-----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, RIoi2nKdSNH1XIvNnND8S2KAzAO81fHRaxRQLeNcNVUntJ0gcUyYqRKF0VZ9hw7W VhNMOcWfbKxD5tkS16k8Dw== 0001047469-04-002177.txt : 20040129 0001047469-04-002177.hdr.sgml : 20040129 20040128204200 ACCESSION NUMBER: 0001047469-04-002177 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 21 FILED AS OF DATE: 20040129 EFFECTIVENESS DATE: 20040129 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SEI INSTITUTIONAL INTERNATIONAL TRUST CENTRAL INDEX KEY: 0000835597 STATE OF INCORPORATION: MA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1933 Act SEC FILE NUMBER: 033-22821 FILM NUMBER: 04550495 BUSINESS ADDRESS: STREET 1: SEI INVESTMENTS STREET 2: ONE FREEDOM VALLEY DRIVE CITY: OAKS STATE: PA ZIP: 19456 BUSINESS PHONE: 8003425734 MAIL ADDRESS: STREET 1: SEI INVESTMENTS ATTN: CAREN ROSCH STREET 2: 530 E SWEDESFORD RD CITY: WAYNE STATE: PA ZIP: 19087-1693 FORMER COMPANY: FORMER CONFORMED NAME: SEI INTERNATIONAL TRUST DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: SEI WEALTH MANAGEMENT TRUST DATE OF NAME CHANGE: 19900129 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SEI INSTITUTIONAL INTERNATIONAL TRUST CENTRAL INDEX KEY: 0000835597 STATE OF INCORPORATION: MA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1940 Act SEC FILE NUMBER: 811-05601 FILM NUMBER: 04550496 BUSINESS ADDRESS: STREET 1: SEI INVESTMENTS STREET 2: ONE FREEDOM VALLEY DRIVE CITY: OAKS STATE: PA ZIP: 19456 BUSINESS PHONE: 8003425734 MAIL ADDRESS: STREET 1: SEI INVESTMENTS ATTN: CAREN ROSCH STREET 2: 530 E SWEDESFORD RD CITY: WAYNE STATE: PA ZIP: 19087-1693 FORMER COMPANY: FORMER CONFORMED NAME: SEI INTERNATIONAL TRUST DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: SEI WEALTH MANAGEMENT TRUST DATE OF NAME CHANGE: 19900129 485BPOS 1 a2123004z485bpos.txt 485BPOS AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 28, 2004 FILE NO. 33-22821 FILE NO. 811-5601 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------- FORM N-1A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / / POST-EFFECTIVE AMENDMENT NO. 37 /X/ AND REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / / AMENDMENT NO. 38 /X/ ---------- SEI INSTITUTIONAL INTERNATIONAL TRUST (Formerly, "SEI International Trust") (Exact Name of Registrant as Specified in Charter) C/O CT CORPORATION 101 Federal Street Boston, Massachusetts 02110 (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, including Area Code (800) 342-5734 EDWARD D. LOUGHLIN c/o SEI Investments Company Oaks, Pennsylvania 19456 (Name and Address of Agent for Service) COPIES TO: Richard W. Grant, Esquire Thomas P. Lemke, Esquire Morgan, Lewis & Bockius LLP Morgan, Lewis & Bockius LLP 1701 Market Street 1111 Pennsylvania Avenue, N.W. Philadelphia, PA 19103 Washington, D.C. 20004 ---------- Title of Securities Being Registered. . .Units of Beneficial Interest ---------- It is proposed that this filing become effective (check appropriate box) / / Immediately upon filing pursuant to paragraph (b) /X/ On January 30, 2004 pursuant to paragraph (b) / / 60 days after filing pursuant to paragraph (a)(1) of Rule 485 / / On January 31, 2003 pursuant to paragraph (a)(1) of Rule 485 / / 75 days after filing pursuant to paragraph (a)(2) / / On [date] pursuant to paragraph (a)(2) If appropriate, check the following box: / / This post-effective Amendment designates a new effective date for a previously filed Post-Effective Amendment. ================================================================================ [GRAPHIC] SEI INVESTMENTS SEI INSTITUTIONAL INTERNATIONAL TRUST INTERNATIONAL EQUITY FUND EMERGING MARKETS EQUITY FUND INTERNATIONAL FIXED INCOME FUND EMERGING MARKETS DEBT FUND CLASS A PROSPECTUS AS OF JANUARY 31, 2004 THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. SEI INVESTMENTS / PROSPECTUS SEI INSTITUTIONAL INTERNATIONAL TRUST ABOUT THIS PROSPECTUS SEI Institutional International Trust is a mutual fund family that offers different classes of shares in separate investment portfolios (Funds). The Funds have individual investment goals and strategies and are designed primarily for institutional investors and financial institutions and their clients. This prospectus gives you important information about the Class A Shares of the International Equity, Emerging Markets Equity, International Fixed Income and Emerging Markets Debt Funds that you should know before investing. Please read this prospectus and keep it for future reference. This prospectus has been arranged into different sections so that you can easily review this important information. On the next page, there is some general information you should know about risk and return that is common to each Fund. For more detailed information about the Funds, please see: International Equity Fund 3 --------------------------------------------------------------------------------------- Emerging Markets Equity Fund 6 --------------------------------------------------------------------------------------- International Fixed Income Fund 9 --------------------------------------------------------------------------------------- Emerging Markets Debt Fund 12 --------------------------------------------------------------------------------------- More Information About Fund Investments 16 --------------------------------------------------------------------------------------- Investment Adviser and Sub-Advisers 16 --------------------------------------------------------------------------------------- Purchasing and Selling Fund Shares 19 --------------------------------------------------------------------------------------- Dividends, Distributions and Taxes 22 --------------------------------------------------------------------------------------- Financial Highlights 23 --------------------------------------------------------------------------------------- How to Obtain More Information About SEI Institutional International Trust Back Cover ---------------------------------------------------------------------------------------
1 GLOBAL ASSET ALLOCATION Each Fund has its own distinct risk and reward characteristics, investment objective, policies and strategies. In addition to managing the Funds, SEI Investments Management Corporation (SIMC) constructs and maintains global asset allocation strategies for certain clients, and these Funds are designed in part to implement those strategies. The degree to which an investor's portfolio is invested in the particular market segments and/or asset classes represented by these Funds varies, as does the investment risk/return potential represented by each Fund. The Funds, especially the Emerging Markets Equity and Emerging Markets Debt Funds, may have extremely volatile returns. Because of the historical lack of correlation among various asset classes, an investment in a portfolio of Funds representing a range of asset classes as part of a global asset allocation strategy may reduce the strategy's overall level of volatility. As a result, a global asset allocation strategy may reduce risk. In managing the Funds, SIMC focuses on four key principles: asset allocation, portfolio structure, the use of managers, and continuous portfolio management. Asset allocation across appropriate asset classes (represented by the Funds) is the central theme of SIMC's investment philosophy. SIMC seeks to reduce risk further by creating a portfolio that focuses on a specific asset class. SIMC then oversees a network of managers who invest the assets of these Funds in distinct segments of the market or class represented by each Fund. These managers adhere to distinct investment disciplines, with the goal of providing greater consistency and predictability of results, as well as broader diversification across and within asset classes. Finally, SIMC regularly rebalances to ensure that the appropriate mix of assets is constantly in place, and constantly monitors and evaluates managers for these Funds to ensure that they do not deviate from their stated investment philosophy or process. RISK/RETURN INFORMATION COMMON TO THE FUNDS Each Fund is a mutual fund. A mutual fund pools shareholders' money and, using professional investment managers, invests it in securities. Each Fund has its own investment goal and strategies for reaching that goal. Each Fund's assets are managed under the direction of SIMC and one or more Sub-Advisers who manage portions of the Funds' assets in a way that they believe will help the Funds achieve their goals. SIMC acts as "manager of managers" for the Funds, and attempts to ensure that the Sub-Advisers comply with the Funds' investment policies and guidelines. SIMC also recommends the appointment of additional or replacement Sub-Advisers to the Funds' Board. Still, investing in the Funds involves risks, and there is no guarantee that a Fund will achieve its goal. SIMC and the Sub-Advisers make judgments about the securities markets, the economy, and companies, but these judgments may not anticipate actual market movements or the impact of economic conditions on company performance. In fact, no matter how good a job SIMC and the Sub-Advisers do, you could lose money on your investment in a Fund, just as you could with other investments. A Fund share is not a bank deposit, and it is not insured or guaranteed by the FDIC or any other government agency. The value of your investment in a Fund is based on the market prices of the securities the Fund holds. These prices change daily due to economic and other events that affect securities markets generally, as well as those that affect particular companies and other issuers. These price movements, sometimes called volatility, may be greater or lesser depending on the types of securities a Fund owns and the markets in which they trade. The estimated level of volatility for each Fund is set forth in the Fund Summaries that follow. The effect on a Fund of a change in the value of a single security will depend on how widely the Fund diversifies its holdings. 2 INTERNATIONAL INVESTING Investing in issuers located in foreign countries poses distinct risks since political and economic events unique to a country or region will affect those markets and their issuers. These events will not necessarily affect the U.S. economy or similar issuers located in the United States. In addition, investments in foreign countries are generally denominated in a foreign currency. As a result, changes in the value of those currencies compared to the U.S. dollar may affect (positively or negatively) the value of a Fund's investments. These currency movements may happen separately from and in response to events that do not otherwise affect the value of the security in the issuer's home country. These various risks will be even greater for investments in emerging market countries since political turmoil and rapid changes in economic conditions are more likely to occur in these countries. 3 INTERNATIONAL EQUITY FUND FUND SUMMARY INVESTMENT GOAL: Long-term capital appreciation SHARE PRICE VOLATILITY: Medium to high PRINCIPAL INVESTMENT STRATEGY: Utilizing multiple sub-advisers, the Fund invests in equity securities of foreign companies INVESTMENT STRATEGY Under normal circumstances, the International Equity Fund will invest at least 80% of its net assets in equity securities. The Fund will invest primarily in common stocks and other equity securities of issuers of all capitalization ranges that are located in at least three countries other than the United States. The Fund will invest primarily in companies located in developed countries, but may also invest in companies located in emerging markets. The Fund uses a multi-manager approach, relying upon a number of Sub-Advisers with differing investment philosophies to manage portions of the Fund's portfolio under the general supervision of SIMC. WHAT ARE THE RISKS OF INVESTING IN THE FUND? Since it purchases equity securities, the Fund is subject to the risk that stock prices will fall over short or extended periods of time. Historically, the equity markets have moved in cycles, and the value of the Fund's securities may fluctuate drastically from day to day. Individual companies may report poor results or be negatively affected by industry and/or economic trends and developments. The prices of securities issued by such companies may suffer a decline in response. In the case of foreign stocks, these fluctuations will reflect international economic and political events, as well as changes in currency valuations relative to the U.S. dollar. These factors contribute to price volatility, which is the principal risk of investing in the Fund. Emerging market countries are countries that the World Bank or the United Nations considers to be emerging or developing. Emerging markets may be more likely to experience political turmoil or rapid changes in market or economic conditions than more developed countries. Emerging market countries often have less uniformity in accounting and reporting requirements and unreliable securities valuation. It is sometimes difficult to obtain and enforce court judgments in such countries and there is often a greater potential for nationalization and/or expropriation of assets by the government of an emerging market country. In addition, the financial stability of issuers (including governments) in emerging market countries may be more precarious than in other countries. As a result, there will tend to be an increased risk of price volatility associated with the Fund's investments in emerging market countries, which may be magnified by currency fluctuations relative to the U.S. dollar. The Fund is also subject to the risk that developed international equity securities may underperform other segments of the equity markets or the equity markets as a whole. 4 PERFORMANCE INFORMATION The bar chart and the performance table below illustrate the risks and volatility of an investment in the Fund. Of course, the Fund's past performance does not necessarily indicate how the Fund will perform in the future. This bar chart shows changes in the performance of the Fund's Class A Shares from year to year for ten years. The performance information shown is based on full calendar years. [CHART] 1994 -0.04% 1995 11.34% 1996 9.04% 1997 -1.86% 1998 19.29% 1999 39.63% 2000 -17.74% 2001 -22.55% 2002 -16.98% 2003 31.88%
BEST QUARTER: 20.88% (12/31/99) WORST QUARTER: -20.44% (09/30/02) This table compares the Fund's average annual total returns for Class A Shares for the periods ended December 31, 2003 to those of the Morgan Stanley Capital International (MSCI) EAFE Index.
SINCE INTERNATIONAL EQUITY FUND -- CLASS A SHARES 1 YEAR 5 YEARS 10 YEARS INCEPTION* - ----------------------------------------------------------------------------------------------------- Return Before Taxes 31.88% -0.52% 3.30% 3.41% - ----------------------------------------------------------------------------------------------------- Return After Taxes on Distributions** 31.95% -0.71% 2.20% 2.41% - ----------------------------------------------------------------------------------------------------- Return After Taxes on Distributions and Sale of Fund Shares** 21.21% -0.38% 2.34% 2.47% - ----------------------------------------------------------------------------------------------------- MSCI EAFE Index Return (reflects no deduction for fees, expenses, or taxes)*** 38.59% -0.05% 4.47% 3.17% - -----------------------------------------------------------------------------------------------------
* The inception date for the Fund's Class A Shares is December 20, 1989. Index returns shown from December 31, 1989. ** After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Your actual after-tax returns will depend on your tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. *** An index measures the market prices of a specific group of securities in a particular market or securities in a market sector. You cannot invest directly in an index. Unlike a mutual fund, an index does not have an investment adviser and does not pay any commissions or expenses. If an index had expenses, its performance would be lower. The MSCI EAFE Index is a widely-recognized, capitalization-weighted (companies with larger market capitalizations have more influence than those with smaller capitalizations) index of 1,010 securities listed on the stock exchanges of developed market countries in Europe, Australasia and the Far East. 5 FUND FEES AND EXPENSES This table describes the fees and expenses that you may pay if you buy and hold Fund shares. ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS) CLASS A SHARES - ------------------------------------------------------------------------------------ Investment Advisory Fees 0.51% - ------------------------------------------------------------------------------------ Distribution (12b-1) Fees None - ------------------------------------------------------------------------------------ Other Expenses 0.81% ==================================================================================== Total Annual Fund Operating Expenses 1.32%* ====================================================================================
* The Fund's total actual annual fund operating expenses for the most recent fiscal year were less than the amount shown above because the Adviser waived a portion of the fees in order to keep total operating expenses, excluding interest expense, at a specified level. The Adviser may discontinue all or part of these waivers at any time. With these waivers, the Fund's actual total operating expenses were as follows: International Equity Fund -- Class A Shares 1.28% - ------------------------------------------------------------------------------------
For more information about these fees, see "Investment Adviser and Sub-Advisers" and "Distribution of Fund Shares." EXAMPLE This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and that you sell your shares at the end of the period. The Example also assumes that each year your investment has a 5% return, Fund operating expenses remain the same, and you reinvest all dividends and distributions. Although your actual costs and returns might be different, your approximate costs of investing $10,000 in the Fund would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS - -------------------------------------------------------------------------------------------------- International Equity Fund -- Class A Shares $ 134 $ 418 $ 723 $ 1,590 - --------------------------------------------------------------------------------------------------
6 EMERGING MARKETS EQUITY FUND FUND SUMMARY INVESTMENT GOAL: Capital appreciation SHARE PRICE VOLATILITY: Very high PRINCIPAL INVESTMENT STRATEGY: Utilizing multiple sub-advisers, the Fund invests in equity securities of emerging markets companies INVESTMENT STRATEGY Under normal circumstances, the Emerging Markets Equity Fund will invest at least 80% of its net assets in equity securities of emerging markets issuers. The Fund will invest primarily in common stocks and other equity securities of foreign companies located in emerging market countries. The Fund normally maintains investments in at least six emerging market countries, and does not invest more than 35% of its total assets in any one emerging market country. The Fund uses a multi-manager approach, relying upon a number of Sub-Advisers with differing investment philosophies to manage portions of the Fund's portfolio under the general supervision of SIMC. Due to its investment strategy, the Fund may buy and sell securities frequently. This may result in higher transaction costs and additional capital gains tax liabilities. WHAT ARE THE RISKS OF INVESTING IN THE FUND? Since it purchases equity securities, the Fund is subject to the risk that stock prices will fall over short or extended periods of time. Historically, the equity markets have moved in cycles, and the value of the Fund's securities may fluctuate drastically from day to day. Individual companies may report poor results or be negatively affected by industry and/or economic trends and developments. The prices of securities issued by such companies may suffer a decline in response. In the case of foreign stocks, these fluctuations will reflect international economic and political events, as well as changes in currency valuations relative to the U.S. dollar. These factors contribute to price volatility, which is the principal risk of investing in the Fund. Emerging market countries are countries that the World Bank or the United Nations considers to be emerging or developing. Emerging markets may be more likely to experience political turmoil or rapid changes in market or economic conditions than more developed countries. Emerging market countries often have less uniformity in accounting and reporting requirements and unreliable securities valuation. It is sometimes difficult to obtain and enforce court judgments in such countries and there is often a greater potential for nationalization and/or expropriation of assets by the government of an emerging market country. In addition, the financial stability of issuers (including governments) in emerging market countries may be more precarious than in other countries. As a result, there will tend to be an increased risk of price volatility associated with the Fund's investments in emerging market countries, which may be magnified by currency fluctuations relative to the U.S. dollar. The Fund is also subject to the risk that emerging market equity securities may underperform other segments of the equity markets or the equity markets as a whole. 7 PERFORMANCE INFORMATION The bar chart and the performance table below illustrate the risks and volatility of an investment in the Fund. Of course, the Fund's past performance does not necessarily indicate how the Fund will perform in the future. This bar chart shows changes in the performance of the Fund's Class A Shares from year to year for eight years. The performance information shown is based on full calendar years. [CHART] 1996 8.70% 1997 -9.12% 1998 -31.95% 1999 70.31% 2000 -34.47% 2001 -2.46% 2002 -7.99% 2003 49.05%
BEST QUARTER: 31.28% (12/31/99) WORST QUARTER: -27.41% (09/30/98) This table compares the Fund's average annual total returns for Class A Shares for the periods ended December 31, 2003 to those of the Morgan Stanley Capital International (MSCI) Emerging Markets Free Index.
SINCE EMERGING MARKETS EQUITY FUND -- CLASS A SHARES 1 YEAR 5 YEARS INCEPTION* - ------------------------------------------------------------------------------------------------------- Return Before Taxes 49.05% 8.34% 0.68% - ------------------------------------------------------------------------------------------------------- Return After Taxes on Distributions** 49.36% 8.43% 0.69% - ------------------------------------------------------------------------------------------------------- Return After Taxes on Distributions and Sale of Fund Shares** 32.31% 7.36% 0.62% - ------------------------------------------------------------------------------------------------------- MSCI Emerging Markets Free Index Return (reflects no deduction for fees, expenses, or taxes)*** 55.82% 10.51% 2.29% - -------------------------------------------------------------------------------------------------------
* The inception date for the Fund's Class A Shares is January 17, 1995. Index returns shown from January 31, 1995. ** After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Your actual after-tax returns will depend on your tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. *** An index measures the market prices of a specific group of securities in a particular market or securities in a market sector. You cannot invest directly in an index. Unlike a mutual fund, an index does not have an investment adviser and does not pay any commissions or expenses. If an index had expenses, its performance would be lower. The MSCI Emerging Markets Free Index is a widely-recognized, capitalization-weighted (companies with larger market capitalizations have more influence than those with smaller capitalizations) index of over 800 stocks from approximately 17 emerging market countries. 8 FUND FEES AND EXPENSES This table describes the fees and expenses that you may pay if you buy and hold Fund shares. ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS) CLASS A SHARES - ------------------------------------------------------------------------------------ Investment Advisory Fees 1.05% - ------------------------------------------------------------------------------------ Distribution (12b-1) Fees None - ------------------------------------------------------------------------------------ Other Expenses 1.09% ==================================================================================== Total Annual Fund Operating Expenses 2.14%* ====================================================================================
* The Fund's total actual annual fund operating expenses for the most recent fiscal year were less than the amount shown above because the Adviser waived a portion of the fees in order to keep total operating expenses, excluding interest expense, at a specified level. The Adviser may discontinue all or part of these waivers at any time. With these fee waivers, the Fund's actual total operating expenses were as follows: Emerging Markets Equity Fund -- Class A Shares 1.95% - -----------------------------------------------------------------------------------
For more information about these fees, see "Investment Adviser and Sub-Advisers" and "Distribution of Fund Shares." EXAMPLE This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and that you sell your shares at the end of the period. The Example also assumes that each year your investment has a 5% return, Fund operating expenses remain the same, and you reinvest all dividends and distributions. Although your actual costs and returns might be different, your approximate costs of investing $10,000 in the Fund would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS - --------------------------------------------------------------------------------------------------------- Emerging Markets Equity Fund -- Class A Shares $ 217 $ 670 $ 1,149 $ 2,472 - ---------------------------------------------------------------------------------------------------------
9 INTERNATIONAL FIXED INCOME FUND FUND SUMMARY INVESTMENT GOAL: Capital appreciation and current income SHARE PRICE VOLATILITY: High PRINCIPAL INVESTMENT STRATEGY: Utilizing a sub-adviser, the Fund invests in investment grade fixed income securities of foreign government and corporate issuers INVESTMENT STRATEGY Under normal circumstances, the International Fixed Income Fund will invest at least 80% of its net assets in fixed income securities. The Fund will invest primarily in investment grade foreign government and corporate fixed income securities, as well as foreign mortgage-backed and/or asset-backed fixed income securities, of issuers located in at least three countries other than the United States. In selecting investments for the Fund, the Sub-Adviser chooses investment grade securities issued by corporations and governments located in various developed foreign countries, looking for opportunities for capital appreciation and gain, as well as current income. The Fund's portfolio is not hedged against currency fluctuations relative to the U.S. dollar. There are no restrictions on the Fund's average portfolio maturity, or on the maturity of any specific security. Due to its investment strategy, the Fund may buy and sell securities frequently. This may result in higher transaction costs and additional capital gains tax liabilities. WHAT ARE THE RISKS OF INVESTING IN THE FUND? The prices of the Fund's fixed income securities respond to economic developments, particularly interest rate changes, as well as to perceptions about the creditworthiness of individual issuers, including governments and their agencies. Generally, the Fund's fixed income securities will decrease in value if interest rates rise and vice versa, and the volatility of lower-rated securities is even greater than that of higher-rated securities. Also, longer-term securities are generally more volatile, so the average maturity or duration of these securities affects risk. In the case of foreign securities, price fluctuations will reflect international economic and political events, as well as changes in currency valuations relative to the U.S. dollar. These factors contribute to price volatility, which is the principal risk of investing in the Fund. The Fund is non-diversified, which means that it may invest in the securities of relatively few issuers. As a result, the Fund may be more susceptible to a single adverse economic or political occurrence affecting one or more of these issuers, and may experience increased volatility due to its investments in those securities. The Fund is also subject to the risk that developed international fixed income securities may underperform other segments of the fixed income markets or the fixed income markets as a whole. 10 PERFORMANCE INFORMATION The bar chart and the performance table below illustrate the risks and volatility of an investment in the Fund. Of course, the Fund's past performance does not necessarily indicate how the Fund will perform in the future. This bar chart shows changes in the performance of the Fund's Class A Shares from year to year for ten years. The performance information shown is based on full calendar years. [CHART] 1994 3.58% 1995 22.13% 1996 4.69% 1997 -3.56% 1998 18.52% 1999 -6.69% 2000 -3.74% 2001 -5.25% 2002 19.54% 2003 18.00%
BEST QUARTER: 14.67% (03/31/95) WORST QUARTER: -5.88% (03/31/97) This table compares the Fund's average annual total returns for Class A Shares for the periods ended December 31, 2003 to those of the Lehman Global Aggregate Ex-U.S. Index.
SINCE INTERNATIONAL FIXED INCOME FUND -- CLASS A SHARES 1 YEAR 5 YEARS 10 YEARS INCEPTION* - ---------------------------------------------------------------------------------------------------------------- Return Before Taxes 18.00% 3.72% 6.15% 6.23% - ---------------------------------------------------------------------------------------------------------------- Return After Taxes on Distributions** 14.51% 2.40% 4.45% 4.58% - ---------------------------------------------------------------------------------------------------------------- Return After Taxes on Distributions and Sale of Fund Shares** 11.77% 2.37% 4.24% 4.34% - ---------------------------------------------------------------------------------------------------------------- Lehman Global Aggregate Ex-U.S. Index Return (reflects no deduction for fees, expenses, or taxes)*** 19.37% 4.26% 6.70% 6.55% - ----------------------------------------------------------------------------------------------------------------
* The inception date for the Fund's Class A Shares is September 1, 1993. Index returns shown from September 30, 1993. ** After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Your actual after-tax returns will depend on your tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. *** An index measures the market prices of a specific group of securities in a particular market or securities in a market sector. You cannot invest directly in an index. Unlike a mutual fund, an index does not have an investment adviser and does not pay any commissions or expenses. If an index had expenses, its performance would be lower. The Lehman Global Aggregate Ex-U.S. Index is an index of government, corporate, and collateralized bonds denominated in foreign currencies. 11 FUND FEES AND EXPENSES This table describes the fees and expenses that you may pay if you buy and hold Fund shares. ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS) CLASS A SHARES - ------------------------------------------------------------------------------------ Investment Advisory Fees 0.15% - ------------------------------------------------------------------------------------ Distribution (12b-1) Fees None - ------------------------------------------------------------------------------------ Other Expenses 0.91% ==================================================================================== Total Annual Fund Operating Expenses 1.06%* ====================================================================================
* The Fund's total actual annual fund operating expenses for the most recent fiscal year were less than the amount shown above because the Fund's distributor waived a portion of the fees in order to keep total operating expenses, excluding interest expense, at a specified level. The Fund's distributor may discontinue all or part of these waivers at any time. With these fee waivers, the Fund's actual total operating expenses were as follows: International Fixed Income Fund -- Class A Shares 1.00% - ------------------------------------------------------------------------------------
For more information about these fees, see "Investment Adviser and Sub-Advisers" and "Distribution of Fund Shares." EXAMPLE This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and that you sell your shares at the end of the period. The Example also assumes that each year your investment has a 5% return, Fund operating expenses remain the same, and you reinvest all dividends and distributions. Although your actual costs and returns might be different, your approximate costs of investing $10,000 in the Fund would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS - ------------------------------------------------------------------------------------------------------------ International Fixed Income Fund -- Class A Shares $ 108 $ 337 $ 585 $ 1,294 - ------------------------------------------------------------------------------------------------------------
12 EMERGING MARKETS DEBT FUND FUND SUMMARY INVESTMENT GOAL: Maximize total return SHARE PRICE VOLATILITY: High to very high PRINCIPAL INVESTMENT STRATEGY: Utilizing multiple sub-advisers, the Fund invests in U.S. dollar denominated debt securities of emerging markets issuers INVESTMENT STRATEGY Under normal circumstances, the Emerging Markets Debt Fund will invest at least 80% of its net assets in fixed income securities of emerging markets issuers. The Fund will invest primarily in U.S. dollar denominated debt securities of government, government-related and corporate issuers in emerging market countries, as well as entities organized to restructure the outstanding debt of such issuers. The Fund uses a multi-manager approach, relying upon a number of Sub-Advisers with differing investment philosophies to manage portions of the Fund's portfolio under the general supervision of SIMC. The Sub-Advisers will spread the Fund's holdings across a number of countries and industries to limit its exposure to a single emerging market economy. There are no restrictions on the Fund's average portfolio maturity, or on the maturity of any specific security. There is no minimum rating standard for the Fund's securities and the Fund's securities will generally be in the lower or lowest rating categories (including those below investment grade, commonly referred to as "junk bonds"). Due to its investment strategy, the Fund may buy and sell securities frequently. This may result in higher transaction costs and additional capital gains tax liabilities. WHAT ARE THE RISKS OF INVESTING IN THE FUND? The prices of the Fund's fixed income securities respond to economic developments, particularly interest rate changes, as well as to perceptions about the creditworthiness of individual issuers, including governments and their agencies. Generally, the Fund's fixed income securities will decrease in value if interest rates rise and vice versa, and the volatility of lower-rated securities is even greater than that of higher-rated securities. Also, longer-term securities are generally more volatile, so the average maturity or duration of these securities affects risk. In the case of foreign securities, price fluctuations will reflect international economic and political events, as well as changes in currency valuations relative to the U.S. dollar. These factors contribute to price volatility, which is the principal risk of investing in the Fund. "Junk bonds" involve greater risks of default or downgrade, and involve greater risk of price declines than investment grade securities due to actual or perceived changes in an issuer's creditworthiness. In addition, issuers of junk bonds may be more susceptible than other issuers to economic downturns. Junk bonds are subject to the risk that the issuer may not be able to pay interest or dividends and ultimately to repay principal upon maturity. Discontinuation of these payments could substantially adversely affect the market value of the security. The volatility of junk bonds, particularly those issued by foreign governments, is even greater since the prospects for repayment of principal and interest of many of these securities is speculative. Some may even be in default. As an incentive to invest in these risky securities, they tend to offer higher returns. 13 Emerging market countries are countries that the World Bank or the United Nations considers to be emerging or developing. Emerging markets may be more likely to experience political turmoil or rapid changes in market or economic conditions than more developed countries. Emerging market countries often have less uniformity in accounting and reporting requirements and unreliable securities valuation. It is sometimes difficult to obtain and enforce court judgments in such countries and there is often a greater potential for nationalization and/or expropriation of assets by the government of an emerging market country. In addition, the financial stability of issuers (including governments) in emerging market countries may be more precarious than in other countries. As a result, there will tend to be an increased risk of price volatility associated with the Fund's investments in emerging market countries. The foreign sovereign debt securities and "Brady Bonds" the Fund purchases involve specific risks, including the risks that: (i) the governmental entity that controls the repayment of sovereign debt may not be willing or able to repay the principal and/or interest when it becomes due, due to factors such as debt service burden, political constraints, cash flow problems and other national economic factors; (ii) governments may default on their debt securities, which may require holders of such securities to participate in debt rescheduling or additional lending to defaulting governments; and (iii) there is no bankruptcy proceeding by which defaulted sovereign debt may be collected in whole or in part. The Fund is non-diversified, which means that it may invest in the securities of relatively few issuers. As a result, the Fund may be more susceptible to a single adverse economic or political occurrence affecting one or more of these issuers, and may experience increased volatility due to its investments in those securities. The Fund is also subject to the risk that emerging market debt securities may underperform other segments of the fixed income markets or the fixed income markets as a whole. 14 PERFORMANCE INFORMATION The bar chart and the performance table below illustrate the risks and volatility of an investment in the Fund. Of course, the Fund's past performance does not necessarily indicate how the Fund will perform in the future. This bar chart shows changes in the performance of the Fund's Class A Shares from year to year for six years. The performance information shown is based on full calendar years. [CHART] 1998 -20.89% 1999 28.89% 2000 13.51% 2001 12.30% 2002 10.61% 2003 34.65%
BEST QUARTER: 17.55% (12/31/02) WORST QUARTER: -29.08% (09/30/98) This table compares the Fund's average annual total returns for Class A Shares for the periods ended December 31, 2003 to those of the J.P. Morgan Emerging Markets Bond Index (EMBI) Global and the J.P. Morgan EMBI Plus Index.
SINCE EMERGING MARKETS DEBT FUND -- CLASS A SHARES 1 YEAR 5 YEARS INCEPTION* - ------------------------------------------------------------------------------------------------------------ Return Before Taxes 34.65% 19.60% 11.14% - ------------------------------------------------------------------------------------------------------------ Return After Taxes on Distributions** 28.30% 14.21% 7.05% - ------------------------------------------------------------------------------------------------------------ Return After Taxes on Distributions and Sale of Fund Shares** 23.55% 13.61% 6.97% - ------------------------------------------------------------------------------------------------------------ J.P. Morgan EMBI Global Index Return (reflects no deduction for fees, expenses, or taxes)***+ 25.66% 15.40% 9.84% - ------------------------------------------------------------------------------------------------------------ J.P. Morgan EMBI Plus Index Return (reflects no deduction for fees, expenses, or taxes)***+ 28.82% 16.30% 10.09% - ------------------------------------------------------------------------------------------------------------
* The inception date for the Fund's Class A Shares is June 26, 1997. Index returns shown from June 30, 1997. ** After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Your actual after-tax returns will depend on your tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. *** An index measures the market prices of a specific group of securities in a particular market or securities in a market sector. You cannot invest directly in an index. Unlike a mutual fund, an index does not have an investment adviser and does not pay any commissions or expenses. If an index had expenses, its performance would be lower. The J.P. Morgan EMBI Global Index tracks total returns for U.S. dollar-denominated Brady Bonds, Eurobonds, traded loans, and local market debt instruments issued by sovereign and quasi-sovereign entities. The J.P. Morgan EMBI Plus Index is a widely-recognized, market value-weighted (higher market value securities have more influence than lower market value securities) index of bonds issued by emerging markets countries. The index currently includes Eurobonds, and Brady Bonds issued by Argentina, Brazil, Bulgaria, Mexico, Nigeria, the Philippines, Poland and Venezuela. + In prior years, the Fund's return had been compared to the J.P. Morgan EMBI Plus Index but the Adviser believes that the J.P. Morgan EMBI Global Index better represents the Fund's investment strategy. 15 FUND FEES AND EXPENSES This table describes the fees and expenses that you may pay if you buy and hold Fund shares. ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS) CLASS A SHARES - ------------------------------------------------------------------------------------ Investment Advisory Fees 0.85% - ------------------------------------------------------------------------------------ Distribution (12b-1) Fees None - ------------------------------------------------------------------------------------ Other Expenses 0.95% ==================================================================================== Total Annual Fund Operating Expenses 1.80%* ====================================================================================
* The Fund's total actual annual fund operating expenses for the most recent fiscal year were less than the amount shown above because the Adviser and the Fund's distributor each waived a portion of the fees in order to keep total operating expenses, excluding interest expense, at a specified level. The Adviser and the Fund's distributor may discontinue all or part of these waivers at any time. With these fee waivers, the Fund's actual total operating expenses were as follows: Emerging Markets Debt Fund -- Class A Shares 1.35% - -----------------------------------------------------------------------------------
For more information about these fees, see "Investment Adviser and Sub-Advisers" and "Distribution of Fund Shares." EXAMPLE This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and that you sell your shares at the end of the period. The Example also assumes that each year your investment has a 5% return, Fund operating expenses remain the same, and you reinvest all dividends and distributions. Although your actual costs and returns might be different, your approximate costs of investing $10,000 in the Fund would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS - --------------------------------------------------------------------------------------------------------- Emerging Markets Debt Fund -- Class A Shares $ 183 $ 566 $ 975 $ 2,116 - ---------------------------------------------------------------------------------------------------------
16 MORE INFORMATION ABOUT FUND INVESTMENTS This prospectus describes the Funds' primary investment strategies. However, each Fund also may invest in other securities, use other strategies and engage in other investment practices. These investments and strategies, as well as those described in this prospectus, are described in detail in the Funds' Statement of Additional Information (SAI). The investments and strategies described in this prospectus are those that the Adviser and Sub-Advisers use under normal conditions. During unusual economic or market conditions, or for temporary defensive or liquidity purposes, each Fund may invest up to 100% of its assets in cash, money market instruments, repurchase agreements and other short-term obligations that would not ordinarily be consistent with the Funds' objectives. A Fund will do so only if the Adviser or the Sub-Advisers believe that the risk of loss outweighs the opportunity for capital gains or higher income. Of course, there is no guarantee that any Fund will achieve its investment goal. INVESTMENT ADVISER AND SUB-ADVISERS SEI INVESTMENTS MANAGEMENT CORPORATION (SIMC) ACTS AS THE MANAGER OF MANAGERS OF THE FUNDS, AND IS RESPONSIBLE FOR THE INVESTMENT PERFORMANCE OF THE FUNDS SINCE IT ALLOCATES EACH FUND'S ASSETS TO ONE OR MORE SUB-ADVISERS AND RECOMMENDS HIRING OR CHANGING SUB-ADVISERS TO THE BOARD OF TRUSTEES. Each Sub-Adviser makes investment decisions for the assets it manages and continuously reviews, supervises and administers its investment program. SIMC oversees the Sub-Advisers to ensure compliance with the Funds' investment policies and guidelines, and monitors each Sub-Adviser's adherence to its investment style. The Board of Trustees supervises SIMC and the Sub-Advisers; establishes policies that they must follow in their management activities; and oversees the hiring and termination of the Sub-Advisers recommended by SIMC. SIMC pays the Sub-Advisers out of the investment advisory fees it receives. SIMC, an SEC-registered adviser, located at One Freedom Valley Drive, Oaks, Pennsylvania 19456, serves as the Adviser to the Funds. As of November 30, 2003, SIMC had approximately $56 billion in assets under management. For the fiscal year ended September 30, 2003, SIMC received investment advisory fees, as a percentage of each Fund's net assets, at the following annual rates: International Equity Fund 0.47%* - ------------------------------------------------------------------------------- Emerging Markets Equity Fund 0.86%* - ------------------------------------------------------------------------------- International Fixed Income Fund 0.15% - ------------------------------------------------------------------------------- Emerging Markets Debt Fund 0.40%* - -------------------------------------------------------------------------------
*After fee waivers. 17 SUB-ADVISERS AND PORTFOLIO MANAGERS INTERNATIONAL EQUITY FUND: ALLIANCE CAPITAL MANAGEMENT L.P.: Alliance Capital Management L.P. (Alliance Capital), located at 1345 Avenue of the Americas, New York, New York 10105, serves as a Sub-Adviser to the International Equity Fund. A committee of investment professionals at Alliance Capital manages the portion of the International Equity Fund's assets allocated to Alliance Capital. CAPITAL GUARDIAN TRUST COMPANY: Capital Guardian Trust Company (Capital Guardian), located at 333 South Hope Street, 55th Floor, Los Angeles, California 90071, serves as a Sub-Adviser to the International Equity Fund. A committee of investment professionals at Capital Guardian manages the portion of the assets of the International Equity Fund allocated to Capital Guardian. FISHER INVESTMENTS, INC.: Fisher Investments, Inc. (Fisher), located at 13100 Skyline Blvd., Woodside, California 94062, serves as a Sub-Adviser to the International Equity Fund. A committee of investment professionals at Fisher manages the portion of the International Equity Fund's assets allocated to Fisher. McKINLEY CAPITAL MANAGEMENT, INC.: McKinley Capital Management, Inc. (McKinley Capital), located at 3301 C Street, Suite 500, Anchorage, Alaska 99503, serves as a Sub-Adviser to the International Equity Fund. A committee of investment professionals at McKinley Capital manages the portion of the International Equity Fund's assets allocated to McKinley Capital. MORGAN STANLEY INVESTMENT MANAGEMENT INC. AND MORGAN STANLEY INVESTMENT MANAGEMENT LIMITED: Morgan Stanley Investment Management Inc. (MSIM Inc.), located at 1221 Avenue of the Americas, New York, New York 10020 serves as a Sub-Adviser to the International Equity Fund. MSTM Inc. delegates certain investment advisory responsibilities to its affiliate, Morgan Stanley Investment Management Limited (MSIM Limited), located at 25 Cabot Square, Canary Wharf, London E14 4QA, United Kingdom. MSIM Limited's International Equity Value Team manages the portion of the International Equity Fund's assets allocated to MSIM Inc. Current members of the team include Dominic Caldecott, Managing Director, Peter Wright, Managing Director, William Lock, Managing Director, Walter Riddell, Executive Director, and John Goodacre, Vice President. EMERGING MARKETS EQUITY FUND: ALLIANCE CAPITAL MANAGEMENT L.P.: Alliance Capital Management L.P. (Alliance Capital), located at 1345 Avenue of the Americas, New York, New York 10105, serves as a Sub-Adviser to the Emerging Markets Equity Fund. A committee of investment professionals at Alliance Capital manages the portion of the Emerging Markets Equity Fund's assets allocated to Alliance Capital. THE BOSTON COMPANY ASSET MANAGEMENT LLC: The Boston Company Asset Management LLC (The Boston Company), located at One Boston Place, Boston, Massachusetts 02108, serves as a Sub-Adviser to the Emerging Markets Equity Fund. D. Kirk Henry, CFA and Senior Vice President of The Boston Company, serves as portfolio manager for the portion of the assets of the Emerging Markets Equity Fund allocated to The Boston Company. Since joining The Boston Company in 1994, Mr. Henry has had primary responsibility for the firm's Emerging Markets Equity product and since January 1, 2003, responsibility for the International Equity product. CITIGROUP ASSET MANAGEMENT LIMITED: Citigroup Asset Management Limited (Citigroup), located at Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB, England, serves as a Sub-Adviser to the Emerging Markets Equity Fund. Aquico Wen, CFA, CPA, Roger Garret, Chris Lively, Erda Gercek, and Olivier Lemaigre manage the portion of the Emerging Markets Equity Fund's assets allocated to 18 Citigroup. Mr. Wen has been with Citigroup since 1998 and has 9 years of industry experience. Mr. Garret has been with Citigroup since 1991 and has 13 years of experience. Prior to joining Citigroup in 2000, Mr. Lively was an Analyst and Portfolio Manager for Pioneer Group, Inc. He has 9 years of experience. Ms. Gercek has been with Citigroup since 1989 and has 12 years of experience. Mr. Lemaigre has been with Citigroup since 1993 and has 10 years of experience in emerging markets. EMERGING MARKETS MANAGEMENT, L.L.C.: Emerging Markets Management, L.L.C. (EMM), located at 1001 Nineteenth Street North, 17th Floor, Arlington, Virginia 22209-1722, serves as a Sub-Adviser to the Emerging Markets Equity Fund. A team of investment professionals at EMM manages the portion of the assets of the Emerging Markets Equity Fund allocated to EMM. INTERNATIONAL FIXED INCOME FUND: FISCHER FRANCIS TREES & WATTS, INC. AND ITS AFFILIATES: Fischer Francis Trees & Watts, Inc., a New York corporation, located at 200 Park Avenue, 46th Floor, New York, New York 10166, and three of its affiliates, Fischer Francis Trees & Watts, a corporate partnership organized under the laws of the United Kingdom, Fischer Francis Trees & Watts (Singapore) Pte Ltd, a Singapore corporation, and Fischer Francis Trees & Watts Kabushiki Kaisha, a Japanese corporation (collectively referred to as FFTW) serve as the Sub-Adviser to the International Fixed Income Fund. FFTW's Investment Strategy Group is responsible for determining the investment strategy of the International Fixed Income Fund. Kevin Corrigan, Portfolio Manager and Managing Director of FFTW, serves as portfolio manager of the International Fixed Income Fund. Mr. Corrigan joined FFTW in 1995 and has nine years of investment experience. EMERGING MARKETS DEBT FUND: ASHMORE INVESTMENT MANAGEMENT LIMITED: Ashmore Investment Management Limited (Ashmore), located at 20 Bedfordbury, London, United Kingdom WC2N 4BL, serves as a Sub-Adviser to the Emerging Markets Debt Fund. A team of investment professionals at Ashmore manages the portion of the assets of the Emerging Markets Debt Fund allocated to Ashmore. SALOMON BROTHERS ASSET MANAGEMENT INC: Salomon Brothers Asset Management Inc (SBAM), located at 399 Park Avenue, 4th Floor, New York, New York 10022, serves as a Sub-Adviser to the Emerging Markets Debt Fund. Peter J. Wilby leads a team of professionals from SBAM that manages the portion of the assets of the Emerging Markets Debt Fund allocated to SBAM. Mr. Wilby, a Managing Director of SBAM, joined SBAM in 1989. 19 PURCHASING AND SELLING FUND SHARES This section tells you how to purchase and sell (sometimes called redeem) Class A Shares of the Funds. The Funds offer Class A Shares only to financial institutions and intermediaries for their own or their customers' accounts. For information on how to open an account and set up procedures for placing transactions, call 1-800-DIAL-SEI. HOW TO PURCHASE FUND SHARES You may purchase shares on any day that the New York Stock Exchange (NYSE) is open for business (a Business Day). Financial institutions and intermediaries may purchase Class A Shares by placing orders with the Funds' Transfer Agent (or its authorized agent). Institutions and intermediaries that use certain SEI proprietary systems may place orders electronically through those systems. Cash investments must be transmitted or delivered in federal funds to the Funds' wire agent by the close of business on the day after the order is placed. The Funds reserve the right to refuse any purchase requests, particularly those that would not be in the best interests of the Funds or their shareholders and could adversely affect the Funds or their operations. This includes those from any individual or group who, in a Fund's view, are likely to engage in excessive trading (usually defined as more than four transactions out of a Fund within a calendar year). When you purchase or sell Fund shares through certain financial institutions (rather than directly from the Funds), you may have to transmit your purchase and sale requests to these financial institutions at an earlier time for your transaction to become effective that day. This allows these financial institutions time to process your requests and transmit them to the Funds. Certain other intermediaries, including certain broker-dealers and shareholder organizations, are authorized to accept purchase and redemption requests for Fund shares. These requests are executed at the net asset value per share (NAV) next determined after the intermediary receives the request if transmitted to the Funds promptly in accordance with the Funds' procedures and applicable law. These authorized intermediaries are responsible for transmitting requests and delivering funds on a timely basis. If you deal directly with a financial institution or financial intermediary, you will have to follow the institution's or intermediary's procedures for transacting with the Funds. For more information about how to purchase or sell Fund shares through your financial institution, you should contact your financial institution directly. Investors may be charged a fee for purchase and/or redemption transactions effectuated through certain broker-dealers or other financial intermediaries. Each Fund calculates its NAV once each Business Day as of the close of normal trading on the NYSE (normally, 4:00 p.m. Eastern time). So, for you to receive the current Business Day's NAV, a Fund (or an authorized agent) must receive your purchase order in proper form before 4:00 p.m. Eastern time. The Funds will not accept orders that request a particular day or price for the transaction or any other special conditions. HOW THE FUNDS CALCULATE NAV NAV for one Fund share is the value of that share's portion of the net assets of the Fund. In calculating NAV, a Fund generally values its investment portfolio at market price. If market prices are unavailable or the Funds think that they are unreliable, fair value prices may be determined in good faith using 20 methods approved by the Board of Trustees. The Funds hold portfolio securities that are listed on foreign exchanges. These securities may trade on weekends or other days when the Funds do not calculate NAV. As a result, the market value of the Funds' investments may change on days when you cannot purchase or sell Fund shares. MINIMUM PURCHASES To purchase Class A Shares for the first time, you must invest at least $100,000 in any Fund with minimum subsequent investments of at least $1,000. A Fund may accept investments of smaller amounts at its discretion. FOREIGN INVESTORS The Funds do not generally accept investments by non-U.S. persons. Non-U.S. persons may be permitted to invest in a Fund subject to the satisfaction of enhanced due diligence. CUSTOMER IDENTIFICATION AND VERIFICATION AND ANTI-MONEY LAUNDERING PROGRAM Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. Accounts for the Funds are generally opened through other financial institutions or financial intermediaries. When you open your account through your financial institution or financial intermediary, you will have to provide your name, address, date of birth, identification number and other information that will allow the financial institution or financial intermediary to identify you. This information is subject to verification by the financial institution or financial intermediary to ensure the identity of all persons opening an account. Your financial institution or financial intermediary is required by law to reject your new account application if the required identifying information is not provided. Your financial institution or intermediary may contact you in an attempt to collect any missing information required on the application, and your application may be rejected if they are unable to obtain this information. In certain instances, your financial institution or financial intermediary is required to collect documents, which will be used solely to establish and verify your identity. The Funds will accept investments and your order will be processed at the NAV next determined after receipt of your application in proper form (or upon receipt of all identifying information required on the application). The Funds, however, reserve the right to close and/or liquidate your account at the then-current day's price if the financial institution or financial intermediary that you open your account through is unable to verify your identity. As a result, you may be subject to a gain or loss on Fund shares and will be subject to corresponding tax implications. Customer identification and verification is part of the Funds' overall obligation to deter money laundering under Federal law. The Funds have adopted an Anti-Money Laundering Compliance Program designed to prevent the Funds from being used for money laundering or the financing of terrorist activities. In this regard, the Funds reserve the right to (i) refuse, cancel or rescind any purchase or exchange order, (ii) freeze any account and/or suspend account services or (iii) involuntarily close your account in cases of threatening conduct or suspected fraudulent or illegal activity. These actions will be taken when, in the sole discretion of Fund management, they are deemed to be in the best interest of a Fund or in cases when a Fund is requested or compelled to do so by governmental or law enforcement authority. If your account is closed at the request of governmental or law enforcement authority, you may not receive proceeds of the redemption if the Fund is required to withhold such proceeds. 21 HOW TO SELL YOUR FUND SHARES If you hold Class A Shares, you may sell your shares on any Business Day by following the procedures established when you opened your account or accounts. If you have questions, call 1-800-DIAL-SEI. If you own your shares through an account with a broker or other institution, contact that broker or institution to sell your shares. Your financial institution or intermediary may charge a fee for its services. The sale price of each share will be the next NAV determined after the Funds receive your request or after the Funds' authorized intermediary receives your request if transmitted to the Funds promptly in accordance with the Funds' procedures and applicable law. RECEIVING YOUR MONEY Normally, the Funds will make payment on your sale on the Business Day following the day on which they receive your request, but it may take up to seven days. You may arrange for your proceeds to be wired to your bank account. REDEMPTIONS IN KIND The Funds generally pay sale (redemption) proceeds in cash. However, under unusual conditions that make the payment of cash unwise (and for the protection of the Funds' remaining shareholders) the Funds might pay all or part of your redemption proceeds in liquid securities with a market value equal to the redemption price (redemption in kind). Although it is highly unlikely that your shares would ever be redeemed in kind, you would probably have to pay brokerage costs to sell the securities distributed to you, as well as taxes on any capital gains from the sale as with any redemption. SUSPENSION OF YOUR RIGHT TO SELL YOUR SHARES The Funds may suspend your right to sell your shares if the NYSE restricts trading, the SEC declares an emergency or for other reasons. More information about this is in the SAI. TELEPHONE TRANSACTIONS Purchasing and selling Fund shares over the telephone is extremely convenient, but not without risk. The Funds have certain safeguards and procedures to confirm the identity of callers and the authenticity of instructions. If the Funds follow these procedures, the Funds will not be responsible for any losses or costs incurred by following telephone instructions that the Funds reasonably believe to be genuine. DISTRIBUTION OF FUND SHARES SEI Investments Distribution Co. (SIDCo.) is the distributor of the shares of the Funds. SIDCo. receives no compensation for distributing the Funds' shares. For Class A Shares, shareholder servicing fees, as a percentage of average daily net assets, may be up to 0.25%. 22 DIVIDENDS, DISTRIBUTIONS AND TAXES DIVIDENDS AND DISTRIBUTIONS The Funds periodically distribute their investment income to shareholders as a dividend. It is the Funds' policy to pay dividends at least once annually. The Funds make distributions of capital gains, if any, at least annually. You will receive dividends and distributions in cash unless otherwise stated. TAXES PLEASE CONSULT YOUR TAX ADVISOR REGARDING YOUR SPECIFIC QUESTIONS ABOUT FEDERAL, STATE, LOCAL, AND FOREIGN INCOME TAXES. Below the Funds have summarized some important tax issues that affect the Funds and their shareholders. This summary is based on current tax laws, which may change. At least annually, each Fund will distribute substantially all of its net investment income and its net realized capital gains, if any. The dividends and distributions you receive from the Funds may be subject to federal, state and local taxation, depending upon your tax situation. If so, they are taxable whether or not you reinvest them. Income distributions are generally taxable at ordinary income tax rates except to the extent they are designated as qualified dividend income. Dividends that are qualified dividend income are eligible for the reduced maximum rate to individuals of 15% (5% for individuals in lower tax brackets) to the extent that a Fund receives qualified dividend income. Capital gains distributions and distributions of qualified dividend income are generally taxable at the rates applicable to long-term capital gains regardless of how long you have held your Fund shares. Long-term capital gains are currently taxable at the maximum rate of 15%. Absent further legislation, the maximum 15% rate on qualified dividend income and long-term capital gains will cease to apply to taxable years beginning after December 31, 2008. Each sale of Fund shares may be a taxable event. Currently, any capital gain or loss realized upon a sale of Fund shares is generally treated as long-term gain or loss if the shares have been held for more than one year. Capital gain or loss realized upon a sale of Fund shares held for one year or less is generally treated as short-term gain or loss, except that any capital loss on the sale of the Fund shares held for six months or less is treated as long-term capital loss to the extent that capital gain dividends were paid with respect to such Fund shares. Some foreign governments levy withholding taxes against dividend and interest income. Although in some countries a portion of these taxes is recoverable, the non-recovered portion will reduce the income received from the securities comprising the portfolios of the Funds. Each Fund may elect to pass through to you your pro rata share of foreign income taxes paid by the Fund. The Funds will notify you if they make such election. MORE INFORMATION ABOUT TAXES IS IN THE FUNDS' SAI. 23 FINANCIAL HIGHLIGHTS The tables that follow present performance information about Class A Shares of each Fund. This information is intended to help you understand each Fund's financial performance for the past five years. Some of this information reflects financial information for a single Fund share. The total returns in the table represent the rate that you would have earned (or lost) on an investment in a Fund, assuming you reinvested all of your dividends and distributions. This information has been audited by PricewaterhouseCoopers LLP, independent accountants. Their report, along with each Fund's financial statements, appears in the annual report that accompanies the Funds' SAI. You can obtain the annual report, which contains more performance information, at no charge by calling 1-800-DIAL-SEI. FOR THE YEARS ENDED SEPTEMBER 30, FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
NET REALIZED AND UNREALIZED DISTRIBUTIONS TOTAL NET NET ASSET NET GAINS DIVIDENDS FROM FROM ASSET NET ASSETS VALUE, INVESTMENT (LOSSES) TOTAL FROM NET REALIZED DIVIDENDS VALUE, END OF BEGINNING INCOME ON FROM INVESTMENT CAPITAL AND END OF TOTAL PERIOD OF PERIOD (LOSS) SECURITIES OPERATIONS INCOME GAINS DISTRIBUTIONS PERIOD RETURN+ ($ THOUSANDS) - ---------------------------------------------------------------------------------------------------------------------------------- INTERNATIONAL EQUITY FUND CLASS A 2003 $ 6.93 $ 0.08(1) $ 1.23(1) $ 1.31 $ (0.04) $ -- $ (0.04) $ 8.20 18.91% $ 2,258,034 - ---------------------------------------------------------------------------------------------------------------------------------- 2002 8.25 0.04 (1.34) (1.30) (0.02) -- (0.02) 6.93 (15.79) 1,952,763 - ---------------------------------------------------------------------------------------------------------------------------------- 2001 12.33 0.03 (3.73) (3.70) (0.07) (0.31) (0.38) 8.25 (30.85) 2,365,245 - ---------------------------------------------------------------------------------------------------------------------------------- 2000 12.09 0.08 0.43 0.51 (0.04) (0.23) (0.27) 12.33 4.15 2,953,872 - ---------------------------------------------------------------------------------------------------------------------------------- 1999 9.16 0.04(1) 3.34(1) 3.38 (0.10) (0.35) (0.45) 12.09 37.86 1,844,459 - ---------------------------------------------------------------------------------------------------------------------------------- EMERGING MARKETS EQUITY FUND CLASS A 2003 $ 6.53 $ 0.05(1) $ 2.42(1) $ 2.47 $ -- $ -- $ -- $ 9.00 37.83% $ 936,560 - ---------------------------------------------------------------------------------------------------------------------------------- 2002 6.08 0.01 0.47 0.48 (0.03) -- (0.03) 6.53 7.78 739,880 - ---------------------------------------------------------------------------------------------------------------------------------- 2001 9.19 0.04 (3.15) (3.11) -- -- -- 6.08 (33.84) 1,010,428 - ---------------------------------------------------------------------------------------------------------------------------------- 2000 9.13 (0.05)(1) 0.12(1) 0.07 (0.01) -- (0.01) 9.19 0.71 1,285,033 - ---------------------------------------------------------------------------------------------------------------------------------- 1999 6.17 (0.03) 3.00 2.97 (0.01) -- (0.01) 9.13 48.23 866,911 - ---------------------------------------------------------------------------------------------------------------------------------- INTERNATIONAL FIXED INCOME FUND CLASS A 2003 $ 11.00 $ 0.30(1) $ 1.53(1) $ 1.83 $ (0.33) $ (0.05) $ (0.38) $ 12.45 17.05% $ 865,698 - ---------------------------------------------------------------------------------------------------------------------------------- 2002 10.12 0.55 0.33 0.88 -- -- -- 11.00 8.70 878,082 - ---------------------------------------------------------------------------------------------------------------------------------- 2001 9.81 0.33 (0.02) 0.31 -- -- -- 10.12 3.16 1,198,644 - ---------------------------------------------------------------------------------------------------------------------------------- 2000 11.03 0.31 (1.35) (1.04) (0.18) -- (0.18) 9.81 (9.58) 1,105,584 - ---------------------------------------------------------------------------------------------------------------------------------- 1999 11.89 0.30 (0.42) (0.12) (0.53) (0.21) (0.74) 11.03 (1.36) 809,440 - ---------------------------------------------------------------------------------------------------------------------------------- RATIO OF RATIO OF NET EXPENSES RATIO OF INVESTMENT TO AVERAGE EXPENSES INCOME NET TO AVERAGE (LOSS) TO ASSETS PORTFOLIO NET AVERAGE (EXCLUDING TURNOVER ASSETS NET ASSETS WAIVERS) RATE - ------------------------------------------------------ INTERNATIONAL EQUITY FUND CLASS A 2003 1.28% 1.12% 1.32% 87% - ------------------------------------------------------ 2002 1.28 0.51 1.29 70 - ------------------------------------------------------ 2001 1.28 0.36 1.29 91 - ------------------------------------------------------ 2000 1.29++ 0.79 1.30 73 - ------------------------------------------------------ 1999 1.28 0.39 1.31 61 - ------------------------------------------------------ EMERGING MARKETS EQUITY FUND CLASS A 2003 1.95% 0.71% 2.14% 69% - ------------------------------------------------------ 2002 1.95 0.08 2.14 109 - ------------------------------------------------------ 2001 1.95 0.54 2.13 126 - ------------------------------------------------------ 2000 1.96 (0.46) 2.12 110 - ------------------------------------------------------ 1999 1.95 (0.35) 2.14 129 - ------------------------------------------------------ INTERNATIONAL FIXED INCOME FUND CLASS A 2003 1.00% 2.60% 1.06% 216% - ------------------------------------------------------ 2002 1.00 2.72 1.07 339 - ------------------------------------------------------ 2001 1.00 3.13 1.06 235 - ------------------------------------------------------ 2000 1.00 3.17 1.11 190 - ------------------------------------------------------ 1999 1.00 2.97 1.22 278 - ------------------------------------------------------
24
NET REALIZED AND UNREALIZED DISTRIBUTIONS TOTAL NET NET ASSET NET GAINS DIVIDENDS FROM FROM ASSET NET ASSETS VALUE, INVESTMENT (LOSSES) TOTAL FROM NET REALIZED DIVIDENDS VALUE, END OF BEGINNING INCOME ON FROM INVESTMENT CAPITAL AND END OF TOTAL PERIOD OF PERIOD (LOSS) SECURITIES OPERATIONS INCOME GAINS DISTRIBUTIONS PERIOD RETURN+ ($ THOUSANDS) - --------------------------------------------------------------------------------------------------------------------------------- EMERGING MARKETS DEBT FUND CLASS A 2003 $ 8.12 $ 0.78(1) $ 3.01(1) $ 3.79 $ (0.76) $ -- $ (0.76) $ 11.15 49.15% $ 565,237 - ---------------------------------------------------------------------------------------------------------------------------------- 2002 9.03 0.82 (0.56) 0.26 (0.99) (0.18) (1.17) 8.12 2.15 422,130 - ---------------------------------------------------------------------------------------------------------------------------------- 2001 9.51 0.94 (0.53) 0.41 (0.89) -- (0.89) 9.03 4.69 458,950 - ---------------------------------------------------------------------------------------------------------------------------------- 2000 8.11 0.84 1.33 2.17 (0.77) -- (0.77) 9.51 28.07 490,554 - ---------------------------------------------------------------------------------------------------------------------------------- 1999 6.83 0.84 1.19 2.03 (0.75) -- (0.75) 8.11 31.15 283,993 - ---------------------------------------------------------------------------------------------------------------------------------- RATIO OF RATIO OF NET EXPENSES RATIO OF INVESTMENT TO AVERAGE EXPENSES INCOME NET TO AVERAGE (LOSS) TO ASSETS PORTFOLIO NET AVERAGE (EXCLUDING TURNOVER ASSETS NET ASSETS WAIVERS) RATE - ------------------------------------------------------ EMERGING MARKETS DEBT FUND CLASS A 2003 1.35% 7.98% 1.80% 127% - ------------------------------------------------------ 2002 1.35 8.80 1.79 140 - ------------------------------------------------------ 2001 1.35 10.06 1.78 196 - ------------------------------------------------------ 2000 1.35 10.67 1.80 227 - ------------------------------------------------------ 1999 1.35 12.27 1.82 184 - ------------------------------------------------------
+ Returns are for the period indicated and have not been annualized. Total returns do not reflect applicable sales load. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. ++ The ratio of expenses to average net assets, excluding interest expense, is 1.28% for the year ended September 30, 2000. (1) Per share net investment income and net realized and unrealized gains (losses) calculated using average shares. Amounts designated as "--" are either $0 or have been rounded to $0. NOTES: NOTES: NOTES: NOTES: SEI INVESTMENTS More information about the Funds is available without charge through the following: STATEMENT OF ADDITIONAL INFORMATION (SAI) The SAI dated January 31, 2004 includes detailed information about the SEI Institutional International Trust. The SAI is on file with the SEC and is incorporated by reference into this prospectus. This means that the SAI, for legal purposes, is a part of this prospectus. ANNUAL AND SEMI-ANNUAL REPORTS These reports list the Funds' holdings and contain information from the Funds' managers about fund strategies, and market conditions and trends and their impact on Fund performance. The reports also contain detailed financial information about the Funds. TO OBTAIN AN SAI, ANNUAL OR SEMI-ANNUAL REPORT, OR MORE INFORMATION: By Telephone: Call 1-8OO-DIAL-SEI By Mail: Write to the Funds at: 1 Freedom Valley Drive Oaks, PA 19456 By Internet: http://www.seic.com From the SEC: You can also obtain the SAI or the Annual and Semi-Annual Reports, as well as other information about the SEI Institutional International Trust, from the EDGAR Database on the SEC's website ("http://www.sec.gov"). You may review and copy documents at the SEC Public Reference Room in Washington, DC (for information on the operation of the Public Reference Room, call 1-202-942-8090). You may request documents by mail from the SEC, upon payment of a duplicating fee, by writing to: Securities and Exchange Commission, Public Reference Section, Washington, DC 20549-0102. You may also obtain this information, upon payment of a duplicating fee, by e-mailing the SEC at the following address: publicinfo@sec.gov. SEI Institutional International Trust's Investment Company Act registration number is 811-5601. SEI-F-095 (1/04) [GRAPHIC] SEI INVESTMENTS EQUITY INTERNATIONAL EQUITY FUND CLASS I PROSPECTUS AS OF JANUARY 31, 2004 THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. SEI INVESTMENTS / PROSPECTUS SEI INSTITUTIONAL INTERNATIONAL TRUST ABOUT THIS PROSPECTUS SEI Institutional International Trust is a mutual fund family that offers different classes of shares in separate investment portfolios (Funds). The Funds have individual investment goals and strategies and are designed primarily for institutional investors and financial institutions and their clients. This prospectus gives you important information about the Class I Shares of the International Equity Fund that you should know before investing. Please read this prospectus and keep it for future reference. This prospectus has been arranged into different sections so that you can easily review this important information. On the next page, there is some general information you should know about risk and return. For more detailed information about the Fund, please see: Principal Investment Strategies and Risks, Performance Information and Expenses 2 ------------------------------------------------------------------------------------------------- More Information About Fund Investments 5 ------------------------------------------------------------------------------------------------- Investment Adviser and Sub-Advisers 5 ------------------------------------------------------------------------------------------------- Purchasing and Selling Fund Shares 7 ------------------------------------------------------------------------------------------------- Dividends, Distributions and Taxes 10 ------------------------------------------------------------------------------------------------- Financial Highlights 11 ------------------------------------------------------------------------------------------------- How to Obtain More Information About SEI Institutional International Trust Back Cover -------------------------------------------------------------------------------------------------
1 GLOBAL ASSET ALLOCATION The International Equity Fund has its own distinct risk and reward characteristics, investment objective, policies and strategies. In addition to managing the Fund, SEI Investments Management Corporation (SIMC) constructs and maintains global asset allocation strategies for certain clients, and the Fund is designed in part to implement those strategies. The degree to which an investor's portfolio is invested in the particular market segments and/or asset classes represented by the Fund varies, as does the investment risk/return potential represented by the Fund. Because of the historical lack of correlation among various asset classes, an investment in the Fund representing a range of asset classes as part of a global asset allocation strategy may reduce the strategy's overall level of volatility. As a result, a global asset allocation strategy may reduce risk. In managing the Fund, SIMC focuses on four key principles: asset allocation, portfolio structure, the use of managers, and continuous portfolio management. Asset allocation across appropriate asset classes is the central theme of SIMC's investment philosophy. SIMC seeks to reduce risk further by creating a portfolio that focuses on a specific asset class. SIMC then oversees a network of managers who invest the assets of the Fund in distinct segments of the market or class represented by the Fund. These managers adhere to distinct investment disciplines, with the goal of providing greater consistency and predictability of results, as well as broader diversification across and within asset classes. Finally, SIMC regularly rebalances to ensure that the appropriate mix of assets is constantly in place, and constantly monitors and evaluates managers for the Fund to ensure it does not deviate from its stated investment philosophy or process. RISK/RETURN INFORMATION The International Equity Fund is a mutual fund. A mutual fund pools shareholders' money and, using professional investment managers, invests it in securities. The Fund has its own investment goal and strategies for reaching that goal. The Fund's assets are managed under the direction of SIMC and one or more Sub-Advisers who manage portions of the Fund's assets in a way that they believe will help the Fund achieve its goal. No matter how good a job SIMC and the Sub-Advisers do, you could lose money on your investment in the Fund, just as you could with other investments. A Fund share is not a bank deposit, and it is not insured or guaranteed by the FDIC or any other government agency. The value of your investment in the Fund is based on the market prices of the securities the Fund holds. These prices change daily due to economic and other events that affect securities markets generally, as well as those that affect particular companies and other issuers. These price movements, sometimes called volatility, may be greater or lesser depending on the types of securities the Fund owns and the markets in which they trade. The estimated level of volatility for the Fund is set forth in the Fund Summary that follows. The effect on the Fund of a change in the value of a single security will depend on how widely the Fund diversifies its holdings. 2 INTERNATIONAL EQUITY FUND FUND SUMMARY INVESTMENT GOAL: Long-term capital appreciation SHARE PRICE VOLATILITY: Medium to high PRINCIPAL INVESTMENT STRATEGY: Utilizing multiple sub-advisers, the Fund invests in equity securities of foreign companies INVESTMENT STRATEGY Under normal circumstances, the International Equity Fund will invest at least 80% of its net assets in equity securities. The Fund will invest primarily in common stocks and other equity securities of issuers of all capitalization ranges that are located in at least three countries other than the United States. The Fund will invest primarily in companies located in developed countries, but may also invest in companies located in emerging markets. The Fund uses a multi-manager approach, relying upon a number of Sub-Advisers with differing investment philosophies to manage portions of the Fund's portfolio under the general supervision of SIMC. WHAT ARE THE RISKS OF INVESTING IN THE FUND? Since it purchases equity securities, the Fund is subject to the risk that stock prices will fall over short or extended periods of time. Historically, the equity markets have moved in cycles, and the value of the Fund's securities may fluctuate drastically from day to day. Individual companies may report poor results or be negatively affected by industry and/or economic trends and developments. The prices of securities issued by such companies may suffer a decline in response. In the case of foreign stocks, these fluctuations will reflect international economic and political events, as well as changes in currency valuations relative to the U.S. dollar. These factors contribute to price volatility, which is the principal risk of investing in the Fund. Investing in issuers located in foreign countries poses distinct risks since political and economic events unique to a country or region will affect those markets and their issuers. These events will not necessarily affect the U.S. economy or similar issuers located in the United States. In addition, investments in foreign countries are generally denominated in a foreign currency. As a result, changes in the value of those currencies compared to the U.S. dollar may affect (positively or negatively) the value of the Fund's investments. These currency movements may happen separately from and in response to events that do not otherwise affect the value of the security in the issuer's home country. These various risks will be even greater for investments in emerging market countries since political turmoil and rapid changes in economic conditions are more likely to occur in these countries. Emerging market countries are countries that the World Bank or the United Nations considers to be emerging or developing. Emerging markets may be more likely to experience political turmoil or rapid changes in market or economic conditions than more developed countries. Emerging market countries often have less uniformity in accounting and reporting requirements and unreliable securities valuation. It is sometimes difficult to obtain and enforce court judgments in such countries and there is often a greater potential for nationalization and/or expropriation of assets by the government of an emerging market country. In addition, the financial stability of issuers (including governments) in emerging market countries may be more precarious than in other countries. As a result, there will tend to be an increased risk of price volatility associated with the Fund's investments in emerging market countries, which may be magnified by currency fluctuations relative to the U.S. dollar. The Fund is also subject to the risk that developed international equity securities may underperform other segments of the equity markets or the equity markets as a whole. 3 PERFORMANCE INFORMATION The bar chart and the performance table below illustrate the risks and volatility of an investment in the Fund. Of course, the Fund's past performance does not necessarily indicate how the Fund will perform in the future. This bar chart shows the performance of the Fund's Class I Shares for one year. The performance information shown is based on a full calendar year. [CHART] 2003 31.62%
BEST QUARTER: 17.76% (06/30/03) WORST QUARTER: -10.30% (03/31/03) This table compares the Fund's average annual total returns for Class I Shares for the periods ended December 31, 2003 to those of the Morgan Stanley Capital International (MSCI) EAFE Index.
