0000912057-01-537550.txt : 20011107
0000912057-01-537550.hdr.sgml : 20011107
ACCESSION NUMBER: 0000912057-01-537550
CONFORMED SUBMISSION TYPE: 497
PUBLIC DOCUMENT COUNT: 1
FILED AS OF DATE: 20011102
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: SEI INSTITUTIONAL INTERNATIONAL TRUST
CENTRAL INDEX KEY: 0000835597
STANDARD INDUSTRIAL CLASSIFICATION: []
STATE OF INCORPORATION: MA
FISCAL YEAR END: 0228
FILING VALUES:
FORM TYPE: 497
SEC ACT: 1933 Act
SEC FILE NUMBER: 033-22821
FILM NUMBER: 1774307
BUSINESS ADDRESS:
STREET 1: C/O SEI INVESTMENTS CO
STREET 2: ONE FREEDOM VALLEY RD
CITY: OAKS
STATE: PA
ZIP: 19456
BUSINESS PHONE: 8003425734
MAIL ADDRESS:
STREET 1: SEI INTERNATIONAL TRUST
STREET 2: 530 E SWEDESFORD RD
CITY: WAYNE
STATE: PA
ZIP: 19087-1693
FORMER COMPANY:
FORMER CONFORMED NAME: SEI INTERNATIONAL TRUST
DATE OF NAME CHANGE: 19920703
FORMER COMPANY:
FORMER CONFORMED NAME: SEI WEALTH MANAGEMENT TRUST
DATE OF NAME CHANGE: 19900129
497
1
a2062438z497.txt
497
SEI INSTITUTIONAL INTERNATIONAL TRUST
International Equity Fund
Emerging Markets Equity Fund
International Fixed Income Fund
Emerging Markets Debt Fund
Tax-Managed International Equity Fund
(the "Funds")
SUPPLEMENT DATED NOVEMBER 2, 2001 TO THE STATEMENT OF
ADDITIONAL INFORMATION ("SAI") DATED JANUARY
31, 2001, AS AMENDED MARCH 31, 2001
THIS SUPPLEMENT PROVIDES NEW AND ADDITIONAL INFORMATION BEYOND THAT CONTAINED IN
THE SAI. IT SHOULD BE RETAINED AND READ IN CONJUNCTION WITH THE SAI.
The SAI is hereby supplemented to reflect that the Funds may lend their
securities as stated below. Accordingly, the sections entitled "INVESTMENT
OBJECTIVES AND POLICIES" and "DESCRIPTION OF PERMITTED INVESTMENTS AND RISK
FACTORS" of the SAI have been revised as follows.
The sixth paragraph on page S-2 is deleted and replaced with the following:
The Fund expects to be fully invested in the primary investments
described above, but may invest up to 35% of its total assets in U.S. or
non-U.S. cash reserves; money market instruments; swaps; options on securities
and non-U.S. indices; futures contracts, including stock index futures
contracts; options on futures contracts; and equity-linked warrants. The Fund is
permitted to acquire floating and variable rate securities, purchase securities
on a when-issued or delayed delivery basis, and invest up to 15% of its net
assets in illiquid securities. The Fund may also lend its securities to
qualified borrowers. Although permitted to do so, the Fund does not currently
intend to invest in securities issued by passive foreign investment companies.
The fourth paragraph on page S-3 is deleted and replaced with the following:
The Fund may invest up to 10% of its total assets in shares of other
investment companies. The Fund may invest in futures contracts and purchase
securities on a when-issued or delayed delivery basis. The Fund may also
purchase and write options to buy or sell futures contracts and lend its
securities to qualified borrowers.
The first full paragraph on page S-4 is deleted and replaced with the following:
The Fund expects to be fully invested in the primary investments
described above, but may invest in obligations issued or guaranteed as to
principal and interest by the United States Government, its agencies or
instrumentalities ("U.S. Government securities"), swaps, options and futures.
The Fund may also purchase and write options to buy or sell futures contracts,
purchase securities on a when-issued or delayed delivery basis, engage in short
selling and lend its securities to qualified borrowers. The Fund may invest up
to 10% of its total assets in illiquid securities. Furthermore, although the
Fund will concentrate its investments in relatively developed countries, the
Fund may invest up to 20% of its assets in fixed income securities of issuers
in, or denominated in the currencies of, developing countries and that are
investment-
grade securities or determined by the advisers to be of comparable quality to
such securities and debt obligations at the time of purchase.
The fourth paragraph on page S-6 is deleted and replace with the following:
The Fund expects to be fully invested in the primary investments
described above, but may invest up to 35% of its total assets in U.S. or
non-U.S. cash reserves; money market instruments; swaps; options on securities
and non-U.S. indices; futures contracts, including stock index futures
contracts; and options on futures contracts. The Fund is permitted to acquire
floating and variable rate securities, purchase securities on a when-issued or
delayed delivery basis, invest up to 15% of its net assets in illiquid
securities and lend its securities to qualified borrowers. Although permitted to
do so, the Fund does not currently intend to invest in securities issued by
passive foreign investment companies.
The following is added after the section entitled "REVERSE REPURCHASE
AGREEMENTS" on page S-19.
