File No. 033-42484
File No. 811-06400
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE U.S.
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN
OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.
STATEMENT OF ADDITIONAL INFORMATION
SAROFIM EQUITY FUND
[TICKER SYMBOL]
A SERIES OF THE ADVISORS' INNER CIRCLE FUND
[ ], 2013
INVESTMENT ADVISER:
FAYEZ SAROFIM & CO.
This Statement of Additional Information ("SAI") is not a prospectus. This SAI
is intended to provide additional information regarding the activities and
operations of The Advisors' Inner Circle Fund (the "Trust") and the Sarofim
Equity Fund (the "Fund"). This SAI is incorporated by reference into and should
be read in conjunction with the Fund's prospectus dated [ ], 2013. Capitalized
terms not defined herein are defined in the prospectus. Shareholders may obtain
copies of the Fund's prospectus or Annual Report, when available, free of
charge by writing to the Trust at Sarofim Equity Fund, P.O. Box 588, Portland,
ME 04112 (Express Mail Address: Sarofim Equity Fund, c/o Atlantic Fund
Services, LLC, Three Canal Plaza, Ground Floor, Portland, ME 04101) or calling
the Fund at [ ].
TABLE OF CONTENTS
THE TRUST ..................................................................S-1
DESCRIPTION OF PERMITTED INVESTMENTS .......................................S-1
INVESTMENT LIMITATIONS .....................................................S-26
THE ADVISER ................................................................S-28
THE PORTFOLIO MANAGERS .....................................................S-29
THE ADMINISTRATOR ..........................................................S-30
THE DISTRIBUTOR ............................................................S-31
PAYMENTS TO FINANCIAL INTERMEDIARIES .......................................S-31
THE TRANSFER AGENT .........................................................S-32
THE CUSTODIAN ..............................................................S-32
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ..............................S-32
LEGAL COUNSEL ..............................................................S-32
TRUSTEES AND OFFICERS OF THE TRUST .........................................S-32
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PURCHASING AND REDEEMING SHARES ............................................S-42
DETERMINATION OF NET ASSET VALUE ...........................................S-42
TAXES ......................................................................S-43
FUND TRANSACTIONS ..........................................................S-49
PORTFOLIO HOLDINGS .........................................................S-51
DESCRIPTION OF SHARES ......................................................S-52
SHAREHOLDER LIABILITY ......................................................S-52
LIMITATION OF TRUSTEES' LIABILITY ..........................................S-52
PROXY VOTING ...............................................................S-53
CODES OF ETHICS ............................................................S-53
5% AND 25% SHAREHOLDERS ....................................................S-53
APPENDIX A -- DESCRIPTION OF RATINGS .......................................A-1
APPENDIX B -- PROXY VOTING POLICIES AND PROCEDURES .........................B-1
[ ], 2013 [INVENTORY CODE]
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THE TRUST
GENERAL. The Fund is a separate series of the Trust, an open-end investment
management company established under Massachusetts law as a Massachusetts
voluntary association (commonly known as a business trust) under a Declaration
of Trust dated July 18, 1991, as amended and restated February 18, 1997 and
amended May 15, 2012. The Declaration of Trust permits the Trust to offer
separate series ("funds") of shares of beneficial interest ("shares"). The
Trust reserves the right to create and issue shares of additional funds. Each
fund is a separate mutual fund, and each share of each fund represents an equal
proportionate interest in that fund. All consideration received by the Trust
for shares of any fund, and all assets of such fund, belong solely to that fund
and would be subject to any liabilities related thereto. Each fund of the Trust
pays its (i) operating expenses, including fees of its service providers,
expenses of preparing prospectuses, proxy solicitation material and reports to
shareholders, costs of custodial services and registering its shares under
federal and state securities laws, pricing and insurance expenses, brokerage
costs, interest charges, taxes and organization expenses and (ii) pro rata
share of the fund's other expenses, including audit and legal expenses.
Expenses attributable to a specific fund shall be payable solely out of the
assets of that fund. Expenses not attributable to a specific fund are allocated
across all of the funds on the basis of relative net assets. The other funds of
the Trust are described in one or more separate Statements of Additional
Information.
VOTING RIGHTS. Each shareholder of record is entitled to one vote for each
share held on the record date for the meeting. The Fund will vote separately on
matters relating solely to it. As a Massachusetts voluntary association, the
Trust is not required, and does not intend, to hold annual meetings of
shareholders. Approval of shareholders will be sought, however, for certain
changes in the operation of the Trust and for the election of Trustees under
certain circumstances. Under the Declaration of Trust, the Trustees have the
power to liquidate the Fund without shareholder approval. While the Trustees
have no present intention of exercising this power, they may do so if the Fund
fails to reach a viable size within a reasonable amount of time or for such
other reasons as may be determined by the Board of Trustees (each, a "Trustee"
and collectively, the "Board").
In addition, a Trustee may be removed by the remaining Trustees or by
shareholders at a special meeting called upon written request of shareholders
owning at least 10% of the outstanding shares of the Trust. In the event that
such a meeting is requested, the Trust will provide appropriate assistance and
information to the shareholders requesting the meeting.
Any series of the Trust created on or after November 11, 1996 may reorganize or
merge with one or more other series of the Trust or of another investment
company. Any such reorganization or merger shall be pursuant to the terms and
conditions specified in an agreement and plan of reorganization authorized and
approved by the Trustees and entered into by the relevant series in connection
therewith. In addition, such reorganization or merger may be authorized by vote
of a majority of the Trustees then in office and, to the extent permitted by
applicable law and the Declaration of Trust, without the approval of
shareholders of any series.
DESCRIPTION OF PERMITTED INVESTMENTS
The Fund's investment objective and principal investment strategies are
described in the prospectus. The Fund is classified as a "diversified"
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"). The following information supplements, and should be read in
conjunction with, the prospectus. The following are descriptions of the
permitted investments and investment practices of the Fund and the associated
risk factors. The Fund may invest in any of the following instruments or engage
in any of the following investment practices unless such investment or activity
is inconsistent with or is not permitted by the Fund's stated investment
policies, including those stated below.
AMERICAN DEPOSITARY RECEIPTS. ADRs, as well as other "hybrid" forms of ADRs,
including European Depositary
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Receipts ("EDRs") and Global Depositary Receipts ("GDRs"), are certificates
evidencing ownership of shares of a foreign issuer. Depositary receipts are
securities that evidence ownership interests in a security or a pool of
securities that have been deposited with a "depository" and may be sponsored or
unsponsored. These certificates are issued by depository banks and generally
trade on an established market in the United States or elsewhere. The
underlying shares are held in trust by a custodian bank or similar financial
institution in the issuer's home country. The depository bank may not have
physical custody of the underlying securities at all times and may charge fees
for various services, including forwarding dividends and interest and corporate
actions. ADRs are alternatives to directly purchasing the underlying foreign
securities in their national markets and currencies. However, ADRs continue to
be subject to many of the risks associated with investing directly in foreign
securities.
For ADRs, the depository is typically a U.S. financial institution and the
underlying securities are issued by a foreign issuer. For other depositary
receipts, the depository may be a foreign or a U.S. entity, and the underlying
securities may have a foreign or a U.S. issuer. Depositary receipts will not
necessarily be denominated in the same currency as their underlying securities.
Generally, ADRs are issued in registered form, denominated in U.S. dollars, and
designed for use in the U.S. securities markets. Other depositary receipts,
such as GDRs and EDRs, may be issued in bearer form and denominated in other
currencies, and are generally designed for use in securities markets outside
the U.S. While the two types of depositary receipt facilities (unsponsored or
sponsored) are similar, there are differences regarding a holder's rights and
obligations and the practices of market participants. A depository may
establish an unsponsored facility without participation by (or acquiescence of)
the underlying issuer; typically, however, the depository requests a letter of
non-objection from the underlying issuer prior to establishing the facility.
Holders of unsponsored depositary receipts generally bear all the costs of the
facility. The depository usually charges fees upon deposit and withdrawal of
the underlying securities, the conversion of dividends into U.S. dollars or
other currency, the disposition of non-cash distributions, and the performance
of other services. The depository of an unsponsored facility frequently is
under no obligation to distribute shareholder communications received from the
underlying issuer or to pass through voting rights to depositary receipt
holders with respect to the underlying securities.
Sponsored depositary receipt facilities are created in generally the same
manner as unsponsored facilities, except that sponsored depositary receipts are
established jointly by a depository and the underlying issuer through a deposit
agreement. The deposit agreement sets out the rights and responsibilities of
the underlying issuer, the depository, and the depositary receipt holders. With
sponsored facilities, the underlying issuer typically bears some of the costs
of the depositary receipts (such as dividend payment fees of the depository),
although most sponsored depositary receipts agree to distribute notices of
shareholders meetings, voting instructions, and other shareholder
communications and information to the depositary receipt holders at the
underlying issuer's request. The depositary of an unsponsored facility
frequency is under no obligation to distribute shareholder communications
received from the issuer of the deposited security or to pass through, to the
holders of the receipts, voting rights with respect to the deposited
securities.
For purposes of the Fund's investment policies, investments in depositary
receipts will be deemed to be investments in the underlying securities. Thus, a
depositary receipt representing ownership of common stock will be treated as
common stock. Depositary receipts do not eliminate all of the risks associated
with directly investing in the securities of foreign issuers.
Investments in the securities of foreign issuers may subject the Fund to
investment risks that differ in some respects from those related to investments
in securities of U.S. issuers. Such risks include future adverse political and
economic developments, possible imposition of withholding taxes on income,
possible seizure, nationalization or expropriation of foreign deposits,
possible establishment of exchange controls or taxation at the source or
greater fluctuation in value due to changes in exchange rates. Foreign issuers
of securities often engage in business practices different from those of
domestic issuers of similar securities, and there may be less information
publicly available about foreign issuers. In addition, foreign issuers are,
generally speaking, subject to less government supervision and regulation and
different accounting treatment than are those in the United States.
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EQUITY SECURITIES. Equity securities represent ownership interests in a company
or partnership and consist of common stocks, preferred stocks, warrants and
rights to acquire common stock, securities convertible into common stock, and
investments in master limited partnerships. Investments in equity securities in
general are subject to market risks that may cause their prices to fluctuate
over time. Fluctuations in the value of equity securities in which the Fund
invests will cause the net asset value of the Fund to fluctuate. The Fund
purchases equity securities traded on global securities exchanges or the
over-the-counter market. Equity securities are described in more detail below:
o COMMON STOCK. Common stock represents an equity or ownership interest in
an issuer. In the event an issuer is liquidated or declares bankruptcy, the
claims of owners of bonds and preferred stock take precedence over the
claims of those who own common stock.
o PREFERRED STOCK. Preferred stock represents an equity or ownership
interest in an issuer that pays dividends at a specified rate and that has
precedence 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 precedence over the claims of those who own preferred and common
stock.
o ROYALTY TRUSTS. Royalty trusts are structured similarly to REITs. A
royalty trust generally acquires an interest in natural resource companies
or chemical companies and distributes the income it receives to the
investors of the royalty trust. A sustained decline in demand for crude
oil, natural gas and refined petroleum products could adversely affect
income and royalty trust revenues and cash flows. Factors that could lead
to a decrease in market demand include a recession or other adverse
economic conditions, an increase in the market price of the underlying
commodity, higher taxes or other regulatory actions that increase costs, or
a shift in consumer demand for such products. A rising interest rate
environment could adversely impact the performance of royalty trusts.
Rising interest rates could limit the capital appreciation of royalty
trusts because of the increased availability of alternative investments at
more competitive yields.
o EXCHANGE-TRADED FUNDS. An ETF is a fund whose shares are bought and sold
on a securities exchange as if it were a single security. An ETF holds a
portfolio of securities designed to track a particular market segment or
index. Some examples of ETFs are SPDRs([R]), DIAMONDS(SM), NASDAQ 100 Index
Tracking Stock(SM) ("QQQs(SM)"), and iShares([R]). The Fund could purchase
an ETF to temporarily gain exposure to a portion of the U. S. or foreign
market while awaiting an opportunity to purchase securities directly.
Similarly, the Fund may establish a short position in an ETF to gain
inverse exposure to a portion of the U. S. or foreign markets. The risks of
owning an ETF generally reflect the risks of owning the underlying
securities they are designed to track, although lack of liquidity in an ETF
could result in it being more volatile than the underlying portfolio of
securities and ETFs have management fees that increase their costs versus
the costs of owning the underlying securities directly. See also
"Investment Company Shares" below.
o WARRANTS. Warrants are instruments that entitle the holder to buy an
equity security at a specific price for a specific period of time. Changes
in the value of a warrant do not necessarily correspond to changes in the
value of its underlying security. The price of a warrant may be more
volatile than the price of its underlying security, and a warrant may offer
greater potential for capital appreciation as well as capital loss.
Warrants do not entitle a holder to dividends or voting rights with respect
to the underlying security and do not represent any rights in the assets of
the issuing company. A warrant ceases to have value if it is not exercised
prior to its expiration date. These factors can make warrants more
speculative than other types of investments.
o CONVERTIBLE SECURITIES. Convertible securities are bonds, debentures,
notes, preferred stocks or other securities that may be converted or
exchanged (by the holder or by the issuer) into shares of the underlying
common stock (or cash or securities of equivalent value) at a stated
exchange ratio. A convertible security may also be called for redemption or
conversion by the issuer after a particular date and under certain
circumstances (including a specified price) established upon issue. If a
convertible security held by the Fund is called for redemption or
conversion, the
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Fund could be required to tender it for redemption, convert it into the
underlying common stock, or sell it to a third party.
Convertible securities generally have less potential for gain or loss than
common stocks. Convertible securities generally provide yields higher than
the underlying common stocks, but generally lower than comparable
non-convertible securities. Because of this higher yield, convertible
securities generally sell at a price above their "conversion value," which
is the current market value of the stock to be received upon conversion.
The difference between this conversion value and the price of convertible
securities will vary over time depending on changes in the value of the
underlying common stocks and interest rates. When the underlying common
stocks decline in value, convertible securities will tend not to decline to
the same extent because of the interest or dividend payments and the
repayment of principal at maturity for certain types of convertible
securities. However, securities that are convertible other than at the
option of the holder generally do not limit the potential for loss to the
same extent as securities convertible at the option of the holder. When the
underlying common stocks rise in value, the value of convertible securities
may also be expected to increase. At the same time, however, the difference
between the market value of convertible securities and their conversion
value will narrow, which means that the value of convertible securities
will generally not increase to the same extent as the value of the
underlying common stocks. Because convertible securities may also be
interest-rate sensitive, their value may increase as interest rates fall
and decrease as interest rates rise. Convertible securities are also
subject to credit risk, and are often lower-quality securities.
GENERAL RISKS OF INVESTING IN STOCKS - While investing in stocks allows
investors to participate in the benefits of owning a company, such investors
must accept the risks of ownership. Unlike bondholders, who have preference to
a company's earnings and cash flow, preferred stockholders, followed by common
stockholders in order of priority, are entitled only to the residual amount
after a company meets its other obligations. For this reason, the value of a
company's stock will usually react more strongly to actual or perceived changes
in the company's financial condition or prospects than its debt obligations.
Stockholders of a company that fares poorly can lose money.
Stock markets tend to move in cycles with short or extended periods of rising
and falling stock prices. The value of a company's stock may fall because of:
o Factors that directly relate to that company, such as decisions made by
its management or lower demand for the company's products or services;
o Factors affecting an entire industry, such as increases in production
costs; and
o Changes in general financial market conditions that are relatively
unrelated to the company or its industry, such as changes in interest
rates, currency exchange rates or inflation rates.
Because preferred stock is generally junior to debt securities and other
obligations of the issuer, deterioration in the credit quality of the issuer
will cause greater changes in the value of a preferred stock than in a more
senior debt security with similar stated yield characteristics.
REAL ESTATE INVESTMENT TRUSTS. A REIT is a corporation or business trust (that
would otherwise be taxed as a corporation) which meets the definitional
requirements of the Internal Revenue Code of 1986, as amended (the "Code"). The
Code permits a qualifying REIT to deduct from taxable income the dividends
paid, thereby effectively eliminating corporate level federal income tax and
making the REIT a pass-through vehicle for federal income tax purposes. To meet
the definitional requirements of the Code, a REIT must, among other things:
invest substantially all of its assets in interests in real estate (including
mortgages and other REITs), cash and government securities; derive most of its
income from rents from real property or interest on loans secured by mortgages
on real property; and distribute annually 95% or more of its otherwise taxable
income to shareholders. Although the REIT structure
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originated in the U.S., a number of countries around the world have adopted, or
are considering adopting, similar REIT and REIT-like structures.
REITs are sometimes informally characterized as Equity REITs and Mortgage
REITs. An Equity REIT invests primarily in the fee ownership or leasehold
ownership of land and buildings; a Mortgage REIT invests primarily in mortgages
on real property, which may secure construction, development or long-term
loans.
REITs in which the Fund invests may be affected by changes in underlying real
estate values, which may have an exaggerated effect to the extent that REITs in
which the Fund invests may concentrate investments in particular geographic
regions or property types. Additionally, rising interest rates may cause
investors in REITs to demand a higher annual yield from future distributions,
which may in turn decrease market prices for equity securities issued by REITs.
Rising interest rates also generally increase the costs of obtaining financing,
which could cause the value of the Fund's investments to decline. During
periods of declining interest rates, certain Mortgage REITs may hold mortgages
that the mortgagors elect to prepay, which prepayment may diminish the yield on
securities issued by such Mortgage REITs. In addition, Mortgage REITs may be
affected by the ability of borrowers to repay when due the debt extended by the
REIT and Equity REITs may be affected by the ability of tenants to pay rent.
Certain REITs have relatively small market capitalization, which may tend to
increase the volatility of the market price of securities issued by such REITs.
Furthermore, REITs are dependent upon specialized management skills, have
limited diversification and are, therefore, subject to risks inherent in
operating and financing a limited number of projects. By investing in REITs
indirectly through the Fund, a shareholder will bear not only his proportionate
share of the expenses of the Fund, but also, indirectly, similar expenses of
the REITs. REITs depend generally on their ability to generate cash flow to
make distributions to shareholders.
In addition to these risks, Equity REITs may be affected by changes in the
value of the underlying property owned by the trusts, while Mortgage REITs may
be affected by the quality of any credit extended. Further, Equity and Mortgage
REITs are dependent upon management skills and generally may not be
diversified. Equity and Mortgage REITs are also subject to heavy cash flow
dependency defaults by borrowers and self-liquidation. In addition, Equity and
Mortgage REITs could possibly fail to qualify for tax free pass-through of
income under the Internal Revenue Code or to maintain their exemptions from
registration under the 1940 Act. The above factors may also adversely affect a
borrower's or a lessee's ability to meet its obligations to the REIT. In the
event of default by a borrower or lessee, the REIT may experience delays in
enforcing its rights as a mortgagee or lessor and may incur substantial costs
associated with protecting its investments.
MICRO, SMALL AND MEDIUM CAPITALIZATION ISSUERS. Investing in equity securities
of micro, small and medium capitalization companies often involves greater risk
than is customarily associated with investments in larger capitalization
companies. This increased risk may be due to the greater business risks of
smaller size, limited markets and financial resources, narrow product lines and
frequent lack of depth of management. The securities of micro and smaller
companies are often traded in the over-the-counter market and even if listed on
a national securities exchange may not be traded in volumes typical for that
exchange. Consequently, the securities of micro and smaller companies are less
likely to be liquid, may have limited market stability, and may be subject to
more abrupt or erratic market movements than securities of larger, more
established growth companies or the market averages in general.
INITIAL PUBLIC OFFERINGS ("IPOS") - A Fund may invest a portion of its assets
in securities of companies offering shares in IPOs. IPOs may have a magnified
performance impact on a Fund with a small asset base. The impact of IPOs on a
Fund's performance likely will decrease as the Fund's asset size increases,
which could reduce the Fund's total returns. IPOs may not be consistently
available to a Fund for investing, particularly as the Fund's asset base grows.
Because IPO shares frequently are volatile in price, a Fund may hold IPO shares
for a very short period of time. This may increase the turnover of a Fund's
portfolio and may lead to increased expenses for a Fund, such as commissions
and transaction costs. By selling IPO shares, a Fund may realize taxable gains
it will subsequently distribute to
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shareholders. In addition, the market for IPO shares can be speculative and/or
inactive for extended periods of time. The limited number of shares available
for trading in some IPOs may make it more difficult for a Fund to buy or sell
significant amounts of shares without an unfavorable impact on prevailing
prices. Holders of IPO shares can be affected by substantial dilution in the
value of their shares, by sales of additional shares and by concentration of
control in existing management and principal shareholders.
A Fund's investment in IPO shares may include the securities of unseasoned
companies (companies with less than three years of continuous operations),
which presents risks considerably greater than common stocks of more
established companies. These companies may have limited operating histories
and their prospects for profitability may be uncertain. These companies may be
involved in new and evolving businesses and may be vulnerable to competition
and changes in technology, markets and economic conditions. They may be more
dependent on key managers and third parties and may have limited product
lines.
MASTER LIMITED PARTNERSHIPS. MLPs are limited partnerships or limited liability
companies, whose partnership units or limited liability interests are listed
and traded on a U.S. securities exchange, and are treated as publicly traded
partnerships for federal income tax purposes. To qualify to be treated as a
partnership for tax purposes, an MLP must receive at least 90% of its income
from qualifying sources as set forth in Section 7704(d) of the Code. These
qualifying sources include activities such as the exploration, development,
mining, production, processing, refining, transportation, storage and marketing
of mineral or natural resources. MLPs generally have two classes of owners, the
general partner and limited partners. MLPs that are formed as limited liability
companies generally have two analogous classes of owners, the managing member
and the members. For purposes of this section, references to general partners
also apply to managing members and references to limited partners also apply to
members. The general partner is typically owned by a major energy company, an
investment fund, the direct management of the MLP or is an entity owned by one
or more of such parties. The general partner may be structured as a private or
publicly traded corporation or other entity. The general partner typically
controls the operations and management of the MLP through an equity interest of
as much as 2% in the MLP plus, in many cases, ownership of common units and
subordinated units. Limited partners own the remainder of the MLP through
ownership of common units and have a limited role in the MLP's operations and
management.
MLPs are typically structured such that common units and general partner
interests have first priority to receive quarterly cash distributions up to an
established minimum amount ("minimum quarterly distributions" or "MQD"). Common
and general partner interests also accrue arrearages in distributions to the
extent the MQD is not paid. Once common and general partner interests have been
paid, subordinated units receive distributions of up to the MQD; however,
subordinated units do not accrue arrearages. Distributable cash in excess of
the MQD paid to both common and subordinated units is distributed to both
common and subordinated units generally on a pro rata basis. The general
partner is also eligible to receive incentive distributions if the general
partner operates the business in a manner which results in distributions paid
per common unit surpassing specified target levels. As the general partner
increases cash distributions to the limited partners, the general partner
receives an increasingly higher percentage of the incremental cash
distributions. A common arrangement provides that the general partner can reach
a tier where it receives 50% of every incremental dollar paid to common and
subordinated unit holders. These incentive distributions encourage the general
partner to streamline costs, increase capital expenditures and acquire assets
in order to increase the partnership's cash flow and raise the quarterly cash
distribution in order to reach higher tiers. Such results benefit all security
holders of the MLP.
General partner interests of MLPs are typically retained by an MLP's original
sponsors, such as its founders, corporate partners, entities that sell assets
to the MLP and investors such as us. A holder of general partner interests can
be liable under certain circumstances for amounts greater than the amount of
the holder's investment in the general partner interest. General partner
interests often confer direct board participation rights and in many cases,
operating control, over the MLP. These interests themselves are not publicly
traded, although they may be owned by publicly traded entities. General partner
interests receive cash distributions, typically 2% of the MLP's aggregate cash
distributions,
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which are contractually defined in the partnership agreement. In addition,
holders of general partner interests typically hold incentive distribution
rights ("IDRs"), which provide them with a larger share of the aggregate MLP
cash distributions as the distributions to limited partner unit holders are
increased to prescribed levels. General partner interests generally cannot be
converted into common units. The general partner interest can be redeemed by
the MLP if the MLP unitholders choose to remove the general partner, typically
with a supermajority vote by limited partner unitholders.
FIXED INCOME SECURITIES. Fixed income securities include bonds, notes,
debentures and other interest-bearing securities that represent indebtedness.
The market value of the fixed income investments in which the Fund invests will
change in response to interest rate changes and other factors. During periods
of falling interest rates, the values of outstanding fixed income securities
generally rise. Conversely, during periods of rising interest rates, the values
of such securities generally decline. Moreover, while securities with longer
maturities tend to produce higher yields, the prices of longer maturity
securities are also subject to greater market fluctuations as a result of
changes in interest rates. Changes by recognized agencies in the rating of any
fixed income security and in the ability of an issuer to make payments of
interest and principal also affect the value of these investments. Changes in
the value of these securities will not necessarily affect cash income derived
from these securities but will affect the Fund's net asset value.
FOREIGN SECURITIES. Foreign securities include equity securities of foreign
entities, obligations of foreign branches of U.S. banks and of foreign banks,
including, without limitation, European Certificates of Deposit, European Time
Deposits, European Bankers' Acceptances, Canadian Time Deposits, Europaper and
Yankee Certificates of Deposit, and investments in Canadian Commercial Paper
and foreign securities. These instruments have investment risks that differ in
some respects from those related to investments in obligations of U.S. domestic
issuers. Such risks include future adverse political and economic developments,
the possible imposition of withholding taxes on interest or other income,
possible seizure, nationalization, or expropriation of foreign deposits, the
possible establishment of exchange controls or taxation at the source, greater
fluctuations in value due to changes in exchange rates, or the adoption of
other foreign governmental restrictions which might adversely affect the
payment of principal and interest on such obligations. Such investments may
also entail higher custodial fees and sales commissions than domestic
investments. Foreign issuers of securities or obligations are often subject to
accounting treatment and engage in business practices different from those
respecting domestic issuers of similar securities or obligations. Foreign
branches of U.S. banks and foreign banks may be subject to less stringent
reserve requirements than those applicable to domestic branches of U.S. banks.
EMERGING MARKETS -- An "emerging country" is generally a country that the
International Bank for Reconstruction and Development (World Bank) and the
International Finance Corporation would consider to be an emerging or
developing country. Typically, emerging markets are in countries that are in
the process of industrialization, with lower gross national products (GNP) than
more developed countries. There are currently over 130 countries that the
international financial community generally considers to be emerging or
developing countries, approximately 40 of which currently have stock markets.
These countries generally include every nation in the world except the United
States, Canada, Japan, Australia, New Zealand and most nations located in
Western Europe.
INVESTMENT FUNDS -- Some emerging countries currently prohibit direct foreign
investment in the securities of their companies. Certain emerging countries,
however, permit indirect foreign investment in the securities of companies
listed and traded on their stock exchanges through investment funds that they
have specifically authorized. Investments in these investment funds are subject
to the provisions of the 1940 Act. If the Fund invests in such investment
funds, shareholders will bear not only their proportionate share of the
expenses (including operating expenses and the fees of the Adviser), but also
will bear indirectly bear similar expenses of the underlying investment funds.
In addition, these investment funds may trade at a premium over their net asset
value.
S-7
RISKS OF FOREIGN SECURITIES:
Foreign securities, foreign currencies, and securities issued by U.S. entities
with substantial foreign operations may involve significant risks in addition
to the risks inherent in U.S. investments.
POLITICAL AND ECONOMIC FACTORS -- Local political, economic, regulatory, or
social instability, military action or unrest, or adverse diplomatic
developments may affect the value of foreign investments. Listed below are some
of the more important political and economic factors that could negatively
affect an investment in foreign securities:
o The economies of foreign countries may differ from the economy of the
United States in such areas as growth of gross national product, rate
of inflation, capital reinvestment, resource self-sufficiency, budget
deficits and national debt;
o Foreign governments sometimes participate to a significant degree,
through ownership interests or regulation, in their respective
economies. Actions by these governments could significantly influence
the market prices of securities and payment of dividends;
o The economies of many foreign countries are dependent on
international trade and their trading partners and they could be
severely affected if their trading partners were to enact protective
trade barriers and economic conditions;
o The internal policies of a particular foreign country may be less
stable than in the United States. Other countries face significant
external political risks, such as possible claims of sovereignty by
other countries or tense and sometimes hostile border clashes; and
o A foreign government may act adversely to the interests of U.S.
investors, including expropriation or nationalization of assets,
confiscatory taxation and other restrictions on U.S. investment. A
country may restrict or control foreign investments in its securities
markets. These restrictions could limit the Fund's ability to invest
in a particular country or make it very expensive for the Fund to
invest in that country. Some countries require prior governmental
approval or limit the types or amount of securities or companies in
which a foreigner can invest. Other countries may restrict the ability
of foreign investors to repatriate their investment income and capital
gains.
INFORMATION AND SUPERVISION -- There is generally less publicly available
information about foreign companies than companies based in the United States.
For example, there are often no reports and ratings published about foreign
companies comparable to the ones written about U.S. companies. Foreign
companies are typically not subject to uniform accounting, auditing and
financial reporting standards, practices and requirements comparable to those
applicable to U.S. companies. The lack of comparable information makes
investment decisions concerning foreign countries more difficult and less
reliable than domestic companies.
STOCK EXCHANGE AND MARKET RISK -- The Fund's investment managers anticipate
that in most cases an exchange or over-the-counter ("OTC") market located
outside of the United States will be the best available market for foreign
securities. Foreign stock markets, while growing in volume and sophistication,
are generally not as developed as the markets in the United States. Foreign
stock markets tend to differ from those in the United States in a number of
ways.
Foreign stock markets:
o are generally more volatile than, and not as developed or efficient
as, those in the United States;
o have substantially less volume;
o trade securities that tend to be less liquid and experience rapid and
erratic price movements;
o have generally higher commissions and are subject to set minimum
rates, as opposed to negotiated rates;
o employ trading, settlement and custodial practices less developed
than those in U.S. markets; and
o may have different settlement practices, which may cause delays and
increase the potential for failed settlements.
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Foreign markets may offer less protection to shareholders than U.S. markets
because:
o foreign accounting, auditing, and financial reporting requirements
may render a foreign corporate balance sheet more difficult to
understand and interpret than one subject to U.S. law and standards;
o adequate public information on foreign issuers may not be available,
and it may be difficult to secure dividends and information regarding
corporate actions on a timely basis;
o in general, there is less overall governmental supervision and
regulation of securities exchanges, brokers, and listed companies than
in the United States;
o OTC markets tend to be less regulated than stock exchange markets
and, in certain countries, may be totally unregulated;
o economic or political concerns may influence regulatory enforcement
and may make it difficult for shareholders to enforce their legal
rights; and
o restrictions on transferring securities within the United States or
to U.S. persons may make a particular security less liquid than
foreign securities of the same class that are not subject to such
restrictions.
FOREIGN CURRENCY RISK -- While the Fund denominates its net asset value in U.S.
dollars, the securities of foreign companies are frequently denominated in
foreign currencies. Thus, a change in the value of a foreign currency against
the U.S. dollar will result in a corresponding change in value of securities
denominated in that currency. Some of the factors that may impair the
investments denominated in a foreign currency are:
o It may be expensive to convert foreign currencies into U.S. dollars
and vice versa;
o Complex political and economic factors may significantly affect the
values of various currencies, including U. S. dollars, and their
exchange rates;
o Government intervention may increase risks involved in purchasing or
selling foreign currency options, forward contracts and futures
contracts, since exchange rates may not be free to fluctuate in
response to other market forces;
o There may be no systematic reporting of last sale information for
foreign currencies or regulatory requirement that quotations available
through dealers or other market sources be firm or revised on a timely
basis;
o Available quotation information is generally representative of very
large round-lot transactions in the inter-bank market and thus may
not reflect exchange rates for smaller odd-lot transactions (less than
$1 million) where rates may be less favorable; and
o The inter-bank market in foreign currencies is a global,
around-the-clock market. To the extent that a market is closed while
the markets for the underlying currencies remain open, certain markets
may not always reflect significant price and rate movements.
TAXES -- Certain foreign governments levy withholding taxes on dividend and
interest income. Although in some countries it is possible for the Fund to
recover a portion of these taxes, the portion that cannot be recovered will
reduce the income the Fund receives from its investments.
EMERGING MARKETS -- Investing in emerging markets may magnify the risks of
foreign investing. Security prices in emerging markets can be significantly
more volatile than those in more developed markets, reflecting the greater
uncertainties of investing in less established markets and economies. In
particular, countries with emerging markets may:
o Have relatively unstable governments;
o Present greater risks of nationalization of businesses, restrictions
on foreign ownership and prohibitions on the repatriation of assets;
o Offer less protection of property rights than more developed
countries; and
S-9
o Have economies that are based on only a few industries, may be highly
vulnerable to changes in local or global trade conditions, and may
suffer from extreme and volatile debt burdens or inflation rates.
Local securities markets may trade a small number of securities and may be
unable to respond effectively to increases in trading volume, potentially
making prompt liquidation of holdings difficult or impossible at times.
MONEY MARKET SECURITIES. Money market securities include short-term U.S.
government securities; custodial receipts evidencing separately traded interest
and principal components of securities issued by the U.S. Treasury; commercial
paper rated in the highest short-term rating category by a nationally
recognized statistical ratings organization ("NRSRO"), such as Standard &
Poor's Rating Services ("S&P") or Moody's Investor Services, Inc. ("Moody's"),
or determined by the Adviser to be of comparable quality at the time of
purchase; short-term bank obligations (certificates of deposit, time deposits
and bankers' acceptances) of U.S. commercial banks with assets of at least $1
billion as of the end of their most recent fiscal year; and repurchase
agreements involving such securities. Each of these money market securities are
described below. For a description of ratings, see "Appendix A -- Description
of Ratings" to this SAI.
U.S. GOVERNMENT SECURITIES. The Fund may invest in U.S. government securities.
Securities issued or guaranteed by the U.S. government or its agencies or
instrumentalities include U.S. Treasury securities, which are backed by the
full faith and credit of the U.S. Treasury and which differ only in their
interest rates, maturities, and times of issuance. U.S. Treasury bills have
initial maturities of one-year or less; U.S. Treasury notes have initial
maturities of one to ten years; and U.S. Treasury bonds generally have initial
maturities of greater than ten years. Certain U.S. government securities are
issued or guaranteed by agencies or instrumentalities of the U.S. government
including, but not limited to, obligations of U.S. government agencies or
instrumentalities such as the Federal National Mortgage Association ("Fannie
Mae"), the Government National Mortgage Association ("Ginnie Mae"), the Small
Business Administration, the Federal Farm Credit Administration, the Federal
Home Loan Banks, Banks for Cooperatives (including the Central Bank for
Cooperatives), the Federal Land Banks, the Federal Intermediate Credit Banks,
the Tennessee Valley Authority, the Export-Import Bank of the United States,
the Commodity Credit Corporation, the Federal Financing Bank, the Student Loan
Marketing Association, the National Credit Union Administration and the Federal
Agricultural Mortgage Corporation ("Farmer Mac").
Some obligations issued or guaranteed by U.S. government agencies and
instrumentalities, including, for example, Ginnie Mae pass-through
certificates, are supported by the full faith and credit of the U.S. Treasury.
Other obligations issued by or guaranteed by federal agencies, such as those
securities issued by Fannie Mae, are supported by the discretionary authority
of the U.S. government to purchase certain obligations of the federal agency.
While other obligations issued by or guaranteed by federal agencies, such as
those of the Federal Home Loan Banks, are supported by the right of the issuer
to borrow from the U.S. Treasury, while the U.S. government provides financial
support to such U.S. government-sponsored federal agencies, no assurance can be
given that the U.S. government will always do so, since the U.S. government is
not so obligated by law. U.S. Treasury notes and bonds typically pay coupon
interest semi-annually and repay the principal at maturity.
On September 7, 2008, the U.S. Treasury announced a federal takeover of Fannie
Mae and the Federal Home Loan Mortgage Corporation ("Freddie Mac"), placing the
two federal instrumentalities in conservatorship. Under the takeover, the U.S.
Treasury agreed to acquire $1 billion of senior preferred stock of each
instrumentality and obtained warrants for the purchase of common stock of each
instrumentality (the "Senior Preferred Stock Purchase Agreement" or
"Agreement"). Under the Agreement, the U.S. Treasury pledged to provide up to
$200 billion per instrumentality as needed, including the contribution of cash
capital to the instrumentalities in the event their liabilities exceed their
assets. This was intended to ensure that the instrumentalities maintain a
positive net worth and meet their financial obligations, preventing mandatory
triggering of receivership. On December 24, 2009, the U.S. Treasury announced
that it was amending the Agreement to allow the $200 billion cap on the U.S.
Treasury's funding commitment to increase as necessary to accommodate any
cumulative reduction in net worth through the end of 2012. The unlimited
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support the U.S. Treasury extended to the two companies expired at the
beginning of 2013 -- Fannie Mae's support is now capped at $125 billion and
Freddie Mac has a limit of $149 billion.
On August 17, 2012, the U.S. Treasury announced that it was again amending the
Agreement to terminate the requirement that Fannie Mae and Freddie Mac each pay
a 10% annual dividend. Instead, the companies will transfer to the U.S.
Treasury on a quarterly basis all profits earned during a quarter that exceed a
capital reserve amount of $3 billion. It is believed that the new amendment
puts Fannie Mae and Freddie Mac in a better position to service their debt
because the companies no longer have to borrow from the U.S. Treasury to make
fixed dividend payments. As part of the new terms, Fannie Mae and Freddie Mac
also will be required to reduce their investment portfolios at an annual rate
of 15 percent instead of the previous 10 percent, which puts each of them on
track to cut their portfolios to a targeted $250 billion in 2018.
Fannie Mae and Freddie Mac are the subject of several continuing class action
lawsuits and investigations by federal regulators over certain accounting,
disclosure or corporate governance matters, which (along with any resulting
financial restatements) may adversely affect the guaranteeing entities.
Importantly, the future of the entities is in serious question as the U.S.
Government reportedly is considering multiple options, ranging from
nationalization, privatization, consolidation, or abolishment of the entities.
o U. S. TREASURY OBLIGATIONS. U. S. Treasury obligations consist of bills,
notes and bonds issued by the U. S. Treasury and separately traded interest
and principal component parts of such obligations that are transferable
through the federal book-entry system known as Separately Traded Registered
Interest and Principal Securities ("STRIPS") and Treasury Receipts ("TRs").
o RECEIPTS. Interests in separately traded interest and principal component
parts of U. S. government obligations that are issued by banks or brokerage
firms and are created by depositing U. S. government obligations into a
special account at a custodian bank. The custodian holds the interest and
principal payments for the benefit of the registered owners of the
certificates or receipts. The custodian arranges for the issuance of the
certificates or receipts evidencing ownership and maintains the register.
