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

-14-

a Fund has purchased puts on futures contracts to hedge its portfolio against a
decline in the market, the securities or index on which the puts are purchased
may increase in value and the value of securities held in the portfolio may
decline. If this occurred, the Fund would lose money on the puts and also
experience a decline in value in its portfolio securities. In addition, the
prices of futures, for a number of reasons, may not correlate perfectly with
movements in the underlying securities or index due to certain market
distortions. First, all participants in the futures markets are subject to
margin deposit requirements. Such requirements may cause investors to close
futures contracts through offsetting transactions which could distort the normal
relationship between the underlying security or index and futures markets.
Second, the margin requirements in the futures markets are less onerous than
margin requirements in the securities markets in general, and as a result the
futures markets may attract more speculators than the securities markets do.
Increased participation by speculators in the futures markets may also cause
temporary price distortions. Due to the possibility of price distortion, even a
correct forecast of general market trends by Schroders may still not result in a
successful hedging transaction over a very short time period.

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

Other Risks. A Fund will incur brokerage fees in connection with its
futures and options transactions. In addition, while futures contracts and
options on futures may be purchased and sold to reduce certain risks, those
transactions themselves entail certain other risks. Thus, while a Fund may
benefit from the use of futures and related options, unanticipated changes in
interest rates or stock price movements may result in a poorer overall
performance for a Fund than if it had not entered into any futures contracts or
options transactions. Moreover, in the event of an imperfect correlation between
the futures position and the portfolio position which is intended to be
protected, the desired protection may not be obtained and the Fund may be
exposed to risk of loss. A Fund may be required to segregate certain of its
assets on the books of its custodian in respect of derivatives transactions
entered into by the Fund. As an open-end investment company, registered with the
SEC, the Trust is subject to federal securities laws, including the 1940 Act,
related rules and various SEC and SEC Staff positions. In accordance with these
positions, with respect to certain kinds of derivatives, the Trust must "set
aside" (referred to sometimes as "asset segregation") liquid assets, or engage
in other SEC- or Staff-approved measures while the derivatives contracts are
open. For example, with respect to forwards and futures contracts that are not
contractually required to "cash-settle," the Trust must cover its open positions
by setting aside liquid assets equal to the contracts' full, notional value.
With respect to forwards and futures that are contractually required to
"cash-settle," however, the Trust is permitted to set aside liquid assets in an
amount equal to the Trust's daily marked-to-market (net) obligation (i.e. the
Trust's daily net liability, if any) rather than the notional value. By setting
aside assets equal to only its net obligation under cash-settled forward or
futures the Trust will have the ability to employ leverage to a greater extent
than if the Trust were required to segregate assets equal to the full notional
value of such contracts. The use of leverage involves certain risks. The Trust
reserves the right to modify its asset segregation policies in the future to
comply with any changes in the positions articulated from time to time by the
SEC and its Staff.

SWAP AGREEMENTS. A Fund may enter into swap agreements and other types of
over-the-counter transactions with broker-dealers or other financial
institutions. Depending on their structures, swap

-15-

agreements may increase or decrease a Fund's exposure to long-or short-term
interest rates (in the United States or abroad), foreign currency values,
mortgage securities, corporate borrowing rates, or other factors such as
security prices or inflation rates. The value of a Fund's swap positions would
increase or decrease depending on the changes in value of the underlying rates,
currency values, or other indices or measures.

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

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

HYBRID INSTRUMENTS. These instruments are generally considered derivatives
and include indexed or structured securities, and combine the elements of
futures contracts or options with those of debt, preferred equity or a
depository instrument. A hybrid instrument may be a debt security, preferred
stock, warrant, convertible security, certificate of depositor other evidence of
indebtedness on which a portion of or all interest payments, and/or the
principal or stated amount payable at maturity, redemption or retirement, is
determined by reference to prices, changes in prices, or differences between
prices, of securities, currencies, intangibles, goods, articles or commodities
(collectively, "underlying assets"), or by another objective index, economic
factor or other measure, including interest rates, currency exchange rates, or
commodities or securities indices (collectively, "benchmarks"). Hybrid
instruments may take a number of forms, including, but not limited to, debt
instruments with interest or principal payments or redemption terms determined
by reference to the value of an index at a future time, preferred stock with
dividend rates determined by reference to the value of a currency, or
convertible securities with the conversion terms related to a particular
commodity.

-16-

risks generally depend upon factors unrelated to the operations or credit
quality of the issuer of the hybrid instrument, which may not be foreseen by the
purchaser, such as economic and political events, the supply and demand of the
underlying assets and interest rate movements. Hybrid instruments may be highly
volatile and their use by a Fund may not be successful.

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

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

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

Hybrid instruments may also carry liquidity risk since the instruments are
often "customized" to meet the portfolio needs of a particular investor, and
therefore, the number of investors that are willing and able to buy such
instruments in the secondary market may be smaller than that for more
traditional debt securities. Under certain conditions, the redemption value of
such an investment could be zero. In addition, because the purchase and sale of
hybrid investments could take place in an over-the-counter market without the
guarantee of a central clearing organization, or in a transaction between a Fund
and the issuer of the hybrid instrument, the creditworthiness of the
counterparty of the issuer of the hybrid instrument would be an additional risk
factor a Fund would have to consider and monitor. Hybrid instruments also may
not be subject to regulation by the Commodities Futures Trading Commission
("CFTC"), which generally regulates the trading of commodity futures by U.S.
persons, the Securities and Exchange Commission (the "Commission"), which
regulates the offer and sale of securities by and to U.S. persons, or any other
governmental regulatory authority.

STRUCTURED INVESTMENTS (SCHRODER EMERGING MARKET EQUITY FUND). A structured
investment is a security having a return tied to an underlying index or other
security or asset class. Structured

-17-

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

INVESTMENTS IN OTHER INVESTMENT COMPANIES (SCHRODER EMERGING MARKET EQUITY
FUND). The Fund may invest in shares of both open- and closed-end investment
companies (including single country funds and exchange-traded funds ("ETFs")).
Investing in another investment company exposes the Fund to all the risks of
that investment company, and, in general, subjects it to a pro rata portion of
the other investment company's fees and expenses. The Fund also may invest in
private investment funds, vehicles, or structures. ETFs are hybrid investment
companies that are registered as open-end investment companies or unit
investment trusts ("UITs") but possess some of the characteristics of closed-end
funds. ETFs typically hold a portfolio of securities that is intended to track
the price and dividend performance of a particular index. Common examples of
ETFs include S&P Depositary Receipts ("SPDRs") and iShares, which may be
purchased from the UIT or investment company issuing the securities or purchased
in the secondary market (SPDRs are listed on the American Stock Exchange and
iShares are listed on the New York Stock Exchange). The market price for ETF
shares may be higher or lower than the ETF's net asset value. The sale and
redemption prices of ETF shares purchased from the issuer are based on the
issuer's net asset value.

NON-PRINCIPAL INVESTMENTS, INVESTMENT PRACTICES AND RISKS

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

SHORT SALES (BOTH FUNDS). To the extent permitted under "Investment
Restrictions" below and in the Prospectuses, a Fund may seek to hedge
investments or realize additional gains through short sales.

Short sales are transactions in which a Fund sells a security it does not
own, in anticipation of a decline in the market value of that security. To
complete such a transaction, a Fund must borrow the security to make delivery to
the buyer. The Fund then is obligated to replace the security borrowed by
purchasing it at the market price at or prior to the time of replacement. The
price at such time may be more or less than the price at which the security was
sold by the Fund. Until the security is replaced, the

-18-

Fund is required to repay the lender any dividends or interest that accrue
during the period of the loan. To borrow the security, the Fund also may be
required to pay a premium, which would increase the cost of the security sold.
The net proceeds of the short sale will be retained by the broker (or by the
Fund's custodian in a special custody account), to the extent necessary to meet
margin requirements, until the short position is closed out. A Fund also will
incur transaction costs in effecting short sales.

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

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

REPURCHASE AGREEMENTS (BOTH FUNDS). A Fund may enter into repurchase
agreements without limit. A repurchase agreement is a contract under which a
Fund acquires a security for a relatively short period (usually not more than
one week) subject to the obligation of the seller to repurchase and the Fund to
resell such security at a fixed time and price (representing the Fund's cost
plus interest). It is each of the Fund's present intention to enter into
repurchase agreements only with member banks of the Federal Reserve System and
securities dealers meeting certain criteria as to creditworthiness and financial
condition, and only with respect to obligations of the U.S. government or its
agencies or instrumentalities or other high quality short-term debt obligations.
Repurchase agreements may also be viewed as loans made by a Fund which are
collateralized by the securities subject to repurchase. Schroders will monitor
such transactions to ensure that the value of the underlying securities will be
at least equal at all times to the total amount of the repurchase obligation,
including the interest factor. If the seller defaults, a Fund could realize a
loss on the sale of the underlying security to the extent that the proceeds of
sale including accrued interest are less than the resale price provided in the
agreement including interest. In addition, if the seller should be involved in
bankruptcy or insolvency proceedings, a Fund may incur delay and costs in
selling the underlying security or may suffer a loss of principal and interest
if the Fund is treated as an unsecured creditor and required to return the
underlying collateral to the seller's estate.

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

-19-

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

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

PRIVATE PLACEMENTS AND RESTRICTED SECURITIES. (SCHRODER U.S. SMALL AND MID
CAP OPPORTUNITIES FUND). A Fund may invest in securities that are purchased in
private placements. While such private placements may often offer attractive
opportunities for investment not otherwise available on the open market, the
securities so purchased are often "restricted securities," i.e., securities
which cannot be sold to the public without registration under the Securities Act
of 1933 or the availability of an exemption from registration (such as Rules 144
or 144A), or which are "not readily marketable" because they are subject to
other legal or contractual delays in or restrictions on resale. Because there
may be relatively few potential purchasers for such investments, especially
under adverse market or economic conditions or in the event of adverse changes
in the financial condition of the issuer, a Fund could find it more difficult to
sell such securities when Schroders believes it advisable to do so or may be
able to sell such securities only at prices lower than if such securities were
more widely held. At times, it may also be more difficult to determine the fair
value of such securities for purposes of computing a Fund's net asset value.

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

-20-

Generally speaking, restricted securities may be sold only to qualified
institutional buyers, or in a privately negotiated transaction to a limited
number of purchasers, or in limited quantities after they have been held for a
specified period of time and other conditions are met pursuant to an exemption
from registration, or in a public offering for which a registration statement is
in effect under the Securities Act of 1933. A Fund may be deemed to be an
"underwriter" for purposes of the Securities Act of 1933 when selling restricted
securities to the public, and in such event a Fund may be liable to purchasers
of such securities if the registration statement prepared by the issuer, or the
prospectus forming a part of it, is materially inaccurate or misleading. The
Staff of the Securities and Exchange Commission (the "SEC") currently takes the
view that any delegation by the Trustees of the authority to determine that a
restricted security is readily marketable (as described in the investment
restrictions of the Funds) must be pursuant to written procedures established by
the Trustees and the Trustees have delegated such authority to Schroders. If no
qualified institutional buyers are interested in purchasing the securities, then
a Fund may not be able to sell such securities. In the event that the Trustees,
or persons designated by the Trustees, determine that a security is "readily
marketable" pursuant to these procedures, and a Fund is not able to sell such
security at the price that such persons anticipate, then the Fund's net asset
value will decrease.

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

INVESTMENT RESTRICTIONS

As fundamental investment restrictions, which may only be changed with
approval by the holders of a majority of the outstanding voting securities of
that Fund, a Fund may not:

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

Note: The Investment Company Act currently prohibits an open-end investment
company from issuing any senior securities, except to the extent it is permitted
to borrow money (see Note following restriction 2, below). A class of securities
may be senior to the Fund's shares of beneficial interest if it provides a
preference upon liquidation, preferential dividends, or similar rights.

2. borrow money, except to the extent permitted by applicable law from time to
time;

-21-

less the amount of all liabilities and indebtedness (other than such borrowing)
of the investment company, bears to the amount of such borrowing is at least
300%.

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

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

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

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

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

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

----------

As a matter of non-fundamental policy, each of the Funds may not purchase
securities when outstanding borrowings of money exceed 5% of the Fund's total
assets.

In addition, each of the Funds may, as a matter of non-fundamental policy,
engage in short sales of securities as described in this SAI from time to time,
although each Fund does not normally invest substantially in short sales.

-22-

Each Fund may, as a non-fundamental policy, pledge up to one-third of its
assets in connection with permissible borrowings by the Fund. In addition, as a
non-fundamental policy, the Funds will not invest in other companies for the
purpose of exercising control of those companies.

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

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

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

DISCLOSURE OF PORTFOLIO HOLDINGS

Through filings made with the SEC on Form N-CSR and Form N-Q, each of the
Funds makes its full portfolio holdings publicly available to shareholders on a
quarterly basis. Each Fund normally makes such filings on or shortly after the
sixtieth day following the end of a fiscal quarter. Each Fund delivers its
complete portfolio schedules for the second and fourth fiscal quarters, required
to be filed on Form N-CSR, to shareholders in the Funds' semi-annual and annual
reports. The Funds do not deliver their complete portfolio schedules for the
first and third fiscal quarters, required to be filed on Form N-Q, to
shareholders, but these schedules are available on the SEC website at
www.sec.gov.

POLICIES AND PROCEDURES. The Schroder Funds have adopted policies and
procedures with respect to disclosure of the Funds' portfolio holdings. These
procedures apply both to arrangements, expected to be in place over a period of
time, to make available information about the securities in a Fund's portfolio
and with respect to disclosure on a one-time, irregular basis. These procedures
provide that neither Schroders nor SIMNA Ltd., as applicable, nor the Funds
receive any compensation in return for the disclosure of information about a
Fund's portfolio securities or for any ongoing arrangements to make available
information about a Fund's portfolio securities. Portfolio holdings may be
disclosed to certain third parties in advance of quarterly filings by the Funds
with the SEC. In each instance of such advance disclosure, a determination will
have been made by Schroders or SIMNA Ltd., as applicable, that such disclosure
is supported by a legitimate business purpose of the relevant Fund and that the
recipients, except as described below, are subject to an independent duty not to
disclose (whether contractually or as a matter of law) or trade on the nonpublic
information. The Funds currently disclose nonpublic portfolio holdings
information only to recipients who have agreed in writing with Schroders, or
SIMNA Ltd., as applicable, to keep such information confidential. In some cases
these recipients are subject to a contractual obligation to keep portfolio
holdings information confidential, and in other cases they are subject to a
contractual obligation to keep information disclosed to them by the Funds
confidential.

-23-

Recipients of nonpublic portfolio holdings information are also subject to legal
requirements prohibiting them from trading on material nonpublic information. In
the future, where Schroders or SIMNA Ltd., as applicable, does not believe that
the risk of disclosure is material, a Fund may disclose information to
recipients who do not have an independent duty not to disclose the nonpublic
information and are not party to a confidentiality agreement. Any inappropriate
use of such information by the recipient could be harmful to the Fund and its
shareholders. The Funds have no ongoing arrangements to make available nonpublic
portfolio holdings information, except as described in the procedures below.
Nonpublic portfolio holdings information is disclosed by a Fund's portfolio
management team, except in cases where the information is disclosed by other
personnel or agents of the Funds, as described below. The following list
describes the circumstances in which the Fund discloses its portfolio holdings
to select third parties:

Portfolio Managers. Portfolio managers shall have full daily access to
portfolio holdings for the Funds for which they have direct management
responsibility. Under Schroders' code of ethics, portfolio managers are
prohibited from disclosing nonpublic information to third parties. Portfolio
managers may release and discuss specific portfolio holdings with various
broker-dealers, on an as-needed basis, for purposes of analyzing the impact of
existing and future market changes on the prices, availability or demand, and
liquidity of such securities, as well as for the purpose of assisting portfolio
managers in the trading of such securities.

Schroders. In its capacity as adviser to the Funds, certain Schroders
personnel and personnel of its affiliates, SIMNA Ltd. and Schroder Investment
Management Limited, that deal directly with the processing, settlement, review,
control, auditing, reporting, or valuation of portfolio trades will have full
daily access to Fund portfolio holdings. Employees of SIMNA Ltd. and Schroder
Investment Management Limited with access to portfolio holdings information are
provided with training on the Trust's policies and procedures regarding
disclosure of portfolio holdings information. Training is provided by the
Schroders compliance department in the applicable jurisdiction, after
consultation with Schroders plc's global compliance department located in
London. The Trust's Chief Compliance Officer reports to the Trustees regarding
compliance by such affiliates.

External Servicing Agents. Appropriate personnel employed by entities that
assist in the review and/or processing of Fund portfolio transactions, which
include fund accounting agents, pricing services, and the custodian have daily
access to all Fund portfolio holdings. Portfolio holdings information is
provided on an ongoing basis to the Funds' administrator SEI Investments Global
Funds Services ("SEI"). PricewaterhouseCoopers LLP, the Funds' independent
registered public accounting firm, receives portfolio holdings information
yearly in connection with the Funds' audit. Schroders utilizes the services of
Institutional Shareholder Services ("ISS") to assist with proxy voting. ISS
receives full Fund portfolio holdings on a monthly basis for the Funds for which
it provides services.

Ranking/Rating Agencies. Morningstar, Lipper, Thomson and Bloomberg receive
the Funds' full portfolio holdings no earlier than 60 calendar days following
the end of each calendar quarter.

-24-

information and the date on which the information will be disclosed; (vi) the
proposed recipient's relationship to the Fund; (vii) the ability of Schroders to
monitor that such information will be used by the proposed recipient in
accordance with the stated purpose for the disclosure; (viii) whether a
confidentiality agreement will be in place with such proposed recipient; and
(ix) whether any potential conflicts exist regarding such disclosure between the
interests of the Fund shareholders, on the one hand, and those of the Fund's
investment adviser, principal underwriter, or any affiliated person of the Fund.

In general, the Schroder Funds policies and procedures provide that
disclosure by Schroders of information about the holdings of client accounts
other than the Funds' accounts is governed by the policies relating to
protection of client information pursuant to Regulation S-P. Details about the
holdings of any portfolio other than the Funds, however, may provide holdings
information that is substantially identical to holdings of the Funds that have
not yet been publicly released. To the extent that disclosure of non-Fund
portfolios to persons other than those enumerated in the Schroder Funds policies
and procedures would provide information substantially identical to the Funds'
portfolios, that disclosure is subject to the Schroder Funds policies and
procedures.

Nothing in the Schroder Funds policies and procedures prohibits any
investment group from providing to a research service provider a coverage list
that identifies securities that the investment group follows for research
purposes provided that: (i) the list of securities does not consist exclusively
of the current portfolio holdings of any Fund; and (ii) no information about
actual holdings by any account is included.

The Board of Trustees reviews and reapproves the policies and procedures related
to portfolio disclosure, including the list of approved recipients, as often as
deemed appropriate, but not less than annually, and may make any changes it
deems appropriate.

MANAGEMENT OF THE TRUST

The Trustees of the Trust are responsible for the general oversight of the
Trust's business. Subject to such policies as the Trustees may determine,
Schroders furnishes a continuing investment program for the Funds and makes
investment decisions on their behalf, except that SIMNA Ltd., an affiliate of
Schroders, serves as sub-adviser responsible for portfolio management for
Schroder Emerging Market Equity Fund. Subject to the control of the Trustees,
Schroders also manages the Funds' other affairs and business.

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

DISINTERESTED TRUSTEES

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

-25-

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

David N. Dinkins, 78 Trustee Indefinite Trustee of the Trust and 9 None
875 Third Avenue, 22nd Fl. Since 1994 Schroder Capital Funds
New York, NY 10022 (Delaware); Professor,
Columbia School of
International and Public
Affairs.

Peter E. Guernsey, 84 Trustee Indefinite Trustee of the Trust and 9 None
875 Third Avenue, 22nd Fl. Since 1997 Schroder Capital Funds
New York, NY 10022 (Delaware). Retired. Formerly,
Senior Vice President, Marsh &
McLennan, Inc. (insurance
services).

John I. Howell, 89 Trustee Indefinite Trustee and Lead Disinterested 10 American Life
875 Third Avenue, 22nd Fl. Since 1996 Trustee of the Trust, Schroder Assurance Co. of New
New York, NY 10022 Capital Funds (Delaware) and York; United States
Schroder Global Series Trust; Life Insurance Co.
Private Consultant, Indian of the City of New
Rock Corporation (individual York; First
accounting). SunAmerica Life
Insurance Co.

Peter S. Knight, 55 Trustee Indefinite Trustee of the Trust, Schroder 10 Medicis; PAR
875 Third Avenue, 22nd Fl. Since 1997 Capital Funds (Delaware) and Pharmaceuticals; and
New York, NY 10022 Schroder Global Series Trust; Entremed
Director, Schroder Japanese
Long/Short Fund; Director,
Schroder Credit Renaissance
Fund, LP; Director, Schroder
Alternative Strategies Fund;
President, Generation
Investment Management U.S.
Formerly, Managing Director,
MetWest Financial (financial
services); President, Sage
Venture Partners (investing);
and Partner, Wunder, Knight,
Forcsey & DeVierno (law firm).

William L. Means, 69 Trustee Indefinite Trustee of the Trust and 9 None
875 Third Avenue, 22nd Fl. Since 1997 Schroder Capital Funds
New York, NY 10022 (Delaware). Retired.

Clarence F. Michalis, 84 Trustee Indefinite Trustee of the Trust, Schroder 10 None
875 Third Avenue, 22nd Fl. Since 1997 Capital Funds (Delaware) and
New York, NY 10022 Schroder Global Series

-26-

Trust. Retired.
Formerly, Chairman of
the Board of Directors,
Josiah Macy, Jr.,
Foundation.

Hermann C. Schwab, 86 Trustee Indefinite Trustee of the Trust and 9 None
875 Third Avenue, 22nd Fl. Since 1997 Schroder Capital Funds
New York, NY 10022 (Delaware). Retired. Formerly,
consultant to Schroder Capital
Management International, Inc.

James D. Vaughn, 60 Trustee Indefinite Trustee and Chairman of the 10 AMG National Trust
875 Third Avenue, 22nd Fl. Since 2003 Audit Committee of the Trust, Bank
New York, New York 10022 Schroder Capital Funds
(Delaware) and Schroder Global
Series Trust. Retired.
Formerly, Managing Partner,
Deloitte & Touche USA,
LLP-Denver.

INTERESTED TRUSTEE

The following table sets forth certain information concerning a Trustee who is
an "interested person" (as defined in the Investment Company Act) of the Trust
(an "Interested Trustee").

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

Peter L. Clark, 41* Trustee and Indefinite Trustee and Chairman of the 9 None
875 Third Avenue, 22nd Fl. Chairman Since 2003 Trust and Schroder Capital
New York, NY 10022 Funds (Delaware); Chief
Executive Officer, Schroders.
Formerly, Managing Director
and Head of Emerging Markets,
JP Morgan/JP Morgan Investment
Management; Vice President and
Head of Proprietary Trading,
JP Morgan.

* Mr. Clark is an Interested Trustee due to his status as an officer and
employee of Schroder Investment Management North America Inc. and its
affiliates.

-27-

OFFICERS

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

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

Peter L. Clark, 41 Trustee and Chairman Indefinite Trustee and Chairman of the
875 Third Avenue, 22nd Fl. Since 2003 Trust and Schroder Capital
New York, NY 10022 Funds (Delaware); Director and
Chief Executive Officer,
Schroders. Formerly, Managing
Director and Head of Emerging
Markets, JP Morgan/JP Morgan
Investment Management; Vice
President and Head of
Proprietary Trading, JP
Morgan.

Mark A. Hemenetz, 49 President and Indefinite Chief Operating Officer,
875 Third Avenue, 22nd Fl. Principal Executive Since May 2004 Director and Executive Vice
New York, NY 10022 Officer President, Schroders; Chairman
and Director, Schroder Fund
Advisors Inc.; President and
Principal Executive Officer,
the Trust, Schroder Capital
Funds (Delaware) and Schroder
Global Series Trust. Formerly,
Executive Vice President and
Director of Investment
Management, Bank of New York.

Alan M. Mandel, 48 Treasurer and Chief Indefinite First Vice President,
875 Third Avenue, 22nd Fl. Financial Officer Since May 2003 Schroders; Chief Operating
New York, NY 10022 Officer, Treasurer and
Director, Schroder Fund
Advisors Inc.; Treasurer and
Chief Financial Officer, the
Trust, Schroder Global Series
Trust and Schroder Capital
Funds (Delaware).

Carin F. Muhlbaum, 44 Executive Vice Indefinite Senior Vice President, General
875 Third Avenue, 22nd Fl. President and Clerk Vice President since Counsel, and Chief
New York, NY 10022 1998; Clerk since 2001 Administrative Officer,
Schroders; Director, Senior
Vice President, Secretary and
General Counsel, Schroder Fund
Advisors Inc.; Executive Vice
President and Secretary/Clerk,
the Trust, Schroder Global
Series Trust and Schroder
Capital Funds (Delaware).

Stephen M. DeTore, 54 Chief Compliance Indefinite Senior Vice President,
875 Third Avenue, 22nd Fl. Officer Since 2005 Director and Chief Compliance
New York, NY 10022 Officer, Schroders; Senior
Vice President and Director,
Schroder Fund Advisors Inc.;
Chief Compliance Officer, the
Trust, Schroder Capital Funds
(Delaware) and Schroder Global
Series Trust. Formerly, Deputy
General Counsel, Gabelli Asset
Management Inc.; Associate
General Counsel, Gabelli Asset
Management, Inc.; Assistant
Director, Office of
Examination Support, U.S.
Securities and Exchange
Commission.

Angel Lanier, 43 Assistant Secretary Indefinite Assistant Vice President,
875 Third Avenue, 22nd Fl. Since 2005 Schroders; Assistant Vice
New York, NY 10022 President, Schroder Fund
Advisors Inc.; Assistant
Secretary of the Trust,
Schroder Capital Funds
(Delaware) and Schroder Global
Series Trust. Formerly,
Associate, Schroders.

-28-

CERTAIN AFFILIATIONS

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

POSITIONS HELD WITH
AFFILIATED PERSONS OR
PRINCIPAL UNDERWRITERS
NAME OF THE TRUST
----------------- ------------------------------------------------------------
Peter L. Clark Trustee and Chairman of the Trust and Schroder Capital Funds
(Delaware); Director and Chief Executive Officer, Schroders.
Formerly, Managing Director and Head of Emerging Markets, JP
Morgan/JP Morgan Investment Management; Vice President and
Head of Proprietary Trading, JP Morgan.

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

Alan M. Mandel First Vice President, Schroders; Chief Operating Officer,
Treasurer and Director, Schroder Fund Advisors Inc.;
Treasurer and Chief Financial Officer, the Trust, Schroder
Global Series Trust, Schroder Capital Funds (Delaware).