SINCE INTERNATIONAL EQUITY FUND -- CLASS I SHARES 1 YEAR INCEPTION* - -------------------------------------------------------------------------------------------- Return Before Taxes 31.62% 3.52% - -------------------------------------------------------------------------------------------- Return After Taxes on Distributions** 31.73% 3.62% - -------------------------------------------------------------------------------------------- Return After Taxes on Distributions and Sale of Fund Shares** 21.00% 3.17% - -------------------------------------------------------------------------------------------- MSCI EAFE Index Return (reflects no deduction for fees, expenses, or taxes)*** 38.59% 11.43% - --------------------------------------------------------------------------------------------
* The inception date for the Fund's Class I Shares is January 4, 2002. Index returns shown from January 31, 2002. ** After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Your actual after-tax returns will depend on your tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. *** An index measures the market prices of a specific group of securities in a particular market or securities in a market sector. You cannot invest directly in an index. Unlike a mutual fund, an index does not have an investment adviser and does not pay any commissions or expenses. If an index had expenses, its performance would be lower. The MSCI EAFE Index is a widely-recognized, capitalization-weighted (companies with larger market capitalizations have more influence than those with smaller capitalizations) index of 1,010 securities listed on the stock exchanges of developed market countries in Europe, Australasia and the Far East. 4 FUND FEES AND EXPENSES This table describes the fees and expenses that you may pay if you buy and hold Fund shares. ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS) CLASS I SHARES - ------------------------------------------------------------------------------- Investment Advisory Fees 0.51% - ------------------------------------------------------------------------------- Distribution (12b-1) Fees None - ------------------------------------------------------------------------------- Other Expenses 1.06% =============================================================================== Total Annual Fund Operating Expenses 1.57%* ===============================================================================
* The Fund's total actual annual fund operating expenses for the most recent fiscal year were less than the amount shown above because the Adviser waived a portion of the fees in order to keep total operating expenses, excluding interest expense, at a specified level. The Adviser may discontinue all or part of these waivers at any time. With these fee waivers, the Fund's actual total operating expenses were as follows: International Equity Fund-- Class I Shares 1.53% - -------------------------------------------------------------------------------
For more information about these fees, see "Investment Adviser and Sub-Advisers" and "Distribution of Fund Shares." EXAMPLE This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and that you sell your shares at the end of the period. The Example also assumes that each year your investment has a 5% return, Fund operating expenses remain the same, and you reinvest all dividends and distributions. Although your actual costs and returns might be different, your approximate costs of investing $10,000 in the Fund would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS - ------------------------------------------------------------------------------------------------------ International Equity Fund-- Class I Shares $ 160 $ 496 $ 855 $ 1,867 - ------------------------------------------------------------------------------------------------------
5 MORE INFORMATION ABOUT FUND INVESTMENTS This prospectus describes the Fund's primary investment strategies. However, the Fund also may invest in other securities, use other strategies and engage in other investment practices. These investments and strategies, as well as those described in this prospectus, are described in detail in the Fund's Statement of Additional Information (SAI). The investments and strategies described in this prospectus are those that the Adviser and the Sub-Advisers use under normal conditions. During unusual economic or market conditions, or for temporary defensive or liquidity purposes, the Fund may invest up to 100% of its assets in cash, money market instruments, repurchase agreements and other short-term obligations that would not ordinarily be consistent with the Fund's objectives. The Fund will do so only if the Adviser or the Sub-Advisers believe that the risk of loss outweighs the opportunity for capital gains or higher income. Of course, there is no guarantee that the Fund will achieve its investment goal. INVESTMENT ADVISER AND SUB-ADVISERS SEI INVESTMENTS MANAGEMENT CORPORATION (SIMC) ACTS AS THE MANAGER OF MANAGERS OF THE FUND, AND IS RESPONSIBLE FOR THE INVESTMENT PERFORMANCE OF THE FUND SINCE IT ALLOCATES THE FUND'S ASSETS TO ONE OR MORE SUB-ADVISERS AND RECOMMENDS HIRING OR CHANGING SUB-ADVISERS TO THE BOARD OF TRUSTEES. Each Sub-Adviser makes investment decisions for the assets it manages and continuously reviews, supervises and administers its investment program. SIMC oversees the Sub-Advisers to ensure compliance with the Fund's investment policies and guidelines, and monitors each Sub-Adviser's adherence to its investment style. The Board of Trustees supervises SIMC and the Sub-Advisers; establishes policies that they must follow in their management activities; and oversees the hiring and termination of the Sub-Advisers recommended by SIMC. SIMC pays the Sub-Advisers out of the investment advisory fees it receives. SIMC, an SEC-registered adviser, located at One Freedom Valley Drive, Oaks, Pennsylvania 19456, serves as the Adviser to the Fund. As of November 30, 2003, SIMC had approximately $56 billion in assets under management. For the fiscal year ended September 30, 2003, SIMC received investment advisory fees, after fee waivers, as a percentage of the Fund's net assets at the annual rate of 0.47%. SUB-ADVISERS AND PORTFOLIO MANAGERS ALLIANCE CAPITAL MANAGEMENT L.P.: Alliance Capital Management L.P. (Alliance Capital), located at 1345 Avenue of the Americas, New York, New York 10105, serves as a Sub-Adviser to the International Equity Fund. A committee of investment professionals at Alliance Capital manages the portion of the International Equity Fund's assets allocated to Alliance Capital. CAPITAL GUARDIAN TRUST COMPANY: Capital Guardian Trust Company (Capital Guardian), located at 333 South Hope Street, 55th Floor, Los Angeles, California 90071, serves as a Sub-Adviser to the International Equity Fund. A committee of investment professionals at Capital Guardian manages the portion of the assets of the International Equity Fund allocated to Capital Guardian. FISHER INVESTMENTS, INC.: Fisher Investments, Inc. (Fisher), located at 13100 Skyline Blvd., Woodside, California 94062, serves as a Sub-Adviser to the International Equity Fund. A committee of investment professionals at Fisher manages the portion of the International Equity Fund's assets allocated to Fisher. 6 MCKINLEY CAPITAL MANAGEMENT, INC.: McKinley Capital Management, Inc. (McKinley Capital), located at 3301 C Street, Suite 500, Anchorage, Alaska 99503, serves as a Sub-Adviser to the International Equity Fund. A committee of investment professionals at McKinley Capital manages the portion of the International Equity Fund's assets allocated to McKinley Capital. MORGAN STANLEY INVESTMENT MANAGEMENT INC. AND MORGAN STANLEY INVESTMENT MANAGEMENT LIMITED: Morgan Stanley Investment Management Inc. (MSIM Inc.), located at 1221 Avenue of the Americas, New York, New York 10020, serves as a Sub-Adviser to the International Equity Fund. MSIM Inc. delegates certain investment advisory responsibilities to its affiliate, Morgan Stanley Investment Management Limited (MSIM Limited), located at 25 Cabot Square, Canary Wharf, London E14 4QA, United Kingdom. MSIM Limited's International Equity Value Team manages the portion of the International Equity Fund's assets allocated to MSIM Inc. Current members of the team include Dominic Caldecott, Managing Director, Peter Wright, Managing Director, William Lock, Managing Director, Walter Riddell, Executive Director, and John Goodacre, Vice President. 7 PURCHASING AND SELLING FUND SHARES This section tells you how to purchase and sell (sometimes called redeem) Class I Shares of the Fund. The Fund offers Class I Shares only to financial institutions and intermediaries for their own or their customers' accounts. For information on how to open an account and set up procedures for placing transactions, call 1-800-DIAL-SEI. HOW TO PURCHASE FUND SHARES You may purchase shares on any day that the New York Stock Exchange (NYSE) is open for business (a Business Day). Financial institutions and intermediaries may purchase Class I Shares by placing orders with the Fund's Transfer Agent (or its authorized agent). Institutions and intermediaries that use certain SEI proprietary systems may place orders electronically through those systems. Cash investments must be transmitted or delivered in federal funds to the Fund's wire agent by the close of business on the day after the order is placed. The Fund reserves the right to refuse any purchase requests, particularly those that would not be in the best interests of the Fund or its shareholders and could adversely affect the Fund or its operations. This includes those from any individual or group who, in the Fund's view, are likely to engage in excessive trading (usually defined as more than four transactions out of the Fund within a calendar year). When you purchase or sell Fund shares through certain financial institutions (rather than directly from the Fund), you may have to transmit your purchase and sale requests to these financial institutions at an earlier time for your transaction to become effective that day. This allows these financial institutions time to process your requests and transmit them to the Fund. Certain other intermediaries, including certain broker-dealers and shareholder organizations, are authorized to accept purchase and redemption requests for Fund shares. These requests are executed at the net asset value per share (NAV) next determined after the intermediary receives the request if transmitted to the Fund promptly in accordance with the Fund's procedures and applicable law. These authorized intermediaries are responsible for transmitting requests and delivering funds on a timely basis. If you deal directly with a financial institution or financial intermediary, you will have to follow the institution's or intermediary's procedures for transacting with the Fund. For more information about how to purchase or sell Fund shares through your financial institution, you should contact your financial institution directly. Investors may be charged a fee for purchase and/or redemption transactions effectuated through certain broker-dealers or other financial intermediaries. The Fund calculates its NAV once each Business Day as of the close of normal trading on the NYSE (normally, 4:00 p.m. Eastern time). So, for you to receive the current Business Day's NAV, the Fund (or an authorized agent) must receive your purchase order in proper form before 4:00 p.m. Eastern time. The Fund will not accept orders that request a particular day or price for the transaction or any other special conditions. HOW THE FUND CALCULATES NAV NAV for one Fund share is the value of that share's portion of the net assets of the Fund. In calculating NAV, the Fund generally values its investment portfolio at market price. If market prices are unavailable or the Fund thinks that they are unreliable, fair value prices may be determined in good faith using 8 methods approved by the Board of Trustees. The Fund holds portfolio securities that are listed on foreign exchanges. These securities may trade on weekends or other days when the Fund does not calculate NAV. As a result, the market value of the Fund's investments may change on days when you cannot purchase or sell Fund shares. MINIMUM PURCHASES To purchase Class I Shares for the first time, you must invest at least $100,000 in the Fund with minimum subsequent investments of at least $1,000. The Fund may accept investments of smaller amounts at its discretion. FOREIGN INVESTORS The Fund does not generally accept investments by non-U.S. persons. Non-U.S. persons may be permitted to invest in the Fund subject to the satisfaction of enhanced due diligence. CUSTOMER IDENTIFICATION AND VERIFICATION AND ANTI-MONEY LAUNDERING PROGRAM Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. Accounts for the Fund are generally opened through other financial institutions or financial intermediaries. When you open your account through your financial institution or financial intermediary, you will have to provide your name, address, date of birth, identification number and other information that will allow the financial institution or financial intermediary to identify you. This information is subject to verification by the financial institution or financial intermediary to ensure the identity of all persons opening an account. Your financial institution or financial intermediary is required by law to reject your new account application if the required identifying information is not provided. Your financial institution or intermediary may contact you in an attempt to collect any missing information required on the application, and your application may be rejected if they are unable to obtain this information. In certain instances, your financial institution or financial intermediary is required to collect documents, which will be used solely to establish and verify your identity. The Fund will accept investments and your order will be processed at the NAV next determined after receipt of your application in proper form (or upon receipt of all identifying information required on the application). The Fund, however, reserves the right to close and/or liquidate your account at the then-current day's price if the financial institution or financial intermediary that you open your account through is unable to verify your identity. As a result, you may be subject to a gain or loss on Fund shares and will be subject to corresponding tax implications. Customer identification and verification is part of the Fund's overall obligation to deter money laundering under Federal law. The Fund has adopted an Anti-Money Laundering Compliance Program designed to prevent the Fund from being used for money laundering or the financing of terrorist activities. In this regard, the Fund reserves the right to (i) refuse, cancel or rescind any purchase or exchange order, (ii) freeze any account and/or suspend account services or (iii) involuntarily close your account in cases of threatening conduct or suspected fraudulent or illegal activity. These actions will be taken when, in the sole discretion of Fund management, they are deemed to be in the best interest of the Fund or in cases when the Fund is requested or compelled to do so by governmental or law enforcement authority. If your account is closed at the request of governmental or law enforcement authority, you may not receive proceeds of the redemption if the Fund is required to withhold such proceeds. 9 HOW TO SELL YOUR FUND SHARES If you hold Class I Shares, you may sell your shares on any Business Day by following the procedures established when you opened your account or accounts. If you have questions, call 1-800-DIAL-SEI. If you own your shares through an account with a broker or other institution, contact that broker or institution to sell your shares. Your financial institution or intermediary may charge a fee for its services. The sale price of each share will be the next NAV determined after the Fund receives your request or after the Fund's authorized intermediary receives your request if transmitted to the Fund promptly in accordance with the Fund's procedures and applicable law. RECEIVING YOUR MONEY Normally, the Fund will make payment on your sale on the Business Day following the day on which it receives your request, but it may take up to seven days. You may arrange for your proceeds to be wired to your bank account. REDEMPTIONS IN KIND The Fund generally pays sale (redemption) proceeds in cash. However, under unusual conditions that make the payment of cash unwise (and for the protection of the Fund's remaining shareholders) the Fund might pay all or part of your redemption proceeds in liquid securities with a market value equal to the redemption price (redemption in kind). Although it is highly unlikely that your shares would ever be redeemed in kind, you would probably have to pay brokerage costs to sell the securities distributed to you, as well as taxes on any capital gains from the sale as with any redemption. SUSPENSION OF YOUR RIGHT TO SELL YOUR SHARES The Fund may suspend your right to sell your shares if the NYSE restricts trading, the SEC declares an emergency or for other reasons. More information about this is in the SAI. TELEPHONE TRANSACTIONS Purchasing and selling Fund shares over the telephone is extremely convenient, but not without risk. The Fund has certain safeguards and procedures to confirm the identity of callers and the authenticity of instructions. If the Fund follows these procedures, the Fund will not be responsible for any losses or costs incurred by following telephone instructions that the Fund reasonably believes to be genuine. DISTRIBUTION OF FUND SHARES SEI Investments Distribution Co. (SIDCo.) is the distributor of the shares of the Fund. SIDCo. receives no compensation for distributing the Fund's shares. For Class I Shares, shareholder and administrative servicing fees, as a percentage of average daily net assets, may each be up to 0.25%. 10 DIVIDENDS, DISTRIBUTIONS AND TAXES DIVIDENDS AND DISTRIBUTIONS The Fund periodically distributes its investment income to shareholders as a dividend. It is the Fund's policy to pay dividends at least once annually. The Fund makes distributions of capital gains, if any, at least annually. You will receive dividends and distributions in cash unless otherwise stated. TAXES PLEASE CONSULT YOUR TAX ADVISOR REGARDING YOUR SPECIFIC QUESTIONS ABOUT FEDERAL, STATE, LOCAL AND FOREIGN INCOME TAXES. Below the Fund has summarized some important tax issues that affect the Fund and its shareholders. This summary is based on current tax laws, which may change. At least annually, the Fund will distribute substantially all of its net investment income and its net realized capital gains, if any. The dividends and distributions you receive may be subject to federal, state and local taxation, depending upon your tax situation. If so, they are taxable whether or not you reinvest them. Income distributions are generally taxable at ordinary income tax rates except to the extent they are designated as qualified dividend income. Dividends that are qualified dividend income are eligible for the reduced maximum rate to individuals of 15% (5% for individuals in lower tax brackets) to the extent that the Fund receives qualified dividend income. Capital gains distributions and distributions of qualified dividend income are generally taxable at the rates applicable to long-term capital gains regardless of how long you have held your Fund shares. Long-term capital gains are currently taxable at the maximum rate of 15%. Absent further legislation, the maximum 15% rate on qualified dividend income and long-term capital gains will cease to apply to taxable years beginning after December 31, 2008. Each sale of Fund shares may be a taxable event. Currently, any capital gain or loss realized upon a sale of Fund shares is generally treated as long-term gain or loss if the shares have been held for more than one year. Capital gain or loss realized upon a sale of Fund shares held for one year or less is generally treated as short-term gain or loss, except that any capital loss on the sale of the Fund shares held for six months or less is treated as long-term capital loss to the extent that capital gain dividends were paid with respect to such Fund shares. Some foreign governments levy withholding taxes against dividend and interest income. Although in some countries a portion of these taxes is recoverable, the non-recovered portion will reduce the income received from the securities comprising the portfolios of the Fund. The Fund may elect to pass through to you your pro rata share of foreign income taxes paid by the Fund. The Fund will notify you if it makes such election. MORE INFORMATION ABOUT TAXES IS IN THE FUND'S SAI. 11 FINANCIAL HIGHLIGHTS The table that follows presents performance information about Class I Shares of the Fund. This information is intended to help you understand the Fund's financial performance for the past five years, or, if shorter, the period of the Fund's operations. Some of this information reflects financial information for a single Fund share. The total returns in the table represent the rate that you would have earned (or lost) on an investment in the Fund, assuming you reinvested all of your dividends and distributions. This information has been audited by PricewaterhouseCoopers LLP, independent accountants. Their report, along with the Fund's financial statements, appears in the annual report that accompanies the Fund's SAI. You can obtain the annual report, which contains more performance information, at no charge by calling 1-800-DIAL-SEI. FOR THE YEARS ENDED SEPTEMBER 30, FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
NET REALIZED AND UNREALIZED DISTRIBUTIONS NET ASSET GAINS DIVIDENDS FROM TOTAL FROM VALUE, NET (LOSSES) FROM NET REALIZED DIVIDENDS BEGINNING INVESTMENT ON TOTAL FROM INVESTMENT CAPITAL AND OF PERIOD INCOME SECURITIES OPERATIONS INCOME GAINS DISTRIBUTIONS - ------------------------------------------------------------------------------------------------------------------------- INTERNATIONAL EQUITY FUND CLASS I 2003 $ 6.93 $ 0.09(1) $ 1.20(1) $ 1.29 $ (0.02) $ -- $ (0.02) - ------------------------------------------------------------------------------------------------------------------------- 2002(2) 8.97 0.03 (2.07) (2.04) -- -- -- - ------------------------------------------------------------------------------------------------------------------------- RATIO OF RATIO OF NET ASSET RATIO OF NET EXPENSES VALUE, NET ASSETS EXPENSES INVESTMENT TO AVERAGE END END OF TO AVERAGE INCOME NET ASSETS PORTFOLIO OF TOTAL PERIOD NET TO AVERAGE (EXCLUDING TURNOVER PERIOD RETURN+ ($ THOUSANDS) ASSETS NET ASSETS WAIVERS) RATE - --------------------------------------------------------------------------------------------------------------------- INTERNATIONAL EQUITY FUND CLASS I 2003 $ 8.20 18.65% $ 2,061 1.53% 1.15% 1.57% 87% - --------------------------------------------------------------------------------------------------------------------- 2002(2) 6.93 (22.74) 639 1.53 0.61 1.54 70 - ---------------------------------------------------------------------------------------------------------------------
+ Returns are for the period indicated and have not been annualized. Total returns do not reflect applicable sales load. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. (1) Per share net investment income and net realized and unrealized gains/(losses) calculated using average shares. (2) Class I shares were offered beginning January 4, 2002. All ratios for the period have been annualized. Amounts designated as "--" are either $0 or have been rounded to $0. 11 NOTES: SEI INVESTMENTS More information about the Fund is available without charge through the following: STATEMENT OF ADDITIONAL INFORMATION (SAI) The SAI dated January 31, 2004, includes detailed information about the SEI Institutional International Trust. The SAI is on file with the SEC and is incorporated by reference into this prospectus. This means that the SAI, for legal purposes, is a part of this prospectus. ANNUAL AND SEMI-ANNUAL REPORTS These reports list the Fund's holdings and contain information from the Fund's managers about fund strategies, and market conditions and trends and their impact on Fund performance. The reports also contain detailed financial information about the Fund. TO OBTAIN AN SAI, ANNUAL OR SEMI-ANNUAL REPORT, OR MORE INFORMATION: By Telephone: Call 1-8OO-DIAL-SEI By Mail: Write to the Fund at: 1 Freedom Valley Drive Oaks, PA 19456 By Internet: http://www.seic.com From the SEC: You can also obtain the SAI or the Annual and Semi-Annual Reports, as well as other information about the SEI Institutional International Trust, from the EDGAR Database on the SEC's website ("http://www.sec.gov"). You may review and copy documents at the SEC Public Reference Room in Washington, DC (for information on the operation of the Public Reference Room, call 1-202-942-8090). You may request documents by mail from the SEC, upon payment of a duplicating fee, by writing to: Securities and Exchange Commission, Public Reference Section, Washington, DC 20549-0102. You may also obtain this information, upon payment of a duplicating fee, by e-mailing the SEC at the following address: publicinfo@sec.gov. SEI Institutional International Trust's Investment Company Act registration number is 811-5601. SEI-F-108 (1/04) SEI INSTITUTIONAL INTERNATIONAL TRUST CLASS Y SHARES PROSPECTUS JANUARY 31, 2004 EMERGING MARKETS EQUITY FUND INVESTMENT ADVISER: SEI INVESTMENTS MANAGEMENT CORPORATION INVESTMENT SUB-ADVISERS: ALLIANCE CAPITAL MANAGEMENT L.P. THE BOSTON COMPANY ASSET MANAGEMENT LLC CITIGROUP ASSET MANAGEMENT LIMITED EMERGING MARKETS MANAGEMENT, L.L.C. THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ABOUT THIS PROSPECTUS SEI Institutional International Trust is a mutual fund family that offers different classes of shares in separate investment portfolios (Funds). The Funds have individual investment goals and strategies and are designed primarily for institutional investors and financial institutions and their clients. This prospectus gives you important information about the Class Y Shares of the Emerging Markets Equity Fund that you should know before investing. Please read this prospectus and keep it for future reference. THIS PROSPECTUS HAS BEEN ARRANGED INTO DIFFERENT SECTIONS SO THAT YOU CAN EASILY REVIEW THIS IMPORTANT INFORMATION. ON THE NEXT PAGE, THERE IS SOME GENERAL INFORMATION YOU SHOULD KNOW ABOUT RISK AND RETURN. FOR MORE DETAILED INFORMATION ABOUT THE FUND, PLEASE SEE:
PAGE PRINCIPAL INVESTMENT STRATEGIES AND RISKS, PERFORMANCE INFORMATION AND EXPENSES XXX MORE INFORMATION ABOUT FUND INVESTMENTS XXX INVESTMENT ADVISER AND SUB-ADVISERS XXX PURCHASING AND SELLING FUND SHARES XXX DIVIDENDS, DISTRIBUTIONS AND TAXES XXX FINANCIAL HIGHLIGHTS XXX HOW TO OBTAIN MORE INFORMATION ABOUT SEI INSTITUTIONAL INTERNATIONAL TRUST Back Cover
2 GLOBAL ASSET ALLOCATION The Emerging Markets Equity Fund has its own distinct risk and reward characteristics, investment objective, policies and strategies. In addition to managing the Fund, SEI Investments Management Corporation (SIMC) constructs and maintains global asset allocation strategies for certain clients, and the Fund is designed in part to implement those strategies. The degree to which an investor's portfolio is invested in the particular market segments and/or asset classes represented by the Fund varies, as does the investment risk/return potential represented by the Fund. The Fund may have extremely volatile returns. Because of the historical lack of correlation among various asset classes, an investment in the Fund representing a range of asset classes as part of an asset allocation strategy may reduce the strategy's overall level of volatility. As a result, a global asset allocation strategy may reduce risk. In managing the Fund, SIMC focuses on four key principles: asset allocation, portfolio structure, the use of managers, and continuous portfolio management. Asset allocation across appropriate asset classes is the central theme of SIMC's investment philosophy. SIMC seeks to reduce risk further by creating a portfolio that focuses on a specific asset class. SIMC then oversees a network of managers who invest the assets of the Fund in distinct segments of the market or class represented by the Fund. These managers adhere to distinct investment disciplines, with the goal of providing greater consistency and predictability of results, as well as broader diversification across and within asset classes. Finally, SIMC regularly rebalances to ensure that the appropriate mix of assets is constantly in place, and constantly monitors and evaluates managers for the Fund to ensure that they do not deviate from their stated investment philosophy or process. RISK/RETURN INFORMATION The Emerging Markets Equity Fund is a mutual fund. A mutual fund pools shareholders' money and, using professional investment managers, invests it in securities. The Fund has an investment goal and strategies for reaching that goal. The Fund's assets are managed under the direction of SIMC and one or more Sub-Advisers who manage portions of the Fund's assets in a way that they believe will help the Fund achieve its goal. No matter how good a job SIMC and the Sub-Advisers do, you could lose money on your investment in the Fund, just as you could with other investments. A Fund share is not a bank deposit, and it is not insured or guaranteed by the FDIC or any other government agency. The value of your investment in the Fund is based on the market prices of the securities the Fund holds. These prices change daily due to economic and other events that affect securities markets generally, as well as those that affect particular companies and other issuers. These price movements, sometimes called volatility, may be greater or lesser depending on the types of securities the Fund owns and the markets in which they trade. The estimated level of volatility for the Fund is set forth in the Fund Summary that follows. The effect on the Fund of a change in the value of a single security will depend on how widely the Fund diversifies its holdings. 3 EMERGING MARKETS EQUITY FUND FUND SUMMARY INVESTMENT GOAL: Capital appreciation SHARE PRICE VOLATILITY: Very high PRINCIPAL INVESTMENT STRATEGY: Utilizing multiple sub-advisers, the Fund invests in equity securities of emerging markets companies INVESTMENT STRATEGY Under normal circumstances, the Emerging Markets Equity Fund will invest at least 80% of its net assets in equity securities of emerging markets issuers. The Fund will invest primarily in common stocks and other equity securities of foreign companies located in emerging market countries. The Fund normally maintains investments in at least six emerging market countries, and does not invest more than 35% of its total assets in any one emerging market country. The Fund uses a multi-manager approach, relying upon a number of Sub-Advisers with differing investment philosophies to manage portions of the Fund's portfolio under the general supervision of SIMC. Due to its investment strategy, the Fund may buy and sell securities frequently. This may result in higher transaction costs and additional capital gains tax liabilities. WHAT ARE THE RISKS OF INVESTING IN THE FUND? Since it purchases equity securities, the Fund is subject to the risk that stock prices will fall over short or extended periods of time. Historically, the equity markets have moved in cycles, and the value of the Fund's securities may fluctuate drastically from day to day. Individual companies may report poor results or be negatively affected by industry and/or economic trends and developments. The prices of securities issued by such companies may suffer a decline in response. In the case of foreign stocks, these fluctuations will reflect international economic and political events, as well as changes in currency valuations relative to the U.S. dollar. These factors contribute to price volatility, which is the principal risk of investing in the Fund. Investing in issuers located in foreign countries poses distinct risks since political and economic events unique to a country or region will affect those markets and their issuers. These events will not necessarily affect the U.S. economy or similar issuers located in the United States. In addition, investments in foreign countries are generally denominated in a foreign currency. As a result, changes in the value of those currencies compared to the U.S. dollar may affect (positively or negatively) the value of a Fund's investments. These currency movements may happen separately from and in response to events that do not otherwise affect the value of the security in the issuer's home country. These various risks will be even greater for investments in emerging market countries since political turmoil and rapid changes in economic conditions are more likely to occur in these countries. 4 Emerging market countries are countries that the World Bank or the United Nations considers to be emerging or developing. Emerging markets may be more likely to experience political turmoil or rapid changes in market or economic conditions than more developed countries. Emerging market countries often have less uniformity in accounting and reporting requirements and unreliable securities valuation. It is sometimes difficult to obtain and enforce court judgments in such countries and there is often a greater potential for nationalization and/or expropriation of assets by the government of an emerging market country. In addition, the financial stability of issuers (including governments) in emerging market countries may be more precarious than in other countries. As a result, there will tend to be an increased risk of price volatility associated with the Fund's investments in emerging market countries, which may be magnified by currency fluctuations relative to the U.S. dollar. The Fund is also subject to the risk that emerging market equity securities may underperform other segments of the equity markets or the equity markets as a whole. PERFORMANCE INFORMATION As of January 31, 2004, the Fund's Class Y Shares had not commenced operations, and did not have a performance history. Since Class Y Shares are invested in the same portfolio of securities, returns for Class Y Shares will be substantially similar to those of the Class A Shares, shown here, and will differ only to the extent that the Class Y Shares have lower expenses. The bar chart and the performance table below illustrate the risks and volatility of an investment in the Fund. Of course, the Fund's past performance does not necessarily indicate how the Fund will perform in the future. This bar chart shows changes in the performance of the Fund's Class A Shares from year to year for eight years. The performance information shown is based on full calendar years. 1996 8.70% 1997 -9.12% 1998 -31.95% 1999 70.31% 2000 -34.47% 2001 -2.46% 2002 -7.99% 2003 49.05%
BEST QUARTER WORST QUARTER 31.28% -27.41% (12/31/99) (09/30/98)
5 THIS TABLE COMPARES THE FUND'S AVERAGE ANNUAL TOTAL RETURNS FOR CLASS A SHARES FOR THE PERIODS ENDED DECEMBER 31, 2003 TO THOSE OF THE MORGAN STANLEY CAPITAL INTERNATIONAL (MSCI) EMERGING MARKETS FREE INDEX.
EMERGING MARKETS EQUITY FUND - CLASS A SHARES 1 YEAR 5 YEARS SINCE INCEPTION* - ----------------------------------------------------------------------------------------------------------------- RETURN BEFORE TAXES 49.05% 8.34% 0.68% RETURN AFTER TAXES ON DISTRIBUTIONS** 49.36% 8.43% 0.69% RETURN AFTER TAXES ON DISTRIBUTIONS AND SALE OF FUND SHARES** 32.31% 7.36% 0.62% MSCI EMERGING MARKETS FREE INDEX RETURN (REFLECTS NO DEDUCTION FOR FEES, EXPENSES, OR TAXES)*** 55.82% 10.51% 2.29%
* The inception date for the Fund's Class A Shares is January 17, 1995. Index returns shown from January 31, 1995. ** After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Your actual after-tax returns will depend on your tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. *** An index measures the market prices of a specific group of securities in a particular market or securities in a market sector. You cannot invest directly in an index. Unlike a mutual fund, an index does not have an investment adviser and does not pay any commissions or expenses. If an index had expenses, its performance would be lower. The MSCI Emerging Markets Free Index is a widely-recognized, capitalization-weighted (companies with larger market capitalizations have more influence than those with smaller capitalizations) index of over 800 stocks from approximately 17 different emerging market countries. FUND FEES AND EXPENSES THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD FUND SHARES. ANNUAL FUND OPERATING EXPENSES (EXPENSES DEDUCTED FROM FUND ASSETS)
CLASS Y SHARES - ---------------------------------------------------------------- Investment Advisory Fees 1.05% Distribution (12b-1) Fees None Other Expenses 0.84%* ---- Total Annual Fund Operating Expenses 1.89%**
- ---------- * Other expenses are based on estimated amounts for the current fiscal year. ** The Fund's total actual annual fund operating expenses for the current fiscal year are expected to be less than the amount shown above because the Adviser may waive a portion of the fees in order to keep total operating expenses, excluding interest expense, at a specified level. The Adviser may discontinue all or part of these waivers at any time. With these fee waivers, the Fund's actual total operating expenses are expected to be as follows: Emerging Markets Equity Fund -- Class Y Shares 1.70%
For more information about these fees, see "Investment Adviser and Sub-Advisers" and "Distribution of Fund Shares." 6 EXAMPLE This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and that you sell your shares at the end of the period. The Example also assumes that each year your investment has a 5% return, Fund operating expenses remain the same, and you reinvest all dividends and distributions. Although your actual costs and returns might be different, your approximate costs of investing $10,000 in the Fund would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS EMERGING MARKETS EQUITY FUND - CLASS Y SHARES $ 192 $ 594 $ 1,021 $ 2,212
7 MORE INFORMATION ABOUT FUND INVESTMENTS This prospectus describes the Fund's primary investment strategies. However, the Fund also may invest in other securities, use other strategies and engage in other investment practices. These investments and strategies, as well as those described in this prospectus, are described in detail in the Fund's Statement of Additional Information (SAI). The investments and strategies described in this prospectus are those that the Adviser and the Sub-Advisers use under normal conditions. During unusual economic or market conditions, or for temporary defensive or liquidity purposes, the Fund may invest up to 100% of its assets in cash, money market instruments, repurchase agreements and other short-term obligations that would not ordinarily be consistent with the Fund's objectives. The Fund will do so only if the Adviser or the Sub-Advisers believe that the risk of loss outweighs the opportunity for capital gains or higher income. Of course, there is no guarantee that the Fund will achieve its investment goal. INVESTMENT ADVISER AND SUB-ADVISERS SEI INVESTMENTS MANAGEMENT CORPORATION (SIMC) ACTS AS THE MANAGER OF MANAGERS OF THE FUND, AND IS RESPONSIBLE FOR THE INVESTMENT PERFORMANCE OF THE FUND SINCE IT ALLOCATES THE FUND'S ASSETS TO ONE OR MORE SUB-ADVISERS AND RECOMMENDS HIRING OR CHANGING SUB-ADVISERS TO THE BOARD OF TRUSTEES. Each Sub-Adviser makes investment decisions for the assets it manages and continuously reviews, supervises and administers its investment program. SIMC oversees the Sub-Advisers to ensure compliance with the Fund's investment policies and guidelines, and monitors each Sub-Adviser's adherence to its investment style. The Board of Trustees supervises SIMC and the Sub-Advisers; establishes policies that they must follow in their management activities; and oversees the hiring and termination of the Sub-Advisers recommended by SIMC. SIMC pays the Sub-Advisers out of the investment advisory fees it receives. SIMC, an SEC-registered adviser, located at One Freedom Valley Drive, Oaks, Pennsylvania 19456, serves as the Adviser to the Fund. As of November 30, 2003, SIMC had approximately $56 billion in assets under management. For the fiscal year ended September 30, 2003, SIMC received investment advisory fees, after fee waivers, as a percentage of the Fund's net assets, at the annual rate of 0.86%. 8 SUB-ADVISERS AND PORTFOLIO MANAGERS EMERGING MARKETS EQUITY FUND: ALLIANCE CAPITAL MANAGEMENT L.P.: Alliance Capital Management L.P. (Alliance Capital), located at 1345 Avenue of the Americas, New York, New York 10105, serves as a Sub-Adviser to the Emerging Markets Equity Fund. A committee of investment professionals at Alliance Capital manages the portion of the Emerging Markets Equity Fund's assets allocated to Alliance Capital. THE BOSTON COMPANY ASSET MANAGEMENT LLC: The Boston Company Asset Management LLC (The Boston Company), located at One Boston Place, Boston, Massachusetts 02108, serves as a Sub-Adviser to the Emerging Markets Equity Fund. D. Kirk Henry, CFA and Senior Vice President of The Boston Company, serves as portfolio manager for the portion of the assets of the Emerging Markets Equity Fund allocated to The Boston Company. Since joining The Boston Company in 1994, Mr. Henry has had primary responsibility for the firm's Emerging Markets Equity product and since January 1, 2003, responsibility for the International Equity product. CITIGROUP ASSET MANAGEMENT LIMITED: Citigroup Asset Management Limited (Citigroup), located at Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB, England, serves as a Sub-Adviser to the Emerging Markets Equity Fund. Aquico Wen, CFA, CPA, Roger Garret, Chris Lively, Erda Gercek, and Olivier Lemaigre manage the portion of the Emerging Markets Equity Fund's assets allocated to Citigroup. Mr. Wen has been with Citigroup since 1998 and has 9 years of industry experience. Mr. Garret has been with Citigroup since 1991 and has 13 years of experience. Prior to joining Citigroup in 2000, Mr. Lively was an Analyst and Portfolio Manager for Pioneer Group, Inc. He has 9 years of experience. Ms. Gercek has been with Citigroup since 1989 and has 12 years of experience. Mr. Lemaigre has been with Citigroup since 1993 and has 10 years of experience in emerging markets. EMERGING MARKETS MANAGEMENT, L.L.C.: Emerging Markets Management, L.L.C. (EMM), located at 1001 Nineteenth Street North, 17th Floor, Arlington, Virginia 22209-1722, serves as a Sub-Adviser to the Emerging Markets Equity Fund. A team of investment professionals at EMM manages the portion of the assets of the Emerging Markets Equity Fund allocated to EMM. PURCHASING AND SELLING FUND SHARES This section tells you how to purchase and sell (sometimes called redeem) Class Y Shares of the Fund. The Fund offers Class Y Shares only to financial institutions and intermediaries for their own or their customers' accounts. For information on how to open an account and set up procedures for placing transactions, call 1-800-DIAL-SEI. 9 HOW TO PURCHASE FUND SHARES You may purchase shares on any day that the New York Stock Exchange (NYSE) is open for business (a Business Day). Financial institutions and intermediaries may purchase Class Y Shares by placing orders with the Fund's Transfer Agent (or its authorized agent). Institutions and intermediaries that use certain SEI proprietary systems may place orders electronically through those systems. Cash investments must be transmitted or delivered in federal funds to the Fund's wire agent by the close of business on the day after the order is placed. The Fund reserves the right to refuse any purchase requests, particularly those that would not be in the best interests of the Fund or its shareholders and could adversely affect the Fund or its operations. This includes those from any individual or group who, in the Fund's view, are likely to engage in excessive trading (usually defined as more than four transactions out of the Fund within a calendar year). When you purchase or sell Fund shares through certain financial institutions (rather than directly from the Fund), you may have to transmit your purchase and sale requests to these financial institutions at an earlier time for your transaction to become effective that day. This allows these financial institutions time to process your requests and transmit them to the Fund. Certain other intermediaries, including certain broker-dealers and shareholder organizations, are authorized to accept purchase and redemption requests for Fund shares. These requests are executed at the net asset value per share (NAV) next determined after the intermediary receives the request if transmitted to the Fund promptly in accordance with the Fund's procedures and applicable law. These authorized intermediaries are responsible for transmitting requests and delivering funds on a timely basis. If you deal directly with a financial institution or financial intermediary, you will have to follow the institution's or intermediary's procedures for transacting with the Fund. For more information about how to purchase or sell Fund shares through your financial institution, you should contact your financial institution directly. Investors may be charged a fee for purchase and/or redemption transactions effectuated through certain broker-dealers or other financial intermediaries. The Fund calculates its NAV once each Business Day as of the close of normal trading on the NYSE (normally, 4:00 p.m. Eastern time). So, for you to receive the current Business Day's NAV, the Fund (or an authorized agent) must receive your purchase order in proper form before 4:00 p.m. Eastern time. The Fund will not accept orders that request a particular day or price for the transaction or any other special conditions. HOW THE FUND CALCULATES NAV NAV for one Fund share is the value of that share's portion of the net assets of the Fund. In calculating NAV, the Fund generally values its investment portfolio at market price. If market prices are unavailable or the Fund thinks that they are unreliable, fair value prices may be determined in good faith using methods approved by the Board of Trustees. The Fund holds portfolio securities that are listed on foreign exchanges. These securities may trade on weekends or other days when the Fund does not calculate NAV. As a result, the market value of the Fund's investments may change on days when you cannot purchase or sell Fund shares. 10 MINIMUM PURCHASES To purchase Class Y Shares for the first time, you must invest at least $100,000 in the Fund with minimum subsequent investments of at least $1,000. The Fund may accept investments of smaller amounts at its discretion. FOREIGN INVESTORS The Fund does not generally accept investments by non-U.S. persons. Non-U.S. persons may be permitted to invest in the Fund subject to the satisfaction of enhanced due diligence. CUSTOMER IDENTIFICATION AND VERIFICATION AND ANTI-MONEY LAUNDERING PROGRAM Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. Accounts for the Fund are generally opened through other financial institutions or financial intermediaries. When you open your account through your financial institution or financial intermediary, you will have to provide your name, address, date of birth, identification number and other information that will allow the financial institution or financial intermediary to identify you. This information is subject to verification by the financial institution or financial intermediary to ensure the identity of all persons opening an account. Your financial institution or financial intermediary is required by law to reject your new account application if the required identifying information is not provided. Your financial institution or intermediary may contact you in an attempt to collect any missing information required on the application, and your application may be rejected if they are unable to obtain this information. In certain instances, your financial institution or financial intermediary is required to collect documents, which will be used solely to establish and verify your identity. The Fund will accept investments and your order will be processed at the NAV next determined after receipt of your application in proper form (or upon receipt of all identifying information required on the application). The Fund, however, reserves the right to close and/or liquidate your account at the then-current day's price if the financial institution or financial intermediary that you open your account through is unable to verify your identity. As a result, you may be subject to a gain or loss on Fund shares and will be subject to corresponding tax implications. Customer identification and verification is part of the Fund's overall obligation to deter money laundering under Federal law. The Fund has adopted an Anti-Money Laundering Compliance Program designed to prevent the Fund from being used for money laundering or the financing of terrorist activities. In this regard, the Fund reserves the right to (i) refuse, cancel or rescind any purchase or exchange order, (ii) freeze any account and/or suspend account services or (iii) involuntarily close your account in cases of threatening conduct or suspected fraudulent or illegal activity. These actions will be taken when, in the sole discretion of Fund management, they are deemed to be in the best interest of the Fund or in cases when the Fund is requested or compelled to do so by governmental or law enforcement authority. If your account is closed at the request of governmental or law enforcement authority, you may not receive proceeds of the redemption if the Fund is required to withhold such proceeds. 11 HOW TO SELL YOUR FUND SHARES If you hold Class Y Shares, you may sell your shares on any Business Day by following the procedures established when you opened your account or accounts. If you have questions, call 1-800-DIAL-SEI. If you own your shares through an account with a broker or other institution, contact that broker or institution to sell your shares. Your financial institution or intermediary may charge a fee for its services. The sale price of each share will be the next NAV determined after the Fund receives your request or after the Fund's authorized intermediary receives your request if transmitted to the Fund promptly in accordance with the Fund's procedures and applicable law. RECEIVING YOUR MONEY Normally, the Fund will make payment on your sale on the Business Day following the day on which it receives your request, but it may take up to seven days. You may arrange for your proceeds to be wired to your bank account. REDEMPTIONS IN KIND The Fund generally pays sale (redemption) proceeds in cash. However, under unusual conditions that make the payment of cash unwise (and for the protection of the Fund's remaining shareholders) the Fund might pay all or part of your redemption proceeds in liquid securities with a market value equal to the redemption price (redemption in kind). Although it is highly unlikely that your shares would ever be redeemed in kind, you would probably have to pay brokerage costs to sell the securities distributed to you, as well as taxes on any capital gains from the sale as with any redemption. SUSPENSION OF YOUR RIGHT TO SELL YOUR SHARES The Fund may suspend your right to sell your shares if the NYSE restricts trading, the SEC declares an emergency or for other reasons. More information about this is in the SAI. TELEPHONE TRANSACTIONS Purchasing and selling Fund shares over the telephone is extremely convenient, but not without risk. The Fund has certain safeguards and procedures to confirm the identity of callers and the authenticity of instructions. If the Fund follows these procedures, the Fund will not be responsible for any losses or costs incurred by following telephone instructions that the Fund reasonably believes to be genuine. DISTRIBUTION OF FUND SHARES SEI Investments Distribution Co. (SIDCo.) is the distributor of the shares of the Fund. SIDCo. receives no compensation for distributing the Fund's Class Y Shares. 12 DIVIDENDS, DISTRIBUTIONS AND TAXES DIVIDENDS AND DISTRIBUTIONS The Fund periodically distributes its investment income to shareholders as a dividend. It is the Fund's policy to pay dividends at least once annually. The Fund makes distributions of capital gains, if any, at least annually. You will receive dividends and distributions in cash unless otherwise stated. TAXES PLEASE CONSULT YOUR TAX ADVISOR REGARDING YOUR SPECIFIC QUESTIONS ABOUT FEDERAL, STATE, LOCAL AND FOREIGN INCOME TAXES. Below the Fund has summarized some important tax issues that affect the Fund and its shareholders. This summary is based on current tax laws, which may change. At least annually, the Fund will distribute substantially all of its net investment income and its net realized capital gains, if any. The dividends and distributions you receive from the Fund may be subject to federal, state and local taxation, depending upon your tax situation. If so, they are taxable whether or not you reinvest them. Income distributions are generally taxable at ordinary income tax rates except to the extent they are designated as qualified dividend income. Dividends that are qualified dividend income are eligible for the reduced maximum rate to individuals of 15% (5% for individuals in lower tax brackets) to the extent that the Fund receives qualified dividend income. Capital gains distributions and distributions of qualified dividend income are generally taxable at the rates applicable to long-term capital gains regardless of how long you have held your Fund shares. Long-term capital gains are currently taxable at the maximum rate of 15%. Absent further legislation, the maximum 15% rate on qualified dividend income and long-term capital gains will cease to apply to taxable years beginning after December 31, 2008. Each sale of Fund shares may be a taxable event. Currently, any capital gain or loss realized upon a sale of Fund shares is generally treated as long-term gain or loss if the shares have been held for more than one year. Capital gain or loss realized upon a sale of Fund shares held for one year or less is generally treated as short-term gain or loss, except that any capital loss on the sale of the Fund shares held for six months or less is treated as long-term capital loss to the extent that capital gain dividends were paid with respect to such Fund shares. Some foreign governments levy withholding taxes against dividend and interest income. Although in some countries a portion of these taxes is recoverable, the non-recovered portion will reduce the income received from the securities comprising the portfolios of the Fund. The Fund may elect to pass through to you your pro rata share of foreign income taxes paid by the Fund. The Fund will notify you if it makes such election. MORE INFORMATION ABOUT TAXES IS IN THE FUND'S SAI. 13 FINANCIAL HIGHLIGHTS The table that follows presents performance information about Class A Shares of the Fund. Since Class Y Shares are invested in the same portfolio of securities, returns for Class Y Shares will be substantially similar to those of the Class A Shares, shown here, and will differ only to the extent that the Class Y Shares have lower expenses. This information is intended to help you understand the Fund's financial performance for the past five years. Some of this information reflects financial information for a single Fund share. The total returns in the table represent the rate that you would have earned (or lost) on an investment in the Fund, assuming you reinvested all of your dividends and distributions. This information has been audited by PricewaterhouseCoopers LLP, independent accountants. Their report, along with the Fund's financial statements, appears in the annual report that accompanies the Fund's SAI. You can obtain the annual report, which contains more performance information, at no charge by calling 1-800-DIAL-SEI. 14 FOR THE YEARS ENDED SEPTEMBER 30, FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
NET REALIZED DIVIDENDS AND NET ASSET AND DISTRIBUTIONS VALUE, NET UNREALIZED FROM NET DISTRIBUTIONS TOTAL FROM BEGINNING INVESTMENT GAINS (LOSSES) TOTAL FROM INVESTMENT FROM REALIZED DIVIDENDS AND OF PERIOD INCOME (LOSS) ON SECURITIES OPERATIONS INCOME CAPITAL GAINS DISTRIBUTIONS - ----------------------------------------------------------------------------------------------------------------------------------- EMERGING MARKETS EQUITY FUND CLASS A 2003 $ 6.53 $ 0.05(1) $ 2.42(1) $ 2.47 $ -- $ -- $ -- 2002 6.08 0.01 0.47 0.48 (0.03) -- (0.03) 2001 9.19 0.04 (3.15) (3.11) -- -- -- 2000 9.13 (0.05)(1) 0.12(1) 0.07 (0.01) -- (0.01) 1999 6.17 (0.03) 3.00 2.97 (0.01) -- (0.01) RATIO OF RATIO OF NET EXPENSES NET ASSETS RATIO OF INVESTMENT TO AVERAGE NET ASSET END OF EXPENSES INCOME (LOSS) NET ASSETS PORTFOLIO VALUE, END TOTAL PERIOD TO AVERAGE TO AVERAGE (EXCLUDING TURNOVER OF PERIOD RETURN+ ($ THOUSANDS) NET ASSETS NET ASSETS WAIVERS) RATE - ----------------------------------------------------------------------------------------------------------------------------- EMERGING MARKETS EQUITY FUND CLASS A 2003 $ 9.00 37.83% $ 936,560 1.95% 0.71% 2.14% 69% 2002 6.53 7.78 739,880 1.95 0.08 2.14 109 2001 6.08 (33.84) 1,010,428 1.95 0.54 2.13 126 2000 9.19 0.71 1,285,033 1.96 (0.46) 2.12 110 1999 9.13 48.23 866,911 1.95 (0.35) 2.14 129
+ RETURNS ARE FOR THE PERIOD INDICATED AND HAVE NOT BEEN ANNUALIZED. (1) PER SHARE NET INVESTMENT INCOME AND NET REALIZED AND UNREALIZED GAINS (LOSSES) CALCULATED USING AVERAGE SHARES. AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. 15 SEI INSTITUTIONAL INTERNATIONAL TRUST INVESTMENT ADVISER SEI Investments Management Corporation One Freedom Valley Drive Oaks, PA 19456 DISTRIBUTOR SEI Investments Distribution Co. One Freedom Valley Drive Oaks, PA 19456 LEGAL COUNSEL Morgan, Lewis & Bockius LLP More information about the Fund is available without charge through the following: STATEMENT OF ADDITIONAL INFORMATION (SAI) The SAI dated January 31, 2004 includes detailed information about the SEI Institutional International Trust. The SAI is on file with the SEC and is incorporated by reference into this prospectus. This means that the SAI, for legal purposes, is a part of this prospectus. ANNUAL AND SEMI-ANNUAL REPORTS These reports list the Fund's holdings and contain information from the Fund's managers about fund strategies, and market conditions and trends and their impact on Fund performance. The reports also contain detailed financial information about the Fund. TO OBTAIN AN SAI, ANNUAL OR SEMI-ANNUAL REPORT, OR MORE INFORMATION: BY TELEPHONE: Call 1-800-DIAL-SEI BY MAIL: Write to the Fund at: One Freedom Valley Drive Oaks, PA 19456 BY INTERNET: http://www.seic.com 16 FROM THE SEC: You can obtain the SAI or the Annual and Semi-Annual Reports, as well as other information about the SEI Institutional International Trust, from the EDGAR Database on the SEC's website ("http://www.sec.gov"). You may review and copy documents at the SEC Public Reference Room in Washington, DC (for information on the operation of the Public Reference Room, call 1-202-942-8090). You may request documents by mail from the SEC, upon payment of a duplicating fee, by writing to: Securities and Exchange Commission, Public Reference Section, Washington, DC 20549-0102. You may also obtain this information, upon payment of a duplicating fee, by e-mailing the SEC at the following address: publicinfo@sec.gov. SEI Institutional International Trust's Investment Company Act registration number is 811-5601. 17 SEI INSTITUTIONAL INTERNATIONAL TRUST CLASS A SHARES CLASS A SHARES OF THE TAX-MANAGED INTERNATIONAL EQUITY FUND ARE CURRENTLY NOT BEING OFFERED PROSPECTUS JANUARY 31, 2004 TAX-MANAGED INTERNATIONAL EQUITY FUND INVESTMENT ADVISER: SEI INVESTMENTS MANAGEMENT CORPORATION [INVESTMENT SUB-ADVISERS:] [ ] THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ABOUT THIS PROSPECTUS SEI Institutional International Trust is a mutual fund family that offers different classes of shares in separate investment portfolios (Funds). The Funds have individual investment goals and strategies and are designed primarily for institutional investors and financial institutions and their clients. This prospectus gives you important information about the Class A Shares of the Tax-Managed International Equity Fund that you should know before investing. Please read this prospectus and keep it for future reference. THIS PROSPECTUS HAS BEEN ARRANGED INTO DIFFERENT SECTIONS SO THAT YOU CAN EASILY REVIEW THIS IMPORTANT INFORMATION. ON THE NEXT PAGE, THERE IS SOME GENERAL INFORMATION YOU SHOULD KNOW ABOUT RISK AND RETURN. FOR MORE DETAILED INFORMATION ABOUT THE FUND, PLEASE SEE:
PAGE PRINCIPAL INVESTMENT STRATEGIES AND RISKS, PERFORMANCE INFORMATION AND EXPENSES XXX MORE INFORMATION ABOUT FUND INVESTMENTS XXX INVESTMENT ADVISER AND SUB-ADVISERS XXX PURCHASING AND SELLING FUND SHARES XXX DIVIDENDS, DISTRIBUTIONS AND TAXES XXX HOW TO OBTAIN MORE INFORMATION ABOUT SEI INSTITUTIONAL INTERNATIONAL TRUST Back Cover
2 GLOBAL ASSET ALLOCATION The Tax-Managed International Equity Fund has its own distinct risk and reward characteristics, investment objective, policies and strategies. In addition to managing the Fund, SEI Investments Management Corporation (SIMC) constructs and maintains global asset allocation strategies for certain clients, and the Fund is designed in part to implement those strategies. The degree to which an investor's portfolio is invested in the particular market segments and/or asset classes represented by the Fund varies, as does the investment risk/return potential represented by the Fund. The Fund may have extremely volatile returns. Because of the historical lack of correlation among various asset classes, an investment in the Fund representing a range of asset classes as part of a global asset allocation strategy may reduce the strategy's overall level of volatility. As a result, a global asset allocation strategy may reduce risk. In managing the Fund, SIMC focuses on four key principles: asset allocation, portfolio structure, the use of managers, and continuous portfolio management. Asset allocation across appropriate asset classes is the central theme of SIMC's investment philosophy. SIMC seeks to reduce risk further by creating a portfolio that focuses on a specific asset class. SIMC then oversees a network of managers who invest the assets of the Fund in distinct segments of the market or class represented by the Fund. These managers adhere to distinct investment disciplines, with the goal of providing greater consistency and predictability of results, as well as broader diversification across and within asset classes. Finally, SIMC regularly rebalances to ensure that the appropriate mix of assets is constantly in place, and constantly monitors and evaluates managers for the Fund to ensure that they do not deviate from their stated investment philosophy or process. 3 RISK/RETURN INFORMATION The Tax-Managed International Equity Fund is a mutual fund. A mutual fund pools shareholders' money and, using professional investment managers, invests it in securities. The Fund has its own investment goal and strategies for reaching that goal. The Fund's assets are managed under the direction of SIMC and one or more Sub-Advisers manage the Fund's assets in a way that they believe will help the Fund achieve its goal. No matter how good a job SIMC and the Sub-Advisers do, you could lose money on your investment in the Fund, just as you could with other investments. A Fund share is not a bank deposit, and it is not insured or guaranteed by the FDIC or any other government agency. The value of your investment in the Fund is based on the market prices of the securities the Fund holds. These prices change daily due to economic and other events that affect securities markets generally, as well as those that affect particular companies and other issuers. These price movements, sometimes called volatility, may be greater or lesser depending on the types of securities the Fund owns and the markets in which they trade. The estimated level of volatility for the Fund is set forth in the Fund Summary that follows. The effect on the Fund of a change in the value of a single security will depend on how widely the Fund diversifies its holdings. 4 TAX-MANAGED INTERNATIONAL EQUITY FUND FUND SUMMARY INVESTMENT GOAL Long-term capital appreciation SHARE PRICE VOLATILITY Medium to high PRINCIPAL INVESTMENT STRATEGY Utilizing multiple sub-advisers, the Fund minimizes the current tax impact on shareholders by buying and holding equity securities of foreign companies with lower dividend yields INVESTMENT STRATEGY Under normal circumstances, the Tax-Managed International Equity Fund will invest at least 80% of its net assets in equity securities. The Fund will invest primarily in common stocks and other equity securities of issuers of all capitalization ranges that are located in at least three countries other than the United States. The Fund invests primarily in companies located in developed countries, but may also invest in companies located in emerging markets. The Fund uses a multi-manager approach, relying upon a number of Sub-Advisers with differing investment philosophies to manage portions of the Fund's portfolio under the general supervision of SIMC. Generally, the Sub-Advisers attempt to minimize current taxes by using a "buy and hold" strategy, but they will also utilize such techniques as investing in companies that pay relatively low dividends; selling stocks with the highest tax cost first; and offsetting losses against gains where possible. To protect against loss of value during periods of market decline, the Sub-Advisers may use a variety of hedging techniques, such as buying put options, selling index futures, short selling "against the box" and entering into equity swaps. WHAT ARE THE RISKS OF INVESTING IN THE FUND? Since it purchases equity securities, the Fund is subject to the risk that stock prices will fall over short or extended periods of time. Historically, the equity markets have moved in cycles, and the value of the Fund's securities may fluctuate drastically from day to day. Individual companies may report poor results or be negatively affected by industry and/or economic trends and developments. The prices of securities issued by such companies may suffer a decline in response. In the case of foreign stocks, these fluctuations will reflect international economic and political events, as well as changes in currency valuations relative to the U.S. dollar. These factors contribute to price volatility, which is the principal risk of investing in the Fund. Investing in issuers located in foreign countries poses distinct risks since political and economic events unique to a country or region will affect those markets and their issuers. These events will not necessarily affect the U.S. economy or similar issuers located in the United States. In addition, investments in foreign countries are generally denominated in a foreign currency. As a result, changes in the value of those currencies compared to the U.S. dollar may affect (positively or negatively) the value of the Fund's investments. These currency movements may happen separately from and in response to events that do not otherwise affect the value of the security in the issuer's home country. These various risks will be even greater for investments in emerging 5 market countries since political turmoil and rapid changes in economic conditions are more likely to occur in these countries. The Fund is also subject to the risk that developed international equity securities may underperform other segments of the equity markets or the equity markets as a whole. The Fund is managed to minimize tax consequences to investors, but will likely earn taxable income and gains from time to time. PERFORMANCE INFORMATION As of January 31, 2004, the Fund had not commenced operations, and did not have a performance history. FUND FEES AND EXPENSES THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD FUND SHARES. ANNUAL FUND OPERATING EXPENSES (EXPENSES DEDUCTED FROM FUND ASSETS)
CLASS A SHARES - ---------------------------------------------------------------------------- Investment Advisory Fees 0.51% Distribution (12b-1) Fees None Other Expenses 0.78%* ---- Total Annual Fund Operating Expenses 1.29%**
- ------ * Other expenses are based on estimated amounts for the current fiscal year. ** The Fund's total actual annual fund operating expenses for the current fiscal year are expected to be less than the amount shown above because the Adviser may waive a portion of the fees in order to keep total operating expenses, excluding interest expense, at a specified level. The Adviser may discontinue all or part of these waivers at any time. With these fee waivers, the Fund's actual total operating expenses are expected to be as follows: Tax-Managed International Equity Fund--Class A Shares 1.28%
For more information about these fees, see "Investment Adviser and Sub-Advisers" and "Distribution of Fund Shares." EXAMPLE This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and that you sell your shares at the end of the period. The Example also assumes that each year your investment has a 5% return, Fund operating expenses remain the same, and you reinvest all dividends and distributions. Although your actual costs and returns might be different, your approximate costs of investing $10,000 in the Fund would be:
1 YEAR 3 YEARS TAX-MANAGED INTERNATIONAL EQUITY FUND - CLASS A SHARES $ 131 $ 409
6 MORE INFORMATION ABOUT FUND INVESTMENTS This prospectus describes the Fund's primary investment strategies. However, the Fund also may invest in other securities, use other strategies and engage in other investment practices. These investments and strategies, as well as those described in this prospectus, are described in detail in the Fund's Statement of Additional Information (SAI). The investments and strategies described in this prospectus are those that SIMC and the Sub-Advisers use under normal conditions. During unusual economic or market conditions, or for temporary defensive or liquidity purposes, the Fund may invest up to 100% of its assets in cash, money market instruments, repurchase agreements and other short-term obligations that would not ordinarily be consistent with the Fund's objectives. The Fund will do so only if SIMC or the Sub-Adviser believes that the risk of loss outweighs the opportunity for capital gains or higher income. Of course, there is no guarantee that the Fund will achieve its investment goal. INVESTMENT ADVISER AND SUB-ADVISERS SIMC ACTS AS THE MANAGER OF MANAGERS OF THE FUND, AND IS RESPONSIBLE FOR THE INVESTMENT PERFORMANCE OF THE FUND SINCE IT ALLOCATES THE FUND'S ASSETS TO ONE OR MORE SUB-ADVISERS AND RECOMMENDS HIRING OR CHANGING SUB-ADVISERS TO THE BOARD OF TRUSTEES. Each Sub-Adviser makes investment decisions for the assets it manages and continuously reviews, supervises and administers its investment program. SIMC oversees the Sub-Advisers to ensure compliance with the Fund's investment policies and guidelines, and monitors each Sub-Adviser's adherence to its investment style. The Board of Trustees supervises SIMC and the Sub-Advisers; establishes policies that they must follow in their management activities; and oversees the hiring and termination of the Sub-Advisers recommended by SIMC. SIMC pays the Sub-Advisers out of the investment advisory fees it receives. SIMC, an SEC-registered adviser, located at One Freedom Valley Drive, Oaks, PA 19456, serves as the Adviser to the Fund. As of November 30, 2003, SIMC had approximately $56 billion in assets under management. It is expected that SIMC will receive investment advisory fees of 0.51% of the average daily net assets of the Fund. SUB-ADVISERS AND PORTFOLIO MANAGERS [ ] PURCHASING AND SELLING FUND SHARES This section tells you how to purchase and sell (sometimes called redeem) Class A Shares of the Fund. The Fund offers Class A Shares only to financial institutions and intermediaries for their own or their customers' accounts. For information on how to open an account and set up procedures for placing transactions, call 1-800-DIAL-SEI. 7 HOW TO PURCHASE FUND SHARES You may purchase shares on any day that the New York Stock Exchange (NYSE) is open for business (a Business Day). Financial institutions and intermediaries may purchase Class A Shares by placing orders with the Fund's Transfer Agent (or its authorized agent). Institutions and intermediaries that use certain SEI proprietary systems may place orders electronically through those systems. Cash investments must be transmitted or delivered in federal funds to the Fund's wire agent by the close of business on the day after the order is placed. The Fund reserves the right to refuse any purchase requests, particularly those that would not be in the best interests of the Fund or its shareholders and could adversely affect the Fund or its operations. This includes those from any individual or group who, in the Fund's view, are likely to engage in excessive trading (usually defined as more than four transactions out of the Fund within a calendar year). When you purchase or sell Fund shares through certain financial institutions (rather than directly from the Fund), you may have to transmit your purchase and sale requests to these financial institutions at an earlier time for your transaction to become effective that day. This allows these financial institutions time to process your requests and transmit them to the Fund. Certain other intermediaries, including certain broker-dealers and shareholder organizations, are authorized to accept purchase and redemption requests for Fund shares. These requests are executed at the net asset value per share (NAV) next determined after the intermediary receives the request if transmitted to the Fund promptly in accordance with the Fund's procedures and applicable law. These authorized intermediaries are responsible for transmitting requests and delivering funds on a timely basis. If you deal directly with a financial institution or financial intermediary, you will have to follow the institution's or intermediary's procedures for transacting with the Fund. For more information about how to purchase or sell Fund shares through your financial institution, you should contact your financial institution directly. Investors may be charged a fee for purchase and/or redemption transactions effectuated through certain broker-dealers or other financial intermediaries. The Fund calculates its NAV once each Business Day as of the close of normal trading on the NYSE (normally, 4:00 p.m. Eastern time). So, for you to receive the current Business Day's NAV, the Fund (or an authorized agent) must receive your purchase order in proper form before 4:00 p.m. Eastern time. The Fund will not accept orders that request a particular day or price for the transaction or any other special conditions. HOW THE FUND CALCULATES NAV NAV for one Fund share is the value of that share's portion of the net assets of the Fund. In calculating NAV, the Fund generally values its investment portfolio at market price. If market prices are unavailable or the Fund thinks that they are unreliable, fair value prices may be determined in good faith using methods approved by the Board of Trustees. The Fund holds portfolio securities that are listed on foreign exchanges. These securities may trade on weekends or other days when the Fund does not calculate NAV. As a result, the market value of the Fund's investments may change on days when you cannot purchase or sell Fund shares. 8 MINIMUM PURCHASES To purchase Class A Shares for the first time, you must invest at least $100,000 in the Fund with minimum subsequent investments of at least $1,000. The Fund may accept investments of smaller amounts at its discretion. FOREIGN INVESTORS The Fund does not generally accept investments by non-U.S. persons. Non-U.S. persons may be permitted to invest in the Fund subject to the satisfaction of enhanced due diligence. CUSTOMER IDENTIFICATION AND VERIFICATION AND ANTI-MONEY LAUNDERING PROGRAM Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. Accounts for the Fund are generally opened through other financial institutions or financial intermediaries. When you open your account through your financial institution or financial intermediary, you will have to provide your name, address, date of birth, identification number and other information that will allow the financial institution or financial intermediary to identify you. This information is subject to verification by the financial institution or financial intermediary to ensure the identity of all persons opening an account. Your financial institution or financial intermediary is required by law to reject your new account application if the required identifying information is not provided. Your financial institution or intermediary may contact you in an attempt to collect any missing information required on the application, and your application may be rejected if they are unable to obtain this information. In certain instances, your financial institution or financial intermediary is required to collect documents, which will be used solely to establish and verify your identity. The Fund will accept investments and your order will be processed at the NAV next determined after receipt of your application in proper form (or upon receipt of all identifying information required on the application). The Fund, however, reserves the right to close and/or liquidate your account at the then-current day's price if the financial institution or financial intermediary that you open your account through is unable to verify your identity. As a result, you may be subject to a gain or loss on Fund shares and will be subject to corresponding tax implications. Customer identification and verification is part of the Fund's overall obligation to deter money laundering under Federal law. The Fund has adopted an Anti-Money Laundering Compliance Program designed to prevent the Fund from being used for money laundering or the financing of terrorist activities. In this regard, the Fund reserves the right to (i) refuse, cancel or rescind any purchase or exchange order, (ii) freeze any account and/or suspend account services or (iii) involuntarily close your account in cases of threatening conduct or suspected fraudulent or illegal activity. These actions will be taken when, in the sole discretion of Fund management, they are deemed to be in the best interest of the Fund or in cases when the Fund is requested or compelled to do so by governmental or law enforcement authority. If your account is closed at the request of governmental or law enforcement authority, you may not receive proceeds of the redemption if the Fund is required to withhold such proceeds. 9 HOW TO SELL YOUR FUND SHARES If you hold Class A Shares, you may sell your shares on any Business Day by following the procedures established when you opened your account or accounts. If you have questions, call 1-800-DIAL-SEI. If you own your shares through an account with a broker or other institution, contact that broker or institution to sell your shares. Your financial institution or intermediary may charge a fee for its services. The sale price of each share will be the next NAV determined after the Fund receives your request or after the Fund's authorized intermediary receives your request if transmitted to the Fund promptly in accordance with the Fund's procedures and applicable law. RECEIVING YOUR MONEY Normally, the Fund will make payment on your sale on the Business Day following the day on which it receives your request, but it may take up to seven days. You may arrange for your proceeds to be wired to your bank account. REDEMPTIONS IN KIND The Fund generally pays sale (redemption) proceeds in cash. However, under unusual conditions that make the payment of cash unwise (and for the protection of the Fund's remaining shareholders) the Fund might pay all or part of your redemption proceeds in liquid securities with a market value equal to the redemption price (redemption in kind). Although it is highly unlikely that your shares would ever be redeemed in kind, you would probably have to pay brokerage costs to sell the securities distributed to you, as well as taxes on any capital gains from the sale as with any redemption. SUSPENSION OF YOUR RIGHT TO SELL YOUR SHARES The Fund may suspend your right to sell your shares if the NYSE restricts trading, the SEC declares an emergency or for other reasons. More information about this is in the SAI. TELEPHONE TRANSACTIONS Purchasing and selling Fund shares over the telephone is extremely convenient, but not without risk. The Fund has certain safeguards and procedures to confirm the identity of callers and the authenticity of instructions. If the Fund follows these procedures, the Fund will not be responsible for any losses or costs incurred by following telephone instructions that the Fund reasonably believes to be genuine. DISTRIBUTION OF FUND SHARES SEI Investments Distribution Co. (SIDCo.) is the distributor of the shares of the Fund. SIDCo. receives no compensation for distributing the Fund's shares. For Class A Shares, shareholder servicing fees, as a percentage of average daily net assets, may be up to 0.25%. 10 DIVIDENDS, DISTRIBUTIONS AND TAXES DIVIDENDS AND DISTRIBUTIONS The Fund periodically distributes its investment income to shareholders as a dividend. It is the policy of the Fund to pay dividends at least once annually. The Fund makes distributions of capital gains, if any, at least annually. You will receive dividends and distributions in cash unless otherwise stated. TAXES PLEASE CONSULT YOUR TAX ADVISOR REGARDING YOUR SPECIFIC QUESTIONS ABOUT FEDERAL, STATE, LOCAL AND FOREIGN INCOME TAXES. Below the Fund has summarized some important tax issues that affect the Fund and its shareholders. This summary is based on current tax laws, which may change. At least annually, the Fund will distribute substantially all of its net investment income and its net realized capital gains, if any. The dividends and distributions you receive from the Fund may be subject to federal, state and local taxation, depending upon your tax situation. If so, they are taxable whether or not you reinvest them. Income distributions are generally taxable at ordinary income tax rates except to the extent they are designated as qualified dividend income. Dividends that are qualified dividend income are eligible for the reduced maximum rate to individuals of 15% (5% for individuals in lower tax brackets) to the extent that the Fund receives qualified dividend income. Capital gains distributions and distributions of qualified dividend income are generally taxable at the rates applicable to long-term capital gains regardless of how long you have held your Fund shares. Long-term capital gains are currently taxable at the maximum rate of 15%. Absent further legislation, the maximum 15% rate on qualified dividend income and long-term capital gains will cease to apply to taxable years beginning after December 31, 2008. Each sale of Fund shares may be a taxable event. Currently, any capital gain or loss realized upon a sale of Fund shares is generally treated as long-term gain or loss if the shares have been held for more than one year. Capital gain or loss realized upon a sale of Fund shares held for one year or less is generally treated as short-term gain or loss, except that any capital loss on the sale of the Fund shares held for six months or less is treated as long-term capital loss to the extent that capital gain dividends were paid with respect to such Fund shares. Some foreign governments levy withholding taxes against dividend and interest income. Although in some countries a portion of these taxes is recoverable, the non-recovered portion will reduce the income received from the securities comprising the portfolios of the Fund. The Fund uses a tax management technique known as highest in, first out. Using this technique, the portfolio holdings that have experienced the smallest gain or largest loss are sold first in an effort to minimize capital gains and enhance after-tax returns. The Fund may elect to pass through to you your pro rata share of foreign income taxes paid by the Fund. The Fund will notify you if it makes such an election. MORE INFORMATION ABOUT TAXES IS IN THE FUND'S SAI. 11 SEI INSTITUTIONAL INTERNATIONAL TRUST INVESTMENT ADVISER SEI Investments Management Corporation One Freedom Valley Drive Oaks, PA 19456 DISTRIBUTOR SEI Investments Distribution Co. One Freedom Valley Drive Oaks, PA 19456 LEGAL COUNSEL Morgan, Lewis & Bockius LLP More information about the Fund is available without charge through the following: STATEMENT OF ADDITIONAL INFORMATION (SAI) The SAI dated January 31, 2004, includes detailed information about the SEI Institutional International Trust. The SAI is on file with the SEC and is incorporated by reference into this prospectus. This means that the SAI, for legal purposes, is a part of this prospectus. TO OBTAIN AN SAI OR MORE INFORMATION: BY TELEPHONE: Call 1-800-DIAL-SEI BY MAIL: Write to the Fund at: One Freedom Valley Drive Oaks, PA 19456 BY INTERNET: http://www.seic.com 12 FROM THE SEC: You can also obtain the SAI or the Annual and Semi-Annual Reports, as well as other information about the SEI Institutional International Trust, from the EDGAR Database on the SEC's website ("http://www.sec.gov"). You may review and copy documents at the SEC Public Reference Room in Washington, DC (for information on the operation of the Public Reference Room, call 1-202-942-8090). You may request documents by mail from the SEC, upon payment of a duplicating fee, by writing to: Securities and Exchange Commission, Public Reference Section, Washington, DC 20549-0102. You may also obtain this information, upon payment of a duplicating fee, by e-mailing the SEC at the following address: publicinfo@sec.gov. SEI Institutional International Trust's Investment Company Act registration number is 811-5601. 13 SEI INSTITUTIONAL INTERNATIONAL TRUST Administrator: SEI Investments Fund Management Distributor: SEI Investments Distribution Co. Investment Adviser: SEI Investments Management Corporation Sub-Advisers: Alliance Capital Management L.P. Ashmore Investment Management Limited The Boston Company Asset Management LLC Capital Guardian Trust Company Citigroup Asset Management Limited Emerging Markets Management, L.L.C. Fischer Francis Trees & Watts, Inc. and its affiliates Fisher Investments, Inc. McKinley Capital Management, Inc. Morgan Stanley Investment Management Inc. and Morgan Stanley Investment Management Limited Salomon Brothers Asset Management Inc This STATEMENT OF ADDITIONAL INFORMATION is not a Prospectus. It is intended to provide additional information regarding the activities and operations of SEI Institutional International Trust (the "Trust"), and should be read in conjunction with the Trust's Prospectuses relating to the Class A Shares of the International Equity, Emerging Markets Equity, International Fixed Income, and Emerging Markets Debt Funds, the Class A Shares of the Tax-Managed International Equity Fund, the Class I Shares of the International Equity Fund, and the Class Y Shares of the Emerging Markets Equity Fund, each dated January 31, 2004. Prospectuses may be obtained without charge by writing the Trust's distributor, SEI Investments Distribution Co., Oaks, Pennsylvania 19456, or by calling 1-800-342-5734. The Trust's financial statements for the fiscal year ended September 30, 2003, including notes thereto and the report of PricewaterhouseCoopers LLP thereon, are herein incorporated by reference from the Trust's 2002 Annual Report. A copy of the 2003 Annual Report must accompany the delivery of this Statement of Additional Information. January 31, 2004 TABLE OF CONTENTS THE TRUST S-2 INVESTMENT OBJECTIVES AND POLICIES S-2 DESCRIPTION OF PERMITTED INVESTMENTS AND RISK FACTORS S-7 American Depositary Receipts S-7 Asset-Backed Securities S-7 Brady Bonds S-8 Commercial Paper S-8 Dollar Rolls S-9 Equity-Linked Warrants S-9 Equity Securities S-9 Eurobonds S-10 Fixed Income Securities S-10 Foreign Securities S-12 Forward Foreign Currency Contracts S-13 Futures and Options on Futures S-14 High Yield Foreign Sovereign Debt Securities S-15 Illiquid Securities S-16 Investment Companies S-16 Loan Participations and Assignments S-17 Money Market Instruments S-17 Mortgage-Backed Securities S-17 Non-Diversification S-19 Obligations of Domestic Banks, Foreign Banks and Foreign Branches of U.S. Banks S-19 Obligations of Supranational Entities S-20 Options S-20 Pay-In-Kind Bonds S-21 Privatizations S-21 Receipts S-22 Repurchase Agreements S-22 Restricted Securities S-22 Reverse Repurchase Agreements S-22 Securities Lending S-23 Sovereign Debt S-23 Structured Securities S-23 Swaps, Caps, Floors, Collars and Swaptions S-24 U.S. Government Securities S-25 Variable and Floating Rate Instruments S-26 When-Issued and Delayed Delivery Securities S-26 Yankee Obligations S-26 Zero Coupon Securities S-26 INVESTMENT LIMITATIONS S-27 THE ADMINISTRATOR AND TRANSFER AGENT S-30 THE ADVISER AND SUB-ADVISERS S-31 DISTRIBUTION, SHAREHOLDER SERVICING AND ADMINISTRATIVE SERVICING S-34 TRUSTEES AND OFFICERS OF THE TRUST S-35 PROXY VOTING POLICIES AND PROCEDURES S-39 PURCHASE AND REDEMPTION OF SHARES S-40
TAXES S-42 PORTFOLIO TRANSACTIONS S-44 DESCRIPTION OF SHARES S-47 LIMITATION OF TRUSTEES' LIABILITY S-47 CODE OF ETHICS S-47 VOTING S-47 SHAREHOLDER LIABILITY S-48 CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES S-48 EXPERTS S-49 CUSTODIAN S-49 LEGAL COUNSEL S-49 APPENDIX A -- DESCRIPTION OF CORPORATE BOND RATINGS A-1