SECURITIES LENDING -- Each 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). No Fund will lend
portfolio securities to its investment adviser, sub-adviser or their affiliates
unless it has applied for and received specific authority to do so from the SEC.
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, although the borrower will be required to
deliver collateral of 102% and 105% of the market value of borrowed securities
for domestic and foreign securities, respectively. 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.
By lending its securities, a Fund may increase its 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. Each 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. 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.
* * * * * * * * * *
The SAI is hereby reflected to revise the swap, caps, floors and collars risk
disclosure. Accordingly, the section entitled "SWAP, CAPS, FLOORS AND COLLARS"
beginning on page S-20 is deleted and replaced with the following:
SWAPS, CAPS, FLOORS, COLLARS AND SWAPTIONS -- Swaps are privately
negotiated over-the-counter derivative products in which two parties agree to
exchange payment streams calculated in relation to a rate, index, instrument or
certain securities (referred to as the "underlying") and a predetermined amount
(referred to as the "notional amount"). The underlying for a swap may be an
interest rate (fixed or floating), a currency exchange rate, a commodity price
index, a security, group of securities or a securities index, a combination of
any of these, or various other rates, assets or indices. Swap agreements
generally do not involve the delivery of the underlying or principal, and a
party's obligations generally are equal to only the net amount to be paid or
received under the agreement based on the relative values of the positions held
by each party to the swap agreement.
A great deal of flexibility is possible in the way swaps may be
structured. For example, in a simple fixed-to-floating interest rate swap, one
party makes payments equivalent to a fixed interest rate, and the other party
makes payments calculated with reference to a specified floating interest rate,
such as LIBOR or the prime rate. In a currency swap, the parties generally enter
into an agreement to pay interest streams in one currency based on a specified
rate in exchange for receiving interest streams denominated in another currency.
Currency swaps may involve initial and final exchanges that correspond to the
agreed upon notional amount.
A Fund may engage in simple or more complex swap transactions involving
a wide variety of underlyings for various reasons. For example, a Fund may enter
into a swap to gain exposure to investments (such as an index of securities in a
market) or currencies without actually purchasing those stocks or currencies; to
make an investment without owning or taking physical custody of securities or
currencies in circumstances in which direct investment is restricted for legal
reasons or is otherwise impracticable; to hedge an existing position; to obtain
a particular desired return at a lower cost to the Fund than if it had invested
directly in an instrument that yielded the desired return; or for various other
reasons.
Caps, floors, collars and swaptions are privately-negotiated
option-based derivative products. Like a put or call option, the buyer of a cap
or floor pays a premium to the writer. In exchange for that premium, the buyer
receives the right to a payment equal to the differential if the specified index
or rate rises above (in the case of a cap) or falls below (in the case of a
floor) a pre-determined strike level. Like swaps, obligations under caps and
floors are calculated based upon an agreed notional amount, and, like most swaps
(other than currency swaps), the entire notional amount is not exchanged. A
collar is a combination product in which one party buys a cap from and sells a
floor to the another party. Swaptions give the holder the right to enter into a
swap. A Fund may use one or more of these derivative products in addition to or
in lieu of a swap involving a similar rate or index.
Under current market practice, swaps, caps, collars and floors between
the same two parties are generally documented under a "master agreement." In
some cases, options and forwards between the parties may also be governed by the
same master agreement. In the event of a default, amounts owed under all
transactions entered into under, or covered by, the same master agreement would
be netted, and only a single payment would be made.
The swap market has grown substantially in recent years with a large
number of banks and investment banking firms acting both as principals and as
agents using standardized swap agreements. As a result, the swap market has
become relatively liquid in comparison with the markets for other similar
instruments that are also traded in over-the-counter markets.
Swaps and other derivatives involve risks. One significant risk in a
swap, cap, floor, collar or swaption is the volatility of the specific interest
rate, currency or other underlying that determines the amount of payments due to
and from a Fund. This is true whether these derivative products are used to
create additional risk exposure for a Fund or to hedge, or manage, existing risk
exposure. If under a swap, cap, floor, collar or swaption agreement a Fund is
obligated to make a payment to the counterparty, the Fund must be prepared to
make the payment when due. A Fund could suffer losses with respect to such an
agreement if the Fund is unable to terminate the agreement or reduce its
exposure through offsetting transactions. Further, the risks of caps, floors and
collars, like put and call options, may be unlimited for the seller if the cap,
or floor is not hedged or covered, but is limited for the buyer.
Because under swap, cap, floor, collar and swaption agreements a
counterparty may be obligated to make payments to a Fund, these derivative
products are subject to risks related to the counterparty's creditworthiness. If
a counterparty defaults, a Fund's risk of loss will consist of any payments that
the Fund is entitled to receive from the counterparty under the agreement (this
may not be true for currency swaps that require the delivery of the entire
notional amount of one designated currency in exchange for the other). Upon
default by a counterparty, however, a Fund may have contractual remedies under
the swap agreement.
A Fund will enter into swaps only with counterparties that the Adviser
or Sub-Advisers believe to be creditworthy. In addition, a Fund will earmark or
segregate cash or liquid securities in an amount equal to any liability amount
owned under a swap, cap, floor, collar or swaption agreement, or will otherwise
cover the transaction by entering into an offsetting position or agreement.
--------------------------
The SAI is hereby amended to reflect these changes.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE.