0001144204-18-062684.txt : 20181203 0001144204-18-062684.hdr.sgml : 20181203 20181130174244 ACCESSION NUMBER: 0001144204-18-062684 CONFORMED SUBMISSION TYPE: 497 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20181203 DATE AS OF CHANGE: 20181130 EFFECTIVENESS DATE: 20181203 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GMO TRUST CENTRAL INDEX KEY: 0000772129 IRS NUMBER: 000000000 STATE OF INCORPORATION: MA FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 497 SEC ACT: 1933 Act SEC FILE NUMBER: 002-98772 FILM NUMBER: 181212222 BUSINESS ADDRESS: STREET 1: 40 ROWES WHARF CITY: BOSTON STATE: MA ZIP: 02110 BUSINESS PHONE: 6173467646 MAIL ADDRESS: STREET 1: 40 ROWES WHARF CITY: BOSTON STATE: MA ZIP: 02110 FORMER COMPANY: FORMER CONFORMED NAME: GMO CORE TRUST DATE OF NAME CHANGE: 19900927 0000772129 S000004081 GMO U.S. Equity Fund C000011423 Class III GMUEX C000011424 Class IV GMRTX C000011425 Class V GMEQX C000011426 Class VI GMCQX 0000772129 S000004084 GMO Quality Fund C000011436 Class II C000011437 Class III GQETX C000011438 Class IV GQEFX C000011439 Class V GQLFX C000011440 Class VI GQLOX 0000772129 S000004157 GMO International Large/Mid Cap Equity Fund C000011701 Class III GMIEX C000011702 Class IV GMIRX C000011703 Class V C000011704 Class VI GCEFX 0000772129 S000004224 GMO International Equity Fund C000011879 Class I C000011880 Class II GMICX C000011881 Class III GMOIX C000011882 Class IV GMCFX C000011883 Class V C000011884 Class VI 0000772129 S000004230 GMO Foreign Small Companies Fund C000011910 Class III GMFSX C000011911 Class IV GFSFX 0000772129 S000004911 GMO Emerging Markets Fund C000013267 Class I C000013268 Class II GMEMX C000013269 Class III GMOEX C000013270 Class IV GMEFX C000013271 Class V GEMVX C000013272 Class VI GEMMX 0000772129 S000004913 GMO Tax-Managed International Equities Fund C000013280 Class I C000013281 Class II C000013282 Class III GTMIX C000013283 Class IV 0000772129 S000004917 GMO Core Plus Bond Fund C000013292 Class I C000013293 Class II C000013294 Class III GUGAX C000013295 Class IV GPBFX C000013296 Class V C000013297 Class VI C000013298 Class VII C000013299 Class VIII 0000772129 S000004922 GMO Emerging Country Debt Fund C000013325 Class I C000013326 Class II C000013327 Class III GMCDX C000013328 Class IV GMDFX C000013329 Class V C000013330 Class VI 0000772129 S000004926 GMO Alpha Only Fund C000013336 Class I C000013337 Class II C000013338 Class III GGHEX C000013339 Class IV GAPOX C000013340 Class V C000013341 Class VI 0000772129 S000005485 GMO Benchmark-Free Allocation Fund C000014925 Class I C000014926 Class II C000014927 Class III GBMFX C000109350 Class IV GBMBX C000110912 Class MF C000128910 Class V C000128911 Class VI 0000772129 S000005486 GMO International Equity Allocation Fund C000014928 Class I C000014929 Class II C000014930 Class III GIEAX 0000772129 S000005487 GMO Global Asset Allocation Fund C000014931 Class I C000014932 Class II C000014933 Class III GMWAX 0000772129 S000005488 GMO Global Equity Allocation Fund C000014934 Class I C000014935 Class II C000014936 Class III GMGEX 0000772129 S000005489 GMO Strategic Opportunities Allocation Fund C000014937 Class III GBATX 0000772129 S000005490 GMO Global Developed Equity Allocation Fund C000014938 Class III GWOAX 0000772129 S000005494 GMO SGM Major Markets Fund C000014953 Class III GSMFX C000014954 Class IV GSMJX C000014955 Class V C000014956 Class VI GSMHX 0000772129 S000007516 GMO Opportunistic Income Fund C000020548 Class VI GMODX C000137450 Class III 0000772129 S000012211 GMO International Developed Equity Allocation Fund C000033342 Class III GIOTX 0000772129 S000025186 GMO U.S. Treasury Fund C000075084 GMO U.S. Treasury Fund GUSTX 0000772129 S000025199 GMO Asset Allocation Bond Fund C000075099 Class III GMOBX C000075103 Class VI GABFX 0000772129 S000029579 GMO Emerging Domestic Opportunities Fund C000090805 Class II GEDTX C000090806 Class III GEDSX C000090807 Class IV GEDIX C000090808 Class V GEDOX C000090809 Class VI GEDFX 0000772129 S000033464 GMO Benchmark-Free Fund C000102896 Class III GBFFX 0000772129 S000034948 GMO Resources Fund C000107485 Class III GOFIX C000107486 Class IV GOVIX C000107487 Class V C000107488 Class VI 0000772129 S000036091 GMO Implementation Fund C000110451 GMO Implementation Fund GIMFX 0000772129 S000038360 GMO Risk Premium Fund C000118360 Class III GMRPX C000118361 Class IV GMRVX C000118362 Class V C000118363 Class VI GMOKX 0000772129 S000046112 GMO Special Opportunities Fund C000144309 Class III C000144310 Class IV C000144311 Class V C000144312 Class VI GSOFX C000144313 Class VII 0000772129 S000056707 GMO Climate Change Fund C000179795 Class III GCCHX C000179796 Class IV C000179797 Class V C000179798 Class VI 0000772129 S000061716 GMO High Yield Fund C000199927 Class III C000199928 Class IV C000199929 Class V C000199930 Class VI GHVIX 0000772129 S000062268 GMO Strategic Short-Term Fund C000201817 Class IV C000201818 Class VI 497 1 tv508161_497.htm GMO TRUST