January 31, 2004 THE TRUST SEI Institutional International Trust (formerly, "SEI International Trust") (the "Trust") is an open-end management investment company established as a Massachusetts business trust pursuant to a Declaration of Trust dated June 30, 1988, and has diversified and non-diversified portfolios. The Declaration of Trust permits the Trust to offer separate series ("portfolios") of units of beneficial interest ("shares") and separate classes of shares of such portfolios. Shareholders may purchase shares in certain portfolios through separate classes. Class A, Class I, and Class Y currently may be offered, which provide for variations in transfer agent fees, shareholder servicing fees, administrative servicing fees, dividends and certain voting rights. Except for differences among the classes pertaining to shareholder servicing, administrative servicing, voting rights, dividends and transfer agent expenses, each share of each portfolio represents an equal proportionate interest in that portfolio with each other share of that portfolio. This Statement of Additional Information relates to the following portfolios: International Equity, Emerging Markets Equity, International Fixed Income, Emerging Markets Debt and Tax-Managed International Equity Funds (each a "Fund" and, together, the "Funds"), including all classes of the Funds. Shares of the Tax-Managed International Equity Fund are currently not being offered to shareholders. The investment adviser and sub-advisers to the Funds are referred to collectively as the "advisers." INVESTMENT OBJECTIVES AND POLICIES INTERNATIONAL EQUITY FUND--The International Equity Fund seeks to provide long-term capital appreciation. There can be no assurance that the Fund will achieve its investment objective. Under normal circumstances, the Fund will invest at least 80% of its net assets in equity securities. The Fund will invest primarily in common stocks and other equity securities of issuers of all capitalization ranges that are located in at least three countries other than the United States. The Fund will invest primarily in companies located in developed countries, but may also invest in companies located in emerging market countries. Securities of non-U.S. issuers purchased by the Fund will typically be listed on recognized foreign exchanges, but also may be purchased in over-the-counter markets, on U.S. registered exchanges, or in the form of sponsored or unsponsored American Depositary Receipts ("ADRs") traded on registered exchanges or NASDAQ, or sponsored or unsponsored European Depositary Receipts ("EDRs"), Continental Depositary Receipts ("CDRs") or Global Depositary Receipts ("GDRs"). The Fund expects to be fully invested in the primary investments described above, but may invest up to 20% of its net assets in: U.S. or non-U.S. cash reserves; money market instruments; swaps; options on securities and non-U.S. indices; futures contracts, including stock index futures contracts; options on futures contracts; and equity-linked warrants. The Fund is permitted to acquire floating and variable rate securities, purchase securities on a when-issued or delayed delivery basis, and invest up to 15% of its net assets in illiquid securities. The Fund may also lend its securities to qualified borrowers and invest in securities issued by passive foreign investment companies. There is no restriction on the maturity of any single instrument held by the Fund. Maturities may vary widely depending on the advisers' assessment of interest rate trends and other economic and market factors. For temporary defensive purposes, when the advisers determine that market conditions warrant, the Fund may invest up to 100% of its assets in U.S. dollar-denominated fixed income securities or debt obligations and the following domestic and foreign money market instruments: government obligations; certificates of deposit; bankers' acceptances; time deposits; commercial paper; short-term corporate debt issues and repurchase agreements; and may hold a portion of its assets in cash. In addition, the Fund may invest in the foregoing instruments and hold cash for liquidity purposes. EMERGING MARKETS EQUITY FUND--The Emerging Markets Equity Fund seeks to provide capital appreciation. There can be no assurance that the Fund will achieve its investment objective. S-2 Under normal circumstances, the Fund will invest at least 80% of its net assets in equity securities of emerging market issuers. The Fund will invest primarily in common stocks and other equity securities of foreign companies located in emerging market countries. The Fund normally maintains investments in at least six emerging market countries, and does not invest more than 35% of its total assets in any one emerging market country. The Fund defines an emerging market country as any country the economy and market of which the World Bank or the United Nations considers to be emerging or developing. The Fund's advisers consider emerging market issuers to include: companies the securities of which are principally traded in the capital markets of emerging market countries; companies that derive at least 50% of their total revenue from either goods produced or services rendered in emerging market countries, regardless of where the securities of such companies are principally traded; or companies that are organized under the laws of, and have a principal office in, an emerging market country. The Fund expects to be fully invested in the primary investments described above, but may invest up to 20% of its net assets in debt securities, including up to 5% of its total assets in debt securities rated below investment grade (I.E., rated below the fourth rating category by a nationally recognized statistical rating agency ("NRSRO")). These debt securities will include debt securities of governmental and private issuers in emerging market countries. Bonds rated below investment grade are often referred to as "junk bonds." Such securities involve greater risk of default or price volatility than investment grade securities. The Fund may invest in certain debt securities issued by the governments of emerging market countries that are or may be eligible for conversion into investments in emerging market companies under debt conversion programs sponsored by such governments. The Fund may invest up to 15% of its net assets in illiquid securities. The Fund's advisers believe that carefully selected investments in joint ventures, cooperatives, partnerships, private placements, unlisted securities and other similar situations (collectively, "special situations") could enhance the Fund's capital appreciation potential. Investments in special situations may be liquid, as determined by the Fund's advisers based on criteria approved by the Board of Trustees. To the extent these investments are deemed illiquid, the Fund's investment in them will be subject to its 15% restriction on investment in illiquid securities. The Fund may invest up to 10% of its total assets in shares of other investment companies. The Fund may invest in futures contracts, equity-linked warrants and purchase securities on a when-issued or delayed delivery basis. The Fund may also purchase and write options to buy or sell futures contracts and lend its securities to qualified borrowers. There is no restriction on the maturity of any single instrument held by the Fund. Maturities may vary widely depending on the advisers' assessment of interest rate trends and other economic and market factors. Due to its investment strategy, the Fund may buy and sell securities frequently. This may result in higher transaction costs and additional capital gains tax liabilities. For temporary defensive purposes, when the advisers determine that market conditions warrant, the Fund may invest up to 100% of its assets in U.S. dollar-denominated fixed income securities or debt obligations and the following domestic and foreign money market instruments: government obligations; certificates of deposit; bankers' acceptances; time deposits; commercial paper; short-term corporate debt issues and repurchase agreements; and may hold a portion of its assets in cash. In addition, the Fund may invest in the foregoing instruments and hold cash for liquidity purposes. INTERNATIONAL FIXED INCOME FUND--The International Fixed Income Fund seeks to provide capital appreciation and current income. There can be no assurance that the Fund will achieve its investment objective. Under normal circumstances, the Fund will invest at least 80% of its net assets in fixed income securities. The Fund will invest primarily in investment grade foreign government and corporate fixed income securities, as well as foreign mortgage-backed and/or asset-backed fixed income securities, of issuers located in at least three countries other than the United States. S-3 The Fund will invest primarily in: (i) fixed income securities issued or guaranteed by a foreign government or one of its agencies, authorities, instrumentalities or political subdivisions; (ii) fixed income securities issued or guaranteed by supranational entities; (iii) fixed income securities issued by foreign or multinational corporations; (iv) convertible securities issued by foreign or multinational corporations; (v) fixed income securities issued by foreign banks or bank holding companies; (vi) asset-backed securities; and (vii) mortgage-backed securities. All such investments will be in investment grade securities denominated in various currencies, including the euro. Investment grade securities are rated in one of the highest four rating categories by an NRSRO or determined by an adviser to be of comparable quality at the time of purchase. The Fund expects to be fully invested in the primary investments described above, but may invest in: obligations issued or guaranteed as to principal and interest by the U.S. Government, its agencies or instrumentalities ("U.S. Government securities"); swaps; options; futures; and equity-linked warrants. The Fund may also purchase and write options to buy or sell futures contracts, purchase securities on a when-issued or delayed delivery basis and engage in short selling and lend its securities to qualified borrowers. The Fund may invest up to 10% of its total assets in illiquid securities. Furthermore, although the Fund will concentrate its investments in relatively developed countries, the Fund may invest up to 20% of its assets in investment-grade fixed income securities of issuers in, or denominated in the currencies of, developing countries or are determined by the advisers to be of comparable quality to such securities at the time of purchase. There are no restrictions on the Fund's average portfolio maturity or on the maturity of any specific security. Maturities may vary widely depending on the advisers' assessment of interest rate trends and other economic and market factors. Due to its investment strategy, the Fund may buy or sell securities frequently. This may result in higher transaction costs and additional capital gains tax liabilities. The Fund is non-diversified, which means that it may invest in the securities of relatively few issuers. As a result, the Fund may be more susceptible to a single adverse economic or political occurrence affecting one or more of these issuers, and may experience increased volatility due to its investments in those securities. For temporary defensive purposes, when the advisers determine that market conditions warrant, the Fund may invest up to 100% of its assets in U.S. dollar-denominated fixed income securities or debt obligations and the following domestic and foreign money market instruments: government obligations; certificates of deposit; bankers' acceptances; time deposits; commercial paper; short-term corporate debt issues and repurchase agreements; and may hold a portion of its assets in cash. In addition, the Fund may invest in the foregoing instruments and hold cash for liquidity purposes. EMERGING MARKETS DEBT FUND--The investment objective of the Emerging Markets Debt Fund is to maximize total return. There can be no assurance that the Fund will achieve its investment objective. Under normal circumstances, the Fund will invest at least 80% of its net assets in fixed income securities of emerging market issuers. The Fund will invest primarily in U.S. dollar denominated debt securities of government, government-related and corporate issuers in emerging market countries, as well as entities organized to restructure the outstanding debt of such issuers. The Fund defines an emerging market country as any country the economy and market of which the World Bank or the United Nations considers to be emerging or developing. The Fund's advisers consider emerging market issuers to be: companies the securities of which are principally traded in the capital markets of emerging market countries; companies that derive at least 50% of their total revenue from either goods produced or services rendered in emerging market countries, regardless of where the securities of such companies are principally traded; companies that are organized under the laws of and have a principal office in an emerging market country; or government issuers located in an emerging market country. S-4 Fixed income securities of emerging market issuers in which the Fund may invest are U.S. dollar-denominated and non-U.S. dollar-denominated corporate and government debt securities, including bonds, notes, bills, debentures, convertible securities, warrants, bank debt obligations, short-term paper, mortgage and other asset-backed securities, preferred stock, loan participations and assignments and interests issued by entities organized and operated for the purpose of restructuring the investment characteristics of instruments issued by emerging market issuers. The Fund may invest in Brady Bonds, which are debt securities issued by debtor nations to restructure their outstanding external indebtedness, and which comprise a significant portion of the emerging debt market. The Fund's investments in high yield government, government-related and restructured debt securities will consist of: (i) debt securities or obligations issued or guaranteed by governments, governmental agencies or instrumentalities and political subdivisions located in emerging market countries (including participations in loans between governments and financial institutions); (ii) debt securities or obligations issued by government-owned, controlled or sponsored entities located in emerging market countries (including participations in loans between governments and financial institutions); and (iii) interests in structured securities of issuers organized and operated for the purpose of restructuring the investment characteristics of instruments issued by any of the entities described above (collectively, "High Yield Foreign Sovereign Debt Securities"). Even though many of these securities are issued by governmental issuers, they may still be considered junk bonds on account of the governmental issuer's poor credit rating. The Fund may also purchase investment grade obligations of the foregoing governmental issuers. The Fund's investments in debt securities of corporate issuers in emerging market countries may include high yield or investment grade debt securities or other obligations issued by: (i) banks located in emerging market countries or by branches of emerging market country banks located in other emerging market countries; or (ii) companies organized under the laws of an emerging market country. The Fund expects to be fully invested in the primary investments described above, but may invest up to 10% of its total assets in: common stock; convertible securities; warrants; or other equity securities, when consistent with the Fund's objective. The Fund will generally hold such equity investments as a result of purchases of unit offerings of fixed-income securities which include such securities or in connection with an actual or proposed conversion or exchange of fixed income securities. The Fund may also enter into repurchase agreements and reverse repurchase agreements, may purchase when-issued and delayed-delivery securities, lend portfolio securities to qualified borrowers and invest in shares of other investment companies. The Fund may purchase restricted securities and may invest up to 15% of the value of its net assets in illiquid securities. The Fund may invest in options and futures for hedging purposes, and may enter into swaps or related transactions. The Fund may invest in receipts, zero coupon securities, pay-in-kind bonds, Eurobonds, dollar rolls, and deferred payment securities. There is no minimum rating standard for the Fund's securities and the Fund's securities will generally be in the lower or lowest rating categories (including those below investment grade, commonly referred to as "junk bonds"). Information about "junk bonds" is provided under "Fixed Income Securities." There is no limit on the percentage of the Fund's assets that may be invested in non-U.S. dollar denominated securities. However, it is expected that the majority of the Fund's assets will be denominated in U.S. dollars. There are no restrictions on the Fund's average portfolio maturity, or on the maturity of any specific security. Maturities may vary widely depending on the advisers' assessment of interest rate trends and other economic and market factors. Due to its investment strategy, the Fund may buy and sell securities frequently. This may result in higher transaction costs and additional capital gains tax liabilities. The Fund is non-diversified, which means that it may invest in the securities of relatively few issuers. As a result, the Fund may be more susceptible to a single adverse economic or political occurrence affecting one or more of these issuers, and may experience increased volatility due to its investments in those securities. S-5 For temporary defensive purposes, when the advisers determine that market conditions warrant, the Fund may invest up to 100% of its assets in U.S. dollar-denominated fixed income securities or debt obligations and the following domestic and foreign money market instruments: government obligations; certificates of deposit; bankers' acceptances; time deposits; commercial paper; short-term corporate debt issues and repurchase agreements; and may hold a portion of its assets in cash. In addition, the Fund may invest in the foregoing instruments and hold cash for liquidity purposes. TAX-MANAGED INTERNATIONAL EQUITY FUND--The Tax-Managed International Equity Fund seeks to provide long-term capital appreciation. There can be no assurance that the Fund will achieve its investment objective. Under normal circumstances, the Fund will invest at least 80% of its net assets in equity securities. The Fund will invest primarily in common stocks and other equity securities of issuers of all capitalization ranges that are located in at least three countries other than the United States. The Fund will invest primarily in companies located in developed countries, but may also invest in securities of issuers located in emerging market countries. Securities of non-U.S. issuers purchased by the Fund will typically be listed on recognized foreign exchanges, but also may be purchased in over-the-counter markets, on U.S. registered exchanges, or in the form of sponsored or unsponsored ADRs traded on registered exchanges or NASDAQ, or sponsored or unsponsored EDRs, CDRs or GDRs. The Fund expects to be fully invested in the primary investments described above, but may invest up to 20% of its net assets in: U.S. or non-U.S. cash reserves; money market instruments; swaps; options on securities and non-U.S. indices; futures contracts, including stock index futures contracts; and options on futures contracts. The Fund is permitted to acquire floating and variable rate securities, purchase securities on a when-issued or delayed delivery basis, invest up to 15% of its net assets in illiquid securities, lend its securities to qualified borrowers and invest in securities issued by passive foreign investment companies. The Fund is designed for long-term taxable investors, including high net worth individuals. While the Fund seeks to maximize after-tax returns for its shareholders, the Fund is very likely to have taxable investment income and will likely realize taxable gains from time to time. The Fund seeks to maximize after-tax returns for its shareholders in part by minimizing the taxes they incur in connection with the Fund's realization of investment income and capital gains. Taxable investment income will be minimized by investing primarily in lower yielding securities. If this strategy is carried out, the Fund can be expected to distribute relatively low levels of taxable investment income. Realized capital gains will be minimized in part by investing primarily in established companies with the expectation of holding these securities for a period of years. The Fund's advisers will generally seek to avoid realizing short-term capital gains. When a decision is made to sell a particular appreciated security, the Fund will attempt to select for sale those share lots with holding periods sufficient to qualify for long-term capital gains treatment and among those, the share lots with the highest cost basis. The Fund may, when prudent, sell securities to realize capital losses that can be used to offset realized capital gains. To protect against price declines affecting securities with large unrealized gains, the Fund may use hedging techniques such as the purchase of put options, short sales "against the box," the sale of stock index futures contracts, and equity swaps. A short sale against the box is a taxable transaction to the Fund with respect to the securities that are sold short. By using these techniques rather than selling such securities, the Fund will attempt to reduce its exposure to price declines without realizing substantial capital gains under the current tax law. Although the Fund may utilize certain hedging strategies in lieu of selling appreciated securities, the Fund's exposure to losses during stock market declines may nonetheless be higher than that of other funds that do not follow a general policy of avoiding sales of highly-appreciated securities. For temporary defensive purposes, when the advisers determine that market conditions warrant, the S-6 Fund may invest up to 100% of its assets in U.S. dollar-denominated fixed income securities or debt obligations and the following domestic and foreign money market instruments: government obligations; certificates of deposit; bankers' acceptances; time deposits; commercial paper; short-term corporate debt issues and repurchase agreements; and may hold a portion of their assets in cash. In addition, the Fund may invest in the foregoing instruments and hold cash for liquidity purposes. DESCRIPTION OF PERMITTED INVESTMENTS AND RISK FACTORS The following are descriptions of the permitted investments and investment practices discussed in Funds' "Investment Objectives and Policies" section and the associated risk factors. A Fund may purchase any of these instruments and/or engage in any of these investment practices if, in the opinion of the advisers, such investment will be advantageous to the Fund. A Fund is free to reduce or eliminate its activity in any of these areas. The advisers will only invest in any of the following instruments or engage in any of the following investment practices if such investment or activity is consistent with and permitted by a Fund's stated investment policies. There is no assurance that any of these strategies or any other strategies and methods of investment available to a Fund will result in the achievement of the Fund's objectives. AMERICAN DEPOSITARY RECEIPTS ("ADRs")--ADRs, as well as other "hybrid" forms of ADRs, including EDRs, CDRs, and GDRs, are certificates evidencing ownership of shares of a foreign issuer. These certificates are issued by depositary banks and generally trade on an established market in the United States or elsewhere. The underlying shares are held in trust by a custodian bank or similar financial institution in the issuer's home country. The depositary bank may not have physical custody of the underlying securities at all times and may charge fees for various services, including forwarding dividends and interest and corporate actions. ADRs are alternatives to directly purchasing the underlying foreign securities in their national markets and currencies. However, ADRs continue to be subject to many of the risks associated with investing directly in foreign securities. Investments in the securities of foreign issuers may subject a Fund to investment risks that differ in some respects from those related to investments in securities of U.S. issuers. Such risks include future adverse political and economic developments, possible imposition of withholding taxes on income, possible seizure, nationalization or expropriation of foreign deposits, possible establishment of exchange controls or taxation at the source or greater fluctuation in value due to changes in exchange rates. Foreign issuers of securities often engage in business practices different from those of domestic issuers of similar securities, and there may be less information publicly available about foreign issuers. In addition, foreign issuers are, generally speaking, subject to less government supervision and regulation and different accounting treatment than are those in the United States. ASSET-BACKED SECURITIES--Asset-backed securities are securities backed by non-mortgage assets such as company receivables, truck and auto loans, leases and credit card receivables. Other asset-backed securities may be created in the future. Asset-backed securities are generally issued as pass-through certificates, which represent undivided fractional ownership interests in the underlying pools of assets. Asset-backed securities also may be debt instruments, which are also known as collateralized obligations and are generally issued as the debt of a special purpose entity, such as a trust, organized solely for the purpose of owning such assets and issuing such obligations. Asset-backed securities may be traded over-the-counter and typically have a short-intermediate maturity structure depending on the paydown characteristics of the underlying financial assets which are passed through to the security holder. Asset-backed securities are not issued or guaranteed by the U.S. Government, its agencies or instrumentalities; however, the payment of principal and interest on such obligations may be guaranteed up to certain amounts and, for a certain period, by a letter of credit issued by a financial institution (such as a bank or insurance company) unaffiliated with the issuers of such securities. The purchase of asset-backed securities raises risk considerations peculiar to the financing of the instruments underlying such securities. For example, there is a risk that another party could acquire an interest in the obligations superior to that of S-7 the holders of the asset-backed securities. There also is the possibility that recoveries on repossessed collateral may not, in some cases, be available to support payments on those securities. Asset-backed securities entail prepayment risk, which may vary depending on the type of asset, but is generally less than the prepayment risk associated with mortgage-backed securities. In addition, credit card receivables are unsecured obligations of the card holder. There may be a limited secondary market for such securities. BRADY BONDS--Certain debt obligations, customarily referred to as "Brady Bonds," are created through the exchange of existing commercial bank loans to foreign entities for new obligations in connection with a debt restructuring. Brady Bonds have only been issued since 1989, and, accordingly, do not have a long payment history. In addition, they are issued by governments that may have previously defaulted on the loans being restructured by the Brady Bonds, so are subject to the risk of default by the issuer. Brady Bonds may be fully or partially collateralized or uncollateralized and issued in various currencies (although most are U.S. dollar denominated) and they are actively traded in the over-the-counter secondary market. U.S. dollar denominated, collateralized Brady Bonds, which may be fixed rate par bonds or floating rate discount bonds, are generally collateralized in full as to principal due at maturity by U.S. Treasury zero coupon obligations which have the same maturity as the Brady Bonds. Certain interest payments on these Brady Bonds may be collateralized by cash or securities in an amount that, in the case of fixed rate bonds, is typically equal to between 12 and 18 months of rolling interest payments or, in the case of floating rate bonds, initially is typically equal to between 12 and 18 months rolling interest payments based on the applicable interest rate at that time and is adjusted at regular intervals thereafter with the balance of interest accruals in each case being uncollateralized. Payment of interest and (except in the case of principal collateralized Brady Bonds) principal on Brady Bonds with no or limited collateral depends on the willingness and ability of the foreign government to make payment. In the event of a default on collateralized Brady Bonds for which obligations are accelerated, the collateral for the payment of principal will not be distributed to investors, nor will such obligations be sold and the proceeds distributed. The collateral will be held by the collateral agent to the scheduled maturity of the defaulted Brady Bonds, which will continue to be outstanding, at which time the face amount of the collateral will equal the principal payments which would have then been due on the Brady Bonds in the normal course. Based upon current market conditions, a Fund would not intend to purchase Brady Bonds which, at the time of investment, are in default as to payment. However, in light of the residual risk of Brady Bonds and, among other factors, the history of default with respect to commercial bank loans by public and private entities of countries issuing Brady Bonds, investments in Brady Bonds are to be viewed as speculative. A substantial portion of the Brady Bonds and other sovereign debt securities in which the Emerging Markets Debt Fund invests are likely to be acquired at a discount, which involves certain additional considerations. Sovereign obligors in developing and emerging market countries are among the world's largest debtors to commercial banks, other governments, international financial organizations and other financial institutions. These obligors have in the past experienced substantial difficulties in servicing their external debt obligations, which led to defaults on certain obligations and the restructuring of certain indebtedness. Restructuring arrangements have included, among other things, reducing and rescheduling interest and principal payments by negotiating new or amended credit agreements or converting outstanding principal and unpaid interest to Brady Bonds, and obtaining new credit to finance interest payments. Holders of certain foreign sovereign debt securities may be requested to participate in the restructuring of such obligations and to extend further loans to their issuers. There can be no assurance that the Brady Bonds and other foreign sovereign debt securities in which a Fund may invest will not be subject to similar restructuring arrangements or to requests for new credit which may adversely affect the Fund's holdings. Furthermore, certain participants in the secondary market for such debt may be directly involved in negotiating the terms of these arrangements and may therefore have access to information not available to other market participants. COMMERCIAL PAPER--Commercial paper is the term used to designate unsecured short-term S-8 promissory notes issued by corporations and other entities. Maturities on these issues vary from a few to 270 days. DOLLAR ROLLS--"Dollar rolls" are transactions in which a Fund sells securities for delivery in the current month and simultaneously contracts to repurchase substantially similar securities on a specified future date. The difference between the sale price and the purchase price (plus any interest earned on the cash proceeds of the sale) is netted against the interest income foregone on the securities sold to arrive at an implied borrowing rate. Alternatively, the sale and purchase transactions can be executed at the same price, with the Fund being paid a fee as consideration for entering into the commitment to purchase. If a Fund enters into dollar roll transactions, the Fund will "cover" its position as required by the 1940 Act. EQUITY-LINKED WARRANTS--Equity linked warrants provide a way for investors to access markets where entry is difficult and time consuming due to regulation. Typically, a broker issues warrants to an investor and then purchases shares in the local market and issues a call warrant hedged on the underlying holding. If the investor exercises his call and closes his position, the shares are sold and the warrant redeemed with the proceeds. Each warrant represents one share of the underlying stock. Therefore, the price, performance and liquidity of the warrant are all directly linked to the underlying stock. The warrants can be redeemed for 100% of the value of the underlying stock (less transaction costs). Being American style warrants, they can be exercised at any time. The warrants are U.S. dollar denominated and priced daily on several international stock exchanges. There are risks associated with equity-linked warrants. The investor will bear the full counterparty risk to the issuing broker (but the advisers select to mitigate this risk by only purchasing from issuers with high credit ratings (AA or better)). They also have a longer settlement period because they go through the same registration process as the underlying shares (about three weeks) and during this time the shares cannot be sold. There is currently no active trading market for equity-linked warrants. Certain issuers of such warrants may be deemed to be "investment companies" as defined in the Investment Company Act of 1940 (the "1940 Act"). As a result, a Fund's investment in such warrants may be limited by certain investment restrictions contained in the 1940 Act. EQUITY SECURITIES--Equity securities represent ownership interests in a company and include common stocks, preferred stocks, warrants to acquire common stock and securities convertible into common stock. Investments in equity securities in general are subject to market risks which may cause their prices to fluctuate over time. Fluctuations in the value of equity securities in which a Fund invests will cause the net asset value of the Fund to fluctuate. The Funds purchase and sell equity securities in various ways, including securities listed on recognized foreign exchanges, traded in the United States on registered exchanges or in the over-the-counter market. Equity securities are described in more detail below: COMMON STOCK. Common stock represents an equity or ownership interest in an issuer. In the event an issuer is liquidated or declares bankruptcy, the claims of owners of bonds and preferred stock take precedence over the claims of those who own common stock. PREFERRED STOCK. Preferred stock represents an equity or ownership interest in an issuer that pays dividends at a specified rate and that has precedence over common stock in the payment of dividends. In the event an issuer is liquidated or declares bankruptcy, the claims of owners of bonds take precedence over the claims of those who own preferred and common stock. WARRANTS. Warrants are instruments that entitle the holder to buy an equity security at a specific price for a specific period of time. Changes in the value of a warrant do not necessarily correspond to changes in the value of its underlying security. The price of a warrant may be more volatile than the price of its underlying security, and a warrant may offer greater potential for capital appreciation as well as capital loss. Warrants do not entitle a holder to dividends or voting rights with respect to the underlying security and do not represent any rights in the assets of the issuing company. A warrant ceases to have value if it is not exercised prior to its expiration date. These factors can make warrants more speculative than other types of investments. S-9 CONVERTIBLE SECURITIES. Convertible securities are bonds, debentures, notes, preferred stocks or other securities that may be converted or exchanged (by the holder or by the issuer) into shares of the underlying common stock (or cash or securities of equivalent value) at a stated exchange ratio. A convertible security may also be called for redemption or conversion by the issuer after a particular date and under certain circumstances (including a specified price) established upon issue. If a convertible security held by a Fund is called for redemption or conversion, the Fund could be required to tender it for redemption, convert it into the underlying common stock, or sell it to a third party. Convertible securities generally have less potential for gain or loss than common stocks. Convertible securities generally provide yields higher than the underlying common stocks, but generally lower than comparable non-convertible securities. Because of this higher yield, convertible securities generally sell at a price above their "conversion value," which is the current market value of the stock to be received upon conversion. The difference between this conversion value and the price of convertible securities will vary over time depending on changes in the value of the underlying common stocks and interest rates. When the underlying common stocks decline in value, convertible securities will tend not to decline to the same extent because of the interest or dividend payments and the repayment of principal at maturity for certain types of convertible securities. However, securities that are convertible other than at the option of the holder generally do not limit the potential for loss to the same extent as securities convertible at the option of the holder. When the underlying common stocks rise in value, the value of convertible securities may also be expected to increase. At the same time, however, the difference between the market value of convertible securities and their conversion value will narrow, which means that the value of convertible securities will generally not increase to the same extent as the value of the underlying common stocks. Because convertible securities may also be interest-rate sensitive, their value may increase as interest rates fall and decrease as interest rates rise. Convertible securities are also subject to credit risk, and are often lower-quality securities. SMALL AND MEDIUM CAPITALIZATION ISSUERS. Investing in small or medium capitalization companies often involves greater risk than is customarily associated with investments in larger capitalization companies. This increased risk may be due to the greater business risks of smaller size, limited markets and financial resources, narrow product lines and the frequent lack of depth of management. The securities of smaller companies are often traded over-the-counter and, even if listed on a national securities exchange, may not be traded in volumes typical for that exchange. Consequently, the securities of smaller companies are likely to be less liquid, may have limited market stability and may be subject to more severe, abrupt or erratic market movements than securities of larger, more established companies or the market averages in general. EUROBONDS--A Eurobond is a fixed income security denominated in U.S. dollars or another currency and sold to investors outside of the country whose currency is used. Eurobonds may be issued by government or corporate issuers, and are typically underwritten by banks and brokerage firms from numerous countries. While Eurobonds typically pay principal and interest in Eurodollars, U.S. dollars held in banks outside of the United States, they may pay principal and interest in other currencies. FIXED INCOME SECURITIES--Fixed income securities consist primarily of debt obligations issued by governments, corporations, municipalities and other borrowers, but may also include structured securities that provide for participation interests in debt obligations. The market value of the fixed income investments in which a Fund invests will change in response to interest rate changes and other factors. During periods of falling interest rates, the values of outstanding fixed income securities generally rise. Conversely, during periods of rising interest rates, the values of such securities generally decline. Moreover, while securities with longer maturities tend to produce higher yields, the prices of longer maturity securities are also subject to greater market fluctuations as a result of changes in interest rates. Changes by recognized agencies in the rating of any fixed income security and in the ability of an issuer to make payments of interest and principal also affect the value of these investments. Changes in the value of these securities will not necessarily affect cash income derived from these securities, but will affect a Fund's net asset value. Additional information regarding fixed income securities is described below: DURATION. Duration is a measure of the expected change in value of a fixed income security for a given change in interest rates. For example, if interest rates changed by one percent, the value of a security S-10 having an effective duration of two years generally would vary by two percent. Duration takes the length of the time intervals between the present time and time that the interest and principal payments are scheduled, or in the case of a callable bond, expected to be received, and weighs them by the present values of the cash to be received at each future point in time. INVESTMENT GRADE FIXED INCOME SECURITIES. Fixed income securities are considered investment grade if they are rated in one of the four highest rating categories by an NRSRO, or, if not rated, are determined to be of comparable quality by a Fund's adviser. See "Description of Ratings" for a description of the bond rating categories of several NRSROs. Ratings of each NRSRO represents the NRSRO's opinion of the safety of principal and interest payments (and not the market risk) of bonds and other fixed income securities it undertakes to rate at the time of issuance. Ratings are not absolute standards of quality and may not reflect changes in an issuer's creditworthiness. Fixed income securities rated BBB or Baa lack outstanding investment characteristics, and have speculative characteristics as well. In the event a security owned by a Fund is downgraded, the advisers will review the situation and take appropriate action with regard to the security. LOWER RATED SECURITIES. Lower rated bonds are commonly referred to as "junk bonds" or high yield/high risk securities. Lower rated securities are defined as securities rated below the fourth highest rating category by an NRSRO. These ratings indicate that the obligations are speculative and may be in default. There may be no bottom limit on the ratings of high-yield securities that may be purchased or held by a Fund. Fixed income securities are subject to the risk of an issuer's ability to meet principal and interest payments on the obligation (credit risk), and may also be subject to price volatility due to such factors as interest rate sensitivity, market perception of the creditworthiness of the issuer and general market liquidity (market risk). Lower rated or unrated (I.E., high yield) securities are more likely to react to developments affecting market and credit risk than are more highly rated securities, which primarily react to movements in the general level of interest rates. Yields and market values of high yield securities will fluctuate over time, reflecting not only changing interest rates but the market's perception of credit quality and the outlook for economic growth. When economic conditions appear to be deteriorating, medium to lower rated securities may decline in value due to heightened concern over credit quality, regardless of prevailing interest rates. Investors should carefully consider the relative risks of investing in high yield securities and understand that such securities generally are not meant for short-term investing. Adverse economic developments can disrupt the market for high yield securities, and severely affect the ability of issuers, especially highly leveraged issuers, to service their debt obligations or to repay their obligations upon maturity which may lead to a higher incidence of default on such securities. In addition, the secondary market for high yield securities, which is concentrated in relatively few market makers, may not be as liquid as the secondary market for more highly rated securities. As a result, a Fund's adviser could find it more difficult to sell these securities or may be able to sell the securities only at prices lower than if such securities were widely traded. Furthermore, a Fund may experience difficulty in valuing certain securities at certain times. Prices realized upon the sale of such lower rated or unrated securities, under these circumstances, may be less than the prices used in calculating such Fund's net asset value. Prices for high yield securities may also be affected by legislative and regulatory developments. Lower rated or unrated fixed income obligations also present risks based on payment expectations. If an issuer calls the obligations for redemption, a Fund may have to replace the security with a lower yielding security, resulting in a decreased return for investors. If a Fund experiences unexpected net redemptions, it may be forced to sell its higher rated securities, resulting in a decline in the overall credit quality of the Fund's investment portfolio and increasing the exposure of the Fund to the risks of high yield securities. GROWTH OF HIGH YIELD BOND, HIGH-RISK BOND MARKET. The widespread expansion of government, consumer and corporate debt within the U.S. economy has made the corporate sector more vulnerable to economic downturns or increased interest rates. Further, an economic downturn could severely disrupt the market for lower rated bonds and adversely affect the value of outstanding bonds and the ability of the issuers to repay principal and interest. S-11 SENSITIVITY TO INTEREST RATE AND ECONOMIC CHANGES. Lower rated bonds are very sensitive to adverse economic changes and corporate developments. During an economic downturn or substantial period of rising interest rates, highly leveraged issuers may experience financial stress that would adversely affect their ability to service their principal and interest payment obligations, to meet projected business goals, and to obtain additional financing. If the issuer of a bond defaulted on its obligations to pay interest or principal or entered into bankruptcy proceedings, a Fund may incur losses or expenses in seeking recovery of amounts owed to it. In addition, periods of economic uncertainty and change can be expected to result in increased volatility of market prices of high-yield, high-risk bonds and a Fund's net asset value. PAYMENT EXPECTATIONS. High-yield, high-risk bonds may contain redemption or call provisions. If an issuer exercised these provisions in a declining interest rate market, a Fund would have to replace the security with a lower yielding security, resulting in a decreased return for investors. Conversely, a high-yield, high-risk bond's value will decrease in a rising interest rate market, as will the value of a Fund's assets. If a Fund experiences significant unexpected net redemptions, this may force it to sell high-yield, high-risk bonds without regard to their investment merits, thereby decreasing the asset base upon which expenses can be spread and possibly reducing the Fund's rate of return. LIQUIDITY AND VALUATION. There may be little trading in the secondary market for particular bonds, which may affect adversely a Fund's ability to value accurately or dispose of such bonds. Adverse publicity and investor perception, whether or not based on fundamental analysis, may decrease the value and liquidity of high-yield, high-risk bonds, especially in a thin market. TAXES. A Fund may purchase debt securities (such as zero coupon or pay-in-kind securities) that contain original issue discount. Original issue discount that accretes in a taxable year is treated as earned by a Fund and therefore is subject to the distribution requirements applicable to regulated investment companies under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). Because the original issue discount earned by a Fund in a taxable year may not be represented by cash income, the Fund may have to dispose of other securities and use the proceeds to make distributions to shareholders. FOREIGN SECURITIES--Foreign securities are securities issued by non-U.S. issuers. Investments in foreign securities may subject a Fund to investment risks that differ in some respects from those related to investments in securities of U.S. issuers. Such risks include future adverse political and economic developments, possible imposition of withholding taxes on income, possible seizure, nationalization, or expropriation of foreign deposits, possible establishment of exchange controls or taxation at the source or greater fluctuations in value due to changes in the exchange rates. Foreign issuers of securities often engage in business practices different from those of domestic issuers of similar securities, and there may be less information publicly available about foreign issuers. In addition, foreign issuers are, generally speaking, subject to less government supervision and regulation and different accounting treatment than are those in the United States. Foreign branches of U.S. banks and foreign banks may be subject to less stringent reserve requirements than those applicable to domestic branches of U.S. banks. The value of a Fund's investments denominated in foreign currencies will depend on the relative strengths of those currencies and the U.S. dollar, and a Fund may be affected favorably or unfavorably by changes in the exchange rates or exchange or currency control regulations between foreign currencies and the U.S. dollar. Changes in foreign currency exchange rates also may affect the value of dividends and interest earned, gains and losses realized on the sale of securities and net investment income and gains, if any, to be distributed to shareholders by a Fund. Such investments may also entail higher custodial fees and sales commissions than domestic investments. A Fund's investments in emerging markets can be considered speculative, and therefore may offer higher potential for gains and losses than investments in developed markets of the world. With respect to an emerging S-12 country, there may be a greater potential for nationalization, expropriation or confiscatory taxation, political changes, government regulation, social instability or diplomatic developments (including war) which could affect adversely the economies of such countries or investments in such countries. The economies of developing countries generally are heavily dependent upon international trade and, accordingly, have been and may continue to be adversely affected by trade barriers, exchange or currency controls, managed adjustments in relative currency values and other protectionist measures imposed or negotiated by the countries with which they trade. In addition to the risks of investing in emerging market country debt securities, a Fund's investment in government or government-related securities of emerging market countries and restructured debt instruments in emerging markets are subject to special risks, including the inability or unwillingness to repay principal and interest, requests to reschedule or restructure outstanding debt, and requests to extend additional loan amounts. A Fund may have limited recourse in the event of default on such debt instruments. FORWARD FOREIGN CURRENCY CONTRACTS--A forward foreign currency contract involves a negotiated obligation to purchase or sell (with delivery generally required) a specific currency at a future date, which may be any fixed number of days from the date of the contract agreed upon by the parties, at a price set at the time of the contract. These contracts are traded in the interbank market conducted directly between currency traders (usually large, commercial banks) and their customers. A forward foreign currency contract generally has no deposit requirement, and no commissions are charged at any stage for trades. The Funds may use currency instruments to engage in the following types of currency transactions. TRANSACTION HEDGING. Transaction Hedging is entering into a currency transaction with respect to specific assets or liabilities of a Fund, which will generally arise in connection with the purchase or sale of its portfolio securities or the receipt of income therefrom. A Fund may enter into Transaction Hedging out of a desire to preserve the U.S. dollar price of a security when it enters into a contract for the purchase or sale of a security denominated in a foreign currency. A Fund may be able to protect itself against possible losses resulting from changes in the relationship between the U.S. dollar and foreign currencies during the period between the date the security is purchased or sold and the date on which payment is made or received by entering into a forward contract for the purchase or sale, for a fixed amount of dollars, of the amount of the foreign currency involved in the underlying security transactions. POSITION HEDGING. A Fund may sell a non-U.S. currency and purchase U.S. currency to reduce exposure to the non-U.S. currency ("Position Hedging"). A Fund may use Position Hedging when an adviser reasonably believes that the currency of a particular foreign country may suffer a decline against the U.S. dollar. A Fund may enter into a forward foreign currency contract to sell, for a fixed amount of dollars, the amount of foreign currency approximating the value of some or all of its portfolio securities denominated in such foreign currency. The precise matching of the forward foreign currency contract amount and the value of the portfolio securities involved may not have a perfect correlation since the future value of the securities hedged will change as a consequence of the market between the date the forward contract is entered into and the date it matures. The projection of short-term currency market movement is difficult, and the successful execution of this short-term hedging strategy is uncertain. CROSS HEDGES. A Fund may also cross-hedge currencies by entering into transactions to purchase or sell one or more currencies that are expected to decline in value relative to other currencies to which the Fund has or in which the Fund expects to have portfolio exposure. PROXY HEDGES. A Fund may also engage in proxy hedging, which is defined as entering into positions in one currency to hedge investments denominated in another currency, where the two currencies are economically linked. Currency hedging involves some of the same risks and considerations as other transactions with similar instruments. Currency transactions can result in losses to a Fund if the currency being hedged fluctuates in value to a degree in a direction that is not anticipated. Furthermore, there is a risk that the perceived linkage S-13 between various currencies may not be present or may not be present during the particular time that a Fund is engaging in proxy hedging. If a Fund enters into a currency hedging transaction, the Fund will "cover" its position as required by the 1940 Act. Currency transactions are subject to certain risks that are different from those of other portfolio transactions. Because currency control is of great importance to the issuing governments and influences economic planning and policy, purchase and sales of currency and related instruments can be negatively affected by government exchange controls, blockages, and manipulations or exchange restrictions imposed by governments. These can result in losses to a Fund if it is unable to deliver or receive currency or funds in settlement of obligations and could also cause hedges it has entered into to be rendered useless, resulting in full currency exposure as well as incurring transaction costs. Buyers and sellers of currency futures are subject to the same risks that apply to the use of futures generally. Further, settlement of a currency futures contract for the purchase of most currencies must occur at a bank based in the issuing nation. Trading options on currency futures is relatively new, and the ability to establish and close out positions on such options is subject to the maintenance of a liquid market, which may not always be available. Currency exchange rates may fluctuate based on factors extrinsic to that country's economy. Although forward foreign currency contracts and currency futures may minimize the risk of loss due to a decline in the value of the hedged currency, at the same time they may limit any potential gain which might result should the value of such currency increase. A Fund will not enter into a transaction to hedge currency exposure to an extent greater, after netting all transactions intended wholly or partially to offset other transactions, than the aggregate market value (at the time of entering into the transaction) of the securities held in its portfolio that are denominated or generally quoted in or currently convertible into such currency, other than with respect to proxy hedging as described above. FUTURES AND OPTIONS OF FUTURES--Futures contracts provide for the future sale by one party and purchase by another party of a specified amount of a specific security or currency at a specified future time and at a specified price. An option on a futures contract gives the purchaser the right, in exchange for a premium, to assume a position in a futures contract at a specified exercise price during the term of the option. An index futures contract is a bilateral agreement pursuant to which two parties agree to take or make delivery of an amount of cash equal to a specified dollar amount times the difference between the index value at the close of trading of the contract and the price at which the futures contract is originally struck. No physical delivery of the securities comprising the Index is made; generally contracts are closed out prior to the expiration date of the contract. A Fund will minimize the risk that it will be unable to close out a futures contract by only entering into futures contracts which are traded on national futures exchanges regulated by the Commodities Futures Trading Commission ("CFTC"). Consistent with CFTC regulations, a Fund may use futures contracts and related options for either (i) "BONA FIDE hedging purposes," as such term is defined by the CFTC, or (ii) for other purposes only to the extent that the aggregate initial margin and premiums on such positions (excluding the amount by which options on futures contracts are in the money) do not exceed 5% of the Fund's net assets. Instances in which a Fund may use futures contracts and related options for purposes other than BONA FIDE hedging include: attempting to offset changes in the value of securities held or expected to be acquired or be disposed of; attempting to minimize fluctuations in foreign currencies; attempting to gain exposure to a particular market, index or instrument; or other risk management purposes. When a Fund purchases or sells a futures contract, or sells an option thereon, the Fund is required to "cover" its position as required by the 1940 Act. A Fund may also "cover" its long position in a futures contract by purchasing a put option on the same futures contract with a strike price (I.E., an exercise price) as high or higher than the price of the futures contract. In the alternative, if the strike price of the put is less than the price of the futures contract, the Fund will maintain in a segregated account cash or liquid securities equal in value to the difference between the S-14 strike price of the put and the price of the futures contract. A Fund may also "cover" its long position in a futures contract by taking a short position in the instruments underlying the futures contract, or by taking positions in instruments with prices which are expected to move relatively consistently with the futures contract. A Fund may "cover" its short position in a futures contract by taking a long position in the instruments underlying the futures contracts, or by taking positions in instruments with prices which are expected to move relatively consistently with the futures contract. A Fund may "cover" its sale of a call option on a futures contract by taking a long position in the underlying futures contract at a price less than or equal to the strike price of the call option. In the alternative, if the long position in the underlying futures contract is established at a price greater than the strike price of the written (sold) call, the Fund will maintain in a segregated account cash or liquid securities equal in value to the difference between the strike price of the call and the price of the futures contract. A Fund may also "cover" its sale of a call option by taking positions in instruments with prices which are expected to move relatively consistently with the call option. A Fund may "cover" its sale of a put option on a futures contract by taking a short position in the underlying futures contract at a price greater than or equal to the strike price of the put option, or, if the short position in the underlying futures contract is established at a price less than the strike price of the written put, the Fund will maintain in a segregated account cash or liquid securities equal in value to the difference between the strike price of the put and the price of the futures contract. A Fund may also "cover" its sale of a put option by taking positions in instruments with prices which are expected to move relatively consistently with the put option. There are significant risks associated with a Fund's use of futures contracts and options on futures including the following: (1) the success of a hedging strategy may depend on the advisers' ability to predict movements in the prices of individual securities, fluctuations in markets and movements in interest rates; (2) there may be an imperfect or no correlation between the changes in market value of the securities held by a Fund and the prices of futures and options on futures; (3) there may not be a liquid secondary market for a futures contract or option; (4) trading restrictions or limitations may be imposed by an exchange; and (5) government regulations may restrict trading in futures contracts and options on futures. In addition, some strategies reduce a Fund's exposure to price fluctuations, while others tend to increase its market exposure. HIGH YIELD FOREIGN SOVEREIGN DEBT SECURITIES--Investing in fixed and floating rate high yield foreign sovereign debt securities will expose a Fund to the direct or indirect consequences of political, social or economic changes in the countries that issue the securities. The ability of a foreign sovereign obligor to make timely payments on its external debt obligations will also be strongly influenced by the obligor's balance of payments, including export performance, its access to international credits and investments, fluctuations in interest rates and the extent of its foreign reserves. Countries such as those in which the Fund may invest have historically experienced, and may continue to experience, high rates of inflation, high interest rates, exchange rate or trade difficulties and extreme poverty and unemployment. Many of these countries are also characterized by political uncertainty or instability. Additional factors which may influence the ability or willingness to service debt include, but are not limited to, a country's cash flow situation, the availability of sufficient foreign exchange on the date a payment is due, the relative size of its debt service burden to the economy as a whole, and its government's policy towards the International Monetary Fund, the World Bank and other international agencies. A country whose exports are concentrated in a few commodities or whose economy depends on certain strategic imports could be vulnerable to fluctuations in international prices of these commodities or imports. To the extent that a country receives payment for its exports in currencies other than dollars, its ability to make debt payments denominated in dollars could be adversely affected. If a foreign sovereign obligor cannot generate sufficient earnings from foreign trade to service its external debt, it may need to depend on continuing loans and aid from foreign governments, commercial banks and multilateral organizations, and inflows of foreign investment. The commitment on the part of these foreign governments, multilateral organizations and others to make such disbursements may be conditioned on the government's implementation of economic reforms and/or economic performance and the timely service of its obligations. Failure to implement such reforms, achieve such levels of economic performance or repay S-15 principal or interest when due may result in the cancellation of such third parties' commitments to lend funds, which may further impair the obligor's ability or willingness to timely service its debts. ILLIQUID SECURITIES--Illiquid securities are securities that cannot be disposed of in the ordinary course of business (within seven days) at approximately the prices at which they are valued. Because of their illiquid nature, illiquid securities must be priced at fair value as determined in good faith pursuant to procedures approved by the Trust's Board of Trustees. Despite such good faith efforts to determine fair value prices, a Fund's illiquid securities are subject to the risk that the security's fair value price may differ from the actual price which the Fund may ultimately realize upon its sale or disposition. Difficulty in selling illiquid securities may result in a loss or may be costly to the Fund. Under the supervision of the Trust's Board of Trustees, the advisers determine the liquidity of a Fund's investments. In determining the liquidity of the Fund's investments, the advisers may consider various factors, including: (1) the frequency and volume of trades and quotations; (2) the number of dealers and prospective purchasers in the marketplace; (3) dealer undertakings to make a market; and (4) the nature of the security and the market in which it trades (including any demand, put or tender features, the mechanics and other requirements for transfer, any letters of credit or other credit enhancement features, any ratings, the number of holders, the method of soliciting offers, the time required to dispose of the security, and the ability to assign or offset the rights and obligations of the security). INVESTMENT COMPANIES--Securities of other investment companies, including shares of closed-end investment companies, unit investment trusts, open-end investment companies, and real estate investment trusts represent interests in professionally managed portfolios that may invest in various types of instruments. Investing in other investment companies involves substantially the same risks as investing directly in the underlying instruments, but may involve additional expenses at the investment company-level, such as portfolio management fees and operating expenses. Certain types of investment companies, such as closed-end investment companies, issue a fixed number of shares that trade on a stock exchange or over-the-counter at a premium or a discount to their net asset value. Others are continuously offered at net asset value, but may also be traded in the secondary market. Federal securities laws limit the extent to which a Fund can invest in securities of other investment companies. Generally, a Fund is prohibited from acquiring the securities of another investment company if, as a result of such acquisition: (1) the Fund owns more than 3% of the total voting stock of the other company; (2) securities issued by any one investment company represent more than 5% of the Fund's total assets; or (3) securities (other than treasury stock) issued by all investment companies represent more than 10% of the total assets of the Fund. The Trust and SEI Investments Management Corporation have obtained an order from the SEC that permits the Funds to invest their uninvested cash and cash collateral from securities lending activities in one or more affiliated investment companies, which complies with Rule 2a-7 under the 1940 Act, in excess of the limits of Section 12 of the 1940 Act. A Fund may invest in investment companies managed by the advisers to the extent permitted by any rule or regulation of the SEC or any order or interpretation thereunder. The Funds are prohibited from acquiring any securities of registered open-end investment companies or registered unit investment trusts in reliance on Section 12(d)(1)(G) or Section 12(d)(1)(F) of the 1940 Act. Because of restrictions on direct investment by U.S. entities in certain countries, investment in other investment companies may be the most practical or the only manner in which an international and global fund can invest in the securities markets of those countries. A Fund also may incur tax liability to the extent it invests in the stock of a foreign issuer that constitutes a "passive foreign investment company." EXCHANGE TRADED FUNDS. Exchange Traded Funds ("ETFs") are investment companies that are registered under the 1940 Act as open-end funds or unit investment trusts. ETFs are actively traded on national securities exchanges and are generally based on specific domestic and foreign market indices. An "index-based ETF" seeks to track the performance of an index by holding in its portfolio either the contents of the index or a representative sample of the securities in the index. Because ETFs are based on an underlying basket of stocks or an index, they are subject to the same market fluctuations as these types of securities in volatile market swings. S-16 LOAN PARTICIPATIONS AND ASSIGNMENTS--Loan participations are interests in loans to corporations or governments which are administered by the lending bank or agent for a syndicate of lending banks, and sold by the lending bank, financial institution or syndicate member ("intermediary bank"). In a loan participation, the borrower will be deemed to be the issuer of the participation interest, except to the extent a Fund derives its rights from the intermediary bank. Because the intermediary bank does not guarantee a loan participation in any way, a loan participation is subject to the credit risks generally associated with the underlying borrower. In the event of the bankruptcy or insolvency of the borrower, a loan participation may be subject to certain defenses that can be asserted by such borrower as a result of improper conduct by the intermediary bank. In addition, in the event the underlying borrower fails to pay principal and interest when due, a Fund may be subject to delays, expenses and risks that are greater than those that would have been involved if the Fund had purchased a direct obligation of such borrower. Under the terms of a loan participation, a Fund may be regarded as a creditor of the intermediary bank, (rather than of the underlying borrower), so that the Fund may also be subject to the risk that the intermediary bank may become insolvent. Loan assignments are investments in assignments of all or a portion of certain loans from third parties. When a Fund purchases assignments from lenders, it will acquire direct rights against the borrower on the loan. Since assignments are arranged through private negotiations between potential assignees and assignors, however, the rights and obligations acquired by the Fund may differ from, and be more limited than, those held by the assigning lender. Loan participations and assignments may be considered liquid, as determined by the Funds' advisers based on criteria approved by the Board of Trustees. MONEY MARKET INSTRUMENTS--Money market securities include short-term U.S. Government securities; custodial receipts evidencing separately traded interest and principal components of securities issued by the U.S. Treasury; commercial paper rated in the highest short-term rating category by an NRSRO, such as S&P or Moody's, or determined by the advisers to be of comparable quality at the time of purchase; short-term bank obligations (certificates of deposit, time deposits and bankers' acceptances) of U.S. commercial banks with assets of at least $1 billion as of the end of their most recent fiscal year; and repurchase agreements involving such securities. For a description of ratings, see Appendix A to this SAI. MORTGAGE-BACKED SECURITIES--Mortgage-backed securities are instruments that entitle the holder to a share of all interest and principal payments from mortgages underlying the security. The mortgages backing these securities include conventional fifteen and thirty-year fixed-rate mortgages, graduated payment mortgages, adjustable rate mortgages and floating mortgages. Mortgage-backed securities are described in more detail below: GOVERNMENT PASS-THROUGH SECURITIES. These are securities that are issued or guaranteed by a U.S. Government agency representing an interest in a pool of mortgage loans. The primary issuers or guarantors of these mortgage-backed securities are the Government National Mortgage Association ("GNMA"), Fannie Mae and the Federal Home Loan Mortgage Corporation ("FHLMC"). Obligations of GNMA are backed by the full faith and credit of the U.S. Government. Obligations of Fannie Mae and FHLMC are not backed by the full faith and credit of the U.S. Government, but are guaranteed by agencies or instrumentalities of the U.S. Government. GNMA, Fannie Mae and FHLMC each guarantee timely distributions of interest to certificate holders. GNMA and Fannie Mae also guarantee timely distributions of scheduled principal. In the past, FHLMC has only guaranteed the ultimate collection of principal of the underlying mortgage loan; however, FHLMC now issues mortgage-backed securities (FHLMC Gold PCS) which also guarantee timely payment of monthly principal reductions. Government and private guarantees do not extend to the securities' value, which is likely to vary inversely with fluctuations in interest rates. The market value and interest yield of these mortgage-backed securities can vary due to market interest rate fluctuations and early prepayments of underlying mortgages. These securities represent ownership in a pool of federally insured mortgage loans with a maximum maturity of 30 years. However, due to scheduled and unscheduled principal payments on the underlying loans, these securities have a shorter average maturity and, therefore, less principal volatility than a comparable 30-year bond. Since prepayment rates vary widely, S-17 it is not possible to accurately predict the average maturity of a particular mortgage-backed security. The scheduled monthly interest and principal payments relating to mortgages in the pool will be "passed through" to investors. Government mortgage-backed securities differ from conventional bonds in that principal is paid back to the certificate holders over the life of the loan rather than at maturity. As a result, there will be monthly scheduled payments of principal and interest. In addition, there may be unscheduled principal payments representing prepayments on the underlying mortgages. Although these securities may offer yields higher than those available from other types of U.S. Government securities, mortgage-backed securities may be less effective than other types of securities as a means of "locking in" attractive long-term rates because of the prepayment feature. For instance, when interest rates decline, the value of these securities likely will not rise as much as comparable debt securities due to the prepayment feature. In addition, these prepayments can cause the price of a mortgage-backed security originally purchased at a premium to decline in price to its par value, which may result in a loss. PRIVATE PASS-THROUGH SECURITIES. Private pass-through securities are mortgage-backed securities issued by a non-governmental entity, such as a trust. While they are generally structured with one or more types of credit enhancement, private pass-through securities generally lack a guarantee by an entity having the credit status of a governmental agency or instrumentality. The two principal types of private mortgage-backed securities are collateralized mortgage obligations ("CMOs") and real estate mortgage investment conduits ("REMICs"), which are described below. COMMERCIAL MORTGAGE-BACKED SECURITIES ("CMBS"). CMBS are generally multi-class or pass-through securities backed by a mortgage loan or a pool of mortgage loans secured by commercial property, such as industrial and warehouse properties, office buildings, retail space and shopping malls, multifamily properties and cooperative apartments. The commercial mortgage loans that underlie CMBS are generally not amortizing or not fully amortizing. That is, at their maturity date, repayment of the remaining principal balance or "balloon" is due and is repaid through the attainment of an additional loan of sale of the property. CMOs. CMOs are securities collateralized by mortgages, mortgage pass-throughs, mortgage pay-through bonds (bonds representing an interest in a pool of mortgages where the cash flow generated from the mortgage collateral pool is dedicated to bond repayment), and mortgage-backed bonds (general obligations of the issuers payable out of the issuers' general funds and additionally secured by a first lien on a pool of single family detached properties). CMOs are rated in one of the two highest categories by S&P or Moody's. Many CMOs are issued with a number of classes or series which have different expected maturities. Investors purchasing such CMOs are credited with their portion of the scheduled payments of interest and principal on the underlying mortgages plus all unscheduled prepayments of principal based on a predetermined priority schedule. Accordingly, the CMOs in the longer maturity series are less likely than other mortgage pass-throughs to be prepaid prior to their stated maturity. Although some of the mortgages underlying CMOs may be supported by various types of insurance, and some CMOs may be backed by GNMA certificates or other mortgage pass-throughs issued or guaranteed by U.S. Government agencies or instrumentalities, the CMOs themselves are not generally guaranteed. REMICs. REMICs are private entities formed for the purpose of holding a fixed pool of mortgages secured by interests in real property. Guaranteed REMIC pass-through certificates ("REMIC Certificates") issued by Fannie Mae or FHLMC represent beneficial ownership interests in a REMIC trust consisting principally of mortgage loans or Fannie Mae, FHLMC or GNMA-guaranteed mortgage pass-through certificates. For FHLMC REMIC Certificates, FHLMC guarantees the timely payment of interest. GNMA REMIC Certificates are backed by the full faith and credit of the U.S. Government. ADJUSTABLE RATE MORTGAGE SECURITIES ("ARMS"). ARMS are a form of pass-through security representing interests in pools of mortgage loans whose interest rates are adjusted from time to time. The adjustments usually are determined in accordance with a predetermined interest rate index and may be subject S-18 to certain limits. While the value of ARMS, like other debt securities, generally varies inversely with changes in market interest rates (increasing in value during periods of declining interest rates and decreasing in value during periods of increasing interest rates), the value of ARMS should generally be more resistant to price swings than other debt securities because the interest rates of ARMS move with market interest rates. The adjustable rate feature of ARMS will not, however, eliminate fluctuations in the prices of ARMS, particularly during periods of extreme fluctuations in interest rates. Also, since many adjustable rate mortgages only reset on an annual basis, it can be expected that the prices of ARMS will fluctuate to the extent that changes in prevailing interests rates are not immediately reflected in the interest rates payable on the underlying adjustable rate mortgages. STRIPPED MORTGAGE-BACKED SECURITIES. Stripped mortgage-backed securities are securities that are created when a U.S. Government agency or a financial institution separates the interest and principal components of a mortgage-backed security and sells them as individual securities. The holder of the "principal-only" security ("PO") receives the principal payments made by the underlying mortgage-backed security, while the holder of the "interest-only" security ("IO") receives interest payments from the same underlying security. The prices of stripped mortgage-backed securities may be particularly affected by changes in interest rates. As interest rates fall, prepayment rates tend to increase, which tends to reduce prices of IOs and increase prices of POs. Rising interest rates can have the opposite effect. PARALLEL PAY SECURITIES; PAC BONDS. Parallel pay CMOs and REMICs are structured to provide payments of principal on each payment date to more than one class. These simultaneous payments are taken into account in calculating the stated maturity date or final distribution date of each class, which must be retired by its stated maturity date or final distribution date, but may be retired earlier. Planned Amortization Class CMOs ("PAC Bonds") generally require payments of a specified amount of principal on each payment date. PAC Bonds are always parallel pay CMOs with the required principal payment on such securities having the highest priority after interest has been paid to all classes. PFANDBRIEFE. A Pfandbriefe is a fixed-term, fixed-rate bond issued by a German mortgage bank or a public-sector bank to finance secured real estate loans or public sector loans. Although Pfandbriefe are collateralized securities, the issuer assumes all of the prepayment risk. ESTIMATED AVERAGE LIFE. Due to the possibility of prepayments of the underlying mortgage instruments, mortgage-backed securities generally do not have a known maturity. In the absence of a known maturity, market participants generally refer to an estimated average life. An average life estimate is a function of an assumption regarding anticipated prepayment patterns, based upon current interest rates, current conditions in the relevant housing markets and other factors. The assumption is necessarily subjective, and thus different market participants can produce different average life estimates with regard to the same security. There can be no assurance that estimated average life will be a security's actual average life. NON-DIVERSIFICATION--The International Fixed Income and Emerging Markets Debt Funds are non-diversified investment companies, as defined in the 1940 Act, which means that a relatively high percentage of assets of the Funds may be invested in the obligations of a limited number of issuers. Although the advisers generally do not intend to invest more than 5% of each Fund's assets in any single issuer (with the exception of securities which are issued or guaranteed by a national government), the value of shares of the Funds may be more susceptible to any single economic, political or regulatory occurrence than the shares of a diversified investment company would be. The Funds intend to satisfy the diversification requirements necessary to qualify as a regulated investment company under the Code, which requires that the Funds be diversified (I.E., not invest more than 5% of their assets in the securities in any one issuer) as to 50% of their assets. OBLIGATIONS OF DOMESTIC BANKS, FOREIGN BANKS AND FOREIGN BRANCHES OF U.S. BANKS--The Funds may invest in obligations issued by banks and other savings institutions. Investments in bank obligations include obligations of domestic branches of foreign banks and foreign branches of domestic banks. Such investments in domestic branches of foreign banks and foreign branches of domestic banks may involve risks that are different from investments in securities of domestic branches of U.S. banks. S-19 These risks may include future unfavorable political and economic developments, possible withholding taxes on interest income, seizure or nationalization of foreign deposits, currency controls, interest limitations, or other governmental restrictions which might affect the payment of principal or interest on the securities held by a Fund. Additionally, these institutions may be subject to less stringent reserve requirements and to different accounting, auditing, reporting and recordkeeping requirements than those applicable to domestic branches of U.S. banks. Bank obligations include the following: BANKERS' ACCEPTANCES. Bankers' acceptances are bills of exchange or time drafts drawn on and accepted by a commercial bank. Corporations use bankers' acceptances to finance the shipment and storage of goods and to furnish dollar exchange. Maturities are generally six months or less. CERTIFICATES OF DEPOSIT. Certificates of deposit are interest-bearing instruments with a specific maturity. They are issued by banks and savings and loan institutions in exchange for the deposit of funds and normally can be traded in the secondary market prior to maturity. Certificates of deposit with penalties for early withdrawal will be considered illiquid. TIME DEPOSITS. Time deposits are non-negotiable receipts issued by a bank in exchange for the deposit of funds. Like a certificate of deposit, it earns a specified rate of interest over a definite period of time; however, it cannot be traded in the secondary market. Time deposits with a withdrawal penalty or that mature in more than seven days are considered to be illiquid securities. OBLIGATIONS OF SUPRANATIONAL ENTITIES--Supranational entities are entities established through the joint participation of several governments, including the Asian Development Bank, the Inter-American Development Bank, International Bank for Reconstruction and Development (World Bank), African Development Bank, European Economic Community, European Investment Bank and the Nordic Investment Bank. The governmental members, or "stock holders," usually make initial capital contributions to the supranational entity and, in many cases, are committed to make additional capital contributions if the supranational entity is unable to repay its borrowings. OPTIONS--A Fund may purchase and write put and call options on indices and enter into related closing transactions. A put option on a security gives the purchaser of the option the right to sell, and the writer of the option the obligation to buy, the underlying security at any time during the option period. A call option on a security gives the purchaser of the option the right to buy, and the writer of the option the obligation to sell, the underlying security at any time during the option period. The premium paid to the writer is the consideration for undertaking the obligations under the option contract. A Fund may purchase and write put and call options on foreign currencies (traded on U.S. and foreign exchanges or over-the-counter markets), to manage its exposure to exchange rates. Call options on foreign currency written by a Fund will be "covered" as required by the 1940 Act. Put and call options on indices are similar to options on securities except that options on an index give the holder the right to receive, upon exercise of the option, an amount of cash if the closing level of the underlying index is greater than (or less than, in the case of puts) the exercise price of the option. This amount of cash is equal to the difference between the closing price of the index and the exercise price of the option, expressed in dollars multiplied by a specified number. Thus, unlike options on individual securities, all settlements are in cash, and gain or loss depends on price movements in the particular market represented by the index generally, rather than the price movements in individual securities. All options written on indices or securities must be "covered" as required by the 1940 Act. Each Fund may trade put and call options on securities, securities indices and currencies, as the advisers determine is appropriate in seeking the Fund's investment objective, and except as restricted by a Fund's investment limitations. See "Investment Limitations." S-20 The initial purchase (sale) of an option contract is an "opening transaction." In order to close out an option position, a Fund may enter into a "closing transaction," which is simply the sale (purchase) of an option contract on the same security with the same exercise price and expiration date as the option contract originally opened. If a Fund is unable to effect a closing purchase transaction with respect to an option it has written, it will not be able to sell the underlying security until the option expires or the Fund delivers the security upon exercise. A Fund may purchase put and call options on securities for any lawful purpose, including to protect against a decline in the market value of the securities in its portfolio or to anticipate an increase in the market value of securities that the Fund may seek to purchase in the future. A Fund purchasing put and call options pays a premium for such options. If price movements in the underlying securities are such that exercise of the options would not be profitable for the Fund, loss of the premium paid may be offset by an increase in the value of the Fund's securities or by a decrease in the cost of acquisition of securities by the Fund. A Fund may write (I.E., sell) "covered" call options on securities for any lawful purpose, including as a means of increasing the yield on its assets and as a means of providing limited protection against decreases in its market value. When a Fund writes an option, if the underlying securities do not increase or decrease, as applicable, to a price level that would make the exercise of the option profitable to the holder thereof, the option generally will expire without being exercised and the Fund will realize as profit the premium received for such option. When a call option of which a Fund is the writer is exercised, the Fund will be required to sell the underlying securities to the option holder at the strike price, and will not participate in any increase in the price of such securities above the strike price. When a put option of which a Fund is the writer is exercised, the Fund will be required to purchase the underlying securities at a price in excess of the market value of such securities. A Fund may purchase and write options on an exchange or over-the-counter. Over-the-counter options ("OTC options") differ from exchange-traded options in several respects. They are transacted directly with dealers and not with a clearing corporation, and therefore entail the risk of non-performance by the dealer. OTC options are available for a greater variety of securities and for a wider range of expiration dates and exercise prices than are available for exchange-traded options. Because OTC options are not traded on an exchange, pricing is done normally by reference to information from a market maker. It is the SEC's position that OTC options are generally illiquid. The market value of an option generally reflects the market price of an underlying security. Other principal factors affecting market value include supply and demand, interest rates, the pricing volatility of the underlying security and the time remaining until the expiration date. Risks associated with options transactions include: (1) the success of a hedging strategy may depend on an ability to predict movements in the prices of individual securities, fluctuations in markets and movements in interest rates; (2) there may be an imperfect correlation between the movement in prices of options and the securities underlying them; (3) there may not be a liquid secondary market for options; and (4) while a Fund will receive a premium when it writes "covered" call options, it may not participate fully in a rise in the market value of the underlying security. PAY-IN-KIND-BONDS--Pay-in-kind bonds are securities which, at the issuer's option, pay interest in either cash or additional securities for a specified period. Pay-in-kind bonds, like zero coupon bonds, are designed to give an issuer flexibility in managing cash flow. Pay-in-kind bonds are expected to reflect the market value of the underlying debt plus an amount representing accrued interest since the last payment. Pay-in-kind bonds are usually less volatile than zero coupon bonds, but more volatile than cash pay securities. PRIVATIZATIONS--Privatizations are foreign government programs for selling all or part of the interests in government owned or controlled enterprises. The ability of a U.S. entity to participate in privatizations in certain foreign countries may be limited by local law, or the terms on which a Fund may be permitted to participate may be less advantageous than those applicable for local investors. There can be no assurance that foreign governments will continue to sell their interests in companies currently owned or controlled by them or that privatization programs will be successful. S-21 RECEIPTS--Receipts are interests in separately traded interest and principal component parts of U.S. Government obligations that are issued by banks or brokerage firms and are created by depositing U.S. Government obligations into a special account at a custodian bank. The custodian holds the interest and principal payments for the benefit of the registered owners of the certificates or receipts. The custodian arranges for the issuance of the certificates or receipts evidencing ownership and maintains the register. Receipts include "Treasury Receipts" ("TRs"), "Treasury Investment Growth Receipts" ("TIGRs") and "Certificates of Accrual on Treasury Securities" ("CATS"). TIGRs and CATS are interests in private proprietary accounts while TRs and STRIPS (See "U.S.Treasury Obligations") are interests in accounts sponsored by the U.S. Treasury. Receipts are sold as zero coupon securities, which means that they are sold at a substantial discount and redeemed at face value at their maturity date without interim cash payments of interest or principal. This discount is accreted over the life of the security, and such accretion will constitute the income earned on the security for both accounting and tax purposes. For tax purposes, original issue discount that accretes in a taxable year is treated as earned by a Fund and therefore is subject to the distribution requirements applicable to the regulated investment companies under Subchapter M of the Code. Because of these features, such securities may be subject to greater interest rate volatility than interest paying fixed income securities. REPURCHASE AGREEMENTS--A repurchase agreement is an agreement in which one party sells securities to another party in return for cash, with an agreement to repurchase equivalent securities at an agreed price and on an agreed future date. A Fund may enter into repurchase agreements with financial institutions. The Funds each follow certain procedures designed to minimize the risks inherent in such agreements. These procedures include effecting repurchase transactions only with large, well-capitalized and well-established financial institutions whose condition will be continually monitored by the advisers. The repurchase agreements entered into by a Fund will provide that the underlying collateral at all times shall have a value at least equal to 102% of the resale price stated in the agreement (the advisers monitor compliance with this requirement). Under all repurchase agreements entered into by a Fund, the custodian or its agent must take possession of the underlying collateral. In the event of a default or bankruptcy by a selling financial institution, a Fund will seek to liquidate such collateral. However, the exercising of each Fund's right to liquidate such collateral could involve certain costs or delays and, to the extent that proceeds from any sale upon a default of the obligation to repurchase were less than the repurchase price, the Fund could suffer a loss. The investments of each of the Funds in repurchase agreements, at times, may be substantial when, in the view of the advisers, liquidity or other considerations so warrant. RESTRICTED SECURITIES--Restricted securities are securities that may not be sold freely to the public absent registration under the Securities Act of 1933, as amended (the "1933 Act"), or an exemption from registration. Permitted investments for the Funds include restricted securities. Restricted securities, including securities eligible for re-sale under Rule 144A of the 1933 Act, that are determined to be liquid are not subject to this limitation. This determination is to be made by the advisers pursuant to guidelines adopted by the Trust's Board of Trustees. Under these guidelines, the particular adviser will consider the frequency of trades and quotes for the security, the number of dealers in, and potential purchasers for, the securities, dealer undertakings to make a market in the security, and the nature of the security and of the marketplace trades. In purchasing such restricted securities, the advisers intend to purchase securities that are exempt from registration under Rule 144A under the 1933 Act and Section 4(2) commercial paper issued in reliance on an exemption from registration under Section 4(2) of the 1933 Act. REVERSE REPURCHASE AGREEMENTS--Certain Funds may borrow funds for temporary purposes by entering into reverse repurchase agreements. Pursuant to such agreements, a Fund would sell portfolio securities to financial institutions such as banks and broker-dealers, and agree to repurchase them at a mutually agreed-upon date and price. A Fund enters into reverse repurchase agreements only to avoid otherwise selling securities during unfavorable market conditions to meet redemptions. At the time the Fund enters into a reverse repurchase agreement, it places in a segregated account cash or liquid securities having a value equal to the repurchase price (including accrued interest), and will subsequently monitor the account to ensure that S-22 such equivalent value is maintained. Reverse repurchase agreements involve the risk that the market value of the securities sold by a Fund may decline below the price at which it is obligated to repurchase the securities. Reverse repurchase agreements are considered to be borrowings by a Fund under the 1940 Act. SECURITIES LENDING--Each Fund may lend portfolio securities to brokers, dealers and other financial organizations that meet capital and other credit requirements or other criteria established by the Fund's Board of Trustees. These loans, if and when made, may not exceed 33 1/3% of the total asset value of the Fund (including the loan collateral). No Fund will lend portfolio securities to its investment adviser, sub-adviser or their affiliates unless it has applied for and received specific authority to do so from the SEC. Loans of portfolio securities will be fully collateralized by cash, letters of credit or U.S. Government securities, and the collateral will be maintained in an amount equal to at least 100% of the current market value of the loaned securities by marking to market daily, although the borrower will be required to deliver collateral of 102% and 105% of the market value of borrowed securities for domestic and foreign issuers, respectively. Any gain or loss in the market price of the securities loaned that might occur during the term of the loan would be for the account of the Fund. The Fund may pay a part of the interest earned from the investment of collateral, or other fee, to an unaffiliated third party for acting as the Fund's securities lending agent. By lending its securities, a Fund may increase its income by receiving payments from the borrower that reflect the amount of any interest or any dividends payable on the loaned securities as well as by either investing cash collateral received from the borrower in short-term instruments or obtaining a fee from the borrower when U.S. Government securities or letters of credit are used as collateral. Each Fund will adhere to the following conditions whenever its portfolio securities are loaned: (i) the Fund must receive at least 100% cash collateral or equivalent securities of the type discussed in the preceding paragraph from the borrower; (ii) the borrower must increase such collateral whenever the market value of the securities rises above the level of such collateral; (iii) the Fund must be able to terminate the loan on demand; (iv) the Fund must receive reasonable interest on the loan, as well as any dividends, interest or other distributions on the loaned securities and any increase in market value; (v) the Fund may pay only reasonable fees in connection with the loan (which fees may include fees payable to the lending agent, the borrower, the Fund's administrator and the custodian); and, (vi) voting rights on the loaned securities may pass to the borrower, provided, however, that if a material event adversely affecting the investment occurs, the Fund must terminate the loan and regain the right to vote the securities. The Board has adopted procedures reasonably designed to ensure that the foregoing criteria will be met. Loan agreements involve certain risks in the event of default or insolvency of the borrower, including possible delays or restrictions upon the Fund's ability to recover the loaned securities or dispose of the collateral for the loan, which could give rise to loss because of adverse market action, expenses and/or delays in connection with the disposition of the underlying securities. SOVEREIGN DEBT--The cost of servicing external debt will also generally be adversely affected by rising international interest rates, because many external debt obligations bear interest at rates which are adjusted based upon international interest rates. The ability to service external debt will also depend on the level of the relevant government's international currency reserves and its access to foreign exchange. Currency devaluations may affect the ability of a sovereign obligor to obtain sufficient foreign exchange to service its external debt. As a result of the foregoing or other factors, a governmental obligor may default on its obligations. If such an event occurs, a Fund may have limited legal recourse against the issuer and/or guarantor. Remedies must, in some cases, be pursued in the courts of the defaulting party itself, and the ability of the holder of foreign sovereign debt securities to obtain recourse may be subject to the political climate in the relevant country. In addition, no assurance can be given that the holders of commercial bank debt will not contest payments to the holders of other foreign sovereign debt obligations in the event of default under their commercial bank loan agreements. STRUCTURED SECURITIES--The Emerging Markets Debt Fund may invest a portion of its assets in entities organized and operated solely for the purpose of restructuring the investment characteristics of S-23 sovereign debt obligations of emerging market issuers. This type of restructuring involves the deposit with, or purchase by, an entity, such as a corporation or trust, of specified instruments (such as commercial bank loans or Brady Bonds) and the issuance by that entity of one or more classes of securities ("Structured Securities") backed by, or representing interests in, the underlying instruments. The cash flow on the underlying instruments may be apportioned among the newly issued Structured Securities to create securities with different investment characteristics, such as varying maturities, payment priorities and interest rate provisions, and the extent of the payments made with respect to Structured Securities is dependent on the extent of the cash flow on the underlying instruments. Because Structured Securities of the type in which the Fund anticipates it will invest typically involve no credit enhancement, their credit risk generally will be equivalent to that of the underlying instruments. The Fund is permitted to invest in a class of Structured Securities that is either subordinated or unsubordinated to the right of payment of another class. Subordinated Structured Securities typically have higher yields and present greater risks than unsubordinated Structured Securities. Structured Securities are typically sold in private placement transactions, and there currently is no active trading market for Structured Securities. Certain issuers of such structured securities may be deemed to be "investment companies" as defined in the 1940 Act. As a result, the Fund's investment in such securities may be limited by certain investment restrictions contained in the 1940 Act. SWAPS, CAPS, FLOORS, COLLARS AND SWAPTIONS--Swaps are privately negotiated over-the-counter derivative products in which two parties agree to exchange payment streams calculated in relation to a rate, index, instrument or certain securities (referred to as the "underlying") and a predetermined amount (referred to as the "notional amount"). The underlying for a swap may be an interest rate (fixed or floating), a currency exchange rate, a commodity price index, a security, group of securities or a securities index, a combination of any of these, or various other rates, assets or indices. Swap agreements generally do not involve the delivery of the underlying or principal, and a party's obligations generally are equal to only the net amount to be paid or received under the agreement based on the relative values of the positions held by each party to the swap agreement. A great deal of flexibility is possible in the way swaps may be structured. For example, in a simple fixed-to-floating interest rate swap, one party makes payments equivalent to a fixed interest rate, and the other party makes payments calculated with reference to a specified floating interest rate, such as LIBOR or the prime rate. In a currency swap, the parties generally enter into an agreement to pay interest streams in one currency based on a specified rate in exchange for receiving interest streams denominated in another currency. Currency swaps may involve initial and final exchanges that correspond to the agreed upon notional amount. A Fund may engage in simple or more complex swap transactions involving a wide variety of underlyings for various reasons. For example, a Fund may enter into a swap to gain exposure to investments (such as an index of securities in a market) or currencies without actually purchasing those stocks or currencies; to make an investment without owning or taking physical custody of securities or currencies in circumstances in which direct investment is restricted for legal reasons or is otherwise impracticable; to hedge an existing position; to obtain a particular desired return at a lower cost to the Fund than if it had invested directly in an instrument that yielded the desired return; or for various other reasons. Caps, floors, collars and swaptions are privately-negotiated option-based derivative products. Like a put or call option, the buyer of a cap or floor pays a premium to the writer. In exchange for that premium, the buyer receives the right to a payment equal to the differential if the specified index or rate rises above (in the case of a cap) or falls below (in the case of a floor) a pre-determined strike level. Like swaps, obligations under caps and floors are calculated based upon an agreed notional amount, and, like most swaps (other than currency swaps), the entire notional amount is not exchanged. A collar is a combination product in which one party buys a cap from and sells a floor to another party. Swaptions give the holder the right to enter into a swap. A Fund may use one or more of these derivative products in addition to or in lieu of a swap involving a similar rate or index. Under current market practice, swaps, caps, collars and floors between the same two parties are generally documented under a "master agreement." In some cases, options and forwards between the parties may also be S-24 governed by the same master agreement. In the event of a default, amounts owed under all transactions entered into under, or covered by, the same master agreement would be netted, and only a single payment would be made. The swap market has grown substantially in recent years with a large number of banks and investment banking firms acting both as principals and as agents using standardized swap agreements. As a result, the use of swaps has become more prevalent in comparison with the markets for other similar instruments that are also traded in over-the-counter markets. Swaps and other derivatives involve risks. One significant risk in a swap, cap, floor, collar or swaption is the volatility of the specific interest rate, currency or other underlying that determines the amount of payments due to and from a Fund. This is true whether these derivative products are used to create additional risk exposure for a Fund or to hedge, or manage, existing risk exposure. If under a swap, cap, floor, collar or swaption agreement a Fund is obligated to make a payment to the counterparty, the Fund must be prepared to make the payment when due. A Fund could suffer losses with respect to such an agreement if the Fund is unable to terminate the agreement or reduce its exposure through offsetting transactions. Further, the risks of caps, floors and collars, like put and call options, may be unlimited for the seller if the cap, or floor is not hedged or "covered," but is limited for the buyer. Because under swap, cap, floor, collar and swaption agreements a counterparty may be obligated to make payments to a Fund, these derivative products are subject to risks related to the counterparty's creditworthiness. If a counterparty defaults, a Fund's risk of loss will consist of any payments that the Fund is entitled to receive from the counterparty under the agreement (this may not be true for currency swaps that require the delivery of the entire notional amount of one designated currency in exchange for the other). Upon default by a counterparty, however, a Fund may have contractual remedies under the swap agreement. A Fund will enter into swaps only with counterparties that an adviser believes to be creditworthy. In addition, a Fund will earmark or segregate cash or liquid securities in an amount equal to any liability amount owned under a swap, cap, floor, collar or swaption agreement, or will otherwise "cover" its position as required by the 1940 Act. U.S. GOVERNMENT SECURITIES--Examples of types of U.S. Government obligations in which a Fund may invest include U.S. Treasury Obligations and the obligations of U.S. Government agencies or U.S. Government sponsored entities such as Federal Home Loan Banks, Federal Farm Credit Banks, Federal Land Banks, the Federal Housing Administration, Farmers Home Administration, Export-Import Bank of the United States, Small Business Administration, Fannie Mae, Government National Mortgage Association, General Services Administration, Student Loan Marketing Association, Central Bank for Cooperatives, Freddie Mac, Federal Intermediate Credit Banks, Maritime Administration, and other similar agencies. Whether backed by the full faith and credit of the U.S. Treasury or not, U.S. Government securities are not guaranteed against price movements due to fluctuating interest rates. U.S. TREASURY OBLIGATIONS. U.S. Treasury obligations consist of bills, notes and bonds issued by the U.S. Treasury and separately traded interest and principal component parts of such obligations that are transferable through the federal book-entry system known as Separately Traded Registered Interest and Principal Securities ("STRIPS") and Treasury Receipts ("TRs"). U.S. GOVERNMENT ZERO COUPON SECURITIES. STRIPS and receipts are sold as zero coupon securities, that is, fixed income securities that have been stripped of their unmatured interest coupons. Zero coupon securities are sold at a (usually substantial) discount and redeemed at face value at their maturity date without interim cash payments of interest or principal. The amount of this discount is accreted over the life of the security, and the accretion constitutes the income earned on the security for both accounting and tax purposes. Because of these features, the market prices of zero coupon securities are generally more volatile than the market prices of securities that have similar maturity but that pay interest periodically. Zero coupon securities are likely to respond to a greater degree to interest rate changes than are non-zero coupon securities with similar maturity and credit qualities. S-25 U.S. GOVERNMENT AGENCIES. Some obligations issued or guaranteed by agencies of the U.S. Government are supported by the full faith and credit of the U.S. Treasury (E.G., Treasury bills, notes and bonds, and securities guaranteed by GNMA), others are supported by the right of the issuer to borrow from the Treasury (E.G., Federal Home Loan Banks), while still others are supported only by the credit of the instrumentality (E.G., Fannie Mae). Guarantees of principal by agencies or instrumentalities of the U.S. Government may be a guarantee of payment at the maturity of the obligation so that in the event of a default prior to maturity there might not be a market and thus no means of realizing on the obligation prior to maturity. Guarantees as to the timely payment of principal and interest do not extend to the value or yield of these securities nor to the value of a Fund's shares. VARIABLE AND FLOATING RATE INSTRUMENTS--Certain obligations may carry variable or floating rates of interest and may involve a conditional or unconditional demand feature. Such instruments bear interest at rates which are not fixed, but which vary with changes in specified market rates or indices. The interest rates on these securities may be reset daily, weekly, quarterly or at some other reset period. There is a risk that the current interest rate on such obligations may not accurately reflect existing market interest rates. A demand instrument with a demand notice exceeding seven days may be considered illiquid if there is no secondary market for such security. WHEN-ISSUED AND DELAYED DELIVERY SECURITIES--When-issued and delayed delivery basis transactions involve the purchase of an instrument with payment and delivery taking place in the future. Delivery of and payment for these securities may occur a month or more after the date of the purchase commitment. A Fund will "cover" its position as required by the 1940 Act. The interest rate realized on these securities is fixed as of the purchase date and no interest accrues to the Fund before settlement. These securities are subject to market fluctuation due to changes in market interest rates, and it is possible that the market value at the time of settlement could be higher or lower than the purchase price if the general level of interest rates has changed. Although a Fund generally purchases securities on a when-issued or forward commitment basis with the intention of actually acquiring securities for their portfolios, the Fund may dispose of a when-issued security or forward commitment prior to settlement if it deems it appropriate. YANKEE OBLIGATIONS--Yankee obligations ("Yankees") are U.S. dollar-denominated instruments of foreign issuers who either register with the SEC or issue under Rule 144A under the Securities Act of 1933 Act. These obligations consist of debt securities (including preferred or preference stock of non-governmental issuers), certificates of deposit, fixed time deposits and bankers' acceptances issued by foreign banks, and debt obligations of foreign governments or their subdivisions, agencies and instrumentalities, international agencies and supranational entities. Some securities issued by foreign governments or their subdivisions, agencies and instrumentalities may not be backed by the full faith and credit of the foreign government. The Yankee obligations selected for a Fund will adhere to the same quality standards as those utilized for the selection of domestic debt obligations. ZERO COUPON SECURITIES--Zero coupon securities are securities that are sold at a discount to par value and securities on which interest payments are not made during the life of the security. Upon maturity, the holder is entitled to receive the par value of the security. While interest payments are not made on such securities, holders of such securities are deemed to have received "phantom income" annually. Because a Fund will distribute its "phantom income" to shareholders, to the extent that shareholders elect to receive dividends in cash rather than reinvesting such dividends in additional shares, the Fund will have fewer assets with which to purchase income producing securities. Pay-in-kind securities pay interest in either cash or additional securities, at the issuer's option, for a specified period. Pay-in-kind bonds, like zero coupon bonds, are designed to give an issuer flexibility in managing cash flow. Pay-in-kind bonds are expected to reflect the market value of the underlying debt plus an amount representing accrued interest since the last payment. Pay-in-kind bonds are usually less volatile than zero coupon bonds, but more volatile than cash pay securities. Pay-in-kind securities are securities that have interest payable by delivery of additional securities. Upon maturity, the holder is entitled to receive the aggregate par value of the securities. Deferred payment securities are securities that remain zero coupon securities until a predetermined date, at which time the stated coupon rate becomes effective and interest becomes payable at regular intervals. S-26 To avoid any leveraging concerns, a Fund will "cover" its position as required by the 1940 Act. Zero coupon, pay-in-kind and deferred payment securities may be subject to greater fluctuation in value and lesser liquidity in the event of adverse market conditions than comparably rated securities paying cash interest at regular interest payment periods. STRIPS and Receipts (TRs, TIGRs and CATS) are sold as zero coupon securities, that is, fixed income securities that have been stripped of their unmatured interest coupons. Zero coupon securities are sold at a (usually substantial) discount and redeemed at face value at their maturity date without interim cash payments of interest or principal. The amount of this discount is accreted over the life of the security, and the accretion constitutes the income earned on the security for both accounting and tax purposes. Because of these features, the market prices of zero coupon securities are generally more volatile than the market prices of securities that have similar maturity but that pay interest periodically. Zero coupon securities are likely to respond to a greater degree to interest rate changes that are non-zero coupon securities with similar maturity and credit qualities. Corporate zero coupon securities are: (i) notes or debentures which do not pay current interest and are issued at substantial discounts from par value, or (ii) notes or debentures that pay no current interest until a stated date one or more years into the future, after which date the issuer is obligated to pay interest until maturity, usually at a higher rate than if interest were payable from the date of issuance, and may also make interest payments in kind (E.G., with identical zero coupon securities). Such corporate zero coupon securities, in addition to the risks identified above, are subject to the risk of the issuer's failure to pay interest and repay principal in accordance with the terms of the obligation. A Fund must accrete the discount or interest on high-yield bonds structured as zero coupon securities as income even though it does not receive a corresponding cash interest payment until the security's maturity or payment date. For tax purposes, original issue discount that accretes in a taxable year is treated as earned by a Fund and therefore is subject to the distribution requirements applicable to the regulated investment companies under Subchapter M of the Code. A Fund may have to dispose of its securities under disadvantageous circumstances to generate cash, or may have to leverage itself by borrowing cash to satisfy distribution requirements. A Fund accrues income with respect to the securities prior to the receipt of cash payments. INVESTMENT LIMITATIONS FUNDAMENTAL POLICIES. The following investment limitations are fundamental policies of the International Equity, Emerging Markets Equity, Emerging Markets Debt, Tax-Managed International Equity and International Fixed Income Funds and may not be changed without shareholder approval. Each of the International Equity, Emerging Markets Equity, Emerging Markets Debt and Tax-Managed International Equity Funds may not: 1. With respect to 75% of its total assets, (i) purchase securities of any issuer (except securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities) if, as a result, more than 5% of its total assets would be invested in the securities of such issuer; or (ii) acquire more than 10% of the outstanding voting securities of any one issuer. This limitation does not apply to the Emerging Markets Debt Fund. 2. Purchase any securities which would cause more than 25% of its total assets to be invested in the securities of one or more issuers conducting their principal business activities in the same industry, provided that this limitation does not apply to investments in securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities. 