TRs and STRIPS are interests in accounts sponsored by the U. S. Treasury.
Receipts are sold as zero coupon securities.
o U. S. GOVERNMENT ZERO COUPON SECURITIES. STRIPS and receipts are sold as
zero coupon securities, that is, fixed income securities that have been
stripped of their unmatured interest coupons. Zero coupon securities are
sold at a (usually substantial) discount and redeemed at face value at
their maturity date without interim cash payments of interest or principal.
The amount of this discount is accreted over the life of the security, and
the accretion constitutes the income earned on the security for both
accounting and tax purposes. Because of these features, the market prices
of zero coupon securities are generally more volatile than the market
prices of securities that have similar maturity but that pay interest
periodically. Zero coupon securities are likely to respond to a greater
degree to interest rate changes than are non-zero coupon securities with
similar maturity and credit qualities.
o U. S. GOVERNMENT AGENCIES. Some obligations issued or guaranteed by
agencies of the U. S. government are supported by the full faith and credit
of the U. S. Treasury, others are supported by the right of the issuer to
borrow from the U. S. Treasury, while still others are supported only by
the credit of the instrumentality. Guarantees of principal by agencies or
instrumentalities of the U. S. government may be a guarantee of payment at
the maturity of the obligation so that in the event of a default prior to
maturity there might not be a market and thus no means of realizing on the
obligation prior to maturity. Guarantees as to the timely payment of
principal and interest do not extend to the value or yield of these
securities nor to the value of the Fund's shares.
COMMERCIAL PAPER. Commercial paper is the term used to designate unsecured
short-term promissory notes issued by corporations and other entities.
Maturities on these issues vary from a few to 270 days.
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OBLIGATIONS OF DOMESTIC BANKS, FOREIGN BANKS AND FOREIGN BRANCHES OF U.S.
BANKS. The Fund may invest in obligations issued by banks and other savings
institutions. Investments in bank obligations include obligations of domestic
branches of foreign banks and foreign branches of domestic banks. Such
investments in domestic branches of foreign banks and foreign branches of
domestic banks may involve risks that are different from investments in
securities of domestic branches of U.S. banks. These risks may include future
unfavorable political and economic developments, possible withholding taxes on
interest income, seizure or nationalization of foreign deposits, currency
controls, interest limitations, or other governmental restrictions which might
affect the payment of principal or interest on the securities held by the Fund.
Additionally, these institutions may be subject to less stringent reserve
requirements and to different accounting, auditing, reporting and recordkeeping
requirements than those applicable to domestic branches of U.S. banks. Bank
obligations include the following:
o BANKERS' ACCEPTANCES. Bankers' acceptances are bills of exchange or time
drafts drawn on and accepted by a commercial bank. Corporations use
bankers' acceptances to finance the shipment and storage of goods and to
furnish dollar exchange. Maturities are generally six months or less.
o CERTIFICATES OF DEPOSIT. Certificates of deposit are interest-bearing
instruments with a specific maturity. They are issued by banks and savings
and loan institutions in exchange for the deposit of funds and normally can
be traded in the secondary market prior to maturity. Certificates of
deposit with penalties for early withdrawal will be considered illiquid.
o TIME DEPOSITS. Time deposits are non-negotiable receipts issued by a bank
in exchange for the deposit of funds. Like a certificate of deposit, it
earns a specified rate of interest over a definite period of time; however,
it cannot be traded in the secondary market. Time deposits with a
withdrawal penalty or that mature in more than seven days are considered to
be illiquid securities.
MORTGAGE-BACKED SECURITIES - Mortgage-backed securities are interests in pools
of mortgage loans that various governmental, government-related and private
organizations assemble as securities for sale to investors. Unlike most debt
securities, which pay interest periodically and repay principal at maturity or
on specified call dates, mortgage-backed securities make monthly payments that
consist of both interest and principal payments. In effect, these payments are
a "pass-through" of the monthly payments made by the individual borrowers on
their mortgage loans, net of any fees paid to the issuer or guarantor of such
securities. Since homeowners usually have the option of paying either part or
all of the loan balance before maturity, the effective maturity of a
mortgage-backed security is often shorter than is stated.
Governmental entities, private insurers and mortgage poolers may insure or
guarantee the timely payment of interest and principal of these pools through
various forms of insurance or guarantees, including individual loan, title,
pool and hazard insurance and letters of credit. The Adviser will consider
such insurance and guarantees and the creditworthiness of the issuers thereof
in determining whether a mortgage-related security meets its investment quality
standards. It is possible that the private insurers or guarantors will not meet
their obligations under the insurance policies or guarantee arrangements.
Although the market for such securities is becoming increasingly liquid,
securities issued by certain private organizations may not be readily
marketable.
COMMERCIAL BANKS, SAVINGS AND LOAN INSTITUTIONS, PRIVATE MORTGAGE INSURANCE
COMPANIES, MORTGAGE BANKERS AND OTHER SECONDARY MARKET ISSUERS - Commercial
banks, savings and loan institutions, private mortgage insurance companies,
mortgage bankers and other secondary market issuers also create pass-through
pools of conventional mortgage loans. In addition to guaranteeing the
mortgage-related security, such issuers may service and/or have
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originated the underlying mortgage loans. Pools created by these issuers
generally offer a higher rate of interest than pools created by GNMA, FNMA and
Freddie Mac because they are not guaranteed by a government agency.
RISKS OF MORTGAGE-BACKED SECURITIES - Yield characteristics of mortgage-backed
securities differ from those of traditional debt securities in a variety of
ways. The most significant differences of mortgage-backed securities are: 1)
payments of interest and principal are more frequent (usually monthly) and 2)
falling interest rates generally cause individual borrowers to pay off their
mortgage earlier than expected, which results in prepayments of principal on
the securities, thus forcing the Fund to reinvest the money at a lower interest
rate. In addition to risks associated with changes in interest rates described
in "Factors Affecting the Value of Debt Securities," a variety of economic,
geographic, social and other factors, such as the sale of the underlying
property, refinancing or foreclosure, can cause investors to repay the loans
underlying a mortgage-backed security sooner than expected. When prepayment
occurs, the Fund may have to reinvest its principal at a rate of interest that
is lower than the rate on existing mortgage-backed securities.
OTHER ASSET-BACKED SECURITIES - These securities are interests in pools of a
broad range of assets other than mortgages, such as automobile loans, computer
leases and credit card receivables. Like mortgage-backed securities, these
securities are pass-through. In general, the collateral supporting these
securities is of shorter maturity than mortgage loans and is less likely to
experience substantial prepayments with interest rate fluctuations, but may
still be subject to prepayment risk.
Asset-backed securities present certain risks that are not presented by
mortgage-backed securities. Primarily, these securities may not have the
benefit of any security interest in the related assets, which raises the
possibility that recoveries on repossessed collateral may not be available to
support payments on these securities. For example, credit card receivables are
generally unsecured and the debtors are entitled to the protection of a number
of state and federal consumer credit laws, many of which allow debtors to
reduce their balances by offsetting certain amounts owed on the credit cards.
Most issuers of asset-backed securities backed by automobile receivables permit
the servicers of such receivables to retain possession of the underlying
obligations. If the servicer were to sell these obligations to another party,
there is a risk that the purchaser would acquire an interest superior to that
of the holders of the related asset-backed securities. Due to the quantity of
vehicles involved and requirements under state laws, asset-backed securities
backed by automobile receivables may not have a proper security interest in all
of the obligations backing such receivables.
To lessen the effect of failures by obligors on underlying assets to make
payments, the entity administering the pool of assets may agree to ensure the
receipt of payments on the underlying pool occurs in a timely fashion
("liquidity protection"). In addition, asset-backed securities may obtain
insurance, such as guarantees, policies or letters of credit obtained by the
issuer or sponsor from third parties, for some or all of the assets in the pool
("credit support"). Delinquency or loss more than that anticipated or failure
of the credit support could adversely affect the return on an investment in
such a security.
The Fund may also invest in residual interests in asset-backed securities,
which consist of the excess cash flow remaining after making required payments
on the securities and paying related administrative expenses. The amount of
residual cash flow resulting from a particular issue of asset-backed securities
depends in part on the characteristics of the underlying assets, the coupon
rates on the securities, prevailing interest rates, the amount of
administrative expenses and the actual prepayment experience on the underlying
assets.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with
financial institutions. A repurchase agreement is an agreement under which a
fund acquires a fixed income security (generally a security issued by the U.S.
government or an agency thereof, a banker's acceptance, or a certificate of
deposit) from a commercial bank, broker, or dealer, and simultaneously agrees
to resell such security to the seller at an agreed upon price and date
(normally, the next business day). Because the security purchased constitutes
collateral for the repurchase obligation, a repurchase
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agreement may be considered a loan that is collateralized by the security
purchased. The acquisition of a repurchase agreement may be deemed to be an
acquisition of the underlying securities as long as the obligation of the
seller to repurchase the securities is collateralized fully. The Fund follows
certain procedures designed to minimize the risks inherent in such agreements.
These procedures include effecting repurchase transactions only with
creditworthy financial institutions whose condition will be continually
monitored by the Adviser. The repurchase agreements entered into by the Fund
will provide that the underlying collateral at all times shall have a value at
least equal to 102% of the resale price stated in the agreement and consist
only of securities permissible under Section 101(47)(A)(i) of the Bankruptcy
Code (the Adviser monitors compliance with this requirement). Under all
repurchase agreements entered into by the Fund, the custodian or its agent must
take possession of the underlying collateral. In the event of a default or
bankruptcy by a selling financial institution, the Fund will seek to liquidate
such collateral. However, the exercising of the Fund's right to liquidate such
collateral could involve certain costs or delays and, to the extent that
proceeds from any sale upon a default of the obligation to repurchase were less
than the repurchase price, the Fund could suffer a loss. It is the current
policy of the Fund not to invest in repurchase agreements that do not mature
within seven days if any such investment, together with any other illiquid
assets held by the Fund, amounts to more than 15% of the Fund's total assets.
The investments of the Fund in repurchase agreements, at times, may be
substantial when, in the view of the Adviser, liquidity or other considerations
so warrant.
REVERSE REPURCHASE AGREEMENTS. The Fund may enter into reverse repurchase
agreements, which involve the sale of securities with an agreement to
repurchase the securities at an agreed-upon price, date and interest payment
and have the characteristics of borrowing. Generally, the effect of such a
transaction is that the Fund can recover all or most of the cash invested in
the portfolio securities involved during the term of the reverse repurchase
agreement, while the Fund will be able to keep the interest income associated
with those portfolio securities. Such transactions are advantageous only if the
interest cost to the Fund of the reverse repurchase transaction is less than
the cost of obtaining the cash otherwise. Opportunities to achieve this
advantage may not always be available, and the Fund intends to use the reverse
repurchase technique only when it will be advantageous to the Fund. The Fund
will in each instance establish a segregated account with the Trust's custodian
bank in which the Fund will maintain cash or cash equivalents or other
portfolio securities equal in value to the Fund's obligations in respect of
reverse repurchase agreements.
SECURITIES OF OTHER INVESTMENT COMPANIES. The Fund may invest in shares of
other investment companies, to the extent permitted by applicable law and
subject to certain restrictions. These investment companies typically incur
fees that are separate from those fees incurred directly by the Fund. The
Fund's purchase of such investment company securities results in the layering
of expenses, such that shareholders would indirectly bear a proportionate share
of the operating expenses of such investment companies, including advisory
fees, in addition to paying the Fund's expenses. Unless an exception is
available, Section 12(d)(1)(A) of the 1940 Act prohibits a fund from (i)
acquiring more than 3% of the voting shares of any one investment company, (ii)
investing more than 5% of its total assets in any one investment company, and
(iii) investing more than 10% of its total assets in all investment companies
combined, including its ETF investments.
For hedging or other purposes, the Fund may invest in investment companies that
seek to track the composition and/or performance of specific indexes or
portions of specific indexes. Certain of these investment companies, known as
exchange-traded funds, are traded on a securities exchange. (See "Exchange
Traded Funds" above). The market prices of index-based investments will
fluctuate in accordance with changes in the underlying portfolio securities of
the investment company and also due to supply and demand of the investment
company's shares on the exchange upon which the shares are traded. Index-based
investments may not replicate or otherwise match the composition or performance
of their specified index due to transaction costs, among other things.
Pursuant to orders issued by the SEC to each of certain iShares, Market
Vectors, Vanguard, ProShares, PowerShares, Guggenheim (formerly, Claymore),
Direxion, Wisdom Tree, Rydex, First Trust and SPDR exchange-traded funds
(collectively, the "ETFs") and procedures approved by the Board, the Fund may
invest in the ETFs in excess of the 3% limit described above, provided that the
Fund otherwise complies with the conditions of the SEC order, as it may be
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amended, and any other applicable investment limitations. Neither the ETFs nor
their investment advisers make any representations regarding the advisability
of investing in the ETFs.
DERIVATIVES
Derivatives are financial instruments whose value is based on an underlying
asset, such as a stock or a bond, or an underlying economic factor, such as an
interest rate or a market benchmark. Unless otherwise stated in the Fund's
prospectus, the Fund may use derivatives for risk management purposes,
including to gain exposure to various markets in a cost efficient manner, to
reduce transaction costs or to remain fully invested. The Fund may also invest
in derivatives to protect it from broad fluctuations in market prices, interest
rates or foreign currency exchange rates (a practice known as "hedging"). When
hedging is successful, the Fund will have offset any depreciation in the value
of its portfolio securities by the appreciation in the value of the derivative
position. Although techniques other than the sale and purchase of derivatives
could be used to control the exposure of the Fund to market fluctuations, the
use of derivatives may be a more effective means of hedging this exposure.
Because many derivatives have a leverage or borrowing component, adverse
changes in the value or level of the underlying asset, reference rate, or index
can result in a loss substantially greater than the amount invested in the
derivative itself. Certain derivatives have the potential for unlimited loss,
regardless of the size of the initial investment. Accordingly, certain
derivative transactions may be considered to constitute borrowing transactions
for purposes of the Investment Company Act of 1940, as amended ("1940 Act").
Such a derivative transaction will not be considered to constitute the issuance
of a "senior security" by the Fund, and therefore such transaction will not be
subject to the 300% asset coverage requirement otherwise applicable to
borrowings by the Fund, if the Fund covers the transaction or segregates
sufficient liquid assets (or such assets are "earmarked" by the Custodian) in
accordance with the requirements and interpretations of the SEC and its staff.
As a result of recent amendments to rules under the Commodity Exchange Act
("CEA") by the Commodity Futures Trading Commission ("CFTC"), a Fund must
either operate within certain guidelines and restrictions with respect to the
Fund's use of futures, options on such futures, commodity options and certain
swaps, or the Adviser will be subject to registration with the CFTC as a
"commodity pool operator" ("CPO").
Consistent with the CFTC's new regulations, the Trust, on behalf of the Fund,
has claimed an exclusion from the definition of the term CPO under the CEA and,
therefore, the Fund is not subject to registration or regulation as a CPO under
the CEA. As a result, the Fund will operate within certain guidelines and
restrictions with respect to its use of futures, options on such futures,
commodity options and certain swaps.
TYPES OF DERIVATIVES:
FUTURES - A futures contract is an agreement between two parties whereby one
party sells and the other party agrees to buy a specified amount of a financial
instrument at an agreed upon price and time. The financial instrument
underlying the contract may be a stock, stock index, bond, bond index, interest
rate, foreign exchange rate or other similar instrument. Agreeing to buy the
underlying financial information is called buying a futures contract or taking
a long position in the contract. Likewise, agreeing to sell the underlying
financial instrument is called selling a futures contract or taking a short
position in the contract.
Futures contracts are traded in the United States on commodity exchanges or
boards of trade - known as "contract markets" - approved for such trading and
regulated by the CFTC. These contract markets standardize the terms, including
the maturity date and underlying financial instrument, of all futures
contracts.
Unlike other securities, the parties to a futures contract do not have to pay
for or deliver the underlying financial instrument until some future date (the
delivery date). Contract markets require both the purchaser and seller to
deposit
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"initial margin" with a futures broker, known as a futures commission merchant
or custodian bank, when they enter into the contract. Initial margin deposits
are typically equal to a percentage of the contract's value. After they open a
futures contract, the parties to the transaction must compare the purchase
price of the contract to its daily market value. If the value of the futures
contract changes in such a way that a party's position declines, that party
must make additional "variation margin" payments so that the margin payment is
adequate. On the other hand, the value of the contract may change in such a way
that there is excess margin on deposit, possibly entitling the party that has a
gain to receive all or a portion of this amount. This process is known as
"marking to the market."
Although the actual terms of a futures contract call for the actual delivery of
and payment for the underlying security, in many cases the parties may close
the contract early by taking an opposite position in an identical contract. If
the sale price upon closing out the contract is less than the original purchase
price, the person closing out the contract will realize a loss. If the sale
price upon closing out the contract is more than the original purchase price,
the person closing out the contract will realize a gain. If the purchase price
upon closing out the contract is more than the original sale price, the person
closing out the contract will realize a loss. If the purchase price upon
closing out the contract is less than the original sale price, the person
closing out the contract will realize a gain.
The Fund may incur commission expenses when it opens or closes a futures
position.
OPTIONS - An option is a contract between two parties for the purchase and sale
of a financial instrument for a specified price (known as the "strike price" or
"exercise price") at any time during the option period. Unlike a futures
contract, an option grants a right (not an obligation) to buy or sell a
financial instrument. Generally, a seller of an option can grant a buyer two
kinds of rights: a "call" (the right to buy the security) or a "put" (the right
to sell the security). Options have various types of underlying instruments,
including specific securities, indices of securities prices, foreign
currencies, interest rates and futures contracts. Options may be traded on an
exchange (exchange-traded-options) or may be customized agreements between the
parties (over-the-counter or "OTC" options). Like futures, a financial
intermediary, known as a clearing corporation, financially backs
exchange-traded options. However, OTC options have no such intermediary and are
subject to the risk that the counter-party will not fulfill its obligations
under the contract.
o PURCHASING PUT AND CALL OPTIONS
When the Fund purchases a put option, it buys the right to sell the instrument
underlying the option at a fixed strike price. In return for this right, the
Fund pays the current market price for the option (known as the "option
premium"). The Fund may purchase put options to offset or hedge against a
decline in the market value of its securities ("protective puts") or to benefit
from a decline in the price of securities that it does not own. The Fund would
ordinarily realize a gain if, during the option period, the value of the
underlying securities decreased below the exercise price sufficiently to cover
the premium and transaction costs. However, if the price of the underlying
instrument does not fall enough to offset the cost of purchasing the option, a
put buyer would lose the premium and related transaction costs.
Call options are similar to put options, except that the Fund obtains the right
to purchase, rather than sell, the underlying instrument at the option's strike
price. The Fund would normally purchase call options in anticipation of an
increase in the market value of securities it owns or wants to buy. The Fund
would ordinarily realize a gain if, during the option period, the value of the
underlying instrument exceeded the exercise price plus the premium paid and
related transaction costs. Otherwise, the Fund would realize either no gain or
a loss on the purchase of the call option.
The purchaser of an option may terminate its position by:
o Allowing it to expire and losing its entire premium;
o Exercising the option and either selling (in the case of a put
option) or buying (in the case of a call option) the underlying
instrument at the strike price; or
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o Closing it out in the secondary market at its current price.
o SELLING (WRITING) PUT AND CALL OPTIONS
When the Fund writes a call option it assumes an obligation to sell specified
securities to the holder of the option at a specified price if the option is
exercised at any time before the expiration date. Similarly, when the Fund
writes a put option it assumes an obligation to purchase specified securities
from the option holder at a specified price if the option is exercised at any
time before the expiration date. The Fund may terminate its position in an
exchange-traded put option before exercise by buying an option identical to the
one it has written. Similarly, it may cancel an OTC option by entering into an
offsetting transaction with the counter-party to the option.
The Fund could try to hedge against an increase in the value of securities it
would like to acquire by writing a put option on those securities. If security
prices rise, the Fund would expect the put option to expire and the premium it
received to offset the increase in the security's value. If security prices
remain the same over time, the Fund would hope to profit by closing out the put
option at a lower price. If security prices fall, the Fund may lose an amount
of money equal to the difference between the value of the security and the
premium it received. Writing covered put options may deprive the Fund of the
opportunity to profit from a decrease in the market price of the securities it
would like to acquire.
The characteristics of writing call options are similar to those of writing put
options, except that call writers expect to profit if prices remain the same or
fall. The Fund could try to hedge against a decline in the value of securities
it already owns by writing a call option. If the price of that security falls
as expected, the Fund would expect the option to expire and the premium it
received to offset the decline of the security's value. However, the Fund must
be prepared to deliver the underlying instrument in return for the strike
price, which may deprive it of the opportunity to profit from an increase in
the market price of the securities it holds.
The Fund is permitted only to write covered options. At the time of selling the
call option, the Fund may cover the option by owning, among other things:
o The underlying security (or securities convertible into the
underlying security without additional consideration), index, interest
rate, foreign currency or futures contract;
o A call option on the same security or index with the same or lesser
exercise price;
o A call option on the same security or index with a greater exercise
price and segregating cash or liquid securities in an amount equal to
the difference between the exercise prices;
o Cash or liquid securities equal to at least the market value of the
optioned securities, interest rate, foreign currency or futures
contract; or
o In the case of an index, the portfolio of securities that corresponds
to the index.
At the time of selling a put option, the Fund may cover the put option by,
among other things:
o Entering into a short position in the underlying security;
o Purchasing a put option on the same security, index, interest rate,
foreign currency or futures contract with the same or greater exercise
price;
S-17
o Purchasing a put option on the same security, index, interest rate,
foreign currency or futures contract with a lesser exercise price and
segregating cash or liquid securities in an amount equal to the
difference between the exercise prices; or
o Maintaining the entire exercise price in liquid securities.
o OPTIONS ON SECURITIES INDICES
Options on securities indices are similar to options on securities, except that
the exercise of securities index options requires cash settlement payments and
does not involve the actual purchase or sale of securities. In addition,
securities index options are designed to reflect price fluctuations in a group
of securities or segment of the securities market rather than price
fluctuations in a single security.
o OPTIONS ON FUTURES
An option on a futures contract provides the holder with the right to buy a
futures contract (in the case of a call option) or sell a futures contract (in
the case of a put option) at a fixed time and price. Upon exercise of the
option by the holder, the contract market clearing house establishes a
corresponding short position for the writer of the option (in the case of a
call option) or a corresponding long position (in the case of a put option). If
the option is exercised, the parties will be subject to the futures contracts.
In addition, the writer of an option on a futures contract is subject to
initial and variation margin requirements on the option position. Options on
futures contracts are traded on the same contract market as the underlying
futures contract.
The buyer or seller of an option on a futures contract may terminate the option
early by purchasing or selling an option of the same series (i.e., the same
exercise price and expiration date) as the option previously purchased or sold.
The difference between the premiums paid and received represents the trader's
profit or loss on the transaction.
The Fund may purchase put and call options on futures contracts instead of
selling or buying futures contracts. The Fund may buy a put option on a futures
contract for the same reasons it would sell a futures contract. It also may
purchase such put options in order to hedge a long position in the underlying
futures contract. The Fund may buy call options on futures contracts for the
same purpose as the actual purchase of the futures contracts, such as in
anticipation of favorable market conditions.
The Fund may write a call option on a futures contract to hedge against a
decline in the prices of the instrument underlying the futures contracts. If
the price of the futures contract at expiration were below the exercise price,
the Fund would retain the option premium, which would offset, in part, any
decline in the value of its portfolio securities.
The writing of a put option on a futures contract is similar to the purchase of
the futures contracts, except that, if the market price declines, the Fund
would pay more than the market price for the underlying instrument. The premium
received on the sale of the put option, less any transaction costs, would
reduce the net cost to the Fund.
o COMBINED POSITIONS
The Fund may purchase and write options in combination with each other, or in
combination with futures or forward contracts, to adjust the risk and return
characteristics of the overall position. For example, the Fund could construct
a combined position whose risk and return characteristics are similar to
selling a futures contract by purchasing a put option and writing a call option
on the same underlying instrument. Alternatively, the Fund could write a call
option at one strike price and buy a call option at a lower price to reduce the
risk of the written call option in the event of a substantial price increase.
Because combined options positions involve multiple trades, they result in
higher transaction costs and may be more difficult to open and close out.
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o FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
A forward foreign currency contract involves an obligation to purchase or sell a
specific amount of currencyat a future date or date range at a specific price.
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. Forward
foreign currency exchange contracts differ from foreign currency futures
contracts in certain respects. Unlike futures contracts, forward contracts:
o Do not have standard maturity dates or amounts (i.e., the parties to
the contract may fix the maturity date and the amount);
o Are traded in the inter-bank markets conducted directly between
currency traders (usually large commercial banks) and their customers,
as opposed to futures contracts which are traded only on exchanges
regulated by the CFTC;
o Do not require an initial margin deposit; and
o May be closed by entering into a closing transaction with the
currency trader who is a party to the original forward contract, as
opposed to a commodities exchange.
FOREIGN CURRENCY HEDGING STRATEGIES - A "settlement hedge" or "transaction
hedge" is designed to protect the Fund against an adverse change in foreign
currency values between the date a security is purchased or sold and the date
on which payment is made or received. Entering into a forward contract for the
purchase or sale of the amount of foreign currency involved in an underlying
security transaction for a fixed amount of U.S. dollars "locks in" the U.S.
dollar price of the security. The Fund may also use forward contracts to
purchase or sell a foreign currency when it anticipates purchasing or selling
securities denominated in foreign currency, even if it has not yet selected the
specific investments.
The Fund may use forward contracts to hedge against a decline in the value of
existing investments denominated in foreign currency. Such a hedge, sometimes
referred to as a "position hedge," would tend to offset both positive and
negative currency fluctuations, but would not offset changes in security values
caused by other factors. The Fund could also hedge the position by selling
another currency expected to perform similarly to the currency in which the
Fund's investment is denominated. This type of hedge, sometimes referred to as
a "proxy hedge," could offer advantages in terms of cost, yield, or efficiency,
but generally would not hedge currency exposure as effectively as a direct
hedge into U.S. dollars. Proxy hedges may result in losses if the currency used
to hedge does not perform similarly to the currency in which the hedged
securities are denominated.
Transaction and position hedging do not eliminate fluctuations in the
underlying prices of the securities that the Fund owns or intends to purchase
or sell. They simply establish a rate of exchange that one can achieve at some
future point in time. Additionally, these techniques tend to minimize the risk
of loss due to a decline in the value of the hedged currency and to limit any
potential gain that might result from the increase in value of such currency.
The Fund may enter into forward contracts to shift its investment exposure from
one currency into another. Such transactions may call for the delivery of one
foreign currency in exchange for another foreign currency, including currencies
in which its securities are not then denominated. This may include shifting
exposure from U.S. dollars to a foreign currency, or from one foreign currency
to another foreign currency. This type of strategy, sometimes known as a
"cross-hedge," will tend to reduce or eliminate exposure to the currency that
is sold, and increase exposure to the currency that is purchased. Cross-hedges
may protect against losses resulting from a decline in the hedged currency, but
will cause the Fund to assume the risk of fluctuations in the value of the
currency it purchases. Cross-hedging transactions also involve the risk of
imperfect correlation between changes in the values of the currencies
involved.
It is difficult to forecast with precision the market value of portfolio
securities at the expiration or maturity of a forward or futures contract.
Accordingly, the Fund may have to purchase additional foreign currency on the
spot market if the
S-19
market value of a security it is hedging is less than the amount of foreign
currency it is obligated to deliver. Conversely, the Fund may have to sell on
the spot market some of the foreign currency it received upon the sale of a
security if the market value of such security exceeds the amount of foreign
currency it is obligated to deliver.
SWAPS, CAPS, COLLARS AND FLOORS
SWAP AGREEMENTS - A swap is a financial instrument that typically involves the
exchange of cash flows between two parties on specified dates (settlement
dates), where the cash flows are based on agreed-upon prices, rates, indices,
etc. The nominal amount on which the cash flows are calculated is called the
notional amount. Swaps are individually negotiated and structured to include
exposure to a variety of different types of investments or market factors, such
as interest rates, foreign currency rates, mortgage securities, corporate
borrowing rates, security prices or inflation rates.
Swap agreements may increase or decrease the overall volatility of the
investments of the Fund and its share price. The performance of swap agreements
may be affected by a change in the specific interest rate, currency, or other
factors that determine the amounts of payments due to and from the Fund. If a
swap agreement calls for payments by the Fund, the Fund must be prepared to
make such payments when due. In addition, if the counter-party's
creditworthiness declined, the value of a swap agreement would be likely to
decline, potentially resulting in losses.
Generally, swap agreements have a fixed maturity date that will be agreed upon
by the parties. The agreement can be terminated before the maturity date under
certain circumstances, such as default by one of the parties or insolvency,
among others, and can be transferred by a party only with the prior written
consent of the other party. The Fund may be able to eliminate its exposure
under a swap agreement either by assignment or by other disposition, or by
entering into an offsetting swap agreement with the same party or a similarly
creditworthy party. If the counter-party is unable to meet its obligations
under the contract, declares bankruptcy, defaults or becomes insolvent, the
Fund may not be able to recover the money it expected to receive under the
contract.
A swap agreement can be a form of leverage, which can magnify the Fund's gains
or losses. In order to reduce the risk associated with leveraging, the Fund may
cover its current obligations under swap agreements according to guidelines
established by the Securities and Exchange Commission (the "SEC"). If the Fund
enters into a swap agreement on a net basis, it will segregate assets with a
daily value at least equal to the excess, if any, of the Fund's accrued
obligations under the swap agreement over the accrued amount the Fund is
entitled to receive under the agreement. If the Fund enters into a swap
agreement on other than a net basis, it will segregate assets with a value
equal to the full amount of the Fund's accrued obligations under the
agreement.
o EQUITY SWAPS
In a typical equity swap, one party agrees to pay another party the return on a
stock, stock index or basket of stocks in return for a specified interest rate.
By entering into an equity index swap, for example, the index receiver can gain
exposure to stocks making up the index of securities without actually
purchasing those stocks. Equity index swaps involve not only the risk
associated with investment in the securities represented in the index, but also
the risk that the performance of such securities, including dividends, will not
exceed the return on the interest rate that the Fund will be committed to pay.
o TOTAL RETURN SWAPS
Total return swaps are contracts in which one party agrees to make payments of
the total return from a reference instrument -- which may be a single asset, a
pool of assets or an index of assets -- during a specified period, in return
for payments equal to a fixed or floating rate of interest or the total return
from another underlying reference instrument. The total return includes
appreciation or depreciation on the underlying asset, plus any interest or
dividend payments. Payments under the swap are based upon an agreed upon
principal amount but, since the principal amount is not
S-20
exchanged, it represents neither an asset nor a liability to either
counterparty, and is referred to as notional. Total return swaps are marked to
market daily using different sources, including quotations from counterparties,
pricing services, brokers or market makers. The unrealized appreciation
(depreciation) related to the change in the valuation of the notional amount of
the swap is combined with the amount due to a Fund at termination or
settlement. The primary risks associated with total return swaps are credit
risks (if the counterparty fails to meet its obligations) and market risk (if
there is no liquid market for the agreement or unfavorable changes occur to the
underlying reference instrument).
o INTEREST RATE SWAPS
Interest rate swaps are financial instruments that involve the exchange of one
type of interest rate for another type of interest rate cash flow on specified
dates in the future. Some of the different types of interest rate swaps are
"fixed-for floating rate swaps," "termed basis swaps" and "index amortizing
swaps." Fixed-for floating rate swaps involve the exchange of fixed interest
rate cash flows for floating rate cash flows. Termed basis swaps entail cash
flows to both parties based on floating interest rates, where the interest rate
indices are different. Index amortizing swaps are typically fixed-for floating
swaps where the notional amount changes if certain conditions are met.
Like a traditional investment in a debt security, the Fund could lose money by
investing in an interest rate swap if interest rates change adversely. For
example, if the Fund enters into a swap where it agrees to exchange a floating
rate of interest for a fixed rate of interest, the Fund may have to pay more
money than it receives. Similarly, if the Fund enters into a swap where it
agrees to exchange a fixed rate of interest for a floating rate of interest,
the Fund may receive less money than it has agreed to pay.
o CURRENCY SWAPS
A currency swap is an agreement between two parties in which one party agrees to
make interest rate payments in one currency and the other promises to make
interest rate payments in another currency. The Fund may enter into a currency
swap when it has one currency and desires a different currency. Typically, the
interest rates that determine the currency swap payments are fixed, although
occasionally one or both parties may pay a floating rate of interest. Unlike an
interest rate swap, however, the principal amounts are exchanged at the
beginning of the contract and returned at the end of the contract. Changes in
foreign exchange rates and changes in interest rates, as described above may
negatively affect currency swaps.
CAPS, COLLARS AND FLOORS - Caps and floors have an effect similar to buying or
writing options. In a typical cap or floor agreement, one party agrees to make
payments only under specified circumstances, usually in return for payment of a
fee by the other party. For example, the buyer of an interest rate cap obtains
the right to receive payments to the extent that a specified interest rate
exceeds an agreed-upon level. The seller of an interest rate floor is obligated
to make payments to the extent that a specified interest rate falls below an
agreed-upon level. An interest rate collar combines elements of buying a cap
and selling a floor.
RISKS OF DERIVATIVES:
While transactions in derivatives may reduce certain risks, these transactions
themselves entail certain other risks. For example, unanticipated changes in
interest rates, securities prices or currency exchange rates may result in a
poorer overall performance of the Fund than if it had not entered into any
derivatives transactions. Derivatives may magnify the Fund's gains or losses,
causing it to make or lose substantially more than it invested.
When used for hedging purposes, increases in the value of the securities the
Fund holds or intends to acquire should offset any losses incurred with a
derivative. Purchasing derivatives for purposes other than hedging could expose
the Fund to greater risks.
S-21
CORRELATION OF PRICES - The Fund's ability to hedge its securities through
derivatives depends on the degree to which price movements in the underlying
index or instrument correlate with price movements in the relevant securities.
In the case of poor correlation, the price of the securities the Fund is
hedging may not move in the same amount, or even in the same direction as the
hedging instrument. The Adviser will try to minimize this risk by investing
only in those contracts whose behavior it expects to resemble with the
portfolio securities it is trying to hedge. However, if the Fund's prediction
of interest and currency rates, market value, volatility or other economic
factors is incorrect, the Fund may lose money, or may not make as much money as
it expected.
Derivative prices can diverge from the prices of their underlying instruments,
even if the characteristics of the underlying instruments are very similar to
the derivative. Listed below are some of the factors that may cause such a
divergence:
o current and anticipated short-term interest rates, changes in
volatility of the underlying instrument, and the time remaining until
expiration of the contract;
o a difference between the derivatives and securities markets,
including different levels of demand, how the instruments are traded,
the imposition of daily price fluctuation limits or trading of an
instrument stops; and
o differences between the derivatives, such as different margin
requirements, different liquidity of such markets and the
participation of speculators in such markets.
Derivatives based upon a narrower index of securities, such as those of a
particular industry group, may present greater risk than derivatives based on a
broad market index. Since narrower indices are made up of a smaller number of
securities, they are more susceptible to rapid and extreme price fluctuations
because of changes in the value of those securities.
While currency futures and options values are expected to correlate with
exchange rates, they may not reflect other factors that affect the value of the
investments of the Fund. A currency hedge, for example, should protect a
yen-denominated security from a decline in the yen, but will not protect the
Fund against a price decline resulting from deterioration in the issuer's
creditworthiness. Because the value of the Fund's foreign-denominated
investments changes in response to many factors other than exchange rates, it
may not be possible to match the amount of currency options and futures to the
value of the Fund's investments precisely over time.
LACK OF LIQUIDITY - Before a futures contract or option is exercised or
expires, the Fund can terminate it only by entering into a closing purchase or
sale transaction. Moreover, the Fund may close out a futures contract only on
the exchange the contract was initially traded. Although the Fund intends to
purchase options and futures only where there appears to be an active market,
there is no guarantee that such a liquid market will exist. If there is no
secondary market for the contract, or the market is illiquid, the Fund may not
be able to close out its position. In an illiquid market, the Fund may:
o have to sell securities to meet its daily margin requirements at a
time when it is disadvantageous to do so;
o have to purchase or sell the instrument underlying the contract;
o not be able to hedge its investments; and/or
o not be able to realize profits or limit its losses.
Derivatives may become illiquid (i.e., difficult to sell at a desired time and
price) under a variety of market conditions.
For example:
S-22
o an exchange may suspend or limit trading in a particular derivative
instrument, an entire category of derivatives or all derivatives,
which sometimes occurs because of increased market volatility;
o unusual or unforeseen circumstances may interrupt normal operations
of an exchange;
o the facilities of the exchange may not be adequate to handle current
trading volume;
o equipment failures, government intervention, insolvency of a
brokerage firm or clearing house or other occurrences may disrupt
normal trading activity; or
o investors may lose interest in a particular derivative or category of
derivatives.
MANAGEMENT RISK - If the Adviser incorrectly predicts stock market and interest
rate trends, the Fund may lose money by investing in derivatives. For example,
if the Fund were to write a call option based on the Adviser's expectation that
the price of the underlying security would fall, but the price were to rise
instead, the Fund could be required to sell the security upon exercise at a
price below the current market price. Similarly, if the Fund were to write a
put option based on the Adviser's expectation that the price of the underlying
security would rise, but the price were to fall instead, the Fund could be
required to purchase the security upon exercise at a price higher than the
current market price.
PRICING RISK - At times, market conditions might make it hard to value some
investments. For example, if the Fund has valued its securities too high, you
may end up paying too much for Fund shares when you buy into the Fund. If the
Fund underestimates its price, you may not receive the full market value for
your Fund shares when you sell.
MARGIN - Because of the low margin deposits required upon the opening of a
derivative position, such transactions involve an extremely high degree of
leverage. Consequently, a relatively small price movement in a derivative may
result in an immediate and substantial loss (as well as gain) to the Fund and
it may lose more than it originally invested in the derivative.
If the price of a futures contract changes adversely, the Fund may have to sell
securities at a time when it is disadvantageous to do so to meet its minimum
daily margin requirement. The Fund may lose its margin deposits if a
broker-dealer with whom it has an open futures contract or related option
becomes insolvent or declares bankruptcy.
VOLATILITY AND LEVERAGE - The prices of derivatives are volatile (i.e., they
may change rapidly, substantially and unpredictably) and are influenced by a
variety of factors, including:
o actual and anticipated changes in interest rates;
o fiscal and monetary policies; and
o national and international political events.
Most exchanges limit the amount by which the price of a derivative can change
during a single trading day. Daily trading limits establish the maximum amount
that the price of a derivative may vary from the settlement price of that
derivative at the end of trading on the previous day. Once the price of a
derivative reaches this value, the Fund may not trade that derivative at a
price beyond that limit. The daily limit governs only price movements during a
given day and does not limit potential gains or losses. Derivative prices have
occasionally moved to the daily limit for several consecutive trading days,
preventing prompt liquidation of the derivative.