Carin F. Muhlbaum Senior Vice President, General Counsel, and Chief
Administrative Officer, Schroders; Director, Senior Vice
President, Secretary and General Counsel, Schroder Fund
Advisors Inc.; Executive Vice President and Secretary/Clerk,
the Trust, Schroder Global Series Trust, and Schroder
Capital Funds (Delaware).

Stephen M. DeTore Senior Vice President, Director and Chief Compliance
Officer, Schroders; Senior Vice President and Director,
Schroder Fund Advisors Inc.; Chief Compliance Officer, the
Trust, Schroder Global Series Trust, and Schroder Capital
Funds (Delaware).

Angel Lanier Assistant Vice President, Schroders; Assistant Vice
President, Schroder Fund Advisors Inc.; Assistant Secretary,
the Trust, Schroder Global Series Trust, and Schroder
Capital Funds (Delaware).

COMMITTEES OF THE BOARD OF TRUSTEES

Audit Committee. The Board of Trustees has an Audit Committee composed of all of
the Disinterested Trustees (Messrs. Dinkins, Guernsey, Howell, Knight, Means,
Michalis, Schwab and Vaughn). The Audit Committee provides oversight with
respect to the internal and external accounting and auditing procedures of the
Funds and, among other things, considers the selection of independent public
accountants for the Funds and the scope of the audit, approves all audit and
permitted non-audit services proposed to be performed by those accountants on
behalf of the Funds, and considers other services provided by those accountants
to the Funds and Schroders and their affiliates and the possible effect of those
services on the independence of those accountants. The Audit Committee met four
times during the fiscal year ended October 31, 2005.

-29-

Committee's criteria. Nominee recommendations may be submitted to the Clerk of
the Trust at the Trust's principal business address. The Nominating Committee
did not meet during the fiscal year ended October 31, 2005.

SECURITIES OWNERSHIP

For each Trustee, the following table discloses the dollar range of equity
securities beneficially owned by the Trustee, on an aggregate basis, in any
registered investment companies overseen by the Trustee within the Schroder
family of investment companies, as of December 31, 2005.

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

Ranges: Ranges:
------- -------
None None
$1-$10,000 $1-$10,000
$10,001-$50,000 $10,001-$50,000
$50,001-$100,000 $50,001-$100,000
Over $100,000 Over $100,000

DISINTERESTED TRUSTEES
DAVID N. DINKINS $10,001-$50,000
EMERGING MARKET EQUITY FUND None
U.S. SMALL AND MID CAP OPPORTUNITIES FUND None

PETER E. GUERNSEY None
EMERGING MARKET EQUITY FUND None
U.S. SMALL AND MID CAP OPPORTUNITIES FUND None

JOHN I. HOWELL $10,001-$50,000
EMERGING MARKET EQUITY FUND None
U.S. SMALL AND MID CAP OPPORTUNITIES FUND None

PETER S. KNIGHT None
EMERGING MARKET EQUITY FUND None
U.S. SMALL AND MID CAP OPPORTUNITIES FUND None

WILLIAM L. MEANS $1-10,000
EMERGING MARKET EQUITY FUND None

-30-

U.S. SMALL AND MID CAP OPPORTUNITIES FUND None

CLARENCE F. MICHALIS Over $100,000
EMERGING MARKET EQUITY FUND None
U.S. SMALL AND MID CAP OPPORTUNITIES FUND None

HERMANN C. SCHWAB None
EMERGING MARKET EQUITY FUND None
U.S. SMALL AND MID CAP OPPORTUNITIES FUND None

JAMES D. VAUGHN Over $100,000
EMERGING MARKET EQUITY FUND None
U.S. SMALL AND MID CAP OPPORTUNITIES FUND None

INTERESTED TRUSTEES
PETER L. CLARK $10,001-$50,000
EMERGING MARKET EQUITY FUND None
U.S. SMALL AND MID CAP OPPORTUNITIES FUND None

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

For Disinterested Trustees and their immediate family members, the following
table provides information regarding each class of securities owned beneficially
in an investment adviser or principal underwriter of the Trust, or a person
(other than a registered investment company) directly or indirectly controlling,
controlled by, or under common control with an investment adviser or principal
underwriter of the Trust, as of December 31, 2005:

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

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

-31-

TRUSTEES' COMPENSATION

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

The following table sets forth approximate information regarding compensation
received by Trustees from the "Fund Complex" for the fiscal year ended October
31, 2005. (Interested Trustees who are employees of Schroders or its affiliates
and officers of the Trust receive no compensation from the Trust and are
compensated in their capacities as employees of Schroders and its affiliates).

AGGREGATE TOTAL COMPENSATION FROM
COMPENSATION TRUST AND FUND COMPLEX
NAME OF TRUSTEE FROM TRUST PAID TO TRUSTEES*
-------------------- ------------ -----------------------
David N. Dinkins $12,615 $20,080
Peter E. Guernsey $12,615 $20,080
John I. Howell $ 5,091 $20,080
Peter S. Knight $ 4,591 $17,750
William L. Means $12,565 $20,000
Clarence F. Michalis $ 5,091 $20,080
Hermann C. Schwab $12,615 $20,080
James D. Vaughn $ 5,040 $20,000

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

The Trust's Declaration of Trust provides that the Trust will indemnify its
Trustees and officers against liabilities and expenses incurred in connection
with litigation in which they may be involved because of their offices with the
Trust, except if it is determined in the manner specified in the Declaration of
Trust that they have not acted in good faith in the reasonable belief that their
actions were in the best interests of the Trust or that such indemnification
would relieve any officer or Trustee of any liability to the Trust or its
shareholders by reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of his or her duties. The Trust by-laws provide that the
conduct of a Trustee shall be evaluated solely by reference to a hypothetical
reasonable person, without regard to any special expertise, knowledge, or other
qualifications of the Trustee, or any determination that the Trustee is an
"audit committee financial expert." The Trust bylaws provide that the Trust will
indemnify its Trustees against liabilities and expenses incurred in connection
with litigation or formal or informal investigations in which they may become
involved because of their service as Trustees, except to the extent prohibited
by the Declaration of Trust. The Trust, at its expense, provides liability
insurance for the benefit of its Trustees and officers.

-32-

SCHRODERS AND ITS AFFILIATES

Schroders serves as the investment adviser for the Funds. Schroders is a
wholly owned subsidiary of Schroder U.S. Holdings Inc., which currently engages
through its subsidiary firms in the asset management business. Affiliates of
Schroder U.S. Holdings Inc. (or their predecessors) have been investment
managers since 1927. Schroder U.S. Holdings Inc. is a wholly owned subsidiary of
Schroder International Holdings, which is a wholly owned subsidiary of Schroders
plc, a publicly owned holding company organized under the laws of England.
Schroders plc and its affiliates currently engage in the asset management
business, and as of December 31, 2005, had under management assets of
approximately $211 billion. Schroders' address is 875 Third Avenue, 22nd Floor,
New York, New York 10022.

SIMNA Ltd., an affiliate of Schroders, has served as sub-adviser to
Schroder Emerging Market Equity Fund since its inception.

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

PORTFOLIO MANAGERS

The portfolio managers primarily responsible for making investment
decisions for Schroder Emerging Markets Fund are James Gotto, Waj Hashmi, Robert
Davy and Allan Conway. The portfolio manager primarily responsible for making
investment decisions for Schroder U.S. Small and Mid Cap Opportunities Fund is
Jenny Jones.

Other Accounts Managed. The following tables show information regarding
other accounts managed by the portfolio managers of Schroder Emerging Market
Equity Fund and Schroder U.S. Small and Mid Cap Opportunities Fund, as of
January 31, 2006:

NUMBER OF TOTAL ASSETS IN
ACCOUNTS WHERE ACCOUNTS WHERE
ADVISORY FEE ADVISORY FEE
IS BASED ON IS BASED ON
NUMBER OF TOTAL ASSETS ACCOUNT ACCOUNT
ACCOUNTS IN ACCOUNTS PERFORMANCE PERFORMANCE
--------- ---------------- -------------- ---------------

SCHRODER EMERGING MARKET EQUITY FUND
JAMES GOTTO
Registered Investment Companies None None None None
Other Pooled Investment Vehicles 8 $2.542 billion None None
Other Accounts 7 $942 million None None
WAJ HASHMI
Registered Investment Companies None None None None
Other Pooled Investment Vehicles 8 $2.542 billion None None
Other Accounts 7 $942 million None None

-33-

ROBERT DAVY
Registered Investment Companies None None None None
Other Pooled Investment Vehicles 8 $2.542 billion None None
Other Accounts 7 $942 million None None
ALLAN CONWAY
Registered Investment Companies None None None None
Other Pooled Investment Vehicles 4 $1.929 billion None None
Other Accounts 6 $1.411 billion None None
SCHRODER U.S. SMALL AND MID CAP OPPORTUNITIES FUND
JENNY JONES
Registered Investment Companies 2 $946.4 million None None
Other Pooled Investment Vehicles 7 $1,725.5 million None None
Other Accounts 2 $67.3 million None None

Material Conflicts of Interest. Whenever a portfolio manager of a Fund
manages other accounts, potential conflicts of interest exist, including
potential conflicts between the investment strategy of the Fund and the
investment strategy of the other accounts. For example, in certain instances, a
portfolio manager may take conflicting positions in a particular security for
different accounts, by selling a security for one account and continuing to hold
it for another account. In addition, the fact that other accounts require the
portfolio manager to devote less than all of his or her time to a Fund may be
seen itself to constitute a conflict with the interest of the Fund.

Each portfolio manager may also execute transactions for another fund or
account at the direction of such fund or account that may adversely impact the
value of securities held by a Fund. Securities selected for funds or accounts
other than such Fund may outperform the securities selected for the Fund.
Finally, if the portfolio manager identifies a limited investment opportunity
that may be suitable for more than one fund or other account, a Fund may not be
able to take full advantage of that opportunity due to an allocation of that
opportunity across all eligible funds and accounts. Schroders' policies,
however, require that portfolio managers allocate investment opportunities among
accounts managed by them in an equitable manner over time. Orders are normally
allocated on a pro rata basis, except that in certain circumstances, such as the
small size of an issue, orders will be allocated among clients in a manner
believed by Schroders to be fair and equitable over time. See "Brokerage
Allocation and Other Practices" for more information about this process.

The structure of a portfolio manager's compensation may give rise to
potential conflicts of interest. A portfolio manager's base pay tends to
increase with additional and more complex responsibilities that include
increased assets under management, which indirectly links compensation to sales.
Also, potential conflicts of interest may arise since the structure of
Schroders' compensation may vary from account to account.

-34-

Schroders has adopted certain compliance procedures that are designed
to address these, and other, types of conflicts. However, there is no guarantee
that such procedures will detect each and every situation where a conflict
arises.

Compensation. Schroders' methodology for measuring and rewarding the
contribution made by portfolio managers combines quantitative measures with
qualitative measures. The Funds' portfolio managers are compensated for their
services to the Funds and to other accounts they manage in a combination of base
salary and annual discretionary bonus, as well as the standard retirement,
health and welfare benefits available to all Schroders employees. Base salary of
Schroders employees is determined by reference to the level of responsibility
inherent in the role and the experience of the incumbent, is benchmarked
annually against market data to ensure competitive salaries, and is paid in
cash. The portfolio managers' base salary is fixed and is subject to an annual
review and will increase if market movements make this necessary or if there has
been an increase in responsibilities.

Each portfolio manager's bonus is based in part on performance.
Discretionary bonuses for portfolio managers are determined by a number of
factors. At a macro level the total amount available to spend is a function of
the compensation to revenue ratio achieved by Schroders globally. Schroders then
assesses the performance of the division and of a management team to determine
the share of the aggregate bonus pool that is spent in each area. This focus on
"team" maintains consistency and minimizes internal competition that may be
detrimental to the interests of Schroders' clients. For each team, Schroders
assesses the performance of their funds relative to competitors and to the
relevant benchmarks over one and three year periods, the level of funds under
management and the level of performance fees generated. For the purpose of
determining Jenny Jones' bonus, the relevant benchmark for performance
comparison is Russell 2500. For the purpose of determining James Gotto, Waj
Hashmi, Robert Davy and Allan Conway's bonuses, the relevant benchmark for
performance comparison is MSCI Emerging Markets Index (Net Div). Performance is
evaluated for each quarter, year and since inception of the Fund. The portfolio
managers' compensation for other accounts they manage is not based upon account
performance.

Schroders also reviews "softer" factors such as leadership,
innovation, contribution to other parts of the business an adherence to
corporate values of excellence, integrity, teamwork, passion and innovation. An
employee's bonus is paid in a combination of cash and Schroders plc stock, as
determined by Schroders. This stock vests over a period of three years and
ensures that the interests of the employee are aligned with those of
shareholders of Schroders.

Ownership of Securities. As of the date hereof, no shares of the Funds
are outstanding.

PERFORMANCE INFORMATION OF CERTAIN OTHER ACCOUNTS MANAGED BY SCHRODERS

The following table sets forth historical performance information for
the institutional investment accounts managed by Schroders that have investment
objectives, policies, strategies, and investment restrictions that are
substantially similar to those of Schroder U.S. Small and Mid Cap Opportunities
Fund (the "Schroder Composite"). The Schroder Composite includes both a private
investment account and a pooled investment vehicle managed by Schroders that are
not registered under the Investment Company Act and are offered principally
outside the United States ("unregistered funds").

-35-

The composite data is provided to illustrate the past performance of
Schroders in managing substantially similar accounts as measured against a
specified market index and does not represent the performance of the Schroder
U.S. Small and Mid Cap Opportunities Fund. The information shown below does not
represent the Fund's performance, and should not be considered a prediction of
the future performance of the Fund. The Fund is recently organized and does not
yet have historical investment performance information. THE PERFORMANCE
INFORMATION SHOWN FOR THE SCHRODER COMPOSITE IS FOR A SHORT PERIOD OF TIME AND
SHOULD NOT BE VIEWED AS INDICATIVE OF LONG-TERM PERFORMANCE OF SCHRODERS WITH
RESPECT TO THE INCLUDED ACCOUNTS.

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

The Schroder Composite assumes the reinvestment of all earnings. No
leverage has been used in the accounts included in the Schroder Composite.

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

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

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

-36-

Company Act or Subchapter M of the Internal Revenue Code. As a result, the
investment portfolios of the Fund, if it had been in operation during the
periods shown, would likely have differed to some extent from those of the
institutional private accounts and the unregistered funds.

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

SCHRODER U.S. SMALL AND MID CAP OPPORTUNITIES FUND - PRIOR PERFORMANCE OF
SIMILAR ACCOUNTS

The table below shows the average annual total returns for the
Schroder Composite with respect to the Schroder U.S. Small and Mid Cap
Opportunities Fund (in one column, restated to reflect reduction of the highest
advisory fee paid by any account in the Schroder Composite; in another, restated
to reflect deduction of Net Expenses for Investor Shares of the Fund; and in the
other, restated to reflect deduction of Net Expenses for Advisor Shares of the
Fund) and a broad-based securities market index as of December 31, 2005.

Schroder
Schroder Composite Schroder Composite Composite Net of
Net of Highest Net of Net Expenses Net Expenses for
Advisory Fee Paid for Investor Shares of Advisor Shares of
by Any Account in the Fund (1.40% per the Fund (1.65%
Year Composite(1) annum) (1) per annum)(1) Russell 2500 Index (2)
--------- ------------------ ---------------------- ----------------- ----------------------

1 year 12.73% 12.84% 12.56% 8.09%
Since
Inception 12.73% 12.84% 12.56% 8.09%

(1) The Schroder Composite inception date is December 31, 2004.

(2) Russell 2500 Index measures the performance of the 2,500 smallest companies
in the Russell 3000 Index, which represents approximately 16% of the total
market capitalization of the Russell 3000 Index. As of the latest
reconstitution, the average market capitalization was approximately $992.9
million; the median market capitalization was approximately $640.0 million. The
largest company in the index had an approximate market capitalization of $4.0
billion. The Index does not incur expenses or reflect any deduction for taxes
and cannot be purchased directly by investors.

-37-

MANAGEMENT CONTRACT

Management Contract. Under a Management Contract between the Trust, on
behalf of the Funds, and Schroders, Schroders, at its expense, provides each
Fund with (i) investment advisory services and advises and assists the officers
of the Trust in taking such steps as are necessary or appropriate to carry out
the decisions of its Trustees regarding the conduct of business of the Trust and
the Funds, and (ii) management and administrative services necessary for the
operation of each of the Funds, including preparation of shareholder reports and
communications, regulatory compliance, such as reports to and filings with the
SEC and state securities commissions, and general supervision of the operation
of each of the Funds, including coordination of the services performed by each
Fund's sub-administrator, transfer agent, custodian, independent auditors, legal
counsel and others.

Under the Management Contract, Schroders is required to continuously
furnish each of the Funds an investment program consistent with the investment
objective and policies of each Fund, and to determine, for each Fund, what
securities shall be purchased, what securities shall be held or sold, and what
portion of each Fund's assets shall be held uninvested, subject always to the
provisions of the Trust's Declaration of Trust and by-laws, and of the
Investment Company Act, and to each Fund's investment objective, policies, and
restrictions, and subject further to such policies and instructions as the
Trustees may from time to time establish.

As compensation for services provided to each Fund pursuant to the
Management Contract, Schroders is entitled to receive from the Trust a fee,
computed and paid quarterly, at the following annual rates (based on each Fund's
average daily net assets): Schroder Emerging Market Equity Fund - 1.00%; and
Schroder U.S. Small and Mid Cap Opportunities Fund - 1.00%. In order to limit
the expenses of each Fund's Investor Shares and Advisor Shares, Schroders has
separately agreed to reduce its compensation and, if necessary, to pay certain
other of each Fund's expenses until March 31, 2007 to the extent that the Total
Annual Operating Expenses of a Fund allocable to its Investor Shares exceed the
following annual rates (based on the average daily net assets attributable to
the Fund's Investor Shares): Schroder Emerging Market Equity Fund - 1.75%; and
Schroder U.S. Small and Mid Cap Opportunities Fund - 1.40%, and to the extent
that the Total Annual Operating Expenses of the Fund allocable to its Advisor
Shares exceed the following annual rates (based on the average daily net assets
allocable to a Fund's Advisor Shares): Schroder Emerging Market Equity Fund -
2.00%; and Schroder U.S. Small and Mid Cap Opportunities Fund - 1.65%. Schroders
makes available to the Trust, without additional expense to the Trust, the
services of such of its directors, officers, and employees as may duly be
elected Trustees or officers of the Trust, subject to their individual consent
to serve and to any limitations imposed by law. Schroders pays the compensation
and expenses of officers and executive employees of the Trust. Schroders also
provides investment advisory research and statistical facilities and all
clerical services relating to such research, statistical, and investment work.
Schroders pays the Trust's office rent.

-38-

Schroders; the cost of preparing and distributing reports and notices to
shareholders; public and investor relations expenses; and fees and disbursements
of custodians of each Fund's assets. The Trust is also responsible for its
expenses incurred in connection with litigation, proceedings, and claims and the
legal obligation it may have to indemnify its officers and Trustees with respect
thereto.

The Management Contract provides that Schroders shall not be subject
to any liability to the Trust or to any shareholder for any act or omission in
connection with rendering services to the Trust in the absence of willful
misfeasance, bad faith, gross negligence, or reckless disregard of its duties.

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

Subadvisory Agreement. On December 6, 2005, the Trustees of the Trust
approved an arrangement whereby Schroders would retain SIMNA Ltd. to serve as
sub-adviser to Schroder Emerging Market Equity Fund. In connection therewith,
the Trustees approved an Investment Subadvisory Agreement between Schroders,
SIMNA Ltd. and the Trust, on behalf of Schroder Emerging Market Equity Fund (the
"Subadvisory Agreement"). This agreement went into effect on March 31, 2006.

Under the Subadvisory Agreement, subject to the oversight of the
Trustees and the direction and control of Schroders, SIMNA Ltd. is required to
provide on behalf of Schroder Emerging Market Equity Fund the portfolio
management services required of Schroders under the Fund's Management Contract.
Accordingly, SIMNA Ltd. will be required to regularly provide Schroder Emerging
Market Equity Fund with investment research, advice, and supervision and furnish
continuously investment programs consistent with the investment objectives and
policies of the Fund, and determine, what securities shall be purchased, what
securities shall be held or sold, and what portion of the Fund's assets shall be
held uninvested, subject always to the provisions of the Trust's Declaration of
Trust and By-laws, and of the Investment Company Act, and to the Fund's
investment objectives, policies, and restrictions, and subject further to such
policies and instructions as the Trustees may from time to time establish.

For the services to be rendered by SIMNA Ltd., Schroders (and not the
Trust or the Fund) will pay to SIMNA Ltd. a monthly fee in an amount equal to
fifty percent (50%) of all fees actually paid by the Fund to Schroders for such
month under the Management Contract, provided that SIMNA Ltd.'s fee for any
period will be reduced such that SIMNA Ltd. will bear fifty percent (50%) of any
voluntary fee waiver observed or expense reimbursement borne by Schroders with
respect to the Fund for such period.

The Subadvisory Agreement provides that SIMNA Ltd. shall not be
subject to any liability to the Trust or Schroders for any mistake of judgment
or in any event whatsoever in connection with rendering service to the Trust in
the absence of willful misfeasance, bad faith, gross negligence, or reckless
disregard of its duties.

-39-

The Subadvisory Agreement relating to Schroder Emerging Market Equity
Fund may be terminated with respect to the Fund without penalty (i) by vote of
the Trustees or by vote of a majority of the outstanding voting securities (as
defined in the Investment Company Act) of the Fund on 60 days' written notice to
SIMNA Ltd., (ii) by Schroders on 60 days' written notice to SIMNA Ltd. or (iii)
by SIMNA Ltd. on 60 days' written notice to Schroders and the Trust. The
Subadvisory Agreement will also terminate without payment of any penalty in the
event of its assignment. The Subadvisory Agreement may be amended only by
written agreement of all parties thereto and otherwise in accordance with the
Investment Company Act.

ADMINISTRATIVE SERVICES

The Trust, on behalf of the Funds, has entered into an administration
and accounting agreement with SEI Investments Global Fund Services ("SEI").
Under that agreement, the Trust, together with Schroder Capital Funds
(Delaware), another trust comprised of funds managed by Schroders, pays fees to
SEI based on the combined average daily net assets of all the funds of Schroder
Capital Funds (Delaware) and the Trust, according to the following annual rates:
0.115% of the first $600 million of such assets; 0.11% on the next $400 million
of such assets; 0.09% on the next $1 billion of such assets; and 0.07% on the
average daily net assets in excess of $2 billion. Each Fund pays its pro rata
portion of such expenses. The administration and accounting agreement is
terminable by either party at the end of a three year initial term or
thereafter, at any time, by either party upon six (6) months written notice to
the other party. The administration and accounting agreement is terminable by
either party in the case of a material breach.

DISTRIBUTOR

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

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

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

-40-

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

BROKERAGE ALLOCATION AND OTHER PRACTICES

SELECTION OF BROKERS. Schroders, in selecting brokers to effect
transactions on behalf of the Funds, seek to obtain the best execution
available.

ALLOCATION. Schroders may deem the purchase or sale of a security to
be in the best interests of a Fund as well as other clients of Schroders. In
such cases, Schroders may, but is under no obligation to, aggregate all such
transactions in order to obtain the most favorable price or lower brokerage
commissions and efficient execution. Orders are normally allocated on a pro rata
basis, except that in certain circumstances, such as the small size of an issue,
orders will be allocated among clients in a manner believed by Schroders to be
fair and equitable over time.

BROKERAGE AND RESEARCH SERVICES. Transactions on U.S. stock exchanges
and other agency transactions involve the payment by the Trust of negotiated
brokerage commissions. Schroders may determine to pay a particular broker
varying commissions according to such factors as the difficulty and size of the
transaction. Transactions in foreign securities often involve the payment of
fixed brokerage commissions, which are generally higher than those in the United
States, and therefore certain portfolio transaction costs may be higher than the
costs for similar transactions executed on U.S. securities exchanges. There is
generally no stated commission in the case of securities traded in the
over-the-counter markets, but the price paid by a Fund usually includes an
undisclosed dealer commission or mark-up. In underwritten offerings, the price
paid by the Trust includes a disclosed, fixed commission or discount retained by
the underwriter or dealer.

Schroders places all orders for the purchase and sale of portfolio
securities and buys and sells securities through a substantial number of brokers
and dealers. In so doing, it uses its best efforts to obtain the best execution
available. In seeking the best price and execution, Schroders considers all
factors it deems relevant, including price, the size of the transaction, the
nature of the market for the security, the amount of the commission, the timing
of the transaction (taking into account market prices and trends), the
reputation, experience, and financial stability of the broker-dealer involved,
and the quality of service rendered by the broker-dealer in other transactions.

It has for many years been a common practice in the investment
advisory business for advisers of investment companies and other institutional
investors to receive research, statistical, and quotation services from several
broker-dealers that execute portfolio transactions for the clients of such
advisers. Consistent with this practice, Schroders receives research,
statistical, and quotation services from many broker-dealers with which it
places the Fund's portfolio transactions. These services, which in some

-41-

cases may also be purchased for cash, include such matters as general economic
and security market reviews, industry and company reviews, evaluations of
securities, and recommendations as to the purchase and sale of securities. Some
of these services are of value to Schroders and its affiliates in advising
various of their clients (including the Trust), although not all of these
services are necessarily useful and of value in managing each of the Funds. The
investment advisory fee paid by the Funds is not reduced because Schroders and
its affiliates receive such services.

As permitted by Section 28(e) of the Securities Exchange Act of 1934,
as amended (the "Securities Exchange Act"), and by the Management Contract,
Schroders may cause the Funds to pay a broker that provides brokerage and
research services to Schroders an amount of disclosed commission for effecting a
securities transaction for a Fund in excess of the commission which another
broker would have charged for effecting that transaction. Schroders' authority
to cause a Fund to pay any such greater commissions is also subject to such
policies as the Trustees may adopt from time to time.

SIMNA Ltd., in its capacity as subadviser to Schroder Emerging Market
Equity Fund, observes substantially the same allocation and brokerage and
research policies and practices as those observed by Schroders described above.

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

DETERMINATION OF NET ASSET VALUE

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

Securities for which market quotations are readily available are
valued at those quotations. Securities for which current market quotations are
not readily available are valued at fair value pursuant to procedures
established by the Board of Trustees, which are summarized below.

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

-42-

Reliable market quotations are not considered to be readily available
for most long-term bonds. Such securities are valued at fair value, generally on
the basis of valuations furnished by pricing services, which determine
valuations for normal, institutional-size trading units of such securities using
methods based on market transactions for comparable securities and various
relationships between securities that are generally recognized by institutional
traders. Below investment grade debt instruments ("high yield debt") and
emerging markets debt instruments will generally be valued at prices furnished
by pricing services based on the mean of bid and asked prices supplied by
brokers or dealers, although, if the bid-asked spread exceeds five points, that
security will typically be valued at the bid price. Short-term fixed income
securities with remaining maturities of 60 days or less are valued at amortized
cost, unless Schroders, believes another valuation is more appropriate.

