-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IcZ2YWflRRQxVC7BGG1PO37VjtiAxFUYmkwIuBBM8Rj4Sl9fY37XtSTx8tSi2+eR DRJxQXxMOPv223LPwBY2yQ== 0000935069-97-000049.txt : 19970424 0000935069-97-000049.hdr.sgml : 19970424 ACCESSION NUMBER: 0000935069-97-000049 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970228 FILED AS OF DATE: 19970423 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SEI INTERNATIONAL TRUST CENTRAL INDEX KEY: 0000835597 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: MA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-05601 FILM NUMBER: 97585709 BUSINESS ADDRESS: STREET 1: 2 OLIVER ST CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 8003425734 MAIL ADDRESS: STREET 1: SEI INTERNATIONAL TRUST STREET 2: 680 E SWEDESFORD RD CITY: WAYNE STATE: PA ZIP: 19087 FORMER COMPANY: FORMER CONFORMED NAME: SEI WEALTH MANAGEMENT TRUST DATE OF NAME CHANGE: 19900129 N-30D 1 SEI INTERNATIONAL TRUST ANNUAL REPORT ANNUAL REPORT AS OF FEBRUARY 28, 1997 SEI INTERNATIONAL TRUST ================================================================================ International Equity ================================================================================ Emerging Markets Equity ================================================================================ International Fixed Income ================================================================================ [SEI INVESTMENTS LOGO] LETTER TO SHAREHOLDERS ================================================================================ SEI INTERNATIONAL TRUST -- FEBRUARY 28, 1997 DEAR SHAREHOLDER: This past year proved to be a challenging one for investors in non-U.S. bond and equity markets. Shifting views on the pace of European monetary accord and the likely initial entrants into the European Monetary Union (EMU) provoked startling reform in government finances in a number of countries and often led to volatile activity in the debt markets. Among the world's equity markets, frustration with the pace of Japan's economic recovery continued, while investors in the "Tiger" and emerging markets of Asia were confronted with the unusual environment of slowing growth rates and slackened demand for critical products. SEI's International Portfolios weathered these conditions in good form as the accompanying discussion and analysis section reveals. I am pleased to report, the International Equity Portfolio, Emerging Markets Equity Portfolio and the International Fixed Income Portfolio all outperformed their market indices for the year ended February, 1997. The past year offered several demonstrations of SEI's dedication to continual improvement and management of our investment strategies. Major enhancements were made in the execution of our developed and emerging markets equity strategies. Four new specialist sub-advisers were added to the International Equity Portfolio while three were added to the Emerging Markets Equity Portfolio. In the International Equity Portfolio, Farrell-Wako Global Investment Management, Inc., Seligman Henderson Co., Yamaichi Capital Management Inc. and Lazard London International Investment Management Limited each provide the Portfolio with precise regional and style specialties as well as specific stock-selection skills. In the Emerging Markets Portfolio, the addition of Coronation Asset Management Ltd., Parametric Portfolio Associates and Yamaichi Capital Management (Singapore) Limited, along with the decision to focus the contributions of Montgomery Asset Management, L.P. on the Latin American markets, provide greater coverage of the distinct regions across the emerging market landscape. These attributes better align our implementations with the conclusions of our extensive research effort to maximize returns in the non-U.S. equity markets. Continuing our efforts toward improving our investment lineup, shortly after the close of the Trust's fiscal year, SEI received approval from the Board of Trustees to open a new Emerging Market Debt Portfolio. Emerging market debt securities have grown from obscure intra-bank trading instruments to significant components of the world's capital markets. Additional information on this Portfolio will be forthcoming. In closing, I would like to relate a recent experience that further underscores SEI's commitment to deliver superior investment results. As you know, SEI's investment analysts spend considerable time visiting potential sub-advisers and conducting thorough "field" research. Earlier in February, a group of analysts from our Non-U.S. Equity Team was traveling in Hong Kong and Taiwan at the time of the death of China's paramount leader, Deng Xiaoping. While widely anticipated, given Deng's advanced age, the event nevertheless caused considerable uncertainty in world financial markets as to Chinese commitment to free-market practices. Our team's conclusions, based on first-hand research, which included discussions with leading members of the Taiwanese business and political community, was that the reform measures will continue and that China remains committed to raising local living standards and joining the market for global trade. I believe our activities over the past year, coupled with our ongoing research efforts have positioned the Trust's Portfolios and shareholders to reap the significant benefits of global investing. I thank you for your continued support of SEI's Portfolios and look forward to reporting our future accomplishments. Respectfully, /S/ SIGNATURE David Lee President TABLE OF CONTENTS ================================================================================ REVIEW OF NON-U.S. EQUITY MARKETS.................................... 1 REVIEW OF NON-U.S. BOND MARKETS...................................... 3 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FUND PERFORMANCE INTERNATIONAL EQUITY PORTFOLIO................................. 4 EMERGING MARKETS EQUITY PORTFOLIO.............................. 6 INTERNATIONAL FIXED INCOME PORTFOLIO........................... 8 STATEMENTS OF NET ASSETS............................................. 10 STATEMENTS OF ASSETS AND LIABILITIES................................. 24 STATEMENTS OF OPERATIONS............................................. 25 STATEMENTS OF CHANGES IN NET ASSETS.................................. 26 FINANCIAL HIGHLIGHTS................................................. 27 NOTES TO FINANCIAL STATEMENTS........................................ 28 REPORT OF INDEPENDENT ACCOUNTANTS.................................... 34 SHAREHOLDER VOTING RESULTS........................................... 35 NOTICE TO SHAREHOLDERS............................................... 39 REVIEW OF NON-U.S. EQUITY MARKETS ================================================================================ SEI INTERNATIONAL TRUST -- FEBRUARY 28, 1997 INTERNATIONAL EQUITY MARKET OVERVIEW Non-U.S. markets, with the exception of Japan, generally posted respectable gains over the past year. Overall, the Morgan Stanley EAFE Index returned 3.2% for the year ending February 28, 1997 with Japanese shares falling by 8.8% while stocks in other developed markets gained 18.6%. Emerging markets gained 15.7% as measured by the IFC Investable Composite. By region, the emerging markets of Latin America produced the highest returns for investors, rising 28.2% as measured by the IFC's regional index. While at the start of the Trust's fiscal year the Mexican peso crisis and the "Tequila effect" were still on the minds of investors, steady economic growth, continued reform and privatization measures and stable interest rates in the U.S. provided an attractive backdrop for the region's markets. Venezuela led all equity markets over the year, returning 130% due to lower inflation, a stable currency and increased GDP growth. Brazilian shares were helped by privatization activity in the electric utility and telecommunications sectors and responded with gains of 48%. Mexican shares matched the region's return as the benefits of the devalued peso fed through the economy and growth rates showed steady improvement over the year. In Europe, the strongest results were posted by many of the smaller developed and emerging Continental markets. The success of the privatization within the Eastern European markets and the success of the transformation to market economies pushed stocks in Hungary and Poland higher by 70% and 46% respectively. Finnish shares also rose by 46% to lead the developed markets in the region. While gains here were influenced by the performance of index heavyweight Nokia, investors responded to the progress made by the Swedish and Spanish governments toward meeting the fiscal requirements of the European Monetary Union. With falling bond yields proving a supportive backdrop, restructuring activity in key sectors of both markets resulted in strong total returns. Shares in the region's largest market, the United Kingdom, lagged other markets in local terms but U.S. investors benefited from a strengthening currency. The U.K. has one of the strongest economies within Europe with expected GDP growth rates a percent higher than in Germany or France. Rising interest rates, in response to this growth, however, limited the market's return to 18.9% over the past year. Rising rates did support the currency, which gained 6.5% against the U.S. dollar, boosting returns to U.S. investors. Asian markets were relative laggards over the past year. Japan, the largest market in the region and outside the U.S., struggled with sluggish growth and lingering questions about the health of the banking sector. After posting flat results through November, the market went into an abrupt dive during December and January and ended the year through February down 9% in local terms and 21% in dollar terms. Amid concerns about the health of the economy, the government's decision to cut spending and increase the level of consumption taxes in its new budget undermined remaining investor confidence. The overall fiscal tightening was prompted by the highest debt-to-GDP level among the seven leading industrial nations. The one bright spot for the stock market was the weakening yen which fell 12.5% over the year to (Y)120 to the dollar and supported the export sector. Unfortunately, the yen's fall compounded disappointing returns for U.S. investors. 1 REVIEW OF NON-U.S. EQUITY MARKETS (Continued) ================================================================================ SEI INTERNATIONAL TRUST -- FEBRUARY 28, 1997 Disappointing results weren't limited to Japan as the emerging Asian markets of Thailand and Korea both ended the past twelve months with dismal performance. Thailand returned -49%, while Korea returned -35%. The Thai market was negatively impacted by the slowest growth in GDP in over a decade, a high interest rate environment, and poor corporate earnings announcements. The Korean market was plagued by poor performance in technology stocks, and concerns by investors over the stability of North Korea and the possible impact on the South. On the positive side, Taiwanese shares rose more than 60% due to an improved economic picture and renewed investor inflow after normalization of relations with mainland China. 2 REVIEW OF NON-U.S. BOND MARKETS ================================================================================ INTERNATIONAL FIXED INCOME MARKET REVIEW Non-U.S. bond markets posted strong returns in local currency terms for the twelve month period ending February 28, 1997, as every bond market in the Salomon Brothers Non-U.S. World Government Bond Index outperformed the U.S. While the U.S. economy expanded throughout the period, many other countries were mired in slow growth and record high unemployment. This fueled gains in foreign bond markets as central banks cut interest rates in order to spur economic activity. However, most foreign currencies depreciated significantly versus the U.S. dollar, which caused the Index to lag the U.S. market when translated back into dollar terms. Speculation on the timing and initial membership of the European Monetary Union (EMU), which would create one common currency for all member nations, drove both the currency and bond market returns of continental Europe for the period. In order to qualify for the EMU, countries must meet certain fiscal requirements outlined by the Maastricht Treaty signed in 1992. The peripheral European markets of Italy, Spain, and Sweden rallied throughout 1996 on the optimism that these countries would be included in the first round of membership into the EMU scheduled to commence on January 1, 1999. Market-friendly election results, progress towards trimming budget deficits, and mild inflation reports fueled the optimism. However, reports surfaced in 1997 that even Germany would not be able to meet the strict Maastricht criteria due to the stagnant European economy. This led to speculation that the formation of the EMU would be delayed, which in turn hurt the peripheral markets. While the rest of Europe was in an economic slump, healthy employment and manufacturing gains in the U.K. coupled with high relative yields attracted foreign capital inflow, which strengthened the British pound relative to all other major currencies. Japanese bonds outperformed U.S. bonds on a local currency basis, but a weakening yen caused Japan to lag the U.S. in dollar terms for the period. A slow economy kept interest rates at historical lows and boosted bond prices. However, the yen zigzagged downward to end the period 12.5% lower versus the U.S. dollar. A turbulent Japanese stock market and low bond yields caused investors to exit Japanese assets in search for better returns abroad. Relatively high yield levels and a strong U.S. equity market attracted foreign capital and strengthened the dollar. 