3. Borrow money in an amount exceeding 33 1/3% of the value of its total assets, provided that, for purposes of this limitation, investment strategies which either obligate a Fund to purchase securities or require a Fund to segregate assets are not considered to be borrowings. To the extent that its borrowings exceed 5% of its assets, (i) all borrowings will be repaid before making additional investments and any interest paid on such borrowings will reduce income, and (ii) asset coverage of at least 300% is required. S-27 4. Make loans if, as a result, more than 33 1/3% of its total assets would be lent to other parties, except that each Fund may (i) purchase or hold debt instruments in accordance with its investment objective and policies; (ii) enter into repurchase agreements; and (iii) lend its securities. 5. Purchase or sell real estate, physical commodities, or commodities contracts, except that each Fund may purchase (i) marketable securities issued by companies which own or invest in real estate (including REITs), commodities, or commodities contracts, and (ii) commodities contracts relating to financial instruments, such as financial futures contracts and options on such contracts. 6. Act as an underwriter of securities of other issuers except as it may be deemed an underwriter in selling a fund security. 7. Issue senior securities (as defined in the 1940 Act), except as permitted by rule, regulation or order of the SEC. 8. Invest in interests in oil, gas or other mineral exploration or development programs and oil, gas or mineral leases. This limitation does not apply to the Tax-Managed International Equity Fund. The International Fixed Income Fund may not: 1. Purchase any securities which would cause more than 25% of the total assets of the Fund to be invested in the securities of one or more issuers conducting their principal business activities in the same industry, provided that this limitation does not apply to investments in obligations issued or guaranteed by the U.S. Government or its agencies and instrumentalities. 2. Borrow money except for temporary or emergency purposes and then only in an amount not exceeding 10% of the value of the total assets of the Fund. This borrowing provision is included solely to facilitate the orderly sale of fund securities to accommodate substantial redemption requests if they should occur and is not for investment purposes. All borrowings will be repaid before making additional investments for the Fund and any interest paid on such borrowings will reduce the income of the Fund. 3. Pledge, mortgage or hypothecate assets except to secure temporary borrowings as described in the Prospectuses in aggregate amounts not to exceed 10% of the net assets of such Fund taken at current value at the time of the incurrence of such loan. 4. Make loans, except that the Fund may (i) purchase or hold debt securities in accordance with its investment objectives and policies; (ii) engage in securities lending as described in this Prospectus and in the Statement of Additional Information; and (iii) enter into repurchase agreements, provided that repurchase agreements and time deposits maturing in more than seven days, and other illiquid securities, including securities which are not readily marketable or are restricted, are not to exceed, in the aggregate, 10% of the total assets of the Fund. 5. Invest in companies for the purpose of exercising control. 6. Acquire more than 10% of the voting securities of any one issuer. 7. Purchase or sell real estate, real estate limited partnership interests, commodities or commodities contracts. However, subject to its permitted investments, the Fund may purchase obligations issued by companies which invest in real estate, commodities or commodities contracts. 8. Make short sales of securities, maintain a short position or purchase securities on margin, except as described in the Prospectus and except that the Trust may obtain short-term credits as necessary for the clearance of security transactions. 9. Act as an underwriter of securities of other issuers except as it may be deemed an underwriter in selling a portfolio security. S-28 10. Purchase securities of other investment companies except as permitted by the 1940 Act and the rules and regulations thereunder and may only purchase securities of money market funds. Under these rules and regulations, the Fund is prohibited from acquiring the securities of other investment companies if, as a result of such acquisition, the Fund owns more then 3% of the total voting stock of the company; securities issued by any one investment company represent more than 5% of the total Fund assets; or securities (other than treasury stock) issued by all investment companies represent more than 10% of the total assets of the Fund. A Fund's purchase of such investment company securities results in the bearing of expenses such that shareholders would indirectly bear a proportionate share of the operating expenses of such investment companies, including advisory fees. 11. Issue senior securities (as defined in the 1940 Act) except in connection with permitted borrowing as described in the Prospectus and this Statement of Additional Information or as permitted by rule, regulation or order of the SEC. 12. Purchase or retain securities of an issuer if, to the knowledge of the Trust, an officer, trustee, partner or director of the Trust or any investment adviser of the Trust owns beneficially more than 1/2 of 1% of the shares or securities of such issuer and all such officers, trustees, partners and directors owning more than 1/2 of 1% of such shares or securities together own more than 5% of such shares or securities. 13. Purchase securities of any company which has (with predecessors) a record of less than three years continuing operations if, as a result, more than 5% of the total assets (taken at current value) would be invested in such securities. 14. Invest in interests in oil, gas or other mineral exploration or development programs and oil, gas or mineral leases. 15. Purchase restricted securities (securities which must be registered under the 1933 Act, before they may be offered or sold to the public) or other illiquid securities except as described in the Prospectus and this Statement of Additional Information. For purposes of the industry concentration limitations discussed above, these definitions apply to each Fund, and for purposes of the International Fixed Income and Tax-Managed International Equity Funds, these limitations form part of the fundamental limitation: (i) utility companies will be divided according to their services, for example, gas, gas transmission, electric and telephone will each be considered a separate industry; (ii) financial service companies will be classified according to end users of their services, for example, automobile finance, bank finance and diversified finance will each be considered a separate industry; (iii) supranational agencies will be deemed to be issuers conducting their principal business activities in the same industry; and (iv) governmental issuers within a particular country will be deemed to be conducting their principal business in the same industry. The foregoing percentages (except for the limitation on borrowing) will apply at the time of the purchase of a security and shall not be violated unless an excess or deficiency occurs, immediately after or as a result of a purchase of such security. NON-FUNDAMENTAL POLICIES. The following investment limitations are non-fundamental policies and may be changed without shareholder approval. Each of the International Equity, Emerging Markets Equity, Emerging Market Debt and Tax-Managed International Equity Funds may not: 1. Pledge, mortgage or hypothecate assets except to secure borrowings permitted by the Fund's fundamental limitation on borrowing. 2. Invest in companies for the purpose of exercising control. 3. Purchase securities on margin or effect short sales, except that each Fund may (i) obtain short-term credits as necessary for the clearance of security transactions, (ii) provide initial and variation margin S-29 payments in connection with transactions involving futures contracts and options on such contracts, and (iii) make short sales "against the box" or in compliance with the SEC's position regarding the asset segregation requirements of Section 18 of the 1940 Act. 4. Purchase or hold illiquid securities, I.E., securities that cannot be disposed of for their approximate carrying value in seven days or less (which term includes repurchase agreements and time deposits maturing in more than seven days) if, in the aggregate, more than 15% of its net assets would be invested in illiquid securities. 5. Invest its assets in securities of any investment company, except as permitted by the 1940 Act. 6. With respect to the International Equity Fund, invest less than 80% of its net assets, under normal circumstances, in equity securities. This non-fundamental policy may be changed by the Board of Trustees with at least 60 days' notice to the International Equity Fund's shareholders. 7. With respect to the Emerging Markets Equity Fund, invest less than 80% of its net assets, under normal circumstances, in equity securities of emerging market issuers. This non-fundamental policy may be changed by the Board of Trustees with at least 60 days' notice to the Emerging Markets Equity Fund's shareholders. 8. With respect to the Emerging Markets Debt Fund, invest less than 80% of its net assets, under normal circumstances, in fixed income securities of emerging markets issuers. This non-fundamental policy may be changed by the Board of Trustees with at least 60 days' notice to the Emerging Markets Debt Fund's shareholders. 9. With respect to the Tax-Managed International Equity Fund, invest less than 80% of its net assets, under normal circumstances, in equity securities. This non-fundamental policy may be changed by the Board of Trustees with at least 60 days' notice to the Tax-Managed International Equity Fund's shareholders. The International Fixed Income Fund may not: 1. Invest less than 80% of its net assets, under normal circumstances, in fixed income securities. This non-fundamental policy may be changed by the Board of Trustees with at least 60 days' notice to the International Fixed Income Fund's shareholders. The foregoing percentages will apply at the time of the purchase of a security and shall not be violated unless an excess or deficiency occurs, immediately after or as a result of a purchase of such security. THE ADMINISTRATOR AND TRANSFER AGENT GENERAL. SEI Investments Fund Management (the "Administrator"), a Delaware business trust, has its principal business offices at Oaks, Pennsylvania 19456. SEI Investments Management Corporation ("SIMC"), a wholly-owned subsidiary of SEI Investments Company ("SEI Investments"), is the owner of all beneficial interest in the Administrator. SEI Investments and its subsidiaries and affiliates, including the Administrator, are leading providers of fund evaluation services, trust accounting systems, and brokerage and information services to financial institutions, institutional investors, and money managers. The Administrator and its affiliates also serve as administrator or sub-administrator to other mutual funds. ADMINISTRATION AGREEMENT WITH THE TRUST. The Trust and the Administrator have entered into an administration and transfer agency agreement (the "Administration Agreement"). Under the Administration Agreement, the Administrator provides the Trust with administrative and transfer agency services or employs certain other parties, including its affiliates, who provide such services, including regulatory reporting and all necessary office space, equipment, personnel and facilities. The Administration Agreement provides that the Administrator shall not be liable for any error of judgment or mistake of law or for any loss suffered by the Trust in connection with the matters to which the Administration Agreement relates, except a loss resulting from willful misfeasance, bad faith or gross negligence on the part of the Administrator in the performance of its duties or from reckless disregard of its duties and obligations thereunder. S-30 The Administration Agreement shall remain effective for the initial term of the Agreement and each renewal term thereof unless earlier terminated: (a) by a vote of a majority of the Trustees of the Trust on not less than 60 days' written notice to the Administrator; or (b) by the Administrator on not less than 90 days' written notice to the Trust. If operating expenses of any Fund exceed applicable limitations, the Administrator will pay such excess. The Administrator will not be required to bear expenses of any Fund to an extent which would result in the Fund's inability to qualify as a regulated investment company under provisions of the Code. The term "expenses" is defined in such laws or regulations, and generally excludes brokerage commissions, distribution expenses, taxes, interest and extraordinary expenses. For each Fund, the following table shows: (i) the dollar amount of fees paid to the Administrator by the Funds; and (ii) the dollar amount of the Administrator's voluntary fee waiver for the fiscal years ended September 30, 2001, 2002, and 2003:
ADMINISTRATION FEES ADMINISTRATION FEES PAID (000) WAIVED (000) ------------------------------- ----------------------- FUND 2001 2002 2003 2001 2002 2003 - ---- --------- --------- -------- ------ ------ ------ International Equity Fund $ 12,594 $ 11,154 $ 9,487 $ 0 $ 0 $ 0 Emerging Markets Equity Fund $ 8,219 $ 6,546 $ 5,206 $ 0 $ 0 $ 0 International Fixed Income Fund $ 7,026 $ 5,771 $ 4,965 $ 0 $ 0 $ 0 Emerging Markets Debt Fund $ 3,240 $ 2,981 $ 3,345 $ 0 $ 0 $ 0 Tax-Managed International Equity Fund * * * * * *
- ---------- * Not in operation during such period. THE ADVISER AND SUB-ADVISERS GENERAL. SEI Investments Management Corporation ("SIMC") serves as the investment adviser for the Funds. SIMC is a wholly-owned subsidiary of SEI Investments, a financial services company. The principal business address of SIMC and SEI Investments is Oaks, Pennsylvania 19456. SEI Investments was founded in 1968 and is a leading provider of investment solutions to banks, institutional investors, investment advisers and insurance companies. SIMC and its affiliates currently serve as adviser or administrator to more than 8 investment companies, including more than 60 funds, with more than $56 billion in assets under management as of November 30, 2003. MANAGER OF MANAGERS STRUCTURE. SIMC operates as a "manager of managers." SIMC and the Trust have obtained an exemptive order from the SEC that permits SIMC, with the approval of the Trust's Board of Trustees, to retain sub-advisers unaffiliated with SIMC for the Funds without submitting the sub-advisory agreements to a vote of the Funds' shareholders. Among other things, the exemptive relief permits the disclosure of only the aggregate amount payable by SIMC under all such sub-advisory agreements for each Fund. The Funds will notify shareholders in the event of any addition or change in the identity of its sub-advisers. Subject to Board review, SIMC allocates and, when appropriate, reallocates the Funds' assets among sub-advisers, monitors and evaluates sub-adviser performance, and oversees sub-adviser compliance with the Funds' investment objectives, policies and restrictions. SIMC HAS THE ULTIMATE RESPONSIBILITY FOR THE INVESTMENT PERFORMANCE OF THE FUNDS DUE TO ITS RESPONSIBILITY TO OVERSEE SUB-ADVISERS AND RECOMMEND THEIR HIRING, TERMINATION AND REPLACEMENT. ADVISORY AND SUB-ADVISORY AGREEMENTS. The Trust and SIMC have entered into an investment advisory agreement (the "Advisory Agreement"). Pursuant to the Advisory Agreement, SIMC oversees the investment advisory services provided to the Funds and may manage the cash portion of the Funds' assets. Pursuant to separate sub-advisory agreements (the "Sub-Advisory Agreements" and together with the Advisory Agreement, the "Investment Advisory Agreements") with SIMC, and under the supervision of SIMC and the Board of Trustees, the sub-advisers are responsible for the day-to-day investment management S-31 of all or a discrete portion of the assets of the Funds. Sub-advisers also are responsible for managing their employees who provide services to these Funds. The sub-advisers are selected based primarily upon the research and recommendations of SIMC, which evaluates quantitatively and qualitatively each sub-adviser's skills and investment results in managing assets for specific asset classes, investment styles and strategies. The Advisory Agreement and certain of the Sub-Advisory Agreements provide that SIMC (or any sub-adviser) shall not be protected against any liability to the Trust or its shareholders by reason of willful misfeasance, bad faith or gross negligence on its part in the performance of its duties or from reckless disregard of its obligations or duties thereunder. In addition, certain of the Sub-Advisory Agreements provide that the sub-adviser shall not be protected against any liability to the Trust or its shareholders by reason of willful misfeasance, bad faith or negligence on its part in the performance of its duties, or from reckless disregard of its obligations or duties thereunder. The continuance of each Investment Advisory Agreement must be specifically approved at least annually: (i) by the vote of a majority of the outstanding shares of that Fund or by the Trustees; and (ii) by the vote of a majority of the Trustees who are not parties to such Agreement or "interested persons" of any party thereto, cast in person at a meeting called for the purpose of voting on such approval. Each Investment Advisory Agreement will terminate automatically in the event of its assignment, and is terminable at any time without penalty by the Trustees of the Trust or, with respect to a Fund, by a majority of the outstanding shares of that Fund, on not less than 30 days' nor more than 60 days' written notice to SIMC or a sub-adviser, as applicable, or by SIMC or a sub-adviser, as applicable, on 90 days' written notice to the Trust. ADVISORY FEES. For these advisory services, SIMC receives a fee, which is calculated daily and paid monthly, at an annual rate of 0.51% of the International Equity Fund's average daily net assets, 0.51% of the Tax-Managed International Equity Fund's average daily net assets, 1.05% of the Emerging Markets Equity Fund's average daily net assets, 0.85% of the Emerging Markets Debt Fund's average daily net assets and 0.15% of the International Fixed Income Fund's average daily net assets. SIMC pays the sub-advisers out of its investment advisory fees. For each Fund, the following table shows: (i) the dollar amount of fees paid to SIMC by each Fund; and (ii) the dollar amount of SIMC's voluntary fee waivers for the fiscal years ended September 30, 2001, 2002, and 2003:
FEES PAID (000) FEE WAIVERS (000) ----------------------------- --------------------------- FUND 2001 2002 2003 2001 2002 2003 - ---- --------- --------- ------- -------- -------- ------- International Equity Fund $ 13,764 $ 12,188 $ 9,906 $ 369 $ 329 $ 741 Emerging Markets Equity Fund $ 11,007 $ 8,671 $ 6,879 $ 2,270 $ 1,904 $ 1,531 International Fixed Income Fund $ 1,756 $ 1,443 $ 1,241 $ 0 $ 0 $ 0 Emerging Markets Debt Fund $ 2,927 $ 2,419 $ 2,769 $ 1,310 $ 1,479 $ 1,605 Tax-Managed International Equity Fund * * * * * *
- ---------- * Not in operation during such period. THE SUB-ADVISERS ALLIANCE CAPITAL MANAGEMENT L.P. Alliance Capital Management L.P. ("Alliance Capital") serves as a sub-adviser to a portion of the assets of the Emerging Markets Equity and International Equity Funds. Alliance Capital is a Delaware limited partnership of which Alliance Capital Management Corporation ("ACMC"), an indirect wholly-owned subsidiary of AXA Financial, Inc. ("AXA Financial") is a general partner. As of September 30, 2003, Alliance Capital Management Holding L.P. ("Alliance Holding") owned approximately 30.9% of the outstanding units of limited partnership interest in Alliance Capital ("Alliance Units"). Equity interests of Alliance Holding are traded on the NYSE in the form of units ("Alliance Holding Units"). As of September 30, 2003, AXA Financial was the beneficial owner of approximately 1.9% of the outstanding Alliance Holding Units and approximately 55.1% of the outstanding Alliance Capital Units, which, including the general partnership interests in Alliance S-32 Capital and Alliance Holding, represents an economic interest of approximately 55.6% in Alliance Capital. AXA Financial is a wholly-owned subsidiary of AXA. ASHMORE INVESTMENT MANAGEMENT LIMITED Ashmore Investment Management Limited ("Ashmore") serves as a sub-adviser to a portion of the assets of the Emerging Markets Debt Fund. Ashmore is an indirectly wholly-owned subsidiary of Ashmore Group Limited. THE BOSTON COMPANY ASSET MANAGEMENT LLC The Boston Company Asset Management LLC ("The Boston Company") serves as a sub-adviser to a portion of the assets of the Emerging Markets Equity Fund. The Boston Company is a wholly-owned indirect subsidiary of Mellon Financial Corporation. CAPITAL GUARDIAN TRUST COMPANY Capital Guardian Trust Company ("Capital Guardian") serves as a sub-adviser to a portion of the assets of the International Equity Fund. Capital Guardian is a wholly-owned subsidiary of Capital Group International, Inc. which in turn is a wholly-owned subsidiary of the Capital Group Companies, Inc. Capital Guardian was founded in 1968 and is a registered investment adviser. CITIGROUP ASSET MANAGEMENT LIMITED Citigroup Asset Management Limited ("Citigroup") serves as a sub-adviser to a portion of the assets of the Emerging Markets Equity Fund. Citigroup was founded in 1998 and is a wholly-owned indirect subsidiary of Citigroup Inc. Citigroup Inc. is a publicly traded company on the New York Stock Exchange and is approximately 10% employee owned. EMERGING MARKETS MANAGEMENT, L.L.C. Emerging Markets Management, L.L.C. ("EMM") serves as a sub-adviser to a portion of the assets of the Emerging Markets Equity Fund. EMM is owned by Emerging Markets Investors Corporation, which in-turn is majority owned by Antoine van Agtmael and Michael Duffy. FISCHER FRANCIS TREES & WATTS, INC. AND ITS AFFILIATES Fischer Francis Trees & Watts, Inc. ("Fischer Francis"), a New York corporation and three of its affiliates, Fischer Francis Trees & Watts, a corporate partnership organized under the laws of the United Kingdom, Fischer Francis Trees & Watts (Singapore) Pte Ltd, a Singapore corporation, and Fischer Francis Trees & Watts Kabushiki Kaisha, a Japanese corporation (collectively referred to as "FFTW") serve as sub-adviser to the International Fixed Income Fund. Fischer Francis is wholly-owned by Charter Atlantic Corporation, which in turn is owned by 20 individual shareholders and one institutional shareholder, BNP Paribas. Fischer Francis owns approximately 99% of Fischer Francis Trees & Watts. Fischer Francis Trees & Watts (Singapore) Pte Ltd and Fischer Francis Trees & Watts Kabushiki Kaisha are each wholly-owned by Fischer Francis. FISHER INVESTMENTS, INC. Fisher Investments, Inc. ("Fisher") serves as a sub-adviser to a portion of the assets of the International Equity Fund. Fisher is the successor firm to a sole-proprietorship operating under the name Fisher Investments, which began managing discretionary assets in 1978. Fisher is wholly-owned by its employees. Kenneth L. Fisher and Sherrilyn Fisher each have more than 25% but less than 50% ownership of the firm. S-33 McKINLEY CAPITAL MANAGEMENT, INC. McKinley Capital Management, Inc. ("McKinley Capital") serves as a sub-adviser to a portion of the assets of the International Equity Fund. McKinley Capital was founded in 1990 and is wholly-owned by its employees. MORGAN STANLEY INVESTMENT MANAGEMENT INC. AND MORGAN STANLEY INVESTMENT MANAGEMENT LIMITED Morgan Stanley Investment Management Inc. ("MSIM Inc.") serves as a sub-adviser to a portion of the assets of the International Equity Fund. MSIM Inc. is a wholly-owned subsidiary of Morgan Stanley. MSIM Inc. delegates certain investment advisory responsibilities to its affiliate, Morgan Stanley Investment Management Limited ("MSIM Limited"). MSIM Limited is an indirect wholly-owned subsidiary of Morgan Stanley. SALOMON BROTHERS ASSET MANAGEMENT INC Salomon Brothers Asset Management Inc ("SBAM") serves as a sub-adviser to a portion of the assets of the Emerging Markets Debt Fund. SBAM is a wholly-owned subsidiary of Salomon Brothers Holding Company Inc, a wholly-owned subsidiary of Salomon Smith Barney Holdings Inc., which is wholly-owned by Citigroup Inc. SUB-ADVISORY FEES. For each Fund, the following table shows: (i) the dollar amount of fees paid to the sub-advisers by SIMC; and (ii) the dollar amount of the sub-advisers' voluntary fee waivers for the fiscal years ended September 30, 2001, 2002, and 2003:
SUB-ADVISORY FEES SUB-ADVISORY FEES PAID (000) WAIVED (000) ----------------------------- --------------------------- FUND 2001 2002 2003 2001 2002 2003 - ---- --------- --------- ------- -------- -------- ------- International Equity Fund $ 7,932 $ 7,845 $ 6,488 $ 0 $ 0 $ 0 Emerging Markets Equity Fund $ 7,669 $ 5,585 $ 3,500 $ 0 $ 0 $ 0 International Fixed Income Fund $ 0 $ 60 $ 910 $ 0 $ 0 $ 0 Emerging Markets Debt Fund $ 1,850 $ 1,728 $ 2,001 $ 0 $ 0 $ 0 Tax-Managed International Equity Fund * * * * * *
- ---------- * Not in operation during such period. DISTRIBUTION, SHAREHOLDER SERVICING AND ADMINISTRATIVE SERVICING DISTRIBUTION AGREEMENT. SEI Investments Distribution Co. (the "Distributor") serves as each Fund's distributor. The Distributor is a wholly-owned subsidiary of SEI Investments. The Distributor has its principal business address at Oaks, Pennsylvania 19456. The Distributor serves as each Fund's distributor pursuant to a distribution agreement (the "Distribution Agreement") with the Trust. The Distribution Agreement shall be reviewed and ratified at least annually: (i) by the Trust's Trustees or by the vote of a majority of the outstanding shares of the Trust; and (ii) by the vote of a majority of the Trustees of the Trust who are not parties to the Distribution Agreement or interested persons (as defined in the 1940 Act) of any party to the Distribution Agreement, cast in person at a meeting called for the purpose of voting on such approval. The Distribution Agreement will terminate in the event of any assignment, as defined in the 1940 Act, and is terminable with respect to a particular Fund on not less than 60 days' notice by the Trust's Trustees, by vote of a majority of the outstanding shares of such Fund or by the Distributor. The Distributor will receive no compensation for the distribution of Fund shares. SHAREHOLDER AND ADMINISTRATIVE SERVICING PLANS. The Trust has also adopted shareholder servicing plans for its Class A and Class I shares (each a "Shareholder Servicing Plan" and collectively the "Shareholder Servicing Plans"). Under the Shareholder Servicing Plan for Class A shares, the Distributor may perform, or may compensate other service providers for performing, the following shareholder services: [maintaining S-34 client accounts; arranging for bank wires; responding to client inquiries concerning services provided on investments; assisting clients in changing dividend options, account designations and addresses; sub-accounting; providing information on share positions to clients; forwarding shareholder communications to clients; processing purchase, exchange and redemption orders; and processing dividend payments.] Under the Shareholder Servicing Plan for Class I shares, the Distributor may perform, or may compensate other service providers for performing, the following shareholder services: maintaining client accounts; arranging for bank wires; responding to client inquiries concerning services provided on investments; and assisting clients in changing dividend options, account designations and addresses. The Trust has adopted an administrative servicing plan ("Administrative Servicing Plan") for its Class I shares. Under the Administrative Servicing Plan, the Distributor may perform, or may compensate other service providers for performing, the following administrative services: providing subaccounting with respect to shares beneficially owned by clients; providing information periodically to clients showing their positions in shares; forwarding shareholder communications from a Fund (such as proxies, shareholder reports, annual and semi-annual financial statements and dividend, distribution and tax notices) to clients; processing purchase, exchange and redemption requests from clients and placing such orders with a Fund or its service providers; processing dividend payments from a Fund on behalf of its clients; and providing such other similar services as a Fund may, through the Distributor, reasonably request to the extent that the service provider is permitted to do so under applicable laws or regulations. TRUSTEES AND OFFICERS OF THE TRUST BOARD RESPONSIBILITIES. The management and affairs of the Trust and each of the Funds are supervised by the Trustees under the laws of the Commonwealth of Massachusetts. Each Trustee is responsible for overseeing each of the Funds and each fund of SEI Index Funds, SEI Daily Income Trust, SEI Institutional Investments Trust, SEI Asset Allocation Trust, SEI Institutional Managed Trust, SEI Liquid Asset Trust and SEI Tax Exempt Trust (the "Fund Complex"), which currently consists of 69 funds and includes funds not described in this Statement of Additional Information. The Trustees have approved contracts, as described above, under which certain companies provide essential management services to the Trust. MEMBERS OF THE BOARD. Set forth below are the names, dates of birth, position with the Trust, length of term of office, and the principal occupations for the last five years of each of the persons currently serving as Trustees of the Trust. Unless otherwise noted, the business address of each Trustee is SEI Investments Company, Oaks, Pennsylvania 19456. INTERESTED TRUSTEES. ROBERT A. NESHER (DOB 08/17/46)--Chairman of the Board of Trustees* (since 1988)--Currently performs various services on behalf of SEI Investments for which Mr. Nesher is compensated. Executive Vice President of SEI Investments, 1986-1994. Director and Executive Vice President of SIMC, the Administrator and the Distributor, 1981-1994. Trustee of The Advisors' Inner Circle Fund, The Arbor Fund, Bishop Street Funds, Expedition Funds, The MDL Funds, SEI Global Master Fund, plc, SEI Global Assets Fund, plc, SEI Global Investments Fund, plc, SEI Investments Global, Limited, SEI Absolute Return Master Fund, LP, SEI Opportunity Master Fund, LP, SEI Asset Allocation Trust, SEI Index Funds, SEI Daily Income Trust, SEI Institutional Investments Trust, SEI Institutional Managed Trust, SEI Liquid Asset Trust and SEI Tax Exempt Trust. WILLIAM M. DORAN (DOB 05/26/40)--Trustee* (since 1988)--1701 Market Street, Philadelphia, PA 19103. Self-employed consultant. Partner, Morgan, Lewis & Bockius LLP (law firm) from 1976 to 2003, counsel to the Trust, SEI Investments, SIMC, the Administrator and the Distributor. Director of SEI Investments since 1974; Secretary of SEI Investments since 1978. Director of the Distributor since 2003. Trustee of The Advisors' Inner Circle Fund, The Arbor Fund, Expedition Funds, The MDL Funds, SEI Asset Allocation Trust, SEI Index Funds, SEI Daily Income Trust, SEI Institutional Investments Trust, SEI Institutional Managed Trust, SEI Liquid Asset Trust and SEI Tax Exempt Trust. - ---------- * Messrs. Nesher and Doran are Trustees who may be deemed to be "interested" persons of the Funds as that term is defined in the 1940 Act by virtue of their relationship with the Trust's Distributor and SIMC. S-35 INDEPENDENT TRUSTEES. F. WENDELL GOOCH (DOB 12/03/32)--Trustee (since 1988)--Retired. Trustee of SEI Asset Allocation Trust, SEI Index Funds, SEI Daily Income Trust, SEI Institutional Investments Trust, SEI Institutional Managed Trust, SEI Liquid Asset Trust, SEI Tax Exempt Trust, STI Classic Funds and STI Classic Variable Trust. JAMES M. STOREY (DOB 04/12/31)--Trustee (since 1995)--Attorney, Solo Practitioner since 1994. Partner, Dechert Price & Rhoads (law firm), September 1987-December 1993. Trustee of The Advisors' Inner Circle Fund, The Arbor Fund, Expedition Funds, State Street Capital Trust (consisting of 24 portfolios), Massachusetts Health and Education Tax-Exempt Trust, SEI Asset Allocation Trust, SEI Index Funds, SEI Daily Income Trust, SEI Institutional Investments Trust, SEI Institutional Managed Trust, SEI Liquid Asset Trust and SEI Tax Exempt Trust. GEORGE J. SULLIVAN, JR. (DOB 11/13/42)--Trustee (since 1996)--Self Employed Consultant, Newfound Consultants Inc. since April 1997. Trustee of State Street Navigator Securities Lending Trust, The Advisors' Inner Circle Fund, The Arbor Fund, Expedition Funds, The MDL Funds, SEI Absolute Return Master Fund, LP, SEI Opportunity Master Fund, LP, SEI Asset Allocation Trust, SEI Index Funds, SEI Daily Income Trust, SEI Institutional Investments Trust, SEI Institutional Managed Trust, SEI Liquid Asset Trust and SEI Tax Exempt Trust. ROSEMARIE B. GRECO (DOB 03/31/46)--Trustee (since 1999)--Director, Governor's Office of Health Care Reform, Commonwealth of Pennsylvania since 2003; Founder and Principal, Grecoventures Ltd. from 1999 to 2002. Interim President & Chief Executive Officer, Private Industry Council of Philadelphia, April 1998-August 1998; President, Corestates Financial Corp., 1996-1997; Chief Executive Officer and President, Corestates Bank, N.A., 1994-1997; Director, Sunoco, Inc.; Director, Exelon Corporation; Trustee of Pennsylvania Real Estate Investment Trust, SEI Asset Allocation Trust, SEI Index Funds, SEI Daily Income Trust, SEI Institutional Investments Trust, SEI Institutional Managed Trust, SEI Liquid Asset Trust and SEI Tax Exempt Trust. NINA LESAVOY (DOB 07/24/57)--Trustee (since 2003)--Partner, Cue Capital since 2002; Head of Sales, Investorforce, January 2000-December 2001; Global Partner working for the CEO, Invesco Capital, January 1998-January 2000. Head of Sales and Client Services, Chancellor Capital and later LGT Asset Management, 1986-2000. Trustee of SEI Absolute Return Master Fund, LP, SEI Opportunity Master Fund, LP, SEI Asset Allocation Trust, SEI Daily Income Trust, SEI Index Funds, SEI Tax Exempt Trust, SEI Institutional Managed Trust, SEI Liquid Asset Trust and SEI Institutional Investments Trust. BOARD STANDING COMMITTEES. The Board has established the following standing committees: - AUDIT COMMITTEE. The Board has a standing Audit Committee that is composed of each of the independent Trustees of the Trust. The Audit Committee operates under a written charter approved by the Board. The principal responsibilities of the Audit Committee include: recommending which firm to engage as the Trust's independent auditor and whether to terminate this relationship; reviewing the independent auditor's compensation, the proposed scope and terms of its engagement, and the firm's independence; pre-approving audit and non-audit services provided by the Trust's independent auditor to the Trust and certain other affiliated entities; serving as a channel of communication between the independent auditor and the Trustees; reviewing the results of each external audit, including any qualifications in the independent auditor's opinion, any related management letter, management's responses to recommendations made by the independent auditor in connection with the audit, reports submitted to the Committee by the internal auditing department of the Trust's Administrator that are material to the Trust as a whole, if any, and management's responses to any such reports; reviewing the Trust's audited financial statements and considering any significant disputes between the Trust's management and the independent auditor that arose in connection with the preparation of those financial statements; considering, in consultation with the independent auditor and the Trust's senior internal accounting executive, if any, the independent auditor's report on the adequacy of the Trust's internal financial controls; reviewing, in consultation with the Trust's independent auditor, major changes regarding auditing and accounting principles and practices to be followed when preparing the Trust's S-36 financial statements; and other audit related matters. Messrs. Gooch, Storey and Sullivan, Ms. Greco and Ms. Lesavoy currently serve as members of the Audit Committee. The Audit Committee meets periodically, as necessary, and met four times during the Trust's most recently completed fiscal year. - FAIR VALUE PRICING COMMITTEE. The Board has a standing Fair Value Pricing Committee that is composed of at least one Trustee and various representatives of the Trust's service providers, as appointed by the Board. The Fair Value Pricing Committee operates under procedures approved by the Board. The principal responsibilities of the Fair Value Pricing Committee are to determine the fair value of securities for which current market quotations are not readily available or deemed not eligible. The Fair Value Pricing Committee's determinations are reviewed by the Board. Messrs. Nesher and Sullivan currently serves as the Board's delegates on the Fair Value Pricing Committee. The Fair Value Pricing Committee meets as necessary, and met 11 times during the Trust's most recently completed fiscal year. - NOMINATING COMMITTEE. The Board has a standing Nominating Committee that is composed of each of the independent Trustees of the Trust. The principal responsibility of the Nominating Committee is to consider, recommend and nominate candidates to fill vacancies on the Trust's Board, if any. The Nominating Committee does not have specific procedures in place to consider nominees recommended by shareholders, but would consider such nominees if submitted in accordance with Rule 14a-8 of the Securities Exchange Act of 1934 (the "1934 Act") in conjunction with a shareholder meeting to consider the election of Trustees. Messrs. Gooch, Storey and Sullivan, Ms. Greco and Ms. Lesavoy currently serve as members of the Nominating Committee. The Nominating Committee meets periodically, as necessary, and met once during the Trust's most recently completed fiscal year. BOARD OF TRUSTEES CONSIDERATIONS IN APPROVING THE CONTINUATION OF ADVISORY AND SUB-ADVISORY AGREEMENTS. As discussed in the section of this Statement of Additional Information entitled "The Adviser and the Sub-Advisers," the Board's continuance of each Investment Advisory Agreement must be specifically approved at least annually: (i) by the vote of the Trustees or by a vote of the shareholders of the Funds; and (ii) by the vote of a majority of the Trustees who are not parties to each Investment Advisory Agreement or "interested persons" of any party thereto, cast in person at a meeting called for the purpose of voting on such approval. Each year, the Board of Trustees calls and holds a meeting to decide whether to renew each Investment Advisory Agreement for the upcoming year. In preparation for the meeting, the Board requests and reviews a wide variety of information from the advisers. The Trustees use this information, as well as other information that the advisers and other Fund service providers may submit to the Board, as well as other information they obtain independently, to help them decide whether to renew each Investment Advisory Agreement for another year. In addition, at various times during the year, the Trustees review and discuss issues, related to the Investment Advisory Agreements. Before meeting for the renewal of the Investment Advisory Agreements, the Board requested and received written materials from each adviser about: (a) the quality of the adviser's investment management and other services; (b) the adviser's investment management personnel; (c) the adviser's operations and financial condition; (d) the adviser's brokerage practices (including any soft dollar arrangements) and investment strategies; (e) the level of the advisory fees that the adviser charges a Fund compared with the fees each charges to comparable mutual funds or accounts (if any); (f) a Fund's overall fees and operating expenses compared with similar mutual funds; (g) the level of the adviser's profitability from its Fund-related operations; (h) the adviser's compliance systems; (i) the adviser's policies on and compliance procedures for personal securities transactions; (j) the adviser's reputation, expertise and resources in domestic financial markets; and (k) each Fund's performance compared with similar mutual funds. At the meeting, representatives from the advisers presented additional oral and written information to the Board to help the Board evaluate the advisers' fee and other aspects of the Agreements. Other Fund service providers also provided the Board with additional information at the meeting. The Trustees discussed the written materials that the Board received before the meeting and the advisers' oral presentation and any S-37 other information that the Board received at the meeting, and deliberated on the renewal of each Investment Advisory Agreement in light of this information. In its deliberations, the Board did not identify any single piece of information that was all-important, controlling or determinative of its decision. Based on the Board's deliberation and its evaluation of the information described above, the Board, including all of the independent Trustees, unanimously agreed to approve the continuation of each Investment Advisory Agreement for another year (with Mr. Doran abstaining from voting on the continuation of the Advisory Agreement between the Trust and SIMC) in consideration that: (i) the terms of the each Investment Advisory Agreement are fair and reasonable; and (ii) the advisers' fees are reasonable in light of the services that the advisers provide to the Funds. FUND SHARES OWNED BY BOARD MEMBERS. The following table shows the dollar amount range of each Trustee's "beneficial ownership" of shares of each of the Funds as of the end of the most recently completed calendar year. Dollar amount ranges disclosed are established by the SEC. "Beneficial ownership" is determined in accordance with Rule 16a-1(a)(2) under the 1934 Act. The Trustees and officers of the Trust own less than 1% of the outstanding shares of the Trust.
DOLLAR RANGE OF AGGREGATE DOLLAR RANGE OF NAME FUND SHARES (FUND)* SHARES (FUND COMPLEX)* - ---- --------------------------- ------------------------- Mr. Nesher None Over $100,000 Mr. Doran None Over $100,000 Mr. Gooch $10,001-$50,000 Over $100,000 (International Equity Fund) Mr. Storey None None Mr. Sullivan None None Ms. Greco None None Ms. Lesavoy None None
- ---------- * Valuation date is December 31, 2003. BOARD COMPENSATION. The Trust paid the following fees to the Trustees during its most recently completed fiscal year.
PENSION OR RETIREMENT ESTIMATED TOTAL COMPENSATION BENEFITS ACCRUED ANNUAL FROM THE TRUST AGGREGATE AS PART OF BENEFITS UPON AND FUND NAME COMPENSATION FUND EXPENSES RETIREMENT COMPLEX * - ---- -------------- ---------------- ------------- ------------------ Mr. Nesher $ 0 N/A N/A $ 0 Mr. Doran $ 0 N/A N/A $ 0 Mr. Gooch $ 12,578 N/A N/A $ 133,000 Mr. Storey $ 12,578 N/A N/A $ 133,000 Mr. Sullivan $ 12,578 N/A N/A $ 133,000 Ms. Greco $ 12,578 N/A N/A $ 133,000 Ms. Lesavoy $ 3,668 * * $ 33,250
- ---------- * Ms. Lesavoy was appointed a Trustee as of September 17, 2003. TRUST OFFICERS. Set forth below are the names, dates of birth, position with the Trust, length of term of office, and the principal occupations for the last five years of each of the persons currently serving as Executive Officers of the Trust. Unless otherwise noted, the business address of each Officer is SEI Investments Company, Oaks, Pennsylvania 19456. None of the Officers receive compensation from the Trust for their services. Certain officers of the Trust also serve as officers to one or more mutual funds to which SEI Investments or its affiliates act as investment adviser, administrator or distributor. S-38 EDWARD D. LOUGHLIN (DOB 03/07/51)--President and Chief Executive Officer (since 1988)--Executive Vice President and President--Asset Management Division of SEI Investments since 1993. Executive Vice President and Chief Investment Officer of SIMC, Chief Executive Officer of the Administrator and Executive Vice President of the Distributor since 2003. Executive Vice President of SIMC and the Administrator, 1994-2003. Senior Vice President of the Distributor, 1986-1991; Vice President of the Distributor, 1981-1986. TIMOTHY D. BARTO (DOB 03/28/68)--Vice President and Secretary (since 2002)--Vice President and Assistant Secretary of the Trust, 1999-2002. Employed by SEI Investments since October 1999. General Counsel and Vice President of SIMC and the Administrator, and Assistant Secretary of the Distributor since 2003. Vice President and Assistant Secretary of SIMC, the Administrator and the Distributor, 1999-2003. Associate, Dechert Price & Rhoads (law firm), 1997-1999. LYDIA A. GAVALIS (DOB 06/05/64)--Vice President and Assistant Secretary (since 1998)--Assistant Secretary of SEI Investments, SIMC, the Administrator and the Distributor since 2003. Vice President and Assistant Secretary of SEI Investments, SIMC, the Administrator and the Distributor, 1998-2003. CHRISTINE M. McCULLOUGH (DOB 12/02/60)--Vice President and Assistant Secretary (since 1999)--Employed by SEI Investments since 1999. Vice President and Assistant Secretary of SIMC, the Administrator and the Distributor, 1999-2003. Associate, White and Williams LLP (law firm), 1991-1999. SHERRY KAJDAN VETTERLEIN (DOB 06/22/62)--Vice President and Assistant Secretary (since 2002)--Vice President and Secretary of the Trust, 2001-2002. Assistant Secretary of the Administrator since 2003. Vice President and Assistant Secretary of SIMC, the Administrator and the Distributor, 2001-2003. Shareholder/Partner, Buchanan Ingersoll Professional Corporation, 1992-2000. WILLIAM E. ZITELLI, JR. (DOB 06/14/68)--Vice President and Assistant Secretary (since 2001)--Assistant Secretary of SIMC, the Administrator and Distributor since 2003. Vice President and Assistant Secretary of SIMC, the Administrator and the Distributor, 2000-2003. Vice President, Merrill Lynch & Co. Asset Management Group, 1998-2000. JOHN C. MUNCH (DOB 05/07/71)--Vice President and Assistant Secretary (since 2002)--Assistant Secretary of SIMC and the Administrator, and General Counsel and Vice President of the Distributor since 2003. Vice President and Assistant Secretary of SIMC, the Administrator and the Distributor, 2001-2003. Associate, Howard, Rice, Nemorvoski, Canady, Falk & Rabkin (law firm), 1998-2001. JOHN MUNERA (DOB 01/14/63)--Vice President and Assistant Secretary (since 2002)--Middle Office Compliance Officer at SEI Investments since 2000. Supervising Examiner at Federal Reserve Bank of Philadelphia, 1988-2000. CORI DAGGETT (DOB 10/03/61)--Vice President and Assistant Secretary (since 2003)--Employed by SEI Investments since 2003. Associate at Drinker Biddle & Reath, LLP (law firm), 1998-2003. PETER (PEDRO) A. RODRIGUEZ (DOB 01/18/62)--Controller and Chief Financial Officer (since 2003)--Director, Fund Accounting and Administration, SEI Investments Global Funds Services, March 1997 to April 2002 and September 2002 to Present. Vice President, Fund Administration, BlackRock Financial Management, April 2002 to September 2002. PROXY VOTING POLICIES AND PROCEDURES The Funds have delegated proxy voting responsibilities to SIMC, subject to the Board's general oversight. In delegating proxy voting responsibilities, each Fund has directed that proxies be voted consistent with a Fund's best economic interests. SIMC has adopted its own proxy voting policies and guidelines for this purpose (the "Procedures"). As required by applicable regulations, SIMC has provided this summary of its Procedures concerning proxies voted by SIMC on behalf of each investment advisory client who delegates voting responsibility to SIMC, which includes the Funds (each a "Client"). The Procedures may be changed as necessary to remain current with regulatory requirements and internal policies and procedures. S-39 SIMC votes proxies in the best economic interests of Clients. SIMC has elected to retain an independent proxy voting service (the "Service") to vote proxies for Client accounts, which votes proxies in accordance with Proxy Voting Guidelines (the "Guidelines") approved by SIMC's Proxy Voting Committee (the "Committee"). The Guidelines set forth the manner in which SIMC will vote on matters that may come up for shareholder vote. The Service will review each matter on a case-by-case basis, and vote the proxies in accordance with the Guidelines. For example, the Guidelines provide that SIMC will vote in favor of proposals to require shareholder ratification of any poison pill, shareholder proposals that request companies to adopt confidential voting, and for management proposals to do so, and shareholder social, workforce, and environmental proposals that create good corporate citizens while enhancing long-term shareholder value, and will vote against director nominees (or a Board) if it believes that a nominee (or the Board) has not served the economic long-term interests of shareholders. Prior to voting a proxy, the Service makes available to SIMC its recommendation on how to vote in light of the Guidelines. SIMC retains the authority to overrule the Service's recommendation on any specific proxy proposal and to instruct the Service to vote in a manner determined by the Committee. Before doing so, the Committee will determine whether SIMC may have a material conflict of interest regarding the proposal. If the Committee determines that SIMC has such a material conflict, SIMC shall instruct the Service to vote in accordance with the Service's recommendation unless SIMC, after full disclosure to the Client of the nature of the conflict, obtains the Client's consent to voting in the manner determined by the Committee (or otherwise obtains instructions from the client as to how to vote on the proposal). For each proxy, SIMC maintains all related records as required by applicable law. A Client may obtain a copy of SIMC's Procedures and Guidelines, or a copy of the specific voting record for their account, by calling SIMC at 1-800-DIAL-SEI, or writing to SIMC at One Freedom Valley Drive, Oaks, Pennsylvania 19456. PURCHASE AND REDEMPTION OF SHARES The purchase and redemption price of shares is the net asset value of each share. Information about the market value of each portfolio security may be obtained by the Administrator from an independent pricing services. The pricing services may use a matrix system to determine valuations of equity and fixed income securities. This system considers such factors as security prices, yields, maturities, call features, ratings and developments relating to specific securities in arriving at valuations. The pricing service may also provide market quotations. The procedures used by the pricing services and their valuations methodologies are reviewed by the officers of the Trust under the general supervision of the Trustees. Fund securities listed on a securities exchange for which market quotations are available are valued at the last quoted sale price on each business day on which the New York Stock Exchange ("NYSE") is open for business ("Business Day") or, if there is no such reported sale, at the most recently quoted bid price. Securities listed on NASDAQ are valued using the NASDAQ Official Closing Price. Unlisted securities for which market quotations are readily available are valued at the most recently quoted bid price. If such prices are not available or are deemed to be unreliable, the security will be valued at fair value as determined in good faith by the Fair Value Pricing Committee and are reviewed by the Board of Trustees. Additional information about valuing securities at fair value is provided under the sub-section "Fair Value Pricing Committee." Securities with remaining maturities of 60 days or less may be valued by the amortized cost method, which involves valuing a security at its cost on the date of purchase and thereafter (absent unusual circumstances) assuming a constant amortization to maturity of any discount or premium, regardless of the impact of fluctuations in general market rates of interest on the value of the instrument. While this method provides certainty in valuation, it may result in periods during which value, as determined by this method, is higher or lower than the price the Trust would receive if it sold the instrument. During periods of declining interest rates, the daily yield of a Fund may tend to be higher than a like computation made by a company with identical investments utilizing a method of valuation based upon market prices and estimates of market prices for all of its portfolio securities. Thus, if the use of amortized cost by a Fund resulted in a lower aggregate portfolio value on a particular day, a prospective investor in a Fund would be able to obtain a S-40 somewhat higher yield that would result from investment in a company utilizing solely market values, and existing shareholders in the Fund would experience a lower yield. The converse would apply during a period of rising interest rates. Shares of a Fund may be purchased in exchange for securities included in the Fund subject to SIMC's determination that the securities are acceptable. Securities accepted in an exchange will be valued at the market value. All accrued interest and subscription of other rights which are reflected in the market price of accepted securities at the time of valuation become the property of the Trust and must be delivered by the shareholder to the Trust upon receipt from the issuer. A shareholder may recognize a gain or a loss for federal income tax purposes in making the exchange. SIMC will not accept securities for a Fund unless: (1) such securities are appropriate in the Fund at the time of the exchange; (2) such securities are acquired for investment and not for resale; (3) the shareholder represents and agrees that all securities offered to the Trust for the Fund are not subject to any restrictions upon their sale by the Fund under the 1933 Act, or otherwise; (4) such securities are traded on the American Stock Exchange, the NYSE or on NASDAQ in an unrelated transaction with a quoted sales price on the same day the exchange valuation is made or,if not listed on such exchanges or on NASDAQ, have prices available from an independent pricing service approved by the Trust's Board of Trustees; and (5) the securities may be acquired under the investment restrictions applicable to the Fund. The Trust reserves the right to suspend the right of redemption and/or to postpone the date of payment upon redemption for any period during which trading on the NYSE is restricted, or during the existence of an emergency (as determined by the SEC by rule or regulation) as a result of which disposal or evaluation of the portfolio securities is not reasonably practicable, or for such other periods as the SEC may by order permit. The Trust also reserves the right to suspend sales of shares of the Funds for any period during which the NYSE, the Administrator, the advisers, the Distributor and/or the custodians are not open for business. Currently, the following holidays are observed by the Trust: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. It is currently the Trust's policy to pay for all redemptions in cash. The Trust retains the right, however, to alter this policy to provide for redemptions in whole or in part by a distribution in kind of securities held by a Fund in lieu of cash. Shareholders may incur brokerage charges in connection with the sale of such securities. However, a shareholder will at all times be entitled to aggregate cash redemptions from a Fund of the Trust during any 90-day period of up to the lesser of $250,000 or 1% of the Trust's net assets in cash. A gain or loss for federal income tax purposes would be realized by a shareholder subject to taxation upon an in-kind redemption depending upon the shareholder's basis in the shares of the Fund redeemed. Fund securities may be traded on foreign markets on days other than a Business Day or the net asset value of a Fund may be computed on days when such foreign markets are closed. In addition, foreign markets may close at times other than 4:00 p.m. Eastern time. As a consequence, the net asset value of a share of a Fund may not reflect all events that may affect the value of the Fund's foreign securities unless the adviser determines that such events materially affect net asset value in which case net asset value will be determined by consideration of other factors. Certain shareholders in one or more of the Funds may obtain asset allocation services from SIMC and other financial intermediaries with respect to their investments in such Funds. If a sufficient amount of a Fund's assets are subject to such asset allocation services, the Fund may incur higher transaction costs and a higher portfolio turnover rate than would otherwise be anticipated as a result of redemptions and purchases of Fund shares pursuant to such services. Further, to the extent that SIMC is providing asset allocation services and providing investment advice to the Funds, it may face conflicts of interest in fulfilling its responsibilities because of the possible differences between the interests of its asset allocation clients and the interest of the Funds. S-41 TAXES QUALIFICATION AS A RIC The following discussion of federal income tax consequences is based on the Code and the regulations issued thereunder as in effect on the date of this Statement. New legislation, as well as administrative or court decisions, may significantly change the conclusions expressed herein and may have a retroactive effect with respect to the transactions contemplated herein. In order to qualify for treatment as a regulated investment company ("RIC") under the Code, a Fund must distribute annually to its shareholders at least the sum of 90% of its net interest income excludable from gross income plus 90% of its investment company taxable income (generally, net investment income, including net short-term capital gain) ("Distribution Requirement") and must meet several additional requirements. Among these requirements are the following: (i) at least 90% of a Fund's gross income each taxable year must be derived from dividends, interest, payments with respect to securities loans and gains from the sale or other disposition of stocks or securities or foreign currencies or other income (including gains from forward contracts) derived with respect to its business of investing in stocks, securities and currencies ("Income Requirement"); (ii) at the close of each quarter of a Fund's taxable year, at least 50% of the value of its total assets must be represented by cash and cash items, United States Government securities, securities of other RICs and other securities, with such other securities limited, in respect of any one issuer, to an amount that does not exceed 5% of the value of a Fund's total assets and that does not represent more than 10% of the outstanding voting securities of the issuer; and (iii) at the close of each quarter of a Fund's taxable year, not more than 25% of the value of its total assets may be invested in securities (other than U.S. Government securities or the securities of other RICs) of any one issuer or of two or more issuers engaged in the same, similar, or related trades or businesses if the Fund owns at least 20% of the voting power of such issuers. Notwithstanding the Distribution Requirement described above, which only requires a Fund to distribute at least 90% of its annual investment company taxable income and does not require any minimum distribution of net capital gain, a Fund will be subject to a nondeductible 4% federal excise tax to the extent it fails to distribute by the end of any calendar year at least 98% of its ordinary income for that year and 98% of its capital gain net income for the one-year period ending on October 31, of that year, plus certain other amounts. Each Fund intends to make sufficient distributions to avoid liability for the federal excise tax applicable to RICs. If you buy shares when the Fund has realized but not yet distributed income or capital gains, you will be "buying a dividend" by paying the full price for the shares and gains and receiving back a portion of the price in the form of a taxable distribution. If the Fund's distributions exceed its taxable income and capital gains realized during a taxable year, all or a portion of the distributions made in the same taxable year may be recharacterized as a return of capital to shareholders. A return of capital distribution will generally not be taxable,but will reduce each shareholder's cost basis in the Fund and result in a higher reported capital gain or lower reported capital loss when those shares on which the distribution was received are sold. The use of hedging strategies, such as entering into forward foreign currency contracts, involves complex rules that will determine for income tax purposes the character and timing of recognition of the income received in connection therewith by the Fund. These complex tax rules also could affect whether gains and losses recognized by a Fund are treated as ordinary income or capital gains, accelerate the recognition of income to a Fund and/or defer to a Fund's ability to recognize losses. Income from foreign currencies, and income from transactions in forward contracts that are directly related to a Fund's business of investing in securities or foreign currencies, will qualify as permissible income under the Income Requirement. Any gain or loss recognized on a sale, exchange or redemption of shares of a Fund by a shareholder who is not a dealer in securities will generally, for individual shareholders, be treated as a long-term capital gain or loss if the shares have been held for more than twelve months and otherwise will be treated as short-term capital gain or loss. However, if shares on which a shareholder has received a net capital gain distribution are subsequently sold, exchanged or redeemed and such shares have been held for six months or less, any loss S-42 recognized will be treated as a long-term capital loss to the extent of the net capital gain distribution. All or a portion of any loss that you realize upon the redemption of the Fund's shares will be disallowed to the extent that you buy other shares in the Fund (through reinvestment of dividends or otherwise) within 30 days before or after your share redemption. Any loss disallowed under these rules will be added to your tax basis in the new shares you buy. If a Fund fails to qualify as a RIC for any year, all of its taxable income will be subject to tax at regular corporate rates without any deduction for distributions to shareholders, and its distributions (including capital gains distributions) generally will be taxable as ordinary income dividends to its shareholders, subject to the dividends received deduction for corporate shareholders and lower tax rates on qualified dividend income for individual shareholders. The board reserves the right not to maintain the qualification of the Fund as a regulated investment company if it determines such course of action to be beneficial to shareholders. A Fund will be required in certain cases to withhold at applicable withholding rates and remit to the United States Treasury the amount withheld on amounts payable to any shareholder who (1) has provided the Fund either an incorrect tax identification number or no number at all, (2) who is subject to backup withholding by the Internal Revenue Service for failure to properly report payments of interest or dividends, (3) who has failed to certify to the Fund that such shareholder is not subject to backup withholding, or (4) has not certified that such shareholder is a U.S. person (including a U.S. resident alien). With respect to investments in STRIPS, TR's, TIGR's, LYONs, CATS and other Zero Coupon securities which are sold at original issue discount and thus do not make periodic cash interest payments, a Fund will be required to include as part of its current income the imputed interest on such obligations even though the Fund has not received any interest payments on such obligations during that period. Because each Fund distributes all of its net investment income to its shareholders, a Fund may have to sell Fund securities to distribute such imputed income which may occur at a time when the advisers would not have chosen to sell such securities and which may result in taxable gain or loss. Because the Fund's income is derived primarily from investments in foreign rather than domestic U.S. securities, no portion of its distributions will generally be eligible for the dividends-received deduction. Non-U.S. investors in the Fund may be subject to U.S. withholding and estate tax and are encouraged to consult their tax advisor prior to investing in the Fund. STATE TAXES A Fund is not liable for any income or franchise tax in Massachusetts if it qualifies as a RIC for federal income tax purposes. Rules of state and local taxation of dividend and capital gains distributions from RICs often differ from the rules for federal income taxation described above. Many states grant tax-free status to ordinary income distributions that the Fund pays to you which are derived from interest on direct obligations of the U.S. government. Some states have minimum investment requirements for this tax-free status that must be met by the Fund. Investments in Ginnie Mae or Fannie Mae securities, banker's acceptances, commercial paper, and repurchase requirements collateralized by U.S. government securities do not generally qualify for state tax-free treatment. The rules or exclusion of this income are different for corporate shareholders. Depending upon state and local law, distributions by a Fund to shareholders and the ownership of shares may be subject to state and local taxes. Shareholders are urged to consult their tax advisors regarding the state and local tax consequences of investments in a Fund. FOREIGN TAXES Dividends and interest received by a Fund may be subject to income, withholding or other taxes imposed by foreign countries and United States possessions that would reduce the yield on a Fund's securities. Tax conventions between certain countries and the United States may reduce or eliminate these taxes. Foreign countries generally do not impose taxes on capital gains with respect to investments by foreign investors. If more than 50% of the value of a Fund's total assets at the close of its taxable year consists of stock or S-43 securities of foreign corporations, a Fund will be eligible to, and will, file an election with the Internal Revenue Service that will enable shareholders, in effect, to receive the benefit of the foreign tax credit with respect to any foreign and United States possessions income taxes paid by a Fund. Pursuant to the election, a Fund will treat those taxes as dividends paid to its shareholders. Each shareholder will be required to include a proportionate share of those taxes in gross income as income received from a foreign source and must treat the amount so included as if the shareholder had paid the foreign tax directly. The shareholder may then either deduct the taxes deemed paid by him or her in computing his or her taxable income or, alternatively, use the foregoing information in calculating the foreign tax credit (subject to significant limitations) against the shareholder's federal income tax. If a Fund makes the election, it will report annually to its shareholders the respective amounts per share of the Fund's income from sources within, and taxes paid to, foreign countries and United States possessions. Most Foreign exchange gains realized on the sale of debt securities are treated as ordinary income by the Fund. Similarly, foreign exchange losses realized by the Fund on the sale of debt securities are generally treated as ordinary losses by the Fund. These gains when distributed will be taxed to you as ordinary dividends, and any losses will reduce the Fund's ordinary income otherwise available for distribution to your. This treatment could increase or reduce the Fund's ordinary income distributions to you, and may cause some or all of the Fund's previously distributed income to be classified as a return of capital. PORTFOLIO TRANSACTIONS The Trust has no obligation to deal with any dealer or group of brokers or dealers in the execution of transactions in portfolio securities. Subject to policies established by the Trustees, the advisers are responsible for placing orders to execute Fund transactions. In placing brokerage orders, it is the Trust's policy to seek to obtain the best net results taking into account such factors as price (including the applicable dealer spread), size, type and difficulty of the transaction involved, the firm's general execution and operational facilities, and the firm's risk in positioning the securities involved. While the advisers generally seek reasonably competitive spreads or commissions, the Trust will not necessarily be paying the lowest spread or commission available. The Trust will not purchase portfolio securities from any affiliated person acting as principal except in conformity with the regulations of the SEC. The Trust does not expect to use one particular broker or dealer, and when one or more brokers is believed capable of providing the best combination of price and execution, the Fund's advisers may cause the Trust to select a broker based upon brokerage or research services provided to the advisers. The advisers may pay a higher commission than otherwise obtainable from other brokers in return for such services only if a good faith determination is made that the commission is reasonable in relation to the services provided. Section 28(e) of the Securities Exchange Act of 1934 ("Section 28(e)") permits the advisers, under certain circumstances, to cause a Fund to pay a broker or dealer a commission for effecting a transaction in excess of the amount of commission another broker or dealer would have charged for effecting the transaction in recognition of the value of brokerage and research services provided by the broker or dealer. Brokerage and research services include (1) furnishing advice as to the value of securities, the advisability of investing in, purchasing or selling securities, and the availability of securities or purchasers or sellers of securities; (2) furnishing analyses and reports concerning issuers, industries, securities, economic factors and trends, portfolio strategy, and the performance of accounts; and (3) effecting securities transactions and performing functions incidental thereto (such as clearance, settlement, and custody). In the case of research services, the advisers believe that access to independent investment research is beneficial to their investment decision-making processes and, therefore, to the Fund. In addition to agency transactions, the advisers may receive brokerage and research services in connection with certain riskless transactions, in accordance with applicable SEC guidelines. To the extent research services may be a factor in selecting brokers, such services may be in written form or through direct contact with individuals and may include information as to particular companies and S-44 securities as well as market, economic, or institutional areas and information which assists in the valuation and pricing of investments. Examples of research-oriented services for which the advisers might utilize Fund commissions include research reports and other information on the economy, industries, sectors, groups of securities, individual companies, statistical information, political developments, technical market action, pricing and appraisal services, credit analysis, risk measurement analysis, performance and other analysis. The advisers may use research services furnished by brokers in servicing all client accounts and not all services may necessarily be used in connection with the account that paid commissions to the broker providing such services. Information so received by the advisers will be in addition to and not in lieu of the services required to be performed by the Funds' advisers under the Investment Advisory Agreements. Any advisory or other fees paid to the advisers are not reduced as a result of the receipt of research services. In some cases an adviser may receive a service from a broker that has both a "research" and a "non-research" use. When this occurs, the adviser makes a good faith allocation, under all the circumstances, between the research and non-research uses of the service. The percentage of the service that is used for research purposes may be paid for with client commissions, while the adviser will use its own funds to pay for the percentage of the service that is used for non-research purposes. In making this good faith allocation, the adviser faces a potential conflict of interest, but the adviser believes that its allocation procedures are reasonably designed to ensure that it appropriately allocates the anticipated use of such services to their research and non-research uses. From time to time, a Fund may purchase new issues of securities for clients in a fixed price offering. In these situations, the seller may be a member of the selling group that will, in addition to selling securities, provide the advisers with research services. The NASD has adopted rules expressly permitting these types of arrangements under certain circumstances. Generally, the seller will provide research "credits" in these situations at a rate that is higher than that which is available for typical secondary market transactions. These arrangements may not fall within the safe harbor of Section 28(e). The money market securities in which a Fund invests are traded primarily in the over-the-counter market. Bonds and debentures are usually traded over-the-counter, but may be traded on an exchange. Where possible, each adviser will deal directly with the dealers who make a market in the securities involved except in those circumstances where they reasonably believe that better prices and execution may be available elsewhere. Such dealers usually are acting as principal for their own account. On occasion, securities may be purchased directly from the issuer. Money market securities are generally traded on a net basis and do not normally involve either brokerage commissions or transfer taxes. The cost of executing portfolio securities transactions of a Fund will primarily consist of dealer spreads and underwriting commissions. Since the Trust does not market its shares through intermediary brokers or dealers, it is not the Trust's practice to allocate brokerage or principal business on the basis of sales of its shares which may be made through such firms. However, a Fund's advisers may place Fund orders with qualified broker-dealers who recommend the Trust to clients, and may, when a number of brokers and dealers can provide best price and execution on a particular transaction, consider such recommendations by a broker or dealer in selecting among broker-dealers. In connection with transactions effected for Funds operating within the "manager of managers" structure, SIMC and the various firms that serve as sub-advisers to certain Funds of the Trust, in the exercise of joint investment discretion over the assets of a Fund, may direct a substantial portion of a Fund's brokerage to the Distributor. All such transactions directed to the Distributor must be accomplished in a manner that is consistent with the Trust's policy to achieve best net results, and must comply with the Trust's procedures regarding the execution of transactions through affiliated brokers. S-45 For the fiscal years ended September 30, 2001, 2002, and 2003, the Funds paid the following brokerage fees:
TOTAL $ AMOUNT TOTAL $ AMOUNT OF BROKERAGE % OF TOTAL % TOTAL OF BROKERAGE COMMISSIONS BROKERAGE BROKERED COMMISSION PAID TO COMMISSIONS TRANSACTIONS PAID AFFILIATES PAID TO EFFECTED THROUGH (000) (000) AFFILIATES AFFILIATES ----------------------------- ------------------------ ---------------- ---------------- FUND 2001 2002 2003 2001 2002 2003 2001 2002 2003 2001 2002 2003 - ---- -------- -------- -------- -------- ------ ------ ---- ---- ---- ---- ---- ---- International Equity Fund $ 9,046 $ 6,044 $ 4,896 $ 1,167 $ 442 $ 372 13% 7% 8% 15% 17% 7% Emerging Markets Equity Fund $ 8,446 $ 6,220 $ 2,928 $ 1,024 $ 145 $ 301 12% 2% 10% 12% 2% 10% International Fixed Income Fund $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 0% 0% 0% 0% 0% 9% Emerging Markets Debt Fund $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 0% 0% 0% 0% 0% 9% Tax-Managed International Equity Fund * * * * * * * * * * * *
- ---------- * Not in operation during such period. The portfolio turnover rates for each Fund for the fiscal years ended September 30, 2002 and 2003, were as follows:
TURNOVER RATE ------------- FUND 2002 2003 ---- ---- ---- International Equity Fund 70% 87% Emerging Markets Equity Fund 109% 69% International Fixed Income Fund 339% 216% Emerging Markets Debt Fund 140% 127% Tax-Managed International Equity Fund * *
- ---------- * Not in operation during such period. The Trust is required to identify any securities of its "regular broker dealers" (as such term is defined in the 1940 Act) which the Trust has acquired during its most recent fiscal year. As of September 30, 2003, the Trust held securities from the following issuers:
FUND TYPE OF SECURITY NAME OF ISSUER AMOUNT (000) - ---- ---------------- -------------- ------------ International Equity Fund Repurchase Agreement Barclays Capital $ 169,435 Repurchase Agreement UBS 121,910 Equity UBS 28,351 Equity HSBC Securities 27,670 Equity Barclays Capital 24,364 Repurchase Agreement State Street Bank & Trust 17,832 Repurchase Agreement Morgan Stanley 16,890 Equity Credit Suisse 5,388 Equity Deutsche Bank 3,554 Debt Credit Suisse 183 Emerging Markets Equity Fund Repurchase Agreement State Street Bank & Trust 9,305 Repurchase Agreement Barclays Capital 9,180 Repurchase Agreement Morgan Stanley 8,772 Repurchase Agreement UBS 6,605
S-46
FUND TYPE OF SECURITY NAME OF ISSUER AMOUNT (000) - ---- ---------------- -------------- ------------ International Fixed Income Fund Repurchase Agreement State Street Bank & Trust $ 110,693 Debt J.P. Morgan 8,940 Debt Citigroup 8,567 Debt HSBC Securities 4,383 Debt Goldman Sachs 986 Emerging Markets Debt Fund Repurchase Agreement State Street Bank & Trust 20,247 Repurchase Agreement Barclays Capital 17,496 Repurchase Agreement UBS 12,589
DESCRIPTION OF SHARES The Declaration of Trust authorizes the issuance of an unlimited number of shares of each Fund, each of which represents an equal proportionate interest in that Fund. Each share upon liquidation entitles a shareholder to a PRO RATA share in the net assets of that Fund. Shareholders have no preemptive rights. The Declaration of Trust provides that the Trustees of the Trust may create additional portfolios of shares or classes of portfolios. Share certificates representing the shares will not be issued. LIMITATION OF TRUSTEES' LIABILITY The Declaration of Trust provides that a Trustee shall be liable only for his own willful defaults and, if reasonable care has been exercised in the selection of officers, agents, employees or administrators, shall not be liable for any neglect or wrongdoing of any such person. The Declaration of Trust also provides that the Trust will indemnify its Trustees and officers against liabilities and expenses incurred in connection with actual or threatened litigation in which they may be involved because of their offices with the Trust unless it is determined in the manner provided in the Declaration of Trust that they have not acted in good faith in the reasonable belief that their actions were in the best interests of the Trust. However, nothing in the Declaration of Trust shall protect or indemnify a Trustee against any liability for his willful misfeasance, bad faith, gross negligence or reckless disregard of his duties. CODE OF ETHICS The Board of Trustees of the Trust has adopted a Code of Ethics pursuant to Rule 17j-1 under the 1940 Act. In addition, the advisers and the Distributor have adopted Codes of Ethics pursuant to Rule 17j-1. These Codes of Ethics apply to the personal investing activities of trustees, officers and certain employees ("access persons"). Rule 17j-1 and the Codes are reasonably designed to prevent unlawful practices in connection with the purchase or sale of securities by access persons. Under each Code of Ethics, access persons are permitted to engage in personal securities transactions, but are required to report their personal securities transactions for monitoring purposes. In addition, certain access persons are required to obtain approval before investing in initial public offerings or private placements or are prohibited from making such investments. Copies of these Codes of Ethics are on file with SEC, and are available to the public. VOTING Each share held entitles the shareholder of record to one vote. Shareholders of each Fund or class will vote separately on matters pertaining solely to that Fund or class, such as any distribution plan. As a Massachusetts business trust, the Trust is not required to hold annual meetings of shareholders, but approval will be sought for certain changes in the operation of the Trust and for the election of Trustees under certain circumstances. In addition, a Trustee may be removed by the remaining Trustees or by shareholders at a special meeting called upon written request of shareholders owning at least 10% of the outstanding shares of the Trust. In the event that such a meeting is requested, the Trust will provide appropriate assistance and information to the shareholders requesting the meeting. S-47 Where the Prospectuses for the Funds or Statement of Additional Information state that an investment limitation or a fundamental policy may not be changed without shareholder approval, such approval means the vote of: (i) 67% or more of a Fund's shares present at a meeting if the holders of more than 50% of the outstanding shares of the Fund are present or represented by proxy; or (ii) more than 50% of a Fund's outstanding shares, whichever is less. SHAREHOLDER LIABILITY The Trust is an entity of the type commonly known as a "Massachusetts business trust." Under Massachusetts law, shareholders of such a Trust could, under certain circumstances, be held personally liable as partners for the obligations of the Trust. Even if, however, the Trust were held to be a partnership, the possibility of the shareholders incurring financial loss for that reason appears remote because the Trust's Declaration of Trust contains an express disclaimer of shareholder liability for obligations of the Trust and requires that notice of such disclaimer be given in each agreement, obligation or instrument entered into or executed by or on behalf of the Trust or the Trustees, and because the Declaration of Trust provides for indemnification out of the Trust property for any shareholders held personally liable for the obligations of the Trust. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES As of January 13, 2004, the following persons were the only persons who were record owners (or to the knowledge of the Trust, beneficial owners) of 5% or more of the shares of the Funds. Persons who owned of record or beneficially more than 25% of a Fund's outstanding shares may be deemed to control the Fund within the meaning of the 1940 Act. The Trust believes that most of the shares referred to below were held by the below persons in accounts for their fiduciary, agency or custodial customers. As of January 13, 2004, the Tax-Managed International Equity Fund had not commenced operations.