 

Filed pursuant to Rule 497(e)

File Nos. 002-98772 and 811-04347

 

GMO TRUST

 

Amended and Restated Supplement dated December 1, 2018 to the
GMO Trust Prospectus dated June 30, 2018

 

 

This supplement amends and restates the supplements dated September 25, 2018 and October 5, 2018 to the GMO Trust Prospectus dated June 30, 2018 (the “Prospectus”).

 

GMO Emerging Markets Fund

 

Effective January 1, 2019, the section appearing on page 60 of the Prospectus captioned “Investment objective” is replaced with the following:

 

Investment objective

Total return in excess of that of its benchmark, the MSCI Emerging Markets Index.

 

Effective December 1, 2018, the sections appearing on pages 60 and 61 of the Prospectus captioned “Shareholder fees”, “Example” and “Principal investment strategies” are replaced with the following:

 

Shareholder fees

(fees paid directly from your investment)

           
  Class II Class III Class IV Class V Class VI
Purchase premium (as a percentage of amount invested) 0.40% 0.40% 0.40% 0.40% 0.40%
Redemption fee (as a percentage of amount redeemed) 0.40% 0.40% 0.40% 0.40% 0.40%

 

Example

 

This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated. The example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same as those shown in the table. The one year amounts shown reflect the expense reimbursement and waiver noted in the expense table. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

 

 

If you sell your shares

 

If you do not sell your shares

 
 

1 Year

 

3 Years

 

5 Years

 

10 Years

 

1 Year

 

3 Years

 

5 Years

 

10 Years

 
Class II $179 $417 $674 $1,410 $138 $372 $626 $1,352
Class III $174 $397 $639 $1,332 $132 $352 $590 $1,273
Class IV $169 $382 $612 $1,274 $127 $337 $563 $1,215
Class V $164 $373 $598 $1,248 $122 $328 $550 $1,189
Class VI $161 $363 $582 $1,213 $119 $318 $534 $1,154

 

Principal investment strategies

 

The Fund typically invests directly and indirectly (e.g., through underlying funds or derivatives) in equities of companies tied economically to emerging markets. “Emerging markets” include all markets that are not treated as “developed markets” in the MSCI World Index or MSCI EAFE Index. The term “equities” refers to direct and indirect investments in common and preferred stocks and other stock-related securities, such as convertible securities, depositary receipts, and equity real estate investment trusts (REITs) and income trusts. Under normal circumstances, the Fund invests directly and indirectly at least 80% of its assets in investments tied economically to emerging markets (see “Name Policies”). In addition to investing in companies tied economically to emerging markets, the Fund may invest in companies that GMO believes are likely to benefit from growth in the emerging markets. GMO expects that the Fund will have a value bias relative to its benchmark.

 

 

 

 

 

GMO uses proprietary quantitative techniques and fundamental analysis to evaluate and select countries, sectors, and equity investments based on factors including, but not limited to, valuation, quality, patterns of price movement and volatility, and macroeconomic factors. In constructing the Fund’s portfolio, GMO considers a number of factors, including the trade-off among forecasted returns, risk relative to the benchmark, transaction costs, and liquidity. GMO also adjusts the Fund’s portfolio for factors such as position size, market capitalization, and exposure to particular industries, sectors, countries, regions, or currencies. At times, the Fund may have substantial exposure to a single asset class, industry, sector, country, region, or currency. The Fund may invest in securities of companies of any market capitalization. The factors GMO considers and investment methods GMO uses can change over time.

 

As an alternative to investing directly in equities, the Fund may invest in exchange-traded and over-the-counter (OTC) derivatives and exchange-traded funds (ETFs). The Fund also may invest in derivatives and ETFs in an attempt to obtain or adjust elements of its long or short investment exposure, and as a substitute for securities lending. Derivatives used may include options, futures, forward currency contracts, warrants, swap contracts, and reverse repurchase agreements. The Fund’s foreign currency exposure may differ from the currency exposure represented by its equity investments. In addition, the Fund may overweight and underweight its positions in particular currencies relative to its benchmark. In addition, the Fund may lend its portfolio securities.