Because many derivatives have a leverage or borrowing component, adverse
changes in the value or level of the underlying asset, reference rate, or index
can result in a loss substantially greater than the amount invested in the
derivative itself. Certain derivatives have the potential for unlimited loss,
regardless of the size of the initial investment.
S-23
Accordingly, certain derivative transactions may be considered to constitute
borrowing transactions for purposes of the 1940 Act. Such a derivative
transaction will not be considered to constitute the issuance of a "senior
security" by the Fund, and therefore such a transaction will not be subject to
the 300% asset coverage requirement otherwise applicable to borrowings by the
Fund, if the Fund covers the transaction or segregates sufficient liquid assets
in accordance with these requirements, and subject to certain risks.
ILLIQUID SECURITIES. Illiquid securities are securities that cannot be sold or
disposed of in the ordinary course of business (i.e. within seven days) at
approximately the prices at which they are valued. Because of their illiquid
nature, illiquid securities must be priced at fair value as determined in good
faith pursuant to procedures approved by the Trust's Board. Despite such good
faith efforts to determine fair value prices, the Fund's illiquid securities
are subject to the risk that the security's fair value price may differ from
the actual price which the Fund may ultimately realize upon its sale or
disposition. Difficulty in selling illiquid securities may result in a loss or
may be costly to the Fund. Under the supervision of the Trust's Board, the
Adviser determines the liquidity of the Fund's investments. In determining the
liquidity of the Fund's investments, the Adviser may consider various factors,
including (1) the frequency and volume of trades and quotations, (2) the number
of dealers and prospective purchasers in the marketplace, (3) dealer
undertakings to make a market, and (4) the nature of the security and the
market in which it trades (including any demand, put or tender features, the
mechanics and other requirements for transfer, any letters of credit or other
credit enhancement features, any ratings, the number of holders, the method of
soliciting offers, the time required to dispose of the security, and the
ability to assign or offset the rights and obligations of the security). The
Fund will not hold more than 15% of its net assets in illiquid securities.
SECURITIES LENDING. The Fund may lend portfolio securities to brokers, dealers
and other financial organizations that meet capital and other credit
requirements or other criteria established by the Fund's Board of Trustees.
These loans, if and when made, may not exceed 33 1/3 % of the total asset
value of the Fund (including the loan collateral). The Fund will not lend
portfolio securities to the Adviser or its affiliates unless permissible under
the 1940 Act and the rules and promulgations thereunder. Loans of portfolio
securities will be fully collateralized by cash, letters of credit or U.S.
government securities, and the collateral will be maintained in an amount equal
to at least 100% of the current market value of the loaned securities by
marking to market daily. Any gain or loss in the market price of the securities
loaned that might occur during the term of the loan would be for the account of
the Fund.
The Fund may pay a part of the interest earned from the investment of
collateral, or other fee, to an unaffiliated third party for acting as the
Fund's securities lending agent, but will bear all of any losses from the
investment of collateral.
By lending their securities, the Fund may increase their income by receiving
payments from the borrower that reflect the amount of any interest or any
dividends payable on the loaned securities as well as by either investing cash
collateral received from the borrower in short-term instruments or obtaining a
fee from the borrower when U.S. government securities or letters of credit are
used as collateral. Investing cash collateral subjects the Fund to market risk.
The Fund remains obligated to return all collateral to the borrower under the
terms of its securities lending arrangements, even if the value of investments
made with the collateral decline. Accordingly, if the value of a security in
which the cash collateral has been invested declines, the loss would be borne
by the Fund, and the Fund may be required to liquidate other investments in
order to return collateral to the borrower at the end of the loan. The Fund
will adhere to the following conditions whenever its portfolio securities are
loaned: (i) the Fund must receive at least 100% cash collateral or equivalent
securities of the type discussed in the preceding paragraph from the borrower;
(ii) the borrower must increase such collateral whenever the market value of
the securities rises above the level of such collateral; (iii) the Fund must be
able to terminate the loan on demand; (iv) the Fund must receive reasonable
interest on the loan, as well as any dividends, interest or other distributions
on the loaned securities and any increase in market value; (v) the Fund may pay
only reasonable fees in connection with the loan (which fees may include fees
payable to the lending agent, the borrower, the Fund's administrator and the
custodian); and (vi) voting rights on the loaned securities may pass to the
borrower, provided, however, that if a material event adversely affecting the
investment occurs, the Fund must terminate the loan and regain the right to
vote the securities. In such instances, the Adviser will vote the securities
in
S-24
accordance with its proxy voting policies and procedures. The Board has adopted
procedures reasonably designed to ensure that the foregoing criteria will be
met. Loan agreements involve certain risks in the event of default or
insolvency of the borrower, including possible delays or restrictions upon the
Fund's ability to recover the loaned securities or dispose of the collateral
for the loan, which could give rise to loss because of adverse market action,
expenses and/or delays in connection with the disposition of the underlying
securities.
RESTRICTED SECURITIES. The Fund may purchase restricted securities. Restricted
securities are securities that may not be sold freely to the public absent
registration under the U.S. Securities Act of 1933, as amended (the "1933 Act")
or an exemption from registration. This generally includes securities that are
unregistered that can be sold to qualified institutional buyers in accordance
with Rule 144A under the 1933 Act or securities that are exempt from
registration under the 1933 Act, such as commercial paper. Institutional
markets for restricted securities have developed as a result of the
promulgation of Rule 144A under the 1933 Act, which provides a "safe harbor"
from 1933 Act registration requirements for qualifying sales to institutional
investors. When Rule 144A restricted securities present an attractive
investment opportunity and meet other selection criteria, the Fund may make
such investments whether or not such securities are "illiquid" depending on the
market that exists for the particular security. The Board has delegated the
responsibility for determining the liquidity of Rule 144A restricted securities
that the Fund may invest in to the Adviser.
SHORT SALES. The Fund may engage in short sales that are either "uncovered" or
"against the box." A short sale is "against the box" if at all times during
which the short position is open, the Fund owns at least an equal amount of the
securities or securities convertible into, or exchangeable without further
consideration for, securities of the same issue as the securities that are sold
short. A short sale against the box is a taxable transaction to the Fund with
respect to the securities that are sold short.
Uncovered short sales are transactions under which the Fund sells a security it
does not own. To complete such a transaction, the Fund must borrow the security
to make delivery to the buyer. The Fund then is obligated to replace the
security borrowed by purchasing the security at the market price at the time of
the 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
Fund is required to pay the lender amounts equal to 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 proceeds of the short sale will be retained by the broker,
to the extent necessary to meet margin requirements, until the short position
is closed out.
Until the Fund closes its short position or replaces the borrowed security, the
Fund may: (a) segregate cash or liquid securities at such a level that the
amount segregated plus the amount deposited with the broker as collateral will
equal the current value of the security sold short; or (b) otherwise cover the
Fund's short position.
WHEN-ISSUED, DELAYED-DELIVERY AND FORWARD TRANSACTIONS
A when-issued security is one whose terms are available and for which a market
exists, but which have not been issued. In a forward delivery transaction, the
Fund contracts to purchase securities for a fixed price at a future date beyond
customary settlement time. "Delayed-delivery" refers to securities transactions
on the secondary market where settlement occurs in the future. In each of these
transactions, the parties fix the payment obligation and the interest rate that
they will receive on the securities at the time the parties enter the
commitment; however, they do not pay money or deliver securities until a later
date. Typically, no income accrues on securities the Fund has committed to
purchase before the securities are delivered, although the Fund may earn income
on securities it has in a segregated account to cover its position. The Fund
will only enter into these types of transactions with the intention of actually
acquiring the securities, but may sell them before the settlement date.
The Fund uses when-issued, delayed-delivery and forward delivery transactions
to secure what it considers an advantageous price and yield at the time of
purchase. When the Fund engages in when-issued, delayed-delivery or
S-25
forward delivery transactions, it relies on the other party to consummate the
sale. If the other party fails to complete the sale, the Fund may miss the
opportunity to obtain the security at a favorable price or yield.
When purchasing a security on a when-issued, delayed delivery, or forward
delivery basis, the Fund assumes the rights and risks of ownership of the
security, including the risk of price and yield changes. At the time of
settlement, the market value of the security may be more or less than the
purchase price. The yield available in the market when the delivery takes place
also may be higher than those obtained in the transaction itself. Because the
Fund does not pay for the security until the delivery date, these risks are in
addition to the risks associated with its other investments.
The Fund will segregate cash or liquid securities equal in value to commitments
for the when-issued, delayed delivery or forward delivery transactions. The
Fund will segregate additional liquid assets daily so that the value of such
assets is equal to the amount of the commitments.
INVESTMENT LIMITATIONS
FUNDAMENTAL POLICIES
In addition to the Fund's investment objective, the following investment
limitations are fundamental, which means that the Fund cannot change them
without approval by the vote of a majority of the outstanding shares of the
Fund. The phrase "majority of the outstanding shares" means the vote of (i) 67%
or more of the Fund's shares present at a meeting, if more than 50% of the
outstanding shares of the Fund are present or represented by proxy, or (ii)
more than 50% of the Fund's outstanding shares, whichever is less.
The Fund may not:
1. Purchase securities of an issuer that would cause the Fund to fail to
satisfy the diversification requirement for a diversified management
company under the 1940 Act, the rules or regulations thereunder or any
exemption therefrom, as such statute, rules or regulations may be amended
or interpreted from time to time.
2. Concentrate investments in a particular industry or group of industries,
as concentration is defined under the 1940 Act, the rules and regulations
thereunder or any exemption therefrom, as such statute, rules or
regulations may be amended or interpreted from time to time.
3. Borrow money or issue senior securities (as defined under the 1940 Act),
except to the extent permitted under the 1940 Act, the rules and
regulations thereunder or any exemption therefrom, as such statute, rules
or regulations may be amended or interpreted from time to time.
4. Make loans, except to the extent permitted under the 1940 Act, the rules
and regulations thereunder or any exemption therefrom, as such statute,
rules or regulations may be amended or interpreted from time to time.
5. Purchase or sell commodities or real estate, except to the extent
permitted under the 1940 Act, the rules and regulations thereunder or any
exemption therefrom, as such statute, rules or regulations may be amended
or interpreted from time to time.
6. Underwrite securities issued by other persons, except to the extent
permitted under the 1940 Act, the rules and regulations thereunder or any
exemption therefrom, as such statute, rules or regulations may be amended
or interpreted from time to time.
S-26
NON-FUNDAMENTAL POLICIES
The following limitations are non-fundamental and may be changed by the Trust's
Board without shareholder approval. These non-fundamental policies are based
upon the regulations currently set forth in the 1940 Act.
1. The Fund may not hold illiquid securities in an amount exceeding, in the
aggregate, 15% of the Fund's net assets.
2. The Fund may not pledge, mortgage or hypothecate any assets owned by the
Fund in excess of 33 1/3% of the Fund's total assets at the time of such
pledging, mortgaging or hypothecating.
3. The Fund may not borrow money in an amount exceeding 33 1/3% of the value
of its total assets, provided that investment strategies which either
obligate the Fund to purchase securities or require the Fund to cover a
position by segregating assets or entering into an offsetting position
shall not be subject to this limitation. To the extent that its borrowings
exceed 5% of its assets, the Fund will not make any further investments.
4. Under normal circumstances, the Fund will invest at least 80% of its net
assets, plus any borrowings for investment purposes, in equity securities.
This non-fundamental policy may be changed by the Board upon at least 60
days' written notice to Fund shareholders.
Except with respect to Fund policies concerning borrowing and illiquid
securities, if a percentage restriction is adhered to at the time of an
investment, a later increase or decrease in percentage resulting from changes
in values or assets will not constitute a violation of such restriction. With
respect to the limitation on illiquid securities, in the event that a
subsequent change in net assets or other circumstances causes the Fund to
exceed its limitation, the Fund will take steps to bring the aggregate amount
of illiquid instruments back within the limitations as soon as reasonably
practicable. With respect to the limitation on borrowing, in the event that a
subsequent change in net assets or other circumstances cause a Fund to exceed
its limitation, the Fund will take steps to bring the aggregate amount of
borrowing back within the limitations within three days thereafter (not
including Sundays and holidays).
The following descriptions of certain provisions of the 1940 Act may assist
investors in understanding the above policies and restrictions:
DIVERSIFICATION. Under the 1940 Act, a diversified investment management
company, as to 75% of its total assets, may not purchase securities of any
issuer (other than securities issued or guaranteed by the U.S. Government, its
agents or instrumentalities or securities of other investment companies) if, as
a result, more than 5% of its total assets would be invested in the securities
of such issuer, or more than 10% of the issuer's outstanding voting securities
would be held by the fund.
CONCENTRATION. The SEC has defined concentration as investing 25% or more of an
investment company's net assets in an industry or group of industries, with
certain exceptions.
BORROWING. The 1940 Act presently allows a fund to borrow from any bank
(including pledging, mortgaging or hypothecating assets) in an amount up to 33
1/3% of its total assets (not including temporary borrowings not in excess of
5% of its total assets).
SENIOR SECURITIES. Senior securities may include any obligation or instrument
issued by a fund evidencing indebtedness. The 1940 Act generally prohibits
funds from issuing senior securities, although it does not treat certain
transactions as senior securities, such as certain borrowings, short sales,
reverse repurchase agreements, firm commitment agreements and standby
commitments, with appropriate earmarking or segregation of assets to cover such
obligation.
S-27
LENDING. Under the 1940 Act, a fund may only make loans if expressly permitted
by its investment policies. The Fund's current investment policy on lending is
as follows: the Fund may not make loans if, as a result, more than 33 1/3% of
its total assets would be lent to other parties, except that the Fund may: (i)
purchase or hold debt instruments in accordance with its investment objective
and policies; (ii) enter into repurchase agreements; and (iii) engage in
securities lending as described in its SAI.
UNDERWRITING. Under the 1940 Act, underwriting securities involves a fund
purchasing securities directly from an issuer for the purpose of selling
(distributing) them or participating in any such activity either directly or
indirectly. Under the 1940 Act, a diversified fund may not make any commitment
as underwriter, if immediately thereafter the amount of its outstanding
underwriting commitments, plus the value of its investments in securities of
issuers (other than investment companies) of which it owns more than 10% of the
outstanding voting securities, exceeds 25% of the value of its total assets.
REAL ESTATE. The 1940 Act does not directly restrict an investment company's
ability to invest in real estate, but does require that every investment
company have a fundamental investment policy governing such investments. The
Fund will not purchase or sell real estate, except that the Fund may purchase:
marketable securities issued by companies which own or invest in real estate
(including REITs).
COMMODITIES. The 1940 Act does not directly restrict an investment company's
ability to invest in commodities, but does require that every investment
company have a fundamental investment policy governing such investments. The
Fund will not purchase or sell physical commodities or commodities contracts,
except that the Fund may purchase: (i) marketable securities issued by
companies which own or invest in commodities or commodities contracts; and (ii)
commodities contracts relating to financial instruments, such as financial
futures contracts and options on such contracts.
THE ADVISER
GENERAL. Fayez Sarofim & Co., a Texas corporation formed in 1958, located at
2907 Two Houston Center, 909 Fannin Street, Houston, Texas 77010, is a
professional investment management firm registered with the SEC under the
Investment Advisers Act of 1940. The Adviser is a wholly-owned subsidiary of
The Sarofim Group, Inc., which is 99.9 percent owned by current, active
employees of the Adviser. Fayez Sarofim is the majority shareholder of The
Sarofim Group, Inc. As of [ ], 2013, the Adviser had approximately $[ ] billion
in assets under management.
ADVISORY AGREEMENT WITH THE TRUST. The Trust and the Adviser have entered into
an investment advisory agreement dated [ ] (the "Advisory Agreement"). Under
the Advisory Agreement, the Adviser serves as the investment adviser and makes
investment decisions for the Fund and continuously reviews, supervises and
administers the investment program of the Fund, subject to the supervision of,
and policies established by, the Trustees of the Trust.
After the initial two-year term, the continuance of the Advisory Agreement must
be specifically approved at least annually: (i) by the vote of the Trustees or
by a vote of the shareholders of the Fund; and (ii) by the vote of a majority
of the Trustees who are not parties to the Advisory Agreement or "interested
persons" of any party thereto, cast in person at a meeting called for the
purpose of voting on such approval. The Advisory Agreement will terminate
automatically in the event of its assignment, and is terminable at any time
without penalty by the Trustees of the Trust or, with respect to the Fund, by a
majority of the outstanding shares of the Fund, on not less than 30 days' nor
more than 60 days' written notice to the Adviser, or by the Adviser on 90 days'
written notice to the Trust. As used in the Advisory Agreement, the terms
"majority of the outstanding voting securities," "interested persons" and
"assignment" have the same meaning as such terms in the 1940 Act.
ADVISORY FEES PAID TO THE ADVISER. For its services under the Advisory
Agreement, the Adviser is entitled to a fee, which is calculated daily and paid
monthly, at an annual rate of 0.50% of the average daily net assets of the
Fund.
S-28
The Adviser has contractually agreed to reduce fees and reimburse expenses to
the extent necessary to keep the Fund's net operating expenses (excluding
interest, taxes, brokerage commissions, acquired fund fees and expenses, and
extraordinary expenses (collectively, "excluded expenses")) from exceeding
0.70% of the Fund's average daily net assets until April 30, 2015 (the
"contractual expense limit"). If at any point total annual Fund operating
expenses (not including excluded expenses) are below the contractual expense
limit, the Adviser may retain the difference between the Fund's total annual
Fund operating expenses (not including excluded expenses) and the contractual
expense limit to recover all or a portion of its fee reductions or expense
reimbursements made during the preceding three-year period during which this
agreement was in place.
THE PORTFOLIO MANAGERS
This section includes information about the Fund's portfolio managers,
including information about other accounts they manage, the dollar range of
Fund shares they own and how they are compensated.
COMPENSATION. The Adviser's portfolio managers are compensated through payment
of a fixed annual salary and discretionary annual bonuses as well as through
the possible issuance of restricted share units, stock options and incentive
stock options. The annual salary and bonuses usually constitute the largest
component of the portfolio manager's compensation and these amounts are
determined annually through a comprehensive review process in which executive
officers and the members of the Adviser's Board of Directors review and
consider the accomplishments and development of each portfolio manager.
Portfolio managers are also sometimes granted restricted share units and stock
options or incentive stock options to acquire shares of the capital stock of
The Sarofim Group, Inc., the Adviser's ultimate corporate parent. The decisions
as to whether to issue such units or options and to whom the units or options
are to be issued are made in conjunction with the annual salary and bonus
review process, and the options are issued pursuant to a stock option plan
adopted by The Sarofim Group, Inc.
The compensation packages of the Adviser's portfolio managers are not based on
the performance or asset value of any particular client account or of all
client accounts as a group, but rather on the performance and accomplishments
of the individual to whom the package is granted. There are various aspects of
the review process that are designed to provide objectivity, but, in the final
analysis, the evaluation is a subjective one that is based upon a collective
overall assessment.
FUND SHARES OWNED BY PORTFOLIO MANAGERS. The Fund is required to show the
dollar amount range of each portfolio manager's "beneficial ownership" of
shares of the Fund as of the end of the most recently completed fiscal year.
Dollar amount ranges disclosed are established by the SEC. "Beneficial
ownership" is determined in accordance with Rule 16a-1(a)(2) under the
Securities Exchange Act of 1934, as amended (the "1934 Act"). Because the Fund
is new, as of the date of this SAI, the portfolio managers did not beneficially
own shares of the Fund.
OTHER ACCOUNTS. In addition to the Fund, certain portfolio managers are
responsible for the day-to-day management of certain other accounts, as listed
below. None of the accounts listed below are subject to a performance-based
advisory fee. The information below is provided as of [ ], 2013.
REGISTERED OTHER POOLED
INVESTMENT COMPANIES INVESTMENT VEHICLES OTHER ACCOUNTS
------------------------- -------------------------- --------------------------
NUMBER OF TOTAL ASSETS NUMBER OF TOTAL ASSETS NUMBER OF TOTAL ASSETS
NAME ACCOUNTS (IN MILLIONS) ACCOUNTS (IN MILLIONS) ACCOUNTS (IN MILLIONS)
-----------------------------------------------------------------------------------------------
Fayez Sarofim [ ] $[ ] [ ] $[ ] [ ] $[ ]
-----------------------------------------------------------------------------------------------
W. Gentry Lee, [ ] $[ ] [ ] $[ ] [ ] $[ ]
Jr., CFA
-----------------------------------------------------------------------------------------------
|
S-29
REGISTERED OTHER POOLED
INVESTMENT COMPANIES INVESTMENT VEHICLES OTHER ACCOUNTS
------------------------- -------------------------- --------------------------
NUMBER OF TOTAL ASSETS NUMBER OF TOTAL ASSETS NUMBER OF TOTAL ASSETS
NAME ACCOUNTS (IN MILLIONS) ACCOUNTS (IN MILLIONS) ACCOUNTS (IN MILLIONS)
-----------------------------------------------------------------------------------------------
Jeffrey M.
Jacobe, CFA [ ] $[ ] [ ] $[ ] [ ] $[ ]
-----------------------------------------------------------------------------------------------
Reynaldo Reza,
CFA [ ] $[ ] [ ] $[ ] [ ] $[ ]
-----------------------------------------------------------------------------------------------
Alan R.
Christensen, CFA [ ] $[ ] [ ] $[ ] [ ] $[ ]
-----------------------------------------------------------------------------------------------
|
CONFLICTS OF INTEREST. The portfolio managers' management of "other accounts"
may give rise to potential conflicts of interest in connection with their
management of the Fund's investments, on the one hand, and the investments of
the other accounts, on the other. The other accounts may have the same
investment objective as the Fund. Therefore, a potential conflict of interest
may arise as a result of the identical investment objectives, whereby the
portfolio managers could favor one account over another. Another potential
conflict could include the portfolio managers' knowledge about the size, timing
and possible market impact of the Fund's trades, whereby a portfolio manager
could use this information to the advantage of other accounts and to the
disadvantage of the Fund. However, the Adviser has established policies and
procedures to ensure that the purchase and sale of securities among all
accounts it manages are fairly and equitably allocated.
THE ADMINISTRATOR
GENERAL. SEI Investments Global Funds Services (the "Administrator"), a
Delaware statutory trust, has its principal business offices at One Freedom
Valley Drive, Oaks, Pennsylvania 19456. SEI Investments Management Corporation
("SIMC"), a wholly-owned subsidiary of SEI Investments Company ("SEI
Investments"), is the owner of all beneficial interest in the Administrator.
SEI Investments and its subsidiaries and affiliates, including the
Administrator, are leading providers of funds evaluation services, trust
accounting systems, and brokerage and information services to financial
institutions, institutional investors, and money managers. The Administrator
and its affiliates also serve as administrator or sub-administrator to other
mutual funds.
ADMINISTRATION AGREEMENT WITH THE TRUST. The Trust and the Administrator have
entered into an administration agreement dated November 14, 1991, as amended
and restated November 12, 2002 (the "Administration Agreement"). Under the
Administration Agreement, the Administrator provides the Trust with
administrative services, including regulatory reporting and all necessary
office space, equipment, personnel and facilities. Pursuant to a schedule to
the Administration Agreement, the Administrator also serves as the shareholder
servicing agent for the Fund whereby the Administrator provides certain
shareholder services to the Fund.
The Administration Agreement provides that the Administrator shall not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Trust in connection with the matters to which the Administration Agreement
relates, except a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Administrator in the performance of its duties or
from reckless disregard by it of its duties and obligations thereunder.
ADMINISTRATION FEES PAID TO THE ADMINISTRATOR. For its services under the
Administration Agreement, the Administrator is entitled to a fee, which is
calculated daily and paid monthly, at an annual rate that is detailed below in
the following schedule:
S-30
--------------------------------------------------------------------------------
FEE (AS A PERCENTAGE OF AGGREGATE
AVERAGE ANNUAL ASSETS) FUND'S AVERAGE DAILY NET ASSETS
--------------------------------------------------------------------------------
0.10% First $250 million
--------------------------------------------------------------------------------
0.09% $250 million to $500 million
--------------------------------------------------------------------------------
0.08% Over $500 million
--------------------------------------------------------------------------------
|
The foregoing fee is subject to a minimum annual fee of $70,000. For each
additional class of shares of the Fund established after the initial one (1)
class of shares, the minimum annual fee will be increased by $15,000. Due to
these minimums, the annual administration fee the Fund pays will exceed the
above percentages at low asset levels.
THE DISTRIBUTOR
GENERAL. The Trust and SEI Investments Distribution Co. (the "Distributor"), a
wholly-owned subsidiary of SEI Investments, and an affiliate of the
Administrator, are parties to a distribution agreement dated November 14, 1991,
as amended and restated November 14, 2005 and as amended August 30, 2010
("Distribution Agreement"). The principal business address of the Distributor
is One Freedom Valley Drive, Oaks, Pennsylvania 19456.
The continuance of the Distribution Agreement must be specifically approved at
least annually (i) by the vote of the Trustees or by a vote of the shareholders
of the Fund and (ii) by the vote of a majority of the Trustees who are not
"interested persons" of the Trust and have no direct or indirect financial
interest in the operations of the Distribution Agreement or any related
agreement, cast in person at a meeting called for the purpose of voting on such
approval. The Distribution Agreement will terminate automatically in the event
of its assignment (as such term is defined in the 1940 Act), and is terminable
at any time without penalty by the Board or, with respect to the Fund, by a
majority of the outstanding shares of the Fund, upon not more than 60 days'
written notice by either party. The Distribution Agreement provides that the
Distributor shall not be protected against any liability to the Trust or its
shareholders by reason of willful misfeasance, bad faith or gross negligence on
its part in the performance of its duties or from reckless disregard of its
obligations or duties thereunder.
PAYMENTS TO FINANCIAL INTERMEDIARIES
The Adviser and/or its affiliates, at their discretion, may make payments from
their own resources and not from Fund assets to affiliated or unaffiliated
brokers, dealers, banks (including bank trust departments), trust companies,
registered investment advisers, financial planners, retirement plan
administrators, insurance companies, and any other institution having a
service, administration, or any similar arrangement with the Fund, its service
providers or their respective affiliates, as incentives to help market and
promote the Fund and/or in recognition of their distribution, marketing,
administrative services, and/or processing support.
These additional payments may be made to financial intermediaries that sell
Fund shares or provide services to the Fund, the Distributor or shareholders of
the Fund through the financial intermediary's retail distribution channel
and/or fund supermarkets. Payments may also be made through the financial
intermediary's retirement, qualified tuition, fee-based advisory, wrap fee bank
trust, or insurance (e.g., individual or group annuity) programs. These
payments may include, but are not limited to, placing the Fund in a financial
intermediary's retail distribution channel or on a preferred or recommended
fund list; providing business or shareholder financial planning assistance;
educating financial intermediary personnel about the Fund; providing access to
sales and management representatives of the financial intermediary; promoting
sales of Fund shares; providing marketing and educational support; maintaining
share balances and/or for sub-accounting, administrative or shareholder
transaction processing services. A financial intermediary may perform the
services itself or may arrange with a third party to perform the services.
The Adviser and/or its affiliates may also make payments from their own
resources to financial intermediaries for costs associated with the purchase of
products or services used in connection with sales and marketing, participation
in and/or
S-31
presentation at conferences or seminars, sales or training programs, client and
investor entertainment and other sponsored events. The costs and expenses
associated with these efforts may include travel, lodging, sponsorship at
educational seminars and conferences, entertainment and meals to the extent
permitted by law.
Revenue sharing payments may be negotiated based on a variety of factors,
including the level of sales, the amount of Fund assets attributable to
investments in the Fund by financial intermediaries customers, a flat fee or
other measures as determined from time to time by the Adviser and/or its
affiliates. A significant purpose of these payments is to increase the sales of
Fund shares, which in turn may benefit the Adviser through increased fees as
Fund assets grow.
THE TRANSFER AGENT
Atlantic Fund Services, LLC, Three Canal Plaza, Portland, ME 04101 (the
"Transfer Agent"), serves as the Fund's transfer agent and dividend disbursing
agent under a transfer agency agreement with the Trust.
THE CUSTODIAN
Union Bank, N.A., 350 California Street, 6th Floor, San Francisco, CA 94104
(the "Custodian"), serves as the custodian of the Fund. The Custodian holds
cash, securities and other assets of the Fund as required by the 1940 Act.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
[ ], serves as independent registered public accounting firm for the Fund.
LEGAL COUNSEL
Morgan, Lewis & Bockius LLP, 1701 Market Street, Philadelphia, PA 19103-2921,
serves as legal counsel to the Trust.
TRUSTEES AND OFFICERS OF THE TRUST
BOARD RESPONSIBILITIES. The management and affairs of the Trust and its series,
including the Fund described in this SAI, are overseen by the Trustees. The
Board has approved contracts, as described above, under which certain companies
provide essential management services to the Trust.
Like most mutual funds, the day-to-day business of the Trust, including the
management of risk, is performed by third party service providers, such as the
Adviser, Distributor and Administrator. The Trustees are responsible for
overseeing the Trust's service providers and, thus, have oversight
responsibility with respect to risk management performed by those service
providers. Risk management seeks to identify and address risks, i.e., events or
circumstances that could have material adverse effects on the business,
operations, shareholder services, investment performance or reputation of the
funds. The funds and their service providers employ a variety of processes,
procedures and controls to identify various possible events or circumstances,
to lessen the probability of their occurrence and/or to mitigate the effects of
such events or circumstances if they do occur. Each service provider is
responsible for one or more discrete aspects of the Trust's business (e.g., the
Adviser is responsible for the day-to-day management of the Fund's portfolio
investments) and, consequently, for managing the risks associated with that
business. The Board has emphasized to the funds' service providers the
importance of maintaining vigorous risk management.
The Trustees' role in risk oversight begins before the inception of a fund, at
which time certain of the fund's service providers present the Board with
information concerning the investment objectives, strategies and risks of the
fund as well as proposed investment limitations for the fund. Additionally, the
fund's adviser provides the Board with an overview of, among other things, its
investment philosophy, brokerage practices and compliance infrastructure.
Thereafter, the Board continues its oversight function as various personnel,
including the Trust's Chief Compliance Officer, as well as personnel of the
adviser and other service providers, such as the fund's independent
accountants,
S-32
make periodic reports to the Audit Committee or to the Board with respect to
various aspects of risk management. The Board and the Audit Committee oversee
efforts by management and service providers to manage risks to which the funds
may be exposed.
The Board is responsible for overseeing the nature, extent and quality of the
services provided to the funds by the adviser and receives information about
those services at its regular meetings. In addition, on an annual basis, in
connection with its consideration of whether to renew the advisory agreement
with the adviser, the Board meets with the adviser to review such services.
Among other things, the Board regularly considers the adviser's adherence to
the funds' investment restrictions and compliance with various fund policies
and procedures and with applicable securities regulations. The Board also
reviews information about the funds' investments, including, for example,
portfolio holdings schedules and reports on the adviser's use of derivatives in
managing the funds, if any, as well as reports on the funds' investments in
ETFs, if any.
The Trust's Chief Compliance Officer reports regularly to the Board to review
and discuss compliance issues and fund and adviser risk assessments. At least
annually, the Trust's Chief Compliance Officer provides the Board with a report
reviewing the adequacy and effectiveness of the Trust's policies and procedures
and those of its service providers, including the adviser. The report addresses
the operation of the policies and procedures of the Trust and each service
provider since the date of the last report; any material changes to the
policies and procedures since the date of the last report; any recommendations
for material changes to the policies and procedures; and any material
compliance matters since the date of the last report.
The Board receives reports from the funds' service providers regarding
operational risks and risks related to the valuation and liquidity of portfolio
securities. The Trust's Fair Value Pricing Committee makes regular reports to
the Board concerning investments for which market quotations are not readily
available. Annually, the independent registered public accounting firm reviews
with the Audit Committee its audit of the funds' financial statements, focusing
on major areas of risk encountered by the funds and noting any significant
deficiencies or material weaknesses in the funds' internal controls.
Additionally, in connection with its oversight function, the Board oversees
fund management's implementation of disclosure controls and procedures, which
are designed to ensure that information required to be disclosed by the Trust
in its periodic reports with the SEC are recorded, processed, summarized, and
reported within the required time periods. The Board also oversees the Trust's
internal controls over financial reporting, which comprise policies and
procedures designed to provide reasonable assurance regarding the reliability
of the Trust's financial reporting and the preparation of the Trust's financial
statements.
From their review of these reports and discussions with the adviser, the Chief
Compliance Officer, the independent registered public accounting firm and other
service providers, the Board and the Audit Committee learn in detail about the
material risks of the funds, thereby facilitating a dialogue about how
management and service providers identify and mitigate those risks.
The Board recognizes that not all risks that may affect the funds can be
identified and/or quantified, that it may not be practical or cost-effective to
eliminate or mitigate certain risks, that it may be necessary to bear certain
risks (such as investment-related risks) to achieve the funds' goals, and that
the processes, procedures and controls employed to address certain risks may be
limited in their effectiveness. Moreover, reports received by the Trustees as
to risk management matters are typically summaries of the relevant information.
Most of the funds' investment management and business affairs are carried out
by or through the funds' adviser and other service providers, each of which has
an independent interest in risk management but whose policies and the methods
by which one or more risk management functions are carried out may differ from
the funds' and each other's in the setting of priorities, the resources
available or the effectiveness of relevant controls. As a result of the
foregoing and other factors, the Board's ability to monitor and manage risk, as
a practical matter, is subject to limitations.
MEMBERS OF THE BOARD. There are ten members of the Board of Trustees, eight of
whom are not interested persons of
S-33
the Trust, as that term is defined in the 1940 Act ("independent Trustees").
Robert Nesher, an interested person of the Trust, serves as Chairman of the
Board. George Sullivan, an independent Trustee, serves as the lead independent
Trustee. The Trust has determined its leadership structure is appropriate
given the specific characteristics and circumstances of the Trust. The Trust
made this determination in consideration of, among other things, the fact that
the independent Trustees constitute a super-majority (80%) of the Board, the
fact that the chairperson of each Committee of the Board is an independent
Trustee, the amount of assets under management in the Trust, and the number of
funds (and classes of shares) overseen by the Board. The Board also believes
that its leadership structure facilitates the orderly and efficient flow of
information to the independent Trustees from fund management.
The Board of Trustees has three standing committees: the Audit Committee,
Governance Committee and Fair Value Pricing Committee. The Audit Committee and
Governance Committee are chaired by an independent Trustee and composed of all
of the independent Trustees. In addition, the Board of Trustees has a lead
independent Trustee.
In his role as lead independent Trustee, Mr. Sullivan, among other things: (i)
presides over Board meetings in the absence of the Chairman of the Board; (ii)
presides over executive sessions of the independent Trustees; (iii) along with
the Chairman of the Board, oversees the development of agendas for Board
meetings; (iv) facilitates communication between the independent Trustees and
management, and among the independent Trustees; (v) serves as a key point
person for dealings between the independent Trustees and management; and (vi)
has such other responsibilities as the Board or independent Trustees determine
from time to time.
Set forth below are the names, dates of birth, position with the Trust, length
of term of office, and the principal occupations and other directorships held
during at least the last five years of each of the persons currently serving as
a Trustee of the Trust. Unless otherwise noted, the business address of each
Trustee is SEI Investments Company, One Freedom Valley Drive, Oaks,
Pennsylvania 19456.
-------------------------------------------------------------------------------------------------------------------
POSITION WITH
NAME AND DATE OF TRUST AND LENGTH PRINCIPAL OCCUPATIONS OTHER DIRECTORSHIPS HELD IN THE PAST 5
BIRTH OF TERM IN THE PAST 5 YEARS YEARS
-------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEES
-------------------------------------------------------------------------------------------------------------------
Robert Nesher Chairman of the SEI employee 1974 to Current Directorships: Trustee of The
Board of Trustees(1) present; currently Advisors' Inner Circle Fund II, Bishop
(08/17/46) performs various Street Funds, SEI Daily Income Trust, SEI
(since 1991) services on behalf of Institutional International Trust, SEI
SEI Investments for Institutional Investments Trust, SEI
which Mr. Nesher is Institutional Managed Trust, SEI Liquid
compensated. President Asset Trust, SEI Asset Allocation Trust, SEI
and Director of SEI Tax Exempt Trust, Adviser Managed Trust
Structured Credit Fund, and New Covenant Funds. Director of SEI
LP. President and Global Master Fund plc, SEI Global Assets
Chief Executive Fund plc, SEI Global Investments Fund plc,
Officer of SEI Alpha SEI Investments--Global Funds Services,
Strategy Portfolios, LP, Limited, SEI Investments Global, Limited,
June 2007 to present. SEI Investments (Europe) Ltd., SEI
President and Director Investments--Unit Trust Management (UK)
of SEI Opportunity Limited, SEI Multi-Strategy Funds PLC,
Fund, L.P. to 2010. SEI Global Nominee Ltd and SEI Alpha
Strategy Portfolios, LP.
Former Directorships: Director of SEI
Opportunity Fund, L.P. to 2010.
-------------------------------------------------------------------------------------------------------------------
|
S-34
-------------------------------------------------------------------------------------------------------------------
POSITION WITH
NAME AND DATE OF TRUST AND LENGTH PRINCIPAL OCCUPATIONS OTHER DIRECTORSHIPS HELD IN THE PAST 5
BIRTH OF TERM IN THE PAST 5 YEARS YEARS
-------------------------------------------------------------------------------------------------------------------
William M. Doran Trustee(1) Self-Employed Current Directorships: Trustee of The
Consultant since 2003. Advisors' Inner Circle Fund II, Bishop
(05/26/40) (since 1991) Partner at Morgan, Street Funds, SEI Daily Income Trust, SEI
Lewis & Bockius LLP Institutional International Trust, SEI
(law firm) from 1976 to Institutional Investments Trust, SEI
2003. Counsel to the Institutional Managed Trust, SEI Liquid
Trust, SEI Investments, Asset Trust, SEI Asset Allocation Trust, SEI
SIMC, the Tax Exempt Trust, Adviser Managed Trust
Administrator and the and New Covenant Funds. Director of SEI
Distributor. Alpha Strategy Portfolios, LP. Director of
SEI Investments (Europe), Limited, SEI
Investments--Global Funds Services,
Limited, SEI Investments Global, Limited,
SEI Investments (Asia), Limited, SEI Asset
Korea Co., Ltd., SEI Global Nominee Ltd.
and SEI Investments -- Unit Trust
Management (UK) Limited. Director of the
Distributor since 2003.