NAME AND ADDRESS NUMBER OF SHARES PERCENT OF FUNDS ---------------- ---------------- ---------------- INTERNATIONAL EQUITY FUND, CLASS A SEI Private Trust Company 234,407,852 85.48% One Freedom Valley Drive Oaks, PA 19456 INTERNATIONAL EQUITY FUND, CLASS I SEI Private Trust Co. 71,197 17.40% FBO Beneficial Life Ins. Co. Agent's Retirement Plan c/o PFPC Attn: RKU Dept. 1700 W. 82nd Street #125 Minneapolis, MN 55431-1404 SEI Private Trust Company FBO 32,396 7.92% The Clarks Companies NA Employee Savings Plan 1700 W 82nd Street, Suite 125 Bloomington, MN 55431-1404 SEI Private Trust Company FBO 31,726 7.76% Qantas Airways Limited Capital Accumulation Plan C/O Doug Kelly 1700 W 82nd Street, Suite 125 Bloomington, MN 55431-1404
S-48
NAME AND ADDRESS NUMBER OF SHARES PERCENT OF FUNDS ---------------- ---------------- ---------------- SEI Private Trust Company FBO 48,222 11.79% J & J Distributing Co. 401K Plan Attn: PFPC c/o Doug Kelly 1700 W. 82nd Street, Suite 125 Bloomington, MN 55431-1404 SEI Private Trust Company FBO 49,849 12.19% Anesthecare Inc. Profit Sharing Plan PFPC c/o Doug Kelly 1700 W. 82nd Street, Suite 125 Bloomington, MN 55431-1404 SEI Private Trust Company FBO 72,845 17.81% Elkem Metals Inc. Retirement PFPC c/o Doug Kelly 1700 W. 82nd Street, Suite 125 Bloomington, MN 55431-1404 INTERNATIONAL FIXED INCOME FUND, CLASS A SEI Private Trust Company 64,224,187 85.31% One Freedom Valley Drive Oaks, PA 19456 EMERGING MARKETS EQUITY FUND, CLASS A SEI Private Trust Company 79,177,590 78.39% One Freedom Valley Drive Oaks, PA 19456 EMERGING MARKETS DEBT FUND, CLASS A SEI Private Trust Company 49,574,712 80.18% One Freedom Valley Drive Oaks, PA 19456
EXPERTS The financial statements incorporated by reference into this Statement of Additional Information have been audited by PricewaterhouseCoopers LLP, independent accountants, as indicated in their report dated November 21, 2003 and are included herein in reliance upon the authority of said firm as experts in auditing and accounting and in giving said report. PricewaterhouseCoopers LLP is located at Two Commerce Square, Suite 1700, 2001 Market Street, Philadelphia, Pennsylvania 19103. CUSTODIAN State Street Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts 02110, serves as custodian for the assets of the Funds (the "Custodian"). The Custodian holds cash, securities and other assets of the Trust as required by the 1940 Act. Wachovia Bank N.A., (formerly, First Union National Bank), Broad and Chestnut Streets, P.O. Box 7618, Philadelphia, Pennsylvania 19101, acts as wire agent of the Trust's assets. LEGAL COUNSEL Morgan, Lewis & Bockius LLP serves as counsel to the Trust. S-49 APPENDIX--DESCRIPTION OF CORPORATE BOND RATINGS MOODY'S RATINGS DEFINITIONS LONG TERM Aaa Bonds which are rated Aaa are judged to be of the best quality. They carry the smallest degree of investment risk and are generally referred to as "gilt edged." Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues. Aa Bonds which are rated Aa are judged to be of high quality by all standards. Together with the Aaa group they comprise what are generally known as high-grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risk appear somewhat larger than the Aaa securities. A Bonds which are rated A possess many favorable investment attributes and are to be considered as upper-medium grade obligations. Factors giving security to principal and interest are considered adequate, but elements may be present which suggest a susceptibility to impairment some time in the future. Baa Bonds which are rated Baa are considered as medium-grade obligations (I.E., they are neither highly protected nor poorly secured). Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well. Ba Bonds which are rated Ba are judged to have speculative elements; their future cannot be considered as well-assured. Often the protection of interest and principal payments may be very moderate and thereby not well safeguarded during both good and bad times over the future. Uncertainty of position characterizes bonds in this class. B Bonds which are rated B generally lack characteristics of the desirable investment. Assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of time may be small. Caa Bonds which are rated Caa are of poor standing. Such issues may be in default or there may be present elements of danger with respect to principal or interest. Ca Bonds which are rated Ca represent obligations which are speculative in a high degree. Such issues are often in default or have other marked shortcomings. C Bonds which are rated C are the lowest rated class of bonds, and issues so rated can be regarded as having extremely poor prospects of ever attaining any real investment standing. STANDARD & POOR'S RATINGS DEFINITIONS A Standard & Poor's corporate or municipal debt rating is a current assessment of creditworthiness of an obligor with respect to a specific obligation. This assessment may take into consideration obligors such as guarantors, insurers, or lessees. The debt rating is not a recommendation to purchase, sell or hold a security, as it does not comment on market price or suitability for a particular investor. A-1 The ratings are based, in varying degrees, on the following considerations: (1) Likelihood of default. The rating assesses the obligor's capacity and willingness as to timely payment of interest and repayment of principal in accordance with the terms of the obligation. (2) The obligation's nature and provisions. (3) Protection afforded to, and relative position of, the obligation in the event of bankruptcy, reorganization, or other arrangement under bankruptcy laws and other laws affecting creditor's rights. Likelihood of default is indicated by an issuer's senior debt rating. If senior debt is not rated, an implied senior debt rating is determined. Subordinated debt usually is rated lower than senior debt to better reflect relative position of the obligation in bankruptcy. Unsecured debt, where significant secured debt exists, is treated similarly to subordinated debt. LONG-TERM INVESTMENT GRADE AAA Debt rated 'AAA' has the highest rating assigned by S&P. Capacity to pay interest and repay principal is extremely strong. AA Debt rated 'AA' has a very strong capacity to pay interest and repay principal and differs from the highest rated debt only in small degree. A Debt rated 'A' has a strong capacity to pay interest and repay principal, although it is somewhat more susceptible to adverse effects of changes in circumstances and economic conditions than debt in higher-rated categories. BBB Debt rated 'BBB' is regarded as having an adequate capacity to pay interest and repay principal. Whereas it normally exhibits adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal for debt in this category than in higher rated categories. SPECULATIVE GRADE Debt rated 'BB', 'B', 'CCC', 'CC', and 'C' is regarded as having predominantly speculative characteristics with respect to capacity to pay interest and repay principal. 'BB' indicates the least degree of speculation and 'C' the highest degree of speculation. While such debt will likely have some quality and protective characteristics, these are outweighed by large uncertainties or major risk exposure to adverse conditions. BB Debt rated 'BB' has less near-term vulnerability to default than other speculative grade debt. However, it faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions that could lead to inadequate capacity to meet timely interest and principal payments. The 'BB' rating category is also used for debt subordinated to senior debt that is assigned an actual or implied 'BBB -' rating. B Debt rate 'B' has greater vulnerability to default but presently has the capacity to meet interest payments and principal repayments. Adverse business, financial, or economic conditions would likely impair capacity or willingness to pay interest and repay principal. The 'B' rating category also is used for debt subordinated to senior debt that is assigned an actual or implied 'BB' or 'BB -' rating. CCC Debt rated 'CCC' has a current identifiable vulnerability to default, and is dependent on favorable business, financial and economic conditions to meet timely payment of interest and repayment of principal. In the event of adverse business, financial, or economic conditions, it is not likely to have the capacity to pay interest and repay principal. The 'CCC' rating category also is used for debt subordinated to senior debt that is assigned an actual or implied 'B' or 'B -' rating. A-2 CC The rating 'CC' is typically applied to debt subordinated to senior debt which is assigned an actual or implied 'CCC' rating. C The rating 'C' is typically applied to debt subordinated to senior debt which is assigned an actual or implied 'CCC -' debt rating. The 'C' rating may be used to cover a situation where a bankruptcy petition has been filed, but debt service payment is continued. CI Debt rated 'CI' is reserved for income bonds on which no interest is being paid. D Debt is rated 'D' when the issue is in payment default, or the obligor has filed for bankruptcy. The 'D' rating is used when interest or principal payments are not made on the date due, even if the applicable grace period has not expired, unless S&P believes that such payments will be made during such grace period. Plus (+) or minus (-): The ratings from 'AA' to 'CCC' may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories. c The letter 'c' indicates that the holder's option to tender the security for purchase may be canceled under certain prestated conditions enumerated in the tender option documents. p The letter 'p' indicates that the rating is provisional. A provisional rating assumes the successful completion of the project financed by the debt being rated and indicates that payment of the debt service requirements is largely or entirely dependent upon the successful timely completion of the project. This rating, however, while addressing credit quality subsequent to completion of the project, makes no comment on the likelihood of, or the risk of default upon failure of such completion. The investor should exercise his own judgement with respect to such likelihood and risk. L The letter 'L' indicates that the rating pertains to the principal amount of those bonds to the extent that the underlying deposit collateral is federally insured, and interest is adequately collateralized. In the case of certificates of deposit, the letter 'L' indicates that the deposit, combined with other deposits being held in the same right and capacity, will be honored for principal and pre-default interest up to federal insurance limits within 30 days after closing of the insured institution or, in the event that the deposit is assumed by a successor insured institution, upon maturity. - ---------- * Continuance of the rating is contingent upon S&P's receipt of an executed copy of the escrow agreement or closing documentation confirming investments and cash flows. N.R. Not rated. Debt obligations of issuers outside the United States and its territories are rated on the same basis as domestic corporate and municipal issues. The ratings measure the creditworthiness of the obligor but do not take into account currency exchange and related uncertainties. If an issuer's actual or implied senior debt rating is 'AAA', its subordinated or junior debt is rated 'AAA' or 'AA+'. If an issuer's actual or implied senior debt rating is lower than 'AAA' but higher than 'BB+', its junior debt is typically rated one designation lower than the senior debt ratings. For example, if the senior debt rating is 'A', subordinated debt normally would be rated 'A -'. If an issuer's actual or implied senior debt rating is 'BB+' or lower, its subordinated debt is typically rated two designations lower than the senior debt rating. NOTE: The term "investment grade" was originally used by various regulatory bodies to connote obligations eligible for investment by institutions such as banks, insurance companies, and savings and loan associations. Over time, this term gained widespread usage throughout the investment community. Issues rated in the four highest categories, 'AAA', 'AA', 'A' and 'BBB', generally are recognized as being investment grade. Debt 'BB' or below generally is referred to as speculative grade. The term "junk bond" is merely a more irreverent expression for this category of more risky debt. Neither term indicates which securities S&P deems worthy of investment, as an investor with a particular risk preference may appropriately invest in securities that are not investment grade. A-3 DESCRIPTION OF FITCH'S LONG-TERM RATINGS INVESTMENT GRADE BOND AAA Bonds rated AAA are judged to be strictly high grade, broadly marketable, suitable for investment by trustees and fiduciary institutions liable to slight market fluctuation other than through changes in the money rate. The prime feature of an AAA bond is a showing of earnings several times or many times greater than interest requirements, with such stability of applicable earnings that safety is beyond reasonable question whatever changes occur in conditions. AA Bonds rated AA are judged to be of safety virtually beyond question and are readily salable, whose merits are not unlike those of the AAA class, but whose margin of safety is less strikingly broad. The issue may be the obligation of a small company, strongly secured but influenced as to rating by the lesser financial power of the enterprise and more local type market. A Bonds rated A are considered to be investment grade and of high credit quality. The obligor's ability to pay interest and repay principal is considered to be strong, but may be more vulnerable to adverse changes in economic conditions and circumstances than bonds with higher ratings. BBB Bonds rated BBB are considered to be investment grade and of satisfactory credit quality. The obligor's ability to pay interest and repay principal is considered to be adequate. Adverse changes in economic conditions and circumstances, however, are more likely to have an adverse impact on these bonds, and therefore impair timely payment. The likelihood that the ratings of these bonds will fall below investment grade is higher than for bonds with higher ratings. A-4 PART C. OTHER INFORMATION ITEM 23. EXHIBITS: (a) Agreement and Declaration of Trust dated June 28, 1988 as originally filed with Registrant's Registration Statement on Form N-1A (File No. 33-22821) filed with the Securities and Exchange Commission ("SEC") on June 30, 1988, is herein incorporated by reference to Exhibit 1 of Post-Effective Amendment No. 23, filed with the SEC on June 23, 1997. (a)(2) Amendment to Agreement and Declaration of Trust dated August 9 1989, is filed herewith. (a)(3) Amendment to Agreement and Declaration of Trust, dated April 29, 1998, is filed herewith. (b)(1) Amended By-Laws dated February 20, 2001 are herein incorporated by reference to Exhibit (b)(3) of Post-Effective Amendment No. 34 to Registrant's Registration Statement on Form N-1A (File Nos. 33-22821 and 811-5601), filed with the SEC on January 28, 2002. (c) Not Applicable (d)(1) Investment Advisory Agreement between Registrant and SEI Investments Management Corporation ("SIMC") dated December 16, 1994 (restated as of December 17, 2002) is herein incorporated by reference to Exhibit (d)(1) of Post-Effective Amendment No. 36 to Registrant's Registration Statement on Form N-1A (File Nos. 33-22821 and 811-5601), filed with the SEC on January 28, 2003. (d)(2) Schedule to Investment Advisory Agreement between Registrant and SIMC dated December 16, 2002 with respect to the International Fixed Income Fund is herein incorporated by reference to Exhibit (d)(2) of Post-Effective Amendment No. 36 to Registrant's Registration Statement on Form N-1A (File Nos. 33-22821 and 811-5601), filed with the SEC on January 28, 2003. (d)(3) Investment Sub-Advisory Agreement between SIMC and Capital Guardian Trust Company dated June 29, 1998 with respect to the International Equity Fund is herein incorporated by reference to Exhibit (d)(24) of Post-Effective Amendment No. 26 to Registrant's Registration Statement on Form N-1A (File No. 33-22821), filed with the SEC on November 25, 1998. (d)(4) Investment Sub-Advisory Agreement between SIMC and Morgan Stanley Investment Management Inc. dated October 1, 2001 with respect to the International Equity Fund is herein incorporated by reference to Exhibit (d)(39) of Post-Effective Amendment No. 34 to Registrant's Registration Statement on Form N-1A (File Nos. 33-22821 and 811-5601), filed with the SEC on January 28, 2002. (d)(5) Investment Sub-Advisory Agreement between SIMC and Alliance Capital Management L.P. dated June 26, 2002 with respect to the Emerging Markets Equity Fund is herein incorporated by reference to Exhibit (d)(9) of Post-Effective Amendment No. 35 to Registrant's Registration Statement on Form N-1A (File No. 33-22821), filed with the SEC on November 27, 2002. (d)(6) Investment Sub-Advisory Agreement between SIMC and The Boston Company Asset Management dated September 18, 2000 with respect to the Emerging Markets Equity Fund is herein incorporated by reference to Exhibit (d)(36) of Post-Effective Amendment No. 32 to Registrant's Registration Statement on Form N-1A (File No. 33-22821), filed on January 26, 2001. (d)(7) Investment Sub-Advisory Agreement between SIMC, Fischer Francis Trees & Watts, Inc., Fischer Francis Trees & Watts, Fischer Francis Trees & Watts (Singapore) Pte Ltd and Fischer Francis Trees & Watts Kabushiki Kaisha dated December 17, 2002 with respect to the International Fixed Income Fund is herein incorporated by reference to Exhibit (d)(13) of Post-Effective Amendment No. 36 to Registrant's Registration Statement on Form N-1A (File Nos. 33-22821 and 811-5601), filed with the SEC on January 28, 2003. C-1 (d)(8) Investment Sub-Advisory Agreement between SIMC and Salomon Brothers Asset Management Inc. dated March 31, 1997 with respect to the Emerging Markets Debt Fund is herein incorporated by reference to Exhibit (d)(31) of Post-Effective Amendment No. 29 to Registrant's Registration Statement on Form N-1A (File No. 33-22821), filed on January 27, 2000. (d)(9) Investment Sub-Advisory Agreement between SIMC and Ashmore Investment Management Limited dated March 17, 2003 with respect to the Emerging Markets Debt Fund is filed herewith. (d)(10) Investment Sub-Advisory Agreement between SIMC and Alliance Capital Management L.P. dated July 1, 2003 with respect to the International Equity Fund is filed herewith. (d)(11) Investment Sub-Advisory Agreement between SIMC and Citigroup Asset Management Ltd. dated September 30, 2003 with respect to the Emerging Markets Equity Fund is filed herewith. (d)(12) Investment Sub-Advisory Agreement between SIMC and Emerging Markets Management, L.L.C. dated March 11, 2003 with respect to the Emerging Markets Equity Fund is filed herewith. (d)(13) Investment Sub-Advisory Agreement between SIMC and Fisher Investments, Inc. dated July 1, 2003 with respect to the International Equity Fund is filed herewith. (d)(14) Investment Sub-Advisory Agreement between SIMC and McKinley Capital Management, Inc. dated July 1, 2003 with respect to the International Equity Fund is filed herewith. (d)(15) Amendment to Investment Sub-Advisory Agreement between SIMC and Alliance Capital Management L.P. dated July 1, 2003 with respect to the Emerging Markets Equity Fund is filed herewith. (d)(16) Amendment to Investment Sub-Advisory Agreement between SIMC and Ashmore Investment Management Limited dated July 1, 2003 with respect to the Emerging Markets Debt Fund is filed herewith. (d)(17) Amendment to Investment Sub-Advisory Agreement between SIMC and The Boston Company Asset Management, LLC dated July 1, 2003 with respect to the Emerging Markets Equity Fund is filed herewith. (d)(18) Amendment to Investment Sub-Advisory Agreement between SIMC and Capital Guardian Trust Company dated July 1, 2003 with respect to the International Equity Fund is filed herewith. (d)(19) Amendment to Investment Sub-Advisory Agreement between SIMC and Emerging Markets Management, L.L.C. dated July 1, 2003 with respect to the Emerging Markets Equity Fund is filed herewith. (d)(20) Amendment to Investment Sub-Advisory Agreement between SIMC and Fischer Francis Trees & Watts, Inc., Fischer Francis Trees & Watts, Fischer Francis Trees & Watts (Singapore) Pte Ltd and Fischer Francis Trees & Watts Kabushiki Kaisha dated July 1, 2003 with respect to the International Fixed Income Fund is filed herewith. (d)(21) Amendment to Investment Sub-Advisory Agreement between SIMC and Morgan Stanley Investment Management Inc. dated July 1, 2003 with respect to the International Equity Fund is filed herewith. (d)(22) Amendment to Investment Sub-Advisory Agreement between SIMC and Salomon Brothers Asset Management Inc dated July 28, 2003 with respect to the Emerging Markets Debt Fund is filed herewith. C-2 (e) Amended and Restated Distribution Agreement between Registrant and SEI Investments Distribution Co. dated September 16, 2002 is herein incorporated by reference to Exhibit (e) of Post-Effective Amendment No. 35 to Registrant's Registration Statement on Form N-1A (File No. 33-22821), filed with the SEC on November 27, 2002. (f) Not Applicable (g)(1) Custodian Agreement between Registrant and State Street Bank and Trust Company as originally filed as Exhibit (8) to Post-Effective Amendment No. 1 to Registrant's Registration Statement on Form N-1A (File No. 33-22821), filed with the SEC on September 16, 1998, is herein incorporated by reference to Exhibit 8(a) of Post-Effective Amendment No. 23, filed with the SEC on June 23, 1997. (h)(1) Amended and Restated Administration and Transfer Agency Agreement between Registrant and SIMC dated September 16, 2002 is herein incorporated by reference to Exhibit (h)(1) of Post-Effective Amendment No. 35 to Registrant's Registration Statement on Form N-1A (File No. 33-22821), filed with the SEC on November 27, 2002. (h)(2) Shareholder Service Plan and Agreement with respect to the Class A shares is herein incorporated by reference to Exhibit 15(e) of Post-Effective Amendment No. 22 to Registrant's Registration Statement on Form N-1A (File No. 33-22821), filed with the SEC on April 8, 1997. (h)(3) Shareholder Service Plan and Agreement with respect to Class I shares is herein incorporated by reference to Exhibit (h)(5) of Post-Effective Amendment No. 30 to Registrant's Registration Statement on Form N-1A (File No. 33-22821), filed on June 30, 2000. (h)(4) Administrative Services Plan and Agreement with respect to Class I shares is herein incorporated by reference to Exhibit (h)(6) of Post-Effective Amendment No. 34 to Registrant's Registration Statement on Form N-1A (File Nos. 33-22821 and 811-5601), filed with the SEC on January 28, 2002. (i) Opinion and Consent of Counsel is filed herewith. (j) Opinion and Consent of Independent Accountants is filed herewith. (k) Not Applicable (l) Not Applicable (m) Not Applicable. (n) Amended and Restated Rule 18f-3 Multiple Class Plan relating to Class A, I and Y shares dated June 26, 2002 is herein incorporated by reference to Exhibit (n) of Post-Effective Amendment No. 35 to Registrant's Registration Statement on Form N-1A (File No. 33-22821), filed with the SEC on November 27, 2002. (o) Not Applicable. (p)(1) The Code of Ethics for SEI Investments Company is herein incorporated by reference to Exhibit (p)(1) of Post-Effective Amendment No. 42 of SEI Institutional Managed Trust's Registration Statement on Form N-1A (File Nos. 33-9504 and 811-4878), filed with the SEC on January 28, 2004. (p)(2) The Code of Ethics for SEI Institutional International Trust is herein incorporated by reference to Exhibit (p)(2) of Post-Effective Amendment No. 30 to Registrant's Registration Statement on Form N-1A (File No. 33-22821), filed on June 30, 2000. (p)(3) The Code of Ethics for Capital Guardian Trust Company is filed herewith. (p)(4) The Code of Ethics for Morgan Stanley Investment Management Inc. is herein incorporated by reference to Exhibit (p)(5) of Post-Effective Amendment No. 35 to Registrant's Registration Statement on Form N-1A (File No. 33-22821), filed with the SEC on November 27, 2002. C-3 (p)(5) The Code of Ethics for Salomon Brothers Asset Management Inc is herein incorporated by reference to Exhibit (p)(11) of Post-Effective Amendment No. 30 to Registrant's Registration Statement on Form N-1A (File No. 33-22821), filed on June 30, 2000. (p)(6) The Code of Ethics for The Boston Company Asset Management is herein incorporated by reference to Exhibit (p)(8) of Post-Effective Amendment No. 6 to SEI Institutional Investment Trust's Registration Statement on Form N-1A (File Nos. 33-58041 and 811-7257), filed with the SEC on September 28, 2000 (Accession # 0000912057-00-043038). (p)(7) The Code of Ethics for Alliance Capital Management L.P. is herein incorporated by reference to Exhibit (p)(3) of Post-Effective Amendment No. 13 to SEI Institutional Investments Trust's Registration Statement on Form N-1A (File Nos. 33-58041 and 811-7257), filed with the SEC on September 30, 2003. (p)(8) The Code of Ethics for Fischer Francis Trees & Watts, Inc. is herein incorporated by reference to Exhibit (p)(12) of Post-Effective Amendment No. 13 to SEI Institutional Investments Trust's Registration Statement on Form N-1A (File Nos. 33-58041 and 811-7257), filed with the SEC on September 30, 2003. (p)(9) The Code of Ethics for Ashmore Investment Management Limited is filed herewith. (p)(10) The Code of Ethics for Citigroup Asset Management Limited is herein incorporated by reference to Exhibit (p)(9) of Post Effective Amendment No. 13 to SEI Institutional Investments Trust's Registration Statement on Form N-1A (File Nos. 33-58041 and 811-7257), filed with the SEC on September 30, 2003. (p)(11) The Code of Ethics for Emerging Markets Management, L.L.C. is herein incorporated by reference to Exhibit (p)(33) of Post Effective Amendment No. 5 to SEI Insurance Products Trust's Registration Statement on Form N-1A (File Nos. 333-70013 and 811-9183), filed with the SEC on April 30, 2003. (p)(12) The Code of Ethics for Fisher Investments, Inc. is herein incorporated by reference to Exhibit (p)(39) of Post Effective Amendment No. 14 to SEI Institutional Investments Trust's Registration Statement on Form N-1A (File Nos. 33-58041 and 811-7257), filed with the SEC on November 14, 2003. (p)(13) The Code of Ethics for McKinley Capital Management, Inc. is herein incorporated by reference to Exhibit (p)(19) of Post Effective Amendment No. 6 to SEI Institutional International Trust's Registration Statement on Form N-1A (File Nos. 33-58041 and 811-7257), filed with the SEC on September 27, 2000. (q) Powers of Attorney for Robert A. Nesher, William M. Doran, F. Wendell Gooch, Rosemarie B. Greco, George J. Sullivan, Jr., James M. Storey, Edward D. Loughlin, Nina Lesavoy and Pedro A. Rodriguez are incorporated by reference to Exhibit (q) of Post-Effective Amendment No. 40 of SEI Institutional Managed Trust's Registration Statement on Form N-1A (File Nos. 33-9504 and 811-4878) filed with the SEC on November 12, 2003. ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT: See the Prospectus and Statement of Additional Information regarding the Trust's control relationships. SIMC is a subsidiary of SEI Investments Company which also controls the distributor of the Registrant (SEI Investments Distribution Co.) and other corporations engaged in providing various financial and record keeping services, primarily to bank trust departments, pension plan sponsors and investment managers. ITEM 25. INDEMNIFICATION: Article VIII of the Agreement and Declaration of Trust filed as Exhibit 1 to the Registration Statement is incorporated by reference. Insofar as indemnification for liabilities arising under the Securities C-4 Act of 1933, as amended (the "Act"), may be permitted to trustees, directors, officers and controlling persons of the Registrant by the Registrant pursuant to the Registrant's Agreement and Declaration of Trust or otherwise, the Registrant is aware that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Act and, therefore, is unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by trustees, directors, officers or controlling persons of the Registrant in connection with the successful defense of any act, suit or proceeding) is asserted by such trustees, directors, officers or controlling persons in connection with the shares being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER: ALLIANCE CAPITAL MANAGEMENT L.P. Alliance Capital Management, L.P. ("Alliance Capital") is a sub-adviser to the Registrant's Emerging Markets Equity and International Equity Funds. The principal business address of Alliance Capital is 1345 Avenue of the Americas, New York, New York 10105. Alliance Capital is an investment adviser registered under the Investment Advisers Act of 1940 (the "Advisers Act").
NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- Donald Hood Brydon AXA Investment Managers S.A. Chairman & Chief Executive Director Officer Bruce William Calvert -- -- Chairman of the Board & CEO Henri de Castries AXA Chairman, Management Board Director Christopher M. Condron AXA Director, President, Chief Director Executive Officer Equitable Life Assurance Society Chairman, CEO Denis Duverne AXA Group Executive Vice President Director Finance, Control and Strategy Richard S. Dziadzio AXA Senior Vice President Director Alfred Harrison -- -- Vice Chairman Roger Hertog -- -- Vice Chairman Benjamin Duke Holloway Continental Companies Financial Consultant Director Robert Henry Joseph, Jr. -- -- Sr. Vice President, CFO
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NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- W. Edwin Jarmain Jarmain Group Inc. President Director Lewis A. Sanders -- -- Vice Chairman, Chief Investment Officer Peter J. Tobin St. John's University Dean Director Tobin College of Business Administration Peter D. Noris AXA Financial Executive Vice President, Chief Director Investment Officer Gerald M. Lieberman -- -- Chief Operating Officer Frank Savage Savage Holdings LLC Chief Executive Officer Director Stanley B. Tulin AXA Financial Vice Chairman & Chief Director Financial Officer Equitable Life Assurance Society Vice Chairman & CFO Dave Harrel Williams White Williams Private Equity Partner Director Partners GmbH Kathleen A. Corbet Alliance Fixed Income Investors CEO Executive Vice President Lorie Slutsky The New York Community Trust Director Director Andrew Adelson -- -- Senior Vice President & Chief Investment Officer John Blundin -- -- Executive Vice President Marilyn Fedak -- -- Senior Vice President & Chief Investment Officer Thomas S. Hexner -- -- Executive Vice President Marc Mayer Bernstein Investment Research and Head Executive Vice President Management James Reilly -- -- Executive Vice President
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NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- Paul Rissman -- -- Executive Vice President David Steyn -- -- Head of Institutional Investment Management Sales and Marketing Unit Christopher Toub -- -- Executive Vice President Lisa Shalett Sanford C. Bernstein Chairman/CEO
ASHMORE INVESTMENT MANAGEMENT LIMITED Ashmore Investment Management Limited ("Ashmore") is a sub-adviser for the Registrant's Emerging Markets Debt Fund. The principal business address of Ashmore is 20 Bedfordbury, London, United Kingdom WC2N 4BL. Ashmore is a registered investment adviser under the Advisers Act.
NAME AND POSITION NAME OF OTHER COMPANY WITH INVESTMENT ADVISER (ALL UK UNLESS SHOWN OTHERWISE) POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- Jon Moulton Alchemy Partners (Guernsey) Ltd Director Director (Guernsey registered) Alchemy Partners LLP Managing Partner 30 St James's Square Investments Ltd Director Aardvark TMC Ltd Director Air Sea Survival Director Equipment Limited Aries (Mauritius registered) Director Ashmore Group Ltd Director Ashmore Investments (UK) Ltd Director Ashmore Investment Director Management Ltd Ashmore Corporate Finance Ltd Director Cedar Ltd Director Civica plc Director Edlaw plc Director Everett Services Director Phoenix IT Group Ltd Director Point-on Holdings Director Redac Ltd Director Redac Gratis Limited Director Sandsenor Ltd Director Mark Coombs Ashmore Group Ltd Director Director Ashmore Investments (UK) Ltd Director
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NAME AND POSITION NAME OF OTHER COMPANY WITH INVESTMENT ADVISER (ALL UK UNLESS SHOWN OTHERWISE) POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- Ashmore Investment Director Management Ltd Ashmore Corporate Finance Ltd Director Ashmore Asset Director Management Limited Ashmore Russian Equity Director Fund (Cayman Islands registered) Ashmore Global Special Director Situations Fund Limited (Cayman Islands registered) Ashmore Emerging Markets Director Debt Fund (Cayman Islands registered) International Administration Director (Guernsey) Limited (Guernsey registered) Balkan Regeneration Fund Director (Cayman Islands registered) EMTA (US registered) Director (Co-chair)
THE BOSTON COMPANY ASSET MANAGEMENT LLC The Boston Company Asset Management LLC ("The Boston Company") is a sub-adviser for the Registrant's Emerging Markets Equity Fund. The principal business address of The Boston Company is One Boston Place, Boston, MA 02108-4402. The Boston Company is a registered investment adviser under the Advisers Act.
NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- Francis Antin Certus Asset Advisors Director and Chairman Director Corporation Boston Safe Deposit and Trust Senior Vice President Company TBCAM Holdings, LCC Director Corey Griffin Boston Safe Deposit and Trust Senior Vice President CEO, Director Company TBCAM Holdings, LCC Director The Boston Company Asset President and CEO Management, LLC Stephen Canter Dreyfus Corporation President, CEO, COO, Director, Director Chairman of the Board Dreyfus Investment Chairman of the Board, Advisors, Inc. Director, President
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NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- Dreyfus Trust Company Director, Chairman, President, CEO Newton Management Limited Director Franklin Portfolio Associates, Director LLC Franklin Portfolio Holdings, Inc. Director TBCAM Holdings, LCC Director Mellon Capital Management Director Corp. Mellon Financial Corp. Vice Chairman Mellon Equity Associates, LLP Executive Committee Mellon Bond Associates, LLP Executive Committee Founders Asset Management, Member Board of Managers LLC Standish Mellon Asset Board Manager Management LLC John Nagorniak Franklin Portfolio Holdings LLC Chairman of the Board, Director Director Mellon Equity Associates, LLP Executive Committee TBCAM Holdings LLC Director Mellon Capital Management Director Corp. Newton Investment Director Management Limited Standish Mellon Asset Member of Board of Managers Management LLC Standish Mellon Asset Member of Board of Managers Management Holdings LLC Mellon HBV Alternative Manager Strategies LLC Foxstone Financial Corp. Vice Chairman Ronald O'Hanley Mellon Financial Corporation Vice Chairman Director Mellon Institutional Asset President Management Boston Safe Deposit & Trust Director Company Newton Asset Management Director Mellon Capital Management Director Standish Mellon Asset Director Management LLC Prime Advisors Director Franklin Portfolio Associates Director Mellon Equity Associates Director
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NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- TBCAM Holdings LLC Director Mellon Consultants Director Pareto Partners Director Mellon Capital Management Director Mellon Bank N.A. Vice Chairman D. Kirk Henry The Dreyfus Corporation Portfolio Manager Senior Vice President Boston Safe Deposit & Senior Vice President Trust Company The Boston Company Asset Senior Vice President Management, LLC Carolyn Kedersha The Dreyfus Corporation Portfolio Manager The Boston Company Asset Senior Vice President Management, LLC
CAPITAL GUARDIAN TRUST COMPANY Capital Guardian Trust Company ("Capital Guardian") is a sub-adviser for the Registrant's International Equity Fund. The principal business address of Capital Guardian is 333 Hope Street, 55th Floor, Los Angeles, California 90071. Capital Guardian is a registered investment adviser under the Advisers Act.
NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- Andrew F. Barth The Capital Group Companies Director Director and President Capital Research and Director Management Company Capital International Director, President and Research, Inc. Research Director Capital Research and Formerly, Director Management Company Capital Guardian Research Formerly, Director Company and President Michael D. Beckman Capital Guardian Trust Director Director, Senior Vice Company of Nevada President The Capital Group Companies Director Capital Guardian Research Formerly, Treasurer Company Capital Guardian (Canada), Inc. Formerly, Treasurer Capital International Asset Director and President Management, Inc. Capital International Financial Director, President, Treasurer Services, Inc. Capital International Asset Chief Financial Officer, Management (Canada), Inc. Secretary Capital Group Senior Vice President International, Inc.
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NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- Michael A. Burik Capital International, Inc. Senior Vice President and Senior Vice President, Senior Counsel Senior Counsel Capital International Vice President, Secretary Financial Services, Inc. Elizabeth A. Burns -- -- Senior Vice President Roberta A. Conroy Capital International, Inc. Senior Vice President, Senior Senior Vice President Counsel and Formerly, and Senior Counsel Secretary Capital Group Secretary International, Inc. Scott M. Duncan -- -- Senior Vice President John B. Emerson Capital Guardian Trust Director, President, Formerly, Senior Vice President Company, a Nevada Executive Vice President Corporation Michael R. Ericksen Capital International Limited Director, President, Formerly, Director, Senior Vice Senior Vice President President Michael A. Felix Capital Guardian (Canada), Inc. Senior Vice President, Senior Vice President, Treasurer Treasurer Capital International, Inc. Director, Senior Vice President David I. Fisher Capital International, Inc. Director, Vice Chairman Director, Chairman Capital International Limited Director, Vice Chairman Capital International K.K. Formerly, Director, Vice Chairman Capital Group International, Inc. Director, Chairman Capital International Limited Director, President (Bermuda) The Capital Group Director Companies, Inc. Capital International Director Research, Inc. Capital Group Research, Inc. Director Capital Research and Formerly, Director Management Company Clive N. Gershon -- -- Senior Vice President Richard N. Havas Capital International, Inc. Senior Vice President Senior Vice President Capital International Limited Senior Vice President
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NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- Capital International Senior Vice President Research, Inc. Capital Guardian (Canada), Inc. Director, Senior Vice President Capital International Asset Director Management (Canada), Inc. Frederick M. Huges, Jr. -- -- Senior Vice President Mary M. Humphrey -- -- Senior Vice President William H. Hurt Capital Guardian Trust Director, Chairman Senior Vice President Company, a Nevada Corporation Capital Strategy Research, Inc. Director, Chairman Peter C. Kelly Capital International, Inc. Director, Senior Vice President, Senior Vice President, Senior Counsel, Secretary Senior Counsel Charles A. King -- -- Senior Vice President Robert G. Kirby The Capital Group Senior Partner Chairman Emeritus Companies, Inc. Lianne K. Koeberle -- -- Senior Vice President Nancy J. Kyle Capital Guardian (Canada), Inc. Director and President Director, Vice Chair Karin L. Larson The Capital Group Formerly, Director Director Companies, Inc. Capital Group Research, Inc. Director, Chairperson, and President Capital Guardian Formerly, Director, Chairperson Research Company Capital International Director, Chairperson Research, Inc. James R. Mulally Capital International Limited Senior Vice President Director, Senior Vice President Shelby Notkin Capital Guardian Trust Director Director, Senior Vice Company, a Nevada President Corporation Michael E. Nyeholt -- -- Senior Vice President Mary M. O'Hern Capital International Limited Senior Vice President Senior Vice President Capital International, Inc. Senior Vice President
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NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- Jeffrey C. Paster -- -- Senior Vice President Robert V. Pennigton -- -- Senior Vice President Jason Pilalas Capital International Senior Vice President Director Research, Inc. Paula B. Pretlow -- -- Senior Vice President George L. Romine, Jr. -- -- Senior Vice President Robert Ronus Capital Guardian (Canada), Inc. Director, Chairman Director, Vice Chairman The Capital Group Director, Non-Executive Companies, Inc. Chairman Capital Group Director International, Inc. Capital International, Inc. Senior Vice President Capital International Limited Senior Vice President Capital International S.A. Senior Vice President Theodore R. Samuels Capital Trust Company, a Director Director, Senior Nevada Corporation Vice President Lionel A. Sauvage Capital International, Inc. Senior Vice President Director, Senior Vice President Capital International Director Research, Inc. John H. Seiter The Capital Group Companies Director Director, Executive Vice President Karen L. Sexton -- -- Senior Vice President Lawrence R. Solomon Capital International Senior Vice President Director, Vice President Research, Inc. Capital Management Director Services Inc. Eugene P. Stein The Capital Group Director Director, Vice Chairman Companies Inc. Andrew P. Stenovec -- -- Senior Vice President Jill A. Sumiyasu -- -- Senior Vice President
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NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- Philip A. Swan -- -- Senior Vice President Shaw B. Wagener The Capital Group Companies, Director Director Inc. Capital International Director Management Company, S.A. Capital International, Inc. Director, Chairman, Formerly, President Capital Group Director, Senior Vice President International, Inc. Eugene M. Waldron -- -- Senior Vice President Alan J. Wilson Capital International Director, Executive Vice Director and Vice President Research, Inc. President, Research Director, U.S., Formerly, Senior Vice President
CITIGROUP ASSET MANAGEMENT LIMITED Citigroup Asset Management Limited ("Citigroup") is a sub-adviser for the Registrant's Emerging Markets Equity Fund. The principal business address of Citigroup is Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB, United Kingdom. Citigroup is a registered investment adviser under the Advisers Act.
NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- Linda Davies -- -- General Counsel, European Management Committee Member Richard McNamara -- -- Director, Finance Officer and European Management Committee Member Michael McElroy, -- -- Director, Head of Equity Investment and European Management Committee Member May Steele -- -- Head of Human Resources, European Management Committee Member Christopher Parker -- -- Director, Head of Non-US Fixed Income and European Management Committee Member
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NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- John Nestor Citigroup Asset Management Business Head Director and Chief Europe Executive Officer Margaret Adams, Head of -- -- Operations, European Management Committee Member Charles Neher -- -- Head of Technology, European Management Committee Member Ursula Schliessler -- -- Director, Business Manager and European Management Committee Member Paula Marsh -- -- Compliance Officer, European Management Committee Member
EMERGING MARKETS MANAGEMENT, L.L.C. Emerging Markets Management, L.L.C. ("EMM") is a sub-adviser for the Registrant's Emerging Markets Equity Fund. The principal business address of EMM is 1001 Nineteenth Street North, 17th Floor, Arlington, Virginia 22209-1722. EMM is a registered investment adviser under the Advisers Act.
NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- Antoine W. van Agtmael Emerging Markets Investors Managing Director, Managing Director, President, Corporation President, Chief Investment Chief Investment Officer and Officer and Chairman of the Chairman of the Investment Investment Committee Committee The Emerging Markets Director Strategic Fund The Africa Emerging Director Markets Fund The Emerging Markets Director New Economy Fund PLC Strategic Investment Director Management (SIM) Strategic Investment Management Director International (SIMI) Strategic Investment Partners, Director Inc. (SIP)
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NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- The Washington Opera Member of the Board of Trustees and Co-Chair of the Education Committee The Lab School of Washington Member of the Board of Trustees and the Finance Committee Yale University Member of the University Council and President's Council on International Activities George Washington University Member of the National Advisory Council for the Graduate School of Education & Human Development Paul H. Nitze School of Member of Advisory Advanced International Studies Council at Johns Hopkins University Global Rights Member of the Board of Directors and Treasurer Michael A. Duffy Emerging Markets Investors Managing Director, Managing Director, Corporation Secretary/Treasurer and Secretary/Treasurer and member of the Investment member of the Investment Committee Committee The Latin America Small Director Capitalization Fund Strategic Investment Managing Director, Management (SIM) Secretary/Treasurer and member of the Investment Committee Strategic Investment Managing Director, Management International Secretary/Treasurer and (SIMI) member of the Investment Committee Strategic Investment Managing Director, Partners, Inc. (SIP) Secretary/Treasurer and member of the Investment Committee China Medical Board Trustee and Treasurer Felicia J. Morrow Emerging Markets Investors Managing Director and Managing Director, Lead Corporation member of the Investment Portfolio Manager, Chief Committee Operating Officer and member of the Investment Committee
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NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- Hilda M. Ochoa-Brillembourg Emerging Markets Investors Director Director Corporation Strategic Investment President, Director and a Management (SIM) member of the Investment Committee Strategic Investment President, Director and a Management International member of the Investment (SIMI) Committee Strategic Investment President, Director and a Partners, Inc. (SIP) member of the Investment Committee Youth Orchestra of the Founding Chairman Americas National Symphony Trustee Orchestra The Washington Opera Trustee and Member of the Executive Committee Rockefeller Center for Latin Member of the Advisory American Studies at Harvard Committee University Carnegie Endowment for Vice Chairman of the International Peace Group of Fifty (G-50) Rockefeller Family Fund Member of the Investment and Finance Committees General Mills Member of the Board of Directors The World Bank/IMF Credit Member of the Board of Union Directors Harvard Management Company Member of the Board of Directors Capital Children's Museum Trustee Hauser Center at Harvard Member of the Advisory University Committee Harvard College Member of Board of Overseers' Committee on University Resources Mary C. Choksi Emerging Markets Investors Managing Director, Managing Director and Corporation Director Director The Emerging Markets Director Country Series Fund: The Value Fifty Portfolio Emerging Markets South Director Asian Fund
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NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- Strategic Investment Managing Director, Management (SIM) Director and member of the Investment Committee Strategic Investment Managing Director, Management International Director and member of the (SIMI) Investment Committee Strategic Investment Managing Director, Partners, Inc. (SIP) Director and member of the Investment Committee H.J. Heinz Company Member of the Board of Directors and Chair of the Public Issues Committee St. Albans School Member of the Board of Directors The National Museum of Trustee and Chair of the Women in the Arts Finance Committee Pyford International plc Member of the Board of Directors Carol A. Grefenstette Emerging Markets Investors Managing Director and Managing Director Corporation Director Strategic Investment Managing Director Management (SIM) Strategic Investment Managing Director Management International (SIMI) Strategic Investment Managing Director and Partners, Inc. (SIP) Director Georgetown University Member of the Board of McDonough School of Advisors Business Archdiocese of Washington Member of the Finance Council George M. Alvarez-Correa Emerging Markets Investors Managing Director and Director Corporation Director The Emerging Markets Director Country Series: The Value Fifty Portfolio Strategic Investment Managing Director and Management (SIM) member of the Investment Committee Strategic Investment Managing Director and Management International member of the Investment (SIMI) Committee
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NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- Strategic Investment Managing Director, Partners, Inc. (SIP) Director and member of the Investment Committee Maduro Holding N.V., Chairman of the Board Curacao, Netherland Antilles
FISCHER FRANCIS TREES & WATTS, INC. AND ITS AFFILIATES Fischer Francis Trees & Watts, Inc. and three of its affiliates, Fischer Francis Trees & Watts, a corporate partnership organized under the laws of the United Kingdom, Fischer Francis Trees & Watts (Singapore) Pte Ltd, a Singapore corporation, and Fischer Francis Trees & Watts Kabushiki Kaisha, a Japanese corporation (collectively referred to as "FFTW") is the sub-adviser for the Registrant's International Fixed Income Fund. The principal business address of FFTW is 200 Park Avenue, 46th Floor, New York, New York 10166. FFTW is a registered investment adviser under the Advisers Act. SUB-ADVISER--FISCHER FRANCIS TREES & WATTS, INC.
NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- Liaquat Ahamed Charter Atlantic Corporation Chief Executive Officer and Chief Executive Officer, Director Director Fischer Francis Trees & Watts Chief Executive Officer Stephen Casper Charter Atlantic Corporation Chief Operating Officer, Director Chief Operating Officer, FFTW Diversified Alpha Director Director Fund Ltd FFTW Funds Inc. President, Chief Executive Officer and Director FFTW Funds Selection Director FFTW Funds Selection II Director FFTW Global Debt Fund plc Director FFTW Mortgage Total Director Return Fund plc Fischer Francis Trees & Watts Chief Operating Officer Fischer Francis Trees & Watts Director (Singapore) Pte Ltd The Depository Trust & Clearing Director Corporation The Depository Trust Company Director The Emerging Markets Director Clearing Corporation The Fixed Income Clearing Director Corporation The National Securities Director Clearing Corporation
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NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- Stephen Constantine Charter Atlantic Corporation Director Director BrokerTec Futures Director Exchange LLC O. John Olcay Charter Atlantic Corporation Director Director FFTW Funds Inc. Chairman of the Board of Directors FFTW Funds Selection Chairman of the Board of Directors FFTW Funds Selection II Chairman of the Board of Directors FFTW Global Debt Fund plc Chairman of the Board of Directors FFTW Mortgage Total Chairman of the Board of Return Fund plc Directors Fischer Francis Trees & Watts Chairman of the Board of (Singapore) Pte Ltd Directors Fischer Francis Trees & Chairman of the Board of Watts KK Directors Vivien Levy-Garboua BNP Paribas (Luxembourg) S.A. President Director BNP Paribas (Suisse) S.A. Administrateur BNP Paribas (UK) President BNP Paribas Asset Member of the Executive Management Group Committee and Head of Asset Management Services BNP Paribas Immobilier Representant Cimoxi, Administrateur BNP Paribas Private Bank, Paris President BNP Paribas Securities Services Vice President du Conseil de Surveillance CARDIF Representant permanent BNP Paribas Charter Atlantic Corporation Director COFICEM Membre du Conseil d'Administration KLEPIERRE President du Conseil de Surveillance Meunier Promotion President du Conseil de Surveillance NATIO VIE Vice President du Conseil de Surveillance OGDI President du Conseil d'Administration Presses Universitaries de France Membre du Conseil de Surveillance
C-20
NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- SEGECE Representant permanent BNP Paribas U.E.B (Switzerland) Geneve President Gilles de Vaugrigneuse Charter Atlantic Corporation Director Director BNP Paribas Asset Chairman and Chief Executive Management Group Officer BNP ACTION PEA EURO Administrateur NATO VIE Administrateur BNP Paribas Luxembourg Administrateur PARVEST Administrateur Stephen C. Francis Charter Atlantic Corporation Vice Chairman of the Board of Vice Chairman of the Directors Board of Directors Fischer Francis Trees & Watts Managing Director VaxGen Inc. Director Simon Hard Charter Atlantic Corporation Director Director Fischer Francis Trees & Watts KK Director Robin S. Meister Charter Atlantic Corporation Chief Legal and Risk Officer, Chief Legal and Risk Secretary of the Board of Officer, Secretary of the Directors Board of Directors Fischer Francis Trees & Watts Chief Risk Officer Fischer Francis Trees & Watts KK Chief Risk Officer Fischer Francis Trees & Watts Chief Risk Officer and Director (Singapore) Pte Ltd FFTW Diversified Alpha Assistant Secretary Fund Ltd. FFTW Funds Inc. Chief Legal Officer and Secretary John H. Watts Charter Atlantic Corporation Chairman of the Board of Chairman of the Board of Directors Directors BNP Paribas Asset Management Director Brooklyn Bridge Development Director Corporation The League of Conservation Director Voters Robert College of Istanbul Director Cathleen McQuillen Charter Atlantic Corporation Chief Financial Officer Chief Financial Officer Fischer Francis Trees & Watts Chief Financial Officer Fischer Francis Trees & Watts KK Statutory Auditor Stewart Russell Charter Atlantic Corporation Co-Chief Investment Officer Co-Chief Investment Fischer Francis Trees & Watts Co-Chief Investment Officer Officer
C-21
NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- Richard Williams Charter Atlantic Corporation Co-Chief Investment Officer Co-Chief Investment Fischer Francis Trees & Watts Co-Chief Investment Officer Officer
SUB-ADVISER: FISCHER FRANCIS TREES & WATTS
NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- Liaquat Ahamed Charter Atlantic Corporation Chief Executive Officer and Chief Executive Officer Director Fischer Francis Trees & Watts Inc. Chief Executive Officer, Director Stephen Casper Charter Atlantic Corporation Chief Operating Officer, Director Chief Operating Officer FFTW Funds Inc. President, Chief Executive Officer and Director FFTW Diversified Alpha Fund Ltd Director FFTW Funds Selection Director FFTW Funds Selection II Director FFTW Global Debt Fund plc Director FFTW Mortgage Total Return Director Fund plc Fischer Francis Trees & Watts Inc. Chief Operating Officer, Director Fischer Francis Trees & Watts Director (Singapore) Pte Ltd The Depository Trust & Clearing Director Corporation The Depository Trust Company Director The Emerging Markets Clearing Director Corporation The Fixed Income Clearing Director Corporation The National Securities Clearing Director Corporation Stephen C. Francis Charter Atlantic Corporation Vice Chairman of the Board Managing Director of Directors Fischer Francis Trees & Watts Inc. Vice Chairman of the Board of Directors VaxGen Inc. Director Robin S. Meister Charter Atlantic Corporation Chief Legal and Risk Officer, Chief Risk Officer Secretary of the Board of Directors Fischer Francis Trees & Watts Inc. Chief Risk Officer, Secretary of the Board of Directors Fischer Francis Trees & Watts KK Chief Risk Officer
C-22
NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- Fischer Francis Trees & Watts Chief Risk Officer and Director (Singapore) Pte Ltd FFTW Diversified Alpha Fund Ltd. Assistant Secretary FFTW Funds Inc. Chief Legal Officer, Secretary Cathleen McQuillen Charter Atlantic Corporation Chief Financial Officer Chief Financial Officer Fischer Francis Trees & Watts Inc. Chief Financial Officer Fischer Francis Trees & Watts KK Statutory Auditor Stewart Russell Charter Atlantic Corporation Co-Chief Investment Officer Co-Chief Investment Officer Fischer Francis Trees & Watts Inc. Co-Chief Investment Officer Richard Williams Charter Atlantic Corporation Co-Chief Investment Officer Co-Chief Investment Officer Fischer Francis Trees & Watts Inc. Co-Chief Investment Officer
SUB-ADVISER -- FISCHER FRANCIS TREES & WATTS (SINGAPORE) PTE LTD
NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- Stephen P. Casper Charter Atlantic Corporation Chief Operating Officer, Director Director FFTW Diversified Alpha Fund Ltd Director FFTW Funds Inc. President, Chief Executive Officer, Director FFTW Funds Selection Director FFTW Funds Selection II Director FFTW Global Debt Fund plc Director FFTW Mortgage Total Return Director Fund plc Fischer Francis Trees & Watts Chief Operating Officer Fischer Francis Trees & Watts Inc. Chief Operating Officer, Director The Depository Trust & Clearing Director Corporation The Depository Trust Company Director The Emerging Markets Clearing Director Corporation The Fixed Income Clearing Director Corporation The National Securities Clearing Director Corporation Roy Wei-Chien Diao -- -- Director Robin S. Meister Charter Atlantic Corporation Chief Legal and Risk Officer, Chief Risk Officer, Director Secretary of the Board of Directors Fischer Francis Trees & Watts Chief Risk Officer
C-23
NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- Fischer Francis Trees & Watts Inc. Chief Legal and Risk Officer, Secretary of the Board of Directors Fischer Francis Trees & Watts KK Chief Risk Officer FFTW Diversified Alpha Fund Ltd. Assistant Secretary FFTW Funds Inc. Chief Legal Officer, Secretary O. John Olcay Charter Atlantic Corporation Director Chairman of the Board of FFTW Funds Inc. Chairman of the Board of Directors Directors FFTW Funds Selection Chairman of the Board of Directors FFTW Funds Selection II Chairman of the Board of Directors FFTW Global Debt Fund plc Chairman of the Board of Directors FFTW Mortgage Total Return Chairman of the Board of Fund plc Directors Fischer Francis Trees & Watts Inc. Director Fischer Francis Trees & Watts KK Chairman of the Board of Directors
SUB-ADVISER -- FISCHER FRANCIS TREES & WATTS KABUSHIKI KAISHA
NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- Simon Hard Charter Atlantic Corporation Director Director Fischer Francis Trees & Watts Inc. Director Hidekazu Higuchi -- -- Director Ken Katayama -- -- President, Director Cathleen McQuillen Charter Atlantic Corporation Chief Financial Officer Statutory Auditor Fischer Francis Trees & Watts Chief Financial Officer Fischer Francis Trees & Watts Inc. Chief Financial Officer Robin S. Meister Charter Atlantic Corporation Chief Legal and Risk Officer, Chief Risk Officer Secretary of the Board of Directors Fischer Francis Trees & Watts Chief Risk Officer Fischer Francis Trees & Watts Inc. Chief Legal and Risk Officer, Secretary of the Board of Directors Fischer Francis Trees & Watts Chief Risk Officer, Director (Singapore) Pte Ltd
C-24
NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- FFTW Diversified Alpha Fund Ltd. Assistant Secretary FFTW Funds Inc. Chief Legal Officer, Secretary O. John Olcay Charter Atlantic Corporation Director Chairman of the Board of FFTW Funds Inc. Chairman of the Board of Directors Directors FFTW Funds Selection Chairman of the Board of Directors FFTW Funds Selection II Chairman of the Board of Directors FFTW Global Debt Fund plc Chairman of the Board of Directors FFTW Mortgage Total Return Chairman of the Board of Fund plc Directors Fischer Francis Trees & Watts Inc. Director Fischer Francis Trees & Watts Chairman of the Board of (Singapore) Pte Ltd. Directors
FISHER INVESTMENTS, INC. Fisher Investments, Inc. ("Fisher") is a sub-adviser for the Registrant's International Equity Fund. The principal business address of Fisher is 13100 Skyline Boulevard, Woodside, California 94062. Fisher is a registered investment adviser under the Advisers Act.
NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- Kenneth L. Fisher, Purisima Securities, LLC Majority Shareholder Chief Executive Officer, Purisima Funds, LLC President, Trustee Chief Investment Officer, Fisher Investments Europe Director, Shareholder Investment Policy Limited Committee member Jeffery L. Silk -- -- President, Chief Operating Officer, Investment Policy Committee member Andrew S. Teufel Purisima Securities, LLC President, Treasurer Assistant President, Director of Research, Investment Policy Committee member Deglin F. Kenealy Purisima Securities, LLC Registered Principal Formerly Executive Vice President Private Client Group (through 12-31-03), currently Executive Vice President Corporate Acquisitions
C-25
NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- Sherrilyn A. Fisher Purisima Funds, LLC Secretary Chief Financial Officer Fisher Investments Europe Director, Shareholder Corporate Secretary Limited Steven R. Triplett Purisima Securities, LLC Registered Principal Assistant President
MCKINLEY CAPITAL MANAGEMENT, INC. McKinley Capital Management, Inc. ("McKinley Capital") is a sub-adviser for the Registrant's International Equity Fund. The principal business address of McKinley Capital is 3301 C Street, Suite 500, Anchorage, AK 99503. McKinley Capital is a registered investment adviser under the Advisers Act.
NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- Robert B. Gillam FAS Alaska, Inc. Officer, Director President, CIO McKinley Offshore Director Management, Ltd. McKinley Partners LLC Manager Diane M. Wilke McKinley Offshore Director Executive Vice President, Management, Ltd. COO FAS Alaska, Inc. Officer, Director B. Thomas Willison -- -- Director Tamara L. Leitis -- -- Assistant Vice President, HR Manager Gregory O'Keefe -- -- Controller
MORGAN STANLEY INVESTMENT MANAGEMENT INC. AND MORGAN STANLEY INVESTMENT MANAGEMENT LIMITED Morgan Stanley Investment Management Inc. ("MSIM Inc.") is a sub-adviser for the Registrant's International Equity Fund. MSIM Inc. delegates certain investment advisory responsibilities to its affiliate, Morgan Stanley Investment Management Limited ("MSIM Limited"). The principal business address of MSIM Inc. is 1221 Avenue of the Americas, New York, NY 10020. The principal business address of MSIM Limited is 25 Cabot Square, Canary Wharf, London E14 4QA, United Kingdom. MSIM Inc. and MSIM Limited are investment advisers registered under the Advisers Act. SUB-ADVISER: MORGAN STANLEY INVESTMENT MANAGEMENT INC.
NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- Mitchell M. Merin Morgan Stanley Investment President, Chief Executive President and Advisors Inc. Officer and Director Chief Operating Officer Morgan Stanley Distributors Inc. Chairman and Director Morgan Stanley Trust Chairman and Director Morgan Stanley Services President, Chief Executive Company Inc. Officer and Director Morgan Stanley Institutional Funds President Morgan Stanley Retail Funds President Various Morgan Stanley Director Subsidiaries
C-26
NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- Van Kampen Closed-End Funds Trustee and President Van Kampen Open-End Funds Trustee and President Joseph J. McAlinden Morgan Stanley Investment Managing Director and Chief Investment Officer Advisors Inc. Chief Investment Officer and Managing Director Morgan Stanley Institutional Funds Vice President Morgan Stanley Retail Funds Vice President Morgan Stanley Trust Director Van Kampen Funds Chief Investment Officer Rajesh Kumar Gupta Morgan Stanley Investment Managing Director and Chief Administrative Advisors Inc. Chief Administrative Officer -- Investments and Officer -- Investments Managing Director Ronald E. Robison Morgan Stanley Investment Managing Director, Chief Managing Director Advisors Inc. Administrative Officer and and Chief Operations Officer Director Morgan Stanley Services Managing Director, Chief Company Inc. Administrative Officer and Director Morgan Stanley Trust Chief Executive Officer and Director Morgan Stanley & Co. Incorporated Managing Director Morgan Stanley Managing Director Morgan Stanley Distributors Inc. Managing Director and Director Morgan Stanley Retail Funds Executive Vice President and Principal Executive Officer Morgan Stanley Institutional Funds Executive Vice President Principal Executive Officer, and previously President and Director Barry Fink Morgan Stanley Investment Managing Director, Secretary, General Counsel and Advisors Inc. Director and previously Managing Director General Counsel Morgan Stanley Services Managing Director, Secretary, Company Inc. Director and previously General Counsel Morgan Stanley Retail Funds Vice President, General Counsel and previously Secretary Morgan Stanley DW Inc. Assistant Secretary Morgan Stanley Distributors Inc. Managing Director, Secretary and Director Jeffrey Hiller -- -- Managing Director and Global Director of Compliance
C-27
NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- Alexander C. Frank Morgan Stanley Global Treasurer Treasurer and Managing Director
SUB-ADVISER: MORGAN STANLEY INVESTMENT LIMITED
NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- Robert Andrew Sargent -- -- Director Jeremy Goulding Lodwick -- -- Director Peter Dominic Caldecott -- -- Director James David Germany -- -- Director Stephano Russo -- -- Director Michael John Reinbold -- -- Director Richard Scott Rosenthal -- -- Secretary
SALOMON BROTHERS ASSET MANAGEMENT INC Salomon Brothers Asset Management Inc ("SBAM") is a sub-adviser for the Registrant's Emerging Markets Debt Fund. The principal address of SBAM is 399 Park Avenue, 4th Floor, New York, New York 10022. SBAM is an investment adviser registered under the Advisers Act.
NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- John B. Cunningham -- -- Senior Portfolio Manager, Managing Director Virgil H. Cumming Citigroup Global Markets Inc. Chief Investment Officer Managing Director Michael A. Kagan Salomon Brothers Inc. Vice President Senior Portfolio Manager, Managing Director Kevin Kennedy -- -- Senior Portfolio Manager, Managing Director Ross S. Margolies -- -- Senior Portfolio Manager, Managing Director Evan Merberg Citigroup Global Markets Inc. Managing Director Chief Admin. Officer, Citigroup Asset Management Chief Administrative Officer Managing Director Michael Fred Rosenbaum Citigroup Asset Management General Counsel Chief Legal Officer, Managing Director Citigroup Global Markets Inc. Managing Director Jeffrey S. Scott -- -- Chief Compliance Officer, Director David A. Torchia -- -- Senior Portfolio Manager, Managing Director Peter J. Wilby Chief Investment Officer- -- -- North American Fixed Income, Managing Director
C-28
NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- -----------------------------------
SEI INVESTMENTS MANAGEMENT CORPORATION SEI Investments Management Corporation ("SIMC") is the investment adviser for each of the Funds. The principal address of SIMC is 1 Freedom Valley Drive, Oaks, Pennsylvania 19456. SIMC is an investment adviser registered under the Advisers Act.
NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- Alfred P. West, Jr. SEI Investments Company Director, Chairman & CEO Chairman, CEO, Director SEI Funds, Inc. CEO, Chairman of the Board of Directors SEI Investments Global Chairman of the Board, CEO (Cayman), Limited SEI Global Capital Investments, Director, CEO, Chairman of the Inc. Board LSV Asset Management Management Committee SEI Global Holdings (Cayman) Chairman of the Board, CEO Inc. SEI Investments De Mexico Director SEI Asset Korea Director SEI Venture Capital, Inc. Director, Chairman of the Board, CEO SEI Investments Management Director, Chairman, CEO Corporation II SEI Inc. (Canada) Director Edward D. Loughlin SEI Investments Company Executive Vice President, Director, Executive President--Asset Management Vice President, Division Chief Investment Officer SEI Investments Distribution Co. Director, Executive Vice President SEI Trust Company Director SEI Funds, Inc. Executive Vice President SEI Advanced Capital Director, President Management, Inc. SEI Capital Limited (Canada) Director SEI Investments Global Executive Vice President Funds Services SEI Investments (France) Board of Directors SEI Investments Management Director, Executive Vice President Corporation II SEI Investments Fund Management Chief Executive Officer SEI Investments Canada Company Director SEI Investments Management Manager Corporation Delaware, L.L.C.
C-29
NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- Carl A. Guarino SEI Investments Company Executive Vice President Director, Executive SEI Investments Distribution Director, Executive Vice President Vice President Company SEI Global Investments Corp. Senior Vice President SEI Global Holdings (Cayman) Director Inc. SEI Investments De Mexico Director SEI Investments (Europe) Ltd. Director SEI Investments Director (South Africa) Limited SEI Investments (France) Board of Directors SEI Venture Capital, Inc. Executive Vice President SEI Investments--Unit Trust Director Management (UK) Limited LSV Asset Management Management Committee SEI Investments Management Director, Executive Vice President Corporation II SEI Investments Global, Limited Director SEI Insurance Group, Inc. Director Jack May SEI Investments Distribution Co. Vice President Vice President SEI Investments Management Senior Vice President Corporation II James V. Morris -- -- Vice President Steve Onofrio -- -- Vice President Kevin P. Robins SEI Investments Company Senior Vice President Senior Vice President SEI Investments Distribution Co. Senior Vice President SEI Investments Global Director (Cayman), Limited SEI Trust Company Director SEI Insurance Group, Inc. Director, President SEI Global Holdings Director (Cayman) Inc. SEI Venture Capital, Inc. Vice President SEI Private Trust Company Director, Senior Vice President SEI Family Office Services, LLC Director, Vice President SEI Giving Fund Director, President SEI Investments Management Director, Executive Vice Corporation II President -- Control Person LSV Asset Management Management Committee
C-30
NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- Timothy D. Barto SEI Investments Company Vice President, Assistant General Counsel, Secretary Vice President SEI Investments Distribution Co. Assistant Secretary SEI Investments, Inc. Vice President, Assistant Secretary SEI Ventures, Inc. General Counsel, Vice President SEI Investments Developments, General Counsel, Vice President Inc. SEI Insurance Group, Inc. Assistant Secretary SEI Funds, Inc. Vice President, Assistant Secretary SEI Global Investments Corp. Vice President, Assistant Secretary SEI Advanced Capital Vice President, Assistant Management, Inc. Secretary SEI Global Capital Investments, Vice President, Assistant Inc. Secretary SEI Primus Holding Corp. Vice President, Assistant Secretary SEI Investments Fund Management General Counsel, Vice President SEI Venture Capital, Inc. Vice President, Assistant Secretary SEI Investments Global Funds General Counsel, Vice President Services SEI Family Office Services, LLC Vice President, Assistant Secretary SEI Investments Management General Counsel, Vice President Corporation II Robert Crudup SEI Investments Distribution Co. Senior Vice President Director, Executive SEI Investments Global Funds Vice President Vice President Services SEI Investments Fund Vice President Management SEI Investments Company Executive Vice President Richard A. Deak SEI Investments Company Vice President, Assistant Vice President, Assistant Secretary Secretary SEI Investments Distribution Assistant Secretary Co. SEI Investments, Inc. Vice President, Assistant Secretary SEI Ventures, Inc. Vice President, Assistant Secretary SEI Investments Developments, Vice President, Assistant Inc. Secretary
C-31
NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- SEI Funds, Inc. Vice President, Assistant Secretary SEI Global Investments Corp. Vice President, Assistant Secretary SEI Advanced Capital Vice President, Assistant Management, Inc. Secretary SEI Global Capital Investments, Vice President, Assistant Inc. Secretary SEI Primus Holding Corp. Vice President, Assistant Secretary SEI Investments Global Funds Vice President, Assistant Services Secretary SEI Investments Management Vice President, Assistant Corporation II Secretary SEI Investments Fund Vice President, Assistant Management Secretary SEI Venture Capital, Inc. Vice President, Assistant Secretary SEI Family Office Services, LLC Vice President, Assistant Secretary Lydia A. Gavalis SEI Investments Company Vice President, Assistant Assistant Secretary Secretary SEI Investments Distribution Assistant Secretary Co. SEI Investments, Inc. Vice President, Assistant Secretary SEI Investments Management Vice President Corporation Delaware, L.L.C. SEI Ventures, Inc. Assistant Secretary SEI Investments Developments, Assistant Secretary Inc. SEI Funds, Inc. Vice President, Assistant Secretary SEI Global Investments Corp. Vice President, Assistant Secretary SEI Advanced Capital Vice President, Assistant Management, Inc. Secretary SEI Global Capital Investments, Vice President, Assistant Inc. Secretary SEI Primus Holding Corp. Vice President, Assistant Secretary SEI Family Office Services, LLC Vice President, Assistant Secretary SEI Investments Global Funds Assistant Secretary Services
C-32
NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- SEI Investments Fund Assistant Secretary Management SEI Investments Management Assistant Secretary Corporation II SEI Venture Capital, Inc. Vice President, Assistant Secretary Greg Gettinger SEI Investments Company Vice President Vice President SEI Investments Distribution Vice President Co. SEI Trust Company Vice President SEI Investments, Inc. Vice President SEI Ventures, Inc. Vice President SEI Investments Developments, Vice President Inc. SEI Realty Capital Corporation Vice President, Secretary SEI Funds, Inc. Vice President SEI Global Investments Corp. Vice President SEI Advanced Capital Vice President Management, Inc. SEI Global Capital Investments, Vice President Inc. SEI Primus Holding Corp. Vice President SEI Investments Global Vice President Funds Services SEI Investments Fund Vice President Management SEI Venture Capital, Inc. Vice President SEI Investments Management Vice President Corporation II SEI Investments Management Vice President Corporation Delaware, L.L.C. Kathy Heilig SEI Inc. (Canada) Vice President, Treasurer Vice President, Treasurer SEI Investments Company Vice President, Treasurer, Chief Accounting Officer, Controller SEI Ventures, Inc. Vice President, Treasurer SEI Insurance Group, Inc. Vice President, Treasurer SEI Realty Capital Corporation Vice President, Treasurer SEI Global Investments Corp. Director, Vice President, Treasurer SEI Advanced Capital Director, Vice President, Management, Inc. Treasurer SEI Investments Global (Cayman), Vice President, Treasurer Limited
C-33
NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- SEI Primus Holding Corp. Director, Vice President, Treasurer SEI Global Capital Investments, Director, Vice President, Inc. Treasurer SEI Investments Global Funds Vice President, Treasurer Services SEI Investments Fund Vice President, Treasurer Management SEI Global Holdings (Cayman) Vice President, Treasurer, Inc. Assistant Secretary SEI Venture Capital, Inc. Director, Vice President, Treasurer SEI Funds, Inc. Director, Vice President, Treasurer SEI Family Office Services, LLC Vice President, Treasurer SEI Investments Management Vice President, Treasurer Corporation II SEI Investments Management Manager, Vice President, Corporation Delaware, L.L.C. Treasurer SEI Investments, Inc. Director, Vice President, Treasurer SEI Investments Developments, Director, Vice President, Inc. Treasurer Carolyn McLaurin -- -- Vice President Kathryn L. Stanton -- -- Vice President Raymond B. Webster SEI Investment Management Vice President Vice President Corporation II Lori L. White SEI Investments Company Vice President, Assistant Assistant Secretary Secretary SEI Investments Assistant Secretary Distribution Co. SEI Investments, Inc. Vice President, Assistant Secretary SEI Venture Capital, Inc. Vice President, Assistant Secretary SEI Investments Management Assistant Secretary Corporation II SEI Funds, Inc. Vice President, Assistant Secretary SEI Global Investments Corp. Vice President, Assistant Secretary
C-34
NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- SEI Advanced Capital Vice President, Assistant Management, Inc. Secretary SEI Global Capital Vice President, Assistant Investments, Inc. Secretary SEI Primus Holding Corp. Vice President, Assistant Secretary SEI Investments Global Funds Assistant Secretary Services SEI Investments Fund Assistant Secretary Management Scott W. Dellorfano SEI Investments Distribution Co. Vice President Vice President SEI Investments Management Vice President Corporation II William E. Zitelli, Jr. SEI Investments Company Vice President, Assistant Assistant Secretary Secretary SEI Investments Distribution Co. Assistant Secretary SEI Investments, Inc. Vice President, Assistant Secretary SEI Insurance Group, Inc. Assistant Secretary SEI Funds, Inc. Vice President, Assistant Secretary SEI Global Investments Corp. Vice President, Assistant Secretary SEI Advanced Capital Vice President, Assistant Management, Inc. Secretary SEI Primus Holding Corp. Vice President, Assistant Secretary SEI Global Capital Investments, Vice President, Assistant Inc. Secretary SEI Investments Global Funds Assistant Secretary Services SEI Investments Fund Assistant Secretary Management John C. Munch SEI Investments Company Vice President, Assistant Assistant Secretary Secretary SEI Investments Distribution Co. General Counsel, Vice President SEI Investments, Inc. Vice President, Assistant Secretary SEI Ventures, Inc. Assistant Secretary SEI Investments Developments, Assistant Secretary Inc. SEI Insurance Group, Inc. General Counsel, Vice President
C-35
NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- SEI Funds, Inc. Vice President, Assistant Secretary SEI Global Investments Corp. Vice President, Assistant Secretary SEI Advanced Capital Vice President, Assistant Management, Inc. Secretary SEI Global Capital Investments, Vice President, Assistant Inc. Secretary SEI Primus Holding Corp. Vice President, Assistant Secretary SEI Investments Global Funds Assistant Secretary Services SEI Investments Fund Assistant Secretary Management SEI Venture Capital, Inc. Vice President, Assistant Secretary SEI Investments Management Assistant Secretary Corporation II SEI Inc. (Canada) General Counsel, Secretary David Campbell -- -- Vice President Lori Heinel -- -- Vice President Rosanne Miller SEI Investments Company Vice President, Assistant Assistant Secretary Secretary Sofia Rosala -- -- Compliance Officer, Assistant Secretary Jim Combs -- -- Vice President Michael Cagina -- -- Vice President Paul Klauder -- -- Vice President Alison Saunders -- -- Vice President Brandon Sharrett -- -- Vice President
C-36 ITEM 27. PRINCIPAL UNDERWRITERS: (a) Furnish the name of each investment company (other than the Registrant) for which each principal underwriter currently distributing the securities of the Registrant also acts as a principal underwriter, distributor or investment adviser. Registrant's distributor, SEI Investments Distribution Co. (the "Distributor"), acts as distributor for: SEI Daily Income Trust July 15, 1982 SEI Liquid Asset Trust November 29, 1982 SEI Tax Exempt Trust December 3, 1982 SEI Index Funds July 10, 1985 SEI Institutional Managed Trust January 22, 1987 The Advisors' Inner Circle Fund November 14, 1991 STI Classic Funds May 29, 1992 The Arbor Fund January 28, 1993 Bishop Street Funds January 27, 1995 STI Classic Variable Trust August 18, 1995 SEI Asset Allocation Trust April 1, 1996 SEI Institutional Investments Trust June 14, 1996 HighMark Funds February 15, 1997 Armada Funds March 8, 1997 Expedition Funds June 9, 1997 Oak Associates Funds February 27, 1998 The Nevis Fund, Inc. June 29, 1998 CNI Charter Funds April 1, 1999 The Armada Advantage Fund May 1, 1999 Amerindo Funds Inc. July 13, 1999 iShares Inc. January 28, 2000 iShares Trust April 25, 2000 Pitcairn Funds August 1, 2000 JohnsonFamily Funds, Inc. November 1, 2000 The MDL Funds January 24, 2001 Causeway Capital Management Trust September 20, 2001
The Distributor provides numerous financial services to investment managers, pension plan sponsors, and bank trust departments. These services include portfolio evaluation, performance measurement and consulting services ("Funds Evaluation") and automated execution, clearing and settlement of securities transactions ("MarketLink"). (b) Furnish the information required by the following table with respect to each director, officer or partner of each principal underwriter named in the answer to Item 20 of Part B. Unless otherwise noted, the business address of each director or officer is Oaks, PA 19456.