3 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FUND PERFORMANCE ================================================================================ SEI INTERNATIONAL TRUST -- FEBRUARY 28, 1997 INTERNATIONAL EQUITY PORTFOLIO OBJECTIVES. The International Equity Portfolio seeks to provide long-term capital appreciation through investments in equity securities of non-U.S. issuers. The Portfolio also seeks to provide U.S. investors with a vehicle for international diversification, which can reduce the variability of Portfolio returns to the extent that foreign markets have a relatively low correlation with the U.S. market. STRATEGY. The International Equity Portfolio is diversified across 21 markets and includes commitments to large-cap and small-cap shares. Exposure is also maintained to growth and value styles of active management. The Portfolio employs five sub-advisers, each providing a unique regional or style management specialty. Allocations to the sub-advisers are carefully managed to ensure proper geographic and market exposure. Emphasis is placed on active security selection as the principal source of value-added as opposed to active country allocation. The Portfolio does not hedge foreign currency exposure. ANALYSIS. The International Equity Portfolio returned 5.7% for the year ended February 28, 1997, outperforming the MSCI EAFE Index's return of 3.2%. Relative performance over the twelve months was attributable to both specific stock selection and strategic country allocation. At the country level, our underweighting to the struggling Japanese market provided the biggest boost to performance. As noted in the market review, sluggish growth in Japan has depressed sentiment and limited investor interest in the market. In Europe, our emphasis on French and Spanish shares enhanced performance as both markets were helped by falling interest rates. Allocations within the Deutschemark bloc were, on balance, neutral. Our overweight to Dutch stocks was rewarded by strong performance in response to the dollar's strengthening. In contrast, our decision to favor Swiss stocks over German stocks (due to the perceived competitive disadvantages of Germany) hampered results as the Swiss franc depreciated sharply over the year. ================================================================================ INTERNATIONAL EQUITY ================================================================================ AVERAGE ANNUAL TOTAL RETURN 1 - -------------------------------------------------------------------------------- One Annualized Annualized Annualized Year 3 Year 5 Year Inception Return Return Return to Date - -------------------------------------------------------------------------------- Class A 5.70% 4.61% 7.79% 4.62% - -------------------------------------------------------------------------------- Class D, w/o load 5.39% 4.24% 7.57% 5.22%* - -------------------------------------------------------------------------------- Class D, w/load 0.15% 2.37% 6.47% 3.32%* - -------------------------------------------------------------------------------- COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN THE SEI INTERNATIONAL EQUITY PORTFOLIO, CLASS A OR CLASS D W/LOAD, VERSUS THE MORGAN STANLEY MSCI EAFE INDEX [LINE GRAPH] Morgan Stanley MSCI SEI International SEI International Equity EAFE Index Equity Portfolio, Portfolio, Class A Class D 10,000 9,500 10,000 8,957 9,094 9,573 8,751 9,127 9,607 8,101 8,978 9,451 7,766 9,173 9,656 10,809 11,415 12,016 10,329 10,507 11,094 12,069 12,270 13,013 12,461 12,931 13,755 1 FOR THE PERIOD ENDED FEBRUARY 28, 1997. PAST PERFORMANCE IS NO INDICATION OF FUTURE PERFORMANCE. CLASS D SHARES WERE OFFERED BEGINNING ON MAY 1, 1994. THE PERFORMANCE SHOWN FOR THE CLASS D SHARES PRIOR TO SUCH DATE IS BASED ON THE PERFORMANCE OF CLASS A SHARES ADJUSTED TO REFLECT THE MAXIMUM SALES CHARGE OF 5.0% FOR THE CLASS D SHARES. CLASS A SHARES WERE OFFERED BEGINNING DECEMBER 30, 1989. Stock and industry selection within markets provided the majority of our outperformance over the past year. In Europe, contributions were particularly robust in Germany and the 4 Netherlands. Overweights to dollar-sensitive industries such as German chemical and motor vehicle producers were particularly well timed. Bayer AG, for example, announced a record year of profits, as well as making positive comments about its existing drug pipeline while Volkswagen saw a resurgence in sales, especially within the U.S. after cost reductions and the introduction of newer, more updated models. Our emphasis on banking and insurance shares in the Netherlands enhanced results as yields in the market came down by 100 basis points over the past year. ABN Amro and ING Holdings are representative holdings in this sector. Elsewhere in Europe, Swedish retailer Hennes & Mauritz gained over 100% over the year on the report of record earnings. Across the Pacific markets, results were led by our holdings in Hong Kong and Malaysia. A revival in the property market boosted shares in Hong Kong, particularly financial services and banking shares. Our position in HSBC, the largest bank in the market and a core holding in the Portfolio, made the single largest contribution to performance over the most recent twelve months. Many analysts indicate that HSBC is the best positioned bank to take advantage of the reversion to Chinese rule on July 1 of this year. Malaysian financial service holdings also contributed significantly -- in particular, Rashid Hussain and MBF Capital. Oriental Holdings, a broadly diversified holding company with operations ranging from motorcycle manufacturing to palm oil processing was another notable contributor. Finally, results in Japan (the largest non-U.S. market) were on balance neutral over the past twelve months. While specific asset selection was disappointing, particularly within the producer goods and non-bank financial sectors, a significant underweighting to the troubled banking sector proved positive. Over the past twelve months, a number of enhancements have been made to the Portfolio. In June, our Japanese and Pacific Basin strategies were restructured with the appointment of specific specialist sub-advisers for Large Cap Japan, Small Cap Japan and Large Cap Pacific Basin mandates. The appointment of Farrell-Wako Global Investment Management Inc., Seligman Henderson Co. and Yamaichi Capital Management, Inc. to replace Schroder Capital Management International, completed the transition to specialist sub-advisers who place principal emphasis on stock selection. A similar transition was completed for the European region at the end of 1996, with the appointment of Lazard London International Investment Management to replace Morgan Grenfell Investment Services for the Large Cap European growth mandate. PORTFOLIO MARKET ALLOCATIONS VERSUS MSCI EAFE INDEX FEBRUARY 28, 1997 FEBRUARY 29, 1996 ------------------ ------------------- PORTFOLIO EAFE PORTFOLIO EAFE ---------- ------ ---------- ------ Australia 3.5% 3.0% 4.1% 2.7% Belgium 0.9% 1.3% 2.0% 1.2% Canada 0.8% 0.0% 2.6% 0.0% France 7.9% 7.3% 10.3% 6.4% Germany 7.5% 8.7% 6.7% 6.7% Hong Kong 5.5% 3.8% 2.8% 3.3% Italy 3.5% 3.1% 1.4% 2.2% Japan 23.0% 30.2% 35.2% 42.2% Netherlands 5.4% 5.0% 4.1% 3.9% New Zealand 0.6% 0.4% 0.5% 0.5% Spain 2.6% 2.2% 3.6% 1.7% Sweden 2.5% 2.6% 1.0% 1.7% Switzerland 5.1% 5.9% 3.2% 5.3% United Kingdom 16.4% 19.4% 12.0% 16.5% All Other 5.8% 7.1% 5.0% 5.7% Cash 9.0% 0.0% 5.5% 0.0% ---------- ------ -------- ------ 100% 100% 100% 100% ========== ====== ======== ====== 5 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FUND PERFORMANCE ================================================================================ SEI INTERNATIONAL TRUST -- FEBRUARY 28, 1997 EMERGING MARKETS EQUITY PORTFOLIO OBJECTIVES. The Emerging Markets Equity Portfolio seeks to provide long-term capital appreciation by investing primarily in a diversified portfolio of equity securities of emerging market issuers. STRATEGY. The Portfolio's strategy follows a multi-manager structure in order to reduce manager-specific risks and to better meet portfolio objectives. The portfolio employs specialist managers focusing on regions across the emerging markets, specifically Latin America, Asia, South Africa and the smaller markets. The managers specializing in Latin America and Asia focus on both top-down country allocation and bottom-up fundamental company analysis. The South African equity specialist focuses on stock selection within the broad equity market. The smaller markets mandate emphasizing Southern and Eastern Europe, pursues a structured approach to capture the long-term investment opportunity provided by these newly emerging markets. ANALYSIS. The SIT Emerging Markets Equity Portfolio returned 18.0% for the year ended February 28, 1997, outperforming its benchmark, the IFC Investable Index, which ended the period up 15.7%. Country allocation and stock selection contributed equally to performance over the past twelve months. ================================================================================ EMERGING MARKETS EQUITY ================================================================================ AVERAGE ANNUAL TOTAL RETURN 1 - -------------------------------------------------------------------------------- One Annualized Year Inception Return to Date - -------------------------------------------------------------------------------- Emerging Markets Equity, Class A 18.02% 12.99% - -------------------------------------------------------------------------------- COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN THE SEI EMERGING MARKETS EQUITY PORTFOLIO, VERSUS THE IFC INVESTABLE COMPOSITE INDEX [LINE GRAPH] Emerging Markets Equity Portfolio, Class A IFC Investable Composite Index 10,000 10,000 10,138 9,871 10,830 11,203 12,782 12,985 1 FOR THE PERIOD ENDED FEBRUARY 28, 1997. PAST PERFORMANCE IS NO INDICATION OF FUTURE PERFORMANCE. CLASS A SHARES WERE OFFERED BEGINNING JANUARY 17, 1995. Over the past year, the Portfolio underwent significant change through a transition from a single global emerging markets manager to a multi-manager regional structure in September, 1996. The change in strategy resulted from extensive research by SEI into the sources of return and risk in the emerging markets. The enhancement to the Portfolio included specialist managers covering Latin America, Asia and South Africa as well as separate strategy for the smallest, newly emerging economies. For the year, performance was enhanced by our strategic country weightings, emphasizing the smaller, faster-growing emerging markets at the expense of the larger, nearly-developed markets. For example, the Portfolio maintained a 7% weighting to South Africa, compared to the 14% within the IFC Investable Index which 6 contributed approximately 1.5% for the year. Reduced weighting in South Africa and other large markets were redirected to smaller markets, which rose 39% as a group over the past twelve months. Consistent with our policies for investing in emerging markets, we will remain underweight to the South African market, in favor of better opportunities for investors among the smaller, faster growing emerging economies. Shorter-term, tactical country decisions within Latin America also added value over the year; in particular, an overweight to the Brazilian market. The Portfolio maintained a 15% position on average over the past twelve months to Brazil, compared with 11% in the benchmark, contributing 1.2% to performance. We remain bullish on the Brazilian market and view it as the engine of growth within the Latin American region. Much of this position was funded through a reduced weighting to Mexico over this time period as the instability of the peso and political uncertainty raised questions about the market's prospects. Stock selection within Latin America also added to performance over the past year. The Portfolio's overweight to the telecommunication and utility sectors within Brazil contributed positively to performance, as did our position in CTC, the largest telecommunications provider in Chile. Within the Asian region, country allocation detracted from performance over the year. In particular, the Portfolio's overweight to Thailand and underweight to Taiwan. These two markets also represent the two largest changes in country allocation over the past twelve months. The Portfolio was initially overweight to the Thai market, however, with the inclusion of an Asian specialist manager last Fall, the position was aggressively reduced to an underweighting. The Portfolio's underweight to Taiwan cost 80 basis points over the year; the Portfolio was almost 2% underweight in the Taiwanese market on average over the past twelve months. The Taiwanese market ended the past year up over 60%, due to an improving economy and increased liquidity flows into in the equity market. We remain underweight in the Taiwan market, mainly due to the more attractive valuations in mainland China. Looking forward, we will continue to overweight Eastern Europe, Brazil and China relative to the IFC Investable index. We will also maintain our underweight to South Africa and Mexico. PORTFOLIO MARKET ALLOCATIONS VERSUS IFC INVESTABLE COMPOSITE INDEX FEBRUARY 28, 1997 FEBRUARY 29, 1996 -------------------- ------------------- PORTFOLIO IFCI PORTFOLIO IFCI ---------- ------ ---------- ------ Argentina 4.66% 3.74% 4.90% 3.48% Brazil 10.89% 12.39% 15.02% 10.54% Chile 3.04% 5.37% 3.02% 6.62% China 0.16% 0.62% 3.09% 0.52% Colombia 0.98% 1.09% 0.00% 0.92% Czech Republic 1.12% 0.47% 2.93% 0.78% Greece 3.81% 1.70% 0.71% 1.74% Hong Kong 0.94% 0.00% 0.00% 0.00% Hungary 1.21% 0.51% 0.22% 0.41% India 2.76% 1.97% 1.63% 2.38% Indonesia 4.78% 4.32% 2.96% 4.63% Jordan 0.00% 0.10% 0.00% 0.18% Korea 2.37% 2.08% 2.64% 2.78% Malaysia 16.26% 22.12% 15.61% 20.48% Mexico 6.66% 9.72% 13.96% 8.78% Pakistan 1.23% 0.66% 0.51% 0.89% Peru 2.06% 1.06% 2.50% 1.16% Philippines 4.00% 3.04% 3.30% 3.25% Poland 1.14% 0.86% 0.13% 0.61% Portugal 3.45% 1.81% 3.97% 1.44% S. Africa 8.73% 12.69% 7.71% 17.56% Sri Lanka 0.00% 0.05% 0.00% 0.07% Taiwan 5.44% 7.15% 1.66% 2.70% Thailand 2.31% 2.24% 4.13% 5.16% Turkey 3.88% 3.25% 1.63% 3.37% U.S. 0.76% 0.00% 0.00% 0.00% Venezuela 2.01% 0.86% 0.00% 0.28% Zimbabwe 0.00% 0.10% 0.00% 0.06% Cash 5.35% 0.00% 0.00% 0.00% ----- ----- ----- ----- 100% 100% 100% 100% ===== ===== ===== ===== 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FUND PERFORMANCE ================================================================================ SEI INTERNATIONAL TRUST -- FEBRUARY 28, 1997 INTERNATIONAL FIXED INCOME PORTFOLIO OBJECTIVES. The International Fixed Income Portfolio seeks to provide capital appreciation and current income through investments in high quality, non-U.S. dollar denominated government and corporate fixed income securities or debt obligations. The Portfolio also seeks to provide U.S.-based investors with a vehicle to diversify and enhance the returns of the domestic fixed income portion of their portfolios. The Portfolio invests primarily in high-quality, non-U.S. dollar denominated government obligations. There are no restrictions on the Portfolio's average maturity, although the duration is expected to range between one and nine years. STRATEGY. Portfolio construction entails a two-stage process which combines fundamental macroeconomic analysis and technical price analysis. First, a fundamental judgment is made about the direction of a market's interest rates and its currency. A technical price overlay is then applied to the fundamental position to ensure that the Portfolio is not substantially overweighted in a declining market or underweighted in a rising one. Country and currency allocations are made separately. As a result, the Portfolio's currency exposure may differ from its underlying bond holdings. Investment will generally be diversified across 6 to 12 countries with continual exposure to the three major trading blocs: North America, Europe, and the Pacific Basin. Depending upon the relative fundamental and technical views, each trading bloc is over or underweighted relative to the Portfolio's benchmark index. Currency exposure is actively managed to maximize return and control risk through the use of forward currency contracts and cross-currency hedging techniques. ANALYSIS: The International Fixed Income Portfolio gained 1.85% for the year ended February 28, 1997, outperforming the Salomon Brothers Non-U.S. Government Bond Index return of 0.64%. Prudent currency positions relative to the benchmark drove outperformance for the period. The peripheral European markets of Italy, Spain, and Sweden rallied throughout 1996 on optimism that these countries would be included in the first round of the European Monetary Union (EMU). The Portfolio's neutral to modestly underweight positions in these markets dampened relative performance throughout 1996. However, the underweight helped performance in early 1997 as concerns over a possible delay of the formation of EMU hurt the peripheral markets. While continental Europe was plagued with slow growth throughout the twelve-month period, the United Kingdom's economy surged. Healthy growth prompted the U.K. to raise interest rates, which further strengthened the British pound. The Portfolio's significant overweight to the pound during the fourth quarter of 1996 generated outperformance. Although the Japanese yen ended the twelve-month period nearly 13% lower versus the U.S. dollar, it was a bumpy decline that included periods of yen appreciation. Overweights to the yen in April and again in late February benefited returns as the yen spiked higher during those time periods. The weak Japanese economy buoyed bond prices, therefore slight underweights to Japanese bonds throughout most of the period detracted from returns. Modest hedging into the U.S. dollar enhanced results as a strong economy and relatively high U.S. yield levels strengthened the dollar. 