-------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
-------------------------------------------------------------------------------------------------------------------
Charles E. Carlbom Trustee Self-Employed Current Directorships: Trustee of The
Business Consultant, Advisors' Inner Circle Fund II and Bishop
(08/20/34) (since 2005) Business Projects Inc., Street Funds. Director of Oregon Transfer
since 1997. Co.
-------------------------------------------------------------------------------------------------------------------
John K. Darr Trustee Retired. Chief Current Directorships: Trustee of The
Executive Officer, Advisors' Inner Circle Fund II and Bishop
(08/17/44) (since 2008) Office of Finance, Street Funds. Director of Federal Home
Federal Home Loan Loan Bank of Pittsburgh, Manna, Inc. (non-
Banks, from 1992 to profit developer of affordable housing for
2007. ownership) and Meals on Wheels,
Lewes/Rehoboth Beach.
-------------------------------------------------------------------------------------------------------------------
Joseph T. Grause, Jr. Trustee Self Employed Current Directorships: Trustee of The
Consultant since Advisors' Inner Circle Fund II and Bishop
(05/28/52) (since 2011) January 2012. Director Street Funds. Director of The Korea Fund,
of Endowments and Inc.
Foundations,
Morningstar Investment
Management,
Morningstar, Inc.,
February 2010 to May
2011. Director of
International Consulting
and Chief Executive
Officer of Morningstar
-------------------------------------------------------------------------------------------------------------------
|
S-35
POSITION WITH
NAME AND DATE OF TRUST AND LENGTH PRINCIPAL OCCUPATIONS OTHER DIRECTORSHIPS HELD IN THE PAST 5
BIRTH OF TERM IN THE PAST 5 YEARS YEARS
-------------------------------------------------------------------------------------------------------------------
Associates Europe
Limited, Morningstar,
Inc., May 2007 to
February 2010. Country
Manager -- Morningstar
UK Limited,
Morningstar, Inc., June
2005 to May 2007.
-------------------------------------------------------------------------------------------------------------------
Mitchell A. Johnson Trustee Retired. Private Investor Current Directorships: Trustee of The
since 1994. Advisors' Inner Circle Fund II, Bishop
(03/01/42) (since 2005) Street Funds, SEI Asset Allocation Trust,
SEI Daily Income Trust, SEI Institutional
International Trust, SEI Institutional
Managed Trust, SEI Institutional
Investments Trust, SEI Liquid Asset Trust,
SEI Tax Exempt Trust, Adviser Managed
Trust and New Covenant Funds. Director of
SEI Alpha Strategy Portfolios, LP. Director
of Federal Agricultural Mortgage
Corporation (Farmer Mac) since 1997.
-------------------------------------------------------------------------------------------------------------------
Betty L. Krikorian Trustee Vice President, Current Directorships: Trustee of The
Compliance, AARP Advisors' Inner Circle Fund II and Bishop
(01/23/43) (since 2005) Financial Inc., from Street Funds.
2008 to 2010. Self-
Employed Legal and
Financial Services
Consultant since 2003.
Counsel (in-house) for
State Street Bank from
1995 to 2003.
-------------------------------------------------------------------------------------------------------------------
Bruce Speca Trustee Global Head of Asset Current Directorships: Trustee of The
Allocation, Manulife Advisors' Inner Circle Fund II and Bishop
(02/12/56) (since 2011) Asset Management Street Funds.
(subsidiary of Manulife
Financial), June 2010 to
May 2011. Executive
Vice President --
Investment
Management Services,
John Hancock Financial
Services (subsidiary of
Manulife Financial),
June 2003 to June
2010.
-------------------------------------------------------------------------------------------------------------------
|
S-36
-------------------------------------------------------------------------------------------------------------------
POSITION WITH
NAME AND DATE OF TRUST AND LENGTH PRINCIPAL OCCUPATIONS OTHER DIRECTORSHIPS HELD IN THE PAST 5
BIRTH OF TERM IN THE PAST 5 YEARS YEARS
-------------------------------------------------------------------------------------------------------------------
James M. Storey Trustee Attorney, Solo Current Directorships: Trustee/Director of
Practitioner since 1994. The Advisors' Inner Circle Fund II, Bishop
(04/12/31) (since 1994) Street Funds and U.S. Charitable Gift Trust.
Trustee of SEI Daily Income Trust, SEI
Institutional International Trust, SEI
Institutional Investments Trust, SEI
Institutional Managed Trust, SEI Liquid
Asset Trust, SEI Asset Allocation Trust, SEI
Tax Exempt Trust and SEI Alpha Strategy
Portfolios, L.P. until December 2010.
-------------------------------------------------------------------------------------------------------------------
George J. Sullivan, Jr. Trustee Retired since January Current Directorships: Trustee/ Director of
2012. Self-employed State Street Navigator Securities Lending
(11/13/42) (since 1999) Consultant, Newfound Trust, The Advisors' Inner Circle Fund II,
Consultants Inc., April Bishop Street Funds, SEI Structured Credit
Lead Independent 1997 to December Fund, LP, SEI Daily Income Trust, SEI
Trustee 2011. Institutional International Trust, SEI
Institutional Investments Trust, SEI
Institutional Managed Trust, SEI Liquid
Asset Trust, SEI Asset Allocation Trust, SEI
Tax Exempt Trust, SEI Alpha Strategy
Portfolios, LP, Adviser Managed Trust and
New Covenant Funds. Member of the
independent review committee for SEI's
Canadian-registered mutual funds.
Former Directorships: Director of SEI
Opportunity Fund, L.P. to 2010.
-------------------------------------------------------------------------------------------------------------------
|
(1) Denotes Trustees who may be deemed to be "interested" persons of the
Fund as that term is defined in the 1940 Act by virtue of their
affiliation with the Distributor and/or its affiliates.
INDIVIDUAL TRUSTEE QUALIFICATIONS
The Trust has concluded that each of the Trustees should serve on the Board
because of their ability to review and understand information about the Fund
provided to them by management, to identify and request other information they
may deem relevant to the performance of their duties, to question management
and other service providers regarding material factors bearing on the
management and administration of the Fund, and to exercise their business
judgment in a manner that serves the best interests of the Fund's shareholders.
The Trust has concluded that each of the Trustees should serve as a Trustee
based on their own experience, qualifications, attributes and skills as
described below.
The Trust has concluded that Mr. Nesher should serve as Trustee because of the
experience he has gained in his various roles with SEI Investments Company,
which he joined in 1974, his knowledge of and experience in the financial
services industry, and the experience he has gained serving as a trustee of the
Trust since 1991.
S-37
The Trust has concluded that Mr. Doran should serve as Trustee because of the
experience he gained serving as a Partner in the Investment Management and
Securities Industry Practice of a large law firm, his experience in and
knowledge of the financial services industry, and the experience he has gained
serving as a trustee of the Trust since 1991.
The Trust has concluded that Mr. Carlbom should serve as Trustee because of the
business experience he gained as President and CEO of a large distribution
cooperative and Chairman of a consulting company, his knowledge of the
financial services industry, and the experience he has gained serving as a
trustee of the Trust since 2005.
The Trust has concluded that Mr. Darr should serve as Trustee because of his
background in economics, the business experience he gained in a variety of
roles with different financial and banking institutions and as a founder of a
money management firm, his knowledge of the financial services industry, and
the experience he has gained serving as a trustee of the Trust since 2008.
The Trust has concluded that Mr. Grause should serve as Trustee because of the
knowledge and experience he gained in a variety of leadership roles with
different financial institutions, his knowledge of the mutual fund and
investment management industries, and his past experience as an interested
trustee and chair of the investment committee for a multi-managed investment
company.
The Trust has concluded that Mr. Johnson should serve as Trustee because of the
experience he gained as a senior vice president, corporate finance, of a
Fortune 500 company, his experience in and knowledge of the financial services
and banking industries, the experience he gained serving as a director of other
mutual funds, and the experience he has gained serving as a trustee of the
Trust since 2005.
The Trust has concluded that Ms. Krikorian should serve as Trustee because of
the experience she gained serving as a legal and financial services consultant,
in-house counsel to a large custodian bank and Vice President of Compliance of
an investment adviser, her background in fiduciary and banking law, her
experience in and knowledge of the financial services industry, and the
experience she has gained serving as a trustee of the Trust since 2005.
The Trust has concluded that Mr. Speca should serve as Trustee because of the
knowledge and experience he gained serving as president of a mutual fund
company and portfolio manager for a $95 billion complex of asset allocation
funds, and his over 25 years of experience working in a management capacity
with mutual fund boards.
The Trust has concluded that Mr. Storey should serve as Trustee because of the
mutual fund governance experience he gained as an Investment Management
attorney, both in private practice and with the SEC, his background serving as
counsel to numerous mutual fund boards of trustees, his knowledge of the 1940
Act, his experience in and knowledge of the financial services industry, and
the experience he has gained serving as a trustee of the Trust since 1994.
The Trust has concluded that Mr. Sullivan should serve as Trustee because of
the experience he gained as a certified public accountant and financial
consultant, his experience in and knowledge of public company accounting and
auditing and the financial services industry, the experience he gained as an
officer of a large financial services firm in its operations department, and
his experience from serving as a trustee of the Trust since 1999.
In its periodic assessment of the effectiveness of the Board, the Board
considers the complementary individual skills and experience of the individual
Trustees primarily in the broader context of the Board's overall composition so
that the Board, as a body, possesses the appropriate (and appropriately
diverse) skills and experience to oversee the business of the funds.
S-38
BOARD COMMITTEES. The Board has established the following standing committees:
o AUDIT COMMITTEE. The Board has a standing Audit Committee that is composed
of each of the independent Trustees of the Trust. The Audit Committee
operates under a written charter approved by the Board. The principal
responsibilities of the Audit Committee include: (i) recommending which
firm to engage as each fund's independent registered public accounting firm
and whether to terminate this relationship; (ii) reviewing the independent
registered public accounting firm's compensation, the proposed scope and
terms of its engagement, and the firm's independence; (iii) pre-approving
audit and non-audit services provided by each fund's independent registered
public accounting firm to the Trust and certain other affiliated entities;
(iv) serving as a channel of communication between the independent
registered public accounting firm and the Trustees; (v) reviewing the
results of each external audit, including any qualifications in the
independent registered public accounting firm's opinion, any related
management letter, management's responses to recommendations made by the
independent registered public accounting firm in connection with the audit,
reports submitted to the Committee by the internal auditing department of
the Trust's Administrator that are material to the Trust as a whole, if
any, and management's responses to any such reports; (vi) reviewing each
fund's audited financial statements and considering any significant
disputes between the Trust's management and the independent registered
public accounting firm that arose in connection with the preparation of
those financial statements; (vii) considering, in consultation with the
independent registered public accounting firm and the Trust's senior
internal accounting executive, if any, the independent registered public
accounting firms' reports on the adequacy of the Trust's internal financial
controls; (viii) reviewing, in consultation with each fund's independent
registered public accounting firm, major changes regarding auditing and
accounting principles and practices to be followed when preparing each
fund's financial statements; and (ix) other audit related matters. Messrs.
Carlbom, Darr, Grause, Johnson, Speca, Storey and Sullivan and Ms.
Krikorian currently serve as members of the Audit Committee. Mr. Sullivan
serves as the Chairman of the Audit Committee. The Audit Committee meets
periodically, as necessary, and met [ ] ([ ]) times during the most
recently completed fiscal year.
o FAIR VALUE PRICING COMMITTEE. The Board has a standing Fair Value Pricing
Committee that is composed of at least one Trustee and various
representatives of the Trust's service providers, as appointed by the
Board. The Fair Value Pricing Committee operates under procedures approved
by the Board. The principal responsibility of the Fair Value Pricing
Committee is to determine the fair value of securities for which current
market quotations are not readily available. The Fair Value Pricing
Committee's determinations are reviewed by the Board. Mr. Nesher,
interested trustee, currently serves as the Board's delegate on the Fair
Value Pricing Committee. The Fair Value Pricing Committee meets
periodically, as necessary, and met [ ] ([ ]) times during the most
recently completed fiscal year.
o GOVERNANCE COMMITTEE. The Board has a standing Governance Committee
(formerly the Nominating Committee) that is composed of each of the
independent Trustees of the Trust. The Governance Committee operates under
a written charter approved by the Board. The principal responsibilities of
the Governance Committee include: (i) considering and reviewing Board
governance and compensation issues; (ii) conducting a self-assessment of
the Board's operations; (iii) selecting and nominating all persons to serve
as independent Trustees and evaluating the qualifications of "interested"
Trustee candidates; and (iv) reviewing shareholder recommendations for
nominations to fill vacancies on the Board if such recommendations are
submitted in writing and addressed to the Committee at the Trust's office.
Ms. Krikorian and Messrs. Carlbom, Darr, Grause, Johnson, Speca, Storey and
Sullivan currently serve as members of the Governance Committee. Ms.
Krikorian serves as the Chairman of the Governance Committee. The
Governance Committee meets periodically, as necessary, and met [ ] ([ ])
times during the most recently completed fiscal year.
FUND SHARES OWNED BY BOARD MEMBERS. The following table shows the dollar amount
range of each Trustee's "beneficial ownership" of shares of the Fund as of the
end of the most recently completed calendar year. Dollar amount
S-39
ranges disclosed are established by the SEC. "Beneficial ownership" is
determined in accordance with Rule 16a-1(a)(2) under the 1934 Act. The Trustees
and officers of the Trust own less than 1% of the outstanding shares of the
Trust.
--------------------------------------------------------------------------------
DOLLAR RANGE OF FUND AGGREGATE DOLLAR RANGE OF SHARES
NAME SHARES (FUND)(1) (ALL FUNDS IN THE FUND COMPLEX)(1,2)
--------------------------------------------------------------------------------
INTERESTED TRUSTEES
--------------------------------------------------------------------------------
Doran None None
--------------------------------------------------------------------------------
Nesher None None
--------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
--------------------------------------------------------------------------------
Carlbom None None
--------------------------------------------------------------------------------
Darr None None
--------------------------------------------------------------------------------
Grause None None
--------------------------------------------------------------------------------
Johnson None Over $100,000
--------------------------------------------------------------------------------
Krikorian None None
--------------------------------------------------------------------------------
Speca None None
--------------------------------------------------------------------------------
Storey None None
--------------------------------------------------------------------------------
Sullivan None None
--------------------------------------------------------------------------------
|
(1) Valuation date is December 31, 2012.
(2) The Trust is the only investment company in the Fund Complex.
BOARD COMPENSATION. The Trust paid the following fees to the Trustees during
its most recently completed fiscal year.
-------------------------------------------------------------------------------------------------------------------
AGGREGATE PENSION OR RETIREMENT ESTIMATED ANNUAL
COMPENSATION BENEFITS ACCRUED AS PART BENEFITS UPON TOTAL COMPENSATION FROM THE TRUST
NAME FROM THE TRUST OF FUND EXPENSES RETIREMENT AND FUND COMPLEX(1)
-------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEES
-------------------------------------------------------------------------------------------------------------------
Doran $0 N/A N/A $0 for service on one (1) board
-------------------------------------------------------------------------------------------------------------------
Nesher $0 N/A N/A $0 for service on one (1) board
-------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
-------------------------------------------------------------------------------------------------------------------
Carlbom $[ ] N/A N/A $[ ] for service on one (1) board
-------------------------------------------------------------------------------------------------------------------
Darr $[ ] N/A N/A $[ ] for service on one (1) board
-------------------------------------------------------------------------------------------------------------------
Grause $[ ] N/A N/A $[ ] for service on one (1) board
-------------------------------------------------------------------------------------------------------------------
Johnson $[ ] N/A N/A $[ ] for service on one (1) board
-------------------------------------------------------------------------------------------------------------------
Krikorian $[ ] N/A N/A $[ ] for service on one (1) board
-------------------------------------------------------------------------------------------------------------------
Speca $[ ] N/A N/A $[ ] for service on one (1) board
-------------------------------------------------------------------------------------------------------------------
Storey $[ ] N/A N/A $[ ] for service on one (1) board
-------------------------------------------------------------------------------------------------------------------
Sullivan $[ ] N/A N/A $[ ] for service on one (1) board
-------------------------------------------------------------------------------------------------------------------
|
(1) The Trust is the only investment company in the Fund Complex.
TRUST OFFICERS. Set forth below are the names, dates of birth, position with
the Trust, length of term of office, and the principal occupations for the last
five years of each of the persons currently serving as executive officers of
the Trust. Unless otherwise noted, the business address of each officer is SEI
Investments Company, One Freedom Valley Drive, Oaks, Pennsylvania 19456. The
Chief Compliance Officer is the only officer who receives compensation from the
Trust for his services.
S-40
Certain officers of the Trust also serve as officers of one or more mutual
funds for which SEI Investments Company or its affiliates act as investment
manager, administrator or distributor.
---------------------------------------------------------------------------------------------------------------
NAME AND DATE POSITION WITH TRUST AND LENGTH OF PRINCIPAL OCCUPATIONS IN PAST 5 YEARS
OF BIRTH TERM
---------------------------------------------------------------------------------------------------------------
Michael Beattie President Director of Client Service, SEI Investments
(03/13/65) (since 2011) Company, since 2004.
---------------------------------------------------------------------------------------------------------------
Michael Lawson Treasurer, Controller and Chief Director, SEI Investments, Fund Accounting
Financial Officer since July 2005. Manager, SEI Investments,
(10/08/60) Fund Accounting at SEI Investments AVP from
(since 2005) April 1995 to February 1998 and November
1998 to July 2005.
---------------------------------------------------------------------------------------------------------------
Russell Emery Chief Compliance Officer Chief Compliance Officer of SEI Structured
(since 2006) Credit Fund, LP and SEI Alpha Strategy
(12/18/62) Portfolios, LP since June 2007. Chief
Compliance Officer of The Advisors' Inner
Circle Fund II, Bishop Street Funds, SEI
Institutional Managed Trust, SEI Asset
Allocation Trust, SEI Institutional International
Trust, SEI Institutional Investments Trust, SEI
Daily Income Trust, SEI Liquid Asset Trust, SEI
Tax Exempt Trust, Adviser Managed Trust and
New Covenant Funds. Chief Compliance Officer
of SEI Opportunity Fund, L.P. until 2010.
Director of Investment Product Management and
Development, SEI Investments, since February
2003; Senior Investment Analyst -- Equity Team,
SEI Investments, from March 2000 to February
2003.
---------------------------------------------------------------------------------------------------------------
Timothy D. Vice President and Assistant General Counsel and Secretary of SIMC and the
Barto Secretary Administrator since 2004. Vice President of
(since 1999) SIMC and the Administrator since 1999. Vice
(03/28/68) President and Assistant Secretary of SEI
Investments since 2001. Assistant Secretary of
SIMC, the Administrator and the Distributor,
and Vice President of the Distributor, from 1999
to 2003.
---------------------------------------------------------------------------------------------------------------
Dianne M. Vice President and Secretary Counsel at SEI Investments since 2010.
Sulzbach (since 2011) Associate at Morgan, Lewis & Bockius LLP
from 2006 to 2010. Associate at Morrison &
(07/18/77) Foerster LLP from 2003 to 2006. Associate at
Stradley Ronon Stevens & Young LLP from
2002 to 2003.
---------------------------------------------------------------------------------------------------------------
|
S-41
---------------------------------------------------------------------------------------------------------------
NAME AND DATE POSITION WITH TRUST AND LENGTH OF PRINCIPAL OCCUPATIONS IN PAST 5 YEARS
OF BIRTH TERM
---------------------------------------------------------------------------------------------------------------
John Munch Vice President and Assistant Attorney, SEI Investments Company, since
(05/07/71) Secretary 2001. General Counsel, SEI Investments
(since 2012) Distribution Co., since 2004.
---------------------------------------------------------------------------------------------------------------
Keri Rohn Privacy Officer Compliance Officer at SEI Investments since
(since 2009) 2003.
(8/24/80)
AML Officer
(since 2011)
---------------------------------------------------------------------------------------------------------------
|
PURCHASING AND REDEEMING SHARES
Purchases and redemptions may be made through the Transfer Agent on any day the
New York Stock Exchange ("NYSE") is open for business. Shares of the Fund are
offered and redeemed on a continuous basis. Currently, the Trust is closed for
business when the following holidays are observed: New Year's Day, Martin
Luther King Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving and Christmas.
It is currently the Trust's policy to pay all redemptions in cash. The Trust
retains the right, however, to alter this policy to provide for redemptions in
whole or in part by a distribution in-kind of securities held by the Fund in
lieu of cash. Shareholders may incur brokerage charges on the sale of any such
securities so received in payment of redemptions. A shareholder will at all
times be entitled to aggregate cash redemptions from all funds of the Trust up
to the lesser of $250,000 or 1% of the Trust's net assets during any 90-day
period. The Trust has obtained an exemptive order from the SEC that permits the
Trust to make in-kind redemptions to those shareholders of the Trust that are
affiliated with the Trust solely by their ownership of a certain percentage of
the Trust's investment portfolios.
The Trust reserves the right to suspend the right of redemption and/or to
postpone the date of payment upon redemption for any period on which trading on
the NYSE is restricted, or during the existence of an emergency (as determined
by the SEC by rule or regulation) as a result of which disposal or valuation of
the Fund's securities is not reasonably practicable, or for such other periods
as the SEC has by order permitted. The Trust also reserves the right to suspend
sales of shares of the Fund for any period during which the NYSE, the Adviser,
the Administrator, the Transfer Agent and/or the Custodian are not open for
business.
DETERMINATION OF NET ASSET VALUE
GENERAL POLICY. The Fund adheres to Section 2(a)(41), and Rule 2a-4 thereunder,
of the 1940 Act with respect to the valuation of portfolio securities. In
general, securities for which market quotations are readily available are
valued at current market value, and all other securities are valued at fair
value as determined in good faith by the Board. In complying with the 1940 Act,
the Trust relies on guidance provided by the SEC and by the SEC staff in
various interpretive letters and other guidance.
EQUITY SECURITIES. Securities listed on a securities exchange, market or
automated quotation system for which quotations are readily available (except
for securities traded on NASDAQ), including securities traded over the counter,
are valued at the last quoted sale price on the primary exchange or market
(foreign or domestic) on which they are traded on valuation date (or at
approximately 4:00 p.m., Eastern Time, if a security's primary exchange is
normally open at that time), or, if there is no such reported sale on the
valuation date, at the most recent quoted bid price. For securities traded on
NASDAQ, the NASDAQ Official Closing Price will be used. If such prices are not
available or
S-42
determined to not represent the fair value of the security as of the Fund's
pricing time, the security will be valued at fair value as determined in good
faith using methods approved by the Board.
MONEY MARKET SECURITIES AND OTHER DEBT SECURITIES. If available, money market
securities and other debt securities are priced based upon valuations provided
by recognized independent, third-party pricing agents. Such values generally
reflect the last reported sales price if the security is actively traded. The
third-party pricing agents may also value debt securities by employing
methodologies that utilize actual market transactions, broker-supplied
valuations, or other methodologies designed to identify the market value for
such securities. Such methodologies generally consider such factors as security
prices, yields, maturities, call features, ratings and developments relating to
specific securities in arriving at valuations. Money market securities and
other debt securities with remaining maturities of sixty days or less may be
valued at their amortized cost, which approximates market value. If such prices
are not available or determined to not represent the fair value of the security
as of the Fund's pricing time, the security will be valued at fair value as
determined in good faith using methods approved by the Board.
USE OF THIRD-PARTY INDEPENDENT PRICING AGENTS. Pursuant to contracts with the
Trust's Administrator, market prices for most securities held by the Fund are
provided daily by third-party independent pricing agents that are approved by
the Board. The valuations provided by third-party independent pricing agents
are reviewed daily by the Administrator.
TAXES
The following is only a summary of certain additional federal income tax
considerations generally affecting the Fund and its shareholders that is
intended to supplement the discussion contained in the Fund's prospectus. No
attempt is made to present a detailed explanation of the tax treatment of the
Fund or its shareholders, and the discussion here and in the Fund's prospectus
is not intended as a substitute for careful tax planning. Shareholders are
urged to consult their tax advisors with specific reference to their own tax
situations, including their state and local tax liabilities.
This general discussion of certain federal income tax consequences is based on
the Code and the regulations issued thereunder as in effect on the date of this
SAI. New legislation, as well as administrative changes or court decisions, may
significantly change the conclusions expressed herein, and may have a
retroactive effect with respect to the transactions contemplated herein.
QUALIFICATIONS AS A REGULATED INVESTMENT COMPANY ("RIC"). The Fund intends to
qualify and elect to be treated as a RIC under Subchapter M of the Code. By
following such a policy, the Fund expects to eliminate or reduce to a nominal
amount the federal taxes to which they may be subject. The Board reserves the
right not to maintain the qualification of the Fund as a RIC if it determines
such course of action to be beneficial to shareholders.
In order to be taxable as a RIC, the Fund must distribute at least 90% of its
net investment income (which includes dividends taxable interest, and the
excess of net short-term capital gains over net long-term capital losses, less
operating expenses) and at least 90% of its net tax exempt interest income, for
each tax year, if any, to its shareholders and also must meet several
additional requirements. Among these requirements are the following: (i) at
least 90% of the Fund's gross income each taxable year must be derived from
dividends, interest, payments with respect to certain securities loans, and
gains from the sale or other disposition of stock, securities, or foreign
currencies, or certain other income (including, but not limited to, gains from
options, futures or forward contracts) derived with respect to its business of
investing in such stocks, securities, or currencies, and net income derived
from an interest in a qualified publicly traded partnership (the "Qualifying
Income Test"); (ii) at the close of each quarter of the Fund's taxable year, at
least 50% of the value of the Fund's total assets must be represented by cash
and cash items, U.S. government securities, securities of other RICs and other
securities, with such other securities limited, in respect to any one issuer,
to an amount that does not exceed 5% of the value of the Fund's assets and that
does not represent more than 10% of the outstanding voting securities of such
issuer; and (iii) at the close of each quarter of the Fund's taxable year, not
more than 25% of the value of the Fund's assets may be invested in securities
(other than U.S. government securities or the securities of
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other RICs) of any one issuer or the securities (other than the securities of
another RIC) of two or more issuers that the Fund controls and that are engaged
in the same, similar or related trades or business, or the securities of one or
more qualified publicly traded partnerships (the "Diversification Test").
Although the Fund intends to distribute substantially all of their net
investment income and may distribute their capital gains for any taxable year,
the Fund will be subject to federal income taxation to the extent any such
income or gains are not distributed.
If the Fund fails to satisfy the qualifying income or diversification
requirements in any taxable year, the Fund may be eligible for relief
provisions if the failures are due to reasonable cause and not willful neglect
and if a penalty tax is paid with respect to each failure to satisfy the
applicable requirements. Additionally, relief is provided for certain de
minimis failures of the diversification requirements where the Fund corrects
the failure within a specified period. If the Fund fails to qualify for any
taxable year as a RIC and these relief provisions are not available, all of its
taxable income will be subject to tax at regular corporate income tax rates
without any deduction for distributions to shareholders, and such distributions
generally will be taxable to shareholders as ordinary dividends to the extent
of the Fund's current and accumulated earnings and profits. In this event,
distributions generally will be eligible for the dividend-received deduction
for corporate shareholders and for the lower capital gains rates on qualified
dividend income for individual shareholders to the extent they would qualify if
the Fund was a regular corporation. In addition, the Fund could be required to
recognize unrealized gains, pay substantial taxes and interest, and make
substantial distributions before requalifying as a RIC.
For taxable years beginning after December 22, 2010, the Fund may elect to
treat part or all of any "qualified late year loss" as if it had been incurred
in the succeeding taxable year in determining the Fund's taxable income, net
capital gain, net short-term capital gain, and earnings and profits. The effect
of this election is to treat any such "qualified late year loss" as if it had
been incurred in the succeeding taxable year in characterizing Fund
distributions for any calendar. A "qualified late year loss" generally includes
net capital loss, net long-term capital loss, or net short-term capital loss
incurred after October 31 of the current taxable year (commonly referred to as
"post-October losses") and certain other late-year losses.
If the Fund has a "net capital loss" (that is, capital losses in excess of
capital gains) for a taxable year beginning after December 22, 2010 (a
"Post-2010 Loss"), the excess of the Fund's net short-term capital losses over
its net long-term capital gains is treated as a short-term capital loss arising
on the first day of the Fund's next taxable year, and the excess (if any) of
the Fund's net long-term capital losses over its net short-term capital gains
is treated as a long-term capital loss arising on the first day of the Fund's
next taxable year. The Fund's unused capital loss carryforwards that arose in
taxable years that began on or before December 22, 2010 ("Pre-2011 Losses") are
available to be applied against future capital gains, if any, realized by the
Fund prior to the expiration of those carryforwards, generally eight years
after the year in which they arose. The Fund's Post-2010 Losses must be fully
utilized before the Fund will be permitted to utilize carryforwards of Pre-2011
Losses. In addition, the carryover of capital losses may be limited under the
general loss limitation rules if the Fund experiences an ownership change as
defined in the Code.
FEDERAL EXCISE TAX. If the Fund fails to distribute in a calendar year at least
98% of its ordinary income for the year and 98.2% of its capital gain net
income (the excess of short- and long-term capital gains over short- and
long-term capital losses) for the one-year period ending October 31 of that
year (and any retained amount from the prior calendar year on which the Fund
paid no federal income tax), the Fund will be subject to a nondeductible 4%
Federal excise tax on the undistributed amounts. The Fund intends to make
sufficient distributions to avoid imposition of this tax, or to retain, at most
their net capital gains and pay tax thereon.
DISTRIBUTIONS TO SHAREHOLDERS. The Fund may derive capital gains and losses in
connection with sales or other dispositions of their portfolio of securities.
Distributions of net short-term capital gains will be taxable to you as
ordinary income. Distributions of net long-term capital gains will be taxable
to you as long-term capital gain regardless of how long you have held your
shares. Distributions of dividends will be taxed as ordinary income except
that
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distributions of qualified dividend income will be taxed at the lower capital
gains rates available for individual shareholders.
Certain distributions by the Fund may be eligible for the reduced maximum tax
rate to individuals of 20% (lower rates apply to individuals in lower tax
brackets) to the extent that the Fund receives qualified dividend income on the
securities it holds and the Fund designates the distributions as qualified
dividend income. A distribution from the Fund generally qualifies as qualified
dividend income to the extent it is designated as such by the Fund and was
distributed from dividends received by the Fund from taxable domestic
corporations and certain qualified foreign corporations, subject to limitations
including holding period limitations, imposed on the Fund and its shareholders.
Distributions the Fund receives from REITs generally will not be treated as
qualified dividend income. Capital gain distributions consisting of the Fund's
net capital gains will be taxable as long-term capital gains at a maximum rate
of 20%.
The Fund will inform you of the amount of your ordinary income dividends,
qualified dividend income and capital gain distributions, if any, at the time
they are paid and will advise you of their tax status for federal income tax
purposes shortly after the close of each calendar year. REITs in which the Fund
may invest often do not provide complete and final tax information until after
the time that the Fund issues the tax reporting statement. As a result, the
Fund may at times find it necessary to reclassify the amount and character of
its distributions to you after it issues your tax reporting statement. When
such reclassification is necessary, the Fund will send you a corrected, final
Form 1099-DIV to reflect the reclassified information. If you receive a
corrected Form 1099-DIV, use the information on this corrected form, and not
the information on the previously issued tax reporting statement, in completing
your tax returns. If you have not held Fund shares for a full year, the Fund
may designate and distribute to you, as ordinary income, qualified dividend
income or capital gain, a percentage of income that is not equal to the actual
amount of such income earned during the period of your investment in the Fund.
If the Fund's distributions exceed its taxable income and capital gains
realized during a taxable year, all or a portion of the distributions made in
the same taxable year may be recharacterized as a return of capital to
shareholders. A return of capital distribution will generally not be taxable,
but will reduce each shareholder's cost basis in the Fund and result in a
higher reported capital gain or lower reported capital loss when those shares
on which the distribution was received are sold.
A dividend or distribution received shortly after the purchase of shares
reduces the net asset value of the shares by the amount of the dividend or
distribution and, although in effect a return of capital, will be taxable to
the shareholder. If the net asset value of shares were reduced below the
shareholder's cost by dividends or distributions representing gains realized on
sales of securities, such dividends or distributions would be a return of
investment though taxable to the shareholder in the same manner as other
dividends or distributions.
Dividends declared to shareholders of record in October, November or December
and actually paid in January of the following year will be treated as having
been received by shareholders on December 31 of the calendar year in which
declared. Under this rule, therefore, a shareholder may be taxed in one year on
dividends or distributions actually received in January of the following year.
In the case of corporate shareholders, Fund distributions (other than capital
gains distributions) generally qualify for the dividend-received deduction to
the extent such distributions are so designated and do not exceed the gross
amount of qualifying dividends received by the Fund for the year. Generally,
and subject to certain limitations (including certain holding period
limitations), a dividend will be treated as a qualifying dividend if it has
been received from a domestic corporation. All such qualifying dividends
(including the deducted portion) must be included in your alternative minimum
taxable income calculation.
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SALES OR REDEMPTIONS. Any gain or loss recognized on a sale or redemption of
shares of the Fund by a shareholder who is not a dealer in securities will
generally, for individual shareholders, be treated as a long-term capital gain
or loss if the shares have been held for more than twelve months and otherwise
will be treated as a short-term capital gain or loss. However, if shares on
which a shareholder has received a net capital gain distribution are
subsequently sold or redeemed and such shares have been held for six months or
less, any loss recognized will be treated as a long-term capital loss to the
extent of the net capital gain distribution. In addition, the loss realized on
a sale or other disposition of shares will be disallowed to the extent a
shareholder repurchases (or enters into a contract to or option to repurchase)
shares within a period of 61 days (beginning 30 days before and ending 30 days
after the disposition of the shares). This loss disallowance rule will apply to
shares received through the reinvestment of dividends during the 61-day
period.
In certain cases, the Fund will be required to withhold at a rate of 28% and
remit to the United States Treasury, back up withholding on any distributions
paid to a shareholder who (1) has failed to provide a correct taxpayer
identification number, (2) is subject to backup withholding by the Internal
Revenue Service ("IRS"), (3) has not certified to the Fund that such
shareholder is not subject to backup withholding, or (4) has failed to certify
that he or she is a U.S. citizen or U.S. resident alien.
The Fund (or its administrative agent) must report to the IRS and furnish to
Fund shareholders the cost basis information for Fund shares purchased on or
after January 1, 2012, and sold on or after that date. In addition, the Fund is
also required to report the cost basis information for such shares and indicate
whether these shares had a short-term or long-term holding period. For each
sale of Fund shares the Fund will permit Fund shareholders to elect from among
several IRS-accepted cost basis methods, including the average basis. In the
absence of an election, the Fund will use the average basis method as its
default cost basis method. The cost basis method elected by the Fund
shareholder (or the cost basis method applied by default) for each sale of Fund
shares may not be changed after the settlement date of each such sale of Fund
shares. Fund shareholders should consult with their tax advisors to determine
the best IRS-accepted cost basis method for their tax situation and to obtain
more information about how the new cost basis reporting law applies to them.
The requirement to report only the gross proceeds from the sale of Fund shares
continues to apply to all Fund shares acquired through December 31, 2011, and
sold on and after that date.
Beginning January 1, 2013, U.S. individuals with income exceeding $200,000
($250,000 if married and filing jointly) are subject to a 3.8% Medicare
contribution tax on their "net investment income," including interest,
dividends, and capital gains (including capital gains realized on the sale or
exchange of Fund shares).
The Fund may invest in complex securities. These investments may be subject to
numerous special and complex tax rules. These rules could affect whether gains
and losses recognized by the Fund are treated as ordinary income or capital
gain, accelerate the recognition of income to the Fund and/or defer the Fund's
ability to recognize losses. In turn, those rules may affect the amount, timing
or character of the income distributed to you by the Fund.
With respect to investments in STRIPS, TRs, and other zero coupon securities
which are sold at original issue discount and thus do not make periodic cash
interest payments, the Fund will be required to include as part of its current
income the imputed interest on such obligations even though the Fund has not
received any interest payments on such obligations during that period. Because
the Fund distributes all of its net investment income to its shareholders, the
Fund may have to sell Fund securities to distribute such imputed income which
may occur at a time when the Adviser would not have chosen to sell such
securities and which may result in taxable gain or loss.
The Fund may invest in certain MLPs which may be treated as qualified publicly
traded partnerships. Income from qualified publicly traded partnerships is
qualifying income for purposes of the Qualifying Income Test, but the Fund's
investment in one or more of such qualified publicly traded partnerships is
limited under the Diversification Test to no more than 25% of the value of the
Fund's assets. The Fund will monitor its investment in such qualified publicly
traded partnerships in order to ensure compliance with the Qualifying Income
Test.
S-46
The Fund may invest in certain royalty trusts. The taxation of a royalty trust
for U.S. tax purposes depends on the particular structure used by such trust
and may be different from trust to trust. For example, some royalty trusts are
taxable for U.S. tax purposes as grantor trusts, while others are taxable as
corporations for U.S. tax purposes. The Fund will monitor its investment in
such royalty trusts in order to ensure compliance with the Qualifying Income
and Diversification Tests. There may be uncertainty regarding the Fund's
compliance with these tests because compliance depends on the amount and
character of income it receives and the type of security it holds from the
royalty trusts. As a result, the Fund may fail to qualify as a RIC in a given
tax year in which it fails the Qualifying Income Test or the Diversification
Test. See discussion regarding the consequences of failing to qualify as a RIC
above.
The Fund may invest in entities taxable as REITs under the Code. Investments in
REIT equity securities may require the Fund to accrue and distribute income not
yet received. To generate sufficient cash to make the requisite distributions,
the Fund may be required to sell securities in its portfolio (including when it
is not advantageous to do so) that it otherwise would have continued to hold.
The Fund's investments in REIT equity securities may at other times result in
the Fund's receipt of cash in excess of the REIT's earnings if the Fund
distributes these amounts, these distributions could constitute a return of
capital to Fund shareholders for federal income tax purposes. Dividends paid by
a REIT, other than capital gain distributions, will be taxable as ordinary
income up to the amount of the REIT's current and accumulated earnings and
profits. Capital gain dividends paid by a REIT to the Fund will be treated as
long-term capital gains by the Fund and, in turn, may be distributed by the
Fund to its shareholders as a capital gain distribution. Dividends received by
the Fund from a REIT generally will not constitute qualified dividend income
and will not qualify for the dividends received deduction. If a REIT is
operated in a manner such that it fails to qualify as a REIT, an investment in
the REIT would become subject to double taxation, meaning the taxable income of
the REIT would be subject to federal income tax at regular corporate rates
without any deduction for dividends paid to shareholders and the dividends
would be taxable to shareholders as ordinary income (or possibly as qualified
dividend income) to the extent of the REIT's current and accumulated earnings
and profits.