Options and futures contracts traded on a securities exchange or board
of trade shall be valued at the last reported sales price or, in the absence of
a sale, at the closing mid-market price on the principal exchange where they are
traded. Options not traded on a securities exchange or board of trade for which
over-the-counter market quotations are readily available shall be valued at the
most recently reported mid-market price.

All other securities and other property are valued at fair value based
on procedures established by the Board of Trustees.

All assets and liabilities of a Fund denominated in foreign currencies
are translated into U.S. dollars as of the close of trading of the New York
Stock Exchange (normally 4:00 p.m., Eastern time) based on the mean between the
last quoted bid and ask price of such currencies against the U.S. dollar.

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

Generally, trading in certain securities (such as foreign securities)
is substantially completed each day at various times prior to the close of the
New York Stock Exchange. The values of these securities used in determining the
net asset value of a Fund's shares are computed as of such times. Also, because
of the amount of time required to collect and process trading information as to
large numbers of securities issues, the values of certain securities (such as
convertible bonds and U.S. Government securities) are determined based on market
quotations collected earlier in the day. Occasionally, events affecting the
value of such securities may occur between such times and the close of the
Exchange. If events materially affecting the value of such securities occur
during such period, then the Fair Value Committee of the Trust may consider
whether it is appropriate to value these securities at their fair value.

-43-

Schroder Emerging Market Equity Fund uses FT-Interactive Data ("FT")
as a third party fair valuation vendor. FT provides a fair value for foreign
securities held by the Fund based on certain factors and methodologies applied
by FT in the event that there is movement in the U.S. market that exceeds a
specific threshold established by the Fair Value Committee, designated by the
Fund's Trustees, in consultation with the Trustees. Such methodologies generally
involve tracking valuation correlations between the U.S. market and each
non-U.S. security. In consultation with the Trustees, the Fair Value Committee
also determines a "confidence interval" which will be used, when the threshold
is exceeded, to determine the level of correlation between the value of a
foreign security and movements in the U.S. market before a particular security
will be fair valued. In the event that the threshold established by the Fair
Value Committee is exceeded on a specific day, the Funds shall value non-U.S.
securities in its portfolio that exceed the applicable confidence interval based
upon the fair values provided by FT.

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

REDEMPTION OF SHARES

Each Fund imposes a 2.00% redemption fee on shares redeemed (including
in connection with an exchange) two months or less from their date of purchase.
The fee is not a sales charge (load); it is paid directly to the applicable
Fund.

The redemption fee may be waived, in Schroders' sole discretion, for
certain categories of redemptions that do not raise short-term trading concerns.
These categories include but are not limited to shares redeemed through
designated systematic withdrawal plans. The redemption fee does apply to IRAs,
and may also apply to shares held in employer-sponsored retirement accounts
(such as 401(k), 403(b), Keogh, profit sharing, SIMPLE IRA, SEP-IRA and money
purchase pension accounts) and shares in retirement plans held in broker omnibus
accounts.

ARRANGEMENTS PERMITTING FREQUENT PURCHASES AND REDEMPTIONS OF FUND SHARES

The Funds have no arrangements with any person to permit frequent
purchases and redemptions of the Fund shares.

TAXES

-44-

administrative action, possibly with retroactive effect. The following
discussion is only a summary of some of the important U.S. federal tax
considerations generally applicable to investments in the Funds. It does not
address special tax rules applicable to certain classes of investors, such as,
among others, IRAs and other retirement plans, tax-exempt entities, foreign
investors, insurance companies, financial institutions and investors making
in-kind contributions to the Funds. You should consult your tax advisor for more
information about your own tax situation, including possible other federal,
state, local, and, where applicable, foreign tax consequences of investing in
the Funds.

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

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

In order to qualify as a RIC a Fund must, among other things, (a)
derive at least 90% of its gross income from dividends, interest, payments with
respect to securities loans, gains from the sale or other disposition of stock,
securities, or foreign currencies, and other income (including gains from
options, futures, or forward contracts) derived with respect to its business of
investing in such stock, securities, or currencies; (b) diversify its holdings
so that, at the close of each quarter of its taxable year, (i) at least 50% of
the value of its total assets consists of cash, cash items, U.S. Government
securities, securities of other RICs and other securities limited generally with
respect to any one issuer to not more than 5% of the value of the total assets
of the Fund and not more than 10% of the outstanding voting securities of such
issuer, and (ii) not more than 25% of the value of its assets is invested in (x)
the securities of any one issuer (other than the U.S. Government or other RICs)
or of two or more issuers which the Fund controls and which are engaged in the
same, similar or related trades and businesses or (y) the securities of one or
more qualified publicly traded partnerships (as defined below); and (c)
distribute with respect to each taxable year at least 90% of the sum of its
investment company taxable income (as that term is defined in the Code without
regard to the deduction for dividends paid - generally, taxable ordinary income
and the excess, if any, of net short-term capital gains over net long-term
capital losses) and net tax-exempt interest income, for such year. Each Fund
intends to make such distributions.

In general, for purposes of the 90% gross income requirement described
in paragraph (a) above, income derived from a partnership will be treated as
qualifying income only to the extent such income is attributable to items of
income of the partnership which would be qualifying income if realized by the
regulated investment company. However, the American Jobs Creation Act of 2004
(the "2004 Act"), provides that for taxable years of a regulated investment
company beginning after October 22, 2004, 100% of the net income derived from an
interest in a "qualified publicly traded partnership" (defined as a partnership
(i) interests in which are traded on an established securities market or readily
tradable on a secondary market or the substantial equivalent thereof and (ii)
that derives less than 90% of its income from the qualifying income described in
paragraph (a) above) will be treated as qualifying income. In addition, although
in general the passive loss rules of the Code do not apply to regulated
investment companies, such rules do apply to a regulated investment company with
respect to items attributable to an interest in a qualified publicly traded
partnership. Finally, for purposes of paragraph (b) above, the term "outstanding
voting securities of such issuer" will include the equity securities of a
qualified publicly traded partnership.

-45-

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

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

For taxable years beginning before January 1, 2009, "qualified
dividend income" received by an individual will be taxed at the rates applicable
to long-term capital gain. In order for some portion of the dividends received
by a Fund shareholder to be qualified dividend income, the Fund must meet
holding period and other requirements with respect to some portion of the
dividend-paying stocks in its portfolio and the shareholder must meet holding
period and other requirements with respect to the Fund's shares. A dividend will
not be treated as qualified dividend income (at either the Fund or shareholder
level) (1) if the dividend is received with respect to any share of stock held
for fewer than 61 days during the 121-day period beginning on the date which is
60 days before the date on which such share becomes ex-dividend with respect to
such dividend (or, on the case of certain preferred stock, 91 days during the
181-day period beginning 90 days before such date), (2) to the extent that the
recipient is under an obligation (whether pursuant to a short sale or otherwise)
to make related payments with respect to positions in substantially similar or
related property, (3) if the recipient elects to have the dividend income
treated as investment interest, or (4) if the dividend is received from a
foreign corporation that is (a) not eligible for the benefits of a comprehensive
income tax treaty with the United States (with the exception of dividends paid
on stock of such a foreign corporation readily tradable on an established
security market in the United States) or (b) treated as a passive foreign
investment company.

In general, distributions of investment income designated by a Fund as
derived from qualified dividend income will be treated as qualified dividend
income by a shareholder taxed as an individual provided the shareholder meets
the holding period and other requirements described above with respect to such
Fund's shares. In any event, if the aggregate qualified dividends received by a
Fund during any taxable year are 95% or more of its gross income, then 100% of
the Fund's dividends (other than property designated capital gain dividends)
will be eligible to be treated as qualified dividend income. For this

-46-

purpose, the only gain included in the term "gross income" is the excess of net
short-term capital gain over net long-term capital loss.

Long-term capital gain rates applicable to individuals have been
temporarily reduced - in general, to 15%, with lower rates applying to taxpayers
in the 10% and 15% rate brackets - for taxable years beginning before January 1,
2009.

TRANSACTIONS IN FUND SHARES. The sale, exchange or redemption of Fund
shares may give rise to a gain or loss. In general, any gain or loss realized
upon such a taxable disposition of shares will be treated as long-term capital
gain or loss if the shares have been held for more than 12 months. Otherwise the
gain or loss on the sale, exchange or redemption of Fund shares will be treated
as short-term capital gain or loss. However, if a shareholder sells shares at a
loss within six months of purchase, any loss will be disallowed for federal
income tax purposes to the extent of any exempt-interest dividends received on
such shares. In addition, any loss (not already disallowed as provided in the
preceding sentence) realized upon a taxable disposition of shares held for six
months or less will be treated as long-term, rather than short-term, to the
extent of any amounts treated as distributions from a Fund of long-term capital
gain with respect to the shares during the six-month period. All or a portion of
any loss realized upon a taxable disposition of Fund shares will be disallowed
if other shares of the same Fund are purchased within 30 days before or after
the disposition. In such a case, the basis of the newly purchased shares will be
adjusted to reflect the disallowed loss.

FOREIGN INVESTMENTS. A Fund's transactions in foreign currencies,
foreign currency-denominated debt securities and certain foreign currency
options, futures contracts and forward contracts (and similar instruments) may
give rise to ordinary income or loss to the extent such income or loss results
from fluctuations of the foreign currency concerned.

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

If more than 50% of a Fund's assets at year end consists of the
securities of foreign corporations, the Fund may elect to permit shareholders to
claim a credit or deduction on their income tax returns for their pro rata
portion of qualified taxes paid by the Fund to foreign countries in respect of
foreign securities the Fund has held for at least the minimum period specified
in the Code. In such a case, shareholders will include in gross income from
foreign sources their pro rata shares of such taxes. It is

-47-

anticipated that shareholders of Schroder Emerging Market Equity Fund generally
will be entitled to claim a credit or deduction with respect to foreign taxes,
while shareholders of Schroder U.S. Small and Mid Cap Opportunities Fund
generally will not. A shareholder's ability to claim a foreign tax credit or
deduction in respect of foreign taxes paid by a Fund may be subject to certain
limitations imposed by the Code, as a result of which a shareholder may not get
a full credit or deduction for the amount of such taxes. In particular,
shareholders must hold their Fund shares (without protection from risk of loss)
on the ex-dividend date and for at least 15 additional days during the 30-day
period surrounding the ex-dividend date to be eligible to claim a foreign tax
credit with respect to a given dividend. Shareholders who do not itemize on
their federal income tax returns may claim a credit (but no deduction) for such
foreign taxes.

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

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

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

NON-U.S. SHAREHOLDERS. In general, dividends (other than capital gain
dividends) paid by a Fund to a shareholder that is not a "U.S. person" within
the meaning of the Code (a "foreign person") are subject to withholding of U.S.
federal income tax at a rate of 30% (or lower applicable treaty rate) even if
they are funded by income or gains (such as portfolio interest, short-term
capital gains, or foreign-source dividend and interest income) that, if paid to
a foreign person directly, would not be subject to withholding. However, under
the 2004 Act, effective for taxable years of a fund beginning after December 31,
2004 and before January 1, 2008, a Fund will not be required to withhold any
amounts (i) with respect to distributions (other than distributions to a foreign
person (w) that has not provided a satisfactory statement that the beneficial
owner is not a U.S. person, (x) to the extent that the dividend is attributable
to certain interest on an obligation if the foreign person is the issuer or is a
10% shareholder of the issuer, (y) that is within certain foreign countries that
have inadequate information exchange with

-48-

the United States, or (z) to the extent the dividend is attributable to interest
paid by a person that is a related person of the foreign person and the foreign
person is a controlled foreign corporation) from U.S.-source interest income
that would not be subject to U.S. federal income tax if earned directly by an
individual foreign person, to the extent such distributions are properly
designated by a Fund (an "interest-related dividend"), and (ii) with respect to
distributions (other than distributions to an individual foreign person who is
present in the United States for a period or periods aggregating 183 days or
more during the year of the distribution) of net short-term capital gains in
excess of net long-term capital losses, to the extent such distributions are
properly designated by a Fund (a "short-term capital gain dividend"). A Fund may
opt not to designate dividends as interest-related dividends or short-term
capital gain dividends to the full extent permitted by the Code. In addition, as
indicated above, capital gain dividends will not be subject to withholding of
U.S. federal income tax.

If a beneficial holder who is a foreign person has a trade or business
in the United States, and the dividends are effectively connected with the
conduct by the beneficial holder of a trade or business in the United States,
the dividend will be subject to U.S. federal net income taxation at regular
income tax rates.

The 2004 Act modifies the tax treatment of distributions from a Fund
that are paid to a foreign person and are attributable to gain from "U.S. real
property interests" ("USRPIs"), which the Code defines to include direct
holdings of U.S. real property and interests (other than solely as a creditor)
in "U.S. real property holding corporations" such as REITs. The Code deems any
corporation that holds (or held during the previous five-year period) USRPIs
with a fair market value equal to 50% or more of the fair market value of the
corporation's U.S. and foreign real property assets and other assets used or
held for use in a trade or business to be a U.S. real property holding
corporation; however, if any class of stock of a corporation is traded on an
established securities market, stock of such class shall be treated as a USRPI
only in the case of a person who holds more than 5% of such class of stock at
any time during the previous five-year period. Under the 2004 Act, which is
generally effective for taxable years of RICs beginning after December 31, 2004
and which applies to dividends paid or deemed paid on or before December 31,
2007, distributions to foreign persons attributable to gains from the sale or
exchange of USRPIs (a "FIRPTA Distribution") will give rise to an obligation for
those foreign persons to file a U.S. tax return and pay tax, and may well be
subject to withholding under future regulations.

Under U.S. federal tax law, a beneficial holder of shares who is a
foreign person is not, in general, subject to U.S. federal income tax on gains
(and is not allowed a deduction for losses) realized on the sale of shares of a
Fund or on capital gain dividends unless (i) such gain or capital gain dividend
is effectively connected with the conduct of a trade or business carried on by
such holder within the United States, (ii) in the case of an individual holder,
the holder is present in the United States for a period or periods aggregating
183 days or more during the year of the sale or capital gain dividend and
certain other conditions are met, or (iii) the shares constitute USRPIs or
(effective for taxable years of a Fund beginning after December 31, 2004) the
capital gain dividends are paid or deemed paid on or before December 31, 2007
and are attributable to gains from the sale or exchange of USRPIs.

PRINCIPAL HOLDERS OF SECURITIES

As of the date hereof, no shares of the Funds are outstanding.

-49-

CUSTODIAN

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

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

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

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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

CODE OF ETHICS

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

PROXY VOTING POLICIES AND PROCEDURES

The Trust has delegated authority and responsibility to vote any proxies
relating to voting securities held by the Funds to Schroders, which intends to
vote such proxies in accordance with its proxy voting policies and procedures. A
copy of Schroders' proxy voting policies and procedures is attached as Appendix
A to this SAI. Information regarding how Schroders voted proxies relating to
portfolio securities during the most recent 12-month period ended June 30 is
available (1) without charge, upon request, through the Schroders Funds' website
at www.schroderfunds.com; and (2) on the Securities and Exchange Commission's
website at www.sec.gov.

LEGAL COUNSEL

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

SHAREHOLDER LIABILITY

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

-50-

incurring financial loss on account of shareholder liability is limited to
circumstances in which a Fund would be unable to meet its obligations.

FINANCIAL STATEMENTS

As the Funds have not commenced operations, financial statements for the
Funds are unavailable.

-51-

APPENDIX A

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

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

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

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

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

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

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

(A) PROXY VOTING GENERAL PRINCIPLES

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

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

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

PROXY COMMITTEE

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

The procedure for evaluating proxy requests is as follows:

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

A-1

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

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

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

CONFLICTS

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

For example, conflicts of interest may arise when:

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

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

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

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

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

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

A-2

management (e.g., stock, option plans, retirement plans,
profit-sharing or other special remuneration plans). If the Team
determines that there is, or may be perceived to be, a conflict of
interest when voting a proxy, Schroders will address matters involving
such conflicts of interest as follows:

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

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

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

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

RECORD OF PROXY VOTING

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

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

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

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

Additional Reports and Disclosures for the Schroder Funds

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

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

A-3

o Name of the issuer of the security;

o Exchange ticker symbol;

o CUSIP number, if available;

o Shareholder meeting date;

o Brief summary of the matter voted upon;

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

o Whether the fund voted on the matter;

o How the fund voted; and

o Whether the fund voted with or against management.

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

July 30, 2003

A-4

SCHRODER SERIES TRUST

Schroder Enhanced Income Fund
Schroder Total Return Fixed Income Fund

FORM N-1A
PART B

STATEMENT OF ADDITIONAL INFORMATION

Part 2

May 15, 2006

TABLE OF CONTENTS

TRUST HISTORY............................................................. 1
FUND CLASSIFICATION....................................................... 1
CAPITALIZATION AND SHARE CLASSES.......................................... 1
ADDITIONAL INFORMATION CONCERNING THE FUNDS' PRINCIPAL INVESTMENT
STRATEGIES............................................................. 2
NON-PRINCIPAL INVESTMENTS, INVESTMENT PRACTICES AND RISKS................. 21
INVESTMENT RESTRICTIONS................................................... 23
DISCLOSURE OF PORTFOLIO HOLDINGS.......................................... 25
MANAGEMENT OF THE TRUST................................................... 26
SCHRODERS AND ITS AFFILIATES.............................................. 33
PERFORMANCE INFORMATION OF CERTAIN OTHER ACCOUNTS MANAGED BY SCHRODERS.... 33
PORTFOLIO MANAGERS........................................................ 37
MANAGEMENT CONTRACT....................................................... 40
ADMINISTRATIVE SERVICES................................................... 41
DISTRIBUTOR............................................................... 42
BROKERAGE ALLOCATION AND OTHER PRACTICES.................................. 42
DETERMINATION OF NET ASSET VALUE.......................................... 43
ARRANGEMENTS PERMITTING FREQUENT PURCHASES AND REDEMPTIONS OF FUND
SHARES................................................................. 44
TAXES..................................................................... 44
PRINCIPAL HOLDERS OF SECURITIES........................................... 48
CUSTODIAN................................................................. 48
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT.............................. 49
INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS................................. 49
CODE OF ETHICS............................................................ 49
PROXY VOTING POLICIES AND PROCEDURES...................................... 49
LEGAL COUNSEL............................................................. 49
SHAREHOLDER LIABILITY..................................................... 49
FINANCIAL STATEMENTS...................................................... 49
APPENDIX A HOLDERS OF OUTSTANDING SHARES................................ A-1
APPENDIX B FIXED INCOME AND COMMERCIAL PAPER RATINGS.................... B-1
APPENDIX C SCHRODER INVESTMENT MANAGEMENT NORTH AMERICA POLICY
RELATING TO IDENTIFYING AND ACTING UPON CONFLICTS OF
INTEREST IN CONNECTION WITH ITS PROXY VOTING OBLIGATIONS..... C-1

SCHRODER ENHANCED INCOME FUND
SCHRODER TOTAL RETURN FIXED INCOME FUND

STATEMENT OF ADDITIONAL INFORMATION

TRUST HISTORY

Schroder Series Trust (the "Trust") is a Massachusetts business trust organized
under the laws of The Commonwealth of Massachusetts on May 6, 1993. The Trust's
Agreement and Declaration of Trust (as amended, the "Declaration of Trust"),
which is governed by Massachusetts law, is on file with the Secretary of State
of The Commonwealth of Massachusetts. Schroder Enhanced Income Fund and Schroder
Total Return Fixed Income Fund (each, a "Fund," and collectively, the "Funds")
are series of the Trust. The Trust currently also comprises four other publicly
offered series, Schroder Emerging Market Equity Fund, Schroder U.S. Small and
Mid Cap Opportunities Fund, Schroder Municipal Bond Fund, and Schroder
Short-Term Municipal Bond Fund. Schroder Investment Management North America
Inc. ("Schroders") serves as investment adviser to each Fund.

FUND CLASSIFICATION

Each Fund is a diversified, open-end, management investment company registered
under the Investment Company Act of 1940, as amended (the "Investment Company
Act"). This means that with respect to 75% of a Fund's total assets, (i) that
Fund may not invest in securities of any issuer if, immediately after such
investment, more than 5% of the total assets of such Fund (taken at current
value) would be invested in the securities of that issuer (this limitation does
not apply to investments in U.S. Government securities or securities of other
investment companies) and (ii) the Fund may not invest in a security if, as a
result of such investment, it would hold more than 10% (taken at the time of
such investment) of the outstanding voting securities of any one issuer (this
limitation does not apply to investments in U.S. Government securities or
securities of other investment companies). Neither Fund is subject to this
limitation with respect to the remaining 25% of its total assets.

CAPITALIZATION AND SHARE CLASSES

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

ADDITIONAL INFORMATION CONCERNING THE FUNDS' PRINCIPAL INVESTMENT STRATEGIES

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

FIXED INCOME SECURITIES. In periods of declining interest rates, the yield
(income from portfolio investments) of a Fund may tend to be higher than
prevailing market rates, and in periods of rising interest rates, the yield of a
Fund may tend to be lower. In addition, when interest rates are falling, the
inflow of net new money to a Fund will likely be invested in portfolio
instruments producing lower yields than the balance of the Fund's portfolio,
thereby reducing the yield of the Fund. In periods of rising interest rates, the
opposite can be true. The net asset value of a Fund can generally be expected to
change as general levels of interest rates fluctuate. The values of fixed income
securities in a Fund's portfolio generally vary inversely with changes in
interest rates. Prices of fixed income securities with longer effective
maturities are more sensitive to interest rate changes than those with shorter
effective maturities. The Schroder Total Return Fixed Income Fund may purchase
fixed income securities issued by companies of any market capitalization,
including small companies. Such investments may involve greater risk than is
usually associated with larger, more established companies.

LOWER-RATED SECURITIES. The Schroder Total Return Fixed Income Fund may invest
up to 20% of its total assets in lower-rated fixed-income securities (commonly
known as "junk bonds"). The Fund may invest in securities that are in default,
and which offer little or no prospect for the payment of the full amount of
unpaid principal and interest, although normally the Fund will not invest in
securities unless a nationally recognized statistical rating organization (for
example, Moody's Investors Service, Inc., Standard & Poor's Rating Service, or
Fitch Investors Service, Inc.) has rated the securities CC- (or the equivalent)
or better, or the Fund's adviser has determined the securities to be of
comparable quality. The lower ratings of certain securities held by the Fund
reflect a greater possibility that adverse changes in the financial condition of
the issuer or in general economic conditions, or both, or an unanticipated rise
in interest rates, may impair the ability of the issuer to make payments of
interest and principal. The inability (or perceived inability) of issuers to
make timely payment of interest and principal would likely make the values of
securities held by the Fund more volatile and could limit the Fund's ability to
sell its securities at prices approximating the values the Fund had placed on
such securities. In the absence of a liquid trading market for securities held
by it, the Fund at times may be unable to establish the fair value of such
securities.

Securities ratings are based largely on the issuer's historical financial
condition and the rating agencies' analysis at the time of rating. Consequently,
the rating assigned to any particular security is not necessarily a reflection
of the issuer's current financial condition, which may be better or worse than
the rating would indicate. In addition, the rating assigned to a security by
Moody's Investors Service, Inc. or Standard & Poor's Rating Service (or by any
other nationally recognized securities rating agency) does not reflect an
assessment of the volatility of the security's market value or the liquidity of
an investment in the security.

Like those of other fixed-income securities, the values of lower-rated
securities fluctuate in response to changes in interest rates. A decrease in
interest rates will generally result in an increase in the value of the Fund's
assets. Conversely, during periods of rising interest rates, the value of the
Fund's assets will generally decline. The values of lower-rated securities may
often be affected to a greater extent by changes in general economic conditions
and business conditions affecting the issuers of such securities and their
industries. Negative publicity or investor perceptions may also adversely affect
the values of lower-rated securities. Changes by nationally recognized
securities rating agencies in their ratings of any fixed-income security and
changes in the ability of an issuer to make payments of interest and principal
may also affect the value of these investments. Changes in the value of
portfolio securities generally will not affect income derived from these
securities, but will affect the Fund's net asset value.

The Fund will not necessarily dispose of a security when its rating is reduced
below its rating at the time of purchase. However, Schroders will monitor the
investment to determine whether its retention will assist in meeting the Fund's
investment objective.

Issuers of lower-rated securities are often highly leveraged, so that their
ability to service their debt obligations during an economic downturn or during
sustained periods of rising interest rates may be impaired. Such issuers may not
have more traditional methods of financing available to them and may be unable
to repay outstanding obligations at maturity by refinancing. The risk of loss
due to default in payment of interest or repayment of principal by such issuers
is significantly greater because such securities frequently are unsecured and
subordinated to the prior payment of senior indebtedness.

Certain securities held by the Fund may permit the issuer at its option to
"call," or redeem, its securities. If an issuer were to redeem securities held
by the Fund during a time of declining interest rates, the Fund may not be able
to reinvest the proceeds in securities providing the same investment return as
the securities redeemed.

The Fund may invest without limit in so-called "payment-in-kind" bonds.
Payment-in-kind bonds allow the issuer, at its option, to make current interest
payments on the bonds either in cash or in additional bonds. Because
payment-in-kind bonds do not pay current interest in cash, their value is
subject to greater fluctuation in response to changes in market interest rates
than bonds that pay interest currently. Payment-in-kind bonds allow an issuer to
avoid the need to generate cash to meet current interest payments. Accordingly,
such bonds may involve greater credit risks than bonds paying interest currently
in cash. The Fund is required to accrue interest income on such investments and
to distribute such amounts at least annually to shareholders even though such
bonds do not pay current interest in cash. Thus, it may be necessary at times
for the Fund to liquidate investments in order to satisfy its dividend
requirements.

To the extent the Fund invests in securities in the lower rating
categories, the achievement of the Fund's goals is more dependent on Schroders'
investment analysis than would be the case if the Fund were investing in
securities in the higher rating categories. This also may be true with respect
to tax-exempt securities, as the amount of information about the financial
condition of an issuer of tax-exempt securities may not be as extensive as that
which is made available by corporations whose securities are publicly traded.

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

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

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

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

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

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

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

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

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

Prepayments could cause early retirement of CMOs. CMOs are designed to reduce
the risk of prepayment for investors by issuing multiple classes of securities,
each having different maturities, interest rates and payment schedules, and with
the principal and interest on the underlying mortgages allocated among the
several classes in various ways. Payment of interest or principal on some
classes or series of CMOs may be subject to contingencies or some classes or
series may bear some or all of the risk of default on the underlying mortgages.
CMOs of different classes or series are generally retired in sequence as the
underlying mortgage loans in the mortgage pool are repaid. If enough mortgages
are repaid ahead of schedule, the classes or series of a CMO with the earliest
maturities generally will be retired prior to their maturities. Thus, the early
retirement of particular classes or series of a CMO would have the same effect
as the prepayment of mortgages underlying other mortgage-backed securities.
Conversely, slower than anticipated prepayments can extend the effective
maturities of CMOs, subjecting them to a greater risk of decline in market value
in response to rising interest rates than traditional debt securities, and,
therefore, potentially increasing their volatility.