8 ================================================================================ INTERNATIONAL FIXED INCOME AVERAGE ANNUAL TOTAL RETURN 1 ================================================================================ One Annualized Annualized Year 3 Year Inception Return Return to Date - -------------------------------------------------------------------------------- International Fixed Income, Class A 1.85% 7.97% 7.77% - -------------------------------------------------------------------------------- COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN THE SEI INTERNATIONAL FIXED INCOME PORTFOLIO, VERSUS THE SALOMON WGBI, NON-U.S., UNHEDGED [LINE GRAPH] Solomon WGBI, Non-U.S., Unhedged SEI International Fixed Portfolio, Class A 10,000 10,000 10,089 10,087 11,156 10,937 12,448 12,464 12,530 12,694 1 FOR THE PERIOD ENDED FEBRUARY 28, 1997. PAST PERFORMANCE IS NO INDICATION OF FUTURE PERFORMANCE. CLASS A SHARES WERE OFFERED BEGINNING SEPTEMBER 1, 1993. FUND CHARACTERISTICS VERSUS THE SALOMON NON-U.S. WORLD GOVERNMENT BOND INDEX (WGBI) PORTFOLIO BENCHMARK - -------------------------------------------------------------- Bond Currency Duration Bond/Currency Duration Country Weighting Weighting (Years) Weighting (Years) - -------------------------------------------------------------- Australia 1.08 1.33 5.68 1.42 4.51 Austria 0.00 0.00 0.00 1.32 4.27 Belgium 0.00 0.71 0.00 3.82 5.00 Canada 2.93 5.01 8.19 5.07 5.31 Denmark 2.98 3.82 8.41 2.31 4.84 Finland 1.15 1.14 6.72 0.76 4.40 France 13.50 -2.61 4.14 11.28 5.42 Germany 16.05 28.89 7.27 13.83 4.44 Italy 10.01 2.37 3.58 9.43 3.75 Japan 17.79 45.21 6.62 29.09 5.68 Netherlands 5.45 1.59 2.98 5.05 5.16 Norway 0.80 0.00 7.68 0.00 0.00 Spain 2.86 2.39 4.06 4.05 4.03 Sweden 1.46 1.00 4.70 2.43 4.54 Switzerland 0.00 -4.68 0.00 0.65 5.85 UK 9.38 12.62 6.99 9.09 6.12 USA 10.81 1.30 0.39 0.00 0.00 - -------------------------------------------------------------- 100% 100% -- 100% -- - -------------------------------------------------------------- 9 STATEMENT OF NET ASSETS ================================================================================ SEI INTERNATIONAL TRUST -- FEBRUARY 28, 1997 INTERNATIONAL EQUITY PORTFOLIO - -------------------------------------------------------------------------------- MARKET DESCRIPTION SHARES VALUE (000) - -------------------------------------------------------------------------------- FOREIGN COMMON STOCKS -- 93.8% AUSTRALIA -- 3.6% Amcor 48,000 $ 316 Australia & New Zealand Bank 269,984 1,686 Australian Resources 292,600 177 Bank of Melbourne 45,400 287 Boral 124,000 337 Brambles Industries 5,500 93 Broken Hill Proprietary 84,500 1,119 Capral Aluminum 204,600 705 Coles Myer 71,000 313 Commonwealth Bank of Australia 81,400 810 Consolidated Rutile 412,200 333 CRA 21,825 327 Foodland 251,900 1,213 Fosters Brewing 46,000 96 Futuris 64,890 91 General Property Trust 114,000 222 Goodman Fielder 140,000 170 Jupiters 107,600 232 Lend Lease 18,000 329 M.I.M. Holdings 138,000 192 Mayne Nickless 27,000 160 National Australia Bank 334,572 4,214 Newscorp 92,000 490 Pacific Magazines & Print 100,300 253 Pioneer 57,000 170 Qantas Airways 536,400 1,016 Qct Resouces 123,000 170 Rothmans Holdings 38,300 259 Simsmetal Limited 33,900 205 St. George Bank 145,938 873 Stockland Trust Group 49,500 127 Western Mining 79,025 498 Westpac Banking 182,807 1,036 Westpac Property Trust 155,500 215 Woodside Petroleum 35,000 237 -------- 18,971 -------- AUSTRIA -- 0.2% Brauerei Schwechat 3,700 142 Radex Heraklith 8,400 305 SCA Laakirchen 100 45 Strabag Oesterreich 1,200 70 Voest-Alpine Stahl* 7,700 306 -------- 868 -------- BELGIUM -- 0.9% Arbed 2,910 318 CMB 6,670 486 GIB 44,117 2,053 Kredietbank 2,490 901 Tractabel 2,060 894 -------- 4,652 -------- - -------------------------------------------------------------------------------- MARKET DESCRIPTION SHARES VALUE (000) - -------------------------------------------------------------------------------- CANADA -- 0.8% Canadian Imperial Bank 11,100 $ 539 Cascades 43,700 265 CCL Industries, Series B 10,200 119 Methanex* 27,500 270 National Bank Canada 68,200 789 Oshawa Group 23,300 349 Rio Alto Exploration* 29,700 184 Royal Bank of Canada 30,400 1,227 Stelco* 76,200 418 -------- 4,160 -------- DENMARK -- 0.9% Den Danske Bank 27,750 2,484 FIH, Series B 10,320 257 Kobenhavns Lufthavne 15,840 1,624 Monberg & Thorsen Holding 2,400 129 -------- 4,494 -------- FINLAND -- 0.2% Enso Oy, Series A 43,300 374 Finnair, Series 1 10,000 77 Metsa Serla, Series B 44,000 368 UPM-Kymmene 10,100 213 -------- 1,032 -------- FRANCE -- 8.2% AXA - UAP 39,000 2,597 Banque National Paris 12,350 561 Bazar de L'hotel de Ville 850 81 Bertrand Faure 9,100 454 Bic 3,650 592 Bollore Technologies 2,150 245 Bongrain 825 320 Bouygues 4,600 439 C.G.I.P. 3,200 913 CIC Union Europe 2,550 162 Club Mediterranee 900 69 Colas 1,950 270 Credit Commerce France 24,200 1,135 Credit Local de France 24,500 2,448 Credit National 11,200 737 Danone 7,400 1,123 De Dietrich et Compagnie 3,410 157 Ecia 550 95 Elf Aquitaine 19,800 1,895 Elf Gabon 300 81 Eridania Beghin Say 6,900 1,116 Fimalac 1,200 112 Fructivie 500 58 Gaumont 4,300 325 Generale des Eaux 19,815 2,759 Interbail 100 4 L'Oreal 4,900 1,661 La Rochette* 7,750 42 10 - -------------------------------------------------------------------------------- MARKET DESCRIPTION SHARES VALUE (000) - -------------------------------------------------------------------------------- Lafarge 28,915 $ 1,813 Legris Industries 4,000 190 LVMH Moet Hennessy 3,495 818 Marine Wendel 5,800 606 Michelin, Series B 23,800 1,491 Nord Est 400 11 Paribas 33,800 2,302 Parisienne de Rees 4,200 358 Pernod Ricard 14,850 811 Peugeot 18,900 2,091 Rhone Poulenc 53,000 1,861 Saint Gobain 7,950 1,173 Saint Louis-Bouchon 1,850 486 Sanofi 19,328 1,914 SAT 550 163 Scac Delmas Viel 521 105 Seita 9,100 348 SGE 4,100 95 Skis Rossignol 8,400 229 Societe Generale 11,350 1,315 Sommer Allibert 20,200 614 Total Compaigne, Series B 24,687 1,970 Union Assurances Federal 3,200 384 Valeo 14,100 951 Vallourec 7,850 464 -------- 43,014 -------- GERMANY -- 7.2% Aachener & Muenchener 493 257 Adidas AG 18,180 1,740 Agiv* 17,180 284 Andrea-Noris Zahn 2,510 905 BASF 119,700 4,417 Bayer 100,750 4,234 Bayer Vereinsbank 16,900 620 Bayerische Motoren Werke 4,328 2,912 BHF Bank 19,720 474 Binding Brauerei 300 83 CKAG Colonia Konzern 5,300 479 Continental 26,000 512 Daimler-Benz 7,300 530 DBV Holding 1,810 661 Deutche Pfandrbrief & Hypotheken Bank 9,320 408 Deutsche Telekom 113,650 2,183 DLW* 1,450 119 Dywidag 410 59 Felten & Guilleaume 1,100 118 Franfurter Hypothekenbank Centralboden 425 17 Gehe AG 10,000 678 Herlitz* 910 88 Holsten Brau 500 98 Industrie Werke Karls 1,200 276 Kabelmetall 1,050 101 - -------------------------------------------------------------------------------- MARKET DESCRIPTION SHARES VALUE (000) - -------------------------------------------------------------------------------- Kaufring* 820 $ 45 Kolbenschmidt AG* 7,300 115 Lehnkering 460 65 Lufthansa 123,000 1,640 Man 1,160 297 Mannesmann 4,700 1,859 Nuernberger BET 150 114 Papier Werke Waldhof 4,600 663 Phoenix 21,750 318 Salamander 960 112 Varta* 820 137 Veba 16,270 938 Viag 9,190 4,042 Viag AG New* 985 424 Volkswagen 9,590 4,667 Wuensche 1,500 100 -------- 37,789 -------- HONG KONG -- 5.7% Cathay Pacific Airways 675,000 1,050 Cheung Kong Holdings 148,000 1,414 China Light & Power 274,000 1,267 Dao Heng Bank Group 60,000 308 Guangdong Investment 328,000 320 Guoco Group 81,000 454 Hang Lung Development 619,000 1,247 Hang Seng Bank 50,000 578 Harbour Centre Development 43,000 64 Henderson Investment 191,000 215 Henderson Land Development 137,000 1,225 Hon Kwok Land Investment 534,000 195 Hong Kong & China Gas 166,000 315 Hong Kong Aircraft Engineering 84,800 269 Hong Kong Electric 547,000 1,893 Hong Kong Telecommunications 196,000 338 Hong Kong Telecommunications Warrants* 400,000 13 HSBC Holdings 308,290 7,525 Hutchison Whampoa 156,000 1,189 Hysan Development 87,000 300 Jardine International Motor 262,000 337 Kowloon Motor 194,600 391 Kumagai Gumi 392,400 448 Lai Sun Garment 290,000 423 Liu Chong Hing 177,000 221 New World Development 92,000 570 Oriental Overseas International 264,000 147 Peregrine Investment Holdings 489,000 894 Semi-Tech (Global) 66,000 77 Shun Tak Holdings 684,000 481 Sun Hung Kai Properties 92,200 1,066 Swire Pacific, Series A 375,000 3,221 Tai Cheung Holdings 285,000 258 Top Glory 1,700,000 334 Wharf Holdings 100,000 444 11 STATEMENT OF NET ASSETS ================================================================================ SEI INTERNATIONAL TRUST -- FEBRUARY 28, 1997 INTERNATIONAL EQUITY PORTFOLIO--CONTINUED - -------------------------------------------------------------------------------- MARKET DESCRIPTION SHARES VALUE (000) - -------------------------------------------------------------------------------- Wheelock 98,000 $ 263 Yue Yuen 949,500 389 -------- 30,143 -------- IRELAND -- 0.1% Anglo Irish Bank 115,200 154 Avonmore Food 56,700 197 Golden Vale 25,000 25 Hibernian Group 28,600 158 Irish Continental Group 13,200 120 -------- 654 -------- ITALY -- 3.7% Assicurazioni Generali 176,070 3,197 Banca di Roma* 1,498,100 1,100 Banca Popolare di Bergamo 37,600 558 Banca Popolare di Milano 83,900 459 Banca Popular di Brescia 59,400 311 Burgo (Cartiere) 131,300 602 Costa Crociere 83,000 184 Credito Bergamasco 52,000 777 Edison 325,000 1,786 ENI 353,243 1,743 Ericsson 6,400 82 Fiat 358,300 1,106 Italcementi 56,900 309 Milano Assicurazioni 32,500 90 Montedison* 3,285,300 2,371 Montefibre 95,000 58 Parmalat Finanziaria 743,100 1,022 SAI 38,900 326 SAI di Risp 47,600 174 Seat* 401,455 145 Sirti 104,600 648 Sorin Biomedica 26,900 96 Stet Soc Fin Telefonica 401,455 1,721 Toro Assicurazioni 26,600 330 Unipol 32,480 66 -------- 19,261 -------- JAPAN -- 23.9% Achilles 155,000 441 Aiya 33,000 378 Apollo Electronics 36,000 406 Asahi Bank 129,000 946 Asahi Broadcasting 1,400 124 Asatsu 31,000 831 Ashikaga Bank 235,000 786 Bank of Tokyo-Mitsubishi 112,000 1,840 Bank of Yokohama 176,000 844 Belc 12,000 139 Chiyoda Fire & Marine Insurance 145,000 613 Chuba Electric Power 65,000 1,148 Chubu Steel Plate 84,000 419 - -------------------------------------------------------------------------------- MARKET DESCRIPTION SHARES VALUE (000) - -------------------------------------------------------------------------------- Chubu Suisan 20,000 $ 87 Chugai Pharmaceutical 74,000 585 Chuo Warehouse 16,000 125 Comany 10,000 121 Computer Engineering & Consult 19,000 120 Dai Nippon Ink & Chemical 296,000 936 Dai Tokyo Fire & Marine Insurance 134,000 678 Dai-Ichi Kangyo Bank 189,000 2,070 Daido Metal 28,000 131 Daiei 112,000 741 Daiwa House Industries 330,000 3,668 Daiwa Securities 105,000 826 Danto 45,000 455 Data Communication Systems 7,000 131 Denyo 11,000 121 Dio Chemicals 22,000 137 East Japan Railway 303 1,292 Fanuc 27,900 868 Fuji Bank 55,000 643 Fuji Heavy Industries 154,000 735 Fuji Photo Film 218,000 7,306 Fujitsu Business Systems 38,000 807 Glory 43,000 763 Heiwa 50,000 693 Hitachi 234,000 2,019 Hitachi Information Systems 19,000 193 Hitachi Medical 58,000 775 Hokuriko Bank 61,000 210 Horiba 43,000 421 Horipro 23,000 200 Ichiken 63,000 231 Ichiyoshi Securities 46,000 145 Iino Kaiun* 137,000 391 Industrial Bank of Japan 93,040 1,111 Institute of General Education 17,000 126 Izumi Industries 18,000 88 Japan Energy 346,000 815 Japan Industrial Test 2,000 24 Japan Living Service 36,000 218 Japan Process Development 12,000 100 Japan Tobacco 188 1,263 Jastec 10,000 95 Joyo Bank 116,000 578 Kamigumi 104,000 549 Kansai Electric Power 66,400 1,206 Kentucky Fried Chicken Japan 35,000 479 Keyence 6,600 805 King Jim 43,000 745 Kobe Steel* 251,000 464 Kubota 179,000 815 KVK 13,000 96 Kyocera 10,000 593 Lilycolor 67,000 386 12 - -------------------------------------------------------------------------------- MARKET DESCRIPTION SHARES VALUE (000) - -------------------------------------------------------------------------------- Lion 158,000 $ 662 Long Term Credit Bank 325,000 1,173 Marukyo 24,000 263 Matsudo Kousan 24,000 213 Matsushita Electric 211,000 3,256 Matsushita Electric Works 155,000 1,363 Minebea 48,000 397 Mitsubishi Electric 485,000 2,728 Mitsubishi Heavy Industries 230,000 1,658 Mitsubishi Motor 161,000 1,182 Mitsubishi Oil 382,000 1,591 Mitsui Petrochem 155,000 712 Miura 33,000 411 Mizuno 52,000 325 Morita Fire Pump Manufacturing 95,000 410 NAC 800 12 Nakayamafuku 16,000 114 Namura Shipbuilding 135,000 403 Nanaboshi 13,000 143 NBC Industries 9,000 119 New Oji Paper 160,000 892 NIC 39,000 440 Nihon Decoluxe 12,000 139 Nikko Securities 50,000 290 Nintendo 49,700 3,508 Nippon Computer Systems 16,000 133 Nippon Hodo 22,000 178 Nippon Kanzai 13,000 264 Nippon Meat Packers 68,000 683 Nippon Shoji Kaisha 59,000 392 Nippon Steel 275,000 732 Nippon Telegraph & Telephone 159 1,133 Nippon Yusen Kabushiki Kaishi 219,000 854 Nippondenso* 29,000 558 Nishio Rent All 29,000 387 Nissan Motors 374,000 2,209 Nittetsu Mining 65,000 419 Nomura Securities 80,000 1,068 Ohishi Sangyo 18,000 139 Ohmoriya 12,000 143 Oie Sangyo 12,000 115 Ono Pharmaceutical 20,000 644 Osaka Gas 257,000 633 Paltac 32,000 218 Pioneer Electronics 98,000 1,894 Rengo 204,000 1,015 Ricoh Elemex 11,000 124 RKB Mainichi Broadcasting 17,000 118 Roki Techno 8,000 123 Roland 25,000 435 Royal Hotel 27,000 129 Ryobi Limited 137,000 461 Ryoyo Electro 27,000 403 Sagami Chain 31,200 388 Sakura Bank 418,000 2,673 - -------------------------------------------------------------------------------- MARKET DESCRIPTION SHARES VALUE (000) - -------------------------------------------------------------------------------- Sanko 11,000 $ 83 Sankyu Aluminium 201,000 665 Sanwa Bank 92,000 1,061 Sanyo Electric 276,000 1,152 Sanyo Special Steel 288,000 788 Seijo 18,100 285 Seino Transportation 71,000 707 Sekisui Chemical 148,000 1,535 Sekisui House 545,000 5,063 Sekisui House Hokuriku 28,000 228 Shaddy 24,000 275 Sharp 40,000 501 Shikoku Electric Power 67,000 1,162 Shimojima 15,000 286 Shinden 13,200 134 Showa Shell Sekiyo 95,000 710 SK Kaken 11,000 185 Sotoh 53,000 400 Spancrete 19,000 137 Sumitomo 120,000 903 Sumitomo Bank 75,000 946 Sumitomo Marine and Fire Insurance 196,000 1,135 Sun-Life 11,000 146 Takara Standard 50,000 374 Toin 18,000 130 Tokai Rika 56,000 419 Tokyo Electric Power 28,000 520 Tokyo Gas 373,000 950 Tokyo Steel 300 3 Toppan Printing 146,000 1,683 Toshiba 189,000 1,066 Toyo Ink 361,000 1,369 Toyo Trust & Banking 39,000 279 Toyota Motor 54,000 1,384 Trancom 10,000 61 Trusco Nakayama 1,700 25 Tsuba Nakashima 86,000 692 Tsudakoma 174,000 787 Tsutsumi Jewelry 18,100 378 Victor of Japan 117,000 1,116 Xebio 39,000 815 Yaizu Suisankagaku 18,700 275 Yakult Honsha 59,000 597 Yamanouchi Pharmaceutical 130,000 2,718 Yodogawa Steel Works 161,000 922 Yokohoma Rubber 205,000 842 Yonex 21,000 145 Yonkyu 8,000 133 -------- 125,334 -------- MALAYSIA -- 2.4% Angkasa Marketing 65,000 110 Arab Malaysian Finance 11,000 77 Austral Enterprises 352,000 808 13 STATEMENT OF NET ASSETS ================================================================================ SEI INTERNATIONAL TRUST -- FEBRUARY 28, 1997 INTERNATIONAL EQUITY PORTFOLIO--CONTINUED - -------------------------------------------------------------------------------- MARKET DESCRIPTION SHARES VALUE (000) - -------------------------------------------------------------------------------- Bandar Raya Developments 80,000 $ 118 Berjaya Sports 27,000 157 Bousted 151,000 404 Cement Industries 17,000 52 Datuk Keramat Holdings 182,000 353 DCB Holdings 69,000 277 Diversified Resource 45,000 174 Edaran Otomobil 132,000 1,356 Hong Leong Bank 50,000 182 Hume Industries 32,000 202 IGB 142,000 174 IJM 69,000 185 IOI Properties 99,000 179 Island & Penninsular 22,000 89 Jaya Taisa Holdings 35,000 192 Kentuckey Fried Chicken Malaysia 25,000 109 Kuala Lumpur Kepong Berhad 78,000 236 Kwong Yik Bank 45,000 181 Magnum 80,000 166 Malayan Banking 46,500 553 Malaysian Airline System 76,000 202 Malaysian International Shipping 171,000 451 Malaysian Pacific Industries 165,000 685 MBF Capital 450,000 924 Metroplex 154,000 210 Multi-Purpose Holdings 167,000 397 New Straits Times Press 33,000 210 Oriental Holdings 26,000 235 Pan Pacific Asia 31,000 96 Perusahaan Otomobil 30,000 198 Renong 111,000 202 Sime Darby 93,000 352 Sime Uep Properties 99,000 267 Sungei Way Holdings 23,600 68 TA Enterprise 321,000 509 Telekom Malaysia 15,000 121 Tenaga Nasionale 62,000 297 UMW Holdings