 

The Fund also may invest in U.S. Treasury Fund, in money market funds unaffiliated with GMO, and directly in the types of investments typically held by money market funds.

 

Effective January 1, 2019, the table on page 63 of the Prospectus captioned “Average Annual Total Returns” is replaced with the following:

 

Average Annual Total Returns

Periods Ending December 31, 2017

 

  1 Year 5 Years 10 Years Incept.
Class IIa       11/29/96
Return Before Taxes 30.91% 2.37% -0.03% 8.23%
MSCI Emerging Markets Indexb (Fund benchmark) (reflects no deduction for fees, expenses, or taxes) 37.28% 4.35% 1.68% 6.79%
S&P/IFCI Composite Indexc (Prior Fund benchmark) (reflects no deduction for fees, expenses, or taxes) 37.89% 5.65% 2.50% 7.85%
Class III       12/9/93
Return Before Taxes 30.99% 2.43% 0.02% 7.85%
Return After Taxes on Distributions 30.39% 1.95% -0.83% 6.54%
Return After Taxes on Distributions and Sale of Fund Shares 18.38% 1.95% 0.29% 6.69%
MSCI Emerging Markets Indexb (Fund benchmark) (reflects no deduction for fees, expenses, or taxes) 37.28% 4.35% 1.68% 6.04%
S&P/IFCI Composite Indexc (Prior Fund benchmark) (reflects no deduction for fees, expenses, or taxes) 37.89% 5.65% 2.50% 6.74%
Class IV       1/9/98
Return Before Taxes 31.04% 2.46% 0.07% 9.40%
MSCI Emerging Markets Indexb (Fund benchmark) (reflects no deduction for fees, expenses, or taxes) 37.28% 4.35% 1.68% 8.48%
S&P/IFCI Composite Indexc (Prior Fund benchmark) (reflects no deduction for fees, expenses, or taxes) 37.89% 5.65% 2.50% 9.74%
Class Vd       8/4/03
Return Before Taxes 31.07% 2.51% 0.11% 10.81%
MSCI Emerging Markets Indexb (Fund benchmark) (reflects no deduction for fees, expenses, or taxes) 37.28% 4.35% 1.68% 11.24%
S&P/IFCI Composite Indexc (Prior Fund benchmark) (reflects no deduction for fees, expenses, or taxes) 37.89% 5.65% 2.50% 12.35%
Class VI       6/30/03
Return Before Taxes 31.17% 2.55% 0.14% 11.07%
MSCI Emerging Markets Indexb (Fund benchmark) (reflects no deduction for fees, expenses, or taxes) 37.28% 4.35% 1.68% 11.62%
S&P/IFCI Composite Indexc (Prior Fund benchmark) (reflects no deduction for fees, expenses, or taxes) 37.89% 5.65% 2.50% 12.66%

 For the period from January 9, 1998 to August 12, 2009, no Class II shares were outstanding. The returns shown in the table for that period are those of Class III shares, which have been adjusted downward to reflect Class II’s higher total annual fund operating expenses (Class II’s expenses during these periods were calculated by adjusting Class III’s actual total annual fund operating expenses during such periods upward by the current differential between “Total annual fund operating expenses” for Class II and Class III shares shown in the Fund’s “Annual Fund operating expenses” table).

b  Fund’s benchmark effective January 1, 2019.

c  Effective January 1, 2019, the Fund changed its benchmark from the S&P/IFCI Composite Index to the MSCI Emerging Markets Index because GMO believes the MSCI Emerging Markets Index is more appropriate in light of the Fund’s investment strategy.

d  For the period from October 26, 2004 to February 11, 2005, no Class V shares were outstanding. The returns shown in the table for that period are those of Class IV shares, which have higher expenses.

 

 -2- 

 

 

GMO Emerging Domestic Opportunities Fund

 

The sections appearing on page 65 of the Prospectus captioned “Shareholder Fees” and “Example” are replaced with the following:

 

Shareholder fees

(fees paid directly from your investment)

           
  Class II Class III Class IV Class V Class VI
Purchase premium (as a percentage of amount invested) 0.40% 0.40% 0.40% 0.40% 0.40%
Redemption fee (as a percentage of amount redeemed) 0.40% 0.40% 0.40% 0.40% 0.40%

 

Example

 

This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated. The example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same as those shown in the table. The one year amounts shown reflect the expense reimbursement and waiver noted in the expense table. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

 

 

If you sell your shares

 

If you do not sell your shares

 
 

1 Year

 

3 Years

 

5 Years

 

10 Years

 

1 Year

 

3 Years

 

5 Years

 

10 Years

 
Class II $200 $457 $733 $1,523 $159 $412 $685 $1,465
Class III $193 $435 $696 $1,444 $152 $390 $648 $1,385
Class IV $189 $423 $675 $1,398 $148 $378 $627 $1,340
Class V $187 $417 $664 $1,375 $146 $372 $616 $1,317
Class VI $184 $407 $648 $1,341 $143 $362 $600 $1,282