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

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

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

The Fund's ability to receive payments of principal and interest and other
amounts in connection with loan participations held by it will depend primarily
on the financial condition of the borrower. The failure by the Fund to receive
scheduled interest or principal payments on a loan participation would adversely
affect the income of the Fund and would likely reduce the value of its assets,
which would be reflected in a reduction in the Fund's net asset value. Banks and
other lending institutions generally perform a credit analysis of the borrower
before originating a

loan or participating in a lending syndicate. In selecting the loan
participations in which the Fund will invest, however, Schroders will not rely
solely on that credit analysis, but will perform its own investment analysis of
the borrowers. Schroders' analysis may include consideration of the borrower's
financial strength and managerial experience, debt coverage, additional
borrowing requirements or debt maturity schedules, changing financial
conditions, and responsiveness to changes in business conditions and interest
rates. Schroders will be unable to access non-public information to which other
investors in syndicated loans may have access. Because loan participations in
which the Schroder Total Return Fixed Income Fund may invest are not generally
rated by independent credit rating agencies, a decision by the Fund to invest in
a particular loan participation will depend almost exclusively on Schroders',
and the original lending institution's, credit analysis of the borrower.
Investments in loan participations may be of any quality, including "distressed"
loans, and will be subject to the Fund's credit quality policy.

Loan participations may be structured in different forms, including novations,
assignments and participating interests. In a novation, the Fund assumes all of
the rights of a lending institution in a loan, including the right to receive
payments of principal and interest and other amounts directly from the borrower
and to enforce its rights as a lender directly against the borrower. The Fund
assumes the position of a co-lender with other syndicate members. As an
alternative, the Fund may purchase an assignment of a portion of a lender's
interest in a loan. In this case, the Fund may be required generally to rely
upon the assigning bank to demand payment and enforce its rights against the
borrower, but would otherwise be entitled to all of such bank's rights in the
loan. The Fund may also purchase a participating interest in a portion of the
rights of a lending institution in a loan. In such case, it will be entitled to
receive payments of principal, interest and premium, if any, but will not
generally be entitled to enforce its rights directly against the agent bank or
the borrower, and must rely for that purpose on the lending institution. The
Fund may also acquire a loan participation directly by acting as a member of the
original lending syndicate.

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

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

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

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

foreign currencies. The Fund's investment in such participations would involve
the risks of currency fluctuations described below with respect to investments
in the foreign securities.

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

In some instances, other accounts managed by Schroders may hold other securities
issued by borrowers whose floating rate loans may be held in the Schroder Total
Return Fixed Income Fund's portfolio. These other securities may include, for
example, debt securities that are subordinate to the floating rate loans held in
the Fund's portfolio, convertible debt or common or preferred equity securities.
In certain circumstances, such as if the credit quality of the issuer
deteriorates, the interests of holders of these other securities may conflict
with the interests of the holders of the issuer's floating rate loans. In such
cases, Schroders may owe conflicting fiduciary duties to the Fund and other
client accounts. Schroders will endeavor to carry out its obligations to all of
its clients to the fullest extent possible, recognizing that in some cases
certain clients may achieve a lower economic return, as a result of these
conflicting client interests, than if Schroders' client accounts collectively
held only a single category of the issuer's securities.

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

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

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

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

REPURCHASE AGREEMENTS. A repurchase agreement is a contract under which a Fund
acquires a security for a relatively short period (usually not more than one
week) subject to the obligation of the seller to repurchase and the Fund to
resell such security at a fixed time and price (representing the Fund's cost
plus interest). It is the Trust's present intention to enter into repurchase
agreements only with member banks of the Federal Reserve System and securities
dealers meeting certain criteria as to creditworthiness and financial condition,
and only with respect to obligations of the U.S. Government or its agencies or
instrumentalities or other high quality short-term debt obligations. A Fund will
only enter into repurchase agreements with entities that at the time have
outstanding unsecured indebtedness that would be eligible for purchase by the
Fund. Repurchase agreements may also be viewed as loans made by a Fund which are
collateralized by the securities subject to repurchase. Schroders will monitor
such transactions to ensure that the value of the underlying securities will be
at least equal at all times to the total amount of the repurchase obligation,
including the interest factor. If the seller defaults, a Fund could realize a
loss on the sale of the underlying security to the extent that the proceeds of
sale including accrued interest are less than the resale price provided in the
agreement including interest. In addition, if the seller should be involved in
bankruptcy or insolvency proceedings, a Fund may incur delay and costs in
selling the underlying security or may suffer a loss of principal and interest
if the Fund is treated as an unsecured creditor and required to return the
underlying collateral to the seller's estate. There is no limit on the amount of
a Fund's assets that may be invested in repurchase agreements. To the extent
that a Fund has invested a substantial portion of its assets in repurchase
agreements, the Fund's investment return on such assets, and potentially the
Fund's ability to achieve its investment objectives, will depend on the
counterparties' willingness and ability to perform their obligations under the
repurchase agreements.

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

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

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

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

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

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

Any profits from a closing purchase transaction in the case of a covered call
option may be offset by a decline in the value of the underlying security.
Conversely, because increases in the market price of a call option will
generally reflect increases in the market price of the underlying security, any
loss resulting from a closing purchase transaction relating to a covered call
option is likely to be offset in whole or in part by unrealized appreciation of
the underlying security owned by a Fund.

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

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

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

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

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

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

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

An exchange-listed option may be closed out only on an exchange which provides a
secondary market for an option of the same series. Although a Fund will enter
into an option position only if Schroders believes that a liquid secondary
market exists, there is no assurance that a liquid secondary market on an
exchange will exist for any particular option or at any particular time. If no
secondary market were to exist, it would be impossible to enter into a closing
transaction to close out an option position. As a result, a Fund may be forced
to continue to hold, or to purchase at a fixed price, a security on which it has
sold an option at a time when Schroders believes it is inadvisable to do so.

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

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

FUTURES CONTRACTS. To the extent permitted by the investment restrictions set
forth under "Investment Restrictions" below, by the investment policies
described in the Prospectuses and by applicable law, each Fund may buy and sell
futures contracts, options on futures contracts, and related instruments in
order to hedge against the effects of adverse market changes or to increase
current return. Depending upon the change in the value of the underlying
security or index when a Fund enters into or terminates a futures contract, the
Fund may realize a gain or loss.

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

Positions taken in the futures markets are not normally held to maturity, but
are instead liquidated through offsetting transactions that may result in a
profit or a loss. While futures positions taken by a Fund will usually be
liquidated in this manner, a Fund may instead make or take delivery of the
underlying securities whenever it appears economically advantageous to the Fund
to do so. A clearing corporation associated with the exchange on which futures
are traded assumes responsibility for such closing transactions and guarantees
that a Fund's sale and purchase obligations under closed-out positions will be
performed at the termination of the contract.

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

A Fund may also use futures to adjust the duration of its fixed income portfolio
and otherwise to manage (increase or decrease) the Fund's exposure to interest
rate risk.

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

Successful use by a Fund of futures contracts on securities is subject to
Schroders' ability to predict correctly movements in the direction of the
security's price and factors affecting markets for securities. For example, if a
Fund has hedged against the possibility of an increase in interest rates which
would adversely affect the market prices of securities held by it and the prices
of such securities increase instead, the Fund will lose part or all of the
benefit of the increased value of its securities which it has hedged because it
will have offsetting losses in its futures

positions. In addition, in such situations, if the Fund has insufficient cash,
it may have to sell securities to meet daily maintenance margin requirements.
The Fund may have to sell securities at a time when it may be disadvantageous to
do so.

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

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

Depending on the change in the value of the index between the time when a Fund
enters into and terminates an index futures transaction, a Fund may realize a
gain or loss. The following example illustrates generally the manner in which
index futures contracts operate. The Standard & Poor's 100 Stock Index is
composed of 100 selected common stocks, most of which are listed on the New York
Stock Exchange. The S&P 100 Index assigns relative weightings to the common
stocks included in the Index, and the Index fluctuates with changes in the
market values of those common stocks. In the case of the S&P 100 Index,
contracts are to buy or sell 100 units. Thus, if the value of the S&P 100 Index
were $180, one contract would be worth $18,000 (100 units x $180). The stock
index futures contract specifies that no delivery of the actual stocks making up
the index will take place. Instead, settlement in cash must occur upon the
termination of the contract, with the settlement being the difference between
the contract price and the actual level of the stock index at the expiration of
the contract. For example, if a Fund enters into a futures contract to buy 100
units of the S&P 100 Index at a specified future date at a contract price of
$180 and the S&P 100 Index is at $184 on that future date, the Fund will gain
$400 (100 units x gain of $4). If a Fund enters into a futures contract to sell
100 units of the stock index at a specified future date at a contract price of
$180 and the S&P 100 Index is at $182 on that future date, the Fund will lose
$200 (100 units x loss of $2).

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

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

of the holder's option position. If an option is exercised on the last trading
day prior to the expiration date of the option, the settlement will be made
entirely in cash based on the difference between the exercise price of the
option and the closing level of the index on which the futures contract is based
on the expiration date. Purchasers of options who fail to exercise their options
prior to the exercise date suffer a loss of the premium paid.

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

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

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

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

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

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

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

SPECIAL RISKS OF TRANSACTIONS IN FUTURES CONTRACTS AND RELATED OPTIONS

Liquidity Risks. Positions in futures contracts may be closed out only on an
exchange or board of trade which provides a secondary market for such futures.
Although the Funds intend to purchase or sell futures only on exchanges or
boards of trade where there appears to be an active secondary market, there is
no assurance that a

liquid secondary market on an exchange or board of trade will exist for any
particular contract or at any particular time. If there is not a liquid
secondary market at a particular time, it may not be possible to close a futures
position at such time and, in the event of adverse price movements, a Fund would
continue to be required to make daily cash payments of variation margin.
However, in the event financial futures are used to hedge portfolio securities,
such securities will not generally be sold until the financial futures can be
terminated. In such circumstances, an increase in the price of the portfolio
securities, if any, may partially or completely offset losses on the financial
futures.

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

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

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

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

segregate certain of its assets on the books of its custodian in respect of
derivatives transactions entered into by the Fund. As an open-end investment
company, registered with the SEC, the Trust is subject to federal securities
laws, including the 1940 Act, related rules and various SEC and SEC Staff
positions. In accordance with these positions, with respect to certain kinds of
derivatives, the Trust must "set aside" (referred to sometimes as "asset
segregation") liquid assets, or engage in other SEC- or Staff-approved measures
while the derivatives contracts are open. For example, with respect to forwards
and futures contracts that are not contractually required to "cash-settle," the
Trust must cover its open positions by setting aside liquid assets equal to the
contracts' full, notional value. With respect to forwards and futures that are
contractually required to "cash-settle," however, the Trust is permitted to set
aside liquid assets in an amount equal to the Trust's daily marked-to-market
(net) obligation (i.e. the Trust's daily net liability, if any) rather than the
notional value. By setting aside assets equal to only its net obligation under
cash-settled forward or futures the Trust will have the ability to employ
leverage to a greater extent than if the Trust were required to segregate assets
equal to the full notional value of such contracts. The use of leverage involves
certain risks. The Trust reserves the right to modify its asset segregation
policies in the future to comply with any changes in the positions articulated
from time to time by the SEC and its Staff.

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

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

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

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

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

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

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

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

counterparty of the issuer of the hybrid instrument would be an additional risk
factor the Funds would have to consider and monitor. Hybrid instruments also may
not be subject to regulation by the Commodity Futures Trading Commission (the
"CFTC"), which generally regulates the trading of commodity futures by U.S.
persons, the SEC, which regulates the offer and sale of securities by and to
U.S. persons, or any other governmental regulatory authority.

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

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

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

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

Income received by a Fund from sources within foreign countries may be reduced
by withholding and other taxes imposed by such countries. Tax conventions
between certain countries and the United States may reduce or eliminate such
taxes. It is impossible to determine the effective rate of foreign tax in
advance since the amount of a Fund's assets to be invested in various countries
is not known, and tax laws and their interpretations may change from time to
time and may change without advance notice. Any such taxes paid by a Fund will
reduce its net income available for distribution to shareholders.

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

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

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

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

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

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

It is impossible to forecast with precision the market value of the Schroder
Total Return Fixed Income Fund's portfolio securities at the expiration or
maturity of a forward or futures contract. Accordingly, it may be necessary

for the Fund to purchase additional foreign currency on the spot market (and
bear the expense of such purchase) if the market value of the security or
securities being hedged is less than the amount of foreign currency the Fund is
obligated to deliver and if a decision is made to sell the security or
securities and make delivery of the foreign currency. Conversely, it may be
necessary to sell on the spot market some of the foreign currency received upon
the sale of the portfolio security or securities of the Fund if the market value
of such security or securities exceeds the amount of foreign currency the Fund
is obligated to deliver.

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

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

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

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

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

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

Positions in foreign currency futures contracts and related options may be
closed out only on an exchange or board of trade which provides a secondary
market in such contracts or options. Although the Schroder Total Return Fixed
Income Fund will normally purchase or sell foreign currency futures contracts
and related options only on

exchanges or boards of trade where there appears to be an active secondary
market, there is no assurance that a secondary market on an exchange or board of
trade will exist for any particular contract or option or at any particular
time. In such event, it may not be possible to close a futures or related option
position and, in the event of adverse price movements, the Fund would continue
to be required to make daily cash payments of variation margin on its futures
positions.

FOREIGN CURRENCY OPTIONS. The Schroder Total Return Fixed Income Fund may enter
into options on foreign currencies. Options on foreign currencies operate
similarly to options on securities, and are traded primarily in the
over-the-counter market, although options on foreign currencies have been listed
on several exchanges. Such options will be purchased or written by the Schroder
Total Return Fixed Income Fund only when Schroders believes that a liquid
secondary market exists for such options. There can be no assurance that a
liquid secondary market will exist for a particular option at any specific time.
Options on foreign currencies are affected by all of those factors which
influence exchange rates and investments generally.

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

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

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

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

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

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

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

NON-PRINCIPAL INVESTMENTS, INVESTMENT PRACTICES AND RISKS

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

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

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

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

PRIVATE PLACEMENTS AND RESTRICTED SECURITIES. A Fund may invest in securities
that are purchased in private placements and, accordingly, are subject to
restrictions on resale as a matter of contract or under federal securities laws.
Because there may be relatively few potential purchasers for such investments,
especially under adverse market or economic conditions or in the event of
adverse changes in the financial condition of the issuer, a Fund could find it
more difficult to sell such securities when Schroders believes it advisable to
do so or may be able to sell such securities only at prices lower than if such
securities were more widely held. At times, it may also be more difficult to
determine the fair value of such securities for purposes of computing a Fund's
net asset value.

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

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

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

value of the Fund's assets. In implementing these "defensive" strategies, a Fund
would invest in investment grade debt securities, cash, or money market
instruments to any extent Schroders considers consistent with such defensive
strategies. It is impossible to predict when, or for how long, a Fund will use
these alternate strategies, and a Fund is not required to use alternate
strategies in any case. One risk of taking such temporary defensive positions is
that a Fund may not achieve its investment objectives.

INVESTMENT RESTRICTIONS

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

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

Note: The Investment Company Act currently prohibits an open-end
investment company from issuing any senior securities, except to the
extent it is permitted to borrow money (see Note following restriction
2, below). A class of securities may be senior to the Fund's shares of
beneficial interest if it provides a preference upon liquidation,
preferred dividends, or similar rights.

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

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

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

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

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

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

6. purchase or sell commodities or commodity contracts, except that the
Fund may purchase or sell financial futures contracts, options on
financial futures contracts, and futures contracts, forward contracts,
and options with respect to foreign currencies, and may enter into
swap transactions or other financial transactions, and except in
connection with otherwise permissible options, futures,

and commodity activities as described elsewhere in the Prospectuses or
this SAI from time to time; and

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

----------

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

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

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

DISCLOSURE OF PORTFOLIO HOLDINGS

Through filings made with the SEC on Form N-CSR and Form N-Q, each of the Funds
makes its full portfolio holdings publicly available to shareholders on a
quarterly basis. Each Fund normally makes such filings on or shortly after the
sixtieth day following the end of a fiscal quarter. Each Fund delivers its
complete portfolio schedules for the second and fourth fiscal quarters, required
to be filed on Form N-CSR, to shareholders in the Funds' semi-annual and annual
reports. The Funds do not deliver their complete portfolio schedules for the
first and third fiscal quarters, required to be filed on Form N-Q, to
shareholders, but these schedules are available on the SEC website at
www.sec.gov.

POLICIES AND PROCEDURES. The Schroder Funds have adopted policies and procedures
with respect to disclosure of the Funds' portfolio holdings. These procedures
apply both to arrangements, expected to be in place over a period of time, to
make available information about the securities in a Fund's portfolio and with
respect to disclosure on a one-time, irregular basis. These procedures provide
that neither Schroders nor the Funds receive any compensation in return for the
disclosure of information about a Fund's portfolio securities or for any ongoing
arrangements to make available information about a Fund's portfolio securities.
Portfolio holdings may be disclosed to certain third parties in advance of
quarterly filings by the Funds with the SEC. In each instance of such advance
disclosure, a determination will have been made by Schroders that such
disclosure is supported by a legitimate business purpose of the relevant Fund
and that the recipients, except as described below, are subject to an
independent duty not to disclose (whether contractually or as a matter of law)
or trade on the nonpublic information. The Funds currently disclose nonpublic
portfolio holdings information only to recipients who have agreed with Schroders
to keep such information confidential. In the future, where Schroders does not
believe that the risk of disclosure is material, a Fund may disclose information
to recipients who do not have an independent duty not to disclose the nonpublic
information and are not party to a confidentiality agreement. Any inappropriate
use of such information by the recipient could be harmful to the Fund and its
shareholders. The Funds have no ongoing arrangements to make available nonpublic
portfolio holdings information, except as described in the procedures below.
Nonpublic portfolio holdings information is disclosed by a Fund's portfolio
management team, except in cases where the information is disclosed by other
personnel or agents of the Funds, as described below. The following list
describes the circumstances in which the Fund discloses its portfolio holdings
to selected third parties:

Portfolio Managers. Portfolio managers shall have full daily access to portfolio
holdings for the Funds for which they have direct management responsibility.
Portfolio managers may also release and discuss specific portfolio holdings with
various broker-dealers, on an as-needed basis, for purposes of analyzing the
impact of existing and future market changes on the prices, availability or
demand, and liquidity of such securities, as well as for the purpose of
assisting portfolio managers in the trading of such securities.

Schroders. In its capacity as adviser to the Funds, certain Schroders personnel
and personnel of its affiliates (including Schroder Investment Management North
America Limited ("SIMNA Ltd.")) that deal directly with the processing,
settlement, review, control, auditing, reporting, or valuation of portfolio
trades will have full daily access to Fund portfolio holdings. Affiliates of
Schroders (including SIMNA Ltd.) with access to portfolio holdings information
are provided with training on the Trust's policies and procedures regarding
disclosure of portfolio holdings information and the Trust's Chief Compliance
Officer reports to the Trustees regarding compliance by such affiliates.

External Servicing Agents. Appropriate personnel employed by entities that
assist in the review and/or processing of Fund portfolio transactions, which
include fund accounting agents, pricing services, and the custodian have daily
access to all Fund portfolio holdings. Portfolio holdings information is
provided on an ongoing basis to the Fund's administrator SEI Investments Global
Funds Services ("SEI"). PricewaterhouseCoopers LLP, the Funds' independent
registered public accounting firm, receives portfolio holdings information
yearly in connection with the

Funds' audit. Schroders utilizes the services of Institutional Shareholder
Services ("ISS") to assist with proxy voting. ISS receives full Fund portfolio
holdings on a monthly basis for the Funds for which it provides services.

Ranking/Rating Agencies. Morningstar, Lipper, Thomson and Bloomberg receive the
Funds' full portfolio holdings no earlier than 60 calendar days following the
end of each calendar quarter.

Certain approved recipients of portfolio holdings information are
listed in the policies and procedures with respect to the disclosure of each of
the Fund's portfolio holdings approved by the Board of Trustees of the Trust.
Any addition to the list of approved recipients of portfolio holdings
information included in such procedures (whether on an ongoing or a one-time
basis) requires approval by the President and Chief Compliance Officer of the
Fund based on a review of: (i) the type of Fund involved; (ii) the purpose for
receiving the holdings information; (iii) the intended use of the information;
(iv) the frequency of the information to be provided; (v) the length of the
period, if any, between the date of the information and the date on which the
information will be disclosed; (vi) the proposed recipient's relationship to the
Fund; (vii) the ability of Schroders to monitor that such information will be
used by the proposed recipient in accordance with the stated purpose for the
disclosure; (viii) whether a confidentiality agreement will be in place with
such proposed recipient; and (ix) whether any potential conflicts exist
regarding such disclosure between the interests of the Fund shareholders, on the
one hand, and those of the Fund's investment adviser, principal underwriter, or
any affiliated person of the Fund.

MANAGEMENT OF THE TRUST

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

DISINTERESTED TRUSTEES

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

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

David N. Dinkins, 78 Trustee Indefinite Trustee of the 9 None
875 Third Avenue, 22nd Fl. Since 1994 Trust and
New York, NY 10022 Schroder Capital
Funds (Delaware);
Professor,
Columbia School
of International
and Public
Affairs.

Peter E. Guernsey, 84 Trustee Indefinite Trustee of the 9 None
875 Third Avenue, 22nd Fl. Since 1993 Trust and
New York, NY 10022 Schroder Capital
Funds (Delaware).
Retired.
Formerly, Senior
Vice President,
Marsh & McLennan,
Inc. (insurance
services).

John I. Howell, 89 Trustee Indefinite Trustee and Lead 10 American Life
875 Third Avenue, 22nd Fl. Since 1993 Disinterested Assurance Co. of New
New York, NY 10022 Trustee of the York; United States
Trust, Schroder Life Insurance Co. of
Capital Funds the City of New York;
(Delaware) and First SunAmerica Life
Schroder Global Insurance Co.
Series Trust;
Private
Consultant,
Indian Rock
Corporation
(individual
accounting).

Peter S. Knight, 55 Trustee Indefinite Trustee of the 10 Medicis; PAR
875 Third Avenue, 22nd Fl. Since 1993 Trust, Schroder Pharmaceuticals; and
New York, NY 10022 Capital Funds Entremed
(Delaware) and
Schroder Global
Series Trust;
Director,
Schroder Japanese
Long/Short Fund;
Director,
Schroder Credit
Renaissance Fund,
LP; Director,
Schroder
Alternative
Strategies Fund;
President,
Generation
Investment
Management U.S.
Formerly,
Managing
Director, MetWest
Financial
(financial
services);
President, Sage
Venture Partners
(investing); and
Partner, Wunder,
Knight, Forcsey &
DeVierno (law
firm).

William L. Means, 69 Trustee Indefinite Trustee of the 9 None
875 Third Avenue, 22nd Fl. Since 1997 Trust and
New York, NY 10022 Schroder Capital
Funds (Delaware).
Retired.

Clarence F. Michalis, 84 Trustee Indefinite Trustee of the 10 None
875 Third Avenue, 22nd Fl. Since 1993 Trust, Schroder
New York, NY 10022 Capital Funds
(Delaware) and
Schroder Global
Series Trust.
Retired.
Formerly,
Chairman of the
Board of
Directors, Josiah
Macy, Jr.,
Foundation.

Hermann C. Schwab, 86 Trustee Indefinite Trustee of the 9 None
875 Third Avenue, 22nd Fl. Since 1993 Trust and
New York, NY 10022 Schroder Capital
Funds (Delaware).

Retired.
Formerly,
consultant to
Schroder Capital
Management
International,
Inc.

James D. Vaughn, 60 Trustee Indefinite Trustee and 10 AMG National Trust
875 Third Avenue, 22nd Fl. Since 2003 Chairman of the Bank
New York, New York 10022 Audit Committee
of the Trust,
Schroder Capital
Funds (Delaware)
and Schroder
Global Series
Trust. Retired.
Formerly,
Managing Partner,
Deloitte & Touche
USA, LLP-Denver.

INTERESTED TRUSTEES

The following table sets forth certain information concerning a Trustee who is
an "interested person" (as defined in the Investment Company Act) of the Trust
(an "Interested Trustee").

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

Peter L. Clark, 41* Trustee Indefinite Trustee and 9 None
875 Third Avenue, 22nd Fl. and Since 2003 Chairman of the
New York, NY 10022 Chairman Trust and
Schroder Capital
Funds (Delaware);
Chief Executive
Officer, Schroders.
Formerly, Managing
Director and Head
of Emerging
Markets, JP
Morgan/JP Morgan
Investment
Management; Vice
President and
Head of Proprietary
Trading, JP Morgan.

* Mr. Clark is an Interested Trustee due to his status as an officer and
employee of Schroder Investment Management North America Inc. and its
affiliates.

OFFICERS

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

Peter L. Clark, 41 Trustee and Chairman Indefinite Since 2003 Trustee and Chairman of the Trust
875 Third Avenue, 22nd Fl. and Schroder Capital Funds
New York, NY 10022 (Delaware); Director and Chief
Executive Officer,

Schroders. Formerly, Managing
Director and Head of Emerging
Markets, JP Morgan/JP Morgan
Investment Management; Vice
President and Head of Proprietary
Trading, JP Morgan.

Mark A. Hemenetz, 49 President and Indefinite Since May 2004 Chief Operating Officer, Director
875 Third Avenue, 22nd Fl. Principal Executive and Executive Vice President,
New York, NY 10022 Officer Schroders; Chairman and Director,
Schroder Fund Advisors Inc.;
President and Principal Executive
Officer, the Trust, Schroder
Capital Funds (Delaware) and
Schroder Global Series Trust.
Formerly, Executive Vice President
and Director of Investment
Management, Bank of New York.

Alan M. Mandel, 48 Treasurer and Chief Indefinite Since May 2003 First Vice President, Schroders;
875 Third Avenue, 22nd Fl. Financial Officer Chief Operating Officer, Treasurer
New York, NY 10022 and Director, Schroder Fund
Advisors Inc.; Treasurer and Chief
Financial Officer, the Trust,
Schroder Global Series Trust and
Schroder Capital Funds (Delaware).

Carin F. Muhlbaum, 43 Vice President and Indefinite Senior Vice President, General
875 Third Avenue, 22nd Fl. Clerk Vice President since 1998; Counsel, and Chief Administrative
New York, NY 10022 Clerk since 2001 Officer, Schroders; Director,
Senior Vice President, Secretary
and General Counsel, Schroder Fund
Advisors Inc.; Vice President and
Secretary/Clerk, the Trust,
Schroder Global Series Trust and
Schroder Capital Funds (Delaware).