Berhad 47,000 248 United Engineers 58,000 535 Westmont Berhad Industries 118,000 240 -------- 12,781 -------- NETHERLANDS -- 5.7% ABN-Amro Holdings 40,400 2,902 ACF Holdings 11,400 183 Aegon 27,713 1,839 Ahold 29,636 1,916 Beers 5,500 205 DSM 3,400 340 Elsevier 117,050 1,875 Eriks 600 46 European Vinyls 29,700 837 Hollandsche Beton Groep 2,200 484 - -------------------------------------------------------------------------------- MARKET DESCRIPTION SHARES VALUE (000) - -------------------------------------------------------------------------------- Hoogovens 12,000 $ 541 Ing Groep 127,476 4,938 KLM 29,700 911 Kondor Wessels 3,900 159 KPN 18,300 656 National Invest Bank 4,200 406 Nijverdal Tencate 7,400 353 NKF Holdings 5,200 141 Oce-Van Der Grinten 15,000 1,874 Polynorm 500 39 Royal Dutch Petroleum 19,900 3,446 Stad Rotterdam 9,479 413 Unilever 13,000 2,479 Van Ommeren 9,100 388 VNU 87,000 1,802 Volker Stevin 5,200 512 -------- 29,685 -------- NEW ZEALAND -- 0.7% Air New Zealand, Series B 27,127 71 Brierley Investment 225,000 217 Carter Holt Harvey 93,879 213 Fisher & Paykel Industries 106,607 409 Fletcher Challenge Building 33,700 101 Fletcher Challenge Energy 35,500 91 Fletcher Challenge Paper 437,051 863 Independent Newspaper 13,270 63 Lion Nathan 406,348 1,002 Telecom of New Zealand 101,064 454 -------- 3,484 -------- NORWAY -- 0.7% Den Norske Bank 155,409 693 Leif Hoegh & Company 7,500 145 Norske Skog 15,800 486 SAS Norge 25,536 254 Sparebanken Norway 11,900 368 Storebrand* 290,000 1,944 -------- 3,890 -------- SINGAPORE -- 1.9% Acma 186,000 420 Amtek Engineering 131,000 265 City Developments 195,000 1,929 Cycle & Carriage 97,000 1,021 DBS Land 77,000 300 Development Bank of Singapore 25,000 332 Fraser and Neave 22,000 198 Goldtron 237,000 165 Hai Sun Hup 70,000 52 Haw Par Brothers 62,000 144 Inchcape Berhad 20,000 70 14 - -------------------------------------------------------------------------------- MARKET DESCRIPTION SHARES VALUE (000) - -------------------------------------------------------------------------------- Industrial & Commercial Bank 62,000 $ 241 Keppel 29,000 210 Marco Polo Development 87,000 198 Natsteel 114,000 280 Overseas Chinese Banking 27,000 358 Overseas Union Bank 23,000 179 Overseas Union Enterprises 15,000 76 Pacific Carriers 235,000 178 Parkway Holdings 43,000 181 Republic Hotel and Resort 69,000 87 Singapore International Airlines 13,000 115 Singapore Press 15,880 310 Singapore Technologies Industrial 60,000 161 Ssangyong Cement 52,000 129 Straits Steamship Land 59,000 201 United Overseas Bank 29,824 339 Van Der Horst 124,000 513 Wing Tai Holdings 351,000 1,153 -------- 9,805 -------- SPAIN -- 2.7% Azucarera Espana 2,400 113 Banco de Santander 62,760 4,248 Dragados 28,700 435 Elec Reun Zaragoza 3,400 117 Empresa Nacional de Electricidad 31,000 1,893 Energia E Ind Aragonesas 26,900 162 Fomento de Construcciones Contratas 15,100 1,305 G.E.S.A 12,300 664 Hidroelectrica del Cantabrico, Series C 5,000 171 Iberdrola 25,000 273 Repsol 62,000 2,358 Tabacalera, Series A 11,200 507 Telefonica de Espana 65,900 1,517 Uniland 3,700 161 -------- 13,924 -------- SWEDEN -- 2.6% ASG, Series B 6,300 117 Astra, Series B 45,000 2,107 Bergman & Beving, Series B 5,000 160 Blylock & Nordsjofr, Series B 26,400 310 Catena, Series A 32,900 439 Marieberg Tidnings, Series A 6,600 183 Rottneros 113,800 133 SKF, Series B 59,200 1,414 Sparbanken Sverige, Series A 157,600 3,112 SSAB, Series B 11,700 199 Stora Kopparbergs, Series A 72,800 995 Svedala AB free 7,600 149 Swedish Match 641,700 2,286 - -------------------------------------------------------------------------------- MARKET DESCRIPTION SHARES VALUE (000) - -------------------------------------------------------------------------------- Trelleborg, Series B 38,800 $ 608 Trygg-Hansa, Series B 6,300 133 Volvo, Series B 56,600 1,419 -------- 13,764 -------- SWITZERLAND -- 5.3% Aare-Tessin 410 239 Adecco* 7,200 2,336 Baer Holding 900 986 Baloise 350 689 Banque Cantonale Vaud 1,120 276 BBC Brown Boveri 1,773 2,017 Bucher Holding 280 255 Ciba Specialty Rights* 2,381 151 Cie Financiere Richemont 510 717 Clariant 3,900 1,867 CS Holding* 44,970 4,801 Daetwyler Holding 160 280 EMS Chemie Holding 110 430 Internship Holding 370 191 Keramik Holding 210 107 Kw Laufenburg 850 156 Motor-Columbus 260 420 Nestle SA 480 523 Novartis* 2,381 2,725 Roche Holding 300 2,529 Swiss Bank 9,270 1,762 Union Bank of Switzerland* 2,070 1,863 Vontobel Holding 150 82 Winterthur 2,240 1,364 Zurich Versicherung 4,230 1,261 -------- 28,027 -------- UNITED KINGDOM -- 16.4% Abbey National 217,100 2,670 Albert Fisher Group 392,200 275 Alvis 60,000 128 Amec 152,200 297 Anglian Water 48,100 510 ASDA Group 1,751,800 3,187 Astec 73,500 174 Barclays Bank 97,000 1,751 Bass 48,000 668 BAT Industries 434,100 3,795 Blue Circle Industries 144,000 932 Bridon 32,500 62 British Aerospace 60,000 1,248 British Airport Authority 110,000 953 British Airways 115,000 1,181 British Petroleum 97,500 1,079 British Steel 321,300 787 British Telecommunications 339,000 2,348 British Vita 28,000 97 15 STATEMENT OF NET ASSETS ================================================================================ SEI INTERNATIONAL TRUST -- FEBRUARY 28, 1997 INTERNATIONAL EQUITY PORTFOLIO--CONCLUDED - -------------------------------------------------------------------------------- MARKET DESCRIPTION SHARES VALUE (000) - -------------------------------------------------------------------------------- BTP 41,600 $ 181 BTR 266,000 1,033 Bullough 64,900 117 Burn Stewart Distillers 23,000 26 Cadbury Schweppes 96,000 794 Charter 18,600 225 Commercial Union 60,500 673 Cowie Group 35,566 250 Crest Nicholson 86,000 127 Davis Service Group 46,600 194 Ed and F Man 71,600 229 Electron House 30,000 97 Energy Group* 52,930 451 General Accident 119,900 1,632 General Electric 146,000 885 Glaxo Wellcome 114,000 1,930 Grampian Holdings 17,000 35 Granada Group 87,000 1,287 Guardian Royal Exchange 279,400 1,260 Guinness 264,300 1,973 Hanson 66,162 298 Harrison & Crossfield 137,000 292 Hazlewood Foods 340,400 665 Heywood Williams 125,000 517 Hillsdown Holdings 286,100 887 HSBC Holdings 53,000 1,365 Hyder 57,500 778 Iceland Frozen Foods* 546,700 792 Kenwood Appliance 19,000 43 Kingfisher 198,600 2,189 Kwik Save Group 114,400 571 Lex Service 127,000 721 London & Manchester Group 30,800 219 London Electric 34,000 390 Marston Thompson 74,100 357 National Power 139,000 1,107 Next 119,000 1,153 Northern Ireland Electricity 29,700 184 Persimmon 44,200 184 Premier Cons Oil 197,900 124 Prudential 166,000 1,535 Reckitt & Coleman 96,000 1,243 Renold 77,800 295 Reuters Holdings 138,500 1,482 RJB Mining 237,700 1,552 Royal & Sun Alliance* 357,886 2,876 RTZ 51,000 778 Safeway 189,600 1,121 Scottish Hydro-Electric 78,000 451 Scottish Power 244,283 1,396 Sedgwick Group 552,300 1,142 Severn Trent 157,700 1,836 Shell Transportation & Trading 138,000 2,342 - -------------------------------------------------------------------------------- MARKET DESCRIPTION SHARES VALUE (000) - -------------------------------------------------------------------------------- South West Water 40,100 $ 450 Southern Electric 80,900 1,045 Stakis 323,400 569 Standard Chartered 73,000 1,000 Staveley Industries 23,200 67 T & N 561,400 1,476 Tarmac 225,400 376 Tate & Lyle 62,000 441 Tesco 223,800 1,235 Thames Water 125,400 1,405 Thorn 83,300 258 TI Group 94,250 813 TLG 117,000 226 Tomkins 200,000 923 Triplex Lloyd 41,000 129 TSB Lloyds Group 307,500 2,546 Unigate 99,500 739 United News & Media 84,250 971 United Utilities* 149,500 1,625 Vaux Group 42,400 197 Weir Group 192,000 651 Wessex Water 57,870 342 Whitecroft 12,100 32 Williams Holdings 180,500 939 Willis Corroon Group 134,000 333 Wolseley 95,000 731 Yorkshire Electric 13,900 202 -------- 86,147 -------- Total Foreign Common Stocks (Cost $479,767) 491,879 -------- FOREIGN PREFERRED STOCKS -- 0.8% AUSTRALIA -- 0.0% Newscorp 53,000 240 -------- AUSTRIA -- 0.2% Creditanstalt Bankverein 28,900 1,107 -------- GERMANY -- 0.6% Draegerwerk 3,200 46 Dyckerhoff 675 207 Escada 320 55 Krones 380 132 RWE 62,000 2,251 Villeroy and Boch 1,730 232 -------- 2,923 -------- Total Foreign Preferred Stocks (Cost $4,081) 4,270 -------- 16 - -------------------------------------------------------------------------------- FACE AMOUNT MARKET DESCRIPTION (000) (1) VALUE (000) - -------------------------------------------------------------------------------- FOREIGN CONVERTIBLE BOND -- 0.0% MALAYSIA -- 0.0% Multi-Purpose Holdings 3.000%, 12/31/01 167 $ 95 -------- Total Foreign Convertible Bond (Cost $67) 95 -------- U.S. TREASURY OBLIGATIONS -- 0.6% U.S. Treasury Bill 4.688%, 03/13/97 (2) 2,000 1,997 5.196%, 04/17/97 (2) 800 794 -------- Total U.S. Treasury Obligations (Cost $2,792) 2,791 -------- REPURCHASE AGREEMENTS -- 8.8% Morgan Stanley 5.30%, dated 02/28/97, matured 03/03/97, repurchase price $12,372,094 (collateralized by Federal Home Loan Bank Bond, 8.18%, due 10/17/11, par value $12,310,000, market value $12,721,747) (2) 12,367 12,367 State Street Bank 4.75%, dated 02/28/97, matured 03/03/97, repurchase price $33,920,421 (collateralized by U.S. Treasury Bonds, 7.50%, due 11/15/16, par value $31,905,000, market value $34,598,102) 33,907 33,907 -------- Total Repurchase Agreements (Cost $46,274) 46,274 -------- Total Investments -- 104.0% (Cost $532,981) 545,309 -------- Other Assets and Liabilities, Net -- (4.0%) (21,070) -------- NET ASSETS: Portfolio Shares of Class A (unlimited authorization -- no par value) based on 54,190,194 outstanding shares of beneficial interest 497,232 Portfolio Shares of Class D (unlimited authorization -- no par value) based on 18,503 outstanding shares of beneficial interest 184 Accumulated net realized gain on investments 13,142 - -------------------------------------------------------------------------------- MARKET DESCRIPTION SHARES VALUE (000) - -------------------------------------------------------------------------------- Net unrealized appreciation on forward foreign currency contracts, future contracts, foreign currency and translation of other assets and liabilities in foreign currency $ 43 Net unrealized appreciation on investments 12,328 Accumulated net investment income 1,310 -------- Total Net Assets--100.0% $524,239 ======== NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE -- CLASS A $9.67 ======== NET ASSET VALUE AND REDEMPTION PRICE PER SHARE -- CLASS D $9.58 ======== MAXIMUM OFFERING PRICE PER SHARE -- CLASS D ($9.58/95%) $10.08 ======== (1) IN LOCAL CURRENCY. (2) SECURITIES SEGREGATED TO COLLATERALIZE FUTURES CONTRACTS WITH AN AGGREGATE MARKET VALUE OF $15,157,747. * NON-INCOME PRODUCING SECURITY. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. EMERGING MARKETS EQUITY PORTFOLIO FOREIGN COMMON STOCKS -- 86.3% ARGENTINA -- 4.7% Astra Cia Argentina de Petroleo 880,040 $ 1,576 Banco Frances ADR 67,735 1,939 Cresud* 891,900 1,713 Irsa 250,250 906 Irsa ADR 2,777 100 Sidera 464,249 1,509 Telefonica Argentina ADR 87,400 2,764 -------- 10,507 -------- BRAZIL -- 1.8% Centrais Electricas GDS 144a* 870 120 Cia Saneamento Basico* 2,835,000 446 Cia Vale Rio Doce ADR 7,800 200 Elevasdores Atlas 8,800 90 Telebras 22,200,000 2,066 Telebras ADR 10,350 1,004 -------- 3,926 -------- CHILE -- 3.1% Compania de Telecom Chile ADR 123,927 3,625 Quimica y Minera Chile ADR 55,700 3,245 -------- 6,870 -------- 17 STATEMENT OF NET ASSETS ================================================================================ SEI INTERNATIONAL TRUST -- FEBRUARY 28, 1997 EMERGING MARKETS EQUITY PORTFOLIO--CONTINUED - -------------------------------------------------------------------------------- MARKET DESCRIPTION SHARES VALUE (000) - -------------------------------------------------------------------------------- CHINA -- 0.2% Shanghai Dajiang Group, Series B 178,000 $ 107 Shanghai Lujiazui Finance and Trade, Series B 239,540 196 Shanghai Yaohua Pilkington Glass, Series B* 140,000 59 -------- 362 -------- COLOMBIA -- 1.0% Banco Gandero ADR 37,700 1,155 Banco Industrial Colombiano ADR 26,000 471 Cementos Diamante GDR 26,100 350 Cementos Paz del Rio GDR* 7,300 91 Gran Cadena Almacenes GDR 14,600 142 -------- 2,209 -------- CZECH REPUBLIC -- 1.1% CEZ* 10,100 418 Chemopetrol Group 3,900 190 IPS Praha* 9,500 103 Komercni Banka 32,216 787 Skoda* 6,600 261 SPT Telecom* 5,900 766 -------- 2,525 -------- GREECE -- 3.9% Aegek 30,070 183 Aktor 6,440 100 Alpha Credit Bank 20,890 1,815 Aluminum Company of Greece 4,150 235 Attica Enterprises 20,775 152 Commercial Bank of Greece 12,960 523 Delta Dairy 11,240 146 Elais Oleaginous 4,970 143 Ergo Bank 16,789 988 Greek Telecom 26,720 585 Hellas Can Packaging 7,070 112 Hellenic Bottling 28,765 950 Hellenic Sugar Industry 10,860 88 Heracles General Cement 19,280 273 Intracom* 10,460 355 Ionian Bank 6,110 135 Michaniki 10,030 110 National Bank of Greece 8,558 878 Papastratos Cigarettes 12,940 256 Silver & Baryte Ores Mining 4,940 89 Titan Cement Company 7,230 486 -------- 8,602 -------- HONG KONG -- 1.0% Guangdong Electric Power Development, Series B 145,200 131 Guangdong Investment 1,000 1 - -------------------------------------------------------------------------------- MARKET DESCRIPTION SHARES VALUE (000) - -------------------------------------------------------------------------------- Guangshen Railway, Series H* 974,000 $ 472 GZI Transport* 13,539 8 GZI Transport Warrants* 1,907 -- Jilin Chemical Industrial, Series H 656,000 96 Kumagai Gumi 4,000 5 Maanshan Iron & Steel, Series H 1,180,000 277 Qingling Motors, Series H 666,000 404 Shanghai Haixin Shipping, Series H 734,000 78 Shanghai Petrochemical, Series H 1,144,000 325 Tsingtao Brewery, Series H 236,000 94 Yizheng Chemical Fibre, Series H 952,000 223 -------- 2,114 -------- HUNGARY -- 1.2% Borsodchem* 7,500 278 Danubius Hotel* 6,690 214 Egis 6,450 382 Gedeon Richter 11,690 801 MOL 45,737 808 OTP Bank 11,104 237 -------- 2,720 -------- INDIA -- 2.8% Bajaj Auto GDR 13,900 505 BSES GDR* 65,900 1,390 EIH GDR 50,550 910 Grasim Industries GDR 33,700 511 Hindalco Industries GDR 32,900 877 Indian Hotels GDR 12,000 275 Indian Petrochemicals GDR 53,000 670 Ranbaxy Laboratories GDR 11,100 244 State Bank of India GDR* 34,100 682 Steel Authority of India GDR 18,000 162 -------- 6,226 -------- INDONESIA -- 4.9% Astra 201,000 688 Bank International Indonesia 508,000 424 Bank International Indonesia Rights* 260,000 141 Bank International Indonesia Warrants* 38,250 17 Ciputra Development 352,000 338 Citra Marga Nusaphala Persada 300,000 279 Daya Guna Samudera* 169,000 240 Gudang Garam 354,000 1,725 Hanjaya Mandala Sampoerna 48,000 238 Indah Kiat Pulp & Paper 448,000 332 Indofood Sukses Makmur 100,000 223 Indosat 146,500 414 Kawasan Industri Jababeka 275,666 328 18 - -------------------------------------------------------------------------------- MARKET DESCRIPTION SHARES VALUE (000) - -------------------------------------------------------------------------------- Lippo Bank 186,000 $ 217 Matahari Putra Prima 209,000 321 Mulia Industrindo 100 -- PT Telecom ADR 42,300 1,454 Reliance Industries GDR* 77,900 1,328 Semen Gresik 110,000 325 Telekomunikasi 877,000 1,528 Telekomunikasi Indonesia 24,000 42 Tjiwi Kimia 160,216 181 -------- 10,783 -------- MALAYSIA -- 16.6% AMMB Holdings 121,000 1,141 Bandar Raya Developments 700,000 1,032 Berjaya Sports 104,000 603 DCB Holdings 557,000 2,232 DCB Holdings Warrants* 144,000 273 Diversified Resource 481,000 1,860 Hong Leong Bank 352,000 1,283 Hume Industries 159,000 1,006 IJM 558,000 1,495 IOI Properties 1,051,000 1,897 Jaya Taisa Holdings 141,000 772 KFC 154,000 670 Kuala Lumpur Kepong Berhad 328,000 991 Kwong Yik Bank 228,000 918 Larut Consolidated 380,000 621 Magnum 461,000 956 Malayan Banking 356,000 4,230 Malaysian Assurance Alliance 94,000 591 Metacorp 17,000 51 Metroplex 653,000 889 New Straits Times Press 178,000 1,133 Oriental Holdings 88,000 794 Perusahaan Otomobil 175,000 1,156 Renong 515,000 938 Rothmans of Pall Mall 95,000 985 Sime Darby 450,000 1,704 Sime Uep Properties 411,000 1,109 Sungei Way Holdings 121,600 353 Telekom Malaysia 79,000 640 