POSITION AND OFFICE POSITIONS AND OFFICES NAME WITH UNDERWRITER WITH REGISTRANT - -------------------------------- ----------------------------------- ---------------------------------- William M. Doran Director Trustee Kevin Barr President & Chief Operating Officer -- Maxine Chou Chief Financial Officer & Treasurer --
C-37
NAME AND POSITION WITH INVESTMENT ADVISER NAME OF OTHER COMPANY POSITION WITH OTHER COMPANY - -------------------------------- ---------------------------------- ----------------------------------- John Munch General Counsel & Vice President Vice President & Assistant Secretary Carl A. Guarino Director, Executive Vice President -- Edward D. Loughlin Director, Executive Vice President President, Chief Executive Officer Wayne M. Withrow Director, Executive Vice President Robert Crudup Senior Vice President -- Kevin P. Robins Senior Vice President -- Kenneth Zimmer Senior Vice President -- Timothy D. Barto Assistant Secretary Vice President & Secretary Richard A. Deak Assistant Secretary -- Scott W. Dellorfano Vice President -- Michael Farrell Vice President -- Lydia A. Gavalis Assistant Secretary Vice President & Secretary Greg Gettinger Vice President -- Mark Held Vice President -- Karen LaTourette Compliance Officer & Assistant -- Secretary Jack May Vice President -- Joanne Nelson Vice President -- Maria Rinehart Vice President -- Lori L. White Assistant Secretary -- William E. Zitelli, Jr. Assistant Secretary --
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS: Books or other documents required to be maintained by Section 31(a) of the Investment Company Act of 1940, as amended (the "1940 Act"), and the rules promulgated thereunder, are maintained as follows: (a) With respect to Rules 31a-1(a); 31a-1(b)(1); (2)(a) and (b); (3); (6); (8); (12);and 31a-1(d), the required books and records are maintained at the offices of the Funds' Custodian: State Street Bank and Trust Company 225 Franklin Street Boston, MA 02110 (b)/(c) With respect to Rules 31a-1(a); 31a-1(b)(1), (4); (2)(C) and (D); (4); (5); (6); (8); (9); (10); (11); and 31a-1(f), the required books and records are maintained at the offices of Registrant's Manager: SEI Investments Fund Management Oaks, PA 19456 C-38 (d) With respect to Rules 31a-(b)(5); (6), (9) and (10) and 31a-1(f), the required books and records are maintained at the offices of Registrant's Advisers: SEI Investments Management Corporation Oaks, PA 19456 Alliance Capital Management L.P. 1345 Avenue of the Americas New York, NY 10105 Ashmore Investment Management Limited 20 Bedfordbury London, WC2N 4BL United Kingdom The Boston Company Asset Management One Boston Place Boston, MA 02108 Capital Guardian Trust Company 333 South Hope Street, 55th Floor Los Angeles, CA 90071 Citigroup Asset Management Limited Citigroup Centre Canada Square Canary Wharf, London E14 5LB England Emerging Markets Management, L.L.C. 1001 Nineteenth Street North 17th Floor Arlington, Virginia 22209-1722 Fischer Francis Trees & Watts, Inc. 200 Park Avenue, 46th Floor New York, NY 10166 Fisher Investments, Inc. 13100 Skyline Boulevard Woodside, California 94062 McKinley Capital Management, Inc 3301 C Street Suite 500 Anchorage, Alaska 99503 Morgan Stanley Investment Management Inc. 1221 Avenue of the Americas New York, New York 10020 Morgan Stanley Investment Management Limited 25 Cabot Square Canary Wharf, London E14 4QA United Kingdom Salomon Brothers Asset Management Inc 388 Greenwich Street, 8th Floor New York, New York 10013 C-39 ITEM 29. MANAGEMENT SERVICES: None. ITEM 30. UNDERTAKINGS: None C-40 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, and the Investment Company Act of 1940, as amended, the Registrant certifies that it meets all of the requirements for effectiveness of this Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused this Post-Effective Amendment No. 37 to Registration Statement No. 33-22821 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Oaks, Commonwealth of Pennsylvania on the 28th day of January, 2004. SEI INSTITUTIONAL INTERNATIONAL TRUST BY: /s/ EDWARD D. LOUGHLIN ------------------------------------- Edward D. Loughlin PRESIDENT & CHIEF EXECUTIVE OFFICER Pursuant to the requirements of the Securities Act of 1933, this Amendment to the Registration Statement has been signed below by the following persons in the capacity on the date(s) indicated. * - ---------------------------------------- Trustee January 28, 2004 Rosemarie B. Greco * - ---------------------------------------- Trustee January 28, 2004 William M. Doran * - ---------------------------------------- Trustee January 28, 2004 F. Wendell Gooch * - ---------------------------------------- Trustee January 28, 2004 George J. Sullivan, Jr. * - ---------------------------------------- Trustee January 28, 2004 James M. Storey * - ---------------------------------------- Trustee January 28, 2004 Robert A. Nesher * - ---------------------------------------- Trustee January 28, 2004 Nina Lesavoy /s/ EDWARD D. LOUGHLIN - ---------------------------------------- President & Chief January 28, 2004 Edward D. Loughlin Executive Officer /s/ PEDRO A. RODRIGUEZ - ---------------------------------------- Controller & Chief Financial January 28, 2004 Pedro A. Rodriguez Officer *By: /s/ EDWARD D. LOUGHLIN ------------------------------------ Edward D. Loughlin ATTORNEY-IN-FACT
C-41 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION - ---------------- ------------------------------------------------------------- EX-99.Ba Agreement and Declaration of Trust dated June 28, 1988 as originally filed with Registrant's Registration Statement on Form N-1A (File No. 33-22821) filed with the Securities and Exchange Commission ("SEC") on June 30, 1988, is herein incorporated by reference to Exhibit 1 of Post-Effective Amendment No. 23, filed with the SEC on June 23, 1997. EX-99.Ba2 Amendment to Agreement and Declaration of Trust dated August 9, 1989, is filed herewith. EX-99.Ba3 Amendment to Agreement and Declaration of Trust, dated April 29, 1998, is filed herewith. EX-99.Bb1 Amended By-Laws dated February 20, 2001 are herein incorporated by reference to Exhibit (b)(3) of Post-Effective Amendment No. 34 to Registrant's Registration Statement on Form N-1A (File Nos. 33-22821 and 811-5601), filed with the SEC on January 28, 2002. EX-99.Bc Not Applicable EX-99.Bd1 Investment Advisory Agreement between Registrant and SEI Investments Management Corporation ("SIMC") dated December 16, 1994 (restated as of December 17, 2002) is herein incorporated by reference to Exhibit (d)(1) of Post-Effective Amendment No. 36 to Registrant's Registration Statement on Form N-1A (File Nos. 33-22821 and 811-5601), filed with the SEC on January 28, 2003. EX-99.Bd2 Schedule to Investment Advisory Agreement between Registrant and SIMC dated December 16, 2002 with respect to the International Fixed Income Fund is herein incorporated by reference to Exhibit (d)(2) of Post-Effective Amendment No. 36 to Registrant's Registration Statement on Form N-1A (File Nos. 33-22821 and 811-5601), filed with the SEC on January 28, 2003. EX-99.Bd3 Investment Sub-Advisory Agreement between SIMC and Capital Guardian Trust Company dated June 29, 1998 with respect to the International Equity Fund is herein incorporated by reference to Exhibit (d)(24) of Post-Effective Amendment No. 26 to Registrant's Registration Statement on Form N-1A (File No. 33-22821), filed with the SEC on November 25, 1998. EX-99.Bd4 Investment Sub-Advisory Agreement between SIMC and Morgan Stanley Investment Management Inc. dated October 1, 2001 with respect to the International Equity Fund is herein incorporated by reference to Exhibit (d)(39) of Post-Effective Amendment No. 34 to Registrant's Registration Statement on Form N-1A (File Nos. 33-22821 and 811-5601), filed with the SEC on January 28, 2002. EX-99.Bd5 Investment Sub-Advisory Agreement between SIMC and Alliance Capital Management L.P. dated June 26, 2002 with respect to the Emerging Markets Equity Fund is herein incorporated by reference to Exhibit (d)(9) of Post-Effective Amendment No. 35 to Registrant's Registration Statement on Form N-1A (File No. 33-22821), filed with the SEC on November 27, 2002. EX-99.Bd6 Investment Sub-Advisory Agreement between SIMC and The Boston Company Asset Management dated September 18, 2000 with respect to the Emerging Markets Equity Fund is herein incorporated by reference to Exhibit (d)(36) of Post-Effective Amendment No. 32 to Registrant's Registration Statement on Form N-1A (File No. 33-22821), filed on January 26, 2001.
EXHIBIT NUMBER DESCRIPTION - ---------------- ------------------------------------------------------------- EX-99.Bd7 Investment Sub-Advisory Agreement between SIMC, Fischer Francis Trees & Watts, Inc., Fischer Francis Trees & Watts, Fischer Francis Trees & Watts (Singapore) Pte Ltd and Fischer Francis Trees & Watts Kabushiki Kaisha dated December 17, 2002 with respect to the International Fixed Income Fund is herein incorporated by reference to Exhibit (d)(13) of Post-Effective Amendment No. 36 to Registrant's Registration Statement on Form N-1A (File Nos. 33-22821 and 811-5601), filed with the SEC on January 28, 2003. EX-99.Bd8 Investment Sub-Advisory Agreement between SIMC and Salomon Brothers Asset Management Inc dated March 31, 1997 with respect to the Emerging Markets Debt Fund is herein incorporated by reference to Exhibit (d)(31) of Post-Effective Amendment No. 29 to Registrant's Registration Statement on Form N-1A (File No. 33-22821), filed on January 27, 2000. EX-99.Bd9 Investment Sub-Advisory Agreement between SIMC and Ashmore Investment Management Limited dated March 17, 2003 with respect to the Emerging Markets Debt Fund is filed herewith. EX-99.Bd10 Investment Sub-Advisory Agreement between SIMC and Alliance Capital Management L.P. dated July 1, 2003 with respect to the International Equity Fund is filed herewith. EX-99.Bd11 Investment Sub-Advisory Agreement between SIMC and Citigroup Asset Management Ltd. dated September 30, 2003 with respect to the Emerging Markets Equity Fund is filed herewith. EX-99.Bd12 Investment Sub-Advisory Agreement between SIMC and Emerging Markets Management, L.L.C. dated March 11, 2003 with respect to the Emerging Markets Equity Fund is filed herewith. EX-99.Bd13 Investment Sub-Advisory Agreement between SIMC and Fisher Investments, Inc. dated July 1, 2003 with respect to the International Equity Fund is filed herewith. EX-99.Bd14 Investment Sub-Advisory Agreement between SIMC and McKinley Capital Management, Inc. dated July 1, 2003 with respect to the International Equity Fund is filed herewith. EX-99.Bd15 Amendment to Investment Sub-Advisory Agreement between SIMC and Alliance Capital Management L.P. dated July 1, 2003 with respect to the Emerging Markets Equity Fund is filed herewith. EX-99.Bd16 Amendment to Investment Sub-Advisory Agreement between SIMC and Ashmore Investment Management Limited dated July 1, 2003 with respect to the Emerging Markets Debt Fund is filed herewith. EX-99.Bd17 Amendment to Investment Sub-Advisory Agreement between SIMC and The Boston Company Asset Management, LLC dated July 1, 2003 with respect to the Emerging Markets Equity Fund is filed herewith. EX-99.Bd18 Amendment to Investment Sub-Advisory Agreement between SIMC and Capital Guardian Trust Company dated July 1, 2003 with respect to the International Equity Fund is filed herewith. EX-99.Bd19 Amendment to Investment Sub-Advisory Agreement between SIMC and Emerging Markets Management, L.L.C. dated July 1, 2003 with respect to the Emerging Markets Equity Fund is filed herewith.
EXHIBIT NUMBER DESCRIPTION - ---------------- ------------------------------------------------------------- EX-99.Bd20 Amendment to Investment Sub-Advisory Agreement between SIMC and Fischer Francis Trees & Watts, Inc., Fischer Francis Trees & Watts, Fischer Francis Trees & Watts (Singapore) Pte Ltd and Fischer Francis Trees & Watts Kabushiki Kaisha dated July 1, 2003 with respect to the International Fixed Income Fund is filed herewith. EX-99.Bd21 Amendment to Investment Sub-Advisory Agreement between SIMC and Morgan Stanley Investment Management Inc. dated July 1, 2003 with respect to the International Equity Fund is filed herewith. EX-99.Bd22 Amendment to Investment Sub-Advisory Agreement between SIMC and Salomon Brothers Asset Management Inc dated July 28, 2003 with respect to the Emerging Markets Debt Fund is filed herewith. EX-99.Be Amended and Restated Distribution Agreement between Registrant and SEI Investments Distribution Co. dated September 16, 2002 is herein incorporated by reference to Exhibit (e) of Post-Effective Amendment No. 35 to Registrant's Registration Statement on Form N-1A (File No. 33-22821), filed with the SEC on November 27, 2002. EX-99.Bf Not Applicable EX-99.Bg1 Custodian Agreement between Registrant and State Street Bank and Trust Company as originally filed as Exhibit (8) to Post-Effective Amendment No. 1 to Registrant's Registration Statement on Form N-1A (File No. 33-22821), filed with the SEC on September 16, 1998, is herein incorporated by reference to Exhibit 8(a) of Post-Effective Amendment No. 23, filed with the SEC on June 23, 1997 EX-99.Bh1 Amended and Restated Administration and Transfer Agency Agreement between Registrant and SIMC dated September 16, 2002 is herein incorporated by reference to Exhibit (h)(1) of Post-Effective Amendment No. 35 to Registrant's Registration Statement on Form N-1A (File No. 33-22821), filed with the SEC on November 27, 2002. EX-99.Bh2 Shareholder Service Plan and Agreement with respect to the Class A shares is herein incorporated by reference to Exhibit 15(e) of Post-Effective Amendment No. 22 to Registrant's Registration Statement on Form N-1A (File No. 33-22821), filed with the SEC on April 8, 1997. EX-99.Bh3 Shareholder Service Plan and Agreement with respect to Class I shares is herein incorporated by reference to Exhibit (h)(5) of Post-Effective Amendment No. 30 to Registrant's Registration Statement on Form N-1A (File No. 33-22821), filed on June 30, 2000. EX-99.Bh4 Administrative Services Plan and Agreement with respect to Class I shares signed October 4, 2001 is herein incorporated by reference to Exhibit (h)(6) of Post-Effective Amendment No. 34 to Registrant's Registration Statement on Form N-1A (File Nos. 33-22821 and 811-5601), filed with the SEC on January 28, 2002. EX-99.Bi Opinion and Consent of Counsel is filed herewith. EX-99.Bj Opinion and Consent of Independent Accountants is filed herewith. EX-99.Bk Not Applicable EX-99.Bl Not Applicable
EXHIBIT NUMBER DESCRIPTION - ---------------- ------------------------------------------------------------- EX-99.Bm Not Applicable. EX-99.Bn Amended and Restated Rule 18f-3 Plan relating to Class A, I and Y shares dated June 26, 2002 is herein incorporated by reference to Exhibit (n) of Post-Effective Amendment No. 35 to Registrant's Registration Statement on Form N-1A (File No. 33-22821), filed with the SEC on November 27, 2002. EX-99.Bo Not Applicable. EX-99.Bp1 The Code of Ethics for SEI Investments Company is herein incorporated by reference to Exhibit (p)(1) of Post-Effective Amendment No. 42 of SEI Institutional Managed Trust's Registration Statement on Form N-1A (File Nos. 33-9504 and 811-4878), filed with the SEC on January 28, 2004. EX-99.Bp2 The Code of Ethics for SEI Institutional International Trust is herein incorporated by reference to Exhibit (p)(2) of Post-Effective Amendment No. 30 to Registrant's Registration Statement on Form N-1A (File No. 33-22821), filed on June 30, 2000. EX-99.Bp3 The Code of Ethics for Capital Guardian Trust Company is filed herewith. EX-99.Bp4 The Code of Ethics for Morgan Stanley Investment Management Inc. is herein incorporated by reference to Exhibit (p)(5) of Post-Effective Amendment No. 35 to Registrant's Registration Statement on Form N-1A (File No. 33-22821), filed with the SEC on November 27, 2002. EX-99.Bp5 The Code of Ethics for Salomon Brothers Asset Management Inc is herein incorporated by reference to Exhibit (p)(11) of Post-Effective Amendment No. 30 to Registrant's Registration Statement on Form N-1A (File No. 33-22821), filed on June 30, 2000. EX-99.Bp6 The Code of Ethics for The Boston Company Asset Management is herein incorporated by reference to Exhibit (p)(8) of Post-Effective Amendment No. 6 to SEI Institutional Investment Trust's Registration Statement on Form N-1A (File Nos. 33-58041 and 811-7257), filed with the SEC on September 28, 2000 (Accession # 0000912057-00-043038). EX-99.Bp7 The Code of Ethics for Alliance Capital Management L.P. is herein incorporated by reference to Exhibit (p)(3) of Post-Effective Amendment No. 13 to SEI Institutional Investments Trust's Registration Statement on Form N-1A (File Nos. 33-58041 and 811-7257), filed with the SEC on September 30, 2003. EX-99.Bp8 The Code of Ethics for Fischer Francis Trees & Watts, Inc. is herein incorporated by reference to Exhibit (p)(12) of Post-Effective Amendment No. 13 to SEI Institutional Investments Trust's Registration Statement on Form N-1A (File Nos. 33-58041 and 811-7257), filed with the SEC on September 30, 2003. EX-99.Bp9 The Code of Ethics for Ashmore Investment Management Limited is filed herewith. EX-99.Bp10 The Code of Ethics for Citigroup Asset Management Limited is herein incorporated by reference to Exhibit (p)(9) of Post Effective Amendment No. 13 to SEI Institutional Investments Trust's Registration Statement on Form N-1A (File Nos. 33-58041 and 811-7257), filed with the SEC on September 30, 2003.
EXHIBIT NUMBER DESCRIPTION - ---------------- ------------------------------------------------------------- EX-99.Bp11 The Code of Ethics for Emerging Markets Management, L.L.C. is herein incorporated by reference to Exhibit (p)(33) of Post Effective Amendment No. 5 to SEI Insurance Products Trust's Registration Statement on Form N-1A (File Nos. 333-70013 and 811-9183), filed with the SEC on April 30, 2003. EX-99.Bp12 The Code of Ethics for Fisher Investments, Inc. is herein incorporated by reference to Exhibit (p)(39) of Post Effective Amendment No. 14 to SEI Institutional Investments Trust's Registration Statement on Form N-1A (File Nos. 33-58041 and 811-7257), filed with the SEC on November 14, 2003. EX-99.Bp13 The Code of Ethics for McKinley Capital Management, Inc. is herein incorporated by reference to Exhibit (p)(19) of Post Effective Amendment No. 6 to SEI Institutional International Trust's Registration Statement on Form N-1A (File Nos. 33-58041 and 811-7257), filed with the SEC on September 27, 2000. EX-99.Bq Powers of Attorney for Robert A. Nesher, William M. Doran, F. Wendell Gooch, Rosemarie B. Greco, George J. Sullivan, Jr., James M. Storey, Edward D. Loughlin, Nina Lesavoy and Pedro A. Rodriguez are incorporated by reference to Exhibit (q) of Post-Effective Amendment No. 40 of SEI Institutional Managed Trust's Registration Statement on Form N-1A (File Nos. 33-9504 and 811-4878) filed with the SEC on November 12, 2003.
EX-99.B(A)(2) 3 a2123004zex-99_ba2.txt EXHIBIT 99.B(A)(2) Exhibit (a)(2) SEI WEALTH MANAGEMENT TRUST WRITTEN INSTRUMENT AMENDING THE DECLARATION OF TRUST The undersigned, being all of the Trustees of SEI Wealth Management Trust, a business trust organized under the laws of the Commonwealth of Massachusetts pursuant to a Declaration of Trust dated June 30, 1988, do hereby amend, effective upon the filing of this instrument in the office of the Secretary of State of The Commonwealth of Massachusetts, the Declaration of Trust by changing the name of the Trust from "SEI Wealth Management Trust" to "SEI International Trust". This instrument may be executed in several counterparts, each of which shall be deemed an original, but all taken together shall constitute one instrument. IN WITNESS WHEREOF, the undersigned have signed these presents on the dates indicated. /s/ Alfred P. West, Jr. August 9, 1989 - ---------------------------------------- /s/ William M. Doran August 9, 1989 - ---------------------------------------- /s/ Edward W. Binshadler August 9, 1989 - ---------------------------------------- /s/ Richard F. Blanchard August 9, 1989 - ---------------------------------------- /s/ F. Wendell Gooch August 9, 1989 - ---------------------------------------- EX-99.B(A)(3) 4 a2123004zex-99_ba3.txt EXHIBIT 99.B(A)(3) Exhibit (a)(3) SEI INSTITUTIONAL INTERNATIONAL TRUST Secretary's Certificate Amendment to Agreement and Declaration of Trust The undersigned, Richard W. Grant, being the duly elected and acting Secretary of SEI Institutional International Trust (the "Trust"), a Massachusetts business trust, DOES HEREBY CERTIFY that the following are true and correct copies of a resolution adopted, pursuant to Article I Section 1 and Article IX Section 7 of the Agreement and Declaration of Trust, by the Board of Trustees of the Trust at a meeting held on March 23, 1998: "VOTED: That the name of SEI International Trust (the "Trust") be, and it hereby is, changed to SEI Institutional International Trust." Witness my hand this 29th day of April, 1998 /s/ Richard W. Grant ------------------------------------ Richard W. Grant Secretary EX-99.B(D)(9) 5 a2123004zex-99_bd9.txt EXHIBIT 99.B(D)(9) Exhibit 99.B(d)(9) INVESTMENT SUB-ADVISORY AGREEMENT SEI INSTITUTIONAL INTERNATIONAL TRUST AGREEMENT made this 17th day of March, 2003 between SEI Investments Management Corporation (the "Adviser") and Ashmore Investment Management Limited (the "Sub-Adviser"). WHEREAS, SEI Institutional International Trust, a Massachusetts business trust (the "Trust"), is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"); and WHEREAS, the Adviser has entered into an Investment Advisory Agreement dated December 16, 1994 (the "Advisory Agreement") with the Trust, pursuant to which the Adviser acts as investment adviser to the series of the Trust set forth on Schedule A attached hereto (the "Fund"), as such Schedule may be amended by mutual agreement of the parties hereto; WHEREAS, the Sub-Adviser, a company incorporated under the laws of England and Wales, is authorized and regulated by the Financial Services Authority of the United Kingdom (the "FSA") and is registered as an investment adviser under the Investment Advisers Act of 1940, as amended (the "Advisers Act"). The Adviser is a Market Counterparty within the meaning of the rules of the FSA (the "Rules"); and WHEREAS, the Adviser, with the approval of the Trust, desires to retain the Sub-Adviser to provide investment advisory services to the Adviser in connection with the management of the Fund, and the Sub-Adviser is willing to render such investment advisory services. NOW, THEREFORE, the parties hereto agree as follows: 1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and the Trust's Board of Trustees, the Sub-Adviser shall manage all of the securities and other assets of the Fund entrusted to it hereunder (the "Assets"), including the purchase, retention and disposition of the Assets, in accordance with the Fund's investment objectives, policies and restrictions as stated in the Fund's prospectus and statement of additional information, as currently in effect and as amended or supplemented from time to time (referred to collectively as the "Prospectus"), and subject to the following: (a) The Sub-Adviser shall subject to Paragraph 1(b), determine in its discretion from time to time what Assets will be purchased, retained or sold by the Fund, and what portion of the Assets will be invested or held uninvested in cash. Consistent with any policies established by the Trust and/or the Adviser, the Sub-Adviser shall be authorized to enter into agreements and execute any documents required to manage the Assets. (b) In the performance of its duties and obligations under this Agreement, the Sub-Adviser shall act in conformity with the Trust's Declaration of Trust (as defined herein) and the Prospectus and with the instructions and directions of the Adviser and of the Board of Trustees of the Trust and will conform to and comply with the requirements of the 1940 1 Act, the Internal Revenue Code of 1986 (the "Code"), and all other applicable federal and state laws and regulations, as each is amended from time to time. (c) The Sub-Adviser shall determine the Assets to be purchased or sold by the Fund as provided in subparagraph (a) and will place orders with or through such persons, brokers or dealers to carry out the policy with respect to brokerage set forth in the Fund's Prospectus or as the Board of Trustees or the Adviser may direct from time to time, in conformity with all federal securities laws. Consistent with its obligations under the Investment Advisers Act of 1940, as amended, the Sub-Adviser shall seek best execution for Fund transactions. In assessing the best overall terms available for any transaction, the Sub-Adviser shall consider all factors that it deems relevant, including the breadth of the market in the security, the price of the security, the financial condition and execution capability of the broker or dealer, and the reasonableness of the commission, if any, both for the specific transaction and on a continuing basis. In evaluating the best overall terms available, and in selecting the broker-dealer to execute a particular transaction, the Sub-Adviser may also consider the brokerage and research services provided (as those terms are defined in Section 28(e) of the Securities Exchange Act of 1934 (the "Exchange Act")). Consistent with any guidelines established by the Board of Trustees of the Trust and Section 28(e) of the Exchange Act, the Sub-Adviser is authorized to pay to a broker or dealer who provides such brokerage and research services a commission for executing a portfolio transaction for the Fund which is in excess of the amount of commission another broker or dealer would have charged for effecting that transaction if, but only if, the Sub-Adviser determines in good faith that such commission was reasonable in relation to the value of the brokerage and research services provided by such broker or dealer -- viewed in terms of that particular transaction or in terms of the overall responsibilities of the Sub-Adviser to its discretionary clients, including the Fund. In addition, the Sub-Adviser is authorized to allocate purchase and sale orders for securities to brokers or dealers (including brokers and dealers that are affiliated with the Adviser, Sub-Adviser or the Trust's principal underwriter) and to take into account the sale of shares of the Trust if the Sub-Adviser believes that the quality of the transaction and the commission are comparable to what they would be with other qualified firms. In no instance, however, will the Fund's Assets be purchased from or sold to the Adviser, Sub-Adviser, the Trust's principal underwriter, or any affiliated person of either the Trust, Adviser, the Sub-Adviser or the principal underwriter, acting as principal in the transaction, except to the extent permitted by the Securities and Exchange Commission ("SEC") and the 1940 Act. The Sub-Adviser and any affiliate and any officer or employee thereof may, in accordance with Section 206 of the Advisers Act, buy, hold and deal in any securities or interests in any other fund or account to which the Sub-Adviser or any affiliate provides investment management or advisory services upon its individual account notwithstanding that similar securities or interests may be held by the Fund. On occasions when the Sub-Adviser deems the purchase or sale of a security to be in the best interest of the Fund as well as other clients, the Sub-Adviser, to the extent permitted by applicable laws and regulations, may aggregate the securities to be sold or purchased. In such event, allocation of the securities so purchased or sold, as well as the expenses incurred in the transaction, will be made by the Sub-Adviser in a manner it considers to be equitable and 2 consistent with its fiduciary obligations to the Fund and to such clients. In accordance with applicable laws, the Sub-Adviser may also, on behalf of the Fund, purchase or sell Assets from or to another account or customer for which it or an affiliate acts as investment manager or adviser. (d) The Sub-Adviser shall maintain all books and records with respect to transactions involving the Assets required by subparagraphs (b)(5), (6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act. The Sub-Adviser shall provide to the Adviser or the Board of Trustees such periodic and special reports, balance sheets or financial information, and such other information with regard to its affairs as the Adviser or Board of Trustees may reasonably request. The Sub-Adviser shall keep the books and records relating to the Assets required to be maintained by the Sub-Adviser under this Agreement and shall timely furnish to the Adviser all information relating to the Sub-Adviser's services under this Agreement needed by the Adviser to keep the other books and records of the Fund required by Rule 31a-1 under the 1940 Act. The Sub-Adviser shall also furnish to the Adviser any other information relating to the Assets that is required to be filed by the Adviser or the Trust with the SEC or sent to shareholders under the 1940 Act (including the rules adopted thereunder) or any exemptive or other relief that the Adviser or the Trust obtains from the SEC. The Sub-Adviser agrees that all records that it maintains on behalf of the Fund are property of the Fund and the Sub-Adviser will surrender promptly to the Fund any of such records upon the Fund's request, provided that in the case of records that cannot be segregated from information that is not a record of the Fund, the Sub-Adviser may provide such information in extracted hard copy format upon such request; and provided further that the Sub-Adviser may retain a copy of such records. In addition, for the duration of this Agreement, the Sub-Adviser shall preserve for the periods prescribed by Rule 31a-2 under the 1940 Act any such records as are required to be maintained by it pursuant to this Agreement, and shall transfer said records to any successor sub-adviser upon the termination of this Agreement (or, if there is no successor sub-adviser, to the Adviser). (e) The Sub-Adviser shall provide the Fund's custodian on each business day with information relating to all transactions concerning the Fund's Assets and shall provide the Adviser with such information upon request of the Adviser. (f) The investment management services provided by the Sub-Adviser under this Agreement are not to be deemed exclusive and the Sub-Adviser shall be free to render similar services to other accounts and customers, as long as such services do not impair the services rendered to the Adviser or the Trust. The Sub-Adviser shall be permitted to give advice to, and to make investments on behalf of, the Fund which may differ from advice with respect to or from investments made on behalf of such other accounts and customers even though the investment objectives of the Fund may be the same or similar, provided, however, that the Sub-Adviser, in accordance with Section 206 of the Advisers Act, acts in good faith and follows a policy of allocating over a period of time opportunities to the Fund on a fair and equitable basis relative to such other accounts and customers, taking into consideration issues such as availability as well as the policies and restrictions to 3 which such other accounts and customers and the Sub-Adviser in respect of the Fund are subject. (g) The Sub-Adviser shall promptly notify the Adviser of any financial condition that is likely to impair the Sub-Adviser's ability to fulfill its commitment under this Agreement. (h) The Sub-Adviser shall review all proxy solicitation materials and be responsible for voting and handling all proxies in relation to the securities held as Assets in the Fund. The Adviser shall instruct the custodian and other parties providing services to the Fund to promptly forward misdirected proxies to the Sub-Adviser. (i) Upon notice to and the written approval of the Adviser, the Sub-Adviser shall, subject to the conditions of the Adviser's written approval, be entitled to appoint advisers, including legal counsel, in connection with matters pertaining to an Asset if it reasonably determines such action to be in the best interests of the Fund; provided that such notice and approval shall not be required when such advisers are appointed at the expense of the issuer of the relevant Asset. Subject to the conditions of the Adviser's written approval, any costs and fees associated with such an appointment shall be borne by the Fund. (j) The Sub-Adviser has in operation a written procedure in accordance with the Rules for the effective consideration and proper handling of complaints from customers. Any formal complaints should be referred to the Compliance Officer of the Sub-Adviser. (k) The Sub-Adviser's internal compliance policy is to not accept goods or services under any Soft Commission Agreement (as defined in the Rules) or any other soft commission arrangements. Services to be furnished by the Sub-Adviser under this Agreement may be furnished through the medium of any of the Sub-Adviser's control affiliates, partners, officers or employees. 2. DUTIES OF THE ADVISER. The Adviser shall continue to have responsibility for all services to be provided to the Fund pursuant to the Advisory Agreement and shall oversee and review the Sub-Adviser's performance of its duties under this Agreement; provided, however, that in connection with its management of the Assets, nothing herein shall be construed to relieve the Sub-Adviser of responsibility for compliance with the Trust's Declaration of Trust (as defined herein), the Prospectus, the instructions and directions of the Board of Trustees of the Trust, the requirements of the 1940 Act, the Code, and all other applicable federal and state laws and regulations, as each is amended from time to time. 3. REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS. The Adviser represents and warrants to the Sub-Adviser and the Sub-Adviser represents and warrants to the Adviser that:- (a) it is validly existing, duly empowered and authorised to execute, deliver and perform its undertakings pursuant to this Agreement; 4 (b) this Agreement is binding upon it and enforceable in accordance with its terms except insofar as enforcement may be limited by bankruptcy, insolvency or other laws relating to or affecting enforcement of creditors' rights or general principles of equity; (c) it has all governmental and regulatory licences, registrations and approvals required by law as may be necessary to perform its obligations under this Agreement and it has complied with and will continue to comply with all laws, rules and regulations or court and governmental orders by which it is bound or to which it is subject in connection with the execution and performance of this Agreement; (d) it has completed, obtained and performed all registrations, filings and approvals required to carry out the activities contemplated in this Agreement; and (e) the statements contained in the preamble are true accurate and complete statements pertaining to the matters described therein; and the Adviser and the Sub-Adviser each undertakes to notify the other party forthwith of any matter or event which would render those representations and warranties in (a) to (e) above untrue, inaccurate or misleading. 4. ADVISER REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS. The Adviser represents and warrants to the Sub-Adviser that: (a) the investment objectives and policies, subject to the investment restrictions, and as stated in the Prospectus or as otherwise stipulated by the Adviser from time to time and agreed in writing with the Sub-Adviser are consistent with the Trust's Declaration of Trust and its By-Laws (as defined below); (b) it shall provide the Sub-Adviser with any information throughout the term of this Agreement that it determines to be relevant to or reasonably requested by the Sub-Adviser to assist it in complying with the Trust's Declaration of Trust and the By-Laws in its capacity as Sub-Adviser; and (c) the Sub-Adviser is not responsible for the Fund's compliance with Regulation S-P, as such regulations may be amended from time to time and successor regulations thereto. 5. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with copies properly certified or authenticated of each of the following documents: (a) The Trust's Agreement and Declaration of Trust, as filed with the Secretary of State of the Commonwealth of Massachusetts (such Agreement and Declaration of Trust, as in effect on the date of this Agreement and as amended from time to time, herein called the "Declaration of Trust"); (b) By-Laws of the Trust (such By-Laws, as in effect on the date of this Agreement and as amended from time to time, are herein called the "By-Laws"); and (c) Prospectus of the Fund. 5 6. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the Sub-Adviser pursuant to this Agreement, the Adviser will pay the Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation therefor, a sub-advisory fee at the rate specified in Schedule B which is attached hereto and made part of this Agreement. The fee will be calculated based on the average daily value of the Assets under the Sub-Adviser's management and will be paid to the Sub-Adviser monthly. Except as may otherwise be prohibited by law or regulation (including any then current SEC staff interpretation), the Sub-Adviser may, in its discretion and from time to time, waive a portion of its fee. On termination of this Agreement, the Sub-Adviser shall be entitled to receive its sub-advisory fee due to it up to the date of such termination. 7. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the Adviser from and against any and all claims, losses, liabilities or damages (including reasonable attorney's fees and other related expenses) howsoever arising from or in connection with the performance of the Sub-Adviser's obligations under this Agreement; provided, however, that the Sub-Adviser's obligation under this Paragraph 7 shall be reduced to the extent that the claim against, or the loss, liability or damage experienced by the Adviser, is caused by or is otherwise directly related to the Adviser's own willful misfeasance, bad faith or negligence, or to the reckless disregard of its duties under this Agreement. Save as aforesaid, neither the Sub-Adviser, nor any of its directors, officers or employees, shall be liable for any error of judgment or mistake of law or for any loss arising out of any investment or for any act or omission in carrying out its duties hereunder, except a loss resulting from willful misfeasance, bad faith or negligence on the Sub-Adviser's part in the performance of its duties or from reckless disregard of its obligations and duties under this Agreement. The Adviser shall indemnify and hold harmless the Sub-Adviser from and against any and all claims, losses, liabilities or damages (including reasonable attorney's fees and other related expenses) howsoever arising from or in connection with the performance of the Adviser's obligations under this Agreement; provided, however, that the Adviser's obligation under this Paragraph 7 shall be reduced to the extent that the claim against, or the loss, liability or damage experienced by the Sub-Adviser, is caused by or is otherwise directly related to the Sub-Adviser's own willful misfeasance, bad faith or negligence, or to the reckless disregard of its duties under this Agreement. 8. DURATION AND TERMINATION. This Agreement shall become effective upon approval by the Trust's Board of Trustees and its execution by the parties hereto. Pursuant to the exemptive relief obtained in the SEC Order dated April 29, 1996, Investment Company Act Release No. 21921, approval of the Agreement by a majority of the outstanding voting securities of the Fund is not required, and the Sub-Adviser acknowledges that it and any other sub-adviser so selected and approved shall be without the protection (if any) accorded by shareholder approval of an investment adviser's receipt of compensation under Section 36(b) of the 1940 Act. 6 This Agreement shall continue in effect for a period of more than two years from the date hereof only so long as continuance is specifically approved at least annually in conformance with the 1940 Act; provided, however, that this Agreement may be terminated with respect to the Fund (a) by the Fund at any time, without the payment of any penalty, by the vote of a majority of Trustees of the Trust or by the vote of a majority of the outstanding voting securities of the Fund, (b) by the Adviser at any time, without the payment of any penalty, on not more than 60 days' nor less than 30 days' written notice to the Sub-Adviser, or (c) by the Sub-Adviser at any time, without the payment of any penalty, on 90 days' written notice to the Adviser. This Agreement shall terminate automatically and immediately in the event of its assignment, or in the event of a termination of the Advisory Agreement with the Trust. As used in this Paragraph 8, the terms "assignment" and "vote of a majority of the outstanding voting securities" shall have the respective meanings set forth in the 1940 Act and the rules and regulations thereunder, subject to such exceptions as may be granted by the SEC under the 1940 Act. 9. GOVERNING LAW. This Agreement shall be governed by the internal laws of the Commonwealth of Massachusetts, without regard to conflict of law principles; provided, however, that nothing herein shall be construed as being inconsistent with the 1940 Act. 10. SEVERABILITY. Should any part of this Agreement be held invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors. 11. NOTICE: Any notice, advice or report to be given pursuant to this Agreement shall be deemed sufficient if delivered or mailed by registered, certified or overnight mail, postage prepaid addressed by the party giving notice to the other party at the last address furnished by the other party: To the Adviser at: SEI Investments Management Corporation One Freedom Valley Road Oaks, PA 19456 Attention: Legal Department To the Sub-Adviser at: Ashmore Investment Management Limited 20 Bedfordbury, London WC2N 4BL Attention: Mike Moody as to administrative matters, Mark Grimwood, as to Legal and Compliance matters. 7 12. NON-HIRE/NON-SOLICITATION. The Adviser and the Sub-Adviser hereby each agree that so long as the Sub-Adviser provides services to the Adviser or the Trust and for a period of one year following the date on which the Sub-Adviser ceases to provide services to the Adviser and the Trust, neither the Sub-Adviser nor the Adviser shall not for any reason, directly or indirectly, on their own behalf or on behalf of others, hire any person employed by the other party, whether or not such person is a full-time employee or whether or not any person's employment is pursuant to a written agreement or is at-will. The Adviser and Sub-Adviser further agree that, to the extent they breach the covenant described in this paragraph, the other party shall be entitled to pursue all appropriate remedies in law or equity. 13. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and understanding between the parties hereto, and supersedes all prior agreements and understandings relating to this Agreement's subject matter. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but such counterparts shall, together, constitute only one instrument. In the event the terms of this Agreement are applicable to more than one portfolio of the Trust (for purposes of this Paragraph 13, each a "Fund"), the Adviser is entering into this Agreement with the Sub-Adviser on behalf of the respective Funds severally and not jointly, with the express intention that the provisions contained in each numbered paragraph hereof shall be understood as applying separately with respect to each Fund as if contained in separate agreements between the Adviser and Sub-Adviser for each such Fund. In the event that this Agreement is made applicable to any additional Funds by way of a Schedule executed subsequent to the date first indicated above, provisions of such Schedule shall be deemed to be incorporated into this Agreement as it relates to such Fund so that, for example, the execution date for purposes of Paragraph 8 of this Agreement with respect to such Fund shall be the execution date of the relevant Schedule. 8 14. MISCELLANEOUS. (a) A copy of the Declaration of Trust is on file with the Secretary of State of the Commonwealth of Massachusetts, and notice is hereby given that the obligations of this instrument are not binding upon any of the Trustees, officers or shareholders of the Fund or the Trust. (b) Where the effect of a requirement of the 1940 Act reflected in any provision of this Agreement is altered by a rule, regulation or order of the SEC, whether of special or general application, such provision shall be deemed to incorporate the effect of such rule, regulation or order. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their officers designated below as of the day and year first written above. SEI INVESTMENTS MANAGEMENT CORPORATION ASHMORE INVESTMENT MANAGEMENT LIMITED By: By: /s/ Todd Cipperman /s/ Tim Davis - -------------------------------------- ------------------------------------- Name: Name: Todd Cipperman Tim Davis - -------------------------------------- ------------------------------------- Title: Title: Vice President Authorised Signatory - -------------------------------------- ------------------------------------- 9 SCHEDULE A TO THE SUB-ADVISORY AGREEMENT BETWEEN SEI INVESTMENTS MANAGEMENT CORPORATION AND ASHMORE INVESTMENT MANAGEMENT LIMITED AS OF MARCH 17, 2003 SEI INSTITUTIONAL INTERNATIONAL TRUST EMERGING MARKETS DEBT FUND 10 SCHEDULE B TO THE SUB-ADVISORY AGREEMENT BETWEEN SEI INVESTMENTS MANAGEMENT CORPORATION AND ASHMORE INVESTMENT MANAGEMENT LIMITED AS OF MARCH 17, 2003 Pursuant to Paragraph 6, the Adviser shall pay the Sub-Adviser compensation at an annual rate as follows: SEI INSTITUTIONAL INTERNATIONAL TRUST EMERGING MARKETS DEBT FUND Agreed and Accepted: SEI INVESTMENTS MANAGEMENT CORPORATION ASHMORE INVESTMENT MANAGEMENT LIMITED By: By: /s/ Todd Cipperman /s/ Tim Davis - -------------------------------------- ------------------------------------- Name: Name: Todd Cipperman Tim Davis - -------------------------------------- ------------------------------------- Title: Title: Vice President Authorised Signatory - -------------------------------------- ------------------------------------- 11 EX-99.B(D)(10) 6 a2123004zex-99_bd10.txt EXHIBIT 99.B(D)(10) Exhibit 99.B(d)(10) INVESTMENT SUB-ADVISORY AGREEMENT SEI INSTITUTIONAL INTERNATIONAL TRUST AGREEMENT made this 1st day of July, 2003, between SEI Investments Management Corporation (the "Adviser") and Alliance Capital Management L.P. (the "Sub-Adviser"). WHEREAS, SEI Institutional International Trust, a Massachusetts business trust (the "Trust"), is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"); and WHEREAS, the Adviser has entered into an Investment Advisory Agreement dated December 16, 1994 (the "Advisory Agreement") with the Trust, pursuant to which the Adviser acts as investment adviser to the series of the Trust set forth on Schedule A attached hereto (the "Fund"), as such Schedule may be amended by mutual agreement of the parties hereto; and WHEREAS, the Adviser, with the approval of the Trust, desires to retain the Sub-Adviser to provide investment advisory services to the Adviser in connection with the management of the Fund, and the Sub-Adviser is willing to render such investment advisory services. NOW, THEREFORE, the parties hereto agree as follows: 1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and the Trust's Board of Trustees, the Sub-Adviser shall manage all of the securities and other assets of the Fund entrusted to it hereunder (the "Assets"), including the purchase, retention and disposition of the Assets, in accordance with the Fund's investment objectives, policies and restrictions as stated in the Fund's prospectus and statement of additional information, as currently in effect and as amended or supplemented from time to time (referred to collectively as the "Prospectus"), and subject to the following: (a) The Sub-Adviser shall provide supervision of the Fund's investments and, in consultation with and subject to the direction of the Adviser, determine from time to time what Assets will be purchased, retained or sold by the Fund, and what portion of the Assets will be invested or held uninvested in cash. (b) In the performance of its duties and obligations under this Agreement, the Sub-Adviser shall act in conformity with the Trust's Declaration of Trust (as defined herein) and the Prospectus and with the instructions and directions of the Adviser and of the Board of Trustees of the Trust and will conform to and comply with the requirements of the 1940 Act, the Internal Revenue Code of 1986 (the "Code"), and all other applicable federal and state laws and regulations, as each is amended from time to time. The Adviser agrees promptly to deliver any amendment or supplement to the Prospectus to the Sub-Adviser on an on-going basis, and until the Adviser delivers any such amendment or supplement to the Sub-Adviser, the Sub-Adviser shall be fully protected in relying on the Prospectus as previously furnished. (c) The Sub-Adviser shall determine the Assets to be purchased or sold by the Fund and will place orders with or through such persons, brokers or dealers to carry out the policy with respect to brokerage set forth in the Fund's Registration Statement and Prospectus or as the Board of Trustees or the Adviser may direct from time to time, in conformity with federal securities laws. In executing Fund transactions and selecting brokers or dealers, the Sub-Adviser will use its best efforts to seek on behalf of the Fund the best overall terms available. In assessing the best overall terms available for any transaction, the Sub-Adviser shall consider all factors that it deems relevant, including the breadth of the market in the security, the price of the security, the financial condition and execution capability of the broker or dealer, and the reasonableness of the commission, if any, both for the specific transaction and on a continuing basis. In evaluating the best overall terms available, and in selecting the broker-dealer to execute a particular transaction, the Sub-Adviser may also consider the brokerage and research services (as those terms are defined in Section 28(e) of the Securities Exchange Act of 1934) provided to the Fund and/or other accounts over which the Sub-Adviser or an affiliate of the Sub-Adviser may exercise investment discretion. The Sub-Adviser is authorized, subject to the prior approval of the Trust's Board of Trustees, to pay to a broker or dealer who provides such brokerage and research services a commission for executing a portfolio transaction for the Fund which is in excess of the amount of commission another broker or dealer would have charged for effecting that transaction if, but only if, the Sub-Adviser determines in good faith that such commission was reasonable in relation to the value of the brokerage and research services provided by such broker or dealer -- viewed in terms of that particular transaction or in terms of the overall responsibilities of the Sub-Adviser to the Fund. In addition, the Sub-Adviser is authorized to allocate purchase and sale orders for Fund securities to brokers or dealers (including brokers and dealers that are affiliated with the Adviser, Sub-Adviser or the Trust's principal underwriter) and to take into account the sale of shares of the Trust if the Sub-Adviser believes that the quality of the transaction and the commission are comparable to what they would be with other qualified firms. In no instance, however, will the Fund's Assets be purchased from or sold to the Adviser, Sub-Adviser, the Trust's principal underwriter, or any affiliated person of either the Trust, Adviser, the Sub-Adviser or the principal underwriter, acting as principal in the transaction, except to the extent permitted by the Securities and Exchange Commission ("SEC") and the 1940 Act. (d) The Sub-Adviser shall maintain all books and records with respect to transactions involving the Assets required by subparagraphs (b)(5), (6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act and shall render to the Adviser or the Board of Trustees such periodic and special reports as the Adviser or Board of Trustees may reasonably request. The Sub-Adviser shall keep the books and records required to be maintained by the Sub-Adviser by this Agreement and shall timely furnish to the Adviser all information relating to the Sub-Adviser's services under this Agreement needed by the Adviser to keep the other books and records of the Fund required by Rule 31a-1 under the 1940 Act. The Sub-Adviser shall also furnish to the Adviser any other information that is required to be filed by the Adviser or the Trust with the SEC or sent to shareholders under the 1940 Act (including the rules adopted thereunder) or any exemptive or other relief that the Adviser or the Trust obtains from the SEC. The Sub-Adviser agrees that all records that it maintains on behalf of 2 the Fund are property of the Fund and the Sub-Adviser will surrender promptly to the Fund any of such records upon the Fund's request; provided, however, that the Sub-Adviser may retain a copy of such records. In addition, for the duration of this Agreement, the Sub-Adviser shall preserve for the periods prescribed by Rule 31a-2 under the 1940 Act any such records as are required to be maintained by it pursuant to this Agreement, and shall transfer said records to any successor sub-adviser upon the termination of this Agreement (or, if there is no successor sub-adviser, to the Adviser). (e) The Sub-Adviser shall provide the Fund's custodian on each business day with information relating to all transactions concerning the Fund's Assets and shall provide such information and such periodic or special reports as the Adviser or Board of Trustees may reasonably request. (f) The Adviser understands that the Sub-Adviser now acts, will continue to act and may act in the future as investment manager or adviser to fiduciary and other managed accounts, and as investment manager or adviser to other investment companies, including any offshore entities, or accounts, and the Fund has no objection to the Sub-Adviser's so acting, provided that whenever the Fund and one or more other investment companies or accounts managed or advised by the Sub-Adviser have available funds for investment, investments suitable and appropriate for each will be allocated in accordance with a formula believed to be equitable to each company and account. The Adviser recognizes that in some cases this procedure may adversely affect the size of the position obtainable for the Fund. In addition, the Adviser understands that the persons employed by the Sub-Adviser to assist in the performance of the Sub-Adviser's duties under this Agreement will not devote their full time to such service and nothing contained in this Agreement shall be deemed to limit or restrict the right of the Sub-Adviser or any affiliate of the Sub-Adviser to engage in and devote time and attention to other businesses or to render services of whatever kind in nature. (g) The Sub-Adviser shall promptly notify the Adviser of any financial condition that is likely to impair the Sub-Adviser's ability to fulfill its commitment under this Agreement. (h) (i) Except under the circumstances set forth in subsection (ii), the Sub-Adviser shall not be responsible for reviewing proxy solicitation materials or voting and handling proxies in relation to the securities held as Assets in the Fund. The Sub-Adviser shall instruct the custodian and other parties providing services to the Fund to promptly forward misdirected proxies to the Adviser. (ii) The Sub-Adviser hereby agrees that upon 60 days' written notice from the Adviser, the Sub-Adviser shall assume responsibility for reviewing proxy solicitation materials and voting proxies in relation to the securities held as Assets in the Fund. As of the time as the Sub-Adviser shall assume such responsibilities with respect to proxies under this sub-section (ii), the Adviser shall instruct the custodian and other parties providing services to the Fund to promptly forward misdirected proxies to the Sub-Adviser. 3 (i) In performance of its duties and obligations under this Agreement, the Sub-Adviser shall not consult with any other sub-adviser to the Fund or a sub-adviser to a portfolio that is under common control with the Fund concerning the Assets, except as permitted by the policies and procedures of the Fund. The Sub-Adviser shall not provide investment advice to any assets of the Fund other than the Assets. Services to be furnished by the Sub-Adviser under this Agreement may be furnished through the medium of any of the Sub-Adviser's partners, officers, employees or, to the extent permitted by applicable law, affiliates, and with respect to proxies, a third party proxy voting service. 2. DUTIES OF THE ADVISER. The Adviser shall continue to have responsibility for all services to be provided to the Fund pursuant to the Advisory Agreement and shall oversee and review the Sub-Adviser's performance of its duties under this Agreement; provided, however, nothing herein shall be construed to relieve the Sub-Adviser of responsibility for compliance with the Fund's investment objectives, policies and restrictions, as provided in Section 1 hereunder. 3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with copies properly certified or authenticated of each of the following documents: (a) The Trust's Agreement and Declaration of Trust, as filed with the Secretary of State of the Commonwealth of Massachusetts (such Agreement and Declaration of Trust, as in effect on the date of this Agreement and as amended from time to time, herein called the "Declaration of Trust"); (b) By-Laws of the Trust (such By-Laws, as in effect on the date of this Agreement and as amended from time to time, are herein called the "By-Laws"); (c) Prospectus(es) of the Fund; and (d) The Trust's most recent Registration Statement as filed with the SEC. 4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the Sub-Adviser pursuant to this Agreement, the Adviser will pay the Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation therefor, a sub-advisory fee at the rate specified in Schedule B which is attached hereto and made part of this Agreement. The fee will be calculated based on the average daily value of the Assets under management and will be paid to the Sub-Adviser monthly. Except as may otherwise be prohibited by law or regulation (including any then current SEC staff interpretation), the Sub-Adviser may, in its discretion and from time to time, waive a portion of its fee. 5. LIMITATION OF LIABILITY OF THE SUB-ADVISER. The Sub-Adviser shall not be liable for any error of judgment or for any loss suffered by the Adviser in connection with the performance of its obligations under this Agreement, except a loss resulting from: (i) willful misfeasance, bad faith or negligence on the Sub-Adviser's part in the performance of its 4 duties, or (ii) reckless disregard of its obligations and duties under this Agreement, or (iii) a violation of law or any duty imposed by federal or state law. 6. REPORTS. During the term of this Agreement, the Adviser agrees to furnish the Sub-Adviser at its principal office all prospectuses, proxy statements, reports to stockholders, sales literature or other materials prepared for distribution to stockholders of the Fund, the Trust or the public that refer to the Sub-Adviser or its clients in any way prior to use thereof and not to use material if the Sub-Adviser reasonably objects in writing within five business days (or such other period as may be mutually agreed) after receipt thereof. The Sub-Adviser's right to object to such materials is limited to the portions of such materials that expressly relate to the Sub-Adviser, its services and its clients. The Adviser agrees to use its reasonable best efforts to ensure that materials prepared by its employees or agents or its affiliates that refer to the Sub-Adviser or its clients in any way are consistent with those materials previously approved by the Sub-Adviser as referenced in the first sentence of this paragraph. Sales literature may be furnished to the Sub-Adviser by first class or overnight mail, facsimile transmission equipment or hand delivery. 7. CHANGE IN THE SUB-ADVISER'S MEMBERSHIP. The Sub-Adviser agrees that it shall notify the Adviser of any change in the membership of the general partners of the Sub-Adviser within a reasonable time after such change. 8. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the Adviser from and against any and all claims, losses, liabilities or damages (including reasonable attorney's fees and other related expenses) howsoever arising from or in connection with this Agreement or the performance by the Sub-Adviser of its duties hereunder; provided, however, that the Sub-Adviser shall not be required to indemnify or otherwise hold the Adviser harmless under this Paragraph 8 where the claim against, or the loss, liability or damage experienced by the Adviser, is caused by or is otherwise directly related to the Adviser's own willful misfeasance, bad faith or negligence, or to the reckless disregard of its duties under this Agreement. 9. DURATION AND TERMINATION. This Agreement shall become effective upon its approval by the Trust's Board of Trustees and its execution by the parties hereto. Pursuant to the exemptive relief obtained in the SEC Order dated April 29, 1996, Investment Company Act Release No. 21921, approval of the Agreement by a majority of the outstanding voting securities of the Fund is not required, and the Sub-Adviser acknowledges that it and any other sub-adviser so selected and approved shall be without the protection, if any, accorded by shareholder approval of an investment adviser's receipt of compensation under Section 36(b) of the 1940 Act. This Agreement shall continue in effect for a period of more than two years from the date hereof only so long as continuance is specifically approved at least annually in conformance with the 1940 Act; provided, however, that this Agreement may be terminated with respect to the Fund: (a) by the Fund at any time, without the payment of any penalty, by the vote of a majority of Trustees of the Trust or by the vote of a majority of the outstanding voting securities of the Fund, (b) by the Adviser at any time, without the payment of any penalty, 5 on not more than 60 days' nor less than 30 days' written notice to the Sub-Adviser, or (c) by the Sub-Adviser at any time, without the payment of any penalty, on 90 days' written notice to the Adviser. This Agreement shall terminate automatically and immediately in the event of its assignment, or in the event of a termination of the Advisory Agreement with the Trust. As used in this Paragraph 9, the terms "assignment" and "vote of a majority of the outstanding voting securities" shall have the respective meanings set forth in the 1940 Act and the rules and regulations thereunder, subject to such exceptions as may be granted by the SEC under the 1940 Act. 10. GOVERNING LAW. This Agreement shall be governed by the internal laws of the Commonwealth of Massachusetts, without regard to conflict of law principles; provided, however, that nothing herein shall be construed as being inconsistent with the 1940 Act. 11. SEVERABILITY. Should any part of this Agreement be held invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors. 12. NOTICE: Any notice, advice or report to be given pursuant to this Agreement shall be deemed sufficient if delivered or mailed by registered, certified or overnight mail, postage prepaid addressed by the party giving notice to the other party at the last address furnished by the other party: To the Adviser at: SEI Investments Management Corporation One Freedom Valley Road Oaks, PA 19456 Attention: Legal Department To the Sub-Adviser at: Alliance Capital Management L.P. 1345 Avenue of the Americas New York, NY 10105 Attention: Corporate Legal 13. NAMES. The Trust may use the names "Alliance Capital Management L.P.," "Alliance Capital Management," "Alliance Capital," or "Alliance" only for so long as this Agreement or any extension, renewal or amendment hereof remains in effect. At such times as this Agreement shall no longer be in effect, the Trust shall cease to use such names or any other name indicating that it is advised by or otherwise connected with the Sub-Adviser. 14. NON-HIRE/NON-SOLICITATION. The parties hereby agree that so long as the Sub-Adviser provides services to the Adviser or the Trust and for a period of one year following the date on which the Sub-Adviser ceases to provide services to the Adviser and the Trust, neither party shall for any reason, directly or indirectly, on its own behalf or on behalf of others, hire any person employed by the other party, whether or not such person is a full-time employee or whether or not any person's employment is pursuant to a written agreement or 6 is at-will, without the express written consent of the other party. The parties further agree that, to the extent that a party breaches the covenant described in this paragraph, the other party shall be entitled to pursue all appropriate remedies in law or equity. 15. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and understanding between the parties hereto, and supersedes all prior agreements and understandings relating to this Agreement's subject matter. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but such counterparts shall, together, constitute only one instrument. In the event the terms of this Agreement are applicable to more than one portfolio of the Trust (for purposes of this Paragraph 15, each a "Fund"), the Adviser is entering into this Agreement with the Sub-Adviser on behalf of the respective Funds severally and not jointly, with the express intention that the provisions contained in each numbered paragraph hereof shall be understood as applying separately with respect to each Fund as if contained in separate agreements between the Adviser and Sub-Adviser for each such Fund. In the event that this Agreement is made applicable to any additional Funds by way of a Schedule executed subsequent to the date first indicated above, provisions of such Schedule shall be deemed to be incorporated into this Agreement as it relates to such Fund so that, for example, the execution date for purposes of Paragraph 9 of this Agreement with respect to such Fund shall be the execution date of the relevant Schedule. 16. MISCELLANEOUS. (a) A copy of the Declaration of Trust is on file with the Secretary of State of the Commonwealth of Massachusetts, and notice is hereby given that the obligations of this instrument are not binding upon any of the Trustees, officers or shareholders of the Fund or the Trust. 7 (b) Where the effect of a requirement of the 1940 Act reflected in any provision of this Agreement is altered by a rule, regulation or order of the SEC, whether of special or general application, such provision shall be deemed to incorporate the effect of such rule, regulation or order. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their officers designated below as of the day and year first written above. SEI INVESTMENTS MANAGEMENT CORPORATION ALLIANCE CAPITAL MANAGEMENT L.P. BY: ALLIANCE CAPITAL MANAGEMENT CORPORATION, ITS GENERAL PARTNER By: By: /s/ Todd Cipperman /s/ Louis T. Mangan - -------------------------------------- -------------------------------------- Name: Name: Todd Cipperman Louis T. Mangan - -------------------------------------- -------------------------------------- Title: Title: Senior Vice President Assistant Secretary - -------------------------------------- -------------------------------------- 8 SCHEDULE A TO THE SUB-ADVISORY AGREEMENT BETWEEN SEI INVESTMENTS MANAGEMENT CORPORATION AND ALLIANCE CAPITAL MANAGEMENT L. P. AS OF JULY 1ST, 2003 SEI INSTITUTIONAL INTERNATIONAL TRUST International Equity Fund 9 SCHEDULE B TO THE SUB-ADVISORY AGREEMENT BETWEEN SEI INVESTMENTS MANAGEMENT CORPORATION AND ALLIANCE CAPITAL MANAGEMENT L. P. AS OF JULY 1, 2003 Pursuant to Paragraph 4, the Adviser shall pay the Sub-Adviser compensation at an annual rate as follows: SEI INSTITUTIONAL INTERNATIONAL TRUST International Equity Fund Agreed and Accepted: SEI INVESTMENTS MANAGEMENT CORPORATION ALLIANCE CAPITAL MANAGEMENT L.P. BY: ALLIANCE CAPITAL MANAGEMENT CORPORATION, ITS GENERAL PARTNER By: By: /s/ Todd Cipperman /s/ Louis T. Mangan - -------------------------------------- -------------------------------------- Name: Name: Todd Cipperman Louis T. Mangan - -------------------------------------- -------------------------------------- Title: Title: Senior Vice President Assistant Secretary - -------------------------------------- -------------------------------------- 10 EX-99.B(D)(11) 7 a2123004zex-99_bd11.txt EXHIBIT 99.B(D)(11) Exhibit 99.B(d)(11) INVESTMENT SUB-ADVISORY AGREEMENT SEI INSTITUTIONAL INTERNATIONAL TRUST AGREEMENT made this 30th day of September, 2003 between SEI Investments Management Corporation (the "Adviser") and Citigroup Asset Management Ltd. (the "Sub-Adviser"). WHEREAS, SEI Institutional International Trust, a Massachusetts business trust (the "Trust"), is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"); and WHEREAS, the Adviser has entered into an Investment Advisory Agreement dated December 16, 1994 (the "Advisory Agreement") with the Trust, pursuant to which the Adviser acts as investment adviser to the series of the Trust set forth on Schedule A attached hereto (the "Fund"), as such Schedule may be amended by mutual agreement of the parties hereto; and WHEREAS, the Adviser, with the approval of the Trust, desires to retain the Sub-Adviser to provide investment advisory services to the Adviser in connection with the management of the Fund, and the Sub-Adviser is willing to render such investment advisory services. NOW, THEREFORE, the parties hereto agree as follows: 1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and the Trust's Board of Trustees, the Sub-Adviser shall manage all of the securities and other assets of the Fund entrusted to it hereunder (the "Assets"), including the purchase, retention and disposition of the Assets, in accordance with the Fund's investment objectives, policies and restrictions as stated in the Fund's prospectus and statement of additional information, as currently in effect and as amended or supplemented from time to time (referred to collectively as the "Prospectus"); provided that the Sub-Adviser shall not be charged with complying with any amended or supplemented Prospectus until such Prospectus has been delivered to the Sub-Adviser, and subject to the following: (a) The Sub-Adviser shall, in consultation with and subject to the direction of the Adviser, determine from time to time what Assets will be purchased, retained or sold by the Fund, and what portion of the Assets will be invested or held uninvested in cash. (b) In the performance of its duties and obligations under this Agreement, the Sub-Adviser shall act in conformity with the Trust's Declaration of Trust (as defined herein) and the Prospectus and with the instructions and directions of the Adviser and of the Board of Trustees of the Trust and will conform to and comply with the requirements of the 1940 Act, the Internal Revenue Code of 1986 (the "Code"), and all other applicable federal and state laws and regulations, as each is amended from time to time. (c) The Sub-Adviser shall determine the Assets to be purchased or sold by the Fund as provided in subparagraph (a) and will place orders with or through such persons, brokers or dealers to carry out the policy with respect to brokerage set forth in the Fund's Prospectus or as the Board of Trustees or the Adviser may direct from time to time, in 1 conformity with all federal securities laws. In executing Fund transactions and selecting brokers or dealers, the Sub-Adviser will use its best efforts to seek on behalf of the Fund the best overall terms available. In assessing the best overall terms available for any transaction, the Sub-Adviser shall consider all factors that it deems relevant, including the breadth of the market in the security, the price of the security, the financial condition and execution capability of the broker or dealer, and the reasonableness of the commission, if any, both for the specific transaction and on a continuing basis. In evaluating the best overall terms available, and in selecting the broker-dealer to execute a particular transaction, the Sub-Adviser may also consider the brokerage and research services provided (as those terms are defined in Section 28(e) of the Securities Exchange Act of 1934 (the "Exchange Act")). Consistent with any guidelines established by the Board of Trustees of the Trust and Section 28(e) of the Exchange Act, the Sub-Adviser is authorized to pay to a broker or dealer who provides such brokerage and research services a commission for executing a portfolio transaction for the Fund which is in excess of the amount of commission another broker or dealer would have charged for effecting that transaction if, but only if, the Sub-Adviser determines in good faith that such commission was reasonable in relation to the value of the brokerage and research services provided by such broker or dealer -- viewed in terms of that particular transaction or in terms of the overall responsibilities of the Sub-Adviser to its discretionary clients, including the Fund. In addition, the Sub-Adviser is authorized to allocate purchase and sale orders for securities to brokers or dealers (including brokers and dealers that are affiliated with the Adviser, Sub-Adviser or the Trust's principal underwriter) and to take into account the sale of shares of the Trust if the Sub-Adviser believes that the quality of the transaction and the commission are comparable to what they would be with other qualified firms. In no instance, however, will the Fund's Assets be purchased from or sold to the Adviser, Sub-Adviser, the Trust's principal underwriter, or any affiliated person of either the Trust, Adviser, the Sub-Adviser or the principal underwriter, acting as principal in the transaction, except to the extent permitted by the Securities and Exchange Commission ("SEC") and the 1940 Act. (d) The Sub-Adviser shall maintain all books and records with respect to transactions involving the Assets required by subparagraphs (b)(5), (6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act. The Sub-Adviser shall provide to the Adviser or the Board of Trustees such periodic and special reports, balance sheets or financial information, and such other information with regard to its affairs as the Adviser or Board of Trustees may reasonably request. The Sub-Adviser shall keep the books and records relating to the Assets required to be maintained by the Sub-Adviser under this Agreement and shall timely furnish to the Adviser all information relating to the Sub-Adviser's services under this Agreement needed by the Adviser to keep the other books and records of the Fund required by Rule 31a-1 under the 1940 Act. The Sub-Adviser shall also furnish to the Adviser any other information relating to the Assets that is required to be filed by the Adviser or the Trust with the SEC or sent to shareholders under the 1940 Act (including the rules adopted thereunder) or any exemptive or other relief that the Adviser or the Trust obtains from the SEC. The Sub-Adviser agrees that all records that it maintains on behalf of the Fund are 2 property of the Fund and the Sub-Adviser will surrender promptly to the Fund any of such records upon the Fund's request; provided, however, that the Sub-Adviser may retain a copy of such records. In addition, for the duration of this Agreement, the Sub-Adviser shall preserve for the periods prescribed by Rule 31a-2 under the 1940 Act any such records as are required to be maintained by it pursuant to this Agreement, and shall transfer said records to any successor sub-adviser upon the termination of this Agreement (or, if there is no successor sub-adviser, to the Adviser). (e) The Sub-Adviser shall provide the Fund's custodian on each business day with information relating to all transactions concerning the Fund's Assets and shall provide the Adviser with such information upon request of the Adviser. (f) The investment management services provided by the Sub-Adviser under this Agreement are not to be deemed exclusive and the Sub-Adviser shall be free to render similar services to others, as long as such services do not impair the services rendered to the Adviser or the Trust. (g) The Sub-Adviser shall promptly notify the Adviser of any financial condition that is likely to impair the Sub-Adviser's ability to fulfill its commitment under this Agreement. (h) (i) Except under the circumstances set forth in subsection (ii), the Sub-Adviser shall not be responsible for reviewing proxy solicitation materials or voting and handling proxies in relation to the securities held as Assets in the Fund. If the Sub-Adviser receives a misdirected proxy, it shall promptly forward such misdirected proxy to the Adviser. (ii) The Sub-Adviser hereby agrees that upon 60 days' written notice from the Adviser, the Sub-Adviser shall assume responsibility for reviewing proxy solicitation materials and voting proxies in relation to the securities held as Assets in the Fund. As of the time the Sub-Adviser shall assume such responsibilities with respect to proxies under this sub-section (ii), the Adviser shall instruct the custodian and other parties providing services to the Fund to promptly forward misdirected proxies to the Sub-Adviser. (i) In performance of its duties and obligations under this Agreement, the Sub-Adviser shall not consult with any other sub-adviser to the Fund or a sub-adviser to a portfolio that is under common control with the Fund concerning the Assets, except as permitted by the policies and procedures of the Fund. The Sub-Adviser shall not provide investment advice to any assets of the Fund other than the Assets. Services to be furnished by the Sub-Adviser under this Agreement may be furnished through the medium of any of the Sub-Adviser's control affiliates, partners, officers or employees. 2. DUTIES OF THE ADVISER. The Adviser shall continue to have responsibility for all services to be provided to the Fund pursuant to the Advisory Agreement and shall oversee and 3 review the Sub-Adviser's performance of its duties under this Agreement; provided, however, that in connection with its management of the Assets, nothing herein shall be construed to relieve the Sub-Adviser of responsibility for compliance with the Trust's Declaration of Trust (as defined herein), the Prospectus, the instructions and directions of the Board of Trustees of the Trust, the requirements of the 1940 Act, the Code, and all other applicable federal and state laws and regulations, as each is amended from time to time. 3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with copies of each of the following documents: (a) The Trust's Agreement and Declaration of Trust, as filed with the Secretary of State of the Commonwealth of Massachusetts (such Agreement and Declaration of Trust, as in effect on the date of this Agreement and as amended from time to time, herein called the "Declaration of Trust"); (b) By-Laws of the Trust (such By-Laws, as in effect on the date of this Agreement and as amended from time to time, are herein called the "By-Laws"); and (c) Prospectus of the Fund. 4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the Sub-Adviser pursuant to this Agreement, the Adviser will pay the Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation therefor, a sub-advisory fee at the rate specified in Schedule B which is attached hereto and made part of this Agreement. The fee will be calculated based on the average daily value of the Assets under the Sub-Adviser's management and will be paid to the Sub-Adviser monthly. Except as may otherwise be prohibited by law or regulation (including any then current SEC staff interpretation), the Sub-Adviser may, in its discretion and from time to time, waive a portion of its fee. 5. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the Adviser from and against any and all claims, losses, liabilities or damages (including reasonable attorney's fees and other related expenses) howsoever arising from or in connection with the performance of the Sub-Adviser's obligations under this Agreement; provided, however, that the Sub-Adviser's obligation under this Paragraph 5 shall be reduced to the extent that the claim against, or the loss, liability or damage experienced by the Adviser, is caused by or is otherwise directly related to the Adviser's own willful misfeasance, bad faith or negligence, or to the reckless disregard of its duties under this Agreement. The Adviser shall indemnify and hold harmless the Sub-Adviser from and against any and all claims, losses, liabilities or damages (including reasonable attorney's fees and other related expenses) howsoever arising from or in connection with the performance of the Adviser's obligations under this Agreement; provided, however, that the Adviser's obligation under this Paragraph 5 shall be reduced to the extent that the claim against, or the loss, liability or damage experienced by the Sub-Adviser, is caused by or is otherwise 4 directly related to the Sub-Adviser's own willful misfeasance, bad faith or negligence, or to the reckless disregard of its duties under this Agreement. 6. LIMITATION OF LIABILITY OF SUB-ADVISER. The Sub-Adviser shall not be liable for any error of judgment or for any loss suffered by the Adviser in connection with the performance of its obligations under this Agreement, except a loss resulting from a breach of fiduciary duty with respect to the receipt of compensation for services (in which case any award of damages shall be limited to the period and the amount set forth in Section 36(b)(3) of the 1940 Act), or a loss resulting from willful misfeasance, bad faith or negligence on the Sub-Adviser's part in the performance of its duties or from reckless disregard of its obligations and duties under this Agreement, except as may otherwise be provided under provisions of applicable state law which cannot be waived or modified hereby. 7. DURATION AND TERMINATION. This Agreement shall become effective upon approval by the Trust's Board of Trustees and its execution by the parties hereto. Pursuant to the exemptive relief obtained in the SEC Order dated April 29, 1996, Investment Company Act Release No. 21921, approval of the Agreement by a majority of the outstanding voting securities of the Fund is not required, and the Sub-Adviser acknowledges that it and any other sub-adviser so selected and approved shall be without the protection (if any) accorded by shareholder approval of an investment adviser's receipt of compensation under Section 36(b) of the 1940 Act. This Agreement shall continue in effect for a period of more than two years from the date hereof only so long as continuance is specifically approved at least annually in conformance with the 1940 Act; provided, however, that this Agreement may be terminated with respect to the Fund (a) by the Fund at any time, without the payment of any penalty, by the vote of a majority of Trustees of the Trust or by the vote of a majority of the outstanding voting securities of the Fund, (b) by the Adviser at any time, without the payment of any penalty, on not more than 60 days' nor less than 30 days' written notice to the Sub-Adviser, or (c) by the Sub-Adviser at any time, without the payment of any penalty, on 90 days' written notice to the Adviser. This Agreement shall terminate automatically and immediately in the event of its assignment, or in the event of a termination of the Advisory Agreement with the Trust. As used in this Paragraph 7, the terms "assignment" and "vote of a majority of the outstanding voting securities" shall have the respective meanings set forth in the 1940 Act and the rules and regulations thereunder, subject to such exceptions as may be granted by the SEC under the 1940 Act. 5 8. USE OF CITIGROUP NAME. It is understood that the name "Citigroup Asset Management Ltd." or "Citigroup" or any derivative thereof, any tradename, trademark, trade device, service mark, symbol or logo associated with these names are the valuable property of the Sub-Adviser and that the Adviser has the right to use such name (or derivative or logo), in offering materials or promotional or sales-related materials of the Fund, only with the prior written approval of the Sub-Adviser, such approval not to be unreasonably withheld, and for so long as the Sub-Adviser is Sub-Adviser of the Fund. Notwithstanding the foregoing, the Sub-Adviser's approval is not required when (i) previously approved materials are re-issued with minor modifications, (ii) the Adviser and Sub-Adviser identify materials which they jointly determine do not require the Sub-Adviser's approval and (iii) used as required to be disclosed in the Prospectus of the Fund. Upon termination of this Agreement, the Fund and the Adviser shall forthwith cease to use such name (or derivative or logo), although the Adviser may continue to use such name (or derivative or logo) as permitted by other then current sub-advisory agreements in which the Adviser and Sub-Adviser have executed. 9. GOVERNING LAW. This Agreement shall be governed by the internal laws of the Commonwealth of Massachusetts, without regard to conflict of law principles; provided, however, that nothing herein shall be construed as being inconsistent with the 1940 Act. 10. SEVERABILITY. Should any part of this Agreement be held invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors. 11. NOTICE: Any notice, advice or report to be given pursuant to this Agreement shall be deemed sufficient if delivered or mailed by registered, certified or overnight mail, postage prepaid addressed by the party giving notice to the other party at the last address furnished by the other party: To the Adviser at: SEI Investments Management Corporation One Freedom Valley Road Oaks, PA 19456 Attention: Legal Department To the Sub-Adviser at: Citigroup Asset Management Ltd. Citigroup Centre, Canada Square Canary Wharf London E14 5LB, United Kingdom Attention: Client Servicing Department, with a copy to the Legal Department 6 12. NON-HIRE/NON-SOLICITATION. The Sub-Adviser hereby agrees that so long as the Sub-Adviser provides services to the Adviser or the Trust and for a period of one year following the date on which the Sub-Adviser ceases to provide services to the Adviser and the Trust, the Sub-Adviser shall not for any reason, directly or indirectly, on the Sub-Adviser's own behalf or on behalf of others, hire any person employed by the Adviser, whether or not such person is a full-time employee or whether or not any person's employment is pursuant to a written agreement or is at-will. The Sub-Adviser further agrees that, to the extent that the Sub-Adviser breaches the covenant described in this paragraph, the Adviser shall be entitled to pursue all appropriate remedies in law or equity. 13. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and understanding between the parties hereto, and supersedes all prior agreements and understandings relating to this Agreement's subject matter. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but such counterparts shall, together, constitute only one instrument. In the event the terms of this Agreement are applicable to more than one portfolio of the Trust (for purposes of this Paragraph 13, each a "Fund"), the Adviser is entering into this Agreement with the Sub-Adviser on behalf of the respective Funds severally and not jointly, with the express intention that the provisions contained in each numbered paragraph hereof shall be understood as applying separately with respect to each Fund as if contained in separate agreements between the Adviser and Sub-Adviser for each such Fund. In the event that this Agreement is made applicable to any additional Funds by way of a Schedule executed subsequent to the date first indicated above, provisions of such Schedule shall be deemed to be incorporated into this Agreement as it relates to such Fund so that, for example, the execution date for purposes of Paragraph 7 of this Agreement with respect to such Fund shall be the execution date of the relevant Schedule. 14. MISCELLANEOUS. (a) A copy of the Declaration of Trust is on file with the Secretary of State of the Commonwealth of Massachusetts, and notice is hereby given that the obligations of this instrument are not binding upon any of the Trustees, officers or shareholders of the Fund or the Trust. 7 (b) Where the effect of a requirement of the 1940 Act reflected in any provision of this Agreement is altered by a rule, regulation or order of the SEC, whether of special or general application, such provision shall be deemed to incorporate the effect of such rule, regulation or order. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their officers designated below as of the day and year first written above. SEI INVESTMENTS MANAGEMENT CORPORATION CITIGROUP ASSET MANAGEMENT LTD. By: By: /s/ Todd Cipperman /s/ Ursula Schliessler - -------------------------------------- -------------------------------------- Name: Name: Todd Cipperman Ursula Schliessler - -------------------------------------- -------------------------------------- Title: Title: Senior Vice President Director - -------------------------------------- -------------------------------------- 8 SCHEDULE A TO THE SUB-ADVISORY AGREEMENT BETWEEN SEI INVESTMENTS MANAGEMENT CORPORATION AND CITIGROUP ASSET MANAGEMENT LTD. AS OF SEPTEMBER 30, 2003 SEI INSTITUTIONAL INTERNATIONAL TRUST EMERGING MARKETS EQUITY FUND 9 SCHEDULE B TO THE SUB-ADVISORY AGREEMENT BETWEEN SEI INVESTMENTS MANAGEMENT CORPORATION AND CITIGROUP ASSET MANAGEMENT LTD. AS OF SEPTEMBER 30, 2003 Pursuant to Paragraph 4, the Adviser shall pay the Sub-Adviser compensation at an annual rate as follows: SEI INSTITUTIONAL INTERNATIONAL TRUST Emerging Markets Equity Fund Agreed and Accepted: SEI INVESTMENTS MANAGEMENT CORPORATION CITIGROUP ASSET MANAGEMENT LTD. By: By: /s/ Todd Cipperman /s/ Ursula Schliessler - -------------------------------------- -------------------------------------- Name: Name: Todd Cipperman Ursula Schliessler - -------------------------------------- -------------------------------------- Title: Title: Senior Vice President Director - -------------------------------------- -------------------------------------- 10 EX-99.B(D)(12) 8 a2123004zex-99_bd12.txt EXHIBIT 99.B(D)(12) Exhibit 99.B(d)(12) INVESTMENT SUB-ADVISORY AGREEMENT SEI INSTITUTIONAL INTERNATIONAL TRUST AGREEMENT made this 11th day of March, 2003 between SEI Investments Management Corporation (the "Adviser") and Emerging Markets Management, L.L.C. (the "Sub-Adviser"). WHEREAS, SEI Institutional International Trust, a Massachusetts business trust (the "Trust"), is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"); and WHEREAS, the Adviser has entered into an Investment Advisory Agreement dated December 16, 1994 (the "Advisory Agreement") with the Trust, pursuant to which the Adviser acts as investment adviser to the series of the Trust set forth on Schedule A attached hereto (the "Fund"), as such Schedule may be amended by mutual agreement of the parties hereto; and WHEREAS, the Adviser, with the approval of the Trust, desires to retain the Sub-Adviser to provide investment advisory services to the Adviser in connection with the management of the Fund, and the Sub-Adviser is willing to render such investment advisory services. NOW, THEREFORE, the parties hereto agree as follows: 1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and the Trust's Board of Trustees, the Sub-Adviser shall manage all of the securities and other assets of the Fund entrusted to it hereunder (the "Assets"), including the purchase, retention and disposition of the Assets, in accordance with the Fund's investment objectives, policies and restrictions as stated in the Fund's prospectus and statement of additional information, as currently in effect and as amended or supplemented from time to time (referred to collectively as the "Prospectus"), and subject to the following: (a) The Sub-Adviser shall, subject to the direction of the Adviser and Paragraph 1(b), determine in its discretion from time to time what Assets will be purchased, retained or sold by the Fund, and what portion of the Assets will be invested or held uninvested in cash. Consistent with any policies established by the Trust and/or the Adviser, the Sub-Adviser is authorized to enter into agreements and execute any documents required to manage the Assets. (b) In the performance of its duties and obligations under this Agreement, the Sub-Adviser shall act in conformity with the Trust's Declaration of Trust (as defined herein) and the Prospectus and with the instructions and directions of the Adviser and of the Board of Trustees of the Trust and will conform to and comply with the requirements of the 1940 Act, the Internal Revenue Code of 1986 (the "Code"), and all other applicable federal and state laws and regulations, as each is amended from time to time. (c) The Sub-Adviser shall determine the Assets to be purchased or sold by the Fund as provided in subparagraph (a) and will place orders with or through such persons, brokers or dealers to carry out the policy with respect to brokerage set forth in the Fund's 1 Registration Statement (as defined herein) and Prospectus or as the Board of Trustees or the Adviser may direct from time to time, in conformity with all federal securities laws. In executing Fund transactions and selecting brokers or dealers, the Sub-Adviser will use its best efforts to seek on behalf of the Fund the best overall terms available. In assessing the best overall terms available for any transaction, the Sub-Adviser shall consider all factors that it deems relevant, including the breadth of the market in the security, the price of the security, the financial condition and execution capability of the broker or dealer, and the reasonableness of the commission, if any, both for the specific transaction and on a continuing basis. In evaluating the best overall terms available, and in selecting the broker-dealer to execute a particular transaction, the Sub-Adviser may also consider the brokerage and research services provided (as those terms are defined in Section 28(e) of the Securities Exchange Act of 1934 (the "Exchange Act")). Consistent with any guidelines established by the Board of Trustees of the Trust and Section 28(e) of the Exchange Act, the Sub-Adviser is authorized to pay to a broker or dealer who provides such brokerage and research services a commission for executing a portfolio transaction for the Fund which is in excess of the amount of commission another broker or dealer would have charged for effecting that transaction if, but only if, the Sub-Adviser determines in good faith that such commission was reasonable in relation to the value of the brokerage and research services provided by such broker or dealer -- viewed in terms of that particular transaction or in terms of the overall responsibilities of the Sub-Adviser to its discretionary clients, including the Fund. In addition, the Sub-Adviser is authorized to allocate purchase and sale orders for securities to brokers or dealers (including brokers and dealers that are affiliated with the Adviser, Sub-Adviser or the Trust's principal underwriter) and to take into account the sale of shares of the Trust if the Sub-Adviser believes that the quality of the transaction and the commission are comparable to what they would be with other qualified firms. In no instance, however, will the Fund's Assets be purchased from or sold to the Adviser, Sub-Adviser, the Trust's principal underwriter, or any affiliated person of either the Trust, Adviser, the Sub-Adviser or the principal underwriter, acting as principal in the transaction, except to the extent permitted by the Securities and Exchange Commission ("SEC") and the 1940 Act. (d) The Sub-Adviser shall maintain all books and records with respect to transactions involving the Assets required by subparagraphs (b)(5), (6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act. The Sub-Adviser shall provide to the Adviser or the Board of Trustees such periodic and special reports, balance sheets or financial information, and such other information with regard to its affairs as the Adviser or Board of Trustees may reasonably request. The Sub-Adviser shall keep the books and records relating to the Assets required to be maintained by the Sub-Adviser under this Agreement and shall timely furnish to the Adviser all information relating to the Sub-Adviser's services under this Agreement needed by the Adviser to keep the other books and records of the Fund required by Rule 31a-1 under the 1940 Act. The Sub-Adviser shall also furnish to the Adviser any other information relating to the Assets that is required to be filed by the Adviser or the Trust with the SEC or sent to shareholders under the 1940 Act (including the rules adopted thereunder) or any exemptive or other relief that the Adviser or the Trust obtains from the 2 SEC. The Sub-Adviser agrees that all records that it maintains on behalf of the Fund are property of the Fund and the Sub-Adviser will surrender promptly to the Fund any of such records upon the Fund's request; provided, however, that the Sub-Adviser may retain a copy of such records. In addition, for the duration of this Agreement, the Sub-Adviser shall preserve for the periods prescribed by Rule 31a-2 under the 1940 Act any such records as are required to be maintained by it pursuant to this Agreement, and shall transfer said records to any successor sub-adviser upon the termination of this Agreement (or, if there is no successor sub-adviser, to the Adviser). (e) The Sub-Adviser shall provide the Fund's custodian on each business day with information relating to all transactions concerning the Fund's Assets and shall provide the Adviser with such information upon request of the Adviser. (f) The investment management services provided by the Sub-Adviser under this Agreement are not to be deemed exclusive and the Sub-Adviser shall be free to render similar services to others, as long as such services do not impair the services rendered to the Adviser or the Trust. (g) The Sub-Adviser shall promptly notify the Adviser of any financial condition that is likely to impair the Sub-Adviser's ability to fulfill its commitment under this Agreement. (h) The Sub-Adviser shall review all proxy solicitation materials and be responsible for voting and handling all proxies in relation to the securities held as Assets in the Fund. The Adviser shall instruct the custodian and other parties providing services to the Fund to promptly forward misdirected proxies to the Sub-Adviser. Services to be furnished by the Sub-Adviser under this Agreement may be furnished through the medium of any of the Sub-Adviser's control affiliates, partners, officers or employees. 2. DUTIES OF THE ADVISER. The Adviser shall continue to have responsibility for all services to be provided to the Fund pursuant to the Advisory Agreement and shall oversee and review the Sub-Adviser's performance of its duties under this Agreement; provided, however, that in connection with its management of the Assets, nothing herein shall be construed to relieve the Sub-Adviser of responsibility for compliance with the Trust's Declaration of Trust (as defined herein), the Prospectus, the instructions and directions of the Board of Trustees of the Trust, the requirements of the 1940 Act, the Code, and all other applicable federal and state laws and regulations, as each is amended from time to time. 3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with copies properly certified or authenticated of each of the following documents: (a) The Trust's Agreement and Declaration of Trust, as filed with the Secretary of State of the Commonwealth of Massachusetts (such Agreement and Declaration of Trust, as in 3 effect on the date of this Agreement and as amended from time to time, herein called the "Declaration of Trust"); (b) By-Laws of the Trust (such By-Laws, as in effect on the date of this Agreement and as amended from time to time, are herein called the "By-Laws"); and (c) Prospectus of the Fund. 4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the Sub-Adviser pursuant to this Agreement, the Adviser will pay the Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation therefor, a sub-advisory fee at the rate specified in Schedule B which is attached hereto and made part of this Agreement. The fee will be calculated based on the average daily value of the Assets under the Sub-Adviser's management and will be paid to the Sub-Adviser monthly. Except as may otherwise be prohibited by law or regulation (including any then current SEC staff interpretation), the Sub-Adviser may, in its discretion and from time to time, waive a portion of its fee. 5. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the Adviser from and against any and all claims, losses, liabilities or damages (including reasonable attorney's fees and other related expenses) incurred by the Adviser caused by the gross negligence, willful default, fraud or bad faith of the Sub-Adviser in the performance of its duties hereunder or as may otherwise be required by law; provided, however, that the Sub-Adviser's obligation under this Paragraph 5 shall be reduced to the extent that the claim against, or the loss, liability or damage experienced by the Adviser, is caused by or is otherwise directly related to the Adviser's own willful misfeasance, bad faith or gross negligence, or to the reckless disregard of its duties under this Agreement. The Adviser shall indemnify and hold harmless the Sub-Adviser from and against any and all claims, losses, liabilities or damages (including reasonable attorney's fees and other related expenses) incurred by the Sub-Adviser caused by the gross negligence, willful default, fraud or bad faith of the Adviser in the performance of its duties hereunder or as may otherwise be required by law; provided, however, that the Adviser's obligation under this Paragraph 5 shall be reduced to the extent that the claim against, or the loss, liability or damage experienced by the Sub-Adviser, is caused by or is otherwise directly related to the Sub-Adviser's own willful misfeasance, bad faith or gross negligence, or to the reckless disregard of its duties under this Agreement. 6. DURATION AND TERMINATION. This Agreement shall become effective upon approval by the Trust's Board of Trustees and its execution by the parties hereto. Pursuant to the exemptive relief obtained in the SEC Order dated April 29, 1996, Investment Company Act Release No. 21921, approval of the Agreement by a majority of the outstanding voting securities of the Fund is not required, and the Sub-Adviser acknowledges that it and any other sub-adviser so selected and approved shall be without the protection (if any) accorded by shareholder approval of an investment adviser's receipt of compensation under Section 36(b) of the 1940 Act. 4 This Agreement shall continue in effect for a period of more than two years from the date hereof only so long as continuance is specifically approved at least annually in conformance with the 1940 Act; provided, however, that this Agreement may be terminated with respect to the Fund (a) by the Fund at any time, without the payment of any penalty, by the vote of a majority of Trustees of the Trust or by the vote of a majority of the outstanding voting securities of the Fund, (b) by the Adviser at any time, without the payment of any penalty, on not more than 60 days' nor less than 30 days' written notice to the Sub-Adviser, or (c) by the Sub-Adviser at any time, without the payment of any penalty, on 90 days' written notice to the Adviser. This Agreement shall terminate automatically and immediately in the event of its assignment, or in the event of a termination of the Advisory Agreement with the Trust. As used in this Paragraph 6, the terms "assignment" and "vote of a majority of the outstanding voting securities" shall have the respective meanings set forth in the 1940 Act and the rules and regulations thereunder, subject to such exceptions as may be granted by the SEC under the 1940 Act. 7. GOVERNING LAW. This Agreement shall be governed by the internal laws of the Commonwealth of Massachusetts, without regard to conflict of law principles; provided, however, that nothing herein shall be construed as being inconsistent with the 1940 Act. 8. SEVERABILITY. Should any part of this Agreement be held invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors. 9. NOTICE: Any notice, advice or report to be given pursuant to this Agreement shall be deemed sufficient if delivered or mailed by registered, certified or overnight mail, postage prepaid addressed by the party giving notice to the other party at the last address furnished by the other party: To the Adviser at: SEI Investments Management Corporation One Freedom Valley Road Oaks, PA 19456 ATTENTION: Legal Department To the Sub-Adviser at: Emerging Markets Management, L.L.C. 1001 19th Street North, 17th Floor Arlington, VA 22209-1722 ATTENTION: Felicia Morrow, Managing Director; and Yvonne Wise, Manager, Client Services 10. NON-HIRE/NON-SOLICITATION. The Sub-Adviser hereby agrees that so long as the Sub-Adviser provides services to the Adviser or the Trust and for a period of one year following the date on which the Sub-Adviser ceases to provide services to the Adviser and the Trust, the Sub-Adviser shall not for any reason, directly or indirectly, on the Sub-Adviser's own behalf or on behalf of others, hire any person employed by the Adviser, 5 whether or not such person is a full-time employee or whether or not any person's employment is pursuant to a written agreement or is at-will. The Sub-Adviser further agrees that, to the extent that the Sub-Adviser breaches the covenant described in this paragraph, the Adviser shall be entitled to pursue all appropriate remedies in law or equity. 11. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and understanding between the parties hereto, and supersedes all prior agreements and understandings relating to this Agreement's subject matter. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but such counterparts shall, together, constitute only one instrument. In the event the terms of this Agreement are applicable to more than one portfolio of the Trust (for purposes of this Paragraph 11, each a "Fund"), the Adviser is entering into this Agreement with the Sub-Adviser on behalf of the respective Funds severally and not jointly, with the express intention that the provisions contained in each numbered paragraph hereof shall be understood as applying separately with respect to each Fund as if contained in separate agreements between the Adviser and Sub-Adviser for each such Fund. In the event that this Agreement is made applicable to any additional Funds by way of a Schedule executed subsequent to the date first indicated above, provisions of such Schedule shall be deemed to be incorporated into this Agreement as it relates to such Fund so that, for example, the execution date for purposes of Paragraph 6 of this Agreement with respect to such Fund shall be the execution date of the relevant Schedule. 6 12. MISCELLANEOUS. (a) A copy of the Declaration of Trust is on file with the Secretary of State of the Commonwealth of Massachusetts, and notice is hereby given that the obligations of this instrument are not binding upon any of the Trustees, officers or shareholders of the Fund or the Trust. (b) Where the effect of a requirement of the 1940 Act reflected in any provision of this Agreement is altered by a rule, regulation or order of the SEC, whether of special or general application, such provision shall be deemed to incorporate the effect of such rule, regulation or order. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their officers designated below as of the day and year first written above. SEI INVESTMENTS MANAGEMENT CORPORATION EMERGING MARKETS MANAGEMENT, L.L.C. By: By: /s/ Todd Cipperman /s/ Felicia Morrow - -------------------------------------- -------------------------------------- Name: Name: Todd Cipperman Felicia Morrow - -------------------------------------- -------------------------------------- Title: Title: Senior Vice President Managing Director - -------------------------------------- -------------------------------------- 7 SCHEDULE A TO THE SUB-ADVISORY AGREEMENT BETWEEN SEI INVESTMENTS MANAGEMENT CORPORATION AND EMERGING MARKETS MANAGEMENT, L.L.C. AS OF MARCH 11, 2003 SEI INSTITUTIONAL INTERNATIONAL TRUST EMERGING MARKETS EQUITY FUND 8 SCHEDULE B TO THE SUB-ADVISORY AGREEMENT BETWEEN SEI INVESTMENTS MANAGEMENT CORPORATION AND EMERGING MARKETS MANAGEMENT, L.L.C. AS OF MARCH 11, 2003 Pursuant to Paragraph 4, the Adviser shall pay the Sub-Adviser compensation at an annual rate as follows: SEI INSTITUTIONAL INTERNATIONAL TRUST EMERGING MARKETS EQUITY FUND Agreed and Accepted: SEI INVESTMENTS MANAGEMENT CORPORATION EMERGING MARKETS MANAGEMENT, L.L.C. By: By: /s/ Todd Cipperman /s/ Felicia Morrow - -------------------------------------- -------------------------------------- Name: Name: Todd Cipperman Felicia Morrow - -------------------------------------- -------------------------------------- Title: Title: Senior Vice President Managing Director - -------------------------------------- -------------------------------------- 9 EX-99.B(D)(13) 9 a2123004zex-99_bd13.txt EXHIBIT 99.B(D)(13) Exhibit 99.B(d)(13) INVESTMENT SUB-ADVISORY AGREEMENT SEI INSTITUTIONAL INTERNATIONAL TRUST AGREEMENT made as of this 1st day of July, 2003 between SEI Investments Management Corporation (the "Adviser") and Fisher Investments, Inc. (the "Sub-Adviser"). WHEREAS, SEI Institutional International Trust, a Massachusetts business trust (the "Trust"), is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"); and WHEREAS, the Adviser has entered into an Investment Advisory Agreement dated December 16, 1994 (the "Advisory Agreement") with the Trust, pursuant to which the Adviser acts as investment adviser to the series of the Trust set forth on Schedule A attached hereto (the "Fund"), as such Schedule may be amended by mutual agreement of the parties hereto; and WHEREAS, the Adviser, with the approval of the Trust, desires to retain the Sub-Adviser to provide investment advisory services to the Adviser in connection with the management of the Fund, and the Sub-Adviser is willing to render such investment advisory services. NOW, THEREFORE, the parties hereto agree as follows: 1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and the Trust's Board of Trustees, the Sub-Adviser shall manage all of the securities and other assets of the Fund entrusted to it hereunder (the "Assets"), including the purchase, retention and disposition of the Assets, in accordance with the Fund's investment objectives, policies and restrictions as stated in the Fund's prospectus and statement of additional information, as currently in effect and as amended or supplemented from time to time (referred to collectively as the "Prospectus"), and subject to the following: (a) The Sub-Adviser shall, in consultation with and subject to the direction of the Adviser, determine from time to time what Assets will be purchased, retained or sold by the Fund, and what portion of the Assets will be invested or held uninvested in cash. (b) In the performance of its duties and obligations under this Agreement, the Sub-Adviser shall act in conformity with the Trust's Declaration of Trust (as defined herein) and the Prospectus and with the instructions and directions of the Adviser and of the Board of Trustees of the Trust and will conform to and comply with the requirements of the 1940 Act, the Internal Revenue Code of 1986 (the "Code"), and all other applicable federal and state laws and regulations, as each is amended from time to time. (c) The Sub-Adviser shall determine the Assets to be purchased or sold by the Fund as provided in subparagraph (a) and will place orders with or through such persons, brokers or dealers to carry out the policy with respect to brokerage set forth in the Fund's Prospectus or as the Board of Trustees or the Adviser may direct from time to time, in conformity with all federal securities laws. In executing Fund transactions and selecting brokers or dealers, the Sub-Adviser will use its best efforts to seek on behalf of the Fund the best overall terms available. In assessing the best overall terms available for any transaction, the Sub-Adviser shall consider all factors that it deems relevant, including the breadth of the market in the security, the price of the security, the financial condition and execution capability of the broker or dealer, and the reasonableness of the commission, if any, both for the specific transaction and on a continuing basis. In evaluating the best overall terms available, and in selecting the broker-dealer to execute a particular transaction, the Sub-Adviser may also consider the brokerage and research services provided (as those terms are defined in Section 28(e) of the Securities Exchange Act of 1934 (the "Exchange Act")). Consistent with any guidelines established by the Board of Trustees of the Trust and Section 28(e) of the Exchange Act, the Sub-Adviser is authorized to pay to a broker or dealer who provides such brokerage and research services a commission for executing a portfolio transaction for the Fund which is in excess of the amount of commission another broker or dealer would have charged for effecting that transaction if, but only if, the Sub-Adviser determines in good faith that such commission was reasonable in relation to the value of the brokerage and research services provided by such broker or dealer -- viewed in terms of that particular transaction or in terms of the overall responsibilities of the Sub-Adviser to its discretionary clients, including the Fund. In addition, the Sub-Adviser is authorized to allocate purchase and sale orders for securities to brokers or dealers (including brokers and dealers that are affiliated with the Adviser, Sub-Adviser or the Trust's principal underwriter) and to take into account the sale of shares of the Trust if the Sub-Adviser believes that the quality of the transaction and the commission are comparable to what they would be with other qualified firms. In no instance, however, will the Fund's Assets be purchased from or sold to the Adviser, Sub-Adviser, the Trust's principal underwriter, or any affiliated person of either the Trust, Adviser, the Sub-Adviser or the principal underwriter, acting as principal in the transaction, except to the extent permitted by the Securities and Exchange Commission ("SEC") and the 1940 Act. (d) The Sub-Adviser shall maintain all books and records with respect to transactions involving the Assets required by subparagraphs (b)(5), (6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act. The Sub-Adviser shall provide to the Adviser or the Board of Trustees such periodic and special reports, balance sheets or financial information, and such other information with regard to its affairs as the Adviser or Board of Trustees may reasonably request. The Sub-Adviser shall keep the books and records relating to the Assets required to be maintained by the Sub-Adviser under this Agreement and shall timely furnish to the Adviser all information relating to the Sub-Adviser's services under this Agreement needed by the Adviser to keep the other books and records of the Fund required by Rule 31a-1 under the 1940 Act. The Sub-Adviser shall also furnish to the Adviser any other information relating to the Assets that is required to be filed by the Adviser or the Trust with the SEC or sent to shareholders under the 1940 Act (including the rules adopted thereunder) or any exemptive or other relief that the Adviser or the Trust obtains from the SEC. The Sub-Adviser agrees that all records that it maintains on behalf of the Fund are property of the Fund and the Sub-Adviser will surrender promptly to the Fund any of such records upon the Fund's request; provided, however, that the Sub-Adviser may 2 retain a copy of such records. In addition, for the duration of this Agreement, the Sub-Adviser shall preserve for the periods prescribed by Rule 31a-2 under the 1940 Act any such records as are required to be maintained by it pursuant to this Agreement, and shall transfer said records to any successor sub-adviser upon the termination of this Agreement (or, if there is no successor sub-adviser, to the Adviser). (e) The Sub-Adviser shall provide the Fund's custodian on each business day with information relating to all transactions concerning the Fund's Assets and shall provide the Adviser with such information upon request of the Adviser. (f) The investment management services provided by the Sub-Adviser under this Agreement are not to be deemed exclusive and the Sub-Adviser shall be free to render similar services to others, as long as such services do not impair the services rendered to the Adviser or the Trust. (g) The Sub-Adviser shall promptly notify the Adviser of any financial condition that is likely to impair the Sub-Adviser's ability to fulfill its commitment under this Agreement. (h) (i) Except under the circumstances set forth in subsection (ii), the Sub-Adviser shall not be responsible for reviewing proxy solicitation materials or voting and handling proxies in relation to the securities held as Assets in the Fund. The Sub-Adviser shall instruct the custodian and other parties providing services to the Fund to promptly forward misdirected proxies to the Adviser. (ii) The Sub-Adviser hereby agrees that upon 60 days' written notice from the Adviser, the Sub-Adviser shall assume responsibility for reviewing proxy solicitation materials and voting proxies in relation to the securities held as Assets in the Fund. As of the time as the Sub-Adviser shall assume such responsibilities with respect to proxies under this sub-section (ii), the Adviser shall instruct the custodian and other parties providing services to the Fund to promptly forward misdirected proxies to the Sub-Adviser. (i) In performance of its duties and obligations under this Agreement, the Sub-Adviser shall not consult with any other sub-adviser to the Fund or a sub-adviser to a portfolio that is under common control with the Fund concerning the Assets, except as permitted by the policies and procedures of the Fund. The Sub-Adviser shall not provide investment advice to any assets of the Fund other than the Assets. Services to be furnished by the Sub-Adviser under this Agreement may be furnished through the medium of any of the Sub-Adviser's control affiliates, partners, officers or employees. 2. DUTIES OF THE ADVISER. The Adviser shall continue to have responsibility for all services to be provided to the Fund pursuant to the Advisory Agreement and shall oversee and review the Sub-Adviser's performance of its duties under this Agreement; provided, however, that in connection with its management of the Assets, nothing herein shall be 3 construed to relieve the Sub-Adviser of responsibility for compliance with the Trust's Declaration of Trust (as defined herein), the Prospectus, the instructions and directions of the Board of Trustees of the Trust, the requirements of the 1940 Act, the Code, and all other applicable federal and state laws and regulations, as each is amended from time to time. 3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with copies properly certified or authenticated of each of the following documents: (a) The Trust's Agreement and Declaration of Trust, as filed with the Secretary of State of the Commonwealth of Massachusetts (such Agreement and Declaration of Trust, as in effect on the date of this Agreement and as amended from time to time, herein called the "Declaration of Trust"); (b) By-Laws of the Trust (such By-Laws, as in effect on the date of this Agreement and as amended from time to time, are herein called the "By-Laws"); and (c) Prospectus of the Fund. 4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the Sub-Adviser pursuant to this Agreement, the Adviser will pay the Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation therefor, a sub-advisory fee at the rate specified in Schedule B which is attached hereto and made part of this Agreement. The fee will be calculated based on the average daily value of the Assets under the Sub-Adviser's management and will be paid to the Sub-Adviser monthly. Except as may otherwise be prohibited by law or regulation (including any then current SEC staff interpretation), the Sub-Adviser may, in its discretion and from time to time, waive a portion of its fee. 5. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the Adviser from and against any and all claims, losses, liabilities or damages (including reasonable attorney's fees and other related expenses) howsoever arising from or in connection with the performance of the Sub-Adviser's obligations under this Agreement; provided, however, that the Sub-Adviser's obligation under this Paragraph 5 shall be reduced to the extent that the claim against, or the loss, liability or damage experienced by the Adviser, is caused by or is otherwise directly related to the Adviser's own willful misfeasance, bad faith or negligence, or to the reckless disregard of its duties under this Agreement. The Adviser shall indemnify and hold harmless the Sub-Adviser from and against any and all claims, losses, liabilities or damages (including reasonable attorney's fees and other related expenses) howsoever arising from or in connection with the performance of the Adviser's obligations under this Agreement; provided, however, that the Adviser's obligation under this Paragraph 5 shall be reduced to the extent that the claim against, or the loss, liability or damage experienced by the Sub-Adviser, is caused by or is otherwise directly related to the Sub-Adviser's own willful misfeasance, bad faith or negligence, or to the reckless disregard of its duties under this Agreement. 4 6. DURATION AND TERMINATION. This Agreement shall become effective upon approval by the Trust's Board of Trustees and its execution by the parties hereto. Pursuant to the exemptive relief obtained in the SEC Order dated April 29, 1996, Investment Company Act Release No. 21921, approval of the Agreement by a majority of the outstanding voting securities of the Fund is not required, and the Sub-Adviser acknowledges that it and any other sub-adviser so selected and approved shall be without the protection (if any) accorded by shareholder approval of an investment adviser's receipt of compensation under Section 36(b) of the 1940 Act. This Agreement shall continue in effect for a period of more than two years from the date hereof only so long as continuance is specifically approved at least annually in conformance with the 1940 Act; provided, however, that this Agreement may be terminated with respect to the Fund (a) by the Fund at any time, without the payment of any penalty, by the vote of a majority of Trustees of the Trust or by the vote of a majority of the outstanding voting securities of the Fund, (b) by the Adviser at any time, without the payment of any penalty, on not more than 60 days' nor less than 30 days' written notice to the Sub-Adviser, or (c) by the Sub-Adviser at any time, without the payment of any penalty, on 90 days' written notice to the Adviser. This Agreement shall terminate automatically and immediately in the event of its assignment, or in the event of a termination of the Advisory Agreement with the Trust. As used in this Paragraph 6, the terms "assignment" and "vote of a majority of the outstanding voting securities" shall have the respective meanings set forth in the 1940 Act and the rules and regulations thereunder, subject to such exceptions as may be granted by the SEC under the 1940 Act. 7. GOVERNING LAW. This Agreement shall be governed by the internal laws of the Commonwealth of Massachusetts, without regard to conflict of law principles; provided, however, that nothing herein shall be construed as being inconsistent with the 1940 Act. 8. SEVERABILITY. Should any part of this Agreement be held invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors. 9. NOTICE: Any notice, advice or report to be given pursuant to this Agreement shall be deemed sufficient if delivered or mailed by registered, certified or overnight mail, postage prepaid addressed by the party giving notice to the other party at the last address furnished by the other party: 5 To the Adviser at: SEI Investments Management Corporation One Freedom Valley Road Oaks, PA 19456 Attention: Legal Department To the Sub-Adviser at: Fisher Investments, Inc. 13100 Skyline Blvd. Woodside, CA 94062 Attention: Justin Arbuckle 10. NON-HIRE/NON-SOLICITATION. The parties hereto hereby agree that so long as the Sub-Adviser provides services to the Adviser or the Trust and for a period of one year following the date on which the Sub-Adviser ceases to provide services to the Adviser and the Trust, neither party shall for any reason, directly or indirectly, on its own behalf or on behalf of others, hire any person employed by the other party, whether or not such person is a full-time employee or whether or not any person's employment is pursuant to a written agreement or is at-will. The parties further agree that, to the extent that a party breaches the covenant described in this paragraph, the other party shall be entitled to pursue all appropriate remedies in law or equity. 11. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and understanding between the parties hereto, and supersedes all prior agreements and understandings relating to this Agreement's subject matter. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but such counterparts shall, together, constitute only one instrument. In the event the terms of this Agreement are applicable to more than one portfolio of the Trust (for purposes of this Paragraph 11, each a "Fund"), the Adviser is entering into this Agreement with the Sub-Adviser on behalf of the respective Funds severally and not jointly, with the express intention that the provisions contained in each numbered paragraph hereof shall be understood as applying separately with respect to each Fund as if contained in separate agreements between the Adviser and Sub-Adviser for each such Fund. In the event that this Agreement is made applicable to any additional Funds by way of a Schedule executed subsequent to the date first indicated above, provisions of such Schedule shall be deemed to be incorporated into this Agreement as it relates to such Fund so that, for example, the execution date for purposes of Paragraph 6 of this Agreement with respect to such Fund shall be the execution date of the relevant Schedule. 12. MISCELLANEOUS. (a) A copy of the Declaration of Trust is on file with the Secretary of State of the Commonwealth of Massachusetts, and notice is hereby given that the obligations of this instrument are not binding upon any of the Trustees, officers or shareholders of the Fund or the Trust. 6 (b) Where the effect of a requirement of the 1940 Act reflected in any provision of this Agreement is altered by a rule, regulation or order of the SEC, whether of special or general application, such provision shall be deemed to incorporate the effect of such rule, regulation or order. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their officers designated below as of the day and year first written above. SEI INVESTMENTS MANAGEMENT CORPORATION FISHER INVESTMENTS, INC. By: By: /s/ Todd Cipperman /s/ Jeff Silk - -------------------------------------- ------------------------------------- Name: Name: Todd Cipperman Jeff Silk - -------------------------------------- ------------------------------------- Title: Title: Senior Vice President President - -------------------------------------- ------------------------------------- 7 SCHEDULE A TO THE SUB-ADVISORY AGREEMENT BETWEEN SEI INVESTMENTS MANAGEMENT CORPORATION AND FISHER INVESTMENT, INC. AS OF JULY 1, 2003 SEI INSTITUTIONAL INTERNATIONAL TRUST International Equity Fund A-1 SCHEDULE B TO THE SUB-ADVISORY AGREEMENT BETWEEN SEI INVESTMENTS MANAGEMENT CORPORATION AND FISHER INVESTMENTS, INC. AS OF JULY 1, 2003 Pursuant to Paragraph 4, the Adviser shall pay the Sub-Adviser compensation at an annual rate as follows: SEI INSTITUTIONAL INTERNATIONAL TRUST International Equity Fund B-1 The fee for the International Equity Fund will be calculated based on the average daily value of the Assets of the Fund managed by the Sub-Adviser aggregated with the average daily value of the Assets of the SEI Institutional Investments Trust's International Equity Fund managed by the Sub-Adviser. The International Equity Fund's fee will be its pro rata portion of the total fee calculated as set forth above. Agreed and Accepted: SEI INVESTMENTS MANAGEMENT CORPORATION FISHER INVESTMENTS, INC. By: By: /s/ Todd Cipperman /s/ Jeff Silk - -------------------------------------- ------------------------------------- Name: Name: Todd Cipperman Jeff Silk - -------------------------------------- ------------------------------------- Title: Title: Senior Vice President President - -------------------------------------- ------------------------------------- B-2 EX-99.B(D)(14) 10 a2123004zex-99_bd14.txt EXHIBIT 99.B(D)(14) Exhibit 99.B(d)(14) INVESTMENT SUB-ADVISORY AGREEMENT SEI INSTITUTIONAL INTERNATIONAL TRUST AGREEMENT made this 1st day of July 2003, between SEI Investments Management Corporation, (the "Adviser") and McKinley Capital Management, Inc. (the "Sub-Adviser"). WHEREAS, SEI Institutional International Trust, a Massachusetts business trust (the "Trust") is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"); and WHEREAS, the Adviser has entered into an Investment Advisory Agreement dated December 16, 1994, (the "Advisory Agreement") with the Trust, pursuant to which the Adviser acts as investment adviser to the series of the Trust set forth on Schedule A attached hereto (the "Fund"), as such Schedule may be amended by mutual agreement of the parties hereto; and WHEREAS, the Adviser, with the approval of the Trust, desires to retain the Sub-Adviser to provide investment advisory services to the Adviser in connection with the management of the Fund, and the Sub-Adviser is willing to render such investment advisory services. NOW, THEREFORE, the parties hereto agree as follows: 1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and the Trust's Board of Trustees, the Sub-Adviser shall manage all of the securities and other assets of the Fund entrusted to it hereunder (the "Assets"), including the purchase, retention and disposition of the Assets, in accordance with the Fund's investment objectives, policies and restrictions as stated in a Fund's prospectus and statement of additional information, as currently in effect and as amended or supplemented from time to time (referred to collectively as the "Prospectus"), and subject to the following: (a) The Sub-Adviser shall, in consultation with and subject to the direction of the Adviser, determine from time to time what Assets will be purchased, retained or sold by the Fund, and what portion of the Assets will be invested or held uninvested in cash. (b) In the performance of its duties and obligations under this Agreement, the Sub-Adviser shall act in conformity with the Trust's Declaration of Trust (as defined herein) and the Prospectus and with the written instructions and directions of the Adviser and of the Board of Trustees of the Trust delivered to the Sub-Adviser and will conform to and comply with the applicable requirements of the 1940 Act, Subchapter M of the Internal Revenue Code of 1986, and all other applicable federal and state laws and regulations, as each is amended from time to time. (c) The Sub-Adviser shall determine the Assets to be purchased or sold by the Fund as provided in subparagraph (a) and will place orders with or through such persons, brokers or dealers to carry out the policy with respect to brokerage set forth in the Fund's Prospectus delivered to the Sub-Adviser or as the Board of Trustees or the Adviser may in writing direct from time to time, in conformity with federal securities laws. In executing Fund transactions and selecting brokers or dealers, the Sub-Adviser will use its best efforts to seek on behalf of the Fund the best overall terms available. In assessing the best overall terms available for any transaction, the Sub-Adviser shall consider all factors that it deems relevant, including the breadth of the market in the security, the price of the security, the financial condition and execution capability of the broker or dealer, and the reasonableness of the commission, if any, both for the specific transaction and on a continuing basis. In evaluating the best overall terms available, and in selecting the broker-dealer to execute a particular transaction, the Sub-Adviser may also consider the brokerage and research services provided (as those terms are defined in Section 28(e) of the Securities Exchange Act of 1934). Consistent with the policies of the Trust, as disclosed in the Prospectus, the Sub-Adviser is authorized to pay to a broker or dealer who provides such brokerage and research services a commission for executing a Fund transaction for the Fund which is in excess of the amount of commission another broker or dealer would have charged for effecting that transaction if, but only if, the Sub-Adviser determines in good faith that such commission was reasonable in relation to the value of the brokerage and research services provided by such broker or dealer -- viewed in terms of that particular transaction or in terms of the overall responsibilities of the Sub-Adviser to its discretionary clients, including the Fund. In addition, the Sub-Adviser is authorized to allocate purchase and sale orders for securities to brokers or dealers (including brokers and dealers that are affiliated with the Adviser, Sub-Adviser or the Trust's principal underwriter) and to take into account the sale of shares of the Trust if the Sub-Adviser believes that the quality of the transaction and the commission are comparable to what they would be with other qualified firms. In no instance, however, will the Fund's Assets be purchased from or sold to the Adviser, Sub-Adviser, the Trust's principal underwriter or any affiliated person of either the Trust, Adviser, the Sub-Adviser or the principal underwriter, acting as principal in the transaction, except to the extent permitted by the Securities and Exchange Commission ("SEC"), the Investment Advisers Act of 1940, as amended, and the 1940 Act, and the rules and regulations thereunder. On occasions when the Sub-Adviser deems the purchase or sale of a security to be in the best interest of the Fund as well as other clients, the Sub-Adviser, to the extent permitted by applicable laws and regulations, may aggregate the securities to be sold or purchased in order to obtain the best execution and/or a lower brokerage commission, if any. In such event, allocation of the securities so purchased or sold, as well as the expenses incurred in the transaction, will be made by the Sub-Adviser in the manner it considers to be the most equitable and consistent with its fiduciary obligations to the Fund and to such clients. (d) The Sub-Adviser shall maintain all books and records with respect to transactions involving the Assets required by subparagraphs (b)(5), (6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act. The Sub-Adviser shall 2 provide to the Adviser or the Board of Trustees such periodic and special reports, balance sheets or financial information, and such other information with regard to its affairs as the Adviser or Board of Trustees may reasonably request. The Sub-Adviser shall keep the books and records relating to the Assets required to be maintained by the Sub-Adviser under this Agreement and shall timely furnish to the Adviser all information relating to the Sub-Adviser's services under this Agreement needed by the Adviser to keep the other books and records of the Fund required by Rule 31a-1 under the 1940 Act. The Sub-Adviser shall also furnish to the Adviser any other information within the possession or control of the Sub-Adviser relating to the Assets that is required to be filed by the Adviser or the Trust with the SEC or sent to shareholders under the 1940 Act (including the rules adopted thereunder or any exemptive or other relief that the Adviser or the Trust obtains from the SEC). The Sub-Adviser agrees that all records that it maintains on behalf of the Fund are property of the Fund and the Sub-Adviser will surrender promptly to the Fund any of such records upon the Fund's request; provided, however, that the Sub-Adviser may retain a copy of such records. In addition, for the duration of this Agreement, the Sub-Adviser shall preserve for the periods prescribed by Rule 31a-2 under the 1940 Act any such records as are required to be maintained by it pursuant to this Agreement, and shall transfer said records to any successor sub-adviser upon the termination of this Agreement (or, if there is no successor sub-adviser, to the Adviser). (e) The Sub-Adviser shall provide the Fund's custodian on each business day with information relating to all transactions concerning the Fund's Assets and shall provide the Adviser with such information upon request of the Adviser. (f) The investment management services provided by the Sub-Adviser under this Agreement are not to be deemed exclusive and the Sub-Adviser shall be free to render similar services to others, as long as such services do not impair the services rendered to the Adviser or the Trust. In addition, nothing in this agreement will in any way restrict the Sub-Adviser, its officers, directors or employees from trading in securities for its or their own accounts as permitted by the 1940 Act and the Sub-Adviser's Code of Ethics, provided that the Sub-Adviser's Code of Ethics materially complies with the then current Code of Ethics recommendations of the Investment Company Institute. (g) The Sub-Adviser shall promptly notify the Adviser of any financial condition that is likely to impair the Sub-Adviser's ability to fulfill its commitment under this Agreement. (h) (i) Except under the circumstances set forth in subsection (ii), the Sub-Adviser shall not be responsible for reviewing proxy solicitation materials or voting and handling proxies in relation to the securities held as Assets in the Fund. The Sub-Adviser shall instruct the custodian and other parties providing services to the Fund to promptly forward misdirected proxies to the Adviser. 3 (ii) The Sub-Adviser hereby agrees that upon 60 days' written notice from the Adviser, the Sub-Adviser shall assume responsibility for reviewing proxy solicitation materials and voting proxies in relation to the securities held as Assets in the Fund. As of the time as the Sub-Adviser shall assume such responsibilities with respect to proxies under this sub-section (ii), the Adviser shall instruct the custodian and other parties providing services to the Fund to promptly forward misdirected proxies to the Sub-Adviser. (i) In performance of its duties and obligations under this Agreement, the Sub-Adviser shall not consult with any other sub-adviser to the Fund or a sub-adviser to a portfolio that is under common control with the Fund concerning the Assets, except as permitted by the policies and procedures of the Fund. The Sub-Adviser shall not provide investment advice to any assets of the Fund other than the Assets. Services to be furnished by the Sub-Adviser under this Agreement may be furnished through the medium of any of the Sub-Adviser's directors, officers or employees. 2. DUTIES OF THE ADVISER. The Adviser shall continue to have responsibility for all services to be provided to the Fund pursuant to the Advisory Agreement and shall oversee and review the Sub-Adviser's performance of its duties under this Agreement; provided, however, that in connection with its management of the Assets, nothing herein shall be construed to relieve the Sub-Adviser of responsibility for compliance with the Trust's Declaration of Trust (as defined herein), the Prospectus, the written instructions and directions of the Board of Trustees of the Trust, the requirements of the 1940 Act, Subchapter M of the Internal Revenue Code of 1986, and all other applicable federal and state laws and regulations, as each is amended from time to time. 3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with copies properly certified or authenticated of each of the following documents: (a) the Trust's Agreement and Declaration of Trust, as filed with the Secretary of State of the Commonwealth of Massachusetts (such Agreement and Declaration of Trust, as in effect on the date of this Agreement and as amended from time to time, herein called the "Declaration of Trust"); (b) By-Laws of the Trust (such By-Laws, as in effect on the date of this Agreement and as amended from time to time, herein called the "By-Laws"); (c) the Prospectus of the Fund; (d) any order issued by the SEC or other regulatory authority applicable to the Trust, the Fund or the Adviser; and (e) any other written instructions, directions or policies of the Adviser or the Trust's Board of Trustees applicable to the Sub-Adviser's duties hereunder. 4 The Adviser will promptly furnish to the Sub-Adviser any and all amendments or other changes to the documents specified in this Section 3, and the Sub-Adviser shall not be charged with complying with any such document or amendment not so delivered to the Sub-Adviser, unless the Sub-Adviser reasonably should have known the terms of such document or amendment. 4. COMPENSATION TO THE SUB-ADVISER; EXPENSES. For the services to be provided by the Sub-Adviser pursuant to this Agreement, the Adviser will pay the Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation therefor, a sub-advisory fee at the rate specified in Schedule B which is attached hereto and made part of this Agreement. The fee will be calculated based on the average daily value of the Assets under the Sub-Adviser's management and will be paid to the Sub-Adviser monthly. Except as may otherwise be prohibited by law or regulation (including any then current SEC staff interpretation), the Sub-Adviser may, in its discretion and from time to time, waive a portion of its fee. The Sub-Adviser shall be responsible for its own expenses in performing its duties hereunder but shall not be responsible for the expenses of the Trust or the Fund. Without limiting the generality of the foregoing, the Sub-Adviser shall not be responsible for brokerage commissions, transfer taxes or fees or custody fees of the Fund. 5. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the Adviser from and against any and all claims, losses, liabilities or damages (including reasonable attorney's fees and other related expenses) howsoever arising from or in connection with the performance of the Sub-Adviser's obligations under this Agreement; provided, however, that the Sub-Adviser's obligation under this Paragraph 5 shall be reduced to the extent that the claim against, or the loss, liability or damage experienced by the Adviser, is caused by or is otherwise directly related to the Adviser's own willful misfeasance, bad faith or negligence, or to the reckless disregard of its duties under this Agreement. The Adviser shall indemnify and hold harmless the Sub-Adviser from and against any and all claims, losses, liabilities or damages (including reasonable attorney's fees and other related expenses) howsoever arising from or in connection with the performance of the Adviser's obligations under this Agreement; provided, however, that the Adviser's obligation under this Paragraph 5 shall be reduced to the extent that the claim against, or the loss, liability or damage experienced by the Sub-Adviser, is caused by or is otherwise directly related to the Sub-Adviser's own willful misfeasance, bad faith or negligence, or to the reckless disregard of its duties under this Agreement. 6. DURATION AND TERMINATION. This Agreement shall become effective upon approval by the Trust's Board of Trustees and its execution by the parties hereto. Pursuant to the exemptive relief obtained in the SEC Order dated April 29, 1996, Investment Company Act Release No. 21921, approval of the Agreement by a majority of the outstanding voting securities of the Fund is not required, and the Sub-Adviser acknowledges that it and any other sub-adviser so selected and approved shall be without the protection (if 5 any) accorded by shareholder approval of an investment adviser's receipt of compensation under Section 36(b) of the 1940 Act. This Agreement shall continue in effect for a period of more than two years from the date hereof only so long as continuance is specifically approved at least annually in conformance with the 1940 Act; provided, however, that this Agreement may be terminated with respect to the Fund: (a) by the Fund at any time, without the payment of any penalty, on not more than 60 days' nor less than 30 days' written notice to the Sub-Adviser, by the vote of a majority of Trustees of the Trust or by the vote of a majority of the outstanding voting securities of the Fund; (b) by the Adviser at any time, without the payment of any penalty, on no more than 60 days' nor less than 30 days' written notice to the Sub-Adviser; or (c) by the Sub-Adviser at any time, without the payment of any penalty, on 90 days' written notice to the Adviser. This Agreement shall terminate automatically and immediately in the event of its assignment, or in the event of a termination of the Advisory Agreement with the Trust. As used in this Paragraph 6, the terms "assignment" and "vote of a majority of the outstanding voting securities" shall have the respective meanings set forth in the 1940 Act and the rules and regulations thereunder, subject to such exceptions as may be granted by the SEC under the 1940 Act. 7. GOVERNING LAW. This Agreement shall be governed by the internal laws of the Commonwealth of Massachusetts, without regard to conflict of law principles; provided, however, that nothing herein shall be construed as being inconsistent with the 1940 Act. 8. SEVERABILITY. Should any part of this Agreement be held invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors. 9. NOTICE. Any notice, advice or report to be given pursuant to this Agreement shall be deemed sufficient if delivered or mailed by registered, certified or overnight mail, postage prepaid, addressed by the party giving notice to the other party at the last address furnished by the other party: To the Adviser at: SEI Investments Management Corporation One Freedom Valley Road Oaks, PA 19456 Attention: Legal Department To the Sub-Adviser at: McKinley Capital Management, Inc. 3301 C Street, 5th Floor Anchorage, Alaska 99503 Attention: President 10. NON-HIRE/NON-SOLICITATION. The Sub-Adviser hereby agrees that so long as the Sub-Adviser provides services to the Adviser or the Trust and for a period of one year following the date on which the Sub-Adviser ceases to provide services to the Adviser 6 and the Trust, the Sub-Adviser shall not for any reason, directly or indirectly, on the Sub-Adviser's own behalf or on behalf of others, hire any person employed by the Adviser, whether or not such person is a full-time employee or whether or not any person's employment is pursuant to a written agreement or is at-will, without the prior written agreement of the Adviser. The Sub-Adviser further agrees that, to the extent that the Sub-Adviser breaches the covenant described in this paragraph, the Adviser shall be entitled to pursue all appropriate remedies in law or equity. 11. NONCOMPETE PROVISIONS. (a) The Sub-Adviser hereby agrees that, the Sub-Adviser will: (i) waive enforcement of any noncompete agreement or other agreement or arrangement to which it is currently a party that restricts, limits, or otherwise interferes with the ability of the Adviser to employ or engage any person or entity to provide investment advisory or other services and will transmit to any person or entity notice of such waiver as may be required to give effect to this provision; and (ii) will not become a party to any noncompete agreement or other agreement or arrangement that restricts, limits or otherwise interferes with the ability of the Adviser to employ or engage any person or entity to provide investment advisory or other services. (b) Notwithstanding any termination of this Agreement, the Sub-Adviser's obligations under this Paragraph 11 shall survive. 12. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and understanding between the parties hereto, and supersedes all prior agreements and understandings relating to this Agreement's subject matter. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but such counterparts shall, together, constitute only one instrument. In the event the terms of this Agreement are applicable to more than one portfolio of the Trust (for purposes of this Section 12, each a "Fund"), the Adviser is entering into this Agreement with the Sub-Adviser on behalf of the respective Funds severally and not jointly, with the express intention that the provisions contained in each numbered paragraph hereof shall be understood as applying separately with respect to each Fund as if contained in separate agreements between the Adviser and Sub-Adviser for each such Fund. In the event that this Agreement is made applicable to any additional Funds by way of a Schedule executed subsequent to the date first indicated above, provisions of such Schedule shall be deemed to be incorporated into this Agreement as it relates to such Fund so that, for example, the execution date for purposes of Paragraph 6 of this Agreement with respect to such Fund shall be the execution date of the relevant Schedule. 7 13. MISCELLANEOUS. (a) A copy of the Declaration of Trust is on file with the Secretary of State of the Commonwealth of Massachusetts, and notice is hereby given that the obligations of this instrument are not binding personally upon any of the Trustees, officers or shareholders of the Fund or the Trust. (b) Where the effect of a requirement of the 1940 Act reflected in any provision of this Agreement is altered by a rule, regulation or order of the SEC, whether of special or general application, such provision shall be deemed to incorporate the effect of such rule, regulation or order. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their officers designated below as of the day and year first written above. SEI INVESTMENTS MANAGEMENT CORPORATION McKINLEY CAPITAL MANAGEMENT, INC. By: By: /s/ Todd Cipperman /s/ Diane Wilke - ------------------------------------- --------------------------------- Name: Name: Todd Cipperman Diane Wilke - ------------------------------------- --------------------------------- Title: Title: Senior Vice President Vice President - ------------------------------------- --------------------------------- 8 SCHEDULE A TO THE SUB-ADVISORY AGREEMENT BETWEEN SEI INVESTMENTS MANAGEMENT CORPORATION AND McKINLEY CAPITAL MANAGEMENT, INC. AS OF JULY 1, 2003 SEI INSTITUTIONAL INTERNATIONAL TRUST International Equity Fund 9 SCHEDULE B TO THE SUB-ADVISORY AGREEMENT BETWEEN SEI INVESTMENTS MANAGEMENT CORPORATION AND McKINLEY CAPITAL MANAGEMENT, INC. AS OF JULY 1, 2003 Pursuant to Paragraph 4, the Adviser shall pay the Sub-Adviser compensation at an annual rate as follows: SEI INSTITUTIONAL INTERNATIONAL TRUST International Equity Fund Agreed and Accepted: SEI INVESTMENTS MANAGEMENT CORPORATION McKINLEY CAPITAL MANAGEMENT, INC. By: By: /s/ Todd Cipperman /s/ Diane Wilke - ------------------------------------- --------------------------------- Name: Name: Todd Cipperman Diane Wilke - ------------------------------------- --------------------------------- Title: Title: Senior Vice President Vice President - ------------------------------------- --------------------------------- 10 EX-99.B(D)(15) 11 a2123004zex-99_bd15.txt EX-99.B(D)(15) Exhibit 99.B(d)(15) AMENDMENT TO INVESTMENT SUB-ADVISORY AGREEMENT Amendment dated as of July 1, 2003 to the Investment Sub-Advisory Agreement between SEI Investments Management Corporation (the "Adviser") and Alliance Capital Management L.P. (the "Sub-Adviser") with respect to the SEI Institutional International Trust's Emerging Markets Equity Fund (the "Fund"). WITNESSETH: WHEREAS, Adviser and Sub-Adviser have entered into an Investment Sub-Advisory Agreement (the "Agreement") dated June 26, 2002, pursuant to which the Sub-Adviser renders investment sub-advisory services to the Fund; WHEREAS, Section 1(h) of the Agreement provides that (i) the Sub-Adviser shall review all proxy solicitation materials and be responsible for voting and handling all proxies in relation to the securities held as Assets in the Fund; and (ii) the Adviser shall instruct the custodian and other parties providing services to the Fund to promptly forward misdirected proxies to the Sub-Adviser; WHEREAS, the Adviser and the Sub-Adviser desire to amend Section 1(h) of the Agreement for the purpose of revising the duties and responsibilities of the Adviser and Sub-Adviser with regard to reviewing proxy solicitation materials and responsibility for voting and handling proxies in relation to the securities held as Assets in the Fund; and WHEREAS, the Adviser and Sub-Adviser also desire to amend certain provisions of the Agreement to reflect amendments by the U.S. Securities and Exchange Commission to Rules 10f-3, 12d3-1 and 17e-1 and adoption of new Rule 17a-10 under the Investment Company Act of 1940, as amended. NOW THEREFORE, in consideration of the foregoing and the mutual covenants herein contained, the parties hereby agree as follows: Section 1(h) of the Agreement is amended and restated as follows: (h) (i) Except under the circumstances set forth in subsection (ii), the Sub-Adviser shall not be responsible for reviewing proxy solicitation materials or voting and handling proxies in relation to the securities held as Assets in the Fund. The Sub-Adviser shall instruct the custodian and other parties providing services to the Fund to promptly forward misdirected proxies to the Adviser. (ii) The Sub-Adviser hereby agrees that upon 60 days' written notice from the Adviser, the Sub-Adviser shall assume responsibility for reviewing proxy solicitation materials and voting proxies in relation to the securities held as Assets in the Fund. As of the time as the Sub-Adviser shall assume such responsibilities with respect to proxies under this sub-section (ii), the Adviser shall instruct the 1 custodian and other parties providing services to the Fund to promptly forward misdirected proxies to the Sub-Adviser. The following paragraph is added to the Agreement as Section 1(i): (i) In performance of its duties and obligations under this Agreement, the Sub-Adviser shall not consult with any other sub-adviser to the Fund or a sub-adviser to a portfolio that is under common control with the Fund concerning the Assets, except as permitted by the policies and procedures of the Fund. The Sub-Adviser shall not provide investment advice to any assets of the Fund other than the Assets. Except as expressly superseded or modified by this Amendment, the terms and provisions of the Agreement shall continue to apply with full force and effect. IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their officers designated below as of the day and year first written above. SEI INVESTMENTS MANAGEMENT CORPORATION ALLIANCE CAPITAL MANAGEMENT L.P. BY: ALLIANCE CAPITAL MANAGEMENT CORPORATION, ITS GENERAL PARTNER By: /s/ Todd Cipperman By: /s/ Louis T. Mangan ------------------------------- ------------------------------ Name: Todd Cipperman Name: Louis T. Mangan ------------------------------- ------------------------------ Title: Senior Vice President Title: Assistant Secretary ------------------------------- ------------------------------ 2 EX-99.B(D)(16) 12 a2123004zex-99_bd16.txt EX-99.B(D)(16) Exhibit 99.B(d)(16) AMENDMENT TO INVESTMENT SUB-ADVISORY AGREEMENT Amendment dated as of July 1, 2003 to the Investment Sub-Advisory Agreement between SEI Investments Management Corporation (the "Adviser") and Ashmore Investment Management Limited (the "Sub-Adviser") with respect to the SEI Institutional International Trust's Emerging Markets Debt Fund (the "Fund"). WITNESSETH: WHEREAS, Adviser and Sub-Adviser have entered into an Investment Sub-Advisory Agreement (the "Agreement") dated March 17, 2003, pursuant to which the Sub-Adviser renders investment sub-advisory services to the Fund; WHEREAS, Section 1(h) of the Agreement provides that (i) the Sub-Adviser shall review all proxy solicitation materials and be responsible for voting and handling all proxies in relation to the securities held as Assets in the Fund; and (ii) the Adviser shall instruct the custodian and other parties providing services to the Fund to promptly forward misdirected proxies to the Sub-Adviser; WHEREAS, the Adviser and the Sub-Adviser desire to amend Section 1(h) of the Agreement for the purpose of revising the duties and responsibilities of the Adviser and Sub-Adviser with regard to reviewing proxy solicitation materials and responsibility for voting and handling proxies in relation to the securities held as Assets in the Fund; and WHEREAS, the Adviser and Sub-Adviser also desire to amend certain provisions of the Agreement to reflect amendments by the U.S. Securities and Exchange Commission to Rules 10f-3, 12d3-1 and 17e-1 and adoption of new Rule 17a-10 under the Investment Company Act of 1940, as amended. NOW THEREFORE, in consideration of the foregoing and the mutual covenants herein contained, the parties hereby agree as follows: Section 1(h) of the Agreement is amended and restated as follows: (h) (i) Except under the circumstances set forth in subsection (ii), the Sub-Adviser shall not be responsible for reviewing proxy solicitation materials or voting and handling proxies in relation to the securities held as Assets in the Fund. The Sub-Adviser shall instruct the custodian and other parties providing services to the Fund to promptly forward misdirected proxies to the Adviser. (ii) The Sub-Adviser hereby agrees that upon 60 days' written notice from the Adviser, the Sub-Adviser shall assume responsibility for reviewing proxy solicitation materials and voting proxies in relation to the securities held as Assets in the Fund. As of the time as the Sub-Adviser shall assume such responsibilities with respect to proxies under this sub-section (ii), the Adviser shall instruct the 1 custodian and other parties providing services to the Fund to promptly forward misdirected proxies to the Sub-Adviser. The following paragraph is added to the Agreement as Section 1(l): (l) In performance of its duties and obligations under this Agreement, the Sub-Adviser shall not consult with any other sub-adviser to the Fund or a sub-adviser to a portfolio that is under common control with the Fund concerning the Assets, except as permitted by the policies and procedures of the Fund. The Sub-Adviser shall not provide investment advice to any assets of the Fund other than the Assets. Except as expressly superseded or modified by this Amendment, the terms and provisions of the Agreement shall continue to apply with full force and effect. IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their officers designated below as of the day and year first written above. SEI INVESTMENTS MANAGEMENT CORPORATION ASHMORE INVESTMENT MANAGEMENT LIMITED By: /s/ Todd Cipperman By: /s/ Tim Davis ------------------------------ --------------------------- Name: Todd Cipperman Name: Mr. Tim Davis ------------------------------ --------------------------- Title: Senior Vice President Title: Authorised Signatory ------------------------------ --------------------------- 2 EX-99.B(D)(17) 13 a2123004zex-99_bd17.txt EX-99.B(D)(17) Exhibit 99.B(d)(17) AMENDMENT TO INVESTMENT SUB-ADVISORY AGREEMENT Amendment dated as of July 1, 2003 to the Investment Sub-Advisory Agreement between SEI Investments Management Corporation (the "Adviser") and The Boston Company Asset Management, LLC (the "Sub-Adviser") with respect to the SEI Institutional International Trust's Emerging Markets Equity Fund (the "Fund"). WITNESSETH: WHEREAS, Adviser and Sub-Adviser have entered into an Investment Sub-Advisory Agreement (the "Agreement") dated September 18, 2000, pursuant to which the Sub-Adviser renders investment sub-advisory services to the Fund; WHEREAS, Section 1(h) of the Agreement provides that (i) the Sub-Adviser shall review all proxy solicitation materials and be responsible for voting and handling all proxies in relation to the securities held as Assets in the Fund; and (ii) the Adviser shall instruct the custodian and other parties providing services to the Fund to promptly forward misdirected proxies to the Sub-Adviser; WHEREAS, the Adviser and the Sub-Adviser desire to amend Section 1(h) of the Agreement for the purpose of revising the duties and responsibilities of the Adviser and Sub-Adviser with regard to reviewing proxy solicitation materials and responsibility for voting and handling proxies in relation to the securities held as Assets in the Fund; and WHEREAS, the Adviser and Sub-Adviser also desire to amend certain provisions of the Agreement to reflect amendments by the U.S. Securities and Exchange Commission to Rules 10f-3, 12d3-1 and 17e-1 and adoption of new Rule 17a-10 under the Investment Company Act of 1940, as amended. NOW THEREFORE, in consideration of the foregoing and the mutual covenants herein contained, the parties hereby agree as follows: Section 1(h) of the Agreement is amended and restated as follows: (h) (i) Except under the circumstances set forth in subsection (ii), the Sub-Adviser shall not be responsible for reviewing proxy solicitation materials or voting and handling proxies in relation to the securities held as Assets in the Fund. The Sub-Adviser shall instruct the custodian and other parties providing services to the Fund to promptly forward misdirected proxies to the Adviser. (ii) The Sub-Adviser hereby agrees that upon 60 days' written notice from the Adviser, the Sub-Adviser shall assume responsibility for reviewing proxy solicitation materials and voting proxies in relation to the securities held as Assets in the Fund. As of the time as the Sub-Adviser shall assume such responsibilities with respect to proxies under this sub-section (ii), the Adviser shall instruct the 1 custodian and other parties providing services to the Fund to promptly forward misdirected proxies to the Sub-Adviser. The following paragraph is added to the Agreement as Section 1(i): (i) In performance of its duties and obligations under this Agreement, the Sub-Adviser shall not consult with any other sub-adviser to the Fund or a sub-adviser to a portfolio that is under common control with the Fund concerning the Assets, except as permitted by the policies and procedures of the Fund. The Sub-Adviser shall not provide investment advice to any assets of the Fund other than the Assets. Except as expressly superseded or modified by this Amendment, the terms and provisions of the Agreement shall continue to apply with full force and effect. IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their officers designated below as of the day and year first written above. SEI INVESTMENTS MANAGEMENT CORPORATION THE BOSTON COMPANY ASSET MANAGEMENT, LLC By: /s/ Todd Cipperman By: /s/ Corey Griffin ------------------------------ ------------------------------ Name: Todd Cipperman Name: Corey Griffin ------------------------------ ------------------------------ Title: Senior Vice President Title: CEO ------------------------------ ------------------------------ 2 EX-99.B(D)(18) 14 a2123004zex-99_bd18.txt EX-99.B(D)(18) Exhibit 99.B(d)(18) AMENDMENT TO INVESTMENT SUB-ADVISORY AGREEMENT Amendment dated as of July 1, 2003 to the Investment Sub-Advisory Agreement between SEI Investments Management Corporation (the "Adviser") and Capital Guardian Trust Company (the "Sub-Adviser") with respect to the SEI Institutional International Trust's International Equity Portfolio (the "Portfolio"). WITNESSETH: WHEREAS, Adviser and Sub-Adviser have entered into an Investment Sub-Advisory Agreement (the "Agreement") dated June 29, 1998, pursuant to which the Sub-Adviser renders investment sub-advisory services to the Portfolio; WHEREAS, Section 1(h) of the Agreement provides that (i) the Sub-Adviser shall review all proxy solicitation materials and be responsible for voting and handling all proxies in relation to the securities held as Assets in the Portfolio; and (ii) the Adviser shall instruct the custodian and other parties providing services to the Portfolio to promptly forward misdirected proxies to the Sub-Adviser; WHEREAS, the Adviser and the Sub-Adviser desire to amend Section 1(h) of the Agreement for the purpose of revising the duties and responsibilities of the Adviser and Sub-Adviser with regard to reviewing proxy solicitation materials and responsibility for voting and handling proxies in relation to the securities held as Assets in the Portfolio; and WHEREAS, the Adviser and Sub-Adviser also desire to amend certain provisions of the Agreement to reflect amendments by the U.S. Securities and Exchange Commission to Rules 10f-3, 12d3-1 and 17e-1 and adoption of new Rule 17a-10 under the Investment Company Act of 1940, as amended. NOW THEREFORE, in consideration of the foregoing and the mutual covenants herein contained, the parties hereby agree as follows: Section 1(h) of the Agreement is amended and restated as follows: (h) (i) Except under the circumstances set forth in subsection (ii), the Sub-Adviser shall not be responsible for reviewing proxy solicitation materials or voting and handling proxies in relation to the securities held as Assets in the Portfolio. The Sub-Adviser shall instruct the custodian and other parties providing services to the Portfolio to promptly forward misdirected proxies to the Adviser. (ii) The Sub-Adviser hereby agrees that upon 60 days' written notice from the Adviser, the Sub-Adviser shall assume responsibility for reviewing proxy solicitation materials and voting proxies in relation to the securities held as Assets in the Portfolio in accordance with the Sub-Adviser's Proxy Voting Policies and 1 Procedures, as they may be amended from time to time. As of the time as the Sub-Adviser shall assume such responsibilities with respect to proxies under this sub-section (ii), the Adviser shall instruct the custodian and other parties providing services to the Portfolio to promptly forward misdirected proxies to the Sub-Adviser. The following paragraph is added to the Agreement as Section 1(i): (i) In performance of its duties and obligations under this Agreement, the Sub-Adviser shall not consult with any other sub-adviser to the Portfolio or a sub-adviser to a portfolio that is under common control with the Portfolio concerning the Assets, except as permitted by the policies and procedures of the Portfolio. The Sub-Adviser shall not provide investment advice to any assets of the Portfolio other than the Assets. Except as expressly superseded or modified by this Amendment, the terms and provisions of the Agreement shall continue to apply with full force and effect. IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their officers designated below as of the day and year first written above. SEI INVESTMENTS MANAGEMENT CORPORATION CAPITAL GUARDIAN TRUST COMPANY By: /s/ Todd Cipperman By: /s/ Stephen E. Embs ------------------------------ --------------------------- Name: Todd Cipperman Name: Stephen E. Embs ------------------------------ --------------------------- Title: Senior Vice President Title: Vice President ------------------------------ --------------------------- 2 EX-99.B(D)(19) 15 a2123004zex-99_bd19.txt EX-99.B(D)(19) Exhibit 99.B(d)(19) AMENDMENT TO INVESTMENT SUB-ADVISORY AGREEMENT Amendment dated as of July 1, 2003 to the Investment Sub-Advisory Agreement between SEI Investments Management Corporation (the "Adviser") and Emerging Markets Management, L.L.C. (the "Sub-Adviser") with respect to the SEI Institutional International Trust's Emerging Markets Equity Fund (the "Fund"). WITNESSETH: WHEREAS, Adviser and Sub-Adviser have entered into an Investment Sub-Advisory Agreement (the "Agreement") dated March 11, 2003, pursuant to which the Sub-Adviser renders investment sub-advisory services to the Fund; WHEREAS, Section 1(h) of the Agreement provides that (i) the Sub-Adviser shall review all proxy solicitation materials and be responsible for voting and handling all proxies in relation to the securities held as Assets in the Fund; and (ii) the Adviser shall instruct the custodian and other parties providing services to the Fund to promptly forward misdirected proxies to the Sub-Adviser; WHEREAS, the Adviser and the Sub-Adviser desire to amend Section 1(h) of the Agreement for the purpose of revising the duties and responsibilities of the Adviser and Sub-Adviser with regard to reviewing proxy solicitation materials and responsibility for voting and handling proxies in relation to the securities held as Assets in the Fund; and WHEREAS, the Adviser and Sub-Adviser also desire to amend certain provisions of the Agreement to reflect amendments by the U.S. Securities and Exchange Commission to Rules 10f-3, 12d3-1 and 17e-1 and adoption of new Rule 17a-10 under the Investment Company Act of 1940, as amended. NOW THEREFORE, in consideration of the foregoing and the mutual covenants herein contained, the parties hereby agree as follows: Section 1(h) of the Agreement is amended and restated as follows: (h) (i) Except under the circumstances set forth in subsection (ii), the Sub-Adviser shall not be responsible for reviewing proxy solicitation materials or voting and handling proxies in relation to the securities held as Assets in the Fund. The Sub-Adviser shall instruct the custodian and other parties providing services to the Fund to promptly forward misdirected proxies to the Adviser. (ii) The Sub-Adviser hereby agrees that upon 60 days' written notice from the Adviser, the Sub-Adviser shall assume responsibility for reviewing proxy solicitation materials and voting proxies in relation to the securities held as Assets in the Fund. As of the time as the Sub-Adviser shall assume such responsibilities with respect to proxies under this sub-section (ii), the Adviser shall instruct the 1 custodian and other parties providing services to the Fund to promptly forward misdirected proxies to the Sub-Adviser. The following paragraph is added to the Agreement as Section 1(i): (i) In performance of its duties and obligations under this Agreement, the Sub-Adviser shall not consult with any other sub-adviser to the Fund or a sub-adviser to a portfolio that is under common control with the Fund concerning the Assets, except as permitted by the policies and procedures of the Fund. The Sub-Adviser shall not provide investment advice to any assets of the Fund other than the Assets. Except as expressly superseded or modified by this Amendment, the terms and provisions of the Agreement shall continue to apply with full force and effect. IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their officers designated below as of the day and year first written above. SEI INVESTMENTS MANAGEMENT CORPORATION EMERGING MARKETS MANAGEMENT, L.L.C. By: /s/ Todd Cipperman By: /s/ Felicia Morrow ------------------------------ -------------------------- Name: Todd Cipperman Name: Felicia Morrow ------------------------------ -------------------------- Title: Senior Vice President Title: Managing Director ------------------------------ -------------------------- 2 EX-99.B(D)(20) 16 a2123004zex-99_bd20.txt EX-99.B(D)(20) Exhibit 99.B(d)(20) AMENDMENT TO INVESTMENT SUB-ADVISORY AGREEMENT Amendment dated as of July 1, 2003 to the Investment Sub-Advisory Agreement between SEI Investments Management Corporation (the "Adviser") and Fischer Francis Trees & Watts, Inc., Fischer Francis Trees & Watts, Fischer Francis Trees & Watts (Singapore) Pte Ltd and Fischer Francis Trees & Watts Kabushiki Kaisha (the "Sub-Adviser") with respect to the SEI Institutional International Trust's International Fixed Income Fund (the "Fund"). WITNESSETH: WHEREAS, Adviser and Sub-Adviser have entered into an Investment Sub-Advisory Agreement (the "Agreement") dated December 17, 2002, pursuant to which the Sub-Adviser renders investment sub-advisory services to the Fund; WHEREAS, Section 1(h) of the Agreement provides that (i) the Sub-Adviser shall review all proxy solicitation materials and be responsible for voting and handling all proxies in relation to the securities held as Assets in the Fund; and (ii) the Adviser shall instruct the custodian and other parties providing services to the Fund to promptly forward misdirected proxies to the Sub-Adviser; WHEREAS, the Adviser and the Sub-Adviser desire to amend Section 1(h) of the Agreement for the purpose of revising the duties and responsibilities of the Adviser and Sub-Adviser with regard to reviewing proxy solicitation materials and responsibility for voting and handling proxies in relation to the securities held as Assets in the Fund; and WHEREAS, the Adviser and Sub-Adviser also desire to amend certain provisions of the Agreement to reflect amendments by the U.S. Securities and Exchange Commission to Rules 10f-3, 12d3-1 and 17e-1 and adoption of new Rule 17a-10 under the Investment Company Act of 1940, as amended. NOW THEREFORE, in consideration of the foregoing and the mutual covenants herein contained, the parties hereby