Stephen M. DeTore, 54 Chief Compliance Indefinite Since 2005 Senior Vice President, Director
875 Third Avenue, 22nd Fl. Officer and Chief Compliance Officer,
New York, NY 10022 Schroders; Senior Vice President
and Director, Schroder Fund
Advisors Inc.; Chief Compliance
Officer, the Trust, Schroder
Capital Funds (Delaware) and
Schroder Global Series Trust.
Formerly, Deputy General Counsel,
Gabelli Asset Management Inc.;
Associate General Counsel, Gabelli
Asset Management, Inc.; Assistant
Director, Office of Examination
Support, U.S. Securities and
Exchange Commission.

Angel Lanier, 43 Assistant Secretary Indefinite Since 2005 Assistant Vice President,
875 Third Avenue, 22nd Fl. Schroders; Assistant Vice
New York, NY 10022 President, Schroder Fund Advisors
Inc.; Assistant Secretary of the
Trust, Schroder Capital Funds
(Delaware) and Schroder Global
Series Trust. Formerly, Associate,
Schroders.

CERTAIN AFFILIATIONS

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

POSITIONS HELD WITH
AFFILIATED PERSONS OR
PRINCIPAL UNDERWRITERS
NAME OF THE TRUST
----------------- ---------------------------------------------------
Peter L. Clark Trustee and Chairman of the Trust and Schroder
Capital Funds (Delaware); Director and Chief
Executive Officer, Schroders. Formerly, Managing
Director and Head of Emerging Markets, JP Morgan/JP
Morgan Investment Management; Vice President and
Head of Proprietary Trading, JP Morgan.

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

Alan M. Mandel First Vice President, Schroders; Chief Operating
Officer, Treasurer and Director, Schroder Fund
Advisors Inc.; Treasurer and Chief Financial
Officer, the Trust, Schroder Global Series Trust,
Schroder Capital Funds (Delaware).

Carin F. Muhlbaum Senior Vice President, General Counsel, and Chief
Administrative Officer, Schroders; Director, Senior
Vice President, Secretary and General Counsel,
Schroder Fund Advisors Inc.; Vice President and
Secretary/Clerk, the Trust, Schroder Global Series
Trust, and Schroder Capital Funds (Delaware).

Stephen M. DeTore Senior Vice President, Director and Chief
Compliance Officer, Schroders; Senior Vice
President and Director, Schroder Fund Advisors
Inc.; Chief Compliance Officer, the Trust, Schroder
Global Series Trust, and Schroder Capital Funds
(Delaware).

Angel Lanier Assistant Vice President, Schroders; Assistant Vice
President, Schroder Fund Advisors Inc.; Assistant
Secretary, the Trust, Schroder Global Series Trust,
and Schroder Capital Funds (Delaware).

COMMITTEES OF THE BOARD OF TRUSTEES

Nominating Committee. All of the Disinterested Trustees (Messrs. Dinkins,
Guernsey, Howell, Knight, Means, Michalis, Schwab and Vaughn) serve as a
Nominating Committee of the Board responsible for reviewing and recommending
qualified candidates to the Board in the event that a position is vacated or
created. The Nominating Committee will consider nominees recommended by
shareholders if the Committee is considering other nominees at the time of the
nomination and the nominee meets the Committee's criteria. Nominee
recommendations may be submitted to the Clerk of the Trust at the Trust's
principal business address. The Nominating Committee did not meet during the
fiscal year ended October 31, 2005.

SECURITIES OWNERSHIP

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

Ranges: Ranges:
------- -------
None None
$1-$10,000 $1-$10,000
$10,001-$50,000 $10,001-$50,000
$50,001-$100,000 $50,001-$100,000
Over $100,000 Over $100,000
DISINTERESTED TRUSTEES

DAVID N. DINKINS $50,001-$100,000
ENHANCED INCOME FUND None
TOTAL RETURN FIXED INCOME None
FUND

PETER E. GUERNSEY None
ENHANCED INCOME FUND None
TOTAL RETURN FIXED INCOME None
FUND

JOHN I. HOWELL $10,001-$50,000
ENHANCED INCOME FUND None
TOTAL RETURN FIXED INCOME None
FUND

PETER S. KNIGHT None
ENHANCED INCOME FUND None
TOTAL RETURN FIXED INCOME None
FUND
WILLIAM L. MEANS $1-10,000
ENHANCED INCOME FUND None
U. S. CORE FIXED INCOME FUND None

CLARENCE F. MICHALIS Over $100,000
ENHANCED INCOME FUND None
TOTAL RETURN FIXED INCOME None
FUND

HERMANN C. SCHWAB None
ENHANCED INCOME FUND None
TOTAL RETURN FIXED INCOME None
FUND

JAMES D. VAUGHN Over $100,000
ENHANCED INCOME FUND None
TOTAL RETURN FIXED INCOME None
FUND
INTERESTED TRUSTEES

PETER L. CLARK $10,001-$50,000
ENHANCED INCOME FUND None
TOTAL RETURN FIXED INCOME None
FUND

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

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

TRUSTEES' COMPENSATION

AGGREGATE TOTAL COMPENSATION FROM TRUST AND
COMPENSATION FUND COMPLEX PAID TO
NAME OF TRUSTEE FROM TRUST TRUSTEES*
-------------------- ------------ ---------------------------------
David N. Dinkins $12,615 $20,080
Peter E. Guernsey $12,615 $20,080
John I. Howell $ 5,091 $20,080
Peter S. Knight $ 4,591 $17,750
William L. Means $12,565 $20,000
Clarence F. Michalis $ 5,091 $20,080

Hermann C. Schwab $12,615 $20,080
James D. Vaughn $ 5,040 $20,000

SCHRODERS AND ITS AFFILIATES

Schroders serves as the investment adviser for the Funds. Schroders is a wholly
owned subsidiary of Schroder U.S. Holdings Inc., which currently engages through
its subsidiary firms in the asset management business. Affiliates of Schroder
U.S. Holdings Inc. (or their predecessors) have been investment managers since
1927. Schroder U.S. Holdings Inc. is a wholly owned subsidiary of Schroder
International Holdings, which is a wholly owned subsidiary of Schroders plc, a
publicly owned holding company organized under the laws of England. Schroders
plc and its affiliates currently engage in the asset management business, and as
of December 31, 2005, had under management assets of approximately $201 billion.
Schroders' address is 875 Third Avenue, 22nd Floor, New York, New York 10022.

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

PERFORMANCE INFORMATION OF CERTAIN OTHER ACCOUNTS MANAGED BY SCHRODERS

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

The composite data is provided to illustrate the past performance of Schroders
in managing substantially similar accounts as measured against a specified
market index and does not represent the performance of the Funds. The
information shown below does not represent either Fund's performance, and should
not be considered a prediction of the future performance of the Schroder
Enhanced Income Fund, the Schroder Total Return Fixed Income Fund or of
Schroders.

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

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

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

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

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

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

SCHRODER ENHANCED INCOME FUND - PRIOR PERFORMANCE OF SIMILAR ACCOUNTS

The table below shows the average annual total returns for the Schroders
Enhanced Income Composite (in one column, restated to reflect deduction of Net
Expenses for Investor Shares of the Enhanced Income Fund; in the other, to
reflect deduction of Net Expenses for Advisor Shares of the Enhanced Income
Fund) and a broad-based securities market index as of December 31, 2005.

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

1999 4.75% 4.49% 5.41%
2000 7.57% 7.31% 6.53%
2001 5.95% 5.69% 3.77%
2002 2.85% 2.59% 1.79%
2003 1.88% 1.63% 1.23%
2004 2.02% 1.77% 1.64%
2005 3.31% 3.05% 3.60%
1 year 3.31% 3.05% 3.60%
5 years 3.19% 2.94% 2.40%
Since Inception 5.00% 4.73% 4.06%

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

(2) The current portfolio manager primarily responsible for making investment
decisions for the Schroder Enhanced Income Fund and Schroder Enhanced Income
Composite assumed responsibility for Schroder Enhanced Income Fund effective
December 2004 and Schroder Enhanced Income Composite in June 1998. The
performance results shown above for prior periods were achieved by a different
management team.

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

SCHRODER TOTAL RETURN FIXED INCOME FUND - PRIOR PERFORMANCE OF SIMILAR ACCOUNTS

The table below shows the average annual total returns for the Schroders Total
Return Fixed Income Composite (in one column, restated to reflect deduction of
Net Expenses for Investor Shares of the Schroder Total Return Fixed Income Fund;
in the other, to reflect deduction of Net Expenses for Advisor Shares of the
Schroder Total Return Fixed Income Fund) and a broad-based securities market
index as of December 31, 2005.

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

1999 -0.19% -0.44% -0.83%
2000 10.99% 10.71% 11.63%
2001 8.70% 8.43% 8.44%
2002 10.06% 9.79% 10.26%
2003 5.02% 4.75% 4.10%
2004 4.68% 4.42% 4.34%
2005 3.06% 2.80% 2.43%
1 year 3.06% 2.80% 2.43%
5 years 6.27% 6.00% 5.87%
Since Inception 7.61% 7.65% 7.88%

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

(2) The current portfolio manager primarily responsible for making investment
decisions for the Schroder Total Return Fixed Income Fund and Schroder Total
Return Fixed Income Composite assumed responsibility for Schroder Total Return
Fixed Income Fund effective December 2004 and Schroder Total Return Fixed Income
Composite in June 1998. The performance results shown above for prior periods
were achieved by a different management team.

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

PORTFOLIO MANAGERS

The portfolio managers primarily responsible for making investment decisions for
the Funds are Steven S. Lear, David Harris, Wesley A. Sparks, Gregg T. Moore,
and Matthew T. Murphy.

OTHER ACCOUNTS MANAGED. The following tables show information regarding other
accounts managed by the portfolio managers of each Fund, as of October 31, 2005:

TOTAL ASSETS IN
NUMBER OF ACCOUNTS ACCOUNTS WHERE
WHERE ADVISORY FEE ADVISORY FEE IS
NUMBER OF TOTAL ASSETS IN IS BASED ON ACCOUNT BASED ON ACCOUNT
ACCOUNTS ACCOUNTS PERFORMANCE PERFORMANCE
--------- ---------------- ------------------- ----------------

ENHANCED INCOME FUND
STEVEN S. LEAR
Registered Investment 1 $102.1 million None None
Companies
Other Pooled Investment 19 $3.9855 billion None None
Vehicles
Other Accounts 30 $1.8744 billion None None

DAVID HARRIS
Registered Investment 1 $102.1 million None None
Companies
Other Pooled Investment 19 $3.9855 billion None None
Vehicles
Other Accounts 30 $1.8744 billion None None

WESLEY A. SPARKS, CFA
Registered Investment 1 $102.1 million None None
Companies
Other Pooled Investment 19 $3.9855 billion None None
Vehicles
Other Accounts 30 $1.8744 billion None None
GREGG T. MOORE, CFA
Registered Investment 1 $102.1 million None None
Companies
Other Pooled Investment 19 $3.9855 billion None None
Vehicles
Other Accounts 30 $1.8744 billion None None

MATTHEW T. MURPHY
Registered Investment 1 $102.1 million None None
Companies
Other Pooled Investment 19 $3.9855 billion None None
Vehicles
Other Accounts 30 $1.8744 billion None None

TOTAL RETURN FIXED INCOME FUND
STEVEN S. LEAR
Registered 1 $10.2 million None None

Investment
Companies
Other Pooled Investment 19 $3.9855 billion None None
Vehicles
Other Accounts 30 $1.8744 billion None None

DAVID HARRIS
Registered Investment 1 $10.2 million None None
Companies
Other Pooled Investment 19 $3.9855 billion None None
Vehicles
Other Accounts 30 $1.8744 billion None None

WESLEY A. SPARKS, CFA
Registered Investment 1 $10.2 million None None
Companies
Other Pooled Investment 19 $3.9855 billion None None
Vehicles
Other Accounts 30 $1.8744 billion None None

GREGG T. MOORE, CFA
Registered Investment 1 $10.2 million None None
Companies
Other Pooled Investment 19 $$3.9855 billion None None
Vehicles
Other Accounts 30 $1.8744 billion None None

MATTHEW T. MURPHY
Registered Investment 1 $10.2 million None None
Companies
Other Pooled Investment 19 $3.9855 billion None None
Vehicles
Other Accounts 30 $1.8744 billion None None

MATERIAL CONFLICTS OF INTEREST. Whenever a portfolio manager of a Fund manages
other accounts, potential conflicts of interest exist, including potential
conflicts between the investment strategy of the Fund and the investment
strategy of the other accounts. For example, in certain instances, a portfolio
manager may take conflicting positions in a particular security for different
accounts, by selling a security for one account and continuing to hold it for
another account. In addition, the fact that other accounts require the portfolio
manager to devote less than all of his or her time to a Fund may be seen itself
to constitute a conflict with the interest of the Fund.

Each portfolio manager may also execute transactions for another fund or account
at the direction of such fund or account that may adversely impact the value of
securities held by a Fund. Securities selected for funds or accounts other than
such Fund may outperform the securities selected for the Fund. Finally, if the
portfolio manager identifies a limited investment opportunity that may be
suitable for more than one fund or other account, a Fund may not be able to take
full advantage of that opportunity due to an allocation of that opportunity
across all eligible funds and accounts. Schroders' policies, however, require
that portfolio managers allocate investment opportunities among accounts managed
by them in an equitable manner over time. See "Brokerage Allocation and Other
Practices" for more information about this process.

The structure of a portfolio manager's compensation may give rise to potential
conflicts of interest. A portfolio manager's base pay tends to increase with
additional and more complex responsibilities that include increased assets under
management, which indirectly links compensation to sales. Also, potential
conflicts of interest may arise since the structure of Schroders' compensation
may vary from account to account.

Schroders has adopted certain compliance procedures that are designed to address
these, and other, types of conflicts. However, there is no guarantee that such
procedures will detect each and every situation where a conflict arises.

COMPENSATION. Schroders' methodology for measuring and rewarding the
contribution made by portfolio managers combines quantitative measures with
qualitative measures. The Funds' portfolio managers are paid in a combination of
base salary and annual discretionary bonus, as well as the standard retirement,
health and welfare benefits available to all Schroders employees. Base salary of
Schroders employees is determined by reference to the level of responsibility
inherent in the role and the experience of the incumbent, is benchmarked
annually against market data to ensure competitive salaries, and is paid in
cash. The portfolio managers' base salary is fixed and is subject to an annual
review and will increase if market movements make this necessary or if there has
been an increase in responsibilities.

Each portfolio manager's bonus is based in part on performance. Discretionary
bonuses for portfolio managers are determined by a number of factors. At a macro
level the total amount available to spend is a function of the compensation to
revenue ratio achieved by Schroders globally. Schroders then assesses the
performance of the division and of a management team to determine the share of
the aggregate bonus pool that is spent in each area. This focus on "team"
maintains consistency and minimizes internal competition that may be detrimental
to the interests of Schroders' clients. For each team, Schroders assesses the
performance of their funds relative to competitors and to the relevant
benchmarks over one and three year periods, the level of funds under management
and the level of performance fees generated. The portfolio managers'
compensation for other accounts they manage is not based upon account
performance.

Schroders also reviews "softer" factors such as leadership, innovation,
contribution to other parts of the business an adherence to corporate values of
excellence, integrity, teamwork, passion and innovation. An employee's bonus is
paid in a combination of cash and Schroders plc stock, as determined by
Schroders. This stock vests over a period of three years and ensures that the
interests of the employee are aligned with those of shareholders of Schroders.

OWNERSHIP OF SECURITIES. As of October 31, 2005, none of the portfolio managers
beneficially owned any shares of the Funds.

MANAGEMENT CONTRACT

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

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

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

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

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

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

cases, the vote of the shareholders is the affirmative vote of a "majority of
the outstanding voting securities" as defined in the Investment Company Act.

Recent Investment Advisory Fees. The following table sets forth the investment
advisory fees paid by each of the Funds during the fiscal year ended October 31,
2005. The fees listed in the following table reflect reductions pursuant to
expense limitations and/or fee waivers in effect during such periods.

INVESTMENT ADVISORY FEES
PAID FOR FISCAL YEAR
FUND ENDED 10/31/05
--------------------------------------- ------------------------
Schroder Enhanced Income Fund $0
Schroder Total Return Fixed Income Fund $0

Waived Fees. For the periods shown above, a portion of the advisory fees payable
to Schroders were waived in the following amounts pursuant to expense
limitations and/or fee waivers observed by Schroders for the noted Fund during
such periods.

FEES WAIVED DURING FISCAL
FUND YEAR ENDED 10/31/05
--------------------------------------- -------------------------
Schroder Enhanced Income Fund $305,714
Schroder Total Return Fixed Income Fund $223,794

ADMINISTRATIVE SERVICES

On behalf of each Fund, the Trust has entered into an administration and
accounting agreement with SEI Investments Global Fund Services ("SEI"), under
which SEI provides administrative services necessary for the operation of each
Fund, including recordkeeping, preparation of shareholder communications,
assistance with regulatory compliance (such as reports to and filings with the
Securities and Exchange Commission and state securities commissions),
preparation and filing of tax returns, preparation of the Trust's periodic
financial reports, and certain other fund accounting services. Effective
November 1, 2004, under agreements with SEI, the Trust and Schroder Capital
Funds (Delaware) pay fees to SEI based on the combined average daily net assets
of all the funds that are series of the Trust or Schroder Capital Funds
(Delaware) according to the following annual rates: 0.115% on the first $600
million of such assets, 0.11% on the next $400 million of such assets, 0.09% on
the next $1 billion of such assets and 0.07% on assets in excess of $2 billion.
Each Fund pays its pro rata portion of such expenses. Prior to November 1, 2004,
the Trust and Schroder Capital Funds (Delaware), paid fees to SEI based on the
combined average daily net assets of all of their funds, according to the
following annual rates: 0.15% on the first $300 million of such assets, and
0.12% on such assets in excess of $300 million, subject to certain minimum
charges. Each Fund pays its pro rata portion of such expenses. The agreement is
terminable with respect to the Funds without penalty, at any time, by the
Trustees upon six (6) months' written notice to SEI or by SEI upon six (6)
months' written notice to the Trust. The agreement is terminable by either party
upon a material breach by the other party, provided that the terminating party
has provided 45 days' notice of such material breach and the specified date of
termination and the breaching party has not remedied the breach by the specified
termination date.

For the fiscal year ended October 31, 2005 Schroder Enhanced Income Fund paid
administration and accounting fees of $87,709. For the fiscal year ended October
31, 2005 Schroder Total Return Fixed Income Fund paid administration and
accounting fees of $10,487.

DISTRIBUTOR

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

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

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

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

During the fiscal period ended October 31, 2005, the Funds (in respect of their
Advisor Shares) paid fees under the Distribution Plans in the following amounts:

Schroder Enhanced Income Fund $2,131

Schroder Total Return Fixed Income Fund $2,109

BROKERAGE ALLOCATION AND OTHER PRACTICES

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

ALLOCATION. Schroders may deem the purchase or sale of a security to be in the
best interest of a Fund as well as other clients of Schroders. In such cases,
Schroders may, but is under no obligation to, aggregate all such transactions in
order to obtain the most favorable price or lower brokerage commissions and
efficient execution. In

such event, such transactions will be allocated among the clients in a manner
believed by Schroders to be fair and equitable and consistent with its fiduciary
obligations to each client at an average price and commission.

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

DETERMINATION OF NET ASSET VALUE

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

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

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

Except as noted below with regard to below investment grade and emerging markets
debt instruments, fixed income securities with remaining maturities of more than
60 days are valued on the basis of valuations provided by pricing services based
on the mean of the bid and asked prices supplied by brokers or dealers or matrix
pricing, a method of valuing securities by reference to the values of other
securities with similar characteristics, such as rating, interest rate, and
maturity. Below investment grade debt instruments ("high yield debt") and
emerging markets debt instruments will ordinarily be valued at prices supplied
by a Fund's pricing services based on the mean of bid and asked prices supplied
by brokers or dealers; provided, however, that if the bid-asked spread exceeds
five points, then that security will be valued at the bid price. Short-term
fixed income securities with remaining maturities of 60 days or less are valued
at amortized cost, a form of fair valuation, unless Schroders believes another
valuation is more appropriate. Securities for which current market quotations
are not readily available are valued at fair value pursuant to procedures
established by the Trustees.

Options on indices or exchange-traded fund (ETF) shares shall be valued at the
mid-market price reported as of the close of the Chicago Board of Options
Exchange. Options and futures contracts traded on a securities exchange or board
of trade shall be valued at the last reported sales price or, in the absence of
a sale, at the closing mid-market price (the average of the last reported bid
and asked prices). Options not traded on a securities exchange or board of trade
for which over-the-counter market quotations are readily available shall be
valued at the most recently reported mid-market price (the average of the most
recently reported bid and asked prices).

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

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

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

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

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

ARRANGEMENTS PERMITTING FREQUENT PURCHASES AND REDEMPTIONS OF FUND SHARES

The Funds have no arrangements with any person to permit frequent purchases and
redemptions of the Fund shares.

TAXES

The following discussion is only a summary of some of the important U.S. federal
tax considerations generally applicable to investments in the Funds. It does not
address special tax rules applicable to certain classes of investors, such as,
among others, IRAs and other retirement plans, tax-exempt entities, foreign
investors, insurance companies, financial institutions and investors making
in-kind contributions to the Funds. You should consult your tax advisor for more
information about your own tax situation, including possible other federal,
state, local, and, where applicable, foreign tax consequences of investing in
the Funds.

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

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

In order to qualify as a RIC each Fund must, among other things, (a) derive at
least 90% of its gross income from dividends, interest, payments with respect to
securities loans, gains from the sale or other disposition of stock, securities,
or foreign currencies, and other income (including gains from options, futures,
or forward contracts) derived with respect to its business of investing in such
stock, securities, or currencies; (b) diversify its holdings so that, at the
close of each quarter of its taxable year, (i) at least 50% of the value of its
total assets consists of cash, cash items, U.S. Government securities,
securities of other RICs and other securities limited generally with respect to
any one issuer to not more than 5% of the value of the total assets of the Fund
and not more than 10% of the outstanding voting securities of such issuer, and
(ii) not more than 25% of the value of its assets is invested in (x) the
securities of any one issuer (other than the U.S. Government or other RICs) or
of two or more issuers which such Fund controls and which are engaged in the
same, similar or related trades and businesses or (y) the securities of one or
more qualified publicly traded partnerships (as defined below); and (c)
distribute with respect to each taxable year at least 90% of the sum of its
investment company taxable income (as that term is defined in the Code without
regard to the deduction for dividends paid - generally, taxable ordinary income
and the excess, if any, of net short-term capital gains over net long-term
capital losses) and net tax-exempt interest income, for such year. Each Fund
intends to make such distributions.

In general, for purposes of the 90% gross income requirement described in
paragraph (a) above, income derived from a partnership will be treated as
qualifying income only to the extent such income is attributable to items of
income of the partnership which would be qualifying income if realized by the
regulated investment company. However, the American Jobs Creation Act of 2004
(the "2004 Act"), provides that for taxable years of a regulated investment
company beginning after October 22, 2004, 100% of the net income derived from an
interest in a "qualified publicly traded partnership" (defined as a partnership
(i) interests in which are traded on an established securities market or readily
tradable on a secondary market or the substantial equivalent thereof and (ii)
that derives less than 90% of its income from the qualifying income described in
paragraph (a) above) will be treated as qualifying income. In addition, although
in general the passive loss rules of the Code do not apply to regulated
investment companies, such rules do apply to a regulated investment company with
respect to items attributable to an interest in a qualified publicly traded
partnership. Finally, for purposes of paragraph (b) above, the term "outstanding
voting securities of such issuer" will include the equity securities of a
qualified publicly traded partnership.

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

subchapter M), the Fund will be subject to a 4% excise tax on the
under-distributed amounts. A dividend paid to shareholders by a Fund in January
of a year generally is deemed to have been paid by that Fund on December 31 of
the preceding year, if the dividend was declared and payable to shareholders of
record on a date in October, November, or December of that preceding year. Each
Fund intends generally to make distributions sufficient to avoid imposition of
the 4% excise tax.

TAXABLE DISTRIBUTIONS. For federal income tax purposes, distributions of
investment income (other than exempt-interest dividends, as described below) are
taxed to shareholders as ordinary income. Taxes on distributions of capital
gains are determined by how long your Fund owned the investments that generated
the gains, rather than how long you owned your shares. Distributions of net
capital gains from the sale of investments that a Fund has held for more than
one year and that are properly designated by the Fund as capital gain dividends
will be taxable as long-term capital gains. Distributions of gains from the sale
of investments that a Fund owned for one year or less will be taxable as
ordinary income. For taxable years beginning before January 1, 2009,
distributions of investment income designated by a Fund as derived from
"qualified dividend income" will be taxed in the hands of individual
shareholders at the rates applicable to long-term capital gain, provided holding
period and other requirements are met at both the shareholder and Fund level.
Each Fund receives interest, rather than dividends, from its portfolio holdings.
As a result, the Funds do not expect any significant portion of their
distributions to be derived from qualified dividend income.

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

Long-term capital gain rates applicable to individuals have been temporarily
reduced - in general, to 15%, with lower rates applying to taxpayers in the 10%
and 15% rate brackets - for taxable years beginning before January 1, 2009.

TRANSACTIONS IN FUND SHARES. The sale, exchange or redemption of Fund shares may
give rise to a gain or loss. In general, any gain or loss realized upon such a
taxable disposition of shares will be treated as long-term capital gain or loss
if the shares have been held for more than 12 months. Otherwise the gain or loss
on the sale, exchange or redemption of Fund shares will be treated as short-term
capital gain or loss. However, if a shareholder sells shares at a loss within
six months of purchase, any loss will be disallowed for federal income tax
purposes to the extent of any exempt-interest dividends received on such shares.
In addition, any loss (not already disallowed as provided in the preceding
sentence) realized upon a taxable disposition of shares held for six months or
less will be treated as long-term, rather than short-term, to the extent of any
amounts treated as distributions from a Fund of long-term capital gain with
respect to the shares during the six-month period. All or a portion of any loss
realized upon a taxable disposition of Fund shares will be disallowed if other
shares of a Fund are purchased within 30 days before or after the disposition.
In such a case, the basis of the newly purchased shares will be adjusted to
reflect the disallowed loss.

FOREIGN INVESTMENTS. The Funds' transactions in foreign currencies, foreign
currency-denominated debt securities and certain foreign currency options,
futures contracts and forward contracts (and similar instruments) may give rise
to ordinary income or loss to the extent such income or loss results from
fluctuations of the foreign currency concerned.

foreign investment companies" could subject a Fund to U.S. federal income tax or
other charges on certain distributions from such companies and on disposition of
investments in such companies; however, the tax effects of such investments may
be mitigated by making an election to mark such investments to market annually
or treat the passive foreign investment company as a "qualified electing fund."