Tenaga Nasionale 202,000 968 UMW Holdings Berhad 210,000 1,108 United Engineers 250,000 2,306 -------- 36,705 -------- MEXICO -- 6.2% Bufete Industrial ADR* 38,000 779 Cemex 253,500 1,021 Cemex, Series B 257,400 1,131 Empresas la Maderna 271,800 1,427 Grupo Industria Alfa, Series A 610,899 3,491 Grupo Radio Centro ADR* 51,400 495 - -------------------------------------------------------------------------------- MARKET DESCRIPTION SHARES VALUE (000) - -------------------------------------------------------------------------------- Grupo Tribasa ADR* 50,000 $ 344 Hylsamex* 112,000 488 Industrias Penoles 467,000 2,145 Kimberly Clark, Series A 24,000 517 San Luis 216,100 1,300 Vitro ADR 67,100 554 -------- 13,692 -------- PAKISTAN -- 1.2% Adamjee Insurance 2,850 8 D.G. Khan Cement* 55,440 23 Engro Chemicals 46,040 210 Fauji Fertilizer 194,000 382 Hub Power* 838,800 834 ICI Pakistan* 518,500 354 Muslim Commercial Bank* 136,500 135 Pakistan State Oil 51,979 404 Pakistan Telecom New Vouchers* 454,000 339 Sui Southern Gas* 112,125 90 -------- 2,779 -------- PERU -- 2.1% Banco Wiese ADR 28,700 175 Buenaventura ADR* 42,300 825 Cerveceria Backus & Johnston, Series C 14,072 141 Compania de Minas Buenaventura, Series T 14,100 117 Credicorp 59,688 1,373 Telefoncia del Peru ADR 66,378 1,460 Telefonica del Peru, Series B 254,900 567 -------- 4,658 -------- PHILIPPINES -- 4.1% Ayala Land, Series B 200,000 240 Ayala, Series B 996,000 1,136 Bankard* 271,000 89 C & P Homes 1,792,750 920 DMCI Holdings* 272,000 202 Fil-Estate Land 265,000 217 Filinvest Land* 1,184,000 396 International Continer Terminal Services* 181,500 110 Manila Electric, Series B 124,400 989 Metropolitan Bank & Trust 39,700 1,102 Mondragon International Philippines* 320,000 140 Petron 972,000 388 Phil Commercial International Bank 26,500 385 Philippine Long Distance 8,820 518 Philippine Long Distance ADR 12,680 735 San Miguel, Series B 209,470 781 19 STATEMENT OF NET ASSETS ================================================================================ SEI INTERNATIONAL TRUST -- FEBRUARY 28, 1997 EMERGING MARKETS EQUITY PORTFOLIO--CONTINUED - -------------------------------------------------------------------------------- MARKET DESCRIPTION SHARES VALUE (000) - -------------------------------------------------------------------------------- SM Prime Holdings 2,035,000 $ 611 Universal Robina 146,000 74 -------- 9,033 -------- POLAND -- 1.2% Agros Holdings, Series C 3,610 97 Bank Inicjatyw Gospodarczych 80,840 122 Bank Przemyslowo-Handlowy 3,338 226 Bank Rozwoju Eksportu 6,141 215 Bank Slaski 4,723 544 Debica* 6,848 204 Elektrim 33,174 336 Gorazdze 3,220 96 Okocimskie Zaklady Piwowarskie* 10,078 67 Rolimpex 6,972 47 Stomil Olsztyn* 10,430 140 Wielkopolski Bank Kredytowy 34,128 282 Zaklady Metali 1,150 109 Zywiec 1,486 92 -------- 2,577 -------- PORTUGAL -- 3.5% Banco Comercial Portugues 91,658 1,317 Banco Espirito Santo 12,685 241 Benco Portugal de Invest 52,400 780 Banco Totta & Acores 10,080 150 Cimentos de Portugal 33,908 740 Jeronimo Martins & Filho 18,383 992 Modelo Continente 7,200 253 Mundial Confianca* 24,700 301 Portucel Industrial Empresa 23,526 141 Portugal Telecom 34,738 1,220 Semapa 13,400 270 Sonae Investimentos 24,875 791 Soporcel* 19,845 585 -------- 7,781 -------- SOUTH AFRICA -- 8.9% Amalgamated Banks of South Africa 50,000 318 Anglo American 16,800 1,060 Anglo American Gold Investment Company 6,900 544 Anglo American Investment Trust 21,500 761 Avmin* 104,600 459 Bonnita Holdings 336,248 263 C.G. Smith 105,000 610 Clinic Holdings 325,500 396 Compagnie Financiere Richemont* 46,100 638 De Beers Centenary* 26,900 934 Delta Electrical Industries* 46,600 128 Elandsrand Gold Mining* 18,600 96 Foodcorp 30,000 188 - -------------------------------------------------------------------------------- MARKET DESCRIPTION SHARES VALUE (000) - -------------------------------------------------------------------------------- Gencor* 246,500 $ 1,068 Gold Fields of South Africa 8,000 229 Housewares Group* 375,800 227 Investec Bank 10,000 313 Iscor 834,067 633 JCI* 64,000 697 Johnnies Industrial* 132,000 1,702 Liberty Life Association of Africa* 9,500 275 Malbak 78,000 376 Metropolitan Life 171,000 339 Mutual & Federal Insurance* 45,000 247 Nedcor 36,514 620 New Africa Investment, Series N* 494,961 354 Norwich Holdings* 164,000 327 Otk Holdings-Units* 517,000 652 Palabora Mining* 16,000 280 Randgold* 79,700 672 Rembrandt Group 83,400 860 Sasol 132,521 1,435 Siltek* 27,300 137 South African Breweries 11,000 329 Standard Bank* 10,000 408 Tiger Oats* 24,000 403 Western Areas Gold Mining 19,000 263 Wooltru* 91,000 466 -------- 19,707 -------- SOUTH KOREA -- 2.4% Cho Hung Bank 10,000 56 Dong-A Pharmaceuticals* 3,060 62 Dong-Ah Construction* 5,500 119 Dongah Tire* 1,428 101 Hyundai Engineering & Construction* 5,814 127 Jinro* 4,000 73 Korea Electric Power ADR 62,050 1,117 Korea Exchange Bank* 18,320 123 Korea Fund 109,000 1,662 Korea Mobile Telecom ADR* 30,900 382 L.G. Chemical* 9,000 98 LG Information & Communication* 1,000 84 Pohang Iron & Steel ADR* 39,000 761 Samsung Display Devices* 3,270 178 Samsung Electronics Non-voting GDS* 874 17 Samsung Electronics New 1/2 Non-voting GDS* 3,182 142 Samsung Fire & Marine Insurance 390 156 Seoul City Gas* 1,700 100 -------- 5,358 -------- TAIWAN -- 5.3% Accton Technology GDR* 40,000 304 Acer GDR* 77,000 855 20 - -------------------------------------------------------------------------------- MARKET DESCRIPTION SHARES VALUE (000) - -------------------------------------------------------------------------------- Advanced Semiconductor Engineering GDR 50,000 $ 644 Asia Cement GDR 36,000 684 China Steel GDR* 35,450 669 Lite-On Technology GDR* 54,000 1,323 President Enterprises GDR* 43,000 946 ROC Taiwan Fund* 175,300 2,104 Siliconware Precision GDR 54,000 869 Taiwan American Fund* 50,000 837 Taiwan Equity Fund* 64,000 728 Yageo GDR 144A* 81,380 997 Yageo GDR 10,000 123 Yang Ming Marine Transport GDR* 56,000 753 -------- 11,836 -------- THAILAND -- 2.4% Advanced Info Service 18,000 161 Bangkok Bank 88,200 777 Banpu Public 18,432 315 Electric Generating 124,010 314 Finance One Public 95,000 99 PTT Exploration 33,000 451 Shinawatra Computer Public 21,700 186 Siam Cement 14,000 374 Siam Commercial Bank 59,000 335 Siam Makro 62,000 280 Telecomasia* 688,000 1,249 Thai Engine Manufacturing 25,000 207 Thai Farmers Bank 77,000 455 Thai Farmers Bank Warrants* 26,138 16 -------- 5,219 -------- TURKEY -- 3.9% Akbank 6,734,813 1,178 Akcansa Cimento 1,700,000 273 Aktas Elektrik Ticaret 106,054 140 Arcelik 2,147,009 358 Brisa 324,399 169 Cukurova Elektrik 212,107 362 Ege Biracilik Ve Malt Sanayii 902,850 276 Erciyas Biracilik Ve Malt Sanayii 917,447 99 Eregli Demir Ve Celik Fabrikalari 2,165,843 375 Ihlas Gazetecil* 794,175 136 Koc Holdings 4,242,220 1,226 Migros 229,075 256 Netas 529,164 155 Otosan 331,273 194 Peg Profilo 1,030,814 111 Petkim Petrokimya 356,340 174 Petrol Ofisi 320,920 144 Tupras* 548,796 281 Turk Hava Yollari* 1,117,803 273 Turkiye Garanti Bankasi 7,635,842 684 - -------------------------------------------------------------------------------- MARKET DESCRIPTION SHARES VALUE (000) - -------------------------------------------------------------------------------- Turkiye Is Bankasi 4,229,408 $ 1,377 Yapi Ve Kredi Bankas 10,936,054 516 -------- 8,757 -------- UNITED STATES -- 0.8% Formosa Fund* 167 1,720 -------- VENEZUELA -- 2.0% Banco Provincial 219,392 387 CANTV ADR* 42,700 1,356 Electricdad de Caracas 1,841,000 2,014 Mavesa ADR 26,800 178 Sivensa ADR 73,100 228 Venezolana de Cementos 133,994 384 -------- 4,547 -------- Total Foreign Common Stocks (Cost $169,318) 191,213 -------- FOREIGN PREFERRED STOCKS -- 9.3% BRAZIL -- 9.3% Banco Bradesco 356,269,968 2,932 Cemig 47,400,000 1,895 Copel* 77,472,000 921 Electrobras, Series B 7,536,000 3,370 Lojas Renner 7,700,000 440 Petrol Brasileiros 13,414,000 2,668 Schulz 1,200,000 21 Telebras 9,009,000 873 Telemig, Series B 13,950,000 2,044 Telerj 8,310,232 1,210 Telesp 3,074,000 834 Uniao De Bancos Brasilias 56,770,000 2,269 Usiminas Gerais 826,000,000 951 Vale Rio Doce 8,352 219 -------- 20,647 -------- Total Foreign Preferred Stocks (Cost $14,136) 20,647 -------- FOREIGN CONVERTIBLE BONDS -- 0.8% MEXICO -- 0.6% Alfa 8.000%, 09/15/00 $1,120 1,333 -------- TAIWAN -- 0.2% Nanya Plastics 1.750%, 07/19/01 $ 390 448 -------- Total Foreign Convertible Bonds (Cost $1,621) 1,781 -------- 21 STATEMENT OF NET ASSETS ================================================================================ SEI INTERNATIONAL TRUST -- FEBRUARY 28, 1997 EMERGING MARKETS EQUITY PORTFOLIO--CONCLUDED - -------------------------------------------------------------------------------- FACE AMOUNT MARKET DESCRIPTION (000) VALUE (000) - -------------------------------------------------------------------------------- REPURCHASE AGREEMENTS -- 5.5% Morgan Stanley 5.30%, dated 02/28/97, matured 03/03/97, repurchase price $7,928,269 (collateralized by various U.S. Treasury Notes ranging in par value $800,000- $6,200,000, 5.00%-6.75%, 01/31/99- 06/30/99; total market value $8,402,737) $7,928 $ 7,928 State Street Bank 4.75%, dated 02/28/97, matured 03/03/97, repurchase price $4,124,632 (collateralized by U.S. Treasury Bonds, par value $3,885,000, 11/15/16, 7.50%, market value $4,214,565) 4,123 4,123 -------- Total Repurchase Agreements (Cost $12,051) 12,051 -------- Total Investments -- 101.9% (Cost $197,126) 225,692 -------- Other Assets and Liabilities, Net -- (1.9%) (4,218) -------- NET ASSETS: Portfolio Shares of Class A (unlimited authorization -- no par value) based on 17,210,088 outstanding shares of beneficial interest 193,658 Accumulated net realized loss on investments (376) Net unrealized appreciation on forward foreign currency contracts, foreign currency and translation of other assets and liabilities in foreign currency 11 Net unrealized appreciation on investments 28,566 Accumulated net investment loss (385) -------- Total Net Assets--100.0% $221,474 ======== NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE -- CLASS A $12.87 ======== * NON-INCOME PRODUCING SECURITY ADR -- AMERICAN DEPOSITORY RECEIPT ADS -- AMERICAN DEPOSITORY SHARE GDR -- GLOBAL DEPOSITORY RECEIPT GDS -- GLOBAL DEPOSITORY SHARE 144A -- RESTRICTED SECURITY THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. INTERNATIONAL FIXED INCOME PORTFOLIO - -------------------------------------------------------------------------------- FACE AMOUNT MARKET DESCRIPTION (000) (1) VALUE (000) - -------------------------------------------------------------------------------- FOREIGN BONDS -- 82.1% AUSTRALIA -- 1.0% Australian Government 10.000%, 10/15/07 1,403 $ 1,269 Queensland Treasury 8.000%, 08/14/01 953 760 -------- 2,029 -------- AUSTRIA -- 3.5% Republic of Austria 3.750%, 02/03/09 JY 778,000 7,043 -------- CANADA -- 2.7% Canadian Government 6.500%, 06/01/04 3,369 2,519 9.000%, 06/01/25 3,315 2,987 -------- 5,506 -------- DENMARK -- 2.8% Danish Mortgage 6.000%, 10/01/26 32,780 4,568 Kingdom of Denmark 8.000%, 03/15/06 3,185 554 7.000%, 11/10/24 3,200 486 -------- 5,608 -------- FINLAND -- 1.1% Government of Finland 7.250%, 04/18/06 10,000 2,171 -------- FRANCE -- 12.4% Government of France 8.125%, 05/25/99 49,830 9,572 5.500%, 04/25/04 64,710 11,731 Societe Nationale Chemins Franc 6.750%, 03/01/00 JY 420,000 4,074 -------- 25,377 -------- GERMANY -- 14.8% Bundesschatzanweisungen 5.250%, 02/25/98 9,680 5,845 Deutschland Republic 6.000%, 02/16/06 28,079 17,328 6.250%, 01/04/24 10,650 6,275 KFW International Finance 6.625%, 04/15/03 1,140 733 -------- 30,181 -------- ITALY -- 9.2% Italian Government 8.500%, 08/01/99 21,525,000 13,087 8.750%, 07/01/06 8,960,000 5,744 -------- 18,831 -------- 22 - -------------------------------------------------------------------------------- FACE AMOUNT MARKET DESCRIPTION (000) (1) VALUE (000) - -------------------------------------------------------------------------------- JAPAN -- 16.4% Asian Development Bank 5.000%, 02/05/03 500,000 $ 4,863 European Investment Bank 6.625%, 03/15/00 187,000 1,813 3.000%, 09/20/06 1,000,000 8,580 Export-Import Bank 4.375%, 10/01/03 946,000 8,956 Japanese Development Bank 2.875%, 12/20/06 600,000 5,080 World Bank 4.500%, 06/20/00 250,400 2,305 4.500%, 03/20/03 195,200 1,859 -------- 33,456 -------- NETHERLANDS -- 5.0% Kingdom of Netherlands 7.500%, 06/15/99 5,390 3,074 5.750%, 01/15/04 13,140 7,172 -------- 10,246 -------- NORWAY -- 0.7% Government of Norway 6.750%, 01/15/07 9,300 1,497 -------- SPAIN -- 2.6% Kingdom of Spain 11.300%, 01/15/02 641,520 5,382 -------- SWEDEN -- 1.3% Kingdom of Sweden 10.250%, 05/05/03 16,800 2,739 -------- UNITED KINGDOM -- 8.6% European Investment Bank 7.000%, 03/30/98 200 327 United Kingdom Treasury 8.000%, 12/07/00 3,490 5,893 9.000%, 08/06/12 6,110 11,409 -------- 17,629 -------- Total Foreign Bonds (Cost $175,197) 167,695 -------- U.S. TREASURY OBLIGATIONS -- 7.2% SHORT-TERM -- 6.9% U.S. Treasury Bill 5.066%, 05/01/97 3,022 2,996 5.172%, 07/03/97 730 717 5.113%, 08/07/97 10,580 10,340 -------- 14,053 -------- - -------------------------------------------------------------------------------- FACE AMOUNT MARKET DESCRIPTION (000) (1) VALUE (000) - -------------------------------------------------------------------------------- LONG-TERM --0.3% U.S. Treasury Note 5.875%, 10/31/98 400 $ 399 6.250%, 02/15/03 100 99 7.000%, 07/15/06 140 144 6.750%, 08/15/26 35 34 -------- 676 -------- Total U.S. Treasury Obligations (Cost $14,743) 14,729 -------- REPURCHASE AGREEMENT -- 2.8% State Street Bank 4.75%, dated 02/28/97, matured 03/03/97, repurchase price $5,608,219 (collateralized by U.S. Treasury Bond, par value $5,275,000, 11/15/16, 7.5%, market value $5,720,263) 5,606 5,606 -------- Total Repurchase Agreement (Cost $5,606) 5,606 -------- Total Investments -- 92.1% (Cost $195,546) 188,030 -------- Other Assets and Liabilities, Net -- 7.9% 16,189 -------- Total Net Assets -- 100.0% $204,219 ======== NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE -- CLASS A $10.53 ======== JY -- JAPANESE YEN (1) IN LOCAL CURRENCY UNLESS OTHERWISE INDICATED. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 23 STATEMENT OF ASSETS AND LIABILITIES (000) ================================================================================ FEBRUARY 28, 1997 ------------- INTERNATIONAL FIXED INCOME ------------- ASSETS: Investment securities (Cost $195,546) $188,030 Foreign currency (Cost $7,034) 7,035 Interest receivable 3,240 Investment securities sold 9,459 Unrealized gain on forward foreign currency contracts 1,407 Shares of beneficial interest sold 1,299 Other assets 8 ---------- Total Assets 210,478 ---------- LIABILITIES: Investment securities purchased 5,974 Shares of beneficial interest redeemed 50 Payable to affiliates 102 Other liabilities 133 ---------- Total Liabilities 6,259 ---------- Net Assets $204,219 ========== NET ASSETS: Portfolio shares of Class A (unlimited authorization -- no par value) based on 19,389,976 outstanding shares of beneficial interest 211,450 Accumulated net realized gain on investments 317 Net unrealized appreciation on forward foreign currency contracts, foreign currencies and translation of other assets and liabilities denominated in foreign currencies 1,279 Net unrealized depreciation on investments (7,516) Accumulated net investment loss (1,311) ---------- Net Assets $204,219 ========== NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE -- CLASS A $ 10.53 ========== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 24 STATEMENT OF OPERATIONS (000) ================================================================================ FOR THE YEAR ENDED FEBRUARY 28, 1997