Certain tax-exempt shareholders, including qualified pension plans, individual
retirement accounts, salary deferral arrangements, 401(k)s, and other
tax-exempt entities, generally are exempt from federal income taxation except
with respect to their unrelated business taxable income ("UBTI"). Under current
law, the Fund generally serves to block UBTI from being realized by its
tax-exempt shareholders. However, notwithstanding the foregoing, the tax-exempt
shareholder could realize UBTI by virtue of an investment in the Fund where,
for example: (i) the Fund invests in residual interests of Real Estate Mortgage
Investment Conduits (REMICs); (ii) the Fund invests in a REIT that is a taxable
mortgage pool (TMP) or that has a subsidiary that is a TMP or that invests in
the residual interest of a REMIC; or (iii) shares in the Fund constitute
debt-financed property in the hands of the tax-exempt shareholder within the
meaning of section 514(b) of the Code. Charitable remainder trusts are subject
to special rules and should consult their tax advisor. The IRS has issued
guidance with respect to these issues and prospective shareholders, especially
charitable remainder trusts, are encouraged to consult with their tax advisors
regarding these issues.
Transactions by the Fund in foreign currencies and forward foreign currency
contracts will be subject to special provisions of the Code that, among other
things, may affect the character of gains and losses realized by the Fund
(i.e., may affect whether gains or losses are ordinary or capital), accelerate
recognition of income to the Fund and defer losses. These rules could therefore
affect the character, amount and timing of distributions to shareholders. These
provisions also may require the Fund to mark-to-market certain types of
positions in its portfolio (i.e., treat them as if they were closed out) which
may cause the Fund to recognize income without receiving cash with which to
make distributions in amounts necessary to satisfy the distribution
requirements for avoiding income and excise taxes. The Fund intends to monitor
its transactions, intends to make the appropriate tax elections, and intends to
make the appropriate entries in its books and records when it acquires any
foreign currency or forward foreign currency contract in order to mitigate the
effect of these rules so as to prevent disqualification of the Fund as a RIC
and minimize the imposition of income and excise taxes.
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If the Fund owns shares in certain foreign investment entities, referred to as
"passive foreign investment companies" or "PFIC," the Fund will be subject to
one of the following special tax regimes: (i) the Fund will be liable for
federal income tax, and an additional interest charge, on a portion of any
"excess distribution" from such foreign entity or any gain from the disposition
of such shares, even if the entire distribution or gain is paid out by the Fund
as a dividend to its shareholders; (ii) if the Fund is able and elect to treat
a PFIC as a "qualifying electing fund" or "QEF," the Fund would be required
each year to include in income, and distribute to shareholders in accordance
with the distribution requirements set forth above, the Fund's pro rata share
of the ordinary earnings and net capital gains of the PFIC, whether or not such
earnings or gains are distributed to the Fund; or (iii) annually the Fund may
be entitled to mark-to-market shares of the PFIC, and in such event, would be
required to distribute to shareholders any such mark-to-market gains in
accordance with the distribution requirements set forth above and any
market-to-market losses, as well as loss from an actual disposition of PFIC
stock, would be reported as ordinary loss to the extent of any net
market-to-market gains included in income in prior years.
FOREIGN TAXES. Dividends and interest received by the Fund may be subject to
income, withholding or other taxes imposed by foreign countries and United
States possessions that would reduce the yield on the Fund's securities. Tax
conventions between certain countries and the United States may reduce or
eliminate these taxes. Foreign countries generally do not impose taxes on
capital gains with respect to investments by foreign investors. If more than
50% of the value of the Fund's total assets at the close of its taxable year
consists of stock or securities of foreign corporations, the Fund will be
eligible to, and will, file an election with the IRS that will enable
shareholders, in effect, to receive the benefit of the foreign tax credit with
respect to any foreign and United States possessions income taxes paid by the
Fund. Pursuant to the election, the Fund will treat those taxes as dividends
paid to its shareholders. Each shareholder will be required to include a
proportionate share of those taxes in gross income as income received from a
foreign source and must treat the amount so included as if the shareholder had
paid the foreign tax directly. The shareholder may then either deduct the taxes
deemed paid by him or her in computing his or her taxable income or,
alternatively, use the foregoing information in calculating the foreign tax
credit (subject to significant limitations) against the shareholder's federal
income tax. If the Fund makes the election, it will report annually to its
shareholders the respective amounts per share of the Fund's income from sources
within, and taxes paid to, foreign countries and United States possessions.
Foreign tax credits, if any, received by the Fund as a result of an investment
in an ETF which is taxable as a RIC will generally not be passed through to
you.
Most foreign exchange gains realized on the sale of debt securities are treated
as ordinary income by the Fund. Similarly, foreign exchange losses realized by
the Fund on the sale of debt securities are generally treated as ordinary
losses by the Fund. These gains when distributed will be taxed to you as
ordinary dividends, and any losses will reduce the Fund's ordinary income
otherwise available for distribution to you. This treatment could increase or
reduce the Fund's ordinary income distributions to you, and may cause some or
all of the Fund's previously distributed income to be classified as a return of
capital.
Under U.S. Treasury regulations, generally, if an individual shareholder
recognizes a loss of $2 million or more or a corporate shareholder recognizes a
loss of $10 million or more, the shareholder must file with the IRS 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 such as the Fund are not excepted. Future
guidance may extend the current exception from this reporting requirement to
shareholders of most or all RICs. 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.
Any non-U.S. investors in the Fund may be subject to U.S. withholding and
estate tax and are encouraged to consult their tax advisors prior to investing
in the Fund.
A U.S. withholding tax at a 30% rate will be imposed on dividends beginning
after December 31, 2013 (and proceeds
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of sales in respect of Fund shares received by Fund shareholders beginning
after December 31, 2016) for shareholders who own their shares through foreign
accounts or foreign intermediaries if certain disclosure requirements related
to U.S. accounts or ownership are not satisfied. The Fund will not pay any
additional amounts in respect to any amounts withheld.
STATE TAXES. It is expected that the Fund will not be liable for any corporate
excise, income or franchise tax in Massachusetts if it qualifies as a RIC for
federal income tax purposes. Distributions by the Fund to shareholders and the
ownership of shares may be subject to state and local taxes. Shareholders are
urged to consult their tax advisors regarding state and local taxes applicable
to an investment in the Fund.
Many states grant tax-free status to dividends paid to you from interest earned
on direct obligations of the U.S. government, subject in some states to minimum
investment requirements that must be met by a fund. Investment in Ginnie Mae or
Fannie Mae securities, banker's acceptances, commercial paper, and repurchase
agreements collateralized by U.S. government securities do not generally
qualify for such tax-free treatment. The rules on exclusion of this income are
different for corporate shareholders.
FUND TRANSACTIONS
BROKERAGE TRANSACTIONS. Generally, equity securities, both listed and
over-the-counter, are bought and sold through brokerage transactions for which
commissions are payable. Purchases from underwriters will include the
underwriting commission or concession, and purchases from dealers serving as
market makers will include a dealer's mark-up or reflect a dealer's mark-down.
Money market securities and other debt securities are usually bought and sold
directly from the issuer or an underwriter or market maker for the securities.
Generally, the Fund will not pay brokerage commissions for such purchases. When
a debt security is bought from an underwriter, the purchase price will usually
include an underwriting commission or concession. The purchase price for
securities bought from dealers serving as market makers will similarly include
the dealer's mark up or reflect a dealer's mark down. When the Fund executes
transactions in the over-the-counter market, they will generally deal with
primary market makers unless prices that are more favorable are otherwise
obtainable.
In addition, the Adviser may place a combined order for two or more accounts it
manages, including the Fund, engaged in the purchase or sale of the same
security if, in its judgment, joint execution is in the best interest of each
participant and will result in best price and execution. Transactions involving
commingled orders are allocated in a manner deemed equitable to each account or
fund. Although it is recognized that, in some cases, the joint execution of
orders could adversely affect the price or volume of the security that a
particular account or the Fund may obtain, it is the opinion of the Adviser
that the advantages of combined orders outweigh the possible disadvantages of
separate transactions. Nonetheless, the Adviser believes that the ability of
the Fund to participate in higher volume transactions will generally be
beneficial to the Fund.
BROKERAGE SELECTION. The Trust does not expect to use one particular broker or
dealer, and when one or more brokers is believed capable of providing the best
combination of price and execution, the Fund's Adviser may select a broker
based upon brokerage or research services provided to the Adviser. The Adviser
may pay a higher commission than otherwise obtainable from other brokers in
return for such services only if a good faith determination is made that the
commission is reasonable in relation to the services provided.
Section 28(e) of the 1934 Act permits the Adviser, under certain circumstances,
to cause the Fund to pay a broker or dealer a commission for effecting a
transaction in excess of the amount of commission another broker or dealer
would have charged for effecting the transaction in recognition of the value of
brokerage and research services provided by the broker or dealer. In addition
to agency transactions, the Adviser may receive brokerage and research services
in connection with certain riskless principal transactions, in accordance with
applicable SEC guidance. Brokerage and research services include: (1)
furnishing advice as to the value of securities, the advisability of investing
in, purchasing
S-49
or selling securities, and the availability of securities or purchasers or
sellers of securities; (2) furnishing analyses and reports concerning issuers,
industries, securities, economic factors and trends, portfolio strategy, and
the performance of accounts; and (3) effecting securities transactions and
performing functions incidental thereto (such as clearance, settlement, and
custody). In the case of research services, the Adviser believes that access to
independent investment research is beneficial to their investment
decision-making processes and, therefore, to the Fund.
To the extent research services may be a factor in selecting brokers, such
services may be in written form or through direct contact with individuals and
may include information as to particular companies and securities as well as
market, economic, or institutional areas and information which assists in the
valuation and pricing of investments. Examples of research-oriented services
for which the Adviser might utilize Fund commissions include research reports
and other information on the economy, industries, sectors, groups of
securities, individual companies, statistical information, political
developments, technical market action, pricing and appraisal services, credit
analysis, risk measurement analysis, performance and other analysis. The
Adviser may use research services furnished by brokers in servicing all client
accounts and not all services may necessarily be used by the Adviser in
connection with the Fund or any other specific client account that paid
commissions to the broker providing such services. Information so received by
the Adviser will be in addition to and not in lieu of the services required to
be performed by the Fund's Adviser under the Advisory Agreement. Any advisory
or other fees paid to the Adviser are not reduced as a result of the receipt of
research services.
In some cases the Adviser may receive a service from a broker that has both a
"research" and a "non-research" use. When this occurs, the Adviser makes a good
faith allocation, under all the circumstances, between the research and
non-research uses of the service. The percentage of the service that is used
for research purposes may be paid for with client commissions, while the
Adviser will use its own funds to pay for the percentage of the service that is
used for non-research purposes. In making this good faith allocation, the
Adviser faces a potential conflict of interest, but the Adviser believes that
its allocation procedures are reasonably designed to ensure that it
appropriately allocates the anticipated use of such services to their research
and non-research uses.
From time to time, the Fund may purchase new issues of securities for clients
in a fixed price offering. In these situations, the seller may be a member of
the selling group that will, in addition to selling securities, provide the
adviser with research services. The Financial Industry Regulatory Authority
("FINRA") has adopted rules expressly permitting these types of arrangements
under certain circumstances. Generally, the seller will provide research
"credits" in these situations at a rate that is higher than that which is
available for typical secondary market transactions. These arrangements may
not fall within the safe harbor of Section 28(e).
BROKERAGE WITH FUND AFFILIATES. The Fund may execute brokerage or other agency
transactions through registered broker-dealer affiliates of either the Fund,
the Adviser or the Distributor for a commission in conformity with the 1940
Act, the 1934 Act and rules promulgated by the SEC. These rules require that
commissions paid to the affiliate by the Fund for exchange transactions not
exceed "usual and customary" brokerage commissions. The rules define "usual and
customary" commissions to include amounts which are "reasonable and fair
compared to the commission, fee or other remuneration received or to be
received by other brokers in connection with comparable transactions involving
similar securities being purchased or sold on a securities exchange during a
comparable period of time." The Trustees, including those who are not
"interested persons" of the Fund, have adopted procedures for evaluating the
reasonableness of commissions paid to affiliates and review these procedures
periodically.
SECURITIES OF "REGULAR BROKER-DEALERS." The Fund is required to identify any
securities of its "regular brokers and dealers" (as such term is defined in the
1940 Act) that the Fund held during its most recent fiscal year. Because the
Fund is new, as of the date of this SAI, the Fund does not hold any securities
of "regular brokers and dealers."
PORTFOLIO TURNOVER RATES. Portfolio turnover rate is defined under SEC rules as
the greater of the value of the securities purchased or securities sold,
excluding all securities whose maturities at the time of acquisition were
one-year
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or less, divided by the average monthly value of such securities owned during
the year. Based on this definition, instruments with remaining maturities of
less than one-year are excluded from the calculation of the portfolio turnover
rate. Instruments excluded from the calculation of portfolio turnover generally
would include the futures contracts in which the Fund may invest since such
contracts generally have remaining maturities of less than one-year. The Fund
may at times hold investments in other short-term instruments, such as
repurchase agreements, which are excluded for purposes of computing portfolio
turnover.
PORTFOLIO HOLDINGS
The Board has approved a policy and procedures that govern the timing and
circumstances regarding the disclosure of Fund portfolio holdings information
to shareholders and third parties. These policies and procedures are designed
to ensure that disclosure of information regarding the Fund's portfolio
securities is in the best interests of the Fund's shareholders, and include
procedures to address conflicts between the interests of the Fund's
shareholders, on the one hand, and those of the Fund's Adviser, principal
underwriter, or any affiliated person of the Fund, the Adviser, or the
principal underwriter, on the other. Pursuant to such procedures, the Board has
authorized the Adviser's Chief Compliance Officer ("Adviser CCO") to authorize
the release of the Fund's portfolio holdings, as necessary, in conformity with
the foregoing principles. The Adviser CCO, either directly or through reports
by the Fund's Chief Compliance Officer, reports quarterly to the Board
regarding the operation and administration of such policies and procedures.
Pursuant to applicable law, the Fund is required to disclose its complete
portfolio holdings quarterly, within 60 days of the end of each fiscal quarter
(currently, each March 31, June 30, September 30, and December 31). The Fund
will disclose a complete or summary schedule of investments (which includes the
Fund's 50 largest holdings in unaffiliated issuers and each investment in
unaffiliated issuers that exceeds one percent of the Fund's net asset value
("Summary Schedule")) in its Semi-Annual and Annual Reports which are
distributed to the Fund's shareholders. The Fund's complete schedule of
investments following the first and third fiscal quarters will be available in
quarterly holdings reports filed with the SEC on Form N-Q, and the Fund's
complete schedule of investments following the second and fourth fiscal
quarters will be available in shareholder reports filed with the SEC on Form
N-CSR.
Reports filed with the SEC on Form N-Q and Form N-CSR are not distributed to
the Fund's shareholders but are available, free of charge, on the EDGAR
database on the SEC's website at www.sec.gov. Should the Fund include only a
Summary Schedule rather than a complete schedule of investments in its
Semi-Annual and Annual Reports, its Form N-CSR will be available without
charge, upon request, by calling [ ].[The Fund provides information about its
complete portfolio holdings within 60 days after the end of each calendar
quarter on the internet at www.sarofim.com.]
In addition to information provided to shareholders and the general public,
portfolio holdings information may be disclosed as frequently as daily to
certain service providers, such as the custodian, administrator or transfer
agent, in connection with their services to the Fund. From time to time rating
and ranking organizations, such as S&P, Lipper and Morningstar, Inc., may
request non-public portfolio holdings information in connection with rating the
Fund. Similarly, institutional investors, financial planners, pension plan
sponsors and/or their consultants or other third-parties may request portfolio
holdings information in order to assess the risks of the Fund's portfolio along
with related performance attribution statistics. The lag time for such
disclosures will vary. The Fund believes that these third parties have
legitimate objectives in requesting such portfolio holdings information.
The Fund's policies and procedures provide that the Adviser's CCO may authorize
disclosure of non-public portfolio holdings information to such parties at
differing times and/or with different lag times. Prior to making any disclosure
to a third party, the Adviser's CCO must determine that such disclosure serves
a reasonable business purpose, is in the best interests of the Fund's
shareholders and that to the extent conflicts between the interests of the
Fund's shareholders and those of the Fund's Adviser, principal underwriter, or
any affiliated person of the Fund exist, such conflicts are
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addressed. Portfolio holdings information may be disclosed no more frequently
than monthly to ratings agencies, consultants and other qualified financial
professionals or individuals. The disclosures will not be made sooner than
three days after the date of the information. The Fund's Chief Compliance
Officer will regularly review these arrangements and will make periodic reports
to the Board regarding disclosure pursuant to such arrangements.
With the exception of disclosures to rating and ranking organizations as
described above, the Fund requires any third party receiving non-public
holdings information to enter into a confidentiality agreement with the
Adviser. The confidentiality agreement provides, among other things, that
non-public portfolio holdings information will be kept confidential and that
the recipient has a duty not to trade on the non-public information and will
use such information solely to analyze and rank the Fund, or to perform due
diligence and asset allocation, depending on the recipient of the information.
The Fund's policies and procedures prohibit any compensation or other
consideration from being paid to or received by any party in connection with
the disclosure of portfolio holdings information, including the Fund, Adviser
and its affiliates or recipients of the Fund's portfolio holdings information.
DESCRIPTION OF SHARES
The Declaration of Trust authorizes the issuance of an unlimited number of
funds and shares of each fund, each of which represents an equal proportionate
interest in that fund with each other share. Shares are entitled upon
liquidation to a pro rata share in the net assets of the fund. Shareholders
have no preemptive rights. The Declaration of Trust provides that the Trustees
of the Trust may create additional series or class of shares. All consideration
received by the Trust for shares of any additional funds and all assets in
which such consideration is invested would belong to that fund and would be
subject to the liabilities related thereto. Share certificates representing
shares will not be issued. The Fund's shares, when issued, are fully paid and
non-assessable.
SHAREHOLDER LIABILITY
The Trust is an entity of the type commonly known as a "Massachusetts business
trust." Under Massachusetts law, shareholders of such a trust could, under
certain circumstances, be held personally liable as partners for the
obligations of the Trust. Even if, however, the Trust were held to be a
partnership, the possibility of the shareholders incurring financial loss for
that reason appears remote because the Trust's Declaration of Trust contains an
express disclaimer of shareholder liability for obligations of the Trust and
requires that notice of such disclaimer be given in each agreement, obligation
or instrument entered into or executed by or on behalf of the Trust or the
Trustees, and because the Declaration of Trust provides for indemnification out
of the Trust property for any shareholder held personally liable for the
obligations of the Trust.
LIMITATION OF TRUSTEES' LIABILITY
The Declaration of Trust provides that a Trustee shall be liable only for his
or her own willful defaults and, if reasonable care has been exercised in the
selection of officers, agents, employees or investment advisers, shall not be
liable for any neglect or wrongdoing of any such person. The Declaration of
Trust also provides that the Trust will indemnify its Trustees and officers
against liabilities and expenses incurred in connection with actual or
threatened litigation in which they may be involved because of their offices
with the Trust unless it is determined in the manner provided 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. However,
nothing in the Declaration of Trust shall protect or indemnify a Trustee
against any liability for his or her willful misfeasance, bad faith, gross
negligence or reckless disregard of his or her duties. Nothing contained in
this section attempts to disclaim a Trustee's individual liability in any
manner inconsistent with the federal securities laws.
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PROXY VOTING
The Board has delegated responsibility for decisions regarding proxy voting for
securities held by the Fund to the Adviser. The Adviser will vote such proxies
in accordance with its proxy policies and procedures, which are included in
Appendix B to this SAI. The Board will periodically review the Fund's proxy
voting record.
The Trust is required to disclose annually the Fund's complete proxy voting
record during the most recent 12-month period ended June 30 on Form N-PX. This
voting record is available: (i) without charge, upon request, by calling [ ];
and (ii) on the SEC's website at http://www.sec.gov.
CODE OF ETHICS
The Board on behalf of the Trust has adopted a Code of Ethics pursuant to Rule
17j-1 under the 1940 Act. In addition, the Adviser, the Administrator and the
Distributor have adopted Codes of Ethics pursuant to Rule 17j-1. These Codes of
Ethics apply to the personal investing activities of trustees, officers and
certain employees ("Access Persons"). Rule 17j-1 and the Codes are designed to
prevent unlawful practices in connection with the purchase or sale of
securities by Access Persons. Under each Code of Ethics, Access Persons are
permitted to invest in securities, including securities that may be purchased
or held by the Fund, but are required to report their personal securities
transactions for monitoring purposes. In addition, certain Access Persons are
required to obtain approval before investing in initial public offerings or
private placements or are prohibited from making such investments. Copies of
these Codes of Ethics are on file with the SEC, and are available to the
public.
5% AND 25% SHAREHOLDERS
Because the Fund is new, as of the date of this SAI, the Fund does not have any
beneficial owners to report.
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PART C: OTHER INFORMATION
ITEM 28. EXHIBITS:
(a)(1) Amended and Restated Agreement and Declaration of Trust of The Advisors'
Inner Circle Fund (the "Registrant") dated July 18, 1991, as amended and
restated February 18, 1997, is incorporated herein by reference to exhibit
(1)(b) of Post-Effective Amendment No. 28 to the Registrant's Registration
Statement on Form N-1A (File No. 33-42484), filed with the U.S. Securities and
Exchange Commission (the "SEC") via EDGAR Accession No. 0000950109-97-001691 on
February 27, 1997.
(a)(2) Amendment No. 1, dated May 15, 2012, to the Registrant's Amended and
Restated Agreement and Declaration of Trust dated July 18, 1991, as amended and
restated February 18, 1997, is incorporated herein by reference to exhibit
(a)(2) of Post-Effective Amendment No. 190 to the Registrant's Registration
Statement on Form N-1A (File No. 33-42484), filed with the SEC via EDGAR
Accession No. 0001135428-12-000262 on May 23, 2012.
(b) Registrant's Second Amended and Restated By-Laws are incorporated herein by
reference to exhibit (b) of Post-Effective Amendment No. 179 to the Registrant's
Registration Statement on Form N-1A (File No. 33-42484), filed with the SEC via
EDGAR Accession No. 0001135428-12-000087 on February 28, 2012.
(c) Not Applicable.
(d)(1) Investment Advisory Agreement dated August 15, 1994 between the
Registrant and HGK Asset Management, Inc. is incorporated herein by reference
to exhibit (5)(e) of Post- Effective Amendment No. 24 to the Registrant's
Registration Statement on Form N-1A (File No. 33-42484), filed with the SEC via
EDGAR Accession No. 0000950109-96- 001199 on February 28, 1996.
(d)(2) Expense Limitation Agreement dated March 1, 2008 between the Registrant
and HGK Asset Management, Inc. is incorporated herein by reference to exhibit
(d)(2) of Post- Effective Amendment No. 111 to the Registrant's Registration
Statement on Form N-1A (File No. 33-42484), filed with the SEC via EDGAR
Accession No. 0001135428-09-000276 on July 2, 2009.
(d)(3) Revised Schedule A dated March 1, 2010 to the Expense Limitation
Agreement dated March 1, 2008 between the Registrant and HGK Asset Management,
Inc. is incorporated herein by reference to exhibit (d)(3) of Post-Effective
Amendment No. 124 to the Registrant's Registration Statement on Form N-1A (File
No. 33-42484), filed with the SEC via EDGAR Accession No. 0001135428-10-000245
on June 30, 2010.
(d)(4) Investment Advisory Agreement dated November 21, 1994 between the
Registrant and AIG Global Investment Corp. (now, AIG Asset Management (U.S.),
LLC) is incorporated herein by reference to exhibit (5)(f) of Post-Effective
Amendment No. 28 to the Registrant's Registration Statement on Form N-1A (File
No. 33-42484), filed with the SEC via EDGAR Accession No. 0000950109-97-001691
on February 27, 1997.
(d)(5) Assignment and Assumption Agreement dated December 31, 2003 between AIG
Capital Management Corp. and AIG Global Investment Corp. (now, AIG Asset
Management (U.S.), LLC) is incorporated herein by reference to exhibit (d)(31)
of Post-Effective Amendment No. 69 to the Registrant's Registration Statement
on Form N-1A (File No. 33-42484), filed with the SEC via EDGAR Accession No.
0001135428-04-000095 on March 1, 2004.
1
(d)(6) Investment Advisory Agreement dated May 3, 1995 between the Registrant
and First Manhattan Co. is incorporated herein by reference to exhibit (5)(g)
of Post-Effective Amendment No. 24 to the Registrant's Registration Statement
on Form N-1A (File No. 33-42484), filed with the SEC via EDGAR Accession No.
0000950109-96-001199 on February 28, 1996.
(d)(7) Amended and Restated Schedule dated May 19, 1998 to the Investment
Advisory Agreement dated May 3, 1995 between the Registrant and First Manhattan
Co. is incorporated herein by reference to exhibit (d)(9) of Post-Effective
Amendment No. 34 to the Registrant's Registration Statement on Form N-1A (File
No. 33-42484), filed with the SEC via EDGAR Accession No. 0001047469-98-021496
on May 21, 1998.
(d)(8) Investment Advisory Agreement dated March 15, 1999 between the
Registrant and LSV Asset Management is incorporated herein by reference to
exhibit (d)(8) of Post-Effective Amendment No. 46 to the Registrant's
Registration Statement on Form N-1A (File No. 33-42484), filed with the SEC via
EDGAR Accession No. 0001135428-01-500070 on June 22, 2001.
(d)(9) Revised Schedule to the Investment Advisory Agreement dated March 15,
1999 between the Registrant and LSV Asset Management is incorporated herein by
reference to exhibit (d)(9) of Post-Effective Amendment No. 207 to the
Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed
with the SEC via EDGAR Accession No. 0001135428-13-000118 on March 1, 2013.
(d)(10) Amended and Restated Expense Limitation Agreement dated February 13,
2013 between the Registrant and LSV Asset Management, relating to the LSV
Family of Funds, is incorporated herein by reference to exhibit (d)(10) of
Post-Effective Amendment No. 207 to the Registrant's Registration Statement on
Form N-1A (File No. 33-42484), filed with the SEC via EDGAR Accession No.
0001135428-13-000118 on March 1, 2013.
(d)(11) Investment Advisory Agreement dated June 24, 2002 between the
Registrant and Acadian Asset Management, Inc. (now, Acadian Asset Management
LLC) is incorporated herein by reference to exhibit (d)(17) of Post-Effective
Amendment No. 55 to the Registrant's Registration Statement on Form N-1A (File
No. 33-42484), filed with the SEC via EDGAR Accession No. 0001135428-02-000263
on August 30, 2002.
(d)(12) Amended Schedule A to the Investment Advisory Agreement dated June 24,
2002 between the Registrant and Acadian Asset Management, Inc. (now Acadian
Asset Management, LLC) is incorporated herein by reference to exhibit (d)(12)
of Post-Effective Amendment No. 127 to the Registrant's Registration Statement
on Form N-1A (File No. 33-42484), filed with the SEC via EDGAR Accession No.
0001135428-10- 000392 on September 3, 2010.
(d)(13) Expense Limitation Agreement dated December 16, 2010, between the
Registrant and Acadian Asset Management LLC, is incorporated herein by
reference to exhibit (d)(13) of Post-Effective Amendment No. 183 to the
Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed
with the SEC on March 28, 2012.
(d)(14) Investment Advisory Agreement dated June 24, 2002 between the
Registrant and Cambiar Investors LLC is incorporated herein by reference to
exhibit (d)(19) of Post-Effective Amendment No. 55 to the Registrant's
Registration Statement on Form N-1A (File No. 33-42484), filed with the SEC via
EDGAR Accession No. 0001135428-02-000263 on August 30, 2002.
(d)(15) Amended Schedule A to the Investment Advisory Agreement dated June 24,
2002 between the Registrant and Cambiar Investors LLC is incorporated herein by
reference to exhibit (d)(15) of Post-
2
Effective Amendment No. 168 to the Registrant's Registration Statement on Form
N-1A (File No. 33-42484), filed with the SEC via EDGAR Accession No.
0001135428-11-000735 on November 30, 2011.
(d)(16) Form of Amended and Restated Expense Limitation Agreement, dated August
28, 2012, as effective on September 1, 2012, between the Registrant and Cambiar
Investors LLC is incorporated herein by reference to exhibit (d)(16) of
Post-Effective Amendment No. 194 to the Registrant's Registration Statement on
Form N-1A (File No. 33-42484), filed with the SEC via EDGAR Accession No.
0001135428-12-000394 on August 28, 2012.
(d)(17) Investment Advisory Agreement dated June 24, 2002 between the
Registrant and Investment Counselors of Maryland, LLC is incorporated herein by
reference to exhibit (d)(23) of Post-Effective Amendment No. 55 to the
Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed
with the SEC via EDGAR Accession No. 0001135428-02-000263 on August 30, 2002.
(d)(18) Investment Advisory Agreement dated June 24, 2002 between the
Registrant and C.S. McKee, L.P. is incorporated herein by reference to exhibit
(d)(24) of Post-Effective Amendment No. 55 to the Registrant's Registration
Statement on Form N-1A (File No. 33-42484), filed with the SEC via EDGAR
Accession No. 0001135428-02-000263 on August 30, 2002.
(d)(19) Investment Advisory Agreement dated August 8, 2008 between the
Registrant and Rice, Hall James & Associates LLC is incorporated herein by
reference to exhibit (d)(16) of Post-Effective Amendment No. 116 to the
Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed
with the SEC via EDGAR Accession No. 0001135428-09-000641 on December 18,
2009.
(d)(20) Expense Limitation Agreement dated March 1, 2008, between the
Registrant and Rice Hall James & Associates, LLC, relating to the Rice Hall
James Family of Funds, is incorporated herein by reference to exhibit (d)(20)
of Post-Effective Amendment No. 207 to the Registrant's Registration Statement
on Form N-1A (File No. 33-42484), filed with the SEC via EDGAR Accession No.
0001135428-13-000118 on March 1, 2013.
(d)(21) Investment Advisory Agreement dated June 24, 2002 between the
Registrant and Thompson, Siegel & Walmsley, Inc. (now, Thompson, Siegel &
Walmsley LLC) is incorporated herein by reference to exhibit (d)(27) of
Post-Effective Amendment No. 55 to the Registrant's Registration Statement on
Form N-1A (File No. 33-42484), filed with the SEC via EDGAR Accession No.
0001135428-02-000263 on August 30, 2002.
(d)(22) Amendment and Revised Schedule A dated June 1, 2010 to the Investment
Advisory Agreement dated June 24, 2002 between the Registrant and Thompson,
Siegel & Walmsley, Inc. (now, Thompson, Siegel & Walmsley LLC) is incorporated
herein by reference to exhibit (d)(21) of Post-Effective Amendment No. 126 to
the Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed
with the SEC via EDGAR Accession No. 0001135428-10-000336 on August 30, 2010.
(d)(23) Investment Advisory Agreement dated January 29, 2010 between the
Registrant and PNC Capital Advisors, LLC, relating to the UA S&P 500 Index
Fund, is incorporated herein by reference to exhibit (d)(23) of Post-Effective
Amendment No. 207 to the Registrant's Registration Statement on Form N-1A (File
No. 33-42484), filed with the SEC via EDGAR Accession No. 0001135428-13-000118
on March 1, 2013.
(d)(24) Investment Advisory Agreement dated May 28, 2004 between the Registrant
and Haverford Investment Management, Inc. is incorporated herein by reference
to exhibit (d)(30) of Post-Effective
3
Amendment No. 79 to the Registrant's Registration Statement on Form N-1A (File
No. 33-42484), filed with the SEC via EDGAR Accession No. 0001135428-05-000093
on February 25, 2005.
(d)(25) Expense Limitation Agreement dated March 1, 2008, between the
Registrant and Haverford Investment Management, Inc., relating to the Haverford
Quality Growth Stock Fund, is incorporated herein by reference to exhibit
(d)(25) of Post-Effective Amendment No. 207 to the Registrant's Registration
Statement on Form N-1A (File No. 33-42484), filed with the SEC via EDGAR
Accession No. 0001135428-13-000118 on March 1, 2013.
(d)(26) Investment Advisory Agreement dated December 16, 2005 between the
Registrant and Westwood Management Corp. is incorporated herein by reference to
exhibit (d)(28) of Post-Effective Amendment No. 88 to the Registrant's
Registration Statement on Form N-1A (File No. 33-42484), filed with the SEC via
EDGAR Accession No. 0001135428-06-000081 on February 28, 2006.
(d)(27) Schedule A, dated December 16, 2005, as last amended November 14, 2012,
to the Investment Advisory Agreement dated December 16, 2005 between the
Registrant and Westwood Management Corp. is incorporated herein by reference to
exhibit (d)(27) of Post-Effective Amendment No. 202 to the Registrant's
Registration Statement on Form N-1A (File No. 33-42484), filed with the SEC via
EDGAR Accession No. 0001135428-12-000594 on December 19, 2012.
(d)(28) Amended and Restated Expense Limitation Agreement dated February 26,
2013, between the Registrant and Westwood Management Corp., relating to the
Westwood Family of Funds, is incorporated herein by reference to exhibit
(d)(28) of Post-Effective Amendment No. 207 to the Registrant's Registration
Statement on Form N-1A (File No. 33-42484), filed with the SEC via EDGAR
Accession No. 0001135428-13-000118 on March 1, 2013.
(d)(29) Investment Sub-Advisory Agreement dated December 27, 2011, between
Westwood Management Corp. and SKY Harbor Capital Management, LLC, relating to
the Westwood Short Duration High Yield Fund, is incorporated herein by
reference to exhibit (d)(29) of Post-Effective Amendment No. 207 to the
Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed
with the SEC via EDGAR Accession No. 0001135428-13-000118 on March 1, 2013.
(d)(30) Investment Advisory Agreement dated February 27, 2006 between the
Registrant and Edgewood Management LLC is incorporated herein by reference to
exhibit (d)(33) of Post-Effective Amendment No. 95 to the Registrant's
Registration Statement on Form N-1A (File No. 33-42484), filed with the SEC via
EDGAR Accession No. 0001135428-07-000007 on January 12, 2007.
(d)(31) Expense Limitation Agreement dated March 1, 2008 between the Registrant
and Edgewood Management LLC is incorporated herein by reference to exhibit
(d)(28) of Post-Effective Amendment No. 124 to the Registrant's Registration
Statement on Form N-1A (File No. 33-42484), filed with the SEC via EDGAR
Accession No. 0001135428-10-000245 on June 30, 2010.
(d)(32) Investment Advisory Agreement dated September 21, 2009 between the
Registrant and Pennant Management, Inc. is incorporated herein by reference to
exhibit (d)(30) of Post- Effective Amendment No. 115 to the Registrant's
Registration Statement on Form N-1A (File No. 33-42484), filed with the SEC via
EDGAR Accession No. 0001135428-09- 000594 on November 30, 2009.
(d)(33) Investment Advisory Agreement dated March 31, 2010 between the
Registrant and Sands Capital Management, LLC is incorporated herein by
reference to exhibit (d)(30) of Post-Effective Amendment No. 123 to the
Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed
with the SEC via EDGAR Accession No. 0001135428-10-000173 on April 30, 2010.
4
(d)(34) Expense Limitation Agreement dated March 31, 2010, between the
Registrant and Sands Capital Management, LLC, relating to the Sands Capital
Global Growth Fund, is incorporated herein by reference to exhibit (d)(34) of
Post-Effective Amendment No. 207 to the Registrant's Registration Statement on
Form N-1A (File No. 33-42484), filed with the SEC via EDGAR Accession No.
0001135428-13-000118 on March 1, 2013.
(d)(35) Investment Advisory Agreement dated March 24, 2011, between the
Registrant and AlphaOne Investment Services, LLC, relating to the AlphaOne
Family of Funds, is incorporated herein by reference to exhibit (d)(35) of
Post-Effective Amendment No. 207 to the Registrant's Registration Statement on
Form N-1A (File No. 33-42484), filed with the SEC via EDGAR Accession No.
0001135428-13-000118 on March 1, 2013.
(d)(36) Expense Limitation Agreement, effective as of March 28, 2011, between
the Registrant and AlphaOne Investment Services, LLC, relating to the AlphaOne
Family of Funds, is incorporated herein by reference to exhibit (d)(43) of
Post-Effective Amendment No. 154 to the Registrant's Registration Statement on
Form N-1A (File No. 33-42484), filed with the SEC via EDGAR Accession No.
0001135428-11-000353 on June 29, 2011.
(d)(37) Investment Advisory Agreement dated June 20, 2011, between the
Registrant and Loomis, Sayles & Company, L.P., relating to the Loomis Sayles
Full Discretion Institutional Securitized Fund, is incorporated herein by
reference to exhibit (d)(37) of Post-Effective Amendment No. 207 to the
Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed
with the SEC via EDGAR Accession No. 0001135428-13-000118 on March 1, 2013.
(d)(38) Expense Limitation Agreement dated December 15, 2011, between the
Registrant and Loomis, Sayles & Company, L.P., relating to the Loomis Sayles
Full Discretion Institutional Securitized Fund, is incorporated herein by
reference to exhibit (d)(38) of Post-Effective Amendment No. 207 to the
Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed
with the SEC via EDGAR Accession No. 0001135428-13-000118 on March 1, 2013.
(d)(39) Investment Advisory Agreement dated December 19, 2011, between the
Registrant and CBRE Clarion Securities LLC, relating to the CBRE Clarion
Long/Short Fund, is incorporated herein by reference to exhibit (d)(39) of
Post-Effective Amendment No. 207 to the Registrant's Registration Statement on
Form N-1A (File No. 33-42484), filed with the SEC via EDGAR Accession No.
0001135428-13-000118 on March 1, 2013.
(d)(40) Form of Expense Limitation Agreement between the Registrant and CBRE
Clarion Securities LLC, relating to the CBRE Clarion Long/Short Fund, is
incorporated herein by reference to exhibit (d)(45) of Post-Effective Amendment
No. 171 to the Registrant's Registration Statement on Form N-1A (File No.
33-42484), filed with the SEC via EDGAR Accession No. 0001135428-11-000783 on
December 28, 2011.
(d)(41) Investment Advisory Agreement dated February 20, 2012, between the
Registrant and Hamlin Capital Management, LLC, relating to the Hamlin High
Dividend Equity Fund, is incorporated herein by reference to exhibit (d)(45) of
Post-Effective Amendment No. 183 to the Registrant's Registration Statement on
Form N-1A (File No. 33-42484), filed with the SEC via EDGAR Accession No.
0001135428-12-000195 on March 28, 2012.
(d)(42) Expense Limitation Agreement dated February 20, 2012, between the
Registrant and Hamlin Capital Management, LLC, relating to the Hamlin High
Dividend Equity Fund, is incorporated herein by
5
reference to exhibit (d)(46) of Post-Effective Amendment No. 183 to the
Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed
with the SEC via EDGAR Accession No. 0001135428-12-000195 on March 28, 2012.
(d)(43) Investment Advisory Agreement between the Trust and Citigroup First
Investment Management Americas LLC, relating to the Citi Market Pilot 2020
Fund, Citi Market Pilot 2030 Fund and Citi Market Pilot 2040 Fund, is
incorporated herein by reference to exhibit (d)(47) of Post-Effective Amendment
No. 190 to the Registrant's Registration Statement on Form N-1A (File No.
33-42484), filed with the SEC via EDGAR Accession No. 0001135428-12-000262 on
May 23, 2012.
(d)(44) Expense Limitation Agreement between the Registrant and Citigroup First
Investment Management Americas LLC, relating to the Citi Market Pilot 2020
Fund, Citi Market Pilot 2030 Fund and Citi Market Pilot 2040 Fund, is
incorporated herein by reference to exhibit (d)(48) of Post-Effective Amendment
No. 190 to the Registrant's Registration Statement on Form N-1A (File No.
33-42484), filed with the SEC via EDGAR Accession No. 0001135428-12-000262 on
May 23, 2012.
(d)(45) Investment Advisory Agreement dated February 3, 2012, between the Trust
and Thomson Horstmann & Bryant, Inc., relating to the Thomson Horstmann &
Bryant MicroCap Fund, is incorporated herein by reference to exhibit (d)(45) of
Post-Effective Amendment No. 207 to the Registrant's Registration Statement on
Form N-1A (File No. 33-42484), filed with the SEC via EDGAR Accession No.
0001135428-13-000118 on March 1, 2013.
(d)(46) Expense Limitation Agreement dated March 28, 2012, between the
Registrant and Thomson Horstmann & Bryant, Inc., relating to the Thomson
Horstmann & Bryant MicroCap Fund, is incorporated herein by reference to
exhibit (d)(46) of Post-Effective Amendment No. 207 to the Registrant's
Registration Statement on Form N-1A (File No. 33-42484), filed with the SEC via
EDGAR Accession No. 0001135428-13-000118 on March 1, 2013.
(d)(47) Investment Advisory Agreement between the Trust and Cornerstone
Advisors, Inc., relating to the Cornerstone Advisors Global Public Equity Fund,
Cornerstone Advisors Income Opportunities Fund, Cornerstone Advisors Public
Alternatives Fund and Cornerstone Advisors Real Assets Fund, is incorporated
herein by reference to exhibit (d)(51) of Post-Effective Amendment No. 193 to
the Registrant's Registration Statement on Form N-1A (File Nos. 33-42484),
filed with the SEC via EDGAR Accession No. 0001135428-12-000370 on August 22,
2012.
(d)(48) Investment Sub-Advisory Agreement between Cornerstone Advisors, Inc.
and Parametric Portfolio Associates LLC, relating to the Cornerstone Advisors
Global Public Equity Fund, is incorporated herein by reference to exhibit
(d)(52) of Post-Effective Amendment No. 193 to the Registrant's Registration
Statement on Form N-1A (File Nos. 33-42484), filed with the SEC via EDGAR
Accession No. 0001135428-12-000370 on August 22, 2012.
(d)(49) Investment Sub-Advisory Agreement between Cornerstone Advisors, Inc.
and LSV Asset Management, relating to the Cornerstone Advisors Global Public
Equity Fund, is incorporated herein by reference to exhibit (d)(53) of
Post-Effective Amendment No. 193 to the Registrant's Registration Statement on
Form N-1A (File Nos. 33-42484), filed with the SEC via EDGAR Accession No.
0001135428-12-000370 on August 22, 2012.
(d)(50) Investment Sub-Advisory Agreement between Cornerstone Advisors, Inc.
and Harris Associates L.P., relating to the Cornerstone Advisors Global Public
Equity Fund, is incorporated herein by reference to exhibit (d)(54) of
Post-Effective Amendment No. 193 to the Registrant's Registration Statement on
6
Form N-1A (File Nos. 33-42484), filed with the SEC via EDGAR Accession No.
0001135428-12-000370 on August 22, 2012.
(d)(51) Investment Sub-Advisory Agreement between Cornerstone Advisors, Inc.
and Thornburg Investment Management Inc, relating to the Cornerstone Advisors
Global Public Equity Fund, is incorporated herein by reference to exhibit
(d)(55) of Post-Effective Amendment No. 193 to the Registrant's Registration
Statement on Form N-1A (File Nos. 33-42484), filed with the SEC via EDGAR
Accession No. 0001135428-12-000370 on August 22, 2012.
(d)(52) Investment Sub-Advisory Agreement between Cornerstone Advisors, Inc.
and Marsico Capital Management, LLC, relating to the Cornerstone Advisors
Global Public Equity Fund, is incorporated herein by reference to exhibit
(d)(56) of Post-Effective Amendment No. 193 to the Registrant's Registration
Statement on Form N-1A (File Nos. 33-42484), filed with the SEC via EDGAR
Accession No. 0001135428-12-000370 on August 22, 2012.
(d)(53) Investment Sub-Advisory Agreement between Cornerstone Advisors, Inc.
and Turner Investments, L.P., relating to the Cornerstone Advisors Global
Public Equity Fund and Cornerstone Advisors Public Alternatives Fund, is
incorporated herein by reference to exhibit (d)(57) of Post-Effective Amendment
No. 193 to the Registrant's Registration Statement on Form N-1A (File Nos.
33-42484), filed with the SEC via EDGAR Accession No. 0001135428-12-000370 on
August 22, 2012.
(d)(54) Investment Sub-Advisory Agreement between Cornerstone Advisors, Inc.
and Cramer Rosenthal McGlynn LLC, relating to the Cornerstone Advisors Global
Public Equity Fund, is incorporated herein by reference to exhibit (d)(58) of
Post-Effective Amendment No. 193 to the Registrant's Registration Statement on
Form N-1A (File Nos. 33-42484), filed with the SEC via EDGAR Accession No.
0001135428-12-000370 on August 22, 2012.
(d)(55) Investment Sub-Advisory Agreement between Cornerstone Advisors, Inc.
and Fairpointe Capital LLC, relating to the Cornerstone Advisors Global Public
Equity Fund, is incorporated herein by reference to exhibit (d)(59) of
Post-Effective Amendment No. 193 to the Registrant's Registration Statement on
Form N-1A (File Nos. 33-42484), filed with the SEC via EDGAR Accession No.
0001135428-12-000370 on August 22, 2012.
(d)(56) Investment Sub-Advisory Agreement between Cornerstone Advisors, Inc.
and Phocas Financial Corporation, relating to the Cornerstone Advisors Global
Public Equity Fund, is incorporated herein by reference to exhibit (d)(60) of
Post-Effective Amendment No. 193 to the Registrant's Registration Statement on
Form N-1A (File Nos. 33-42484), filed with the SEC via EDGAR Accession No.
0001135428-12-000370 on August 22, 2012.
(d)(57) Investment Sub-Advisory Agreement between Cornerstone Advisors, Inc.
and TCW Investment Management Company, relating to the Cornerstone Advisors
Global Public Equity Fund, to be filed by amendment.
(d)(58) Investment Sub-Advisory Agreement between Cornerstone Advisors, Inc.
and Allianz Global Investors Capital LLC, relating to the Cornerstone Advisors
Global Public Equity Fund, is incorporated herein by reference to exhibit
(d)(62) of Post-Effective Amendment No. 193 to the Registrant's Registration
Statement on Form N-1A (File Nos. 33-42484), filed with the SEC via EDGAR
Accession No. 0001135428-12-000370 on August 22, 2012.
(d)(59) Investment Sub-Advisory Agreement between Cornerstone Advisors, Inc.
and Acadian Asset Management LLC, relating to the Cornerstone Advisors Global
Public Equity Fund, is incorporated
7
herein by reference to exhibit (d)(63) of Post-Effective Amendment No. 193 to
the Registrant's Registration Statement on Form N-1A (File Nos. 33-42484),
filed with the SEC via EDGAR Accession No. 0001135428-12-000370 on August 22,
2012.
(d)(60) Investment Sub-Advisory Agreement between Cornerstone Advisors, Inc.
and Driehaus Capital Management LLC, relating to the Cornerstone Advisors
Global Public Equity Fund, is incorporated herein by reference to exhibit
(d)(64) of Post-Effective Amendment No. 193 to the Registrant's Registration
Statement on Form N-1A (File Nos. 33-42484), filed with the SEC via EDGAR
Accession No. 0001135428-12-000370 on August 22, 2012.
(d)(61) Investment Sub-Advisory Agreement between Cornerstone Advisors, Inc.
and OFI SteelPath, Inc., relating to the Cornerstone Advisors Income
Opportunities Fund, to be filed by amendment.
(d)(62) Investment Sub-Advisory Agreement between Cornerstone Advisors, Inc.
and AlphaSimplex Group, LLC, relating to the Cornerstone Advisors Public
Alternatives Fund, is incorporated herein by reference to exhibit (d)(66) of
Post-Effective Amendment No. 193 to the Registrant's Registration Statement on
Form N-1A (File Nos. 33-42484), filed with the SEC via EDGAR Accession No.
0001135428-12-000370 on August 22, 2012.
(d)(63) Investment Sub-Advisory Agreement between Cornerstone Advisors, Inc.
and AQR Capital Management, LLC, relating to the Cornerstone Advisors Public
Alternatives Fund, is incorporated herein by reference to exhibit (d)(67) of
Post-Effective Amendment No. 193 to the Registrant's Registration Statement on
Form N-1A (File Nos. 33-42484), filed with the SEC via EDGAR Accession No.
0001135428-12-000370 on August 22, 2012.
(d)(64) Investment Sub-Advisory Agreement between Cornerstone Advisors, Inc.
and ClariVest Asset Management LLC, relating to the Cornerstone Advisors Public
Alternatives Fund, to be filed by amendment.
(d)(65) Investment Sub-Advisory Agreement between Cornerstone Advisors, Inc.
and Kayne Anderson Capital Advisors, L.P., relating to the Cornerstone Advisors
Real Assets Fund, is incorporated herein by reference to exhibit (d)(69) of
Post-Effective Amendment No. 193 to the Registrant's Registration Statement on
Form N-1A (File Nos. 33-42484), filed with the SEC via EDGAR Accession No.
0001135428-12-000370 on August 22, 2012.
(d)(66) Investment Sub-Advisory Agreement between Cornerstone Advisors, Inc.
and BlackRock Investment Management, LLC, relating to the Cornerstone Advisors
Real Assets Fund, is incorporated herein by reference to exhibit (d)(70) of
Post-Effective Amendment No. 193 to the Registrant's Registration Statement on
Form N-1A (File Nos. 33-42484), filed with the SEC via EDGAR Accession No.
0001135428-12-000370 on August 22, 2012.
(d)(67) Form of Investment Advisory Agreement between the Registrant and
Harvest Global Investments Limited is incorporated herein by reference to
exhibit (d)(71) of Post-Effective Amendment No. 200 to the Registrant's
Registration Statement on Form N-1A (File No. 33-42484), filed with the SEC via
EDGAR Accession No. 0001135428-12-000571 on December 7, 2012.
(d)(68) Form of Expense Limitation Agreement between the Registrant and Harvest
Global Investments Limited is incorporated herein by reference to exhibit
(d)(72) of Post-Effective Amendment No. 200 to the Registrant's Registration
Statement on Form N-1A (File No. 33-42484), filed with the SEC via EDGAR
Accession No. 0001135428-12-000571 on December 7, 2012.
8
(d)(69) Investment Advisory Agreement between the Registrant and Fayez Sarofim
& Co. to be filed by amendment.
(d)(70) Expense Limitation Agreement between the Registrant and Fayez Sarofim &
Co. to be filed by amendment.
(e)(1) Distribution Agreement dated November 14, 1991, as amended and restated
August 8, 1994, between the Registrant and SEI Financial Services Company (now,
SEI Investments Distribution Co.) is incorporated herein by reference to
exhibit (6) of Post-Effective Amendment No. 24 to the Registrant's Registration
Statement on Form N-1A (File No. 33-42484), filed with the SEC via EDGAR
Accession No. 0000950109-96-001199 on February 28, 1996.
(e)(2) Distribution Agreement dated November 14, 1991, as amended and restated
November 12, 2002, between the Registrant and SEI Investments Distribution Co.
(formerly, SEI Financial Services Company) is incorporated herein by reference
to exhibit (e)(4) of Post- Effective Amendment No. 62 to the Registrant's
Registration Statement on Form N-1A (File No. 33-42484), filed with the SEC via
EDGAR Accession No. 0001135428-03- 000108 on February 28, 2003.
(e)(3) Amendment No. 1, effective as of August 30, 2010, to the Distribution
Agreement dated November 14, 1991, as amended and restated November 12, 2002,
between the Registrant and SEI Investments Distribution Co. (formerly, SEI
Financial Services Company), is incorporated herein by reference to exhibit
(e)(3) of Post-Effective Amendment No. 158 to the Registrant's Registration
Statement on Form N-1A (File No. 33-42484), filed with the SEC via EDGAR
Accession No. 0001135428-11-000517 on September 16, 2011.
(e)(4) Amended and Restated Sub-Distribution and Servicing Agreement dated
November 10, 1997 between SEI Investments Company and AIG Equity Sales
Corporation is incorporated herein by reference to exhibit (6)(c) of
Post-Effective Amendment No. 32 to the Registrant's Registration Statement on
Form N-1A (File No. 33-42484), filed with the SEC via EDGAR Accession No.
0001047469-98-008087 on February 27, 1998.
(e)(5) Revised Form of Amended Sub-Distribution and Servicing Agreement for SEI
Investments Distribution Co. is incorporated herein by reference to exhibit
(e)(2) of Post-Effective Amendment No. 76 to the Registration Statement of The
Advisors' Inner Circle Fund II (File No. 33-50718), filed with the SEC via
EDGAR Accession No. 0001135428-08-000222 on May 30, 2008.
(f) Not applicable.
(g)(1) Custodian Agreement dated August 12, 1991 between the Registrant and
CoreStates Bank N.A. (now, US Bank, National Association) is incorporated
herein by reference to exhibit (6) of Post-Effective Amendment No. 28 to the
Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed
with the SEC via EDGAR Accession No. 0000950109-97-001691 on February 27,
1997.
(g)(2) Amendment dated May 21, 2001 to the Custodian Agreement dated August 12,
1991 between the Registrant and First Union National Bank (now, U.S. Bank,
National Association) is incorporated herein by reference to exhibit (g)(4) of
Post-Effective Amendment No. 51 to the Registrant's Registration Statement on
Form N-1A (File No. 33-42484), filed with the SEC via EDGAR Accession No.
0001135428-02-000175 on June 14, 2002.
(g)(3) Amended Fee Schedule dated February 18, 2004 to the Custodian Agreement
dated August 12, 1991 between the Registrant and Wachovia Bank, National
Association (now U.S. Bank, National
9
Association) is incorporated herein by reference to exhibit (g)(7) of
Post-Effective Amendment No. 69 to the Registrant's Registration Statement on
Form N- 1A (File No. 33-42484), filed with the SEC via EDGAR Accession No.
0001135428-04- 000095 on March 1, 2004.
(g)(4) Amendment and Assignment dated August 8, 2006 to the Custodian Agreement
dated August 12, 1991 between the Registrant and Wachovia Bank, N.A., (now U.S.
Bank, National Association) assigning the Custodian Agreement to U.S. Bank,
National Association is incorporated herein by reference to exhibit (g)(5) of
Post-Effective Amendment No. 92 to the Registrant's Registration Statement on
Form N-1A (File No. 33-42484), filed with the SEC via EDGAR Accession No.
0001135428-06-000367 on August 28, 2006.
(g)(5) Amendment dated March 14, 2007 to the Custodian Agreement dated August
12, 1991 between the Registrant and U.S. Bank, National Association is
incorporated herein by reference to exhibit (g)(8) of Post-Effective Amendment
No. 97 to the Registrant's Registration Statement on Form N-1A (File No.
33-42484), filed with the SEC via EDGAR Accession No. 0001135428-07-000146 on
April 30, 2007.
(g)(6) Custodian Agreement dated November 13, 2007 between the Registrant and
Union Bank of California, N.A., to be filed by amendment.
(g)(7) Custody Agreement dated February 3, 2003 between the Registrant and
National City Bank is incorporated herein by reference to exhibit (g)(5) of
Post-Effective Amendment No. 66 to the Registrant's Registration Statement on
Form N-1A (File No. 33-42484), filed with the SEC via EDGAR Accession No.
0001135428-03-000264 on April 30, 2003.
(g)(8) Amended Fee Schedule dated February 19, 2003 to the Custody Agreement
dated February 3, 2003 between the Registrant and National City Bank is
incorporated herein by reference to exhibit (g)(6) of Post-Effective Amendment
No. 68 to the Registrant's Registration Statement on Form N-1A (File No.
33-42484), filed with the SEC via EDGAR Accession No. 0001135428-03-000630 on
December 29, 2003.
(g)(9) Custody Agreement between the Registrant and The Northern Trust Company,
to be filed by amendment.
(g)(10) Global Custodial Services Agreement between the Registrant and Citi
Global Transaction Services, to be filed by amendment.
(g)(11) Amended Fee Schedule to the Global Custodial Services Agreement between
the Registrant and Citi Global Transaction Services, to be filed by amendment.
(g)(12) Custodial Services Agreement between the Registrant and The Bank of New
York Mellon, relating to the Cambiar Aggressive Value Fund and Cambiar
Opportunity Fund, to be filed by amendment.
(h)(1) Administration Agreement dated November 14, 1991, as amended and
restated November 12, 2002, between the Registrant and SEI Investments Global
Funds Services is incorporated herein by reference to exhibit (h)(50) of
Post-Effective Amendment No. 62 to the Registrant's Registration Statement on
Form N-1A (File No. 33-42484), filed with the SEC via EDGAR Accession No.
0001135428-03-000108 on February 28, 2003.
(h)(2) Consent to Assignment and Assumption of Administration Agreement dated
June 1, 1996 between the Registrant and SEI Financial Management Corporation
(now, SEI Investments Global Funds Services) is incorporated herein by
reference to exhibit (9)(f) of Post-Effective Amendment No. 28 to the
10
Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed
with the SEC via EDGAR Accession No. 0000950109-97-001691 on February 27,
1997.
(h)(3) Administration Agreement dated November 14, 1991, as amended and
restated November 12, 2002, between the Registrant and SEI Investments Global
Funds Services, is incorporated herein by reference to exhibit (h)(3) of
Post-Effective Amendment No. 207 to the Registrant's Registration Statement on
Form N-1A (File No. 33-42484), filed with the SEC via EDGAR Accession No.
0001135428-13-000118 on March 1, 2013.
(h)(4) Transfer Agency and Services Agreement dated October 1, 2000, as amended
and restated February 21, 2001, between the Registrant and Forum Shareholder
Services, LLC (now, Citi Fund Services, LLC) is incorporated herein by
reference to exhibit (h)(24) of Post-Effective Amendment No. 98 to the
Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed
with the SEC via EDGAR Accession No. 0001135428-07-000218 on June 15, 2007.
(h)(5) AML Delegation Amendment dated May 20, 2003 to the Transfer Agency and
Services Agreement dated October 1, 2000, as amended and restated February 21,
2001, between the Registrant and Forum Shareholder Services, LLC (now, Citi
Fund Services, LLC) is incorporated herein by reference to exhibit (h)(64) of
Post-Effective Amendment No. 68 to the Registrant's Registration Statement on
Form N-1A (File No. 33-42484), filed with the SEC via EDGAR Accession No.
0001135428-03-000630 on December 29, 2003.
(h)(6) Transfer Agency and Service Agreement dated January 15, 2003 between the
Registrant and State Street Bank and Trust Company is incorporated herein by
reference to exhibit (h)(62) of Post-Effective Amendment No. 67 to the
Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed
with the SEC via EDGAR Accession No. 0001135428-03-000495 on August 28, 2003.
(h)(7) AML Delegation Amendment dated May 20, 2003 to the Transfer Agency and
Service Agreement dated January 15, 2003 between the Registrant and State
Street Bank and Trust Company is incorporated herein by reference to exhibit
(h)(65) of Post-Effective Amendment No. 68 to the Registrant's Registration
Statement on Form N-1A (File No. 33-42484), filed with the SEC via EDGAR
Accession No. 0001135428-03-000630 on December 29, 2003.
(h)(8) Agency Agreement dated April 1, 2006 between the Registrant and DST
Systems, Inc., is incorporated herein by reference to exhibit (h)(7) of
Post-Effective Amendment No. 190 to the Registrant's Registration Statement on
Form N-1A (File No. 33-42484), filed with the SEC via EDGAR Accession No.
0001135428-12-000262 on May 23, 2012.
(h)(9) Amendment dated April 1, 2009 to the Agency Agreement dated April 1,
2006 between the Registrant and DST Systems, Inc., to be filed by amendment.
(h)(10) Amended Fee Schedule, dated August 30, 2012, to the Agency Agreement
dated April 1, 2006 between the Registrant and DST Systems, Inc. is
incorporated herein by reference to exhibit (h)(10) of Post-Effective Amendment
No. 193 to the Registrant's Registration Statement on Form N-1A (File Nos.
33-42484), filed with the SEC via EDGAR Accession No. 0001135428-12-000370 on
August 22, 2012.
(h)(11) Transfer Agency Agreement dated May 31, 2007 between the Registrant and
UMB Fund Services, Inc. is incorporated herein by reference to exhibit (h)(30)
of Post-Effective Amendment No. 99 to the Registrant's Registration Statement
on Form N-1A (File No. 33-42484), filed with the SEC via EDGAR Accession No.
0001135428-07-000376 on August 28, 2007.
11
(h)(12) Transfer Agency Services Agreement between the Registrant and Atlantic
Fund Services, to be filed by amendment.
(h)(13) Transfer Agency Agreement between the Registrant and Boston Financial
Data Services, Inc., to be filed by amendment.
(h)(14) Amendment to the Transfer Agency Agreement between the Registrant and
Boston Financial Data Services, Inc., to be filed by amendment.
(h)(15) Shareholder Services Plan, relating to the Investor Class Shares of the
Cambiar Funds, is incorporated herein by reference to exhibit (m)(6) of
Post-Effective Amendment No. 71 to the Registrant's Registration Statement on
Form N-1A (File No. 33-42484), filed with the SEC via EDGAR Accession No.
0001135428-04-000154 on April 16, 2004.
(h)(16) Revised Exhibit A to the Shareholder Services Plan, relating to
Investor Class Shares of the Cambiar Funds, is incorporated herein by reference
to exhibit (h)(11) of Post- Effective Amendment No. 168 to the Registrant's
Registration Statement on Form N-1A (File No. 33-42484), filed with the SEC via
EDGAR Accession No. 0001135428-11- 000735 on November 30, 2011.
(h)(17) Shareholder Services Plan, relating to the Retail Class Shares of the
Edgewood Growth Fund, is incorporated herein by reference to exhibit (h)(42) of
Post-Effective Amendment No. 89 to the Registrant's Registration Statement on
Form N-1A (File No. 33-42484), filed with the SEC via EDGAR Accession No.
0001135428-06-000148 on April 14, 2006.
(h)(18) Shareholder Services Plan, relating to Institutional Shares of the
Westwood Funds, is incorporated herein by reference to exhibit (h)(36) of
Post-Effective Amendment No. 100 to the Registrants Registration Statement on
Form N-1A (File No. 33-42484), filed with the SEC via EDGAR Accession No.
0001135428-07-000518 on November 15, 2007.
(h)(19) Exhibit A to the Shareholder Services Plan, relating to the
Institutional Shares of the Westwood Funds, is incorporated herein by reference
to exhibit (h)(14) of Post-Effective Amendment No. 140 to the Registrant's
Registration Statement on Form N-1A (File No. 33-42484), filed with the SEC via
EDGAR Accession No. 0001135428-11-000194 on March 28, 2011.
(h)(20) Shareholder Services Plan, relating to the Investor Class Shares of the
Sands Capital Global Growth Fund, is incorporated herein by reference to
exhibit (h)(30) of Post- Effective Amendment No. 120 to the Registrant's
Registration Statement on Form N-1A (File No. 33-42484), filed with the SEC on
March 1, 2010.
(h)(21) Shareholder Services Plan, relating to R Class Shares of the AlphaOne
Funds, is incorporated herein by reference to exhibit (h)(17) of Post-Effective
Amendment No. 141 to the Registrant's Registration Statement on Form N-1A (File
No. 33-42484), filed with the SEC via EDGAR Accession No. 0001135428-11-000199
on March 30, 2011.
(h)(22) Shareholder Services Plan, relating to Investor Class and Institutional
Shares of the CBRE Clarion Long/Short Fund, is incorporated herein by reference
to exhibit (h)(17) of Post-Effective Amendment No. 171 to the Registrant's
Registration Statement on Form N-1A (File No. 33-42484), filed with the SEC via
EDGAR Accession No. 0001135428-11-000783 on December 28, 2011.
(h)(23) Shareholder Services Plan, relating to the A Shares of the Citi Market
Pilot 2020 Fund, Citi Market Pilot 2030 Fund and Citi Market Pilot 2040 Fund,
to be filed by amendment.
12
(h)(24) Shareholder Services Plan, relating to the Investor Class Shares of the
Hamlin High Dividend Equity Fund, is incorporated herein by reference to
exhibit (h)(22) of Post- Effective Amendment No. 183 to the Registrant's
Registration Statement on Form N-1A (File No. 33-42484), filed with the SEC via
EDGAR Accession No. 0001135428-12-000195 on March 28, 2012.
(h)(25) Shareholder Services Plan, relating to the Investor Class Shares of the
Thomson Horstmann & Bryant MicroCap Fund, is incorporated herein by reference
to exhibit (h)(23) of Post-Effective Amendment No. 184 to the Registrant's
Registration Statement on Form N-1A (File No. 33-42484), filed with the SEC via
EDGAR Accession No. 0001135428-12-000197 on March 28, 2012.
(h)(26) Shareholder Services Plan, relating to the Institutional Shares of the
Cornerstone Advisors Global Public Equity Fund, Cornerstone Advisors Income
Opportunities Fund, Cornerstone Advisors Public Alternatives Fund and
Cornerstone Advisors Real Assets Fund, is incorporated herein by reference to
exhibit (h)(26) of Post-Effective Amendment No. 193 to the Registrant's
Registration Statement on Form N-1A (File Nos. 33-42484), filed with the SEC
via EDGAR Accession No. 0001135428-12-000370 on August 22, 2012.
(i) Not Applicable.
(j) Not Applicable.
(k) Not Applicable.
(l) Not Applicable.
(m)(1) Distribution Plan dated August 8, 1994, as amended August 14, 2000, is
incorporated herein by reference to exhibit (m) of Post-Effective Amendment No.
41 to the Registrant's Registration Statement on Form N-1A (File No. 33-42484),
filed with the SEC via EDGAR Accession No. 0000950109-00-004829 on December 13,
2000.
(m)(2) Schedule A, as last amended November 14, 2012, to the Distribution Plan
dated August 8, 1994, as amended August 14, 2000, is incorporated herein by
reference to exhibit (m)(2) of Post-Effective Amendment No. 202 to the
Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed
with the SEC via EDGAR Accession No. 0001135428-12-000594 on December 19,
2012.
(m)(3) Distribution Plan dated September 17, 2002, relating to Investor Shares
of the Rice Hall James Mid Cap Portfolio, is incorporated herein by reference
to exhibit (m)(6) of Post- Effective Amendment No. 74 to the Registrant's
Registration Statement on Form N-1A (File No. 33-42484), filed with the SEC via
EDGAR Accession No. 0001135428-04- 000242 on June 1, 2004.
(m)(4) Amended Schedule A dated November 13, 2007 to the Distribution Plan
dated September 17, 2002, relating to Investor Shares of the Rice Hall James
Mid Cap Portfolio, is incorporated herein by reference to exhibit (m)(4) of
Post-Effective Amendment No. 111 to the Registrant's Registration Statement on
Form N-1A (File No. 33-42484), filed with the SEC via EDGAR Accession No.
0001135428-09-000276 on July 2, 2009.
(n)(1) Registrant's Amended and Restated Rule 18f-3 Plan dated February 21,
2007 (including Schedules and Certificates of Class Designation thereto) is
incorporated herein by reference to exhibit (n) of Post-Effective Amendment No.
127 to the Registrant's Registration Statement on Form N-1A (File No.
33-42484), filed with the SEC via EDGAR Accession No. 0001135428-10-000392 on
September 3, 2010.
13
(n)(2) Revised Schedule F and Certificates of Class Designation to the
Registrant's Amended and Restated Rule 18f-3 Plan dated February 21, 2007,
relating to the Westwood Family of Funds, are incorporated herein by reference
to exhibit (n)(2) of Post-Effective Amendment No. 202 to the Registrant's
Registration Statement on Form N-1A (File No. 33-42484), filed with the SEC via
EDGAR Accession No. 0001135428-12-000594 on December 19, 2012.
(n)(3) Schedule I and Certificates of Class Designation to the Registrant's
Amended and Restated Rule 18f-3 Multiple Class Plan dated February 21, 2007,
relating to the AlphaOne Family of Funds, are incorporated herein by reference
to exhibit (n)(4) of Post- Effective Amendment No. 141 to the Registrant's
Registration Statement on Form N-1A (File No. 33-42484), filed with the SEC via
EDGAR Accession No. 0001135428-11-000199 on March 30, 2011.
(n)(4) Revised Schedule C to the Registrant's Amended and Restated Rule 18f-3
Plan dated February 21, 2007, relating to the Cambiar Funds, is incorporated
herein by reference to exhibit (n)(5) of Post-Effective Amendment No. 168 to
the Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed
with the SEC via EDGAR Accession No. 0001135428-11-000735 on November 30,
2011.
(n)(5) Schedule J and Certificates of Class Designation to the Registrant's
Amended and Restated Rule 18f-3 Plan dated February 21, 2007, relating to the
CBRE Clarion Long/Short Fund, to be filed by amendment.
(n)(6) Schedule K and Certificates of Class Designation to the Registrant's
Amended and Restated Rule 18f-3 Plan dated February 21, 2007, relating to the
Citi Market Pilot 2020 Fund, Citi Market Pilot 2030 Fund and Citi Market Pilot
2040 Fund, is incorporated herein by reference to exhibit (n)(7) of
Post-Effective Amendment No. 190 to the Registrant's Registration Statement on
Form N-1A (File No. 33-42484), filed with the SEC via EDGAR Accession No.
0001135428-12-000262 on May 23, 2012.
(n)(7) Schedule N and Certificate of Class Designation to the Registrant's
Amended and Restated Rule 18f-3 Plan dated February 21, 2007, relating to the
Harvest China All Assets Fund and the Harvest Intermediate Bond Fund , is
incorporated herein by reference to exhibit (n)(8) of Post-Effective Amendment
No. 200 to the Registrant's Registration Statement on Form N-1A (File No.
33-42484), filed with the SEC via EDGAR Accession No. 0001135428-12-000571 on
December 7, 2012.
(o) Not Applicable.
(p)(1) Registrant's Code of Ethics dated November 2007 is incorporated herein
by reference to exhibit (h)(36) of Post-Effective Amendment No. 100 to the
Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed
with the SEC via EDGAR Accession No. 0001135428-07-000518 on November 15,
2007.
(p)(2) HGK Asset Management, Inc. Revised Code of Ethics dated October 23, 2009
is incorporated herein by reference to exhibit (h)(30) of Post-Effective
Amendment No. 120 to the Registrant's Registration Statement on Form N-1A (File
No. 33-42484), filed with the SEC on March 1, 2010.
(p)(3) LSV Asset Management Revised Code of Ethics dated January 19, 2007 is
incorporated herein by reference to exhibit (p)(3) of Post-Effective Amendment
No. 97 to the Registrant's Registration Statement on Form N-1A (File No.
33-42484), filed with the SEC via EDGAR Accession No. 0001135428-07-000146 on
April 30, 2007.
14
(p)(4) Cambiar Investors LLC Revised Code of Ethics dated January 2012 is
incorporated herein by reference to exhibit (p)(4) of Post-Effective Amendment
No. 194 to the Registrant's Registration Statement on Form N-1A (File No.
33-42484), filed with the SEC via EDGAR Accession No. 0001135428-12-000394 on
August 28, 2012.
(p)(5) Investment Counselors of Maryland, LLC Revised Code of Ethics dated
March 13, 2007 is incorporated herein by reference to exhibit (p)(8) of
Post-Effective Amendment No. 97 to the Registrant's Registration Statement on
Form N-1A (File No. 33-42484), filed with the SEC via EDGAR Accession No.
0001135428-07-000146 on April 30, 2007.
(p)(6) C.S. McKee, LLP Revised Code of Ethics, to be filed by amendment.
(p)(7) Thompson, Siegel & Walmsley, LLC Revised Code of Ethics, is incorporated
herein by reference to exhibit (p)(7) of Post-Effective Amendment No. 207 to
the Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed
with the SEC via EDGAR Accession No. 0001135428-13-000118 on March 1, 2013.
(p)(8) First Manhattan Co. Revised Code of Ethics dated December 2006 is
incorporated herein by reference to exhibit (p)(11) of Post-Effective Amendment
No. 97 to the Registrant's Registration Statement on Form N-1A (File No.
33-42484), filed with the SEC via EDGAR Accession No. 0001135428-07-000146 on
April 30, 2007.
(p)(9) Haverford Investment Management, Inc. Revised Code of Ethics, is
incorporated herein by reference to exhibit (p)(9) of Post-Effective Amendment
No. 207 to the Registrant's Registration Statement on Form N-1A (File No.
33-42484), filed with the SEC via EDGAR Accession No. 0001135428-13-000118 on
March 1, 2013.
(p)(10) AIG Asset Management (U.S.), LLC Revised Code of Ethics dated September
13, 2007 is incorporated herein by reference to exhibit (p)(12) of
Post-Effective Amendment No. 100 to the Registrant's Registration Statement on
Form N-1A (File No. 33-42484), filed with the SEC via EDGAR Accession No.
0001135428-07-000518 on November 15, 2007.
(p)(11) Rice Hall James & Associates, LLC Revised Code of Ethics, is
incorporated herein by reference to exhibit (p)(11) of Post-Effective Amendment
No. 207 to the Registrant's Registration Statement on Form N-1A (File No.
33-42484), filed with the SEC via EDGAR Accession No. 0001135428-13-000118 on
March 1, 2013.
(p)(12) Acadian Asset Management, LLC Revised Code of Ethics is incorporated
herein by reference to exhibit (p)(12) of Post-Effective Amendment No. 193 to
the Registrant's Registration Statement on Form N-1A (File Nos. 33-42484),
filed with the SEC via EDGAR Accession No. 0001135428-12-000370 on August 22,
2012.
(p)(13) Westwood Management Corp. Revised Code of Ethics is incorporated herein
by reference to exhibit (p)(13) of Post-Effective Amendment No. 207 to the
Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed
with the SEC via EDGAR Accession No. 0001135428-13-000118 on March 1, 2013.
(p)(14) Edgewood Management LLC Revised Code of Ethics, to be filed by
amendment.
15
(p)(15) PNC Capital Advisors, LLC Code of Ethics dated October 8, 2009 is
incorporated herein by reference to exhibit (h)(30) of Post-Effective Amendment
No. 120 to the Registrant's Registration Statement on Form N-1A (File No.
33-42484), filed with the SEC on March 1, 2010.
(p)(16) Pennant Management, Inc. Code of Ethics is incorporated herein by
reference to exhibit (p)(19) of Post-Effective Amendment No. 112 to the
Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed
with the SEC via EDGAR Accession No. 0001135428-09-000365 on August 21, 2009.
(p)(17) Sands Capital Management, LLC Code of Ethics is incorporated herein by
reference to exhibit (p)(19) of Post-Effective Amendment No. 117 to the
Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed
with the SEC via EDGAR Accession No. 0001135428-10-000009 on January 15, 2010.
(p)(18) AlphaOne Investment Services, LLC Code of Ethics dated May 1, 2011, is
incorporated herein by reference to exhibit (p)(20) of Post-Effective Amendment
No. 158 to the Registrant's Registration Statement on Form N-1A (File No.
33-42484), filed with the SEC via EDGAR Accession No. 0001135428-11-000517 on
September 16, 2011.
(p)(19) Loomis, Sayles & Company L.P. Code of Ethics is incorporated herein by
reference to exhibit (p)(19) of Post-Effective Amendment No. 207 to the
Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed
with the SEC via EDGAR Accession No. 0001135428-13-000118 on March 1, 2013.
(p)(20) CBRE Clarion Securities LLC Code of Ethics is incorporated herein by
reference to exhibit (p)(20) of Post-Effective Amendment No. 207 to the
Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed
with the SEC via EDGAR Accession No. 0001135428-13-000118 on March 1, 2013.
(p)(21) SKY Harbor Capital Management, LLC Code of Ethics is incorporated
herein by reference to exhibit (p)(21) of Post-Effective Amendment No. 207 to
the Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed
with the SEC via EDGAR Accession No. 0001135428-13-000118 on March 1, 2013.
(p)(22) Hamlin Capital Management, LLC Code of Ethics, is incorporated herein
by reference to exhibit (p)(23) of Post-Effective Amendment No. 184 to the
Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed
with the SEC via EDGAR Accession No. 0001135428-12-000197 on March 28, 2012.
(p)(23) Thomson Horstmann & Bryant, Inc. Code of Ethics, is incorporated herein
by reference to exhibit (p)(24) of Post-Effective Amendment No. 184 to the
Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed
with the SEC via EDGAR Accession No. 0001135428-12-000197 on March 28, 2012.
(p)(24) SEI Investments Distribution Co. Code of Ethics as revised January 1,
2012 is incorporated herein by reference to exhibit (p)(25) of Post-Effective
Amendment No. 200 to the Registrant's Registration Statement on Form N-1A (File
No. 33-42484), filed with the SEC via EDGAR Accession No. 0001135428-12-000571
on December 7, 2012.
(p)(25) Citigroup First Investment Management Americas LLC Code of Ethics is
incorporated herein by reference to exhibit (p)(26) of Post-Effective Amendment
No. 190 to the Registrant's Registration
16
Statement on Form N-1A (File No. 33-42484), filed with the SEC via EDGAR
Accession No. 0001135428-12-000262 on May 23, 2012.
(p)(26) Cornerstone Advisors, Inc. Code of Ethics is incorporated herein by
reference to exhibit (p)(27) of Post-Effective Amendment No. 193 to the
Registrant's Registration Statement on Form N-1A (File Nos. 33-42484), filed
with the SEC via EDGAR Accession No. 0001135428-12-000370 on August 22, 2012.
(p)(27) Parametric Portfolio Associates LLC Code of Ethics is incorporated
herein by reference to exhibit (p)(28) of Post-Effective Amendment No. 193 to
the Registrant's Registration Statement on Form N-1A (File Nos. 33-42484),
filed with the SEC via EDGAR Accession No. 0001135428-12-000370 on August 22,
2012.