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

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

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

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

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

NON-U.S. SHAREHOLDERS. In general, dividends (other than capital gain dividends)
paid by a Fund to a shareholder that is not a "U.S. person" within the meaning
of the Code (a "foreign person") are subject to withholding of U.S. federal
income tax at a rate of 30% (or lower applicable treaty rate) even if they are
funded by income or gains (such as portfolio interest, short-term capital gains,
or foreign-source dividend and interest income) that, if paid to a foreign
person directly, would not be subject to withholding. However, under the 2004
Act, effective for taxable years of a fund beginning after December 31, 2004 and
before January 1, 2008, a Fund will not be required to withhold any amounts (i)
with respect to distributions (other than distributions to a foreign person (w)
that has not provided a satisfactory statement that the beneficial owner is not
a U.S. person, (x) to the extent that the dividend is attributable to certain
interest on an obligation if the foreign person is the issuer or is a 10%
shareholder of the issuer, (y) that is within certain foreign countries that
have inadequate information exchange with the United States, or (z) to the
extent the dividend is attributable to interest paid by a person that is a
related person of the foreign person and the foreign person is a controlled
foreign corporation) from U.S.-source interest income that would not

be subject to U.S. federal income tax if earned directly by an individual
foreign person, to the extent such distributions are properly designated by a
Fund (an "interest-related dividend"), and (ii) with respect to distributions
(other than distributions to an individual foreign person who is present in the
United States for a period or periods aggregating 183 days or more during the
year of the distribution) of net short-term capital gains in excess of net
long-term capital losses, to the extent such distributions are properly
designated by a Fund (a "short-term capital gain dividend"). A Fund may opt not
to designate dividends as interest-related dividends or short-term capital gain
dividends to the full extent permitted by the Code. In addition, as indicated
above, capital gain dividends will not be subject to withholding of U.S. federal
income tax.

If a beneficial holder who is a foreign person has a trade or business in the
United States, and the dividends are effectively connected with the conduct by
the beneficial holder of a trade or business in the United States, the dividend
will be subject to U.S. federal net income taxation at regular income tax rates.

The 2004 Act modifies the tax treatment of distributions from a Fund that are
paid to a foreign person and are attributable to gain from "U.S. real property
interests" ("USRPIs"), which the Code defines to include direct holdings of U.S.
real property and interests (other than solely as a creditor) in "U.S. real
property holding corporations" such as REITs. The Code deems any corporation
that holds (or held during the previous five-year period) USRPIs with a fair
market value equal to 50% or more of the fair market value of the corporation's
U.S. and foreign real property assets and other assets used or held for use in a
trade or business to be a U.S. real property holding corporation; however, if
any class of stock of a corporation is traded on an established securities
market, stock of such class shall be treated as a USRPI only in the case of a
person who holds more than 5% of such class of stock at any time during the
previous five-year period. Under the 2004 Act, which is generally effective for
taxable years of RICs beginning after December 31, 2004 and which applies to
dividends paid or deemed paid on or before December 31, 2007, distributions to
foreign persons attributable to gains from the sale or exchange of USRPIs (a
"FIRPTA Distribution") will give rise to an obligation for those foreign persons
to file a U.S. tax return and pay tax, and may well be subject to withholding
under future regulations.

Under U.S. federal tax law, a beneficial holder of shares who is a foreign
person is not, in general, subject to U.S. federal income tax on gains (and is
not allowed a deduction for losses) realized on the sale of shares of a Fund or
on capital gain dividends unless (i) such gain or capital gain dividend is
effectively connected with the conduct of a trade or business carried on by such
holder within the United States, (ii) in the case of an individual holder, the
holder is present in the United States for a period or periods aggregating 183
days or more during the year of the sale or capital gain dividend and certain
other conditions are met, or (iii) the shares constitute USRPIs or (effective
for taxable years of a Fund beginning after December 31, 2004) the capital gain
dividends are paid or deemed paid on or before December 31, 2007 and are
attributable to gains from the sale or exchange of USRPIs.

PRINCIPAL HOLDERS OF SECURITIES

To the knowledge of the Trust, as of February 22, 2006, no person owned
beneficially or of record more than 5% of the outstanding voting securities of
either Fund, except as indicated on Appendix A hereto.

To the knowledge of the Trust, as of February 22, 2006, the Trustees of the
Trust and the officers of the Trust, as a group, owned less than 1% of the
outstanding shares of either Fund.

CUSTODIAN

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

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

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

INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS

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

CODE OF ETHICS

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

PROXY VOTING POLICIES AND PROCEDURES

The Trust has delegated authority and responsibility to vote any proxies
relating to voting securities held by a Fund to Schroders, which intends to vote
such proxies in accordance with its proxy voting policies and procedures. A copy
of Schroders' proxy voting policies and procedures is attached as Appendix B to
this SAI. Information regarding how the Funds voted proxies relating to
portfolio securities during the most recent 12-month period ended June 30 is
available without charge, upon request, by calling (800) 464-3108 and on the
Securities and Exchange Commission website at http://www.sec.gov.

LEGAL COUNSEL

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

SHAREHOLDER LIABILITY

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

FINANCIAL STATEMENTS

The Report of Independent Registered Public Accounting Firm, Financial
Highlights, and Financial Statements in respect of the Funds are included in the
Trust's Annual Report to Shareholders for the fiscal year ended October 31, 2005
under Rule 30d-1 of the Investment Company Act, filed electronically with the
Securities and Exchange

Commission on January 5, 2006 in the Funds' Report on Form N-CSR for the period
ending October 31, 2005 (File No. 811-07840; Accession No.
0000950136-06-000150). The Report, Financial Highlights and Financial Statements
referred to above are incorporated by reference into this SAI. Information
regarding how the Funds voted proxies relating to portfolio securities during
the most recent twelve month period ended June 30 is available without charge,
upon request, by calling (800) 464-3108 and on the Securities and Exchange
Commission website at http://www.sec.gov.

APPENDIX A

HOLDERS OF OUTSTANDING SHARES

To the knowledge of the Trust, as of February 22, 2006, no person owned
beneficially or of record 5% or more of the outstanding Investor or Advisor
Shares of any Fund, except as set forth below.

ADVISOR SHARES:

Percentage of Outstanding
Record and Beneficial Owner Number of Shares Advisor Shares Owned
--------------------------------------- ---------------- -------------------------

SCHRODER ENHANCED INCOME FUND

Schroder US Holdings, Inc. 103,433.5410 99.45%
22 Church Street
Hamilton, Bermuda HM11
(Record Owner and Beneficial Owner)

SCHRODER TOTAL RETURN FIXED INCOME FUND

Schroder US Holdings, Inc. 104,178.8240 98.01%
22 Church Street
Hamilton, Bermuda HM11
(Record Owner and Beneficial Owner)

INVESTOR SHARES:

Percentage of Outstanding
Record and Beneficial Owner Number of Shares Investor Shares Owned
--------------------------------------- ---------------- -------------------------

SCHRODER ENHANCED INCOME FUND

Schroder US Holdings, Inc. 10,249,473.7780 99.77%
22 Church Street
Hamilton, Bermuda HM11
(Record Owner and Beneficial Owner)

SCHRODER TOTAL RETURN FIXED INCOME FUND

Schroder US Holdings, Inc. 941,810.2490 48.89%
22 Church Street
Hamilton, Bermuda HM11
(Record Owner and Beneficial Owner)

A-1

Local 6 Club Employees Pension Fund 982,695.6240 51.01%
709 Eighth Avenue 3rd Floor
New York, NY 10036-7102
(Record Owner)

A-2

APPENDIX B

FIXED INCOME AND COMMERCIAL PAPER RATINGS

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

FIXED-INCOME SECURITY RATINGS

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

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

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

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

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

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

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

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

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

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

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

B-1

COMMERCIAL PAPER RATINGS

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

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

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

FIXED-INCOME SECURITY RATINGS

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

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

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

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

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

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

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

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

B-2

financial or economic conditions which could lead to inadequate capacity or
willingness to pay interest and repay principal.

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

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

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

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

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

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

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

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

COMMERCIAL PAPER RATINGS

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

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

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

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

B-3

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

FITCH INVESTORS SERVICE, INC. ("FITCH")

FIXED INCOME SECURITY RATINGS

Investment Grade

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

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

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

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

High Yield Grade

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

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

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

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

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

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

B-4

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

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

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

Short-Term Ratings

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

F-1+: Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.

F-1: Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated
"F-1+".

F-2: Good Credit Quality. Issues assigned this rating have a satisfactory degree
of assurance for timely payment, but the margin of safety is not as great as the
"F-1+" and "F-1 " categories.

F-3: Fair Credit Quality. Issues assigned this rating have characteristics
suggesting that the degree of assurance for timely payment is adequate, however,
near-term adverse changes could cause these securities to be rated below
investment grade.

DUFF & PHELPS

FIXED INCOME SECURITIES

Investment Grade

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

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

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

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

High Yield Grade

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

B-5

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

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

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

CERTIFICATES OF DEPOSIT RATINGS

Category 1: Top Grade

Duff 1 plus: Highest certainty of timely payment. Short-term liquidity including
internal operating factors and/or ready access to alternative sources of funds,
is outstanding, and safety is just below risk-free US Treasury short-term
obligations.

Duff 1: Very high certainty of timely payment. Liquidity factors are excellent
and supported by good Fundamental protection factors. Risk factors are minor.

Duff 1 minus: High certainty of timely payment. Liquidity factors are strong and
supported by good Fundamental protection factors. Risk factors are very small.

Category 2: Good Grade

Duff 2: Good certainty of timely payment. Liquidity factors and company
Fundamentals are sound. Although ongoing Funding needs may enlarge total
financing requirements, access to capital markets is good. Risk factors are
small.

Category 3: Satisfactory Grade

Duff 3: Satisfactory liquidity and other protection factors qualify issue as to
investment grade. Risk factors are larger and subject to more variation.
Nevertheless timely payment is expected.

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

B-6

APPENDIX C

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

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

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

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

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

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

1. Proxy Voting General Principles

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

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

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

PROXY COMMITTEE

The procedure for evaluating proxy requests is as follows:

When making proxy-voting decisions, Schroders generally adheres to the Global
Corporate Governance Policy (the "Policy"), as revised from time to time. The
Policy, which has been developed by Schroders' Global Corporate Governance Team
and approved by the Schroders Proxy Committee, sets forth Schroders' positions
on recurring issues and criteria for addressing non-recurring issues. The Policy
is a part of these procedures and is incorporated herein by reference. The Proxy
Committee exercises oversight to assure that proxies are voted in accordance
with the Policy and that any votes inconsistent with the Policy or against
management are appropriately documented.

C-1

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

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

CONFLICTS

For example, conflicts of interest may arise when:

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

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

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

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

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

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

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

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

C-2

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

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

RECORD OF PROXY VOTING

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

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

Additional Reports and Disclosures for the Schroder Funds

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

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

o Name of the issuer of the security;

o Exchange ticker symbol;

o CUSIP number, if available;

o Shareholder meeting date;

o Brief summary of the matter voted upon;

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

o Whether the fund voted on the matter;

o How the fund voted; and

o Whether the fund voted with or against management.

C-3

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

July 30, 2003

C-4

SCHRODER SERIES TRUST

Schroder Municipal Bond Fund
Schroder Short-Term Municipal Bond Fund

FORM N-1A
PART B

STATEMENT OF ADDITIONAL INFORMATION

Part 3

May 15, 2006

TABLE OF CONTENTS

TRUST HISTORY............................................................. 2
FUND CLASSIFICATION....................................................... 2
CAPITALIZATION AND SHARE CLASSES.......................................... 2
ADDITIONAL INFORMATION CONCERNING THE FUNDS' PRINCIPAL INVESTMENT
STRATEGIES............................................................. 3
NON-PRINCIPAL INVESTMENTS, INVESTMENT PRACTICES AND RISKS................. 6
INVESTMENT RESTRICTIONS................................................... 23
DISCLOSURE OF PORTFOLIO HOLDINGS.......................................... 24
MANAGEMENT OF THE TRUST................................................... 26
SCHRODERS AND ITS AFFILIATES.............................................. 33
PORTFOLIO MANAGERS........................................................ 34
MANAGEMENT CONTRACT....................................................... 37
ADMINISTRATIVE SERVICES................................................... 39
DISTRIBUTOR............................................................... 39
BROKERAGE ALLOCATION AND OTHER PRACTICES.................................. 40
DETERMINATION OF NET ASSET VALUE.......................................... 41
ARRANGEMENTS PERMITTING FREQUENT PURCHASES AND REDEMPTIONS OF FUND
SHARES................................................................. 43
TAXES .................................................................... 43
PRINCIPAL HOLDERS OF SECURITIES........................................... 47
CUSTODIAN................................................................. 48
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT.............................. 48
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM............................. 48
CODE OF ETHICS............................................................ 48
PROXY VOTING POLICIES AND PROCEDURES...................................... 48
LEGAL COUNSEL............................................................. 48
SHAREHOLDER LIABILITY..................................................... 49
FINANCIAL STATEMENTS...................................................... 49
APPENDIX A HOLDERS OF OUTSTANDING SHARES................................ A-1
APPENDIX B FIXED INCOME AND COMMERCIAL PAPER RATINGS.................... B-1
APPENDIX C SCHRODER INVESTMENT MANAGEMENT NORTH AMERICA INC. POLICY
RELATING TO IDENTIFYING AND ACTING UPON CONFLICTS OF
INTEREST IN CONNECTION WITH ITS PROXY VOTING OBLIGATIONS.. C-1

SCHRODER MUNICIPAL BOND FUND
SCHRODER SHORT-TERM MUNICIPAL BOND FUND

STATEMENT OF ADDITIONAL INFORMATION

TRUST HISTORY

Schroder Series Trust (the "Trust") is a Massachusetts business trust organized
under the laws of The Commonwealth of Massachusetts on May 6, 1993. The Trust's
Agreement and Declaration of Trust (as amended, the "Declaration of Trust"),
which is governed by Massachusetts law, is on file with the Secretary of State
of The Commonwealth of Massachusetts. Schroder Municipal Bond Fund and Schroder
Short-Term Municipal Bond Fund (each, a "Fund," and collectively, the "Funds")
are series of the Trust. The Trust currently also comprises four other publicly
offered series, Schroder Emerging Market Equity Fund, Schroder U.S. Small and
Mid Cap Opportunities Fund, Schroder Enhanced Income Fund, and Schroder Total
Return Fixed Income Fund. Schroder Investment Management North America Inc.
("Schroders") serves as investment adviser to the Funds.

FUND CLASSIFICATION

Each Fund is a diversified, open-end, management investment company registered
under the Investment Company Act of 1940, as amended (the "Investment Company
Act"). This means that with respect to 75% of a Fund's total assets, that Fund
may not invest in securities of any issuer if (i) immediately after such
investment, more than 5% of the total assets of that Fund (taken at current
value) would be invested in the securities of that issuer (this limitation does
not apply to investments in U.S. Government securities or securities of other
investment companies) or (ii) the Fund would hold more than 10% (taken at the
time of such investment) of the outstanding voting securities of any one issuer
(this limitation does not apply to investments in U.S. Government securities or
securities of other investment companies). No Fund is subject to this limitation
with respect to the remaining 25% of its total assets.

CAPITALIZATION AND SHARE CLASSES

to take other actions as provided in the Declaration of Trust. Shares have no
preemptive or subscription rights, and are transferable. Shares are entitled to
dividends as declared by the Trustees, and if a Fund were liquidated, each class
of shares of that Fund would receive the net assets of that Fund attributable to
the class of shares. Because Investor and Advisor Shares are subject to
different expenses, a Fund's dividends and other distributions will normally
differ between the two classes.

ADDITIONAL INFORMATION CONCERNING THE FUNDS' PRINCIPAL INVESTMENT STRATEGIES

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

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

MUNICIPAL BONDS. Municipal bonds are investments of any maturity issued by
states, public authorities or political subdivisions to raise money for public
purposes; they include, for example, general obligations of a state or other
government entity supported by its taxing powers to acquire and construct public
facilities, or to provide temporary financing in anticipation of the receipt of
taxes and other revenue. They also include obligations of states, public
authorities or political subdivisions to finance privately owned or operated
facilities or public facilities financed solely by enterprise revenues. Changes
in law or adverse determinations by the Internal Revenue Service or a state tax
authority could make the income from some of these obligations taxable.

Short-term municipal bonds are generally issued by state and local governments
and public authorities as interim financing in anticipation of tax collections,
revenue receipts or bond sales to finance such public purposes.

Certain types of "private activity" bonds may be issued by public authorities to
finance projects such as privately operated housing facilities; certain local
facilities for supplying water, gas or electricity; sewage or solid waste
disposal facilities; student loans; or public or private institutions for the
construction of educational, hospital, housing and other facilities. Such
obligations are included within the term municipal bonds if the interest paid
thereon is, in the opinion of bond counsel, exempt from federal income tax and
state personal income tax (such interest may, however, be subject to federal
alternative minimum tax). Other types of private activity bonds, the proceeds of
which are used for the construction,

repair or improvement of, or to obtain equipment for, privately operated
industrial or commercial facilities, may also constitute municipal bonds,
although current federal tax laws place substantial limitations on the size of
such issues.

Participation interests. A Fund may invest in municipal bonds either by
purchasing them directly or by purchasing certificates of accrual or similar
instruments evidencing direct ownership of interest payments or principal
payments, or both, on municipal bonds, provided that, in the opinion of counsel,
any discount accruing on a certificate or instrument that is purchased at a
yield not greater than the coupon rate of interest on the related municipal
bonds will be exempt from federal income tax to the same extent as interest on
the municipal bonds. A Fund may also invest in municipal bonds by purchasing
from banks participation interests in all or part of specific holdings of
municipal bonds. These participations may be backed in whole or in part by an
irrevocable letter of credit or guarantee of the selling bank. The selling bank
may receive a fee from a Fund in connection with the arrangement. A Fund will
not purchase such participation interests unless it receives an opinion of
counsel or a ruling of the Internal Revenue Service that interest earned by it
on municipal bonds in which it holds such participation interests is exempt from
federal income tax.

Stand-by commitments. When a Fund purchases municipal bonds, it has the
authority to acquire stand-by commitments from banks and broker-dealers with
respect to those municipal bonds. A stand-by commitment may be considered a
security independent of the municipal bond to which it relates. The amount
payable by a bank or dealer during the time a stand-by commitment is
exercisable, absent unusual circumstances, would be substantially the same as
the market value of the underlying municipal bond to a third party at any time.
It is expected that stand-by commitments generally will be available without the
payment of direct or indirect consideration. It is not expected that a Fund will
assign any value to stand-by commitments.

Yields. The yields on municipal bonds depend on a variety of factors, including
general money market conditions, effective marginal tax rates, the financial
condition of the issuer, general conditions of the municipal bond market, the
size of a particular offering, the maturity of the obligation and the rating of
the issue. The ratings of nationally recognized securities rating agencies
represent their opinions as to the credit quality of the municipal bonds which
they undertake to rate. It should be emphasized, however, that ratings are
general and are not absolute standards of quality. Consequently, municipal bonds
with the same maturity and interest rate but with different ratings may have the
same yield. Yield disparities may occur for reasons not directly related to the
investment quality of particular issues or the general movement of interest
rates and may be due to such factors as changes in the overall demand or supply
of various types of municipal bonds or changes in the investment objectives of
investors. Subsequent to purchase by a Fund, an issue of municipal bonds or
other investments may cease to be rated, or its rating may be reduced below the
minimum rating required for purchase by a Fund. Neither event will require the
elimination of an investment from a Fund's portfolio, but Schroders will
consider such an event in its determination of whether a Fund should continue to
hold an investment in its portfolio.

"Moral obligation" bonds. The Funds do not currently intend to invest in
so-called "moral obligation" bonds, where repayment is backed by a moral
commitment of an entity other than the issuer, unless the credit of the issuer
itself, without regard to the "moral obligation," meets the investment criteria
established for investments by a Fund.

Municipal leases. A Fund may acquire participations in lease obligations or
installment purchase contract obligations (collectively, "lease obligations") of
municipal authorities or entities. Lease obligations do not

constitute general obligations of the municipality for which the municipality's
taxing power is pledged. Certain of these lease obligations contain
"non-appropriation" clauses, which provide that the municipality has no
obligation to make lease or installment purchase payments in future years unless
money is appropriated for such purpose on a yearly basis. In the case of a
"non-appropriation" lease, a Fund's ability to recover under the lease in the
event of non-appropriation or default will be limited solely to the repossession
of the leased property, and in any event, foreclosure of that property might
prove difficult.

Additional risks. Securities in which a Fund may invest, including municipal
bonds, are subject to the provisions of bankruptcy, insolvency and other laws
affecting the rights and remedies of creditors, such as the federal Bankruptcy
Code (including special provisions related to municipalities and other public
entities), and laws, if any, that may be enacted by Congress or state
legislatures extending the time for payment of principal or interest, or both,
or imposing other constraints upon enforcement of such obligations. There is
also the possibility that, as a result of litigation or other conditions, the
power, ability or willingness of issuers to meet their obligations for the
payment of interest and principal on their municipal bonds may be materially
affected.

From time to time, proposals have been introduced before Congress for the
purpose of restricting or eliminating the federal income tax exemption for
interest on debt obligations issued by states and their political subdivisions.
Federal tax laws limit the types and amounts of tax-exempt bonds issuable for
certain purposes, especially industrial development bonds and private activity
bonds. Such limits may affect the future supply and yields of these types of
municipal bonds. Further proposals limiting the issuance of municipal bonds may
well be introduced in the future. If it appeared that the availability of
municipal bonds for investment by a Fund and the value of the Fund's portfolio
could be materially affected by such changes in law, the Trustees would
reevaluate its investment objective and policies and consider changes in the
structure of the Fund or its dissolution.

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

NON-PRINCIPAL INVESTMENTS, INVESTMENT PRACTICES AND RISKS

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

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

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

registration, or in a public offering for which a registration statement is in
effect under the Securities Act of 1933. A Fund may be deemed to be an
"underwriter" for purposes of the Securities Act of 1933 when selling restricted
securities to the public, and in such event the Fund may be liable to purchasers
of such securities if the registration statement prepared by the issuer, or the
prospectus forming a part of it, is materially inaccurate or misleading. The SEC
Staff currently takes the view that any delegation by the Trustees of the
authority to determine that a restricted security is readily marketable (as
described in the investment restrictions of the Funds) must be pursuant to
written procedures established by the Trustees and the Trustees have delegated
such authority to Schroders.

INVERSE FLOATERS. Inverse floaters have variable interest rates that typically
move in the opposite direction from movements in prevailing short-term interest
rate levels -- rising when prevailing short-term interest rate fall, and vice
versa. The prices of inverse floaters can be highly volatile and some inverse
floaters may be "leveraged," resulting in increased risk and potential
volatility. A Fund may use inverse floaters for hedging or investment purposes.
Use of inverse floaters other than for hedging purposes may be considered
speculative.

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

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

LOWER-RATED SECURITIES. A Fund may invest in lower-rated fixed-income securities
(commonly known as "junk bonds"), although normally a Fund will not invest in
securities unless a nationally recognized statistical rating organization (for
example, Moody's Investor Service, Inc., Standard & Poor's Rating Service, or
Fitch Investors Service, Inc.) has rated the securities C (or the equivalent) or
better, or the adviser has determined the securities to be of comparable
quality. The lower ratings of certain securities held by a Fund reflect a
greater possibility that adverse changes in the financial condition of the
issuer or in general economic conditions, or both, or an unanticipated rise in
interest rates, may impair the ability of the issuer to make payments of
interest and principal. The inability (or perceived inability) of issuers to
make timely payment of interest and principal would likely make the values of
securities held by a Fund more volatile and could limit the Fund's ability to
sell its securities at prices approximating the values the Fund had placed on
such securities. In the absence of a liquid trading market for securities held
by it, a Fund at times may be unable to establish the fair value of such
securities.

Securities ratings are based largely on the issuer's historical financial
condition and the rating agencies' analysis at the time of rating. Consequently,
the rating assigned to any particular security is not necessarily a reflection
of the issuer's current financial condition, which may be better or worse than
the rating would indicate. In addition, the rating assigned to a security by
Moody's Investors Service, Inc. or Standard & Poor's (or by any other nationally
recognized securities rating agency) does not reflect an assessment of the
volatility of the security's market value or the liquidity of an investment in
the security.

Like those of other fixed-income securities, the values of lower-rated
securities fluctuate in response to changes in interest rates. A decrease in
interest rates will generally result in an increase in the value of a Fund's
assets. Conversely, during periods of rising interest rates, the value of a
Fund's assets will generally decline. The values of lower-rated securities may
often be affected to a greater extent by changes in general economic conditions
and business conditions affecting the issuers of such securities and their
industries. Negative publicity or investor perceptions may also adversely affect
the values of lower-rated securities. Changes by nationally recognized
securities rating agencies in their ratings of any fixed-income security and
changes in the ability of an issuer to make payments of interest and principal
may also affect the value of these investments. Changes in the value of
portfolio securities generally will not affect income derived from these
securities, but will affect a Fund's net asset value. A Fund will not
necessarily dispose of a security when its rating is reduced below its rating at
the time of purchase. However, Schroders will monitor the investment to
determine whether its retention will assist in meeting the Fund's investment
objective.

At times, a portion of a Fund's assets may be invested in an issue of which the
Fund, by itself or together with other funds and accounts managed by Schroders
or its affiliates, holds all or a major portion. Although Schroders generally
considers such securities to be liquid because of the availability of an
institutional market for such securities, it is possible that, under adverse
market or economic conditions or in the event of adverse changes in the
financial condition of the issuer, the Fund could find it more difficult to sell
these securities when Schroders believes it advisable to do so or may be able to
sell the securities only at prices lower than if they were more widely held.
Under these circumstances, it may also be more difficult to determine the fair
value of such securities for purposes of computing a Fund's net asset value. In
order to enforce its rights in the event of a default, a Fund may be required to
participate in various legal proceedings or take possession of and manage assets
securing the issuer's obligations on such securities. This could increase the
Fund's operating expenses and adversely affect the Fund's net asset value. In
the case of tax-exempt funds, any income derived from the Fund's ownership or
operation of such assets would not be tax-exempt. The ability of a holder of a
tax-exempt security to enforce the terms of that security in a bankruptcy
proceeding may be more limited than would be the case with respect to securities
of private issuers. In addition, a Fund's intention to qualify as a "regulated
investment company" under the Internal Revenue Code may limit the extent to
which the Fund may exercise its rights by taking possession of such assets.

Certain securities held by a Fund may permit the issuer at its option to "call,"
or redeem, its securities. If an issuer were to redeem securities held by a Fund
during a time of declining interest rates, the Fund may not be able to reinvest
the proceeds in securities providing the same investment return as the
securities redeemed.