------------- ------------ ------------- EMERGING INTERNATIONAL INTERNATIONAL MARKETS FIXED EQUITY EQUITY INCOME ------------- ------------ ------------- INVESTMENT INCOME: Dividends $11,090 $2,534 $ -- Interest 942 492 7,399 Less: Foreign Taxes Withheld (965) (158) (141) -------- -------- -------- Total Investment Income 11,067 2,868 7,258 -------- -------- -------- EXPENSES: Management fees 2,087 974 875 Less management fees waived (40) (249) (161) Investment advisory fees 2,336 1,570 434 Less investment advisory fees waived (223) (309) (72) Custodian/wire agent fees 619 771 156 Shareholder servicing fees 1,035 351 335 Less shareholder servicing fees waived (380) (351) (335) Professional fees 144 48 43 Registration & filing fees 59 37 60 Printing fees 108 35 53 Trustee fees 25 8 7 Pricing fees 28 14 16 Distribution fees 47 1 9 Amortization of deferred organization costs -- 3 12 Miscellaneous fees 85 20 23 -------- -------- -------- Total Expenses 5,930 2,923 1,455 -------- -------- -------- NET INVESTMENT INCOME/(LOSS) 5,137 (55) 5,803 -------- -------- -------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS: Net realized gain from: Security transactions 43,134 331 2,409 Futures contracts 9 -- -- In-kind redemption 4,240 -- -- Net realized loss on forward foreign currency contracts and foreign currency transactions (531) (457) (1,329) Net change in unrealized appreciation on forward foreign currency contracts, futures contracts, foreign currencies, and translation of other assets and liabilities denominated in foreign currencies 81 14 710 Net change in unrealized appreciation (depreciation) on investments (26,307) 27,462 (6,069) -------- -------- -------- NET INCREASE IN NET ASSETS FROM OPERATIONS $25,763 $27,295 $1,524 ======== ======== ========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 25 STATEMENT OF CHANGES IN NET ASSETS (000) ================================================================================ FOR THE YEARS ENDED FEBRUARY 28, 1997 AND FEBRUARY 29, 1996
---------------- ---------------- ---------------- EMERGING INTERNATIONAL INTERNATIONAL MARKETS FIXED EQUITY EQUITY INCOME ---------------- ---------------- ---------------- 1997 1996 1997 1996 1997 1996 ---------------- ---------------- ---------------- OPERATIONS: Net investment income (loss) $ 5,137 $ 4,107 $ (55) $ (70) $ 5,803 $ 2,910 Net realized gain from investment transactions 47,383 21,730 331 180 2,409 2,362 Net realized gain (loss) on forward foreign currency contracts and foreign currency transactions (531) (983) (457) (125) (1,329) 2,856 Net change in unrealized appreciation (depreciation) on forward foreign currency contracts, futures contracts, foreign currencies, and translation of other assets and liabilities denominated in foreign currencies 81 1,021 14 (2) 710 97 Net change in unrealized appreciation (depreciation) on investments (26,307) 24,496 27,462 1,050 (6,069) (2,509) ------- ------- ------- ------ ------- ------- Net increase in net assets from operations 25,763 50,371 27,295 1,033 1,524 5,716 ------- ------- ------- ------ ------- ------- DIVIDENDS DISTRIBUTED FROM: Net investment income: Class A (3,619) (5,932) (297) (11) (6,286) (6,969) Class D (1) (3) -- -- -- -- Net realized gains: Class A (37,589) (28,871) (121) (143) (1,238) (665) Class D (14) (17) -- -- -- -- ------- ------- ------- ------ ------- ------- Total dividends distributed (41,223) (34,823) (418) (154) (7,524) (7,634) ------- ------- ------- ------ ------- ------- CAPITAL SHARE TRANSACTIONS(1): Class A: Proceeds from shares issued in merger 150,364 -- -- -- -- -- Proceeds from shares issued 333,733 203,255 163,899 64,401 146,550 70,012 Shares issued in lieu of cash distributions 31,663 20,015 383 148 6,287 6,218 Cost of shares redeemed (277,258)(219,674) (36,866) (3,547) (26,936) (32,574) Cost of shares redeemed in-kind (46,630) -- -- -- -- -- ------- ------- ------- ------ ------- ------- Increase in net assets from Class A transactions 191,872 3,596 127,416 61,002 125,901 43,656 ------- ------- ------- ------ ------- ------- Class D: Proceeds from shares issued 183 146 -- -- -- -- Shares issued in lieu of cash distributions 15 19 -- -- -- -- Cost of shares redeemed (216) (18) -- -- -- -- ------- ------- ------- ------ ------- ------- Increase (decrease) in net assets from Class D transactions (18) 147 -- -- -- -- ------- ------- ------- ------ ------- ------- INCREASE IN NET ASSETS DERIVED FROM CAPITAL SHARE TRANSACTIONS 191,854 3,743 127,416 61,002 125,901 43,656 ------- ------- ------- ------ ------- ------- Net increase in net assets 176,394 19,291 154,293 61,881 119,901 41,738 NET ASSETS: Beginning of period 347,845 328,554 67,181 5,300 84,318 42,580 ------- ------- ------- ------ ------- ------- End of period $524,239 $347,845 $221,474 $67,181 $204,219 $84,318 ======= ======= ======= ====== ======= ======= (1) CAPITAL SHARE TRANSACTIONS: Class A: Shares issued in merger 14,954 -- -- -- -- -- Shares issued 32,925 20,144 14,081 5,959 13,451 6,081 Shares issued in lieu of cash distributions 3,215 2,037 34 1 570 559 Shares redeemed (27,199) (21,676) (3,052) (329) (2,464) (2,894) Shares redeemed in-kind (4,462) -- -- -- -- -- ------- ------- ------- ------ ------- ------- Total Class A transactions 19,433 505 11,063 5,631 11,557 3,746 ------- ------- ------- ------ ------- ------- Class D: Shares issued 18 15 -- -- -- -- Shares issued in lieu of cash distributions 1 2 -- -- -- -- Shares redeemed (21) (2) -- -- -- -- ------- ------- ------- ------ ------- ------- Total Class D transactions (2) 15 -- -- -- -- ------- ------- ------- ------ ------- ------- Net increase in capital shares 19,431 520 11,063 5,631 11,557 3,746 ======= ======= ======= ====== ======= =======
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 26 FINANCIAL HIGHLIGHTS ================================================================================ FOR THE PERIODS ENDED FEBRUARY 28, OR 29, FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
NET ASSET DISTRIBUTIONS DISTRIBUTIONS VALUE NET NET REALIZED AND FROM NET FROM NET ASSET NET ASSETS BEGINNING INVESTMENT UNREALIZED INVESTMENT REALIZED CAPITAL RETURN VALUE END TOTAL END OF OF PERIOD INCOME/(LOSS) GAINS/(LOSSES) INCOME (4) GAINS OF CAPITAL OF PERIOD RETURN PERIOD (000) - --------------------------------------------------------------------------------------------------------------------------- - -------------------- INTERNATIONAL EQUITY - -------------------- CLASS A 1997 $10.00 $ 0.09 $ 0.47 $(0.07) $(0.82) $ -- $ 9.67 5.70% $524,062 1996 9.59 0.14 1.45 (0.19) (0.99) -- 10.00 17.30 347,646 1995 11.00 0.15 (0.97) -- (0.59) -- 9.59 (7.67) 328,503 1994 8.93 0.13 2.05 (0.11) -- -- 11.00 24.44 503,498 1993 9.09 0.16 0.04 (0.36) -- -- 8.93 2.17 178,287 1992 9.56 0.19 (0.36) (0.30) -- -- 9.09 (1.63) 92,456 1991 9.62 0.18 (0.14) -- (0.01) $(0.09) 9.56 0.36 35,829 CLASS D 1997 $ 9.93 $ 0.05 $ 0.47 $(0.05) $(0.82) $ -- $ 9.58 5.39% $ 177 1996 9.56 0.04 1.50 (0.18) (0.99) -- 9.93 16.77 199 1995(1) 10.81 0.01 (0.67) -- (0.59) -- 9.56 (6.33) 51 - ----------------------- EMERGING MARKETS EQUITY - ----------------------- CLASS A 1997 $10.93 $ 0.01 $ 1.96 $(0.02) $(0.01) $ -- $12.87 18.02% $221,474 1996 10.27 (0.02) 0.72 -- (0.04) -- 10.93 6.83 67,181 1995(2) 10.00 0.01 0.26 -- -- -- 10.27 2.70 5,300 - -------------------------- INTERNATIONAL FIXED INCOME - -------------------------- CLASS A 1997 $10.77 $ 0.71 $(0.49) $(0.38) $(0.08) $ -- $10.53 1.85% $204,219 1996 10.42 0.58 0.89 (1.02) (0.10) -- 10.77 13.96 84,318 1995 10.23 0.43 0.40 (0.62) (0.02) -- 10.42 8.43 42,580 1994(3) 10.00 0.14 0.18 (0.09) -- -- 10.23 6.41 23,678 RATIO OF RATIO OF NET INVESTMENT RATIO OF EXPENSES INCOME/(LOSS) RATIO OF NET INVESTMENT TO AVERAGE TO AVERAGE EXPENSES INCOME/(LOSS) NET ASSETS NET ASSETS PORTFOLIO AVERAGE TO AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER COMMISSION NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE RATE+ - ------------------------------------------------------------------------------------ - -------------------- INTERNATIONAL EQUITY - -------------------- CLASS A 1997 1.28% 1.11% 1.42% 0.97% 117% $0.0172 1996 1.25 1.29 1.29 1.25 102 n/a 1995 1.19 1.30 1.21 1.28 64 n/a 1994 1.10 1.46 1.24 1.32 19 n/a 1993 1.10 1.80 1.53 1.37 23 n/a 1992 1.10 2.07 1.52 1.65 79 n/a 1991 1.10 3.52 1.64 2.98 14 n/a CLASS D 1997 1.55% 0.71% 1.65% 0.61% 117% $0.0172 1996 1.65 0.58 1.90 0.33 102 n/a 1995(1) 1.47 0.42 1.48 0.41 64 n/a - ----------------------- EMERGING MARKETS EQUITY - ----------------------- CLASS A 1997 1.95% (0.04)% 2.55% (0.64)% 100% $0.0004 1996 1.95 (0.23) 2.72 (1.00) 104 n/a 1995(2) 1.95 1.79 4.98 (1.24) -- n/a - -------------------------- INTERNATIONAL FIXED INCOME - -------------------------- CLASS A 1997 1.00% 3.99% 1.39% 3.60% 352% n/a 1996 1.00 4.70 1.27 4.43 269 n/a 1995 1.00 4.68 1.30 4.38 303 n/a 1994(3) 1.00 3.81 1.61 3.20 126 n/a (1) INTERNATIONAL EQUITY CLASS D SHARES WERE OFFERED BEGINNING MAY 1, 1994. ALL RATIOS FOR THAT PERIOD HAVE BEEN ANNUALIZED. (2) EMERGING MARKETS EQUITY CLASS A SHARES WERE OFFERED BEGINNING JANUARY 17, 1995. ALL RATIOS FOR THAT PERIOD HAVE BEEN ANNUALIZED. (3) INTERNATIONAL FIXED INCOME CLASS A SHARES WERE OFFERED BEGINNING SEPTEMBER 1, 1993. ALL RATIOS FOR THAT PERIOD HAVE BEEN ANNUALIZED. (4) DISTRIBUTIONS FROM NET INVESTMENT INCOME INCLUDE DISTRIBUTIONS OF CERTAIN FOREIGN CURRENCY GAINS AND LOSSES. + AVERAGE COMMISSION RATE PAID PER SHARE FOR SECURITY PURCHASES AND SALES DURING THE PERIOD. PRESENTATION OF THE RATE IS ONLY REQUIRED FOR EQUITY FUNDS FOR FISCAL YEARS BEGINNING AFTER SEPTEMBER 1, 1995.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 27 NOTES TO FINANCIAL STATEMENTS ================================================================================ SEI INTERNATIONAL TRUST -- FEBRUARY 28, 1997 1. ORGANIZATION SEI International Trust, (the "Trust") was organized as a Massachusetts business trust under a Declaration of Trust dated June 30, 1988. The operations of the Trust commenced on December 20, 1989. The Trust is registered under the Investment Company Act of 1940, as amended, as an open-end investment company with three portfolios: the International Equity Portfolio (formerly the Core International Equity Portfolio), the Emerging Markets Equity Portfolio and the International Fixed Income Portfolio (together the "Portfolios"). The Trust's prospectuses provide a description of each Funds investment objectives, policies, and strategies. The Trust is registered to offer Class A shares of each of the Portfolios and Class D shares of the International Equity Portfolio. 2. SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies consistently followed by the Portfolios in the preparation of the financial statements. The policies are in conformity with generally accepted accounting principles. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. SECURITY VALUATION -- Investment securities that are listed on a securities exchange for which market quotations are readily available are valued by an independent pricing service at the last quoted sales price for such securities, or if there is no such reported sale on the valuation date, at the most recent quoted bid price. Unlisted securities for which market quotations are readily available are valued at the most recent quoted bid price. Debt obligations with sixty days or less remaining until maturity are valued at amortized cost, which approximates market value. FEDERAL INCOME TAXES -- It is the intention of each Portfolio to continue to qualify as a regulated investment company and to distribute substantially all of its taxable income. Accordingly, no provision for Federal income taxes is required in the financial statements. The Portfolios may be subject to taxes imposed by countries in which they invest with respect to their investments in issuers existing or operating in such countries. Such taxes are generally based on income earned. The Portfolios accrue such taxes when the related income is earned. REPURCHASE AGREEMENTS -- Securities pledged as collateral for repurchase agreements are held by the custodian bank until maturity of the repurchase agreements. Provisions of the repurchase agreements and procedures adopted by the Trust require that the market value of the collateral, including accrued interest thereon, is sufficient in the event of default by the counterparty. The Portfolios may also invest in tri-party repurchase agreements. Securities held as collateral for tri-party repurchase agreements are maintained in a segregated account by the broker's custodian bank until maturity of the repurchase agreement. Provisions of the agreements require that the market value of the collateral, including accrued interest thereon, is sufficient in the event of default by the counterparty of the Portfolio. If the counterparty defaults and the value of the collateral declines or if the counterparty enters an insolvency proceeding, realization of the collateral by the Portfolio may be delayed or limited. FOREIGN CURRENCY TRANSLATION -- The books and records of the Portfolios are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on the following bases: (I) market value of investment securities, other assets and liabilities at the current rate of exchange; and (II) purchases and sales of investment securities, income and expenses at the relevant rates of exchange prevailing on the respective dates of such transactions. For foreign equity securities, the Portfolios do not isolate that portion of gains and losses on investment securities which is due to changes in the foreign exchange rates from that which is due to changes in market prices of such securities. The Portfolios do isolate the effect of fluctuations in foreign currency rates when determining the gain or loss upon sale or maturity of foreign currency denominated debt obligations for Federal income tax purposes. 28 The Portfolios report gains and losses on foreign currency related transactions as realized and unrealized gains and losses for financial reporting purposes, whereas such gains and losses are treated as ordinary income or loss for Federal income tax purposes. FORWARD FOREIGN CURRENCY CONTRACTS -- The Portfolios may enter into forward foreign currency contracts as hedges against either specific transactions, portfolio positions or anticipated portfolio positions. The aggregate principal amounts of the contracts are not recorded as the Portfolios do not intend to hold the contracts to maturity. All commitments are "marked-to-market" daily at the applicable foreign exchange rate, and any resulting unrealized gains or losses are recorded currently. The Portfolios realize gains and losses at the time forward contracts are extinguished. Unrealized gains or losses on outstanding positions in forward foreign currency contracts held at the close of the year are recognized as ordinary income or loss for federal income tax purposes. FUTURES CONTRACTS -- The International Equity Portfolio utilized futures contracts during the period ended February 28, 1997. The Portfolio's investment in these futures contracts is designed to enable the Portfolio to more closely approximate the performance of it's benchmark index. Initial margin deposits of cash or securities are made upon entering into futures contracts. The contracts are marked to market daily and the resulting changes in value are accounted for as unrealized gains and losses. Variation margin payments are paid or received, depending upon whether unrealized losses or gains are incurred. When the contract is closed, the Portfolio records a realized gain or loss equal to the difference between the proceeds from (or cost of) the closing transaction and the amount invested in the contract. Risks related to futures contracts include the possibility that there may not be a liquid market for the contracts, that the changes in the values of the contract may not directly correlate with changes in the values of the underlying securities, and that the counterparty to a contract may default on its obligation to perform. CLASSES -- Class-specific expenses, such as Shareholder Servicing for Class A and 12b-1 and Transfer Agent for Class D, are borne by that class. Income, expenses, and realized and unrealized gains/losses are allocated to the respective classes on the basis of relative daily net assets. EXPENSES -- Expenses that are directly related to one of the Portfolios are charged directly to that Portfolio. Other operating expenses of the Portfolios are prorated to the Portfolios on the basis of relative net assets. DISTRIBUTIONS -- Distributions from net investment income and net realized capital gains are determined in accordance with U.S. Federal income tax regulations, which may differ from those amounts determined under generally accepted accounting principles. These book/tax differences are either temporary or permanent in nature. To the extent these differences are permanent, they are charged or credited to paid in capital in the period that the difference arises. Accordingly, for the International Equity Portfolio, $5,074,000 was reclassified from accumulated net realized gain on investments to paid in capital, $297,000 was reclassified from paid in capital to undistributed net investment income, and $404,000 was reclassified from undistributed net investment income to paid in capital. Also, $2,170,000, $623,000 and $1,624,000 was reclassified from accumulated net realized gain on investments to undistributed net investment income in the International Equity, Emerging Markets Equity and International Fixed Income Portfolios, respectively. In addition, the following permanent differences primarily attributable to realized foreign exchange gains and losses, have been reclassified from accumulated net realized gain (loss) on foreign currency transactions to undistributed net investment income: (000) ---------- International Equity Portfolio $(531) Emerging Markets Equity Portfolio (457) International Fixed Income Portfolio (1,329) These reclassifications have no effect on net assets or net asset value per share. OTHER -- Security transactions are accounted for on the trade date of the security purchase or sale. Costs used in determining net realized capital gains and losses on the sale of investments securities are those of the specific securities sold. Purchase discounts and premiums on securities held by the Portfolios are accreted and amortized to maturity using the scientific interest method, which approxi- 29 NOTES TO FINANCIAL STATEMENTS (Continued) ================================================================================ SEI INTERNATIONAL TRUST -- FEBRUARY 28, 1997 mates the effective interest method. Dividend income is recognized on the ex-dividend date and interest income is recognized using the accrual method. 