 

The table on page 68 of the Prospectus captioned “Average Annual Total Returns” is replaced with the following:

 

Average Annual Total Returns

Periods Ending December 31, 2017

 

  1 Year 5 Years 10 Years Incept.
Class II       3/24/11
Return Before Taxes 36.37% 5.97% N/A 6.73%
Return After Taxes on Distributions 36.05% 5.45% N/A 6.31%
Return After Taxes on Distributions and Sale of Fund Shares 21.01% 4.65% N/A 5.34%
MSCI Emerging Markets Index (returns reflect no deduction for fees or expenses, but are net of withholding tax on dividend reinvestments) 37.28% 4.35% N/A 2.82%
Class III       6/29/12
Return Before Taxes 36.44% 6.04% N/A 8.22%
MSCI Emerging Markets Index (returns reflect no deduction for fees or expenses, but are net of withholding tax on dividend reinvestments) 37.28% 4.35% N/A 6.41%
Class IV       5/2/12
Return Before Taxes 36.58% 6.10% N/A 7.16%
MSCI Emerging Markets Index (returns reflect no deduction for fees or expenses, but are net of withholding tax on dividend reinvestments) 37.28% 4.35% N/A 4.64%
Class V       11/29/13
Return Before Taxes 36.56% N/A N/A 6.48%
MSCI Emerging Markets Index (returns reflect no deduction for fees or expenses, but are net of withholding tax on dividend reinvestments) 37.28% N/A N/A 5.65%

 

 -3- 

 

 

 

GMO Risk Premium Fund

 

The sections appearing on page 90 of the Prospectus captioned “Annual Fund operating expenses” and “Example” are replaced with the following:

 

Annual Fund operating expenses

 

(expenses that you bear each year as a percentage of the value of your investment)

 

  Class III Class IV Class V Class VI
Management fee 0.25%1,2 0.25%1,2 0.25%1,2 0.25%1,2
Shareholder service fee 0.15%1 0.10%1 0.085%1 0.055%1
Other expenses 0.08% 0.08% 0.08% 0.08%
Total annual fund operating expenses 0.48% 0.43% 0.42% 0.39%
Expense reimbursement/waiver (0.08%)1 (0.08%)1 (0.08%)1 (0.08%)1
Total annual fund operating expenses after expense reimbursement/waiver 0.40% 0.35% 0.34% 0.31%

1  Grantham, Mayo, Van Otterloo & Co. LLC (“GMO”) has contractually agreed to reimburse the Fund for the following expenses: audit expenses, fund accounting expenses, pricing service expenses, expenses of non-investment related tax services, transfer agency expenses, expenses of non-investment related legal services provided to the Fund by or at the direction of GMO, federal securities law filing expenses, printing expenses, state and federal registration fees and custody expenses. GMO also has contractually agreed to waive or reduce the Fund’s management fees and shareholder service fees to the extent necessary to offset the management fees and shareholder service fees paid to GMO that are directly or indirectly borne by the Fund or a class of shares of the Fund as a result of the Fund’s direct or indirect investments in other series of GMO Trust (“GMO Funds”). Management fees and shareholder service fees will not be waived below zero. These reimbursements and waivers will continue through at least June 30, 2019, and may not be terminated prior to this date without the action or consent of the Trust’s Board of Trustees.

2  The amount has been restated to reflect current management fees.

 

Example

 

This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated, regardless of whether or not you redeem your shares at the end of such periods. The example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same as those shown in the table. The one year amounts shown reflect the expense reimbursement and waiver noted in the expense table. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

 

 

1 Year

 

3 Years

 

5 Years

 

10 Years

 
Class III $41 $146 $261 $596
Class IV $36 $130 $233 $534
Class V $35 $127 $227 $522
Class VI $32 $117 $211 $485

 

 -4- 

 

 

GMO Climate Change Fund

 

The sections appearing on page 22 of the Prospectus captioned “Annual Fund operating expenses” and “Example” are replaced with the following:

 

Annual Fund operating expenses

 

(expenses that you bear each year as a percentage of the value of your investment)

 

      Class III     Class IV     Class V     Class VI  
Management fee     0.60% 1   0.60% 1   0.60% 1   0.60% 1
Shareholder service fee     0.15% 1   0.10% 1   0.085% 1   0.055% 1
Other expenses     0.76%     0.76%     0.76%     0.76%  
Total annual fund operating expenses     1.51%     1.46%     1.45%     1.42%  
Expense reimbursement/waiver     (0.74%) 1,2   (0.74%) 1,2   (0.74%) 1,2   (0.74%) 1,2
Total annual fund operating expenses after expense reimbursement/waiver     0.77%          0.72%     0.71%     0.68%  