agree as follows: Section 1(h) of the Agreement is amended and restated as follows: (h) (i) Except under the circumstances set forth in subsection (ii), the Sub-Adviser shall not be responsible for reviewing proxy solicitation materials or voting and handling proxies in relation to the securities held as Assets in the Fund. The Sub-Adviser shall instruct the custodian and other parties providing services to the Fund to promptly forward misdirected proxies to the Adviser. (ii) The Sub-Adviser hereby agrees that upon 60 days' written notice from the Adviser, the Sub-Adviser shall assume responsibility for reviewing proxy solicitation materials and voting proxies in relation to the securities held as Assets in the Fund. As of the time as the Sub-Adviser shall assume such responsibilities with respect 1 to proxies under this sub-section (ii), the Adviser shall instruct the custodian and other parties providing services to the Fund to promptly forward misdirected proxies to the Sub-Adviser. The following paragraph is added to the Agreement as Section 1(i): (i) In performance of its duties and obligations under this Agreement, the Sub-Adviser shall not consult with any other sub-adviser to the Fund or a sub-adviser to a portfolio that is under common control with the Fund concerning the Assets, except as permitted by the policies and procedures of the Fund. The Sub-Adviser shall not provide investment advice with respect to any assets of the Fund other than the Assets. Except as expressly superseded or modified by this Amendment, the terms and provisions of the Agreement shall continue to apply with full force and effect. IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their officers designated below as of the day and year first written above. SEI INVESTMENTS MANAGEMENT CORPORATION FISCHER FRANCIS TREES & WATTS, INC. By: /s/ Todd Cipperman By: /s/ Stephen P. Casper ------------------------------ ------------------------- Name: Todd Cipperman Name: Stephen P. Casper ------------------------------ ------------------------- Title: Senior Vice President Title: Managing Director ------------------------------ ------------------------- FISCHER FRANCIS TREES & WATTS FISCHER FRANCIS TREES & WATTS (SINGAPORE) PTE LTD By: /s/ Stephen P. Casper By: /s/ Stephen P. Casper ------------------------------ ------------------------- Name: Stephen P. Casper Name: Stephen P. Casper ------------------------------ ------------------------- Title: Managing Director Title: Director ------------------------------ ------------------------- FISCHER FRANCIS TREES & WATTS KABUSHIKI KAISHA By: /s/ O. John Olcay ------------------------------ Name: O. John Olcay ------------------------------ Title: Director ------------------------------ 2 EX-99.B(D)(21) 17 a2123004zex-99_bd21.txt EX-99.B(D)(21) Exhibit 99.B(d)(21) AMENDMENT TO INVESTMENT SUB-ADVISORY AGREEMENT Amendment dated as of July 1, 2003 to the Investment Sub-Advisory Agreement between SEI Investments Management Corporation (the "Adviser") and Morgan Stanley Investment Management Inc. (the "Sub-Adviser") with respect to the SEI Institutional International Trust's International Equity Portfolio (the "Portfolio"). WITNESSETH: WHEREAS, Adviser and Sub-Adviser have entered into an Investment Sub-Advisory Agreement (the "Agreement") dated October 1, 2001, pursuant to which the Sub-Adviser renders investment sub-advisory services to the Portfolio; WHEREAS, Section 1(h) of the Agreement provides that (i) the Sub-Adviser shall review all proxy solicitation materials and be responsible for voting and handling all proxies in relation to the securities held as Assets in the Portfolio; and (ii) the Adviser shall instruct the custodian and other parties providing services to the Portfolio to promptly forward misdirected proxies to the Sub-Adviser; WHEREAS, the Adviser and the Sub-Adviser desire to amend Section 1(h) of the Agreement for the purpose of revising the duties and responsibilities of the Adviser and Sub-Adviser with regard to reviewing proxy solicitation materials and responsibility for voting and handling proxies in relation to the securities held as Assets in the Portfolio; and WHEREAS, the Adviser and Sub-Adviser also desire to amend certain provisions of the Agreement to reflect amendments by the U.S. Securities and Exchange Commission to Rules 10f-3, 12d3-1 and 17e-1 and adoption of new Rule 17a-10 under the Investment Company Act of 1940, as amended. NOW THEREFORE, in consideration of the foregoing and the mutual covenants herein contained, the parties hereby agree as follows: Section 1(h) of the Agreement is amended and restated as follows: (h) (i) Except under the circumstances set forth in subsection (ii), the Sub-Adviser shall not be responsible for reviewing proxy solicitation materials or voting and handling proxies in relation to the securities held as Assets in the Portfolio. If the Sub-Adviser receives a misdirected proxy, it shall promptly forward such misdirected proxy to the Adviser. (ii) The Sub-Adviser hereby agrees that upon 60 days' written notice from the Adviser, the Sub-Adviser shall assume responsibility for reviewing proxy solicitation materials and voting proxies in relation to the securities held as Assets in the Portfolio. As of the time as the Sub-Adviser shall assume such responsibilities with respect to proxies under this sub-section (ii), the Adviser shall 1 instruct the custodian and other parties providing services to the Portfolio to promptly forward misdirected proxies to the Sub-Adviser. Services to be furnished by the Sub-Adviser under this Agreement may be furnished through the medium of any of the Sub-Adviser's control affiliates, partners, officers or employees. The following paragraph is added to the Agreement as Section 1(j): (j) In performance of its duties and obligations under this Agreement, the Sub-Adviser shall not consult with any other sub-adviser to the Portfolio or a sub-adviser to a portfolio that is under common control with the Portfolio concerning the Assets, except as permitted by Rule 12d3-1 under the 1940 Act and the policies and procedures of the Portfolio. The Sub-Adviser shall not provide investment advice to any assets of the Portfolio other than the Assets. Except as expressly superseded or modified by this Amendment, the terms and provisions of the Agreement shall continue to apply with full force and effect. IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their officers designated below as of the day and year first written above. SEI INVESTMENTS MANAGEMENT CORPORATION MORGAN STANLEY INVESTMENT MANAGEMENT INC. By: /s/ Todd Cipperman By: /s/ John Pak ------------------------------ --------------------------- Name: Todd Cipperman Name: John Pak ------------------------------ --------------------------- Title: Senior Vice President Title: Executive Director ------------------------------ --------------------------- 2 EX-99.B(D)(22) 18 a2123004zex-99_bd22.txt EX-99.B(D)(22) Exhibit 99.B(d)(22) AMENDMENT TO INVESTMENT SUB-ADVISORY AGREEMENT Amendment dated as of July 28, 2003 to the Investment Sub-Advisory Agreement between SEI Investments Management Corporation (the "Adviser") and Salomon Brothers Asset Management Inc (the "Sub-Adviser") with respect to the SEI Institutional International Trust's Emerging Markets Debt Portfolio (the "Portfolio"). WITNESSETH: WHEREAS, Adviser and Sub-Adviser have entered into an Investment Sub-Advisory Agreement (the "Agreement") dated March 31, 1997, pursuant to which the Sub-Adviser renders investment sub-advisory services to the Portfolio; WHEREAS, Section 1(h) of the Agreement provides that (i) the Sub-Adviser shall review all proxy solicitation materials and be responsible for voting and handling all proxies in relation to the securities held as Assets in the Portfolio; and (ii) the Adviser shall instruct the custodian and other parties providing services to the Portfolio to promptly forward misdirected proxies to the Sub-Adviser; WHEREAS, the Adviser and the Sub-Adviser desire to amend Section 1(h) of the Agreement for the purpose of revising the duties and responsibilities of the Adviser and Sub-Adviser with regard to reviewing proxy solicitation materials and responsibility for voting and handling proxies in relation to the securities held as Assets in the Portfolio; and WHEREAS, the Adviser and Sub-Adviser also desire to amend certain provisions of the Agreement to reflect amendments by the U.S. Securities and Exchange Commission to Rules 10f-3, 12d3-1 and 17e-1 and adoption of new Rule 17a-10 under the Investment Company Act of 1940, as amended. NOW THEREFORE, in consideration of the foregoing and the mutual covenants herein contained, the parties hereby agree as follows: Section 1(h) of the Agreement is amended and restated as follows: (h) (i) Except under the circumstances set forth in subsection (ii), the Sub-Adviser shall not be responsible for reviewing proxy solicitation materials or voting and handling proxies in relation to the securities held as Assets in the Portfolio. The Sub-Adviser shall instruct the custodian and other parties providing services to the Portfolio to promptly forward misdirected proxies to the Adviser. (ii) The Sub-Adviser hereby agrees that upon 60 days' written notice from the Adviser, the Sub-Adviser shall assume responsibility for reviewing proxy solicitation materials and voting proxies in relation to the securities held as Assets in the Portfolio. As of the time as the Sub-Adviser shall assume such responsibilities with 1 respect to proxies under this sub-section (ii), the Adviser shall instruct the custodian and other parties providing services to the Portfolio to promptly forward misdirected proxies to the Sub-Adviser. The following paragraph is added to the Agreement as Section 1(i): (i) In performance of its duties and obligations under this Agreement, the Sub-Adviser shall not consult with any other sub-adviser to the Portfolio or a sub-adviser to a portfolio that is under common control with the Portfolio concerning the Assets, except as permitted by the policies and procedures of the Portfolio. The Sub-Adviser shall not provide investment advice to any assets of the Portfolio other than the Assets. Except as expressly superseded or modified by this Amendment, the terms and provisions of the Agreement shall continue to apply with full force and effect. IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their officers designated below as of the day and year first written above. SEI INVESTMENTS MANAGEMENT CORPORATION SALOMON BROTHERS ASSET MANAGEMENT INC By: /s/ Todd Cipperman By: /s/ Peter Wilby ------------------------------ ----------------------------- Name: Todd Cipperman Name: Peter Wilby ------------------------------ ----------------------------- Title: Senior Vice President Title: Managing Director ------------------------------ ----------------------------- 2 EX-99.B(I) 19 a2123004zex-99_bi.txt EX-99.B(I) Exhibit 99.B(i) 1701 Market Street Morgan, Lewis Philadelphia, PA 19103-2921 & Bockius LLP 215.963.5000 Counselors at Law Fax: 215.963.5001 January 28, 2004 SEI Institutional International Trust One Freedom Valley Drive Oaks, Pennsylvania 19456 Re: Opinion of Counsel regarding Post-Effective Amendment No. 37 to the Registration Statement filed on Form N-1A under the Securities Act of 1933 (File No. 33-22821). -------------------------------------------------------------------------- Ladies and Gentlemen: We have acted as counsel to SEI Institutional International Trust, a Massachusetts business trust (the "Trust"), in connection with the above-referenced Registration Statement (as amended, the "Registration Statement") which relates to the Trust's units of beneficial interest, without par value (collectively, the "Shares"). This opinion is being delivered to you in connection with the Trust's filing of Post-Effective Amendment No. 37 to the Registration Statement (the "Amendment") to be filed with the Securities and Exchange Commission pursuant to Rule 485(b) of the Securities Act of 1933 (the "1933 Act"). With your permission, all assumptions and statements of reliance herein have been made without any independent investigation or verification on our part except to the extent otherwise expressly stated, and we express no opinion with respect to the subject matter or accuracy of such assumptions or items relied upon. In connection with this opinion, we have reviewed, among other things, executed copies of the following documents: (a) a certificate of the Commonwealth of Massachusetts as to the existence of the Trust, which is duly authorized and validly existing under the laws of the Commonwealth of Massachusetts; (b) the Agreement and Declaration of Trust for the Trust and all amendments and supplements thereto (the "Declaration of Trust"); (c) a certificate executed by Timothy D. Barto, Vice President and Secretary of the Trust, certifying as to, and attaching copies of, the Trust's Declaration of Trust and By-Laws (the "By-Laws"), and certain resolutions adopted by the Board of Trustees of the Trust authorizing the issuance of the Shares; and (d) a printer's proof of the Amendment. In our capacity as counsel to the Trust, we have examined the originals, or certified, conformed or reproduced copies of all records, agreements, instruments and documents as we have deemed relevant or necessary as the basis for the opinion hereinafter expressed. In all such examinations, we have assumed the legal capacity of all natural persons executing documents, the genuineness of all signatures, the authenticity of all original or certified copies, and the conformity to original or certified copies of all copies submitted to us as conformed or reproduced copies. As to various questions of fact relevant to such opinion, we have relied upon, and assume the accuracy of, certificates and oral or written statements of public officials and officers and representatives of the Trust. We have assumed that the Amendment, as filed with the Securities and Exchange Commission, will be in substantially the form of the printer's proof referred to in paragraph (d) above. Based upon, and subject to, the limitations set forth herein, we are of the opinion that the Shares, when issued and sold in accordance with the Declaration of Trust and By-Laws, and for the consideration described in the Registration Statement, will be legally issued, fully paid and non-assessable under the laws of the Commonwealth of Massachusetts. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. In giving this consent, we do not concede that we are in the category of persons whose consent is required under Section 7 of the 1933 Act. Very truly yours, /s/ Morgan, Lewis & Bockius LLP EX-99.B(J) 20 a2123004zex-99_bj.txt EX-99.B(J) Exhibit 99.B(j) CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in this Registration Statement on Form N-1A of our report dated November 21, 2003, relating to the financial statements and financial highlights which appear in the September 30, 2003 Annual Report to Shareholders of SEI Institutional International Trust, which is also incorporated by reference into the Registration Statement. We also consent to the references to us under the headings "Financial Highlights" and "Experts" in such Registration Statement. /s/ PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP Philadelphia, Pennsylvania January 28, 2003 EX-99.B(P)(3) 21 a2123004zex-99_bp3.txt EX-99.B(P)(3) Exhibit 99.B(p)(3) CODE OF ETHICS All of us within the Capital organization are responsible for maintaining the very highest ethical standards when conducting business. In keeping with these standards, we must always place the interests of clients and fund shareholders ahead of our own. Over the years we have earned a reputation for the highest integrity. Regardless of lesser standards that may be followed through business or community custom, we must observe exemplary standards of honesty and integrity. Accordingly, we have adopted certain standards as described below for the purpose of deterring wrongdoing and promoting: 1) honest and ethical conduct; 2) full, fair, accurate, timely and understandable disclosure in reports and documents; 3) compliance with applicable laws, rules, and regulations; 4) the prompt internal reporting of violations of our Code of Ethics; and 5) accountability for adherence to our Code of Ethics. GENERAL GUIDELINES Although specific policies are discussed in more detail below, these are general guidelines that all CGC associates should be aware of: - It is a crime in the U.S. and many other countries to transact in a company's securities while in possession of material nonpublic information about the company. If there is any question as to whether you've received material information (typically from a company "insider") you should contact any member of the legal staff to discuss. [A more in-depth description of insider trading is available in CGC's Handbook for Associates.] - You should not knowingly misrepresent, or cause others to misrepresent, facts about CGC to clients, fund shareholders, regulators, or any other member of the public. Disclosure in reports and documents should be fair and accurate. - You should not accept extravagant gifts or entertainment from persons or companies who are trying to solicit business from any of the CGC companies. CGC's Gifts and Entertainment Policy is summarized below, and a copy of the full policy is available on the CGWeb. - Regardless of whether you are determined to be a "covered person" under CGC's Personal Investing Policy (which is summarized below and a full copy of which is available on the CGWeb), please keep the following in mind when considering making personal investments: - CGC associates and their immediate family members residing in their household MAY NOT PARTICIPATE in Initial Public Offerings (IPOs). Although exceptions are rarely granted, they will be considered in the case of a family member employed by the IPO company where IPO shares are considered part of that family member's compensation. 1 - You should not trade based on any CGC company's confidential, proprietary investment information where fund or client trades are likely to be pending (for example, analyst research reports, investment meeting discussions or notes, current fund/client transaction information). - YOU SHOULD NOT ENGAGE IN EXCESSIVE TRADING OF THE AMERICAN FUNDS OR ANY OTHER CAPITAL-MANAGED INVESTMENT VEHICLES WORLDWIDE. EXCESSIVE ACTIVITY, SUCH AS A FREQUENT PATTERN OF EXCHANGES, COULD INVOLVE ACTUAL OR POTENTIAL HARM TO SHAREHOLDERS OR CLIENTS. Note that this applies to your spouse and any other immediate family members. - ASSOCIATES ARE DISCOURAGED FROM SERVING ON THE BOARD OF DIRECTORS OR ADVISORY BOARD of any public or private company (this does not apply to boards of CGC companies or funds). You must receive approval prior to serving on a board, except for boards of charitable organizations or other non-profit organizations, by contacting Cheryl Ruff (CAR). - Failure to adhere to our Code of Ethics may result in disciplinary action being taken, including termination. REPORTING VIOLATIONS You have a responsibility to report violations of our Code of Ethics, including: (i) fraud or illegal acts involving any aspect of our business; (ii) noncompliance with applicable laws, rules and regulations; (iii) intentional or material misstatements in our regulatory filings, internal books and records or client records or reports; or (iv) activity that is harmful to our clients or fund shareholders. Deviations from controls or procedures that safeguard the company, including the assets of shareholders and clients, should also be reported. Reported violations of the Code of Ethics will be investigated and appropriate actions will be taken. You can report confidentially to: - Your manager or department head - CGC Audit Committee: Thomas M. Rowland - Chairman Eugene D. Barron James M. Brown Larry P. Clemmensen Roberta A. Conroy Paul G. Haaga Thomas J. Hamblin J. Dale Harvey Ida Levine John V. McLaughlin Donald D. O'Neal John H. Phelan James P. Ryan John H. Smet Antonio Vegezzi 2 Catherine M. Ward J. Kelly Webb - Mike Downer or any other lawyer employed by the Capital organization - Rob Helm with the law firm Dechert LLP CGC GIFTS AND ENTERTAINMENT POLICY - CONFLICTS OF INTEREST A conflict of interest occurs when the private interests of associates interfere or could potentially interfere with their responsibilities at work. Associates must not place themselves or the company in a position of actual or potential conflict. Associates may not accept gifts worth more than $100, excessive business entertainment, loans, or anything else involving personal gain from those who conduct business with the company. In addition, a business entertainment event exceeding $200 in value should not be accepted unless the associate receives permission from the Gifts and Entertainment Policy Committee. Gifts or entertainment that are reimbursed by Capital do not need to be reported (or pre-cleared). The expenses, however, are subject to the approval of the associate's manager. When giving a gift or extending entertainment on behalf of Capital, it is important to keep in mind that giving an extravagant gift or entertaining excessively or lavishly may create the appearance of conflict. Associates should also be aware that certain laws or rules may prohibit or limit gifts or entertainment extended to public officials -- especially those responsible for investing public funds. POLITICAL AND CHARITABLE CONTRIBUTIONS In soliciting political or charitable donations from various people in the business community, associates must never allow the present or anticipated business relationships of CGC or any of its affiliates to be a factor in soliciting such contributions. In addition, certain associates are subject to additional restrictions due to their involvement with "College America," the American Funds 529 College Savings Plan. REPORTING Although the limitations on accepting gifts applies to ALL associates as described above, some associates will be asked to fill out quarterly reports. If you receive a reporting form, you must report any gift exceeding $50 in value (although it is recommended that you report ALL gifts received) and business entertainment in which an event exceeds $75. GIFTS AND ENTERTAINMENT POLICY COMMITTEE The Gifts and Entertainment Policy Committee oversees administration of and compliance with the Policy. 3 INSIDER TRADING Antifraud provisions of U.S. securities laws as well as the laws of other countries generally prohibit persons in possession of material non-public information from trading on or communicating the information to others. Sanctions for violations can include civil injunctions, permanent bars from the securities industry, civil penalties up to three times the profits made or losses avoided, criminal fines and jail sentences. While investment research analysts are most likely to come in contact with material nonpublic information, the rules (and sanctions) in this area apply to all CGC associates and extend to activities both within and outside each associate's duties. SERVING ON A BOARD OF DIRECTORS OR ADVISORY BOARD CGC associates should obtain authorization prior to serving on the boards of directors or on the advisory boards of public or private companies by calling Cheryl Ruff (this does not apply to boards of CGC companies or funds). In general, associates should refrain from serving on boards of public or private companies. Serving on the board of a charitable organization or other non-profit organization DOES NOT REQUIRE authorization. In addition, certain CGC associates will be sent a form annually and asked to disclose their board positions. PERSONAL INVESTING POLICY As an associate of the Capital Group companies, you may have access to confidential information. This places you in a position of special trust. You are associated with a group of companies that is responsible for the management of many billions of dollars belonging to mutual fund shareholders and other clients. The law, ethics and our own policy place a heavy burden on all of us to ensure that the highest standards of honesty and integrity are maintained at all times. There are several rules that must be followed to avoid possible conflicts of interest in personal investments. Keep in mind, however, that placing the interests of clients and fund shareholders first is the core principle of our policies and applies even if the matter is not covered by a specific provision. The following is only a summary of the CGC Personal Investing Policy, the full text of which is available on the CGC website. Please refer to the CGC Personal Investing Policy for more detailed information about personal investing rules. ALL ASSOCIATES Information regarding proposed or partially completed plans by CGC companies to buy or sell specific securities must not be divulged to outsiders. Associates who receive information about recommendations to purchase or sell securities or impending fund or client account transactions should refrain from trading personally on the information. In 4 addition, associates (including spouses) should not engage in excessive trading of the American Funds to take advantage of short-term market movements. This type of action potentially harms other fund shareholders. Finally, favors or preferential treatment from stockbrokers may not be accepted. ASSOCIATES MAY NOT SUBSCRIBE TO ANY INITIAL PUBLIC OFFERING (IPO). Generally, this prohibition applies to spouses of associates and any family member residing in the same household. However, an associate may request that the Personal Investing Committee consider granting an exception under special circumstances. THE FOLLOWING PROVISIONS APPLY ONLY TO ASSOCIATES COVERED UNDER THE PERSONAL INVESTING POLICY. COVERED PERSONS You are a "covered person" if you receive and use investment information relating to current or imminent fund/client transactions in connection with your regular duties. If you receive a quarterly personal investing disclosure form, you are considered a covered person. Covered persons must conduct their personal securities transactions in such a way that they do not conflict with the interests of the funds and client accounts. This policy also includes securities transactions of family members living in the covered person's household and any trust or custodianship for which the associate is trustee or custodian. A conflict may occur if you, or a family member in the same household, or a trust or custodianship for which you are trustee or custodian, have a transaction in a security when the funds or client accounts are considering or concluding a transaction in the same security. Additional rules apply to "investment associates" including portfolio counselors/managers, investment analysts and research associates, trading associates including trading assistants, and investment administration, portfolio control and fixed income control associates including assistants (see below). PROHIBITED TRANSACTIONS FOR COVERED PERSONS - IPO investments - Writing puts and calls on securities that are subject to pre-clearance - Short sales of securities that are subject to pre-clearance PRE-CLEARANCE OF SECURITIES TRANSACTIONS Covered persons must receive approval before buying or selling securities including (but not limited to): - stocks of companies (public or private, including purchases through private placements) - bonds that are rated below A - venture capital partnerships - options (the exercise of options must also be pre-cleared) 5 - closed-end funds including investment trust companies - index funds or exchange-traded funds that are not on the pre-approved list of index funds/ETFs - transactions in the above securities in PEP and ISA accounts (available in the U.K. only) over which you have discretion must be pre-cleared You will generally receive a response within one business day. Unless a different period is specified, clearance is good until the close of the New York Stock Exchange ("NYSE") on the day that you check. Associates from offices outside the U.S. and/or associates trading on non-U.S. exchanges are usually granted enough time to complete their transaction during the next available trading day. If you have not executed your transaction within this period, you must again pre-clear your transaction. Note that investments in private placements and venture capital partnerships must be pre-cleared and reported and are subject to special review. In addition, opportunities to acquire a stock that is "limited" (i.e., a broker-dealer is only given a certain number of shares to sell and is offering the opportunity to buy) may be subject to the Gifts and Entertainment Policy. EXCEPTION FOR DE MINIMIS TRANSACTIONS THE DE MINIMIS EXCEPTION IS NOT AVAILABLE FOR CIKK ASSOCIATES (A CGC COMPANY BASED IN TOKYO) OR ASSOCIATES CONSIDERED INVESTMENT ASSOCIATES: portfolio counselors/managers, investment analysts and research associates, trading associates including trading assistants, and investment administration, portfolio control and fixed income control associates including assistants. All other covered associates may execute ONE TRANSACTION (EITHER A BUY OR A SELL) OF 100 SHARES OR LESS PER ISSUER PER CALENDAR MONTH without pre-clearance. You must, however, still report these trades on your quarterly form. Larger or more frequent share transactions must be pre-cleared. IF AN ASSOCIATE PRE-CLEARS A TRANSACTION AND IS DENIED PERMISSION, S/HE MAY NOT EXECUTE A DE MINIMIS TRANSACTION IN THAT ISSUER WITHOUT PRE-CLEARANCE FOR A PERIOD OF SEVEN CALENDAR DAYS. REPORTING TRANSACTIONS Covered persons must PROMPTLY submit quarterly disclosure of certain transactions. You will receive reporting forms each quarter THAT ARE DUE NO LATER THAN 10 DAYS AFTER THE END OF THE QUARTER. Transactions of securities (including fixed-income securities) or options must be pre-cleared as described above and reported except as outlined below: 6 REPORT ONLY (NO NEED TO PRE-CLEAR): - de minimis transactions (see above) - distributions of stock from venture capital partnerships - gifts or bequests (either receiving or giving) of securities (note that sales of securities received as a gift must be both pre-cleared and reported) - bonds rated "A" or above by at least one national rating service (including bonds issued by governments outside the U.S. that are rated "A" or above) - sales pursuant to tender offers - dividend reinvestments - options or futures on currencies - options or futures or purchases or sales of certain pre-approved index funds/ETFs (see full policy on the CGWeb) DO NOT PRE-CLEAR OR REPORT: - open-end investment companies (mutual funds, OEICs and Luxembourg or French SICAVs or FCPs) Note: in the U.K., open-end investment companies include unit trusts and OEICs, but not investment trust companies, which must be pre-cleared and reported - money market instruments with maturities of one year or less - direct obligations of the U.S. Government (which are exempted by U.S. law from preclearance and reporting requirements) - bankers' acceptances, CDs or other commercial paper - currencies - commodities - transactions in accounts for which you have completely turned over investment decision-making authority to a professional money manager (see "Professionally Managed Accounts" below) PERSONAL INVESTING SHOULD BE VIEWED AS A PRIVILEGE, NOT A RIGHT. AS SUCH, THE PERSONAL INVESTING COMMITTEE MAY PLACE LIMITATIONS ON THE NUMBER OF PRE-CLEARANCES AND/OR TRANSACTIONS. SECURITIES ACCOUNTS 1. DISCLOSURE OF SECURITIES ACCOUNTS You must disclose the following types of accounts: - accounts currently holding securities that are subject to pre-clearance or reporting - accounts that have the ability to hold securities that are subject to pre-clearance or reporting - PEP and ISA accounts that hold securities subject to pre-clearance and reporting - accounts where you (or immediate family members residing with you) have completely turned over investment decision-making authority to a professional money manager 7 You do not need to disclose accounts that can only hold open-end mutual funds or cash or cash equivalents. 2. DUPLICATE ACCOUNT STATEMENTS AND TRADE CONFIRMATIONS You must submit duplicate statements and trade confirmations (or other equivalent documentation) for accounts currently holding securities that are subject to pre-clearance and/or reporting. Covered persons should inform their investment broker-dealers that they are employed by an investment organization. In addition, covered persons must direct their broker-dealers to send duplicate trade confirmations and account statements (or other equivalent documentation) for all new or existing accounts on a timely basis to the appropriate address listed below. If they are not able to send duplicates directly, you must submit copies of all trade confirmations and account statements AS SOON AS THEY BECOME AVAILABLE. ALL DOCUMENTS RECEIVED ARE KEPT STRICTLY CONFIDENTIAL.(1) If you would like a sample letter to use to notify your securities firm, bank or money management firm of this requirement, please call the pre-clear line. If your broker will be sending confirmation statements for an immediate family member with a different last name than you, you should inform the staff of the Personal Investing Committee by calling the pre-clear line with the name of the family member and that person's relationship to you. 3. PROFESSIONALLY MANAGED ACCOUNTS If you have an account where you have COMPLETELY turned over decision-making authority to a professional money manager (who is not covered by our policy), you should have a signed "Professionally Managed Account Exception Memo" on file with the staff of the Personal Investing Committee. (This memo is not required for PIM accounts.) You must disclose the existence of these accounts and provide the account numbers on your personal investing disclosure forms. You do not need to pre-clear or report securities transactions in these accounts. ANNUAL DISCLOSURE OF PERSONAL SECURITIES HOLDINGS Covered persons are required to disclose all of their portfolio holdings subject to the personal investing policy (and the holdings of any immediate family members residing with them) upon commencement of employment (or upon becoming a covered person) and thereafter on an annual basis. Disclosure forms will be supplied. - ---------- (1) Information about particular transactions may be provided to an associate's supervisor or appropriate Human Resources manager by Personal Investing Committee staff where the transactions are in violation of the Policy, may impact the associate's job performance, or raise conflict of interest-related issues. 8 ANNUAL RECERTIFICATION All covered persons are required to certify at least annually that they have read and understood the Code of Ethics. Further, covered persons are required to certify at least annually that they have complied with the requirements of the Code of Ethics and that they have disclosed or reported all personal securities transactions required to be disclosed or reported pursuant to the requirements of the code. ADDITIONAL POLICIES FOR "INVESTMENT ASSOCIATES" 1. INVESTMENT ASSOCIATES Unless otherwise specified, the term "investment associates" includes: portfolio counselors/managers, investment analysts and research associates, trading associates including trading assistants, and investment administration, portfolio control and fixed income control including assistants. 2. DISCLOSURE OF PERSONAL OWNERSHIP OF RECOMMENDED SECURITIES Portfolio counselors/managers and analysts will be asked on a regular basis to disclose securities that they own both personally and professionally and, for analysts, securities that they hold personally that are within their research coverage. This disclosure will be reviewed on a periodic basis by the staff of the Personal Investing Committee and may also be reviewed by applicable Investment Committees, Sub-Committees or other appropriate CGC Committees. In addition, to the extent that disclosure has not already been made to the Personal Investing Committee (by including information on the quarterly form), any associate who is in a position to recommend the purchase or sale of securities by the fund or client accounts that s/he personally owns should FIRST disclose such ownership either in writing (in a company write-up) or verbally (when discussing the company at investment meetings) prior to making a recommendation.(2) If you have any questions, you should contact the staff of the Personal Investing Committee. 3. BLACKOUT PERIODS Investment associates may not buy or sell a security during a period beginning seven calendar days before and ending seven calendar days after a fund or client account transacts in that issuer. The blackout period applies to trades in the same management company with which the associate is affiliated. If a fund or client account transaction takes place in the seven calendar days following a pre-cleared transaction by an investment associate, the personal transaction may be reviewed by the Personal Investing Committee to determine the appropriate action, if any. For example, the Committee may recommend that the associate be subject to a price adjustment to ensure that he or she has not received a better price than the fund or client account. - ---------- (2) Note that this disclosure requirement is consistent with both AIMR standards as well as the ICI Advisory Group Guidelines. 9 4. BAN ON SHORT-TERM TRADING PROFITS Investment associates are generally prohibited from profiting from the purchase and sale or sale and purchase of the same (or equivalent) securities within 60 days. THIS RESTRICTION APPLIES TO THE PURCHASE OF AN OPTION AND THE EXERCISE OF THE OPTION WITHIN 60 DAYS. OTHER CONSIDERATIONS Associates may not accept negotiated commission rates or any other terms that they believe may be more favorable than the broker-dealer grants to accounts with similar characteristics. U.S. broker-dealers are subject to certain rules designed to prevent favoritism toward such accounts. PERSONAL INVESTING COMMITTEE Any questions or hardships that result from these policies or requests for exceptions should be referred to CGC's Personal Investing Committee by calling the staff of the Personal Investing Committee. 10 EX-99.B(P)(9) 22 a2123004zex-99_bp9.txt EX-99.B(P)(9) Exhibit 99.B(p)(9) ASHMORE INVESTMENT MANAGEMENT LIMITED CODE OF ETHICS (Latest revision 27 February 2003) PURPOSE Ashmore Investment Management Limited ("Ashmore") provides investment advisory services to various clients and accounts, which may include investment companies registered under the Investment Company Act 1940 as amended (" the Company Act") of the United States ("the Funds"). In accordance with the United States Investment Company Act 1940 Rule 17j-1 ("the Rule") the Funds and their investment advisers must adopt a written code of ethics, which is reasonably designed to prevent specific individuals ("Access Persons" - see below) from conducting their personal securities transactions in a manner that does not interfere with the transactions of any client or otherwise to take unfair advantage of their relationship with clients. In recognition of this duty, Ashmore has adopted this Code of Ethics ("the Code"), which is in compliance with the Rule, and which shall be applied across all UK registered corporate entities within the Ashmore Group of Companies under the ownership of Ashmore Group Limited. Any references in the Code to "Ashmore" or "Ashmore Group" will be interpreted to mean any and all of such corporate entities. Ashmore must submit the Code to the Funds' boards of directors for approval before its initial appointment as investment adviser. Before doing so, Ashmore must certify to the Funds' boards of directors that it has adopted procedures reasonably necessary to prevent Access Persons from violating the Code. Ashmore will submit subsequent material changes to the Code to the Funds' boards of directors within three months of such changes coming into effect. RELATIONSHIP WITH ASHMORE COMPLIANCE MANUAL Ashmore maintains a detailed Compliance Manual which is intended to satisfy the wide range of rules and regulations of its primary regulator, the UK Financial Services Authority (FSA) that are relevant to the Ashmore Group's activities. Ashmore also maintains other written Policies and Procedures, which govern the way in which Ashmore Group staff fulfill their day-to-day responsibilities. The Code comprises relevant extracts from Ashmore's Compliance Manual and Policies and Procedures documents (together "the Manual"), which separately are in compliance with individual sections of the Rule. Such extracts have been drawn together to create a single document for registration as an exhibit to the necessary United States Securities and Exchange Commission ("SEC") filings of the Funds. Accordingly, compliance with the Manual automatically confirms compliance with the Code. Ashmore staff are required to sign a declaration that they have read and understood the Manual and will abide by the policies therein at all times. Failure to observe compliance guidelines and policies may result in disciplinary proceedings against them. ACCESS PERSONS The Rule requires compliance with the Code by persons defined as "Access Persons". Ashmore has examined such definition, and is fully satisfied that persons defined and referred to in the Manual and below as "Approved Persons" are at least equivalent to "Access Persons". In certain circumstances, Ashmore requires compliance with the Code by all staff. Accordingly, Ashmore is satisfied that the Code more than meets the requirements of Rule 17j-1 in this respect. ASHMORE'S COMPLIANCE AND REPORTING OBLIGATIONS Ashmore's Compliance Officer undertakes a regular compliance monitoring programme ("CMP"), the depth and frequency of its elements being structured to take account of compliance risk. Ashmore is satisfied that the CMP, which is sufficiently flexible to accommodate changes in business patterns, or to concentrate on specific areas that require attention, includes monitoring procedures that are capable of identifying material issues arising in connection with or material violations of the Code should they occur. No less frequently than annually, Ashmore must furnish to the Funds' board of directors, and the board of directors must consider, a written report that: a) Describes any issues arising under the Code or procedures since the last report to the board of directors, including, but not limited to, information about material violations of the Code or procedures and sanctions imposed in response to the material violations; and b) Certifies that Ashmore has adopted procedures reasonably necessary to prevent Access Persons from violating the Code. EXTRACTS FROM THE MANUAL (NUMBERING BELOW IS AS ESTABLISHED WITHIN THE MANUAL) (Bracketed references are to specific rules and guidance in the FSA Handbook of Rules and Guidance) 2. THE FSA PRINCIPLES FOR BUSINESSES Ashmore's reputation is crucial to the continued success of its business - ASHMORE AND ITS STAFF MUST ADHERE TO THE FOLLOWING FSA PRINCIPLES (PRIN2.1.1R) in their business activities: 1. Integrity - A firm must conduct its business with integrity. 2. Skill, care and diligence - A firm must conduct its business with due skill, care and diligence. 3. Management and control - A firm must take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems. 4. Financial prudence - A firm must maintain adequate financial resources. 5. Market conduct - A firm must observe proper standards of market conduct. 6. Customers' interests - A firm must pay due regard to the interests of its customers and treat them fairly. 7. Communications with clients - A firm must pay due regard to the information needs of its clients, and communicate information to them in a way which is clear, fair and not misleading. 8. Conflicts of interest - A firm must manage its conflicts of interest fairly, both between itself and its customers, and between a customer and another client. 9. Customers: relationships of trust - a firm must take reasonable care to ensure the suitability of its advice and discretionary decisions for any customer who is entitled to rely upon its judgment. 10. A firm must arrange adequate protection for clients' assets when it is responsible for them. 11. A firm must deal with its regulators in an open and co-operative way and must disclose to the FSA appropriately anything relating to the firm of which the FSA would reasonably expect notice. The FSA requires firms to apply these principles in whichever territory they conduct their business (or in respect of Principle 5 wherever contravention would have a negative effect on confidence the UK financial system). Additionally, if a regulation has a wider territorial scope than the UK, that wider scope must apply. Accordingly, these principles are intended to prevent "Unlawful Actions" as referred to in United States Investment Company Act 1940 Rule 17j-1b. Adherence with Section 5 of this Compliance Manual (The Approved Persons Regime and Code of Conduct) is also intended to prevent such "Unlawful Actions". NOTE TO ASHMORE STAFF: this Compliance Manual includes a CODE OF PRACTICE FOR APPROVED PERSONS and STATEMENTS OF PRINCIPLE to accompany it (in addition to the above Principles for Business). There is an emphasis on personal culpability, and if you breach the Code, sanctions against you may result - you may be fined, publicly censured or in extreme circumstances banned from employment in the financial services industry. For further information refer to SECTION 5 in this Compliance Manual. 5. THE APPROVED PERSONS REGIME AND CODE OF CONDUCT The Approved Persons Regime reflects the same broad tenets that have been in operation in the financial services industry for several years. In other words, a person who engages in regulated activities in a firm is responsible for the proper discharge of those activities. However, with effect from N2 (1st December 2001), the FSA has defined specific functions within a firm that only a person whom the FSA has approved ("approved persons") may carry out. These functions are known as "controlled functions" (specified in rule SUP10.4.5R). The purpose of the Approved Persons Regime is to direct enforcement against people who do not observe the seven "Statements of Principle" for approved persons. BREACHES MAY BE DEALT WITH BY PERSONAL CENSURE, FINE OR A BAN FROM FUTURE EMPLOYMENT IN THE INDUSTRY. YOU SHOULD THEREFORE BE AWARE HOW THE REGIME IMPACTS UPON YOU AND YOUR ROLE AT ASHMORE. 5.1 CONTROLLED FUNCTIONS The underlying purpose of "controlled functions" is to establish and mark the boundaries of the Approved Persons Regime. They are the functions that the FSA sees as key to the operation of the FSMA2000 regulated activities. By establishing these functions, the FSA can directly regulate an individual, thereby complementing the regulation of the authorised firm for which the "approved person" performs the function. The chart of Ashmore's controlled functions is set out below: Significant influence Governing functions CF1. Director functions CF2. Non-executive director CF3. Chief executive (the persons performing such Required functions CF8. Apportionment & oversight functions are CF10. Compliance oversight involved in CF11. Money laundering reporting development and operation of Systems and control CF13. Finance Ashmore's functions CF15. Internal audit governance, systems and Significant CF20. Significant management controls, including management (settlements) business strategy functions and ethical standards) Customer functions CF21. Investment adviser (not trainees) CF23. Corporate finance adviser CF27. Investment management
The most current chart detailing those individuals to whom the above controlled functions have been allocated (and who are registered with the FSA as "approved persons") is set out in APPENDIX 5.1. 5.2 APPROVED PERSONS An Approved Person covers more than someone who deals with or advises customers. An Approved Person falls into either or both of two categories of activity: - - You are an Approved Person if you deal directly with clients and client assets; - - You are also an Approved Person if you exercise significant influence over a firm IF YOU ARE AN APPROVED PERSON, THE MOST IMPORTANT ISSUE IS THE EMPHASIS PLACED BY THE FSA ON THE DIRECT ENFORCEMENT OF YOUR PERSONAL RESPONSIBILITY FOR THE PROPER PERFORMANCE OF YOUR JOB FUNCTION. If you are subject to the Approved Persons Regime, your name will appear alongside a Controlled Function in APPENDIX 5.1. If your name does not appear, you are still required to act in accordance with this Compliance Manual in carrying out your own role at Ashmore. The essence of a strong investment business is a positive compliance culture, and the Ashmore management expects consistent standards of conduct. 5.3 THE CODE OF PRACTICE FOR APPROVED PERSONS As part of the Approved Persons Regime, the FSA has set seven Principles for Approved Persons, and a Code of Practice. The Code provides examples of conduct that the FSA believes does not comply with the Principles. These will be summarised in SECTION 5.4 below. PERSONAL CULPABILITY - an Approved Person will only breach a Principle where he is personally culpable. This new personal culpability feature will arise in two circumstances: - - If your action (or inaction) was deliberate; - - If your standard of conduct did not meet reasonable standards. In making the determination of personal culpability, the FSA will take into account the precise circumstances of a situation, the characteristics of your function and the standards expected of a person in that function. CONSEQUENCES - a violation of the Principles can result in sanctions against Ashmore and its employees. The FSA can fine Ashmore, issue a public censure, or even review whether it continues to permit Ashmore to conduct business. SIMILARLY, THE FSA CAN FINE AND PUBLICLY CENSURE APPROVED PERSONS, AND IN EXTREME CIRCUMSTANCES, BAN THEM FROM THE INDUSTRY. 5.4 THE CODE AND THE PRINCIPLES The Code sets out a Principle, and then specifies examples of conduct that in the opinion of the FSA violates the Principle. The examples set out below are not exhaustive - but they are illustrative of the FSA's approach under the Code. PRINCIPLE 1 - AN APPROVED PERSON MUST ACT WITH INTEGRITY IN CARRYING OUT HIS CONTROLLED FUNCTION (APER2.1.2P) This requires an Approved Person to deal with others in an open, fair and honest manner. CONDUCT THAT VIOLATES PRINCIPLE 1 1. Deliberately misleading a client, Ashmore, its Compliance Officer or other officer, or the FSA by providing false or inaccurate information: - Falsifying or destroying documents or tapes; - Misleading a client about the risks of or charges for a transaction; - Misleading a client about likely investment performance by providing inappropriate projections of future investment returns; - Mismarking the value of an investment or a position - or procuring an unjustified alteration of prices on illiquid or off-exchange contracts; - Misleading Ashmore employees about the nature of risks being accepted; - Misrepresenting details of training received, qualifications, past employment or experience; - Failing to disclose personal dealings under the Ashmore Personal Account Dealing procedures. 2. Deliberately carrying out a discretionary transaction that is unsuitable for a fund or segregated account. 3. Deliberately failing to advise a customer or the FSA that they have misunderstood a material issue: - Failing to disclose the existence of a falsified document; - Failing to correct a mismarked position immediately. 4. Deliberately preparing inaccurate records or returns: - Inaccurate or inappropriate performance reports for customers (such as relying on past performance without the required warnings); - Preparing inaccurate trade confirmations or other records of transactions or customer positions. 4 Deliberately misusing a client's assets: - Churning a client's account - Misappropriating a client's assets or wrongly retaining its funds; - Wrongly using one client's funds for another client's or otherwise using a client's funds for purposes other than those for which they were provided; - Wrongfully pledging a client's assets as security or margin where not permitted to do so. 5 Deliberately designing a transaction to make it appear consistent with the FSA and other regulatory rules when it is not. 6 Deliberately not disclosing a conflict of interest. PRINCIPLE 2 - AN APPROVED PERSON MUST ACT WITH DUE SKILL, CARE AND DILIGENCE IN CARRYING OUT HIS CONTROLLED FUNCTION (APER2.1.2P) This requires an Approved Person to adopt the same ethic as with Principle 1, but it requires you to be competent and to have the necessary qualifications to do your job. CONDUCT THAT VIOLATES PRINCIPLE 2 1. Not informing a customer or Ashmore of information you should know you ought to disclose: - Mismarking positions; - Giving inaccurate information to other Ashmore staff or the auditors. 2. Recommending or advising on a transaction where you do not have a reasonable understanding of the risk to the customer of that transaction: - Not understanding the customer's actual or potential liability in a transaction; 3. Undertaking a transaction without understanding the risk exposure of the fund. 4. Not providing adequate control over a client's assets: - Failing to process a fund transaction in a timely manner. 5. Continuing your job in a controlled function even though you have failed to meet the prescribed standards of knowledge and skill. PRINCIPLE 3 - AN APPROVED PERSON MUST OBSERVE PROPER STANDARDS OF MARKET CONDUCT IN CARRYING OUT HIS CONTROLLED FUNCTION (APER2.1.2P) This requires an Approved Person to comply with the many and various conduct of business rules and codes of conduct for investment business. CONDUCT THAT IS CONSISTENT WITH PRINCIPLE 3 The code does not specify examples of violations - instead it states that compliance with the variety of market codes will suggest compliance with the Principle. PRINCIPLE 4 - AN APPROVED PERSON MUST DEAL WITH THE FSA AND WITH OTHER REGULATORS IN AN OPEN AND COOPERATIVE WAY AND MUST DISCLOSE APPROPRIATELY ANY INFORMATION OF WHICH THE FSA WOULD REASONABLY EXPECT NOTICE. (APER2.1.2P) The FSA has considerable powers to gather information in their regulation of the industry. A failure to cooperate with the FSA or to deal with them openly can entail serious legal and reputation consequences for a firm or its employees. CONDUCT THAT VIOLATES PRINCIPLE 4 1. Failing to report promptly matters that are of material significance to Ashmore. Examples would include, without limitation, a potential rule violation, a customer complaint, a suspicion of money laundering, or a change in your personal circumstances. Note: Under Ashmore's procedures, you should report such matters as referred to above to the Compliance Officer, who will take such further action as necessary. 2. Where the Approved Person is charged with the responsibility of making a report to the FSA, failing to make that report, whether in response to questions or otherwise. 3. Failing to answer accurately a question from a regulator - or failing to attend an interview requested or demanded by a regulator - or failing to provide a regulator with appropriate documents or information in response to that regulator's request. THE PRINCIPLES 1,2,3 AND 4 SET OUT ABOVE ARE APPLICABLE TO ALL APPROVED PERSONS AT ASHMORE, INCLUDING SENIOR MANAGEMENT. PRINCIPLES 5,6 AND 7 SET OUT BELOW ARE APPLICABLE TO SENIOR MANAGEMENT ONLY. PRINCIPLE 5 - AN APPROVED PERSON PERFORMING A SIGNIFICANT INFLUENCE FUNCTION MUST TAKE REASONABLE STEPS TO ENSURE THAT THE BUSINESS OF THE FIRM FOR WHICH HE IS RESPONSIBLE IN HIS CONTROLLED FUNCTION IS ORGANIZED SO THAT IT CAN BE CONTROLLED EFFECTIVELY. (APER2.1.2P) This requires the Chief Executive to implement clear apportionment and allocation of duties and responsibilities to management and staff, to keep them under review and update them as appropriate. It also requires all senior management to delegate duties to personnel with the appropriate levels of skill and experience. CONDUCT THAT VIOLATES PRINCIPLE 5 1. Failing to make and maintain apportionment of responsibilities for all business areas and to allocate and communicate them clearly to Ashmore's directors and senior managers and other staff: - Implementing confusing or uncertain reporting lines, and authorization levels; - Implementing confusing or uncertain job descriptions and responsibilities; - Failing to review regularly the significant responsibilities and to take action as necessary. 2. Failing to ensure that responsibilities are allocated to suitable individuals: - Failing to review staff competence, knowledge, skills and performance to assess their suitability, despite evidence that their performance is unacceptable; - Giving undue weight to a fund manager's financial performance when considering whether he is or remains suitable for his role; - Allowing managerial vacancies to remain uncovered when risk of non-compliance with regulations might exist. PRINCIPLE 6 - AN APPROVED PERSON PERFORMING A SIGNIFICANT INFLUENCE FUNCTION MUST EXERCISE DUE SKILL, CARE AND DILIGENCE IN MANAGING THE BUSINESS OF THE FIRM FOR WHICH HE IS RESPONSIBLE IN HIS CONTROLLED FUNCTION. (APER2.1.2P) This requires all senior management to understand the areas of business for which they are responsible, to delegate responsibly, to monitor staff, contractors and practices, and to expand the business only after careful consideration of the risks involved. CONDUCT THAT VIOLATES PRINCIPLE 6 1. Failing to take adequate steps to gain adequate information about the business area(s) for which you are responsible: - Permitting transactions without understanding the risks involved; - Permitting expansion of the business without considering the risks adequately; - Inadequately monitoring highly profitable or unusual transactions or business practices; - Accepting implausible or unsatisfactory explanations from staff without testing their voracity; - Failing to obtain independent expert opinion where necessary. 2. Delegation internally or externally without proper understanding of the issue or consideration of the delegate's competence, knowledge, skill or capacity to deal with the issue: - Disregarding the issue or failing to obtain relevant reports once it has been delegated. 3. Failure to supervise or monitor a delegated issue: - Failing to take personal action where progress is unreasonably slow or where you receive unsatisfactory explanations; - Failing to review the performance of an outside contractor to whom you have delegated an issue. PRINCIPLE 7 - AN APPROVED PERSON PERFORMING A SIGNIFICANT INFLUENCE FUNCTION MUST TAKE REASONABLE STEPS TO ENSURE THAT THE BUSINESS OF THE FIRM FOR WHICH HE IS RESPONSIBLE IN HIS CONTROLLED FUNCTION COMPLIES WITH THE RELEVANT REQUIREMENTS AND STANDARDS OF THE REGULATORY SYSTEM. (APER2.1.2P) This requires the Chief Executive and senior management to set up compliance procedures and controls, to monitor them, to examine breaches and to implement improvements where necessary. CONDUCT THAT VIOLATES PRINCIPLE 7 1. Failing to take adequate steps to implement satisfactory systems of control, either personally or through a compliance department, and to monitor compliance with regulatory requirements. 2. Failing to consider and understand breaches that have occurred, and to correct them, if necessary with the help of outside experts. 3. Failing to ensure that systems, procedures and controls are reviewed, and improved as appropriate in a timely manner. 4. In the case of the Money Laundering Reporting Officer, failing to discharge the responsibilities imposed upon him in accordance with Chapter 8 of the Money Laundering sourcebook. 5.5 REPORTING REQUIREMENTS RELATING TO CONTROLLED FUNCTIONS 5.5.1 ANNUAL REPORTING OF CONTROLLED FUNCTIONS Ashmore is required (by SUP10.9.8R), no later than 31st July each year to advise the FSA of the names of the approved persons who are carrying out significant management functions, together with their brief job description (unless within the 12 months preceding 30th June an interim report has already been made). 5.5.2 REPORTING OF CHANGES IN CONTROLLED FUNCTIONS AND APPROVED PERSONS The Compliance Officer maintains and monitors a control record of approved persons and controlled functions, supplemented by a file of correspondence and forms filed with the FSA. Ashmore is required to notify the FSA of certain changes in respect of controlled functions. Any changes under the following headings must be notified to the Compliance Officer, who will carry out the notification as required on the prescribed FSA form: - - appointment of a candidate to a controlled function (FORM A) (the individual may only perform the function after approval by the FSA (SUP10.12.1G)); - - withdrawal of an application for approval (FORM B) (SUP10.12.13R); - - change of responsibilities thereby creating a change from one controlled function to another (FORM E) or adding an additional controlled function (FORM A) (the individual may only perform the new function after approval by the FSA (SUP10.13.1G)); - - ceasing to perform a controlled function (FORM C) (notification required within 7 days of the change (SUP10.13.6R)); - - changes to an Approved Person's title, name or National Insurance number (notification required within 7 days of the change (SUP10.13.14R)), but not a change to private address (FORM D); - - awareness of information, which would reasonably be material to the assessment of a candidate's or an Approved Person's fitness or propriety (notification required as soon as practicable (SUP10.13.16R)). Where a change of employment is anticipated, where either a person is leaving Ashmore for another authorised firm, or joining Ashmore from another firm, both firms are required to act as soon as reasonably practicable in the appropriate exchange of information and references in accordance with rule SUP10.13.12R and guidance SUP10.13.13G. 10. INSIDER DEALING In brief, insider dealing involves the use of non-public price sensitive information about a company to deal in securities on a recognised stock exchange in order to make a profit or avoid a loss. In the United Kingdom, insider dealing is a criminal offence leading to imprisonment and/or a fine. An individual who has non-public information must not: - - deal in "price affected securities", whether for himself or on behalf of Ashmore; - - encourage another to deal in price affected securities (whether or not that other person knows they are price affected); or - - disclose the information to another person (other than in the proper performance of his employment). This prohibition applies to all securities traded on a regulated market and includes shares, corporate and government debt futures, options and warrants relating to those securities, index futures and options, OTC derivatives and other derivatives. "Inside information" means information which: - - relates to particular securities or a particular issuer of securities (not to securities generally); - - is specific or precise; - - has not been made public but, if it were made public, would be likely to have a significant effect on the price of the securities ("price affected securities"). Note that price affected securities may be those of another company in the same sector. However, inside information does not include "market information" (essentially, information about purchases and sales of securities, the price at which securities are bought and the parties doing the buying and selling, as long as it is reasonable for an individual to have acted on the information). For example, information about a secondary market placing would be market information, so it would not be insider dealing for salesmen to approach their clients in order to find places for the stock, thereby facilitating the transaction. There may be certain circumstances, however, where the size of the holding or its obvious origin could be deemed to be price sensitive information and the client should always be cautioned that the information is confidential and he should not therefore act on that information. Information is regarded as being public if: - - it is publicised in accordance with the rules of a regulated market in order to inform investors and their professional advisors; - - it appears in records legally required to be open to public inspection; - - it can be readily acquired by those likely to deal in the securities, or - - it is derived from information, which is made public. Information may be treated as being made public even though: - - it can be acquired only by persons exercising diligence or expertise; - - it is only communicated to a section of the public; - - it can only be acquired by observation; - - it can only be acquired on payment of a fee; - - it is publicised only outside the particular country. No Ashmore employee may dishonestly conceal any material facts for the purpose of inducing, or where he is reckless as to whether it may induce, another person (whether or not the person from whom the facts are concealed) to buy or sell an investment or to refrain from buying or selling an investment. This may include an Ashmore employee who conceals price sensitive information from a counter-party to induce him to deal if the concealment is dishonest. 17. PERSONAL ACCOUNT DEALING PRINCIPLE 3 - MANAGEMENT AND CONTROL - A FIRM MUST TAKE REASONABLE CARE TO ORGANISE AND CONTROL ITS AFFAIRS RESPONSIBLY AND EFFECTIVELY, WITH ADEQUATE RISK MANAGEMENT SYSTEMS. PRINCIPLE 8 - CONFLICTS OF INTEREST - A FIRM MUST MANAGE ITS CONFLICTS OF INTEREST FAIRLY, BOTH BETWEEN ITSELF AND ITS CUSTOMERS, AND BETWEEN A CUSTOMER AND ANOTHER CLIENT. The following rules are established in order to: - - maintain standards of conduct within Ashmore to the highest levels of integrity; - - ensure that the interest of clients take precedence over the interests of Ashmore staff; - - protect Ashmore staff from unfounded allegations of insider dealing or other abuses of confidential information. The spirit, and not only the letter, of the rules should be observed. 17.1 APPLICATION OF THE RULES These rules apply to all personal dealings in securities (defined below) by you (and your spouse), as an employee and/or director of Ashmore and applies whichever company within Ashmore employs you and whether you are permanent, temporary, contract or on probation. In addition to dealings by you for your own account the rules also apply to dealings by you: - - for the account of a "Connected Person" - that is, anyone connected with you by reason of a domestic or business relationship (other than solely because that person is a customer of Ashmore) such that you have influence over that person's judgement as to how to invest his property or exercise any rights attaching to securities; - - in your capacity as an executor or administrator of an estate, or as a trustee of a trust, in which a significant interest is held by you, or any associate of yours, or any company or partnership controlled by you or by such associate; - - otherwise in your capacity as a personal representative or a trustee, except where you are relying entirely on the advice of another person from whom it is appropriate to seek advice in the circumstances; and - - for the account of another person unless you do so in the course of your employment with Ashmore. The rules do NOT apply to any discretionary transaction entered into for you, and without prior communication with you, provided that the discretion is not exercised by Ashmore (see Section 17.7 below for investments in Ashmore funds), or any transaction by you concerning a life policy or units in an open-ended regulated collective investment scheme (authorised or recognised unit trust). For the purpose of these rules "securities" includes stocks and shares, debentures, bonds, units in unregulated collective investment schemes, government and public securities, certificates of deposit, warrants, futures, options, collateralised bond obligations (CBOs) and contracts for differences (e.g. forward rate agreements, interest rate swaps, market indices), whether UK or foreign, and whether listed or unlisted. Bets placed on proprietary betting instruments (such as IG index, City Index or similar indices) are also covered, but the use of such instruments by Ashmore staff is discouraged. "Securities" also includes any security as defined in section 2(a)(36) of the Investment Company Act of 1940 of the United States, and insofar as not included in the paragraph immediately above, includes any note, stock, treasury stock, security future, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security (including a certificate of deposit) or on any group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a "security", or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing. This definition of "securities" does not include: - - direct obligations of the Government of the United States; - - bankers' acceptances, bank certificates of deposit, commercial paper and high-quality short-term debt instruments, including repurchase agreements. - - shares issued by open-ended funds. These rules also apply to making any formal or informal offer to buy or sell, taking up rights on a rights issue, exercising conversion or subscription rights, exercising an option and buying or selling an investment under any offer, including a takeover or tender offer, which is made to the public or all (or substantially all) the holders of the investment concerned. You must take reasonable steps to ensure that any Connected Person acting on his own account observes the requirements of these rules as though they applied to him as well. 17.2 GENERAL RULE Ashmore staff may not invest in any emerging markets debt or equity except through Ashmore's own funds. Subject to the limitations and prohibitions set out in these rules, you may otherwise deal in securities. You must obtain the PRIOR WRITTEN APPROVAL of the Compliance Officer BEFORE undertaking transactions in futures, options, or contracts for differences. You must also obtain such PRIOR WRITTEN APPROVAL before undertaking transactions in an Initial Public Offering, or a Limited Offering (as such terms are defined in Rule 17j-1 (a) of the US Investment Company Act 1940). If it is the Compliance Officer wishing to undertake such transactions then the approval is from the Chief Executive. Any transaction approved by this procedure must be executed within 24 hours of the date of approval, or 4 weeks from the next dealing date in the case of Ashmore managed funds, otherwise the approval lapses. You should note that it is the duty of the Compliance Officer to check compliance with the Personal Account Dealing rules and this will be done on a regular basis. Breaches will be recorded in Ashmore's Breaches Register, and will be reported at the next meeting of the Risk and Compliance Committee, which may ultimately result in disciplinary action. 17.3 REPORTING PROCEDURES No later than 10 days after establishing the relationship, you must advise the Compliance Officer of any firm through which you transact any personal dealing and provide details of any discretionary investment management agreements you have entered into by providing the name of the party with whom you have such agreement, and the date of the agreement. The Compliance Officer will record this information in Ashmore's Personal Accounting Dealing files including the date on which you reported the relevant agreement. The Compliance Officer will write to each firm (broker) used by staff, requesting them to send a copy of all contract notes to the Compliance Officer and all members of staff will provide their agreement to this request if their broker so requires. You must inform any authorised person with or through whom you effect any transaction that you are an employee of Ashmore. The Compliance Officer will ensure that the contract notes received meet all the information that is required to be reported under Rule 17j-1(d) of the US Investment Company Act of 1940, so that with respect to any transaction during the quarter in which you had any direct or indirect beneficial ownership, they should state: - - The date of the transaction, the title, the interest rate and maturity date (if applicable), the number of shares and the principal amount of each Covered Security involved; - - The nature of the transaction (i.e., purchase, sale or any other type of acquisition or disposition); - - The price at which the transaction was effected; - - The name of the broker, dealer or bank with or through which the transaction was effected; and - - The date that the report was received. 17.3.1 QUARTERLY DECLARATION Following the end of each calendar quarter, the Compliance Officer will provide you with a declaration that you must sign and return to him within 10 days of the end of that calendar quarter. The declaration will confirm that you have met the requirements of Ashmore's Personal Account Dealing procedures and that you have provided information in respect of all broker arrangements to ensure full and complete capture by the Compliance Officer of your personal dealings in securities. If you have not provided complete information, your response must include information in respect of the missing securities, in the detail required in the section above, and details concerning omitted broker agreements. 17.3.2 ANNUAL HOLDINGS REPORT In accordance with the requirements of the US Investment Company Act of 1940 Rule 17j-1, within 30 days of the end of each calendar year, you are required to provide the Compliance Officer with an Annual Holdings Report containing the following information (up to date to within 30 days of the date on which you submit the report): - - The title, number of shares and principal amount of each security in which you had any direct or indirect beneficial ownership; - - The name of any broker, dealer or bank with whom you maintain an account in which any securities are held for your direct or indirect benefit. The Compliance Officer will record the date that your report is submitted to him, and as part of the CMP, will review all such reports for compliance with these procedures. The Compliance Officer will also provide you with a declaration that you must sign and return to him within 10 days of the end of that calendar quarter. The declaration will confirm that you have met the requirements of Ashmore's Personal Account Dealing procedures and that you have provided information in respect of all broker arrangements to ensure full and complete capture by the Compliance Officer of your personal dealings in securities. If you have not provided complete information, your response must include information in respect of the missing securities, in the detail referred to above, and details concerning omitted broker agreements. These rules also apply to non-executive directors of Ashmore, each of whom is obliged to notify the Compliance Officer within 14 days of any personal account dealing he has undertaken. If a non-executive director is also an employee of a regulated firm which has similar personal account dealing rules, then an annual confirmation from that firm's compliance officer that their "PAD" rules have been adhered to is sufficient, although the Compliance Officer should be permitted to inspect their records at any time on request. 17.4 CONFLICTS OF INTEREST AND DUTY You must not effect transactions in any security if to do so may, or may appear to, involve a conflict of your own interest with that of any customer or with your duty to any customer, or otherwise have an adverse effect upon the particular interests of any customer. You must not effect any transaction if you know or should know that Ashmore has accepted instructions from a customer, or has decided on behalf of a customer, to effect a transaction and the instructions or decisions have not yet been carried out. This applies whether or not Ashmore's transaction is likely to affect the price of the securities concerned, but it does not apply if Ashmore's order cannot be executed owing to a limit price attached to it or the order is of such a size that it cannot be completed. You must not accept any gift or inducement from any person, which is likely to conflict with your duties to any customer of Ashmore. You are not permitted to request or accept any financial accommodation, benefit or special dealing facilities from any stockbroker or dealer in securities outside the Ashmore group without the prior written consent of the Compliance Officer. You may not deal for an employee of another firm if you know or suspect that that employee is seeking to contravene or evade the provisions of any insider dealing regulations, the rules of his own organisation or the rules of any regulatory body responsible for the regulation of that firm. If you effect any transaction in securities with or on behalf of a customer whom you know to be an employee of a company or firm which carries on investment business and which relates to that particular investment, you must, unless you have good reason to believe that the company or firm has consented, inform the company or firm of the effecting of the transaction, its terms and the identity of the parties to it. You must not effect any transaction in securities if you know or should reasonably know that Ashmore is prohibited from effecting the transaction for its own account or otherwise under the rules of its regulator. If you are precluded by these rules from entering into a transaction, you must not procure any other person to enter into such a transaction or communicate any information or opinion to any person if you know, or have reason to believe, that the person will, as a result, enter into such a transaction, or counsel or procure some other person to do so. 17.5 EXCESSIVE AND SPECULATIVE DEALING Your personal dealings must not interfere with the performance of your duties nor must they be of such nature or extent as to risk bringing the business of Ashmore into disrepute. In particular this means: - - You must not carry out transactions, which you cannot afford to settle. - - Bear transactions (i.e. the sale of securities not owned by the seller) and uncovered options are not permitted. - - Same day trading in the same security and/or any related security of any type is prohibited other than in exceptional circumstances and then only if prior written permission has been obtained from the Compliance Officer. 17.6 INSIDE INFORMATION - INSIDER DEALING A summary of the main provisions of insider dealing is set out in SECTION 10 and staff must observe at all times the provisions of these regulations. Alleged insider dealing and misuse of inside information is a very serious matter for Ashmore and its staff. 17.7 STAFF DEALING IN FUNDS WHERE ASHMORE IS INVESTMENT MANAGER ("ASHMORE LINKED PRODUCTS") Ashmore staff investment in emerging markets has to be made through Ashmore's own funds. Staff should not be in any better position when investing in Ashmore linked products than other investors in those products. THEREFORE, IF YOU WISH TO MAKE ANY PURCHASE OR SALE YOU MUST COMMIT YOURSELF TO DOING SO AT LEAST 14 DAYS BEFORE THE DEALING DATE. This period is to enable any unpublished price-sensitive information of which you may be aware, to become publicly available prior to the dealing date. SHOULD YOU THEREFORE WISH TO DEAL, YOU SHOULD ENSURE THAT YOU HAVE AMPLE TIME TO OBTAIN COMPLIANCE APPROVAL AND TO SUBMIT YOUR ORDER BEFORE THE START OF THE TWO-WEEK PERIOD. OTHERWISE, YOUR PURCHASE MUST BE DEFERRED UNTIL THE NEXT AVAILABLE DEALING DAY. Any staff wishing to buy or sell any Ashmore funds must obtain the PRIOR written approval of the Compliance Officer. Application should be made on the form in APPENDIX 17.1 - CONSENT TO DEALING IN ASHMORE-LINKED PRODUCTS. IF YOU INVEST IN ASHMORE LINKED PRODUCTS YOU WILL NOT BE PERMITTED TO SELL THEM FOR A PERIOD OF AT LEAST 6 MONTHS. The 14-day commitment period referred to above may be waived by the signature of both the Chief Executive and the Compliance Officer, but it should be noted that such waivers will not normally be given. Neither of the Compliance Officer or the Chief Executive can waive the requirement for himself. Where the Compliance Officer or the Chief Executive wishes to deal within the period, the requirement may be waived by the other one of them. As with any personal trade, Compliance should be provided with a copy of the relevant contract note(s). When you place your order, if you are opening a new account with the administrator and a standing instruction is therefore not in place, you should inform the administrator: - - that you are an Ashmore employee (or your spouse, partner, etc for whom the deal is intended is your associate and you are an Ashmore employee), and - - that a copy of this and any future contract notes should be sent to the Ashmore Compliance Officer. For clarification, the following currently represent the Ashmore linked products: - - Ashmore Emerging Markets Liquid Investment Portfolio; - - First Emerging Markets CBO Ltd; - - Ashmore Local Currency Debt Portfolio; - - Ashmore Russian Debt Portfolio; - - Ashmore Emerging Markets Debt Fund; - - Ashmore SICAV Emerging Markets Debt Fund; - - Second Emerging Markets CBO Ltd; - - Ashmore Asian Recovery Fund; - - Ashmore Fund of Funds; - - Ashmore Russian Equity Fund; - - Ashmore Global Special Situations Fund; - - Ashmore Emerging Economy Portfolio. 17.8 EXISTING EMERGING MARKETS PORTFOLIOS Employees of Ashmore who were part of ANZ Group before the management buyout in February 1999 were subject to ANZ Group compliance procedures, which enabled them to hold emerging markets assets. When Ashmore compliance procedures were established after the buyout, there was no requirement to dispose of such assets. Such employees or their associates may therefore still be in possession of them. If you held emerging markets assets at that time, and continue to hold them, you should inform the Compliance Officer. Such assets may continue to be held or disposed of (see below), but may not be replaced unless in accordance with the PA Dealing procedures in this chapter. Before disposal, you must seek compliance approval, by completion of the form in Appendix 17.2 - Consent to Dealing in Emerging Markets Assets. Before a deal is compliance approved, the Compliance Officer will establish whether or not any fund will be dealing in the same asset. Approval will be granted for a period of 24 hours only - if you do not deal within this period, a fresh approval must be gained. 17.9 NEW EMPLOYEES New members of staff may join with existing investment portfolios. No later than 10 days after the date of commencement of your employment, you must report the following information (an Initial Holdings Report) to the Compliance Officer: - - The title, number of shares and principal amount of each security in which you had any direct or indirect beneficial ownership at the commencement date of your employment; - - The name of any broker, dealer or bank with whom you maintained an account in which any securities were held for your direct or indirect benefit at that date; and The Compliance Officer will record the date that your report is submitted. If you commence employment in breach of the Ashmore Personal Account Dealing rules, you should take immediate steps to rearrange your portfolio, so that you do comply forthwith. Details of the relevant breach should be brought to the attention of the Managing Director and Compliance Officer, who will agree and monitor your course of action. In cases of hardship only, the Managing Director may agree that a rule be waived, subject to Compliance approval. 17.10 RECORD KEEPING In accordance with COB7.13.11R, the Compliance Department will keep individual records by employee, including reports, dealing permissions granted, together with contract notes/broker statements etc for a period of five years after the relevant employee has ceased employment, and in accordance with Ashmore's Retention of Records policy, which also meets the record keeping requirements of Rule 17j-1(f) of the United States Investment Company Act 1940. 17.11 UNITED STATES SEC REQUIREMENTS The requirements of this whole Section 17 are considered to be materially in compliance with the requirements of the United States Investment Company Act 1940 Rule 17j-1. All records maintained in accordance with this section are to be made available to the SEC for their review on request. RETENTION OF RECORDS POLICY This policy describes the required period for the retention of records and is based upon FSA Rules for record keeping, the record keeping requirements of the Investment Company Act of 1940 in the United States, and the requirements of the Inland Revenue for financial records. Current working files will be retained within lockable cabinets, which will be locked each evening. All files taken from the cabinets during the working day are to be returned to the cabinets each evening to ensure they are secured overnight. Archived files will be kept in boxes and the boxes will be numbered and the contents listed on the outside of the box for ease of identification. A master list of all archive boxes and files will be maintained and a review of records in the archives will be undertaken at least once per annum to identify records, which can now be destroyed.
TYPE OF RECORD MINIMUM RETENTION PERIOD - --------------------------------------------- -------------------------------- Client files - current clients (includes Indefinitely general files, bibles and marketing files) Client files - terminated clients 3 years from date of termination Client files - original documents Indefinitely (safe custody) Transaction records: - - Cash records 3 years - - Trade tickets and confirmations 5 years from settlement - - NAV / revaluations Indefinitely - - Deal Books Indefinitely (safe custody) Finance and accounting records (all) 7 years Compliance files: - Correspondence with regulators Indefinitely - Advertising files 3 years - Personal Account Dealing records 5 years* - Customer categorisation 3 years from termination - Marketing categorisation Indefinitely - Breaches and complaints Indefinitely* - Compliance Manuals Indefinitely* - Other compliance related records As determined by compliance officer Records relative to the US Investment Company Act of 1940: - - Annual report submitted to the Board of a Fund 5 years* (Rule 17j-1(c)(2)(ii)) - - Record of all persons, who are or were required to make reports Record to reflect a complete under Rule17j-1, or who are or five year history* were responsible for reviewing such reports - - record of any decision (and reason for such decision) to approve the 5 years* acquisition by investment personnel of IPOs or Limited Offerings Counterparty documentation (ISDA/ISMA) 3 years from termination
*REQUIRED TO BE KEPT ON SITE AT PRINCIPAL PLACE OF BUSINESS. For any records not listed above, or in the case of any doubt, refer to the Compliance Officer for guidance. -----END PRIVACY-ENHANCED MESSAGE-----