(p)(28) Harris Associates L.P. Code of Ethics is incorporated herein by
reference to exhibit (p)(29) of Post-Effective Amendment No. 193 to the
Registrant's Registration Statement on Form N-1A (File Nos. 33-42484), filed
with the SEC via EDGAR Accession No. 0001135428-12-000370 on August 22, 2012.
(p)(29) Thornburg Investment Management Inc Code of Ethics is incorporated
herein by reference to exhibit (p)(30) of Post-Effective Amendment No. 193 to
the Registrant's Registration Statement on Form N-1A (File Nos. 33-42484),
filed with the SEC via EDGAR Accession No. 0001135428-12-000370 on August 22,
2012.
(p)(30) Marsico Capital Management, LLC Revised Code of Ethics is incorporated
herein by reference to exhibit (p)(30) of Post-Effective Amendment No. 207 to
the Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed
with the SEC via EDGAR Accession No. 0001135428-13-000118 on March 1, 2013.
(p)(31) Turner Investments, L.P. Code of Ethics is incorporated herein by
reference to exhibit (p)(32) of Post-Effective Amendment No. 193 to the
Registrant's Registration Statement on Form N-1A (File Nos. 33-42484), filed
with the SEC via EDGAR Accession No. 0001135428-12-000370 on August 22, 2012.
(p)(32) Cramer Rosenthal McGlynn LLC Code of Ethics is incorporated herein by
reference to exhibit (p)(33) of Post-Effective Amendment No. 193 to the
Registrant's Registration Statement on Form N-1A (File Nos. 33-42484), filed
with the SEC via EDGAR Accession No. 0001135428-12-000370 on August 22, 2012.
(p)(33) Fairpointe Capital LLC Code of Ethics is incorporated herein by
reference to exhibit (p)(34) of Post-Effective Amendment No. 193 to the
Registrant's Registration Statement on Form N-1A (File Nos. 33-42484), filed
with the SEC via EDGAR Accession No. 0001135428-12-000370 on August 22, 2012.
(p)(34) Phocas Financial Corporation Code of Ethics is incorporated herein by
reference to exhibit (p)(35) of Post-Effective Amendment No. 193 to the
Registrant's Registration Statement on Form N-1A (File Nos. 33-42484), filed
with the SEC via EDGAR Accession No. 0001135428-12-000370 on August 22, 2012.
(p)(35) TCW Investment Management Company Code of Ethics, is to be filed by
amendment.
(p)(36) Amendment to the TCW Investment Management Company Code of Ethics is
incorporated herein by reference to exhibit (p)(37) of Post-Effective Amendment
No. 193 to the Registrant's Registration Statement on Form N-1A (File Nos.
33-42484), filed with the SEC via EDGAR Accession No. 0001135428-12-000370 on
August 22, 2012.
17
(p)(37) Allianz Global Investors Capital LLC Code of Ethics is incorporated
herein by reference to exhibit (p)(38) of Post-Effective Amendment No. 193 to
the Registrant's Registration Statement on Form N-1A (File Nos. 33-42484),
filed with the SEC via EDGAR Accession No. 0001135428-12-000370 on August 22,
2012.
(p)(38) Driehaus Capital Management LLC Revised Code of Ethics is incorporated
herein by reference to exhibit (p)(38) of Post-Effective Amendment No. 207 to
the Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed
with the SEC via EDGAR Accession No. 0001135428-13-000118 on March 1, 2013.
(p)(39) OFI SteelPath, Inc. Code of Ethics is incorporated herein by reference
to exhibit (p)(39) of Post-Effective Amendment No. 207 to the Registrant's
Registration Statement on Form N-1A (File No. 33-42484), filed with the SEC via
EDGAR Accession No. 0001135428-13-000118 on March 1, 2013.
(p)(40) AlphaSimplex Group, LLC Code of Ethics is incorporated herein by
reference to exhibit (p)(41) of Post-Effective Amendment No. 193 to the
Registrant's Registration Statement on Form N-1A (File Nos. 33-42484), filed
with the SEC via EDGAR Accession No. 0001135428-12-000370 on August 22, 2012.
(p)(41) AQR Capital Management, LLC Code of Ethics is incorporated herein by
reference to exhibit (p)(42) of Post-Effective Amendment No. 193 to the
Registrant's Registration Statement on Form N-1A (File Nos. 33-42484), filed
with the SEC via EDGAR Accession No. 0001135428-12-000370 on August 22, 2012.
(p)(42) ClariVest Asset Management LLC Revised Code of Ethics is incorporated
herein by reference to exhibit (p)(42) of Post-Effective Amendment No. 207 to
the Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed
with the SEC via EDGAR Accession No. 0001135428-13-000118 on March 1, 2013.
(p)(43) Kayne Anderson Capital Advisors, L.P. Code of Ethics is incorporated
herein by reference to exhibit (p)(44) of Post-Effective Amendment No. 193 to
the Registrant's Registration Statement on Form N-1A (File Nos. 33-42484),
filed with the SEC via EDGAR Accession No. 0001135428-12-000370 on August 22,
2012.
(p)(44) BlackRock Financial Management, LLC Code of Ethics is incorporated
herein by reference to exhibit (p)(45) of Post-Effective Amendment No. 193 to
the Registrant's Registration Statement on Form N-1A (File Nos. 33-42484),
filed with the SEC via EDGAR Accession No. 0001135428-12-000370 on August 22,
2012.
(p)(45) Harvest Global Investments Limited Code of Ethics is incorporated
herein by reference to exhibit (p)(46) of Post-Effective Amendment No. 200 to
the Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed
with the SEC via EDGAR Accession No. 0001135428-12-000571 on December 7, 2012.
(p)(46) Fayez Sarofim & Co. Code of Ethics to be filed by amendment.
(q) Powers of Attorney for Ms. Betty L. Krikorian and Messrs. Robert A. Nesher,
Michael Lawson, William M. Doran, John K. Darr, George J. Sullivan, Jr.,
Charles E. Carlbom, James M. Storey, Philip T. Masterson, Mitchell A. Johnson,
Bruce Speca and Joseph T. Grause are incorporated herein by reference to
exhibit (q) of Post-Effective Amendment No. 179 to the Registrant's
Registration Statement on Form
18
N-1A (File No. 33-42484), filed with the SEC via EDGAR Accession No.
0001135428-12-000087 on February 28, 2012.
ITEM 29. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT:
Not Applicable.
ITEM 30. INDEMNIFICATION:
Article VIII of the Agreement and Declaration of Trust filed as Exhibit (a) to
the Registrant's Registration Statement is incorporated herein by reference.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "1933 Act") may be permitted to trustees, directors, officers and
controlling persons of the Registrant by the Registrant pursuant to the
Agreement and Declaration of Trust or otherwise, the Registrant is aware that
in the opinion of the SEC, such indemnification is against public policy as
expressed in the 1933 Act and, therefore, is unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by trustees, directors, officers or
controlling persons of the Registrant in connection with the successful defense
of any act, suit or proceeding) is asserted by such trustees, directors,
officers or controlling persons in connection with the shares being registered,
the Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the 1933 Act and will be governed by the final adjudication of
such issues.
ITEM 31. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISERS:
The following lists any other business, profession, vocation or employment of a
substantial nature in which each investment adviser, and each director, officer
or partner of that investment adviser, is or has been engaged within the last
two fiscal years for his or her own account or in the capacity of director,
officer, employee, partner, or trustee. Unless noted below, none of the
investment advisers, and/or director, officer or partner of each investment
adviser, is or has been engaged within the last two fiscal years in any other
business, profession, vocation or employment of a substantial nature for his or
her own account or in the capacity of director, officer, employee, partner or
trustee.
ACADIAN ASSET MANAGEMENT LLC
Acadian Asset Management LLC ("Acadian") serves as the investment adviser to
the Acadian Emerging Markets Portfolio and Acadian Emerging Markets Debt Fund
and as an investment sub-adviser to the Cornerstone Advisors Global Public
Equity Fund. The principal address of Acadian is 260 Franklin Street, Boston,
Massachusetts 02110. Acadian is an investment adviser registered under the
Investment Advisers Act of 1940.
--------------------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
INVESTMENT ADVISER
--------------------------------------------------------------------------------------------------------
Laurent De Greef, Member of Acadian Asset Management Managing Director, asset
Board of Managers (UK) Ltd management
--------------------------------------------------------------------------------------------------------
John Chisholm, Executive Acadian Asset Management
Vice President, CIO, Member (UK) Ltd Director, asset management
of Board of Managers
--------------------------------------------------------------------------------------------------------
Acadian Asset Management Director, asset management
(UK) Ltd
Churchill Franklin, Executive --------------------------------------------------------------------------
Vice President, COO, Acadian Asset Management
Member of Board of (Australia) Ltd Director, asset management
Managers --------------------------------------------------------------------------
Acadian Cayman Limited G.P. Director, asset management
--------------------------------------------------------------------------------------------------------
Ronald Frashure, Chairman, Acadian Asset Management Director, asset management
Member of Board of (Singapore) Pte Ltd
Managers --------------------------------------------------------------------------
Acadian Cayman Limited G.P. Director, asset management
--------------------------------------------------------------------------------------------------------
Mark Minichiello, Executive Acadian Asset Management Director, asset management
Vice President, COO, (UK) Ltd
Treasurer, Secretary, Member --------------------------------------------------------------------------
of Board of Managers Acadian Asset Management
(Singapore) Pte Ltd Director, asset management
--------------------------------------------------------------------------------------------------------
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NAME AND POSITION WITH NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
INVESTMENT ADVISER
--------------------------------------------------------------------------------------------------------
Ross Dowd, Executive Vice Acadian Asset Management Director, asset management
President, Head of Client (UK) Ltd
Service, Member of Board of ----------------------------------------------------------------------------
Managers Acadian Cayman Limited G.P. Director, asset management
----------------------------------------------------------------------------
Acadian Asset Management Director, asset management
(Singapore) Pte Ltd
--------------------------------------------------------------------------------------------------------
Linda Gibson, Member of Director, Executive Vice
Board of Managers President and Head of Global
Distribution - Old Mutual (US)
Holdings Inc. (a holding
company);
Acadian Asset Management LLC
(an investment advisor);
Barrow, Hanley, Mewhinney &
Strauss, LLC (an investment
advisor);
The Campbell Group, Inc. (a
holding company for The
Campbell Group LLC)
Echo Point Investment
Management, LLC (an
investment advisor);
Old Mutual (HFL) Inc. (a
holding company for Heitman Affiliated Directorships
affiliated financial services
firms);
Investment Counselors of
Maryland, LLC (an investment
advisor);
Old Mutual Asset Management
International, Ltd. (an investment
advisor);
Copper Rock Capital Partners,
LLC (an investment advisor);
Old Mutual Investment Partners
(a registered broker-dealer);
Rogge Global Partners plc (an
investment advisor);
Thompson, Siegel & Walmsley
LLC (an investment advisor)
--------------------------------------------------------------------------------------------------------
Matthew Berger, Member of Senior Vice President, Finance
Board of Managers and Affiliate Management - Old
Mutual (US) Holdings Inc. (a
holding company); Affiliated Directorships
Acadian Asset Management LLC
(investment advisor)
--------------------------------------------------------------------------------------------------------
Christopher Hadley, Member Executive Vice President, Head
of Board of Managers of Human Resources - Old
Mutual (US) Holdings Inc. (a Affiliated Directorships
--------------------------------------------------------------------------------------------------------
20
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--------------------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
INVESTMENT ADVISER
--------------------------------------------------------------------------------------------------------
holding company);
Acadian Asset Management LLC
(an investment advisor)
--------------------------------------------------------------------------------------------------------
Aidan Riordan, Member of Executive Vice President, Head
Board of Managers of Affiliate Management - Old
Mutual (US) Holdings Inc. (a
holding company);
Acadian Asset Management LLC Affiliated Directorships
(an investment advisor);
Copper Rock Capital Partners
LLC (an investment advisor);
Echo Point Investment
Management, LLC (an
investment advisor)
--------------------------------------------------------------------------------------------------------
Stephen Belgrad, Member of Director, Chief Financial Officer
Board of Managers and Executive Vice President-
Old Mutual (US) Holdings Inc.
(a holding company); Acadian
Asset Management LLC (an
investment advisor);
Old Mutual Asset Management Affiliated Directorships
International, Ltd. (an investment
advisor)
--------------------------------------------------------------------------------------------------------
AIG ASSET MANAGEMENT (U.S.), LLC
AIG Asset Management (U.S.), LLC ("AIG") serves as the investment adviser for
the AIG Money Market Fund. The principal address of AIG is 80 Pine Street, New
York, New York 10005. AIG is an investment adviser registered under the
Investment Advisers Act of 1940.
During the last two fiscal years, no director, officer or partner of AIG has
engaged in any other business, profession, vocation or employment of a
substantial nature for his or her own account or in the capacity of director,
officer, employee, partner or trustee.
ALLIANZ GLOBAL INVESTORS U.S. LLC
Allianz Global Investors U.S. LLC ("Allianz Global Investors U.S.") serves as
an investment sub-adviser for the Cornerstone Advisors Global Public Equity
Fund. The principal address of Allianz Global Investors U.S. is 1633 Broadway,
New York, NY 10019. Allianz Global Investors U.S. is an investment adviser
registered under the Investment Advisers Act of 1940.
During the last two fiscal years, no director, officer or partner of Allianz
Global Investors U.S. has engaged in any other business, profession, vocation
or employment of a substantial nature for his or her own account or in the
capacity of director, officer, employee, partner or trustee.
ALPHAONE INVESTMENT SERVICES, LLC
AlphaOne Investment Services, LLC ("AlphaOne") serves as the investment adviser
for the AlphaOne Small Cap Growth Fund, AlphaOne Micro Cap Equity Fund and
AlphaOne U.S. Equity Long Short Fund. The principal address of AlphaOne is One
Tower Bridge, 100 Front Street, Suite 1250, West
21
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Conshohocken, PA 19428. AlphaOne is an investment adviser registered under the
Investment Advisers Act of 1940.
During the last two fiscal years, no director, officer or partner of AlphaOne
has engaged in any other business, profession, vocation or employment of a
substantial nature for his or her own account or in the capacity of director,
officer, employee, partner or trustee.
ALPHASIMPLEX GROUP, LLC
AlphaSimplex Group, LLC ("AlphaSimplex") serves as an investment sub-adviser
for the Cornerstone Advisors Public Alternatives Fund. The principal address of
AlphaSimplex is One Cambridge Center, Cambridge, Massachusetts 02142.
AlphaSimplex is an investment adviser registered under the Investment Advisers
Act of 1940.
--------------------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
--------------------------------------------------------------------------------------------------------
Andrew W. Lo Massachusetts Institute of
Chief Investment Technology (MIT) -- Sloan School Charles E. and Susan T. Harris
Strategist, Chairman of the of Management Professor
Board 100 Main Street
E62-618
Cambridge, MA 02142 Director of the Laboratory for
United States Financial Engineering
--------------------------------------------------------------------------------------------------------
AQR CAPITAL MANAGEMENT, LLC
AQR Capital Management, LLC ("AQR") serves as an investment sub-adviser for the
Cornerstone Advisors Public Alternatives Fund. The principal address of AQR is
Two Greenwich Plaza, 3rd Floor, Greenwich, Connecticut 06830. AQR is an
investment adviser registered under the Investment Advisers Act of 1940.
--------------------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
--------------------------------------------------------------------------------------------------------
Lasse Pedersen, NYU Stern School of Business John A. Paulson Professor of
Principal Henry Kaufman Management Center Finance and Alternative
44 West Fourth Street Investments, 2009 -- present (on
New York, NY 10012 leave)
--------------------------------------------------------------------------------
Copenhagen Business School Professor (2011-present)
Howitzvej 60,
2000 Frederiksberg, Denmark
3815 3815
---------------------------------------------------------------------------------
Financial Times Stock Exchange Advisory Board Member (2009-
(FTSE) present)
1270 Avenue of the Americas
New York, NY 10020
---------------------------------------------------------------------------------
NASDAQ OMX Economic Advisory Board
One Liberty Plaza Member (2008-2011)
New York, NY
--------------------------------------------------------------------------------------------------------
22
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NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
--------------------------------------------------------------------------------------------------------
American Finance Association Director (2011-present)
Haas School of Business
University of California
Berkeley, CA 94729-1900
---------------------------------------------------------------------------------
Federal Reserve Bank of New York Member of Monetary Policy
33 Liberty Street Panel (2010-2011)
New York, NY 10045 Member of Liquidity Working
Group (2009-2011)
--------------------------------------------------------------------------------------------------------
John Howard, AllianceBernstein Chief Financial Officer, March
Principal and Chief 1345 Avenue of the Americas 2010 through February 2011
Operating Officer New York, New York 10105
--------------------------------------------------------------------------------------------------------
BLACKROCK FINANCIAL MANAGEMENT, LLC
BlackRock Financial Management, LLC ("BlackRock") serves as an investment
sub-adviser for the Cornerstone Advisors Real Assets Fund. The principal
address of BlackRock is 55 East 52(nd) Street New York, New York 10055.
BlackRock is an investment adviser registered under the Investment Advisers Act
of 1940.
The information required by this Item 31 with respect to each director, officer
or partner of BlackRock for the fiscal years ended October 31, 2011 and 2012 is
incorporated herein by reference to Form ADV filed by BlackRock with the SEC.
CAMBIAR INVESTORS LLC
Cambiar Investors LLC ("Cambiar") serves as the investment adviser to the
Cambiar Opportunity Fund, the Cambiar International Equity Fund, the Cambiar
Small Cap Fund, the Cambiar Aggressive Value Fund, the Cambiar SMID Fund
(formerly, the Cambiar Smid 30 Fund) and the Cambiar Global Select Fund. The
principal address of Cambiar is 2401 East Second Street, Suite 400, Denver,
Colorado 80206. Cambiar is an investment adviser registered under the
Investment Advisers Act of 1940.
For the fiscal years ended April 30, 2011 and 2012, none of the directors,
officers or partners of Cambiar is or has been engaged in any other business,
profession, vocation or employment of a substantial nature for his or her own
account or in the capacity of director, officer, employee, partner or trustee.
CBRE CLARION SECURITIES LLC
CBRE Clarion Securities LLC ("CBRE Clarion") serves as the investment adviser
for the CBRE Clarion Long/Short Fund. The principal address of CBRE Clarion is
201 King of Prussia Road, Suite 600, Radnor, PA 19087. CBRE Clarion is an
investment adviser registered under the Investment Advisers Act of 1940.
--------------------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
--------------------------------------------------------------------------------------------------------
T. Ritson Ferguson CBRE Clarion Global Real Estate Interested Trustee
Income Fund (IGR)
Chief Executive Officer
and Co-Chief Investment c/o 201 King of Prussia Road, Suite
Officer 600, Radnor, PA 19087
--------------------------------------------------------------------------------------------------------
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NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
--------------------------------------------------------------------------------------------------------
CBRE Clarion Global, Ltd. Director
c/o 201 King of Prussia Road, Suite
600, Radnor, PA 19087
--------------------------------------------------------------------------------------------------------
Joseph P. Smith CBRE Clarion Global, Ltd. Director
Managing Director and c/o 201 King of Prussia Road, Suite
Co-Chief Investment 600, Radnor, PA 19087
Officer
--------------------------------------------------------------------------------------------------------
Jarrett B. Kling Hirtle Callaghan Trust Trustee
Managing Director -- Sales 300 Barr Harbor Dr, Suite 500
and Marketing West Conshohocken, PA 19428
-----------------------------------------------------------------------------
Old Mutual Funds I Trustee (resigned 2012)
4643 South Ulster Street
Suite 600
Denver, CO 80237-2853
-----------------------------------------------------------------------------
Old Mutual Funds II Trustee (resigned 2012)
4643 South Ulster Street
Suite 600
Denver, CO 80237-2853
-----------------------------------------------------------------------------
Boys and Girls Clubs of America National Trustee
1275 Peachtree Street NE
Atlanta, GA 30309-3506
--------------------------------------------------------------------------------------------------------
William Zitelli CBRE Clarion Global Real Estate Chief Compliance Officer
Income Fund (IGR)
General Counsel
c/o 201 King of Prussia Road, Suite
600, Radnor, PA 19087
--------------------------------------------------------------------------------------------------------
Jonathan Blome CBRE Clarion Global Real Estate Chief Financial Officer
Income Fund (IGR)
Chief Financial Officer
c/o 201 King of Prussia Road, Suite
600, Radnor, PA 19087
--------------------------------------------------------------------------------------------------------
24
|
CITIGROUP FIRST INVESTMENT MANAGEMENT AMERICAS LLC
Citigroup First Investment Management Americas LLC ("Citi") serves as the
investment adviser for the Citi Market Pilot 2020 Fund, Citi Market Pilot 2030
Fund and Citi Market Pilot 2040 Fund. The principal address of Citi is 388
Greenwich Street, New York, New York 10013. Citi is an investment adviser
registered under the Investment Advisers Act of 1940. [To be completed by
amendment.]
--------------------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
CLARIVEST ASSET MANAGEMENT LLC
ClariVest Asset Management LLC ("ClariVest") serves as an investment
sub-adviser for the Cornerstone Advisors Public Alternatives Fund. The
principal address of ClariVest is 11452 El Camino Real, Suite 250, San Diego,
California 92130. ClariVest is an investment adviser registered under the
Investment Advisers Act of 1940.
--------------------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
--------------------------------------------------------------------------------------------------------
Richard Rossi Eagle Asset Management Inc. Director, President, Co-Chief
Manager 880 Carillon Parkway Operating Officer
St Petersburg, FL 33716
---------------------------------------------------------------------------------
ClariVest Asset Management LLC Manager
11452 El Camino Real
Suite 250
San Diego, CA 92130
--------------------------------------------------------------------------------------------------------
J. Cooper Abbott Eagle Asset Management Inc. Director, Executive Vice
Manager 880 Carillon Parkway President - Investments, Co-Chief
St Petersburg, FL 33716 Operating Officer
---------------------------------------------------------------------------------
ClariVest Asset Management LLC Manager
11452 El Camino Real
Suite 250
San Diego, CA 92130
--------------------------------------------------------------------------------------------------------
Courtland James Eagle Asset Management Inc. Vice President, Business
Manager 880 Carillon Parkway Development
St Petersburg, FL 33716
---------------------------------------------------------------------------------
ClariVest Asset Management LLC Manager
11452 El Camino Real
Suite 250
San Diego, CA 92130
--------------------------------------------------------------------------------------------------------
CORNERSTONE ADVISORS, INC.
Cornerstone Advisors, Inc. ("Cornerstone") serves as the investment adviser for
the Cornerstone Advisors Global Public Equity, Cornerstone Advisors Income
Opportunities, Cornerstone Advisors Public Alternatives and Cornerstone
Advisors Real Assets Funds. The principal address of Cornerstone is 225
25
|
108th Avenue NE, Suite 400, Bellevue, Washington 98004-5782. Cornerstone is an
investment adviser registered under the Investment Advisers Act of 1940.
--------------------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
--------------------------------------------------------------------------------------------------------
William Savoy BSquare Director
Director / Shareholder 110 -- 110(th) Avenue NE, Suite 200
Bellevue, WA 98004
--------------------------------------------------------------------------------------------------------
William Cornelius Tum-a-Lum Lumber Interim CEO
Director 432 SE Dorion
Pendleton, OR 97801
--------------------------------------------------------------------------------------------------------
Anne Farrell Seattle Foundation President Emeritus
Director 1200 -- 5(th) Avenue, Suite 1300
Seattle, WA 98101
---------------------------------------------------------------------------------
REI Director
6750 S 228(th)
Kent, WA 98032
--------------------------------------------------------------------------------------------------------
CRAMER ROSENTHAL MCGLYNN LLC
Cramer Rosenthal McGlynn LLC ("CRM") serves as an investment sub-adviser for
the Cornerstone Advisors Global Public Equity Fund. The principal address of
CRM is 520 Madison Avenue, 20th Floor, New York, NY 10022. CRM is an investment
adviser registered under the Investment Advisers Act of 1940.
During the last two fiscal years, no director, officer or partner of CRM has
engaged in any other business, profession, vocation or employment of a
substantial nature in the capacity of director, officer, employee, partner or
trustee.
C. S. MCKEE, L.P.
C. S. McKee, L.P. ("C.S. McKee") serves as the investment adviser to the McKee
International Equity Portfolio. The principal address of C.S. McKee is One
Gateway Center, Pittsburgh, Pennsylvania 15222. C.S. McKee is an investment
adviser registered under the Investment Advisers Act of 1940. The information
listed below is for the fiscal years ended October 31, 2011 and 2012.
--------------------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
--------------------------------------------------------------------------------------------------------
Gregory M. Melvin Dartmouth Capital, Inc. President
Chief Investment Officer 750 Stonegate Drive
Wexford, PA 15090
--------------------------------------------------------------------------------------------------------
DRIEHAUS CAPITAL MANAGEMENT LLC
Driehaus Capital Management LLC ("Driehaus") serves as an investment
sub-adviser for the Cornerstone Advisors Global Public Equity Fund. The
principal address of Driehaus is 25 East Erie Street, Chicago, IL 60611.
Driehaus is an investment adviser registered under the Investment Advisers Act
of 1940. The information listed below is as of December 31, 2012 and is true
for fiscal years 2011 and 2012 unless otherwise noted.
26
|
--------------------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME OF OTHER COMPANY CONNECTION WITH OTHER
INVESTMENT ADVISER COMPANY
--------------------------------------------------------------------------------------------------------
Richard H. Driehaus Driehaus Capital Holdings LLC* Chairman
Chairman and Chief ---------------------------------------------------------------------------
Investment Officer Driehaus Mutual Funds** Trustee
---------------------------------------------------------------------------
Driehaus Securities LLC*** Chairman
--------------------------------------------------------------------------------------------------------
Robert H. Gordon Driehaus Capital Holdings LLC* President and Chief Executive
President and Chief Officer
Executive Officer ---------------------------------------------------------------------------
Driehaus Mutual Funds** President since 2011; Senior
Vice President from 2006 to
2011.
---------------------------------------------------------------------------
Driehaus Securities LLC*** President and Chief Executive
Officer
--------------------------------------------------------------------------------------------------------
Janet L. McWilliams Driehaus Capital Holdings LLC* Senior Vice President and
Managing Director, Secretary since 2012.
Secretary and General ---------------------------------------------------------------------------
Counsel since 2012; Driehaus Mutual Funds** Assistant Vice President since
Assistant Vice President and 2006; Chief Compliance Officer
Chief Compliance Officer from 2006 to 2012.
from 2006 to 2012. ---------------------------------------------------------------------------
Driehaus Securities LLC*** Managing Director, Secretary
and General Counsel since 2012;
Assistant Vice President and
Chief Compliance Officer from
2006 to 2012.
--------------------------------------------------------------------------------------------------------
Michelle L. Cahoon Driehaus Capital Holdings LLC* Vice President, Treasurer and
Managing Director, Chief Financial Officer
Treasurer and Chief ---------------------------------------------------------------------------
Financial Officer Driehaus Mutual Funds** Vice President and Treasurer
---------------------------------------------------------------------------
Driehaus Securities LLC*** Managing Director, Treasurer
and Chief Financial Officer
--------------------------------------------------------------------------------------------------------
Stephen T. Weber Driehaus Securities LLC*** Managing Director, Sales and
Managing Director, Sales Relationship Management
and Relationship
Management
--------------------------------------------------------------------------------------------------------
Kaaren Sagastume Driehaus Securities LLC*** Managing Director, IT,
Managing Director, IT, Operations and Trading
Operations and Trading
--------------------------------------------------------------------------------------------------------
Thomas M. Seftenberg Driehaus Securities LLC*** Managing Director, Relationship
Managing Director, Management and Marketing
Relationship Management
and Marketing
--------------------------------------------------------------------------------------------------------
Michael R. Shoemaker Driehaus Mutual Funds** Assistant Vice President and
Assistant Vice President and Chief Compliance Officer
Chief Compliance Officer ---------------------------------------------------------------------------
since 2012; Associate Chief Driehaus Securities LLC*** Assistant Vice President and
Compliance Officer from Chief Compliance Officer
2011 to 2012; Senior ---------------------------------------------------------------------------
Compliance Analyst from Pacific Investment Management Compliance Officer from 2010
Company LLC to 2011.
860 Newport Center Drive
--------------------------------------------------------------------------------------------------------
27
|
--------------------------------------------------------------------------------------------------------
2007 to 2010. Newport Beach, CA 92660
--------------------------------------------------------------------------------------------------------
Michael P. Kailus Driehaus Mutual Funds** Assistant Secretary and Anti-
Assistant Secretary since Money Laundering Compliance
2010. Officer since 2010.
------------------------------------------------------------------------------
Driehaus Securities LLC*** Assistant Secretary since 2010.
------------------------------------------------------------------------------
Superfund USA, LLC Associate General Counsel from
850 W Jackson Blvd, Ste. 600 2005 to 2010.
Chicago, IL 60607
--------------------------------------------------------------------------------------------------------
* Driehaus Capital Holdings LLC, located at 25 East Erie Street, Chicago, IL
60611, is a holding company and is the majority owner of Driehaus Capital
Management LLC and Driehaus Securities LLC.
** Driehaus Mutual Funds, located at 25 East Erie Street, Chicago, IL 60611, is
an open-end management investment company registered with the U.S. Securities
and Exchange Commission under the Investment Company Act of 1940.
*** Driehaus Securities LLC, located at 25 East Erie Street, Chicago, IL 60611,
is a limited-purpose broker-dealer registered with the Financial Industry
Regulatory Authority ("FINRA") and the U.S. Securities and Exchange
Commission.
EDGEWOOD MANAGEMENT LLC
Edgewood Management LLC ("Edgewood") serves as the investment adviser to the
Edgewood Growth Fund. The principal address of Edgewood is 350 Park Avenue,
18th Floor, New York, New York 10022-6057. Edgewood is an investment adviser
registered under the Investment Advisers Act of 1940.
During the last two fiscal years, no director, officer or partner of Edgewood
has engaged in any other business, profession, vocation or employment of a
substantial nature in the capacity of director, officer, employee, partner or
trustee.
FAIRPOINTE CAPITAL LLC
Fairpointe Capital LLC ("Fairpointe") serves as an investment sub-adviser for
the Cornerstone Advisors Global Public Equity Fund. The principal address of
Fairpointe is One N. Franklin Street, Suite 3300, Chicago, IL 60606. Fairpointe
is an investment adviser registered under the Investment Advisers Act of 1940.
During the last two fiscal years, no director, officer or partner of Fairpointe
has engaged in any other business, profession, vocation or employment of a
substantial nature in the capacity of director, officer, employee, partner or
trustee.
FAYEZ SAROFIM & CO.
Fayez Sarofim & Co. ("Fayez Sarofim") serves as the investment adviser for the
Sarofim Equity Fund. The principal address of Fayez Sarofim is 2907 Two Houston
Center, 909 Fannin Street, Houston, Texas 77010. Fayez Sarofim is an investment
adviser registered under the Investment Advisers Act of 1940. [To be completed
by amendment.]
--------------------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
FIRST MANHATTAN CO.
First Manhattan Co. ("FMC") serves as the investment adviser for the FMC Select
Fund and FMC Strategic Value Fund. The principal address of FMC is 437 Madison
Avenue, New York, New York 10022. Effective March 25, 2013, the principal place
of business will be 399 Park Avenue, New York, NY 10022-7001. FMC is an
investment adviser registered under the Investment Advisers Act of 1940. The
information listed below is for the fiscal years ended October 31, 2010 and
2011.
--------------------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME OF OTHER COMPANY CONNECTION WITH OTHER
INVESTMENT ADVISER COMPANY
--------------------------------------------------------------------------------------------------------
David Sanford Gottesman, Berkshire Hathaway, Inc. Member, Board of Directors
--------------------------------------------------------------------------------------------------------
28
|
--------------------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME OF OTHER COMPANY CONNECTION WITH OTHER
INVESTMENT ADVISER COMPANY
--------------------------------------------------------------------------------------------------------
Senior Managing Director American Museum of Natural Trustee
History
---------------------------------------------------------------------------
Mount Sinai Center Trustee
---------------------------------------------------------------------------
Yeshiva University Trustee
--------------------------------------------------------------------------------------------------------
Daniel Rosenbloom, Senior NYU Medical Center Associate Trustee
Managing Director ---------------------------------------------------------------------------
National Foundation for Facial Trustee
Reconstruction
--------------------------------------------------------------------------------------------------------
Charles M. Rosenthal, Senior Carnegie Hall Trustee
Managing Director ---------------------------------------------------------------------------
Marine Biological Laboratory Trustee
--------------------------------------------------------------------------------------------------------
Arthur Joel Stainman, Senior Ark Restaurants Corp. Member, Board of Directors
Managing Director ---------------------------------------------------------------------------
Rider University Trustee
--------------------------------------------------------------------------------------------------------
Robert W. Gottesman, Chief Gruss Foundation Trustee
Executive Officer and Senior
Managing Director
--------------------------------------------------------------------------------------------------------
William F. Guardenier, John Hart Hunter Foundation Trustee
Senior Managing Director ---------------------------------------------------------------------------
New Hampton School Trustee
--------------------------------------------------------------------------------------------------------
HAMLIN CAPITAL MANAGEMENT, LLC
Hamlin Capital Management, LLC ("Hamlin") serves as the investment adviser for
the Hamlin High Dividend Equity Fund. The principal address of Hamlin is 477
Madison Avenue, Suite 520, New York, NY 10022. Hamlin is an investment adviser
registered under the Investment Advisers Act of 1940. [To be completed by
amendment.]
--------------------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
HARRIS ASSOCIATES L.P.
Harris Associates L.P. ("Harris") is a registered investment adviser under the
Investment Advisers Act of 1940. Harris serves as an investment sub-adviser for
the Cornerstone Advisors Global Public Equity Fund. The directors and executive
officers of Harris, or Harris Associates, Inc. ("HAI"), its general partner,
have had as their sole business, profession, vocation or employment during the
past two years only their duties as executive officers/employees of Harris;
Harris' ultimate parent company, Natixis Global Asset Management ("NGAM"); HAI;
Harris Associates Investment Trust ("HAIT"), a U.S. registered investment
company consisting of the seven Oakmark Funds for which Harris serves as the
advisor and sponsor; and/or Harris Associates Securities L.P. ("HASLP"), an
affiliated limited-purpose
29
|
broker-dealer of which Harris is a limited partner. The business address of
Harris, HAI, HAIT and HASLP is Two North LaSalle Street, Suite 500, Chicago,
Illinois 60602.
--------------------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME OF OTHER COMPANY CONNECTION WITH OTHER
INVESTMENT ADVISER COMPANY
--------------------------------------------------------------------------------------------------------
Robert M. Levy HAI Director, Chairman and Chief
Chairman, Chief Investment Investment Officer, Domestic
Officer, Domestic Equity and Equity
Portfolio Manager ------------------------------------------------------------------------
HAIT Executive Vice President
------------------------------------------------------------------------
HASLP Chairman and Chief Investment
Officer, Domestic Equity
--------------------------------------------------------------------------------------------------------
Kristi L. Rowsell HAI Director and President
President ------------------------------------------------------------------------
HAIT Trustee and President
------------------------------------------------------------------------
HASLP President
--------------------------------------------------------------------------------------------------------
Anthony P. Coniaris HAIT Portfolio Manager (Oakmark
Portfolio Manager and Analyst Select Fund), since 2013
--------------------------------------------------------------------------------------------------------
John N. Desmond HAI Chief Operating Officer
Chief Operating Officer ------------------------------------------------------------------------
HAIT Vice President
------------------------------------------------------------------------
HASLP Chief Operating Officer
--------------------------------------------------------------------------------------------------------
Thomas E. Herman HAI Chief Financial Officer and
Chief Financial Officer and Treasurer
Treasurer ------------------------------------------------------------------------
HAIT Principal Financial Officer, since
2011
------------------------------------------------------------------------
HASLP Chief Financial Officer and
Treasurer
--------------------------------------------------------------------------------------------------------
David G. Herro HAI Director, Vice President and
Vice President, Chief Chief Investment Officer,
Investment Officer, International Equity
International Equity, Portfolio ------------------------------------------------------------------------
Manager and Analyst HAIT Vice President and Portfolio
Manager (Oakmark Global Select
Fund, Oakmark International
Fund and Oakmark International
Small Cap Fund)
--------------------------------------------------------------------------------------------------------
Edward S. Loeb HAI Vice President, since 2012
Vice President and Portfolio
Manager
--------------------------------------------------------------------------------------------------------
Colin P. McFarland HAI Chief Compliance Officer
Chief Compliance Officer
--------------------------------------------------------------------------------------------------------
Clyde S. McGregor HAI Vice President
Vice President and Portfolio ------------------------------------------------------------------------
Manager HAIT Vice President and Portfolio
Manager (Oakmark Equity and
Income Fund and Oakmark
Global Fund)
--------------------------------------------------------------------------------------------------------
Thomas W. Murray HAI Vice President and Director of
Vice President, Director of Domestic Research, since 2012
Domestic Research, Portfolio ------------------------------------------------------------------------
Manager and Analyst HAIT Vice President and Portfolio
Manager (Oakmark Select Fund),
since 2013
--------------------------------------------------------------------------------------------------------
Michael J. Neary HAI Managing Director, Marketing
and Client Relations
--------------------------------------------------------------------------------------------------------
30
|
--------------------------------------------------------------------------------------------------------
Vice President and Managing
Director, Marketing and Client HAIT Vice President
Relations
--------------------------------------------------------------------------------------------------------
William C. Nygren HAI Vice President
Vice President, Portfolio -------------------------------------------------------------------------
Manager and Analyst HAIT Vice President and Portfolio
Manager (Oakmark Fund,
Oakmark Select Fund and
Oakmark Global Select Fund)
--------------------------------------------------------------------------------------------------------
Janet L. Reali HAI Director, Vice President, General
Vice President, General Counsel and Secretary
Counsel and Secretary -------------------------------------------------------------------------
HAIT Vice President, Secretary and
Chief Legal Officer
-------------------------------------------------------------------------
HASLP General Counsel and Chief
Compliance Officer
--------------------------------------------------------------------------------------------------------
Robert A. Taylor HAI Vice President and Director of
Vice President, Director of International Research
International Research, -------------------------------------------------------------------------
Portfolio Manager and Analyst HAIT Vice President and Portfolio
Manager (Oakmark Global Fund
and Oakmark International Fund)
--------------------------------------------------------------------------------------------------------
Pierre Servant HAI Director
-------------------------------------------------------------------------
Natixis Global Asset Chief Executive Officer and
Management Member of Executive Committee
21 quai d'Austerlitz 75013
Paris, France
--------------------------------------------------------------------------------------------------------
John Hailer HAI Director
-------------------------------------------------------------------------
Natixis Global Asset President and Chief Executive
Management LLC Officer
399 Boylston Street
Boston, MA 02116
--------------------------------------------------------------------------------------------------------
HARVEST GLOBAL INVESTMENTS LIMITED
Harvest Global Investments Limited ("Harvest") serves as the investment adviser
for the Harvest China All Assets Fund and the Harvest Intermediate Bond Fund.