1 Grantham, Mayo, Van Otterloo & Co. LLC (“GMO”) has contractually agreed to waive its fees and/or reimburse the Fund to the extent that the Fund’s total annual fund operating expenses (after applying all other contractual and voluntary expense limitation arrangements in effect at the time) exceed the following amounts for each class of shares, in each case representing the average daily net assets for the indicated class of shares: 0.77% for Class III shares; 0.72% for Class IV shares; 0.705% for Class V shares; and 0.675% for Class VI shares (each, an “Expense Cap”). Fees and expenses of the “non-interested” Trustees and legal counsel and independent compliance consultant to the “non-interested” Trustees, investment-related costs (such as brokerage commissions, interest, and acquired fund fees and expenses), taxes, litigation and indemnification expenses, judgments, and other extraordinary or non-recurring expenses not incurred in the ordinary course of the Fund’s business, are excluded from the Expense Cap. GMO also has contractually agreed to waive or reduce the Fund’s management fees and shareholder service fees to the extent necessary to offset the management fees and shareholder service fees paid to GMO that are directly or indirectly borne by the Fund or a class of shares of the Fund as a result of the Fund’s direct or indirect investments in other series of GMO Trust (“GMO Funds”). Management fees and shareholder service fees will not be waived below zero. The reimbursement and waiver arrangements described above, including the Expense Cap, will remain in effect through September 25, 2019, and may not be terminated prior to such date without the action or consent of the Trust’s Board of Trustees. GMO also has voluntarily agreed to reduce its management fee by 0.15% through December 31, 2018. GMO does not expect the 0.15% reduction of its management fee to continue beyond December 31, 2018.

2 The amount has been restated to reflect application of the Expense Cap.

 

Example

 

This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated, regardless of whether or not you redeem your shares at the end of such periods. The example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same as those shown in the table. The one year amounts shown reflect the contractual expense reimbursements and waivers noted in the expense table. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

 

  1 Year 3 Years 5 Years 10 Years
Class III $79 $407 $758 $1,749
Class IV $74 $391 $731 $1,693
Class V $73 $388 $726 $1,682
Class VI $69 $379 $710 $1,648

 

Additional Summary Information About the Funds

 

The charts on page 128 of the Prospectus in the section captioned “Additional Summary Information About the Funds – Purchase and sale of Fund Shares” are replaced with the following:

 

Minimum Investment Criteria for Class Eligibility

 

    Minimum Total Fund Investment Minimum Total GMO Investment
Class II Shares All Funds Offering Class II Shares N/A $5 million
Class III Shares International Equity Fund N/A $35 million
Emerging Markets Fund 
Emerging Domestic Opportunities Fund
$50 million N/A
All Other Funds Offering Class III Shares N/A $5 million
Class IV Shares All Funds Offering Class IV Shares $125 million $250 million
Class V Shares All Funds Offering Class V Shares $250 million $500 million
Class VI Shares All Funds Offering Class VI Shares $300 million $750 million

 

 

 -5- 

 

 

Minimum Investment Criteria and Eligibility for Implementation Fund and U.S. Treasury Fund

 

    Minimum Total Fund Investment Minimum Total GMO Investment
  Implementation Fund
U.S. Treasury Fund
N/A $5 million

 

 

Management of the Trust

 

The paragraph beginning at the bottom of page 148 and ending on page 149 of the Prospectus in the section captioned “Management of the Trust” is replaced with the following:

 

GMO has retained its affiliate, GMO Singapore Pte. Limited, 1 Raffles Place, #53-00, Singapore 048616 (“GMO Singapore”), to assist GMO in furnishing an investment program for each of Emerging Domestic Opportunities Fund (“EDOF”) and Emerging Markets Fund (“EMF”) (together the “Emerging Markets Equity Funds”). GMO Singapore commenced operations in February 2003 and furnishes investment advisory services predominantly to institutional clients. Pursuant to a sub-advisory agreement with GMO and each Emerging Markets Equity Fund, GMO Singapore makes investment decisions or recommendations for all or part of each Emerging Markets Equity Fund’s portfolio, as determined by GMO. GMO (and not the relevant Emerging Markets Equity Fund) will pay a sub-advisory fee to GMO Singapore for its services at the following rates: (i) 10% of the management fees received by GMO under EMF’s investment management contract; and (ii) 60% of the management fees received by GMO under EDOF’s investment management contract, each net of any fee waiver or expense reimbursement obligations of GMO as may be in effect. A discussion of the basis for the Trustees’ approval of each sub-advisory agreement with GMO Singapore is included (or will be included, as applicable) in the relevant Emerging Markets Equity Fund’s shareholder report for the period during which the Trustees approved that agreement. See “Distributions and Taxes” below for information regarding tax matters relating to the investment advisory services GMO Singapore provides to each Emerging Markets Equity Fund.