3. MANAGEMENT, INVESTMENT ADVISORY AND DISTRIBUTION AGREEMENTS SEI Fund Management (the "Manager") and the Trust are parties to a management agreement dated August 30, 1988, under which the Manager provides management, administrative and shareholder services to the Portfolio for an annual fee equal to .45% of the average daily net assets of the International Equity Portfolio, .60% of the average daily net assets of the International Fixed Income Portfolio, and .65% of the average daily net assets of the Emerging Markets Equity Portfolio. The Manager has voluntarily agreed to waive all or a portion of its fees and, if necessary, reimburse other operating expenses in order to limit the operating expenses of each Portfolio. SEI Financial Management Corporation ("SFM") acts as the investment advisor for the International Equity and the Emerging Markets Equity Portfolios. Under the Investment Advisory Agreement, SFM receives an annual fee of .505% of the average daily net assets of the International Equity Portfolio and 1.05% of the average daily net assets of the Emerging Markets Equity Portfolio. Pursuant to Sub-Advisory Agreements with SFM, Acadian Asset Management, Inc., Farrell Wako Global Investment Management, Inc., Lazard London International Investment Management Limited, Seligman Henderson Co., Yamaichi Capital Management, Inc. and Yamaichi Capital Management (Singapore) Limited serve as Sub-Advisers to the International Equity Portfolio, and Parametric Portfolio Associates, Yamaichi Capital Management, Inc., Yamaichi Capital Management (Singapore) Limited, Montgomery Asset Management, L.P., and Coronation Asset Management (Proprietary) Limited, serve as Sub-Advisers to the Emerging Markets Equity Portfolio. Strategic Fixed Income, L.P., the adviser for the International Fixed Income Portfolio, is a party to an investment advisory agreement with the Trust dated June 15, 1993. Under the investment advisory agreement, Strategic Fixed Income, L.P., receives an annual fee of up to .30% of the average daily net assets of the Portfolio. Strategic Fixed Income, L.P., has voluntarily agreed to waive all or a portion of its fee, in conjunction with the Manager, in order to limit the total operating expenses of the Portfolio. SEI Financial Services Company (the "Distributor"), a wholly-owned subsidiary of SEI Investments and a registered broker-dealer, serves as each Portfolio's distributor pursuant to a distribution agreement with the Trust. Effective April 15, 1996, the Trust adopted a shareholder servicing plan ("the Class A Plans") pursuant to which a shareholder servicing fee of up to .25% of the average daily net assets attributable to the Class A shares are paid to the Distributor. Under the Class A Plan, the Distributor may perform, or may compensate other service providers for performing certain shareholder and administrative services. The International Equity Portfolio has adopted a distribution plan for its Class D shares (the "Class D Plan") pursuant to which a 12b-1 fee of up to .30% of the average daily net assets attributable to the Class D shares is paid to the Distributor. As of February 28, 1997, the Distributor was taking a fee under the Class D Plan of only .25% of the average daily net assets attributable to Class D shares. This payment may be used to compensate financial institutions that provide distribution-related services to their customers. Under both the Class A Plan and the Class D Plan, the Distributor may retain as profit any difference between the fee it receives and the amount it pays to third parties. In addition, Class D shares incur transfer agency fee of up to .15% of the average daily net assets. Class D is also subject to a 5% sales load on purchases of shares. Certain Officers and/or Trustees of the Trust are also Officers and/or Directors of the Manager. Compensation of Officers and affiliated Trustees is paid by the Manager. For the year ended February 28, 1997, the Portfolios paid commissions of $1,037,095 to affiliated broker-dealers. 4. ORGANIZATIONAL COSTS Organizational costs have been capitalized by the Portfolios and are being amortized using the straight line method over sixty months beginning with the commencement of operations. In the event any of the initial shares of a Portfolio acquired by the Manager are redeemed during the period that the Portfolio is amortizing its organizational costs, the redemption proceeds payable to the Manager by the Portfolio will be reduced by an amount equal to a pro-rata portion of the unamortized organizational costs. 30 5. FORWARD FOREIGN CURRENCY CONTRACTS The Portfolios enter into forward foreign currency exchange contracts as hedges against portfolio positions and anticipated portfolio positions. Such contracts, which are designed to protect the value of the Portfolio's investment securities against a decline in the value of the hedged currency, do not eliminate fluctuations in the underlying prices of the securities; they simply establish an exchange rate at a future date. Also, although such contracts tend to minimize risk of loss due to a decline in the value of a hedged currency, at the same time they tend to limit any potential gain that might be realized should the value of such foreign currency increase. The following forward foreign currency contracts were outstanding at February 28, 1997: IN UNREALIZED MATURITY CONTRACTS TO EXCHANGE APPRECIATION DATES DELIVER/RECEIVE FOR (DEPRECIATION) - ---------------- --------------- -------- -------------- INTERNATIONAL FIXED INCOME PORTFOLIO: - ------------------------------------- FOREIGN CURRENCY SALES: 3/7/97 AD 48,292 $ 37,638 $ 138 3/7/97 CD 13,891,691 10,359,957 192,008 3/7/97-3/26/97 CH 99,900,775 70,049,749 2,204,423 3/7/97 DK 45,854,894 7,415,953 289,506 3/7/97-3/26/97 DM 126,458,664 77,009,372 2,020,174 3/7/97 FF 170,389,745 31,493,687 1,568,978 3/7/97-3/26/97 IT 81,399,998,771 50,542,247 2,417,418 3/7/97-3/26/97 JY 7,646,922,189 63,498,777 29,510 3/7/97-3/26/97 NG 25,867,701 14,363,204 724,585 3/7/97 NK 46,989,905 7,050,853 63,474 3/7/97 SK 34,997,649 4,917,298 248,161 3/7/97-3/26/97 SP 1,436,149,697 10,490,853 471,448 3/7/97 UK 41,599,952 67,843,570 123,177 ------------ ----------- $415,073,158 $10,353,000 ============ ----------- FOREIGN CURRENCY PURCHASES: 3/7/97 AD 780,424 $ 605,375 $ 657 3/7/97 BF 50,165,364 1,510,939 (69,589) 3/7/97 CD 18,810,147 14,062,856 (294,869) 3/7/97-3/26/97 CH 85,965,952 60,963,402 (2,576,018) 3/7/97 DK 58,754,830 9,434,592 (303,328) 3/4/97-3/26/97 DM 183,510,219 111,628,479 (2,823,960) 3/26/97 FF 13,084,524 2,315,845 (15,187) 3/7/97-3/26/97 IT 56,966,171,560 35,180,353 (1,495,885) 3/7/97-3/26/97 JY 13,380,588,076 110,995,555 108,069 3/7/97 NK 36,884,826 5,702,339 (217,581) 3/7/97 SK 28,013,035 3,823,748 (86,449) 3/7/97 SP 1,071,840,260 7,810,177 (332,008) 3/7/97-3/26/97 UK 42,020,948 69,238,856 (840,147) ------------ ----------- $433,272,516 $(8,946,295) ============ =========== CURRENCY LEGEND AD Australian Dollar IT Italian Lira BF Belgian Franc JY Japanese Yen CD Canadian Dollar NG Netherlands Guilder CH Swiss Frank NK Norwegian Krone DK Danish Kroner SK Swedish Krona DM German Mark SP Spanish Peseta FF French Franc UK British Pounds Sterling 6. INVESTMENT TRANSACTIONS The cost of security purchases and the proceeds from the sale of securities, other than short-term investments and U.S. government securities, during the period ended February 28, 1997, were as follows: PURCHASES SALES (000) (000) --------- -------- International Equity Portfolio $563,129 $517,597 Emerging Markets Equity Portfolio 211,171 140,900 International Fixed Income Portfolio 544,305 437,661 The International Fixed Income Portfolio purchased $9,556,104 and sold $9,348,372 in U.S. government securities, during the period ended February 28, 1997. For Federal income tax purposes, the cost of securities owned at February 28, 1997 and the net realized gains or losses on securities sold for the period then ended was not materially different from the amounts reported for financial reporting purposes. The aggregate gross unrealized appreciation and depreciation at February 28, 1997 for the Portfolios is as follows: NET APPRECIATED DEPRECIATED UNREALIZED SECURITIES SECURITIES APPRECIATION (000) (000) (000) ----------- ----------- ------------ International Equity Portfolio $49,068 $(36,740) $12,328 Emerging Markets Equity Portfolio 33,075 (4,509) 28,566 International Fixed Income Portfolio 211 (7,727) (7,516) Internal Revenue Code regulations permit the Fund to defer into its next fiscal year net realized losses incurred from each November 1 to the end of 31 NOTES TO FINANCIAL STATEMENTS (Concluded) ================================================================================ SEI INTERNATIONAL TRUST -- FEBRUARY 28, 1997 its fiscal year ("post-October losses"). From November 1, 1996 through February 28, 1997, the International Equity, Emerging Markets Equity and International Fixed Income Portfolios incurred net realized foreign currency exchange losses of $217,570, $116,203 and $1,586,983, respectively, which have been deferred to the fiscal year ending February 28, 1998. 7. FUTURES CONTRACTS The International Equity Portfolio had the following futures contracts open as of February 28, 1997: CONTRACT NUMBER OF TRADE SETTLEMENT UNREALIZED DESCRIPTION CONTRACTS PRICE MONTH GAIN/(LOSS) - ------------- --------- ----- ---------- ----------- IBEX 35 Index 20 5,464.50 March 1997 $(26,020) IBEX 35 Index 1 5,415.00 March 1997 (956) IBEX 35 Index 1 5,418.00 March 1997 (977) IBEX 35 Index 4 5,341.00 March 1997 (1,758) IBEX 35 Index 2 5,355.00 March 1997 (1,074) IBEX 35 Index 3 5,333.00 March 1997 (1,151) IBEX 35 Index 1 5,361.00 March 1997 (579) CAC 40 Index 3 2,609.50 March 1997 1,514 CAC 40 Index 5 2,637.13 March 1997 (2,326) CAC 40 Index 1 2,635.00 March 1997 (391) CAC 40 Index 8 2,582.00 March 1997 11,760 CAC 40 Index 2 2,563.50 March 1997 4,239 CAC 40 Index 2 2,572.00 March 1997 3,642 CAC 40 Index 1 2,612.63 March 1997 395 CAC 40 Index 2 2,622.63 March 1997 88 CAC 40 Index 1 2,637.13 March 1997 (465) DAX Index 1 3,196.00 March 1997 3,842 DAX Index 2 3,253.00 March 1997 931 DAX Index 1 3,258.00 March 1997 169 DAX Index 3 3,197.00 March 1997 11,348 DAX Index 1 3,175.00 March 1997 5,086 DAX Index 1 3,196.00 March 1997 3,842 DAX Index 1 3,245.00 March 1997 939 DAX Index 1 3,275.00 March 1997 (838) FT-SE 100 Index 1 4,294.00 March 1997 (377) FT-SE 100 Index 2 4,297.00 March 1997 (998) FT-SE 100 Index 1 4,320.00 March 1997 (1,437) FT-SE 100 Index 1 4,322.00 March 1997 (1,519) FT-SE 100 Index 1 4,323.00 March 1997 (1,560) FT-SE 100 Index 1 4,335.00 March 1997 (2,049) FT-SE 100 Index 5 4,328.00 March 1997 (8,818) FT-SE 100 Index 1 4,323.00 March 1997 (1,560) FT-SE 100 Index 2 4,314.00 March 1997 (2,385) FT-SE 100 Index 1 4,341.00 March 1997 (2,294) FT-SE 100 Index 1 4,328.00 March 1997 (1,764) FT-SE 100 Index 1 4,320.00 March 1997 (1,437) CONTRACT NUMBER OF TRADE SETTLEMENT UNREALIZED DESCRIPTION CONTRACTS PRICE MONTH GAIN/(LOSS) - ------------- --------- ----- ---------- ----------- Hang Seng Index 4 13,600.00 March 1997 (8,652) Hang Seng Index 3 13,060.00 March 1997 3,971 Hang Seng Index 1 13,450.00 March 1997 (1,194) Hang Seng Index 1 13,620.00 March 1997 (2,292) Hang Seng Index 1 13,440.00 March 1997 (1,130) Australia Ords Index 1 2,442.00 March 1997 (299) Australia Ords Index 2 2,445.00 March 1997 (714) Australia Ords Index 3 2,500.00 March 1997 (4,273) Australia Ords Index 4 2,486.00 March 1997 (4,611) Australia Ords Index 1 2,456.00 March 1997 (571) Australia Ords Index 1 2,481.00 March 1997 (1,056) Australia Ords Index 1 2,494.00 March 1997 (1,308) Australia Ords Index 1 2,465.00 March 1997 (745) Australia Ords Index 1 2,455.00 March 1997 (551) Nikkei 225 Index 6 18,140.00 March 1997 11,061 Nikkei 225 Index 4 18,100.00 March 1997 8,037 Nikkei 225 Index 4 17,890.00 March 1997 11,517 Nikkei 225 Index 11 18,700.00 March 1997 (5,241) Nikkei 225 Index 3 18,560.00 March 1997 311 Nikkei 225 Index 2 18,660.00 March 1997 (621) Nikkei 225 Index 12 18,800.00 March 1997 (10,689) Nikkei 225 Index 3 19,175.00 March 1997 (7,333) Nikkei 225 Index 2 19,160.00 March 1997 (4,764) Nikkei 225 Index 5 18,840.00 March 1997 (5,282) Nikkei 225 Index 2 18,990.00 March 1997 (3,356) --------- $(20,486) ========= 8. CONCENTRATION OF RISKS Each Portfolio invests in securities of foreign issuers in various countries. These investments may involve certain considerations and risks not typically associated with investments in the United States, as a result of, among other factors, the possibility of future political and economic developments and the level of governmental supervision and regulation of securities markets in the respective countries. The International Fixed Income Portfolio invests in debt securities, the market value of which may change in response to interest rate changes. Also, the ability of the issuers of debt securities held by the International Fixed Income Portfolio to meet its obligations may be affected by economic and political developments in a specific country, industry or region. 32 9. FUND MERGERS Effective March 25, 1996, all the assets and liabilities of the European Equity Portfolio and Pacific Basin Equity Portfolio were transferred to the International Equity Portfolio in a tax-free reorganization pursuant to a Reorganization Agreement approved by the shareholders. The net asset value of the European Equity and Pacific Basin Equity Portfolios of $81,709,082 and $68,655,364, respectively, which included unrealized appreciation on securities of $10,123,410 and $2,186,528, respectively, and unrealized depreciation in foreign currency of $2,170 and $329, were transferred to the International Equity Portfolio, in exchange for 8,126,302 and 6,828,057 shares respectively, of the International Equity Portfolio; those shares were then distributed to shareholders in liquidation of the European Equity and Pacific Basin Equity Portfolios. 