The principal address of Harvest is 31/F One Exchange Square, 8 Connaught
Place, Central Hong Kong. Harvest is an investment adviser registered under the
Investment Advisers Act of 1940. [To be completed by amendment.]
--------------------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
HAVERFORD FINANCIAL SERVICES, INC.
Haverford Financial Services, Inc. ("Haverford") serves as the investment
adviser for the Haverford Quality Growth Stock Fund. The principal address of
Haverford is Three Radnor Corporate Center, Suite 450, Radnor, Pennsylvania
19087-4546. Haverford is an investment adviser registered under the Investment
Advisers Act of 1940. The information listed below is for the fiscal years
ended October 31, 2011 and 2012.
--------------------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
--------------------------------------------------------------------------------------------------------
George W. Connell The Haverford Trust Company Vice Chairman & Indirect Owner
--------------------------------------------------------------------------------------------------------
31
|
--------------------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
--------------------------------------------------------------------------------------------------------
Vice Chairman & Owner 3 Radnor Corporate Center, Suite
450
Radnor, PA 19087
------------------------------------------------------------------------------
Haverford Trust Securities, Inc. Vice Chairman & Indirect Owner
3 Radnor Corporate Center, Suite
450
Radnor, PA 19087
------------------------------------------------------------------------------
Drexel Morgan & Co. CEO,President & Owner
3 Radnor Corporate Center, Suite
450
Radnor, PA 19087
------------------------------------------------------------------------------
Drexel Morgan Capital Advisers, Director, Indirect Owner
Inc.
3 Radnor Corporate Center, Suite
305
Radnor, PA 19087
--------------------------------------------------------------------------------------------------------
Joseph J. McLaughlin The Haverford Trust Company Chairman & CEO
Chairman, CEO & President 3 Radnor Corporate Center, Suite
450
Radnor, PA 19087
------------------------------------------------------------------------------
Haverford Trust Securities, Inc. Registered Representative
3 Radnor Corporate Center, Suite
450
Radnor, PA 19087
--------------------------------------------------------------------------------------------------------
Binney H. C. Wietlisbach The Haverford Trust Company President
Executive Vice President 3 Radnor Corporate Center, Suite
450
Radnor, PA 19087
------------------------------------------------------------------------------
Haverford Trust Securities, Inc. CEO & President
3 Radnor Corporate Center, Suite
450
Radnor, PA 19087
--------------------------------------------------------------------------------------------------------
Henry B. Smith The Haverford Trust Company Vice President & CIO
Vice President and CIO 3 Radnor Corporate Center, Suite
450
Radnor, PA 19087
------------------------------------------------------------------------------
Haverford Trust Securities, Inc. Registered Representative
3 Radnor Corporate Center, Suite
450
Radnor, PA 19087
--------------------------------------------------------------------------------------------------------
32
|
--------------------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
--------------------------------------------------------------------------------------------------------
David Brune The Haverford Trust Company Vice President
Vice President 3 Radnor Corporate Center, Suite
450
Radnor, PA 19087
-------------------------------------------------------------------------------
Haverford Trust Securities, Inc. Registered Representative
3 Radnor Corporate Center, Suite
450
Radnor, PA 19087
--------------------------------------------------------------------------------------------------------
John H. Donaldson The Haverford Trust Company Vice President
Vice President 3 Radnor Corporate Center, Suite
450
Radnor, PA 19087
--------------------------------------------------------------------------------------------------------
Timothy A. Hoyle The Haverford Trust Company Vice President
Vice President 3 Radnor Corporate Center, Suite
450
Radnor, PA 19087
-------------------------------------------------------------------------------
Haverford Trust Securities, Inc. Registered Representative
3 Radnor Corporate Center, Suite
450
Radnor, PA 19087
--------------------------------------------------------------------------------------------------------
Jeffrey M. Bagley The Haverford Trust Company Vice President
Vice President 3 Radnor Corporate Center, Suite
450
Radnor, PA 19087
--------------------------------------------------------------------------------------------------------
MarieElena V. Ness The Haverford Trust Company VP & Chief Compliance Officer
Chief Compliance Officer 3 Radnor Corporate Center, Suite
450
Radnor, PA 19087
-------------------------------------------------------------------------------
Haverford Trust Securities, Inc. VP & Chief Compliance Officer
3 Radnor Corporate Center, Suite
450
Radnor, PA 19087
-------------------------------------------------------------------------------
Drexel Morgan & Co. VP & Chief Compliance Officer
3 Radnor Corporate Center, Suite
450
Radnor, PA 19087
-------------------------------------------------------------------------------
Regulatory Compliance Assistance, Sole Member
LLC
--------------------------------------------------------------------------------------------------------
33
|
INVESTMENT COUNSELORS OF MARYLAND, LLC
Investment Counselors of Maryland, LLC ("ICM") serves as the investment adviser
to the ICM Small Company Portfolio. The principal address of ICM is 803
Cathedral Street, Baltimore, Maryland 21201. ICM is an investment adviser
registered under the Investment Advisers Act of 1940. The information listed
below is for the fiscal years ended October 31, 2011 and 2012.
--------------------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
--------------------------------------------------------------------------------------------------------
William V. Heaphy, CFA Cognapse, Inc. Director
CIO, Portfolio Manager 458 Main Street
Reisterstown, MD 21136
--------------------------------------------------------------------------------------------------------
KAYNE ANDERSON CAPITAL ADVISORS, L.P.
Kayne Anderson Capital Advisors, L.P. ("KACALP") serves as an investment
sub-adviser for the Cornerstone Advisors Real Assets Fund. The principal
address of KACALP is 1800 Avenue of the Stars, Third Floor, Los Angeles,
California 90067. KACALP is an investment adviser registered under the
Investment Advisers Act of 1940.
During the last two fiscal years, the KACALP portfolio manager responsible for
the management of the Cornerstone Advisors Real Assets Fund has not engaged in
any other business profession, vocation or employment of a substantial nature
in the capacity of director, officer, employee, partner or trustee.
LOOMIS, SAYLES & COMPANY, L.P.
Loomis, Sayles & Company, L.P. ("Loomis Sayles") serves as the investment
adviser to the Loomis Sayles Full Discretion Institutional Securitized Fund.
The address of Loomis Sayles is One Financial Center, Boston, Massachusetts
02111. Loomis Sayles is an investment adviser registered under the Investment
Advisers Act of 1940. The information listed below is provided as of [date].
[To be updated by amendment]
--------------------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
LSV ASSET MANAGEMENT
LSV Asset Management ("LSV") serves as the investment adviser to the LSV Value
Equity Fund, the LSV Conservative Core Equity Fund and the LSV Conservative
Value Equity Fund. LSV serves as the investment sub-adviser to the Cornerstone
Advisors Global Public Equity Fund. The address of LSV is 155 North Wacker
Drive, Suite 4600, Chicago, Illinois 60606. LSV is an investment adviser
registered under the Investment Advisers Act of 1940.
During the last two fiscal years, no director, officer or partner of LSV has
engaged in any other business, profession, vocation or employment of a
substantial nature in the capacity of director, officer, employee, partner or
trustee.
MARSICO CAPITAL MANAGEMENT, LLC
Marsico Capital Management, LLC ("Marsico") serves as an investment sub-adviser
for the Cornerstone Advisors Global Public Equity Fund. The principal address
of Marsico is 1200 17th Street, Suite 1600,
34
|
Denver, CO 80202. Marsico is an investment adviser registered under the
Investment Advisers Act of 1940.
During the last two fiscal years, no director, officer or partner of Marsico
has engaged in any other business, profession, vocation or employment of a
substantial nature in the capacity of director, officer, employee, partner or
trustee.
OFI STEELPATH, INC.
OFI SteelPath, Inc. ("OFI SteelPath") serves as an investment sub-adviser for
the Cornerstone Advisors Income Opportunities Fund. The principal address of
OFI SteelPath is 2100 McKinney Ave., Suite 1401, Dallas, Texas 75201. OFI
SteelPath is an investment adviser registered under the Investment Advisers Act
of 1940.
--------------------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
--------------------------------------------------------------------------------------------------------
Gabriel Hammond GKD Index Partners, LLC Majority Partner
CEO, Portfolio Manager 1717 McKinney Avenue
Suite 1450
Dallas, TX 75202
---------------------------------------------------------------------------------
PostRock Energy Corp. Past Board Member (2011)
210 Park Ave.
Suite 2750
Oklahoma City, OK 73102
--------------------------------------------------------------------------------------------------------
James McCain Ranger Funds Investment Trust Independent Trustee
CCO 300 Crescent Court, Ste. 1100
Dallas, TX 75201
--------------------------------------------------------------------------------------------------------
PARAMETRIC PORTFOLIO ASSOCIATES LLC
Parametric Portfolio Associates LLC ("Parametric") serves as an investment
sub-adviser for the Cornerstone Advisors Global Public Equity Fund. The
principal address of Parametric is 1918 Eighth Avenue, Suite 3100, Seattle,
Washington 98101. Parametric is an investment adviser registered under the
Investment Advisers Act of 1940.
During the last two fiscal years, no director, officer or partner of Parametric
has engaged in any other business, profession, vocation or employment of a
substantial nature in the capacity of director, officer, employee, partner or
trustee.
PENNANT MANAGEMENT, INC.
Pennant Management, Inc. ("Pennant") serves as the investment adviser to the
USFS Funds Limited Duration Government Fund and USFS Funds Tactical Asset
Allocation Fund. The address of Pennant is 11270 West Park Place, Suite 1025,
Milwaukee, Wisconsin 53224. Pennant is an investment adviser registered under
the Investment Advisers Act of 1940. The information listed below is for the
fiscal years ended December 31, 2010 and 2011.
--------------------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
INVESTMENT ADVISER
--------------------------------------------------------------------------------------------------------
Mark A. Elste U.S. FIDUCIARY SERVICES SENIOR EXECUTIVE VICE PRESIDENT, COO
--------------------------------------------------------------------------------------------------------
35
|
--------------------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
INVESTMENT ADVISER
--------------------------------------------------------------------------------------------------------
CIO GreatBanc Trust Company Director
-----------------------------------------------------------------------------
Salem Trust Company Director
-----------------------------------------------------------------------------
USF Affiliate Services, Inc. Director
-----------------------------------------------------------------------------
Waretech, Inc. Director
-----------------------------------------------------------------------------
CIB Marine Bancshares, Inc. Director
(CIBM)
--------------------------------------------------------------------------------------------------------
Scott M. Conger, Chief Stone Pillar Advisors, Ltd Director, Treasury Analysis
Compliance Officer, Senior -----------------------------------------------------------------------------
Vice President AMCORE Bank, N.A. Vice President & Assistant Treasurer
--------------------------------------------------------------------------------------------------------
Michael Welgat U.S. Fiduciary Services CEO, President, Director
Director GreatBanc Trust Company Director
Salem Trust Company Director
USF Affiliate Services, Inc. Director
Waretech, Inc. Director
--------------------------------------------------------------------------------------------------------
Todd C. Johnson U.S. Fiduciary Services Director
Director Todd C. Johnson CPA
Affinity, Inc. Director
DigiTenna, Inc. Director
Jaws, Inc. Director & Officer
PB Properties, LLC Managing Partner
ALJ Family Partnership General Partner
Carl & Irma Swenson Director & Officer
Foundation Director & Officer
RAJ Ministries Director / Officer
New Beginnings Are
Possible
--------------------------------------------------------------------------------------------------------
PHOCAS FINANCIAL CORPORATION
Phocas Financial Corporation ("Phocas") serves as an investment sub-adviser for
the Cornerstone Advisors Global Public Equity Fund. The principal address of
Phocas is 980 Atlantic Avenue, Suite 106, Alameda, CA 94501. Phocas is an
investment adviser registered under the Investment Advisers Act of 1940.
During the last two fiscal years, no director, officer or partner of Phocas has
engaged in any other business, profession, vocation or employment of a
substantial nature in the capacity of director, officer, employee, partner or
trustee.
PNC CAPITAL ADVISORS, LLC
PNC Capital Advisors, LLC ("PNC Capital") serves as investment adviser to the
United Association S&P 500 Index Fund. PNC Capital was formed as a result of
the merger of Allegiant Asset Management Company, the former investment adviser
to the United Association S&P 500 Index Fund, with its affiliate, PNC Capital
Advisors, Inc. PNC Capital is a Delaware limited liability company and an
indirect wholly owned subsidiary of The PNC Financial Services Group, Inc.
("PNC"), a publicly held bank holding company, and is registered as an
investment adviser under the Investment Advisers Act of 1940.
Effective January 1, 2009, Allegiant Asset Management Company became an
indirect wholly owned subsidiary of PNC. Prior to such date, Allegiant Asset
Management Company was an indirect wholly
36
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owned subsidiary of National City Corporation. PNC Capital also provides
investment advisory to other institutions and individuals and provides
investment advisory and administrative services to other investment companies.
The information listed below is for the fiscal years ended October 31, 2011 and
2012.
--------------------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
--------------------------------------------------------------------------------------------------------
Kevin A. McCreadie PNC Bank Executive Vice President
Director, President and Chief 22 Delaware Avenue
Executive Officer Wilmington DE 19801
--------------------------------------------------------------------------
PNC Funds, PNC Advantage Funds President
and PNC IG Fund GP, LLC
One East Pratt Street -- 5th Floor
Baltimore, MD 21202
--------------------------------------------------------------------------------------------------------
Robert Q. Reilly PNC Bank Executive Vice President
Director 22 Delaware Avenue
Wilmington DE 19801
--------------------------------------------------------------------------------------------------------
Bryan K. Garlock PNC Bank Executive Vice President &
Director 22 Delaware Avenue Chief Operating Officer
Wilmington DE 19801
--------------------------------------------------------------------------------------------------------
Jennifer A. Laclair PNC Bank Chief Financial Officer, Asset
Director 22 Delaware Avenue Management Group division
Wilmington DE 19801
--------------------------------------------------------------------------------------------------------
RICE HALL JAMES & ASSOCIATES, LLC
Rice Hall James & Associates, LLC ("Rice Hall James") serves as the investment
adviser to the Rice Hall James Micro Cap Portfolio, Rice Hall James Mid Cap
Portfolio and Rice Hall James Small Cap Portfolio. The principal address of
Rice Hall James is 600 West Broadway, Suite 1000, San Diego, California
92101-3383. Rice Hall James is an investment adviser registered under the
Investment Advisers Act of 1940.
For the fiscal years ended October 31, 2011 and 2012, none of the directors,
officers or partners of Rice Hall James is or has been engaged in any other
business, profession, vocation or employment of a substantial nature for his or
her own account or in the capacity of director, officer, employee, partner or
trustee.
SANDS CAPITAL MANAGEMENT, LLC
Sands Capital Management, LLC ("Sands Capital") serves as the investment
adviser to the Sands Capital Global Growth Fund. The principal address of Sands
Capital is 1101 Wilson Boulevard, Suite 2300, Arlington, VA 22209. Sands
Capital is an investment adviser registered under the Investment Advisers Act
of 1940.
For the fiscal years ended October 31, 2011 and 2012, none of the directors,
officers or partners of Sands Capital is or has been engaged in any other
business, profession, vocation or employment of a substantial nature for his or
her own account or in the capacity of director, officer, employee, partner or
trustee.
SKY HARBOR CAPITAL MANAGEMENT, LLC
SKY Harbor Capital Management LLC ("SKY Harbor") serves as investment
sub-adviser for the Registrant's Westwood Short Duration High Yield Fund. The
principal address of SKY Harbor is 20
37
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Horseneck Lane, Greenwich, CT 06830. SKY Harbor is an investment adviser
registered with the SEC under the Investment Advisers Act of 1940.
SKY Harbor's Board consists of three management directors who are the
co-founders of the firm and three outside directors. For the fiscal years ended
October 31, 2011 and 2012, none of the management directors, officers or
employees of SKY Harbor is or has been engaged in any other business,
profession, vocation or employment of a substantial nature for his or her own
account or in the capacity of director, officer, employee, partner or trustee.
The outside directors of SKY Harbor are engaged in other activities as set
forth in the chart below.
--------------------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
--------------------------------------------------------------------------------------------------------
Meryl D. Hartzband Stone Point Capital, LLC Chief Investment Officer
Director 20 Horseneck Lane
Greenwich, CT 06830 USA
--------------------------------------------------------------------------------------------------------
David J. Wermuth Stone Point Capital, LLC Senior Principal and General
Director 20 Horseneck Lane Counsel
Greenwich, CT 06830 USA
--------------------------------------------------------------------------------------------------------
Fayez S. Muhtadie Stone Point Capital, LLC Principal
Director 20 Horseneck Lane
Greenwich, CT 06830 USA
--------------------------------------------------------------------------------------------------------
THOMSON HORSTMANN & BRYANT, INC.
Thomson Horstmann & Bryant, Inc. ("THB") serves as the investment adviser for
the Thomson Horstmann & Bryant MicroCap Fund. The principal address of THB is
501 Merritt 7, Norwalk, CT 06851. THB is an investment adviser registered under
the Investment Advisers Act of 1940.
During the last two fiscal years, no director, officer or partner of Thomson
Horstmann & Bryant, Inc. has engaged in any other business, profession,
vocation or employment of a substantial nature in the capacity of director,
officer, employee, partner or trustee.
TCW INVESTMENT MANAGEMENT COMPANY
TCW Investment Management Company ("TIMCO") serves as an investment sub-adviser
for the Cornerstone Advisors Global Public Equity Fund. The principal address
of TIMCO is 865 South Figueroa Street, Suite 1800, Los Angeles, CA 90017. TIMCO
is an investment adviser registered under the Investment Advisers Act of 1940.
During the last two fiscal years, no director, officer or partner of TIMCO has
engaged in any other business, profession, vocation or employment of a
substantial nature in the capacity of director, officer, employee, partner or
trustee.
THOMPSON, SIEGEL & WALMSLEY LLC
Thompson, Siegel & Walmsley LLC ("TS&W") serves as the investment adviser to
the TS&W Equity Portfolio and the TS&W Fixed Income Portfolio. The principal
address of TS&W is 6806 Paragon Place, Suite 300, P.O. Box 6883, Richmond,
Virginia 23230. TS&W is an investment adviser registered under the Investment
Advisers Act of 1940.
38
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During the last two fiscal years, no director, officer or partner of TS&W has
engaged in any other business, profession, vocation or employment of a
substantial nature in the capacity of director, officer, employee, partner or
trustee.
THORNBURG INVESTMENT MANAGEMENT INC
Thornburg Investment Management Inc ("Thornburg") serves as an investment
sub-adviser to the Cornerstone Advisors Global Public Equity Fund. The
principal address of Thornburg is 2300 North Ridgetop Road, Santa Fe, New
Mexico, 87506. Thornburg is an investment adviser registered under the
Investment Advisers Act of 1940.
--------------------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
--------------------------------------------------------------------------------------------------------
Garrett Thornburg, Thornburg Securities Corporation, Chairman
Chairman 2300 North Ridgetop Road, Santa Fe
NM 87506
---------------------------------------------------------------------------------
Thornburg Investment Trust, 2300 Chairman
North Ridgetop Road, Santa Fe NM
87506
---------------------------------------------------------------------------------
WEL, Inc., 2300 North Ridgetop Chairman, controlling interest
Road, Santa Fe NM 87506
---------------------------------------------------------------------------------
Chamisa Energy, 2300 North Wel, Inc. is the managing
Ridgetop Road, Santa Fe NM 87506 member and has a controlling
interest
--------------------------------------------------------------------------------------------------------
TURNER INVESTMENTS, L.P.
Turner Investments, L.P. ("Turner") serves as an investment sub-adviser for the
Cornerstone Advisors Global Public Equity and Cornerstone Advisors Public
Alternatives Funds. The principal address of Turner is 1205 Westlakes Drive,
Suite 100, Berwyn, Pennsylvania 19312-2414. Turner is an investment adviser
registered under the Investment Advisers Act of 1940.
--------------------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
--------------------------------------------------------------------------------------------------------
Thomas R. Trala Turner Funds President and Trustee
Chief Operating and Financial P.O. Box 219805
Officer, Executive Managing Kansas City, MO 64121-9805
Director --------------------------------------------------------------------------
Turner International Ltd. Trustee
12 Plumtree Court
London, EC4A 4HT
--------------------------------------------------------------------------
Turner Investment Partners Chief Executive Officer and
(Australia) Pty. Ltd. Chief Financial Officer
c/o Compliance & Risk Services
Pty. Ltd.
Level 9, 63 Exhibition Street
Melbourne, Victoria 3000
Australia
--------------------------------------------------------------------------------------------------------
Thomas R. Trala Widener School of Business Advisory Board
Chief Operating and Financial Administration
Officer, Executive Managing 1 University Place
Director Chester, PA 19013
--------------------------------------------------------------------------------------------------------
39
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--------------------------------------------------------------------------------------------------------
Mark D. Turner Turner International Ltd. Trustee
President, Senior 12 Plumtree Court
Portfolio Manager London, EC4A 4HT
------------------------------------------------------------------------
The Haverford School Trustee
450 Lancaster Avenue,
Haverford, PA 19041
------------------------------------------------------------------------
CityTeam International (Chester) Board of Director
11 West 7(th) Street,
Chester, PA 19013
------------------------------------------------------------------------
The Philadelphia Ronald Board of Director
McDonald House
3925 Chestnut Street,
Philadelphia, PA 19104-3110
--------------------------------------------------------------------------------------------------------
Robert E. Turner Bradley University Board of Directors
Chairman, Chief Investment 1501 W. Bradley Ave
Officer Peoria, IL 61625
------------------------------------------------------------------------
Delaware Valley Friends School Board Member
19 E. Central Avenue,
Paoli, PA 19301
------------------------------------------------------------------------
University of Notre Dame School Advisory Council
of Architecture
110 Bond Hall,
Notre Dame, IN 46556
------------------------------------------------------------------------
Drexel University President's Leadership Council
3141 Chestnut Street
Philadelphia, PA 19104
--------------------------------------------------------------------------------------------------------
Christopher K. McHugh Philadelphia University Trustee
Vice Chairman, Senior Portfolio 4201 Henry Avenue,
Manager Philadelphia, PA 19144-5497
--------------------------------------------------------------------------------------------------------
WESTWOOD MANAGEMENT CORP.
Westwood Management Corp. ("Westwood") serves as the investment adviser for the
Westwood Income Opportunity Fund, Westwood SMidCap Fund, Westwood SMidCap Plus
Fund, Westwood LargeCap Value Fund, Westwood SmallCap Value Fund, Westwood
Dividend Growth Fund, Westwood Short Duration High Yield Fund, Westwood Global
Equity Fund, Westwood Global Dividend Fund, Westwood Emerging Markets Fund and
Westwood Emerging Markets Plus Fund. The principal address of Westwood is 200
Crescent Court, Suite 1200, Dallas, Texas 75201. Westwood is an investment
adviser registered under the Investment Advisers Act of 1940. The information
listed below is for the fiscal year ended 2012.
--------------------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
--------------------------------------------------------------------------------------------------------
Brian Casey Westwood Holdings Group, Inc.* President and Chief Executive
President and Chief (NYSE: WHG) Officer and Director
Executive Officer and 200 Crescent Court, Suite 1200
Director Dallas, TX 75201
---------------------------------------------------------------------------------
Westwood Trust** President and Director
200 Crescent Court, Suite 1200
Dallas, TX 75201
--------------------------------------------------------------------------------------------------------
40
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--------------------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
--------------------------------------------------------------------------------------------------------
Westwood International Advisors Inc. (A) Chief Executive Officer
161 Bay Street, Suite 3950
Toronto, Ontario M5J 2S1
--------------------------------------------------------------------------------------------------------
Mark R. Freeman, CFA Westwood Holdings Group, Inc.* Chief Investment Officer
Executive Vice President (NYSE: WHG)
and Chief Investment 200 Crescent Court, Suite 1200
Officer Dallas, TX 75201
--------------------------------------------------------------------------------------------------------
Mark Wallace Westwood Holdings Group, Inc.* Chief Financial Officer
Chief Financial Officer (NYSE: WHG)
200 Crescent Court, Suite 1200
Dallas, TX 75201
-------------------------------------------------------------------------------
Westwood Advisors, LLC*** Chief Financial Officer
One Pacific Place
1125 South 103(rd) Street, Ste. 580
Omaha, NE 68124
--------------------------------------------------------------------------------------------------------
Sylvia L. Fry Westwood Holdings Group, Inc.* Chief Compliance Officer
Chief Compliance Officer (NYSE: WHG)
200 Crescent Court, Suite 1200
Dallas, TX 75201
-------------------------------------------------------------------------------
Westwood Trust** Chief Compliance Officer
200 Crescent Court, Suite 1200
Dallas, TX 75201
-------------------------------------------------------------------------------
Westwood Advisors, LLC*** Chief Compliance Officer
One Pacific Place
1125 South 103(rd) Street, Ste. 580
Omaha, NE 68124
--------------------------------------------------------------------------------------------------------
* Westwood Management Corp., Westwood Trust, Westwood Advisors, LLC, and
Westwood International Advisors Inc. are wholly owned subsidiaries of
Westwood Holdings Group, Inc., a publicly traded company on the NYSE (NYSE:
WHG).
** Westwood Trust provides trust and custodial services and participation in
common trust funds that it sponsors to institutions and high net worth
individuals.
*** Westwood Advisors, LLC (formerly McCarthy Group Advisors, LLC) is an SEC
registered investment adviser located in Omaha, NE that manages investment
Limited Liability Companies and an investment Limited Partnership.
(A Westwood International Advisors Inc. is a Canadian Corporation located in
Toronto, Ontario that is registered with the Ontario Securities Commission
as a Portfolio Manager and Exempt Market Dealer.
The information listed below is for the fiscal year ended October 31, 2011.
--------------------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
--------------------------------------------------------------------------------------------------------
Susan Byrne Westwood Holdings Group, Inc.* Co-Chief Investment Officer
Chief Investment Officer and (NYSE: WHG) and Chairman of the Board
Chairman of the Board 200 Crescent Court, Suite 1200
Dallas, TX 75201
--------------------------------------------------------------------------------------------------------
41
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--------------------------------------------------------------------------------------------------------
NAME AND POSITION WITH NAME AND PRINCIPAL BUSINESS CONNECTION WITH OTHER
INVESTMENT ADVISER ADDRESS OF OTHER COMPANY COMPANY
--------------------------------------------------------------------------------------------------------
Brian Casey Westwood Holdings Group, Inc.* President and Chief Executive
President and Chief Executive (NYSE: WHG) Officer and Director
Officer and Director 200 Crescent Court, Suite 1200
Dallas, TX 75201
--------------------------------------------------------------------------
Westwood Trust** President and Director
200 Crescent Court, Suite 1200
Dallas, TX 75201
--------------------------------------------------------------------------
Westwood International Advisors Inc. (A) Chief Executive Officer
161 Bay Street, Suite 3950
Toronto, Ontario M5J 2S1
--------------------------------------------------------------------------------------------------------
Mark R. Freeman, CFA Westwood Holdings Group, Inc.* Co-Chief Investment Officer
Co-Chief Investment Officer (NYSE: WHG)
200 Crescent Court, Suite 1200
Dallas, TX 75201
--------------------------------------------------------------------------------------------------------
William R. Hardcastle Westwood Holdings Group, Inc.* Chief Financial Officer
Chief Financial Officer (NYSE: WHG)
200 Crescent Court, Suite 1200
Dallas, TX 75201
--------------------------------------------------------------------------
Westwood Advisors, LLC*** Chief Financial Officer
One Pacific Place
1125 South 103(rd) Street, Ste. 580
Omaha, NE 68124
--------------------------------------------------------------------------------------------------------
Sylvia L. Fry Westwood Holdings Group, Inc.* Chief Compliance Officer
Chief Compliance Officer (NYSE: WHG)
200 Crescent Court, Suite 1200
Dallas, TX 75201
--------------------------------------------------------------------------
Westwood Trust** Chief Compliance Officer
200 Crescent Court, Suite 1200
Dallas, TX 75201
--------------------------------------------------------------------------
Westwood Advisors, LLC*** Chief Compliance Officer
One Pacific Place
1125 South 103(rd) Street, Ste. 580
Omaha, NE 68124
--------------------------------------------------------------------------------------------------------
|
* Westwood Management Corp., Westwood Trust, Westwood Advisors, LLC, and
Westwood International Advisors LLC are wholly owned subsidiaries of
Westwood Holdings Group, Inc., a publicly traded company on the NYSE (NYSE:
WHG).
** Westwood Trust provides trust and custodial services and participation in
common trust funds that it sponsors to institutions and high net worth
individuals.
*** Westwood Advisors, LLC (formerly McCarthy Group Advisors, LLC) is an SEC
registered investment adviser located in Omaha, NE that manages investment
Limited Liability Companies and an investment Limited Partnership.
(A) Westwood International Advisors Inc. is a Canadian Corporation located in
Toronto, Ontario that is registered with the Ontario Securities Commission
as a Portfolio Manager and Exempt Market Dealer.
42
ITEM 32.
PRINCIPAL UNDERWRITERS
(a) Furnish the name of each investment company (other than the Registrant)
for which each principal underwriter currently distributing the securities
of the Registrant also acts as a principal underwriter, distributor or
investment adviser.
Registrant's distributor, SEI Investments Distribution Co. (the
"Distributor"), acts as distributor for:
SEI Daily Income Trust July 15, 1982
SEI Liquid Asset Trust November 29, 1982
SEI Tax Exempt Trust December 3, 1982
SEI Institutional Managed Trust January 22, 1987
SEI Institutional International Trust August 30, 1988
The Advisors' Inner Circle Fund II January 28, 1993
Bishop Street Funds January 27, 1995
SEI Asset Allocation Trust April 1, 1996
SEI Institutional Investments Trust June 14, 1996
CNI Charter Funds April 1, 1999
Causeway Capital Management Trust September 20, 2001
ProShares Trust November 14, 2005
Community Reinvestment Act Qualified Investment Fund January 8, 2007
SEI Alpha Strategy Portfolios, LP June 29, 2007
TD Asset Management USA Funds July 25, 2007
SEI Structured Credit Fund, LP July 31, 2007
Wilshire Mutual Funds, Inc. July 12, 2008
Wilshire Variable Insurance Trust July 12, 2008
Global X Funds October 24, 2008
ProShares Trust II November 17, 2008
Exchange Traded Concepts Trust (f/k/a FaithShares Trust) August 7, 2009
Schwab Strategic Trust October 12, 2009
RiverPark Funds September 8, 2010
Adviser Managed Trust Fund December 10, 2010
Huntington Strategy Shares July 26, 2011
New Covenant Funds March 30, 2012
Cambria ETF Trust August 30, 2012
Pyxis Funds I September 25, 2012
KKR Series Trust October 3, 2012
KKR Alternative Corporate Opportunities Fund October 3, 2012
KKR Alternative Corporate Opportunities Fund P October 3, 2012
KraneShares Trust December 18, 2012
|
The Distributor provides numerous financial services to investment
managers, pension plan sponsors, and bank trust departments. These services
include portfolio evaluation, performance measurement and consulting
services ("Funds Evaluation") and automated execution, clearing and
settlement of securities transactions ("MarketLink").
43
(b) Furnish the Information required by the following table with respect to
each director, officer or partner of each principal underwriter named in
the answer to Item 25 of Part B. Unless otherwise noted, the business
address of each director or officer is Oaks, PA 19456.
POSITION AND OFFICE POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
---- ------------------- ---------------------
William M. Doran Director --
Edward D. Loughlin Director --
Wayne M. Withrow Director --
Kevin P. Barr President & Chief Executive Officer --
Maxine J. Chou Chief Financial Officer, Chief Operations
Officer, & Treasurer --
Karen E. LaTourette Chief Compliance Officer, Anti-Money
Laundering Officer & Assistant Secretary --
John C. Munch General Counsel & Secretary --
Mark J. Held Senior Vice President --
Lori L. White Vice President & Assistant Secretary --
John P. Coary Vice President & Assistant Secretary --
John J. Cronin Vice President --
Robert M. Silvestri Vice President --
|
ITEM 33. LOCATION OF ACCOUNTS AND RECORDS:
Books or other documents required to be maintained by Section 31(a) of the
Investment Company Act of 1940, and the rules promulgated thereunder, are
maintained as follows:
(a) With respect to Rules 31a-1(a); 31a-1(b)(1); (2)(a) and (b); (3); (6);
(8); (12); and 31a-1 (d), the required books and records are maintained at
the offices of Registrant's custodians:
U.S. Bank, National Association Union Bank of California, N.A.
800 Nicollett Mall 475 Sansome Street
Minneapolis, Minnesota 55402-4302 15(th) Floor
San Francisco, California 94111
National City Bank The Northern Trust Company
National City Center 50 LaSalle Street
1900 East Ninth Street Chicago, Illinois 60675
Cleveland, Ohio 44114
|
(b)/(c) With respect to Rules 31a-1(a); 31a-1 (b)(1),(4); (2)(C) and (D); (4);
(5); (6); (8); (9); (10); (11); and 31a-1(f), the required books and
records are maintained at the offices of Registrant's administrator:
SEI Investments Global Funds Services
One Freedom Valley Drive
Oaks, Pennsylvania 19456
44
(c) With respect to Rules 31a-1 (b)(5), (6), (9) and (10) and 31a-1 (f), the
required books and records are maintained at the offices of the
Registrant's investment advisers:
Acadian Asset Management LLC
260 Franklin Street
Boston, Massachusetts 02110
AIG Asset Management (U.S.), LLC
70 Pine Street, 20th Floor
New York, New York 10270
Allianz Global Investors U.S. LLC
1633 Broadway
New York, NY 10019
AlphaOne Investment Services, LLC
One Tower Bridge
100 Front Street, Suite 1250
West Conshohocken, PA 19428
AlphaSimplex Group, LLC
One Cambridge Center
Cambridge, Massachusetts 02142
AQR Capital Management, LLC
Two Greenwich Plaza, 3rd Floor
Greenwich, Connecticut 06830
BlackRock Financial Management, LLC
55 East 52(nd) Street
New York, NY 10055
Cambiar Investors LLC
2401 East Second Street, Suite 400
Denver, Colorado 80206
CBRE Clarion Securities LLC
201 King of Prussia Road, Suite 600
Radnor, PA 19087
Citigroup First Investment Management Americas LLC
388 Greenwich Street New
York, New York 10013
ClariVest Asset Management LLC
11452 El Camino Real, Suite 250
San Diego, CA 92130
Cornerstone Advisors, Inc.
225 108th Avenue NE, Suite 400
Bellevue, Washington 98004-5782
45
Cramer Rosenthal McGlynn LLC
520 Madison Avenue, 20th Floor
New York, New York 10022
C.S. McKee, LLP
One Gateway Center
Pittsburgh, Pennsylvania 15222
Driehaus Capital Management LLC
25 East Erie Street
Chicago, Illinois 60611-2703
Edgewood Management LLC
305 Park Avenue, 18th Floor
New York, New York 10022-6057
Fairpointe Capital LLC
One North Franklin Street, Suite 3300
Chicago, Illinois 60606-2401
Fayez Sarofim & Co.
2907 Two Houston Center, 909 Fannin Street
Houston, Texas 77010
First Manhattan Co.
437 Madison Avenue
New York, New York 10022-7022
Hamlin Capital Management, LLC
477 Madison Avenue, Suite 520
New York, NY 10022
Harris Associates L.P.
Two North LaSalle Street, Suite 500
Chicago, Illinois 60602-3790
Harvest Global Investments Limited
31/F One Exchange Square
8 Connaught Place, Central
Hong Kong
Haverford Investment Management, Inc.
Three Radnor Corporate Center, Suite 450
Radnor, Pennsylvania 19087-4546
HGK Asset Management, Inc.
Newport Tower
525 Washington Blvd.
Jersey City, New Jersey 07310
Investment Counselors of Maryland, LLC
803 Cathedral Street
Baltimore, Maryland 21201
46
Kayne Anderson Capital Advisors, L.P.
1800 Avenue of the Stars, Third Floor
Los Angeles, California 90067
Loomis, Sayles & Company, L.P.
One Financial Center
Boston, Massachusetts 02111-2621
LSV Asset Management
155 North Wacker Drive, Suite 4600,
Chicago, Illinois 60606
Marsico Capital Management, LLC
1200 17th Street, Suite 1600
Denver, Colorado 80202-5824
OFI SteelPath, Inc.
2100 McKinney Ave., Suite 1401
Dallas, Texas 75201
Parametric Portfolio Associates LLC
1918 Eighth Avenue, Suite 3100
Seattle, Washington 98109
Pennant Management, Inc.
11270 West Park Place, Suite 1025
Milwaukee, Wisconsin 53224
Phocas Financial Corporation
980 Atlantic Avenue, Suite 106
Alameda, California 94501-1001
PNC Capital Advisors, LLC
One East Pratt Street, 5th Floor
Baltimore, MD 21202
Rice Hall James & Associates, LLC
600 West Broadway, Suite 1000
San Diego, California 92101-3383
Sands Capital Management, LLC
1101 Wilson Boulevard, Suite 2300
Arlington, VA 22209
SKY Harbor Capital Management, LLC
20 Horseneck Lane
Greenwich, CT 06830
TCW Investment Management Company
865 South Figueroa Street, Suite 1800
Los Angeles, CA 90017
47
Thomson Horstmann & Bryant, Inc.
501 Merritt 7
Norwalk, CT 06851
Thompson, Siegel & Walmsley LLC
6806 Paragon Place, Suite 300
Richmond, Virginia 23230
Thornburg Investment Management Inc
2300 North Ridgetop Road
Santa Fe, New Mexico 87506
Turner Investments, L.P.
1205 Westlakes Drive, Suite 100
Berwyn, Pennsylvania 19312-2414
Westwood Management Corp.
200 Crescent Court, Suite 1200
Dallas, Texas 75201
ITEM 34. MANAGEMENT SERVICES: None.
ITEM 35. UNDERTAKINGS: None.
48
NOTICE
A copy of the Agreement and Declaration of Trust for The Advisors' Inner Circle
Fund (the "Trust") is on file with the Secretary of State of the Commonwealth
of Massachusetts and notice is hereby given that this registration statement
has been executed on behalf of the Trust by an officer of the Trust as an
officer and by its trustees as trustees and not individually and the
obligations of or arising out of this registration statement are not binding
upon any of the trustees, officers, or shareholders individually but are
binding only upon the assets and property of the Trust.
49