 

The first three paragraphs of the sub-section beginning on page 151 of the Prospectus, captioned “Expense Reimbursement,” are replaced with the following:

 

Except for Climate Change Fund, Resources Fund, High Yield Fund, Emerging Country Debt Fund, Strategic Short-Term Fund, and Special Opportunities Fund, GMO has contractually agreed to reimburse each GMO Fund for its “Specified Operating Expenses” (as defined below). GMO has contractually agreed to reimburse each of Resources Fund, High Yield Fund, and Special Opportunities Fund for the portion of its “Specified Operating Expenses” (as defined below) that exceeds 0.10% of the Fund’s average daily net assets. GMO has contractually agreed to reimburse Strategic Short-Term Fund for the portion of its “Specified Operating Expenses” (as defined below) that exceeds 0.05% of the Fund’s average daily net assets. Each of the average daily net asset percentages noted in the two preceding sentences is referred to herein as an “Expense Threshold Amount.” GMO has contractually agreed to reimburse Climate Change Fund to the extent that the Fund’s “Ordinary Fund Operating Expenses,” (as defined below) exceed the following amounts for each class of shares, in each case representing the average daily net assets for the indicated class of shares: 0.77% for Class III shares; 0.72% for Class IV shares; 0.705% for Class V shares; and 0.675% for Class VI shares (the “Climate Change Fund Expense Cap”).

 

 -6- 

 

 

As used in this Prospectus, subject to the exclusions noted below, “Specified Operating Expenses” means: audit expenses, fund accounting expenses, pricing service expenses, expenses of non-investment related tax services, transfer agency expenses, expenses of non-investment related legal services provided to the Funds by or at the direction of GMO, organizational and start-up expenses, federal securities law filing expenses, printing expenses, state and federal registration fees, and custody expenses. In the case of Emerging Markets Fund, “Specified Operating Expenses” does not include custody expenses, and in the case of Emerging Domestic Opportunities Fund, “Specified Operating Expenses” only includes custody expenses to the extent that they exceed 0.10% of the Fund’s average daily net assets. In the case of Benchmark-Free Fund, “Specified Operating Expenses” does not include the Fund’s direct custody expenses attributable to its holdings of emerging market securities. As it relates to the Climate Change Fund Expense Cap, “Ordinary Fund Operating Expenses” excludes fees and expenses of the Independent Trustees, legal counsel to the Independent Trustees, independent compliance consultant to the Independent Trustees, investment-related costs (such as brokerage commissions, interest, and acquired fund fees and expenses), taxes, litigation and indemnification expenses, judgments, and other extraordinary or non-recurring expenses not incurred in the ordinary course of Climate Change Fund’s business.

 

For each Fund with an Expense Threshold Amount, GMO is permitted to recover from the Fund, on a class-by-class basis, as applicable, the Fund’s “Specified Operating Expenses” GMO has borne or reimbursed (whether through reduction of its fees or otherwise) to the extent that the Fund’s “Specified Operating Expenses” later fall below the Expense Threshold Amount or the lower expense limit in effect when GMO seeks to recover the expenses. A Fund, however, is not obligated to pay any such amount more than three years after GMO bore or reimbursed an expense. The amount GMO is entitled to recover may not cause a Fund to exceed the Expense Threshold Amount or the lower expense limit in effect when GMO seeks recovery.

 

The fourth full paragraph on page 152 of the Prospectus is hereby replaced with the following:

 

These contractual waivers and reimbursements will continue through at least June 30, 2019 for each Fund (and, in the case of Climate Change Fund, through at least September 25, 2019) unless the Trust’s Board of Trustees authorizes their modification or termination or reduces the fee rates paid to GMO under the Fund’s management contract or servicing and supplement support agreement.

 

Multiple Classes and Eligibility

 

The charts on pages 162 and 163 of the Prospectus in the section captioned “Multiple Classes and Eligibility” are replaced with the following:

 

Minimum Investment Criteria for Class Eligibility

 

    Minimum Total
Fund Investment
Minimum Total GMO
Investment1
Shareholder
Service Fee
(as a % of average
daily net assets)

Class II Shares All Funds Offering Class II Shares N/A $5 million 0.22%
Class III Shares Global Asset Allocation Fund
Global Equity Allocation Fund
Global Developed Equity Allocation Fund
International Equity Allocation Fund
International Developed Equity Allocation Fund
Benchmark-Free Fund
Strategic Opportunities Allocation Fund
N/A $5 million 0.00%2
International Equity Fund N/A $35 million 0.15%
Emerging Markets Fund
Emerging Domestic Opportunities Fund
$50 million N/A 0.15%
All Other Funds Offering Class III Shares N/A $5 million 0.15%

 

 -7- 

 

 

 

 

    Minimum Total
Fund Investment
Minimum Total GMO
Investment1
Shareholder
Service Fee
(as a % of average
daily net assets)

Class IV Shares

Benchmark-Free Allocation Fund
Climate Change Fund

Resources Fund
Foreign Small Companies Fund
U.S. Equity Fund

High Yield Fund
Core Plus Bond Fund
Emerging Country Debt Fund

Strategic Short-Term Fund
Risk Premium Fund

SGM Major Markets Fund

Alpha Only Fund
Special Opportunities Fund

$125 million $250 million 0.10%
International Equity Fund
International Large/Mid Cap Equity Fund
$125 million $250 million 0.09%
Quality Fund
Emerging Markets Fund
Emerging Domestic Opportunities Fund
$125 million $250 million 0.105%
Class V Shares All Funds Offering Class V Shares $250 million $500 million 0.085%
Class VI Shares All Funds Offering Class VI Shares $300 million $750 million 0.055%

 

 

Minimum Investment Criteria and Eligibility for Implementation Fund and U.S. Treasury Fund

 

    Minimum Total
Fund Investment
Minimum Total GMO
Investment1
Shareholder
Service Fee
(as a % of average
daily net assets)
  Implementation Fund
U.S. Treasury Fund
N/A $5 million N/A

1 The eligibility requirements in the table above are subject to exceptions and special rules for retirement investors investing through financial intermediaries and for investors with continuous investments in International Equity Fund since May 31, 1996. See discussion immediately following these tables for more information about these exceptions and special rules.

2 These Funds indirectly bear shareholder service fees by virtue of their investments in other GMO Funds.

 

Distributions and Taxes

 

In the first full paragraph on page 165 of the Prospectus, the reference to “11:00 am Eastern time” is replaced with “2:00 pm Eastern time.”

 

 -8- 

 

 

The section captioned “Certain Non-U.S. Tax Issues Relating to Singapore” on page 168 of the Prospectus is replaced with the following:

 

Certain Non-U.S. Tax Issues Relating to Singapore

 

As described under “Management of the Trust,” GMO Singapore furnishes investment advisory services and makes investment decisions or recommendations for all or a part of each Emerging Markets Equity Fund’s portfolio, as determined by GMO.

 

GMO believes that an exemption from Singapore taxation should apply to income and gains derived from the provision of such investment advisory services and from such investment decisions or recommendations made by GMO Singapore for a “qualifying fund,” so long as, among other requirements, such income and gains constitute “specified income” from “designated investments” as those terms are defined under current Singapore tax law. In this regard, the sources of specified income from designated investments earned solely by each Emerging Markets Equity Fund (and not by any other series of GMO Trust) are considered. GMO expects that substantially all such income and gains earned by each Emerging Markets Equity Fund will constitute specified income from designated investments. This tax position takes into account advice received from Singapore legal counsel and relevant Singapore tax law. All income and gains that are considered to be Singapore-sourced (including amounts attributable to Fund-level permanent establishment in Singapore) and that do not otherwise qualify for the exemption would generally be subject to Singapore taxation at the current corporate rate of 17%. Shareholders of an Emerging Markets Equity Fund bear the risk of all Emerging Markets Equity Fund income tax consequences in the event that income or gains are subject to Singapore taxation.

 

In addition to the foregoing, a “non-qualifying” shareholder (described below) may be required to pay a “financial amount” to the Inland Revenue Authority of Singapore and fulfill certain Singapore tax reporting requirements. Very generally, non-qualifying shareholders may include, but are not limited to, Singapore-domiciled shareholders that maintain a permanent establishment in Singapore and who, either alone or with their associates, beneficially own applicable qualifying fund shares representing in excess of 50% of a qualifying fund’s net assets as of the final day of that qualifying fund’s financial year-end (or in excess of 30% of the qualifying fund’s net assets, to the extent the qualifying fund has less than 10 shareholders). The “financial amount” is generally computed by applying the prevailing corporate rate of tax to a non-qualifying shareholders’ share of qualifying fund profits.

 

Shareholders are responsible for evaluating their percentage interest of net assets in a qualifying fund for the purpose of their own particular situations. Relevant information may be derived from account statements and other information provided to shareholders in respect of the qualifying fund. Upon the reasonable request of a shareholder, GMO will provide information necessary to allow the shareholder to assess its percentage ownership in the qualifying fund.

 

 -9- 

 

 

Filed pursuant to Rule 497(e)
File Nos. 002-98772 and 811-04347

 

Amended and Restated Supplement dated December 1, 2018 to the
GMO Trust Statement of Additional Information dated June 30, 2018

 

This supplement amends and restates the supplement dated September 25, 2018 to the GMO Trust Statement of Additional Information dated June 30, 2018 (the “SAI”).

 

The sub-section appearing on page 63 of the SAI captioned “SGM Major Markets Fund” in the section captioned “Investment Guidelines” is replaced with the following:

 

SGM Major Markets Fund

 

Subject to Section 18(f), the Fund generally expects that its typical maximum gross positions will be not more than three (3.0) times the net asset value of the Fund.

 

In addition, GMO generally expects to apply the following ranges in the management of the Fund’s portfolio:

 

(1) Exposure (as determined by GMO) to a single asset class (e.g., equity securities, fixed income securities, commodities) will be between -100% and +100% of the Fund’s net asset value; and

 

(2) Exposure (as determined by GMO) to a single asset (e.g., any single futures contract) will be between -50% and +50% of the Fund’s net asset value.

 

The Fund will generally be managed within these ranges, although the Fund may be outside of these ranges for short periods of time. These ranges do not apply to the Fund’s investments in its wholly-owned subsidiary or cash, cash equivalents, cash substitutes and other short duration high quality exposures (e.g., shares of money market funds, shares of U.S. Treasury Fund or treasury bills of the U.S. or other developed countries).