A Fund may invest without limit in so-called "zero-coupon" bonds and
"payment-in-kind" bonds. Zero-coupon bonds are issued at a significant discount
from their principal amount in lieu of paying interest periodically.
Payment-in-kind bonds allow the issuer, at its option, to make current interest
payments on the bonds either in cash or in additional bonds. Because zero-coupon
and payment-in-kind bonds do not pay current interest in cash, their value is
subject to greater fluctuation in response to changes in market interest rates
than bonds that pay interest currently. Both zero-coupon and payment-in-kind
bonds allow an issuer to avoid the need to generate cash to meet current
interest payments. Accordingly, such bonds may involve greater credit risks than
bonds paying interest currently in cash. A Fund is required to accrue interest
income on such investments and to distribute such amounts at least annually to
shareholders even though such bonds do not pay current interest in cash. Thus,
it may be necessary at times for a Fund to liquidate investments in order to
satisfy its dividend requirements.

To the extent a Fund invests in securities in the lower rating categories, the
achievement of the Fund's goals is more dependent on Schroders' investment
analysis than would be the case if the Fund were investing in securities in the
higher rating categories. This also may be true with respect to tax-exempt
securities, as the amount of information about the financial condition of an
issuer of tax-exempt securities may not be as extensive as that which is made
available by corporations whose securities are publicly traded.

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

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

Loan participations may be structured in different forms, including novations,
assignments and participating interests. In a novation, a Fund assumes all of
the rights of a lending institution in a loan, including the right to receive
payments of principal and interest and other amounts directly from the borrower
and to enforce its rights as a lender directly against the borrower. The Fund
assumes the position of a co-lender with other syndicate members. As an
alternative, a Fund may purchase an assignment of a portion of a lender's
interest in a loan. In this case, the Fund may be required generally to rely
upon the assigning bank to demand payment and enforce its rights against the
borrower, but would otherwise be entitled to all of such bank's rights in the
loan. A Fund may also purchase a participating interest in a portion of the
rights of a lending institution in a loan. In such case, it will be entitled to
receive payments of principal, interest and premium, if any, but will not
generally be entitled to enforce its rights directly against the agent bank or
the borrower, and must rely for that purpose on the lending institution. A Fund
may also acquire a loan participation directly by acting as a member of the
original lending syndicate.

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

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

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

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

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

In some instances, other accounts managed by Schroders may hold other securities
issued by borrowers whose floating rate loans may be held in a Fund's portfolio.
These other securities may include, for example, debt securities that are
subordinate to the floating rate loans held in a Fund's portfolio, convertible
debt or common or preferred equity securities. In certain circumstances, such as
if the credit quality of the issuer deteriorates, the interests of holders of
these other securities may conflict with the interests of the holders of the
issuer's floating rate loans. In such cases, Schroders may owe conflicting
fiduciary duties to a Fund and other client accounts. Schroders will endeavor to
carry out its obligations to all of its clients to the fullest extent possible,
recognizing that in some cases certain clients may achieve a lower economic
return, as a result of these conflicting client interests, than if Schroders'
client accounts collectively held only a single category of the issuer's
securities.

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

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

REPURCHASE AGREEMENTS. A repurchase agreement is a contract under which the Fund
acquires a security for a relatively short period (usually not more than one
week) subject to the obligation of the seller to repurchase and the Fund to
resell such security at a fixed time and price (representing the Fund's cost
plus interest). It is the Trust's present intention to enter into repurchase
agreements only with member banks of the Federal Reserve System and securities
dealers meeting certain criteria as to creditworthiness and financial condition,
and only with respect to obligations of the U.S. Government or its agencies or
instrumentalities or other high quality short-term debt obligations. Repurchase
agreements may also be viewed as loans made by a Fund which are collateralized
by the securities subject to repurchase. Schroders will monitor such
transactions to ensure that the value of the underlying securities will be at
least equal at all times to the total amount of the repurchase obligation,
including the interest factor. If the seller defaults, a Fund could realize a
loss on the sale of the underlying security to the extent that the proceeds of
sale including accrued interest are less than the resale price provided in the
agreement including interest. In addition, if the seller should be involved in
bankruptcy or insolvency proceedings, a Fund may incur delay and costs in
selling the underlying security or may suffer a loss of principal and interest
if a Fund is treated as an unsecured creditor and required to return the
underlying collateral to the seller's estate.

Investments in derivatives may be applied toward meeting a requirement to invest
in a particular kind of investment if the derivatives have economic
characteristics similar to that investment.

The Funds may use these "derivatives" strategies for hedging purposes. The Funds
may also use derivatives to gain exposure to securities or market sectors as a
substitute for cash investments (not for leverage) or pending the sale of
securities by the Funds and reinvestment of the proceeds. For example, the Funds
may seek to obtain market exposure to the securities in which it may invest by
entering into forward contracts or similar arrangements to purchase those
securities in the future. Any use of derivatives strategies entails the risks of
investing directly in the securities or instruments underlying the derivatives
strategies, as well as the risks of using derivatives generally, described in
the Prospectus and in this Statement of Additional Information.

OPTIONS. A Fund may purchase and sell covered put and call options on its
portfolio securities to enhance investment performance and to protect against
changes in market prices.

Covered call options. A Fund may write covered call options on its portfolio
securities to realize a greater current return through the receipt of premiums
than it would realize on its securities alone. Such option transactions may also
be used as a limited form of hedging against a decline in the price of
securities owned by the Fund.

A call option gives the holder the right to purchase, and obligates the writer
to sell, a security at the exercise price at any time before the expiration
date. A call option is "covered" if the writer, at all times while obligated as
a writer, either owns the underlying securities (or comparable securities
satisfying the cover requirements of the securities exchanges), or has the right
to acquire such securities through immediate conversion of securities.

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

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

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

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

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

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

A Fund may also purchase put and call options to enhance its current return. A
Fund may also buy and sell combinations of put and call options on the same
underlying security to earn additional income.

of imperfect market correlations. The successful use of these strategies depends
on the ability of Schroders to forecast market and interest rate movements
correctly.

An exchange-listed option may be closed out only on an exchange which provides a
secondary market for an option of the same series. Although a Fund will enter
into an option position only if Schroders believes that a liquid secondary
market exists, there is no assurance that a liquid secondary market on an
exchange will exist for any particular option or at any particular time. If no
secondary market were to exist, it would be impossible to enter into a closing
transaction to close out an option position. As a result, a Fund may be forced
to continue to hold, or to purchase at a fixed price, a security on which it has
sold an option at a time when Schroders believes it is inadvisable to do so.

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

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

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

FUTURES CONTRACTS. To the extent permitted by the investment restrictions set
forth under "Investment Restrictions" below, by the investment policies
described in the Prospectuses and by applicable law, the Funds may buy and sell
futures contracts, options on futures contracts, and related instruments in
order to hedge against the effects of adverse market changes or to increase
current return. Depending upon the change in the value of the underlying
security or index when a Fund enters into or terminates a futures contract, the
Fund may realize a gain or loss.

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

Positions taken in the futures markets are not normally held to maturity, but
are instead liquidated through offsetting transactions that may result in a
profit or a loss. While futures positions taken by a Fund will usually be
liquidated in this manner, a Fund may instead make or take delivery of the
underlying securities whenever it appears economically advantageous to the Fund
to do so. A clearing corporation associated with the exchange on which futures
are traded assumes responsibility for such closing transactions and guarantees
that a Fund's sale and purchase obligations under closed-out positions will be
performed at the termination of the contract.

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

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

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

Depending on the change in the value of the index between the time when a Fund
enters into and terminates an index futures transaction, the Fund may realize a
gain or loss. The following example illustrates generally the manner in which
index futures contracts operate. The Standard & Poor's 100 Stock Index is
composed of 100 selected common stocks, most of which are listed on the New York
Stock Exchange. The S&P 100 Index assigns relative weightings to the common
stocks included in the Index, and the Index fluctuates with changes in the
market values of those common stocks. In the case of the S&P 100 Index,
contracts are to buy or sell 100 units. Thus, if the value of the S&P 100 Index
were $180, one contract would be worth $18,000 (100 units x $180). The stock
index futures contract specifies that no delivery of the actual stocks making up
the index will take place. Instead, settlement in cash must occur upon the
termination of the contract, with the settlement being the difference between
the contract price and the actual level of the stock index at the expiration of
the contract. For example, if a Fund enters into a futures contract to buy 100
units of the S&P 100 Index at a specified future date at a contract price of
$180 and the S&P 100 Index is at $184 on that future date, the Fund will gain
$400 (100 units x gain of $4). If the Fund enters into a futures contract to
sell 100 units of the stock index at a specified future date at a contract price
of $180 and the S&P 100 Index is at $182 on that future date, the Fund will lose
$200 (100 units x loss of $2).

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

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

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

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

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

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

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

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

between the delivery price of the futures contract and the market price of the
securities underlying the futures contract.

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

SPECIAL RISKS OF TRANSACTIONS IN FUTURES CONTRACTS AND RELATED OPTIONS

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

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

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

markets in general, and as a result the futures markets may attract more
speculators than the securities markets do. Increased participation by
speculators in the futures markets may also cause temporary price distortions.
Due to the possibility of price distortion, even a correct forecast of general
market trends by Schroders may still not result in a successful hedging
transaction over a very short time period.

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

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

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

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

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

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

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

Hybrid instruments may also carry liquidity risk since the instruments are often
"customized" to meet the portfolio needs of a particular investor, and
therefore, the number of investors that are willing and able to buy such
instruments in the secondary market may be smaller than that for more
traditional debt securities. Under certain conditions, the redemption value of
such an investment could be zero. In addition, because the purchase and sale of
hybrid investments could take place in an over-the-counter market without the
guarantee of a central clearing organization, or in a transaction between a Fund
and the issuer of the hybrid instrument, the creditworthiness of the
counterparty of the issuer of the hybrid instrument would be an additional risk
factor a Fund would have to consider and monitor. Hybrid instruments also may
not be subject to regulation by the CFTC, which generally regulates the trading
of commodity futures by U.S. persons, the Securities and Exchange Commission
(the "SEC"), which regulates the offer and sale of securities by and to U.S.
persons, or any other governmental regulatory authority.

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

INVESTMENT RESTRICTIONS

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

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

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

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

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

(ii) purchase any security (other than securities of the U.S.
Government, its agencies or instrumentalities or municipal bonds
backed by any of the assets and revenues of non-governmental
issuers) if as a result 25% or more of the Fund's total assets
(taken at current value) would be invested in a single industry;

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

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

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

----------

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

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

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

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

DISCLOSURE OF PORTFOLIO HOLDINGS

Through filings made with the SEC on Form N-CSR and Form N-Q, each of the Funds
makes its full portfolio holdings publicly available to shareholders on a
quarterly basis. Each Fund normally makes such filings on or shortly after the
sixtieth day following the end of a fiscal quarter. Each Fund delivers its
complete portfolio schedules for the second and fourth fiscal quarters, required
to be filed on Form N-CSR, to shareholders in the Funds' semi-annual and annual
reports. The Funds do not deliver their complete portfolio schedules for the
first and third fiscal quarters, required to be filed on Form N-Q, to
shareholders, but these schedules are available on the SEC website at
www.sec.gov.

in place over a period of time, to make available information about the
securities in a Fund's portfolio and with respect to disclosure on a one-time,
irregular basis. These procedures provide that neither Schroders nor the Funds
receive any compensation in return for the disclosure of information about a
Fund's portfolio securities or for any ongoing arrangements to make available
information about a Fund's portfolio securities. Portfolio holdings may be
disclosed to certain third parties in advance of quarterly filings by the Funds
with the SEC. In each instance of such advance disclosure, a determination will
have been made by Schroders that such disclosure is supported by a legitimate
business purpose of the relevant Fund and that the recipients, except as
described below, are subject to an independent duty not to disclose (whether
contractually or as a matter of law) or trade on the nonpublic information. The
Funds currently disclose nonpublic portfolio holdings information only to
recipients who have agreed with Schroders to keep such information confidential.
In the future, where Schroders does not believe that the risk of disclosure is
material, a Fund may disclose information to recipients who do not have an
independent duty not to disclose the nonpublic information and are not party to
a confidentiality agreement. Any inappropriate use of such information by the
recipient could be harmful to the Fund and its shareholders. The Funds have no
ongoing arrangements to make available nonpublic portfolio holdings information,
except as described in the procedures below. Nonpublic portfolio holdings
information is disclosed by a Fund's portfolio management team, except in cases
where the information is disclosed by other personnel or agents of the Funds, as
described below. The following list describes the circumstances in which the
Fund discloses its portfolio holdings to selected third parties:

Ranking/Rating Agencies. Morningstar, Lipper, Thomson and Bloomberg receive the
Funds' full portfolio holdings no earlier than 60 calendar days following the
end of each calendar quarter.

MANAGEMENT OF THE TRUST

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

DISINTERESTED TRUSTEES

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

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

Peter E. Guernsey, 84 Trustee Indefinite Trustee of the Trust and 9 None
875 Third Avenue, 22nd Fl. Since 1993 Schroder Capital Funds
New York, NY 10022 (Delaware). Retired.
Formerly, Senior Vice
President, Marsh &
McLennan, Inc. (insurance
services).

John I. Howell, 89 Trustee Indefinite Trustee and Lead 10 American Life Assurance Co.
875 Third Avenue, 22nd Fl. Since 1993 Disinterested Trustee of of New York; United States
New York, NY 10022 the Trust, Schroder Life Insurance Co. of the
Capital Funds (Delaware) City of New York; First
and Schroder Global SunAmerica Life Insurance Co.
Series Trust; Private
Consultant, Indian Rock
Corporation (individual
accounting).

Peter S. Knight, 55 Trustee Indefinite Trustee of the Trust, 10 Medicis; PAR Pharmaceuticals;
875 Third Avenue, 22nd Fl. Since 1993 Schroder Capital Funds Entremed
New York, NY 10022 (Delaware) and Schroder
Global Series Trust;
Director, Schroder
Japanese Long/Short Fund;
Director, Schroder Credit
Renaissance Fund, LP;
Director, Schroder
Alternative Strategies
Fund; President,
Generation Investment
Management U.S. Formerly,
Managing Director,
MetWest Financial
(financial services);
President, Sage Venture
Partners (investing); and
Partner, Wunder, Knight,
Forcsey & DeVierno (law
firm).

William L. Means, 69 Trustee Indefinite Trustee of the Trust and 9 None
875 Third Avenue, 22nd Fl. Since 1997 Schroder Capital Funds
New York, NY 10022 (Delaware). Retired.

Clarence F. Michalis, 84 Trustee Indefinite Trustee of the Trust, 10 None
875 Third Avenue, 22nd Fl. Since 1993 Schroder Capital Funds
New York, NY 10022 (Delaware) and Schroder
Global Series Trust.
Retired. Formerly,
Chairman of the Board of
Directors, Josiah Macy,
Jr., Foundation.

Hermann C. Schwab, 86 Trustee Indefinite Trustee of the Trust and 9 None
875 Third Avenue, 22nd Fl. Since 1993 Schroder Capital Funds
New York, NY 10022 (Delaware). Retired.
Formerly, consultant to
Schroder

Capital Management
International, Inc.

James D. Vaughn, 60 Trustee Indefinite Trustee and Chairman of 10 AMG National Trust Bank
875 Third Avenue, 22nd Fl. Since 2003 the Audit Committee of
New York, New York 10022 the Trust, Schroder
Capital Funds (Delaware)
and Schroder Global
Series Trust. Retired.
Formerly, Managing
Partner, Deloitte &
Touche USA, LLP-Denver.

INTERESTED TRUSTEES

The following table sets forth certain information concerning a Trustee who is
an "interested person" (as defined in the Investment Company Act) of the Trust
(an "Interested Trustee").

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

Peter L. Clark, 41* Trustee and Indefinite Trustee and Chairman of 9 None
875 Third Avenue, 22nd Fl. Chairman Since 2003 the Trust and Schroder
New York, NY 10022 Capital Funds (Delaware);
Chief Executive Officer,
Schroders. Formerly,
Managing Director and
Head of Emerging Markets,
JP Morgan/JP Morgan
Investment Management;
Vice President and Head
of Proprietary Trading,
JP Morgan.

* Mr. Clark is an Interested Trustee due to his status as an officer and
employee of Schroder Investment Management North America Inc. and its
affiliates.

OFFICERS

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

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

Peter L. Clark, 41 Trustee and Indefinite Trustee and Chairman of the Trust
875 Third Avenue, 22nd Fl. Chairman Since 2003 and Schroder Capital Funds
New York, NY 10022 (Delaware); Director and Chief
Executive Officer, Schroders.
Formerly, Managing Director and
Head of Emerging Markets, JP
Morgan/JP Morgan Investment

Management; Vice President and Head
of Proprietary Trading, JP Morgan.

Mark A. Hemenetz, 49 President Indefinite Chief Operating Officer, Director
875 Third Avenue, 22nd Fl. and Since May 2004 and Executive Vice President,
New York, NY 10022 Principal Schroders; Chairman and Director,
Executive Schroder Fund Advisors Inc.;
Officer President and Principal Executive
Officer of the Trust, Schroder
Capital Funds (Delaware) and
Schroder Global Series Trust.
Formerly, Executive Vice President
and Director of Investment
Management, Bank of New York.

Alan M. Mandel, 48 Treasurer Indefinite First Vice President, Schroders;
875 Third Avenue, 22nd Fl. and Chief Since May 2003 Chief Operating Officer, Treasurer
New York, NY 10022 Financial and Director, Schroder Fund
Officer Advisors Inc.; Treasurer and Chief
Financial Officer, the Trust,
Schroder Global Series Trust and
Schroder Capital Funds (Delaware).

Carin F. Muhlbaum, 43 Executive Indefinite Senior Vice President, General
875 Third Avenue, 22nd Fl. Vice Vice President since 1998; Counsel, and Chief Administrative
New York, NY 10022 President Clerk Officer, Schroders; Director,
and Clerk since 2001 Senior Vice President, Secretary
and General Counsel, Schroder Fund
Advisors Inc.; Executive Vice
President and Secretary/Clerk, the
Trust, Schroder Global Series Trust
and Schroder Capital Funds
(Delaware).

Stephen M. DeTore, 54 Chief Indefinite Senior Vice President, Director and
875 Third Avenue, 22nd Fl. Compliance Since 2005 Chief Compliance Officer,
New York, NY 10022 Officer Schroders; Senior Vice President
and Director, Schroder Fund
Advisors Inc.; Chief Compliance
Officer, the Trust, Schroder
Capital Funds (Delaware) and
Schroder Global Series Trust.
Formerly, Deputy General Counsel,
Gabelli Asset Management Inc.;
Associate General Counsel, Gabelli
Asset Management, Inc.; Assistant
Director, Office of Examination
Support, U.S. Securities and
Exchange Commission.

Angel Lanier, 43 Assistant Indefinite Assistant Vice President,
875 Third Avenue, 22nd Fl. Secretary Since 2005 Schroders; Assistant Vice
New York, NY 10022 President, Schroder Fund Advisors
Inc.; Assistant Secretary of the
Trust, Schroder Capital Funds
(Delaware) and Schroder Global
Series Trust. Formerly, Associate,
Schroders.

CERTAIN AFFILIATIONS

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

Morgan/JP Morgan Investment Management; Vice President and
Head of Proprietary Trading, JP Morgan.

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

COMMITTEES OF THE BOARD OF TRUSTEES

Audit Committee. The Board of Trustees has an Audit Committee composed of all of
the Disinterested Trustees (Messrs. Dinkins, Guernsey, Howell, Knight, Means,
Michalis, Schwab and Vaughn). The Audit Committee provides oversight with
respect to the internal and external accounting and auditing procedures of the
Funds and, among other things, considers the selection of independent public
accountants for the Funds and the scope of the audit, approves all audit and
permitted non-audit services proposed to be performed by those accountants on
behalf of the Funds, and considers other services provided by those accountants
to the Funds and Schroders and its affiliates and the possible effect of those
services on the independence of those accountants. The Audit Committee met four
times during the fiscal year ended October 31, 2005.

SECURITIES OWNERSHIP

For each Trustee, the following table discloses the dollar range of equity
securities beneficially owned by the Trustee, on an aggregate basis, in any
registered investment companies overseen by the Trustee within the Schroders
family of investment companies, as of December 31, 2005.

AGGREGATE DOLLAR RANGE
OF EQUITY SECURITIES
IN ALL REGISTERED
DOLLAR RANGE OF INVESTMENT COMPANIES
EQUITY OVERSEEN BY TRUSTEE IN
SECURITIES IN FAMILY OF INVESTMENT
NAME OF TRUSTEE FUND THE FUNDS COMPANIES*
---------------------- --------------------------------------- --------------- ----------------------

Ranges: Ranges:
None None
$1-$10,000 $1-$10,000
$10,001- $10,001-$50,000
$50,000 $50,001-$100,000
$50,001- Over $100,000
$100,000
Over $100,000
DISINTERESTED TRUSTEES
DAVID N. DINKINS $50,001-$100,000
Schroder Municipal Bond Fund None
Schroder Short-Term Municipal Bond Fund None
PETER E. GUERNSEY None
Schroder Municipal Bond Fund None
Schroder Short-Term Municipal Bond Fund None
JOHN I. HOWELL $10,001-$50,000
Schroder Municipal Bond Fund None
Schroder Short-Term Municipal Bond Fund None
PETER S. KNIGHT None
Schroder Municipal Bond Fund None
Schroder Short-Term Municipal Bond Fund None
WILLIAM L. MEANS $1 - $10,000
Schroder Municipal Bond Fund None
Schroder Short-Term Municipal Bond Fund None
CLARENCE F. MICHALIS Over $100,000
Schroder Municipal Bond Fund None
Schroder Short-Term Municipal Bond Fund None
HERMANN C. SCHWAB None
Schroder Municipal Bond Fund None

Schroder Short-Term Municipal Bond Fund None
JAMES D. VAUGHN Over $100,000
Schroder Municipal Bond Fund None
Schroder Short-Term Municipal Bond Fund None
INTERESTED TRUSTEES
PETER L. CLARK $10,001-$50,000
Schroder Municipal Bond Fund None
Schroder Short-Term Municipal Bond Fund None

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

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

TRUSTEES' COMPENSATION

AGGREGATE TOTAL COMPENSATION
COMPENSATION FROM TRUST AND FUND
NAME OF TRUSTEE FROM TRUST COMPLEX PAID TO TRUSTEES*
-------------------- ------------ -------------------------
David N. Dinkins $12,615 $20,080
Peter E. Guernsey $12,615 $20,080
John I. Howell $ 5,091 $20,080
Peter S. Knight $ 4,591 $17,750
William L. Means $12,565 $20,000
Clarence F. Michalis $ 5,091 $20,080
Hermann C. Schwab $12,615 $20,080
James D. Vaughn $ 5,040 $20,000

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

SCHRODERS AND ITS AFFILIATES

Schroders serves as the investment adviser for the Funds. Schroders is a wholly
owned subsidiary of Schroder U.S. Holdings Inc., which currently engages through
its subsidiary firms in the asset management business. Affiliates of Schroder
U.S. Holdings Inc. (or their predecessors) have been investment managers since
1927. Schroder U.S. Holdings Inc. is a wholly owned subsidiary of Schroder
International Holdings, which is a wholly owned subsidiary of Schroders plc, a
publicly owned holding company organized under the laws of England. Schroders
plc and its affiliates currently engage in the asset management business, and as
of December 31, 2005, had under management assets of approximately $201 billion.
Schroders' address is 875 Third Avenue, 22nd Floor, New York, New York 10022.

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

PORTFOLIO MANAGERS

The portfolio managers primarily responsible for making investment decisions for
the Funds are David Baldt, Daniel Scholl, Susan Beck, and Ted Manges.

OTHER ACCOUNTS MANAGED. The following tables show information regarding other
accounts managed by the portfolio managers of each Fund, as of October 31, 2005:

NUMBER OF TOTAL ASSETS IN
ACCOUNTS WHERE ACCOUNTS WHERE
ADVISORY FEE IS ADVISORY FEE IS
NUMBER OF TOTAL ASSETS IN BASED ON ACCOUNT BASED ON ACCOUNT
ACCOUNTS ACCOUNTS PERFORMANCE PERFORMANCE
--------- --------------- ---------------- ----------------

SCHRODER SHORTTERM MUNICIPAL BOND FUND
DAVID BALDT
Registered Investment Companies 3 $625.9 million None None
Other Pooled Investment Vehicles 1 $75 million None None
Other Accounts 219 $2.398 billion None None
DANIEL SCHOLL
Registered Investment Companies 3 $625.9 million None None
Other Pooled Investment Vehicles 1 $75 million None None
Other Accounts 219 $2.398 billion None None
SUSAN BECK
Registered Investment Companies 3 $625.9 million None None
Other Pooled Investment Vehicles 1 $75 million None None
Other Accounts 219 $2.398 billion None None
TED MANGES
Registered Investment Companies 3 $625.9 million None None
Other Pooled Investment Vehicles 1 $75 million None None
Other Accounts 219 $2.398 billion None None
SCHRODER MUNICIPAL BOND FUND
DAVID BALDT
Registered Investment Companies 3 $649.5 milion None None
Other Pooled Investment Vehicles 1 $75 million None None
Other Accounts 219 $2.398 billion None None
DANIEL SCHOLL

Registered Investment Companies 3 $649.5 milion None None
Other Pooled Investment Vehicles 1 $75 million None None
Other Accounts 219 $2.398 billion None None
SUSAN BECK
Registered Investment Companies 3 $649.5 milion None None
Other Pooled Investment Vehicles 1 $75 million None None
Other Accounts 219 $2.398 billion None None
TED MANGES
Registered Investment Companies 3 $649.5 milion None None
Other Pooled Investment Vehicles 1 $75 million None None
Other Accounts 219 $2.398 billion None None

Each portfolio manager may also execute transactions for another fund or account
at the direction of such fund or account that may adversely impact the value of
securities held by a Fund. Securities selected for funds or accounts other than
such Fund may outperform the securities selected for the Fund. Finally, if the
portfolio manager identifies a limited investment opportunity that may be
suitable for more than one fund or other account, a Fund may not be able to take
full advantage of that opportunity due to an allocation of that opportunity
across all eligible funds and accounts. Schroders' policies, however, require
that portfolio managers allocate investment opportunities among accounts managed
by them in an equitable manner over time. See "Brokerage Allocation and Other
Practices" for more information about this process.

The structure of a portfolio manager's compensation may give rise to potential
conflicts of interest. A portfolio manager's base pay tends to increase with
additional and more complex responsibilities that include increased assets under
management, which indirectly links compensation to sales. Also, potential
conflicts of interest may arise since the structure of Schroders' compensation
may vary from account to account.

Schroders has adopted certain compliance procedures that are designed to address
these, and other, types of conflicts. However, there is no guarantee that such
procedures will detect each and every situation where a conflict arises.

Each portfolio manager's bonus is based in part on performance. Discretionary
bonuses for portfolio managers are determined by a number of factors. At a macro
level the total amount available to spend is a function of the compensation to
revenue ratio achieved by Schroders globally. Schroders then assesses the
performance of the division and of a management team to determine the share of
the aggregate bonus pool that is spent in each area. This focus on "team"
maintains consistency and minimizes internal competition that may be detrimental
to the interests of Schroders' clients. For each team, Schroders assesses the
performance of their funds relative to competitors and to relevant benchmarks
over one and three year periods, the level of funds under management and the
level of performance fees generated. Performance is evaluated for each quarter,
year and since inception of the Fund. The portfolio managers' compensation for
other accounts they manage is not based upon account performance.

Schroders also reviews "softer" factors such as leadership, innovation,
contribution to other parts of the business and adherence to corporate values of
excellence, integrity, teamwork, passion and innovation. An employee's bonus is
paid in a combination of cash and Schroders plc stock, as determined by
Schroders. This stock vests over a period of three years and ensures that the
interests of the employee are aligned with those of shareholders of Schroders.

OWNERSHIP OF SECURITIES. As of October 31, 2005, Mr. Scholl beneficially owned
the following dollar range of equity securities in the Funds: Schroder Municipal
Bond Fund - $10,001-$50,000; and Schroder Short-Term Municipal Bond Fund -
$1-$10,000. As of October 31, 2005, Ms. Beck beneficially owned the following
dollar range of equity securities in the Funds: Schroder Municipal Bond Fund -
$10,001-$50,000; and Schroder Short-Term Municipal Bond Fund - $10,001-$50,000.
As of October 31, 2005, Mr. Baldt and Mr. Manges did not beneficially own any
securities of the Funds.

MANAGEMENT CONTRACT

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

Under the Management Contract, Schroders is required to continuously furnish the
Funds investment programs consistent with the investment objective and policies
of each Fund, and to determine, for each Fund, what securities shall be
purchased, what securities shall be held or sold, and what portion of the Fund's
assets shall be held uninvested, subject always to the provisions of the Trust's
Declaration of Trust and By-laws, and of the Investment Company Act, and to the
Fund's investment objective, policies, and restrictions, and subject further to
such policies and instructions as the Trustees may from time to time establish.
As compensation for services provided to the Fund pursuant to the Management
Contract, Schroders is entitled to receive from the Trust a fee, computed and
paid monthly, at the annual rate of 0.40% of each Fund's average daily net
assets.

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

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

Recent Investment Advisory Fees. For its fiscal years ended October 31, 2005 and
October 31, 2004, pursuant to the Management Contract, each Fund paid fees to
Schroders as follows (reflecting reductions in such fees pursuant to expense
limitations and/or waivers in effect during the period):

INVESTMENT ADVISORY INVESTMENT ADVISORY
FEES PAID FOR FISCAL FEES PAID FOR FISCAL
YEAR ENDED 10/31/05 YEAR ENDED 10/31/04
-------------------- --------------------
Schroder Municipal Bond Fund $ 16,254 $0
Schroder Short-Term Municipal Bond
Fund $102,113 $0

WAIVED FEES. For the periods shown above, a portion of the advisory fees
payable to Schroders were waived in the following amounts pursuant to expense
limitations and/or fee waivers observed by Schroders for the noted Fund during
such periods.

FEES WAIVED DURING FEES WAIVED DURING
FISCAL YEAR ENDED FISCAL YEAR ENDED
FUND 10/31/05 10/31/04
---------------------------------- ------------------ -------------------
Schroder Municipal Bond Fund $290,954 $273,781
Schroder Short-Term Municipal Bond
Fund $313,748 $353,873

ADMINISTRATIVE SERVICES

On behalf of each Fund, the Trust has entered into an administration and
accounting agreement with SEI Investments Global Fund Services ("SEI"), under
which SEI provides administrative services necessary for the operation of each
Fund, including recordkeeping, preparation of shareholder communications,
assistance with regulatory compliance (such as reports to and filings with the
Securities and Exchange Commission and state securities commissions),
preparation and filing of tax returns, preparation of the Trust's periodic
financial reports, and certain other fund accounting services. Effective
November 1, 2004, under agreements with SEI, the Trust and Schroder Capital
Funds (Delaware) pay fees to SEI based on the combined average daily net assets
of all the funds that are series of the Trust and Schroder Capital Funds
(Delaware) according to the following annual rates: 0.115% on the first $600
million of such assets, 0.11% on the next $400 million of such assets, 0.09% on
the next $1 billion of such assets and 0.07% on assets in excess of $2 billion.
Each Fund pays its pro rata portion of such expenses. Prior to November 1, 2004,
the Trust and Schroder Capital Funds (Delaware) paid fees to SEI based on the
combined average daily net assets of all of their funds, according to the
following annual rates: 0.15% on the first $300 million of such assets, and
0.12% on such assets in excess of $300 million, subject to certain minimum
charges. Each Fund pays its pro rata portion of such expenses. The agreement is
terminable with respect to the Funds without penalty, at any time, by the
Trustees upon six (6) months' written notice to SEI or by SEI upon six (6)
months' written notice to the Trust. The agreement is terminable by either party
upon a material breach by the other party, provided that the terminating party
has provided 45 days' notice of such material breach and the specified date of
termination and the breaching party has not remedied the breach by the specified
termination date.

Administrative service fees. For the last two fiscal years (since the Funds'
inception) the Funds paid the following fees to SEI as compensation for SEI's
services as administrator. Prior to January 4, 2004, SEI served as
sub-administrator to the Funds; Schroder Fund Advisors Inc. served as
administrator, for which service Schroder Fund Advisors Inc. received no
compensation from the Funds.

ADMINISTRATION FEES ADMINISTRATION FEES
PAID FOR FISCAL YEAR PAID FOR FISCAL YEAR
FUND ENDED 10/31/05 ENDED 10/31/04
--------------------------------------- -------------------- --------------------

Schroder Municipal Bond Fund $ 97,748 $ 70,780
Schroder Short-Term Municipal Bond Fund $133,840 $106,216

DISTRIBUTOR

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

the distribution of the Fund's shares. Under the Plan, a Fund may make payments
at an annual rate up to 0.25% of the average daily net assets attributable to
its Advisor Shares. Because the fees are paid out of a Fund's assets on a
ongoing basis, over time these fees will increase the cost of an investment in
Advisor Shares of a Fund and may cost an investor more than paying other types
of sales charges.

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

During the fiscal periods ended October 31, 2005 and October 31, 2004, the Funds
(in respect of their Advisor Shares) paid fees under the Distribution Plans in
the following amounts:

FISCAL YEAR ENDED OCTOBER 31, FISCAL YEAR ENDED OCTOBER 31,
2005 2004
----------------------------- -----------------------------

Schroder Municipal Bond Fund $10,172 $1,791
Schroder Short-Term Municipal Bond Fund $ 5,655 $2,269

BROKERAGE ALLOCATION AND OTHER PRACTICES

Schroders, in selecting brokers to reflect transactions on behalf of the Funds,
generally seeks to obtain the best execution available.

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

There is generally no stated commission in the case of securities traded in the
over-the-counter markets, but the price paid by the Trust usually includes an
undisclosed dealer commission or mark-up. In underwritten offerings, the price
paid by the Trust includes a disclosed, fixed commission or discount retained by
the underwriter or dealer.

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

DETERMINATION OF NET ASSET VALUE

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

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

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

Long-term corporate bonds and notes, certain preferred stocks, tax-exempt
securities and certain foreign securities may be stated at fair value on the
basis of valuations furnished by pricing services approved by the Trustees,
which determine valuations for normal, institutional-size trading units of such
securities

using methods based on market transactions for comparable securities (or, when
such prices for such securities are not available - for example, on a day when
bond markets are closed - based on other factors that may be indicative of the
securities' values).

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

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

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

ARRANGEMENTS PERMITTING FREQUENT PURCHASES AND REDEMPTIONS OF FUND SHARES

The Funds have no arrangements with any person to permit frequent purchases and
redemptions of the Funds' shares.

TAXES

The following discussion of U.S. federal income tax consequences is based on the
Internal Revenue Code of 1986, as amended ("the Code"), existing U.S. Treasury
regulations, and other applicable authority, as of the date of this SAI. These
authorities are subject to change by legislative or administrative action,
possibly with retroactive effect. The following discussion is only a summary of
some of the important U.S. federal tax considerations generally applicable to
investments in the Funds. It does not address special tax rules applicable to
certain classes of investors, such as, among others, IRAs and other retirement
plans, tax-exempt entities, foreign investors, insurance companies, financial
institutions and investors making in-kind contributions to the Funds. You should
consult your tax advisor for more information about your own tax situation,
including possible other federal, state, local, and, where applicable, foreign
tax consequences of investing in the Funds.

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

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

In order to qualify as a RIC a Fund must, among other things, (a) derive at
least 90% of its gross income from dividends, interest, payments with respect to
securities loans, gains from the sale or other disposition of stock, securities,
or foreign currencies, and other income (including gains from options, futures,
or forward contracts) derived with respect to its business of investing in such
stock, securities, or currencies; (b) diversify its holdings so that, at the
close of each quarter of its taxable year, (i) at least 50% of the value of its
total assets consists of cash, cash items, U.S. Government securities,
securities of other RICs and other securities limited generally with respect to
any one issuer to not more than 5% of the value of the total assets of the Fund
and not more than 10% of the outstanding voting securities of such issuer, and
(ii) not more than 25% of the value of its assets is invested in (x) the
securities of any one issuer (other than the U.S. Government or other RICs) or
of two or more issuers which the Fund controls and which are engaged in the
same, similar or related trades and businesses or (y) the securities of one or
more qualified publicly traded partnerships (as defined below); and (c)
distribute with respect to each taxable year at least 90% of the sum of its
investment company taxable income (as that term is defined in the Code without
regard to the deduction for dividends paid - generally, taxable ordinary income
and the excess, if any, of net short-term capital gains over net long-term
capital losses) and net tax-exempt interest income, for such year. Each Fund
intends to make such distributions.

100% of the net income derived from an interest in a "qualified publicly traded
partnership" (defined as a partnership (i) interests in which are traded on an
established securities market or readily tradable on a secondary market or the
substantial equivalent thereof and (ii) that derives less than 90% of its income
from the qualifying income described in paragraph (a) above) will be treated as
qualifying income. In addition, although in general the passive loss rules of
the Code do not apply to regulated investment companies, such rules do apply to
a regulated investment company with respect to items attributable to an interest
in a qualified publicly traded partnership. Finally, for purposes of paragraph
(b) above, the term "outstanding voting securities of such issuer" will include
the equity securities of a qualified publicly traded partnership.

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

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

TAXABLE DISTRIBUTIONS. For federal income tax purposes, distributions of
investment income (other than exempt-interest dividends, as described below) are
taxed to shareholders as ordinary income. Taxes on distributions of capital
gains are determined by how long your Fund owned the investments that generated
the gains, rather than how long you owned your shares. Distributions of net
capital gains from the sale of investments that a Fund has held for more than
one year and that are properly designated by the Fund as capital gain dividends
will be taxable as long-term capital gains. Distributions of gains from the sale
of investments that the Fund owned for one year or less will be taxable as
ordinary income. For taxable years beginning before January 1, 2009,
distributions of investment income designated by a Fund as derived from
"qualified dividend income" will be taxed in the hands of individual
shareholders at the rates applicable to long-term capital gain, provided holding
period and other requirements are met at both the shareholder and Fund level.
The Funds do receive interest, rather than dividends, from its portfolio
holdings. As a result, they do not expect any significant portion of their
distributions to be derived from qualified dividend income.

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

Long-term capital gain rates applicable to individuals have been temporarily
reduced - in general, to 15%, with lower rates applying to taxpayers in the 10%
and 15% rate brackets - for taxable years beginning before January 1, 2009.

EXEMPT-INTEREST DIVIDENDS. A Fund will qualify to pay exempt-interest dividends
to shareholders only if, at the close of each quarter of the Fund's taxable
year, at least 50% of the total value of the Fund's assets consists of
obligations the interest on which is exempt from federal income tax.
Distributions that a Fund properly designates as exempt-interest dividends are
treated as interest excludable from shareholders' gross income for federal
income tax purposes but may be taxable for federal alternative minimum tax
("AMT") purposes and for state and local purposes. Because the Funds intend to
qualify to pay exempt-interest dividends, the Funds may be limited in their
ability to enter into taxable transactions involving forward commitments,
repurchase agreements, financial futures and options contracts on financial
futures, tax-exempt bond indices and other assets.

Under the Code, interest on certain "private activity bonds" issued after August
7, 1986 is treated as a preference item and is (after reduction by applicable
expenses) included in federal alternative minimum taxable income. In addition,
for corporations, alternative minimum taxable income is increased by a
percentage of the excess of an alternative measure of income that includes
interest on all tax-exempt securities over the amount otherwise determined to be
alternative minimum taxable income. Accordingly, a portion of the Funds'
dividends that would otherwise be tax-exempt to the shareholders may cause an
investor to be subject to the federal AMT or may increase the liability of an
investor who is subject to such tax. The receipt of exempt-interest dividends
may affect the portion, if any, of a shareholder's Social Security and Railroad
Retirement benefits that will be includable in gross income subject to federal
income tax. Shareholders receiving Social Security or Railroad Retirement
benefits should consult their tax advisers.

Part or all of the interest on indebtedness, if any, incurred or continued by a
shareholder to purchase or carry shares of a Fund paying exempt-interest
dividends is not deductible. The portion of interest that is not deductible is
equal to the total interest paid or accrued on the indebtedness, multiplied by
the percentage of the Fund's total distributions (not including distributions
from net long-term capital gains) paid to the shareholder that are
exempt-interest dividends. Under rules used by the Internal Revenue Service to
determine when borrowed funds are considered used for the purpose of purchasing
or carrying particular assets, the purchase of shares may be considered to have
been made with borrowed funds even though such funds are not directly traceable
to the purchase of shares.

In general, exempt-interest dividends, if any, attributable to interest received
on certain private activity obligations and certain industrial development bonds
will not be tax-exempt to any shareholders who are "substantial users" of the
facilities financed by such obligations or bonds or who are "related persons" of
such substantial users.

The exemption from federal income tax for exempt-interest dividends does not
necessarily result in exemption for such dividends under the income or other tax
laws of any state or local authority.

TRANSACTIONS IN FUND SHARES. The sale, exchange or redemption of Fund shares may
give rise to a gain or loss. In general, any gain or loss realized upon such a
taxable disposition of shares will be treated as long-term capital gain or loss
if the shares have been held for more than 12 months. Otherwise the gain or loss
on the sale, exchange or redemption of Fund shares will be treated as short-term
capital gain or loss. However, if a shareholder sells shares at a loss within
six months of purchase, any loss will be disallowed for federal income tax
purposes to the extent of any exempt-interest dividends received on such shares.
In addition, any loss (not already disallowed as provided in the preceding
sentence) realized upon a taxable disposition of shares held for six months or
less will be treated as long-term, rather than short-term, to the extent of any
amounts treated as distributions from a Fund of long-term capital gain

with respect to the shares during the six-month period. All or a portion of any
loss realized upon a taxable disposition of Fund shares will be disallowed if
other shares of a Fund are purchased within 30 days before or after the
disposition. In such a case, the basis of the newly purchased shares will be
adjusted to reflect the disallowed loss.

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

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

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

NON-U.S. SHAREHOLDERS. In general, dividends (other than capital gain dividends)
paid by a Fund to a shareholder that is not a "U.S. person" within the meaning
of the Code (a "foreign person") are subject to withholding of U.S. federal
income tax at a rate of 30% (or lower applicable treaty rate) even if they are
funded by income or gains (such as portfolio interest, short-term capital gains,
or foreign-source dividend and interest income) that, if paid to a foreign
person directly, would not be subject to withholding. However, under the 2004
Act, effective for taxable years of a fund beginning after December 31, 2004 and
before January 1, 2008, a Fund will not be required to withhold any amounts (i)
with respect to distributions (other than distributions to a foreign person (w)
that has not provided a satisfactory statement that the beneficial owner is not
a U.S. person, (x) to the extent that the dividend is attributable to certain
interest on an obligation if the foreign person is the issuer or is a 10%
shareholder of the issuer,

(y) that is within certain foreign countries that have inadequate information
exchange with the United States, or (z) to the extent the dividend is
attributable to interest paid by a person that is a related person of the
foreign person and the foreign person is a controlled foreign corporation) from
U.S.-source interest income that would not be subject to U.S. federal income tax
if earned directly by an individual foreign person, to the extent such
distributions are properly designated by a Fund (an "interest-related
dividend"), and (ii) with respect to distributions (other than distributions to
an individual foreign person who is present in the United States for a period or
periods aggregating 183 days or more during the year of the distribution) of net
short-term capital gains in excess of net long-term capital losses, to the
extent such distributions are properly designated by a Fund (a "short-term
capital gain dividend"). A Fund may opt not to designate dividends as
interest-related dividends or short-term capital gain dividends to the full
extent permitted by the Code. In addition, as indicated above, capital gain
dividends will not be subject to withholding of U.S. federal income tax.

If a beneficial holder who is a foreign person has a trade or business in the
United States, and the dividends are effectively connected with the conduct by
the beneficial holder of a trade or business in the United States, the dividend
will be subject to U.S. federal net income taxation at regular income tax rates.

The 2004 Act modifies the tax treatment of distributions from a Fund that are
paid to a foreign person and are attributable to gain from "U.S. real property
interests" ("USRPIs"), which the Code defines to include direct holdings of U.S.
real property and interests (other than solely as a creditor) in "U.S. real
property holding corporations" such as REITs. The Code deems any corporation
that holds (or held during the previous five-year period) USRPIs with a fair
market value equal to 50% or more of the fair market value of the corporation's
U.S. and foreign real property assets and other assets used or held for use in a
trade or business to be a U.S. real property holding corporation; however, if
any class of stock of a corporation is traded on an established securities
market, stock of such class shall be treated as a USRPI only in the case of a
person who holds more than 5% of such class of stock at any time during the
previous five-year period. Under the 2004 Act, which is generally effective for
taxable years of RICs beginning after December 31, 2004 and which applies to
dividends paid or deemed paid on or before December 31, 2007, distributions to
foreign persons attributable to gains from the sale or exchange of USRPIs (a
"FIRPTA Distribution") will give rise to an obligation for those foreign persons
to file a U.S. tax return and pay tax, and may well be subject to withholding
under future regulations.

Under U.S. federal tax law, a beneficial holder of shares who is a foreign
person is not, in general, subject to U.S. federal income tax on gains (and is
not allowed a deduction for losses) realized on the sale of shares of a Fund or
on capital gain dividends unless (i) such gain or capital gain dividend is
effectively connected with the conduct of a trade or business carried on by such
holder within the United States, (ii) in the case of an individual holder, the
holder is present in the United States for a period or periods aggregating 183
days or more during the year of the sale or capital gain dividend and certain
other conditions are met, or (iii) the shares constitute USRPIs or (effective
for taxable years of a Fund beginning after December 31, 2004) the capital gain
dividends are paid or deemed paid on or before December 31, 2007 and are
attributable to gains from the sale or exchange of USRPIs.

PRINCIPAL HOLDERS OF SECURITIES

To the knowledge of the Trust, as of February 22, 2006, no person owned
beneficially or of record 5% or more of the outstanding voting securities of any
Fund except as indicated on Appendix A hereto.

To the knowledge of the Trust, as of February 22, 2006, the Trustees of the
Trust and the officers of the Trust, as a group, owned less than 1% of the
outstanding shares of each Fund.

CUSTODIAN

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

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

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

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

CODE OF ETHICS

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

PROXY VOTING POLICIES AND PROCEDURES

The Trust has delegated authority and responsibility to vote any proxies
relating to voting securities held by the Funds to Schroders, which intends to
vote such proxies in accordance with its proxy voting policies and procedures. A
copy of Schroders' proxy voting policies and procedures is attached as Appendix
C to this SAI. Information regarding how Funds voted proxies relating to
portfolio securities during the most recent 12-month period ended June 30 is
available without charge, upon request, by calling (800) 464-3108 and of the
Securities and Exchange Commission website at http://www.sec.gov.

LEGAL COUNSEL

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

SHAREHOLDER LIABILITY

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

FINANCIAL STATEMENTS

The Report of Independent Registered Public Accounting Firm, Financial
Highlights, and Financial Statements in respect of the Funds are included in the
Trust's Annual Report to Shareholders for the fiscal year ended October 31
,2005, filed electronically with the Securities and Exchange Commission on
January 5, 2006 in the Funds' Report on Form N-CSR for the period ending October
31, 2005 (File No. 811-07840; Accession No. 0000950136-06-000150). The Report,
Financial Highlights and Financial Statements referred to above are incorporated
by reference into this SAI. Information regarding how the Funds voted proxies
relating to portfolio securities during the most recent twelve month period
ended June 30 is available without charge, upon request, by calling (800)
464-3108 and on the Securities and Exchange Commission website at
http://www.sec.gov.

APPENDIX A

HOLDERS OF OUTSTANDING SHARES

To the knowledge of the Trust, as of February 22, 2006, no person owned of
record 5% or more of the outstanding Investor or Advisor Shares of any Fund,
except as set forth below.

ADVISOR SHARES:

Percentage of Outstanding
Record or Beneficial Owner Number of Shares Advisor Shares Owned
-------------------------- ---------------- -------------------------

SCHRODER SHORT-TERM MUNICIPAL BOND FUND

Charles Schwab & Co Inc 186,006.0730 56.24%
Special Custody Account For the
Benefit of Customers
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122
(Record Owner)

Pershing LLC 20,901.5640 6.32%
PO Box 2052
Jersey City, NJ 07303-2052
(Record Owner)

Pershing LLC 20,118.3160 6.08%
PO Box 2052
Jersey City, NJ 07303-2052
(Record Owner)

Pershing LLC 72,936.7570 22.05%
PO Box 2052
Jersey City, NJ 07303-2052
(Record Owner)

A-1

SCHRODER MUNICIPAL BOND FUND

Charles Schwab & Co. Inc. 626,590.5370 52.47%
Special Custody Account
For the Benefit of Customers
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122
(Record Owner)

INVESTOR SHARES:

Percentage of Outstanding
Record or Beneficial Owner Number of Shares Investor Shares Owned
------------------------------- ---------------- -------------------------

SCHRODER SHORT-TERM MUNICIPAL BOND FUND

Charles Schwab & Co. Inc. 9,874,170.8630 67.30%
Special Custody Account For the
Benefit of Customers
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122
(Record Owner)

National Financial
Services Corp. 1,974,778.6270 13.46%
For Exclusive Benefit of
Customers
200 Liberty Street
1 World Financial Center
New York, NY 10281-1003
(Record Owner)

Laurence L. Stone 812,845.2840 5.54%
725 Eagle Farm Road
Villanova, PA 19085-2035
(Record Owner and Beneficial
Owner)

A-2

SCHRODER MUNICIPAL BOND FUND

Charles Schwab & Co. Inc. 8,256,609.0810 64.71%
Special Custody Account
For the Benefit of Customers
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122
(Record Owner)

National Financial
Services Corp. 1,605,365.3900 12.58%
For Exclusive Benefit of
Customers
Attn: Mutual Funds 5th Floor
200 Liberty Street
1 World Financial Center
New York, NY 10281-1003
(Record Owner)

PFPC Wrap Services 1,103,546.2160 8.65%
FBO Morningstar MP Clients
760 Moore Road
King of Prussia, PA 19406-1212
(Record Owner)

Prudential Investment
Management Service 801,823.2590 6.28%
FBO Mutual Fund Clients
Attn: Pruchoice Unit
Mail Stop 194-201
194 Wood Avenue
S. Iselin, NJ 08830-2710
(Record Owner)

A-3

APPENDIX B

FIXED INCOME AND COMMERCIAL PAPER RATINGS

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

FIXED-INCOME SECURITY RATINGS

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

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

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

B-1

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

COMMERCIAL PAPER RATINGS

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

FIXED-INCOME SECURITY RATINGS

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

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

B-2

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

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

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

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

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

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

COMMERCIAL PAPER RATINGS

B-3

recommendation to purchase or sell a security. The ratings are based upon
current information furnished by the issuer or obtained by Standard & Poor's
from other sources it considers reliable. The ratings may be changed, suspended,
or withdrawn as a result of changes in or unavailability of such information.
Ratings are graded into group categories, ranging from "A" for the highest
quality obligations to "D" for the lowest. Ratings are applicable to both
taxable and tax-exempt commercial paper.

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

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

FITCH INVESTORS SERVICE, INC. ("FITCH")

FIXED INCOME SECURITY RATINGS

Investment Grade

High Yield Grade

B-4

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

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

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

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

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

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

Short-Term Ratings

F-1+: Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.

F-1: Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated
"F-1+".

F-2: Good Credit Quality. Issues assigned this rating have a satisfactory degree
of assurance for timely payment, but the margin of safety is not as great as the
"F-1+" and "F-1 " categories.

B-5

DUFF & PHELPS

FIXED INCOME SECURITIES

Investment Grade

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

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

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

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

High Yield Grade

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

CERTIFICATES OF DEPOSIT RATINGS

Category 1: Top Grade

Duff 1: Very high certainty of timely payment. Liquidity factors are excellent
and supported by good Fundamental protection factors. Risk factors are minor.

Duff 1 minus: High certainty of timely payment. Liquidity factors are strong and
supported by good Fundamental protection factors. Risk factors are very small.

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Category 2: Good Grade

Category 3: Satisfactory Grade

Duff 3: Satisfactory liquidity and other protection factors qualify issue as to
investment grade. Risk factors are larger and subject to more variation.
Nevertheless timely payment is expected.

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

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APPENDIX C

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

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

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

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

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

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

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

Proxy Voting General Principles

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

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

PROXY COMMITTEE

The procedure for evaluating proxy requests is as follows:

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When making proxy-voting decisions, Schroders generally adheres to the Global
Corporate Governance Policy (the "Policy"), as revised from time to time. The
Policy, which has been developed by Schroders' Global Corporate Governance Team
and approved by the Schroders Proxy Committee, sets forth Schroders's positions
on recurring issues and criteria for addressing non-recurring issues. The Policy
is a part of these procedures and is incorporated herein by reference. The Proxy
Committee exercises oversight to assure that proxies are voted in accordance
with the Policy and that any votes inconsistent with the Policy or against
management are appropriately documented.

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

CONFLICTS

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

For example, conflicts of interest may arise when:

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

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

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

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

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

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a conflict of interest or the conflict is unrelated to the proposal in
question. For this purpose, "non-routine" proposals would typically include
any contested matter, including a contested election of directors, a merger
or sale of substantial assets, a change in the articles of incorporation
that materially affects the rights of shareholders, and compensation
matters for management (e.g., stock, option plans, retirement plans,
profit-sharing or other special remuneration plans). If the Team determines
that there is, or may be perceived to be, a conflict of interest when
voting a proxy, Schroders will address matters involving such conflicts of
interest as follows:

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

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

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

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

RECORD OF PROXY VOTING

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

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

Additional Reports and Disclosures for the Schroder Funds

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

o Name of the issuer of the security;

o Exchange ticker symbol;

o CUSIP number, if available;

o Shareholder meeting date;

o Brief summary of the matter voted upon;

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

o Whether the fund voted on the matter;

o How the fund voted; and

o Whether the fund voted with or against management.

July 30, 2003

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