33 REPORT OF INDEPENDENT ACCOUNTANTS ================================================================================ SEI INTERNATIONAL TRUST -- FEBRUARY 28, 1997 To the Shareholders and Trustees SEI International Trust In our opinion, the accompanying statements of net assets (and, for International Fixed Income Portfolio, the statement of assets and liabilities) and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of International Equity, Emerging Markets Equity and International Fixed Income Portfolios (constituting SEI International Trust, hereafter referred to as the "Trust") at February 28, 1997, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and the financial highlights for each of the periods presented, in conformity with generally accepted accounting principles. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Trust's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at February 28, 1997 by correspondence with the custodian and, with respect to unsettled securities transactions, the application of alternative auditing procedures, provide a reasonable basis for the opinion expressed above. PRICE WATERHOUSE LLP Philadelphia, PA April 9, 1997 34 SHAREHOLDERS VOTING RESULTS (UNAUDITED) ================================================================================ There was a special meeting scheduled for March 15, 1996 at which the shareholders of the International Equity Portfolio (the "Portfolio") voted on a series of proposals (the "Proposals"). The proposals and the results of the shareholder meeting are set forth below. PROPOSAL 1: To approve or disapprove the selection of Schroder Capital Management International Limited ("Schroder") as Investment Sub-Adviser for the Portfolio, and to approve or disapprove the Investment Sub-Advisory Agreement between SEI Financial Management Corporation ("SFM" or "Adviser") and Schroder relating to the Portfolio. SHARES VOTED ------------ For 17,659,400 Against 45,468 Abstain 167,635 Broker Non-Vote 0 PROPOSAL 2: To approve or disapprove the selection of Morgan Grenfell Investment Services Limited ("Morgan Grenfell") as Investment Sub-Adviser for the Portfolio, and to approve or disapprove the Investment Sub-Advisory Agreement between SFM and Morgan Grenfell relating to the Portfolio. SHARES VOTED ------------ For 17,677,064 Against 40,629 Abstain 154,810 Broker Non-Vote 0 PROPOSAL 3: To approve or disapprove an Amended Investment Sub-Advisory Agreement between SFM and Acadian Management, Inc. ("Acadian") which would increase the sub-advisory fee paid to Acadian by SFM. SHARES VOTED ------------ For 16,911,937 Against 389,829 Abstain 169,555 Broker Non-Vote 401,182 PROPOSAL 4: To approve or disapprove an Amended Investment Advisory Agreement between the Portfolio and SFM which would increase the advisory fee paid to SFM. SHARES VOTED ------------ For 16,873,568 Against 427,017 Abstain 170,736 Broker Non-Vote 401,182 There was a special meeting scheduled for March 15, 1996 at which the shareholders of the European Equity and Pacific Basin Equity Funds (the "Portfolios") voted on a proposal (the "Proposal"). The proposal and results of the shareholder meeting are set forth below. PROPOSAL 1: The approval or disapproval of an Agreement and Plan of Reorganization and Liquidation providing for (i) the transfer of substantially all of the assets and liabilities of the European Equity and the Pacific Basin Equity Portfolio to the International Equity Portfolio in exchange for Class A Shares of the International Equity Portfolio; (ii) the distribution of the International Equity Portfolio Shares so received to shareholders of the Pacific Basin Equity Portfolio; and (iii) the termination under state law of the Pacific Basin Equity Portfolio. European Equity Portfolio: SHARES VOTED ------------ For 3,063,788 Against 46,127 Abstain 50,364 Pacific Basin Equity Portfolio: SHARES VOTED ------------ For 3,582,944 Against 66,922 Abstain 49,330 35 SHAREHOLDERS VOTING RESULTS (CONTINUED) (UNAUDITED) ================================================================================ There was a special meeting scheduled for April 30, 1996 at which the shareholders of the International Fixed Income Portfolio (the "Portfolio") voted on a series of proposals ("the Proposals"). The meeting was adjourned until June 28, 1996, however, none of the Proposals passed due to a failure to reach quorum within 60 days of the meeting date. The Proposals and results of the shareholder meeting are set forth below. PROPOSAL 1: To eliminate the Portfolio's fundamental limitations concerning diversification and the acquisition of more than 10% of the outstanding voting securities of any one issuer. SHARES VOTED ------------ For 3,077,302 Against 511,516 Abstain 129,733 PROPOSAL 2: To amend the Portfolio's fundamental limitation concerning industry concentration. SHARES VOTED ------------ For 3,300,537 Against 264,782 Abstain 153,232 PROPOSAL 3: To amend the Portfolio's fundamental limitation concerning borrowing to enhance the Portfolio's ability to borrow money. SHARES VOTED ------------ For 3,253,043 Against 299,939 Abstain 165,569 PROPOSAL 4: To amend the Portfolio's fundamental limitation concerning making loans to enhance the Portfolio's ability to make loans. SHARES VOTED ------------ For 3,285,583 Against 296,625 Abstain 136,343 PROPOSAL 5: To reclassify the Portfolio's fundamental limitation concerning pledging assets as non-fundamental, and to amend certain language. SHARES VOTED ------------ For 3,292,908 Against 258,736 Abstain 166,908 PROPOSAL 6: To reclassify the Portfolio's fundamental limitation concerning investment in securities for the purpose of exercising control as non-fundamental. SHARES VOTED ------------ For 3,355,129 Against 219,874 Abstain 143,548 PROPOSAL 7: To amend the Portfolio's fundamental limitation concerning investment in real estate and commodities to clarify the Portfolio's ability to invest in commodities contracts relating to financial instruments. SHARES VOTED ------------ For 3,182,261 Against 404,927 Abstain 131,363 PROPOSAL 8: To reclassify the Portfolio's fundamental limitation concerning short sales and margin sales as non-fundamental, and to amend certain language. SHARES VOTED ------------ For 3,145,445 Against 438,897 Abstain 134,209 36 PROPOSAL 9: To reclassify the Portfolio's fundamental investment limitation concerning investment in securities of investment companies as non-fundamental, and to amend certain language. SHARES VOTED ------------ For 3,338,906 Against 242,612 Abstain 137,032 PROPOSAL 10: To amend the Portfolio's fundamental limitation concerning the issuance of senior securities to clarify the Portfolio's ability to issue senior securities. SHARES VOTED ------------ For 3,138,395 Against 446,834 Abstain 133,322 PROPOSAL 11: To reclassify the Portfolio's fundamental limitation concerning investment in securities of an issuer whose securities are owned by officers and trustees of the Trust as non-fundamental. SHARES VOTED ------------ For 3,040,487 Against 547,917 Abstain 130,147 PROPOSAL 12: To reclassify the Portfolio's fundamental limitation concerning investment of more than 5% of total assets in securities of companies with less than three years of operating history as non-fundamental. SHARES VOTED ------------ For 3,312,687 Against 281,404 Abstain 124,460 PROPOSAL 13: To reclassify the Portfolio's fundamental limitation concerning investment in restricted securities as non-fundamental, and to amend certain language. SHARES VOTED ------------ For 3,080,522 Against 503,929 Abstain 134,100 PROPOSAL 14: To authorize the Board of Trustees to appoint additional or replacement sub-advisers for the Portfolio without seeking approval of the Shareholders of the contracts pursuant to which such sub-advisers serve. SHARES VOTED ------------ For 3,361,475 Against 179,242 Abstain 177,834 PROPOSAL 15: To approve the selection of SFM as the Investment Adviser for the Portfolio, and to approve the Investment Advisory Agreement between the Trust, on behalf of the Portfolio, and SFM. SHARES VOTED ------------ For 3,469,393 Against 119,067 Abstain 130,091 PROPOSAL 16: To approve the selection of Strategic Fixed Income, L.P. ("Strategic") as an investment sub-adviser for the Portfolio, and to approve the form of investment sub-advisory agreement between SFM and Strategic. SHARES VOTED ------------ For 3,433,005 Against 122,045 Abstain 163,501 37 SHAREHOLDERS VOTING RESULTS (CONCLUDED) (UNAUDITED) ================================================================================ There was a special meeting scheduled for July 5, 1996 at which the shareholders of the SEI International Trust voted on a proposal to elect a new Board of Trustees. Due to a lack of quorum on July 5, 1996, the meeting was adjourned until August 14, 1996. The name of each Trustee elected at the meeting and the results of the Shareholder Vote are listed below. There are no additional trustees whose term of office continued after the meeting. PROPOSAL 1: To consider and act upon a proposal to elect a Board of Trustees. TRUSTEE SHARES SHARES - -------- ------ ------ VOTED WITHHELD ------ -------- "FOR" AUTHORITY ------ --------- Robert A Nesher 41,157,709 273,208 Frank E. Morris 41,160,705 270,212 William M. Doran 41,162,075 268,842 F. Wendell Gooch 41,163,507 267,410 James M. Storey 41,162,075 268,842 George J. Sullivan, Jr. 41,162,075 268,842 38 NOTICE TO SHAREHOLDERS (UNAUDITED) ================================================================================ SEI INTERNATIONAL TRUST -- FEBRUARY 28, 1997 For shareholders that do not have a February 28, 1997 taxable year end, this notice is for informational purposes only. For shareholders with a February 28, 1997 taxable year end, please consult your tax advisor as to the pertinence of this notice. For the fiscal year ended February 28, 1997 the Portfolios of the SEI International Trust are designating long term capital gains and qualifying dividend income with regard to distributions paid during the year as follows: (A) (B) LONG TERM ORDINARY CAPITAL GAINS INCOME TOTAL DISTRIBUTIONS DISTRIBUTIONS DISTRIBUTIONS PORTFOLIO (TAX BASIS) (TAX BASIS) (TAX BASIS) - ---------- ------------- ------------- ------------- International Equity 59% 41% 100% Emerging Markets Equity 1% 99% 100% International Fixed Income 2% 98% 100% (C) (D) (E) QUALIFYING TAX-EXEMPT FOREIGN PORTFOLIO DIVIDENDS(1) INTEREST TAX CREDIT - ---------- ------------ ---------- ---------- International Equity 0% 0% 40%(3) Emerging Markets Equity 0% 0% 40% International Fixed Income 0% 0% 0% (1) Qualifying dividends represent dividends which qualify for the corporate dividends received deduction. (2) See attached notice which details the per share amount of foreign taxes paid by country and the per share amount of each dividend that represents income derived from sources within each country. (3) This amount represents the Foreign Tax Credit for Class A. The Foreign Tax Credit for Class D is 59%. * Items (A) and (B) are based on the percentage of each fund's total distribution. ** Item (C) and (E)are based on the percentage of ordinary income of each fund. *** Item (D) is based on the percentage of gross income of each fund. 39 NOTICE TO SHAREHOLDERS (CONCLUDED) (UNAUDITED) ================================================================================ SEI INTERNATIONAL TRUST -- FEBRUARY 28, 1997 FOR TAXPAYERS FILING ON A CALENDAR YEAR BASIS, THIS NOTICE IS FOR INFORMATIONAL PURPOSES ONLY. The SEI International Trust International Equity Portfolio and Emerging Markets Equity Portfolio have made an election under Section 853 of the Internal Revenue Code (the "Code") to provide a foreign tax deduction or credit to their shareholders for the fiscal year ended February 28, 1997. The information provided below is pertinent to taxpayers who meet the following two criteria: 1) file a U.S. Federal Income Tax Return and 2) held shares of the Portfolio on the dividend record date of December 31, 1996 and satisfy the applicable requirements of the Code. The amount per share of income from and foreign taxes paid to each country is listed in the following schedules: INTERNATIONAL EQUITY PORTFOLIO CLASS A CLASS D GROSS FOREIGN GROSS FOREIGN COUNTRY DIVIDEND TAXES PAID DIVIDEND TAXES PAID Australia $0.0059 $0.0007 $0.0042 $0.0007 Austria 0.0004 0.0001 0.0003 0.0001 Belgium 0.0026 0.0007 0.0020 0.0007 Canada 0.0026 0.0008 0.0020 0.0008 Denmark 0.0005 0.0002 0.0004 0.0002 Finland 0.0004 0.0001 0.0003 0.0001 France 0.0086 0.0031 0.0068 0.0031 Germany 0.0049 0.0012 0.0037 0.0012 Hong Kong 0.0041 0.0000 0.0028 0.0000 Ireland 0.0000 0.0000 0.0000 0.0000 Italy 0.0021 0.0006 0.0016 0.0006 Japan 0.0121 0.0039 0.0094 0.0039 Malaysia 0.0023 0.0010 0.0018 0.0010 Netherlands 0.0074 0.0024 0.0059 0.0024 New Zealand 0.0014 0.0004 0.0011 0.0004 Norway 0.0013 0.0004 0.0010 0.0004 Singapore 0.0020 0.0009 0.0016 0.0009 Spain 0.0050 0.0015 0.0039 0.0015 Sweden 0.0017 0.0006 0.0013 0.0006 Switzerland 0.0023 0.0007 0.0018 0.0007 United Kingdom 0.0319 0.0103 0.0248 0.0103 United States 0.0046 0.0000 0.0031 0.0000 -------- ------- -------- ------- $0.1041 $0.0296 $0.0798 $0.0296 ======== ======= ======== ======= EMERGING MARKETS EQUITY PORTFOLIO GROSS FOREIGN COUNTRY DIVIDEND TAXES PAID Argentina $0.0004 $0.0000 Brazil 0.0060 0.0019 Czech Republic 0.0008 0.0002 Greece 0.0004 0.0000 Hong Kong 0.0003 0.0000 Hungary 0.0000 0.0000 Indonesia 0.0007 0.0004 Israel 0.0000 0.0000 Mexico 0.0011 0.0000 Malaysia 0.0044 0.0031 Peru 0.0002 0.0000 Philippines 0.0003 0.0002 Pakistan 0.0000 0.0000 Poland 0.0000 0.0000 Portugal 0.0008 0.0001 Thailand 0.0003 0.0001 Turkey 0.0001 0.0000 Venezuela 0.0000 0.0000 South Africa 0.0024 0.0009 Switzerland 0.0000 0.0000 United States 0.0068 0.0002 -------- -------- $0.0250 $0.0071 ======== ======== 40 NOTES NOTES NOTES ================================================================================ SEI INTERNATIONAL TRUST ================================================================================ ANNUAL REPORT ================================================================================ FEBRUARY 28, 1997 Robert A. Nesher CHAIRMAN TRUSTEES William M. Doran F. Wendell Gooch Frank E. Morris James M. Storey George J. Sullivan, Jr. OFFICERS David G. Lee PRESIDENT AND CHIEF EXECUTIVE OFFICER Mark E. Nagle CONTROLLER, CHIEF FINANCIAL OFFICER Marc H. Cahn VICE PRESIDENT, ASSISTANT SECRETARY Todd Cipperman VICE PRESIDENT, ASSISTANT SECRETARY Barbara A. Nugent VICE PRESIDENT, ASSISTANT SECRETARY Sandra K. Orlow VICE PRESIDENT, ASSISTANT SECRETARY Kevin P. Robins VICE PRESIDENT, ASSISTANT SECRETARY Kathryn L. Stanton VICE PRESIDENT, ASSISTANT SECRETARY Richard W. Grant SECRETARY INVESTMENT ADVISORS INTERNATIONAL EQUITY PORTFOLIO SEI Financial Management Corporation EMERGING MARKETS EQUITY PORTFOLIO SEI Financial Management Corporation INTERNATIONAL FIXED INCOME PORTFOLIO Strategic Fixed Income L.P. MANAGER AND SHAREHOLDER SERVICING AGENT SEI Fund Management DISTRIBUTOR SEI Financial Services Company INDEPENDENT ACCOUNTANTS Price Waterhouse LLP LEGAL COUNSEL Morgan, Lewis & Bockius LLP THIS ANNUAL REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF THE TRUST AND MUST BE PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS. SHARES OF THE SEI FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY BANK. THE SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC), THE FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENT AGENCY. INVESTMENT IN THE SHARES INVOLVES RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. SEI FINANCIAL SERVICES COMPANY, THE DISTRIBUTOR OF THE SEI FUNDS, IS NOT AFFILIATED WITH ANY BANK. FOR MORE INFORMATION CALL 1-800-DIAL-SEI/1-800-342-5734 [SEI LOGO] FINANCIAL SERVICES COMPANY Oaks, PA 19456-1100 800-DIAL-SEI/800-342-5734 SEI-F-018-06 -----END PRIVACY-ENHANCED MESSAGE-----