 

The second paragraph of the section appearing on page 92 of the GMO Trust Statement of Additional Information, dated June 30, 2018, captioned “Management Contracts,” is replaced with the following:

 

In addition, as disclosed in the Prospectus, GMO has contractually agreed to waive and/or reimburse each Fund for specified Fund expenses through at least June 30, 2019 (and, in the case of GMO Climate Change Fund, through at least September 25, 2019). Additionally, with respect to only Climate Change Fund, GMO has voluntarily agreed to reduce its annual management fee by 0.15% through December 31, 2018. GMO does not expect the temporary 0.15% reduction of its management fee to continue beyond December 31, 2018. In addition to the contractual waivers and reimbursements described above, GMO has voluntarily waived U.S. Treasury Fund’s entire management fee. GMO may change or terminate this waiver at any time.

 

The table in the section appearing on page 86 of the GMO Trust Statement of Additional Information, dated June 30, 2018, captioned “Officers” is replaced with the following:

 

Officers

Name and Year of Birth   Position(s)
Held
with the Trust
  Length
of Time Served
  Principal Occupation(s)
During Past 5 Years*
Jason B. Harrison
YOB: 1977
  Trustee; President of the Trust   Trustee and President since March 2018.   Product Development, Grantham, Mayo, Van Otterloo & Co. LLC (October 2015 – present); Legal Counsel, Grantham, Mayo, Van Otterloo & Co. LLC (2006 – 2015)  
Sheppard N. Burnett
YOB: 1968
  Chief Executive Officer   Chief Executive Officer since June 2015; Chief Financial Officer, March 2007-June 2015; Treasurer, November 2006-June 2015; Assistant Treasurer, September 2004-November 2006.   Head of Fund Treasury and Tax, Grantham, Mayo, Van Otterloo & Co. LLC (December 2006-present).

Betty Maganzini

YOB: 1972

  Treasurer, Chief Accounting Officer and Chief Financial Officer   Treasurer, Chief Accounting Officer and Chief Financial Officer since September 2018; Assistant Treasurer, September 2013-September 2018.   Fund Administrator, Grantham, Mayo, Van Otterloo & Co. LLC (July 2010-present); Assistant Treasurer (June 2009-July 2010), Manager, Fund Administration and Regulatory Affairs (December 2006-June 2009), Hambrecht & Quist Capital Management LLC.

 

 -1- 

 

 

John L. Nasrah
YOB: 1977
  Assistant Treasurer and Chief Tax Officer   Since March 2007.   Fund Administrator, Grantham, Mayo, Van Otterloo & Co. LLC (September 2004-present).
Mahmoodur Rahman
YOB: 1967
  Assistant Treasurer   Since September 2007.   Fund Administrator, Grantham, Mayo, Van Otterloo & Co. LLC (April 2007-present).

Cathy Tao

YOB: 1974

  Assistant Treasurer   Since September 2016   Fund Administrator, Grantham, Mayo, Van Otterloo & Co. LLC (October 2007-present)

Brian Kadehjian

YOB: 1974

  Assistant Treasurer and Treasury Officer   Assistant Treasurer since February 2015; Treasury Officer since September 2013.   Fund Administrator, Grantham, Mayo, Van Otterloo & Co. LLC (April 2002-present).

Douglas Y. Charton
YOB: 1982
  Chief Legal Officer, Vice President and Clerk   Since August 2015.   Legal Counsel, Grantham, Mayo, Van Otterloo & Co. LLC (July 2015-present); Associate, K&L Gates LLP (September 2007-July 2015).
Megan Bunting
YOB: 1978
  Vice President and Assistant Clerk   Since September 2013.   Legal Counsel, Grantham, Mayo, Van Otterloo & Co. LLC (September 2006-present).
Kevin O’Brien
YOB: 1985
  Vice President and Assistant Clerk   Since March 2016.   Legal Counsel, Grantham, Mayo, Van Otterloo & Co. LLC (February 2015-present); Associate, Dechert LLP (October 2010-February 2015).
Gregory L. Pottle
YOB: 1971
  Chief Compliance Officer   Chief Compliance Officer since May 2015; Vice President and Assistant Clerk, November 2006-November 2015.   Chief Compliance Officer, Grantham, Mayo, Van Otterloo & Co. LLC (May 2015-present); Legal Counsel, Grantham, Mayo, Van Otterloo & Co. LLC (March 2000-May 2015).
Claire Wilkinson
YOB: 1965
  Anti-Money Laundering Officer   Since February 2016.   Compliance Associate, GMO UK Limited (April 2013-present); General Counsel, MVision Private Equity Advisers Limited (November 2009-January 2013).

__________________

 

*  Each officer of the Trust may also serve as an officer and/or director of certain pooled investment vehicles of which GMO or an affiliate of GMO serves as the investment adviser. With the exception of Mr. Harrison, each officer listed in the table above also serves as an officer of GMO Series Trust.

 

 -2-